PROCEEDING AFFECTING THE BORROWER OR ANY OF ITS SUBSIDIARIES PENDING OR
THREATENED IN WRITING BEFORE ANY COURT, GOVERNMENTAL AGENCY OR ARBITRATOR THAT
(I) COULD BE REASONABLY LIKELY TO HAVE A MATERIAL ADVERSE EFFECT OR
(II) PURPORTS TO AFFECT THE LEGALITY, VALIDITY OR ENFORCEABILITY OF ANY LOAN
DOCUMENT OR THE CONSUMMATION OF THE TRANSACTIONS CONTEMPLATED HEREBY.
(C)
ALL GOVERNMENTAL AND THIRD PARTY CONSENTS AND APPROVALS NECESSARY
IN CONNECTION WITH THE TRANSACTIONS CONTEMPLATED HEREBY SHALL HAVE BEEN OBTAINED
(WITHOUT THE
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IMPOSITION OF ANY CONDITIONS THAT ARE NOT ACCEPTABLE TO SNB) AND SHALL REMAIN IN
EFFECT, AND NO LAW OR REGULATION SHALL BE APPLICABLE IN THE REASONABLE JUDGMENT
OF SNB THAT RESTRAINS, PREVENTS OR IMPOSES MATERIALLY ADVERSE CONDITIONS UPON
THE TRANSACTIONS CONTEMPLATED HEREBY.
(D)
THE BORROWER SHALL HAVE NOTIFIED SNB IN WRITING AS TO ITS PROPOSED
EFFECTIVE DATE.
(E)
THE BORROWER SHALL HAVE PAID ALL ACCRUED FEES AND EXPENSES OF SNB
(INCLUDING THE ACCRUED FEES AND EXPENSES OF COUNSEL TO SNB).
(F)
ON THE EFFECTIVE DATE, THE FOLLOWING STATEMENTS SHALL BE TRUE AND
CORRECT IN ALL MATERIAL RESPECTS AND SNB SHALL HAVE RECEIVED A CERTIFICATE
SIGNED BY A DULY AUTHORIZED OFFICER OF THE BORROWER, DATED THE EFFECTIVE DATE,
STATING THAT:
(I)
THE REPRESENTATIONS AND WARRANTIES CONTAINED IN EACH LOAN
DOCUMENT ARE CORRECT ON AND AS OF THE EFFECTIVE DATE (EXCEPT ANY REPRESENTATION
THAT SPEAKS AS OF A SPECIFIED PRIOR DATE), AND
(II)
NO EVENT HAS OCCURRED AND IS CONTINUING THAT CONSTITUTES A
DEFAULT OR EVENT OF DEFAULT.
(G)
SNB SHALL HAVE RECEIVED ON OR BEFORE THE EFFECTIVE DATE THE
FOLLOWING, EACH DATED SUCH DAY, IN FORM AND SUBSTANCE SATISFACTORY TO SNB AND IN
SUFFICIENT COPIES:
(I)
A PLEDGE AGREEMENT, PLEDGING 2,321,471 COMMON UNITS OF HILAND
PARTNERS, LP, A DELAWARE LIMITED PARTNERSHIP (THE 'HILAND COMMON UNITS") AND
3,020,000 SUBORDINATED UNITS OF HILAND PARTNERS, LP, A DELAWARE LIMITED
PARTNERSHIP (THE "HILAND SUBORDINATED UNITS"), ALL OWNED BY THE BORROWER, IN
FORM AND SUBSTANCE ACCEPTABLE TO SNB (AS AMENDED, THE "PLEDGE AGREEMENT"), DULY
EXECUTED BY THE BORROWER.
(II)
IF REQUIRED BY SNB, A SECURITY AGREEMENT, GRANTING SNB A
FIRST-PRIORITY SECURITY INTEREST IN THE COLLATERAL DESCRIBED THEREIN, IN FORM
AND SUBSTANCE ACCEPTABLE TO SNB (AS AMENDED, THE "SECURITY AGREEMENT"), DULY
EXECUTED BY THE BORROWER.
(III)
EVIDENCE THAT ALL OTHER ACTION THAT SNB MAY DEEM NECESSARY OR
DESIRABLE IN ORDER TO PERFECT AND PROTECT THE FIRST PRIORITY LIENS AND SECURITY
INTERESTS CREATED UNDER THE SECURITY AGREEMENT, INCLUDING, WITHOUT LIMITATION,
THE FILING OF UNIFORM COMMERCIAL CODE FINANCING STATEMENTS AND THE DELIVERY TO
SNB OF CERTIFICATES COVERING THE COMMON UNITS AND SUBORDINATED UNITS INTENDED TO
BE SUBJECT TO A FIRST-PRIORITY PLEDGE UNDER THE TERMS OF THE PLEDGE AGREEMENT
TOGETHER WITH EXECUTED STOCK POWERS.
(V)
CERTIFIED COPIES OF THE RESOLUTIONS OF THE BOARD OF DIRECTORS OF
THE BORROWER APPROVING THE LOAN DOCUMENTS, AND OF ALL DOCUMENTS EVIDENCING OTHER
NECESSARY CORPORATE ACTION AND GOVERNMENTAL APPROVALS, IF ANY, WITH RESPECT TO
THE LOAN DOCUMENTS.
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(VII)
A CERTIFICATE OF THE SECRETARY OR AN ASSISTANT SECRETARY OF THE
BORROWER CERTIFYING THE NAMES