-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, QwowIih2OaXSVGI7x6llRHeQh8pyTyc0w7moZviK0zSvIOIq3prr4N7dD2oytocn 2mnr+FTSw9QrbZQ0mTyjCw== 0001035704-04-000001.txt : 20040102 0001035704-04-000001.hdr.sgml : 20040101 20040102172627 ACCESSION NUMBER: 0001035704-04-000001 CONFORMED SUBMISSION TYPE: SC 13D PUBLIC DOCUMENT COUNT: 6 FILED AS OF DATE: 20040102 GROUP MEMBERS: FIRST RESERVE FUND IX LP GROUP MEMBERS: FIRST RESERVE GP IX LP GROUP MEMBERS: FRC-NRP AV HOLDINGS LP GROUP MEMBERS: FRC-NRP INC GROUP MEMBERS: FRC-WPP GP LLC GROUP MEMBERS: FRC-WPP NRP INVESTMENT LP SUBJECT COMPANY: COMPANY DATA: COMPANY CONFORMED NAME: NATURAL RESOURCE PARTNERS LP CENTRAL INDEX KEY: 0001171486 STANDARD INDUSTRIAL CLASSIFICATION: BITUMINOUS COAL & LIGNITE MINING [1220] IRS NUMBER: 352164875 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: SC 13D SEC ACT: 1934 Act SEC FILE NUMBER: 005-78553 FILM NUMBER: 04501703 BUSINESS ADDRESS: STREET 1: 601 JEFFERSON STREET STREET 2: SUITE 3600 CITY: HOUSTON STATE: TX ZIP: 77002 BUSINESS PHONE: 7137517514 MAIL ADDRESS: STREET 1: 601 JEFFERSON STREET STREET 2: SUITE 3600 CITY: HOUSTON STATE: TX ZIP: 77002 FILED BY: COMPANY DATA: COMPANY CONFORMED NAME: FIRST RESERVE GP IX INC CENTRAL INDEX KEY: 0001168363 IRS NUMBER: 912092542 STATE OF INCORPORATION: DE FILING VALUES: FORM TYPE: SC 13D BUSINESS ADDRESS: STREET 1: ONE LAFAYETTE PLACE STREET 2: THIRD FLOOR CITY: GREENWICH STATE: CT ZIP: 06830 BUSINESS PHONE: 203-661-6601 MAIL ADDRESS: STREET 1: ONE LAFAYETTE PLACE STREET 2: THIRD FLOOR CITY: GREENWICH STATE: CT ZIP: 06830 SC 13D 1 d11617sc13d.txt SCHEDULE 13D ------------------------------ OMB APPROVAL ------------------------------ OMB Number: 3235-0145 Expires: December 31, 2005 Estimated average burden hours per response . . . . .11 ------------------------------ UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 SCHEDULE 13D UNDER THE SECURITIES EXCHANGE ACT OF 1934 NATURAL RESOURCE PARTNERS L.P. - -------------------------------------------------------------------------------- (Name of Issuer) COMMON UNITS - -------------------------------------------------------------------------------- (Title of Class of Securities) 63900P 10 3 - -------------------------------------------------------------------------------- (CUSIP Number) Thomas R. Denison, First Reserve Corporation, One Lafayette Place, Greenwich, Connecticut 06830 (203) 625-2520 - -------------------------------------------------------------------------------- (Name, Address and Telephone Number of Person Authorized to Receive Notices and Communications) December 22, 2003 - -------------------------------------------------------------------------------- (Date of Event which Requires Filing of this Statement) If the filing person has previously filed a statement on Schedule 13G to report the acquisition that is the subject of this schedule 13D, and is filing this schedule because of Sections 240.13d-1(e), 240.13d-1(f) or 240.13d-1(g), check the following box. [ ] NOTE: Schedules filed in paper format shall include a signed original and five copies of the schedule, including all exhibits. See Section 240.13d-7 for other parties to whom copies are to be sent. *The remainder of this cover page shall be filled out for a reporting person's initial filing on this form with respect to the subject class of securities, and for any subsequent amendment containing information which would alter disclosures provided in a prior cover page. The information required on the remainder of this cover page shall not be deemed to be "filed" for the purpose of Section 18 of the Securities Exchange Act of 1934 ("Act") or otherwise subject to the liabilities of that section of the Act but shall be subject to all other provisions of the Act (however, see the Notes). PERSONS WHO RESPOND TO THE COLLECTION OF INFORMATION CONTAINED IN THIS FORM ARE NOT REQUIRED TO RESPOND UNLESS THE FORM DISPLAYS A CURRENTLY VALID OMB CONTROL NUMBER. CUSIP NO. 63900P 10 3 - -------------------------------------------------------------------------------- 1. Name Of Reporting Persons. I.R.S. Identification Nos. of above persons (entities only). First Reserve GP IX, Inc. IRS No. 91-209254 2 - -------------------------------------------------------------------------------- 2. Check The Appropriate Box If a Member of a Group (See Instructions) (a) [ ] (b) [X] - -------------------------------------------------------------------------------- 3. SEC Use Only - -------------------------------------------------------------------------------- 4. Source of Funds (See Instructions) OO - -------------------------------------------------------------------------------- 5. Check if Disclosure of Legal Proceedings Is Required Pursuant to Items 2(d) or (e) - -------------------------------------------------------------------------------- 6. Citizenship or Place of Organization Delaware - -------------------------------------------------------------------------------- 7. Sole Voting Power Number of Shares Bene- ------------------------------------------------------- ficially by 8. Shared Voting Power Owned by Each Reporting 4,796,920(1) Person With ------------------------------------------------------- 9. Sole Dispositive Power ------------------------------------------------------- 10. Shared Dispositive Power 4,796,920(1) - -------------------------------------------------------------------------------- 11. Amount Beneficially Owned by Each Reporting Person 4,796,920(1) - -------------------------------------------------------------------------------- 12. Check if the Aggregate Amount in Row (11) Excludes Certain Shares (See Instructions) - -------------------------------------------------------------------------------- 13. Percent of Class Represented by Amount in Row (11) 29.7% - -------------------------------------------------------------------------------- 14. Type of Reporting Person (See Instructions) CO - -------------------------------------------------------------------------------- (1) Consists of 4,796,920 Common Units into which the 4,796,920 Subordinated Units of the Issuer beneficially owned by the reporting person are convertible. 2 CUSIP NO. 63900P 10 3 - -------------------------------------------------------------------------------- 1. Name Of Reporting Persons. I.R.S. Identification Nos. of above persons (entities only). First Reserve GP IX, L.P. IRS No. 91-208465 3 - -------------------------------------------------------------------------------- 2. Check The Appropriate Box If a Member of a Group (See Instructions) (a) [ ] (b) [X] - -------------------------------------------------------------------------------- 3. SEC Use Only - -------------------------------------------------------------------------------- 4. Source of Funds (See Instructions) OO - -------------------------------------------------------------------------------- 5. Check if Disclosure of Legal Proceedings Is Required Pursuant to Items 2(d) or (e) - -------------------------------------------------------------------------------- 6. Citizenship or Place of Organization Delaware - -------------------------------------------------------------------------------- 7. Sole Voting Power Number of Shares Bene- ------------------------------------------------------- ficially by 8. Shared Voting Power Owned by Each Reporting 4,796,920(1) Person With ------------------------------------------------------- 9. Sole Dispositive Power ------------------------------------------------------- 10. Shared Dispositive Power 4,796,920(1) - -------------------------------------------------------------------------------- 11. Amount Beneficially Owned by Each Reporting Person 4,796,920(1) - -------------------------------------------------------------------------------- 12. Check if the Aggregate Amount in Row (11) Excludes Certain Shares (See Instructions) - -------------------------------------------------------------------------------- 13. Percent of Class Represented by Amount in Row (11) 29.7% - -------------------------------------------------------------------------------- 14. Type of Reporting Person (See Instructions) PN - -------------------------------------------------------------------------------- (1) Consists of 4,796,920 Common Units into which the 4,796,920 Subordinated Units of the Issuer beneficially owned by the reporting person are convertible. 3 CUSIP NO. 63900P 10 3 - -------------------------------------------------------------------------------- 1. Name Of Reporting Persons. I.R.S. Identification Nos. of above persons (entities only). First Reserve Fund IX, L.P. IRS No. 91-208465 2 - -------------------------------------------------------------------------------- 2. Check The Appropriate Box If a Member of a Group (See Instructions) (a) [ ] (b) [X] - -------------------------------------------------------------------------------- 3. SEC Use Only - -------------------------------------------------------------------------------- 4. Source of Funds (See Instructions) OO - -------------------------------------------------------------------------------- 5. Check if Disclosure of Legal Proceedings Is Required Pursuant to Items 2(d) or (e) - -------------------------------------------------------------------------------- 6. Citizenship or Place of Organization Delaware - -------------------------------------------------------------------------------- 7. Sole Voting Power Number of Shares Bene- ------------------------------------------------------- ficially by 8. Shared Voting Power Owned by Each Reporting 4,796,920(1) Person With ------------------------------------------------------- 9. Sole Dispositive Power ------------------------------------------------------- 10. Shared Dispositive Power 4,796,920(1) - -------------------------------------------------------------------------------- 11. Amount Beneficially Owned by Each Reporting Person 4,796,920 (1) - -------------------------------------------------------------------------------- 12. Check if the Aggregate Amount in Row (11) Excludes Certain Shares (See Instructions) - -------------------------------------------------------------------------------- 13. Percent of Class Represented by Amount in Row (11) 29.7% - -------------------------------------------------------------------------------- 14. Type of Reporting Person (See Instructions) PN - -------------------------------------------------------------------------------- (1) Consists of 4,796,920 Common Units into which the 4,796,920 Subordinated Units of the Issuer beneficially owned by the reporting person are convertible. 4 CUSIP NO. 63900P 10 3 - -------------------------------------------------------------------------------- 1. Name Of Reporting Persons. I.R.S. Identification Nos. of above persons (entities only). FRC-NRP, Inc. IRS No. 77-0616402 - -------------------------------------------------------------------------------- 2. Check The Appropriate Box If a Member of a Group (See Instructions) (a) [ ] (b) [X] - -------------------------------------------------------------------------------- 3. SEC Use Only - -------------------------------------------------------------------------------- 4. Source of Funds (See Instructions) AF - -------------------------------------------------------------------------------- 5. Check if Disclosure of Legal Proceedings Is Required Pursuant to Items 2(d) or (e) - -------------------------------------------------------------------------------- 6. Citizenship or Place of Organization Delaware - -------------------------------------------------------------------------------- 7. Sole Voting Power Number of Shares Bene- ------------------------------------------------------- ficially by 8. Shared Voting Power Owned by Each Reporting 4,796,920(1) Person With ------------------------------------------------------- 9. Sole Dispositive Power ------------------------------------------------------- 10. Shared Dispositive Power 4,796,920(1) - -------------------------------------------------------------------------------- 11. Amount Beneficially Owned by Each Reporting Person 4,796,920 (1) - -------------------------------------------------------------------------------- 12. Check if the Aggregate Amount in Row (11) Excludes Certain Shares (See Instructions) - -------------------------------------------------------------------------------- 13. Percent of Class Represented by Amount in Row (11) 29.7% - -------------------------------------------------------------------------------- 14. Type of Reporting Person (See Instructions) CO - -------------------------------------------------------------------------------- (1) Consists of 4,796,920 Common Units into which the 4,796,920 Subordinated Units of the Issuer beneficially owned by the reporting person are convertible. 5 CUSIP NO. 63900P 10 3 - -------------------------------------------------------------------------------- 1. Name Of Reporting Persons. I.R.S. Identification Nos. of above persons (entities only). FRC-NRP A.V. Holdings, L.P. IRS No. 77-0616401 - -------------------------------------------------------------------------------- 2. Check The Appropriate Box If a Member of a Group (See Instructions) (a) [ ] (b) [X] - -------------------------------------------------------------------------------- 3. SEC Use Only - -------------------------------------------------------------------------------- 4. Source of Funds (See Instructions) OO, AF - -------------------------------------------------------------------------------- 5. Check if Disclosure of Legal Proceedings Is Required Pursuant to Items 2(d) or (e) - -------------------------------------------------------------------------------- 6. Citizenship or Place of Organization Delaware - -------------------------------------------------------------------------------- 7. Sole Voting Power Number of Shares Bene- ------------------------------------------------------- ficially by 8. Shared Voting Power Owned by Each Reporting 4,796,920(1) Person With ------------------------------------------------------- 9. Sole Dispositive Power ------------------------------------------------------- 10. Shared Dispositive Power 4,796,920(1) - -------------------------------------------------------------------------------- 11. Amount Beneficially Owned by Each Reporting Person 4,796,920(1) - -------------------------------------------------------------------------------- 12. Check if the Aggregate Amount in Row (11) Excludes Certain Shares (See Instructions) - -------------------------------------------------------------------------------- 13. Percent of Class Represented by Amount in Row (11) 29.7% - -------------------------------------------------------------------------------- 14. Type of Reporting Person (See Instructions) PN - -------------------------------------------------------------------------------- (1) Consists of 4,796,920 Common Units into which the 4,796,920 Subordinated Units of the Issuer beneficially owned by the reporting person are convertible. 6 CUSIP NO. 63900P 10 3 - -------------------------------------------------------------------------------- 1. Name Of Reporting Persons. I.R.S. Identification Nos. of above persons (entities only). FRC-WPP NRP Investment L.P. IRS No. 77-0616411 - -------------------------------------------------------------------------------- 2. Check The Appropriate Box If a Member of a Group (See Instructions) (a) [ ] (b) [X] - -------------------------------------------------------------------------------- 3. SEC Use Only - -------------------------------------------------------------------------------- 4. Source of Funds (See Instructions) OO,AF,BK - -------------------------------------------------------------------------------- 5. Check if Disclosure of Legal Proceedings Is Required Pursuant to Items 2(d) or (e) - -------------------------------------------------------------------------------- 6. Citizenship or Place of Organization Delaware - -------------------------------------------------------------------------------- 7. Sole Voting Power Number of Shares Bene- ------------------------------------------------------- ficially by 8. Shared Voting Power Owned by Each Reporting 4,796,920(1) Person With ------------------------------------------------------- 9. Sole Dispositive Power ------------------------------------------------------- 10. Shared Dispositive Power 4,796,920(1) - -------------------------------------------------------------------------------- 11. Amount Beneficially Owned by Each Reporting Person 4,796,920(1) - -------------------------------------------------------------------------------- 12. Check if the Aggregate Amount in Row (11) Excludes Certain Shares (See Instructions) - -------------------------------------------------------------------------------- 13. Percent of Class Represented by Amount in Row (11) 29.7% - -------------------------------------------------------------------------------- 14. Type of Reporting Person (See Instructions) PN - -------------------------------------------------------------------------------- (1) Consists of 4,796,920 Common Units into which the 4,796,920 Subordinated Units of the Issuer beneficially owned by the reporting person are convertible. 7 CUSIP NO. 63900P 10 3 - -------------------------------------------------------------------------------- 1. Name Of Reporting Persons. I.R.S. Identification Nos. of above persons (entities only). FRC-WPP GP LLC IRS No. 77-0616407 - -------------------------------------------------------------------------------- 2. Check The Appropriate Box If a Member of a Group (See Instructions) (a) [ ] (b) [X] - -------------------------------------------------------------------------------- 3. SEC Use Only - -------------------------------------------------------------------------------- 4. Source of Funds (See Instructions) OO - -------------------------------------------------------------------------------- 5. Check if Disclosure of Legal Proceedings Is Required Pursuant to Items 2(d) or (e) - -------------------------------------------------------------------------------- 6. Citizenship or Place of Organization Delaware - -------------------------------------------------------------------------------- 7. Sole Voting Power Number of Shares Bene- ------------------------------------------------------- ficially by 8. Shared Voting Power Owned by Each Reporting 4,796,920(1) Person With ------------------------------------------------------- 9. Sole Dispositive Power ------------------------------------------------------- 10. Shared Dispositive Power 4,796,920(1) - -------------------------------------------------------------------------------- 11. Amount Beneficially Owned by Each Reporting Person 4,796,920(1) - -------------------------------------------------------------------------------- 12. Check if the Aggregate Amount in Row (11) Excludes Certain Shares (See Instructions) - -------------------------------------------------------------------------------- 13. Percent of Class Represented by Amount in Row (11) 29.7% - -------------------------------------------------------------------------------- 14. Type of Reporting Person (See Instructions) CO - -------------------------------------------------------------------------------- (1) Consists of 4,796,920 Common Units into which the 4,796,920 Subordinated Units of the Issuer beneficially owned by the reporting person are convertible. 8 This statement on Schedule 13D (the "Schedule 13D") relates to the common units representing limited partner interests of Natural Resource Partners L.P., a Delaware limited partnership (the "Issuer"), into which subordinated units representing limited partner interests of the Issuer are convertible. The Issuer has its principal executive offices at 601 Jefferson St., Suite 3600, Houston, Texas 77002. ITEM 2. IDENTITY AND BACKGROUND This Schedule 13D is being filed jointly by FRC-WPP NRP Investment L.P. (the "Unit Holder"), FRC-WPP GP LLC (the "Investment GP"), FRC-NRP A.V. Holdings, L.P. ("A.V."), FRC-NRP, Inc. ("Blocker"), First Reserve Fund IX, L.P. ("Fund IX"), First Reserve GP IX, L.P. ("GP IX"), and First Reserve GP IX, Inc. ("First Reserve" and collectively, the "Reporting Persons") to report the acquisition of 4,796,920 common units representing limited partner interests of the Issuer (the "Common Units") issuable upon the conversion of the 4,796,920 subordinated units representing limited partner interests of the Issuer owned by the Unit Holder (the "Subordinated Units"). The Investment GP is the general partner of the Unit Holder. A.V. holds a majority of the limited partnership interests and member interests of the Unit Holder and the Investment GP, respectively. Blocker and GP IX are the general partners of A.V., and Fund IX is the sole stockholder of Blocker. GP IX is the general partner of Fund IX, and First Reserve is the general partner of GP IX. The Reporting Persons, by and through the holdings of the Unit Holder, directly own more than 5% of the issuable and outstanding Common Units. The Unit Holder is a Delaware limited partnership formed for the purpose of making investments in the Issuer. The Investment GP is a Delaware limited liability company, the sole purpose of which is to act as the general partner of the Unit Holder. A.V. is a Delaware limited partnership, and the Blocker is a Delaware corporation, both of which were formed as intermediary holding companies for the sole purpose of the investment in the Issuer. Fund IX is a Delaware limited partnership with a limited term of existence, the principal purpose of which is to make equity, equity-linked and debt investments in companies engaged in various energy and energy related activities. GP IX is a Delaware limited partnership, the purpose of which is to act as the general partner of Fund IX and related investment partnerships. First Reserve is a Delaware corporation and is the general partner of GP IX. The principal business of First Reserve is to be the indirect general partner of Fund IX. The principal business and office address of the Reporting Persons is One Lafayette Place, Greenwich, CT 06830. Information with respect to the executive officers and directors of First Reserve, including name, business address, present principal occupation or employment and the organization in which such employment is conducted, and their citizenship is listed on the attached Schedule I, which is incorporated in this Schedule 13D by reference. During the last five years, none of the Reporting Persons nor any executive officer or director of First Reserve has (i) been convicted in a criminal proceeding (excluding traffic violations or similar misdemeanors) or (ii) been a party to a civil proceeding or a judicial or administrative body of competent jurisdiction and as a result of such proceeding was or is subject to a judgment, decree or final order enjoining future violations of, or prohibiting or mandating activities subject to, federal or state securities laws or finding any violation with respect to such laws. 9 ITEM 3. SOURCE AND AMOUNT OF FUNDS OR OTHER CONSIDERATION The Purchase and Sale Agreement described in Item 6 of this Statement was entered into by the Unit Holder, Ark Land Company ("Seller"), a Delaware corporation, and Arch Coal, Inc., a Delaware corporation, on December 22, 2003 (the "Purchase Agreement"). Pursuant to the Purchase Agreement, the Unit Holder purchased from the Seller the Subordinated Units, which are convertible into the Common Units in the manner described in the First Amended and Restated Agreement of Limited Partnership of Natural Resource Partners L.P. dated October 17, 2002, filed as Exhibit 3.2 to the report on Form 10-K filed with the SEC by the Issuer on March 31, 2003 (File No. 001-31465), as amended by Amendment No. 1 to the First Amended and Restated Agreement of Limited Partnership of Natural Resource Partners L.P., dated December 8, 2003, filed as Exhibit 4.2 to the Registration Statement on Form S-3 filed with the SEC by the Issuer on December 23, 2003 (File No. 333-111532), both of which exhibits are incorporated herein by reference. The purchase price paid by the Unit Holder to Seller under the Purchase Agreement for the acquisition of the Subordinated Units (and the resulting acquisition of beneficial ownership of the Common Units) was $111,000,000. The sources of funds for this acquisition were (i) $25,000,000 borrowed by the Unit Holder from Southwest Bank of Texas, N.A., pursuant to a Term Loan Agreement dated December 22, 2003; and (ii) funds contributed to the Unit Holder by A.V. and its other limited partners in exchange for limited partner interests in the Unit Holder. The source of funds for the money contributed to the Unit Holder by A.V. is money contributed to the A.V. by the limited and general partners of Fund IX for the purpose of the investment by the Unit Holder in the Subordinated Units. Except in relation to its partnership interest in Fund IX, no funds were acquired directly by GP IX, or First Reserve, for their indirect acquisition of beneficial ownership of the Subordinated Units and the Common Units (collectively, the "Units"). ITEM 4. PURPOSE OF TRANSACTION The purchase of the Subordinated Units (and resulting acquisition of beneficial ownership of the Common Units) by the Unit Holder was undertaken for investment purposes. The Unit Holder also intends to participate in and influence the affairs of the Issuer through its rights to appoint directors to the board of directors of GP Natural Resource Partners LLC, which is the general partner of the general partner of the Issuer, and through the exercise of its voting rights with respect to the Units. The Unit Holder intends to review its investment in the Issuer on a continuing basis and, depending upon the price of and other market conditions relating to the Units, subsequent developments affecting the Issuer, the Issuer's business and prospects, other investment and business opportunities available to the Reporting Persons, general stock market and economic conditions, tax considerations and other factors deemed relevant, may decide to increase or decrease the size of its investment in the Issuer. ITEM 5. INTEREST IN SECURITIES OF THE ISSUER As of December 22, 2003, the Reporting Persons beneficially owned an aggregate of 4,796,920 Common Units, constituting approximately 29.7% of the 16,150,578 Common Units outstanding as of November 10, 2003.(3) (a) As of the date hereof, the Reporting Persons are the beneficial owners of Common Units (and an equivalent number of Subordinated Units convertible into such Common Units) in the numbers and percentages set forth in the table below: 10
NUMBER OF COMMON UNITS REPORTING UNITS BENEFICIALLY PERCENTAGE OF PARTY OWNED CLASS FRC-WPP NRP Investment L.P. 4,796,920(2) 29.7%(3) FRC-WPP GP LLC(1) 4,796,920(2) 29.7%(3) FRC-NRP A.V. Holdings, L.P.(1) 4,796,920(2) 29.7%(3) FRC-NRP, Inc.(1) 4,796,920(2) 29.7%(3) First Reserve Fund IX, L.P.(1) 4,796,920(2) 29.7%(3) First Reserve GP IX, L.P.(1) 4,796,920(2) 29.7%(3) First Reserve GP IX, Inc.(1) 4,796,920(2) 29.7%(3)
(1) Consists of 4,796,920 Common Units issuable upon conversion of the Subordinated Units directly held by FRC-WPP NRP Investment L.P. (the "Unit Holder"). FRC-WPP GP LLC (the "Investment GP") is the general partner of the Unit Holder. FRC-NRP A.V. Holdings, L.P. ("A.V.") holds a majority of the limited partnership interests and member interests of the Unit Holder and Investment GP, respectively. FRC-NRP, Inc. (the "Blocker") and First Reserve GP IX, L.P. ("GP IX") are the general partners of A.V., and First Reserve Fund IX, L.P. ("Fund IX") is the sole stockholder of Blocker. GP IX is the general partner of Fund IX, and First Reserve GP IX, Inc. is the general partner of GP IX. (2) Consists of 4,796,920 Common Units issuable upon conversion of the Subordinated Units directly held by the Unit Holder. (3) The percentage above is obtained (in accordance with Rule 13d-3(d)(1)(i)(D)) by using as the denominator 16,150,578 outstanding Common Units, which includes 11,353,658 Common Units currently outstanding (as indicated as outstanding as of November 10, 2003 in the Issuer's Form 10-Q filed on November 12, 2003) and 4,796,920 Common Units into which the Subordinated Units directly held by the Unit Holder are convertible, but does not include any common units into which the 6,556,738 outstanding subordinated units not beneficially owned by the Reporting Persons are convertible. (b) All of the Reporting Parties are controlled by First Reserve, and as a result of such control share the power to vote and dispose of the Units. (c) Other than the transaction described in Item 4, the Reporting Persons have not effected any transactions during the past 60 days in the Units (d) To the best knowledge of the Reporting Persons, no person other than the Reporting Persons, FRC-WPP Investment L.P. and its general and limited partners (which directly or indirectly own a limited partner interest in FRC-WPP NRP Investment L.P.) and Southwest Bank of Texas, N.A., under certain conditions set forth in the Term Loan Agreement attached as an exhibit to this Schedule 13-D, has the right to receive, or the power to direct the receipt of dividends from, or the power to direct the receipt of proceeds of the sale of the Units owned by the Reporting Persons. 11 (e) Not applicable. ITEM 6. CONTRACTS, ARRANGEMENTS, UNDERSTANDINGS OR RELATIONSHIPS WITH RESPECT TO SECURITIES OF THE ISSUER JOINT FILING AGREEMENT A Joint Filing Agreement dated January 2, 2004, by and among the Unit Holder, the Investment GP, A.V., Blocker, Fund IX, GP IX, and First Reserve has been executed by the Reporting Persons, a copy of which is attached hereto as an exhibit to this Schedule 13D and is incorporated herein by reference. PARTNERSHIP AGREEMENT OF NATURAL RESOURCE PARTNERS L.P. Certain transfer restrictions and voting rights of the Reporting Persons with respect to the Units are set forth in the First Amended and Restated Agreement of Limited Partnership of the Natural Resource Partners L.P., dated October 17, 2002, filed as Exhibit 3.2 to the report on Form 10-K filed with the SEC by the Issuer on March 31, 2003 (File No. 001-31465), as amended by Amendment No. 1 to the First Amended and Restated Agreement of Limited Partnership of Natural Resource Partners L.P., dated December 8, 2003, filed as Exhibit 4.2 to the Registration Statement on Form S-3 filed with the SEC by the Issuer on December 23, 2003 (File No. 333-111532). Both of the exhibits referenced in the foregoing sentence are incorporated herein by reference, and the description set forth above is qualified in its entirety by reference thereto. INVESTOR RIGHTS AGREEMENT On December 22, 2003, the Unit Holder, the Issuer, NRP (GP) LP, a Delaware limited partnership and general partner of the Issuer ("NRP (GP) LP"), and GP Natural Resource Partners LLC, a Delaware limited liability company and general partner of NRP (GP) LP, entered into an Investor Rights Agreement (the "Investor Rights Agreement"). The Investor Rights Agreement provides that following the conversion of the Subordinated Units into Common Units, the Unit Holder is entitled, with respect to the Common Units, to three demand registration rights and unlimited "piggyback" registrations. The Investor Rights Agreement also provides the Unit Holder with the right to appoint two directors to the board of directors of GP Natural Resource Partners LLC, one of which must be an independent director. The Investor's Rights Agreement is filed as an exhibit to this Schedule 13D and is incorporated by reference herein and the description set forth above is qualified in its entirety by reference thereto. PURCHASE AND SALE AGREEMENT On December 22, 2003, the Unit Holder, Ark Land Company, a Delaware corporation, and Arch Coal, Inc., a Delaware corporation, entered into a Purchase and Sale Agreement (the "Purchase and Sale Agreement"), pursuant to which the Unit Holder purchased 4,796,920 Subordinated Units of the Issuer from Ark Land Company for a purchase price of $111,000,000. The Purchase and Sale Agreement is filed as an exhibit to this Schedule 13D and is incorporated by reference herein and the description set forth above is qualified in its entirety by reference thereto. 12 AGREEMENT RE: SECTION 16 BLACK OUT PERIODS The Investment GP (on its own behalf and in its capacity as general partner of the Unit Holder), the limited partners of the Unit Holder, and the members of the Investment GP have an agreement with respect to acquisitions of equity securities of the Issuer during Section 16 Black Out Periods (the "Section 16 Agreement"). The Section 16 Agreement prohibits the Limited Partners, the Members, and any of their affiliates from purchasing or acquiring any "equity security" of NRP (as defined under Rule 16a-1(d) under the Securities Act) during any Section 16 Black Out Period unless such party delivers at least 10 business days' prior notice to the Investment GP or its board of managers, and the Investment GP or the board, as the case may be, determines in its reasonable discretion that such purchase or acquisition or acquisition would not result in any liability to the Unit Holder, the Limited Partners, the Investment GP or the Members in the event the Unit Holder sells any equity security of NRP during the Section 16 Black Out Period. The terms of the Section 16 Agreement are filed as an exhibit to this Schedule 13D and are incorporated by reference herein and the description set forth above is qualified in its entirety by reference thereto. ITEM 7. MATERIAL TO BE FILED AS EXHIBITS 1. Joint Filing Agreement of Schedule 13D. 2. Investor Rights Agreement dated December 22, 2003, by and among FRC-WPP NRP Investment L.P., Natural Resource Partners L.P., NRP (GP) LP, and GP Natural Resource Partners LLC. 3. Purchase and Sale Agreement, dated December 22, 2003, by and among FRC-WPP NRP Investment L.P., Ark Land Company, and Arch Coal, Inc. 4. Section 16 Agreement, by and among FRC-WPP GP LLC, FRC-WPP Investment L.P., FRC-NRP A.V. Holdings, L.P., and Robertson Coal Management, LLC. 5. Term Loan Agreement dated December 22, 2003, by and among FRC-WPP NRP Investment L.P., Southwest Bank of Texas, N.A., and the lenders named therein. 6. First Amended and Restated Agreement of Limited Partnership of Natural Resource Partners L.P., dated October 17, 2002, filed as Exhibit 3.2 to the report on Form 10-K filed with the SEC on March 31, 2003 (File No. 001-31465), as amended by Amendment No. 1 to the First Amended and Restated Agreement of Limited Partnership of Natural Resource Partners L.P., dated December 8, 2003, filed as Exhibit 4.2 to the Registration Statement on Form S-3 filed with the SEC on December 23, 2003 (File No. 333-111532), both of which exhibits are incorporated herein by reference. 13 SIGNATURE After reasonable inquiry and to the best of my knowledge and belief, I certify that the information set forth in this statement is true, complete and correct. Dated as of January 2, 2003 FRC-WPP NRP INVESTMENT L.P. FIRST RESERVE FUND IX, L.P. By: FRC-WPP GP LLC, its general partner By: First Reserve GP IX, L.P., its managing general partner By: /s/ Thomas R. Denison By: First Reserve GP IX, Inc., its ---------------------- general partner Name: Title: Manager By: /s/ Thomas R. Denison ------------------------------- Name: Title: Managing Director FRC-WPP GP LLC FIRST RESERVE GP IX, L.P. By: First Reserve GP IX, Inc., its By: /s/ Thomas R. Denison general partner ---------------------- Name: Title: Manager By: /s/ Thomas R. Denison ----------------------------------- Name: Title: Managing Director FRC-NRP A.V. HOLDINGS, L.P. FIRST RESERVE GP IX, INC. By: First Reserve GP IX, L.P., its managing general partner By: /s/ Thomas R. Denison ------------------------------------ Name: By: First Reserve GP IX, Inc., its Title: Managing Director general partner By: /s/ Thomas R. Denison ---------------------- Name: Title: Managing Director FRC-NRP, INC. By: /s/ Thomas R. Denison ---------------------- Name: Title:
14 SCHEDULE I The name, business address and present principal occupation or employment of each of the executive officers and directors of the First Reserve GP IX, Inc. are set forth below. Each such person is a citizen of the United States and does not have any other principal occupation:
Business Name Position with First Reserve GP IX, Inc. Address - ---- ---------------------------------------- -------- William E. Macaulay Chairman, CEO, Managing Director and Director (1) John A. Hill Vice Chairman and Managing Director (1) Ben A. Guill President, Managing Director and Director (2) Thomas J. Sikorski Managing Director (1) Will Honeybourne Managing Director (2) Thomas R. Denison Managing Director, General Counsel and Secretary (1)(3) Jennifer G. Zarrilli Vice President, Treasurer and Chief Financial Officer (1) and Director Alex T. Krueger....................... Vice President (1)(3)
(1) One Lafayette Place, Greenwich, CT 06830 (2) 600 Travis Street, Suite 6000, Houston, TX 77002 (3) Manager of the FRC-WPP GP LLC (general partner of FRC-WPP NRP Investment L.P.) 15 EXHIBIT INDEX
EXHIBIT NUMBER EXHIBIT DESCRIPTION - ------- ------------------- 1. Joint Filing Agreement of Schedule 13D. 2. Investor Rights Agreement dated December 22, 2003, by and among FRC-WPP NRP Investment L.P., Natural Resource Partners L.P., NRP (GP) LP, and GP Natural Resource Partners LLC. 3. Purchase and Sale Agreement, dated December 22, 2003, by and among FRC-WPP NRP Investment L.P., Ark Land Company, and Arch Coal, Inc. 4. Section 16 Agreement, by and among FRC-WPP GP LLC, FRC-WPP Investment L.P., FRC-NRP A.V. Holdings, L.P., and Robertson Coal Management, LLC. 5. Term Loan Agreement dated December 22, 2003, by and among FRC-WPP NRP Investment L.P., Southwest Bank of Texas, N.A., and the lenders named therein. 6. First Amended and Restated Agreement of Limited Partnership of the Natural Resource Partners L.P., dated October 17, 2002, filed as Exhibit 3.2 to the report on Form 10-K filed with the SEC on March 31, 2003 (File No. 001-31465), as amended by Amendment No. 1 to the First Amended and Restated Agreement of Limited Partnership of Natural Resource Partners L.P., dated December 8, 2003, filed as Exhibit 4.2 to the Registration Statement on Form S-3 filed with the SEC on December 23, 2003 (File No. 333-111532), both of which exhibits are incorporated herein by reference.
EX-99.1 3 d11617exv99w1.txt JOINT FILING AGREEMENT EXHIBIT 1 JOINT FILING AGREEMENT We, the signatories of the statement on Schedule 13D filed with respect to the Common Units of Natural Resource Partners, L.P., to which this Agreement is attached, hereby agree this 2nd day of January, 2004, that such statement is, and any amendments thereto filed by any of us will be, filed on behalf of each of us pursuant to and in accordance with the provisions of Rule 13d-1(k) of the Securities Exchange Act of 1934. FRC-WPP NRP INVESTMENT L.P. FIRST RESERVE FUND IX, L.P. By: FRC-WPP GP LLC, its general partner By: First Reserve GP IX, L.P., its managing general partner By: /s/ Thomas R. Denison By: First Reserve GP IX, Inc., its ---------------------- general partner Name: Title: Manager By: /s/ Thomas R. Denison ------------------------------- Name: Title: FRC-WPP GP LLC FIRST RESERVE GP IX, L.P. By: First Reserve GP IX, Inc., its By: /s/ Thomas R. Denison general partner ---------------------- Name: Title: Manager By: /s/ Thomas R. Denison ----------------------------------- Name: Title: FRC-NRP A.V. HOLDINGS, L.P. FIRST RESERVE GP IX, INC. By: First Reserve GP IX, L.P., its managing general partner By: /s/ Thomas R. Denison ------------------------------------ Name: By: First Reserve GP IX, Inc., its Title: general partner By: /s/ Thomas R. Denison ---------------------- Name: Title: FRC-NRP, INC. By: /s/ Thomas R. Denison ---------------------- Name: Title:
EX-99.2 4 d11617exv99w2.txt INVESTOR RIGHTS AGREEMENT EXHIBIT 2 Execution Copy INVESTOR RIGHTS AGREEMENT This Investor Rights Agreement (this "Agreement") is made and entered into effective as of December 22, 2003, by and among FRC-WPP NRP Investment L.P., a Delaware limited partnership (the "Investor"), Natural Resource Partners L.P., a Delaware limited partnership (the "Company"), NRP (GP) LP, a Delaware limited partnership ("NRP (GP) LP"), and GP Natural Resource Partners LLC, a Delaware limited liability company (the "General Partner", and collectively with the Company and NRP (GP) LP, the "NRP Parties"). RECITALS A. The Company is a limited partnership engaged in the business of owning and managing coal properties (the "Business"). NRP (GP) LP is the general partner of the Company. The General Partner is the general partner of NRP (GP) LP. B. Contemporaneously with the execution of this Agreement the Investor has purchased (the "Purchase") 4,796,920 Subordinated Units of the Company (the "Subordinated Units"). C. As a condition to the Investor's purchase of the Subordinated Units, the Company, NRP (GP) LP, and the General Partner have agreed to grant the Investor certain management and investor rights as more fully set forth herein and the Investor has agreed to be bound by the obligations set forth herein. NOW, THEREFORE, in consideration of the foregoing recitals, the mutual promises hereinafter set forth, and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereto agree as follows: 1. REPRESENTATIONS AND WARRANTIES. 1.1 Representations and Warranties by the Investor: The Investor hereby represents and warrants to the Company as follows: (a) Authorization and Execution. (i) The Investor has all requisite partnership and other power and authority (if applicable) to execute, deliver and perform its obligations under this Agreement; (ii) the execution, delivery and performance of this Agreement by the Investor and the consummation of the transactions contemplated hereby have been duly authorized by all requisite partnership and other action (if applicable) on the part of the Investor; (iii) this Agreement has been duly executed and delivered by the Investor and constitutes a legal, valid and binding obligation of the Investor, enforceable against it in accordance with its terms, except to the extent that enforceability may be limited by bankruptcy, insolvency or other similar laws affecting creditors rights generally or by general principles of equity; and (iv) no governmental consent, approval, authorization, license or clearance, or filing or registration, by the Investor, with any governmental or regulatory authority, is required in order to permit the Investor to perform its obligations under this Agreement, except for such as have been obtained. (b) Non-Contravention. The execution, delivery, and performance of and compliance with this Agreement will not, with or without the passage of time or giving of notice, (i) result in any material violation, or be in conflict with or constitute a default under (A) any certificate of limited partnership, certificate of formation, limited partnership agreement or limited liability company operating agreement of the Investor, (B) any provision of any mortgage, indenture, agreement, 1 instrument or contract to which the Investor is party or by which it is bound, or (C) of any judgment, decree, order, writ or, to its knowledge, any statute, rule or regulation applicable to the Investor which would materially and adversely affect the business, assets, liabilities, financial condition, operations or prospects of the Investor, or (ii) result in the creation of any mortgage, pledge, lien, encumbrance or charge upon any of the properties or assets of the Investor or the suspension, revocation, impairment, forfeiture or nonrenewal of any permit, license, authorization or approval applicable to the Investor, its business or operations or any of its assets or properties. 1.2 Representations and Warranties by the NRP Parties. Each of the NRP Parties represents and warrants to the Investor as follows: (a) Authorization and Execution. (i) Each NRP Party has all requisite corporate power and authority to execute, deliver and perform its obligations under this Agreement; (ii) the execution, delivery and performance of this Agreement by each NRP Party and the consummation of the transactions contemplated hereby have been duly authorized by all requisite corporate, partnership or limited liability action, as applicable, on the part of such NRP Party; (iii) this Agreement has been duly executed and delivered by each NRP Party and constitutes a legal, valid and binding obligation of such NRP Party, enforceable against it in accordance with its terms, except to the extent that enforceability may be limited by bankruptcy, insolvency or similar laws affecting creditors rights generally or by general principles of equity; and (iv) no governmental consent, approval, authorization, license or clearance, or filing or registration with any governmental or regulatory authority, is required in order to permit any NRP Party to perform its obligations under this Agreement, except for such as have been obtained. (b) Non-Contravention. The execution, delivery, and performance of and compliance with this Agreement will not, with or without the passage of time or giving of notice, (i) result in any material violation, or be in conflict with or constitute a default under (A) any certificate of limited partnership, certificate of formation, limited partnership agreement or limited liability company operating agreement of any NRP Party, (B) any provision of any mortgage, indenture, agreement, instrument or contract to which any NRP Party is party or by which it is bound, or (C) of any judgment, decree, order, writ or, to its knowledge, any statute, rule or regulation applicable to an NRP Party which would materially and adversely affect the business, assets, liabilities, financial condition, operations or prospects of such NRP Party, or (ii) result in the creation of any mortgage, pledge, lien, encumbrance or charge upon any of the properties or assets of an NRP Party or the suspension, revocation, impairment, forfeiture or nonrenewal of any permit, license, authorization or approval applicable to an NRP Party, its respective business or operations or any of its respective assets or properties. 2. MANAGEMENT RIGHTS. 2.1 The Investor shall be entitled to designate two directors of the board of directors (the "Board") of the General Partner (the "Investor Directors"), one of which shall be an "Independent Director" as such term is defined in the General Partner's Second Amended and Restated Limited Liability Company Agreement, as such agreement may be amended from time to time (the "Operating Agreement"). The Independent Director shall be subject to the approval of Compensation, Nominating and Governance Committee of the Board, which approval shall not be unreasonably withheld, delayed or conditioned. If and as necessary, the General Partner shall promptly increase the size of the Board to create the positions to be filled by the Investor Directors. The initial non-independent Investor Director shall be Alex T. Krueger. On or before January 31, 2004, the Investor shall provide the General Partner with a notice (the "Director Notice") identifying the Independent Director. The Members shall cooperate with respect to electing the directors designated by the Investor, including nominating the Investor Directors for election and voting in favor of the Investor Directors designated by the Investor (who, with 2 respect to the Independent Director, shall be the individual designated in the Director Notice, unless otherwise indicated in a subsequent notice delivered by the Investor to the General Partner). The Independent Director shall commence his or her service on the Board on or before the tenth Business Day following the General Partner's receipt of the Director Notice or on such later date as specified by the Investor therein. Each Investor Director shall hold office until his or her successor is elected pursuant to the terms of this Section 2 or until his or her earlier death, resignation or removal. 2.2 The initial term of each Investor Director shall expire at the next annual meeting of the members of the General Partner (the "Members") or an earlier special meeting of the Members called for the purpose of electing Directors to the Board. At any such meeting (the "Initial Meeting"), and at all similar, subsequent meetings of the Members held for the purpose of electing Directors to the Board, the Members shall cooperate with respect to electing the directors designated by the Investor, including nominating the Investor Directors for election and voting in favor of the Investor Directors designated by the Investor (who shall be the individuals designated herein and in the Director Notice, unless otherwise indicated in a subsequent notice delivered by the Investor to the General Partner). At the Initial Meeting and all such meetings held thereafter prior to an Investor Director Resignation Event (as defined below), the Investor Directors shall be elected to serve annual terms expiring on the date of the annual meeting of Members following such election. 2.3 The Investor may remove an Investor Director at any time, with or without cause, and the Members shall cooperate with respect to such removal, including voting in favor of such removal. In the event of the death, resignation or removal of an Investor Director, the Investor may designate a replacement Director. 2.4 The Investor Directors shall serve on the Board in accordance with the terms of the General Partner's Second Amended and Restated Limited Liability Company Agreement (the "Operating Agreement") and shall be entitled to all rights and protections provided thereunder to directors generally. The General Partner shall amend Section 7 of the Operating Agreement to reflect the Investor's rights to designate the Investor Directors and as otherwise necessary to reflect the provisions of Section 2 of this Agreement. 2.5 At the election of the Investor, the General Partner shall appoint at least one Investor Director to serve as a voting member of any executive (or similar) committee of the Board. 2.6 The Investor's right to appoint the Investor Directors shall continue so long as the Investor continues to beneficially own (as defined in Rule 13d-3 under the Exchange Act) an amount of Subordinated Units or the common units of the Company ("Common Units") issued upon conversion of the Subordinated Units or otherwise comprising either (i) at least 5% of the aggregate number of subordinated units and Common Units of the Company then issued and outstanding; or (ii) at least 20% of the Investor's holdings of the date hereof (or its equivalent following conversion of the Subordinated Units to Common Units). At such time that the Investor's holdings of interests in the Company satisfy neither of the two foregoing conditions (the "Investor Director Resignation Event"), the Investor shall promptly cause the Investor Directors to resign from the Board and the Investor's rights under this Section 2 shall terminate. 3. FIDUCIARY DUTIES. For purposes of clarification, each NRP Party agrees that, without limiting the fiduciary duties of the Investor Directors to act in the best interests of the Company, any duty of loyalty imposed under Delaware law on the Investor and its designees shall be defined and limited as provided in this Section 3. 3.1 Certain Potential Conflicts. Each NRP Party acknowledges that: 3 (a) one or more Affiliates of the Investor (other than any such Affiliate that (i) is an Affiliate of Investor solely as a result of the Purchase and transactions in connection therewith, and (ii) is also an Affiliate of an NRP Party), including First Reserve Corporation ("FRC"), First Reserve Fund IX, L.P. ("Fund IX"), other funds managed by FRC currently or in the future (collectively, including Fund IX, the "FRC Funds"), and entities in which the FRC Funds hold investments (each of the foregoing collectively referred to in this Agreement as an "FRC Affiliate") may engage in material business transactions with the Company or its subsidiaries; (b) directors, officers, and/or employees of an FRC Affiliate may serve as directors, officers and/or employees of any NRP Party or any subsidiary of any NRP Party (collectively, the "NRP Subsidiaries"); and (c) with the consent of the Board or a committee of the Board, one or more FRC Affiliates may now or in the future engage in the same or similar lines of business or other business activities as those in which the NRP Parties or NRP Subsidiaries may engage. For purposes of this Agreement, the term "Affiliate" means with respect to any person or entity, any other person or entity directly or indirectly controlling, controlled by or under common control with such person or entity. For purposes of the foregoing definition, the term "controls," "is controlled by," or "is under common control with" means the power to direct or cause the direction of the management and policies of a person or entity, whether through the ownership of voting securities, by contract or otherwise. 3.2 Limitation of Liability. To the fullest extent permitted by law, neither any FRC Affiliate nor any director, officer or employee of an FRC Affiliate who may serve as an officer, director and/or employee of an NRP Party or NRP Subsidiary shall be liable to such NRP Party or NRP Subsidiary: (a) by reason of any business decision or transaction undertaken by an FRC Affiliate which may be adverse to the interests of any NRP Party or NRP Subsidiary; (b) by reason of any activity undertaken by any FRC Affiliate or by any other person in which an FRC Affiliate may have an investment or other financial interest which is in competition with any NRP Party or NRP Subsidiary; or (c) by reason of any transaction with an FRC Affiliate or any transaction in which any FRC Affiliate shall have a financial interest, unless in each case the party seeking to assert such liability shall bear the burden of proving, by clear and convincing evidence, that such transaction was not fair to such NRP Party or NRP Subsidiary at the time it was authorized by the applicable officers, directors, or general partner of such NRP Party or NRP Subsidiary. 3.3 Competing Activities. Except as otherwise expressly provided in an agreement between the General Partner and an FRC Affiliate: (a) any FRC Affiliate and its officers, directors, agents, shareholders, members, partners, Affiliates and subsidiaries, may engage or invest in, independently or with others, any business activity of any type or description, including without limitation those that might be the same as or similar to the Company's business (without limiting the foregoing, the NRP Parties acknowledge that FRC Affiliates may from time to time compete, directly or indirectly, with the Company, and that such FRC 4 Affiliates may in its sole discretion pursue such competing business without disclosure of such competition to any NRP Party); (b) no NRP Party or NRP Subsidiary shall have any right in or to such business activities or ventures or to receive or share in any income or proceeds derived therefrom; and (c) to the extent required by applicable law in order to effectuate the purpose of this provision, the NRP Parties shall have no interest or expectancy, and specifically renounces any interest or expectancy, in any such business activities or ventures. 3.4 Corporate Opportunities. (a) A "Corporate Opportunity" shall mean an investment or business opportunity or prospective economic advantage in which an NRP Party could, but for the provisions of this Agreement, have an interest or expectancy. If any FRC Affiliate (or, except as set forth below, any of its officers, directors, agents, shareholders, members, partners, Affiliates, subsidiaries) acquires knowledge of a Corporate Opportunity, the NRP Parties shall have no interest or expectancy, and hereby renounce any interest or expectancy, in the Corporate Opportunity. Further, the FRC Affiliate (i) shall have no duty to communicate or present such a Corporate Opportunity to the NRP Parties and (ii) shall not breach any fiduciary duty as a unit holder or director of any NRP Party or otherwise by pursuing or acquiring such Corporate Opportunity for itself or not communicating information regarding such Corporate Opportunity to the NRP Parties. (b) Notwithstanding the provisions of clause 3.4(a), the NRP Parties do not renounce any interest or expectancy they may have in any Corporate Opportunity that is offered to any person who is both an officer or director of an FRC Affiliate, and an officer, director or employee of any NRP Party, if such opportunity is expressly offered to such person in his or her capacity as an officer, director or employee of an NRP Party (c) Neither the alteration, amendment or repeal of any portion of this Section 3, nor the adoption of any provision in the charter documents of any NRP Party that is inconsistent with this Section 3 shall eliminate or reduce the effect of this Section 3 in respect of any matter occurring, or any cause of action, suit or claim that, but for this Section 3, would accrue or arise prior to such alteration, amendment, repeal or adoption. 4. REGISTRATION RIGHTS. 4.1 Definitions. For purposes of this Section 4: (a) Holder. The term "Holder" means the Investor or any permitted assignee to whom rights under this Section 4 have been assigned in accordance with this Agreement. (b) Registration. The terms "register," "registered," and "registration" refer to a registration effected by preparing and filing a registration statement in compliance with the Securities Act of 1933, as amended (the "Securities Act"), and the declaration or ordering of effectiveness of such registration statement (c) Registrable Securities. The term "Registrable Securities" means (i) all Common Units of the Company issued upon conversion of the Subordinated Units held by the Investor or the conversion of any additional subordinated units of the Company hereinafter acquired by the Investor; and 5 (ii) any additional Common Units hereinafter otherwise acquired by the Investor. Notwithstanding the foregoing, "Registrable Securities" shall exclude any Registrable Securities sold by a person in a transaction in which rights under this Section 4 are not assigned in accordance with this Agreement or any Registrable Securities sold in a public offering, whether sold pursuant to Rule 144 promulgated under the Securities Act, or in a registered offering, or otherwise. (d) SEC. The term "SEC" or "Commission" means the U.S. Securities and Exchange Commission. 4.2 Demand Registration. (a) Request by Investor. If the Company shall receive a written request from Holders of a majority of the Registrable Securities (the "Requesting Holders") that the Company file a registration statement under the Securities Act covering the registration of Registrable Securities pursuant to this Section 4.2 (a "Demand Notice"), then the Company shall, within ten (10) Business Days of the receipt of such written request, give written notice of such request ("Request Notice") to all Holders and, in addition to any obligations under Section 4.3 of this Agreement, use its commercially reasonable efforts to effect, as soon as practicable, the registration under the Securities Act of all Registrable Securities that the Requesting Holders request to be registered in the Demand Notice, subject only to the limitations of this Section 4.2 and the rights of other Holders pursuant to Section 4.3. (b) Underwriting. If the Requesting Holders intend to distribute the Registrable Securities covered by its request by means of an underwritten offering, then it shall so advise the Company as a part of the Demand Notice, and the Company shall include such information in the Request Notice. In such event, the right of any Holder to include his or her Registrable Securities in such registration shall be conditioned upon such Holder's participation in such underwriting and the inclusion of such Holder's Registrable Securities in the underwriting (unless otherwise mutually agreed by the Requesting Holders and such Holder) as provided herein. The Company and all Holders proposing to distribute their securities through such underwriting shall enter into an underwriting agreement in customary form with the managing underwriter or underwriters selected for such underwriting by the Requesting Holders and reasonably acceptable to the Company. All Holders, whether or not they are participating in such offering, and the Company agree not to effect any sale, transfer, assignment, pledge or conveyance of (including, without limitation, taking any short position in) Common Units (or any securities of the Company exchangeable or convertible into Common Units) during the 180-day period beginning on the effective date of a registration statement filed by the Company (except as part of that Registration) pursuant to this Agreement. Notwithstanding any other provision of this Section 4.2 or Section 4.3, if the managing underwriter(s) determine in good faith that marketing factors require a limitation of the number of securities to be underwritten, then the Company shall so advise all Holders of Registrable Securities that would otherwise be registered and underwritten pursuant hereto, and the managing underwriter(s) may exclude shares of the Registrable Securities from the registration and the underwriting, and the number of shares that will be included in the registration and the underwriting shall be allocated, first to the Requesting Holders and to each of the Holders requesting inclusion of their Registrable Securities in such registration statement pursuant to Section 4.3. on a pro rata basis based on the total number of Registrable Securities then held by the Requesting Holders and each such Holder, and second to the Company and any other holders of Common Units that are participating in the registration (on a basis to be determined between the Company and any such other holders). (c) Maximum Number of Demand Registrations. The Company shall be obligated to effect only three (3) such registrations pursuant to this Section 4.2 (including any shelf registrations requested under this Section 4.2). A Registration shall be effected for purposes of this Section 4.2(c) when and if a registration statement is declared effective by the Securities and Exchange Commission and 6 the distribution of securities thereunder has been completed without the occurrence of any stop order or proceeding relating thereto suspending the effectiveness of the Registration. (d) Expenses. All expenses incurred in connection with any registration pursuant to this Section 4.2 (excluding underwriters' and brokers' discounts and commissions relating to Registrable Securities sold by the Holders), including without limitation all federal and "blue sky" registration, filing and qualification fees, printer's and accounting fees, fees and disbursements of counsel for the Company, and fees and expenses of one counsel to the Holders (selected by the Requesting Holders) shall be borne by the Company. Each Holder participating in a registration pursuant to this Section 4.2 shall bear such Holder's proportionate share (based on the total number of shares sold in such registration) of all discounts, commissions or other amounts payable to underwriters or brokers in connection with such offering by the Holders. Notwithstanding the foregoing, the Company shall not be required to pay for any expenses of any registration proceeding begun pursuant to this Section 4.2 if the registration request is subsequently withdrawn at the request of the Requesting Holders, unless the Requesting Holders agree that such registration constitutes the use of one (1) demand registration pursuant to this Section 4.2; provided, however, that if at the time of such withdrawal, the Requesting Holders have learned of a material adverse change in the condition, business, or prospects of the Company not known to the Requesting Holders at the time of their request for such registration and have withdrawn their request for registration with reasonable promptness after learning of such material adverse change, then the Requesting Holders shall not be required to pay any of such expenses and such registration shall not constitute the use of a demand registration pursuant to this Section 4.2. (e) Deferral. Notwithstanding the foregoing, if the General Partner shall furnish to the Requesting Holders a certificate signed by the President or Chief Executive Officer of the General Partner stating that, in the good faith judgment of the Conflicts Committee of the Board, it would be in the best interests of the Company and its limited partners for such registration statement not to be filed, the Company shall have the right to defer such filings or the effectiveness thereof and, by notice to the Requesting Holders, to require the Requesting Holders to withdraw their Demand Notice and to refrain from delivering another Demand Notice for a period of not more than one-hundred eighty (180) days after receipt of the request of the initial Demand Notice; provided, however, that the Company may not utilize this right more than once in any twelve (12) month period. 4.3 Piggyback Registrations. The Company shall promptly notify all Holders of Registrable Securities in writing (a "Piggyback Notice") prior to filing any registration statement under the Securities Act for purposes of effecting a public offering of securities of the Company (including, but not limited to, registration statements relating to secondary offerings of securities of the Company, whether pursuant to Section 4.2 or otherwise, but excluding registration statements relating to any employee benefit plan or a corporate reorganization, combination or merger) and will afford each such Holder an opportunity to include in such registration statement all or any part of the Registrable Securities then held by such Holder. Each Holder desiring to include in any such registration statement all or any part of the Registrable Securities held by such Holder shall within ten (10) days after receipt of the Piggyback Notice, so notify the Company in writing, and in such notice shall inform the Company of the number of Registrable Securities such Holder wishes to include in such registration statement. If a Holder decides not to include all of its Registrable Securities in any such registration statement, such Holder shall nevertheless continue to have the right to include any Registrable Securities in any subsequent registration statement or registration statements as may be filed by the Company with respect to offerings of its securities, all upon the terms and conditions set forth herein. (a) Underwriting. If a registration statement referred to in the Piggyback Notice is for an underwritten offering, then the Company shall so advise the Holders of Registrable Securities. In such event, the right of any such Holder to include Registrable Securities in such a Registration pursuant 7 to this Section 4.3 shall be conditioned upon such Holder's participation in such underwriting and the inclusion of such Holder's Registrable Securities in the underwriting as provided herein. All Holders proposing to distribute their Registrable Securities through such underwriting shall enter into an underwriting agreement in customary form with the managing underwriter or underwriters selected for such underwriting. Notwithstanding any other provision of this Agreement, if the managing underwriter(s) determine(s) in good faith that marketing factors require a limitation of the number of shares to be underwritten, then the Company shall so advise all Holders of Registrable Securities that would otherwise be registered and underwritten pursuant hereto, and the managing underwriter(s) may exclude shares of the Registrable Securities from the registration and the underwriting, and subject to the following sentence, the number of Registrable Securities that will be included in the registration and the underwriting shall be allocated among the Holders as set forth in Section 4.2. If the underwriting is not pursuant to Section 4.2, the number of Registrable Securities that will be included in the registration and the underwriting shall be allocated first to the Company and to any other holder of the Company's securities who has exercised a right to demand the registration of its securities; and second, to each Holder and any other holders of Common Units that have requested to participate in the registration, including pursuant to contractual rights to participate in such registration, on a pro rata basis based on the total number of Registrable Securities or other Common Units requested to be included in such registration by each such Holder and each such other holder. If any Holder disapproves of the terms of any such underwriting, such Holder may elect to withdraw therefrom by written notice to the Company and the underwriter(s), delivered at least ten (10) Business Days prior to the effective date of the registration statement. Any Registrable Securities excluded or withdrawn from such underwriting shall be excluded and withdrawn from the registration. (b) Expenses. All expenses incurred in connection with a registration pursuant to this Section 4.3 (excluding underwriters' and brokers' discounts and commissions relating to Registrable Securities sold by the Holders), including, without limitation all federal and "blue sky" registration, filing and qualification fees, printers' and accounting fees, fees and disbursements of one counsel for Holders (selected by Holders of a majority of Registrable Securities included in such registration), and fees and disbursements of counsel for the Company, shall be borne by the Company. (c) Not Demand Registration. Registration pursuant to this Section 4.3 shall not be deemed to be a demand registration as described in Section 4.2, unless the Investor specifically elects otherwise in writing. Except as otherwise provided herein, there shall be no limit on the number of times the Holders may request registration of Registrable Securities under this Section 4.3. (d) Withdrawal Right. Notwithstanding any provision contained in this Section 4.3 to the contrary, the Company shall have the right to terminate, withdraw, delay or postpone any Registration Statement initiated by it (other than in response to a Demand Notice under Section 4.2) prior to the effectiveness of such Registration Statement whether or not any Holder has elected to include his Registrable Securities in such Registration Statement. 4.4 Obligations of the Company. Whenever required to effect the registration of any Registrable Securities under this Agreement the Company shall, as expeditiously as reasonably possible: (a) Registration Statement. Prepare and file with the SEC a registration statement (including a "shelf registration statement" pursuant to Rule 415 on Form S-3, if eligible and requested by the Holders) with respect to such Registrable Securities and use its commercially reasonable efforts to cause such registration statement to become effective and to keep any such registration statement effective for the shorter of (i) in the case of any registration other than one pursuant to Rule 415 on Form S-3, a period of two years, or in the case of any other registration, a period of 180 days (the "Registration 8 Period"), as may be extended pursuant to clause (f) below, or (ii) until all of such Registrable Securities have been sold. (b) Amendments and Supplements. Prepare and file with the SEC such amendments and supplements to such registration statement and the prospectus used in connection with such registration statement as may be necessary to comply with the provisions of the Securities Act with respect to the disposition of all securities covered by such registration statement. (c) Prospectuses. Furnish to the Holders such number of copies of a prospectus, including a preliminary prospectus, in conformity with the requirements of the Securities Act, and such other documents as they may reasonably request in order to facilitate the disposition of the Registrable Securities owned by them that are included in such registration. (d) Blue Sky. Use its commercially reasonable to register and qualify the securities covered by such registration statement under such other securities or Blue Sky laws of such jurisdictions as shall be reasonably requested by the Holders; provided that the Company shall not be required in connection therewith or as a condition thereto to qualify to do business or to file a general consent to service of process in any such states or jurisdictions. (e) Underwriting. In the event of any underwritten public offering, enter into and perform its obligations under an underwriting agreement in usual and customary form (including indemnification provisions), with the managing underwriter(s) of such offering. Each Holder participating in such underwriting shall also enter into and perform its obligations under such an agreement. (f) Notification. Notify each Holder of Registrable Securities covered by such registration statement at any time when a prospectus relating thereto is required to be delivered under the Securities Act of the happening of any event as a result of which the prospectus included in such registration statement, as then in effect, includes an untrue statement of a material fact or omits to state a material fact required to be stated therein or necessary to make the statements therein not misleading in the light of the circumstances then existing; provided, however, that the Registration Period shall be deemed extended by the number of days commencing on and including the date of such notice and ending on and including the date when the Company made available to each such Holder an amended or supplemented prospectus. (g) Opinion and Comfort Letter. Furnish, at the request of any Holder requesting registration of Registrable Securities or of any underwriter in connection herewith, on the date or dates requested by such Holder, (i) an opinion, dated as of such date, of the counsel representing the Company for the purposes of such registration, in form and substance as is customarily given to underwriters in an underwritten public offering, addressed to the underwriters, if any, and to the Holders requesting registration of Registrable Securities and (ii) a "comfort" letter dated as of such date, from the independent certified public accountants of the Company, in form and substance as is customarily given by independent certified public accountants to underwriters in an underwritten public offering, addressed to the underwriters, if any, and to the Holders requesting registration of Registrable Securities. 4.5 Furnish Information. It shall be a condition precedent to the obligations of the Company to take any action pursuant to Sections 4.2 or 4.3 that the selling Holders shall furnish to the Company such information regarding themselves, the Registrable Securities held by them, and the intended method of disposition of such securities as shall be required to timely effect the Registration of their Registrable Securities. 9 4.6 Indemnification. In the event any Registrable Securities are included in a registration statement under Sections 4.2 or 4.3: (a) By the Company. To the extent permitted by law, the Company will indemnify and hold harmless each Holder, the partners, officers and directors of each Holder, any underwriter (as determined in the Securities Act) for such Holder and each person, if any, who controls such Holder or underwriter within the meaning of the Securities Act or the Securities Exchange Act of 1934, as amended, (the "Exchange Act"), against any losses, claims, damages, or liabilities (joint or several) to which they may become subject under the Securities Act, the Exchange Act or other federal or state law, insofar as such losses, claims, damages, or liabilities (or actions in respect thereof) arise out of or are based upon any of the following statements, omissions or violations (collectively a "Violation"): (i) any untrue statement or alleged untrue statement of a material fact contained in such registration statement, including any preliminary prospectus or final prospectus contained therein or any amendments or supplements thereto; (ii) the omission or alleged omission to state in such registration statement a material fact required to be stated therein, or necessary to make the statements therein not misleading, or with respect to any prospectus contained in such registration statement, to make the statements therein, in light of the circumstances under which they were made, not misleading; or (iii) any violation or alleged violation by the Company of the Securities Act, the Exchange Act, any federal or state securities law or any rule or regulation promulgated under the Securities Act, the Exchange Act or any federal or state securities law in connection with the offering covered by such registration statement; and the Company will reimburse each such Holder, partner, officer or director, underwriter or controlling person for any legal or other expenses reasonably incurred by it, as incurred, in connection with investigating or defending any such loss, claim, damage, liability or action; provided, however, that the indemnity agreement contained in this subsection 4.6(a) shall not apply to amounts paid in settlement of any such loss, claim, damage, liability or action if such settlement is effected without the consent of the Company, which consent shall not be unreasonably withheld, nor shall the Company be liable in any such case for any such loss, claim, damage, liability or action to the extent that it arises out of or is based upon a Violation which occurs in reliance upon and in conformity with written information furnished expressly for use in connection with such registration statement, including any preliminary prospectus or final prospectus or any amendment or supplement thereto, by such Holder, partner, officer, director, underwriter or controlling person of such Holder. (b) By Selling Holders. To the extent permitted by law, each selling Holder will indemnify and hold harmless the Company, each of its directors, each of its officers who have signed the registration statement, each person, if any, who controls the Company within the meaning of the Securities Act, any underwriter and any other Holder selling securities under such registration statement or any of such other Holder's partners, directors or officers or any person who controls such Holder within the meaning of the Securities Act or the Exchange Act, against any losses, claims, damages or liabilities (joint or several) to which the Company or any such director, officer, controlling person, underwriter or other such Holder, partner or director, officer or controlling person of such other Holder may become subject under the Securities Act, the Exchange Act or other federal or state law, insofar as such losses, claims, damages or liabilities (or actions in respect thereto) arise out of or are based upon any Violation, in each case to the extent (and only to the extent) that such Violation occurs in reliance upon and in conformity with written information furnished by such Holder expressly for use in connection with such 10 registration statement, including any preliminary prospectus or final prospectus or any amendment or supplement thereto; and each such Holder will reimburse any legal or other expenses reasonably incurred by the Company or any such director, officer, controlling person, underwriter or other Holder, partner, officer, director or controlling person of such other Holder in connection with investigating or defending any such loss, claim, damage, liability or action: provided, however, that the indemnity agreement contained in this subsection 4.6(b) shall not apply to amounts paid in settlement of any such loss, claim, damage, liability or action if such settlement is effected without the consent of the Holder, which consent shall not be unreasonably withheld; and provided, further, that the total amounts payable in indemnity by a Holder under this Section 4.6(b) in respect of any Violation shall not exceed the net proceeds received by such Holder in the registered offering out of which such Violation arises. (c) Notice. Promptly after receipt by an indemnified party under this Section 4.6 of notice of the commencement of any action (including any governmental action), such indemnified party will, if a claim in respect thereof is to be made against any indemnifying party under this Section 4.6, deliver to the indemnifying party a written notice of the commencement thereof and the indemnifying party shall have the right to participate in, and, to the extent the indemnifying party so desires, jointly with any other indemnifying party similarly noticed, to assume the defense thereof with counsel mutually satisfactory to the parties; provided, however, that an indemnified party shall have the right to retain its own counsel, with the fees and expenses to be paid by the indemnifying party, if representation of such indemnified party by the counsel retained by the indemnifying party would be inappropriate due to actual or potential conflict of interests between such indemnified party and any other party represented by such counsel in such proceeding, provided that all Holders shall collectively be entitled to only one such counsel. The failure to deliver written notice to the indemnifying party within a reasonable time of the commencement of any such action shall relieve such indemnifying party of liability to the indemnified party under this Section 4.6 to the extent the indemnifying party is prejudiced as a result thereof, but the omission so to deliver written notice to the indemnified party will not relieve it of any liability that it may have to any indemnified party otherwise than under this Section 4.6. (d) Defect Eliminated in Final Prospectus. The foregoing indemnity agreements of the Company and Holders are subject to the condition that, insofar as they relate to any Violation made in a preliminary prospectus but eliminated or remedied in the amended prospectus on file with the SEC at the time the registration statement in question becomes effective or the amended prospectus filed with the SEC pursuant to SEC Rule 424(b) (the "Final Prospectus"), such indemnity agreement shall not inure to the benefit of any person if a copy of the Final Prospectus was timely furnished to the indemnified party and was not furnished to the person asserting the loss, liability, claim or damage at or prior to the time such action is required by the Securities Act. (e) Contribution. In order to provide for just and equitable contribution to joint liability under the Securities Act in any case in which either (i) any Holder exercising rights under this Agreement, or any controlling person of any such Holder, makes a claim for indemnification pursuant to this Section 4.6 but it is judicially determined (by the entry of a final judgment or decree by a court of competent jurisdiction and the expiration of time to appeal or the denial of the last right of appeal) that such indemnification may not be enforced in such case notwithstanding the fact that this Section 4.6 provides for indemnification in such case, or (ii) contribution under the Securities Act may be required on the part of any such selling Holder or any such controlling person in circumstances for which indemnification is provided under this Section 4.6; then, and in each such case, the Company and such Holder will contribute to the aggregate losses, claims, damages or liabilities to which they may be subject (after contribution from others) in such proportion as is appropriate to reflect the relative fault of the indemnifying party on the one hand and of the indemnified party on the other in connection with the statements or omissions which resulted in such loss, claim, damage, liability, action or threatened action as well as any other relevant equitable considerations. The relative fault of the indemnifying party and of 11 the indemnified party shall be determined by reference to, among other things, whether any statement or omission, including any untrue or alleged untrue statement of a material fact or the omission or alleged omission to state a material fact relates to information supplied by the indemnifying party or by the indemnified party and the parties' relative intent, knowledge, access to information and opportunity to correct or prevent such statement or omission; provided, however, that the maximum amount of liability in respect of such contribution shall be limited, in the case of each seller of Registrable Securities, to an amount equal to the net proceeds actually received by such seller from the sale of Registrable Securities effected pursuant to such registration. The amount paid or payable by a party under this Section 4(e) as a result of the loss, claim, damage, liability, action or threatened action referred to above shall be deemed to include any legal or other fees, disbursements and expenses reasonably incurred by such party in connection with any investigation or proceeding. The parties hereto agree that it would not be just and equitable if contributions pursuant to this Section 4(e) were to be determined by pro rata allocation or by any method of allocation which does not take account of the equitable considerations referred to in the first and second sentences of this Section 4(e). No person guilty of fraudulent misrepresentation (within the meaning of Section 11(f) of the Securities Act) shall be entitled to contribution from any person who was not guilty of such fraudulent misrepresentation. (f) Survival. The obligations of the Company and Holders under this Section 4.6 shall survive until the one year anniversary of the expiration of all applicable statutes of limitation or extensions of such statutes. 4.7 Termination of the Company's Obligations. The Company shall have no obligations pursuant to Sections 4.2 or 4.3 with respect to any Registrable Securities proposed to be sold by a Holder in a registration pursuant to Section 4.2 or 4.3 if, in the reasonable opinion of counsel to the Company, addressed to such Holder, all such Registrable Securities held by such Holder could be sold under Rule 144 promulgated under the Act in a single transaction. 4.7 No Registration Rights to Third Parties. Without the prior written consent of the Holders of a majority of the Registrable Securities, the Company covenants and agrees that it shall not grant, or cause or permit to be created, for the benefit of any person or entity any registration rights of any kind (whether similar to the demand or "piggyback" registration rights described in this Section 4, or otherwise) relating to Common Units or any other voting securities of the Company, if the granting or creation of such rights would interfere with the Company's ability to perform any of its obligations under this Agreement, or in any other way materially impair the rights of Holders of Registrable Securities. 4.9 Rule 144 Reporting; S-3 Eligibility. With a view to making available the benefits of certain rules and regulations of the Commission which may at any time permit the sale of "Restricted Securities" (used herein as defined in Rule 144 under the Securities Act) to the public without registration, and to be eligible to use Form S-3, the Company agrees to: (a) make and keep public information available, as those terms are understood and defined in Rule 144 under the Securities Act, at all times during which the Company is subject to the reporting requirements of the Exchange Act; (b) file with the Commission in a timely manner all reports and other documents required of the Company under the Securities Act and the Exchange Act (at all times during which the Company is subject to such reporting requirements); and (c) so long as any Holders of Registrable Securities owns any Restricted Securities, to furnish to such Holder forthwith upon request a written statement by the Company as to its compliance with the reporting requirements of said Rule 144 and with regard to the Securities Act and the Exchange 12 Act (at all times during which the Company is subject to such reporting requirements), a copy of the most recent annual or quarterly report of the Company, and such other reports and documents of the Company and other information in the possession of or reasonably obtainable by the Company as such Holder of the Registrable Securities may reasonably request in availing itself of any rule or regulation of the Commission allowing such Holder to sell any such securities without registration. 4.10 Maintenance of Listed Status The Company shall use its commercially reasonable efforts to maintain its status as a listed company on the New York Stock Exchange as such listing exists as of the date hereof, or, with the consent of the Holders of a majority of the Registrable Securities, which consent shall not be withheld unreasonably, such other national stock exchange or automated quotation system as the Company may deem advisable. In the event the Company should be de-listed, for whatever reason, the Company agrees to use its commercially reasonable efforts to regain its status as a listed company on the New York Stock Exchange, or such exchange or quotation system, as the case may be. 5. ASSIGNMENT, AMENDMENT AND TERMINATION. 5.1 Assignment. Notwithstanding anything herein to the contrary: (a) Management Rights. The rights under Section 2 may be assigned to any Affiliate of Investor. (b) Registration Rights. The registration rights under Section 4 hereof may be assigned (i) to any Affiliate of Investor, (ii) to the limited partners of Investor in connection with a liquidating distribution from Investor, or (iii) to a party that purchases at least 750,000 Subordinated Units or Common Units from the Investor or other Holder; provided, however, that no party may be assigned any of the foregoing rights unless (i) the Company is given written notice by the assigning party at the time of such assignment stating the name and address of the assignee and identifying the securities of the Company as to which the rights in question are being assigned, and (ii) prior to the effectiveness of such assignment, any such assignee shall have agreed in writing to be subject to all the terms and conditions of this Agreement, including without limitation the provisions of Section 4.5 and this Section 6; and provided, further, that no such assignment shall have the effect of increasing the maximum number of registrations the Company shall be required to effect under Section 4.2, as set forth in Section 4.2(c). Any assignment in violation of this Section 5.1(a) shall be null and void. (c) Other Rights. Any other rights under this Agreement may be assigned only with the consent of both the Investor and the General Partner. 5.2 Amendment of Rights. Any provision of this Agreement may be amended and the observance thereof may be waived (either generally or in a particular instance and either retroactively or prospectively) with the written consent of each party hereto. 6. GENERAL PROVISIONS. 6.1. Notices. Except as may be otherwise provided herein, all notices, requests, waivers and other communications made pursuant to this Agreement shall be in writing and shall be conclusively deemed to have been duly given (a) when hand delivered to the other party; (b) when received when sent by facsimile at the address and number set forth below; (c) three Business Days after deposit in the U.S. mail with first class or certified mail receipt requested postage prepaid and addressed to the other party as set forth below; or (d) the next Business Day after deposit with a national overnight delivery service, postage prepaid, addressed to the parties as set forth below with next-business-day delivery guaranteed, provided that the sending party receives a confirmation of delivery from the delivery service provider. 13 To the Investor: FRC-WPP NRP Investment L.P. c/o First Reserve Corporation One Lafayette Place Greenwich, Connecticut 06830 Attn: Thomas R. Denison Fax Number: (303) 661-6729 With a copy to: Gibson, Dunn & Crutcher LLP 1801 California St., Suite 4100 Denver, Colorado 80202 Attn: Beau Stark Fax Number: (303) 313-2839 To any NRP Party GP Natural Resource Partners LLC 601 Jefferson, Suite 3600 Houston, Texas 77002 Attn: Wyatt L. Hogan Fax Number: (713) 751-7563 With a copy to: Vinson & Elkins LLP 1001 Fannin, Suite 2300 Houston, Texas 77002 Attn: Dan Fleckman Fax Number: (713) 615-5859 Each person making a communication hereunder by facsimile shall promptly confirm by telephone to the person to whom such communication was addressed each communication made by it by facsimile pursuant hereto but the absence of such confirmation shall not affect the validity of any such communication. A party may change or supplement the addresses given above, or designate additional addresses, for purposes of this Section 6.1 by giving the other party written notice of the new address in the manner set forth above. 6.2 Entire Agreement. This Agreement, together with all the Exhibits hereto, constitutes and contains the entire agreement and understanding of the parties with respect to the subject matter hereof and supersedes any and all prior negotiations, correspondence, agreements, understandings, duties or obligations between the parties respecting the subject matter hereof. 6.3 Governing Law. This Agreement shall be governed by and construed exclusively in accordance with the internal laws of the State of Delaware, excluding that body of law relating to conflict of laws and choice of law. 6.4 Severability. If one or more provisions of this Agreement are held to be unenforceable under applicable law, then such provision(s) shall be excluded from this Agreement and the balance of 14 this Agreement shall be interpreted as if such provision(s) were so excluded and shall be enforceable in accordance with its terms. 6.5 Third Parties. Except as provided in Section 3 hereof, nothing in this Agreement, express or implied, is intended to confer upon any person, other than the parties hereto and their permitted successors and assigns, any rights or remedies under or by reason of this Agreement. 6.6 Successors and Assigns. Subject to the provisions of Section 5.1, the provisions of this Agreement shall inure to the benefit of, and shall be binding upon, the successors and permitted assigns of the parties hereto. 6.7 Captions. The captions to sections of this Agreement have been inserted for identification and reference purposes only and shall not be used to construe or interpret this Agreement. 6.8 Counterparts. This Agreement may be executed in counterparts, each of which shall be deemed an original, but all of which together shall constitute one and the same instrument. 6.9 Arbitration. (a) Except as set forth in Section 6.9(b), any controversy, dispute, or claim arising out of, in connection with, or in relation to, the interpretation, performance or breach of this Agreement, including, without limitation, the validity, scope, and enforceability of this section, may at the election of any party hereto be solely and finally settled by arbitration conducted in Houston, Texas, by and in accordance with the then existing rules for commercial arbitration of the American Arbitration Association, or any successor organization by a single arbitrator. Judgment upon any award rendered by the arbitrator(s) may be entered by the State or Federal Court having jurisdiction thereof. Any of the parties may demand arbitration by written notice to the other and to the American Arbitration Association ("Demand for Arbitration"). If any Demand for Arbitration pursuant to this section is not made within 180 days from the date that the dispute upon which the demand is based arose, the complaining party shall not have the right to require arbitration hereunder. The parties intend that this agreement to arbitrate be valid, enforceable and irrevocable. In the absence of an arbitration election above, each party hereto hereby irrevocably submits and consents to the nonexclusive jurisdiction of the State and Federal Courts located in the State of Texas with respect to any action or proceeding arising out of this Agreement or any matter arising therefrom or relating thereto. In any such action or proceeding, each party hereto waives personal service of the summons and complaint or other process and papers therein and agrees that the service thereof may be made by mail directed to such party at its chief executive office, service to be deemed complete seven (7) days after mailing, or as permitted under the rules of either of said Courts. (b) Neither any NRP Party nor the Investor shall have any right to make an arbitration election pursuant to Section 6.9(a) with respect to any action or proceeding arising out of Sections 2, 3 or 4 of this Agreement if and to the extent it involves a claim for injunctive relief, and the provisions of Section 6.9(a) shall not apply thereto. With respect to such matters, each party hereto hereby irrevocably submits and consents to the nonexclusive jurisdiction of the State and Federal Courts located in the State of Texas with respect to any action or proceeding arising out of this Agreement or any matter arising therefrom or relating thereto. In any such action or proceeding, each party hereto waives personal service of the summons and complaint or other process and papers therein and agrees that the service thereof may be made by mail directed to such party at its chief executive office, service to be deemed complete seven (7) days after mailing, or as permitted under the rules of either of said Courts. 6.10 Specific Performance. Each NRP Party, on the one hand, and the Investor, on the other hand, acknowledges and agrees that irreparable injury would occur in the event any of the provisions of 15 Sections 2, 3 or 4 were not performed in accordance with their specific terms or were otherwise breached and that such injury would be not be compensable in damages. It is accordingly agreed that the parties hereto shall be entitled to specific enforcement of the terms of Sections 2 (Management Rights), 3 (Fiduciary Duties) and 4 (Registration Rights), and no party will take any action, directly or indirectly, in opposition to the other party seeking relief on the grounds that any other remedy or relief is available at law or in equity. 6.11 The Omnibus Agreement. The parties hereto agree that neither the Investor nor any FRC Affiliate is or shall be considered an "Affiliate" of any "Sponsor", as such terms are defined in the October 17, 2002 Omnibus Agreement (the "Omnibus Agreement ") by and among Arch Coal, Inc., a Delaware corporation, Ark Land Company, a Delaware corporation, Western Pocahontas Properties Limited Partnership, a Delaware limited partnership, Great Northern Properties Limited Partnership, a Delaware limited partnership, New Gauley Coal Corporation, a West Virginia corporation, Robertson Coal Management LLC, a Delaware limited liability company, each NRP Party, and NRP (Operating) LLC, a Delaware limited liability company, and as such neither the Investor nor any FRC Affiliate is bound or restricted by any of the terms or provisions thereof. [INTENTIONALLY BLANK - NEXT PAGE IS THE SIGNATURE PAGE] 16 IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the date and year first above written. FRC-WPP NRP Investment L.P. By: FRC-WPP GP LLC, its general partner By: ---------------------------------- Name: Title: Natural Resource Partners L.P. By: NRP (GP) LP, its general partner By: GP Natural Resource Partners LLC, its general partner By: ------------------------------ Name: Title: NRP (GP) LP By: GP Natural Resource Partners LLC, its general partner By: ---------------------------------- Name: Title: GP Natural Resource Partners LLC By: ----------------------------------------- Name: Title: SIGNATURE PAGE FOR INVESTOR RIGHTS AGREEMENT EX-99.3 5 d11617exv99w3.txt PURCHASE AND SALE AGREEMENT EXHIBIT 3 EXECUTION COPY ================================================================================ PURCHASE AND SALE AGREEMENT ================================================================================ By and Among ARK LAND COMPANY ARCH COAL, INC. and FRC-WPP NRP INVESTMENT L.P. ---------- Covering the Acquisition of 4,796,920 SUBORDINATED UNITS of NATURAL RESOURCE PARTNERS L.P. ---------- December 22, 2003 TABLE OF CONTENTS 1. Definitions..............................................................................................1 2. The Transactions.........................................................................................4 (a) Sale of the Seller's Subordinated Units...........................................................4 (b) Consideration.....................................................................................4 (c) The Closing.......................................................................................4 (d) Actions at the Closing............................................................................4 3. Representations and Warranties Concerning the Transaction................................................4 (a) Representations and Warranties Concerning Each of the Seller and the Parent.......................4 (b) Representations and Warranties Concerning the Buyer...............................................6 4. Remedies for Breaches of this Agreement..................................................................7 (a) Survival of Representations and Warranties........................................................7 (b) Indemnification Provisions for Benefit of the Buyer...............................................7 (c) Indemnification Provisions for Benefit of the Seller..............................................8 (d) Matters Involving Third Parties...................................................................9 (e) Determination of Amount of Adverse Consequences...................................................9 (f) Compliance with Express Negligence Rule..........................................................10 (g) Tax Treatment of Indemnity Payments..............................................................10 5. Miscellaneous...........................................................................................10 (a) Disclosure.......................................................................................10 (b) No Third-Party Beneficiaries.....................................................................10 (c) Succession and Assignment........................................................................10 (d) Counterparts.....................................................................................10 (e) Notices..........................................................................................11 (f) Governing Law....................................................................................11 (g) Remedy and Waiver................................................................................12 (h) Further Assurances...............................................................................12 (i) Amendments and Waivers...........................................................................12 (j) Severability.....................................................................................12 (k) Transaction Expenses.............................................................................12 (l) Construction.....................................................................................12 (m) Entire Agreement.................................................................................13
EXHIBITS Exhibit A: Secretary's Certificate of Seller Exhibit B: Secretary's Certificate of Parent Exhibit C: Certificate of Members of General Partner of Buyer i PURCHASE AND SALE AGREEMENT THIS PURCHASE AND SALE AGREEMENT (this "Agreement") dated as of December 22, 2003 is by and among Ark Land Company, a Delaware corporation (the "Seller"), Arch Coal, Inc., a Delaware corporation and sole shareholder of Seller (the "Parent"), and FRC-WPP NRP Investment L.P., a Delaware limited partnership (the "Buyer"). The Seller, the Parent and the Buyer are sometimes referred to collectively herein as the "Parties" and individually as a "Party." RECITALS WHEREAS, the Seller entered into the First Amended and Restated Partnership Agreement of Natural Resource Partners L.P., a Delaware Limited Partnership ("NRP"), dated as of October 17, 2002 and as amended to date (the "MLP Agreement"), pursuant to which the Seller became a limited partner of NRP and the owner of, among other interests, 4,796,920 Subordinated Units (as defined in the MLP Agreement) of NRP (the "Seller's Subordinated Units"), as evidenced by a Certificate Evidencing Subordinated Units Representing Limited Partner Interests in Natural Resource Partners L.P., Numbered Certificate No. 4 (the "Certificate"); and WHEREAS, subject to the terms and conditions set forth in this Agreement, the Seller desires to sell to the Buyer, and the Buyer desires to purchase from the Seller, the Seller's Subordinated Units. NOW, THEREFORE, in consideration of the premises and of the mutual representations, warranties, covenants and agreements herein contained, the Parties hereby agree as follows: AGREEMENT 1. Definitions. Unless otherwise provided for herein, the following terms have the following meanings: "Adverse Consequences" means all actions, suits, proceedings, hearings, investigations, charges, complaints, claims, damages, demands, injunctions, judgments, orders, decrees, rulings, damages, dues, penalties, fines, costs, amounts paid in settlement, liabilities, obligations, Taxes, Encumbrances, losses, expenses, payments and fees of every type and nature whatsoever, legal or equitable, or any item similar or related to the foregoing, including the reasonable cost of the investigation and preparation of defense, court costs and attorneys' fees and expenses, but excluding any punitive, exemplary, special, indirect, remote, speculative or consequential damages (including any damages on account of lost profit or opportunities). "Affiliate" has the meaning set forth in Rule 12b-2 of the regulations promulgated under the Securities Exchange Act of 1934, as amended. "Agreement" has the meaning set forth in the preface. "Buyer" has the meaning set forth in the preface. 1 "Buyer Indemnitees" means, collectively, the Buyer and its Affiliates and each of their respective officers (or natural persons performing similar functions), directors (or natural persons performing similar functions), employees, agents and representatives to the extent acting in such capacity. "Certificate" has the meaning set forth in the Recitals. "Closing" has the meaning set forth in Section 2(c). "Closing Date" has the meaning set forth in Section 2(c). "Code" means the Internal Revenue Code of 1986, as amended, or any successor Law. "Encumbrance" means any mortgage, pledge, lien, encumbrance, charge or security interest. "Governmental Authority" means any court, tribunal, arbitrator, authority, agency, commission, department, board, bureau, official, or other regulatory, administrative or governmental authority or instrumentality of the United States, any foreign country, or domestic or foreign state, county, city, local or other political subdivision. "GP" means NRP (GP) LP, a Delaware limited partnership and the general partner of NRP. "GP LLC Purchase Agreement" means that certain purchase agreement by and among Robertson Coal Management LLC, a Delaware limited liability company, Seller and the Parent, dated December 22, 2003. "Indemnified Party" has the meaning set forth in Section 4(d). "Indemnifying Party" has the meaning set forth in Section 4(d). "Laws" means any applicable federal, state, municipal, local, foreign, international, multinational or administrative law, constitution, statute, code, ordinance, regulation, rule, injunction, judgment, order, decree, ruling, charge, or other restriction of any kind or nature whatsoever, including any public policy, judgment or principle of common law, of any applicable Governmental Authority. "Limited Partner" has the meaning set forth in the MLP Agreement. "Limited Partnership Interest" means the limited partnership interest of a Limited Partner in NRP, including rights to distributions (liquidating or otherwise), allocations, information, and to consent or approve (subject to the limitations set forth in the MLP Agreement). "MLP Agreement" has the meaning set forth in the Recitals. 2 "NRP (GP) LP Purchase Agreement" means that certain purchase agreement by and among NRP Investment L.P. a Delaware limited partnership, the Seller and the Parent, dated December 22, 2003. "Organizational Documents" means the articles of incorporation, certificate of incorporation, charter, bylaws, articles or certificate of formation, regulations, operating agreement, limited liability company agreement, certificate of limited partnership, partnership agreement, and all other similar documents, instruments or certificates executed, adopted, or filed in connection with the creation, formation, or organization of a Person, including any amendments thereto. "Parent" has the meaning set forth in the preface. "Party" and "Parties" have the meanings set forth in the preface. "Person" means an individual or entity, including any partnership, corporation, association, joint stock company, trust, joint venture, limited liability company, unincorporated organization, or Governmental Authority (or any department, agency or political subdivision thereof) or any other legal entity. "Purchase Price" means $111,000,000. "SEC" means the Securities and Exchange Commission. "Securities Act" means the Securities Act of 1933, as amended from time to time. "Seller" has the meaning set forth in the preface. "Seller Indemnitees" means, collectively, the Seller and each of its respective Affiliates and each of its respective officers (or Persons performing similar functions), directors (or Persons performing similar functions), employees, agents, and representatives. "Tax" or "Taxes" means any federal, state, local, or foreign income, gross receipts, license, payroll, employment, excise, severance, stamp, occupation, premium, windfall profits, environmental (including taxes under Code Section 59A), custom duties, capital stock, franchise, profits, withholding, social security (or similar excises), unemployment, disability, ad valorem, real property, personal property, sales, use, transfer, registration, value added, alternative or add-on minimum, estimated, or other tax, duty, excise, assessment, fee or other governmental charge of any kind whatsoever, including any interest, penalty or addition thereto, whether disputed or not. "Third-Party Claim" has the meaning set forth in Section 5(d). "Transaction Agreements" means this Agreement, the GP LLC Purchase Agreement, the NRP (GP) LP Purchase Agreement, Amendment No. 1 to LP Agreement, Amendment No. 1 to LLC Agreement, the Agreement for Appointment of Seller's Directors, and all other agreements, documents, certificates or instruments executed and delivered in connection with the transactions contemplated herein. 3 "Transfer Application" has the meaning set forth in the MLP Agreement. 2. The Transactions. (a) Sale of the Seller's Subordinated Units. Subject to the terms and conditions of this Agreement, the Seller agrees to sell to the Buyer at the Closing, and the Buyer agrees to purchase from the Seller at the Closing, all of the Seller's right, title and interest in and to the Seller's Subordinated Units. (b) Consideration. Subject to the terms and conditions of this Agreement and in consideration for the sale of the Seller's Subordinated Units, the Buyer agrees to pay the Seller the Purchase Price at the Closing in cash payable by wire transfer to Seller of immediately available federal funds. (c) The Closing. The closing of the transactions contemplated by this Agreement (the "Closing") will take place at the offices of the Buyer on December 22, 2003 (the "Closing Date"). (d) Actions at the Closing. At the Closing, (i) The GP LLC Purchase Agreement will be executed simultaneously, and the transactions described therein will close simultaneously with the transactions described in this Agreement. (ii) The NRP (GP) LP Purchase Agreement will be executed simultaneously, and the transactions described therein will close simultaneously with the transactions described in this Agreement. (iii) Seller will deliver a Secretary's Certificate substantially in the form of Exhibit A. (iv) Parent will deliver a Secretary's Certificate substantially in the form of Exhibit B. (v) Buyer will deliver a Certificate of Sole Member of General Partner substantially in the form of Exhibit C. (vi) Buyer will pay the Seller the Purchase Price in cash payable by wire transfer to Seller of immediately available federal funds to an account specified by Seller. (vii) Seller will deliver the Certificate, and Buyer will deliver the Certificate, accompanied by a duly executed Transfer Application, to the GP. 3. Representations and Warranties Concerning the Transaction. (a) Representations and Warranties Concerning Each of the Seller and the Parent. Each of the Seller and the Parent hereby represents and warrants to the Buyer that: 4 (i) Organization and Good Standing. Each of them (x) is a corporation duly organized, validly existing, and in good standing under the laws of the State of Delaware; and (y) is duly qualified to transact business and is in good standing in the State of Missouri. (ii) Authorization of Transaction. Each of them has full corporate power and authority to execute and deliver each Transaction Agreement to which it is a party and to perform its obligations thereunder. Each Transaction Agreement to which the Seller or the Parent is a party constitutes the valid and legally binding obligation of the Seller or the Parent, as applicable, enforceable against Seller or Parent, as applicable, in accordance with its terms and conditions, subject, however, to the effects of bankruptcy, insolvency, reorganization, moratorium or similar Laws affecting creditors' rights generally, including limiting the right of specific performance, and to general principles of equity (regardless of whether such enforceability is considered in a proceeding in equity or at Law). Neither the Seller nor the Parent need give any notice to, make any filing with, or obtain any authorization, consent, or approval of any Governmental Authority in order to consummate the transactions contemplated by this Agreement or any other Transaction Agreement to which it is a party. (iii) Title to the Seller's Subordinated Units. Seller has good, valid and marketable title to the Seller's Subordinated Units, free and clear of all Encumbrances. Upon purchase of the Seller's Subordinated Units by Buyer and the receipt by Seller of the Purchase Price pursuant hereto, good and valid title to the Seller's Subordinated Units will pass to Buyer, free and clear of all Encumbrances. (iv) Noncontravention. Neither the execution and delivery of any of the Transaction Agreements to which either the Seller or Parent is a party, nor the consummation of any of the transactions contemplated thereby, shall (A) violate any Law to which the Seller or Parent is subject or any provision of its Organizational Documents or (B) conflict with, result in a breach of, constitute a default under, result in the acceleration of, create in any Person the right to accelerate, terminate, modify, or cancel, or require any notice under any agreement, indenture, note agreement, loan agreement, contract, lease, license, instrument, or other arrangement (x) to which either the Seller or Parent is a party or by which either of them is bound or (y) to which any of their assets are subject (or result in the imposition of any Encumbrance upon any of the Seller's or Parent's assets), in either case except for such violations, conflicts, breaches, defaults, accelerations, terminations, modifications, cancellations, failures to give notice, Encumbrances or other occurrences that would not have, or would reasonably be expected not to have, a material adverse effect on the ability of the Seller or the Parent to consummate the transactions contemplated by this Agreement or any other Transaction Agreement to which it is a party. (v) Brokers' Fees. Neither the Seller nor Parent has any liability or obligation to pay any fees or commissions to any broker, finder, or agent with 5 respect to the transactions contemplated by this Agreement for which the Buyer is, or could become, liable or obligated. (b) Representations and Warranties Concerning the Buyer. The Buyer hereby represents and warrants to the Seller that: (i) Organization of the Buyer. The Buyer (x) is a limited partnership duly organized, validly existing, and in good standing under the laws of the State of Delaware; and (y) is duly qualified to transact business and is in good standing in the State of Texas. (ii) Authorization of Transaction. The Buyer has full limited partnership power and authority to execute and deliver each Transaction Agreement to which it is a party and to perform its obligations thereunder. Each Transaction Agreement to which the Buyer is a party constitutes the valid and legally binding obligation of the Buyer, enforceable against it in accordance with its terms and conditions, subject, however, to the effects of bankruptcy, insolvency, reorganization, moratorium or similar Laws affecting creditors' rights generally, including limiting the right of specific performance, and to general principles of equity (regardless of whether such enforceability is considered in a proceeding in equity or at Law). The Buyer need not give any notice to, make any filing with, or obtain any authorization, consent, or approval of any Governmental Authority in order to consummate the transactions contemplated by this Agreement or any other Transaction Agreement to which it is a party. (iii) Noncontravention. Neither the execution and delivery of any of the Transaction Agreements to which the Buyer is a party, nor the consummation of any of the transactions contemplated thereby, shall (A) violate any Law to which the Buyer is subject or any provision of its Organizational Documents or (B) conflict with, result in a breach of, constitute a default under, result in the acceleration of, create in any Person the right to accelerate, terminate, modify, or cancel, or require any notice under any agreement, indenture, note agreement, loan agreement, contract, lease, license, instrument or other arrangement (x) to which either the Buyer is a party or by which it is bound or (y) to which any of the Buyer's assets are subject (or result in the imposition of any Encumbrance upon any of the Buyer's assets), in either case except for such violations that would not have, or would reasonably be expected not to have, a material adverse effect on the ability of the Buyer to consummate the transactions contemplated by this Agreement or any other Transaction Agreement to which it is a party. (iv) Brokers' Fees. The Buyer does not have any liability or obligation to pay any fees or commissions to any broker, finder, or agent with respect to the transactions contemplated by this Agreement for which the Seller is, or could become, liable or obligated. (v) Investment Intent; Investment Experience; Restricted Securities. In acquiring the Seller's Subordinated Units, the Buyer is not offering or selling, and 6 shall not offer or sell the Seller's Subordinated Units, for the Seller in connection with any distribution of any of such Seller's Subordinated Units, and the Buyer does not have a participation and shall not participate in any such undertaking or in any underwriting of such an undertaking except in compliance with applicable federal and state securities laws. The Buyer acknowledges that it is able to fend for itself, can bear the economic risk of its investment in the Seller's Subordinated Units, and has such knowledge and experience in financial and business matters that it is capable of evaluating the merits and risks of an investment in all of such Seller's Subordinated Units. The Buyer understands that none of the Seller's Subordinated Units shall have been registered pursuant to the Securities Act or any applicable state securities laws, that all of such Seller's Subordinated Units shall be characterized as "restricted securities" under federal securities laws and that under such laws and applicable regulations none of such Seller's Subordinated Units can be sold or otherwise disposed of without registration under the Securities Act or an exemption therefrom. 4. Remedies for Breaches of this Agreement. (a) Survival of Representations and Warranties. (i) The representations and warranties of the Seller and the Parent contained in Sections 3(a)(i) and 3(a)(iv) shall survive the Closing hereunder until the date that is 2 years after the Closing Date. The representations and warranties of the Seller and the Parent contained in Sections 3(a)(ii), 3(a)(iii) and 3(a)(v) shall survive the Closing indefinitely. The representations and warranties of the Buyer contained in Sections 3(b)(i) and 3(b)(iii) shall survive the Closing for a period of 2 years after the Closing Date. The representations and warranties of the Buyer contained in Sections 3(b)(ii) and 3(b)(iv) shall survive the Closing indefinitely. The covenants and obligations contained in Section 2 and all other covenants and obligations contained in this Agreement shall survive the Closing indefinitely. (b) Indemnification Provisions for Benefit of the Buyer. (i) Representations and Warranties. In the event: (x) any of the representations or warranties of the Seller or the Parent is breached; (y) there is an applicable, unexpired survival period pursuant to Section 4(a); and (z) the Buyer makes a written claim for indemnification against the Seller and/or the Parent pursuant to Section 5(e) within such survival period, then the Seller and Parent agree to release, indemnify and hold harmless the Buyer Indemnitees from and against any Adverse Consequences suffered by the Buyer Indemnitees by reason of all such breaches; provided, that neither the Seller nor the Parent shall have any obligation to indemnify any Buyer Indemnitees from and against any such Adverse Consequences to the extent the Adverse Consequences the Buyer Indemnitees, in the aggregate, have suffered by reason of all such breaches exceeds an aggregate ceiling amount equal to 100% of the Purchase Price (after which point the Seller and the Parent shall have no obligation to indemnity the Buyer Indemnitees from and against further such Adverse Consequences). Any due diligence or other investigation by or on behalf of the Buyer shall not affect 7 its reliance or right to rely on any representation or warranty made by the Seller or Parent in this Agreement. (ii) Covenants and Obligations. In the event: (x) any of the covenants or obligations of the Seller in Section 2 or any other covenants or obligations of the Seller in this Agreement are breached; and (y) the Buyer makes a written claim for indemnification against the Seller pursuant to Section 5(e), then the Seller and Parent agree to release, indemnify and hold harmless the Buyer Indemnitees from and against any Adverse Consequences suffered by the Buyer Indemnitees. (c) Indemnification Provisions for Benefit of the Seller. (i) Representations and Warranties. In the event: (x) any of the representations or warranties of the Buyer is breached; (y) there is an applicable survival period pursuant to Section 4(a); and (z) the Seller makes a written claim for indemnification against the Buyer pursuant to Section 5(e) within such survival period, then the Buyer agrees to release, indemnify and hold harmless the Seller Indemnitees from and against any Adverse Consequences suffered by such Seller Indemnitees by reason of all such breaches; provided, that Buyer shall not have any obligation to indemnify any Seller Indemnitees from and against any such Adverse Consequences to the extent the Adverse Consequences the Seller Indemnitees, in the aggregate, have suffered by reason of all such breaches exceeds an aggregate ceiling amount equal to 100% of the Purchase Price (after which point the Buyer shall have no obligation to indemnity the Seller Indemnitees from and against further such Adverse Consequences). Any due diligence or other investigation by or on behalf of the Seller or the Parent shall not affect their reliance or right to rely on any representation or warranty made by the Buyer in this Agreement. (ii) Covenants and Obligations. In the event: (x) any of the covenants or obligations of the Buyer in Section 2 or any other covenants or obligations of the Buyer in this Agreement are breached; and (y) the Seller makes a written claim for indemnification against the Buyer pursuant to Section 5(e) within such survival period, then the Buyer agrees to release, indemnify and hold harmless the Seller Indemnitees from and against any Adverse Consequences suffered by the Seller Indemnitees. 8 (d) Matters Involving Third Parties. (i) If any third party shall notify any Party (the "Indemnified Party") with respect to any matter (a "Third-Party Claim") that may give rise to a claim for indemnification against any other Party (the "Indemnifying Party") under this Section 4, then the Indemnified Party shall promptly notify the Indemnifying Party thereof in writing. Failure to give prompt notice of a Third-Party Claim hereunder shall not affect the Indemnifying Party's obligations, except to the extent that the Indemnifying Party is materially prejudiced by such failure to give prompt notice. (ii) The Indemnifying Party shall have the right to assume and thereafter conduct the defense of the Third-Party Claim with counsel of its choice reasonably satisfactory to the Indemnified Party; provided, however, that the Indemnified Party shall have the right to participate in any matter through counsel of its own choosing at its own expense; provided further, however, that the Indemnifying Party shall pay the fees and expenses of separate counsel for the Indemnified Party if (A) the Indemnifying Party has agreed to pay such fees and expenses or (B) the named parties to any such action or proceeding (including any impleaded parties) include both the Indemnified Party and the Indemnifying Party, and such Indemnified Party shall have been advised by counsel that the representation of both parties would be inappropriate due to actual or potential differing interests between them. (iii) The Indemnifying Party shall not consent to the entry of any judgment or enter into any settlement with respect to the Third-Party Claim without the prior written consent of the Indemnified Party (not to be withheld or delayed unreasonably) unless the judgment or proposed settlement involves only the payment of money damages and does not impose an injunction or other equitable relief upon the Indemnified Party. (iv) Unless and until the Indemnifying Party assumes the defense of the Third-Party Claim as provided in Section 4(d)(ii), the Indemnified Party may defend against the Third-Party Claim in any manner it reasonably may deem appropriate. (v) In no event shall the Indemnified Party consent to the entry of any judgment or enter into any settlement with respect to the Third-Party Claim without the prior written consent of the Indemnifying Party, which consent shall not be withheld or delayed unreasonably. (e) Determination of Amount of Adverse Consequences. The Adverse Consequences giving rise to any indemnification obligation hereunder shall be limited to the actual loss suffered by the Indemnified Party (i.e. reduced by any insurance proceeds or other payment or recoupment received, realized or retained by the Indemnified Party as a result of the events giving rise to the claim for indemnification net of any expenses related to the receipt of such proceeds, payment or recoupment, including retrospective premium adjustments, if any), 9 but not reduced by any reduction in Taxes of the Indemnified Party (or the affiliated group of which it is a member) occasioned by such loss or damage. The amount of the actual loss and the amount of the indemnity payment shall be computed by taking into account the timing of the loss or payment, as applicable, using a 10% interest or discount rate, as appropriate. Upon the request of the Indemnifying Party, the Indemnified Party shall provide the Indemnifying Party with information sufficient to allow the Indemnifying Party to calculate the amount of the indemnity payment in accordance with this Section 4(e). (f) Compliance with Express Negligence Rule. ALL RELEASES, DISCLAIMERS, LIMITATIONS ON LIABILITY AND INDEMNITIES IN THIS AGREEMENT, INCLUDING THOSE IN THIS SECTION 4, SHALL APPLY EVEN IN THE EVENT OF THE SOLE, JOINT AND/OR CONCURRENT NEGLIGENCE, STRICT LIABILITY OR OTHER FAULT OF THE PARTY WHOSE LIABILITY IS RELEASED, DISCLAIMED, LIMITED OR INDEMNIFIED. (g) Tax Treatment of Indemnity Payments. All indemnification payments made under this Agreement, including any payment made under this Section 4, shall be made in cash and treated as purchase price adjustments for tax purposes. 5. Miscellaneous (a) Disclosure. Notwithstanding anything to the contrary in this Agreement (or any other agreement executed in connection therewith), the Parties (and each employee, representative or other agent of the Parties) may disclose to any and all persons, without limitation of any kind, the U.S. federal income Tax treatment and Tax structure of the transactions contemplated herein and all materials of any kind (including opinions and other Tax analyses) that are provided to the Parties relating to such Tax treatment and Tax structure. For this purpose, "Tax structure" is limited to facts relevant to the U.S. federal income Tax treatment of such transactions and does not include information relating to the identity of the Parties, its Affiliates, agents or advisors. Moreover, notwithstanding any other provision of this Agreement (or any other agreement executed in connection therewith), there shall be no limitation on a Party's ability to consult any Tax adviser, whether or not independent from such Party or its Affiliates, regarding the Tax treatment or Tax structure of the transactions contemplated by this Agreement. (b) No Third-Party Beneficiaries. This Agreement shall not confer any rights or remedies upon any Person other than the Parties and their respective successors and permitted assigns. (c) Succession and Assignment. This Agreement shall be binding upon and inure to the benefit of the Parties named herein and their respective successors and assigns. No Party may assign, transfer or otherwise alienate either this Agreement or any of its rights, interests or obligations hereunder without the prior written approval of the other Parties. (d) Counterparts. This Agreement may be executed in counterparts, each of which shall be deemed an original but which together shall constitute one and the same instrument. 10 (e) Notices. All notices, requests, demands, claims, and other communications hereunder shall be in writing. Any notice, request, demand, claim, or other communication hereunder shall be deemed duly given two business days after it is sent by registered or certified mail, return receipt requested, postage prepaid, and addressed to the intended recipient as set forth below: If to the Seller: Ark Land Company One CityPlace Drive, Suite 300 St. Louis, MO 63141 Attention: General Counsel Fax: (314) 994-2734 If to the Parent: Arch Coal, Inc. One CityPlace Drive, Suite 300 St. Louis, MO 63141 Attention: General Counsel Fax: (314) 994-2734 If to the Buyer: FRC-WPP NRP Investment L.P. 601 Jefferson St., Suite 3600 Houston, TX 77002 Attention: General Counsel Fax: (713) 650-0606 With a copy to: GP Natural Resource Partners LLC 601 Jefferson St., Suite 3600 Houston, TX 77002 Attention: General Counsel Fax: (713) 650-0606 Any Party may send any notice, request, demand, claim, or other communication hereunder to the intended recipient at the addresses set forth above using any other means (including personal delivery, expedited courier, messenger service, telecopy, ordinary mail, or electronic mail). Delivery of written notices shall be effective (i) upon delivery, if sent by hand delivery, expedited courier or messenger service (in any such case, with a record of receipt) or by ordinary mail or (ii) on the next day after the date of dispatch, if sent by telecopy, cable, facsimile, telegram, or electronic mail. Any Party may change the address to which notices, requests, demands, claims, and other communications hereunder are to be delivered by giving the other Party notice in the manner herein set forth. (f) Governing Law. THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE DOMESTIC LAWS OF THE STATE OF DELAWARE WITHOUT GIVING EFFECT TO ANY CHOICE OR CONFLICT OF LAW PROVISION OR RULE (WHETHER OF THE STATE OF DELAWARE OR ANY OTHER JURISDICTION) THAT WOULD CAUSE THE APPLICATION OF THE LAWS OF ANY JURISDICTION OTHER THAN THE STATE OF DELAWARE. 11 (g) Remedy and Waiver. From and after the Closing, the sole remedy of a Party in connection with (i) a breach or inaccuracy of the representations, or breach of warranties, in this Agreement or any certificate or other document delivered pursuant to this Agreement at Closing, or (ii) any failure by a Party to perform or observe any term, provision, covenant or agreement on the part of such Party to be performed or observed under this Agreement, shall, in each case, be the rights of such Party under Section 4 hereof to indemnification and to being released and held harmless, and, as a result, each Party hereby waives any claim or cause of action pursuant to common or statutory law or otherwise (except for fraud) against the other Party arising from any breach or failure described in (i) or (ii) above. Except for the representations, warranties and remedies expressly provided for by this Agreement, the Buyer agrees that the Seller and its Affiliates and representatives have not made any representation or warranty, and the Seller is relying on no other representation, warranty or remedy (under contract or law). (h) Further Assurances. In case at any time after the Closing any further action is necessary to carry out the purposes of this Agreement, each of the Parties shall take such further action (including the execution and delivery of such further instruments and documents) as the other Party reasonably may request, all at the sole cost and expense of the requesting Party (unless the requesting Party is entitled to indemnification therefor under Section 4). (i) Amendments and Waivers. No amendment of any provision of this Agreement shall be valid unless the same shall be in writing and signed by the Buyer and the Seller. No waiver by any Party of any default, misrepresentation, or breach of warranty or covenant hereunder, whether intentional or not, shall be deemed to extend to any prior or subsequent default, misrepresentation, or breach of warranty or covenant hereunder or affect in any way any rights arising by virtue of any prior or subsequent such occurrence. (j) Severability. Any term or provision of this Agreement that is invalid or unenforceable in any situation in any jurisdiction shall not affect the validity or enforceability of the remaining terms and provisions hereof or the validity or enforceability of the offending term or provision in any other situation or in any other jurisdiction. (k) Transaction Expenses. Each of the Buyer, the Seller and the Parent shall bear its own costs and expenses (including legal fees and expenses) incurred in connection with this Agreement and the transactions contemplated hereby. (l) Construction. The Parties have participated jointly in the negotiation and drafting of this Agreement. In the event an ambiguity or question of intent or interpretation arises, this Agreement shall be construed as if drafted jointly by the Parties and no presumption or burden of proof shall arise favoring or disfavoring any Party by virtue of the authorship of any of the provisions of this Agreement. The Section headings contained in this Agreement are inserted for convenience only and shall not affect in any way the meaning or interpretation of this Agreement. Any reference to any federal, state, local, or foreign statute or Law shall be deemed also to refer to all rules and regulations promulgated thereunder, unless the context requires otherwise, and shall include any amendment to such Law now or hereinafter in effect, unless otherwise expressly set forth herein. The word "including" shall mean including without 12 limitation. All personal pronouns used in this Agreement, whether used in the masculine, feminine or neuter gender, shall include all other genders; the singular shall include the plural, and vice versa. All references herein to Sections or subdivisions thereof shall refer to the corresponding Section or subdivision thereof of this Agreement unless specific reference is made to such articles, sections or subdivisions of another document or instrument. Unless otherwise provided, any reference to any Person in this Agreement shall include such Person's successors and assigns. The terms "will" and "shall" shall be interpreted to have the same meaning. The terms "herein," "hereby," "hereunder," "hereof," "hereinafter," and other equivalent words refer to this Agreement in its entirety and not solely to the particular portion of the Agreement in which such word is used. Each certificate delivered pursuant to this Agreement shall be deemed a part hereof, and any representation, warranty or covenant herein referenced or affirmed in such certificate shall be treated as a representation, warranty or covenant given in the correlated Section hereof on the date of such certificate. Additionally, any representation, warranty or covenant made in any such certificate shall be deemed to be made herein. (m) Entire Agreement. THIS AGREEMENT (INCLUDING THE DOCUMENTS REFERRED TO HEREIN) CONSTITUTES THE ENTIRE AGREEMENT AMONG THE PARTIES AND SUPERSEDES ANY PRIOR UNDERSTANDINGS, AGREEMENTS, OR REPRESENTATIONS BY OR AMONG THE PARTIES, WRITTEN OR ORAL, TO THE EXTENT THEY HAVE RELATED IN ANY WAY TO THE SUBJECT MATTER HEREOF. ***** 13 IN WITNESS WHEREOF, the Parties hereto have executed this Agreement as of the date first set forth in the preamble. FRC-WPP NRP Investment L.P. By: FRC-WPP GP LLC its General Partner By: --------------------------------------------- Alex T. Krueger Manager ARK LAND COMPANY By: --------------------------------------------- Steven E. McCurdy President ARCH COAL, INC. By: --------------------------------------------- David B. Peugh Vice President, Business Development SIGNATURE PAGE TO THE PURCHASE AND SALE AGREEMENT RELATING TO THE SUBORDINATED UNITS EXHIBIT A SECRETARY'S CERTIFICATE OF SELLER EXHIBIT B SECRETARY'S CERTIFICATE OF PARENT EXHIBIT C CERTIFICATE OF MEMBERS OF GENERAL PARTNER OF BUYER EX-99.4 6 d11617exv99w4.txt SECTION 16 AGREEMENT EXHIBIT 4 SECTION 16 AGREEMENT January 2, 2004 The Limited Partners of FRC-WPP NRP Investment L.P. and the Members of FRC-WPP GP LLC This letter sets forth certain understandings between and among the undersigned (for itself and in its capacity as general partner of the Partnership, as defined below) and (i) the limited partners of FRC-WPP NRP Investment L.P., a Delaware limited partnership (the "Partnership") and (ii) the members of FRC-WPP GP LLC, a Delaware limited liability company (the "Company"), in each case with respect to the purchase or acquisition of equity securities of Natural Resource Partners L.P., a Delaware limited partnership ("NRP") during a "Section 16 Black Out Period", as defined below. For purposes of this agreement, a Section 16 Black Out Period shall mean one or more periods beginning on the date five business days after the general partner of the Partnership (the "General Partner") or the board of managers of the Company (the "Board"), as the case may be, delivers notice to the limited partners of the Partnership (the "Limited Partners") or the members of the Company (the "Members"), as the case may be, of a Section 16 Black Out Period, and ending six months and one day following the date of the next sale by the Partnership of any subordinated units representing limited partner interests of NRP ("Subordinated Units"). Section 16 Black Out Periods may run contemporaneously with one another. The partners of the Partnership hereby agree that no Limited Partner or any Affiliate (as such term is used in the Partnership Agreement, as defined below) of any Limited Partner will purchase or acquire any "equity security" (as defined under Rule 16a-1(d) under the Securities Act) (an "Equity Security") of NRP during any Section 16 Black Out Period unless such party delivers at least 10 business days' prior notice to the General Partner, and the General Partner determines in its reasonable discretion that such purchase or acquisition or acquisition would not result in any liability to the Partnership or its Limited Partners in the event the Partnership sells any equity security of NRP during the Section 16 Black Out Period. Each Limited Partner will ensure that no transaction by its Affiliates will result in a violation of this paragraph. The Company and its Members hereby agree that no Member or any Affiliate (as such term is used in the Company's Operating Agreement, as defined below) of any Member will purchase or acquire any Equity Security of NRP during any Section 16 Black Out Period unless such party delivers at least 10 business days' prior notice to each representative on the Board of Managers, and the Board of Managers determines in its reasonable discretion that such purchase or acquisition would not result in any liability to the Partnership or its partners, or the Company or its Members in the event the Partnership sells any Equity Security of NRP during the Section 16 Black Out Period. Each Member will ensure that no transaction by its Affiliates will result in a violation of this paragraph. EX-99.5 7 d11617exv99w5.txt TERM LOAN AGREEMENT EXHIBIT 5 ================================================================================ TERM LOAN AGREEMENT ---------- FRC-WPP NRP INVESTMENT L.P. and SOUTHWEST BANK OF TEXAS, N.A. as Administrative Agent, Sole Book Runner and Lead Arranger and CERTAIN FINANCIAL INSTITUTIONS as Lenders ---------- $25,000,000 December 22, 2003 ================================================================================ TABLE OF CONTENTS
Page ARTICLE I - Definitions and References............................................................................1 Section 1.1. Defined Terms..........................................................................1 Section 1.2. Exhibits and Schedules; Additional Definitions........................................12 Section 1.3. Amendment of Defined Instruments......................................................12 Section 1.4. References and Titles.................................................................12 Section 1.5. Calculations and Determinations.......................................................12 Section 1.6. Joint Preparation; Construction of Indemnities and Releases...........................13 ARTICLE II - The Loans...........................................................................................13 Section 2.1. Commitments to Lend; Notes............................................................13 Section 2.2. Request for Loans.....................................................................13 Section 2.3. Continuations and Conversions of Loans................................................14 Section 2.4. Use of Proceeds.......................................................................15 Section 2.5. Interest Rates and Fees...............................................................15 Section 2.6. Optional Prepayments..................................................................16 Section 2.7. Scheduled Payments and Mandatory Prepayments..........................................16 ARTICLE III - Payments to Lenders................................................................................17 Section 3.1. General Procedures....................................................................17 Section 3.2. Capital Reimbursement.................................................................18 Section 3.3. Increased Cost of LIBOR Loans.........................................................18 Section 3.4. Availability..........................................................................19 Section 3.5. Funding Losses........................................................................20 Section 3.6. Reimbursable Taxes....................................................................20 ARTICLE IV - Conditions Precedent to Lending.....................................................................21 Section 4.1. Documents to be Delivered.............................................................21 Section 4.2. Additional Conditions Precedent.......................................................23 ARTICLE V - Representations and Warranties.......................................................................23 Section 5.1. No Default............................................................................23 Section 5.2. Organization and Good Standing........................................................23 Section 5.3. Authorization.........................................................................24 Section 5.4. No Conflicts or Consents..............................................................24 Section 5.5. Enforceable Obligations...............................................................24 Section 5.6. Initial Financial Statements..........................................................24 Section 5.7. Other Obligations and Restrictions....................................................24 Section 5.8. Full Disclosure.......................................................................25 Section 5.9. Litigation............................................................................25 Section 5.10. Labor Disputes and Acts of God........................................................25 Section 5.11. ERISA Plans and Liabilities...........................................................25 Section 5.12. Environmental and Other Laws..........................................................25 Section 5.13. Names and Places of Business..........................................................26 Section 5.14. Borrower's Subsidiaries...............................................................26
i Section 5.15. Government Regulation.................................................................26 Section 5.16. Insider...............................................................................27 Section 5.17. Solvency..............................................................................27 Section 5.18. Title to Collateral...................................................................27 ARTICLE VI - Affirmative Covenants of Borrower...................................................................27 Section 6.1. Payment and Performance...............................................................27 Section 6.2. Books, Financial Statements and Reports...............................................27 Section 6.3. Other Information and Inspections.....................................................28 Section 6.4. Notice of Material Events and Change of Address.......................................29 Section 6.5. Maintenance of Properties.............................................................29 Section 6.6. Maintenance of Existence and Qualifications...........................................29 Section 6.7. Payment of Trade Liabilities, Taxes, etc..............................................29 Section 6.8. Intentionally deleted.................................................................30 Section 6.9. Performance on Borrower's Behalf......................................................30 Section 6.10. Interest..............................................................................30 Section 6.11. Compliance with Agreements and Law....................................................30 Section 6.12. Environmental Matters; Environmental Reviews..........................................30 Section 6.13. Evidence of Compliance................................................................31 Section 6.14. Bank Accounts; Offset.................................................................31 Section 6.15. Agreement to Deliver Security Documents...............................................31 Section 6.16. Registration of Acquired Units........................................................32 Section 6.17. Cash Collateral Account...............................................................32 ARTICLE VII - Negative Covenants of Borrower.....................................................................32 Section 7.1. Indebtedness..........................................................................32 Section 7.2. Limitation on Liens...................................................................33 Section 7.3. Limitation on Mergers, Issuances of Securities........................................33 Section 7.4. Limitation on Sales of Property.......................................................33 Section 7.5. Limitation on Dividends and Redemptions...............................................33 Section 7.6. Limitation on Investments and New Businesses..........................................33 Section 7.7. Limitation on Credit Extensions.......................................................33 Section 7.8. Transactions with Affiliates..........................................................33 Section 7.9. No Further Negative Pledges...........................................................33 Section 7.10. Prohibited Contracts..................................................................34 Section 7.11. Financial Covenants...................................................................34 ARTICLE VIII - Events of Default and Remedies....................................................................34 Section 8.1. Events of Default.....................................................................34 Section 8.2. Remedies..............................................................................37 ARTICLE IX - Administrative Agent................................................................................37 Section 9.1. Appointment and Authority.............................................................37 Section 9.2. Exculpation, Administrative Agent's Reliance, Etc.....................................38 Section 9.3. Credit Decisions......................................................................38 Section 9.4. Indemnification.......................................................................38 Section 9.5. Rights as Lender......................................................................39
ii Section 9.6. Sharing of Set-Offs and Other Payments................................................39 Section 9.7. Investments...........................................................................40 Section 9.8. Benefit of Article IX.................................................................40 Section 9.9. Resignation...........................................................................40 ARTICLE X - Miscellaneous........................................................................................41 Section 10.1. Waivers and Amendments; Acknowledgments...............................................41 Section 10.2. Survival of Agreements; Cumulative Nature.............................................42 Section 10.3. Notices...............................................................................42 Section 10.4. Payment of Expenses; Indemnity........................................................43 Section 10.5. Joint and Several Liability; Parties in Interest; Assignments.........................45 Section 10.6. Confidentiality.......................................................................47 Section 10.7. Governing Law; Submission to Process..................................................47 Section 10.8. Limitation on Interest................................................................48 Section 10.9. Termination; Limited Survival.........................................................49 Section 10.10. Severability..........................................................................49 Section 10.11. Counterparts; Fax.....................................................................49 Section 10.12. WAIVER OF JURY TRIAL..................................................................49 Section 10.13. Waiver of Punitive Damages............................................................50 Section 10.14. Binding Arbitration...................................................................50
iii Schedules and Exhibits: Schedule 1 - Disclosure Schedule Schedule 2 - Security Schedule Schedule 3 - Lenders Schedule Exhibit A - Promissory Note Exhibit B - Borrowing Notice Exhibit C - Continuation/Conversion Notice Exhibit D - Certificate Accompanying Financial Statements Exhibit E - Opinion of Gibson Dunn & Crutcher LLP, Counsel for Borrower and General Partner Exhibit F - Assignment and Acceptance iv TERM LOAN AGREEMENT THIS TERM LOAN AGREEMENT is made as of December 22, 2003 by and among FRC-WPP NRP Investment L.P., a Delaware limited partnership (herein called "Borrower"), Southwest Bank of Texas, N.A., individually and as agent (herein called "Administrative Agent") and the Lenders referred to below. In consideration of the mutual covenants and agreements contained herein the parties hereto agree as follows: ARTICLE I - Definitions and References Section 1.1. Defined Terms. As used in this Agreement, each of the following terms has the meaning given to such term in this Section 1.1 or in the sections and subsections referred to below: "Acquired Units" means the 4,796,920 subordinated units of NRP acquired by Borrower pursuant to the Acquisition Documents, which are convertible into common units of NRP pursuant to the NRP Limited Partnership Agreement "Acquisition" means the acquisition by Borrower of the Acquired Units from Ark Land Company, a wholly-owned subsidiary of Arch Coal, Inc. pursuant to the Acquisition Documents. "Acquisition Documents" means (i) that certain purchase and sale agreement dated December 22, 2003 among Borrower, Ark Land Company, and Arch Coal, Inc. and (ii) all other documents and instruments executed and delivered in connection with the foregoing. "Adjusted Base Rate" means the Base Rate plus the Base Rate Margin, provided that the Adjusted Base Rate charged by any Person shall never exceed the Highest Lawful Rate. "Adjusted LIBOR Rate" means, for any LIBOR Loan for any Interest Period therefor, the rate per annum equal to the sum of (a) the LIBOR Margin plus (b) the rate per annum (rounded upwards, if necessary, to the nearest 1/16 of one percent) determined by Administrative Agent to be equal to the quotient obtained by dividing (i) the LIBOR Rate for such LIBOR Loan for such Interest Period by (ii) 1 minus the Reserve Requirement for such LIBOR Loan for such Interest Period, provided that no Adjusted LIBOR Rate charged by any Person shall ever exceed the Highest Lawful Rate. The Adjusted LIBOR Rate for any LIBOR Loan shall change whenever the LIBOR Margin or the Reserve Requirement changes. "Affiliate" means, as to any Person, each other Person that directly or indirectly (through one or more intermediaries or otherwise) controls, is controlled by, or is under common control with, such Person. A Person shall be deemed to be "controlled by" any other Person if such other Person possesses, directly or indirectly, power (a) to vote 20% or more of the securities (on a fully diluted basis) having ordinary voting power for the election of directors or managing general partners; or (b) to direct or cause the direction of the management and policies of such Person whether by contract or otherwise. 1 "Administrative Agent" means Southwest Bank of Texas, N.A., as Administrative Agent hereunder, and its successors in such capacity; provided, however, that until such time as a Lender other than Southwest Bank of Texas, N.A. becomes a party hereto, "Administrative Agent" shall mean Southwest Bank of Texas, N.A., individually. "Agreement" means this Term Loan Agreement. "Applicable Lending Office" means, for each Lender and for each Type of Loan, the "Lending Office" of such Lender (or of an Affiliate of such Lender) designated for such Type of Loan on the Lenders Schedule or such other office of such Lender (or an Affiliate of such Lender) as such Lender may from time to time specify to Administrative Agent and Borrower by written notice in accordance with the terms hereof as the office by which its Loans of such Type are to be made and maintained. "Base Rate" means, for any day, the rate per annum equal to the higher of (a) the Federal Funds Rate for such day plus one-half of one percent (0.5%) and (b) the Prime Rate for such day. Any change in the Base Rate due to a change in the Prime Rate or the Federal Funds Rate shall be effective on the effective date of such change in the Prime Rate or Federal Funds Rate. As used in this definition, "Prime Rate" means the per annum rate of interest established from time to time by Administrative Agent as its prime rate, which rate may not be the lowest rate of interest charged by Administrative Agent to its customers. "Base Rate Loan" means a Loan which does not bear interest at the LIBOR Rate. "Base Rate Margin" means, on each day: (a) three-quarters of one percent (0.75%) per annum when the Debt/Cash Flow Ratio is less than 1.50 to 1.00 on such day. (b) one percent (1.00%) per annum when the Debt/Cash Flow Ratio is equal to or greater than 1.50 to 1.00 but less than 2.00 to 1.00 on such day. (c) one and one-quarter percent (1.25%) per annum when the Debt/Cash Flow Ratio is equal to or greater than 2.00 to 1.00 on such day. "Borrower" means FRC-WPP NRP Investment, L.P., a Delaware limited partnership. "Borrower's Partnership Agreement" means that certain Amended and Restated Agreement of Limited Partnership of Borrower dated December 22, 2003, as may be amended from time to time in accordance herewith. "Borrowing" means a borrowing of new Loans of a single Type pursuant to Section 2.2 or a Continuation or Conversion of existing Loans into a single Type (and, in the case of LIBOR Loans, with the same Interest Period) pursuant to Section 2.3. 2 "Borrowing Notice" means a written or telephonic request, or a written confirmation, made by Borrower which meets the requirements of Section 2.2. "Business Day" means a day, other than a Saturday or Sunday, on which commercial banks are open for business with the public in Houston, Texas. Any Business Day in any way relating to LIBOR Loans (such as the day on which an Interest Period begins or ends) must also be a day on which, in the judgment of Administrative Agent, significant transactions in dollars are carried out in the interbank eurocurrency market. "Cash Collateral Account" means that certain Account No. 51036076 established at Administrative Agent. "Cash Flow" means all distributions received from NRP by Borrower with respect to the Acquired Units, minus (i) nominal cash business expenses (such as audit and accounting fees, formation costs, etc.) of up to $250,000 annually, (ii) upfront fees paid to Administrative Agent in connection herewith, and (iii) legal fees with respect hereto and with respect to the formation of Borrower; provided, for any Fiscal Quarter prior to Borrower's formation, Borrower shall be deemed to have received distributions equal to $0.5375 per Acquired Unit. "Change of Control" means (a) General Partner or any of its Affiliates shall cease to be and act as the general partner of Borrower, (b) General Partner and the limited partners of Borrower as of the date hereof or any of their Affiliates shall collectively cease to own, directly or indirectly, all of the partnership interests in Borrower, or First Reserve Corporation or any of its Affiliates shall cease to own, directly or indirectly, a majority of such partnership interests, or (c) the members of General Partner as of the date hereof or any of their Affiliates shall collectively cease to own, directly or indirectly, all of the voting membership interests in General Partner. "Collateral" means all property of any kind which is subject to a Lien in favor of Lenders (or in favor of Administrative Agent for the benefit of Lenders) or which, under the terms of any Security Document, is purported to be subject to such a Lien. "Consolidated" refers to the consolidation of any Person, in accordance with GAAP, with its properly consolidated subsidiaries. References herein to a Person's Consolidated financial statements, financial position, financial condition, liabilities, etc. refer to the consolidated financial statements, financial position, financial condition, liabilities, etc. of such Person and its properly consolidated subsidiaries. "Continuation" shall refer to the continuation pursuant to Section 2.3 hereof of a LIBOR Loan as a LIBOR Loan from one Interest Period to the next Interest Period. "Continuation/Conversion Notice" means a written or telephonic request, or a written confirmation, made by Borrower which meets the requirements of Section 2.3. "Conversion" shall refer to a conversion pursuant to Section 2.3 or Article III of one Type of Loan into another Type of Loan. 3 "Debt/Cash Flow Ratio" has the meaning given to such term in Section 7.11(b). "Default" means any Event of Default and any default, event or condition which would, with the giving of any requisite notices and the passage of any requisite periods of time, constitute an Event of Default. "Default Rate" means, at the time in question (a) with respect to any Base Rate Loan, the rate per annum equal to two percent (2%) above the Adjusted Base Rate then in effect and (b) with respect to any LIBOR Loan, the rate per annum equal to two percent (2%) above the Adjusted LIBOR Rate then in effect for such Loan, provided in each case that no Default Rate charged by any Person shall ever exceed the Highest Lawful Rate. "Disclosure Report" means either a notice given by Borrower under Section 6.4 or a certificate given by Borrower's chief financial officer under Section 6.2(b). "Disclosure Schedule" means Schedule 1 hereto. "Distribution" means (a) any dividend or other distribution made by a Restricted Person on or in respect of any stock, partnership interest, or other equity interest in such Restricted Person or any other Restricted Person (including any option or warrant to buy such an equity interest), or (b) any payment made by a Restricted Person to purchase, redeem, acquire or retire any stock, partnership interest, or other equity interest in such Restricted Person or any other Restricted Person (including any such option or warrant). "Eligible Transferee" means a Person which either (a) is a Lender or an Affiliate of a Lender, or (b) is consented to as an Eligible Transferee by Administrative Agent and, so long as no Default or Event of Default is continuing, by Borrower, which consents in each case will not be unreasonably withheld (provided that no Person organized outside the United States may be an Eligible Transferee if Borrower would be required to pay withholding taxes on interest or principal owed to such Person). "Environmental Laws" means any and all Laws relating to the environment or to emissions, discharges, releases or threatened releases of pollutants, contaminants, chemicals, or industrial, toxic or hazardous substances or wastes into the environment including ambient air, surface water, ground water, or land, or otherwise relating to the manufacture, processing, distribution, use, treatment, storage, disposal, transport, or handling of pollutants, contaminants, chemicals, or industrial, toxic or hazardous substances or wastes. "ERISA" means the Employee Retirement Income Security Act of 1974, as amended from time to time, and any successor statutes or statute, together with all rules and regulations promulgated with respect thereto. "ERISA Affiliate" means Borrower and all members of a controlled group of business organizations and all trades or businesses (whether or not incorporated) under common control that, together with Borrower, are treated as a single employer under Section 414 of the Internal Revenue Code. 4 "ERISA Plan" means any employee pension benefit plan subject to Title IV of ERISA maintained by any ERISA Affiliate with respect to which any Restricted Person has a fixed or contingent liability. "Event of Default" has the meaning given to such term in Section 8.1. "Federal Funds Rate" means, for any day, the rate per annum (rounded upwards, if necessary, to the nearest 1/100th of one percent) equal to the average per annum rate of interest on overnight Federal funds transactions with members of the Federal Reserve System arranged by Federal funds brokers (herein called "Overnight Transactions") transacted on the immediately preceding Business Day, as published by the Federal Reserve Bank of New York, provided that if such rate is not so published for any Business Day, the Federal Funds Rate for such day shall be the average of the per annum interest rate quotations for Overnight Transactions received by Administrative Agent (or at its option, the Reference Bank) for such Business Day from three (3) Federal funds brokers of recognized standing selected by Administrative Agent in its sole discretion. "Fiscal Quarter" means a three-month period ending on March 31, June 30, September 30 or December 31 of any year. "Fiscal Year" means a twelve-month period ending on December 31 of any year. "GAAP" means those generally accepted accounting principles and practices which are recognized as such by the Financial Accounting Standards Board (or any generally recognized successor). If any change in any accounting principle or practice is required by the Financial Accounting Standards Board (or any such successor) in order for such principle or practice to continue as a generally accepted accounting principle or practice, all reports and financial statements required hereunder with respect to Borrower or with respect to Borrower and its Consolidated Subsidiaries shall be prepared in accordance with such change, but all calculations and determinations to be made hereunder may be made in accordance with such change only after notice of such change is given to each Lender and Majority Lenders agree to such change insofar as it affects the accounting of Borrower or of Borrower and its Consolidated Subsidiaries. "General Partner" means FRC-WPP GP LLC, a Delaware limited liability company, the general partner of Borrower. "Hazardous Materials" means any substances regulated under any Environmental Law, whether as pollutants, contaminants, or chemicals, or as industrial, toxic or hazardous substances or wastes, or otherwise. "Hedging Contract" means (a) any agreement providing for options, swaps, floors, caps, collars, forward sales or forward purchases involving interest rates, commodities or commodity prices, equities, currencies, bonds, or indexes based on any of the foregoing, (b) any option, futures or forward contract traded on an exchange, and (c) any other derivative agreement or other similar agreement or arrangement. 5 "Highest Lawful Rate" means, with respect to each Lender Party to whom Obligations are owed, the maximum nonusurious rate of interest that such Lender Party is permitted under applicable Law to contract for, take, charge, or receive with respect to such Obligations. All determinations herein of the Highest Lawful Rate, or of any interest rate determined by reference to the Highest Lawful Rate, shall be made separately for each Lender Party as appropriate to assure that the Loan Documents are not construed to obligate any Person to pay interest to any Lender Party at a rate in excess of the Highest Lawful Rate applicable to such Lender Party. "Indebtedness" of any Person means Liabilities in any of the following categories: (a) Liabilities for borrowed money, (b) Liabilities constituting an obligation to pay the deferred purchase price of property or services, (c) Liabilities evidenced by a bond, debenture, note or similar instrument, (d) Liabilities which (i) would under GAAP be shown on such Person's balance sheet as a liability, and (ii) are payable more than one year from the date of creation thereof (other than reserves for taxes and reserves for contingent obligations), (e) Liabilities arising under Hedging Contracts, (f) Liabilities constituting principal under leases capitalized in accordance with GAAP, (g) Liabilities arising under conditional sales or other title retention agreements, (h) Liabilities owing under direct or indirect guaranties of Liabilities of any other Person or otherwise constituting obligations to purchase or acquire or to otherwise protect or insure a creditor against loss in respect of Liabilities of any other Person (such as obligations under working capital maintenance agreements, agreements to keep-well, or agreements to purchase Liabilities, assets, goods, securities or services), but excluding endorsements in the ordinary course of business of negotiable instruments in the course of collection, (i) Liabilities (for example, repurchase agreements, mandatorily redeemable preferred stock and sale/leaseback agreements) consisting of an obligation to purchase, lease or redeem securities or other property, if such Liabilities arises out of or in connection with the sale or issuance of the same or similar securities or property, (j) Liabilities with respect to letters of credit or applications or reimbursement agreements therefor, (k) Liabilities with respect to payments received in consideration of oil, gas, or other minerals yet to be acquired or produced at the time of payment (including obligations under "take-or-pay" contracts to deliver gas in return for payments already received and the undischarged balance of any production payment created by such Person or for the creation of which such Person directly or indirectly received payment), or 6 (l) Liabilities with respect to other obligations to deliver goods or services in consideration of advance payments therefor; provided, however, that the "Indebtedness" of any Person shall not include Liabilities that were incurred by such Person on ordinary trade terms to vendors, suppliers, or other Persons providing goods and services for use by such Person in the ordinary course of its business, unless and until such Liabilities are outstanding more than 90 days past the original invoice or billing date therefor; provided, further, that the "Indebtedness" of NRP or its Affiliates (not including Borrower) or First Reserve Corporation or its Affiliates (not including Borrower) shall not be included in the definition of Indebtedness for the purposes hereof. "Initial Financial Statements" means the pro forma unaudited Consolidated financial statements of Borrower dated as of the date hereof. "Interest Payment Date" means with respect to any Base Rate Loan, the last Business Day of each calendar month, and with respect to each LIBOR Loan, the last day of the Interest Period that is applicable thereto (and for any LIBOR Loan with an Interest Period longer than three months, on each three-month anniversary of such LIBOR Loan). "Interest Period" means, with respect to each particular LIBOR Loan in a Borrowing, the period specified in the Borrowing Notice or Continuation/Conversion Notice applicable thereto, beginning on and including the date specified in such Borrowing Notice or Continuation/Conversion Notice (which must be a Business Day), and ending one, two, three, or six months thereafter, as Borrower may elect in such notice; provided that: (a) any Interest Period which would otherwise end on a day which is not a Business Day shall be extended to the next succeeding Business Day unless such Business Day falls in another calendar month, in which case such Interest Period shall end on the next preceding Business Day; (b) any Interest Period which begins on the last Business Day in a calendar month (or on a day for which there is no numerically corresponding day in the calendar month at the end of such Interest Period) shall end on the last Business Day in a calendar month; and (c) notwithstanding the foregoing, any Interest Period which would otherwise end after the last day of the Commitment Period shall end on the last day of the Commitment Period (or, if the last day of the Commitment Period is not a Business Day, on the next preceding Business Day). "Internal Revenue Code" means the United States Internal Revenue Code of 1986, as amended from time to time and any successor statute or statutes, together with all rules and regulations promulgated with respect thereto. "Investment" means any investment, made directly or indirectly, in any Person or any property, whether by purchase, acquisition of shares of capital stock, indebtedness or other obligations or securities or by loan, advance, capital contribution or otherwise and whether made in cash, by the transfer of property, or by any other means. "Law" means any statute, law, regulation, ordinance, rule, treaty, judgment, order, decree, permit, concession, franchise, license, agreement or other governmental restriction of the United States or any state or political subdivision thereof or of any foreign country or any department, 7 province or other political subdivision thereof. Any reference to a Law includes any amendment or modification to such Law, and all regulations, rulings, and other Laws promulgated under such Law. "Lender Hedging Contract" means any Hedging Contract entered into from time to time between Borrower and a counterparty that is a Lender or an Affiliate of a Lender. "Lender Hedging Obligations" means all obligations arising from time to time under Lender Hedging Contracts; provided that if such counterparty ceases to be a Lender hereunder or an Affiliate of a Lender hereunder, Lender Hedging Obligations shall only include such obligations to the extent arising from transactions entered into at the time such counterparty was a Lender hereunder or an Affiliate of a Lender hereunder. "Lender Parties" means Administrative Agent and all Lenders. "Lenders" means each signatory hereto (other than Borrower and any Restricted Person that is a party hereto), including Southwest Bank of Texas, N.A. in its capacity as a Lender hereunder rather than as Administrative Agent, and the successors of each such party as holder of a Note. "Lenders Schedule" means Schedule 3 hereto. "Liabilities" means, as to any Person, all indebtedness, liabilities and obligations of such Person, whether matured or unmatured, liquidated or unliquidated, primary or secondary, direct or indirect, absolute, fixed or contingent, and whether or not required to be considered pursuant to GAAP. "LIBOR Loan" means a Loan that bears interest at the Adjusted LIBOR Rate. "LIBOR Margin" means, on each day: (a) two and one-quarter percent (2.25%) per annum when the Debt/Cash Flow Ratio is less than 1.50 to 1.00 on such day. (b) two and one-half percent (2.50%) per annum when the Debt/Cash Flow Ratio is equal to or greater than 1.50 to 1.00 but less than 2.00 to 1.00 on such day. (c) two and three-quarters percent (2.75%) per annum when the Debt/Cash Flow Ratio is equal to or greater than 2.00 to 1.00 on such day. "LIBOR Rate" means, for any LIBOR Loan within a Borrowing and with respect to the related Interest Period therefor, (a) the per annum rate (rounded upwards, if necessary, to the nearest 1/16 of 1%) as determined on the basis of offered rates for deposits in U.S. dollars , for a period of time comparable to such Interest Period which appears on Telerate Page 3750 (or any successor page) as of 11:00 a.m., Houston, Texas time (or, as soon thereafter as practicable) two Business Days prior to the first day of such Interest Period and in an amount comparable to the principal amount of the LIBOR Loans to which such Interest Period relates, or (b) in the event 8 the rate referenced in the preceding subsection (a) is not available, the per annum rate (rounded upward, if necessary, to the nearest 1/16 of 1%) equal to the rate of interest at which Administrative Agent is offered deposits in U.S. dollars (for delivery on the first day of such Interest Period) in same day funds in the approximate amount of the applicable LIBOR Loans and with a term equivalent to such Interest Period in the offshore U.S. dollar market at approximately 11:00 a.m. (Houston, Texas time) (or as soon thereafter as practical) two Business Days prior to the first day of such Interest Period. "Lien" means, with respect to any property or assets, any right or interest therein of a creditor to secure Liabilities owed to it or any other arrangement with such creditor which provides for the payment of such Liabilities out of such property or assets or which allows such creditor to have such Liabilities satisfied out of such property or assets prior to the general creditors of any owner thereof, including any lien, mortgage, security interest, pledge, deposit, production payment, rights of a vendor under any title retention or conditional sale agreement or lease substantially equivalent thereto, tax lien, mechanic's or materialman's lien, or any other charge or encumbrance for security purposes, whether arising by Law or agreement or otherwise, but excluding any right of offset which arises without agreement in the ordinary course of business. "Lien" also means any filed financing statement, any registration of a pledge (such as with an issuer of uncertificated securities), or any other arrangement or action which would serve to perfect a Lien described in the preceding sentence, regardless of whether such financing statement is filed, such registration is made, or such arrangement or action is undertaken before or after such Lien exists. "Loan Documents" means this Agreement, the Notes, the Security Documents, any Lender Hedging Contracts, and all other agreements, certificates, documents, instruments and writings at any time delivered in connection herewith or therewith (exclusive of term sheets and commitment letters). "Loans" means all loans made by Lenders to Borrower under this Agreement. "Majority Lenders" means Lenders whose aggregate Percentage Shares equal or exceed fifty-one percent (51%). "Material Adverse Change" means a materially adverse change, from the state of affairs presented in the Initial Financial Statements or as represented or warranted in any Loan Document, all such representations and warranties taken as a whole, to (d) Borrower's Consolidated financial condition, (e) Borrower's Consolidated operations or properties, considered as a whole, (f) Borrower's ability to timely pay the Obligations, or (g) the enforceability of the material terms of any Loan Documents. "Maturity Date" means December 31, 2008, or if earlier, the day on which the Notes first become due and payable in full. "Note" has the meaning given to such term in Section 2.1. "NRP" means Natural Resource Partners L.P., a Delaware limited partnership. 9 "NRP Credit Facility" means the credit facility under that certain Credit Agreement dated October 17, 2002 among NRP and the administrative agent and lenders a party thereto, as amended, restated or supplemented, and any replacement or refinancing facility therefor. "NRP Limited Partnership Agreement" means the First Amended and Restated Agreement of Limited Partnership of NRP dated October 17, 2002, as may be amended from time to time in accordance therewith. "NRP Material Adverse Change" means a materially adverse change, from the state of affairs as of December 31, 2002, to (h) NRP's Consolidated financial condition, or (i) NRP's Consolidated operations or properties, considered as a whole. "Obligations" means all Liabilities from time to time owing by any Restricted Person to any Lender Party under or pursuant to any of the Loan Documents, including all Lender Hedging Obligations. "Obligation" means any part of the Obligations. "Percentage Share" means, with respect to any Lender (a) when used in Section 2.1, 2.2 or 2.5, in any Borrowing Notice or when no Loans are outstanding hereunder, the percentage set forth below such Lender's name on the Lenders Schedule, and (b) when used otherwise, the percentage obtained by dividing (i) the sum of the unpaid principal balance of such Lender's Loans at the time in question by (ii) the sum of the aggregate unpaid principal balance of all Loans at such time. "Permitted Liens" means: (a) statutory Liens for taxes, assessments or other governmental charges or levies which are not yet delinquent or which are being contested in good faith by appropriate action and for which adequate reserves have been maintained in accordance with GAAP; (b) landlords', operators', carriers', warehousemen's, repairmen's, mechanics', materialmen's, or other like Liens which do not secure Indebtedness, in each case only to the extent arising in the ordinary course of business and only to the extent securing obligations which are not delinquent or which are being contested in good faith by appropriate proceedings and for which adequate reserves have been maintained in accordance with GAAP; and (c) Liens under the Security Documents. "Person" means an individual, corporation, partnership, limited liability company, association, joint stock company, trust or trustee thereof, estate or executor thereof, unincorporated organization or joint venture, Tribunal, or any other legally recognizable entity. "Regulation D" means Regulation D of the Board of Governors of the Federal Reserve System as from time to time in effect. "Reserve Requirement" means, at any time, the stated maximum rate of all reserve requirements (including, without limitation, any marginal, special, supplemental, emergency or other reserves) that is specified from time to time by the Board of Governors of the Federal 10 Reserve System (or any successor) for determining maximum reserve requirements with respect to eurodollar funding (currently referred to as "Eurocurrency liabilities") in Regulation D maintained by member banks of the Federal Reserve System. Without limiting the effect of the foregoing, the Reserve Requirement shall reflect any other reserves required to be maintained by such member banks with respect to (a) any category of liabilities which includes deposits by reference to which the Adjusted LIBOR Rate is to be determined, or (b) any category of extensions of credit or other assets which include LIBOR Loans. "Restricted Person" means any of Borrower and each Subsidiary of Borrower. "Security Documents" means the instruments listed in the Security Schedule and all other security agreements, pledges, guaranties, financing statements, continuation statements, extension agreements and other agreements or instruments now, heretofore, or hereafter delivered by any Restricted Person to Administrative Agent in connection with this Agreement or any transaction contemplated hereby to secure or guarantee the payment of any part of the Obligations, the Lender Hedging Obligations or the performance of any Restricted Person's other duties and obligations under the Loan Documents. "Security Schedule" means Schedule 2 hereto. "Sweep Event" means NRP shall at any time fail to declare and pay a quarterly distribution with respect to its common units equal to or in excess of $0.5125 per common unit. "Sweep Termination Event" means, following a Sweep Event, the first day following two consecutive quarterly distributions equal to or in excess of $0.5125 per common unit per quarter by NRP with respect to its common units. "Subsidiary" means, with respect to any Person, any corporation, association, partnership, limited liability company, joint venture, or other business or corporate entity, enterprise or organization which is directly or indirectly (through one or more intermediaries) controlled by or owned fifty percent or more by such Person. "Termination Event" means (a) the occurrence with respect to any ERISA Plan of (i) a reportable event described in Section 4043(b)(5) or (6) of ERISA or (ii) any other reportable event described in Section 4043(b) of ERISA other than a reportable event not subject to the provision for 30-day notice to the Pension Benefit Guaranty Corporation pursuant to a waiver by such corporation under Section 4043(a) of ERISA, or (b) the withdrawal of any ERISA Affiliate from an ERISA Plan during a plan year in which it was a "substantial employer" as defined in Section 4001(a)(2) of ERISA, or (c) the filing of a notice of intent to terminate any ERISA Plan or the treatment of any ERISA Plan amendment as a termination under Section 4041 of ERISA, or (d) the institution of proceedings to terminate any ERISA Plan by the Pension Benefit Guaranty Corporation under Section 4042 of ERISA, or (e) any other event or condition which might constitute grounds under Section 4042 of ERISA for the termination of, or the appointment of a trustee to administer, any ERISA Plan. "Tribunal" means any government, any arbitration panel, any court or any governmental department, commission, board, bureau, agency or instrumentality of the United States of 11 America or any state, province, commonwealth, nation, territory, possession, county, parish, town, township, village or municipality, whether now or hereafter constituted or existing. "Type" means, with respect to any Loans, the characterization of such Loans as either Base Rate Loans or LIBOR Loans. Section 1.2. Exhibits and Schedules; Additional Definitions. All Exhibits and Schedules attached to this Agreement are a part hereof for all purposes. Reference is hereby made to the Security Schedule for the meaning of certain terms defined therein and used but not defined herein, which definitions are incorporated herein by reference. Section 1.3. Amendment of Defined Instruments. Unless the context otherwise requires or unless otherwise provided herein the terms defined in this Agreement which refer to a particular agreement, instrument or document also refer to and include all renewals, extensions, modifications, amendments and restatements of such agreement, instrument or document, provided that nothing contained in this section shall be construed to authorize any such renewal, extension, modification, amendment or restatement. Section 1.4. References and Titles. All references in this Agreement to Exhibits, Schedules, articles, sections, subsections and other subdivisions refer to the Exhibits, Schedules, articles, sections, subsections and other subdivisions of this Agreement unless expressly provided otherwise. Exhibits and Schedules to any Loan Document shall be deemed incorporated by reference in such Loan Document. References to any document, instrument, or agreement (a) shall include all exhibits, schedules, and other attachments thereto, and (b) shall include all documents, instruments, or agreements issued or executed in replacement thereof. Titles appearing at the beginning of any subdivisions are for convenience only and do not constitute any part of such subdivisions and shall be disregarded in construing the language contained in such subdivisions. The words "this Agreement", "this instrument", "herein", "hereof", "hereby", "hereunder" and words of similar import refer to this Agreement as a whole and not to any particular subdivision unless expressly so limited. The phrases "this section" and "this subsection" and similar phrases refer only to the sections or subsections hereof in which such phrases occur. The word "or" is not exclusive, and the word "including" (in its various forms) means "including without limitation". Pronouns in masculine, feminine and neuter genders shall be construed to include any other gender, and words in the singular form shall be construed to include the plural and vice versa, unless the context otherwise requires. Accounting terms have the meanings assigned to them by GAAP, as applied to the accounting entity to which they refer. References to "days" shall mean calendar days, unless the term "Business Day" is used. Unless otherwise specified, references herein to any particular Person also refer to its successors and permitted assigns. Section 1.5. Calculations and Determinations. All calculations under the Loan Documents of interest chargeable with respect to LIBOR Loans and of fees shall be made on the basis of actual days elapsed (including the first day but excluding the last) and a year of 360 days. All other calculations of interest made under the Loan Documents shall be made on the basis of actual days elapsed (including the first day but excluding the last) and a year of 365 or 366 days, as appropriate. Each determination by a Lender Party of amounts to be paid under Article III or any other matters which are to be determined hereunder by a Lender Party (such as any LIBOR 12 Rate, Adjusted LIBOR Rate, Business Day, Interest Period, or Reserve Requirement) shall, in the absence of manifest error, be conclusive and binding. Unless otherwise expressly provided herein or unless Majority Lenders otherwise consent all financial statements and reports furnished to any Lender Party hereunder shall be prepared and all financial computations and determinations pursuant hereto shall be made in accordance with GAAP. Section 1.6. Joint Preparation; Construction of Indemnities and Releases. This Agreement and the other Loan Documents have been reviewed and negotiated by sophisticated parties with access to legal counsel and no rule of construction shall apply hereto or thereto which would require or allow any Loan Document to be construed against any party because of its role in drafting such Loan Document. All indemnification and release provisions of this Agreement shall be construed broadly (and not narrowly) in favor of the Persons receiving indemnification or being released. ARTICLE II - The Loans Section 2.1. Commitments to Lend; Notes. Subject to the terms and conditions hereof, each Lender agrees to make a single term loan to Borrower upon Borrower's request prior to December 31, 2003, provided that: (a) all Lenders are requested to make Loans of the same Type in accordance with their respective Percentage Shares, and (b) the aggregate amount of such Loans shall not exceed $25,000,000. The obligation of Borrower to repay to each Lender the Loan made by such Lender, together with interest accruing in connection therewith, shall be evidenced by a single promissory note (herein called such Lender's "Note") made by Borrower payable to the order of such Lender in the form of Exhibit A with appropriate insertions. The amount of principal owing on any Lender's Note at any given time shall be the amount of the Loan made by such Lender minus all payments of principal theretofore received by such Lender on such Note. Interest on each Note shall accrue and be due and payable as provided herein and therein. Each Note shall be due and payable as provided herein and therein, and shall be due and payable in full on the Maturity Date. Borrower may borrow and repay, but may not reborrow hereunder. Section 2.2. Request for Loans. Borrower must give to Administrative Agent written notice (or telephonic notice promptly confirmed in writing) of its requested Borrowing of the Loans to be advanced by Lenders. Such notice shall constitute a "Borrowing Notice" hereunder and must: (a) specify (i) the aggregate amount of such Borrowing of Base Rate Loans and the date on which such Base Rate Loans are to be advanced, or (ii) the aggregate amount of such Borrowing of LIBOR Loans, the date on which such LIBOR Loans are to be advanced (which shall be the first day of the Interest Period which is to apply thereto), and the length of the applicable Interest Period; and 13 (b) be received by Administrative Agent not later than 10:00 a.m., Houston, Texas time, on (i) the day on which such Base Rate Loans are to be made, or (ii) the third Business Day preceding the day on which such LIBOR Loans are to be made. Such written request or confirmation must be made in the form and substance of the "Borrowing Notice" attached hereto as Exhibit B, duly completed. Such telephonic request shall be deemed a representation, warranty, acknowledgment and agreement by Borrower as to the matters which are required to be set out in such written confirmation. Upon receipt of the Borrowing Notice, Administrative Agent shall give each Lender prompt notice of the terms thereof. If all conditions precedent to the Loans have been met, each Lender will on the date requested promptly remit to Administrative Agent at Administrative Agent's office in Houston, Texas the amount of such Lender's Loan in immediately available funds, and upon receipt of such funds, unless to its actual knowledge any conditions precedent to such Loans have been neither met nor waived as provided herein, Administrative Agent shall promptly make such Loans available to Borrower. Unless Administrative Agent shall have received prompt notice from a Lender that such Lender will not make available to Administrative Agent such Lender's Loan, Administrative Agent may in its discretion assume that such Lender has made such Loan available to Administrative Agent in accordance with this section and Administrative Agent may if it chooses, in reliance upon such assumption, make such Loan available to Borrower. If and to the extent such Lender shall not so make its Loan available to Administrative Agent, such Lender and Borrower severally agree to pay or repay to Administrative Agent within three Business Days after demand the amount of such Loan together with interest thereon, for each day from the date such amount was made available to Borrower until the date such amount is paid or repaid to Administrative Agent, with interest at (i) the Federal Funds Rate, if such Lender is making such payment and (ii) the interest rate applicable at the time to the other Loans made on such date, if Borrower is making such repayment. If neither such Lender nor Borrower pays or repays to Administrative Agent such amount within such three-Business Day period, Administrative Agent shall in addition to such amount be entitled to recover from such Lender and from Borrower, on demand, interest thereon at the Default Rate applicable to Base Rate Loans, calculated from the date such amount was made available to Borrower. The failure of any Lender to make any Loan to be made by it hereunder shall not relieve any other Lender of its obligation hereunder, if any, to make its Loan, but no Lender shall be responsible for the failure of any other Lender to make any Loan to be made by such other Lender. Section 2.3. Continuations and Conversions of Loans. Borrower may make the following elections with respect to outstanding Loans: to convert Base Rate Loans to LIBOR Loans, to convert LIBOR Loans to Base Rate Loans on the last day of the Interest Period applicable thereto, and to continue LIBOR Loans beyond the expiration of such Interest Period by designating a new Interest Period to take effect at the time of such expiration. In making such elections, Borrower may combine existing Loans made pursuant to separate Borrowings into one new Borrowing or divide existing Loans made pursuant to one Borrowing into separate new Borrowings, provided that Borrower may have no more than six Borrowings of LIBOR Loans outstanding at any time. To make any such election, Borrower must give to Administrative Agent written notice (or telephonic notice promptly confirmed in writing) of any such Conversion or Continuation of existing Loans, with a separate notice given for each new Borrowing. Each such notice constitutes a "Continuation/Conversion Notice" hereunder and must: 14 (a) specify the existing Loans which are to be Continued or Converted; (b) specify (i) the aggregate amount of any Borrowing of Base Rate Loans into which such existing Loans are to be continued or converted and the date on which such Continuation or Conversion is to occur, or (ii) the aggregate amount of any Borrowing of LIBOR Loans into which such existing Loans are to be continued or converted, the date on which such Continuation or Conversion is to occur (which shall be the first day of the Interest Period which is to apply to such LIBOR Loans), and the length of the applicable Interest Period; and (c) be received by Administrative Agent not later than 10:00 a.m., Houston, Texas time, on (i) the day on which any such Continuation or Conversion to Base Rate Loans is to occur, or (ii) the third Business Day preceding the day on which any such Continuation or Conversion to LIBOR Loans is to occur. Each such written request or confirmation must be made in the form and substance of the "Continuation/Conversion Notice" attached hereto as Exhibit C, duly completed. Each such telephonic request shall be deemed a representation, warranty, acknowledgment and agreement by Borrower as to the matters which are required to be set out in such written confirmation. Upon receipt of any such Continuation/Conversion Notice, Administrative Agent shall give each Lender prompt notice of the terms thereof. Each Continuation/Conversion Notice shall be irrevocable and binding on Borrower. During the continuance of any Default, Borrower may not make any election to convert existing Loans into LIBOR Loans or continue existing Loans as LIBOR Loans. If (due to the existence of a Default or for any other reason) Borrower fails to timely and properly give any Continuation/Conversion Notice with respect to a Borrowing of existing LIBOR Loans at least three days prior to the end of the Interest Period applicable thereto, such LIBOR Loans shall automatically be converted into Base Rate Loans at the end of such Interest Period. No new funds shall be repaid by Borrower or advanced by any Lender in connection with any Continuation or Conversion of existing Loans pursuant to this section, and no such Continuation or Conversion shall be deemed to be a new advance of funds for any purpose; such Continuations and Conversions merely constitute a change in the interest rate applicable to already outstanding Loans. Section 2.4. Use of Proceeds. Borrower shall use the Loans to finance the Acquisition. In no event shall the funds from any Loan be used directly or indirectly by any Person for personal, family, household or agricultural purposes or for the purpose, whether immediate, incidental or ultimate, of purchasing, acquiring or carrying any "margin stock" or any "margin securities" (as such term is defined in Regulation U promulgated by the Board of Governors of the Federal Reserve System) or to extend credit to others directly or indirectly for the purpose of purchasing or carrying any such margin stock or margin securities. Borrower represents and warrants that Borrower is not engaged principally, or as one of Borrower's important activities, in the business of extending credit to others for the purpose of purchasing or carrying such margin stock or margin securities. Section 2.5. Interest Rates and Fees. 15 (a) Interest Rates. As provided in the Notes: (i) each Base Rate Loan shall bear interest on each day outstanding at the Adjusted Base Rate in effect on such day, (ii) each LIBOR Loan shall bear interest on each day during the related Interest Period at the related Adjusted LIBOR Rate in effect on such day, and (iii) if an Event of Default has occurred and is continuing, all Loans shall bear interest on each day outstanding at the applicable Default Rate. Past due payments of principal and interest shall bear interest at the rates and in the manner set forth in the Notes. (b) Administrative Agent's Fees. In addition to all other amounts due to Administrative Agent under the Loan Documents, Borrower will pay fees to Administrative Agent as described in a fee letter agreement of even date herewith between Administrative Agent and Borrower, on the same basic terms as set forth in the original fee letter agreement dated December 10, 2003, between the Administrative Agent and FRC-WPP Investment, L.P. Section 2.6. Optional Prepayments. Borrower may, upon three Business Days' notice to the Administrative Agent, from time to time and without premium or penalty, prepay the Notes, in whole or in part, so long as the aggregate amounts of all partial prepayments of principal on the Notes equals $250,000 or any higher integral multiple of $250,000; accompanied by any reimbursements owing to Lenders pursuant to Section 3.5 resulting from any prepayment of any LIBOR Loan. Each prepayment of principal under this section shall be accompanied by all interest then accrued and unpaid on the principal so prepaid and shall be applied to the Loans in inverse order of maturity. Any principal or interest prepaid pursuant to this section shall be in addition to, and not in lieu of, all payments otherwise required to be paid under the Loan Documents at the time of such prepayment. Section 2.7. Scheduled Payments and Mandatory Prepayments. (a) Commencing December 31, 2004, and on the last day of each Fiscal Quarter thereafter, principal shall be due and payable in installments equal to $1,250,000 per Fiscal Quarter. Interest shall be due and payable on each Interest Payment Date. All outstanding principal and accrued and unpaid interest shall be due and payable in full on the Maturity Date. (b) If at any time Borrower sells, assigns, transfers or otherwise disposes of any Acquired Units, Borrower shall promptly after such sale or other disposition (and in any event within three Business Days thereafter) prepay the outstanding principal of the Loans in an amount equal to (i) the outstanding principal balance of the Notes times (ii) the number of Acquired Units sold, assigned, transferred or disposed of divided by (iii) the number of Acquired Units owned by Borrower immediately prior to such sale, assignment, transfer or disposition; unless, at the time of such sale, assignment, transfer or disposition: (x) the Acquired Units sold, assigned, transferred or disposed of shall have converted from subordinated units into common units; (y) the Acquired Units owned by Borrower following such sale, assignment, transfer or disposition times the per common unit price for such transaction shall exceed six times the outstanding principal balance of the Notes; and 16 (z) the Debt/Cash Flow Ratio as of the date of such sale, assignment, transfer or disposition shall not exceed 2.00 to 1.00. Any mandatory prepayment under this Section 2.7(b) shall ratably reduce the remaining installments to become due pursuant to Section 2.7(a) and shall be applied ratably to such remaining installments; provided, in the event the date of any such prepayment is less than thirty (30) days prior to the due date of the next such installment, such prepayment shall be applied first to such next installment and then ratably to the remaining installments. Following the payment or prepayment of all such installments, any such mandatory prepayments shall be applied to the remaining outstanding principal balance of the Loans. (c) Upon the occurrence of a Sweep Event, and continuing until such time as a Sweep Termination Event shall thereafter occur, the Administrative Agent may apply all amounts on deposit in or thereafter deposited into the Cash Collateral Account to the next scheduled principal installment on or after the date of such application; provided, that to the extent such amounts on deposit in the Cash Collateral Account prior to the date of any such scheduled installment payment are in excess of the amount of the scheduled installment, the Administrative Agent may apply such excess amount ratably to the remaining installments to become due pursuant to Section 2.7(a). Following the payment or prepayment of all such installments, any such mandatory prepayments shall be applied to the remaining outstanding principal balance of the Loans. (d) Each prepayment of principal under this section shall be accompanied by all interest then accrued and unpaid on the principal so prepaid. Except as expressly set forth in Section 2.7(b) above, any principal or interest prepaid pursuant to this section shall be in addition to, and not in lieu of, all payments otherwise required to be paid under the Loan Documents at the time of such prepayment. ARTICLE III - Payments to Lenders Section 3.1. General Procedures. Borrower will make each payment which it owes under the Loan Documents to Administrative Agent for the account of the Lender Party to whom such payment is owed, in lawful money of the United States of America, without set-off, deduction or counterclaim, and in immediately available funds. Each such payment must be received by Administrative Agent not later than 11:00 a.m., Houston, Texas time, on the date such payment becomes due and payable. Any payment received by Administrative Agent after such time will be deemed to have been made on the next following Business Day. Should any such payment become due and payable on a day other than a Business Day, the maturity of such payment shall be extended to the next succeeding Business Day, and, in the case of a payment of principal or past due interest, interest shall accrue and be payable thereon for the period of such extension as provided in the Loan Document under which such payment is due. Each payment under a Loan Document shall be due and payable at the place provided therein and, if no specific place of payment is provided, shall be due and payable at the place of payment of Administrative Agent's Note. When Administrative Agent collects or receives money on account of the Obligations, Administrative Agent shall distribute all money so collected or received, and each Lender Party shall apply all such money so distributed (subject to the provisions of Section 8.3 with respect to application of proceeds of sale of Collateral), as follows: 17 (a) first, for the payment of all Obligations which are then due, other than Lender Hedging Obligations (and if such money is insufficient to pay all such Obligations, first to any reimbursements due Administrative Agent under Section 6.9 or 10.4 and then to the partial payment of all such other Obligations, other than Lender Hedging Obligations, then due in proportion to the amounts thereof, or as Lender Parties shall otherwise agree); (b) then, to the extent such money received is pursuant to the exercise of remedies under the Security Documents only, for the payment of all Lender Hedging Obligations (and if such money is insufficient to pay all such Lender Hedging Obligations, then to the partial payment of such Lender Hedging Obligations then due in proportion to the amounts thereof); (c) then, for the prepayment of amounts owing under the Loan Documents (other than principal on the Notes) if so specified by Borrower; (d) then, for the prepayment of principal on the Notes, together with accrued and unpaid interest on the principal so prepaid; and (e) last, for the payment or prepayment of any other Obligations. All payments applied to principal or interest on any Note shall be applied first to any interest then due and payable, then to principal then due and payable, and last to any prepayment of principal and interest in compliance with Sections 2.6 and 2.7. All distributions of amounts described in any of subsections (b), (d) or (e) above shall be made by Administrative Agent pro rata to each Lender Party then owed Obligations described in such subsection in proportion to all amounts owed to all Lender Parties which are described in such subsection; provided that if any Lender then owes payments to Administrative Agent under Section 9.9, any amounts otherwise distributable under this section to such Lender shall be deemed to belong to Administrative Agent to the extent of such unpaid payments, and Administrative Agent shall apply such amounts to make such unpaid payments rather than distribute such amounts to such Lender. Section 3.2. Capital Reimbursement. If either (a) the introduction or implementation of or the compliance with or any change in or in the interpretation of any Law, or (b) the introduction or implementation of or the compliance with any request, directive or guideline from any central bank or other governmental authority (whether or not having the force of Law) affects or would affect the amount of capital required or expected to be maintained by any Lender Party or any corporation controlling any Lender Party, then, upon demand by such Lender Party, Borrower will pay to Administrative Agent for the benefit of such Lender Party, from time to time as specified by such Lender Party, such additional amount or amounts which such Lender Party shall determine to be appropriate to compensate such Lender Party or any corporation controlling such Lender Party in light of such circumstances, to the extent that such Lender Party reasonably determines that the amount of any such capital would be increased or the rate of return on any such capital would be reduced by or in whole or in part based on the existence of the face amount of such Lender Party's Loans or commitments under this Agreement. Section 3.3. Increased Cost of LIBOR Loans. If any applicable Law (whether now in effect or hereinafter enacted or promulgated, including Regulation D) or any interpretation or 18 administration thereof by any governmental authority charged with the interpretation or administration thereof (whether or not having the force of Law): (a) shall change the basis of taxation of payments to any Lender Party of any principal, interest, or other amounts attributable to any LIBOR Loan or otherwise due under this Agreement in respect of any LIBOR Loan (other than taxes imposed on the overall net income of such Lender Party or any Applicable Lending Office of such Lender Party by any jurisdiction in which such Lender Party or any such Applicable Lending Office is located); or (b) shall change, impose, modify, apply or deem applicable any reserve, special deposit or similar requirements in respect of any LIBOR Loan (excluding those for which such Lender Party is fully compensated pursuant to adjustments made in the definition of LIBOR Rate) or against assets of, deposits with or for the account of, or credit extended by, such Lender Party; or (c) shall impose on any Lender Party or the interbank eurocurrency deposit market any other condition affecting any LIBOR Loan, the result of which is to increase the cost to any Lender Party of funding or maintaining any LIBOR Loan or to reduce the amount of any sum receivable by any Lender Party in respect of any LIBOR Loan by an amount deemed by such Lender Party to be material, then such Lender Party shall promptly notify Administrative Agent and Borrower in writing of the happening of such event and of the amount required to compensate such Lender Party for such event (on an after-tax basis, taking into account any taxes on such compensation), whereupon (i) Borrower shall pay such amount to Administrative Agent for the account of such Lender Party and (ii) Borrower may elect, by giving to Administrative Agent and such Lender Party not less than three Business Days' notice, to convert all (but not less than all) of any such LIBOR Loans into Base Rate Loans. Section 3.4. Availability. If (a) any change in applicable Laws, or in the interpretation or administration thereof of or in any jurisdiction whatsoever, domestic or foreign, shall make it unlawful or impracticable for any Lender Party to fund or maintain LIBOR Loans, or shall materially restrict the authority of any Lender Party to purchase or take offshore deposits of dollars (i.e., "eurodollars"), or (b) any Lender Party determines that matching deposits appropriate to fund or maintain any LIBOR Loan are not available to it, or (c) any Lender Party determines that the formula for calculating the LIBOR Rate does not fairly reflect the cost to such Lender Party of making or maintaining loans based on such rate, then, upon notice by such Lender Party to Borrower and Administrative Agent, Borrower's right to elect LIBOR Loans from such Lender Party shall be suspended to the extent and for the duration of such illegality, impracticability or restriction and all LIBOR Loans of such Lender Party which are then outstanding or are then the subject of any Borrowing Notice and which cannot lawfully or practicably be maintained or funded shall immediately become or remain, or shall be funded as, Base Rate Loans of such Lender Party. Borrower agrees to indemnify each Lender Party and hold it harmless against all costs, expenses, claims, penalties, liabilities and damages which may result from any such change in Law, interpretation or administration. Such indemnification shall be on an after-tax basis, taking into account any taxes imposed on the amounts paid as indemnity. 19 Section 3.5. Funding Losses. In addition to its other obligations hereunder, Borrower will indemnify each Lender Party against, and reimburse each Lender Party on demand for, any loss or expense incurred or sustained by such Lender Party (including any loss or expense incurred by reason of the liquidation or reemployment of deposits or other funds acquired by a Lender Party to fund or maintain LIBOR Loans), as a result of (a) any payment or prepayment (whether authorized or required hereunder or otherwise) of all or a portion of a LIBOR Loan on a day other than the day on which the applicable Interest Period ends, (b) any payment or prepayment, whether required hereunder or otherwise, of a Loan made after the delivery, but before the effective date, of a Continuation/Conversion Notice, if such payment or prepayment prevents such Continuation/Conversion Notice from becoming fully effective, (c) the failure of any Loan to be made or of any Continuation/Conversion Notice to become effective due to any condition precedent not being satisfied or due to any other action or inaction of any Restricted Person, or (d) any Conversion (whether authorized or required hereunder or otherwise) of all or any portion of any LIBOR Loan into a Base Rate Loan or into a different LIBOR Loan on a day other than the day on which the applicable Interest Period ends. Such indemnification shall be on an after-tax basis, taking into account any taxes imposed on the amounts paid as indemnity. Section 3.6. Reimbursable Taxes. Borrower covenants and agrees that: (a) Borrower will indemnify each Lender Party against and reimburse each Lender Party for all present and future income, stamp and other taxes, levies, costs and charges whatsoever imposed, assessed, levied or collected on or in respect of this Agreement or any LIBOR Loans (whether or not legally or correctly imposed, assessed, levied or collected), excluding, however, any taxes imposed on or measured by the overall net income of Administrative Agent or such Lender Party or any Applicable Lending Office of such Lender Party by any jurisdiction in which such Lender Party or any such Applicable Lending Office is located (all such non-excluded taxes, levies, costs and charges being collectively called "Reimbursable Taxes" in this section). Such indemnification shall be on an after-tax basis, taking into account any taxes imposed on the amounts paid as indemnity. (b) All payments on account of the principal of, and interest on, each Lender Party's Loans and Note, and all other amounts payable by Borrower to any Lender Party hereunder, shall be made in full without set-off or counterclaim and shall be made free and clear of and without deductions or withholdings of any nature by reason of any Reimbursable Taxes, all of which will be for the account of Borrower. In the event of Borrower being compelled by Law to make any such deduction or withholding from any payment to any Lender Party, Borrower shall pay on the due date of such payment, by way of additional interest, such additional amounts as are needed to cause the amount receivable by such Lender Party after such deduction or withholding to equal the amount which would have been receivable in the absence of such deduction or withholding. If Borrower should make any deduction or withholding as aforesaid, Borrower shall within 60 days thereafter forward to such Lender Party an official receipt or other official document evidencing payment of such deduction or withholding. (c) If Borrower is ever required to pay any Reimbursable Tax with respect to any LIBOR Loan, Borrower may elect, by giving to Administrative Agent and such Lender Party not less than three Business Days' notice, to convert all (but not less than all) of any such LIBOR 20 Loan into a Base Rate Loan, but such election shall not diminish Borrower's obligation to pay all Reimbursable Taxes. (d) Notwithstanding the foregoing provisions of this section, Borrower shall be entitled, to the extent it is required to do so by Law, to deduct or withhold (and not to make any indemnification or reimbursement for) income or other similar taxes imposed by the United States of America (other than any portion thereof attributable to a change in federal income tax Laws effected after the date hereof) from interest, fees or other amounts payable hereunder for the account of any Lender Party, other than a Lender Party (i) who is a U.S. person for Federal income tax purposes or (ii) who has the Prescribed Forms on file with Administrative Agent (with copies provided to Borrower) for the applicable year to the extent deduction or withholding of such taxes is not required as a result of the filing of such Prescribed Forms, provided that if Borrower shall so deduct or withhold any such taxes, it shall provide a statement to Administrative Agent and such Lender Party, setting forth the amount of such taxes so deducted or withheld, the applicable rate and any other information or documentation which such Lender Party may reasonably request for assisting such Lender Party to obtain any allowable credits or deductions for the taxes so deducted or withheld in the jurisdiction or jurisdictions in which such Lender Party is subject to tax. As used in this section, "Prescribed Forms" means such duly executed forms or statements, and in such number of copies, which may, from time to time, be prescribed by Law and which, pursuant to applicable provisions of (x) an income tax treaty between the United States and the country of residence of the Lender Party providing the forms or statements, (y) the Internal Revenue Code, or (z) any applicable rules or regulations thereunder, permit Borrower to make payments hereunder for the account of such Lender Party free of such deduction or withholding of income or similar taxes. ARTICLE IV - Conditions Precedent to Lending Section 4.1. Documents to be Delivered. No Lender has any obligation to make its Loan unless Administrative Agent shall have received all of the following, at Administrative Agent's office in Houston, Texas, duly executed and delivered and in form, substance and date satisfactory to Administrative Agent: (a) This Agreement and any other documents that Lenders are to execute in connection herewith. (b) Each Note. (c) Each Security Document listed in the Security Schedule. (d) Certain certificates of Borrower including: (i) An "Omnibus Certificate" of the Chief Financial Officer of the General Partner of Borrower, which shall contain the names and signatures of the managers of the General Partner of Borrower authorized to execute Loan Documents for and on behalf of Borrower and which shall certify to the truth, correctness and completeness of the following exhibits attached thereto: (1) a copy of resolutions duly adopted by the board of directors/managers of the General Partner of Borrower and in full force and effect at 21 the time this Agreement is entered into, authorizing the execution of this Agreement and the other Loan Documents delivered or to be delivered in connection herewith and the consummation of the transactions contemplated herein and therein, (2) a copy of the charter documents of the General Partner of Borrower and of Borrower and all amendments thereto, certified by the appropriate official of General Partner's and Borrower's respective states of organization, and (3) copies of any bylaws/regulations or operating agreement of the General Partner of Borrower and of Borrower's Limited Partnership Agreement; and (ii) A "Compliance Certificate" of a manager of the General Partner of Borrower, of even date with such Loan, in which such officers certify to the satisfaction of the conditions set out in subsections (a), (b), (c) and (d) of Section 4.2. (e) Certificate (or certificates) of the due formation, valid existence and good standing of Borrower in the State of Delaware and of General Partner in the State of Delaware, issued by the appropriate authorities of such jurisdiction. (f) A favorable opinion of Gibson Dunn & Crutcher LLP, counsel for Borrower and General Partner, substantially in the form set forth in Exhibit E. (g) The Initial Financial Statements and a pro forma compliance certificate as of September 30, 2003 with respect to compliance with Section 7.11 hereof. (h) Intentionally deleted. (i) Establishment of the Cash Collateral Account with Administrative Agent. (j) Lenders shall have reviewed and approved in their sole discretion the terms of the NRP Limited Partnership Agreement, the Acquired Units, including without limitation distribution, registration and conversion rights associated therewith, and any agreements between Borrower and the other owners, managers or partners of NRP with respect to NRP and/or the Acquired Units. (k) Lenders shall have received evidence confirming an equity investment in Borrower in an amount not less than $86,000,000, on terms and conditions satisfactory to Lenders. (l) Lenders shall have received executed counterparts of the Acquisition Documents, in form and substance satisfactory to Lenders, and evidence confirming the consummation of the Acquisition and the transfer of ownership of the Acquired Units to Borrower. (m) Payment of all commitment, facility, agency and other fees required to be paid to any Lender pursuant to any Loan Documents or any commitment agreement heretofore entered into, including without limitation the fees and expenses of Thompson & Knight LLP, counsel to Administrative Agent, for which invoices have been presented on or before the initial funding of the Loan. 22 Section 4.2. Additional Conditions Precedent. No Lender has any obligation to make its Loan unless the following conditions precedent have been satisfied: (a) All representations and warranties made by any Restricted Person in any Loan Document shall be true in all material respects on and as of the date of such Loan (except to the extent that the facts upon which such representations are based have been changed by the extension of credit hereunder) as if such representations and warranties had been made as of the date of such Loan. (b) No Default shall exist at the date of such Loan. (c) No Material Adverse Change and no NRP Material Adverse Change shall have occurred. (d) Each Restricted Person shall have performed and complied with all agreements and conditions required in the Loan Documents to be performed or complied with by it on or prior to the date of such Loan. (e) The making of such Loan shall not be prohibited by any Law and shall not subject any Lender to any penalty or other onerous condition under or pursuant to any such Law. (f) Administrative Agent shall have received all documents and instruments which Administrative Agent has then requested, in addition to those described in Section 4.1 (including opinions of legal counsel for Restricted Persons and Administrative Agent; corporate documents and records; documents evidencing governmental authorizations, consents, approvals, licenses and exemptions; and certificates of public officials and of officers and representatives of Borrower and other Persons), as to (i) the accuracy and validity of or compliance with all representations, warranties and covenants made by any Restricted Person in this Agreement and the other Loan Documents, (ii) the satisfaction of all conditions contained herein or therein, and (iii) all other matters pertaining hereto and thereto. All such additional documents and instruments shall be satisfactory to Administrative Agent in form, substance and date. ARTICLE V - Representations and Warranties To confirm each Lender's understanding concerning Restricted Persons and Restricted Persons' businesses, properties and obligations and to induce each Lender to enter into this Agreement and to extend credit hereunder, Borrower represents and warrants to each Lender as of the date hereof that: Section 5.1. No Default. No event has occurred and is continuing which constitutes a Default. Section 5.2. Organization and Good Standing. Each Restricted Person is duly organized, validly existing and in good standing under the Laws of its jurisdiction of organization, having all powers required to carry on its business and enter into and carry out the transactions contemplated hereby. Each Restricted Person is duly qualified, in good standing, and authorized to do business in all other jurisdictions within the United States wherein the 23 character of the properties owned or held by it or the nature of the business transacted by it makes such qualification necessary. Section 5.3. Authorization. Each Restricted Person has duly taken all action necessary to authorize the execution and delivery by it of the Loan Documents to which it is a party and to authorize the consummation of the transactions contemplated thereby and the performance of its obligations thereunder. Borrower is duly authorized to borrow funds hereunder. Section 5.4. No Conflicts or Consents. The execution and delivery by the various Restricted Persons of the Loan Documents to which each is a party, the performance by each of its obligations under such Loan Documents, and the consummation of the transactions contemplated by the various Loan Documents, do not and will not (a) conflict with any provision of (i) any Law, (ii) the organizational documents of any Restricted Person, or (iii) any agreement, judgment, license, order or permit applicable to or binding upon any Restricted Person, (b) result in the acceleration of any Indebtedness owed by any Restricted Person, or (c) result in or require the creation of any Lien upon any assets or properties of any Restricted Person except as expressly contemplated or permitted in the Loan Documents. Except as expressly contemplated in the Loan Documents no consent, approval, authorization or order of, and no notice to or filing with, any Tribunal or third party is required in connection with the execution, delivery or performance by any Restricted Person of any Loan Document or to consummate any transactions contemplated by the Loan Documents. Section 5.5. Enforceable Obligations. This Agreement is, and the other Loan Documents when duly executed and delivered will be, legal, valid and binding obligations of each Restricted Person which is a party hereto or thereto, enforceable in accordance with their terms except as such enforcement may be limited by bankruptcy, insolvency or similar Laws of general application relating to the enforcement of creditors' rights. Section 5.6. Initial Financial Statements. Borrower has heretofore delivered to each Lender true, correct and complete copies of the Initial Financial Statements. The Initial Financial Statements fairly present Borrower's Consolidated financial position at the respective dates thereof and the Consolidated results of Borrower's operations and Borrower's Consolidated cash flows for the respective periods thereof. Since the date of the Initial Financial Statements no Material Adverse Change has occurred. All Initial Financial Statements were prepared in accordance with GAAP. Section 5.7. Other Obligations and Restrictions. No Restricted Person has any outstanding Liabilities of any kind (including contingent obligations, tax assessments, and unusual forward or long-term commitments) which are, in the aggregate, material to Borrower or material with respect to Borrower's Consolidated financial condition and not shown in the Initial Financial Statements or disclosed in Section 5.7 of the Disclosure Schedule or a Disclosure Report. Except as shown in the Initial Financial Statements or disclosed in Section 5.7 of the Disclosure Schedule or a Disclosure Report, no Restricted Person is subject to or restricted by any franchise, contract, deed, charter restriction, or other instrument or restriction which could cause a Material Adverse Change. 24 Section 5.8. Full Disclosure. No certificate, statement or other information delivered herewith or heretofore by any Restricted Person to any Lender in connection with the negotiation of this Agreement or in connection with any transaction contemplated hereby contains any untrue statement of a material fact or omits to state any material fact known to any Restricted Person (other than industry-wide risks normally associated with the types of businesses conducted by Restricted Persons) necessary to make the statements contained herein or therein not misleading as of the date made or deemed made. There is no fact known to any Restricted Person (other than industry-wide risks normally associated with the types of businesses conducted by Restricted Persons) that has not been disclosed to each Lender in writing which could cause a Material Adverse Change. There are no statements or conclusions in any Engineering Report which are based upon or include misleading information or fail to take into account material information regarding the matters reported therein, it being understood that each Engineering Report is necessarily based upon professional opinions, estimates and projections and that Borrower does not warrant that such opinions, estimates and projections will ultimately prove to have been accurate. Section 5.9. Litigation. Except as disclosed in the Initial Financial Statements or in Section 5.9 of the Disclosure Schedule or a Disclosure Report: (a) there are no actions, suits or legal, equitable, arbitrative or administrative proceedings pending, or to the knowledge of any Restricted Person threatened, against any Restricted Person before any Tribunal which could cause a Material Adverse Change, and (b) there are no outstanding judgments, injunctions, writs, rulings or orders by any such Tribunal against any Restricted Person or any Restricted Person's stockholders, partners, directors or officers which could cause a Material Adverse Change. Section 5.10. Labor Disputes and Acts of God. Except as disclosed in Section 5.10 of the Disclosure Schedule or a Disclosure Report, neither the business nor the properties of any Restricted Person has been affected by any fire, explosion, accident, strike, lockout or other labor dispute, drought, storm, hail, earthquake, embargo, act of God or of the public enemy or other casualty (whether or not covered by insurance), which could cause a Material Adverse Change. Section 5.11. ERISA Plans and Liabilities. All currently existing ERISA Plans are listed in Section 5.11 of the Disclosure Schedule or a Disclosure Report. Except as disclosed in the Initial Financial Statements or in Section 5.11 of the Disclosure Schedule or a Disclosure Report, no Termination Event has occurred with respect to any ERISA Plan and all ERISA Affiliates are in compliance with ERISA in all material respects. No ERISA Affiliate is required to contribute to, or has any other absolute or contingent liability in respect of, any "multiemployer plan" as defined in Section 4001 of ERISA. Except as set forth in Section 5.11 of the Disclosure Schedule or a Disclosure Report: (a) no "accumulated funding deficiency" (as defined in Section 412(a) of the Internal Revenue Code) exists with respect to any ERISA Plan, whether or not waived by the Secretary of the Treasury or his delegate, and (b) the current value of each ERISA Plan's benefits does not exceed the current value of such ERISA Plan's assets available for the payment of such benefits by more than $500,000. Section 5.12. Environmental and Other Laws. Except as disclosed in Section 5.12 of the Disclosure Schedule or a Disclosure Report: (a) Restricted Persons are conducting their businesses in material compliance with all applicable Laws, including Environmental Laws, and have and are in compliance with all licenses and permits required under any such Laws; (b) none 25 of the operations or properties of any Restricted Person is the subject of federal, state or local investigation evaluating whether any material remedial action is needed to respond to a release of any Hazardous Materials into the environment or to the improper storage or disposal (including storage or disposal at offsite locations) of any Hazardous Materials; (c) no Restricted Person (and to the best knowledge of Borrower, no other Person) has filed any notice under any Law indicating that any Restricted Person is responsible for the improper release into the environment, or the improper storage or disposal, of any material amount of any Hazardous Materials or that any Hazardous Materials have been improperly released, or are improperly stored or disposed of, upon any property of any Restricted Person; (d) no Restricted Person has transported or arranged for the transportation of any Hazardous Material to any location which is (i) listed on the National Priorities List under the Comprehensive Environmental Response, Compensation and Liability Act of 1980, as amended, listed for possible inclusion on such National Priorities List by the Environmental Protection Agency in its Comprehensive Environmental Response, Compensation and Liability Information System List, or listed on any similar state list or (ii) the subject of federal, state or local enforcement actions or other investigations which may lead to claims against any Restricted Person for clean-up costs, remedial work, damages to natural resources or for personal injury claims (whether under Environmental Laws or otherwise); and (e) no Restricted Person otherwise has any known material contingent liability under any Environmental Laws or in connection with the release into the environment, or the storage or disposal, of any Hazardous Materials. Each Restricted Person undertook, at the time of its acquisition of each of its material properties, all appropriate inquiry into the previous ownership and uses of the Property and any potential environmental liabilities associated therewith. Section 5.13. Names and Places of Business. No Restricted Person has, during the preceding five years, had, been known by, or used any other trade or fictitious name, except as disclosed in Section 5.13 of the Disclosure Schedule. Except as otherwise indicated in Section 5.13 of the Disclosure Schedule or a Disclosure Report, the chief executive office and principal place of business of each Restricted Person are (and for the preceding five years have been) located at the address of Borrower set out on the signature pages hereto. The organizational jurisdiction of Borrower is as set forth in the introductory paragraph hereof, and the organizational jurisdiction of each other Restricted Person is as set forth in Section 5.13 of the Disclosure Schedule. Except as indicated in Section 5.13 of the Disclosure Schedule or a Disclosure Report, no Restricted Person has any other office or place of business. Section 5.14. Borrower's Subsidiaries. Borrower does not presently have any Subsidiary or own any stock in any other corporation or association except those listed in Section 5.14 of the Disclosure Schedule or a Disclosure Report. Neither Borrower nor any Restricted Person is a member of any general or limited partnership, joint venture or association of any type whatsoever except those listed in Section 5.14 of the Disclosure Schedule or a Disclosure Report. Except as otherwise revealed in a Disclosure Report, Borrower owns, directly or indirectly, the equity interest in each of its Subsidiaries which is indicated in Section 5.14 of the Disclosure Schedule. Section 5.15. Government Regulation. Neither Borrower nor any other Restricted Person owing Obligations is subject to regulation under the Public Utility Holding Company Act of 1935, the Federal Power Act, the Investment Company Act of 1940 (as any of the preceding 26 acts have been amended) or any other Law which regulates the incurring by such Person of Indebtedness, including Laws relating to common contract carriers or the sale of electricity, gas, steam, water or other public utility services. Section 5.16. Insider. No Restricted Person, nor any Person having "control" (as that term is defined in 12 U.S.C. Section 375b(9) or in regulations promulgated pursuant thereto) of any Restricted Person, is a "director" or an "executive officer" or "principal shareholder" (as those terms are defined in 12 U.S.C. Section 375b(8) or (9) or in regulations promulgated pursuant thereto) of any Lender, of a bank holding company of which any Lender is a Subsidiary or of any Subsidiary of a bank holding company of which any Lender is a Subsidiary. Section 5.17. Solvency. Upon giving effect to the issuance of the Notes, the execution of the Loan Documents by Borrower and the consummation of the transactions contemplated hereby, Borrower will be solvent (as such term is used in applicable bankruptcy, liquidation, receivership, insolvency or similar Laws). Section 5.18. Title to Collateral. Each Restricted Person has good and marketable title to all of the Collateral and to all of its material properties and assets, free and clear of all Liens, encumbrances, or adverse claims other than Permitted Liens and free and clear of all impediments to the use of such properties and assets in such Restricted Person's business. The amount of Liabilities secured by Permitted Liens encumbering Collateral on the date hereof (excluding only inchoate Liens for taxes not yet due and payable) does not exceed $10,000. ARTICLE VI - Affirmative Covenants of Borrower To conform with the terms and conditions under which each Lender is willing to have credit outstanding to Borrower, and to induce each Lender to enter into this Agreement and extend credit hereunder, Borrower warrants, covenants and agrees that until the full and final payment of the Obligations and the termination of this Agreement, unless Majority Lenders have previously agreed otherwise: Section 6.1. Payment and Performance. Each Restricted Person will pay all amounts due under the Loan Documents in accordance with the terms thereof and will observe, perform and comply with every covenant, term and condition expressed or implied in the Loan Documents. Borrower will cause each other Restricted Person to observe, perform and comply with every such term, covenant and condition in any Loan Document. Section 6.2. Books, Financial Statements and Reports. Each Restricted Person will at all times maintain full and accurate books of account and records. Borrower will maintain and will cause its Subsidiaries to maintain a standard system of accounting, will maintain its Fiscal Year, and will furnish the following statements and reports to each Lender Party at Borrower's expense: (a) As soon as available, and in any event within one hundred twenty (120) days after the end of each Fiscal Year, commencing December 31, 2004, complete Consolidated financial statements of Borrower together with all notes thereto, prepared in reasonable detail in accordance with GAAP, together with an unqualified opinion, based on an audit using generally 27 accepted auditing standards, by independent certified public accountants selected by Borrower and acceptable to Majority Lenders, stating that such Consolidated financial statements have been so prepared. These financial statements shall contain a Consolidated balance sheet as of the end of such Fiscal Year and Consolidated statements of earnings, of cash flows, and of changes in owners' equity for such Fiscal Year, each setting forth in comparative form the corresponding figures for the preceding Fiscal Year. In addition, within one hundred twenty (120) days after the end of each Fiscal Year Borrower will furnish a report signed by such accountants (i) stating that they have read this Agreement, (ii) containing calculations showing compliance (or non-compliance) at the end of such Fiscal Year with the requirements of Section 7.11, and (iii) further stating that in making their examination and reporting on the Consolidated financial statements described above they did not conclude that any Default existed at the end of such Fiscal Year or at the time of their report, or, if they did conclude that a Default existed, specifying its nature and period of existence. (b) As soon as available, and in any event within fifty (50) days after the end of each Fiscal Quarter, Borrower's Consolidated balance sheet as of the end of such Fiscal Quarter and Consolidated statements of Borrower's earnings and cash flows for the period from the beginning of the then current Fiscal Year to the end of such Fiscal Quarter, all in reasonable detail and prepared in accordance with GAAP, subject to changes resulting from normal year-end adjustments. In addition Borrower will, together with each such set of financial statements, furnish a certificate in the form of Exhibit D signed by the chief financial officer of Borrower stating that such financial statements are accurate and complete (subject to normal year-end adjustments), stating that he has reviewed the Loan Documents, containing calculations showing compliance (or non-compliance) at the end of such Fiscal Quarter with the requirements of Section 7.12 and stating that no Default exists at the end of such Fiscal Quarter or at the time of such certificate or specifying the nature and period of existence of any such Default. (c) Promptly upon their becoming available, copies of all financial statements, reports, notices and proxy statements sent by any Restricted Person to all of its owners, and all registration statements, periodic reports and other statements and schedules filed by any Restricted Person with any securities exchange, the Securities and Exchange Commission or any similar governmental authority. Section 6.3. Other Information and Inspections. Each Restricted Person will furnish to each Lender any information which Administrative Agent may from time to time request concerning any provision of the Loan Documents, any Collateral, or any matter in connection with Restricted Persons' businesses, properties, prospects, financial condition and operations. Each Restricted Person will permit representatives appointed by Administrative Agent (including independent accountants, auditors, agents, attorneys, appraisers and any other Persons) to visit and inspect during normal business hours (and, so long as no Default has occurred and is continuing, upon reasonable notice) any of such Restricted Person's property, including its books of account, other books and records, and any facilities or other business assets, and to make extra copies therefrom and photocopies and photographs thereof, and to write down and record any information such representatives obtain, and each Restricted Person shall permit Administrative Agent or its representatives to investigate and verify the accuracy of the information furnished to Administrative Agent or any Lender in connection with the Loan Documents and to discuss all such matters with its officers, employees and representatives. 28 Section 6.4. Notice of Material Events and Change of Address. Borrower will promptly and in any event within five Business Days notify each Lender in writing, stating that such notice is being given pursuant to this Agreement, of: (a) occurrence of any Material Adverse Change or any NRP Material Adverse Change, (b) the occurrence of any Default, (c) the acceleration of the maturity of any Indebtedness owed by any Restricted Person or of any default by any Restricted Person under any indenture, mortgage, agreement, contract or other instrument to which any of them is a party or by which any of them or any of their properties is bound, if such acceleration or default could cause a Material Adverse Change, (d) the occurrence of any Termination Event, (e) any claim of $100,000 or more, any notice of potential liability under any Environmental Laws which might exceed such amount, or any other material adverse claim asserted against any Restricted Person or with respect to any Restricted Person's properties, and (f) the filing of any suit or proceeding against any Restricted Person in which an adverse decision could cause a Material Adverse Change. Upon the occurrence of any of the foregoing Restricted Persons will take all necessary or appropriate steps to remedy promptly any such Material Adverse Change, Default, acceleration, default or Termination Event, to protect against any such adverse claim, to defend any such suit or proceeding, and to resolve all controversies on account of any of the foregoing. Borrower will also notify Administrative Agent and Administrative Agent's counsel in writing at least thirty (30) days prior to the date that any Restricted Person changes its name or the location of its chief executive office or principal place of business or the place where it keeps its books and records concerning the Collateral, furnishing with such notice any necessary financing statement amendments or requesting Administrative Agent and its counsel to prepare the same. Section 6.5. Maintenance of Properties. Each Restricted Person will maintain, preserve, protect, and keep all Collateral and all other property used or useful in the conduct of its business in good condition and in compliance with all applicable Laws, and will from time to time make all repairs, renewals and replacements needed to enable the business and operations carried on in connection therewith to be promptly and advantageously conducted at all times. Section 6.6. Maintenance of Existence and Qualifications. Each Restricted Person will maintain and preserve its existence and its rights and franchises in full force and effect and will qualify to do business in all states or jurisdictions where required by applicable Law, except where the failure so to qualify will not cause a Material Adverse Change. Section 6.7. Payment of Trade Liabilities, Taxes, etc. Each Restricted Person will (a) timely file all required tax returns; (b) timely pay all taxes, assessments, and other governmental charges or levies imposed upon it or upon its income, profits or property; (c) within ninety (90) days past the original invoice billing date therefor, pay all Liabilities owed 29 by it on ordinary trade terms to vendors, suppliers and other Persons providing goods and services used by it in the ordinary course of its business; (d) pay and discharge when due all other material Liabilities now or hereafter owed by it; and (e) maintain appropriate accruals and reserves for all of the foregoing in accordance with GAAP. Each Restricted Person may, however, delay paying or discharging any of the foregoing so long as it is in good faith contesting the validity thereof by appropriate proceedings and has set aside on its books adequate reserves therefor. Section 6.8. Intentionally deleted. Section 6.9. Performance on Borrower's Behalf. If any Restricted Person fails to pay any taxes, insurance premiums, expenses, attorneys' fees or other amounts it is required to pay under any Loan Document, Administrative Agent may pay the same. Borrower shall immediately reimburse Administrative Agent for any such payments and each amount paid by Administrative Agent shall constitute an Obligation owed hereunder which is due and payable on the date such amount is paid by Administrative Agent. Section 6.10. Interest. Borrower hereby promises to each Lender Party to pay interest at the Default Rate on all Obligations (including Obligations to pay fees or to reimburse or indemnify any Lender) which Borrower has in this Agreement promised to pay to such Lender Party and which are not paid when due, which with respect to Obligations other than Loans shall be the Default Rate applicable to Base Rate Loans. Such interest shall accrue from the date such Obligations become due until they are paid. Section 6.11. Compliance with Agreements and Law. Each Restricted Person will perform all material obligations it is required to perform under the terms of each indenture, mortgage, deed of trust, security agreement, lease, franchise, agreement, contract or other instrument or obligation to which it is a party or by which it or any of its properties is bound. Each Restricted Person will conduct its business and affairs in compliance with all Laws applicable thereto and will maintain in good standing all licenses that may be necessary or appropriate to carry on its business. Section 6.12. Environmental Matters; Environmental Reviews. (a) Each Restricted Person will comply in all material respects with all Environmental Laws now or hereafter applicable to such Restricted Person, as well as all contractual obligations and agreements with respect to environmental remediation or other environmental matters, and shall obtain, at or prior to the time required by applicable Environmental Laws, all environmental, health and safety permits, licenses and other authorizations necessary for its operations and will maintain such authorizations in full force and effect. Without limiting the foregoing, Borrower will promptly develop and carry out a plan of action to plug abandoned wells, as discovered, that are not expected to be returned to service. No Restricted Person will do anything or permit anything to be done which will subject any of its properties to any remedial obligations under, or result in noncompliance with applicable permits and licenses issued under, any applicable Environmental Laws, assuming disclosure to the applicable governmental authorities of all relevant facts, conditions and circumstances. Upon Administrative Agent's reasonable request, at any time and from time to time, Borrower will provide at its own expense 30 an environmental inspection of any of the Restricted Persons' material real properties and audit of their environmental compliance procedures and practices, in each case from internal sources or, if requested by Administrative Agent, from an engineering or consulting firm approved by Administrative Agent. (b) Borrower will promptly furnish to Administrative Agent all written notices of violation, orders, claims, citations, complaints, penalty assessments, suits or other proceedings received by any Restricted Person, or of which Borrower otherwise has notice, pending or threatened against any Restricted Person by any governmental authority with respect to any alleged violation of or non-compliance with any Environmental Laws or any permits, licenses or authorizations in connection with any Restricted Person's ownership or use of its properties or the operation of its business. (c) Borrower will promptly furnish to Administrative Agent all requests for information, notices of claim, demand letters, and other notifications, received by Borrower in connection with any Restricted Person's ownership or use of its properties or the conduct of its business, relating to potential responsibility with respect to any investigation or clean-up of Hazardous Material at any location. Section 6.13. Evidence of Compliance. Each Restricted Person will furnish to each Lender at such Restricted Person's or Borrower's expense all evidence which Administrative Agent from time to time reasonably requests in writing as to the accuracy and validity of or compliance with all representations, warranties and covenants made by any Restricted Person in the Loan Documents, the satisfaction of all conditions contained therein, and all other matters pertaining thereto. Section 6.14. Bank Accounts; Offset. To secure the repayment of the Obligations Borrower hereby grants to each Lender a security interest, a lien, and a right of offset, each of which shall be in addition to all other interests, liens, and rights of any Lender at common Law, under the Loan Documents, or otherwise, and each of which shall be upon and against (a) any and all moneys, securities or other property (and the proceeds therefrom) of Borrower now or hereafter held or received by or in transit to any Lender from or for the account of Borrower, whether for safekeeping, custody, pledge, transmission, collection or otherwise, (b) any and all deposits (general or special, time or demand, provisional or final) of Borrower with any Lender, and (c) any other credits and claims of Borrower at any time existing against any Lender, including claims under certificates of deposit. At any time and from time to time after the occurrence and during the continuance of any Default, each Lender is hereby authorized to foreclose upon, or to offset against the Obligations then due and payable (in either case without notice to Borrower), any and all items hereinabove referred to. The remedies of foreclosure and offset are separate and cumulative, and either may be exercised independently of the other without regard to procedures or restrictions applicable to the other. Section 6.15. Agreement to Deliver Security Documents. Borrower agrees to deliver and to cause each other Restricted Person to deliver, to further secure the Obligations whenever requested by Administrative Agent in its sole and absolute discretion, security agreements, financing statements and other Security Documents in form and substance satisfactory to Administrative Agent for the purpose of granting, confirming, and perfecting first and prior liens 31 or security interests in Collateral, including the delivery of any certificates evidencing the Acquired Units, accompanied by blank executed powers with respect thereto. Borrower agrees to deliver, whenever requested by Administrative Agent in its sole and absolute discretion, favorable opinions from legal counsel acceptable to Administrative Agent with respect to the enforceability of the Liens created by the Security Documents, in a form and substance reasonably acceptable to the Administrative Agent. Section 6.16. Registration of Acquired Units. Borrower agrees that upon the conversion of any Acquired Units from subordinated units to common units, Borrower shall use commercially reasonable efforts to cause such converted Acquired Units to be registered pursuant to the Securities Act of 1933, as amended and shall use commercially reasonable efforts to cause such registration to remain effective through the Maturity Date. Section 6.17. Cash Collateral Account. Borrower agrees to cause all payments and distributions with respect to the Acquired Units (including any and all proceeds of any sale, assignment, transfer or other disposition of any Acquired Units) to be wired or deposited directly into the Cash Collateral Account, and Borrower shall so direct NRP by written instruction to make all payments and distributions to Borrower directly into the Cash Collateral Account. Administrative Agent shall have the exclusive right and authority to apply proceeds of any sale, assignment, transfer or other disposition of any Acquired Units in an amount equal to the mandatory prepayment due pursuant to Section 2.7(b) resulting from such sale, assignment transfer or dispositions. Upon the occurrence of a Sweep Event and continuing until the occurrence of a Sweep Termination Event or upon the occurrence of any Event of Default, Administrative Agent shall have the exclusive right and authority to direct the disposition or disbursement of any and all funds then or thereafter deposited in the Cash Collateral Account, including the application of funds therein to pay or prepay any Obligations as Administrative Agent may elect in its sole discretion. As security for the payment and performance of the Obligations, Borrower hereby collaterally transfers, assigns, and pledges to Administrative Agent for the ratable benefit of Lenders and grants to Administrative Agent for the ratable benefit of Lenders a security interest in all funds of Borrower now or hereafter or from time to time on deposit in the Cash Collateral Account. All remedies as secured party or assignee of such funds shall be exercisable by Administrative Agent upon the occurrence and during the continuance of any Event of Default, regardless of whether the exercise of any such remedy would result in any penalty or loss of interest or profit with respect to any withdrawal of funds deposited in a time deposit account prior to the maturity thereof. ARTICLE VII - Negative Covenants of Borrower To conform with the terms and conditions under which each Lender is willing to have credit outstanding to Borrower, and to induce each Lender to enter into this Agreement and make the Loans, Borrower warrants, covenants and agrees that until the full and final payment of the Obligations and the termination of this Agreement, unless Majority Lenders have previously agreed otherwise: Section 7.1. Indebtedness. No Restricted Person will in any manner owe or be liable for Indebtedness except the Obligations. 32 Section 7.2. Limitation on Liens. Except for Permitted Liens, no Restricted Person will create, assume or permit to exist any Lien upon any of the properties or assets which it now owns or hereafter acquires. Section 7.3. Limitation on Mergers, Issuances of Securities. No Restricted Person will merge or consolidate with or into any other Person. Borrower will not issue any partnership interests or options or warrants to acquire any of its partnership interests except issuances to partners of Borrower as of the date hereof. No Subsidiary of Borrower will issue any additional shares of its capital stock or other securities or any options, warrants or other rights to acquire such additional shares or other securities except to Borrower and only to the extent not otherwise forbidden under the terms hereof. No Subsidiary of Borrower which is a partnership will allow any diminution of Borrower's interest (direct or indirect) therein. Section 7.4. Limitation on Sales of Property. No Restricted Person will sell, transfer, lease, exchange, alienate or dispose of any Acquired Units except in compliance with Section 2.7(b), or any of its other material assets or properties or any material interest therein, or discount, sell, pledge or assign any notes payable to it, accounts receivable or future income, except, to the extent not otherwise forbidden under the Security Documents, equipment which is worthless or obsolete or which is replaced by equipment of equal suitability and value. Section 7.5. Limitation on Dividends and Redemptions. No Restricted Person will declare or make any Distributions upon the occurrence and during the continuance of a Default. Section 7.6. Limitation on Investments and New Businesses. No Restricted Person will (a) make any expenditure or commitment or incur any obligation or enter into or engage in any transaction, or directly or indirectly in any business or conduct any operations except in connection with or incidental to its present businesses and operations, or (b) make any acquisitions of or capital contributions to or other Investments in any Person or property. Section 7.7. Limitation on Credit Extensions. Except for Permitted Investments, no Restricted Person will extend credit, make advances or make loans other than (a) normal and prudent extensions of credit to customers buying goods and services in the ordinary course of business, which extensions shall not be for longer periods than those extended by similar businesses operated in a normal and prudent manner, and (b) loans to Borrower. Section 7.8. Transactions with Affiliates. Neither Borrower nor any of its Subsidiaries will engage in any material transaction with any of its Affiliates on terms which are less favorable to it than those which would have been obtainable at the time in arm's-length dealing with Persons other than such Affiliates, provided that such restriction shall not apply to transactions among Borrower and its wholly owned Subsidiaries and provided that this Section 7.8 shall not prohibit distributions by Borrower that are otherwise permitted hereunder. Section 7.9. No Further Negative Pledges. Except as expressly provided for in the Loan Documents, no Person will enter into or become subject to any agreement (a) prohibiting the guaranteeing by any Restricted Person of any Indebtedness, (b) prohibiting the creation or assumption of any Lien upon the properties or assets of any Restricted Person, whether now 33 owned or hereafter acquired or (c) requiring an obligation to become secured (or further secured) if another obligation is secured or further secured. Section 7.10. Prohibited Contracts. Except as expressly provided for in the Loan Documents, no Restricted Person will, directly or indirectly, enter into, create, or otherwise allow to exist any contract or other consensual restriction on the ability of any Restricted Person to: (a) pay dividends or make other distributions to Borrower, (b) to redeem equity interests held in it by Borrower, (c) to repay loans and other indebtedness owing by it to Borrower, or (d) to transfer any of its assets to Borrower. No Restricted Person will enter into any "take-or-pay" contract or other contract or arrangement for the purchase of goods or services which obligates it to pay for such goods or service regardless of whether they are delivered or furnished to it. No Restricted Person will amend or permit any amendment to Borrower's Limited Partnership Agreement or any contract or lease which releases, qualifies, limits, makes contingent or otherwise materially detrimentally affects the rights and benefits of Administrative Agent or any Lender under or acquired pursuant to any Security Documents; provided that, notwithstanding the immediately preceding clause, such Restricted Person shall provide written notice to Administrative Agent of any amendment or granting of permission to amend. Borrower shall not modify, reduce or waive collection of any distributions with respect to the Acquired Units without Majority Lender consent (not to be unreasonably withheld). No ERISA Affiliate will incur any obligation to contribute to any "multiemployer plan" as defined in Section 4001 of ERISA. Section 7.11. Financial Covenants. (a) Interest Coverage Ratio. As of the last day of each Fiscal Quarter, on a Consolidated basis, for the four-Fiscal Quarter period ending with such day, the ratio of (i) Borrower's Cash Flow to (ii) Borrower's interest expense actually paid by Borrower shall be not less than 4.00 to 1.00. (b) Debt/Cash Flow Ratio. As of the last day of each Fiscal Quarter, on a Consolidated basis, for the four-Fiscal Quarter period ending with such day, the ratio of (i) Borrower's funded Indebtedness to (ii) Borrower's Cash Flow (the "Debt/Cash Flow Ratio") shall not exceed: (A) 3.00 to 1.00 as of the last day of each Fiscal Quarter ending on or before March 31, 2006; (B) 2.50 to 1.00 as of the last day of each Fiscal Quarter ending after March 31, 2006 and on or before March 31, 2007; and (C) 2.00 to 1.00 as of the last day of any Fiscal Quarter ending after March 31, 2007. ARTICLE VIII - Events of Default and Remedies Section 8.1. Events of Default. Each of the following events constitutes an Event of Default under this Agreement: 34 (a) Any Restricted Person fails to pay any principal component of any Obligation when due and payable, whether at a date for the payment of a fixed installment or as a contingent or other payment becomes due and payable or as a result of acceleration or otherwise; (b) Any Restricted Person fails to pay any Obligation (other than the Obligations in subsection (a) above) when due and payable, whether at a date for the payment of a fixed installment or as a contingent or other payment becomes due and payable or as a result of acceleration or otherwise, within three Business Days after the same becomes due; (c) Any "default" or "event of default" occurs under any Loan Document which defines either such term, and the same is not remedied within the applicable period of grace (if any) provided in such Loan Document; (d) Any Restricted Person fails to duly observe, perform or comply with any covenant, agreement or provision of Section 6.4 or Article VII; (e) Any Restricted Person fails (other than as referred to in subsections (a), (b), (c) or (d) above) to duly observe, perform or comply with any covenant, agreement, condition or provision of any Loan Document, and such failure remains unremedied for a period of thirty (30) days after notice of such failure is given by Administrative Agent to Borrower; (f) Any representation or warranty previously, presently or hereafter made in writing by or on behalf of any Restricted Person in connection with any Loan Document shall prove to have been false or incorrect in any material respect on any date on or as of which made, or any Loan Document at any time ceases to be valid, binding and enforceable as warranted in Section 5.5 for any reason other than its release or subordination by Administrative Agent; (g) Any Restricted Person fails to duly observe, perform or comply with any agreement with any Person or any term or condition of any instrument, if such agreement or instrument is materially significant to Borrower or to Borrower and its Subsidiaries on a Consolidated basis, and such failure is not remedied within the applicable period of grace (if any) provided in such agreement or instrument and the counterparty to the agreement or instrument has the right to terminate; (h) Any Restricted Person (i) fails to pay any portion, when such portion is due, of any of Indebtedness in excess of $100,000, or (ii) breaches or defaults in the performance of any agreement or instrument by which such Indebtedness is issued, evidenced, governed, or secured, and any such failure, breach or default continues beyond any applicable period of grace provided therefor; (i) NRP (i) fails to pay when due any obligations or Indebtedness under the NRP Credit Facility, (ii) becomes subject to any proceeding under any bankruptcy, insolvency or other similar Law constituting a bankruptcy default under the NRP Credit Facility, or (iii) breaches or defaults in the performance of any agreement or instrument by which the Indebtedness under the NRP Credit Facility is issued, evidenced, governed, or secured, and any such failure, breach or default continues beyond any applicable period of grace provided therefor, and as a result the lenders thereunder cause such Indebtedness to become due, or to be prepaid in full (whether by redemption, purchase, offer to purchase or otherwise), prior to its stated maturity. 35 (j) Either (i) any "accumulated funding deficiency" (as defined in Section 412(a) of the Internal Revenue Code) in excess of $100,000 exists with respect to any ERISA Plan, whether or not waived by the Secretary of the Treasury or his delegate, or (ii) any Termination Event occurs with respect to any ERISA Plan and the then current value of such ERISA Plan's benefit liabilities exceeds the then current value of such ERISA Plan's assets available for the payment of such benefit liabilities by more than $100,000 (or in the case of a Termination Event involving the withdrawal of a substantial employer, the withdrawing employer's proportionate share of such excess exceeds such amount); (k) Any Restricted Person: (i) suffers the entry against it of a judgment, decree or order for relief by a Tribunal of competent jurisdiction in an involuntary proceeding commenced under any applicable bankruptcy, insolvency or other similar Law of any jurisdiction now or hereafter in effect, including the federal Bankruptcy Code, as from time to time amended, or has any such proceeding commenced against it which remains undismissed for a period of 60 days; or (ii)commences a voluntary case under any applicable bankruptcy, insolvency or similar Law now or hereafter in effect, including the federal Bankruptcy Code, as from time to time amended; or applies for or consents to the entry of an order for relief in an involuntary case under any such Law; or makes a general assignment for the benefit of creditors; or fails generally to pay (or admits in writing its inability to pay) its debts as such debts become due; or takes corporate or other action to authorize any of the foregoing; or (iii) suffers the appointment of or taking possession by a receiver, liquidator, assignee, custodian, trustee, sequestrator or similar official of all or a substantial part of its assets or of any part of the Collateral in a proceeding brought against or initiated by it, and such appointment or taking possession is neither made ineffective nor discharged within 60 days after the making thereof, or such appointment or taking possession is at any time consented to, requested by, or acquiesced to by it; (l) Any Restricted Person: (i) suffers the entry against it of a final judgment for the payment of money in excess of $100,000 (not covered by insurance satisfactory to Administrative Agent in its discretion), unless the same is discharged within thirty days after the date of entry thereof or an appeal or appropriate proceeding for review thereof is taken within such period and a stay of execution pending such appeal is obtained; or (ii)suffers a writ or warrant of attachment or any similar process to be issued by any Tribunal against all or any substantial part of its assets or any part of the Collateral, and such writ or warrant of attachment or any similar process is not stayed or released within thirty days after the entry or levy thereof or after any stay is vacated or set aside; or (m) Any Change of Control occurs. 36 Upon the occurrence of an Event of Default described in subsection (i)(ii), (k)(i), (k)(ii) or (k)(iii) of this section with respect to Borrower, all of the Obligations shall thereupon be immediately due and payable, without demand, presentment, notice of demand or of dishonor and nonpayment, protest, notice of protest, notice of intention to accelerate, declaration or notice of acceleration, or any other notice or declaration of any kind, all of which are hereby expressly waived by Borrower and each Restricted Person who at any time ratifies or approves this Agreement. Upon any such acceleration, any obligation of any Lender to make any further Loans shall be permanently terminated. During the continuance of any other Event of Default, Administrative Agent at any time and from time to time may (and upon written instructions from Majority Lenders, Administrative Agent shall), without notice to Borrower or any other Restricted Person, do either or both of the following: (1) terminate any obligation of Lenders to make Loans hereunder, and (2) declare any or all of the Obligations immediately due and payable, and all such Obligations shall thereupon be immediately due and payable, without demand, presentment, notice of demand or of dishonor and nonpayment, protest, notice of protest, notice of intention to accelerate, declaration or notice of acceleration, or any other notice or declaration of any kind, all of which are hereby expressly waived by Borrower and each Restricted Person who at any time ratifies or approves this Agreement. Section 8.2. Remedies. If any Default shall occur and be continuing, each Lender Party may protect and enforce its rights under the Loan Documents by any appropriate proceedings, including proceedings for specific performance of any covenant or agreement contained in any Loan Document, and each Lender Party may enforce the payment of any Obligations due it or enforce any other legal or equitable right which it may have. All rights, remedies and powers conferred upon Lender Parties under the Loan Documents shall be deemed cumulative and not exclusive of any other rights, remedies or powers available under the Loan Documents or at Law or in equity. ARTICLE IX - Administrative Agent Section 9.1. Appointment and Authority. Each Lender Party hereby irrevocably authorizes Administrative Agent, and Administrative Agent hereby undertakes, to receive payments of principal, interest and other amounts due hereunder as specified herein and to take all other actions and to exercise such powers under the Loan Documents as are specifically delegated to Administrative Agent by the terms hereof or thereof, together with all other powers reasonably incidental thereto. The relationship of Administrative Agent to the other Lender Parties is only that of one commercial lender acting as administrative agent for others, and nothing in the Loan Documents shall be construed to constitute Administrative Agent a trustee or other fiduciary for any Lender Party or any holder of any participation in a Note nor to impose on Administrative Agent duties and obligations other than those expressly provided for in the Loan Documents. With respect to any matters not expressly provided for in the Loan Documents and any matters which the Loan Documents place within the discretion of Administrative Agent, Administrative Agent shall not be required to exercise any discretion or take any action, and it may request instructions from Lenders with respect to any such matter, in which case it shall be required to act or to refrain from acting (and shall be fully protected and free from liability to all Lender Parties in so acting or refraining from acting) upon the instructions of Majority Lenders (including itself), provided, however, that Administrative Agent shall not be required to take any 37 action which exposes it to a risk of personal liability that it considers unreasonable or which is contrary to the Loan Documents or to applicable Law. Upon receipt by Administrative Agent from Borrower of any communication calling for action on the part of Lenders or upon notice from any other Lender to Administrative Agent of any Default or Event of Default, Administrative Agent shall promptly notify each other Lender thereof. Section 9.2. Exculpation, Administrative Agent's Reliance, Etc. Neither Administrative Agent nor any of its directors, officers, agents, attorneys, or employees shall be liable for any action taken or omitted to be taken by any of them under or in connection with the Loan Documents, INCLUDING THEIR NEGLIGENCE OF ANY KIND, except that each shall be liable for its own gross negligence or willful misconduct. Without limiting the generality of the foregoing, Administrative Agent (a) may treat the payee of any Note as the holder thereof until Administrative Agent receives written notice of the assignment or transfer thereof in accordance with this Agreement, signed by such payee and in form satisfactory to Administrative Agent; (b) may consult with legal counsel (including counsel for Borrower), independent public accountants and other experts selected by it and shall not be liable for any action taken or omitted to be taken in good faith by it in accordance with the advice of such counsel, accountants or experts; (c) makes no warranty or representation to any other Lender and shall not be responsible to any other Lender Party for any statements, warranties or representations made in or in connection with the Loan Documents; (d) shall not have any duty to ascertain or to inquire as to the performance or observance of any of the terms, covenants or conditions of the Loan Documents on the part of any Restricted Person or to inspect the property (including the books and records) of any Restricted Person; (e) shall not be responsible to any other Lender for the due execution, legality, validity, enforceability, genuineness, sufficiency or value of any Loan Document or any instrument or document furnished in connection therewith; (f) may rely upon the representations and warranties of each Restricted Person or Lender Party in exercising its powers hereunder; and (g) shall incur no liability under or in respect of the Loan Documents by acting upon any notice, consent, certificate or other instrument or writing (including any facsimile, telegram, cable or telex) believed by it to be genuine and signed or sent by the proper Person or Persons. Section 9.3. Credit Decisions. Each Lender Party acknowledges that it has, independently and without reliance upon any other Lender Party, made its own analysis of Borrower and the transactions contemplated hereby and its own independent decision to enter into this Agreement and the other Loan Documents. Each Lender Party also acknowledges that it will, independently and without reliance upon any other Lender Party and based on such documents and information as it shall deem appropriate at the time, continue to make its own credit decisions in taking or not taking action under the Loan Documents. SECTION 9.4. INDEMNIFICATION. EACH LENDER AGREES TO INDEMNIFY ADMINISTRATIVE AGENT (TO THE EXTENT NOT REIMBURSED BY BORROWER WITHIN TEN (10) DAYS AFTER DEMAND) FROM AND AGAINST SUCH LENDER'S PERCENTAGE SHARE OF ANY AND ALL LIABILITIES, OBLIGATIONS, CLAIMS, LOSSES, DAMAGES, PENALTIES, FINES, ACTIONS, JUDGMENTS, SUITS, SETTLEMENTS, COSTS, EXPENSES OR DISBURSEMENTS (INCLUDING REASONABLE FEES OF ATTORNEYS, ACCOUNTANTS, EXPERTS AND ADVISORS) OF ANY KIND OR NATURE WHATSOEVER (IN THIS SECTION COLLECTIVELY CALLED "LIABILITIES AND COSTS") WHICH TO ANY EXTENT (IN WHOLE OR IN PART) MAY BE IMPOSED ON, INCURRED BY, OR ASSERTED AGAINST ADMINISTRATIVE AGENT GROWING OUT OF, RESULTING FROM OR IN ANY OTHER WAY ASSOCIATED WITH ANY OF THE COLLATERAL, THE LOAN DOCUMENTS AND THE TRANSACTIONS AND EVENTS (INCLUDING 38 THE ENFORCEMENT THEREOF) AT ANY TIME ASSOCIATED THEREWITH OR CONTEMPLATED THEREIN (WHETHER ARISING IN CONTRACT OR IN TORT AND OTHERWISE AND INCLUDING ANY VIOLATION OR NONCOMPLIANCE WITH ANY ENVIRONMENTAL LAWS BY ANY PERSON OR ANY LIABILITIES OR DUTIES OF ANY PERSON WITH RESPECT TO HAZARDOUS MATERIALS FOUND IN OR RELEASED INTO THE ENVIRONMENT). THE FOREGOING INDEMNIFICATION SHALL APPLY WHETHER OR NOT SUCH LIABILITIES AND COSTS ARE IN ANY WAY OR TO ANY EXTENT OWED, IN WHOLE OR IN PART, UNDER ANY CLAIM OR THEORY OF STRICT LIABILITY, OR ARE CAUSED, IN WHOLE OR IN PART, BY ANY NEGLIGENT ACT OR OMISSION OF ANY KIND BY ADMINISTRATIVE AGENT, provided only that no Lender shall be obligated under this section to indemnify Administrative Agent for that portion, if any, of any liabilities and costs which is proximately caused by Administrative Agent's own individual gross negligence or willful misconduct, as determined in a final judgment. Cumulative of the foregoing, each Lender agrees to reimburse Administrative Agent promptly upon demand for such Lender's Percentage Share of any costs and expenses to be paid to Administrative Agent by Borrower under Section 10.4(a) to the extent that Administrative Agent is not timely reimbursed for such expenses by Borrower as provided in such section. As used in this section the term "Administrative Agent" shall refer not only to the Person designated as such in Section 1.1 but also to each director, officer, agent, attorney, employee, representative and Affiliate of such Person. Section 9.5. Rights as Lender. In its capacity as a Lender, Administrative Agent shall have the same rights and obligations as any Lender and may exercise such rights as though it were not Administrative Agent. Administrative Agent may accept deposits from, lend money to, act as trustee under indentures of, and generally engage in any kind of business with any Restricted Person or their Affiliates, all as if it were not Administrative Agent hereunder and without any duty to account therefor to any other Lender. Section 9.6. Sharing of Set-Offs and Other Payments. Each Lender Party agrees that if it shall, whether through the exercise of rights under Security Documents or rights of banker's lien, set off, or counterclaim against Borrower or otherwise, obtain payment of a portion of the aggregate Obligations owed to it which, taking into account all distributions made by Administrative Agent under Section 3.1, causes such Lender Party to have received more than it would have received had such payment been received by Administrative Agent and distributed pursuant to Section 3.1, then (a) it shall be deemed to have simultaneously purchased and shall be obligated to purchase interests in the Obligations as necessary to cause all Lender Parties to share all payments as provided for in Section 3.1, and (b) such other adjustments shall be made from time to time as shall be equitable to ensure that Administrative Agent and all Lender Parties share all payments of Obligations as provided in Section 3.1; provided, however, that nothing herein contained shall in any way affect the right of any Lender Party to obtain payment (whether by exercise of rights of banker's lien, set-off or counterclaim or otherwise) of indebtedness other than the Obligations. Borrower expressly consents to the foregoing arrangements and agrees that any holder of any such interest or other participation in the Obligations, whether or not acquired pursuant to the foregoing arrangements, may to the fullest extent permitted by Law exercise any 39 and all rights of banker's lien, set-off, or counterclaim as fully as if such holder were a holder of the Obligations in the amount of such interest or other participation. If all or any part of any funds transferred pursuant to this section is thereafter recovered from the seller under this section which received the same, the purchase provided for in this section shall be deemed to have been rescinded to the extent of such recovery, together with interest, if any, if interest is required pursuant to the order of a Tribunal order to be paid on account of the possession of such funds prior to such recovery. Section 9.7. Investments. Whenever Administrative Agent in good faith determines that it is uncertain about how to distribute to Lender Parties any funds which it has received, or whenever Administrative Agent in good faith determines that there is any dispute among Lender Parties about how such funds should be distributed, Administrative Agent may choose to defer distribution of the funds which are the subject of such uncertainty or dispute. If Administrative Agent in good faith believes that the uncertainty or dispute will not be promptly resolved, or if Administrative Agent is otherwise required to invest funds pending distribution to Lender Parties, Administrative Agent shall invest such funds pending distribution; all interest on any such Investment shall be distributed upon the distribution of such Investment and in the same proportion and to the same Persons as such Investment. All moneys received by Administrative Agent for distribution to Lender Parties (other than to the Person who is Administrative Agent in its separate capacity as a Lender Party) shall be held by Administrative Agent pending such distribution solely as Administrative Agent for such Lender Parties, and Administrative Agent shall have no equitable title to any portion thereof. Section 9.8. Benefit of Article IX. The provisions of this Article (other than the following Section 9.9) are intended solely for the benefit of Lender Parties, and no Restricted Person shall be entitled to rely on any such provision or assert any such provision in a claim or defense against any Lender. Lender Parties may waive or amend such provisions as they desire without any notice to or consent of Borrower or any Restricted Person. Section 9.9. Resignation. Administrative Agent may resign at any time by giving written notice thereof to Lenders and Borrower with Borrower's consent, which consent may not be unreasonably withheld, so long as no Default has occurred and is continuing. Each such notice shall set forth the date of such resignation. Upon any such resignation Majority Lenders shall have the right to appoint a successor Administrative Agent. A successor must be appointed for any retiring Administrative Agent, and such Administrative Agent's resignation shall become effective when such successor accepts such appointment. If, within thirty days after the date of the retiring Administrative Agent's resignation, no successor Administrative Agent has been appointed and has accepted such appointment, then the retiring Administrative Agent may appoint a successor Administrative Agent, which shall be a commercial bank organized or licensed to conduct a banking or trust business under the Laws of the United States of America or of any state thereof. Upon the acceptance of any appointment as Administrative Agent hereunder by a successor Administrative Agent, the retiring Administrative Agent shall be discharged from its duties and obligations under this Agreement and the other Loan Documents. After any retiring Administrative Agent's resignation hereunder the provisions of this Article IX shall continue to inure to its benefit as to any actions taken or omitted to be taken by it while it was Administrative Agent under the Loan Documents. 40 ARTICLE X - Miscellaneous Section 10.1. Waivers and Amendments; Acknowledgments. (a) Waivers and Amendments. No failure or delay (whether by course of conduct or otherwise) by any Lender in exercising any right, power or remedy which such Lender Party may have under any of the Loan Documents shall operate as a waiver thereof or of any other right, power or remedy, nor shall any single or partial exercise by any Lender Party of any such right, power or remedy preclude any other or further exercise thereof or of any other right, power or remedy. No waiver of any provision of any Loan Document and no consent to any departure therefrom shall ever be effective unless it is in writing and signed as provided below in this section, and then such waiver or consent shall be effective only in the specific instances and for the purposes for which given and to the extent specified in such writing. No notice to or demand on any Restricted Person shall in any case of itself entitle any Restricted Person to any other or further notice or demand in similar or other circumstances. This Agreement and the other Loan Documents set forth the entire understanding between the parties hereto with respect to the transactions contemplated herein and therein and supersede all prior discussions and understandings with respect to the subject matter hereof and thereof, and no waiver, consent, release, modification or amendment of or supplement to this Agreement or the other Loan Documents shall be valid or effective against any party hereto unless the same is in writing and signed by (i) if such party is Borrower, by Borrower, (ii) if such party is Administrative Agent, by such party, and (iii) if such party is a Lender, by such Lender or by Administrative Agent on behalf of Lenders with the written consent of Majority Lenders (which consent has already been given as to the termination of the Loan Documents as provided in Section 10.9). Notwithstanding the foregoing or anything to the contrary herein, Administrative Agent shall not, without the prior consent of each individual Lender, execute and deliver on behalf of such Lender any waiver or amendment which would: (1) waive any of the conditions specified in Article IV (provided that Administrative Agent may in its discretion withdraw any request it has made under Section 4.2), (2) increase the maximum amount which such Lender is committed hereunder to lend, (3) reduce any fees payable to such Lender hereunder, or the principal of, or interest on, such Lender's Note, (4) postpone any date fixed for any payment of any such fees, principal or interest, (5) amend the definition herein of "Majority Lenders" or otherwise change the aggregate amount of Percentage Shares which is required for Administrative Agent, Lenders or any of them to take any particular action under the Loan Documents, (6) release Borrower from its obligation to pay such Lender's Note or (7) amend this Section 10.1(a). (b) Acknowledgments and Admissions. Borrower hereby represents, warrants, acknowledges and admits that (i) it has been advised by counsel in the negotiation, execution and delivery of the Loan Documents to which it is a party, (ii) it has made an independent decision to enter into this Agreement and the other Loan Documents to which it is a party, without reliance on any representation, warranty, covenant or undertaking by Administrative Agent or any Lender, whether written, oral or implicit, other than as expressly set out in this Agreement or in another Loan Document delivered on or after the date hereof, (iii) there are no representations, warranties, covenants, undertakings or agreements by any Lender as to the Loan Documents except as expressly set out in this Agreement or in another Loan Document delivered on or after the date hereof, (iv) no Lender has any fiduciary obligation toward Borrower with respect to any Loan Document or the transactions contemplated thereby, (v) the relationship pursuant to the 41 Loan Documents between Borrower and the other Restricted Persons, on one hand, and each Lender, on the other hand, is and shall be solely that of debtor and creditor, respectively, (vi) no partnership or joint venture exists with respect to the Loan Documents between any Restricted Person and any Lender, (vii) Administrative Agent is not Borrower's agent, but Administrative Agent for Lenders, (viii) should an Event of Default or Default occur or exist, each Lender will determine in its sole discretion and for its own reasons what remedies and actions it will or will not exercise or take at that time, (ix) without limiting any of the foregoing, Borrower is not relying upon any representation or covenant by any Lender, or any representative thereof, and no such representation or covenant has been made, that any Lender will, at the time of an Event of Default or Default, or at any other time, waive, negotiate, discuss, or take or refrain from taking any action permitted under the Loan Documents with respect to any such Event of Default or Default or any other provision of the Loan Documents, and (x) all Lender Parties have relied upon the truthfulness of the acknowledgments in this section in deciding to execute and deliver this Agreement and to become obligated hereunder. (c) Joint Acknowledgment. THIS WRITTEN AGREEMENT AND THE OTHER LOAN DOCUMENTS REPRESENT THE FINAL AGREEMENT BETWEEN THE PARTIES AND MAY NOT BE CONTRADICTED BY EVIDENCE OF PRIOR, CONTEMPORANEOUS, OR SUBSEQUENT ORAL AGREEMENTS OF THE PARTIES. THERE ARE NO UNWRITTEN ORAL AGREEMENTS BETWEEN THE PARTIES. Section 10.2. Survival of Agreements; Cumulative Nature. All of Restricted Persons' various representations, warranties, covenants and agreements in the Loan Documents shall survive the execution and delivery of this Agreement and the other Loan Documents and the performance hereof and thereof, including the making or granting of the Loans and the delivery of the Notes and the other Loan Documents, and shall further survive until all of the Obligations are paid in full to each Lender Party and all of Lender Parties' obligations to Borrower are terminated. All statements and agreements contained in any certificate or other instrument delivered by any Restricted Person to any Lender Party under any Loan Document shall be deemed representations and warranties by Borrower or agreements and covenants of Borrower under this Agreement. The representations, warranties, indemnities, and covenants made by Restricted Persons in the Loan Documents, and the rights, powers, and privileges granted to Lender Parties in the Loan Documents, are cumulative, and, except for expressly specified waivers and consents, no Loan Document shall be construed in the context of another to diminish, nullify, or otherwise reduce the benefit to any Lender Party of any such representation, warranty, indemnity, covenant, right, power or privilege. In particular and without limitation, no exception set out in this Agreement to any representation, warranty, indemnity, or covenant herein contained shall apply to any similar representation, warranty, indemnity, or covenant contained in any other Loan Document, and each such similar representation, warranty, indemnity, or covenant shall be subject only to those exceptions which are expressly made applicable to it by the terms of the various Loan Documents. Section 10.3. Notices. All notices, requests, consents, demands and other communications required or permitted under any Loan Document shall be in writing, unless otherwise specifically provided in such Loan Document (provided that Administrative Agent may give telephonic notices to the other Lender Parties), and shall be deemed sufficiently given 42 or furnished if delivered by personal delivery, by facsimile or other electronic transmission, by delivery service with proof of delivery, or by registered or certified United States mail, postage prepaid, to Borrower and Restricted Persons at the address of Borrower specified on the signature pages hereto and to each Lender Party at its address specified on the Lenders Schedule (unless changed by similar notice in writing given by the particular Person whose address is to be changed). Any such notice or communication shall be deemed to have been given (a) in the case of personal delivery or delivery service, as of the date of first attempted delivery during normal business hours at the address provided herein, (b) in the case of facsimile or other electronic transmission, upon receipt, or (c) in the case of registered or certified United States mail, three days after deposit in the mail; provided, however, that no Borrowing Notice shall become effective until actually received by Administrative Agent. Section 10.4. Payment of Expenses; Indemnity. (a) Payment of Expenses. Whether or not the transactions contemplated by this Agreement are consummated, Borrower will promptly (and in any event, within 30 days after any invoice or other statement or notice) pay: (i) all transfer, stamp, mortgage, documentary or other similar taxes, assessments or charges levied by any governmental or revenue authority in respect of this Agreement or any of the other Loan Documents or any other document or transaction referred to herein or therein, (ii) all reasonable costs and expenses incurred by or on behalf of Administrative Agent (including without limitation attorneys' fees, consultants' fees and engineering fees, travel costs and miscellaneous expenses, and allocated costs of internal counsel) in connection with (1) the negotiation, preparation, execution and delivery of the Loan Documents, and any and all consents, waivers or other documents or instruments relating thereto, (2) the filing, recording, refiling and re-recording of any Loan Documents and any other documents or instruments or further assurances required to be filed or recorded or refiled or re-recorded by the terms of any Loan Document, (3) the borrowings hereunder and other action reasonably required in the course of administration hereof, (4) monitoring or confirming (or preparation or negotiation of any document related to) any Restricted Person's compliance with any covenants or conditions contained in this Agreement or in any Loan Document, and (iii) all reasonable costs and expenses incurred by or on behalf of any Lender Party (including without limitation attorneys' fees, consultants' fees and accounting fees and allocated costs of internal counsel) in connection with the defense or enforcement of any of the Loan Documents (including this section), any attempt to cure any breach thereunder by any Restricted Person, or the defense of any Lender Party's exercise of its rights thereunder. In addition to the foregoing, until all Obligations have been paid in full, Borrower will also pay or reimburse Administrative Agent for all reasonable out-of-pocket costs and expenses of Administrative Agent or its agents or employees in connection with the continuing administration of the Loans and the related due diligence of Administrative Agent, including travel and miscellaneous expenses and fees and expenses of Administrative Agent's outside counsel, reserve engineers and consultants engaged in connection with the Loan Documents. (b) INDEMNITY. BORROWER AGREES TO INDEMNIFY EACH LENDER PARTY AND THE TRUSTEES UNDER ANY MORTGAGE (COLLECTIVELY, THE "TRUSTEE"), UPON DEMAND, FROM AND AGAINST ANY AND ALL LIABILITIES, OBLIGATIONS, BROKER'S FEES, CLAIMS, LOSSES, DAMAGES, PENALTIES, FINES, ACTIONS, JUDGMENTS, SUITS, SETTLEMENTS, COSTS, EXPENSES OR DISBURSEMENTS (INCLUDING REASONABLE FEES OF 43 ATTORNEYS, ACCOUNTANTS, EXPERTS AND ADVISORS) OF ANY KIND OR NATURE WHATSOEVER (IN THIS SECTION COLLECTIVELY CALLED "LIABILITIES AND COSTS") WHICH TO ANY EXTENT (IN WHOLE OR IN PART) MAY BE IMPOSED ON, INCURRED BY, OR ASSERTED AGAINST ANY LENDER PARTY GROWING OUT OF, RESULTING FROM OR IN ANY OTHER WAY ASSOCIATED WITH ANY OF THE COLLATERAL, THE LOAN DOCUMENTS AND THE TRANSACTIONS AND EVENTS (INCLUDING THE ENFORCEMENT OR DEFENSE THEREOF) AT ANY TIME ASSOCIATED THEREWITH OR CONTEMPLATED THEREIN (WHETHER ARISING IN CONTRACT OR IN TORT OR OTHERWISE), INCLUDING ANY VIOLATION OR NONCOMPLIANCE WITH ANY ENVIRONMENTAL LAWS BY ANY RESTRICTED PERSON, ANY LENDER PARTY OR ANY OTHER PERSON OR ANY LIABILITIES OR DUTIES OF ANY RESTRICTED PERSON, ANY LENDER PARTY OR ANY OTHER PERSON WITH RESPECT TO HAZARDOUS MATERIALS FOUND IN OR RELEASED INTO THE ENVIRONMENT). BORROWER WILL INDEMNIFY AND HOLD HARMLESS TRUSTEE AND EACH LENDER PARTY FROM AND AGAINST (AND WILL REIMBURSE TRUSTEE AND EACH LENDER PARTY FOR) ALL CLAIMS, DEMANDS, LIABILITIES, LOSSES, DAMAGES (INCLUDING WITHOUT LIMITATION CONSEQUENTIAL DAMAGES), CAUSES OF ACTION, JUDGMENTS, PENALTIES, COSTS AND EXPENSES (INCLUDING WITHOUT LIMITATION REASONABLE ATTORNEYS' FEES AND EXPENSES) WHICH MAY BE IMPOSED UPON, ASSERTED AGAINST OR INCURRED OR PAID BY EITHER OF THEM ON ACCOUNT OF, IN CONNECTION WITH, OR ARISING OUT OF (i) ANY BODILY INJURY OR DEATH OR NATURAL RESOURCE, HUMAN HEALTH OR PROPERTY DAMAGE OCCURRING IN, AT, INTO, UNDER OR UPON OR IN THE VICINITY OF THE PROPERTY (AS SUCH TERM IS DEFINED IN THE MORTGAGE) THROUGH ANY CAUSE WHATSOEVER, (ii) ANY ACT PERFORMED OR OMITTED TO BE PERFORMED HEREUNDER OR UNDER ANY OTHER LOAN DOCUMENT OR THE BREACH OF ANY REPRESENTATION OR WARRANTY HEREIN OR UNDER ANY OTHER LOAN DOCUMENT, (iii) THE EXERCISE OF ANY RIGHTS AND REMEDIES HEREUNDER OR UNDER ANY OTHER LOAN DOCUMENT, (iv) ANY TRANSACTION, ACT, OMISSION, EVENT OR CIRCUMSTANCE ARISING OUT OF OR IN ANY WAY CONNECTED WITH THE PROPERTY OR WITH THE MORTGAGE OR ANY OTHER LOAN DOCUMENT, (v) ANY VIOLATION ON OR PRIOR TO THE RELEASE DATE (AS HEREINAFTER DEFINED) OF ANY ENVIRONMENTAL LAW, (vi) ANY ACT, OMISSION, EVENT OR CIRCUMSTANCE EXISTING OR OCCURRING ON OR PRIOR TO THE RELEASE DATE (INCLUDING WITHOUT LIMITATION THE PRESENCE ON OR UNDER THE PROPERTY OR THE ASSOCIATED PROPERTY OR RELEASE AT, INTO, UPON, UNDER OR FROM THE PROPERTY OR THE ASSOCIATED PROPERTY OF HAZARDOUS MATERIALS DISPOSED OF OR OTHERWISE RELEASED) RESULTING FROM OR IN CONNECTION WITH THE OWNERSHIP, CONSTRUCTION, OCCUPANCY, OPERATION, USE AND/OR MAINTENANCE OF THE PROPERTY OR THE ASSOCIATED PROPERTY, REGARDLESS OF WHETHER THE ACT, OMISSION, EVENT OR CIRCUMSTANCE CONSTITUTED A VIOLATION OF ANY ENVIRONMENTAL LAW AT THE TIME OF ITS EXISTENCE OR OCCURRENCE, AND (vii) ANY AND ALL CLAIMS OR PROCEEDINGS (WHETHER BROUGHT BY PRIVATE PARTY OR GOVERNMENTAL AGENCIES) FOR HUMAN HEALTH, BODILY INJURY, PROPERTY DAMAGE, ABATEMENT OR REMEDIATION, ENVIRONMENTAL DAMAGE, CLEANUP, MITIGATION, REMOVAL, NATURAL RESOURCE DAMAGE OR IMPAIRMENT OR ANY OTHER INJURY OR DAMAGE RESULTING FROM OR RELATING TO ANY HAZARDOUS OR TOXIC SUBSTANCE, SOLID WASTE OR CONTAMINATED MATERIAL LOCATED UPON OR MIGRATING INTO, FROM OR THROUGH THE PROPERTY OR THE ASSOCIATED PROPERTY (WHETHER OR NOT THE RELEASE OF SUCH MATERIALS WAS CAUSED BY BORROWER, A TENANT OR SUBTENANT OR A PRIOR OWNER OR TENANT OR SUBTENANT ON THE PROPERTY OR THE ASSOCIATED PROPERTY AND WHETHER OR NOT THE ALLEGED LIABILITY IS ATTRIBUTABLE TO THE USE, TREATMENT, HANDLING, STORAGE, GENERATION, TRANSPORTATION, REMOVAL OR DISPOSAL OF SUCH SUBSTANCE, WASTE OR MATERIAL OR THE MERE PRESENCE OF SUCH SUBSTANCE, WASTE OR MATERIAL ON OR UNDER THE PROPERTY OR THE ASSOCIATED PROPERTY), WHICH ANY LENDER PARTY AND/OR THE TRUSTEE MAY HAVE LIABILITY WITH RESPECT TO DUE TO THE MAKING OF THE LOAN OR LOANS EVIDENCED BY THE NOTE, THE GRANTING OF THE MORTGAGE, THE EXERCISE OF ANY RIGHTS UNDER THE LOAN DOCUMENTS, OR OTHERWISE. EACH LENDER PARTY SHALL HAVE THE RIGHT TO COMPROMISE AND ADJUST ANY SUCH CLAIMS, ACTIONS AND JUDGMENTS, AND IN ADDITION TO THE RIGHTS TO BE 44 INDEMNIFIED AS HEREIN PROVIDED, ALL AMOUNTS PAID IN COMPROMISE, SATISFACTION OR DISCHARGE OF ANY SUCH CLAIM, ACTION OR JUDGMENT, AND ALL COURT COSTS, ATTORNEYS' FEES AND OTHER EXPENSES OF EVERY CHARACTER EXPENDED BY SUCH LENDER PARTY PURSUANT TO THE PROVISIONS OF THIS SECTION SHALL BE A DEMAND OBLIGATION (WHICH OBLIGATION BORROWER HEREBY EXPRESSLY PROMISES TO PAY) OWING BY BORROWER TO SUCH LENDER PARTY. THE "RELEASE DATE" AS USED HEREIN SHALL MEAN THE EARLIER OF THE FOLLOWING TWO DATES: (i) THE DATE ON WHICH THE OBLIGATIONS HAVE BEEN PAID AND PERFORMED IN FULL AND THE MORTGAGE HAS BEEN RELEASED OF RECORD, OR (ii) THE DATE ON WHICH THE LIEN OF THE MORTGAGE IS FORECLOSED OR A DEED IN LIEU OF SUCH FORECLOSURE IS FULLY EFFECTIVE AND RECORDED. The foregoing indemnification shall apply whether or not such liabilities and costs are in any way or to any extent owed, in whole or in part, under any claim or theory of strict liability, or are caused, in whole or in part, by any negligent act or omission of any kind by any Lender Party, provided only that no Lender Party and/or Trustee shall be entitled under this section to receive indemnification for that portion, if any, of any liabilities and costs which is proximately caused by its own individual gross negligence or willful misconduct, as determined in a final judgment. If any Person (including Borrower or any of its Affiliates) ever alleges such gross negligence or willful misconduct by any Lender Party, the indemnification provided for in this section shall nonetheless be paid upon demand, subject to later adjustment or reimbursement, until such time as a court of competent jurisdiction enters a final judgment as to the extent and effect of the alleged gross negligence or willful misconduct. The foregoing indemnities shall not terminate upon the Release Date or upon the release, foreclosure or other termination of the Mortgage or any other Loan Document but will survive the Release Date, foreclosure of the Mortgage or conveyance in lieu of foreclosure, and the repayment of the Obligations and the discharge and release of the Mortgage and the other Loan Documents. As used in this section the term "Lender Party" and the term "Trustee" shall refer not only to the Person designated as such but also to each director, officer, agent, trustee, attorney, employee, representative and Affiliate of or for such Lender Party or Trustee, respectively. Section 10.5. Joint and Several Liability; Parties in Interest; Assignments. (a) All Obligations which are incurred by two or more Restricted Persons shall be their joint and several obligations and liabilities. All grants, covenants and agreements contained in the Loan Documents shall bind and inure to the benefit of the parties thereto and their respective successors and assigns; provided, however, that no Restricted Person may assign or transfer any of its rights or delegate any of its duties or obligations under any Loan Document without the prior consent of all of the Lenders. Neither Borrower nor any Affiliates of Borrower shall directly or indirectly purchase or otherwise retire any Obligations owed to any Lender nor will any Lender accept any offer to do so, unless each Lender shall have received substantially the same offer with respect to the same Percentage Share of the Obligations owed to it. If Borrower or any Affiliate of Borrower at any time purchases some but less than all of the Obligations owed to all Lender Parties, such purchaser shall not be entitled to any rights of any Lender under the Loan Documents unless and until Borrower or its Affiliates have purchased all of the Obligations. 45 (b) No Lender shall sell any participation interest in its commitment hereunder or any of its rights under its Loans or under the Loan Documents to any Person unless the agreement between such Lender and such participant at all times provides: (i) that such participation exists only as a result of the agreement between such participant and such Lender and that such transfer does not give such participant any right to vote as a Lender or any other direct claims or rights against any Person other than such Lender, (ii) that such participant is not entitled to payment from any Restricted Person under Sections 3.2 through 3.8 of amounts in excess of those payable to such Lender under such sections (determined without regard to the sale of such participation), and (iii) unless such participant is an Affiliate of such Lender, that such participant shall not be entitled to require such Lender to take any action under any Loan Document or to obtain the consent of such participant prior to taking any action under any Loan Document, except for actions which would require the consent of all Lenders under subsection (a) of Section 10.1. No Lender selling such a participation shall, as between the other parties hereto and such Lender, be relieved of any of its obligations hereunder as a result of the sale of such participation. Each Lender which sells any such participation to any Person (other than an Affiliate of such Lender) shall give prompt notice thereof to Administrative Agent and Borrower. (c) Except for sales of participations under the immediately preceding subsection, no Lender shall make any assignment or transfer of any kind of its commitments or any of its rights under its Loans or under the Loan Documents, except for assignments to an Eligible Transferee, and then only if such assignment is made in accordance with the following requirements: (i) Each such assignment shall apply to all Obligations owing to the assignor Lender hereunder and to the unused portion of the assignor Lender's commitments, so that after such assignment is made the assignor Lender shall have a fixed (and not a varying) Percentage Share in its Loans and Note and be committed to make that Percentage Share of all future Loans, the assignee shall have a fixed Percentage Share in such Loans and Note and be committed to make that Percentage Share of all future Loans, and the Percentage Share of the Maximum Credit Amount of both the assignor and assignee shall equal or exceed $5,000,000. (ii) The parties to each such assignment shall execute and deliver to Administrative Agent, for its acceptance and recording in the "Register" (as defined below in this section), an Assignment and Acceptance in the form of Exhibit F, appropriately completed, together with the Note subject to such assignment and a processing fee payable to Administrative Agent of $2,500. Upon such execution, delivery, and payment and upon the satisfaction of the conditions set out in such Assignment and Acceptance, then (1) Borrower shall issue new Notes to such assignor and assignee upon return of the old Notes to Borrower, and (2) as of the "Settlement Date" specified in such Assignment and Acceptance the assignee thereunder shall be a party hereto and a Lender hereunder and Administrative Agent shall thereupon deliver to Borrower and each Lender a schedule showing the revised Percentage Shares of such assignor Lender and such assignee Lender and the Percentage Shares of all other Lenders. 46 (iii) Each assignee Lender which is not a United States person (as such term is defined in Section 7701(a)(30) of the Internal Revenue Code) for Federal income tax purposes, shall (to the extent it has not already done so) provide Administrative Agent and Borrower with the "Prescribed Forms" referred to in Section 3.6(d). (d) Nothing contained in this section shall prevent or prohibit any Lender from assigning or pledging all or any portion of its Loans and Note to any Federal Reserve Bank as collateral security pursuant to Regulation A of the Board of Governors of the Federal Reserve System and any Operating Circular issued by such Federal Reserve Bank; provided that no such assignment or pledge shall relieve such Lender from its obligations hereunder. (e) By executing and delivering an Assignment and Acceptance, each assignee Lender thereunder will be confirming to and agreeing with Borrower, Administrative Agent and each other Lender Party that such assignee understands and agrees to the terms hereof, including Article IX hereof. (f) Administrative Agent shall maintain a copy of each Assignment and Acceptance and a register for the recordation of the names and addresses of Lenders and the Percentage Shares of, and principal amount of the Loans owing to, each Lender from time to time (in this section called the "Register"). The entries in the Register shall be conclusive, in the absence of manifest error, and Borrower and each Lender Party may treat each Person whose name is recorded in the Register as a Lender hereunder for all purposes. The Register shall be available for inspection by Borrower or any Lender Party at any reasonable time and from time to time upon reasonable prior notice. Section 10.6. Confidentiality. Administrative Agent and each Lender (each, a "Lending Party") agrees to keep confidential any information furnished or made available to it by any Restricted Person pursuant to this Agreement that is marked confidential; provided that nothing herein shall prevent any Lending Party from disclosing such information (a) to any other Lending Party or any Affiliate of any Lending Party, or any officer, director, employee, agent, or advisor of any Lending Party or Affiliate of any Lending Party, (b) to any other Person if reasonably incidental to the administration of the credit facility provided herein, (c) as required by any Law, (d) upon the order of any court or administrative agency, (e) upon the request or demand of any Tribunal, (f) that is or becomes available to the public or that is or becomes available to any Lending Party other than as a result of a disclosure by any Lending Party prohibited by this Agreement, (g) in connection with any litigation to which such Lending Party or any of its Affiliates may be a party, (h) to the extent necessary in connection with the exercise of any right or remedy under this Agreement or any other Loan Document, and (i) subject to provisions substantially similar to those contained in this section, to any actual or proposed participant or assignee. Section 10.7. Governing Law; Submission to Process. EXCEPT TO THE EXTENT THAT THE LAW OF ANOTHER JURISDICTION IS EXPRESSLY ELECTED IN A LOAN DOCUMENT, THE LOAN DOCUMENTS SHALL BE DEEMED CONTRACTS AND INSTRUMENTS MADE UNDER THE LAWS OF THE STATE OF TEXAS AND SHALL BE CONSTRUED AND ENFORCED IN ACCORDANCE WITH AND GOVERNED BY THE LAWS OF THE STATE OF TEXAS AND THE LAWS OF THE UNITED STATES OF AMERICA, WITHOUT REGARD TO PRINCIPLES OF CONFLICTS OF LAW. CHAPTER 346 OF THE TEXAS FINANCE CODE (WHICH REGULATES CERTAIN REVOLVING 47 CREDIT LOAN ACCOUNTS AND REVOLVING TRI-PARTY ACCOUNTS) DOES NOT APPLY TO THIS AGREEMENT OR TO THE NOTES. BORROWER HEREBY IRREVOCABLY SUBMITS ITSELF AND EACH OTHER RESTRICTED PERSON TO THE JURISDICTION OF THE STATE AND FEDERAL COURTS SITTING IN THE STATE OF TEXAS AND AGREES AND CONSENTS THAT SERVICE OF PROCESS MAY BE MADE UPON IT OR ANY RESTRICTED PERSON IN ANY LEGAL PROCEEDING RELATING TO THE LOAN DOCUMENTS OR THE OBLIGATIONS BY ANY MEANS ALLOWED UNDER TEXAS OR FEDERAL LAW. ANY LEGAL PROCEEDING ARISING OUT OF OR IN ANY WAY RELATED TO ANY OF THE LOAN DOCUMENTS SHALL BE BROUGHT AND LITIGATED EXCLUSIVELY IN THE UNITED STATES DISTRICT COURT FOR THE SOUTHERN DISTRICT OF TEXAS, HOUSTON DIVISION, TO THE EXTENT IT HAS SUBJECT MATTER JURISDICTION, AND OTHERWISE IN THE TEXAS DISTRICT COURTS SITTING IN HARRIS COUNTY, TEXAS. THE PARTIES HERETO HEREBY WAIVE AND AGREE NOT TO ASSERT, BY WAY OF MOTION, AS A DEFENSE OR OTHERWISE, THAT ANY SUCH PROCEEDING IS BROUGHT IN AN INCONVENIENT FORUM OR THAT THE VENUE THEREOF IS IMPROPER, AND FURTHER AGREE TO A TRANSFER OF ANY SUCH PROCEEDING TO A FEDERAL COURT SITTING IN THE STATE OF TEXAS TO THE EXTENT THAT IT HAS SUBJECT MATTER JURISDICTION, AND OTHERWISE TO A STATE COURT IN DALLAS, TEXAS. IN FURTHERANCE THEREOF, BORROWER AND LENDER PARTIES EACH HEREBY ACKNOWLEDGE AND AGREE THAT IT WAS NOT INCONVENIENT FOR THEM TO NEGOTIATE AND RECEIVE FUNDING OF THE TRANSACTIONS CONTEMPLATED BY THIS AGREEMENT IN SUCH COUNTY AND THAT IT WILL BE NEITHER INCONVENIENT NOR UNFAIR TO LITIGATE OR OTHERWISE RESOLVE ANY DISPUTES OR CLAIMS IN A COURT SITTING IN SUCH COUNTY. Section 10.8. Limitation on Interest. Lender Parties, Restricted Persons and any other parties to the Loan Documents intend to contract in strict compliance with applicable usury Law from time to time in effect. In furtherance thereof such Persons stipulate and agree that none of the terms and provisions contained in the Loan Documents shall ever be construed to create a contract to pay, for the use, forbearance or detention of money, interest in excess of the maximum amount of interest permitted to be charged by applicable Law from time to time in effect. Neither any Restricted Person nor any present or future guarantors, endorsers, or other Persons hereafter becoming liable for payment of any Obligation shall ever be liable for unearned interest thereon or shall ever be required to pay interest thereon in excess of the maximum amount that may be lawfully contracted for, charged, or received under applicable Law from time to time in effect, and the provisions of this section shall control over all other provisions of the Loan Documents which may be in conflict or apparent conflict herewith. Lender Parties expressly disavow any intention to contract for, charge, or collect excessive unearned interest or finance charges in the event the maturity of any Obligation is accelerated. If (a) the maturity of any Obligation is accelerated for any reason, (b) any Obligation is prepaid and as a result any amounts held to constitute interest are determined to be in excess of the legal maximum, or (c) any Lender or any other holder of any or all of the Obligations shall otherwise collect moneys which are determined to constitute interest which would otherwise increase the interest on any or all of the Obligations to an amount in excess of that permitted to be charged by applicable Law then in effect, then all sums determined to constitute interest in excess of such legal limit shall, without penalty, be promptly applied to reduce the then outstanding principal of the related Obligations or, at such Lender's or holder's option, promptly returned to Borrower or the other payor thereof upon such determination. In determining whether or not the interest paid or payable, under any specific circumstance, exceeds the maximum amount permitted under applicable Law, Lender Parties and Restricted Persons (and any other payors thereof) shall to the greatest extent permitted under applicable Law, (i) characterize any non-principal payment as an expense, fee or premium rather than as interest, (ii) exclude voluntary prepayments and the effects thereof, and (iii) amortize, prorate, allocate, and spread the total amount of interest 48 throughout the entire contemplated term of the instruments evidencing the Obligations in accordance with the amounts outstanding from time to time thereunder and the maximum legal rate of interest from time to time in effect under applicable Law in order to lawfully contract for, charge, or receive the maximum amount of interest permitted under applicable Law. In the event applicable Law provides for an interest ceiling under Chapter 303 of the Texas Finance Code (the "Texas Finance Code") as amended, for that day, the ceiling shall be the "weekly ceiling" as defined in the Texas Finance Code, provided that if any applicable Law permits greater interest, the Law permitting the greatest interest shall apply. As used in this section the term "applicable Law" means the Laws of the State of Texas or the Laws of the United States of America, whichever Laws allow the greater interest, as such Laws now exist or may be changed or amended or come into effect in the future. Section 10.9. Termination; Limited Survival. In its sole and absolute discretion Borrower may at any time that no Obligations are owing elect in a written notice delivered to Administrative Agent to terminate this Agreement. Upon receipt by Administrative Agent of such a notice, if no Obligations are then owing this Agreement and all other Loan Documents shall thereupon be terminated and the parties thereto released from all prospective obligations thereunder. Notwithstanding the foregoing or anything herein to the contrary, any waivers or admissions made by any Restricted Person in any Loan Document, any Obligations under Sections 3.2 through 3.6, and any obligations which any Person may have to indemnify or compensate any Lender Party shall survive any termination of this Agreement or any other Loan Document. At the request and expense of Borrower, Administrative Agent shall prepare and execute all necessary instruments to reflect and effect such termination of the Loan Documents. Administrative Agent is hereby authorized to execute all such instruments on behalf of all Lenders, without the joinder of or further action by any Lender. Section 10.10. Severability. If any term or provision of any Loan Document shall be determined to be illegal or unenforceable all other terms and provisions of the Loan Documents shall nevertheless remain effective and shall be enforced to the fullest extent permitted by applicable Law. Section 10.11. Counterparts; Fax. This Agreement may be separately executed in any number of counterparts and by different parties hereto in separate counterparts, each of which when so executed shall be deemed to constitute one and the same Agreement. This Agreement and the Loan Documents may be validly executed and delivered by facsimile or other electronic transmission. Section 10.12. WAIVER OF JURY TRIAL. BORROWER, EACH OTHER RESTRICTED PERSON AND EACH LENDER PARTY HEREBY ACKNOWLEDGE THAT THE RIGHT TO TRIAL BY JURY IS A CONSTITUTIONAL ONE, BUT THAT IT MAY BE WAIVED. EACH OF THEM, AFTER CONSULTING OR HAVING HAD THE OPPORTUNITY TO CONSULT, WITH COUNSEL OF THEIR CHOICE, KNOWINGLY VOLUNTARILY AND INTENTIONALLY WAIVES ANY RIGHT ANY OF THEM MAY HAVE TO A TRIAL BY JURY IN ANY LITIGATION BASED UPON OR ARISING OUT OF ANY LOAN DOCUMENT OR ANY OF THE TRANSACTIONS CONTEMPLATED BY THE LOAN DOCUMENTS OR ANY COURSE OF CONDUCT, DEALING, STATEMENTS (WHETHER ORAL OR WRITTEN), OR ACTION OF ANY OF THEM. THESE 49 PROVISIONS SHALL NOT BE DEEMED TO HAVE BEEN MODIFIED IN ANY RESPECT OR RELINQUISHED BY BORROWER OR ANY LENDER PARTY, EXCEPT BY A WRITTEN INSTRUMENT EXECUTED BY BORROWER AND ALL LENDER PARTIES. Section 10.13. Waiver of Punitive Damages. Borrower, each other Restricted Person and each Lender Party hereby knowingly, voluntarily, intentionally, and irrevocably (a) waives, to the maximum extent not prohibited by Law, any right it may have to claim or recover any "Special Damages" in any litigation based hereon or directly or indirectly at any time arising out of, under or in connection with the Loan Documents or any transaction contemplated thereby or associated therewith, before or after maturity, (b) certifies that no party hereto nor any representative or agent or counsel for any party hereto has represented, expressly or otherwise, or implied that such party would not, in the event of litigation, seek to enforce the foregoing waiver or the waiver set forth in Section 10.12 above, and (c) acknowledges that it has been induced to enter into this Agreement, the other Loan Documents and the transactions contemplated hereby and thereby by, among other things, the mutual waivers and certifications contained in clause (a) above and Section 10.12 above. As used in this section, "Special Damages" includes all special, consequential, exemplary, or punitive damages (regardless of how named), but does not include any payments or funds which any party hereto has expressly promised to pay or deliver to any other party hereto. Section 10.14. Binding Arbitration. EACH OF BORROWER, RESTRICTED PERSONS AND LENDER PARTIES HEREBY KNOWINGLY, VOLUNTARILY, INTENTIONALLY, AND IRREVOCABLY SUBMIT TO BINDING ARBITRATION PURSUANT TO THE TERMS AND CONDITIONS SET FORTH BELOW, and each party hereto agrees that upon the written demand of any party, whether made before or after the institution of any legal proceedings, but prior to the rendering of any judgment in that proceeding, all disputes, claims and controversies between any of them, whether individual, joint, or class in nature, arising herefrom or otherwise, including without limitation contract disputes and tort claims, shall be resolved by binding arbitration pursuant to the arbitration provisions attached hereto as Exhibit I, such exhibit incorporated herein hereby in its entirety. 50 IN WITNESS WHEREOF, this Agreement is executed as of the date first written above. FRC-WPP NRP INVESTMENT L.P., Borrower By: FRC-WPP GP LLC, its general partner By: ---------------------------------------- Alex T. Krueger Manager Address: One Lafayette Place Greenwich, Connecticut 06830 Attention: Thomas R. Denison Telephone: 203-661-6601 Fax: 203-661-6729 E-Mail: tdenison@firstreserve.com SIGNATURE PAGE OF BORROWER TERM LOAN AGREEMENT SOUTHWEST BANK OF TEXAS, N.A., Administrative Agent and Lender By: ---------------------------------------- Bryan Chapman, Senior Vice President - Energy Lending Address: Southwest Bank of Texas, N.A. 5 Post Oak Park 4400 Post Oak Parkway Houston, Texas 77027 Attention: Bryan Chapman Telephone: 713-232-2026 Fax: 713-561-0345 E-mail: bchapman@swbanktx.com SIGNATURE PAGE OF ADMINISTRATIVE AGENT AND LENDER TERM LOAN AGREEMENT -----END PRIVACY-ENHANCED MESSAGE-----