Document:

exv10w23

 

Exhibit 10.23

COMMERCIAL PLEDGE AGREEMENT

	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	Principal

	 	Loan Date
	 	Maturity
	 	Loan No
	 	Call / Coll
	 	Account
	 	Officer
	 	Initials
	$7,500,000.00

	 	12-21-2005
	 	10-15-2006
	 	 	067404490	 	 	10 / 66
	 	 	 	 	   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
	 

	 	PO Box 961
	 	 	 	Garfield Office
	 

	 	Traverse City, Ml 49685-0961
	 	 	 	PO Box 809
	 

	 	 	 	 	 	625 S. Garfield Ave.
	 

	 	 	 	 	 	Traverse City, Ml 49685
	 
	 	 	 	 	 	 
	Grantor:

	 	Patricia A. Deneau Trust dated 10/12/95	 	 	 	 
	 

	 	4492 Stoneridge Ct.	 	 	 	 
	 

	 	Traverse City, MI 49684	 	 	 	 

THIS COMMERCIAL PLEDGE AGREEMENT dated December 21, 2005, is made and executed among Patricia A.
Deneau Trust dated 10/12/95 (“Grantor”); Aurora Energy, Ltd (“Borrower”); and Northwestern Bank
(“Lender”).

GRANT
OF SECURITY INTEREST. For valuable consideration, Grantor grants to Lender a security
interest in the Collateral to secure the Indebtedness and agrees that Lender shall have the rights
stated in this Agreement with respect to the Collateral, in addition to all other rights which
Lender may have by law.

COLLATERAL DESCRIPTION. The word “Collateral” as used in this Agreement means all of Grantor’s
property (however owned if more than one), in the possession of Lender (or in the possession of a
third party subject to the control of Lender), whether existing now or later and whether tangible
or intangible in character, including without limitation each and all of the following:

     2944800
Shares of Cadence Resources Corporation Stock, Cusip No. 12738N103

In addition, the word “Collateral” includes all of Grantor’s property (however owned), in the
possession of Lender (or in the possession of a third party subject to the control of Lender),
whether now or hereafter existing and whether tangible or intangible in character, including
without limitation each of the following:

(A) All property to which Lender acquires title or documents of title.

(B) All property assigned to Lender.

(C) All promissory notes, bills of exchange, stock certificates, bonds, savings passbooks, time
certificates of deposit, insurance policies, and all other instruments and evidences of an
obligation.

(D) All records relating to any of the property described in this Collateral section, whether
in the form of a writing, microfilm, microfiche, or electronic media.

(E) All Income and Proceeds from the Collateral as defined herein.

CROSS-COLLATERALIZATION. In addition to the Note, this Agreement secures the following described
additional indebtedness: All obligations, debts and liabilities, plus interest thereon, of
Grantor, or any one or more of them, to Lender, as well as all claims by Lender against Grantor
or any one or more of them, whether now existing or hereafter arising, whether related or
unrelated to the purpose of the Note, whether voluntary or otherwise, whether due or not due,
direct or indirect, determined or undetermined, absolute or contingent, liquidated or
unliquidated whether Grantor may be liable individually or jointly with others, whether obligated
as guarantor, surety, accommodation party or otherwise, and whether recovery upon such amounts
may be or hereafter may become barred by any statute of limitations, and whether the obligation
to repay such amounts may be or hereafter may become otherwise unenforceable.

BORROWER’S WAIVERS AND RESPONSIBILITIES. Except as otherwise required under this Agreement or by
applicable law, (A) Borrower agrees that Lender need not tell Borrower about any action or
inaction Lender takes in connection with this Agreement; (B) Borrower assumes the responsibility
for being and keeping informed about the Collateral; and (C) Borrower waives any defenses that
may arise because of any action or inaction of Lender, including without limitation any failure
of Lender to realize upon the Collateral or any delay by Lender in realizing upon the Collateral;
and Borrower agrees to remain liable under the Note no matter what action Lender takes or fails
to take under this Agreement.

GRANTOR’S REPRESENTATIONS AND WARRANTIES. Grantor warrants that: (A) this Agreement is executed
at Borrower’s request and not at the request of Lender; (B) Grantor has the full right, power and
authority to enter into this Agreement and to pledge the Collateral to Lander; (C) Grantor has
established adequate means of obtaining from Borrower on a continuing basis information about
Borrower’s financial condition; and (D) Lender has made no representation to Grantor about
Borrower or Borrower’s creditworthiness.

GRANTOR’S WAIVERS. Grantor waives all requirements of presentment, protest, demand, and notice of
dishonor or non-payment to Borrower or Grantor, or any other party to the Indebtedness or the
Collateral. Lender may do any of the following with respect to any obligation of any Borrower,
without first obtaining the consent of Grantor: (A) grant any extension of time for any payment,
(B) grant any renewal, (C) permit any modification of payment terms or other terms, or (D)
exchange or release any Collateral or other security. No such act or failure to act shall affect
Lender’s rights against Grantor or the Collateral.

RIGHT
OF SETOFF. To the extent permitted by applicable law. Lender reserves a right of setoff in
all Grantor’s accounts with Lender (whether checking, savings, or some other account). This
includes all accounts Grantor holds jointly with someone else and all accounts Grantor 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. Grantor 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.

REPRESENTATIONS AND WARRANTIES WITH RESPECT TO THE COLLATERAL. Grantor represents and warrants to
Lender that:

Ownership. Grantor is the lawful owner of the Collateral free and clear of all security
interests, liens, encumbrances and claims of others except as disclosed to and accepted by
Lender in writing prior to execution of this Agreement.

Right to Pledge. Grantor has the full right, power and authority to enter into this Agreement
and to pledge the Collateral.

Authority; Binding Effect. Grantor has the full right, power and authority to enter into this
Agreement and to grant a security interest in the Collateral to Lender. This Agreement is
binding upon Grantor as well as Grantor’s successors and assigns, and is legally enforceable
in accordance with its terms. The foregoing representations and warranties, and all other
representations and warranties contained in this Agreement are and shall be continuing in
nature and shall remain in full force and effect until such time as this Agreement is
terminated or cancelled as provided herein.

No Further Assignment. Grantor has not, and shall not, sell, assign, transfer, encumber or
otherwise dispose of any of Grantor’s rights in the Collateral except as provided in this
Agreement.

No Defaults. There are no defaults existing under the Collateral, and there are no offsets or
counterclaims to the same. Grantor will strictly and promptly perform each of the terms,
conditions, covenants and agreements, if any, contained in the Collateral which are to be
performed by Grantor.

No
Violation. The execution and delivery of this Agreement will not violate any law or
agreement governing Grantor or to which Grantor is a party.

Financing Statements. Grantor authorizes Lender to file a UCC financing statement, or
alternatively, a copy of this Agreement to perfect Lender’s security interest. At Lender’s
request, Grantor additionally agrees to sign all other documents that
are necessary to perfect, protect, and continue Lender’s security interest in the Property. Grantor will pay all filing
fees, title transfer fees, and other fees and costs involved unless prohibited by law or
unless Lender is required by law to pay such fees and costs. Grantor irrevocably appoints
Lender to execute documents necessary to transfer title if there is a default. Lender may file
a copy of this Agreement as a financing statement. If Grantor changes Grantor’s name or
address, or the name or address of any person granting a security interest under this
Agreement changes, Grantor will promptly notify the Lender of such change.

LENDER’S RIGHTS AND OBLIGATIONS WITH RESPECT TO THE COLLATERAL. Lender may hold the Collateral
until all Indebtedness has been paid and satisfied. Thereafter Lender may deliver the Collateral
to Grantor or to any other owner of the Collateral. Lender shall have the following rights in
addition to all other rights Lender may have by law:

 

 

COMMERCIAL PLEDGE AGREEMENT

(Continued)

	 	 	 
	Loan No: 067404490

	 	Page 2

Maintenance and Protection of Collateral. Lender may, but shall not be obligated to, take
such steps as it deems necessary or desirable to protect, maintain, insure, store, or care for
the Collateral, including paying of any liens or claims against the Collateral. This may include
such things as hiring other people, such as attorneys, appraisers or other experts. Lender may
charge Grantor for any cost incurred in so doing. When applicable law provides more than one
method of perfection of Lender’s security interest, Lender may choose the method(s) to be used.
If the Collateral consists of stock, bonds or other investment property for which no certificate
has been issued, Grantor agrees, at Lender’s request, either to request issuance of an
appropriate certificate or to give instructions on Lender’s forms to the issuer, transfer agent,
mutual fund company, or broker, as the case may be, to record on its books or records Lender’s
security interest in the Collateral. Grantor also agrees to execute any additional documents,
including but not limited to, a control agreement, necessary to perfect Lender’s security
interest as Lender may desire.

Income and Proceeds from the Collateral. Lender may receive all Income and Proceeds and add it
to the Collateral. Grantor agrees to deliver to Lender immediately upon receipt, in the exact
form received and without commingling with other property, all Income and Proceeds from the
Collateral which may be received by, paid, or delivered to Grantor or for Grantor’s account,
whether as an addition to, in discharge of, in substitution of, or in exchange for any of the
Collateral.

Application
of Cash. At Lender’s option, Lender may apply any cash, whether included in the
Collateral or received as Income and Proceeds or through liquidation, sale, or retirement, of
the Collateral, to the satisfaction of the Indebtedness or such portion thereof as Lender shall
choose, whether or not matured.

Transactions with Others. Lender may (1) extend time for payment or other performance, (2)
grant a renewal or change in terms or conditions, or (3) compromise, compound or release any
obligation, with any one or more Obligors, endorsers, or Guarantors of the Indebtedness as
Lender deems advisable, without obtaining the prior written consent of Grantor, and no such act
or failure to act shall affect Lender’s rights against Grantor or the Collateral.

All Collateral Secures Indebtedness. All Collateral shall be security for the Indebtedness,
whether the Collateral is located at one or more offices or branches
of Lender. This will be
the case whether or not the office or branch where Grantor obtained Grantor’s loan knows about
the Collateral or relies upon the Collateral as security.

Collection of Collateral. Lender at Lender’s option may, but need not, collect the Income and
Proceeds directly from the Obligors. Grantor authorizes and directs the Obligors, if Lender
decides to collect the Income and Proceeds, to pay and deliver to Lender all Income and
Proceeds from the Collateral and to accept Lender’s receipt for the payments.

Power of Attorney. Grantor irrevocably appoints Lender as Grantor’s attorney-in-fact, with full
power of substitution, (a) to demand, collect, receive, receipt for, sue and recover all Income
and Proceeds and other sums of money and other property which may now or hereafter become due,
owing or payable from the Obligors in accordance with the terms of the Collateral; (b) to
execute, sign and endorse any and all instruments, receipts, checks, drafts and warrants issued
in payment for the Collateral; (c) to settle or compromise any and all claims arising under the
Collateral, and in the place and stead of Grantor, execute and deliver Grantor’s release and
acquittance for Grantor; (d) to file any claim or claims or to take any action or institute or
take part in any proceedings, either in Lender’s own name or in the name of Grantor, or
otherwise, which in the discretion of Lender may seem to be necessary or advisable; and (e) to
execute in Grantor’s name and to deliver to the Obligors on Grantor’s behalf, at the time and
in the manner specified by the Collateral, any necessary instruments or documents.

Perfection of Security Interest. Upon Lender’s request, Grantor will deliver to Lender any and
all of the documents evidencing or constituting the Collateral. When applicable law provides
more than one method of perfection of Lender’s security interest, Lender may choose the
method(s) to be used. Upon Lender’s request, Grantor will sign and deliver any writings
necessary to perfect Lender’s security interest. If any of the Collateral consists of
securities for which no certificate has been issued, Grantor agrees, at Lender’s option, either
to request issuance of an appropriate certificate or to execute appropriate instructions on
Lender’s forms instructing the issuer, transfer agent, mutual fund company, or broker, as the
case may be, to record on its books or records, by book-entry or otherwise, Lender’s security
interest in the Collateral. Grantor hereby appoints Lender as Grantor’s irrevocable
attorney-in-fact for the purpose of executing any documents necessary to perfect, amend, or to
continue the security interest granted in this Agreement or to demand termination of filings of
other secured parties. This is a continuing Security Agreement and will continue in effect even
though all or any part of the Indebtedness is paid in full and even though for a period of time
Borrower may not be indebted to Lender.

LENDER’S EXPENDITURES. If any action or proceeding is commenced that would materially affect
Lender’s interest in the Collateral or if Grantor fails to comply with any provision of this
Agreement or any Related Documents, including but not limited to Grantor’s failure to discharge or
pay when due any amounts Grantor is required to discharge or pay under this Agreement or any
Related Documents, Lender on Grantor’s behalf may (but shall not be obligated to) take any action
that Lender deems appropriate, including but not limited to discharging or paying all taxes,
liens, security interests, encumbrances and other claims, at any time levied or placed on the
Collateral and paying all costs for insuring, maintaining and
preserving the Collateral. All such
expenditures incurred or paid by Lender for such purposes will then bear interest at the rate
charged under the Note from the date incurred or paid by Lender to the date of repayment by
Grantor. All such expenses will become a part of the Indebtedness and, at Lender’s option, will
(A) be payable on demand; (B) be added to the balance of the Note and be apportioned among and be
payable with any installment payments to become due during either (1) the term of any applicable
insurance policy; or (2) the remaining term of the Note; or (C) be treated as a balloon payment
which will be due and payable at the Note’s maturity. The Agreement also will secure payment of
these amounts. Such right shall be in addition to all other rights and remedies to which Lender
may be entitled upon Default.

LIMITATIONS ON OBLIGATIONS OF LENDER. Lender shall use ordinary reasonable care in the physical
preservation and custody of the Collateral in Lender’s possession, but shall have no other
obligation to protect the Collateral or its value. In particular, but without limitation, Lender
shall have no responsibility for (A) any depreciation in value of the Collateral or for the
collection or protection of any Income and Proceeds from the Collateral, (B) preservation of
rights against parties to the Collateral or against third persons, (C) ascertaining any
maturities, calls, conversions, exchanges, offers, tenders, or similar matters relating to any of
the Collateral, or (D) informing Grantor about any of the above, whether or not Lender has or is
deemed to have knowledge of such matters. Except as provided above, Lender shall have no liability
for depreciation or deterioration of the Collateral.

DEFAULT. Each of the following shall constitute an Event of Default
under this Agreement:

Payment Default. Borrower fails to make any payment when due under the Indebtedness.

Other Defaults. Borrower or Grantor fails to comply with or to perform any other term,
obligation, covenant or condition contained in this Agreement 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 or Grantor.

Default in Favor of Third Parties. Should Borrower or any Grantor default 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 or any Grantor’s ability to repay the indebtedness or perform their respective
obligations under this Agreement or any of the Related Documents.

False Statements. Any warranty, representation or statement made or furnished to Lender by
Borrower or Grantor or on Borrower’s or Grantor’s behalf under this Agreement 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.

Defective Collateralization. This Agreement or any of the Related Documents ceases to be in
full force and effect (including failure of any collateral document to create a valid and
perfected security interest or lien) at any time and for any reason.

Insolvency. The dissolution or termination of Borrower’s or Grantor’s existence as a going
business, the insolvency of Borrower or Grantor, the appointment of a receiver for any part of
Borrower’s or Grantor’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 or Grantor. 

Creditor or Forfeiture Proceedings. Commencement of
foreclosure or forfeiture proceedings, whether by judicial proceeding, self-help, repossession
or any other method, by any creditor of Borrower or Grantor or by any governmental agency
against any collateral securing the Indebtedness. This includes a garnishment of any of
Borrower’s or Grantor’s accounts, including deposit
accounts, with Lender. However, this Event
of Default shall not apply if there is a good faith dispute by Borrower or Grantor as to the
validity or reasonableness of the claim which is the basis of the creditor or forfeiture
proceeding and if Borrower or Grantor 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 sole discretion, as being an adequate
reserve or bond for the dispute.

Insufficient
Market Value of Securities. Stock Cusip. No. 12738N103: The 70% combined with
other stock pledges; and as a result of the deterioration of the market value of the
Collateral, Grantor does not, by the close of business on the next business day after Grantor
has

 

 

COMMERCIAL
PLEDGE AGREEMENT

(Continued)

	 	 	 
	Loan No: 067404490

	 	Page 3

received notice from Lender of the deterioration, either (1) reduce the amount of the
Indebtedness in this loan as required by Lender or (2) pledge or grant an additional security
interest to increase the value of the Collateral as required by Lender.

Events Affecting Guarantor. Any of the preceding events occurs with respect to any Guarantor
of any of the Indebtedness or Guarantor dies or becomes incompetent or revokes or disputes the
validity of, or liability under, any Guaranty of the Indebtedness.

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

Insecurity. Lender in good faith believes itself insecure,

Cure Provisions. If any default, other than a default in payment or failure to satisfy
Lender’s requirement in the Insufficient Market Value of Securities section is curable and if
Grantor has not been given a notice of a breach of the same provision of this Agreement within
the preceding twelve (12) months, it may be cured if Grantor, after receiving written notice
from Lender demanding cure of such default: (1) cures the default within seven (7) days; or
(2) if the cure requires more than seven (7) days, immediately initiates steps which Lender
deems in Lender’s sole discretion to be sufficient to cure the default and thereafter
continues and completes all reasonable and necessary steps sufficient to produce compliance as
soon as reasonably practical.

RIGHTS AND REMEDIES ON DEFAULT. If an Event of Default occurs under this Agreement, at any time
thereafter, Lender may exercise any one or more of the following rights and remedies:

Accelerate Indebtedness. Declare all Indebtedness, including any prepayment penalty which
Borrower would be required to pay, immediately due and payable, without notice of any kind to
Borrower or Grantor.

Collect the Collateral. Collect any of the Collateral and, at Lender’s option and to the
extent permitted by applicable law, retain possession of the Collateral while suing on the
Indebtedness.

Sell the Collateral. Sell the Collateral, at Lender’s discretion, as a unit or in parcels, at
one or more public or private sales. Unless the Collateral is perishable or threatens to
decline speedily in value or is of a type customarily sold on a recognized market, Lender
shall give or mail to Grantor, and other persons as required by law, notice at least ten (10)
days in advance of the time and place of any public sale, or of the time after which any
private sale may be made. However, no notice need be provided to any person who, after an
Event of Default occurs, enters into and authenticates an agreement waiving that person’s
right to notification of sale. Grantor agrees that any requirement of reasonable notice as to
Grantor is satisfied if Lender mails notice by ordinary mail addressed to Grantor at the last
address Grantor has given Lender in writing. If a public sale is held, there shall be
sufficient compliance with all requirements of notice to the public by a single publication in
any newspaper of general circulation in the county where the Collateral is located, setting
forth the time and place of sale and a brief description of the property to be sold. Lender
may be a purchaser at any public sale.

Sell
Securities. Sell any securities included in the Collateral in a manner consistent with
applicable federal and state securities laws. If, because of
restrictions under such laws,
Lender is unable, or believes Lender is unable, to sell the securities in an open market
transaction, Grantor agrees that Lender will have no obligation to delay sale until the
securities can be registered. Then Lender may make a private sale to one or more persons or to
a restricted group of persons, even though such sale may result in a price that is less
favorable than might be obtained in an open market transaction. Such a sale will be considered
commercially reasonable. If any securities held as Collateral are “restricted securities” as
defined in the Rules of the Securities and Exchange Commission (such as Regulation D or Rule
144) or the rules of state securities departments under state “Blue Sky” laws, or if Grantor
or any other owner of the Collateral is an affiliate of the issuer of the securities, Grantor
agrees that neither Grantor, nor any member of Grantor’s family, nor any other person signing
this Agreement will sell or dispose of any securities of such issuer without obtaining
Lender’s prior written consent.

Rights and Remedies with Respect to Investment Property, Financial Assets and Related
Collateral. In addition to other rights and remedies granted under this Agreement and under
applicable law, Lender may exercise any or all of the following rights and remedies: (1)
register with any issuer or broker or other securities intermediary any of the Collateral
consisting of investment property or financial assets (collectively herein, “investment
property”) in Lender’s sole name or in the name of Lender’s broker, agent or nominee; (2) cause
any issuer, broker or other securities intermediary to deliver to Lender any of the Collateral
consisting of securities, or investment property capable of being delivered; (3) enter into a
control agreement or power of attorney with any issuer or securities intermediary with respect
to any Collateral consisting of investment property, on such terms as Lender may deem
appropriate, in its sole discretion, including without limitation, an agreement granting to
Lender any of the rights provided hereunder without further notice to or consent by Grantor;
(4) execute any such control agreement on Grantor’s behalf and in Grantor’s name, and hereby
irrevocably appoints Lender as agent and
attorney-in-fact, coupled with an interest, for the
purpose of executing such control agreement on Grantor’s behalf; (5) exercise any and all
rights of Lender under any such control agreement or power of attorney; (6) exercise any
voting, conversion, registration purchase, option, or other rights with respect to any
Collateral; (7) collect, with or without legal action, and issue receipts concerning any notes,
checks, drafts, remittances or distributions that are paid or payable with respect to any
Collateral consisting of investment property. Any control agreement entered with respect to any
investment property shall contain the following provisions, at Lender’s discretion. Lender
shall be authorized to instruct the issuer, broker or other securities intermediary to take or
to refrain from taking such actions with respect to the investment property as Lender may
instruct, without further notice to or consent by Grantor. Such actions may include without
limitation the issuance of entitlement orders, account instructions, general trading or buy or
sell orders, transfer and redemption orders, and stop loss orders. Lender shall be further
entitled to instruct the issuer, broker or securities intermediary to sell or to liquidate any
investment property, or to pay the cash surrender or account termination value with respect to
any and all investment property, and to deliver ail such payments and liquidation proceeds to
Lender. Any such control agreement shall contain such authorizations as are necessary to place
Lender in “control” of such investment collateral, as contemplated under the provisions of the
Uniform Commercial Code, and shall fully authorize Lander to issue “entitlement orders”
concerning the transfer, redemption, liquidation or disposition of investment collateral, in
conformance with the provisions of the Uniform Commercial Code.

Foreclosure. Maintain a judicial suit for foreclosure and sale of the Collateral.

Transfer Title. Effect transfer of title upon sale of all or part of the Collateral, For this
purpose, Grantor irrevocably appoints Lender as Grantor’s attorney-in-fact to execute
endorsements, assignments and instruments in the name of Grantor and each of them (if more
than one) as shall be necessary or reasonable.

Other Rights and Remedies. Have and exercise any or all of the rights and remedies of a
secured creditor under the provisions of the Uniform Commercial Code, at law, in equity, or
otherwise.

Application of Proceeds. Apply any cash which is part of the Collateral, or which is received
from the collection or sale of the Collateral, to reimbursement of any expenses, including any
costs for registration of securities, commissions incurred in connection with a sale,
reasonable attorneys’ fees and court costs, whether or not there is a lawsuit and including
any fees on appeal, incurred by Lender in connection with the collection and sale of such
Collateral and to the payment of the Indebtedness of Borrower to Lender, with any excess funds
to be paid to Grantor as the interests of Grantor may appear. Borrower agrees, to the extent
permitted by law, to pay any deficiency after application of the proceeds of the Collateral to
the Indebtedness.

Election of Remedies. Except as may be prohibited by applicable law, all of Lender’s rights
and remedies, whether evidenced by this Agreement, the Related Documents, or by any other
writing, shall be cumulative and may be exercised singularly or concurrently. Election by
Lender to pursue any remedy shall not exclude pursuit of any other remedy, and an election to
make expenditures or to take action to perform an obligation of Grantor under this Agreement,
after Grantor’s failure to perform, shall not affect Lender’s right to declare a default and
exercise its remedies.

MISCELLANEOUS PROVISIONS. The following miscellaneous provisions are a part of this Agreement:

Amendments. This Agreement, together with any Related Documents, constitutes the entire
understanding and agreement of the parties as to the matters set forth in this Agreement. No
alteration of or amendment to this Agreement shall be effective unless given in writing and
signed by the party or parties sought to be charged or bound by the
alteration or amendment.

Attorneys’ Fees; Expenses. Grantor agrees to pay upon demand all of Lender’s costs and
expenses, including Lender’s reasonable attorneys’ fees and Lender’s legal expenses, incurred
in connection with the enforcement of this Agreement. Lender may hire or pay someone else to
help enforce this Agreement, and Grantor shall pay the costs and expenses of such enforcement.
Costs and expenses include Lender’s reasonable attorneys’ fees and legal expenses whether or
not there is a lawsuit, inducting reasonable attorneys’ fees and legal expenses for bankruptcy
proceedings (including efforts to modify or vacate any automatic stay or injunction), appeals,
and any anticipated post-judgment collection services. Grantor also shall pay all court costs
and such additional fees as may be directed by the court.

Caption Headings. Caption headings in this Agreement are for convenience purposes only and are
not to be used to interpret or define the

 

 

COMMERCIAL PLEDGE AGREEMENT

(Continued)

	 	 	 
	Loan No: 067404490

	 	Page 4

provisions of this

Caption Headings. Caption headings in this Agreement are for convenience purposes only and are
not to be used to interpret or define the provisions of this Agreement.

Governing Law. This Agreement will be governed by federal law applicable to Lender and, to
the extent not preempted by federal law, the laws of the State of Michigan without regard to
its conflicts of law provisions. This Agreement has been accepted by Lender in the State of
Michigan.

Choice of Venue. If there is a lawsuit. Grantor agrees upon Lender’s request to submit
to the jurisdiction of the courts of Grand Traverse County, State of
Michigan.

Joint and Several Liability. All obligations of Borrower and Grantor under this Agreement
shall be joint and several, and all references to Grantor shall mean each and every Grantor,
and all references to Borrower shall mean each and every Borrower. This means that each
Borrower and Grantor signing below is responsible for all obligations in this Agreement.

No Waiver by Lender. Lender shall not be deemed to have waived any rights under this Agreement
unless such waiver is given in writing and signed by Lender. No delay or omission on the part
of Lender in exercising any right shall operate as a waiver of such right or any other right.
A waiver by Lender of a provision of this Agreement shall not prejudice or constitute a waiver
of Lender’s right otherwise to demand strict compliance with that provision or any other
provision of this Agreement. No prior waiver by Lender, nor any course of dealing between
Lender and Grantor, shall constitute a waiver of any of Lender’s rights or of any of Grantor’s
obligations as to any future transactions. Whenever the consent of Lender is required under
this Agreement, the granting of such consent by Lender in any instance shall not constitute
continuing consent to subsequent instances where such consent is required and in all cases
such consent may be granted or withheld in the sole discretion of Lender.

Notices. Any notice required to be given under this Agreement shall be given in writing, and
shall be effective when actually delivered, when actually received by
telefacsimile (unless
otherwise required by law), when deposited with a nationally recognized overnight courier, or,
if mailed, when deposited in the United States mail, as first class, certified or registered
mail postage prepaid, directed to the addresses shown near the beginning of this Agreement,
Any party may change its address for notices under this Agreement by giving formal written
notice to the other parties, specifying that the purpose of the notice is to change the
party’s address. For notice purposes, Grantor agrees to keep Lender informed at all times of
Grantor’s current address. Unless otherwise provided or required by law, if there is more than
one Grantor, any notice given by Lender to any Grantor is deemed to be notice given to all
Grantors.

Severability. If a court of competent jurisdiction finds any provision of this Agreement to be
illegal, invalid, or unenforceable as to any circumstance, that finding shall not make the
offending provision illegal, invalid, or unenforceable as to any other circumstance. If
feasible, the offending provision shall be considered modified so that it becomes legal, valid
and enforceable. If the offending provision cannot be so modified, it shall be considered
deleted from this Agreement. Unless otherwise required by law, the illegality, invalidity, or
unenforceability of any provision of this Agreement shall not affect the legality, validity or
enforceability of any other provision of this Agreement.

Successors and Assigns. Subject to any limitations stated in this Agreement on transfer of
Grantor’s interest, this Agreement shall be binding upon and inure to the benefit of the
parties, their successors and assigns. If ownership of the Collateral becomes vested in a
person other than Grantor, Lender, without notice to Grantor, may deal with Grantor’s
successors with reference to this Agreement and the Indebtedness by way of forbearance or
extension without releasing Grantor from the obligations of this Agreement or liability under
the Indebtedness.

Time is of the Essence. Time is of the essence in the performance of this Agreement.

Waive Jury. All parties to this Agreement hereby waive the right to any jury trial in any
action, proceeding, or counterclaim brought by any party against any other party.

DEFINITIONS. The following capitalized words and terms shall have the following meanings
when used in this Agreement. Unless specifically stated to the contrary, all references to dollar
amounts shall mean amounts in lawful money of the United States of America. Words and terms used
in the singular shall include the plural, and the plural shall include the singular, as the
context may require. Words and terms not otherwise defined in this Agreement shall have the
meanings attributed to such terms in the Uniform Commercial Code:

Agreement. The word “Agreement” means this Commercial Pledge Agreement, as this Commercial
Pledge Agreement may be amended or modified from time to time, together with all exhibits and
schedules attached to this Commercial Pledge Agreement from time to
time.

Borrower. The word “Borrower” means Aurora Energy, Ltd and includes all co-signers and
co-makers signing the Note and all their successors and assigns.

Collateral. The word “Collateral” means all of Grantor’s right, title and interest in and to
all the Collateral as described in the Collateral Description section of this Agreement.

Default. The word “Default” means the Default set forth in this Agreement in the section
titled “Default”.

Event of Default. The words “Event of Default” mean any of the events of default set forth in
this Agreement in the default section of this Agreement.

Grantor. The word “Grantor” rneans Patricia A. Deneau Trust dated 10/12/95.

Guarantor. The word “Guarantor” means any guarantor, surety, or accommodation party of any or
all of the Indebtedness.

Guaranty. The word “Guaranty” means the guaranty from Guarantor to Lender, including without
limitation a guaranty of all or part of the Note.

Income and Proceeds. The words “Income and Proceeds” mean all present and future income,
proceeds, earnings, increases, and substitutions from or for the Collateral of every kind and
nature, including without limitation all payments, interest, profits, distributions, benefits,
rights, options, warrants, dividends, stock dividends, stock splits, stock rights, regulatory
dividends, subscriptions, monies, claims for money due and to become due, proceeds of any
insurance on the Collateral, shares of stock of different par value or no par value issued in
substitution or exchange for shares included in the Collateral, and all other property Grantor
is entitled to receive on account of such Collateral, including accounts, documents,
instruments, chattel paper, and general intangibles.

Indebtedness. The word “Indebtedness” means the indebtedness evidenced by the Note or Related
Documents, including all principal and interest together with all other indebtedness and costs
and expenses for which Borrower is responsible under this Agreement or under any of the Related
Documents. Specifically, without limitation, Indebtedness includes all amounts that may be
indirectly secured by the Cross-Collateralization provision of this Agreement.

Lender. The word “Lender” means Northwestern Bank, its successors and assigns.

Note. The word “Note” means the Note executed by Aurora Energy, Ltd in the principal amount of
$7,500,000.00 dated December 21, 2005, together with all renewals of, extensions of,
modifications of, refinancings of, consolidations of, and substitutions for the note or credit
agreement.

Obligor. The word “Obligor” means without limitation any and all persons obligated to pay
money or to perform some other act under the Collateral.

Property. The word “Property” means all of Grantor’s right, title and interest in and to all
the Property as described in the “Collateral Description” section of this Agreement.

Related Documents. The words “Related Documents” mean all promissory notes, credit agreements,
loan agreements, environmental agreements, guaranties, security agreements, mortgages, deeds
of trust, security deeds, collateral mortgages, and all other instruments, agreements and
documents, whether now or hereafter existing, executed in connection with the Indebtedness.

BORROWER AND GRANTOR HAVE READ AND UNDERSTOOD ALL THE PROVISIONS OF THIS COMMERCIAL PLEDGE
AGREEMENT AND AGREE TO ITS TERMS. THIS AGREEMENT IS DATED DECEMBER
21, 2005.

 

 

COMMERCIAL
PLEDGE AGREEMENT

(Continued)

	 	 	 
	Loan No: 067404490

	 	Page 5

	 	 	 	 	 
	GRANTOR:	 	 
	 
	 	 	 	 
	PATRICIA A. DENEAU TRUST DATED 10/12/95	 	 
	 
	 	 	 	 
	

	By:

	 	/s/ William W. Deneau
 

	 	 
	 

	 	William W. Deneau, Trustee of Patricia A. Deneau	 	 
	 

	 	Trust dated 10/12/95	 	 
	 
	 	 	 	 
	

	BORROWER:	 	 
	 
	 	 	 	 
	AURORA ENERGY, LTD	 	 
	 
	 	 	 	 
	

	By:

	 	/s/ William W. Deneau
 

William W. Deneau, President of Aurora Energy, Ltd
	 	 
	 

	 		 	 
	 
	 	 	 	 
	

	LENDER:	 	 
	 
	 	 	 	 
	NORTHWESTERN BANK	 	 
	 
	 	 	 	 
	

	By:

	 	/s/ William H. Green [ILLEGIBLE]
 

Authorized Signer
	 	 
	

LASER
PRO Landing. Ver, $,30.00.004 Corp. Harland Financial Solutions, Inc.
1987, 2006. All Rights Reserved. - MI U:\CR_LIB\CFI\LPL\E20.FC TR-31052 PR-53EX-10.1 Amended & Restated Stock Option Plan

 

Amendment to the

AutoNation, Inc.

1995 Amended and Restated Non-Employee Director Stock Option Plan

          WHEREAS, the Board of Directors (the “Board”) of AutoNation, Inc. (the “Company”) has
determined that it is in the best interest of the Company that the AutoNation, Inc. 1995 Amended
and Restated Non-Employee Director Stock Option Plan (the “Plan”) be amended to terminate future
automatic grants under the Plan; and

          WHEREAS, the Board has the authority under Section 11 of the Plan to amend the Plan.

          NOW, THEREFORE, pursuant to Section 11 thereof, the Plan is hereby amended as set forth below:

     1. Section 4 of the Plan is hereby amended by adding the following sentence to the end
thereof:

“Notwithstanding anything to the contrary contained herein, no automatic grant of
Options shall be made hereunder on or after October 24, 2006.”

The effective date of this amendment is October 24, 2006. Except as herein modified, the Plan
shall remain in full force and effect.

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