EXHIBIT 10.16
FIRST AMENDMENT TO PURCHASE AND SALE AGREEMENT
This Amendment is entered into this 20th day of November, 1998, by and
between Pennaco Energy, Inc., a Nevada corporation, whose address is 0000 00xx
Xxxxxx, Xxxxx 000, Xxxxxx, Xxxxxxxx 00000 ("SELLER") and CMS Oil and Gas
Company, a Michigan corporation, whose address is 0000 Xxxx Xxxxxx, Xxxxx 0000,
Xxxxxxx, Xxxxx 00000-0000 ("BUYER").
WHEREAS, Seller and Buyer are parties to that certain Purchase and Sale
Agreement ("AGREEMENT"), dated October 23, 1998, concerning the sale of an
undivided 50% of Seller's right, title and interest in certain Assets located in
Xxxxxxxx, Xxxxxxxx and Xxxxxxx Counties, Wyoming, and Big Horn, Rosebud and
Powder River Counties, Montana as more fully described in the Agreement, and
WHEREAS, the Parties desire to amend the Agreement as hereinafter provided.
NOW, THEREFORE, for good and valuable consideration, the receipt and
sufficiency of which is hereby acknowledged, the Parties agree as follows:
1. Paragraph 4.4(a)(i) is amended by changing the deadline for delivery
of Notices of Title Defects from December 1, 1998, to December 15, 1998.
2. The Parties hereby elect under Paragraph 4.4(c)(ii) to give Seller the
option of attempting to cure Title Defects to the satisfaction of buyer after
the Second Closing Date through and including January 31, 1998, provided,
however, that the lesser of (i) the Purchase Price attributable to such Title
Defects or (ii) 10% of the Purchase Price shall be placed in escrow at the
Second Closing pending such cure.
3. The Parties reserve the right by mutual consent to further extend the
option of Seller to cure Title Defects beyond January 31, 1998, pursuant to
Paragraph 4.4(c)(ii).
4. The Parties acknowledge that Exhibit A to the Assignment and
Conveyance delivered by Seller to Buyer at the First Closing differs from
Exhibit A - Part I to the Agreement and hereby confirm that Exhibit A - Part I
is hereby deemed amended to conform to Exhibit A to the Assignment and
Conveyance delivered by Seller to Buyer at the First Closing. Those leases
which were on Exhibit A - Part I to the Agreement which are not on Exhibit A to
the Assignment and Conveyance delivered at the First Closing shall be included
in the Second Closing.
5. Exhibit G to the Agreement is hereby amended to provide that the
opinion of counsel is only as to CMS Oil and Gas Company and not also as to CMS
Gas Transmission and Storage.
6. Exhibit B to the Agreement is hereby amended by the deletion of the
October 1, 1998, CBM Drilling Agreement and the addition of the November __,
1998, Agreement with CBM Drilling LLC for the drilling of coalbed methane xxxxx,
which agreement may be in draft form as of the First Closing Date.
7. The Parties hereby agree that CMS shall have access to all test data
on the xxxxx drilled by Pennaco on the Excluded Lands.
8. The Parties acknowledge that during Buyer's due diligence, it
discovered an Affidavit recorded by Xxxxxxx X. Xxxxxx of Diamond M. Company
alleging that Diamond M Company has not been paid in full by High Plains
Associates for certain mineral leases nor has it been paid its overriding
royalty interest for said leases. The Parties agree that such claims do not
constitute a breach of the representations and warranties of Seller in Paragraph
5.6 of the Agreement.
Except as provided above, this Agreement remains in full force and effect
according to its terms.
Seller:
PENNACO ENERGY, INC.
By: /s/ XXXX X. XXXX
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Xxxx X. Xxxx
President
Buyer:
CMS OIL AND GAS COMPANY
By: /s/ XXXXXX X. XXXX
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Xxxxxx X. Xxxx
Manager, Land and International Contracts
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