Unassociated Document


    
      

        
          	
                  EXHIBIT
                    10.20

                	
                  FINAL
                    EXECUTION VERSION

                
	 	
                  06/12/08

                
	 	 


        

      

      FORBEARANCE
        AGREEMENT AND AMENDMENT NO. 1

      TO
        SECOND LIEN TERM LOAN AGREEMENT

       

      THIS
        FORBEARANCE AGREEMENT AND AMENDMENT NO. 1 TO SECOND LIEN TERM LOAN AGREEMENT
        (this “Agreement”),
        dated
        as of June 2, 2008, is among Aurora Oil & Gas Corporation, a Utah
        corporation (the “Borrower”),
        BNP
        PARIBAS, as administrative agent for the Lenders (in such capacity together
        with
        any successors thereto, the “Administrative
        Agent”),
        and
        the Lenders.

       

      RECITALS

       

      WHEREAS,
        the Borrower, the Administrative Agent and the Lenders entered into that
        certain
        Second Lien Term Loan Agreement, dated as of August 20, 2007 (together with
        all
        amendments, restatements, supplements or other modifications from time to
        time
        made thereto, the “Loan
        Agreement”),
        pursuant to which the Lenders have made Loans to the Borrower; 

       

      WHEREAS,
        the Borrower has notified the Administrative Agent that it has suffered certain
        identified Defaults or Events of Default and failed or may shortly fail to
        comply with certain covenants set forth in the Loan Agreement, with the result
        being that certain identified Defaults or Events of Default have occurred
        or may
        occur and be continuing under the Loan Agreement;

       

      WHEREAS,
        the Borrower has requested that the Administrative Agent and the Lenders
        (1)
        permanently waive certain identified Events of Default, and (2) forbear and
        not
        waive, but instead refrain from exercising any available rights and remedies
        in
        respect of certain other potential identified Defaults or Events of Default,
        and
        the Administrative Agent and the Lenders are willing to do so but only on
        the
        terms, conditions and limitations hereinafter set forth;

       

      WHEREAS,
        the Borrower, Hudson Pipeline & Processing Co., LLC (the “Guarantor”),
        the
        Administrative Agent and the Lenders also intend to amend the Loan Agreement
        as
        hereinafter set forth;

       

      NOW,
        THEREFORE, in consideration of the foregoing, the mutual agreements herein
        contained and for other good and valuable consideration, the receipt and
        sufficiency of which are hereby acknowledged, the parties hereby agree as
        follows:

       

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

       

      SECTION
        1.  DEFINED
        TERMS.
        

       

      Unless
        expressly defined herein, all defined terms used herein shall have the same
        meanings as set forth in the Loan Agreement. Section references are to sections
        in the Loan Agreement unless otherwise noted.

       

      SECTION
        2.  WAIVER
        AND CONSENT. 

       

      2.1  Waiver
        of Defaults.
        The
        Borrower has informed the Administrative Agent and the Lenders that it has
        failed to comply with the financial covenant in Section 9.01(b) for the period
        ending prior to and including March 31, 2008. In addition, the Borrower has
        informed the Administrative Agent and the Lenders that it has failed to achieve
        daily production required in Section 8.18 as of March 31, 2008. The Borrower
        hereby requests, and the Lenders hereby do, permanently waive any Default
        or
        Event of Default under Section 10.01(d) and (e) resulting from the
        non-compliance with Sections 9.01(b) and 8.18 for any date of determination
        occurring on or prior to and including March 31, 2008 (such Defaults and
        Events
        of Default being referred to herein as the “Waived
        Defaults”).
        The
        waiver in this Section 2.1 is limited to the Waived Defaults and shall not
        be
        construed as a waiver of any Defaults or Events of Default under such Sections
        of the Loan Agreement for any periods other than those specified herein and
        shall not apply to any other Defaults or Events of Default that may exist
        or
        arise later.

       

      2.2  Consent
        to Sale of Woodford Shale Oil and Gas Properties.
        Subject
        to compliance with the following sentence, the Lenders hereby consent under
        Section 9.12 to the sale of certain Oil and Gas Properties located in Cleveland,
        Pottawatomie and McClain Counties in Oklahoma which do not contain any Proved
        Reserves as of the date of this Agreement and which are commonly known as
        the
        Woodford Shale (the “Woodford
        Shale Oil and Gas Properties”)
        or all
        of the Equity Interests of the Wholly-Owned Subsidiary owning the Woodford
        Shale
        Oil and Gas Properties (and which owns no other Properties other than Properties
        ancillary thereto); provided that (a) no Default or Event of Default under
        any
        Section of the Loan Agreement (other than the Designated Defaults or the
        Waived
        Defaults) exists at the time of such sale, and (b) such sale is substantially
        all cash and results in a gross cash amount in excess of the aggregate purchase
        price paid for the Woodford Shale Oil and Gas Properties. In the event the
        Borrower sells all or any material portion of the Woodford Shale Oil and
        Gas
        Properties (or the Equity Interests in the Wholly-Owned Subsidiary owning
        such
        Properties), the Borrower will, on the next Business Day after it receives
        any
        cash proceeds associated therewith, use 50% of the net cash proceeds to prepay
        Loans outstanding under the Senior Revolving Credit Agreement, including
        any
        Borrowing Base Deficiency, to be applied in accordance with Section 3.04
        of the
        Senior Revolving Credit Agreement, as such section may be modified by certain
        Forbearance Agreement and Amendment No. 1 to Credit Agreement related to
        the
        Senior Revolving Credit Agreement.

       

      SECTION
        3.  FORBEARANCE.

       

      3.1  Acknowledgement
        of Designated Defaults.
        The
        Borrower and the Guarantor acknowledge and agree as follows: 

       

      
        
          
          

        

        
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      (a)  the
        Borrower is or may be in default of, is or may be in or breach of or has
        failed
        or may fail to comply with certain covenants contained in the Loan Documents,
        as
        and to the extent further described on Schedule I attached hereto (such defaults
        being collectively referred to herein as the “Designated
        Defaults”);
        and

       

      (b)  the
        Majority Lenders in accordance with, and subject to, the terms of the Loan
        Documents have the right to accelerate the Loans outstanding under the Loan
        Agreement and to make demands upon the Borrower and the Guarantor for the
        payment in full of the Indebtedness for the Designated Defaults.

       

      3.2  Agreement
        to Standstill.
        

       

      (a)  The
        Administrative Agent, for itself and on behalf of the Lenders, agrees, subject
        to the complete satisfaction of the conditions precedent set forth in Section
        6
        hereof, to forbear and refrain during the period from June 2, 2008, until
        and
        including August 15, 2008 (the “Standstill
        Period”)
        from
        (i) accelerating any Loans outstanding under the Loan Agreement, (ii) exercising
        all rights and remedies and (iii) taking any other enforcement action under
        the
        Loan Documents at law or otherwise, in each case, as a result of the Designated
        Defaults. Nothing contained in this Agreement shall prejudice any rights
        or
        remedies that the Administrative Agent or any of the Lenders may have to
        exercise any rights and remedies during the Standstill Period with respect
        to
        any Defaults or Event of Default (whether now existing or hereafter occurring)
        other than the Designated Defaults. Moreover, nothing contained in this
        Agreement shall prejudice any rights or remedies the Administrative Agent
        or any
        of the Lenders may have to exercise any rights and remedies with respect
        to the
        Designated Defaults (other than the Waived Defaults) after expiration of
        the
        Standstill Period. The Standstill Period shall terminate upon the occurrence
        of
        any Forbearance Termination Event (as defined below).

       

      (b)  Notwithstanding
        Section 2.04(e) to the contrary, during the Standstill Period, the Designated
        Defaults shall not serve to prevent the interest elections of the Borrower
        otherwise permitted under Section 2.04. The Lenders will not impose Post-Default
        Rate interest for the Designated Defaults during the Standstill Period or
        thereafter.

       

      3.3  Forbearance
        Covenants.
        The
        Borrower agrees to comply with each of the following covenants during the
        Standstill Period: 

       

      (a)  Monthly
        Financial Reports.
        The
        Borrower shall deliver to the Administrative Agent on or before the twentieth
        business day of each month, a detailed monthly financial reporting package
        for
        the previous month that shall include an account payables aging, status of
        working capital, monthly production reports and lease operating
        statements.

       

      (b)  Calls
        with Lenders.
        The
        Borrower and its advisors shall participate in monthly conference calls with
        the
        Administrative Agent, the Lenders and their advisors during which a Financial
        Officer of the Borrower shall provide the Administrative Agent with an update
        on
        restructuring and cost reduction efforts.

       

      
        
          
          

        

        
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      (c)  Additional
        Mortgages.
        No
        later than August 18, 2008, the Borrower will execute and deliver (or cause
        to
        be executed and delivered) additional mortgages in form and substance reasonably
        satisfactory to the Administrative Agent such that after giving effect to
        such
        additional mortgages, the Administrative Agent, for the benefit of the Lenders,
        will have second priority Liens on not less than 90% of the PV10 of all proved
        Oil and Gas Properties evaluated in the Reserve Report most recently delivered
        prior to such date.

       

      3.4  Forbearance
        Termination Events.
        Each of
        the following events shall constitute a “Forbearance Termination
        Event”:

       

      (a)  Failure
        of the Borrower or the Guarantor to observe or perform any term, covenant,
        condition or agreement applicable to it contained in this Agreement or the
        failure of any representation or warranty made in this Agreement to be true
        in
        all material respects when made; or

       

      (b)  The
        occurrence of any Event of Default under the Loan Agreement or any other
        Loan
        Document, other than the Designated Defaults.

      The
        Borrower and the Guarantor acknowledge and agree that upon the earlier of
        (i)
        the occurrence of a Forbearance Termination Event, or (ii) August 15, 2008,
        the
        Standstill Period shall terminate without the need for any further action
        by, or
        notice being due from, the Administrative Agent or any of the Lenders. Further,
        upon the occurrence of a Forbearance Termination Event, the Administrative
        Agent
        and each of the Lenders shall be entitled (but not required) to exercise
        any or
        all of their rights and remedies under and in accordance with the Loan Documents
        or applicable law as a result of the Designated Defaults (other than the
        Waived
        Defaults) and/or any other Defaults, Events of Default under the Loan
        Documents.

       

      SECTION
        4.  AMENDMENT
        TO LOAN AGREEMENT.

       

      4.1  Amendment
        to Section 1.02.
        Section
        1.02 is hereby amended in its entirety to read as follows:

       

      “Applicable
        Margin”
means,
        with respect to each Tranche, a rate per annum equal to 9.5%. 

       

      4.2  Amendment
        to Section 3.02(d).
        Section
        3.02(d) is hereby amended in its entirety to read as follows:

       

      (d) Interest
        Payment Dates.
        Accrued
        interest on the principal amount of each Loan shall be payable in arrears
        on
        each Interest Payment Date for such Tranche and on the Maturity Date; provided
        that (i) 3.5% per annum of the accrued interest payable shall be capitalized
        and
        added to the aggregate outstanding principal of the Loans, and such additional
        principal shall accrue interest compounded quarterly at a per annum rate
        equal
        to the Adjusted LIBO Rate plus the Applicable Margin, (ii) interest accrued
        pursuant to Section 3.02(c) shall be payable on demand and (iii) in the event
        of
        any prepayment or principal of any Loan, accrued interest on the principal
        amount prepaid shall be payable on the date of such prepayment. For the purposes
        of the interest rate calculation, in no event shall the Adjusted LIBO Rate
        be
        less than 4%.

       

      
        
          
          

        

        
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      4.3  Reaffirmation
        of Obligations.
        The
        Borrower and the Guarantor each hereby acknowledges that the Loan Agreement,
        the
        Notes and all of the Loan Documents constitute the valid and binding obligations
        of the Borrower and the Guarantor enforceable against such Person in accordance
        with their respective terms, and the Borrower and the Guarantor each hereby
        reaffirms their respective obligations under the Loan Documents. None of
        (a) the
        entry by the Administrative Agent or any of the Lenders into this Agreement,
        (b)
        the acceptance of any payment from the Borrower or the Guarantor, (c) any
        other
        action or failure to act on the part of the Administrative Agent or any of
        the
        Lenders, in any case, shall constitute or has constituted a modification
        or
        extension of the Loan Agreement, the Notes or any other Loan Documents or
        (d)
        any other action or failure to act on the part of the Administrative Agent
        or
        any of the Lenders during the Standstill Period shall, in any case, constitute
        a
        waiver of any Defaults or Events of Default under the Loan Documents, except
        as
        expressly set forth in this Agreement.

       

      SECTION
        5.  REPRESENTATIONS
        AND WARRANTIES. 

       

      The
        Borrower and the Guarantor represent and warrant to the Administrative Agent
        and
        the Lenders that:

       

      5.1  This
        Agreement.
        This
        Agreement has been duly executed and delivered by the Borrower and the Guarantor
        and constitutes the legal, valid and binding obligation of the Borrower and
        the
        Guarantor, enforceable in accordance with its terms, subject to applicable
        bankruptcy, insolvency, reorganization, moratorium or other laws affecting
        creditors’ rights generally, and subject to general principles of equity,
        regardless of whether considered in a proceeding in equity or at
        law.

       

      5.2  Loan
        Agreement.
        The
        Loan Agreement and each of the Loan Documents, as they may be modified by
        this
        Agreement, remain in full force and effect and remain the valid and binding
        obligation of the Borrower and the Guarantor enforceable against the Borrower
        and the Guarantor in accordance with their terms. The Borrower and the Guarantor
        each hereby ratifies and confirms the Loan Agreement and each of the Loan
        Documents to which it is a party, as they may have been previously amended
        and
        as they may be further amended by this Agreement.

       

      5.3  Loan
        Documents.
        All
        representations and warranties set forth in the Loan Documents are true and
        correct in all material respects as of the date hereof, except to the extent
        any
        such representations and warranties are expressly limited to an earlier date,
        in
        which case, such representations and warranties are true and correct as of
        such
        specified earlier date.

       

      5.4  Nonwaiver.
        Except
        as set forth herein, the execution, delivery, performance and effectiveness
        of
        this Agreement shall not operate nor be deemed to be nor construed as a waiver
        (i) of any right, power or remedy of the Administrative Agent or any of the
        Lenders under the Loan Agreement or any of the other Loan Documents, (ii)
        of any
        other term, provision, representation, warranty or covenant contained in
        the
        Loan Agreement, any other Loan Documents or any other instruments or documents
        executed in connection therewith. Further, except as set forth herein, none
        of
        the provisions of this Agreement shall constitute, be deemed to be or construed
        as, a waiver of any Defaults or Events of Default under the Loan Agreement,
        as
        amended by this Agreement, or any Defaults or Events of Default other than
        the
        Waived Defaults. Except as set forth herein, any Defaults and/or Events of
        Default (including, without limitation, the Designated Defaults (other than
        the
        Waived Defaults)), if any, shall continue and shall not be deemed waived
        or
        cured in any way by the execution of this Agreement.

       

      
        
          
          

        

        
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      5.5  Defaults.
        After
        giving effect to the terms of this Agreement, except for the Designated
        Defaults, no event has occurred or is continuing which, with the giving of
        notice or the passage of time, or both, would constitute Defaults or Events
        of
        Default under any of the Loan Documents.

       

      5.6  Third-Party
        Actions.
        No
        attachments, executions, assignments for the benefit of creditors,
        receiverships, conservatorships or voluntary or involuntary proceedings in
        bankruptcy or actions pursuant to any other debtor relief laws are pending
        against the Borrower or the Guarantor.

       

      5.7  Mutual
        Agreement; Legal Consultation.
        This
        Agreement has been entered into without force or duress, of the free will
        of the
        Borrower, the Guarantor, the Administrative Agent and each of the Lenders.
        The
        Borrower, the Guarantor the Administrative Agent and each of the Lenders
        have
        read and understand this Agreement, have consulted with and been represented
        by
        legal counsel in connection herewith, and have been advised by their counsel
        of
        their rights and obligations hereunder. The decision by each signatory to
        enter
        into this Agreement is a fully informed decision, and each such signatory
        is
        aware of all legal and other ramifications of such decision. 

       

      SECTION
        6.  CONDITIONS
        PRECEDENT. 

       

      In
        addition to all of the other conditions and agreements set forth herein,
        the
        effectiveness of this Agreement is subject to the following conditions
        precedent:

       

      6.1  Execution
        of this Agreement.
        The
        Administrative Agent shall have received counterparts of this Agreement duly
        executed by the Borrower, the Guarantor, the Administrative Agent and each
        of
        the Lenders.

       

      6.2  Acknowledgment
        of Guarantor.
        The
        Administrative Agent shall have received, from the Guarantor, a duly executed
        counterpart of the Guarantor Acknowledgment and Release, in substantially
        the
        form of Exhibit
        A.

       

      6.3  Amendment
        to the Senior Revolving Credit Agreement.
        The
        Administrative Agent shall have received a fully executed copy of the
        Forbearance Agreement and Amendment No.1 to Credit Agreement
        in
        substantially the form of Exhibit
        B.

       

      
        
          
          

        

        
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      6.4  Fees
        and Expenses.
        The
        Administrative Agent and/or the Lenders, as appropriate, shall have received
        payment of all reasonable, necessary and documented out-of-pocket fees, costs
        and expenses incurred by the Administrative Agent and the Lenders in connection
        with this Agreement, including, but not limited to, such attorney’s fees, costs
        and expenses incurred in connection with the evaluation, negotiation, drafting,
        implementation, administration and enforcement of this Agreement, and any
        other
        agreements, documents or instruments referred to herein or contemplated hereby
        to the extent invoiced. 

       

      SECTION
        7.  MISCELLANEOUS

       

      7.1  Reference
        to and Effect on the Loan Agreement.
        Upon
        the effectiveness of this Agreement, each reference in the Loan Agreement
        to
“this Agreement”, “hereunder”, “hereof’, “herein”, or words of like import shall
        mean and be a reference to the Loan Agreement, as it may be amended hereby,
        and
        each reference to the Loan Agreement in any other document, instrument or
        agreement executed and/or delivered in connection with the Loan Agreement
        shall
        mean and be a reference to the Loan Agreement, as it may be amended
        hereby.

       

      7.2  Status
        of Loan Documents; No Novation.
        Except
        as otherwise expressly provided in this Agreement, and both during, and
        following the expiration of, the Standstill Period, the Loan Documents and
        the
        Indebtedness shall remain in full force and effect and shall not be waived,
        modified, superseded or otherwise affected by this Agreement, except as
        expressly set forth herein. This Agreement is not a novation nor is it to
        be
        construed as a release, waiver or modification of any of the terms, conditions,
        representations, warranties, covenants, rights or remedies set forth in the
        Loan
        Documents, except as expressly set forth herein. The Administrative Agent
        and
        each of the Lenders reserve all rights, claims and remedies that they have
        or
        may have against the Borrower or the Guarantor (or any other Person), except
        as
        expressly set forth in this Agreement.

       

      7.3  Release
        of Lenders. IN
        CONSIDERATION OF THIS AGREEMENT AND, SUBJECT TO THE CONDITIONS STATED HEREIN,
        THE BORROWER AND THE GUARANTOR EACH HEREBY RELEASES, ACQUITS, FOREVER
        DISCHARGES, AND COVENANTS NOT TO SUE, THE ADMINISTRATIVE AGENT AND EACH OF
        THE
        LENDERS, ALONG WITH ALL OF THEIR BENEFICIARIES, OFFICERS, DIRECTORS, AGENTS,
        EMPLOYEES, SERVANTS, ATTORNEYS AND REPRESENTATIVES, AS WELL AS THEIR RESPECTIVE
        HEIRS, EXECUTORS, LEGAL REPRESENTATIVES, ADMINISTRATORS, PREDECESSORS IN
        INTEREST, SUCCESSORS AND ASSIGNS (EACH INDIVIDUALLY, A “RELEASED
        PARTY”
        AND COLLECTIVELY, THE “RELEASED
        PARTIES”)
        FROM ANY AND ALL CLAIMS, DEMANDS, DEBTS, LIABILITIES, SUITS, OFFSETS AGAINST
        THE
        INDEBTEDNESS EVIDENCED BY THE LOAN DOCUMENTS AND ACTIONS, CAUSES OF ACTION
        OR
        CLAIMS FOR RELIEF OF WHATEVER KIND OR NATURE, WHETHER KNOWN OR UNKNOWN,
        SUSPECTED OR UNSUSPECTED BY BORROWER OR THE GUARANTOR, WHICH BORROWER, THE
        GUARANTOR OR ANY SUBSIDIARY MAY HAVE OR WHICH MAY HEREAFTER ACCRUE RELATED
        TO
        ANY ACTIONS OR FACTS OCCURRING PRIOR TO THE DATE OF THIS AGREEMENT AGAINST
        ANY
        RELEASED PARTY, FOR OR BY REASON OF ANY MATTER, CAUSE OR THING WHATSOEVER
        OCCURRING ON OR PRIOR TO THE DATE OF THIS AGREEMENT, WHICH RELATE TO, IN
        WHOLE
        OR IN PART, DIRECTLY OR INDIRECTLY THE LOAN AGREEMENT, ANY NOTE, ANY SECURITY
        INSTRUMENT, ANY OTHER LOAN DOCUMENT OR THE TRANSACTIONS EVIDENCED THEREBY,
        INCLUDING, WITHOUT LIMITATION, ANY DISBURSEMENTS UNDER THE LOAN AGREEMENT,
        ANY
        NOTES, THE NEGOTIATION OF ANY OF THE LOAN AGREEMENT, THE NOTES, THE MORTGAGES
        OR
        THE OTHER LOAN DOCUMENTS, THE TERMS THEREOF, OR THE APPROVAL, ADMINISTRATION,
        ENFORCEMENT OR SERVICING THEREOF.

       

      
        
          
          

        

        
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      7.4  Modification.
        Any
        amendments or modifications of this Agreement or any provision of this Agreement
        shall be effectuated in accordance with Section 12.02.

       

      7.5  Limitation
        on Relationship.
        This
        Agreement and the Loan Documents do not and shall not be deemed or construed
        to
        create, a partnership, tenancy in common, joint tenancy, joint venture,
        co-ownership or any other relationship aside from a debtor-creditor relationship
        among, the Borrower, the Administrative Agent and the Lenders.

       

      7.6  Notices.
        Any
        notice required or desired to be served, given or delivered hereunder shall
        be
        given in the manner provided in Section 12.01, mutatis
        mutandis.

       

      7.7  Severability.
        Any
        provision of this Agreement held to be invalid, illegal or unenforceable
        in any
        jurisdiction shall, as to such jurisdiction, be ineffective to the extent
        of
        such invalidity, illegality or unenforceability without affecting the validity,
        legality and enforceability of the remaining provisions hereof; and the
        invalidity of a particular provision in a particular jurisdiction shall not
        invalidate such provision in any other jurisdiction.

       

      7.8  Counterparts.
        This
        Agreement may be executed in any number of counterparts, including by facsimile
        signature or other electronic means (i.e., PDF or similar transmission) with
        hard copy to follow, each of which shall be deemed an original, but all of
        which
        together shall constitute one and the same agreement.

       

      7.9  Headings.
        The
        various headings used in this Agreement are inserted for convenience only
        and
        shall not affect the meaning or interpretation of this Agreement or any
        provision hereof.

       

      7.10  GOVERNING
        LAW; JURISDICTION; WAIVER OF JURY TRIAL, ETC. THE
        PROVISIONS OF SECTION 12.09 SHALL APPLY TO THIS AGREEMENT.

       

      7.11  Signing
        by Lenders.
        This
        Agreement shall be effective, as provided in Section 5 above, upon execution
        and
        delivery hereof by the Borrower, the Guarantor, the Administrative Agent
        and
        each of the Lenders. 

       

      7.12  Construction;
        Integration.
        This
        Agreement has been freely negotiated by the parties and the principle of
        construction against draftsmen shall have no application in the interpretation
        of this 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.

       

      7.13  Approval
        of Amendment to Senior Revolving Credit Agreement.
        The
        Lenders hereby approve the Amendment to the Senior Revolving Credit Agreement
        substantially in the form attached as Exhibit
        B.

      


      


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      IN
        WITNESS WHEREOF, this Agreement is executed as of June 2, 2008. 

      
        
          	 	 	 
	 	 
	 	AURORA
                  OIL &
                  GAS CORPORATION
	 
 	 
 	 
 
	 	By:  	/s/ William
                  W. Deneau
	 	
                  Name:
                    William W. Deneau

                  Title:
                    Chief Executive Officer

                
	 	 


        

        
          	 	 	 
	 	
                  HUDSON
                    PIPELINE & PROCESSING CO., LLC

                  By:
                    AURORA
                    Oil & Gas Corporation, its sole manager

                
	 
 	 
 	 
 
	 	By:  	/s/ William
                  W. Deneau
	 	
                  Name:
                    William W. Deneau

                  Title:
                    Chief Executive Officer

                
	 	 




        
          
            
            

          

          
            
            

            
              

            

          

          
            
            

          

        

        

          
            	 	
                    
                      BNP
                        PARIBAS, as Administrative Agent and a Lender

                    

                  
	 	 
	 	 
	 	
                    By:/s/
                      Douglas R. Liftman

                  
	 	
                    Name:Douglas
                      R. Liftman

                  
	 	
                    Title:Managing
                      Director

                  
	 	 
	 	 
	 	
                    By:/s/
                      Betsy Jocher

                  
	 	
                    Name:Betsy
                      Jocher

                  
	 	
                    Title:Director

                  
	 	 
	 	 
	 	 
	 	
                    
                      D.
                        E. SHAW LAMINAR PORTFOLIOS, L.L.C., as a Lender

                    

                  
	 	 
	 	 
	 	
                    By:
                      /s/
                      Daniel Posner 

                  
	 	
                    Name:
                      Daniel Posner

                  
	 	
                    Title:
                      Authorized
                      Signatory

                  
	 	 
	 	 
	 	
                    
                      CIT
                        CAPITAL USA, INC., as a Lender

                    

                  
	 	 
	 	 
	 	
                    By:
                      /s/
                      George E. McKean

                  
	 	
                    Name:
                      George
                      E. McKean

                  
	 	
                    Title:
                      Vice
                      President

                  


          

        

      

      
        
           

          
            	 	 
	 	
                    
                      
                        ENERGY
                          COMPONENTS SPC UP-AND MIDSTREAM SEGREGATED PORTFOLIO, as
                          a
                          Lender

                      

                    

                  
	 	 
	 	 
	 	
                    By:
                      _____________

                  
	 	
                    Name:
                      _____________

                  
	 	
                    Title:
                      _____________

                  
	 	 
	 	 


          

        

      

       

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

       

      EXHIBIT
        A

       

      [FORM
        OF] GUARANTOR
        ACKNOWLEDGMENT AND RELEASE

      The
        undersigned, Hudson Pipeline & Processing Co., LLC, a Michigan limited
        liability company (the “Guarantor”),
        hereby acknowledges and agrees to the terms of the foregoing Forbearance
        Agreement and Amendment No. 1 to Second Lien Term Loan Agreement, dated as
        of
        June 2, 2008 (the “Forbearance
        Agreement”).
        Unless
        expressly defined herein, all defined terms used herein shall have the same
        meanings as set forth in the Forbearance Agreement.

       

      The
        Guarantor hereby represents and warrants that the Second Lien Guaranty and
        Collateral Agreement (the “Guarantee”)
        executed and delivered by the undersigned to the Administrative Agent, dated
        as
        of August 20, 2007, remains the valid and binding obligation of the Guarantor,
        enforceable against the Guarantor in accordance with the terms of, and the
        Guarantor hereby
        reaffirms its obligations under, such
        Guarantee. 

       

      In
        consideration of the Forbearance Agreement and, subject to the conditions
        stated
        therein, the Guarantor hereby releases, acquits and forever discharges the
        Administrative Agent and each of the Lenders that executes and delivers a
        counterpart of the Forbearance Agreement to the Administrative Agent, along
        with
        all of their beneficiaries, officers, directors, agents, employees, servants,
        attorneys and representatives, as well as their respective heirs, executors,
        legal representatives, administrators, predecessors in interest, successors
        and
        assigns (each individually, a “Released
        Party”,
        collectively, the “Released
        Parties”)
        from
        any and all claims, demands, debts, liabilities, suits, offsets against the
        indebtedness evidenced by the Loan Documents and actions, causes of action
        or
        claims for relief of whatever kind or nature, whether known or unknown,
        suspected or unsuspected by the Borrower or the Guarantor, which the Borrower
        or
        the Guarantor may have or which may hereafter accrue against any Released
        Party,
        for or by reason of any matter, cause or thing whatsoever occurring on or
        prior
        to the date of this Agreement related to any actions or facts occurring prior
        to
        the date of the Forbearance Agreement, which relate to, in whole or in part,
        directly or indirectly the Loan Agreement, any Note, any Mortgage, any other
        Loan Document or the transactions evidenced thereby, including, without
        limitation, any disbursements under the Loan Agreement, any Notes, the
        negotiation of any of the Loan Agreement, the Notes, the Mortgages or the
        other
        Loan Documents, the terms thereof, or the approval, administration, enforcement
        or servicing thereof.

       

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      


      HUDSON
        PIPELINE & PROCESSING CO., LLC

      


      By:
        Aurora Oil & Gas Corporation, its sole manager

      


      


      By:
        /s/
        William W. Deneau

      Name:
        William W. Deneau

      Dated:
        Chief
        Executive Officer

       

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

      EXHIBIT
        B

       

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      


      


      SCHEDULE
        I

       

      DESIGNATED
        DEFAULTS

       

      Any
        Defaults or Event of Defaults under Section 10.01(d) and (e) resulting from
        the
        non-compliance with Sections 8.18 or 9.01(a) or (b) that occurred or may
        occur
        prior to and including June 30, 2008, even if reported after June 30,
        2008.

       

      Any
        cross
        defaults to Sections 8.18 or 9.01(a) or (b) of the Senior Revolving Credit
        Agreement under Section 10.01(g) related to any period prior to and including
        June 30, 2008.

       

      For
        the
        avoidance of doubt, Designated Defaults do not include any Waived
        Defaults.