1 EXHIBIT 4.1 CREDIT AGREEMENT ENERGY CORPORATION OF AMERICA

1
EXHIBIT 4.1

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CREDIT AGREEMENT

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ENERGY CORPORATION OF AMERICA

as Borrower

GENERAL ELECTRIC CAPITAL CORPORATION

as Agent

GECC CAPITAL MARKETS GROUP, INC.

as Syndication Agent

THE BANK OF NOVA SCOTIA

as Documentation Agent

and

CERTAIN FINANCIAL INSTITUTIONS

as Lenders

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$50,000,000

May 20, 1997

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TABLE OF CONTENTS

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ARTICLE I - Definitions and References . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
Section 1.1. Defined Terms . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
Section 1.2. Exhibits and Schedules; Additional Definitions . . . . . . . . . . . . . . . . . . . . 17
Section 1.3. Amendment of Defined Instruments . . . . . . . . . . . . . . . . . . . . . . . . . . . 17
Section 1.4. References and Titles . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17
Section 1.5. Calculations and Determinations . . . . . . . . . . . . . . . . . . . . . . . . . . . 17

ARTICLE II - The Loans . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
Section 2.1. Commitments to Lend; Notes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
Section 2.2. Requests for New Loans . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
Section 2.3. Continuations and Conversions of Existing Loans . . . . . . . . . . . . . . . . . . . 19
Section 2.4. Use of Proceeds . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20
Section 2.5. Fees . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20
Section 2.6. Optional Prepayments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21
Section 2.7. Mandatory Prepayments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21
Section 2.8. Initial Borrowing Base . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22
Section 2.9. Subsequent Determinations of Borrowing Base . . . . . . . . . . . . . . . . . . . . . 22

ARTICLE III - Payments to Lenders . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23
Section 3.1. General Procedures . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23
Section 3.2. Capital Reimbursement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24
Section 3.3. Increased Cost of Eurodollar Loans . . . . . . . . . . . . . . . . . . . . . . . . . . 24
Section 3.4. Availability . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25
Section 3.5. Funding, Losses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25
Section 3.6. Reimbursable Taxes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25
Section 3.7. Change of Applicable Lending Office . . . . . . . . . . . . . . . . . . . . . . . . . 27
Section 3.8. Replacement of Lenders . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27
Section 3.9 Participants . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27

ARTICLE IV - Conditions Precedent to Lending . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27
Section 4.1. Documents to be Delivered . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27
Section 4.2. Additional Conditions Precedent to First Loan . . . . . . . . . . . . . . . . . . . . 29
Section 4.3. Additional Conditions Precedent to All Loans . . . . . . . . . . . . . . . . . . . . . 29

ARTICLE V - Representations and Warranties . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 30
Section 5.1. No Default . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 30
Section 5.2. Organization and Good Standing . . . . . . . . . . . . . . . . . . . . . . . . . . . . 30
Section 5.3. Authorization . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 31
Section 5.4. No Conflicts or Consents . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 31
Section 5.5. Enforceable Obligations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 31
Section 5.6. Initial Financial Statements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 31
Section 5.7. Other Obligations and Restrictions . . . . . . . . . . . . . . . . . . . . . . . . . . 31
Section 5.8. Full Disclosure . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 32
Section 5.9. Litigation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 32

Section 5.10. Labor Disputes and Acts of God . . . . . . . . . . . . . . . . . . . . . . . . . . . . 32
Section 5.11. ERISA Plans and Liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 32
Section 5.12. Environmental and Other Laws . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 33
Section 5.13. Names and Places of Business . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 33
Section 5.14. Borrower's Subsidiaries . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 33
Section 5.15. Title to Properties; Licenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . 34
Section 5.16. Government Regulation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 34
Section 5.17. Insider . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 34

ARTICLE VI - Affirmative Covenants of Borrower . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 34
Section 6.1. Payment and Performance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 34
Section 6.2. Books' Financial Statements and Reports . . . . . . . . . . . . . . . . . . . . . . . 35
Section 6.3. Other Information and Inspections . . . . . . . . . . . . . . . . . . . . . . . . . . 37
Section 6.4. Notice of Material Events and Change of Address . . . . . . . . . . . . . . . . . . . 37
Section 6.5. Maintenance of Properties . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 38
Section 6.6. Maintenance of Existence and Qualifications . . . . . . . . . . . . . . . . . . . . . 38
Section 6.7. Payment of Trade Liabilities, Taxes, etc . . . . . . . . . . . . . . . . . . . . . . . 38
Section 6.8. Insurance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 38
Section 6.9. Performance on Borrower's Behalf . . . . . . . . . . . . . . . . . . . . . . . . . . . 38
Section 6.10. Interest . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 39
Section 6.11. Compliance with Agreements and Law . . . . . . . . . . . . . . . . . . . . . . . . . . 39
Section 6.12. Environmental Matters; Environmental Reviews . . . . . . . . . . . . . . . . . . . . . 39
Section 6.13. Evidence of Compliance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 40
Section 6.14. Solvency . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 40
Section 6.15. Maintenance of Liens on Eighty Percent of Properties . . . . . . . . . . . . . . . . . 40
Section 6.16. Perfection and Protection of Security Interests and Liens . . . . . . . . . . . . . . 40
Section 6.17. Bank Accounts; Offset . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 41
Section 6.18. Production Proceeds . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 41

ARTICLE VII - Negative Covenants of Borrower . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 42
Section 7.1. Indebtedness . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 42
Section 7.2. Limitation on Liens . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 43
Section 7.3. Hedging Contracts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 43
Section 7.4. Limitation on Mergers, Issuances of Securities . . . . . . . . . . . . . . . . . . . . 44
Section 7.5. Limitation on Sales of Property . . . . . . . . . . . . . . . . . . . . . . . . . . . 45
Section 7.6. Limitation on Distributions, Redemptions and Prepayments of Subordinated Notes . . . . 45
Section 7.7. Limitation on Investments and New Businesses . . . . . . . . . . . . . . . . . . . . . 46
Section 7.8. Limitation on Credit Extensions . . . . . . . . . . . . . . . . . . . . . . . . . . . 46
Section 7.9. Transactions with Affiliates . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 46
Section 7.10. Certain Contracts; Amendments; Multiemployer ERISA Plans . . . . . . . . . . . . . . . 46
Section 7.11. Current Ratio . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 47

Section 7.12. Tangible New Worth . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 47
Section 7.13. Interest Coverage . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 47
Section 7.14. Fiscal Year . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 47

ARTICLE VIII - Events of Default and Remedies . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 47
Section 8.1. Events of Default . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 47
Section 8.2. Remedies . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 50

ARTICLE IX - Agent . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 50
Section 9.1. Appointment and Authority . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 50
Section 9.2. Exculpation, Agent's Reliance, Etc . . . . . . . . . . . . . . . . . . . . . . . . . . 51
Section 9.3. Credit Decisions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 51
Section 9.4. Indemnification . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 51
Section 9.5. Rights as Lender . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 52
Section 9.6. Sharing of Set-Offs and Other Payments . . . . . . . . . . . . . . . . . . . . . . . . 52
Section 9.7. Investments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 53
Section 9.8. Benefit of Article IX . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 53
Section 9.9. Resignation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 53

ARTICLE X - Miscellaneous . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 54
Section 10.1. Waivers and Amendments; Acknowledgements . . . . . . . . . . . . . . . . . . . . . . . 54
Section 10.2. Survival of Agreements; Cumulative Nature . . . . . . . . . . . . . . . . . . . . . . 55
Section 10.3. Notices . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 56
Section 10.4. Payment of Expenses; Indemnity . . . . . . . . . . . . . . . . . . . . . . . . . . . . 56
Section 10.5. Joint and Several Liability; Parties in Interest . . . . . . . . . . . . . . . . . . . 57
Section 10.6. Assignments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 58
Section 10.7. Confidentiality . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 59
Section 10.8. Governing Law; Submission to Process . . . . . . . . . . . . . . . . . . . . . . . . . 60
Section 10.9. Limitation on Interest . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 61
Section 10.10. Termination: Limited Survival . . . . . . . . . . . . . . . . . . . . . . . . . . . . 61
Section 10.11. Severability . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 62
Section 10.12. Counterparts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 62
Section 10.13. Waiver of Jury Trial, Punitive Damages, etc . . . . . . . . . . . . . . . . . . . . . 62

SCHEDULES
Schedule 1. Disclosure Schedule
Schedule 2. Security Schedule
Schedule 3. Lenders Schedule
Schedule 4. Insurance Schedule

EXHIBITS
Exhibit A. Note
Exhibit B. Borrowing Notice
Exhibit C. Continuation/Conversion Notice
Exhibit D. Certificate Accompanying Financial Statements

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Exhibit E. Assignment and Acceptance
Exhibit F. Form of Subsidiary Guaranty
Exhibit G. Opinion of Borrower's Counsel

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CREDIT AGREEMENT

THIS CREDIT AGREEMENT is made as of May 20, 1997, by and among Energy
Corporation of America, a West Virginia corporation (herein called "Borrower"),
General Electric Capital Corporation ("GE Capital"), individually and as agent
(herein called "Agent") and the Lenders referred to below. In consideration of
the mutual covenants and agreements contained herein the parties hereto agree
as follows:

ARTICLE I - Definitions and References

Section 1.1. Defined Terms. As used in this Agreement, each of the
following terms has the meaning given it in this Section 1.1 or in the sections
and subsections referred to below:

"Acquisition Indebtedness" means nonrecourse Indebtedness (i) as to
which the terms regarding the lack of recourse to the Restricted Persons and
their properties (other than the assets acquired with the proceeds of such
Indebtedness) and any cross default to other Indebtedness resulting from a
default with respect to such nonrecourse Indebtedness have been approved in
writing by Required Lenders and (ii) which is incurred in connection with an
acquisition of assets permitted under Section 7.7.

"Adjusted EBITDA" means, for any period, (i) EBITDA of Borrower for such
period minus (ii) EBITDA of Eastern Systems for such period plus (iii) all
Distributions made by Eastern Systems to Borrower during such period plus (iv)
fifty percent (50%) of the taxes on income and profits actually paid to
Borrower by Mountaineer for such period.

"Adjusted Interest Expense" means, for any period, (i) the Consolidated
Interest Expense of Borrower for such period minus (ii) the Consolidated
Interest Expense of Eastern Systems for such period.

"Affiliate" means, as to any Person, each other Person that directly or
indirectly (through one or more intermediaries or otherwise) controls, is
controlled by, or is under common control with, such Person. A Person shall be
deemed to be "controlled by" any other Person if such other Person possesses,
directly or indirectly, power

(a) to vote 20% or more of the securities (on a fully diluted
basis) having ordinary voting power for the election of directors or
managing general partners; or

(b) to direct or cause the direction of the management and
policies of such Person whether by contract or otherwise.

"Agent" means GE Capital, as Agent hereunder, and its successors in such
capacity; provided, however, that until such time as a Lender other than GE
Capital becomes a party hereto, "Agent" shall mean GE Capital, individually.

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"Agreement" means this Credit Agreement.

"Alternate Base Rate" means (i) at all times when no Obligation is past
due, the per annum rate equal to the Base Rate Margin plus the higher of (a)
the Prime Rate and (b) the Federal Funds Rate plus one-half percent (0.5%) per
annum, and (ii) at all other times, the per annum rate of interest two percent
(2%) above the interest rate that would otherwise be in effect pursuant to the
immediately preceding clause (i). If the Prime Rate or the Federal Funds Rate
changes after the date hereof the Alternate Base Rate shall be automatically
increased or decreased, as the case may be, without notice to Borrower, from
time to time as of the effective time of each such change. The Alternate Base
Rate shall in no event, however, exceed the Highest Lawful Rate.

"ABR Loan" means a Loan which does not bear interest at the Eurodollar
Rate.

"ABR Payment Date" means (i) the last day of March, June, September and
December of each year, beginning June 30, 1997, and (ii) any day on which past
due interest or principal is owed under the Notes and is unpaid. If the terms
of any Loan Document provide that payments of interest or principal on the
Notes shall be deferred from one ABR Payment Date to another day, such other
day shall also be an ABR Payment Date.

"Applicable Lending Office" means, with respect to each Lender, such
Lender's Domestic Lending Office in the case of ABR Loans and such Lender's
Eurodollar Lending Office in the case of Eurodollar Loans.

"Arm's Length Transaction" means, with respect to any transaction
between a Restricted Person and one of its Affiliates, that the terms thereof
are no less favorable to such Restricted Person than those which could have
been obtained at the time of such transaction in arm's-length dealing with
Persons other than such Affiliate.

"Base Rate Margin" means, on each day:

(a) zero (0) when the Facility Usage on such day is less than
fifty percent (50%) of the Commitment on such day, and

(b) one-fourth of one percent (0.25%) per annum when the
Facility Usage on such day is greater than or equal to fifty percent
(50%) of the Commitment on such day.

"Borrower" means Energy Corporation of America, a West Virginia
corporation.

"Borrowing" means a borrowing of new Loans of a single Type pursuant to
Section 2.2 or a continuation or conversion of existing Loans into a single
Type (and, in the case of Eurodollar Loans, with the same Interest Period)
pursuant to Section 2.3.

"Borrowing Base" means, at the particular time in question, either the
amount provided for in Section 2.8 or the amount determined by Agent in
accordance with the provisions of Section 2.9; provided, however, that in no
event shall the Borrowing Base ever exceed the Commitment.

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"Borrowing Base Deficiency" has the meaning given it in Section 2.7(b).

"Borrowing Notice" means a written or telephonic request, or a written
confirmation, made by Borrower which meets the requirements of Section 2.2.

"Business Day" means a day, other than a Saturday or Sunday, on which
commercial banks are open for business with the public in New York City. Any
Business Day in any way relating to Eurodollar Loans (such as the day on which
an Interest Period begins or ends) must also be a day on which, in the judgment
of Agent, significant transactions in dollars are carried out in the interbank
eurocurrency market.

"Capital Lease Obligation" means, at the time any determination thereof
is to be made, the amount of the liability in respect of a capital lease that
would at such time be required to be capitalized on a balance sheet in
accordance with GAAP.

"Capital Stock" means (i) in the case of a corporation, corporate stock,
(ii) in the case of an association, limited liability company or other business
entity, any and all shares, interests, participations, rights or other
equivalents (however designated) of corporate stock, (iii) in the case of a
partnership, partnership interests (whether general or limited) and (iv) any
other interest or participation that confers on a Person the right to receive a
share of the profits and losses of, or distributions of assets of, the issuing
Person.

"Cash Equivalents" means investments in:

(a) marketable obligations, maturing within 12 months after
acquisition thereof, issued or unconditionally guaranteed by the United
States of America or an instrumentality or agency thereof and entitled
to the full faith and credit of the United States of America.

(b) demand deposits, and time deposits (including certificates
of deposit) maturing within 12 months from the date of deposit thereof,
with any office of any Lender or with a domestic office of any national
or state bank or trust company which is organized under the Laws of the
United States of America or any state therein, which has capital,
surplus and undivided profits of at least $500,000,000, and whose
certificates of deposit have at least the third highest credit rating
given by either Rating Agency.

(c) repurchase obligations with a term of not more than seven
days for underlying securities of the types described in clause (a)
above entered into with any commercial bank meeting the specifications
of clause (b) above.

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(d) open market commercial paper, maturing within 270 days
after acquisition thereof, which has the highest or second highest
credit rating given by either Rating Agency.

(e) investments in money market or other mutual funds
substantially all of whose assets comprise securities of the types
described in clauses (a) through (d) above.

"Change of Control" means the occurrence of any of the following: (i)
the sale, lease, transfer, conveyance or other disposition (other than by way
of merger or consolidation), in one or a series of related transactions, of all
or substantially all of the assets of the Borrower and its Subsidiaries taken
as a whole to any "person" or group of related "persons" (a "Group") (as such
terms are used in Section 13(d)(3) of the Exchange Act), (ii) the adoption of a
plan relating to the liquidation or dissolution of the Borrower, (iii) the
consummation of any transaction (including, without limitation, any purchase,
sale, acquisition, disposition, merger or consolidation) the result of which is
that any "Person" (as defined above) or Group becomes the "beneficial owner"
(as such term is defined in Rule 13d-3 and Rule 13d-5 under the Exchange Act)
of more than 35% of the outstanding Voting Stock of the Borrower having the
right to elect directors under ordinary circumstances other than any such
transaction where (A) the outstanding Voting Stock of the Borrower is changed
into or exchanged for Voting Stock of the surviving corporation which is not
Disqualified Stock or (B) Xxxx Xxxx and Xxxxx Xxxx continue to own, directly or
indirectly, not less than a majority of the Voting Stock of the surviving
corporation immediately after such transaction or (iv) the first day on which a
majority of the members of the Board of Directors of the Borrower are not
Continuing Directors.

"Collateral" means all property of any kind which is subject to a Lien
in favor of Lenders (or in favor of Agent for the benefit of Lenders) or which,
under the terms of any Security Document, is purported to be subject to such a
Lien.

"Commitment" means the amount of $50,000,000.

"Commitment Fee Rate" means, on each day:

(a) one-fourth of one percent (0.25%) per annum when the
Facility Usage on such day is less than twenty- five percent of the
Commitment on such day,

(b) three-eighths of one percent (0.375%) per annum when the
Facility Usage on such day is greater than or equal to twenty-five
percent (25%) and less than fifty percent (50%) of the Commitment on
such day, and

(c) one-half of one percent (0.50%) per annum when the Facility
Usage on such day is greater than or equal to fifty percent (50%) of the
Commitment on such day.

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"Commitment Period" means the period from and including the date hereof
until and including the Maturity Date (or, if earlier, the day on which the
Notes first become due and payable in full).

"Consolidated" refers to the consolidation of any Person, in accordance
with GAAP, with its properly consolidated subsidiaries. References herein to a
Person's Consolidated financial statements, financial position, financial
condition, liabilities, etc. refer to the consolidated financial statements,
financial position, financial condition, liabilities, etc. of such Person and
its properly consolidated subsidiaries.

"Consolidated Net Income" means, as to any Person or Persons for any
period, the gross revenues of such Person or Persons for such period, plus
(without duplication) any cash dividends or distributions actually received by
such Person or Persons from any other business entity, minus all expenses and
other proper charges (including taxes on income, to the extent imposed upon
such Person or Persons), determined on a Consolidated basis after eliminating
earnings or losses attributable to outstanding minority interests, but
excluding the net earnings of any other business entity in which such Person or
Persons has an ownership interest.

"Consolidated Tangible Net Worth" means the remainder of all
Consolidated assets of Borrower, other than intangible assets (including
without limitation as intangible assets such assets as patents, copyrights,
licenses, franchises, goodwill, trade names, trade secrets and leases other
than oil, gas or mineral leases or leases required to be capitalized under
GAAP), minus Borrower's Consolidated Liabilities.

"Continuation/Conversion Notice" means a written or telephonic request,
or a written confirmation, made by Borrower which meets the requirements of
Section 2.3.

"Continuing Directors" means, as of any date of determination, any
member of the Board of Directors of Borrower who (i) was a member of such Board
of Directors on the date hereof or (ii) was nominated for election or elected
to such Board of Directors with the approval of (a) two-thirds of the
Continuing Directors who were members of such Board of Directors at the time of
such nomination or election or (b) two-thirds of those Directors who were
previously approved by Continuing Directors.

"Default" means any Event of Default and any default, event or condition
which would, with the giving of any requisite notices and the passage of any
requisite periods of time, constitute an Event of Default.

"Determination Date" has the meaning given it in Section 2.9.

"Disclosure Report" means either a notice given by Borrower under
Section 6.4 or a certificate given by Borrower's chief financial officer under
Section 6.2(b).

"Disclosure Schedule" means Schedule 1 hereto.

11
"Disqualified Stock" means any capital stock of Borrower 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, pursuant to a sinking fund obligation or otherwise, is
convertible or exchangeable for Indebtedness or other Disqualified Stock or
redeemable at the option of the holder thereof, in whole or in part, on or
prior to the date that is 91 days after the date on which the Subordinated
Notes mature.

"Distribution" means (a) any dividend or other distribution made by a
Restricted Person on or in respect of the Capital Stock of such Restricted
Person (including any option or warrant to buy such an equity interest), or (b)
any payment made by a Restricted Person to purchase, redeem, acquire or retire
any Capital Stock in such Restricted Person (including any such option or
warrant).

"Domestic Lending Office" means, with respect to any Lender, the office
of such Lender specified as its "Domestic Lending Office" below its name on the
Lender Schedule attached hereto, or such other office as such Lender may from
time to time specify to Borrower and Agent.

"Eastern American" means Eastern American Energy Corporation, a West
Virginia corporation and wholly-owned Subsidiary of Borrower.

"Eastern Systems" means Eastern Systems Corporation, a wholly-owned
Subsidiary of Borrower.

"EBITDA" means, with respect to any Person for any period, the
Consolidated Net Income of such Person for such period plus (i) an amount equal
to any extraordinary loss, plus any net loss realized in connection with an
asset sale (together with any related provisions for taxes by a Related
Person), to the extent such losses were included in computing such Consolidated
Net Income, plus (ii) an amount equal to the provision for taxes based on
income or profits of such Person and its Subsidiaries which are Restricted
Persons for such period (including state franchise taxes), to the extent that
such provision for taxes was deducted in computing such Consolidated Net
Income, plus (iii) consolidated interest expense of such Person and its
Subsidiaries which are Restricted Persons for such period, whether paid or
accrued (including, without limitation, amortization of original issue discount
and capitalized debt issuance costs, non-cash interest payments, the interest
component of any deferred payment obligations, the interest component of all
payments associated with Capital Lease Obligations, imputed interest with
respect to the present value of the net rental payments under sale and
leaseback transactions, commissions, discounts and other fees and charges
incurred in respect of letters of credit or bankers' acceptance financings, and
net payments (if any) pursuant to Hedging Contracts described in Section 7.3,
to the extent that any such expense was deducted in computing such Consolidated
Net Income, plus (iv) depreciation, depletion and amortization expenses
(including amortization of goodwill and other intangibles) for such Person and
its Subsidiaries which are Restricted Persons for such period to the extent
that such depreciation, depletion and amortization expenses were deducted in
computing such Consolidated Net Income, plus (v) other non-cash charges
(excluding any such non-cash

12
charge to the extent that it represents an accrual of or reserve for cash
charges in any future period or amortization of a prepaid cash expense that was
paid in a prior period or to the extent it represents a restructuring change)
of such Person and its Subsidiaries which are Restricted Persons for such
period to the extent that such other non-cash charges were deducted in
computing such Consolidated Net Income, in each case, on a consolidated basis
and determined in accordance with GAAP. Notwithstanding the foregoing, the
provision for taxes on the income or profits of, and the depreciation,
depletion and amortization and other non-cash charges and expenses of, its
Subsidiaries which are Restricted Persons of the relevant Person shall be added
to Consolidated Net Income to compute Consolidated Cash Flow only to the extent
(and in the same proportion) that the Net Income of such Subsidiary was
included in calculating the Consolidated Net Income of such Person and only if
a corresponding amount would be permitted at the date of determination to be
dividended to such Person by such Subsidiary without prior governmental
approval (that has not been obtained), and without direct or indirect
restriction pursuant to the terms of its charter and all agreements,
instruments, judgments, decrees, orders, statutes, rules and governmental
regulations applicable to that such Subsidiary or its stockholders.

"Eligible Transferee" means a Person which either (a) is a Lender or an
Affiliate of Lender or a special purpose entity through which a Lender obtains
funding for its Loans, or (b) is consented to as an Eligible Transferee by
Agent and so long as no Default or Event of Default is continuing by Borrower,
which consents in each case will not be unreasonably withheld (provided that no
Person organized outside the United States may be an Eligible Transferee if
Borrower would be required to pay withholding taxes on interest or principal
owed to such Person).

"Engineering Report" means the Initial Engineering Report and each
engineering report delivered pursuant to Section 6.2(d).

"Environmental Claims" means any and all administrative, regulatory or
judicial actions, actions, suits, obligations, liabilities, losses,
proceedings, decrees, judgments, penalties, fees, fines, demand letters,
orders, directives, claims (including claims for contribution or claims
involving liability in tort, strict, absolute or otherwise), Liens, notices of
noncompliance or violation, or claims for legal fees or costs of investigations
or proceedings, relating to any Environmental Law or arising from the actual or
alleged presence or Release of any Hazardous Material, including without
limitation, enforcement, mitigation, cleanup, removal, response, remedial or
other actions or damages or contribution, indemnification, cost recovery,
compensation or injunctive or declaratory relief pursuant to any Environmental
Law or alleged injury or threat of injury to property, health, safety, natural
resources or the environment.

"Environmental Laws" means all Laws relating to pollution or the
regulation or protection of human health, safety, natural resources or the
environment, including ambient air, surface water, ground water, land, natural
resources or wetlands, including without limitation, those relating to any
release of hazardous materials, or otherwise relating to the manufacture,
processing, distribution, use, treatment, storage, disposal, transport,
management, generation, recycling or handling of or exposure to Hazardous
Materials.

13
Without limitation, Environmental Laws include, the Comprehensive Environmental
Response, Compensation, and Liability Act of 1980, as amended by the Superfund
Amendments and Reauthorization Act of 1986; the Resource Conservation and
Recovery Act of 1976, as amended by the Used Oil Recycling Act of 1980, the
Solid Waste Disposal Act Amendments of 1980 and the Hazardous and Solid Waste
Amendments of 1984; the Toxic Substances Control Act, 15 U.S.C.; the Federal
Water Pollution Control Act; the Hazardous Materials Transportation Act; the
Clean Air Act; the Safe Drinking Water Act; The Occupational Safety and Health
Act of 1970; the Federal Insecticide, Fungicide and Rodenticide Act and the
Endangered Species Act, each as amended and their state and local counterparts
or equivalents.

"ERISA" means the Employee Retirement Income Security Act of 1974, as
amended from time to time, together with all rules and regulations promulgated
with respect thereto.

"ERISA Affiliate" means Borrower and all members of a controlled group
of corporations and all trades or businesses (whether or not incorporated)
under common control that, together with Borrower, are treated as a single
employer under Section 414 of the Internal Revenue Code of 1986, as amended.

"ERISA Plan" means any employee pension benefit plan subject to Title IV
of ERISA maintained by any ERISA Affiliate with respect to which any Restricted
Person has a fixed or contingent liability.

"Eurodollar Lending Office" means, with respect to any Lender, the
office of such Lender specified as its "Eurodollar Lending Office" below its
name on the Lender Schedule attached hereto (or, if no such office is
specified, its Domestic Lending Office), or such other office of such Lender as
such Lender may from time to time specify to Borrower and Agent.

"Eurodollar Loan" means a Loan which is properly designated as a
Eurodollar Loan pursuant to Section 2.2 or 2.3.

"Eurodollar Margin" means (i) on each day when no Obligation is past
due:

(a) one percent (1.0%) per annum when the Facility Usage on
such day is less than twenty-five percent of the Commitment on such
day,

(b) one and one-fourth percent (1.25%) per annum when the
Facility Usage on such day is greater than or equal to twenty-five
percent (25%) and less than fifty percent (50%) of the Commitment on
such day, and

(c) one and one-half percent (1.50%) per annum when the
Facility Usage on such day is greater than or equal to fifty percent
(50%) of the Commitment on such day; and

14
(ii) on each other day, two percent (2%) above the interest rate that would
otherwise be in effect pursuant to the immediately preceding clause (i).

"Eurodollar Rate" means with respect to each particular Eurodollar Loan
and the associated LIBOR Rate and Reserve Percentage, the rate per annum
calculated by Agent (rounded upwards, if necessary, to the next higher 0.01%)
determined on a daily basis pursuant to the following formula:

Eurodollar Rate =
LIBOR Rate + Eurodollar Margin
---------------------------
100.0% - Reserve Percentage

The Eurodollar Rate for any Eurodollar Loan shall change whenever the
Eurodollar Margin or the Reserve Percentage changes. No Eurodollar Rate shall
ever exceed the Highest Lawful Rate.

"Eurodollar Rate Payment Date" means, with respect to any Eurodollar
Loan: (i) the day on which the related Interest Period ends (and, if such
Interest Period is three months or longer, the three-month anniversary of the
first day of such Interest Period), and (ii) any day on which past due interest
or past due principal is owed under the Notes with respect to such Eurodollar
Loan and is unpaid. If the terms of any Loan Documents provide that payments
of interest or principal with respect to such Eurodollar Loan shall be deferred
from one Eurodollar Rate Payment Date to another day, such other day shall also
be a Eurodollar Rate Payment Date.

"Evaluation Date" means each of the following:

(a) Each date which either Borrower or Lender, at their
respective options, specifies as a date as of which the Borrowing Base
is to be redetermined, provided that each such date must be the first or
last date of a current calendar month and that neither Borrower nor
Lender shall be entitled to request any such redetermination more than
once during any Fiscal Year;

(b) the last day of each Fiscal Year, beginning June 30, 1997.

"Event of Default" has the meaning given it in Section 7.1.

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

"Existing Credit Documents" means the credit agreement among Eastern
American, The Bank of Nova Scotia, as agent, and certain Lenders and all
promissory notes issued by Eastern American thereunder and all guaranties
thereof.

15
"Facility Usage" means, at the time in question, the aggregate principal
amount of outstanding Loans.

"Federal Funds Rate" shall mean, for any day, the rate per annum
(rounded upwards, if necessary, to the nearest 1/100th of one percent) equal to
the weighted average of the rates on overnight Federal funds transactions with
members of the Federal Reserve System arranged by Federal funds brokers on such
day, as published by the Federal Reserve Bank of New York on the Business Day
next succeeding such day, provided that (i) if the day for which such rate is
to be determined is not a Business Day, the Federal Funds Rate for such day
shall be such rate on such transactions on the next preceding Business Day as
so published on the next succeeding Business Day, and (ii) if such rate is not
so published for any day, the Federal Funds Rate for such day shall be the
average rate quoted to Agent on such day on such transactions as determined by
Agent.

"Fiscal Quarter" means a three-month period ending on March 31, June 30,
September 30, or December 31 of any year.

"Fiscal Year" means a twelve-month period ending on June 30 of any year.

"Four Quarter Period" means as of the end of any Fiscal Quarter, the
period of four consecutive Fiscal Quarters then ended.

"GAAP" means those generally accepted accounting principles and
practices which are recognized as such by the Financial Accounting Standards
Board (or any generally recognized successor) and which, in the case of
Borrower and its Consolidated subsidiaries, are applied for all periods after
the date hereof in a manner consistent with the manner in which such principles
and practices were applied to the audited Initial Financial Statements. If any
change in any accounting principle or practice is required by the Financial
Accounting Standards Board (or any such successor) in order for such principle
or practice to continue as a generally accepted accounting principle or
practice, all reports and financial statements required hereunder with respect
to Borrower or with respect to Borrower and its Consolidated subsidiaries may
be prepared in accordance with such change, but all calculations and
determinations to be made hereunder may be made in accordance with such change
only after notice of such change is given to each Lender and Required Lenders
agree to such change insofar as it affects the accounting of Borrower or of
Borrower and its Consolidated subsidiaries.

"GE Capital" means General Electric Capital Corporation.

"Hazardous Materials" means (a) any petroleum or petroleum product
(including crude oil or fraction thereof), explosive, radioactive material,
asbestos, urea formaldehyde foam insulation, polychlorinated biphenyls, lead
and radon gas; (b) any chemical, material, gas substance waste which is defined
as or included in the definition of "hazardous substance", "hazardous waste",
"hazardous material", "extremely hazardous substance", "hazardous chemical",
"toxic substance", "toxic chemical", "contaminant" or "pollutant" or words of

16
similar import under any Environmental Law; and (c) any other chemical,
material, gas substance or waste, exposure to which, or the presence, use,
generation, treatment, Release, transport or storage of which is prohibited,
limited or regulated under any Environmental Law.

"Hedging Contract" means (a) any agreement providing for options, swaps,
floors, caps, collars, forward sales or forward purchases involving interest
rates, commodities or commodity prices, equities, currencies, bonds, or indexes
based on any of the foregoing, (b) any option, futures or forward contract
traded on an exchange, and (c) any other derivative agreement or other similar
agreement or arrangement.

"Highest Lawful Rate" means, with respect to each Lender, the maximum
nonusurious rate of interest that such Lender is permitted under applicable Law
to contract for, take, charge, or receive with respect to its Loan. All
determinations herein of the Highest Lawful Rate, or of any interest rate
determined by reference to the Highest Lawful Rate, shall be made separately
for each Lender as appropriate to assure that the Loan Documents are not
construed to obligate any Person to pay interest to any Lender at a rate in
excess of the Highest Lawful Rate applicable to such Lender.

"Indebtedness" of any Person means Liabilities in any of the following
categories:

(a) Liabilities for borrowed money,

(b) Liabilities constituting an obligation to pay the deferred
purchase price of property or services,

(d) Liabilities which (i) would under GAAP be shown on such
Person's balance sheet as a liability, and (ii) is payable more than one
year from the date of creation thereof (other than reserves for taxes
and reserves for contingent obligations),

(e) Liabilities arising under futures contracts, forward
contracts, swap, cap or collar contracts, option contracts, hedging
contracts, other derivative contracts, or similar agreements,

(f) Capitalized Lease Obligations and Liabilities arising under
operating leases and Liabilities arising with respect to sale and
lease-back transactions,

(g) Liabilities arising under conditional sales or other title
retention agreements,

(h) Liabilities owing under direct or indirect guaranties of
Liabilities of any other Person or constituting obligations to purchase
or acquire or to otherwise protect or insure a creditor against loss in
respect of Liabilities of any other Person (such as obligations under
working capital maintenance agreements, agreements to keep-well, or

17
agreements to purchase Liabilities, assets, goods, securities or
services), but excluding endorsements in the ordinary course of business
of negotiable instruments in the course of collection,

(i) Liabilities (for example, repurchase agreements) consisting
of an obligation to purchase securities or other property, if such
Liabilities arises out of or in connection with the sale of the same or
similar securities or property,

(j) Liabilities with respect to letters of credit or
applications or reimbursement agreements therefor,

(k) Liabilities with respect to payments received in
consideration of oil, gas, or other minerals yet to be acquired or
produced at the time of payment (including obligations under
"take-or-pay" contracts to deliver gas in return for payments already
received and the undischarged balance of any production payment created
by such Person or for the creation of which such Person directly or
indirectly received payment), or

(l) Liabilities with respect to other obligations to deliver
goods or services in consideration of advance payments therefor;

provided, however, that the "Indebtedness" of any Person shall not include
Liabilities that were incurred by such Person on ordinary trade terms to
vendors, suppliers, or other Persons providing goods and services for use by
such Person in the ordinary course of its business, unless and until (x) such
Liabilities are outstanding more than 90 days past the original invoice or
billing date therefor or, (y) if such Person is contesting any such Liability
in good faith by appropriate proceedings (promptly initiated and diligently
conducted) and has set aside on its books adequate reserves therefor, such
Liability is outstanding more than 180 days past the original invoice or
billing date therefor.

"Indenture" means that certain Indenture dated May 23, 1997, between
Borrower and Bank of New York, as trustee.

"Initial Engineering Report" means, collectively, (i) the engineering
report concerning oil and gas properties of Eastern American and its
Subsidiaries dated September 5, 1996, prepared by Xxxxx Xxxxx Company as of
July 1, 1996, and (ii) the engineering report concerning oil and gas properties
of Eastern American and its Subsidiaries dated March 31, 1997, prepared by
Xxxxx Xxxxx Company as of March 31, 1997.

"Initial Financial Projections" means financial projections for
Borrower through June 2002, including expected revenues from the sale of oil
and gas, expected EBITDA and expected capital expenditures, and projected
calculations reflecting compliance with the financial covenants contained
herein.

18
"Initial Financial Statements" means (i) the audited annual combined
financial statements of Borrower dated as of June 30, 1996, and (ii) the
audited quarterly Consolidated financial statements of Borrower dated as of
March 31, 1997.

"Insurance Schedule" means Schedule 4 attached hereto.

"Interest Expense" means, as to any Person for any period, all interest
paid or accrued during such period on Indebtedness of such Person (including
amortization of original issue discount and the interest component of any
deferred payment obligations and Capitalized Lease Obligation).

"Interest Period" means, with respect to each particular Eurodollar Loan
in a Borrowing, a period of 1, 2, 3 or 6 months, as specified in the Borrowing
Notice applicable thereto, beginning on and including the date specified in
such Borrowing Notice (which must be a Business Day), and ending on but not
including the same day of the month as the day on which it began (e.g., a
period beginning on the third day of one month shall end on but not include the
third day of another month), provided that each Interest Period which would
otherwise end on a day which is not a Business Day shall end on the next
succeeding Business Day (unless such next succeeding Business Day is the first
Business Day of a calendar month, in which case such Interest Period shall end
on the immediately preceding Business Day). No Interest Period may be elected
which would extend past the date on which the associated Note is due and
payable in full.

"Investment" means any investment, in cash or by delivery of property
made, directly or indirectly in any Person, whether by acquisition of shares of
Capital Stock, indebtedness or other obligations or securities or by loan,
advance, capital contribution or otherwise.

"Late Payment Rate" means, at the time in question, two percent (2.0%)
per annum plus the Alternate Base Rate then in effect. The Late Payment Rate
shall never exceed the Highest Lawful Rate.

"Law" means any statute, law, regulation, ordinance, rule, treaty,
judgment, order, decree, permit, concession, franchise, license, agreement or
other governmental restriction of the United States or any state or political
subdivision or regulatory agency thereof of any foreign country or any
department, province or other political subdivision thereof, including without
limitation Environmental Laws.

"Lender Parties" means Agent and all Lenders.

"Lenders" means each signatory hereto (other than Borrower and
Restricted Persons a party hereto), including GE Capital in its capacity as a
lender hereunder rather than as Agent, and the successors of each such party as
holder of a Note.

19
"Lending Office" means, with respect to any Lender, the office, branch,
or agency through which it funds its Eurodollar Loans; and, with respect to
Agent or Collateral Agent, the office, branch, or agency through which it
administers this Agreement.

"Liabilities" means, as to any Person, all indebtedness, liabilities and
obligations of such Person, whether matured or unmatured, liquidated or
unliquidated, primary or secondary, direct or indirect, absolute, fixed or
contingent, and whether or not required to be considered pursuant to GAAP.

"LIBOR Rate" means, with respect to each particular Eurodollar Loan and
the related Interest Period, the rate per annum (rounded upwards, if necessary,
to the nearest 1/100 of 1%) appearing on Telerate Page 3750 (or any successor
page) as the London interbank offered rate for deposits in Dollars at
approximately 11:00 a.m. (London time) two Business Days prior to the first day
of such Interest Period for a term comparable to such Interest Period. If for
any reason such rate is not available, the term "Eurodollar Rate" shall mean,
for any Eurodollar Loan for any Interest Period therefor, the rate per annum
(rounded upwards, if necessary, to the nearest 1/100 of 1%) appearing on
Reuters Screen LIBO Page as the London interbank offered rate for deposits in
Dollars at approximately 11:00 a.m. (London time) two Business Days prior to
the first day of such Interest Period for a term comparable to such Interest
Period; provided, however, if more than one rate is specified on Reuters Screen
LIBO Page, the applicable rate shall be the arithmetic mean of all such rates
(rounded upwards, if necessary, to the nearest 1/100 of 1%). The Eurodollar
Rate determined by Agent with respect to a particular Eurodollar Loan shall be
fixed at such rate for the duration of the associated Interest Period. If
Agent is unable so to determine the Eurodollar Rate for any Eurodollar Loan,
Borrower shall be deemed not to have elected such Eurodollar Loan.

"Lien" means, with respect to any property or assets, any right or
interest therein of a creditor to secure Liabilities owed to him or any other
arrangement with such creditor which provides for the payment of such
Liabilities out of such property or assets or which allows him to have such
Liabilities satisfied out of such property or assets prior to the general
creditors of any owner thereof, including any lien, mortgage, security
interest, pledge, deposit, production payment, rights of a vendor under any
title retention or conditional sale agreement or lease substantially equivalent
thereto, tax lien, mechanic's or materialman's lien, or any other charge or
encumbrance for security purposes, whether arising by Law or agreement or
otherwise, but excluding any right of offset which arises without agreement in
the ordinary course of business. "Lien" also means any filed financing
statement, any registration of a pledge (such as with an issuer of
uncertificated securities), or any other arrangement or action which would
serve to perfect a Lien described in the preceding sentence, regardless of
whether such financing statement is filed, such registration is made, or such
arrangement or action is undertaken before or after such Lien exists.

"Loan" has the meaning given it in Section 2.1.

"Loan Documents" means this Agreement, the Notes, the Security
Documents, and all other agreements, certificates, documents, instruments and
writings at any time delivered in

20
connection herewith or therewith (exclusive of term sheets, commitment letters,
correspondence and similar documents used in the negotiation hereof, except to
the extent the same contain information about Borrower or its Affiliates,
properties, business or prospects).

"Material Adverse Change" means a material and adverse change, from the
state of affairs presented in the Initial Financial Statements or the Initial
Engineering Report, or as represented or warranted in any Loan Document, to (a)
Borrower's financial condition or the Consolidated financial condition of
Borrower and all of its Subsidiaries, (b) the business, operations or
properties of Borrower or of Borrower and all of its Subsidiaries, considered
as a whole, (c) Borrower's ability to timely pay the Obligations or to comply
with any other obligations under the Loan Documents, or (d) the enforceability
of the material terms of any Loan Document.

"Maturity Date" means May 20, 2002.

"Mortgaged Properties" means all properties subject to the Security
Documents.

"Natural Gas" means all gaseous hydrocarbons, including, but not limited
to, oil well gas, gas well gas, casinghead gas and all products refined
therefrom or produced in association therewith, including condensate,
distillate and other liquid hydrocarbons produced from gaseous hydrocarbons.

"Nonvoting Common Stock" means, with respect to any Person, Common
Stock in such Person other than Voting Stock.

"Note" has the meaning given it in Section 2.1.

"Mountaineer" means Mountaineer Gas Company, a Wholly-owned indirect Subsidiary
of Borrower.

"Obligations" means all Liabilities from time to time owing by any
Restricted Person to any Lender Party under or pursuant to any of the Loan
Documents.

"Obligation" means any part of the Obligations.

"Percentage Share" means, with respect to any Lender (a) when used in
Sections 2.1 or 2.5, in any Borrowing Notice or when no Loans are outstanding
hereunder, the percentage set forth opposite such Lender's name on Lender
Schedule attached hereto, and (b) when used otherwise, the percentage obtained
by dividing (i) the sum of the unpaid principal balance of such Lender's Loans
at the time in question, by (ii) the sum of the aggregate unpaid principal
balance of all Loans at such time.

"Permitted Lien" has the meaning given to such term in Section 7.2.

21
"Person" means an individual, corporation, partnership, limited
liability company, association, joint stock company, trust or trustee thereof,
estate or executor thereof, unincorporated organization or joint venture,
Tribunal, or any other legally recognizable entity.

"Prime Rate" means the rate per annum published from time to time by The
Wall Street Journal as the base rate for corporate loans posted by at least 75%
of the 30 largest banks in the United States. If such rate is no longer
published by The Wall Street Journal, then Agent shall, in its sole discretion
substitute the base or prime rate for corporate loans at a large commercial
bank for the base rate published in The Wall Street Journal. Such rate may not
necessarily be the lowest or best rate actually charged to any customer of such
commercial bank.

"Rating Agency" means either Standard & Poor's Ratings Group (a division
of McGraw Hill, Inc.) or Xxxxx'x Investors Service, Inc., or their respective
successors.

"Regulation D" means Regulation D of the Board of Governors of the
Federal Reserve System as from time to time in effect.

"Release" means the threatened or actual release, deposit, disposal or
leakage of any Hazardous Material at, into, upon or under any land, water or
air or otherwise into the environment, including, without limitation, by means
of burial, disposal, discharge, emission, injection, leakage, seepage, dumping,
pumping, pouring, escaping, emptying or placement.

"Required Lenders" means Lenders whose aggregate Percentage Shares equal
or exceed sixty-six and two-thirds percent (66-2/3%).

"Reserve Percentage" means, on any day with respect to each particular
Eurodollar Loan, the maximum reserve requirement, as determined by Agent
(including without limitation any basic, supplemental, marginal, emergency or
similar reserves), expressed as a percentage and rounded to the next higher
0.01%, which would then apply under Regulation D with respect to "Eurocurrency
liabilities", as such term is defined in Regulation D, of $1,000,000 or more.
If such reserve requirement shall change after the date hereof, the Reserve
Percentage shall be automatically increased or decreased, as the case may be,
from time to time as of the effective time of each such change in such reserve
requirement.

"Restricted Person" means any of Borrower, Eastern American, Eastern
Systems and each other direct and indirect Subsidiary of Borrower except
Mountaineer and its Subsidiaries.

"SEC" means the Securities and Exchange Commission.

"Security Documents" means the instruments listed in the Security
Schedule and all other security agreements, deeds of trust, mortgages, chattel
mortgages, pledges, guaranties, financing statements, continuation statements,
extension agreements and other agreements or instruments now, heretofore, or
hereafter delivered by any Restricted Person to Agent in

22
connection with this Agreement or any transaction contemplated hereby to secure
or guarantee the payment of any part of the Obligations or the performance of
any Restricted Person's other duties and obligations under the Loan Documents.

"Security Schedule" means Schedule 2 hereto.

"Subordinated Notes" means the 9.50% Senior Subordinated Notes due 2007
issued by Borrower in the amount of $200,000,000.

"Subsidiary" means, with respect to any Person, any corporation,
association, partnership, joint venture, or other business or corporate entity,
enterprise or organization which is directly or indirectly (through one or more
intermediaries) controlled by or owned fifty percent or more by such Person.

"Termination Event" means (a) the occurrence with respect to any ERISA
Plan of (i) a reportable event described in Sections 4043(b)(5) or (6) of ERISA
or (ii) any other reportable event described in Section 4043(b) of ERISA other
than a reportable event not subject to the provision for 30-day notice to the
Pension Benefit Guaranty Corporation pursuant to a waiver by such corporation
under Section 4043(a) of ERISA, or (b) the withdrawal of any ERISA Affiliate
from an ERISA Plan during a plan year in which it was a "substantial employer"
as defined in Section 4001(a)(2) of ERISA, or (c) the filing of a notice of
intent to terminate any ERISA Plan or the treatment of any ERISA Plan amendment
as a termination under Section 4041 of ERISA, or (d) the institution of
proceedings to terminate any ERISA Plan by the Pension Benefit Guaranty
Corporation under Section 4042 of ERISA, or (e) any other event or condition
which might constitute grounds under Section 4042 of ERISA for the termination
of, or the appointment of a trustee to administer, any ERISA Plan.

"Tribunal" means any government, any arbitration panel, any court or any
governmental department, commission, board, bureau, agency or instrumentality
of the United States of America or any state, province, commonwealth, nation,
territory, possession, county, parish, town, township, village or municipality,
whether now or hereafter constituted and/or existing.

"Type" means, with respect to any Loans, the characterization of such
Loans as either ABR Loans or Eurodollar Loans.

"Voting Stock" means, with respect to any Person, securities of any
class or classes of Capital Stock in such Person normally entitling the holders
thereof to vote in the election of members of the Board of Directors or other
governing body of such Person.

"Wholly-owned Subsidiary" means any Subsidiary of Borrower, one hundred
percent (100%) of the Voting Stock of which is directly or indirectly (through
one or more intermediaries) owned Borrower.

Section 1.2. Exhibits and Schedules; Additional Definitions. All
Exhibits and Schedules attached to this Agreement are a part hereof for all
purposes. Reference is hereby

23
made to the Security Schedule for the meaning of certain terms defined therein
and used but not defined herein, which definitions are incorporated herein by
reference.

Section 1.3. Amendment of Defined Instruments. Unless the context
otherwise requires or unless otherwise provided herein the terms defined in
this Agreement which refer to a particular agreement, instrument or document
also refer to and include all renewals, extensions, modifications, amendments
and restatements of such agreement, instrument or document, provided that
nothing contained in this section shall be construed to authorize any such
renewal, extension, modification, amendment or restatement.

Section 1.4. References and Titles. All references in this Agreement
to Exhibits, Schedules, articles, sections, subsections and other subdivisions
refer to the Exhibits, Schedules, articles, sections, subsections and other
subdivisions of this Agreement unless expressly provided otherwise. Titles
appearing at the beginning of any subdivisions are for convenience only and do
not constitute any part of such subdivisions and shall be disregarded in
construing the language contained in such subdivisions. The words "this
Agreement", "this instrument", "herein", "hereof", "hereby", "hereunder" and
words of similar import refer to this Agreement as a whole and not to any
particular subdivision unless expressly so limited. The phrases "this section"
and "this subsection" and similar phrases refer only to the sections or
subsections hereof in which such phrases occur. The word "or" is not
exclusive, and the word "including" (in its various forms) means "including
without limitation". Pronouns in masculine, feminine and neuter genders shall
be construed to include any other gender, and words in the singular form shall
be construed to include the plural and vice versa, unless the context otherwise
requires.

Section 1.5. Calculations and Determinations. All calculations under
the Loan Documents of interest chargeable with respect to Eurodollar Loans and
of fees shall be made on the basis of actual days elapsed (including the first
day but excluding the last) and a year of 360 days. All other calculations of
interest made under the Loan Documents shall be made on the basis of actual
days elapsed (including the first day but excluding the last) and a year of 365
or 366 days, as appropriate. Each determination by a Lender Party of amounts
to be paid under any of Sections 3.2, 3.3, 3.4, 3.5 or 3.6 or any other matters
which are to be determined hereunder by a Lender Party (such as any Eurodollar
Rate, LIBOR Rate, Business Day, Interest Period, or Reserve Percentage) shall,
in the absence of manifest error, be conclusive and binding. Unless otherwise
expressly provided herein or unless Required Lenders otherwise consent all
financial statements and reports furnished to any Lender Party hereunder shall
be prepared and all financial computations and determinations pursuant hereto
shall be made in accordance with GAAP.

ARTICLE II - The Loans

Section 2.1. Commitments to Lend; Notes. Subject to the terms and
conditions hereof, each Lender agrees to make loans to Borrower (herein called
such Lender's "Loans") upon Borrower's request from time to time during the
Commitment Period, provided that (a) subject

24
to Sections 3.3, 3.4 and 3.6, all Lenders are requested to make Loans of the
same Type in accordance with their respective Percentage Shares and as part of
the same Borrowing, and (b) after giving effect to such Loans, the Facility
Usage does not exceed the Borrowing Base determined as of the date on which the
requested Loans are to be made. The aggregate amount of all Loans in any
Borrowing of ABR Loans must be greater than or equal to $300,000 (any higher
multiple of $100,000) or must equal the remaining availability under the
Borrowing Base. The aggregate amount of all Loans in any Borrowing of
Eurodollar Loans must be greater than or equal to $3,000,000 (any higher
multiple of $1,000,000) or must equal the remaining availability under the
Borrowing Base. Borrower may have no more than three Borrowings of Eurodollar
Loans outstanding at any time. The obligation of Borrower to repay to each
Lender the aggregate amount of all Loans made by such Lender, together with
interest accruing in connection therewith, shall be evidenced by a single
promissory note (herein called such Lender's "Note") made by Borrower payable
to the order of such Lender in the form of Exhibit A with appropriate
insertions. The amount of principal owing on any Lender's Note at any given
time shall be the aggregate amount of all Loans theretofore made by such Lender
minus all payments of principal theretofore received by such Lender on such
Note. Interest on each Note shall accrue and be due and payable as provided
herein and therein, with Eurodollar Loans bearing interest at the Eurodollar
Rate and ABR Loans bearing interest at the Alternate Base Rate (subject to the
applicability of the Late Payment Rate and limited by the provisions of Section
10.7). Subject to the terms and conditions hereof, Borrower may borrow, repay,
and reborrow hereunder.

Section 2.2. Requests for New Loans. Borrower must give to Agent
written notice (or telephonic notice promptly confirmed in writing) of any
requested Borrowing of new Loans to be advanced by Lenders. Each such notice
constitutes a "Borrowing Notice" hereunder and must:

(a) specify (i) the aggregate amount of any such Borrowing of
new ABR Loans and the date on which such ABR Loans are to be advanced,
or (ii) the aggregate amount of any such Borrowing of new Eurodollar
Loans, the date on which such Eurodollar Loans are to be advanced (which
shall be the first day of the Interest Period which is to apply
thereto), and the length of the applicable Interest Period; and

(b) be received by Agent not later than 12:00 noon, New York
City time, on (i) the day on which any such ABR Loans are to be made, or
(ii) the third Business Day preceding the day on which any such
Eurodollar Loans are to be made.

Each such written request or confirmation must be made in the form and
substance of the "Borrowing Notice" attached hereto as Exhibit B, duly
completed. Each such telephonic request shall be deemed a representation,
warranty, acknowledgment and agreement by Borrower as to the matters which are
required to be set out in such written confirmation. Upon receipt of any such
Borrowing Notice, Agent shall give each Lender prompt notice of the terms
thereof. If all conditions precedent to such new Loans have been met, each
Lender will on the date requested promptly remit to Agent at Agent's office in
Stamford, Connecticut, the amount of such Lender's new Loan in immediately
available funds, and upon receipt of

25
such funds, unless to its actual knowledge any conditions precedent to such
Loans have been neither met nor waived as provided herein, Agent shall promptly
make such Loans available to Borrower. Unless Agent shall have received prompt
notice from a Lender that such Lender will not make available to Agent such
Lender's new Loan, Agent may in its discretion assume that such Lender has made
such Loan available to Agent in accordance with this section and Agent may if
it chooses, in reliance upon such assumption, make such Loan available to
Borrower. If and to the extent such Lender shall not so make its new Loan
available to Agent, such Lender and Borrower severally agree to pay or repay to
Agent within three days after demand the amount of such Loan together with
interest thereon, for each day from the date such amount was made available to
Borrower until the date such amount is paid or repaid to Agent, with interest
at (i) the Federal Funds Rate, if such Lender is making such payment and (ii)
the interest rate applicable at the time to the other new Loans made on such
date, if Borrower is making such repayment. If neither such Lender nor
Borrower pay or repay to Agent such amount within such three-day period, Agent
shall in addition to such amount be entitled to recover from such Lender and
from Borrower, on demand, interest thereon at the Late Payment Rate, calculated
from the date such amount was made available to Borrower. The failure of any
Lender to make any new Loan to be made by it hereunder shall not relieve any
other Lender of its obligation hereunder, if any, to make its new Loan, but no
Lender shall be responsible for the failure of any other Lender to make any new
Loan to be made by such other Lender.

Section 2.3. Continuations and Conversions of Existing Loans. Borrower
may make the following elections with respect to Loans already outstanding: to
convert ABR Loans to Eurodollar Loans, to convert Eurodollar Loans to ABR Loans
on the last day of the Interest Period applicable thereto, or to continue
Eurodollar Loans beyond the expiration of such Interest Period by designating a
new Interest Period to take effect at the time of such expiration. In making
such elections, Borrower may combine existing Loans made pursuant to separate
Borrowings into one new Borrowing or divide existing Loans made pursuant to one
Borrowing into separate new Borrowings. To make any such election, Borrower
must give to Agent written notice (or telephonic notice promptly confirmed in
writing) of any such conversion or continuation of existing Loans, with a
separate notice given for each new Borrowing. Each such notice constitutes a
"Continuation/Conversion Notice" hereunder and must:

(a) specify the existing Loans which are to be continued or
converted;

(b) specify (i) the aggregate amount of any Borrowing of ABR
Loans into which such existing Loans are to be continued or converted
and the date on which such continuation or conversion is to occur, or
(ii) the aggregate amount of any Borrowing of Eurodollar Loans into
which such existing Loans are to be continued or converted, the date on
which such continuation or conversion is to occur (which shall be the
first day of the Interest Period which is to apply to such Eurodollar
Loans), and the length of the applicable Interest Period; and

26
(c) be received by Agent not later than 12:00 noon, New York
City time, on (i) the day on which any such continuation or conversion
to ABR Loans is to occur, or (ii) the third Business Day preceding the
day on which any such continuation or conversion to Eurodollar Loans is
to occur.

Each such written request or confirmation must be made in the form and
substance of the "Continuation/Conversion Notice" attached hereto as Exhibit C,
duly completed. Each such telephonic request shall be deemed a representation,
warranty, acknowledgment and agreement by Borrower as to the matters which are
required to be set out in such written confirmation. Upon receipt of any such
Borrowing Notice, Agent shall give each Lender prompt notice of the terms
thereof. Each Borrowing Notice shall be irrevocable and binding on Borrower.
During the continuance of any Default, Borrower may not make any election to
convert existing Loans into Eurodollar Loans or continue existing Loans as
Eurodollar Loans. If (due to the existence of a Default or for any other
reason) Borrower fails to timely and properly give any notice of continuation
or conversion with respect to a Borrowing of existing Eurodollar Loans at least
three days prior to the end of the Interest Period applicable thereto, such
Eurodollar Loans shall automatically be converted into ABR Loans at the end of
such Interest Period. No new funds shall be repaid by Borrower or advanced by
any Lender in connection with any continuation or conversion of existing Loans
pursuant to this section, and no such continuation or conversion shall be
deemed to be a new advance of funds for any purpose; such continuations and
conversions merely constitute a change in the interest rate applicable to
already outstanding Loans.

Section 2.4. Use of Proceeds. Borrower shall use all Loans to
refinance existing indebtedness, to finance capital expenditures, and provide
working capital for its operations and for other general business purposes. In
no event shall the funds from any Loan be used directly or indirectly by any
Person (i) for personal, family, household or agricultural purposes or (ii) for
the purpose, whether immediate, incidental or ultimate, of purchasing,
acquiring or carrying any "margin stock" or any "margin securities" (as such
terms are defined respectively in Regulation U and Regulation G promulgated by
the Board of Governors of the Federal Reserve System) or to extend credit to
others directly or indirectly for the purpose of purchasing or carrying any
such margin stock or margin securities or (iii) for the acquisition of any
Person unless such acquisition has been approved by the board of directors,
management committee or partners, as the case may be of such Person. Borrower
represents and warrants that Borrower is not engaged principally, or as one of
Borrower's important activities, in the business of extending credit to others
for the purpose of purchasing or carrying such margin stock or margin
securities.

Section 2.5. Fees.

(a) Commitment Fees. In consideration of each Lender's
commitment to make Loans, Borrower will pay to Agent for the account of
each Lender a commitment fee determined on a daily basis by applying the
Commitment Fee Rate to such Lender's Percentage Share of the unused
portion of the Commitment on each day during the Commitment Period,
determined for each such day by deducting from the amount of the

27
Commitment at the end of such day the Facility Usage. This commitment
fee shall be due and payable in arrears on each ABR Payment Date and at
the end of the Commitment Period.

(b) Other Fees. In addition to all other amounts due to Agent
under the Loan Documents, Borrower will pay fees to Agent as described
in a letter agreement of even date herewith between Agent and Borrower.

Section 2.6. Optional Prepayments. Borrower may, upon one Business
Day's notice in the case of ABR Loans, or three Business Days' notice in the
case of Eurodollar Loans, to each Lender, from time to time and without premium
or penalty prepay the Notes, in whole or in part, so long as the aggregate
amounts of all partial prepayments of principal on the Notes equals $300,000 or
any higher integral multiple of $100,000, so long as Borrower pays all breakage
costs associated with the prepayment of any Eurodollar Loan as provided in
Section 3.5, and so long as Borrower does not make any prepayments which would
reduce the unpaid principal balance of any Loan to less than $100,000 without
first either (a) terminating this Agreement or (b) providing assurance
satisfactory to Agent in its discretion that Lenders' legal rights under the
Loan Documents are in no way affected by such reduction. Each prepayment of
principal under this section shall be accompanied by all interest then accrued
and unpaid on the principal so prepaid. Any principal or interest prepaid
pursuant to this section shall be in addition to, and not in lieu of, all
payments otherwise required to be paid under the Loan Documents at the time of
such prepayment.

Section 2.7. Mandatory Prepayments.

(a) If at any time the Facility Usage exceeds the Commitment
(whether due to a reduction in the Commitment in accordance with this
Agreement, or otherwise), Borrower shall immediately upon demand prepay
the principal of the Loans in an amount at least equal to such excess.

(b) If at any time the Facility Usage is less than the
Commitment but in excess of the Borrowing Base (such excess being herein
called a "Borrowing Base Deficiency"), Borrower shall, within five
Business Days after Agent gives notice of such fact to Borrower, either:

(i) prepay the principal of the Loans in an aggregate
amount at least equal to such Borrowing Base Deficiency, or

(ii) give notice to Agent electing to prepay the
principal of the Loans in up to three monthly installments in an
aggregate amount at least equal to such Borrowing Base
Deficiency, with each such installment equal to or in excess of
one-third of such Borrowing Base Deficiency, and with the first
such installment to be paid one month after the giving of such
notice and the subsequent installments to be due and payable at
one month intervals thereafter until such Borrowing Base
Deficiency has been eliminated, or

28
(iii) give notice to Agent that Borrower desires to
provide Agent with deeds of trust, mortgages, chattel mortgages,
security agreements, financing statements and other security
documents in form and substance satisfactory to Agent, granting,
confirming, and perfecting first and prior liens or security
interests in collateral acceptable to Required Lenders, to the
extent needed to allow Required Lenders to increase the Borrowing
Base (as they in their reasonable discretion deem consistent with
prudent oil and gas banking industry lending standards at the
time) to an amount which eliminates such Borrowing Base
Deficiency, and then provide such security documents within
thirty days after Agent specifies such collateral to Borrower.
If, prior to any such specification by Agent, Required Lenders
determine that the giving of such security documents will not
serve to eliminate such Borrowing Base Deficiency, then, within
five Business Days after receiving notice of such determination,
Borrower will elect to make, and thereafter make, the prepayments
specified in either of the preceding subsections (i) or (ii) of
this subsection (b).

(c) Each prepayment of principal under this section shall be
accompanied by all interest then accrued and unpaid on the principal so
prepaid. Any principal or interest prepaid pursuant to this section
shall be in addition to, and not in lieu of, all payments otherwise
required to be paid under the Loan Documents at the time of such
prepayment.

Section 2.8. Initial Borrowing Base. During the period from the date
hereof to the first Determination Date the Borrowing Base shall be $50,000,000.

Section 2.9. Subsequent Determinations of Borrowing Base.

By September 1 of each year (and within 60 days after each Evaluation
Date described in clause (i) of the definition of Evaluation Date), Borrower
shall furnish to each Lender all information, reports and data which Agent has
then requested concerning Restricted Persons' businesses and properties
(including their oil and gas properties and interests and the reserves and
production relating thereto), together with the Engineering Report described in
Section 6.2(d), if such Engineering Report is then due. Within forty-five days
after receiving such information, reports and data, Required Lenders shall agree
upon an amount for the Borrowing Base and Agent shall by notice to Borrower
designate such amount as the new Borrowing Base available to Borrower hereunder,
which designation shall take effect immediately on the date such notice is sent
(herein called a "Determination Date") and shall remain in effect until but not
including the next date as of which the Borrowing Base is redetermined. If
Borrower does not furnish all such information, reports and data by the date
specified in the first sentence of this section, Agent may nonetheless designate
the Borrowing Base at any amount which Required Lenders determine and may
redesignate the Borrowing Base from time to time thereafter until each Lender
receives all such information, reports and data, whereupon Required Lenders
shall designate a new Borrowing Base as described above. Required Lenders shall
determine the amount of the Borrowing Base based upon the loan collateral value
which they in their discretion assign to the various oil and gas properties
included in the Collateral at the time in question and based upon such other
credit factors

29
(including without limitation the assets, liabilities, cash flow, hedged and
unhedged exposure to price, foreign exchange rate, and interest rate changes,
business, properties, prospects, management and ownership of Borrower and its
Affiliates) as they in their discretion deem significant. It is expressly
understood that Lenders and Agent have no obligation to agree upon or designate
the Borrowing Base at any particular amount, whether in relation to the
Commitment or otherwise, and that Lenders' commitments to advance funds
hereunder is determined by reference to the Borrowing Base from time to time in
effect, which Borrowing Base shall be used to the extent permitted by Law and
regulatory authorities, for the purposes of capital adequacy determination and
reimbursements under Section 3.2.

ARTICLE III - Payments to Lenders

Section 3.1. General Procedures. Borrower will make each payment which
it owes under the Loan Documents to Agent for the account of the Lender Party
to whom such payment is owed. Each such payment must be received by Agent not
later than 12:00 noon, New York City time, on the date such payment becomes due
and payable, in lawful money of the United States of America, without set-off,
deduction or counterclaim, and in immediately available funds. Any payment
received by Agent after such time will be deemed to have been made on the next
following Business Day. Should any such payment become due and payable on a
day other than a Business Day, the maturity of such payment shall be extended
to the next succeeding Business Day, and, in the case of a payment of principal
or past due interest, interest shall accrue and be payable thereon for the
period of such extension as provided in the Loan Document under which such
payment is due. Each payment under a Loan Document shall be due and payable at
the place provided therein and, if no specific place of payment is provided,
shall be due and payable at the place of payment of Agent's Note. When Agent
collects or receives money on account of the Obligations, Agent shall
distribute all money so collected or received, and each Lender Party shall
apply all such money so distributed, as follows:

(a) first, for the payment of all Obligations which are then
due (and if such money is insufficient to pay all such Obligations,
first to any reimbursements due Agent under Section 6.9 or 10.4 and then
to the partial payment of all other Obligations then due in proportion
to the amounts thereof, or as Lender Parties shall otherwise agree);

(b) then for the prepayment of amounts owing under the Loan
Documents (other than principal on the Notes) if so specified by
Borrower;

(c) then for the prepayment of principal on the Notes, together
with accrued and unpaid interest on the principal so prepaid; and

(d) last, for the payment or prepayment of any other
Obligations.

All payments applied to principal or interest on any Note shall be applied
first to any interest then due and payable, then to principal then due and
payable, and last to any prepayment of

30
principal and interest in compliance with Sections 2.6 and 2.7. All
distributions of amounts described in any of subsections (b), (c) or (d) above
shall be made by Agent pro rata to each Lender Party then owed Obligations
described in such subsection in proportion to all amounts owed to all Lender
Parties which are described in such subsection.

Section 3.2. Capital Reimbursement. If either (a) the introduction or
implementation of or the compliance with or any change in or in the
interpretation of any Law, or (b) the introduction or implementation of or the
compliance with any request, directive or guideline from any central bank or
other governmental authority (whether or not having the force of Law) affects
or would affect the amount of capital required or expected to be maintained by
any Lender Party (or any assignee of such Lender Party) or any corporation
controlling any Lender Party (or its assignee), then, upon demand by such
Lender Party, Borrower will pay to Agent for the benefit of such Lender Party,
from time to time as specified by such Lender Party, such additional amount or
amounts which such Lender Party shall determine to be appropriate to compensate
such Lender Party or any corporation controlling such Lender Party in light of
such circumstances, to the extent that such Lender Party reasonably determines
that the amount of any such capital would be increased or the rate of return on
any such capital would be reduced by or in whole or in part based on the
existence of the face amount of such Lender Party's Loans or commitments under
this Agreement.

Section 3.3. Increased Cost of Eurodollar Loans. If any applicable Law
(whether now in effect or hereinafter enacted or promulgated, including
Regulation D) or any interpretation or administration thereof by any
governmental authority charged with the interpretation or administration
thereof (whether or not having the force of Law):

(a) shall change the basis of taxation of payments to any
Lender Party of any principal, interest, or other amounts attributable
to any Eurodollar Loan or otherwise due under this Agreement in respect
of any Eurodollar Loan (other than taxes imposed on the overall net
income of such Lender Party or any lending office of such Lender Party
by any jurisdiction in which such Lender Party or any such lending
office is located); or

(b) shall change, impose, modify, apply or deem applicable any
reserve, special deposit or similar requirements in respect of any
Eurodollar Loan (excluding those for which such Lender Party is fully
compensated pursuant to adjustments made in the definition of Eurodollar
Rate) or against assets of, deposits with or for the account of, or
credit extended by, such Lender Party; or

(c) shall impose on any Lender Party or the interbank
eurocurrency deposit market any other condition affecting any Eurodollar
Loan, the result of which is to increase the cost to any Lender Party of
funding or maintaining any Eurodollar Loan or to reduce the amount of
any sum receivable by any Lender Party in respect of any Eurodollar Loan
by an amount deemed by such Lender Party to be material,

31
then such Lender Party shall promptly notify Agent and Borrower in writing of
the happening of such event and of the amount required to compensate such
Lender Party for such event (on an after-tax basis, taking into account any
taxes on such compensation), whereupon (i) Borrower shall pay such amount to
Agent for the account of such Lender Party and (ii) Borrower may elect, by
giving to Agent and such Lender Party not less than three Business Days'
notice, to convert all (but not less than all) of any such Eurodollar Loans
into ABR Loans.

Section 3.4. Availability. If (a) any change in applicable Laws, or in
the interpretation or administration thereof of or in any jurisdiction
whatsoever, domestic or foreign, shall make it unlawful or impracticable for
any Lender Party to fund or maintain Eurodollar Loans, or shall materially
restrict the authority of any Lender Party to purchase or take offshore
deposits of dollars (i.e., "eurodollars"), or (b) any Lender Party determines
that matching deposits appropriate to fund or maintain any Eurodollar Loan are
not available to it, or (c) any Lender Party determines that the formula for
calculating the Adjusted Eurodollar Rate does not fairly reflect the cost to
such Lender Party of making or maintaining loans based on such rate, then, upon
notice by such Lender Party to Borrower and Agent, Borrower's right to elect
Eurodollar Loans from such Lender Party shall be suspended to the extent and
for the duration of such illegality, impracticability or restriction and all
Eurodollar Loans of such Lender Party which are then outstanding or are then
the subject of any Borrowing Notice and which cannot lawfully or practicably be
maintained or funded shall immediately become or remain, or shall be funded as,
ABR Loans of such Lender Party. Borrower agrees to indemnify each Lender Party
and hold it harmless against all costs, expenses, claims, penalties,
liabilities and damages which may result from any such change in Law,
interpretation or administration. Such indemnification shall be on an
after-tax basis, taking into account any taxes imposed on the amounts paid as
indemnity.

Section 3.5. Funding, Losses. In addition to its other obligations
hereunder, Borrower will indemnify each Lender Party against, and reimburse
each Lender Party on demand for, any loss or expense incurred or sustained by
such Lender Party (including any loss or expense incurred by reason of the
liquidation or reemployment of deposits or other funds acquired by a Lender
Party to fund or maintain Eurodollar Loans), as a result of (a) any payment or
prepayment (whether authorized or required hereunder or otherwise) of all or a
portion of a Eurodollar Loan on a day other than the day on which the
applicable Interest Period ends, (b) any payment or prepayment, whether
required hereunder or otherwise, of a Loan made after the delivery, but before
the effective date, of a Continuation/Conversion Notice, if such payment or
prepayment prevents such Continuation/Conversion Notice from becoming fully
effective, (c) the failure of any Loan to be made or of any
Continuation/Conversion Notice to become effective due to any condition
precedent not being satisfied or due to any other action or inaction of any
Restricted Person, or (d) any conversion (whether authorized or required
hereunder or otherwise) of all or any portion of any Eurodollar Loan into an
ABR Loan or into a different Eurodollar Loan on a day other than the day on
which the applicable Interest Period ends. Such indemnification shall be on an
after-tax basis, taking into account any taxes imposed on the amounts paid as
indemnity.

32
Section 3.6. Reimbursable Taxes. Borrower covenants and agrees that:

(a) Borrower will indemnify each Lender Party against and
reimburse each Lender Party for all present and future income, stamp and
other taxes, levies, costs and charges whatsoever imposed, assessed,
levied or collected on or in respect of this Agreement or any Eurodollar
Loans (whether or not legally or correctly imposed, assessed, levied or
collected), excluding, however, any taxes imposed on or measured by the
overall net income of Agent or such Lender Party or any lending office
of such Lender Party by any jurisdiction in which such Lender Party or
any such lending office is located (all such non-excluded taxes, levies,
costs and charges being collectively called "Reimbursable Taxes" in this
section). Such indemnification shall be on an after-tax basis, taking
into account any taxes imposed on the amounts paid as indemnity.

(b) All payments on account of the principal of, and interest
on, each Lender Party's Loans and Note, and all other amounts payable by
Borrower to any Lender Party hereunder, shall be made in full without
set-off or counterclaim and shall be made free and clear of and without
deductions or withholdings of any nature by reason of any Reimbursable
Taxes, all of which will be for the account of Borrower. In the event
of Borrower being compelled by Law to make any such deduction or
withholding from any payment to any Lender Party, Borrower shall pay on
the due date of such payment, by way of additional interest, such
additional amounts as are needed to cause the amount receivable by such
Lender Party after such deduction or withholding to equal the amount
which would have been receivable in the absence of such deduction or
withholding. If Borrower should make any deduction or withholding as
aforesaid, Borrower shall within 60 days thereafter forward to such
Lender Party an official receipt or other official document evidencing
payment of such deduction or withholding.

(c) If Borrower is ever required to pay any Reimbursable Tax
with respect to any Eurodollar Loan, Borrower may elect, by giving to
Agent and such Lender Party not less than three Business Days' notice,
to convert all (but not less than all) of any such Eurodollar Loan into
an ABR Loan, but such election shall not diminish Borrower's obligation
to pay all Reimbursable Taxes.

(d) Notwithstanding the foregoing provisions of this section,
Borrower shall be entitled, to the extent it is required to do so by
Law, to deduct or withhold (and not to make any indemnification or
reimbursement for) income or other similar taxes imposed by the United
States of America (other than any portion thereof attributable to a
change in federal income tax Laws effected after the date hereof) from
interest, fees or other amounts payable hereunder for the account of any
Lender Party, other than a Lender Party (i) who is a U.S. person for
Federal income tax purposes or (ii) who has the Prescribed Forms on file
with Agent (with copies provided to Borrower) for the applicable year to
the extent deduction or withholding of such taxes is not required as a
result of the filing of such Prescribed Forms, provided that if Borrower
shall so deduct or withhold any such taxes, it shall provide a statement
to Agent and such Lender Party, setting forth the amount of such taxes
so deducted or withheld, the applicable rate and

33
any other information or documentation which such Lender Party may
reasonably request for assisting such Lender Party to obtain any
allowable credits or deductions for the taxes so deducted or withheld in
the jurisdiction or jurisdictions in which such Lender Party is subject
to tax. As used in this section, "Prescribed Forms" means such duly
executed forms or statements, and in such number of copies, which may,
from time to time, be prescribed by Law and which, pursuant to
applicable provisions of (x) an income tax treaty between the United
States and the country of residence of the Lender Party providing the
forms or statements, (y) the Internal Revenue Code of 1986, as amended
from time to time, or (z) any applicable rules or regulations
thereunder, permit Borrower to make payments hereunder for the account
of such Lender Party free of such deduction or withholding of income or
similar taxes.

Section 3.7. Change of Applicable Lending Office. Each Lender Party
agrees that, upon the occurrence of any event giving rise to the operation of
any of Sections 3.2, 3.3, 3.4, 3.5 or 3.6 with respect to such Lender Party, it
will, if requested by Borrower, use reasonable efforts (subject to overall
policy considerations of such Lender Party) to designate another Lending
Office, provided that such designation is made on such terms that such Lender
Party and its Lending Office suffer no economic, legal or regulatory
disadvantage, with the object of avoiding the consequence of the event giving
rise to the operation of any such section. Nothing in this section shall
affect or postpone any of the obligations of Borrower or the rights of any
Lender Party provided in any of Sections 3.2, 3.3, 3.4, 3.5 or 3.6.

Section 3.8. Replacement of Lenders. If any Lender Party seeks
reimbursement for increased costs under any of Sections 3.2, 3.3, 3.4, 3.5 or
3.6, then within ninety days thereafter -- provided no Event of Default then
exists -- Borrower shall have the right (unless such Lender Party withdraws its
request for additional compensation) to replace such Lender Party by requiring
such Lender Party to assign its Loans and Notes and its commitments hereunder
to an Eligible Transferee reasonably acceptable to Agent and to Borrower,
provided that: (i) all Obligations of Borrower owing to such Lender Party being
replaced (including such increased costs, but excluding principal and accrued
interest on the Notes being assigned) shall be paid in full to such Lender
Party concurrently with such assignment, and (ii) the replacement Eligible
Transferee shall purchase the Note being assigned by paying to such Lender
Party a price equal to the principal amount thereof plus accrued and unpaid
interest thereon. In connection with any such assignment Borrower, Agent, such
Lender Party and the replacement Eligible Transferee shall otherwise comply
with Section 10.6. Notwithstanding the foregoing rights of Borrower under this
section, however, Borrower may not replace any Lender Party which seeks
reimbursement for increased costs under any of Sections 3.2, 3.3, 3.4, 3.5 or
3.6, unless Borrower is at the same time replacing all Lender Parties which are
then seeking such compensation.

Section 3.9 Participants. If a Lender has assigned a participation in
its Loans or commitment hereunder to another Person in accordance with Section
10.6, any amount otherwise payable by Borrower to such Lender under Section 3.3
through 3.6 (in this section called "Increased Costs"), shall include that
portion of the Increased Costs determined by such

34
Lender to be allocable to the amount of any interest or participation
transferred by such Lender in such Lender's Loan or commitments under this
Agreement.

ARTICLE IV - Conditions Precedent to Lending

Section 4.1. Documents to be Delivered. No Lender has any obligation
to make its first Loan unless Agent shall have received all of the following,
duly executed and delivered and in form, substance and date satisfactory to
Agent:

(a) This Agreement and any other documents that Lenders are to
execute in connection herewith.

(b) Each Note.

(d) Certain certificates of Borrower including:

(i) An "Omnibus Certificate" of the Secretary and of the
Chairman of the Board or President of Borrower, which shall
contain the names and signatures of the officers of Borrower
authorized to execute Loan Documents and which shall certify to
the truth, correctness and completeness of the following exhibits
attached thereto: (1) a copy of resolutions duly adopted by the
Board of Directors of Borrower and in full force and effect at
the time this Agreement is entered into, authorizing the
execution of this Agreement and the other Loan Documents
delivered or to be delivered in connection herewith and the
consummation of the transactions contemplated herein and therein,
(2) a copy of the charter documents of Borrower and all
amendments thereto, certified by the appropriate official of
Borrower's state of organization, and (3) a copy of any bylaws of
Borrower; and

(ii) A "Compliance Certificate" of the Chairman of the
Board or President and of the chief financial officer of
Borrower, of even date with such Loan, in which such officers
certify to the satisfaction of the conditions set out in
subsections (a), (b), (c) and (d) of Section 4.2.

(e) A certificate (or certificates) of the due formation, valid
existence and good standing of Borrower in its state of organization,
issued by the appropriate authorities of such jurisdiction, and
certificates of Borrower's good standing and due qualification to do
business, issued by appropriate officials in any states in which
Borrower owns property subject to Security Documents.

(f) Documents similar to those specified in subsections (d)(i)
and (e) of this section with respect to Eastern American and the
execution by it of its deed of trust described in the Security Schedule.

35
(g) A favorable opinion of Xxxxxxx & Xxxxxxx, counsel for
Restricted Persons, substantially in the form set forth in Exhibit G,
and favorable opinions of local counsel in the States of Pennsylvania,
Ohio, Illinois and Virginia in form and substance acceptable to Agent
and its counsel.

(h) The Initial Engineering Report, the Initial Financial
Statements and the Initial Financial Projections, each satisfactory to
Agent, in its sole discretion.

(i) Certificates or binders evidencing Restricted Persons'
insurance in effect on the date hereof.

(j) Favorable title and environmental reports, in scope and
results acceptable to Agent.

(k) Solvency Certificates of Eastern American and each party to
the Security Documents other than Agent.

(l) A copy of the form of Subordinated Notes and the Indenture
pursuant to which the Subordinated Notes are to be issued.

(m) Documents (i) confirming the payment in full of all
Indebtedness under the Existing Credit Documents, (ii) releasing and
terminating all Liens on any Restricted Person's property securing such
Indebtedness (or assigning such Liens to Agent for the benefit of
Lenders, and (iii) terminating the credit facility under the Existing
Credit Documents.

Section 4.2. Additional Conditions Precedent to First Loan. No Lender
has any obligation to make its first Loan, unless the following conditions
precedent have been satisfied:

(a) Borrower shall have issued the Subordinated Notes on terms
and conditions (including but not limited to the principal amount, the
coupon rate, the maturity, the absence of collateral and guaranties, and
the terms of the subordination thereof), satisfactory to Agent, in its
sole discretion, pursuant to an indenture satisfactory to Agent, in its
sole discretion, and shall have repaid in full the 10.75% Notes due 2005
issued by Eastern Systems in the amount of $35,000,000 payable to
Xxxxxxx Mutual Insurance Company.

(b) Agent shall have completed its due diligence with respect
to the Restricted Persons and their properties (including, but not
limited to due diligence with respect to capital structure, title and
environmental matters) and shall have received such reports and data as
it shall have deemed necessary in connection therewith, and such due
diligence, reports and data shall be satisfactory to Agent, in its sole
discretion.

(c) Agent shall have received payment of all commitment,
facility, agency and other fees required to be paid to any Lender Party
pursuant to any Loan Documents or

36
any commitment agreement heretofore entered into and all fees and
disbursements of Agent's counsel.

(d) Borrower shall have appointed CT Corporation Systems as its
agent for service of process in the State of New York.

Section 4.3. Additional Conditions Precedent to All Loans. No Lender
has any obligation to make any Loan (including its first), unless the following
conditions precedent have been satisfied:

(a) All representations and warranties made by any Restricted
Person in any Loan Document shall be true on and as of the date of such
Loan (except to the extent that the facts upon which such
representations are based have been changed by the extension of credit
hereunder) as if such representations and warranties had been made as of
the date of such Loan.

(b) No Default shall exist at the date of such Loan.

(c) No Material Adverse Change shall have occurred to, and no
event or circumstance shall have occurred that could cause a Material
Adverse Change to, Borrower's Consolidated financial condition or
businesses since the date of this Agreement.

(d) Each Restricted Person shall have performed and complied
with all agreements and conditions required in the Loan Documents to be
performed or complied with by it on or prior to the date of such Loan.

(e) The making of such Loan shall not be prohibited by any Law
and shall not subject any Lender to any penalty or other onerous
condition under or pursuant to any such Law.

(f) Agent shall have received on or before the date of any
Advance which would cause the aggregate amount of all Advances
outstanding hereunder to exceed $2,000,000, original recorded
counterparts, file stamped copies or certified copies of all Security
Documents and file stamped copies of all related financing statements.

(g) Agent shall have received all documents and instruments
which Agent has then requested, in addition to those described in Section 4.1
and 4.3 (f) (including opinions of legal counsel for Restricted Persons and
Agent; corporate documents and records; documents evidencing governmental
authorizations, consents, approvals, licenses and exemptions; and certificates
of public officials and of officers and representatives of Borrower and other
Persons), as to (i) the accuracy and validity of or compliance with all
representations, warranties and covenants made by any Restricted Person in this
Agreement and the other Loan Documents, (ii) the satisfaction of all conditions
contained herein or therein, and (iii) all other

37
matters pertaining hereto and thereto. All such additional documents and
instruments shall be satisfactory to Agent in form, substance and date.

ARTICLE V - Representations and Warranties

To confirm each Lender Party's understanding concerning Restricted
Persons and Restricted Persons' businesses, properties and obligations and to
induce each Lender Party to enter into this Agreement and to extend credit
hereunder, Borrower represents and warrants to each Lender Party that:

Section 5.1. No Default. No Restricted Person is in default in the
performance of any of the covenants and agreements contained in any Loan
Document. No event has occurred and is continuing which constitutes a Default.

Section 5.2. Organization and Good Standing. Each Restricted Person is
duly organized, validly existing and in good standing under the Laws of its
jurisdiction of organization, having all powers required to carry on its
business and enter into and carry out the transactions contemplated hereby.
Each Restricted Person is duly qualified, in good standing, and authorized to
do business in all other jurisdictions within the United States wherein the
character of the properties owned or held by it or the nature of the business
transacted by it makes such qualification necessary. Each Restricted Person
has taken all actions and procedures customarily taken in order to enter, for
the purpose of conducting business or owning property, each jurisdiction
outside the United States wherein the character of the properties owned or held
by it or the nature of the business transacted by it makes such actions and
procedures desirable.

Section 5.3. Authorization. Each Restricted Person has duly taken all
action necessary to authorize the execution and delivery by it of the Loan
Documents to which it is a party and to authorize the consummation of the
transactions contemplated thereby and the performance of its obligations
thereunder. Borrower is duly authorized to borrow funds hereunder.

Section 5.4. No Conflicts or Consents. The execution and delivery by
the various Restricted Persons of the Loan Documents to which each is a party,
the performance by each of its obligations under such Loan Documents, and the
consummation of the transactions contemplated by the various Loan Documents, do
not and will not (i) conflict with any provision of (1) any Law, (2) the
organizational documents of any Restricted Person, or (3) any agreement,
judgment, license, order or permit applicable to or binding upon any Restricted
Person, (ii) result in the acceleration of any Indebtedness owed by any
Restricted Person, or (iii) result in or require the creation of any Lien upon
any assets or properties of any Restricted Person except as expressly
contemplated in the Loan Documents. Except as expressly contemplated in the
Loan Documents no consent, approval, authorization or order of, and no notice
to or filing with, any Tribunal or third party is required in connection with
the execution, delivery or performance by any Restricted Person of any Loan
Document or to

38
consummate any transactions contemplated by the Loan Documents, except consents
which will be obtained within 180 days after the date hereof.

Section 5.5. Enforceable Obligations. This Agreement is, and the other
Loan Documents when duly executed and delivered will be, legal, valid and
binding obligations of each Restricted Person which is a party hereto or
thereto, enforceable in accordance with their terms except as such enforcement
may be limited by bankruptcy, insolvency or similar Laws of general application
relating to the enforcement of creditors' rights.

Section 5.6. Initial Financial Statements. Borrower has heretofore
delivered to each Lender Party true, correct and complete copies of the Initial
Financial Statements. The Initial Financial Statements fairly present
Borrower's Consolidated financial position at the respective dates thereof and
the Consolidated results of Borrower's operations and Borrower's Consolidated
cash flows for the respective periods thereof. Since the date of the audited
Initial Financial Statements no Material Adverse Change has occurred, except as
reflected in the quarterly Initial Financial Statements or in the Disclosure
Schedule. All Initial Financial Statements were prepared in accordance with
GAAP.

Section 5.7. Other Obligations and Restrictions. No Restricted Person
has any outstanding Liabilities of any kind (including contingent obligations,
tax assessments, and unusual forward or long-term commitments) which is, in the
aggregate, material to Borrower or material with respect to Borrower's
Consolidated financial condition and not shown in the Initial Financial
Statements or disclosed in the Disclosure Schedule or a Disclosure Report.
Except as shown in the Initial Financial Statements or disclosed in the
Disclosure Schedule or a Disclosure Report, no Restricted Person is subject to
or restricted by any franchise, contract, deed, charter restriction, or other
instrument or restriction which could cause a Material Adverse Change.

Section 5.8. Full Disclosure. No certificate, statement or other
information delivered herewith or heretofore by any Restricted Person to any
Lender Party in connection with the negotiation of this Agreement or in
connection with any transaction contemplated hereby contains any untrue
statement of a material fact or omits to state any material fact known to any
Restricted Person (other than industry-wide risks normally associated with the
types of businesses conducted by Restricted Persons) necessary to make the
statements contained herein or therein not misleading as of the date made or
deemed made. There is no fact known to any Restricted Person (other than
industry-wide risks normally associated with the types of businesses conducted
by Restricted Persons) that has not been disclosed to each Lender Party in
writing which could cause a Material Adverse Change. There are no statements
or conclusions in any Engineering 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
Engineering Report is necessarily based upon professional opinions, estimates
and projections and that Borrower does not warrant that such opinions,
estimates and projections will ultimately prove to have been accurate.
Borrower has heretofore delivered to each Lender Party true, correct and
complete copies of the Initial Engineering Report.

39
Section 5.9. Litigation. Except as disclosed in the Initial Financial
Statements or in the Disclosure Schedule: (i) there are no actions, suits or
legal, equitable, arbitrative or administrative proceedings pending, or to the
knowledge of any Restricted Person threatened, against any Restricted Person
before any Tribunal which could cause a Material Adverse Change, and (ii) there
are no outstanding judgments, injunctions, writs, rulings or orders by any such
Tribunal against any Restricted Person or any Restricted Person's stockholders,
partners, directors or officers which could cause a Material Adverse Change.

Section 5.10. Labor Disputes and Acts of God. Except as disclosed in
the Disclosure Schedule or a Disclosure Report, neither the business nor the
properties of any Restricted Person has been affected by any fire, explosion,
accident, strike, lockout or other labor dispute, drought, storm, hail,
earthquake, embargo, act of God or of the public enemy or other casualty
(whether or not covered by insurance), which could cause a Material Adverse
Change.

Section 5.11. ERISA Plans and Liabilities. All currently existing
ERISA Plans are listed in the Disclosure Schedule or a Disclosure Report.
Except as disclosed in the Initial Financial Statements or in the Disclosure
Schedule or a Disclosure Report, no Termination Event has occurred with respect
to any ERISA Plan and all ERISA Affiliates are in compliance with ERISA in all
material respects. No ERISA Affiliate is required to contribute to, or has any
other absolute or contingent liability in respect of, any "multiemployer plan"
as defined in Section 4001 of ERISA. Except as set forth in the Disclosure
Schedule or a Disclosure Report: (i) no "accumulated funding deficiency" (as
defined in Section 412(a) of the Internal Revenue Code of 1986, as amended)
exists with respect to any ERISA Plan, whether or not waived by the Secretary
of the Treasury or his delegate, and (ii) the current value of each ERISA
Plan's benefits does not exceed the current value of such ERISA Plan's assets
available for the payment of such benefits by more than $500,000.

Section 5.12. Environmental and Other Laws. Except as disclosed in the
Disclosure Schedule or a Disclosure Report: (a) Restricted Persons are
conducting their businesses in compliance with all applicable Laws, including
Environmental Laws, and have and are in compliance with all licenses and
permits required under any such Laws and there are no circumstances that may
prevent or interfere with the ability of the Restricted Persons to conduct
their business in compliance with applicable Laws, including Environmental
Laws; (b) none of the operations or properties of any Restricted Person is the
subject of a pending Environmental Claim or to the best of Borrower's knowledge
a threatened Environmental Claim; (c) no Restricted Person (and to the best
knowledge of Borrower, no other Person) has filed any notice under any Law
indicating that any Restricted Person is responsible for the improper Release,
or the improper storage or disposal, of any Hazardous Materials or that any
Hazardous Materials have been improperly Released, or are improperly stored or
disposed of, upon any property of any Restricted Person; (d) except as
necessary to conduct the business of the Restricted Persons, Hazardous
Materials have not been present, generated, used, treated, or stored on or
transported to or from the property of any Restricted Person, and no Restricted
Person has transported or arranged for the transportation of any Hazardous
Material to any location which is (i) listed on the National Priorities List
under the Comprehensive

40
Environmental Response, Compensation and Liability Act of 1980, as amended,
listed for possible inclusion on such National Priorities List by the
Environmental Protection Agency in its Comprehensive Environmental Response,
Compensation and Liability Information System List, or listed on any similar
state list or (ii) the subject of federal, state or local enforcement actions
or other investigations which may lead to Environmental Claims against any
Restricted Person; and (e) no Restricted Person otherwise has any known
material contingent liability under any Environmental Laws or in connection
with a Release, or the storage or disposal, of any Hazardous Materials.

Section 5.13. Names and Places of Business. No Restricted Person has,
during the preceding five years, had, been known by, or used any other trade or
fictitious name, except as disclosed in the Disclosure Schedule. Except as
otherwise indicated in the Disclosure Schedule or a Disclosure Report, the
chief executive office and principal place of business of each Restricted
Person are (and for the preceding five years have been) located at the address
of Borrower set out in Section 10.3. Except as indicated in the Disclosure
Schedule or a Disclosure Report, no Restricted Person has any other office or
place of business.

Section 5.14. Borrower's Subsidiaries. Borrower does not presently
have any Subsidiary or own any stock in any other corporation or association
which owns assets having a value in excess of $250,000, except those listed in
the Disclosure Schedule or a Disclosure Report. Neither Borrower nor any
Restricted Person is a member of any general or limited partnership, joint
venture or association of any type whatsoever which owns assets having a value
in excess of $250,000 except (i) those listed in the Disclosure Schedule or a
Disclosure Report, and (ii) associations, joint ventures or other relationships
whose businesses are limited to the exploration, development and operation of
oil, gas or mineral properties and interests owned directly by the parties in
such associations, joint ventures or relationships. Except as otherwise
revealed in a Disclosure Report, Borrower owns, directly or indirectly, the
equity interest in each of its Subsidiaries which is indicated in the
Disclosure Schedule.

Section 5.15. Title to Properties; Licenses. Each Restricted Person
has good and marketable title to all of its material properties and assets,
free and clear of all Liens other than Permitted Liens and of all impediments
to the use of such properties and assets in such Restricted Person's business,
except that no representation or warranty is made with respect to any oil, gas
or mineral property or interest to which no proved oil or gas reserves are
properly attributed. Each Restricted Person possesses all licenses, permits,
franchises, patents, copyrights, trademarks and trade names, and other
intellectual property (or otherwise possesses the right to use such
intellectual property without violation of the rights of any other Person)
which are necessary to carry out its business as presently conducted and as
presently proposed to be conducted hereafter, and no Restricted Person is in
violation in any material respect of the terms under which it possesses such
intellectual property or the right to use such intellectual property.

Section 5.16. Government Regulation. Neither Borrower nor any other
Restricted Person owing Obligations is subject to regulation under the Public
Utility Holding Company Act of 1935, the Federal Power Act, the Investment
Company Act of 1940 (as any of the

41
preceding acts have been amended) or any other Law which regulates the
incurring by such Person of Indebtedness, including Laws relating to common
contract carriers or the sale of electricity, gas, steam, water or other public
utility services.

Section 5.17. Insider. No Restricted Person, nor any Person having
"control" (as that term is defined in 12 U.S.C. Section 375b(9) or in
regulations promulgated pursuant thereto) of any Restricted Person, is a
"director" or an "executive officer" or "principal shareholder" (as those terms
are defined in 12 U.S.C. Section 375b(8) or (9) or in regulations promulgated
pursuant thereto) of any Lender Party, of a bank holding company of which any
Lender Party is a Subsidiary or of any Subsidiary of a bank holding company of
which any Lender Party is a Subsidiary.

ARTICLE VI - Affirmative Covenants of Borrower

To conform with the terms and conditions under which each Lender Party
is willing to have credit outstanding to Borrower, and to induce each Lender
Party to enter into this Agreement and extend credit hereunder, Borrower
warrants, covenants and agrees that until the full and final payment of the
Obligations and the termination of this Agreement, unless Required Lenders have
previously agreed otherwise:

Section 6.1. Payment and Performance. Borrower will pay all amounts
due under the Loan Documents in accordance with the terms thereof and will
observe, perform and comply with every covenant, term and condition expressed
or implied in the Loan Documents. Borrower will cause each other Restricted
Person to observe, perform and comply with every such term, covenant and
condition.

Section 6.2. Books' Financial Statements and Reports. Each Restricted
Person will at all times maintain full and accurate books of account and
records. Borrower will maintain and will cause its Subsidiaries to maintain a
standard system of accounting, will maintain its Fiscal Year, and will furnish
the following statements and reports to each Lender Party at Borrower's
expense:

(a) As soon as available, and in any event by the earlier of
five (5) days after the filing thereof with the SEC and the one hundred
twentieth (120th) day after the end of each Fiscal Year, complete
Consolidated and consolidating financial statements of Borrower together
with all notes thereto, prepared in reasonable detail in accordance with
GAAP, together with an unqualified opinion, based on an audit using
generally accepted auditing standards, by Deloitte & Touche, or other
independent certified public accountants selected by Borrower and
acceptable to Required Lenders, stating that such Consolidated and
consolidating financial statements have been so prepared. These
financial statements shall contain Consolidated and consolidating
balance sheet as of the end of such Fiscal Year and Consolidated and
consolidating statements of earnings, of cash flows, and of changes in
owners' equity for such Fiscal Year, each setting forth in comparative
form the corresponding figures for the preceding Fiscal Year. Together

42
with such financial statements, Borrower will furnish a report signed by
such accountants (i) stating that they have read this Agreement, (ii)
containing calculations showing compliance (or non-compliance) at the
end of such Fiscal Year with the requirements of Sections 7.1, 7.11,
7.12 and 7.13, and (iii) further stating that in making their
examination and reporting on the Consolidated and consolidating
financial statements described above they did not conclude that any
Default existed at the end of such Fiscal Year or at the time of their
report, or, if they did conclude that a Default existed, specifying its
nature and period of existence.

(b) As soon as available, and in any event by the earlier of
five (5) days after the filing thereof with the SEC and the sixtieth
(60th) day after the end of the first three Fiscal Quarters in each
Fiscal Year, Borrower's Consolidated balance sheet as of the end of such
Fiscal Quarter and Consolidated statements of Borrower's earnings and
cash flows for the period from the beginning of the then current Fiscal
Year to the end of such Fiscal Quarter, all in reasonable detail and
prepared in accordance with GAAP, subject to changes resulting from
normal year-end adjustments. In addition Borrower will, together with
each such set of financial statements and each set of financial
statements furnished under subsection (a) of this section], furnish a
certificate in the form of Exhibit D signed by the chief financial
officer of Borrower stating that such financial statements are accurate
and complete (subject to normal year-end adjustments), stating that he
has reviewed the Loan Documents, containing calculations showing
compliance (or non-compliance) at the end of such Fiscal Quarter with
the requirements of Sections 7.1, 7.11, 7.12 and 7.13 and stating that
no Default exists at the end of such Fiscal Quarter or at the time of
such certificate or specifying the nature and period of existence of any
such Default.

(c) Promptly upon their becoming available, copies of all
financial statements, reports, notices and proxy statements sent by any
Restricted Person to its stockholders and all registration statements,
periodic reports and other statements and schedules filed by any
Restricted Person with any securities exchange, the SEC or any similar
governmental authority.

(d) By September 1 of each year, an engineering report prepared
by Xxxxx Xxxxx Company, or other independent petroleum engineers chosen
by Borrower and acceptable to Required Lenders, concerning all oil and
gas properties and interests owned by any Restricted Person which are
located in or offshore of the United States and which have attributable
to them proved oil or gas reserves. This report shall be satisfactory
to Agent, shall take into account any "over-produced" status under gas
balancing arrangements, and shall contain information and analysis
comparable in scope to that contained in the Initial Engineering Report.
This report shall distinguish (or shall be delivered together with a
certificate from an appropriate officer of Borrower which distinguishes)
those properties treated in the report which are Collateral from those
properties treated in the report which are not Collateral.

43
(e) With the delivery of each Engineering Report, the Borrower
shall provide to each Lender Party, a certificate from the president or
chief financial officer of Eastern American certifying that, to the best
of his knowledge and in all material respects: (i) the information
contained in such Engineering Report and any other information delivered
in connection therewith is true and correct, (ii) Eastern American (and
Eastern Pipeline Corporation as to the pipelines and gathering systems)
owns good and defensible title to the oil and gas properties, the
pipeline properties, the gas plant properties, and the partnership
assets evaluated in such Engineering Report (in this section called the
"Covered Properties") and are free of all Liens except for Liens
permitted by Section 7.2, (iii) 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 its oil and gas properties and the
partnership assets evaluated in such Engineering Report (other than
those permitted by the Security Documents) which would require the
Eastern American or any partnership to deliver hydrocarbons produced
from such oil and gas properties or partnership assets at some future
time without then or thereafter receiving full payment therefor, (iv)
none of the Covered Properties has 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 all of such properties sold
and in such detail as reasonably required by Agent, (v) attached to the
certificate is a list of all Persons disbursing proceeds to Eastern
American from its oil and gas properties, and (vi) set forth on a
schedule attached to the certificate is the present discounted value of
all Covered Properties that are part of the Mortgaged Properties
together with a list of all xxxxx that are owned by partnerships, (vii)
oil and gas properties which comprise at least eighty percent (80%) of
the total value of the oil and gas properties which are included within
the Covered Properties and which are also owned directly by Eastern
American, are part of the Mortgaged Properties, and (viii) oil and gas
properties which comprise at least eighty percent (80%) of the total
value of the oil and gas properties which are included within the
Covered Properties and which are owned either directly by Eastern
American or by partnerships in which Eastern American has an interest,
are part of the Mortgaged Properties (either by virtue of a mortgage on
the oil and gas properties or a security interest in the partnership
interests).

(f) As soon as available, and in any event within one hundred
twenty (120) days after the end of each Fiscal Year, a report describing
(i) the gross volume of production and sales attributable to production
during such Fiscal Year from the properties described in subsection (d)
above and describing the related taxes, leasehold operating expenses and
capital costs attributable thereto and incurred during such Fiscal Year;
(ii) the pipeline volumes of Natural Gas delivered by Restricted Persons
for such Fiscal Year in connection with, and transportation fees charged
by the Restricted Persons for such Fiscal Year delivered through all
pipeline facilities of Restricted Persons; and (iii) volumes, prices and
margins for all marketing activities of the Restricted Persons.

Section 6.3. Other Information and Inspections. Each Restricted Person
will furnish to each Lender Party any information which Agent may from time to
time request in writing concerning any covenant, provision or condition of the
Loan Documents or any matter in

44
connection with Restricted Persons' businesses and operations. Each Restricted
Person will permit representatives appointed by Agent (including independent
accountants, auditors, agents, attorneys, appraisers and any other Persons) to
visit and inspect during normal business hours any of such Restricted Person's
property, including its books of account, other books and records, and any
facilities or other business assets, and to make extra copies therefrom and
photocopies and photographs thereof, and to write down and record any
information such representatives obtain, and each Restricted Person shall
permit Agent or its representatives to investigate and verify the accuracy of
the information furnished to Agent or any Lender in connection with the Loan
Documents and to discuss all such matters with its officers, employees and
representatives.

Section 6.4. Notice of Material Events and Change of Address. Borrower
will promptly notify each Lender Party in writing, stating that such notice is
being given pursuant to this Agreement, of:

(a) the occurrence of any Material Adverse Change,

(b) the occurrence of any Default,

(c) the acceleration of the maturity of any Indebtedness owed
by any Restricted Person or of any default by any Restricted Person
under any indenture, mortgage, agreement, contract or other instrument
to which any of them is a party or by which any of them or any of their
properties is bound, if such acceleration or default could cause a
Material Adverse Change,

(d) the occurrence of any Termination Event,

(e) any matter for which notice is required under Section
6.12(d),

(f) the filing of any suit or proceeding against any Restricted
Person in which an adverse decision could cause a Material Adverse
Change, and

(g) the occurrence of any material change or disruption under
or with respect to any Material Contract (listed on Exhibit B to item 7
of the Security Schedule which includes Eastern American's gas contract
with Mountaineer) or any other material gas purchase or sales contract.

Upon the occurrence of any of the foregoing Restricted Persons will take all
necessary or appropriate steps to remedy promptly any such Material Adverse
Change, Default, acceleration, default or Termination Event, to protect against
any such adverse claim, to defend any such suit or proceeding, and to resolve
all controversies on account of any of the foregoing. Borrower will also
notify Agent and Agent's counsel in writing at least twenty Business Days prior
to the date that any Restricted Person changes its name or the location of its
chief executive office or principal place of business or the place where it
keeps its books

45
and records concerning the Collateral, furnishing with such notice any
necessary financing statement amendments or requesting Agent and its counsel to
prepare the same.

Section 6.5. Maintenance of Properties. Each Restricted Person will
maintain, preserve, protect, and keep all Collateral and all other property
used or useful in the conduct of its business in good condition and in
compliance with all applicable Laws, and will from time to time make all
repairs, renewals and replacements needed to enable the business and operations
carried on in connection therewith to be promptly and advantageously conducted
at all times.

Section 6.6. Maintenance of Existence and Qualifications. Each
Restricted Person will maintain and preserve its existence and its rights and
franchises in full force and effect and will qualify to do business in all
states or jurisdictions where required by applicable Law, except where the
failure so to qualify will not cause a Material Adverse Change.

Section 6.7. Payment of Trade Liabilities, Taxes, etc. Each Restricted
Person will (a) timely file all required tax returns; (b) timely pay all taxes,
assessments, and other governmental charges or levies imposed upon it or upon
its income, profits or property; (c) within ninety (90) days after the same
becomes due pay all Liabilities owed by it on ordinary trade terms to vendors,
suppliers and other Persons providing goods and services used by it in the
ordinary course of its business; (d) pay and discharge when due all other
Liabilities now or hereafter owed by it; and (e) maintain appropriate accruals
and reserves for all of the foregoing in accordance with GAAP. Each Restricted
Person may, however, delay paying or discharging any of the foregoing so long
as it is in good faith contesting the validity thereof by appropriate
proceedings (promptly instituted and diligently concluded) and has set aside on
its books adequate reserves therefor.

Section 6.8. Insurance. Each Restricted Person will keep or cause to
be kept insured by financially sound and reputable insurers its property in
accordance with the Insurance Schedule.

Section 6.9. Performance on Borrower's Behalf. If any Restricted
Person fails to pay any taxes, insurance premiums, expenses, attorneys' fees or
other amounts it is required to pay under any Loan Document, Agent may pay the
same. Borrower shall immediately reimburse Agent for any such payments and
each amount paid by Agent shall constitute an Obligation owed hereunder which
is due and payable on the date such amount is paid by Agent.

Section 6.10. Interest. Borrower hereby promises to each Lender Party
to pay interest at the Late Payment Rate on all Obligations (including
Obligations to pay fees or to reimburse or indemnify any Lender Party) which
Borrower has in this Agreement promised to pay to such Lender Party and which
are not paid when due. Such interest shall accrue from the date such
Obligations become due until they are paid.

Section 6.11. Compliance with Agreements and Law. Each Restricted
Person will perform all material obligations it is required to perform under
the terms of each indenture,

46
mortgage, deed of trust, security agreement, lease, franchise, agreement,
contract or other instrument or obligation to which it is a party or by which
it or any of its properties is bound. Each Restricted Person will conduct its
business and affairs in compliance with all Laws applicable thereto.

Section 6.12. Environmental Matters; Environmental Reviews.

(a) Each Restricted Person will comply in all material respects
with all Environmental Laws now or hereafter applicable to such
Restricted Person and shall obtain, at or prior to the time required by
applicable Environmental Laws, all environmental, health and safety
permits, licenses and other authorizations necessary for its operations
and will maintain such authorizations in full force and effect.

(b) The Restricted Persons will not dispose of, Release, treat,
store, use, recycle or generate or transport Hazardous Material or
permit same to occur on their properties other than in the regular
course of business in compliance with Environmental Laws in all material
respects.

(c) Borrower will promptly furnish to Agent all written notices
of violation, orders, claims, citations, complaints, penalty
assessments, suits or other proceedings received by Borrower, or of
which it has notice, pending or threatened against Borrower, by any
governmental authority or any other Person with respect to any alleged
violation of or non-compliance with any Environmental Laws or any
permits, licenses or authorizations in connection with its ownership or
use of its properties or the operation of its business, as well as a
reasonably entailed files of any material Release or existence involving
a Hazardous Material; and Borrower shall conduct and complete any
investigation, sampling, monitoring and testing and undertake any action
required under Environmental Laws with due diligence and in compliance
therewith in all material respects.

(d) Borrower will promptly furnish to Agent all requests for
information, notices of claim, demand letters, and other notifications,
involving an Environmental Claim in excess of $250,000 received by
Borrower in connection with its ownership or use of its properties or
the conduct of its business, relating to potential responsibility with
respect to any investigation or clean-up of Hazardous Material at any
location.

(e) Concurrent with the furnishing of financial statements
pursuant to Section 6.2(a), Borrower will furnish to Agent a reasonably
detailed written description of all material environmental claims and
violation of Environmental Laws.

Section 6.13. Evidence of Compliance. Each Restricted Person will
furnish to each Lender Party at such Restricted Person's or Borrower's expense
all evidence which Agent from time to time reasonably requests in writing as to
the accuracy and validity of or compliance with all representations, warranties
and covenants made by any Restricted Person

47
in the Loan Documents, the satisfaction of all conditions contained therein,
and all other matters pertaining thereto.

Section 6.14. Solvency. Upon giving effect to the issuance of the
Notes, the execution of the Loan Documents by Borrower and the consummation of
the transactions contemplated hereby and the making of each Advance, (i)
Borrower will be solvent (as such term is used in applicable bankruptcy,
liquidation, receivership, insolvency or similar laws), and (ii) Eastern
American will be solvent (as such term is used in applicable bankruptcy,
liquidation, receivership, insolvency or similar laws).

Section 6.15. Maintenance of Liens on Eighty Percent of Properties.
The Mortgaged Properties shall constitute at least eighty percent (80%) of the
total value of the oil and gas properties of Eastern American and its
Subsidiaries. Within thirty (30) days following each Determination Date,
Borrower will execute and deliver documentation in form and substance
satisfactory to Agent, granting to Agent first perfected Liens on and in oil
and gas properties that are not then part of the Mortgaged Properties,
sufficient to cause the Mortgaged Properties to constitute eighty percent (80%)
of the total value of the oil and gas properties directly owned by Eastern
American and its Subsidiaries and partnership interests that are not then part
of the Mortgaged Properties, sufficient to cause the Mortgaged Properties to
constitute eighty percent (80%) of the total value of the oil and gas
properties directly owned by Eastern American and its Subsidiaries and the oil
and gas properties interests held by partnerships in which the Eastern American
owns an interest. In addition, Borrower will furnish to Agent title due
diligence in form and substance satisfactory to Agent and will furnish all
other documents and information relating to such properties as Agent may
reasonably request.

Section 6.16. Perfection and Protection of Security Interests and
Liens. Borrower will from time to time deliver, and will cause each other
Restricted Person from time to time to deliver, to Agent any financing
statements, continuation statements, extension agreements and other documents,
properly completed and executed (and acknowledged when required) by Restricted
Persons in form and substance satisfactory to Agent, which Agent requests for
the purpose of perfecting, confirming, or protecting any Liens or other rights
in Collateral securing any Obligations. At the time of recording of the
Security Documents, counsel for Borrower shall conduct searches of the lien,
judgment, litigation and UCC records of the counties and offices where such
documents are filed and promptly upon receipt thereof from such offices forward
such searches to Agent's counsel together with the original recorded Security
Documents and file stamped copies of the related financing statements.

Section 6.17. Bank Accounts; Offset. To secure the repayment of the
Obligations Borrower hereby grants to each Lender Party a security interest, a
lien, and a right of offset, each of which shall be in addition to all other
interests, liens, and rights of any Lender Party at common law, under the Loan
Documents, or otherwise, and each of which shall be upon and against (a) any
and all moneys, securities or other property (and the proceeds therefrom) of
Borrower now or hereafter held or received by or in transit to any Lender Party
from or for the account of Borrower, whether for safekeeping, custody, pledge,
transmission, collection or

48
otherwise, (b) any and all deposits (general or special, time or demand,
provisional or final) of Borrower with any Lender Party, and (c) any other
credits and claims of Borrower at any time existing against any Lender Party,
including claims under certificates of deposit. At any time and from time to
time after the occurrence of any Default, each Lender Party is hereby
authorized to foreclose upon, or to offset against the Obligations then due and
payable (in either case without notice to Borrower), any and all items
hereinabove referred to. The remedies of foreclosure and offset are separate
and cumulative, and either may be exercised independently of the other without
regard to procedures or restrictions applicable to the other.

Section 6.18. Production Proceeds. Notwithstanding that, by the terms
of the various Security Documents, the grantors thereunder are and will be
assigning to Agent and Lenders all of the "Production Proceeds" and
"Transportation, Separation and Processing Proceeds" (as defined therein and in
this section collectively called "Proceeds") accruing to the property covered
thereby, so long as no Default has occurred such Persons may continue to
receive from the purchasers of production all such Proceeds, subject, however,
to the Liens created under the Security Documents, which Liens are hereby
affirmed and ratified. Upon the occurrence of a Default, Agent and Lenders may
exercise all rights and remedies granted under the Security Documents,
including the right to obtain possession of all Proceeds then held by
Restricted Persons or to receive directly from the purchasers of production all
other Proceeds. In no case shall any failure, whether purposed or inadvertent,
by Agent or Lenders to collect directly any such Proceeds constitute in any way
a waiver, remission or release of any of their rights under the Security
Documents, nor shall any release of any Proceeds by Agent or Lenders to
Restricted Persons constitute a waiver, remission, or release of any other
Proceeds or of any rights of Agent or Lenders to collect other Proceeds
thereafter.

Section 6.19. Subsidiary Guaranties. In the event that any Subsidiary
of Borrower delivers a Guaranty to the Trustee under the Indenture pursuant to
Section 4.14 thereof, such Subsidiary shall simultaneously (i) execute and
deliver to Agent an unconditional Guaranty of the Obligations substantially in
the form of Exhibit G, (ii) waive and agree not in any manner whatsoever to
claim or take the benefit or advantage of, any rights of reimbursement,
indemnity or subrogation or any other rights against Borrower or any other
Restricted Person as a result of any payment by such Subsidiary under such
Guaranty, and (iii) deliver to Agent an opinion of counsel to the effect that
(A) such Guaranty has been duly executed and authorized and (B) such Guaranty
constitutes a valid, binding and enforceable obligation of such Subsidiary,
except insofar as enforcement thereof may be limited by bankruptcy, insolvency
or similar laws (including, without limitation, all laws relating to fraudulent
transfers) and except insofar as enforcement thereof is subject to general
principles of equity.

ARTICLE VII - Negative Covenants of Borrower

To conform with the terms and conditions under which each Lender Party
is willing to have credit outstanding to Borrower, and to induce each Lender
Party to enter into this Agreement and make the Loans, Borrower warrants,
covenants and agrees that until the full and final payment of the Obligations
and the termination of this Agreement, unless Required

49
Lenders have previously agreed otherwise:

Section 7.1. Indebtedness. No Restricted Person will in any manner owe
or be liable for Indebtedness except:

(a) the Obligations.

(b) unsecured Indebtedness among the Restricted Persons and
Mountaineer; provided that such Indebtedness to Mountaineer shall be
incurred in an Arm's Length Transaction.

(d) Indebtedness outstanding under the instruments and
agreements described on the Disclosure Schedule, and any renewals or
extensions thereof provided that the amount of such Liabilities is not
increased nor the terms thereof changed in any manner which is less
favorable to such Restricted Person than the original terms of such
Liabilities.

(e) Indebtedness arising under Hedging Contracts that are
permitted under Section 7.3.

(f) obligations arising with respect to sale and lease-back
transactions and operating leases entered into in the ordinary course of
such Restricted Person's business in arm's length transactions at
competitive market rates under competitive terms and conditions in all
respects, provided that the obligations required to be paid in any
Fiscal Year under or with respect to such sale and lease-back
transactions and any such operating leases do not in the aggregate
exceed $2,500,000.

(g) Acquisition Indebtedness.

(h) production imbalances which are permitted under the
Security Documents.

(i) obligations of Borrower in an aggregate amount not to
exceed $1,000,000 with respect to letters of credit (calculated based on
the undrawn amount under such letters of credit as well as any amounts
which have been drawn and have not been repaid) provided to
counterparties to secure obligations of the Restricted Persons with
respect to Hedging Contracts permitted under Section 7.3 .

(j) unsecured miscellaneous items of Indebtedness not described
in subsections (a) through (i) (including but not limited to
Indebtedness of the type permitted by subsection (i) above) which do not
in the aggregate (taking into account all such Indebtedness of all
Restricted Persons) exceed an amount equal to $5,000,000, at any one
time outstanding.

50
Section 7.2. Limitation on Liens. No Restricted Person will create,
assume or permit to exist any Lien upon any of the properties or assets which
it now owns or hereafter acquires, except, to the extent not otherwise
forbidden by the Security Documents the following ("Permitted Liens"):

(a) Liens which secure Obligations only.

(b) statutory Liens for taxes, statutory mechanics' and
materialmen's Liens incurred in the ordinary course of business, and
other similar Liens incurred in the ordinary course of business,
provided such Liens do not secure Indebtedness and secure only
obligations which are not delinquent or which are being contested as
provided in Section 6.7 and which do not exceed $5,000,000 in the
aggregate.

(c) as to property which is Collateral, any Liens expressly
permitted to encumber such Collateral under any Security Document
covering such Collateral.

(d) liens securing Acquisition Indebtedness only; provided that
such Liens shall secure only the assets acquired with the proceeds of
such Acquisition Debt.

(e) judgment liens which do not give rise to an Event of
Default so long as any appropriate legal proceeding that 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
duly initiated shall not have expired.

(f) purchase money security interests in equipment acquired by
the Restricted Persons, provided that such security interests secure
only the Indebtedness incurred for the purchase of such equipment and
such security interests encumber only the equipment acquired with the
proceeds of such Indebtedness.

(g) deposits made to counterparties in connection with Hedging
Contracts; provided that the aggregate amount of such deposits shall not
exceed $3,000,000.

Section 7.3. Hedging Contracts. No Restricted Person will be a party
to or in any manner be liable on any forward, future, swap or hedging contract,
except:

(a) contracts entered into with the purpose and effect of
fixing prices on oil or gas which is expected to be produced by
Restricted Persons or which the Restricted Persons are legally obligated
to purchase under purchase contracts then in effect, provided that at
all times: (1) the aggregate monthly production covered by all such
contracts (determined, in the case of contracts that are not settled on
a monthly basis, by a monthly proration acceptable to Agent) for any
single month does not in the aggregate exceed the sum of eighty-five
percent (85%) of Restricted Persons' aggregate Projected Oil and Gas
Production anticipated to be sold in the ordinary course of Restricted
Persons' businesses for such month and eighty-five percent (85%) of the
oil and gas which Restricted Persons are legally obligated to purchase
in such month, (2) no such

51
contract requires any Restricted Person to put up money (except as
provided in Section 7.2(g)), assets, letters of credit (unless the
Indebtedness arising with respect thereto is permitted under Section
7.1(i) or (j)), or other security against the event of its
nonperformance prior to actual default by such Restricted Person in
performing its obligations thereunder, and (3) each such contract is
with a counterparty or has a guarantor of the obligation of the
counterparty who (unless such counterparty is a Lender Party or one of
its Affiliates) at the time the contract is made has long-term
obligations rated BBB- or Baa3 or better, respectively, by either Rating
Agency or is an investment grade-rated industry participant. As used in
this subsection, the term "Projected Oil and Gas Production" means the
projected production of oil or gas (measured by volume unit or BTU
equivalent, not sales price) for the term of the contracts or a
particular month, as applicable, from properties and interests owned by
any Restricted Person which are located in or offshore of the United
States and which have attributable to them proved oil or gas reserves,
as such production is projected in the most recent report delivered
pursuant to Section 6.2(d), after deducting projected production from
any properties or interests sold or under contract for sale that had
been included in such report and after adding projected production from
any properties or interests that had not been reflected in such report
but that are reflected in a separate or supplemental reports meeting the
requirements of such Section 6.2(d) above and otherwise are satisfactory
to Agent.

(b) contracts entered into by a Restricted Person with the
purpose and effect of fixing interest rates on a principal amount of
indebtedness of such Restricted Person that is accruing interest at a
variable rate, provided that (1) the aggregate notional amount of such
contracts never exceeds seventy-five percent (75%) of the anticipated
outstanding principal balance of the indebtedness to be hedged by such
contracts or an average of such principal balances calculated using a
generally accepted method of matching interest swap contracts to
declining principal balances, (2) the floating rate index of each such
contract generally matches the index used to determine the floating
rates of interest on the corresponding indebtedness to be hedged by such
contract and (3) each such contract is with a counterparty or has a
guarantor of the obligation of the counterparty who (unless such
counterparty is a Lender Party or one of its Affiliates) at the time the
contract is made has long-term obligations rated AA or Aa2 or better,
respectively, by either Rating Agency.

Section 7.4. Limitation on Mergers, Issuances of Securities. Except as
expressly provided in this subsection no Restricted Person will merge or
consolidate with or into any other business entity. Any Subsidiary of Borrower
may, however, be merged into or consolidated with (i) another Subsidiary of
Borrower, or (ii) Borrower, so long as Borrower is the surviving business
entity. Borrower will not issue any securities other than shares of its common
stock and any options or warrants giving the holders thereof only the right to
acquire such shares. No Subsidiary of Borrower will issue any additional
shares of its Capital Stock or other securities or any options, warrants or
other rights to acquire such additional shares or other securities except (i)
to Borrower, (ii) for the purposes of implementing employee stock options
plans, and (iii) Nonvoting Common Stock to officers and employees of the
Restricted Persons, but only to the extent not otherwise forbidden under the
terms hereof.

52
Section 7.5. Limitation on Sales of Property. No Restricted Person
will sell, transfer, lease, exchange, alienate or dispose of any of its
material assets or properties] or any material interest therein except, to the
extent not otherwise forbidden under the Security Documents:

(a) equipment which is worthless or obsolete or which is
replaced by equipment of equal suitability and value.

(b) inventory (including oil, natural gas, natural gas liquids
or hydrocarbons or mineral products and seismic data) which is sold in
the ordinary course of business on ordinary trade terms.

(c) interests in oil and gas properties, or portions thereof,
to which no proved reserves of oil, gas or other liquid or gaseous
hydrocarbons are properly attributed.

(d) transfers of property by one Restricted Person to another
Restricted Person.

(e) transfers of property by any Restricted Person to
Mountaineer in an Arm's Length Transaction.

(f) other property (excluding Collateral) which is sold for
fair consideration not in the aggregate in excess of $5,000,000 in any
Fiscal Year, so long as property sold is not included in the Borrowing
Base.

Neither Borrower nor any of Borrower's Subsidiaries will sell, transfer or
otherwise dispose of Capital Stock of any of Borrower's Subsidiaries except
that any Subsidiary of Borrower may sell or issue its own Capital Stock to the
extent not otherwise prohibited hereunder. No Restricted Person will discount,
sell, pledge or assign any notes payable to it, accounts receivable or future
income except to the extent expressly permitted under the Loan Documents.

Section 7.6. Limitation on Distributions, Redemptions and Prepayments
of Subordinated Notes. No Restricted Person will make any Distribution, except
as expressly provided in this section, and Borrower will not redeem, purchase,
prepay or defease any Subordinated Notes prior to the original maturity
thereof. Distributions may be made (i) by Subsidiaries of Borrower without
limitation to Borrower and by Subsidiaries of Borrower to officers and
directors of the Restricted Persons with respect to Nonvoting Common Stock, in
an aggregate amount not to exceed $350,000; and (ii) by Borrower, to the extent
that the aggregate value of all Distributions made by Borrower in any Four
Quarter Period does not exceed fifty percent (50%) of Borrower's Consolidated
Net Income for such Four Quarter Period so long as no Default or Event of
Default or Borrowing Base Deficiency exists at the time such Distribution is
made, or will occur as a result of the making thereof. In addition to the
foregoing Borrower may (A) declare and pay to any Persons dividends payable
only in its common stock and (B) repurchase its common stock from officers and
directors of the Restricted Persons and Mountaineer so long as the amount paid
by Borrower in connection with such repurchases does not exceed $2,000,000 in
the aggregate during any Four Quarter Period and so long as

53
no Default or Event of Default or Borrowing Base Deficiency exists at the time
such repurchase is made, or will occur as a result of the making thereof.

Section 7.7. Limitation on Investments and New Businesses. No
Restricted Person will (i) make any expenditure or commitment or incur any
obligation or enter into or engage in any transaction except in the ordinary
course of business or except as otherwise expressly permitted hereunder, (ii)
engage directly or indirectly in any business or conduct any operations except
the energy business, (iii) make any acquisitions of or Investments in any
Person, except Investments in Cash Equivalents and Investments in Wholly-owned
Subsidiaries of Borrower, (iv) make any significant acquisition of or
Investments in any properties except properties used in the energy business, or
(v) make Investments through Eastern Capital Corporation in an aggregate amount
in excess of $5,000,000; provided that no acquisition or Investment permitted
under the immediately preceding clauses (iii) and (iv) and under this clause
(v) may be made if a Default, Event of Default or Borrowing Base Deficiency
exists at the time such acquisition or Investment is made or will occur as a
result thereof.

Section 7.8. Limitation on Credit Extensions. Except for Investments
permitted by Section 7.7, no Restricted Person will extend credit, make
advances or make loans other than (i) normal and prudent extensions of credit
to customers buying goods and services in the ordinary course of business,
which extensions shall not be for longer periods than those extended by similar
businesses operated in a normal and prudent manner, (ii) loans to other
Restricted Persons or to Mountaineer, so long as no Default, Event of Default
or Borrowing Base Deficiency exists at the time such loan is made and any such
loan to Mountaineer is an Arm's Length Transaction, and (iii) loans to officers
and directors of the Restricted Persons made by the Restricted Persons from
time to time in an aggregate amount not to exceed $500,000.

Section 7.9. Transactions with Affiliates. No Restricted Person will
engage in any material transaction with any of its Affiliates on terms which
are less favorable to it than those which would have been obtainable at the
time in arm's-length dealing with Persons other than such Affiliates, provided
that such restriction shall not apply to transactions among the Restricted
Persons, or to drilling program investments made by officers and directors of
the Restricted Persons from time to time consistent with past practices.

Section 7.10. Certain Contracts; Amendments; Multiemployer ERISA Plans.
Except as expressly provided for in the Loan Documents, no Restricted Person
will, directly or indirectly, enter into, create, or otherwise allow to exist
any contract or other consensual restriction on the ability of any Subsidiary
of Borrower to: (i) pay dividends or make other distributions to Borrower, (ii)
to redeem equity interests held in it by Borrower, (iii) to repay loans and
other indebtedness owing by it to Borrower, or (iv) to transfer any of its
assets to Borrower. No Restricted Person will enter into any "take-or-pay"
contract or other contract or arrangement for the purchase of goods or services
which obligates it to pay for such goods or service regardless of whether they
are delivered or furnished to it. Borrower will not amend or otherwise modify
the Subordinated Notes or the Indenture in any respect or permit any such
amendment or modification which would (1) increase the principal amount payable
thereunder

54
or with respect thereto, (2) increase the rate of interest thereon or any fees
payable with respect thereto, (3) provide for an earlier date for the payment
of any such principal, interest or fees, (4) change any provision relating to
guaranties of the Subordinated Notes, (5) provide for any collateral to secure
the Subordinated Notes, (6) change any provision relating to the subordination
of the Senior Notes or any guaranties thereof, or (7) make any other changes
which, taken as a whole, would be less favorable to Borrower than the original
terms of the Subordinated Notes. No Restricted Person will amend or permit any
amendment to any other contract or lease which releases, qualifies, limits,
makes contingent or otherwise detrimentally affects the rights and benefits of
Agent or any Lender under or acquired pursuant to any Security Documents. No
ERISA Affiliate will incur any obligation to contribute to any "multiemployer
plan" as defined in Section 4001 of ERISA.

Section 7.11. Current Ratio. The ratio of Borrower's Consolidated
current assets to Borrower's Consolidated current liabilities will never be
less than 1.0 to 1.0. For purposes of this section, Borrower's Consolidated
current assets will include any unused portion of the Borrowing Base which is
then available for borrowing, and Borrower's Consolidated current liabilities
will be calculated without including any payments of principal on the Notes or
the Subordinated Notes which are required to be repaid within one year from the
time of calculation.

Section 7.12. Tangible New Worth. Borrower's Consolidated Tangible Net
Worth will never be less than the sum of (i) $30,000,000 plus (ii) fifty
percent (50%) of Borrower's Consolidated Net Income earned during the period
from June 30, 1997, through and including the last day of the calendar month
immediately preceding the date of calculation.

Section 7.13. Interest Coverage. At the end of any Fiscal Quarter
(beginning with the Fiscal Quarter ended September 30, 1997), the ratio of (a)
Adjusted EBITDA to (b) Adjusted Interest Expense for the Four Quarter Period
then ended shall not be less than 1.5 to 1.0; provided that for the Fiscal
Quarters ended September 30, 1997 and December 31, 1997, Interest Expense shall
be calculated for the period from June 1, 1997 to the end of the Fiscal Quarter
with respect to which the determination is being made and shall be annualized).

Section 7.14. Fiscal Year. No Restricted Person will change its fiscal
year.

ARTICLE VIII - Events of Default and Remedies

Section 8.1. Events of Default. Each of the following events
constitutes an Event of Default under this Agreement:

(a) Any Restricted Person fails to pay the principal component
of any Obligation when due and payable, whether at a date for the
payment of a fixed installment or as a contingent or other payment
becomes due and payable or as a result of acceleration or otherwise;

55
(b) Any Restricted Person fails to pay any Obligation (other
than the Obligations in clause (a) above) when due and payable, whether
at a date for the payment of a fixed installment or as a contingent or
other payment becomes due and payable or as a result of acceleration or
otherwise, within three Business Days after the same becomes due;

(c) Any "default" or "event of default" occurs under any Loan
Document which defines either such term, and the same is not remedied
within the applicable period of grace (if any) provided in such Loan
Document;

(d) Any Restricted Person fails to duly observe, perform or
comply with any covenant, agreement or provision of Section 6.4 or
Article VII;

(e) Any Restricted Person fails (other than as referred to in
subsections (a), (b), (c) or (d) above) to duly observe, perform or
comply with any covenant, agreement, condition or provision of any Loan
Document, and such failure remains unremedied for a period of thirty
(30) days after notice of such failure is given by Agent to Borrower;

(f) Any representation or warranty previously, presently or
hereafter made in writing by or on behalf of any Restricted Person in
connection with any Loan Document shall prove to have been false or
incorrect in any material respect on any date on or as of which made, or
any Loan Document at any time ceases to be valid, binding and
enforceable as warranted in Section 5.5 for any reason other than its
release or subordination by Agent;

(g) Any Restricted Person fails to duly observe, perform or
comply with any agreement with any Person or any term or condition of
any instrument, if such agreement or instrument is materially
significant to Borrower or to Borrower and its subsidiaries on a
Consolidated basis or materially significant to Eastern American or
Eastern Systems, and such failure is not remedied within the applicable
period of grace (if any) provided in such agreement or instrument;

(h) Any Restricted Person (i) fails to pay any portion, when
such portion is due, of any of its Indebtedness in excess of $5,000,000,
or (ii) breaches or defaults in the performance of any agreement or
instrument by which any such Indebtedness is issued, evidenced,
governed, or secured, and any such failure, breach or default continues
beyond any applicable period of grace provided therefor;

(i) Either (i) any "accumulated funding deficiency" (as defined
in Section 412(a) of the Internal Revenue Code of 1986, as amended) in
excess of $100,000 exists with respect to any ERISA Plan, whether or not
waived by the Secretary of the Treasury or his delegate, or (ii) any
Termination Event occurs with respect to any ERISA Plan and the then
current value of such ERISA Plan's benefit liabilities exceeds the then
current value of such ERISA Plan's assets available for the payment of
such benefit liabilities by more than $1,000,000 (or in the case of a
Termination Event involving the withdrawal of

56
a substantial employer, the withdrawing employer's proportionate share
of such excess exceeds such amount); and

(j) Any Restricted Person or Mountaineer or any Subsidiary of
Mountaineer:

(i) suffers the entry against it of a judgment, decree
or order for relief by a Tribunal of competent jurisdiction in an
involuntary proceeding commenced under any applicable bankruptcy,
insolvency or other similar Law of any jurisdiction now or
hereafter in effect, including the federal Bankruptcy Code, as
from time to time amended, or has any such proceeding commenced
against it which remains undismissed for a period of thirty days;
or

(ii) commences a voluntary case under any applicable
bankruptcy, insolvency or similar Law now or hereafter in effect,
including the federal Bankruptcy Code, as from time to time
amended; or applies for or consents to the entry of an order for
relief in an involuntary case under any such Law; or makes a
general assignment for the benefit of creditors; or fails
generally to pay (or admits in writing its inability to pay) its
debts as such debts become due; or takes corporate or other
action to authorize any of the foregoing; or

(iii) suffers the appointment of or taking possession by a
receiver, liquidator, assignee, custodian, trustee, sequestrator
or similar official of all or a substantial part of its assets or
of any part of the Collateral in a proceeding brought against or
initiated by it, and such appointment or taking possession is
neither made ineffective nor discharged within thirty days after
the making thereof, or such appointment or taking possession is
at any time consented to, requested by, or acquiesced to by it;
or

(iv) suffers the entry against it of a final judgment for
the payment of money in excess of $1,000,000 (not covered by
insurance satisfactory to Agent in its discretion), unless the
same is discharged within thirty days after the date of entry
thereof or an appeal or appropriate proceeding for review thereof
is taken within such period and a stay of execution pending such
appeal is obtained; or

(v) suffers a writ or warrant of attachment or any
similar process to be issued by any Tribunal against all or any
substantial part of its assets or any part of the Collateral, and
such writ or warrant of attachment or any similar process is not
stayed or released within thirty days after the entry or levy
thereof or after any stay is vacated or set aside; and

(k) The Environmental Claims against the Restricted Persons
exceed an aggregate amount of $5,000,000;

(l) Any Change in Control occurs;

57
(m) Any Material Adverse Change occurs;

(n) Any Loan Document or any Lien created thereby shall be
invalid, or any Person shall have asserted that such Loan Document or
Lien is invalid; and

(o) Any "Event of Default" occurs under the Indenture or the
Subordinated Notes.

Upon the occurrence of an Event of Default described in subsection (j)(i),
(j)(ii) or (j)(iii) of this section with respect to Borrower, all of the
Obligations shall thereupon be immediately due and payable, without demand,
presentment, notice of demand or of dishonor and nonpayment, protest, notice of
protest, notice of intention to accelerate, declaration or notice of
acceleration, or any other notice or declaration of any kind, all of which are
hereby expressly waived by Borrower and each Restricted Person who at any time
ratifies or approves this Agreement. Upon any such acceleration, any
obligation of any Lender to make any further Loans shall be permanently
terminated. During the continuance of any other Event of Default, Agent at any
time and from time to time may (and upon written instructions from Required
Lenders, Agent shall), without notice to Borrower or any other Restricted
Person, do either or both of the following: (1) terminate any obligation of
Lenders to make Loans hereunder, and (2) declare any or all of the Obligations
immediately due and payable, and all such Obligations shall thereupon be
immediately due and payable, without demand, presentment, notice of demand or
of dishonor and nonpayment, protest, notice of protest, notice of intention to
accelerate, declaration or notice of acceleration, or any other notice or
declaration of any kind, all of which are hereby expressly waived by Borrower
and each Restricted Person who at any time ratifies or approves this Agreement.

Section 8.2. Remedies. If any Default shall occur and be continuing,
each Lender Party may protect and enforce its rights under the Loan Documents
by any appropriate proceedings, including proceedings for specific performance
of any covenant or agreement contained in any Loan Document, and each Lender
Party may enforce the payment of any Obligations due it or enforce any other
legal or equitable right which it may have. All rights, remedies and powers
conferred upon Lender Parties under the Loan Documents shall be deemed
cumulative and not exclusive of any other rights, remedies or powers available
under the Loan Documents or at Law or in equity.

ARTICLE IX - Agent

Section 9.1. Appointment and Authority. Each Lender Party hereby
irrevocably authorizes Agent, and Agent hereby undertakes, to receive payments
of principal, interest and other amounts due hereunder as specified herein and
to take all other actions and to exercise such powers under the Loan Documents
as are specifically delegated to Agent by the terms hereof or thereof, together
with all other powers reasonably incidental thereto. The relationship of Agent
to the other Lender Parties is only that of one commercial lender acting as
administrative agent for others, and nothing in the Loan Documents shall be
construed to

58
constitute Agent a trustee or other fiduciary for any holder of any of the
Notes or of any participation therein nor to impose on Agent duties and
obligations other than those expressly provided for in the Loan Documents.
With respect to any matters not expressly provided for in the Loan Documents
and any matters which the Loan Documents place within the discretion of Agent,
Agent shall not be required to exercise any discretion or take any action, and
it may request instructions from Lenders with respect to any such matter, in
which case it shall be required to act or to refrain from acting (and shall be
fully protected and free from liability to all Lenders in so acting or
refraining from acting) upon the instructions of Required Lenders (including
itself), provided, however, that Agent shall not be required to take any action
which exposes it to a risk of personal liability that it considers unreasonable
or which is contrary to the Loan Documents or to applicable Law. Upon receipt
by Agent from Borrower of any communication calling for action on the part of
Lenders or upon notice from any other Lender Party to Agent of any Default or
Event of Default, Agent shall promptly notify each other Lender Party thereof.

Section 9.2. Exculpation, Agent's Reliance, Etc. Neither Agent nor any
of its directors, officers, agents, attorneys, or employees shall be liable for
any action taken or omitted to be taken by any of them under or in connection
with the Loan Documents, INCLUDING THEIR NEGLIGENCE OF ANY KIND, except that
each shall be liable for its own gross negligence or willful misconduct.
Without limiting the generality of the foregoing, Agent (a) may treat the payee
of any Note as the holder thereof until Agent receives written notice of the
assignment or transfer thereof in accordance with this Agreement, signed by
such payee and in form satisfactory to Agent; (b) may consult with legal
counsel (including counsel for Borrower), independent public accountants and
other experts selected by it and shall not be liable for any action taken or
omitted to be taken in good faith by it in accordance with the advice of such
counsel, accountants or experts; (c) makes no warranty or representation to any
other Lender Party and shall not be responsible to any other Lender Party for
any statements, warranties or representations made in or in connection with the
Loan Documents; (d) shall not have any duty to ascertain or to inquire as to
the performance or observance of any of the terms, covenants or conditions of
the Loan Documents on the part of any Restricted Person or to inspect the
property (including the books and records) of any Restricted Person; (e) shall
not be responsible to any other Lender Party for the due execution, legality,
validity, enforceability, genuineness, sufficiency or value of any Loan
Document or any instrument or document furnished in connection therewith; (f)
may rely upon the representations and warranties of each Restricted Person and
the Lenders in exercising its powers hereunder; and (g) shall incur no
liability under or in respect of the Loan Documents by acting upon any notice,
consent, certificate or other instrument or writing (including any telecopy,
telegram, cable or telex) believed by it to be genuine and signed or sent by
the proper Person or Persons.

Section 9.3. Credit Decisions. Each Lender Party acknowledges that it
has, independently and without reliance upon any other Lender Party, made its
own analysis of Borrower and the transactions contemplated hereby and its own
independent decision to enter into this Agreement and the other Loan Documents.
Each Lender Party also acknowledges that it will, independently and without
reliance upon any other Lender Party and based on such

59
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.

Section 9.4. Indemnification. Each Lender agrees to indemnify Agent
(to the extent not reimbursed by Borrower within ten (10) days after demand)
from and against such Lender's Percentage Share of any and all liabilities,
obligations, claims, losses, damages, penalties, fines, actions, judgments,
suits, settlements, costs, expenses or disbursements (including reasonable fees
of attorneys, accountants, experts and advisors) of any kind or nature
whatsoever (in this section collectively called "liabilities and costs") which
to any extent (in whole or in part) may be imposed on, incurred by, or asserted
against Agent growing out of, resulting from or in any other way associated
with any of the Collateral, the Loan Documents and the transactions and events
(including the enforcement thereof) at any time associated therewith or
contemplated therein (including any Environmental Claims or violation or
noncompliance with any Environmental Laws by any Person or any liabilities or
duties of any Person with respect to the presence or Release of Hazardous
Materials found in or released into the environment).

THE FOREGOING INDEMNIFICATION SHALL APPLY WHETHER OR NOT SUCH LIABILITIES AND
COSTS ARE IN ANY WAY OR TO ANY EXTENT OWED, IN WHOLE OR IN PART, UNDER ANY
CLAIM OR THEORY OF STRICT LIABILITY, OR ARE CAUSED, IN WHOLE OR IN PART, BY ANY
NEGLIGENT ACT OR OMISSION OF ANY KIND BY AGENT,

provided only that no Lender shall be obligated under this section to indemnify
Agent for that portion, if any, of any liabilities and costs which is
proximately caused by Agent's own individual gross negligence or willful
misconduct, as determined in a final judgment. Cumulative of the foregoing,
each Lender agrees to reimburse Agent promptly upon demand for such Lender's
Percentage Share of any costs and expenses to be paid to Agent by Borrower
under Section 10.4(a) to the extent that Agent is not timely reimbursed for
such expenses by Borrower as provided in such section. As used in this section
the term "Agent" shall refer not only to the Person designated as such in
Section 1.1 but also to each director, officer, agent, attorney, employee,
representative and Affiliate of such Person.

Section 9.5. Rights as Lender. In its capacity as a Lender, Agent
shall have the same rights and obligations as any Lender and may exercise such
rights as though it were not Agent. Agent may accept deposits from, lend money
to, act as Trustee under indentures of, and generally engage in any kind of
business with any Restricted Person or their Affiliates, all as if it were not
Agent hereunder and without any duty to account therefor to any other Lender.

Section 9.6. Sharing of Set-Offs and Other Payments. Each Lender Party
agrees that if it shall, whether through the exercise of rights under Security
Documents or rights of banker's lien, set off, or counterclaim against Borrower
or otherwise, obtain payment of a portion of the aggregate Obligations owed to
it which, taking into account all distributions made by Agent under Section
3.1, causes such Lender Party to have received more than it would have received
had such payment been received by Agent and distributed pursuant to Section
3.1, then (a) it shall be deemed to have simultaneously purchased and shall be
obligated to purchase interests in the Obligations as necessary to cause all
Lender Parties to share all payments as provided for in Section 3.1,

60
and (b) such other adjustments shall be made from time to time as shall be
equitable to ensure that Agent and all Lenders share all payments of
Obligations as provided in Section 3.1; provided, however, that nothing herein
contained shall in any way affect the right of any Lender Party to obtain
payment (whether by exercise of rights of banker's lien, set-off or
counterclaim or otherwise) of indebtedness other than the Obligations.
Borrower expressly consents to the foregoing arrangements and agrees that any
holder of any such interest or other participation in the Obligations, whether
or not acquired pursuant to the foregoing arrangements, may to the fullest
extent permitted by Law exercise any and all rights of banker's lien, set-off,
or counterclaim as fully as if such holder were a holder of the Obligations in
the amount of such interest or other participation. If all or any part of any
funds transferred pursuant to this section is thereafter recovered from the
seller under this section which received the same, the purchase provided for in
this section shall be deemed to have been rescinded to the extent of such
recovery, together with interest, if any, if interest is required pursuant to
Tribunal order to be paid on account of the possession of such funds prior to
such recovery.

Section 9.7. Investments. Whenever Agent in good faith determines that
it is uncertain about how to distribute to Lenders any funds which it has
received, or whenever Agent in good faith determines that there is any dispute
among Lenders about how such funds should be distributed, Agent may choose to
defer distribution of the funds which are the subject of such uncertainty or
dispute. If Agent in good faith believes that the uncertainty or dispute will
not be promptly resolved, or if Agent is otherwise required to invest funds
pending distribution to Lenders, Agent shall invest such funds pending
distribution; all interest on any such investment shall be distributed upon the
distribution of such investment and in the same proportion and to the same
Persons as such investment. All moneys received by Agent for distribution to
Lenders (other than to the Person who is Agent in its separate capacity as a
Lender) shall be held by Agent pending such distribution solely as Agent for
such Lenders, and Agent shall have no equitable title to any portion thereof.

Section 9.8. Benefit of Article IX. The provisions of this Article
(other than the following Section 9.9) are intended solely for the benefit of
Lender Parties, and no Restricted Person shall be entitled to rely on any such
provision or assert any such provision in a claim or defense against any Lender
Party. Lender Parties may waive or amend such provisions as they desire
without any notice to or consent of Borrower or any Restricted Person.

Section 9.9. Resignation. Agent may resign at any time by giving
written notice thereof to Lenders and Borrower. Each such notice shall set
forth the date of such resignation. Required Lenders shall have the right to
appoint a successor Agent. A successor must be appointed for any retiring
Agent, and such Agent's resignation shall become effective when such successor
accepts such appointment. If, within thirty days after the date of the
retiring Agent's resignation, no successor Agent has been appointed and has
accepted such appointment, then the retiring Agent may appoint a successor
Agent, which shall be a financial institution organized under the Laws of the
United States of America or of any state thereof.

61
Upon the acceptance of any appointment as Agent hereunder by a successor Agent,
the retiring Agent shall be discharged from its duties and obligations under
this Agreement and the other Loan Documents. After any retiring Agent's
resignation hereunder the provisions of this Article IX shall continue to inure
to its benefit as to any actions taken or omitted to be taken by it while it
was Agent under the Loan Documents.

ARTICLE X - Miscellaneous

Section 10.1. Waivers and Amendments; Acknowledgements.

(a) Waivers and Amendments. No failure or delay (whether by
course of conduct or otherwise) by any Lender Party in exercising any
right, power or remedy which such Lender Party may have under any of the
Loan Documents shall operate as a waiver thereof or of any other right,
power or remedy, nor shall any single or partial exercise by any Lender
Party of any such right, power or remedy preclude any other or further
exercise thereof or of any other right, power or remedy. No waiver of
any provision of any Loan Document and no consent to any departure
therefrom shall ever be effective unless it is in writing and signed as
provided below in this section, and then such waiver or consent shall be
effective only in the specific instances and for the purposes for which
given and to the extent specified in such writing. No notice to or
demand on any Restricted Person shall in any case of itself entitle any
Restricted Person to any other or further notice or demand in similar or
other circumstances. This Agreement and the other Loan Documents set
forth the entire understanding between the parties hereto with respect
to the transactions contemplated herein and therein and supersede all
prior discussions and understandings with respect to the subject matter
hereof and thereof, and no waiver, consent, release, modification or
amendment of or supplement to this Agreement or the other Loan Documents
shall be valid or effective against any party hereto unless the same is
in writing and signed by (i) if such party is Borrower, by Borrower,
(ii) if such party is Agent, by such party, and (iii) if such party is a
Lender, by such Lender or by Agent on behalf of Lenders with the written
consent of Required Lenders (which consent has already been given as to
the termination of the Loan Documents as provided in Section 10.9).
Notwithstanding the foregoing or anything to the contrary herein, Agent
shall not, without the prior consent of each individual Lender, execute
and deliver on behalf of such Lender any waiver or amendment which
would: (1) waive any of the conditions specified in Article IV (provided
that Agent may in its discretion withdraw any request it has made under
Section 4.2(e)), (2) increase the Commitment of such Lender or subject
such Lender to any additional obligations, (3) reduce any fees payable
to such lender hereunder, or the principal of, or interest on, such
Lender's Note, (4) postpone any date fixed for any payment of any such
fees, principal or interest, (5) amend the definition herein of
"Required Lenders" or otherwise change the aggregate amount of
Percentage Shares which is required for Agent, Lenders or any of them to
take any particular action under the Loan Documents, (6) release
Borrower from its obligation to pay such Lender's Note or (7) release
all or substantially all of the Collateral.

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(b) Acknowledgements and Admissions. Borrower hereby
represents, warrants, acknowledges and admits that (i) it has been
advised by counsel in the negotiation, execution and delivery of the
Loan Documents to which it is a party, (ii) it has made an independent
decision to enter into this Agreement and the other Loan Documents to
which it is a party, without reliance on any representation, warranty,
covenant or undertaking by Agent or any Lender, whether written, oral or
implicit, other than as expressly set out in this Agreement or in
another Loan Document delivered on or after the date hereof, (iii) there
are no representations, warranties, covenants, undertakings or
agreements by any Lender Party as to the Loan Documents except as
expressly set out in this Agreement or in another Loan Document
delivered on or after the date hereof, (iv) no Lender Party has any
fiduciary obligation toward Borrower with respect to any Loan Document
or the transactions contemplated thereby, (v) the relationship pursuant
to the Loan Documents between Borrower and the other Restricted Persons,
on one hand, and each Lender Party, on the other hand, is and shall be
solely that of debtor and creditor, respectively, (vi) no partnership or
joint venture exists with respect to the Loan Documents between any
Restricted Person and any Lender Party, (vii) Agent is not Borrower's
Agent, but Agent for Lenders, (viii) should an Event of Default or
Default occur or exist, each Lender Party will determine in its sole
discretion and for its own reasons what remedies and actions it will or
will not exercise or take at that time, (ix) without limiting any of the
foregoing, Borrower is not relying upon any representation or covenant
by any Lender Party, or any representative thereof, and no such
representation or covenant has been made, that any Lender Party will, at
the time of an Event of Default or Default, or at any other time, waive,
negotiate, discuss, or take or refrain from taking any action permitted
under the Loan Documents with respect to any such Event of Default or
Default or any other provision of the Loan Documents, and (x) all Lender
Parties have relied upon the truthfulness of the acknowledgements in
this section in deciding to execute and deliver this Agreement and to
become obligated hereunder.

(c) Representation by Lenders. Each Lender hereby represents
that it will acquire its Note for its own account in the ordinary course
of its commercial lending business; however, the disposition of such
Lender's property shall at all times be and remain within its control
and, in particular and without limitation, such Lender may sell or
otherwise transfer its Note, any participation interest or other
interest in its Note, or any of its other rights and obligations under
the Loan Documents.

(d) Joint Acknowledgment. THIS WRITTEN AGREEMENT AND THE OTHER
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 BETWEEN THE PARTIES.

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Section 10.2. Survival of Agreements; Cumulative Nature. All of
Restricted Persons' various representations, warranties, covenants and
agreements in the Loan Documents shall survive the execution and delivery of
this Agreement and the other Loan Documents and the performance hereof and
thereof, including the making or granting of the Loans and the delivery of the
Notes and the other Loan Documents, and shall further survive until all of the
Obligations are paid in full to each Lender Party and all of Lender Parties'
obligations to Borrower are terminated. All statements and agreements
contained in any certificate or other instrument delivered by any Restricted
Person to any Lender Party under any Loan Document shall be deemed
representations and warranties by Borrower or agreements and covenants of
Borrower under this Agreement. The representations, warranties, indemnities,
and covenants made by Restricted Persons in the Loan Documents, and the rights,
powers, and privileges granted to Lender Parties in the Loan Documents, are
cumulative, and, except for expressly specified waivers and consents, no Loan
Document shall be construed in the context of another to diminish, nullify, or
otherwise reduce the benefit to any Lender Party of any such representation,
warranty, indemnity, covenant, right, power or privilege. In particular and
without limitation, no exception set out in this Agreement to any
representation, warranty, indemnity, or covenant herein contained shall apply
to any similar representation, warranty, indemnity, or covenant contained in
any other Loan Document, and each such similar representation, warranty,
indemnity, or covenant shall be subject only to those exceptions which are
expressly made applicable to it by the terms of the various Loan Documents.

Section 10.3. Notices. All notices, requests, consents, demands and
other communications required or permitted under any Loan Document shall be in
writing, unless otherwise specifically provided in such Loan Document (provided
that Agent may give telephonic notices to the other Lender Parties), and shall
be deemed sufficiently given or furnished if delivered by personal delivery, by
telecopy or telex, by delivery service with proof of delivery, or by registered
or certified United States mail, postage prepaid, to Borrower and Restricted
Persons at the address of Borrower specified on the signature pages hereto and
to each Lender Party at its address specified in the Lenders Schedule as its
lending offices for ABR Loans (unless changed by similar notice in writing
given by the particular Person whose address is to be changed). Any such
notice or communication shall be deemed to have been given (a) in the case of
personal delivery or delivery service, as of the date of first attempted
delivery during normal business hours at the address provided herein, (b) in
the case of telecopy or telex, upon receipt, or (c) in the case of registered
or certified United States mail, three days after deposit in the mail;
provided, however, that no Borrowing Notice shall become effective until
actually received by Agent.

Section 10.4. Payment of Expenses; Indemnity.

(a) Payment of Expenses. Whether or not the transactions
contemplated by this Agreement are consummated, Borrower will promptly
(and in any event, within 30 days after any invoice or other statement
or notice) pay: (i) all transfer, stamp, mortgage, documentary or other
similar taxes, assessments or charges levied by any governmental or
revenue authority in respect of this Agreement or any of the other Loan
Documents or any other document referred to herein or therein, (ii) all
reasonable costs and expenses

64
incurred by or on behalf of Agent (including attorneys' fees,
consultants' fees and engineering fees, travel costs and miscellaneous
expenses) in connection with (1) the negotiation, preparation, execution
and delivery of the Loan Documents, and any and all consents, waivers or
other documents or instruments relating thereto, (2) the filing,
recording, refiling and re-recording of any Loan Documents and any other
documents or instruments or further assurances required to be filed or
recorded or refiled or re-recorded by the terms of any Loan Document,
(3) the borrowings hereunder and other action reasonably required in the
course of administration hereof, (4) monitoring or confirming (or
preparation or negotiation of any document related to) Borrower's
compliance with any covenants or conditions contained in this Agreement
or in any Loan Document, and (iii) all reasonable costs and expenses
incurred by or on behalf of any Lender Party (including attorneys' fees,
consultants' fees and accounting fees) in connection with the defense or
enforcement of any of the Loan Documents (including this section) or the
defense of any Lender Party's exercise of its rights thereunder. In
addition to the foregoing, until and all Obligations have been paid in
full, Borrower will also pay or reimburse Agent for all reasonable
out-of-pocket costs and expenses of Agent or its agents or employees in
connection with the continuing administration of the Loans and the
related due diligence of Agent, including travel and miscellaneous
expenses and fees and expenses of Agent's outside counsel, reserve
engineers and consultants engaged in connection with the Loan Documents.

(b) Indemnity. Borrower agrees to indemnify each Lender Party,
upon demand, from and against any and all liabilities, obligations,
claims, losses, damages, penalties, fines, actions, judgments, suits,
settlements, costs, expenses or disbursements (including reasonable fees
of attorneys, accountants, experts and advisors) of any kind or nature
whatsoever (in this section collectively called "liabilities and costs")
which to any extent (in whole or in part) may be imposed on, incurred
by, or asserted against such Lender Party growing out of, resulting from
or in any other way associated with any of the Collateral, the Loan
Documents and the transactions and events (including the enforcement or
defense thereof) at any time associated therewith or contemplated
therein (including any Environmental Claims or violation or
noncompliance with any Environmental Laws by any Restricted Person or
any liabilities or duties of any Restricted Person or any Lender Party
with respect to the presence or Release of Hazardous Materials found in
or released into the environment).

provided only that no Lender Party shall be entitled under this section to
receive indemnification for that portion, if any, of any liabilities and costs
which is proximately caused by its own individual gross negligence or willful
misconduct, as determined in a final judgment. If any Person (including
Borrower or any of its Affiliates) ever alleges such gross

65
negligence or willful misconduct by any Lender Party, the indemnification
provided for in this section shall nonetheless be paid upon demand, subject to
later adjustment or reimbursement, until such time as a court of competent
jurisdiction enters a final judgment as to the extent and effect of the alleged
gross negligence or willful misconduct. As used in this section the term
"Lender Parties" shall refer not only to the Persons designated as such in
Section 1.1 but also to each director, officer, agent, attorney, employee,
representative and Affiliate of such Persons.

Section 10.5. Joint and Several Liability; Parties in Interest. All
Obligations which are incurred by two or more Restricted Persons shall be their
joint and several obligations and liabilities. All grants, covenants and
agreements contained in the Loan Documents shall bind and inure to the benefit
of the parties thereto and their respective successors and assigns; provided,
however, that no Restricted Person may assign or transfer any of its rights or
delegate any of its duties or obligations under any Loan Document without the
prior consent of Required Lenders. Neither Borrower nor any Affiliates of
Borrower shall directly or indirectly purchase or otherwise retire any
Obligations owed to any Lender nor will any Lender accept any offer to do so,
unless each Lender shall have received substantially the same offer with
respect to the same Percentage Share of the Obligations owed to it. If
Borrower or any Affiliate of Borrower at any time purchases some but less than
all of the Obligations owed to all Lender Parties, such purchaser shall not be
entitled to any rights of any Lender Party under the Loan Documents unless and
until Borrower or its Affiliates have purchased all of the Obligations.

Section 10.6. Assignments.

(a) Any Lender may sell a participation interest in its
commitment hereunder or any of its rights under its Loans or under the
Loan Documents to any Person, provided that the agreement between such
Lender and such participant must at all times provide: (i) that such
participation exists only as a result of the agreement between such
participant and such Lender and that such transfer does not give such
participant any right to vote as a Lender or any other direct claims or
rights against any Person other than such Lender, (ii) that such
participant is not entitled to payment from any Restricted Person under
any of Sections 3.2, 3.3, 3.4, 3.5 or 3.6 of amounts in excess of those
payable to such Lender under such sections (determined without regard to
the sale of such participation), and (iii) unless such participant is an
Affiliate of such Lender, that such participant shall not be entitled to
require such Lender to take any action under any Loan Document or to
obtain the consent of such participant prior to taking any action under
any Loan Document, except for actions which would require the consent of
all Lenders under the next-to-last sentence of subsection (a) of Section
10.1. No Lender selling such a participation shall, as between the
other parties hereto and such Lender, be relieved of any of its
obligations hereunder as a result of the sale of such participation.
Each Lender which sells any such participation to any Person (other than
an Affiliate of such Lender) shall give prompt notice thereof to Agent
and Borrower.

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(b) Except for sales of participations under the immediately
preceding subsection (a), no Lender shall make any assignment or
transfer of any kind of its commitments or any of its rights under its
Loans or under the Loan Documents, except for assignments to an Eligible
Transferee, and then only if such assignment is made in accordance with
the following requirements:

(i) Each such assignment shall apply to all Obligations
owing to the assignor Lender hereunder and to the unused portion
of the assignor Lender's commitments, so that after such
assignment is made the assignor Lender shall have a fixed (and
not a varying) Percentage Share in its Loans and Note and be
committed to make that Percentage Share of all future Loans, the
assignee shall have a fixed Percentage Share in such Loans and
Note and be committed to make that Percentage Share of all future
Loans, and the Percentage Share of the Commitment of both the
assignor and assignee shall equal or exceed $5,000,000.

(ii) The parties to each such assignment shall execute
and deliver to Agent, for its acceptance and recording in the
"Register" (as defined below in this section), an Assignment and
Acceptance in the form of Exhibit E, appropriately completed,
together with the Note subject to such assignment and a
processing fee payable to Agent of $2,500. Upon such execution,
delivery, and payment and upon the satisfaction of the conditions
set out in such Assignment and Acceptance, then (i) Borrower
shall issue new Notes to such assignor and assignee upon return
of the old Notes to Borrower, and (ii) as of the "Settlement
Date" specified in such Assignment and Acceptance the assignee
thereunder shall be a party hereto and a Lender hereunder and
Agent shall thereupon deliver to Borrower and each Lender a
schedule showing the revised Percentage Shares of such assignor
Lender and such assignee Lender and the Percentage Shares of all
other Lenders.

(iii) Each assignee Lender which is not a United States
person (as such term is defined in Section 7701(a)(30) of the
Internal Revenue Code of 1986, as amended) for Federal income tax
purposes, shall (to the extent it has not already done so)
provide Agent and Borrower with the "Prescribed Forms" referred
to in Section 3.6(d).

(c) Nothing contained in this section shall prevent or prohibit
any Lender from assigning or pledging all or any portion of its Loans
and Note to any Federal Reserve Bank as collateral security pursuant to
Regulation A of the Board of Governors of the Federal Reserve System and
any Operating Circular issued by such Federal Reserve Bank or to one of
its Affiliates; provided that no such assignment or pledge shall relieve
such Lender from its obligations hereunder.

(d) By executing and delivering an Assignment and Acceptance,
each assignee Lender thereunder will be confirming to and agreeing with
Borrower, Agents and each other Lender hereunder that such assignee
understands and agrees to the terms hereof, including Article IX hereof.

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(e) Agent shall maintain a copy of each Assignment and
Acceptance and a register for the recordation of the names and addresses
of Lenders and the Percentage Shares of, and principal amount of the
Loans owing to, each Lender from time to time (in this section called
the "Register"). The entries in the Register shall be conclusive, in
the absence of manifest error, and Borrower and each Lender Party may
treat each Person whose name is recorded in the Register as a Lender
hereunder for all purposes. The Register shall be available for
inspection by Borrower or any Lender Party at any reasonable time and
from time to time upon reasonable prior notice.

Section 10.7. Confidentiality. Each Lender Party agrees that it will
take all reasonable steps to keep confidential any proprietary information
given to it by any Restricted Person, provided, however, that this restriction
shall not apply to information which (i) has at the time in question entered
the public domain, (ii) is required to be disclosed by Law (whether valid or
invalid) of any Tribunal, (iii) is disclosed to any Lender Party's Affiliates,
auditors, attorneys, or agents, (iv) is furnished to any other Lender Party or
to any purchaser or prospective purchaser of participations or other interests
in any Loan or Loan Document (provided each such purchaser or prospective
purchaser first agrees to hold such information in confidence on the terms
provided in this section), or (v) is disclosed in the course of enforcing its
rights and remedies during the existence of an Event of Default.

Section 10.8. Governing Law; Submission to Process.

(a) EXCEPT TO THE EXTENT THAT THE LAW OF ANOTHER JURISDICTION IS
EXPRESSLY ELECTED IN A LOAN DOCUMENT, THE LOAN DOCUMENTS SHALL BE DEEMED
CONTRACTS AND INSTRUMENTS MADE UNDER THE LAWS OF THE STATE OF NEW YORK AND
SHALL BE CONSTRUED AND ENFORCED IN ACCORDANCE WITH AND GOVERNED BY THE LAWS OF
THE STATE OF NEW YORK AND THE LAWS OF THE UNITED STATES OF AMERICA, WITHOUT
REGARD TO PRINCIPLES OF CONFLICTS OF LAW. BORROWER HEREBY AGREES THAT ANY
LEGAL ACTION OR PROCEEDING AGAINST BORROWER WITH RESPECT TO THIS AGREEMENT, THE
NOTES OR ANY OF THE LOAN DOCUMENTS MAY BE BROUGHT IN THE COURTS OF THE STATE OF
NEW YORK OR OF THE UNITED STATES OF AMERICA FOR THE SOUTHERN DISTRICT OF NEW
YORK AS LENDER PARTIES MAY ELECT, AND, BY EXECUTION AND DELIVERY HEREOF,
BORROWER ACCEPTS AND CONSENTS FOR ITSELF AND IN RESPECT TO ITS PROPERTY,
GENERALLY AND UNCONDITIONALLY, THE JURISDICTION OF THE AFORESAID COURTS, AND
FURTHER AGREES TO A TRANSFER OF ANY SUCH PROCEEDING TO A FEDERAL COURT SITTING
IN THE STATE OF NEW YORK TO THE EXTENT THAT IT HAS SUBJECT MATTER JURISDICTION,
AND OTHERWISE TO A STATE COURT IN NEW YORK, NEW YORK, AND AGREES THAT SUCH
JURISDICTION SHALL BE EXCLUSIVE, UNLESS WAIVED BY LENDER PARTIES IN WRITING,
WITH RESPECT TO ANY ACTION OR PROCEEDING BROUGHT BY IT AGAINST LENDER PARTIES
AND ANY QUESTIONS RELATING TO USURY. BORROWER AGREES THAT SECTIONS 5-1401 AND
5-1402 OF THE GENERAL OBLIGATIONS LAW OF THE STATE OF NEW YORK SHALL

68
APPLY TO THE LOAN DOCUMENTS AND WAIVE ANY RIGHT TO STAY OR TO DISMISS ANY
ACTION OR PROCEEDING BROUGHT BEFORE SAID COURTS ON THE BASIS OF FORUM NON
CONVENIENS. IN FURTHERANCE OF THE FOREGOING, BORROWER HEREBY DESIGNATES AND
APPOINTS CT CORPORATION SYSTEM, 0000 XXXXXXXX, XXX XXXX, XXX XXXX 00000, AS
AGENT OF BORROWER TO RECEIVE SERVICE OF ALL PROCESS BROUGHT AGAINST BORROWER
WITH RESPECT TO ANY SUCH PROCEEDING IN ANY SUCH COURT IN NEW YORK, SUCH SERVICE
BEING HEREBY ACKNOWLEDGED BY BORROWER TO BE EFFECTIVE AND BINDING SERVICE IN
EVERY RESPECT. COPIES OF ANY SUCH PROCESS SO SERVED SHALL ALSO, IF PERMITTED
BY LAW, BE SENT BY REGISTERED MAIL TO BORROWER AT ITS ADDRESS SET FORTH BELOW,
BUT THE FAILURE OF BORROWER TO RECEIVE SUCH COPIES SHALL NOT AFFECT IN ANY WAY
THE SERVICE OF SUCH PROCESS AS AFORESAID. BORROWER SHALL FURNISH TO LENDER
PARTIES A CONSENT OF CT CORPORATION SYSTEM AGREEING TO ACT HEREUNDER PRIOR TO
THE EFFECTIVE DATE OF THIS AGREEMENT. NOTHING HEREIN SHALL AFFECT THE RIGHT OF
LENDER PARTIES TO SERVE PROCESS IN ANY OTHER MANNER PERMITTED BY LAW OR SHALL
LIMIT THE RIGHT OF LENDER PARTIES TO BRING PROCEEDINGS AGAINST BORROWER IN THE
COURTS OF ANY OTHER JURISDICTION. BORROWER SHALL NOT REVOKE SUCH APPOINTMENT
BUT IF FOR ANY REASON CT CORPORATION SYSTEM SHALL RESIGN OR OTHERWISE CEASE TO
ACT AS BORROWER'S AGENT, BORROWER HEREBY IRREVOCABLY AGREES TO (A) IMMEDIATELY
DESIGNATE AND APPOINT A NEW AGENT ACCEPTABLE TO AGENT TO SERVE IN SUCH CAPACITY
AND, IN SUCH EVENT, SUCH NEW AGENT SHALL BE DEEMED TO BE SUBSTITUTED FOR CT
CORPORATION SYSTEM FOR ALL PURPOSES HEREOF AND (B) PROMPTLY DELIVER TO LENDER
PARTIES THE WRITTEN CONSENT (IN FORM AND SUBSTANCE SATISFACTORY TO AGENT) OF
SUCH NEW AGENT AGREEING TO SERVE IN SUCH CAPACITY.

(b) BORROWER FURTHER AGREES THAT ANY LEGAL ACTION OR PROCEEDING
AGAINST BORROWER WITH RESPECT TO ANY SECURITY DOCUMENT MAY BE BROUGHT IN THE
COURTS OF THE STATES OF WEST VIRGINIA, PENNSYLVANIA, OHIO, ILLINOIS OR
VIRGINIA, OR THE COURTS OF THE UNITED STATES OF AMERICA LOCATED IN ANY SUCH
STATE AND, BY EXECUTION AND DELIVERY HEREOF, BORROWER ACCEPTS AND CONSENTS FOR
ITSELF AND IN RESPECT TO ITS PROPERTY, GENERALLY AND UNCONDITIONALLY, THE
JURISDICTION OF THE AFORESAID COURTS. BORROWER HEREBY IRREVOCABLY SUBMITS
ITSELF AND EACH OTHER RELATED PERSON TO THE NON-EXCLUSIVE JURISDICTION OF THE
STATE AND FEDERAL COURTS SITTING IN THE STATES OF WEST VIRGINIA, PENNSYLVANIA,
OHIO, ILLINOIS AND VIRGINIA AND AGREES AND CONSENTS THAT SERVICE OF PROCESS MAY
BE MADE UPON IT IN ANY LEGAL PROCEEDING RELATING TO THE SECURITY DOCUMENTS OR
THE OBLIGATIONS BY ANY MEANS ALLOWED UNDER THE LAW OF SUCH STATES OR FEDERAL
LAW.

69
(c) The parties, having actively considered the issue of what law
should apply to the construction and enforcement of this Agreement and the
Notes, have determined that New York law should apply. New York commercial law
is well-known and highly elaborated, and the parties believe that its
application will reduce uncertainty about the construction and enforcement of
this Agreement and the Notes.

Section 10.9. Limitation on Interest.

Lender Parties, Restricted Persons and the other parties to the Loan
Documents intend to contract in strict compliance with applicable usury Law
from time to time in effect. In furtherance thereof such persons stipulate and
agree that none of the terms and provisions contained in the Loan Documents
shall ever be construed to provide for interest in excess of the maximum amount
of interest permitted to be charged by applicable Law from time to time in
effect. Neither any Restricted Person nor any present or future guarantors,
endorsers, or other Persons hereafter becoming liable for payment of any
Obligation shall ever be liable for unearned interest thereon or shall ever be
required to pay interest thereon in excess of the maximum amount that may be
lawfully charged under applicable Law from time to time in effect, and the
provisions of this section shall control over all other provisions of the Loan
Documents which may be in conflict or apparent conflict herewith.

Section 10.10. Termination: Limited Survival. In its sole and absolute
discretion Borrower may at any time that no Obligations are owing elect in a
written notice delivered to Agent to terminate this Agreement. Upon receipt by
Agent of such a notice, if no Obligations are then owing this Agreement and all
other Loan Documents shall thereupon be terminated and the parties thereto
released from all prospective obligations thereunder. Notwithstanding the
foregoing or anything herein to the contrary, any waivers or admissions made by
any Restricted Person in any Loan Document, any Obligations under any of
Sections 3.2, 3.3, 3.4, 3.5 or 3.6, and any obligations which any Person may
have to indemnify or compensate any Lender Party shall survive any termination
of this Agreement or any other Loan Document. At the request and expense of
Borrower, Agent shall prepare and execute all necessary instruments to reflect
and effect such termination of the Loan Documents. Agent is hereby authorized
to execute all such instruments on behalf of all Lenders, without the joinder
of or further action by any Lender.

Section 10.11. Severability. If any term or provision of any Loan
Document shall be determined to be illegal or unenforceable all other terms and
provisions of the Loan Documents shall nevertheless remain effective and shall
be enforced to the fullest extent permitted by applicable Law.

Section 10.12. Counterparts. This Agreement may be separately executed
in any number of counterparts and by different parties hereto in separate
counterparts, each of which when so executed shall be deemed to constitute one
and the same Agreement.

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Section 10.13. Waiver of Jury Trial, Punitive Damages, etc.

BORROWER AND EACH LENDER PARTY HEREBY KNOWINGLY, VOLUNTARILY,
INTENTIONALLY, AND IRREVOCABLY (A) WAIVES, TO THE MAXIMUM EXTENT NOT PROHIBITED
BY LAW, ANY RIGHT IT MAY HAVE TO A TRIAL BY JURY IN RESPECT OF ANY LITIGATION
BASED HEREON, OR DIRECTLY OR INDIRECTLY AT ANY TIME ARISING OUT OF, UNDER OR IN
CONNECTION WITH THE LOAN DOCUMENTS OR ANY TRANSACTION CONTEMPLATED THEREBY OR
ASSOCIATED THEREWITH, BEFORE OR AFTER MATURITY; (B) WAIVES, TO THE MAXIMUM
EXTENT NOT PROHIBITED BY LAW, ANY RIGHT IT MAY HAVE TO CLAIM OR RECOVER IN ANY
SUCH LITIGATION ANY "SPECIAL DAMAGES", AS DEFINED BELOW, (C) CERTIFIES THAT NO
PARTY HERETO NOR ANY REPRESENTATIVE OR AGENT OR COUNSEL FOR ANY PARTY HERETO
HAS REPRESENTED, EXPRESSLY OR OTHERWISE, OR IMPLIED THAT SUCH PARTY WOULD NOT,
IN THE EVENT OF LITIGATION, SEEK TO ENFORCE THE FOREGOING WAIVERS, AND (D)
ACKNOWLEDGES THAT IT HAS BEEN INDUCED TO ENTER INTO THIS AGREEMENT, THE OTHER
LOAN DOCUMENTS AND THE TRANSACTIONS CONTEMPLATED HEREBY AND THEREBY BY, AMONG
OTHER THINGS, THE MUTUAL WAIVERS AND CERTIFICATIONS CONTAINED IN THIS SECTION.
AS USED IN THIS SECTION, "SPECIAL DAMAGES" INCLUDES ALL SPECIAL, CONSEQUENTIAL,
EXEMPLARY, OR PUNITIVE DAMAGES (REGARDLESS OF HOW NAMED), BUT DOES NOT INCLUDE
ANY PAYMENTS OR FUNDS WHICH ANY PARTY HERETO HAS EXPRESSLY PROMISED TO PAY OR
DELIVER TO ANY OTHER PARTY HERETO.

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IN WITNESS WHEREOF, this Agreement is executed as of the date first
written above.

BORROWER:

ENERGY CORPORATION OF AMERICA

By: /s/ Xxxxxx Xxxxxxxx
--------------------------------------
Xxxxxx Xxxxxxxx
Executive Vice President

Address: 0000 Xxxxx Xxxxxx Xxxxxx
Xxxxx 0000
Xxxxxx, Xxxxxxxx 00000
Telephone: (000) 000-0000
Fax: (000) 000-0000

AGENT:

GENERAL ELECTRIC CAPITAL
CORPORATION, as Agent and Lender

By: /s/ Xxxx Xxxxxxx
-------------------------------------
Xxxx Xxxxxxx
Manager - Operations

Address: Structured Finance Group
0000 Xxxxxx Xxxxxx,
0xx Xxxxx
Xxxxxxxx, XX 00000
Attention: Compliance
Officer
Telephone: (000) 000-0000
Fax: (000) 000-0000

00
XXX XXXX XX XXXX XXXXXX, as
Documentation Agent and Lender

By: /s/ S.C.H. XXXX
-------------------------------------
Name: S.C.H. XXXXX
Title:

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Table of Contents

1 EXHIBIT 4.1 CREDIT AGREEMENT ENERGY CORPORATION OF AMERICA

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