Amendment to Pre-Acquisition Agreement
Amendment
to Pre-Acquisition Agreement
This
Amendment to Pre-Acquisition Agreement
(the
“Amendment”)
is
made effective as of May 20,
2005,
among Enterra Energy Trust, an open-ended unincorporated trust governed by
the
laws of the Province of Alberta and having an office in the City of Calgary,
Alberta (hereinafter called “Enterra”);
Rocky
Mountain Gas, Inc., a body corporate incorporated under the laws of the State
of
Wyoming and having an office in the City of Riverton, Wyoming (hereinafter
called “RMG”);
U.S.
Energy Corp., a body corporate incorporated under the laws of the State of
Wyoming and having an office in the City of Riverton, Wyoming (hereinafter
called “USE”); and Crested Corp., a body corporate incorporated under the laws
of the State of Wyoming and having an office in the City of Riverton, Wyoming
(hereinafter called “Crested”).
Together, Enterra, RMG, USE and Crested are sometimes referred to herein
as the
“parties.”
Terms
not
defined in this Amendment have the meanings defined in the Pre-Acquisition
Agreement (the “Agreement”).
Whereas:
A. The
parties have signed the “Agreement” dated February 22, 2005
- and
-
B. The
parties by this Amendment wish to change certain provisions of the
Agreement
Now
Therefore in Consideration of
the
mutual covenants hereinafter set out, and of the mutual covenants set out
in the
Agreement, the parties hereby agree that the following sections of the Agreement
(all of which is incorporated herein by reference) are amended as
follows:
| 1.1.2 |
$6,000,002
of the consideration shall be paid by the Deposit ($500,000) and
289,474
Trust Units ($5,500,002 at $19.00 per Trust Unit). The number of
Initial
Units to be issued on consummation of the Share Exchange Plan shall
be
reduced for the difference between $266,000 and the amount USE pays
to
purchase the overriding royalty interests (hereafter referred to
as the
“Initial
Units”).
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| 1.1.8 |
Clause
(i) is clarified to state that “the completion of the Share Exchange Plan
(to be the day on which articles of share exchange are filed with
the
Wyoming Secretary of State, which articles shall be transmitted to
the
Secretary of State on the day of the Meeting, for filing on the calendar
day following the Meeting).” The date in clause (iii) is changed to be
June 1, 2005. The second sentence is changed to read “Subject to the
satisfaction or waiver of the conditions set forth in Schedule “A” hereto,
Enterra will take up and pay for all RMG Shares on June 1, 2005.”
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| 1.1.5 |
Initial
Units is substituted for “cash.” The number of Initial Units which
otherwise would be issued to USE based on its percentage ownership
of RMG
Shares shall be reduced by 26,316 (equal to $500,000 divided by $19.00).
USE may pay off some of the Geddes Loan by transfer to Geddes and
Company
of a portion of the Initial Units which USE shall receive for its
RMG
Shares, subject to receipt by Enterra of applicable representations
and
warranties by Geddes.
|
| 1.1.10 |
An
extension of the Offer past June 1, 2005 will be deemed a change
adverse
to the Shareholders.
|
| 1.7 |
Changed
to read “Prior to June 1, 2005, USE shall have obtained the agreement of
Geddes and Company (and Enterra shall have approved of the form of
such
agreement) that the collateral security for the Geddes Loan consisting
of
4,333,333 RMG Shares held by USE and security in RMG’s interests in the
Castle Rock area mineral leases shall be placed into an independent
escrow, and such RMG Shares and security interests in the Castle
Rock area
mineral leases (and releases for the other collateral securing the
Geddes
Loan) shall be released (and the certificate for the 4,333,333 RMG
Shares
and releases on the leases delivered to Enterra), and the Geddes
Conversion Option shall have been terminated, and the warrants to
purchase
RMG common stock held by Geddes shall have been exercised (and all
of the
warrant shares shall be immediately cancelled and terminated on the
date
of completion of the Share Exchange Plan.
|
Schedule
“B” The
second sentence of paragraph (3) is changed to read “Prior to June 1, 2005, USE
shall have obtained the agreement of Geddes and Company (and Enterra shall
have
approved of the form of such agreement) that the collateral security for
the
Geddes Loan consisting of 4,333,333 RMG Shares held by USE and security in
RMG’s
interests in the Castle Rock area mineral leases shall be placed into an
independent escrow, and such RMG Shares and security interests in the Castle
Rock area mineral leases (and releases for the other collateral securing
the
Geddes Loan) shall be released (and the certificate for the 4,333,333 RMG
Shares
and releases on the leases delivered to Enterra), and the Geddes Conversion
Option shall have been terminated, and the warrants to purchase RMG common
stock
held by Geddes shall have been exercised (and all of the warrant shares shall
be
immediately cancelled and terminated) on the date of completion of the Share
Exchange Plan ”
|
|
Paragraphs
(16)(a), 16(e) and 16(f) as to tax matters has been modified, clarified
and amended pursuant to the May 5, 2005 letter to Enterra regarding
such
matters.
|
Schedule
“C” Paragraphs
(3) and (6) are deleted. A new paragraph (7) is added: “7.
No TSX Hold Period on Initial Units; U.S. Restriction on Re-sales; Covenant
to
Instruct Transfer Agent to Remove U.S. Restrictive Legend on Compliance with
Rule 904.
The
Initial Units shall be immediately tradable on the Toronto Stock Exchange.
The
Initial Units shall be issued as ‘restricted securities’ under SEC Rule 144, and
therefore will not be tradable on Nasdaq or otherwise disposed of in the
United
States except in compliance with U.S. federal and state securities laws.
Enterra
covenants that it shall issue instructions to the transfer agent for the
Trust
Units to the effect that the U.S. restrictive legend (to be imprinted on
the
certificates for the Trust Units) will be removed upon presentation to the
transfer agent of the seller’s compliance with SEC rule 904.” Enterra covenants
that if it files a registration statement with the SEC for re-sale of Trust
Units at any time before the second anniversary of consummation of the Share
Exchange Plan, and Enterra determines in good faith that it is commercially
reasonable for Enterra to include therein (on a piggy-back basis) such of
the
Initial Units as then are held by the (then-former) RMG Shareholders, Enterra
shall include such Initial
2
Units
in
the registration statement and name the (then-former) RMG Shareholders as
sellers, all at Enterra’s sole expense (other than taxes and brokerage fees
which shall be borne by the securityholder). Notwithstanding the foregoing,
if
any holder of Initial Units can sell all of such units pursuant to Rule 144
in
any three-month period, Enterra need not include such securityholder in the
registration statement.
Except
as
changed by this Amendment, the Agreement remains in full force and
effect.
In
Witness Whereof
the
parties hereto have caused this Amendment to be executed on their behalf
by
their officers thereunto duly authorized on May 20,
2005
and effective as of that date.
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ENTERRA
ENERGY TRUST
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by
its Administrator
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ENTERRA
ENERGY CORP.
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Per:
/s/ Reg ▇. ▇▇▇▇▇▇▇▇▇▇
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Reg
▇. ▇▇▇▇▇▇▇▇▇▇, President and CEO
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ROCKY
MOUNTAIN GAS, INC.
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ATTEST:
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By:
/s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
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By:
/s/ ▇▇▇▇ ▇. ▇▇▇▇▇▇
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▇▇▇▇▇▇
▇. ▇▇▇▇▇▇, Secretary
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▇▇▇▇
▇. ▇▇▇▇▇▇, President
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U.S.
ENERGY CORP.
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ATTEST:
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By:
/s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
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By:
/s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇
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▇▇▇▇▇▇
▇. ▇▇▇▇▇▇, Secretary
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▇▇▇▇▇
▇. ▇▇▇▇▇▇, President
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ATTEST:
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By:
/s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
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By:
/s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
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▇▇▇▇▇▇
▇. ▇▇▇▇▇▇, Secretary
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▇▇▇▇▇▇
▇. ▇▇▇▇▇▇, President
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