Document:

exv10w21

 

Exhibit
10.21

RUBICON MASTER FUND

c/o Rubicon Fund Management, LLP

103 Mount Street

London W1K2TJ England

                                        , 2006

Aurora Oil & Gas Corporation

4110 Copper Ridge Drive

Suite 100

Traverse City, Michigan 49684

	 	 	 
	Re:

	 	Underwriting Agreement

               Reference is hereby made to (i) that certain Underwriting Agreement, dated as of
                                        , 2006 (the “Underwriting Agreement”), among Aurora Oil & Gas Corporation, a Utah
corporation (the “Company”), Rubicon Master Fund, a company organized under the laws of the Cayman
Islands (the “Selling Stockholder”), Johnson Rice & Company L.L.C., KeyBanc Capital Markets, a
Division of McDonald Investments and Morgan Keegan & Company, Inc., as representatives for the
several Underwriters (as defined in the Underwriting Agreement) (the “Representatives”), (ii) that
certain Securities Purchase Agreement, dated as of January 31, 2005, among Aurora Energy, Ltd, a
Nevada company (“Old Aurora”) and the Selling Stockholder (the “Aurora Securities Purchase
Agreement”) and (iii) that certain Securities Purchase Agreement, dated as of January 31, 2005,
among Cadence Resources Corporation, a Utah corporation (“Old Cadence”) and the Selling Stockholder
(the “Cadence Securities Purchase Agreement”). After the closing of the transactions contemplated
by the Aurora Securities Purchase Agreement and the Cadence Securities Purchase Agreement, Old
Aurora and Old Cadence merged, with the Company as their legal successor for all purposes
thereunder.

               Pursuant to the Underwriting Agreement, the Selling Stockholder proposes to sell to the
Underwriters certain shares of common stock (the “Secondary Shares”), par value $.01 per share (the
“Shares”), of the Company, which the Selling Stockholder acquired from Old Aurora pursuant to the
Aurora Securities Purchase Agreement and Old Cadence pursuant to the Cadence Securities Purchase
Agreement and which are proposed to be sold in a public offering under the Registration Statement
(as defined in the Underwriting Agreement) and the related Prospectus (as defined in the
Underwriting Agreement). The Company and the Selling Stockholder hereby agree that the
indemnification obligations of the Company (as successor to Old Aurora) pursuant to Section 6.4(a)
of the Aurora Securities Purchase Agreement and the indemnification obligations of the Company (as
successor to Old Cadence) pursuant to Section 6.4(a) of the Cadence Securities Purchase Agreement
shall apply to the sale of the Secondary Shares under the Registration Statement (as defined in the
Underwriting Agreement) and the Prospectus, and such provisions shall be deemed incorporated
herein, in their entirety, mutatis mutandis.

 

 

               Notwithstanding the foregoing, to the extent that the Company does not have sufficient cash
assets to promptly pay both (X) any indemnification obligations (the “Underwriter Indemnified
Liabilities”) of the Company to the Underwriters (including, without limitation, its officers and
employees, and each person, if any, who controls any Underwriter within the meaning of the
Securities Act (as defined in the Underwriting Agreement) and the Exchange Act (as defined in the
Underwriting Agreement), in each case, entitled to indemnification pursuant to the Underwriting
Agreement, the “Underwriter Indemnified Parties”) pursuant to the Underwriting Agreement and (Y)
the foregoing indemnification obligations (the “Selling Stockholder Indemnified Liabilities”) to
the Selling Stockholder (including, the officers, directors, partners, members, agents, brokers
(other than the Underwriters), investment advisors and employees of each of them, each Person (as
defined in the Aurora Securities Purchase Agreement) who controls the Selling Stockholder (within
the meaning of Section 15 of the Securities Act or Section 20 of the Exchange Act) and the
officers, directors, partners, members, agents and employees of each such controlling Person, in
each case entitled to indemnification in accordance with the Aurora Securities Purchase Agreement
and the Cadence Securities Purchase Agreement (the “Selling Stockholder Indemnified Parties”, and
together with the Underwriter Indemnified Parties, the “Indemnified Parties”), then the Selling
Stockholder and the Company hereby agree that any payment of such indemnification obligations shall
be made to the Indemnified Parties as follows: (a) with respect to the Selling Stockholder
Indemnified Parties, in the aggregate, in such amounts equal to the lesser of (I) the aggregate
outstanding Selling Stockholder Indemnified Liabilities at such time and (II) the product of (i)
the aggregate amount available to be paid by the Company to all Indemnified Parties at such time
and (ii) the quotient of (x) the number of Secondary Shares and (y) the number of Offered Shares
(as defined in the Underwriting Agreement) and (b) with respect to the Underwriter Indemnified
Parties, in the aggregate, in such amounts equal to the lesser of (I) the aggregate outstanding
Underwriter Indemnified Liabilities at such time and (II) the product of (i) the aggregate amount
available to be paid by the Company to all Indemnified Parties at such time and (ii) the quotient
of (x) the difference of (I) the number of Offered Shares and (II) the number of Secondary Shares
and (y) the number of Offered Shares; provided, however, that after either all outstanding Selling
Stockholder Indemnified Liabilities or Underwriter Indemnified Liabilities have been paid in full,
all additional payments by the Company with respect to Selling Stockholder Indemnified Liabilities
or Underwriter Indemnified Liabilities, as applicable, that remain outstanding thereafter shall be
paid to such other Indemnified Parties without regard to this paragraph until the earlier to occur
of (A) the date such other Indemnified Parties have been paid in full or (B) such date as such
Indemnified Parties that were previously paid in full are entitled to additional indemnification
from the Company in accordance with this Agreement, the Underwriting Agreement, the Cadence
Securities Purchase Agreement and/or the Aurora Securities Purchase Agreement, as applicable.
Except as expressly provided herein, neither the execution, delivery and effectiveness of this
letter agreement, nor the interpretation or effectiveness of any term or condition contained
herein, including, without limitation, the preceding sentence, shall operate as an amendment or
waiver or reduction of any right, power or remedy of the Underwriter Indemnified Parties or the
Stockholder Indemnified Parties against or with respect to the Company under the Underwriting
Agreement, the Cadence Securities Purchase Agreement, the Aurora Securities Purchase Agreement or
any document or certificate related thereto, nor shall constitute a waiver, amendment or reduction
of any provision of any such documents or certificates or any indemnification obligations of the Company to any
Indemnified Party.

 

 

               Each of the parties represents and warrants that it is duly authorized to enter into this
agreement. This letter agreement shall be binding on your successors and permitted assigns. This
letter agreement is personal to the parties and may not be assigned or transferred by either party
without the prior written consent of the other party.

               This letter agreement shall be governed by and construed in accordance with the internal laws
of the State of New York, without giving effect to the principles of conflict of laws thereof.

               Each of the parties hereto hereby irrevocably and unconditionally submits, for itself, to the
exclusive jurisdiction of any New York State court or Federal court of the United States of America
sitting in the State of New York and the county of New York, and any appellate court from any
thereof, in any action or proceeding arising out of or relating to this letter agreement or for
recognition or enforcement of any judgment, and each of the parties hereto hereby irrevocably and
unconditionally agrees to institute any and all claims in respect of this letter agreement or any
related agreement to a New York State court or, to the extent permitted by law, in such Federal
court.

               Each of the parties hereto agrees that a final judgment in any such action or proceeding shall
be conclusive and may be enforced in other jurisdictions by suit on the judgment or in any other
manner provided by law. Each of the parties hereto irrevocably and unconditionally waives, to the
fullest extent it may legally and effectively do so, any objection that it may now or hereafter
have to the laying of venue of any suit, action or proceeding arising out of or relating to this
letter agreement or any related agreement in any New York State or Federal court. Each of the
parties hereto irrevocably waives, to the fullest extent permitted by law, the defense of an
inconvenient forum to the maintenance of such action or proceeding in any such court.

               If any provision of this letter agreement is held to be invalid or unenforceable in any
respect, the validity and enforceability of the remaining terms and provisions of this Agreement
shall not in any way be affected or impaired thereby and the parties will attempt to agree upon a
valid and enforceable provision that is a reasonable substitute therefor, and upon so agreeing,
shall incorporate such substitute provision in this letter agreement.

 

 

               To the extent that the Company makes a payment or payments to the Selling Stockholder
hereunder or the Selling Stockholder enforces or exercises its rights hereunder or thereunder, and
such payment or payments or the proceeds of such enforcement or exercise or any part thereof are
subsequently invalidated, declared to be fraudulent or preferential, set aside, recovered from,
disgorged by or are required to be refunded, repaid or otherwise restored to the Company by a
trustee, receiver or any other person under any law (including, without limitation, any bankruptcy
law, state or federal law, common law or equitable cause of action), then to the extent of any such
restoration the obligation or part thereof originally intended to be satisfied shall be revived and
continued in full force and effect as if such payment had not been made or such enforcement or
setoff had not occurred.

               The parties acknowledge and agree that each of the Representatives is an express and intended
third party beneficiary of this Agreement, with the right to enforce the terms hereof.

               This letter agreement may be executed in two or more counterparts, all of which when taken
together shall be considered one and the same agreement and shall become effective when
counterparts have been signed by each party and delivered to the other party, it being understood
that both parties need not sign the same counterpart.

               In the event that any signature is delivered by facsimile transmission, such signature shall
create a valid and binding obligation of the party executing (or on whose behalf such signature is
executed) with the same force and effect as if such facsimile signature page were an original
thereof.

[The Remainder of this Page Intentionally Left Blank]

 

 

Very truly yours,

	 	 	 	 	 
	 	RUBICON MASTER FUND

 	 
	 	By:  	 	 
	 	 	Name:  	David DeRosa 	 
	 	 	Title:  	Director 	 
	 

 

 

Agreed to and Accepted by:

AURORA OIL & GAS CORPORATION

	 	 	 	 	 
	By:

	 	 
	 	 
	 

	 	 	 	 
	 

	 	Name: William W. Deneau	 	 
	 

	 	Title: Presidentexv10w22

 

Exhibit 10.22

COMMERCIAL GUARANTY

	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	Principal

	 	Loan Date
	 	Maturity
	 	Loan No
	 	Call / Coll
	 	Account
	 	Officer
	 	Initials
	 

	 	 	 	 	 	 	 	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, MI 49685
	 
	 	 	 	 	 	 
	Guarantor:

	 	Patricia A. Deneau Trust dated 10/12/95	 	 	 	 
	 

	 	4492 Stoneridge Ct.	 	 	 	 
	 

	 	Traverse City, MI 49684	 	 	 	 

CONTINUING
GUARANTEE OF PAYMENT AND PERFORMANCE. For good and valuable consideration. Guarantor
absolutely and unconditionally guarantees full and punctual payment and satisfaction of the
Indebtedness of Borrower to Lender, and the performance and discharge of all Borrower’s
obligations under the Note and the Related Documents. This is a guaranty of payment and
performance and not of collection, so Lender can enforce this Guaranty against Guarantor even
when Lender has not exhausted Lender’s remedies against anyone else obligated to pay the
Indebtedness or against any collateral securing the Indebtedness, this Guaranty or any other
guaranty of the Indebtedness. Guarantor will make any payments to Lender or its order, on
demand, in legal tender of the United States of America, in same-day funds, without set-off or
deduction or counterclaim, and will otherwise perform Borrower’s obligations under the Note and
Related Documents. Under this Guaranty, Guarantor’s liability is unlimited and Guarantor’s
obligations are continuing.

INDEBTEDNESS. The word “Indebtedness” as used in this Guaranty means all of the principal amount
outstanding from time to time and at any one or more times, accrued unpaid interest thereon and
all collection costs and legal expenses related thereto permitted by law, reasonable attorneys’
fees, arising from any and all debts, liabilities and obligations of every nature or form, now
existing or hereafter arising or acquired, that Borrower individually or collectively or
interchangeably with others, owes or will owe Lender, “Indebtedness” includes, without
limitation, loans, advances, debts, overdraft indebtedness, credit card indebtedness, lease
obligations, other obligations, and liabilities of Borrower, and any present or future judgments
against Borrower, future advances, loans or transactions that renew, extend, modify, refinance,
consolidate or substitute these debts, liabilities and obligations whether: voluntarily or
involuntarily incurred; due or to become due by their terms or acceleration; absolute or
contingent; Liquidated or unliquidated; determined or undetermined; direct or indirect; primary
or secondary in nature or arising from a guaranty or surety; secured or unsecured; joint or
several or joint and several; evidenced by a negotiable or non-negotiable instrument or writing;
originated by Lender or another or others; barred or unenforceable against Borrower for any
reason whatsoever; for any transactions that may be voidable for any reason (such as infancy,
insanity, ultra vires or otherwise); and originated then reduced or extinguished and then
afterwards increased or reinstated.

If Lender presently holds one or more guaranties, or hereafter receives additional guaranties
from Guarantor, Lender’s rights under all guaranties shall be cumulative. This Guaranty shall
not (unless specifically provided below to the contrary) affect or invalidate any such other
guaranties. Guarantor’s liability will be Guarantor’s aggregate liability under the terms of
this Guaranty and any such other unterminated guaranties.

CONTINUING GUARANTY. THIS IS A “CONTINUING GUARANTY” UNDER WHICH GUARANTOR AGREES TO GUARANTEE
THE FULL AND PUNCTUAL PAYMENT, PERFORMANCE AND SATISFACTION OF THE INDEBTEDNESS OF BORROWER TO
LENDER, NOW EXISTING OR HEREAFTER ARISING OR ACQUIRED, ON AN OPEN AND CONTINUING BASIS.
ACCORDINGLY, ANY PAYMENTS MADE ON THE INDEBTEDNESS WILL NOT DISCHARGE OR DIMINISH GUARANTOR’S
OBLIGATIONS AND LIABILITY UNDER THIS GUARANTY FOR ANY REMAINING AND SUCCEEDING INDEBTEDNESS EVEN
WHEN ALL OR PART OF THE OUTSTANDING INDEBTEDNESS MAY BE A ZERO BALANCE FROM TIME TO TIME.

DURATION OF GUARANTY. This Guaranty will take effect when received by Lender without the
necessity of any acceptance by Lender, or any notice to Guarantor or to Borrower, and will
continue in full force until all the Indebtedness incurred or contracted before receipt by
Lender of any notice of revocation shall have been fully and finally paid and satisfied and all
of Guarantor’s other obligations under this Guaranty shall have
been performed in full. If
Guarantor elects to revoke this Guaranty, Guarantor may only do so in writing. Guarantor’s
written notice of revocation must be mailed to Lender, by certified mail, at Lender’s address
listed above or such other place as Lender may designate in writing. Written revocation of this
Guaranty will apply only to advances or new Indebtedness created
after actual receipt by Lender
of Guarantor’s written revocation. For this purpose and without limitation, the term “new
Indebtedness” does not include the Indebtedness which at the time of notice of revocation is
contingent, unliquidated, undetermined or not due and which later becomes absolute, liquidated,
determined or due. This Guaranty will continue to bind Guarantor for all the Indebtedness
incurred by Borrower or committed by Lender prior to receipt of Guarantor’s written notice of
revocation, including any extensions, renewals, substitutions or modifications of the
Indebtedness. All renewals, extensions, substitutions, and modifications of the Indebtedness
granted after Guarantor’s revocation, are contemplated under this Guaranty and, specifically
will not be considered to be new Indebtedness. This Guaranty shall bind Guarantor’s estate as to
the Indebtedness created both before and after Guarantor’s death or incapacity, regardless of
Lender’s actual notice of Guarantor’s death. Subject to the foregoing, Guarantor’s executor or
administrator or other legal representative may terminate this Guaranty in the same manner in
which Guarantor might have terminated it and with the same effect. Release of any other
guarantor or termination of any other guaranty of the Indebtedness shall not affect the
liability of Guarantor under this Guaranty. A revocation Lender receives from any one or more
Guarantors shall not affect the liability of any remaining Guarantors
under this Guaranty.
It is
anticipated that fluctuations may occur in the aggregate amount of the Indebtedness covered by
this Guaranty, and Guarantor specifically acknowledges and agrees that reductions in the amount
of the Indebtedness, even to zero dollars ($0.00), prior to Guarantor’s written revocation of
this Guaranty shall not constitute a termination of this Guaranty. This Guaranty is binding upon
Guarantor and Guarantor’s heirs, successors and assigns so long as any of the Indebtedness
remains unpaid and even though the Indebtedness may from time to time
be zero dollars ($0.00).

GUARANTOR’S AUTHORIZATION TO LENDER. Guarantor authorizes Lender, either before or after any
revocation hereof, without notice or demand and without lessening Guarantor’s liability under
this Guaranty, from time to time: (A) prior to revocation as set forth above, to make one or
more additional secured or unsecured loans to Borrower, to lease equipment or other goods to
Borrower, or otherwise to extend additional credit to Borrower; (B) to alter, compromise, renew,
extend, accelerate, or otherwise change one or more times the time for payment or other terms of
the Indebtedness or any part of the Indebtedness, including increases and decreases of the rate
of interest on the Indebtedness; extensions may be repeated and may be for longer than the
original loan term; (C) to take and hold security for the payment of this Guaranty or the
Indebtedness, and exchange, enforce, waive, subordinate, fail or decide not to perfect, and
release any such security, with or without the substitution of new collateral; (D) to release,
substitute, agree not to sue, or deal with any one or more of Borrower’s sureties, endorsers, or
other guarantors on any terms or in any manner Lender may choose; (E) to determine how, when and
what application of payments and credits shall be made on the Indebtedness; (F) to apply such
security and direct the order or manner of sale thereof, including without limitation, any
nonjudicial sale permitted by the terms of the controlling security agreement or deed of trust,
as Lender in its discretion may determine; (G) to sell, transfer, assign or grant participations
in all or any part of the Indebtedness; and (H) to assign or transfer this Guaranty in whole or
in part.

GUARANTOR’S REPRESENTATIONS AND WARRANTIES. Guarantor represents and warrants to Lender that (A)
no representations or agreements of any kind have been made to Guarantor which would limit or
qualify in any way the terms of this Guaranty; (B) this Guaranty is executed at Borrower’s
request and not at the request of Lender; (C) Guarantor has full power, right and authority to
enter into this Guaranty; (D) the provisions of this Guaranty do not conflict with or result in
a default under any agreement or other instrument binding upon Guarantor and do not result in a
violation of any law, regulation, court decree or order applicable to Guarantor; (E) Guarantor
has not and will not, without the prior written consent of Lender, sell, lease, assign,
encumber, hypothecate, transfer, or otherwise dispose of all or substantially all of Guarantor’s
assets, or any interest therein; (F) upon Lender’s request, Guarantor will provide to Lender
financial and credit information in form acceptable to Lender, and all such financial
information which currently has been, and all future financial information which will be
provided to Lender is and will be true and correct in all material respects and fairly present
Guarantor’s financial condition as of the dates the financial information is provided; (G) no
material adverse change has occurred in Guarantor’s financial condition since the date of the
most recent financial statements provided to Lender and no event has occurred which may
materially adversely affect Guarantor’s financial condition; (H) no litigation, claim,
investigation, administrative proceeding or similar action (including
those for unpaid taxes)
against Guarantor is pending or threatened; (I) Lender has made no representation to Guarantor
as to the creditworthiness of Borrower; and (J) Guarantor has established adequate means of
obtaining from Borrower on a continuing basis information regarding Borrower’s financial
condition. Guarantor agrees to keep adequately informed from such means of any facts, events, or
circumstances which might in any way affect Guarantor’s risks under this Guaranty, and Guarantor
further agrees that, absent a request for information, Lender shall have no obligation to
disclose to Guarantor any information or documents acquired by Lender in the course of its
relationship with Borrower.

GUARANTOR’S WAIVERS. Except as prohibited by applicable law, Guarantor waives any right to
require Lender (A) to continue lending money or to extend other credit to Borrower; (B) to make
any presentment, protest, demand, or notice of any kind, including notice of any nonpayment of
the Indebtedness or of any nonpayment related to any collateral, or notice of any action or
nonaction on the part of Borrower, Lender, any surety, endorser, or other guarantor in
connection with the Indebtedness or in connection with the creation of new or additional

 

 

COMMERCIAL GUARANTY

(Continued)

	 	 	 
	Loan No: 067404490

	 	Page 2

loans or obligations; (C) to resort for payment or to proceed directly or at once against any
person, including Borrower or any other guarantor; (D) to proceed directly against or exhaust any
collateral held by Lender from Borrower, any other guarantor, or any other person; (E) to give
notice of the terms, time, and place of any public or private sale of personal property security
held by Lender from Borrower or to comply with any other applicable provisions of the Uniform
Commercial Code; (F) to pursue any other remedy within Lender’s power; or (G) to commit any act or
omission of any kind, or at any time, with respect to any matter whatsoever.

Guarantor also waives any and all rights or defenses based on suretyship or impairment of
collateral including, but not limited to, any rights or defenses arising by reason of (A) any “one
action” or “anti-deficiency” law or any other law which may prevent Lender from bringing any
action, including a claim for deficiency, against Guarantor, before or after Lender’s commencement
or completion of any foreclosure action, either judicially or by exercise of a power of sale; (B)
any election of remedies by Lender which destroys or otherwise adversely affects Guarantor’s
subrogation rights or Guarantor’s rights to proceed against Borrower for reimbursement, including
without limitation, any loss of rights Guarantor may suffer by reason of any law limiting,
qualifying, or discharging the Indebtedness; (C) any disability or other defense of Borrower, of
any other guarantor, or of any other person, or by reason of the cessation of Borrower’s liability
from any cause whatsoever, other than payment in full in legal
tender, of the Indebtedness; (D) any right to claim discharge of the Indebtedness on the basis of unjustified impairment of any
collateral for the Indebtedness; (E) any statute of limitations, if at any time any action or suit
brought by Lender against Guarantor is commenced, there is outstanding Indebtedness which is not
barred by any applicable statute of limitations; or (F) any defenses given to guarantors at law or
in equity other than actual payment and performance of the Indebtedness. If payment is made by
Borrower, whether voluntarily or otherwise, or by any third party, on the Indebtedness and
thereafter Lender is forced to remit the amount of that payment to Borrower’s trustee in
bankruptcy or to any similar person under any federal or state bankruptcy law or law for the
relief of debtors, the Indebtedness shall be considered unpaid for the purpose of the enforcement
of this Guaranty.

Guarantor further waives and agrees not to assert or claim at any time any deductions to the
amount guaranteed under this Guaranty for any claim of setoff, counterclaim, counter demand,
recoupment or similar right, whether such claim, demand or right may be asserted by the Borrower,
the Guarantor, or both.

GUARANTOR’S UNDERSTANDING WITH RESPECT TO WAIVERS. Guarantor warrants and agrees that each of the
waivers set forth above is made with Guarantor’s full knowledge of its significance and
consequences and that, under the circumstances, the waivers are reasonable and not contrary to
public policy or law. If any such waiver is determined to be contrary to any applicable law or
public policy, such waiver shall be effective only to the extent permitted by law or public
policy.

COLLATERAL. This Guaranty is secured by 2,944,800 shares of Cadence Resources Corporation stock.

RIGHT OF SETOFF. To the extent permitted by applicable law, Lender reserves a right of setoff in
all Guarantor’s accounts with Lender (whether checking, savings, or some other account). This
includes all accounts Guarantor holds jointly with someone else and all accounts Guarantor 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. Guarantor
authorizes Lender. to the extent
permitted by applicable law, to hold these funds if there is a default, and Lender may apply the
funds in these accounts to pay what Guarantor owes under the terms of this Guaranty.

SUBORDINATION OF BORROWER’S DEBTS TO GUARANTOR. Guarantor agrees that the Indebtedness, whether
now existing or hereafter created, shall be superior to any claim that Guarantor may now have or
hereafter acquire against Borrower, whether or not Borrower becomes insolvent. Guarantor hereby
expressly subordinates any claim Guarantor may have against Borrower, upon any account whatsoever,
to any claim that Lender may now or hereafter have against Borrower. In the event of insolvency
and consequent liquidation of the assets of Borrower, through bankruptcy, by an assignment for the
benefit of creditors, by voluntary liquidation, or otherwise, the assets of Borrower applicable to
the payment of the claims of both Lender and Guarantor shall be paid to Lender and shall be first
applied by Lender to the Indebtedness. Guarantor does hereby assign to Lender all claims which it
may have or acquire against Borrower or against any assignee or trustee in bankruptcy of Borrower;
provided however, that such assignment shall be effective only for the purpose of assuring to
Lender full payment in legal tender of the Indebtedness. If Lender so requests, any notes or
credit agreements now or hereafter evidencing any debts or obligations of Borrower to Guarantor
shall be marked with a legend that the same are subject to this Guaranty and shall be delivered to
Lender. Guarantor agrees, and Lender is hereby authorized, in the name of Guarantor, from time to
time to file financing statements and continuation statements and to execute documents and to take
such other actions as Lender deems necessary or appropriate to perfect, preserve and enforce its
rights under this Guaranty. 

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

Amendments. This Guaranty, together with any Related Documents, constitutes the entire
understanding and agreement of the parties as
to the matters set forth in this Guaranty. No alteration of or amendment to this Guaranty
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. Guarantor 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
Guaranty. Lender may hire or pay
someone else to help enforce this Guaranty, and Guarantor 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, including 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. Guarantor also shall
pay all court costs and
such additional fees as may be directed by the
court.

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

Governing Law. This Guaranty 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 Guaranty
has been accepted by Lender in the State of
Michigan.

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

Integration. Guarantor further agrees that Guarantor has read and fully understands the terms
of this Guaranty; Guarantor has had the
opportunity to be advised by Guarantor’s attorney with respect to this Guaranty; the Guaranty
fully reflects Guarantor’s intentions and parol
evidence is not required to interpret the terms of this Guaranty. Guarantor hereby indemnifies
and holds Lender harmless from all losses,
claims, damages, and costs (including Lender’s attorneys’ fees) suffered or incurred by Lender
as a result of any breach by Guarantor of the
warranties, representations and agreements of this paragraph.

Interpretation. In all cases where there is more than one Borrower or Guarantor, then all
words used in this Guaranty in the singular shall be deemed to have been used in the
plural where the context and construction so require; and where there is more than one Borrower
named in this Guaranty or when this Guaranty is executed by more than one Guarantor, the words
“Borrower” and “Guarantor” respectively shall
mean all and any one or more of them. The word “Guarantor
”, “Borrower” and “lender” include the heirs, successors assigns, and transferees of
each of them. If a court finds that any provision of this Guaranty is not valid or should not
be enforced, that fact by itself will not mean that the rest of this Guaranty will not be valid
or enforced. Therefore, a court will enforce the rest of the provisions of Guarantor
Even if a provision of this Guaranty may be found to be invalid or unenforceable. If any one or
more of Borrower or Guarantor are corporations, partnership, limited liability companies, or
similar entities, it is not necessary for lender to inquire into the powers of Borrower or
Guarantor or of the officers, directors, partners, managers ,or other agents acting or
purporting to act on their behalf, and any indebtedness made or created in reliance upon the
professed exercise of such powers shall be guaranteed under this Guaranty.

Notices. Any notice required to be given under this Guaranty shall be given in writing, and,
except for revocation notices by Guarantor,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
address shown near the beginning of this Guaranty. All revocation notices by Guarantor shall be
in writing and shall be effective upon delivery to Lender as provided in the section of this
Guaranty entitled “DURATION OF GUARANTY.” Any party may change its address for notices under
this guaranty 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, Guarantor agrees to keep
lender informed at all times  of Guarantor’s current address. Unless otherwise provided or
required by law, if there is more than one Guarantor, any notice given by Lender to any
Guarantor is deemed to be notice given to all Guarantors.

No Waiver by Lender. Lender shall not be deemed to have waived any rights under this
guaranty 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 waiver of such right or any other right. A
waiver by Lender of a provision of this Guaranty shall not prejudice or constitute a waiver of
Lender’s right otherwise to be demand strict compliance with that provision or any other provision
of this Guaranty. No prior waiver by lender, nor any course of dealing between Lender and
Guarantor, shall constitute a waiver of any of Lender’s rights or of any of Guarantor’s obligations
as to any future transaction. Whenever the consent of Lender is required under this Guaranty, the
granting of such consent by Lender in any instance shall not be constitute

 

 

COMMERCIAL GUARANTY

(Continued)

	 	 	 
	Loan No: 067404490

	 	Page 3

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.

Successors
and Assigns. Subject to any limitations stated in this Guaranty on transfer of
Guarantor’s interest, this Guaranty shall be binding upon and inure to the benefit of the
parties, their successors and assigns.

Waive Jury. Lender and Guarantor hereby waive the right to any jury trial in any action,
proceeding, or counterclaim brought by either Lender or Borrower against the other.

DEFINITIONS. The following capitalized words and terms shall have the following meanings when
used in this Guaranty. 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 Guaranty shall have the meanings attributed
to such terms in the Uniform Commercial Code:

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.

Guarantor. The word “Guarantor” means everyone signing this Guaranty, including without
limitation Patricia A. Deneau Trust dated 10/12/95, and in each case, any signer’s successors
and assigns.

Guaranty. The word “Guaranty” means this guaranty from Guarantor to Lender.

Indebtedness. The word “Indebtedness” means Borrower’s indebtedness to Lender as more
particularly described in this Guaranty.

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

Note. The word “Note” means and includes without limitation all of Borrower’s promissory notes
and/or credit agreements evidencing Borrower’s loan obligations in favor of Lender, together
with all renewals of, extensions of, modifications of, refinancings of, consolidations of and
substitutions for promissory notes or credit agreements.

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.

EACH UNDERSIGNED GUARANTOR ACKNOWLEDGES HAVING READ ALL THE PROVISIONS OF THIS GUARANTY AND
AGREES TO ITS TERMS. IN ADDITION, EACH GUARANTOR UNDERSTANDS THAT THIS GUARANTY IS EFFECTIVE UPON
GUARANTOR’S EXECUTION AND DELIVERY OF THIS GUARANTY TO LENDER AND THAT THE GUARANTY WILL CONTINUE
UNTIL TERMINATED IN THE MANNER SET FORTH IN THE SECTION TITLED “DURATION OF GUARANTY”. NO FORMAL
ACCEPTANCE BY LENDER IS NECESSARY TO MAKE THIS GUARANTY EFFECTIVE.
THIS GUARANTY IS DATED DECEMBER 21, 2005.

GUARANTOR:

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	 	 

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-53

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