Document:

exv10w12

 

Exhibit 10.12

     Javier Baz Employment Agreement

     Lifeline Therapeutics, Inc. (the “Company”) does not have a written agreement with Mr. Baz
governing his employment as Chairman of the Board of Directors of the Company. However, the Board
of Directors of the Company has approved a compensation package for Mr. Baz as follows:

     For Mr. Baz’s service as Chairman of the Board of Directors of the Company for a period from
October 1, 2005 through September 30, 2006 (in addition to the cash compensation being paid to him
as a director and a member of the executive committee of the Board of Directors): For each month of
service during this term, Mr. Baz will receive warrants to purchase 10,000 shares of common stock
of the Company at an exercise price equal to the volume weighted average trading price of common
stock on the Wednesday of each month that immediately precedes the last Thursday of that month. If
that Wednesday is not a trading day, then the exercise price will be equal to the volume weighted
average trading price on the first trading day immediately preceding that Wednesday. Each warrant
will be issued at the close of business on the trading day on which its exercise price is
determined, and it will expire at the close of business on the second anniversary of that trading
day.QuickLinks
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Exhibit 10.17  

CREDIT AGREEMENT  

Dated as of May 1, 2006 

between 

HILAND
PARTNERS GP, LLC 

And

MIDFIRST
BANK 

 
 
 

TABLE OF CONTENTS    
    

	 	 	 	 	Page
	

ARTICLE I	
 	

DEFINITIONS AND ACCOUNTING TERMS	
 	

1
	 	1.01	 	Defined Terms	 	1
	

ARTICLE II	
 	

THE COMMITMENT AND CREDIT EXTENSIONS	
 	

6
	 	2.01	 	Loan	 	6
	 	2.02	 	Principal	 	6
	 	2.03	 	Purpose	 	6
	 	2.04	 	Maturity Date	 	6
	 	2.05	 	Interest	 	7
	 	2.06	 	Default Interest	 	7
	 	2.07	 	Repayment of the Note	 	7
	 	2.08	 	Prepayments	 	7
	 	2.09	 	Evidence of Debt	 	7
	 	2.10	 	Payments Generally	 	7
	

ARTICLE III	
 	

CONDITIONS PRECEDENT TO CREDIT EXTENSIONS	
 	

8
	 	3.01	 	Conditions of Initial Credit Extension	 	8
	

ARTICLE IV	
 	

REPRESENTATIONS AND WARRANTIES	
 	

9
	 	4.01	 	Existence, Qualification and Power; Compliance with Laws	 	9
	 	4.02	 	Authorization; No Contravention	 	9
	 	4.03	 	Governmental Authorization; Other Consents	 	9
	 	4.04	 	Binding Effect	 	9
	 	4.05	 	Financial Statements; No Material Adverse Effect	 	9
	 	4.06	 	Litigation	 	10
	 	4.07	 	No Default	 	10
	 	4.08	 	Ownership of Property; Liens	 	10
	 	4.09	 	Insurance	 	10
	 	4.10	 	Taxes	 	10
	 	4.11	 	ERISA Compliance	 	10
	 	4.12	 	Subsidiaries	 	11
	 	4.13	 	Investment Company Act; Public Utility Holding Company Act	 	11
	 	4.14	 	Disclosure	 	11
	 	4.15	 	Compliance with Laws	 	11
	

ARTICLE V	
 	

AFFIRMATIVE COVENANTS	
 	

11
	 	5.01	 	Certificates; Other Information	 	11
	 	5.02	 	Notices	 	12
	 	5.03	 	Payment of Obligations	 	12
	 	5.04	 	Preservation of Existence, Etc	 	12
	 	5.05	 	Maintenance of Properties	 	12
	 	5.06	 	Maintenance of Insurance	 	12
	 	5.07	 	Compliance with Laws	 	12
	 	5.08	 	Books and Records	 	12
	 	5.09	 	Inspection Rights	 	13
	 	 	 	 	 

i

 

	

ARTICLE VI	
 	

NEGATIVE COVENANTS	
 	

13
	 	6.01	 	Liens	 	13
	 	6.02	 	Indebtedness	 	13
	 	6.03	 	Fundamental Changes	 	13
	 	6.04	 	Dispositions	 	14
	 	6.05	 	Change in Nature of Business	 	14
	 	6.06	 	Transactions with Affiliates	 	14
	 	6.07	 	Hiland Partners, LP and its Subsidiaries	 	14
	

ARTICLE VII	
 	

EVENTS OF DEFAULT AND REMEDIES	
 	

14
	 	7.01	 	Events of Default	 	14
	 	7.02	 	Remedies Upon Event of Default	 	16
	 	7.03	 	Application of Funds	 	16
	

ARTICLE VIII	
 	

MISCELLANEOUS	
 	

16
	 	8.01	 	Amendments; Etc	 	16
	 	8.02	 	Notices and Other Communications; Facsimile Copies	 	17
	 	8.03	 	No Waiver; Cumulative Remedies	 	17
	 	8.04	 	Attorney Costs, Expenses and Taxes	 	18
	 	8.05	 	Indemnification by the Borrower	 	18
	 	8.06	 	Payments Set Aside	 	18
	 	8.07	 	Successors and Assigns	 	19
	 	8.08	 	Confidentiality	 	20
	 	8.09	 	Set-off	 	21
	 	8.10	 	Interest Rate Limitation	 	21
	 	8.11	 	Counterparts	 	21
	 	8.12	 	Integration	 	21
	 	8.13	 	Survival of Representations and Warranties	 	21
	 	8.14	 	Severability	 	22
	 	8.15	 	Governing Law	 	22
	 	8.16	 	Waiver of Right to Trial by Jury	 	22
	 	8.17	 	Time of the Essence	 	22
	 	8.18	 	ENTIRE AGREEMENT	 	22

ii

 
 

CREDIT AGREEMENT    
    

        This CREDIT AGREEMENT ("Agreement") is entered into as of May 1, 2006, by and between HILAND PARTNERS GP,
LLC, a Delaware limited liability company ("Borrower") and MIDFIRST BANK, a federally chartered savings association
("Lender"). 

        The
Borrower has requested that Lender provide a credit facility to enable it to acquire common units of ownership in its subsidiary, Hiland Partners, LP, and the Lender is willing to do
so on the terms and conditions set forth herein. 

        In
consideration of the mutual covenants and agreements herein contained, the parties hereto covenant and agree as follows: 

 
 

ARTICLE I
  DEFINITIONS AND ACCOUNTING TERMS    
    

        1.01 Defined Terms. As used in this Agreement, the following terms shall have the meanings set forth below: 

        "Affiliate" means, with respect to any Person, another Person that directly, or indirectly through one or more intermediaries, Controls or
is Controlled by or is under common Control with the Person specified. "Control" means the possession, directly or indirectly, of the power to direct or
cause the direction of the management or policies of a Person, whether through the ability to exercise voting power, by contract or otherwise.
"Controlling" and "Controlled" have meanings correlative thereto. 

        "Agreement" means this Credit Agreement. 

        "Attorney Costs" means and includes all reasonable fees, expenses and disbursements of any law firm or other external counsel and, without
duplication, the reasonably allocated cost of internal legal services and all reasonable expenses and disbursements of internal counsel. 

        "Audited Financial Statements" means the audited balance sheet of the Borrower for the fiscal year ended December 31, 2005, and the
related statements of income or operations, partners' equity and cash flows for such fiscal year of the Borrower, including the notes thereto. 

        "Business Day" means any day other than a Saturday, Sunday or other day on which commercial banks are authorized to close under the Laws
of, or are in fact closed in, the state where the Lending Office is located. 

        "Closing Date" means the first date all the conditions precedent in Section 3.01
are satisfied or waived by the Lender. 

        "Code" means the Internal Revenue Code of 1986, as amended. 

        "Commitment Fee" shall mean that certain fee described in the fee letter which such fee shall be due upon execution of this Agreement. 

        "Debtor Relief Laws" means the Bankruptcy Code of the United States, and all other liquidation, conservatorship, bankruptcy, assignment
for the benefit of creditors, moratorium, rearrangement, receivership, insolvency, reorganization, or similar debtor relief Laws of the United States or other applicable jurisdictions from time to
time in effect and affecting the rights of creditors generally. 

        "Default" means any event or condition that constitutes an Event of Default or that, with the giving of any notice, the passage of time,
or both, would be an Event of Default. 

        "Default Rate" means an interest rate equal to the Prime Rate plus 2% per annum. 

        "Disposition" or "Dispose" means the sale, transfer, license, lease or other disposition
(including any sale and leaseback transaction) of any property by any Person, including any sale, assignment, transfer or other disposal, with or without recourse, of any notes or accounts receivable
or any rights and claims associated therewith. 

 

        "Eligible Assignee" has the meaning specified in Section 8.07(e). 

        "ERISA" means the Employee Retirement Income Security Act of 1974. 

        "ERISA Affiliate" means any trade or business (whether or not incorporated) under common control with the Borrower within the meaning of
Section 414(b) or (c) of the Code (and Sections 414(m) and (o) of the Code for purposes of provisions relating to Section 412 of the Code). 

        "ERISA Event" means (a) a Reportable Event with respect to a Pension Plan; (b) a withdrawal by the Borrower or any ERISA
Affiliate from a Pension Plan subject to Section 4063 of ERISA during a plan year in which it was a substantial employer (as defined in Section 4001(a)(2) of ERISA) or a cessation of
operations that is treated as such a withdrawal under Section 4062(e) of ERISA; (c) a complete or partial withdrawal by the Borrower or any ERISA Affiliate from a Multiemployer Plan or
notification that a Multiemployer Plan is in reorganization; (d) the filing of a notice of intent to terminate, the treatment of a Plan amendment as a termination under Sections 4041 or 4041A
of ERISA, or the commencement of proceedings by the PBGC to terminate a Pension Plan or Multiemployer Plan; (e) an event or condition which constitutes grounds under Section 4042 of
ERISA for the termination of, or the appointment of a trustee to administer, any Pension Plan or Multiemployer Plan; or (f) the imposition of any liability under Title IV of ERISA, other than
for PBGC premiums due but not delinquent under Section 4007 of ERISA, upon the Borrower or any ERISA Affiliate. 

        "Event of Default" has the meaning specified in Section 7.01. 

        "GAAP" means generally accepted accounting principles in the United States set forth in the opinions and pronouncements of the Accounting
Principles Board and the American Institute of Certified Public Accountants and statements and pronouncements of the Financial Accounting Standards Board or such other principles as may be approved by
a significant segment of the accounting profession in the United States, that are applicable to the circumstances as of the date of determination, consistently applied. 

        "Governmental Authority" means any nation or government, any state or other political subdivision thereof, any agency, authority,
instrumentality, regulatory body, court, administrative tribunal, central bank or other entity exercising executive, legislative, judicial, taxing, regulatory or administrative powers or functions of
or pertaining to government. 

2

 

        "Guarantee" means, as to any Person, any (a) any obligation, contingent or otherwise, of such Person guaranteeing or having the
economic effect of guaranteeing any Indebtedness or other obligation payable or performable by another Person (the "primary obligor") in any manner, whether directly or indirectly, and including any
obligation of such Person, direct or indirect, (i) to purchase or pay (or advance or supply funds for the purchase or payment of) such Indebtedness or other obligation, (ii) to purchase
or lease property, securities or services for the purpose of assuring the obligee in respect of such Indebtedness or other obligation of the payment or performance of such Indebtedness or other
obligation, (iii) to maintain working capital, equity capital or any other financial statement condition or liquidity or level of income or cash flow of the primary obligor so as to enable the
primary obligor to pay such Indebtedness or other obligation, or (iv) entered into for the purpose of assuring in any other manner the obligee in respect of such Indebtedness or other
obligation of the payment or performance thereof or to protect such obligee against loss in respect thereof (in whole or in part), or (b) any Lien on any assets of such Person securing any
Indebtedness or other obligation of any other Person, whether or not such Indebtedness or other obligation is assumed by such Person. The amount of any Guarantee shall be deemed to be an amount equal
to the stated or determinable amount of the related primary obligation, or portion thereof, in respect of which such Guarantee is made or, if not stated or determinable, the maximum reasonably
anticipated liability in respect thereof as determined by the guaranteeing Person in good faith. The term "Guarantee" as a verb has a corresponding meaning. 

        "Guarantor" shall mean each of Mr. Harold Hamm, the Harold Hamm DST Trust, the Harold Hamm HJ Trust, Randy Moeder, Equity Financial
Services, Inc., Ken Maples and the term "Guarantors" shall collectively refer to all of such Guarantors. 

        "Guaranty Agreement" means that certain Guaranty Agreement, substantially in the form of Exhibit B attached hereto executed by each
Guarantor. 

        "Hiland LP" means HILAND PARTNERS, LP, a Delaware limited partnership. 

        "Hiland Operating Credit Agreement" means that certain Credit Agreement dated as of February 15, 2005 by and among Hiland
Operating, LLC, a Delaware limited liability company, the banks and other financial institutions listed on the signature pages thereto, and MidFirst Bank, individually as a lender and as
Administrative Agent, as amended from time to time. 

        "Indebtedness" means, as to any Person at a particular time, without duplication, all of the following, whether or not included as
indebtedness or liabilities in accordance with GAAP: (a) all obligations of such Person for borrowed money and all obligations of such Person evidenced by bonds, debentures, notes, loan
agreements or other similar instruments; (b) all direct or contingent obligations of such Person arising under letters of credit (including standby and commercial), bankers' acceptances, bank
guaranties, surety bonds and similar instruments; (c) all obligations of such Person to pay the deferred purchase price of property or services (other than trade accounts payable in the
ordinary course of business); (d) indebtedness (excluding prepaid interest thereon) secured by a Lien on property owned or being purchased by such Person (including indebtedness arising under
conditional sales or other title retention agreements), whether or not such indebtedness shall have been assumed by such Person or is limited in recourse; (e) capital leases; and (f) all
Guarantees of such Person in respect of any of the foregoing. 

        For
all purposes hereof, the Indebtedness of any Person shall include the Indebtedness of any partnership or joint venture (other than a joint venture that is itself a corporation or
limited liability company) in which such Person is a general partner or a joint venturer, unless such Indebtedness is expressly made non-recourse to such Person. 

        "Indemnified Liabilities" has the meaning specified in Section 8.05. 

        "Indemnitees" has the meaning specified in Section 8.05. 

3

 

        "Investment" means, as to any Person, any direct or indirect acquisition or investment by such Person, whether by means of (a) the
purchase or other acquisition of capital stock or other securities of another Person, (b) a loan, advance or capital contribution to, Guarantee or assumption of debt of, or purchase or other
acquisition of any other debt or equity participation or interest in, another Person, including any partnership or joint venture interest in such other Person, or (c) the purchase or other
acquisition (in one transaction or a series of transactions) of assets of another Person that constitute a business unit. For purposes of covenant compliance, the amount of any Investment shall be the
amount actually invested, without adjustment for subsequent increases or decreases in the value of such Investment. 

        "Laws" means, collectively, all international, foreign, Federal, state and local statutes, treaties, rules, guidelines, regulations,
ordinances, codes and administrative or judicial precedents or authorities, including the interpretation or administration thereof by any Governmental Authority charged with the enforcement,
interpretation or administration thereof, and all applicable administrative orders, directed duties, requests, licenses, authorizations and permits of, and agreements with, any Governmental Authority,
in each case whether or not having the force of law. 

        "Lending Office" means the office or offices of the Lender described as such on  Schedule 8.02, or such other office or offices as the Lender may from time to time
notify the Borrower. 

        "Lien" means any mortgage, pledge, hypothecation, assignment, deposit arrangement, encumbrance, lien (statutory or other), charge, or
preference, priority or other security interest or preferential arrangement of any kind or nature whatsoever (including any conditional sale or other title retention agreement, and any financing lease
having substantially the same economic effect as any of the foregoing). 

        "Loan" has the meaning specified in Section 2.01. 

        "Loan Documents" means this Agreement, any Note, and the Guaranty Agreements. 

        "Loan Parties" means, collectively, the Borrower and each Guarantor. 

        "Material Adverse Effect" means (a) a material adverse change in, or a material adverse effect upon, the operations, business,
properties, liabilities (actual or contingent), condition (financial or otherwise) or prospects of the Borrower or the Borrower and its Subsidiaries taken as a whole; (b) a material impairment
of the ability of any Loan Party to perform its obligations under any Loan Document to which it is a party; or (c) a material adverse effect upon the legality, validity, binding effect or
enforceability against any Loan Party of any Loan Document to which it is a party. 

        "Maturity Date" means the earlier of (a) October 31, 2007, or (b) the date upon which Borrower completes its initial
public offering (IPO), of which proceeds will be used to retire this facility in its entirety, or (c) the date occurring ninety (90) days following the death of any Guarantor. 

        "Multiemployer Plan" means any employee benefit plan of the type described in Section 4001(a)(3) of ERISA, to which the Borrower or
any ERISA Affiliate makes or is obligated to make contributions, or during the preceding five plan years, has made or been obligated to make contributions. 

        "Note" means a promissory note made by the Borrower in favor of the Lender evidencing Loan made by the Lender, substantially in the form
of Exhibit A. 

4

 

        "Obligations" means all advances to, and debts, liabilities, obligations, covenants and duties of, Borrower arising under any Loan
Document or otherwise with respect to the Loan, whether direct or indirect (including those acquired by assumption), absolute or contingent, due or to become due, now existing or hereafter arising and
including interest and fees that accrue after the commencement by or against Borrower or any Affiliate thereof of any proceeding under any Debtor Relief Laws naming such Person as the debtor in such
proceeding, regardless of whether such interest and fees are allowed claims in such proceeding. 

        "Organization Documents" means, (a) with respect to any corporation, the certificate or articles of incorporation and the bylaws
(or equivalent or comparable constitutive documents with respect to any non-U.S. jurisdiction); (b) with respect to any limited liability company, the certificate or articles of
formation or organization and operating agreement; and (c) with respect to any partnership, joint venture, trust or other form of business entity, the partnership, joint venture or other
applicable agreement of formation or organization and any agreement, instrument, filing or notice with respect thereto filed in connection with its formation or organization with the applicable
Governmental Authority in the jurisdiction of its formation or organization and, if applicable, any certificate or articles of formation or organization of such entity. 

        "Outstanding Amount" means, with respect to the Loan on any date, the aggregate outstanding principal amount thereof after giving effect
to any borrowings and prepayments or repayments of the Loan occurring on such date. 

        "PBGC" means the Pension Benefit Guaranty Corporation. 

        "Pension Plan" means any "employee pension benefit plan" (as such term is defined in Section 3(2) of ERISA), other than a
Multiemployer Plan, that is subject to Title IV of ERISA and is sponsored or maintained by the Borrower or any ERISA Affiliate or to which the Borrower or any ERISA Affiliate contributes or has an
obligation to contribute, or in the case of a multiple employer or other plan described in Section 4064(a) of ERISA, has made contributions at any time during the immediately preceding five
plan years. 

        "Permitted Transactions" includes (i) the merger of any Subsidiary with (a) the Borrower,  provided that the Borrower shall be the continuing or surviving
Person, or (b) any one or more other Subsidiaries,  provided that when any Subsidiary is merging with another Subsidiary, the Subsidiary shall be the continuing or surviving Person, (ii) the
Disposal by any Subsidiary of all or substantially all of its assets (upon voluntary liquidation or otherwise) to the Borrower or to another Subsidiary;  provided that if the transferor in such a
transaction is a Subsidiary, then the transferee must either be the Borrower or a Subsidiary,
(iii) Dispositions of obsolete or worn out property, whether now owned or hereafter acquired, in the ordinary course of business, (iv) Dispositions of inventory in the ordinary course of
business, (v) Dispositions of equipment or real property to the extent that (a) such property is exchanged for credit against the purchase price of similar replacement property or
(b) the proceeds of such Disposition are reasonably promptly applied to the purchase price of such replacement property, and (vi) Dispositions of property by any Subsidiary to the
Borrower or to a wholly owned Subsidiary; provided that if the transferor of such property is a Guarantor, the transferee thereof must either be the
Borrower or a Guarantor. Any Disposition pursuant to clauses (i) through (vi) shall be for fair market value. 

        "Person" means any natural person, corporation, limited liability company, trust, joint venture, association, company, partnership,
Governmental Authority or other entity. 

        "Plan" means any "employee benefit plan" (as such term is defined in Section 3(3) of ERISA) established by the Borrower or, with
respect to any such plan that is subject to Section 412 of the Code or Title IV of ERISA, any ERISA Affiliate. 

5

 

        "Prime Rate" means the rate of interest per annum publicly announced from time to time by MidFirst Bank as its prime rate in effect at its
principal office in Oklahoma City, Oklahoma; each change in the Prime Rate shall be effective from and including the date such change is publicly announced as being effective. 

        "Reportable Event" means any of the events set forth in Section 4043(c) of ERISA, other than events for which the 30 day
notice period has been waived. 

        "Responsible Officer" means the chief executive officer, president, chief financial officer, treasurer, assistant treasurer or trustee of
a Loan Party. Any document delivered hereunder that is signed by a Responsible Officer of a Loan Party shall be conclusively presumed to have been authorized by all necessary corporate, partnership
and/or other action on the part of such Loan Party and such Responsible Officer shall be conclusively presumed to have acted on behalf of such Loan Party. 

        "Restricted Payment" means any dividend or other distribution (whether in cash, securities or other property) with respect to any capital
stock or other equity interest of the Borrower or any Subsidiary, or any payment (whether in cash, securities or other property), including any sinking fund or similar deposit, on account of the
purchase, redemption, retirement, acquisition, cancellation or termination of any such capital stock or other equity interest or of any option, warrant or other right to acquire any such capital stock
or other equity interest. 

        "Subsidiary" of a Person means a corporation, partnership, joint venture, limited liability company or other business entity of which a
majority of the shares of securities or other interests having ordinary voting power for the election of directors or other governing body (other than securities or interests having such power only by
reason of the happening of a contingency) are at the time beneficially owned, or the management of which is otherwise controlled, directly, or indirectly through one or more intermediaries, or both,
by such Person. Unless otherwise specified, all references herein to a "Subsidiary" or to "Subsidiaries" shall refer to a Subsidiary or Subsidiaries of the Borrower. 

        "Unfunded Pension Liability" means the excess of a Pension Plan's benefit liabilities under Section 4001(a)(16) of ERISA, over the
current value of that Pension Plan's assets, determined in accordance with the assumptions used for funding the Pension Plan pursuant to Section 412 of the Code for the applicable plan year. 

 
 

ARTICLE II
  THE COMMITMENT AND CREDIT EXTENSIONS    
    

        2.01 Loan. Subject to the terms and conditions hereof, and the terms and conditions of the Loan Documents, and in reliance
upon the Borrower's representations and warranties contained herein, the Lender agrees to extend credit to the Borrower, and the Borrower agrees to such extension of credit from the Lender for the
purpose of providing financing for the acquisition of partnership interests in Hiland LP on the following terms and conditions. 

        2.02 Principal. The Loan shall be evidenced by the Note and shall be in the principal amount of Thirty Five Million and
No/100's Dollars ($35,000,000.00). 

        2.03 Purpose. Proceeds of the Loan shall be used only to acquire partnership interests in Hiland LP. 

        2.04 Maturity Date. The entire unpaid principal balance of the Note plus all accrued interest thereon will be due and payable
on the Maturity Date. 

6

 

        2.05 Interest. Beginning on the date hereof and continuing throughout the life of the Loan, the outstanding principal amount
of the Note shall bear interest per annum at a floating rate equal to the Prime Rate less one and one tenth of one percent (1.10%), calculated on the basis of the actual number of days elapsed, but
computed as if each calendar year consisted of a 360-day year, with the interest rate provided for in the Note to change, if applicable, on the date of any change in the Prime Rate without
notice. 

        2.06 Default Interest. Upon the occurrence of an Event of Default and the continuance of such Event of Default after the
giving of any required notice and the expiration of any applicable cure period, in lieu of the interest rate provided in the Note, all sums owing by any Borrower to the Lender in connection with this
Loan shall bear interest at the Default Rate. 

        2.07 Repayment of the Note. Beginning December 31, 2006 and continuing on each calendar quarter end thereafter through
the Maturity Date, Borrower shall make a payment of all accrued, but unpaid, interest on the Note. The outstanding principal amount of the Note, together with all accrued and unpaid interest thereon,
shall be due and payable in full on the Maturity Date. 

        2.08 Prepayments. Borrower may prepay all or any part of the Note at any time without premium or penalty. 

        2.09 Evidence of Debt. The Loan shall be evidenced by an account or record maintained by the Lender in the ordinary course of
business. The accounts or records maintained by the Lender shall be conclusive absent manifest error of the amount of the Loan made by the Lender to the Borrower and the interest and payments thereon.
Any failure to so record or any error in doing so shall not, however, limit or otherwise affect the obligation of the Borrower hereunder to pay any amount owing with respect to the Obligations. Upon
the request of the Lender, the Borrower shall execute and deliver to the Lender a Note, which shall evidence the Lender's Loans in addition to such accounts or records. The Lender may attach schedules
to the Note and endorse thereon the date, type, amount and maturity of each Loan and payments with respect thereto. 

        2.10 Payments Generally. All payments to be made by the Borrower shall be made without condition or deduction for any
counterclaim, defense, recoupment or setoff. Except as otherwise expressly provided herein, all payments by the Borrower hereunder shall be made to the Lender at the applicable Lending Office in
Dollars and in immediately available funds not later than 3:00 p.m. on the date specified herein. All payments received by the Lender after 3:00 p.m. shall be deemed received on the next
succeeding Business Day and any applicable interest or fee shall continue to accrue. If any payment to be made by the Borrower shall come due on a day other than a Business Day, payment shall be made
on the next following Business Day, and such extension of time shall be reflected in computing interest or fees, as the case may be. Nothing herein shall be deemed to obligate the Lender to obtain the
funds for any Loan in any particular place or manner or to constitute a representation by the Lender that it has obtained or will obtain the funds for any Loan in any particular place or manner. 

7

 

 
 

ARTICLE III
  CONDITIONS PRECEDENT TO CREDIT EXTENSIONS    
    

        3.01 Conditions of Initial Credit Extension. The obligation of the Lender to make its initial Credit Extension hereunder is
subject to satisfaction of the following conditions precedent: 

        (a)   The
Lender's receipt of the following, each of which shall be originals or facsimiles (followed promptly by originals) unless otherwise specified, each properly executed
by a Responsible Officer, each dated the Closing Date (or, in the case of certificates of governmental officials, a recent date before the Closing Date) and each in form and substance satisfactory to
the Lender and its legal counsel: 

        (i)    executed
counterparts of this Agreement; 

        (ii)   the
Note executed by the Borrower; 

        (iii)  a
Guaranty Agreement for each Guarantor and, where appropriate, a joinder from the spouse of each married Guarantor. 

        (iv)  such
certificates of resolutions or other action, incumbency certificates and/or other certificates of Responsible Officers of each Loan Party as the Lender may require
evidencing the identity, authority and capacity of each Responsible Officer thereof authorized to act as a Responsible Officer in connection with this Agreement and the other Loan Documents to which
such Loan Party is a party; 

        (v)   such
documents and certifications as the Lender may reasonably require to evidence that Borrower is duly organized or formed, and that Borrower is validly existing, in
good standing and qualified to engage in business in each jurisdiction where its ownership, lease or operation of properties or the conduct of its business requires such qualification, except to the
extent that failure to do so could not reasonably be expected to have a Material Adverse Effect; and 

        (vi)  a
favorable opinion of McAfee Taft a Professional Corportion, counsel to the Loan Parties, addressed to the Lender, as to such matters concerning the Loan Parties and
the Loan Documents as the Lender may reasonably request. 

        (b)   Any
fees including, but not limited to the Commitment Fee, required to be paid on or before the Closing Date shall have been paid. 

        (c)   The
Borrower shall have paid all Attorney Costs of the Lender to the extent invoiced prior to or on the Closing Date, plus such additional amounts of Attorney Costs as
shall constitute its reasonable estimate of Attorney Costs incurred or to be incurred by it through the closing proceedings (provided that such estimate shall not thereafter preclude a final settling
of accounts between the Borrower and the Lender). 

8

 

 
 

ARTICLE IV
  REPRESENTATIONS AND WARRANTIES    
    

        The Borrower represents and warrants to the Lender that: 

        4.01 Existence, Qualification and Power; Compliance with Laws. Borrower (a) is a limited liability company duly
organized or formed, validly existing and in good standing under the Laws of the jurisdiction of its organization, (b) has all requisite power and authority and all requisite governmental
licenses, authorizations, consents and approvals to (i) own its assets and carry on its business and (ii) execute, deliver and perform its obligations under the Loan Documents to which
it is a party, (c) is duly qualified and is licensed and in good standing under the Laws of each jurisdiction where its ownership, lease or operation of properties or the conduct of its
business requires such qualification or license, and (d) is in compliance with all Laws; except in each case referred to in clause (b)(i), (c) or (d), to the extent that failure
to do so could not reasonably be expected to have a Material Adverse Effect. 

        4.02 Authorization; No Contravention. The execution, delivery and performance by Borrower of each Loan Document to which such
Person is party, have been duly authorized by all necessary organizational action, and do not and will not (a) contravene the terms of Borrower's Organization Documents; (b) conflict
with or result in any breach or contravention of, or the creation of any Lien under, (i) any contractual obligation to which Borrower is a party or (ii) any order, injunction, writ or
decree of any Governmental Authority or any arbitral award to which Borrower or its property is subject; or (c) violate any Law. 

        4.03 Governmental Authorization; Other Consents. No approval, consent, exemption, authorization, or other action by, or
notice to, or filing with, any Governmental Authority or any other Person is necessary or required in connection with the execution, delivery or performance by, or enforcement against, any Loan Party
of this Agreement or any other Loan Document. 

        4.04 Binding Effect. This Agreement has been, and each other Loan Document, when delivered hereunder, will have been, duly
executed and delivered by each Loan Party that is party thereto. This Agreement constitutes, and each other Loan Document when so delivered will constitute, a legal, valid and binding obligation of
such Loan Party, enforceable against each Loan Party that is party thereto in accordance with its terms. 

        4.05 Financial Statements; No Material Adverse Effect. 

        (a)   The
Audited Financial Statements (i) were prepared in accordance with GAAP consistently applied throughout the period covered thereby, except as otherwise
expressly noted therein; (ii) fairly present the financial condition of the Borrower as of the date thereof and its results of operations for the period covered thereby in accordance with GAAP
consistently applied throughout the period covered thereby, except as otherwise expressly noted therein; and (iii) show all material indebtedness and other liabilities, direct or contingent, of
the Borrower as of the date thereof, including liabilities for taxes, material commitments and Indebtedness. 

        (b)   Since
the date of the Audited Financial Statements, there has been no event or circumstance, either individually or in the aggregate, that has had or could reasonably be
expected to have a Material Adverse Effect. 

9

 

        4.06 Litigation. There are no actions, suits, proceedings, claims or disputes pending or, to the knowledge of the Borrower
after due and diligent investigation, threatened or contemplated, at law, in equity, in arbitration or before any Governmental Authority, by or against the Borrower or any of its Affiliates or against
any of their properties or revenues that (a) purport to affect or pertain to this Agreement or any other Loan Document, or any of the transactions contemplated hereby, or (b) either
individually or in the aggregate, if determined adversely, could reasonably be expected to have a Material Adverse Effect. 

        4.07 No Default. The Borrower is not in default under or with respect to any contractual obligation that could, either
individually or in the aggregate, reasonably be expected to have a Material Adverse Effect. No Default has occurred and is continuing or would result from the consummation of the transactions
contemplated by this Agreement or any other Loan Document. 

        4.08 Ownership of Property; Liens. The Borrower has good record and marketable title in fee simple to, or valid leasehold
interests in, all real property necessary or used in the ordinary conduct of its business, except for such defects in title as could not, individually or in the aggregate, reasonably be expected to
have a Material Adverse Effect. The property of the Borrower is subject to no Liens, other than Liens permitted by Section 6.01. 

        4.09 Insurance. The properties of the Borrower are insured with financially sound and reputable insurance companies not
Affiliates of the Borrower, in such amounts, with such deductibles and covering such risks as are customarily carried by companies engaged in similar businesses and owning similar properties in
localities where the Borrower operates. 

        4.10 Taxes. The Borrower has filed all Federal, state and other material tax returns and reports required to be filed, and
have paid all Federal, state and other material taxes, assessments, fees and other governmental charges levied or imposed upon them or their properties, income or assets otherwise due and payable,
except those which are being contested in good faith by appropriate proceedings diligently conducted and for which adequate reserves have been provided in accordance with GAAP. There is no proposed
tax assessment against the Borrower or any Affiliate that would, if made, have a Material Adverse Effect. 

        4.11 ERISA Compliance. 

        (a)   Each
Plan is in compliance in all material respects with the applicable provisions of ERISA, the Code and other Federal or state Laws. Each Plan that is intended to
qualify under Section 401(a) of the Code has received a favorable determination letter from the United States Internal Revenue Service ("IRS") or an application for such a letter is currently
being processed by the IRS with respect thereto and, to the best knowledge of the Borrower, nothing has occurred which would prevent, or cause the loss of, such qualification. The Borrower and each
ERISA Affiliate have made all required contributions to each Plan subject to Section 412 of the Code, and no application for a funding waiver or an extension of any amortization period pursuant
to Section 412 of the Code has been made with respect to any Plan. 

        (b)   There
are no pending or, to the best knowledge of the Borrower, threatened claims, actions or lawsuits, or action by any Governmental Authority, with respect to any Plan
that could be reasonably be expected to have a Material Adverse Effect. There has been no prohibited transaction or violation of the fiduciary responsibility rules with respect to any Plan that has
resulted or could reasonably be expected to result in a Material Adverse Effect. 

10

 

        (c)   No
ERISA Event has occurred or is reasonably expected to occur; (ii) no Pension Plan has any Unfunded Pension Liability; (iii) neither the Borrower nor any
ERISA Affiliate has incurred, or reasonably expects to incur, any liability under Title IV of ERISA with respect to any Pension Plan (other than premiums due and not delinquent under
Section 4007 of ERISA); (iv) neither the Borrower nor any ERISA Affiliate has incurred, or reasonably expects to incur, any liability (and no event has occurred which, with the giving of
notice under Section 4219 of ERISA, would result in such liability) under Sections 4201 or 4243 of ERISA with respect to a Multiemployer Plan; and (v) neither the Borrower nor any ERISA
Affiliate has engaged in a transaction that could be subject to Sections 4069 or 4212(c) of ERISA. 

        4.12 Subsidiaries. As of the Closing Date, Borrower has no Subsidiaries and has no equity investments in any other
corporation or entity other than as set forth on Schedule 4.12 attached hereto. 

        4.13 Investment Company Act; Public Utility Holding Company Act. 

        (a)   None
of the Borrower, any Person Controlling the Borrower, or any Subsidiary (i) is a "holding company," or a "subsidiary company" of a "holding company," or an
"affiliate" of a "holding company" or of a "subsidiary company" of a "holding company," within the meaning of the Public Utility Holding Company Act of 1935, or (ii) is or is required to be
registered as an "investment company" under the Investment Company Act of 1940. 

        4.14 Disclosure. The Borrower has disclosed to the Lender all agreements, instruments and corporate or other restrictions to
which it or any of its Subsidiaries is subject, and all other matters known to it, that, individually or in the aggregate, could reasonably be expected to result in a Material Adverse Effect. No
report, financial statement, certificate or other information furnished (whether in writing or orally) by or on behalf of any Loan Party to the Lender in connection with the transactions contemplated
hereby and the negotiation of this Agreement or delivered hereunder (as modified or supplemented by other information so furnished) contains any material misstatement of fact or omits to state any
material fact necessary to make the statements therein, in the light of the circumstances under which they were made, not misleading; provided that,
with respect to projected financial information, the Borrower represents only that such information was prepared in good faith based upon assumptions believed to be reasonable at the time. 

        4.15 Compliance with Laws. Borrower is in compliance in all material respects with the requirements of all Laws and all
orders, writs, injunctions and decrees applicable to it or to its properties, except in such instances in which (a) such requirement of Law or order, writ, injunction or decree is being
contested in good faith by appropriate proceedings diligently conducted or (b) the failure to comply therewith, either individually or in the aggregate, could not reasonably be expected to have
a Material Adverse Effect. 

 
 

ARTICLE V
  AFFIRMATIVE COVENANTS    
    

        So long as the Loan shall be in effect or other Obligation hereunder shall remain unpaid or unsatisfied. 

        5.01 Certificates; Other Information. Deliver to the Lender, in form and detail satisfactory to the Lender such information
regarding the business, financial or corporate affairs of the Borrower, or compliance with the terms of the Loan Documents, as the Lender may from time to time reasonably request. 

11

 

        5.02 Notices. Promptly notify the Lender: (a) of the occurrence of any Default; (b) of any matter that has
resulted or could reasonably be expected to result in a Material Adverse Effect, including (i) breach or non-performance of, or any default under, a Contractual Obligation of the
Borrower; (ii) any dispute, litigation, investigation, proceeding or suspension between the Borrower and any Governmental Authority; or (iii) the commencement of, or any material
development in, any litigation or proceeding affecting the Borrower, including pursuant to any applicable Laws; (c) of the occurrence of any ERISA Event; and (d) of any material change
in accounting policies or financial reporting practices by the Borrower. 

        Each
notice pursuant to this Section 5.02 shall be accompanied by a statement of a Responsible Officer of the Borrower setting
forth details of the occurrence referred to therein and stating what action the Borrower has taken and proposes to take with respect thereto. Each notice pursuant to  Section 5.02(a) shall describe
with particularity any and all provisions of this Agreement and any other Loan Document that have been breached.
 

        5.03 Payment of Obligations. Pay and discharge as the same shall become due and payable, all its obligations and liabilities,
including (a) all tax liabilities, assessments and governmental charges or levies upon it or its properties or assets, unless the same are being contested in good faith by appropriate
proceedings diligently conducted and adequate reserves in accordance with GAAP are being maintained by the Borrower; (b) all lawful claims which, if unpaid, would by law become a Lien upon its
property; and (c) all Indebtedness, as and when due and payable, but subject to any subordination provisions contained in any instrument or agreement evidencing such Indebtedness. 

        5.04 Preservation of Existence, Etc. (a) Preserve, renew and maintain in full force and effect its legal existence and
good standing under the Laws of the jurisdiction of its organization except in a Permitted Transaction; (b) take all reasonable action to maintain all rights, privileges, permits, licenses and
franchises necessary or desirable in the normal conduct of its business, except to the extent that failure to do so could not reasonably be expected to have a Material Adverse Effect; and
(c) preserve or renew all of its registered patents, trademarks, trade names and service marks, the non-preservation of which could reasonably be expected to have a Material Adverse
Effect. 

        5.05 Maintenance of Properties. (a) Maintain, preserve and protect all of its material properties and equipment
necessary in the operation of its business in good working order and condition, ordinary wear and tear excepted; and (b) make all necessary repairs thereto and renewals and replacements thereof
except where the failure to do so could not reasonably be expected to have a Material Adverse Effect. 

        5.06 Maintenance of Insurance. Maintain with financially sound and reputable insurance companies not Affiliates of the
Borrower, insurance with respect to its properties and business against loss or damage of the kinds customarily insured against by Persons engaged in the same or similar business, of such types and in
such amounts as are customarily carried under similar circumstances by such other Persons. 

        5.07 Compliance with Laws. Comply in all material respects with the requirements of all Laws and all orders, writs,
injunctions and decrees applicable to it or to its business or property, except in such instances in which (a) such requirement of Law or order, write, injunction or decree is being contested
in good faith by appropriate proceedings diligently conducted; or (b) the failure to comply therewith could not reasonably be expected to have a Material Adverse Effect. 

        5.08 Books and Records. Maintain proper books of record and account, in which full, true and correct entries in conformity
with GAAP consistently applied shall be made of all financial transactions and matters involving the assets and business of the Borrower or such Subsidiary, as the case may be. 

12

 

        5.09 Inspection Rights. Permit representatives and independent contractors of the Lender to examine its company, financial
and operating records, and make copies thereof or abstracts therefrom, and to discuss its affairs, finances and accounts with its directors, officers, and independent public accountants, all at the
expense of the Borrower and at such reasonable times during normal business hours and as often as may be reasonably desired, upon reasonable advance notice to the Borrower;  provided, however, that when an Event of Default exists the Lender (or any of its representatives or
independent contractors) may do any of the foregoing at the expense of the Borrower at any time during normal business hours and without advance notice. 

 
 

ARTICLE VI
  NEGATIVE COVENANTS    
    

        So long as the Loan or other Obligation hereunder shall remain unpaid or unsatisfied, the Borrower shall not, directly or indirectly: 

        6.01 Liens. Create, incur, assume or suffer to exist any Lien upon Borrower's existing General Partner Interest and the
Incentive Distribution Rights (as those terms are defined in that certain First Amended and Restated Agreement of Limited Partnership (the "Partnership Agreement") of Hiland Partners, LP, dated
February 15, 2005) (collectively, the "Interests"), whether now owned or hereafter acquired other than the following: (a) Liens pursuant to any Loan Document; (b) Liens for taxes
not yet due or which are being contested in good faith and by appropriate proceedings diligently conducted, if adequate reserves with respect thereto are maintained on the books of the applicable
Person in accordance with GAAP; (c) carriers', warehousemen's, mechanics', materialmen's, repairmen's or other like Liens arising in the ordinary course of business which are not overdue for a
period of more than 30 days or which are being contested in good faith and by appropriate proceedings diligently conducted, if adequate reserves with respect thereto are maintained on the books
of the applicable Person; (d) pledges or deposits in the ordinary course of business in connection with workers' compensation, unemployment insurance and other social security legislation,
other than any Lien imposed by ERISA; (e) deposits to secure the performance of bids, trade contracts and leases (other than Indebtedness), statutory obligations, surety bonds (other than bonds
related to judgments or litigation), and (f) any Liens that exist or arise pursuant to the terms of the Partnership Agreement, performance bonds and other obligations of a like nature incurred
in the ordinary course of business. 

        6.02 Indebtedness. Create, incur, assume or suffer to exist any Indebtedness, except: (a) Indebtedness under the Loan
Documents; (b) Guarantees of the Borrower in respect of Indebtedness otherwise permitted hereunder of the Borrower; (c) Indebtedness in respect of capital leases and purchase money
obligations for fixed or capital assets; provided, however, that the aggregate amount of all such
Indebtedness at any one time outstanding shall not exceed $25,000.00; (d) unsecured Indebtedness in an aggregate principal amount not to exceed $25,000.00 at any time outstanding; and
(e) Indebtedness of Borrower to Hiland LP or its subsidiaries. 

        6.03 Fundamental Changes. Merge, dissolve, liquidate, consolidate with or into another Person, or Dispose of (whether in one
transaction or in a series of transactions) all or substantially all of its assets (whether now owned or hereafter acquired) to or in favor of any Person, except that, so long as no Default exists or
would result therefrom Borrower may enter into any Permitted Transaction. This Section 6.03 does not prohibit the Borrower from making a Disposition of any equity interests in Hiland Partners,
LP, other than the Interests. 

13

 

        6.04 Dispositions. Except as set forth below, make any Disposition or enter into any agreement to make any Disposition of any
asset, except: (a) Dispositions of obsolete or worn out property, whether now owned or hereafter acquired, in the ordinary course of business; (b) Dispositions of inventory in the
ordinary course of business; (c) Dispositions of equipment or real property to the extent that (i) such property is exchanged for credit against the purchase price of similar replacement
property or (ii) the proceeds of such Disposition are reasonably promptly applied to the purchase price of such replacement property; (d) Dispositions of property by any Subsidiary to
the Borrower or to a wholly-owned Subsidiary; provided that if the transferor of such property is a Guarantor, the transferee thereof must either be the
Borrower or a Guarantor; and (e) Dispositions pursuant to a Permitted Transaction. This Section 6.04 does not prohibit the Borrower from making a Disposition of any equity interest in
Hiland Partners, LP, other than the Interests 

        6.05 Change in Nature of Business. Engage in any material line of business substantially different from those lines of
business conducted by the Borrower and its Subsidiaries on the date hereof or any business substantially related or incidental thereto. 

        6.06 Transactions with Affiliates. Enter into any transaction of any kind with any Affiliate (other than Hiland LP or any of
its Subsidiaries) of the Borrower, whether or not in the ordinary course of business, other than on fair and reasonable terms substantially as favorable to the Borrower or such Subsidiary as would be
obtainable by the Borrower or such Subsidiary at the time in a comparable arm's length transaction with a Person other than an Affiliate. 

        6.07 Hiland Partners, LP and its Subsidiaries. Notwithstanding the forgoing, the restrictions set forth in this
Article VI shall not in any way restrict or apply to any action taken by Hiland LP or any of its Subsidiaries. 

 
 

ARTICLE VII
  EVENTS OF DEFAULT AND REMEDIES    
    

        7.01 Events of Default. Any of the following shall constitute an Event of Default: 

        (a)   Non-Payment. The Borrower or any other Loan Party fails to pay (i) when and as required to be paid
herein, any amount of principal of any Loan, or (ii) within three days after the same becomes due, any interest on any Loan, or any commitment or other fee due hereunder, or (iii) within
five days after the same becomes due, any other amount payable hereunder or under any other Loan Document; or 

        (b)   Specific Covenants. The Borrower fails to perform or observe any term, covenant or agreement contained in  Article VI and such failure could reasonably be expected
to have, individually or in the aggregate, a Material Adverse Effect, and such failure
continues for thirty (30) days after written notice is received by such Loan Party of the Event of Default; or 

        (c)   Other Defaults. Any Loan Party fails to perform or observe any other covenant or agreement (not specified in subsection
(a) or (b) above) contained in any Loan Document on its part to be performed or observed and such failure continues for thirty (30) days after written notice is received by such
Loan Party of the Event of Default, and such failure could reasonably be expected to have, individually or in the aggregate, a Material Adverse Effect; or 

        (d)   Representations and Warranties. Any representation, warranty, certification or statement of fact made or deemed made by
or on behalf of the Borrower or any other Loan Party herein, in any other Loan Document, or in any document delivered in connection herewith or therewith shall be incorrect or misleading when made or
deemed made, the breach of which could reasonably be expected to have, individually or in the aggregate, a Material Adverse Effect, unless the representation, warranty, certification or statement of
fact is already limited by the concept of a Material Adverse Effect; or 

14

 

        (e)   Cross-Default. The Borrower (A) fails to make any payment when due (whether by scheduled maturity, required
prepayment, acceleration, demand, or otherwise) in respect of any Indebtedness or Guarantee (other than Indebtedness hereunder), or (B) fails to observe or perform any other agreement or
condition relating to any such Indebtedness or Guarantee or contained in any instrument or agreement evidencing, securing or relating thereto, or any other event occurs, the effect of which default or
other event is to cause, or to permit the holder or holders of such Indebtedness or the beneficiary or beneficiaries of such Guarantee (or a trustee or agent on behalf of such holder or holders or
beneficiary or beneficiaries) to cause, with the giving of notice if required, such Indebtedness to be demanded or to become due or to be repurchased, prepaid, defeased or redeemed (automatically or
otherwise), or an offer to repurchase, prepay, defease or redeem such Indebtedness to be made, prior to its stated maturity, or such Guarantee to become payable or cash collateral in respect thereof
to be demanded, and such failures could reasonably be expected to have, individually or in the aggregate, a Material Adverse Effect; or 

        (f)    Insolvency Proceedings, Etc. Any Loan Party or any of its Subsidiaries institutes or consents to the institution of any
proceeding under any Debtor Relief Law, or makes an assignment for the benefit of creditors; or applies for or consents to the appointment of any receiver, trustee, custodian, conservator, liquidator,
rehabilitator or similar officer for it or for all or any material part of its property; or any receiver, trustee, custodian, conservator, liquidator, rehabilitator or similar officer is appointed
without the application or consent of such Person and the appointment continues undischarged or unstayed for 60 calendar days; or any proceeding under any Debtor Relief Law relating to any such Person
or to all or any material part of its property is instituted without the consent of such Person and continues undismissed or unstayed for 60 calendar days, or an order for relief is entered in any
such proceeding; or 

        (g)   Inability to Pay Debts; Attachment. (i) The Borrower becomes unable or admits in writing its inability or fails
generally to pay its debts as they become due, or (ii) any writ or warrant of attachment or execution or similar process is issued or levied against all or any material part of the property of
any such Person and is not released, vacated or fully bonded within 30 days after its issue or levy; or 

        (h)   Judgments. There is entered against the Borrower (i) a final judgment or order for the payment of money in an
aggregate amount (to the extent not covered by independent third-party insurance as to which the insurer does not dispute coverage) that has, or could reasonably be expected to have, individually or
in the aggregate, a Material Adverse Effect, or (ii) any one or more non-monetary final judgments that have, or could reasonably be expected to have, individually or in the
aggregate, a Material Adverse Effect and, in either case, (A) enforcement proceedings are commenced by any creditor upon such judgment or order, or (B) there is a period of 10
consecutive days during which a stay of enforcement of such judgment, by reason of a pending appeal or otherwise, is not in effect; or 

        (i)    ERISA. (i) An ERISA Event occurs with respect to a Pension Plan or Multiemployer Plan which has resulted or could
reasonably be expected to result in liability of the Borrower under Title IV of ERISA to the Pension Plan, Multiemployer Plan or the PBGC in an aggregate amount in excess of $10,000.00, or
(ii) the Borrower or any ERISA Affiliate fails to pay when due, after the expiration of any applicable grace period, any installment payment with respect to its withdrawal liability under
Section 4201 of ERISA under a Multiemployer Plan in an aggregate amount which has resulted or could reasonably be expected to have, individually or in the aggregate, a Material Adverse Effect;
or 

        (j)    Hiland Operating Default. The occurrence of any Event of Default and the expiration of any applicable periods to cure
such Event of Default under the Hiland Operating Credit Agreement. 

15

 

        (k)   Invalidity of Loan Documents. Any Loan Document, at any time after its execution and delivery and for any reason other
than as expressly permitted hereunder or satisfaction in full of all the Obligations, ceases to be in full force and effect; or any Loan Party or any other Person contests in any manner the validity
or enforceability of any Loan Document; or any Loan Party denies that it has any or further liability or obligation under any Loan Document, or purports to revoke, terminate or rescind any Loan
Document. 

        7.02 Remedies Upon Event of Default. If any Event of Default occurs and is continuing, the Lender may take any or all of the
following actions: 

        (a)   declare
the unpaid principal amount of the Loan, all interest accrued and unpaid thereon, and all other amounts owing or payable hereunder or under any other Loan
Document to be immediately due and payable, without presentment, demand, protest or other notice of any kind, all of which are hereby expressly waived by the Borrower; or 

        (b)   exercise
all rights and remedies available to it under the Loan Documents or applicable law; 

provided, however, that upon the occurrence of an actual or deemed entry of an order for relief with
respect to the Borrower under the Bankruptcy Code of the United States, the unpaid principal amount of all outstanding Loans and all interest and other amounts as aforesaid shall automatically become
due and payable, without further act of the Lender. 

        7.03 Application of Funds. After the exercise of remedies provided for in  Section 7.02 (or after the Loan has automatically become immediately due and payable
any amounts received on account of the Obligations shall be
applied by the Lender in such order as it elects in its sole discretion. 

 
 

ARTICLE VIII
  MISCELLANEOUS    
    

        8.01 Amendments; Etc. No amendment or waiver of any provision of this Agreement or any other Loan Document, and no consent to
any departure by the Borrower or any other Loan Party therefrom, shall be effective unless in writing signed by the Lender and the Borrower or the applicable Loan Party, as the case may be, and each
such waiver or consent shall be effective only in the specific instance and for the specific purpose for which given. 

16

 

        8.02 Notices and Other Communications; Facsimile Copies. 

        (a)   General. Unless otherwise expressly provided herein, all notices and other communications provided for hereunder shall be
in writing (including by facsimile transmission). All such written notices shall be mailed, faxed or delivered to the address, facsimile number or (subject to subsection (c) below) electronic
mail address specified for notices to the applicable party on Schedule 8.02; or to such other address, facsimile number or electronic mail
address as shall be designated by such party in a notice to the other party. All notices and other communications expressly permitted hereunder to be given by telephone shall be made to the telephone
number specified for notices to the applicable party on Schedule 8.02, or to such other telephone number as shall be designated by such party in
a notice to the other party. All such notices and other communications shall be deemed to be given or made upon the earlier to occur of (i) actual receipt by the relevant party hereto and
(ii) (A) if delivered by hand or by courier, when signed for by or on behalf of the relevant party hereto; (B) if delivered by mail, four Business Days after deposit in the mails,
postage prepaid; (C) if delivered by facsimile, when sent and receipt has been confirmed by telephone; and (D) if delivered by electronic mail (which form of delivery is subject to the
provisions of subsection (c) below), when delivered; provided, however, that notices and other
communications to the Lender pursuant to Article II shall not be effective until actually received by the Lender. In no event shall a voicemail
message be effective as a notice, communication or confirmation hereunder. 

        (b)   Effectiveness of Facsimile Documents and Signatures. Loan Documents may be transmitted and/or signed by facsimile. The
effectiveness of any such documents and signatures shall, subject to applicable Law, have the same force and effect as manually-signed originals and shall be binding on all Loan Parties and the
Lender. The Lender may also require that any such documents and signatures be confirmed by a manually-signed original thereof; provided,  however, that the
failure to request or deliver the same shall not limit the effectiveness of any facsimile document or signature. 

        (c)   Limited Use of Electronic Mail. Electronic mail and Internet and intranet websites may be used only to distribute routine
communications, such as financial statements and other information and to distribute Loan Documents for execution by the parties thereto, and may not be used for any other purpose. 

        (d)   Reliance by Lender. The Lender shall be entitled to rely and act upon any notices purportedly given by or on behalf of
the Borrower even if (i) such notices were not made in a manner specified herein, were incomplete or were not preceded or followed by any other form of notice specified herein, or
(ii) the terms thereof, as understood by the recipient, varied from any confirmation thereof. The Borrower shall indemnify the Lender, its Affiliates, and their respective officers, directors,
employees, agents and attorneys-in-fact from all losses, costs, expenses and liabilities resulting from the reliance by such Person on each notice purportedly given by or on
behalf of the Borrower. All telephonic notices to and other communications with the Lender may be recorded by the Lender, and the Borrower hereby consents to such recording. 

        8.03 No Waiver; Cumulative Remedies. No failure by the Lender to exercise, and no delay by the Lender in exercising, any
right, remedy, power or privilege hereunder shall operate as a waiver thereof; nor shall any single or partial exercise of any right, remedy, power or privilege hereunder preclude any other or further
exercise thereof or the exercise of any other right, remedy, power or privilege. The rights, remedies, powers and privileges herein provided are cumulative and not exclusive of any rights, remedies,
powers and privileges provided by law. 

17

 

        8.04 Attorney Costs, Expenses and Taxes. The Borrower agrees (a) to pay or reimburse the Lender for all reasonable
costs and expenses incurred in connection with the development, preparation, negotiation and execution of this Agreement and the other Loan Documents and any amendment, waiver, consent or other
modification of the provisions hereof and thereof (whether or not the transactions contemplated hereby or thereby are consummated), and the consummation and administration of the transactions
contemplated hereby and thereby, including all Attorney Costs, and (b) to pay or reimburse the Lender for all reasonable costs and expenses incurred in connection with the enforcement,
attempted enforcement, or preservation of any rights or remedies under this Agreement or the other Loan Documents (including all such costs and expenses incurred during any "workout" or restructuring
in respect of the Obligations and during any legal proceeding, including any proceeding under any Debtor Relief Law), including all Attorney Costs. The foregoing costs and expenses shall include all
reasonable search, filing, recording, title insurance and appraisal charges and fees and taxes related thereto, and other out-of-pocket expenses incurred by the Lender and the
cost of independent public accountants and other outside experts retained by the Lender. All amounts due under this Section 8.04 shall be payable
within ten Business Days after demand therefor. The agreements in this Section shall survive the termination of the Loan and repayment, satisfaction or discharge of all other Obligations. 

        8.05 Indemnification by the Borrower. Whether or not the transactions contemplated hereby are consummated, the Borrower shall
indemnify and hold harmless the Lender, its Affiliates, and their respective directors, officers, employees, counsel, agents and attorneys-in-fact (collectively the
"Indemnitees") from and against any and all liabilities, obligations, losses, damages, penalties, claims, demands, actions, judgments, suits, costs,
expenses and disbursements (including Attorney Costs) of any kind or nature whatsoever which may at any time be imposed on, incurred by or asserted against any such Indemnitee in any way relating to
or arising out of or in connection with (a) the execution, delivery, enforcement, performance or administration of any Loan Document or any other agreement, letter or instrument delivered in
connection with the transactions contemplated thereby or the consummation of the transactions contemplated thereby, (b) theLoan, any Loan or (c) any actual or prospective claim,
litigation, investigation or proceeding relating to any of the foregoing, whether based on contract, tort or any other theory (including any investigation of, preparation for, or defense of any
pending or threatened claim, investigation, litigation or proceeding) and regardless of whether any Indemnitee is a party thereto (all the foregoing, collectively, the
"Indemnified Liabilities")[, in all cases, whether or not caused by or arising, in whole or in part, out of the negligence of the
Indemnitee]; provided that such indemnity shall not, as to any Indemnitee, be available to the extent that such liabilities, obligations,
losses, damages, penalties, claims, demands, actions, judgments, suits, costs, expenses or disbursements are determined by a court of competent jurisdiction by final and nonappealable judgment to have
resulted from the gross negligence or willful misconduct of such Indemnitee. No Indemnitee shall have any liability for any indirect or consequential damages relating to this Agreement or any other
Loan Document or arising out of its activities in connection herewith or therewith (whether before or after the Closing Date). All amounts due under this Section  8.05 shall be payable within ten
Business Days after demand therefor. The agreements in this Section shall survive the termination of the Loan and the
repayment, satisfaction or discharge of all the other Obligations. 

        8.06 Payments Set Aside. To the extent that any payment by or on behalf of the Borrower is made to the Lender, or the Lender
exercises its right of set-off, and such payment or the proceeds of such set-off or any part thereof is subsequently invalidated, declared to be fraudulent or preferential, set
aside or required (including pursuant to any settlement entered into by the Lender in its discretion) to be repaid to a trustee, receiver or any other party, in connection with any proceeding under
any Debtor Relief Law or otherwise, then, to the extent of such recovery, the Obligation or part thereof originally intended to be satisfied shall be revived and continued in full force and effect as
if such payment had not been made or such set-off had not occurred. 

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        8.07 Successors and Assigns. 

        (a)   The
provisions of this Agreement shall be binding upon and inure to the benefit of the parties hereto and their respective successors and assigns permitted hereby,
except that the Borrower may not assign or otherwise transfer any of its rights or obligations hereunder without the prior written consent of the Lender and the Lender may not assign or otherwise
transfer any of its rights or obligations hereunder except (i) to an Eligible Assignee in accordance with the provisions of subsection (b) of this Section, (ii) by way of
participation in accordance with the provisions of subsection (c) of this Section, or (iii) by way of pledge or assignment of a security interest subject to the restrictions of
subsection (e) of this Section (and any other attempted assignment or transfer by any party hereto shall be null and void). Nothing in this Agreement, expressed or implied, shall be construed
to confer upon any Person (other than the parties hereto, their respective successors and assigns permitted hereby, Participants to the extent provided in subsection (c) of this Section and, to
the extent expressly contemplated hereby, the Indemnitees) any legal or equitable right, remedy or claim under or by reason of this Agreement. 

        (b)   The
Lender may at any time assign to one or more Eligible Assignees all or a portion of its rights and obligations under this Agreement (including all or a portion of
the Loan at the time owing to it) pursuant to documentation acceptable to the Lender and the assignee. From and after the effective date specified in such documentation, such Eligible Assignee shall
be a party to this Agreement and, to the extent of the interest assigned by the Lender, have the rights and obligations of the Lender under this Agreement, and the Lender shall, to the extent of the
interest so assigned, be released from its obligations under this Agreement (and, in the case of an assignment of all of the Lender's rights and obligations under this Agreement, shall cease to be a
party hereto but shall continue to be entitled to the benefits of Sections 8.04 and 8.05 with respect to
facts and circumstances occurring prior to the effective date of such assignment, and shall continue to have all of the rights provided hereunder to the Lender in its capacity as issuer of any Letters
of Credit outstanding at the time of such assignment). Upon request, the Borrower (at its expense) shall execute and deliver new or replacement Notes to the Lender and the assignee, and shall execute
and deliver any other documents reasonably necessary or appropriate to give effect to such assignment and to provide for the administration of this Agreement after giving effect thereto. 

        (c)   The
Lender may at any time, without the consent of, or notice to, the Borrower, sell participations to any Person (other than a natural person or the Borrower or any of
the Borrower's Affiliates or Subsidiaries) (each, a "Participant") in all or a portion of the Lender's rights and/or obligations under this Agreement
(including all or a portion of its Commitment and/or the Loans; provided that (i) the Lender's obligations under this Agreement shall remain
unchanged, (ii) the Lender shall remain solely responsible to the Borrower for the performance of such obligations and (iii) the Borrower shall continue to deal solely and directly with
the Lender in connection with the Lender's rights and obligations under this Agreement. Any agreement or instrument pursuant to which the Lender sells such a participation shall provide that the
Lender shall retain the sole right to enforce this Agreement and to approve any amendment, modification or waiver of any provision of this Agreement;  provided that such agreement or instrument may
provide that the Lender will not, without the consent of the Participant, agree to any amendment, waiver
or other modification that would (i) postpone any date upon which any payment of money is scheduled to be made to such Participant, or (ii) reduce the principal, interest, fees or other
amounts payable to such Participant. To the extent permitted by law, each Participant also shall be entitled to the benefits of Section 8.09 as
though it were the Lender. 

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        (d)   The
Lender may at any time pledge or assign a security interest in all or any portion of its rights under this Agreement (including under the Note, if any) to secure
obligations of the Lender, including any pledge or assignment to secure obligations to a Federal Reserve Bank; provided that no such pledge or
assignment shall release the Lender from any of its obligations hereunder or substitute any such pledgee or assignee for the Lender as a party hereto. 

        (e)   As
used herein, the following terms have the following meanings: 

        "Eligible Assignee" means (a) an Affiliate of the Lender; (b) an Approved Fund; and (c) any other Person (other than
a natural person) approved by the Borrower (such approval not to be unreasonably withheld or delayed); provided that no such approval shall be required
if an Event of Default has occurred and is continuing. 

        "Fund" means any Person (other than a natural person) that is (or will be) engaged in making, purchasing, holding or otherwise investing
in commercial loans and similar extensions of credit in the ordinary course of its business. 

        "Approved Fund" means any Fund that is administered or managed by (a) the Lender or (b) an Affiliate of the Lender. 

        8.08 Confidentiality. The Lender agrees to maintain the confidentiality of the Information (as defined below), except that
Information may be disclosed (a) to its and its Affiliates' directors, officers, employees and agents, including accountants, legal counsel and other advisors (it being understood that the
Persons to whom such disclosure is made will be informed of the confidential nature of such Information and instructed to keep such Information confidential); (b) to the extent requested by any
regulatory authority; (c) to the extent required by applicable laws or regulations or by any subpoena or similar legal process; (d) to any other party to this Agreement; (e) in
connection with the exercise of any remedies hereunder or any suit, action or proceeding relating to this Agreement or the enforcement of rights hereunder; (f) subject to an agreement
containing provisions substantially the same as those of this Section, to (i) any Eligible Assignee of or Participant in, or any prospective Eligible Assignee of or Participant in, any of its
rights or obligations under this Agreement or (ii) any direct or indirect contractual counterparty or prospective counterparty (or such contractual counterparty's or prospective counterparty's
professional advisor) to any credit derivative transaction relating to obligations of the Loan Parties; (g) with the consent of the Borrower; or (h) to the extent such Information
(i) becomes publicly available other than as a result of a breach of this Section or (ii) becomes available to the Lender on a nonconfidential basis from a source other than the
Borrower. In addition, the Lender may disclose the existence of this Agreement and information about this Agreement to market data collectors, similar service providers to the lending industry, and
service providers to the Lender in connection with the administration and management of this Agreement and the other Loan Documents,. For the purposes of this Section,
"Information" means all information received from any Loan Party relating to any Loan Party or its business, other than any such information that is
available to the Lender on a nonconfidential basis prior to disclosure by any Loan Party; provided that, in the case of information received from a Loan
Party after the date hereof, such information is clearly identified in writing at the time of delivery as confidential. Any Person required to maintain the confidentiality of Information as provided
in this Section shall be considered to have complied with its obligation to do so if such Person has exercised the same degree of care to maintain the confidentiality of such Information as such
Person would accord to its own confidential information. 

20

 

        8.09 Set-off. In addition to any rights and remedies of the Lender provided by law, upon the occurrence and
during the continuance of any Event of Default, the Lender is authorized at any time and from time to time, without prior notice to the Borrower or any other Loan Party, any such notice being waived
by the Borrower (on its own behalf and on behalf of each Loan Party) to the fullest extent permitted by law, to set off and apply any and all deposits (general or special, time or demand, provisional
or final) at any time held by, and other indebtedness at any time owing by, the Lender to or for the credit or the account of the respective Loan Parties against any and all Obligations owing to the
Lender hereunder or under any other Loan Document, now or hereafter existing, irrespective of whether or not the Lender shall have made demand under this Agreement or any other Loan Document and
although such Obligations may be contingent or unmatured or denominated in a currency different from that of the applicable deposit or indebtedness. The Lender agrees promptly to notify the Borrower
after any such set-off and application; provided, however, that the failure to give such
notice shall not affect the validity of such set-off and application. 

        8.10 Interest Rate Limitation. Notwithstanding anything to the contrary contained in any Loan Document, the interest paid or
agreed to be paid under the Loan Documents shall not exceed the maximum rate of non-usurious interest permitted by applicable Law (the "Maximum
Rate"). If the Lender shall receive interest in an amount that exceeds the Maximum Rate, the excess interest shall be applied to the principal of the Loans or, if it exceeds
such unpaid principal, refunded to the Borrower. In determining whether the interest contracted for, charged, or received by the Lender exceeds the Maximum Rate, the Lender may, to the extent
permitted by applicable Law, (a) characterize any payment that is not principal as an expense, fee, or premium rather than interest, (b) exclude voluntary prepayments and the effects
thereof, and (c) amortize, prorate, allocate, and spread in equal or unequal parts the total amount of interest throughout the contemplated term of the Obligations hereunder. 

        8.11 Counterparts. This Agreement may be executed in one or more counterparts, each of which shall be deemed an original, but
all of which together shall constitute one and the same instrument. 

        8.12 Integration. This Agreement, together with the other Loan Documents, comprises the complete and integrated agreement of
the parties on the subject matter hereof and thereof and supersedes all prior agreements, written or oral, on such subject matter. In the event of any conflict between the provisions of this Agreement
and those of any other Loan Document, the provisions of this Agreement shall control; provided that the inclusion of supplemental rights or remedies in
favor of the Lender in any other Loan Document shall not be deemed a conflict with this Agreement. Each Loan Document was drafted with the joint participation of the respective parties thereto and
shall be construed neither against nor in favor of any party, but rather in accordance with the fair meaning thereof. 

        8.13 Survival of Representations and Warranties. All representations and warranties made hereunder and in any other Loan
Document or other document delivered pursuant hereto or thereto or in connection herewith or therewith shall survive the execution and delivery hereof and thereof. Such representations and warranties
have been or will be relied upon by the Lender, regardless of any investigation made by the Lender or on its behalf and notwithstanding that the Lender may have had notice or knowledge of any Default
at the time of any Credit Extension, and shall continue in full force and effect as long as any Loan or any other Obligation hereunder shall remain unpaid or unsatisfied. 

21

 

        8.14 Severability. If any provision of this Agreement or the other Loan Documents is held to be illegal, invalid or
unenforceable, (a) the legality, validity and enforceability of the remaining provisions of this Agreement and the other Loan Documents shall not be affected or impaired thereby and
(b) the parties shall endeavor in good faith negotiations to replace the illegal, invalid or unenforceable provisions with valid provisions the economic effect of which comes as close as
possible to that of the illegal, invalid or unenforceable provisions. The invalidity of a provision in a particular jurisdiction shall not invalidate or render unenforceable such provision in any
other jurisdiction. 

        8.15 Governing Law. 

        (a)   THIS
AGREEMENT SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAW OF THE STATE OF OKLAHOMA APPLICABLE TO AGREEMENTS MADE AND TO BE PERFORMED ENTIRELY WITHIN
SUCH STATE; PROVIDED THAT THE LENDER SHALL RETAIN ALL RIGHTS ARISING UNDER FEDERAL LAW. 

        (b)   ANY
LEGAL ACTION OR PROCEEDING WITH RESPECT TO THIS AGREEMENT OR ANY OTHER LOAN DOCUMENT MAY BE BROUGHT IN THE COURTS OF THE STATE OF OKLAHOMA SITTING IN OKLAHOMA COUNTY
OR OF THE UNITED STATES FOR THE NORTHERN DISTRICT OF SUCH STATE, AND BY EXECUTION AND DELIVERY OF THIS AGREEMENT, THE BORROWER AND THE LENDER EACH CONSENTS, FOR ITSELF AND IN RESPECT OF ITS PROPERTY,
TO THE NON-EXCLUSIVE JURISDICTION OF THOSE COURTS. THE BORROWER AND THE LENDER EACH IRREVOCABLY WAIVES ANY OBJECTION, INCLUDING ANY OBJECTION TO THE LAYING OF VENUE OR BASED ON THE GROUNDS
OF FORUM NON CONVENIENS, WHICH IT MAY NOW OR HEREAFTER HAVE TO THE BRINGING OF ANY ACTION OR PROCEEDING IN SUCH JURISDICTION IN RESPECT OF ANY LOAN
DOCUMENT OR OTHER DOCUMENT RELATED THERETO. THE BORROWER AND THE LENDER EACH WAIVES PERSONAL SERVICE OF ANY SUMMONS, COMPLAINT OR OTHER PROCESS, WHICH MAY BE MADE BY ANY OTHER MEANS PERMITTED BY THE
LAW OF SUCH STATE. 

        8.16 Waiver of Right to Trial by Jury. EACH PARTY TO THIS AGREEMENT HEREBY EXPRESSLY WAIVES ANY RIGHT TO TRIAL BY JURY OF ANY
CLAIM, DEMAND, ACTION OR CAUSE OF ACTION ARISING UNDER ANY LOAN DOCUMENT OR IN ANY WAY CONNECTED WITH OR RELATED OR INCIDENTAL TO THE DEALINGS OF THE PARTIES HERETO OR ANY OF THEM WITH RESPECT TO ANY
LOAN DOCUMENT, OR THE TRANSACTIONS RELATED THERETO, IN EACH CASE WHETHER NOW EXISTING OR HEREAFTER ARISING, AND WHETHER FOUNDED IN CONTRACT OR TORT OR OTHERWISE; AND EACH PARTY HEREBY AGREES AND
CONSENTS THAT ANY SUCH CLAIM, DEMAND, ACTION OR CAUSE OF ACTION SHALL BE DECIDED BY COURT TRIAL WITHOUT A JURY, AND THAT ANY PARTY TO THIS AGREEMENT MAY FILE AN ORIGINAL COUNTERPART OR A COPY OF THIS
SECTION WITH ANY COURT AS WRITTEN EVIDENCE OF THE CONSENT OF THE SIGNATORIES HERETO TO THE WAIVER OF THEIR RIGHT TO TRIAL BY JURY. 

        8.17 Time of the Essence. Time is of the essence of the Loan Documents. 

        8.18 ENTIRE AGREEMENT. THIS AGREEMENT AND THE OTHER LOAN DOCUMENTS REPRESENT THE FINAL AGREEMENT BETWEEN THE PARTIES AND MAY NOT BE CONTRADICTED BY
EVIDENCE OF PRIOR, CONTEMPORANEOUS, OR SUBSEQUENT ORAL AGREEMENTS OF THE PARTIES. THERE ARE NO UNWRITTEN ORAL AGREEMENTS BETWEEN THE PARTIES.  

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        IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly executed as of the date first above
written. 

	

 	
 	
BORROWER:
	

 	
 	

HILAND PARTNERS GP, LLC,

a Delaware limited liability company
	

 	
 	

By:	
 	

/s/  RANDY MOEDER      

	 	 	Name: Randy Moeder

Title: Chief Executive Officer and President
	

 	
 	
LENDER:
	

 	
 	

MIDFIRST BANK, a federally chartered savings association
	

 	
 	

By:	
 	

/s/  JAMES P. BOGGS      

	 	 	Name: James P. Boggs

Title: Senior Vice President

QuickLinks

TABLE OF CONTENTS

CREDIT AGREEMENT

ARTICLE I DEFINITIONS AND ACCOUNTING TERMS

ARTICLE II THE COMMITMENT AND CREDIT EXTENSIONS

ARTICLE III CONDITIONS PRECEDENT TO CREDIT EXTENSIONS

ARTICLE IV REPRESENTATIONS AND WARRANTIES

ARTICLE V AFFIRMATIVE COVENANTS

ARTICLE VI NEGATIVE COVENANTS

ARTICLE VII EVENTS OF DEFAULT AND REMEDIES

ARTICLE VIII MISCELLANEOUS

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