Document:

exv10w19

 

Exhibit 10.19

Asset Purchase Agreement

     This Asset Purchase Agreement (“Agreement”) is made on October 6, 2006, between
Bach Services & Manufacturing Company, L.L.C., a Michigan limited liability company
(“Buyer”), Aurora Oil & Gas Corporation, a Utah corporation, whose address is 4110 Copper
Ridge Drive, Suite 100, Traverse City, MI 49684 (“Aurora”), Bach Enterprises, Inc., a
Michigan corporation, whose address is 2777 Lynx Lane, Kingsley, Michigan 49659 (“Seller”),
and Richard Bach and Robin Bach, who are the sole shareholders of Seller (“Shareholders”).

Preliminary Statements

     A. Seller operates an oilfield service business, which includes but is not limited to
operations for the installation of natural gas pipelines and gathering systems, and the
construction, installation and services of compressors at 2777 Lynx Lane, Kingsley, Michigan 49659
(“Business”).

     B. Buyer desires to purchase all assets of Seller including, but not limited to, fixtures,
equipment, inventory, customer lists, accounts receivable, pending contracts and other assets as
described in that certain Letter of Intent dated July 10, 2006 between Shareholders and Aurora
(“Purchased Assets”).

Agreed Terms

     For mutual consideration, the sufficiency of which is hereby acknowledged, the parties agree
as follows:

     1. Purchase and Sale of Assets. Subject to the terms and conditions set forth in this
Agreement, at the Closing Date, as defined in Section 4, Seller shall sell, transfer and deliver to
Buyer, and Buyer shall purchase and accept from Seller, the Purchased Assets, which shall include,
without limitation, (i) the intellectual property described on Exhibit 1-A; (ii) the
equipment items and oil and natural gas interests set forth on the attached Exhibit 1-B;
and (iii) any and all claims of ownership to and all limited liability company membership interests
issued by Aurora Antrim North, LLC, and Aurora Holdings, L.L.C., as held by Seller, the
Shareholders, or any company controlled by any of them (as the case may be). The assets of Seller
listed on Exhibit 1-C. are not part of the sale and purchase contemplated by this Agreement
and are excluded from sale and shall remain the property of Seller after the Closing.

	 
	William Deneau

	 

	Richard Bach

	 

	Robin Bach

	 

 

 

     2. Liabilities.

          a. General Non-Assumption of Liabilities. Except as stated below, Buyer shall not assume,
expressly or implicitly, pay, perform or discharge any debts, liabilities or obligations of any
nature of Seller, whether or not related to the Business. Except to the extent provided in this
Agreement, all the debts, liabilities and obligations of Seller arising prior to Closing, whether
fixed or contingent, accrued or unaccrued, known or unknown, shall continue to be the
responsibility of Seller, which shall pay, perform and discharge them in accordance with their
terms, and nothing contained in this Agreement shall be construed in any fashion as imposing,
directly or indirectly, responsibility for any such debt, liability and obligation on Buyer. The
foregoing notwithstanding, Buyer shall assume those liabilities disclosed on the attached
Exhibit 2.a. 

          b. Assets Free of Liens. Except for the liabilities to be assumed by Buyer pursuant to
Section 2.a, the Purchased Assets shall be transferred to Buyer free and clear of any and all
claims, liens, mortgages, security interests, encumbrances, charges or other restrictions of title
or ownership.

     3. Purchase Price and Method of Payments. The total purchase price for the Purchased Assets
is Four Million Nine Hundred Thousand and 00/100 Dollars ($4,900,000.00) (“Price”), of
which Two Hundred Thousand and 00/100 Dollars ($200,000.00) will be paid to Seller in the form of
certified check or wire transfer for Seller’s interest in certain oil and gas leases at Closing and
the balance of which shall be in the form of Aurora’s voting common stock ( “AOG Stock”).

          a. Stock Consideration. It is intended by the parties to this Agreement that Buyer’s asset
acquisition shall constitute a reorganization for purposes of Section 368(a)(1)(C) of the Internal
Revenue Code of 1986, as amended. The parties to this Agreement adopt this Agreement as a “plan of
reorganization” for purposes of Treasury Regulation Section 1.368-2(g) and 1.368-3(a). The number
of shares of AOG Stock to be transferred in order to represent $4.7 million of the Price shall be
based on a per share price equal to the average of the American Stock Exchange daily closing prices
for the 30-day calendar period immediately preceding (and not including) the day of Closing as
reported in the Wall Street Journal, which is agreed by the parties to be $3.41 per share.
Shareholders shall receive 1,378,299 shares of AOG Stock. The AOG Stock to be transferred, as
consideration, will be unregistered, restricted stock that is subject to Rule 144 trading
limitations. There will be a one-year lock-up period for the AOG stock transferred at closing,
during which time the AOG stock may not be sold. (Although the AOG Stock shall be transferred directly

	 
	William Deneau

	 

	Richard Bach

	 

	Robin Bach

	 

-2-

 

to Shareholders, the parties acknowledge the transaction is being treated as if the AOG
Stock was transferred to the Seller and was immediately distributed to the Shareholders pursuant to
the corporate liquidation and distribution requirements in Section 368(a)(2)(G) of the Internal
Revenue Code).

          b. Covenant Consideration. In addition to the Price, Buyer shall pay the Shareholders,
collectively, One Hundred Thousand Dollars ($100,000) at the time of Closing for the covenants not
to compete contained within the employment agreements to be signed by Buyer, Aurora and the
Shareholders.

          c. Price Allocation. The Purchase Price shall be allocated in accordance with Exhibit
3.c. After the Closing, the parties shall make consistent use of the allocation, fair market
value and useful lives specified in Exhibit 3.c for all tax purposes and in all filings,
declarations and reports with the IRS in respect thereof, including the reports required to be
filed under Section 1060 of the Code. Buyer shall prepare and deliver IRS Form 8594 to Seller
within forty-five (45) days after the Closing Date to be filed with the IRS. In any proceeding
related to the determination of any tax, neither Buyer nor Seller shall contend or represent that
such allocation is not a correct allocation.

          d. Closing Adjustment.

               (1) Liability Assumption Value. As of the Closing Date, Seller shall transfer to Buyer the
accounts receivable, accounts payable, and the long-term liabilities in such amounts that Buyer’s
net liability assumption (the extent the accounts payable and long term liabilities exceed
transferred accounts receivable) (hereafter referred to as the “Liability Assumption
Value”) is no more than a total net liability assumption of Seventy Thousand Two Hundred Eleven
Dollars & 17/100 ($70,211.17).

               (2) Purchase Price Reduction. If, as of the Closing Date, the calculated Liability Assumption
Value exceeds $70,211.17, then Seller shall pay to Buyer the difference in cash, which may be
treated as an offset against the cash portion of the Price set forth in Section 3.

               (3) Purchase Price Increase. If, as of the Closing Date, the calculated Liability Assumption
Value is less than $70,211.17, then Buyer shall pay to Seller the difference in cash, which shall
be added to and considered part of the cash portion of the Price set forth in Section 3.

               (4) Audit; Penalty. For a period of sixty (60) days after the Closing Date, the parties shall
have the right to audit the calculation of the Liability Assumption Value. The Shareholders shall
be liable to Buyer to the extent Buyer

	 
	William Deneau

	 

	Richard Bach

	 

	Robin Bach

	 

-3-

 

determines the Liability Assumption Value was incorrect and that additional amounts should have
been paid to Buyer, and the Shareholders shall additionally be liable for a penalty amount of 10%
of any deficiency. If the Liability Assumption Value used at Closing was more than it should have
been, thereby decreasing the amount payable to the Seller at the Closing, then Buyer shall pay the
Seller, without penalty, the amount that would have otherwise been paid to Buyer on the Closing
Date.

     4. The Closing. The parties agree that the effective date of Closing, shall be as of the
close of business on Friday, October 6, 2006. The Closing of the purchase and sale provided for
in this Agreement shall be held at the offices of Aurora, or at such other place as may be fixed by
mutual agreement of Buyer and Seller, concurrently with the execution of this Agreement by Seller.
The date and event of Closing are respectively referred to in this Agreement as the “Closing
Date” and “Closing.” At the Closing:

          a. Seller shall deliver to Buyer:

               i. A Warranty Bill of Sale for the Purchased Assets, substantially in the form attached as
Exhibit 4.a.i;

               ii. Release of claims and/or assignments of LLC interests for Aurora Antrim North, LLC, and
Aurora Holdings, L.L.C. in the form attached as Exhibit 4.a.ii; and

               iii. Assignment of Oil and Gas Leases in the form attached as Exhibit 4.a.iii.

          b. Aurora shall deliver to Seller by wire transfer the cash portion of the Price payable to
Seller as set forth in Section 3.

          c. Aurora shall deliver to Shareholders:

               i. By wire transfer $100,000 payable for the covenants not to compete;

               ii. By advancing or paying the sum of $400,000 to Buyer and then causing Buyer to pay such
amount (subject to applicable taxes and withholding) to Shareholders pursuant to the employment
agreements between Buyer and Shareholders; and

               iii. A certified corporate resolution of Aurora’s board of directors authorizing Aurora’s
president and CEO to close the transaction pursuant to this Agreement and to transfer to the
Shareholders, within ten (10) business days from the

	 
	William Deneau

	 

	Richard Bach

	 

	Robin Bach

	 

-4-

 

Closing Date, a restricted share certificate evidencing ownership in the name of the
Shareholders of the number of fully-paid and non-assessable shares of AOG Stock as required and
calculated pursuant to Section 3.a and referencing all restrictions on transfer indicated in
Section 3.a and elsewhere in this Agreement.

     5. Representations and Warranties. In order to induce the parties to enter into this
Agreement, Aurora, Buyer and Seller each make the following representations and warranties to each
other, each of which shall be deemed to be independently relied upon by the other party:

          a. Organization and Qualification. Each of Seller, Buyer and Aurora is validly existing and
in good standing under the laws of its place of incorporation and qualified to do business in the
State of Michigan. Each of Seller, Buyer and Aurora have the requisite corporate power and
authority to execute and deliver this Agreement and in the case of Buyer, the Employment
Agreements, to consummate the transactions contemplated hereby, own all of the Purchased Assets and
to carry on the Seller’s business as it is now being conducted. Aurora further represents and
warrants that Buyer is wholly owned and controlled by Aurora.

          b. No Violation. The execution and delivery of this Agreement and the consummation of the
transactions contemplated hereby will not violate any provision of law, order, or regulation of any
governmental authority, the corporate charter, by-laws, or articles of organization or
incorporation of either party or constitute a default under any judgment, order or decree of any
court of governmental agency or instrumentality, or conflict or constitute a breach or a default
under any material agreement to which either is a party or by which it is bound.

          c. Seller’s Title to Assets. Except for liens, claims or encumbrances arising in connection
with the liabilities that are being assumed by Buyer pursuant to Section 2.a, Seller (not Buyer)
represents and warrants that it owns the Purchased Assets free and clear of liens, security
interests, mortgages, pledges, claims, encumbrances or liabilities of any kind whatsoever. Seller
further represents and warrants that all Exhibits hereto that identify or schedule the Purchased
Assets, except for the brief exhibit descriptions of Seller’s oil and gas lease interests, are
complete and accurate in all material respects.

          d. Accuracy of Aurora’s Reports to Shareholders. Except to the extent that Shareholders
have actual knowledge to the contrary on the date hereof, Aurora (not Seller or the Shareholders)
represents and warrants that Aurora’s most recent Annual Report to Shareholders on Form 10-KSB and
Aurora’s most recent Quarterly Report to Shareholders on Form 10-QSB do not make any untrue
statement of a material fact or omit to state a material fact necessary in order to make the
statements made, in light of the circumstances under which they were made, not misleading.

	 
	William Deneau

	 

	Richard Bach

	 

	Robin Bach

	 

-5-

 

          e. [Intentionally Omitted]

          f. Books and Records. The books of account and other financial records of Seller, all of
which have been made available to Buyer and Aurora, do not contain any material misstatements of
fact.

          g. Sufficiency of Assets. Except for those assets listed on Exhibit 1-C, the
Purchased Assets include all assets used by Seller in the ownership and operation of its Business.

          h. [Intentionally Omitted]

          i. Taxes. Seller has filed or caused to be filed on a timely basis all tax returns and all
reports with respect to taxes that are or were required to be filed under applicable tax laws.
Seller has paid or made provision for the payment of all taxes that have or may become due.

          j. No Material Adverse Change. Since July 10, 2006, being the date of the Letter of Intent
between Aurora, Seller and Shareholders, except for changes in business relations with Aurora,
there has not been any material adverse change in the business, operations, prospects, assets,
results of operations or condition (financial or other) of Seller, and no event has occurred or
circumstance exists that may result in such material adverse change.

          k. Legal Proceedings. There is no suit, action or other proceeding pending or threatened
against Seller or the Purchased Assets that would adversely affect the Purchased Assets. Seller
is not a party or subject to any injunction, judgment, order, notice of violation or decree,
whether or not still subject to appeal, of any governmental authority that would adversely affect
the Purchased Assets.

          l. Brokers of Finders. Neither Seller nor any of its representatives have incurred any
obligation or liability, contingent or otherwise, for brokerage or finders’ fees or agents’
commissions or other similar payments in connection with the sale of Seller’s assets.

          m. Representations and Warranties of Seller and Shareholders with Respect to AOG Stock. Each
of the Seller and Shareholders hereby acknowledges, represents and warrants to Aurora and Buyer,
severally and not jointly, that:

	 
	William Deneau

	 

	Richard Bach

	 

	Robin Bach

	 

-6-

 

               (i) Aurora has agreed to issue the AOG Stock in reliance upon the representations of Seller
and Shareholders, which by execution of this Agreement Seller and Shareholders hereby confirm, that
the AOG Stock to be acquired by Seller and Shareholders will be acquired for investment for their
own account, not as a nominee or agent, and not with a view to resale or distribution, and that
Seller and Shareholders have no present intention of selling, granting participation in, or
otherwise distributing the AOG Stock. By executing this Agreement, Seller and Shareholder further
represent that they do not presently have any contract, undertaking, agreement or arrangement with
any person to sell, transfer or grant participations to such person or to any third person, with
respect to any of the AOG stock.

               (ii) Seller and Shareholders acknowledge that: (i) the AOG Stock has not been registered
under the Securities Act of 1933, as amended (“Securities Act”) or any state securities
law; (ii) the AOG Stock may not be assigned or transferred unless it is registered or the
transaction is exempt from registration under the Securities Act and all applicable state
securities laws; and (iii) this restriction will be recorded in Aurora’s stock transfer records.

               (iii) Seller and Shareholders understand that Aurora does not have any obligation to register
the AOG Stock under the Securities Act or any state securities law.

               (iv) Seller and Shareholders acknowledge that because the AOG Stock is unregistered
restricted stock, any sale of the AOG stock is required by law to be made in compliance with Rule
144 promulgated by the Securities and Exchange Commission under the Securities Act.

               (v) Seller and Shareholders agree to comply with the Securities Act and the Securities
Exchange Act of 1934, as amended, in all of their dealings with the AOG Stock.

               (vi) Sellers and Shareholders understand and acknowledge that the AOG Stock will bear a
restrictive legend on the stock certificate (if a paper stock certificate is issued), and in the
transfer agent’s records, reflecting the fact that the shares have not been registered under the
Securities Act, have been acquired for investment and not with a view to or in connection with the
sale or distribution thereof, and may not be transferred without an effective registration
statement or opinion of counsel in a form satisfactory to Aurora that registration is not required.

               (vii) Seller and Shareholders represent and warrant that they are accredited investors as that
term is defined in Rule 501 (a) of Regulation D promulgated under the Securities Act.

	 
	William Deneau

	 

	Richard Bach

	 

	Robin Bach

	 

-7-

 

               (viii) Seller and Shareholders represent and warrant that they are residents of the state of
Michigan.

               (ix) Seller and Shareholders have sufficient knowledge and experience in financial and
business matters that they are capable of evaluating the merits and risks of owning the AOG Stock,
and are financially able to bear the risks of owning the AOG Stock.

          n. Seller’s Employees. Seller and Shareholders are aware of no pending, threatened or known
claims against Seller or Shareholders by Seller’s employees. Seller and Shareholders represent
that any employee defined benefits plans, 401(k) and fringe benefit plans are in compliance with
applicable laws, and have been operated and are in compliance with the plan documents. Seller has
maintained workers’ compensation coverage as required by applicable state law. Seller has no
obligations or potential liability for benefits to employees, former employees or their respective
dependents following termination of employment or retirement under any of the employee plans.

          o. Contracts. The contracts and agreements Seller has entered into in connection with the
Purchased Assets and the business of Seller which Buyer will assume are set out on Exhibit
5.o. Each contract and agreement identified on Exhibit 5.o. is in full force and is
valid and enforceable according to its terms, is assignable without the consent of any third party,
and is not in default in any respect.

          p. Accounts Receivable. All accounts receivable that are reflected on Exhibit 1-B
represent valid obligations arising from sales actually made or services actually performed by
Seller in the ordinary course of business. Except to the extent paid prior to the Closing Date,
such accounts receivable are or will be as of the Closing Date current and collectible net of the
respective reserves shown on the balance sheet dated September 30, 2006. There is no contest,
claim, defense or right of setoff, other than returns in the ordinary course of business of Seller,
under any contract with any account debtor of an account receivable relating to the amount or
validity of such account receivable.

          q. Accuracy as of Closing Date. Disclosure. The representations and warranties made in this
Agreement will be true and correct in all material respects on the Closing Date with the same force
and effect as if such representations and warranties had been made on and as of the Closing Date.
To the best of Shareholders’ knowledge, no representation or warranty or other statement made by
Seller in this Agreement contains any untrue statement or omits to state a material fact necessary to make
any of them, in light of the circumstances in which it was made, not misleading.

	 
	William Deneau

	 

	Richard Bach

	 

	Robin Bach

	 

-8-

 

     6. Indemnifications. Subsequent to closing:

               (i) Buyer’s Indemnity. Buyer and Aurora shall, and hereby do, defend, indemnify and
save and hold harmless Seller and Shareholders from and against any and all claims, costs,
judgments, expenses, requests for compensation, contribution, remediation, liability of any type or
nature whatsoever, other than consequential damages, which may be incurred by Seller or
Shareholders from or after the Closing Date that are attributable to or result from failure or
breach of any representation or warranty made by Buyer in Section 5 hereof or in any document or
instrument made and delivered by Buyer in connection herewith.

               (ii) Seller’s Indemnity. Seller and Shareholders shall and hereby do defend,
indemnify and save and hold harmless Buyer and Aurora from and against any and all claims, costs,
judgments, expenses, requests for compensation, contribution, remediation, liability of any type or
nature whatsoever, other than consequential damages, which may be incurred by Buyer or Aurora from
or after the Closing Date that are attributable to or result from failure or breach of any
representation or warranty made by Seller or Shareholders in Section 5 hereof or in any document or
instrument made and delivered by Seller or Shareholders in connection with Section 5. Pursuant to
this Section, for a period of one (1) year from the date hereof, Seller and Shareholders grant to
Buyer and Aurora a security interest in the AOG stock acquired by Seller under Section 3.a. above.
In the event of a loss to Buyer or Aurora in excess of the Indemnity Threshold (defined below),
Buyer or Aurora may take possession of and sell the AOG stock issued to Seller in order to recover
any loss or damage due to the breach of any representation or warranty made by Seller or
Shareholders.

               (iii) Neither party shall be entitled to indemnification from the other party under this
Section except, and to the extent that, the aggregate amount of the indemnified losses suffered by
that party exceeds Twenty Five Thousand Dollars ($25,000.00) (the “Indemnity Threshold”),
provided, however: (1) with respect to all cumulative claims, Seller and Shareholders shall
not be liable, by reason of indemnification or otherwise, for aggregate losses or damages exceeding
One Million Dollars ($1,000,000.00); and (2) for the alleged breach of any representation or
warranty concerning an oil and gas lease interest, no one lease interest set forth in any exhibit
hereto shall be construed as representing more than 5% of the Price set forth in
Section 3 and no claim for more than such amount may be brought by Buyer, regardless of future
value or alleged present value.

	 
	William Deneau

	 

	Richard Bach

	 

	Robin Bach

	 

-9-

 

     7. Conditions To Close. The obligations of either party to close pursuant to this Agreement
are subject to the following conditions having been met, or waived in writing by the other party,
at or prior to the Closing Date:

          a. Representations and Warranties. The representations and warranties made in Section 5 shall
be true and correct in all material respects on and as of the Closing Date.

          b. Delivery of Instruments of Conveyance of the Purchased Assets. Seller shall have delivered
to Buyer the documents set forth in Section 4.a, and such other documentation as reasonably
appropriate to transfer title to the Purchased Assets to Buyer.

          c. No Litigation. No investigation, suit, action or other proceedings shall be threatened or
pending before any court or governmental agency in which it is sought to restrain, prohibit or
obtain damages or other relief in connection with this Agreement or the consummation of the
transactions contemplated hereby.

          d. Approvals and Consents. All necessary approvals and consents with respect to the
transactions contemplated hereby, the absence of which would have a material and adverse effect on
either party’s rights under this Agreement.

          e. Employment Agreements. Aurora, Buyer, and each of the Shareholders shall have signed
employment agreements in the form attached hereto as Exhibit 7.e, and Buyer shall have
delivered the initial amounts due thereunder for compensation payable as of the Closing, including
consideration for the covenant not to compete.

     8. Covenants.

          a. Seller Covenants. Seller covenants and agrees with Buyer as follows:

               (1) Conduct of Seller’s Business Pending Closing. Between the date of the Agreement and the
Closing Date (unless signed simultaneously with Closing), Seller shall operate its business in the
usual, regular and ordinary manner on a basis consistent with prior years and shall use it best
efforts to preserve its present business organization intact, keep available the services of its
present employees and preserve present business relationships with persons having business relationships with it.

	 
	William Deneau

	 

	Richard Bach

	 

	Robin Bach

	 

-10-

 

               (2) Best Efforts. Seller shall apply its best efforts to cause the satisfaction of the
Closing contingencies in Section 7.

          b. Aurora and Buyer Covenants. Aurora and Buyer covenant and agree with Seller and the
Shareholders as follows:

               (1) Buyer Control. For a period of six months following the Closing, Buyer will continue to
qualify as a single member LLC treated as a disregarded entity for federal income tax purposes.

               (2) Best Efforts. Buyer shall apply its best efforts to cause the satisfaction of the Closing
contingencies in Section 7.

     9. Further Assurances. Buyer and Seller agree that, from time to time after Closing, and upon
reasonable request, they shall execute, acknowledge and deliver such other instruments as
reasonably may be required to more effectively transfer and vest in Buyer the Purchased Assets or
property or to otherwise carry out the terms and condition of this Agreement.

     10. Buyer Performance Guaranty. Anything to the contrary notwithstanding, effective as of the
Closing, Aurora guarantees Buyer’s performance of this Agreement and the employment agreements
attached as Exhibit 7.e.

     11. Disclaimer. Except as set forth in Section 5 of this Agreement: (i) Seller makes no
representation or warranty, express or implied (including those referred to in Section 2.312 of the
Michigan Uniform Commercial Code); (ii) the Purchased Assets being transferred to Buyer at the
Closing are conveyed pursuant to this Agreement “AS IS WHERE IS” on the Closing Date, and in their
present condition, and Buyer shall rely upon its own examination thereof; and (iii) Seller makes no
warranty of merchantability, suitability or fitness for a particular purpose, or quality, with
respect to any of the tangible personal property being so transferred, or as to the condition or
workmanship thereof or the absence of any defects therein, whether latent or patent.

     12. UA Form 1027. Buyer acknowledges it has received from Seller a completed and executed UA
Form 1027, Business Transferor’s Notice to Transferee of Unemployment Tax Liability and Rate, at
least two (2) business days prior to the execution of this Agreement.

	 
	William Deneau

	 

	Richard Bach

	 

	Robin Bach

	 

-11-

 

     13. Proper Notices. All notices and other communications required or permitted under this
Agreement shall be deemed to have been given upon actual receipt by registered or certified mail,
postage prepaid, or otherwise delivered by hand or messenger, fax or telegram, to the parties at
their addresses listed on page 1, or to such other changed address as such party may have given by
notice.

     14. Applicable Law. This Agreement and its validity, construction and performance shall be
governed in all respects by the laws of the State of Michigan.

     15. Integration. This Agreement and all schedules, exhibits and agreements attached set forth
the entire agreements and understanding between the parties as to the subject matter hereof, and
supersedes all prior discussions, representations, amendments or understandings of every kind and
nature between them, except this Agreement shall not affect the terms of the prior letter of intent
signed by the parties in anticipation of this transaction.

     16. Amendments. Any amendment, alteration, supplement, modification or waiver shall be
invalid unless it is set forth in writing, signed by the party intending to be bound thereby.

     17. Severability. If any provision of this Agreement becomes or is declared by a court of
competent jurisdiction to be illegal, unenforceable or void, this Agreement shall continue in full
force and effect without the provision(s).

     18. Assignability. This Agreement may be assigned by Buyer without the prior written consent
of Seller; provided, Buyer shall continue to be liable for the performance of all obligations
pursuant to the Agreement.

     19. Benefit. This Agreement shall be binding upon and inure to the benefit of Buyer and
Seller and their successors and permitted assigns.

     20. Captions. Captions contained in this Agreement are inserted for reference and in no way
define, limit, extend or describe the Agreement or the intent of any provision.

     21. Pronouns. All pronouns and any variation thereof shall be deemed to refer to the
masculine, feminine, neuter, singular or plural as the identity of the parties may require.

     22. Construction of Agreement. The parties agree that this Agreement has been jointly drafted
and that neither party may assert an ambiguity in the construction of this Agreement against
another party because the other party allegedly drafted the allegedly ambiguous provision.

	 
	William Deneau

	 

	Richard Bach

	 

	Robin Bach

	 

-12-

 

     23. Enforcement of Agreement. Each party agrees to pay all of the other party’s costs and
expenses, including actual attorney’s fees, in enforcing the terms of this Agreement, including
collection of amount owed to a party.

     24. Counterparts & Facsimile. This Agreement may be executed in one or more counterparts, all
of which shall be considered one and the same agreement, and shall become effective when one or
more counterparts have been signed by each of the parties and delivered to the other parties by
facsimile. The parties agree that signatures on this Agreement, as well as any other documents to
be executed under this Agreement, may be delivered by facsimile in lieu of an original signature,
and the parties agree to treat facsimile signatures as original signatures and agree to be bound by
this provision.

[Remainder of Page Intentionally Left Blank]

[Signature Page to Follow]

	 
	William Deneau

	 

	Richard Bach

	 

	Robin Bach

	 

-13-

 

     The parties have caused this Agreement to be executed as of the date and year first above
written.

	 	 	 	 	 	 	 	 	 
	Buyer: Bach Services &	 	Seller: Bach Enterprises, Inc.
	Manufacturing Company, L.L.C., a	 	a Michigan corporation
	Michigan limited liability company	 	 	 	 
	 

	 	 	 	 	 	By (signature):	 	 
	 

	 	 	 	 	 	 	 
	By (signature):

	 	/s/ William W. Deneau
	 	 
	 	 	 	 
	 

	 	 	 	 	 	 
	 

	 	 	 	 	 	Print name:	 	 
	 

	 	 	 	 	 	 	 
	Print name:

	 	William W. Deneau
	 	 	 	 	 
	 

	 	 	 	 	Title/Position: President	 
	 

	 	 	 	 	 	 	 	 
	Title/: President of Aurora Oil & Gas
Corporation,
 Manager of Bach Services &
Manufacturing Company, L.L.C.	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 
	Aurora: Aurora Oil & Gas	 	Shareholder: Richard Bach
	Corporation	 	 	 	 
	a Utah corporation	 	 	 	 
	 	 	 	 	 
	By (signature):	 	/s/ William W. Deneau	 		 	By (Signature): 	/s/ Richard Bach
	 

	 	 
	 	 	 
	 
	 	 	 	 	 	 	 	 
	Print name: 	 	William W. Deneau 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 
	Title/Position: 	 	President 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 
	Shareholder: Robin Bach	 	 	 	 
	 
	 	 	 	 	 	 	 	 
	By (signature):

	 	/s/ Robin Bach
	 		 	 	 	 
	 

	 	 
	 	 	 	 	 	 

	 
	William Deneau

	 

	Richard Bach

	 

	Robin Bach

	 

-14-

 

Exhibit 1-A

INTELLECTUAL PROPERTY

See attached description of Pump Motor Fitting Technology assigned from Seller to Buyer.

	 
	William Deneau

	 

	Richard Bach

	 

	Robin Bach

	 

 

 

Exhibit 1-B

ASSET LIST

Equipment Items

	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	Current	 	 	 	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	5/4/2006	 	 	Market	 	 	Loan	 
	Description	 	Date	 	 	Method	 	 	Year	 	 	Basis	 	 	Prior	 	 	2005	 	 	2006	 	 	2007	 	 	Value	 	 	Balances	 
	General
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	BUCKET FOR BACKHOE
	 	 	12/15/1993	 	 	 	I5ODBHY	 	 	 	7	 	 	 	1,248	 	 	 	1248	 	 	 	0	 	 	 	0	 	 	 	0	 	 	 	600	 	 	 	 	 
	CABINETS FOR STORAGE
	 	 	11/30/1997	 	 	 	200DBHY	 	 	 	7	 	 	 	1	 	 	 	1	 	 	 	0	 	 	 	0	 	 	 	0	 	 	 	100	 	 	 	 	 
	CHAIN SAW
	 	 	11/30/1998	 	 	 	200DBHY	 	 	 	7	 	 	 	722	 	 	 	689	 	 	 	32	 	 	 	0	 	 	 	0	 	 	 	50	 	 	 	 	 
	CRANE LIFTMORE H621R
	 	 	6/1/1996	 	 	 	15ODBHY	 	 	 	7	 	 	 	2,057	 	 	 	2,057	 	 	 	0	 	 	 	0	 	 	 	0	 	 	 	600	 	 	 	 	 
	DESK & CHAIR
	 	 	3/15/1994	 	 	 	I5ODBHY	 	 	 	7	 	 	 	137	 	 	 	137	 	 	 	0	 	 	 	0	 	 	 	0	 	 	 	200	 	 	 	 	 
	DESK&CHAIRS
	 	 	4/15/1993	 	 	 	200DBHY	 	 	 	7	 	 	 	1,053	 	 	 	1,053	 	 	 	0	 	 	 	0	 	 	 	0	 	 	 	200	 	 	 	 	 
	DESK CREDENZA
	 	 	12/31/1997	 	 	 	200DBHY	 	 	 	7	 	 	 	1	 	 	 	1	 	 	 	0	 	 	 	0	 	 	 	0	 	 	 	400	 	 	 	 	 
	DESK CREDENZA
	 	 	12/16/1997	 	 	 	200DBHY	 	 	 	7	 	 	 	1	 	 	 	1	 	 	 	0	 	 	 	0	 	 	 	0	 	 	 	400	 	 	 	 	 
	DESK HUTCH STEVE
	 	 	1/28/1998	 	 	 	200DBHY	 	 	 	7	 	 	 	1	 	 	 	1	 	 	 	0	 	 	 	0	 	 	 	0	 	 	 	600	 	 	 	 	 
	DESK HUTCH TAMMY
	 	 	1/28/1998	 	 	 	200DBHY	 	 	 	7	 	 	 	1	 	 	 	1	 	 	 	0	 	 	 	0	 	 	 	0	 	 	 	600	 	 	 	 	 
	DRILL PRESS
	 	 	4/16/2002	 	 	 	200DBHY	 	 	 	7	 	 	 	237	 	 	 	235	 	 	 	2	 	 	 	0	 	 	 	0	 	 	 	125	 	 	 	 	 
	FILE CABINETS
	 	 	3/31/1998	 	 	 	200DBHY	 	 	 	7	 	 	 	730	 	 	 	697	 	 	 	33	 	 	 	0	 	 	 	0	 	 	 	350	 	 	 	 	 
	FROSTTOOTH
	 	 	1/15/1993	 	 	 	15ODBHY	 	 	 	7	 	 	 	2,049	 	 	 	2,049	 	 	 	0	 	 	 	0	 	 	 	0	 	 	 	1200	 	 	 	 	 
	28 FUSER
	 	 	5/15/1993	 	 	 	15ODBHY	 	 	 	7	 	 	 	11,363	 	 	 	11,363	 	 	 	0	 	 	 	0	 	 	 	0	 	 	 	6000	 	 	 	 	 
	28 FUSER
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	6000	 	 	 	 	 
	28 FUSER
	 	 	5/15/1993	 	 	 	15ODBHY	 	 	 	7	 	 	 	12,579	 	 	 	12,579	 	 	 	0	 	 	 	0	 	 	 	0	 	 	 	6000	 	 	 	 	 
	28 FUSER
	 	 	5/15/1993	 	 	ISODBHY	 	 	7	 	 	 	3,984	 	 	 	3,984	 	 	 	0	 	 	 	0	 	 	 	0	 	 	 	6000	 	 	 	 	 
	28 FUSER
	 	 	6/15/1990	 	 	 	I5ODBHY	 	 	 	7	 	 	 	9,650	 	 	 	9,650	 	 	 	0	 	 	 	0	 	 	 	0	 	 	 	6000	 	 	 	 	 
	LARGE FUSER MACHINE
	 	 	1/15/1992	 	 	 	I5ODBHY	 	 	 	7	 	 	 	20,986	 	 	 	20,986	 	 	 	0	 	 	 	0	 	 	 	0	 	 	 	12000	 	 	 	 	 
	LARGE FUSER MACHINE
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	21,000	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	12000	 	 	 	 	 
	HAND FUSERS WITH CART
	 	 	8/1/1995	 	 	 	I5ODBHY	 	 	 	7	 	 	 	2,500	 	 	 	2,500	 	 	 	0	 	 	 	0	 	 	 	0	 	 	 	1200	 	 	 	 	 
	HAND FUSING MACHINE
	 	 	2/15/1986	 	 	 	200DBHY	 	 	 	7	 	 	 	2,000	 	 	 	2,000	 	 	 	0	 	 	 	0	 	 	 	0	 	 	 	1000	 	 	 	 	 
	HAND FUSING MACHINE
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	2,000	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	1000	 	 	 	 	 
	HAND FUSING MACHINE
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	2,000	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	1000	 	 	 	 	 
	HAND FUSING MACHINE
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	2,000	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	1000	 	 	 	 	 
	ELECTRO FUSER
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	4,500	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	3500	 	 	 	 	 
	SADDLE FUSER W/DIES
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	3500	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	1500	 	 	 	 	 
	EAGLE WELDER GENERATOR 8KW
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	2,400	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	1200	 	 	 	 	 
	EAGLE WELDER GENERATOR 8KW
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	2,400	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	1200	 	 	 	 	 
	EAGLE WELDER GENERATOR 8KW
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	2,400	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	1200	 	 	 	 	 
	6.5 KW HONDA GENERATOR
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	1,875	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	750	 	 	 	 	 
	6.5 KW HONDA GENERATOR
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	1,875	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	750	 	 	 	 	 
	HOIST
	 	 	4/15/1998	 	 	 	200DBHY	 	 	 	7	 	 	 	2,043	 	 	 	1,951	 	 	 	91	 	 	 	0	 	 	 	0	 	 	 	100	 	 	 	 	 
	KOMATSI D37 DOZER 270
	 	 	9/1/2004	 	 	 	200DBHY	 	 	 	7	 	 	 	36,839	 	 	 	5,264	 	 	 	9,022	 	 	 	6,443	 	 	 	4,601	 	 	 	25000	**	 	 	14077	 
	KOMATSU 75UU EXCAVATOR
	 	 	8/31/2004	 	 	 	200DBHY	 	 	 	7	 	 	 	25,391	 	 	 	3,628	 	 	 	6,218	 	 	 	4,441	 	 	 	3,171	 	 	 	20000	**	 	 	8885	 

	 
	William Deneau

	 

	Richard Bach

	 

	Robin Bach

	 

 

 

	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	Current	 	 	 	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	5/4/2006	 	 	Market	 	 	Loan	 
	Description	 	Date	 	 	Method	 	 	Year	 	 	Basis	 	 	Prior	 	 	2005	 	 	2006	 	 	2007	 	 	Value	 	 	Balances	 
	LATHE
	 	 	2/20/1998	 	 	 	200DBHY	 	 	 	7	 	 	 	10,295	 	 	 	9,835	 	 	 	459	 	 	 	0	 	 	 	0	 	 	 	6000	 	 	 	 	 
	LATHE MACHINE MILL
	 	 	2/28/1998	 	 	 	200DBHY	 	 	 	7	 	 	 	8,935	 	 	 	8,536	 	 	 	399	 	 	 	0	 	 	 	0	 	 	 	4500	 	 	 	 	 
	IRONWORKER
	 	 	8/1/1984	 	 	ACRS	 	 	5	 	 	 	4,443	 	 	 	4,443	 	 	 	0	 	 	 	0	 	 	 	0	 	 	 	2000	 	 	 	 	 
	OLIVER 8’ FULL DISC
	 	 	4/20/2002	 	 	 	200DBHY	 	 	 	7	 	 	 	668	 	 	 	663	 	 	 	5	 	 	 	0	 	 	 	0	 	 	 	100	 	 	 	 	 
	PALLET RACKS
	 	 	3/31/1998	 	 	 	200DBHY	 	 	 	7	 	 	 	5,330	 	 	 	2,959	 	 	 	238	 	 	 	0	 	 	 	0	 	 	 	2000	 	 	 	 	 
	PARTS BIN
	 	 	4/15/1998	 	 	 	200DBHY	 	 	 	7	 	 	 	1	 	 	 	1	 	 	 	0	 	 	 	0	 	 	 	0	 	 	 	50	 	 	 	 	 
	PIPE CALIPERS
	 	 	6/12/1989	 	 	 	15ODBHY	 	 	 	7	 	 	 	975	 	 	 	975	 	 	 	0	 	 	 	0	 	 	 	0	 	 	 	200	 	 	 	 	 
	PIPE THREADER
	 	 	8/1/1984	 	 	ACRS	 	 	5	 	 	 	698	 	 	 	698	 	 	 	0	 	 	 	0	 	 	 	0	 	 	 	200	 	 	 	 	 
	RIGID 535 THREADERS W/DIES
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	5500	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	2000	 	 	 	 	 
	RIGID 535 THREADERS W/DIES
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	5500	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	2000	 	 	 	 	 
	VAN PARTS TRLRS
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	1500	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	1500	 	 	 	 	 
	VAN PARTS TRLRS
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	1500	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	1500	 	 	 	 	 
	AIR COMPRESSOR SHOP
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	1450	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	600	 	 	 	 	 
	PORTABLE BORING TOOL
	 	 	3/6/2002	 	 	 	200DBHY	 	 	 	7	 	 	 	1,634	 	 	 	1,619	 	 	 	15	 	 	 	0	 	 	 	0	 	 	 	1000	 	 	 	 	 
	PRESSURE WASHER
	 	 	11/15/1993	 	 	 	15ODBHY	 	 	 	7	 	 	 	1,878	 	 	 	1,878	 	 	 	0	 	 	 	0	 	 	 	0	 	 	 	900	 	 	 	 	 
	RACKS
	 	 	2/15/1998	 	 	 	200DBHY	 	 	 	7	 	 	 	1	 	 	 	1	 	 	 	0	 	 	 	0	 	 	 	0	 	 	 	50	 	 	 	 	 
	RACKS UPRIGHT FRAMES
	 	 	4/1/1998	 	 	 	200DBHY	 	 	 	7	 	 	 	202	 	 	 	193	 	 	 	9	 	 	 	0	 	 	 	0	 	 	 	50	 	 	 	 	 
	RECEPTION DESK
	 	 	3/31/1998	 	 	 	200DBHY	 	 	 	7	 	 	 	1	 	 	 	1	 	 	 	0	 	 	 	0	 	 	 	0	 	 	 	600	 	 	 	 	 
	REFRIGERATOR
	 	 	1/15/1998	 	 	 	200DBHY	 	 	 	7	 	 	 	1	 	 	 	1	 	 	 	0	 	 	 	0	 	 	 	0	 	 	 	50	 	 	 	 	 
	#193 CRANE LIB-4000
	 	 	6/1/1996	 	 	 	S/L	 	 	 	7	 	 	 	7293	 	 	 	7,293	 	 	 	0	 	 	 	0	 	 	 	0	 	 	 	2000	 	 	 	 	 
	#196 CRANE PALFINGER
	 	 	4/16/1997	 	 	 	200DBHY	 	 	 	7	 	 	 	46593	 	 	 	46593	 	 	 	0	 	 	 	0	 	 	 	0	 	 	 	10000	 	 	 	 	 
	#196 FORD LT9413
	 	 	4/15/1997	 	 	 	200DBHY	 	 	 	7	 	 	 	91,791	 	 	 	91,791	 	 	 	0	 	 	 	0	 	 	 	0	 	 	 	35000	 	 	 	 	 
	#198 1997 CHEW STAK
	 	 	4/23/1997	 	 	 	200DBHY	 	 	 	7	 	 	 	28,760	 	 	 	28,760	 	 	 	0	 	 	 	0	 	 	 	0	 	 	 	3500	 	 	 	 	 
	#212 SEEDER ATTACHMENT
	 	 	4/1/1988	 	 	 	15ODBHY	 	 	 	7	 	 	 	924	 	 	 	924	 	 	 	0	 	 	 	0	 	 	 	0	 	 	 	50	 	 	 	 	 
	#224 SIDE BOOM
	 	 	6/21/1989	 	 	 	I5ODBHY	 	 	 	7	 	 	 	7,124	 	 	 	7,124	 	 	 	0	 	 	 	0	 	 	 	0	 	 	 	4500	 	 	 	 	 
	#225 TRAILKING TRLR
	 	 	12/28/1989	 	 	 	15ODBHY	 	 	 	7	 	 	 	29,939	 	 	 	29,939	 	 	 	0	 	 	 	0	 	 	 	0	 	 	 	15000	 	 	 	 	 
	#226TEREX
	 	 	4/1/1990	 	 	 	15ODBHY	 	 	 	7	 	 	 	25,000	 	 	 	25,000	 	 	 	0	 	 	 	0	 	 	 	0	 	 	 	2500	 	 	 	 	 
	#228 FARM TRACTOR
	 	 	6/15/1990	 	 	 	15ODBHY	 	 	 	7	 	 	 	17,006	 	 	 	17,006	 	 	 	0	 	 	 	0	 	 	 	0	 	 	 	4500	 	 	 	 	 
	#235 MICH LOADER
	 	 	10/15/1992	 	 	 	15ODBHY	 	 	 	7	 	 	 	20,800	 	 	 	20,800	 	 	 	0	 	 	 	0	 	 	 	0	 	 	 	7500	 	 	 	 	 
	#240 STORAGE TRLR
	 	 	9/15/1993	 	 	 	15ODBHY	 	 	 	7	 	 	 	4,456	 	 	 	4	 	 	 	0	 	 	 	0	 	 	 	0	 	 	 	1200	 	 	 	 	 
	#241 STORAGE TRLR
	 	 	9/15/1993	 	 	 	I5ODBHY	 	 	 	7	 	 	 	4,456	 	 	 	4,456	 	 	 	0	 	 	 	0	 	 	 	0	 	 	 	1200	 	 	 	 	 
	#246 580 SL BACKHOE
	 	 	3/7/1997	 	 	 	200DBHY	 	 	 	7	 	 	 	62,434	 	 	 	62,434	 	 	 	0	 	 	 	0	 	 	 	0	 	 	 	30000	 	 	 	 	 
	#247 KOMATSU EXC
	 	 	4/30/1997	 	 	 	200DBHY	 	 	 	7	 	 	 	113,632	 	 	 	113,632	 	 	 	0	 	 	 	0	 	 	 	0	 	 	 	65000	 	 	 	 	 
	#248 JD GRADER
	 	 	4/28/1997	 	 	 	200DBHY	 	 	 	7	 	 	 	30,210	 	 	 	30,210	 	 	 	0	 	 	 	0	 	 	 	0	 	 	 	15000	 	 	 	 	 
	#249 FLOAT TRAILER
	 	 	3/30/1988	 	 	 	I5ODBHY	 	 	 	7	 	 	 	7,361	 	 	 	7,361	 	 	 	0	 	 	 	0	 	 	 	0	 	 	 	4500	 	 	 	 	 
	#255 PC200-6 KAMA EX
	 	 	10/27/2000	 	 	 	200DBHY	 	 	 	7	 	 	 	86,385	 	 	 	67,110	 	 	 	7,706	 	 	 	7,714	 	 	 	3,853	 	 	 	35000	 	 	 	 	 
	#257 KAMATSU
	 	 	1/20/2001	 	 	 	200DBHY	 	 	 	7	 	 	 	30,250	 	 	 	20,799	 	 	 	2,701	 	 	 	2,698	 	 	 	2,701	 	 	 	15000	 	 	 	 	 
	#259 KAMATSU
	 	 	1/20/2001	 	 	 	200DBHY	 	 	 	7	 	 	 	41,250	 	 	 	28,362	 	 	 	3,684	 	 	 	3,679	 	 	 	3,684	 	 	 	15000	 	 	 	 	 
	#262 BACKHOE
	 	 	6/26/2001	 	 	 	200DBHY	 	 	 	7	 	 	 	58,418	 	 	 	40,165	 	 	 	5,217	 	 	 	5,211	 	 	 	5,217	 	 	 	35000	 	 	 	 	 
	#263 HAULRITETRLR
	 	 	10/31/2001	 	 	 	200DBHY	 	 	 	7	 	 	 	1,219	 	 	 	1,062	 	 	 	109	 	 	 	48	 	 	 	0	 	 	 	300	 	 	 	 	 
	#264 HAULRITETRLR
	 	 	10/3/2006	 	 	 	200DBHY	 	 	 	7	 	 	 	1,219	 	 	 	1,062	 	 	 	109	 	 	 	48	 	 	 	0	 	 	 	300	 	 	 	 	 
	266HAULRITETRLR
	 	 	10/31/2001	 	 	 	200DBHY	 	 	 	7	 	 	 	1,252	 	 	 	1,090	 	 	 	112	 	 	 	50	 	 	 	0	 	 	 	300	 	 	 	 	 
	#403 1998 CHEVWELDI
	 	 	12/11/1998	 	 	 	200DBHY	 	 	 	7	 	 	 	27,562	 	 	 	27,562	 	 	 	0	 	 	 	0	 	 	 	0	 	 	 	3500	 	 	 	 	 

	 
	William Deneau

	 

	Richard Bach

	 

	Robin Bach

	 

 

 

	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	Current	 	 	 	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	5/4/2006	 	 	Market	 	 	Loan	 
	Description	 	Date	 	 	Method	 	 	Year	 	 	Basis	 	 	Prior	 	 	2005	 	 	2006	 	 	2007	 	 	Value	 	 	Balances	 
	#403 WELDER
	 	 	2/26/2002	 	 	 	200DBHY	 	 	 	7	 	 	 	1,729	 	 	 	1,713	 	 	 	16	 	 	 	0	 	 	 	0	 	 	 	1000	 	 	 	 	 
	#407 2000 CHEV 3-4
	 	 	7/20/2000	 	 	 	200DBHY	 	 	 	5	 	 	 	25,408	 	 	 	23,945	 	 	 	1,463	 	 	 	0	 	 	 	0	 	 	 	2000	 	 	 	 	 
	#407 SNOW PLOW
	 	 	11/28/2000	 	 	 	200DBHY	 	 	 	7	 	 	 	2,854	 	 	 	2,217	 	 	 	255	 	 	 	255	 	 	 	127	 	 	 	500	 	 	 	 	 
	#408 2000 CHEV 1 TON
	 	 	8/1/2000	 	 	 	200DBHY	 	 	 	5	 	 	 	31,690	 	 	 	29,865	 	 	 	1,825	 	 	 	0	 	 	 	0	 	 	 	4000	 	 	 	 	 
	#410 2001 1/2 TON PU
	 	 	12/5/2000	 	 	 	200DBHY	 	 	 	5	 	 	 	29,190	 	 	 	27,509	 	 	 	1,681	 	 	 	0	 	 	 	0	 	 	 	3000	 	 	 	 	 
	#413 CHEVY I TON
	 	 	7/19/2001	 	 	 	200DBHY	 	 	 	5	 	 	 	26,218	 	 	 	21,687	 	 	 	3,020	 	 	 	1,510	 	 	 	0	 	 	 	5,500	 	 	 	 	 
	#413 SNOW PLOW
	 	 	12/6/2001	 	 	 	200DBHY	 	 	 	7	 	 	 	3,313	 	 	 	2,886	 	 	 	296	 	 	 	131	 	 	 	0	 	 	 	500	 	 	 	 	 
	#413 TOOLS BOXES
	 	 	7/26/2001	 	 	 	200DBHY	 	 	 	5	 	 	 	1,296	 	 	 	1,072	 	 	 	149	 	 	 	75	 	 	 	0	 	 	 	25	 	 	 	 	 
	#4142000 CHEVY 1 TO
	 	 	11/1/2001	 	 	 	200DBHY	 	 	 	5	 	 	 	19,400	 	 	 	18,841	 	 	 	559	 	 	 	0	 	 	 	0	 	 	 	3500	 	 	 	 	 
	#414 FLATBED
	 	 	10/31/2000	 	 	 	200DBHY	 	 	 	5	 	 	 	1,536	 	 	 	1,492	 	 	 	44	 	 	 	0	 	 	 	0	 	 	 	500	 	 	 	 	 
	#4152002 CHEVY 4 DR
	 	 	12/14/2001	 	 	 	200DBHY	 	 	 	5	 	 	 	30,540	 	 	 	29,661	 	 	 	879	 	 	 	0	 	 	 	0	 	 	 	10000	 	 	 	 	 
	# 418 2005 Dodge 1500
	 	 	3/1/2005	 	 	 	 	 	 	 	 	 	 	 	28,293	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	19000	**	 	 	18390	 
	#421 Dodge Dakota
	 	 	12/20/2005	 	 	 	 	 	 	 	 	 	 	 	22,102	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	16000	**	 	 	10990	 
	#422 Dodge Dakota
	 	 	12/20/2005	 	 	 	 	 	 	 	 	 	 	 	23,105	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	16000	**	 	 	11710	 
	#423 Dodge Dakota
	 	 	12/20/2005	 	 	 	 	 	 	 	 	 	 	 	21,238	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	16000	**	 	 	8963	 
	#424 GMC Sierra 2500
	 	 	1/5/2006	 	 	 	 	 	 	 	 	 	 	 	28,830	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	22000	**	 	 	16895	 
	#425 GMC Sierra 2500
	 	 	1/5/2006	 	 	 	 	 	 	 	 	 	 	 	28,830	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	22000	**	 	 	16829	 
	#426 Dodge Ram 3500
	 	 	5/1/2006	 	 	 	 	 	 	 	 	 	 	 	36,017	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	36017	**	 	 	26018	 
	#265 HAULRITETRLR
	 	 	10/31/2001	 	 	 	200DBHY	 	 	 	7	 	 	 	1,252	 	 	 	1,090	 	 	 	112	 	 	 	50	 	 	 	0	 	 	 	300	 	 	 	 	 
	252 HAULMARK TRAILER
	 	 	11/20/1997	 	 	 	200DBHY	 	 	 	7	 	 	 	3,272	 	 	 	3,272	 	 	 	0	 	 	 	0	 	 	 	0	 	 	 	1200	 	 	 	 	 
	AIR HAMMERS
	 	 	8/26/1997	 	 	 	200DBHY	 	 	 	7	 	 	 	95	 	 	 	94	 	 	 	0	 	 	 	0	 	 	 	0	 	 	 	50	 	 	 	 	 
	AIRLESSPAINTSPRAYE
	 	 	11/1/1985	 	 	ACRS	 	 	5	 	 	 	1,443	 	 	 	1,443	 	 	 	0	 	 	 	0	 	 	 	0	 	 	 	50	 	 	 	 	 
	BAND SAW
	 	 	10/30/2001	 	 	 	200DBHY	 	 	 	7	 	 	 	954	 	 	 	831	 	 	 	85	 	 	 	38	 	 	 	0	 	 	 	200	 	 	 	 	 
	BORING MACHINE
	 	 	4/18/2000	 	 	 	200DBHY	 	 	 	7	 	 	 	21,200	 	 	 	16,470	 	 	 	1,891	 	 	 	1,893	 	 	 	946	 	 	 	8500	 	 	 	 	 
	BORING MACH-PUSH ROD
	 	 	6/14/2000	 	 	 	200DBHY	 	 	 	7	 	 	 	3,149	 	 	 	2,446	 	 	 	281	 	 	 	281	 	 	 	140	 	 	 	1000	 	 	 	 	 
	SMALLTRAILER
	 	 	10/16/1995	 	 	 	1500BHY	 	 	 	7	 	 	 	1,317	 	 	 	1,317	 	 	 	0	 	 	 	0	 	 	 	0	 	 	 	300	 	 	 	 	 
	SPREADER
	 	 	6/28/2000	 	 	 	200DBHY	 	 	 	7	 	 	 	583	 	 	 	453	 	 	 	52	 	 	 	52	 	 	 	26	 	 	 	50	 	 	 	 	 
	STEAMER UNIT
	 	 	12/1/1997	 	 	 	200DBHY	 	 	 	7	 	 	 	5,351	 	 	 	5,351	 	 	 	0	 	 	 	0	 	 	 	0	 	 	 	2000	 	 	 	 	 
	TEREX 760 BACKHOE
	 	 	9/1/2004	 	 	 	200DBHY	 	 	 	7	 	 	 	25,865	 	 	 	3,696	 	 	 	6,334	 	 	 	4,524	 	 	 	3,231	 	 	 	30000	**	 	 	2028	 
	TOOL CABINETS
	 	 	4/1/1998	 	 	 	200DBHY	 	 	 	7	 	 	 	1,245	 	 	 	1,189	 	 	 	56	 	 	 	0	 	 	 	0	 	 	 	100	 	 	 	 	 
	TORCH SET
	 	 	10/14/1997	 	 	 	200DBHY	 	 	 	7	 	 	 	971	 	 	 	971	 	 	 	0	 	 	 	0	 	 	 	0	 	 	 	200	 	 	 	 	 
	TRAILER
	 	 	6/15/1996	 	 	 	1SODBHY	 	 	 	7	 	 	 	1,370	 	 	 	1,370	 	 	 	0	 	 	 	0	 	 	 	0	 	 	 	300	 	 	 	 	 
	TRANSIT L-5 LASER &
	 	 	7/23/2001	 	 	 	200DBHY	 	 	 	7	 	 	 	950	 	 	 	653	 	 	 	85	 	 	 	85	 	 	 	85	 	 	 	100	 	 	 	 	 
	UNIT #238 D37E-5 DOZ
	 	 	12/31/1998	 	 	 	200DBHY	 	 	 	7	 	 	 	9,272	 	 	 	8,858	 	 	 	414	 	 	 	0	 	 	 	0	 	 	 	15000	 	 	 	 	 
	UNIT#239D37E-5 DOZ
	 	 	12/31/1998	 	 	 	200DBHY	 	 	 	7	 	 	 	9,272	 	 	 	8,858	 	 	 	414	 	 	 	0	 	 	 	0	 	 	 	15000	 	 	 	 	 
	USED 5000# FORKLIFT
	 	 	7/21/2004	 	 	 	200DBHY	 	 	 	7	 	 	 	5,250	 	 	 	750	 	 	 	1,286	 	 	 	918	 	 	 	656	 	 	 	5000	 	 	 	 	 
	WELDER
	 	 	1/15/1991	 	 	 	15ODBHY	 	 	 	7	 	 	 	1,818	 	 	 	1,818	 	 	 	0	 	 	 	0	 	 	 	0	 	 	 	500	 	 	 	 	 
	WELDER
	 	 	2/15/1992	 	 	 	15ODBHY	 	 	 	7	 	 	 	1,721	 	 	 	1,721	 	 	 	0	 	 	 	0	 	 	 	0	 	 	 	500	 	 	 	 	 
	WELDER & HITCH
	 	 	3/18/2001	 	 	 	200DBHY	 	 	 	7	 	 	 	2,733	 	 	 	1,879	 	 	 	244	 	 	 	244	 	 	 	244	 	 	 	 	 	 	 	 	 
	Ditch Witch Line locator
	 	 	3/1/2005	 	 	 	 	 	 	 	 	 	 	 	3,782	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	2500	 	 	 	 	 
	Sullair Air Compressor
	 	 	5/1/2004	 	 	 	 	 	 	 	 	 	 	 	10,500	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	7500	 	 	 	 	 
	Mulcher
	 	 	5/1/1991	 	 	 	 	 	 	 	 	 	 	 	9,000	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	5000	 	 	 	 	 
	18’ MACLANDER TRLR
	 	 	10/18/2003	 	 	 	200DBHY	 	 	 	7	 	 	 	4132	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	3000	 	 	 	 	 
	40KW GM POWERED GEN
	 	 	8/12/2005	 	 	 	200DBMQ	 	 	 	7	 	 	 	12839	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	10500	 	 	 	 	 
	4X8 TRLR
	 	 	8/31/2004	 	 	 	200DBMQ	 	 	 	7	 	 	 	541	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	200	 	 	 	 	 

	 
	William Deneau

	 

	Richard Bach

	 

	Robin Bach

	 

 

 

	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	Current	 	 	 	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	5/4/2006	 	 	Market	 	 	Loan	 
	Description	 	Date	 	 	Method	 	 	Year	 	 	Basis	 	 	Prior	 	 	2005	 	 	2006	 	 	2007	 	 	Value	 	 	Balances	 
	5X10 TRLR
	 	 	10/1/2005	 	 	 	200DBMQ	 	 	 	7	 	 	 	610	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	200	 	 	 	 	 
	75 UU EXC
	 	 	11/5/2005	 	 	 	200DBMQ	 	 	 	7	 	 	 	21200	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	20000	 	 	 	 	 
	7X12 DUMP TRLR
	 	 	5/8/2004	 	 	 	200DBMQ	 	 	 	7	 	 	 	5252	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	3500	 	 	 	 	 
	97 WH DAKAOTA
	 	 	2/26/2004	 	 	 	200DBMQ	 	 	 	7	 	 	 	8362	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	1500	 	 	 	 	 
	BOBCAT 190
	 	 	11/5/2005	 	 	 	200DBMQ	 	 	 	7	 	 	 	21094	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	18000	 	 	 	 	 
	AIR HAMMER
	 	 	11/5/2005	 	 	 	 	 	 	 	7	 	 	 	4500	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	4500	 	 	 	 	 
	CASE TRENCHER
	 	 	10/18/2003	 	 	 	200DBHY	 	 	 	7	 	 	 	9434	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	7500	 	 	 	 	 
	MACLANDER 20’ TRLR
	 	 	10/1/2005	 	 	 	200DBMQ	 	 	 	7	 	 	 	3961	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	3000	 	 	 	 	 
	Specialized Coiled tubing
tranfer unit
	 	 	4/1/2006	 	 	 	 	 	 	 	 	 	 	 	30000	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	30000	 	 	 	 	 
	R 200 PLOW TRACTOR
	 	 	6/3/2005	 	 	 	200DBMQ	 	 	 	7	 	 	 	16700	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	15000	 	 	 	 	 
	R 200 PLOW TRACTOR
	 	 	12/24/2004	 	 	 	200DBMQ	 	 	 	7	 	 	 	15900	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	15000	 	 	 	 	 
	POLARIS 6 WHEELER
	 	 	1/31/2004	 	 	 	200DBMQ	 	 	 	7	 	 	 	13100	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	6000	 	 	 	 	 
	SNOWMOBILE POLARIS
	 	 	12/22/2005	 	 	 	200DBMQ	 	 	 	5	 	 	 	2183	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	1500	 	 	 	 	 
	TEREX TX 760 BACKHOE
	 	 	12/28/2004	 	 	 	200DBMQ	 	 	 	7	 	 	 	51537	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	35000	**	 	 	12881	 
	QUALITY TRAILER
w/specialized
coiled tubing spooling rig
	 	 	1/1/2006	 	 	 	 	 	 	 	 	 	 	 	125000	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	125000	 	 	 	 	 
	2003 Dodge 1500
	 	 	12/15/2004	 	 	 	 	 	 	 	 	 	 	 	31000	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	15000	 	 	 	 	 
	 	 	 	 	 	 	Sub Totals:	 	 	372845	 	 	 	0	 	 	 	0	 	 	 	0	 	 	 	0	 	 	 	309900	 	 	 	12881	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	137 Assets	 	 	 	 	 	Totals:	 	 	1,838,668	 	 	 	1,019,835	 	 	 	57,602	 	 	 	40,388	 	 	 	28,682	 	 	 	1,033,767	 	 	 	147,666	 

	 
	William Deneau

	 

	Richard Bach

	 

	Robin Bach

	 

 

 

OIL AND GAS LEASES

	 	 	 	 	 	 	 	 	 
	Lessor	 	Lessee	 	Dated	 	Recorded	 	Description
	Alan E. Thomas and
Penny R. Dice
	 	Bach Energy, LLC	 	12-7-05	 	NR	 	Part
NE1/4,
Gov’t Lots 1 & 2
	Wesley P. Diane and
Diane F. Bemier
	 	Bach Energy, LLC	 	12-31-05	 	NR	 	Part of SW1/4
	Robert G. Schichtel
and Theresa M.
Schichtel
	 	Bach Energy Systems, LLC	 	6-28-06	 	NR	 	SW1/4 SW1/4
	Robert Weber, II
and Marilyn Weber
	 	Bach Energy Systems, LLC	 	6-24-06	 	NR	 	NW1/4 NW1/4
	Marjorie A. Haines
	 	Bach Energy Systems, LLC	 	6-22-06	 	NR	 	NW1/4 NW1/4
	Joseph E. Haines,
Jr. and Marilyn D.
Haines
	 	Bach Energy Systems, LLC	 	6-22-06	 	NR	 	NW1/4 NW1/4
	Ronald W.
Hagelstein and
Adana N. Hagelstein
	 	Bach Energy Systems, LLC	 	6-20-06	 	NR	 	NW1/4 NW1/4
	David M. and
Michelle McPherson
	 	Bach Energy Systems, LLC	 	6-23-06	 	NR	 	W 445.5 feet of NE1/4 NE1/4
	Albert C. Howard
and Lenise J.
Howard
	 	Bach Energy Systems, LLC	 	6-24-06	 	NR	 	NE1/4 NE1/4 exc.
	Estate of Gladys
Hill and Estate of
Huldah Hill
	 	Bach Energy Systems, LLC	 	9-30-05	 	2005R-23925	 	All except E1/2 E1/2
	Randall J. Weber
and Sharon K. Weber
	 	Bach Energy Systems, LLC	 	3-24-06	 	NR	 	SE1/4 NW1/4 and W1/2 NE1/4 exc.
	Andrew G. Sladek
and Libby A. Sladek
	 	Bach Energy Systems, LLC	 	3-29-06	 	NR	 	Part NE1/4
	Ethel L. Ergang
	 	Bach Energy Systems, LLC	 	11-2-04	 	NR	 	SE1/4 NW1/4 and W1/2 NE1/4 exc.
	Max Elliott and
Dorothy Elliott
	 	Bach Energy Systems, LLC	 	5-30-06	 	NR	 	S1/2 SE1/4
	Sherwood and Romana
Herman Trust
	 	Bach Energy Systems, LLC	 	5-30-06	 	NR	 	S1/2 N1/2 SE1/4
	John Bauer and Eva
Bauer
	 	Bach Energy Systems, LLC	 	5-24-06	 	NR	 	S1/2 N1/2 SE1/4
	Wilma T. Elliott
	 	Bach Energy Systems, LLC	 	5-19-06	 	NR	 	S1/2 N1/2 SE1/4
	Richard Bauer and
Elizabeth Bauer
	 	Bach Energy Systems, LLC	 	4-20-06	 	NR	 	S1/2 N1/2 SE1/4
	Richard Bauer and
Elizabeth Bauer
	 	Bach Energy Systems, LLC	 	4-20-06	 	NR	 	N1/2 N1/2 SE1/4
	Wilbur Mitchell
	 	Bach Energy Systems, LLC	 	4-1-06	 	NR	 	S1/2 SE1/4
	Ralph J. Mitchell
	 	Bach Energy Systems, LLC	 	4-1-06	 	NR	 	S1/2 SE1/4
	Allen H. and
Arlene Ashley
	 	Bach Energy Systems, LLC	 	11-05-05	 	NR	 	Part of SW 1/2 of Section 1 T29N- R1W, Otsego Cty
	George F.
Mitchell and Nancy
A. Mitchell
	 	Bach Energy Systems, LLC	 	4-1-06	 	NR	 	S1/2 SE1/4

Accounts Receivable

See the next attached sheet for a listing of accounts receivable transferred from Seller to
Buyer totaling to $627,498.

	 
	William Deneau

	 

	Richard Bach

	 

	Robin Bach

	 

 

 

Exhibit 1-C

LIST OF EXCLUDED ASSETS

All cash, cash equivalents, and short-term investments;

All minute books, stock records, and corporate seals;

The shares of capital stock of Seller;

Rights relating to deposits and prepaid expenses and claims for refunds and rights to offset;

All insurance policies and rights under insurance policies;

All personnel records and other records that Seller is required by law to retain in its possession;

All claims for refund of taxes and other governmental charges of whatever nature.

	 
	William Deneau

	 

	Richard Bach

	 

	Robin Bach

	 

 

 

Exhibit 2.a

LIABILITIES ASSUMED 

Alleged trespass claim by Mills parties against Seller.

Seller’s cell phone contracts until such can be cancelled without fees.

Seller’s credit line with Northwestern bank.

Seller’s accounts payable assumed by Buyer as set forth on the next attached list totaling to
$268,876.

In addition to the listed accounts payable, Buyer also assumes the estimated accounts payable set
forth on the attached sheet titled “Estimated Trade Payables Support” totaling to $215,000.

 

 

Exhibit 3.c.

PRICE ALLOCATION

See attached.

 

 

Exhibit 4.a.i.

WARRANTY BILL OF SALE

     Pursuant to a certain Asset Purchase Agreement between Bach Enterprises, Inc. and Bach
Services & Manufacturing Company, L.L.C., executed on even date herewith (“Asset Purchase
Agreement”), and for and in consideration of the sum set forth therein, the receipt and adequacy of
which is hereby acknowledged, Bach Enterprises Inc., a Michigan corporation having an address of
202 East State Street, Traverse City, Michigan 49684 (“Seller”) has conveyed to Bach Services &
Manufacturing Company, L.L.C., a Michigan limited liability company having an address of 4110
Cooper Ridge Drive, Ste. 100, Traverse City, Michigan 49684 (“Buyer”), all right, title and
interest in and to the following property (“Property”):

     a) The intellectual property more particularly described in Exhibit 1-A of the Asset Purchase
Agreement, a copy of which is attached hereto; and

     b) The equipment and oil and gas interests more particularly described in Exhibit 1-B of the
Asset Purchase Agreement, a copy of which is attached hereto.

     This Warranty Bill of Sale conveys no right to, and specifically excludes, Seller’s assets
identified on Exhibit 1-C of the Asset Purchase Agreement, a copy of which is attached hereto, and
incorporated herein by reference.

     Seller, for itself and its successors and assigns, covenants and agrees with Buyer, and its
successors and assigns, to warrant and defend the sale of the Property against all persons.

     Seller further covenants, represents and warrants the following:

     1. Seller has full right to sell and transfer the Property;

     2. The Property is sold and transferred in good faith for actual consideration; and

     3. There are no judgments, liens, mortgages, pledges, claims, rights, security interests,
encumbrances or other adverse interests of any kind or nature against the Property, except for
liabilities assumed by Buyer pursuant to the Asset Purchase Agreement.

     Seller has executed this Warranty Bill of Sale on           , 2006.

	 	 	 	 	 	 	 
	 	 	BACH ENTERPRISES, INC.
	 
	 	 	 	 	 	 
	 

	 	By:
	 	 
	 	 
	 

	 	 	 	 	 	 
	 
	 	 	 	 	 	 
	 

	 	Its:
	 	President	 	 
	 

	 	 	 	 	 	 

 

 

Exhibit 4.a.ii.

Assignments by Seller of

Aurora Antrim North, LLC and Aurora Holdings, L.L.C.

See attached assignment forms for conveyance of LLC interests in Aurora Antrim North, LLC and
Aurora Holdings, L.L.C. at closing.

 

 

Exhibit 4.a.iii.

Assignment of Oil and Gas Leases

See attached assignment forms for conveyance of all oil and gas leases listed on the attached
page.

 

 

Exhibit 5.o.

Seller Contracts Assumed by Buyer

None, except for ongoing work between Seller and Aurora.

 

 

Exhibit 7.e.

Employment Agreement

See attached employment agreement to be signed by each of the Shareholders at closing.exv10w20

 

Exhibit 10.20

PROMISSORY NOTE

	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	Principal	 	Loan Date	 	Maturity	 	Loan No.	 	Call/Coll	 	Account	 	Officer	 	Initials
	$5,000.000.00
	 	10-15-2006	 	10-15-2007	 	067404490	 	22/49	 	 	 	0705	 	 

References in the shaded area are for Lender’s use only and do not limit the applicability of this
document to any particular loan or item.

Any item above containing ***** has been omitted due to text length
limitations.

	 	 	 	 	 	 	 
	Borrower:

	 	Aurora Energy, Ltd
	 	Lender:
	 	Northwestern Bank
	 

	 	4110 Copper Ridge Dr. Ste. 100
	 	 	 	Traverse City Garfield
	 

	 	Traverse City, MI 49684
	 	 	 	PO Box 809
	 

	 	 	 	 	 	625 S. Garfield Ave.
	 

	 	 	 	 	 	Traverse City, MI 49685

	 	 	 	 	 
	Principal
Amount: $5,000,000.00

	 	Initial Rate: 8.250%
	 	Date of Note:
October 15, 2006

PROMISE
TO PAY. Aurora Energy, Ltd (“ Borrower”)
promises to pay to Northwestern Bank (“Lender”), or
order, in lawful money of the United States of America, the principal
amount of Five Million
& 00/100 Dollars ($5,000,000.00) or as much as may be
outstanding, together with interest on the
unpaid outstanding principal balance of each advance. Interest shall be calculated from the date of
each advance until repayment of each advance.

PAYMENT. Borrower will pay this loan in one payment of all outstanding principal plus all accrued
unpaid interest on October 15, 2007. In addition, Borrower will pay regular monthly payments of all
accrued unpaid interest due as of each payment date, beginning November 15, 2006, with all
subsequent interest payments to be due on the same day of each month
after that. Unless otherwise
agreed or required by applicable law, payments will be applied first to any accrued unpaid
interest, then to principal; then to any late charges; and then to any unpaid collection cost. The
annual interest rate for this Note is computed on a 385/380 basis; that is, by applying the ratio
of the annual interest rate over a year of 360 days, multiplied by the outstanding principal
balance, multiplied by the actual number of days the principal balance is outstanding. Borrower
will pay Lender at Lender’s address shown above or at such other place as Lender may designate in writing.

VARIABLE
INTEREST RATE. The interest rate on this Note is subject to change from time to time based
on changes in an independent index which is the Prime Rate as published in the “Wall Street
Journal” (the “Index”). The Index is not necessarily the lowest rate charged by Lender on its
loans. If the Index becomes unavailable during the term of this loan, Lender may designate a
substitutes index after notifying Borrower. Lender will tell Borrower
the current index rate upon
Borrower’s request. The interest rate change will not occur more
often than each day. A change in
the interest rate will take effect on the following day. Borrower understands that Lender may make
loans based on other rates as well. The Index currently is 8.250% per annum. The interest rate to
be
applied to the unpaid principal balance during this Note will be at a rate equal to the Index,
resulting in an initial rate of 8.250% per annum. NOTICE: Under no circumstances will the interest
rate on this Note be more than (except for any higher default rate
shown below) the lesser of 25.000% per annum or the maximum rate allowed by applicable law.

PREPAYMENT. Borrower may pay without penalty all or a portion of the amount owed earlier than it is
due. Early payments, will not, unless agreed to by Lender in writing, relieve Borrower of Borrower’s
obligation to continue to make payments of accrued unpaid interest. Rather, early payments will
reduce the principal balance due. Borrower agrees not to send Lender payments marked “paid in
full”, “without recourse”, or similar language. If Borrower sends such a payment, Lender may accept
it without losing any of Lender’s rights under this Note, and Borrower will remain obligated to pay
any further amount owed to Lender. All written communications concerning disputed amounts,
including any check or other payment instrument that indicates that the payment constitutes
“payment in full” of the amount owed or that is tendered with other conditions or limitations or as
full satisfaction of a disputed amount must be mailed or delivered to: Northwestern Bank,
Commercial Loan Servicing, PO Box 809 Traverse City , MI 49685-0809.

LATE
CHARGE. If a payment is 15 days or more late, Borrower will be charged 5.000% of the regularly
scheduled payment or $200.00, whichever is less.

INTEREST
AFTER DEFAULT. Upon default, including failure to pay upon final maturity, the interest
rate on this Note shall be increased by adding a 2.000 percentage point margin (“Default Rate
Margin”). The Default Rate Margin shall also apply to each succeeding interest rate change that
would have applied had there been no default. However, in no event will the interest rate exceed
the maximum interest rate limitations under applicable law.

DEFAULT.
Each of the following shall constitute an event of default (“Event of Default”) under this
Note:

Payment
Default. Borrower falls to make any payment when due under this
Note.

Other
Defaults. Borrower falls to comply with or to perform any other term, obligation, covenant
of condition contained in this Note or in any of the related documents or to comply with or to
perform any term, obligation, covenant or condition contained in any other agreement between
Lender and Borrower.

Default in Favor
 of Third Parties. Borrower or any Grantor defaults under any loan, extension of
credit, security agreement, purchase or sales agreement, or any other agreement, in favor of any
other creditor or person that may materially affect any of Borrower’s property or Borrower’s
ability to repay this Note or perform Borrower’s obligations under this Note or any of the related
documents.

False
Statements. Any warranty, representation or statement made at furnished to Lender by Borrower
or an Borrower’s behalf under this Note or the related documents is false or misleading in any
material respect, either now or at the time made or furnished or becomes false or misleading at any
time thereafter.

Insolvency. The dissolution or termination or Borrower’s existence as a going business, the
insolvency or Borrower, the appointment of a receiver for any part of Borrower’s property, any
assignment for the benefit of creditors, any type of creditor workout, or the commencement of any
proceeding under any bankruptcy or insolvency laws by or against Borrower.

Creditor
or Forfeiture Proceedings. Commencement of foreclosure or
forfeiture proceedings, whether
by judicial proceeding, pelf-help, repossession or nay other method, by any creditor of Borrower or
by any governmental agency against any collateral securing the loan. This includes a garnishment of
any of Borrower’s accounts, including deposit accounts, with Lender. However, this Event of Default
shall not apply if there is a good faith dispute by Borrower as to the validity or reasonableness
of the claim which is the basis of the creditor or forfeiture proceeding and if Borrower gives
Lender written notice of the creditor or forfeiture proceeding and
deposits with Lender monies or
a surety bond for the creditor or forfeiture proceeding, in an amount determined by Lender, in its
sale discretion, as being an adequate reserve or bond for the dispute.

Events
Affecting Guarantor. Any of the proceeding events occurs with respect to any Guarantor of
any of the Indebtedness or any Guarantor dies or becomes incompetent, or revokes or disputes the
validity of, or liability under, any guaranty of the Indebtedness evidenced by this Note. In the event
of a death, Lender, at its option, may but shall not be required to, permit the Guarantor’s
estate to assume unconditionally the obligations arising under the guaranty in a manner
satisfactory to Lender, and in doing so, cure any Event of Default.

Change
in Ownership. Any change in ownership of twenty-five percent
(25%) or more of the common
stock of Borrower.

Adverse
Change. A material adverse change occurs in Borrower’s financial condition, or Lender
believes the prospect of payment or performance of this Note is impaired.

Insecurity. Lender in good faith believes itself insecure.

Cure
Provisions. If any default, other then a default in payment is curable and if Borrower has not
been given a notice of a branch of the same provision of this Note
within the proceeding twelve (12)
months, it may be cured if Borrower, after receiving written notice
from Lender demanding cure of
such default: (1) [ILLEGIBLE] the default within seven (7)
days; or (2) If the cure required
more than seven (7) days immediately initiates steps which Lender deems in Lender’s sale discretion to be sufficient to cure the default and thereafter continued and completes all
reasonable and necessary steps sufficient to produce compliance as soon as reasonably practical.

LENDER’S

RIGHTS. Upon default, Lender may declare the entire unpaid principal balance under this
Note and all accrued unpaid interest immediately due, and than
Borrower will pay that amount.

ATTORNEYS’
FEES: EXPENSES. Lender may hire or pay someone also to help collect this Note II
Borrower does not pay. Borrower will pay Lender that amount. This includes, subject to any limits
under applicable law, Lender’s reasonable attorneys’ fees and Lender’s legal expenses whether or
not therein a lawsuit, including reasonable attorney’s fees and expenses for
bankruptcy proceedings (including efforts to modify or vacate any automatic stay or injunction),
and appeals. If not prohibited by applicable law, Borrower also will pay any court costs, in
addition to all other sums provided by law.

JURY
WAIVER. Lender and Borrower hereby waive the right to any jury trial in any action,
proceeding, or counterclaim brought by another Lender or Borrower against the other.

GOVERNING
LAW. This Note will be governed by federal law applicable to Lender and to the extent not
prompted by federal law, the laws of

 

 

	 	 	 	 	 
	Loan No: 087404490

	 	PROMISSORY NOTE

(Continued)
	 	Page 2

the State
of Michigan without regard to its conflicts of law provisions. This Note has been
accepted by Lender in the State of Michigan.

CHOICE
OF VENUE. If there is a lawsuit, Borrower agrees upon Lender’s request to submit to the
jurisdiction of the courts of Grand Traverse Country, State of Michigan.

RIGHT
OF SETOFF. To the extent, permitted by applicable law, Lender reserves a right of setoff in
all Borrower’s accounts with Lender (whether checking, savings, or same other account). This
includes all accounts Borrower holds jointly with someone also and all accounts Borrower may open
in the future. However, this does not include any IRA or Keogh accounts, or any trust accounts for
which setoff would be prohibited by law. Borrower authorizes Lender, to the extent permitted by
applicable law, to charge or setoff all sums owing on the indebtedness against any and all such
accounts, and, at Lender’s option, to administratively freeze all such accounts to allow Lender to
protect Lender’s charge and setoff rights provided in this paragraph.

LINE OF
CREDIT. This Note evidences a revolving line of credit. Advances under this Note may be
requested either orally or in writing by Borrower or by an authorized person. Lender may, but need
not, require that all oral requests be confirmed in writing. All communications, Instructions, or
directions by telephone or otherwise to Lender are to be directed to Lender’s office shown above.
Borrower agrees to be liable for all sums either: (A) advanced in accordance with the instructions
of an authorized person or (B) credited to any of Borrower’s accounts with Lender. The unpaid
principal balance owing on this Note at any time may be evidenced by endorsements on this Note or
by Lender’s internal records, including daily computer print-outs. Lender will have no obligation
to advance funds under this Note if: (A) Borrower or any
guarantor is in default under the
terms of this Note or any agreement that Borrower or any guarantor has with Lender, including any
agreement made in connection with the signing of this Note; (B) Borrower or any guarantor
ceases doing business or is insolvent; (C) any guarantor seeks, claims or otherwise attempts
to limit, modify or revoke such guarantor’s guarantee of this
Note or any other loan with Lender;
(D) Borrower has applied funds provided pursuant to this Note for purposes other than those
authorized by Lender; or (E) Lender in good faith believes itself insecure.

COLLATERAL. This loan along with the $1,125,000 Letter of Credit facility are secured by 3,251,250
shares of Cadence Resources Corporation Stock. The total loan to value shall stay at or above 70%
at all times.

SUCCESSOR INTERESTS. The terms of this Note shall be binding upon Borrower, and upon Borrower’s
hairs, personal representatives, successors and assigns, and shall inure to the benefit of Lender
and its successors and assigns.

NOTIFY US
OF INACCURATE INFORMATION WE REPORT TO CONSUMER REPORTING AGENCIES. Please notify us if
we report any inaccurate information about your account(s) to a consumer reporting agency. Your
written notice describing the specific inaccuracy [ies] should be sent to us at the following
address: Northwestern
Bank , Traverse City Garfield, PO Box 809, 625 S. Garfield Ave.,
Traverse City, MI 49685.

GENERAL PROVISIONS. If any part of this Note cannot be enforced, this fact will not affect the rest
of the Note. Lender may delay or forgo enforcing any of its rights or
remedies under this Note
without losing them. Borrower and any other person who sings, guarantees or endorses this Note, to
the extent allowed by law, waive presentment, demand for payment, and notice of dishonor. Upon any
change in the terms of this Note, and unless otherwise expressly stated in writing, no party who
signs this Note, whether as maker, guarantor, accommodation maker or endorser, shall be released
from liability. All such parties agree that Lender may renew or extend (repeatedly and for any
length of time) this loan or release any party or guarantor or collateral; or impair, fail to
realize upon or perfect Lender’s security interest in the collateral; and take any other action
deemed necessary by Lender without the consent of or notice of anyone. All such parties also agree
that Lender may modify this loan without the consent of or notice to
anyone other than the party with whom
the modification is made. The obligations under this Note are joint and several.

PRIOR TO
SIGNING THIS NOTE, BORROWER READ AND UNDERSTOOD ALL THE PROVISIONS OF THIS NOTE, INCLUDING
THE VARIABLE INTEREST RATE PROVISIONS. BORROWER AGREES TO THE TERMS OF THE NOTE.

BORROWER ACKNOWLEDGES RECEIPT OF A COMPLETED COPY OF THIS PROMISSORY
NOTE.

BORROWER:

	 	 	 	 	 
	AURORA ENERGY, LTD	 	 
	 
	 	 	 	 
	By:

	 	/s/ William W. Derreau
 

William W. Derreau, President of Aurora Energy, Ltd
	 	 
	 
	 	 	 	 
	LENDER:	 	 
	 
	 	 	 	 
	NORTHWESTERN BANK	 	 
	 
	 	 	 	 
	X

	 	[ILLEGIBLE]	 	 
	 

	 	 	 	 
	 

	 	Authorized Signer	 	 

[ILLEGIBLE]

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00111-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00111-of-00352.parquet"}]]