Document:

Exhibit 10.1

 

FIRST AMENDMENT TO

CREDIT AGREEMENT

 

THIS FIRST AMENDMENT TO CREDIT AGREEMENT (this “First
Amendment”), dated as of September 26, 2005 (the “First Amendment
Closing Date”) is among HILAND OPERATING,
LLC, a Delaware limited liability company (the “Borrower”),
the banks and other financial institutions listed on the signature pages hereto
(together with each other person who becomes a Lender, collectively the “Lenders”),
and MIDFIRST BANK, a federally
chartered savings association, individually as a Lender and as Administrative
Agent (the “Administrative Agent”).

 

Preliminary Statement

 

WHEREAS,
Borrower, Administrative Agent and the Lenders are parties to that certain
Credit Agreement dated as of February 15, 2005 (as same may be further
amended, restated, increased and extended, the “Credit Agreement”),
under and subject to the terms of which the Lenders have committed to make
Revolving Loans and issue Letters of Credit to Borrower; and

 

WHEREAS,
Borrower has now requested that the Administrative Agent and Lenders modify the
Credit Agreement to change certain terms thereof, including, among other
things, to increase the size of the Commitments from $55,000,000 to
$125,000,000 and to add the Bakken System to the Collateral; and

 

WHEREAS,
the Administrative Agent and Lenders have agreed to modify the Credit Agreement
in accordance with the terms and conditions contained in this First Amendment;
and

 

WHEREAS,
Borrower, Administrative Agent and the Lenders wish to execute this First
Amendment to evidence such agreement;

 

NOW,
THEREFORE, in consideration of the premises and the mutual
covenants herein contained and for other good and valuable consideration, the
receipt and adequacy of which are hereby acknowledged, Borrower, Administrative
Agent and the Lenders hereby agree as follows (all capitalized terms used
herein and not otherwise defined shall have the meanings as defined in the
Credit Agreement):

 

Section 1.                                            Amendment
to Section 1.01.  Section 1.01
of the Credit Agreement is hereby amended as follows:

 

(a)                                  The
definition of “Applicable Rate” is hereby amended by deleting the last
sentence of such definition in its entirety and replacing it with the
following:

 

“Notwithstanding the above, the Applicable Rate from
the Effective Date (as such term is defined in the First Amendment) through the
first Financial Statement Delivery Date occurring after December 31, 2005

 

 

shall be 1.75% for ABR Loans and 2.75% for Eurodollar
Revolving Loans and the unused commitment fee rate shall be 0.50%.”

 

(b)                                 The
definition of “Commitment Increase Agreement” is hereby deleted in its
entirety.

 

(c)                                  The
definition of “Commitment Increase Notice” is hereby deleted in its
entirety.

 

(d)                                 The
following definition of “First Amendment” is hereby added in proper
alphabetical order:

 

““First Amendment” means that certain First
Amendment to Credit Agreement by and between Borrower, Administrative Agent and
the Lenders dated as of the First Amendment Closing Date, amending this
Agreement.”

 

(e)                                  The
definition of “New Lender” is hereby deleted in its entirety.

 

(f)                                    The
definition of “New Lender Agreement” is hereby deleted in its entirety.

 

(g)                                 The
definition of “Re-Allocation Date” is hereby deleted in its entirety.

 

(h)                                 The
definition of “Revolver A Commitment” is hereby amended by deleting such
definition in its entirety and replacing it with the following:

 

““Revolver A Commitment” means, with respect to
each Lender, the commitment of such Lender to make Revolver A Loans and to
acquire participations in Letters of Credit hereunder, expressed as an amount
representing the maximum aggregate amount of such Lender’s Revolver A Credit
Exposure hereunder, as such commitment may be (a) reduced from time to
time pursuant to Section 2.09, and (b) reduced or increased
from time to time pursuant to assignments by or to such Lender pursuant to Section 9.04.  The initial amount of each Lender’s Revolver
A Commitment is set forth on Schedule 2.01, or in the Assignment
and Assumption pursuant to which such Lender shall have assumed its Commitment,
as applicable.  The initial aggregate
amount of the Lenders’ Revolver A Commitments is $117,500,000.”

 

(i)                                     The
definition of “Security Documents” is hereby deleted in its entirety and
replaced with the following:

 

““Security Documents” means the guaranty of
each of the Guarantors, together with any guaranty delivered pursuant to Section 5.16
hereof, and any and all other security agreements, pledge agreements,
mortgages, deeds of trust, leasehold mortgages, leasehold deeds of trust,
guaranty agreements, landlord’s consents, estoppels, assignments, UCC financing
statements and all similar documents executed by any Person in connection
herewith, including, without limitation, all documents and

 

2

 

instruments listed on Schedule 1.01
attached hereto, together with any agreements delivered pursuant to Section 5.12
hereof, granting to the Administrative Agent for the benefit of the Lenders a
first Lien and security interest in substantially all of the Collateral of the
Borrower and its Subsidiaries as security for the Obligations, including,
without limitation, any such documents or agreements delivered with respect to
the Bakken System pursuant to the First Amendment, subject only to Permitted
Encumbrances.”

 

Section 2.                                            Amendment
to Section 2.20.  Section 2.20
of the Credit Agreement is hereby deleted in its entirety.

 

Section 3.                                            Amendment
to Section 6.16.  Section 6.16
of the Credit Agreement is hereby deleted in its entirety and replaced by the
following:

 

“SECTION 6.16.                                   Minimum
Consolidated Tangible Net Worth.   Borrower will not permit Consolidated
Tangible Net Worth as of (i) the last day of each of the fiscal quarters
ended September 30, 2005 and December 31, 2005, to be less than
$15,000,000; and (ii) the last day of any fiscal quarter thereafter, to be
less than $40,000,000.”

 

Section 4.                                            Amendment
to Section 6.18.  Section 6.18
of the Credit Agreement is hereby deleted in its entirety and replaced by the
following:

 

“SECTION 6.18.                                   Maximum
Leverage Ratio.  The Borrower shall
not permit the Leverage Ratio as of (i) the last day of each of the fiscal
quarters ended September 30, 2005 and December 31, 2005, to exceed
4.5 to 1.0; and (ii) the last day of any fiscal quarter thereafter, to
exceed 4.0 to 1.0.”

 

Section 5.                                            Amendment
to Exhibit B.  The text of Exhibit B
to the Credit Agreement is hereby deleted in its entirety and replaced with “Intentionally
Deleted.”

 

Section 6.                                            Amendment
to Exhibit C.  The text of Exhibit C
to the Credit Agreement is hereby deleted in its entirety and replaced with “Intentionally
Deleted.”

 

Section 7.                                            Amendment
to Schedule 1.01.  Schedule 1.01
to the Credit Agreement is hereby deleted in its entirety and replaced by Schedule 1.01
attached hereto.

 

Section 8.                                            Amendment
to Schedule 2.01.  Schedule 2.01
to the Credit Agreement is hereby deleted in its entirety and replaced by Schedule 2.01
attached hereto.

 

Section 9.                                            Amendment
to Schedule 3.06(b).  Schedule 3.06(b) to
the Credit Agreement is hereby deleted in its entirety and replaced by Schedule 3.06(b) attached
hereto.

 

Section 10.                                      Amendment
to Schedule 3.06(d).  Schedule 3.06(d) to
the Credit Agreement is hereby deleted in its entirety and replaced by Schedule 3.06(d) attached
hereto.

 

3

 

Section 11.                                      Amendment
to Schedule 3.14.  Schedule 3.14
to the Credit Agreement is hereby deleted in its entirety and replaced by Schedule 3.14
attached hereto.

 

Section 12.                                      Amendment
to Schedule 3.24.  Schedule 3.24
to the Credit Agreement is hereby deleted in its entirety and replaced by Schedule 3.24
attached hereto.

 

Section 13.                                      Amendment
to Schedule 5.18.  Schedule 5.18
to the Credit Agreement is hereby deleted in its entirety and replaced by Schedule 5.18
attached hereto.

 

Section 14.                                      Re-allocation
of Commitments.  On the Effective
Date there shall either be no Loans outstanding or arrangements satisfactory to
the Administrative Agent shall have been made to prepay all outstanding Loans,
together with accrued interest thereon and any amounts payable pursuant to Section 2.16
of the Credit Agreement.  Any prepayment
made by the Borrower in accordance with the preceding sentence of this Section 14
may be made with the proceeds of an Advance made by all the Banks in connection
with the increase and adjustment of the Commitments pursuant to this Section 14.  The Borrower and all Lenders hereby instruct
and irrevocably authorize the Administrative Agent to accept such prepayments,
affect such offsets, and distribute the proceeds of each Loan made by any Lender
on the Effective Date as are necessary to affect the adjustments in the
Commitments as are evidenced by this First Amendment.

 

Section 15.                                      Exercise
of Section 2.20 of the Credit Agreement.  The Borrower, the Administrative Agent and
the Lenders hereby agree and acknowledge that Thirty-Five Million and No/100
Dollars ($35,000,000) of the increase in the Revolver A Commitments pursuant to
this First Amendment is being effected by the exercise by Borrower of its right
to increase the Revolver A Commitments pursuant to Section 2.20 of the
Credit Agreement.

 

Section 16.                                      Representations
True; No Default.  Borrower
represents and warrants that:

 

(a)                                  this
First Amendment has been duly authorized, executed and delivered on its behalf;
the Credit Agreement, as amended hereby, together with the other Loan Documents
to which Borrower is a party, constitute valid and legally binding agreements
of Borrower enforceable in accordance with their terms;

 

(b)                                 the
representations and warranties of Borrower contained in Article III of the
Credit Agreement are true and correct in all material respects on and as of the
date hereof as though made on and as of the date hereof; and

 

(c)                                  no
Default or Event of Default under the Credit Agreement has occurred and is
continuing.

 

Section 17.                                      Expenses,
Additional Information.  Borrower
shall pay to the Administrative Agent all reasonable expenses incurred in
connection with the execution of this First Amendment, including all reasonable
expenses incurred in connection with any previous negotiation and loan
documentation.  Borrower shall furnish to
the Administrative Agent and Lenders all such other documents, consents and
information relating to Borrower as the Administrative Agent or any Lender may reasonably
require to accomplish the purposes hereof.

 

4

 

Section 18.                                      Conditions
to Effectiveness.  This First
Amendment shall become effective on the date (the “Effective Date”)
when, and only when:

 

(a)                                  Borrower,
Administrative Agent and the Lenders shall have executed and delivered to the
Administrative Agent a counterpart of this First Amendment;

 

(b)                                 Administrative
Agent shall have received resolutions, in form and substance reasonably
satisfactory to the Administrative Agent, of Borrower and each Guarantor
authorizing the execution, delivery and performance of this First Amendment,
each such copy being attached to an original certificate of an authorized
officer of the Borrower and each Guarantor, dated as of the First Amendment
Closing Date certifying (i) that the resolutions attached thereto are
true, correct and complete copies of resolutions duly adopted by Borrower and
each Guarantor, as applicable, (ii) that such resolutions constitute all
resolutions adopted with respect to the transactions contemplated hereby, (iii) that
such resolutions have not been amended, modified, revoked or rescinded as of
the First Amendment Closing Date, (iv) that the articles of organization
and regulations of the Borrower and each Guarantor, as applicable, have not
been amended or otherwise modified since the effective date of the Credit
Agreement, except pursuant to any amendments attached thereto, and (v) as
to the incumbency and signature of the officers of the Borrower and each
Guarantor executing this First Amendment;

 

(c)                                  Each
of the representations and warranties made by the Borrower and each Guarantor
in or pursuant to the Loan Documents shall be true and correct in all material
respects;

 

(d)                                 No
Default or Event of Default shall have occurred and be continuing;

 

(e)                                  No
event shall have occurred with respect to the Parent, the Borrower and its
Subsidiaries, taken as a whole, which, in the reasonable opinion of the
Lenders, has had, or could reasonably be expected to have, a Material Adverse
Effect;

 

(f)                                    Administrative
Agent shall have received a fully executed copy of that certain fee letter
between the Borrower and Administrative Agent pertaining to certain fees and
expenses payable by Borrower to such parties as set forth in such letter and
all fees and other amounts due and payable on or prior to the Effective Date,
including, to the extent invoiced, reimbursement or payment of all out of
pocket expenses required to be reimbursed or paid by the Borrower hereunder;

 

(g)                                 The
Borrower shall have acquired 100% of the outstanding membership interests in
Hiland Partners, LLC (“Hiland Partners”) and shall have pledged such
membership interests to Administrative Agent for the benefit of the Lenders
(free and clear of all Liens, other than Liens permitted by Section 6.02
of the Credit Agreement);

 

(h)                                 Hiland
Partners shall deliver a fully executed Guaranty to Administrative Agent;

 

5

 

(i)                                     The
Administrative Agent shall have received each of the Security Documents, duly
executed and completed in sufficient number of counterparts for recording, if
necessary, and they shall constitute satisfactory security documentation to
create first priority security interests in the Collateral, including, without
limitation, all assets comprising the Bakken System (free and clear of all
Liens, other than Liens permitted by Section 6.02 of the Credit
Agreement);

 

(j)                                     The
Administrative Agent shall have received the following:

 

(i)                                     Uniform
Commercial Code Financing Statements (Form UCC-1) and such evidence of
filing or arrangements for filing as may be acceptable to the Administrative
Agent, naming the relevant Loan Party as the debtor and the Administrative
Agent as the secured party, or other similar instruments or documents, filed or
to be filed under the Uniform Commercial Code of all jurisdictions as may be
necessary or, in the opinion of the Administrative Agent, desirable to perfect
the security interest of the Administrative Agent pursuant to the Security
Documents;

 

(ii)                                  certified
copies of Uniform Commercial Code Requests for Information or Copies (Form UCC-11),
or a similar search report certified by a party acceptable to the
Administrative Agent, dated a date reasonably near to the date of the initial
Borrowing, listing all effective financing statements which name any Loan Party
(under its present name and any previous names) as the debtor and which are
filed in the jurisdictions in which filings of any Security Documents are made
pursuant to this Agreement, together with copies of such financing statements
none of which (other than those (i) securing the Obligations, if such Form UCC-11
or search report, as the case may be, is current enough to list such financing
statements, or (ii) that are terminated as of the Effective Date or within
a time frame otherwise acceptable to the Administrative Agent) shall cover any
Collateral described in the Security Documents; and

 

(iii)                               copies
of tax Lien searches for each jurisdiction in which a Security Document is
filed or recorded pursuant to this Agreement, certified by a party acceptable
to the Administrative Agent, listing all tax Liens imposed on any Loan Party or
any of its assets (none of which shall cover any Collateral described in the
Security Documents);

 

(k)                                  The
Administrative Agent shall have received, and be satisfied with, the title
information with respect to the Collateral and shall, in its sole and absolute
discretion, be satisfied with the status of title to the Collateral;

 

(l)                                     The
Administrative Agent shall have received a reliance letter from EnviroTech
Engineering & Consulting, Inc. with respect to the Phase I
Environmental Site Assessment for the Bakken System dated August, 2005, which
reliance letter entitles the Administrative Agent and Lenders to rely on such
report as if such

 

6

 

report had been issued directly to the Administrative Agent for the
benefit of the Lenders;

 

(m)                               Administrative
Agent or any Lender or counsel to the Administrative Agent shall receive such
other instruments or documents as they may reasonably request;

 

(n)                                 The
Administrative Agent shall have received, and shall be satisfied in its sole
discretion with the contents, results and scope of, the report by Barnes &
Click with respect to the Bakken System;

 

(o)                                 The
Administrative Agent shall have received a favorable written opinion (addressed
to the Administrative Agent and the Lenders and dated the Effective Date) of
McAfee & Taft, a professional corporation, counsel for the Borrower,
relating to the Parent, the Borrower and its Subsidiaries, this Agreement or
the Transactions and any other matters as the Lenders shall reasonably
request.  The Borrower hereby requests
such counsel to deliver such opinion;

 

(p)                                 The
Administrative Agent shall have received favorable written opinions (addressed
to the Administrative Agent and the Lenders and dated the Effective Date) of
each local counsel of the Borrower approved by Administrative Agent, for each
state where any portion of the Collateral is located, relating to the
enforceability of the Security Documents in such State and any other matters as
the Lenders shall reasonably request;

 

(q)                                 The
Administrative Agent shall have received such documents and certificates as the
Administrative Agent or its counsel may reasonably request relating to the
organization, existence and good standing of the Borrower, the Guarantors, the
Parent and the General Partner, the authorization of the Transactions and any
other legal matters relating to the Borrower, the Guarantors, Parent and the
General Partner, this First Amendment, the Credit Agreement or the
Transactions, all in form and substance satisfactory to the Administrative
Agent and its counsel; and

 

(r)                                    The
Administrative Agent shall have received a certificate, dated the Effective
Date and signed by the President, a Vice President or a Financial Officer of
the Borrower, confirming compliance with the conditions set forth in paragraphs
(a) and (b) of Section 4.02 of the Credit Agreement.

 

The Administrative Agent
shall notify the Borrower and the Lenders of the Effective Date upon the
satisfaction of all of the foregoing conditions, and such notice shall be
conclusive and binding.  Notwithstanding
the foregoing, the rights and obligations of the parties hereunder shall not
become effective unless each of the foregoing conditions is satisfied (or
waived pursuant to Section 9.02 of the Credit Agreement) at or prior to
3:00 p.m., Oklahoma City, Oklahoma time, on December 31, 2005 (and,
in the event such conditions are not so satisfied or waived, this First
Amendment shall be null and void and of no further force and effect).

 

7

 

Section 19.                                      Miscellaneous
Provisions.

 

(a)                                  From
and after the execution and delivery of this First Amendment, the Credit
Agreement shall be deemed to be amended and modified as herein provided, and
except as so amended and modified the Credit Agreement shall continue in full
force and effect.

 

(b)                                 The
Credit Agreement and this First Amendment shall be read and construed as one
and the same instrument.

 

(c)                                  Any
reference in any of the Loan Documents to the Credit Agreement shall be a
reference to the Credit Agreement as amended by this First Amendment.

 

(d)                                 This
First Amendment shall be construed in accordance with and governed by the laws
of the State of Oklahoma and of the United States of America.

 

(e)                                  This
First Amendment may be signed in any number of counterparts and by different
parties in separate counterparts and may be in original or facsimile form, each
of which shall be deemed an original but all of which together shall constitute
one and the same instrument.

 

(f)                                    The
headings herein shall be accorded no significance in interpreting this First
Amendment.

 

Section 20.                                      Binding
Effect.  This First Amendment shall
be binding upon and inure to the benefit of Borrower, Lenders and the
Administrative Agent and their respective successors and assigns, except that
Borrower shall not have the right to assign its rights hereunder or any
interest herein.

 

Section 21.                                      Counterparts.  This First Amendment may be executed by the
parties on separate counterparts, and each counterpart when so executed and
delivered shall constitute an original instrument, and all such separate
counterparts shall constitute but one and the same instrument.

 

[The remainder of this page intentionally
left blank.]

 

8

 

IN WITNESS WHEREOF, the
parties have caused this First Amendment to be executed by their respective
duly authorized officers on the First Amendment Closing Date, to be effective
as of the Effective Date.

 

 

	
   

  	
  HILAND OPERATING, LLC,

  
	
   

  	
  a Delaware limited liability company

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Randy Moeder

  
	
   

  	
   

  	
  Randy Moeder

  
	
   

  	
   

  	
  Chief Executive Officer and President

  

 

 

[Signature Page to First Amendment to Credit Agreement]

 

 

	
   

  	
  MIDFIRST BANK,

  
	
   

  	
  a federally chartered savings association,

  
	
   

  	
  in its capacity as Administrative Agent

  
	
   

  	
   

  
	
   

  	
   

  	
    /s/ James P. Boggs

  
	
   

  	
  By:

  	
  James P. Boggs

  
	
   

  	
  Title:

  	
  Vice President

  
	
   

  	
  Address:

  
	
   

  	
  MidFirst Bank

  
	
   

  	
  MidFirst Plaza

  
	
   

  	
  501 N.W. Grand Blvd., Suite 100

  
	
   

  	
  Oklahoma City, Oklahoma 73118

  
	
   

  	
  Attention: James P. Boggs

  
	
   

  	
  Telephone No. (405) 767-7115

  
	
   

  	
  Telecopy No.  (405) 767-7120

  
	
   

  	
  e-mail:
  james.boggs@midfirst.com

  

 

 

[Signature Page to First Amendment to Credit Agreement]

 

 

	
   

  	
  MIDFIRST BANK,

  
	
   

  	
  a federally chartered savings association,

  
	
   

  	
  in its capacity as a Lender

  
	
   

  	
   

  
	
   

  	
   

  	
    /s/ James P. Boggs

  
	
   

  	
  By:

  	
  James P. Boggs

  
	
   

  	
  Title:

  	
  Vice President

  
	
   

  	
  Address:

  
	
   

  	
  MidFirst Bank

  
	
   

  	
  MidFirst Plaza

  
	
   

  	
  501 N.W. Grand Blvd., Suite 100

  
	
   

  	
  Oklahoma City, Oklahoma 73118

  
	
   

  	
  Attention: James P. Boggs

  
	
   

  	
  Telephone No. (405) 767-7115

  
	
   

  	
  Telecopy No. (405) 767-7120

  
	
   

  	
  e-mail:
  james.boggs@midfirst.com

  

 

 

[Signature Page to First Amendment to Credit Agreement]

 

 

	
   

  	
  BANK OF SCOTLAND

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
   /s/ Karen Welch

  
	
   

  	
  Name:

  	
   Karen Welch

  
	
   

  	
  Title:

  	
   Assistant Vice President

  
					

 

 

[Signature Page to First Amendment to Credit Agreement]

 

 

	
   

  	
  FORTIS CAPITAL CORP.

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
   /s/ Darrell Holley

  
	
   

  	
  Name:

  	
  Darrell Holley

  
	
   

  	
  Title:

  	
  Managing Director

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
   /s/ Casey Lowary

  
	
   

  	
  Name:

  	
  Casey Lowary

  
	
   

  	
  Title:

  	
  Senior Vice President

  
						

 

 

[Signature Page to First Amendment to Credit Agreement]

 

 

	
   

  	
  COMPASS BANK

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
   /s/ Kathleen J. Bowen

  
	
   

  	
  Name:

  	
  Kathleen J. Bowen

  
	
   

  	
  Title:

  	
  Senior Vice President

  
					

 

 

[Signature Page to First Amendment to Credit Agreement]

 

 

	
   

  	
  U.S. BANK NATIONAL ASSOCIATION

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
   /s/ Mathew J. Purchase

  
	
   

  	
  Name:

  	
  Mathew J. Purchase

  
	
   

  	
  Title:

  	
  Vice President

  
					

 

 

[Signature Page to First Amendment to Credit Agreement]

 

 

	
   

  	
  BANK OF OKLAHOMA

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
   /s/ Mark Morris

  
	
   

  	
  Name:

  	
  Mark Morris

  
	
   

  	
  Title:

  	
  Vice President

  
					

 

 

[Signature Page to First Amendment to Credit Agreement]

 

 

ACKNOWLEDGMENT OF GUARANTORS

 

Each of the undersigned
Guarantors hereby confirms that each Loan Document (as the same may be amended
or amended and restated, as the case may be, pursuant to and in connection with
this First Amendment) to which it is a party or otherwise bound remains in full
force and effect and that all Collateral encumbered thereby will continue to
secure, to the fullest extent possible, the payment and performance of all “Obligations”
(in each case as such term is defined in the applicable Loan Document),
including without limitation the payment and performance of all such “Obligations”
in respect of the Obligations now or hereafter existing under or in respect of
the Credit Agreement and the other Loan Documents.  The Guarantors specifically reaffirm and
extend their obligations under each of their applicable Guaranties to cover all
indebtedness evidenced by the Credit Agreement as same has been created,
amended and/or restated by or in connection with this First Amendment.  The Guaranties and all the terms thereof
shall remain in full force and effect and the Guarantors hereby acknowledge and
agree that same are valid and existing and that each of the Guarantors’
obligations thereunder shall not be impaired or limited by the execution or
effectiveness of this First Amendment. 
Each Guarantor hereby represents and warrants that all representations
and warranties contained in this First Amendment and the other Loan Documents
to which it is a party or otherwise bound are true, correct and complete in all
material respects on and as of the First Amendment Closing Date, except to the
extent such representations and warranties specifically relate to an earlier
date, in which case they were true, correct and complete in all material
respects on and as of such earlier date. 
Lender hereby preserves all its rights against each Guarantor under its
applicable Guaranty and the other Loan Documents to which each applicable
Guarantor is a party.

 

Each Guarantor
acknowledges and agrees that (i) notwithstanding the conditions to the
effectiveness set forth in this First Amendment, such Guarantor is not required
by the terms of the Credit Agreement, this First Amendment or any other Loan
Document to consent to the amendments of the Credit Agreement effected pursuant
to this First Amendment; and (ii) nothing in the Credit Agreement, this
First Amendment or any other Loan Document shall be deemed to require the consent
of such Guarantor to any future amendments to the Credit Agreement.

 

 

[Signature Page to
First Amendment to Credit Agreement]

 

 

	
   

  	
  HILAND PARTNERS, LP,

  	
   

  
	
   

  	
  a Delaware limited partnership

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  Hiland Partners GP, LLC,

  	
   

  
	
   

  	
   

  	
  its sole general partner

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
   /s/ Randy Moeder

  	
   

  
	
   

  	
   

  	
  Name:

  	
  Randy Moeder

  	
   

  
	
   

  	
   

  	
  Title:

  	
  Chief Executive Officer

  	
   

  
	
   

  	
   

  	
   

  	
  and President

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  HILAND ENERGY PARTNERS, LLC,

  	
   

  
	
   

  	
  a Delaware limited liability company

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
   /s/ Randy Moeder

  	
   

  
	
   

  	
  Name:

  	
  Randy Moeder

  	
   

  
	
   

  	
  Title:

  	
  Chief Executive Officer and President

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  CONTINENTAL GAS OPERATING, LP,

  	
   

  
	
   

  	
  an Oklahoma limited partnership

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  Hiland GP, LLC, its sole general partner

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
   /s/ Randy Moeder

  	
   

  
	
   

  	
   

  	
  Name:

  	
  Randy Moeder

  	
   

  
	
   

  	
   

  	
  Title:

  	
  Chief Executive Officer

  	
   

  
	
   

  	
   

  	
   

  	
  and President

  	
   

  
						

 

 

[Signature
Page to First Amendment to Credit Agreement]

 

 

	
   

  	
  HILAND LP, LLC,

  	
   

  
	
   

  	
  a Delaware limited liability company

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
   /s/ Randy Moeder

  	
   

  
	
   

  	
  Name:

  	
  Randy Moeder

  	
   

  
	
   

  	
  Title:

  	
  Chief Executive Officer and President

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  HILAND GP, LLC,

  	
   

  
	
   

  	
  a Delaware limited liability company

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  By

  	
   /s/ Randy Moeder

  	
   

  
	
   

  	
  Name:

  	
  Randy Moeder

  	
   

  
	
   

  	
  Title:

  	
  Chief Executive Officer and President

  	
   

  
					

 

 

[Signature
Page to First Amendment to Credit Agreement]Exhibit No. 10.95

 

Russ Berrie and Company, Inc.

111 Bauer Drive, Oakland, NJ 07436

(201) 337-9000  (800) 631-8465

 

September 28, 2005

 

 

Marc S. Goldfarb, Esq.

29 Sinclair Terrace

Short Hills, NJ  07078

 

Dear Marc:

 

I am
pleased to offer you the position of Vice President, General Counsel and
Corporate Secretary of Russ Berrie and Company, Inc. (the “Company”)
effective September 26, 2005.  This
position is one of corporate officer of the Company.

 

Your
employment with the Company will include the following:

 

1.               COMPENSATION.  Your base salary will be at an annual rate of
$260,000.  For 2005, you shall be
eligible to participate in the Company’s 2005 Incentive Compensation (“IC”)
program (pro-rated for your date of hire). 
Your 2005 IC Factor (as defined in the IC program), together with the
2005 goals and objectives, are set forth on Exhibit A attached
hereto and incorporated herein.  Payment
of the IC (or portion thereof) is predicated upon meeting both objective and
subjective performance standards established for the applicable year, as set
forth on Exhibit A.  In order
to receive the IC payment (or any portion thereof), you must be actively
employed by the Company at the time of the payment.  In order to be eligible to participate in the
IC program, you must execute and deliver to the Company the IC document which
has been provided to you.  

 

2.               GROUP
HEALTH AND DISABILITY.  After 90 days
of continuous employment, you will be eligible to participate in:

 

a.               The
Company’s contributory Group Health Plan and Group Dental Plan.  

b.              The
Company’s non-contributory Life Insurance Plan. This is provided at no cost to
you.  

c.               The
Company’s non-contributory Business Travel Insurance Plan.  This is provided at no cost to you. 

d.              The
Company’s non-contributory Accidental Death and Dismemberment Plan.  This is provided at no cost to you. 

e.               The
Company’s non-contributory Long Term Disability Plan.  This is provided at no cost to you.  

 

1

 

3.               VOLUNTARY
BENEFITS:  After 90 days of
continuous employment, you will be eligible to participate in:

 

a.               Healthcare
Flexible Spending Account.  

b.              Dependent
Care Flexible Spending Account.  

c.               Supplemental
Disability and Accident Insurance Plans. 

 

4.               STOCK
OPTIONS.  After 3 months of
continuous employment, you will be granted 40,000 stock options. These options
will be granted under and pursuant to the Company’s 2004 Stock Option,
Restricted and Non-Restricted Stock Plan (the “Stock Plan”).  In accordance with the Stock Plan, these
options will vest ratably over a period of 5 years. Such options will be
Non-Qualified Stock Options.  Possible
future grants of stock options shall be at the sole discretion of the
Compensation Committee of the Board of Directors of the Company.  

 

5.               401(k)
PLAN.  After 6 months of continuous
employment, you will be eligible to participate in the Company’s 401(k) plan
based on its current provisions.  Under
the current plan terms, the Company matches a portion of your contribution to
your 401(k) account.  The Company’s
contribution vests over a period of 4 years of employment.  

 

6.               EXECUTIVE
DEFERRED COMPENSATION PLAN.  Within
30 days of your date of hire, you will be eligible to participate in the
Company’s Executive Deferred Compensation Plan. 

 

7.               VACATION.  The Company’s vacation policy provides that
after 6 months of employment, you will be eligible for one week paid
vacation.  The Company’s vacation policy
further provides that thereafter, during the following calendar year, you will
be eligible for two weeks paid vacation. 
However, you will be eligible for vacation above and beyond the
aforementioned policy.  Upon your date of
hire, you will be eligible for two weeks paid vacation.  Beginning with calendar year 2006, you will
be eligible for three weeks paid vacation per year.

 

8.               HOLIDAY/SICK.
You will be eligible for paid holidays and sick time in accordance with Company
policy. 

 

9.               CAR
ALLOWANCE  You will receive an
allowance of $1,100 per month to cover the cost of an automobile, automobile
insurance, automobile maintenance and repair, gasoline and any and all other
costs and expenses relating to such automobile. 

 

10.         SEVERANCE.  In the event that you are terminated from the
Company for reason other than cause or other than your own voluntary
resignation, you will be eligible to receive severance in accordance with the
Company’s severance

 

2

 

policy
for Domestic Vice Presidents (and above), a copy of which is attached hereto as
Exhibit B.

 

11.         CHANGE
IN CONTROL SEVERANCE PLAN.  Effective
your date of hire, you will receive the protections of the Company’s Change in
Control Severance Plan.

 

The Company reserves the right to change or modify
these programs.  In addition, employment
with the Company is considered “at will” and does not represent a specific
guarantee.

 

Marc, I want to welcome you to the Company and wish
you much success in your new position.

 

 

	
   

  	
  Very truly yours,

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  /s/ Anthony Cappiello

  	
   

  	
   

  
	
   

  	
  Anthony Cappiello

  	
   

  
	
   

  	
  EVP and CAO

  	
   

  
	
   

  	
   

  	
   

  
	
  cc: A. Gatto

  	
   

  	
   

  
	
  E. Goldenberg

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  ACCEPTED AND AGREED:

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  /s/ Marc S. Goldfarb

  	
   

  	
   

  	
   

  
	
  Marc S. Goldfarb

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Date:

  	
   September 28,
  2005

  	
   

  	
   

  	
   

  
						

 

3

 

EXHIBIT A

 

MARC GOLDFARB’S INCENTIVE COMPENSATION PROGRAM 

(effective September 26,
2005)

 

IC Factor:  40% of Base Salary,
pro-rated based upon date of hire (40% of 2005 Base Salary of $260,000 is $104,000,
to be pro-rated based upon date of hire of September 26, 2005) 

 

2005
CORPORATE OBJECTIVES:

 

	
  See “Corporate” Business Unit’s IC Target set forth
  on

  	
   

  	
  Value: 50%* of
  IC Factor

  
	
  Exhibit “A” to Russ Berrie and
  Company, Inc. Incentive

  	
   

  	
  ($52,000)

  
	
  Compensation (“IC”) Program

  	
   

  	
   

  
	
  (excluding material acquisitions)

  	
   

  	
   

  

 

*Value
could be up to 100% of the IC Factor if the Maximum Target is reached.

 

2005
INDIVIDUAL OBJECTIVES:

 

	
   

  	
   

  	
  Value:  30% of IC Factor

  
	
   

  	
   

  	
  ($31,200)

  
	
  To Be Determined

  	
   

  	
   

  

 

2005
INDIVIDUAL INITIATIVES:

 

	
   

  	
   

  	
  Value:  20% of
  IC Factor

  
	
   

  	
   

  	
  ($20,800)

  
	
   

  	
   

  	
   

  
	
  1.  Other initiatives as may be mutually
  determined by EVP and CAO and associate throughout course of the year.

  

 

4

 

EXHIBIT B

 

SEVERANCE
POLICY FOR DOMESTIC VICE PRESIDENTS (AND ABOVE) 

 

OF RUSS
BERRIE AND COMPANY, INC.,  Effective February 11,
2003

 

The
Company’s severance policy is amended for domestic Vice Presidents (and above;
collectively referred to herein as “VPs”) and is effective February 11,
2003, as follows:

 

Domestic
VPs, if terminated by the Company without cause and not in connection with a
change in control of the Company (namely, more than 6 months prior to or more
than 2 years after such Change in Control), are eligible, based on tenure with
the Company, for the following severance payment:

 

•                  VPs with less than 1 year of service with the Company
would receive 4 months of severance pay

 

•                  VPs with at least 1 year of service but less than 2
years of service with the Company would receive 6 months of severance pay

 

•                  VPs with at least 2 years of service but less than 6
years of service with the Company would receive 8 months of severance pay

 

•                  VPs with at least 6 years of service but less than 10
years of service with the Company would receive 10 months of severance pay

 

•                  VPs with 10 or more years of service with the Company
would receive 12 months (i.e., one year) of severance pay  

 

The severance is to be paid at the salary rate
(base pay not including bonus(es) or commissions) in effect on the termination
date.  The severance will be paid over
the course of the severance period in accordance with the Company’s normal pay schedule (not
in a lump sum).  During the severance
period, the terminated VP is also entitled to remain on the Company’s (1) health
and dental insurance plan (making the same payroll contribution as he/she made,
on the date of termination, as an active employee), and (2) all other
insurance plans for which he/she was eligible on the date of termination.  In addition, for a period of 60 days, the
terminated VP is entitled to use of the Company automobile (or payment of an
automobile allowance) or reimbursement of certain automobile expenses, as the
case may be, in accordance with the nature and type of automobile perk that the
VP had in effect on the date of termination. 
If the terminated VP obtains gainful employment during his/her severance
period, then the severance payments will be terminated effective on the date
that he/she begins new employment.

 

“Change-in-control” and “cause” shall have the
meanings assigned thereto in the Company’s Change in Control Severance
Plan.  

 

As a condition to receiving the aforementioned
severance payment and benefits, the eligible terminated VP must sign and
deliver to the Company the Company’s form of General Release of Claims,
Non-Compete, Non-Hire and Non-Disparagement Agreement.

 

This amended severance policy supercedes any other
agreement between the Company and a VP that provides for lesser benefits with
respect to the type of termination covered hereby in effect on the effective
date of this amendment or thereafter.

 

5

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