EXHIBIT 1
AMENDMENT NO. 1 TO PURCHASE AND SALE AGREEMENT
THIS AMENDMENT NO. 1 TO PURCHASE AND SALE AGREEMENT (this "Amendment
No. 1"), dated as of September 26, 2001, is entered into by and between THE
XXXXXXXX COMPANIES, INC., a Delaware corporation ("Seller"), and QUATRO FINALE
IV LLC, a Delaware limited liability company ("Buyer"), with respect to the
following recitals:
RECITALS:
A. Pursuant to that certain PURCHASE AND SALE AGREEMENT, dated August
11, 2000, by and between Seller and Buyer (the "Existing Purchase Agreement"),
Buyer purchased 3,568,791 units of beneficial interest (the "Subject Trust
Units") in Xxxxxxxx Coal Seam Gas Royalty Trust, a Delaware business trust (the
"Trust"), and Seller retained an option to repurchase all, but not less than
all, of the Subject Trust Units (the "Call Option").
B. Seller and Buyer desire to amend the Existing Purchase Agreement to
allow for exercises of the Call Option for repurchases by Seller of less than
all of the Subject Trust Units and to add further provisions relating to such
exercises and other agreements.
NOW, THEREFORE, in consideration of the foregoing recitals, the
agreements set forth herein and for other good and valuable consideration, the
receipt and sufficiency of which are hereby acknowledged, Seller and Buyer
mutually agree as follows:
ARTICLE I
DEFINITIONS
Unless otherwise defined or the context otherwise requires, terms used
herein (including in the preamble and recitals hereto) have the meanings
provided for in the Existing Purchase Agreement.
ARTICLE II
AMENDMENTS TO EXISTING PURCHASE AGREEMENT
Effective as of September 26, 2001, the Existing Purchase Agreement is
amended in accordance with the terms of this Article II; except as so amended,
the Existing Purchase Agreement shall continue to remain in all respects in full
force and effect.
SECTION 2.1 DEFINED TERMS. Section 1.1 of the Existing Purchase
Agreement containing defined terms is amended as follows.
2.1.1 Replaced Definitions. The definitions of the terms
"Aggregate Tax Credits", "Call Option", "Exercise Date", "Notice" and "Put
Option" are deleted in their entirety and the following definitions are inserted
in their respective places:
"Aggregate Tax Credits" means the amount of Section 29 tax
credits attributable to the Subject Trust Units after the Closing Date, equal to
the product of (i) Tax Credits plus any Tax Credit Adjustments and (ii) the
total number of Subject Trust Units owned by Buyer on the associated WTU Record
Date, such number being equal to 3,568,791 less the number of Trust Units
repurchased by Seller pursuant to any exercise(s) of the Option(s) on Exercise
Date(s) on or before such WTU Record Date.
"Call Option" means an American call option exercisable in one
or more whole Lots up to a total of 3,568,791 Trust Units, exercisable at any
time on any day on which the New York Stock Exchange is open for business, but
no later than the earlier of (a) 4:30 P.M. New York time on June 30, 2003, or
(b) the exercise of the Put Option. The Call Option expires immediately upon
Seller's receipt of Notice from the Buyer of Buyer's exercise of the Put Option.
"Exercise Date" means the day on which an Option is exercised
which shall be five (5) Business Days after the Notice Date (or such other date
as Buyer and Seller may agree in writing).
"Notice" means (i) as to each exercise of the Call Option, a
written notice by Seller, substantially in the form attached hereto as Exhibit
1, delivered to Buyer in accordance with the provisions of Section 10.5 (except
that, as to Buyer, such notice shall be sent only to Quatro Finale IV LLC, c/o
Bear, Xxxxxxx & Co. Inc., 000 Xxxx Xxxxxx, Xxxxxxxx Xxxxx, Xxx Xxxx, Xxx Xxxx
00000 to the attention of Xxxxxx Xxxxx and Xxx Xxxx, facsimile number (212)
272-8976, or to such other person(s) and at such other address(es) and facsimile
number(s) as Buyer may designate in writing to Seller) stating:
(a) that the Call Option is being exercised,
(b) the number of Trust Units to be purchased by Seller as
part of such exercise (such units, the "Purchased Units"), with such number
required to be a whole number of Lots,
(c) the Exercise Date for such exercise of the Call Option and
the Strike Price, as of such Exercise Date, applicable to each of such Purchased
Units (such price to be equal to the Call Strike Price in effect for such
Exercise Date, as then published by the Calculation Agent),
(d) that the Seller Investment Representations are provided by
Seller in respect of such Purchased Units and such representations are true and
correct as of the date of such notice and shall be true and correct as of the
related Exercise Date,
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(e) that the Opinion Letter (or such other documents as the
Transfer Agent may then have permitted or required) as required to be delivered
or caused to be delivered by Seller pursuant to Section 7.6(b) in respect of
such Purchased Units has been executed and a copy of such executed Opinion
Letter is attached to such written notice,
(f) that a copy of a signature page to the Letter of
Instructions required to be provided by Buyer to the Transfer Agent pursuant to
Section 7.6(c) has been executed by Seller and is attached to such written
notice,
(g) the legal name and description to be listed as the record
owner of such Purchased Units,
(h) delivery instructions for any certificate evidencing such
Purchased Units issued by the Transfer Agent, but such delivery instructions
shall only be used in the event that an electronic delivery of such Purchased
Units can not be effected by the Transfer Agent, and
(i) whether the Transfer Agent is to be directed to handle the
transfer of such Purchased Units on an expedited basis or not,
and (ii) as to the exercise of the Put Option, a written notice by
Buyer, substantially in the form attached hereto as Exhibit 2, delivered to
Seller in accordance with the provisions of Section 10.5 (except that such
notice shall be sent only to The Xxxxxxxx Companies, Inc., Xxx Xxxxxxxx Xxxxxx,
Xxxxx 0000, Xxxxx, XX 00000 to the attention of Xxxx Xxxx and Xxxxx Xxxxxx,
facsimile number (000) 000-0000, or to such other person(s) and at such other
address(es) and facsimile number(s) as Seller may designate in writing to Buyer)
stating that the Put Option is being exercised and the number of Trust Units to
be purchased by Seller as part of such exercise, with such number to be equal to
(x) 3,568,791 less (y) the total number of Purchased Units previously
repurchased by Seller, if any, pursuant to any exercise(s) of the Call Option.
"Put Option" means an American put option on one lot of Trust
Units in a number equal to (a) 3,568,791 less (b) the total number of Purchased
Units previously repurchased by Seller, if any, pursuant to any exercise(s) of
the Call Option, which put option is exercisable at any time on any day on which
the New York Stock Exchange is open for business, but no later than the earlier
of (x) 4:30 P.M. New York Time on June 30, 2003, or (y) an exercise of the Call
Option that brings the total number of Purchased Units repurchased by Seller
pursuant to any exercise(s) of the Call Option to 3,568,791. The Put Option
expires the instant that an exercise of the Call Option brings the total number
of Purchased Units repurchased by Seller pursuant to any exercise(s) of the Call
Option to 3,568,791.
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2.1.2 Amended Definition. The definition of the term "Tax
Credit Adjustment" is amended by deleting the third sentence of such definition
in its entirety and replacing it with the following sentence:
"Such requirement on the part of the Calculation Agent with
regard to determining a Tax Credit Adjustment shall expire on the earlier of (i)
December 31st of the year following the year containing an Exercise Date that
relates to an exercise of the Put Option or to an exercise of the Call Option
that brings the total number of Trust Units repurchased by Seller pursuant to
any exercise(s) of the Call Option to 3,568,791, or (ii) December 31, 2003.
2.1.3 New Defined Terms. There shall be added to Section 1.1
of the Existing Purchase Agreement new definitions, in appropriate alphabetical
sequence, reading in their entirety as follows:
"Amendment No. 1" means that certain Amendment No. 1 to
Purchase and Sale Agreement, dated as of September 26, 2001, by and between
Buyer and Seller that amends this Agreement.
"Fed Funds Rate" means, on any given day, the closing price as
of the prior Business Day of the Bloomberg "Fed Funds Rate" index (such amount
to be expressed as a decimal, rounded to the fourth decimal place and, if stated
as a whole number, converted to a percentage interest rate), or such other
benchmark index or interest rate as Buyer and Seller may agree in writing from
time to time to use as a proxy for the unsecured overnight lending interest rate
between banks which are members of the Federal Reserve System.
"Initial Filing Date" means the date that the New Registration
Statement is initially filed with the Commission.
"Letter of Instructions" is defined in Section 7.6(c) and
shall be substantially in the form attached hereto as Exhibit 3, which letter
shall be executed by Buyer and Seller.
"Lot" means, with respect to a Notice delivered in conjunction
with the exercise of the Call Option, a number of Trust Units equal to 10,000
(or, if after giving effect to all prior exercise(s) of the Call Option the
number of Trust Units then available for purchase by Seller pursuant to such
exercise of the Call Option is less than 10,000, such lesser number of Trust
Units).
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"New Registration Statement" is defined in Section 7.5(f).
"Opinion Letter" is defined in Section 7.6(b) and shall be
substantially in the form attached hereto as Exhibit 4.
"Prepayment Unit Price" means an amount per Trust Unit on any
Notice Date relating to an exercise of the Call Option equal to (i) the Call
Strike Price, as of the related Exercise Date, as then published by the
Calculation Agent, less (ii) the product of (a) such published Exercise Date
Call Strike Price, (b) the Fed Funds Rate, as of the date the amount payable by
Seller is wired to Buyer as required by Section 7.6(b), and (c) the ratio of (X)
seven (or such other number of calendar days between the date such amount is
wired to Buyer and such related Exercise Date) to (Y) 365.
"Purchased Units" is defined in clause (b) of the definition
of the term "Notice" contained in this Amendment No. 1.
"Seller Investment Representations" means those
representations and warranties set forth in Section 3.4.
"Transfer Agent" means Mellon Investor Services, L.L.C.
"Wire Transfer Instructions" mean, with respect to the
delivery by Seller of amounts payable to Buyer pursuant to Section 7.6(b), the
following wire transfer instructions (or such other wire transfer instructions
as Buyer may subsequently designate by written notice to Seller):
Bank: Citibank, New York
ABA Routing Number: 0000-0000-0
Account Name: Bear Xxxxxxx Securities Corp.
Account Number: 00000000
For Further Credit To 000-00000-00
Attn: Quatro Finale IV / Xxxx Xxxxxxx
SECTION 2.2 AMENDMENTS TO ARTICLE 3. Article 3 of the Existing Purchase
Agreement is amended by adding the following new Section 3.4:
"3.4 SELLER INVESTMENT REPRESENTATIONS. With respect to any
Purchased Units to be purchased by Seller as part of any exercise of the Call
Option, Seller shall provide, as of the related Notice Date and related Exercise
Date, the following representations and warranties:
(i) Seller understands that the Purchased Units have
not been registered under the Securities Act or the securities laws of any
state, and will be sold
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by Buyer to Seller in reliance on the exemption to registration provided under
Section 4(1) of the Securities Act. Seller agrees that the Purchased Units may
be resold, pledged or otherwise transferred only (A) pursuant to an effective
registration statement under the Securities Act, or (B) in reliance on an
exemption from the registration requirements of the Securities Act and any
applicable state securities or blue sky laws, in each case in accordance with
the applicable laws of the United States and any state of the United States.
(ii) Seller (A) has obtained, in Seller's judgment,
sufficient information to evaluate the merits and risks of an investment in the
Purchased Units, and (B) has sufficient knowledge and experience in financial
and business matters to evaluate the merits and risks associated with such
investment and to make an informed investment decision with respect thereto.
(iii) Except pursuant to or in reliance on an
effective registration statement filed with the Commission registering the
resale by Seller of the Purchased Units, neither Seller nor anyone acting on its
behalf has offered, transferred, pledged, sold or otherwise disposed of the
Purchased Units, any interest in the Purchased Units or any other similar
security to, or solicited any offer to buy or accept a transfer, pledge or other
disposition of the Purchased Units, any interest in the Purchased Units or any
other similar security from, or otherwise approached or negotiated with respect
to the Purchased Units, any interest in the Purchased Units or any other similar
security with, any person in any manner, or made any general solicitation by
means of general advertising or in any other manner, or taken any other action,
that would constitute a distribution of the Purchased Units under the Securities
Act or that would render the disposition of the Purchased Units a violation of
Section 5 of the Securities Act or require registration pursuant thereto, nor
will it act, nor has it authorized or will it authorize any person to act, in
such manner with respect to the Purchased Units."
SECTION 2.3 AMENDMENTS TO ARTICLE 7.
2.3.1 Section 7.1 of the Existing Purchase Agreement is
amended by deleting the existing text of such section in its entirety and
inserting in its place the following:
"7.1 SELLER'S CALL OPTION. Pursuant to the Call Option, Seller
shall have an option to purchase Trust Units from Buyer in one or more whole
Lots up to a total of 3,568,791 Trust Units at any time and from time to time as
specified and at a price established in this Article. The rights of Seller to
purchase the Subject Trust Units under this Section 7.1 shall be enforceable
against any successor or assign of Buyer. The initial Call Strike Price is
$10.70."
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2.3.2 Section 7.2 of the Existing Purchase Agreement is
amended by deleting the existing text of such section in its entirety and
inserting in its place the following:
"7.2 BUYER'S PUT OPTION. Pursuant to the Put Option, Buyer
shall have an option to cause Seller to purchase one lot of Trust Units from
Buyer in a number equal to (a) 3,568,791 less (b) the total number of Purchased
Units previously repurchased by Seller, if any, pursuant to any prior
exercise(s) of the Call Option, at any time as specified and at a price
established in this Article. The rights of Buyer to cause Seller to purchase the
Subject Trust Units under this Section 7.2 shall be enforceable against any
successor or assign of Seller. The initial Put Strike Price is $6.85.
2.3.3 Section 7.3 of the Existing Purchase Agreement is
amended by deleting subsections 7.3(i) and 7.3(k) in their entirety and
inserting in their respective places the following:
"(i) the amount per Trust Unit of any amount paid to Buyer by Seller
pursuant to Section 8.4 (equal to the total amount of such payment divided by
the number of Subject Trust Units owned by Buyer that was used in the
calculation of such payment amount), provided that in the case that Buyer pays
Seller an amount pursuant to Section 8.4, such payment shall be added to the
Strike Prices; less
. . . . .
(k) the value per Trust Unit of any Asset Value Reduction paid to Buyer
by Seller pursuant to Section 8.5 (equal to the total amount of such payment
divided by the number of Subject Trust Units owned by Buyer that was used in the
calculation of such payment amount); less".
2.3.4 Section 7.5 of the Existing Purchase Agreement is
amended by adding to the end of such section the following new subsections:
"(f) Seller intends, but is not obligated, to file as soon as
practicable after Buyer executes this Amendment No. 1 a registration statement
(the "New Registration Statement") with the Commission under the Securities Act
with respect to its future resale(s) of all of the Purchased Units. Seller also
intends, but is not obligated, to use commercially reasonable efforts to cause
the New Registration Statement to be declared effective as promptly as
practicable by the Commission and to obtain appropriate approvals or
registrations (or exemptions from any otherwise applicable requirements) as
promptly as practicable with respect to such Purchased Units under the
securities laws of those states and U.S. territories in which Seller may desire
to sell such Purchased Units. Seller shall provide the following notices to
Buyer, each delivered in accordance with the provisions of Section 10.5, (i) a
notice promptly following the date of initial filing of the New Registration
Statement stating the date of such initial filing of the New Registration
Statement, which date shall be considered the Initial Filing Date, (ii) a notice
promptly following the effective date of the New Registration Statement stating
such effective date and (iii) a notice promptly following the date that the New
Registration Statement is no longer effective stating the initial
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date on which the New Registration Statement was no longer effective; provided,
however, that if Seller elects for any reason not to file the New Registration
Statement or not to use commercially reasonable efforts to cause the New
Registration Statement to be declared effective, Seller shall provide prompt
notice to Buyer of such event.
(g) If Seller indicates in its Notice exercising the Call
Option that the Transfer Agent should handle the transfer of the Trust Units
being repurchased on an expedited basis, Seller agrees to pay to Buyer, on the
same day and in the same manner as the amount payable by Seller to Buyer under
Section 7.6 in connection with such exercise is to be made, the amount of any
expediting fee or other fee that may be payable by Buyer to the Transfer Agent
as a result of the Transfer Agent expediting the transfer of such Trust Units to
Seller; provided, however, that if the amount that Seller pays to Buyer is
different that the actual amount so payable by Buyer to the Transfer Agent,
Buyer and Seller agree to pay the other, as appropriate, the amount of such
difference.
(h) Buyer agreed to deliver, and has delivered, to the
Transfer Agent the certificate evidencing the 3,568,791 Trust Units owned by
Buyer, together with a request to the Transfer Agent that such certificate be
voided and replaced with 356 new certificates each evidencing 10,000 Trust Units
and one certificate evidencing the remaining 8,791 Trust Units and that such new
certificates be promptly delivered to Buyer.
(i) Seller shall, in connection with each exercise of the Call
Option and purchase of Trust Units pursuant thereto, deliver or cause to be
delivered promptly following the related Notice Date and before the related
Exercise Date to the Transfer Agent in the manner set forth in Section 10.5 (1)
an originally executed Opinion Letter (or such other documents as the Transfer
Agent may then have permitted or required) in respect of such Trust Units as
provided in Section 7.6(b) and (2) a signature page, originally executed by
Seller, to the Letter of Instructions required to be provided by Buyer to the
Transfer Agent as provided in Section 7.6(c) in connection with such exercise of
the Call Option.
(j) If, with respect to any exercise of the Call Option, Buyer
receives payment for the Trust Units to be repurchased pursuant thereto in
accordance with Section 7.6(b) and such Trust Units are not transferred to
Seller (or such other party as Seller may have designated in the related Notice
of exercise) as a result of any breach of Buyer's obligations under this
Agreement or Amendment No. 1 in respect of such transfer of Trust Units, Buyer
shall in those circumstances return to Seller such payment and Seller shall
cooperate with Buyer in causing the transfer of such Trust Units to be
cancelled, the certificate evidencing such Trust Units to be returned to Buyer
and the record owner of such Trust Units to continue to be reflected as Buyer on
the books and records of the Transfer Agent and the Trust; provided, however,
that this subsection 7.5(j) is not intended to be, and shall not act as, a
limitation on the remedies that Buyer or Seller may have in respect of a breach
of this Agreement by the other."
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2.3.5 Section 7.6 of the Existing Purchase Agreement is
amended by deleting the existing text of subsections 7.6(a), 7.6(b) and 7.6(c)
in their entirety and inserting in their respective places the following, which
includes the addition of new subsections 7.6(d) and 7.6(e) having the text shown
under subsection (d) and subsection (e), respectively, in the following:
"(a) (i) With respect to the Call Strike Price, the
Calculation Agent shall regularly publish in a manner reasonably accessible to
Seller and Buyer the Call Strike Price of a Trust Unit as in effect for each
Business Day that occurs during the period commencing on the Initial Filing Date
and ending on the earlier of (x) June 30, 2003, (y) the date of an exercise of
the Call Option that brings the total number of Purchased Units repurchased by
Seller pursuant to any exercise(s) of the Call Option to 3,568,791 or (z) the
date of an exercise of the Put Option, and the Calculation Agent shall promptly
publish (or, if necessary due to time constraints, provide direct written notice
to Seller and Buyer of) changes to previously published Call Strike Prices as
necessary to reflect the Calculation Agent's determination of any changes in the
amount of previously published Call Strike Prices and (ii) with respect to the
Put Strike Price, the Calculation Agent shall announce to Buyer and Seller the
Put Strike Price as of the related Exercise Date; provided, however, that, in
each of the foregoing cases, upon the request of either Buyer or Seller, the
Calculation Agent's determination of either of the Call Strike Price or Put
Strike Price shall be subject to audit by a nationally recognized accounting
firm mutually acceptable to Buyer and Seller. As to any Exercise Date that falls
on a WTU Record Date, the Strike Price shall be determined without regard to any
adjustments described in Section 7.3(c) and (e) attributable to the WTU Record
Date that is coincident with the related Exercise Date, it being assumed that
Seller will be entitled to any Cash Distribution and Tax Credits payable on and
attributable to such WTU Record Date;
(b) (i) With respect to any exercise of the Call Option,
Seller shall deliver to Buyer by wire transfer pursuant to the Wire Transfer
Instructions (or by such other method as Seller and Buyer may mutually agree in
writing) in immediately available funds by no later than 4:30 P.M. New York Time
on the related Notice Date an amount equal to the product of (x) the Prepayment
Unit Price (as calculated based upon the Call Strike Price of the Exercised
Option as determined by the Calculation Agent as provided in subsection
7.6(a)(i) above) and (y) the number of Trust Units being purchased by Seller in
connection with the Exercised Option; provided, however, that Buyer and Seller
hereby agree that Seller's payment for any Trust Units repurchased pursuant to
exercise(s) of the Call Option shall be assumed to have been made at the full
Call Strike Price, as of the related Exercise Date, per Trust Unit for all
purposes in this Agreement, regardless of whether or not the Prepayment Unit
Price is a different amount, and (ii) with respect to the exercise of the Put
Option, Seller shall deliver to Buyer by wire transfer in immediately available
funds on the related Exercise Date an amount equal to the product of (1) the Put
Strike Price of the Exercised Option (as determined by the Calculation Agent as
provided in subsection 7.6(a)(ii) above) and (2) the number of Trust Units being
purchased by Seller in connection with the Exercised Option. With respect to
each exercise of the Call Option, Seller further shall deliver, or cause to be
delivered, to Buyer on the related Notice Date (and to the Transfer Agent,
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as provided in Section 7.5(i)) in writing, addressed, and in form acceptable, to
the Transfer Agent a legal opinion (such opinion, an 'Opinion Letter') to the
effect that (x) the transfer of such Trust Units by Buyer to Seller is exempt
from the registration requirements of the Securities Act and any applicable
state securities or blue sky laws, and (y) with respect to any such exercise for
which Seller desires to receive Trust Units not subject to any restrictive
legends, the issuance and delivery of certificate(s) evidencing such Trust Units
being purchased by Seller without any restrictive legends being applicable to
such Trust Units is permitted and lawful under applicable law, or, in each such
case, such other documents as the Transfer Agent may permit;
(c) (i) With respect to each exercise of the Call Option,
Buyer shall, subject to Section 7.6(e), deliver to the Transfer Agent a package
of materials consisting of:
(x) appropriate certificate(s) representing the Trust
Units being purchased as part of such exercise, together with related stock
power relating to such Trust Units, substantially in the form attached hereto as
Exhibit 5, executed by a duly authorized officer of Buyer with a medallion
guarantee affixed thereto acceptable to the Transfer Agent and resolutions of
Buyer to the effect that such officer is authorized to execute such stock power
on behalf of Buyer,
(y) a letter of instructions addressed to the
Transfer Agent (a "Letter of Instructions") that shall, among other things,
direct the Transfer Agent to electronically deliver (if requested by Seller or,
if not requested, cause to be physically delivered) on the related Exercise
Date, on an expedited basis (if requested by Seller in the related Notice of
exercise sent by Seller in connection with such exercise), a certificate
evidencing such Trust Units to Seller as provided in such related Notice of
exercise and to so deliver such certificate either (1) without any restrictive
legends, if the opinion set forth in clause (y) of Section 7.6(b) above has been
included in a Opinion Letter provided to Buyer in accordance with Section 7.6(b)
and to the Transfer Agent in accordance with Section 7.5(i) (or such other
documents as the Transfer Agent may then have permitted or required) or (2) with
a Securities Act restrictive legend having wording similar to the equivalent
restrictive legend affixed to the certificate evidencing Trust Units so
delivered by Buyer (but without those restrictive legends to be removed pursuant
to the agreements stated in Section 7.6(d)), if such opinion set forth in clause
(y) of Section 7.6(b) above has not been so included (or such other permitted or
required documents have not been so provided), and
(z) the copy of the executed Opinion Letter required
to be provided by Seller in accordance with Section 7.6(b); and.
(ii) With respect to the exercise of the Put Option, Buyer shall use
its best efforts to deliver to Seller the certificate(s) representing the
Subject Trust Units, together with the related instruments of assignment of the
Subject Trust Units executed by Buyer on the Exercise Date.
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Each sale of Trust Units upon any exercise of an Option shall be on an
'as is, where is' basis, without representations or warranties, express or
implied, of any kind, other than that Buyer has taken no action to encumber or
convey such Trust Units and other than as provided in the applicable
representations and warranties of Buyer stated in Article III of Amendment No.
1. To the extent that (i) certificate(s) representing such Trust Units together
with the related instruments of assignment are delivered on a date subsequent to
the Exercise Date, (ii) the period of time starting on the day following the
Exercise Date and ending on the actual delivery date contains a WTU Record Date,
(iii) Buyer receives a Cash Distribution attributable to such WTU Record Date
that was not contemplated in the determination of the Strike Price as of the
Exercise Date and (iv) Buyer receives payment in full for the Strike Price on
the Exercise Date, then Buyer agrees to pay Seller any Cash Distribution it
subsequently receives from the Trustee and agrees not to claim any Tax Credits
attributable to such WTU Record Date; and
(d) Seller and Buyer hereby agree that, with respect only to
any Trust Units that are being purchased by Seller as part of any exercise of an
Option, the restrictive legend affixed to any certificates evidencing such Trust
Units that states, 'THE TRUST UNITS EVIDENCED BY THIS CERTIFICATE AND ALL RIGHTS
TO PAYMENTS HEREUNDER ARE SUBJECT TO AND LIMITED BY: (1) THE PURCHASE AND SALE
AGREEMENT, DATED AS OF AUGUST 11, 2000, BETWEEN THE XXXXXXXX COMPANIES, INC.
('TWC') AND QUATRO FINALE IV LLC ('QF'); AND (2) THE NOMINEE AND VOTING RIGHTS
AGREEMENT, DATED AS OF AUGUST 11, 2000, BETWEEN TWC AND QF', may be and shall be
removed so that the new certificate(s) evidencing such Trust Units directed to
be delivered by the Transfer Agent to Seller pursuant to Section 7.6(c) shall
not bear such restrictive legends. Seller and Buyer hereby further agree that
Seller in providing the Opinion Letter (or other permitted document) pursuant to
Section 7.6(b) in connection with the purchase of such Trust Units and the
Transfer Agent in issuing and delivering new certificate(s) evidencing such
Trust Units are expressly permitted to rely upon the foregoing agreement.
(e) Notwithstanding anything to the contrary herein, Buyer and
Seller hereby agree that with respect to each exercise of the Call Option, (i)
Seller shall use its best efforts to ensure that the amount payable by Seller to
Buyer under Section 7.6(b) in respect to such exercise shall be delivered to
Buyer in the manner and by the time set forth in Section 7.6(b), provided, that
if Seller in using its best efforts is not able to so deliver such amount, such
non-delivery shall not constitute a breach of Section 7.6(b) but, in such event,
Seller shall be required to deliver on the first Business Day after the related
Notice Date to Buyer such amount (except that such amount shall be calculated
based upon the Fed Funds Rate and Prepayment Unit Price in effect on the date of
such delivery) in the manner set forth in Section 7.6(b), (ii) if, as provided
in the foregoing subsection 7.6(e)(i) Seller does so deliver to Buyer such
amount, Buyer and Seller hereby agree that the payment of such amount shall be
assumed to have been made on the related Notice Date for all purposes of this
Agreement, (iii) if Seller has not delivered to Buyer in respect to such
exercise either the amount payable under Section 7.6(b) on the related Notice
Date or such amount as provided in the subsection 7.6(e)(i) on the first
Business Day after such Notice Date, such exercise of the Call Option shall
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be void ab initio and Seller shall be responsible for informing the Transfer
Agent that the transaction contemplated in any documents delivered by Seller to
the Transfer Agent pursuant to Section 7.5(i) has been cancelled, (iv) Seller
shall provide to Buyer in the same manner as the related Notice of exercise is
required to be provided a written notice stating the federal funds reference
number (or other similar information) associated with Seller's wire transfer of
the amount payable by Seller to Buyer under Section 7.6(b) or subsection
7.6(e)(i), as applicable, such notice to be provided promptly following Seller's
receipt of such information and by no later than the same day of such wire
transfer, and (v) in any event, Buyer shall not be required to deliver to the
Transfer Agent the materials set forth in Section 7.6(c)(i) in respect of such
exercise until and unless Buyer has received the amount payable by Seller to
Buyer in respect to such exercise under Section 7.6(b) or subsection 7.6(e)(i),
as applicable."
2.3.6 Section 7.7 of the Existing Purchase Agreement is
amended by deleting the existing text of such section in its entirety and
inserting in its place the following:
"7.7 SELLER'S ASSUMPTION OF LIABILITIES. Upon any repurchase
of Trust Units by Seller pursuant to the exercise of an Option and except as
provided in Section 7.8, Seller shall assume all liabilities and obligations
relating to or arising out of the ownership of the Trust Units so repurchased
for all times prior to and after the date of such repurchase other than
liabilities and obligations arising by, through, or under Buyer that cause the
title to the Trust Units when transferred to Seller by Buyer to be materially
different than the title to such Trust Units transferred to Buyer by Seller at
Closing."
2.3.7 Section 7.8 of the Existing Purchase Agreement is
amended by deleting the existing text of such section in its entirety and
inserting in its place the following:
"7.8 POST EXERCISE OR EXPIRY ADJUSTMENT. If,
subsequent to the exercise of an Option or the expiry of both Options (in the
event neither Option is exercised), a Tax Credit Adjustment is reported, then
Seller and Buyer each agree to pay to the other, as appropriate:
(a) if a Tax Credit Adjustment is reported after an
Option has been fully or partially exercised and the Tax Credit Adjustment
relates to Tax Credits that were a factor in the determination of the exercise
Strike Price(s), as an adjustment to the Strike Price(s) paid upon the
exercise(s) of such Option(s), an amount equal to the sum of (i) the product of
(x) 153.846% of the dollar amount of the Tax Credit Adjustment, to the extent it
relates to Tax Credits that were a factor in the determination of the exercise
Strike Price(s) on the respective Exercise Date(s), and (y) the number of Trust
Units so repurchased pursuant to such exercise(s) plus (ii) Applicable Interest
on such amount for the period starting on the Exercise Date(s) of such Option(s)
and ending on the payment date, and
12
(b) if a Tax Credit Adjustment is reported after the
Options have expired and the Put Option was not exercised, as an adjustment to
the Purchase Price paid for any Trust Units not repurchased through partial
exercise(s) of the Call Option before the expiration of the Options, an amount
equal to the sum of (i) the product of (x) 153.846% of the dollar amount of the
Tax Credit Adjustment and (y) the number of Subject Trust Units owned by Buyer
on the WTU Record Date(s) associated with such Tax Credit Adjustment, plus (ii)
Applicable Interest on such amount for the period starting on the expiry of the
Options and ending on the payment date.
Each such payment shall be due in immediately
available funds by wire transfer within five (5) Business Days of receipt of
notice from the Calculation Agent of such Tax Credit Adjustment.
SECTION 2.4 AMENDMENTS TO ARTICLE 8.
2.4.1 Section 8.1(c) of the Existing Purchase Agreement is
amended by deleting the existing text of such subsection (but not including the
text following such subsection which contains the definition of the term
"Losses") in its entirety and inserting in its place the following:
"(c) following a repurchase pursuant to Section 7.6, (i) the
liabilities and obligations assumed by Seller under Section 7.7, (ii) with
respect to any Purchased Units so repurchased, any subsequent sale(s) by Seller
of such Purchased Units, and (iii) the breach by Seller of any of the Seller
Investment Representations given in connection with such repurchases."
2.4.2 Section 8.4 of the Existing Purchase Agreement is
amended by deleting the existing text of subsections 8.4(a), 8.4(b) and 8.4(c)
in their entirety and inserting in their respective places the following, which
includes the addition of a new subsection 8.4(e) having the text shown under
subsection (e) in the following:
"(a) Buyer agrees to pay Seller in immediately available funds by wire
transfer within five (5) Business Days of receiving a PPA Proration Statement,
an amount by which any Cash Distribution or Tax Credits amount is increased as a
result of a Non-Expansion PPA, equal to the product of (i) the ratio that (1)
the total number of Subject Trust Units owned by Buyer, as of the WTU Record
Date associated with such Cash Distribution or Tax Credit amount, bears to (2)
9,700,000 and (ii) the excess of (A) the revised computation of the Trust's
cumulative entitlement to cash and 153.846% of the tax credits attributable to
Section 29 Dry MMBtu for all periods before the Effective Time over (B) the
amount of cash and 153.846% of the tax credits attributable to the Section 29
Dry MMBtu represented to be complete and accurate in Section 3.2(g)(i) (or, to
the extent an adjustment under this Section 8.4 has been made, the previous
computation of the Trust's cumulative entitlement to cash and 153.846% of the
pre-Effective Time tax credits used to calculate such adjustment). Section 29
Dry MMBtu is converted into tax credits, for purposes of the preceding sentence,
using the tax credit rate that the Trustee used to determine Tax Credits for the
Prior Period Adjustment (as such term is used in a Statement to Trustee) in
question.
13
(b) Seller agrees to pay Buyer in immediately available funds by wire
transfer within five (5) Business Days of receiving a PPA Proration Statement,
an amount by which any Cash Distribution or Tax Credit amount is reduced as a
result of a Non-Expansion PPA, equal to the product of (i) the ratio that (1)
the total number of Subject Trust Units owned by Buyer, as of the WTU Record
Date associated with such Cash Distribution or Tax Credit amount, bears to (2)
9,700,000 and (ii) the excess of (A) the amount of cash and 153.846% of the tax
credits attributable to the Section 29 Dry MMBtu represented to be complete and
accurate in Section 3.2(g)(i) (or, to the extent an adjustment under this
Section 8.4 has been made, the previous computation of the Trust's cumulative
entitlement to cash and 153.846% of the pre-Effective Time tax credits used to
calculate such adjustment) over (B) the revised computation of the Trust's
cumulative entitlement to cash and 153.846% of the tax credits attributable to
Section 29 Dry MMBtu for all periods before the Effective Time. Section 29 Dry
MMBtu is converted into tax credits, for purposes of the preceding sentence,
using the tax credit rate that the Trustee used to determine Tax Credits for
Prior Period Adjustment (as such term is used in a Statement to Trustee) in
question.
(c) To the extent there is a subsequent positive Tax Credit Adjustment
attributable to a WTU Record Date that contains a Non-Expansion PPA, Buyer
agrees to pay Seller an amount by which such Tax Credit Adjustment is increased
as a result of such Non-Expansion PPA times the total number of Subject Trust
Units owned by Buyer, as of the WTU Record Date associated with such Tax Credit
Adjustment. To the extent there is a subsequent negative Tax Credit Adjustment
attributable to a WTU Record Date that contains a Non-Expansion PPA, Seller
agrees to pay Buyer an amount by which the absolute value of such Tax Credit
Adjustment is decreased as a result of such Non-Expansion PPA times the total
number of Subject Trust Units owned by Buyer, as of the WTU Record Date
associated with such Tax Credit Adjustment. Such payment shall be due in
immediately available funds by wire transfer within five (5) Business Days of
receipt of notice from the Calculation Agent of such Tax Credit Adjustment.
. . . . . .
"(e) Notwithstanding anything to the contrary in Sections 8.4(a),
8.4(b) and 8.4(c), if a PPA Proration Statement is provided that would require
amounts to be paid pursuant to one or more of Sections 8.4(a), 8.4(b) and 8.4(c)
and prior thereto one or more partial exercises of the Call Option shall have
occurred, the amounts payable under such section(s) shall be appropriately
increased or decreased to reflect the difference in the aggregate purchase price
that would have been payable by Seller in connection with its prior repurchases
of Trust Units pursuant to such exercises if the Strike Price(s) used to
determine such aggregate purchase price had been calculated by taking into
account the amounts that would be payable pursuant to Sections 8.4(a), 8.4(b)
and 8.4(c), as applicable, as a result of such PPA Proration Statement."
2.4.3 Section 8.5 of the Existing Purchase Agreement is
amended by deleting under the definition of "Asset Value Reduction" in that
section the clause "(b) the ratio 3,568,791 / 9,700,000; and" and inserting in
its place the following
14
clause "(b) the ratio that (i) the total number of Subject Trust Units owned by
Buyer, as of the date on which Seller first becomes aware of such breach of
representations, bears to (ii) 9,700,000; and."
SECTION 2.5 AMENDMENT TO ARTICLE 10. Section 10.5 of the Existing
Purchase Agreement is amended by adding the following new paragraphs immediately
after the statement "Fax No.: (000) 000-0000" contained therein:
"If to the Transfer Agent, with respect to questions regarding the
transfer of Trust Units and delivery of an originally executed Opinion Letter
and signature page as provided in Section 7.5(i), addressed to:
Mellon Investor Services, L.L.C.
000 Xxxxx Xxxxx Xxxxxx, Xxxxx 0000
Xxxxxx, XX 00000
Attention: Xxxx Xxxxxxx
Phone No.: (000) 000-0000
Fax No.: (000) 000-0000
But, with respect to delivery of certificates evidencing Trust Units, any
related Stock Power, Buyer resolutions and Letter of Instructions, and copies of
any related executed Opinion Letter, addressed to:
Mellon Investor Services, L.L.C.
00 Xxxxxxxxxx Xxxx
Xxxxxxxxxx Xxxx, XX 00000
Attention: Xxxxx Xxxxxxx, Company Items Department, 2nd Floor
SECTION 2.6 REFERENCES. Each reference in the Existing Purchase
Agreement to the term "Agreement" shall be deemed to refer to the Existing
Purchase Agreement, as amended by this Amendment No. 1.
ARTICLE III
REPRESENTATIONS AND WARRANTIES
Each of the parties hereto hereby represents and warrants to the other
that such party has full power and authority to execute, deliver and perform its
obligations under this Amendment No. 1, and this Amendment No. 1 has been duly
executed and delivered by such party and constitutes the legal, valid, and
binding acts and obligations of such party enforceable against it in accordance
with its terms, subject, however, to bankruptcy, insolvency, reorganization, and
other laws affecting creditors' rights generally and, with regard to any
equitable remedies, to the discretion of the court before which proceedings to
obtain such remedies may be pending. Buyer hereby represents, warrants and
covenants, as of the date of this Amendment No. 1, that (i)
15
other than as may have occurred as a consequence of Buyer's execution of the
Closing Documents, neither Buyer nor anyone acting on its behalf has
transferred, pledged, sold or otherwise disposed of the Subject Trust Units
during the period commencing on the Closing Date and ending on the date of this
Amendment No. 1 and (ii) Buyer, and any other entity that is an Affiliate of
Buyer which owns or has owned an interest in the Underlying Properties, has each
been a separate legal entity with its own federal identification number and has
each filed a separate federal partnership tax return.
ARTICLE IV
MISCELLANEOUS
SECTION 4.1 CONTINUING FORCE AND EFFECT. Except as amended hereby, the
Existing Purchase Agreement shall remain unmodified and in full force and
effect. The parties hereby ratify and confirm the Existing Purchase Agreement,
as amended concurrently herewith.
SECTION 4.2 COUNTERPARTS. This Amendment No. 1 may be executed in any
number of counterparts. Each counterpart shall be deemed an original and all
counterparts shall be deemed the same instrument with the same effect as if all
parties hereto had signed the same signature page. Any signature page of this
Amendment No. 1 may be detached from any identical counterpart of this Amendment
No. 1 having attached to it one or more additional signature pages.
SECTION 4.3 GOVERNING LAW. THIS AMENDMENT NO. 1 SHALL BE GOVERNED BY
AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK. Buyer and
Seller hereby irrevocably submit to the jurisdiction of the courts of New York
County in the State of New York, and to the jurisdiction of the United States
District Court for the Southern District of New York for the purposes of any
suit, action, or other proceeding arising out of, or relating to, this
Agreement; provided that any suit involving or seeking enforcement against any
Trust Units may be brought in the state in which such Trust Units are located.
Buyer and Seller hereby agree not to assert that any suit, action, or proceeding
under such jurisdiction is in an inconvenient forum or that venue is improper.
SECTION 4.4 TITLES AND HEADINGS. The titles and headings of the
Sections of this Amendment No. 1 are intended for convenience only and shall not
in any way affect the meaning or construction of any provision of this Amendment
No. 1.
SECTION 4.5 CHANGES AND MODIFICATIONS IN WRITING. No provision of this
Amendment No. 1 may be changed or modified except by an instrument in writing
signed by Seller and Buyer.
SECTION 4.6 Modification of Certain Definitions As Used in Certain
Closing Documents. If Seller at any time exercises the Call Option for less than
3,568,791 Trust Units, then Seller and Buyer hereby agree that the following
modifications to the definitions of the terms "Subject Trust Units" and "Call
Option,"
16
which are otherwise defined in the Existing Purchase Agreement and this
Amendment No. 1, respectively, shall apply only for purposes of the Nominee and
Voting Rights Agreement and the Registration Rights Agreement as indicated in
the following:
4.6.1 Modification of the Definition of the Term "Subject
Trust Units." (i) For purposes only of the use of the defined term "Subject
Trust Unit" in the Nominee and Voting Rights Agreement and the Registration
Rights Agreement, the definition of such term, other than as set forth in clause
(ii) below, shall be deemed to be appropriately modified to mean, as of any date
of usage, 3,568,791 Trust Units less the number of Trust Units repurchased by
Seller pursuant to any exercise(s) of the Call Option on or before such date of
usage, and (ii) for purposes only of Section 4 of the Nominee and Voting Rights
Agreement, the definition of such term shall be deemed to be appropriately
modified to mean, as of any date of usage, the number of Trust Units, if any,
repurchased on or before such date of usage by Seller pursuant to any
exercise(s) of the Call Option.
4.6.2 Modification of the Definition of the Term "Call
Option." For purposes only of the use of the defined term "Call Option" in the
Registration Rights Agreement, the definition of such term shall be deemed
appropriately modified to refer to only an exercise of the Call Option that
brings the total number of Trust Units repurchased by Seller pursuant to any
exercise(s) of the Call Option to 3,568,791.
SECTION 4.7 Unintended Consequences of this Amendment No. 1. It is the
intent of Seller and Buyer that this Amendment No. 1 amend the Existing Purchase
Agreement to allow for exercises of the Call Option for repurchases by Seller of
less than all of the Subject Trust Units and provide for other necessary changes
to reflect the possibility of such incremental exercises of the Call Option, but
it is not their intent for this Amendment No. 1 to have other consequences that
would be inconsistent or conflict with the original intent of Seller and Buyer
as reflected in the provisions of the Existing Purchase Agreement, and Seller
and Buyer therefore hereby agree that each will cooperate with the other to
execute any further amendments to the Existing Purchase Agreement to the extent
necessary to cure any ambiguity or correct or supplement any provision in this
Amendment No. 1 which may have such unintended consequences.
17
IN WITNESS WHEREOF, the duly authorized representatives of the parties
hereto have executed this Amendment No. 1 as of the date first above written.
"BUYER"
QUATRO FINALE IV LLC,
a Delaware limited liability company
By:
-----------------------------------
Name:
---------------------------------
Title:
--------------------------------
"SELLER"
THE XXXXXXXX COMPANIES, INC.,
a Delaware corporation
By:
-----------------------------------
Name:
---------------------------------
Title:
--------------------------------
18
EXHIBIT 1: FORM OF NOTICE OF EXERCISE OF CALL OPTION
VIA FAX AND OVERNIGHT COURIER
DATE:
To: Quatro Finale IV LLC ("Quatro")
Ladies and Gentlemen:
Reference is made to that certain Purchase and Sale Agreement dated as
of August 11, 2000, between The Xxxxxxxx Companies, Inc. ("Xxxxxxxx") and Quatro
Finale IV LLC ("Quatro"), as amended by that certain Amendment No. 1 to Purchase
and Sale Agreement dated as of September 26, 2001 between Quatro and Xxxxxxxx
(as so amended, the "Purchase Agreement"). In accordance with the terms of the
Purchase Agreement, Xxxxxxxx hereby notifies Quatro as follows:
(i) Xxxxxxxx is exercising its Call Option to purchase _______ units
(such number of units constituting a whole number of Lots) of beneficial
interest ("Trust Units") in the Xxxxxxxx Coal Seam Gas Royalty Trust (the
"Trust");
(ii) the Exercise Date for this exercise of the Call Option in
accordance with the requirement of the Purchase Agreement shall be ____________,
200__;
(iii) the Strike Price, as of such Exercise Date, applicable to each of
the Trust Units to be so purchased is $______, based upon the Strike Prices
published on ______, 200__ by the Calculation Agent;
(iv) Xxxxxxxx desires to receive Trust Units that are not subject to
any restrictive legends[, other than a Securities Act restrictive legend having
wording similar to the equivalent restrictive legend affixed to the original
physical certificate(s) evidencing Trust Units that is to be provided by Quatro
to the Transfer Agent]; and
(v) The Transfer Agent is [not] to be directed to handle the transfer
of such Trust Units to Xxxxxxxx on an expedited basis.
Capitalized terms used herein but not defined shall have the meanings
given to such terms in the Purchase Agreement.
Xxxxxxxx hereby represents and warrants that the Seller Investment
Representations are true and correct as of the date hereof and shall be true and
correct as of the Exercise Date. Xxxxxxxx further represents and warrants that
the Opinion Letter (or such other document[s] as the Transfer Agent may then
have permitted, as required to be delivered or caused to be delivered by
Xxxxxxxx to the Transfer Agent, in light of our directions stated in paragraph
(iv)
above, pursuant to Section 7.6(b) of the Purchase Agreement in respect of such
Trust Units can be delivered and shall be delivered to the Transfer Agent as so
required.
Unless otherwise indicated below, Xxxxxxxx requests electronic delivery
of Trust Units into Xxxxxxxx' account with [Bear Xxxxxxx & Co.], DTC
number--------------. The Transfer Agent shall be directed that the
certificate[s] representing the Trust Units, if any such certificates are to be
issued, shall be registered in the names and in the denominations as specified
below.
[Insert names and denominations]
Xxxxxxxx is paying the call option exercise price for the Trust Units
by wire transfer of funds to Quatro.
-----------------------------
The Transfer Agent is to be directed that the unit
certificate(s), if any certificate(s) shall be requested, for
the Trust Units, are to be delivered (check one):
[ ] to Xxxxxxxx; or
[ ] to.
--------------------------
and the certificate(s) are to be mailed to Xxxxxxxx at the following address:
----------------------
----------------------
----------------------
----------
* To be used only if electronic delivery of the Trust Units cannot be effected
by the Transfer Agent.
*
Very truly yours,
THE XXXXXXXX COMPANIES, INC.
------------------------------------------
Name:
Title:
2
EXHIBIT 2: FORM OF NOTICE OF EXERCISE OF PUT OPTION
[INSERT DATE OF NOTICE]
To: The Xxxxxxxx Companies, Inc.
Xxx Xxxxxxxx Xxxxxx, Xxxxx 0000
Xxxxx, XX 00000
Attention: Xxxx Xxxx and Xxxxx Xxxxxx
Ladies and Gentlemen:
Reference is made to that certain Purchase and Sale Agreement dated as
of August 11, 2000, between The Xxxxxxxx Companies, Inc. ("Xxxxxxxx") and Quatro
Finale IV LLC ("Quatro"), as amended by that certain Amendment No. 1 to Purchase
and Sale Agreement dated as of September 26, 2001 between Quatro and Xxxxxxxx
(as so amended, the "Purchase Agreement"). Unless otherwise defined or the
context otherwise requires, terms used herein have the meanings provided for in
the Purchase Agreement. In accordance with the terms of the Purchase Agreement,
Quatro hereby notifies Xxxxxxxx as follows:
(i) Quatro is hereby exercising its Put Option and Xxxxxxxx is
therefore required to repurchase [INSERT NUMBER OF TRUST UNITS TO BE PURCHASED,
such number to be equal to 3,568,791 less number of Trust Units previously
repurchased by Xxxxxxxx pursuant to any exercise(s) of the Call Option] Trust
Units (the "Put Option Units") from Quatro; and
(ii) Xxxxxxxx shall repurchase the Put Option Units in accordance with
the terms and conditions of the Purchase Agreement.
Very truly yours,
QUATRO FINALE IV LLC
By:
----------------------------
Name:
Title:
EXHIBIT 3: FORM OF LETTER OF INSTRUCTION
, 200__
VIA FAX AND OVERNIGHT COURIER
Mellon Investor Services, LLC
00 Xxxxxxxxxx Xxxx
Xxxxxxxxxx Xxxx, XX 00000
Attn: Xxxxx Xxxxxxx
Dear Xx. Xxxxxxx:
This letter of instruction is written in connection with the Purchase
and Sale Agreement, dated as of August 11, 2000, between The Xxxxxxxx Companies,
Inc., a Delaware corporation ("Xxxxxxxx") and Quatro Finale IV LLC ("Quatro"),
as amended by Amendment No. 1, dated as of September 26, 2001 (the "Purchase
Agreement"), providing for, among other things, the sale, in a private
transaction, of an aggregate of 3,568,791 units of beneficial interest (the
"Trust Units"), of Xxxxxxxx Coal Seam Gas Royalty Trust, a trust organized under
the laws of the state of Delaware (the "Trust") in a transaction exempt from
registration pursuant to the requirements of the Securities Act of 1933, as
amended. The Purchase Agreement also grants Xxxxxxxx an option (the "Call
Option") to repurchase all of the 3,568,791 Trust Units, from time to time in
whole or in part. The Call Option expires on the earlier to occur of (1) June
30, 2003 and (2) the exercise of the put option, as provided for in the Purchase
Agreement, by Quatro. Xxxxxxxx may repurchase the Trust Units in one or more
lots equal to the lesser of (1) 10,000 Trust Units or (2) the remaining number
of Trust Units subject to the Call Option. [Each time that Xxxxxxxx exercises
its Call Option for a certain number of Lots, it plans to sell the number of
Trust Units then repurchased to the public.]
[Xxxxxxxx wishes to inform you that (1) the Trust and Xxxxxxxx have
filed a registration statement on Form S-3 (No. 333 - ____) (the "Registration
Statement") providing for the registration of the offer and sale by Xxxxxxxx of
all of the 3,568,791 Trust Units to allow Xxxxxxxx, from time to time, once it
has exercised its Call Option in whole or in part, to sell the Trust Units in a
registered transaction; (2) The Registration Statement was declared effective by
the Securities and Exchange Commission on ____________, 2001;and (3) The Trust
Units, therefore, once transferred to Xxxxxxxx and held in its name, may be sold
by Xxxxxxxx in a public offering as unrestricted securities.]
We wish to inform you that Xxxxxxxx has exercised the Call Option in
order to repurchase _____ Trust Units and in connection therewith has delivered
to Quatro an opinion of counsel, a copy of which is attached hereto as Exhibit A
( the "Opinion"). The Opinion is addressed to you, as the transfer agent, and is
being provided herewith to support the transfer of the Trust Units being
acquired by Xxxxxxxx pursuant to its exercise of the Call Option and the
issuance of certificate(s) to evidence such Trust Units being repurchased
pursuant to such exercise.
Accordingly, you are hereby authorized and directed, as transfer agent
and registrar for the Trust Units, as follows:
(1) to cancel the certificate(s) surrendered by Quatro,
representing the number of Trust Units that are being
repurchased by Xxxxxxxx from Quatro;
(2) to countersign and register a certificate or certificates
representing [number of Trust Units being repurchased to be
inserted] Trust Units, such certificate(s) to be without the
restrictive legend [, other than a Securities Act restrictive
legend having wording identical to the equivalent restrictive
legend affixed to such certificate(s) surrendered by Quatro],
and to be in the following names and denominations: [Names and
denominations specified by Xxxxxxxx to be inserted], and
(3) to issue and deliver the trust units referred to in paragraph
(2) above to [the Depository Trust Company][Xxxxxxxx] on
[specified date for transfer to be inserted (i.e., the
Exercise Date stated in the related Notice of Exercise)] in
accordance with [delivery instructions of Xxxxxxxx to be
inserted].
Very Truly Yours,
THE XXXXXXXX COMPANIES, INC.
By:
-------------------------------------
Name:
Title:
QUATRO FINALE IV LLC
By:
-------------------------------------
Name:
Title:
2
EXHIBIT 4: FORM OF OPINION LETTER
___________, 200__
Mellon Investor Services, LLC
000 Xxxxx Xxxxx Xxxxxx, Xxxxx 0000
Xxxxxx, Xxxxx 00000
Attention: Xx. Xxxx Xxxxxxx
Re: Xxxxxxxx Coal Seam Gas Royalty Trust
Transfer Opinion and Request to Remove Legend on
Restricted Securities
Dear Xx. Xxxxxxx:
We have acted as counsel for The Xxxxxxxx Companies, Inc., a Delaware
corporation ("Xxxxxxxx"), in connection with [(a)] the transfer of ___________
units of beneficial interest ("Trust Units") of Xxxxxxxx Coal Seam Gas Royalty
Trust, a business trust organized under the laws of the Delaware Business Trust
Act (the "Trust"), to Xxxxxxxx by Quatro Finale IV, LLC, a Delaware limited
liability company ("Quatro"), and [(b) the sale by Xxxxxxxx of ___________ Trust
Units to the public.] Capitalized terms used but not defined herein shall have
the meanings ascribed to them in the Purchase Agreement (defined below).
Quatro acquired a total of 3,568,791 Trust Units from Xxxxxxxx pursuant
to the Purchase and Sale Agreement dated as of August 11, 2000, between Xxxxxxxx
and Quatro, as amended by Amendment No. 1 to Purchase and Sale Agreement, dated
as of September 26, 2001 (such agreement as so amended, the "Purchase
Agreement"), between Xxxxxxxx and Quatro in a transaction that was not
registered under the Securities Act of 1933, as amended (the "Act"). As a
result, the 3,568,791 Trust Units owned by Quatro constitute "restricted
securities" under the Act and bear an appropriate restrictive legend. Quatro has
beneficially owned the Trust Units since August 11, 2000.
The Trust Units are being purchased by Xxxxxxxx pursuant to its
exercise, on ________________, 200__, of its Call Option in accordance with the
Purchase Agreement, pursuant to which Xxxxxxxx has the right, at any time in
whole or from time to time in one or more Lots, to elect to purchase the
3,568,791 Trust Units owned by Quatro. [Xxxxxxxx, in turn, may resell to the
public the Trust Units so purchased, which resale will occur pursuant to the
Registration Statement (Commission File No. 333-_____________).]
The Trust is subject to the reporting requirements of the Securities
Exchange Act of 1934, as amended, and has advised us that it is current in its
reporting obligations under that Act. [The Registration Statement was declared
effective under the Securities Act on ______________, 2001, and, to our
knowledge, no stop order suspending the effectiveness of the Registration
Statement or any amendment thereto has been issued, and no proceedings for that
purpose have been instituted or threatened by the Commission.]
In connection with the opinions expressed below, we have examined the
following:
(a) the Purchase Agreement;
(b) the Notice of Exercise of Call Option; and
(c) the Registration Statement
We have also examined such statutes, regulations, records and
documents, certificates of Xxxxxxxx and the Trust and public officials, and
other documents as we have deemed necessary or advisable for the purposes of the
opinions hereinafter set forth.
Based upon the foregoing information and assumptions, it is our opinion
that:
(i) The purchase and sale of the __________ Trust Units from
Quatro to Xxxxxxxx is exempt from registration under the Act [and if the Trust
Units are to be delivered to Xxxxxxxx in certificated form, the restrictive
legend reflecting that such Trust Units constitute restricted securities and
prohibiting the transfer unless in accordance with applicable securities laws
should be imprinted on the back of the certificate(s) representing the Trust
Units delivered to Xxxxxxxx]; [ and
(ii) In connection with the transfer of the Trust Units from
Xxxxxxxx to the public, the certificate(s) issued in respect of such Trust Units
should not have imprinted thereon any restrictive legends.]
This opinion is qualified in the following respects:
(a) We have assumed the genuineness of all signatures
appearing on the documents examined by us, the authenticity of all documents
submitted to us as originals and the conformity with the original documents of
all documents submitted to us as copies;
(b) We have assumed the due authorization, execution, and
delivery of the aforementioned documents by each of the persons that are parties
thereto, the legal capacity of natural persons, and the incumbency of each of
the signatories thereto;
(c) We have assumed, with permission, the truthfulness and
accuracy of the representations of Xxxxxxxx set forth in Section 3.4 of the
Purchase Agreement and that Xxxxxxxx is not subject to any statute, rule or
regulation, or to any impediment to which contracting parties are not generally
subject, that would affect our opinions;
(d) We have assumed, without independent investigation, that
Quatro has not, since the date that it acquired the Trust Units, engaged in any
transaction or transactions involving the offering or selling of any of the
Trust Units that would violate the Act or the securities laws of any state of
the United States or any other applicable jurisdiction; and
(e) We have relied, without independent investigation, in
respect of factual matters upon representations of officers of Xxxxxxxx and the
trustee of the Trust and other sources believed by us to be responsible.
2
The opinion set forth herein is given as of the date hereof.
We disclaim any obligation to notify you or any person after the date hereof if
any change in fact or law should change our opinion with respect to any matter
set forth herein. The foregoing opinion is solely for your benefit and may not
be relied on by any other person without our prior written consent.
Sincerely,
Xxxxxxx & Xxxxx L.L.P.
3
EXHIBIT 5: FORM OF
STOCK POWER
For value received, I/we hereby sell, assign or transfer unto(1)
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Social Security # or Tax I.D. # of new owner
(2)
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(Print/Type all Names & Address OF NEW OWNERS, Indicate if joint tenant, trust
or custodian account)
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CITY STATE ZIP CODE
(3)( ) Certificate Shares AND/OR (4)( )
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Dividend Reinvestment shares
(if no shares write "NONE") (if not transferring DRP or do not have any write
"NONE")
of the Common Stock of the
(5)
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(NAME OF COMPANY)
registered to
(6)
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AND/OR account number
(7) represented by Certificate No(s)
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(8)
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herewith and do hereby irrevocably constitute and appoint MELLON INVESTOR
SERVICES, L.L.C.,
Attorney to transfer the said stock on the books of said Corporation with full
power of substitution in the premises.
Date (9)
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(signature of registered holder or
authorized representative)
Daytime Telephone Number
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(signature of registered holder if more than one holder)
(Affix Medallion Signature Guarantee
Imprint)
IMPORTANT READ CAREFULLY:
The signature to this assignment must correspond with the name as written upon
the face of the certificate in every particular without alteration or
enlargement or any change whatsoever. The signature of the person executing this
power must be guaranteed by an Eligible Guarantor Institution such as a
Commercial Bank, Trust Company, Securities Broker/Dealer, Credit Union, or a
Savings Association participating in a Medallion program approved by The
Securities Transfer Association, Inc. Unfortunately, no other form of signature
verification can be accepted.
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INSTRUCTIONS FOR COMPLETING THE STOCK POWER
1. SS# or Tax ID # of new shareowner(s). 8. List the Certificate #'s
printed on the left side of
2. Complete name & address of the new certificate being transferred.
shareowner(s). This number begins with 2
letters followed by a series of
3. Total # of certificate shares being numbers. If all shares are held
transferred. in DRP write "none".
4. Total # of Dividend Reinvestment shares 9. Signature of current owner(s)
transferred. exactly as it appears on the
face of the certificate.
5. Name of Corporation on Certificate or DRP Signature must be guaranteed by
statement. an Eligible Guarantor
Institution.
6. Name as it appears on the face of the
certificate.
7. Your account # as indicated on your check
or DRP statement.
