AMENDMENT TO NET PROFITS CONVEYANCE OF THE WILLIAMS COAL SEAM GAS ROYALTY TRUST
Exhibit 4.6
AMENDMENT TO NET PROFITS
CONVEYANCE
CONVEYANCE
OF THE
▇▇▇▇▇▇▇▇ COAL SEAM GAS ROYALTY
TRUST
TRUST
AMENDMENT TO NET PROFITS CONVEYANCE
This Amendment to Net Profits Conveyance (“Amendment”) is entered into this 27th day of October,
2010, by and between ▇▇▇▇▇▇▇▇ Production Company, LLC (“WPC” or “Trustor”), a Delaware limited
liability company with its principal place of business in Tulsa, Oklahoma, and Bank of America,
N.A., a banking association organized under the laws of the United States of America with its
principal office in Dallas, Texas, as successor Trustee (“Trustee”) of the ▇▇▇▇▇▇▇▇ Coal Seam Gas
Royalty Trust (the “Trust”). This Amendment is made to the Trustee and BNY Mellon Trust of
Delaware, as successor Delaware Trustee (“Delaware Trustee”) on behalf of the Trust.
RECITALS:
WHEREAS, ▇▇▇▇▇▇▇▇ Production Company, a Delaware corporation, has previously conveyed to the
Trustee and the Delaware Trustee for the benefit of the Trust a Net Profits Interest in and to the
Coalbed Methane produced from or attributable to the Underlying Properties and an Infill Net
Profits Interest in and to the Coalbed Methane produced from or attributable to any Infill ▇▇▇▇▇
according to that certain Net Profits Conveyance (the “Net Profits Conveyance”) dated effective as
of the 1st day of October, 1992 by and between ▇▇▇▇▇▇▇▇ Production Company, a Delaware
corporation and The ▇▇▇▇▇▇▇▇ Companies, Inc. to the Trustees of the ▇▇▇▇▇▇▇▇ Coal Seam Gas
Royalty Trust, Exhibits A-1 through A-5 to which are attached hereto as Annex I; as
supplemented by that Supplemental Net Profits Conveyance (the “Supplement”) which Supplement
included amended Exhibit A-3 attached hereto as Annex II, dated effective as of the 19th
day of May, 2010 by and between WPC and the Trustee on behalf of the Trust (the Net Profits
Conveyance as supplemented by the Supplement are collectively referred to herein as the
“Conveyance”).
WHEREAS, ▇▇▇▇▇▇▇▇ Production Company, a Delaware corporation, was converted to a Delaware limited
liability company, effective December 31, 2000.
WHEREAS, Bank of America, N.A. has succeeded to the NationsBank, N.A., as Trustee of the ▇▇▇▇▇▇▇▇
Coal Seam Gas Royalty Trust;
WHEREAS, BNY Mellon Trust of Delaware has succeeded to Chemical Bank Delaware as Delaware Trustee
of the ▇▇▇▇▇▇▇▇ Coal Seam Gas Royalty Trust;
WHEREAS, the Net Profits Conveyance was recorded in San ▇▇▇▇ County, New Mexico at Book 1157, Page
786, in Rio Arriba County, New Mexico at Book 141, Page 172 and in La Plata County, Colorado at
Reception Number 640646; and the First Supplement was recorded in San ▇▇▇▇ County, New Mexico at
Book 1511, Page 397, in Rio Arriba County, New Mexico at Book 533, Page 3063 and in La Plata
County, Colorado at Reception Number 1015227.
WHEREAS, capitalized terms used herein shall have the meanings as defined for such terms in the
Conveyance unless otherwise defined herein;
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WHEREAS, the Trust Agreement dated as of December 1, 1992 (as amended, the “Trust Agreement”)
governing the Trust authorizes the Trustee to agree to modifications of the terms of the Conveyance
or to settle disputes with respect thereto under the conditions set forth in the Trust Agreement;
WHEREAS, the Net Profits Percentage (as defined in the Net Profits Conveyance) beginning in the
fourth quarter of 2000 was reduced to 60% and WPC’s retained percentage of NPI Net Proceeds (as
defined in the Net Profits Conveyance) was correspondingly increased to 40% in each case pursuant
to Article V of the Conveyance;
WHEREAS, WPC and the Trustee desire to execute this Amendment in order to clarify certain
ambiguities in the Conveyance;
NOW, THEREFORE, for good and valid consideration, the receipt and sufficiency of which are hereby
acknowledged, WPC and the Trustee hereby agree to amend the Conveyance as follows:
ARTICLE I
The last sentence of Article V of the Conveyance shall be deleted in full and replaced with
the following:
After the Net Profits Percentage is first reduced pursuant to the terms hereof, said interest
will remain at the reduced level and shall not subsequently be increased or decreased regardless of
any subsequent change in the IRR.
ARTICLE II
The last sentence of Article XIV of the Conveyance shall be deleted in full and replaced with
the following:
The Trustee will not assign or convey the Royalty Interests except as provided under the Trust
Agreement; however any assignee of the Trustee (and any successor assignee) of the Royalty
Interests will have the right to further assign, sell, transfer, convey, mortgage, or pledge the
Royalty Interests without limitation except as provided in the following sentence. For the purpose
of maintaining uniformity of ownership in the Underlying Properties, neither the Trustee, its
assignee nor any successor assignee (collectively, the “Assigning Parties”) shall sell, encumber,
transfer or make other disposition of its interest in the Royalty Interests and the other rights
created by the Conveyance unless such disposition covers either (i) the entire interest of the
Assigning Party in the Royalty Interests, such other rights and all of the Underlying Properties;
or (ii) an equal undivided percent of the Assigning Party’s present interest in the Royalty
Interests, such other rights and all of the Underlying Properties. Any attempted sale, assignment,
encumbrance, transfer or other disposition made in violation of the restrictions contained in the
preceding sentence shall be void ab initio and of no force and effect whatsoever.
If, at any time the Royalty Interests are divided among and owned by four or more co-owners,
WPC, at its discretion, may request such co-owners to appoint a single representative or
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agent with full authority to receive notices and payments, such representative or agent to be
selected by a majority interest of such co-owners. In addition, if the Royalty Interests are
divided among and owned by more than one owner and WPC receives conflicting demands or instructions
form such co-owners as to the ownership interests of the Royalty Interests or other rights created
by the Conveyance (including conflicting claims as to the right to receive any payments made
thereunder), then (a) WPC shall be entitled to interplead any such disputed amounts into a court
having jurisdiction over the matter, (b) WPC shall have no further obligation to such co-owners as
to the interpleaded amounts including no obligation to pay interests on such disputed amounts and
(c) WPC shall be entitled to recover all reasonable attorney fees and court costs incurred by WPC
in connection with such interpleader action from the funds so interpleaded and, to the extent that
such fees and costs are not so recovered, then the disputing co-owners shall promptly reimburse WPC
for the amount of such fees and costs.
If, at any time the Royalty Interests are divided among and owned by two or more co-owners,
any exercise of any audit right hereunder shall be exercised only upon request by a majority
interest of such co-owners and any such exercise and resulting audit shall be for the benefit of
all such co-owners and shall be conducted by a single auditing firm acting on behalf of all such
co-owners. In no event shall such co-ownership give rise to duplicate audit rights by such
co-owners or audit rights under the Conveyance greater than those that existed prior to the
creation of such co-ownership.
ARTICLE III
Except as supplemented and amended hereby, all of the other terms and provisions of the
Conveyance shall remain in full force and effect.
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IN WITNESS WHEREOF, each of the parties hereto has caused this Amendment to be executed in its
name and behalf and delivered on the 27th day of October, 2010.
| ▇▇▇▇▇▇▇▇ Production Company, LLC | Bank Of America, N.A., | |||||
| Trustee of the ▇▇▇▇▇▇▇▇ Coal Seam Gas | ||||||
| Royalty Trust | ||||||
| By: | /s/ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ | By: | /s/ ▇▇▇ ▇. ▇▇▇▇▇▇ | |||
| Name: | ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ | Name: | ▇▇▇ ▇. ▇▇▇▇▇▇ | |||
| Title: | Attorney-in-Fact | Title: | Senior Vice President and Administrator | |||
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