Document:

Unassociated Document

    
      

        
          	
                  EXHIBIT
                    10.20

                	
                  FINAL
                    EXECUTION VERSION

                
	 	
                  06/12/08

                
	 	 

        

      

      FORBEARANCE
        AGREEMENT AND AMENDMENT NO. 1

      TO
        SECOND LIEN TERM LOAN AGREEMENT

       

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

       

      RECITALS

       

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

       

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

       

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

       

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

       

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

       

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

       

      SECTION
        1.  DEFINED
        TERMS.
        

       

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

       

      SECTION
        2.  WAIVER
        AND CONSENT. 

       

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

       

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

       

      SECTION
        3.  FORBEARANCE.

       

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

       

      
        
          
          

        

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

       

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

       

      3.2  Agreement
        to Standstill.
        

       

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

       

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

       

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

       

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

       

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

       

      
        
          
          

        

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

       

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

       

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

       

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

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

       

      SECTION
        4.  AMENDMENT
        TO LOAN AGREEMENT.

       

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

       

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

       

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

       

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

       

      
        
          
          

        

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

       

      SECTION
        5.  REPRESENTATIONS
        AND WARRANTIES. 

       

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

       

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

       

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

       

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

       

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

       

      
        
          
          

        

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

       

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

       

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

       

      SECTION
        6.  CONDITIONS
        PRECEDENT. 

       

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

       

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

       

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

       

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

       

      
        
          
          

        

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

       

      SECTION
        7.  MISCELLANEOUS

       

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

       

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

       

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

       

      
        
          
          

        

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

       

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

       

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

       

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

       

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

       

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

       

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

       

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

       

      7.12  Construction;
        Integration.
        This
        Agreement has been freely negotiated by the parties and the principle of
        construction against draftsmen shall have no application in the interpretation
        of this Agreement. THIS AGREEMENT AND THE OTHER LOAN DOCUMENTS REPRESENT
        THE
        FINAL AGREEMENT BETWEEN THE PARTIES AND MAY NOT BE CONTRADICTED BY EVIDENCE
        OF
        PRIOR, CONTEMPORANEOUS OR SUBSEQUENT ORAL AGREEMENTS OF THE PARTIES. THERE
        ARE
        NO UNWRITTEN ORAL AGREEMENTS BETWEEN THE PARTIES.

       

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

      

      

      [THE
        REMAINDER OF THIS PAGE HAS BEEN INTENTIONALLY LEFT BLANK]

       

      
        
          
          

        

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

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

                  Title:
                    Chief Executive Officer

                
	 	 

        

        
          	 	 	 
	 	
                  HUDSON
                    PIPELINE & PROCESSING CO., LLC

                  By:
                    AURORA
                    Oil & Gas Corporation, its sole manager

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

                  Title:
                    Chief Executive Officer

                
	 	 

        
          
            
            

          

          
            
            

            
              

            

          

          
            
            

          

        

        

          
            	 	
                    
                      BNP
                        PARIBAS, as Administrative Agent and a Lender

                    

                  
	 	 
	 	 
	 	
                    By:/s/
                      Douglas R. Liftman

                  
	 	
                    Name:Douglas
                      R. Liftman

                  
	 	
                    Title:Managing
                      Director

                  
	 	 
	 	 
	 	
                    By:/s/
                      Betsy Jocher

                  
	 	
                    Name:Betsy
                      Jocher

                  
	 	
                    Title:Director

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

                    

                  
	 	 
	 	 
	 	
                    By:
                      /s/
                      Daniel Posner 

                  
	 	
                    Name:
                      Daniel Posner

                  
	 	
                    Title:
                      Authorized
                      Signatory

                  
	 	 
	 	 
	 	
                    
                      CIT
                        CAPITAL USA, INC., as a Lender

                    

                  
	 	 
	 	 
	 	
                    By:
                      /s/
                      George E. McKean

                  
	 	
                    Name:
                      George
                      E. McKean

                  
	 	
                    Title:
                      Vice
                      President

                  

          

        

      

      
        
           

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

                      

                    

                  
	 	 
	 	 
	 	
                    By:
                      _____________

                  
	 	
                    Name:
                      _____________

                  
	 	
                    Title:
                      _____________

                  
	 	 
	 	 

          

        

      

       

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

       

      EXHIBIT
        A

       

      [FORM
        OF] GUARANTOR
        ACKNOWLEDGMENT AND RELEASE

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

       

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

       

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

       

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

      HUDSON
        PIPELINE & PROCESSING CO., LLC

      

      By:
        Aurora Oil & Gas Corporation, its sole manager

      

      

      By:
        /s/
        William W. Deneau

      Name:
        William W. Deneau

      Dated:
        Chief
        Executive Officer

       

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

      EXHIBIT
        B

       

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

      

      SCHEDULE
        I

       

      DESIGNATED
        DEFAULTS

       

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

       

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

       

      For
        the
        avoidance of doubt, Designated Defaults do not include any Waived
        Defaults.Exhibit 10.1

                              AMENDED AND RESTATED
                               SEVERANCE AGREEMENT

     THIS AMENDED AND RESTATED SEVERANCE  AGREEMENT (the "Agreement") is entered
into as of June 12, 2008, by and between , an  individual  residing in the State
of New York ("Senior  Officer") and Acadia Realty Trust,  a Maryland real estate
investment  trust,  and Acadia Realty Limited  Partnership,  a Delaware  limited
partnership,  both with  offices at 1311  Mamaroneck  Avenue,  Suite 260,  White
Plains, New York 10605 (collectively, the "Company").

                                    RECITALS

     WHEREAS, the Company and Senior Officer previously entered into a Severance
Agreement dated April 6, 2001 (the "Original  Severance  Agreement"),  which was
amended pursuant to a First Amendment to Severance Agreement dated as of January
19, 2007 (the "Amendment",  the Original  Severance  Agreement and the Amendment
are collectively referred to as the "Severance Agreement"); and

     WHEREAS,  Section  409A  of the  Internal  Revenue  Code  requires  certain
modifications be made to the Severance Agreement; and

     WHEREAS,  Senior Officer and the Company desire to enter into the Agreement
to  reflect  those  certain  required  modifications  and  certain  other  items
described herein.

     NOW,  THEREFORE,  in consideration of the premises and the mutual covenants
and agreement set forth herein, the parties hereby agree as follows:

     1.   Termination of Employment and Change in Control.

     (a) Senior  Officer's  employment  hereunder  may be terminated at any time
under the following circumstances:

     (i)  Cause.  The Company shall have the right to terminate Senior Officer's
          employment   for  Cause  upon   Senior   Officer's:   (A)   deliberate
          misrepresentation  in connection with, or willful failure to cooperate
          with  a  bona  fide  internal  investigation  or an  investigation  by
          regulatory or law enforcement  authorities,  after being instructed by
          the Company to  cooperate,  or the willful  destruction  or failure to
          preserve  documents  or other  materials  known to be relevant to such
          investigation or the willful inducement of others to fail to cooperate
          or to produce documents or other materials; (B) failure to perform his
          duties  hereunder  (other than any such failure  resulting from Senior
          Officer's  incapacity due to physical or mental illness) which failure
          continues for a period of three (3) business days after written demand
          for  corrective  action  is  delivered  by  the  Company  specifically
          identifying  the  manner  in which the  Company  believes  the  Senior
<PAGE>

          Officer  has not  performed  his  duties;  (C)  conduct  by the Senior
          Officer   constituting  a  material  act  of  willful   misconduct  in
          connection  with the  performance  of his duties,  including,  without
          limitation, misappropriation of funds or property of the Company other
          than the occasional,  customary and de minimis use of Company property
          for personal purposes; (D) disparagement of the Company, its officers,
          trustees,  employees or partners; (E) soliciting any existing employee
          of the Company above the level of an administrative  assistant to work
          at another  company;  or (F) the commission by the Senior Officer of a
          felony or misdemeanor involving moral turpitude, deceit, dishonesty or
          fraud.

     (ii) Death. Senior Officer's  employment hereunder shall terminate upon his
          death.

     (iii) Disability.  The  Company  shall have the right to  terminate  Senior
          Officer's  employment due to "Disability" in the event that there is a
          determination  by the  Company  that the  Senior  Officer  has  become
          physically or mentally  incapable of performing  his duties under this
          Agreement and such  disability  has disabled the Senior  Officer for a
          cumulative  period of one  hundred  eighty  (180) days within a twelve
          (12) month period.

     (iv) Good Reason.  The Senior Officer shall have the right to terminate his
          employment within the 90 day period following the Company's failure to
          cure any of the following events that will constitute "Good Reason" if
          not cured within the 30-day period  following  written  notice of such
          default to the Company by the Senior Officer:  (A) upon the occurrence
          of any material  breach of this  Agreement by the Company  which shall
          include but not be limited to: a material,  adverse  alteration in the
          nature of Senior Officer's duties,  responsibilities or authority; (B)
          upon a material reduction in Senior Officer's Annual Base Salary as in
          effect at the time in question,  or a failure to pay such amounts when
          due, or (C) if the Company relocates Senior Officer's office requiring
          the Senior Officer to increase his commuting time by more than one (1)
          hour.  Any notice  hereunder by the Senior Officer must be made within
          90 days after the  Senior  Officer  first  knows or has reason to know
          about the occurrence of the event alleged to be Good Reason.

     (v)  Without  Cause.  The  Company  shall have the right to  terminate  the
          Senior  Officer's  employment  hereunder  Without Cause subject to the
          terms and conditions of this Agreement.

                                      -2-
<PAGE>

     (vi) Change in Control.  For purposes of this Agreement "Change in Control"
          shall  mean that any of the  following  events has  occurred:  (A) any
          "person" or "group" of persons,  as such terms are used in Sections 13
          and  14 of the  Securities  Exchange  Act of  1934,  as  amended  (the
          "Exchange Act"), other than any employee benefit plan sponsored by the
          Company,  becomes  the  "beneficial  owner",  as such  term is used in
          Section 13 of the Exchange Act (irrespective of any vesting or waiting
          periods) of (i) Common Shares in an amount equal to thirty percent (30
          %) or  more  of  the  sum  total  of  the  Common  Shares  issued  and
          outstanding  immediately  prior to such  acquisition as if they were a
          single class and  disregarding any equity raise in connection with the
          financing of such transaction;  provided, however, that in determining
          whether a Change of Control has occurred, Outstanding Shares or Voting
          Securities  which are acquired in an acquisition by (i) the Company or
          any of its  subsidiaries or (ii) an employee  benefit plan (or a trust
          forming  a  part  thereof)  maintained  by the  Company  or any of its
          subsidiaries  shall not  constitute an  acquisition  which can cause a
          Change  of  Control;  or  (B)  the  approval  of  the  dissolution  or
          liquidation  of the Company;  or (C) the approval of the sale or other
          disposition  of all or  substantially  all of its assets in one (1) or
          more transactions;  or (D) a turnover, during any two (2) year period,
          of the  majority of the  members of the Board,  without the consent of
          the majority of the members of the Board as to the  appointment of the
          new Board members.

     (b) Notice of Termination Any termination of Senior Officer's employment by
the Company or any such termination by the Senior Officer (other than on account
of death) shall be  communicated  by written  Notice of Termination to the other
party hereto.  For purposes of this Agreement,  a "Notice of Termination"  shall
mean a notice which shall  indicate the specific  termination  provision in this
Agreement  relied  upon and shall set forth in  reasonable  detail the facts and
circumstances  claimed to provide a basis for  termination  of Senior  Officer's
employment under the provision so indicated.  In the event of the termination of
Senior Officer's  employment on account of death,  written Notice of Termination
shall be deemed to have been provided on the date of death.

     2.   Compensation  Upon  Termination of Employment By the Company for Cause
          or Voluntarily By The Senior Officer.

     In the event the Company terminates Senior Officer's  employment for Cause,
or the Senior Officer voluntarily  terminates his employment,  the Company shall
pay the Senior  Officer any unpaid Annual Base Salary at the rate then in effect
accrued through and including the date of termination  and any accrued  vacation
pay ("Unpaid Accrued  Salary").  In addition,  in such event, the Senior Officer
shall be entitled to exercise any options which,  as of the date of termination,
have vested and are  exercisable in accordance  with the terms of the applicable
option grant  agreement or plan.  All options,  restricted  stock and  long-term
incentive  partnership  interests  ("LTIP" Units") granted to the Senior Officer
which have not vested on the date of termination shall automatically terminate.

                                      -3-
<PAGE>

     Except for any rights which the Senior  Officer may have to Unpaid  Accrued
Salary  through and including the date of  termination,  and vested  options and
stock, the Company shall have no further  obligations  hereunder  following such
termination.  The aforesaid  amounts shall be payable in full  immediately  upon
such termination.

     3.   Compensation  Upon Termination of Employment Upon  Disability,  Death,
          Without Cause or By Senior Officer for Good Reason.

     In the event of termination of Senior  Officer's  employment as a result of
Senior Officer's Disability,  Death, Without Cause or by Senior Officer for Good
Reason,  the Company shall pay to the Senior Officer,  the following in a single
cash payment made within thirty days following the Senior  Officer's  employment
termination  date (or such  later  date as  determined  pursuant  to  Section 21
below):

          (i)  any Unpaid  Accrued  Salary  through  and  including  the date of
               termination; plus

          (ii) an amount equal to one year's  salary at the then current  annual
               base salary (before any  reductions)  (the  "Severance  Salary");
               plus

          (iii) reimbursement of expenses  incurred prior to date of termination
               ("Expense Reimbursement"); plus

          (iv) the Senior  Officer's  car  allowance,  if any, for one year (the
               "Car Allowance"); plus

          (v)  a pro rata portion of Senior Officer's bonus (based upon the last
               two/three year's bonus); plus

     In the event of termination of or resignation by Senior Officer  because of
a Change in Control, in addition to the above amounts,

          (vi) the Company  shall pay to the Senior  Officer an amount  equal to
               six  month's  base  salary  (the  "Change  of  Control  Retention
               Payment"); and

          (vii) the Company  shall  continue  Senior  Officer's  base salary and
               medical  benefits  for a period not to exceed the  earlier of (a)
               six months from the date of such termination or (b) the date when
               Senior  Officer  becomes  reemployed;  provided  that the  Senior
               Officer  shall  collect all such salary and benefits on or before
               March 15th of the  calendar  year  after the date of  termination
               (with the Company  paying the Senior Officer a lump sum as needed
               on or before  such March 15th in order to provide  the full value
               of any salary and benefits otherwise payable thereafter).

                                      -4-
<PAGE>

     Notwithstanding  anything to the contrary  contained  herein, if the Senior
Officer's  employment  is  terminated  Without  Cause,  or  the  Senior  Officer
terminates  his  employment  for Good  Reason  prior to a Change of Control  and
subsequently an event is announced  within six months of his termination  which,
when consummated,  would constitute a Change of Control, then the Senior Officer
shall be entitled to the payment described in Section 3(vi) upon consummation.

     In addition,  all (A)  incentive  compensation  payments or programs of any
nature whether stock based or otherwise that are subject to a vesting  schedule,
including without limitation restricted stock, phantom stock, units and any loan
forgiveness   arrangements   granted   to   the   Senior   Officer   ("Incentive
Compensation")  shall  immediately  vest  as of the  date  of  such  termination
("Vested Incentive  Compensation") and (B) options granted to the Senior Officer
shall immediately vest as of the date of such termination (the "Vested Options")
and the Senior  Officer  shall be entitled at the option of the Senior  Officer,
his estate or his personal representative,  within 18 months of the date of such
termination  (or expiration of their initial term, if earlier),  to exercise any
options which have vested  (including,  without  limitation,  by acceleration in
accordance  with  the  terms  of the  Agreement,  the  applicable  option  grant
agreement  or plan)  and are  exercisable  in  accordance  with the terms of the
applicable option grant agreement or plan and/or any other methods or procedures
for exercise  applicable  to optionees or to require the Company  (upon  written
notice  delivered  within one hundred  (180) days  following  the date of Senior
Officer's  termination,  to  repurchase  all or any portion of Senior  Officer's
vested  options  to  purchase  shares of Common  Shares at a price  equal to the
difference between the Repurchase Fair Market Value (as hereinafter  defined) of
the Common Shares for which the options to be repurchased  are  exercisable  and
the  exercise  price  of  such  options  as of  the  date  of  Senior  Officer's
termination of employment (the "Vested Option Exercise Election").  In the event
of a conflict between any option grant agreement or plan and this Agreement, the
terms  of  this  Agreement  shall  control.  For  purposes  of  this  Agreement,
"Repurchase  Fair Market  Value" shall mean the average of the closing  price on
the New York Stock  Exchange (or such other  exchange on which the Common Shares
are  primarily  traded) of the Common  Shares on each of the trading days within
the twenty (20) days  immediately  preceding the date of  termination  of Senior
Officer's employment.

     Except for any rights which the Senior Officer may have to all of the above
including   unpaid  Accrued   Salary,   Severance   Salary,   Vested   Incentive
Compensation,  Vested Options, Expense Reimbursement,  the Car Allowance and the
Bonus, the Company shall have no further  obligations  hereunder  following such
termination.

     The  parties  both agree that the  agreement  to make  these  payments  was
consideration and an inducement to obtain Senior Officer's consent to enter into
this Agreement. The payments are not a penalty and neither party will claim them
to be a  penalty.  Rather,  the  payments  represent  a  fair  approximation  of
reasonable amounts due to the Senior Officer.

     4.   Change in Control.

     Following a Change in Control, the following rights shall arise:

                                      -5-
<PAGE>

     (a) Options. Any options granted to the Senior Officer that have not vested
as of the date of a Change in Control  shall  immediately  vest upon the date of
the Change in Control.  Neither the  occurrence of a Change in Control,  nor the
vesting in any options as a result  thereof shall require the Senior  Officer to
exercise  any  options.  In the event of a conflict  between  any  option  grant
agreement or plan and this Agreement, the terms of this Agreement shall control.

     (b) Restricted  Stock and LTIP Units.  Any restricted  stock and LTIP Units
granted to the Senior Officer that have not vested as of the date of a Change in
Control shall  immediately  vest upon the date of the Change in Control.  In the
event of a conflict  between any  restricted  stock  agreement  or plan and this
Agreement, the terms of this Agreement shall control.

     (c) Upon Termination. If the surviving entity terminates Senior's Officer's
employment  Without Cause or the Senior  Officer  terminates  his employment for
Good  Reason,  the  Company  or the  surviving  entity  shall pay to the  Senior
Officer,  and the Senior  Officer  shall be entitled  to, all the  payments  and
rights the Senior  Officer would have in Paragraph 3, including the payments due
under Paragraph 3.(vi) and (vii),  but less the value of any severance  payments
Senior Officer  receives from the surviving  entity after the date of the Change
of Control. The rights described herein are subject to the provisions of Section
6(b).

     5.   Indemnification/Legal Fees.

     (a)  Indemnification.  In the event the  Senior  Officer  is made  party or
threatened to be made a party to any action, suit or proceeding,  whether civil,
criminal,  administrative or investigative (a "Proceeding"), by reason of Senior
Officer's  employment  with or serving as an officer of the Company,  whether or
not the basis of such Proceeding is alleged action in an official capacity,  the
Company shall indemnify,  hold harmless and defend Senior Officer to the fullest
extent  authorized  by Maryland  law, as the same  exists and may  hereafter  be
amended, against any and all claims, demands, suits, judgments,  assessments and
settlements  including  all expenses  incurred or suffered by Senior  Officer in
connection  therewith  (including,  without limitation,  all legal fees incurred
using counsel reasonably  acceptable to Senior Officer) and such indemnification
shall  continue  as to Senior  Officer  even after  Senior  Officer is no longer
employed by the Company and shall inure to the benefit of his heirs,  executors,
and  administrators.  To the extent allowed by applicable law, expenses incurred
by Senior Officer in connection with any Proceeding shall be paid by the Company
in advance  upon request of Senior  Officer that the Company pay such  expenses;
but only in the event that Senior Officer shall have delivered in writing to the
Company an  undertaking  to reimburse  the Company for expenses  with respect to
which Senior Officer is not entitled to indemnification.  The provisions of this
Paragraph shall remain in effect after this Agreement is terminated irrespective
of the reasons for termination. The indemnification provisions of this Paragraph
shall not  supersede or reduce any  indemnification  provided to Senior  Officer
under any separate agreement, or the by-laws of the Company since it is intended
that this  Agreement  shall  expand and extend  the Senior  Officer's  rights to
receive indemnity.

                                      -6-
<PAGE>

     (b) Legal Fees.  If any contest or dispute  shall arise between the Company
and Senior Officer  regarding or as a result of any provision of this Agreement,
the Company  shall  reimburse  Senior  Officer  for all legal fees and  expenses
reasonably  incurred  by Senior  Officer  in  connection  with such  contest  or
dispute,  but only if Senior  Officer is successful in respect of  substantially
all of Senior  Officer's  claims  pursued or  defended in  connection  with such
contest or dispute. Such reimbursement shall be made as soon as practicable, and
not more than 60 days,  following  the  resolution  of such  contest  or dispute
(whether or not appealed).

     6.   Successors and Assigns, Term.

     (a) The Company shall require any successor (whether direct or indirect, by
purchase, merger, consolidation or otherwise) to all or substantially all of the
business  and/or  assets of the  Company,  by  agreement  in form and  substance
satisfactory  to Senior Officer,  to expressly  assume and agree to perform this
Agreement  in the same manner and to the same  extent that the Company  would be
required to perform it if no such  succession  had taken  place.  Failure of the
Company  to obtain any such  agreement  prior to the  effectiveness  of any such
succession  shall be a breach of this Agreement and shall entitle Senior Officer
to compensation  from the Company in the same amount and on the same terms as he
would be entitled to hereunder if Senior  Officer  terminated his employment for
Good Reason  hereunder  in  accordance  with the terms as set forth in Paragraph
1.(a)(iv),  except that for purposes of implementing the foregoing,  the date on
which  any  such  succession  becomes  effective  shall  be  deemed  the date of
termination.  In the event of such a breach  of this  Agreement,  the  Notice of
Termination shall specify such date as the date of termination.  As used in this
Agreement,  "Company"  shall mean the  Company as  hereinbefore  defined and any
successor  to all or  substantially  all of its  business  and/or  its assets as
aforesaid  which  executes  and  delivers  the  Agreement  provided  for in this
Paragraph 6 or which otherwise  becomes bound by all the terms and provisions of
this  Agreement by operation of law. Any cash  payments  owed to Senior  Officer
pursuant  to this  Paragraph  6 shall be paid to Senior  Officer in a single sum
without discount for early payment  immediately prior to the consummation of the
transaction  with  such  successor.  Nothing  in this  Paragraph  6(a)  shall be
construed  to  interfere  with the  Company's  right to implement or pursue such
succession.

     (b)  Notwithstanding  anything  to  the  contrary  contained  herein,  this
Agreement, including the obligations described in Section 4.(c), shall terminate
and be of no  further  force and  effect 18 months  from the date of a Change of
Control.

     7.   Timing of and No Duplication of Payments.

     All payments  payable to Senior Officer pursuant to this Agreement shall be
paid as soon as  practicable  after such  amounts  have become  fully vested and
determinable.  In  addition,  Senior  Officer  shall not be  entitled to receive
duplicate payments under any of the provisions of this Agreement.

     8.   Modification or Waiver.

     No amendment,  modification,  waiver,  termination or  cancellation of this
Agreement  shall be binding or effective for any purpose  unless it is made in a
writing  signed  by the  party  against  whom  enforcement  of  such  amendment,
modification,  waiver,  termination  or  cancellation  is  sought.  No course of
dealing between or among the parties to this Agreement shall be deemed to affect
or to modify,  amend or discharge  any provision or term of this  Agreement.  No
delay on the part of the  Company or Senior  Officer in the  exercise  of any of
their  respective  rights or remedies shall operate as a waiver thereof,  and no
single or partial exercise by the Company or Senior Officer of any such right or
remedy shall preclude other or further  exercise  thereof.  A waiver of right to
remedy on any one  occasion  shall not be construed as a bar to or waiver of any
such right or remedy on any other occasion.

                                      -7-
<PAGE>

     The  respective  rights and  obligations  of the  parties  hereunder  shall
survive the Senior  Officer's  termination of employment and termination of this
Agreement to the extent  necessary for the intended  preservation of such rights
and obligations.

     9.   Notices.

     All notices or other  communications  required or permitted hereunder shall
be made in writing and shall be deemed to have been duly given if  delivered  by
hand or delivered by a recognized  delivery service or mailed,  postage prepaid,
by  express,  certified  or  registered  mail,  return  receipt  requested,  and
addressed to the Company at the address set forth above or Senior Officer at his
address as set forth in the Company  records (or to such other  address as shall
have been previously provided in accordance with this Paragraph 10).

     10.  Governing Law.

     This  Agreement  will be governed by and construed in  accordance  with the
laws of the State of New York.

     11.  Severability.

     Whenever  possible,  each  provision  and term of this  Agreement  shall be
interpreted  in such manner as to be effective and valid under  applicable  law,
but if any provision or term of this Agreement shall be held to be prohibited by
or invalid under such  applicable  law,  then,  such  provision or term shall be
ineffective  only to the  extent  of such  prohibition  or  invalidity,  without
invalidating  or  affecting  in any  manner  whatsoever  the  remainder  of such
provisions or term or the remaining provisions or terms of this Agreement.

     12.  Legal Representation.

     Each of the Company and Senior  Officer has had an  opportunity  to discuss
this Agreement with counsel.

     13.  Counterparts.

     This Agreement may be executed in separate  counterparts,  each of which is
deemed to be an original and both of which taken together  shall  constitute one
and the same Agreement.

     14.  Headings.

     The  headings  of  the  Paragraphs  of  this  Agreement  are  inserted  for
convenience  only and shall not be deemed to  constitute a part hereof and shall
not affect the construction or interpretation of this Agreement.

                                      -8-
<PAGE>

     15.  Entire Agreement.

     This Agreement constitutes the entire agreement of the parties with respect
to the subject  matter  hereof and  supersedes  all other prior  agreements  and
undertakings,  both  written  and oral,  among the parties  with  respect to the
subject matter hereof.

     16.  Survival of Agreements.

     The  covenants  made in  Paragraphs  1 through  5 each  shall  survive  the
termination of this Agreement.

     17.  Binding Effect.

     This Agreement shall be binding on the Company, its successors and assigns,
including any surviving entity  resulting from a merger,  consolidation or other
corporate reorganization.

     18.  Senior Officer's Covenants.

     Senior  Officer  covenants  and agrees  that in the event he  receives  any
compensation  (other than  compensation  upon  termination  of employment by the
Company  for  Cause or  voluntarily  by the  Senior  Officer)  pursuant  to this
Agreement,  he shall not solicit for employment any personnel above the position
of  Administrative  Assistant  employed  by  the  Company  at  the  time  of his
termination  for a period of two years from his Date of  Termination  as long as
such personnel is still employed by the Company. Nothing contained herein to the
contrary,  however,  shall prevent Senior Officer from providing a reference for
any such personnel.

     19.  Confidentiality.

     Senior Officer and the Company agree to keep this Agreement confidential to
the extent  permitted by law.  Senior  Officer agrees to keep  confidential  all
information  in his  possession  regarding the Company,  its  properties and its
plans, which is not generally known to the public.

     20.  Excess Parachute Payments.

     Any provision of this Agreement to the contrary notwithstanding,  if any of
the payments or benefits provided for in this Agreement, together with any other
payments  which  Employee  has a right to receive from the Company or any of its
affiliates,  constitute a "parachute payment",  as defined in Section 280G(b)(2)
of the Internal Revenue Code of 1986, as amended (the "Code"), payments pursuant
to this Agreement  shall be reduced,  if necessary to the largest amount as will
result in no portion of such payments being subject to the excise tax imposed by
Section 4999 of the Code, all as determined by the Company's  regularly  engaged
independent public accountants.

                                      -9-
<PAGE>

     21.  Compliance with Section 409A.

     (a) Generally.  Except to the extent specifically  provided in any separate
written agreement between the Senior Officer and the Company, the Senior Officer
shall -- with  respect to any and all amounts and  benefits  payable  under this
Agreement -- be solely  responsible for the satisfaction of any taxes (including
applicable  withholding  and  employment  taxes,  and taxes  arising  under Code
Sections  409A  regarding  deferred   compensation  and  4999  regarding  golden
parachute excise taxes).  Although the Company intends and expects that the Plan
and its awards and benefits  will not give rise to the taxes  imposed under Code
Section 409A,  neither the Company nor its employees,  directors or their agents
shall have any obligation to pay, to mitigate, or to otherwise indemnify or hold
the Senior Officer harmless from any or all of such taxes.

     (b) Section  409A's  Six-month  Delay  Rule.  If, at the time of the Senior
Officer's  "separation  from service" (within the meaning of Code Section 409A),
the Senior Officer is a "specified employee" (within the meaning of Code Section
409A), the Company will not pay or provide any "Specified  Benefits" (as defined
herein)  until after the end of the sixth  calendar  month  beginning  after the
Senior  Officer's  separation from service (the "409A Suspension  Period").  For
purposes of this  Agreement,  "Specified  Benefits"  are any amounts or benefits
that would be subject to Section  409A  penalties  if the Company were to pay or
otherwise  settle  such  amounts or  benefits,  pursuant to this  Agreement,  on
account of the Senior Officer's separation from service. Within 14 calendar days
after the end of the 409A Suspension  Period, the Senior Officer shall be paid a
lump sum payment in cash equal to any Specified  Benefits delayed because of the
preceding  sentence,  without  interest.  Thereafter,  the Senior  Officer shall
receive any  remaining  payments  or other  benefits as if there had not been an
earlier delay.

     (c)  Interpretation  and Amendments.  All payments and benefits provided to
Senior  Officer  through this  Agreement  are intended to be exempt from Section
409A of the Code,  and the Company shall have  complete  discretion to interpret
and construe  this  Agreement  and any  associated  documents in any manner that
establishes an exemption from (or otherwise  conforms them to) the  requirements
of Section 409A.

     If, for any reason  including  imprecision in drafting,  any Plan provision
does not accurately reflect its intended  establishment of an exemption from (or
compliance   with)  Code  Section   409A),   as   demonstrated   by   consistent
interpretations  or other  evidence  of intent  (by the  Company in its sole and
absolute  discretion),  the provision shall be considered ambiguous and shall be
interpreted by the Company in a fashion  consistent  herewith,  as determined in
the sole and absolute discretion of the Company.  The Company reserves the right
(including  the  right to  delegate  such  right)  to  unilaterally  amend  this
Agreement  without  the  consent  of the Senior  Officer in order to  accurately
reflect  its correct  interpretation  and  operation,  as well as to maintain an
exclusion from the application of, or compliance with, Code Section 409A.

                                      -10-
<PAGE>

     22.  Prior Understandings.

     This Agreement embodies the entire contract between the parties hereto with
respect to employment and severance and supersedes any and all prior  agreements
and  understandings,  written or oral,  formal or  informal  by and  between the
Company and the Senior Officer.

     IN WITNESS WHEREOF,  the undersigned have executed this Agreement as of the
date first above written.

                                    ACADIA REALTY TRUST

                                    By:___________________________

                                    ACADIA REALTY LIMITED PARTNERSHIP

                                    By: Acadia Realty Trust, its General Partner

                                    By:___________________________

                                    ------------------------------
                                    Name:
                                    Title:

                                      -11-

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