**Exhibit10.10**

 

**EXECUTIONCOPY**

 

 

 

 

OMNIBUS AGREEMENT

 

among

 

CONTINENTAL RESOURCES, INC.

 

HILAND PARTNERS, LLC

 

HAROLD HAMM

 

HILAND PARTNERS GP, LLC

 

CONTINENTAL GAS HOLDINGS, INC.

 

and

 

HILAND PARTNERS, LP

 

 

 

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**OMNIBUSAGREEMENT**

 

THIS OMNIBUS AGREEMENT (“*Agreement*”) is entered into on, andeffective as of, the Closing Date (as defined herein), and is by and amongContinental Resources, Inc., an Oklahoma corporation (“*Continental Resources*”), Hiland Partners,LLC, an Oklahoma limited liability company (“*Hiland*”),Harold Hamm, an individual residing in Enid, Oklahoma (“*Mr. Hamm*”), Hiland Partners GP, LLC,a Delaware limited liability company (the “*GeneralPartner*”), Continental Gas Holdings, Inc., a Delaware corporation (“*Continental Holdings*”) and Hiland Partners,LP, a Delaware limited partnership (the “*Partnership*”).  The above-named entities are sometimesreferred to in this Agreement each as a “*Party*”and collectively as the “*Parties*.”

 

**R E C I T A LS:**

 

1.                                       TheParties desire by their execution of this Agreement to evidence theiragreement, as more fully set forth in Article II, with respect to thosebusiness opportunities that the Hamm Entities (as defined herein) will notengage in during the term of this Agreement.

 

2.                                       TheParties desire by their execution of this Agreement to evidence theiragreement, as more fully set forth in Article III, with respect to certainindemnification obligations of the Parties to each other.

 

3.                                       TheParties desire by their execution of this Agreement to evidence their agreement,as more fully set forth in Article IV, with respect to the amount to bepaid by the Partnership for certain general and administrative services to beperformed by Continental Resources for and on behalf of the Partnership Group(as defined herein).

 

4.                                       The Partiesdesire by their execution of this Agreement to evidence their agreement, asmore fully set forth in Article V, with respect to the Partnership Group’soption to purchase the Bakken Gathering System (as defined herein).

 

In consideration of the premises and thecovenants, conditions and agreements contained herein, and for other good andvaluable consideration, the receipt and sufficiency of which are herebyacknowledged, the Parties hereto hereby agree as follows:

 

**ARTICLE IDefinitions**

 

***1.1***                               Definitions.

 

As used in this Agreement, the following terms shall have therespective meanings set forth below:

 

***“Affiliate”*****is defined in thePartnership Agreement.**

 

*“Assets”*means allassets conveyed, contributed, or otherwise transferred to the Partnership Grouppursuant to the Contribution Agreement prior to or on the Closing

 

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Date and any assets acquired by thePartnership Group pursuant to the exercise of the purchase option granted underArticle V.

 

*“Bakken Gathering System”*meansthe natural gas gathering system owned by Hiland, located in Richmond County,Montana and described further on Schedule I.

 

*“Closing Date”* means the date of the closingof the Partnership’s initial public offering of Common Units.

 

***“Common Units”******is defined in the Partnership Agreement.***

 

***“Conflicts Committee”*****is defined in thePartnership Agreement.**

 

“*Construction Cost*” meansall costs associated with developing, designing, building and financing SubjectAssets, including, without limitation, any costs to acquire related realproperty or necessary rights of way and any internal costs incurred tocompensate employees for time spent on developing, designing, building andfinancing Subject Assets.

 

***“Continental Gas”*****means Continental Gas,Inc., an Oklahoma corporation.**

 

*“Contribution Agreement”*means that certain Contribution, Conveyance and Assumption Agreement, dated asof the Closing Date, among Continental Gas, Hiland, the Hamm Parties, theHarold Hamm HJ Trust, the Harold Hamm DST Trust, the General Partner, thePartnership and certain other parties, together with the additional conveyancedocuments and instruments contemplated or referenced thereunder.

 

* “control”*means the possession, direct or indirect, of the power to direct or cause thedirection of the management and policies of a Person, whether through ownershipof Voting Securities, by contract, or otherwise.

 

*“General Partner”* is defined in theintroduction to this Agreement.

 

“*Hamm Control Person* means (i) any of the Harold Hamm HJ Trust,the Harold Hamm DST Trust, Harold Hamm, any of his children, his spouse or anyof his children’s spouses (but excluding former spouses and spouses of any ofhis deceased children) and (ii) any Person controlled, directly or indirectly,by any Person specified in the preceding clause (i), other than a PartnershipEntity.

 

*“Hamm Entities”* means each Hamm Party and anyPerson controlled, directly or indirectly, by any Hamm Party or combination ofHamm Parties other than the Partnership Entities; and *“Hamm Entity”*means any of the Hamm Entities.

 

*“Hamm Parties”* meansHarold Hamm and each of Continental Resources and Hiland for so long as suchentity is controlled, directly or indirectly, by a Hamm Control Person or anycombination of Hamm Control Persons.

 

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*“Indemnified Party”*means each Partnership Group Member in its capacity as a party entitled toindemnification in accordance with Article III.

 

*“Indemnifying Party”*means each of Continental Resources, Hiland and Continental Holdings, as thecase may be, in their capacity as the parties from whom indemnification may berequired in accordance with Article III.

 

* “LimitedPartner”* is defined in the Partnership Agreement.

 

*“Offer”*is definedin Section 2.3(b).

 

*“Partnership Agreement”* means the FirstAmended and Restated Agreement of Limited Partnership of Hiland Partners, LP,dated as of the Closing Date, as such agreement is in effect on the ClosingDate, to which reference is hereby made for all purposes of this Agreement.  No amendment or modification to thePartnership Agreement subsequent to the Closing Date shall be given effect forthe purposes of this Agreement unless consented to by each of the Parties tothis Agreement.

 

*“Partnership Entities”* means the General Partner and each member of the Partnership Group.

 

*“Partnership Entity”* means any of the Partnership Entities.

 

*“Partnership Group”*  means the Partnership and its subsidiaries.

 

*“Partnership Group Member”**means any member of thePartnership Group.*

 

*“Party”*and *“Parties”* are defined in the introduction to this Agreement.

 

*“Person”* means an individual or a corporation,limited liability company, partnership, joint venture, trust, business trust,employee benefit plan, unincorporated organization, association, government agencyor political subdivision thereof or other entity.

 

*“Restricted Businesses”*isdefined in Section 2.1.

 

*“Subject Assets”* isdefined in Section 2.2(f).

 

*“Subsidiary*” means,with respect to any Person, (a) a corporation of which more than 50% of thevoting power of shares entitled (without regard to the occurrence of anycontingency) to vote in the election of directors or other governing body ofsuch corporation is owned, directly or indirectly, at the date ofdetermination, by such Person, by one or more Subsidiaries of such Person or acombination thereof, (b) a partnership (whether general or limited) in whichsuch Person or a Subsidiary of such Person is, at the date of determination, ageneral or limited partner of such partnership, but only if more than 50% ofthe partnership interests of such partnership (considering all of thepartnership interests of the partnership as a single class) is owned, directlyor indirectly, at the date of determination, by such Person, by one or moreSubsidiaries of such Person,

 

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or a combination thereof, or (c) any otherPerson (other than a corporation or a partnership) in which such Person, one ormore Subsidiaries of such Person, or a combination thereof, directly or indirectly,at the date of determination, has (i) at least a majority ownership interest or(ii) the power to elect or direct the election of a majority of the directorsor other governing body of such Person.

 

* “Transfer”*including the correlative terms *“Transferring”*or *“Transferred”* means any director indirect transfer, assignment, sale, gift, pledge, hypothecation or otherencumbrance, or any other disposition (whether voluntary, involuntary or byoperation of law) of the Assets.

 

*“Units”* is definedin the Partnership Agreement.

 

*“Voting Securities”* means securities of anyclass of a Person entitling the holders thereof to vote on a regular basis inthe election of members of the board of directors or other governing body ofsuch Person.

 

**ARTICLE IIBusiness Opportunities**

 

**2.1****                               *Restricted Businesses***. Subject to Section 2.6, and except as permitted by Section 2.2,each Hamm Party shall be prohibited from engaging in, and the Hamm Parties shall cause each Hamm Entity not to engage in,whether by acquisition, construction,investment in debt or equity interests of any Person or otherwise, anyof the following businesses (the “*RestrictedBusinesses*”):  the gathering,treating, processing and transportation of natural gas in North America, thetransportation and fractionation of natural gas liquids (“*NGLs*”) in North America, and constructing,buying or selling any assets related to the foregoing businesses.

 

**2.2****                               *Permitted Exceptions***. Notwithstanding any provision of Section 2.1 to the contrary, theHamm Entities may engage in the following activities under the followingcircumstances:

 

(a)                                  theownership and/or operation of the Bakken Gathering System (includingreplacements of and modifications or additions to the Bakken Gathering System);

 

(b)                                 anybusiness that is primarily related to the exploration for and production of oilor natural gas and the sale and marketing of oil and natural gas derived fromsuch exploration and production activities;

 

(c)                                  anyRestricted Business that was engaged in by a Hamm Entity on the date of thisAgreement; provided, however, that any future acquisitions or opportunitiesrelated to such Restricted Business shall be subject to the procedures setforth in Section 2.3;

 

(d)                                 thepurchase and ownership of not more than five percent of any class of securitiesof any entity engaged in the Restricted Business (but without otherwiseparticipating in the activities of such entity);

 

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(e)                                  anyRestricted Business conducted by a Hamm Entity with the approval of theConflicts Committee;

 

(f)                                    theownership and/or operation of any asset or group of related assets used in theactivities described in Section 2.1 that are acquired or constructed by aHamm Entity after the Closing Date (the “*SubjectAssets*”) if, in the case of an acquisition, the fair market value ofthe Subject Assets (as determined in good faith by the board of directors orother comparable governing body of such Hamm Entity), or, in the case ofconstruction, the estimated Construction Cost of the Subject Assets (asdetermined in good faith by the board of directors or other comparablegoverning body of such Hamm Entity), is less than $5 million at the time ofsuch acquisition or completion of construction, as the case may be;

 

(g)                                 theownership and/or operation of any Subject Assets acquired by a Hamm Entityafter the Closing Date with a fair market value (as determined in good faith bythe board of directors or other comparable governing body of such Hamm Entity)equal to or greater than $5 million at the time of the acquisition; provided,the Partnership has been offered the opportunity to purchase the Subject Assetsin accordance with Section 2.3 and the Partnership (with the concurrenceof the Conflicts Committee) has elected not to purchase the Subject Assets;****and

 

(h)                                 theownership and/or operation of any Subject Assets constructed by a Hamm Entityafter the Closing Date with a Construction Cost (as determined in good faith bythe board of directors or other comparable governing body of such Hamm Entity)equal to or greater than $5 million at the time of completion of constructionthat the Partnership has been offered the opportunity to purchase in accordancewith Section 2.3 and the Partnership (with the concurrence of the ConflictsCommittee) has elected not to purchase.

 

***2.3***                               Procedures.

 

(a)                                  Ifa Hamm Entity becomes aware of an opportunity to acquire Subject Assets with afair market value (as determined in good faith by the board of directors orother comparable governing body of such Hamm Entity) equal to or greater than$5 million that it is interested in pursuing, then, subject to Section 2.3(b),as soon as practicable thereafter, such Hamm Entity shall notify the GeneralPartner, in writing, of such opportunity and deliver to the General Partner allinformation prepared by or on behalf of such Hamm Entity relating to suchopportunity.  As soon as practicable, butin any event within 30 days after receipt of such written notification and information,the General Partner, on behalf of the Partnership, shall notify the HammEntity, in writing,  that either (i) theGeneral Partner, on behalf of the Partnership, has elected (with theconcurrence of the Conflicts Committee) not to cause a Partnership Group Memberto pursue the opportunity to purchase the Subject Assets, or (ii) the GeneralPartner, on behalf of the Partnership, has elected (with the concurrence of theConflicts Committee) to cause a Partnership Group Member to pursue theopportunity to purchase the Subject Assets. If, at any time, the General Partner abandons such opportunity with theapproval of the Conflicts Committee (as evidenced in writing by the GeneralPartner following the

 

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request of the Hamm Entity), the Hamm Entity may pursue suchopportunity.  Any Subject Assets that arepermitted to be acquired by a Hamm Entity must be so acquired (i) within 12months of the later to occur of (A) the date that the Hamm Entity becomes ableto pursue such acquisition in accordance with the provisions of this Section 2.3(a),and (B) the date upon which all required governmental approvals to consummatesuch acquisition have been obtained, and (ii) on terms not more favorable inany material respect to the Hamm Entity than were offered to thePartnership.  If either of theseconditions are not satisfied, the opportunity must be reoffered to thePartnership in accordance with this Section 2.3(a).

 

(b)                                 NotwithstandingSection 2.3(a), in the event that a Hamm Entity becomes aware of anopportunity to make an acquisition that includes both Subject Assets and assetsthat are not Subject Assets and the Subject Assets have a fair market value (asdetermined in good faith by the board of directors or other comparablegoverning body of such Hamm Entity) equal to or greater than $5 million butcomprise less than half of the fair market value (as determined in good faithby the board of directors or other comparable governing body of such HammEntity) of the total assets being considered for acquisition, then the HammEntity may make such acquisition without first offering the opportunity to thePartnership as long as it complies with the following procedures:

 

(i)                                     Within90 days after the consummation of such an acquisition, the Hamm Entity shallnotify the General Partner in writing of such acquisition and offer thePartnership Group the opportunity to purchase such Subject Assets in accordancewith this Section 2.3(b) (the “*Offer*”).  The Offer shall set forth the terms relatingto the purchase of the Subject Assets and, if any Hamm Entity desires toutilize the Subject Assets, the Offer will also include the commerciallyreasonable terms on which the Partnership Group will provide services to theHamm Entity to enable the Hamm Entity to utilize the Subject Assets.  As soon as practicable, but in any eventwithin 30 days after receipt of such written notification, the General Partnershall notify the Hamm Entity in writing that either (x) the General Partner, onbehalf of the Partnership, has elected (with the concurrence of the ConflictsCommittee) not to cause a Partnership Group Member to purchase the SubjectAssets, in which event the Hamm Entity shall be forever free to continue to ownor operate such Subject Assets, or (y) the General Partner, on behalf of thePartnership, has elected (with the concurrence of the Conflicts Committee) tocause a Partnership Group Member to purchase the Subject Assets, in which eventthe following procedures shall apply.

 

(ii)                                  Ifthe Hamm Entity and the General Partner (with the concurrence of the ConflictsCommittee) within 60 days after receipt by the General Partner of the Offer areable to agree on the fair market value of the Subject Assets that are subjectto the Offer and the other terms of the Offer including, without limitation,the terms, if any, on which the Partnership Group will provide services to theHamm Entity to enable it to utilize the Subject Assets, a Partnership GroupMember shall purchase the Subject Assets for the agreed

 

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upon fair market value as soon as commercially practicable after suchagreement has been reached and, if applicable, enter into an agreement with theHamm Entity to provide services in a manner consistent with the Offer.

 

(iii)                               Ifthe Hamm Entity and the General Partner (with the concurrence of the ConflictsCommittee) are unable to agree within 60 days after receipt by the GeneralPartner of the Offer on the fair market value of the Subject Assets that aresubject to the Offer or the other terms of the Offer including, if applicable,the terms on which the Partnership Group will provide services to the HammEntity to enable it to utilize the Subject Assets, the Hamm Entity and theGeneral Partner will engage a mutually agreed upon investment banking firm todetermine the fair market value of the Subject Assets and/or the other terms onwhich the General Partner and the Hamm Entity are unable to agree.  Such investment banking firm will determinethe fair market value of the Subject Assets and/or the other terms on which theGeneral Partner and the Hamm Entity are unable to agree within 30 days of itsengagement and furnish the Hamm Entity and the General Partner itsdetermination.  The fees of theinvestment banking firm will be split equally between the Hamm Entity and thePartnership Group.  Once the investmentbanking firm has submitted its determination of the fair market value of theSubject Assets and/or the other terms on which the Partnership Group and theHamm Entity are unable to agree, the General Partner will have the right, butnot the obligation, subject to the approval of the Conflicts Committee, tocause a Partnership Group Member to purchase the Subject Assets pursuant to theOffer as modified by the determination of the investment banking firm.  The Partnership Group Member will providewritten notice of its decision to the Hamm Entity within 30 days after theinvestment banking firm has submitted its determination.  Failure to provide such notice within such30-day period shall be deemed to constitute a decision not to purchase theSubject Assets.  If the General Partnerelects to cause a Partnership Group Member to purchase the Subject Assets, thenthe Partnership Group Member shall purchase the Subject Assets pursuant to theOffer as modified by the determination of the investment banking firm as soonas commercially practicable after such determination and, if applicable, enterinto an agreement with the Hamm Entity to provide services in a manner consistentwith the Offer, as modified by the determination of the investment bankingfirm, if applicable.

 

(c)                                  Inthe event that a Hamm Entity desires to construct Subject Assets with anestimated Construction Cost (as determined in good faith by the board of directorsor other comparable governing body of such Hamm Entity) equal to or greaterthan $5 million, then the Hamm Entity may construct such Subject Assets as longas it complies with the following procedures:

 

(i)                                     Within90 days after the completion of construction by a Hamm Entity of the SubjectAssets, the Hamm Entity shall notify the General Partner in writing of suchconstruction and offer the Partnership Group the opportunity to purchase suchSubject Assets in accordance with this Section 2.3(c) (the “*Construction Offer*”).  The Construction Offer shall set forth the

 

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Hamm Entities’ good faith estimate of the actual Construction Cost forthe Subject Assets incurred by the Hamm Entities (the “*Actual Construction Cost*”), which shallconstitute the proposed purchase price for the Subject Assets, together withthe other proposed terms relating to the purchase of the Subject Assets, and,if any Hamm Entity desires to utilize the Subject Assets, the ConstructionOffer will also include the commercially reasonable terms on which thePartnership Group will provide services to the Hamm Entity to enable the HammEntity to utilize the Subject Assets.  Assoon as practicable, but in any event within 30 days after receipt of suchwritten notification, the General Partner shall notify the Hamm Entity inwriting that either (x) the General Partner, on behalf of the Partnership, haselected (with the concurrence of the Conflicts Committee) not to cause aPartnership Group Member to purchase the Subject Assets, in which event theHamm Entity shall be forever free to continue to own or operate such SubjectAssets, or (y) the General Partner, on behalf of the Partnership, has elected(with the concurrence of the Conflicts Committee) to cause a Partnership GroupMember to purchase the Subject Assets, in which event the following proceduresshall apply.

 

(ii)                                  Ifthe Hamm Entity and the General Partner (with the concurrence of the ConflictsCommittee) within 60 days after receipt by the General Partner of theConstruction Offer are able to agree on the Actual Construction Cost of theSubject Assets that are subject to the Construction Offer and the other terms (“*Other Terms*”) of the Construction Offerincluding, without limitation, the terms, if any, on which the PartnershipGroup will provide services to the Hamm Entity to enable it to utilize theSubject Assets, a Partnership Group Member shall purchase the Subject Assetsfor the agreed upon Actual Construction Cost as soon as commerciallypracticable after such agreement has been reached and, if applicable, enterinto an agreement with the Hamm Entity to provide services in a mannerconsistent with the Construction Offer.

 

(iii)                               Ifthe Hamm Entity and the General Partner (with the concurrence of the ConflictsCommittee) are unable to agree within 60 days after receipt by the GeneralPartner of the Construction Offer on the Actual Construction Cost of theSubject Assets that are subject to the Construction Offer, the Hamm Entity and theGeneral Partner will engage a mutually agreed upon nationally recognizedaccounting firm, other than any such accounting firm that has served as eitherPerson’s independent auditors within the past three years, to determine theActual Construction Cost of the Subject Assets. Such accounting firm will determine the Actual Construction Cost of theSubject Assets within 30 days of its engagement and furnish the Hamm Entity andthe General Partner its determination, which determination shall be a final andbinding determination of the Actual Construction Cost.  The fees of the accounting firm will be splitequally between the Hamm Entity and the Partnership Group.

 

(iv)                              Ifthe Hamm Entity and the General Partner are unable to agree within 60 daysafter receipt by the General Partner of the Construction Offer on all of theOther Terms, the Hamm Entity and the General Partner will

 

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obtain a good faith proposal from a mutually agreed upon third partyengaged in the business to which such Other Terms relate in order to determinethe Other Terms on which the General Partner and the Hamm Entity are unable toagree.  Such third party will submit agood faith proposal regarding the Other Terms on which the General Partner andthe Hamm Entity are unable to agree within 30 days of its engagement andfurnish the Hamm Entity and the General Partner its proposal, whichdetermination shall be a final and binding determination of the Other Terms.  The fees of the third party will be splitequally between the Hamm Entity and the Partnership Group.

 

(v)                                 Oncethe Actual Construction Cost and the Other Terms have been finally determinedpursuant to clauses (ii), (iii) or (iv) above, the General Partner will havethe right, but not the obligation, subject to the approval of the ConflictsCommittee, to cause a Partnership Group Member to purchase the Subject Assetspursuant to the Construction Offer as modified by the determination of theaccounting firm and/or the third party submitting a proposal, asapplicable.  The Partnership Group Memberwill provide written notice of its decision to the Hamm Entity within 30 daysafter the later of the date on which the accounting firm and/or the third partysubmitting a proposal, as applicable, has submitted its determination.  Failure to provide such notice within such30-day period shall be deemed to constitute a decision not to purchase theSubject Assets.  If the General Partnerelects to cause a Partnership Group Member to purchase the Subject Assets, thenthe Partnership Group Member shall purchase the Subject Assets pursuant to theConstruction Offer as modified by the determination of the accounting firmand/or the third party submitting a proposal as soon as commerciallypracticable after such determination and, if applicable, enter into anagreement with the Hamm Entity to provide services in a manner consistent withthe Construction Offer, as modified by the determination of the third partysubmitting a proposal, if applicable.

 

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

 

**2.5****                               *Enforcement***.  EachHamm Party agrees and acknowledges that the Partnership Group does not have anadequate remedy at law for the breach by the Hamm Entities of the covenants andagreements set forth in this Article II, and that any breach by any of theHamm Entities of the covenants and agreements set forth in this Article IIwould result in irreparable injury to the Partnership Group.  Each Hamm Party further agrees andacknowledges that any Partnership Group Member may, in addition to the otherremedies which may be available to the Partnership Group, file a suit in equityto enjoin any of the Hamm Entities from such breach, and consents to theissuance of injunctive relief under this Agreement.

 

**2.6****                               *Termination***.  ThisArticle II shall terminate on the first to occur of the following:  (i) the first day on which no Hamm ControlPerson nor any combination of Hamm Control Persons controls the Partnership,(ii) the death of Harold Hamm and (iii) the fifth anniversary of the date ofthis Agreement.

 

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**ARTICLE IIIIndemnification**

 

**3.1****                               *Continental Gas and Hiland Indemnification***.  Continental Resources, Hiland and ContinentalHoldings shall jointly and severally indemnify, defend and hold harmless thePartnership Group from and against any losses, damages, liabilities, claims,demands, causes of action, judgments, settlements, fines, penalties, costs andexpenses (including, without limitation, court costs and reasonable attorney’sand expert fees) of any and every kind or character, known or unknown, fixed orcontingent, suffered or incurred by the Partnership Group by reason of orarising out of all federal, state and local income tax liabilities attributableto the operation of the Assets prior to the Closing Date, including any suchincome tax liabilities that may result from the consummation of the formationtransactions contemplated by the Contribution Agreement.

 

**3.2***                               **Continental Resources Indemnification***.  Continental Resources shall indemnify, defendand hold harmless the Partnership Group from and against any losses, damages,liabilities, claims, demands, causes of action, judgments, settlements, fines,penalties, costs and expenses (including, without limitation, court costs andreasonable attorney’s and expert’s fees) of any and every kind or character,known or unknown, fixed or contingent, suffered or incurred by the PartnershipGroup by reason of or arising out of Continental Gas’ ownership, operation ordistribution of the properties and assets (and related rights and obligations)distributed by Continental Gas to Continental Resources in 2004.

 

***3.3***                               IndemnificationProcedures.

 

(a)                                  TheIndemnified Party agrees that promptly after it becomes aware of facts givingrise to a claim for indemnification under this Article III, it willprovide notice thereof in writing to the applicable Indemnifying Party,specifying the nature of and specific basis for such claim.

 

(b)                                 TheIndemnifying Party or Indemnifying Parties shall have the right to control atits sole cost and expense all aspects of the defense of (and any counterclaimswith respect to) any claims brought against the Indemnified Party that arecovered by the indemnification under this Article III, including, withoutlimitation, the selection of counsel, determination of whether to appeal anydecision of any court and the settling of any such matter or any issuesrelating thereto; *provided, however,* that no suchsettlement shall be entered into without the consent of the Indemnified Party(with the concurrence of the Conflicts Committee) unless it includes a fullrelease of the Indemnified Party from such matter or issues, as the case maybe.

 

(c)                                  TheIndemnified Party agrees to cooperate fully with each Indemnifying Party, with respect to all aspects of thedefense of any claims covered by the indemnification under this Article III,including, without limitation, the prompt furnishing to each Indemnifying Party of any correspondence or other noticerelating thereto that the Indemnified Party may receive, permitting the name ofthe Indemnified Party to be utilized in connection with such defense, themaking available to each IndemnifyingParty of any files, records or other information of the IndemnifiedParty

 

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that any Indemnifying Partyreasonably considers relevant to such defense and the making available to each Indemnifying Party of anyemployees of the Indemnified Party; *provided, however,*that in connection therewith eachIndemnifying Party agrees to use reasonable efforts to minimize theimpact thereof on the operations of the Indemnified Party and further agrees tomaintain the confidentiality of all files, records, and other informationfurnished by the Indemnified Party pursuant to this Section 3.3  In no event shall the obligation of theIndemnified Party to cooperate with eachIndemnifying Party as set forth in the immediately preceding sentence beconstrued as imposing upon the Indemnified Party an obligation to hire and payfor counsel in connection with the defense of any claims covered by theindemnification set forth in this Article III; *provided,however*, that the Indemnified Party may, at its own option, cost andexpense, hire and pay for counsel in connection with any such defense.  TheIndemnifying Party agrees to keep any such counsel hired by theIndemnified Party informed as to the status of any such defense, but the Indemnifying Party shall have theright to retain sole control over such defense.

 

(d)                                 Indetermining the amount of any loss, cost, damage or expense for which theIndemnified Party is entitled to indemnification under this Agreement, thegross amount of the indemnification will be reduced by (i) any insuranceproceeds realized by the Indemnified Party, and such correlative insurance benefitshall be net of any incremental insurance premiums that become due and payableby the Indemnified Party as a result of such claim and (ii) all amountsrecovered by the Indemnified Party under contractual indemnities from thirdPersons.

 

(e)                                  Thedate on which notification of a claim for indemnification is received by theIndemnifying Party shall determine whether such claim is timely made.

 

(f)                                    Inno event shall any Indemnified Party be permitted to make any claim under Section 3.2unless the Indemnified Party provides notice of such claim to the IndemnifyingParty on or before the fifth anniversary of the date of this Agreement.

 

**ARTICLE IVGeneral and Administrative Expenses**

 

For a period of two years from the Closing Date, Continental Resourcesshall continue to  provide thePartnership Group the general and administrative services that ContinentalResources has provided to Continental Gas and Hiland since January 1,2004, including but not limited to the general and administrative serviceslisted in Schedule II to this Agreement (the “*Services*”). Continental Resources shall exercise at least the same degree of care,skill and prudence in providing the services as customarily exercised by it forits own operations.  In consideration forthe providing of the Services, the Partnership will pay Continental Resources afee equal to the lesser of (i) Continental Resources’ actual cost of providingthe Services and (ii) $50,000, payable annually.

 

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**ARTICLE VPurchase Option**

 

***5.1***                               Optionto Purchase the Bakken Gathering System by the Partnership Group.

 

(a)                                  Hilandhereby grants to the Partnership Group the unconditional right and exclusiveoption for a period of two years from the Closing Date to purchase for fairmarket value at the time of purchase (in accordance with Section 5.2) allof Hiland’s right, title and interest in, to and under the Bakken GatheringSystem.

 

(b)                                 TheParties acknowledge that any potential transfer of the Bakken Gathering Systempursuant to this Article V is subject to obtaining any and all requiredwritten consents of governmental authorities.

 

(c)                                  Hilandhereby (i) represents and warrants that there are no rights of first refusal topurchase the Bakken Gathering System; and (ii) covenants and agrees that,subject to Section 5.2(c), Hiland will not transfer or grant any right oroption to purchase the Bakken Gathering System, other than to a PartnershipGroup Member, during a period of two years from the Closing Date.

 

***5.2***                               Procedures.

 

(a)                                  Ifa Partnership Group Member decides to exercise the option to purchase theBakken Gathering System, it will provide written notice to Hiland stating itsintention to exercise the option to purchase the Bakken Gathering System.  Within 30 days following receipt of suchnotice by Hiland, Hiland shall propose to the Partnership Group Member, inwriting, a fair market value for the Bakken Gathering System, taking intoaccount the terms of sale contained herein. The decision to purchase the Bakken Gathering System, the fair marketvalue to be paid for the Bakken Gathering System and the other terms of thepurchase shall be approved by the Conflicts Committee.  If the Partnership Group Member and Hilandare unable to agree on the fair market value of the Bakken Gathering Systemwithin 30 days after the Partnership Group Member’s receipt of Hiland’sproposal, the Partnership Group Member and Hiland will engage amutually-agreed-upon investment banking firm to determine the fair market valueof the Bakken Gathering System.  Suchinvestment banking firm will determine the fair market value of the BakkenGathering System within 30 days of its engagement and furnish Hiland and theGeneral Partner its determination.  Thefees of the investment banking firm will be split equally between Hiland andthe Partnership Group.  Once theinvestment banking firm submits its determination of the fair market value ofthe Bakken Gathering System, the Partnership Group Member will have the right,but not the obligation, subject to the approval of the Conflicts Committee, topurchase the Bakken Gathering System on the terms as modified by thedetermination of the investment banking firm. The Partnership Group Member will provide written notice of its decisionto Hiland within 30 days after the investment banking firm has submitted itsdetermination.  Failure to provide suchnotice within such 30-day period shall be deemed to constitute a decision notto purchase the Bakken Gathering System.

 

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(b)                                 Ifa Partnership Group Member chooses to exercise its option to purchase theBakken Gathering System under Section 5.2(a), this Agreement shall becomea contract of sale and purchase for the Bakken Gathering System pursuant towhich Hiland shall be obligated to sell the Bakken Gathering System to thePartnership Group Member and the Partnership Group Member shall be obligated topurchase the Bakken Gathering System from Hiland.  The terms of the purchase and sale agreement,unless otherwise agreed to by the Partnership Group Member (with the consent ofthe Conflicts Committee) and Hiland, will consist of the following:

 

(i)                                     thePartnership Group Member will deliver a cash purchase price (unless thePartnership Group Member and Hiland agree that the consideration will be paidby means of Units or an interest-bearing promissory note);

 

(ii)                                  Hilandwill represent that it has good and indefeasible title to the Bakken GatheringSystem, subject to all recorded and unrecorded matters and all physical conditionsand other matters in existence on the closing date for the purchase of theBakken Gathering System, plus any other such matters as the Partnership GroupMember may approve, which approval will not be unreasonably withheld.  If the Partnership Group Member desires toobtain any title insurance with respect to the Bakken Gathering System, thefull cost and expense of obtaining the same (including but not limited to thecost of title examination, document duplication and policy premium) shall beborne by the Partnership Group Member;

 

(iii)                               Hilandwill grant to the Partnership Group Member the right, exercisable at thePartnership Group Member’s risk and expense, to make such surveys, tests andinspections of the Bakken Gathering System as the Partnership Group Member maydeem desirable, so long as such surveys, tests or inspections do not damage theBakken Gathering System or interfere in any material respect with theactivities of Hiland thereon and so long as the Partnership Group Member hasfurnished Hiland with evidence that adequate liability insurance is in fullforce and effect;

 

(iv)                              thePartnership Group Member will have the right to terminate its obligation topurchase the Bakken Gathering System under this Section 5.2(b) if Hilandis not able to make the representations contemplated by Section 5.2(b)(ii)as of the closing date or if the results of any searches, surveys, tests orinspections conducted pursuant to Section 5.2(b)(ii) or (iii) above are,in the reasonable opinion of the Partnership Group Member, unsatisfactory;

 

(v)                                 theclosing date for the purchase of the Bakken Gathering System shall occur nolater than 90 days following receipt by Hiland of written notice by thePartnership Group Member of its intention to exercise its option to purchasethe Bakken Gathering System pursuant to Section 5.2(a);

 

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(vi)                              Hilandshall execute, have acknowledged and deliver to the Partnership Group Member aspecial warranty deed, assignment of easement, or comparable document, asappropriate, in the applicable jurisdiction, on the closing date for thepurchase of the Bakken Gathering System constituting a real property interestconveying the Bakken Gathering System unto the Partnership Group Member free andclear of all encumbrances created by Hiland other than those set forth in Section 5.2(b)(ii)above;

 

(vii)                           thesale of the Bakken Gathering System shall be made on an “as is,” “where is” and“with all faults” basis, and the instruments conveying the Bakken GatheringSystem shall contain appropriate disclaimers;

 

(viii)                        neitherHiland nor the applicable Partnership Group Member shall have any obligation tosell or buy the Bakken Gathering System if any of the material consentsreferred to in Section 5.1(b) have not been obtained; and

 

(ix)                                Hilandand the Partnership Group shall cooperate in good faith and use commerciallyreasonable efforts to obtain all necessary governmental and other third Personapprovals, waivers and consents required for the closing.  Any such closing shall be delayed, to theextent required, until the third Business Day following the expiration of anyrequired waiting periods under the Hart-Scott-Rodino Antitrust Improvements Actof 1976, as amended.

 

(c)                                  Ifa Partnership Group Member chooses or is deemed to have chosen not to exerciseits option to purchase the Bakken Gathering System at the price determined bythe investment banking firm under Section 5.2(a), all future rights topurchase the Bakken Gathering System by the Partnership Group will beextinguished.

 

**ARTICLE VI**

 

**Miscellaneous**

 

**6.1****                               *Choice of Law; Submission to Jurisdiction***.  This Agreement shall be subject to andgoverned by the laws of the State of Oklahoma, excluding any conflicts-of-lawrule or principle that might refer the construction or interpretation of thisAgreement to the laws of another state. Each Party hereby submits to the jurisdiction of the state and federalcourts in the State of Oklahoma and to venue in Enid, Oklahoma.

 

**6.2****                               *Notice***.  Allnotices or requests or consents provided for by, or permitted to be givenpursuant to, this Agreement must be in writing and must be given by depositingsame in the United States mail, addressed to the Person to be notified,postpaid, and registered or certified with return receipt requested or bydelivering such notice in person or by telecopier or telegram to suchParty.  Notice given by personal deliveryor mail shall be effective upon actual receipt. Notice given by telegram or telecopier shall be effective upon actualreceipt if received during the recipient’s normal business hours or at thebeginning of the recipient’s next business day after receipt if not receivedduring the recipient’s normal business hours. All notices to be sent to a Party pursuant to this Agreement shall besent to or made at the address set forth below

 

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such Party’s signature to this Agreement or at such other address assuch Party may stipulate to the other Parties in the manner provided in this Section 6.2.

 

if to Harold Hamm or the Hamm Entities (otherthan Continental Resources):

 

c/oContinental Resources, Inc.

302 NorthIndependence, Suite 1400Enid, Oklahoma 73702

Attention: Mr.Harold Hamm

 

if to Continental Resources:

 

Continental Resources,Inc.

302 NorthIndependence, Suite 1400Enid, Oklahoma 73702

Attention: Mr.Harold Hamm

 

if to the Partnership Entities:

HilandPartners, LP

205 WestMaple, Suite 110

Enid, Oklahoma73701

Attention: Mr. Randy Moeder

 

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

 

**6.4*****                               Amendmentor Modification***.  This Agreementmay be amended or modified from time to time only by the written agreement ofall the Parties hereto; provided, however, that the Partnership may not,without the prior approval of the Conflicts Committee, agree to any amendmentor modification of this Agreement that, in the reasonable discretion of theGeneral Partner, will adversely affect the holders of Common Units.  Each such instrument shall be reduced towriting and shall be designated on its face an “Amendment” or an “Addendum” tothis Agreement.

 

**6.5****                               *Assignment***.  NoParty shall have the right to assign any of its rights or obligations underthis Agreement without the consent of the other Parties hereto.

 

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

 

**6.7****                               *Severability***.  Ifany provision of this Agreement shall be held invalid or unenforceable by acourt or regulatory body of competent jurisdiction, the remainder of thisAgreement shall remain in full force and effect.

 

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**6.8****                               *Further Assurances***. In connection with this Agreement and all transactions contemplated bythis Agreement, each signatory party hereto agrees to execute and deliver suchadditional documents and instruments and to perform such additional acts as maybe necessary or appropriate to effectuate, carry out and perform all of theterms, provisions and conditions of this Agreement and all such transactions.

 

**6.9****                               *Rights of Limited Partners***.  The provisions of this Agreement areenforceable solely by the Parties to this Agreement, and no Limited Partner ofthe Partnership shall have the right, separate and apart from the Partnership,to enforce any provision of this Agreement or to compel any Party to thisAgreement to comply with the terms of this Agreement.

 

**6.10****                        *Successors***.  ThisAgreement shall bind and inure to the benefit of the Parties and to theirrespective successors and assigns.

 

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

 
|       | **CONTINENTAL RESOURCES, INC.**    |
|------------|------------------------------------|
|       |                               |
|       |                               |
|       | By:                                |  /s/ HAROLD HAMM |
|       |                               | Harold Hamm |
|       |                               | Chief Executive Officer |
|       |                               |   |
|       |                               |   |
|       | **HILAND PARTNERS, LLC**           |
|       |                               |   |
|       |                               |   |
|       | By:                                |  /s/ RANDY MOEDER |
|       |                               | Randy Moeder |
|       |                               | Manager |
|       |                               |   |
|       |                               |   |
|       | **HILAND PARTNERS GP, LLC**        |
|       |                               |   |
|       |                               |   |
|       | By:                                |  /s/ RANDY MOEDER |
|       |                               | Randy Moeder |
|       |                               | Chief Executive Officer and President |
|       |                               |   |
|       |                               |   |
|       | **CONTINENTAL GAS HOLDINGS, INC.** |
|       |                               |   |
|       |                               |   |
|       | By:                                |  /s/ HAROLD HAMM |
|       |                               | Harold Hamm |
|       |                               |   |
|       |                               |   |
|       | **HILAND PARTNERS, LP**            |
|       |                               |   |
| ** ** | **By:**                            | **Hiland Partners GP, LLC** |
|       |                               |   |
|       |                               |   |
|       | By:                                |  /s/ RANDY MOEDER |
|       |                               | Randy Moeder |
|       |                               | Chief Executive Officer and President |
|       |                               |   |
|       |                               |   |
|       |  /s/ HAROLD HAMM              |
|       | **HAROLD HAMM**                    |

 

 

*[SignaturePage to the Omnibus Agreement]*

 

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