Document:

EXHIBIT
10.30

    

    UNITED
STATES BANKRUPTCY COURT

    FOR
THE WESTERN DISTRICT OF MICHIGAN

     

    
      
        	 
      	
                )

              	 
      
	
                In
      re:

              	
                )

              	
                Chapter
      11

              
	 
      	
                )

              	 
      
	
                AURORA
      OIL & GAS CORPORATION,

              	
                )

              	
                Bankruptcy
      Case No.: 09-08254 (SWD)

              
	 
      	
                )

              	 
      
	
                AND

              	
                )

              	 
      
	 
      	
                )

              	 
      
	
                HUDSON
      PIPELINE & PROCESSING

              	
                )

              	 
      
	
                CO.,
      LLC,

              	
                )

              	 
      
	
                Debtors.        
      

              	
                )

              	
                Jointly
      Administered

              
	 
      	
                )

              	 
      

      

    

    

    DISCLOSURE
STATEMENT PURSUANT TO BANKRUPTCY CODE § 1125 TO

    ACCOMPANY
THE JOINT PLAN OF REORGANIZATION OF DEBTORS AURORA

    OIL & GAS CORPORATION
AND HUDSON PIPELINE & PROCESSING CO., LLC

    

    
      
        	 
      	
                Submitted
      by:

              
	 
      	 
      
	 
      	
                WARNER
      NORCROSS & JUDD LLP

              
	 
      	
                Stephen
      B. Grow (P39622)

              
	 
      	
                900
      Fifth Third Center, 111 Lyon Street NW

              
	 
      	
                Grand
      Rapids, Michigan  49503

              
	 
      	
                Telephone:
      (616) 752-2158

              
	 
      	
                Facsimile:
      (616) 222-2158

              
	 
      	
                sgrow@wnj.com

              
	 
      	 
      
	 
      	
                -and-

              
	 
      	 
      
	 
      	
                CAHILL
      GORDON & REINDEL llp

              
	 
      	
                Joel
      H. Levitin

              
	 
      	
                Stephen
      J. Gordon

              
	 
      	
                Eighty
      Pine Street

              
	 
      	
                New
      York, New York  10005-1702

              
	 
      	
                Telephone:  (212)
      701-3000

              
	 
      	
                Facsimile:  (212)
      269-5420

              
	 
      	 
      
	 
      	
                Attorneys
      for the

              
	 
      	
                Debtors
      and Debtors-in-Possession

              

      

    

    

    Dated:  October
6, 2009

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    PRELIMINARY
STATEMENT

     

    THIS
DISCLOSURE STATEMENT WAS FILED WITH THE UNITED STATES BANKRUPTCY COURT FOR THE
WESTERN DISTRICT OF MICHIGAN ON OCTOBER 6, 2009.  [AFTER A HEARING ON
THE ADEQUACY OF THE DISCLOSURE CONTAINED HEREIN, THE BANKRUPTCY COURT HAS
DETERMINED THAT THIS DISCLOSURE STATEMENT CONTAINS ADEQUATE INFORMATION, AS
DEFINED IN  BANKRUPTCY CODE § 1125.]  A HEARING ON
CONFIRMATION OF THE PROPOSED JOINT PLAN OF REORGANIZATION DESCRIBED HEREIN HAS
BEEN SCHEDULED FOR ___________ __, 2009 AT _:00 _.M. (PREVAILING EASTERN
TIME).

     

    AS
DISCUSSED IN GREATER DETAIL HEREIN, THE BANKRUPTCY COURT HAS DIRECTED THAT
OBJECTIONS, IF ANY, TO CONFIRMATION OF THE PROPOSED PLAN MUST BE FILED AND
SERVED ON OR BEFORE ________ __, 2009 AT _:_0 P.M. (PREVAILING EASTERN TIME) IN
THE MANNER DESCRIBED HEREIN.

    

    
      
        
          
            	
                    THIS
      IS NOT A SOLICITATION OF ACCEPTANCE OR REJECTION OF THE
      PLAN.  ACCEPTANCES OR REJECTIONS MAY NOT BE SOLICITED UNTIL A
      DISCLOSURE STATEMENT HAS BEEN APPROVED BY THE BANKRUPTCY
      COURT.  THIS DISCLOSURE STATEMENT IS BEING SUBMITTED FOR
      APPROVAL BUT HAS NOT YET BEEN APPROVED BY THE BANKRUPTCY
      COURT.

                  

          

        

      

    

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    TABLE
OF CONTENTS

     

    
      
        
          
            	 
      	 
      	 
      	
                    Page

                  
	 
      	 
      	 
      	 
      
	
                    I.

                  	
                    PREAMBLE

                  	 
      	
                    1

                  
	 
      	 
      	 
      	 
      
	
                    II.

                  	
                    INTRODUCTION

                  	 
      	
                    3

                  
	 
      	 
      	 
      	 
      
	
                    III.

                  	
                    VOTING
      INSTRUCTIONS

                  	 
      	
                    6

                  
	 
      	 
      	 
      	 
      
	 
      	
                    A.

                  	
                    Voting
      Procedures.

                  	 
      	
                    6

                  
	 
      	
                    B.

                  	
                    Ballots.

                  	 
      	
                    8

                  
	 
      	
                    C.

                  	
                    Withdrawal
      or Revocation of Ballots.

                  	 
      	
                    9

                  
	 
      	
                    D.

                  	
                    Waivers
      of Defects, Irregularities, Etc.

                  	 
      	
                    9

                  
	 
      	 
      	 
      	 
      
	
                    IV.

                  	
                    OVERVIEW
      OF THE PLAN

                  	 
      	
                    9

                  
	 
      	 
      	 
      	 
      
	
                    V.

                  	
                    GENERAL
      INFORMATION

                  	 
      	
                    12

                  
	 
      	 
      	 
      	 
      
	 
      	
                    A.

                  	
                    Corporate
      Structure of the Debtors and Business History.

                  	 
      	
                    12

                  
	 
      	
                    B.

                  	
                    Capital
      Structure.

                  	 
      	
                    13

                  
	 
      	
                    C.

                  	
                    Description
      of Business.

                  	 
      	
                    20

                  
	 
      	
                    D.

                  	
                    Employment
      Agreements, Benefits, and Related Plans.

                  	 
      	
                    46

                  
	 
      	 
      	 
      	 
      
	
                    VI.

                  	
                    EVENTS
      LEADING TO THE FILING OF THESE CASES

                  	 
      	
                    48

                  
	 
      	 
      	 
      	 
      
	
                    VII.

                  	
                    THE
      CASES

                  	 
      	
                    48

                  
	 
      	 
      	 
      	 
      
	 
      	
                    A.

                  	
                    The
      Debtors’ First Day Motions and Retention Applications

                  	 
      	
                    49

                  
	 
      	
                    B.

                  	
                    The
      Formation of the Creditors Committee

                  	 
      	
                    51

                  
	 
      	
                    C.

                  	
                    Schedules
      and Statements

                  	 
      	
                    52

                  
	 
      	
                    D.

                  	
                    The
      DIP Facility

                  	 
      	
                    52

                  
	 
      	
                    E.

                  	
                    The
      Atlas Stipulation and Order

                  	 
      	
                    52

                  
	 
      	
                    F.

                  	
                    Certain
      Other Motions Filed by the Debtors

                  	 
      	
                    53

                  
	 
      	
                    G.

                  	
                    Longhorn’s
      Motion to Appoint an Examiner

                  	 
      	
                    53

                  
	 
      	 
      	 
      	 
      
	
                    VIII.

                  	
                    THE
      PLAN OF REORGANIZATION

                  	 
      	
                    53

                  
	 
      	 
      	 
      	 
      
	 
      	
                    A.

                  	
                    General —
      Classification of Claims.

                  	 
      	
                    53

                  
	 
      	
                    B.

                  	
                    Summary
      of Distributions Under the Plan.

                  	 
      	
                    54

                  
	 
      	
                    C.

                  	
                    Implementation
      of the Plan.

                  	 
      	
                    66

                  
	 
      	
                    D.

                  	
                    Other
      Provisions of the Plan.

                  	 
      	
                    80

                  
	 
      	
                    E.

                  	
                    Retention
      of Jurisdiction.

                  	 
      	
                    85

                  
	 
      	
                    F.

                  	
                    Releases.

                  	 
      	
                    88

                  
	 
      	
                    G.

                  	
                    Risk
      Factors.

                  	 
      	
                    90

                  
	 
      	 
      	 
      	 
      
	
                    IX.

                  	
                    CONFIRMATION
      OF THE PLAN

                  	 
      	
                    109

                  
	 
      	 
      	 
      	 
      
	 
      	
                    A.

                  	
                    Solicitation
      of Votes.

                  	 
      	
                    111

                  

          

        

      

    

     

    
      
         

      

      
        (i)

        
          

        

      

      
         

      

    

    TABLE
OF CONTENTS

    (continued)

    

    
      
        
          
            
              
                	 
      	 
      	 
      	 
      	
                        Page

                      
	 
      	 
      	 
      	 
      	 
      
	 
      	
                        B.

                      	
                        Confirmation
      Hearing.

                      	 
      	
                        111

                      
	 
      	
                        C.

                      	
                        Classification.

                      	 
      	
                        112

                      
	 
      	
                        D.

                      	
                        Impairment.

                      	 
      	
                        112

                      
	 
      	
                        E.

                      	
                        Acceptance
      of the Plan.

                      	 
      	
                        113

                      
	 
      	
                        F.

                      	
                        Confirmation
      Without Acceptance By All Impaired Classes.

                      	 
      	
                        113

                      
	 
      	
                        G.

                      	
                        Feasibility
      Test.

                      	 
      	
                        115

                      
	 
      	
                        H.

                      	
                        Best
      Interests Test.

                      	 
      	
                        116

                      
	 
      	
                        I.

                      	
                        Valuation
      of the Reorganized Debtors.

                      	 
      	
                        119

                      
	 
      	
                        J.

                      	
                        Amendments
      to or Modifications of the Plan.

                      	 
      	
                        121

                      
	 
      	
                        K.

                      	
                        Conditions
      to Confirmation of the Plan.

                      	 
      	
                        122

                      
	 
      	
                        L.

                      	
                        Conditions
      to Effectiveness.

                      	 
      	
                        122

                      
	 
      	
                        M.

                      	
                        Waiver
      of Conditions.

                      	 
      	
                        124

                      
	 
      	
                        N.

                      	
                        Effects
      of Plan Confirmation.

                      	 
      	
                        124

                      
	 
      	 
      	 
      	 
      
	
                        X.

                      	
                        ALTERNATIVES
      TO CONFIRMATION AND

                        CONSUMMATION
      OF THE PLAN

                      	 
      	
                        125

                      
	 
      	 
      	 
      	 
      
	 
      	
                        A.

                      	
                        Continuation
      of the Cases.

                      	 
      	
                        126

                      
	 
      	
                        B.

                      	
                        Alternative
      Plans of Reorganization.

                      	 
      	
                        126

                      
	 
      	
                        C.

                      	
                        Liquidation
      Under Chapter 11 or Chapter 7.

                      	 
      	
                        127

                      
	 
      	 
      	 
      	 
      
	
                        XI.

                      	
                        MANAGEMENT

                      	 
      	
                        127

                      
	 
      	 
      	 
      	 
      
	
                        XII.

                      	
                        DESCRIPTION
      OF THE EXIT CREDIT FACILITY,

                        THE
      WORKING CAPITAL LOANS, THE NEW SECURED

                        NOTES,
      AND THE EXIT CREDIT FACILITY GUARANTEE

                      	 
      	
                        128

                      
	 
      	 
      	 
      	 
      
	 
      	
                        A.

                      	
                        The
      Exit Credit Facility

                      	 
      	
                        128

                      
	 
      	
                        B.

                      	
                        The
      New Secured Notes

                      	 
      	
                        129

                      
	 
      	
                        C.

                      	
                        Payment
      and Priorities Related to Secured Indebtedness.

                      	 
      	
                        130

                      
	 
      	 
      	 
      	 
      
	
                        XIII.

                      	
                        DESCRIPTION
      OF THE NEW AURORA CLASS A

                        COMMON
      STOCK AND THE NEW AURORA PREFERRED STOCK

                      	 
      	
                        131

                      
	 
      	 
      	 
      	 
      
	 
      	
                        A.

                      	
                        The
      New Aurora Class A Common Stock

                      	 
      	
                        131

                      
	 
      	
                        B.

                      	
                        The
      New Aurora Preferred Stock

                      	 
      	
                        132

                      
	 
      	
                        C.

                      	
                        Dividends
      to Preferred and Common Equity Holders of Reorganized
    Aurora

                      	 
      	
                        133

                      
	 
      	
                        D.

                      	
                        No
      Fractional Shares or Warrants

                      	 
      	
                        134

                      
	 
      	
                        E.

                      	
                        The
      Registration Rights Agreement

                      	 
      	
                        134

                      
	 
      	
                        F.

                      	
                        The
      Voting Agreement and the Utah and Delaware Conversions

                      	 
      	
                        134

                      

              

            

          

        

      

    

    
      
         

      

      
        (ii)

        
          

        

      

      
         

      

    

    TABLE
OF CONTENTS

    (continued)

    

    
      
        
          
            	 
      	 
      	 
      	
                    Page

                  
	 
      	 
      	 
      	 
      
	
                    XIV.

                  	
                    CERTAIN
      U.S. FEDERAL INCOME TAX CONSIDERATIONS

                  	 
      	
                    135

                  
	 
      	 
      	 
      	 
      
	 
      	
                    A.

                  	
                    Tax
      Consequences to Creditors

                  	 
      	
                    136

                  
	 
      	
                    B.

                  	
                    Tax
      Consequences to the Debtors.

                  	 
      	
                    138

                  
	 
      	 
      	 
      	 
      
	
                    XV.

                  	
                    RESALE
      OF SECURITIES RECEIVED UNDER THE PLAN

                  	 
      	
                    141

                  
	 
      	 
      	 
      	 
      
	 
      	
                    A.

                  	
                    Issuance
      of New Securities.

                  	 
      	
                    141

                  
	 
      	
                    B.

                  	
                    Subsequent
      Transfers Under Federal Securities Laws.

                  	 
      	
                    141

                  
	 
      	 
      	 
      	 
      
	
                    XVI.

                  	
                    AVAILABLE
      INFORMATION

                  	 
      	
                    143

                  
	 
      	 
      	 
      	 
      
	
                    XVII.

                  	
                    RECOMMENDATION

                  	 
      	
                    144

                  

          

        

      

    

    
      
         

      

      
        (iii)

        
          

        

      

      
         

      

    

    EXHIBITS

    

    
      	
              A.

            	
              The
      Joint Plan of Reorganization of Aurora Oil & Gas Corporation and
      Hudson Pipeline & Processing Co., LLC, dated October 6,
      2009

            

    

     

    
      	
              B.

            	
              Projected
      Financial Information for the Reorganized
  Debtors

            

    

     

    
      	
              C.

            	
              Hypothetical
      Liquidation Analysis

            

    

     

    
      	
              D.

            	
              List
      of the Known Executory Contracts and/or Unexpired Leases Anticipated to be
      Assumed under the Plan and the Proposed Cure Amounts
    Therefor

            

    

     

    
      	
              E.

            	
              [List
      of the Known Executory Contracts and/or Unexpired Leases Anticipated to be
      Rejected under the Plan]

            

    

     

    
      
         

      

      
        (iv)

        
          

        

      

      
         

      

    

    I.           PREAMBLE

     

    Aurora
Oil & Gas Corporation (“Aurora”) and Hudson Pipeline & Processing Co.,
LLC (“HPPC” and together with Aurora, the “Debtors”), the above-captioned
debtors and debtors-in-possession, jointly submit this disclosure statement (as
modified or amended from time to time, the “Disclosure Statement”) pursuant to
Bankruptcy Code § 1125, in connection with (i) the solicitation from certain
creditors (“Creditors”) of the respective Debtors of votes on the proposed Joint
Plan of Reorganization of Debtors Aurora Oil & Gas Corporation and Hudson
Pipeline & Processing Co., LLC, dated October 6, 2009 (as modified or
amended from time to time, the “Plan”), filed by the Debtors with the United
States Bankruptcy Court for the Western District of Michigan (the “Bankruptcy
Court”), and (ii) the hearing to consider confirmation of the Plan (the
“Confirmation Hearing”) scheduled for ___________ __, 2009 at __:__ _M.
(Prevailing Eastern Time).  Unless otherwise defined, all capitalized
terms contained herein shall have the meanings ascribed to them in the
Plan.

     

    You
should read this Disclosure Statement and the Plan in their
entirety.  All exhibits to this Disclosure Statement are incorporated
into, and are part of, this Disclosure Statement.  No solicitation of
votes on the Plan may be made except pursuant to this Disclosure Statement, and
no person has been authorized to use any information concerning the Debtors or
their business other than the information contained herein for purposes of such
solicitation.

     

    [The Bankruptcy Court has
approved this Disclosure Statement as containing information of a kind and in
sufficient detail to enable a hypothetical, reasonable investor typical of
creditors to make an informed judgment as to whether to accept or to reject the
Plan.]  APPROVAL OF THIS
DISCLOSURE STATEMENT BY THE BANKRUPTCY COURT DOES NOT, HOWEVER, CONSTITUTE AN
ENDORSEMENT OF THIS DISCLOSURE STATEMENT BY THE BANKRUPTCY COURT OR A
DETERMINATION THEREOF AS TO THE FAIRNESS OR THE MERITS OF THE PLAN.

     

    THE PLAN
HAS NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND EXCHANGE COMMISSION,
NOR HAS THE SECURITIES AND EXCHANGE COMMISSION PASSED UPON THE ACCURACY OR
ADEQUACY OF THE INFORMATION CONTAINED IN THIS DISCLOSURE
STATEMENT.  ANY REPRESENTATION TO THE CONTRARY IS
UNLAWFUL.

     

    SAFE
HARBOR STATEMENT UNDER THE PRIVATE SECURITIES LITIGATION REFORM ACT OF
1995:  THIS DOCUMENT WAS COMPILED FROM INFORMATION OBTAINED BY THE
DEBTORS FROM NUMEROUS SOURCES BELIEVED TO BE ACCURATE, TO THE BEST KNOWLEDGE,
INFORMATION, AND BELIEF OF THE DEBTORS.  THIS DISCLOSURE STATEMENT
INCLUDES PROJECTIONS AND OTHER STATEMENTS THAT CONSTITUTE “FORWARD-LOOKING
STATEMENTS” WITHIN THE MEANING OF THE SECURITIES ACT OF 1933, AS AMENDED (THE
“SECURITIES ACT”), AND THE SECURITIES EXCHANGE ACT OF 1934, AS AMENDED, BY THE
PRIVATE SECURITIES LITIGATION REFORM ACT OF 1995.  “FORWARD-LOOKING
STATEMENTS” IN THE PROJECTIONS AND ELSEWHERE INCLUDE THE INTENT, BELIEF, OR
CURRENT EXPECTATIONS OF THE DEBTORS AND MEMBERS OF THEIR MANAGEMENT TEAM AND/OR
OTHERS WITH RESPECT TO, AMONG OTHER THINGS, THE TIMING OF, COMPLETION OF, AND
SCOPE OF THE CURRENT CONTEMPLATED RESTRUCTURING, THE PLAN, FINANCING, MARKET
CONDITIONS (INCLUDING THE PRICE OF OIL AND GAS), AND THE DEBTORS’ FUTURE
LIQUIDITY AND OPERATIONS, AS WELL AS THE ASSUMPTIONS ON WHICH SUCH STATEMENTS
ARE BASED.  WHILE THE DEBTORS BELIEVE THAT THE EXPECTATIONS ARE BASED
ON REASONABLE ASSUMPTIONS WITHIN THE BOUNDS OF THEIR KNOWLEDGE OF THEIR BUSINESS
AND OPERATIONS, PARTIES-IN-INTEREST ARE CAUTIONED THAT ANY SUCH “FORWARD-LOOKING
STATEMENTS” ARE NOT GUARANTEES OF FUTURE PERFORMANCE AND INVOLVE RISKS AND
UNCERTAINTIES, AND THAT ACTUAL RESULTS MAY DIFFER MATERIALLY FROM THOSE
CONTEMPLATED BY SUCH “FORWARD-LOOKING STATEMENTS.”

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    THIS
DISCLOSURE STATEMENT ALSO CONTAINS A SUMMARY OF CERTAIN PROVISIONS OF THE PLAN
AND THE TRANSACTIONS CONTEMPLATED THEREUNDER AND CERTAIN OTHER
DOCUMENTS.  WHILE THE DEBTORS BELIEVE THAT THESE SUMMARIES ARE FAIR
AND ACCURATE, SUCH SUMMARIES ARE QUALIFIED TO THE EXTENT THAT THEY DO NOT SET
FORTH THE ENTIRE TEXT OF SUCH DOCUMENTS.  REFERENCE IS MADE TO THE
PLAN AND THE DOCUMENTS REFERRED TO HEREIN AND THEREIN FOR A COMPLETE STATEMENT
OF THE TERMS AND PROVISIONS THEREOF.

     

    THE
STATEMENTS CONTAINED IN THIS DISCLOSURE STATEMENT ARE MADE AS OF THE DATE HEREOF
UNLESS ANOTHER TIME IS SPECIFIED IN THIS DISCLOSURE STATEMENT.  THE
DELIVERY OF THIS DISCLOSURE STATEMENT SHALL NOT, UNDER ANY CIRCUMSTANCE, CREATE
AN IMPLICATION THAT THERE HAS BEEN NO CHANGE IN THE FACTS SET FORTH IN THIS
DISCLOSURE STATEMENT SINCE THE DATE HEREOF OR SUCH OTHER SPECIFIED
TIME.

     

    THIS
DISCLOSURE STATEMENT IS INTENDED FOR THE SOLE USE OF THOSE HOLDERS WHOSE CLAIMS
AGAINST THE DEBTORS ARE IMPAIRED UNDER THE PLAN, TO ENABLE SUCH HOLDERS TO MAKE
AN INFORMED DECISION ABOUT THE PLAN.  THIS DISCLOSURE STATEMENT MAY
NOT BE RELIED UPON FOR ANY PURPOSE OTHER THAN TO DETERMINE HOW TO VOTE ON THE
PLAN.

     

    THE
PLAN DESCRIBED HEREIN REFLECTS NEGOTIATIONS THAT OCCURRED PRIOR TO AND
SUBSEQUENT TO THE FILING THEREOF BETWEEN THE DEBTORS AND THEIR PRIMARY
PRE-PETITION SECURED LENDERS.  THE DEBTORS’ RESPECTIVE BOARDS OF
DIRECTORS AND MANAGERS (AS APPLICABLE) RECOMMEND THAT THOSE CREDITORS ENTITLED
TO VOTE WITH RESPECT TO THE PLAN VOTE TO ACCEPT THE PLAN.

     

    THIS
DISCLOSURE STATEMENT SHALL NOT CONSTITUTE OR BE CONSTRUED AS AN ADMISSION OF, OR
STIPULATION TO, ANY FACT OR LIABILITY, OR A WAIVER OF ANY RIGHTS, BUT RATHER AS
A STATEMENT MADE IN THE CONTEXT OF SETTLEMENT NEGOTIATIONS.

    
      
         

      

      
        2

        
          

        

      

      
         

      

    

    OTHER
THAN AS EXPRESSLY SET FORTH HEREIN, THIS DISCLOSURE STATEMENT SHALL NOT BE
ADMISSIBLE IN ANY PROCEEDING INVOLVING THE DEBTORS, ANY OF THE REORGANIZED
DEBTORS, OR ANY OTHER PARTY, NOR SHALL IT BE CONSTRUED TO BE CONCLUSIVE ADVICE
ON THE TAX, SECURITIES, OR OTHER LEGAL EFFECTS OF THE REORGANIZATION AS TO ANY
INTERESTED PARTY.  ANY INTERESTED PARTY DESIRING ANY SUCH ADVICE
SHOULD CONSULT WITH ITS OWN ADVISORS.

     

    CIRCULAR 230
NOTICE:  TO ENSURE COMPLIANCE WITH INTERNAL REVENUE SERVICE
CIRCULAR 230, YOU ARE HEREBY NOTIFIED THAT:  (A) ANY DISCUSSION OF
FEDERAL TAX ISSUES IN THIS DISCLOSURE STATEMENT IS NOT INTENDED OR WRITTEN TO BE
RELIED UPON, AND CANNOT BE RELIED UPON BY YOU, FOR THE PURPOSE OF AVOIDING
PENALTIES THAT MAY BE IMPOSED ON YOU UNDER THE INTERNAL REVENUE CODE OF 1986, AS
AMENDED; (B) SUCH DISCUSSION IS WRITTEN IN CONNECTION WITH THE PROMOTION OR
MARKETING OF THE TRANSACTIONS OR MATTERS ADDRESSED HEREIN; AND (C) YOU SHOULD
SEEK ADVICE BASED ON YOUR PARTICULAR CIRCUMSTANCES FROM AN INDEPENDENT TAX
ADVISOR.

     

    IMPORTANT:  THIS
DISCLOSURE STATEMENT CONTAINS INFORMATION THAT MAY BEAR UPON YOUR DECISION TO
ACCEPT OR TO REJECT THE PLAN.  PLEASE READ THIS DOCUMENT WITH
CARE.

     

    THE
INFORMATION CONTAINED IN THIS DISCLOSURE STATEMENT IS UNAUDITED AND WILL NOT BE
SUBJECT TO AUDIT OR REVIEW BY THE DEBTORS’ EXTERNAL AUDITORS ON A STAND-ALONE
BASIS AT ANY TIME IN THE FUTURE.  RESULTS FOR THE PRIOR PERIODS AS
PRESENTED IN THIS DISCLOSURE STATEMENT ARE NOT NECESSARILY INDICATIVE OF THE
ACTUAL RESULTS FOR THE PRESENT OR FUTURE IF ALL SUCH MATTERS WERE ALLOCATED
TO ALL PERIODS IN THE QUARTER OR YEAR.  ACCORDINGLY, EACH PERIOD
REPORTED IN THIS DISCLOSURE STATEMENT SHOULD NOT BE VIEWED ON A STAND-ALONE
BASIS, BUT RATHER IN THE CONTEXT OF PREVIOUSLY REPORTED FINANCIAL RESULTS,
INCLUDING THE DEBTORS’ PRIOR SEC FILINGS.

     

    THE
INFORMATION PRESENTED IN THIS DISCLOSURE STATEMENT IS NOT PRESENTED IN
ACCORDANCE WITH ACCOUNTING PRINCIPLES GENERALLY ACCEPTED IN THE UNITED STATES OF
AMERICA (“GAAP”) NOR IS THE INFORMATION RELATED TO OIL & GAS RESERVES IN
ACCORDANCE WITH SEC REGULATIONS.

     

    II.           INTRODUCTION

     

    On July
12, 2009 (the “Petition Date”), the Debtors filed with the Bankruptcy Court
separate, voluntary petitions for relief under Chapter 11 of the Bankruptcy Code
(the “Filings”), along with a motion for an order directing that their separate
Chapter 11 cases (together, the “Cases”) be jointly administered by the
Bankruptcy Court pursuant to Bankruptcy Rule 1015(b).

    
      
         

      

      
        3

        
          

        

      

      
         

      

    

    Pursuant
to the Bankruptcy Code, only Holders of Allowed Claims in Classes 2A, 2B, 3A,
and 3B (collectively, the “Voting Classes”), each of which are impaired, are
entitled to vote on the Plan.  Creditors in Classes 1, 2C, and
2D are deemed to have accepted the Plan because they are not impaired and,
therefore, are not entitled to vote on the Plan with respect to the Claims in
these Classes.  Holders of Claims and Interests (as applicable) in
Classes 4, 5, and 6 will receive no distribution under the Plan on
account of their Claims and Interests (other than as may be set forth in Plan
Section 5.7 with respect to Class 5 Intercompany Claims); therefore, the Holders
of Claims and Interests (as applicable) in those Classes are deemed to have
rejected the Plan and, pursuant to Bankruptcy Code § 1126(g), are not entitled
to vote to accept or to reject the Plan.  For a description of the
various Classes of Claims and Interests and their respective treatment under the
Plan, see the section below entitled “The Plan of Reorganization.”

     

    For the
Plan to be confirmed, it must be accepted by at least one Class of Claims that
is impaired under the Plan (determined without including any acceptance of the
Plan by any insider of the Debtors).  Under Bankruptcy Code § 1126(c),
an impaired Class of Claims has accepted the Plan if Creditors representing at
least two-thirds in dollar amount and more than one-half in number of the
Allowed Claims that have actually voted in that Class have voted to accept the
Plan; provided that the vote of any Creditor whose acceptance or rejection is
determined by the Bankruptcy Court not to have been cast in good faith will not
be counted.  Any Voting Class that fails to accept the Plan is
considered to have rejected the Plan.  Also, under Bankruptcy Code
§ 1126, any Class that does not receive or retain any property under the
Plan is deemed to have rejected the Plan.

     

    Bankruptcy
Code § 1129(b) permits confirmation of the Plan notwithstanding its rejection
(or deemed rejection) by one or more impaired Class if the Bankruptcy Court
finds that the Plan (i) has been accepted by at least one impaired Class of
Claims (not including the votes of insiders), (ii) meets the other requirements
under Bankruptcy Code § 1129(a) for confirmation, (iii) does not
“discriminate unfairly,” and (iv) is “fair and equitable” with respect to the
rejecting Class or Classes.   The Debtors believe that at least
Class 2A and Class 2B, which are both impaired, will vote, as Classes, to accept
the Plan in accordance with Bankruptcy Code § 1126, as the Debtors and the
Holders of Claims in such Classes have reached an agreement regarding the
principal terms of the Plan.  Moreover, the Debtors are hopeful that
Class 3A and/or Class 3B will also vote, as Classes, to accept the Plan in
accordance with Bankruptcy Code § 1126 because the Debtors believe that Holders
of Allowed Claims in these Classes will receive a greater recovery under the
Plan than they would in a hypothetical liquidation involving the Debtors under
Chapter 7 of the Bankruptcy Code.  NOTWITHSTANDING THE DEEMED
REJECTION OF THE PLAN BY IMPAIRED CLASSES 4, 5, AND 6, THE DEBTORS INTEND TO
REQUEST THAT THE BANKRUPTCY COURT, PURSUANT TO BANKRUPTCY CODE § 1129(b),
CONFIRM THE PLAN UPON FINDING THAT ALL OF THE FOREGOING REQUIREMENTS HAVE BEEN
MET.  For a more detailed description of the requirements for
acceptance of the Plan and of the criteria for confirmation notwithstanding the
rejection or deemed rejection of the Plan by certain Classes, see the section
below entitled “Confirmation of the Plan.”

    
      
         

      

      
        4

        
          

        

      

      
         

      

    

    AMENDMENTS
TO THE PLAN’S CLASSIFICATION AND TREATMENT OF ONE OR MORE CLASSES THAT DO NOT
MATERIALLY AND ADVERSELY CHANGE THE TREATMENT OF ANY OTHER CLASS MAY BE
MADE.  SUCH AMENDMENTS MAY BE APPROVED BY THE BANKRUPTCY COURT AT THE
CONFIRMATION HEARING OR AT SOME OTHER TIME WITHOUT ENTITLING THE MEMBERS OF ANY
CLASS WHOSE TREATMENT IS NOT MATERIALLY AND ADVERSELY CHANGED TO WITHDRAW ANY
VOTES CAST FOR OR AGAINST THE PLAN.

     

    All votes
to accept or to reject the Plan must be cast by using the ballot (each, a
“Ballot” and collectively, the “Ballots”) enclosed with this Disclosure
Statement (or manually executed copies thereof).  No other votes will
be counted.  Consistent with the provisions of Bankruptcy Rule 3018,
the Bankruptcy Court has fixed _:__ p.m. (Prevailing Eastern Time) on _________
__, 2009 (the “Record Date”), as the time and date for the determination of the
Holders of record of Claims that are entitled to receive a copy of this
Disclosure Statement and all related materials and to vote to accept or to
reject the Plan.

     

    TO BE
COUNTED, BALLOTS MUST BE COMPLETED, SIGNED, AND RECEIVED BY _:__ P.M.
(PREVAILING EASTERN TIME) ON _____________ __, 2009, OR SUCH LATER DATE TO WHICH
THIS SOLICITATION IS EXTENDED BY THE BANKRUPTCY COURT (THE “VOTING
DEADLINE”).

     

    BALLOTS
TO ACCEPT OR TO REJECT THE PLAN MAY BE REVOKED AT ANY TIME PRIOR TO THE VOTING
DEADLINE, ON OR BEFORE _:__ P.M. (PREVAILING EASTERN TIME) ON ____________ __,
2009.  THEREAFTER, BALLOTS MAY BE REVOKED ONLY WITH THE APPROVAL OF
THE DEBTORS OR THE BANKRUPTCY COURT.

     

    Please
vote and return your Ballot(s) to the Debtors’ claims, noticing, and balloting
agent (the “Claims Agent”) via United States mail, overnight delivery, or hand
delivery:

     

    If
by mail:

    Donlin,
Recano & Company, Inc.

    Re:  Aurora
Oil & Gas Corporation, et al.

    Attn:  Voting
Department

    P.O. Box
2034

    Murray
Hill Station

    New York,
NY 10156

    

    If
by hand delivery or overnight courier, send to:

    Donlin,
Recano & Company, Inc.

    Re:  Aurora
Oil & Gas Corporation, et al.

    Attn:  Voting
Department

    419 Park
Avenue South

    New York,
NY 10016

     

    If
delivery is by mail, enough time should be allowed to ensure timely delivery
prior to the Voting Deadline.  For a more complete description of
voting procedures, see the section below entitled “Voting
Instructions.”

     

    If you
have any questions about the Plan, this Disclosure Statement, or procedures for
voting, or if you did not receive a Ballot, received a damaged Ballot, or have
lost your Ballot, please call the Claims Agent at (212) 771-1128 or visit
http://www.donlinrecano.com/aurora.

    
      
         

      

      
        5

        
          

        

      

      
         

      

    

    The
Bankruptcy Court has scheduled the Confirmation Hearing
for  ____________ __, 2009 at __:__ _M. (Prevailing Eastern Time),
before The Honorable Scott W. Dales, United States Bankruptcy Court, Courtroom
A, One Division Avenue, N.W., Grand Rapids,
Michigan  49503-3132.  The Bankruptcy Court has directed
that objections, if any, to confirmation of the proposed Plan must be served and
filed on or before _________ __, 2009, at _:__ p.m. (Prevailing Eastern
Time), in the manner described under the section below entitled “Confirmation of
the Plan — Confirmation Hearing.”

     

    THE
DEBTORS BELIEVE THAT ACCEPTANCE OF THE PLAN IS IN THE BEST INTERESTS OF THE
DEBTORS’ ESTATES AND URGE ALL CLASSES OF CREDITORS ENTITLED TO VOTE THEREON TO
VOTE TO ACCEPT THE PLAN.

     

    III.           VOTING
INSTRUCTIONS

     

    A.           Voting
Procedures.

     

    The
Debtors are providing copies of this Disclosure Statement, and, where
appropriate, Ballots, to all Holders of Claims that are entitled to vote on the
Plan.

     

    Classes
2A, 2B, 3A, and 3B are impaired and, therefore, all Holders of Allowed Claims in
such Classes as of the Record Date are entitled to vote to accept or to reject
the Plan.  Classes 4, 5, and 6 are also impaired but, pursuant to
Bankruptcy Code § 1126(g), because the Holders of Claims or Interests (as
applicable) in such Classes would not receive or retain any property under the
Plan on account of such Claims or Interests (subject to the provisions of Plan
Section 5.7 in the case of Class 5 Intercompany Claims), such Classes are deemed
to have rejected the Plan and are not entitled to vote thereon.

     

    Except as
provided below, unless the Ballot being furnished is timely submitted on or
prior to the Voting Deadline, together with any other documents required by such
Ballot, the Debtors may, in their sole discretion, reject such Ballot as invalid
and, therefore, decline to utilize it in connection with seeking confirmation of
the Plan by the Bankruptcy Court.

     

    In the
event of a dispute with respect to a Claim, any vote to accept or to reject the
Plan cast with respect to such Claim will not be counted for purposes of
determining whether the Plan has been accepted or rejected, unless the
Bankruptcy Court orders otherwise.

     

    The
following procedures will be utilized in tabulating votes contained on
Ballots:

     

    
      	
               
      

            	
              a.

            	
              Any
      party holding or acquiring multiple Claims within the same Class will be
      deemed to be casting a single vote on account of all such Claims in the
      aggregate amount thereof for purposes of Bankruptcy Code § 1126(c), and
      will not be deemed to be casting a separate vote on account of each such
      Claim;

            

    

     

    
      	
               
      

            	
              b.

            	
              Any
      Ballot cast by a person or entity that does not hold a Claim in a Voting
      Class will not be counted;

            

    

    
      
         

      

      
        6

        
          

        

      

      
         

      

    

    
      	
               
      

            	
              c.

            	
              All
      votes must be cast either to accept or to reject the Plan and may not be
      split;

            

    

     

    
      	
               
      

            	
              d.

            	
              To
      the extent that a creditor has filed a proof of claim that is for an
      unliquidated amount or is contingent, or the Debtors’ Schedules list such
      creditor as having an unliquidated or contingent Claim, the applicable
      creditor shall be deemed to be voting such Claim for an amount equal to
      $1.00 for all purposes with respect to the Plan or the Confirmation
      Hearing;

            

    

     

    
      	
               
      

            	
              e.

            	
              Any
      Ballot that partially rejects and partially accepts the Plan will be
      deemed to be an acceptance of the
Plan;

            

    

     

    
      	
               
      

            	
              f.

            	
              Except
      as the Debtors may otherwise agree in their absolute discretion, any
      otherwise properly executed Ballot which either fails to indicate an
      acceptance or rejection of the Plan, or which indicates both an acceptance
      and a rejection of the Plan, will be deemed to be a vote to accept the
      Plan;

            

    

     

    
      	
               
      

            	
              g.

            	
              Except
      as the Debtors may otherwise agree, a Ballot received by facsimile,
      e-mail, or any other electronic means will not be
  counted;

            

    

     

    
      	
               
      

            	
              h.

            	
              Except
      as the Debtors may otherwise agree, only Ballots properly executed and
      timely received by the Claims Agent will be
  counted;

            

    

     

    
      	
               
      

            	
              i.

            	
              The
      Debtors may waive any defect in any Ballot at any time, whether before or
      after the Voting Deadline;

            

    

     

    
      	
               
      

            	
              j.

            	
              The
      Debtors reserve the right either to reject any and all Ballots not in
      proper form or to otherwise attempt to cure any and all defective
      Ballots;

            

    

     

    
      	
               
      

            	
              k.

            	
              Any
      Ballot that is illegible or contains insufficient information to permit
      identification of the claimant will not be
  counted;

            

    

     

    
      	
               
      

            	
              l.

            	
              Except
      as the Debtors may otherwise agree in their absolute discretion, only
      Ballots bearing an original signature on the line adjacent to the
      “Signature:” label in the authorization section therein shall be
      counted;

            

    

     

    
      	
               
      

            	
              m.

            	
              If
      no votes to accept or to reject the Plan are received with respect to a
      particular Voting Class, such Class will be deemed to have voted to accept
      the Plan;

            

    

     

    
      	
               
      

            	
              n.

            	
              Whenever
      a claimant casts more than one Ballot voting the same claim(s) prior to
      the Voting Deadline, only the last properly executed ballot received by
      the Claims Agent on or prior to the Voting Deadline shall be counted;
      and

            

    

    
      
         

      

      
        7

        
          

        

      

      
         

      

    

    
      	
               
      

            	
              o.

            	
              If,
      prior to the Voting Deadline, the Debtors have (i) filed an objection to
      fully disallow or expunge any Proof of Claim or (ii) scheduled any Claim
      on its Schedules as disputed, the applicable claimant's vote shall not be
      counted for any purpose with respect to the Plan or the Confirmation
      Hearing unless and until such claimant obtains an order from the
      Bankruptcy Court providing otherwise.  If, prior to the Voting
      Deadline, the Debtors have filed an objection seeking to partially
      disallow or expunge any Proof of Claim, the applicable claimant's vote
      will be counted for all purposes with respect to the Plan or the
      Confirmation Hearing solely to the extent of the undisputed portion of
      such Claim, unless and until such claimant obtains an order from the
      Bankruptcy Court providing
otherwise.

            

    

     

    If a
Ballot is signed by trustees, executors, administrators, guardians,
attorneys-in-fact, officers of corporations, or others acting in a fiduciary or
representative capacity, each such person should indicate such capacity when
signing its Ballot and, if so requested by the Debtors, must submit proper
evidence satisfactory to the Debtors of its authority to so act.

     

    B.           Ballots.

     

    Those
Creditors entitled to vote on the Plan will find a Ballot accompanying this
Disclosure Statement.  Except as otherwise set forth herein in the
section below entitled “Additional Voting Procedures,” please fill out the
Ballot and return it to the Claims Agent at the following address:

     

    If
by mail:

    Donlin,
Recano & Company, Inc.

    Re:
Aurora Oil & Gas Corporation, et al.

    Attn:  Voting
Department

    P.O. Box
2034

    Murray
Hill Station

    New York,
NY 10156

    

    If
by hand delivery or overnight courier, send to:

    Donlin,
Recano & Company, Inc.

    Re:
Aurora Oil & Gas Corporation, et al.

    Attn:  Voting
Department

    419 Park
Avenue South

    New York,
NY 10016

    

    Ballots
must be received on or before _:__ p.m. (Prevailing Eastern Time) on the Voting
Deadline, ________ __, 2009, to be counted in the voting.  Ballots
received after this time may not be counted in the voting.  If you
have any questions about the procedures for voting, or if you did not receive a
Ballot, received a damaged Ballot, or have lost your Ballot, please call the
Claims Agent at (212)-771-1128 or visit
http://www.donlinrecano.com/aurora.

    
      
         

      

      
        8

        
          

        

      

      
         

      

    

    C.           Withdrawal
or Revocation of Ballots.

     

    Ballots
may be withdrawn or revoked at any time prior to _:__ p.m. (Prevailing Eastern
Time) on ___________ __, 2009.  Thereafter, Ballots may be withdrawn
or revoked only with the approval of the Debtors or the Bankruptcy
Court.

     

    D.           Waivers
of Defects, Irregularities, Etc.

     

    All
questions as to the validity, form, eligibility (including time of receipt),
acceptance, revocation, and withdrawal of Ballots will be determined by the
Debtors, and their determination (unless otherwise directed by the Bankruptcy
Court) will be final and binding.

     

    The
Debtors reserve the right to contest the validity of any revocation or
withdrawal of any Ballot.  The Debtors also reserve the right to
reject any and all Ballots not in proper form, the acceptance of which would, in
the opinion of the Debtors, be in violation of applicable law or
procedure.  The Debtors further reserve the right to waive any
defects, irregularities, or conditions of delivery as to any particular
Ballot.  Unless waived, any defects or irregularities in connection
with deliveries of Ballots must be cured within such time as the Debtors (or the
Bankruptcy Court) determine.

     

    Neither
the Debtors nor any other person will be under any duty to provide notification
of defects or irregularities with respect to deliveries of Ballots nor will any
of them incur any liabilities for failure to provide such
notification.  Unless otherwise ordered by the Bankruptcy Court,
delivery of such Ballots will not be deemed to have been made until such
irregularities have been cured or waived.  Ballots previously
furnished (and as to which any irregularities have not theretofore been cured or
waived) will be invalid.

     

    IV.           OVERVIEW
OF THE PLAN

     

    The
following table briefly summarizes the classification and treatment of Claims
and Interests under the Plan.  This summary is qualified in its
entirety by reference to the provisions of the Plan, a copy of which is attached
hereto as Exhibit A.  In addition, for a more detailed description of
the terms and provisions of the Plan, see the section below entitled “The Plan
of Reorganization.”

     

    As
contemplated under the Bankruptcy Code, Administrative Claims, DIP Facility
Claims, and Tax Claims are not classified under the Plan.  Under the
Plan, each Holder of an Allowed Administrative Claim other than a Holder of an
Allowed DIP Facility Claim (which Claims will be treated and satisfied in the
manner set forth in Plan Section 3.2) will receive, in full satisfaction,
settlement, release, and discharge of, and in exchange for, such Allowed Claim,
Cash equal to the amount of such Allowed Claim on the later of (i) the Initial
Distribution Date and (ii) the date that is 10 days after the Allowance Date,
except to the extent that such Holder has agreed to a less favorable treatment
of such Allowed Claim; provided, however, that Allowed
Administrative Claims representing obligations incurred in the ordinary course
of business and assumed by the Debtors will be paid or performed in accordance
with the terms and conditions of the particular transactions and any agreements
related thereto.

    
      
         

      

      
        9

        
          

        

      

      
         

      

    

    On the
Effective Date (or as soon thereafter as is practicable), (a) each Holder of an
Allowed DIP Facility Claim will receive, in full satisfaction, settlement,
release, and discharge of, and in exchange for, such Allowed Claim, Cash in an
amount equal to such Holder’s Pro Rata share of the aggregate amount of the
outstanding Allowed DIP Facility Claims, which payments will collectively be in
the amount equal to the aggregate outstanding amount of the Allowed DIP Facility
Claims, and (b) either (i) the DIP Facility Lenders will receive
cancellation without draw of all outstanding letters of credit issued under the
DIP Facility or (ii) such outstanding letters of credit will be replaced
with, to the extent practicable, or supported by, new letters of credit to be
issued under the Exit Credit Facility.

     

    Each
Holder of an Allowed Tax Claim will receive, in full satisfaction, settlement,
release, and discharge of, and in exchange for, such Allowed Claim, at the
election of the applicable Debtor, either (i) Cash equal to the amount of such
Allowed Claim on the later of (a) the Initial Distribution Date and (b) the date
that is 30 days after the Allowance Date, except to the extent such Holder has
agreed to a less favorable treatment of such Allowed Claim, or (ii) in
accordance with Bankruptcy Code § 1129(a)(9)(C), deferred Cash payments
(a) of a value, as of the Effective Date, equal to the amount of such
Allowed Tax Claim, (b) over a period not exceeding five years after the Petition
Date, and (c) in a manner not less favorable than the treatment of than the most
favored nonpriority unsecured Claim provided for by the Plan, except to the
extent such Holder has agreed to a less favorable treatment of such Allowed
Claim.

     

    The table
below summarizes the classification and treatment of the various Claims and
Interests under the Plan.  For certain classes of Claims, estimated
percentage recoveries are also set forth.  The value of consideration
to be provided was determined based upon the Debtors’ review of their respective
books and records and includes estimates of a number of Claims that are
contingent, disputed, and/or unliquidated.  For certain classes of
Claims, the actual amounts of Allowed Claims could materially exceed or could be
materially less than the estimated amounts shown.

     

    
      
        
          	
                  Class

                	 
      	
                  Description

                	 
      	
                  Treatment

                	 
      	
                  Estimated

                  Recovery

                
	
                  N/A

                	 
      	
                  Administrative
      Claims

                	 
      	
                  Unimpaired.

                	 
      	
                  100%

                
	
                  N/A

                	 
      	
                  DIP
      Facility Claims

                	 
      	
                  Unimpaired.

                	 
      	
                  100%

                
	
                  N/A

                	 
      	
                  Tax
      Claims

                	 
      	
                  Unimpaired.

                	 
      	
                  100%

                
	
                  1

                	 
      	
                  Priority
      Claims

                	 
      	
                  Unimpaired.

                	 
      	
                  100%

                
	
                  2A

                	 
      	
                  First
      Lien Loan Claims

                	 
      	
                  Impaired:  each
      Holder of an Allowed Class 2A Claim as of the Distribution Record Date
      will receive such Holder’s Pro Rata share of the New Secured Notes and
      [32] million shares of New Aurora Preferred Stock.

                	 
      	
                  [63%]

                
	
                  2B

                	 
      	
                  Second
      Lien Loan Claims

                	 
      	
                  Impaired:  each
      Holder of an Allowed Class 2B Claim as of the Distribution Record Date
      will receive such Holder’s Pro Rata share of [56] million shares of New
      Aurora Class A Common Stock.

                	 
      	
                  [0.000002%]

                

        

      

    

     

    
      
        
        

      

      
        10

        
          

        

      

      
        
        

      

    

     

    
      
        
          	
                  Class

                	 
      	
                  Description

                	 
      	
                  Treatment

                	 
      	
                  Estimated

                  Recovery

                
	
                  2C

                	 
      	
                  Other
      Secured Claims Against Aurora or HPPC

                	 
      	
                  Unimpaired:  the
      applicable Debtor will, in its discretion, either:  (a) pay the
      amount of such Allowed Class 2C Claim in full, in Cash, on the later of
      the Effective Date or the Allowance Date of such Claim; (b) return the
      underlying collateral to the Holder of such Allowed Class 2C Claim; (c)
      Reinstate such Allowed Class 2C Claim in accordance with the provisions of
      Bankruptcy Code § 1124(2); (d) pay such Allowed Class 2C Claim in full in
      the ordinary course; or (e) treat such Allowed Class 2C Claim in a manner
      otherwise agreed to by the Holder thereof.

                	 
      	
                  100%

                
	
                  2D

                	 
      	
                  NW
      Bank Secured Claims

                	 
      	
                  Unimpaired:  the
      Holder of the Allowed Class 2D Claims will receive (i) ownership of the NW
      Bank Note Collateral and (ii) a release from the NW Bank LCs Collateral in
      an amount equal to any amounts previously drawn down from the NW Bank LCs,
      and at the Debtors’ election, (a) either the NW Bank LCs will be
      reinstated, in which case NW Bank will be entitled to retain the NW Bank
      LCs Collateral, or (b) the NW Bank LCs will be cancelled without further
      draw, in which case the remaining amount of the NW Bank LCs Collateral
      will be released to the Debtors or the Reorganized Debtors free of any
      liens, claims, or interests, of NW Bank.

                	 
      	
                  100%

                
	
                  3A

                	 
      	
                  General
      Unsecured Claims Against Aurora

                	 
      	
                  Impaired:  all
      Holders of Allowed Class 3A Claims will receive their Pro Rata Share of
      $150,000.

                	 
      	
                  Between
      [6% to 9%]

                
	
                  3B

                	 
      	
                  General
      Unsecured Claims Against HPPC

                	 
      	
                  Impaired:  all
      Holders of Allowed Class 3B Claims will receive their Pro Rata Share of
      $50,000.

                	 
      	
                  Between
      [72% to 100%]

                
	
                  4

                	 
      	
                  Old
      Aurora Common Stock Interests

                	 
      	
                  Impaired and Not Entitled to
      Vote:  all outstanding shares of Old Aurora Common Stock,
      and any and all other Interests in Aurora, will be cancelled and be deemed
      terminated and of no force and effect.

                	 
      	
                  0%

                
	
                  5

                	 
      	
                  Intercompany
      Claims

                	 
      	
                  Impaired and Not Entitled to
      Vote:  all Intercompany Claims will be reviewed by the
      Debtors and adjusted, continued, or discharged, as the Debtors determine,
      as appropriate (by, among other things, releasing such claims,
      contributing them to capital, issuing a dividend, or leaving them
      unimpaired), taking into account, among other things, the distribution of
      consideration under the Plan and the economic condition of the Reorganized
      Debtors, among other things.

                	 
      	
                  N/A

                
	
                  6

                	
                    

                	
                  Old
      HPPC Interests

                	
                    

                	
                  Impaired and Not Entitled to
      Vote:  all outstanding Old HPPC Interests, and any and
      all other Interests in HPPC, will be cancelled and be deemed terminated
      and of no force and effect.

                	
                    

                	
                  0%

                

        

      

    

    
      
         

      

      
        11

        
          

        

      

      
         

      

    

     

    ALTHOUGH THE DEBTORS BELIEVE THAT THE
ESTIMATED PERCENTAGE RECOVERIES SET FORTH ABOVE FOR CLASSES 2A, 2B, 3A, AND 3B
ARE REASONABLE AND APPROXIMATE THE ASSUMED RECOVERY, THERE IS NO ASSURANCE THAT
THE ACTUAL AMOUNTS OF ALLOWED CLAIMS IN SUCH CLASSES WILL NOT MATERIALLY EXCEED
THE ESTIMATED AGGREGATE CLAIM AMOUNTS ASSUMED IN THE TABLE ABOVE, OR THAT THE
ACTUAL PERCENTAGE RECOVERIES WILL NOT OTHERWISE BE SIGNIFICANTLY LESS THAN THE
ESTIMATED PERCENTAGE RECOVERIES SET FORTH ABOVE.  The actual
recoveries under the Plan by the Creditors in Classes 2A, 2B, 3A, and 3B will
depend upon a variety of factors including, but not limited to, the actual value
of the New Secured Notes, the New Aurora Class A Common Stock, the New Aurora
Preferred Stock, and the NW Bank Collateral, respectively, as well as the
ultimate amount of Allowed Class 3A Claims (including the NW Bank Note
Deficiency Claim) or Allowed Class 3B Claims.  Accordingly, no
representation can be or is being made with respect to whether each of the
estimated percentage recoveries with respect to Classes 2A, 2B, 3A, and 3B will
actually be realized by the Holder of an Allowed Claim in such
Classes.

     

    V.           GENERAL
INFORMATION

     

    A.           Corporate
Structure of the Debtors and Business History.

     

    The
Debtors, along with certain non-debtor affiliates,1
historically operated an independent energy business focused on the exploration
and development of natural gas reserves and owned and operated other businesses
that provided supplemental and support services.  The Debtors’ primary
prospect areas for natural gas are located in Michigan, Indiana, and Kentucky,
and a portion of their properties are currently managed by third parties under
joint ventures, “farm out” or similar agreements, whereby the Debtors receive a
percentage of revenue generated from those properties (and fund a portion of
expenses), rather than extracting and selling the natural gas
themselves.  The Debtors’ corporate headquarters are located in
Traverse City, Michigan.

     

    Aurora is
the Debtors’ main operating company.  Until recently, Aurora’s
outstanding common stock was publicly traded on the American Stock Exchange as
“AOG” and is currently traded over the counter as “AOGS.”

     

    Aurora
owns approximately 96% of the outstanding membership interests in HPPC, and it
is HPPC’s controlling member.  The remaining 4% of these interests is
collectively held by Barry A. Riske and Longhorn Properties
(“Longhorn”).  HPPC, a Michigan limited liability company, is a
natural gas transportation and processing company that owns certain of the
Debtors’ assets and properties and transports the Debtors’ natural gas to
processing facilities and other commercial pipelines.

     

      
        

      

    

    
      	
              1

            	
              These
      following direct or indirect wholly-owned or partially-owned subsidiaries
      of Aurora are not Debtors in these cases:  Aurora Indiana, LLC;
      Aurora Kentucky, LLC; AOG Michigan, LLC; Aurora Operating, LLC;
      Celebration Mining Company; Circle Oil, LLC; and Indiana Royalty Trustory,
      LLC.

            

    

    
      
         

      

      
        12

        
          

        

      

      
         

      

    

    Aurora
currently has 18 full-time employees and one part-time employee, none of which
are members of a union or parties to a collective bargaining
agreement.  HPPC does not have any independent employees, but rather,
it utilizes Aurora’s employees and other outside consultants on an as-needed
basis.  Prior to the Petition Date, the Debtors terminated the
services of their Chief Executive Officer and President and engaged Sanford R.
Edlein of Huron Consulting Group as Chief Restructuring Officer in June of
2009.  Mr. Edlein continues to serve in such capacity.

     

    Under the
Plan, if confirmed, 100% of the new equity in Reorganized HPPC would be issued
to Reorganized Aurora.

     

    B.           Capital
Structure.

     

    
      	
               
      

            	
              1.

            	
              The First Lien
      Loan.

            

    

     

    The
Debtors are parties to a certain senior secured credit facility, dated as of
August 20, 2007 (as the same may have been further amended from time to time,
the “First Lien Loan”), in an aggregate amount of up to $100 million, of which
approximately $72 million was outstanding principal as of the Petition Date, by
and between Aurora, as borrower; BNP Paribas (“BNP”), as administrative agent,
sole lead arranger, and sole bookrunner; the Lenders, as such term is defined in
the First Lien Loan (together with all participants, if any, successors, and
assigns thereof, the “First Lien Loan Lenders”), as the lenders party thereto;
and the Guarantors (as such term is defined in the First Lien Loan Agreement),
including HPPC, as guarantors (together with all successors and assigns thereof,
the “First Lien Loan Guarantors”).  The borrowing base under the First
Lien Loan was based primarily upon the estimated value of the Debtors’ oil and
natural gas reserves.  The security for the First Lien Loan is
substantially all of the Debtors’ oil and natural gas properties; guarantees
from all material subsidiaries; and a pledge of 100% of the Debtors’ stock or
member interests of subsidiaries.

     

    On June
6, 2008, BNP notified the Debtors that the First Lien Loan Lenders had
redetermined the Debtors’ borrowing base to be $50 million.  As a
result, there was a potential deficiency of as much as $20 million.

     

    On June
12, 2008 (but effective as of June 2, 2008), the Debtors entered into a
forbearance agreement and amendment no. 1 to the First Lien Loan (the “First
Forbearance Agreement”) with BNP and the First Lien Loan Lenders.  In
accordance with the First Forbearance Agreement, BNP (on behalf of the First
Lien Loan Lenders) permanently waived any defaults or events of default
resulting from the non-compliance with any covenant failures that occurred prior
to and including March 31, 2008.  BNP, on behalf of the First Lien
Loan Lenders, also agreed to forbear and refrain from (i) accelerating any loans
outstanding, (ii) exercising all rights and remedies, and (iii) taking any
enforcement action under the First Lien Loan or otherwise as a result of certain
potential covenant defaults during the period from June 2, 2008, until August
15, 2008 (the “Standstill Period”), provided that the Debtors complied with
certain forbearance covenants (collectively, the “First Forbearance
Covenants”).  The First Forbearance Covenants require the Debtors (x)
to deliver to the First Lien Loan Lenders on or before the 20th business day of
each month a detailed monthly financial reporting package for the previous month
that included an account payables aging, working capital, monthly production
reports, and lease operating statements, (y) to participate in monthly
conference calls with the First Lien Loan Lenders during which a financial
officer would provide the First Lien Loan Lenders with an update on
restructuring and cost reduction efforts, and (z) no later than August 18, 2008,
to execute (or cause to be executed) additional mortgages such that, after
giving effect to such additional mortgages, the First Lien Loan Lenders would
have liens on not less than 90% of PV10 of all proved oil and gas properties
evaluated in the reserve report most recently delivered prior to such
date.  The First Forbearance Agreement also increased the additional
margin spread from 2% to 3% when electing a LIBOR-based borrowing
rate.

    
      
         

      

      
        13

        
          

        

      

      
         

      

    

    On
October 3, 2008, the Debtors received a notice of default from BNP with respect
to the First Lien Loan (the “Notice of Default”).  The Notice of
Default stated that an event of default had occurred under the following
sections of the First Lien Loan:  (1) Section 10.01(a), due to the
Debtors’ failure to pay the first of three principal borrowing base deficiency
payments in the approximate amount of $6.6 million, (2) Section 10.01(g), due to
the swap termination amount in connection with the Early Termination Notice (as
defined below) exceeding $500,000, and (3) Section 10.01(f), due to the Debtors’
failure to pay the settlement amount of approximately $2.2 million by the due
date of October 2, 2008 in connection with the Early Termination
Notice.  The Notice of Default further stated that an event of default
had occurred under Sections 8.14, 8.18, and 9.01 of the First Lien Loan and the
Second Lien Loan (i.e., a cross-default) due to the Debtors’ failure to comply
with certain financial and non-financial covenants.  The Notice of
Default informed the Debtors that as of October 1, 2008, the First Lien Loan
would bear interest at the default rate, thereby increasing the Debtors’ annual
interest rate thereunder by 2% to approximately 8%.

     

    On
February 12, 2009, the Debtors entered into a second forbearance agreement to
the First Lien Loan (the “Second Forbearance Agreement”) with BNP and the First
Lien Loan Lenders.  In accordance with the Second Forbearance
Agreement, during the period from December 31, 2008 until April 30, 2009 (the
“Second Forbearance Period”), BNP (on behalf of the First Lien Loan Lenders)
agreed to forbear and refrain from (i) accelerating any loans outstanding and
(ii) taking any other enforcement action under the First Lien Loan at law or
otherwise as a result of designated defaults or potential defaults, provided the
Debtors complied with certain forbearance covenants (collectively, the “Second
Forbearance Agreement Covenants”).  The Second Forbearance Agreement
Covenants were as follows:  (i) the Debtors would retain and employ a
financial advisor, (ii) the Debtors would deliver to BNP an initial detailed
budget on or before February 20, 2009, and provide subsequent monthly updates,
(iii) the Debtors would deliver to BNP prior week aggregated cash balances on or
before the last business day of the current week, (iv) no later than February
23, 2009, the Debtors would execute (or cause to be executed) additional
mortgages and no later than February 18, 2009, the Debtors would execute (or
cause to be executed) other security instruments such that, after giving effect
to such additional mortgages and other security instruments, the First Lien Loan
Lenders would have liens on 100% of the Debtors’ oil and gas properties,
promissory notes, all significant overriding royalties, and all significant farm
out agreements prior to such date, (v) the Debtors were required to obtain prior
written approval from BNP to farm out any assets or sell any assets for more
than $200,000, (vi) the Debtors would provide BNP notice of any unwritten or
written expressions of interest with respect to the purchase of assets of the
Debtors or any of their subsidiaries for an amount in excess of $2 million,
(vii) the Debtors and their financial advisor would participate in weekly
conference calls with BNP and the First Lien Loan Lenders during which a
financial officer of the Debtors was required to provide updates on
restructuring, sale prospects, and cost reduction efforts, (viii) the Debtors
were required to deliver to BNP copies of any detailed audit reports, management
letters, or recommendations submitted to their board of directors, (ix) no later
than February 28, 2009, the Debtors were required to deliver a restructuring
plan to resolve the borrowing base deficiency, (x) the Debtors were required to
maintain a liquidity position of at least $4 million during the Second
Forbearance Period, and (xi) no later than February 23, 2009, the Debtors were
required to obtain the consent of the Second Lien Loan Lenders for them to defer
until no earlier than the termination of the Second Forbearance Period, payment
of the scheduled interest payment payable to the Second Lien Loan Lenders on
February 24, 2009.

    
      
         

      

      
        14

        
          

        

      

      
         

      

    

    

      On
February 18, 2009, the Debtors executed the mortgages, security agreement, and
pledge agreements necessary to provide the First Lien Loan Lenders a first
priority secured lien on substantially all of the Debtors’ oil and gas
properties not previously pledged to them.  The Debtors also complied
with the other Second Forbearance Covenants, except that they did not obtain the
consent of the Second Lien Loan Lenders to defer payment of the $1.6 million
interest payment scheduled to be paid by them on February 24,
2009.  The Debtors received correspondence from BNP dated February 27,
2009, indicating that the First Lien Loan Lenders had agreed not to declare a
forbearance termination event as a result of the Debtors’ failure to obtain this
consent of the Second Lien Loan Lenders, as long as the Debtors did not actually
make the interest payment to the Second Lien Loan Lenders during the Second
Forbearance Period, which they did not do.

       

      Pursuant
to the Forbearance and Tolling Agreement, dated as of May 1, 2009 (the “May 2009
Forbearance and Tolling Agreement”), between the Debtors, BNP, and D.E. Shaw
Laminar Portfolios, L.L.C. (“DE Shaw”), and the Pre-Petition Secured Lenders (as
defined below), each of the Pre-Petition Secured Lenders agreed to forbear both
from accelerating any loans under the First Lien Loan or the Second Lien Loan
(as applicable) until and including June 15, 2009 (the “June 2009 Forbearance
Period”) and from taking any other enforcement action under the operative loan
documents at law, in equity, or otherwise, in each case as a result of any
defaults thereunder.  The May 2009 Forbearance and Tolling Agreement
further provided that, in the event the Debtors were to commence voluntary
bankruptcy cases during the June 2009 Forbearance Period, in order to preserve
their right to assert that the additional collateral pledged to the Pre-Petition
Secured Lenders pursuant to the Second Forbearance Agreement and the (Second)
Second Lien Forbearance Agreement (as defined below) were still potentially
avoidable transfers (the “Additional Pre-Petition Collateral”), the Pre-Petition
Secured Lenders agreed, among other things, that the period of time in which
such transfers would be potentially avoidable for purposes of Bankruptcy Code §
547(b)(4)(A) was extended to and including June 15, 2009.  On June 15,
2009, the Debtors and the Pre-Petition Secured Lenders entered into that certain
First Amended Forbearance and Tolling Agreement (the “Amended 2009 Forbearance
and Tolling Agreement”), pursuant to which the June 2009 Forbearance Period and
the date for the potential avoidability of the Additional Pre-Petition
Collateral were each extended to and including July 15, 2009.

       

      As of the
date hereof, the Debtors were liable under the First Lien Loan in the aggregate
amount of $73,841,382.22, consisting of $72,021,445.73 in principal amount as of
the Petition Date and the remainder in accrued and unpaid interest, hedge
termination and costs and expenses including attorney’s fees, agent’s fees,
other professional fees and disbursements, and other obligations owing under the
First Lien Loan.
 

      
        
           

        

        
          15

          
            

          

        

        
           

        

      

      As
described further below, by orders dated July 17, 2009 and August 10, 2009, the
Bankruptcy Court approved, on an interim and final basis, the Debtors’ use of
the First Lien Loan Lenders’ cash collateral, subject to a budget and certain
other terms and conditions.  The orders authorizing the Debtors’ use
of cash collateral contained certain findings as to the Allowed Claims and liens
of the First Lien Loan Lenders, and established a deadline for the official
committee of unsecured creditors in these Cases (the “Creditors Committee”) and
other parties-in-interest in these Cases to file an adversary proceeding or a
contested matter or else be bound thereby.

       

      
        	
                 
      

              	
                2.

              	
                The Second Lien
      Loan.

              

      

       

      Also, on
August 20, 2007, the Debtors entered into that certain second lien term loan
agreement, in an initial amount of up to $50 million (as the same may have been
amended from time to time, the “Second Lien Loan”), by and between Aurora, as
borrower; DE Shaw, as successor administrative agent, sole lead arranger, and
sole bookrunner; the Lenders, as such term is defined in the Second Lien Loan
(together with all participants, if any, successors, and assigns thereof, the
“Second Lien Loan Lenders,” and together with the First Lien Loan Lenders, the
“Pre-Petition Secured Lenders”)), as the lenders party thereto; and the
Guarantors (as such term is defined in the Second Lien Loan Agreement),
including HPPC, as guarantors (together with all successors and assigns thereof,
the “Second Lien Loan Guarantors”).

       

      On June
12, 2008 (but as of June 2, 2008), the Debtors entered into a forbearance
agreement and amendment no. 1 to the Second Lien Loan (the “Second Lien Loan
Forbearance Agreement”) with BNP and the Second Lien Loan
Lenders.  The terms of the Second Lien Loan Forbearance Agreement
mirror the terms of the First Lien Loan Forbearance Agreement.

       

      On
October 6, 2008, the Debtors received a notice of default from DE Shaw with
respect to the Second Lien Loan (the “Second Lien Loan Notice of
Default”).  The Second Lien Loan Notice of Default stated that an
event of default had occurred under the following sections of the Second Lien
Loan:  (1) Section 10.01(g), due to the swap termination amount in
connection with the Early Termination Notice exceeding $500,000, (2) Section
10.01(f), due to the Debtors’ failure to pay the settlement amount of
approximately $2.2 million by the due date of October 2, 2008 in connection with
the Early Termination Notice, and (3) Sections 10.01(f) and (g), due to the
Debtors’ failure to pay the first of three principal borrowing base deficiency
payments in the approximate amount of $6.6 million under Section 10.01(a) of the
First Lien Loan (i.e., a cross-default).  The Second Lien Notice of
Default also stated that an event of default had occurred under Sections 8.14,
8.18, and 9.01 of the Second Lien Loan and the First Lien Loan (i.e.
cross-default) due to the Debtors’ failure to comply with certain financial and
non-financial covenants.  DE Shaw and the Second Lien Loan Lenders
were prevented from taking any enforcement or similar actions against the
Debtors or their property for at least 180 days beginning November 24, 2008
pursuant to the terms of the Intercreditor Agreement, dated August 20, 2007,
between the Second Lien Loan Lenders and the First Lien Loan
Lenders.  The Second Lien Loan Notice of Default informed the Debtors
that as of October 1, 2008, the Second Lien Loan would bear interest at the
default rate, thereby increasing the Debtors’ interest rate under the Second
Lien Loan by 2% to approximately 15.5%.
 

      
        
           

        

        
          16

          
            

          

        

        
           

        

      

      The
Debtors engaged in discussions with DE Shaw and the Second Lien Loan Lenders to
restructure their debt under the Second Lien Loan.  As of the Petition
Date, DE Shaw had not taken any enforcement action to collect payment on the
Second Lien Loan.  Prior to the Petition Date, the Debtors recognized
that the Second Lien Loan was due and payable upon notification from DE
Shaw.

       

      In
addition, Aurora and DE Shaw, on behalf of the Second Lien Loan Lenders, entered
into a further forbearance agreement on or about February 12, 2009, pursuant to
which Aurora granted to DE Shaw, on behalf of the Second Lien Loan Lenders,
second priority liens on additional collateral and executed and delivered
additional mortgages to secure the obligations under the Second Lien
Loan.  Also, as noted above, the Second Lien Loan Lenders executed the
2009 Forbearance and Tolling Agreement and the Amended 2009 Forbearance and
Tolling Agreement, the result of which was that the June 2009 Forbearance Period
and the date for the potential avoidability of the Additional Pre-Petition
Collateral were each extended to and including July 15, 2009.

       

      As of the
date hereof, the Debtors were liable to the Second Lien Loan Lenders in the
aggregate principal and accrued and unpaid interest amount of $56,087,440.27,
plus costs and expenses including, attorney’s fees, agent’s fees, other
professional fees and disbursements, and other obligations owing under the
Second Lien Loan.

       

      As
described further below, by orders dated July 17, 2009 and August 10, 2009, the
Bankruptcy Court approved, on an interim and final basis, the Debtors’ use of
the Second Lien Loan Lenders’ cash collateral, subject to a budget and certain
other terms and conditions.  The orders authorizing the Debtors’ use
of cash collateral contained certain findings as to the Allowed Claims and liens
of the Second Lien Loan Lenders and established a deadline for the Creditors
Committee and other parties in these Cases to file an adversary proceeding or a
contested matter or else be bound thereby.

       

      
        	
                 
      

              	
                3.

              	
                Northwestern Bank
      Agreements.

              

      

       

      On or
about September 19, 2005, Aurora entered into a promissory note (the “NW Bank
Note”) with Northwestern Bank (“NW Bank”), secured by a mortgage on Aurora’s
corporate headquarters in Traverse City.  As of the Petition Date, the
balance on the NW Bank Note was approximately $2.6 million.

       

      In
addition, NW Bank issued approximately $633,000 in principal amount of letters
of credit on the Debtors’ account there (collectively, the “NW Bank LCs”) that
are required for the Debtors’ operations in Michigan.  The NW Bank LCs
are secured by approximately $160,000 in cash collateral currently in one of
Aurora’s bank accounts with NW Bank and a pledge of the Debtors’ right to
receive approximately $500,000.

       

      As
described further below, under the Plan, the Debtors would elect either that (a)
the NW Bank LCs will be reinstated, in which case NW Bank will be entitled to
retain the NW Bank LCs Collateral, or (b) the NW Bank LCs will be cancelled
without further draw, in which case the remaining amount of the NW Bank LCs
Collateral will be released to the Debtors or the Reorganized Debtors free of
any liens, claims, or interests, of NW Bank.  The Debtors have not yet
made this election as of the date hereof.
 

      
        
           

        

        
          17

          
            

          

        

        
           

        

      

      
        	
                 
      

              	
                4.

              	
                Master Equipment Lease with
      Fifth Third Bank.

              

      

       

      Aurora is
a party to a master equipment lease agreement, dated June 21, 2007 (the “Master
Lease Agreement”), with Fifth Third Bank.  On June 21, 2007, and
December 19, 2007, Aurora entered into two separate equipment leases under the
Master Lease Agreement for 13 compressors.

       

      Monthly
lease payments for both equipment leases are $45,823 until the expiration of the
first lease on January 1, 2013.  Upon expiration of the first lease,
the monthly payments would be reduced to $8,713 until the expiration of the
second lease on June 1, 2014.  The buyout provisions on the first and
second lease are estimated to be approximately $1.1 million and $0.3 million,
respectively.

       

      
        	
                 
      

              	
                5.

              	
                Debtor-in-Possession
      Financing.

              

      

       

      By motion
dated September 17, 2009, the Debtors sought Bankruptcy Court approval for a
debtor-in-possession financing facility consisting of a revolving loan in an
aggregate total principal amount not to exceed $3,000,000 (the “DIP
Facility”).  Following a hearing on October 2, 2009, the
Bankruptcy Court entered an order on October 6th authorizing the Debtors to
enter into the DIP Facility.  See the section below entitled “The DIP
Facility.”

       

      Specifically,
Aurora, as borrower; HPPC, as guarantor of Aurora’s obligations thereunder; and
the lenders party thereto (collectively, the “DIP Lenders”), have entered into
that certain Debtor-in-Possession Credit Agreement, dated as of October [7],
2009 (as the same may be amended, supplemented, or otherwise modified from time
to time, the “DIP Agreement”).  HPPC also executed that certain
Debtor-in-Possession Guaranty and Collateral Agreement, dated as of October [7],
2009 with respect to its obligations as the guarantor.  The DIP
Lenders are also certain of the Pre-Petition Secured Lenders.  BNP
Paribas, which is also the First Lien Loan Administrative Agent, is the
administrative agent and issuing bank under the DIP Agreement (in such capacity,
the “DIP Administrative Agent”).

       

      Subject
to the terms and conditions of the DIP Agreement, Aurora may request up to an
aggregate amount of $700,000 of the DIP Facility to be issued in Letters of
Credit.  The proceeds of the DIP Facility will be used to (a) to pay
transaction costs, fees, and expenses in connection with the DIP Facility, (b)
support the working capital and general corporate purposes of the Debtors, in
each case, solely as permitted under an agreed-upon budget, (c) make any other
payments permitted to be made in the applicable order or orders of the
Bankruptcy Court approving same or any other order of the Bankruptcy Court to
the extent not prohibited by the DIP Agreement, and (d) make any other payment
otherwise consented to by the majority of the DIP Lenders.  The
maturity date of the DIP Facility (the “Maturity Date”) is the earliest to occur
of (i) January 7, 2010, (ii) the date that is 30 days after the execution
thereof, solely to the extent that Bankruptcy Court’s order approving the DIP
Facility has not been entered prior to the conclusion of such 30-day period,
(iii) the date that the $3 million aggregate amount of the DIP Lenders’
commitments to make loans under the DIP Facility terminate and/or the
indebtedness of Aurora, HPPC, or any other guarantor under the DIP Facility is
accelerated, in each case, by the DIP Lenders upon the occurrence of an event of
default thereunder, and (iv) the effective date of any Plan, unless
terminated earlier in accordance with the terms of the DIP
Agreement.
 

      
        
           

        

        
          18

          
            

          

        

        
           

        

      

      The
Debtors will pay interest on the loans made under the DIP Facility at the
following interest rates:  with respect to (a) an Alternate Base Rate
Borrowing, at the Alternative Base Rate (which is defined in as a rate per annum
equal to the greatest of (i) the Prime Rate in effect on such day, (ii) the
Federal Funds Effective Rate in effect on such day plus 1/2 of 1%, and (iii) 3%)
plus 8.75% per annum, and (b) a Eurodollar Borrowing, at the Adjusted LIBO Rate
(which means, for any Interest Period, an interest rate per annum (rounded
upwards, if necessary, to the next 1/16 of 1%) equal to (i) the LIBO Rate for
such Interest Period (which will have a minimum rate of 4% per annum) multiplied
by (ii) the Statutory Reserve Rate) for the Interest Period in effect plus 8%
per annum (as all such terms are defined in the DIP
Agreement).  Subject only to the “carve out” provided for in the DIP
Facility (which is modeled on that provided for in the Final Cash Collateral
Order, as such term is defined below), the Debtors will grant the following
liens for the benefit of the DIP Administrative Agent and for the benefit of the
DIP Lenders: (a) pursuant to
Bankruptcy Code § 364(c)(2),  perfected first priority liens on all
property of the Debtors which was unencumbered by any Lien as of the Petition
Date (other than Avoidance Actions and any proceeds or property recovered in
respect of such Avoidance Actions); (b) pursuant to Bankruptcy Code §
364(c)(3), perfected liens on all property of the Debtors subject to existing
valid, perfected, enforceable, and unavoidable liens on such property (other
than property subject to liens securing obligations owed to the Pre-Petition
Secured Lenders); and (c) pursuant to Bankruptcy Code § 364(d)(1),
perfected first priority, senior priming liens, on all property of the Debtors
that on the Petition Date is subject to a lien securing any obligations owed to
the Pre-Petition Secured Lenders.  In addition, pursuant
to Bankruptcy Code § 364(c)(1), the DIP Lenders will also receive an
allowed administrative expense claim in these Cases having priority over all
administrative expenses of the kind specified in or arising under any sections
of the Bankruptcy Code (including, without limitation, Bankruptcy Code
§§ 105, 326, 328, 330, 331, 503(b), 507(a), 507(b), 546(c), 726, 1113, or
1114 thereof).

       

      The
Pre-Petition Secured Lenders will also be entitled to adequate protection, in
the form of new liens, claims, and payments, to the extent (a) of any diminution
in value in their pre-petition collateral or (b) that a usage of the collateral
being provided to the DIP Lenders results in a diminution of their pre-petition
collateral.  The Debtors also agreed to file the Plan and this
Disclosure Statement by October 6, 2009; conduct a hearing to consider
confirmation of the Plan by November 30, 2009; and consummate the Plan by
December 15, 2009.

       

      
        	
                 
      

              	
                6.

              	
                Common
      Stock.

              

      

       

      Aurora’s
authorized capital stock consists of 250,000,000 shares of common stock and
20,000,000 shares of preferred stock.  As of June 30, 2009, Aurora had
103,282,788 shares of common stock outstanding, with a $0.01 par value, and no
shares of preferred stock outstanding.  As of the Petition Date,
Aurora had options outstanding that were exercisable for 4,444,000 shares of Old
Aurora Common Stock.
 

      
        
           

        

        
          19

          
            

          

        

        
           

        

      

      The
Debtors direct any person interested in additional information regarding the
shares of common stock of Aurora to the periodic reports and other documents
that Aurora has filed with the SEC.  Such reports and other documents
and information filed may be examined and are also available for inspection
without charge at, or copies may be obtained upon payment of prescribed fees
from, the Public Reference Section of the Securities and Exchange Commission
(the “SEC”) at Judiciary Plaza, 450 Fifth Street, NW, Washington,
D.C.  20549, and they are also available for inspection and copying at
the regional offices of the SEC located at 233 Broadway, New York, New York
10279, and at 500 West Madison Street, Chicago,
Illinois  60661-2511.  The SEC maintains a Web Site
(http://www.sec.gov) that contains reports and other information regarding
Aurora, which is also available at the “Investor Relations” section of the
Debtors’ Web Site
(http://www.auroraogc.com/Investor_Relations.htm).

       

      C.           Description
of Business.2

       

      
        	
                 
      

              	
                1.

              	
                Overview.

              

      

       

      The
Debtors are independent energy companies focused on the exploration,
exploitation, and development of unconventional natural gas
reserves.  The Debtors’ unconventional natural gas projects target
shale plays where large acreage blocks that can be easily evaluated with a
series of low cost test wells.  The Debtors’ project areas are focused
in the Antrim shale of Michigan and New Albany shale of Southern Indiana and
Western Kentucky.

       

      In 1969,
the Debtors commenced operations to explore and mine natural resources under the
name Royal Resources, Inc.  In July 2001, the Debtors reorganized
their business to pursue oil and natural gas exploration and development
opportunities and changed their name to Cadence Resources Corporation
(“Cadence”).  The Debtors acquired Aurora Energy, Ltd. (“AEL”), on
October 31, 2005, through the merger of a wholly-owned subsidiary with and into
AEL.  The acquisition of AEL was accounted for as a reverse merger,
with AEL being the acquiring party for accounting purposes.  The AEL
executive management team also assumed management control at the time the merger
closed, and the Debtors moved their corporate offices to Traverse City,
Michigan.  Effective May 11, 2006, Cadence changed its name to Aurora
Oil & Gas Corporation.

        

        
          

        

      

      
        	
                2

              	
                As
      used in this Disclosure Statement, “mcf” means thousand cubic feet, “mmcf”
      means million cubic feet, “bcf” means billion cubic feet, “bbl” means
      barrel, “mbbls” means thousand barrels, and “mmbbls” means million
      barrels.  Also in this Disclosure Statement, “boe” means barrel
      of oil equivalent, “mcfe” means thousand cubic feet of natural gas
      equivalent, “mmcfe” means million cubic feet of natural gas equivalent,
      “mmbtu” means million British thermal units, and “bcfe” means billion
      cubic feet of natural gas equivalent.  Natural gas equivalents
      and crude oil equivalents are determined using the ratio of six mcf of
      natural gas to one bbl of crude oil, condensate, or natural gas
      liquids.  All estimates of reserves and information related to
      production contained in this Disclosure Statement, unless otherwise noted,
      are reported on a “net” basis.

              

      

       

      
        
           

        

        
          20

          
            

          

        

        
           

        

      

      Starting
in 2008, due to the current global economic crisis coupled with significant
losses in production, significant deficiencies in working capital, loss of
revenue due to the termination of the Debtors’ natural gas derivatives, and
increases in interest rates on their debt obligations, the Debtors have been
unable to gain access to the credit markets.  As a result, the
Debtors’ drilling activities have substantially decreased, and they had to
adjust their short-term strategy, placing less emphasis on drilling and more
emphasis on cash conservation and pursuing farmout relationships in order to
develop their undeveloped reserves.  The Debtors are currently
undergoing an Antrim remediation program to address their decline in
production.

       

      As an
early stage developer of properties, the Debtors have successfully accumulated a
large acreage base of unconventional shale opportunities.  The New
Albany shale represents an emerging play, as development activity has only been
initiated within the last several years.  As the Debtors develop these
leaseholds, they anticipate reserve growth would be their initial focus followed
by a more traditional balance between reserve and production
growth.  The following table sets forth their approximate leasehold
acreage as of June 30, 2009:

       

      
        
          
            
              	 
      	 	
                      Total Acreage

                    	 	 	
                      Percentage Developed

                    	 
	
                      Play/Trend

                    	 	
                      Gross

                    	 	 	
                      Net

                    	 	 	
                      Gross

                    	 	 	
                      Net

                    	 
	
                      Michigan
      Antrim

                    	 	 	278,288	 	 	 	124,174	 	 	 	25	%	 	 	30	%
	
                      New
      Albany

                    	 	 	764,918	 	 	 	443,722	 	 	 	3	%	 	 	2	%
	
                      Other

                    	 	 	91,414	 	 	 	66,410	 	 	 	2	%	 	 	2	%
	
                      Total
      

                    	 	 	1,130,620	 	 	 	633,906	 	 	 	8	%	 	 	7	%

            

          

        

      

      

      As of
June 30, 2009, the Debtors had 651 (287 net) producing wells, 16 (8 net) wells
awaiting hook-up, 41 (27 net) wells undergoing resource assessment, and 51 (35
net) wells temporarily abandoned.  The Debtors operate 234 (224 net)
wells, thus, operating 36% of their gross wells and 78% of their net
wells.  Of the 224 net wells the Debtors operate, 168 net wells are
producing in the Antrim; 24 net wells are undergoing resource assessment in the
Antrim; 6 net wells are awaiting hook-up in the New Albany; and 26 net wells are
temporarily abandoned.

       

      The
Debtors’ average daily production for the six months ended June 30, 2009, was
7,133 mcfe per day compared to 8,720 mcfe per day for the six months ended June
30, 2008.  Average daily production for operated properties was 4,219
mcfe and 6,773 mcfe for the six months ended June 30, 2009 and 2008,
respectively.  Average daily production for non-operated properties
was 2,907 mcfe and 3,669 mcfe for the six months ended June 30, 2009 and 2008,
respectively.

       

      During
May 2008, the Debtors implemented a well enhancement program on their operated
Antrim shale properties to address their decline in production.  The
objective of the well enhancement program was to perform downhole workovers on
approximately 90 wells.  The Debtors completed well enhancement
activities on the majority of the 90 wells and experienced an approximate one to
two days stoppage in production per well to complete the well enhancement
activities.  The Debtors also shut down the downhole pumps on various
wells that were producing large volumes of water with insignificant volumes of
gas.  Since the Debtors discontinued the pumping operations on these
wells, they have observed a detrimental impact on the gas production levels in
the remaining producing wells.

       

      
        
           

        

        
          21

          
            

          

        

        
           

        

      

      The
Debtors believe that maximizing water production from all operated Antrim wells,
regardless of their individual economic impact, is necessary to maximize gas
production from the projects as a whole. Therefore, the Debtors initiated a
renewed well enhancement program in February 2009 that emphasized measures to
increase water production.  As part of the process, the Debtors are
planning to install water meters at each well location to track water
production.  The program was initially intended to be implemented in
three phases throughout 2009;  however, due to lack of capital
available and significant declines in gas prices, the Debtors chose to delay the
first phase and move to a pilot program from the second phase.

       

      
        	
                 
      

              	
                2.

              	
                Description of Certain Specific
      Transactions and Agreements.

              

      

       

      
        	
                 
      

              	
                (a)

              	
                Atlas
      Farmout Agreement.

              

      

       

      Over the
past few years, the Debtors, or their predecessors in interest, as lessees,
entered into various oil and gas leases with certain third parties, as lessors,
pursuant to which the Debtors obtained the property rights to liquid or gaseous
hydrocarbons located on and under certain acreage located in Clay County, Greene
County, Owen County, and Sullivan County, Indiana commonly known as the Wabash
Project or the Wabash Project Boundary (the “Wabash Acreage”).  On
October 29, 2008, Aurora entered into a farmout arrangement (the “Farmout
Agreement”) with Atlas Energy Indiana, LLC (“Atlas”) to farm out Aurora’s
interests in the Wabash Acreage.  Under the terms of the Farmout
Agreement, among other things, Atlas was required to (1) drill at least twenty
horizontal wells on the Wabash Acreage meeting certain specifications described
therein (the “Drilling Obligations”) on or before October 29, 2009; provided, however, that Atlas
is permitted to drill vertical wells on the Wabash Acreage, and for each
vertical well so drilled by Atlas on the Wabash Acreage, Atlas will be given
credit for the equivalent one-fourth (1/4) of a horizontal well for purposes of
the Drilling Obligations, (2) pay Aurora a well site fee for each new well
drilled by Atlas on the Wabash Acreage, (3) accept responsibility for any
applicable lease obligations, including payments for lease extensions, (4)
provide Aurora with an overriding royalty interest based on the amount of gas
extracted from the Wabash Acreage from wells with respect to which Aurora has
assigned its operating rights to Atlas pursuant to the Farmout Agreement, and
(5) allow Aurora to participate as a working interest owner, if requested, in a
proportionate 25% working interest in any well proposed by Atlas (an “Option to
Participate”) and share in the production from, and the expenses related to, the
drilling and maintenance of such well.

       

      
        	
                 
      

              	
                (b)

              	
                Certain
      Recent Sales and Assignments.

              

      

       

      As
described below, on August 20, 2009, the Debtors, Atlas, and the Lenders entered
into a stipulation and order providing for, among other things, a modified
drilling schedule under the Farmout Agreement through April of 2010, and that
the Debtors could terminate the agreement in the event that Atlas failed to
fulfill its drilling obligations (on a cumulative basis) in accordance with such
modified schedule.  The Court approved this stipulation by order dated
September 8, 2009.

       

      As of the
date hereof, Atlas has commenced drilling activities at four sites under the
Farmout Arrangement, and the Debtors have declined to take an Option to
Participate in thirteen anticipated wells.

       

      
        
           

        

        
          22

          
            

          

        

        
           

        

      

      On June
10, 2009, the Debtors sold all of the membership interests in its subsidiary,
Bach Services & Manufacturing Co., LLC ("BSM") including the membership
interest owned by BSM of Kingsley Development, LLC for a total purchase price of
$351,564.  Of the $351,564, $87,114 was received in cash, $25,386 was
credited against receivables owed by Aurora to BSM and an assumption of a
receivable in the amount of $239,064 which subsequent to June 30, 2009 has been
collected.  The sale resulted in a loss of $1.4 million.

       

      On August
6, 2009, Aurora recorded a receivable in the amount of $762,544 in connection
with the assignment of its ownership and rights under the Facility Construction,
Ownership and Operating Agreement, dated January 6, 2006 ("Tapsite Agreement"),
to Atlas.  Aurora is party to a farmout agreement with Atlas (as
described above), as the farmor, and has assigned its ownership and rights to
the Tapsite Agreement to Atlas, as the farmee, in order to enhance the farmee's
ability to gather, process, and market gas within the Wabash
Project.

       

      Effective
September 15, 2008, the Debtors closed on the sale to Presidium Energy, LC
(“Presidium”), of all their membership interest in a wholly owned subsidiary,
AOK Energy, LLC (“AOK”), which held all of the Debtors’ properties in the
Woodford shale.  The total sales price was $15 million, of which the
Debtors received $3 million in cash and received a note receivable in the amount
of $12 million.  In connection with the sale, the Debtors also
received a 3% overriding royalty interest in certain oil and gas leases located
within this project.

       

      
        	
                 
      

              	
                3.

              	
                Operating
      Areas.

              

      

       

      
        	
                 
      

              	
                (a)

              	
                Antrim
      Shale.

              

      

       

      The
Debtors’ Antrim shale properties are primarily located in northern Michigan and
represent the majority of their production and proved reserves.  Prior
to 2008, the Debtors had focused on development drilling in the Antrim shale,
creating a stable base of production and proved reserves.

       

      The
Antrim shale underlies the entire Michigan basin.  The primary
producing trend for the shale runs across the northern portion of the Michigan
basin from Lake Michigan to Lake Huron (160 miles).  In most
situations, Antrim shale is encountered by vertical drilling, though on
occasion, the Debtors may determine that horizontal drilling is
preferred.  A simple completion procedure is employed, using
industry-proven hydraulic fracturing technology.  These wells are
produced with a production system that is specifically designed to minimize
pressure on the wells, pipelines, facilities, and reservoir.  This is
expected to increase the recoverability of the shale gas production, thereby
providing the maximum recovery of natural gas.

       

      The
Antrim shale is a thick shale (140 to 200 feet), with a high organic content (up
to 20%).  Over 9,000 wells are producing in the Antrim shale and are
expected to provide an average of 0.5 bcf of natural gas per well, with a
productive life between 30 and 50 years.  A typical production curve
for the shale suggests a peak rate of gas occurring within the first two years
of production, after the shale reservoir has gone through a period of
dewatering.  Once the gas is able to fully release from the shale, the
production will typically decline between 2% and 10%
annually.
 

      
        
           

        

        
          23

          
            

          

        

        
           

        

      

      As of
June 30, 2009, the Debtors owned working interests in 645 (311 net) Antrim
wells, which included 56 (44 net) non-producing wells.  The Debtors
have 123,774 net acres leased, with approximately 36,910 acres developed in the
Michigan Antrim shale play.

       

      
        	
                 
      

              	
                (b)

              	
                New
      Albany Shale.

              

      

       

      The
Debtors’ New Albany shale properties are primarily located in southwestern
Indiana and represent the majority of their developable acreage
base.  As with the Antrim shale, the Debtors’ New Albany shale
operations are focused on an unconventional shale play.

       

      The New
Albany shale underlies a substantial portion of the Illinois
basin.  The most productive portion of the trend appears to run across
the southeastern portion of Illinois, the southern portion of Indiana, and the
northwestern portion of Kentucky.  The Debtors’ acreage position is
located primarily in the central portion of that trend, crossing approximately
12 counties.

       

      Though
the New Albany shale has been successfully drilled and produced using vertical
wells, it has been determined that the most productive method of development
there is horizontal drilling.  At this time, the completion methods
are very simple, typically open-hole only.  These wells are produced
with a production system that is specifically designed to minimize pressure on
the wells, pipelines, facilities, and reservoir.  This is expected to
increase the recoverability of shale gas production, thereby providing the
maximum recovery of natural gas.

       

      The New
Albany shale is a thick shale (100 to over 200 feet), with high organic content
(up to 25%).  Over 200 vertical wells and less than 50 horizontal
wells are producing in the New Albany shale.  Horizontal wells are
expected to provide an average of 1.2 bcf of natural gas per well with a
productive life between 30 and 50 years.  A typical production curve
for the shale suggests a peak rate of gas and water occurs within the first 60
days of production.  Together, the natural gas and water decline an
average of 2% to 10% annually.

       

      As of
June 30, 2009, the Debtors owned working interests in 56 (19 net) New Albany
shale wells which included 25 (11 net) non-producing wells.  The
Debtors have 443,722 net acres leased, with approximately 7,089 net acres
developed in the New Albany shale.

       

      
        	
                 
      

              	
                (c)

              	
                Drilling
      Techniques and Natural Gas
Processing.

              

      

       

      The
Debtors are experienced at drilling both vertical and horizontal
wells.  For shale gas wells, the Debtors generally use a production
system that is designed to achieve low pressure on the wells, pipelines,
facilities, and reservoir.  This is done by keeping natural fractures
open to the well bore and by using low-pressure gas processing near well
sites.  Using this low-pressure production approach, the Debtors seek
to increase the recoverability of shale gas production through reduction of
reservoir pressure, thereby enhancing dewatering and gas
recovery.  The Debtors’ wells are drilled by outside drilling
companies.

       

      
        
           

        

        
          24

          
            

          

        

        
           

        

      

      In the
Michigan Antrim, the Debtors use a simple proven completion procedure with
industry proven hydraulic fracturing technology.  This procedure
involves drilling through several pay zones, setting and cementing casing, and
drilling an extended rat-hole, which is used for gas-water
separation.  The wells are then hydraulically fractured with a
specifically designed fracture procedure incorporating multiple stages with
enhanced diversion methods to increase effective vertical
coverage.  Imaging logs are used to identify which zones are best
fractured and will yield commercial gas production.  For horizontal
New Albany shale wells, minimal stimulation has been required to date to make
economic gas wells.  In exploratory areas of the New Albany and
Antrim, shale log analysis is incorporated to enhance fracturing and completion
design.

       

      In order
to contain costs, the Debtors try to keep facilities for gas processing
decentralized.  Salt water disposal wells are drilled close to the
compression facilities, near to each field’s wells.  Skid mounted
separators that can be easily upgraded or downsized are used at the site of the
salt water disposal wells.  The localized disposal of water reduces
power demand.  Different reservoirs contain different amounts of
water.  The Debtors cannot accurately predict the actual amount of
time required for dewatering with respect to each well.  The period of
time during which the gas production rate is limited by the Antrim shale
dewatering process is estimated to be two years or more, thereby delaying peak
revenue production.

       

      The
Debtors use skid mounted booster compressors to maximize compression
efficiencies from the well to the transportation line.  The Debtors
also seek to maintain low pressure in the gathering systems.

       

      
        	
                 
      

              	
                (d)

              	
                Oil
      and Natural Gas Reserves.

              

      

       

      Aurora’s
oil and natural gas reserve can be evaluated based upon future net cash flows
from proved reserves discounted to present value using various discount
rates.  Aurora requested an independent third-party to generate a
reserve and economic evaluation of its proved reserves in Indiana, Michigan, and
Texas as of June 30, 2009.  This independent third-party had already
provided previous reserve reports.  The independent third-party
generated the report, accepting as presented by Aurora, information regarding
product prices, costs, and certain economic parameters from
Aurora.  Estimates of Aurora’s future net revenues from proved
reserves are discounted to present value using an annual discount rate of 10%
(PV-10), using oil and natural gas prices based on the NYMEX strip prices in
effect as of the dates of such estimates, and unescalated costs held constant
throughout the life of the properties.
 

      
        
           

        

        
          25

          
            

          

        

        
           

        

      

       

      
        
          
            
              
                
                  
                    
                      
                        	 
      	 	
                                As of June 30, 2009

                              	 
	
                                Oil and Natural Gas
Reserves

                              	 	
                                Oil

                                (mbbls)

                              	 	 	
                                Gas

                                (mmcf)

                              	 	 	
                                Total

                                (mmcfe)

                              	 	 	
                                PV-10

                                (In thousands)

                              	 	 	 	 
	
                                Proved
      developed producing

                              	 	 	40	 	 	 	59,439	 	 	 	59,679	 	 	$	61,733	 	 	 	 
	
                                Proved
      developed behind pipe

                              	 	 	23	 	 	 	3,567	 	 	 	3,705	 	 	 	2,490	 	 	 	 
	
                                Proved
      developed non-producing

                              	 	 	-	 	 	 	18,901	 	 	 	18,901	 	 	 	24,387	 	 	 	 
	
                                Proved
      undeveloped

                              	 	 	-	 	 	 	37,623	 	 	 	37,623	 	 	 	25,680	 	 	 	 
	
                                Total proved

                              	 	 	63	 	 	 	119,530	 	 	 	119,908	 	 	$	114,290	 	 	 	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	
                                Oil and Natural Gas Reserves
by

                                Play/Trend

                              	 	 	 	 	 	 	 	 	 	
                                Total

                                (mmcfe)

                              	 	 	
                                Percent of

                                Proved

                                Reserves

                              	 	 	
                                PV-10

                                (In thousands)

                              	 
	
                                Michigan
      Antrim

                              	 	 	 	 	 	 	 	 	 	 	92,970	 	 	 	77	%	 	$	80,696	 
	
                                New
      Albany

                              	 	 	 	 	 	 	 	 	 	 	26,303	 	 	 	22	%	 	 	30,719	 
	
                                Other

                              	 	 	 	 	 	 	 	 	 	 	635	 	 	 	1	%	 	 	2,875	 
	
                                Total

                              	 	 	 	 	 	 	 	 	 	 	119,908	 	 	 	100	%	 	$	114,290	 

                      

                    

                  

                

              

            

          

        

      

      

      According
to this report, Aurora’s proved reserves are classified as either proved
developed producing (“PDP”), proved developed behind pipe (“PDBP”), proved
developed non-producing (“PDNP”), or proved undeveloped.

       

      Proved
reserves are those quantities of oil and gas which, by analysis of geological
and engineering data, can be estimated with reasonable certainty to be
commercially recoverable from known reservoirs and under forecasted gas prices,
cost assumptions, operating methods, and government regulations.

       

      Developed
reserves are expected to be recovered from existing
wells.  Undeveloped reserves are expected to be
recovered:  (i) from new wells on undrilled acreage; (ii) from
deepening existing wells to a different reservoir; or (iii) where relatively
large capital expenditure is required to recomplete an existing well or install
production or transportation facilities for primary or improved recovery
projects.

       

      Future
net income (cash flow) is future net revenue less net lease operating,
transportation, processing, marketing expenses, and state severance or
production taxes.  No provision for state or federal taxes is made in
this evaluation.  The estimated future net revenues were determined by
using the estimated production of each producing well and the wells to be
developed based on the capital expenditure provided by Aurora.  The
present worth (discounted cash flow) at various discount rates was calculated on
a monthly basis.  There was no abandonment included since salvage
value was expected to offset a portion of the cost.  All economics
were run to economic life of 50 years.  Aurora supplied all product
prices, costs, and economic parameters used in this evaluation.  Oil
and gas prices are based on the NYMEX strip as of June 30, 2009 and all costs
were unescalated.  The following table sets forth the present value,
discounted at 10% per annum (PV-10), of estimated net cash flows before income
tax of Aurora’s estimated proved reserves:

       

      
        
           

        

        
          26

          
            

          

        

        
           

        

      

       

      
        
          
            
              
                	 
      	 	
                        As
      of

                        June
      30,

                        2009

                      	 	 	
                        As
      of

                        December
      31,

                        2008

                      	 	 	
                        As
      of

                        December
      31,

                        2007

                      	 	 	
                        As
      of

                        December
      31,

                        2006

                      	 
	
                        PV-10

                      	 	$	114,289.99	 	 	$	68,598,490	 	 	$	189,935,780	 	 	$	158,782,810	 

              

            

          

        

      

       

      The
Debtors management believes that the values as of June 2009 and December 2008
are not comparable because pursuant to SEC rules and guidelines, the assumption
for the revenue in December 2008 utilized a constant oil and gas price, while
the June 2009 report utilized a strip price.

       

      The
Debtors’ management further believes that the presentation of the non-GAAP
financial measure of PV-10 provides useful information because it is widely used
by professional analysts and sophisticated investors in evaluating oil and
natural gas companies.  PV-10 is not a measure of financial or
operating performance under GAAP.  PV-10 should not be considered as
an alternative to the standardized measure as defined under GAAP.

       

      The
Debtors recognize that in providing certain assumptions to the independent
third-party, Aurora altered the real value of its oil and gas
interests.  In order to have a more accurate net present value of
future cash flows, Aurora has incorporated the following revised
assumptions:  reduced production output by 10% for operated properties
and 5% for non-operated properties based on actual recent observed performance;
included 3% of annual escalation costs to reflect the fact that costs increase
on a yearly basis; allocated capital expenditures based upon preliminary
projected free cash flows over the next five years; and included the following
valuations: PDP at 100%, behind pipe at 100%, PDNP at 30% and Undeveloped at 0%
based on realistic market conditions to assign values per
category.  With these assumptions, Aurora arrived at a PV-10 of
$39,977,000.  Assuming 100% valuation for all properties, the value at
PV-10 was $56,870,000.

       

      The
Debtors believe that a prudent valuation of Aurora’s oil and gas interests
should follow the precedent set of assumptions and that the current market
conditions imply a discount rate between 10% and 20%.  At a discount
rate of 20%, the total valuation of all the properties is $29,070,000, and
following the valuation previously indicated, the value of the properties is
$24,389,000.

       

      
        	
                 
      

              	
                (e)

              	
                Acreage.

              

      

       

      The
following table sets forth as of June 30, 2009, the gross and net acres of both
developed and undeveloped oil and gas leases which the Debtors
hold.  “Gross” acres are the total number of acres in which the
Debtors own a working interest.  “Net” acres refer to gross acres
multiplied by the Debtors’ fractional working interest.  Acreage
numbers do not include the Debtors’ options to acquire additional leaseholds
which have not been exercised.

       

      
        
           

        

        
          27

          
            

          

        

        
           

        

      

       

      
        
          
            	 	 	
                    Developed(a)

                  	 	 	
                    Undeveloped(b)

                  	 	 	
                    Total(c)

                  	 
	
                    Play/Trend

                  	 	
                    Gross

                  	 	 	
                    Net

                  	 	 	
                    Gross

                  	 	 	
                    Net

                  	 	 	
                    Gross

                  	 	 	
                    Net

                  	 
	
                    Michigan
      Antrim

                  	 	 	67,263	 	 	 	36,910	 	 	 	207,025
      	 	 	 	86,864
      	 	 	 	274,288	 	 	 	123,774	 
	
                    New
      Albany

                  	 	 	20,460	 	 	 	7,089	 	 	 	744,458	 	 	 	436,633	 	 	 	764,918	 	 	 	443,722	 
	
                    Other

                  	 	 	1,730	 	 	 	1,021	 	 	 	89,684	 	 	 	65,389	 	 	 	91,414	 	 	 	66,410	 
	
                    Total

                  	 	 	89,453	 	 	 	45,020	 	 	 	1,041,167	 	 	 	588,886	 	 	 	1,130,620	 	 	 	633,906	 

          

        

      

      

      
        	
                (a)

              	
                Developed
      refers to the number of acres which are allocated or assignable to
      producing wells or wells capable of production.  Developed
      acreage includes acreage having wells shut-in awaiting the addition of
      infrastructure.

              

      

      

      
        	
                (b)

              	
                Undeveloped
      refers to lease acreage on which wells have not been developed or
      completed to a point that would permit the production of commercial
      quantities of oil or natural gas regardless of whether such acreage
      contains proved reserves.

              

      

      

      
        	
                (c)

              	
                While
      the Debtors are focused on developing the shale, their acreage covers a
      variety of different formations in addition to the shale that have the
      possibility of being developed and
marketed.

              

      

      

      
        	
                 
      

              	
                (f)

              	
                Production
      and Price Information.

              

      

       

      The
following table summarizes sales volumes, sales prices, and production cost
information for the periods indicated ($ in thousands):

       

      
        
           

        

        
          28

          
            

          

        

        
           

        

      

       

      
        
          
            	 
      	 	
                    Six
      Months

                    Ending

                  	 	 	
                    
                    

                    Year Ended December 31,

                  	 
	
                    Production

                  	 	
                    6/30/09

                  	 	 	
                    2008

                  	 	 	
                    2007

                  	 	 	
                    2006

                  	 
	
                    Oil
      (bbls)

                  	 	 	11,372	 	 	 	25,321	 	 	 	27,907	 	 	 	22,588	 
	
                    Natural
      gas (mcf)

                  	 	 	1,222,864	 	 	 	2,892,186	 	 	 	3,039,714	 	 	 	2,517,897	 
	
                    Natural
      gas equivalent (mcfe)

                  	 	 	1,291,096	 	 	 	3,044,112	 	 	 	3,207,155	 	 	 	2,653,427	 
	 
      	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	
                    Oil
      and natural gas sales

                  	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	
                    Natural
      gas sales

                  	 	$	5,321	 	 	$	26,208	 	 	$	20,911	 	 	$	17,510	 
	
                    Natural
      gas derivatives-realized

                    (losses)
      gains

                  	 	 	-	 	 	 	(3,537	)	 	 	3,874	 	 	 	2,683	 
	
                    Oil
      sales

                  	 	 	508	 	 	 	2,531	 	 	 	1,939	 	 	 	1,399	 
	
                    Total

                  	 	$	5,830	 	 	$	25,202	 	 	$	26,724	 	 	$	21,592	 
	 
      	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	
                    Average
      sales price (excluding all gains (losses) from
derivatives)

                  	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	
                    Natural
      gas ($ per mcf)

                  	 	$	4.35	 	 	$	9.06	 	 	$	6.88	 	 	$	6.95	 
	
                    Oil
      ($ per bbl)

                  	 	 	44.70	 	 	 	99.96	 	 	 	69.49	 	 	 	61.96	 
	
                    Natural
      gas equivalent ($ per mcfe)

                  	 	 	4.52	 	 	 	9.44	 	 	 	7.12	 	 	 	7.13	 
	 
      	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	
                    Average
      sales price (including all gains (losses) from
derivatives)

                  	 	$	4.35	 	 	$	7.84	 	 	$	8.15	 	 	$	8.02	 
	
                    Natural
      gas ($ per mcf)

                  	 	 	44.70	 	 	 	99.96	 	 	 	69.49	 	 	 	61.96	 
	
                    Oil
      ($ per bbl)

                  	 	 	4.52	 	 	 	8.28	 	 	 	8.33	 	 	 	8.14	 
	
                    Natural
      gas equivalent ($ per mcfe)

                  	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 
      	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	
                    Average
      production expenses ($ per mcfe)

                  	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	
                    Production
      taxes

                  	 	$	0.14	 	 	$	0.44	 	 	$	0.35	 	 	$	0.33	 
	
                    Post-production
      expenses

                  	 	 	1.33	 	 	 	0.93	 	 	 	0.59	 	 	 	0.55	 
	
                    Leasing
      operating expenses

                  	 	 	2.06	 	 	 	2.36	 	 	 	2.14	 	 	 	1.82	 
	
                    Total

                  	 	$	3.53	 	 	$	3.73	 	 	$	3.08	 	 	$	2.70	 

          

        

      

      

      
        	
                 
      

              	
                (g)

              	
                Productive
      Wells.

              

      

       

      The
following table sets forth as of June 30, 2009, information relating to the
productive wells in which the Debtors owned a working
interest.  “Productive wells” consist of producing wells and wells
capable of production, including natural gas wells awaiting pipeline connections
to commence deliveries, and oil wells awaiting connection to production
facilities.  “Gross wells” are the total number of productive wells in
which the Debtors have an interest, and net wells are the sum of the Debtors’
fractional working interests owned in gross wells.
 

      
        
           

        

        
          29

          
            

          

        

        
           

        

      

       

      
        
          
            	 
      	 	
                    Natural Gas

                  	 	 	
                    Oil

                  	 
	
                    Play/Trend

                  	 	
                    Gross Wells

                  	 	 	
                    Net Wells

                  	 	 	
                    Gross Wells

                  	 	 	
                    Net Wells

                  	 
	
                    Michigan
      Antrim

                  	 	 	593	 	 	 	267.55	 	 	 	-	 	 	 	-	 
	
                    New
      Albany

                  	 	 	31	 	 	 	7.25	 	 	 	-	 	 	 	-	 
	
                    Other

                  	 	 	1	 	 	 	0.10	 	 	 	42	 	 	 	19.55	 
	
                    Total

                  	 	 	623	 	 	 	274.04	 	 	 	42	 	 	 	19.55	 

          

        

      

       

      
        	
                 
      

              	
                (h)

              	
                Drilling
      Activities.

              

      

       

      The
following table sets forth information with respect to wells drilled and
completed during the periods indicated.  The information should not be
considered indicative of future performance, nor should it be assumed that there
is necessarily any correlation between the number of productive wells drilled,
quantities of reserves found, or economic value.  “Productive wells”
are those that produce commercial quantities of hydrocarbons, whether or not
they produce a reasonable rate of return.
 

      
        
           

        

        
          30

          
            

          

        

        
           

        

      

       

      
        
          
            
              
                
                  
                    	 
      	 	
                            Gross
      Wells

                          	 	 	
                            Net
      Wells

                          	 
	
                            Type of
      Well

                          	 	
                            Productive(b)

                          	 	 	
                            Dry(c)

                          	 	 	
                            Total

                          	 	 	
                            Productive(b)

                          	 	 	
                            Dry(c)

                          	 	 	
                            Total

                          	 
	
                            Six Months Ending
      6/30/09

                          	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	
                            Exploratory(a)

                          	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	
                            Michigan
      Antrim

                          	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	
                            New
      Albany

                          	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	
                            Other

                          	 	 	6	 	 	 	-	 	 	 	6	 	 	 	1	 	 	 	-	 	 	 	1	 
	
                            Total

                          	 	 	6	 	 	 	-	 	 	 	6	 	 	 	1	 	 	 	-	 	 	 	1	 
	
                            Development(a)

                          	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	
                            Michigan
      Antrim

                          	 	 	-	 	 	 	-	 	 	 	-	 	 	 	-	 	 	 	-	 	 	 	-	 
	
                            New
      Albany

                          	 	 	-	 	 	 	-	 	 	 	-	 	 	 	-	 	 	 	-	 	 	 	-	 
	
                            Other

                          	 	 	-	 	 	 	-	 	 	 	-	 	 	 	-	 	 	 	-	 	 	 	-	 
	
                            Total

                          	 	 	-	 	 	 	-	 	 	 	-	 	 	 	-	 	 	 	-	 	 	 	-	 
	
                            Year Ended
      12/31/08

                          	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	
                            Exploratory(a)

                          	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	
                            Michigan
      Antrim

                          	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	
                            New
      Albany

                          	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	
                            Other

                          	 	 	7	 	 	 	2	 	 	 	9	 	 	 	1.07	 	 	 	0.53	 	 	 	1.60	 
	
                            Total

                          	 	 	7	 	 	 	2	 	 	 	9	 	 	 	1.07	 	 	 	0.53	 	 	 	1.60	 
	
                            Development(a)

                          	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	
                            Michigan
      Antrim

                          	 	 	14	 	 	 	-	 	 	 	14	 	 	 	2.80	 	 	 	-	 	 	 	2.80	 
	
                            New
      Albany

                          	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	
                            Other

                          	 	 	2	 	 	 	1	 	 	 	3	 	 	 	1.23	 	 	 	0.50	 	 	 	1.73	 
	
                            Total

                          	 	 	16	 	 	 	1	 	 	 	17	 	 	 	4.03	 	 	 	0.50	 	 	 	4.53	 
	
                            Year Ended
      12/31/07(d)

                          	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	
                            Exploratory(a)

                          	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	
                            Michigan
      Antrim

                          	 	 	1	 	 	 	 	 	 	 	1	 	 	 	0.22	 	 	 	 	 	 	 	0.22	 
	
                            New
      Albany

                          	 	 	15	 	 	 	 	 	 	 	15	 	 	 	10.57	 	 	 	 	 	 	 	10.57	 
	
                            Other

                          	 	 	7	 	 	 	6	 	 	 	13	 	 	 	5.51	 	 	 	5.00	 	 	 	10.51	 
	
                            Total

                          	 	 	23	 	 	 	6	 	 	 	29	 	 	 	16.30	 	 	 	5.00	 	 	 	21.30	 
	
                            Development(a)

                          	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	
                            Michigan
      Antrim

                          	 	 	50	 	 	 	2	 	 	 	52	 	 	 	29.43	 	 	 	2.00	 	 	 	31.43	 
	
                            New
      Albany

                          	 	 	12	 	 	 	 	 	 	 	12	 	 	 	0.60	 	 	 	 	 	 	 	0.60	 
	
                            Other

                          	 	 	8	 	 	 	 	 	 	 	8	 	 	 	5.80	 	 	 	 	 	 	 	5.80	 
	
                            Total

                          	 	 	70	 	 	 	2	 	 	 	72	 	 	 	35.83	 	 	 	2.00	 	 	 	37.83	 
	
                            Year Ended
      12/31/06

                          	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	
                            Exploratory(a)

                          	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	
                            Michigan
      Antrim

                          	 	 	2	 	 	 	 	 	 	 	2	 	 	 	2.00	 	 	 	 	 	 	 	2.00	 
	
                            New
      Albany

                          	 	 	13	 	 	 	1	 	 	 	14	 	 	 	6.39	 	 	 	0.50	 	 	 	6.89	 
	
                            Other

                          	 	 	1	 	 	 	3	 	 	 	4	 	 	 	0.38	 	 	 	1.25	 	 	 	1.63	 
	
                            Total

                          	 	 	16	 	 	 	4	 	 	 	20	 	 	 	8.77	 	 	 	1.75	 	 	 	10.52	 
	
                            Development(a)

                          	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	
                            Michigan
      Antrim

                          	 	 	162	 	 	 	9	 	 	 	171	 	 	 	91.53	 	 	 	4.93	 	 	 	96.46	 
	
                            New
      Albany

                          	 	 	12	 	 	 	 	 	 	 	12	 	 	 	0.60	 	 	 	 	 	 	 	0.60	 
	
                            Other

                          	 	 	6	 	 	 	 	 	 	 	6	 	 	 	3.95	 	 	 	 	 	 	 	3.95	 
	
                            Total

                          	 	 	180	 	 	 	9	 	 	 	189	 	 	 	96.08	 	 	 	4.93	 	 	 	101.01	 

                  

                

              

            

          

        

      

      
        
           

        

        
          31

          
            

          

        

        
           

        

      

      
        	
                (a)

              	
                An
      exploratory well is a well drilled either in search of a new, as yet
      undiscovered, oil or natural gas reservoir, or to greatly extend the known
      limits of a previously discovered reservoir.  A development well
      is a well drilled within the presently proved productive area of an oil or
      natural gas reservoir, as indicated by reasonable interpretation of
      available data, with the objective of being completed in that
      reservoir.

              

      

      

      
        	
                (b)

              	
                A
      productive well is an exploratory or development well found to be capable
      of producing either oil or natural gas in sufficient quantities to justify
      completion as an oil or natural gas
well.

              

      

      

      
        	
                (c)

              	
                A
      dry well is an exploratory or development well that is not a producing
      well or a well that has either been plugged or has been converted to
      another use.

              

      

      

      
        
          	
                  (d)

                	
                  At
      December 31, 2007, the Debtors had 3 gross (1 net) wells in the process of
      being drilled which are included in the December 31, 2008
      totals.

                

        

      

      

      
        
          	
                  (e)

                	
                  At
      December 31, 2008, they had 5 gross (1 net) wells in the process of being
      drilled.

                

        

      

      

      
        
          
            
              	 	
                      (i)

                    	
                      Sale
      of Production.

                    

            

          

        

      

       

      The
Debtors market natural gas and oil production on a competitive basis for their
operated properties.  In most cases, the Debtors connect to nearby
high pressure transmission pipelines and utilize a gas marketing firm for the
sale of production.

       

      The
Debtors maintained a base sales contact with Integrys Energy Services, Inc.
(formerly WPS Energy Service, Inc.) covering all production from its Hudson
properties. The Debtors have been negotiating a firm price on approximately
4,000 mmbtu per day on a month by month basis and the
remaining  production is sold on daily basis at prevailing market
rates.

       

      The
Debtors are in discussions about the possibility of entering into a long-term
contract.  The Debtors’ average daily production for operated Antrim
was 4,219 mmbtu per day for six months ending June 30, 2009.  Integrys
Energy Services, Inc. is the Debtors’ primary marketing partner for the majority
of their Michigan operated properties.  In addition, the Debtors have
established other base contracts primarily for future natural gas sales in
Indiana and Michigan.  The Debtors set the firm delivery volume
obligation under these contracts on either a monthly or a daily basis with the
amount of the obligation varying from month to month or day to day.

       

      Prices
for oil and natural gas fluctuate fairly widely based on supply and
demand.  Supply and demand are influenced by weather, foreign policy,
and industry practices.

       

      
        	
                 
      

              	
                (j)

              	
                Hedging.

              

      

       

      The
Debtors’ results of operations and operating cash flows are impacted by the
fluctuations in the market prices of natural gas.  To mitigate a
portion of the exposure to adverse market changes, the Debtors have periodically
entered into various derivative instruments with a major financial
institution.  The purpose of the derivative instrument is to provide a
measure of stability to the Debtors’ cash flow in meeting financial obligations
while operating in a volatile natural gas market environment.  The
derivative instrument reduces the Debtors’ exposure on the hedged production
volumes to decreases in commodity prices and limits the benefit the Debtors
might otherwise receive from any increases in commodity prices on the hedged
production volumes.  Since October 1, 2008, the Debtors have been
without any such hedges.
 

      
        
           

        

        
          32

          
            

          

        

        
           

        

      

      
        	
                 
      

              	
                (k)

              	
                Competition
      and Markets.

              

      

       

      The
Debtors face competition from other oil and natural gas companies in all aspects
of their business, including acquisition of producing properties and oil and
natural gas leases, marketing of oil and natural gas, and obtaining goods,
services and labor.  Many of the Debtors’ competitors have
substantially larger financial and other resources than the Debtors
have.  Competition for natural gas delivery is presented by other
pipelines and gas gathering systems, and is also presented by alternative fuel
sources, including heating oil and other fossil fuels.

       

      The
availability of a ready market for, and the price of, any hydrocarbons produced
will depend on many factors beyond the Debtors’ control, including, but not
limited to, the amount of domestic production and imports of foreign oil and
liquefied natural gas, the marketing of competitive fuels, the proximity and
capacity of natural gas pipelines, the availability of transportation and other
market facilities, the demand for hydrocarbons, the effect of federal and state
regulation of allowable rates of production, taxation, the conduct of drilling
operations, and federal regulation of natural gas.  In addition, the
restructuring of the natural gas pipeline industry virtually eliminated the gas
purchasing activity of traditional interstate gas transmission pipeline
buyers.  Producers of natural gas have therefore been required to
develop new markets among gas marketing companies, end users of natural gas, and
local distribution companies.  All of these factors, together with
economic factors in the marketing arena, generally affect the supply of, and/or
demand for, oil and natural gas, and thus the prices available for sales of oil
and natural gas.

       

      
        	
                 
      

              	
                (l)

              	
                Regulatory
      Considerations.

              

      

       

      Proposals
and proceedings that might affect the oil and gas industry are periodically
presented to Congress, the Federal Energy Regulatory Commission (“FERC”), the
Minerals Management Service (“MMS”), state legislatures and commissions, and
courts.  The Debtors cannot predict when or whether any such proposals
may become effective.  The natural gas industry is heavily
regulated.  No material portion of the Debtors’ business is
subject to
renegotiation of profits or termination of contracts or subcontracts at the
election of the federal government.

       

      The
Debtors’ operations are subject to various types of regulation at the federal,
state, and local levels.  This regulation includes requiring permits
for drilling wells, maintaining bonding requirements in order to drill or
operate wells, and regulating the location of wells, the method of drilling and
casing wells, the surface use and restoration of properties upon which wells are
drilled, the plugging and abandoning of wells, and the disposal of fluids used
or generated in connection with operations.  The Debtors’ operations
are also subject to various conservation laws and regulations.  These
include the regulation of the size of drilling and spacing units or proration
units and the density of wells which may be drilled and the unitization or
pooling of oil and natural gas properties.  In addition, state
conservation laws sometimes establish maximum rates of production from oil and
natural gas wells, generally prohibit the venting or flaring of natural gas, and
impose certain requirements regarding the ratability of
production.  The effect of these regulations may limit the amount of
oil and natural gas the Debtors can produce from their wells in a given state
and may limit the number of wells or the locations at which the Debtors can
drill.

       

      
        
           

        

        
          33

          
            

          

        

        
           

        

      

    

     

    
      Currently,
there are no federal, state, or local laws that regulate the price for the
Debtors’ sales of natural gas, natural gas liquids, crude oil, or
condensate.  However, the rates charged and terms and conditions for
the movement of gas in interstate commerce through certain intrastate pipelines
and production area hubs are subject to regulation under the Natural Gas Policy
Act of 1978, as amended.  Pipeline and hub construction activities
are, to a limited extent, also subject to regulations under
the Natural Gas Act of 1938, as amended.  While these controls do not
apply directly to the Debtors, their effect on natural gas markets can be
significant in terms of competition and cost of transportation services, which
in turn can have a substantial impact on the Debtors’ profitability and costs
of doing
business.

       

      Additional
proposals and proceedings that might affect the natural gas and crude oil
extraction industry are considered from time to time by Congress, FERC and other
federal regulators, state regulatory bodies, and the courts.  For
example,  actions are now under consideration by the federal
government and certain states, including Michigan, to regulate emissions of
certain gases, commonly referred to as “greenhouse gases” (“GHG”), including
carbon dioxide and methane.  Such regulation could impact the Debtors’
operations as well as the price and use of fossil fuels, including oil and
natural gas.

       

      The
Debtors cannot predict when or if any such proposals might become effective and
their effect, if any, on their operations.

       

      Regulation
of gathering facilities generally includes various safety, environmental, and,
in some circumstances, nondiscriminatory take requirements.  This
regulation has not generally been applied against producers and gatherers of
natural gas to the same extent as processors, although natural gas gathering may
receive greater regulatory scrutiny in the future.

       

      The
Debtors’ oil and natural gas production and saltwater disposal operations, and
their processing, handling, and disposal of hazardous and other regulated
materials, such as hydrocarbons and naturally occurring radioactive materials
(“NORM”), are subject to stringent environmental regulation. Compliance with
environmental regulations is generally required as a condition to obtaining
drilling permits.  Government inspectors frequently inspect regulated
facilities and review records required to be maintained to document
compliance.  The Debtors could incur significant costs, including
cleanup costs resulting from a release of regulated materials, third-party
claims for property damage, personal injuries and damages to natural resources,
fines, and sanctions, as a result of any violations or liabilities under
environmental or other laws.  Changes in, or more stringent
enforcement of, environmental laws could also result in additional operating
costs and capital expenditures.

    

     

    
      
        
        

      

      
        34

        
          

        

      

      
        
        

      

    

    

    Various
federal, state, and local laws regulating the discharge of materials into the
environment, or otherwise relating to the protection of the environment,
directly impact oil and natural gas exploration, development, and production
operations, and consequently may impact the Debtors’ operations and
costs.  These requirements include, among others, (i) regulations by
the federal Environmental Protection Agency (“EPA”) and various state agencies
regarding approved methods of disposal for certain hazardous and non-hazardous
wastes, including produced water; (ii) the federal Comprehensive Environmental
Response, Compensation, and Liability Act of 1980 and analogous state laws,
which regulate the removal or remediation of previously disposed wastes
(including wastes disposed of or released by prior owners or operators),
property contamination (including soil, surface water, and groundwater
contamination), and remedial plugging operations to prevent future
contamination; (iii) the federal Clean Air Act and comparable state and local
requirements, which may require certain pollution controls with respect to air
emissions from the Debtors’ operations; (iv) the Oil Pollution Act of 1990,
which contains numerous requirements relating to the prevention of and response
to oil spills into waters of the United States; (v) the Resource Conservation
and Recovery Act, which is the principal federal statute governing the
treatment, storage, and disposal of solid and hazardous wastes; (vi) the federal
Clean Water Act and analogous state laws that restrict the discharge of
pollutants into regulated waters; and (vii) state regulations and statutes
governing the handling, treatment, storage, and disposal of NORM.

     

    A permit
from the EPA or a state regulatory agency, such as the Michigan Department of
Environmental Quality (the “MDEQ”), must be obtained before the Debtors may
drill a salt water disposal well.  The amount of time required to
obtain such a permit varies from state to state, but can take as much as six or
more months in Michigan.  Since many gas wells can only be produced if
a salt water disposal well is available, the salt water disposal well permit
requirement may delay the commencement of production.

     

    In the
course of the Debtors’ routine oil and natural gas operations, surface spills
and leaks, including casing leaks of oil or other materials may occur, and the
Debtors may incur costs for waste handling and environmental
compliance.  It is also possible that the Debtors’ oil and natural gas
operations may require them to manage NORM.  NORM are present in
varying concentrations in sub-surface formations, including hydrocarbon
reservoirs, and may become concentrated in scale, film, and sludge in equipment
that comes in contact with crude oil and natural gas production and processing
streams.  Some states, including Michigan and Texas, have enacted
regulations governing the handling, treatment, storage, and disposal of NORM.
Moreover, the Debtors are able to control directly the operations of only those
wells for which they act as the operator.  Despite the Debtors’ lack
of control over wells owned by them but operated by others, the failure of the
operator to comply with the applicable environmental regulations may, in certain
circumstances, be attributed to the Debtors under applicable state, federal, or
local laws or regulations.

     

    The
Debtors believe that they are in substantial compliance with all currently
applicable environmental laws and regulations.  The Debtors have been
or are in discussions with the MDEQ regarding water quality issues regarding
certain wells in Arrowhead, Blue Chip, and Gaylord Fishing Club
projects.  In 2007, the MDEQ instituted a water sampling and
monitoring requirement for produced water from wells north of a line of
demarcation that applies to most of the existing wells in the Debtors’ Antrim
projects, primarily to enhance enforcement of the restrictions on discharge of
fresh or potable water.  The drilling permits for new wells in this
area now require produced water monitoring and reporting of gas and water volume
and water quality.  Moreover, if the water produced by any of the
Debtors’ existing wells has levels of chloride or total dissolved solids
concentration below specified levels, the Debtors may be required to shut-in the
well.  If such wells cannot be remediated so that fresh water is no
longer produced, the Debtors may be required to plug such wells.

    

    
      
        
           

        

        
          35

          
            

          

        

        
           

        

      

    

     

    In
September 2008, the Debtors received a notice of violation from the MDEQ
requesting a proposal from the Debtors’ management to plug 25 wells in the
Arrowhead and Blue Chip projects.  Five of the wells listed were
plugged during 2008.  In December 2008, the Debtors agreed to shut-in
three additional wells bringing the total shut-in wells to 13, and continue to
provide water samples for the remaining wells for further
analysis.  On June 3, 2009, the Debtor received a violation notice
from the DEQ requiring the Debtor to plug the remaining wells by September 1,
2009.  Debtor is currently discussing various options and an
appropriate form of response.  There is no assurance that the Debtor
will not be required to plug the remaining wells in the Arrowhead and Blue Chip
projects.  If the Debtor is required to plug the remaining wells,
operations are not expected to be materially impacted as most of these wells are
uneconomic and plugging costs are estimated to be $12,000 per well.

     

    On April
29, 2009, the Debtors received a letter from the MDEQ denying the Debtors’
request to extend its temporary abandonment status on 19 wells located in the
Tomahawk and Black Bear Central projects.  The MDEQ is requesting the
Debtors submit a plan to plug the 19 wells.  On May 29, 2009, the
Debtor asked the DEQ to reconsider Aurora’s temporary abandonment request for 2
of the 19 wells since these wells are included in future remediation
plans.  The DEQ subsequently granted extensions that will terminate on
March 31, 2010.  On June 1, 2009, the Debtor asked the DEQ to
reconsider the temporary abandonment request for the remaining 17
wells.  In a letter dated June 4, 2009, the DEQ specified that no
later than September 10, 2009, the Debtor will need to plug and abandon the
wells or place the wells into production.  The Debtor is currently
discussing various options and an appropriate form of response.  There
is no assurance that the Debtor will not be required to plug the 19
wells.  If the Debtor is required to plug the 19 wells, operations are
not expected to be materially impacted as the wells are currently in temporary
abandonment status.  However, plugging costs are estimated to be $0.3
million.

     

    To date,
compliance with environmental laws and regulations has not required the
expenditure of any material amount of money.  To the Debtors’
knowledge, other than the water quality issue and related notices of violation
described above, there are currently no known adverse environmental conditions
that exist on any of the Debtors’ owned or operated properties, and there are no
current or threatened actions or claims by any local, state, or federal agency,
or by any private party against them pertaining to such a condition, which the
Debtors expect will require material expenditures to
address.  However, there can be no assurance that this will continue
to be the case. Discovery of previously unknown conditions, or accidental spills
or releases of regulated materials could result in the incurrence of significant
costs in the future. Also, changes in existing environmental requirements or
enforcement policies could result in increased costs. For example, certain
petroleum production wastes, generated during some of the Debtors’ operations,
are now excluded from RCRA’s hazardous waste regulations.  If they
were designated “ hazardous wastes” in the future, they would be subject to more
stringent and likely more costly handling and disposal requirements. In
addition,  as noted above,  restrictions may be placed on
emissions of GHG.  The EPA has proposed a mandatory carbon emissions
reporting system for certain facilities and products, and has made an
endangerment finding regarding GHG emissions under the federal Clean Air Act
which could lead to increased regulation.  Legislation under
consideration in  the U.S. Congress could result in the institution of
a cap and trade program for carbon dioxide and other GHG emissions in the
U.S.  Depending on their timing and specific requirements, such
actions could adversely impact the Debtors’ operations, as well as those of
their customers, in the future.

    

    
      
        
           

        

        
          36

          
            

          

        

        
           

        

      

    

     

    
      	
               
      

            	
              4.

            	
              The Debtors’
      Strategy.

            

    

     

    The
objective of the Debtors’ business is to maximize their value through the
development of their substantial acreage base.  This strategy may
change subsequent to the Effective Date, but the Reorganized Debtors may embrace
this philosophy among others:

     

    Establish a base of lower risk
development projects.  The Debtors have established an
extensive leasehold position in the Antrim shale and New Albany
shale.  Both plays are at varying stages of their respective
development life cycle.  The Debtors believe the New Albany shale
represents emerging plays, as development activity has only been initiated
within the last several years.  As the Debtors and others invest
capital into these plays, they believe that increased information resulting from
drilling and production data by all operators will lower the risk profile,
enhance results, and provide opportunities for creating natural gas reserves and
production growth.

     

    Generate growth through drilling and
farmout arrangement.  The Debtors expect to generate long-term
reserve and production growth through farmout arrangements and drilling
activities.  The Debtors believe their experience and expertise
enables them to identify and evaluate farmout arrangements and develop natural
gas projects.

     

    Optimize the Debtors’ asset
portfolio.   With extensive leasehold positions in two
shale plays, as well as several smaller targeted projects in other locations,
the Debtors believe that they have created a diverse asset portfolio that must
be carefully developed to limit their risk profile.  Due to challenges
in the capital markets, the Debtors’ focus has shifted form drilling and
operating natural gas and oil wells, to working in partnership with others to
develop their assets.  The Debtors expect to regularly review their
projects to optimize the value of this asset portfolio, the result of which may
include appropriate joint ventures, farm-outs, equity partnerships,
acquisitions, or divestitures.

     

    
      	
               
      

            	
              5.

            	
              Summary of Selected Interim
      Financial Data.

            

    

     

    The
following table sets forth the Debtors’ selected financial data as of and for
each of the periods indicated.  The data as of and for the year ended
December 31, 2008, is derived from the Debtors’ audited consolidated financial
statements for the period indicated.  The data as of and for the six
months ended June 30, 2009 is derived from the Debtors’ historical unaudited
condensed consolidated financial statements for the interim periods indicated.
The following information is not necessarily indicative of the Debtors’ future
financial results.

    

    
      
        
           

        

        
          37

          
            

          

        

        
           

        

      

    

    

    
      
        
          	 
      	 	
                  Six Months ended June 30,

                	 
	 
      	 	
                  2009

                	 	 	
                  2008

                	 
	
                  Statement
      of Operations Data

                	 	 	 	 	 	 
	
                  Revenues:

                	 	 	 	 	 	 
	
                  Oil
      and natural gas sales

                	 	$	5,830,208	 	 	$	13,237,651	 
	
                  Pipeline
      transportation and marketing

                	 	 	339,891	 	 	 	557,353	 
	
                  Interest
      and other

                	 	 	886,795	 	 	 	244,308	 
	
                  Total
      revenues

                	 	 	7,056,894	 	 	 	14,039,312	 
	 
      	 	 	 	 	 	 	 	 
	
                  Expenses:

                	 	 	 	 	 	 	 	 
	
                  Production
      taxes

                	 	 	182,505	 	 	 	742,077	 
	
                  Production
      and lease operating expense

                	 	 	4,373,122	 	 	 	5,546,202	 
	
                  Pipeline
      and processing operating expense

                	 	 	291,166	 	 	 	265,441	 
	
                  General
      and administrative expense

                	 	 	5,234,856	 	 	 	3,556,248	 
	
                  Oil
      and natural gas depletion and amortization

                	 	 	853,527	 	 	 	1,908,141	 
	
                  Other
      assets depreciation and amortization

                	 	 	578,359	 	 	 	490,781	 
	
                  Interest
      expense

                	 	 	5,368,321	 	 	 	3,205,050	 
	
                  Ceiling-write
      down of oil and gas properties

                	 	 	53,639,522	 	 	 	-	 
	
                  Taxes
      (refunds), other

                	 	 	(64,439	)	 	 	(48,891	)
	
                  Total
      expenses

                	 	 	70,456,939	 	 	 	15,665,049	 
	 
      	 	 	 	 	 	 	 	 
	
                  Net
      loss

                	 	 	(63,400,045	)	 	 	(1,625,737	)
	
                  Net
      income attributable to noncontrolling interest

                	 	 	(19,061	)	 	 	(32,149	)
	
                  Net
      loss from continuing operations

                	 	$	(63,419,106	 	 	$	(1,657,886	)
	 
      	 	 	 	 	 	 	 	 
	
                  Discontinued
      Operations:

                	 	 	 	 	 	 	 	 
	
                  Operating
      loss

                	 	 	(280,785	)	 	 	(226,410	)
	
                  Loss
      on disposal

                	 	 	(1,434,858	)	 	 	-	 
	
                  Loss
      from discontinued operations

                	 	 	(1,715,643	)	 	 	(226,410	)
	 
      	 	 	 	 	 	 	 	 
	
                  Net
      loss after discontinued operations attributable to common
      shareholders

                	 	$	(65,134,749	)	 	$	(1,884,296	)
	
                  Net
      loss per common share – basic and diluted

                	 	$	(0.61	)	 	$	(0.02	)
	 
      	 	 	 	 	 	 	 	 
	
                  Weighted
      average common shares outstanding – basic and diluted

                	 	 	103,282,788	 	 	 	104,353,520	 
	 
      	 	 	 	 	 	 	 	 
	
                  Cash
      Flow Data

                	 	 	 	 	 	 	 	 
	
                  Net
      cash (used in) provided by operating activities

                	 	$	(3,335,152	)	 	$	5,261,787	 
	
                  Net
      cash used in investing activities

                	 	$	(1,321,405	 	 	$	(8,925,072	)
	
                  Cash
      (used in) provided by financing activities

                	 	$	(4,731,264	)	 	$	13,505,580	 

        

      

    

     

    
      
        
           

        

        
          38

          
            

          

        

        
           

        

      

    

     

    
      
        
          
            
              	 
      	 	
                      June 30, 2009

                      (Unaudited)

                    	 	 	
                      December 31, 2008

                      (Audited)

                    	 
	
                      Balance
      Sheet Data

                    	 	 	 	 	 	 
	
                      Cash
      and cash equivalents

                    	 	$	5,273,874	 	 	$	10,005,138	 
	
                      Other
      current assets

                    	 	 	4,394,674	 	 	 	6,439,387	 
	
                      Oil
      and natural gas properties, net

                    	 	 	62,664,521
      	 	 	 	115,134,222	 
	 	 	 	 	 	 	 	 	 
	
                      Other
      property and equipment, net

                    	 	 	12,623,816	 	 	 	14,451,523	 
	
                      Other
      assets

                    	 	 	13,309,403	 	 	 	13,906,789	 
	
                      Total
      assets

                    	 	$	98,266,288	 	 	$	160,201,081	 
	 
      	 	 	 	 	 	 	 	 
	
                      Current
      liabilities

                    	 	 	133,441,851	 	 	 	127,312,547	 
	
                      Long-term
      liabilities

                    	 	 	2,418,162	 	 	 	5,265,459	 
	
                      Noncontrolling
      interest

                    	 	 	218,017	 	 	 	467,937	 
	
                      Shareholders’
      (deficit) equity

                    	 	 	(37,811,742	)	 	 	27,623,075	 
	
                      Total
      liabilities and shareholders’ equity

                    	 	$	98,266,288	 	 	$	160,201,081	 

            

          

        

      

    

    

    
      
        
           

        

        
          39

          
            

          

        

        
           

        

      

    

     

    
      	
               
      

            	
              6.

            	
              Summary of Selected Historical
      Financial Data.

            

    

     

    The
following table sets forth the Debtors’ December 31, 2008, 2007, 2006, and 2005
year end selected financial data as of and for each of the periods
indicated.  The data as of and for the years ended December 31,
2008, 2007, 2006, and 2005, is derived from the Debtors’ audited consolidated
financial statements for the periods indicated.  The following
information is not necessarily indicative of the Debtors’ future financial
results.

     

    
      
        
          
            
              	 
      	 	
                      2008

                    	 	 	
                      2007

                    	 	 	
                      2006

                    	 	 	
                      2005(a)

                    	 
	
                      Statement
      of Operations Data

                    	 	 	 	 	 	 	 	 	 	 	 	 
	
                      Revenues:

                    	 	 	 	 	 	 	 	 	 	 	 	 
	
                         Oil
      and natural gas sales

                    	 	$	25,201,777	 	 	$	26,723,818	 	 	$	21,591,811	 	 	$	6,743,444	 
	
                         Pipeline
      transportation and marketing

                    	 	 	710,250	 	 	 	578,020	 	 	 	489,473	 	 	 	-	 
	
                         Field
      service and sales

                    	 	 	3,051,419	 	 	 	390,401	 	 	 	125,611	 	 	 	-	 
	
                         Interest
      and other

                    	 	 	877,488	 	 	 	549,149	 	 	 	220,592	 	 	 	666,850	 
	
                      Total revenues

                    	 	 	29,840,934	 	 	 	28,241,388	 	 	 	22,427,487	 	 	 	7,410,294	 
	 
      	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	
                      Expenses:

                    	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	
                         Production
      taxes

                    	 	 	1,338,397	 	 	 	1,123,070	 	 	 	877,319	 	 	 	506,635	 
	
                         Production
      and lease operating expense

                    	 	 	9,995,981	 	 	 	8,424,096	 	 	 	5,966,341	 	 	 	1,587,205	 
	
                         Pipeline
      and processing operating expense

                    	 	 	593,059	 	 	 	482,647	 	 	 	265,795	 	 	 	-	 
	
                         Field
      services expense

                    	 	 	2,439,939	 	 	 	321,753	 	 	 	90,913	 	 	 	-	 
	
                         General
      and administrative expense

                    	 	 	9,075,903	 	 	 	8,029,122	 	 	 	7,531,718	 	 	 	3,435,507	 
	
                         Oil
      and natural gas depletion and
      amortization

                    	 	 	5,380,106	 	 	 	3,769,104	 	 	 	2,681,290	 	 	 	767,511	 
	
                         Other
      assets depreciation and amortization

                    	 	 	1,193,993	 	 	 	2,396,026	 	 	 	2,083,191	 	 	 	308,647	 
	
                         Interest
      expense

                    	 	 	9,201,343	 	 	 	4,582,021	 	 	 	4,573,785	 	 	 	1,307,370	 
	
                         Ceiling-write
      down of oil and
      gas properties

                    	 	 	78,457,801	 	 	 	-	 	 	 	-	 	 	 	-	 
	
                         Goodwill
      impairment

                    	 	 	19,373,264	 	 	 	-	 	 	 	-	 	 	 	-	 
	
                         Loss
      on debt extinguishment

                    	 	 	-	 	 	 	3,448,520	 	 	 	-	 	 	 	-	 
	
                         Taxes,
      other

                    	 	 	77,671	 	 	 	19,021	 	 	 	250,884	 	 	 	29,651	 
	
                      Total expenses

                    	 	 	137,127,457	 	 	 	32,595,380	 	 	 	24,321,236	 	 	 	7,942,526	 
	
                      Loss
      before minority interest

                    	 	 	(107,286,523	)	 	 	(4,353,992	)	 	 	(1,893,749	)	 	 	(532,232	)
	
                      Minority
      interest in income of subsidiaries

                    	 	 	(78,139	)	 	 	(67,841	)	 	 	(50,898	)	 	 	15,960	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	
                      Net
      loss

                    	 	 	(107,364,662	)	 	 	(4,421,833	)	 	 	(1,944,647	)	 	 	(516,272	)
	
                      Less
      dividends on preferred stock

                    	 	 	-	 	 	 	-	 	 	 	-	 	 	 	-	 
	
                      Loss
      attributable to common shareholders

                    	 	$	(107,364,662	)	 	$	(4,421,833	)	 	$	(1,944,647	)	 	$	(516,272	)
	 
      	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	
                      Net
      loss per common share – basic and
      diluted

                    	 	$	(1.04	)	 	$	(0.04	)	 	$	(0.02	)	 	$	(0.01	)
	 
      	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	
                      Weighted
      average common shares outstanding – basic and diluted

                    	 	 	103,062,697	 	 	 	101,633,162	 	 	 	82,288,243	 	 	 	40,622,000	 
	 
      	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	
                      Cash
      Flow Data

                    	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	
                      Cash
      provided by operating activities

                    	 	$	4,098,818	 	 	$	10,079,049	 	 	$	5,467,910	 	 	$	(2,404,739	)
	
                      Cash
      used by investing activities

                    	 	 	(10,701,427	)	 	 	(61,100,489	)	 	 	(89,606,098	)	 	 	(39,869,326	)
	
                      Cash
      provided by financing activities

                    	 	 	14,182,069	 	 	 	51,711,722	 	 	 	73,892,946	 	 	 	49,075,121	 

            

          

        

      

    

    

    
      	
              (a)

            	
              The
      Debtors acquired AEL on October 31, 2005 through the merger of their
      wholly-owned subsidiary with and into AEL.  The acquisition of
      AEL was accounted for as a reverse merger, with AEL being the acquiring
      party for accounting purposes.  As a result of the reverse
      merger, the historical financial statements presented for periods prior to
      the acquisition date are the financial statements of AEL.  The
      operations of the former Cadence Resources Corporation (now known as
      Aurora Oil & Gas Corporation) businesses have been included in the
      financial statements from the date of
  acquisition.

            

    

    

    
      
        
           

        

        
          40

          
            

          

        

        
           

        

      

    

    

    
      
        	 
      	 	
                
                

                As of December 31,

              	 
	 
      	 	
                2008

              	 	 	
                2007

              	 	 	
                2006

              	 	 	
                2005

              	 
	
                Balance
      Sheet Data

              	 	 	 	 	 	 	 	 	 	 	 	 
	
                Cash
      and cash equivalents

              	 	 	10,005,138	 	 	$	2,425,678	 	 	$	1,735,396	 	 	$	11,980,638	 
	
                Other
      current assets

              	 	 	6,439,387	 	 	 	8,901,774	 	 	 	11,306,797	 	 	 	7,274,869	 
	
                Oil
      and natural gas properties, net (using
      full cost accounting)

              	 	 	115,398,244	 	 	 	205,260,103	 	 	 	161,471,277	 	 	 	68,960,754	 
	
                Other
      property and equipment, net

              	 	 	14,451,523	 	 	 	14,923,840	 	 	 	10,465,897	 	 	 	3,610,138	 
	
                Other
      assets

              	 	 	13,906,789	 	 	 	23,160,273	 	 	 	27,407,825	 	 	 	24,995,746	 
	
                Total
      assets

              	 	$	160,201,081	 	 	$	254,671,668	 	 	$	212,387,192	 	 	$	116,822,145	 
	 
      	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	
                Current
      liabilities

              	 	 	127,312,547	 	 	$	8,580,990	 	 	$	18,040,082	 	 	$	17,279,518	 
	
                Long-term
      debt, net of current maturities

              	 	 	5,265,459	 	 	 	113,835,028	 	 	 	54,538,138	 	 	 	42,794,862	 
	
                Minority
      interest in net assets of subsidiaries

              	 	 	467,937	 	 	 	112,661	 	 	 	77,873	 	 	 	61,913	 
	
                Shareholders’
      equity

              	 	 	27,155,138	 	 	 	132,142,989	 	 	 	139,731,099	 	 	 	56,685,852	 
	
                Total
      liabilities and shareholders’ equity

              	 	$	160,201,081	 	 	$	254,671,668	 	 	$	212,387,192	 	 	$	116,822,145	 

      

    

    

    
      	
               
      

            	
              7.

            	
              Other
      Properties.

            

    

     

    
      	
               
      

            	
              a.

            	
              Office
      Space.

            

    

     

    The
Debtors own office space located in Traverse City, Michigan.  The
Debtors’ unit contains approximately 14,645 square feet on the second floor of a
three-story building, plus common areas and 15 covered parking
spaces.  The Debtors moved their corporate offices into this space on
December 5, 2005.

     

    As noted
above, this property serves as collateral for the Debtors’ existing obligations
to NW Bank under the NW Bank Note.

     

    
      	
               
      

            	
              8.

            	
              Legal
      Proceedings.

            

    

     

    
      	
               
      

            	
              a.

            	
              General
      Legal Matters.

            

    

     

    The
Debtors are generally involved in various disputes incidental to its business
operations, which include claims from royalty owners. Although the outcome of
these disputes cannot be predicted, management, after consultation with legal
counsel, is of the opinion that the final resolution of all currently pending or
threatened litigation is not likely to have a material adverse effect on the
Debtors’ consolidated financial position, results of operations, or cash
flows.  All of the actions in which one of the Debtors is a defendant
have been stayed by operation of law as a result of the commencement of these
Chapter 11 Cases

     

    
      	
               
      

            	
              b.

            	
              Environmental
      Matters.

            

    

     

    In 2007,
the MDEQ instituted a water sampling and monitoring requirement for produced
water from wells north of a line of demarcation that applies to most of the
existing wells in the Debtors’ Antrim projects, primarily to enhance enforcement
of the restrictions on discharge of fresh or potable water.  The
drilling permits for new wells in this area now require produced water
monitoring and reporting of gas and water volume and water
quality.  Moreover, if the water produced by any of the Debtors’
existing wells has levels of chloride or total dissolved solids concentration
below specified levels, the Debtors may be required to shut-in the
well.  If such wells cannot be remediated so that fresh water is no
longer produced, the Debtors may be required to plug such wells.  For
more information on how the effects of these on the Debtors, see the section
above entitled “Description of Business - Overview”.

    

    
      
        
           

        

        
          41

          
            

          

        

        
           

        

      

    

     

    In
September 2007, the MDEQ collected and analyzed water samples from certain wells
in the Arrowhead, Blue Chip, and Gaylord Fishing Club projects.  On
January 31, 2008, management met with the MDEQ to review the
analyses.  Since the water composition in most of the wells fell
within the range deemed by the DEQ to be fresh water, the DEQ requested that the
Debtors plug six wells, plug or remediate, i.e., eliminate the production of
fresh water, an additional 15 wells, and collect water samples from the
remaining wells that had not been previously sampled.  Management
agreed to plug five of the six wells requested and collected a new round of
water samples from each requested well for additional analysis.

     

    In
September 2008, the Debtors received a notice of violation from the MDEQ
requesting a proposal from the Debtors’ management to plug 25 wells in the
Arrowhead and Blue Chip projects.  Five of the wells listed were
plugged during 2008.  In December 2008, the Debtors agreed to shut-in
three additional wells bringing the total shut-in wells to 13, and continue to
provide water samples for the remaining wells for further
analysis.  On June 3, 2009, the Debtor received a violation notice
from the DEQ requiring the Debtor to plug the remaining wells by September 1,
2009.  Debtor is currently discussing various options and an
appropriate form of response.  There is no assurance that the Debtor
will not be required to plug the remaining wells in the Arrowhead and Blue Chip
projects.  If the Debtor is required to plug the remaining wells,
operations are not expected to be materially impacted as most of these wells are
uneconomic and plugging costs are estimated to be $12,000 per well.

     

    On April
29, 2009, the Debtors received a letter from the MDEQ denying the Debtors’
request to extend its temporary abandonment status on 19 wells located in the
Tomahawk and Black Bear Central projects.  The MDEQ is requesting the
Debtors submit a plan to plug the 19 wells.  On May 29, 2009, the
Debtor asked the DEQ to reconsider Aurora’s temporary abandonment request for 2
of the 19 wells since these wells are included in future remediation
plans.  The DEQ subsequently granted extensions that will terminate on
March 31, 2010.  On June 1, 2009, the Debtor asked the DEQ to
reconsider the temporary abandonment request for the remaining 17
wells.  In a letter dated June 4, 2009, the DEQ specified that no
later than September 10, 2009, the Debtor will need to plug and abandon the
wells or place the wells into production.  The Debtor is currently
discussing various options and an appropriate form of response.  There
is no assurance that the Debtor will not be required to plug the 19
wells.  If the Debtor is required to plug the 19 wells, operations are
not expected to be materially impacted as the wells are currently in temporary
abandonment status.  However, plugging costs are estimated to be $0.3
million.

     

    
      	
               
      

            	
              9.

            	
              Directors and Executive
      Officers of the Debtors.

            

    

     

    The
following table sets forth the name, age, and position of each of the Debtors’
executive officers and directors as of the Petition Date.  Under the
Debtors’ by-laws, the authorized number of directors is set at no fewer than
three and no more than ten directors.  The Board of Directors
currently has seven members.  Each member of the Board of Directors
serves for a term of one year that expires at the following annual shareholders’
meeting.

    

    
      
        
           

        

        
          42

          
            

          

        

        
           

        

      

    

     

    
      
        
          
            
              
                	
                        Name and Office

                      	 
      	
                        Experience

                      
	 	 	 
	
                        William
      W. Deneau

                        ·    
      Chairman of the Debtors

                      	 
      	
                        William
      W. Deneau has served on the Debtors’ Board of Directors since November 1,
      2005 and as Chief Executive Officer until shortly before the Petition
      Date.  Mr. Deneau also served as President until May 30,
      2007.  Mr. Deneau is the brother of Richard M. Deneau, another
      one of the Debtors’ directors, and the father of Jeffrey W. Deneau (the
      Treasurer and Investor Relations Officer of Aurora).

                      
	 	 	 
	
                        Sanford
      R. Edlein

                        ·    
      Chief Restructuring Officer

                      	 
      	
                        Sanford
      Edlein has been engaged by the Debtors to provide services as their Chief
      Restructuring Officer since June of 2009.  Mr. Edlein is a
      Managing Director of Huron Consulting Group LLC.

                      
	 	 	 
	
                        John
      C. Hunter

                        ·    
      Vice President, Exploration and Production

                         

                      	 
      	
                        John
      C. Hunter has served as a Vice President since May 30, 2007.  He
      has worked for the Debtors since 2005 as Senior Petroleum
      Engineer.  From 2004 to 2005, Mr. Hunter was Executive Vice
      President of Wellstream Energy Services providing petroleum engineering
      consulting services.  From 2000 to 2004, Mr. Hunter was
      President of Terra Drilling Services, LLC, and TerraFluids,
      LLC.

                      

              

            

          

        

      

    

     

    
      
        
        

      

      
        43

        
          

        

      

      
        
        

      

    

     

    
      
        
          
            
              	
                      Name and Office

                    	 
      	
                      Experience

                    
	 	 	 
	
                      Barbara
      E. Lawson

                      ·    
      Chief Financial Officer

                      ·

                    	 
      	
                      Barbara
      E. Lawson has served as the Debtors’ Chief Financial Officer since January
      22, 2008.  From March 2006 until she became the Chief Financial
      Officer, Ms. Lawson worked for the Debtors as SEC Reporting
      Manager.  From 2005 to 2006, Ms. Lawson was Vice President of
      Simple Financial Solutions, Inc., providing consulting services that
      covered public equity offerings and Sarbanes-Oxley Section 404
      implementation.  From 1988 to 2004, Ms. Lawson was employed with
      Midland Cogeneration Venture, LLP, an independent power producer, where
      her last position was Treasurer and Manager of Internal
    Audit.

                    
	 	 	 
	
                      Jeffrey
      W. Deneau

                      ·    
      Treasurer and Investor Relations Officer

                    	 
      	
                      Jeffrey
      W. Deneau has served as Aurora’s Treasurer since July 2008 and Investor
      Relations Officer since April 2006.  Prior to that, he served
      for five years as the Supervisor of Trading Operations for DTE Energy
      Company.  Prior to that, he served for three years as the
      Manager of Market Risk Analysis for NiSource Inc.  Mr. Deneau is
      the son of William W. Deneau and the nephew of Richard M.
      Deneau.

                    
	 	 	 
	
                      Richard
      M. Deneau

                      ·    
      Director

                    	 
      	
                      Richard
      M. Deneau has served on the Debtors’ Board of Directors since November 21,
      2005.  Mr. Deneau served as a Director and President of Anchor
      Glass Container Corporation (“Anchor”) from 1997 until his retirement in
      2004.  He was also the Chief Operating Officer of Anchor from
      1997 to 2002, and the Chief Executive Officer of Anchor from 2002 until
      his retirement.  Mr. Deneau is the brother of William W. Deneau
      and the uncle of Jeffrey W.
Deneau.

                    

            

          

        

      

    

     

    
      
        
        

      

      
        44

        
          

        

      

      
        
        

      

    

     

    
      
        
          
            
              
                
                  
                    	
                            Name and Office

                          	 
      	
                            Experience

                          
	 	 	 
	
                            John
      E. McDevitt

                            ·    
      Director

                             

                          	 
      	
                            John
      E. McDevitt has served as a Director of the Debtors since November 15,
      2008.  Mr. McDevitt also served as the Debtors’ President and
      Chief Operating Officer from January 22, 2008, until his resignation on
      November 15, 2008.  Since 2006, Mr. McDevitt has been a Manager
      and President of Acadian Energy, LLC, a private company focused on
      unconventional natural gas exploration and production in the New Albany
      Shale.

                          
	 	 	 
	
                            Gary
      J. Myles

                            ·    
      Director

                          	 
      	
                            Gary
      J. Myles has served on the Debtors’ Board of Directors since November 21,
      2005.  Mr. Myles is currently retired from his primary
      employment.  Prior to his retirement, Mr. Myles served as Vice
      President and Consumer Loan Manager for Fifth Third Bank of Northern
      Michigan, a wholly-owned subsidiary of Fifth Third
Bank.

                          
	 	 	 
	
                            Wayne
      G. Schaffer

                            ·    
      Director

                          	 
      	
                            Wayne
      G. Schaeffer joined the Debtors’ Board of Directors on January 19,
      2007.  Mr. Schaeffer was employed by Citizens Banking
      Corporation from 1983 until his retirement in June
2005.

                          
	 	 	 
	
                            Kevin
      D. Stulp

                            ·    
      Director

                          	 
      	
                            Kevin
      D. Stulp has served on the Debtors’ Board of Directors since March
      1997.  Since August 1995, Mr. Stulp has worked as a consultant
      with Forte Group, on the board of the Bible League, and is active with
      various other non-profit organizations and is currently a director of U.S.
      Silver Corporation, a publicly-traded silver mining company with
      operations in Wallace, Idaho.

                          
	 	 	 
	
                            Earl
      V. Young

                            ·    
      Director

                          	 
      	
                            Earl
      V. Young has served on the Debtors’ Board of Directors since November 21,
      2005.  Mr. Young has also served as a Director of AEL from June
      1997 until January 1, 2008, when AEL was merged into Aurora.  He
      is currently President of Earl Young & Associates of Dallas, Texas,
      which he founded in
1999.

                          

                  

                

              

            

          

        

      

    

     

    As
described below, the Plan provides that Reorganized Aurora’s board of directors
would have seven members, two of whom will initially be appointed by the First
Lien Loan Lenders and the remaining five to be appointed by the Second Lien Loan
Lenders, and that Reorganized Aurora will select the initial managers of
Reorganized HPPC.

    

    
      
        
           

        

        
          45

          
            

          

        

        
           

        

      

    

     

    In
addition, the Debtors currently anticipate that of the foregoing individuals, at
least John Hunter, Barbara Lawson, and Jeffrey Deneau will provide services to
the Reorganized Debtors pursuant to the Management Transition Services
Agreements (which are described further below) or otherwise.

     

    D.           Employment
Agreements, Benefits, and Related Plans.

     

    
      	
               
      

            	
              1.

            	
              Employee Salaries, Wages, and
      Benefits.

            

    

     

    
      	
               
      

            	
              ·

            	
              Salaries and Wages -
      The Debtors pay their employees on the 15th
      and the last day of each month, with the payroll period closing on such
      days.

            

    

    

    
      	
               
      

            	
              ·

            	
              Withholdings - Included
      in the payroll amounts are funds the Debtors withhold for the benefit of
      third parties, including federal, state, and local taxes, medical and
      health deductions, and other withholdings requested by employees or
      required by federal, state, and local laws.  Automatic Data
      Processing, Inc. (“ADP”), which the Debtors use to facilitate and process
      payroll, withdraws all withholding amounts at the same time it withdraws
      salary amounts from the Debtors’ accounts.  ADP then transfers
      these withheld funds to the appropriate parties, except amounts related to
      the 401(k) Plan, the Flex Spending Plan, AFLAC, and HSA Accounts (each as
      defined and discussed below), which amounts ADP calculates, and the
      Debtors themselves transfer to the appropriate
  recipients.

            

    

    

    
      	
               
      

            	
              ·

            	
              Severance - Prior to
      the Petition Date, the Debtors have maintained a severance program for
      non-management employees, whereby such employees would receive the greater
      of six weeks or two weeks per year of service upon
      termination.

            

    

    

    
      	
               
      

            	
              ·

            	
              401(k) Plan - The
      Debtors have sponsored and administered a 401(k) savings plan (the “401(k)
      Plan”) for employees that are over 21 years of age and that have completed
      at least one year of employment.  Employees wishing to
      participate in the 401(k) Plan may enroll in the quarter after they become
      eligible.  Pursuant to the 401(k) Plan, the Debtors withhold, at
      an eligible employee’s request, up to 100% of such employee’s annual,
      pre-tax pay for contribution to the 401(k) Plan, subject to applicable
      limitations imposed by the Internal Revenue Code.  Prior to June
      1, 2009, the Debtors matched 50% of employees’ contributions, up to 6% of
      such employees’ salary, with 20% vesting after two years, 50% vesting
      after three years, and 100% vesting after four years, but as of June 1,
      2009, they stopped matching
contributions.

            

    

    

    
      	
               
      

            	
              ·

            	
              Medical Plan - The
      Debtors provide eligible employees with coverage under their medical
      insurance program (the “Medical Plan”) through the Priority Health
      PriorityHSA HMO Plan, which offers, among other things, (a) preventive and
      hospital care covered at 100% for in-network providers; (b) deductibles of
      $1,150 per person and $2,300 per family, and copays of $50 per emergency
      room visit and ambulance trip and varying percentages for other treatments
      and procedures; (c) prescription drug coverage with copays of $10 for
      generic and $40 for brand name drugs; and (d) the ability to participate
      in health savings accounts (“HSA Accounts”) with pre-tax
      earnings.

            

    

    

    
      
        
           

        

        
          46

          
            

          

        

        
           

        

      

    

    

    
      	
               
      

            	
              ·

            	
              Dental Plan - The Debtors
      provide employees a dental plan (the “Dental Plan”), which provides for
      50% coinsurance for most dental procedures, but it does not provide for
      orthodontic coverage.  Under the Dental Plan, the Debtors pay
      100% of the associated premium for employees, with applicable employees
      paying 100% for dependent coverage.

            

    

    

    
      	
               
      

            	
              ·

            	
              AFLAC - The Debtors
      allow (but do not provide) eligible employees the ability to purchase
      additional insurance, including life and accidental death and
      dismemberment coverage, through AFLAC, with the applicable premium amounts
      being withheld from electing employees’ paychecks and paid over to
      AFLAC.

            

    

    

    
      	
               
      

            	
              2.

            	
              Change-in-Control
      Agreements.

            

    

     

    The
Debtors and certain key officers and employees entered into Change-in-Control
Agreements in 2007 (the “Change-in-Control Agreements”), to encourage these
individuals to remain employed with the Debtors through any potential
change-in-control.  Specifically, the Debtors entered into
Change-in-Control Agreements with Rebecca Abbott, Jeffrey Deneau, John C.
Hunter, Barbara E. Lawson, and Neil Smith.  These agreements provide
that during a two-year period following a change-in-control of the Debtors, the
applicable employees would:  (i) have a position and duties
commensurate to those the employee had prior to the change-in-control; (ii)
perform his or her services at a location within a 35-mile radius from his or
her previous worksite before the change-in-control; and (iii) receive an annual
base salary at least equal to the employee’s annual base salary prior to the
change-in-control unless a reduction in salary occurs on a proportional basis
simultaneously with a company-wide reduction in senior management
salaries.

     

    If any of
the foregoing commitments are not met, a “covered termination” is deemed to have
occurred.  In the event of a covered termination during the two-year
period following a change-in-control, the arrangement provides for the payment
of an amount equal to either one or two times the employee’s annual salary, the
provision of medical and dental benefits for up to 24 months following the date
of termination, and benefits continuation substantially similar to those to
which the employee was entitled prior to the date of termination.

     

    After
discussions with the First Lien Loan Administrative Agent, the employees at
issue have elected to resolve their claims under the Change-in-Control
Agreements by agreeing to enter into new agreements (the “Management Transition
Services Agreements”) with the Debtors and/or the Reorganized Debtors (as
applicable).  Pursuant to the Management Transition Services
Agreements, which will be substantially in the form as set forth in the Plan
Supplement, these individuals will provide transitional services to the Debtors
and/or the Reorganized Debtors (as applicable).  Among other
things:

    

    
      
        
           

        

        
          47

          
            

          

        

        
           

        

      

    

     

    
      	
               
      

            	
              ·

            	
              An
      aggregate amount of $213,865 will be distributed to the five employees who
      currently have Change-in-Control Agreements in place.  This
      amount represents an agreement by such employees to accept a lower amount
      of the total payments than would otherwise be due to them under the terms
      of their respective Change-in-Control Agreements.  A portion of
      this amount will be paid to these employees upon the Effective Date and
      the balance will be paid on the 90th day following the Effective
      Date.  All of these employees will receive the balance due to
      them in the event he or she is terminated by the Reorganized Debtors
      within 90 days following the Effective
Date.

            

    

    

    
      	
               
      

            	
              ·

            	
              For
      those employees who previously agreed to accept salary cuts for a 90-day
      period in order to provide assistance to the Debtors, all or a portion of
      such pay reductions have been restored in whole or in part effective as of
      October 1, 2009.

            

    

    

    
      	
               
      

            	
              ·

            	
              The
      salaries to be paid to each of the five employees by the Reorganized
      Debtors will not be reduced for the 90-day period following the Effective
      Date.

            

    

    

    
      	
               
      

            	
              ·

            	
              In
      addition, if any of such five employees is terminated, each of them will
      be entitled to a severance payment that is consistent with Aurora’s
      current severance policy, which equals two weeks’ pay for every year of
      service by such employee (with all partial years prorated), with a minimum
      of six weeks’ salary.

            

    

    

    VI.    
EVENTS LEADING TO THE FILING OF THESE CASES

     

    As a
result of, among other things, the reduced demand for, and the deflated price
of, natural gas, and the initiation of cost-saving measures that temporarily
hindered production and increased overhead, the Debtors failed to satisfy
certain production and financial covenants under the First Lien Loan and the
Second Lien Loan prior to the Petition Date.

     

    The
Debtors worked diligently to facilitate a global restructuring transaction,
including entering into several amendments and forbearance agreements with the
First Lien Loan Lenders and the Second Lien Loan Lenders.  The Debtors
were not able to obtain an agreement prior to the Petition Date on the terms of
such a restructuring and chose to utilize the bankruptcy process to attempt to
achieve a consensual restructuring or some other appropriate
alternative.  The Plan embodies such a consensual restructuring,
pursuant to an agreement-in-principle the Debtors and the Pre-Petition Secured
Lenders arrived at following the Petition Date.

     

    VII.    
THE CASES

     

    On the
Petition Date, the Debtors filed with the Bankruptcy Court separate, voluntary
petitions for relief under Chapter 11 of the Bankruptcy Code.

     

    Since the
Petition Date, the Debtors have managed their properties and operated their
business as debtors-in-possession pursuant to Bankruptcy Code §§ 1107 and
1108.  As debtors-in-possession, the Debtors are authorized to operate
their business, but they may not engage in transactions outside of the ordinary
course of business without the approval of the Bankruptcy Court, after notice
and the opportunity for a hearing.  No trustee or examiner has been
appointed in these Cases (although, as described below, Longhorn has moved for
the appointment of an examiner to address certain issues related to HPPC and its
guarantees of the First Lien Loans and the Second Lien Loans).

    

    
      
        
           

        

        
          48

          
            

          

        

        
           

        

      

    

     

    A.           The
Debtors’ First Day Motions and Retention Applications.

     

    To
minimize the possible disruption to the Debtors’ operations upon the filing of
these Cases, shortly after the Petition Date, the Debtors filed various motions
seeking the following “first-day” orders, among others:  (a) a motion
for joint administration; (b) a motion for authority to limit notice and to
establish notice procedures; (c) a motion to establish case and hearing
procedures; (d) a motion for (i) waiver of requirement to file matrix or list of
creditors, (ii) approval of form and manner of notifying creditors of
commencement of Chapter 11 cases, and (iii) waiver of the requirements to file
the equity list and provide notice to equity security holders; (e) a motion to
extend time to file schedules and statements; (f) a motion for order (i)
authorizing continued use of existing bank accounts, cash management systems,
and checks and business forms and (ii) granting waiver of bond requirement; (g)
a motion to establish procedures for the (i) settlement of terminated forward
contracts and (ii) determination of whether certain contracts constitute forward
contracts and/or whether such forward contracts have been validly terminated;
(h) a motion for order establishing notification and hearing procedures for
trading in equity securities; (i) a motion for order transferring holding court
for hearings to grand rapids; (j) a motion for order (i) authorizing payment of
pre-petition wages and salaries and to pay and honor pre-petition employee
benefits and related obligations and (ii) scheduling final hearing on related
relief; (k) a motion for authority to pay pre-petition real and personal
property taxes; (l) a motion order authorizing payment of rent, royalties, and
related amounts to lessors and taxing authorities; (m) a motion for authority to
pay pre-petition claims of (i) critical vendors providing services for operated
properties and (ii) operators of other properties; (n) a motion order (i)
establishing deadline and procedures for filing proofs of claim and (ii)
approving form and manner of notice thereof; (o) a motion for order (i)
prohibiting utility companies from altering, refusing, or discontinuing service,
(ii) deeming utilities adequately assured of future performance, and (iii)
establishing procedures for determining adequate assurance of payment; (p) a
motion authority to employ and retain professionals used in the ordinary course
of business; (q) a motion to establish procedures for interim compensation and
reimbursement of expenses of professionals; and (s) a motion for entry of agreed
interim order (i) authorizing use of cash collateral, (ii) granting replacement
liens, adequate protection, and administrative expense priority to lenders, and
(iii) scheduling final hearing.

     

    The
Debtors also filed several applications to retain professionals in these
Cases.  Specifically, on the Petition Date, the Debtors filed
applications to employ and to retain (a) Cahill Gordon & Reindel LLP and Warner Norcross &
Judd LLP, as their general bankruptcy and restructuring co-counsel, (b) Huron
Consulting Services LLC (“Huron”), as their restructuring and financial advisor,
(c) Beachwalk Capital LLC (“BC”), as their advisor in connection with their
restructuring efforts, and (d) Donlin, Recano & Company, Inc., as their
Claims Agent.

     

    On July
15, 2009, a hearing was held to consider the “first-day”
motions.  Following that hearing, the Bankruptcy Court entered
orders:

     

    
      	
               
      

            	
              (a)

            	
              directing
      joint administration of these
Cases;

            

    

     

    
      
        
           

        

        
          49

          
            

          

        

        
           

        

      

    

     

    
      	
               
      

            	
              (b)

            	
              granting
      the Debtors the authority to limit notice and to establish notice
      procedures;

            

    

     

    
      	
               
      

            	
              (c)

            	
              granting
      the Debtors a 30-day extension to file
  schedules;

            

    

     

    
      	
               
      

            	
              (d)

            	
              (i)
      authorizing the Debtors to continue to use existing bank accounts, cash
      management systems, and checks and business forms and (ii) granting a
      waiver of any bond requirement (both on an interim
  basis);

            

    

     

    
      	
               
      

            	
              (e)

            	
              establishing
      notification and hearing procedures for trading in the Debtors’ equity
      securities (on an interim basis);

            

    

     

    
      	
               
      

            	
              (f)

            	
              (i)
      authorizing the Debtors to pay pre-petition wages and salaries and to pay
      and honor pre-petition employee benefits and related obligations on an
      interim basis and (ii) scheduling a final hearing on related
      relief;

            

    

     

    
      	
               
      

            	
              (g)

            	
              authorizing
      the Debtors to pay certain amounts to taxing
  authorities;

            

    

     

    
      	
               
      

            	
              (h)

            	
              authorizing
      the Debtors to pay pre-petition claims of critical vendors providing
      services for operated properties;

            

    

     

    
      	
               
      

            	
              (i)

            	
              granting
      the Debtors (i) a waiver of the requirement to file a matrix or list of
      creditors and (ii) an approval of the form and manner of notifying
      creditors of the commencement of these
Cases;

            

    

     

    
      	
               
      

            	
              (j)

            	
              (i)
      authorizing the Debtors’ use of cash collateral pursuant to Bankruptcy
      Code §§ 361 and 363(c), (ii) granting replacement liens, adequate
      protection, and administrative expense priority to certain pre-petition
      lenders, and (iii) scheduling a final hearing pursuant to Bankruptcy Rule
      4001.  The order authorizing the Debtors’ use of cash collateral
      was also granted on an interim basis pursuant to a budget agreed upon with
      the First Lien Loan Lenders and the Second Lien Loan
      Lenders.  Such order also established a deadline for parties to
      file an adversary proceeding or a contested matter or else be bound by
      certain findings of the Bankruptcy Court contained therein with respect to
      the respective claims and security interests held by the First Lien Loan
      Lenders and the Second Lien Loan
Lenders.

            

    

     

    On August
5, 2009, a hearing was held to consider various other “first-day”
motions.  On August 10, 2009 and August 11, 2009, the Bankruptcy Court
entered orders:

     

    
      	
               
      

            	
              (a)

            	
              (i)
      authorizing the Debtors' use of cash collateral on a final basis (the
      “Final Cash Collateral Order”) and (ii) granting replacement liens,
      adequate protection and administrative expense priority to certain
      pre-petition lenders;

            

    

     

    
      	
               
      

            	
              (b)

            	
              establishing
      case management procedures;

            

    

     

    
      
        
           

        

        
          50

          
            

          

        

        
           

        

      

    

     

    
      	
               
      

            	
              (c)

            	
              authorizing
      the Debtors to pay pre-petition wages and salaries and to pay and honor
      pre-petition employee benefits and related obligations on a final
      basis;

            

    

     

    
      	
               
      

            	
              (d)

            	
              establishing
      notification and hearing procedures for trading in the Debtors’ equity
      securities (on a final basis);

            

    

     

    
      	
               
      

            	
              (e)

            	
              (i)
      authorizing the Debtors’ continued use of their existing bank accounts,
      cash management system, and checks and business forms and (ii) granting a
      temporary waiver of a bond requirement (on a final
  basis);

            

    

     

    
      	
               
      

            	
              (f)

            	
              establishing
      notification and hearing procedures for trading in the Debtors’ equity
      securities;

            

    

     

    
      	
               
      

            	
              (g)

            	
              establishing
      procedures for interim
compensation;

            

    

     

    
      	
               
      

            	
              (h)

            	
              authorizing
      the employment and retention of professionals used in the ordinary course
      of business;

            

    

    

    
      	
               
      

            	
              (i)

            	
              (i)
      prohibiting utility companies from altering, refusing, or discontinuing
      service, (ii) deeming utilities adequately assured of future performance,
      and (iii) establishing procedures for determining adequate assurance of
      payment;

            

    

    

    
      	
               
      

            	
              (j)

            	
              authorizing
      the payment of pre-petition real and personal property
    taxes;

            

    

    

    
      	
               
      

            	
              (k)

            	
              establishing
      procedures for the (i) settlement of terminated forward contracts and (ii)
      determination of whether certain contracts constitute forward contracts
      and/or whether such forward contracts have been validly
      terminated;

            

    

    

    
      	
               
      

            	
              (l)

            	
              authorizing
      the Debtors to employ and to retain Cahill Gordon & Reindel LLP;
  and

            

    

    

    
      	
               
      

            	
              (k)

            	
              transferring
      the holding court for hearings in these Cases to Grand Rapids,
      Michigan.

            

    

    

    By order
dated August 18, 2009, the Bankruptcy Court established September 25, 2009 (the
“Bar Date”), as the deadline for creditors to timely file a Proof of Claim in
these Cases (provided, however, that the bar
date for claims filed by governmental units is January 11, 2010).

     

    On August
27, 2009 the Bankruptcy Court entered orders approving the respective
applications of Huron, BC, and Donlin, Recano & Company, Inc.

     

    B.           The
Formation of the Creditors Committee.

     

    On July
21, 2009, the United States Trustee for Region 9 formed the Creditors Committee,
and appointed the following members to serve thereon:  PMR Services,
Inc.; Jet Subsurface Rod Pumps Corporation; Oil Energy Corporation; and Copper
Ridge Professional Condo Association Five (CRPC5).

    

    
      
        
           

        

        
          51

          
            

          

        

        
           

        

      

    

     

    On August
18, 2009, the Creditors Committee filed an application to retain Brandt, Fisher,
Alward & Roy, P.C. (“Brandt Fisher”), as its counsel.  The
Creditors Committee’s application to retain Brandt Fisher was approved by the
Court on September 8, 2009.

     

    On
September 1, 2009, the Creditors Committee filed an application to employ
Cimarron Oil & Gas, Inc., as their oil and gas industry consultant, nunc pro tunc to August 10,
2009.  The Bankruptcy Court entered an order on September 28, 2009
approving this application.

     

    C.           Schedules
and Statements.

     

    On August
12, 2009, the Debtors filed schedules of their assets and liabilities and
statements of their financial affairs.  On September 14, 2009, the
Debtors filed certain amended schedules and an amended statement of financial
affairs.

     

    D.           The
DIP Facility.

     

    On
September 17, 2009, the Debtors filed a motion seeking the Bankruptcy Court’s
approval of the DIP Facility.  After a hearing held on October 2,
2009, the Bankruptcy Court entered an order, dated October 5, 2009, granting
such approval.

     

    E.           The
Atlas Stipulation and Order.

     

    As noted
above, the Debtors are parties to the Farmout Agreement with Atlas, which
provides that Atlas, as farmee, shall drill certain wells per year at the Wabash
Acreage, and would pay the Debtors a fee for each well drilled as well as
royalties for gas extracted therefrom.  The Debtors, Atlas, and the
Lenders executed a Stipulation and Order (the “Atlas Stipulation”), dated August
19, 2009, which among other things, modified Atlas’s obligations to drill new
sites by creating a new drilling schedule for the period ending in April of
2010.  Atlas would be required to pay the Debtors $50,000 for each new
site (which is due within the same calendar month as the drilling at that site
begins), and the Debtors could terminate the Farmout Agreement if Atlas failed
to meet its obligations under the revised schedule on a cumulative
basis.  The Debtors would also assume the Farmout Agreement and
certain related agreements pursuant to the Atlas Stipulation.  All of
the Debtors’ other rights under the Farmout Agreement (including the right to
receive gas royalties and to partially participate in the ownership of certain
wells that Atlas drilled there) were preserved under the Atlas
Stipulation.  In addition, the Atlas Stipulation also clarified which
of the relevant assets belong to Atlas, and which are part of the Debtors’
estates.

     

    The Court
approved the Atlas Stipulation on September 8, 2009.

    

    
      
        
           

        

        
          52

          
            

          

        

        
           

        

      

    

    

    F.           Certain
Other Motions Filed by the Debtors.

     

    On
September 14, 2009, the Debtors filed a motion for an order, pursuant to
Bankruptcy Code § 105, 28 U.S.C. § 1452, and Bankruptcy Rules 9006(b) and 9027,
to extend by 90 days the deadline by which they may remove actions (or up to and
including January 8, 2010).  Following a hearing held on October 6,
2009, the Bankruptcy Court approved this motion.

     

    G.           Longhorn’s
Motion to Appoint an Examiner.

     

    On
September 25, 2009, Longhorn (which, as noted above, owns approximately 2% of
the equity interests in HPPC), filed a motion to appoint an examiner in these
Cases.  Specifically, Longhorn asserts that an examiner should be
appointed to investigate Aurora's actions as they relate to HPPC’s becoming a
guarantor of the First Lien Loans and the Second Lien Loans, or otherwise as
they relate to HPPC.

     

    A hearing
on this motion is currently scheduled for October 29, 2009.  The
Debtors anticipate that they will object to this motion.

     

    VIII.    
THE PLAN OF REORGANIZATION

     

    The
following discussion of the Plan (which reflects and incorporates an
agreement-in-principle agreed to by and between the Debtors and the Holders of
First Lien Loan Claims and Second Lien Loan Claims) is qualified in its entirety
by reference to the provisions of the Plan, a copy of which is attached hereto
as Exhibit A.  All capitalized terms used in this Section VIII and not
otherwise defined herein shall have the meanings ascribed to them in the
Plan.

     

    A.           General
— Classification of Claims.

     

    In
accordance with Bankruptcy Code § 1123, the Plan, among other things, designates
classes of claims (“Claims”) and classes of interests (“Interests”), specifies
which classes are impaired and which are not impaired under the Plan, and
specifies the treatment of each class that is impaired under the
Plan.  The provisions of the Bankruptcy Code require that each class
contain Claims and Interests of respective creditors and interest holders that
are substantially similar to the other Claims or Interests in such
class.  The Plan designates eight classes of Claims and two classes of
Interests.  This classification takes into account the differing
nature and priority of the various Claims and Interests under the Bankruptcy
Code and other applicable laws, as well as the business necessities of the
Debtors.

     

    While the
Debtors believe that they have classified all Claims and Interests in compliance
with the provisions of the Bankruptcy Code (including, but not limited to, in
compliance with Bankruptcy Code § 1122), it is possible that a
party-in-interest will challenge such classification and that the Bankruptcy
Court will determine that a different classification is required for the Plan to
be confirmed.  In such event, the Debtors reserve the right to modify
the Plan to provide for whatever reasonable classification might be required by
the Bankruptcy Court for confirmation of the Plan.

    

    
      
        
           

        

        
          53

          
            

          

        

        
           

        

      

    

    

    The Plan
provides for the treatment of “Allowed Claims.”  An Allowed Claim is,
except as otherwise provided in the Plan, (a) any Claim against a Debtor that
has been listed by such Debtor in the Schedules filed by such Debtor as
liquidated in an amount greater than zero dollars and not disputed or contingent
and for which no contrary Proof of Claim has been filed and as to which no
timely objection has been interposed; (b) any Claim as to which a Proof of Claim
has been timely filed and (i) no objection to the allowance thereof has been
timely interposed on or before the Claims Objection Bar Date, and (ii) such
Claim has not (as applicable) been withdrawn, paid in full (pursuant to a prior
order of the Bankruptcy Court or otherwise), or otherwise deemed satisfied in
full; (c) any Claim as to which any objection thereto has been determined by a
Final Order in favor of the respective Claim, or any such objection has been
settled, waived through payment, or withdrawn; (d) any Claim that has otherwise
been allowed by a Final Order (including, without limitation, the DIP Facility
Order, with respect to DIP Facility Claims); (e) any Claim as to which, upon the
lifting of the automatic stay pursuant to Bankruptcy Code § 362, the liability
of a Debtor, allowance, and the amount thereof are determined by a Final Order
of a court of competent jurisdiction other than the Bankruptcy Court; (f) with
respect to any Administrative Claim for goods or non-professional services
provided to the Debtors during these Cases in the ordinary course of their
business, (i) no objection to the allowance thereof has been timely interposed
on or before the Claims Objection Bar Date and (ii) such Administrative Claim
has not been withdrawn, paid in full (pursuant to a prior order of the
Bankruptcy Court or otherwise in the ordinary course of their business), or
otherwise deemed satisfied in full in the ordinary course of their business; or
(g) any Claim that is expressly deemed an Allowed Claim under the
Plan.  Unless otherwise ordered by the Bankruptcy Court prior to
Confirmation, or as specifically provided to the contrary in the Plan with
respect to any particular Claim, an “Allowed” Claim will not, for any purpose
under the Plan, include (i) any interest on such Claim to the extent accruing or
maturing on or after the Petition Date, (ii) punitive or exemplary damages, or
(iii) any fine, penalty, or forfeiture.  If an objection to a Claim is
made, the validity and amount of the Claim will be resolved as described under
the section below entitled “Disputed Claims.”

     

    B.           Summary
of Distributions Under the Plan.

     

    All
estimates of Claim amounts are preliminary in nature and are based on current
limited information and certain timing and other assumptions that may prove to
be incorrect, and therefore, the actual amounts of Allowed Claims may vary
significantly from such estimates.

     

    
      	
               
      

            	
              1.

            	
              Administrative
      Claims.

            

    

     

    An
“Administrative Claim” is a claim for costs and expenses of administration of
these Cases with priority under Bankruptcy Code § 507(a)(2), costs and expenses
allowed under Bankruptcy Code § 503(b), the actual and necessary costs and
expenses of preserving the respective Estates of the Debtors and operating the
respective business of the Debtors, any indebtedness or obligations incurred or
assumed by either of the Debtors pursuant to Bankruptcy Code § 364 or otherwise,
professional fees and expenses of the Debtors and the Creditors Committee, in
each case to the extent allowed by an order of the Bankruptcy Court under
Bankruptcy Code § 330(a) or § 331, and any fees or charges assessed against the
respective Estates under 28 U.S.C. § 1930; provided, however, that the
Holder of an Administrative Claim (except for an Administrative Claim based upon
Professional Fees, the allowance and timing for filing of applications for
Professional Fees being governed by Plan Section 13.7) arising prior to the
Effective Date (other than for goods or non-professional services provided to
the Debtors during these Cases in the ordinary course of their business) is
required under the Plan to file a request for payment on or before 30 days after
the Effective Date for such Administrative Claim to be eligible to be considered
an Allowed Claim.

     

    
      
        
        

      

      
        54

        
          

        

      

      
        
        

      

    

     

    Pursuant
to the Plan, subject to the provisions of Bankruptcy Code §§ 330(a), 331,
and 503(b), each Holder of an Allowed Administrative Claim other than a Holder
of an Allowed DIP Facility Claim (which Claims will be treated and satisfied in
the manner set forth in Plan Section 3.2) will receive, in full satisfaction,
settlement, release, and discharge of, and in exchange for, such Allowed Claim,
Cash equal to the amount of such Allowed Claim on the later of (i) the Initial
Distribution Date and (ii) the date that is 10 days after the Allowance Date,
except to the extent that such Holder has agreed to a less favorable treatment
of such Allowed Claim; provided, however, that Allowed
Administrative Claims representing obligations incurred in the ordinary course
of their business and assumed by the Debtors will be paid or performed in
accordance with the terms and conditions of the particular transactions and any
agreements related thereto.

     

    Specifically,
no Professional Fees will be paid with respect to any Claim or Interest except
as specified in the Plan or as allowed by an order of the Bankruptcy
Court.  All final applications for Professional Fees for services
rendered in connection with these Cases prior to and including the Confirmation
Date must be filed with the Bankruptcy Court not later than 90 days after the
Effective Date.; provided, however, that the
Debtors or the Reorganized Debtors (as applicable) will be entitled to and will
pay the reasonable fees and expenses of the professional(s) that were incurred,
on, or as soon as practicable after the Effective Date, without application by
or on behalf of any such parties to the Bankruptcy Court and without notice and
a hearing.

     

    As of the
date hereof, the Debtors estimate that, as of the Effective Date, the total
amount of Allowed Administrative Claims will be approximately [$1.23
million].  The Debtors further estimate that approximately [$730,000]
of the total amount of Allowed Administrative Claims will consist of unpaid
Professional Fees and the remaining approximately [$500,000] will constitute
unpaid ordinary course accounts payable.

     

    
      	
               
      

            	
              2.

            	
              The DIP Facility
      Claims.

            

    

     

    The DIP
Facility Claims consist of all Claims of the DIP Facility Administrative Agent
and the DIP Facility Lenders against the Debtors represented by, related to,
arising under, or in connection with the DIP Facility and/or the DIP Facility
Guarantee, for all outstanding obligations thereunder incurred through and
including the Effective Date, after taking into account the sum of all payments
made to the DIP Facility Lenders prior to the Effective Date on account of such
Claims (if any).

     

    The DIP
Facility Claims will be Allowed Claims under the Plan in the aggregate amount
equal to all obligations under (i) the DIP Facility (as against Aurora) and/or
(ii) the DIP Facility Guarantee (as against the DIP Facility Guarantor), as
applicable, outstanding as of the Effective Date, as agreed to by the DIP
Facility Lenders and the Debtors, or in the event of a dispute regarding such
amount, as such amount has been determined by a Final Order of the Bankruptcy
Court.  On the Effective Date (or as soon thereafter as is
practicable), (a) each Holder of an Allowed DIP Facility Claim will receive, in
full satisfaction, settlement, release, and discharge of, and in exchange for,
such Allowed Claim, Cash in an amount equal to such Holder’s Pro Rata share of
the aggregate amount of the outstanding Allowed DIP Facility Claims, which
payments will collectively be in the amount equal to the aggregate outstanding
amount of the Allowed DIP Facility Claims, and (b) either (i) the DIP Facility
Lenders will receive cancellation without draw of all outstanding letters
of credit issued under the DIP Facility or (ii) such outstanding letters of
credit will be replaced with, to the extent practicable, or supported by, new
letters of credit to be issued under the Exit Credit Facility.

    
      
         

      

      
        55

        
          

        

      

      
         

      

    

    All
distributions under the Plan on account of the Allowed DIP Facility Claims will
be distributed by the Debtors to the administrative or similar agent under the
DIP Facility, for further distribution to the Holders of Allowed DIP Facility
Claims as of the Distribution Record Date, pursuant to the terms and subject to
the conditions of the DIP Facility and the Plan.

     

    As of the
date hereof, the Debtors believe that, as of the Effective Date, the total
amount of the Allowed DIP Facility Claims will be approximately [$3
million].

     

    
      	
               
      

            	
              3.

            	
              Tax
    Claims.

            

    

     

    A “Tax
Claim” is a Claim entitled to priority under Bankruptcy Code §
507(a)(8).  Such Claims include claims for certain taxes measured by
income or gross receipts, property taxes, withholding taxes, employment taxes,
excise taxes, and customs duties and any penalty related to such tax claim that
is in compensation for actual pecuniary loss.

     

    Pursuant
to the Plan, each Holder of an Allowed Tax Claim will receive, in full
satisfaction, settlement, release, and discharge of, and in exchange for, such
Allowed Claim, at the election of the applicable Debtor, either (i) Cash equal
to the amount of such Allowed Claim on the later of (a) the Initial Distribution
Date and (b) the date that is 30 days after the Allowance Date, except to the
extent such Holder has agreed to a less favorable treatment of such Allowed
Claim, or (ii) in accordance with Bankruptcy Code § 1129(a)(9)(C), deferred Cash
payments (a) of a value, as of the Effective Date, equal to the amount of
such Allowed Tax Claim, (b) over a period not exceeding five years after the
Petition Date, and (c) in a manner not less favorable than the treatment of than
the most favored nonpriority unsecured Claim provided for by the Plan, except to
the extent such Holder has agreed to a less favorable treatment of such Allowed
Claim.

     

    As noted
above, on August 11, 2009, the Court entered an order authorizing the Debtors to
pay pre-petition real and personal property taxes.  As a result, as of
the date hereof, the Debtors believe that, as of the Effective Date, the total
amount of the Allowed Tax Claims will be between $0 and approximately
$1,000.

     

    
      	
               
      

            	
              4.

            	
              Unimpaired
      Classes.

            

    

     

    
      	
               
      

            	
              (a)

            	
              Class
      1 - Priority Claims.

            

    

     

    Class 1
consists of all Priority Claims, which are claims that are entitled to priority
pursuant to Bankruptcy Code § 507(a) or (b) and that are not Administrative
Claims or Tax Claims.  Such claims would include, but would not be
limited to, unsecured claims earned within 180 days before the Petition Date (up
to $10,950 for each person) for wages, salaries, or commissions, including
severance, vacation, and sick leave pay earned, and unsecured claims for
contributions to an employee benefit plan arising from services rendered within
180 days before the Petition Date, for each such plan up to a specified
limit.

    
      
         

      

      
        56

        
          

        

      

      
         

      

    

    Pursuant
to the Plan, if not otherwise paid in full pursuant to a Final Order of the
Bankruptcy Court prior to the Confirmation Date, and except to the extent such
Holder has agreed to a less favorable treatment of such Allowed Claim, each
Holder of an Allowed Class 1 Claim will receive, in full satisfaction,
settlement, release, and discharge of, and in exchange for, such Allowed Claim,
Cash equal to the amount of such Allowed Claim on the latest of (i) the Initial
Distribution Date, (ii) the date that is 30 days after the Allowance Date of
such Claim, and (iii) the date when such Allowed Claim becomes due and payable
according to its terms and conditions.  Accordingly, the Allowed
Claims in Class 1 are unimpaired, such that the Holders of Allowed Class 1
Claims are conclusively presumed pursuant to Bankruptcy Code § 1126(f) to
have accepted the Plan.

     

    As of the
Bar Date, 21 claims were timely filed asserting, in the aggregate, approximately
$29,250 as Priority Claims.  The Debtors anticipate that they will
object to at least certain of such claims, such that, as of the Effective Date,
the total amount of Allowed Priority Claims may ultimately be lower than such
sum.

     

    
      	
               
      

            	
              (b)

            	
              Class
      2C (Other Secured Claims Against Aurora or
  HPPC).

            

    

     

    Class 2C
consists of all Secured Claims against Aurora and/or HPPC that are not
otherwise classified in Article II of the Plan.  The Plan defines
“Secured Claims” as “[a]ll Claims that are secured by a properly perfected and
not otherwise avoidable Lien on property in which an Estate has an interest or
that is subject to setoff under Bankruptcy Code § 553, to the extent of the
value of the Claim Holder’s interest in the applicable Estate’s interest in such
property or to the extent of the amount subject to setoff, as applicable, as
determined pursuant to Bankruptcy Code § 506(a) and, if applicable, § 1129(b);
provided, however, that if the
Holder of a Secured Claim is entitled to and does timely elect application of
Bankruptcy Code § 1111(b)(2), then such Holder’s Claim shall be a Secured Claim
to the extent such Claim is Allowed.”

     

    Class 2C
Claims do not include any NW Bank Secured Claims or any Claims under,
respectively, the First Lien Loan, the First Lien Loan Guarantees, the Second
Lien Loan, the Second Lien Loan Guarantees, the DIP Facility, or the DIP
Facility Guarantee, but do include any secured capital leases of Aurora and/or
HPPC.

     

    Class 2C
Claims will be treated in the manner set forth in Section 4.3 of the
Plan.  Under the Plan, in full satisfaction, settlement, release, and
discharge of, and in exchange for, each Allowed Class 2C Claim, and except to
the extent such Holder has agreed to a less favorable treatment of such Allowed
Claim, at the election of the applicable Debtor, such Debtor will
either:  (a) pay the amount of such Allowed Class 2C Claim against it
in full, in Cash, on the later of the Effective Date or the Allowance Date of
such Claim; (b) return the underlying collateral to the Holder of such Allowed
Class 2C Claim; (c) Reinstate such Allowed Class 2C Claim in accordance with the
provisions of Bankruptcy Code § 1124(2); (d) pay such Allowed Class 2C Claim in
full in the ordinary course; or (e) treat such Allowed Class 2C Claim in a
manner otherwise agreed to by the Holder thereof. Accordingly, the Allowed
Claims in Class 2C are all unimpaired, such that the Holders of Allowed Class 2C
Claims are conclusively presumed pursuant to Bankruptcy Code § 1126(f) to
have accepted the Plan.

    
      
         

      

      
        57

        
          

        

      

      
         

      

    

    The
Debtors note that Fifth Third Bank has filed a total of approximately $3.5
million in Claims arising from certain equipment leases.  The Debtors
anticipate that they will either object to all or a portion of such Claims, seek
to reject the applicable underlying agreements, and/or attempt to negotiate a
new arrangement with Fifth Third Bank with respect to a portion of the equipment
that is the subject of such leases; indeed, the Debtors and Fifth
Third  Bank have had preliminary discussions with respect to such an
arrangement.  Accordingly, the Debtors currently believe that the
amount of Claims in Class 2C that will ultimately be Allowed Claims will be less
than $3.5 million, but cannot at this time set forth a more specific estimate
thereof.

     

    As noted
above, Class 2C Claims do not include any Claims of NW Bank, which, as discussed
further herein, will be treated as Class 2D Claims with respect to the secured
portion thereof, and in Class 3A with respect to any unsecured deficiency
portion thereof.

     

    
      	
               
      

            	
              (c)

            	
              Class
      2D — NW Bank Secured Claims.

            

    

     

    Class 2D
consists of the NW Bank Secured Claims, which are (1) the NW Bank LCs Claim,
which is defined in the Plan as “[a]ll Claims of NW Bank against the Debtors
represented by, related to, arising under, or in connection with the NW Bank
LCs, for any and all outstanding obligations thereunder incurred through and
including the Effective Date, after taking into account the sum of all payments
made to NW Bank prior to the Effective Date on account of such Claims,” and (2)
the NW Bank Note Secured Claim, which is defined in the Plan as “[a]ll Claims of
NW Bank against Aurora represented by, related to, arising under, or in
connection with the NW Bank Note, for any and all outstanding obligations
thereunder incurred through and including the Effective Date, after taking into
account the sum of all payments made to NW Bank by Aurora prior to the Effective
Date on account of such Claims, but only to the extent of the value of NW Bank’s
interest in Aurora’s interests in the NW Bank Note Collateral, as determined
pursuant to Bankruptcy Code § 506(a) and, if applicable, §
1129(b).”  The NW Bank Note Deficiency Claim is not a Class 2D Claim
under the Plan, but, as discussed further below, is a Class 3A
Claim.

     

    Class 2D
Claims will be treated in the following manner under the Plan:

     

    The NW
Bank Note Secured Claim will be deemed an Allowed Claim in an amount equal to
the value of the NW Bank Note Collateral as of the Effective Date, as determined
pursuant to Bankruptcy Code § 506(a).  In full satisfaction,
settlement, release, and discharge of, and in exchange for, the NW Bank Note
Secured Claim, on the Effective Date, or as soon thereafter as is practicable,
Aurora will transfer ownership of the NW Bank Note Collateral to the Holder of
the NW Bank Secured Claim.  On the Effective Date, the NW Bank Note
and all outstanding notes and Liens issued in connection with the NW Bank Note
will be cancelled and will be deemed terminated and of no force and
effect.  The sum total of the value of the distributions to be made to
the Holder of the Allowed NW Bank Note Secured Claim, as of the Effective Date,
will not exceed the amount of Allowed NW Bank Note Secured
Claims.

    
      
         

      

      
        58

        
          

        

      

      
         

      

    

    The NW
Bank LCs Claim will be deemed an Allowed Claim in an amount equal to the value
of the NW Bank LCs Collateral as of the Effective Date, as determined pursuant
to Bankruptcy Code § 506(a).  To the extent the Debtors or any other
third party with a right to do so has not fully drawn down upon the NW Bank LCs
as of the Effective Date, the Debtors will, in full satisfaction, settlement,
release, and discharge of, and in exchange for the Allowed NW Bank LCs Claim,
release from the NW Bank LCs Collateral to NW Bank the amount, if any, equal to
what has been so drawn down prior to the Effective Date, and at the election of
the Debtors, either (1) the NW Bank LCs will remain in full force and effect on
and after the Effective Date for the full remaining undrawn amount thereof, and
NW Bank will retain, as collateral therefor, the remaining NW Bank LCs
Collateral, or (2) the NW Bank LCs will be terminated and NW Bank will receive
cancellation without draw of the remaining undrawn NW Bank LCs, in which case NW
Bank will have no further rights, claims, or interests in, any of the remaining
NW Bank LCs Collateral, which will in turn be released to the Debtors free and
clear of any Liens, claims, or interests of NW Bank.  To the extent
the Debtors or any other third party with a right to do so has fully drawn down
upon the NW Bank LCs as of the Effective Date, in full satisfaction, settlement,
release, and discharge of, and in exchange for the Allowed NW Bank LCs Claim,
the Debtors will release from the NW Bank LCs Collateral to NW Bank an amount
equal to what has been so drawn down prior to the Effective Date, and the NW
Bank LCs will be terminated, NW Bank will have no further rights, claims, or
interests in, any of the remaining NW Bank LCs Collateral or other Claims
against the Debtors or the Reorganized Debtors with respect thereto, and all
outstanding notes and Liens issued in connection with the NW Bank LCs will be
cancelled and will be deemed terminated and of no force and effect.

     

    The sum
total of the value of the distributions to be made to the Holder of the Allowed
NW Bank LCs Claim, as of the Effective Date, will not exceed the amount of
Allowed NW Bank LCs Claims, as determined pursuant to Bankruptcy Code §
506(a).

     

    Class 2D
is unimpaired, and the Holder of the Allowed Class 2D Claims is deemed to have
accepted the Plan with respect to such Claims (although it would be entitled to
vote as a member of Class 3A on account of any unsecured deficiency Claims it
may have, as determined pursuant to Bankruptcy Code § 506(a)).  In
that regard, the Debtors estimate that the fair market value of the NW Bank Note
Collateral (i.e., their corporate headquarters located in Traverse City,
Michigan) is approximately [$2.0 million to $2.1 million].

     

    
      	
               
      

            	
              (d)

            	
              Special
      Provision Regarding Unimpaired
Claims.

            

    

     

    Except as
may otherwise be provided in the Plan, the Confirmation Order, any other order
of the Bankruptcy Court, or any Plan Document, nothing will affect the Debtors’
or the Reorganized Debtors’ (as applicable) rights and defenses, both legal and
equitable, with respect to any Claim that is not impaired under the Plan,
including, but not limited to, all rights with respect to legal and equitable
defenses to, and/or setoffs or recoupments against, such Claim.

     

    
      	
               
      

            	
              5.

            	
              Impaired
      Classes.

            

    

     

    
      	
               
      

            	
              (a)

            	
              Class
      2A – First Lien Loan Claims.

            

    

     

    Class 2A
consists of all First Lien Loan Claims, which are all Claims of the First Lien
Loan Administrative Agent and the First Lien Loan Lenders against the Debtors
represented by, related to, arising under, or in connection with the First Lien
Loan and/or the First Lien Loan Guarantees, for any and all outstanding
obligations thereunder incurred through and including the Effective Date, after
taking into account the sum of all payments made to the First Lien Loan Lenders
prior to the Effective Date on account of such Claims.  Accordingly,
such claims are against both of the Debtors — Aurora in its capacity as the
borrower under the First Lien Loan, and HPPC in its capacity as a First Lien
Loan Guarantor.

    
      
         

      

      
        59

        
          

        

      

      
         

      

    

    The First
Lien Loan Claims will be deemed Allowed Claims under the Plan in the aggregate
amount of accrued and unpaid principal, interest, fees, expenses, and other
obligations under the First Lien Loan up to the Effective Date (subject to
Bankruptcy Code § 506(b)).  Class 2A Claims will be treated in the
manner set forth in Plan Section 5.2, which provides that on the Effective Date,
or as soon thereafter as is practicable, each Holder of an Allowed Class 2A
Claim as of the Distribution Record Date, or an affiliate of such Holder
designated by such Holder prior to the Effective Date, will receive (i) as
reinstatement and modification of a portion of such Allowed Claim against each
of the Debtors, such Holder’s Pro Rata share of the New Secured Notes, and (ii)
in full satisfaction, settlement, release, and discharge of, and in exchange,
for the remaining portion of such Allowed Claim against each of the Debtors,
such Holder’s Pro Rata share of [32] million shares of the New Aurora Preferred
Stock.  Such shares of New Aurora Preferred Stock issued on such date
will, in the aggregate, represent, as of such date, 100% of the outstanding
shares of New Aurora Preferred Stock, and will not be subject to any dilution or
further issuance of any additional shares of New Aurora Preferred Stock except
as expressly provided under Plan Section 6.15(f).  For purposes of
this paragraph and Section 5.2(b) of the Plan, “affiliate” means, with respect
to a Holder, a subsidiary of a Holder or any other entity that is directly or
indirectly owned by the same parent entity that directly or indirectly owns the
Holder.

     

    The
Allowed First Lien Loan Claims will be considered Allowed Claims against both
(a) Aurora (in its capacity as the borrower under the First Lien Loan) and (b)
HPPC, in its capacity as a First Lien Loan Guarantor.  The sum total
of the value of the distributions to be made to the Holders of Allowed First
Lien Loan Claims, as of the Effective Date, will not exceed the aggregate amount
of Allowed First Lien Loan Claims.

     

    Pursuant
to Section 4.01 of the First Lien Loan, and as set forth further in Plan
Sections 6.6(d), 6.13, 6.15, and 6.20, the total distributions of the
New Secured Notes and the [32] million shares of New Aurora Preferred Stock to
be provided for under Plan Section 5.2 on account of Allowed First Lien Loan
Claims, will be made by the Reorganized Debtors on the Effective Date to
the First Lien Loan Administrative Agent for subsequent distribution on a Pro
Rata basis to the Holders of Allowed First Lien Loan Claims (or such Holder’s
affiliate, as provided for above) as of the Distribution Record
Date.

     

    On the
Effective Date, or as soon thereafter as practicable, upon full satisfaction of
the requirements set forth in Plan Section 5.2(b), (i) $20 million of the
Allowed Class 2A Claims will be deemed reinstated and modified as a funded debt
tranche in the form of the Tranche A Notes under the Exit Credit Facility, (ii)
another $20 million of the Allowed Class 2A Claims will be deemed reinstated and
modified as another funded debt tranche in the form of the Tranche B Notes under
the Exit Credit Facility, and (iii) the remaining portion of the Class 2A Claims
will be exchanged with Reorganized Aurora for the New Aurora Preferred Stock and
subsequently be cancelled by Reorganized Aurora.  A First Lien Loan
Lender will not be entitled to any distribution under the Plan on account of its
First Lien Loan Claim unless and until such First Lien Loan Lender has first
surrendered or caused to be surrendered all notes, if any, issued to it under or
in connection with the First Lien Loan and/or the First Lien Loan Guarantees in
the manner set forth in Plan Section 6.6(b), or, in the event that such original
notes have been lost, destroyed, stolen, or mutilated, has first executed and
delivered an affidavit of loss and indemnity with respect thereto in a form
customarily utilized for such purposes that is reasonably satisfactory to the
Debtors or the Reorganized Debtors, and, in the event the Debtors so request,
has first furnished a bond in form and substance (including, without limitation,
amount) reasonably satisfactory to the Debtors.

    
      
         

      

      
        60

        
          

        

      

      
         

      

    

    Class 2A
is impaired, and the Holders of Allowed Class 2A Claims are entitled to vote to
accept or to reject the Plan.  As of the date hereof, the Debtors
estimate that, as of the Effective Date, the total amount of Allowed First Lien
Loan Claims will be approximately $73,841,382.22.

     

    
      	
               
      

            	
              (b)

            	
              Class
      2B – Second Lien Loan Claims.

            

    

     

    Class 2B
consists of all Second Lien Loan Claims, which are all Claims of the Second Lien
Loan Administrative Agent and the Second Lien Loan Lenders against the Debtors
represented by, related to, arising under, or in connection with the Second Lien
Loan and/or the Second Lien Loan Guarantees, for any and all outstanding
obligations thereunder incurred through and including the Effective Date, after
taking into account the sum of all payments made to the Second Lien Loan Lenders
prior to the Effective Date on account of such Claims.  Accordingly,
such claims are against both of the Debtors — Aurora in its capacity as the
borrower under the Second Lien Loan, and HPPC in its capacity as a Second Lien
Loan Guarantor.

     

    The
Second Lien Loan Claims will be deemed Allowed Claims under the Plan in the
aggregate amount of accrued and unpaid principal, interest, fees, expenses, and
other obligations under the Second Lien Loan up to the Effective Date (subject
to Bankruptcy Code § 506(b)).  Class 2B Claims will be treated in the
manner set forth in Plan Section 5.3, which provides that on the Effective Date,
or as soon thereafter as is practicable, each Holder of an Allowed Class 2B
Claim as of the Distribution Record Date, or an affiliate of such Holder
designated by such Holder prior to the Effective Date, will receive in full
satisfaction, settlement, release, and discharge of, and in exchange for such
Allowed Claim against each of the Debtors, such Holder’s Pro Rata share of [56]
million shares of New Aurora Class A Common Stock.  Such shares of New
Aurora Class A Common Stock issued on such date will, in the aggregate,
represent, as of the Effective Date, 100% of the outstanding shares of New
Aurora Class A Common Stock, subject to dilution on a pari passu basis with all
other Holders of shares of New Aurora Class A Common Stock upon the issuance of
shares of New Aurora Class A Common Stock upon the exercise of the New
Warrants.  For purposes of this paragraph and Section 5.3(b) of the
Plan, “affiliate” means, with respect to a Holder, a subsidiary of a Holder or
any other entity that is directly or indirectly owned by the same parent entity
that directly or indirectly owns the Holder.

     

    The
Allowed Second Lien Loan Claims will be considered Allowed Claims against (a)
Aurora (in its capacity as the borrower under the Second Lien Loan) and (b)
HPPC, in its capacity as a Second Lien Loan Guarantor, but the Holders of such
Claims will only receive a single distribution thereon under the Plan, which
will be in the amount and manner set forth in Plan Section
5.3(b).  The sum total of the value of the distributions to be made to
the Holders of Allowed Second Lien Loan Claims, as of the Effective Date, will
not exceed the aggregate amount of Allowed Second Lien Loan
Claims.

    
      
         

      

      
        61

        
          

        

      

      
         

      

    

    Pursuant
to Section 4.01 of the Second Lien Loan, and as set forth further in Plan
Sections 6.6(d) and 6.14, the total distributions of the [56] million
shares of New Aurora Class A Common Stock to be provided for under Plan Section
5.3 on account of Allowed Second Lien Loan Claims will be made by the
Reorganized Debtors on the Effective Date to the Second Lien Loan Administrative
Agent for subsequent distribution on a Pro Rata basis to the Holders of Allowed
Second Lien Loan Claims (or such Holder’s affiliate, as provided for above) as
of the Distribution Record Date.

     

    Upon full
satisfaction of the requirements set forth in Plan Section 5.3(b), all Class 2B
Claims and all outstanding notes and Liens issued in connection with the Second
Lien Loan and the Second Lien Loan Guarantees (if any) will be cancelled and
will be deemed terminated and of no force and effect.  A Second Lien
Loan Lender will not be entitled to any distribution under the Plan on account
of its Second Lien Loan Claim unless and until such Second Lien Loan Lender has
first surrendered or caused to be surrendered all notes, if any, issued to it
under or in connection with the Second Lien Loan and/or the Second Lien Loan
Guarantees in the manner set forth in Plan Section 6.6(b), or, in the event that
such original notes have been lost, destroyed, stolen, or mutilated, has first
executed and delivered an affidavit of loss and indemnity with respect thereto
in a form customarily utilized for such purposes that is reasonably satisfactory
to the Debtors or the Reorganized Debtors, and, in the event the Debtors so
request, has first furnished a bond in form and substance (including, without
limitation, amount) reasonably satisfactory to the Debtors.

     

    Class 2B
is impaired, and the Holders of Allowed Class 2B Claims are entitled to vote to
accept or to reject the Plan.  As of the date hereof, the Debtors
estimate that, as of the Effective Date, the total amount of Allowed Second Lien
Loan Claims will be approximately $56,087,440.27.

     

    
      	
               
      

            	
              (c)

            	
              Class
      3A — General Unsecured Claims Against
Aurora.

            

    

     

    Class 3A
consists of all Allowed General Unsecured Claims against Aurora that are not
otherwise classified pursuant to Article II of the Plan.  The Plan
defines “General Unsecured Claims” as “[u]nless otherwise specified in this
Plan, all Claims (including, but not limited to, (v) the NW Bank Note Deficiency
Claim; (w) all Claims of Employees other than Employee Termination Claims; (x)
all Claims of Utility Companies; (y) all Rejection Claims; and (z) all Vendor
Claims (including all Reclamation Claims)) against one or both of the Debtors,
provided, however, that, in
each case, such Claims (a) are not (i) Secured Claims (as provided for, and
determined in accordance with, Bankruptcy Code § 506(a)) (including any and all
DIP Facility Claims, First Lien Loan Claims, Second Lien Loan Claims, Class 2C
Claims, or NW Bank Secured Claims), (ii) Administrative Claims, (iii) Priority
Claims, (iv) Tax Claims, (v) Intercompany Claims, or (vi) Employee Termination
Claims; and (b) are not otherwise entitled to priority under the Bankruptcy Code
or any Final Order of the Bankruptcy Court.”  Thus, General Unsecured
Claims consist of (including, but not limited to) (i) the NW Bank Note
Deficiency Claim; (ii) all Claims of Employees other than Employee Termination
Claims; (iii) all Claims of Utility Companies; (iv) all Rejection Claims; and
(v) all Vendor Claims (including all Reclamation Claims)) against one or both of
the Debtors.

    
      
         

      

      
        62

        
          

        

      

      
         

      

    

    If not
otherwise paid in full pursuant to a Final Order of the Bankruptcy Court prior
to the Confirmation Date (such as orders approving the payment of certain
critical Vendor Claims, rent, royalties, and related amounts to lessors, and the
pre-petition claims of well operators), and except to the extent such Holder has
agreed to a less favorable treatment of such Allowed Claim, each Holder of an
Allowed Class 3A Claim will receive, in full satisfaction, settlement, release,
and discharge of, and in exchange for, such Allowed Claim, such Holder’s Pro
Rata Share of $150,000 on the latest of (i) the Initial Distribution Date, (ii)
the date that is 30 days after the Allowance Date of such Claim, and (iii) the
date when such Allowed Claim becomes due and payable according to its terms and
conditions.  On the Effective Date, all Class 3A Claims will be
cancelled and be deemed terminated and of no force and effect.

     

    As of the
date hereof, the Debtors estimate that, as of the Effective Date, there will be
a total of between $[1.7 million and $2.4 million] in Allowed Class 3A Claims
that will not otherwise be paid in full pursuant to a Final Order of the
Bankruptcy Court, including the NW Bank Deficiency Claim in the estimated amount
of [$500,000].  The NW Bank Note Deficiency Claim is defined in the
Plan as “[a]ll Claims of NW Bank against Aurora for the difference, if any,
between (i) the aggregate amount owed by Aurora to NW for any and all
outstanding obligations under the NW Bank Note incurred through and including
the Effective Date, after taking into account the sum of all payments made by
Aurora to NW Bank prior to the Effective Date on account of the NW Bank Note,
and (ii) the amount of the NW Bank Note Secured Claim.”

     

    Employee
Termination Claims will not constitute Class 3A Claims, but will instead be
treated in the manner set forth in Section 6.29 of the Plan, as described
further herein.  Specifically, in lieu of, and in full satisfaction,
settlement, release, and discharge of, and in exchange for, any and all Employee
Termination Claims, upon the termination of their employment, members of the
Debtors’ management and any other employees of either of the Debtors will be
entitled to receive severance payments equal to two weeks’ salary per year of
such party’s employment, with a minimum payment equal to six weeks’ salary, in
addition to the releases provided for in Article IX of the Plan.

     

    
      	
               
      

            	
              (d)

            	
              Class
      3B  — General Unsecured Claims Against
  HPPC.

            

    

     

    Class 3B
consists of all Allowed General Unsecured Claims against HPPC that are not
otherwise classified pursuant to Article II of the Plan. 

     

    If not
otherwise paid in full pursuant to a Final Order of the Bankruptcy Court prior
to the Confirmation Date, and except to the extent such Holder has agreed to a
less favorable treatment of such Allowed Claim, each Holder of an Allowed Class
3B Claim will receive, in full satisfaction, settlement, release, and discharge
of, and in exchange for, such Allowed Claim, such Holder’s Pro Rata Share of
$50,000 on the latest of (i) the Initial Distribution Date, (ii) the date that
is 30 days after the Allowance Date of such Claim, and (iii) the date when such
Allowed Claim becomes due and payable according to its terms and conditions;
provided, however, that no
Holder of a Class 3B Claim will be entitled to receive a distribution in Cash
that exceeds 100% of the Allowed amount of its Claim.  On the
Effective Date, all Class 3B Claims will be cancelled and be deemed terminated
and of no force and effect.

    
      
         

      

      
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    As of the
date hereof, the Debtors estimate that, as of the Effective Date, there will be
a total of between approximately [$13,000 and $68,000] in Allowed Class 3B
Claims.

     

    
      	
               
      

            	
              (e)

            	
              Class
      4 –  Old Aurora Stock
Interests.

            

    

     

    Class 4
consists of all Interests arising under or in connection with the Old Aurora
Common Stock.  Class 4 Interests will be treated in the manner set
forth in Plan Section 5.6.

     

    On the
Effective Date, all outstanding shares of Old Aurora Common Stock and all other
Old Stock of Aurora will be cancelled and will be deemed terminated and of no
force and effect.  In addition, without limiting the generality of the
foregoing, any and all options or rights to exercise warrants or options or to
otherwise acquire any shares of Old Aurora Common Stock or any other Interest in
Aurora, under any of the Existing Stock Option Plans or otherwise, will be
cancelled and be deemed terminated and of no force and effect.  No
distribution of any kind will be made on account of the Old Aurora Common Stock
or any other Old Stock of Aurora under the Plan.

     

    Class 4
is impaired, and the Holders of Interests in Class 4 are deemed to have rejected
the Plan and are not entitled to vote on the Plan in accordance with Bankruptcy
Code § 1126(g).

     

    
      	
               
      

            	
              (f)

            	
              Class
      5 — Intercompany Claims.

            

    

     

    Class 5
consists of all Allowed Intercompany Claims.  Class 5 Claims will be
treated in the manner set forth in Plan Section 5.7.

     

    Specifically,
pursuant to the Plan, Class 5 Claims will be Allowed in the amounts as reflected
on the Debtors’ respective books and records, provided that all
Intercompany Claims will be reviewed by the Debtors and adjusted, continued, or
discharged, as the Debtors determine, as appropriate (by, among other things,
releasing such claims, contributing them to capital, issuing a dividend, or
leaving them unimpaired), taking into account, among other things, the
distribution of consideration under the Plan and the economic condition of the
Reorganized Debtors, among other things.  The Holders of Intercompany
Claims will not be entitled to participate in any of the distributions on
account of Claims under Sections 5.2, 5.3, 5.4, or 5.5 of the Plan and will
only be entitled to the treatment provided in Plan Section 5.7.

     

    Class 5
is impaired, and the Holders of Claims in Class 5 are deemed to have rejected
the Plan and are not entitled to vote on the Plan in accordance with Bankruptcy
Code § 1126(g).  The Debtors believe that there is an Intercompany
Claim owing from HPPC to Aurora in the amount of approximately $112,927.77 as of
June 30, 2009 (comprised of transactions from April of 2009 through June of
2009).

     

    
      	
               
      

            	
              (g)

            	
              Class
      6 – Old HPPC Interests.

            

    

     

    Class 6
consists of all Old HPPC Interests.  Class 6 Interests will be treated
in the manner set forth in Section 5.8 of the Plan.

    
      
         

      

      
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    On the
Effective Date, all outstanding Old HPPC Interests or any other Old Stock of
HPPC will be cancelled and will be deemed terminated and of no force and
effect.  In addition, without limiting the generality of the
foregoing, any and all options or rights to exercise warrants or options or to
otherwise acquire any Old HPPC Interests or any other Interest in HPPC will be
cancelled and be deemed terminated and of no force and effect.  No
distribution of any kind will be made on account of the Old HPPC Interests under
the Plan to the Holders of such Interests.  Notwithstanding the
foregoing, 100% of the new equity in Reorganized HPPC will be issued to
Reorganized Aurora.

     

    Notwithstanding
the foregoing, as set forth further in Plan Section 6.2, 100% of the new equity
in Reorganized HPPC will be issued to Reorganized Aurora.

     

    Class 6
is impaired, and the Holders of Interests in Class 6 are deemed to have rejected
the Plan and are not entitled to vote on the Plan in accordance with Bankruptcy
Code § 1126(g).

     

    
      	
               
      

            	
              (h)

            	
              Allocation
      of Distributions.

            

    

     

    All
distributions paid to Holders of Allowed Claims in satisfaction thereof pursuant
to the Plan will be allocated first to the original principal amounts of such
Claims (as determined for U.S. federal income tax purposes), and, second, to the
portion of such Claims representing interest (as determined for U.S. federal
income tax purposes), and any excess thereafter will be allocated to the
remaining portion of such Claims.

     

    
      	
               
      

            	
              (i)

            	
              Distribution
      Limitations.

            

    

     

    Notwithstanding
any other provision of the Plan to the contrary, no distribution will be made on
account of any Claim, or part thereof, (i) that is not an Allowed Claim or
(ii) that has been avoided or is subject to any objection.  The sum
total of the value of the distributions to be made on the Initial Distribution
Date to all Claims in a particular Class (if any) will not exceed the
aggregate amount of the Allowed Claims in such Class (if any), and the
distribution to be made to each individual Holder of an Allowed Claim will not
exceed the amount of such Holder’s Allowed Claim.

     

    
      	
               
      

            	
              (j)

            	
              Limitations
      on Amounts to Be Distributed to Holders of Allowed Insured
      Claims.

            

    

     

    Distributions
under the Plan to each Holder of an Allowed Insured Claim will be in accordance
with the treatment provided under the Plan for the Class in which such Allowed
Insured Claim is classified, but solely to the extent that such Allowed Insured
Claim is not satisfied from proceeds payable to the Holder thereof under any
pertinent insurance policies and applicable law.  Nothing in Plan
Section 6.33 will constitute a waiver of any claims, obligations, suits,
judgments, damages, demands, debts, rights, Causes of Action, or liabilities
that any entity may hold against the Debtors’ or the Reorganized Debtors’
insurance carriers.

    
      
         

      

      
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              (k)

            	
              Special
      Provision Regarding Impaired
Claims.

            

    

     

    Except as
may otherwise be provided in the Plan (including, without limitation, Plan
Section 6.27(a)), the Confirmation Order, any other order of the Bankruptcy
Court, or any Plan Document, nothing will affect the Debtors’ or the Reorganized
Debtors’ (as applicable) rights and defenses, both legal and equitable, with
respect to any Claims that are impaired under the Plan, including, but not
limited to, all rights with respect to legal and equitable defenses to, and/or
setoffs or recoupments against, such Claims.

     

    
      	
               
      

            	
              (l)

            	
              Special
      Provision Regarding Employee Termination
Claims.

            

    

     

    Other
than for those employees who may have a separate agreement with the Debtors
regarding severance, in lieu of, and in full satisfaction, settlement, release,
and discharge of, and in exchange for, any and all claims against the applicable
Debtors, the Reorganized Debtors, or the Estates for, any and all Employee
Termination Claims, upon the termination of their employment, members of the
Debtors’ management and any other employees of either of the Debtors will be
entitled to receive severance payments equal to two weeks’ salary per year of
such party’s employment, with a minimum payment equal to six weeks’ salary, in
addition to the releases provided for in Article IX of the Plan.

     

    C.           Implementation
of the Plan.

     

    
      1.             Implementation of
Settlement.  The Plan incorporates and implements a compromise
and settlement reached by and among (i) the First Lien Loan Lenders and the
Second Lien Loan Lenders and (ii) the Debtors.  Specifically, the
distributions to be provided for in the Plan to Holders of Allowed Claims in
Class 2A and Class 2B represent the negotiated distributions as set forth in an
agreement-in-principle reached between the Debtors
and the First Lien Loan Lenders and the Second Lien Loan
Lenders.

    

     

    
      	
               
      

            	
              2.

            	
              Boards of Directors or Managers
      of the Reorganized Debtors.

            

    

     

    As of the
Effective Date, Reorganized Aurora will initially have a seven-person Board of
Directors consisting of the following designations:  (i) five
directors to be designated by the Second Lien Loan Administrative Agent on
behalf of the Second Lien Loan Lenders, and (ii) two directors to be designated
by the First Lien Loan Administrative Agent, on behalf of the First Lien Loan
Lenders.  The names of the initial anticipated members of the Board of
Directors of Reorganized Aurora will be disclosed to the Bankruptcy Court
pursuant to Bankruptcy Code § 1129(a)(5) on or before the Confirmation Date,
unless some later date is permitted by the Bankruptcy
Court.  Reorganized Aurora will be the initial manager of Reorganized
HPPC.

     

    Upon the
occurrence of the Triggering Event (which is defined in the Plan as the passing
of 18 months after the Effective Date), the holders of the New Aurora Preferred
Stock will have the right to thereafter designate five directors to the Board of
Directors of Reorganized Aurora, and the number of directors designated by the
holders of the New Aurora Class A Common Stock will be reduced to
two.

     

    Subject
to the voting rights to be afforded to the holders of the New Aurora Preferred
Stock, the boards of directors of the Reorganized Debtors will have full power
and authority to manage the respective businesses and affairs of the Reorganized
Debtors.

    
      
         

      

      
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              3.

            	
              Ownership of Reorganized HPPC
      and Non-Debtor Subsidiaries and
  Affiliates.

            

    

     

    On the
Effective Date, 100% of the new membership interests in Reorganized HPPC will be
issued to Reorganized Aurora. 

     

    In
addition (other than with respect to any stock interests cancelled, sold, or
otherwise transferred by either of the Debtors on or prior to the Effective
Date), on the Effective Date, each Reorganized Debtor will own and retain its
equity interests in any non-Debtor subsidiaries or Affiliates (to the extent
that any such non-Debtor subsidiary or Affiliate has not been dissolved,
sold, or otherwise transferred under applicable law prior to the Effective Date)
to the same extent that the applicable Debtor owned an equity interest in such
non-Debtor subsidiary or Affiliate prior to the Effective
Date.  Without limiting the generality of the foregoing, on the
Effective Date, Reorganized Aurora will directly or indirectly own, to the same
extent as Aurora did as of the Effective Date, interests in Aurora Indiana, LLC;
Aurora Kentucky, LLC; AOG Michigan, LLC; Aurora Operating, LLC; Celebration
Mining Company; Circle Oil, LLC; and Indiana Royalty Trustory, LLC (to the
extent that any such non-Debtor subsidiary or Affiliate has not been
dissolved, sold, or otherwise transferred under applicable law prior to the
Effective Date).

     

    
      	
               
      

            	
              4.

            	
              Issuance of New Securities;
      Execution of Plan Documents.

            

    

     

    On the
Effective Date, Reorganized Aurora will issue the New Aurora Class A Common
Stock and the New Aurora Preferred Stock, and the Reorganized Debtors will issue
notes (including, without limitation, the New Secured Notes and the Working
Capital Loans Notes) and may issue the New Warrants (as defined below), in each
case, in connection with the Exit Credit Facility, the Exit Credit Facility
Guarantee, or otherwise in connection with any other Plan
Document.  In addition, Reorganized HPPC will issue 100% of its
membership interests to Reorganized Aurora.  The issuance of (i) the
New Aurora Class A Common Stock (including, but not limited to, the issuance of
any shares of stock issued upon the exercise of the New Warrants), the New
Aurora Preferred Stock by Reorganized Aurora (including, pursuant to Sections
5.2, 5.3, 6.14, 6.15, and 6.20 of the Plan), and of the capital stock of
Reorganized HPPC, pursuant to the Plan, or (ii) the New Aurora Class B Common
Stock and any and all notes (including the New Secured Notes and the Working
Capital Loans Notes) or warrants (including the New Warrants) under or in
connection with the Exit Credit Facility or the Exit Credit Facility Guarantee,
or otherwise by either of the Reorganized Debtors, will all be authorized by the
Plan without the need for any further corporate action or court
order.

     

    The
execution and delivery by the Debtor(s) or the Reorganized Debtor(s) party
thereto (as applicable) of all Plan Documents (including, without limitation,
the Exit Credit Facility, the New Secured Notes, the Working Capital Loans
Notes, the Exit Credit Facility Guarantee, any document memorializing the
Management and Director Equity Plan or the terms and conditions of the New
Aurora Class A Common Stock, the New Aurora Class B Common Stock, the New Aurora
Preferred Stock, the New Warrants, the Registration Rights Agreement, the Voting
Agreement, and/or any other agreement entered into, or instrument, security
interest, guarantee, or note issued in connection with any of the foregoing, any
other Plan Document, and any other document reasonably necessary or appropriate
to effectuate the events contemplated in the Plan and such Plan Documents), will
be authorized by the Plan without the need for any further corporate action or
court order.  All such Plan Documents will become effective and
binding upon the parties thereto simultaneously in accordance with their
respective terms and conditions as of the Effective Date.

    
      
         

      

      
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              5.

            	
              Corporate Governance and
      Related Action.

            

    

     

    
      	
               
      

            	
              (a)

            	
              The
      Amended and Restated Articles of Incorporation, the Amended and Restated
      By-Laws, and the Amended and Restated LLC
  Agreement.

            

    

     

    On or
before the Effective Date, the Reorganized Debtors will, as applicable (i) file
the Amended and Restated Articles of Incorporation and the Amended and Restated
LLC Agreement with the appropriate state officials in accordance with applicable
state law and (ii) adopt the Amended and Restated By-Laws.  The
Amended and Restated Articles of Incorporation will, among other things, (i) set
forth the respective terms of the New Aurora Preferred Stock and the New Aurora
Common Stock, (ii) provide that the number of authorized shares of New Aurora
Preferred Stock will be [45] million and of New Aurora Common Stock will be [85]
million, and (iii) provide that the par value of each of the New Aurora
Preferred Stock and the New Aurora Class A Common Stock will be
$0.01.  After the Effective Date, the Reorganized Debtors may amend
and restate their (as applicable) respective Amended and Restated Articles of
Incorporation, Amended and Restated By-Laws, Amended and Restated LLC Agreement,
and/or other constituent documents as permitted by the governing state general
corporation law or limited liability company law (as applicable) and the
applicable agreements and constituent documents (including the Amended and
Restated Articles of Incorporation, the Amended and Restated By-Laws, and the
Amended and Restated LLC Agreement) of the Reorganized Debtors.

     

    
      	
               
      

            	
              (b)

            	
              Corporate
      Actions.

            

    

     

    On,
before, or after the Effective Date, all actions reasonably necessary and
desirable to effectuate, implement, or adopt:  the Exit Credit
Facility; the New Secured Notes; the Working Capital Loans Notes; the Exit
Credit Facility Guarantee; the issuance of the New Aurora Common Stock
(including any shares of stock issued upon the exercise of the New Warrants),
the New Aurora Preferred Stock, and the New Warrants; the Management and
Director Equity Plan; the Registration Rights Agreement; the Voting Agreement;
the reservation of authorized but unissued shares of New Aurora Class A Common
Stock for issuance upon the exercise of the New Warrants or otherwise; the
adoption and/or filing (as applicable) of the Amended and Restated Articles of
Incorporation, the Amended and Restated By-Laws, the Amended and Restated LLC
Agreement, or similar constituent documents; the selection of the directors,
officers, and/or managers of the respective Reorganized Debtors; the transfer of
the NW Bank Collateral to the Holder of the Allowed Class 2D Claims (subject to
the terms and conditions of the Plan, including, without limitation Section
4.4(b) thereof); the entry into the Management Transition Services Agreements;
and all other actions or transactions contemplated by the Plan, the Plan
Documents, or such other documents, and all actions reasonably necessary and
desirable to effectuate any of the foregoing, will be authorized and approved in
all respects by the Plan without the need for any further corporate or similar
action, or court order.  All matters provided for in the Plan
involving the corporate structure, assets, and/or operations of the Debtors, the
Reorganized Debtors, and any corporate or similar action required by the Debtors
or the Reorganized Debtors in connection with the Plan or the Plan Documents
will be deemed to have occurred and will be in effect, without any requirement
of further action by the respective security holders, members, officers,
managers, or directors of the Debtors or the Reorganized
Debtors.  After the Confirmation Date and on or prior to the Effective
Date, the appropriate members of the Boards of Directors and/or managers,
members, or officers of the Debtors and the Reorganized Debtors are authorized
and directed to issue, execute, and deliver the agreements, documents,
securities, certificates, and instruments contemplated by the Plan and/or the
Plan Documents in the name of and on behalf of the applicable Debtor(s) or
Reorganized Debtor(s) (as applicable).

    
      
         

      

      
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              6.

            	
              Administration of the
      Plan.

            

    

     

    After the
Effective Date, each of the Reorganized Debtors will be authorized,
respectively, to perform those responsibilities, duties, and obligations set
forth in the Plan, including, without limitation, making distributions as
provided under the Plan, objecting to the allowance of any Claim or Interest,
and prosecuting any litigation pertaining thereto, to pay such Claims as
may be later Allowed, all as contemplated by the dispute resolution procedures
contained in Plan Section 6.10, and overseeing and governing the continuing
affairs and operations of the Reorganized Debtors on a going-forward
basis.

     

    The
Reorganized Debtors may retain such management, law firms, accounting firms,
experts, advisors, agents, consultants, investigators, appraisers, auctioneers,
or other professionals as they may deem reasonably necessary or appropriate,
including, without limitation, a transfer or disbursing agent, to aid them in
the performance of their responsibilities pursuant to the terms of the
Plan.  It will not be a requirement that any such parties retained by
either of the Reorganized Debtors be a “disinterested person” (as such term is
defined in Bankruptcy Code § 101(14)), and such retained parties may
include Professionals or other Persons who had previously been active in these
Cases on behalf of any Debtor, Creditor, equity holder (“Interest Holder”), the
Creditors Committee, or other constituency in these Cases.  Without
limiting the generality of the foregoing, following the issuance of the New
Warrants, the Reorganized Debtors may arrange for a third party to serve in as
the New Warrant agent.

     

    The
Reorganized Debtors will be responsible for filing all federal, state, and local
tax returns for the Debtors and for the Reorganized Debtors.

     

    To the
extent the manner of performance is not specified in the Plan, the Debtors and
the Reorganized Debtors will have the discretion to carry out and perform all
other obligations or duties imposed on them by, or actions contemplated or
authorized by, the Plan, any Plan Document, or by law in any manner their
respective Boards of Directors, managers, or officers so
choose.

    
      
         

      

      
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              7.

            	
              Provisions Relating to
      the Existing Old Aurora Common Stock, the NW Bank
      Agreements, and
      the Credit Facilities.

            

    

     

    On the
Effective Date (and solely with respect to the DIP Facility, upon the
payment in full of the DIP Facility Claims with proceeds from the Working
Capital Loans or otherwise), except as expressly otherwise set forth in the Plan
(including Section 4.4(b) thereof), any and all notes issued in connection with
any of the Credit Facilities or any of the Guarantees; the Old Aurora Common
Stock; any other Interests in Aurora; the Existing Stock Option Plans; the NW
Bank Agreements; and any other options, warrants, calls, subscriptions, or other
similar rights or other agreements or commitments, contractual or otherwise,
obligating either of the Debtors to issue, transfer, or sell any shares of Old
Aurora Common Stock or any other Interest in Aurora, or HPPC, will be
automatically canceled and deemed terminated, extinguished, and of no further
force and effect without further act or action under any applicable agreement,
law, regulation, order, or rule, and the Holders thereof or the parties
thereto will have no rights, and such instruments or agreements will
evidence no rights except the right to receive the distributions (if any)
to be made to the Holders of such instruments under the Plan.

     

    No Holder
of any notes issued in connection with any of the Credit Facilities or any of
the Guarantees will be entitled to any distribution under the Plan unless and
until such Holder has first surrendered or caused to be surrendered any such
notes or Guarantees to the applicable Administrative Agent, which in turn
will be required to surrender any and all such notes or Guarantees to the
Debtors or the Reorganized Debtors, or, in the event that such original notes or
Guarantees have been lost, destroyed, stolen, or mutilated, has first executed
and delivered an affidavit of loss and indemnity with respect thereto in a form
customarily utilized for such purposes that is reasonably satisfactory to the
Debtors or the Reorganized Debtors, and, in the event the Debtors or the
Reorganized Debtors so request, has first furnished a bond in form and substance
(including, without limitation, amount) reasonably satisfactory to the Debtors
or the Reorganized Debtors (as applicable).  If a Holder has actual
possession of any note issued in connection with any Credit Facility or any of
the Guarantees, then such Holder must physically surrender or cause to be
surrendered its note(s) or Guarantee(s) to the applicable Administrative Agent
for subsequent distribution to the Debtors or the Reorganized Debtors (as
applicable), in accordance with the procedures required by the
Debtors.  As soon as practicable after such surrender of the
applicable note or Guarantee to the Debtors (or the Reorganized Debtors), or
such delivery of an affidavit of loss and indemnity and such furnishing of a
bond as provided in Plan Section 6.6(b), the Debtors or the Reorganized Debtors
(as applicable) will make the distributions provided in the Plan with respect to
the applicable Allowed Claim(s) (as and to the extent as set forth in the
Plan).  Promptly upon the surrender of such instruments, the Debtors
or the Reorganized Debtors (as applicable) will cancel any and all notes issued
in connection with any of the Credit Facilities or any of the Guarantees (if
any).

     

    No Holder
of any notes issued in connection with any of the NW Bank Agreements will be
entitled to any distribution under the Plan unless and until such Holder has
first surrendered or caused to be surrendered any such notes to the Debtors or
the Reorganized Debtors, or, in the event that such original notes have been
lost, destroyed, stolen, or mutilated, has first executed and delivered an
affidavit of loss and indemnity with respect thereto in a form customarily
utilized for such purposes that is reasonably satisfactory to the Debtors or the
Reorganized Debtors, and, in the event the Debtors so request, has first
furnished a bond in form and substance (including, without limitation, amount)
reasonably satisfactory to the Debtors.  If a Holder has actual
possession of any note issued in connection with any NW Bank Agreement, then
such Holder must physically surrender or cause to be surrendered its note(s) to
the Debtors or the Reorganized Debtors (as applicable), in accordance with the
procedures required by the Debtors.  As soon as practicable after such
surrender of the applicable note to the Debtors (or the Reorganized Debtors), or
such delivery of an affidavit of loss and indemnity and such furnishing of a
bond as provided in Section 6.6(c) of the Plan, the Debtors or the Reorganized
Debtors (as applicable) will make the distributions provided in the Plan with
respect to the applicable Allowed Claim(s) (as and to the extent as set forth in
the Plan).  Promptly upon the surrender of such instruments, the
Debtors or the Reorganized Debtors (as applicable) will cancel any and all notes
issued in connection with any of the NW Bank Agreements.

    
      
         

      

      
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    All
distributions under the Plan on account of the Allowed First Lien Loan Claims
will initially be distributed to the First Lien Loan Administrative Agent for
further distribution to the Holders of Allowed First Lien Loan Claims as of the
Distribution Record Date, pursuant to the terms and subject to the conditions of
the First Lien Loan and the Plan.  Upon the delivery of the foregoing
distributions to the First Lien Loan Administrative Agent, the Debtors and the
Reorganized Debtors will be released of all liability with respect to their
obligation to make such delivery.  The First Lien Loan Administrative
Agent will thereafter take all steps reasonably necessary and appropriate to
effectuate such further distribution thereof to the Holders of the Allowed First
Lien Loan Claims.  Similarly, all distributions under the Plan on
account of the Allowed Second Lien Loan Claims will initially be distributed to
the Second Lien Loan Administrative Agent for further distribution to the
Holders of Allowed Second Lien Loan Claims as of the Distribution Record Date,
pursuant to the terms and subject to the conditions of the Second Lien Loan and
the Plan.  Upon the delivery of the foregoing distributions to the
Second Lien Loan Administrative Agent, the Debtors and the Reorganized Debtors
will be released of all liability with respect to their obligation to make such
delivery.  The Second Lien Loan Administrative Agent will thereafter
take all steps reasonably necessary and appropriate to effectuate such further
distribution thereof to the Holders of the Allowed Second Lien Loan
Claims.  Also, all distributions under the Plan on account of the
Allowed DIP Facility Claims will initially be distributed to the DIP Facility
Administrative Agent, for further distribution to the Holders of Allowed DIP
Facility Claims as of the Distribution Record Date, pursuant to the terms and
subject to the conditions of the DIP Facility and the Plan.  Upon the
delivery of the foregoing distributions to the DIP Facility Administrative
Agent, the Debtors and the Reorganized Debtors will be released of all liability
with respect to their obligation to make such delivery.  The DIP
Facility Administrative Agent will thereafter take all steps reasonably
necessary and appropriate to effectuate such further distribution thereof to the
Holders of the Allowed DIP Facility Claims.  On the Effective Date
(and, solely with respect to the DIP Facility, upon the payment in full of the
DIP Facility Claims with proceeds from the Working Capital Loans or otherwise),
all of the obligations and Liens under the respective Credit Facilities other
than those that are being expressly reinstated and modified in the manner set
forth in Plan Section 5.2, will be deemed terminated, canceled, and extinguished
(all without any further action by any Person or the Bankruptcy Court) and will
have no further legal effect other than as evidence of any right to receive
distributions under the Plan as set forth in Sections 3.2, 5.2, and 5.3 thereof;
provided, however, that the
respective Credit Facilities will continue in effect and will not be deemed
canceled on the books and records of the applicable Administrative Agents,
solely for the purposes of and to the extent necessary to (i) facilitate the
respective distributions to the First Lien Loan Lenders, the Second Lien Loan
Lenders, or the DIP Facility Lenders as of the Distribution Record Date,
pursuant to the Plan and (ii) to enable the respective Administrative Agents to
perform any and all current and future administrative
functions.

    
      
         

      

      
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    All
distributions under the Plan on account of the Allowed NW Bank Claims will be
distributed to NW Bank as the Holder of the Allowed NW Bank Claims as of the
Distribution Record Date, pursuant to the terms and subject to the conditions of
the NW Bank Agreements and the Plan.  Upon the delivery of the
foregoing distributions to NW Bank, the Debtors and the Reorganized Debtors will
be released of all liability with respect to their obligation to make such
delivery.  Subject to the other terms and conditions of the Plan,
including in Section 4.4(b) in the event Aurora elects to keep the NW Bank LCs
in place after the Effective Date, on the Effective Date, the obligations under
the respective NW Bank Agreements will be deemed terminated, canceled, and
extinguished (all without any further action by any Person or the Bankruptcy
Court) and will have no further legal effect other than as evidence of any right
to receive distributions under the Plan as set forth in Sections 4.4 and
5.4 thereof.

     

    On the
Effective Date, the Old Aurora Common Stock and the Old HPPC Interests will
be deemed terminated, cancelled, and extinguished (all without any further
action by any Person or the Bankruptcy Court) and will have no further legal
effect.

     

    The
Debtors will pay the reasonable and customary fees, charges, and expenses
incurred by the respective Administrative Agents (including, without limitation,
the reasonable and customary fees, charges and expenses of each such
Administrative Agents’ counsel, financial advisor, and any other agent or
consultant) in the performance of any function associated with the Credit
Facilities or the Plan (as applicable) during the period from and including the
Petition Date until such time as all distributions provided for under the Plan
to the Holders of Allowed First Lien Loan Claims, Allowed Second Lien Loan
Claims, and Allowed DIP Facility Claims (as applicable) have been
made.

     

    
      	
               
      

            	
              8.

            	
              Delivery of Distributions;
      Unclaimed Property; Undeliverable
  Distributions.

            

    

     

    Except as
may otherwise be provided in Sections 3.2, 5.2, 5.3, 6.7, and 6.8 of the
Plan, any distributions to Holders of Allowed Claims under the Plan will be
made:  (i) at the addresses set forth either on the Schedules or as
otherwise set forth on the Debtors’ respective books and records, or on the
respective Proofs of Claim filed by such Holders in the event that the addresses
indicated thereon differ from those set forth on the Schedules or as otherwise
set forth on the Debtors’ respective books and records or upon the applicable
securities depositories, clearing systems, or broker, bank, or custodial
participants in the clearing system (as applicable); or (ii) at the addresses
set forth in any written notices of address change delivered to the Debtors or
the Reorganized Debtors (if after the Effective Date) after the date of any
related Proof of Claim.

     

    Except as
otherwise set forth in Plan Section 4.4(b), in accordance with Bankruptcy Code §
1143, any Holder of any note issued in connection with any of the Credit
Facilities, the NW Bank Agreements, or any of the Guarantees that fails to
surrender the applicable note or deliver an affidavit of loss and indemnity as
provided herein by 5:00 p.m. prevailing Eastern Time on the date that is one
year from and after the later of the Effective Date or the applicable Allowance
Date with respect to any Claims arising from or relating to such note issued in
connection with any of the Credit Facilities, the NW Bank Agreements, or the
Guarantees (if any), will be deemed to have forfeited all rights and claims in
respect of such Claims, and will be forever barred from receiving any
distributions under the Plan on account thereof.  In such cases, (a)
any property held for distribution by the applicable Administrative Agent on
account of Allowed Claims based on such note issued in connection with the
applicable Credit Facility or any of the Guarantees (if any), will be made
available for redistribution, on a Pro Rata basis, to all other Holders of
Allowed Claims arising under the applicable Credit Facility that timely
surrendered the applicable note or delivered an affidavit of loss and indemnity
as provided herein, and (b) any Cash held for distribution by the Debtors on
account of Allowed NW Bank Note Deficiency Claims will be retained by the
Reorganized Debtors for further distributions to the Holders of Allowed Class 3A
Claims in accordance with Plan Section 6.10(e).

    
      
         

      

      
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    If the
distribution to the Holder of any Allowed Claim is returned to the Reorganized
Debtors as undeliverable, no further distribution will be made to such Holder
unless and until the Reorganized Debtors are notified in writing of such
Holder’s then current address.  The Reorganized Debtors will retain
any such undeliverable distributions.

     

    Any
Holder of an Allowed Claim who does not assert a claim for an undeliverable
distribution by 5:00 p.m. prevailing Eastern Time on the date that is one year
after the date by which such Holder was first entitled to such distribution will
no longer have any claim to, or interest in, such undeliverable distribution and
will be forever barred from receiving any distribution under the
Plan.  Nothing contained in the Plan will require the Debtors or the
Reorganized Debtors to attempt to locate any Holder of an Allowed
Claim.

     

    
      	
               
      

            	
              9.

            	
              Funding of Cash Distributions
      under the Plan.

            

    

     

    Any funds
necessary to make the Cash distributions required under the Plan and/or to fund
the future obligations of the Reorganized Debtors will be made
from:  the Cash on hand of the Debtors and of the Reorganized Debtors;
the Working Capital Loans; and the future operations of the Debtors and the
Reorganized Debtors (as applicable).

     

    
      	
               
      

            	
              10.

            	
              Manner of Payments Under the
      Plan.

            

    

     

    Any Cash
distribution to be made by the Debtors or the Reorganized Debtors (as
applicable) pursuant to the Plan may be made by a check on a United States bank
selected by the Debtors or the Reorganized Debtors (as applicable); provided, however, that Cash
distributions made to foreign Holders of Allowed Claims may be paid, at the
option of the Debtors or the Reorganized Debtors (as applicable), in such funds
and by such means as are necessary or customary in a particular foreign
jurisdiction.

     

    
      	
               
      

            	
              11.

            	
              Disputed
      Claims.

            

    

     

    No
distribution or payment will be made on a Disputed Claim until such Disputed
Claim becomes an Allowed Claim.  On the Initial Distribution Date, the
distributions reserved for the Holders of any Disputed Claims in each Class
under the Plan will be deposited in deposit accounts for the benefit of the
Holders of Disputed Claims whose Claims are ultimately Allowed in the respective
Classes in which the Disputed Claims are classified (each deposit account a
“Disputed Claims Reserve”); provided, however, that neither
the Debtors nor the Reorganized Debtors will be required to deposit any Cash,
securities, or other property or assets into a Disputed
Claims  Reserve on account of a particular Disputed Claim with respect
to which the Debtors or the Reorganized Debtors have filed a motion or objection
with the Bankruptcy Court seeking to either (a) estimate or liquidate the
Allowed amount of such Disputed Claim at $0 or (b) disallow, expunge, vacate, or
otherwise strike such Disputed Claim on any grounds.

    
      
         

      

      
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    Subject
to the other provisions of the Plan (including Section 6.10(a) thereof), the
Reorganized Debtors (or any transfer or disbursing agent retained by the
Reorganized Debtors pursuant to Plan Section 6.5(b)) will withhold from the
property to be distributed under the Plan and deposit in each Disputed
Claims Reserve a sufficient amount of such withheld property to be
distributed on account of the face amount of Claims that are Disputed Claims in
such Class as of the Initial Distribution Date for such Class under the
Plan.  For the purposes of the Plan Section 6.10, the “face
amount” of a Claim is (i) the amount set forth on the applicable Proof of
Claim or such lower amount as may be determined in accordance with Plan
Section 6.10(c), unless the Claim is filed in an unliquidated amount; or (ii) if
a Proof of Claim has been filed in an unliquidated amount, the amount determined
in accordance with Plan Section 6.10(c).

     

    As to a
Disputed Claim, the Bankruptcy Court will, upon motion by the Debtors or the
Reorganized Debtors or any other party-in-interest in these Cases (as
applicable), estimate the maximum allowable amount of such Disputed
Claim and the amount to be placed in the Disputed Claims Reserve on account
of such Disputed Claim.  (i) If so authorized by order of the
Bankruptcy Court, any Creditor whose Claim (i) is estimated by an order of the
Bankruptcy Court or (ii) is the subject of a motion or objection to (a) estimate
or liquidate the Allowed amount of such Disputed Claim at $0 or (b) disallow,
expunge, vacate, or otherwise strike such Disputed Claim in full on any grounds,
as contemplated by Plan Section 6.10(a), will not have any recourse to the
Debtors or to the Reorganized Debtors, any Assets theretofore distributed on
account of any Allowed Claim, or any other entity or property if the finally
Allowed Claim of that Creditor exceeds that estimated maximum allowable
amount.  Instead, such Creditor will have recourse only to the
undistributed Cash (if any) in the applicable Disputed Claims Reserve for the
Claim of that Creditor and (on a Pro Rata basis with the other Creditors of
the same Class who are similarly situated) to those portions (if any) of the
Disputed Claims Reserve for other Disputed Claims of the same Class that exceed
the ultimately Allowed amount of such Claims.

     

    All
earnings on any Cash held in a Disputed Claims Reserve account (if any) will be
held in trust and will be distributed only in the manner described in the
Plan.

     

    At such
time as all or any portion of a Disputed Claim becomes an Allowed Claim, the
distributions reserved for such Disputed Claim or such portion, plus any
earnings thereon (if any), will be released from the appropriate Disputed Claims
Reserve and delivered to the Holder of such Allowed Claim in the manner as
described in the Plan.  At such time as all or any portion of any
Disputed Priority Claim or any Disputed Class 1 or 2C Claim is determined not to
be an Allowed Claim, the distribution reserved for such Disputed Claim or such
portion, plus any earnings thereon (if any), will be released from the
appropriate Disputed Claims Reserve account and returned to the Reorganized
Debtors. At such time as all or any portion of any Disputed Class 3A
Claim or Disputed Class 3B Claim is determined not to be an Allowed Claim,
the distribution reserved for such Disputed Claim or such portion, plus any
earnings thereon (if any), will be released from the appropriate Disputed Claims
Reserve and made available for redistribution, in a timely manner, on a Pro Rata
basis, to the Holders of Allowed Claims of such Classes; provided, however, that neither
the Debtors, the Reorganized Debtors, nor any transfer or disbursing agent
retained by the Reorganized Debtors pursuant to Plan Section 6.5(b) will be
required to make any such redistribution until the aggregate amount available
with respect thereto is at least $5,000.

    
      
         

      

      
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    (i) After
the Confirmation Date, the Debtors (in consultation with the Creditors
Committee, the First Lien Loan Administrative Agent, and the Second Lien Loan
Administrative Agent), and (ii) on and after the Effective Date, the Reorganized
Debtors will have the authority to object to and litigate any Disputed Claims or
any dispute regarding the amount of the NW Bank Note Secured Claim and the NW
Bank Note Deficiency Claim, and will have the authority to settle, compromise,
resolve, or withdraw any objection to Disputed Claims or any dispute regarding
the amount of the NW Bank Note Secured Claim and the NW Bank Deficiency Claim,
without the need for any Bankruptcy Court or other approval or any other or
further notice.  Without limiting the generality of the foregoing, the
amount of the NW Bank Note Deficiency Claim is to be determined in good faith by
the Debtors (in consultation with the Creditors Committee, the First Lien Loan
Administrative Agent, and the Second Lien Loan Administrative Agent) and NW
Bank, or, in the absence of an agreement between such parties, by the Bankruptcy
Court.

     

    Except as
otherwise provided in the Plan, if there exists any Disputed Administrative
Claim, Disputed Tax Claim, or Disputed DIP Facility Claim, or any Disputed Class
1 or 2C Claim, the Reorganized Debtors will withhold in a reserve account
the “face amount” (as calculated under Plan Section 6.10(b)) of any such
Disputed Claim until and to the extent such Claim is determined to be an Allowed
Claim.

     

    
      	
               
      

            	
              12.

            	
              Bar Date for Objections to
      Claims.

            

    

     

    All
objections to Claims (other than with respect to (a) Administrative Claims and
(b) Rejection Claims arising under those Executory Contracts that are to be
rejected under and pursuant to the Plan) must be filed by the Claims Objection
Bar Date.  The failure by any party-in-interest, including the
Debtors, to object to any Claim, whether or not unpaid, for purposes of voting
will not be deemed a waiver of such party’s rights to object to, or to
re-examine, any such Claim in whole or in part, for purposes of
distributions under the Plan.

     

    
      	
               
      

            	
              13.

            	
              Deadlines for Determining the
      Record Holders of the Various Classes of Claims.

            

    

     

    At the
close of business on the Distribution Record Date, the respective transfer
records for the Credit Facilities, the NW Bank Agreements, and the Old
HPPC Interests will be closed, and there will be no further changes in the
record holders of the respective Credit Facilities Claims, NW Bank Claims,
General Unsecured Claims, or the Old HPPC Interests after such
date.  Neither the Debtors, the Reorganized Debtors, any disbursing
agent or transfer agent retained by the Reorganized Debtors pursuant to Plan
Section 6.5(b), nor the respective Administrative Agents will have any
obligation to recognize any transfer of the First Lien Loan Claims, the Second
Lien Loan Claims, the NW Bank Claims, the DIP Facility Claims, any notes issued
in connection with any of the Credit Facilities, the NW Bank Agreements, or any
of the Guarantees (if any), any General Unsecured Claim, or the Old HPPC
Interests occurring after the Distribution Record Date, and such parties will be
entitled, instead, to recognize and deal for all purposes under the Plan with
only those record holders thereof as of the close of business on the
Distribution Record Date.

    
      
         

      

      
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              14.

            	
              Management and Director Equity
      Plan.

            

    

     

    Following
the Effective Date, the Management and Director Equity Plan may be adopted by
Reorganized Aurora.  The terms and conditions of any Management and
Director Equity Plan will be determined by the Board of Directors of Reorganized
Aurora.  Shares of New Aurora Class B Common Stock representing the
equivalent of up to 10% of the shares of New Aurora Class A Common Stock on a
fully-diluted basis that are issued and outstanding upon the Effective Date (not
including any shares of New Aurora Class A Common Stock or other such class of
equity that would be issuable upon the exercise of the New Warrants) will be
reserved for the issuance under any Management and Director Equity Plan when the
Management and Director Equity Plan is adopted by Reorganized
Aurora.

     

    
      	
               
      

            	
              15.

            	
              The Registration Rights
      Agreement.

            

    

     

    Following
the Effective Date, certain holders of New Aurora Class A Common Stock will be
entitled to require the registration of the New Aurora Class A Common Stock
under the Securities Act in accordance with the terms of the Registration Rights
Agreement.

     

    The
Registration Rights Agreement will be filed as part of the Plan Supplement and
will be executed and delivered by Reorganized Aurora and become effective as of
the Effective Date.  The terms of the Registration Rights Agreement
will provide that no registration rights thereunder may be exercised unless all
shares of New Aurora Preferred Stock have been fully redeemed.

     

    
      	
               
      

            	
              16.

            	
              Restrictions on
      Transfer.

            

    

     

    For a
period of 25 months after the Effective Date, the New Aurora Preferred Stock may
not be sold, transferred, pledged, or assigned without the approval of the
holders of a majority of the New Aurora Class A Common Stock.  After
such 25-month period following the Effective Date, there will be no restrictions
on the transfer of the New Aurora Preferred Stock other than with respect to
compliance with applicable laws.

     

    For a
period of 25 months after the Effective Date, the New Aurora Common Stock may
not be sold, transferred, pledged, or assigned without the approval of the
holders of a majority of the New Aurora Preferred Stock.  After such
25-month period following the Effective Date, there will be no restrictions on
the transfer of the New Aurora Common Stock other than with respect to
compliance with applicable laws.

     

    
      	
               
      

            	
              17.

            	
              De
      Minimis
      Distributions.

            

    

     

    No
Debtor, Reorganized Debtor, or any disbursing agent or transfer agent retained
by the Reorganized Debtors pursuant to Plan Section 6.5(b) will distribute any
Cash to the Holder of an Allowed Claim if the amount of Cash to be distributed
on account of such Claim is less than $100.  Any Holder of an Allowed
Claim on account of which the amount of Cash to be distributed is less than $100
will have its Claim and its right to any such distribution discharged, and will
be forever barred from asserting any such claim against, or interest in, the
Reorganized Debtors or their respective property.  Any Cash not
distributed pursuant to Plan Section 6.22 will be the property of the
Reorganized Debtors, free of any restrictions thereon, and any such Cash held by
any disbursing agent or transfer agent retained by the Reorganized Debtors
pursuant to Plan Section 6.5(b) will be returned to the Reorganized
Debtors.

    
      
         

      

      
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              18.

            	
              Withholding and Reporting
      Requirements.

            

    

     

    In
connection with the Plan and all instruments issued in connection therewith and
distributed thereunder, the Debtors, the Reorganized Debtors, any disbursing
agent or transfer agent retained by the Reorganized Debtors pursuant to Plan
Section 6.5(b), and the Administrative Agents, as the case may be, will comply
with all applicable withholding and reporting requirements imposed by any
federal, state, local, or foreign taxing authority, and all distributions under
the Plan will be subject to any such withholding and reporting
requirements.

     

    
      	
               
      

            	
              19.

            	
              Non-Debtor Intercompany
      Claims.

            

    

     

    All
Non-Debtor Intercompany Claims (which consist of any claim, debt, or other
obligation held by or against either Debtor or any Affiliate, or subsidiary of
either Debtor, by or against any non-Debtor subsidiary or Affiliate of a Debtor)
will (without the need for any such entities to file a Proof of Claim) be
reviewed by the Reorganized Debtors and adjusted, continued, or discharged
as the Reorganized Debtors determine as appropriate, taking into account, among
other things, the distribution of consideration under the Plan and the economic
condition of the Reorganized Debtors and their non-Debtor subsidiaries and
Affiliates.

     

    
      	
               
      

            	
              20.

            	
              Direction to
      Parties.

            

    

     

    From and
after the Effective Date, the Reorganized Debtors may apply to the Bankruptcy
Court for an order directing any necessary party to execute or deliver or to
join in the execution or delivery of any instrument required to effect a
transfer of property dealt with by the Plan, and to perform any other act,
including the satisfaction of any Lien, that is necessary for the consummation
of the Plan, pursuant to Bankruptcy Code § 1142(b).

     

    
      	
               
      

            	
              21.

            	
              Setoffs.

            

    

     

    The
Debtors will, pursuant to Bankruptcy Code § 553, set off against any Allowed
Claim and the distributions to be made pursuant to the Plan on account of such
Claim, all claims, rights, and Causes of Action of any nature that the Debtors
may hold against the Holder of such Allowed Claim that are not otherwise waived,
released, or compromised in accordance with the Plan; provided, however, that neither
the failure to effect such a setoff nor the allowance of any Claim will
constitute a waiver or release by the Debtors of any such claims, rights, and
Causes of Action that either of the Debtors may possess against such
Holder.

    
      
         

      

      
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              22.

            	
              Waiver of Avoidance Claims;
      Preservation of All Other Causes of
  Action.

            

    

     

    As of the
Effective Date, all of the Debtors’ and the Estates’ Avoidance Claims will be
deemed to have been, and will be, released and/or waived, and all parties will
be enjoined by the Plan from instituting and presenting in the name of the
Debtors, or otherwise, any or all proceedings in order to collect, assert, or
enforce any such Avoidance Claim of any kind; provided, however, that if the
Confirmation Order is vacated or revoked, all Avoidance Claims will be deemed
reinstated automatically, with the same force and effect as if the Avoidance
Claims never had been released and/or waived under the Plan, without the need
for any action to be taken by the Debtors or any other party.  In
addition, all parties will be enjoined by the Plan from instituting and
presenting in the name of the Debtors or the Estates any objections to Claims
under Bankruptcy Code § 502(d) on account of such released and waived Avoidance
Claims.

     

    However,
except as otherwise set forth in the Plan (including, without limitation,
Article IX and Section 6.27(a) thereof), in accordance with Bankruptcy Code §
1123(b), as of the Effective Date, the Reorganized Debtors will retain all
Causes of Action (including, without limitation, actions that could be brought
under Bankruptcy Code § 542 or 543) other than with respect to any Avoidance
Claims, and will have the power, subject to any applicable releases and/or
waivers contained in the Plan, (i) to institute and present in the name of the
Debtors, or otherwise, all proceedings that they may deem proper in order to
collect, assert, or enforce any claim, right, or title of any kind in or to
either of the Debtors’ Assets or to avoid any purported Lien, and (ii) to defend
and compromise any and all actions, suits, or proceedings in respect of such
Assets.

     

    
      	
               
      

            	
              23.

            	
              Special Provisions Regarding
      the Treatment of Allowed Secondary Liability
  Claims.

            

    

     

    The
classification and treatment of Allowed Claims under the Plan will take into
consideration all Allowed Secondary Liability Claims, which are defined in the
Plan as a “Claim that arises from a Debtor’s being liable as a guarantor of, or
otherwise being jointly, severally, or secondarily liable for, any contractual,
tort, or other obligation of another Debtor, including any Claim based
on:  (a) guarantees of collection, payment, or performance (including,
but not limited to, any of the Guarantees or any guarantee relating to any
Executory Contract); (b) indemnity bonds, obligations to indemnify, or
obligations to hold harmless; (c) performance bonds; (d) contingent liabilities
arising out of contractual obligations or out of undertakings (including any
assignment or other transfer) with respect to leases, operating agreements, or
other similar obligations made or given by a Debtor relating to the obligations
or performance of another Debtor; (e) vicarious liability; (f) liabilities
arising out of piercing the corporate veil, alter ego liability, or similar
legal theories; or (g) any other joint or several liability that any Debtor may
have in respect of any obligation that is the basis of a Claim.”  On
the Effective Date, Allowed Secondary Liability Claims will be treated as
follows

     

    (a)           The
Allowed Secondary Liability Claims arising from or related to either Debtors'
joint or several liability for the obligations under any (a) Allowed Claim that
is being Reinstated under the Plan or (b) Executory Contract that is being
assumed or deemed assumed by the other Debtor or Reorganized Debtor will be
Reinstated.

    
      
         

      

      
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    (b)           Holders
of all other Allowed Secondary Liability Claims will be entitled to only one
distribution from the Debtors, which distribution will be as provided in the
Plan in respect of such underlying Allowed Claim, and which Allowed Secondary
Liability Claim (as well as the underlying Allowed Claim) will be deemed
satisfied in full by the distributions on account of the related underlying
Allowed Claim.  No multiple recovery on account of any Allowed
Secondary Liability Claim (including, but not limited to, on account of any
Claim based on any of the Guarantees or any guarantee related to an Executory
Contract) will be provided or permitted in excess of the Allowed
Claim.

     

    
      	
               
      

            	
              24.

            	
              The Plan
      Supplement.

            

    

     

    The Plan
Supplement will be filed with the Bankruptcy Court within the time established
by the order of the Bankruptcy Court approving the Disclosure Statement or other
applicable order of the Bankruptcy Court.  The Plan Supplement will
include (unless previously filed or not then yet available) the respective draft
forms of the Amended and Restated Articles of Incorporation; the Amended and
Restated Bylaws; the Amended and Restated LLC Agreement; the Registration Rights
Agreement; the Voting Agreement (to the extent applicable in accordance with
Section 6.19(b) of the Plan); and, to the extent then available, the draft forms
of any documents memorializing the New Warrants or the terms and conditions of
the New Aurora Preferred Stock, the New Aurora Class A Common Stock, or the New
Aurora Class B Common Stock.  The Debtors may also include in the Plan
Supplement a draft form of an Exit Credit Facility, the New Secured Notes, and
the Working Capital Loans Notes, but only if and to the extent that such drafts
are available as of the date of the filing of the Plan
Supplement.  The Plan Supplement may also include revised or updated
lists of the Executory Contracts identified as “to be rejected” under the Plan
(if any).  The draft forms, summaries, lists, and schedules so set
forth in the Plan Supplement may be amended, modified, or supplemented from time
to time after the filing of the Plan Supplement.  Upon its filing, the
Plan Supplement may be inspected in the office of the Clerk of the Bankruptcy
Court or its designee during normal business hours.  Holders of Claims
and Interests may obtain a copy of the Plan Supplement upon written request to
the Claims Agent or through the Claims Agent’s website,
http://www.donlinrecano.com/aurora, or through the Bankruptcy Court’s website,
http://www.miwb.uscourts.gov/.

     

    
      	
               
      

            	
              25.

            	
              Distributions by Reorganized
      Aurora of Proceeds from the Sale of
  Assets.

            

    

     

    The net
Cash proceeds from the sale of any assets of the Reorganized Aurora, as well as
any amount to be paid (whether voluntary or involuntary), will be applied as
follows:

     

    First, to
the Pro Rata payment of (i) all fees, costs, expenses and other obligations
payable to the administrative agent and the collateral agent, if any, under the
New Secured Notes and (ii) to the extent that the Working Capital Loans are
subscribed by at least one First Lien Loan Lender, all fees, costs, expenses and
other obligations payable to the Exit Credit Facility Administrative Agent and
the collateral agent, if any, under the Exit Credit Facility;

     

    Second,
to the Pro Rata payment of (i) the Tranche A Notes in the following order of
priority:  (A) accrued and unpaid interest, (B) principal amount
outstanding, and (C) any other obligation payable in respect of the Tranche A
Notes and (ii) to the extent that the Working Capital Loans are subscribed by at
least one First Lien Loan Lender, the Working Capital Loans in the following
order of priority:  (A) accrued and unpaid interest, (B) principal
amount outstanding, (C) premium in respect of the principal amount, and (D) any
other obligation payable in respect of the Working Capital
Loans;

    
      
         

      

      
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    Third, to
the extent that the Working Capital Loans are subscribed exclusively by the
Second Lien Loan Lenders, to the payment of all fees, costs, expenses and other
obligations payable to the Exit Credit Facility Administrative Agent, and any
collateral agent under the Exit Credit Facility;

     

    Fourth,
to the extent that the Working Capital Loans are subscribed exclusively by the
Second Lien Loan Lenders, to the payment of the Working Capital Loans in the
following order of priority:  (i) accrued and unpaid interest, (ii)
principal amount outstanding, (iii) premium in respect of the principal amount,
and (iv) any other obligation payable in respect of the Working Capital Loans;
and

     

    Fifth, to
the payment of the Tranche B Notes in the following order of
priority:  (i) accrued PIK Interest not yet capitalized and added to
the principal, (ii) principal amount outstanding (including capitalized and
added PIK Interest), and (iii) any other obligation payable in respect of the
Tranche B Notes.

     

    
      	
               
      

            	
              26.

            	
              “Change of Control”
      Provisions.

            

    

     

    Notwithstanding
anything to the contrary that may be contained in the Plan or the Confirmation
Order, any insurance policy, any of the Credit Facilities, the NW Bank
Agreements, any Executory Contract, or other contract or agreement to
which either of the Debtors is a party, the transactions to be consummated
in accordance with the Plan will not create, or be deemed to create, any claim
or right in connection therewith, upon a “Change of Control” or similar
term, as such term may be defined or utilized in any of the Credit
Facilities, the NW Bank Agreements, or in any Executory Contract, contract, or
agreement to which either of the Debtors is a party; provided, however, that to the
extent the Management Transition Services Agreements are not entered into by,
and binding upon, the Debtors and/or the Reorganized Debtors, the
Change-in-Control Agreements with Rebecca Abbott, Jeffrey Deneau, Neil Smith,
John Hunter, and Barbara  Lawson will not be affected, modified, or in
any way impaired by Section 6.36 of the Plan.

     

    D.           Other
Provisions of the Plan.

     

    
      	
               
      

            	
              1.

            	
              Executory
      Contracts.

            

    

     

    The
Bankruptcy Code gives the Debtors the power, after the commencement of these
Cases, subject to the approval of the Bankruptcy Court, to assume or reject
executory contracts and unexpired leases.  Generally, an “executory
contract” is a contract (including unexpired leases) under which material
performance (other than the payment of money) is still due by each
party.  In this context, “assumption” of an executory contract means,
among other things, that the Debtors re-affirm their obligations under the
relevant lease or contract and cure all monetary defaults
thereunder.

    
      
         

      

      
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    It is the
intention of the Debtors that as of the Confirmation Date, but subject to the
occurrence of the Effective Date, all of the Debtors’ Executory Contracts
(including, without limitation, those Executory Contracts identified as “to be
assumed” on the list attached as Exhibit D to this Disclosure Statement, as such
list may be revised and included in the Plan Supplement or otherwise) will be
deemed assumed by the applicable Debtors and retained by the applicable
Reorganized Debtors in accordance with the provisions and requirements of
Bankruptcy Code §§ 365 and 1123, except those Executory Contracts that (i) have
previously been rejected by an order of the Bankruptcy Court, (ii) are the
subject of a motion to reject pending on the Confirmation Date, [(iii) are
identified as “to be rejected” on the list attached as Exhibit E to the
Disclosure Statement (as such list may be revised and included in the Plan
Supplement or otherwise)], or (iv) are otherwise rejected pursuant to the terms
of the Plan.  Rejection of the Executory Contracts at issue in clauses
(iii) and (iv) in the immediately preceding sentence will be effective as of the
Confirmation Date, subject to the occurrence of the Effective
Date.  Entry of the Confirmation Order by the Bankruptcy Court will
constitute approval of such assumptions [and rejections (as applicable)]
pursuant to Bankruptcy Code §§ 365(a) and 1123, subject to the occurrence of the
Effective Date.  The listing of a document on [either] Exhibit D [or
Exhibit E] to the Disclosure Statement (as [either] such list may be revised and
included in the Plan Supplement or other otherwise) will not constitute an
admission by the Debtors that such document is an executory contract or
unexpired lease or that the Debtors have any liability
thereunder.  Each Executory Contract assumed pursuant to Article VII
of the Plan will revest in and be fully enforceable by the respective
Reorganized Debtor in accordance with its terms, except as may be modified by
(i) the provisions of the Plan, (ii) the Confirmation Order or any other
applicable order of the Bankruptcy Court approving and authorizing its
assumption, or (iii) applicable federal law.  The Debtors will retain
the right at all times prior to the Effective Date to (a) assume any additional
or other Executory Contract(s) not specifically identified on the list thereof
attached as Exhibit D to the Disclosure Statement (or as such list may be
revised and included in the Plan Supplement or otherwise) as “to be assumed”
[(including, without limitation, any Executory Contracts currently identified on
Exhibit E to this Disclosure Statement as “to be rejected”)], or (b) reject any
additional or other Executory Contract(s) [not specifically identified on the
list thereof attached as Exhibit E to this Disclosure Statement (or as such list
may be revised and included in the Plan Supplement or otherwise) as “to be
rejected”] (including, without limitation, any Executory Contracts currently
identified on Exhibit D to this Disclosure Statement as “to be assumed”), in
each case upon providing notice to the non-Debtor party
thereto.  Without limiting the effect of Section 7.1 of the Plan,
Exhibit[s] D [and E] to this Disclosure Statement contain schedules of all known
Executory Contracts currently anticipated to be either assumed [or rejected]
under the Plan, respectively (as such schedules may be revised and included in
the Plan Supplement or otherwise), subject to the Debtors’ right to determine at
any time subsequently, on or prior to the Effective Date, including, without
limitation, as may be set forth in the Plan Supplement, to either assume or
reject any Executory Contracts or to include additional Executory Contracts to
be either [(a)] assumed under the Plan [or (b) rejected under the Plan], in each
case upon providing notice to the non-Debtor party thereto.

    
      
         

      

      
        81

        
          

        

      

      
         

      

    

    Any
monetary amounts by which each Executory Contract to be assumed pursuant to the
Plan is in default will be satisfied, pursuant to Bankruptcy Code § 365(b)(1),
by payment of the default amount (as such amount has been agreed upon by the
Reorganized Debtors or, in the event of a dispute regarding such default amount,
as such amount has been determined by an order of the Bankruptcy Court) in Cash
by the latest of (i) the Effective Date (or as soon thereafter as is
practicable), (ii) in the event of a dispute regarding the default amount,
within 30 days of the entry of an order of the Bankruptcy Court establishing
such default amount, (iii) the date of an order of the Bankruptcy Court (or as
soon thereafter as is practicable) approving and authorizing the assumption or
assignment of an Executory Contract not otherwise assumed [or rejected] pursuant
to the terms of the Plan, or (iv) on such other terms as the parties to such
Executory Contracts may otherwise agree.  Notwithstanding the
foregoing, in the event of a dispute regarding:  (1) the amount of any
cure payments, (2) the ability of the Reorganized Debtors to provide “adequate
assurance of future performance” (within the meaning of Bankruptcy Code § 365)
under the contract or lease to be assumed, or (3) any other matter pertaining to
assumption (each an “Assumption Dispute”), the cure payments required by
Bankruptcy Code § 365(b)(1) will be made following the entry of a Final Order
resolving the Assumption Dispute and approving the assumption; provided, however, that (a) in
the event the Bankruptcy Court determines that the actual cure payment owed to a
particular non-Debtor party to an Executory Contract exceeds the proposed cure
amount as set forth in the notice to be provided by the Debtors pursuant to
Section 7.3 of the Plan and as set forth on Exhibit D to this Disclosure
Statement or (b) the Debtors and the applicable non-Debtor party involved in any
Assumption Dispute cannot otherwise consensually resolve such Assumption Dispute
prior to the Effective Date, the Debtors may reject the Executory Contract at
issue pursuant to Bankruptcy Code § 365 rather than paying the disputed cure
amount, by presenting a proposed order to the Bankruptcy Court for such
rejection, without any other or further notice.  In the event any
Executory Contract is so rejected, the non-Debtor party thereto will be entitled
to file a Proof of Claim pursuant to Plan Section 7.4, which Claim will be
classified pursuant to Plan Section 7.5, but will not be entitled to any other
or further Claim or relief from either of the Debtors or the Reorganized
Debtors.

     

    The
Debtors will provide notice to the non-Debtor party to any known Executory
Contract to be assumed of (i) the proposed default amount owed (if any) under
the applicable Executory Contract and (ii) the last date by which such
non-Debtor party may file an objection or other response with respect to such
proposed default amount.  Any non-Debtor party that fails to
object or otherwise respond in a timely manner to such notice of the proposed
default amount owed will be deemed to have consented to such proposed amount and
to the proposed assumption by the Debtors of the applicable Executory Contract,
and may not receive any other or additional distribution or consideration from
the Debtors, the Estates, the Reorganized Debtors, or the Assets, or otherwise
seek recourse against, the Debtors, the Estates, the Reorganized Debtors, or any
of the Assets that are to be distributed under the terms of the Plan, beyond
such proposed amount owed.

     

    [Each
Person who is a party to any Executory Contract rejected under and pursuant to
Article VII of the Plan will be entitled to file, not later than 30 days after
the entry of the Confirmation Order (the “Plan Rejection Bar Date”), a Proof of
Claim against the applicable Debtor for alleged Rejection Claims.  If
no such Proof of Claim for a Rejection Claim is timely filed against the
applicable Debtor, any such Claim will be forever barred and will not be
enforceable against the Debtors, the Reorganized Debtors, or their respective
Estates or Assets.  Objections to any such Proof of Claim must be
filed not later than 90 days after such Proof of Claim is filed (subject to any
potential further extensions of such date as so ordered and approved by the
Bankruptcy Court), and the Bankruptcy Court will decide any such
objections.  Distributions (if any) in respect of such Claims
(consistent with the distributions to be received by Holders of other Claims in
the Class into which such Claims fall, as determined by Section 7.5 of the Plan)
will be made not earlier than the later of (a) 30 days after the expiration of
the 90-day period (as such period may be extended by order of the Bankruptcy
Court) for filing an objection in respect of any Proof of Claim filed pursuant
to Plan Section 7.4 and (b) 30 days after the Claim has been Allowed by a Final
Order of the Bankruptcy Court, provided that no such distribution will be made
before the Effective Date.]

    
      
         

      

      
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    [Notwithstanding
anything to the contrary in the Plan, the Plan Rejection Bar Date will apply
only to Rejection Claims with respect to those Executory Contracts that are to
be rejected under and pursuant to the Plan.  Any Holder of a Rejection
Claim for an Executory Contract that is not rejected pursuant to the Plan, but
whose Rejection Claim instead arises under an Executory Contract that either has
been rejected by another order of the Bankruptcy Court or is the subject of a
separate motion to reject pending on the Confirmation Date, must file a Proof of
Claim for such Rejection Claim by the date provided in any order relating to
such Rejection Claim.]

     

    Except as
otherwise provided under the Plan, any Rejection Claims (a) against Aurora will
be treated as Class 3A Claims and (b) against HPPC will be treated as Class
3B Claims, in each instance to the extent they are Allowed Claims.

     

    On the
Effective Date, in accordance with Section 6.28 of the Plan, any Allowed
Secondary Liability Claim arising from or related to either Debtor’s joint or
several liability for the obligations under or with respect to:  (a)
any Executory Contract that is being assumed or deemed assumed pursuant to
Bankruptcy Code § 365 by the other Debtor or Reorganized Debtor or (b) a
Reinstated Claim will be Reinstated.  Accordingly, such Allowed
Secondary Liability Claims will survive and be unaffected by the entry of the
Confirmation Order.

     

    
      	
               
      

            	
              2.

            	
              Insurance
      Policies.

            

    

     

    All
insurance policies of the Debtors (including, without limitation, the Directors
& Officers Liability Insurance Policies) providing coverage to the Debtors
and/or the Debtors’ current or former directors, officers, stockholders,
agents, employees, representatives, predecessors, and others for conduct in
connection in any way with the Debtors, their assets, liabilities, and/or
operations, to the extent such policies are Executory Contracts, will be deemed
assumed by the applicable Debtors as of the Confirmation Date.  Entry
of the Confirmation Order by the Bankruptcy Court will constitute approval of
such assumptions pursuant to Bankruptcy Code §§ 365 and 1123 or
otherwise.  Each insurance policy assumed pursuant
to  Article VII of the Plan will revest in, and be fully enforceable
by, the respective Reorganized Debtor in accordance with its terms, except as
may be modified by (i) the provisions of the Plan, (ii) any order of the
Bankruptcy Court approving and authorizing its assumption, or (iii) applicable
federal law.

     

    Notwithstanding
anything provided in the Plan to the contrary, the Plan will not be deemed in
any way to diminish or impair the enforceability of any insurance policies that
may cover claims against either of the Debtors and/or the Debtors’ current or
former directors, officers, stockholders, agents, employees, representatives,
predecessors or any other Person (including, without limitation, the Directors
& Officers Liability Insurance Policies).  Any failure by the
Debtors to list any particular insurance policy on any schedule of Executory
Contracts to be assumed under the Plan the Debtors may file in these Cases
(either contained in this Disclosure Statement, including, without limitation,
Exhibit D hereto, the Plan Supplement, or otherwise) will not in any way impair
the Debtors’ ability to assume such policy, and instead, any and all such
policies will still be assumed in accordance with Plan Section
7.7.

    
      
         

      

      
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              3.

            	
              Existing Stock Option
      Plans.

            

    

     

    Subject
to the Plan’s becoming effective on the Effective Date pursuant to Plan Section
8.2, the Existing Stock Option Plans will not be assumed by Reorganized Aurora
on the Effective Date, but will instead be cancelled and deemed terminated and
of no force and effect as of the Effective Date.

     

    
      	
               
      

            	
              4.

            	
              Oil and Gas
      Leases.

            

    

     

    Notwithstanding
any other provision of the Plan, the Debtors' oil and gas leases will not
constitute nor be considered executory contracts or unexpired leases under
Bankruptcy Code §§ 365 or 1123 for any purpose under the Plan or otherwise in
connection with these Cases.  Any Claims asserted under these oil and
gas leases that arose as of the Petition Date will constitute Class 3A Claims,
and any such Claims that arose after the Petition Date will constitute
Administrative Claims, and in each instance will be subject to all rights,
defenses, and potential disputes and objections of the Debtors with respect
thereto.

     

    
      	
               
      

            	
              5.

            	
              Executory Contracts Entered
      Into After the Petition Date.

            

    

     

    Executory
Contracts entered into after the Petition Date by either Debtor (including the
Management Transition Services Agreements) will be performed by the Debtor or
the Reorganized Debtor liable thereunder in accordance with the terms and
subject to the conditions of such Executory Contract(s) in the ordinary course
of its business.  Accordingly, such Executory Contracts will survive
and remain unaffected by entry of the Confirmation Order.

     

    
      	
               
      

            	
              6.

            	
              Further Actions.

            

    

     

    The
Debtors and the Reorganized Debtors will be authorized to execute, deliver,
file, or record such documents, contracts, instruments, certificates, releases,
and other agreements and to take such other action as may be reasonably
necessary or appropriate to effectuate and further evidence the terms and
conditions of the Plan, any Plan Document, the transactions contemplated
therein, the Management and Director Equity Plan, the Registration Rights
Agreement, any Exit Credit Facility, or any notes or guarantee issued in
connection therewith.

     

    
      	
               
      

            	
              7.

            	
              Modification and Reservation of
      Rights in the Event of Nonacceptance of the
  Plan.

            

    

     

    Under the
Plan, the Debtors expressly reserve the right to request that the Bankruptcy
Court confirm the Plan over the objection of any impaired Class or Interest in
accordance with the applicable provisions of Bankruptcy Code §
1129(b).  In the event that any impaired Class or Classes of Allowed
Claims does not accept the Plan, upon the written request of the Debtors filed
with the Bankruptcy Court, the Plan will be modified, revised, and amended to
provide such treatment as set forth in such request, to ensure that the Plan
does not discriminate unfairly, and is fair and equitable, with respect to the
Classes rejecting the Plan, and, in particular, to provide the treatment
necessary to meet the requirements of Bankruptcy Code § 1129(a) and (b) with
respect to (i) the rejecting Classes and (ii) any other Classes adversely
affected by the modifications caused by Article X of the Plan. In
particular, the treatment of any rejecting Classes or adversely affected Classes
may be modified and amended from that set forth in Article V of the Plan, even
if less favorable, to the minimum treatment necessary to meet the requirements
of Bankruptcy Code § 1129(a) and (b).  These modifications may
include, but will not be limited to, cancellation of all amounts otherwise
payable under the Plan to the rejecting Classes and to any junior Classes
affected thereby (even if such Classes previously accepted the Plan) consistent
with Bankruptcy Code § 1129(b)(2)(B)(ii) and (C)(ii).

    
      
         

      

      
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              8.

            	
              Modification of the Plan Prior
      to or After the Entry of the Confirmation
  Order.

            

    

     

    The
Debtors reserve the right to alter, amend, or modify the Plan prior to or after
the entry of the Confirmation Order.  After the entry of the
Confirmation Order, the Debtors or the Reorganized Debtors, as the case may be,
upon order of the Bankruptcy Court, may amend or modify the Plan in accordance
with Bankruptcy Code § 1127.

     

    
      	
               
      

            	
              9.

            	
              Revocation or Withdrawal of the
      Plan.

            

    

     

    The
Debtors have the right to revoke or withdraw the Plan prior to the Confirmation
Date.  If the Debtors do so revoke or withdraw the Plan, then the Plan
will be null and void and, in such event, nothing contained therein will be
deemed to (a) constitute a waiver or release of any Claims by or against, or any
Interests in, the Debtors or any other Person or (b) prejudice in any manner the
rights of the Debtors or any Person in any further proceedings involving either
of the Debtors.

     

    
      	
               
      

            	
              10.

            	
              Substantive Consolidation of
      the Debtors.

            

    

     

    Although
the Debtors have not, as of the date of the filing of this Disclosure Statement
sought such relief, the Debtors reserve the right to seek, and only upon the
consent of the Administrative Agents, the entry of an order of the Bankruptcy
Court providing for the substantive consolidation of the Debtors for the purpose
of implementing the Plan, including for purposes of voting, confirmation, and
distributions to be made under the Plan, subject to the right of any party in
interest to object to such relief.

     

    E.           Retention
of Jurisdiction.

     

    
      	
               
      

            	
              1.

            	
              Claims and
      Actions.

            

    

     

    Following
the Effective Date, the Bankruptcy Court will retain such jurisdiction over
these Cases as is legally permissible, including, without limitation, such
jurisdiction as is necessary to ensure that the intents and purposes of the Plan
are carried out.  The Bankruptcy Court will also expressly retain
jurisdiction:  (a) to hear and determine all Claims against, or
Interests in, either of the Debtors; and (b) to enforce all Causes of Action
that may exist on behalf of either of the Debtors that are not otherwise waived
or released under the Plan.

    
      
         

      

      
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              2.

            	
              Retention of Additional
      Jurisdiction.

            

    

     

    Following
the Effective Date, the Bankruptcy Court will also retain jurisdiction for
the following additional purposes:

     

    
      	
               
      

            	
              (a)

            	
              the
      classification of Claims and Interests, the re-examination of
      Claims that have been Allowed, and the dispositions of such
      objections as may be filed to any Claims or Interests, including
      Bankruptcy Code § 502(c) proceedings for estimation of
    Claims;

            

    

     

    
      	
               
      

            	
              (b)

            	
              to
      decide all questions and disputes regarding title to the respective Assets
      of the Debtors, all Causes of Action, controversies, disputes, or
      conflicts, whether or not subject to any pending action as of the
      Effective Date, between either of the Debtors and any other party,
      including, without limitation, any right to recover assets pursuant to the
      provisions of the Bankruptcy Code;

            

    

     

    
      	
               
      

            	
              (c)

            	
              to
      modify the Plan after the Effective Date in accordance with the terms of
      the Plan and pursuant to the Bankruptcy Code and the Bankruptcy
      Rules;

            

    

     

    
      	
               
      

            	
              (d)

            	
              to
      enforce and interpret the terms and conditions of the
  Plan;

            

    

     

    
      	
               
      

            	
              (e)

            	
              to
      enter such orders, including, but not limited to, such future injunctions
      as are necessary to enforce the respective title, rights, and powers of
      the Debtors, and to impose such limitations, restrictions, terms, and
      conditions on such title, rights, and powers as the Bankruptcy Court may
      deem necessary;

            

    

     

    
      	
               
      

            	
              (f)

            	
              to
      enter an order closing these Cases;

            

    

     

    
      	
               
      

            	
              (g)

            	
              to
      correct any defect, cure any omission, or reconcile any inconsistency in
      the Plan or the Confirmation Order as may be necessary to implement the
      intents and purposes of the Plan;

            

    

     

    
      	
               
      

            	
              (h)

            	
              to
      decide any and all objections to the allowance of Claims or purported
      Liens, and to otherwise determine the amount of the NW Bank Secured Claim
      and the NW Bank Deficiency Claim in the event of any dispute with NW Bank
      with respect thereto;

            

    

     

    
      	
               
      

            	
              (i)

            	
              to
      determine any and all applications for allowances of compensation and
      reimbursement of expenses and the reasonableness of any fees and expenses
      authorized to be paid or reimbursed under the Bankruptcy Code or the
      Plan;

            

    

     

    
      	
               
      

            	
              (j)

            	
              to
      determine any applications or motions pending on the Effective Date for
      the rejection, assumption, or assignment of any Executory Contract and to
      hear and determine, and, if need be, to liquidate any and all Claims
      and/or disputes arising therefrom;

            

    

     

    
      
         

      

      
        86

        
          

        

      

      
         

      

    

    
      	
               
      

            	
              (k)

            	
              to
      determine any and all applications, adversary proceedings, and contested
      matters that may be pending on the Effective
  Date;

            

    

     

    
      	
               
      

            	
              (l)

            	
              to
      consider any modification of the Plan, whether or not the Plan has been
      substantially consummated, and to remedy any defect or omission or to
      reconcile any inconsistency in any order of the Bankruptcy Court, to the
      extent authorized by the Plan or the Bankruptcy
  Court;

            

    

     

    
      	
               
      

            	
              (m)

            	
              to
      determine all controversies, suits, and disputes that may arise in
      connection with the interpretation, enforcement, or consummation of the
      Plan or any Plan Document;

            

    

     

    
      	
               
      

            	
              (n)

            	
              to
      consider and act on the compromise and settlement of any Claim against or
      Cause of Action by or against either of the Debtors arising under or in
      connection with the Plan;

            

    

     

    
      	
               
      

            	
              (o)

            	
              to
      issue such orders in aid of execution of the Plan as may be authorized by
      Bankruptcy Code § 1142;

            

    

     

    
      	
               
      

            	
              (p)

            	
              to
      protect any Released Party against any Claims or Interests released
      pursuant to Article IX of the Plan;
and

            

    

     

    
      	
               
      

            	
              (q)

            	
              to
      determine such other matters or proceedings as may be provided for under
      Title 28 or any other title of the United States Code, the Bankruptcy
      Code, the Bankruptcy Rules, other applicable law, the Plan, or in any
      order or orders of the Bankruptcy Court, including, but not limited to,
      the Confirmation Order or any order that may arise in connection with the
      Plan or the Confirmation Order.

            

    

     

    
      
         

      

      
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    F.           Releases.

     

    
      	
               
      

            	
              1.

            	
              Releases by Holders of Claims
      and Interests.

            

    

     

    Except
as otherwise provided in the Plan, as of the Effective Date, each Non-Debtor
Releasing Party, in consideration of the obligations of the Debtors and the
Reorganized Debtors under the Plan and the Cash, the New Aurora Class A Common
Stock, the  New Aurora Preferred Stock, the Exit Credit Facility
(including the New Secured Notes and the Working Capital Loans Notes), the New
Warrants, and other contracts, instruments, releases, agreements, and documents
to be executed and delivered in connection with the Plan, and in consideration
of (i) the efforts of the Released Parties to facilitate the expeditious
reorganization of the Debtors and the implementation of the restructuring
contemplated by the Plan and (ii) certain of the Released Parties’ agreeing to
have their Employee Termination Claims treated in the manner set forth in
Section 6.29 of the Plan, will be deemed to have conclusively, absolutely,
unconditionally, irrevocably, and forever released and discharged the Released
Parties from any and all claims, obligations, rights, Causes of Action, or
liabilities (including, but not limited to, any claims arising out of, or
relating to, any alleged fiduciary or other duty; any alleged violation of any
federal or state securities law or any other law relating to creditors’ rights
generally; any of the Released Parties’ or the Non-Debtor Releasing
Parties’ ownership of any securities of either of the Debtors; or any derivative
claims asserted on behalf of a Debtor), whether liquidated or unliquidated,
fixed or contingent, matured or unmatured, known or unknown, foreseen or
unforeseen, existing or subsequently arising, in law, equity, or otherwise, that
such Non-Debtor Releasing Party ever had, now has, or may have that are based in
whole or in part on any act, omission, transaction, or occurrence from the
beginning of time through and including the Effective Date in any way relating
to the Debtors, these Cases and the commencement thereof, or the Plan; the
Disclosure Statement; the Plan Documents; the formulation, negotiation,
preparation, dissemination, implementation, and/or administration of the Plan,
the Disclosure Statement, and the Plan Documents; the confirmation and
consummation of the Plan; the subject matter of, or the transactions or events
giving rise to, any Claim or Interest of such Non-Debtor Releasing Party, any
security previously issued by either of the Debtors, and any and all claims
based upon or arising out of such actions or omissions will be forever and
completely waived and released by the Non-Debtor Releasing Parties; provided, however, Section
9.6(a) of the Plan will not release, and the Non-Debtor Releasing Parties do not
waive the right to enforce, the Debtors’ or the Reorganized Debtors’ duties,
obligations, covenants, and agreements under (a) the Plan, (b) any settlement
agreement approved by the Bankruptcy Court in these Cases, (c) the Assumed
Contracts, or (d) the Plan Documents to be delivered under the Plan; provided further, however, that the
release set forth in Section 9.6(a) of the Plan is in addition to the discharge
of Claims and termination of Interests provided in the Plan and under the
Confirmation Order and the Bankruptcy Code; and provided further, however, that nothing
in Section 9.6(a) of the Plan will be deemed to assert or imply any admission of
liability on the part of any of the Released Parties.

     

    The Plan
defines the “Non-Debtor Releasing Parties” as “[c]ollectively, each and every
Person that has held, holds, or may hold a Claim or Interest and that
receives a distribution under this Plan or has its Claim
Reinstated.”  The Plan defines the “Released Parties” as
“[c]ollectively, (i) the Debtors and the Reorganized Debtors; (ii) the First
Lien Loan Lenders, the Second Lien Loan Lenders, the DIP Facility Lenders, and
the Administrative Agents, solely in their respective capacities as such; (iii)
BNP Paribas, in its capacity as (A) sole lead arranger and sole bookrunner under
the First Lien Loan, the Second Lien Loan, and the DIP Facility and (B) issuing
bank under the First Lien Loan and the DIP Facility; (iv) the Creditors
Committee and the members thereof, solely in their respective capacities as
such; (v) the current and former directors, officers, stockholders,
professionals, and employees of (a) the Debtors and (b) the Reorganized Debtors;
(vi) with respect to each of the foregoing Persons, such Person’s predecessors,
successors, and assigns, and current and former directors, officers, employees,
stockholders, members, subsidiaries, affiliates, principals, agents, advisors,
financial advisors, attorneys, accountants, investment bankers, consultants,
underwriters, appraisers, representatives, and other professionals, in each case
in their respective capacities as such; and (vii) any Person claimed to be
liable derivatively through any Person referred to in clauses (i), (ii), (iii),
(iv), (v) or (vi) of this Section 1.128.”

    
      
         

      

      
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    All
Non-Debtor Releasing Parties will be forever precluded from asserting any of the
claims released pursuant to Section 9.6 of the Plan against any of the
Released Parties or any of the Released Parties’ respective assets; and to the
extent that any Non-Debtor Releasing Party receives monetary damages from any
Released Party on account of any claim released pursuant to Section 9.6 of
the Plan, such Non-Debtor Releasing Party as a result of the Plan will assign
all of its right, title, and interest in and to such recovery to the Released
Parties against whom such money is recovered.

     

    Notwithstanding
any provision of the Plan to the contrary, the releases contained in Plan
Section 9.6 will not be construed as, or operate as a release of, or limitation
on (i) any claims by the Non-Debtor Releasing Parties against the Released
Parties that do not relate to or involve the Debtors or these Cases, (ii)
any claims, obligations, rights, causes of action, or liabilities by the
Non-Debtor Releasing Parties against the Released Parties arising out of any
action or omission to the extent that such action or omission is determined in a
Final Order by a court of competent jurisdiction to have constituted willful
misconduct or fraud, or (iii) objections to Claims.

     

    
      	
               
      

            	
              2.

            	
              Release by the Debtor Releasing
      Parties.

            

    

     

    On
the Effective Date, pursuant to Bankruptcy Code § 1123(b), Bankruptcy Rule 9019,
or otherwise, and except as otherwise specifically provided in the Plan or in
the Plan Documents, the Debtor Releasing Parties, in consideration of the
obligations of the Debtors and the Reorganized Debtors under the Plan and the
Cash, New Aurora Class A Common Stock, the New Aurora Preferred Stock, the Exit
Credit Facility (including the New Secured Notes and the Working Capital Loans
Notes), the New Warrants, and other contracts, instruments, releases,
agreements, and documents to be executed and delivered in connection with the
Plan, and in consideration of (i) the efforts of the Released Parties to
facilitate the expeditious reorganization of the Debtors and the implementation
of the restructuring contemplated by the Plan and (ii) certain of the Released
Parties’ agreeing to have their Employee Termination Claims treated in the
manner set forth in Section 6.29 of the Plan, will be deemed to have
conclusively, absolutely, unconditionally, irrevocably, and forever released and
discharged the Released Parties from any and all claims, obligations, suits,
judgments, damages, demands, debts, rights, Causes of Action, and liabilities,
whether liquidated or unliquidated, fixed or contingent, matured or unmatured,
known or unknown, foreseen or unforeseen, then existing or hereafter arising, in
law, equity, or otherwise, that such Debtor Releasing Party ever had, now has,
or may have that are based in whole or in part on any act, omission,
transaction, or occurrence taking place on or prior to the Effective Date in any
way relating to the Debtors, these Cases and the Commencement thereof, or the
Plan; the Disclosure Statement; the Plan Documents; the formulation,
negotiation, preparation, dissemination, implementation, and/or administration
of the Plan, the Disclosure Statement, and the Plan Documents; the confirmation
and consummation of the Plan; the subject matter of, or the transactions or
events giving rise to, any Claim or Interest of such Debtor Releasing Party, or
any security previously issued by either of the Debtors.  The
immediately preceding sentence will not, however, apply to (i) any indebtedness
of any Person to either of the Debtors for money borrowed by such Person or any
other contractual obligation of any Person to either of the Debtors, or (ii) any
setoff or counterclaim that the Debtors may have or assert against any Person,
provided that the aggregate amount thereof may not exceed the aggregate amount
of any Claims held or asserted by such Person against the
Debtors.  Holders of Claims and Interests against either of the
Debtors will be enjoined from commencing or continuing any action, employment of
process, or act to collect, offset, or recover any such claim that could be
brought on behalf of or in the name of the Debtors.

    
      
         

      

      
        89

        
          

        

      

      
         

      

    

    The Plan
defines the “Debtor Parties” as “[c]ollectively, the Debtors, the Reorganized
Debtors, the Estates, and any Person seeking to exercise the rights of the
Estates, including, without limitation, any successor to the Debtors or any
Estate representative appointed or selected pursuant to Bankruptcy Code §
1123(b) or otherwise (including, without limitation, any Chapter 11 or Chapter 7
trustee appointed in either of these Cases), on their own behalf and on behalf
of all the Debtors’ respective Interest Holders and Creditors
derivatively.”  The Plan defines the “Debtor Releasing Parties” as
“[c]ollectively, the Debtor Parties and each of their respective current and
former directors, officers, employees, stockholders, members, principals,
subsidiaries, affiliates, predecessors, successors, and assigns.”

     

    
      	
               
      

            	
              3.

            	
              Injunction Related to
      Releases.

            

    

     

    The
Confirmation Order will be deemed to permanently enjoin the commencement or
prosecution by any Person, whether directly, derivatively, or otherwise, of any
claims, obligations, suits, judgments, damages, demands, debts, rights, Causes
of Action, or liabilities released pursuant to the Plan (including the releases
set forth in Article IX thereof).

     

    
      	
               
      

            	
              4.

            	
              Exculpation.

            

    

     

    No
Released Party will have or incur, and each Released Party is exculpated under
the Plan from, any liability to any Person for any act taken or not taken or any
omission in connection with, arising from or relating to these Cases (and the
commencement or administration thereof); the Disclosure Statement, the Plan, or
the formulation, negotiation, preparation, dissemination, implementation, or
administration of any of the foregoing documents; the solicitation of votes in
connection with Confirmation of the Plan; the Exit Credit Facility; the Plan
Documents; the Confirmation and/or consummation of the Plan; any contract,
instrument, release, or other agreement or document created or entered into in
connection with the Plan; any other act taken or omitted to be taken in
connection with, or in contemplation of, any of the restructuring or other
transactions contemplated by the Plan; and the property to be distributed or
otherwise transferred under the Plan; provided further, however, that nothing
in Plan Section 9.9 will release any entity from any claims, obligations,
rights, causes of action, or liabilities arising out of such entity’s fraud or
willful misconduct.  Each Released Party will be entitled reasonably
to rely upon the advice of counsel with respect to its duties and
responsibilities under the Plan, and will be fully protected in acting or
refraining from acting in accordance with such advice.

     

    G.           Risk
Factors.

     

    THE NEW
AURORA PREFERRED STOCK, THE NEW AURORA CLASS A COMMON STOCK, THE NEW AURORA
CLASS B COMMON STOCK, THE NEW SECURED NOTES, THE WORKING CAPITAL LOANS NOTES,
AND THE NEW WARRANTS TO BE ISSUED UNDER THE PLAN AND/OR THE EXIT CREDIT FACILITY
ARE SPECULATIVE SECURITIES AND INVOLVE A HIGH DEGREE OF
RISK.  CREDITORS SHOULD CAREFULLY REVIEW THE FOLLOWING FACTORS
TOGETHER WITH THE OTHER INFORMATION CONTAINED IN THIS DISCLOSURE STATEMENT PRIOR
TO VOTING ON THE PLAN.  THESE RISK FACTORS SHOULD NOT, HOWEVER, BE
REGARDED AS CONSTITUTING THE ONLY RISKS INVOLVED IN CONNECTION WITH THE PLAN AND
ITS IMPLEMENTATION.

    
      
         

      

      
        90

        
          

        

      

      
         

      

    

    
      	
               
      

            	
              1.

            	
              Ability to Service
      Debt.

            

    

     

    Based on
historical data and net cash provided by operating activities during recent
fiscal years, anticipated growth and business prospects, and management’s
operating strategy, the Debtors anticipate that the Reorganized Debtors should
be able to generate sufficient cash from operations to meet the Cash obligations
incurred pursuant to the Plan and the Plan Documents (including, without
limitation, the New Secured Notes and the Working Capital Loans
Notes).  If, however, the Reorganized Debtors are unable to generate
sufficient funds to meet such obligations, funds will have to be derived from
alternative sources such as equity financings, asset sales, additional
borrowings, and/or reductions in capital expenditures.  Unfavorable
conditions in the financial markets and the Debtors’ industry, restrictive
covenants contained in the new debt instruments, and/or various other factors
may limit the ability of the Reorganized Debtors successfully to undertake any
such actions, however, and no assurance can be given as to the availability of
feasible alternative sources of funds.  Any utilization of alternative
sources of funds may impair the competitive position of the Reorganized Debtors,
reduce their cash flows, or have other adverse consequences.

     

    
      	
               
      

            	
              2.

            	
              Projected Operating and
      Financial Results.

            

    

     

    The
Debtors have prepared the financial projections attached as Exhibit B
hereto.  The assumptions on which these projections are based,
however, are subject to significant uncertainties and, inevitably, some
assumptions will not materialize.  Also, unanticipated events and
circumstances beyond the Reorganized Debtors’ control may affect the actual
financial results.

     

    Neither
the Debtors nor the Reorganized Debtors make any representation as to the
accuracy of the projections or the Reorganized Debtors’ ability to achieve
projected results.  The actual results achieved could vary from the
projected results and the variations may be material.  It is urged
that all of the assumptions and other caveats regarding the projections set
forth on Exhibit B hereto be examined carefully in evaluating the
Plan.

     

    The
projections were not prepared with a view toward public disclosure or compliance
with the published guidelines of the SEC or the American Institute of Certified
Public Accountants regarding projections or forecasts.  The Debtors’
independent auditors have not examined the projections or compiled such analysis
and assume no responsibility therefor.

     

    
      	
               
      

            	
              3.

            	
              No Assurance of a Public Market
      of the New Aurora Common Stock, the New Aurora Preferred Stock, the New
      Secured Notes, the Working Capital Loans Notes, or the New
      Warrants.

            

    

     

    The New
Aurora Common Stock, the New Aurora Preferred Stock, the New Secured Notes, the
Working Capital Loans Notes, and the New Warrants are new securities for which
there is currently no trading market.  Subject to the terms of any
Registration Rights Agreement the Reorganized Debtors may enter into in the
future (if any), the New Aurora Common Stock, the New Aurora Preferred Stock,
the New Secured Notes, the Working Capital Loans Notes, and the New Warrants
will not be listed on an exchange or traded over the counter.  There
can be no assurance that a market for any of these securities will develop, or,
if such a market develops, whether such market would create liquidity or the
price at which the New Aurora Common Stock, the New Aurora Preferred Stock, the
New Secured Notes, the Working Capital Loans Notes, or the New Warrants may
trade.

    
      
         

      

      
        91

        
          

        

      

      
         

      

    

    In
addition, as described further herein, there will be certain restrictions on the
right to trade either the New Aurora Preferred Stock or the New Aurora Common
Stock for 25 months following the Effective Date.  Similarly, there
will be restrictions on the right to assign the New Secured Notes to any Person
or entity that is acting in the capacity of a “vulture fund.”

     

    
      	
               
      

            	
              4.

            	
              No Public
      Reporting.

            

    

     

    Aurora
currently files reports under Section 15(d) of the Securities Exchange Act of
1934, as amended (the “Exchange Act”), as a result of the registration of the
Old Aurora Common Stock under the Exchange Act.  On the Effective
Date, the Old Aurora Common Stock will be cancelled and will no longer be
outstanding.  Aurora will file a Form 15 with the SEC certifying
termination of registration with respect to the Old Aurora Common Stock, and
Aurora will file a Form 15 to terminate and/or suspend its obligations to file
reports with the SEC.

     

    Upon the
Effective Date, the Reorganized Debtors will not file reports with the SEC.  Unless and until
Reorganized Aurora becomes a “reporting company” pursuant to the Exchange Act,
files on a timely basis the reports required to be filed thereunder, and
otherwise complies with the provisions of Rule 144 and 144A, the holders of the
New Aurora Common Stock, the New Aurora Preferred Stock, or the New Warrants
will not be able to resell any such securities pursuant to Rule 144 or
144A.  Accordingly, no assurance can be given that a holder of the New
Aurora Common Stock, the New Aurora Preferred Stock, or the New Warrants will be
able to sell those securities in the future or as to the price at which such a
sale may occur.  In addition, as described further herein, there will
be restrictions on the right to trade either the New Aurora Preferred Stock or
the New Aurora Common Stock for 25 months following the Effective Date, as well
as on the right to assign any New Secured Notes to a “vulture
fund.”

     

    
      	
               
      

            	
              5.

            	
              Certain Tax
      Matters.

            

    

     

    The Plan
is subject to substantial uncertainties regarding the application of federal
income tax laws, state laws, and local laws to various transactions and events
contemplated therein.  See the section below entitled “Certain U.S.
Federal Income Tax Considerations.”

     

    
      	
               
      

            	
              6.

            	
              Consequences if the Plan is Not
      Confirmed or the Conditions to Effectiveness are Not
      Satisfied.

            

    

     

    There can
be no assurance that the Plan as proposed will be approved by the requisite
number of Holders or amounts of Claims or by the Bankruptcy
Court.  Similarly, in the event that any impaired Class or Classes
vote(s) to reject the Plan, there can be no assurance that the Debtors will be
able to obtain confirmation of the Plan under the Bankruptcy Code’s so-called
“cram-down” provisions of Bankruptcy Code § 1129(b).  See the section
below entitled “Confirmation Without Acceptance By All Impaired
Classes.”

    
      
         

      

      
        92

        
          

        

      

      
         

      

    

    In the
event the Plan is not confirmed within the exclusive time period allotted by the
Bankruptcy Code and the Bankruptcy Court’s orders for the Debtors to propose and
confirm the Plan, any other party-in-interest may propose a plan of
reorganization, and subsequent plans may be proposed and approved by the
requisite majorities and be confirmed by the Bankruptcy
Court.  Notwithstanding Bankruptcy Court approval, it is possible that
the Plan may not be consummated because of other external factors that may
adversely affect the Debtors and their business.

     

    Specifically,
even if the Debtors obtain the requisite acceptances to confirm the Plan and/or
the requirements for a “cram down” are met with respect to any Impaired Class
that has rejected the Plan, there can be no assurance that the Bankruptcy Court
will confirm the Plan.  Pursuant to Bankruptcy Code § 1128(b),
any party-in-interest, including the United States Trustee, any creditor, or any
equity holder, has the right to be heard by the Bankruptcy Court on any issue in
the Cases.  It is possible that such a party-in-interest could
challenge, among other things, the terms of the Plan or the adequacy of the time
period allotted for solicitation on the Plan for considering whether to accept
or to reject the Plan (the “Solicitation”).  Even if the Bankruptcy
Court were to determine that the Solicitation was proper, it could still decline
to confirm the Plan if it were to find that any statutory condition for
confirmation had not been met.  Bankruptcy Code § 1129 sets forth the
requirements for confirmation.  While the Debtors believe that the
Plan complies with all of the confirmation requirements, there can be no
assurance that the Bankruptcy Court will reach the same conclusion.  A
party-in-interest may also object to the classification or treatment of any
Claim or Interest and might succeed in persuading the Bankruptcy Court that the
classification or treatment of such Claim or Interest provided by the Plan is
improper.  In such event, it is the present intention of the Debtors
to modify the Plan to provide for whatever reasonable classification or
treatment may be required by the Bankruptcy Court for confirmation of the Plan
and to use the votes received pursuant to the Solicitation for the purpose of
obtaining the approvals of the affected Class or Classes.  However,
the reclassification mandated by the Bankruptcy Court might render such course
of action impossible, and the Debtors could then be forced to conduct a new
solicitation of acceptances of the Plan, as modified.

     

    The
confirmation and effectiveness of the Plan are also subject to certain
conditions.  See the section below entitled “Confirmation of the Plan
— Conditions to Effectiveness.”  There can be no assurance that these
conditions to confirmation and effectiveness of the Plan will be satisfied, or
if not satisfied, that the Debtors will waive such
conditions.  Therefore, even if the Plan is confirmed by the
Bankruptcy Court, there can be no assurance that it will subsequently be
consummated and the restructuring completed.

     

    Furthermore,
there can be no assurance that modifications of the Plan will not be required
for its confirmation, or that such modifications would not require
resolicitation of acceptances from one or more classes of impaired claims and
equity interests.

    
      
         

      

      
        93

        
          

        

      

      
         

      

    

    
      	
               
      

            	
              7.

            	
              Certain Restrictions on the
      Reorganized Debtors.

            

    

     

    Although
not yet entered into or documented as of the date hereof, any Exit Credit
Facility (and the Working Capital Loans Notes issued in connection therewith)
will likely contain certain restrictions on the operations of one or more of the
Reorganized Debtors, as would the New Secured Notes and the New Aurora Preferred
Stock.  Such restrictions in similar transactions typically include,
among other things, limitations on the ability of the applicable Reorganized
Debtor to incur additional indebtedness or liens beyond certain amounts, to make
dividend payments and other distributions with respect to its outstanding stock
under certain circumstance, and to enter into certain transactions with
affiliates or otherwise unless conditions are satisfied.  For example,
as described below in the section entitled “The New Aurora Preferred Stock,”
Reorganized Aurora  would be prohibited from engaging in a merger or
related transaction or incurring debt in excess of $500,000 without the prior
written approval of holders of at least 66 2/3% of the outstanding shares of New
Aurora Preferred Stock.

     

    No
assurance can be given that Reorganized Aurora will be able to obtain the
required consent of the Exit Credit Facility Lenders or the Holders of the New
Secured Notes and/or the New Aurora Preferred Stock in order to permit it to
take advantage of business opportunities or to respond to market conditions in
the future if such actions would be in violation of any such covenants contained
in any Exit Credit Facility (and the Working Capital Loans Notes issued in
connection therewith), the New Secured Notes and/or the New Aurora Preferred
Stock (as applicable).  In addition, it is typical in transactions
similar to any exit credit facility or new secured notes that a borrower/issuer
such as Reorganized Aurora would be required to achieve, maintain, or comply
with certain financial ratios and comply with other financial and operating
covenants that will depend in large part on the adequacy of its operating
results.  The ability of Reorganized Aurora to comply with such ratios
and covenants may be affected by events beyond its control and there can be no
assurance that it will be able to achieve, maintain, or comply with any
prescribed ratios or covenants in the Exit Credit Facility (and/or the Working
Capital Loans Notes issued in connection therewith), the New Secured Notes,
and/or the New Aurora Preferred Stock.

     

    
      	
               
      

            	
              8.

            	
              Risks Associated with the New
      Aurora Common Stock.

            

    

     

    The New
Aurora Class A Common Stock will be issued pursuant to the Plan, and the New
Aurora Class B Common Stock may be issued under the Management and
Director  Equity Plan, in each instance by Reorganized Aurora, a
company which will hold a portion of its assets in the stock of Reorganized HPPC
and their non-Debtor subsidiaries or affiliates.  It is expected that
some portion of the revenues and earnings of Reorganized Aurora will be
indirectly derived from these subsidiaries.  The right of Reorganized
Aurora to participate in any distribution of assets of any direct or indirect
subsidiary, including Reorganized HPPC and any non-Debtor subsidiary or
affiliate, upon such subsidiary’s or affiliate’s liquidation or reorganization
or otherwise, is necessarily subject to the prior claims of any creditors of
such subsidiary, except to the extent that claims of Reorganized Aurora as a
creditor of such subsidiary, if any, may be recognized.

     

    In
addition, Reorganized Aurora will have issued substantial secured debt (in the
form of the New Secured Notes and the Working Capital Loans Notes issued in
connection with the Exit Credit Facility), and will also have issued the New
Aurora Preferred Stock, each of which will be granted a higher priority than the
New Aurora Common Stock.  Also, the New Aurora Class A Common Stock
issued on the Effective Date will be subject to dilution on a pari passu basis with all
other holders of shares of New Aurora Class A Common Stock upon the issuance of
any shares of New Aurora Common Stock issuable upon the exercise of the New
Warrants, under the Management and Director Equity Plan, or
otherwise.

    
      
         

      

      
        94

        
          

        

      

      
         

      

    

    Additionally,
as set forth above, the Exit Credit Facility (including the Working Capital
Loans Notes issued in connection therewith), the New Secured Notes, and/or the
New Aurora Preferred Stock will impose certain restrictions on the payment of
cash dividends or other distributions by the applicable Reorganized Debtors on
its stock, including the New Aurora Common Stock.  Specifically, as
described further herein, until all shares of New Aurora Preferred Stock have
been fully redeemed in accordance with the terms of the Amended and Restated
Articles of Incorporation or have received aggregate dividends equal to the
aggregate liquidation preference plus all accrued and unpaid dividends thereon,
90% of the dividends to the equity security holders of Reorganized Aurora will
be allocated to the holders of the New Aurora Preferred Stock.  See
the section above entitled “Certain Restrictions on the Reorganized
Debtors.”

     

    
      	
               
      

            	
              9.

            	
              Securities
      Issuance.

            

    

     

    The
issuance of new securities involves adherence to certain securities law
regulations.  Although the Debtors believe the securities issued in
accordance with the Plan are exempt from these securities law requirements,
there can be no assurance that the Bankruptcy Court or any applicable regulatory
agency will decide that the relevant exemptions apply to these issuances. For a
more detailed discussion of the risks involved with the securities issuance and
the Debtors’ position on these issues, see the section below entitled
“Securities Law Issues.”

     

    
      	
               
      

            	
              10.

            	
              The Effect of Bankruptcy on the
      Debtors’ Business.

            

    

     

    The
Debtors have attempted to minimize the potential adverse effect of the filing of
these Cases upon the Debtors’ relationships with their employees, suppliers,
operators, lessors, and customers, by, among other things, filing a proposed
disclosure statement and Chapter 11 plan (which reflects an
agreement-in-principle with the Pre-Petition Secured Lenders) as closely as
possible to the Petition Date in the hopes of minimizing the time the Debtors
will spend in Chapter 11.  Nonetheless, the filing of these Cases by
the Debtors and the publicity attendant thereto might have adversely affected
the Debtors’ business and the businesses of any non-Debtor subsidiaries or
affiliates, especially because of the inability to pay certain
claims.  The Debtors are hopeful that relationships with their
customers, suppliers, operators, lessors, and employees have been maintained and
will not suffer further erosion if the Plan is confirmed and consummated in a
timely fashion.

     

    However,
adverse effects are likely to be experienced during the pendency of any
increasingly protracted bankruptcy cases.  If the Debtors remain in
Chapter 11 for a prolonged period, they could continue to operate their business
and manage their properties as debtors-in-possession, but they would remain
subject to the restrictions imposed by the Bankruptcy Code.  In light
of financing and other potential concerns, it is not certain the degree to which
the Debtors could survive as a going concern in protracted Chapter 11
cases.  The Debtors could have difficulty sustaining the high costs,
and the erosion of vendor, operators, supplier, lessor, and customer confidence
that may be caused if they remain in bankruptcy for an extended
period.  Ultimately, there could be no assurance that the Debtors (or,
if exclusivity were terminated, other parties-in-interest) would not be forced
to liquidate under Chapter 7.

     

    
      
        
        

      

      
        95

        
          

        

      

      
        
        

      

    

     

    
      	
               
      

            	
              11.

            	
              Confirmation of a Modified
      Plan.

            

    

     

    Although
the Debtors believe that each of the provisions of the Plan is appropriate and
legally valid in the context of these Cases, it is possible that one or more of
such provisions may be subject to potential challenge and that the Plan, as
confirmed, may differ in one or more material respects from the existing version
of the Plan.

     

    
      	
               
      

            	
              12.

            	
              Substantial Risks Inherent in
      the Debtors’ Business.

            

    

     

    
      	
               
      

            	
              (a)

            	
              The
      Debtors have a history of losses.

            

    

     

    The
Debtors reported a net loss for the three months ended March 31, 2009 and the
years ended December 31, 2008, 2007, and 2006.  There can be no
assurance that the Debtors or the Reorganized Debtors will be able to achieve
and maintain profitability.

     

    
      	
               
      

            	
              (b)

            	
              Natural
      gas prices are volatile.  A substantial decrease in natural gas
      prices would significantly affect the Debtors’ or the Reorganized Debtors’
      business and impede their growth.

            

    

     

    The
Debtors’ and the Reorganized Debtors’ revenue, profitability, and future rate of
growth are substantially dependent on their ability to find, develop, and
acquire gas reserves that are economically recoverable based on prevailing
prices of natural gas and oil.  Thus, the Debtors’ and the Reorganized
Debtors’ revenues, profitability, and future growth will depend upon prevailing
natural gas prices.  Prices also affect the amount of cash flow
available for capital expenditures and the Debtors’ and the Reorganized Debtors’
ability to borrow and raise additional capital.  A substantial or
extended decline in natural gas and oil prices could have a material adverse
effect on their financial position, results of operations, cash flows, access to
capital, and on the quantities of natural gas and oil that can be economically
produced.  Lower prices may also reduce the amount of natural gas that
the Debtors or the Reorganized Debtors can economically
produce.  Also, it is possible that prices will be low at the time
periods in which the wells are most productive, thereby reducing overall
returns.  It is also possible that prices will drop so low that
production will become uneconomical.  Ongoing production costs that
will continue include equipment maintenance, compression, and pumping
costs.  If production becomes uneconomical, the Debtors or the
Reorganized Debtors may decide to discontinue production until prices
improve.

     

    Prices
for natural gas fluctuate widely.  The prices for natural gas are
subject to a variety of factors beyond the Debtors’ and the Reorganized Debtors’
control, including, the level of consumer product demand; weather conditions and
fluctuating and seasonal demand; domestic and foreign governmental relations,
regulations and taxation; the price and availability of alternative fuels;
political conditions in oil and natural gas producing regions; the domestic and
foreign supply of oil and natural gas including U.S. inventories of natural gas
and oil reserves; speculative trading and other market uncertainty;
technological advances affecting energy consumption; impact of energy
conservation efforts; the cost, proximity and capacity of natural gas pipelines
and other transportation facilities; and overall domestic and global economic
conditions, all of which are beyond the Debtors’ control.

     

    
      
        
        

      

      
        96

        
          

        

      

      
        
        

      

    

     

    
      	
               
      

            	
              (c)

            	
              Failure
      to hedge the Debtors’ or the Reorganized Debtors’ production may result in
      losses.

            

    

     

    On
October 1, 2008, the Debtors received the Early Termination Notice for all their
natural gas derivatives due to their default on the First Lien Loan and the
Second Lien Loan.  The Debtors thus currently do not have the ability
to hedge their production due to their bank defaults and the lack of borrowing
base capacity to meet margin calls. By failing to hedge the Debtors’ or the
Reorganized Debtors’ production, they may be more adversely affected by declines
in natural gas prices than their competitors who are engaged in hedging
arrangements.

     

    
      	
               
      

            	
              (d)

            	
              Failure
      to develop reserves could adversely affect the Debtors’ or the Reorganized
      Debtors’ production and cash flows.

            

    

     

    The Debtors’ and the Reorganized
Debtors’ success depends upon their ability to find, develop, or acquire natural
gas reserves that are economically recoverable.  The Debtors and the
Reorganized Debtors will need to conduct successful exploration or development
activities, joint venture relationship, and/or acquire properties containing
proved reserves.  The business of exploring for, developing, or
acquiring reserves is capital intensive.  The Debtors and the
Reorganized Debtors may not be able to make the necessary capital investment to
expand their natural gas reserves from cash flows, and external sources of
capital may be limited or unavailable.  The Debtors’ and the
Reorganized Debtors’ drilling and joint venture activities may not result in
significant reserves, and the Debtors and the Reorganized Debtors may not have
continuing success drilling productive wells.  Exploratory drilling
involves more risk than development drilling because exploratory drilling is
designed to test formations in which proved reserves have not been
discovered.  Additionally, while the Debtors’ and the Reorganized
Debtors’ revenues may increase if prevailing gas prices increase significantly,
their finding costs for reserves also could increase, and the Debtors and the
Reorganized Debtors may not be able to finance additional exploration or
development activities.  Thus, the Debtors’ and the Reorganized Debtors’ future natural gas reserves and
production, and therefore,  their cash flow and income are highly
dependent on their success in efficiently developing and
exploiting their
current reserves and
economically finding or acquiring additional recoverable reserves. The
Debtors’ and the Reorganized Debtors’ ability to find and acquire additional
recoverable reserves to replace current and future production at acceptable
costs depends on their
generating sufficient cash
flow from operations and other sources of capital, including their joint venture partnerships, all of
which are subject to the
risks discussed elsewhere.

     

    
      	
               
      

            	
              (e)

            	
              Some
      of the Debtors’ undeveloped leasehold acreage is subject to leases that
      may expire in the near future.

            

    

     

    Leases
covering approximately 148,429 of the Debtors’ 651,389 net acres, or 23%, are
scheduled to expire on or before December 31, 2009.  However, the
Debtors expect only to allow approximately 45,000 net acres to expire in
2009.  An additional 72% of the Debtors’ and the Reorganized Debtors’
net acres are scheduled to expire in the years 2010 and 2011.  If the
Debtors or the Reorganized Debtors are unable or choose not to renew these
leases or any leases scheduled for expiration beyond December 31, 2009, they
will lose the right to develop the acreage that is covered by an expired lease
which would impair their ability to expand their reserves and
production.

     

    
      
        
        

      

      
        97

        
          

        

      

      
        
        

      

    

     

    
      	
               
      

            	
              (f)

            	
              Most
      of the Debtors’ current development activity and producing properties are
      located in Michigan and Indiana, making them and the Reorganized Debtors
      vulnerable to risks associated with operating in this
    region.

            

    

     

    The
Debtors’ current development activity is concentrated in Michigan and Indiana,
and their currently producing properties are located primarily in a six-county
area in Michigan.  As a result, the Debtors and the Reorganized
Debtors may be disproportionately exposed to the impact of drilling and other
delays or disruptions of production from these regions caused by weather
conditions, governmental regulation, lack of field infrastructure, or other
events which impact these areas.

     

    
      	
               
      

            	
              (g)

            	
              The
      Debtors’ potential drilling locations comprise an estimation of part of
      their future drilling plans over several years, making them and the
      Reorganized Debtors susceptible to uncertainties that could materially
      alter the occurrence or timing of their
  drilling.

            

    

     

    Upon or
around the Petition Date, the Debtors had over 3,700 net potential drilling
locations to be included in their future multi-year drilling activities on their
existing acreage.  These drilling locations represent a significant
part of the Debtors’ and the Reorganized Debtors’ growth
strategy.  The Debtors’ and the Reorganized Debtors’ ability to find
joint venture or farmout partners to drill and develop these locations depends
on a number of uncertainties, including the availability of capital,
construction of infrastructure, seasonal conditions, regulatory approvals,
natural gas prices, costs, and drilling results.  Because of these
uncertainties, the Debtors do not know whether they or the Restructured Debtors
will be able to find suitable joint venture or farmout partners, whether their
numerous potential drilling locations will ever be drilled, or whether natural
gas will ever be produced from these or any other potential drilling locations,
which could materially affect their business.

     

    
      	
               
      

            	
              (h)

            	
              The
      Debtors do not operate a substantial amount of their
      properties.

            

    

     

    The
Debtors conduct much of their oil and natural gas exploration, development, and
production activities in joint ventures or other arrangements with
others.  In some cases, the Debtors act as operator and retain
significant management control; in other cases, they have reserved only an
overriding royalty or other interest and have surrendered all management rights;
and in still other cases, they have reserved the right to participate in
management decisions, but do not have ultimate decision-making
authority.

     

    
      
        
        

      

      
        98

        
          

        

      

      
        
        

      

    

     

    As of the
Petition Date, the Debtors operated approximately 36% of their gross wells and
78% of their net wells.  The Debtors anticipate that in the future the
percentage of gross wells that the Debtors and the Reorganized Debtors operate
may decline. As a result of these varying levels of management control, for
those properties that the Debtors do not operate, they and the Reorganized
Debtors will have no control over: the number and location of wells to be
drilled; the timing of drilling and re-completing of wells; the field company
hired to drill and maintain the wells; the timing and amounts of production; the
approval of other participants in drilling wells; development and operating
costs; capital calls on working interest owners; and pipeline
nominations.

     

    These and
other aspects of the operation of the Debtors’ and the Reorganized Debtors’
properties and the success of their drilling and development activities will in
many cases be dependent on the expertise and financial resources of the Debtors’
and the Reorganized Debtors’ joint venture partners, third-party operators, and
other parties.

     

    
      	
               
      

            	
              (i)

            	
              The
      Debtors and the Reorganized Debtors may be unable to make acquisitions of
      producing properties or prospects or successfully integrate them into
      their operations.

            

    

     

    Acquisitions
of producing properties and undeveloped oil and natural gas leases have been an
essential part of the Debtors’ long-term growth strategy.  The Debtors
and the Reorganized Debtors may not be able to identify suitable acquisitions in
the future or to finance these acquisitions on favorable terms or at
all.  In addition, the Debtors and the Reorganized Debtors will
compete against other companies for acquisitions, many of whom have
substantially greater managerial and financial resources than the Debtors or the
Reorganized Debtors will likely have.

     

    The
successful acquisition of producing properties and undeveloped natural gas
leases requires an assessment of the properties’ potential natural gas reserves,
future natural gas prices, development costs, operating costs, potential
environmental and other liabilities and other factors beyond the Debtors’ and
the Reorganized Debtors’ control.  These assessments are necessarily
inexact and their accuracy inherently uncertain.  Such a review may
not reveal all existing or potential problems, nor will it necessarily permit
the Debtors or the Reorganized Debtors to become sufficiently familiar with the
properties to fully assess their merits and deficiencies.  Significant
acquisitions can change the nature of the Debtors’ and the Reorganized Debtors’
operations and business depending upon the character of the acquired properties,
which may be substantially different in operating and geological characteristics
or geographic location than existing properties.  The Debtors’ and the
Reorganized Debtors’ acquisitions may not be integrated successfully into their
operations and may not achieve desired profitability objectives.

     

    
      	
               
      

            	
              (j)

            	
              Much
      of the Debtors’ proved reserves are not yet generating production
      revenues.

            

    

     

    Of the
Debtors’ proved natural gas reserves as of the Petition Date, approximately 50%
are classified as proved developed producing, 3% are classified as proved
developed behind pipe, 16% are classified as proved developed non-producing, and
31% are classified as proved undeveloped.  Parties-in-interest herein
should be aware that the Debtors’ and the Reorganized Debtors’ ability to
convert proved reserves into revenues is subject to certain limitations,
including the following:

     

    
      
        
        

      

      
        99

        
          

        

      

      
        
        

      

    

     

    
      	
               
      

            	
              •

            	
              Reserves
      characterized as proved developed producing reserves may be producing
      predominantly water and generate little or no production
      revenue;

            

    

     

    
      	
               
      

            	
              •

            	
              Production
      revenues from estimated proved developed non-producing reserves will not
      be realized until some time in the future, after the Debtors and the
      Reorganized Debtors have installed supporting infrastructure or taken
      other necessary steps.  It will be necessary to incur additional
      capital expenditures to install this required infrastructure, and the
      Debtors are currently unable to access significant capital for these
      expenditures;

            

    

     

    
      	
               
      

            	
              •

            	
              Production
      revenues from estimated proved undeveloped reserves will not be realized
      until after such time, if ever, as the Debtors and the Reorganized Debtors
      make significant capital expenditures with respect to the development of
      such reserves, including expenditures to fund the cost of drilling wells,
      dewatering the wells, and building the supporting
      infrastructure; and

            

    

     

    
      	
               
      

            	
              •

            	
              The
      reserve data assumes that the Debtors and/or the Reorganized Debtors will
      make significant capital expenditures to develop their
      reserves.  Although the Debtors have prepared estimates of the
      costs associated with developing these reserves in accordance with
      industry standards, no assurance can be given that their estimates of
      capital expenditures will prove accurate, that their and the Reorganized
      Debtors’ financing sources will be sufficient to fully fund their planned
      development activities, or that development activities will be either
      successful or in accordance with their schedule.  The Debtors
      and the Reorganized Debtors cannot control the performance of their joint
      venture partners on whom the Debtors and the Reorganized Debtors will
      depend for development of a substantial number of properties in which they
      have an economic interest and which are included in their
      reserves.  Further, any significant decrease in oil and natural
      gas prices or any significant increase in the cost of development could
      result in a significant reduction in the number of wells
      drilled.  No assurance can be given that any wells will yield
      commercially viable quantities.

            

    

    

    
      	
               
      

            	
              (k)

            	
              The
      Debtors’ oil and natural gas reserve data are estimates based on
      assumptions that may be inaccurate and existing economic and operating
      conditions that may differ from future economic and operating
      conditions.

            

    

     

    Reservoir
engineering is a subjective and inexact process of estimating underground
accumulations of oil and natural gas that cannot be measured in an exact manner
and is based upon assumptions that may change from year to year and vary
considerably from actual results. Accordingly, reserve estimates may be subject
to downward or upward adjustment.  Actual production, revenue, and
expenditures with respect to the Debtors’ and the Reorganized Debtors’ reserves
will likely vary from estimates, and such variances may be
material.

     

    Examples
of items that may cause the Debtors’ estimates to be inaccurate include, but are
not limited to, the following:

     

    
      
        
        

      

      
        100

        
          

        

      

      
        
        

      

    

     

    
      	
               
      

            	
              •

            	
              The
      estimated discounted future net cash flows from proved reserves are based
      on prices and costs as of the date of the estimate, while actual future
      prices and costs may be materially higher or
  lower;

            

    

    

    
      	
               
      

            	
              •

            	
              Because
      the Debtors have limited historical production and operating cost data to
      draw upon, the estimated production volume and operating costs used to
      calculate their reserve values may be
  inaccurate;

            

    

    

    
      	
               
      

            	
              •

            	
              Actual
      future net cash flows also will be affected by factors such as the amount
      and timing of actual production, supply and demand for oil and natural
      gas, increases or decreases in consumption, and changes in governmental
      regulations or taxation;

            

    

    

    
      	
               
      

            	
              •

            	
              The
      reserve report for the Debtors’ Michigan Antrim and New Albany shale
      properties assumes that production will be generated from each well for a
      period of 50 years.  Because production is expected for
      such an extended period of time, the probability is enhanced that
      conditions at the time of production will vary materially from the current
      conditions used to calculate future net cash
  flows; 

            

    

    

    
      	
               
      

            	
              •

            	
              The
      10% discount factor, which is required by the Financial Accounting
      Standards Board in Statement of Financial Accounting Standards No. 69
      to be used in calculating discounted future net cash flows for reporting
      purposes, is not necessarily the most appropriate discount factor based on
      interest rates in effect from time to time and risks that will be
      associated with the Debtors’ and the Reorganized Debtors’ operations or
      the oil and natural gas industry in
general;

            

    

    

    
      	
               
      

            	
              •

            	
              The
      Debtors and the Reorganized Debtors may be unable to expend the capital
      resources required to achieve and maintain production within the time
      frame assumed in the calculation of revenues;
      and   

            

    

    

    
      	
               
      

            	
              •

            	
              Unanticipated
      regulatory problems not contemplated in the calculation of reserves may
      defer or impair production.

            

    

    

    
      	
               
      

            	
              (l)

            	
              Drilling
      for and producing natural gas are high-risk activities with many
      uncertainties.

            

    

     

    The
Debtors’ and the Reorganized Debtors’ drilling activities are subject to many
risks, including the risk that they will not discover commercially productive
reservoirs.  Drilling for natural gas can be uneconomic, not only from
dry holes, but also from productive wells that do not produce sufficient
revenues to be commercially viable.  In addition, the Debtors’ and the
Reorganized Debtors’ drilling and producing operations may be curtailed,
delayed, or canceled as a result of other factors, including:

     

    
      	
               
      

            	
               •

            	
              The
      high cost, shortages or delivery delays of equipment and
      services;

            

    

    

    
      	
               
      

            	
               •

            	
              Unexpected
      operational events and drilling
conditions;

            

    

    
      	
               
      

            	
               

            

    

    
      	
               
      

            	
               •

            	
              Adverse
      weather conditions, including flooding and
  tornados;

            

    

     

    
      
        
        

      

      
        101

        
          

        

      

      
        
        

      

    

     

    
      
      

    

    
      	
               
      

            	
               •

            	
              Facility
      or equipment malfunctions;

            

    

    
      	
               
      

            	
               

            

    

    
      	
               
      

            	
               •

            	
              Title
      problems;

            

    

    
      	
               
      

            	
               

            

    

    
      	
               
      

            	
               •

            	
              Pipeline
      ruptures or spills;

            

    

    
      	
               
      

            	
               

            

    

    
      	
               
      

            	
               •

            	
              Compliance
      with environmental and other governmental
  requirements;

            

    

    
      	
               
      

            	
               

            

    

    
      	
               
      

            	
               •

            	
              Unusual
      or unexpected geological
formations;

            

    

    
      	
               
      

            	
               

            

    

    
      	
               
      

            	
               •

            	
              Formations
      with abnormal pressures;

            

    

    
      	
               
      

            	
               

            

    

    
      	
               
      

            	
               •

            	
              Injury
      or loss of life;

            

    

    
      	
               
      

            	
               

            

    

    
      	
               
      

            	
               •

            	
              Environmental
      accidents such as gas leaks, ruptures or discharges of toxic gases, brine
      or well fluids into the environment, including potential groundwater
      contamination;

            

    

    
      	
               
      

            	
               

            

    

    
      	
               
      

            	
               •

            	
              Fires,
      blowouts, craterings, and explosions;
and

            

    

    
      	
               
      

            	
               

            

    

    
      	
               
      

            	
               •

            	
              Uncontrollable
      flows of natural gas or well
fluids.

            

    

    

    Any one
of these factors could reduce or delay the Debtors’ or the Reorganized Debtors’
receipt of production revenues, thereby reducing their earnings.  In
addition, any of these events can cause substantial losses, including personal
injury, or loss of life, damage to or destruction of property, natural resources
and equipment, pollution, environmental contamination, loss of wells, and
regulatory penalties.

     

    Although
the Debtors and the Reorganized Debtors will maintain insurance against various
losses and liabilities arising from their operations, insurance against all
operational risks is not available to them.  Additionally, the Debtors
and the Reorganized Debtors may elect not to obtain insurance if they believe
that the cost of available insurance is excessive relative to the perceived
risks presented.  Losses could, therefore, occur for uninsurable or
uninsured risks or in amounts in excess of existing insurance
coverage.  The occurrence of an event that is not fully covered by
insurance could reduce the results of operations.

     

    
      	
               
      

            	
              (m)

            	
              Drilling
      and production delays may occur.

            

    

     

    In order
to generate revenues from the sale of oil and natural gas production from new
wells, the Debtors and the Reorganized Debtors may need to complete significant
development activity.  Delay in receiving governmental permits,
adverse weather, natural disasters such as fire and flooding, a shortage of
labor or parts, and/or dewatering time frames may cause delays, as discussed
below.  These will result in delays in achieving and maintaining
revenues from these new wells.

     

    
      
        
        

      

      
        102

        
          

        

      

      
        
        

      

    

     

    Oil and
natural gas producers often compete for experienced and competent drilling,
completion, and facilities installation vendors and production
laborers.  The unavailability of experienced and competent vendors and
laborers may cause development and production delays.

     

    From time
to time, vendors of equipment needed for oil and natural gas drilling and
production become backlogged, forcing delays in development until suitable
equipment can be obtained.  Moreover, for each new well, before
drilling can commence, the Debtors and the Reorganized Debtors will have to
obtain a drilling permit from the state in which the well is
located.  The Debtors and the Reorganized Debtors will also have to
obtain a permit for each salt water disposal well.  It is possible
that for reasons outside of the Debtors’ or the Reorganized Debtors’ control,
the issuance of the required permits will be delayed, thereby delaying the time
at which production is achieved.

     

    Adverse
weather may also postpone any drilling or development activity, forcing delays
until more favorable weather conditions develop.  This is more likely
to occur during the winter and spring months, but can occur at other times of
the year.

     

    Different
natural gas reservoirs contain different amounts of water.  The actual
amount of time required for dewatering with respect to each well cannot be
predicted with accuracy.  The period of time when the volume of gas
that is produced is limited by the dewatering process may be extended, thereby
delaying revenue production.  A well producing too much, or potable,
water may have to be plugged.

     

    
      	
               
      

            	
              (n)

            	
              The
      Debtors and the Reorganized Debtors will not own any drilling
      equipment.

            

    

     

    Since the
Debtors and the Reorganized Debtors will not own any drilling equipment, they
are affected by competition for drilling rigs and the availability of related
equipment.  In the past, on occasion the oil and natural gas industry
has experienced shortages of drilling rigs, equipment, and personnel which has
delayed development drilling and other exploration activities and has caused
significant price increases.  The Debtors are unable to predict when
or if such shortages may again occur or how they would affect their and the
Reorganized Debtors’ development and exploration program.

     

    
      	
               
      

            	
              (o)

            	
              Production
      levels cannot be predicted with
certainty.

            

    

     

    Until a
well is drilled and has been in production for a number of months, the Debtors
or the Reorganized Debtors will not know what volume of production they can
expect to achieve from the well.  Even after a well has achieved its
full production capacity,  the Debtors or the Reorganized Debtors
cannot be certain how long the well will continue to produce or the production
decline that will occur over the life of the well.  Estimates as to
production volumes and production life are based on studies of similar wells (of
which there are relatively few in the New Albany play) and, therefore, are
speculative and not fully reliable.  As a result, the Debtors’ or the
Reorganized Debtors’ revenue budgets for producing wells may prove to be
inaccurate.

     

    
      
        
        

      

      
        103

        
          

        

      

      
        
        

      

    

     

    
      	
               
      

            	
              (p)

            	
              Pipeline
      capacity may be inadequate.

            

    

     

    Because
of the nature of natural gas development, there may be periods of time when
pipeline capacity is inadequate to meet the Debtors’ or the Reorganized Debtors’
gas transportation needs.  It is often the case that as new
development comes online, pipelines are close to or at capacity before new
pipelines are built.  During periods when pipeline capacity is
inadequate, the Debtors or the Reorganized Debtors may be forced to reduce
production or incur additional expense as existing production requires
additional compression to enter existing pipelines.

     

    
      	
               
      

            	
              (q)

            	
              The
      Debtors’ and the Reorganized Debtors’ reliance on third parties for
      gathering and distribution could curtail future exploration and production
      activities.

            

    

     

    The
marketability of the Debtors’ and the Reorganized Debtors’ production will
depend on the proximity of their reserves to, and the capacity of, third-party
facilities and services, including oil and natural gas gathering systems,
pipelines, trucking or terminal facilities, and processing
facilities.  The unavailability or insufficient capacity of these
facilities and services could force the Debtors or the Reorganized Debtors to
shut-in producing wells, delay the commencement of production, or discontinue
development plans for some of their properties, which would adversely affect
their financial condition and performance.

     

    
      	
               
      

            	
              (r)

            	
              There
      is a potential for increased costs.

            

    

     

    The oil
and natural gas industry has historically experienced periods of rapidly
increasing drilling and production costs, frequently during times of increased
drilling activities.  If significant cost increases occur with respect
to the Debtors’ or the Reorganized Debtors’ development activity, the Debtors or
the Reorganized Debtors may have to reduce the number of wells they drill, which
may adversely affect their financial performance.

     

    
      	
               
      

            	
              (s)

            	
              The
      Debtors and the Reorganized Debtors may incur compression difficulties and
      expense.

            

    

     

    As
production of natural gas increases, more compression is generally required to
compress the production into the pipeline.  As more compression is
required, production costs increase, primarily because more fuel is required in
the compression process.  Furthermore, because compression is a
mechanical process, a breakdown may occur that will cause the Debtors or the
Reorganized Debtors to be unable to deliver natural gas until repairs are
made.

     

    
      	
               
      

            	
              (t)

            	
              The
      Debtors’ or the Reorganized Debtors’ electricity sources may be
      unreliable, resulting in interference with
  production.

            

    

     

    The
Debtors have experienced a problem with periodic electricity outages,
particularly in the area of their Antrim wells.  Because the Debtors’
and the Reorganized Debtors’ pumps are powered by electricity, such outages can
reduce their production until each of the affected pumps is
restarted.

     

    
      
        
        

      

      
        104

        
          

        

      

      
        
        

      

    

     

    
      	
               
      

            	
              (u)

            	
              Equipment
      failures may reduce the Debtors’ or the Reorganized Debtors’
      production.

            

    

     

    The
Debtors have experienced significant production down time due to failed
equipment in their wells and production facilities.  There is no
assurance that the Debtors’ or the Reorganized Debtors’ well enhancement
programs will remediate this problem or that they will be able to retain the
services of experts who can improve the maintenance and repair of their wells
sufficiently to reduce down time.

     

    
      	
               
      

            	
              (v)

            	
              The
      Debtors or the Reorganized Debtors may not have good and marketable title
      to their properties.

            

    

     

    It is
customary in the oil and natural gas industry that upon acquiring an interest in
a non-producing property, only a preliminary title investigation is done at that
time and that a drilling title opinion is done prior to the initiation of
drilling, neither of which can substitute for a complete title
investigation.  The Debtors have followed this custom to date and they
and the Reorganized Debtors intend to continue to follow this custom in the
future.  Furthermore, title insurance is not available for mineral
leases, and the Debtors and the Reorganized Debtors will not obtain title
insurance or other guaranty or warranty of good title.  If the title
to the Debtors’ or the Reorganized Debtors’ prospects should prove to be
defective, the Debtors or the Reorganized Debtors could lose the costs that they
have incurred in their acquisition or incur substantial costs for curative title
work.

     

    
      	
               
      

            	
              (w)

            	
              Competition
      in the Debtors’ and the Reorganized Debtors’ industry is intense, and they
      are smaller and have a more limited operating history than most of their
      competitors.

            

    

     

    The
Debtors and the Reorganized Debtors will compete with major and independent oil
and natural gas companies for property acquisitions and for the equipment and
labor required to develop and operate these properties.  The Debtors’
and the Reorganized Debtors’ ability to explore for oil and natural gas
prospects and to acquire additional properties in the future will depend on
their ability to conduct operations, to evaluate and select suitable properties,
and to complete transactions in this highly competitive
environment.

     

    Most of
the Debtors’ and the Reorganized Debtors’ competitors have substantially greater
financial and other resources than the Debtors or the Reorganized Debtors will
have.  In addition, larger competitors may be able to absorb the
burden of any changes in federal, state, and local laws and regulations more
easily than the Debtors or the Reorganized Debtors can, which would adversely
affect their competitive position.  These competitors may be able to
pay more for exploratory prospects and productive oil and natural gas properties
and may be able to define, evaluate, bid for, and purchase a greater number of
properties and prospects than the Debtors or the Reorganized Debtors
can.

     

    
      
        
        

      

      
        105

        
          

        

      

      
        
        

      

    

     

    
      	
               
      

            	
              (x)

            	
              Oil
      and natural gas operations involve various operating
  risks.

            

    

     

    The oil
and natural gas business involves operating hazards, such as well blowouts,
craterings, explosions, uncontrollable flows of crude oil, natural gas or well
fluids, fires, formations with abnormal pressures, pipeline ruptures or spills,
pollution, releases of toxic gas, and other environmental hazards and
risks.  Personal injuries, damage to property, equipment, and natural
resources, reservoir damage, or loss of reserves may occur if such a catastrophe
occurs, any one of which could cause the Debtors or the Reorganized Debtors to
experience substantial losses.  In addition, the Debtors or the
Reorganized Debtors may be liable for environmental damage caused by previous
owners or operators of properties purchased or leased by them.

     

    Federal
and state regulation of oil and natural gas exploration, production, and
transportation, tax and energy policies, changes in supply and demand, and
general economic conditions all could adversely affect the Debtors’ ability to
produce and market their natural gas and crude oil. Production from natural gas
wells in many geographic areas of the United States has been curtailed or
shut-in for considerable periods of time due to a lack of market demand, and
such curtailments may continue for a considerable period of time in the
future.  There may be an excess supply of natural gas in areas where
the Debtors’ or the Reorganized Debtors’ operations will be
conducted.  If so, it is possible that there will be no market or a
very limited market for the Debtors’ or the Reorganized Debtors’
product.

     

    As a
result of operating hazards, regulatory risks, and other uninsured risks, the
Debtors or the Reorganized Debtors could incur substantial liabilities to third
parties or governmental entities, the payment of which could reduce or eliminate
funds available for exploration, development, or acquisitions.

     

    
      	
               
      

            	
              (y)

            	
              The
      Debtors or the Reorganized Debtors may lack insurance that could lower
      risks.

            

    

     

    The
Debtors have procured insurance policies for general liability,
property/pollution, well control, and director and officer liability in amounts
considered by management to be adequate, as well as a $20 million excess
liability umbrella policy.  Nonetheless, the policy limits may be
inadequate in the case of a catastrophic loss experienced by the Debtors or the
Restructured Debtors, and there are some risks that are not
insurable.  The Debtors have and the Restructured Debtors may have
only limited business interruption insurance.  An uninsured loss could
adversely affect the Debtors’ or the Reorganized Debtors’ financial
performance.

     

    
      	
               
      

            	
              (z)

            	
              The
      Debtors or the Reorganized Debtors may incur non-cash charges to their
      operations as a result of current and future financing
      transactions.

            

    

     

    Under
current accounting rules and requirements, the Debtors or the Reorganized
Debtors may incur additional non-cash charges to future operations beyond the
stated contractual interest payments required under their current and potential
future credit facilities.  While such charges are generally non-cash,
they would impact the Debtors’ and the Reorganized Debtors’ results of
operations and earnings per share and could be material.

     

    
      
        
        

      

      
        106

        
          

        

      

      
        
        

      

    

     

    
      	
               
      

            	
              (aa)

            	
              The
      Debtors or the Reorganized Debtors may be required under accounting rules
      to take write-downs, or may not be able to preserve the value of their net
      operating losses.

            

    

     

    Under
full cost accounting rules, capitalized costs of proved oil and gas properties
may not exceed the present value of estimated future net revenues from proved
reserves, discounted at 10%.  Application of the ceiling test
generally requires pricing future revenue at the unescalated prices in effect as
of the end of each fiscal quarter and requires a write-down for accounting
purposes if the ceiling is exceeded.  The Debtors recorded a ceiling
write-down of $78.5 million as of December 31, 2008 and a write-down of $53.6
million as of March 31, 2009.  The write-down of oil and gas
properties is not reversible at a later date.  Additional write-downs
in future years may be required if the ceiling is exceeded again.

     

    To the
extent the Plan results in cancellation of indebtedness income to the Debtors,
such income will not be taxable, but Aurora will be required to reduce its net
operating losses (“NOLs”) and NOL carryforwards (and certain other tax
attributes, such as tax basis) by the amount of such excluded
income.  The future utilization of any remaining NOLs and NOL
carryforwards may be severely limited to the extent Aurora experiences an
ownership change within the meaning of Section 382 of the Internal Revenue Code
of 1986, as amended (the “Tax Code”).  A special bankruptcy exception
to Section 382 of the Tax Code may ameliorate the effect of an ownership
change.  However, (a) there is no assurance that Aurora will be
eligible for such exception, (b) the benefits of such exception will effectively
be lost if Aurora experiences an ownership change prior to the consummation date
of the Plan and (c) even if the exception applies as of the consummation date of
the Plan, the benefits of the exception will be lost if Reorganized Aurora
experiences another ownership change within the following two
years.  See the discussion below under “Certain U.S. Federal Income
Tax Considerations” for more information.

     

    
      	
               
      

            	
              (bb)

            	
              The
      Debtors or the Reorganized Debtors face risks rising from potential
      material weaknesses in their internal control
  environment.

            

    

     

    The
Debtors’ management do not expect that their disclosure controls or their
internal audit controls can prevent all possible error or fraud.  A
control system, no matter how well conceived and operated, can provide only
reasonable, not absolute assurances that the objectives of the control system
are met.  Further, the design of a control system must reflect the
fact that there are resource constraints, and the benefits of controls must be
considered relative to their costs.  Because of the inherent
limitations on all control systems, no evaluation of controls can provide
absolute assurance that the Debtors or the Reorganized Debtors will have
detected all control issues and instances of fraud, if any.  These
inherent limitations include the realities that judgments in decision making can
be faulty and that breakdowns can occur because of error or
mistake.  Additionally, controls can be circumvented by the individual
acts of some persons, by collusion of two or more people or by management
override of the control.  The design of any system of controls also is
based in part upon certain assumptions about the likelihood of future events,
and there can be no assurances that any design will succeed in achieving its
stated goals under all potential future condition; over time, controls may be
inadequate because of changes in conditions, or the degree of compliance with
the policies or procedures may deteriorate.  Because of the inherent
limitations in a cost-effective control system, misstatements due to error or
fraud may occur and not be detected.

     

    
      
        
        

      

      
        107

        
          

        

      

      
        
        

      

    

     

    
      	
               
      

            	
              (cc)

            	
              Because
      the Debtors handle natural gas and oil, the Debtors or the Reorganized
      Debtors may incur significant costs and liabilities in the future
      resulting from a failure to comply with new or existing environmental
      requirements or an accidental release of regulated materials into the
      environment.

            

    

     

    The
operations of the Debtors’ and the Reorganized Debtors’ are subject to stringent
and complex federal, state, and local environmental laws and
regulations.  These include, for example:

     

    
      	
               
      

            	
              •

            	
              the
      federal Clean Air Act and comparable state laws and regulations that
      impose obligations related to air
emissions;

            

    

    
      	
               
      

            	
               

            

    

    
      	
               
      

            	
              •

            	
              the
      federal Clean Water Act and comparable state laws and regulations that
      impose obligations related to discharges of pollutants into regulated
      bodies of water;

            

    

    
      	
               
      

            	
               

            

    

    
      	
               
      

            	
              •

            	
              the
      federal Resource Conservation and Recovery Act (“RCRA”) and comparable
      state laws that impose requirements for the handling and disposal of
      waste, including produced waters, from the Debtors and the Reorganized
      Debtors facilities; and

            

    

    
      	
               
      

            	
               

            

    

    
      	
               
      

            	
              •

            	
              the
      federal Comprehensive Environmental Response, Compensation, and Liability
      Act of 1980 (“CERCLA”) and comparable state laws that regulate the cleanup
      of regulated materials that may have been released at or from properties
      currently or previously owned or operated by the Debtors or Reorganized
      Debtors, or locations to which they have sent waste for treatment or
      disposal.

            

    

    

    Failure
to comply with these laws and regulations may trigger a variety of
administrative, civil, and criminal enforcement measures, including the
assessment of monetary penalties, the imposition of remedial requirements, and
the issuance of orders enjoining future operations. Certain environmental
statutes, including CERCLA, and analogous state laws and regulations, impose
strict, and under certain circumstances joint and several, liability for costs
required to investigate and clean up sites where regulated materials have been
disposed of or otherwise released, and impose liability for natural resource
damages.  Moreover, it is not uncommon for neighboring landowners and
other third parties to file claims for personal injury and property damage
allegedly caused by the release of hazardous substances or other waste products
into the environment.

     

    There is
an inherent risk that the Debtors or the Reorganized Debtors may incur
environmental costs and liabilities due to the nature of their business and the
substances they handle.  For example, an accidental release from one
of the Debtors’ or the Reorganized Debtors’ wells could subject them to
substantial liabilities arising from environmental cleanup and restoration
costs, claims made by neighboring landowners and other third parties for
personal injury and property damage, and fines or penalties for related
violations of environmental laws or regulations.  Moreover, stricter
laws, regulations, or enforcement policies may be enacted or adopted that could
significantly increase the Debtors’ or the Reorganized Debtors’ compliance costs
and the cost of any remediation that may become necessary.  The
Debtors or the Reorganized Debtors may not be able to recover all or a material
portion of environmental costs under any applicable insurance policies, or from
other responsible parties.  See the section above entitled “Regulatory
Considerations.”

     

    
      
        
        

      

      
        108

        
          

        

      

      
        
        

      

    

     

    
      	
               
      

            	
              (dd)

            	
              The
      Debtors and the Reorganized Debtors will be subject to complex federal,
      state, and local laws and regulations that could adversely affect their
      business.

            

    

     

    Oil and
natural gas operations are subject to various federal, state, and local
government laws and regulations, which may be changed from time to time in
response to economic or political conditions.  Matters that are
typically regulated include:  discharge permits for drilling
operations; drilling bonds; reports concerning operations; spacing of wells;
unitization and pooling of properties; environmental protection; and
taxation.

     

    From time
to time, regulatory agencies have imposed price controls and limitations on
production by restricting the rate of flow of oil and natural gas wells below
actual production capacity to conserve supplies of natural gas and crude
oil.  The Debtors and the Reorganized Debtors will also be subject to
changing and extensive tax laws, the effects of which they cannot
predict.

     

    The
development, production, handling, storage, transportation, and disposal of
natural gas and crude oil, by-products and other substances and materials
produced or used in connection with oil and natural gas operations are subject
to laws and regulations primarily relating to protection of human health and the
environment.  The discharge of natural gas, crude oil, or pollutants
into the air, soil, or water may give rise to significant liabilities on the
Debtors’ or the Reorganized Debtors’ part to the government and third parties
and may result in the assessment of civil or criminal penalties or require them
to incur substantial costs of remediation.

     

    Legal and
tax requirements frequently are changed and subject to interpretation, and the
Debtors are unable to predict the ultimate cost of compliance with these
requirements or their effect on their or the Reorganized Debtors’
operations.  Existing laws or regulations, as currently interpreted or
reinterpreted in the future, could harm the Debtors’ or the Reorganized Debtors’
business, results of operations, and financial condition.

     

    IX.           CONFIRMATION
OF THE PLAN

     

    As
discussed further below, the Bankruptcy Court will determine at the Confirmation
Hearing whether the following requirements for confirmation, set forth in
Bankruptcy Code § 1129, have been satisfied:

     

    
      	
               
      

            	
              (a)

            	
              The
      Plan complies with the applicable provisions of the Bankruptcy
      Code.

            

    

     

    
      	
               
      

            	
              (b)

            	
              The
      Debtors have complied with the applicable provisions of the Bankruptcy
      Code.

            

    

     

    
      
        
        

      

      
        109

        
          

        

      

      
        
        

      

    

     

    
      	
               
      

            	
              (c)

            	
              The
      Plan has been proposed in good faith and not by any means forbidden by
      law.

            

    

     

    
      	
               
      

            	
              (d)

            	
              Any
      payment made or to be made by the Debtors or by a person issuing
      securities or acquiring property under the Plan, for services or for costs
      and expenses in, or in connection with, these Cases, or in connection with
      the Plan and incident to these Cases, has been approved by, or is subject
      to the approval of, the Bankruptcy Court as
  reasonable.

            

    

     

    
      	
               
      

            	
              (e)

            	
              The
      Debtors have disclosed (i) the identity and affiliations of (x) any
      individual proposed to serve, after confirmation of the Plan, as a
      director, manager, officer, or voting trustee (as applicable) of the
      Reorganized Debtors, (y) any affiliate of the Debtors participating in a
      joint plan with the Debtors, or (z) any successor to the Debtors under the
      Plan (and the appointment to, or continuance in, such office of such
      individual(s) is consistent with the interests of Creditors and Interest
      Holders and with public policy), and (ii) the identity of any insider that
      will be employed or retained by the Debtors and the nature of any
      compensation for such insider.

            

    

     

    
      	
               
      

            	
              (f)

            	
              With
      respect to each Class of Claims or Interests, each Impaired Creditor and
      Impaired Interest Holder either has accepted the Plan or will receive or
      retain under the Plan on account of the Claims or Interests held by such
      entity, property of a value, as of the Effective Date, that is not less
      than the amount that such entity would receive or retain if the Debtors
      were liquidated on such date under Chapter 7 of the Bankruptcy
      Code.  See the section below entitled “Best Interests
      Test.”

            

    

     

    
      	
               
      

            	
              (g)

            	
              The
      Plan provides that Allowed Administrative Claims and Allowed Priority
      Claims will be paid in full and that Allowed Tax Claims will receive on
      account of such Claims deferred Cash payments (a) of a value, as of
      the Effective Date, equal to the amount of such Allowed Tax Claim, (b)
      over a period not exceeding five years after the Petition Date, and (c) in
      a manner not less favorable than the treatment of the most favored
      nonpriority Claim provided for by the Plan, except to the extent that the
      Holder of any such Claim has agreed to less favorable
      treatment.

            

    

     

    
      	
               
      

            	
              (h)

            	
              If
      a Class of Claims is Impaired under the Plan, at least one Class of
      Impaired Claims has accepted the Plan, determined without including any
      acceptance of the Plan by insiders holding Claims in such
      Class.

            

    

     

    
      
        
        

      

      
        110

        
          

        

      

      
        
        

      

    

     

    
      	
               
      

            	
              (i)

            	
              Confirmation
      of the Plan is not likely to be followed by the liquidation, or the need
      for further financial reorganization, of the Debtors or any successor to
      the Debtors under the Plan, unless such liquidation or reorganization is
      proposed in the Plan.  See the Section IX.G below entitled
      “Feasibility Test.”

            

    

     

    
      	
               
      

            	
              (j)

            	
              The
      Plan provides for the continuation after the Effective Date of all retiree
      benefits, if any, at the level established pursuant to Bankruptcy Code §
      1114(e)(1)(B) or 1114(g) at any time prior to confirmation of the Plan for
      the duration of the period the Debtors have obligated themselves to
      provide such benefits.

            

    

     

    The
Debtors believe that all of the requirements of Bankruptcy Code § 1129 are
met.  Among other things, the Debtors believe that, upon receipt of
the votes required to confirm the Plan, the Plan and the Debtors will satisfy
and be in compliance with all the statutory requirements of Chapter
11.

     

    A.           Solicitation
of Votes.

     

    Any
Creditor in the Voting Classes (2A, 2B, 3A, or 3B) that is the Holder of an
Allowed Claim therein is entitled to vote on the Plan, unless such Claim has
otherwise been objected to or disallowed for voting purposes by the Bankruptcy
Court.  A vote may be disregarded if the Bankruptcy Court determines,
after notice and a hearing, that an acceptance or rejection was not solicited or
procured or made in good faith or in accordance with the provisions of the
Bankruptcy Code.  For a more complete description of voting procedures
and the record date for voting, see the section above entitled “Voting
Instructions.”

     

    B.           Confirmation
Hearing.

     

    The
Bankruptcy Code requires that the Bankruptcy Court hold a hearing on
Confirmation of the Plan after all Ballots have been cast.  The
Confirmation Hearing has been scheduled for __________ __, 2009 at __:__ _M.
(Prevailing Eastern Time).  At the Confirmation Hearing, the
Bankruptcy Court will (i) determine whether the Plan has been accepted by the
requisite majorities of each Voting Class, (ii) hear and decide all objections
to the Plan and to confirmation of the Plan, if any, (iii) determine whether the
Plan meets the requirements of the Bankruptcy Code, and (iv) confirm or not
confirm the Plan.  The Confirmation Hearing may be adjourned from time
to time by the Bankruptcy Court without further notice except for an
announcement of the adjournment made at the initial Confirmation Hearing or at
any subsequently scheduled Confirmation Hearing.

     

    
      
        
        

      

      
        111

        
          

        

      

      
        
        

      

    

     

    Any
Creditor, Interest Holder, or other party-in-interest that wishes to object to
Confirmation of the Plan must file, on or before _:_0 PM (Prevailing Eastern
Time) on ____________ __, 2009, a written objection or response with the Clerk
of the Bankruptcy Court, United States Bankruptcy Court for the Western District
of Michigan, One Division Avenue, N.W., Grand Rapids,
Michigan  49503-3132, and serve copies on (a) co-counsel to the
Debtors, (i) Cahill Gordon & Reindel LLP, Eighty Pine Street, New
York, New York  10005 (Attn:  Joel H. Levitin, Esq., and
Stephen J. Gordon, Esq.) and (ii) Warner Norcross & Judd LLP, 900 Fifth
Third Center, 111 Lyon Street NW, Grand Rapids, Michigan  49503
(Attn:  Stephen B. Grow, Esq.); (b) the United States Trustee, 125
Ottawa Street, Suite 200R, Grand Rapids, Michigan 49503; (c) counsel to the
Creditors Committee, Brandt, Fisher, Alward
& Roy, P.C., 1241 E. Eighth Street, Post Office Box 5817, Traverse City,
Michigan 49696-5817 (Attn:  Thomas R. Alward, Esq. and Susan Jill
Rice, Esq.); (d) co-counsel to BNP, (i) Munsch Hardt Kopf & Harr,
P.C., 3800 Lincoln Plaza, 500 N. Akard Street, Dallas, Texas, 75201
(Attn:  Russell L. Munsch, Esq., Walter Buchanan, Esq., and Kevin M.
Lippman, Esq.) and (ii) Lambert, Leser, Isackson, Cook & Giunta, P.C., 916
Washington Ave., Suite 309, Bay City, Michigan  48708
(Attn:  Rozanne M. Giunta, Esq.); and (e) counsel for the Second Lien
Loan Administrative Agent, Bracewell & Giuliani LLP, 711 Louisiana Street,
Suite 2300, Houston, Texas, 77002 (Attn:  Trey Wood,
Esq.).

     

    Any
objection or response must be timely filed and served in order to enable the
Creditor, Interest Holder, or other party-in-interest to be heard at the
Confirmation Hearing.  All objections must state with particularity
the grounds therefor.

     

    C.           Classification.

     

    The
Debtors are required under Bankruptcy Code § 1123 to classify the Claims and
Interests of their Creditors and Interest Holders, respectively, into Classes
that contain Claims and Interests that are substantially similar to the other
Claims or Interests in such Class.  While the Debtors believe that the
proposed classification and treatment of Claims and Interests is in compliance
with the provisions of Bankruptcy Code § 1123 and is supported by prevailing
case law, the Bankruptcy Court may find that a different classification is
required for the Plan to be confirmed.

     

    ANY
RECLASSIFICATION OF CLAIMS OR INTERESTS REQUIRED BY THE BANKRUPTCY COURT COULD
ADVERSELY AFFECT THE CLASS IN WHICH SUCH CLAIM OR INTEREST WAS INITIALLY
CLASSIFIED OR ANY OTHER CLASSES UNDER THE PLAN BY CHANGING THE COMPOSITION OF
SUCH CLASSES AND THE REQUIRED VOTE THEREFOR FOR APPROVAL OF THE
PLAN.  FURTHERMORE, A RECLASSIFICATION OF CLAIMS OR INTERESTS AFTER
APPROVAL OF THE PLAN COULD NECESSITATE THE RESOLICITATION OF A COMPLETELY NEW
PLAN OF REORGANIZATION.

     

    D.           Impairment.

     

    The
Bankruptcy Code requires, as a condition to Confirmation, that each class of
Claims or Interests that is impaired under the Plan and is receiving a
distribution under the Plan votes to accept the Plan (with the exception
described in Section F hereof).  A Class that is not “impaired” under
the Plan is deemed to have accepted the Plan and, therefore, solicitation of
acceptances with respect to such Class is not required.  A Class is
“impaired” unless the Plan (a) leaves unaltered the legal, equitable, and
contractual rights to which the Claim or Interest entitles the Holder of such
Claim or Interest or (b) cures any default that occurred before or after the
commencement of Chapter 11 cases (other than defaults of a kind specified in
Bankruptcy Code § 365(b)(2)), reinstates the original maturity of the Claim or
Interest, compensates the Holder for any damages incurred as a result of any
reasonable reliance by such Holder on any contract provision that entitled the
Holder to demand or receive accelerated payment of the Claim, and does not
otherwise alter the legal, equitable, or contractual rights to which the Claim
or Interest entitles the Holder thereof.

     

    
      
        
        

      

      
        112

        
          

        

      

      
        
        

      

    

     

    E.           Acceptance
of the Plan.

     

    Classes
1, 2C, and 2D are unimpaired and, therefore, the Holders of Allowed Claims in
such Classes are conclusively presumed to have accepted the Plan pursuant to
Bankruptcy Code § 1126(f).  Classes 2A, 2B, 3A, and 3B are impaired
and, therefore, the Holders of Allowed Claims in such Classes are entitled to
vote to accept or to reject the Plan (solely on account of their Claims in such
Classes).  Classes 4, 5, and 6 (subject to the provisions of Plan
Section 5.7) are impaired but are deemed to have rejected the Plan pursuant to
Bankruptcy Code § 1126(g), because the Holders of Claims and/or Interests in
such Classes (as applicable) do not receive or retain any property under the
Plan in respect of their Claims or Interests.

     

    Chapter
11 does not require that each holder of a claim against, or an interest in, a
debtor vote in favor of a plan of reorganization for the Bankruptcy Court to
confirm such a plan.  The Bankruptcy Code defines acceptance of a plan
of reorganization by a class of claims as acceptance by the creditors holding a
majority in number and at least two-thirds in amount of the allowed claims of
that class that have actually been voted on the plan.  The Bankruptcy
Code defines acceptance of a plan of reorganization by a class of interests as
acceptance by the holders of at least two-thirds in amount of the allowed
interests in that class that have actually been voted on the
plan.  Accordingly, claims or interests that are not voted will not be
counted to determine whether the requisite acceptances have been obtained with
respect to the Plan.

     

    IF THE
PLAN IS CONFIRMED BY THE BANKRUPTCY COURT, EACH HOLDER OF A CLAIM OR INTEREST IN
A CLASS WILL RECEIVE, ON ACCOUNT OF SUCH CLAIM OR INTEREST, THE SAME TREATMENT
AS THE OTHER MEMBERS OF SUCH CLASS (SUBJECT TO THE TERMS AND CONDITIONS OF THE
PLAN), WHETHER OR NOT SUCH HOLDER VOTED TO ACCEPT THE PLAN.  MOREOVER,
UPON CONFIRMATION, THE PLAN WILL BE BINDING ON ALL CREDITORS AND INTEREST
HOLDERS REGARDLESS OF WHETHER SUCH CREDITORS OR INTEREST HOLDERS VOTED TO ACCEPT
THE PLAN.

     

    A vote to
reject the Plan can only occur by proper submission of a duly executed
Ballot.  A vote to accept the Plan can only occur by proper submission
of a duly executed Ballot or by submission of a Ballot either indicating a vote
both to accept or to reject the Plan or indicating no choice.  Failure
of a Holder to return the Ballot does not constitute a vote to accept or to
reject the Plan by that Holder.

     

    F.           Confirmation
Without Acceptance By All Impaired Classes.

     

    In the
event that any impaired class or classes rejects a plan of
reorganization,  Bankruptcy Code § 1129(b) provides that, as long as
at least one impaired class has accepted the plan (without counting the votes of
any insiders in such class), a debtor may nevertheless seek and obtain
confirmation of the plan.  The Debtors anticipate that at least Class
2A and Class 2B, which are both impaired, will vote, as Classes, to accept the
Plan in accordance with Bankruptcy Code § 1126, as the Debtors and the Holders
of Claims in such Classes have reached an agreement-in-principle regarding the
terms of the Plan.  Furthermore, in light of the fact that the Plan
provides at least a partial recovery in the form of Cash (which the Debtors do
not believe would otherwise be available to such Creditors or required in the
context of a liquidation of the Debtors under Chapter 7), the Debtors are
hopeful that Class 3A and/or Class 3B will also vote to accept the Plan, in
accordance with Bankruptcy Code § 1126.  Thus, the Debtors anticipate
that at least one, if not more, impaired Class of Claims will accept the Plan in
accordance with Bankruptcy Code § 1126, such that the requirements of Bankruptcy
Code § 1129(b)(1) will be met.

     

    
      
        
        

      

      
        113

        
          

        

      

      
        
        

      

    

     

    To obtain
confirmation under the so-called “cram-down” provisions of Bankruptcy Code §
1129(b), it must also be demonstrated to the Bankruptcy Court that the plan does
not “discriminate unfairly” and is “fair and equitable” with respect to any
dissenting class. The “unfair discrimination” test requires, among other things,
that the plan may only treat similar claims differently if there is a reasonable
basis for such disparate treatment.  The Bankruptcy Code has
established different “fair and equitable” tests for secured creditors,
unsecured creditors, and equity holders.  The respective tests in
relevant part are as follows:

     

    
      	
               
      

            	
              1.

            	
              Secured
      Creditors.

            

    

     

    Either
(i) each impaired secured creditor of the rejecting class (I) retains its liens
in the collateral securing such creditor’s claim or in the proceeds thereof to
the extent of the allowed amount of its secured claim and (II) receives deferred
cash payments in at least the allowed amount of its secured claim with the
present value on the Effective Date at least equal to such creditor’s interest
in its collateral or in the proceeds thereof, (ii) the Plan provides for the
sale, subject to Bankruptcy § 363(k), of any property that is subject to the
liens securing such claims, free and clear of such liens, with such liens to
attach to the proceeds of such sale, or (iii) the plan provides each impaired
secured creditor with the “indubitable equivalent” of its claim.

     

    
      	
               
      

            	
              2.

            	
              Unsecured
      Creditors.

            

    

     

    Either
(i) each impaired unsecured creditor of the rejecting class receives or retains
under the plan property of a value equal to the amount of its allowed claim, or
(ii) the holders of claims and interests that are junior to the claims of the
dissenting class do not receive or retain any property under the plan (sometimes
known as the “absolute priority rule”) on account of such junior claim or
interest.

     

    
      	
               
      

            	
              3.

            	
              Equity
      Holders.

            

    

     

    Either
(i) each equity holder of the rejecting class receives or retains under the plan
property of a value equal to the value of such holder’s equity interest, or (ii)
the holders of interests that are junior to the interests of such rejecting
class do not receive or retain any property under the plan on account of such
junior interest.

    
      
         

      

      
        114

        
          

        

      

      
         

      

    

    When all
applicable requirements for confirmation of the Plan are met as set forth in
Bankruptcy Code § 1129(a)(1)-(13), except subsection (8) thereof, the Debtors
intend to request that the Bankruptcy Court confirm the Plan pursuant to
Bankruptcy Code § 1129(b), notwithstanding the requirements of Bankruptcy
Code § 1129(a)(8), on the basis that the Plan is fair and equitable and does not
discriminate unfairly with respect to any dissenting, impaired class.  In
particular, the treatment of any rejecting classes or adversely affected classes
will be modified and amended from that set forth in the Plan, even if less
favorable, to the minimum treatment necessary to meet the requirements of
Bankruptcy Code § 1129(a) and (b).  These modifications may include, but
will not be limited to, cancellation of all amounts otherwise payable under the
Plan to the rejecting classes and to junior classes affected thereby (even if
such classes previously accepted the Plan) consistent with Bankruptcy
Code § 1129(b)(2)(B)(ii) and 1129(b)(2)(C)(ii).  No party-in-interest,
however, will be deemed to waive any right to object to such modification(s) or
to cast a new ballot with respect to the Plan, which is granted or provided for
under the Bankruptcy Code or Bankruptcy Rule.

     

    IN THE
EVENT THAT, FOLLOWING THE REJECTION OF THE PLAN BY AN IMPAIRED CLASS OR CLASSES,
AT THE ELECTION OF THE DEBTORS, THE PLAN IS MODIFIED AS DESCRIBED ABOVE (AND IN
CONFORMITY WITH ARTICLE X OF THE PLAN), AND THE PLAN AS MODIFIED IS CONFIRMED BY
THE BANKRUPTCY COURT, THE REJECTING CLASS OR CLASSES AND ANY CLASS JUNIOR TO
SUCH CLASS OR CLASSES COULD BE TREATED LESS FAVORABLY THAN AS CURRENTLY PROVIDED
IN THE PLAN, INCLUDING RETAINING NO PROPERTY AND RECEIVING NO DISTRIBUTION UNDER
THE PLAN.

     

    THE
DEBTORS BELIEVE THAT THE PLAN DOES NOT DISCRIMINATE UNFAIRLY WITH RESPECT TO ANY
CLASS AND IS FAIR AND EQUITABLE WITH RESPECT TO EACH IMPAIRED CLASS. 
THEREFORE, THE DEBTORS INTEND TO SEEK CONFIRMATION OF THE PLAN EVEN IF FEWER
THAN THE REQUISITE NUMBER OF FAVORABLE VOTES ARE OBTAINED FROM ANY PARTICULAR
VOTING CLASS.

     

    
      	
              G.

            	
              Feasibility
      Test.

            

    

     

    The
Bankruptcy Code requires that, in order to confirm the Plan, the Bankruptcy
Court must find that Confirmation is not likely to be followed by the
liquidation or the need for further financial reorganization of the Reorganized
Debtors (the “Feasibility Test”).  For the Plan to satisfy the Feasibility
Test, the Bankruptcy Court must find that the Reorganized Debtors will likely
possess the resources and working capital necessary to operate profitably and,
based on reasonable assumptions, will be able to meet their obligations under
the Plan.

     

    For
purposes of determining whether the Plan meets the Feasibility Test, the Debtors
have analyzed their ability to meet their obligations under the Plan.  As
part of this analysis, the Debtors have prepared projections (the “Financial
Projections”) for the six-year period ending with the 2014 Fiscal
Year.

     

    The
Financial Projections indicate that the Reorganized Debtors should have
sufficient cash flow to make the payments required under the Plan on the
Effective Date, repay and service debt obligations, and maintain
operations.  Accordingly, the Debtors believe that the Plan complies with
Bankruptcy Code § 1129(a)(11).

    
      
         

      

      
        115

        
          

        

      

      
         

      

    

     

    As noted
in the Financial Projections, however, the Debtors caution that no
representations can be made as to the accuracy of the Financial Projections or
as to the Reorganized Debtors’ ability to achieve the projected results. 
Many of the assumptions upon which the Financial Projections are based are
subject to uncertainties outside the control of the Debtors.  Some
assumptions inevitably will not materialize, and events and circumstances
occurring after the date on which the Financial Projections were prepared may be
different from those assumed or may be unanticipated, and may adversely affect
the Debtors’ financial results.

     

    THE
FINANCIAL PROJECTIONS WERE NOT PREPARED WITH A VIEW TOWARD COMPLIANCE WITH THE
GUIDELINES ESTABLISHED BY THE AMERICAN INSTITUTE OF CERTIFIED PUBLIC ACCOUNTANTS
OR THE RULES AND REGULATIONS OF THE SECURITIES AND EXCHANGE COMMISSION REGARDING
FINANCIAL PROJECTIONS.  FURTHERMORE, THE FINANCIAL PROJECTIONS HAVE NOT
BEEN AUDITED BY THE DEBTORS’ INDEPENDENT CERTIFIED ACCOUNTANTS.  ALTHOUGH
PRESENTED WITH NUMERICAL SPECIFICITY, THE FINANCIAL PROJECTIONS ARE BASED UPON A
VARIETY OF ASSUMPTIONS, SOME OF WHICH HAVE NOT BEEN ACHIEVED TO DATE AND MAY NOT
BE REALIZED IN THE FUTURE, AND ARE SUBJECT TO SIGNIFICANT BUSINESS, LITIGATION,
ECONOMIC, AND COMPETITIVE UNCERTAINTIES AND CONTINGENCIES, MANY, IF NOT ALL, OF
WHICH ARE BEYOND THE CONTROL OF THE DEBTORS.  CONSEQUENTLY, THE FINANCIAL
PROJECTIONS SHOULD NOT BE REGARDED AS A REPRESENTATION OR WARRANTY BY THE
DEBTORS, OR ANY OTHER PERSON, THAT THE FINANCIAL PROJECTIONS WILL BE
REALIZED.  ACTUAL RESULTS MAY VARY MATERIALLY FROM THOSE PRESENTED IN THE
FINANCIAL PROJECTIONS.

     

    These
projections, and the significant assumptions upon which the projections are
based, are included in Exhibit B hereto.  Based on this analysis set forth
in the Financial Projections, the Debtors believe that the Plan provides a
feasible means of reorganization and operation from which there is a reasonable
expectation that, subject to the risks disclosed therein, the Reorganized
Debtors will be able to make the payments required to be made pursuant to the
Plan, and they believe that this reorganization will not be followed by another
financial reorganization.

     

    
      	
              H.

            	
              Best
      Interests Test.

            

    

     

    Under the
Bankruptcy Code, confirmation of a plan requires that each creditor or equity
holder in an impaired class either accept the plan or receive or retain under
the plan property of a value, as of the effective date, that is not less than
the value such creditor or equity holder would receive or retain if the debtor
were liquidated under Chapter 7.

     

    To
determine what the holders of claims and interests in each impaired class would
receive if a debtor were liquidated, the Bankruptcy Court must determine the
dollar amount that would be generated from a liquidation of the assets of the
debtor in the context of a hypothetical liquidation case under Chapter 7. 
Such determination must take into account the fact that secured claims, the
costs and expenses of liquidation, and any costs and expenses resulting from the
original reorganization case would have to be paid in full from the liquidation
proceeds before the balance of those proceeds would be made available to pay
pre-petition unsecured claims and interests.

    
      
         

      

      
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    To
determine if a plan is in the “best interests” of each impaired class, the
present value of the distributions from the proceeds of the hypothetical
liquidation of the assets and properties of the debtor (after subtracting the
amounts attributable to secured claims and costs and expenses of the Cases) must
be compared to the present value of the consideration offered to such classes
under the plan.

     

    After
consideration of the effect that a Chapter 7 liquidation would have on the
ultimate proceeds available for distribution to creditors and interest holders
of the Debtors, including (1) increased costs and expenses of liquidation under
Chapter 7 arising from fees payable to a bankruptcy trustee (up to three percent
of total proceeds) and the attorneys and other professionals such trustee might
engage, (2) additional expenses and claims that would be generated during the
liquidation and from the rejection of unexpired leases and executory contracts
in connection with the cessation of the Debtors’ operations, some of which could
give rise to claims entitled to priority, (3) the erosion of the value of the
Debtors’ assets in the context of an expedited liquidation required under
Chapter 7 and the “fire sale” atmosphere that would prevail, especially at this
time of historically low natural gas prices, (4) the adverse effects on the
salability of the Debtors’ business that could result from the possible
departure of key employees, (5) the cost attributable to the time value of money
resulting from what is likely to be a more protracted proceeding, (6) the
application of the absolute priority rule to distributions in a Chapter 7
liquidation, and (7) the loss of the value of the Debtors as a going concern,
the Debtors have determined that confirmation of the Plan will provide each
holder of a claim or interest in an impaired class with a recovery that is
greater than or equal to what such holder would receive pursuant to a Chapter 7
liquidation of the Debtors.

     

    The
Debtors believe that due regard has been given to the various Intercompany
Claims and to the relative merits of potential intercompany litigation in
formulating the Plan.  However, if the Plan is not confirmed, and the
Debtors are liquidated under Chapter 7, a separate trustee may be appointed for
each of the Debtors, and litigation may ensue among the respective trustees
concerning the Intercompany Claims or otherwise.

     

    In
applying the best interests test, it is possible that Claims and Interests in
any Chapter 7 case(s) would not be classified according to the seniority of such
Claims and Interests as provided in the Plan.  In the absence of a contrary
determination by the Bankruptcy Court, all pre-petition General Unsecured Claims
(as well as any undersecured portions of the First Lien Loan Claims, the Second
Lien Loan Claims, and/or the NW Bank Claims) that have the same rights upon
liquidation may be treated as one class for the purposes of determining the
potential distribution of the liquidation proceeds resulting from the Chapter 7
case(s) of the Debtors.  The distributions from the liquidation proceeds
would be calculated ratably according to the amount of the aggregate Claims held
by each Creditor.  The Debtors believe that the most likely outcome of
liquidation proceedings under Chapter 7 would be the application of the rule of
absolute priority of distributions.  Under that rule, no junior Creditor
may receive any distribution until all senior Creditors are paid in full with
interest, and no Interest Holder may receive any distribution until all
Creditors are paid in full with interest.

    
      
         

      

      
        117

        
          

        

      

      
         

      

    

     

    The
liquidation analysis attached hereto as Exhibit C was prepared by the Debtors
and Huron, the Debtors’ restructuring advisors, and is premised on a liquidation
in a Chapter 7 case(s).  The information contained therein reflects various
assumptions and estimates that are subject to revision and adjustment. 
Neither the Debtors nor any of their officers, affiliates, professionals,
advisors, or agents make any representation or warranty as to the accuracy or
completeness of any information contained in the liquidation
analysis.

     

    In the
liquidation analysis, the Debtors have taken into account the nature, status,
and underlying value of their assets, the ultimate realizable value of such
assets, and the extent to which such assets are subject to liens and security
interests.  Based on this liquidation analysis, the Debtors estimate that
in a liquidation under Chapter 7, after payment of all liquidation and other
costs, (a) the liquidation value remaining to satisfy the First Lien Loan Claims
is estimated to be approximately between [$31.4] million (under the lower
estimation) and [$48.4] million (under the higher estimation), which
approximates a recovery of between [43%] and [66%] of each such Claims, (b) the
liquidation value remaining to satisfy the Second Lien Loan Claims is estimated
to be $0, which constitutes a recovery of 0% of each such Claims, (c) the
liquidation value remaining to satisfy the NW Bank Claims is estimated to be
approximately between $[1.65 million] (under the lower estimation) and $[1.96
million] (under the higher estimation), which approximates a recovery of between
[64%] and [76%] of each such Claims, (d) the liquidation value remaining to
satisfy the Allowed General Unsecured Claims against Aurora in Class 3A is
estimated to be $0, for a recovery of 0% for each such Claims, and (e) the
liquidation value remaining to satisfy the Allowed General Unsecured Claims
against HPPC in Class 3B is estimated to be between approximately $5,000 to
$7,000, which constitutes a recovery of between [7.3%] and [10.3%] of each such
Claims.  The Debtors therefore believe that Holders of Allowed Claims in
each such Classes (including NW Bank, on account of the NW Bank Note Deficiency
Claim in Class 3A) will receive the same if not more under the Plan than they
would under any hypothetical Chapter 7 liquidation.

     

    Specifically,
under the terms of the Plan, the Holders of Allowed General Unsecured Claims
against Aurora in Class 3A (including NW Bank, on account of the NW Bank Note
Deficiency Claim) will receive their Pro Rata Share of $150,000, such that the
Debtors estimate that these Holders will receive a recovery equal to between
approximately [6% and 9%] of their respective Allowed Claims (depending upon,
among other things, the amount of Class 3A Claims, such as the NW Bank Note
Deficiency Claim, that are ultimately Allowed Claims).  In addition, the
Holders of Allowed General Unsecured Claims against HPPC in Class 3B will
receive their Pro Rata Share of $50,000 (not to exceed 100% of the Allowed
amount of such Claims), such that the Debtors estimate that these Holders will
receive a recovery equal to approximately [72% to 100%] of their respective
Allowed Claims (depending upon, among other things, the amount of Class 3B
Claims that are ultimately Allowed Claims).  In contrast, the Debtors do
not believe that the Holders of such Claims would receive any distribution under
any hypothetical Chapter 7 liquidation on account thereof.

     

    Also,
under the Plan, the Holders of Allowed First Lien Loan Claims will receive their
Pro Rata Share of $40 million in principal face amount of New Secured Notes and
[32] million shares of New Aurora Preferred Stock that would have an aggregate
initial liquidation preference equal to approximately $32 million.  The
Debtors currently estimate the total value of such [32] million shares to be
approximately $[6.4] million, or $[0.20] per share.  Combined with the
principal face amount of the New Secured Notes, this equates to an estimated
recovery of approximately [63] cents per dollar of such Allowed First Lien Loan
Claims under the Plan (which exceeds the estimated recovery available for such
Claims in a Chapter 7 liquidation scenario, as set forth above and on Exhibit C
attached hereto).

    
      
         

      

      
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    In
addition, under the Plan, the Holders of Allowed Second Lien Loan Claims will
receive their Pro Rata share of [56] million shares of New Aurora Class A Common
Stock.  The Debtors currently estimate the total value of such [56] million
shares to be approximately $[1,000], or $[0.000002] per share.  This
equates to an estimated recovery of approximately [0.000002] cents per dollar of
such Allowed Second Lien Loan Claims under the Plan (which exceeds the estimated
recovery available for such Claims in any Chapter 7 liquidation scenario, as set
forth above and on Exhibit C attached hereto).

     

    The
estimated value of the recoveries under the terms of the Plan to the Holders of
Allowed First Lien Loan Claims and Allowed Second Lien Loan Claims is based upon
an assumed reorganization value for the Reorganized Debtors of approximately
$[49 million], which is the midpoint of their valuations that range from
approximately $[48 million] to $[50 million] as of an assumed Effective Date of
[December of 2009].  See the Section below entitled “Valuation of the
Reorganized Debtors.”

     

    Also,
under the Plan, the Holder of the Allowed NW Bank Claims will receive a transfer
of the NW Bank Collateral (which the Debtors estimate to have a total value
equal to between approximately [$1.65 million to $1.96 million]) and its Pro
Rata Share of the Cash to be distributed to the Holders of Allowed Class 3A
Claims on account of the NW Bank Deficiency Claim.  The Debtors estimate
that the Holder of the NW Bank Claims will receive on account of its Claims
under the NW Bank Note an estimated recovery of approximately between [64% to
76%] under the Plan (which, by virtue of, among other things, the payment on
account of the NW Bank Deficiency Claim, and the ability to avoid incurring any
brokerage fees and costs that would be required to liquidate such collateral,
exceeds the estimated recovery available for such Claims in any Chapter 7
liquidation scenario).  [In addition, the Debtors currently anticipate that
the NW Bank LCs Claim will be Reinstated.]

     

    Based
upon (i) the higher recoveries to holders of Allowed First Lien Loan Claims,
Allowed Second Lien Loan Claims, Allowed NW Bank Claims, and the Allowed General
Unsecured Claims in Classes 3A and 3B, respectively, under the terms of the Plan
versus the projected recoveries to these Classes under the hypothetical Chapter
7 liquidation, and (ii) the fact that all other Allowed Claims and Interests
will receive under the Plan no less than what they would receive under the
hypothetical Chapter 7 liquidation, the Debtors believe and submit that the
proposed Plan satisfies the best interests test.

     

    
      	
              I.

            	
              Valuation
      of the Reorganized Debtors.

            

    

     

    THE
VALUATION INFORMATION CONTAINED IN THIS SECTION WITH REGARD TO THE REORGANIZED
DEBTORS IS NOT A PREDICTION OR GUARANTEE OF THE ACTUAL MARKET VALUE THAT MAY BE
REALIZED THROUGH THE SALE OF ANY SECURITIES TO BE ISSUED PURSUANT TO THE
PLAN.

    
      
         

      

      
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    The
Debtors have been advised by Huron, with respect to the consolidated Enterprise
Value (as hereinafter defined) of the Reorganized Debtors on a going-concern
basis.  Huron and the Debtors undertook this valuation analysis for the
purpose of determining value available for distribution to Holders of Allowed
Claims pursuant to the Plan and to analyze the relative recoveries to such
Holders thereunder.  The estimated total value available for distribution
(the “Distributable Value”) to Holders of Allowed Claims is comprised of an
estimated value of the Reorganized Debtors’ operations on a going concern basis
(the “Enterprise Value”).

     

    In
estimating the Enterprise Value of the Reorganized Debtors, Huron and the
Debtors:  (a) reviewed certain historical financial information of the
Debtors for recent years and interim periods; (b) reviewed certain internal
financial and operating data of the Debtors, including the Financial Projections
described in this Disclosure Statement, which data were prepared by the
management of the Debtors and provided to Huron and which relate to the
Reorganized Debtors’ business and its prospects; (c) met with members of senior
management to discuss the Debtors’ operations and future prospects; (d) reviewed
extensive publicly available financial data for, and considered the market value
of, public companies that Huron and the Debtors deemed generally comparable to
the operating business of the Debtors; (e) considered certain economic and
industry information relevant to the operating business; and (f) conducted such
other studies, analyses, inquiries, and investigations as it deemed
appropriate.  Although Huron conducted a review and analysis of the
Debtors’ business, operating assets, and liabilities and the Reorganized
Debtors’ business plan, it assumed and relied on the accuracy and completeness
of all financial and other information furnished to it by the Debtors, as well
as publicly available information.

     

    Based in
part on information provided by the Debtors, Huron has concluded solely for
purposes of the Plan that the Distributable Value of the Reorganized Debtors
ranges from approximately $[48 million] to $[50 million], with a midpoint of
$[49 million] as of an assumed Effective Date of [December of 2009].  Based
on the amount of the projected Exit Credit Facility balance, the amount of the
New Secured Notes, and the value of the New Aurora Preferred Stock, such
mid-point estimated Distributable Value implies a value for the New Aurora Class
A Common Stock as of the Effective Date of $[1,000].  These values do not
give effect to the potentially dilutive impact of any shares issued upon the
exercise of the New Warrants or pursuant to the Management and Director Equity
Plan.  Huron’s estimate of Distributable Value does not constitute an
opinion as to fairness from a financial point of view of the consideration to be
received under the Plan or of the terms and provisions of the Plan.

     

    ALTHOUGH
SUBSEQUENT DEVELOPMENTS MAY AFFECT HURON’S CONCLUSIONS, NEITHER HURON NOR THE
DEBTORS HAVE ANY OBLIGATION TO UPDATE, REVISE, OR REAFFIRM ITS
ESTIMATE.

     

    With
respect to the Financial Projections prepared by the management of the Debtors
and included in this Disclosure Statement, Huron assumed that such Financial
Projections were reasonably prepared in good faith and on a basis reflecting the
Debtors’ best judgments as to the future operating and financial performance of
the Reorganized Debtors.  Huron’s Distributable Value range assumes the
Reorganized Debtors will achieve their Financial Projections in all material
respects, including gross profit growth and improvements in sales, operating
margins, earnings, and cash flow.  Any negative developments in the
transfer of operations or the restructuring process could result in material,
adverse effects on operations and Enterprise Value.  FURTHERMORE, IF THE
BUSINESS PERFORMS AT LEVELS BELOW THOSE SET FORTH IN THE FINANCIAL PROJECTIONS,
SUCH PERFORMANCE MAY HAVE A MATERIALLY NEGATIVE IMPACT ON ENTERPRISE
VALUE.

    
      
         

      

      
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    In
addition, Huron did not independently verify management’s Financial Projections
in connection with preparing estimates of Distributable Value, and no
independent valuations or appraisals of the Debtors were sought or obtained in
connection herewith.  Such estimates were developed solely for purposes of
the formulation and negotiation of the Plan and the analysis of implied relative
recoveries to Holders of Allowed Claims thereunder.

     

    Huron’s
analysis addresses the estimated going concern Enterprise Value of the
Debtors.  It does not address other aspects of the proposed reorganization,
the Plan, or any other transactions, and it does not address the Debtors’
underlying business decision to effect the reorganization set forth in the
Plan.  Huron’s estimated Enterprise Value of the Debtors does not
constitute a recommendation to any Holder of Allowed Claims as to how such
person should vote or otherwise act with respect to the Plan.  Huron has
not been asked to nor did it express any view as to what the value of the
Debtors’ securities will be when issued pursuant to the Plan or the prices at
which they may trade in the future.  The estimated Enterprise Value of the
Debtors set forth herein does not constitute an opinion as to fairness from a
financial point of view to any person of the consideration to be received by
such person under the Plan or of the terms and provisions of the
Plan.

     

    Such
estimates reflect the application of various valuation techniques and do not
purport to reflect or constitute appraisals, liquidation values, or estimates of
the actual market value that may be realized through the sale of any securities
to be issued pursuant to the Plan, which may be significantly different than the
amounts set forth herein.  The value of an operating business is subject to
numerous uncertainties and contingencies which are difficult to predict and will
fluctuate with changes in factors affecting the financial condition and
prospects of such a business.  As a result, the estimated Enterprise Value
range of the Reorganized Debtors set forth herein is not necessarily indicative
of actual outcomes, which may be significantly more or less favorable than those
set forth herein.  Neither the Debtors, Huron, nor any other person assumes
responsibility for their accuracy.  In addition, the valuation of newly
issued securities is subject to additional uncertainties and contingencies, all
of which are difficult to predict.  Actual market prices of such securities
at issuance will depend upon, among other things, the operating performance of
the Debtors, prevailing interest rates, conditions in the financial markets, the
anticipated holding period of securities received by pre-petition creditors
(some of whom may prefer to liquidate their investment rather than hold it on a
long-term basis), and other factors which generally influence the prices of
securities.

    
      
         

      

      
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              J.

            	
              Amendments
      to or Modifications of the Plan.

            

    

     

    Bankruptcy
Code § 1127 allows a debtor to amend a plan at any time prior to its
confirmation.  If a debtor files a modification of a plan with the
Bankruptcy Court, the plan as modified would become the plan.  If
circumstances so warrant, a debtor may modify its plan after the confirmation
but prior to substantial consummation of the plan.  After notice and
hearing, however, the Bankruptcy Court would then have to confirm the plan as
modified.  The Debtors reserve the right to alter, amend, or modify the
Plan prior to or after the entry of the Confirmation Order.  After the
entry of the Confirmation Order, the Debtors or the Reorganized Debtors, as the
case may be, upon order of the Bankruptcy Court, may amend or modify the
Plan in accordance with Bankruptcy Code § 1127.  Under the Bankruptcy
Rules, any amendments or modifications of the Plan may be approved by the
Bankruptcy Court at confirmation without resolicitation of the votes of the
members of any class whose treatment is not adversely affected by such amendment
or modification.

     

    After
confirmation, the Debtors and any other party-in-interest may institute
proceedings in the Bankruptcy Court to remedy any defects or omissions or
reconcile any inconsistencies in the Plan or the Confirmation Order in such
manner as may be necessary to carry out the intents and purposes of the Plan so
long as the holders of claims and interests are not adversely affected and prior
notice of such proceeding is served in accordance with Bankruptcy Rules 2002 and
9014.

     

    
      	
              K.

            	
              Conditions
      to Confirmation of the Plan.

            

    

     

    Confirmation
of the Plan will not occur unless and until the following conditions have been
(i) satisfied or (ii) waived or modified pursuant to Plan Section 8.3:  (a)
the Bankruptcy Court shall have entered an order approving the Disclosure
Statement as containing adequate information pursuant to Bankruptcy Code § 1125,
and such order shall not have been reversed, stayed, amended, or modified in any
manner adverse to the Debtors or their Estates, and (b) the Confirmation Order
shall be acceptable, in form and substance, to the Debtors and the
Administrative Agents.

     

    
      	
              L.

            	
              Conditions
      to Effectiveness.

            

    

     

    Notwithstanding
any other provision of the Plan or the Confirmation Order, the Effective Date
will not occur, and the Plan will not be binding on any Person, unless and until
each of the following conditions has been (a) satisfied or (b) waived or
modified pursuant to Plan Section 8.3:

     

    (a) 
         The Confirmation Order (i)
shall have been entered on the docket by the Clerk of the Bankruptcy Court in
form and substance acceptable to the Debtors and the Administrative Agents and
(ii) shall not have been reversed, stayed, amended, or modified in any manner
adverse to the Debtors or their Estates;

     

    (b)           The
Plan Documents and all other documents provided for under, and reasonably
necessary to effectuate the (i) terms of, and (ii) actions contemplated under,
the Plan, shall be in form and substance acceptable to the Debtors and the
Administrative Agents, and shall have been executed and delivered by the parties
thereto, unless such execution or delivery has been waived in writing by the
parties benefited by such documents; provided, however, neither (i)
the execution and delivery of the New Warrants, or any form of agreement annexed
thereto, by the holder thereof, nor (b) the execution and delivery of any
documents establishing the terms and conditions of a Management and Director
Equity Plan, will be a condition to the occurrence of the Effective
Date.  The Plan Documents to which the condition in this sub-paragraph
(b) refers include, but are not limited to, the following
documents:

    
      
         

      

      
        122

        
          

        

      

      
         

      

    

     

    (i)           the
Amended and Restated Articles of Incorporation, the Amended and Restated
By-Laws, and the Amended and Restated LLC Agreement;

     

    (ii)           the
Exit Credit Facility and the Exit Credit Facility Guarantee, the New Secured
Notes, the Working Capital Loans Notes, and any document memorializing the New
Aurora Preferred Stock, and all instruments, certificates, guarantees,
agreements, and documents contemplated by Plan Sections 6.13, 6.17, and
6.18;

     

    (iii)           the
Registration Rights Agreement; and

     

    (iv)           the
Voting Agreement (to the extent applicable in accordance with Plan Section
6.19(b)).

     

    (c)           all
conditions precedent to the consummation of, and the funding obligation under,
the Exit Credit Facility shall have been satisfied or waived in accordance with
the terms thereof;

     

    (d)           the
Amended and Restated Articles of Incorporation and the Amended and Restated LLC
Agreement shall have been adopted and duly filed (if required by applicable law)
with the applicable authority of each Reorganized Debtor’s jurisdiction of
incorporation or formation in accordance with such jurisdiction’s state
corporate or limited liability company laws (as applicable);

     

    (e)           the
new respective Boards of Directors or Board of Managers of the Reorganized
Debtors (as applicable) shall have been appointed; and

     

    (f)           all
authorizations, consents, and regulatory approvals required (if any) in
connection with the effectiveness of the Plan shall have been
obtained.

     

    If the
Effective Date (i) does not occur for any reason within 90 days following the
entry of the Confirmation Order, unless such time period is extended by the
Debtors, with the consent of the Administrative Agents, or (ii) if on or
before 90 days following the entry of the Confirmation Order, either (a) the
Debtors determine, or (b) the Bankruptcy Court determines in a Final Order,
that one or more of the conditions to effectiveness set forth in Plan Section
8.2 will not be satisfied within such 90-day period, then the Plan and the
Confirmation Order will immediately, upon such applicable date, be deemed null
and void and, in such event, nothing contained in the Plan or the Confirmation
Order will be deemed to constitute a waiver or release of any Claims by or
against, or any Interests in, the Debtors or any other Person or to prejudice in
any manner the rights of the Debtors or any Person in any further proceedings
(whether or not such proceedings involve either of the Debtors).  If the
Confirmation Order is reversed, vacated, or revoked on appeal or otherwise by a
court of competent jurisdiction, the Plan will be null and void ab initio in all respects,
and, without limiting the generality of the foregoing, nothing contained in the
Plan or this Disclosure Statement will:  (i) constitute a waiver or release
of any Claims by or against, or any Interests in, the Debtors; (ii) prejudice in
any manner the rights of the Debtors; (iii) constitute an admission,
acknowledgement, offer, or undertaking by the Debtors in any respect; or (iv)
affect or impair, in any way, any and all Claims against the Debtors, any and
all claimed contractual subordination rights and claims between or among the
Holders of Claims against the Debtors, and any and all rights and claims between
or among holders of Claims relating in any manner to distributions on account of
Claims against the Debtors based upon any claimed contractual subordination
rights.

    
      
         

      

      
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              M.

            	
              Waiver
      of Conditions.

            

    

     

    The
Debtors may, with the consent of the Administrative Agents, but will have no
obligation to, waive or modify in writing, at any time, any of the conditions
set forth in Article VIII of the Plan, without notice, without leave of or order
of the Bankruptcy Court, and without any formal action other than proceeding to
consummate the Plan.  The failure to (a) satisfy or (b) waive or modify any
such condition may be asserted by the Debtors regardless of the
circumstances giving rise to the failure of such conditions to be (a) satisfied
or (b) waived or modified.

     

    
      	
              N.

            	
              Effects
      of Plan Confirmation.

            

    

     

    
      	
               
      

            	
              1.

            	
              Vesting of
      Property.

            

    

     

    Except as
otherwise provided in the Plan or the Confirmation Order, upon the Effective
Date, but retroactive to the Confirmation Date, (a) the Reorganized Debtors will
continue to exist as separate legal entities with all the powers of corporations
and/or limited liability companies (as applicable) under applicable law and
without prejudice to any right to alter or terminate such existence (whether by
merger or otherwise) under applicable state law, and (b) all Assets of the
respective Debtors (including, but not limited to, Aurora’s equity interests in
HPPC and the Debtors’ respective interests in any non-Debtor subsidiary or
Affiliate (to the extent that any such non-Debtor subsidiary or Affiliate has
not been dissolved, sold, or otherwise transferred under applicable law prior to
the Effective Date), but not including the NW Bank Note Collateral, which will
be transferred to the Holder of the Allowed Class 2D Claim, subject to the terms
and conditions of the Plan, including Section 4.4(b) thereof), wherever
situated, will vest in the applicable Reorganized Debtor, subject to the
provisions of the Plan and the Confirmation Order.  Thereafter, each
Reorganized Debtor may operate its business, incur debt and other obligations in
the ordinary course of its business, and may otherwise use, acquire, and dispose
of property free of any restrictions of the Bankruptcy Code, the Bankruptcy
Rules, the Local Bankruptcy Rules, and the Bankruptcy Court.  After the
Effective Date, but retroactive to the Confirmation Date, all property retained
by the Reorganized Debtors pursuant to the Plan will be free and clear of all
Claims, debts, Liens, security interests, obligations, encumbrances, and
interests of Creditors and Interest Holders of the Debtors and all other
Persons, except for (i) as is contemplated by or provided in the Plan or the
Confirmation Order; (ii) the obligation to perform according to the Plan and the
Confirmation Order; and (iii) the respective Claims, debts, Liens, security
interests, encumbrances, and interests (a) of those Holders of (1) Allowed Class
2C Claims whose Secured Claims the applicable Debtor elects to Reinstate
pursuant to Plan Section 4.3 (as opposed to the applicable Debtor’s electing to
(A) pay the amount of such Allowed Class 2C Claim in full, (B) return the
underlying collateral to such Class 2C Creditor, or (C) otherwise satisfy such
Allowed Claim in a manner provided for under Section 4.3 of the Plan), or (2)
the NW Bank LCs Collateral (subject to the limitations set forth in Section
4.4(b) of the Plan), in the event  Aurora elects to keep the NW Bank LCs in
place, or (b) arising in connection with the Exit Credit Facility (including,
without limitation, the New Secured Notes and the Working Capital Loans Notes)
and the Exit Credit Facility Guarantee.

    
      
         

      

      
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              2.

            	
              Discharge and
      Injunction.

            

    

     

    Pursuant
to Bankruptcy Code § 1141(b) or otherwise, except as may otherwise be provided
in the Plan or in the Confirmation Order, upon the occurrence of the Effective
Date, the rights afforded and the payments and distributions to be made under
the Plan will be in complete exchange for, and in full and unconditional
settlement, satisfaction, discharge, and release of, any and all existing debts,
Claims, and Interests of any kind, nature, or description whatsoever against the
Debtors or any of the Debtors’ Assets or other property, and will effect a full
and complete release, discharge, and termination of all Liens, security
interests, or other Claims, interests, or encumbrances upon all of the Debtors’
Assets and property.  No Creditor or Interest Holder of the Debtors nor any
other Person may receive any distribution from the Debtors, the Estates, the
Reorganized Debtors, or the Assets, or seek recourse against, the Debtors, the
Estates, the Reorganized Debtors, or any of the Assets that are to be
distributed under the terms of the Plan, except for those distributions
expressly provided for under the Plan.  All Persons are precluded from
asserting, against any property that is to be distributed under the terms of the
Plan, any Claims, Interests, obligations, rights, Causes of Action, liabilities,
or equity interests based upon any act, omission, transaction, or other activity
of any kind or nature that occurred prior to the Confirmation Date, other than
as expressly provided for in the Plan or the Confirmation Order, whether or not
(a) a Proof of Claim or Proof of Interest based upon such debt or Interest (as
applicable) is filed or deemed filed under Bankruptcy Code § 501; (b) a Claim or
Interest based upon such debt or Interest (as applicable) is allowed under
Bankruptcy Code § 502; or (c) the Holder of a Claim or Interest based upon such
debt or Interest (as applicable) has accepted the Plan, is deemed to have
accepted the Plan under Bankruptcy Code § 1126(f), or is deemed to have rejected
the Plan under Bankruptcy Code § 1126(g).  Except as otherwise provided in
the Plan or the Confirmation Order with respect to a Claim that is expressly
Reinstated under the terms and conditions of the Plan, all Holders of Claims and
Interests arising prior to the Effective Date will be permanently barred and
enjoined from asserting against the Debtors, the Estates, the Reorganized
Debtors, their successors, or the Assets, any of the following actions on
account of such Claim or Interest: (a) commencing or continuing in any manner
any action or other proceeding on account of such Claim or Interest against
property to be distributed under the terms of the Plan, other than to enforce
any right to distribution with respect to such property under the Plan; (b)
enforcing, attaching, collecting, or recovering in any manner any judgment,
award, decree, or order against any of the property to be distributed under the
terms of the Plan, other than as permitted under subclause (a) above; (c)
creating, perfecting, or enforcing any Lien or encumbrance against any property
to be distributed under the terms of the Plan; (d) asserting any right of
setoff, subrogation, or recoupment of any kind, directly or indirectly, against
any obligation due the Debtors or the Reorganized Debtors, the Assets or any
other property of the Debtors or the Reorganized Debtors, or any direct or
indirect transferee of any property of, or successor in interest to, any of the
foregoing Persons; and (e) acting or proceeding in any manner, in any place
whatsoever, that does not conform to, or comply with, the provisions of the
Plan.

     

    X.    ALTERNATIVES
TO CONFIRMATION AND

    CONSUMMATION
OF THE PLAN

     

    If the
Plan is not confirmed and consummated, the theoretical alternatives include, in
addition to dismissal of these Cases:  (i) continuation of these Cases;
(ii) preparation and presentation of an alternative plan of reorganization; and
(iii) liquidation of the Debtors under Chapter 7 or Chapter 11 of the Bankruptcy
Code.

    
      
         

      

      
        125

        
          

        

      

      
         

      

    

     

    
      	
              A.

            	
              Continuation
      of the Cases.

            

    

     

    The
Debtors have attempted to minimize the potential adverse effect of the filing of
these Cases upon the Debtors’ relationships with their employees, suppliers,
operators, lessors, and customers, by, among other things, seeking orders from
the Bankruptcy Court authorizing them to pay pre-petition employee obligations
and critical Vendor Claims and to honor their obligations to pay royalties and
related amounts to lessors and taxing authorities as well as the pre-petition
claims of their well operators, and by filing a disclosure statement and a
proposed plan as closely as possible to the Petition Date.  Nonetheless,
the filing of these Cases by the Debtors and the publicity attendant thereto
might have adversely affected the Debtors’ business and the businesses of the
non-Debtor subsidiaries or affiliates.  The Debtors believe that
relationships with their employees, suppliers, operators, lessors, and customers
have been maintained and should likely not suffer further erosion if the Plan is
confirmed and consummated in a timely fashion.

     

    However,
adverse effects are likely to be experienced during the pendency of any
increasingly protracted bankruptcy cases.  If the Debtors remain in Chapter
11 for a prolonged period, they could continue to operate their business and
manage their properties as debtors-in-possession (subject to their having
sufficient financing, which would not be a certainty), but they would remain
subject to the restrictions imposed by the Bankruptcy Code.  It is not
certain whether the Debtors could survive as a going concern in further
protracted Chapter 11 cases.  The Debtors could have difficulty sustaining
the high costs, and the erosion of vendor, supplier, or operator confidence,
that may be caused if they remain in bankruptcy for an extended period. 
Ultimately, there could be no assurance that the Debtors (or, if exclusivity
were terminated, other parties-in-interest) would not be forced to liquidate
under Chapter 7.

     

    
      	
              B.

            	
              Alternative
      Plans of Reorganization.

            

    

     

    After the
expiration of the period during which only the Debtors may file a plan of
reorganization and solicit acceptances thereof, the Debtors or any other
party-in-interest could potentially propose a different plan and may provide
certain creditors with less favorable treatment than the Plan as described
herein.  Such an alternative plan might involve either a reorganization and
continuation of the Debtors’ business, an orderly liquidation of the Debtors’
Assets, or some combination thereof.  It is possible that, prior to the
expiration of the current exclusivity period, the Debtors may file a motion to
extend the period during which the Debtors alone may file a plan and/or solicit
acceptances thereof.

    
      
         

      

      
        126

        
          

        

      

      
         

      

    

    The
Debtors believe that a failure to confirm the Plan may lead to expensive and
protracted litigation and eventually to the liquidation of the Debtors.  In
formulating and developing the Plan, the Debtors have explored other
alternatives and engaged in an extensive negotiation process involving many
different parties.  The Debtors believe not only that the Plan, as
described herein, fairly adjusts the rights of various classes of Creditors and
Interest Holders and enables them to realize the best possible recovery under
the circumstances, but also that rejection of the Plan in favor of some
theoretical alternative method of reconciling the Claims and Interests of the
various Classes will require, at the very least, an extensive and time-consuming
negotiation process which would not result in a better recovery for any
Class.  It is not atypical for bankruptcy proceedings involving substantial
entities with complex corporate and financial structures, such as the Debtors,
to continue operating in Chapter 11 for years before a plan of reorganization is
consummated and payments are made.  During any protracted process, the
Debtors would inevitably incur substantial administrative expenses and costs in
connection with the operation of their business, which would be a financial
drain on the Debtors.

     

    
      	
              C.

            	
              Liquidation
      Under Chapter 11 or Chapter 7.

            

    

     

    In a
liquidation under Chapter 11, the Debtors’ Assets would be sold in an orderly
fashion over a more extended period of time than in a liquidation under Chapter
7, probably resulting in the realization of somewhat greater proceeds. 
Further, if a trustee were not appointed, as one is not required in Chapter 11,
the expenses for professional fees most likely would be lower than in Chapter
7.  Although preferable to a Chapter 7 liquidation, the Debtors believe
that a liquidation under Chapter 11 would still not realize the full
going-concern value of the Debtors’ Assets, would be a lengthier proceeding and
would involve greater administrative expenses than these Cases. 
Consequently, the Debtors believe that a liquidation under Chapter 11 is a less
attractive alternative to Creditors than the Plan, because the Plan provides for
a greater return to Creditors than what would likely be realized in a Chapter 11
liquidation and would also take longer to consummate.

     

    If no
plan can be confirmed, the Debtors’ Chapter 11 Cases may be converted to cases
under Chapter 7, in which one or more trustees would be appointed or elected to
liquidate the Assets of each Debtor for distribution to its Creditors in
accordance with the priorities established by the Bankruptcy Code.  The
Debtors believe that a liquidation under Chapter 7 would result in reduced
recovery of funds by the Debtors’ Estates.  For a discussion of the effect
that a Chapter 7 liquidation would have on the recovery by Creditors and
Interest Holders, see the section above entitled “Confirmation of the Plan —
Best Interests Tests” and Exhibit C hereto.

     

    XI.    MANAGEMENT

     

    In
accordance with Bankruptcy Code § 1129(a)(5), prior to the Confirmation Date,
the Debtors will disclose the identity and affiliation of all individuals
proposed to serve, after confirmation of the Plan, as the initial directors or
managers (as applicable) of the respective Reorganized Debtors.  As noted
above, as of the Effective Date, Reorganized Aurora will initially have a
seven-person Board of Directors consisting of the following designations: 
(i) five directors to be designated by DE Shaw on behalf of the Second Lien Loan
Lenders, and (ii) two directors to be designated by BNP on behalf of the First
Lien Loan Lenders.

     

    In
addition, prior to the Confirmation Date, the Debtors will also disclose, to the
extent possible, members of the Reorganized Debtors’ senior management.  In
general, the Reorganized Debtors will not be managed by all of the same senior
managers currently serving in such capacities, although certain of them may
assist the Restructured Debtors for some limited period.  The Reorganized
Debtors will enter into the Management Transition Services Agreements with
certain members of the Debtors’ management or other employees to be selected in
conjunction with the First Lien Loan Lenders and the Second Lien Loan Lenders,
and the Holders of First Lien Loan Claims and/or Second Lien Loan Claims will
also appoint or hire other members of the Reorganized Debtors’ senior management
who did not previously serve in such capacities as of the Petition
Date.

    
      
         

      

      
        127

        
          

        

      

      
         

      

    

     

    Following
the Effective Date, a Management and Director Equity Plan may be adopted by
Reorganized Aurora.  The terms and conditions of any Management and
Director Equity Plan will be determined by the Board of Directors of Reorganized
Aurora.  Shares of New Aurora Class B Common Stock representing the
equivalent of up to 10% of the shares of New Aurora Class A Common Stock on a
fully-diluted basis that are issued and outstanding upon the Effective Date (not
including any shares of New Aurora Class A Common Stock or other such class of
equity that would be issuable upon the exercise of the New Warrants) will be
reserved for the issuance under any Management and Director Equity Plan when the
Management and Director Equity Plan is adopted by Reorganized
Aurora.

     

    XII.   
DESCRIPTION OF THE EXIT CREDIT FACILITY,

    THE
WORKING CAPITAL LOANS, THE NEW SECURED

    NOTES,
AND THE EXIT CREDIT FACILITY GUARANTEE

     

    
      	
              A.

            	
              The
      Exit Credit Facility.

            

    

     

    On the
Effective Date, or as soon thereafter as practicable, the Reorganized Debtors,
either as direct borrowers or as an Exit Credit Facility Guarantor, the Exit
Credit Facility Administrative Agent, as administrative agent, and the Exit
Credit Facility Lender(s), as lender(s) (in each case, as may be set forth in
the final Exit Credit Facility), will (as applicable) execute and deliver the
Exit Credit Facility, the New Secured Notes, the Working Capital Loans Notes,
the Exit Credit Facility Guarantee, and any and all security agreements,
mortgages or extensions of mortgages, certificates, and other instruments,
agreements, assignments, and documents contemplated and/or required by the Exit
Credit Facility, including, but not limited to, any and all such documents that
serve to evidence and secure the Reorganized Debtors’ respective obligations
under the Exit Credit Facility and/or the Exit Credit Facility Guarantee (as
applicable), and any Liens in favor of the Exit Credit Facility Lender(s)
securing such obligations.  The New Secured Notes under the Exit Credit
Facility will constitute a reinstatement and modification of the Class 2A Claims
under the First Lien Loan in the manner set forth in Plan Section 5.2, and, as a
result, all of the outstanding amounts under the Exit Credit Facility will (a)
continue to be secured by the perfected Liens which exist under the First Lien
Loan and (b) be secured by perfected Liens in substantially all of the
respective assets of the Reorganized Debtors.

     

    Specifically,
the First Lien Loan Lenders will have the option to participate as an Exit
Credit Facility Lender and provide to the Reorganized Debtors under the Exit
Credit Facility up to $5,000,000 in a secured revolving working capital facility
component thereof (the “Working Capital Loans”) that is entitled to share pari
passu in the collateral to be granted to secure the Tranche A Notes.  In
the event that all the Exit Credit Facility Lenders under the Working Capital
Loans are First Lien Loan Lenders, each participating First Lien Loan Lender
will be entitled to participate in the Working Capital Loans on a Pro Rata
basis, based on the total amount outstanding under the First Lien Loan.  In
the event that some or all of the First Lien Loan Lenders fail to fully
subscribe the Working Capital Loans, then some or all of the Second Lien Loan
Lenders will be entitled to participate with such participating First Lien Loan
Lenders and provide the remaining portion that is necessary to fully subscribe
the Working Capital Loans.  In such event, such participating Second Lien
Loan Lenders will be entitled to share pari passu in the collateral securing the
Tranche A Notes solely with respect to their respective portion of the Working
Capital Loans.

    
      
         

      

      
        128

        
          

        

      

      
         

      

    

     

    In the
event that none of the First Lien Loan Lenders subscribe to the Working Capital
Loans, then some or all of the Second Lien Loan Lenders will instead provide
such Working Capital Loans, and the participation of such Second Lien Loan
Lenders will be on a Pro Rata basis, based on the total principal amount
outstanding under the Second Lien Loan.  To the extent that the Working
Capital Loans are subscribed exclusively by the Second Lien Loan Lenders, such
Working Capital Loans will be secured as second lien debt subordinate solely to
the Tranche A Notes.  If less than all of the Second Lien Loan Lenders are
Exit Credit Facility Lenders under the Exit Credit Facility, (a) the Second Lien
Loan Lenders subscribing to the Working Capital Loans will be entitled to
provide any remaining portion of the Working Capital Loans and (b) the Second
Lien Loan Administrative Agent will provide any portion of the Working Capital
Loans that is not otherwise subscribed as described herein and in the
Plan.

     

    Advances
under the Working Capital Loans will bear interest at a rate of 12% per
annum.  Maturity of the Working Capital Loans will be the date that is 24
months following the Effective Date.  On the maturity date of the Working
Capital Loans, the Reorganized Debtors will also pay a premium equal to 50% of
the principal amount borrowed thereunder.  At the execution of the Exit
Credit Facility, each Exit Credit Facility Lender will be entitled to an upfront
fee equal to 3% of its share of the total commitments under the Working Capital
Loans.  Amounts repaid under the Working Capital Loans by the Reorganized
Debtors may be prepaid and re-borrowed.  The documentation memorializing
the Exit Credit Facility will include customary representations, warranties,
covenants, and indemnities.

     

    Solely to
the extent that the Second Lien Loan Lenders exclusively subscribe to the
Working Capital Loans, such Second Lien Loan Lenders participating in the Exit
Credit Facility will collectively receive 10-year warrants (the “New Warrants”)
to purchase, in the aggregate, 35% of the New Aurora Class A Common Stock (on a
fully diluted basis) at a nominal exercise price.

     

    
      	
              B.

            	
              The
      New Secured Notes.

            

    

     

    On the
date of the execution and delivery of the Exit Credit Facility (which will be no
earlier than the Effective Date), Reorganized Aurora will issue, in accordance
with the terms of the Plan (including Section 5.2 thereof) and the Exit Credit
Facility, the New Secured Notes to the First Lien Loan Administrative Agent for
subsequent distribution on a Pro Rata basis to the Holders of Allowed First Lien
Loan Claims.

    
      
         

      

      
        129

        
          

        

      

      
         

      

    

    The New
Secured Notes will consist of (i) $20 million of reinstated and
modified indebtedness previously funded and outstanding pursuant to the First
Lien Loan, to be issued by Reorganized Aurora under the Exit Credit Facility as
secured tranche A notes, and to be guaranteed by the Exit Credit Facility
Guarantor pursuant to the Exit Credit Facility Guarantee, (the “Tranche A
Notes”), and (ii) $20 million of reinstated and modified indebtedness previously
funded and outstanding pursuant to the First Lien Loan, to be issued by
Reorganized Aurora under the Exit Credit Facility as secured tranche B notes,
and to be guaranteed by the Exit Credit Facility Guarantor pursuant to the Exit
Credit Facility Guarantee (the “Tranche B Notes”).  They will bear
interest at a rate per annum equal to (a) with respect to the Tranche A Notes,
LIBOR plus a margin of 3%, and (b) with respect to the Tranche B Notes, 6%
fixed.  Interest on (a) the Tranche A Notes will be payable quarterly,
and (b) the Tranche B Notes will accrue but not be paid and instead will be
capitalized (“PIK Interest”) and added quarterly to the principal amount
outstanding of such Tranche B Notes, and interest on the new principal balance
thereof outstanding (which includes any capitalized PIK Interest) will
thereafter continue to accrue interest at the rate applicable for such Tranche B
Notes.

     

    The
principal amounts of the New Secured Notes (including all capitalized PIK
Interest) will be payable at maturity, which will be the date that is 24 months
following the Effective Date.  The documentation memorializing the New
Secured Notes will be contained in the Exit Credit Facility and will include
customary representations, warranties, covenants, and indemnities.

     

    In
addition to the perfected Liens under the First Lien Loan, the outstanding
principal of, and accrued and unpaid interest on, the Tranche A Notes, together
with all other amounts owed by Reorganized Aurora relating to the Tranche A
Notes, will also be secured by first priority, perfected Liens in substantially
all of the assets of Reorganized Aurora (including any subsidiaries and
Affiliates thereof, such as Reorganized HPPC).  In addition to the
perfected Liens under the First Lien Loan, the outstanding principal (including
all capitalized PIK Interest) of, and accrued PIK Interest not yet capitalized
and added to the outstanding principal of, the Tranche B Notes, together with
all other amounts owed by Reorganized Aurora relating to the Tranche B Notes,
will also be secured by perfected Liens (subordinate only to the Liens of the
Tranche A Notes and the Working Capital Loans of the Exit Credit Facility) in
substantially all of the assets of Reorganized Aurora (including any
subsidiaries and Affiliates thereof).  The security documents relating
to the Liens of the Tranche A Notes and Tranche B New Secured Notes will contain
customary terms and conditions.

     

    A holder
of a New Secured Note or Working Capital Loan will not be permitted to assign
all or any portion of its New Secured Notes or Working Capital Loans, as
applicable, to any Person or entity that is acting in the capacity of a “vulture
fund.”  The Exit Credit Facility Administrative Agent will make the
determination whether or not a Person is acting in the capacity of a “vulture
fund” for this purpose.

     

    
      	
              C.

            	
              Payment
      and Priorities Related to Secured
Indebtedness.

            

    

     

    The net
cash proceeds from the sale of any assets of either of the Reorganized Debtors,
as well as any amount to be paid (whether voluntary or involuntary) on either
the New Secured Notes or the Exit Credit Facility, would be applied as
follows:

     

    (a)           First,
to the Pro Rata payment of (i) all fees, costs, expenses, and other obligations
payable to the administrative agent and the collateral agent under the New
Secured Notes and (ii) to the extent that the Exit Credit Facility is subscribed
by at least one First Lien Loan Lender, all fees, costs, expenses, and other
obligations payable to the administrative agent and the collateral agent under
the Exit Credit Facility;

    
      
         

      

      
        130

        
          

        

      

      
         

      

    

     

    (b)           Second,
to the Pro Rata payment of (i) the Tranche A Notes in the following order of
priority:  (A) accrued and unpaid interest, (B) principal amount
outstanding, and (C) any other obligation payable in respect of the Tranche A
Notes and (ii) to the extent that the Exit Credit Facility is subscribed by at
least one First Lien Loan Lender, the Exit Credit Facility in the following
order of priority:  (A) accrued and unpaid interest, (B) principal
amount outstanding, (C) premium in respect of the principal amount, and (D) any
other obligation payable in respect of the Exit Credit Facility

     

    (c)           Third,
to the extent that the Exit Credit Facility is subscribed exclusively by the
Second Lien Loan Lenders, to the payment of all fees, costs, expenses, and other
obligations payable to the administrative agent and the collateral agent under
the Exit Credit Facility;

     

    (d)           Fourth,
to the extent that the Exit Credit Facility is subscribed exclusively by the
Second Lien Loan Lenders, to the payment of the Exit Credit Facility in the
following order of priority: (i) accrued and unpaid interest, (ii) principal
amount outstanding, (iii) premium in respect of the principal amount, and (iv)
any other obligation payable in respect of the Exit Credit Facility;
and

     

    (e)           Fifth,
to the payment of the Tranche B Notes in the following order of priority: (i)
accrued interest not yet paid in kind, (ii) principal amount outstanding
(including accrued paid-in-kind interest), and (iii) any other obligation
payable in respect of the Tranche B Notes.

     

    XIII.                      DESCRIPTION
OF THE NEW AURORA CLASS A

    COMMON
STOCK AND THE NEW AURORA PREFERRED STOCK

     

    
      	
              A.

            	
              The
      New Aurora Class A Common Stock.

            

    

     

    On the
Effective Date (or as soon thereafter as is practicable), Reorganized Aurora
will issue in accordance with the terms of the Plan (including Sections 5.3 and
6.6 thereof), [56] million shares (in the aggregate) of New Aurora Class A
Common Stock to the Second Lien Loan Administrative Agent for subsequent
distribution on a Pro Rata basis to the Holders of Allowed Second Lien Loan
Claims (or such Holder’s affiliate, as provided for in Plan Section
5.3(b)).  As of the Effective Date, such [56] million shares of New Aurora
Class A Common Stock to be so distributed will collectively represent 100% of
the outstanding shares of New Aurora Class A Common Stock (subject to dilution
on a pari passu basis
with all other holders of shares of New Aurora Class A Common Stock upon the
issuance of any shares of New Aurora Class A Common Stock issuable upon the
exercise of the New Warrants or otherwise by Reorganized Aurora).  Upon the
issuance of such shares of New Aurora Class A Common Stock (including, but not
limited to, upon the exercise of the New Warrants or otherwise), all such shares
of New Aurora Class A Common Stock will be deemed fully paid and
nonassessable.

    
      
         

      

      
        131

        
          

        

      

      
         

      

    

    
      	
              B.

            	
              The
      New Aurora Preferred Stock.

            

    

     

    On the
Effective Date (or as soon thereafter as is practicable), Reorganized Aurora
will issue, in accordance with the terms of the Plan (including Sections 5.2 and
6.6 thereof), [32] million shares (in the aggregate) of the New Aurora Preferred
Stock to the First Lien Loan Administrative Agent for subsequent distribution on
a Pro Rata basis to the Holders of Allowed First Lien Loan Claims (or such
Holder’s affiliate, as provided for in Plan Section 5.2(b)).  The New
Aurora Preferred Stock issued on such date to each such Holder will, in the
aggregate, represent, as of such date, 100% of the outstanding shares of New
Aurora Preferred Stock, and will not be subject to any dilution or further
issuance of any additional shares of New Preferred Stock except as expressly
provided under Plan Section 6.15(f).  Except as provided by the Utah
Revised Business Corporation Act and the Amended and Restated Articles of
Incorporation, the shares of New Aurora Preferred Stock will be
non-voting.

     

    The New
Aurora Preferred Stock will have an initial liquidation preference of [$1.00]
per share of New Aurora Preferred Stock, for an aggregate initial liquidation
preference for all shares of New Aurora Preferred Stock equal to approximately
$32 million, and will rank senior in priority to the shares of the New Aurora
Class A Common Stock and the New Aurora Class B Common Stock and junior in
priority to all indebtedness of Reorganized Aurora.  To the extent then
available, the form of the New Aurora Preferred Stock will be as set forth in
the Plan Supplement.

     

    The New
Aurora Preferred Stock will have the following principal terms and
conditions:

     

    
      	
               
      

            	
              ·

            	
              Neither
      Reorganized Aurora, nor any holders of New Aurora Class A Common Stock,
      will be permitted to approve, any of the following without the prior
      written approval of holders of at least 66 2/3% of the shares of New
      Aurora Preferred Stock outstanding:  (i) certain transactions (i.e.,
      mergers or asset sales, etc.); (ii) any changes to the rights, privileges,
      or preferences of the New Aurora Preferred Stock; (iii) the incurrence by
      Reorganized Aurora of any secured or unsecured indebtedness (other than
      indebtedness contemplated under the Plan); provided, however, that
      with respect to unsecured indebtedness, no such approval will be required
      to the extent that such unsecured indebtedness is, in the aggregate, less
      than $500,000; (iv) the issuance of any additional shares of New Aurora
      Preferred Stock (other than as a dividend on outstanding shares), and the
      issuance of any equity interests in Reorganized Aurora that would rank
      senior to, or pari
      passu with, the New Aurora Preferred Stock as to liquidation
      preference or as to priority of distributions; (v) any distributions on or
      redemptions of any shares of the New Aurora Class A Common Stock or the
      New Aurora Class B Common Stock (other than (A) those expressly permitted
      in accordance with the terms of the Plan and (B) certain exceptions such
      as repurchases under employee benefit plans or employment agreements,
      etc.); (vi) designation of additional directors of the Board of Directors
      of Reorganized Aurora upon the occurrence of the Triggering Event; and
      (vii) additional matters as reflected in the Plan Documents, including
      without limitation, the Amended and Restated Articles of Incorporation and
      the Amended and Restated By-Laws.

            

    

     

    
      	
               
      

            	
              ·

            	
              The
      governing documents of the Reorganized Aurora will contain customary
      provisions entitling the holders of the New Aurora Class A Common Stock,
      the New Aurora Class B Common Stock, and the New Aurora Preferred Stock to
      receive (i) periodic financial statements, and (ii) reasonable access to
      the books and records of Reorganized
Aurora.

            

    

    
      
         

      

      
        132

        
          

        

      

      
         

      

    

     

    
      	
               
      

            	
              ·

            	
              The
      New Aurora Preferred Stock will not be convertible into New Aurora Class A
      Common Stock, New Aurora Class B Common Stock, or any other equity
      security of Reorganized Aurora.

            

    

     

    
      	
               
      

            	
              ·

            	
              Dividends
      will accrue for each share of New Aurora Preferred Stock at a rate of 6%
      annually on the amount of the liquidation preference for such New Aurora
      Preferred Stock, payable solely in additional New Aurora Preferred Stock,
      issuable quarterly.

            

    

     

    
      	
               
      

            	
              ·

            	
              Each
      share of New Aurora Preferred Stock will be redeemable (i) on a mandatory
      basis, on the date that is 60 months after the Effective Date; (ii) at the
      option of the Reorganized Aurora, at any time prior to the redemption date
      in clause (i) hereof; (iii) on a mandatory basis, upon the refinancing or
      the payment in full of the obligations under the New Secured Notes; or
      (iv) on a mandatory basis, upon the occurrence of an event of default
      under the New Secured Notes, in each case under clauses (i), (ii), (iii),
      and (iv) hereof, for a Cash redemption price equal to the liquidation
      preference applicable to such New Aurora Preferred Stock, plus any accrued
      and unpaid dividends (paid in Cash based on the amount of the liquidation
      preference that would apply to the shares of New Aurora Preferred Stock
      that would otherwise be issued to pay such accrued and unpaid dividends);
      provided,
      however,
      that any partial redemptions will be made on a Pro Rata basis among the
      holders of the New Aurora Preferred Stock;
and

            

    

     

    
      	
               
      

            	
              ·

            	
              The
      holders of the New Aurora Preferred Stock will have no obligation
      thereunder to make any capital contributions to any of the Reorganized
      Debtors.

            

    

     

    
      	
              C.

            	
              Dividends
      to Preferred and Common Equity Holders of Reorganized
    Aurora.

            

    

     

    Any
dividends (other than dividends paid in additional shares of New Aurora
Preferred Stock, which will only be issued to existing holders of New Aurora
Preferred Stock) by Reorganized Aurora to its respective equity security holders
will be allocated as follows:

     

    1. 
         Until all shares of New Aurora
Preferred Stock have been fully redeemed in accordance with the terms of the
Amended and Restated Articles of Incorporation or have received aggregate
dividends equal to the aggregate liquidation preference plus all accrued and
unpaid dividends thereon, dividends to the respective equity security holders of
Reorganized Aurora will be allocated as follows:  (1) 90% to the
holders of the New Aurora Preferred Stock and (2) 10% to the holders of the New
Aurora Class B Common Stock; and

     

    2.           After
the full redemption of all outstanding shares of New Aurora Preferred Stock or
the payment of aggregate dividends to the New Aurora Preferred Stock equal to
the aggregate liquidation preference plus all accrued and unpaid dividends
thereon, all dividends will be allocated on a Pro Rata basis to the holders of
the New Aurora Class A Common Stock the New Aurora Class B Common
Stock.

    
      
         

      

      
        133

        
          

        

      

      
         

      

    

     

    
      	
              D.

            	
              No
      Fractional Shares or Warrants.

            

    

     

    No
fractional shares of New Aurora Class A Common Stock or New Aurora Preferred
Stock, or New Warrants to acquire any fractional shares of New Aurora Class A
Common Stock, will be issued or distributed under the Plan or the Exit Credit
Facility.  Whenever any distribution to a particular Person would otherwise
call for the distribution of a fraction of a share of New Aurora Class A Common
Stock or New Aurora Preferred Stock or of a New Warrant to acquire any
fractional share of New Aurora Class A Common Stock, the actual distribution of
shares of such stock or warrant will be rounded down to the next lower whole
number.  The total number of shares of New Aurora Class A Common Stock or
New Aurora Preferred Stock or New Warrants to be distributed to a Class of
Claims or in connection with the Exit Credit Facility (as applicable) will be
adjusted as necessary to account for this rounding.  No consideration will
be provided in lieu of any fractional shares of New Aurora Class A Common Stock
or New Warrants that are rounded down.

     

    
      	
              E.

            	
              The
      Registration Rights Agreement.

            

    

     

    Following
the Effective Date, certain Holders of New Aurora Class A Common Stock will be
entitled to require the registration of New Aurora Class A Common Stock under
the Securities Act in accordance with the terms of the Registration Rights
Agreement.  A substantially complete and final form of the Registration
Rights Agreement will be filed as part of the Plan Supplement and will be
executed and delivered by Reorganized Aurora and become effective as of the
Effective Date.

     

    
      	
              F.

            	
              The
      Voting Agreement and the Utah and Delaware
  Conversions.

            

    

     

    The
Voting Agreement will:  (i) be filed as part of the Plan Supplement, (ii)
be executed and delivered by Reorganized Aurora, the initial holders of the New
Aurora Class A Common Stock, and the initial holders of New Aurora Preferred
Stock, and (iii) become effective as of the Effective Date.  Pursuant to
the Voting Agreement, the respective holders of the New Aurora Class A Common
Stock and the New Aurora Preferred Stock would agree (except as otherwise set
forth below and subject to Section 6.19(b) of the Plan) to vote all such shares
to approve the Utah Conversion, the Delaware Conversion, and the Reorganized
Aurora LLC Agreement.

     

    Following
the Effective Date (and subject to Section 6.19(b) of the Plan), the holders of
New Aurora Preferred Stock and New Aurora Class A Common Stock will take all the
appropriate corporate action to approve and effect the Utah Conversion and
Delaware Conversion and approve and execute the Reorganized Aurora Limited
Liability Company Agreement, all as contemplated by the Voting Agreement. 
The Plan defines the “Utah Conversion” as “[t]he conversion of Reorganized
Aurora from a Utah corporation to a Utah limited liability company to be
effected, subject to [Plan Section 6.19(b)], after the Effective Date,” and
defines the “Delaware Conversion” as “[t]he conversion of Reorganized Aurora
from a Utah limited liability company into a Delaware limited liability company
to be effected, subject to [Plan Section 6.19(b)], after the Utah
Conversion.”

    
      
         

      

      
        134

        
          

        

      

      
         

      

    

    Notwithstanding
anything to the contrary contained in the Plan, however, the holders of the New
Aurora Preferred Stock and the holders of the New Aurora Class A Common Stock
may agree, after the Effective Date, not to undertake the Utah Conversion, the
Delaware Conversion, or any other conversion of Reorganized Aurora and to
instead keep and maintain the existence of Reorganized Aurora and the New Aurora
Preferred Stock, New Aurora Class A Common Stock, and New Aurora Class B Common
Stock issued in accordance with Section 6.3 of the Plan or otherwise under the
Plan.

     

    Notwithstanding
any such conversions, Reorganized Aurora will be treated as a corporation for
federal income tax purposes, and will take all other actions necessary or
desirable in furtherance of such treatment for federal income tax
purposes.

     

    XIV. 
CERTAIN U.S. FEDERAL INCOME TAX CONSIDERATIONS

     

    The
following summary is a general discussion of certain anticipated U.S. federal
income tax consequences of the Plan.  This summary only addresses tax
consequences to Classes of Creditors that are voting on the Plan (i.e., Classes 2A, 2B,
3A, and 3B).  It does not address Classes of Creditors who are
unimpaired or otherwise entitled to payment in full in Cash or Interest Holders
(who will be deemed to have rejected the Plan).

     

    This
summary only addresses Creditors who acquired their Claims directly from the
Debtors and, therefore, does not address special tax considerations that may
apply to Creditors who acquired their Claims in a secondary purchase (such as
the market discount rules that may recharacterize as ordinary income any gain
recognized on exchange of Claims).

     

    This
summary does not address all categories of Creditors, some of which (including
foreign persons, persons related to the Debtors within the meaning of the Tax
Code, life insurance companies, banks, financial institutions, tax-exempt
organizations, real estate investment trusts, regulated investment companies,
dealers or traders in securities, Creditors that are (or hold Claims through)
partnerships or other pass-through entities and holders of Claims who are
themselves in bankruptcy) may be subject to special rules not addressed
herein.  This summary also does not address any state, local, or
foreign tax considerations applicable to any Creditor.

     

    This
summary assumes that, because there is significant non-overlap in the identity
of the various classes of Creditors and Interest Holders, the resolution of each
class of Claims or Interests will be viewed as a separate transaction for U.S.
federal income tax purposes.  It is unclear whether the Internal
Revenue Service (“IRS”) will agree with this conclusion.  Holders of
multiple classes of Claims or Interests should consult their own tax advisors to
determine how the U.S. federal income tax consequences of the Plan would differ
to them if the IRS were to aggregate exchanges of multiple Classes.

     

    This
summary is based upon relevant provisions of the Tax Code, the applicable
Treasury regulations promulgated thereunder, judicial authority, published
rulings, and such other authorities considered relevant, all as of the date
hereof and all of which are subject to change (possibly with retroactive
effect).  The U.S. federal income tax consequences of the Plan are
complex and are subject to significant uncertainties.  The Debtors
have not requested a ruling from the IRS, nor have the Debtors obtained an
opinion of counsel with respect to these matters.  There can be no
assurance that the IRS will not take positions concerning the consequences of
the Plan that are different from those discussed below.

    
      
         

      

      
        135

        
          

        

      

      
         

      

    

     

    THE
SUMMARY SET FORTH BELOW IS INCLUDED FOR GENERAL INFORMATIONAL PURPOSES ONLY AND
IS NOT A SUBSTITUTE FOR CAREFUL TAX PLANNING AND ADVICE BASED UPON THE
INDIVIDUAL CIRCUMSTANCES PERTAINING TO A HOLDER OF A CLAIM.  EACH
CREDITOR IS URGED TO CONSULT ITS OWN TAX ADVISOR AS TO THE CONSEQUENCES OF THE
PLAN UNDER U.S. FEDERAL AND APPLICABLE STATE, LOCAL, AND FOREIGN TAX
LAWS.

     

    TO ENSURE
COMPLIANCE WITH INTERNAL REVENUE SERVICE CIRCULAR 230, YOU ARE HEREBY NOTIFIED
THAT: (A) ANY DISCUSSION OF FEDERAL TAX ISSUES IN THIS DISCLOSURE STATEMENT IS
NOT INTENDED OR WRITTEN TO BE RELIED UPON, AND CANNOT BE RELIED UPON BY YOU, FOR
THE PURPOSE OF AVOIDING PENALTIES THAT MAY BE IMPOSED ON YOU UNDER THE TAX CODE;
(B) SUCH DISCUSSION IS WRITTEN IN CONNECTION WITH THE PROMOTION OR MARKETING OF
THE TRANSACTIONS ADDRESSED HEREIN; AND (C) YOU SHOULD SEEK ADVICE BASED ON YOUR
PARTICULAR CIRCUMSTANCES FROM AN INDEPENDENT TAX ADVISOR.

     

    A.           Tax
Consequences to Creditors.

     

    
      	
               
      

            	
              1.

            	
              Class 2A and Class 2B
      Creditors.

            

    

     

    
      	
               
      

            	
              (a)

            	
              Tax
      Consequences of the Exchange of
Claims.

            

    

     

    The tax
consequences to an exchanging Creditor in Class 2A or Class 2B will depend in
part on whether the Creditor’s Claim arose from holding a “security” for U.S.
federal income tax purposes.  A determination as to whether a debt
obligation or other instrument constitutes a security is based upon numerous
facts and circumstances surrounding the origin and nature of the obligation, but
most authorities have held that the term to maturity of the debt instrument is
one of the most significant factors.  Corporate debt obligations with
maturities of less than five years generally do not constitute securities,
corporate debt instruments with maturities of five years or more, but less than
ten years, are likely to be treated as securities, and corporate debt
obligations with maturities of ten years or more generally qualify as
securities.

     

    We
believe that the First Lien Loan should not be considered a security and, while
not free from doubt, the Debtors intend to take the position that the Second
Lien Loan should not be considered a security for U.S. federal income tax
purposes.  If the Debtors’ position is correct, each Class 2A Creditor
or Class 2B Creditor will be deemed to have disposed of its Claim in a fully
taxable exchange.  Subject to the discussion below regarding the
treatment of accrued and unpaid interest, each Class 2A Creditor or Class 2B
Creditor will recognize gain or loss equal to the difference between (a) such
Creditor’s “amount realized” (i.e., the sum of the
issue price of any New Secured Notes (which should equal their stated principal
amount) and the fair market value of any New Aurora Preferred Stock or New
Aurora Class A Common Stock received by such Creditor) and (b) the adjusted tax
basis of such Creditor in its First Lien Loan or Second Lien Loan, as
applicable.  The character of any such gain or loss will depend in
part on whether such Creditor held its First Lien Loan or Second Lien Loan as a
“capital asset” (within the meaning of Section 1221 of the Tax
Code).  Any such gain or loss that is treated as capital gain or loss
will be long term capital gain or loss if such Creditor held its First Lien Loan
or Second Lien Loan for more than one year.  Long term capital gains
for non-corporate Creditors are generally eligible for reduced rates of
taxation.  The deductibility of capital losses is subject to
limitations.

    
      
         

      

      
        136

        
          

        

      

      
         

      

    

     

    A
Creditor’s tax basis in any New Secured Notes received will equal their issue
price.  A Creditor’s tax basis in any New Aurora Preferred Stock or
New Aurora Class A Common Stock (collectively, the “New Aurora Stock”) received
will equal their fair market value.  The holding period of any New
Secured Notes and any New Aurora Stock will begin on the day after the
exchange.

     

    If,
contrary to the Debtors’ position, the Second Lien Loan were considered a
security for U.S. federal income tax purposes, (a) a Class 2B Creditor would not
recognize any gain or loss on the exchange, (b) the tax basis in any New Aurora
Class A Common Stock received would equal the adjusted tax basis of such
Creditor in its Second Lien Loan exchanged therefor and (c) the holding period
of the New Aurora Class A Common Stock would include the Holding Period of the
Creditor’s Second Lien Loan exchanged therefor.

     

    
      	
               
      

            	
              (b)

            	
              Consequences
      of Owning the New Secured Notes and the New Aurora Class A Common
      Stock.

            

    

     

    You
should consult your own tax advisor regarding the U.S. federal income tax
consequences of owning and disposing of New Secured Notes and New Aurora Stock,
including:

     

    
      	
               
      

            	
              o

            	
              the
      treatment of the PIK Interest on the Tranche B Notes as “original issue
      discount” which generally must be included in income (as ordinary income)
      as it accrues before the receipt of any corresponding cash payments
      (regardless of your method of
accounting);

            

    

     

    
      	
               
      

            	
              o

            	
              the
      application of Section 305 of the Tax Code to the New Aurora Preferred
      Stock, which generally would require a holder of such stock to include
      dividends (and any excess of the liquidation preference of such stock over
      its initial fair market value) as dividend income taxable as they accrue
      (to the extent of any current or accumulated earnings and profits) before
      the receipt of any corresponding cash payments (regardless of your method
      of accounting); the risk that any New Aurora Preferred Stock received as
      PIK dividends may not be fungible with each other or with the originally
      issued New Aurora Preferred Stock;
and

            

    

     

    
      	
               
      

            	
              o

            	
              any
      special tax consequences to a holder that does not hold any New Secured
      Notes or New Aurora Stock as a capital
asset.

            

    

     

    
      
         

      

      
        137

        
          

        

      

      
         

      

    

    

     

    
      	
               
      

            	
              2.

            	
              Class 3A and Class 3B
      Creditors.

            

    

     

    Each
Class 3A Creditor or Class 3B Creditor will be deemed to have disposed of its
Claim in a fully taxable exchange.  Subject to the discussion below
regarding the treatment of accrued and unpaid interest, each Class 3A Creditor
or Class 3B Creditor will recognize gain or loss equal to the difference between
(a) such Creditor’s “amount realized” (i.e., any Cash
received in connection with the exchange) and (b) the adjusted tax basis of such
Creditor in its General Unsecured Claim.  The character of any such
gain or loss will depend in part on whether such Creditor held its General
Unsecured Claim as a “capital asset” (within the meaning of Section 1221 of the
Tax Code).  Any such gain or loss that is treated as capital gain or
loss will be long term capital gain or loss if such Creditor held its General
Unsecured Claim for more than one year.  Long term capital gains for
non-corporate Creditors are generally eligible for reduced rates of
taxation.  The deductibility of capital losses is subject to
limitations.

     

    
      	
               
      

            	
              3.

            	
              Payments to Creditors on
      Account of Accrued and Unpaid
Interest.

            

    

     

    The Plan
provides that all payments made to Creditors will be allocated first to unpaid
principal and thereafter to any accrued and unpaid interest.  Treasury
regulations generally provide that payments on a debt instrument should be
allocated first to accrued and unpaid interest and thereafter to unpaid
principal.  However, some case law suggests that the ordering rule in
the Treasury regulations should not apply in a bankruptcy
context.  While not free from doubt, the Debtors intend to take the
position (and the foregoing discussion assumes) that the rule in the Treasury
regulations should not apply and the ordering rule in the Plan should be
respected for U.S. federal income tax purposes.  If this position is
incorrect, any payments allocable to accrued and unpaid interest would not be
treated as part of a Creditor’s amount realized, but instead would be taxable as
ordinary interest income to the extent not previously so taxed.

     

    To the
extent you have included in income accrued and unpaid interest in respect of the
First Lien Loan or the Second Lien Loan that exceeds any payments allocable to
such interest, you may be entitled to claim a deduction for such
excess.  You should consult your own tax advisor regarding the
availability and character of such deduction.

     

    
      	
               
      

            	
              4.

            	
              Information Reporting and
      Backup Withholding.

            

    

     

    Certain
payments, including the payments with respect to Claims pursuant to the Plan,
may be subject to information reporting by the payor to the
IRS.  Moreover, such reportable payments may be subject to backup
withholding (currently at a rate of 28%) unless the recipient (1) is an exempt
payee, such as a corporation or (2) provides the payor with a correct taxpayer
identification number and complies with applicable certification requirements.
Backup withholding is not an additional tax.  Rather, amounts withheld
under the backup withholding rules may be credited against a Creditor’s federal
income tax liability, and a Creditor may obtain a refund of any excess amounts
withheld under the backup withholding rules by timely filing an appropriate
claim for refund with the IRS.

     

    B.           Tax
Consequences to the Debtors.

     

    
      	
               
      

            	
              1.

            	
              Cancellation of Indebtedness
      Income and Attribute
Reduction.

            

    

     

    The
Debtors believe that they will recognize no taxable income as a result of the
issuances of the New Secured Notes and the New Aurora Stock or the payment of
Cash or the transfer of any other property in satisfaction of Claims (except to
the extent of any gain on transfers of appreciated assets to Creditors in
satisfaction of Claims).  Under the cancellation of indebtedness rules
of the Tax Code, debts discharged in the context of a bankruptcy proceeding will
not result in taxable income, although they will cause the reduction in certain
tax attributes of Aurora, including net operating losses (“NOLs”) and NOL
carryforwards.

     

    
      
         

      

      
        138

        
          

        

      

      
         

      

    

     

    Aurora
estimates that it has approximately $130 million of consolidated NOL
carryforwards for U.S. federal income tax purposes.  A substantial
amount of such NOLs may be eliminated following implementation of the Plan as a
result of the satisfaction of certain Claims at a discount, for which Aurora
will generally be required to reduce its NOLs and NOL
carryforwards.  In addition, if the amount of cancellation of
indebtedness (i.e., the excess of
the amount of debt cancelled over the amount of any Cash, the issue price of any
debt instruments and the fair market value of any other property given in
cancellation of such debt) exceeds the amount of Aurora’s NOLs and NOL
carryforwards, the excess will be applied to reduce Aurora’s tax basis in its
assets (to the extent the tax basis exceeds the amount of Aurora’s liabilities
following implementation of the Plan).

     

    
      	
               
      

            	
              2.

            	
              Net Operating Loss
      Limitations.

            

    

     

    With respect to any NOLs
and NOL carryforwards of Aurora remaining after confirmation of the Plan and any
required attribute reduction, Section 382 of the Tax Code contains certain rules
limiting the amount of such NOLs and NOL carryforwards a corporate taxpayer can
utilize in each taxable year following an “ownership change” (the “Annual
Section 382 Limitation”).  In general, an “ownership change”
occurs whenever the percentage of the stock of a corporation owned, directly or
indirectly, by “5-percent stockholders” (within the meaning of Section 382 of
the Tax Code) increases by more than 50 percentage points over the lowest
percentage of the stock of such corporation owned, directly or indirectly, by
such 5-percent stockholders at any time over the preceding three year
period.  It is expected that Aurora will undergo an ownership change
on the Effective Date.

     

    As a
general rule, a loss corporation’s Annual Section 382 Limitation equals the
product of the value of the stock of the corporation (with certain adjustments)
immediately before the ownership change and the applicable “long-term tax-exempt
rate,” which is a rate published monthly by the Treasury
Department.  Any unused portion of the Annual Section 382 Limitation
generally is available for use in subsequent taxable years.  If a loss
corporation does not continue its historic business or use a significant portion
of its historic assets in a new business for at least two years after the
ownership change, the corporation’s Annual Section 382 Limitation is
zero.  The Section 382 Annual Limitation will also apply to any net
unrealized built in-losses (i.e., losses
economically accrued but unrecognized as of the date of the ownership change in
excess of a threshold amount), to the extent such losses are recognized during
the five year period immediately after the ownership change.

     

    Section
382(l)(5) of the Tax Code provides an exception to the application of the Annual
Section 382 Limitation where a corporation is under the jurisdiction of a court
in a Title 11 or similar case (the “382(l)(5) Exception”).  The
382(l)(5) Exception provides that where an ownership change occurs pursuant to a
bankruptcy reorganization or similar proceedings, the Annual 382 Limitation will
not apply if the pre-change shareholders and/or “qualified creditors” (as
defined by applicable Treasury regulations) own at least 50 percent of the stock
of the reorganized corporation.  However, under the 382(l)(5)
Exception, a corporation’s pre-change NOLs and NOL carryforwards that may be
carried over to a post-change year generally must be reduced to the extent
attributable to any interest paid or accrued to qualified creditors during the
three taxable years preceding the Effective Date of the Plan, and during the
part of the current taxable year prior to and including the Effective
Date.  If the 382(l)(5) Exception applies, a second ownership change
of the corporation within a two year period following the Effective Date of the
Plan will cause the corporation to forfeit all of its unused NOLs and NOL
carryforwards that were incurred prior to the date of the second ownership
change.

     

    
      
         

      

      
        139

        
          

        

      

      
         

      

    

     

    If a
corporation in bankruptcy elects out of the rules under Section 382(l)(5), a
special rule under Section 382(l)(6) of the Tax Code will apply in calculating
the Annual Section 382 Limitation.  Under this special rule, the
Annual Section 382 Limitation will be calculated by reference to the lesser of
the value of the corporation’s stock (with certain adjustments, including any
increase in value resulting from any surrender or cancellation of any Claims in
the bankruptcy) immediately after the ownership change (as opposed to
immediately before the ownership change, as discussed above) or the value of the
corporation’s assets (determined without regard to liabilities) immediately
before the ownership change.

     

    Aurora is
continuing to analyze whether it is advisable to avail itself of the 382(l)(5)
Exception.  Even if Aurora decides to do so, transfers of Claims prior
to the Effective Date may prevent Aurora from satisfying the “qualified
creditor” test requirement of Section 382(l)(5).  Moreover, the
benefits of Section 382(l)(5) would effectively be lost if Aurora were to
experience an ownership change before the Effective Date.  While an
order of the Bankruptcy Court currently precludes certain transfers of Old
Aurora equity that may cause an ownership change, there can be no assurance that
these restrictions will prevent such a change, or that a change did not occur
before the order took effect.  Finally, even if the benefits of
Section 382(l)(5) are available upon consummation of the Plan, such benefits
will be lost if Reorganized Aurora experiences another ownership change within
the subsequent two year period, and there is no assurance that such an ownership
change will not occur (as a result of redemptions or other transfers of the New
Aurora Stock or otherwise).

     

    
      	
               
      

            	
              3.

            	
              Alternative Minimum Tax
      Liability.

            

    

     

    While any
NOL carryforwards not limited by the Annual Section 382 Limitation will
generally be available to reduce Aurora’s regular U.S. federal income tax
liability, such NOL carryforwards generally may offset only 90% of Aurora’s
alternative minimum tax liability, if any.

     

    
      	
               
      

            	
              4.

            	
              Limited Liability
      Conversion.

            

    

     

    The
contemplated conversion of Reorganized Aurora into a limited liability company
(pursuant to the Voting Agreement) should not have a material impact on the tax
treatment of the Debtor, provided that such limited liability company elects
from its inception to be taxable as a corporation for U.S. federal income tax
purposes.

     

    
      
         

      

      
        140

        
          

        

      

      
         

      

    

     

    XV. 
RESALE OF SECURITIES RECEIVED UNDER THE PLAN

     

    A.           Issuance
of New Securities.

     

    Bankruptcy
Code § 1145(a)(1) exempts the offer and sale of securities under a plan of
reorganization from registration under Section 5 of the Securities Act and state
laws if three principal requirements are satisfied:

    

            
   (a)           the
securities must be offered and sold under a plan of reorganization and must be
securities of the debtor, of an affiliate participating in joint plan with the
debtor, or of a successor to the debtor under the plan;

    

             
  (b)           the
recipients of the securities must hold pre-petition or administrative expense
claims against the debtor or interests in the debtor; and

     

            
   (c)           the
securities must be issued entirely in exchange for the recipient’s claim against
or interest in the debtor, or principally in exchange for such claims or
interests and partly for cash or property.

     

    The
Debtors believe that the offer and sale of the New Aurora Class A Common Stock,
the New Aurora Preferred Stock, and the New Secured Notes would satisfy the
requirements of Bankruptcy Code §1145(a)(1) and would be, therefore, exempt from
registration under the Securities Act and state securities laws.

     

    The
Debtors believe that the issuance of New Aurora Class A Common Stock in
connection with the exercise of the New Warrants will satisfy the requirements
of Bankruptcy Code § 1145(a)(2), which exempts the offer of a security through
the issuance of any warrant, option, right to subscribe, or conversion privilege
that was issued under a plan of reorganization in accordance with Bankruptcy
Code § 1145(a)(1) and the issuance of a security upon the exercise of such a
warrant, option, right, or privilege.

     

    The
Debtors also anticipate that they or the Reorganized Debtors (as applicable)
would intend to seek to qualify for exemptions from registration, pursuant to
Section 4(2) of the Securities Act, Regulation D of the Securities Act, Rule 701
promulgated under the Securities Act, or otherwise, the issuance of any shares
of the New Aurora Class B Common Stock or any equity securities of Reorganized
Aurora in the future in connection with the exercise of any stock options under
the Management and Director Equity Plan or otherwise.

     

    B.           Subsequent
Transfers Under Federal Securities Laws.

     

    The
Debtors believe that all resales and subsequent transactions in the New Aurora
Class A Common Stock would be exempt from registration under federal and state
securities laws, unless the holder thereof is an “underwriter” with respect to
such securities.  Bankruptcy Code §1145(b) defines four types of
“underwriters”:

     

    (1)           persons
who purchase a claim against, an interest in, or a claim for an administrative
expense against the debtor with a view to distributing any security received in
exchange for such a claim or interest;

    
      
         

      

      
        141

        
          

        

      

      
         

      

    

    

    (2)           persons
who offer to sell securities offered under a plan for the holders of such
securities;

    

    (3)           persons
who offer to buy such securities from the holders of such securities, if the
offer to buy is:  (a) with a view to distributing such securities; and
(b) under an agreement made in connection with the plan, the consummation of the
plan, or with the offer or sale of securities under the plan; or

    

    (4)           a
person who is an “issuer” with respect to the securities, as the term “issuer”
is defined in Section 2(11) of the Securities Act.

    

    Under
Section 2(11) of the Securities Act, an “issuer” includes any person directly or
indirectly controlling or controlled by the issuer, or any person under direct
or indirect common control of the issuer.  To the extent that Persons
who receive the New Aurora Class A Common Stock, the New Aurora Preferred Stock,
the New Secured Notes, or the New Warrants pursuant to the Plan are deemed to be
“underwriters,” resales by such persons would not be exempted by Bankruptcy Code
§1145 from registration under the Securities Act or other applicable
law.  Persons deemed to be underwriters would, however, be permitted
to sell the New Aurora Class A Common Stock, the New Aurora Preferred Stock, the
New Secured Notes, or the New Warrants without registration pursuant to the
provisions of Rule 144 under the Securities Act.  These rules permit
the public sale of securities received by “underwriters” if current information
regarding the issuer is publicly available and if volume limitations and certain
other conditions are met.  Other exemptions to the registration
requirements of the Securities Act might be applicable in a particular
situation.  Whether or not any particular person would be deemed to be
an “underwriter” with respect to the New Aurora Class A Common Stock, the New
Aurora Preferred Stock, the New Secured Notes, or the New Warrants to be issued
pursuant to the Plan would depend upon various facts and circumstances
applicable to that person.  Accordingly, the Debtors express no view
as to whether any particular Person receiving the New Aurora Class A Common
Stock, the New Aurora Preferred Stock, the New Secured Notes, or the New
Warrants under the Plan would be an “underwriter” with respect to such
securities.

     

    GIVEN THE
COMPLEX AND SUBJECTIVE NATURE OF THE QUESTION OF WHETHER A PARTICULAR HOLDER MAY
BE AN UNDERWRITER, THE DEBTORS MAKE NO REPRESENTATION CONCERNING THE RIGHT OF
ANY PERSON TO TRADE IN THE NEW SECURED NOTES, THE NEW AURORA CLASS A COMMON
STOCK, THE NEW AURORA CLASS B COMMON STOCK, THE NEW AURORA PREFERRED STOCK, OR
THE NEW WARRANTS.  THE DEBTORS RECOMMEND THAT POTENTIAL RECIPIENTS OF
THE NEW SECURED NOTES, THE NEW AURORA CLASS A COMMON STOCK, THE NEW AURORA CLASS
B COMMON STOCK, THE NEW AURORA PREFERRED STOCK OR THE NEW WARRANTS CONSULT THEIR
OWN COUNSEL CONCERNING WHETHER THEY MAY FREELY TRADE SUCH SECURITIES WITHOUT
COMPLIANCE WITH THE SECURITIES ACT OR THE SECURITIES EXCHANGE ACT OF 1934 AS
WELL AS ANY STATE LAWS.

     

    
      
         

      

      
        142

        
          

        

      

      
         

      

    

     

    XVI. 
AVAILABLE INFORMATION

     

    Statements
made in this Disclosure Statement as to the contents of any contract, agreement,
or other document referred to herein are not necessarily
complete.  With respect to each such contract, agreement, or other
document that has been attached hereto as an exhibit, reference is made to the
appropriate exhibit for a more complete description of the matter involved, and
each such statement shall be deemed qualified in its entirety by such
reference.  Any contract, agreement, or other document that has been
referred to or described herein but not otherwise attached as an exhibit may be
reviewed at the Debtors’ principal office, 4110 Copper Ridge Drive, Suite 100,
Traverse City, Michigan  49684.

     

    Aurora is
currently subject to the informational and periodic reporting requirements of
the Exchange Act.  Accordingly, they have filed periodic reports and
other documents and information required under the Exchange Act with the
SEC.  Such reports and other documents and information filed by Aurora
may be examined and are also available for inspection without charge at, or
copies obtained upon payment of prescribed fees from, the Public Reference
Section of the SEC at Judiciary Plaza, 450 Fifth Street, NW, Washington,
D.C.  20549, and are also available for inspection and copying at the
regional offices of the SEC located at 233 Broadway, New York, New York 10279,
and at 500 West Madison Street, Chicago,
Illinois  60661-2511.  The SEC maintains a Web Site
(http://www.sec.gov) that contains reports and other information regarding
Aurora.

    
      
         

      

      
        143

        
          

        

      

      
         

      

    

     

    XVII. 
RECOMMENDATION

     

    The
Debtors, the Administrative Agents, the First Lien Loan Lenders, and the Second
Lien Loan Lenders believe that confirmation and implementation of the Plan are
preferable to any of the alternatives described herein.  The Debtors
have also determined that Confirmation of the Plan will provide all Creditors
with Allowed Claims in Classes 2A, 2B, 2D, 3A, or 3B with a recovery greater
than or equal to what they would receive if the Debtors were liquidated under
Chapter 7, and the Holder of any other Claim or Interest with a recovery of no
less than what it would receive if the Debtors were liquidated under Chapter 7
(and in certain instances, more than what they would receive under such a
liquidation).  Any other alternative would cause significant delay and
uncertainty, as well as substantial additional administrative
costs.  Thus, the Debtors the Administrative Agents, the First Lien
Loan Lenders, and the Second Lien Loan Lenders recommend the confirmation and
implementation of the Plan.

     

    
      	
              Dated:  October
      6, 2009

            	
              Aurora
      Oil & Gas Corporation

            	 
      
	 
      	
              Debtor
      and Debtor-in-Possession

            	 
      

    

    

    
      	 
      	
              By:

            	
              /s/  Sanford R.
      Edlein

            	 
      
	 
      	 
      	
              Name:  Sanford
      R. Edlein

            	 
      
	 
      	 
      	
              Title:   
      Chief Restructuring Officer

            	 
      

    

    

    
      	 
      	
              Hudson
      Pipeline & Processing Co., LLC,

            
	 
      	
              Debtor
      and Debtor-in-Possession

            

    

    

    
      
        	 
      	
                By:

              	
                /s/  Sanford R.
      Edlein                                                      

              	 
      
	 
      	 
      	
                Name:  Sanford
      R. Edlein

              	 
      
	 
      	 
      	
                Title:    Chief
      Restructuring Officer

              	 
      

      

    

     

    
      
         

      

      
        144

        
          

        

      

      
         

      

    

     

    
      
        
          
            
              
                	 
      	 
      	
                        Submitted
      by:

                      	 
      
	 	 	      
                         

                        /s/  Stephen
      B. Grow

                        WARNER
      NORCROSS & JUDD LLP

                        Stephen
      B. Grow (P39622)

                        900
      Fifth Third Center, 111 Lyon Street NW

                        Grand
      Rapids, Michigan  49503

                        Telephone:
      (616) 752-2158

                        Facsimile:
      (616) 222-2158

                        sgrow@wnj.com

                         

                        —
      and—

                         

                        CAHILL GORDON
      & REINDEL
      LLP

                        Joel
      H. Levitin

                        Stephen
      J. Gordon

                        Eighty
      Pine Street

                        New
      York, New York  10005

                        Telephone:  (212)
      701-3000

                        Facsimile:  (212)
      269-5420

                         

                        Attorneys  for
      the

                        Debtors
      and Debtors-in-Possessio

                      	 

              

            

          

        

      

      
        

        
          
             

          

          
            145

            
              

            

          

          
             

          

        

      

    

    
       

      EXHIBIT
A

       

      THE
PROPOSED JOINT PLAN OF REORGANIZATION OF DEBTORS AURORA

      OIL
& GAS CORPORATION AND HUDSON PIPELINE & PROCESSING CO., LLC

       

      DATED
OCTOBER 6, 2009

       

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

       

    

    UNITED
STATES BANKRUPTCY COURT

    FOR
THE WESTERN DISTRICT OF MICHIGAN

    

    
      
        
          	
                  In
      re:

                	
                  )

                	 
      
	 
      	
                  )

                	
                  Chapter
      11

                
	
                  AURORA
      OIL & GAS CORPORATION,

                	
                  )

                	 
      
	 
      	
                  )

                	
                  Bankruptcy
      Case No.: 09-08254 (SWD)

                
	
                  Debtor.       
      

                	
                  )

                	 
      
	 
      	
                  )

                	 
      
	 
      	
                  )

                	 
      
	
                  In
      re:

                	
                  )

                	
                  Chapter
      11

                
	 
      	
                  )

                	 
      
	
                  HUDSON
      PIPELINE& PROCESSING

                	
                  )

                	
                  Bankruptcy
      Case No.: 09-08255 (SWD)

                
	
                  CO.,
      LLC,

                	
                  )

                	 
      
	 
      	
                  )

                	 
      
	
                  Debtor.       
      

                	
                  )

                	 
      
	 
      	
                  )

                	 
      

        

      

    

    

    JOINT
PLAN OF REORGANIZATION OF DEBTORS AURORA OIL &

    GAS CORPORATION AND HUDSON
PIPELINE & PROCESSING CO., LLC

     

    
      
        
          
            	 
      	
                    Submitted
      by:

                  
	 
      	 
      
	 
      	
                    WARNER
      NORCROSS & JUDD LLP

                  
	 
      	
                    Stephen
      B. Grow (P39622)

                  
	 
      	
                    900
      Fifth Third Center, 111 Lyon Street NW

                  
	 
      	
                    Grand
      Rapids, Michigan 49503

                  
	 
      	
                    Telephone:  (616)
      752-2158

                  
	 
      	
                    Facsimile:  (616)
      222-2158

                  
	 
      	
                    sgrow@wnj.com

                  
	 
      	 
      
	 
      	
                    -and-

                  
	 
      	 
      
	 
      	
                    CAHILL
      GORDON & REINDEL llp

                  
	 
      	
                    Joel
      H. Levitin

                  
	 
      	
                    Stephen
      J. Gordon

                  
	 
      	
                    Eighty
      Pine Street

                  
	 
      	
                    New
      York, New York 10005-1702

                  
	 
      	
                    Telephone:  (212)
      701-3000

                  
	 
      	
                    Facsimile:  (212)
      269-5420

                  
	 
      	 
      
	 
      	
                    Attorneys
      for the Debtors and
Debtors-in-
Possession

                  

          

        

      

    

    

    Dated:  October
6, 2009

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    Aurora
Oil & Gas Corporation and Hudson Pipeline & Processing Co., LLC, the
above-captioned debtors and debtors-in-possession propose the following joint
plan of reorganization pursuant to Chapter 11 of the Bankruptcy
Code.

     

    
      ARTICLE
I

    

     

    
      DEFINITIONS

    

     

    The
following terms used in the Plan shall have the meanings specified below, and
such meanings shall be equally applicable to both the singular and plural forms
of such terms, unless the context otherwise requires.  Any terms
defined in the Disclosure Statement and not otherwise defined herein shall have
the meanings set forth in the Disclosure Statement when used
herein.  Any term used in the Plan, whether or not capitalized, that
is not defined in the Plan or in the Disclosure Statement, but that is defined
in the Bankruptcy Code, the Bankruptcy Rules, or the Local Bankruptcy Rules,
shall have the meaning set forth in the Bankruptcy Code, the Bankruptcy Rules,
or the Local Bankruptcy Rules.

     

    1.1.           Administrative
Agents:  Collectively, the First Lien Loan Administrative
Agent, the Second Lien Loan Administrative Agent, and the DIP Facility
Administrative Agent.

     

    1.2.           Administrative
Claims:  The collective reference to all Claims for costs and
expenses of administration of these Cases with priority under Bankruptcy Code §
507(a)(2), costs and expenses allowed under Bankruptcy Code § 503(b), the
actual and necessary costs and expenses of preserving the respective Estates of
the Debtors and operating the respective businesses of the Debtors, any
indebtedness or obligations incurred or assumed by either of the Debtors
pursuant to Bankruptcy Code § 364 or otherwise, professional fees and expenses
of the Debtors and the Creditors Committee, in each case to the extent allowed
by an order of the Bankruptcy Court under Bankruptcy Code § 330(a) or § 331, and
any fees or charges assessed against the respective Estates under 28 U.S.C. §
1930; provided,
however, that
the Holder of an Administrative Claim (except for an Administrative Claim based
upon Professional Fees, the allowance and timing for filing of applications for
Professional Fees being governed by Plan Section 13.7) arising prior to the
Effective Date (other than for goods or non-professional services provided to
the Debtors during these Cases in the ordinary course of their business) must
file a request for payment on or before 30 days after the Effective Date for
such Administrative Claim to be eligible to be considered an Allowed
Claim.

     

    1.3.           Affiliate:  This
term shall have the meaning assigned to it in Bankruptcy Code § 101(2);
provided, however, that where
the context so requires, the term “debtor” in such section shall mean that
entity to which the defined term “Affiliate” refers.

     

    1.4.           Allowance
Date:  With reference to a particular Claim, the date on which
such Claim becomes an Allowed Claim; provided, however, that, if a
Claim becomes an Allowed Claim pursuant to an order of the Bankruptcy Court, the
Allowance Date shall be the date on which such order becomes a Final Order, and
if a Claim becomes an Allowed Claim pursuant to the Plan, the Allowance Date
shall be deemed the Effective Date.

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    1.5.           Allowed:  Such word
shall mean, with reference to a Claim:  except as otherwise provided
in the Plan (a) any Claim against a Debtor that has been listed by such Debtor
in the Schedules filed by such Debtor as liquidated in an amount greater than
zero dollars and not disputed or contingent and for which no contrary Proof of
Claim has been filed and as to which no timely objection has been interposed;
(b) any Claim as to which a Proof of Claim has been timely filed and (i) no
objection to the allowance thereof has been timely interposed on or before the
Claims Objection Bar Date, and (ii) such Claim has not (as applicable) been
withdrawn, paid in full (pursuant to a prior order of the Bankruptcy Court or
otherwise), or otherwise deemed satisfied in full; (c) any Claim as to which any
objection thereto has been determined by a Final Order in favor of the
respective Claim, or any such objection has been settled, waived through
payment, or withdrawn; (d) any Claim that has otherwise been allowed by a Final
Order (including, without limitation, the DIP Facility Order, with respect to
DIP Facility Claims); (e) any Claim as to which, upon the lifting of the
automatic stay pursuant to Bankruptcy Code § 362, the liability of a Debtor,
allowance, and the amount thereof are determined by a Final Order of a court of
competent jurisdiction other than the Bankruptcy Court; (f) with respect to any
Administrative Claim for goods or non-professional services provided to the
Debtors during these Cases in the ordinary course of their business, (i) no
objection to the allowance thereof has been timely interposed on or before the
Claims Objection Bar Date, and (ii) such Administrative Claim has not been
withdrawn, paid in full (pursuant to a prior order of the Bankruptcy Court or
otherwise in the ordinary course of their business), or otherwise deemed
satisfied in full in the ordinary course of their business; or (g) any Claim
that is expressly deemed an Allowed Claim under the Plan.  Unless
otherwise ordered by the Bankruptcy Court prior to Confirmation, or as
specifically provided to the contrary in this Plan with respect to any
particular Claim, an “Allowed” Claim shall not, for any purpose under the Plan,
include (i) any interest on such Claim to the extent accruing or maturing on or
after the Petition Date, (ii) punitive or exemplary damages, or (iii) any fine,
penalty, or forfeiture.

     

    1.6.           Allowed  . . .
Claims:  All Allowed Claims in the particular Class or of the
specific type or nature described.

     

    1.7.           Allowed Insured
Claims:  All Insured Claims that are Allowed
Claims.

     

    1.8.           Amended and Restated
By-Laws:  The by-laws of Reorganized Aurora on or after the
Effective Date, the form of which is to be included in the Plan Supplement to
the extent not submitted earlier.

     

    1.9.           Amended and Restated Articles of
Incorporation:  The amended and restated articles of
incorporation of Reorganized Aurora on or after the Effective Date, the form of
which is to be included in the Plan Supplement to the extent not submitted
earlier.

     

    1.10.         Amended and Restated LLC
Agreement:  The amended and restated limited liability company
agreement of Reorganized HPPC on or after the Effective Date, the form of which
is to be included in the Plan Supplement to the extent not submitted
earlier.

     

    1.11.         Articles of Conversion in
Utah:  The articles of conversion to be filed, subject to
Section 6.19(b) hereof, with the Secretary of State of Utah on or after the
Effective Date effecting and evidencing the Utah Conversion, the form of which
is to be attached as an exhibit to the Voting Agreement and included in the Plan
Supplement.

    
      
         

      

      
        -2-

        
          

        

      

      
         

      

    

    1.12.         Assets:  All of the
right, title, and interest of either of the Debtors in and to any and all assets
and property, whether tangible, intangible, real, or personal, that constitute
property of the respective Estates within the purview of Bankruptcy Code § 541,
including, without limitation, any and all claims, Causes of Action, and/or
rights of the respective Debtors under federal and/or state law.

     

    1.13.         Assumption
Dispute:  Such term shall have the meaning ascribed to it in
Plan Section 7.2.

     

    1.14.         Aurora:  Debtor
Aurora Oil & Gas Corporation, a Utah corporation.

     

    1.15.         Avoidance
Claims:  All of the Debtors’ and the Estates’ Causes of Action
against any Person arising under any of Bankruptcy Code §§ 502(d), 544, 545,
547, 548, 549, 550, and/or 553, or under similar or related state or federal
statutes and common law, including, without limitation, all preference,
fraudulent conveyance, fraudulent transfer, and/or other similar avoidance
claims, rights, and Causes of Action, whether or not litigation has been
commenced as of the Effective Date to prosecute such Avoidance
Claims.

     

    1.16.         Ballot:  The form
distributed to each Holder (as determined as of the Record Date in the case of a
Holder of an Allowed Claim in Class 2A or Class 2B) of an impaired Claim in
Class 2A, Class 2B, or Class 3A, on which is to be indicated either an
acceptance or a rejection of the Plan.

     

    1.17.         Bankruptcy
Code:  The Bankruptcy Reform Act of 1978, Title 11, United
States Code, as amended from time to time, and made applicable to these
Cases.

     

    1.18.         Bankruptcy
Court:  The United States Bankruptcy Court for the Western
District of Michigan, or any other court of competent jurisdiction exercising
jurisdiction over these Cases.

     

    1.19.         Bankruptcy
Rules:  The Federal Rules of Bankruptcy Procedure, promulgated
under Section 2075, Title 28, United States Code, as amended from time to time,
and made applicable to these Cases.

     

    1.20.         Business Day:  A day
other than a Saturday, Sunday, “legal holiday” (as such term is defined in
Bankruptcy Rule 9006(a)), or any other day on which commercial banks in Traverse
City, Michigan are authorized or required by law to close.

     

    1.21.         Cases:  The cases
for the reorganization of the Debtors commenced by voluntary petitions under
Chapter 11 of the Bankruptcy Code, filed on the Petition Date, in the Bankruptcy
Court.

     

    1.22.         Cash:  Legal tender
of the United States of America and equivalents thereof.

    
      
         

      

      
        -3-

        
          

        

      

      
         

      

    

    1.23.         Cause of
Action:  Any and all actions, proceedings, causes of action,
claims, suits, accounts, controversies, rights to legal or equitable remedies,
and rights to payment, whether known, unknown, reduced to judgment, not reduced
to judgment, liquidated, unliquidated, fixed, contingent, matured, unmatured,
disputed, undisputed, secured, or unsecured and whether asserted or unasserted,
in law, equity, or otherwise.

     

    1.24.         Certificates of Conversion to
Delaware:  The certificate of conversion filed, subject to
Section 6.19(b) hereof, with the Secretary of State of Delaware and articles of
conversion filed with the Secretary of State of Utah on or after the Effective
Date effecting and evidencing the Delaware Conversion, the form of which is to
be attached as an exhibit to the Voting Agreement and included in the Plan
Supplement.

     

    1.25.         Chapter 11:  Chapter
11 of the Bankruptcy Code.

     

    1.26.         Claim:  Any right to
payment from one or more of the Debtors arising, or with respect to which the
obligation giving rise to such right has been incurred, before the Effective
Date, whether or not such right is reduced to judgment, liquidated,
unliquidated, fixed, contingent, matured, unmatured, disputed, undisputed,
legal, equitable, secured, or unsecured; or any right to an equitable remedy for
breach of performance arising, or with respect to which the obligation giving
rise to such right has been incurred, before the Effective Date, if such breach
gives rise to a right to payment from one or more of the Debtors, whether or not
such right is reduced to judgment, liquidated, unliquidated, fixed, contingent,
matured, unmatured, disputed, undisputed, legal, equitable, secured, or
unsecured.

     

    1.27.         Claims
Agent:  Donlin, Recano & Company, Inc., in its capacity as
the claims, noticing, and balloting agent in these Cases.

     

    1.28.         Claims Objection Bar
Date:  With respect to any Claim, the date on or before the
later of (i) the 90th day
following the Effective Date; or (ii) the 90th day
after the date such Claim is timely filed; or (iii) such later date as may be
established from time to time by entry of an order, prior to the expiration of
the dates set forth in clauses (i) and (ii) hereof, by the Bankruptcy Court
establishing the last date for filing objections to Claims.

     

    1.29.         Class:  A category,
designated herein, of Claims or Interests that are substantially similar to the
other Claims or Interests in such category as specified in Article II of the
Plan.

     

    1.30.         Confirmation:  The
entry on the docket of the Bankruptcy Court of the Confirmation
Order.

     

    1.31.         Confirmation
Date:  The date upon which Confirmation occurs.

     

    1.32.         Confirmation
Order:  The order of the Bankruptcy Court confirming the
Plan.

     

    1.33.         Credit
Facilities:  Collectively, the DIP Facility, the First Lien
Loan, and the Second Lien Loan.

     

    1.34.         Creditor:  Any
Holder of an Allowed Claim against one or more of the Debtors that arose (or is
based on an obligation incurred) on or before the Petition Date, including,
without limitation, any Allowed Claim against the respective Estates of a kind
specified in Bankruptcy Code § 502(g), (h), or (i).

    
      
         

      

      
        -4-

        
          

        

      

      
         

      

    

    1.35.         Creditors
Committee:  The official committee of unsecured creditors
formed in these Cases on July 21, 2009, as constituted from time to
time.

     

    1.36.         Debtor:  Either one
of the Debtors.

     

    1.37.         Debtors:  Together,
Aurora and HPPC.

     

    1.38.         Debtor
Parties:  Collectively, the Debtors, the Reorganized Debtors,
the Estates, and any Person seeking to exercise the rights of the Estates,
including, without limitation, any successor to the Debtors or any Estate
representative appointed or selected pursuant to Bankruptcy Code § 1123(b) or
otherwise (including, without limitation, any Chapter 11 or Chapter 7 trustee
appointed in either of these Cases), on their own behalf and on behalf of all
the Debtors’ respective Interest Holders and Creditors
derivatively.

     

    1.39.         Debtor Releasing
Parties:  Collectively, the Debtor Parties and each of their
respective current and former directors, officers, employees, stockholders,
members, principals, subsidiaries, affiliates, predecessors, successors, and
assigns.

     

    1.40.         Delaware Certificate of
Formation:  The certificate of formation of the Delaware
limited liability company, into which Reorganized Aurora will be converted,
subject to Section 6.19(b) hereof, pursuant to the Delaware Conversion, to be
filed with the Secretary of State of Delaware after the Effective Date, the form
of which is to be attached as an exhibit to the Voting Agreement and included in
the Plan Supplement.

     

    1.41.         Delaware
Conversion:  The conversion of Reorganized Aurora from a Utah
limited liability company into a Delaware limited liability company to be
effected, subject to Section 6.19(b) hereof, after the Utah
Conversion.

     

    1.42.         DIP Facility:  The
debtor-in-possession credit facility established pursuant to a credit agreement,
dated as of October [7], 2009 and as may be amended, supplemented, or extended
from time to time, among Aurora, as borrower, the DIP Facility Guarantor, as
guarantor, the DIP Facility Lenders, as lenders, and the DIP Facility
Administrative Agent, as administrative agent to the DIP Facility Lenders,
together with (a) the documents, instruments, and agreements related thereto or
entered into in connection therewith, and (b) the DIP Facility Order and any
subsequent orders of the Bankruptcy Court related thereto or entered into in
connection therewith.

     

    1.43.         DIP Facility Administrative
Agent:  The Administrative Agent, as such term is defined in
the DIP Facility, which is currently BNP Paribas, and all successors and assigns
thereof.

     

    1.44.         DIP Facility
Claims:  All Claims of the DIP Facility Administrative Agent
and the DIP Facility Lenders against the Debtors represented by, related to,
arising under, or in connection with the DIP Facility and/or the DIP Facility
Guarantee, for all outstanding obligations thereunder incurred through and
including the Effective Date, after taking into account the sum of all payments
made to the DIP Facility Lenders prior to the Effective Date on account of such
Claims (if any).

    
      
         

      

      
        -5-

        
          

        

      

      
         

      

    

    1.45.         DIP Facility
Guarantee:  The guarantee executed and delivered by the DIP
Facility Guarantor in respect of Aurora’s obligations under the DIP
Facility.

     

    1.46.         DIP Facility
Guarantor:  HPPC, in its capacity as the guarantor pursuant to
the DIP Facility Guarantee of Aurora’s obligations under the DIP
Facility.

     

    1.47.         DIP Facility
Lenders:  The Lenders (as defined in the DIP Facility) in their
respective capacities as the lenders under the DIP Facility, and their
respective participants (if any), successors, and assigns
thereunder.

     

    1.48.         DIP Facility
Order:  The Final Order of the Bankruptcy Court, dated October
5, 2009, approving the DIP Facility.

     

    1.49.         Directors & Officers Liability
Insurance Policies:  Collectively, those certain directors and
officers liability insurance policies issued to Aurora, as
follows:  (1) Policy No. 00-330-92-04, underwritten by National Union
Fire Insurance Company of Pittsburg, Pa., effective October 31, 2008 - October
31, 2009; (2) Policy No. 8207-5267, underwritten by Federal Insurance Company,
effective October 31, 2008 - October 31, 2009; (3) runoff policy issued by
National Union Fire Insurance Company of Pittsburgh, Pa., with a six-year
effective date from date of trigger; and (4) runoff policy issued by Federal
Insurance Company, with a six-year effective date from date of trigger, and all
endorsements, tails, and other materials relating thereto, as the same has been
expanded from time to time.

     

    1.50.         Disclosure
Statement:  The disclosure statement and all supplements and
exhibits thereto that relate to the Plan and are approved by the Bankruptcy
Court pursuant to Bankruptcy Code § 1125, as the same may be amended or modified
by the Debtors from time to time pursuant to the Bankruptcy Code, the Bankruptcy
Rules, or the Local Bankruptcy Rules.

     

    1.51.         Disputed Claim:  A
Claim as to which a Proof of Claim has been filed, or deemed filed under
applicable law, as to which an objection has been or may be timely filed and
which objection, if timely filed, has not been withdrawn and has not been
overruled or denied by a Final Order.  A Claim shall be considered a
Disputed Claim in its entirety if (for among other reasons):  (i) the
amount of the Claim specified in the applicable Proof of Claim exceeds the
amount of any corresponding Claim scheduled by the Debtors in the Schedules or
in the applicable Debtor’s books and records; (ii) any corresponding Claim
scheduled by the Debtors in the Schedules has been scheduled as disputed,
contingent, unliquidated, or at $0, irrespective of the amount scheduled or as
set forth on the applicable Debtor’s books and records; (iii) no corresponding
Claim has been scheduled by the Debtors in the Schedules or is not set forth in
the applicable Debtor’s books and records; or (iv) such Proof of Claim has been
filed after the last date to timely do so as established either pursuant to a
Final Order of the Bankruptcy Court or as otherwise set forth in this Plan (as
applicable).

     

    1.52.         Disputed Claims
Reserve:  This term shall have the meaning set forth in Plan
Section 6.10(a).

    
      
         

      

      
        -6-

        
          

        

      

      
         

      

    

    1.53.         Disputed Class . . .
Claim:  Any Disputed Claim in the particular Class
described.

     

    1.54.         Distribution Record
Date:  The record date for purposes of making distributions
under the Plan on account of Allowed Claims, which date shall be the first
Business Day following the Confirmation Date or such other date designated as
such in the Confirmation Order.

     

    1.55.         Effective Date:  The
Business Day on which the Plan becomes effective as provided in Article VIII of
the Plan.

     

    1.56.         Employee Termination
Claims:  This term shall have the meaning set forth in Plan
Section 6.29.

     

    1.57.         Employees:  Collectively,
the present and former employees (including retirees) of either of the
Debtors.

     

    1.58.         Equity Compensation Plan for
Non-Employee Directors:  That certain equity compensation plan,
adopted and approved by Aurora in 2001, which provides that each non-employee
director of Aurora is entitled to receive options to purchase 100,000 shares of
Old Aurora Common Stock, issuable in increments of options to purchase 33,333
shares each year over a period of 3 years, so long as the director continues in
office.

     

    1.59.         Estate(s):  Individually,
the estate of each Debtor in these Cases, and, collectively, the estates of both
of the Debtors in these Cases, created pursuant to Bankruptcy Code §
541.

     

    1.60.         Executory
Contract:  Any executory contract or unexpired lease, subject
to Bankruptcy Code § 365, between either of the Debtors and any other Person or
Persons, specifically excluding any contracts or agreements entered into
pursuant to the Plan and any of the respective Debtors’ “oil and gas
leases.”

     

    1.61.         Existing Stock Option
Plans:  Collectively, the 2004 Equity Incentive Plan, the 2006
Stock Incentive Plan, the 1997 Stock Option Plan, and the Equity Compensation
Plan for Non-Employee Directors, and any other stock option plan of either of
the Debtors in existence as of the Confirmation Date.

     

    1.62.         Exit Credit
Facility:  That certain secured exit credit facility, together
with all documents, instruments, and agreements related thereto or entered into
in connection therewith, that may be entered into by the Reorganized Debtors, as
borrowers or guarantor (as applicable), the Exit Credit Facility Lenders, as
lenders, and the Exit Credit Facility Administrative Agent, as administrative
agent for the Exit Credit Facility Lenders, effective as of the Effective
Date.

     

    1.63.         Exit Credit Facility Administrative
Agent:  The Administrative Agent, as such term is defined in
the Exit Credit Facility, which is BNP Paribas, and all successors and assigns
thereof.

     

    1.64.         Exit Credit Facility
Guarantee:  Any guarantee that is to be executed and delivered
by the Exit Credit Facility Guarantor, concurrently with the execution and
delivery of any Exit Credit Facility, in respect of the borrower’s obligations
under the Exit Credit Facility, including, without limitation, the obligations
under the New Secured Notes and the outstanding Working Capital
Loans.

    
      
         

      

      
        -7-

        
          

        

      

      
         

      

    

    1.65.         Exit Credit Facility
Guarantor:  Reorganized HPPC, in its capacity as the guarantor
of Reorganized Aurora’s obligations under the Exit Credit Facility pursuant to
the Exit Credit Facility Guarantee.

     

    1.66.         Exit Credit Facility
Lenders:  Collectively, the lenders under the Exit Credit
Facility, and their respective participants, successors, and assigns
thereunder.

     

    1.67.         Final Order:  Any
order or judgment entered by the Bankruptcy Court or other court that has not
been reversed or stayed and as to which the time to appeal, petition for
certiorari, or move for reargument or rehearing has expired and as to which no
appeal, petition for certiorari, or other proceedings for reargument or
rehearing shall then be pending or as to which any right to appeal, petition for
certiorari, reargue, or rehear shall have been waived in writing in form and
substance satisfactory to the Debtors or, in the event that an appeal, writ of
certiorari, or reargument or rehearing thereof has been sought, such order or
judgment of the Bankruptcy Court or other applicable court shall have been
affirmed by the highest court to which such order or judgment was appealed, or
certiorari has been denied, or from which reargument or rehearing was sought,
and the time to take any further appeal, petition for certiorari, or move for
reargument or rehearing shall have expired;  provided, however, that the
possibility that a motion under Bankruptcy Code § 502(j), Rules 59 or 60 of the
Federal Rules of Civil Procedure, or any analogous rule under the Bankruptcy
Rules may be but has not then been filed with respect to such order or judgment
shall not cause such order or judgment not to be a Final Order.

     

    1.68.         First Lien
Loan:  That certain senior secured credit facility, dated as of
August 20, 2007, in an aggregate amount of up to $100 million, of which
approximately $72 million was outstanding as of the Petition Date, as the same
may have been further amended from time to time, by and between Aurora, as
borrower; the First Lien Loan Administrative Agent, as administrative agent,
sole lead arranger, and sole bookrunner; the First Lien Loan Lenders, as
lenders; and the First Lien Loan Guarantors, as guarantors, together with all
documents, instruments, and agreements related thereto or entered into in
connection therewith.

     

    1.69.         First Lien Loan Administrative
Agent:  The Administrative Agent, as such term is defined in
the First Lien Loan, which is currently BNP Paribas, and all successors and
assigns thereof.

     

    1.70.         First Lien Loan
Claims:  All Claims of the First Lien Loan Administrative Agent
and the First Lien Loan Lenders against the Debtors represented by, related to,
arising under, or in connection with the First Lien Loan and/or the First Lien
Loan Guarantees, for any and all outstanding obligations thereunder incurred
through and including the Effective Date, after taking into account the sum of
all payments made to the First Lien Loan Lenders prior to the Effective Date on
account of such Claims.

     

    1.71.         First Lien Loan
Guarantees:  The guarantees issued by the First Lien Loan
Guarantors of Aurora’s repayment obligations under the First Lien
Loan.

    
      
         

      

      
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    1.72.         First Lien Loan
Guarantors:  The Guarantors, as such term is defined in the
First Lien Loan, and all successors and assigns thereof.

     

    1.73.         First Lien Loan
Lenders:  The Lenders, as such term is defined in the First
Lien Loan, and all participants (if any), successors, and assigns
thereof.

     

    1.74.         General Unsecured
Claims:  Unless otherwise specified in this Plan, all Claims
against one or both of the Debtors; provided, however, that, in
each case, such Claims (a) are not (i) Secured Claims (as provided for, and
determined in accordance with, Bankruptcy Code § 506(a) (including any and all
DIP Facility Claims, First Lien Loan Claims, Second Lien Loan Claims, Class 2C
Claims, or NW Bank Secured Claims), (ii) Administrative Claims, (iii) Priority
Claims, (iv) Tax Claims, (v) Intercompany Claims, or (vi) Employee Termination
Claims; and (b) are not otherwise entitled to priority under the Bankruptcy Code
or any Final Order of the Bankruptcy Court.

     

    1.75.         Guarantees:  Collectively,
the DIP Facility Guarantee, the First Lien Loan Guarantee, and the Second Lien
Loan Guarantee.

     

    1.76.         Guarantors:  Collectively,
the DIP Facility Guarantor, the First Lien Loan Guarantors, and the Second Lien
Loan Guarantors.

     

    1.77.         Holder:  The
beneficial owner of any Claim or Interest.

     

    1.78.         HPPC:  Debtor Hudson
Pipeline & Processing Co., LLC, a Michigan limited liability.

     

    1.79.         Initial Distribution
Date:  A date not later than 30 days after the Effective Date
(or as soon thereafter as is practicable) or such other date as the Bankruptcy
Court may order.

     

    1.80.         Insured Claim:  Any
Claim arising from an incident or occurrence alleged to have occurred prior to
the Effective Date that is covered under an insurance policy applicable to the
Debtors or their businesses.

     

    1.81.         Intercompany
Claim:  (a) Any account reflecting intercompany book entries by
one Debtor with respect to the other Debtor or (b) any Claim that is not
reflected in such book entries and is held by a Debtor against the other
Debtor.

     

    1.82.         Interest:  An
ownership interest in either of the Debtors as evidenced by an equity security
(as such term is defined in Bankruptcy Code § 101(16)) of any Debtor, any rights
to any dividends or distributions as a result of such ownership, and any option,
warrant, or right to acquire any such ownership interest, including, without
limitation, any and all Claims (i) for damages arising from the rescission of
the purchase or sale of the Old Aurora Common Stock or the Old HPPC Interests,
or (ii) for reimbursement or contribution allowed under Bankruptcy Code § 502 on
account of such Claim, which Claims are subordinated pursuant to Bankruptcy Code
§ 510.

     

    1.83.         LIBOR:  Such term
shall have the same meaning that “Adjusted LIBO Rate” has under the First Lien
Loan.

    
      
         

      

      
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    1.84.         Lien:  Any lien,
security interest, or other charge or encumbrance of any kind, or any other type
of preferential arrangement, easement, right of way, or other encumbrance on
title to real or personal property.

     

    1.85.         Local Bankruptcy
Rules:  The Local Bankruptcy Rules for the Western District of
Michigan, effective February 1, 2007, as amended from time to time, and made
applicable to these Cases.

     

    1.86.         Management and Director Equity
Plan:  That certain new equity incentive plan, which may be
adopted by the Reorganized Debtors following the Effective Date.

     

    1.87.         Management Transition Services
Agreements:  Collectively, those agreements, which will be
substantially in the form as set forth in the Plan Supplement, by and between
the Debtors and/or the Reorganized Debtors (as applicable) and each of Barbara
Lawson, Rebecca Abbott, David Deneau, Jeffrey Deneau, and John Hunter, pursuant
to which such individuals shall provide transitional services to the Debtors
and/or the Reorganized Debtors (as applicable).

     

    1.88.         New Aurora Class A Common
Stock:  The shares of Class A common stock, par value $0.01 per
share, of Reorganized Aurora, to be issued and distributed in the manner
provided by the Plan and/or issued upon the exercise of the New
Warrants.

     

    1.89.         New Aurora Class B Common
Stock:  The shares of non-voting Class B common stock, par
value $0.01 per share, of Reorganized Aurora, to be issued and distributed in
the manner provided by the Management and Director Equity Plan.

     

    1.90.         New Aurora Common
Stock:  Collectively, the New Aurora Class A Common
Stock  and the New Aurora Class B Common Stock.

     

    1.91.         New Aurora Preferred
Stock:  The shares of preferred stock, par value $0.01 per
share, of Reorganized Aurora, to be issued and distributed in the manner
provided by the Plan.

     

    1.92.         New Secured
Notes:  Collectively, the (a) Tranche A Notes and (b) the
Tranche B Notes.

     

    1.93.         New Warrants:  Such
term shall have the meaning ascribed to it in Plan Section 6.13(e).

     

    1.94.         1997 Stock Option
Plan:  That certain stock option plan, adopted and approved by
Aurora in 1997, pursuant to which Aurora was authorized to issue compensatory
options to purchase up to 1,000,000 shares of Old Aurora Common
Stock.

     

    1.95.         Non-Debtor Intercompany
Claim:  Any claim, debt, or other obligation held by or against
either Debtor or any Affiliate, or subsidiary of either Debtor, by or against
any non-Debtor subsidiary or Affiliate of a Debtor.

    
      
         

      

      
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    1.96.         Non-Debtor Releasing
Parties:  Collectively, each and every Person that has held,
holds, or may hold a Claim or Interest and that receives a distribution under
this Plan or has its Claim Reinstated.

     

    1.97.         NW
Bank:  Northwestern Bank.

     

    1.98.         NW Bank
Agreements:  Collectively, the NW Bank LCs and the NW Bank
Note.

     

    1.99.         NW Bank
Claims:  Collectively, the NW Bank LCs Claim, the NW Bank Note
Secured Claim, and the NW Bank Note Deficiency Claim.

     

    1.100.       NW Bank
Collateral:  Collectively, the NW Bank LCs Collateral and the
NW Bank Note Collateral.

     

    1.101.       NW Bank
LCs:  The approximately $633,000
in principal amount of letters of credit that NW Bank issued on the Debtors’
account.

     

    1.102.       NW Bank LCs
Claim:  All Claims of NW Bank against the Debtors represented
by, related to, arising under, or in connection with the NW Bank LCs, for any
and all outstanding obligations thereunder incurred through and including the
Effective Date, after taking into account the sum of all payments made to NW
Bank prior to the Effective Date on account of such Claims.

     

    1.103.       NW Bank LCs
Collateral:  The approximately $160,000 in cash collateral
currently in one of Aurora’s bank accounts with NW Bank and a pledge of the
Debtors’ right to receive approximately $500,000, which collectively serve as
collateral for the Debtors’ obligations under the NW Bank LCs.

     

    1.104.       NW Bank Note:  That
certain promissory note issued by Aurora on September 19, 2005 to NW Bank, the
balance of which as of the Petition Date is approximately $2.6
million.

     

    1.105.       NW Bank Note
Collateral:  Aurora’s corporate headquarters located in
Traverse City, Michigan, which Aurora provided to NW Bank as collateral for the
NW Bank Note.

     

    1.106.       NW Bank Note Deficiency
Claim:  All Claims of NW Bank against Aurora for the
difference, if any, between (i) the aggregate amount owed by Aurora to NW for
any and all outstanding obligations under the NW Bank Note incurred through and
including the Effective Date, after taking into account the sum of all payments
made by Aurora to NW Bank prior to the Effective Date on account of the NW Bank
Note, and (ii) the amount of the NW Bank Note Secured Claim.

     

    1.107.       NW Bank Note Secured
Claim:  All Claims of NW Bank against Aurora represented by,
related to, arising under, or in connection with the NW Bank Note, for any and
all outstanding obligations thereunder incurred through and including the
Effective Date, after taking into account the sum of all payments made to NW
Bank by Aurora prior to the Effective Date on account of such Claims, but only
to the extent of the value of NW Bank’s interest in Aurora’s interests in the NW
Bank Note Collateral, as determined pursuant to Bankruptcy Code § 506(a) and, if
applicable, § 1129(b).

    
      
         

      

      
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    1.108.       NW Bank Secured
Claims:  Collectively, the NW Bank LCs Claim and the NW Bank
Note Secured Claim.

     

    1.109.       Old Aurora Common
Stock:  Collectively, the 250,000,000 authorized shares of
common stock of Aurora, with a $0.01 par value, of which 103,282,788 shares were
outstanding as of June 30, 2009, and any options (including, without limitation,
all options issued under any of the Existing Stock Option Plans), warrants, or
rights, contractual or otherwise, to acquire any shares of such
stock.

     

    1.110.       Old HPPC Interests: The limited liability
company membership interests of HPPC, of which 96% were owned by Aurora and the
remaining 4% were owned by Barry A. Riske and Longhorn Properties as of the
Petition Date, and any options, warrants, or rights, contractual or otherwise,
to acquire any additional membership interests of HPPC.

     

    1.111.       Old Stock of . .
..:  When used with reference to a particular Debtor or Debtors,
the common stock, preferred stock, or similar equity ownership interests (as
applicable) issued by such Debtor or Debtors and outstanding immediately prior
to the Petition Date.

     

    1.112.       Person:  An
individual, corporation, partnership, limited liability company, association,
joint stock company, joint venture, estate, trust, unincorporated organization,
government or any political subdivision thereof, or any other
entity.

     

    1.113.       Petition Date:  July
12, 2009, the date upon which the Debtors’ respective petitions for relief under
Chapter 11 commencing these Cases were filed.

     

    1.114.       PIK Interest:  Such
term shall have the meaning ascribed to it in Plan Section 6.13(g).

     

    1.115.       Plan:  This Joint
Plan of Reorganization proposed by the Debtors set forth herein, and all
supplements and exhibits hereto, as the same may be amended or modified by the
Debtors from time to time pursuant to, and in accordance with, the terms hereof,
the Bankruptcy Code, the Bankruptcy Rules, the Local Bankruptcy Rules, or any
applicable orders of the Bankruptcy Court.

     

    1.116.       Plan Documents:  The
documents and forms of documents specified or referenced in, and/or to be
executed by either of the Debtors and/or either of the Reorganized Debtors
pursuant to the terms of the Plan and/or the Exit Credit Facility, which
documents may include, among others, the Amended and Restated By-Laws; the
Amended and Restated Articles of Incorporation; the Amended and Restated LLC
Agreement; any and all documents establishing the terms and conditions of the
Exit Credit Facility, the New Secured Notes, the Working Capital Loans, and the
Exit Credit Facility Guarantee; any and all documents establishing the terms and
conditions of the New Aurora Preferred Stock, the New Aurora Class A Common
Stock, or the New Aurora Class B Common Stock; any and all documents
establishing the terms and conditions of the New Warrants; the Registration
Rights Agreement; the Voting Agreement; and any and all documents establishing
the terms and conditions of the Management and Director Equity Plan (if any); as
all such documents and forms of documents may be amended and/or supplemented
from time to time, all of which documents shall be in form and substance
satisfactory to the Debtors.

    
      
         

      

      
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    1.117.       Plan Rejection Bar
Date:  Such term shall have the meaning ascribed to it in Plan
Section 7.4(a).

     

    1.118.       Plan
Supplement:  The supplement to the Plan containing a
compilation of the draft forms and/or summaries of certain of the Plan Documents
and certain related lists, summaries, and/or schedules, as may be amended,
modified, or supplemented from time to time thereafter in accordance with the
Plan.

     

    1.119.       Priority
Claims:  All Claims that are entitled to priority pursuant to
Bankruptcy Code § 507(a) or (b) that are not Administrative Claims or Tax
Claims.

     

    1.120.       Professional(s):  Any
professional(s) employed in these Cases pursuant to Bankruptcy Code §§ 327, 328,
1103, or otherwise, and any professional(s) seeking compensation or
reimbursement of expenses in connection with these Cases pursuant to Bankruptcy
Code §§ 330, 331, and/or 503(b)(4).

     

    1.121.       Professional
Fees:  All fees due and owing to any Professional for
compensation or reimbursement of costs and expenses relating to services
incurred on and after the Petition Date and on and prior to the Effective
Date.

     

    1.122.       Proof of Claim:  Any
written statement filed in these Cases by a Creditor in which such Creditor sets
forth the amount purportedly owed and sufficient supporting details to identify
the basis for a Claim.

     

    1.123.       Pro
Rata:  Proportionately, so that a Pro Rata distribution with
respect to an Allowed Claim of a particular Class bears the same ratio to all
distributions (and, in the case of Disputed Claims, allocations) on account of a
particular Class or Classes, as the dollar amount of such Allowed Claim bears to
the dollar amount of all Allowed Claims and Disputed Claims (as applicable) in
such Class or Classes.

     

    1.124.       Record Date:  The
record date for voting on the Plan, which shall be __________ _, 2009, for
Holders of Allowed Claims in Class 2A or Class 2B.

     

    1.125.       Registration Rights
Agreement:  The registration rights agreement to be entered
into by Reorganized Aurora, substantially in the form to be included in the Plan
Supplement.

     

    1.126.       Reinstated or
Reinstatement:  Either (i) leaving unaltered the legal,
equitable, and contractual right to which a Claim entitles the Holder of such
Claim so as to leave such Claim unimpaired in accordance with Bankruptcy Code §
1124 or (ii) notwithstanding any contractual provision or applicable law that
entitles the Holder of such Claim to demand or receive accelerated payment of
such Claim after the occurrence of a default, (a) curing any such default that
occurred before or after the Petition Date, other than a default of a kind
specified in Bankruptcy Code § 365(b)(2); (b) reinstating the maturity of such
Claim as such maturity existed before such default; (c) compensating the Holder
of such Claim for any damages incurred as a result of any reasonable reliance by
such Holder on such contractual provision or such applicable law; or (d) not
otherwise altering the legal, equitable, or contractual rights to which such
Claim entitles the Holder of such Claim; provided, however, that any
contractual right that does not pertain to the payment when due of principal and
interest on the obligation on which such Claim is based, including, but not
limited to, financial covenant ratios, negative pledge covenants, covenants or
restrictions on merger or consolidation, and affirmative covenants regarding
corporate existence, prohibiting certain transactions or actions contemplated by
the Plan, or conditioning such transactions or actions on certain factors, shall
not be required to be reinstated in order to accomplish the
Reinstatement.

    
      
         

      

      
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    1.127.       Rejection
Claims:  All Claims arising as a result of a Debtor’s rejection
of an Executory Contract pursuant to Bankruptcy Code §§ 365 and 1123, subject to
the limitations provided in Bankruptcy Code § 502(b).

     

    1.128.       Released
Parties:  Collectively, (i) the Debtors and the Reorganized
Debtors; (ii) the First Lien Loan Lenders, the Second Lien Loan Lenders, the DIP
Facility Lenders, and the Administrative Agents, solely in their respective
capacities as such; (iii) BNP Paribas, in its capacity as (A) sole lead arranger
and sole bookrunner under the First Lien Loan, the Second Lien Loan, and the DIP
Facility and (B) issuing bank under the First Lien Loan and the DIP Facility;
(iv) the Creditors Committee and the members thereof, solely in their respective
capacities as such; (v) the current and former directors, officers,
stockholders, professionals, and employees of (a) the Debtors and (b) the
Reorganized Debtors; (vi) with respect to each of the foregoing Persons, such
Person’s predecessors, successors, and assigns, and current and former
directors, officers, employees, stockholders, members, subsidiaries, affiliates,
principals, agents, advisors, financial advisors, attorneys, accountants,
investment bankers, consultants, underwriters, appraisers, representatives, and
other professionals, in each case in their respective capacities as such; and
(vii) any Person claimed to be liable derivatively through any Person referred
to in clauses (i), (ii), (iii), (iv), (v) or (vi) of this Section
1.128.

     

    1.129.       Releasing Party or Releasing Parties:
Either a Non-Debtor Releasing Party or a Debtor Party (as applicable), or
collectively, the Non-Debtor Releasing Parties and the Debtor Parties (as
applicable).

     

    1.130.       Reorganized
Aurora:  Aurora, as reorganized on and after the Effective
Date.

     

    1.131.       Reorganized Aurora LLC
Agreement:  The Limited Liability Company Agreement of
Reorganized Aurora to become effective, subject to Section 6.19(b) hereof, after
the Effective Date upon the consummation of the Delaware Conversion, the form of
which is to be attached as an exhibit to the Voting Agreement and included in
the Plan Supplement.

     

    1.132.       Reorganized
Debtors:  Collectively, Reorganized Aurora and Reorganized
HPPC.

     

    1.133.       Reorganized
HPPC:  HPPC, as reorganized on and after the Effective
Date.

     

    1.134.       Schedules:  The
schedules of assets and liabilities and statements of financial affairs that
have been filed, or may be filed, in the Bankruptcy Court by the Debtors in
accordance with Bankruptcy Code § 521 and/or any applicable ruling of the
Bankruptcy Court, as any such schedules or statements (if any) may be amended or
supplemented from time to time in accordance with Bankruptcy Rule 1009 or an
order of the Bankruptcy Court.

    
      
         

      

      
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    1.135.       Second Lien
Loan:  That certain second lien term loan facility, in an
initial amount of up to $50 million, dated as of August 20, 2007, as the same
may have been amended from time to time, by and between Aurora, as borrower; the
Second Lien Loan Administrative Agent, as administrative agent; BNP Paribas as
the sole lead arranger and sole bookrunner; the Second Lien Loan Lenders, as
lenders; and the Second Lien Loan Guarantors, as guarantors, together with all
documents, instruments, and agreements related thereto or entered into in
connection therewith.

     

    1.136.       Second Lien Loan Administrative
Agent:  The Administrative Agent, as such term is defined in
the Second Lien Loan, which is currently Laminar Direct Capital, LLC, and all
successors and assigns thereof.

     

    1.137.       Second Lien Loan
Claims:  All Claims of the Second Lien Loan Administrative
Agent and the Second Lien Loan Lenders against the Debtors represented by,
related to, arising under, or in connection with the Second Lien Loan and/or the
Second Lien Loan Guarantees, for any and all outstanding obligations thereunder
incurred through and including the Effective Date, after taking into account the
sum of all payments made to the Second Lien Loan Lenders prior to the Effective
Date on account of such Claims.

     

    1.138.       Second Lien Loan
Guarantees:  The guarantees issued by the Second Lien Loan
Guarantors of Aurora’s repayment obligations under the Second Lien
Loan.

     

    1.139.       Second Lien Loan
Guarantors:  The Guarantors, as such term is defined in the
Second Lien Loan, and all successors and assigns thereof.

     

    1.140.       Second Lien Loan
Lenders:  The Lenders, as such term is defined in the Second
Lien Loan, and all participants (if any), successors, and assigns
thereof.

     

    1.141.       Secondary Liability
Claim:  A Claim that arises from a Debtor being liable as a
guarantor of, or otherwise being jointly, severally, or secondarily liable for,
any contractual, tort, or other obligation of another Debtor, including any
Claim based on:  (a) guarantees of collection, payment, or performance
(including, but not limited to, any of the Guarantees or any guarantee relating
to any Executory Contract); (b) indemnity bonds, obligations to indemnify, or
obligations to hold harmless; (c) performance bonds; (d) contingent liabilities
arising out of contractual obligations or out of undertakings (including any
assignment or other transfer) with respect to leases, operating agreements, or
other similar obligations made or given by a Debtor relating to the obligations
or performance of another Debtor; (e) vicarious liability; (f) liabilities
arising out of piercing the corporate veil, alter ego liability, or similar
legal theories; or (g) any other joint or several liability that any Debtor may
have in respect of any obligation that is the basis of a Claim.

     

    1.142.       Secured Claims:  All
Claims that are secured by a properly perfected and not otherwise avoidable Lien
on property in which an Estate has an interest or that is subject to setoff
under Bankruptcy Code § 553, solely to the extent of the value of the Claim
Holder’s interest in the applicable Estate’s interest in such property or to the
extent of the amount subject to setoff, as applicable, as determined pursuant to
Bankruptcy Code § 506(a) and, if applicable, § 1129(b); provided, however, that if the
Holder of a Secured Claim is entitled to and does timely elect application of
Bankruptcy Code § 1111(b)(2), then such Holder’s Claim shall be a Secured Claim
to the extent such Claim is Allowed.

    
      
         

      

      
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    1.143.       Securities Act:  The
Securities Act of 1933, as amended.

     

    1.144.       Tax Claims:  All
Claims that are entitled to priority under Bankruptcy Code
§ 507(a)(8).

     

    1.145.       Tranche A
Notes:  The $20 million of reinstated and modified indebtedness
previously funded and outstanding pursuant to the First Lien Loan, to be issued
by Reorganized Aurora under the Exit Credit Facility as secured tranche A notes,
and to be guaranteed by the Exit Credit Facility Guarantor pursuant to the Exit
Credit Facility Guarantee, and all security and other documents related thereto
or entered into in connection therewith.

     

    1.146.       Tranche B
Notes:  The $20 million of reinstated and modified indebtedness
previously funded and outstanding pursuant to the First Lien Loan, to be issued
by Reorganized Aurora under the Exit Credit Facility as secured tranche B notes,
and to be guaranteed by the Exit Credit Facility Guarantor pursuant to the Exit
Credit Facility Guarantee, and all security and other documents related thereto
or entered into in connection therewith.

     

    1.147.       Triggering
Event:  The passing of 18 months after the Effective
Date.

     

    1.148.       2004 Equity Incentive
Plan:  That certain equity incentive plan, adopted and approved
by Aurora in 2004, which plan provides for the grant of options or restricted
shares for compensatory purposes for up to 1,000,000 shares of Old Aurora Common
Stock.

     

    1.149.       2006 Stock Incentive
Plan:  That certain stock incentive plan, adopted and approved
by Aurora in 2006, which plan provides for the award of options or restricted
shares for compensatory purposes for up to 8,000,000 shares of Old Aurora Common
Stock.

     

    1.150.       Utah Articles of
Organization:  The certificate of formation of the Utah limited
liability company into which Reorganized Aurora will be converted, subject to
Section 6.19(b) hereof, pursuant to the Utah Conversion, to be filed with the
Secretary of State of Utah after the Effective Date, the form of which is to be
attached as an exhibit to the Voting Agreement and included in the Plan
Supplement.

     

    1.151.       Utah
Conversion:  The conversion of Reorganized Aurora from a Utah
corporation to a Utah limited liability company to be effected, subject to
Section 6.19(b) hereof, after the Effective Date.

     

    1.152.       Utility
Companies:  Those Persons who, in connection with the operation
of the Debtors’ business and the Debtors’ management of their properties,
supplied or provided electricity, water, sewer, telephone, communications, trash
collection, and/or other services of this general character to either of the
Debtors prior to the Petition Date.

    
      
         

      

      
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    1.153.       Voting
Agreement:  The voting agreement, substantially in the form to
be included in the Plan Supplement, to be entered into on the Effective Date by
Reorganized Aurora and the respective holders of the New Aurora Class A Common
Stock  and the New Aurora Preferred Stock, pursuant to which the
respective holders of the New Aurora Class A Common Stock  and the New
Aurora Preferred Stock will agree, subject to Section 6.19(b) hereof, to vote
all such shares to approve the Utah Conversion, the Delaware Conversion, and the
Reorganized Aurora LLC Agreement.

     

    1.154.       Voting
Deadline:  The deadline established by the Bankruptcy Court as
the last date to timely submit a Ballot for voting to accept or to reject the
Plan.

     

    1.155.       Working Capital
Loans:  That certain secured revolving working capital facility
component, in an initial amount of up to $5 million, to be provided under the
Exit Credit Facility, and to be guaranteed by the Exit Credit Facility Guarantor
pursuant to the Exit Credit Facility Guarantee.

     

    1.156.       Working Capital Loans
Notes:  The notes to be issued by Reorganized Aurora under the
Exit Credit Facility to the Exit Credit Facility Lenders in connection with, and
evidencing obligations under, the Working Capital Loans.

     

    
      ARTICLE
II

    

     

    
      CLASSIFICATION
OF CLAIMS AND INTERESTS

    

     

    2.1.           In
accordance with Bankruptcy Code § 1123(a)(1), Administrative Claims, DIP
Facility Claims, and Tax Claims have not been classified and are excluded from
the following Classes.  Article III of the Plan describes the
treatment of Administrative Claims, DIP Facility Claims, and Tax
Claims.  For the purposes of the Plan, Holders of Claims against, or
Interests in, the Debtors are grouped as follows in accordance with Bankruptcy
Code § 1122(a):

     

    2.2.           Class 1 — Priority
Claims.  Class 1 consists of all Priority Claims against either
of the Debtors.  Class 1 Claims shall be treated in the manner set
forth in Section 4.2 hereof.

     

    2.3.           Class 2 — Secured Claims Against One
or Both of the Debtors.

     

      
(a)           Class 2A – First Lien Loan
Claims.  Class 2A consists of all First Lien Loan
Claims.  Class 2A Claims shall be treated in the manner set forth in
Section 5.2 hereof.

     

     
(b)           Class 2B – Second Lien Loan
Claims.  Class 2B consists of all Second Lien Loan
Claims.  Class 2B Claims shall be treated in the manner set forth in
Section 5.3 hereof.

     

      
(c)           Class 2C — Other Secured Claims
Against Aurora or HPPC.  Class 2C consists of all Secured
Claims against Aurora and/or HPPC that are not otherwise classified in this
Article II.  Accordingly, Class 2C Claims do not include the NW Bank
Secured Claims or any Claims under, respectively, the First Lien Loan, the First
Lien Loan Guarantees, the Second Lien Loan, the Second Lien Loan Guarantees, the
DIP Facility, or the DIP Facility Guarantee, but do include any secured capital
leases of Aurora and/or HPPC.  Class 2C Claims shall be treated in the
manner set forth in Section 4.3 hereof.

    
      
         

      

      
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(d)           Class 2D — NW Bank Secured
Claims.  Class 2D consists of all NW Bank Secured
Claims.  Class 2D Claims shall be treated in the manner set forth in
Section 4.4 hereof.

     

    2.4.           Class 3 – General Unsecured Claims
Against Aurora or HPPC.

     

      
(a)           Class 3A — General Unsecured Claims
Against Aurora.  Class 3A
consists of all General Unsecured Claims against Aurora that are not otherwise
classified pursuant to this Article II.  Class 3A Claims shall be
treated in the manner set forth in Section 5.4 hereof.

     

     
(b)           Class 3B — General Unsecured
Claims Against HPPC.  Class 3B consists of all General Unsecured
Claims against HPPC that are not otherwise classified pursuant to this Article
II.  Class 3B Claims shall be treated in the manner set forth in
Section 5.5 hereof.

     

    2.5.           Class 4 – Old Aurora Common Stock
Interests.  Class 4 consists of all Interests arising under or
in connection with the Old Aurora Common Stock.  Class 4 Interests
shall be treated in the manner set forth in Section 5.6 hereof.

     

    2.6.           Class 5 — Intercompany
Claims.  Class 5 consists of all Intercompany
Claims.  Class 5 Claims shall be treated in the manner set forth in
Section 5.7 hereof.

     

    2.7.           Class 6 — Old HPPC
Interests.  Class 6 consists of all Old HPPC
Interests.  Class 6 Interests shall be treated in the manner set forth
in Section 5.8 hereof.

     

    
      ARTICLE
III

    

     

    
      TREATMENT
OF ADMINISTRATIVE

    

    
      CLAIMS,
DIP FACILITY CLAIMS, AND TAX CLAIMS

    

     

    3.1.           Administrative
Claims.  Each Holder of an Allowed Administrative Claim, other
than a Holder of an Allowed DIP Facility Claim (which Claims shall be treated
and satisfied in the manner set forth in Section 3.2 hereof), shall receive, in
full satisfaction, settlement, release, and discharge of, and in exchange for,
such Allowed Claim, Cash equal to the amount of such Allowed Claim on the later
of (i) the Initial Distribution Date and (ii) the date that is 10 days after the
Allowance Date, except to the extent that such Holder has agreed to a less
favorable treatment of such Allowed Claim; provided, however, that Allowed
Administrative Claims representing obligations incurred in the ordinary course
of the Debtors’ business and assumed by the Debtors shall be paid or performed
in accordance with the terms and conditions of the particular transactions and
any agreements related thereto.

     

    3.2.           DIP Facility
Claims:  DIP Facility Claims shall be Allowed Claims under the
Plan in the aggregate amount equal to all obligations under (i) the DIP Facility
(as against Aurora) and/or (ii) the DIP Facility Guarantee (as against the DIP
Facility Guarantor), as applicable, outstanding as of the Effective Date, as
agreed to by the DIP Facility Lenders and the Debtors, or in the event of a
dispute regarding such amount, as such amount has been determined by a Final
Order of the Bankruptcy Court.  On the Effective Date (or as soon
thereafter as is practicable), (a) each Holder of an Allowed DIP Facility Claim
shall receive, in full satisfaction, settlement, release, and discharge of, and
in exchange for, such Allowed Claim, Cash in an amount equal to such Holder’s
Pro Rata share of the aggregate amount of the outstanding Allowed DIP Facility
Claims, which payments shall collectively be in the amount equal to the
aggregate outstanding amount of the Allowed DIP Facility Claims, and (b) either
(i) the DIP Facility Lenders shall receive cancellation without draw of all
outstanding letters of credit issued under the DIP Facility or (ii) such
outstanding letters of credit shall be replaced with, to the extent practicable,
or supported by, new letters of credit to be issued under the Exit Credit
Facility.

    
      
         

      

      
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    3.3.           Tax Claims.  Each
Holder of an Allowed Tax Claim shall receive, in full satisfaction, settlement,
release, and discharge of, and in exchange for, such Allowed Claim, at the
election of the applicable Debtor, either (i) Cash equal to the amount of such
Allowed Claim on the later of (a) the Initial Distribution Date and (b) the date
that is 30 days after the Allowance Date, except to the extent such Holder has
agreed to a less favorable treatment of such Allowed Claim, or (ii) in
accordance with Bankruptcy Code § 1129(a)(9)(C), deferred Cash payments (a) of a
value, as of the Effective Date, equal to the amount of such Allowed Tax Claim,
(b) over a period not exceeding five years after the Petition Date, and (c) in a
manner not less favorable than the treatment of the most favored nonpriority
unsecured Claim provided for by the Plan, except to the extent such Holder has
agreed to a less favorable treatment of such Allowed Claim.

     

    
      ARTICLE
IV

    

     

    
      TREATMENT
OF CLASSES THAT ARE NOT IMPAIRED UNDER THE PLAN

    

     

    4.1.           Unimpaired
Classes.  Classes 1, 2C, and 2D are unimpaired under the
Plan.  Therefore, pursuant to Bankruptcy Code § 1126(f), the
Holders of Allowed Claims in such Classes are conclusively presumed to have
accepted the Plan and are not entitled to vote thereon.

     

    4.2.           Class 1 — Priority
Claims.  If not otherwise paid in full pursuant to a Final
Order of the Bankruptcy Court prior to the Confirmation Date, and except to the
extent such Holder has agreed to a less favorable treatment of such Allowed
Claim, each Holder of an Allowed Class 1 Claim shall receive, in full
satisfaction, settlement, release, and discharge of, and in exchange for, such
Allowed Claim, Cash equal to the amount of such Allowed Claim on the latest of
(i) the Initial Distribution Date, (ii) the date that is 30 days after the
Allowance Date of such Claim, and (iii) the date when such Allowed Claim becomes
due and payable according to its terms and conditions.

     

    4.3.           Class 2C — Other Secured Claims
Against Aurora or HPPC.  In full satisfaction, settlement,
release, and discharge of, and in exchange for, each Allowed Class 2C Claim, and
except to the extent such Holder has agreed to a less favorable treatment of
such Allowed Claim, at the election of the applicable Debtor, such Debtor shall
either:  (a) pay the amount of such Allowed Class 2C Claim against it
in full, in Cash, on the later of the Effective Date or the Allowance Date of
such Claim; (b) return the underlying collateral to the Holder of such Allowed
Class 2C Claim; (c) Reinstate such Allowed Class 2C Claim in accordance with the
provisions of Bankruptcy Code § 1124(2); (d) pay such Allowed Class 2C Claim in
full in the ordinary course; or (e) treat such Allowed Class 2C Claim in a
manner otherwise agreed to by the Holder thereof.

    
      
         

      

      
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    4.4.         Class 2D — NW Bank Secured
Claims.

     

    (a)  The NW Bank Note Secured
Claim:  The NW Bank Note Secured Claim shall be deemed an
Allowed Claim in an amount equal to the value of the NW Bank Note Collateral as
of the Effective Date, as determined pursuant to Bankruptcy Code §
506(a).  In full satisfaction, settlement, release, and discharge of,
and in exchange for, the NW Bank Note Secured Claim, on the Effective Date, or
as soon thereafter as is practicable, Aurora shall transfer ownership of the NW
Bank Note Collateral to the Holder of the NW Bank Secured Claim.  On
the Effective Date, the NW Bank Note and all outstanding notes and Liens issued
in connection with the NW Bank Note shall be cancelled and shall be deemed
terminated and of no force and effect.  The sum total of the value of
the distributions to be made to the Holder of the Allowed NW Bank Note Secured
Claim, as of the Effective Date, shall not exceed the amount of Allowed NW Bank
Note Secured Claims.

     

    (b)  The NW Bank LCs
Claim:  The NW Bank LCs Claim shall be deemed an Allowed Claim
in an amount equal to the value of the NW Bank LCs Collateral as of the
Effective Date, as determined pursuant to Bankruptcy Code §
506(a).  To the extent the Debtors or any other third party with a
right to do so has not fully drawn down upon the NW Bank LCs as of the Effective
Date, the Debtors shall, in full satisfaction, settlement, release, and
discharge of, and in exchange for the Allowed NW Bank LCs Claim, release from
the NW Bank LCs Collateral to NW Bank the amount, if any, equal to what has been
so drawn down prior to the Effective Date, and at the election of the Debtors,
either (1) the NW Bank LCs shall remain in full force and effect on and after
the Effective Date according to their terms for the full remaining undrawn
amount thereof, and NW Bank shall retain as collateral therefor the remaining NW
Bank LCs Collateral, or (2) the NW Bank LCs shall be terminated and NW Bank
shall receive cancellation without draw of the remaining undrawn NW Bank LCs, in
which case NW Bank shall have no further rights, claims, or interests in, any of
the remaining NW Bank LCs Collateral, which shall in turn be released to the
Debtors free and clear of any Liens, claims, or interests of NW
Bank.  To the extent the Debtors or any other third party with a right
to do so has fully drawn down upon the NW Bank LCs as of the Effective Date, in
full satisfaction, settlement, release, and discharge of, and in exchange for
the Allowed NW Bank LCs Claim, the Debtors shall release from the NW Bank LCs
Collateral to NW Bank an amount equal to what has been so drawn down prior to
the Effective Date, and the NW Bank LCs shall be terminated, NW Bank shall have
no further rights, claims, or interests in, any of the remaining NW Bank LCs
Collateral or other Claims against the Debtors or the Reorganized Debtors with
respect thereto, and all outstanding notes and Liens issued in connection with
the NW Bank LCs shall be cancelled and shall be deemed terminated and of no
force and effect.  The sum total of the value of the distributions to
be made to the Holder of the Allowed NW Bank LCs Claim, as of the Effective
Date, shall not exceed the amount of Allowed NW Bank LCs Claims.

     

    4.5.         Special Provision Regarding
Unimpaired Claims.  Except as may otherwise be provided in the
Plan, the Confirmation Order, any other order of the Bankruptcy Court, or any
Plan Document, nothing shall affect the Debtors’ or the Reorganized Debtors’ (as
applicable) rights and defenses, both legal and equitable, with respect to any
Claim that is not impaired under this Plan, including, but not limited to, all
rights with respect to legal and equitable defenses to, and/or setoffs or
recoupments against, such Claim.

    
      
        
        

         

      

      
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      ARTICLE
V

    

     

    
      TREATMENT
OF CLASSES THAT ARE IMPAIRED UNDER THE PLAN

    

     

    5.1.         Impaired
Classes.  Classes 2A, 2B, 3A, 3B, 4, 5, and 6 are impaired
under the Plan.  Holders of Allowed Claims in Classes 2A, 2B, 3A, or
3B are entitled to vote to accept or reject the Plan.  Holders of
Claims or Interests (as applicable) in Classes 4, 5, and 6 shall receive no
distribution under the Plan (other than as set forth in Section 5.7 hereof with
respect to Class 5 Intercompany Claims); therefore, the Holders of Claims or
Interests (as applicable) in those Classes are deemed to have rejected the Plan
and, pursuant to Bankruptcy Code § 1126(g), are not entitled to vote to accept
or reject the Plan.

     

    5.2.         Class 2A — First Lien Loan
Claims.

     

    (a) The
First Lien Loan Claims shall be deemed Allowed Claims in the aggregate amount of
accrued and unpaid principal, interest, fees, expenses, and other obligations
under the First Lien Loan up to the Effective Date (subject to Bankruptcy Code §
506(b)).

     

    (b) On
the Effective Date, or as soon thereafter as is practicable, each Holder of an
Allowed Class 2A Claim as of the Distribution Record Date, or an affiliate of
such Holder designated by such Holder prior to the Effective Date, shall receive
(i) as reinstatement and modification of a portion of such Allowed Claim against
each of the Debtors, such Holder’s Pro Rata share of the New Secured Notes, and
(ii) in full satisfaction, settlement, release, and discharge of, and in
exchange, for the remaining portion of such Allowed Claim against each of the
Debtors, such Holder’s Pro Rata share of [32] million shares of the New Aurora
Preferred Stock.  Such shares of New Aurora Preferred Stock issued on
such date shall, in the aggregate, represent, as of such date, 100% of the
outstanding shares of New Aurora Preferred Stock, and shall not be subject to
any dilution or further issuance of any additional shares of New Aurora
Preferred Stock except as expressly provided under Plan Section
6.15(f).  For purposes of this Section 5.2(b), "affiliate" means, with
respect to a Holder, a subsidiary of a Holder or any other entity that is
directly or indirectly owned by the same parent entity that directly or
indirectly owns the Holder.

     

    (c)  The
Allowed First Lien Loan Claims shall be considered Allowed Claims against (a)
Aurora (in its capacity as the borrower under the First Lien Loan) and (b) HPPC,
in its capacity as a First Lien Loan Guarantor.  The sum total of the
value of the distributions to be made to the Holders of Allowed First Lien Loan
Claims, as of the Effective Date, shall not exceed the aggregate amount of
Allowed First Lien Loan Claims.

     

    (d)  Pursuant
to Section 4.01 of the First Lien Loan, and as set forth further in Plan
Sections 6.6(d), 6.13, 6.15, and 6.20, the total distributions of the New
Secured Notes and the [32] million shares of New Aurora Preferred Stock to be
provided for under this Plan Section 5.2 on account of Allowed First Lien Loan
Claims, shall be made by the Reorganized Debtors on the Effective Date to the
First Lien Loan Administrative Agent for subsequent distribution on a Pro Rata
basis to the Holders of Allowed First Lien Loan Claims (or such Holder’s
affiliate, as provided for in Plan Section 5.2(b)) as of the Distribution Record
Date.

    
      
        
        

         

      

      
        -21-

        
          

        

      

      
         

      

    

    (e)  On
the Effective Date, or as soon thereafter as practicable, upon full satisfaction
of the requirements set forth in Plan Section 5.2(b), (i) $20 million of the
Allowed Class 2A Claims shall be reinstated and modified as a funded debt
tranche in the form of the Tranche A Notes under the Exit Credit Facility, (ii)
another $20 million of the Allowed Class 2A Claims shall be reinstated and
modified as another funded debt tranche in the form of the Tranche B Notes under
the Exit Credit Facility, and (iii) the remaining portion of the Class 2A Claims
shall be exchanged with Reorganized Aurora for the New Aurora Preferred Stock
and subsequently be cancelled by Reorganized Aurora.

     

    5.3.         Class 2B — Second Lien Loan
Claims.

     

    (a)  The
Second Lien Loan Claims shall be deemed Allowed Claims in the aggregate amount
of accrued and unpaid principal, interest, fees, expenses, and other obligations
under the Second Lien Loan up to the Effective Date (subject to Bankruptcy Code
§ 506(b)).

     

    (b) 
On the Effective Date, or as soon thereafter as is practicable, each Holder of
an Allowed Class 2B Claim as of the Distribution Record Date, or an affiliate of
such Holder designated by such Holder prior to the Effective Date, shall receive
in full satisfaction, settlement, release, and discharge of, and in exchange for
such Allowed Claim against each of the Debtors, such Holder’s Pro Rata share of
[56] million shares of New Aurora Class A Common Stock.  Such shares
of New Aurora Class A Common Stock issued on such date shall, in the aggregate,
represent, as of the Effective Date, 100% of the outstanding shares of New
Aurora Class A Common Stock, subject to dilution on a pari passu basis with all
other Holders of shares of New Aurora Class A Common Stock  upon the
issuance of shares of New Aurora Class A Common Stock  upon the
exercise of the New Warrants.  For purposes of this Section 5.3(b),
"affiliate" means, with respect to a Holder, a subsidiary of a Holder or any
other entity that is directly or indirectly owned by the same parent entity that
directly or indirectly owns the Holder.

     

    (c)  The
Allowed Second Lien Loan Claims shall be considered Allowed Claims against (a)
Aurora (in its capacity as the borrower under the Second Lien Loan) and (b)
HPPC, in its capacity as a Second Lien Loan Guarantor.  The sum total
of the value of the distributions to be made to the Holders of Allowed Second
Lien Loan Claims, as of the Effective Date, shall not exceed the aggregate
amount of Allowed Second Lien Loan Claims.

     

    (d)  Pursuant
to Section 4.01 of the Second Lien Loan, and as set forth further in Plan
Sections 6.6(d) and 6.14, the total distribution of the [56] million shares of
New Aurora Class A Common Stock  to be provided for under this Plan
Section 5.3 on account of Allowed Second Lien Loan Claims shall be made by the
Reorganized Debtors on the Effective Date to the Second Lien Loan Administrative
Agent for subsequent distribution on a Pro Rata basis to the Holders of Allowed
Second Lien Loan Claims (or such Holder’s affiliate, as provided for in Plan
Section 5.3)(a))  as of the Distribution Record Date.

     

    (e)  Upon
full satisfaction of the requirements set forth in Plan Section 5.3(b), all
Class 2B Claims and all outstanding notes and Liens issued in connection with
the Second Lien Loan and the Second Lien Loan Guarantees (if any) shall be
cancelled and shall be deemed terminated and of no force and
effect.

    
      
        
        

         

      

      
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    5.4.           Class 3A — General Unsecured Claims
Against Aurora.  If not otherwise paid in full pursuant to a
Final Order of the Bankruptcy Court prior to the Confirmation Date, and except
to the extent such Holder has agreed to a less favorable treatment of such
Allowed Claim, each Holder of an Allowed Class 3A Claim shall receive, in full
satisfaction, settlement, release, and discharge of, and in exchange for, such
Allowed Claim, such Holder’s Pro Rata Share of $150,000 on the latest of (i) the
Initial Distribution Date, (ii) the date that is 30 days after the Allowance
Date of such Claim, and (iii) the date when such Allowed Claim becomes due and
payable according to its terms and conditions.  On the Effective Date,
all Class 3A Claims shall be cancelled and be deemed terminated and of no force
and effect.

     

    5.5.           Class 3B — General Unsecured Claims
Against HPPC.  If not otherwise paid in full pursuant to a
Final Order of the Bankruptcy Court prior to the Confirmation Date, and except
to the extent such Holder has agreed to a less favorable treatment of such
Allowed Claim, each Holder of an Allowed Class 3B Claim shall receive, in full
satisfaction, settlement, release, and discharge of, and in exchange for, such
Allowed Claim, such Holder’s Pro Rata Share of $50,000 on the latest of (i) the
Initial Distribution Date, (ii) the date that is 30 days after the Allowance
Date of such Claim, and (iii) the date when such Allowed Claim becomes due and
payable according to its terms and conditions; provided, however, that no
Holder of a Class 3B Claim shall be entitled to receive a distribution in Cash
that exceeds 100% of the Allowed amount of its Claim.  On the
Effective Date, all Class 3B Claims shall be cancelled and be deemed terminated
and of no force and effect.

     

    5.6.           Class 4 — Old Aurora Stock
Interests.  On the Effective Date, all outstanding shares of
Old Aurora Common Stock and all other Old Stock of Aurora shall be cancelled and
shall be deemed terminated and of no force and effect.  In addition,
without limiting the generality of the foregoing, any and all options or rights
to exercise warrants or options or to otherwise acquire any shares of Old Aurora
Common Stock or any other Interest in Aurora, under any of the Existing Stock
Option Plans or otherwise, shall be cancelled and be deemed terminated and of no
force and effect.  No distribution of any kind shall be made on
account of the Old Aurora Common Stock or any other Old Stock of Aurora under
the Plan.

     

    5.7.           Class 5 — Intercompany
Claims.  Class 5 Claims shall be Allowed in the amounts as
reflected on the Debtors’ respective books and records; provided, however, that all
Intercompany Claims shall be reviewed by the Debtors and adjusted, continued, or
discharged, as the Debtors determine, as appropriate (by, among other things,
releasing such claims, contributing them to capital, issuing a dividend, or
leaving them unimpaired), taking into account, among other things, the
distribution of consideration under the Plan and the economic condition of the
Reorganized Debtors, among other things.  The Holders of Intercompany
Claims shall not be entitled to participate in any of the distributions on
account of Claims under Sections 5.2, 5.3, 5.4, or 5.5 hereof and shall only be
entitled to the treatment provided in this Section 5.7.

     

    5.8.           Class 6 — Old HPPC
Interests.  On the Effective Date, all outstanding Old HPPC
Interests or any other Old Stock of HPPC shall be cancelled and shall be deemed
terminated and of no force and effect.  In addition, without limiting
the generality of the foregoing, any and all options or rights to exercise
warrants or options or to otherwise acquire any Old HPPC Interests or any other
Interest in HPPC shall be cancelled and be deemed terminated and of no force and
effect.  No distribution of any kind shall be made on account of the
Old HPPC Interests under the Plan to the Holders of such
Interests.  Notwithstanding the foregoing, 100% of the new equity in
Reorganized HPPC shall be issued to Reorganized Aurora.

    
      
        
        

         

      

      
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    5.9.         Special Provision Regarding Impaired
Claims.  Except as may otherwise be provided in the Plan
(including, without limitation, Plan Section 6.27(a)), the Confirmation Order,
any other order of the Bankruptcy Court, or any Plan Document, nothing shall
affect the Debtors’ or the Reorganized Debtors’ (as applicable) rights and
defenses, both legal and equitable, with respect to any Claims that are impaired
under this Plan, including, but not limited to, all rights with respect to legal
and equitable defenses to, and/or setoffs or recoupments against, such
Claims.

     

    
      ARTICLE
VI

    

     

    
      MEANS
FOR IMPLEMENTATION OF THE PLAN

    

     

    6.1.         Boards of Directors or Managers of
the Reorganized Debtors.

     

    (a)  As
of the Effective Date, Reorganized Aurora shall initially have a seven-person
Board of Directors consisting of the following designations:  (i) five
directors to be designated by the Second Lien Loan Administrative Agent on
behalf of the Second Lien Loan Lenders, and (ii) two directors to be designated
by the First Lien Loan Administrative Agent, on behalf of the First Lien Loan
Lenders.  The names of the initial anticipated members of the Board of
Directors of Reorganized Aurora shall be disclosed to the Bankruptcy Court
pursuant to Bankruptcy Code § 1129(a)(5) on or before the Confirmation Date,
unless some later date is permitted by the Bankruptcy
Court.  Reorganized Aurora shall be the initial manager of Reorganized
HPPC.

     

    (b)  Upon
the occurrence of the Triggering Event, the holders of the New Aurora Preferred
Stock shall have the right to thereafter designate five directors to the Board
of Directors of Reorganized Aurora, and the number of directors designated by
the holders of the New Aurora Class A Common Stock  shall be reduced
to two.

     

    (c)  Subject
to the voting rights to be afforded to the holders of the New Aurora Preferred
Stock, the boards of directors of the Reorganized Debtors shall have full power
and authority to manage the respective businesses and affairs of the Reorganized
Debtors.

     

    6.2.         Ownership of Reorganized HPPC and
non-Debtor Subsidiaries or Affiliates.

     

    (a) On
the Effective Date, 100% of the new membership interests in Reorganized HPPC
shall be issued to Reorganized Aurora.

     

    (b) In
addition (other than with respect to any stock interests cancelled, sold, or
otherwise transferred by either of the Debtors on or prior to the Effective
Date), on the Effective Date, each Reorganized Debtor shall own and retain its
equity interests in any non-Debtor subsidiaries or Affiliates (to the extent
that any such non-Debtor subsidiary or Affiliate has not been dissolved, sold,
or otherwise transferred under applicable law prior to the Effective Date) to
the same extent that the applicable Debtor owned an equity interest in such
non-Debtor subsidiary or Affiliate prior to the Effective
Date.  Without limiting the generality of the foregoing, on the
Effective Date, Reorganized Aurora shall directly or indirectly own, to the same
extent Aurora did as of the Effective Date, interests in Aurora Indiana, LLC;
Aurora Kentucky, LLC; AOG Michigan, LLC; Aurora Operating, LLC; Celebration
Mining Company; Circle Oil, LLC; and Indiana Royalty Trustory, LLC (to the
extent that any such non-Debtor subsidiary or Affiliate has not been dissolved,
sold, or otherwise transferred under applicable law prior to the Effective
Date).

    
      
        
        

         

      

      
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    6.3.         Issuance of New Securities; Execution and
Delivery of Plan Documents.

     

    (a)   On
the Effective Date, Reorganized Aurora shall issue the New Aurora Class A Common
Stock and the New Aurora Preferred Stock, and the Reorganized Debtors shall
issue notes (including, without limitation, the New Secured Notes and the
Working Capital Loans Notes) and may issue the New Warrants (defined below in
Plan Section 6.13(e)), in each case, in connection with the Exit Credit
Facility, the Exit Credit Facility Guarantee, or otherwise in connection with
any other Plan Document.  In addition, Reorganized HPPC shall issue
100% of its membership interests to Reorganized Aurora.  The issuance
of (i) the New Aurora Class A Common Stock (including, but not limited to, the
issuance of any shares of stock issued upon the exercise of the New Warrants),
the New Aurora Preferred Stock by Reorganized Aurora (including, pursuant to
Sections 5.2, 5.3, 6.14, 6.15, and 6.20 hereof), and of the capital stock of
Reorganized HPPC, pursuant to this Plan, or (ii) the New Aurora Class B Common
Stock and any and all notes (including the New Secured Notes and the Working
Capital Loans Notes) or warrants (including the New Warrants) under or in
connection with the Exit Credit Facility or the Exit Credit Facility Guarantee,
or otherwise by either of the Reorganized Debtors, shall all be authorized
hereby without the need for any further corporate action or court
order.

     

    (b)   The
execution and delivery by the Debtor(s) or the Reorganized Debtor(s) party
thereto (as applicable) of all Plan Documents (including, without limitation,
the Exit Credit Facility, the New Secured Notes, the Working Capital Loans
Notes, the Exit Credit Facility Guarantee, any document memorializing the
Management and Director Equity Plan or the terms and conditions of the New
Aurora Class A Common Stock, the New Aurora Class B Common Stock, the New Aurora
Preferred Stock, the New Warrants, the Registration Rights Agreement, the Voting
Agreement, and/or any other agreement entered into, or instrument, security
interest, guarantee, or note issued in connection with any of the foregoing, any
other Plan Document, and any other document reasonably necessary or appropriate
to effectuate the events contemplated herein and therein), is hereby authorized
without the need for any further corporate action or court order.  All
such Plan Documents shall become effective and binding upon the parties thereto
simultaneously in accordance with their respective terms and conditions as of
the Effective Date.

    
      
        
        

         

      

      
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    6.4.         Corporate Governance and Corporate
Action.

     

    (a)  The Amended and Restated Articles of
Incorporation, the Amended and Restated By-Laws, and the Amended and Restated
LLC Agreement.  On or before the Effective Date, the
Reorganized Debtors shall, as applicable (i) file the Amended and Restated
Articles of Incorporation and the Amended and Restated LLC Agreement with the
appropriate state officials in accordance with applicable state law and (ii)
adopt the Amended and Restated By-Laws.  The Amended and Restated
Articles of Incorporation shall, among other things, (i) set forth the
respective terms of the New Aurora Preferred Stock and the New Aurora Common
Stock, (ii) provide that the number of authorized shares of New Aurora Preferred
Stock shall be [45] million and of New Aurora Common Stock  shall be
[85] million, and (iii) provide that the par value of each of the New Aurora
Preferred Stock and the New Aurora Class A Common Stock  shall be
$0.01.  After the Effective Date, the Reorganized Debtors may amend
and restate their (as applicable) respective Amended and Restated Articles of
Incorporation, Amended and Restated By-Laws, Amended and Restated LLC Agreement,
and/or other constituent documents as permitted by the governing state general
corporation law or limited liability company law (as applicable) and the
applicable agreements and constituent documents (including the Amended and
Restated Articles of Incorporation, the Amended and Restated By-Laws, and the
Amended and Restated LLC Agreement) of the Reorganized Debtors.

     

    (b)  Corporate
Action.  On, before, or after the Effective Date, all actions
reasonably necessary and desirable to effectuate, implement, or
adopt:  the Exit Credit Facility; the New Secured Notes; the Working
Capital Loans Notes; the Exit Credit Facility Guarantee; the issuance of the New
Aurora Common Stock (including any shares of stock issued upon the exercise of
the New Warrants), the New Aurora Preferred Stock, and the New Warrants; the
Management and Director Equity Plan; the Registration Rights Agreement; the
Voting Agreement; the reservation of authorized but unissued shares of New
Aurora Class A Common Stock for  issuance upon the exercise of the New
Warrants or otherwise; the adoption and/or filing (as applicable) of the Amended
and Restated Articles of Incorporation, the Amended and Restated By-Laws, the
Amended and Restated LLC Agreement, or similar constituent documents; the
selection of the directors, officers, and/or managers of the respective
Reorganized Debtors; the transfer of the NW Bank Collateral to the Holder of the
Allowed Class 2D Claims (subject to the terms and conditions of the Plan,
including, without limitation Section 4.4(b) thereof); the entry into the
Management Transition Services Agreements; and all other actions or transactions
contemplated by the Plan, the Plan Documents, or such other documents, and all
actions reasonably necessary and desirable to effectuate any of the foregoing,
shall be authorized and approved in all respects hereby without the need for any
further corporate or similar action, or court order.  All matters
provided for in the Plan involving the corporate structure, assets, and/or
operations of the Debtors, the Reorganized Debtors, and any corporate or similar
action required by the Debtors or the Reorganized Debtors in connection with the
Plan or the Plan Documents shall be deemed to have occurred and shall be in
effect, without any requirement of further action by the respective security
holders, members, officers, managers, or directors of the Debtors or the
Reorganized Debtors.  After the Confirmation Date and on or prior to
the Effective Date, the appropriate members of the Boards of Directors and/or
managers, members, or officers of the Debtors and the Reorganized Debtors are
authorized and directed to issue, execute, and deliver the agreements,
documents, securities, certificates, and instruments contemplated by the Plan
and/or the Plan Documents in the name of and on behalf of the applicable
Debtor(s) or Reorganized Debtor(s) (as applicable).

     

    6.5.         Administration of the
Plan.

     

    (a) After
the Effective Date, each of the Reorganized Debtors is authorized, respectively,
to perform those responsibilities, duties, and obligations set forth herein,
including, without limitation, making distributions as provided under the Plan,
objecting to the allowance of any Claim, and prosecuting any litigation
pertaining thereto, to pay such Claims as may be later Allowed, all as
contemplated by the dispute resolution procedures contained in Plan Section
6.10, and overseeing and governing the continuing affairs and operations of the
Reorganized Debtors on a going-forward basis.

    
      
        
        

         

      

      
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    (b) The
Reorganized Debtors may retain such management, law firms, accounting firms,
experts, advisors, agents, consultants, investigators, appraisers, auctioneers,
or other professionals as they may deem reasonably necessary or appropriate,
including, without limitation, a transfer or disbursing agent, to aid them in
the performance of their responsibilities pursuant to the terms of the
Plan.  It shall not be a requirement that any such parties retained by
either of the Reorganized Debtors be a “disinterested person” (as such term is
defined in Bankruptcy Code § 101(14)), and such retained parties may
include Professionals or other Persons who had previously been active in these
Cases on behalf of any Debtor, Creditor, Interest Holder, the Creditors
Committee, or other constituency herein.  Without limiting the
generality of the foregoing, following the issuance of the New Warrants, the
Reorganized Debtors may arrange for a third party to serve as the New Warrant
agent.

     

    (c) The
Reorganized Debtors shall be responsible for filing all federal, state, and
local tax returns for the Debtors and for the Reorganized Debtors.

     

    (d) To
the extent the manner of performance is not specified herein, the Debtors and
the Reorganized Debtors shall have the discretion to carry out and perform all
other obligations or duties imposed on them by, or actions contemplated or
authorized by, the Plan, any Plan Document, or by law in any manner their
respective Boards of Directors, managers, or officers so choose.

     

    6.6.         Provisions Relating to the Existing
Old Aurora Common Stock, the NW Bank Agreements, and the Credit
Facilities.

     

    (a)  On
the Effective Date (and solely with respect to the DIP Facility, upon the
payment in full of the DIP Facility Claims with proceeds from the Working
Capital Loans or otherwise), except as expressly otherwise set forth in the Plan
(including Section 4.4(b) hereof), any and all notes issued in connection with
any of the Credit Facilities or any of the Guarantees; the Old Aurora Common
Stock; the NW Bank Agreements; any other Interests in Aurora; the Existing Stock
Option Plans; and any other options, warrants, calls, subscriptions, or other
similar rights or other agreements or commitments, contractual or otherwise,
obligating either of the Debtors to issue, transfer, or sell any shares of Old
Aurora Common Stock or any other Interest in Aurora or HPPC, shall be
automatically canceled and deemed terminated, extinguished, and of no further
force and effect without further act or action under any applicable agreement,
law, regulation, order, or rule, and the Holders thereof or the parties thereto
shall have no rights, and such instruments or agreements shall evidence no
rights except the right to receive the distributions (if any) to be made to the
Holders of such instruments under this Plan.

    
      
        
        

         

      

      
        -27-

        
          

        

      

      
         

      

    

    (b) 
No Holder of any notes issued in connection with any of the Credit Facilities or
any of the Guarantees shall be entitled to any distribution under the Plan
unless and until such Holder has first surrendered or caused to be surrendered
any such notes or Guarantees to the applicable Administrative Agent, which in
turn shall surrender any and all such notes or Guarantees to the Debtors or the
Reorganized Debtors, or, in the event that such original notes or Guarantees
have been lost, destroyed, stolen, or mutilated, has first executed and
delivered an affidavit of loss and indemnity with respect thereto in a form
customarily utilized for such purposes that is reasonably satisfactory to the
Debtors or the Reorganized Debtors, and, in the event the Debtors or the
Reorganized Debtors so request, has first furnished a bond in form and substance
(including, without limitation, amount) reasonably satisfactory to the Debtors
or the Reorganized Debtors (as applicable).  If a Holder has actual
possession of any note or Guarantee issued in connection with any Credit
Facility or any of the Guarantees, then such Holder must physically surrender or
cause to be surrendered its note(s) or Guarantee(s) to the applicable
Administrative Agent for subsequent distribution to the Debtors or the
Reorganized Debtors (as applicable), in accordance with the procedures required
by the Debtors.  As soon as practicable after such surrender of the
applicable note or Guarantee to the Debtors (or the Reorganized Debtors), or
such delivery of an affidavit of loss and indemnity and such furnishing of a
bond as provided in this Section 6.6(b), the Debtors or the Reorganized Debtors
(as applicable) shall make the distributions provided in the Plan with respect
to the applicable Allowed Claim(s) (as and to the extent as set forth in the
Plan).  Promptly upon the surrender of such instruments, the Debtors
or the Reorganized Debtors (as applicable) shall cancel any and all notes issued
in connection with any of the Credit Facilities or any of the Guarantees (if
any).

     

    (c)  Except
as otherwise set forth in Section 4.4(b) hereof, no Holder of any notes issued
in connection with any of the NW Bank Agreements shall be entitled to any
distribution under the Plan unless and until such Holder has first surrendered
or caused to be surrendered any such notes to the Debtors or the Reorganized
Debtors, or, in the event that such original notes have been lost, destroyed,
stolen, or mutilated, has first executed and delivered an affidavit of loss and
indemnity with respect thereto in a form customarily utilized for such purposes
that is reasonably satisfactory to the Debtors or the Reorganized Debtors, and,
in the event the Debtors so request, has first furnished a bond in form and
substance (including, without limitation, amount) reasonably satisfactory to the
Debtors.  If a Holder has actual possession of any note issued in
connection with any NW Bank Agreement, then such Holder must physically
surrender or cause to be surrendered its note(s) to the Debtors or the
Reorganized Debtors (as applicable), in accordance with the procedures required
by the Debtors.  As soon as practicable after such surrender of the
applicable note to the Debtors (or the Reorganized Debtors), or such delivery of
an affidavit of loss and indemnity and such furnishing of a bond as provided in
this Section 6.6(c), the Debtors or the Reorganized Debtors (as applicable)
shall make the distributions provided in the Plan with respect to the applicable
Allowed Claim(s) (as and to the extent as set forth in the
Plan).  Promptly upon the surrender of such instruments, the Debtors
or the Reorganized Debtors (as applicable) shall cancel any and all notes issued
in connection with any of the NW Bank Agreements.

    
      
        
        

         

      

      
        -28-

        
          

        

      

      
         

      

    

    (d)  All
distributions under the Plan on account of the Allowed First Lien Loan Claims
shall initially be distributed to the First Lien Loan Administrative Agent for
further distribution to the Holders of Allowed First Lien Loan Claims as of the
Distribution Record Date, pursuant to the terms and subject to the conditions of
the First Lien Loan and the Plan.  Upon the delivery of the foregoing
distributions to the First Lien Loan Administrative Agent, the Debtors and the
Reorganized Debtors shall be released of all liability with respect to their
obligation to make such delivery.  The First Lien Loan Administrative
Agent shall thereafter take all steps reasonably necessary and appropriate to
effectuate such further distribution thereof to the Holders of the Allowed First
Lien Loan Claims.  Similarly, all distributions under the Plan on
account of the Allowed Second Lien Loan Claims shall initially be distributed to
the Second Lien Loan Administrative Agent for further distribution to the
Holders of Allowed Second Lien Loan Claims as of the Distribution Record Date,
pursuant to the terms and subject to the conditions of the Second Lien Loan and
the Plan.  Upon the delivery of the foregoing distributions to the
Second Lien Loan Administrative Agent, the Debtors and the Reorganized Debtors
shall be released of all liability with respect to their obligation to make such
delivery.  The Second Lien Loan Administrative Agent shall thereafter
take all steps reasonably necessary and appropriate to effectuate such further
distribution thereof to the Holders of the Allowed Second Lien Loan
Claims.  Also, all distributions under the Plan on account of the
Allowed DIP Facility Claims shall initially be distributed to the DIP Facility
Administrative Agent, for further distribution to the Holders of Allowed DIP
Facility Claims as of the Distribution Record Date, pursuant to the terms and
subject to the conditions of the DIP Facility and the Plan.  Upon the
delivery of the foregoing distributions to the DIP Facility Administrative
Agent, the Debtors and the Reorganized Debtors shall be released of all
liability with respect to their obligation to make such delivery.  The
DIP Facility Administrative Agent shall thereafter take all steps reasonably
necessary and appropriate to effectuate such further distribution thereof to the
Holders of the Allowed DIP Facility Claims.  On the Effective Date
(and, solely with respect to the DIP Facility, upon the payment in full of the
DIP Facility Claims with proceeds from the Working Capital Loans or otherwise),
all of the obligations and Liens under the respective Credit Facilities other
than those that are being expressly reinstated and modified in the manner set
forth in Section 5.2 hereof shall be deemed terminated, canceled, and
extinguished (all without any further action by any Person or the Bankruptcy
Court) and shall have no further legal effect other than as evidence of any
right to receive distributions under the Plan as set forth in Sections 3.2, 5.2,
and 5.3 hereof; provided, however, that the respective Credit Facilities shall
continue in effect and shall not be deemed canceled on the books and records of
the applicable Administrative Agents, solely for the purposes of and to the
extent necessary to (i) facilitate the respective distributions to the First
Lien Loan Lenders, the Second Lien Loan Lenders, or the DIP Facility Lenders as
of the Distribution Record Date, pursuant to the Plan and (ii) to enable the
respective Administrative Agents to perform any and all current and future
administrative functions.

     

    (e) 
All distributions under the Plan on account of the Allowed NW Bank Claims shall
be distributed to NW Bank as the Holder of the Allowed NW Bank Claims as of the
Distribution Record Date, pursuant to the terms and subject to the conditions of
the NW Bank Agreements and the Plan.  Upon the delivery of the
foregoing distributions to NW Bank, the Debtors and the Reorganized Debtors
shall be released of all liability with respect to their obligation to make such
delivery.  Subject to the other terms and conditions of the Plan,
including in Section 4.4(b) in the event Aurora elects to keep the NW Bank LCs
in place after the Effective Date, on the Effective Date, the obligations under
the respective NW Bank Agreements shall be deemed terminated, canceled, and
extinguished (all without any further action by any Person or the Bankruptcy
Court) and shall have no further legal effect other than as evidence of any
right to receive distributions under the Plan as set forth in Sections 4.4 and
5.4 hereof.

     

    (f)   On
the Effective Date, the Old Aurora Common Stock and the Old HPPC Interests shall
be deemed terminated, canceled, and extinguished (all without any further action
by any Person or the Bankruptcy Court) and shall have no further legal
effect.

    
      
        
        

         

      

      
        -29-

        
          

        

      

      
         

      

    

    (g)  The
Debtors shall pay the reasonable and customary fees, charges, and expenses
incurred by the respective Administrative Agents (including, without limitation,
the reasonable and customary fees, charges and expenses of each such
Administrative Agents’ counsel, financial advisor, and any other agent or
consultant) in the performance of any function associated with the Credit
Facilities or the Plan (as applicable) during the period from and including the
Petition Date until such time as all distributions provided for under the Plan
to the Holders of Allowed First Lien Loan Claims, Allowed Second Lien Loan
Claims, and Allowed DIP Facility Claims (as applicable) have been
made.

     

    6.7.         Delivery of Distributions; Unclaimed
Property; Undeliverable Distributions.

     

    
      (a)  Except
as may otherwise be provided in Sections 3.2, 5.2, 5.3, 6.7, and 6.8 hereof, any
distributions to Holders of Allowed Claims under this Plan shall be
made:  (i) at the addresses set forth either on the Schedules or as
otherwise set forth on the Debtors’ respective books and records, or on the
respective Proofs of Claim filed by such Holders in the event that the addresses
indicated thereon differ from those set forth on the Schedules or as otherwise
set forth on the Debtors’ respective books and records or upon the applicable
securities depositories, clearing systems, or broker, bank, or custodial
participants in the clearing system (as applicable); or (ii) at the addresses
set forth in any written notices of address change delivered to the Debtors or
the Reorganized Debtors (if after the Effective Date) after the date of any
related Proof of Claim.

      

    

    
      (b)  Except
as otherwise set forth in Plan Section 4.4(b), in accordance with Bankruptcy
Code § 1143, any Holder of any note issued in connection with any of the Credit
Facilities, the NW Bank Agreements, or any of the Guarantees that fails to
surrender the applicable note or deliver an affidavit of loss and indemnity as
provided herein by 5:00 p.m. prevailing Eastern Time on the date that is one
year from and after the later of the Effective Date or the applicable Allowance
Date with respect to any Claims arising from or relating to such note issued in
connection with any of the Credit Facilities, the NW Bank Agreements, or the
Guarantees (if any), shall be deemed to have forfeited all rights and claims in
respect of such Claims, and shall be forever barred from receiving any
distributions under the Plan on account thereof.  In such cases, (a)
any property held for distribution by the applicable Administrative Agent on
account of Allowed Claims based on such note issued in connection with the
applicable Credit Facility or any of the Guarantees (if any), shall be made
available for redistribution, on a Pro Rata basis, to all other Holders of
Allowed Claims arising under the applicable Credit Facility that timely
surrendered the applicable note or delivered an affidavit of loss and indemnity
as provided herein, and (b) any Cash held for distribution by the Debtors on
account of Allowed NW Bank Note Deficiency Claims shall be retained by the
Reorganized Debtors for further distributions to the Holders of Allowed Class 3A
Claims in accordance with Plan Section 6.10(e).

       

    

    (c)  If
the distribution to the Holder of any Allowed Priority Claim, Allowed Class 2C
Claim, Allowed Class 3A Claim, or Allowed Class 3B Claim is returned to the
Reorganized Debtors as undeliverable, no further distribution shall be made to
such Holder unless and until the Reorganized Debtors are notified in writing of
such Holder’s then current address.  The Reorganized Debtors shall
retain any such undeliverable distributions.

     

    (d)  Any
Holder of an Allowed Claim who does not assert a claim for an undeliverable
distribution by 5:00 p.m. prevailing Eastern Time on the date that is one year
after the date by which such Holder was first entitled to such distribution
shall no longer have any claim to, or interest in, such undeliverable
distribution and shall be forever barred from receiving any distribution under
the Plan.

    
      
        
        

         

      

      
        -30-

        
          

        

      

      
         

      

    

    (e)  Nothing
contained in the Plan shall require the Debtors or the Reorganized Debtors to
attempt to locate any Holder of an Allowed Claim.

     

    6.8.         Funding of Cash Distributions under
the Plan.  Any funds necessary to make the Cash distributions
required under the Plan and/or to fund the future obligations of the Reorganized
Debtors shall (as applicable) be made from:  the Cash on hand of the
Debtors and of the Reorganized Debtors; the Working Capital Loans; and the
future operations of the Debtors and the Reorganized Debtors (as
applicable).

     

    6.9.         Manner of Payments Under the
Plan.  Any Cash distribution to be made by the Debtors or the
Reorganized Debtors (as applicable) pursuant to the Plan may be made by a check
on a United States bank selected by the Debtors or the Reorganized Debtors (as
applicable); provided, however, that Cash
distributions made to foreign Holders of Allowed Claims may be paid, at the
option of the Debtors or the Reorganized Debtors (as applicable), in such funds
and by such means as are necessary or customary in a particular foreign
jurisdiction.

     

    6.10.       Disputed Claims.

     

    (a)  No
distribution or payment shall be made on a Disputed Claim until such Disputed
Claim becomes an Allowed Claim.  On the Initial Distribution Date, the
distributions reserved for the Holders of any Disputed Claims in each Class
under the Plan shall be deposited in deposit accounts for the benefit of the
Holders of Disputed Claims whose Claims are ultimately Allowed in the respective
Classes in which the Disputed Claims are classified (each deposit account a
“Disputed Claims
Reserve”); provided, however, that neither
the Debtors nor the Reorganized Debtors shall be required to deposit any Cash,
securities, or other property or assets into a Disputed
Claims  Reserve on account of a particular Disputed Claim with respect
to which the Debtors or the Reorganized Debtors have filed a motion or objection
with the Bankruptcy Court seeking to either (a) estimate or liquidate the
Allowed amount of such Disputed Claim at $0 or (b) disallow, expunge, vacate, or
otherwise strike such Disputed Claim on any grounds.

     

    (b)  Subject
to the other provisions of this Plan (including Section 6.10(a) hereof), the
Reorganized Debtors (or any transfer or disbursing agent retained by the
Reorganized Debtors pursuant to Plan Section 6.5(b)) shall withhold from the
property to be distributed under the Plan and deposit in each Disputed Claims
Reserve a sufficient amount of such withheld property to be distributed on
account of the face amount of Claims that are Disputed Claims in such Class as
of the Initial Distribution Date for such Class under the Plan.  For
the purposes of this provision, the “face amount” of a Claim is (i) the amount
set forth on the applicable Proof of Claim or such lower amount as may be
determined in accordance with Plan Section 6.10(c), unless the Claim is filed in
an unliquidated amount; or (ii) if a Proof of Claim has been filed in an
unliquidated amount, the amount determined in accordance with Plan Section
6.10(c).

    
      
        
        

         

      

      
        -31-

        
          

        

      

      
         

      

    

    (c)  As
to a Disputed Claim, the Bankruptcy Court shall, upon motion by the Debtors or
the Reorganized Debtors or any other party in interest in these Cases (as
applicable), estimate the maximum allowable amount of such Disputed Claim and
the amount to be placed in the Disputed Claims Reserve on account of such
Disputed Claim.  If so authorized by order of the Bankruptcy Court,
any Creditor whose Claim (i) is estimated by an order of the Bankruptcy Court or
(ii) is the subject of a motion or objection to (a) estimate or liquidate the
Allowed amount of such Disputed Claim at $0 or (b) disallow, expunge, vacate, or
otherwise strike such Disputed Claim in full on any grounds, as contemplated by
Plan Section 6.10(a), shall not have any recourse to the Debtors or to the
Reorganized Debtors, any Assets theretofore distributed on account of any
Allowed Claim, or any other entity or property if the finally Allowed Claim of
that Creditor exceeds that estimated maximum allowable
amount.  Instead, such Creditor shall have recourse only to the
undistributed Cash (if any) in the applicable Disputed Claims Reserve for the
Claim of that Creditor and (on a Pro Rata basis with the other Creditors of the
same Class who are similarly situated) to those portions (if any) of the
Disputed Claims Reserve for other Disputed Claims of the same Class that exceed
the ultimately Allowed amount of such Claims.

     

    (d)  All
earnings on any Cash held in a Disputed Claims Reserve (if any) shall be held in
trust and shall be distributed only in the manner described in the
Plan.

     

    (e)  At
such time as all or any portion of a Disputed Claim becomes an Allowed Claim,
the distributions reserved for such Disputed Claim or such portion, plus any
earnings thereon (if any), shall be released from the appropriate Disputed
Claims Reserve and delivered to the Holder of such Allowed Claim in the manner
as described in the Plan.  At such time as all or any portion of any
Disputed Priority Claim or any Disputed Class 1 or 2C Claim is determined not to
be an Allowed Claim, the distribution reserved for such Disputed Claim or such
portion, plus any earnings thereon (if any), shall be released from the
appropriate Disputed Claims Reserve and returned to the Reorganized
Debtors.  At such time as all or any portion of any Disputed Class 3A
Claim or Disputed 3B Claim is determined not to be an Allowed Claim, the
distribution reserved for such Disputed Claim or such portion, plus any earnings
thereon (if any), shall be released from the appropriate Disputed Claims Reserve
account and made available for redistribution in a timely manner, on a Pro Rata
basis, to the Holders of Allowed Claims of such Classes; provided, however, that neither
the Debtors, the Reorganized Debtors, nor any transfer or disbursing agent
retained by the Reorganized Debtors pursuant to Plan Section 6.5(b) shall be
required to make any such redistribution until the aggregate amount available
with respect thereto is at least $5,000.

     

    (f)   (i)
After the Confirmation Date, the Debtors (in consultation with the Creditors
Committee, the First Lien Loan Administrative Agent, and the Second Lien Loan
Administrative Agent), and (ii) on and after the Effective Date, the Reorganized
Debtors shall have the authority to object to and litigate any Disputed Claims
or any dispute regarding the amount of the NW Bank Note Secured Claim and the NW
Bank Note Deficiency Claim, and shall have the authority to settle, compromise,
resolve, or withdraw any objection to Disputed Claims or any dispute regarding
the amount of the NW Bank Note Secured Claim and the NW Bank Deficiency Claim,
without the need for any Bankruptcy Court or other approval or any other or
further notice.  Without limiting the generality of the foregoing, the
amount of the NW Bank Note Deficiency Claim is to be determined in good faith by
the Debtors (in consultation with the Creditors Committee, the First Lien Loan
Administrative Agent, and the Second Lien Loan Administrative Agent) and NW
Bank, or, in the absence of an agreement between such parties, by the Bankruptcy
Court.

    
      
        
        

         

      

      
        -32-

        
          

        

      

      
         

      

    

    (g)  Except
as otherwise provided in the Plan, if there exists any Disputed Administrative
Claim, Disputed Tax Claim, or Disputed DIP Facility Claim, or any Disputed Class
1 or 2C Claim, the Reorganized Debtors shall withhold in a reserve account the
“face amount” (as calculated under Plan Section 6.10(b)) of any such Disputed
Claim until and to the extent such Claim is determined to be an Allowed
Claim.

     

    6.11.       Bar Date for Objections to
Claims.  All objections to Claims (other than with respect to
(a) Administrative Claims and (b) Rejection Claims arising under those Executory
Contracts that are to be rejected under and pursuant to the Plan) must be filed
by the Claims Objection Bar Date.  The failure by any
party-in-interest, including the Debtors, to object to any Claim, whether or not
unpaid, for purposes of voting shall not be deemed a waiver of such party’s
rights to object to, or to re-examine, any such Claim in whole or in part, for
purposes of distributions under the Plan.

     

    6.12.       Deadlines for Determining the Record
Holders of the Various Classes of Claims.  At the close of
business on the Distribution Record Date, the respective transfer records for
the Credit Facilities, the NW Bank Agreements, and the Old HPPC Interests shall
be closed, and there shall be no further changes in the record holders of the
respective Credit Facilities Claims, NW Bank Claims, General Unsecured Claims,
or the Old HPPC Interests after such date.  Neither the Debtors, the
Reorganized Debtors, any disbursing agent or transfer agent retained by the
Reorganized Debtors pursuant to Plan Section 6.5(b), nor the respective
Administrative Agents shall have any obligation to recognize any transfer of the
First Lien Loan Claims, the Second Lien Loan Claims, the NW Bank Claims, the DIP
Facility Claims, any notes issued in connection with any of the Credit
Facilities, the NW Bank Agreements, or any of the Guarantees (if any), any
General Unsecured Claim, or the Old HPPC Interests occurring after the
Distribution Record Date, and such parties shall be entitled, instead, to
recognize and deal for all purposes hereunder with only those record holders
thereof as of the close of business on the Distribution Record
Date.

     

    6.13.       The Exit Credit Facility, the Working
Capital Loans, the New Secured Notes, and the Exit Credit Facility
Guarantee.

     

    (a)  On
the Effective Date, or as soon thereafter as practicable, the Reorganized
Debtors, either as direct borrowers or as an Exit Credit Facility Guarantor, the
Exit Credit Facility Administrative Agent, as administrative agent, and the Exit
Credit Facility Lender(s), as lender(s) (in each case, as may be set forth in
the final Exit Credit Facility), may (as applicable) execute and deliver the
Exit Credit Facility, the New Secured Notes, the Working Capital Loans Notes,
the Exit Credit Facility Guarantee, and any and all security agreements,
mortgages or extensions of mortgages, certificates, and other instruments,
agreements, assignments, and documents contemplated and/or required by the Exit
Credit Facility, including, but not limited to, any and all such documents that
serve to evidence and secure the Reorganized Debtors’ respective obligations
under the Exit Credit Facility and/or the Exit Credit Facility Guarantee (as
applicable), and any Liens in favor of the Exit Credit Facility Lender(s)
securing such obligations.  The New Secured Notes under the Exit
Credit Facility shall constitute a reinstatement and modification of the Class
2A Claims under the First Lien Loan in the manner set forth in Section 5.2
hereof, and, as a result, all of the outstanding amounts under the Exit Credit
Facility shall (a) continue to be secured by the perfected Liens which exist
under the First Lien Loan and (b) be secured by perfected Liens in substantially
all of the respective assets of the Reorganized Debtors.

    
      
        
        

         

      

      
        -33-

        
          

        

      

      
         

      

    

    (b)  The
First Lien Loan Lenders shall have the option to participate as an Exit Credit
Facility Lender and provide the Working Capital Loans to Reorganized
Aurora.  In the event that all the Exit Credit Facility Lenders under
the Working Capital Loans are First Lien Lenders, each participating First Lien
Loan Lender shall be entitled to participate in the Working Capital Loans on a
Pro Rata basis, based on the total amount outstanding under the First Lien
Loan.  In the event that some or all of the First Lien Loan Lenders
fail to fully subscribe the Working Capital Loans, then some or all of the
Second Lien Loan Lenders shall be entitled to participate with such
participating First Lien Loan Lenders and provide the remaining portion that is
necessary to fully subscribe the Working Capital Loans.  In such
event, such participating Second Lien Loan Lenders shall be entitled to share
pari passu in the
collateral securing the Tranche A Notes solely with respect to their respective
portion of the Working Capital Loans.

     

    (c)  In
the event that none of the First Lien Loan Lenders subscribe to the Working
Capital Loans, then some or all of the Second Lien Loan Lenders shall instead
provide such Working Capital Loans, and the participation of such Second Lien
Loan Lenders shall be on a Pro Rata basis, based on the total principal amount
outstanding under the Second Lien Loan.  To the extent that the
Working Capital Loans are subscribed exclusively by the Second Lien Loan
Lenders, such Working Capital Loans shall be secured as second lien debt
subordinate solely to the Tranche A Notes.  If less than all of the
Second Lien Loan Lenders are Exit Credit Facility Lenders under the Exit Credit
Facility, (a) the Second Lien Loan Lenders subscribing to the Working Capital
Loans shall be entitled to provide any remaining portion of the Working Capital
Loans and (b) the Second Lien Loan Administrative Agent shall provide any
portion of the Working Capital Loans that is not otherwise subscribed as
described herein.

     

    (d)  Advances
under the Working Capital Loans shall bear interest at a rate of 12% per
annum.  Maturity of the Working Capital Loans shall be the date that
is 24 months following the Effective Date.  On the maturity date of
the Working Capital Loans, the Reorganized Debtors shall also pay a premium
equal to 50% of the principal amount borrowed thereunder.  At the
execution of the Exit Credit Facility, each Exit Credit Facility Lender shall be
entitled to an upfront fee equal to 3% of its share of the total commitments
under the Working Capital Loans.  Amounts repaid under the Working
Capital Loans by the Reorganized Debtors may be prepaid and
re-borrowed.  The documentation memorializing the Exit Credit Facility
shall include customary representations, warranties, covenants, and
indemnities.

     

    (e)  Solely
to the extent that the Second Lien Loan Lenders exclusively subscribe to the
Working Capital Loans, such Second Lien Loan Lenders subscribing to the Working
Capital Loans shall collectively receive 10-year warrants to purchase, in the
aggregate, 35% of the New Aurora Class A Common Stock (on a fully diluted basis)
at a nominal exercise price (the “New Warrants”).

     

    (f)  On
the date of the execution and delivery of the Exit Credit Facility (which shall
be no earlier than the Effective Date), Reorganized Aurora shall issue, in
accordance with the terms of the Plan (including Section 5.2 hereof) and the
Exit Credit Facility, the New Secured Notes to the First Lien Loan
Administrative Agent for subsequent distribution on a Pro Rata basis to the
Holders of Allowed First Lien Loan Claims.

    
      
        
        

         

      

      
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    (g)  The
New Secured Notes shall bear interest at a rate per annum equal to (a) with
respect to the Tranche A Notes, LIBOR plus a margin of 3%, and (b) with respect
to the Tranche B Notes, 6% fixed.  Interest on (a) the Tranche A Notes
shall be payable quarterly, and (b) the Tranche B Notes shall accrue but not be
paid and instead shall be capitalized (“PIK Interest”) and added
quarterly to the principal amount outstanding of such Tranche B Notes, and the
new principal balance thereof outstanding (which includes any capitalized PIK
Interest) shall thereafter continue to accrue interest at the rate applicable
for such Tranche B Notes.  The principal amounts of the New Secured
Notes (including all capitalized PIK Interest) shall be payable at maturity,
which shall be the date that is 24 months following the Effective
Date.  The documentation memorializing the New Secured Notes will be
contained in the Exit Credit Facility and will include customary
representations, warranties, covenants, and indemnities.  In addition
to the perfected Liens under the First Lien Loan, the outstanding principal of,
and accrued and unpaid interest on, the Tranche A Notes, together with all other
amounts owed by Reorganized Aurora relating to the Tranche A Notes, shall also
be secured by first priority, perfected Liens in substantially all of the assets
of Reorganized Aurora (including any subsidiaries and Affiliates thereof, such
as Reorganized HPPC).  In addition to the perfected Liens under the
First Lien Loan, the outstanding principal (including all capitalized PIK
Interest) of, and accrued PIK Interest not yet capitalized and added to the
outstanding principal of, the Tranche B Notes, together with all other amounts
owed by Reorganized Aurora relating to the Tranche B Notes, shall also be
secured by perfected Liens (subordinate only to the Liens of the Tranche A Notes
and the Working Capital Loans of the Exit Credit Facility) in substantially all
of the assets of Reorganized Aurora (including any subsidiaries and Affiliates
thereof).  The security documents relating to the Liens of the Tranche
A Notes and Tranche B New Secured Notes shall contain customary terms and
conditions.

     

    (h)  A
holder of a New Secured Note or Working Capital Loan shall not be permitted to
assign all or any portion of its New Secured Notes or Working Capital Loans, as
applicable, to any Person or entity that is acting in the capacity of a “vulture
fund.”  The Exit Credit Facility Administrative Agent shall make the
determination whether or not a Person is acting in the capacity of a “vulture
fund” for this purpose.

     

    6.14.       New Aurora Class A Common
Stock.  On the Effective Date (or as soon thereafter as is
practicable), Reorganized Aurora shall issue in accordance with the terms of the
Plan (including Sections 5.3 and 6.6 hereof), [56] million shares (in the
aggregate) of New Aurora Class A Common Stock to the Second Lien Loan
Administrative Agent for subsequent distribution on a Pro Rata basis to the
Holders of Allowed Second Lien Loan Claims (or such Holder’s affiliate, as
provided for in Plan Section 5.3(b)).  As of the Effective Date, such
[56] million shares of New Aurora Class A Common Stock to be so distributed
shall collectively represent 100% of the outstanding shares of New Aurora Class
A Common Stock (subject to dilution on a pari passu basis with all
other holders of shares of New Aurora Class A Common Stock upon the issuance of
any shares of New Aurora Class A Common Stock issuable upon the exercise of the
New Warrants or otherwise by Reorganized Aurora).  Upon the issuance
of such shares of New Aurora Class A Common Stock (including, but not limited
to, upon the exercise of the New Warrants or otherwise), all such shares of New
Aurora Class A Common Stock shall be deemed fully paid and
nonassessable.

    
      
        
        

         

      

      
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    6.15.       The New Aurora Preferred
Stock.

     

    
      (a)  On
the Effective Date (or as soon thereafter as is practicable), Reorganized Aurora
shall issue, in accordance with the terms of the Plan (including Sections 5.2
and 6.6 hereof), [32] million shares (in the aggregate) of the New Aurora
Preferred Stock to the First Lien Loan Administrative Agent for subsequent
distribution on a Pro Rata basis to the Holders of Allowed First Lien Loan
Claims (or such Holder’s affiliate, as provided for in Plan Section
5.2(b)).  The New Aurora Preferred Stock issued on such date to each
such Holder shall, in the aggregate, represent, as of such date, 100% of the
outstanding shares of New Aurora Preferred Stock, subject to no dilution or
further issuance of any additional shares of New Aurora Preferred Stock except
as expressly provided under Plan Section 6.15(f).  Except
as provided by the Utah Revised Business Corporation Act and the Amended and
Restated Articles of Incorporation, the shares of New Aurora Preferred Stock
shall be non-voting.

      

    

    
      (b)  The
New Aurora Preferred Stock shall have an initial liquidation preference of [$1.00] per share of New
Aurora Preferred Stock, for an aggregate initial liquidation preference for all
shares of New Aurora Preferred Stock equal to approximately $32 million, and
shall rank senior in priority to the shares of New Aurora Class A Common Stock
and the New Aurora Class B Common Stock and junior in priority to all
indebtedness of Reorganized Aurora.  To the extent then available, the
form of the New Aurora Preferred Stock shall be as set forth in the Plan
Supplement.

      

    

    (c)  Neither
Reorganized Aurora, nor any holders of New Aurora Class A Common Stock, shall be
permitted to approve, any of the following without the prior written approval of
holders of at least 66 2/3% of the shares of New Aurora Preferred Stock
outstanding:  (i) certain transactions (i.e., mergers or asset sales,
etc.); (ii) any changes to the rights, privileges, or preferences of the New
Aurora Preferred Stock; (iii) the incurrence by Reorganized Aurora of any
secured or unsecured indebtedness (other than indebtedness contemplated
hereunder); provided, however, that with
respect to unsecured indebtedness, no such approval shall be required to the
extent that such unsecured indebtedness is, in the aggregate, less than
$500,000; (iv) the issuance of any additional shares of New Aurora Preferred
Stock (other than as a dividend on outstanding shares), and the issuance of any
equity interests in Reorganized Aurora that would rank senior to, or pari passu with, the New
Aurora Preferred Stock as to liquidation preference or as to priority of
distributions; (v) any distributions on or redemptions of any shares of the New
Aurora Class A Common Stock or the New Aurora Class B Common Stock (other than
(A) those expressly permitted in accordance with the terms of the Plan and (B)
certain exceptions such as repurchases under employee benefit plans or
employment agreements, etc.); (vi) designation of additional directors of the
Board of Directors of Reorganized Aurora upon the occurrence of the Triggering
Event; and (vii) additional matters as reflected in the Plan Documents,
including without limitation, the Amended and Restated Articles of Incorporation
and the Amended and Restated By-Laws.

    
      
        
        

         

      

      
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    (d)  The
governing documents of the Reorganized Aurora shall contain customary provisions
entitling the holders of the New Aurora Class A Common Stock, the New Aurora
Class B Common Stock, and the New Aurora Preferred Stock to receive (i) periodic
financial statements, and (ii) reasonable access to the books and records of
Reorganized Aurora.

     

    (e)  The
New Aurora Preferred Stock shall not be convertible into New Aurora Class A
Common Stock, New Aurora Class B Common Stock, or any other equity security of
Reorganized Aurora.

     

    (f)  Dividends
shall accrue for each share of New Aurora Preferred Stock at a rate of 6%
annually on the amount of the liquidation preference for such New Aurora
Preferred Stock, payable solely in additional New Aurora Preferred Stock,
issuable quarterly.

     

    (g) Each
share of New Aurora Preferred Stock shall be redeemable (i) on a mandatory
basis, on the date that is 60 months after the Effective Date; (ii) at the
option of the Reorganized Aurora, at any time prior to the redemption date in
clause (i) hereof; (iii) on a mandatory basis, upon the refinancing or the
payment in full of the obligations under the New Secured Notes; or (iv) on a
mandatory basis, upon the occurrence of an event of default under the New
Secured Notes, in each case under clauses (i), (ii), (iii) and (iv) hereof, for
a Cash redemption price equal to the liquidation preference applicable to such
New Aurora Preferred Stock, plus any accrued and unpaid dividends (paid in Cash
based on the amount of the liquidation preference that would apply to the shares
of New Aurora Preferred Stock that would otherwise be issued to pay such accrued
and unpaid dividends); provided, however, that any
partial redemptions shall be made on a Pro Rata basis among the holders of the
New Aurora Preferred Stock.

     

    (h) The
holders of the New Aurora Preferred Stock shall have no obligation thereunder to
make any capital contributions to any of the Reorganized Debtors.

     

    6.16.       Dividends to Preferred and Common
Equity Holders of Reorganized Aurora.  Any dividends (other
than dividends paid in additional shares of New Aurora Preferred Stock, which
shall only be issued to existing holders of New Aurora Preferred Stock) by
Reorganized Aurora to its respective equity security holders shall be allocated
as follows:

     

    (a)  Until
all shares of New Aurora Preferred Stock have been fully redeemed in accordance
with the terms of the Amended and Restated Articles of Incorporation or have
received aggregate dividends equal to the aggregate liquidation preference plus
all accrued and unpaid dividends thereon, dividends to the respective equity
security holders of Reorganized Aurora shall be allocated as
follows:  (1) 90% to the holders of the New Aurora Preferred Stock and
(2) 10% to the holders of the New Aurora Class B Common Stock; and

     

    (b)  After
the full redemption of all outstanding shares of New Aurora Preferred Stock or
the payment of aggregate dividends to the New Aurora Preferred Stock equal to
the aggregate liquidation preference plus all accrued and unpaid dividends
thereon, all dividends shall be allocated on a Pro Rata basis to the holders of
the New Aurora Class A Common Stock and the New Aurora Class B Common
Stock.

    
      
        
        

         

      

      
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    6.17.       Management and Director Equity
Plan.  Following the Effective Date, the Management and
Director Equity Plan may be adopted by Reorganized Aurora.  The terms
and conditions of any Management and Director Equity Plan shall be determined by
the Board of Directors of Reorganized Aurora.  Shares of New Aurora
Class B Common Stock representing the equivalent of up to 10% of the shares of
New Aurora Class A Common Stock on a fully-diluted basis that are issued and
outstanding upon the Effective Date (not including any shares of New Aurora
Class A Common Stock or other such class of equity that would be issuable upon
the exercise of the New Warrants) shall be reserved for the issuance under any
Management and Director Equity Plan when the Management and Director Equity Plan
is adopted by Reorganized Aurora.

     

    6.18.       Registration Rights
Agreement.  Following the Effective Date, certain holders of
New Aurora Class A Common Stock shall be entitled to require the registration of
New Aurora Class A Common Stock under the Securities Act in accordance with the
terms of the Registration Rights Agreement.  The Registration Rights
Agreement shall be filed as part of the Plan Supplement and shall be executed
and delivered by Reorganized Aurora and become effective as of the Effective
Date.  The terms of the Registration Rights Agreement shall provide
that no registration rights thereunder may be exercised unless all shares of New
Aurora Preferred Stock have been fully redeemed.

     

    6.19.       Voting Agreement and the
Conversions.

     

    (a)           The
Voting Agreement shall:  (i) be filed as part of the Plan Supplement,
(ii) be executed and delivered by Reorganized Aurora, the initial holders of the
New Aurora Class A Common Stock, and the initial holders of New Aurora Preferred
Stock, and (iii) become effective as of the Effective Date.  Following
the Effective Date (and subject to Section 6.19(b) hereof), the holders of New
Aurora Preferred Stock and New Aurora Class A Common Stock shall take all the
appropriate corporate action to approve and effect the Utah Conversion and
Delaware Conversion and approve and execute the Reorganized Aurora Limited
Liability Company Agreement, all as contemplated by the Voting
Agreement.

     

    (b)           Notwithstanding
anything to the contrary contained in this Plan, the holders of the New Aurora
Preferred Stock and the holders of the New Aurora Class A Common Stock may
agree, after the Effective Date, not to undertake the Utah Conversion, the
Delaware Conversion, or any other conversion of Reorganized Aurora and to
instead keep and maintain the existence of Reorganized Aurora and the New Aurora
Preferred Stock, New Aurora Class A Common Stock, and New Aurora Class B Common
Stock issued in accordance with Section 6.3 hereof or otherwise
hereunder.

     

    (c)           Notwithstanding
any such conversions, Reorganized Aurora shall be treated as a corporation for
federal income tax purposes, and shall take all other actions necessary or
desirable in furtherance of such treatment for federal income tax
purposes.

    
      
        
        

         

      

      
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      6.20.         No Fractional Shares or
Warrants.  No fractional shares of New Aurora Class A Common
Stock or New Aurora Preferred Stock, or New Warrants to acquire any fractional
shares of New Aurora Class A Common Stock, shall be issued or distributed under
the Plan or the Exit Credit Facility.  Whenever any distribution to a
particular Person would otherwise call for the distribution of a fraction of a
share of New Aurora Class A Common Stock or New Aurora Preferred Stock or of a
New Warrant to acquire any fractional share of New Aurora Class A Common Stock,
the actual distribution of shares of such stock or warrant shall be rounded down
to the next lower whole number.  The total number of shares of New
Aurora Class A Common Stock or New Aurora Preferred Stock or New Warrants to be
distributed to a Class of Claims or in connection with the Exit Credit Facility
(as applicable) shall be adjusted as necessary to account for this
rounding.  No consideration shall be provided in lieu of any
fractional shares of New Aurora Class A Common Stock, New Aurora Preferred
Stock, or New Warrants that are rounded down.

      

      6.21.         Restrictions on
Transfer.

      

         (a)    For
a period of 25 months after the Effective Date, the New Aurora Preferred Stock
may not be sold, transferred, pledged, or assigned without the approval of the
holders of a majority of the New Aurora Class A Common Stock.  After
such 25-month period following the Effective Date, there shall be no
restrictions on the transfer of the New Aurora Preferred Stock other than with
respect to compliance with applicable laws.

      

         (b)    For
a period of 25 months after the Effective Date, the New Aurora Common Stock
may not be sold, transferred, pledged, or assigned without the approval of the
holders of a majority of the New Aurora Preferred Stock.  After such
25-month period following the Effective Date, there shall be no restrictions on
the transfer of the New Aurora Common Stock other than with respect to
compliance with applicable laws.

      

      6.22.         De Minimis
Distributions.  No Debtor, Reorganized Debtor, or any
disbursing agent or transfer agent retained by the Reorganized Debtors pursuant to Plan Section
6.5(b) shall distribute any Cash to the Holder of an Allowed Claim if the amount
of Cash to be distributed on account of such Claim
is less than $100.  Any Holder of an Allowed Claim on account of which
the amount of Cash to be distributed is less than $100 shall have its Claim and
its right to any such distribution discharged, and shall be forever barred from
asserting any such claim against, or interest in, the Reorganized Debtors or
their respective property.  Any Cash not distributed pursuant to this
Section 6.22 shall be the property of the
Reorganized Debtors, free of any restrictions thereon, and any
such Cash held by any disbursing agent or transfer agent retained by the Reorganized
Debtors pursuant to Plan Section 6.5(b) shall be returned to the
Reorganized Debtors.

      

      6.23.         Withholding and Reporting
Requirements.  In connection with this Plan and all instruments
issued in connection herewith and distributed hereunder, the Debtors, the
Reorganized Debtors, any disbursing agent or
transfer agent retained by the Reorganized Debtors pursuant to Plan Section 6.5(b),
and the Administrative Agents, as the case may be, shall comply with all
applicable withholding and reporting requirements imposed by any federal, state,
local, or foreign taxing authority, and all distributions under the Plan shall
be subject to any such withholding and reporting requirements.

      

      6.24.         Non-Debtor Intercompany
Claims.  All Non-Debtor Intercompany Claims shall be reviewed
by the Reorganized Debtors and (without the need for any such entities to file a
Proof of Claim) adjusted, continued, or discharged as the Reorganized Debtors
determine as appropriate, taking into account, among other things, the
distribution of consideration under the Plan and the economic condition of the
Reorganized Debtors and their non-Debtor subsidiaries and
Affiliates.

      
        
           

        

        
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      6.25.         Direction to
Parties.  From and after the Effective Date, the Reorganized
Debtors may apply to the Bankruptcy Court for an order directing any necessary
party to execute or deliver or to join in the execution or delivery of any
instrument required to effect a transfer of property dealt with by the Plan, and
to perform any other act, including the satisfaction of any Lien, that is
necessary for the consummation of the Plan, pursuant to Bankruptcy Code §
1142(b).

      

      6.26.         Setoffs.  The
Debtors shall, pursuant to Bankruptcy Code § 553, set off against any Allowed
Claim and the distributions to be made pursuant to the Plan on account of such
Claim, all claims, rights, and Causes of Action of any nature that the Debtors
may hold against the Holder of such Allowed Claim that are not otherwise waived,
released, or compromised in accordance with the Plan; provided, however, that neither
the failure to effect such a setoff nor the allowance of any Claim shall
constitute a waiver or release by the Debtors of any such claims, rights, and
Causes of Action that either of the Debtors may possess against such
Holder.

      

      6.27.         Waiver of Avoidance Claims;
Preservation of All Other Causes of Action.

      

       
 (a)    As of the Effective Date, all of the Debtors’
and the Estates’ Avoidance Claims shall be deemed to have been, and shall be,
released and/or waived, and all parties shall hereby be enjoined from
instituting and presenting in the name of the Debtors, or otherwise, any or all
proceedings in order to collect, assert, or enforce any such Avoidance Claim of
any kind; provided, however, that if the
Confirmation Order is vacated or revoked, all Avoidance Claims shall be deemed
reinstated automatically, with the same force and effect as if the Avoidance
Claims never had been released and/or waived hereunder, without the need for any
action to be taken by the Debtors or any other party.  In addition,
all parties shall hereby be enjoined from instituting and presenting in the name
of the Debtors or the Estates any objections to Claims under Bankruptcy Code §
502(d) on account of such released and waived Avoidance Claims.

      

       
 (b)    Except as otherwise set forth in the Plan
(including, without limitation, Article IX and Section 6.27(a)
hereof), in accordance with Bankruptcy Code § 1123(b), as of the
Effective Date, the Reorganized Debtors shall retain all Causes of Action
(including, without limitation, actions that could be brought under Bankruptcy
Code § 542 or 543) other than with respect to any Avoidance Claims, and shall
have the power, subject to any applicable releases and/or waivers contained in
the Plan, (i) to institute and present in the name of the Debtors, or otherwise,
all proceedings that they may deem proper in order to collect, assert, or
enforce any claim, right, or title of any kind in or to either of the Debtors’
Assets or to avoid any purported Lien, and (ii) to defend and compromise any and
all actions, suits, or proceedings in respect of such Assets.

      

      6.28.         Special Provisions Regarding the
Treatment of Allowed Secondary Liability Claims.  The
classification and treatment of Allowed Claims under the Plan shall take into
consideration all Allowed Secondary Liability Claims.  On the
Effective Date, Allowed Secondary Liability Claims shall be treated as
follows:

      
        
           

        

        
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 (a)    The Allowed Secondary Liability Claims arising
from or related to either Debtors' joint or several liability for the
obligations under any (a) Allowed Claim that is being Reinstated under the Plan
or (b) Executory Contract that is being assumed or deemed assumed by the other
Debtor or Reorganized Debtor shall be Reinstated.

      

       
 (b)    Holders of all other Allowed Secondary
Liability Claims shall be entitled to only one distribution from the Debtors,
which distribution shall be as provided in the Plan in respect of such
underlying Allowed Claim, and which Allowed Secondary Liability Claim (as well
as the underlying Allowed Claim) shall be deemed satisfied in full by the
distributions on account of the related underlying Allowed Claim.  No
multiple recovery on account of any Allowed Secondary Liability Claim
(including, but not limited to, on account of any Claim based on any of the
Guarantees or any guarantee related to an Executory Contract) shall be provided
or permitted in excess of the Allowed Claim.

      

      6.29.         Special Provision Regarding Employee
Termination Claims.  Other than with respect to those Employees
who have or will enter into an agreement with the Debtors addressing severance
and/or termination claims, in lieu of, and in full satisfaction, settlement,
release, and discharge of, and in exchange for, any and all Claims against the
applicable Debtors, the Reorganized Debtors, or the Estates for severance or
otherwise relating to the Employee’s employment termination by the applicable
Reorganized Debtor, other than with respect to any rights of such Employees as a
result of change-in-control provisions in any applicable agreements (“Employee Termination Claims”),
upon the termination of their employment, Employees (including members of the
Debtors’ management) of either of the Debtors shall be entitled to receive
severance payments equal to two weeks salary per year of such Employee’s
employment, with a minimum payment equal to four weeks salary, in addition to
the releases provided for in Article IX hereof.

      

      6.30.         Plan
Supplement.  The Plan Supplement shall be filed with the
Bankruptcy Court within the time established by the order of the Bankruptcy
Court approving the Disclosure Statement or other applicable order of the
Bankruptcy Court.  The Plan Supplement shall include (unless
previously filed or not then yet available) the respective draft forms of the
Amended and Restated Articles of Incorporation; the Amended and Restated Bylaws;
the Amended and Restated LLC Agreement; the Registration Rights Agreement; the
Voting Agreement (to the extent applicable in accordance with Section 6.19(b)
hereof); and, to the extent then available, the draft forms of any documents
memorializing the New Warrants or the terms and conditions of the New Aurora
Preferred Stock, the New Aurora Class A Common Stock, or the New Aurora Class B
Common Stock.  The Debtors may also include in the Plan Supplement a
draft form of an Exit Credit Facility, the New Secured Notes, and the Working
Capital Loans Notes, but only if and to the extent that such drafts are
available as of the date of the filing of the Plan Supplement.  The
Plan Supplement may also include revised or updated lists of the Executory
Contracts identified as “to be rejected” under the Plan (if any).  The
draft forms, summaries, lists, and schedules so set forth in the Plan Supplement
may be amended, modified, or supplemented from time to time after the filing of
the Plan Supplement.  Upon its filing, the Plan Supplement may be
inspected in the office of the Clerk of the Bankruptcy Court or its designee
during normal business hours.  Holders of Claims and Interests may
obtain a copy of the Plan Supplement upon written request to the Claims Agent or
through the Claims Agent’s website, http://www.donlinrecano.com/aurora, or
through the Bankruptcy Court’s website, http://www.miwb.uscourts.gov/.

      
        
           

        

        
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      6.31.         Allocation of
Distributions.  All distributions paid to Holders of Allowed
Claims in satisfaction thereof pursuant to this Plan shall be allocated first to
the original principal amounts of such Claims (as determined for federal income
tax purposes), and, second, to the portion of such Claims representing interest
(as determined for federal income tax purposes) and any excess thereafter shall
be allocated to the remaining portion of such Claims.

      

      6.32.         Distribution
Limitations.  Notwithstanding any other provision of the Plan
to the contrary, no distribution shall be made on account of any Claim, or part
thereof, (i) that is not an Allowed Claim or (ii) that has been avoided or is
subject to any objection.  The sum total of the value of the
distributions to be made on the Initial Distribution Date to all Claims in a
particular Class (if any) shall not exceed the aggregate amount of the Allowed
Claims in such Class (if any), and the distribution to be made to each
individual Holder of an Allowed Claim shall not exceed the amount of such
Holder’s Allowed Claim.

      

      6.33.         Limitations on Amounts to Be
Distributed to Holders of Allowed Insured
Claims.  Distributions under the Plan to each Holder of an
Allowed Insured Claim shall be in accordance with the treatment provided under
the Plan for the Class in which such Allowed Insured Claim is classified, but
solely to the extent that such Allowed Insured Claim is not satisfied from
proceeds payable to the
Holder thereof under any pertinent insurance policies and applicable law.  Nothing
in this Section 6.33 shall constitute a waiver of any claims,
obligations, suits, judgments, damages, demands, debts, rights, Causes of
Action, or liabilities that any entity may hold against the Debtors’ or the
Reorganized Debtors’ insurance carriers.

      

      6.34.         Distributions by Reorganized Aurora
of Proceeds from the Sale of Assets.  The net Cash proceeds
from the sale of any assets of the Reorganized Aurora, as well as any amount to
be paid (whether voluntary or involuntary), shall be applied as
follows:

      

       
 (a)    First, to the Pro Rata payment of (i) all fees,
costs, expenses and other obligations payable to the administrative agent and
the collateral agent, if any, under the New Secured Notes and (ii) to the extent
that the Working Capital Loans are subscribed by at least one First Lien Loan
Lender, all fees, costs, expenses and other obligations payable to the Exit
Credit Facility Administrative Agent and the collateral agent, if any, under the
Exit Credit Facility;

      

       
 (b)    Second, to the Pro Rata payment of (i) the
Tranche A Notes in the following order of priority:  (A) accrued and
unpaid interest, (B) principal amount outstanding, and (C) any other obligation
payable in respect of the Tranche A Notes and (ii) to the extent that the
Working Capital Loans are subscribed by at least one First Lien Loan Lender, the
Working Capital Loans in the following order of priority:  (A) accrued
and unpaid interest, (B) principal amount outstanding, (C) premium in respect of
the principal amount, and (D) any other obligation payable in respect of the
Working Capital Loans;

      

       
 (c)    Third, to the extent that the Working Capital
Loans are subscribed exclusively by the Second Lien Loan Lenders, to the payment
of all fees, costs, expenses and other obligations payable to the Exit Credit
Facility Administrative Agent, and any collateral agent under the Exit Credit
Facility;

      
        
           

        

        
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 (d)    Fourth, to the extent that the Working Capital
Loans are subscribed exclusively by the Second Lien Loan Lenders, to the payment
of the Working Capital Loans in the following order of priority:  (i)
accrued and unpaid interest, (ii) principal amount outstanding, (iii) premium in
respect of the principal amount, and (iv) any other obligation payable in
respect of the Working Capital Loans; and

      

       
 (e)    Fifth, to the payment of the Tranche B Notes in
the following order of priority:  (i) accrued PIK Interest not yet
capitalized and added to the principal, (ii) principal amount outstanding
(including capitalized and added PIK Interest), and (iii) any other obligation
payable in respect of the Tranche B Notes.

      

      6.35.         Implementation of
Settlement.  The Plan incorporates and implements a compromise
and settlement reached by and among (i) the First Lien Loan Lenders and the
Second Lien Loan Lenders and (ii) the Debtors.  Specifically, the
distributions potentially provided for herein to Holders of Allowed Claims in
Class 2A and Class 2B represent the negotiated distributions as set forth in an
agreement-in-principle reached between the Debtors and the First Lien Loan
Lenders and the Second Lien Loan Lenders.

      

      6.36.         “Change of Control”
Provisions.  Notwithstanding anything to the contrary that may
be contained in the Plan or the Confirmation Order, any insurance policy, any of
the Credit Facilities, the NW Bank Agreements, any Executory Contract, or other
contract or agreement to which either of the Debtors is a party, the
transactions to be consummated in accordance with this Plan shall not create, or
be deemed to create, any claim or right in connection therewith, upon a “Change
of Control” or similar term, as such term may be defined or utilized
in any of the Credit Facilities, the NW Bank Agreements, or in any Executory
Contract, contract, or agreement to which either of the Debtors is a party;
provided, however, that to the
extent the Management Transition Services Agreements are not entered into by,
and binding upon, the Debtors and/or the Reorganized Debtors, the “change of
control” provisions in the respective employment agreements of Rebecca Abbott,
Jeffrey Deneau, William Deneau, John Hunter, and Barbara  Lawson shall
not be affected, modified, or in any way impaired by this Section 6.36 of the
Plan.

      

      
        
           

        

        
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        ARTICLE
VII

      

      

      
        EXECUTORY
CONTRACTS

      

      

      7.1.           Assumption of Executory
Contracts.  As of the Confirmation Date, but subject to the
occurrence of the Effective Date, all of the Debtors’ Executory Contracts
(including, without limitation, those Executory Contracts identified as “to be
assumed” on the list attached as Exhibit D to the Disclosure Statement, as such
list may be revised and included in the Plan Supplement or otherwise) shall be
deemed assumed by the applicable Debtors and retained by the applicable
Reorganized Debtors in accordance with the provisions and requirements of
Bankruptcy Code §§ 365 and 1123, except those Executory Contracts that (i) have
previously been rejected by an order of the Bankruptcy Court, (ii) are the
subject of a motion to reject pending on the Confirmation Date, [(iii) are
identified as “to be rejected” on the list attached as Exhibit E to the
Disclosure Statement (as such list may be revised and included in the Plan
Supplement or otherwise)], or (iv) are otherwise rejected pursuant to the terms
of the Plan.  Rejection of the Executory Contracts at issue in clauses
(iii) and (iv) in the immediately preceding sentence shall be effective as of
the Confirmation Date, subject to the occurrence of the Effective
Date.  Entry of the Confirmation Order by the Bankruptcy Court shall
constitute approval of such assumptions [and rejections (as applicable)]
pursuant to Bankruptcy Code §§ 365(a) and 1123, subject to the occurrence of the
Effective Date.  The listing of a document on [either] Exhibit D [or
Exhibit E] to the Disclosure Statement (as [either] such list may be revised and
included in the Plan Supplement or other otherwise) shall not constitute an
admission by the Debtors that such document is an executory contract or
unexpired lease or that the Debtors have any liability
thereunder.  Each Executory Contract assumed pursuant to this Article
VII shall revest in and be fully enforceable by the respective Reorganized
Debtor in accordance with its terms, except as may be modified by (i) the
provisions of the Plan, (ii) the Confirmation Order or any other applicable
order of the Bankruptcy Court approving and authorizing its assumption, or (iii)
applicable federal law.  The Debtors shall retain the right at all
times prior to the Effective Date to (a) assume any additional or other
Executory Contract(s) not specifically identified on the list thereof attached
as Exhibit D to the Disclosure Statement (or as such list may be revised and
included in the Plan Supplement or otherwise) as “to be assumed” [(including,
without limitation, any Executory Contracts currently identified on Exhibit E to
the Disclosure Statement as “to be rejected”)], or (b) reject any additional or
other Executory Contract(s) [not specifically identified on the list thereof
attached as Exhibit E to the Disclosure Statement (or as such list may be
revised and included in the Plan Supplement or otherwise) as “to be rejected”]
(including, without limitation, any Executory Contracts currently identified on
Exhibit D to the Disclosure Statement as “to be assumed”), in each case upon
providing notice to the non-Debtor party thereto.  Without limiting
the effect of this Plan Section 7.1, Exhibit[s] D [and E] to the Disclosure
Statement contain schedules of all known Executory Contracts currently
anticipated to be either assumed [or rejected] under this Plan, respectively (as
such schedules may be revised and included in the Plan Supplement or otherwise),
subject to the Debtors’ right to determine at any time subsequently, on or prior
to the Effective Date, including, without limitation, as may be set forth in the
Plan Supplement, to either assume or reject any Executory Contracts or to
include additional Executory Contracts to be either [(a)] assumed under the Plan
[or (b) rejected under the Plan], in each case upon providing notice to the
non-Debtor party thereto.

      
        
           

        

        
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      7.2.           Cure of Defaults of Assumed Executory
Contracts.  Any monetary amounts by which each Executory
Contract to be assumed pursuant to the Plan is in default shall be satisfied,
pursuant to Bankruptcy Code § 365(b)(1), by payment of any default amount (as
such amount has been agreed upon by the Reorganized Debtors or, in the event of
a dispute regarding such default amount, as such amount has been determined by
an order of the Bankruptcy Court) in Cash by the latest of (i) the Effective
Date (or as soon thereafter as is practicable), (ii) in the event of a dispute
regarding the default amount, within 30 days of the entry of an order of the
Bankruptcy Court establishing such default amount, (iii) the date of an order of
the Bankruptcy Court (or as soon thereafter as is practicable) approving and
authorizing the assumption or assignment of an Executory Contract not otherwise
assumed [or rejected] pursuant to the terms of the Plan, or (iv) on such other
terms as the parties to such Executory Contracts may otherwise
agree.  Notwithstanding the foregoing, in the event of a dispute
regarding:  (1) the amount of any cure payments, (2) the ability of
the Reorganized Debtors to provide “adequate assurance of future performance”
(within the meaning of Bankruptcy Code § 365) under the contract or lease to be
assumed, or (3) any other matter pertaining to assumption (each an “Assumption Dispute”), the cure
payments required by Bankruptcy Code § 365(b)(1) shall be made following the
entry of a Final Order resolving the Assumption Dispute and approving the
assumption; provided, however, that (a) in
the event the Bankruptcy Court determines that the actual cure payment owed to a
particular non-Debtor party to an Executory Contract exceeds the proposed cure
amount as set forth in the notice to be provided by the Debtors pursuant to
Section 7.3 hereof and as set forth on Exhibit D to the Disclosure Statement, or
(b) the Debtors and the applicable non-Debtor party involved in any Assumption
Dispute cannot otherwise consensually resolve such Assumption Dispute prior to
the Effective Date, the Debtors may reject the Executory Contract at issue
pursuant to Bankruptcy Code § 365 rather than paying the disputed cure amount,
by presenting a proposed order to the Bankruptcy Court for such rejection,
without any other or further notice.  In the event any Executory
Contract is so rejected, the non-Debtor party thereto shall be entitled to file
a Proof of Claim pursuant to Plan Section 7.4, which Claim shall be classified
pursuant to Plan Section 7.5, but shall not be entitled to any other or further
Claim or relief from either of the Debtors or the Reorganized
Debtors.

      

      7.3.           Notice of Proposed Cure Amount and
Objection Deadline.  The Debtors shall provide notice to the
non-Debtor party to all known Executory Contracts to be assumed of (i) the
proposed default amount owed (if any) under the applicable Executory Contract
and (ii) the last date by which such non-Debtor party may file an objection or
other response with respect to such proposed default amount.  Any non-Debtor party that fails to
object or otherwise respond in a timely manner to such notice of the proposed
default amount owed shall be deemed to have consented to such proposed amount
and to the proposed assumption by the Debtors of the applicable Executory
Contract, and may not receive any other or additional distribution or
consideration from the Debtors, the Estates, the Reorganized Debtors, or the
Assets, or otherwise seek recourse against, the Debtors, the Estates, the
Reorganized Debtors, or any of the Assets that are to be distributed under the
terms of the Plan, beyond such proposed amount owed.

      

      7.4.           Rejection Claims.

      

       
 (a)    [Each non-Debtor party to any
Executory Contract rejected under and pursuant to this Article VII shall be
entitled to file, not later than 30 days after the entry of the Confirmation
Order (the “Plan Rejection Bar
Date”), a Proof of Claim against the applicable Debtor for alleged
Rejection Claims.  If no such Proof of Claim for a Rejection Claim is
timely filed against the applicable Debtor, any such Claim shall be forever
barred and shall not be enforceable against the Debtors, the Reorganized
Debtors, or their respective Estates or Assets.  Objections to any
such Proof of Claim shall be filed not later than 90 days after such Proof of
Claim is filed (subject to any potential further extensions of such date as so
ordered and approved by the Bankruptcy Court), and the Bankruptcy Court shall
decide any such objections.  Distributions (if any) in respect of such
Claims (consistent with
the distributions to be received by Holders of other Claims in the Class into
which such Claims fall, as determined by Section 7.5 hereof) shall be made not
earlier than the later of (a) 30 days after the expiration of the 90-day period
(as such period may be extended by order of the Bankruptcy Court) for filing an
objection in respect of any
Proof of Claim filed pursuant to this Section 7.4 and (b) 30 days after
the Claim has been Allowed by a Final Order of the Bankruptcy Court, provided
that no such distribution shall be made before the Effective
Date.

      
        
           

        

        
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 (b)   Notwithstanding anything to the contrary herein, the
Plan Rejection Bar Date shall apply only to Rejection Claims with respect to
those Executory Contracts that are rejected under and pursuant to the
Plan.  Any Holder of a Rejection Claim for an Executory Contract that
is not rejected pursuant to this Plan, but whose Rejection Claim instead arises
under an Executory Contract that either has already been rejected by an order of
the Bankruptcy Court or is the subject of a separate motion to reject pending on
the Confirmation Date, must file a Proof of Claim for such Rejection Claim by
the date provided in any order relating to such Rejection Claim.]

      

      7.5.           Classification of Rejection
Claims.  Except as otherwise provided under the Plan, any
Rejection Claims (a) against Aurora shall be treated as Class 3A Claims and (b)
against HPPC shall be treated as Class 3B Claims, in each instance to the extent
they are Allowed Claims.

      

      7.6.           Reinstatement of Allowed Secondary
Liability Claims Arising From or Related to Executory Contracts Assumed by the
Debtors.  On the Effective Date, in accordance with Section
6.28 hereof, any Allowed Secondary Liability Claim arising from or related to
either Debtor’s joint or several liability for the obligations under or with
respect to:  (a) any Executory Contract that is being assumed or
deemed assumed pursuant to Bankruptcy Code § 365 by the other Debtor or
Reorganized Debtor or (b) a Reinstated Claim shall be
Reinstated.  Accordingly, such Allowed Secondary Liability Claims
shall survive and be unaffected by the entry of the Confirmation
Order.

      

      7.7.           Insurance
Policies.

      

       
 (a)    All insurance policies of the Debtors
(including, without limitation, the Directors & Officers Liability Insurance
Policies) providing coverage to the Debtors and/or the Debtors’ current or
former directors, officers, stockholders, agents, employees, representatives,
predecessors, and others for conduct in connection in any way with the Debtors,
their assets, liabilities, and/or operations, to the extent such policies are
Executory Contracts, shall be deemed assumed by the applicable Debtors as of the
Confirmation Date.  Entry of the Confirmation Order by the Bankruptcy
Court shall constitute approval of such assumptions pursuant to Bankruptcy Code
§§ 365 and 1123 or otherwise.  Each insurance policy assumed pursuant
to this Article VII shall revest in, and be fully enforceable by, the respective
Reorganized Debtor in accordance with its terms, except as may be modified by
(i) the provisions of the Plan, (ii) any order of the Bankruptcy Court approving
and authorizing its assumption, or (iii) applicable federal law.

      

       
 (b)    Notwithstanding anything provided herein to the
contrary, the Plan shall not be deemed in any way to diminish or impair the
enforceability of any insurance policies that may cover claims against either of
the Debtors and/or the Debtors’ current or former directors, officers,
stockholders, agents, employees, representatives, predecessors or any other
Person (including, without limitation, the Directors & Officers Liability
Insurance Policies).  Any failure by the Debtors to list any
particular insurance policy on any schedule of Executory Contracts to be assumed
under the Plan the Debtors may file in these Cases (either contained in the
Disclosure Statement, including, without limitation, Exhibit D thereto, the Plan
Supplement, or otherwise) shall not in any way impair the Debtors’ ability to
assume such policy, and instead, any and all such policies shall still be
assumed in accordance with this Section 7.7.

      
        
           

        

        
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      7.8.           Existing Stock Option
Plans.  Subject to the Plan’s becoming effective on the
Effective Date pursuant to Section 8.2 hereof, the Existing Stock Option Plans
shall not be assumed by Reorganized Aurora on the Effective Date, but shall
instead be cancelled and deemed terminated and of no force and effect as of the
Effective Date.

      

      7.9.           Oil and Gas
Leases.  Notwithstanding any other provision of the Plan, the
Debtors' oil and gas leases shall not constitute nor be considered executory
contracts or unexpired leases under Bankruptcy Code §§ 365 or 1123 for any
purpose under this Plan or otherwise in connection with these
Cases.  Any Claims asserted under these oil and gas leases that arose
as of the Petition Date shall constitute Class 3A Claims, and any such Claims
that arose after the Petition Date shall constitute Administrative Claims, and
in each instance shall be subject to all rights, defenses, and potential
disputes and objections of the Debtors with respect thereto.

      

      7.10.         Executory Contracts Entered Into
After the Petition Date.  Executory Contracts entered into
after the Petition Date by either Debtor (including the Management Transition
Services Agreements) may be performed by the Debtor or the Reorganized Debtor
liable thereunder in accordance with the terms and subject to the conditions of
such Executory Contract(s) in the ordinary course of
business.  Accordingly, such Executory Contracts shall survive and
remain unaffected by entry of the Confirmation Order.

      

      
        ARTICLE
VIII

      

      

      
        CONDITIONS
PRECEDENT TO CONFIRMATION AND EFFECTIVENESS

      

      

      8.1.           Conditions to
Confirmation.  Confirmation of the Plan shall not occur unless
and until the following conditions have been (i) satisfied or (ii) waived or
modified pursuant to Plan Section 8.3:  (a) the Bankruptcy Court shall
have entered an order approving the Disclosure Statement as containing adequate
information pursuant to Bankruptcy Code § 1125, and such order shall not have
been reversed, stayed, amended, or modified in any manner adverse to the Debtors
or their Estates, and (b) the Confirmation Order shall be acceptable, in form
and substance, to the Debtors and the Administrative Agents.

      

      8.2.           Conditions to
Effectiveness.  Notwithstanding any other provision of the Plan
or the Confirmation Order, the Effective Date shall not occur, and the Plan
shall not be binding on any Person, unless and until each of the following
conditions has been (a) satisfied or (b) waived or modified pursuant to Plan
Section 8.3:

      

       
 (a)    The Confirmation Order (i) shall have been
entered on the docket by the Clerk of the Bankruptcy Court in form and substance
acceptable to the Debtors and the Administrative Agents and (ii) shall not have
been reversed, stayed, amended, or modified in any manner adverse to the Debtors
or their Estates;

      

       
 (b)    The Plan Documents and all other documents
provided for under, and reasonably necessary to effectuate the (i) terms of, and
(ii) actions contemplated under, the Plan, shall be in form and substance
acceptable to the Debtors and the Administrative Agents, and shall have been
executed and delivered by the parties thereto, unless such execution or delivery
has been waived in writing by the parties benefited by such documents; provided, however, neither (i)
the execution and delivery of the New Warrants, or any form of agreement annexed
thereto, by the holder thereof, nor (b) the execution and delivery of any
documents establishing the terms and conditions of a Management and Director
Equity Plan, shall be a condition to the occurrence of the Effective
Date.  The Plan Documents to which the condition in this sub-paragraph
(b) refers include, but are not limited to, the following
documents:

      
        
           

        

        
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      (1)           the
Amended and Restated Articles of Incorporation, the Amended and Restated
By-Laws, and the Amended and Restated LLC Agreement;

      

      (2)           the
Exit Credit Facility and the Exit Credit Facility Guarantee, the New Secured
Notes, the Working Capital Loans Notes, and any document memorializing the New
Aurora Preferred Stock, and all instruments, certificates, guarantees,
agreements, and documents contemplated by Plan Sections 6.13, 6.17, and
6.18;

      

      (3)           the
Registration Rights Agreement; and

      

      (4)           the
Voting Agreement (to the extent applicable in accordance with Section 6.19(b)
hereof).

      

       
 (c)    all conditions precedent to the consummation
of, and the funding obligation under, the Exit Credit Facility shall have been
satisfied or waived in accordance with the terms thereof;

      

       
(d)    the Amended and Restated Articles of Incorporation
and the Amended and Restated LLC Agreement shall have been adopted and duly
filed (if required by applicable law) with the applicable authority of each
Reorganized Debtor’s jurisdiction of incorporation or formation in accordance
with such jurisdiction’s state corporate or limited liability company laws (as
applicable);

      

       
 (e)    the new respective Board of Directors and Board
of Managers of the Reorganized Debtors (as applicable) shall have been
appointed; and

      

       
 (f)     all authorizations, consents, and
regulatory approvals required (if any) in connection with the effectiveness of
this Plan shall have been obtained.

      

      If the
Effective Date (i) does not occur for any reason within 90 days following the
entry of the Confirmation Order, unless such time period is extended by the
Debtors with the consent of the Administrative Agents, or (ii) if on or before
90 days following the entry of the Confirmation Order, either (a) the Debtors
determine, or (b) the Bankruptcy Court determines in a Final Order, that one or
more of the conditions to effectiveness set forth in Plan Section 8.2 will not
be satisfied within such 90-day period, then the Plan and the Confirmation Order
shall immediately, upon such applicable date, be deemed null and void and, in
such event, nothing contained herein or therein shall be deemed to constitute a
waiver or release of any Claims by or against, or any Interests in, the Debtors
or any other Person or to prejudice in any manner the rights of the Debtors or
any Person in any further proceedings (whether or not such proceedings involve
either of the Debtors).  If the Confirmation Order is reversed,
vacated, or revoked on appeal or otherwise by a court of competent jurisdiction,
the Plan shall be null and void ab initio in all respects,
and, without limiting the generality of the foregoing, nothing contained in the
Plan or the Disclosure Statement shall:  (i) constitute a waiver or
release of any Claims by or against, or any Interests in, the Debtors; (ii)
prejudice in any manner the rights of the Debtors; (iii) constitute an
admission, acknowledgement, offer, or undertaking by the Debtors in any respect;
or (iv) affect or impair, in any way, any and all Claims against the Debtors,
any and all claimed contractual subordination rights and claims between or among
the Holders of Claims against the Debtors, and any and all rights and claims
between or among holders of Claims relating in any manner to distributions on
account of Claims against the Debtors based upon any claimed contractual
subordination rights.

      
        
           

        

        
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      8.3.           Waiver or Modification of
Conditions.  The Debtors may with the consent of the
Administrative Agents, but shall have no obligation to, waive or modify in
writing, at any time, any of the conditions set forth in this Article VIII,
without notice, without leave of or order of the Bankruptcy Court, and without
any formal action other than proceeding to consummate the Plan.  The
failure to (a) satisfy or (b) waive or modify any such condition may be asserted
by the Debtors regardless of the circumstances giving rise to the failure of
such conditions to be (a) satisfied or (b) waived or modified.

      

      
        ARTICLE
IX

      

      
         

        TITLE
TO PROPERTY AND RELEASES

      

      

      9.1.           Vesting of
Property.  Except as otherwise provided in the Plan or the
Confirmation Order, upon the Effective Date, but retroactive to the Confirmation
Date, (a) the Reorganized Debtors shall continue to exist as separate legal
entities with all the powers of corporations and/or limited liability companies
(as applicable) under applicable law and without prejudice to any right to alter
or terminate such existence (whether by merger or otherwise) under applicable
state law, and (b) all Assets of the respective Debtors (including, but not
limited to, Aurora’s equity interests in HPPC and the Debtors’ respective
interests in any non-Debtor subsidiary or Affiliate (to the extent that any such
non-Debtor subsidiary or Affiliate has not been dissolved, sold, or otherwise
transferred under applicable law prior to the Effective Date), but not including
the NW Bank Note Collateral, which shall be transferred to the Holder of the
Allowed Class 2D Claim, subject to the terms and conditions of the Plan,
including Section 4.4(b) hereof), wherever situated, shall vest in the
applicable Reorganized Debtor, subject to the provisions of the Plan and the
Confirmation Order.  Thereafter, each Reorganized Debtor may operate
its business, incur debt and other obligations in the ordinary course of its
business, and may otherwise use, acquire, and dispose of property free of any
restrictions of the Bankruptcy Code, the Bankruptcy Rules, the Local Bankruptcy
Rules, and the Bankruptcy Court.  After the Effective Date, but
retroactive to the Confirmation Date, all property retained by the Reorganized
Debtors pursuant hereto shall be free and clear of all Claims, debts, Liens,
security interests, obligations, encumbrances, and interests of Creditors and
Interest Holders of the Debtors and all other Persons, except for (i) as is
contemplated by or provided in the Plan or the Confirmation Order; (ii) the
obligation to perform according to the Plan and the Confirmation Order; and
(iii) the respective Claims, debts, Liens, security interests, encumbrances, and
interests (a) of those Holders of (1) Allowed Class 2C Claims whose Secured
Claims the applicable Debtor elects to Reinstate pursuant to Plan Section 4.3
(as opposed to the applicable Debtor’s electing to (A) pay the amount of such
Allowed Class 2C Claim in full, (B) return the underlying collateral to such
Class 2C Creditor, or (C) otherwise satisfy such Allowed Claim in a manner
provided for under Section 4.3 of the Plan), or (2) the NW Bank LCs Collateral
(subject to the limitations set forth in Section 4.4(b) of the Plan), in the
event  Aurora elects to keep the NW Bank LCs in place, or (b) arising
in connection with the Exit Credit Facility (including, without limitation, the
New Secured Notes and the Working Capital Loans Notes) and the Exit Credit
Facility Guarantee.

      
        
           

        

        
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      9.2.           Discharge and
Injunction.  Pursuant to Bankruptcy Code §
1141(b) or otherwise, except as may otherwise be provided herein or in the
Confirmation Order, upon the occurrence of the Effective Date, the rights
afforded and the payments and distributions to be made under this Plan shall be
in complete exchange for, and in full and unconditional settlement,
satisfaction, discharge, and release of, any and all existing debts, Claims, and
Interests of any kind, nature, or description whatsoever against the Debtors or
any of the Debtors’ Assets or other property, and shall effect a full and
complete release, discharge, and termination of all Liens, security interests,
or other Claims, interests, or encumbrances upon all of the Debtors’ Assets and
property.  No Creditor or Interest Holder of the Debtors nor any other
Person may receive any distribution from the Debtors, the Estates, the
Reorganized Debtors, or the Assets, or seek recourse against, the Debtors, the
Estates, the Reorganized Debtors, or any of the Assets that are to be
distributed under the terms of the Plan, except for those distributions
expressly provided for under the Plan.  All Persons are precluded from
asserting, against any property that is to be distributed under the terms of the
Plan, any Claims, Interests, obligations, rights, Causes of Action, liabilities,
or equity interests based upon any act, omission, transaction, or other activity
of any kind or nature that occurred prior to the Confirmation Date, other than
as expressly provided for in the Plan or the Confirmation Order, whether or not
(a) a Proof of Claim or Proof of Interest based upon such debt or Interest (as
applicable) is filed or deemed filed under Bankruptcy Code § 501; (b) a Claim or
Interest based upon such debt or Interest (as applicable) is allowed under
Bankruptcy Code § 502; or (c) the Holder of a Claim or Interest based upon such
debt or Interest (as applicable) has accepted the Plan, is deemed to have accepted the Plan
under Bankruptcy Code § 1126(f), or is deemed to have rejected the Plan under
Bankruptcy Code § 1126(g).  Except as otherwise provided in the Plan
or the Confirmation Order with respect to a Claim that is expressly Reinstated
under the terms and conditions of the Plan, all Holders of Claims and Interests
arising prior to the Effective Date shall be permanently barred and enjoined
from asserting against the Debtors, the Estates, the Reorganized Debtors, their
successors, or the Assets, any of the following actions on account of such Claim
or Interest: (a) commencing or continuing in any manner any action or other
proceeding on account of such Claim or Interest against property to be
distributed under the terms of the Plan, other than to enforce any right to
distribution with respect to such property under the Plan; (b) enforcing,
attaching, collecting, or recovering in any manner any judgment, award, decree,
or order against any of the property to be distributed under the terms of the
Plan, other than as permitted under subclause (a) above; (c) creating,
perfecting, or enforcing any Lien or encumbrance against any property to be
distributed under the terms of the Plan; (d) asserting any right of setoff,
subrogation, or recoupment of any kind, directly or indirectly, against any
obligation due the Debtors or the Reorganized Debtors, the Assets or any other
property of the Debtors or the Reorganized Debtors, or any direct or indirect
transferee of any property of, or successor in interest to, any of the foregoing
Persons; and (e) acting or proceeding in any manner, in any place whatsoever,
that does not conform to, or comply with, the provisions of the
Plan.

      
        
           

        

        
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      9.3.           No Waiver of
Discharge.  Except as otherwise specifically provided herein,
nothing in this Plan shall be deemed to waive, limit, or restrict in any way the
discharge granted to the Debtors upon Confirmation of the Plan by Bankruptcy
Code § 1141.

      

      9.4.           Post-Consummation Effect of Evidences
of Claims or Interests.  Except as otherwise expressly set
forth in this Plan
(including, without limitation, Plan Sections 4.5 and 6.2), any and all notes,
stock certificates, and/or other evidences of Claims against, or Interests in,
either of the Debtors shall, effective upon the Effective Date, represent
only the right to participate in the distributions contemplated by the Plan, if
any, and shall otherwise be cancelled and of no force and effect as of the
Effective Date.

      

      9.5.           Term of Injunctions or
Stays.  Unless otherwise provided for in this Plan or the
Confirmation Order, or any other Final Order of the Bankruptcy Court, all
injunctions or stays provided for in these Cases pursuant to Bankruptcy Code §
105, § 362, or otherwise, and in effect on the Confirmation Date, shall remain
in full force and effect until the Effective Date.

      

      9.6.           Releases by Holders of Claims and
Interests.

      

       
 (a)   Except as otherwise provided herein, as of the
Effective Date, each Non-Debtor Releasing Party, in consideration of the
obligations of the Debtors and the Reorganized Debtors under the Plan and the
Cash, the New Aurora Preferred Stock, the New Aurora Class A Common Stock, the
Exit Credit Facility (including the New Secured Notes and the Working Capital
Loans Notes), the New Warrants, and other contracts, instruments, releases,
agreements, and documents to be executed and delivered in connection with the
Plan, and in consideration of (i) the efforts of the Released Parties to
facilitate the expeditious reorganization of the Debtors and the implementation
of the restructuring contemplated by the Plan and (ii) certain of the Released
Parties’ agreeing to have their Employee Termination Claims treated in the
manner set forth in Section 6.29 hereof, shall be deemed to have conclusively,
absolutely, unconditionally, irrevocably, and forever released and discharged
the Released Parties from any and all claims, obligations, rights, Causes of
Action, or liabilities (including, but not limited to, any claims arising out
of, or relating to, any alleged fiduciary or other duty; any alleged violation
of any federal or state securities law or any other law relating to creditors’
rights generally; any of the Released Parties’ or the Non-Debtor Releasing
Parties’ ownership of any securities of either of the Debtors; or any derivative
claims asserted on behalf of a Debtor), whether liquidated or unliquidated,
fixed or contingent, matured or unmatured, known or unknown, foreseen or
unforeseen, existing or hereafter arising, in law, equity or otherwise, that
such Non-Debtor Releasing Party ever had, now has, or may have that are based in
whole or in part on any act, omission, transaction, or occurrence from the
beginning of time through and including the Effective Date in any way relating
to the Debtors, these Cases and the commencement thereof, or the Plan; the
Disclosure Statement; the Plan Documents; the formulation, negotiation,
preparation, dissemination, implementation, and/or administration of the Plan,
the Disclosure Statement, and the Plan Documents; the confirmation and
consummation of the Plan; the subject matter of, or the transactions or events
giving rise to, any Claim or Interest of such Non-Debtor Releasing Party, any
security previously issued by either of the Debtors, and any and all claims
based upon or arising out of such actions or omissions shall be forever and
completely waived and released by the Non-Debtor Releasing Parties; provided, however, this Section
9.6(a) shall not release, and the Non-Debtor Releasing Parties do not waive the
right to enforce, the Debtors’ or the Reorganized Debtors’ duties, obligations,
covenants, and agreements under (a) the Plan, (b) any settlement agreement
approved by the Bankruptcy Court in these Cases, (c) the Assumed Contracts, or
(d) the Plan Documents to be delivered under the Plan; provided further, however, that the
release set forth in this Section 9.6(a) is in addition to the discharge of
Claims and termination of Interests provided in this Plan and under the
Confirmation Order and the Bankruptcy Code; and provided further, however, that nothing
in this Section 9.6(a) shall be deemed to assert or imply any admission of
liability on the part of any of the Released Parties.

      
        
           

        

        
          -51-

          
            

          

        

        
           

        

      

      

       
 (b)    All Non-Debtor Releasing Parties shall be
forever precluded from asserting any of the claims released pursuant to this
Section 9.6 against any of the Released Parties or any of the Released Parties’
respective assets; and to the extent that any Non-Debtor Releasing Party
receives monetary damages from any Released Party on account of any claim
released pursuant to this Section 9.6, such Non-Debtor Releasing Party hereby
assigns all of its right, title, and interest in and to such recovery to the
Released Parties against whom such money is recovered.

      

       
 (c)    Notwithstanding any provision of the Plan to
the contrary, the releases contained in this Section 9.6 shall not be construed
as, or operate as a release of, or limitation on (i) any claims by the
Non-Debtor Releasing Parties against the Released Parties that do not relate to
or involve the Debtors or these Cases, (ii) any claims, obligations, rights,
causes of action, or liabilities by the Non-Debtor Releasing Parties against the
Released Parties arising out of any action or omission to the extent that such
action or omission is determined in a Final Order by a court of competent
jurisdiction to have constituted willful misconduct or fraud, or (iii)
objections to Claims.

      

      9.7.           Release by the Debtor Releasing
Parties.  On
the Effective Date, pursuant to Bankruptcy Code § 1123(b), Bankruptcy Rule 9019,
or otherwise, and except as otherwise specifically provided in the Plan or in
the Plan Documents, the Debtor Releasing Parties, in consideration of the
obligations of the Debtors and the Reorganized Debtors under the Plan and the
Cash, the New Aurora Preferred Stock, the New Aurora Class A Common Stock, the
Exit Credit Facility (including the New Secured Notes and the Working Capital
Loans Notes), the New Warrants, and other contracts, instruments, releases,
agreements, and documents to be executed and delivered in connection with the
Plan, and in consideration of (i) the efforts of the Released Parties to
facilitate the expeditious reorganization of the Debtors and the implementation
of the restructuring contemplated by the Plan and (ii) certain of the Released
Parties’
agreeing to have their Employee Termination Claims treated in the manner set
forth in Section 6.29
hereof, shall be deemed to have conclusively, absolutely, unconditionally,
irrevocably, and forever released and discharged the Released Parties from any
and all claims, obligations, suits, judgments, damages, demands, debts, rights,
Causes of Action, and liabilities, whether liquidated or unliquidated, fixed or
contingent, matured or unmatured, known or unknown, foreseen or unforeseen, then
existing or hereafter arising, in law, equity, or otherwise, that such Debtor
Releasing Party ever had, now has, or may have that are based in whole or in
part on any act, omission, transaction, or occurrence taking place on or prior
to the Effective Date in any way relating to the Debtors, these Cases and the
Commencement thereof, or the Plan; the Disclosure Statement; the Plan Documents;
the formulation, negotiation, preparation, dissemination, implementation, and/or
administration of the Plan, the Disclosure Statement, and the Plan Documents;
the confirmation and consummation of the Plan; the subject matter of, or the
transactions or events giving rise to, any Claim or Interest of such Debtor
Releasing Party, or any security previously issued by either of the
Debtors.  The immediately preceding sentence shall not, however, apply
to (i) any indebtedness of any Person to either of the Debtors for money
borrowed by such Person or any other contractual obligation of any Person to
either of the Debtors, or (ii) any setoff or counterclaim that the Debtors may
have or assert against any Person, provided that the aggregate amount thereof
shall not exceed the aggregate amount of any Claims held or asserted by such
Person against the Debtors.  Holders of Claims and Interests
against either of the Debtors shall be
enjoined from commencing or continuing
any action, employment of process, or act to collect, offset, or recover any such claim that
could be brought on behalf of or in the name of the
Debtors.

      
        
           

        

        
          -52-

          
            

          

        

        
           

        

      

      

      9.8.           Injunction Related to
Releases.  The Confirmation Order will and
shall be deemed to permanently enjoin the commencement or prosecution by any
Person, whether directly, derivatively, or otherwise, of any claims,
obligations, suits, judgments, damages, demands, debts, rights, Causes of
Action, or liabilities released pursuant to the Plan (including the releases set
forth in this Article IX).

      

      9.9.           Exculpation.  No Released Party shall have or
incur, and each Released Party hereby is exculpated from, any liability to any
Person for any act taken or not taken or any omission in connection with,
arising from or relating to these Cases (and the commencement or administration
thereof); the Disclosure Statement, the Plan, or the formulation, negotiation,
preparation, dissemination, implementation, or administration of any of the
foregoing documents; the solicitation of votes in connection with Confirmation
of this Plan; the Exit Credit Facility; the Plan Documents; the Confirmation
and/or consummation of this Plan; any contract, instrument, release, or other
agreement or document created or entered into in connection with the Plan; any
other act taken or omitted to be taken in connection with, or in contemplation
of, any of the restructuring or other transactions contemplated by this Plan;
and the property to be distributed or otherwise transferred under this
Plan; provided further, however, that nothing in this Plan Section
9.9 shall release any
entity from any claims, obligations, rights, causes of action, or liabilities arising out of such
entity’s fraud or willful misconduct.  Each Released Party
shall be entitled reasonably to rely upon the advice of counsel with respect to
its duties and responsibilities under this Plan, and shall be fully protected in
acting or refraining from acting in accordance with such
advice.

      

      
        ARTICLE
X

      

      

      
        MODIFICATION
AND RESERVATION OF RIGHTS IN THE

      

      
        EVENT
OF NONACCEPTANCE OF THE PLAN

      

      

      The
Debtors hereby reserve the right to request that the Bankruptcy Court confirm
the Plan over the objection of any impaired Class or Interest in accordance with
the applicable provisions of Bankruptcy Code § 1129(b).  In the event
that any impaired Class or Classes of Allowed Claims that is entitled to vote
with respect to the Plan does not accept the Plan, upon the written request of
the Debtors filed with the Bankruptcy Court, the Plan shall be modified,
revised, and amended to provide such treatment as set forth in such request, to
ensure that the Plan does not discriminate unfairly, and is fair and equitable,
with respect to the Classes rejecting the Plan, and, in particular, to provide
the treatment necessary to meet the requirements of Bankruptcy Code § 1129(a)
and (b) with respect to (i) the rejecting Classes and (ii) any other Classes
adversely affected by the modifications caused by this Article X.  In
particular, the treatment of any rejecting Classes or adversely affected Classes
may be modified and amended from that set forth in Article V of the Plan, even
if less favorable, to the minimum treatment necessary to meet the requirements
of Bankruptcy Code § 1129(a) and (b).  These modifications may
include, but shall not be limited to, cancellation of all amounts otherwise
payable under the Plan to the rejecting Classes and to any junior Classes
affected thereby (even if such Classes previously accepted the Plan) consistent
with Bankruptcy Code § 1129(b)(2)(B)(ii) and (C)(ii).

      
        
           

        

        
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        ARTICLE
XI

      

      

      
        SUBSTANTIVE
CONSOLIDATION OF THE DEBTORS

      

      

      Although
the Debtors have not, as of the date of the filing of this Plan sought such
relief, the Debtors reserve the right to seek, and only upon the consent of the
Administrative Agents, the entry of an order of the Bankruptcy Court providing
for the substantive consolidation of the Debtors for the purpose of implementing
the Plan, including for purposes of voting, confirmation, and distributions to
be made under the Plan, subject to the right of any party in interest to object
to such relief.

      

      
        ARTICLE
XII

      

      

      
        RETENTION
OF JURISDICTION

      

      

      12.1.         Claims and
Actions.  Following the Effective Date, the Bankruptcy Court
shall retain such jurisdiction over these Cases as is legally permissible,
including, without limitation, such jurisdiction as is necessary to ensure that
the intents and purposes of the Plan are carried out.  The Bankruptcy
Court shall also expressly retain jurisdiction:  (a) to hear and
determine all Claims against, or Interests in, either of the Debtors; and (b) to
enforce all Causes of Action that may exist on behalf of either of the Debtors
that are not otherwise waived or released under the Plan.

      

      12.2.         Retention of Additional
Jurisdiction.  Following the Effective Date, the Bankruptcy
Court shall also retain jurisdiction for the purpose of classification of Claims
and Interests, the re-examination of Claims that have been Allowed, and the
dispositions of such objections as may be filed to any Claims, including
Bankruptcy Code § 502(c) proceedings for estimation of Claims.  The
Bankruptcy Court shall further retain jurisdiction for the following additional
purposes:

      

        (a)    to
decide all questions and disputes regarding title to the respective Assets of
the Debtors, all Causes of Action, controversies, disputes, or conflicts,
whether or not subject to any pending action as of the Effective Date, between
either of the Debtors and any other party, including, without limitation, any
right to recover assets pursuant to the provisions of the Bankruptcy
Code;

      

        (b)    to
modify the Plan after the Effective Date in accordance with the terms of the
Plan and pursuant to the Bankruptcy Code and the Bankruptcy Rules;

      

        (c)    to
enforce and interpret the terms and conditions of the Plan;

      
        
           

        

        
          -54-

          
            

          

        

        
           

        

      

        (d)    to
enter such orders, including, but not limited to, such future injunctions as are
necessary to enforce the respective title, rights, and powers of the Debtors,
and to impose such limitations, restrictions, terms, and conditions on such
title, rights, and powers as the Bankruptcy Court may deem
necessary;

      

        (e)    to
enter an order closing these Cases;

      

        (f)     to
correct any defect, cure any omission, or reconcile any inconsistency in the
Plan or the Confirmation Order as may be necessary to implement the intents and
purposes of the Plan;

      

       
(g)    to decide any and all objections to the allowance of
Claims or purported Liens, and to otherwise determine the amount of the NW Bank
Secured Claim and the NW Bank Deficiency Claim in the event of any dispute with
NW Bank with respect thereto;

      

       (h)    to
determine any and all applications for allowances of compensation and
reimbursement of expenses and the reasonableness of any fees and expenses
authorized to be paid or reimbursed under the Bankruptcy Code or the
Plan;

      

       
(i)     to determine any applications or motions
pending on the Effective Date for the rejection, assumption, or assignment of
any Executory Contract and to hear and determine, and, if need be, to liquidate
any and all Claims and/or disputes arising therefrom;

      

        (j)     to
determine any and all applications, adversary proceedings, and contested matters
that may be pending on the Effective Date;

      

        (k)    to
consider any modification of the Plan, whether or not the Plan has been
substantially consummated, and to remedy any defect or omission or to reconcile
any inconsistency in any order of the Bankruptcy Court, to the extent authorized
by the Plan or the Bankruptcy Court;

      

        (l)     to
determine all controversies, suits, and disputes that may arise in connection
with the interpretation, enforcement, or consummation of the Plan or any Plan
Document;

      

        (m)   to
consider and act on the compromise and settlement of any Claim against or Cause
of Action by or against either of the Debtors arising under or in connection
with the Plan;

      

       
(n)    to issue such orders in aid of execution of the Plan
as may be authorized by Bankruptcy Code § 1142;

      

       
(o)    to protect any Released Party against any Claims or
Interests released pursuant to Article IX of the Plan; and

      

        (p)    to
determine such other matters or proceedings as may be provided for under Title
28 or any other title of the United States Code, the Bankruptcy Code, the
Bankruptcy Rules, other applicable law, the Plan, or in any order or orders of
the Bankruptcy Court, including, but not limited to, the Confirmation Order or
any order that may arise in connection with the Plan or the Confirmation
Order.

      
        
           

        

        
          -55-

          
            

          

        

        
           

        

      

      12.3.         Failure of Bankruptcy Court to
Exercise Jurisdiction.  If the Bankruptcy Court abstains from
exercising or declines to exercise jurisdiction, or is otherwise without
jurisdiction over any matter arising out of these Cases, including the matters
set forth in this Article XII, this Article XII shall not prohibit or limit the
exercise of jurisdiction by any other court having competent jurisdiction with
respect to such matter.

      

      
        ARTICLE
XIII

      

      

      
        MISCELLANEOUS
PROVISIONS

      

      

      13.1.         Governing
Law.  Except to the extent the Bankruptcy Code or Bankruptcy
Rules are applicable, and subject to the provisions of the Plan Documents and
any other contract, instrument, release, indenture, or other agreement or
document entered into in connection with the Plan, the rights and obligations
arising under the Plan shall be governed by, and construed and enforced in
accordance with, the laws of the State of Michigan, without giving effect to the
principles of conflicts of law thereof.

      

      13.2.         Revocation or Withdrawal of the
Plan.  The Debtors have the right to revoke or withdraw the
Plan prior to the Confirmation Date.  If the Debtors do so revoke or
withdraw the Plan, then the Plan shall be null and void and, in such event,
nothing contained herein shall be deemed to (a) constitute a waiver or release
of any Claims by or against, or any Interests in, the Debtors or any other
Person or (b) prejudice in any manner the rights of the Debtors or any Person in
any further proceedings involving either of the Debtors.

      

      13.3.         Successors and
Assigns.  The rights, benefits, and obligations of any Person
named or referred to in the Plan shall be binding upon, and shall inure to the
benefit of, the heirs, executors, administrators, successors, or assigns of such
Person.

      

      13.4.         Time.  In computing
any period of time prescribed or allowed by the Plan, the provisions of
Bankruptcy Rule 9006(a) shall apply, and, among other things, the day of the
act, event, or default from which the designated period of time begins to run
shall not be included.  The last day of the period so computed shall
be included, unless it is not a Business Day or, when the act to be done is the
filing of a paper in court, a day on which weather or other conditions have made
the clerk’s office inaccessible, in which event the period runs until the end of
the next day which is not one of the aforementioned days.  When the
period of time prescribed or allowed is less than eight calendar days,
intermediate days that are not Business Days shall be excluded in the
computation.

      

      13.5.         Modification of the Plan Prior to or
After the Entry of the Confirmation Order.  The Debtors reserve
the right to alter, amend, or modify the Plan prior to or after the entry of the
Confirmation Order.  After the entry of the Confirmation Order, the
Debtors or the Reorganized Debtors, as the case may be, upon order of the
Bankruptcy Court, may amend or modify the Plan in accordance with Bankruptcy
Code § 1127.

      

      13.6.         No Penalty or Late
Charges.  Except as expressly stated in the Plan, or allowed by
a Final Order of the Bankruptcy Court, no penalty or late charge is to be
allowed on any Claim subsequent to the Petition Date.

      
        
           

        

        
          -56-

          
            

          

        

        
           

        

      

      

      13.7.         Professional Fees. No
Professional Fees shall be paid with respect to any Claim or Interest except as
specified herein or as allowed by an order of the Bankruptcy
Court.  All final applications for Professional Fees for services
rendered in connection with these Cases prior to and including the Confirmation
Date shall be filed with the Bankruptcy Court not later than 90 days after the
Effective Date.

      

      13.8.         Amounts of Claims. All
references to Claims and amounts of Claims refer to the amount of the Claim
allowed by Final Order of the Bankruptcy Court or by the Plan; provided, however, that Claims
that have been objected to and that have not been allowed or disallowed prior to
the day set for return of Ballots shall be voted and counted, if at all, at
$0.  The Debtors and other interested parties reserve the right, both
before and after Confirmation, to object to Claims so as to have the Bankruptcy
Court determine or estimate the Allowed amount of such Claim under the
Plan.

      

      13.9.         Deletion of Certain
Classes.  Any Class that is not occupied as of the date of the
commencement of the hearing conducted by the Bankruptcy Court to consider the
proposed Confirmation of the Plan by an Allowed Claim, or a Claim temporarily
allowed under Bankruptcy Rule 3018, shall be deemed deleted from the Plan for
all purposes.

      

      13.10.       Bankruptcy Code § 1145 and Other
Exemptions.  Pursuant to Bankruptcy Code § 1145(a)(1), the
issuance of any securities under the Plan, including, without limitation, the
New Aurora Preferred Stock, the New Aurora Class A Common Stock, the New
Warrants, the New Secured Notes, and the Working Capital Loans Notes, to the
extent any of the foregoing constitute “securities” under applicable law, shall
be exempt from the registration requirements of the Securities Act, and any
state or local laws requiring registration for the offer or sale of
securities.  All such securities, when issued or sold, shall be freely
transferable by the recipients thereof, subject to:  (i) the
provisions of Bankruptcy Code § 1145(b) relating to “underwriters,” as defined
therein, (ii) any restrictions contained in the terms of the securities
themselves; or (iii) any restrictions on the securities that have been agreed to
by the Holder of the securities with respect thereto.  Any securities
to be issued under the Plan shall be issued without further act or action under
applicable law, regulation, order, or rule.  To the maximum extent
permitted by law, pursuant to Section 4(2) of the Securities Act, Regulation D
of the Securities Act, Rule 701 promulgated under the Securities Act, or
otherwise, the issuance of any shares of the New Aurora Class B Common Stock or
other equity securities of Reorganized Aurora in connection with the exercise of
the New Warrants or pursuant to the Management and Director Equity Plan shall be
exempt from the registration requirements of the Securities Act, and any state
or local laws requiring registration for the sale of securities.

      

      13.11.       Bankruptcy Code § 1146(a)
Exemption.  Pursuant to Bankruptcy Code § 1146(a), the
issuance, transfer, or exchange of any security under the Plan; the making or
delivery of any instrument of transfer pursuant to, in implementation of, or as
contemplated by the Plan; and the revesting, transfer, assignment, or sale of
any real or personal property of either of the Debtors pursuant to, in
implementation of, or as contemplated by the Plan shall not be taxed under any
state or local law imposing a stamp tax, transfer tax, or similar tax or
fee.

      
        
           

        

        
          -57-

          
            

          

        

        
           

        

      

      13.12.       Applicability of Bankruptcy Code §
1125.  The protection afforded by Bankruptcy Code § 1125(e)
with regard to the solicitation of acceptances or rejections of the Plan and
with regard to the offer, issuance, sale, or purchase of the New Aurora
Preferred Stock, the New Aurora Class A Common Stock (including any and all
shares of common equity of Reorganized Aurora issued upon the exercise of the
New Warrants), the New Aurora Class B Common Stock, the New Warrants, the New
Secured Notes, the Working Capital Loans Notes, and/or any other securities or
notes issued in connection with the Plan, the Confirmation Order, or a Plan
Document, shall apply to the fullest extent provided by law, and the entry of
the Confirmation Order shall constitute the determination by the Bankruptcy
Court that the Debtors, the DIP Facility Lenders, the Creditors Committee, the
First Lien Loan Lenders, the Second Lien Loan Lenders, the Administrative
Agents, and each of their respective officers, directors, partners, employees,
members, agents, attorneys, accountants, financial advisors, investment bankers,
dealer-managers, placement agents, and other professionals, shall have acted in
good faith and in compliance with the applicable provisions of the Bankruptcy
Code pursuant to Bankruptcy Code § 1125(e) and, therefore, are not liable on
account of such solicitation or participation, for violation of any applicable
law, rule, or regulation governing solicitation of acceptance or rejection of a
plan or the offer, issuance, sale, or purchase of securities.

      

      13.13.       Substantial
Consummation.  On the Effective Date, the Plan shall be deemed
to be substantially consummated under Bankruptcy Code §§ 1101 and
1127(b).

      

      13.14.       Rules of
Interpretation.

      

       
 (a)    For purposes of the Plan:  (i)
whenever from the context it is appropriate, each term, whether stated in the
singular or the plural, shall include both the singular and the plural, and
pronouns stated in the masculine, feminine, or neuter gender shall include the
masculine, feminine, and the neuter gender; (ii) any reference in the Plan to a
contract, instrument, release, indenture, or other agreement or document being
in a particular form or on particular terms and conditions means that such
document shall be substantially in such from or substantially on such terms and
conditions; (iii) any reference in the Plan to an existing document or exhibit
filed, or to be filed, shall mean such document or exhibit, as it may have been
or may be amended, modified, or supplemented in accordance with its terms; (iv)
unless otherwise specified, all references in the Plan to Sections, Articles,
and Exhibits are references to Sections, Articles, and Exhibits of or to the
Plan; (v) the words “herein” and “hereto” refer to the Plan in its entirety
rather than to a particular portion of the Plan; (vi) captions and headings and
references to Articles and Sections are inserted for convenience of reference
only and are not intended to be a part of or to affect the interpretation of the
Plan; (vii) the terms “including,” “including, but not limited to,” and
“including, without limitation,” shall be deemed interchangeable and given the
same interpretation; and (viii) the rules of construction set forth in
Bankruptcy Code § 102 shall apply.

      

       
 (b)    This Plan is the product of extensive
discussions and negotiations between and among the Debtors, the First Lien Loan
Lenders, the Second Lien Loan Lenders, the DIP Facility Lenders, the Exit Credit
Facility Lenders, and the Administrative Agents.  Each of the
foregoing was represented by counsel who either (i) participated in the
formulation and documentation of, or (ii) was afforded the opportunity to review
and provide comments on, the Plan, the Disclosure Statement, the Plan Documents,
and any other documents ancillary thereto.  Accordingly, the general
rule of contract construction known as “contra preferentem” shall not
apply to the construction or interpretation of any provision of this Plan, the
Disclosure Statement, any of the Plan Documents, or the Confirmation
Order.

      
        
           

        

        
          -58-

          
            

          

        

        
           

        

      

      13.15.       Severability.  Except
as to terms which, if unenforceable, would frustrate the overall purposes of
this Plan, should any provision in the Plan be determined to be unenforceable,
such determination shall in no way limit or affect the enforceability and
operative effect of any or all other provisions of the Plan.

      

      13.16.       Implementation.  The
Debtors, the Reorganized Debtors, the First Lien Loan Lenders, the Second Lien
Loan Lenders, the Administrative Agents, the DIP Facility Lenders, the Creditors
Committee and any other Committee, and any and all Exit Credit Facility Lenders,
shall take all steps, and execute all documents, including appropriate releases
and certificates, reasonably necessary or appropriate to effectuate the
provisions contained in this Plan.

      

      13.17.       Inconsistency.  In
the event of any inconsistency between the Plan and the Disclosure Statement,
the provisions of the Plan shall govern; in the event of any inconsistency
between the Plan or the Confirmation Order and any Plan Document, the provisions
of such Plan Document shall govern (except to the extent of any such
inconsistencies that are adverse to the Debtors, the Estates, or the Reorganized
Debtors, in which case the Plan or the Confirmation Order, as applicable, shall
govern).

      

      13.18.       Service of
Documents.  Any pleading, notice or other document required by
the Plan to be served on or delivered to the following parties shall be sent by
first class U.S. mail, postage prepaid to:

      

      The
Debtors and the Reorganized Debtors:

      

      Aurora
Oil & Gas Corporation

      4110
Copper Ridge Drive, Suite 100

      Traverse
City, Michigan  49684

      Attn:  Ms.
Barbara E. Lawson

      

      Hudson
Pipeline & Processing Co., LLC

      4110
Copper Ridge Drive, Suite 100

      Traverse
City, Michigan  49684

      Attn:  Ms.
Barbara E. Lawson

      

      with
copies to

      

      Huron
Consulting

      12400
Coit Road, Suite 570

      Dallas,
Texas 72521

      Attn:  Mr.
Sanford R. Edlein

      

      Cahill
Gordon & Reindel llp

      Eighty
Pine Street

      New York,
New York  10005-1702

      
          
 Attn:  Joel
H. Levitin, Esq. and

      

      
        	
                 
      

              	
                Stephen
      J. Gordon

              

      

      
        
           

        

        
          -59-

          
            

          

        

        
           

        

      

      

      and

      

      Warner
Norcross & Judd LLP

      900 Fifth
Third Center, 111 Lyon Street NW

      Grand
Rapids, Michigan  49503

      Attn:  Stephen
B. Grow, Esq.

      

      13.19.       Compromise of
Controversies.  Pursuant to Bankruptcy Rule 9019, and in
consideration of the classification, distribution, and other benefits provided
under the Plan, the provisions of this Plan shall constitute a good faith
compromise and settlement of all Claims, Interests, or controversies resolved
pursuant to the Plan.  The entry of the Confirmation Order shall
constitute the Bankruptcy Court’s approval of each of the compromises or
settlements provided for in the Plan, and the Bankruptcy Court’s findings shall
constitute the Bankruptcy Court’s determination that such compromises and
settlements are in the best interests of the Debtors, the Reorganized Debtors,
the Estates, and any Person holding Claims against or Interests in either of the
Debtors.

      

      13.20.       No
Admissions.  Notwithstanding anything herein to the contrary,
nothing contained in the Plan shall be deemed as an admission by any Person with
respect to any matter set forth herein.

      

      13.21.       Filing of Additional
Documents.  On or before the Effective Date, the Debtors may
file with the Bankruptcy Court such agreements and other documents as may be
necessary and appropriate to effectuate and further evidence the terms and
conditions of the Plan.

      

      13.22.       Dissolution of the Creditors
Committee.  On the Effective Date, the Creditors Committee
shall be deemed dissolved and the members of the Creditors Committee shall be
released and discharged from all rights and duties arising from or related to
these Cases.  Unless otherwise agreed by the Reorganized Debtors, any
Professionals retained by the Creditors Committee and the members thereof shall
not be entitled to compensation or reimbursement of Professional Fees rendered
after the Effective Date, except for Professional Fees incurred in connection
with any applications for allowance of Professional Fees incurred as of the
Effective Date and approved by the Bankruptcy Court.

      
        
           

        

        
          -60-

          
            

          

        

        
           

        

      

      

      13.23.       Further
Actions.  The Debtors and the Reorganized Debtors shall be
authorized to execute, deliver, file, or record such documents, contracts,
instruments, certificates, releases, and other agreements and to take such other
action as may be reasonably necessary or appropriate to effectuate and further
evidence the terms and conditions of the Plan, any Plan Document, the
transactions contemplated herein and therein, the Management and Director Equity
Plan, the Registration Rights Agreement, the Exit Credit Facility, or any notes
or guarantee issued in connection herewith or therewith.

      

      
        	
                Dated:  October
      6, 2009

              	
                AURORA
      OIL & GAS CORPORATION

              
	 
      	
                Debtor
      and Debtor-in-Possession

              

      

      

      
        	 
      	
                By:

              	
                /s/ Sanford R. Edlein

              
	 
      	 
      	
                Sanford
      R. Edlein,

              
	 
      	 
      	
                Chief
      Restructuring Officer

              

      

      

      
        	 
      	
                HUDSON
      PIPELINE & PROCESSING CO., LLC,

              
	 
      	
                Debtor
      and Debtor-in-Possession

              

      

      

      
        
          	 
      	
                  By:

                	
                  /s/  Sanford R.
      Edlein

                
	 
      	 
      	
                  Sanford
      R. Edlein,

                
	 
      	 
      	
                  Chief
      Restructuring Officer

                

        

      

      
        
           

        

        
          -61-

          
            

          

        

        
           

        

      

       

       

      
        

        
          
            
              
                
                  
                    
                      
                        	 
      	 
      	
                                Submitted
      by:

                              
	 	 	 
	 	 	      
                                 
      /s/ Stephen B.
  Grow

                              
	 	 	      
                                
                                     
      WARNER NORCROSS & JUDD LLP
 

                                

                                
                                   
       
      Stephen B. Grow (P39622)

                                

                                
                                   
       
      900 Fifth Third Center, 111 Lyon Street NW

                                

                                
                                   
       
      Grand Rapids, Michigan  49503

                                

                                
                                   
       
      Telephone:  (616) 752-2158

                                

                                
                                   
       
      Facsimile:  (616) 222-2158

                                

                                
                                   
       
      sgrow@wnj.com

                                

                                

                                               and

                                 

                                
                                   
      CAHILL
      GORDON & REINDEL llp

                                

                                

                                
                                   
       
      Joel H. Levitin

                                

                                
                                   
       
      Stephen J. Gordon

                                

                                
                                   
       
      Eighty Pine Street

                                

                                
                                   
       
      New York, New York  10005-1702

                                

                                
                                   
       
      Telephone:  (212) 701-3000

                                

                                
                                   
       
      Facsimile:  (212) 269-5420

                                

                                
                                   
      

                                     
      Attorneys for the Debtors and Debtors-in-

                                     
      Possession

                                  

                                

                              

                      

                    

                  

                

              

            

          

        

      

      
        
           

        

        
          -62-

          
            

          

        

        
           

        

      

    

     

    
      EXHIBIT
B

       

      PROJECTED
FINANCIAL INFORMATION FOR THE REORGANIZED DEBTORS

      
        
           

        

        
           

          
            

          

        

        
           

        

      

      Aurora
Oil & Gas Corporation

      General
Forecast Assumptions

      

      The
attached financial statements have been prepared from internal unaudited
information, including forward information using management estimates of future
events, and certain possible management actions. The forecast assumes the new
company emerging from bankruptcy protection on or around December 15,
2009.

      

      
        	
                1.

              	
                Oil
      and Gas Revenue

              

      

      Estimated
oil and gas production volumes have been provided using the June 30, 2009
Schlumberger Reserve Report's (“SRR”) currently
producing properties (PDP) as a baseline. The production forecast has been
adjusted to reflect management's updated view of future production which assumes
a 10% reduction from the SRR to reflect decreased actual production on operated
volumes and a 5% contingency reserve. Non-operated volumes have been reduced by
5%.

      

      Oil and
gas prices reflect September 28, 2009 exchange-traded forward pricing using
published Henry Hub and regional basis differential curves. Periods in the
forecast that occur beyond actively-traded exchange markets reflect best
estimate (using roll-forward of prior month or prior year forecasted
pricing).

      

      Revenues
reflect anticipated the forward sale of approximately 90,000 mcf per month at a
price of $6.25 from January 2010 through December 2011.

      

      There are
several projects considered in the SRR which are not currently PDP, but have
been included in the forecast as near-term production enhancements which include
assumed incremental production from the Antrim remediation efforts, Samson’s further
development of PDNP wells in its Alcona County project, and Atlas’s further
development of PDNP wells in the Wabash project area. Remediation volumes
reflect management’s estimate of the
expected improvement as a result of these efforts.

      

      
        	
                2.

              	
                Farmout
      Arrangements

              

      

      The
forecast reflects further development of the Wabash project area under the farm
out with Atlas Energy Indiana, LLC. The forecast assumes 9 wells drilled during
the fourth quarter of 2009, followed by eight wells from January through April
2010 to complete the first twenty wells. The second twenty wells are expected to
be drilled from May to October 2010, and additional twenty wells in each
12-month period thereafter. Royalty revenue for this production are expected to
commence in February 2010,

      

      Anticipated
revenue from Atlas has been estimated to reflect the lack of meaningful
production history in the Wabash area. The cumulative gross margin generated by
the Wabash project, operated by Atlas in five years, represents nearly 30% of
the gross margin for the restructured enterprise.

      
        
           

        

        
          1

          
            

          

        

        
           

        

      

      
        	
                3.

              	
                Pipeline
      Revenues and Expenses

              

      

      The
forecast reflects assumptions for Aurora’s anticipated 100%
ownership of Hudson Pipeline & Processing Co., LLC. (“HPPC”). The revenues
are based upon historical activity of the entity and are calculated based upon a
fixed rate per mcf of delivery. Expenses are calculated as a ratio of revenue,
also based upon historical activity.

      

      
        	
                4.

              	
                Other
      Revenue

              

      

      Other
Revenues includes certain payments expected from Atlas for purchase of the
Wabash tapsite, and interest income, including interest income from the
Presidium note receivable.

      

      
        	
                5.

              	
                Operational
      expenditures

              

      

      Production
taxes, LOE, post-production expenses (compression, transportation and treating)
and royalty fees have been calculated using the SRR’s operating costs
on currently producing properties (PDP) as a baseline. The mid-year reserve
report has been adjusted to account for the inflation impact on operational
expenses increasing at the 3% per year.

      

      
        	
                6.

              	
                Selling,
      General and Administration

              

      

      The
forecast includes estimated general and administrative expenses such as-
personnel, professional fees, office expenses, rent, utilities and insurance,
among others. SG&A expenses are estimated to increase at the rate of 3% per
annum.

      

      
        	
                7.

              	
                Restructuring
      fees

              

      

      In 2010,
there is a minor amount of fees related to the bankruptcy process which
continued from 2009.

      

      
        	
                8.

              	
                Depletion,
      depreciation and amortization

              

      

      The
forecast follows the current schedule of depletion and amortization for the oil
and gas properties. Depreciation expense includes depreciation principally
related to pipeline (HPPC) assets.

      

      
        	
                9.

              	
                Interest
      expense

              

      

      Interest
expense represents interest to be paid in cash for the Exit facility and Tranche
A as well as Payment in Kind (“PIK ”) interest accrued
on Tranche B debt. Rates are set forth elsewhere in the Disclosure
Statement.

      

      
        	
                10.

              	
                Cash.

              

      

      The
forecast assumes the company will utilize excess free cash generated during the
first two years to reduce Tranche A debt. For the next three years, the forecast
indicates the accumulation of free cash flows of approximately $15 million which
could be utilized to fund capital expenditures that would improve the gas volume
by bringing into production current undeveloped properties. The forecasted
balance sheet shows a constant value in short term investments representing
restricted cash held as collateral for various letters of
credit.

      
        
           

        

        
          2

          
            

          

        

        
           

        

      

      
        	
                11.

              	
                Accounts
      Receivable

              

      

      Accounts
receivable amounts are generated as a percentage of revenues based upon the
existing and expected receipts.

      

      
        	
                12.

              	
                Property,
      Plant & Equipment

              

      

      The value
of oil and gas properties, plant has been adjusted from the recent reserve
report (SRR) to reflect escalation in operating expenses, volume adjustments and
cap ex investments. Other property and plant equipment represents the current
book value of HPPC.

      

      
        	
                13.

              	
                Capital
      Expenditures

              

      

      Aurora's
operated capital expenditures are generally related to lease extensions or
properties which have been previously drilled or are now abandoned. The company
does not anticipate significant capital expenditures during the forecast period.
Remediation costs as noted above are embedded in the LOEs of the operating
properties.

       

      Aurora's
non-operated capital expenditures are generally related to ongoing activities by
its partners. These costs are generally minor, and may be related to new leases
or miscellaneous activities. Aurora may determine not to participate in certain
capital expenditures. Estimated cash outlays for lease extensions, as noted
above, and rentals have been made for mineral leases with expected value which
are not held by production or expected to be paid under farm out arrangements.
High potential leases are assumed to be extended. Mid-potential leases will be
extended until the month prior to a significant outlay of cash to be used for
extensions. Acres not identified as "high" or "mid" potential are generally
assumed to expire as expiration dates are reached.

      

      
        	
                14.

              	
                Other Non-developed
      Properties.

              

      

      This
forecast assumes no development of certain potential properties other than those
previously indicated.

      

      
        	
                15.

              	
                Presidium
      Promissory Note

              

      

      Aurora holds a
$11.8mm promissory note with payment due at maturity in September 2010 from
Presidium Energy, LC, which is primarily collateralized by acreage sold in
Oklahoma; the forecast assumes interest payments and realization of the
principal on the due date. Presidium is presently current on their obligations
under the note.

      

      
        	
                16.

              	
                Accounts
      Payable

              

      

      Forecasted
accounts payable are generated as a percentage of expenditures incurred and
follow previous performance and practice.

      
        
           

        

        
          3

          
            

          

        

        
           

        

      

      
        	
                17.

              	
                Asset
      Retirement Obligations (“ARO”)

              

      

      ARO
represents an ongoing liability reserve for future plugging and restoration
expenses. Additional expenses of approximately $10,000 per month are included in
operating expenses and corresponding increase in the reserve.

      

      
        	
                18.

              	
                Indebtedness

              

      

      The
forecast assumes that $2.5 million in exit facility funds are used. In addition,
it assumes Tranche A debt of $20 million, cash interest only, and Tranche B debt
of $20 million, PIK interest. The forecast assumes accruing interest on the
Tranche B. Proceeds from the Presidium note are assumed to be applied to reduce
Tranche A debt as well as excess cash generated during the first two years of
operations.

       

      The
forecast assumes that an extension of the current debt occurs in two years or
future debt is refinanced with similar terms and conditions. Furthermore, no
costs have been budgeted for refinance activities.

      

      
        	
                19.

              	
                Changes
      in Working Capital

              

      

      In 2010,
there is a minor amount of adjustments related to the bankruptcy process which
continued from 2009. Other than those changes, there is no further impact from
restructuring charges in working capital changes embedded in the
forecast.

      

      
        	
                20.

              	
                Preferred
      equity

              

      

      The
forecast shows an initial face value of $32 million for preferred stock. The
value of the stock is increased by a 6% PIK dividend. The actual value of the
stock does not necessarily reflect its actual valuation since it is presented
undiscounted.

      

      
        	
                21.

              	
                Common
      equity

              

      

      Initial
balance of the common equity is the resultant of reducing total assets less
liabilities and preferred equity but does not necessarily imply the actual
valuation.

      
        
           

        

        
          4

          
            

          

        

        
           

        

      

      
         

        Aurora
Oil & Gas Corporation / NewCo

        Forecasted
Balance Sheet

        

        
          
            
              	 
      	 	
                      
                        YE
      2009

                      

                    	 	 	
                      
                        YE
      2010

                      

                    	 	 	
                      
                        YE
      2011

                      

                    	 	 	
                      
                        YE
      2012

                      

                    	 	 	
                      
                        YE
      2013

                      

                    	 	 	
                      
                        YE
      2014

                      

                    	 
	
                      Assets

                    	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	
                      Current
      Assets

                    	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	
                      Cash

                    	 	$	1,018,611	 	 	$	506,173	 	 	$	1,186,984	 	 	$	3,379,753	 	 	$	8,748,163	 	 	$	14,963,501	 
	
                      ST
      Investments

                    	 	 	670,385	 	 	 	670,385	 	 	 	670,385	 	 	 	670,385	 	 	 	670,385	 	 	 	670,385	 
	
                      A/R

                    	 	 	1,559,863	 	 	 	2,231,858	 	 	 	2,249,256	 	 	 	2,378,813	 	 	 	2,297,710	 	 	 	2,266,136	 
	
                      Other

                    	 	 	-	 	 	 	-	 	 	 	-	 	 	 	-	 	 	 	-	 	 	 	-	 
	
                      Total
      Current

                    	 	 	3,248,859	 	 	 	3,408,416	 	 	 	4,106,625	 	 	 	6,428,951	 	 	 	11,716,258	 	 	 	17,900,022	 
	 
      	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	
                      PP&E

                    	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	
                      O&G
      Properties, net

                    	 	 	56,870,000	 	 	 	56,677,749	 	 	 	56,414,127	 	 	 	55,681,964	 	 	 	55,073,363	 	 	 	54,217,073	 
	
                      Other
      PP&E, net

                    	 	 	9,230,000	 	 	 	8,361,924	 	 	 	7,575,491	 	 	 	6,863,021	 	 	 	6,217,558	 	 	 	5,632,801	 
	
                      Total
      PP&E

                    	 	 	66,100,000	 	 	 	65,039,673	 	 	 	63,989,618	 	 	 	62,544,985	 	 	 	61,290,921	 	 	 	59,849,874	 
	 
      	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	
                      Other

                    	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	
                      Note
      Receivable

                    	 	 	11,800,000	 	 	 	-	 	 	 	-	 	 	 	-	 	 	 	-	 	 	 	-	 
	
                      Other

                    	 	 	-	 	 	 	-	 	 	 	-	 	 	 	-	 	 	 	-	 	 	 	-	 
	
                      Total
      Other

                    	 	 	11,800,000	 	 	 	-	 	 	 	-	 	 	 	-	 	 	 	-	 	 	 	-	 
	 
      	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	
                      Total
      Assets

                    	 	$	81,148,859	 	 	$	68,448,089	 	 	$	68,096,243	 	 	$	68,973,936	 	 	$	73,007,179	 	 	$	77,749,895	 
	 
      	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	
                      Liabilities
      and Equity

                    	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	
                      Current
      Liabilities

                    	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	
                      A/P

                    	 	 	1,372,467	 	 	 	1,044,477	 	 	 	1,048,197	 	 	 	1,008,204	 	 	 	985,394	 	 	 	976,281	 
	
                      Other
      Current Liabilities

                    	 	 	-	 	 	 	-	 	 	 	-	 	 	 	-	 	 	 	-	 	 	 	-	 
	
                      Total
      Current Liabilities

                    	 	 	1,372,467	 	 	 	1,044,477	 	 	 	1,048,197	 	 	 	1,008,204	 	 	 	985,394	 	 	 	976,281	 
	 
      	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	
                      Long
      Term Liabilities

                    	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	
                      ARO

                    	 	$	1,794,948	 	 	$	1,910,148	 	 	$	2,025,348	 	 	$	2,140,548	 	 	$	2,255,748	 	 	$	2,370,948	 
	
                      Post
      BK Tranche A

                    	 	 	20,000,000	 	 	 	8,450,000	 	 	 	4,950,000	 	 	 	950,000	 	 	 	-	 	 	 	-	 
	
                      Post
      BK Tranche B

                    	 	 	20,103,333	 	 	 	21,360,965	 	 	 	22,697,271	 	 	 	24,121,176	 	 	 	25,630,157	 	 	 	27,093,554	 
	
                      Exit
      Facility

                    	 	 	2,500,000	 	 	 	-	 	 	 	-	 	 	 	-	 	 	 	-	 	 	 	-	 
	
                      Total
      LT Liabilities

                    	 	 	44,398,281	 	 	 	31,721,113	 	 	 	29,672,619	 	 	 	27,211,724	 	 	 	27,885,905	 	 	 	29,464,502	 
	 
      	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	
                      Equity
      - Preferred

                    	 	 	32,000,000	 	 	 	33,963,634	 	 	 	36,047,763	 	 	 	38,259,781	 	 	 	40,607,538	 	 	 	43,099,360	 
	
                      Equity
      - Common

                    	 	 	3,378,111	 	 	 	1,718,866	 	 	 	1,327,664	 	 	 	2,494,227	 	 	 	3,528,342	 	 	 	4,209,753	 
	 
      	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	
                      Total
      Liabilities and Equity

                    	 	$	81,148,859	 	 	$	68,448,089	 	 	$	68,096,243	 	 	$	68,973,936	 	 	$	73,007,179	 	 	$	77,749,895	 

            

          

        

        
          
             

          

          
             

            
              

            

          

          
             

          

        

         

        
          Aurora
Oil & Gas Corporation / NewCo

          Forecasted
Income Statement

           

          
            
              
                	 
      	 	
                        
                          2010

                        

                      	 	 	
                        
                          2011

                        

                      	 	 	
                        
                          2012

                        

                      	 	 	
                        
                          2013

                        

                      	 	 	
                        
                          2014

                        

                      	 	 	
                        
                          CUM

                        

                      	 
	
                        Revenues

                      	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	
                        Oil
      and natural gas sales

                      	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	
                        Operated
      oil and natural gas sales

                      	 	$	5,623,734	 	 	$	5,898,042	 	 	$	7,557,742	 	 	$	7,368,714	 	 	$	7,041,452	 	 	$	33,489,685	 
	
                        Non-operated
      oil and natural gas sales

                      	 	 	6,989,116	 	 	 	7,233,605	 	 	 	6,595,890	 	 	 	6,008,533	 	 	 	5,665,641	 	 	 	32,492,785	 
	
                        Wabash-related
      oil and natural gas sales

                      	 	 	2,187,296	 	 	 	2,571,607	 	 	 	3,054,683	 	 	 	3,427,651	 	 	 	3,808,286	 	 	 	15,049,523	 
	
                        Total
      oil and natural gas sales

                      	 	 	14,800,146	 	 	 	15,703,255	 	 	 	17,208,316	 	 	 	16,804,898	 	 	 	16,515,379	 	 	 	81,031,993	 
	
                        Pipeline
      transportation and marketing

                      	 	 	3,301,628	 	 	 	2,958,081	 	 	 	2,746,853	 	 	 	2,596,674	 	 	 	2,480,177	 	 	 	14,083,414	 
	
                        Interest
      and other

                      	 	 	1,132,300	 	 	 	24,000	 	 	 	24,000	 	 	 	24,000	 	 	 	24,000	 	 	 	1,228,300	 
	
                        Total
      revenues

                      	 	 	19,234,074	 	 	 	18,685,336	 	 	 	19,979,169	 	 	 	19,425,572	 	 	 	19,019,556	 	 	 	96,343,707	 
	 
      	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	
                        Expenses

                      	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	
                        Production
      and lease operating expense and taxes

                      	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	
                        Operated
      production and lease operating expense and taxes

                      	 	 	(3,725,320	)	 	 	(4,029,051	)	 	 	(4,160,515	)	 	 	(3,970,703	)	 	 	(3,872,928	)	 	 	(19,758,518	)
	
                        Non-operated
      production and lease operating expense and taxes

                      	 	 	(3,585,707	)	 	 	(3,514,306	)	 	 	(3,247,777	)	 	 	(3,039,988	)	 	 	(2,961,735	)	 	 	(16,349,513	)
	
                        Wabash-related
      production and lease operating expense and taxes

                      	 	 	(510,342	)	 	 	(409,827	)	 	 	(361,320	)	 	 	(336,447	)	 	 	(323,002	)	 	 	(1,940,938	)
	
                        Total
      production and lease operating expense and taxes

                      	 	 	(7,821,370	)	 	 	(7,953,185	)	 	 	(7,769,612	)	 	 	(7,347,139	)	 	 	(7,157,664	)	 	 	(38,048,969	)
	
                        Pipeline
      and processing operating expense

                      	 	 	(2,089,638	)	 	 	(1,872,203	)	 	 	(1,738,515	)	 	 	(1,643,465	)	 	 	(1,569,732	)	 	 	(8,913,553	)
	
                        General
      and administrative expense

                      	 	 	(2,918,859	)	 	 	(2,957,199	)	 	 	(3,045,915	)	 	 	(3,137,293	)	 	 	(3,202,430	)	 	 	(15,261,696	)
	
                        Oil
      and natural gas depletion and amortization

                      	 	 	(1,820,982	)	 	 	(1,816,381	)	 	 	(1,794,790	)	 	 	(1,775,360	)	 	 	(1,750,863	)	 	 	(8,958,375	)
	
                        Other
      assets depreciation and amortization

                      	 	 	(846,903	)	 	 	(767,252	)	 	 	(695,093	)	 	 	(629,720	)	 	 	(570,495	)	 	 	(3,509,463	)
	
                        Interest
      expense

                      	 	 	(3,431,934	)	 	 	(1,626,188	)	 	 	(1,556,663	)	 	 	(1,510,725	)	 	 	(1,595,139	)	 	 	(9,720,648	)
	
                        Total
      expenses

                      	 	 	(18,929,685	)	 	 	(16,992,409	)	 	 	(16,600,587	)	 	 	(16,043,700	)	 	 	(15,846,323	)	 	 	(84,412,705	)
	 
      	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	
                        Net
      Income (Loss) before taxes

                      	 	$	304,389	 	 	$	1,692,927	 	 	$	3,378,581	 	 	$	3,381,872	 	 	$	3,173,233	 	 	$	11,931,002	 

              

            

          

          
            
               

            

            
               

              
                

              

            

            
               

            

          

        

         

        Aurora
Oil and Gas Corporation

        Forecasted
Statement of Free Cash Flows & EBITDA

         

        
          
            
              	 
      	 	
                      
                        2010

                      

                    	 	 	
                      
                        2011

                      

                    	 	 	
                      
                        2012

                      

                    	 	 	
                      
                        2013

                      

                    	 	 	
                      
                        2014

                      

                    	 	 	
                      
                        CUM

                      

                    	 
	 
      	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	
                      Net
      Income (loss) before taxes

                    	 	$	304,389	 	 	$	1,692,927	 	 	$	3,378,581	 	 	$	3,381,872	 	 	 	3,173,233	 	 	 	11,931,002	 
	
                      Add
      Depreciation and amortization

                    	 	 	2,667,885	 	 	 	2,583,634	 	 	 	2,489,882	 	 	 	2,405,080	 	 	 	2,321,358	 	 	 	12,467,838	 
	
                      Add
      PIK'd interest

                    	 	 	1,251,167	 	 	 	1,329,438	 	 	 	1,416,586	 	 	 	1,501,225	 	 	 	1,595,139	 	 	 	7,093,554	 
	
                      Less
      Capital expenditures

                    	 	 	(1,486,172	)	 	 	(1,439,537	)	 	 	(952,917	)	 	 	(1,056,123	)	 	 	(785,795	)	 	 	(5,720,545	)
	
                      Changes
      in working capital

                    	 	 	(999,985	)	 	 	(13,678	)	 	 	(169,550	)	 	 	58,293	 	 	 	22,461	 	 	 	(1,102,459	)
	
                      Add
      impact of net borrowings/paydown

                    	 	 	(14,050,000	)	 	 	(3,500,000	)	 	 	(4,000,000	)	 	 	(950,000	)	 	 	-	 	 	 	(22,500,000	)
	
                      Add
      recovery of note

                    	 	 	11,800,000	 	 	 	-	 	 	 	-	 	 	 	-	 	 	 	-	 	 	 	11,800,000	 
	
                      Free
      Cash Flow

                    	 	 	(512,717	)	 	 	652,783	 	 	 	2,162,582	 	 	 	5,340,346	 	 	 	6,326,396	 	 	 	13,969,390	 
	 
      	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	
                      EBITDA

                    	 	 	6,404,207	 	 	 	5,902,749	 	 	 	7,425,127	 	 	 	7,297,676	 	 	 	7,089,729	 	 	 	34,119,488	 

            

          

        

        
          
             

          

          
             

            
              

            

          

          
             

          

        

      

       

      EXHIBIT
C

       

      HYPOTHETICAL
LIQUIDATION ANALYSIS

      
        
           

        

        
           

          
            

          

        

        
           

        

      

      Aurora
Oil & Gas Corporation

      

      Liquidation
Analysis

      

      
        
          
            	
                    Contents

                  	 
	 
      	 
	
                    AOG
      statement of assets and estimated net proceeds for
      distribution

                  	 
	 
      	 
	
                    HPPC
      statement of assets and estimated net proceeds for
      distribution

                  	 
	 
      	 
	
                    Estimated
      claims

                  	 
	 
      	 
	
                    Distribution
      of estimated available funds

                  	 

          

        

      

      

      September
16, 2009

      
        
           

        

        
           

          
            

          

        

        
           

        

      

    

    

      Aurora
Oil and Gas Corporation (AOG)

      Liquidation
Analysis

      Statement
of assets and estimated net proceeds for distribution

      Amounts
in ($000's)

      

      
        
          
            
              
                
                  
                    
                      
                        
                          	 
      	 	
                                  Notes

                                	 	 	
                                  Book Value as of

                                  07/31/09

                                	 	 	
                                  Hypothetical

                                  recovery %

                                	 	 	
                                  Estimated liquidation

                                  value

                                	 
	 
      	 	 	 	 	 	 	 	
                                  Low

                                	 	 	
                                  High

                                	 	 	
                                  Low

                                	 	 	
                                  High

                                	 
	
                                  Assets

                                	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	
                                  Current
      Assets

                                	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	
                                  Cash
      and cash equivalents

                                	 	
                                  A

                                	 	 	 	1,315	 	 	 	100	%	 	 	100	%	 	 	1,315	 	 	 	1,315	 
	
                                  Short-term
      investments

                                	 	
                                  B

                                	 	 	 	659	 	 	 	0	%	 	 	0	%	 	 	0	 	 	 	0	 
	
                                  Accounts
      receivable

                                	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	
                                  Oil
      and natural gas sales

                                	 	
                                  C

                                	 	 	 	1,312	 	 	 	74	%	 	 	74	%	 	 	970	 	 	 	970	 
	
                                  Joint
      interest owners

                                	 	
                                  D

                                	 	 	 	385	 	 	 	80	%	 	 	85	%	 	 	308	 	 	 	327	 
	
                                  Intercompany

                                	 	
                                  E

                                	 	 	 	591	 	 	 	0	%	 	 	0	%	 	 	0	 	 	 	0	 
	
                                  Notes
      receivable

                                	 	
                                  F

                                	 	 	 	132	 	 	 	0	%	 	 	46	%	 	 	0	 	 	 	61	 
	
                                  Materials
      inventory

                                	 	
                                  G

                                	 	 	 	609	 	 	 	15	%	 	 	30	%	 	 	91	 	 	 	183	 
	
                                  Prepaid
      expenses and other current assets

                                	 	
                                  H

                                	 	 	 	1,545	 	 	 	60	%	 	 	75	%	 	 	927	 	 	 	1,159	 
	
                                  Total
      current assets

                                	 	 	 	 	 	6,548	 	 	 	 	 	 	 	 	 	 	 	3,611	 	 	 	4,014	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	
                                  Property
      and Equipment (net of depreciation)

                                	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	
                                  Land

                                	 	
                                  I

                                	 	 	 	264	 	 	 	65	%	 	 	75	%	 	 	172	 	 	 	198	 
	
                                  Oil
      and gas property gas properties

                                	 	
                                  J

                                	 	 	 	64,956	 	 	 	38	%	 	 	62	%	 	 	24,389	 	 	 	39,977	 
	
                                  Other
      property and equipment

                                	 	
                                  K

                                	 	 	 	3,341	 	 	 	55	%	 	 	65	%	 	 	1,838	 	 	 	2,172	 
	
                                  Total
      property and equipment

                                	 	 	 	 	 	68,561	 	 	 	 	 	 	 	 	 	 	 	26,399	 	 	 	42,347	 
	 
      	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	
                                  Other
      Assets

                                	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	
                                  Note
      receivable

                                	 	
                                  L

                                	 	 	 	11,830	 	 	 	10	%	 	 	25	%	 	 	1,183	 	 	 	2,958	 
	
                                  Debt
      issuance costs

                                	 	 	 	 	 	927	 	 	 	0	%	 	 	0	%	 	 	0	 	 	 	0	 
	
                                  Other

                                	 	
                                  M

                                	 	 	 	8,631	 	 	 	0	%	 	 	0	%	 	 	0	 	 	 	0	 
	 
      	 	 	 	 	 	21,388	 	 	 	 	 	 	 	 	 	 	 	1,183	 	 	 	2,958	 
	
                                  Gross
      estimated proceeds available for distribution

                                	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	31,193	 	 	 	49,319	 
	 
      	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	
                                  Estimated
      costs associated with liquidation

                                	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 
      	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	
                                  Commissions,
      professional and trustee fees for asset disposition except cash and cash
      equivalents

                                	 	 	 	 	 	 	 	 	 	10	%	 	 	10	%	 	 	2,988	 	 	 	4,800	 
	
                                  Total
      estimated cost

                                	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	2,988	 	 	 	4,800	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	
                                  Net
      estimated available proceeds for distribution

                                	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	28,205	 	 	 	44,518	 

                        

                      

                    

                  

                

              

            

          

        

      

       

      
        
           

        

        
           

          
            

          

        

        
           

        

      

      

      
        
          
            
              
                
                  
                    
                      
                        
                          
                            
                              
                                
                                  
                                    
                                      
                                        
                                          
                                            
                                              
                                                
                                                  
                                                    
                                                      	
                                                              Notes

                                                            	 
	 
      	
                                                              A

                                                            	
                                                              Actual
      balance shown as of 8/28/09. Balance as of 7/31/09 excluding restricted
      funds was $2,335k.

                                                            	 
	 
      	
                                                              B

                                                            	
                                                              $159k
      cash and $500k receivable pledged to NW Bank supporting letters of credit
      issued by NW Bank.

                                                            	 
	 
      	
                                                              C

                                                            	
                                                              Some
      of the non-operators may eventually setoff against certain payables.
      Pre-petition non-operators outstanding obligations are approximately
      $342k. Recovery estimated based on potential offset an a 10% contingency
      added to remaining amount.

                                                            	 
	 
      	
                                                              D

                                                            	
                                                              This
      account include multiple of individuals and corporations. Unbilled
      receivables as of 7/31/09 were approximately $235k of which $144k was to
      Presidium. Over 90 days is approximately $80k. It is assumed for the low
      valuation that all accounts under 90 days could be
    collected.

                                                            	 
	 
      	
                                                              E

                                                            	
                                                              Intercompany
      accounts are as follows: $175k with Aurora Operating LLC; $29k with
      Indiana Royalty Trustory; $Pre-petition intercompany account with HPPC is
      $59k. This amount has been included as an unsecured claim.

                                                            	 
	 
      	
                                                              F

                                                            	
                                                              Intercompany
      note receivable from Indiana Royalty Trustory ("IRT"). IRT has $122k in a
      bank account and it is 50% owned by AOG. The upper limit assumes that 50%
      of the cash on the bank account is utilized to partially pay the
      outstanding amount.

                                                            	 
	 
      	
                                                              G

                                                            	
                                                              Mostly
      scrap. Assigned a very low recovery value based upon recent effort to
      liquidate such inventory.

                                                            	 
	 
      	
                                                              H

                                                            	
                                                              This
      account includes prepaid insurance, prepaid property taxes, prepaid fees
      and prepaid retainers. As of 7/31/09 there was $608k of prepaid
      retainers.

                                                            	 
	 
      	
                                                              I

                                                            	
                                                              Land
      owned by the Company and developed by non-operators. Appraisals for the
      properties and purchase price for South Knox is approximately
      $187k

                                                            	 
	 
      	
                                                              J

                                                            	
                                                              Per
      latest reserve report, as of 6/30/09 PV10 of all properties is:
      

                                                              a)
      SEC Case valuation

                                                            	
                                                              18,773

                                                            
	 
      	 
      	
                                                              b)
      NYMEX Valuation

                                                            	
                                                              114,290

                                                            
	 	 	 	 
	 
      	 
      	
                                                              In
      order to have what it believes to be a more accurate net present value of
      future cash flows, the Company has incorporated, for this analysis, the
      following assumptions: reduced production output by 10% for operated
      properties and 5% for non-operated properties based on actual performance;
      included 3% of annual escalation costs to reflect the fact that costs
      increase on a yearly basis; allocated capital expenditures based upon
      preliminary optimistic projected free cash flows generated by Aurora over
      the next five years; and included the following valuations: PDP at 100%,
      behind pipe at 100%, PDNP at 30% and Undeveloped at 0% based on
      willingness of potential buyers to assign value per category. With these
      assumptions, the Company generated a high and a low scenario based upon
      different discount rates. 

                                                            	 
	 	 	 	 
	 
      	 
      	
                                                              a) the
      estimated net present value of future cash flows based on the above
      referenced assumptions discounted at 10% results in PV-10
      of:

                                                            	
                                                              39,977

                                                            
	 	 	 	 
	 
      	 
      	
                                                              b) the
      estimated net present value of future cash flows based on the above
      referenced assumptions discounted at 20% results in PV-20
      of:

                                                            	
                                                              24,389

                                                            
	 
      	 
      	 
      	 
	 
      	
                                                              K

                                                            	
                                                              Includes
      office facility and furniture in Traverse City. No offers have been
      received for the property, however from a verbal conversation, a local
      broker indicated that the property would have a value of approximately
      $2M.

                                                            	 
	 	 	 	 
	 
      	
                                                              L

                                                            	
                                                              The
      Presidium note is collateralized with certain properties in Oklahoma. It
      appears that Presidim has drilled approximately six wells and one is
      producing and another is about to start production. AOG just received the
      data of one that is producing. These are oil wells.

                                                            	 
	 	 	 	 
	 
      	
                                                              M

                                                            	
                                                              On
      a consolidated basis, the eliminating entry for this category is a
      negative $8,118.5 leaving a net of $513k representing miscellaneous assets
      including a note with no recoverable value.

                                                            	 

                                                    

                                                  

                                                

                                              

                                            

                                          

                                        

                                      

                                    

                                  

                                

                              

                            

                          

                        

                      

                    

                  

                

              

            

          

        

      

      
        
           

        

        
           

          
            

          

        

        
           

        

      

      Hudson
Pipeline and Processing (HPPC)

      Liquidation
Analysis

      Statement
of assets and estimated net proceeds for distribution

      Amounts
in ($000's)

      

      
        
          
            
              
                
                  
                    
                      
                        
                          
                            
                              
                                
                                  
                                    
                                      
                                        
                                          
                                            
                                              
                                                
                                                  
                                                    
                                                      
                                                        
                                                          
                                                            
                                                              
                                                                
                                                                  
                                                                    
                                                                      
                                                                        	 
      	 	 	 	 	
                                                                                Book
      Value as of

                                                                              	 	 	
                                                                                Hypothetical

                                                                              	 	 	
                                                                                Estimated
      liquidation

                                                                              	 
	 
      	 	
                                                                                
                                                                                  Notes

                                                                                

                                                                              	 	 	
                                                                                07/30/09

                                                                              	 	 	
                                                                                recovery
      %

                                                                              	 	 	
                                                                                value

                                                                              	 
	 
      	 	 	 	 	 	 	 	
                                                                                Low

                                                                              	 	 	
                                                                                High

                                                                              	 	 	
                                                                                Low

                                                                              	 	 	
                                                                                High

                                                                              	 
	
                                                                                Assets

                                                                              	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	
                                                                                Current
      Assets

                                                                              	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	
                                                                                Cash
      and cash equivalents

                                                                              	 	
                                                                                A

                                                                              	 	 	 	2,097	 	 	 	100	%	 	 	100	%	 	 	2,097	 	 	 	2,097	 
	
                                                                                Accounts
      receivable

                                                                              	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	0	 	 	 	0	 
	
                                                                                Joint
      interest owners

                                                                              	 	
                                                                                B

                                                                              	 	 	 	418	 	 	 	75	%	 	 	75	%	 	 	311	 	 	 	311	 
	
                                                                                Prepaid
      expenses and other current assets

                                                                              	 	 	 	 	 	73	 	 	 	60	%	 	 	75	%	 	 	44	 	 	 	55	 
	
                                                                                Total
      current assets

                                                                              	 	 	 	 	 	2,588	 	 	 	 	 	 	 	 	 	 	 	2,452	 	 	 	2,463	 
	 
      	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	
                                                                                Property
      and Equipment (net of depreciation)

                                                                              	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	
                                                                                Other
      property and equipment

                                                                              	 	
                                                                                C

                                                                              	 	 	 	8,981	 	 	 	49	%	 	 	61	%	 	 	4,400	 	 	 	5,500	 
	
                                                                                Total
      property and equipment

                                                                              	 	 	 	 	 	8,981	 	 	 	 	 	 	 	 	 	 	 	4,400	 	 	 	5,500	 
	 
      	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	
                                                                                Gross
      estimated proceeds available for distribution

                                                                              	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	6,852	 	 	 	7,963	 
	 
      	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	
                                                                                Estimated
      costs associated with liquidation

                                                                              	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 
      	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	
                                                                                Commissions,
      professional and trustee fees for asset disposition except cash and cash
      equivalents

                                                                              	 	 	 	 	 	 	 	 	 	10	%	 	 	10	%	 	 	476	 	 	 	587	 
	
                                                                                Total
      estimated cost

                                                                              	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	476	 	 	 	587	 
	 
      	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	
                                                                                Net
      estimated available proceeds for distribution

                                                                              	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	6,376	 	 	 	7,376	 

                                                                      

                                                                    

                                                                  

                                                                

                                                              

                                                            

                                                          

                                                        

                                                      

                                                    

                                                  

                                                

                                              

                                            

                                          

                                        

                                      

                                    

                                  

                                

                              

                            

                          

                        

                      

                    

                  

                

              

            

          

        

      

      

      
        
          
            	
                    Notes

                  	 
      
	 
      	
                    A

                  	
                    Actual
      balance shown as of 8/28/09.

                  
	 
      	
                    B

                  	
                    The
      account includes $311k for Integrys and $107k for Barry Riske, a member
      that has not contributed to capital calls and has not received any
      distributions.

                  
	 
      	
                    C

                  	
                    HPPC
      operating facilities. Assumes valuation at 4X and 5X
  EBITDA

                  

          

        

      

       

      
        
           

        

        
           

          
            

          

        

        
           

        

      

      Aurora
Oil and Gas Corporation and HPPC

      Liquidation
Analysis

      Estimated
Claims

      Amounts
in $000's as of 7/31/09

      

      
        
          
            
              
                
                  
                    
                      
                        
                          
                            
                              
                                
                                  
                                    
                                      	
                                              Claim

                                            	 	
                                              Notes

                                            	 	 	
                                              AOG

                                            	 	 	
                                              HPPC

                                            	 	 	
                                              Total

                                            	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	
                                              First
      lien holders

                                            	 	
                                              A

                                            	 	 	 	73,104	 	 	 	73,104	 	 	 	73,104	 
	
                                              Second
      lien holders

                                            	 	
                                              A

                                            	 	 	 	56,489	 	 	 	56,489	 	 	 	56,489	 
	
                                              NW
      Bank Note

                                            	 	
                                              B

                                            	 	 	 	2,569	 	 	 	0	 	 	 	2,569	 
	
                                              Tax
      claims

                                            	 	
                                              C

                                            	 	 	 	234	 	 	 	18	 	 	 	252	 
	
                                              Administrative
      claims

                                            	 	
                                              D

                                            	 	 	 	1,152	 	 	 	81	 	 	 	1,233	 
	
                                              General
      Unsecured claims

                                            	 	 	 	 	 	4,107	 	 	 	148	 	 	 	4,255	 
	
                                              Total

                                            	 	 	 	 	 	137,655	 	 	 	129,840	 	 	 	137,902	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	
                                              General
      Unsecured claims breakdown

                                            	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	
                                              Operating
      leases (future rejection claims)

                                            	 	
                                              E

                                            	 	 	 	1,000	 	 	 	 	 	 	 	1,000	 
	
                                              A/P
      Trade (LOE's subject to offset)

                                            	 	
                                              F

                                            	 	 	 	387	 	 	 	 	 	 	 	387	 
	
                                              A/P
      Trade

                                            	 	
                                              G

                                            	 	 	 	242	 	 	 	89	 	 	 	331	 
	
                                              Change
      of control payments to certain employees

                                            	 	 	 	 	 	1,229	 	 	 	 	 	 	 	1,229	 
	
                                              Royalties
      and others

                                            	 	
                                              H

                                            	 	 	 	149	 	 	 	59	 	 	 	208	 
	
                                              Frontier
      law suit

                                            	 	
                                              I

                                            	 	 	 	1,100	 	 	 	 	 	 	 	1,100	 
	 
      	 	 	 	 	 	4,107	 	 	 	148	 	 	 	4,255	 

                                    

                                  

                                

                              

                            

                          

                        

                      

                    

                  

                

              

            

          

        

      

      

      
        
          
            	
                    Notes:

                  	 
      	 
      
	 
      	
                    A

                  	
                    HPPC
      balance sheet does not reflect any debt with first or second lien holders
      but each of the loans are guaranteed by HPPC. (No security interest on
      HPPC assets.)

                  
	 
      	
                    B

                  	
                    NW
      Bank has a claim of $2,569k. The secured claim is collateralized by the
      real estate proceeds thus the variance between the claim and net proceeds,
      becomes a general unsecured claim.

                  
	 
      	
                    C

                  	
                    As
      of September 4, 2009 for property taxes related to operations and real
      estate.

                  
	 
      	
                    D

                  	
                    For
      AOG, $650K based on carve-out and remaining amount consists of
      post-petition payables as of  September 4, 2009. For HPPC, amount
      represents post-petition obligations.

                  
	 
      	
                    E

                  	
                    It
      is expected that AOG will reject the operating leases and will renegotiate
      agreements for a certain number of compressors but not for all of the
      existing equipment, thus generating rejection claims.

                  
	 
      	
                    F

                  	
                    Includes
      accounts payable to non-operators who have a payable to AOG. Eventually
      they may offset their receivables with payables to AOG.

                  
	 
      	
                    G

                  	
                    As
      of August 28, 2009.

                  
	 
      	
                    H

                  	
                    For
      AOG, royalties estimated for two months worth of payments. For HPPC, it is
      the intercompany claim from AOG.

                  
	 
      	
                    I

                  	
                    Nominal
      asserted amount of
claim.

                  

          

        

      

      

      AOG
Estimated Claims

      After
AOG distribution

      

      
        
          
            
              
                
                  	
                          General Unsecured Claims

                        	 	
                          Low

                        	 	 	
                          High

                        	 
	 	 	 	 	 	 	 	 	 
	
                          First
      lien holders

                        	 	 	47,939	 	 	 	31,927	 
	
                          Second
      lien holders

                        	 	 	56,489	 	 	 	56,489	 
	
                          NW
      Bank Note

                        	 	 	915	 	 	 	614	 
	
                          Operating
      leases (future rejection claims)

                        	 	 	1,000	 	 	 	1,000	 
	
                          A/P
      Trade (LOE's subject to offset)

                        	 	 	387	 	 	 	387	 
	
                          A/P
      Trade

                        	 	 	242	 	 	 	242	 
	
                          Change
      of control payments to certain employees

                        	 	 	1,229	 	 	 	1,229	 
	
                          Royalties
      and others

                        	 	 	149	 	 	 	149	 
	
                          Frontier
      law suit

                        	 	 	1,100	 	 	 	1,100	 
	
                          Total

                        	 	 	109,450	 	 	 	93,137	 

                

              

            

          

        

      

      
        
           

        

        
           

          
            

          

        

        
           

        

      

       

      
        Aurora
Oil and Gas Corporation & HPPC

        Liquidation
Analysis

        Distribution
of estimated available funds

        Amounts
in ($000's)

        

        
          
            
              
                
                  
                    
                      
                        
                          
                            
                              
                                
                                  
                                    
                                      
                                        
                                          
                                            
                                              
                                                
                                                  
                                                    
                                                      
                                                        
                                                          
                                                            
                                                              
                                                                
                                                                  
                                                                    
                                                                      	 	 	 	 	 	
                                                                              AOG

                                                                            	 	HPPC	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 
      	 	
                                                                              Estimated
      Claims

                                                                            	 	 	
                                                                              AOG
      Distribution

                                                                              from
      Encumbered

                                                                              Assets

                                                                            	 	 	
                                                                              Unencumbered

                                                                              AOG
      Assets

                                                                              Distribution

                                                                            	 	 	
                                                                              AOG
      Percentage

                                                                              Recovery

                                                                            	 	 	
                                                                              HPPC
      Distribution

                                                                            	 	 	
                                                                              HPPC
      percentage

                                                                              recovery

                                                                            	 
	 
      	 	
                                                                              AOG

                                                                            	 	 	
                                                                              HPPC

                                                                            	 	 	
                                                                              Total

                                                                            	 	 	
                                                                              Low

                                                                            	 	 	
                                                                              High

                                                                            	 	 	
                                                                              Low

                                                                            	 	 	
                                                                              High

                                                                            	 	 	
                                                                              Low

                                                                            	 	 	
                                                                              High

                                                                            	 	 	
                                                                              Low

                                                                            	 	 	
                                                                              High

                                                                            	 	 	
                                                                              Low

                                                                            	 	 	
                                                                              High

                                                                            	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	
                                                                              Estimated
      funds available for distribution

                                                                            	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	
                                                                              Net
      available for distribution

                                                                            	 	 	 	 	 	 	 	 	 	 	 	 	 	 	28,205	 	 	 	
                                                                              44,518

                                                                            	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
                                                                              6,376

                                                                            	 	 	 	
                                                                              7,376

                                                                            	 	 	 	 	 	 	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	
                                                                              Distribution

                                                                            	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	
                                                                              First
      lien holders

                                                                            	 	 	73,104	 	 	 	73,104	 	 	 	73,104	 	 	 	25,165	 	 	 	41,178	 	 	 	0	 	 	 	0	 	 	 	34	%	 	 	56	%	 	 	6,272	 	 	 	7,270	 	 	 	9	%	 	 	10	%
	
                                                                              Second
      lien holders

                                                                            	 	 	56,489	 	 	 	56,489	 	 	 	56,489	 	 	 	0	 	 	 	0	 	 	 	0	 	 	 	0	 	 	 	0	%	 	 	0	%	 	 	0	 	 	 	0	 	 	 	0	%	 	 	0	%
	
                                                                              NW
      Bank Note

                                                                            	 	 	2,569	 	 	 	0	 	 	 	2,569	 	 	 	1,654	 	 	 	1,955	 	 	 	0	 	 	 	0	 	 	 	64	%	 	 	76	%	 	 	0	 	 	 	0	 	 	 	0	%	 	 	0	%
	
                                                                              Tax
      claims

                                                                            	 	 	234	 	 	 	18	 	 	 	252	 	 	 	234	 	 	 	234	 	 	 	0	 	 	 	0	 	 	 	100	%	 	 	100	%	 	 	18	 	 	 	18	 	 	 	100	%	 	 	100	%
	
                                                                              Administrative
      claims

                                                                            	 	 	1,152	 	 	 	81	 	 	 	1,233	 	 	 	1,152	 	 	 	1,152	 	 	 	0	 	 	 	0	 	 	 	100	%	 	 	100	%	 	 	81	 	 	 	81	 	 	 	100	%	 	 	100	%
	
                                                                              General
      unsecured claims

                                                                            	 	 	4,107	 	 	 	148	 	 	 	4,255	 	 	 	0	 	 	 	0	 	 	 	0	 	 	 	0	 	 	 	0	%	 	 	0	%	 	 	5	 	 	 	7	 	 	 	4	%	 	 	5	%
	
                                                                              Total
      distribution

                                                                            	 	 	137,655	 	 	 	129,840	 	 	 	137,902	 	 	 	28,205	 	 	 	44,518	 	 	 	0	 	 	 	0	 	 	 	20	%	 	 	32	%	 	 	6,376	 	 	 	7,376	 	 	 	5	%	 	 	6	%

                                                                    

                                                                  

                                                                

                                                              

                                                            

                                                          

                                                        

                                                      

                                                    

                                                  

                                                

                                              

                                            

                                          

                                        

                                      

                                    

                                  

                                

                              

                            

                          

                        

                      

                    

                  

                

              

            

          

        

      

       

      
        
          	
                  Notes:

                	
                  Based
      on intercreditor agreement between first lien and second lien holders, all
      potential distributions on account of first and second lien loans will be
      provided to the first lien holders until the full amount of their claims
      are satisfied.

                

        

        Distribution
to NW Bank is calculated of estimated net proceeds of a sale of the
headquarters.

      

       

      
        
           

        

        
           

          
            

          

        

        
           

        

      

      EXHIBIT
D

      

      LIST
OF KNOWN EXECUTORY CONTRACTS AND/OR

      UNEXPIRED
LEASES ANTICIPATED TO BE ASSUMED UNDER

      THE
PLAN AND THE PROPOSED CURE AMOUNTS THEREFOR

      

      The
following schedule sets forth the schedule of known Executory Contracts
anticipated to be assumed under the Plan, subject to the Debtors' right to
determine subsequently to reject such Executory Contracts, effective upon the
Effective Date, and the proposed cure amounts therefor (within the meaning of
Bankruptcy Code § 365).

      

              AGREEMENT                                            CURE AMOUNT (IF
ANY)

      
        
           

        

        
           

          
            

          

        

        
           

        

      

      [EXHIBIT
E

      

      LIST
OF KNOWN EXECUTORY CONTRACTS AND/OR

      UNEXPIRED
LEASES ANTICIPATED TO BE REJECTED UNDER THE PLAN

      

      The
following schedule sets forth the Executory Contracts anticipated to be rejected
under the Plan, effective as of the Effective Date.

       

      AGREEMENT]

      
        
           

        

        
           

          
            

          

        

        
           

        

      

      
        
          
            
              
                	 
      
	
                        If
      you have any questions, please call (212) 771-1128 or visit

                        http://www.donlinrecano.com/
      aurora.EXHIBIT 10.31

       

    

    UNITED
STATES BANKRUPTCY COURT

    FOR
THE WESTERN DISTRICT OF MICHIGAN

    

    
      
        
          	
                  In
      re:

                	
                  )

                	 
      
	 
      	
                  )

                	
                  Chapter
      11

                
	
                  AURORA
      OIL & GAS CORPORATION,

                	
                  )

                	 
      
	 
      	
                  )

                	
                  Bankruptcy
      Case No.: 09-08254 (SWD)

                
	
                  Debtor.       
      

                	
                  )

                	 
      
	 
      	
                  )

                	 
      
	 
      	
                  )

                	 
      
	
                  In
      re:

                	
                  )

                	
                  Chapter
      11

                
	 
      	
                  )

                	 
      
	
                  HUDSON
      PIPELINE& PROCESSING

                	
                  )

                	
                  Bankruptcy
      Case No.: 09-08255 (SWD)

                
	
                  CO.,
      LLC,

                	
                  )

                	 
      
	 
      	
                  )

                	 
      
	
                  Debtor.       
      

                	
                  )

                	 
      
	 
      	
                  )

                	 
      

        

      

    

    

    JOINT
PLAN OF REORGANIZATION OF DEBTORS AURORA OIL &

    GAS CORPORATION AND HUDSON
PIPELINE & PROCESSING CO., LLC

     

    
      
        
          
            	 
      	
                    Submitted
      by:

                  
	 
      	 
      
	 
      	
                    WARNER
      NORCROSS & JUDD LLP

                  
	 
      	
                    Stephen
      B. Grow (P39622)

                  
	 
      	
                    900
      Fifth Third Center, 111 Lyon Street NW

                  
	 
      	
                    Grand
      Rapids, Michigan 49503

                  
	 
      	
                    Telephone:  (616)
      752-2158

                  
	 
      	
                    Facsimile:  (616)
      222-2158

                  
	 
      	
                    sgrow@wnj.com

                  
	 
      	 
      
	 
      	
                    -and-

                  
	 
      	 
      
	 
      	
                    CAHILL
      GORDON & REINDEL llp

                  
	 
      	
                    Joel
      H. Levitin

                  
	 
      	
                    Stephen
      J. Gordon

                  
	 
      	
                    Eighty
      Pine Street

                  
	 
      	
                    New
      York, New York 10005-1702

                  
	 
      	
                    Telephone:  (212)
      701-3000

                  
	 
      	
                    Facsimile:  (212)
      269-5420

                  
	 
      	 
      
	 
      	
                    Attorneys
      for the Debtors and
Debtors-in-Possession

                  

          

        

      

    

    

    Dated:  October
6, 2009

    
      
         

      

      
         

        
          

        

      

      
         

      

    

      Aurora
Oil & Gas Corporation and Hudson Pipeline & Processing Co., LLC, the
above-captioned debtors and debtors-in-possession propose the following joint
plan of reorganization pursuant to Chapter 11 of the Bankruptcy
Code.

     

    
      ARTICLE
I

    

     

    
      DEFINITIONS

    

     

      The
following terms used in the Plan shall have the meanings specified below, and
such meanings shall be equally applicable to both the singular and plural forms
of such terms, unless the context otherwise requires.  Any terms
defined in the Disclosure Statement and not otherwise defined herein shall have
the meanings set forth in the Disclosure Statement when used
herein.  Any term used in the Plan, whether or not capitalized, that
is not defined in the Plan or in the Disclosure Statement, but that is defined
in the Bankruptcy Code, the Bankruptcy Rules, or the Local Bankruptcy Rules,
shall have the meaning set forth in the Bankruptcy Code, the Bankruptcy Rules,
or the Local Bankruptcy Rules.

     

    1.1.           Administrative
Agents:  Collectively, the First Lien Loan Administrative
Agent, the Second Lien Loan Administrative Agent, and the DIP Facility
Administrative Agent.

     

    1.2.           Administrative
Claims:  The collective reference to all Claims for costs and
expenses of administration of these Cases with priority under Bankruptcy Code §
507(a)(2), costs and expenses allowed under Bankruptcy Code § 503(b), the
actual and necessary costs and expenses of preserving the respective Estates of
the Debtors and operating the respective businesses of the Debtors, any
indebtedness or obligations incurred or assumed by either of the Debtors
pursuant to Bankruptcy Code § 364 or otherwise, professional fees and expenses
of the Debtors and the Creditors Committee, in each case to the extent allowed
by an order of the Bankruptcy Court under Bankruptcy Code § 330(a) or § 331, and
any fees or charges assessed against the respective Estates under 28 U.S.C. §
1930; provided,
however, that
the Holder of an Administrative Claim (except for an Administrative Claim based
upon Professional Fees, the allowance and timing for filing of applications for
Professional Fees being governed by Plan Section 13.7) arising prior to the
Effective Date (other than for goods or non-professional services provided to
the Debtors during these Cases in the ordinary course of their business) must
file a request for payment on or before 30 days after the Effective Date for
such Administrative Claim to be eligible to be considered an Allowed
Claim.

     

    1.3.           Affiliate:  This
term shall have the meaning assigned to it in Bankruptcy Code § 101(2);
provided, however, that where
the context so requires, the term “debtor” in such section shall mean that
entity to which the defined term “Affiliate” refers.

     

    1.4.           Allowance
Date:  With reference to a particular Claim, the date on which
such Claim becomes an Allowed Claim; provided, however, that, if a
Claim becomes an Allowed Claim pursuant to an order of the Bankruptcy Court, the
Allowance Date shall be the date on which such order becomes a Final Order, and
if a Claim becomes an Allowed Claim pursuant to the Plan, the Allowance Date
shall be deemed the Effective Date.

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    1.5.           Allowed:  Such word
shall mean, with reference to a Claim:  except as otherwise provided
in the Plan (a) any Claim against a Debtor that has been listed by such Debtor
in the Schedules filed by such Debtor as liquidated in an amount greater than
zero dollars and not disputed or contingent and for which no contrary Proof of
Claim has been filed and as to which no timely objection has been interposed;
(b) any Claim as to which a Proof of Claim has been timely filed and (i) no
objection to the allowance thereof has been timely interposed on or before the
Claims Objection Bar Date, and (ii) such Claim has not (as applicable) been
withdrawn, paid in full (pursuant to a prior order of the Bankruptcy Court or
otherwise), or otherwise deemed satisfied in full; (c) any Claim as to which any
objection thereto has been determined by a Final Order in favor of the
respective Claim, or any such objection has been settled, waived through
payment, or withdrawn; (d) any Claim that has otherwise been allowed by a Final
Order (including, without limitation, the DIP Facility Order, with respect to
DIP Facility Claims); (e) any Claim as to which, upon the lifting of the
automatic stay pursuant to Bankruptcy Code § 362, the liability of a Debtor,
allowance, and the amount thereof are determined by a Final Order of a court of
competent jurisdiction other than the Bankruptcy Court; (f) with respect to any
Administrative Claim for goods or non-professional services provided to the
Debtors during these Cases in the ordinary course of their business, (i) no
objection to the allowance thereof has been timely interposed on or before the
Claims Objection Bar Date, and (ii) such Administrative Claim has not been
withdrawn, paid in full (pursuant to a prior order of the Bankruptcy Court or
otherwise in the ordinary course of their business), or otherwise deemed
satisfied in full in the ordinary course of their business; or (g) any Claim
that is expressly deemed an Allowed Claim under the Plan.  Unless
otherwise ordered by the Bankruptcy Court prior to Confirmation, or as
specifically provided to the contrary in this Plan with respect to any
particular Claim, an “Allowed” Claim shall not, for any purpose under the Plan,
include (i) any interest on such Claim to the extent accruing or maturing on or
after the Petition Date, (ii) punitive or exemplary damages, or (iii) any fine,
penalty, or forfeiture.

     

    1.6.           Allowed  . . .
Claims:  All Allowed Claims in the particular Class or of the
specific type or nature described.

     

    1.7.           Allowed Insured
Claims:  All Insured Claims that are Allowed
Claims.

     

    1.8.           Amended and Restated
By-Laws:  The by-laws of Reorganized Aurora on or after the
Effective Date, the form of which is to be included in the Plan Supplement to
the extent not submitted earlier.

     

    1.9.           Amended and Restated Articles of
Incorporation:  The amended and restated articles of
incorporation of Reorganized Aurora on or after the Effective Date, the form of
which is to be included in the Plan Supplement to the extent not submitted
earlier.

     

    1.10.         Amended and Restated LLC
Agreement:  The amended and restated limited liability company
agreement of Reorganized HPPC on or after the Effective Date, the form of which
is to be included in the Plan Supplement to the extent not submitted
earlier.

     

    1.11.         Articles of Conversion in
Utah:  The articles of conversion to be filed, subject to
Section 6.19(b) hereof, with the Secretary of State of Utah on or after the
Effective Date effecting and evidencing the Utah Conversion, the form of which
is to be attached as an exhibit to the Voting Agreement and included in the Plan
Supplement.

    
      
         

      

      
        -2-

        
          

        

      

      
         

      

    

    1.12.         Assets:  All of the
right, title, and interest of either of the Debtors in and to any and all assets
and property, whether tangible, intangible, real, or personal, that constitute
property of the respective Estates within the purview of Bankruptcy Code § 541,
including, without limitation, any and all claims, Causes of Action, and/or
rights of the respective Debtors under federal and/or state law.

     

    1.13.         Assumption
Dispute:  Such term shall have the meaning ascribed to it in
Plan Section 7.2.

     

    1.14.         Aurora:  Debtor
Aurora Oil & Gas Corporation, a Utah corporation.

     

    1.15.         Avoidance
Claims:  All of the Debtors’ and the Estates’ Causes of Action
against any Person arising under any of Bankruptcy Code §§ 502(d), 544, 545,
547, 548, 549, 550, and/or 553, or under similar or related state or federal
statutes and common law, including, without limitation, all preference,
fraudulent conveyance, fraudulent transfer, and/or other similar avoidance
claims, rights, and Causes of Action, whether or not litigation has been
commenced as of the Effective Date to prosecute such Avoidance
Claims.

     

    1.16.         Ballot:  The form
distributed to each Holder (as determined as of the Record Date in the case of a
Holder of an Allowed Claim in Class 2A or Class 2B) of an impaired Claim in
Class 2A, Class 2B, or Class 3A, on which is to be indicated either an
acceptance or a rejection of the Plan.

     

    1.17.         Bankruptcy
Code:  The Bankruptcy Reform Act of 1978, Title 11, United
States Code, as amended from time to time, and made applicable to these
Cases.

     

    1.18.         Bankruptcy
Court:  The United States Bankruptcy Court for the Western
District of Michigan, or any other court of competent jurisdiction exercising
jurisdiction over these Cases.

     

    1.19.         Bankruptcy
Rules:  The Federal Rules of Bankruptcy Procedure, promulgated
under Section 2075, Title 28, United States Code, as amended from time to time,
and made applicable to these Cases.

     

    1.20.         Business Day:  A day
other than a Saturday, Sunday, “legal holiday” (as such term is defined in
Bankruptcy Rule 9006(a)), or any other day on which commercial banks in Traverse
City, Michigan are authorized or required by law to close.

     

    1.21.         Cases:  The cases
for the reorganization of the Debtors commenced by voluntary petitions under
Chapter 11 of the Bankruptcy Code, filed on the Petition Date, in the Bankruptcy
Court.

     

    1.22.         Cash:  Legal tender
of the United States of America and equivalents thereof.

    
      
         

      

      
        -3-

        
          

        

      

      
         

      

    

    1.23.         Cause of
Action:  Any and all actions, proceedings, causes of action,
claims, suits, accounts, controversies, rights to legal or equitable remedies,
and rights to payment, whether known, unknown, reduced to judgment, not reduced
to judgment, liquidated, unliquidated, fixed, contingent, matured, unmatured,
disputed, undisputed, secured, or unsecured and whether asserted or unasserted,
in law, equity, or otherwise.

     

    1.24.         Certificates of Conversion to
Delaware:  The certificate of conversion filed, subject to
Section 6.19(b) hereof, with the Secretary of State of Delaware and articles of
conversion filed with the Secretary of State of Utah on or after the Effective
Date effecting and evidencing the Delaware Conversion, the form of which is to
be attached as an exhibit to the Voting Agreement and included in the Plan
Supplement.

     

    1.25.         Chapter 11:  Chapter
11 of the Bankruptcy Code.

     

    1.26.         Claim:  Any right to
payment from one or more of the Debtors arising, or with respect to which the
obligation giving rise to such right has been incurred, before the Effective
Date, whether or not such right is reduced to judgment, liquidated,
unliquidated, fixed, contingent, matured, unmatured, disputed, undisputed,
legal, equitable, secured, or unsecured; or any right to an equitable remedy for
breach of performance arising, or with respect to which the obligation giving
rise to such right has been incurred, before the Effective Date, if such breach
gives rise to a right to payment from one or more of the Debtors, whether or not
such right is reduced to judgment, liquidated, unliquidated, fixed, contingent,
matured, unmatured, disputed, undisputed, legal, equitable, secured, or
unsecured.

     

    1.27.         Claims
Agent:  Donlin, Recano & Company, Inc., in its capacity as
the claims, noticing, and balloting agent in these Cases.

     

    1.28.         Claims Objection Bar
Date:  With respect to any Claim, the date on or before the
later of (i) the 90th day
following the Effective Date; or (ii) the 90th day
after the date such Claim is timely filed; or (iii) such later date as may be
established from time to time by entry of an order, prior to the expiration of
the dates set forth in clauses (i) and (ii) hereof, by the Bankruptcy Court
establishing the last date for filing objections to Claims.

     

    1.29.         Class:  A category,
designated herein, of Claims or Interests that are substantially similar to the
other Claims or Interests in such category as specified in Article II of the
Plan.

     

    1.30.         Confirmation:  The
entry on the docket of the Bankruptcy Court of the Confirmation
Order.

     

    1.31.         Confirmation
Date:  The date upon which Confirmation occurs.

     

    1.32.         Confirmation
Order:  The order of the Bankruptcy Court confirming the
Plan.

     

    1.33.         Credit
Facilities:  Collectively, the DIP Facility, the First Lien
Loan, and the Second Lien Loan.

     

    1.34.         Creditor:  Any
Holder of an Allowed Claim against one or more of the Debtors that arose (or is
based on an obligation incurred) on or before the Petition Date, including,
without limitation, any Allowed Claim against the respective Estates of a kind
specified in Bankruptcy Code § 502(g), (h), or (i).

    
      
         

      

      
        -4-

        
          

        

      

      
         

      

    

    1.35.         Creditors
Committee:  The official committee of unsecured creditors
formed in these Cases on July 21, 2009, as constituted from time to
time.

     

    1.36.         Debtor:  Either one
of the Debtors.

     

    1.37.         Debtors:  Together,
Aurora and HPPC.

     

    1.38.         Debtor
Parties:  Collectively, the Debtors, the Reorganized Debtors,
the Estates, and any Person seeking to exercise the rights of the Estates,
including, without limitation, any successor to the Debtors or any Estate
representative appointed or selected pursuant to Bankruptcy Code § 1123(b) or
otherwise (including, without limitation, any Chapter 11 or Chapter 7 trustee
appointed in either of these Cases), on their own behalf and on behalf of all
the Debtors’ respective Interest Holders and Creditors
derivatively.

     

    1.39.         Debtor Releasing
Parties:  Collectively, the Debtor Parties and each of their
respective current and former directors, officers, employees, stockholders,
members, principals, subsidiaries, affiliates, predecessors, successors, and
assigns.

     

    1.40.         Delaware Certificate of
Formation:  The certificate of formation of the Delaware
limited liability company, into which Reorganized Aurora will be converted,
subject to Section 6.19(b) hereof, pursuant to the Delaware Conversion, to be
filed with the Secretary of State of Delaware after the Effective Date, the form
of which is to be attached as an exhibit to the Voting Agreement and included in
the Plan Supplement.

     

    1.41.         Delaware
Conversion:  The conversion of Reorganized Aurora from a Utah
limited liability company into a Delaware limited liability company to be
effected, subject to Section 6.19(b) hereof, after the Utah
Conversion.

     

    1.42.         DIP Facility:  The
debtor-in-possession credit facility established pursuant to a credit agreement,
dated as of October [7], 2009 and as may be amended, supplemented, or extended
from time to time, among Aurora, as borrower, the DIP Facility Guarantor, as
guarantor, the DIP Facility Lenders, as lenders, and the DIP Facility
Administrative Agent, as administrative agent to the DIP Facility Lenders,
together with (a) the documents, instruments, and agreements related thereto or
entered into in connection therewith, and (b) the DIP Facility Order and any
subsequent orders of the Bankruptcy Court related thereto or entered into in
connection therewith.

     

    1.43.         DIP Facility Administrative
Agent:  The Administrative Agent, as such term is defined in
the DIP Facility, which is currently BNP Paribas, and all successors and assigns
thereof.

     

    1.44.         DIP Facility
Claims:  All Claims of the DIP Facility Administrative Agent
and the DIP Facility Lenders against the Debtors represented by, related to,
arising under, or in connection with the DIP Facility and/or the DIP Facility
Guarantee, for all outstanding obligations thereunder incurred through and
including the Effective Date, after taking into account the sum of all payments
made to the DIP Facility Lenders prior to the Effective Date on account of such
Claims (if any).

    
      
         

      

      
        -5-

        
          

        

      

      
         

      

    

    1.45.         DIP Facility
Guarantee:  The guarantee executed and delivered by the DIP
Facility Guarantor in respect of Aurora’s obligations under the DIP
Facility.

     

    1.46.         DIP Facility
Guarantor:  HPPC, in its capacity as the guarantor pursuant to
the DIP Facility Guarantee of Aurora’s obligations under the DIP
Facility.

     

    1.47.         DIP Facility
Lenders:  The Lenders (as defined in the DIP Facility) in their
respective capacities as the lenders under the DIP Facility, and their
respective participants (if any), successors, and assigns
thereunder.

     

    1.48.         DIP Facility
Order:  The Final Order of the Bankruptcy Court, dated October
5, 2009, approving the DIP Facility.

     

    1.49.         Directors & Officers Liability
Insurance Policies:  Collectively, those certain directors and
officers liability insurance policies issued to Aurora, as
follows:  (1) Policy No. 00-330-92-04, underwritten by National Union
Fire Insurance Company of Pittsburg, Pa., effective October 31, 2008 - October
31, 2009; (2) Policy No. 8207-5267, underwritten by Federal Insurance Company,
effective October 31, 2008 - October 31, 2009; (3) runoff policy issued by
National Union Fire Insurance Company of Pittsburgh, Pa., with a six-year
effective date from date of trigger; and (4) runoff policy issued by Federal
Insurance Company, with a six-year effective date from date of trigger, and all
endorsements, tails, and other materials relating thereto, as the same has been
expanded from time to time.

     

    1.50.         Disclosure
Statement:  The disclosure statement and all supplements and
exhibits thereto that relate to the Plan and are approved by the Bankruptcy
Court pursuant to Bankruptcy Code § 1125, as the same may be amended or modified
by the Debtors from time to time pursuant to the Bankruptcy Code, the Bankruptcy
Rules, or the Local Bankruptcy Rules.

     

    1.51.         Disputed Claim:  A
Claim as to which a Proof of Claim has been filed, or deemed filed under
applicable law, as to which an objection has been or may be timely filed and
which objection, if timely filed, has not been withdrawn and has not been
overruled or denied by a Final Order.  A Claim shall be considered a
Disputed Claim in its entirety if (for among other reasons):  (i) the
amount of the Claim specified in the applicable Proof of Claim exceeds the
amount of any corresponding Claim scheduled by the Debtors in the Schedules or
in the applicable Debtor’s books and records; (ii) any corresponding Claim
scheduled by the Debtors in the Schedules has been scheduled as disputed,
contingent, unliquidated, or at $0, irrespective of the amount scheduled or as
set forth on the applicable Debtor’s books and records; (iii) no corresponding
Claim has been scheduled by the Debtors in the Schedules or is not set forth in
the applicable Debtor’s books and records; or (iv) such Proof of Claim has been
filed after the last date to timely do so as established either pursuant to a
Final Order of the Bankruptcy Court or as otherwise set forth in this Plan (as
applicable).

     

    1.52.         Disputed Claims
Reserve:  This term shall have the meaning set forth in Plan
Section 6.10(a).

    
      
         

      

      
        -6-

        
          

        

      

      
         

      

    

    1.53.         Disputed Class . . .
Claim:  Any Disputed Claim in the particular Class
described.

     

    1.54.         Distribution Record
Date:  The record date for purposes of making distributions
under the Plan on account of Allowed Claims, which date shall be the first
Business Day following the Confirmation Date or such other date designated as
such in the Confirmation Order.

     

    1.55.         Effective Date:  The
Business Day on which the Plan becomes effective as provided in Article VIII of
the Plan.

     

    1.56.         Employee Termination
Claims:  This term shall have the meaning set forth in Plan
Section 6.29.

     

    1.57.         Employees:  Collectively,
the present and former employees (including retirees) of either of the
Debtors.

     

    1.58.         Equity Compensation Plan for
Non-Employee Directors:  That certain equity compensation plan,
adopted and approved by Aurora in 2001, which provides that each non-employee
director of Aurora is entitled to receive options to purchase 100,000 shares of
Old Aurora Common Stock, issuable in increments of options to purchase 33,333
shares each year over a period of 3 years, so long as the director continues in
office.

     

    1.59.         Estate(s):  Individually,
the estate of each Debtor in these Cases, and, collectively, the estates of both
of the Debtors in these Cases, created pursuant to Bankruptcy Code §
541.

     

    1.60.         Executory
Contract:  Any executory contract or unexpired lease, subject
to Bankruptcy Code § 365, between either of the Debtors and any other Person or
Persons, specifically excluding any contracts or agreements entered into
pursuant to the Plan and any of the respective Debtors’ “oil and gas
leases.”

     

    1.61.         Existing Stock Option
Plans:  Collectively, the 2004 Equity Incentive Plan, the 2006
Stock Incentive Plan, the 1997 Stock Option Plan, and the Equity Compensation
Plan for Non-Employee Directors, and any other stock option plan of either of
the Debtors in existence as of the Confirmation Date.

     

    1.62.         Exit Credit
Facility:  That certain secured exit credit facility, together
with all documents, instruments, and agreements related thereto or entered into
in connection therewith, that may be entered into by the Reorganized Debtors, as
borrowers or guarantor (as applicable), the Exit Credit Facility Lenders, as
lenders, and the Exit Credit Facility Administrative Agent, as administrative
agent for the Exit Credit Facility Lenders, effective as of the Effective
Date.

     

    1.63.         Exit Credit Facility Administrative
Agent:  The Administrative Agent, as such term is defined in
the Exit Credit Facility, which is BNP Paribas, and all successors and assigns
thereof.

     

    1.64.         Exit Credit Facility
Guarantee:  Any guarantee that is to be executed and delivered
by the Exit Credit Facility Guarantor, concurrently with the execution and
delivery of any Exit Credit Facility, in respect of the borrower’s obligations
under the Exit Credit Facility, including, without limitation, the obligations
under the New Secured Notes and the outstanding Working Capital
Loans.

    
      
         

      

      
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    1.65.         Exit Credit Facility
Guarantor:  Reorganized HPPC, in its capacity as the guarantor
of Reorganized Aurora’s obligations under the Exit Credit Facility pursuant to
the Exit Credit Facility Guarantee.

     

    1.66.         Exit Credit Facility
Lenders:  Collectively, the lenders under the Exit Credit
Facility, and their respective participants, successors, and assigns
thereunder.

     

    1.67.         Final Order:  Any
order or judgment entered by the Bankruptcy Court or other court that has not
been reversed or stayed and as to which the time to appeal, petition for
certiorari, or move for reargument or rehearing has expired and as to which no
appeal, petition for certiorari, or other proceedings for reargument or
rehearing shall then be pending or as to which any right to appeal, petition for
certiorari, reargue, or rehear shall have been waived in writing in form and
substance satisfactory to the Debtors or, in the event that an appeal, writ of
certiorari, or reargument or rehearing thereof has been sought, such order or
judgment of the Bankruptcy Court or other applicable court shall have been
affirmed by the highest court to which such order or judgment was appealed, or
certiorari has been denied, or from which reargument or rehearing was sought,
and the time to take any further appeal, petition for certiorari, or move for
reargument or rehearing shall have expired;  provided, however, that the
possibility that a motion under Bankruptcy Code § 502(j), Rules 59 or 60 of the
Federal Rules of Civil Procedure, or any analogous rule under the Bankruptcy
Rules may be but has not then been filed with respect to such order or judgment
shall not cause such order or judgment not to be a Final Order.

     

    1.68.         First Lien
Loan:  That certain senior secured credit facility, dated as of
August 20, 2007, in an aggregate amount of up to $100 million, of which
approximately $72 million was outstanding as of the Petition Date, as the same
may have been further amended from time to time, by and between Aurora, as
borrower; the First Lien Loan Administrative Agent, as administrative agent,
sole lead arranger, and sole bookrunner; the First Lien Loan Lenders, as
lenders; and the First Lien Loan Guarantors, as guarantors, together with all
documents, instruments, and agreements related thereto or entered into in
connection therewith.

     

    1.69.         First Lien Loan Administrative
Agent:  The Administrative Agent, as such term is defined in
the First Lien Loan, which is currently BNP Paribas, and all successors and
assigns thereof.

     

    1.70.         First Lien Loan
Claims:  All Claims of the First Lien Loan Administrative Agent
and the First Lien Loan Lenders against the Debtors represented by, related to,
arising under, or in connection with the First Lien Loan and/or the First Lien
Loan Guarantees, for any and all outstanding obligations thereunder incurred
through and including the Effective Date, after taking into account the sum of
all payments made to the First Lien Loan Lenders prior to the Effective Date on
account of such Claims.

     

    1.71.         First Lien Loan
Guarantees:  The guarantees issued by the First Lien Loan
Guarantors of Aurora’s repayment obligations under the First Lien
Loan.

    
      
         

      

      
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    1.72.         First Lien Loan
Guarantors:  The Guarantors, as such term is defined in the
First Lien Loan, and all successors and assigns thereof.

     

    1.73.         First Lien Loan
Lenders:  The Lenders, as such term is defined in the First
Lien Loan, and all participants (if any), successors, and assigns
thereof.

     

    1.74.         General Unsecured
Claims:  Unless otherwise specified in this Plan, all Claims
against one or both of the Debtors; provided, however, that, in
each case, such Claims (a) are not (i) Secured Claims (as provided for, and
determined in accordance with, Bankruptcy Code § 506(a) (including any and all
DIP Facility Claims, First Lien Loan Claims, Second Lien Loan Claims, Class 2C
Claims, or NW Bank Secured Claims), (ii) Administrative Claims, (iii) Priority
Claims, (iv) Tax Claims, (v) Intercompany Claims, or (vi) Employee Termination
Claims; and (b) are not otherwise entitled to priority under the Bankruptcy Code
or any Final Order of the Bankruptcy Court.

     

    1.75.         Guarantees:  Collectively,
the DIP Facility Guarantee, the First Lien Loan Guarantee, and the Second Lien
Loan Guarantee.

     

    1.76.         Guarantors:  Collectively,
the DIP Facility Guarantor, the First Lien Loan Guarantors, and the Second Lien
Loan Guarantors.

     

    1.77.         Holder:  The
beneficial owner of any Claim or Interest.

     

    1.78.         HPPC:  Debtor Hudson
Pipeline & Processing Co., LLC, a Michigan limited liability.

     

    1.79.         Initial Distribution
Date:  A date not later than 30 days after the Effective Date
(or as soon thereafter as is practicable) or such other date as the Bankruptcy
Court may order.

     

    1.80.         Insured Claim:  Any
Claim arising from an incident or occurrence alleged to have occurred prior to
the Effective Date that is covered under an insurance policy applicable to the
Debtors or their businesses.

     

    1.81.         Intercompany
Claim:  (a) Any account reflecting intercompany book entries by
one Debtor with respect to the other Debtor or (b) any Claim that is not
reflected in such book entries and is held by a Debtor against the other
Debtor.

     

    1.82.         Interest:  An
ownership interest in either of the Debtors as evidenced by an equity security
(as such term is defined in Bankruptcy Code § 101(16)) of any Debtor, any rights
to any dividends or distributions as a result of such ownership, and any option,
warrant, or right to acquire any such ownership interest, including, without
limitation, any and all Claims (i) for damages arising from the rescission of
the purchase or sale of the Old Aurora Common Stock or the Old HPPC Interests,
or (ii) for reimbursement or contribution allowed under Bankruptcy Code § 502 on
account of such Claim, which Claims are subordinated pursuant to Bankruptcy Code
§ 510.

     

    1.83.         LIBOR:  Such term
shall have the same meaning that “Adjusted LIBO Rate” has under the First Lien
Loan.

    
      
         

      

      
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    1.84.         Lien:  Any lien,
security interest, or other charge or encumbrance of any kind, or any other type
of preferential arrangement, easement, right of way, or other encumbrance on
title to real or personal property.

     

    1.85.         Local Bankruptcy
Rules:  The Local Bankruptcy Rules for the Western District of
Michigan, effective February 1, 2007, as amended from time to time, and made
applicable to these Cases.

     

    1.86.         Management and Director Equity
Plan:  That certain new equity incentive plan, which may be
adopted by the Reorganized Debtors following the Effective Date.

     

    1.87.         Management Transition Services
Agreements:  Collectively, those agreements, which will be
substantially in the form as set forth in the Plan Supplement, by and between
the Debtors and/or the Reorganized Debtors (as applicable) and each of Barbara
Lawson, Rebecca Abbott, David Deneau, Jeffrey Deneau, and John Hunter, pursuant
to which such individuals shall provide transitional services to the Debtors
and/or the Reorganized Debtors (as applicable).

     

    1.88.         New Aurora Class A Common
Stock:  The shares of Class A common stock, par value $0.01 per
share, of Reorganized Aurora, to be issued and distributed in the manner
provided by the Plan and/or issued upon the exercise of the New
Warrants.

     

    1.89.         New Aurora Class B Common
Stock:  The shares of non-voting Class B common stock, par
value $0.01 per share, of Reorganized Aurora, to be issued and distributed in
the manner provided by the Management and Director Equity Plan.

     

    1.90.         New Aurora Common
Stock:  Collectively, the New Aurora Class A Common
Stock  and the New Aurora Class B Common Stock.

     

    1.91.         New Aurora Preferred
Stock:  The shares of preferred stock, par value $0.01 per
share, of Reorganized Aurora, to be issued and distributed in the manner
provided by the Plan.

     

    1.92.         New Secured
Notes:  Collectively, the (a) Tranche A Notes and (b) the
Tranche B Notes.

     

    1.93.         New Warrants:  Such
term shall have the meaning ascribed to it in Plan Section 6.13(e).

     

    1.94.         1997 Stock Option
Plan:  That certain stock option plan, adopted and approved by
Aurora in 1997, pursuant to which Aurora was authorized to issue compensatory
options to purchase up to 1,000,000 shares of Old Aurora Common
Stock.

     

    1.95.         Non-Debtor Intercompany
Claim:  Any claim, debt, or other obligation held by or against
either Debtor or any Affiliate, or subsidiary of either Debtor, by or against
any non-Debtor subsidiary or Affiliate of a Debtor.

    
      
         

      

      
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    1.96.         Non-Debtor Releasing
Parties:  Collectively, each and every Person that has held,
holds, or may hold a Claim or Interest and that receives a distribution under
this Plan or has its Claim Reinstated.

     

    1.97.         NW
Bank:  Northwestern Bank.

     

    1.98.         NW Bank
Agreements:  Collectively, the NW Bank LCs and the NW Bank
Note.

     

    1.99.         NW Bank
Claims:  Collectively, the NW Bank LCs Claim, the NW Bank Note
Secured Claim, and the NW Bank Note Deficiency Claim.

     

    1.100.       NW Bank
Collateral:  Collectively, the NW Bank LCs Collateral and the
NW Bank Note Collateral.

     

    1.101.       NW Bank
LCs:  The approximately $633,000
in principal amount of letters of credit that NW Bank issued on the Debtors’
account.

     

    1.102.       NW Bank LCs
Claim:  All Claims of NW Bank against the Debtors represented
by, related to, arising under, or in connection with the NW Bank LCs, for any
and all outstanding obligations thereunder incurred through and including the
Effective Date, after taking into account the sum of all payments made to NW
Bank prior to the Effective Date on account of such Claims.

     

    1.103.       NW Bank LCs
Collateral:  The approximately $160,000 in cash collateral
currently in one of Aurora’s bank accounts with NW Bank and a pledge of the
Debtors’ right to receive approximately $500,000, which collectively serve as
collateral for the Debtors’ obligations under the NW Bank LCs.

     

    1.104.       NW Bank Note:  That
certain promissory note issued by Aurora on September 19, 2005 to NW Bank, the
balance of which as of the Petition Date is approximately $2.6
million.

     

    1.105.       NW Bank Note
Collateral:  Aurora’s corporate headquarters located in
Traverse City, Michigan, which Aurora provided to NW Bank as collateral for the
NW Bank Note.

     

    1.106.       NW Bank Note Deficiency
Claim:  All Claims of NW Bank against Aurora for the
difference, if any, between (i) the aggregate amount owed by Aurora to NW for
any and all outstanding obligations under the NW Bank Note incurred through and
including the Effective Date, after taking into account the sum of all payments
made by Aurora to NW Bank prior to the Effective Date on account of the NW Bank
Note, and (ii) the amount of the NW Bank Note Secured Claim.

     

    1.107.       NW Bank Note Secured
Claim:  All Claims of NW Bank against Aurora represented by,
related to, arising under, or in connection with the NW Bank Note, for any and
all outstanding obligations thereunder incurred through and including the
Effective Date, after taking into account the sum of all payments made to NW
Bank by Aurora prior to the Effective Date on account of such Claims, but only
to the extent of the value of NW Bank’s interest in Aurora’s interests in the NW
Bank Note Collateral, as determined pursuant to Bankruptcy Code § 506(a) and, if
applicable, § 1129(b).

    
      
         

      

      
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    1.108.       NW Bank Secured
Claims:  Collectively, the NW Bank LCs Claim and the NW Bank
Note Secured Claim.

     

    1.109.       Old Aurora Common
Stock:  Collectively, the 250,000,000 authorized shares of
common stock of Aurora, with a $0.01 par value, of which 103,282,788 shares were
outstanding as of June 30, 2009, and any options (including, without limitation,
all options issued under any of the Existing Stock Option Plans), warrants, or
rights, contractual or otherwise, to acquire any shares of such
stock.

     

    1.110.       Old HPPC Interests: The limited liability
company membership interests of HPPC, of which 96% were owned by Aurora and the
remaining 4% were owned by Barry A. Riske and Longhorn Properties as of the
Petition Date, and any options, warrants, or rights, contractual or otherwise,
to acquire any additional membership interests of HPPC.

     

    1.111.       Old Stock of . .
..:  When used with reference to a particular Debtor or Debtors,
the common stock, preferred stock, or similar equity ownership interests (as
applicable) issued by such Debtor or Debtors and outstanding immediately prior
to the Petition Date.

     

    1.112.       Person:  An
individual, corporation, partnership, limited liability company, association,
joint stock company, joint venture, estate, trust, unincorporated organization,
government or any political subdivision thereof, or any other
entity.

     

    1.113.       Petition Date:  July
12, 2009, the date upon which the Debtors’ respective petitions for relief under
Chapter 11 commencing these Cases were filed.

     

    1.114.       PIK Interest:  Such
term shall have the meaning ascribed to it in Plan Section 6.13(g).

     

    1.115.       Plan:  This Joint
Plan of Reorganization proposed by the Debtors set forth herein, and all
supplements and exhibits hereto, as the same may be amended or modified by the
Debtors from time to time pursuant to, and in accordance with, the terms hereof,
the Bankruptcy Code, the Bankruptcy Rules, the Local Bankruptcy Rules, or any
applicable orders of the Bankruptcy Court.

     

    1.116.       Plan Documents:  The
documents and forms of documents specified or referenced in, and/or to be
executed by either of the Debtors and/or either of the Reorganized Debtors
pursuant to the terms of the Plan and/or the Exit Credit Facility, which
documents may include, among others, the Amended and Restated By-Laws; the
Amended and Restated Articles of Incorporation; the Amended and Restated LLC
Agreement; any and all documents establishing the terms and conditions of the
Exit Credit Facility, the New Secured Notes, the Working Capital Loans, and the
Exit Credit Facility Guarantee; any and all documents establishing the terms and
conditions of the New Aurora Preferred Stock, the New Aurora Class A Common
Stock, or the New Aurora Class B Common Stock; any and all documents
establishing the terms and conditions of the New Warrants; the Registration
Rights Agreement; the Voting Agreement; and any and all documents establishing
the terms and conditions of the Management and Director Equity Plan (if any); as
all such documents and forms of documents may be amended and/or supplemented
from time to time, all of which documents shall be in form and substance
satisfactory to the Debtors.

    
      
         

      

      
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    1.117.       Plan Rejection Bar
Date:  Such term shall have the meaning ascribed to it in Plan
Section 7.4(a).

     

    1.118.       Plan
Supplement:  The supplement to the Plan containing a
compilation of the draft forms and/or summaries of certain of the Plan Documents
and certain related lists, summaries, and/or schedules, as may be amended,
modified, or supplemented from time to time thereafter in accordance with the
Plan.

     

    1.119.       Priority
Claims:  All Claims that are entitled to priority pursuant to
Bankruptcy Code § 507(a) or (b) that are not Administrative Claims or Tax
Claims.

     

    1.120.       Professional(s):  Any
professional(s) employed in these Cases pursuant to Bankruptcy Code §§ 327, 328,
1103, or otherwise, and any professional(s) seeking compensation or
reimbursement of expenses in connection with these Cases pursuant to Bankruptcy
Code §§ 330, 331, and/or 503(b)(4).

     

    1.121.       Professional
Fees:  All fees due and owing to any Professional for
compensation or reimbursement of costs and expenses relating to services
incurred on and after the Petition Date and on and prior to the Effective
Date.

     

    1.122.       Proof of Claim:  Any
written statement filed in these Cases by a Creditor in which such Creditor sets
forth the amount purportedly owed and sufficient supporting details to identify
the basis for a Claim.

     

    1.123.       Pro
Rata:  Proportionately, so that a Pro Rata distribution with
respect to an Allowed Claim of a particular Class bears the same ratio to all
distributions (and, in the case of Disputed Claims, allocations) on account of a
particular Class or Classes, as the dollar amount of such Allowed Claim bears to
the dollar amount of all Allowed Claims and Disputed Claims (as applicable) in
such Class or Classes.

     

    1.124.       Record Date:  The
record date for voting on the Plan, which shall be __________ _, 2009, for
Holders of Allowed Claims in Class 2A or Class 2B.

     

    1.125.       Registration Rights
Agreement:  The registration rights agreement to be entered
into by Reorganized Aurora, substantially in the form to be included in the Plan
Supplement.

     

    1.126.       Reinstated or
Reinstatement:  Either (i) leaving unaltered the legal,
equitable, and contractual right to which a Claim entitles the Holder of such
Claim so as to leave such Claim unimpaired in accordance with Bankruptcy Code §
1124 or (ii) notwithstanding any contractual provision or applicable law that
entitles the Holder of such Claim to demand or receive accelerated payment of
such Claim after the occurrence of a default, (a) curing any such default that
occurred before or after the Petition Date, other than a default of a kind
specified in Bankruptcy Code § 365(b)(2); (b) reinstating the maturity of such
Claim as such maturity existed before such default; (c) compensating the Holder
of such Claim for any damages incurred as a result of any reasonable reliance by
such Holder on such contractual provision or such applicable law; or (d) not
otherwise altering the legal, equitable, or contractual rights to which such
Claim entitles the Holder of such Claim; provided, however, that any
contractual right that does not pertain to the payment when due of principal and
interest on the obligation on which such Claim is based, including, but not
limited to, financial covenant ratios, negative pledge covenants, covenants or
restrictions on merger or consolidation, and affirmative covenants regarding
corporate existence, prohibiting certain transactions or actions contemplated by
the Plan, or conditioning such transactions or actions on certain factors, shall
not be required to be reinstated in order to accomplish the
Reinstatement.

    
      
         

      

      
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    1.127.       Rejection
Claims:  All Claims arising as a result of a Debtor’s rejection
of an Executory Contract pursuant to Bankruptcy Code §§ 365 and 1123, subject to
the limitations provided in Bankruptcy Code § 502(b).

     

    1.128.       Released
Parties:  Collectively, (i) the Debtors and the Reorganized
Debtors; (ii) the First Lien Loan Lenders, the Second Lien Loan Lenders, the DIP
Facility Lenders, and the Administrative Agents, solely in their respective
capacities as such; (iii) BNP Paribas, in its capacity as (A) sole lead arranger
and sole bookrunner under the First Lien Loan, the Second Lien Loan, and the DIP
Facility and (B) issuing bank under the First Lien Loan and the DIP Facility;
(iv) the Creditors Committee and the members thereof, solely in their respective
capacities as such; (v) the current and former directors, officers,
stockholders, professionals, and employees of (a) the Debtors and (b) the
Reorganized Debtors; (vi) with respect to each of the foregoing Persons, such
Person’s predecessors, successors, and assigns, and current and former
directors, officers, employees, stockholders, members, subsidiaries, affiliates,
principals, agents, advisors, financial advisors, attorneys, accountants,
investment bankers, consultants, underwriters, appraisers, representatives, and
other professionals, in each case in their respective capacities as such; and
(vii) any Person claimed to be liable derivatively through any Person referred
to in clauses (i), (ii), (iii), (iv), (v) or (vi) of this Section
1.128.

     

    1.129.       Releasing Party or Releasing Parties:
Either a Non-Debtor Releasing Party or a Debtor Party (as applicable), or
collectively, the Non-Debtor Releasing Parties and the Debtor Parties (as
applicable).

     

    1.130.       Reorganized
Aurora:  Aurora, as reorganized on and after the Effective
Date.

     

    1.131.       Reorganized Aurora LLC
Agreement:  The Limited Liability Company Agreement of
Reorganized Aurora to become effective, subject to Section 6.19(b) hereof, after
the Effective Date upon the consummation of the Delaware Conversion, the form of
which is to be attached as an exhibit to the Voting Agreement and included in
the Plan Supplement.

     

    1.132.       Reorganized
Debtors:  Collectively, Reorganized Aurora and Reorganized
HPPC.

     

    1.133.       Reorganized
HPPC:  HPPC, as reorganized on and after the Effective
Date.

     

    1.134.       Schedules:  The
schedules of assets and liabilities and statements of financial affairs that
have been filed, or may be filed, in the Bankruptcy Court by the Debtors in
accordance with Bankruptcy Code § 521 and/or any applicable ruling of the
Bankruptcy Court, as any such schedules or statements (if any) may be amended or
supplemented from time to time in accordance with Bankruptcy Rule 1009 or an
order of the Bankruptcy Court.

    
      
         

      

      
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    1.135.       Second Lien
Loan:  That certain second lien term loan facility, in an
initial amount of up to $50 million, dated as of August 20, 2007, as the same
may have been amended from time to time, by and between Aurora, as borrower; the
Second Lien Loan Administrative Agent, as administrative agent; BNP Paribas as
the sole lead arranger and sole bookrunner; the Second Lien Loan Lenders, as
lenders; and the Second Lien Loan Guarantors, as guarantors, together with all
documents, instruments, and agreements related thereto or entered into in
connection therewith.

     

    1.136.       Second Lien Loan Administrative
Agent:  The Administrative Agent, as such term is defined in
the Second Lien Loan, which is currently Laminar Direct Capital, LLC, and all
successors and assigns thereof.

     

    1.137.       Second Lien Loan
Claims:  All Claims of the Second Lien Loan Administrative
Agent and the Second Lien Loan Lenders against the Debtors represented by,
related to, arising under, or in connection with the Second Lien Loan and/or the
Second Lien Loan Guarantees, for any and all outstanding obligations thereunder
incurred through and including the Effective Date, after taking into account the
sum of all payments made to the Second Lien Loan Lenders prior to the Effective
Date on account of such Claims.

     

    1.138.       Second Lien Loan
Guarantees:  The guarantees issued by the Second Lien Loan
Guarantors of Aurora’s repayment obligations under the Second Lien
Loan.

     

    1.139.       Second Lien Loan
Guarantors:  The Guarantors, as such term is defined in the
Second Lien Loan, and all successors and assigns thereof.

     

    1.140.       Second Lien Loan
Lenders:  The Lenders, as such term is defined in the Second
Lien Loan, and all participants (if any), successors, and assigns
thereof.

     

    1.141.       Secondary Liability
Claim:  A Claim that arises from a Debtor being liable as a
guarantor of, or otherwise being jointly, severally, or secondarily liable for,
any contractual, tort, or other obligation of another Debtor, including any
Claim based on:  (a) guarantees of collection, payment, or performance
(including, but not limited to, any of the Guarantees or any guarantee relating
to any Executory Contract); (b) indemnity bonds, obligations to indemnify, or
obligations to hold harmless; (c) performance bonds; (d) contingent liabilities
arising out of contractual obligations or out of undertakings (including any
assignment or other transfer) with respect to leases, operating agreements, or
other similar obligations made or given by a Debtor relating to the obligations
or performance of another Debtor; (e) vicarious liability; (f) liabilities
arising out of piercing the corporate veil, alter ego liability, or similar
legal theories; or (g) any other joint or several liability that any Debtor may
have in respect of any obligation that is the basis of a Claim.

     

    1.142.       Secured Claims:  All
Claims that are secured by a properly perfected and not otherwise avoidable Lien
on property in which an Estate has an interest or that is subject to setoff
under Bankruptcy Code § 553, solely to the extent of the value of the Claim
Holder’s interest in the applicable Estate’s interest in such property or to the
extent of the amount subject to setoff, as applicable, as determined pursuant to
Bankruptcy Code § 506(a) and, if applicable, § 1129(b); provided, however, that if the
Holder of a Secured Claim is entitled to and does timely elect application of
Bankruptcy Code § 1111(b)(2), then such Holder’s Claim shall be a Secured Claim
to the extent such Claim is Allowed.

    
      
         

      

      
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    1.143.       Securities Act:  The
Securities Act of 1933, as amended.

     

    1.144.       Tax Claims:  All
Claims that are entitled to priority under Bankruptcy Code
§ 507(a)(8).

     

    1.145.       Tranche A
Notes:  The $20 million of reinstated and modified indebtedness
previously funded and outstanding pursuant to the First Lien Loan, to be issued
by Reorganized Aurora under the Exit Credit Facility as secured tranche A notes,
and to be guaranteed by the Exit Credit Facility Guarantor pursuant to the Exit
Credit Facility Guarantee, and all security and other documents related thereto
or entered into in connection therewith.

     

    1.146.       Tranche B
Notes:  The $20 million of reinstated and modified indebtedness
previously funded and outstanding pursuant to the First Lien Loan, to be issued
by Reorganized Aurora under the Exit Credit Facility as secured tranche B notes,
and to be guaranteed by the Exit Credit Facility Guarantor pursuant to the Exit
Credit Facility Guarantee, and all security and other documents related thereto
or entered into in connection therewith.

     

    1.147.       Triggering
Event:  The passing of 18 months after the Effective
Date.

     

    1.148.       2004 Equity Incentive
Plan:  That certain equity incentive plan, adopted and approved
by Aurora in 2004, which plan provides for the grant of options or restricted
shares for compensatory purposes for up to 1,000,000 shares of Old Aurora Common
Stock.

     

    1.149.       2006 Stock Incentive
Plan:  That certain stock incentive plan, adopted and approved
by Aurora in 2006, which plan provides for the award of options or restricted
shares for compensatory purposes for up to 8,000,000 shares of Old Aurora Common
Stock.

     

    1.150.       Utah Articles of
Organization:  The certificate of formation of the Utah limited
liability company into which Reorganized Aurora will be converted, subject to
Section 6.19(b) hereof, pursuant to the Utah Conversion, to be filed with the
Secretary of State of Utah after the Effective Date, the form of which is to be
attached as an exhibit to the Voting Agreement and included in the Plan
Supplement.

     

    1.151.       Utah
Conversion:  The conversion of Reorganized Aurora from a Utah
corporation to a Utah limited liability company to be effected, subject to
Section 6.19(b) hereof, after the Effective Date.

     

    1.152.       Utility
Companies:  Those Persons who, in connection with the operation
of the Debtors’ business and the Debtors’ management of their properties,
supplied or provided electricity, water, sewer, telephone, communications, trash
collection, and/or other services of this general character to either of the
Debtors prior to the Petition Date.

    
      
         

      

      
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    1.153.       Voting
Agreement:  The voting agreement, substantially in the form to
be included in the Plan Supplement, to be entered into on the Effective Date by
Reorganized Aurora and the respective holders of the New Aurora Class A Common
Stock  and the New Aurora Preferred Stock, pursuant to which the
respective holders of the New Aurora Class A Common Stock  and the New
Aurora Preferred Stock will agree, subject to Section 6.19(b) hereof, to vote
all such shares to approve the Utah Conversion, the Delaware Conversion, and the
Reorganized Aurora LLC Agreement.

     

    1.154.       Voting
Deadline:  The deadline established by the Bankruptcy Court as
the last date to timely submit a Ballot for voting to accept or to reject the
Plan.

     

    1.155.       Working Capital
Loans:  That certain secured revolving working capital facility
component, in an initial amount of up to $5 million, to be provided under the
Exit Credit Facility, and to be guaranteed by the Exit Credit Facility Guarantor
pursuant to the Exit Credit Facility Guarantee.

     

    1.156.       Working Capital Loans
Notes:  The notes to be issued by Reorganized Aurora under the
Exit Credit Facility to the Exit Credit Facility Lenders in connection with, and
evidencing obligations under, the Working Capital Loans.

     

    
      ARTICLE
II

    

     

    
      CLASSIFICATION
OF CLAIMS AND INTERESTS

    

     

    2.1.           In
accordance with Bankruptcy Code § 1123(a)(1), Administrative Claims, DIP
Facility Claims, and Tax Claims have not been classified and are excluded from
the following Classes.  Article III of the Plan describes the
treatment of Administrative Claims, DIP Facility Claims, and Tax
Claims.  For the purposes of the Plan, Holders of Claims against, or
Interests in, the Debtors are grouped as follows in accordance with Bankruptcy
Code § 1122(a):

     

    2.2.           Class 1 — Priority
Claims.  Class 1 consists of all Priority Claims against either
of the Debtors.  Class 1 Claims shall be treated in the manner set
forth in Section 4.2 hereof.

     

    2.3.           Class 2 — Secured Claims Against One
or Both of the Debtors.

     

      
(a)           Class 2A – First Lien Loan
Claims.  Class 2A consists of all First Lien Loan
Claims.  Class 2A Claims shall be treated in the manner set forth in
Section 5.2 hereof.

     

     
(b)           Class 2B – Second Lien Loan
Claims.  Class 2B consists of all Second Lien Loan
Claims.  Class 2B Claims shall be treated in the manner set forth in
Section 5.3 hereof.

     

      
(c)           Class 2C — Other Secured Claims
Against Aurora or HPPC.  Class 2C consists of all Secured
Claims against Aurora and/or HPPC that are not otherwise classified in this
Article II.  Accordingly, Class 2C Claims do not include the NW Bank
Secured Claims or any Claims under, respectively, the First Lien Loan, the First
Lien Loan Guarantees, the Second Lien Loan, the Second Lien Loan Guarantees, the
DIP Facility, or the DIP Facility Guarantee, but do include any secured capital
leases of Aurora and/or HPPC.  Class 2C Claims shall be treated in the
manner set forth in Section 4.3 hereof.

    
      
         

      

      
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(d)           Class 2D — NW Bank Secured
Claims.  Class 2D consists of all NW Bank Secured
Claims.  Class 2D Claims shall be treated in the manner set forth in
Section 4.4 hereof.

     

    2.4.           Class 3 – General Unsecured Claims
Against Aurora or HPPC.

     

      
(a)           Class 3A — General Unsecured Claims
Against Aurora.  Class 3A
consists of all General Unsecured Claims against Aurora that are not otherwise
classified pursuant to this Article II.  Class 3A Claims shall be
treated in the manner set forth in Section 5.4 hereof.

     

     
(b)           Class 3B — General Unsecured
Claims Against HPPC.  Class 3B consists of all General Unsecured
Claims against HPPC that are not otherwise classified pursuant to this Article
II.  Class 3B Claims shall be treated in the manner set forth in
Section 5.5 hereof.

     

    2.5.           Class 4 – Old Aurora Common Stock
Interests.  Class 4 consists of all Interests arising under or
in connection with the Old Aurora Common Stock.  Class 4 Interests
shall be treated in the manner set forth in Section 5.6 hereof.

     

    2.6.           Class 5 — Intercompany
Claims.  Class 5 consists of all Intercompany
Claims.  Class 5 Claims shall be treated in the manner set forth in
Section 5.7 hereof.

     

    2.7.           Class 6 — Old HPPC
Interests.  Class 6 consists of all Old HPPC
Interests.  Class 6 Interests shall be treated in the manner set forth
in Section 5.8 hereof.

     

    
      ARTICLE
III

    

     

    
      TREATMENT
OF ADMINISTRATIVE

    

    
      CLAIMS,
DIP FACILITY CLAIMS, AND TAX CLAIMS

    

     

    3.1.           Administrative
Claims.  Each Holder of an Allowed Administrative Claim, other
than a Holder of an Allowed DIP Facility Claim (which Claims shall be treated
and satisfied in the manner set forth in Section 3.2 hereof), shall receive, in
full satisfaction, settlement, release, and discharge of, and in exchange for,
such Allowed Claim, Cash equal to the amount of such Allowed Claim on the later
of (i) the Initial Distribution Date and (ii) the date that is 10 days after the
Allowance Date, except to the extent that such Holder has agreed to a less
favorable treatment of such Allowed Claim; provided, however, that Allowed
Administrative Claims representing obligations incurred in the ordinary course
of the Debtors’ business and assumed by the Debtors shall be paid or performed
in accordance with the terms and conditions of the particular transactions and
any agreements related thereto.

     

    3.2.           DIP Facility
Claims:  DIP Facility Claims shall be Allowed Claims under the
Plan in the aggregate amount equal to all obligations under (i) the DIP Facility
(as against Aurora) and/or (ii) the DIP Facility Guarantee (as against the DIP
Facility Guarantor), as applicable, outstanding as of the Effective Date, as
agreed to by the DIP Facility Lenders and the Debtors, or in the event of a
dispute regarding such amount, as such amount has been determined by a Final
Order of the Bankruptcy Court.  On the Effective Date (or as soon
thereafter as is practicable), (a) each Holder of an Allowed DIP Facility Claim
shall receive, in full satisfaction, settlement, release, and discharge of, and
in exchange for, such Allowed Claim, Cash in an amount equal to such Holder’s
Pro Rata share of the aggregate amount of the outstanding Allowed DIP Facility
Claims, which payments shall collectively be in the amount equal to the
aggregate outstanding amount of the Allowed DIP Facility Claims, and (b) either
(i) the DIP Facility Lenders shall receive cancellation without draw of all
outstanding letters of credit issued under the DIP Facility or (ii) such
outstanding letters of credit shall be replaced with, to the extent practicable,
or supported by, new letters of credit to be issued under the Exit Credit
Facility.

    
      
         

      

      
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    3.3.           Tax Claims.  Each
Holder of an Allowed Tax Claim shall receive, in full satisfaction, settlement,
release, and discharge of, and in exchange for, such Allowed Claim, at the
election of the applicable Debtor, either (i) Cash equal to the amount of such
Allowed Claim on the later of (a) the Initial Distribution Date and (b) the date
that is 30 days after the Allowance Date, except to the extent such Holder has
agreed to a less favorable treatment of such Allowed Claim, or (ii) in
accordance with Bankruptcy Code § 1129(a)(9)(C), deferred Cash payments (a) of a
value, as of the Effective Date, equal to the amount of such Allowed Tax Claim,
(b) over a period not exceeding five years after the Petition Date, and (c) in a
manner not less favorable than the treatment of the most favored nonpriority
unsecured Claim provided for by the Plan, except to the extent such Holder has
agreed to a less favorable treatment of such Allowed Claim.

     

    
      ARTICLE
IV

    

     

    
      TREATMENT
OF CLASSES THAT ARE NOT IMPAIRED UNDER THE PLAN

    

     

    4.1.           Unimpaired
Classes.  Classes 1, 2C, and 2D are unimpaired under the
Plan.  Therefore, pursuant to Bankruptcy Code § 1126(f), the
Holders of Allowed Claims in such Classes are conclusively presumed to have
accepted the Plan and are not entitled to vote thereon.

     

    4.2.           Class 1 — Priority
Claims.  If not otherwise paid in full pursuant to a Final
Order of the Bankruptcy Court prior to the Confirmation Date, and except to the
extent such Holder has agreed to a less favorable treatment of such Allowed
Claim, each Holder of an Allowed Class 1 Claim shall receive, in full
satisfaction, settlement, release, and discharge of, and in exchange for, such
Allowed Claim, Cash equal to the amount of such Allowed Claim on the latest of
(i) the Initial Distribution Date, (ii) the date that is 30 days after the
Allowance Date of such Claim, and (iii) the date when such Allowed Claim becomes
due and payable according to its terms and conditions.

     

    4.3.           Class 2C — Other Secured Claims
Against Aurora or HPPC.  In full satisfaction, settlement,
release, and discharge of, and in exchange for, each Allowed Class 2C Claim, and
except to the extent such Holder has agreed to a less favorable treatment of
such Allowed Claim, at the election of the applicable Debtor, such Debtor shall
either:  (a) pay the amount of such Allowed Class 2C Claim against it
in full, in Cash, on the later of the Effective Date or the Allowance Date of
such Claim; (b) return the underlying collateral to the Holder of such Allowed
Class 2C Claim; (c) Reinstate such Allowed Class 2C Claim in accordance with the
provisions of Bankruptcy Code § 1124(2); (d) pay such Allowed Class 2C Claim in
full in the ordinary course; or (e) treat such Allowed Class 2C Claim in a
manner otherwise agreed to by the Holder thereof.

    
      
         

      

      
        -19-

        
          

        

      

      
         

      

    

     

    4.4.         Class 2D — NW Bank Secured
Claims.

     

    (a)  The NW Bank Note Secured
Claim:  The NW Bank Note Secured Claim shall be deemed an
Allowed Claim in an amount equal to the value of the NW Bank Note Collateral as
of the Effective Date, as determined pursuant to Bankruptcy Code §
506(a).  In full satisfaction, settlement, release, and discharge of,
and in exchange for, the NW Bank Note Secured Claim, on the Effective Date, or
as soon thereafter as is practicable, Aurora shall transfer ownership of the NW
Bank Note Collateral to the Holder of the NW Bank Secured Claim.  On
the Effective Date, the NW Bank Note and all outstanding notes and Liens issued
in connection with the NW Bank Note shall be cancelled and shall be deemed
terminated and of no force and effect.  The sum total of the value of
the distributions to be made to the Holder of the Allowed NW Bank Note Secured
Claim, as of the Effective Date, shall not exceed the amount of Allowed NW Bank
Note Secured Claims.

     

    (b)  The NW Bank LCs
Claim:  The NW Bank LCs Claim shall be deemed an Allowed Claim
in an amount equal to the value of the NW Bank LCs Collateral as of the
Effective Date, as determined pursuant to Bankruptcy Code §
506(a).  To the extent the Debtors or any other third party with a
right to do so has not fully drawn down upon the NW Bank LCs as of the Effective
Date, the Debtors shall, in full satisfaction, settlement, release, and
discharge of, and in exchange for the Allowed NW Bank LCs Claim, release from
the NW Bank LCs Collateral to NW Bank the amount, if any, equal to what has been
so drawn down prior to the Effective Date, and at the election of the Debtors,
either (1) the NW Bank LCs shall remain in full force and effect on and after
the Effective Date according to their terms for the full remaining undrawn
amount thereof, and NW Bank shall retain as collateral therefor the remaining NW
Bank LCs Collateral, or (2) the NW Bank LCs shall be terminated and NW Bank
shall receive cancellation without draw of the remaining undrawn NW Bank LCs, in
which case NW Bank shall have no further rights, claims, or interests in, any of
the remaining NW Bank LCs Collateral, which shall in turn be released to the
Debtors free and clear of any Liens, claims, or interests of NW
Bank.  To the extent the Debtors or any other third party with a right
to do so has fully drawn down upon the NW Bank LCs as of the Effective Date, in
full satisfaction, settlement, release, and discharge of, and in exchange for
the Allowed NW Bank LCs Claim, the Debtors shall release from the NW Bank LCs
Collateral to NW Bank an amount equal to what has been so drawn down prior to
the Effective Date, and the NW Bank LCs shall be terminated, NW Bank shall have
no further rights, claims, or interests in, any of the remaining NW Bank LCs
Collateral or other Claims against the Debtors or the Reorganized Debtors with
respect thereto, and all outstanding notes and Liens issued in connection with
the NW Bank LCs shall be cancelled and shall be deemed terminated and of no
force and effect.  The sum total of the value of the distributions to
be made to the Holder of the Allowed NW Bank LCs Claim, as of the Effective
Date, shall not exceed the amount of Allowed NW Bank LCs Claims.

     

    4.5.         Special Provision Regarding
Unimpaired Claims.  Except as may otherwise be provided in the
Plan, the Confirmation Order, any other order of the Bankruptcy Court, or any
Plan Document, nothing shall affect the Debtors’ or the Reorganized Debtors’ (as
applicable) rights and defenses, both legal and equitable, with respect to any
Claim that is not impaired under this Plan, including, but not limited to, all
rights with respect to legal and equitable defenses to, and/or setoffs or
recoupments against, such Claim.

    
      
        
        

         

      

      
        -20-

        
          

        

      

      
         

      

    

    
      ARTICLE
V

    

     

    
      TREATMENT
OF CLASSES THAT ARE IMPAIRED UNDER THE PLAN

    

     

    5.1.         Impaired
Classes.  Classes 2A, 2B, 3A, 3B, 4, 5, and 6 are impaired
under the Plan.  Holders of Allowed Claims in Classes 2A, 2B, 3A, or
3B are entitled to vote to accept or reject the Plan.  Holders of
Claims or Interests (as applicable) in Classes 4, 5, and 6 shall receive no
distribution under the Plan (other than as set forth in Section 5.7 hereof with
respect to Class 5 Intercompany Claims); therefore, the Holders of Claims or
Interests (as applicable) in those Classes are deemed to have rejected the Plan
and, pursuant to Bankruptcy Code § 1126(g), are not entitled to vote to accept
or reject the Plan.

     

    5.2.         Class 2A — First Lien Loan
Claims.

     

    (a) The
First Lien Loan Claims shall be deemed Allowed Claims in the aggregate amount of
accrued and unpaid principal, interest, fees, expenses, and other obligations
under the First Lien Loan up to the Effective Date (subject to Bankruptcy Code §
506(b)).

     

    (b) On
the Effective Date, or as soon thereafter as is practicable, each Holder of an
Allowed Class 2A Claim as of the Distribution Record Date, or an affiliate of
such Holder designated by such Holder prior to the Effective Date, shall receive
(i) as reinstatement and modification of a portion of such Allowed Claim against
each of the Debtors, such Holder’s Pro Rata share of the New Secured Notes, and
(ii) in full satisfaction, settlement, release, and discharge of, and in
exchange, for the remaining portion of such Allowed Claim against each of the
Debtors, such Holder’s Pro Rata share of [32] million shares of the New Aurora
Preferred Stock.  Such shares of New Aurora Preferred Stock issued on
such date shall, in the aggregate, represent, as of such date, 100% of the
outstanding shares of New Aurora Preferred Stock, and shall not be subject to
any dilution or further issuance of any additional shares of New Aurora
Preferred Stock except as expressly provided under Plan Section
6.15(f).  For purposes of this Section 5.2(b), "affiliate" means, with
respect to a Holder, a subsidiary of a Holder or any other entity that is
directly or indirectly owned by the same parent entity that directly or
indirectly owns the Holder.

     

    (c)  The
Allowed First Lien Loan Claims shall be considered Allowed Claims against (a)
Aurora (in its capacity as the borrower under the First Lien Loan) and (b) HPPC,
in its capacity as a First Lien Loan Guarantor.  The sum total of the
value of the distributions to be made to the Holders of Allowed First Lien Loan
Claims, as of the Effective Date, shall not exceed the aggregate amount of
Allowed First Lien Loan Claims.

     

    (d)  Pursuant
to Section 4.01 of the First Lien Loan, and as set forth further in Plan
Sections 6.6(d), 6.13, 6.15, and 6.20, the total distributions of the New
Secured Notes and the [32] million shares of New Aurora Preferred Stock to be
provided for under this Plan Section 5.2 on account of Allowed First Lien Loan
Claims, shall be made by the Reorganized Debtors on the Effective Date to the
First Lien Loan Administrative Agent for subsequent distribution on a Pro Rata
basis to the Holders of Allowed First Lien Loan Claims (or such Holder’s
affiliate, as provided for in Plan Section 5.2(b)) as of the Distribution Record
Date.

    
      
        
        

         

      

      
        -21-

        
          

        

      

      
         

      

    

    (e)  On
the Effective Date, or as soon thereafter as practicable, upon full satisfaction
of the requirements set forth in Plan Section 5.2(b), (i) $20 million of the
Allowed Class 2A Claims shall be reinstated and modified as a funded debt
tranche in the form of the Tranche A Notes under the Exit Credit Facility, (ii)
another $20 million of the Allowed Class 2A Claims shall be reinstated and
modified as another funded debt tranche in the form of the Tranche B Notes under
the Exit Credit Facility, and (iii) the remaining portion of the Class 2A Claims
shall be exchanged with Reorganized Aurora for the New Aurora Preferred Stock
and subsequently be cancelled by Reorganized Aurora.

     

    5.3.         Class 2B — Second Lien Loan
Claims.

     

    (a)  The
Second Lien Loan Claims shall be deemed Allowed Claims in the aggregate amount
of accrued and unpaid principal, interest, fees, expenses, and other obligations
under the Second Lien Loan up to the Effective Date (subject to Bankruptcy Code
§ 506(b)).

     

    (b) 
On the Effective Date, or as soon thereafter as is practicable, each Holder of
an Allowed Class 2B Claim as of the Distribution Record Date, or an affiliate of
such Holder designated by such Holder prior to the Effective Date, shall receive
in full satisfaction, settlement, release, and discharge of, and in exchange for
such Allowed Claim against each of the Debtors, such Holder’s Pro Rata share of
[56] million shares of New Aurora Class A Common Stock.  Such shares
of New Aurora Class A Common Stock issued on such date shall, in the aggregate,
represent, as of the Effective Date, 100% of the outstanding shares of New
Aurora Class A Common Stock, subject to dilution on a pari passu basis with all
other Holders of shares of New Aurora Class A Common Stock  upon the
issuance of shares of New Aurora Class A Common Stock  upon the
exercise of the New Warrants.  For purposes of this Section 5.3(b),
"affiliate" means, with respect to a Holder, a subsidiary of a Holder or any
other entity that is directly or indirectly owned by the same parent entity that
directly or indirectly owns the Holder.

     

    (c)  The
Allowed Second Lien Loan Claims shall be considered Allowed Claims against (a)
Aurora (in its capacity as the borrower under the Second Lien Loan) and (b)
HPPC, in its capacity as a Second Lien Loan Guarantor.  The sum total
of the value of the distributions to be made to the Holders of Allowed Second
Lien Loan Claims, as of the Effective Date, shall not exceed the aggregate
amount of Allowed Second Lien Loan Claims.

     

    (d)  Pursuant
to Section 4.01 of the Second Lien Loan, and as set forth further in Plan
Sections 6.6(d) and 6.14, the total distribution of the [56] million shares of
New Aurora Class A Common Stock  to be provided for under this Plan
Section 5.3 on account of Allowed Second Lien Loan Claims shall be made by the
Reorganized Debtors on the Effective Date to the Second Lien Loan Administrative
Agent for subsequent distribution on a Pro Rata basis to the Holders of Allowed
Second Lien Loan Claims (or such Holder’s affiliate, as provided for in Plan
Section 5.3)(a))  as of the Distribution Record Date.

     

    (e)  Upon
full satisfaction of the requirements set forth in Plan Section 5.3(b), all
Class 2B Claims and all outstanding notes and Liens issued in connection with
the Second Lien Loan and the Second Lien Loan Guarantees (if any) shall be
cancelled and shall be deemed terminated and of no force and
effect.

    
      
        
        

         

      

      
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    5.4.           Class 3A — General Unsecured Claims
Against Aurora.  If not otherwise paid in full pursuant to a
Final Order of the Bankruptcy Court prior to the Confirmation Date, and except
to the extent such Holder has agreed to a less favorable treatment of such
Allowed Claim, each Holder of an Allowed Class 3A Claim shall receive, in full
satisfaction, settlement, release, and discharge of, and in exchange for, such
Allowed Claim, such Holder’s Pro Rata Share of $150,000 on the latest of (i) the
Initial Distribution Date, (ii) the date that is 30 days after the Allowance
Date of such Claim, and (iii) the date when such Allowed Claim becomes due and
payable according to its terms and conditions.  On the Effective Date,
all Class 3A Claims shall be cancelled and be deemed terminated and of no force
and effect.

     

    5.5.           Class 3B — General Unsecured Claims
Against HPPC.  If not otherwise paid in full pursuant to a
Final Order of the Bankruptcy Court prior to the Confirmation Date, and except
to the extent such Holder has agreed to a less favorable treatment of such
Allowed Claim, each Holder of an Allowed Class 3B Claim shall receive, in full
satisfaction, settlement, release, and discharge of, and in exchange for, such
Allowed Claim, such Holder’s Pro Rata Share of $50,000 on the latest of (i) the
Initial Distribution Date, (ii) the date that is 30 days after the Allowance
Date of such Claim, and (iii) the date when such Allowed Claim becomes due and
payable according to its terms and conditions; provided, however, that no
Holder of a Class 3B Claim shall be entitled to receive a distribution in Cash
that exceeds 100% of the Allowed amount of its Claim.  On the
Effective Date, all Class 3B Claims shall be cancelled and be deemed terminated
and of no force and effect.

     

    5.6.           Class 4 — Old Aurora Stock
Interests.  On the Effective Date, all outstanding shares of
Old Aurora Common Stock and all other Old Stock of Aurora shall be cancelled and
shall be deemed terminated and of no force and effect.  In addition,
without limiting the generality of the foregoing, any and all options or rights
to exercise warrants or options or to otherwise acquire any shares of Old Aurora
Common Stock or any other Interest in Aurora, under any of the Existing Stock
Option Plans or otherwise, shall be cancelled and be deemed terminated and of no
force and effect.  No distribution of any kind shall be made on
account of the Old Aurora Common Stock or any other Old Stock of Aurora under
the Plan.

     

    5.7.           Class 5 — Intercompany
Claims.  Class 5 Claims shall be Allowed in the amounts as
reflected on the Debtors’ respective books and records; provided, however, that all
Intercompany Claims shall be reviewed by the Debtors and adjusted, continued, or
discharged, as the Debtors determine, as appropriate (by, among other things,
releasing such claims, contributing them to capital, issuing a dividend, or
leaving them unimpaired), taking into account, among other things, the
distribution of consideration under the Plan and the economic condition of the
Reorganized Debtors, among other things.  The Holders of Intercompany
Claims shall not be entitled to participate in any of the distributions on
account of Claims under Sections 5.2, 5.3, 5.4, or 5.5 hereof and shall only be
entitled to the treatment provided in this Section 5.7.

     

    5.8.           Class 6 — Old HPPC
Interests.  On the Effective Date, all outstanding Old HPPC
Interests or any other Old Stock of HPPC shall be cancelled and shall be deemed
terminated and of no force and effect.  In addition, without limiting
the generality of the foregoing, any and all options or rights to exercise
warrants or options or to otherwise acquire any Old HPPC Interests or any other
Interest in HPPC shall be cancelled and be deemed terminated and of no force and
effect.  No distribution of any kind shall be made on account of the
Old HPPC Interests under the Plan to the Holders of such
Interests.  Notwithstanding the foregoing, 100% of the new equity in
Reorganized HPPC shall be issued to Reorganized Aurora.

    
      
        
        

         

      

      
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    5.9.         Special Provision Regarding Impaired
Claims.  Except as may otherwise be provided in the Plan
(including, without limitation, Plan Section 6.27(a)), the Confirmation Order,
any other order of the Bankruptcy Court, or any Plan Document, nothing shall
affect the Debtors’ or the Reorganized Debtors’ (as applicable) rights and
defenses, both legal and equitable, with respect to any Claims that are impaired
under this Plan, including, but not limited to, all rights with respect to legal
and equitable defenses to, and/or setoffs or recoupments against, such
Claims.

     

    
      ARTICLE
VI

    

     

    
      MEANS
FOR IMPLEMENTATION OF THE PLAN

    

     

    6.1.         Boards of Directors or Managers of
the Reorganized Debtors.

     

    (a)  As
of the Effective Date, Reorganized Aurora shall initially have a seven-person
Board of Directors consisting of the following designations:  (i) five
directors to be designated by the Second Lien Loan Administrative Agent on
behalf of the Second Lien Loan Lenders, and (ii) two directors to be designated
by the First Lien Loan Administrative Agent, on behalf of the First Lien Loan
Lenders.  The names of the initial anticipated members of the Board of
Directors of Reorganized Aurora shall be disclosed to the Bankruptcy Court
pursuant to Bankruptcy Code § 1129(a)(5) on or before the Confirmation Date,
unless some later date is permitted by the Bankruptcy
Court.  Reorganized Aurora shall be the initial manager of Reorganized
HPPC.

     

    (b)  Upon
the occurrence of the Triggering Event, the holders of the New Aurora Preferred
Stock shall have the right to thereafter designate five directors to the Board
of Directors of Reorganized Aurora, and the number of directors designated by
the holders of the New Aurora Class A Common Stock  shall be reduced
to two.

     

    (c)  Subject
to the voting rights to be afforded to the holders of the New Aurora Preferred
Stock, the boards of directors of the Reorganized Debtors shall have full power
and authority to manage the respective businesses and affairs of the Reorganized
Debtors.

     

    6.2.         Ownership of Reorganized HPPC and
non-Debtor Subsidiaries or Affiliates.

     

    (a) On
the Effective Date, 100% of the new membership interests in Reorganized HPPC
shall be issued to Reorganized Aurora.

     

    (b) In
addition (other than with respect to any stock interests cancelled, sold, or
otherwise transferred by either of the Debtors on or prior to the Effective
Date), on the Effective Date, each Reorganized Debtor shall own and retain its
equity interests in any non-Debtor subsidiaries or Affiliates (to the extent
that any such non-Debtor subsidiary or Affiliate has not been dissolved, sold,
or otherwise transferred under applicable law prior to the Effective Date) to
the same extent that the applicable Debtor owned an equity interest in such
non-Debtor subsidiary or Affiliate prior to the Effective
Date.  Without limiting the generality of the foregoing, on the
Effective Date, Reorganized Aurora shall directly or indirectly own, to the same
extent Aurora did as of the Effective Date, interests in Aurora Indiana, LLC;
Aurora Kentucky, LLC; AOG Michigan, LLC; Aurora Operating, LLC; Celebration
Mining Company; Circle Oil, LLC; and Indiana Royalty Trustory, LLC (to the
extent that any such non-Debtor subsidiary or Affiliate has not been dissolved,
sold, or otherwise transferred under applicable law prior to the Effective
Date).

    
      
        
        

         

      

      
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    6.3.         Issuance of New Securities; Execution and
Delivery of Plan Documents.

     

    (a)   On
the Effective Date, Reorganized Aurora shall issue the New Aurora Class A Common
Stock and the New Aurora Preferred Stock, and the Reorganized Debtors shall
issue notes (including, without limitation, the New Secured Notes and the
Working Capital Loans Notes) and may issue the New Warrants (defined below in
Plan Section 6.13(e)), in each case, in connection with the Exit Credit
Facility, the Exit Credit Facility Guarantee, or otherwise in connection with
any other Plan Document.  In addition, Reorganized HPPC shall issue
100% of its membership interests to Reorganized Aurora.  The issuance
of (i) the New Aurora Class A Common Stock (including, but not limited to, the
issuance of any shares of stock issued upon the exercise of the New Warrants),
the New Aurora Preferred Stock by Reorganized Aurora (including, pursuant to
Sections 5.2, 5.3, 6.14, 6.15, and 6.20 hereof), and of the capital stock of
Reorganized HPPC, pursuant to this Plan, or (ii) the New Aurora Class B Common
Stock and any and all notes (including the New Secured Notes and the Working
Capital Loans Notes) or warrants (including the New Warrants) under or in
connection with the Exit Credit Facility or the Exit Credit Facility Guarantee,
or otherwise by either of the Reorganized Debtors, shall all be authorized
hereby without the need for any further corporate action or court
order.

     

    (b)   The
execution and delivery by the Debtor(s) or the Reorganized Debtor(s) party
thereto (as applicable) of all Plan Documents (including, without limitation,
the Exit Credit Facility, the New Secured Notes, the Working Capital Loans
Notes, the Exit Credit Facility Guarantee, any document memorializing the
Management and Director Equity Plan or the terms and conditions of the New
Aurora Class A Common Stock, the New Aurora Class B Common Stock, the New Aurora
Preferred Stock, the New Warrants, the Registration Rights Agreement, the Voting
Agreement, and/or any other agreement entered into, or instrument, security
interest, guarantee, or note issued in connection with any of the foregoing, any
other Plan Document, and any other document reasonably necessary or appropriate
to effectuate the events contemplated herein and therein), is hereby authorized
without the need for any further corporate action or court order.  All
such Plan Documents shall become effective and binding upon the parties thereto
simultaneously in accordance with their respective terms and conditions as of
the Effective Date.

    
      
        
        

         

      

      
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    6.4.         Corporate Governance and Corporate
Action.

     

    (a)  The Amended and Restated Articles of
Incorporation, the Amended and Restated By-Laws, and the Amended and Restated
LLC Agreement.  On or before the Effective Date, the
Reorganized Debtors shall, as applicable (i) file the Amended and Restated
Articles of Incorporation and the Amended and Restated LLC Agreement with the
appropriate state officials in accordance with applicable state law and (ii)
adopt the Amended and Restated By-Laws.  The Amended and Restated
Articles of Incorporation shall, among other things, (i) set forth the
respective terms of the New Aurora Preferred Stock and the New Aurora Common
Stock, (ii) provide that the number of authorized shares of New Aurora Preferred
Stock shall be [45] million and of New Aurora Common Stock  shall be
[85] million, and (iii) provide that the par value of each of the New Aurora
Preferred Stock and the New Aurora Class A Common Stock  shall be
$0.01.  After the Effective Date, the Reorganized Debtors may amend
and restate their (as applicable) respective Amended and Restated Articles of
Incorporation, Amended and Restated By-Laws, Amended and Restated LLC Agreement,
and/or other constituent documents as permitted by the governing state general
corporation law or limited liability company law (as applicable) and the
applicable agreements and constituent documents (including the Amended and
Restated Articles of Incorporation, the Amended and Restated By-Laws, and the
Amended and Restated LLC Agreement) of the Reorganized Debtors.

     

    (b)  Corporate
Action.  On, before, or after the Effective Date, all actions
reasonably necessary and desirable to effectuate, implement, or
adopt:  the Exit Credit Facility; the New Secured Notes; the Working
Capital Loans Notes; the Exit Credit Facility Guarantee; the issuance of the New
Aurora Common Stock (including any shares of stock issued upon the exercise of
the New Warrants), the New Aurora Preferred Stock, and the New Warrants; the
Management and Director Equity Plan; the Registration Rights Agreement; the
Voting Agreement; the reservation of authorized but unissued shares of New
Aurora Class A Common Stock for  issuance upon the exercise of the New
Warrants or otherwise; the adoption and/or filing (as applicable) of the Amended
and Restated Articles of Incorporation, the Amended and Restated By-Laws, the
Amended and Restated LLC Agreement, or similar constituent documents; the
selection of the directors, officers, and/or managers of the respective
Reorganized Debtors; the transfer of the NW Bank Collateral to the Holder of the
Allowed Class 2D Claims (subject to the terms and conditions of the Plan,
including, without limitation Section 4.4(b) thereof); the entry into the
Management Transition Services Agreements; and all other actions or transactions
contemplated by the Plan, the Plan Documents, or such other documents, and all
actions reasonably necessary and desirable to effectuate any of the foregoing,
shall be authorized and approved in all respects hereby without the need for any
further corporate or similar action, or court order.  All matters
provided for in the Plan involving the corporate structure, assets, and/or
operations of the Debtors, the Reorganized Debtors, and any corporate or similar
action required by the Debtors or the Reorganized Debtors in connection with the
Plan or the Plan Documents shall be deemed to have occurred and shall be in
effect, without any requirement of further action by the respective security
holders, members, officers, managers, or directors of the Debtors or the
Reorganized Debtors.  After the Confirmation Date and on or prior to
the Effective Date, the appropriate members of the Boards of Directors and/or
managers, members, or officers of the Debtors and the Reorganized Debtors are
authorized and directed to issue, execute, and deliver the agreements,
documents, securities, certificates, and instruments contemplated by the Plan
and/or the Plan Documents in the name of and on behalf of the applicable
Debtor(s) or Reorganized Debtor(s) (as applicable).

     

    6.5.         Administration of the
Plan.

     

    (a) After
the Effective Date, each of the Reorganized Debtors is authorized, respectively,
to perform those responsibilities, duties, and obligations set forth herein,
including, without limitation, making distributions as provided under the Plan,
objecting to the allowance of any Claim, and prosecuting any litigation
pertaining thereto, to pay such Claims as may be later Allowed, all as
contemplated by the dispute resolution procedures contained in Plan Section
6.10, and overseeing and governing the continuing affairs and operations of the
Reorganized Debtors on a going-forward basis.

    
      
        
        

         

      

      
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    (b) The
Reorganized Debtors may retain such management, law firms, accounting firms,
experts, advisors, agents, consultants, investigators, appraisers, auctioneers,
or other professionals as they may deem reasonably necessary or appropriate,
including, without limitation, a transfer or disbursing agent, to aid them in
the performance of their responsibilities pursuant to the terms of the
Plan.  It shall not be a requirement that any such parties retained by
either of the Reorganized Debtors be a “disinterested person” (as such term is
defined in Bankruptcy Code § 101(14)), and such retained parties may
include Professionals or other Persons who had previously been active in these
Cases on behalf of any Debtor, Creditor, Interest Holder, the Creditors
Committee, or other constituency herein.  Without limiting the
generality of the foregoing, following the issuance of the New Warrants, the
Reorganized Debtors may arrange for a third party to serve as the New Warrant
agent.

     

    (c) The
Reorganized Debtors shall be responsible for filing all federal, state, and
local tax returns for the Debtors and for the Reorganized Debtors.

     

    (d) To
the extent the manner of performance is not specified herein, the Debtors and
the Reorganized Debtors shall have the discretion to carry out and perform all
other obligations or duties imposed on them by, or actions contemplated or
authorized by, the Plan, any Plan Document, or by law in any manner their
respective Boards of Directors, managers, or officers so choose.

     

    6.6.         Provisions Relating to the Existing
Old Aurora Common Stock, the NW Bank Agreements, and the Credit
Facilities.

     

    (a)  On
the Effective Date (and solely with respect to the DIP Facility, upon the
payment in full of the DIP Facility Claims with proceeds from the Working
Capital Loans or otherwise), except as expressly otherwise set forth in the Plan
(including Section 4.4(b) hereof), any and all notes issued in connection with
any of the Credit Facilities or any of the Guarantees; the Old Aurora Common
Stock; the NW Bank Agreements; any other Interests in Aurora; the Existing Stock
Option Plans; and any other options, warrants, calls, subscriptions, or other
similar rights or other agreements or commitments, contractual or otherwise,
obligating either of the Debtors to issue, transfer, or sell any shares of Old
Aurora Common Stock or any other Interest in Aurora or HPPC, shall be
automatically canceled and deemed terminated, extinguished, and of no further
force and effect without further act or action under any applicable agreement,
law, regulation, order, or rule, and the Holders thereof or the parties thereto
shall have no rights, and such instruments or agreements shall evidence no
rights except the right to receive the distributions (if any) to be made to the
Holders of such instruments under this Plan.

    
      
        
        

         

      

      
        -27-

        
          

        

      

      
         

      

    

    (b) 
No Holder of any notes issued in connection with any of the Credit Facilities or
any of the Guarantees shall be entitled to any distribution under the Plan
unless and until such Holder has first surrendered or caused to be surrendered
any such notes or Guarantees to the applicable Administrative Agent, which in
turn shall surrender any and all such notes or Guarantees to the Debtors or the
Reorganized Debtors, or, in the event that such original notes or Guarantees
have been lost, destroyed, stolen, or mutilated, has first executed and
delivered an affidavit of loss and indemnity with respect thereto in a form
customarily utilized for such purposes that is reasonably satisfactory to the
Debtors or the Reorganized Debtors, and, in the event the Debtors or the
Reorganized Debtors so request, has first furnished a bond in form and substance
(including, without limitation, amount) reasonably satisfactory to the Debtors
or the Reorganized Debtors (as applicable).  If a Holder has actual
possession of any note or Guarantee issued in connection with any Credit
Facility or any of the Guarantees, then such Holder must physically surrender or
cause to be surrendered its note(s) or Guarantee(s) to the applicable
Administrative Agent for subsequent distribution to the Debtors or the
Reorganized Debtors (as applicable), in accordance with the procedures required
by the Debtors.  As soon as practicable after such surrender of the
applicable note or Guarantee to the Debtors (or the Reorganized Debtors), or
such delivery of an affidavit of loss and indemnity and such furnishing of a
bond as provided in this Section 6.6(b), the Debtors or the Reorganized Debtors
(as applicable) shall make the distributions provided in the Plan with respect
to the applicable Allowed Claim(s) (as and to the extent as set forth in the
Plan).  Promptly upon the surrender of such instruments, the Debtors
or the Reorganized Debtors (as applicable) shall cancel any and all notes issued
in connection with any of the Credit Facilities or any of the Guarantees (if
any).

     

    (c)  Except
as otherwise set forth in Section 4.4(b) hereof, no Holder of any notes issued
in connection with any of the NW Bank Agreements shall be entitled to any
distribution under the Plan unless and until such Holder has first surrendered
or caused to be surrendered any such notes to the Debtors or the Reorganized
Debtors, or, in the event that such original notes have been lost, destroyed,
stolen, or mutilated, has first executed and delivered an affidavit of loss and
indemnity with respect thereto in a form customarily utilized for such purposes
that is reasonably satisfactory to the Debtors or the Reorganized Debtors, and,
in the event the Debtors so request, has first furnished a bond in form and
substance (including, without limitation, amount) reasonably satisfactory to the
Debtors.  If a Holder has actual possession of any note issued in
connection with any NW Bank Agreement, then such Holder must physically
surrender or cause to be surrendered its note(s) to the Debtors or the
Reorganized Debtors (as applicable), in accordance with the procedures required
by the Debtors.  As soon as practicable after such surrender of the
applicable note to the Debtors (or the Reorganized Debtors), or such delivery of
an affidavit of loss and indemnity and such furnishing of a bond as provided in
this Section 6.6(c), the Debtors or the Reorganized Debtors (as applicable)
shall make the distributions provided in the Plan with respect to the applicable
Allowed Claim(s) (as and to the extent as set forth in the
Plan).  Promptly upon the surrender of such instruments, the Debtors
or the Reorganized Debtors (as applicable) shall cancel any and all notes issued
in connection with any of the NW Bank Agreements.

    
      
        
        

         

      

      
        -28-

        
          

        

      

      
         

      

    

    (d)  All
distributions under the Plan on account of the Allowed First Lien Loan Claims
shall initially be distributed to the First Lien Loan Administrative Agent for
further distribution to the Holders of Allowed First Lien Loan Claims as of the
Distribution Record Date, pursuant to the terms and subject to the conditions of
the First Lien Loan and the Plan.  Upon the delivery of the foregoing
distributions to the First Lien Loan Administrative Agent, the Debtors and the
Reorganized Debtors shall be released of all liability with respect to their
obligation to make such delivery.  The First Lien Loan Administrative
Agent shall thereafter take all steps reasonably necessary and appropriate to
effectuate such further distribution thereof to the Holders of the Allowed First
Lien Loan Claims.  Similarly, all distributions under the Plan on
account of the Allowed Second Lien Loan Claims shall initially be distributed to
the Second Lien Loan Administrative Agent for further distribution to the
Holders of Allowed Second Lien Loan Claims as of the Distribution Record Date,
pursuant to the terms and subject to the conditions of the Second Lien Loan and
the Plan.  Upon the delivery of the foregoing distributions to the
Second Lien Loan Administrative Agent, the Debtors and the Reorganized Debtors
shall be released of all liability with respect to their obligation to make such
delivery.  The Second Lien Loan Administrative Agent shall thereafter
take all steps reasonably necessary and appropriate to effectuate such further
distribution thereof to the Holders of the Allowed Second Lien Loan
Claims.  Also, all distributions under the Plan on account of the
Allowed DIP Facility Claims shall initially be distributed to the DIP Facility
Administrative Agent, for further distribution to the Holders of Allowed DIP
Facility Claims as of the Distribution Record Date, pursuant to the terms and
subject to the conditions of the DIP Facility and the Plan.  Upon the
delivery of the foregoing distributions to the DIP Facility Administrative
Agent, the Debtors and the Reorganized Debtors shall be released of all
liability with respect to their obligation to make such delivery.  The
DIP Facility Administrative Agent shall thereafter take all steps reasonably
necessary and appropriate to effectuate such further distribution thereof to the
Holders of the Allowed DIP Facility Claims.  On the Effective Date
(and, solely with respect to the DIP Facility, upon the payment in full of the
DIP Facility Claims with proceeds from the Working Capital Loans or otherwise),
all of the obligations and Liens under the respective Credit Facilities other
than those that are being expressly reinstated and modified in the manner set
forth in Section 5.2 hereof shall be deemed terminated, canceled, and
extinguished (all without any further action by any Person or the Bankruptcy
Court) and shall have no further legal effect other than as evidence of any
right to receive distributions under the Plan as set forth in Sections 3.2, 5.2,
and 5.3 hereof; provided, however, that the respective Credit Facilities shall
continue in effect and shall not be deemed canceled on the books and records of
the applicable Administrative Agents, solely for the purposes of and to the
extent necessary to (i) facilitate the respective distributions to the First
Lien Loan Lenders, the Second Lien Loan Lenders, or the DIP Facility Lenders as
of the Distribution Record Date, pursuant to the Plan and (ii) to enable the
respective Administrative Agents to perform any and all current and future
administrative functions.

     

    (e) 
All distributions under the Plan on account of the Allowed NW Bank Claims shall
be distributed to NW Bank as the Holder of the Allowed NW Bank Claims as of the
Distribution Record Date, pursuant to the terms and subject to the conditions of
the NW Bank Agreements and the Plan.  Upon the delivery of the
foregoing distributions to NW Bank, the Debtors and the Reorganized Debtors
shall be released of all liability with respect to their obligation to make such
delivery.  Subject to the other terms and conditions of the Plan,
including in Section 4.4(b) in the event Aurora elects to keep the NW Bank LCs
in place after the Effective Date, on the Effective Date, the obligations under
the respective NW Bank Agreements shall be deemed terminated, canceled, and
extinguished (all without any further action by any Person or the Bankruptcy
Court) and shall have no further legal effect other than as evidence of any
right to receive distributions under the Plan as set forth in Sections 4.4 and
5.4 hereof.

     

    (f)   On
the Effective Date, the Old Aurora Common Stock and the Old HPPC Interests shall
be deemed terminated, canceled, and extinguished (all without any further action
by any Person or the Bankruptcy Court) and shall have no further legal
effect.

    
      
        
        

         

      

      
        -29-

        
          

        

      

      
         

      

    

    (g)  The
Debtors shall pay the reasonable and customary fees, charges, and expenses
incurred by the respective Administrative Agents (including, without limitation,
the reasonable and customary fees, charges and expenses of each such
Administrative Agents’ counsel, financial advisor, and any other agent or
consultant) in the performance of any function associated with the Credit
Facilities or the Plan (as applicable) during the period from and including the
Petition Date until such time as all distributions provided for under the Plan
to the Holders of Allowed First Lien Loan Claims, Allowed Second Lien Loan
Claims, and Allowed DIP Facility Claims (as applicable) have been
made.

     

    6.7.         Delivery of Distributions; Unclaimed
Property; Undeliverable Distributions.

     

    
      (a)  Except
as may otherwise be provided in Sections 3.2, 5.2, 5.3, 6.7, and 6.8 hereof, any
distributions to Holders of Allowed Claims under this Plan shall be
made:  (i) at the addresses set forth either on the Schedules or as
otherwise set forth on the Debtors’ respective books and records, or on the
respective Proofs of Claim filed by such Holders in the event that the addresses
indicated thereon differ from those set forth on the Schedules or as otherwise
set forth on the Debtors’ respective books and records or upon the applicable
securities depositories, clearing systems, or broker, bank, or custodial
participants in the clearing system (as applicable); or (ii) at the addresses
set forth in any written notices of address change delivered to the Debtors or
the Reorganized Debtors (if after the Effective Date) after the date of any
related Proof of Claim.

      

    

    
      (b)  Except
as otherwise set forth in Plan Section 4.4(b), in accordance with Bankruptcy
Code § 1143, any Holder of any note issued in connection with any of the Credit
Facilities, the NW Bank Agreements, or any of the Guarantees that fails to
surrender the applicable note or deliver an affidavit of loss and indemnity as
provided herein by 5:00 p.m. prevailing Eastern Time on the date that is one
year from and after the later of the Effective Date or the applicable Allowance
Date with respect to any Claims arising from or relating to such note issued in
connection with any of the Credit Facilities, the NW Bank Agreements, or the
Guarantees (if any), shall be deemed to have forfeited all rights and claims in
respect of such Claims, and shall be forever barred from receiving any
distributions under the Plan on account thereof.  In such cases, (a)
any property held for distribution by the applicable Administrative Agent on
account of Allowed Claims based on such note issued in connection with the
applicable Credit Facility or any of the Guarantees (if any), shall be made
available for redistribution, on a Pro Rata basis, to all other Holders of
Allowed Claims arising under the applicable Credit Facility that timely
surrendered the applicable note or delivered an affidavit of loss and indemnity
as provided herein, and (b) any Cash held for distribution by the Debtors on
account of Allowed NW Bank Note Deficiency Claims shall be retained by the
Reorganized Debtors for further distributions to the Holders of Allowed Class 3A
Claims in accordance with Plan Section 6.10(e).

       

    

    (c)  If
the distribution to the Holder of any Allowed Priority Claim, Allowed Class 2C
Claim, Allowed Class 3A Claim, or Allowed Class 3B Claim is returned to the
Reorganized Debtors as undeliverable, no further distribution shall be made to
such Holder unless and until the Reorganized Debtors are notified in writing of
such Holder’s then current address.  The Reorganized Debtors shall
retain any such undeliverable distributions.

     

    (d)  Any
Holder of an Allowed Claim who does not assert a claim for an undeliverable
distribution by 5:00 p.m. prevailing Eastern Time on the date that is one year
after the date by which such Holder was first entitled to such distribution
shall no longer have any claim to, or interest in, such undeliverable
distribution and shall be forever barred from receiving any distribution under
the Plan.

    
      
        
        

         

      

      
        -30-

        
          

        

      

      
         

      

    

    (e)  Nothing
contained in the Plan shall require the Debtors or the Reorganized Debtors to
attempt to locate any Holder of an Allowed Claim.

     

    6.8.         Funding of Cash Distributions under
the Plan.  Any funds necessary to make the Cash distributions
required under the Plan and/or to fund the future obligations of the Reorganized
Debtors shall (as applicable) be made from:  the Cash on hand of the
Debtors and of the Reorganized Debtors; the Working Capital Loans; and the
future operations of the Debtors and the Reorganized Debtors (as
applicable).

     

    6.9.         Manner of Payments Under the
Plan.  Any Cash distribution to be made by the Debtors or the
Reorganized Debtors (as applicable) pursuant to the Plan may be made by a check
on a United States bank selected by the Debtors or the Reorganized Debtors (as
applicable); provided, however, that Cash
distributions made to foreign Holders of Allowed Claims may be paid, at the
option of the Debtors or the Reorganized Debtors (as applicable), in such funds
and by such means as are necessary or customary in a particular foreign
jurisdiction.

     

    6.10.       Disputed Claims.

     

    (a)  No
distribution or payment shall be made on a Disputed Claim until such Disputed
Claim becomes an Allowed Claim.  On the Initial Distribution Date, the
distributions reserved for the Holders of any Disputed Claims in each Class
under the Plan shall be deposited in deposit accounts for the benefit of the
Holders of Disputed Claims whose Claims are ultimately Allowed in the respective
Classes in which the Disputed Claims are classified (each deposit account a
“Disputed Claims
Reserve”); provided, however, that neither
the Debtors nor the Reorganized Debtors shall be required to deposit any Cash,
securities, or other property or assets into a Disputed
Claims  Reserve on account of a particular Disputed Claim with respect
to which the Debtors or the Reorganized Debtors have filed a motion or objection
with the Bankruptcy Court seeking to either (a) estimate or liquidate the
Allowed amount of such Disputed Claim at $0 or (b) disallow, expunge, vacate, or
otherwise strike such Disputed Claim on any grounds.

     

    (b)  Subject
to the other provisions of this Plan (including Section 6.10(a) hereof), the
Reorganized Debtors (or any transfer or disbursing agent retained by the
Reorganized Debtors pursuant to Plan Section 6.5(b)) shall withhold from the
property to be distributed under the Plan and deposit in each Disputed Claims
Reserve a sufficient amount of such withheld property to be distributed on
account of the face amount of Claims that are Disputed Claims in such Class as
of the Initial Distribution Date for such Class under the Plan.  For
the purposes of this provision, the “face amount” of a Claim is (i) the amount
set forth on the applicable Proof of Claim or such lower amount as may be
determined in accordance with Plan Section 6.10(c), unless the Claim is filed in
an unliquidated amount; or (ii) if a Proof of Claim has been filed in an
unliquidated amount, the amount determined in accordance with Plan Section
6.10(c).

    
      
        
        

         

      

      
        -31-

        
          

        

      

      
         

      

    

    (c)  As
to a Disputed Claim, the Bankruptcy Court shall, upon motion by the Debtors or
the Reorganized Debtors or any other party in interest in these Cases (as
applicable), estimate the maximum allowable amount of such Disputed Claim and
the amount to be placed in the Disputed Claims Reserve on account of such
Disputed Claim.  If so authorized by order of the Bankruptcy Court,
any Creditor whose Claim (i) is estimated by an order of the Bankruptcy Court or
(ii) is the subject of a motion or objection to (a) estimate or liquidate the
Allowed amount of such Disputed Claim at $0 or (b) disallow, expunge, vacate, or
otherwise strike such Disputed Claim in full on any grounds, as contemplated by
Plan Section 6.10(a), shall not have any recourse to the Debtors or to the
Reorganized Debtors, any Assets theretofore distributed on account of any
Allowed Claim, or any other entity or property if the finally Allowed Claim of
that Creditor exceeds that estimated maximum allowable
amount.  Instead, such Creditor shall have recourse only to the
undistributed Cash (if any) in the applicable Disputed Claims Reserve for the
Claim of that Creditor and (on a Pro Rata basis with the other Creditors of the
same Class who are similarly situated) to those portions (if any) of the
Disputed Claims Reserve for other Disputed Claims of the same Class that exceed
the ultimately Allowed amount of such Claims.

     

    (d)  All
earnings on any Cash held in a Disputed Claims Reserve (if any) shall be held in
trust and shall be distributed only in the manner described in the
Plan.

     

    (e)  At
such time as all or any portion of a Disputed Claim becomes an Allowed Claim,
the distributions reserved for such Disputed Claim or such portion, plus any
earnings thereon (if any), shall be released from the appropriate Disputed
Claims Reserve and delivered to the Holder of such Allowed Claim in the manner
as described in the Plan.  At such time as all or any portion of any
Disputed Priority Claim or any Disputed Class 1 or 2C Claim is determined not to
be an Allowed Claim, the distribution reserved for such Disputed Claim or such
portion, plus any earnings thereon (if any), shall be released from the
appropriate Disputed Claims Reserve and returned to the Reorganized
Debtors.  At such time as all or any portion of any Disputed Class 3A
Claim or Disputed 3B Claim is determined not to be an Allowed Claim, the
distribution reserved for such Disputed Claim or such portion, plus any earnings
thereon (if any), shall be released from the appropriate Disputed Claims Reserve
account and made available for redistribution in a timely manner, on a Pro Rata
basis, to the Holders of Allowed Claims of such Classes; provided, however, that neither
the Debtors, the Reorganized Debtors, nor any transfer or disbursing agent
retained by the Reorganized Debtors pursuant to Plan Section 6.5(b) shall be
required to make any such redistribution until the aggregate amount available
with respect thereto is at least $5,000.

     

    (f)   (i)
After the Confirmation Date, the Debtors (in consultation with the Creditors
Committee, the First Lien Loan Administrative Agent, and the Second Lien Loan
Administrative Agent), and (ii) on and after the Effective Date, the Reorganized
Debtors shall have the authority to object to and litigate any Disputed Claims
or any dispute regarding the amount of the NW Bank Note Secured Claim and the NW
Bank Note Deficiency Claim, and shall have the authority to settle, compromise,
resolve, or withdraw any objection to Disputed Claims or any dispute regarding
the amount of the NW Bank Note Secured Claim and the NW Bank Deficiency Claim,
without the need for any Bankruptcy Court or other approval or any other or
further notice.  Without limiting the generality of the foregoing, the
amount of the NW Bank Note Deficiency Claim is to be determined in good faith by
the Debtors (in consultation with the Creditors Committee, the First Lien Loan
Administrative Agent, and the Second Lien Loan Administrative Agent) and NW
Bank, or, in the absence of an agreement between such parties, by the Bankruptcy
Court.

    
      
        
        

         

      

      
        -32-

        
          

        

      

      
         

      

    

    (g)  Except
as otherwise provided in the Plan, if there exists any Disputed Administrative
Claim, Disputed Tax Claim, or Disputed DIP Facility Claim, or any Disputed Class
1 or 2C Claim, the Reorganized Debtors shall withhold in a reserve account the
“face amount” (as calculated under Plan Section 6.10(b)) of any such Disputed
Claim until and to the extent such Claim is determined to be an Allowed
Claim.

     

    6.11.       Bar Date for Objections to
Claims.  All objections to Claims (other than with respect to
(a) Administrative Claims and (b) Rejection Claims arising under those Executory
Contracts that are to be rejected under and pursuant to the Plan) must be filed
by the Claims Objection Bar Date.  The failure by any
party-in-interest, including the Debtors, to object to any Claim, whether or not
unpaid, for purposes of voting shall not be deemed a waiver of such party’s
rights to object to, or to re-examine, any such Claim in whole or in part, for
purposes of distributions under the Plan.

     

    6.12.       Deadlines for Determining the Record
Holders of the Various Classes of Claims.  At the close of
business on the Distribution Record Date, the respective transfer records for
the Credit Facilities, the NW Bank Agreements, and the Old HPPC Interests shall
be closed, and there shall be no further changes in the record holders of the
respective Credit Facilities Claims, NW Bank Claims, General Unsecured Claims,
or the Old HPPC Interests after such date.  Neither the Debtors, the
Reorganized Debtors, any disbursing agent or transfer agent retained by the
Reorganized Debtors pursuant to Plan Section 6.5(b), nor the respective
Administrative Agents shall have any obligation to recognize any transfer of the
First Lien Loan Claims, the Second Lien Loan Claims, the NW Bank Claims, the DIP
Facility Claims, any notes issued in connection with any of the Credit
Facilities, the NW Bank Agreements, or any of the Guarantees (if any), any
General Unsecured Claim, or the Old HPPC Interests occurring after the
Distribution Record Date, and such parties shall be entitled, instead, to
recognize and deal for all purposes hereunder with only those record holders
thereof as of the close of business on the Distribution Record
Date.

     

    6.13.       The Exit Credit Facility, the Working
Capital Loans, the New Secured Notes, and the Exit Credit Facility
Guarantee.

     

    (a)  On
the Effective Date, or as soon thereafter as practicable, the Reorganized
Debtors, either as direct borrowers or as an Exit Credit Facility Guarantor, the
Exit Credit Facility Administrative Agent, as administrative agent, and the Exit
Credit Facility Lender(s), as lender(s) (in each case, as may be set forth in
the final Exit Credit Facility), may (as applicable) execute and deliver the
Exit Credit Facility, the New Secured Notes, the Working Capital Loans Notes,
the Exit Credit Facility Guarantee, and any and all security agreements,
mortgages or extensions of mortgages, certificates, and other instruments,
agreements, assignments, and documents contemplated and/or required by the Exit
Credit Facility, including, but not limited to, any and all such documents that
serve to evidence and secure the Reorganized Debtors’ respective obligations
under the Exit Credit Facility and/or the Exit Credit Facility Guarantee (as
applicable), and any Liens in favor of the Exit Credit Facility Lender(s)
securing such obligations.  The New Secured Notes under the Exit
Credit Facility shall constitute a reinstatement and modification of the Class
2A Claims under the First Lien Loan in the manner set forth in Section 5.2
hereof, and, as a result, all of the outstanding amounts under the Exit Credit
Facility shall (a) continue to be secured by the perfected Liens which exist
under the First Lien Loan and (b) be secured by perfected Liens in substantially
all of the respective assets of the Reorganized Debtors.

    
      
        
        

         

      

      
        -33-

        
          

        

      

      
         

      

    

    (b)  The
First Lien Loan Lenders shall have the option to participate as an Exit Credit
Facility Lender and provide the Working Capital Loans to Reorganized
Aurora.  In the event that all the Exit Credit Facility Lenders under
the Working Capital Loans are First Lien Lenders, each participating First Lien
Loan Lender shall be entitled to participate in the Working Capital Loans on a
Pro Rata basis, based on the total amount outstanding under the First Lien
Loan.  In the event that some or all of the First Lien Loan Lenders
fail to fully subscribe the Working Capital Loans, then some or all of the
Second Lien Loan Lenders shall be entitled to participate with such
participating First Lien Loan Lenders and provide the remaining portion that is
necessary to fully subscribe the Working Capital Loans.  In such
event, such participating Second Lien Loan Lenders shall be entitled to share
pari passu in the
collateral securing the Tranche A Notes solely with respect to their respective
portion of the Working Capital Loans.

     

    (c)  In
the event that none of the First Lien Loan Lenders subscribe to the Working
Capital Loans, then some or all of the Second Lien Loan Lenders shall instead
provide such Working Capital Loans, and the participation of such Second Lien
Loan Lenders shall be on a Pro Rata basis, based on the total principal amount
outstanding under the Second Lien Loan.  To the extent that the
Working Capital Loans are subscribed exclusively by the Second Lien Loan
Lenders, such Working Capital Loans shall be secured as second lien debt
subordinate solely to the Tranche A Notes.  If less than all of the
Second Lien Loan Lenders are Exit Credit Facility Lenders under the Exit Credit
Facility, (a) the Second Lien Loan Lenders subscribing to the Working Capital
Loans shall be entitled to provide any remaining portion of the Working Capital
Loans and (b) the Second Lien Loan Administrative Agent shall provide any
portion of the Working Capital Loans that is not otherwise subscribed as
described herein.

     

    (d)  Advances
under the Working Capital Loans shall bear interest at a rate of 12% per
annum.  Maturity of the Working Capital Loans shall be the date that
is 24 months following the Effective Date.  On the maturity date of
the Working Capital Loans, the Reorganized Debtors shall also pay a premium
equal to 50% of the principal amount borrowed thereunder.  At the
execution of the Exit Credit Facility, each Exit Credit Facility Lender shall be
entitled to an upfront fee equal to 3% of its share of the total commitments
under the Working Capital Loans.  Amounts repaid under the Working
Capital Loans by the Reorganized Debtors may be prepaid and
re-borrowed.  The documentation memorializing the Exit Credit Facility
shall include customary representations, warranties, covenants, and
indemnities.

     

    (e)  Solely
to the extent that the Second Lien Loan Lenders exclusively subscribe to the
Working Capital Loans, such Second Lien Loan Lenders subscribing to the Working
Capital Loans shall collectively receive 10-year warrants to purchase, in the
aggregate, 35% of the New Aurora Class A Common Stock (on a fully diluted basis)
at a nominal exercise price (the “New Warrants”).

     

    (f)  On
the date of the execution and delivery of the Exit Credit Facility (which shall
be no earlier than the Effective Date), Reorganized Aurora shall issue, in
accordance with the terms of the Plan (including Section 5.2 hereof) and the
Exit Credit Facility, the New Secured Notes to the First Lien Loan
Administrative Agent for subsequent distribution on a Pro Rata basis to the
Holders of Allowed First Lien Loan Claims.

    
      
        
        

         

      

      
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    (g)  The
New Secured Notes shall bear interest at a rate per annum equal to (a) with
respect to the Tranche A Notes, LIBOR plus a margin of 3%, and (b) with respect
to the Tranche B Notes, 6% fixed.  Interest on (a) the Tranche A Notes
shall be payable quarterly, and (b) the Tranche B Notes shall accrue but not be
paid and instead shall be capitalized (“PIK Interest”) and added
quarterly to the principal amount outstanding of such Tranche B Notes, and the
new principal balance thereof outstanding (which includes any capitalized PIK
Interest) shall thereafter continue to accrue interest at the rate applicable
for such Tranche B Notes.  The principal amounts of the New Secured
Notes (including all capitalized PIK Interest) shall be payable at maturity,
which shall be the date that is 24 months following the Effective
Date.  The documentation memorializing the New Secured Notes will be
contained in the Exit Credit Facility and will include customary
representations, warranties, covenants, and indemnities.  In addition
to the perfected Liens under the First Lien Loan, the outstanding principal of,
and accrued and unpaid interest on, the Tranche A Notes, together with all other
amounts owed by Reorganized Aurora relating to the Tranche A Notes, shall also
be secured by first priority, perfected Liens in substantially all of the assets
of Reorganized Aurora (including any subsidiaries and Affiliates thereof, such
as Reorganized HPPC).  In addition to the perfected Liens under the
First Lien Loan, the outstanding principal (including all capitalized PIK
Interest) of, and accrued PIK Interest not yet capitalized and added to the
outstanding principal of, the Tranche B Notes, together with all other amounts
owed by Reorganized Aurora relating to the Tranche B Notes, shall also be
secured by perfected Liens (subordinate only to the Liens of the Tranche A Notes
and the Working Capital Loans of the Exit Credit Facility) in substantially all
of the assets of Reorganized Aurora (including any subsidiaries and Affiliates
thereof).  The security documents relating to the Liens of the Tranche
A Notes and Tranche B New Secured Notes shall contain customary terms and
conditions.

     

    (h)  A
holder of a New Secured Note or Working Capital Loan shall not be permitted to
assign all or any portion of its New Secured Notes or Working Capital Loans, as
applicable, to any Person or entity that is acting in the capacity of a “vulture
fund.”  The Exit Credit Facility Administrative Agent shall make the
determination whether or not a Person is acting in the capacity of a “vulture
fund” for this purpose.

     

    6.14.       New Aurora Class A Common
Stock.  On the Effective Date (or as soon thereafter as is
practicable), Reorganized Aurora shall issue in accordance with the terms of the
Plan (including Sections 5.3 and 6.6 hereof), [56] million shares (in the
aggregate) of New Aurora Class A Common Stock to the Second Lien Loan
Administrative Agent for subsequent distribution on a Pro Rata basis to the
Holders of Allowed Second Lien Loan Claims (or such Holder’s affiliate, as
provided for in Plan Section 5.3(b)).  As of the Effective Date, such
[56] million shares of New Aurora Class A Common Stock to be so distributed
shall collectively represent 100% of the outstanding shares of New Aurora Class
A Common Stock (subject to dilution on a pari passu basis with all
other holders of shares of New Aurora Class A Common Stock upon the issuance of
any shares of New Aurora Class A Common Stock issuable upon the exercise of the
New Warrants or otherwise by Reorganized Aurora).  Upon the issuance
of such shares of New Aurora Class A Common Stock (including, but not limited
to, upon the exercise of the New Warrants or otherwise), all such shares of New
Aurora Class A Common Stock shall be deemed fully paid and
nonassessable.

    
      
        
        

         

      

      
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    6.15.       The New Aurora Preferred
Stock.

     

    
      (a)  On
the Effective Date (or as soon thereafter as is practicable), Reorganized Aurora
shall issue, in accordance with the terms of the Plan (including Sections 5.2
and 6.6 hereof), [32] million shares (in the aggregate) of the New Aurora
Preferred Stock to the First Lien Loan Administrative Agent for subsequent
distribution on a Pro Rata basis to the Holders of Allowed First Lien Loan
Claims (or such Holder’s affiliate, as provided for in Plan Section
5.2(b)).  The New Aurora Preferred Stock issued on such date to each
such Holder shall, in the aggregate, represent, as of such date, 100% of the
outstanding shares of New Aurora Preferred Stock, subject to no dilution or
further issuance of any additional shares of New Aurora Preferred Stock except
as expressly provided under Plan Section 6.15(f).  Except
as provided by the Utah Revised Business Corporation Act and the Amended and
Restated Articles of Incorporation, the shares of New Aurora Preferred Stock
shall be non-voting.

      

    

    
      (b)  The
New Aurora Preferred Stock shall have an initial liquidation preference of [$1.00] per share of New
Aurora Preferred Stock, for an aggregate initial liquidation preference for all
shares of New Aurora Preferred Stock equal to approximately $32 million, and
shall rank senior in priority to the shares of New Aurora Class A Common Stock
and the New Aurora Class B Common Stock and junior in priority to all
indebtedness of Reorganized Aurora.  To the extent then available, the
form of the New Aurora Preferred Stock shall be as set forth in the Plan
Supplement.

      

    

    (c)  Neither
Reorganized Aurora, nor any holders of New Aurora Class A Common Stock, shall be
permitted to approve, any of the following without the prior written approval of
holders of at least 66 2/3% of the shares of New Aurora Preferred Stock
outstanding:  (i) certain transactions (i.e., mergers or asset sales,
etc.); (ii) any changes to the rights, privileges, or preferences of the New
Aurora Preferred Stock; (iii) the incurrence by Reorganized Aurora of any
secured or unsecured indebtedness (other than indebtedness contemplated
hereunder); provided, however, that with
respect to unsecured indebtedness, no such approval shall be required to the
extent that such unsecured indebtedness is, in the aggregate, less than
$500,000; (iv) the issuance of any additional shares of New Aurora Preferred
Stock (other than as a dividend on outstanding shares), and the issuance of any
equity interests in Reorganized Aurora that would rank senior to, or pari passu with, the New
Aurora Preferred Stock as to liquidation preference or as to priority of
distributions; (v) any distributions on or redemptions of any shares of the New
Aurora Class A Common Stock or the New Aurora Class B Common Stock (other than
(A) those expressly permitted in accordance with the terms of the Plan and (B)
certain exceptions such as repurchases under employee benefit plans or
employment agreements, etc.); (vi) designation of additional directors of the
Board of Directors of Reorganized Aurora upon the occurrence of the Triggering
Event; and (vii) additional matters as reflected in the Plan Documents,
including without limitation, the Amended and Restated Articles of Incorporation
and the Amended and Restated By-Laws.

    
      
        
        

         

      

      
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    (d)  The
governing documents of the Reorganized Aurora shall contain customary provisions
entitling the holders of the New Aurora Class A Common Stock, the New Aurora
Class B Common Stock, and the New Aurora Preferred Stock to receive (i) periodic
financial statements, and (ii) reasonable access to the books and records of
Reorganized Aurora.

     

    (e)  The
New Aurora Preferred Stock shall not be convertible into New Aurora Class A
Common Stock, New Aurora Class B Common Stock, or any other equity security of
Reorganized Aurora.

     

    (f)  Dividends
shall accrue for each share of New Aurora Preferred Stock at a rate of 6%
annually on the amount of the liquidation preference for such New Aurora
Preferred Stock, payable solely in additional New Aurora Preferred Stock,
issuable quarterly.

     

    (g) Each
share of New Aurora Preferred Stock shall be redeemable (i) on a mandatory
basis, on the date that is 60 months after the Effective Date; (ii) at the
option of the Reorganized Aurora, at any time prior to the redemption date in
clause (i) hereof; (iii) on a mandatory basis, upon the refinancing or the
payment in full of the obligations under the New Secured Notes; or (iv) on a
mandatory basis, upon the occurrence of an event of default under the New
Secured Notes, in each case under clauses (i), (ii), (iii) and (iv) hereof, for
a Cash redemption price equal to the liquidation preference applicable to such
New Aurora Preferred Stock, plus any accrued and unpaid dividends (paid in Cash
based on the amount of the liquidation preference that would apply to the shares
of New Aurora Preferred Stock that would otherwise be issued to pay such accrued
and unpaid dividends); provided, however, that any
partial redemptions shall be made on a Pro Rata basis among the holders of the
New Aurora Preferred Stock.

     

    (h) The
holders of the New Aurora Preferred Stock shall have no obligation thereunder to
make any capital contributions to any of the Reorganized Debtors.

     

    6.16.       Dividends to Preferred and Common
Equity Holders of Reorganized Aurora.  Any dividends (other
than dividends paid in additional shares of New Aurora Preferred Stock, which
shall only be issued to existing holders of New Aurora Preferred Stock) by
Reorganized Aurora to its respective equity security holders shall be allocated
as follows:

     

    (a)  Until
all shares of New Aurora Preferred Stock have been fully redeemed in accordance
with the terms of the Amended and Restated Articles of Incorporation or have
received aggregate dividends equal to the aggregate liquidation preference plus
all accrued and unpaid dividends thereon, dividends to the respective equity
security holders of Reorganized Aurora shall be allocated as
follows:  (1) 90% to the holders of the New Aurora Preferred Stock and
(2) 10% to the holders of the New Aurora Class B Common Stock; and

     

    (b)  After
the full redemption of all outstanding shares of New Aurora Preferred Stock or
the payment of aggregate dividends to the New Aurora Preferred Stock equal to
the aggregate liquidation preference plus all accrued and unpaid dividends
thereon, all dividends shall be allocated on a Pro Rata basis to the holders of
the New Aurora Class A Common Stock and the New Aurora Class B Common
Stock.

    
      
        
        

         

      

      
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    6.17.       Management and Director Equity
Plan.  Following the Effective Date, the Management and
Director Equity Plan may be adopted by Reorganized Aurora.  The terms
and conditions of any Management and Director Equity Plan shall be determined by
the Board of Directors of Reorganized Aurora.  Shares of New Aurora
Class B Common Stock representing the equivalent of up to 10% of the shares of
New Aurora Class A Common Stock on a fully-diluted basis that are issued and
outstanding upon the Effective Date (not including any shares of New Aurora
Class A Common Stock or other such class of equity that would be issuable upon
the exercise of the New Warrants) shall be reserved for the issuance under any
Management and Director Equity Plan when the Management and Director Equity Plan
is adopted by Reorganized Aurora.

     

    6.18.       Registration Rights
Agreement.  Following the Effective Date, certain holders of
New Aurora Class A Common Stock shall be entitled to require the registration of
New Aurora Class A Common Stock under the Securities Act in accordance with the
terms of the Registration Rights Agreement.  The Registration Rights
Agreement shall be filed as part of the Plan Supplement and shall be executed
and delivered by Reorganized Aurora and become effective as of the Effective
Date.  The terms of the Registration Rights Agreement shall provide
that no registration rights thereunder may be exercised unless all shares of New
Aurora Preferred Stock have been fully redeemed.

     

    6.19.       Voting Agreement and the
Conversions.

     

    (a)           The
Voting Agreement shall:  (i) be filed as part of the Plan Supplement,
(ii) be executed and delivered by Reorganized Aurora, the initial holders of the
New Aurora Class A Common Stock, and the initial holders of New Aurora Preferred
Stock, and (iii) become effective as of the Effective Date.  Following
the Effective Date (and subject to Section 6.19(b) hereof), the holders of New
Aurora Preferred Stock and New Aurora Class A Common Stock shall take all the
appropriate corporate action to approve and effect the Utah Conversion and
Delaware Conversion and approve and execute the Reorganized Aurora Limited
Liability Company Agreement, all as contemplated by the Voting
Agreement.

     

    (b)           Notwithstanding
anything to the contrary contained in this Plan, the holders of the New Aurora
Preferred Stock and the holders of the New Aurora Class A Common Stock may
agree, after the Effective Date, not to undertake the Utah Conversion, the
Delaware Conversion, or any other conversion of Reorganized Aurora and to
instead keep and maintain the existence of Reorganized Aurora and the New Aurora
Preferred Stock, New Aurora Class A Common Stock, and New Aurora Class B Common
Stock issued in accordance with Section 6.3 hereof or otherwise
hereunder.

     

    (c)           Notwithstanding
any such conversions, Reorganized Aurora shall be treated as a corporation for
federal income tax purposes, and shall take all other actions necessary or
desirable in furtherance of such treatment for federal income tax
purposes.

    
      
        
        

         

      

      
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      6.20.         No Fractional Shares or
Warrants.  No fractional shares of New Aurora Class A Common
Stock or New Aurora Preferred Stock, or New Warrants to acquire any fractional
shares of New Aurora Class A Common Stock, shall be issued or distributed under
the Plan or the Exit Credit Facility.  Whenever any distribution to a
particular Person would otherwise call for the distribution of a fraction of a
share of New Aurora Class A Common Stock or New Aurora Preferred Stock or of a
New Warrant to acquire any fractional share of New Aurora Class A Common Stock,
the actual distribution of shares of such stock or warrant shall be rounded down
to the next lower whole number.  The total number of shares of New
Aurora Class A Common Stock or New Aurora Preferred Stock or New Warrants to be
distributed to a Class of Claims or in connection with the Exit Credit Facility
(as applicable) shall be adjusted as necessary to account for this
rounding.  No consideration shall be provided in lieu of any
fractional shares of New Aurora Class A Common Stock, New Aurora Preferred
Stock, or New Warrants that are rounded down.

      

      6.21.         Restrictions on
Transfer.

      

         (a)    For
a period of 25 months after the Effective Date, the New Aurora Preferred Stock
may not be sold, transferred, pledged, or assigned without the approval of the
holders of a majority of the New Aurora Class A Common Stock.  After
such 25-month period following the Effective Date, there shall be no
restrictions on the transfer of the New Aurora Preferred Stock other than with
respect to compliance with applicable laws.

      

         (b)    For
a period of 25 months after the Effective Date, the New Aurora Common Stock
may not be sold, transferred, pledged, or assigned without the approval of the
holders of a majority of the New Aurora Preferred Stock.  After such
25-month period following the Effective Date, there shall be no restrictions on
the transfer of the New Aurora Common Stock other than with respect to
compliance with applicable laws.

      

      6.22.         De Minimis
Distributions.  No Debtor, Reorganized Debtor, or any
disbursing agent or transfer agent retained by the Reorganized Debtors pursuant to Plan Section
6.5(b) shall distribute any Cash to the Holder of an Allowed Claim if the amount
of Cash to be distributed on account of such Claim
is less than $100.  Any Holder of an Allowed Claim on account of which
the amount of Cash to be distributed is less than $100 shall have its Claim and
its right to any such distribution discharged, and shall be forever barred from
asserting any such claim against, or interest in, the Reorganized Debtors or
their respective property.  Any Cash not distributed pursuant to this
Section 6.22 shall be the property of the
Reorganized Debtors, free of any restrictions thereon, and any
such Cash held by any disbursing agent or transfer agent retained by the Reorganized
Debtors pursuant to Plan Section 6.5(b) shall be returned to the
Reorganized Debtors.

      

      6.23.         Withholding and Reporting
Requirements.  In connection with this Plan and all instruments
issued in connection herewith and distributed hereunder, the Debtors, the
Reorganized Debtors, any disbursing agent or
transfer agent retained by the Reorganized Debtors pursuant to Plan Section 6.5(b),
and the Administrative Agents, as the case may be, shall comply with all
applicable withholding and reporting requirements imposed by any federal, state,
local, or foreign taxing authority, and all distributions under the Plan shall
be subject to any such withholding and reporting requirements.

      

      6.24.         Non-Debtor Intercompany
Claims.  All Non-Debtor Intercompany Claims shall be reviewed
by the Reorganized Debtors and (without the need for any such entities to file a
Proof of Claim) adjusted, continued, or discharged as the Reorganized Debtors
determine as appropriate, taking into account, among other things, the
distribution of consideration under the Plan and the economic condition of the
Reorganized Debtors and their non-Debtor subsidiaries and
Affiliates.

      
        
           

        

        
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      6.25.         Direction to
Parties.  From and after the Effective Date, the Reorganized
Debtors may apply to the Bankruptcy Court for an order directing any necessary
party to execute or deliver or to join in the execution or delivery of any
instrument required to effect a transfer of property dealt with by the Plan, and
to perform any other act, including the satisfaction of any Lien, that is
necessary for the consummation of the Plan, pursuant to Bankruptcy Code §
1142(b).

      

      6.26.         Setoffs.  The
Debtors shall, pursuant to Bankruptcy Code § 553, set off against any Allowed
Claim and the distributions to be made pursuant to the Plan on account of such
Claim, all claims, rights, and Causes of Action of any nature that the Debtors
may hold against the Holder of such Allowed Claim that are not otherwise waived,
released, or compromised in accordance with the Plan; provided, however, that neither
the failure to effect such a setoff nor the allowance of any Claim shall
constitute a waiver or release by the Debtors of any such claims, rights, and
Causes of Action that either of the Debtors may possess against such
Holder.

      

      6.27.         Waiver of Avoidance Claims;
Preservation of All Other Causes of Action.

      

       
 (a)    As of the Effective Date, all of the Debtors’
and the Estates’ Avoidance Claims shall be deemed to have been, and shall be,
released and/or waived, and all parties shall hereby be enjoined from
instituting and presenting in the name of the Debtors, or otherwise, any or all
proceedings in order to collect, assert, or enforce any such Avoidance Claim of
any kind; provided, however, that if the
Confirmation Order is vacated or revoked, all Avoidance Claims shall be deemed
reinstated automatically, with the same force and effect as if the Avoidance
Claims never had been released and/or waived hereunder, without the need for any
action to be taken by the Debtors or any other party.  In addition,
all parties shall hereby be enjoined from instituting and presenting in the name
of the Debtors or the Estates any objections to Claims under Bankruptcy Code §
502(d) on account of such released and waived Avoidance Claims.

      

       
 (b)    Except as otherwise set forth in the Plan
(including, without limitation, Article IX and Section 6.27(a)
hereof), in accordance with Bankruptcy Code § 1123(b), as of the
Effective Date, the Reorganized Debtors shall retain all Causes of Action
(including, without limitation, actions that could be brought under Bankruptcy
Code § 542 or 543) other than with respect to any Avoidance Claims, and shall
have the power, subject to any applicable releases and/or waivers contained in
the Plan, (i) to institute and present in the name of the Debtors, or otherwise,
all proceedings that they may deem proper in order to collect, assert, or
enforce any claim, right, or title of any kind in or to either of the Debtors’
Assets or to avoid any purported Lien, and (ii) to defend and compromise any and
all actions, suits, or proceedings in respect of such Assets.

      

      6.28.         Special Provisions Regarding the
Treatment of Allowed Secondary Liability Claims.  The
classification and treatment of Allowed Claims under the Plan shall take into
consideration all Allowed Secondary Liability Claims.  On the
Effective Date, Allowed Secondary Liability Claims shall be treated as
follows:

      
        
           

        

        
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 (a)    The Allowed Secondary Liability Claims arising
from or related to either Debtors' joint or several liability for the
obligations under any (a) Allowed Claim that is being Reinstated under the Plan
or (b) Executory Contract that is being assumed or deemed assumed by the other
Debtor or Reorganized Debtor shall be Reinstated.

      

       
 (b)    Holders of all other Allowed Secondary
Liability Claims shall be entitled to only one distribution from the Debtors,
which distribution shall be as provided in the Plan in respect of such
underlying Allowed Claim, and which Allowed Secondary Liability Claim (as well
as the underlying Allowed Claim) shall be deemed satisfied in full by the
distributions on account of the related underlying Allowed Claim.  No
multiple recovery on account of any Allowed Secondary Liability Claim
(including, but not limited to, on account of any Claim based on any of the
Guarantees or any guarantee related to an Executory Contract) shall be provided
or permitted in excess of the Allowed Claim.

      

      6.29.         Special Provision Regarding Employee
Termination Claims.  Other than with respect to those Employees
who have or will enter into an agreement with the Debtors addressing severance
and/or termination claims, in lieu of, and in full satisfaction, settlement,
release, and discharge of, and in exchange for, any and all Claims against the
applicable Debtors, the Reorganized Debtors, or the Estates for severance or
otherwise relating to the Employee’s employment termination by the applicable
Reorganized Debtor, other than with respect to any rights of such Employees as a
result of change-in-control provisions in any applicable agreements (“Employee Termination Claims”),
upon the termination of their employment, Employees (including members of the
Debtors’ management) of either of the Debtors shall be entitled to receive
severance payments equal to two weeks salary per year of such Employee’s
employment, with a minimum payment equal to four weeks salary, in addition to
the releases provided for in Article IX hereof.

      

      6.30.         Plan
Supplement.  The Plan Supplement shall be filed with the
Bankruptcy Court within the time established by the order of the Bankruptcy
Court approving the Disclosure Statement or other applicable order of the
Bankruptcy Court.  The Plan Supplement shall include (unless
previously filed or not then yet available) the respective draft forms of the
Amended and Restated Articles of Incorporation; the Amended and Restated Bylaws;
the Amended and Restated LLC Agreement; the Registration Rights Agreement; the
Voting Agreement (to the extent applicable in accordance with Section 6.19(b)
hereof); and, to the extent then available, the draft forms of any documents
memorializing the New Warrants or the terms and conditions of the New Aurora
Preferred Stock, the New Aurora Class A Common Stock, or the New Aurora Class B
Common Stock.  The Debtors may also include in the Plan Supplement a
draft form of an Exit Credit Facility, the New Secured Notes, and the Working
Capital Loans Notes, but only if and to the extent that such drafts are
available as of the date of the filing of the Plan Supplement.  The
Plan Supplement may also include revised or updated lists of the Executory
Contracts identified as “to be rejected” under the Plan (if any).  The
draft forms, summaries, lists, and schedules so set forth in the Plan Supplement
may be amended, modified, or supplemented from time to time after the filing of
the Plan Supplement.  Upon its filing, the Plan Supplement may be
inspected in the office of the Clerk of the Bankruptcy Court or its designee
during normal business hours.  Holders of Claims and Interests may
obtain a copy of the Plan Supplement upon written request to the Claims Agent or
through the Claims Agent’s website, http://www.donlinrecano.com/aurora, or
through the Bankruptcy Court’s website, http://www.miwb.uscourts.gov/.

      
        
           

        

        
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      6.31.         Allocation of
Distributions.  All distributions paid to Holders of Allowed
Claims in satisfaction thereof pursuant to this Plan shall be allocated first to
the original principal amounts of such Claims (as determined for federal income
tax purposes), and, second, to the portion of such Claims representing interest
(as determined for federal income tax purposes) and any excess thereafter shall
be allocated to the remaining portion of such Claims.

      

      6.32.         Distribution
Limitations.  Notwithstanding any other provision of the Plan
to the contrary, no distribution shall be made on account of any Claim, or part
thereof, (i) that is not an Allowed Claim or (ii) that has been avoided or is
subject to any objection.  The sum total of the value of the
distributions to be made on the Initial Distribution Date to all Claims in a
particular Class (if any) shall not exceed the aggregate amount of the Allowed
Claims in such Class (if any), and the distribution to be made to each
individual Holder of an Allowed Claim shall not exceed the amount of such
Holder’s Allowed Claim.

      

      6.33.         Limitations on Amounts to Be
Distributed to Holders of Allowed Insured
Claims.  Distributions under the Plan to each Holder of an
Allowed Insured Claim shall be in accordance with the treatment provided under
the Plan for the Class in which such Allowed Insured Claim is classified, but
solely to the extent that such Allowed Insured Claim is not satisfied from
proceeds payable to the
Holder thereof under any pertinent insurance policies and applicable law.  Nothing
in this Section 6.33 shall constitute a waiver of any claims,
obligations, suits, judgments, damages, demands, debts, rights, Causes of
Action, or liabilities that any entity may hold against the Debtors’ or the
Reorganized Debtors’ insurance carriers.

      

      6.34.         Distributions by Reorganized Aurora
of Proceeds from the Sale of Assets.  The net Cash proceeds
from the sale of any assets of the Reorganized Aurora, as well as any amount to
be paid (whether voluntary or involuntary), shall be applied as
follows:

      

       
 (a)    First, to the Pro Rata payment of (i) all fees,
costs, expenses and other obligations payable to the administrative agent and
the collateral agent, if any, under the New Secured Notes and (ii) to the extent
that the Working Capital Loans are subscribed by at least one First Lien Loan
Lender, all fees, costs, expenses and other obligations payable to the Exit
Credit Facility Administrative Agent and the collateral agent, if any, under the
Exit Credit Facility;

      

       
 (b)    Second, to the Pro Rata payment of (i) the
Tranche A Notes in the following order of priority:  (A) accrued and
unpaid interest, (B) principal amount outstanding, and (C) any other obligation
payable in respect of the Tranche A Notes and (ii) to the extent that the
Working Capital Loans are subscribed by at least one First Lien Loan Lender, the
Working Capital Loans in the following order of priority:  (A) accrued
and unpaid interest, (B) principal amount outstanding, (C) premium in respect of
the principal amount, and (D) any other obligation payable in respect of the
Working Capital Loans;

      

       
 (c)    Third, to the extent that the Working Capital
Loans are subscribed exclusively by the Second Lien Loan Lenders, to the payment
of all fees, costs, expenses and other obligations payable to the Exit Credit
Facility Administrative Agent, and any collateral agent under the Exit Credit
Facility;

      
        
           

        

        
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 (d)    Fourth, to the extent that the Working Capital
Loans are subscribed exclusively by the Second Lien Loan Lenders, to the payment
of the Working Capital Loans in the following order of priority:  (i)
accrued and unpaid interest, (ii) principal amount outstanding, (iii) premium in
respect of the principal amount, and (iv) any other obligation payable in
respect of the Working Capital Loans; and

      

       
 (e)    Fifth, to the payment of the Tranche B Notes in
the following order of priority:  (i) accrued PIK Interest not yet
capitalized and added to the principal, (ii) principal amount outstanding
(including capitalized and added PIK Interest), and (iii) any other obligation
payable in respect of the Tranche B Notes.

      

      6.35.         Implementation of
Settlement.  The Plan incorporates and implements a compromise
and settlement reached by and among (i) the First Lien Loan Lenders and the
Second Lien Loan Lenders and (ii) the Debtors.  Specifically, the
distributions potentially provided for herein to Holders of Allowed Claims in
Class 2A and Class 2B represent the negotiated distributions as set forth in an
agreement-in-principle reached between the Debtors and the First Lien Loan
Lenders and the Second Lien Loan Lenders.

      

      6.36.         “Change of Control”
Provisions.  Notwithstanding anything to the contrary that may
be contained in the Plan or the Confirmation Order, any insurance policy, any of
the Credit Facilities, the NW Bank Agreements, any Executory Contract, or other
contract or agreement to which either of the Debtors is a party, the
transactions to be consummated in accordance with this Plan shall not create, or
be deemed to create, any claim or right in connection therewith, upon a “Change
of Control” or similar term, as such term may be defined or utilized
in any of the Credit Facilities, the NW Bank Agreements, or in any Executory
Contract, contract, or agreement to which either of the Debtors is a party;
provided, however, that to the
extent the Management Transition Services Agreements are not entered into by,
and binding upon, the Debtors and/or the Reorganized Debtors, the “change of
control” provisions in the respective employment agreements of Rebecca Abbott,
Jeffrey Deneau, William Deneau, John Hunter, and Barbara  Lawson shall
not be affected, modified, or in any way impaired by this Section 6.36 of the
Plan.

      

      
        
           

        

        
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        ARTICLE
VII

      

      

      
        EXECUTORY
CONTRACTS

      

      

      7.1.           Assumption of Executory
Contracts.  As of the Confirmation Date, but subject to the
occurrence of the Effective Date, all of the Debtors’ Executory Contracts
(including, without limitation, those Executory Contracts identified as “to be
assumed” on the list attached as Exhibit D to the Disclosure Statement, as such
list may be revised and included in the Plan Supplement or otherwise) shall be
deemed assumed by the applicable Debtors and retained by the applicable
Reorganized Debtors in accordance with the provisions and requirements of
Bankruptcy Code §§ 365 and 1123, except those Executory Contracts that (i) have
previously been rejected by an order of the Bankruptcy Court, (ii) are the
subject of a motion to reject pending on the Confirmation Date, [(iii) are
identified as “to be rejected” on the list attached as Exhibit E to the
Disclosure Statement (as such list may be revised and included in the Plan
Supplement or otherwise)], or (iv) are otherwise rejected pursuant to the terms
of the Plan.  Rejection of the Executory Contracts at issue in clauses
(iii) and (iv) in the immediately preceding sentence shall be effective as of
the Confirmation Date, subject to the occurrence of the Effective
Date.  Entry of the Confirmation Order by the Bankruptcy Court shall
constitute approval of such assumptions [and rejections (as applicable)]
pursuant to Bankruptcy Code §§ 365(a) and 1123, subject to the occurrence of the
Effective Date.  The listing of a document on [either] Exhibit D [or
Exhibit E] to the Disclosure Statement (as [either] such list may be revised and
included in the Plan Supplement or other otherwise) shall not constitute an
admission by the Debtors that such document is an executory contract or
unexpired lease or that the Debtors have any liability
thereunder.  Each Executory Contract assumed pursuant to this Article
VII shall revest in and be fully enforceable by the respective Reorganized
Debtor in accordance with its terms, except as may be modified by (i) the
provisions of the Plan, (ii) the Confirmation Order or any other applicable
order of the Bankruptcy Court approving and authorizing its assumption, or (iii)
applicable federal law.  The Debtors shall retain the right at all
times prior to the Effective Date to (a) assume any additional or other
Executory Contract(s) not specifically identified on the list thereof attached
as Exhibit D to the Disclosure Statement (or as such list may be revised and
included in the Plan Supplement or otherwise) as “to be assumed” [(including,
without limitation, any Executory Contracts currently identified on Exhibit E to
the Disclosure Statement as “to be rejected”)], or (b) reject any additional or
other Executory Contract(s) [not specifically identified on the list thereof
attached as Exhibit E to the Disclosure Statement (or as such list may be
revised and included in the Plan Supplement or otherwise) as “to be rejected”]
(including, without limitation, any Executory Contracts currently identified on
Exhibit D to the Disclosure Statement as “to be assumed”), in each case upon
providing notice to the non-Debtor party thereto.  Without limiting
the effect of this Plan Section 7.1, Exhibit[s] D [and E] to the Disclosure
Statement contain schedules of all known Executory Contracts currently
anticipated to be either assumed [or rejected] under this Plan, respectively (as
such schedules may be revised and included in the Plan Supplement or otherwise),
subject to the Debtors’ right to determine at any time subsequently, on or prior
to the Effective Date, including, without limitation, as may be set forth in the
Plan Supplement, to either assume or reject any Executory Contracts or to
include additional Executory Contracts to be either [(a)] assumed under the Plan
[or (b) rejected under the Plan], in each case upon providing notice to the
non-Debtor party thereto.

      
        
           

        

        
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      7.2.           Cure of Defaults of Assumed Executory
Contracts.  Any monetary amounts by which each Executory
Contract to be assumed pursuant to the Plan is in default shall be satisfied,
pursuant to Bankruptcy Code § 365(b)(1), by payment of any default amount (as
such amount has been agreed upon by the Reorganized Debtors or, in the event of
a dispute regarding such default amount, as such amount has been determined by
an order of the Bankruptcy Court) in Cash by the latest of (i) the Effective
Date (or as soon thereafter as is practicable), (ii) in the event of a dispute
regarding the default amount, within 30 days of the entry of an order of the
Bankruptcy Court establishing such default amount, (iii) the date of an order of
the Bankruptcy Court (or as soon thereafter as is practicable) approving and
authorizing the assumption or assignment of an Executory Contract not otherwise
assumed [or rejected] pursuant to the terms of the Plan, or (iv) on such other
terms as the parties to such Executory Contracts may otherwise
agree.  Notwithstanding the foregoing, in the event of a dispute
regarding:  (1) the amount of any cure payments, (2) the ability of
the Reorganized Debtors to provide “adequate assurance of future performance”
(within the meaning of Bankruptcy Code § 365) under the contract or lease to be
assumed, or (3) any other matter pertaining to assumption (each an “Assumption Dispute”), the cure
payments required by Bankruptcy Code § 365(b)(1) shall be made following the
entry of a Final Order resolving the Assumption Dispute and approving the
assumption; provided, however, that (a) in
the event the Bankruptcy Court determines that the actual cure payment owed to a
particular non-Debtor party to an Executory Contract exceeds the proposed cure
amount as set forth in the notice to be provided by the Debtors pursuant to
Section 7.3 hereof and as set forth on Exhibit D to the Disclosure Statement, or
(b) the Debtors and the applicable non-Debtor party involved in any Assumption
Dispute cannot otherwise consensually resolve such Assumption Dispute prior to
the Effective Date, the Debtors may reject the Executory Contract at issue
pursuant to Bankruptcy Code § 365 rather than paying the disputed cure amount,
by presenting a proposed order to the Bankruptcy Court for such rejection,
without any other or further notice.  In the event any Executory
Contract is so rejected, the non-Debtor party thereto shall be entitled to file
a Proof of Claim pursuant to Plan Section 7.4, which Claim shall be classified
pursuant to Plan Section 7.5, but shall not be entitled to any other or further
Claim or relief from either of the Debtors or the Reorganized
Debtors.

      

      7.3.           Notice of Proposed Cure Amount and
Objection Deadline.  The Debtors shall provide notice to the
non-Debtor party to all known Executory Contracts to be assumed of (i) the
proposed default amount owed (if any) under the applicable Executory Contract
and (ii) the last date by which such non-Debtor party may file an objection or
other response with respect to such proposed default amount.  Any non-Debtor party that fails to
object or otherwise respond in a timely manner to such notice of the proposed
default amount owed shall be deemed to have consented to such proposed amount
and to the proposed assumption by the Debtors of the applicable Executory
Contract, and may not receive any other or additional distribution or
consideration from the Debtors, the Estates, the Reorganized Debtors, or the
Assets, or otherwise seek recourse against, the Debtors, the Estates, the
Reorganized Debtors, or any of the Assets that are to be distributed under the
terms of the Plan, beyond such proposed amount owed.

      

      7.4.           Rejection Claims.

      

       
 (a)    [Each non-Debtor party to any
Executory Contract rejected under and pursuant to this Article VII shall be
entitled to file, not later than 30 days after the entry of the Confirmation
Order (the “Plan Rejection Bar
Date”), a Proof of Claim against the applicable Debtor for alleged
Rejection Claims.  If no such Proof of Claim for a Rejection Claim is
timely filed against the applicable Debtor, any such Claim shall be forever
barred and shall not be enforceable against the Debtors, the Reorganized
Debtors, or their respective Estates or Assets.  Objections to any
such Proof of Claim shall be filed not later than 90 days after such Proof of
Claim is filed (subject to any potential further extensions of such date as so
ordered and approved by the Bankruptcy Court), and the Bankruptcy Court shall
decide any such objections.  Distributions (if any) in respect of such
Claims (consistent with
the distributions to be received by Holders of other Claims in the Class into
which such Claims fall, as determined by Section 7.5 hereof) shall be made not
earlier than the later of (a) 30 days after the expiration of the 90-day period
(as such period may be extended by order of the Bankruptcy Court) for filing an
objection in respect of any
Proof of Claim filed pursuant to this Section 7.4 and (b) 30 days after
the Claim has been Allowed by a Final Order of the Bankruptcy Court, provided
that no such distribution shall be made before the Effective
Date.

      
        
           

        

        
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 (b)   Notwithstanding anything to the contrary herein, the
Plan Rejection Bar Date shall apply only to Rejection Claims with respect to
those Executory Contracts that are rejected under and pursuant to the
Plan.  Any Holder of a Rejection Claim for an Executory Contract that
is not rejected pursuant to this Plan, but whose Rejection Claim instead arises
under an Executory Contract that either has already been rejected by an order of
the Bankruptcy Court or is the subject of a separate motion to reject pending on
the Confirmation Date, must file a Proof of Claim for such Rejection Claim by
the date provided in any order relating to such Rejection Claim.]

      

      7.5.           Classification of Rejection
Claims.  Except as otherwise provided under the Plan, any
Rejection Claims (a) against Aurora shall be treated as Class 3A Claims and (b)
against HPPC shall be treated as Class 3B Claims, in each instance to the extent
they are Allowed Claims.

      

      7.6.           Reinstatement of Allowed Secondary
Liability Claims Arising From or Related to Executory Contracts Assumed by the
Debtors.  On the Effective Date, in accordance with Section
6.28 hereof, any Allowed Secondary Liability Claim arising from or related to
either Debtor’s joint or several liability for the obligations under or with
respect to:  (a) any Executory Contract that is being assumed or
deemed assumed pursuant to Bankruptcy Code § 365 by the other Debtor or
Reorganized Debtor or (b) a Reinstated Claim shall be
Reinstated.  Accordingly, such Allowed Secondary Liability Claims
shall survive and be unaffected by the entry of the Confirmation
Order.

      

      7.7.           Insurance
Policies.

      

       
 (a)    All insurance policies of the Debtors
(including, without limitation, the Directors & Officers Liability Insurance
Policies) providing coverage to the Debtors and/or the Debtors’ current or
former directors, officers, stockholders, agents, employees, representatives,
predecessors, and others for conduct in connection in any way with the Debtors,
their assets, liabilities, and/or operations, to the extent such policies are
Executory Contracts, shall be deemed assumed by the applicable Debtors as of the
Confirmation Date.  Entry of the Confirmation Order by the Bankruptcy
Court shall constitute approval of such assumptions pursuant to Bankruptcy Code
§§ 365 and 1123 or otherwise.  Each insurance policy assumed pursuant
to this Article VII shall revest in, and be fully enforceable by, the respective
Reorganized Debtor in accordance with its terms, except as may be modified by
(i) the provisions of the Plan, (ii) any order of the Bankruptcy Court approving
and authorizing its assumption, or (iii) applicable federal law.

      

       
 (b)    Notwithstanding anything provided herein to the
contrary, the Plan shall not be deemed in any way to diminish or impair the
enforceability of any insurance policies that may cover claims against either of
the Debtors and/or the Debtors’ current or former directors, officers,
stockholders, agents, employees, representatives, predecessors or any other
Person (including, without limitation, the Directors & Officers Liability
Insurance Policies).  Any failure by the Debtors to list any
particular insurance policy on any schedule of Executory Contracts to be assumed
under the Plan the Debtors may file in these Cases (either contained in the
Disclosure Statement, including, without limitation, Exhibit D thereto, the Plan
Supplement, or otherwise) shall not in any way impair the Debtors’ ability to
assume such policy, and instead, any and all such policies shall still be
assumed in accordance with this Section 7.7.

      
        
           

        

        
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      7.8.           Existing Stock Option
Plans.  Subject to the Plan’s becoming effective on the
Effective Date pursuant to Section 8.2 hereof, the Existing Stock Option Plans
shall not be assumed by Reorganized Aurora on the Effective Date, but shall
instead be cancelled and deemed terminated and of no force and effect as of the
Effective Date.

      

      7.9.           Oil and Gas
Leases.  Notwithstanding any other provision of the Plan, the
Debtors' oil and gas leases shall not constitute nor be considered executory
contracts or unexpired leases under Bankruptcy Code §§ 365 or 1123 for any
purpose under this Plan or otherwise in connection with these
Cases.  Any Claims asserted under these oil and gas leases that arose
as of the Petition Date shall constitute Class 3A Claims, and any such Claims
that arose after the Petition Date shall constitute Administrative Claims, and
in each instance shall be subject to all rights, defenses, and potential
disputes and objections of the Debtors with respect thereto.

      

      7.10.         Executory Contracts Entered Into
After the Petition Date.  Executory Contracts entered into
after the Petition Date by either Debtor (including the Management Transition
Services Agreements) may be performed by the Debtor or the Reorganized Debtor
liable thereunder in accordance with the terms and subject to the conditions of
such Executory Contract(s) in the ordinary course of
business.  Accordingly, such Executory Contracts shall survive and
remain unaffected by entry of the Confirmation Order.

      

      
        ARTICLE
VIII

      

      

      
        CONDITIONS
PRECEDENT TO CONFIRMATION AND EFFECTIVENESS

      

      

      8.1.           Conditions to
Confirmation.  Confirmation of the Plan shall not occur unless
and until the following conditions have been (i) satisfied or (ii) waived or
modified pursuant to Plan Section 8.3:  (a) the Bankruptcy Court shall
have entered an order approving the Disclosure Statement as containing adequate
information pursuant to Bankruptcy Code § 1125, and such order shall not have
been reversed, stayed, amended, or modified in any manner adverse to the Debtors
or their Estates, and (b) the Confirmation Order shall be acceptable, in form
and substance, to the Debtors and the Administrative Agents.

      

      8.2.           Conditions to
Effectiveness.  Notwithstanding any other provision of the Plan
or the Confirmation Order, the Effective Date shall not occur, and the Plan
shall not be binding on any Person, unless and until each of the following
conditions has been (a) satisfied or (b) waived or modified pursuant to Plan
Section 8.3:

      

       
 (a)    The Confirmation Order (i) shall have been
entered on the docket by the Clerk of the Bankruptcy Court in form and substance
acceptable to the Debtors and the Administrative Agents and (ii) shall not have
been reversed, stayed, amended, or modified in any manner adverse to the Debtors
or their Estates;

      

       
 (b)    The Plan Documents and all other documents
provided for under, and reasonably necessary to effectuate the (i) terms of, and
(ii) actions contemplated under, the Plan, shall be in form and substance
acceptable to the Debtors and the Administrative Agents, and shall have been
executed and delivered by the parties thereto, unless such execution or delivery
has been waived in writing by the parties benefited by such documents; provided, however, neither (i)
the execution and delivery of the New Warrants, or any form of agreement annexed
thereto, by the holder thereof, nor (b) the execution and delivery of any
documents establishing the terms and conditions of a Management and Director
Equity Plan, shall be a condition to the occurrence of the Effective
Date.  The Plan Documents to which the condition in this sub-paragraph
(b) refers include, but are not limited to, the following
documents:

      
        
           

        

        
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      (1)           the
Amended and Restated Articles of Incorporation, the Amended and Restated
By-Laws, and the Amended and Restated LLC Agreement;

      

      (2)           the
Exit Credit Facility and the Exit Credit Facility Guarantee, the New Secured
Notes, the Working Capital Loans Notes, and any document memorializing the New
Aurora Preferred Stock, and all instruments, certificates, guarantees,
agreements, and documents contemplated by Plan Sections 6.13, 6.17, and
6.18;

      

      (3)           the
Registration Rights Agreement; and

      

      (4)           the
Voting Agreement (to the extent applicable in accordance with Section 6.19(b)
hereof).

      

       
 (c)    all conditions precedent to the consummation
of, and the funding obligation under, the Exit Credit Facility shall have been
satisfied or waived in accordance with the terms thereof;

      

       
(d)    the Amended and Restated Articles of Incorporation
and the Amended and Restated LLC Agreement shall have been adopted and duly
filed (if required by applicable law) with the applicable authority of each
Reorganized Debtor’s jurisdiction of incorporation or formation in accordance
with such jurisdiction’s state corporate or limited liability company laws (as
applicable);

      

       
 (e)    the new respective Board of Directors and Board
of Managers of the Reorganized Debtors (as applicable) shall have been
appointed; and

      

       
 (f)     all authorizations, consents, and
regulatory approvals required (if any) in connection with the effectiveness of
this Plan shall have been obtained.

      

      If the
Effective Date (i) does not occur for any reason within 90 days following the
entry of the Confirmation Order, unless such time period is extended by the
Debtors with the consent of the Administrative Agents, or (ii) if on or before
90 days following the entry of the Confirmation Order, either (a) the Debtors
determine, or (b) the Bankruptcy Court determines in a Final Order, that one or
more of the conditions to effectiveness set forth in Plan Section 8.2 will not
be satisfied within such 90-day period, then the Plan and the Confirmation Order
shall immediately, upon such applicable date, be deemed null and void and, in
such event, nothing contained herein or therein shall be deemed to constitute a
waiver or release of any Claims by or against, or any Interests in, the Debtors
or any other Person or to prejudice in any manner the rights of the Debtors or
any Person in any further proceedings (whether or not such proceedings involve
either of the Debtors).  If the Confirmation Order is reversed,
vacated, or revoked on appeal or otherwise by a court of competent jurisdiction,
the Plan shall be null and void ab initio in all respects,
and, without limiting the generality of the foregoing, nothing contained in the
Plan or the Disclosure Statement shall:  (i) constitute a waiver or
release of any Claims by or against, or any Interests in, the Debtors; (ii)
prejudice in any manner the rights of the Debtors; (iii) constitute an
admission, acknowledgement, offer, or undertaking by the Debtors in any respect;
or (iv) affect or impair, in any way, any and all Claims against the Debtors,
any and all claimed contractual subordination rights and claims between or among
the Holders of Claims against the Debtors, and any and all rights and claims
between or among holders of Claims relating in any manner to distributions on
account of Claims against the Debtors based upon any claimed contractual
subordination rights.

      
        
           

        

        
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      8.3.           Waiver or Modification of
Conditions.  The Debtors may with the consent of the
Administrative Agents, but shall have no obligation to, waive or modify in
writing, at any time, any of the conditions set forth in this Article VIII,
without notice, without leave of or order of the Bankruptcy Court, and without
any formal action other than proceeding to consummate the Plan.  The
failure to (a) satisfy or (b) waive or modify any such condition may be asserted
by the Debtors regardless of the circumstances giving rise to the failure of
such conditions to be (a) satisfied or (b) waived or modified.

      

      
        ARTICLE
IX

      

      
         

        TITLE
TO PROPERTY AND RELEASES

      

      

      9.1.           Vesting of
Property.  Except as otherwise provided in the Plan or the
Confirmation Order, upon the Effective Date, but retroactive to the Confirmation
Date, (a) the Reorganized Debtors shall continue to exist as separate legal
entities with all the powers of corporations and/or limited liability companies
(as applicable) under applicable law and without prejudice to any right to alter
or terminate such existence (whether by merger or otherwise) under applicable
state law, and (b) all Assets of the respective Debtors (including, but not
limited to, Aurora’s equity interests in HPPC and the Debtors’ respective
interests in any non-Debtor subsidiary or Affiliate (to the extent that any such
non-Debtor subsidiary or Affiliate has not been dissolved, sold, or otherwise
transferred under applicable law prior to the Effective Date), but not including
the NW Bank Note Collateral, which shall be transferred to the Holder of the
Allowed Class 2D Claim, subject to the terms and conditions of the Plan,
including Section 4.4(b) hereof), wherever situated, shall vest in the
applicable Reorganized Debtor, subject to the provisions of the Plan and the
Confirmation Order.  Thereafter, each Reorganized Debtor may operate
its business, incur debt and other obligations in the ordinary course of its
business, and may otherwise use, acquire, and dispose of property free of any
restrictions of the Bankruptcy Code, the Bankruptcy Rules, the Local Bankruptcy
Rules, and the Bankruptcy Court.  After the Effective Date, but
retroactive to the Confirmation Date, all property retained by the Reorganized
Debtors pursuant hereto shall be free and clear of all Claims, debts, Liens,
security interests, obligations, encumbrances, and interests of Creditors and
Interest Holders of the Debtors and all other Persons, except for (i) as is
contemplated by or provided in the Plan or the Confirmation Order; (ii) the
obligation to perform according to the Plan and the Confirmation Order; and
(iii) the respective Claims, debts, Liens, security interests, encumbrances, and
interests (a) of those Holders of (1) Allowed Class 2C Claims whose Secured
Claims the applicable Debtor elects to Reinstate pursuant to Plan Section 4.3
(as opposed to the applicable Debtor’s electing to (A) pay the amount of such
Allowed Class 2C Claim in full, (B) return the underlying collateral to such
Class 2C Creditor, or (C) otherwise satisfy such Allowed Claim in a manner
provided for under Section 4.3 of the Plan), or (2) the NW Bank LCs Collateral
(subject to the limitations set forth in Section 4.4(b) of the Plan), in the
event  Aurora elects to keep the NW Bank LCs in place, or (b) arising
in connection with the Exit Credit Facility (including, without limitation, the
New Secured Notes and the Working Capital Loans Notes) and the Exit Credit
Facility Guarantee.

      
        
           

        

        
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      9.2.           Discharge and
Injunction.  Pursuant to Bankruptcy Code §
1141(b) or otherwise, except as may otherwise be provided herein or in the
Confirmation Order, upon the occurrence of the Effective Date, the rights
afforded and the payments and distributions to be made under this Plan shall be
in complete exchange for, and in full and unconditional settlement,
satisfaction, discharge, and release of, any and all existing debts, Claims, and
Interests of any kind, nature, or description whatsoever against the Debtors or
any of the Debtors’ Assets or other property, and shall effect a full and
complete release, discharge, and termination of all Liens, security interests,
or other Claims, interests, or encumbrances upon all of the Debtors’ Assets and
property.  No Creditor or Interest Holder of the Debtors nor any other
Person may receive any distribution from the Debtors, the Estates, the
Reorganized Debtors, or the Assets, or seek recourse against, the Debtors, the
Estates, the Reorganized Debtors, or any of the Assets that are to be
distributed under the terms of the Plan, except for those distributions
expressly provided for under the Plan.  All Persons are precluded from
asserting, against any property that is to be distributed under the terms of the
Plan, any Claims, Interests, obligations, rights, Causes of Action, liabilities,
or equity interests based upon any act, omission, transaction, or other activity
of any kind or nature that occurred prior to the Confirmation Date, other than
as expressly provided for in the Plan or the Confirmation Order, whether or not
(a) a Proof of Claim or Proof of Interest based upon such debt or Interest (as
applicable) is filed or deemed filed under Bankruptcy Code § 501; (b) a Claim or
Interest based upon such debt or Interest (as applicable) is allowed under
Bankruptcy Code § 502; or (c) the Holder of a Claim or Interest based upon such
debt or Interest (as applicable) has accepted the Plan, is deemed to have accepted the Plan
under Bankruptcy Code § 1126(f), or is deemed to have rejected the Plan under
Bankruptcy Code § 1126(g).  Except as otherwise provided in the Plan
or the Confirmation Order with respect to a Claim that is expressly Reinstated
under the terms and conditions of the Plan, all Holders of Claims and Interests
arising prior to the Effective Date shall be permanently barred and enjoined
from asserting against the Debtors, the Estates, the Reorganized Debtors, their
successors, or the Assets, any of the following actions on account of such Claim
or Interest: (a) commencing or continuing in any manner any action or other
proceeding on account of such Claim or Interest against property to be
distributed under the terms of the Plan, other than to enforce any right to
distribution with respect to such property under the Plan; (b) enforcing,
attaching, collecting, or recovering in any manner any judgment, award, decree,
or order against any of the property to be distributed under the terms of the
Plan, other than as permitted under subclause (a) above; (c) creating,
perfecting, or enforcing any Lien or encumbrance against any property to be
distributed under the terms of the Plan; (d) asserting any right of setoff,
subrogation, or recoupment of any kind, directly or indirectly, against any
obligation due the Debtors or the Reorganized Debtors, the Assets or any other
property of the Debtors or the Reorganized Debtors, or any direct or indirect
transferee of any property of, or successor in interest to, any of the foregoing
Persons; and (e) acting or proceeding in any manner, in any place whatsoever,
that does not conform to, or comply with, the provisions of the
Plan.

      
        
           

        

        
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      9.3.           No Waiver of
Discharge.  Except as otherwise specifically provided herein,
nothing in this Plan shall be deemed to waive, limit, or restrict in any way the
discharge granted to the Debtors upon Confirmation of the Plan by Bankruptcy
Code § 1141.

      

      9.4.           Post-Consummation Effect of Evidences
of Claims or Interests.  Except as otherwise expressly set
forth in this Plan
(including, without limitation, Plan Sections 4.5 and 6.2), any and all notes,
stock certificates, and/or other evidences of Claims against, or Interests in,
either of the Debtors shall, effective upon the Effective Date, represent
only the right to participate in the distributions contemplated by the Plan, if
any, and shall otherwise be cancelled and of no force and effect as of the
Effective Date.

      

      9.5.           Term of Injunctions or
Stays.  Unless otherwise provided for in this Plan or the
Confirmation Order, or any other Final Order of the Bankruptcy Court, all
injunctions or stays provided for in these Cases pursuant to Bankruptcy Code §
105, § 362, or otherwise, and in effect on the Confirmation Date, shall remain
in full force and effect until the Effective Date.

      

      9.6.           Releases by Holders of Claims and
Interests.

      

       
 (a)   Except as otherwise provided herein, as of the
Effective Date, each Non-Debtor Releasing Party, in consideration of the
obligations of the Debtors and the Reorganized Debtors under the Plan and the
Cash, the New Aurora Preferred Stock, the New Aurora Class A Common Stock, the
Exit Credit Facility (including the New Secured Notes and the Working Capital
Loans Notes), the New Warrants, and other contracts, instruments, releases,
agreements, and documents to be executed and delivered in connection with the
Plan, and in consideration of (i) the efforts of the Released Parties to
facilitate the expeditious reorganization of the Debtors and the implementation
of the restructuring contemplated by the Plan and (ii) certain of the Released
Parties’ agreeing to have their Employee Termination Claims treated in the
manner set forth in Section 6.29 hereof, shall be deemed to have conclusively,
absolutely, unconditionally, irrevocably, and forever released and discharged
the Released Parties from any and all claims, obligations, rights, Causes of
Action, or liabilities (including, but not limited to, any claims arising out
of, or relating to, any alleged fiduciary or other duty; any alleged violation
of any federal or state securities law or any other law relating to creditors’
rights generally; any of the Released Parties’ or the Non-Debtor Releasing
Parties’ ownership of any securities of either of the Debtors; or any derivative
claims asserted on behalf of a Debtor), whether liquidated or unliquidated,
fixed or contingent, matured or unmatured, known or unknown, foreseen or
unforeseen, existing or hereafter arising, in law, equity or otherwise, that
such Non-Debtor Releasing Party ever had, now has, or may have that are based in
whole or in part on any act, omission, transaction, or occurrence from the
beginning of time through and including the Effective Date in any way relating
to the Debtors, these Cases and the commencement thereof, or the Plan; the
Disclosure Statement; the Plan Documents; the formulation, negotiation,
preparation, dissemination, implementation, and/or administration of the Plan,
the Disclosure Statement, and the Plan Documents; the confirmation and
consummation of the Plan; the subject matter of, or the transactions or events
giving rise to, any Claim or Interest of such Non-Debtor Releasing Party, any
security previously issued by either of the Debtors, and any and all claims
based upon or arising out of such actions or omissions shall be forever and
completely waived and released by the Non-Debtor Releasing Parties; provided, however, this Section
9.6(a) shall not release, and the Non-Debtor Releasing Parties do not waive the
right to enforce, the Debtors’ or the Reorganized Debtors’ duties, obligations,
covenants, and agreements under (a) the Plan, (b) any settlement agreement
approved by the Bankruptcy Court in these Cases, (c) the Assumed Contracts, or
(d) the Plan Documents to be delivered under the Plan; provided further, however, that the
release set forth in this Section 9.6(a) is in addition to the discharge of
Claims and termination of Interests provided in this Plan and under the
Confirmation Order and the Bankruptcy Code; and provided further, however, that nothing
in this Section 9.6(a) shall be deemed to assert or imply any admission of
liability on the part of any of the Released Parties.

      
        
           

        

        
          -51-

          
            

          

        

        
           

        

      

      

       
 (b)    All Non-Debtor Releasing Parties shall be
forever precluded from asserting any of the claims released pursuant to this
Section 9.6 against any of the Released Parties or any of the Released Parties’
respective assets; and to the extent that any Non-Debtor Releasing Party
receives monetary damages from any Released Party on account of any claim
released pursuant to this Section 9.6, such Non-Debtor Releasing Party hereby
assigns all of its right, title, and interest in and to such recovery to the
Released Parties against whom such money is recovered.

      

       
 (c)    Notwithstanding any provision of the Plan to
the contrary, the releases contained in this Section 9.6 shall not be construed
as, or operate as a release of, or limitation on (i) any claims by the
Non-Debtor Releasing Parties against the Released Parties that do not relate to
or involve the Debtors or these Cases, (ii) any claims, obligations, rights,
causes of action, or liabilities by the Non-Debtor Releasing Parties against the
Released Parties arising out of any action or omission to the extent that such
action or omission is determined in a Final Order by a court of competent
jurisdiction to have constituted willful misconduct or fraud, or (iii)
objections to Claims.

      

      9.7.           Release by the Debtor Releasing
Parties.  On
the Effective Date, pursuant to Bankruptcy Code § 1123(b), Bankruptcy Rule 9019,
or otherwise, and except as otherwise specifically provided in the Plan or in
the Plan Documents, the Debtor Releasing Parties, in consideration of the
obligations of the Debtors and the Reorganized Debtors under the Plan and the
Cash, the New Aurora Preferred Stock, the New Aurora Class A Common Stock, the
Exit Credit Facility (including the New Secured Notes and the Working Capital
Loans Notes), the New Warrants, and other contracts, instruments, releases,
agreements, and documents to be executed and delivered in connection with the
Plan, and in consideration of (i) the efforts of the Released Parties to
facilitate the expeditious reorganization of the Debtors and the implementation
of the restructuring contemplated by the Plan and (ii) certain of the Released
Parties’
agreeing to have their Employee Termination Claims treated in the manner set
forth in Section 6.29
hereof, shall be deemed to have conclusively, absolutely, unconditionally,
irrevocably, and forever released and discharged the Released Parties from any
and all claims, obligations, suits, judgments, damages, demands, debts, rights,
Causes of Action, and liabilities, whether liquidated or unliquidated, fixed or
contingent, matured or unmatured, known or unknown, foreseen or unforeseen, then
existing or hereafter arising, in law, equity, or otherwise, that such Debtor
Releasing Party ever had, now has, or may have that are based in whole or in
part on any act, omission, transaction, or occurrence taking place on or prior
to the Effective Date in any way relating to the Debtors, these Cases and the
Commencement thereof, or the Plan; the Disclosure Statement; the Plan Documents;
the formulation, negotiation, preparation, dissemination, implementation, and/or
administration of the Plan, the Disclosure Statement, and the Plan Documents;
the confirmation and consummation of the Plan; the subject matter of, or the
transactions or events giving rise to, any Claim or Interest of such Debtor
Releasing Party, or any security previously issued by either of the
Debtors.  The immediately preceding sentence shall not, however, apply
to (i) any indebtedness of any Person to either of the Debtors for money
borrowed by such Person or any other contractual obligation of any Person to
either of the Debtors, or (ii) any setoff or counterclaim that the Debtors may
have or assert against any Person, provided that the aggregate amount thereof
shall not exceed the aggregate amount of any Claims held or asserted by such
Person against the Debtors.  Holders of Claims and Interests
against either of the Debtors shall be
enjoined from commencing or continuing
any action, employment of process, or act to collect, offset, or recover any such claim that
could be brought on behalf of or in the name of the
Debtors.

      
        
           

        

        
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      9.8.           Injunction Related to
Releases.  The Confirmation Order will and
shall be deemed to permanently enjoin the commencement or prosecution by any
Person, whether directly, derivatively, or otherwise, of any claims,
obligations, suits, judgments, damages, demands, debts, rights, Causes of
Action, or liabilities released pursuant to the Plan (including the releases set
forth in this Article IX).

      

      9.9.           Exculpation.  No Released Party shall have or
incur, and each Released Party hereby is exculpated from, any liability to any
Person for any act taken or not taken or any omission in connection with,
arising from or relating to these Cases (and the commencement or administration
thereof); the Disclosure Statement, the Plan, or the formulation, negotiation,
preparation, dissemination, implementation, or administration of any of the
foregoing documents; the solicitation of votes in connection with Confirmation
of this Plan; the Exit Credit Facility; the Plan Documents; the Confirmation
and/or consummation of this Plan; any contract, instrument, release, or other
agreement or document created or entered into in connection with the Plan; any
other act taken or omitted to be taken in connection with, or in contemplation
of, any of the restructuring or other transactions contemplated by this Plan;
and the property to be distributed or otherwise transferred under this
Plan; provided further, however, that nothing in this Plan Section
9.9 shall release any
entity from any claims, obligations, rights, causes of action, or liabilities arising out of such
entity’s fraud or willful misconduct.  Each Released Party
shall be entitled reasonably to rely upon the advice of counsel with respect to
its duties and responsibilities under this Plan, and shall be fully protected in
acting or refraining from acting in accordance with such
advice.

      

      
        ARTICLE
X

      

      

      
        MODIFICATION
AND RESERVATION OF RIGHTS IN THE

      

      
        EVENT
OF NONACCEPTANCE OF THE PLAN

      

      

      The
Debtors hereby reserve the right to request that the Bankruptcy Court confirm
the Plan over the objection of any impaired Class or Interest in accordance with
the applicable provisions of Bankruptcy Code § 1129(b).  In the event
that any impaired Class or Classes of Allowed Claims that is entitled to vote
with respect to the Plan does not accept the Plan, upon the written request of
the Debtors filed with the Bankruptcy Court, the Plan shall be modified,
revised, and amended to provide such treatment as set forth in such request, to
ensure that the Plan does not discriminate unfairly, and is fair and equitable,
with respect to the Classes rejecting the Plan, and, in particular, to provide
the treatment necessary to meet the requirements of Bankruptcy Code § 1129(a)
and (b) with respect to (i) the rejecting Classes and (ii) any other Classes
adversely affected by the modifications caused by this Article X.  In
particular, the treatment of any rejecting Classes or adversely affected Classes
may be modified and amended from that set forth in Article V of the Plan, even
if less favorable, to the minimum treatment necessary to meet the requirements
of Bankruptcy Code § 1129(a) and (b).  These modifications may
include, but shall not be limited to, cancellation of all amounts otherwise
payable under the Plan to the rejecting Classes and to any junior Classes
affected thereby (even if such Classes previously accepted the Plan) consistent
with Bankruptcy Code § 1129(b)(2)(B)(ii) and (C)(ii).

      
        
           

        

        
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        ARTICLE
XI

      

      

      
        SUBSTANTIVE
CONSOLIDATION OF THE DEBTORS

      

      

      Although
the Debtors have not, as of the date of the filing of this Plan sought such
relief, the Debtors reserve the right to seek, and only upon the consent of the
Administrative Agents, the entry of an order of the Bankruptcy Court providing
for the substantive consolidation of the Debtors for the purpose of implementing
the Plan, including for purposes of voting, confirmation, and distributions to
be made under the Plan, subject to the right of any party in interest to object
to such relief.

      

      
        ARTICLE
XII

      

      

      
        RETENTION
OF JURISDICTION

      

      

      12.1.         Claims and
Actions.  Following the Effective Date, the Bankruptcy Court
shall retain such jurisdiction over these Cases as is legally permissible,
including, without limitation, such jurisdiction as is necessary to ensure that
the intents and purposes of the Plan are carried out.  The Bankruptcy
Court shall also expressly retain jurisdiction:  (a) to hear and
determine all Claims against, or Interests in, either of the Debtors; and (b) to
enforce all Causes of Action that may exist on behalf of either of the Debtors
that are not otherwise waived or released under the Plan.

      

      12.2.         Retention of Additional
Jurisdiction.  Following the Effective Date, the Bankruptcy
Court shall also retain jurisdiction for the purpose of classification of Claims
and Interests, the re-examination of Claims that have been Allowed, and the
dispositions of such objections as may be filed to any Claims, including
Bankruptcy Code § 502(c) proceedings for estimation of Claims.  The
Bankruptcy Court shall further retain jurisdiction for the following additional
purposes:

      

        (a)    to
decide all questions and disputes regarding title to the respective Assets of
the Debtors, all Causes of Action, controversies, disputes, or conflicts,
whether or not subject to any pending action as of the Effective Date, between
either of the Debtors and any other party, including, without limitation, any
right to recover assets pursuant to the provisions of the Bankruptcy
Code;

      

        (b)    to
modify the Plan after the Effective Date in accordance with the terms of the
Plan and pursuant to the Bankruptcy Code and the Bankruptcy Rules;

      

        (c)    to
enforce and interpret the terms and conditions of the Plan;

      
        
           

        

        
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        (d)    to
enter such orders, including, but not limited to, such future injunctions as are
necessary to enforce the respective title, rights, and powers of the Debtors,
and to impose such limitations, restrictions, terms, and conditions on such
title, rights, and powers as the Bankruptcy Court may deem
necessary;

      

        (e)    to
enter an order closing these Cases;

      

        (f)     to
correct any defect, cure any omission, or reconcile any inconsistency in the
Plan or the Confirmation Order as may be necessary to implement the intents and
purposes of the Plan;

      

       
(g)    to decide any and all objections to the allowance of
Claims or purported Liens, and to otherwise determine the amount of the NW Bank
Secured Claim and the NW Bank Deficiency Claim in the event of any dispute with
NW Bank with respect thereto;

      

       (h)    to
determine any and all applications for allowances of compensation and
reimbursement of expenses and the reasonableness of any fees and expenses
authorized to be paid or reimbursed under the Bankruptcy Code or the
Plan;

      

       
(i)     to determine any applications or motions
pending on the Effective Date for the rejection, assumption, or assignment of
any Executory Contract and to hear and determine, and, if need be, to liquidate
any and all Claims and/or disputes arising therefrom;

      

        (j)     to
determine any and all applications, adversary proceedings, and contested matters
that may be pending on the Effective Date;

      

        (k)    to
consider any modification of the Plan, whether or not the Plan has been
substantially consummated, and to remedy any defect or omission or to reconcile
any inconsistency in any order of the Bankruptcy Court, to the extent authorized
by the Plan or the Bankruptcy Court;

      

        (l)     to
determine all controversies, suits, and disputes that may arise in connection
with the interpretation, enforcement, or consummation of the Plan or any Plan
Document;

      

        (m)   to
consider and act on the compromise and settlement of any Claim against or Cause
of Action by or against either of the Debtors arising under or in connection
with the Plan;

      

       
(n)    to issue such orders in aid of execution of the Plan
as may be authorized by Bankruptcy Code § 1142;

      

       
(o)    to protect any Released Party against any Claims or
Interests released pursuant to Article IX of the Plan; and

      

        (p)    to
determine such other matters or proceedings as may be provided for under Title
28 or any other title of the United States Code, the Bankruptcy Code, the
Bankruptcy Rules, other applicable law, the Plan, or in any order or orders of
the Bankruptcy Court, including, but not limited to, the Confirmation Order or
any order that may arise in connection with the Plan or the Confirmation
Order.

      
        
           

        

        
          -55-

          
            

          

        

        
           

        

      

      12.3.         Failure of Bankruptcy Court to
Exercise Jurisdiction.  If the Bankruptcy Court abstains from
exercising or declines to exercise jurisdiction, or is otherwise without
jurisdiction over any matter arising out of these Cases, including the matters
set forth in this Article XII, this Article XII shall not prohibit or limit the
exercise of jurisdiction by any other court having competent jurisdiction with
respect to such matter.

      

      
        ARTICLE
XIII

      

      

      
        MISCELLANEOUS
PROVISIONS

      

      

      13.1.         Governing
Law.  Except to the extent the Bankruptcy Code or Bankruptcy
Rules are applicable, and subject to the provisions of the Plan Documents and
any other contract, instrument, release, indenture, or other agreement or
document entered into in connection with the Plan, the rights and obligations
arising under the Plan shall be governed by, and construed and enforced in
accordance with, the laws of the State of Michigan, without giving effect to the
principles of conflicts of law thereof.

      

      13.2.         Revocation or Withdrawal of the
Plan.  The Debtors have the right to revoke or withdraw the
Plan prior to the Confirmation Date.  If the Debtors do so revoke or
withdraw the Plan, then the Plan shall be null and void and, in such event,
nothing contained herein shall be deemed to (a) constitute a waiver or release
of any Claims by or against, or any Interests in, the Debtors or any other
Person or (b) prejudice in any manner the rights of the Debtors or any Person in
any further proceedings involving either of the Debtors.

      

      13.3.         Successors and
Assigns.  The rights, benefits, and obligations of any Person
named or referred to in the Plan shall be binding upon, and shall inure to the
benefit of, the heirs, executors, administrators, successors, or assigns of such
Person.

      

      13.4.         Time.  In computing
any period of time prescribed or allowed by the Plan, the provisions of
Bankruptcy Rule 9006(a) shall apply, and, among other things, the day of the
act, event, or default from which the designated period of time begins to run
shall not be included.  The last day of the period so computed shall
be included, unless it is not a Business Day or, when the act to be done is the
filing of a paper in court, a day on which weather or other conditions have made
the clerk’s office inaccessible, in which event the period runs until the end of
the next day which is not one of the aforementioned days.  When the
period of time prescribed or allowed is less than eight calendar days,
intermediate days that are not Business Days shall be excluded in the
computation.

      

      13.5.         Modification of the Plan Prior to or
After the Entry of the Confirmation Order.  The Debtors reserve
the right to alter, amend, or modify the Plan prior to or after the entry of the
Confirmation Order.  After the entry of the Confirmation Order, the
Debtors or the Reorganized Debtors, as the case may be, upon order of the
Bankruptcy Court, may amend or modify the Plan in accordance with Bankruptcy
Code § 1127.

      

      13.6.         No Penalty or Late
Charges.  Except as expressly stated in the Plan, or allowed by
a Final Order of the Bankruptcy Court, no penalty or late charge is to be
allowed on any Claim subsequent to the Petition Date.

      
        
           

        

        
          -56-

          
            

          

        

        
           

        

      

      

      13.7.         Professional Fees. No
Professional Fees shall be paid with respect to any Claim or Interest except as
specified herein or as allowed by an order of the Bankruptcy
Court.  All final applications for Professional Fees for services
rendered in connection with these Cases prior to and including the Confirmation
Date shall be filed with the Bankruptcy Court not later than 90 days after the
Effective Date.

      

      13.8.         Amounts of Claims. All
references to Claims and amounts of Claims refer to the amount of the Claim
allowed by Final Order of the Bankruptcy Court or by the Plan; provided, however, that Claims
that have been objected to and that have not been allowed or disallowed prior to
the day set for return of Ballots shall be voted and counted, if at all, at
$0.  The Debtors and other interested parties reserve the right, both
before and after Confirmation, to object to Claims so as to have the Bankruptcy
Court determine or estimate the Allowed amount of such Claim under the
Plan.

      

      13.9.         Deletion of Certain
Classes.  Any Class that is not occupied as of the date of the
commencement of the hearing conducted by the Bankruptcy Court to consider the
proposed Confirmation of the Plan by an Allowed Claim, or a Claim temporarily
allowed under Bankruptcy Rule 3018, shall be deemed deleted from the Plan for
all purposes.

      

      13.10.       Bankruptcy Code § 1145 and Other
Exemptions.  Pursuant to Bankruptcy Code § 1145(a)(1), the
issuance of any securities under the Plan, including, without limitation, the
New Aurora Preferred Stock, the New Aurora Class A Common Stock, the New
Warrants, the New Secured Notes, and the Working Capital Loans Notes, to the
extent any of the foregoing constitute “securities” under applicable law, shall
be exempt from the registration requirements of the Securities Act, and any
state or local laws requiring registration for the offer or sale of
securities.  All such securities, when issued or sold, shall be freely
transferable by the recipients thereof, subject to:  (i) the
provisions of Bankruptcy Code § 1145(b) relating to “underwriters,” as defined
therein, (ii) any restrictions contained in the terms of the securities
themselves; or (iii) any restrictions on the securities that have been agreed to
by the Holder of the securities with respect thereto.  Any securities
to be issued under the Plan shall be issued without further act or action under
applicable law, regulation, order, or rule.  To the maximum extent
permitted by law, pursuant to Section 4(2) of the Securities Act, Regulation D
of the Securities Act, Rule 701 promulgated under the Securities Act, or
otherwise, the issuance of any shares of the New Aurora Class B Common Stock or
other equity securities of Reorganized Aurora in connection with the exercise of
the New Warrants or pursuant to the Management and Director Equity Plan shall be
exempt from the registration requirements of the Securities Act, and any state
or local laws requiring registration for the sale of securities.

      

      13.11.       Bankruptcy Code § 1146(a)
Exemption.  Pursuant to Bankruptcy Code § 1146(a), the
issuance, transfer, or exchange of any security under the Plan; the making or
delivery of any instrument of transfer pursuant to, in implementation of, or as
contemplated by the Plan; and the revesting, transfer, assignment, or sale of
any real or personal property of either of the Debtors pursuant to, in
implementation of, or as contemplated by the Plan shall not be taxed under any
state or local law imposing a stamp tax, transfer tax, or similar tax or
fee.

      
        
           

        

        
          -57-

          
            

          

        

        
           

        

      

      13.12.       Applicability of Bankruptcy Code §
1125.  The protection afforded by Bankruptcy Code § 1125(e)
with regard to the solicitation of acceptances or rejections of the Plan and
with regard to the offer, issuance, sale, or purchase of the New Aurora
Preferred Stock, the New Aurora Class A Common Stock (including any and all
shares of common equity of Reorganized Aurora issued upon the exercise of the
New Warrants), the New Aurora Class B Common Stock, the New Warrants, the New
Secured Notes, the Working Capital Loans Notes, and/or any other securities or
notes issued in connection with the Plan, the Confirmation Order, or a Plan
Document, shall apply to the fullest extent provided by law, and the entry of
the Confirmation Order shall constitute the determination by the Bankruptcy
Court that the Debtors, the DIP Facility Lenders, the Creditors Committee, the
First Lien Loan Lenders, the Second Lien Loan Lenders, the Administrative
Agents, and each of their respective officers, directors, partners, employees,
members, agents, attorneys, accountants, financial advisors, investment bankers,
dealer-managers, placement agents, and other professionals, shall have acted in
good faith and in compliance with the applicable provisions of the Bankruptcy
Code pursuant to Bankruptcy Code § 1125(e) and, therefore, are not liable on
account of such solicitation or participation, for violation of any applicable
law, rule, or regulation governing solicitation of acceptance or rejection of a
plan or the offer, issuance, sale, or purchase of securities.

      

      13.13.       Substantial
Consummation.  On the Effective Date, the Plan shall be deemed
to be substantially consummated under Bankruptcy Code §§ 1101 and
1127(b).

      

      13.14.       Rules of
Interpretation.

      

       
 (a)    For purposes of the Plan:  (i)
whenever from the context it is appropriate, each term, whether stated in the
singular or the plural, shall include both the singular and the plural, and
pronouns stated in the masculine, feminine, or neuter gender shall include the
masculine, feminine, and the neuter gender; (ii) any reference in the Plan to a
contract, instrument, release, indenture, or other agreement or document being
in a particular form or on particular terms and conditions means that such
document shall be substantially in such from or substantially on such terms and
conditions; (iii) any reference in the Plan to an existing document or exhibit
filed, or to be filed, shall mean such document or exhibit, as it may have been
or may be amended, modified, or supplemented in accordance with its terms; (iv)
unless otherwise specified, all references in the Plan to Sections, Articles,
and Exhibits are references to Sections, Articles, and Exhibits of or to the
Plan; (v) the words “herein” and “hereto” refer to the Plan in its entirety
rather than to a particular portion of the Plan; (vi) captions and headings and
references to Articles and Sections are inserted for convenience of reference
only and are not intended to be a part of or to affect the interpretation of the
Plan; (vii) the terms “including,” “including, but not limited to,” and
“including, without limitation,” shall be deemed interchangeable and given the
same interpretation; and (viii) the rules of construction set forth in
Bankruptcy Code § 102 shall apply.

      

       
 (b)    This Plan is the product of extensive
discussions and negotiations between and among the Debtors, the First Lien Loan
Lenders, the Second Lien Loan Lenders, the DIP Facility Lenders, the Exit Credit
Facility Lenders, and the Administrative Agents.  Each of the
foregoing was represented by counsel who either (i) participated in the
formulation and documentation of, or (ii) was afforded the opportunity to review
and provide comments on, the Plan, the Disclosure Statement, the Plan Documents,
and any other documents ancillary thereto.  Accordingly, the general
rule of contract construction known as “contra preferentem” shall not
apply to the construction or interpretation of any provision of this Plan, the
Disclosure Statement, any of the Plan Documents, or the Confirmation
Order.

      
        
           

        

        
          -58-

          
            

          

        

        
           

        

      

      13.15.       Severability.  Except
as to terms which, if unenforceable, would frustrate the overall purposes of
this Plan, should any provision in the Plan be determined to be unenforceable,
such determination shall in no way limit or affect the enforceability and
operative effect of any or all other provisions of the Plan.

      

      13.16.       Implementation.  The
Debtors, the Reorganized Debtors, the First Lien Loan Lenders, the Second Lien
Loan Lenders, the Administrative Agents, the DIP Facility Lenders, the Creditors
Committee and any other Committee, and any and all Exit Credit Facility Lenders,
shall take all steps, and execute all documents, including appropriate releases
and certificates, reasonably necessary or appropriate to effectuate the
provisions contained in this Plan.

      

      13.17.       Inconsistency.  In
the event of any inconsistency between the Plan and the Disclosure Statement,
the provisions of the Plan shall govern; in the event of any inconsistency
between the Plan or the Confirmation Order and any Plan Document, the provisions
of such Plan Document shall govern (except to the extent of any such
inconsistencies that are adverse to the Debtors, the Estates, or the Reorganized
Debtors, in which case the Plan or the Confirmation Order, as applicable, shall
govern).

      

      13.18.       Service of
Documents.  Any pleading, notice or other document required by
the Plan to be served on or delivered to the following parties shall be sent by
first class U.S. mail, postage prepaid to:

      

      The
Debtors and the Reorganized Debtors:

      

      Aurora
Oil & Gas Corporation

      4110
Copper Ridge Drive, Suite 100

      Traverse
City, Michigan  49684

      Attn:  Ms.
Barbara E. Lawson

      

      Hudson
Pipeline & Processing Co., LLC

      4110
Copper Ridge Drive, Suite 100

      Traverse
City, Michigan  49684

      Attn:  Ms.
Barbara E. Lawson

      

      with
copies to

      

      Huron
Consulting

      12400
Coit Road, Suite 570

      Dallas,
Texas 72521

      Attn:  Mr.
Sanford R. Edlein

      

      Cahill
Gordon & Reindel llp

      Eighty
Pine Street

      New York,
New York  10005-1702

      
          
 Attn:  Joel
H. Levitin, Esq. and

      

      
        	
                 
      

              	
                Stephen
      J. Gordon

              

      

      
        
           

        

        
          -59-

          
            

          

        

        
           

        

      

      

      and

      

      Warner
Norcross & Judd LLP

      900 Fifth
Third Center, 111 Lyon Street NW

      Grand
Rapids, Michigan  49503

      Attn:  Stephen
B. Grow, Esq.

      

      13.19.       Compromise of
Controversies.  Pursuant to Bankruptcy Rule 9019, and in
consideration of the classification, distribution, and other benefits provided
under the Plan, the provisions of this Plan shall constitute a good faith
compromise and settlement of all Claims, Interests, or controversies resolved
pursuant to the Plan.  The entry of the Confirmation Order shall
constitute the Bankruptcy Court’s approval of each of the compromises or
settlements provided for in the Plan, and the Bankruptcy Court’s findings shall
constitute the Bankruptcy Court’s determination that such compromises and
settlements are in the best interests of the Debtors, the Reorganized Debtors,
the Estates, and any Person holding Claims against or Interests in either of the
Debtors.

      

      13.20.       No
Admissions.  Notwithstanding anything herein to the contrary,
nothing contained in the Plan shall be deemed as an admission by any Person with
respect to any matter set forth herein.

      

      13.21.       Filing of Additional
Documents.  On or before the Effective Date, the Debtors may
file with the Bankruptcy Court such agreements and other documents as may be
necessary and appropriate to effectuate and further evidence the terms and
conditions of the Plan.

      

      13.22.       Dissolution of the Creditors
Committee.  On the Effective Date, the Creditors Committee
shall be deemed dissolved and the members of the Creditors Committee shall be
released and discharged from all rights and duties arising from or related to
these Cases.  Unless otherwise agreed by the Reorganized Debtors, any
Professionals retained by the Creditors Committee and the members thereof shall
not be entitled to compensation or reimbursement of Professional Fees rendered
after the Effective Date, except for Professional Fees incurred in connection
with any applications for allowance of Professional Fees incurred as of the
Effective Date and approved by the Bankruptcy Court.

      
        
           

        

        
          -60-

          
            

          

        

        
           

        

      

      

      13.23.       Further
Actions.  The Debtors and the Reorganized Debtors shall be
authorized to execute, deliver, file, or record such documents, contracts,
instruments, certificates, releases, and other agreements and to take such other
action as may be reasonably necessary or appropriate to effectuate and further
evidence the terms and conditions of the Plan, any Plan Document, the
transactions contemplated herein and therein, the Management and Director Equity
Plan, the Registration Rights Agreement, the Exit Credit Facility, or any notes
or guarantee issued in connection herewith or therewith.

      

      
        	
                Dated:  October
      6, 2009

              	
                AURORA
      OIL & GAS CORPORATION

              
	 
      	
                Debtor
      and Debtor-in-Possession

              

      

      

      
        	 
      	
                By:

              	
                /s/ Sanford R. Edlein

              
	 
      	 
      	
                Sanford
      R. Edlein,

              
	 
      	 
      	
                Chief
      Restructuring Officer

              

      

      

      
        	 
      	
                HUDSON
      PIPELINE & PROCESSING CO., LLC,

              
	 
      	
                Debtor
      and Debtor-in-Possession

              

      

      

      
        
          	 
      	
                  By:

                	
                  /s/  Sanford R.
      Edlein

                
	 
      	 
      	
                  Sanford
      R. Edlein,

                
	 
      	 
      	
                  Chief
      Restructuring Officer

                

        

      

      
        
           

        

        
          -61-

          
            

          

        

        
           

        

      

       

      Submitted
by:

       

      
        
          	
                   
      

                	
                  /s/ Stephen B.
  Grow

                

        

      

      
        	
                 
      

              	
                 
      WARNER NORCROSS & JUDD LLP

              

      

      

      
        	
                 
      

              	
                 
      Stephen B. Grow (P39622)

              

      

      
        	
                 
      

              	
                 
      900 Fifth Third Center, 111 Lyon Street
NW

              

      

      
        	
                 
      

              	
                 
      Grand Rapids,
Michigan  49503

              

      

      
        	
                 
      

              	
                 
      Telephone:  (616)
752-2158

              

      

      
        	
                 
      

              	
                 
      Facsimile:  (616)
222-2158

              

      

      
        	
                 
      

              	
                 
      sgrow@wnj.com

              

      

      

      and

       

      
        	
                 
      

              	
                CAHILL
      GORDON & REINDEL llp

              

      

      

      
        	
                 
      

              	
                 
      Joel H. Levitin

              

      

      
        	
                 
      

              	
                 
      Stephen J. Gordon

              

      

      
        	
                 
      

              	
                 
      Eighty Pine Street

              

      

      
        	
                 
      

              	
                 
      New York, New
York  10005-1702

              

      

      
        	
                 
      

              	
                 
      Telephone:  (212)
701-3000

              

      

      
        	
                 
      

              	
                 
      Facsimile:  (212)
269-5420

              

      

      

      
        	
                 
      

              	
                 
      Attorneys for the Debtors and Debtors-in-

                 
      Possession

              

      

      
        	 
      

      

      
        
           

        

        
          -62-

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00163-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00163-of-00352.parquet"}]]