exv4w1



 




EXHIBIT
4.1



 











SECOND AMENDED AND RESTATED




AGREEMENT OF LIMITED PARTNERSHIP




OF




NATURAL RESOURCE PARTNERS L.P.






 









 









 












TABLE OF CONTENTS




	 	 	 	 	 	 	 
	 	 	ARTICLE I
	 	 	 	 
	 	 	 
	 	 	 	 
	 	 	DEFINITIONS
	 	 	 	 
	 	 	 
	 	 	 	 
	Section 1.1	 	Definitions
	 	 	2	 
	Section 1.2	 	Construction
	 	 	23	 
	 	 	 
	 	 	 	 
	 	 	ARTICLE II
	 	 	 	 
	 	 	 
	 	 	 	 
	 	 	ORGANIZATION
	 	 	 	 
	 	 	 
	 	 	 	 
	Section 2.1	 	Formation
	 	 	23	 
	Section 2.2	 	Name
	 	 	23	 
	Section 2.3	 	Registered Office; Registered Agent; Principal Office; Other Offices
	 	 	24	 
	Section 2.4	 	Purpose and Business
	 	 	24	 
	Section 2.5	 	Powers
	 	 	24	 
	Section 2.6	 	Power of Attorney
	 	 	25	 
	Section 2.7	 	Term
	 	 	26	 
	Section 2.8	 	Title to Partnership Assets
	 	 	26	 
	 	 	 
	 	 	 	 
	 	 	ARTICLE III
	 	 	 	 
	 	 	 
	 	 	 	 
	 	 	RIGHTS OF LIMITED PARTNERS
	 	 	 	 
	 	 	 
	 	 	 	 
	Section 3.1	 	Limitation of Liability
	 	 	27	 
	Section 3.2	 	Management of Business
	 	 	27	 
	Section 3.3	 	Outside Activities of the Limited Partners
	 	 	27	 
	Section 3.4	 	Rights of Limited Partners
	 	 	27	 
	 	 	 
	 	 	 	 
	 	 	ARTICLE IV
	 	 	 	 
	 	 	 
	 	 	 	 
	 	 	CERTIFICATES; RECORD HOLDERS; TRANSFER OF
	 	 	 	 
	 	 	PARTNERSHIP INTERESTS; REDEMPTION
	 	 	 	 
	 	 	OF PARTNERSHIP INTERESTS
	 	 	 	 
	 	 	 
	 	 	 	 
	Section 4.1	 	Certificates
	 	 	28	 
	Section 4.2	 	Mutilated, Destroyed, Lost or Stolen Certificates
	 	 	29	 
	Section 4.3	 	Record Holders
	 	 	30	 
	Section 4.4	 	Transfer Generally
	 	 	30	 
	Section 4.5	 	Registration and Transfer of Limited Partner Interests
	 	 	30	 
	Section 4.6	 	Transfer of the General Partner’s General Partner Interest
	 	 	31	 
	Section 4.7	 	Transfer of Incentive Distribution Rights
	 	 	32	 






NATURAL RESOURCE PARTNERS L.P.

SECOND AMENDED AND RESTATED AGREEMENT OF LIMITED PARTNERSHIP





 









 








	 	 	 	 	 	 	 
	Section 4.8	 	Restrictions on Transfers
	 	 	32	 
	Section 4.9	 	Citizenship Certificates; Non-citizen Assignees
	 	 	33	 
	Section 4.10	 	Redemption of Partnership Interests of Non-citizen Assignees
	 	 	34	 
	 	 	 
	 	 	 	 
	 	 	ARTICLE V
	 	 	 	 
	 	 	 
	 	 	 	 
	 	 	CAPITAL CONTRIBUTIONS AND ISSUANCE OF 

PARTNERSHIP INTERESTS
	 	 	 	 
	 	 	 
	 	 	 	 
	Section 5.1	 	Organizational Contributions
	 	 	35	 
	Section 5.2	 	Contributions by the General Partner and its Affiliates
	 	 	36	 
	Section 5.3	 	Contributions by Initial Limited Partners
	 	 	36	 
	Section 5.4	 	Interest and Withdrawal
	 	 	36	 
	Section 5.5	 	Capital Accounts
	 	 	36	 
	Section 5.6	 	Issuances of Additional Partnership Securities
	 	 	39	 
	Section 5.7	 	Limitations on Issuance of Additional Partnership Securities
	 	 	40	 
	Section 5.8	 	Conversion of Subordinated Units
	 	 	43	 
	Section 5.9	 	Limited Preemptive Right
	 	 	45	 
	Section 5.10	 	Splits and Combinations
	 	 	45	 
	Section 5.11	 	Fully Paid and Non-Assessable Nature of Limited Partner Interests
	 	 	46	 
	Section 5.12	 	Establishment of Class B Units
	 	 	46	 
	 	 	 
	 	 	 	 
	 	 	ARTICLE VI
	 	 	 	 
	 	 	 
	 	 	 	 
	 	 	ALLOCATIONS AND DISTRIBUTIONS
	 	 	 	 
	 	 	 
	 	 	 	 
	Section 6.1	 	Allocations for Capital Account Purposes
	 	 	52	 
	Section 6.2	 	Allocations for Tax Purposes
	 	 	60	 
	Section 6.3	 	Requirement and Characterization of Distributions; Distributions to Record Holders
	 	 	62	 
	Section 6.4	 	Distributions of Available Cash from Operating Surplus
	 	 	63	 
	Section 6.5	 	Distributions of Available Cash from Capital Surplus
	 	 	65	 
	Section 6.6	 	Adjustment of Minimum Quarterly Distribution and Target Distribution Levels
	 	 	65	 
	Section 6.7	 	Special Provisions Relating to the Holders of Subordinated Units and Class B Units
	 	 	66	 
	Section 6.8	 	Special Provisions Relating to the Holders of Incentive Distribution Rights
	 	 	67	 
	Section 6.9	 	Entity-Level Taxation
	 	 	67	 
	 	 	 
	 	 	 	 
	 	 	ARTICLE VII
	 	 	 	 
	 	 	 
	 	 	 	 
	 	 	MANAGEMENT AND OPERATION OF BUSINESS
	 	 	 	 
	 	 	 
	 	 	 	 
	Section 7.1  	 	Management
	 	 	67	 






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	Section 7.2	 	Certificate of Limited Partnership
	 	 	70	 
	Section 7.3	 	Restrictions on the General Partner’s Authority
	 	 	70	 
	Section 7.4	 	Reimbursement of the General Partner
	 	 	71	 
	Section 7.5	 	Outside Activities
	 	 	72	 
	Section 7.6	 	Loans from the General Partner; Loans or Contributions from the
Partnership; Contracts with Affiliates;
Certain Restrictions on the General Partner
	 	 	73	 
	Section 7.7	 	Indemnification
	 	 	75	 
	Section 7.8	 	Liability of Indemnitees
	 	 	76	 
	Section 7.9	 	Resolution of Conflicts of Interest
	 	 	77	 
	Section 7.10	 	Other Matters Concerning the General Partner
	 	 	79	 
	Section 7.11	 	Purchase or Sale of Partnership Securities
	 	 	79	 
	Section 7.12	 	Registration Rights of the General Partner and its Affiliates
	 	 	79	 
	Section 7.13	 	Reliance by Third Parties
	 	 	83	 
	 	 	 
	 	 	 	 
	 	 	ARTICLE VIII
	 	 	 	 
	 	 	 
	 	 	 	 
	 	 	BOOKS, RECORDS, ACCOUNTING AND REPORTS
	 	 	 	 
	 	 	 
	 	 	 	 
	Section 8.1	 	Records and Accounting
	 	 	84	 
	Section 8.2	 	Fiscal Year
	 	 	84	 
	Section 8.3	 	Reports
	 	 	84	 
	 	 	 
	 	 	 	 
	 	 	ARTICLE IX 
	 	 	 	 
	 	 	 
	 	 	 	 
	 	 	TAX MATTERS
	 	 	 	 
	 	 	 
	 	 	 	 
	Section 9.1	 	Tax Returns and Information
	 	 	85	 
	Section 9.2	 	Tax Elections
	 	 	85	 
	Section 9.3	 	Tax Controversies
	 	 	85	 
	Section 9.4	 	Withholding
	 	 	85	 
	 	 	 
	 	 	 	 
	 	 	ARTICLE X
	 	 	 	 
	 	 	 
	 	 	 	 
	 	 	ADMISSION OF PARTNERS
	 	 	 	 
	 	 	 
	 	 	 	 
	Section 10.1	 	Intentionally Omitted
	 	 	86	 
	Section 10.2	 	Admission of Substituted Limited Partner
	 	 	86	 
	Section 10.3	 	Admission of Successor General Partner
	 	 	87	 
	Section 10.4	 	Admission of Additional Limited Partners
	 	 	87	 
	Section 10.5  	 	Amendment of Agreement and Certificate of Limited Partnership
	 	 	87	 






NATURAL RESOURCE PARTNERS L.P.

SECOND AMENDED AND RESTATED AGREEMENT OF LIMITED PARTNERSHIP




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	 	 	ARTICLE XI
	 	 	 	 
	 	 	 
	 	 	 	 
	 	 	WITHDRAWAL OR REMOVAL OF PARTNERS
	 	 	 	 
	 	 	 
	 	 	 	 
	Section 11.1	 	Withdrawal of the General Partner
	 	 	88	 
	Section 11.2	 	Removal of the General Partner
	 	 	89	 
	Section 11.3	 	Interest of Departing Partner and Successor General Partner
	 	 	90	 
	Section 11.4	 	Termination of Subordination Period, Conversion of Subordinated Units and
Extinguishment of Cumulative
Common Unit Arrearages
	 	 	91	 
	Section 11.5	 	Withdrawal of Limited Partners
	 	 	91	 
	 	 	 
	 	 	 	 
	 	 	ARTICLE XII
	 	 	 	 
	 	 	 
	 	 	 	 
	 	 	DISSOLUTION AND LIQUIDATION 
	 	 	 	 
	 	 	 
	 	 	 	 
	Section 12.1	 	Dissolution
	 	 	92	 
	Section 12.2	 	Continuation of the Business of the Partnership After Dissolution
	 	 	92	 
	Section 12.3	 	Liquidator
	 	 	93	 
	Section 12.4	 	Liquidation
	 	 	94	 
	Section 12.5	 	Cancellation of Certificate of Limited Partnership
	 	 	94	 
	Section 12.6	 	Return of Contributions
	 	 	95	 
	Section 12.7	 	Waiver of Partition
	 	 	95	 
	Section 12.8	 	Capital Account Restoration
	 	 	95	 
	 	 	 
	 	 	 	 
	 	 	ARTICLE XIII
	 	 	 	 
	 	 	 
	 	 	 	 
	 	 	AMENDMENT OF PARTNERSHIP AGREEMENT; 
MEETINGS; RECORD DATE
	 	 	 	 
	 	 	 
	 	 	 	 
	Section 13.1	 	Amendment to be Adopted Solely by the General Partner
	 	 	95	 
	Section 13.2	 	Amendment Procedures
	 	 	97	 
	Section 13.3	 	Amendment Requirements
	 	 	97	 
	Section 13.4	 	Special Meetings
	 	 	98	 
	Section 13.5	 	Notice of a Meeting
	 	 	98	 
	Section 13.6	 	Record Date
	 	 	98	 
	Section 13.7	 	Adjournment
	 	 	98	 
	Section 13.8	 	Waiver of Notice; Approval of Meeting; Approval of Minutes
	 	 	99	 
	Section 13.9	 	Quorum
	 	 	99	 
	Section 13.10	 	Conduct of a Meeting
	 	 	100	 
	Section 13.11	 	Action Without a Meeting
	 	 	100	 
	Section 13.12  	 	Voting and Other Rights
	 	 	101	 






NATURAL RESOURCE PARTNERS L.P.

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	 	 	ARTICLE XIV
	 	 	 	 
	 	 	 
	 	 	 	 
	 	 	MERGER
	 	 	 	 
	 	 	 
	 	 	 	 
	Section 14.1	 	Authority
	 	 	101	 
	Section 14.2	 	Procedure for Merger or Consolidation
	 	 	101	 
	Section 14.3	 	Approval by Limited Partners of Merger or Consolidation
	 	 	102	 
	Section 14.4	 	Certificate of Merger
	 	 	103	 
	Section 14.5	 	Effect of Merger
	 	 	103	 
	 	 	 
	 	 	 	 
	 	 	ARTICLE XV
	 	 	 	 
	 	 	 
	 	 	 	 
	 	 	RIGHT TO ACQUIRE LIMITED PARTNER INTERESTS
	 	 	 	 
	 	 	 
	 	 	 	 
	Section 15.1	 	Right to Acquire Limited Partner Interests
	 	 	104	 
	 	 	 
	 	 	 	 
	 	 	ARTICLE XVI
	 	 	 	 
	 	 	 
	 	 	 	 
	 	 	GENERAL PROVISIONS
	 	 	 	 
	 	 	 
	 	 	 	 
	Section 16.1	 	Addresses and Notices
	 	 	106	 
	Section 16.2	 	Further Action
	 	 	106	 
	Section 16.3	 	Binding Effect
	 	 	106	 
	Section 16.4	 	Integration
	 	 	107	 
	Section 16.5	 	Creditors
	 	 	107	 
	Section 16.6	 	Waiver
	 	 	107	 
	Section 16.7	 	Counterparts
	 	 	107	 
	Section 16.8	 	Applicable Law
	 	 	107	 
	Section 16.9	 	Invalidity of Provisions
	 	 	107	 
	Section 16.10	 	Consent of Partners
	 	 	107	 






NATURAL RESOURCE PARTNERS L.P.

SECOND AMENDED AND RESTATED AGREEMENT OF LIMITED PARTNERSHIP




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SECOND AMENDED AND RESTATED AGREEMENT OF LIMITED

PARTNERSHIP OF NATURAL RESOURCE PARTNERS L.P.




     THIS SECOND AMENDED AND RESTATED AGREEMENT OF LIMITED PARTNERSHIP OF NATURAL RESOURCE PARTNERS
L.P., dated as of January 4, 2007, is entered into by and among NRP (GP) LP, a Delaware limited
partnership, as the General Partner, and the Limited Partners, together with any other Persons who
become Partners in the Partnership as provided herein.



     WHEREAS, the General Partner, the Organizational Limited Partner, and the Limited Partners of
the Partnership entered into that certain First Amended and Restated Agreement of Limited
Partnership of the Partnership dated as of October 17, 2002 (the “Partnership Agreement”);



     WHEREAS, Section 13.1(d)(i) of the Partnership Agreement provides that the General Partner may
amend any provision of the Partnership Agreement without the approval of any Partner or Assignee to
reflect a change that, in the discretion of the General Partner, does not adversely affect the
Limited Partners (including any particular class of Partnership Interests as compared to other
classes of Partnership Interests) in any material respect;



     WHEREAS, acting pursuant to the power and authority granted to the General Partner under
Section 13.1(d)(i) of the Partnership Agreement, the General Partner entered into Amendment No. 1
to the Partnership Agreement effective as of December 8, 2003, Amendment No. 2 to the Partnership
Agreement effective as of August 2, 2005 and Amendment No. 3 to the Partnership Agreement effective
as of October 20, 2005 (as so amended, the “Amended Partnership Agreement”);



     WHEREAS, Section 5.6(a) of the Amended Partnership Agreement provides that the Partnership may
issue additional Partnership Securities for any Partnership purpose at any time and from time to
time to such Persons for such consideration and on such terms and conditions as shall be
established by the General Partner in its sole discretion, all without the approval of any Limited
Partners;



     WHEREAS, Section 5.6(b) of the Amended Partnership Agreement provides that the Partnership
Securities authorized to be issued by the Partnership pursuant to Section 5.6(a) of the Amended
Partnership Agreement may be issued in one or more classes, or one or more series of any such
classes, with such designations, preferences, rights, powers and duties as shall be fixed by the
General Partner in the exercise of its sole discretion;



     WHEREAS, Section 13.1(g) of the Amended Partnership Agreement provides that the General
Partner, without the approval of any Partner or Assignee (subject to the provisions of Section 5.7
of the Amended Partnership Agreement), may amend any provision of the Amended Partnership Agreement
to reflect an amendment that, in the discretion of the General Partner, is necessary or advisable
in connection with the authorization of issuance of any class or series of Partnership Securities
pursuant to Section 5.6 of the Amended Partnership Agreement;



NATURAL RESOURCE PARTNERS L.P.

SECOND AMENDED AND RESTATED AGREEMENT OF LIMITED PARTNERSHIP





 









 








     WHEREAS, the General Partner has determined that the issuance of the Class B Units provided
for in this Agreement is permitted by Section 5.7 of the Amended Partnership Agreement;



     WHEREAS, Section 13.1(d)(i) of the Amended Partnership Agreement provides that the General
Partner may amend any provision of the Amended Partnership Agreement without the approval of any
Partner or Assignee to reflect a change that, in the discretion of the General Partner, does not
adversely affect the Limited Partners (including any particular class of Partnership Interests as
compared to other classes of Partnership Interests) in any material respect; and



     WHEREAS, acting pursuant to the power and authority granted to the General Partner under
Section 13.1(d)(i) of the Amended Partnership Agreement and Section 13(g) of the Amended
Partnership Agreement, the General Partner desires (i) to amend the Amended Partnership Agreement
to create a class of Units to be designated the “Class B Units” and to fix the preferences and the
relative, participating, optional and other special rights, powers and duties pertaining to the
Class B Units and (ii) to restate the Amended Partnership Agreement, as amended by the amendments
described in clause (i) of this paragraph.



     NOW, THEREFORE, the General Partner does hereby amend and restate the Amended Partnership
Agreement to provide in its entirety as follows:



ARTICLE I




DEFINITIONS




Section 1.1 Definitions.




     The following definitions shall be for all purposes, unless otherwise clearly indicated to the
contrary, applied to the terms used in this Agreement.



     “Acquisition” means any transaction in which any Group Member acquires (through an asset
acquisition, merger, stock acquisition or other form of investment) control over all or a portion
of the assets, properties or business of another Person for the purpose of increasing the operating
capacity or revenues of the Partnership Group from the operating capacity or revenues of the
Partnership Group existing immediately prior to such transaction.



     “Additional Book Basis” means the portion of any remaining Carrying Value of an Adjusted
Property that is attributable to positive adjustments made to such Carrying Value as a result of
Book-Up Events. For purposes of determining the extent that Carrying Value constitutes Additional
Book Basis:




     (i) Any negative adjustment made to the Carrying Value of an Adjusted Property as a
result of either a Book-Down Event or a Book-Up Event shall first be deemed to offset or
decrease that portion of the Carrying Value of such Adjusted
Property that is attributable to any prior positive adjustments made thereto pursuant
to a Book-Up Event or Book-Down Event.



2









 






     (ii) If Carrying Value that constitutes Additional Book Basis is reduced as a result of
a Book-Down Event and the Carrying Value of other property is increased as a result of such
Book-Down Event, an allocable portion of any such increase in Carrying Value shall be
treated as Additional Book Basis; provided that the amount treated as Additional Book Basis
pursuant hereto as a result of such Book-Down Event shall not exceed the amount by which the
Aggregate Remaining Net Positive Adjustments after such Book-Down Event exceeds the
remaining Additional Book Basis attributable to all of the Partnership’s Adjusted Property
after such Book-Down Event (determined without regard to the application of this clause (ii)
to such Book-Down Event).



     “Additional Book Basis Derivative Items” means any Book Basis Derivative Items that are
computed with reference to Additional Book Basis. To the extent that the Additional Book Basis
attributable to all of the Partnership’s Adjusted Property as of the beginning of any taxable
period exceeds the Aggregate Remaining Net Positive Adjustments as of the beginning of such period
(the “Excess Additional Book Basis”), the Additional Book Basis Derivative Items for such period
shall be reduced by the amount that bears the same ratio to the amount of Additional Book Basis
Derivative Items determined without regard to this sentence as the Excess Additional Book Basis
bears to the Additional Book Basis as of the beginning of such period.



     “Additional Limited Partner” means a Person admitted to the Partnership as a Limited Partner
pursuant to Section 10.4 and who is shown as such on the books and records of the Partnership.



     “Adena” means Adena Minerals, LLC, a Delaware limited liability company.



     “Adena Contribution Agreements” means (i) that certain Contribution Agreement, dated as of
December 14, 2006 by and among Foresight, Adena, the Partnership, the General Partner and the
Operating Company and (ii) the Second Contribution Agreement.



     “Adena Group” means Cline, Foresight and Adena and their respective Affiliates (including,
without limitation, all Persons that are Affiliates of any of such Persons as of the date of this
Agreement and all Persons that become Affiliates of any of such Persons after the date of this
Agreement) other than the Partnership Group.



     “Adena Restricted Business” has the meaning assigned to the term “Restricted Business” under
the Restricted Business Contribution Agreement.



     “Adjusted Capital Account” means the Capital Account maintained for each Partner as of the end
of each fiscal year of the Partnership, (a) increased by any amounts that such Partner is obligated
to restore under the standards set by Treasury Regulation Section 1.704-1(b)(2)(ii)(c) (or is
deemed obligated to restore under Treasury Regulation Sections 1.704-2(g) and 1.704-2(i)(5)) and
(b) decreased by (i) the amount of all losses and deductions that, as of the end of
such fiscal year, are reasonably expected to be allocated to such Partner in subsequent years
under Sections 704(e)(2) and 706(d) of the Code and Treasury Regulation Section 1.751-1(b)(2)(ii),
and (ii) the amount of all distributions that, as of the end of such fiscal year, are reasonably
expected to be made to such Partner in subsequent years in accordance with the terms



3









 







of this
Agreement or otherwise to the extent they exceed offsetting increases to such Partner’s Capital
Account that are reasonably expected to occur during (or prior to) the year in which such
distributions are reasonably expected to be made (other than increases as a result of a minimum
gain chargeback pursuant to Section 6.1(d)(i) or 6.1(d)(ii)). The foregoing definition of Adjusted
Capital Account is intended to comply with the provisions of Treasury Regulation Section
1.704-1(b)(2)(ii)(d) and shall be interpreted consistently therewith. The “Adjusted Capital
Account” of a Partner in respect of a General Partner Interest, a Common Unit, a Subordinated Unit,
a Class B Unit or an Incentive Distribution Right or any other specified interest in the
Partnership shall be the amount which such Adjusted Capital Account would be if such General
Partner Interest, Common Unit, Subordinated Unit, Class B Unit, Incentive Distribution Right or
other interest in the Partnership were the only interest in the Partnership held by such Partner
from and after the date on which such General Partner Interest, Common Unit, Subordinated Unit,
Class B Unit, Incentive Distribution Right or other interest was first issued.



     “Adjusted Operating Surplus” means, with respect to any period, Operating Surplus generated
during such period (a) less (i) any net increase in Working Capital Borrowings with respect to such
period and (ii) any net reduction in cash reserves for Operating Expenditures with respect to such
period not relating to an Operating Expenditure made with respect to such period, and (b) plus (i)
any net decrease in Working Capital Borrowings with respect to such period, and (ii) any net
increase in cash reserves for Operating Expenditures with respect to such period required by any
debt instrument for the repayment of principal, interest or premium. Adjusted Operating Surplus
does not include that portion of Operating Surplus included in clause (a)(i) of the definition of
Operating Surplus.



     “Adjusted Property” means any property the Carrying Value of which has been adjusted pursuant
to Section 5.5(d)(i) or 5.5(d)(ii).



     “Affiliate” means, with respect to any Person, any other Person that directly or indirectly
through one or more intermediaries controls, is controlled by or is under common control with, the
Person in question. For the avoidance of doubt, (a) each of Great Northern, New Gauley and Western
Pocahantas (and any successor thereto) shall be deemed to be an Affiliate for purposes of this
definition for so long as it holds an interest in the General Partner and (b) each of Cline, Adena
and Foresight (and any successors thereto) shall be deemed to be an Affiliate for purposes of this
definition for so long as it together with any of its Affiliates has the right to appoint a
director of the General Partner. As used herein, the term “control” means the possession, direct
or indirect, of the power to direct or cause the direction of the management and policies of a
Person, whether through ownership of voting securities, by contract or otherwise.



     “Aggregate Remaining Net Positive Adjustments” means, as of the end of any taxable period, the
sum of the Remaining Net Positive Adjustments of all the Partners.



     “Agreed Value” of any Contributed Property means the fair market value of such property or
other consideration at the time of contribution as determined by the General Partner using such
reasonable method of valuation as it may adopt. The General Partner shall, in its discretion, use
such method as it deems reasonable and appropriate to allocate the aggregate Agreed Value of
Contributed Properties contributed to the Partnership in a single or integrated



4









 







transaction among
each separate property on a basis proportional to the fair market value of each Contributed
Property.



     “Agreement” means this Second Amended and Restated Agreement of Limited Partnership of Natural
Resource Partners L.P., as it may be amended, supplemented or restated from time to time.



     “Amended Partnership Agreement” has the meaning assigned to such term in the Recitals.



     “Ark Land” means Ark Land Company, a Delaware corporation.



     “Assignee” means a Non-citizen Assignee or a Person to whom one or more Limited Partner
Interests have been transferred in a manner permitted under this Agreement and who has executed and
delivered a Transfer Application as required by this Agreement, but who has not been admitted as a
Substituted Limited Partner.



     “Associate” means, when used to indicate a relationship with any Person, (a) any corporation
or organization of which such Person is a director, officer or partner or is, directly or
indirectly, the owner of 20% or more of any class of voting stock or other voting interest; (b) any
trust or other estate in which such Person has at least a 20% beneficial interest or as to which
such Person serves as trustee or in a similar fiduciary capacity; and (c) any relative or spouse of
such Person, or any relative of such spouse, who has the same principal residence as such Person.



     “Available Cash” means, with respect to any Quarter ending prior to the Liquidation Date:



          (a) the sum of (i) all cash and cash equivalents of the Partnership Group on hand at the end
of such Quarter, and (ii) all additional cash and cash equivalents of the Partnership Group on hand
on the date of determination of Available Cash with respect to such Quarter resulting from Working
Capital Borrowings made subsequent to the end of such Quarter, less




          (b) the amount of any cash reserves that are necessary or appropriate in the reasonable
discretion of the General Partner to (i) provide for the proper conduct of the business of the
Partnership Group (including reserves for future capital expenditures and for anticipated future
credit needs of the Partnership Group) subsequent to such Quarter, (ii) comply with applicable law
or any loan agreement, security agreement, mortgage, debt instrument or other agreement or
obligation to which any Group Member is a party or by which it is bound or its
assets are subject or (iii) provide funds for distributions under Section 6.4 or 6.5 in
respect of any one or more of the next four Quarters; provided, however, that the General Partner
may not establish cash reserves pursuant to (iii) above if the effect of such reserves would be
that the Partnership is unable to distribute the Minimum Quarterly Distribution on all Common
Units, plus any Cumulative Common Unit Arrearage on all Common Units, with respect to such Quarter;
and, provided further, that disbursements made by a Group Member or cash reserves established,
increased or reduced after the end of such Quarter but on or before the date of




5









 







determination of
Available Cash with respect to such Quarter shall be deemed to have been made, established,
increased or reduced, for purposes of determining Available Cash, within such Quarter if the
General Partner so determines.




     Notwithstanding the foregoing, “Available Cash” with respect to the Quarter in which the
Liquidation Date occurs and any subsequent Quarter shall equal zero.



     “Book Basis Derivative Items” means any item of income, deduction, gain or loss included in
the determination of Net Income or Net Loss that is computed with reference to the Carrying Value
of an Adjusted Property (e.g., depreciation, depletion, or gain or loss with respect to an Adjusted
Property).



     “Book-Down Event” means an event which triggers a negative adjustment to the Capital Accounts
of the Partners pursuant to Section 5.5(d).



     “Book-Tax Disparity” means with respect to any item of Contributed Property or Adjusted
Property, as of the date of any determination, the difference between the Carrying Value of such
Contributed Property or Adjusted Property and the adjusted basis thereof for federal income tax
purposes as of such date. A Partner’s share of the Partnership’s Book-Tax Disparities in all of its
Contributed Property and Adjusted Property will be reflected by the difference between such
Partner’s Capital Account balance as maintained pursuant to Section 5.5 and the hypothetical
balance of such Partner’s Capital Account computed as if it had been maintained strictly in
accordance with federal income tax accounting principles.



     “Book-Up Event” means an event which triggers a positive adjustment to the Capital Accounts of
the Partners pursuant to Section 5.5(d).



     “Business Day” means Monday through Friday of each week, except that a legal holiday
recognized as such by the government of the United States of America or the State of Texas shall
not be regarded as a Business Day.



     “Capital Account” means the capital account maintained for a Partner pursuant to Section 5.5.
The “Capital Account” of a Partner in respect of a General Partner Interest, a Common Unit, a Class
B Unit, a Subordinated Unit, an Incentive Distribution Right or any other Partnership Interest
shall be the amount which such Capital Account would be if such General Partner Interest, Common
Unit, Class B Unit, Subordinated Unit, Incentive Distribution Right or other Partnership Interest
were the only interest in the Partnership held by such Partner from and
after the date on which such General Partner Interest, Common Unit, Class B Unit, Subordinated
Unit, Incentive Distribution Right or other Partnership Interest was first issued.



     “Capital Contribution” means any cash, cash equivalents or the Net Agreed Value of Contributed
Property that a Partner contributes to the Partnership pursuant to this Agreement or the
Contribution Agreement, or any payment made by the General Partner to the Partnership described in
Section 5.2(c).



     “Capital Improvement” means any (a) addition or improvement to the capital assets owned by any
Group Member or (b) acquisition of existing, or the construction of new, capital



6









 







assets (including,
without limitation, coal mines and related assets), in each case if such addition, improvement,
acquisition or construction is made to increase the operating capacity or revenues of the
Partnership Group from the operating capacity or revenues of the Partnership Group existing
immediately prior to such addition, improvement, acquisition or construction.



     “Capital Surplus” has the meaning assigned to such term in Section 6.3(a).



     “Carrying Value” means (a) with respect to a Contributed Property, the Agreed Value of such
property reduced (but not below zero) by all depreciation, amortization and cost recovery
deductions charged to the Partners’ and Assignees’ Capital Accounts in respect of such Contributed
Property, and (b) with respect to any other Partnership property, the adjusted basis of such
property for federal income tax purposes, all as of the time of determination. The Carrying Value
of any property shall be adjusted from time to time in accordance with Sections 5.5(d)(i) and
5.5(d)(ii) and to reflect changes, additions or other adjustments to the Carrying Value for
dispositions and acquisitions of Partnership properties, as deemed appropriate by the General
Partner.



     “Cause” means a court of competent jurisdiction has entered a final, non-appealable judgment
finding the General Partner liable for actual fraud, gross negligence or willful or wanton
misconduct in its capacity as a general partner of the Partnership.



     “Certificate” means a certificate (i) substantially in the form of Exhibit A to this
Agreement, (ii) issued in global form in accordance with the rules and regulations of the
Depositary or (iii) in such other form as may be adopted by the General Partner in its discretion,
issued by the Partnership evidencing ownership of one or more Common Units or a certificate, in
such form as may be adopted by the General Partner in its discretion, issued by the Partnership
evidencing ownership of one or more other Partnership Securities.



     “Certificate of Limited Partnership” means the Certificate of Limited Partnership of the
Partnership filed with the Secretary of State of the State of Delaware as such Certificate of
Limited Partnership may be amended, supplemented or restated from time to time.



     “Citizenship Certification” means a properly completed certificate in such form as may be
specified by the General Partner by which an Assignee or a Limited Partner certifies that he
(and if he is a nominee holding for the account of another Person, that to the best of his
knowledge such other Person) is an Eligible Citizen.



     “Claim” has the meaning assigned to such term in Section 7.12(d).



     “Class B Distribution Increase Date” has the meaning assigned to such term in Section 5.12(g).



     “Class B Unit Arrearage” means, with respect to any Class B Unit, whenever used, as to any
Quarter, the amount, if any, by which (a) the Minimum Quarterly Distribution in respect of such
Quarter (or, for the period from the Class B Distribution Increase Date through the Conversion
Effective Date, 110% of the Minimum Quarterly Distribution) exceeds (b) the sum



7









 







of all Available
Cash distributed with respect to a Class B Unit in respect of such Quarter pursuant to Section
5.12(b)(ii)(B)(x).



     “Class B Units” means a Partnership Security representing a fractional part of the Partnership
Interests of all Limited Partners and Assignees and having the rights and obligations specified
with respect to the Class B Units in this Agreement. The term “Class B Unit” does not refer to (a)
a Common Unit prior to the conversion of a Class B Unit into a Common Unit pursuant to the terms
hereof or (b) a Subordinated Unit.



     “Cline” means Christopher Cline, an individual residing in Palm Beach County, Florida.



     “Closing Date” means October 17, 2002.



     “Closing Price” has the meaning assigned to such term in Section 15.1(a).



     “Code” means the Internal Revenue Code of 1986, as amended and in effect from time to time.
Any reference herein to a specific section or sections of the Code shall be deemed to include a
reference to any corresponding provision of any successor law.



     “Combined Interest” has the meaning assigned to such term in Section 11.3(a).



     “Commission” means the United States Securities and Exchange Commission.



     “Common Unit” means a Partnership Security representing a fractional part of the Partnership
Interests of all Limited Partners and Assignees and having the rights and obligations specified
with respect to Common Units in this Agreement. The term “Common Unit” does not refer to a
Subordinated Unit or a Class B Unit prior to its conversion into a Common Unit pursuant to the
terms hereof.



     “Common Unit Arrearage” means, with respect to any Common Unit, whenever issued, as to any
Quarter within the Subordination Period, the excess, if any, of (a) the Minimum Quarterly
Distribution with respect to a Common Unit in respect of such Quarter over (b) the sum
of all Available Cash distributed with respect to a Common Unit in respect of such Quarter
pursuant to Section 6.4(a)(i).



     “Conflicts Committee” means a committee of the Board of Directors of the general partner of
the General Partner (or the applicable governing body of any successor to the General Partner)
composed entirely of two or more directors who are not (a) security holders, officers or employees
of the General Partner, (b) officers, directors or employees of any Affiliate of the General
Partner or (c) holders of any ownership interest in the Partnership Group other than Common Units
and who also meet the independence standards required to serve on an audit committee of a board of
directors by the National Securities Exchange on which the Common Units are listed for trading.



     “Contributed Property” means each property or other asset, in such form as may be permitted by
the Delaware Act, but excluding cash, contributed to the Partnership. Once the



8









 







Carrying Value of a
Contributed Property is adjusted pursuant to Section 5.5(d), such property shall no longer
constitute a Contributed Property, but shall be deemed an Adjusted Property.



     “Contribution Agreement” means that certain Contribution, Conveyance and Assumption
Agreement, dated as of the Closing Date, among the General Partner, the Partnership, the Operating
Company and certain other parties, together with the additional conveyance documents and
instruments contemplated or referenced thereunder.



     “Conversion Approval” has the meaning assigned to such term in Section 5.12(f).



     “Conversion Approval Date” has the meaning assigned to such term in Section 5.12(f).



     “Conversion Effective Date” has the meaning assigned to such term in Section 5.12(h).



     “Cumulative Class B Unit Arrearage” means, with respect to any Class B Unit, whenever issued,
as of the end of any Quarter, the excess, if any, of (a) the sum resulting from adding together the
Class B Unit Arrearages for each of the Quarters during which any Class B Unit has been Outstanding
over (b) the sum of any distributions theretofore made to a Class B Unit pursuant to Section
5.12(b)(ii)(B) and the penultimate sentence of Section 6.5 (including any distributions to be made
in respect of the last of such Quarters).



     “Cumulative Common Unit Arrearage” means, with respect to any Common Unit, whenever issued,
and as of the end of any Quarter, the excess, if any, of (a) the sum resulting from adding together
the Common Unit Arrearage as to an Initial Common Unit for each of the Quarters within the
Subordination Period ending on or before the last day of such Quarter over (b) the sum of any
distributions theretofore made pursuant to Section 6.4(a)(ii) and the second sentence of Section
6.5 with respect to an Initial Common Unit (including any distributions to be made in respect of
the last of such Quarters).



     “Curative Allocation” means any allocation of an item of income, gain, deduction, loss or
credit pursuant to the provisions of Section 6.1(d)(xi).



     “Current Market Price” has the meaning assigned to such term in Section 15.1(a).



     “Delaware Act” means the Delaware Revised Uniform Limited Partnership Act, 6 Del. C. Section
17-101, et seq., as amended, supplemented or restated from time to time, and any successor to such
statute.



     “Departing Partner” means a former General Partner from and after the effective date of any
withdrawal or removal of such former General Partner pursuant to Section 11.1 or 11.2.



     “Depositary” means, with respect to any Units issued in global form, The Depository Trust
Company and its successors and permitted assigns.



     “Economic Risk of Loss” has the meaning set forth in Treasury Regulation Section 1.752-2(a).



9









 





     “Eligible Citizen” means a Person qualified to own interests in real property in jurisdictions
in which any Group Member does business or proposes to do business from time to time, and whose
status as a Limited Partner or Assignee does not or would not subject such Group Member to a
significant risk of cancellation or forfeiture of any of its properties or any interest therein.



     “Event of Withdrawal” has the meaning assigned to such term in Section 11.1(a).



     “Excess Payment” has the meaning set forth in Section 5.12(b)(vi)(B)(as set forth in Section
5.12(g)).



     “Final Subordinated Units” has the meaning assigned to such term in Section 6.1(d)(x).



     “First Liquidation Target Amount” has the meaning assigned to such term in Section
6.1(c)(i)(D).



     “First Target Distribution” means $0.5625 per Unit per Quarter (or, with respect to the period
commencing on the Closing Date and ending on December 31, 2002, it means the product of $0.5625
multiplied by a fraction of which the numerator is the number of days in such period and of which
the denominator is 92), subject to adjustment in accordance with Sections 6.6 and 6.9.



     “Foresight” means Foresight Reserves LP, a Delaware limited partnership.



     “Fully Diluted Basis” means, when calculating the number of Outstanding Units for any period,
a basis that includes, in addition to the Outstanding Units, all Partnership Securities and
options, rights, warrants and appreciation rights relating to an equity interest in the Partnership
(a) that are convertible into or exercisable or exchangeable for Units that are senior to or pari
passu with the Subordinated Units, (b) whose conversion, exercise or exchange price is less than
the Current Market Price on the date of such calculation, and (c) that may be converted into or
exercised or exchanged for such Units prior to or during the Quarter following the end of the
last Quarter contained in the period for which the calculation is being made without the
satisfaction of any contingency beyond the control of the holder other than the payment of
consideration and the compliance with administrative mechanics applicable to such conversion,
exercise or exchange; provided that for purposes of determining the number of Outstanding Units on
a Fully Diluted Basis when calculating whether the Subordination Period has ended or Subordinated
Units are entitled to convert into Common Units pursuant to Section 5.8, such Partnership
Securities, options, rights, warrants and appreciation rights shall be deemed to have been
Outstanding Units only for the four Quarters that comprise the last four Quarters of the
measurement period; provided, further, that if consideration will be paid to any Group Member in
connection with such conversion, exercise or exchange, the number of Units to be included in such
calculation shall be that number equal to the difference between (i) the number of Units issuable
upon such conversion, exercise or exchange and (ii) the number of Units which such consideration
would purchase at the Current Market Price.



     “General Partner” means NRP (GP) LP and its successors and permitted assigns as general
partner of the Partnership.



10









 





     “General Partner Interest” means the ownership interest of the General Partner in the
Partnership (in its capacity as a general partner without reference to any Limited Partner Interest
held by it) which may be evidenced by Partnership Securities or a combination thereof or interest
therein, and includes any and all benefits to which the General Partner is entitled as provided in
this Agreement, together with all obligations of the General Partner to comply with the terms and
provisions of this Agreement.



     “Great Northern” means Great Northern Properties Limited Partnership, a Delaware limited
partnership.



     “Group” means a Person that with or through any of its Affiliates or Associates has any
agreement, arrangement or understanding for the purpose of acquiring, holding, voting (except
voting pursuant to a revocable proxy or consent given to such Person in response to a proxy or
consent solicitation made to 10 or more Persons) or disposing of any Partnership Securities with
any other Person that beneficially owns, or whose Affiliates or Associates beneficially own,
directly or indirectly, Partnership Securities.



     “Group Member” means a member of the Partnership Group.



     “Holder” as used in Section 7.12, has the meaning assigned to such term in Section 7.12(a).



     “Incentive Distribution Right” means a non-voting Limited Partner Interest issued pursuant to
Section 5.2, which Partnership Interest confers upon the holder thereof only the rights and
obligations specifically provided in this Agreement with respect to Incentive Distribution Rights
(and no other rights otherwise available to or other obligations of a holder of a Partnership
Interest). Notwithstanding anything in this Agreement to the contrary, the holder of
an Incentive Distribution Right shall not be entitled to vote such Incentive Distribution
Right on any Partnership matter except as may otherwise be required by law.



     “Incentive Distributions” means any amount of cash distributed to the holders of the Incentive
Distribution Rights pursuant to Sections 6.4(a)(v), (vi) and (vii) and 6.4(b)(iii), (iv) and (v).



     “Indemnified Persons” has the meaning assigned to such term in Section 7.12(d).



     “Indemnitee” means (a) the General Partner, (b) any Departing Partner, (c) any Person who is
or was an Affiliate of the General Partner or any Departing Partner, (d) any Person who is or was a
member, partner, officer, director, employee, agent or trustee of any Group Member, the General
Partner or any Departing Partner or any Affiliate of any Group Member, the General Partner or any
Departing Partner and (e) any Person who is or was serving at the request of the General Partner or
any Departing Partner or any Affiliate of the General Partner or any Departing Partner as an
officer, director, employee, member, partner, agent, fiduciary or trustee of another Person;
provided, that a Person shall not be an Indemnitee by reason of providing, on a fee-for-services
basis, trustee, fiduciary or custodial services.



     “Initial Common Units” means the Common Units sold in the Initial Offering.



11









 





     “Initial Offering” means the initial offering and sale of Common Units to the public, as
described in the Registration Statement.



     “Initial Unit Price” means (a) with respect to the Common Units and the Subordinated Units,
the initial public offering price per Common Unit at which the Underwriters offered the Common
Units to the public for sale as set forth on the cover page of the prospectus included as part of
the Registration Statement and first issued at or after the time the Registration Statement first
became effective or (b) with respect to any other class or series of Units, the price per Unit at
which such class or series of Units is initially sold by the Partnership, as determined by the
General Partner, in each case adjusted as the General Partner determines to be appropriate to give
effect to any distribution, subdivision or combination of Units.



     “Interim Capital Transactions” means the following transactions if they occur prior to the
Liquidation Date: (a) borrowings, refinancings or refundings of indebtedness and sales of debt
securities (other than Working Capital Borrowings and other than for items purchased on open
account in the ordinary course of business) by any Group Member; (b) sales of equity interests by
any Group Member (including the Common Units sold to the Underwriters pursuant to the exercise of
the Over-Allotment Option); and (c) sales or other voluntary or involuntary dispositions of any
assets of any Group Member other than (i) sales or other dispositions of inventory, accounts
receivable and other assets in the ordinary course of business, and (ii) sales or other
dispositions of assets as part of normal retirements or replacements.



     “Limited Partner” means, unless the context otherwise requires, (a) the Organizational Limited
Partner prior to its withdrawal from the Partnership, each initial Limited Partner, each
Substituted Limited Partner, each Additional Limited Partner and any Departing Partner upon
the change of its status from General Partner to Limited Partner pursuant to Section 11.3 or (b)
solely for purposes of Articles V, VI, VII and IX, each Assignee; provided, however, that when the
term “Limited Partner” is used herein in the context of any vote or other approval, including
without limitation Articles XIII and XIV, such term shall not, solely for such purpose, include any
holder of an Incentive Distribution Right except as may otherwise be required by law.



     “Limited Partner Interest” means the ownership interest of a Limited Partner or Assignee in
the Partnership, which may be evidenced by Common Units, Class B Units, Subordinated Units,
Incentive Distribution Rights or other Partnership Securities or a combination thereof or interest
therein, and includes any and all benefits to which such Limited Partner or Assignee is entitled as
provided in this Agreement, together with all obligations of such Limited Partner or Assignee to
comply with the terms and provisions of this Agreement; provided, however, that when the term
“Limited Partner Interest” is used herein in the context of any vote or other approval, including
without limitation Articles XIII and XIV, such term shall not, solely for such purpose, include any
holder of an Incentive Distribution Right except as may otherwise be required by law.



     “Liquidation Date” means (a) in the case of an event giving rise to the dissolution of the
Partnership of the type described in clauses (a) and (b) of the first sentence of Section 12.2, the
date on which the applicable time period during which the holders of Outstanding Units have the
right to elect to reconstitute the Partnership and continue its business has expired without such
an



12









 







election being made, and (b) in the case of any other event giving rise to the dissolution of
the Partnership, the date on which such event occurs.



     “Liquidator” means one or more Persons selected by the General Partner to perform the
functions described in Section 12.3 as liquidating trustee of the Partnership within the meaning of
the Delaware Act.



     “Merger Agreement” has the meaning assigned to such term in Section 14.1.



     “Minimum Quarterly Distribution” means $0.5125 per Unit per Quarter (or, with respect to the
period commencing on the Closing Date and ending on December 31, 2002, it means the product of
$0.5125 multiplied by a fraction of which the numerator is the number of days in such period and of
which the denominator is 92), subject to adjustment in accordance with Sections 6.6 and 6.9.



     “National Securities Exchange” means an exchange registered with the Commission under Section
6(a) of the Securities Exchange Act of 1934, as amended, supplemented or restated from time to
time, and any successor to such statute, or the Nasdaq Stock Market or any successor thereto.



     “Net Agreed Value” means, (a) in the case of any Contributed Property, the Agreed Value of
such property reduced by any liabilities either assumed by the Partnership upon such contribution
or to which such property is subject when contributed, and (b) in the case of any
property distributed to a Partner or Assignee by the Partnership, the Partnership’s Carrying
Value of such property (as adjusted pursuant to Section 5.5(d)(ii)) at the time such property is
distributed, reduced by any indebtedness either assumed by such Partner or Assignee upon such
distribution or to which such property is subject at the time of distribution, in either case, as
determined under Section 752 of the Code.



     “Net Income” means, for any taxable year, the excess, if any, of the Partnership’s items of
income and gain (other than those items taken into account in the computation of Net Termination
Gain or Net Termination Loss) for such taxable year over the Partnership’s items of loss and
deduction (other than those items taken into account in the computation of Net Termination Gain or
Net Termination Loss) for such taxable year. The items included in the calculation of Net Income
shall be determined in accordance with Section 5.5(b) and shall not include any items specially
allocated under Section 6.1(d); provided that the determination
of the items that have been
specially allocated under Section 6.1(d) shall be made as if Section 6.1(d)(xii) were not in this
Agreement.



     “Net Loss” means, for any taxable year, the excess, if any, of the Partnership’s items of loss
and deduction (other than those items taken into account in the computation of Net Termination Gain
or Net Termination Loss) for such taxable year over the Partnership’s items of income and gain
(other than those items taken into account in the computation of Net Termination Gain or Net
Termination Loss) for such taxable year. The items included in the calculation of Net Loss shall be
determined in accordance with Section 5.5(b) and shall not include any items specially allocated
under Section 6.1(d); provided that the determination of the



13









 








items that have been specially
allocated under Section 6.1(d) shall be made as if Section 6.1(d)(xii) were not in this Agreement.



     “Net Positive Adjustments” means, with respect to any Partner, the excess, if any, of the
total positive adjustments over the total negative adjustments made to the Capital Account of such
Partner pursuant to Book-Up Events and Book-Down Events.



     “Net Termination Gain” means, for any taxable year, the sum, if positive, of all items of
income, gain, loss or deduction recognized by the Partnership after the Liquidation Date. The items
included in the determination of Net Termination Gain shall be determined in accordance with
Section 5.5(b) and shall not include any items of income, gain or loss specially allocated under
Section 6.1(d).



     “Net Termination Loss” means, for any taxable year, the sum, if negative, of all items of
income, gain, loss or deduction recognized by the Partnership after the Liquidation Date. The items
included in the determination of Net Termination Loss shall be determined in accordance with
Section 5.5(b) and shall not include any items of income, gain or loss specially allocated under
Section 6.1(d).



     “New Gauley” means New Gauley Coal Corporation, a West Virginia corporation.



     “Non-citizen Assignee” means a Person whom the General Partner has determined in its
discretion does not constitute an Eligible Citizen and as to whose Partnership Interest the General
Partner has become the Substituted Limited Partner, pursuant to Section 4.9.



     “Nonrecourse Built-in Gain” means with respect to any Contributed Properties or Adjusted
Properties that are subject to a mortgage or pledge securing a Nonrecourse Liability, the amount of
any taxable gain that would be allocated to the Partners pursuant to Sections 6.2(b)(i)(A),
6.2(b)(ii)(A) and 6.2(b)(iii) if such properties were disposed of in a taxable transaction in full
satisfaction of such liabilities and for no other consideration.



     “Nonrecourse Deductions” means any and all items of loss, deduction or expenditure (including,
without limitation, any expenditure described in Section 705(a)(2)(B) of the Code) that, in
accordance with the principles of Treasury Regulation Section 1.704-2(b), are attributable to a
Nonrecourse Liability.



     “Nonrecourse Liability” has the meaning set forth in Treasury Regulation Section
1.752-1(a)(2).



     “Notice of Election to Purchase” has the meaning assigned to such term in Section 15.1(b).



     “NRP Investment” means NRP Investment L.P., a Delaware limited partnership.



     “Omnibus Agreement” means that Omnibus Agreement, dated as of the Closing Date, among Arch
Coal, Inc, Ark Land, Great Northern, New Gauley, Western Pocahontas, the General Partner, the
Partnership, the Operating Company and certain other parties.



14









 





     “Operating Company” means NRP (Operating) LLC, a Delaware limited liability company, and any
successors thereto.



     “Operating Company Agreement” means the Amended and Restated Limited Liability Company
Agreement of the Operating Company, as it may be amended, supplemented or restated from time to
time.



     “Operating Expenditures” means all Partnership Group expenditures, including, but not limited
to, taxes, reimbursements of the General Partner, repayment of Working Capital Borrowings, debt
service payments and capital expenditures, subject to the following:



          (c) Payments (including prepayments) of principal of and premium on indebtedness other than
Working Capital Borrowings shall not constitute Operating Expenditures; and




          (d) Operating Expenditures shall not include (i) capital expenditures made for Acquisitions or
for Capital Improvements, (ii) payment of transaction expenses relating to Interim Capital
Transactions or (iii) distributions to Partners. Where capital expenditures are
made in part for Acquisitions or for Capital Improvements and in part for other purposes, the
General Partner’s good faith allocation between the amounts paid for each shall be conclusive.




     “Operating Surplus” means, with respect to any period ending prior to the Liquidation Date, on
a cumulative basis and without duplication,




          (e) the sum of (i) $15.0 million plus all cash and cash equivalents of the Partnership Group
on hand as of the close of business on the Closing Date, (ii) all cash receipts of the Partnership
Group for the period beginning on the Closing Date and ending with the last day of such period,
other than cash receipts from Interim Capital Transactions (except to the extent specified in
Section 6.5) and (iii) all cash receipts of the Partnership Group after the end of such period but
on or before the date of determination of Operating Surplus with respect to such period resulting
from Working Capital Borrowings, less




          (f) the sum of (i) Operating Expenditures for the period beginning on the Closing Date and
ending with the last day of such period and (ii) the amount of cash reserves that is necessary or
advisable in the reasonable discretion of the General Partner to provide funds for future Operating
Expenditures; provided, however, that disbursements made (including contributions to a Group Member
or disbursements on behalf of a Group Member) or cash reserves established, increased or reduced
after the end of such period but on or before the date of determination of Available Cash with
respect to such period shall be deemed to have been made, established, increased or reduced, for
purposes of determining Operating Surplus, within such period if the General Partner so determines.




     Notwithstanding the foregoing, “Operating Surplus” with respect to the Quarter in which the
Liquidation Date occurs and any subsequent Quarter shall equal zero.



15









 





     “Opinion of Counsel” means a written opinion of counsel (who may be regular counsel to the
Partnership or the General Partner or any of its Affiliates) acceptable to the General Partner in
its reasonable discretion.



     “Option Closing Date” means the date or dates on which any Common Units are sold by the
Partnership to the Underwriters upon exercise of the Over-Allotment Option.



     “Organizational Limited Partner” means GP Natural Resource Partners LLC in its capacity as the
organizational limited partner of the Partnership pursuant to this Agreement.



     “Outstanding” means, with respect to Partnership Securities, all Partnership Securities that
are issued by the Partnership and reflected as outstanding on the Partnership’s books and records
as of the date of determination; provided, however, that if at any time any Person or Group (other
than the General Partner or its Affiliates) beneficially owns 20% or more of any Outstanding
Partnership Securities of any class then Outstanding, all Partnership Securities owned by such
Person or Group shall not be voted on any matter and shall not be considered to be Outstanding when
sending notices of a meeting of Limited Partners to vote on any matter (unless otherwise required
by law), calculating required votes, determining the presence of a
quorum or for other similar purposes under this Agreement, except that Common Units so owned
shall be considered to be Outstanding for purposes of Section 11.1(b)(iv) (such Common Units shall
not, however, be treated as a separate class of Partnership Securities for purposes of this
Agreement); provided, further, that the foregoing limitation shall not apply (i) to any Person or
Group who acquired 20% or more of any Outstanding Partnership Securities of any class then
Outstanding directly from the General Partner or its Affiliates, (ii) to any Person or Group who
acquired 20% or more of any Outstanding Partnership Securities of any class then Outstanding
directly or indirectly from a Person or Group described in clause (i) provided that the General
Partner shall have notified such Person or Group in writing that such limitation shall not apply,
or (iii) to any Person or Group who acquired 20% or more of any Partnership Securities issued by
the Partnership with the prior approval of the board of directors of the General Partner.



     “Over-Allotment Option” means the over-allotment option granted to the Underwriters and
described in Section 2 of the Underwriting Agreement.



     “Parity Units” means Common Units and all other Units of any other class or series that have
the right (i) to receive distributions of Available Cash from Operating Surplus pursuant to each of
subclauses (a)(i) and (a)(ii) of Section 6.4 in the same order of priority with respect to the
participation of Common Units in such distributions or (ii) to participate in allocations of Net
Termination Gain pursuant to Section 6.1(c)(i)(B) in the same order of priority with the Common
Units, in each case regardless of whether the amounts or value so distributed or allocated on each
Parity Unit equals the amount or value so distributed or allocated on each Common Unit. Units
whose participation in such (i) distributions of Available Cash from Operating Surplus and (ii)
allocations of Net Termination Gain are subordinate in order of priority to such distributions and
allocations on Common Units shall not constitute Parity Units even if such Units are convertible
under certain circumstances into Common Units or Parity Units.



16









 





     “Partner Nonrecourse Debt” has the meaning set forth in Treasury Regulation Section
1.704-2(b)(4).



     “Partner Nonrecourse Debt Minimum Gain” has the meaning set forth in Treasury Regulation
Section 1.704-2(i)(2).



     “Partner Nonrecourse Deductions” means any and all items of loss, deduction or expenditure
(including, without limitation, any expenditure described in Section 705(a)(2)(B) of the Code)
that, in accordance with the principles of Treasury Regulation Section 1.704-2(i), are attributable
to a Partner Nonrecourse Debt.



     “Partners” means the General Partner and the Limited Partners.



     “Partnership” means Natural Resource Partners L.P., a Delaware limited partnership, and any
successors thereto.



     “Partnership Agreement” has the meaning assigned to such term in the Recitals.



     “Partnership Group” means the Partnership, the Operating Company and any Subsidiary of any
such entity, treated as a single consolidated entity.



     “Partnership Interest” means an interest in the Partnership, which shall include the General
Partner Interest and Limited Partner Interests.



     “Partnership Minimum Gain” means that amount determined in accordance with the principles of
Treasury Regulation Section 1.704-2(d).



     “Partnership Security” means any class or series of equity interest in the Partnership (but
excluding any options, rights, warrants and appreciation rights relating to an equity interest in
the Partnership), including without limitation, Common Units, Class B Units, Subordinated Units and
Incentive Distribution Rights.



     “Per Unit Capital Amount” means, as of any date of determination, the Capital Account, stated
on a per Unit basis, underlying any Unit held by a Person other than the General Partner or any
Affiliate of the General Partner who holds Units.



     “Percentage Interest” means as of any date of determination (a) as to the General Partner (in
its capacity as General Partner without reference to any Limited Partner Interests held by it),
2.0%, (b) as to any Unitholder or Assignee holding Units, the product obtained by multiplying (i)
98.0% less the percentage applicable to paragraph (c) by (ii) the quotient obtained by dividing (A)
the number of Units held by such Unitholder or Assignee by (B) the total number of all Outstanding
Units, and (c) as to the holders of additional Partnership Securities issued by the Partnership in
accordance with Section 5.6, the percentage established as a part of such issuance. The Percentage
Interest with respect to an Incentive Distribution Right shall at all times be zero.



17









 





     “Person” means an individual or a corporation, limited liability company, partnership, joint
venture, trust, unincorporated organization, association, government agency or political
subdivision thereof or other entity.



     “Pro Rata” means (a) when modifying Units or any class thereof, apportioned equally among all
designated Units in accordance with their relative Percentage Interests, (b) when modifying
Partners and Assignees, apportioned among all Partners and Assignees in accordance with their
relative Percentage Interests and (c) when modifying holders of Incentive Distribution Rights,
apportioned equally among all holders of Incentive Distribution Rights in accordance with the
relative number of Incentive Distribution Rights held by each such holder.



     “Purchase Date” means the date determined by the General Partner as the date for purchase of
all Outstanding Units of a certain class (other than Units owned by the General Partner and its
Affiliates) pursuant to Article XV.



     “Quarter” means, unless the context requires otherwise, a fiscal quarter or, with respect to
the first fiscal quarter after the Closing Date, the portion of such fiscal quarter after the
Closing Date, of the Partnership.



     “Recapture Income” means any gain recognized by the Partnership (computed without regard to
any adjustment required by Section 734 or Section 743 of the Code) upon the disposition of any
property or asset of the Partnership, which gain is characterized as ordinary income because it
represents the recapture of deductions previously taken with respect to such property or asset.



     “Record Date” means the date established by the General Partner for determining (a) the
identity of the Record Holders entitled to notice of, or to vote at, any meeting of Limited
Partners or entitled to vote by ballot or give approval of Partnership action in writing without a
meeting or entitled to exercise rights in respect of any lawful action of Limited Partners or (b)
the identity of Record Holders entitled to receive any report or distribution or to participate in
any offer.



     “Record Holder” means the Person in whose name a Common Unit is registered on the books of the
Transfer Agent as of the opening of business on a particular Business Day, or with respect to other
Partnership Securities, the Person in whose name any such other Partnership Security is registered
on the books which the General Partner has caused to be kept as of the opening of business on such
Business Day.



     “Redeemable Interests” means any Partnership Interests for which a redemption notice has been
given, and has not been withdrawn, pursuant to Section 4.10.



     “Registration Statement” means the Registration Statement on Form S-1 (Registration No.
333-86852) as it has been amended or supplemented from time to time, filed by the Partnership with
the Commission under the Securities Act to register the offering and sale of the Common Units in
the Initial Offering.



     “Remaining Net Positive Adjustments” means as of the end of any taxable period, (i) with
respect to the Unitholders holding Common Units, Class B Units or Subordinated Units, the



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excess of
(a) the Net Positive Adjustments of the Unitholders holding Common Units, Class B Units or
Subordinated Units as of the end of such period over (b) the sum of those Partners’ Share of
Additional Book Basis Derivative Items for each prior taxable period, (ii) with respect to the
General Partner (as holder of the General Partner Interest), the excess of (a) the Net Positive
Adjustments of the General Partner as of the end of such period over (b) the sum of the General
Partner’s Share of Additional Book Basis Derivative Items with respect to the General Partner
Interest for each prior taxable period, and (iii) with respect to the holders of Incentive
Distribution Rights, the excess of (a) the Net Positive Adjustments of the holders of Incentive
Distribution Rights as of the end of such period over (b) the sum of the Share of Additional Book
Basis Derivative Items of the holders of the Incentive Distribution Rights for each prior taxable
period.



     “Required Allocations” means (a) any limitation imposed on any allocation of Net Losses or Net
Termination Losses under Section 6.1(b) or 6.1(c)(ii) and (b) any allocation of an item of income,
gain, loss or deduction pursuant to Section 6.1(d)(i), 6.1(d)(ii), 6.1(d)(iv), 6.1(d)(vii) or
6.1(d)(ix).



     “Residual Gain” or “Residual Loss” means any item of gain or loss, as the case may be, of the
Partnership recognized for federal income tax purposes resulting from a sale, exchange or other
disposition of a Contributed Property or Adjusted Property, to the extent such item of gain or loss
is not allocated pursuant to Section 6.2(b)(i)(A) or 6.2(b)(ii)(A), respectively, to eliminate
Book-Tax Disparities.



     “Restricted Business” has the meaning assigned to such term in the Omnibus Agreement.



     “Restricted Business Contribution Agreement” means that Restricted Business Contribution
Agreement, dated as of the date hereof, by and among Cline, Foresight, Adena, the Partnership, the
General Partner, the Organizational Limited Partner and the Operating Company.



     “Second Closing” means the date of the closing of the transactions contemplated by the Second
Contribution Agreement.



     “Second Contribution Agreement” means that certain Second Contribution Agreement, dated as of
the date hereof, by and among Foresight, Adena, the Partnership, the General Partner and the
Operating Company.



     “Second Liquidation Target Amount” has the meaning assigned to such term in Section
6.1(c)(i)(E).



     “Second Target Distribution” means $0.6625 per Unit per Quarter (or, with respect to the
period commencing on the Closing Date and ending on December 31, 2002, it means the product of
$0.6625 multiplied by a fraction of which the numerator is the number of days in such period and of
which the denominator is 92), subject to adjustment in accordance with Sections 6.6 and 6.9.



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     “Securities Act” means the Securities Act of 1933, as amended, supplemented or restated from
time to time and any successor to such statute.



     “Share of Additional Book Basis Derivative Items” means in connection with any allocation of
Additional Book Basis Derivative Items for any taxable period, (i) with respect to the Unitholders
holding Common Units, Class B Units or Subordinated Units, the amount that bears the same ratio to
such Additional Book Basis Derivative Items as the Unitholders’ Remaining Net Positive Adjustments
as of the end of such period bears to the Aggregate Remaining Net Positive Adjustments as of that
time, (ii) with respect to the General Partner (as holder of the General Partner Interest), the
amount that bears the same ratio to such additional Book Basis Derivative Items as the General
Partner’s Remaining Net Positive Adjustments as of the end of such period bears to the Aggregate
Remaining Net Positive Adjustment as of that time, and (iii) with respect to the Partners holding
Incentive Distribution Rights, the amount that bears the same ratio to such Additional Book Basis
Derivative Items as the Remaining Net Positive Adjustments of the Partners holding the Incentive
Distribution Rights as of the end of such period bears to the Aggregate Remaining Net Positive
Adjustments as of that time.



     “Special Approval” means approval by a majority of the members of the Conflicts Committee.



     “Subordinated Unit” means a Unit representing a fractional part of the Partnership Interests
of all Limited Partners and Assignees and having the rights and obligations specified with respect
to Subordinated Units in this Agreement. The term “Subordinated Unit” as used herein does not
include a Common Unit, Class B Unit or Parity Unit. A Subordinated Unit that is convertible into a
Common Unit or a Parity Unit shall not constitute a Common Unit or Parity Unit until such
conversion occurs.



     “Subordination Period” means the period commencing on the Closing Date and ending on the first
to occur of the following dates:



          (a) the first day of any Quarter beginning after September 30, 2007 in respect of which (i)
(A) distributions of Available Cash from Operating Surplus on each of the Outstanding Common Units
and Subordinated Units and any other Outstanding Units that are senior or equal in right of
distribution to the Subordinated Units with respect to each of the three consecutive,
non-overlapping four-Quarter periods immediately preceding such date equaled or exceeded the sum of
the Minimum Quarterly Distribution (or portion thereof for the first fiscal quarter after the
Closing Date) on all Outstanding Common Units and Subordinated Units and any other Outstanding
Units that are senior or equal in right of distribution to the Subordinated Units during such
periods and (B) the Adjusted Operating Surplus generated during each of the three consecutive,
non-overlapping four-Quarter periods immediately preceding such date equaled or exceeded the sum of
the Minimum Quarterly Distribution on all of the Common Units and Subordinated Units and any other
Units that are senior or equal in right of distribution to the Subordinated Units that were
Outstanding during such periods on a Fully Diluted Basis, plus the related distribution on the
General Partner Interest, during such periods, (ii) there are no Cumulative Common Unit Arrearages
and (iii) there are no Cumulative Class B Unit Arrearages; and




20









 








          (b) the date on which the General Partner is removed as general partner of the Partnership
upon the requisite vote by holders of Outstanding Units under circumstances where Cause does not
exist and Units held by the General Partner and its Affiliates are not voted in favor of such
removal.




     “Subsidiary” means, with respect to any Person, (a) a corporation of which more than 50% of
the voting power of shares entitled (without regard to the occurrence of any contingency) to vote
in the election of directors or other governing body of such corporation is owned, directly or
indirectly, at the date of determination, by such Person, by one or more Subsidiaries of such
Person or a combination thereof, (b) a partnership (whether general or limited) in which such
Person or a Subsidiary of such Person is, at the date of determination, a general or limited
partner of such partnership, but only if more than 50% of the partnership interests of such
partnership (considering all of the partnership interests of the partnership as a single class) is
owned, directly or indirectly, at the date of determination, by such Person, by one or more
Subsidiaries of such
Person, or a combination thereof, or (c) any other Person (other than a corporation or a
partnership) in which such Person, one or more Subsidiaries of such Person, or a combination
thereof, directly or indirectly, at the date of determination, has (i) at least a majority
ownership interest or (ii) the power to elect or direct the election of a majority of the directors
or other governing body of such Person.



     “Substituted Limited Partner” means a Person who is admitted as a Limited Partner to the
Partnership pursuant to Section 10.2 in place of and with all the rights of a Limited Partner and
who is shown as a Limited Partner on the books and records of the Partnership.



     “Surviving Business Entity” has the meaning assigned to such term in Section 14.2(b).



     “Third Liquidation Target Amount” has the meaning assigned to such term in Section
6.1(c)(i)(F).



     “Third Target Distribution” means $0.7625 per Unit per Quarter (or, with respect to the period
commencing on the Closing Date and ending on December 31, 2002, it means the product of $0.7625
multiplied by a fraction of which the numerator is equal to the number of days in such period and
of which the denominator is 92), subject to adjustment in accordance with Sections 6.6 and 6.9.



     “Trading Day” has the meaning assigned to such term in Section 15.1(a).



     “Transfer” has the meaning assigned to such term in Section 4.4(a).



     “Transfer Agent” means such bank, trust company or other Person (including the General Partner
or one of its Affiliates) as shall be appointed from time to time by the Partnership to act as
registrar and transfer agent for the Common Units; provided that if no Transfer Agent is
specifically designated for any other Partnership Securities, the General Partner shall act in such
capacity.



21









 





     “Transfer Application” means an application and agreement for transfer of Units in the form
set forth on the back of a Certificate or in a form substantially to the same effect in a separate
instrument.



     “Underwriter” means each Person named as an underwriter in Schedule I to the Underwriting
Agreement who purchases Common Units pursuant thereto.



     “Underwriting Agreement” means the Underwriting Agreement dated October 10, 2002 among the
Underwriters, the Partnership, the General Partner, the Operating Company, Western Pocahontas,
Great Northern, New Gauley, Ark Land, Arch Coal, Inc., and certain other parties providing for the
purchase of Common Units by the Underwriters.



     “Unit” means a Partnership Security that is designated as a “Unit” and shall include Common
Units, Class B Units and Subordinated Units but shall not include (i) a General Partner Interest or
(ii) Incentive Distribution Rights.



     “Unitholders” means the holders of Units.



     “Unit Majority” means, during the Subordination Period, at least a majority of the Outstanding
Common Units (excluding Common Units owned by the General Partner and its Affiliates) and the
Outstanding Class B Units (excluding Class B Units owned by the General Partner and its Affiliates)
voting together as a single class and at least a majority of the Outstanding Subordinated Units
voting as a class, and thereafter, at least a majority of the Outstanding Units.



     “Unpaid MQD” has the meaning assigned to such term in Section 6.1(c)(i)(B).



     “Unrealized Gain” attributable to any item of Partnership property means, as of any date of
determination, the excess, if any, of (a) the fair market value of such property as of such date
(as determined under Section 5.5(d)) over (b) the Carrying Value of such property as of such date
(prior to any adjustment to be made pursuant to Section 5.5(d) as of such date).



     “Unrealized Loss” attributable to any item of Partnership property means, as of any date of
determination, the excess, if any, of (a) the Carrying Value of such property as of such date
(prior to any adjustment to be made pursuant to Section 5.5(d) as of such date) over (b) the fair
market value of such property as of such date (as determined under Section 5.5(d)).



     “Unrecovered Capital” means at any time, with respect to a Unit, the Initial Unit Price less
the sum of all distributions constituting Capital Surplus theretofore made in respect of an Initial
Common Unit and any distributions of cash (or the Net Agreed Value of any distributions in kind) in
connection with the dissolution and liquidation of the Partnership theretofore made in respect of
an Initial Common Unit, adjusted as the General Partner determines to be appropriate to give effect
to any distribution, subdivision or combination of such Units.



     “U.S. GAAP” means United States Generally Accepted Accounting Principles consistently applied.



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     “Western Pocahontas” means Western Pocahontas Properties Limited Partnership, a Delaware
limited partnership.



     “Withdrawal Opinion of Counsel” has the meaning assigned to such term in Section 11.1(b).



     “Working Capital Borrowings” means borrowings used solely for working capital purposes or to
pay distributions to Partners made pursuant to a credit facility or other arrangement to the extent
such borrowings are required to be reduced to a relatively small amount each year for an
economically meaningful period of time.



Section 1.2 Construction.



     Unless the context requires otherwise: (a) any pronoun used in this Agreement shall include
the corresponding masculine, feminine or neuter forms, and the singular form of nouns, pronouns and
verbs shall include the plural and vice versa; (b) references to Articles and Sections refer to
Articles and Sections of this Agreement; and (c) the term “include” or “includes” means includes,
without limitation, and “including” means including, without limitation.



ARTICLE II




ORGANIZATION




Section 2.1 Formation.



     The General Partner and the Organizational Limited Partner have previously formed the
Partnership as a limited partnership pursuant to the provisions of the Delaware Act and hereby
amend and restate the Amended Partnership Agreement in its entirety. This amendment and restatement
shall become effective on the date of this Agreement. Except as expressly provided to the contrary
in this Agreement, the rights, duties (including fiduciary duties), liabilities and obligations of
the Partners and the administration, dissolution and termination of the Partnership shall be
governed by the Delaware Act. All Partnership Interests shall constitute personal property of the
owner thereof for all purposes and a Partner has no interest in specific Partnership property.



Section 2.2 Name.



     The name of the Partnership shall be “Natural Resource Partners L.P.” The Partnership’s
business may be conducted under any other name or names deemed necessary or appropriate by the
General Partner in its sole discretion, including the name of the General Partner. The words
“Limited Partnership,” “L.P.,” “Ltd.” or similar words or letters shall be included in the
Partnership’s name where necessary for the purpose of complying with the laws of any jurisdiction
that so requires. The General Partner in its discretion may change the name of the Partnership at
any time and from time to time and shall notify the Limited Partners of such change in the next
regular communication to the Limited Partners.



23









 





Section 2.3 Registered Office; Registered Agent; Principal Office; Other Offices




     Unless and until changed by the General Partner, the registered office of the Partnership in
the State of Delaware shall be located at 1209 Orange Street, Wilmington, Delaware 19801, and the
registered agent for service of process on the Partnership in the State of Delaware at such
registered office shall be The Corporation Trust Company. The principal office of the Partnership
shall be located at 601 Jefferson Street, Suite 3600, Houston, Texas 77002 or such other place as
the General Partner may from time to time designate by notice to the Limited Partners. The
Partnership may maintain offices at such other place or places within or outside the
State of Delaware as the General Partner deems necessary or appropriate. The address of the
General Partner shall be 601 Jefferson Street, Suite 3600, Houston, Texas 77002 or such other
place as the General Partner may from time to time designate by notice to the Limited Partners.



Section 2.4 Purpose and Business.




     The purpose and nature of the business to be conducted by the Partnership shall be to (a)
serve as a member of the Operating Company and, in connection therewith, to exercise all the rights
and powers conferred upon the Partnership as a member of the Operating Company pursuant to the
Operating Company Agreement or otherwise, (b) engage directly in, or enter into or form any
corporation, partnership, joint venture, limited liability company or other arrangement to engage
indirectly in, any business activity that the Operating Company is permitted to engage in by the
Operating Company Agreement or that its subsidiaries are permitted to engage in by their limited
liability company or partnership agreements and, in connection therewith, to exercise all of the
rights and powers conferred upon the Partnership pursuant to the agreements relating to such
business activity, (c) engage directly in, or enter into or form any corporation, partnership,
joint venture, limited liability company or other arrangement to engage indirectly in, any business
activity that is approved by the General Partner and which lawfully may be conducted by a limited
partnership organized pursuant to the Delaware Act and, in connection therewith, to exercise all of
the rights and powers conferred upon the Partnership pursuant to the agreements relating to such
business activity; and (d) do anything necessary or appropriate to the foregoing, including the
making of capital contributions or loans to a Group Member; provided, however, that the General
partner shall not cause the Partnership to engage, directly or indirectly, in any business activity
that the General Partner reasonably determines would cause the Partnership to be treated as an
association taxable as a corporation or otherwise taxable as an entity for federal income tax
purposes. The General Partner has no obligation or duty to the Partnership, the Limited Partners
or the Assignees to propose or approve, and in its discretion may decline to propose or approve,
the conduct by the Partnership of any business.



Section 2.5 Powers.




     The Partnership shall be empowered to do any and all acts and things necessary, appropriate,
proper, advisable, incidental to or convenient for the furtherance and accomplishment of the
purposes and business described in Section 2.4 and for the protection and benefit of the
Partnership.



24









 





Section 2.6 Power of Attorney.




     (a) Each Limited Partner and each Assignee hereby constitutes and appoints the General Partner
and, if a Liquidator shall have been selected pursuant to Section 12.3, the Liquidator (and any
successor to the Liquidator by merger, transfer, assignment, election or otherwise) and each of
their authorized officers and attorneys-in-fact, as the case may be, with full power of
substitution, as his true and lawful agent and attorney-in-fact, with full power and authority in
his name, place and stead, to:




     (i) execute, swear to, acknowledge, deliver, file and record in the appropriate public
offices (A) all certificates, documents and other instruments (including this Agreement and
the Certificate of Limited Partnership and all amendments or restatements hereof or thereof)
that the General Partner or the Liquidator deems necessary or appropriate to form, qualify
or continue the existence or qualification of the Partnership as a limited partnership (or a
partnership in which the limited partners have limited liability) in the State of Delaware
and in all other jurisdictions in which the Partnership may conduct business or own
property; (B) all certificates, documents and other instruments that the General Partner or
the Liquidator deems necessary or appropriate to reflect, in accordance with its terms, any
amendment, change, modification or restatement of this Agreement; (C) all certificates,
documents and other instruments (including conveyances and a certificate of cancellation)
that the General Partner or the Liquidator deems necessary or appropriate to reflect the
dissolution and liquidation of the Partnership pursuant to the terms of this Agreement; (D)
all certificates, documents and other instruments relating to the admission, withdrawal,
removal or substitution of any Partner pursuant to, or other events described in, Article
IV, X, XI or XII; (E) all certificates, documents and other instruments relating to the
determination of the rights, preferences and privileges of any class or series of
Partnership Securities issued pursuant to Section 5.6; and (F) all certificates, documents
and other instruments (including agreements and a certificate of merger) relating to a
merger or consolidation of the Partnership pursuant to Article XIV; and




     (ii) execute, swear to, acknowledge, deliver, file and record all ballots, consents,
approvals, waivers, certificates, documents and other instruments necessary or appropriate,
in the discretion of the General Partner or the Liquidator, to make, evidence, give, confirm
or ratify any vote, consent, approval, agreement or other action that is made or given by
the Partners hereunder or is consistent with the terms of this Agreement or is necessary or
appropriate, in the discretion of the General Partner or the Liquidator, to effectuate the
terms or intent of this Agreement; provided, that when required by Section 13.3 or any other
provision of this Agreement that establishes a percentage of the Limited Partners or of the
Limited Partners of any class or series required to take any action, the General Partner and
the Liquidator may exercise the power of attorney made in this Section 2.6(a)(ii) only after
the necessary vote, consent or approval of the Limited Partners or of the Limited Partners
of such class or series, as applicable.



25









 




Nothing contained in this Section 2.6(a) shall be construed as authorizing the General Partner to
amend this Agreement except in accordance with Article XIII or as may be otherwise expressly
provided for in this Agreement.




     (b) The foregoing power of attorney is hereby declared to be irrevocable and a power coupled
with an interest, and it shall survive and, to the maximum extent permitted by law, not be affected
by the subsequent death, incompetency, disability, incapacity, dissolution, bankruptcy or
termination of any Limited Partner or Assignee and the transfer of all or any portion of such
Limited Partner’s or Assignee’s Partnership Interest and shall extend to such
Limited Partner’s or Assignee’s heirs, successors, assigns and personal representatives. Each
such Limited Partner or Assignee hereby agrees to be bound by any representation made by the
General Partner or the Liquidator acting in good faith pursuant to such power of attorney; and each
such Limited Partner or Assignee, to the maximum extent permitted by law, hereby waives any and all
defenses that may be available to contest, negate or disaffirm the action of the General Partner or
the Liquidator taken in good faith under such power of attorney. Each Limited Partner or Assignee
shall execute and deliver to the General Partner or the Liquidator, within 15 days after receipt of
the request therefor, such further designation, powers of attorney and other instruments as the
General Partner or the Liquidator deems necessary to effectuate this Agreement and the purposes of
the Partnership.



Section 2.7 Term.




     The term of the Partnership commenced upon the filing of the Certificate of Limited
Partnership in accordance with the Delaware Act and shall continue in existence until the
dissolution of the Partnership in accordance with the provisions of Article XII. The existence of
the Partnership as a separate legal entity shall continue until the cancellation of the Certificate
of Limited Partnership as provided in the Delaware Act.



Section 2.8 Title to Partnership Assets.




     Title to Partnership assets, whether real, personal or mixed and whether tangible or
intangible, shall be deemed to be owned by the Partnership as an entity, and no Partner or
Assignee, individually or collectively, shall have any ownership interest in such Partnership
assets or any portion thereof. Title to any or all of the Partnership assets may be held in the
name of the Partnership, the General Partner, one or more of its Affiliates or one or more
nominees, as the General Partner may determine. The General Partner hereby declares and warrants
that any Partnership assets for which record title is held in the name of the General Partner or
one or more of its Affiliates or one or more nominees shall be held by the General Partner or such
Affiliate or nominee for the use and benefit of the Partnership in accordance with the provisions
of this Agreement; provided, however, that the General Partner shall use reasonable efforts to
cause record title to such assets (other than those assets in respect of which the General Partner
determines that the expense and difficulty of conveyancing makes transfer of record title to the
Partnership impracticable) to be vested in the Partnership as soon as reasonably practicable;
provided, further, that, prior to the withdrawal or removal of the General Partner or as soon
thereafter as practicable, the General Partner shall use reasonable efforts to effect the transfer
of record title to the Partnership and, prior to any such transfer, will provide for the use of
such



26









 







assets in a manner satisfactory to the General Partner. All Partnership assets shall be
recorded as the property of the Partnership in its books and records, irrespective of the name in
which record title to such Partnership assets is held.



ARTICLE III




RIGHTS OF LIMITED PARTNERS




Section 3.1 Limitation of Liability.




     The Limited Partners and the Assignees shall have no liability under this Agreement except as
expressly provided in this Agreement or the Delaware Act.



Section 3.2 Management of Business.




     No Limited Partner or Assignee, in its capacity as such, shall participate in the operation,
management or control (within the meaning of the Delaware Act) of the Partnership’s business,
transact any business in the Partnership’s name or have the power to sign documents for or
otherwise bind the Partnership. Any action taken by any Affiliate of the General Partner or any
officer, director, employee, manager, member, general partner, agent or trustee of the General
Partner or any of its Affiliates, or any officer, director, employee, manager, member, general
partner, agent or trustee of a Group Member, in its capacity as such, shall not be deemed to be
participation in the control of the business of the Partnership by a limited partner of the
Partnership (within the meaning of Section 17-303(a) of the Delaware Act) and shall not affect,
impair or eliminate the limitations on the liability of the Limited Partners or Assignees under
this Agreement.



Section 3.3 Outside Activities of the Limited Partners.




     Subject to the provisions of Section 7.5, the Omnibus Agreement and the Restricted Business
Contribution Agreement, which shall continue to be applicable to the Persons referred to therein,
regardless of whether such Persons shall also be Limited Partners or Assignees, any Limited Partner
or Assignee shall be entitled to and may have business interests and engage in business activities
in addition to those relating to the Partnership, including business interests and activities in
direct competition with the Partnership Group. Neither the Partnership nor any of the other
Partners or Assignees shall have any rights by virtue of this Agreement in any business ventures of
any Limited Partner or Assignee.



Section 3.4 Rights of Limited Partners.




     (a) In addition to other rights provided by this Agreement or by applicable law, and except as
limited by Section 3.4(b), each Limited Partner shall have the right, for a purpose reasonably
related to such Limited Partner’s interest as a limited partner in the Partnership, upon reasonable
written demand and at such Limited Partner’s own expense:




     (i) to obtain true and full information regarding the status of the business and
financial condition of the Partnership;



27









 






     (ii) promptly after becoming available, to obtain a copy of the Partnership’s federal,
state and local income tax returns for each year;




     (iii) to have furnished to him a current list of the name and last known business,
residence or mailing address of each Partner;




     (iv) to have furnished to him a copy of this Agreement and the Certificate of Limited
Partnership and all amendments thereto, together with a copy of the executed copies of all
powers of attorney pursuant to which this Agreement, the Certificate of Limited Partnership
and all amendments thereto have been executed;




     (v) to obtain true and full information regarding the amount of cash and a description
and statement of the Net Agreed Value of any other Capital Contribution by each Partner and
which each Partner has agreed to contribute in the future, and the date on which each became
a Partner; and




     (vi) to obtain such other information regarding the affairs of the Partnership as is
just and reasonable.



     (b) The General Partner may keep confidential from the Limited Partners and Assignees, for
such period of time as the General Partner deems reasonable, (i) any information that the General
Partner reasonably believes to be in the nature of trade secrets or (ii) other information the
disclosure of which the General Partner in good faith believes (A) is not in the best interests of
the Partnership Group, (B) could damage the Partnership Group or (C) that any Group Member is
required by law or by agreement with any third party to keep confidential (other than agreements
with Affiliates of the Partnership the primary purpose of which is to circumvent the obligations
set forth in this Section 3.4).



ARTICLE IV




CERTIFICATES; RECORD HOLDERS; TRANSFER OF PARTNERSHIP INTERESTS;

REDEMPTION OF PARTNERSHIP INTERESTS




Section 4.1 Certificates.




     Upon the Partnership’s issuance of Common Units, Class B Units or Subordinated Units to any
Person, the Partnership shall issue one or more Certificates in the name of such Person evidencing
the number of such Units being so issued. In addition, (a) upon the General Partner’s request, the
Partnership shall issue to it one or more Certificates in the name of the General Partner
evidencing its interests in the Partnership and (b) upon the request of any Person owning Incentive
Distribution Rights or any other Partnership Securities other than Common Units or Subordinated
Units, the Partnership shall issue to such Person one or more certificates evidencing such
Incentive Distribution Rights or other Partnership Securities other than Common Units or
Subordinated Units. Certificates shall be executed on behalf of the Partnership by the Chairman of
the Board, President or any Vice President and the Secretary or any Assistant
Secretary of the General Partner. No Common Unit Certificate shall be valid for any purpose
until it has been countersigned by the Transfer Agent; provided, however, that if the General



28









 







Partner elects to issue Common Units in global form, the Common Unit Certificates shall be valid
upon receipt of a certificate from the Transfer Agent certifying that the Common Units have been
duly registered in accordance with the directions of the Partnership and the Underwriters. Subject
to the requirements of Section 6.7(b), the Partners holding Certificates evidencing Subordinated
Units may exchange such Certificates for Certificates evidencing Common Units on or after the date
on which such Subordinated Units are converted into Common Units pursuant to the terms of Section
5.8.



Section 4.2 Mutilated, Destroyed, Lost or Stolen Certificates.




     (a) If any mutilated Certificate is surrendered to the Transfer Agent, the appropriate
officers of the General Partner on behalf of the Partnership shall execute, and the Transfer Agent
shall countersign and deliver in exchange therefor, a new Certificate evidencing the same number
and type of Partnership Securities as the Certificate so surrendered.



     (b) The appropriate officers of the General Partner on behalf of the Partnership shall execute
and deliver, and the Transfer Agent shall countersign a new Certificate in place of any Certificate
previously issued if the Record Holder of the Certificate:




     (i) makes proof by affidavit, in form and substance satisfactory to the General
Partner, that a previously issued Certificate has been lost, destroyed or stolen;




     (ii) requests the issuance of a new Certificate before the General Partner has notice
that the Certificate has been acquired by a purchaser for value in good faith and without
notice of an adverse claim;




     (iii) if requested by the Partnership, delivers to the General Partner a bond, in form
and substance satisfactory to the General Partner, with surety or sureties and with fixed or
open penalty as the Partnership may reasonably direct, in its sole discretion, to indemnify
the General Partner, the Partnership, the Partners, the General Partner and the Transfer
Agent against any claim that may be made on account of the alleged loss, destruction or
theft of the Certificate; and




     (iv) satisfies any other reasonable requirements imposed by the General Partner.



     If a Limited Partner or Assignee fails to notify the General Partner within a reasonable time
after he has notice of the loss, destruction or theft of a Certificate, and a transfer of the
Limited Partner Interests represented by the Certificate is registered before the Partnership, the
General Partner or the Transfer Agent receives such notification, the Limited Partner or Assignee
shall be precluded from making any claim against the Partnership, the General Partner or the
Transfer Agent for such transfer or for a new Certificate.



     (c) As a condition to the issuance of any new Certificate under this Section 4.2, the General
Partner may require the payment of a sum sufficient to cover any tax or other governmental charge
that may be imposed in relation thereto and any other expenses (including the fees and expenses of
the Transfer Agent) reasonably connected therewith.



29









 





Section 4.3 Record Holders.




     The Partnership shall be entitled to recognize the Record Holder as the Partner or Assignee
with respect to any Partnership Interest and, accordingly, shall not be bound to recognize any
equitable or other claim to or interest in such Partnership Interest on the part of any other
Person, regardless of whether the Partnership shall have actual or other notice thereof, except as
otherwise provided by law or any applicable rule, regulation, guideline or requirement of any
National Securities Exchange on which such Partnership Interests are listed for trading. Without
limiting the foregoing, when a Person (such as a broker, dealer, bank, trust company or clearing
corporation or an agent of any of the foregoing) is acting as nominee, agent or in some other
representative capacity for another Person in acquiring and/or holding Partnership Interests, as
between the Partnership on the one hand, and such other Persons on the other, such representative
Person (a) shall be the Partner or Assignee (as the case may be) of record and beneficially, (b)
must execute and deliver a Transfer Application and (c) shall be bound by this Agreement and shall
have the rights and obligations of a Partner or Assignee (as the case may be) hereunder and as, and
to the extent, provided for herein.



Section 4.4 Transfer Generally.




     (a) The term “transfer,” when used in this Agreement with respect to a Partnership Interest,
shall be deemed to refer to a transaction by which the General Partner assigns its General Partner
Interest to another Person who becomes a General Partner, by which the holder of a Limited Partner
Interest assigns such Limited Partner Interest to another Person who is or becomes a Limited
Partner or an Assignee, and includes a sale, assignment, gift, pledge, encumbrance, hypothecation,
mortgage, exchange or any other disposition by law or otherwise.



     (b) No Partnership Interest shall be transferred, in whole or in part, except in accordance
with the terms and conditions set forth in this Article IV. Any transfer or purported transfer of a
Partnership Interest not made in accordance with this Article IV shall be null and void.



     (c) Nothing contained in this Agreement shall be construed to prevent a disposition by any
member of the General Partner of any or all of the membership interests of the General Partner.



Section 4.5 Registration and Transfer of Limited Partner Interests.




     (a) The General Partner shall keep or cause to be kept on behalf of the Partnership a register
in which, subject to such reasonable regulations as it may prescribe and subject to the provisions
of Section 4.5(b), the Partnership will provide for the registration and transfer of
Limited Partner Interests. The Transfer Agent is hereby appointed registrar and transfer agent
for the purpose of registering Common Units and transfers of such Common Units as herein provided.
The Partnership shall not recognize transfers of Certificates evidencing Limited Partner Interests
unless such transfers are effected in the manner described in this Section 4.5. Upon surrender of a
Certificate for registration of transfer of any Limited Partner Interests evidenced by a
Certificate, and subject to the provisions of Section 4.5(b), the appropriate



30









 







officers of the
General Partner on behalf of the Partnership shall execute and deliver, and in the case of Common
Units, the Transfer Agent shall countersign and deliver, in the name of the holder or the
designated transferee or transferees, as required pursuant to the holder’s instructions, one or
more new Certificates evidencing the same aggregate number and type of Limited Partner Interests as
was evidenced by the Certificate so surrendered.



     (b) Except as otherwise provided in Section 4.9, the General Partner shall not recognize any
transfer of Limited Partner Interests until the Certificates evidencing such Limited Partner
Interests are surrendered for registration of transfer and such Certificates are accompanied by a
Transfer Application duly executed by the transferee (or the transferee’s attorney-in-fact duly
authorized in writing). No charge shall be imposed by the General Partner for such transfer;
provided, that as a condition to the issuance of any new Certificate under this Section 4.5, the
General Partner may require the payment of a sum sufficient to cover any tax or other governmental
charge that may be imposed with respect thereto.



     (c) Limited Partner Interests may be transferred only in the manner described in this Section
4.5 and in Section 4.7. The transfer of any Limited Partner Interests and the admission of any new
Limited Partner shall not constitute an amendment to this Agreement.



     (d) Until admitted as a Substituted Limited Partner pursuant to Section 10.2, the Record
Holder of a Limited Partner Interest shall be an Assignee in respect of such Limited Partner
Interest. Limited Partners may include custodians, nominees or any other individual or entity in
its own or any representative capacity.



     (e) A transferee of a Limited Partner Interest who has completed and delivered a Transfer
Application shall be deemed to have (i) requested admission as a Substituted Limited Partner, (ii)
agreed to comply with and be bound by and to have executed this Agreement, (iii) represented and
warranted that such transferee has the right, power and authority and, if an individual, the
capacity to enter into this Agreement, (iv) granted the powers of attorney set forth in this
Agreement and (v) given the consents and approvals and made the waivers contained in this
Agreement.



     (f) The General Partner and its Affiliates shall have the right at any time to transfer their
Subordinated Units, Class B Units and Common Units (whether issued upon conversion of the
Subordinated Units, the Class B Units or otherwise) to one or more Persons.



Section 4.6 Transfer of the General Partner’s General Partner Interest.




     (a) Subject to Section 4.6(c) below, prior to September 30, 2012, the General Partner shall
not transfer all or any part of its General Partner Interest to a Person unless such transfer (i)
has been approved by the prior written consent or vote of the holders of at least a majority of the
Outstanding Common Units (excluding Common Units held by the General Partner and its Affiliates) or
(ii) is of all, but not less than all, of its General Partner Interest to (A) an Affiliate of the
General Partner (other than an individual) or (B) another Person (other than an individual) in
connection with the merger or consolidation of the General Partner with or into another Person



31









 







(other than an individual) or the transfer by the General Partner of all or substantially all of
its assets to another Person (other than an individual).



     (b) Subject to Section 4.6(c) below, on or after September 30, 2012, the General Partner may
transfer all or any of its General Partner Interest without Unitholder approval.



     (c) Notwithstanding anything herein to the contrary, no transfer by the General Partner of all
or any part of its General Partner Interest to another Person shall be permitted unless (i) the
transferee agrees to assume the rights and duties of the General Partner under this Agreement and
to be bound by the provisions of this Agreement, (ii) the Partnership receives an Opinion of
Counsel that such transfer would not result in the loss of limited liability of any Limited Partner
or of any member of the Operating Company or cause the Partnership or the Operating Company to be
treated as an association taxable as a corporation or otherwise to be taxed as an entity for
federal income tax purposes (to the extent not already so treated or taxed) and (iii) such
transferee also agrees to purchase all (or the appropriate portion thereof, if applicable) of the
partnership or membership interest of the General Partner as the general partner or managing
member, if any, of each other Group Member. In the case of a transfer pursuant to and in
compliance with this Section 4.6, the transferee or successor (as the case may be) shall, subject
to compliance with the terms of Section 10.3, be admitted to the Partnership as the General Partner
immediately prior to the transfer of the Partnership Interest, and the business of the Partnership
shall continue without dissolution.



Section 4.7 Transfer of Incentive Distribution Rights.




     Prior to September 30, 2012, the General Partner or a subsequent holder of its Incentive
Distribution Rights may transfer any or all of such Incentive Distribution Rights without any
consent of the Unitholders (a) to an Affiliate of such holder (other than an individual) or (b) to
another Person (other than an individual) in connection with (i) the merger or consolidation of
such holder of Incentive Distribution Rights with or into such other Person or (ii) the transfer by
such holder of all or substantially all of its assets to such other Person or (iii) the sale of all
or substantially all of the equity interests of such holder to such other Person. Western
Pocahontas, Great Northern, New Gauley and NRP Investment and any subsequent holder of their
Incentive Distribution Rights may transfer any of their Incentive Distribution Rights at any time
without Unitholder approval. Any other transfer of the Incentive Distribution Rights prior to
September 30, 2012, shall require the prior approval of holders of at least a majority of the
Outstanding Common Units (excluding Common Units held by the General Partner and its
Affiliates). On or after September 30, 2012, the General Partner or any other holder of Incentive
Distribution Rights restricted by this Section 4.7 may transfer any or all of its Incentive
Distribution Rights without Unitholder approval. Notwithstanding anything herein to the contrary,
no transfer of Incentive Distribution Rights to another Person shall be permitted unless the
transferee agrees to be bound by the provisions of this Agreement.



Section 4.8 Restrictions on Transfers.




     (a) Except as provided in Section 4.8(d) below, but notwithstanding the other provisions of
this Article IV, no transfer of any Partnership Interests shall be made if such



32









 







transfer would (i)
violate the then applicable federal or state securities laws or rules and regulations of the
Commission, any state securities commission or any other governmental authority with jurisdiction
over such transfer, (ii) terminate the existence or qualification of the Partnership or the
Operating Company under the laws of the jurisdiction of its formation, or (iii) cause the
Partnership or the Operating Company to be treated as an association taxable as a corporation or
otherwise to be taxed as an entity for federal income tax purposes (to the extent not already so
treated or taxed).



     (b) The General Partner may impose restrictions on the transfer of Partnership Interests if a
subsequent Opinion of Counsel determines that such restrictions are necessary to avoid a
significant risk of any Group Member becoming taxable as a corporation or otherwise to be taxed as
an entity for federal income tax purposes. The restrictions may be imposed by making such
amendments to this Agreement as the General Partner may determine to be necessary or appropriate to
impose such restrictions; provided, however, that any amendment that the General Partner believes,
in the exercise of its reasonable discretion, could result in the delisting or suspension of
trading of any class of Limited Partner Interests on the principal National Securities Exchange on
which such class of Limited Partner Interests is then traded must be approved, prior to such
amendment being effected, by the holders of at least a majority of the Outstanding Limited Partner
Interests of such class.



     (c) The transfer of a Subordinated Unit that has converted into a Common Unit shall be subject
to the restrictions imposed by Section 6.7(b). The transfer of a Class B Unit that has converted
into a Common Unit shall be subject to the restrictions imposed by Section 6.7(c).



     (d) Nothing contained in this Article IV, or elsewhere in this Agreement, shall preclude the
settlement of any transactions involving Partnership Interests entered into through the facilities
of any National Securities Exchange on which such Partnership Interests are listed for trading.



Section 4.9 Citizenship Certificates; Non-citizen Assignees.




     (a) If any Group Member is or becomes subject to any federal, state or local law or regulation
that, in the reasonable determination of the General Partner, creates a substantial risk of
cancellation or forfeiture of any property in which the Group Member has an interest based on
the nationality, citizenship or other related status of a Limited Partner or Assignee, the
General Partner may request any Limited Partner or Assignee to furnish to the General Partner,
within 30 days after receipt of such request, an executed Citizenship Certification or such other
information concerning his nationality, citizenship or other related status (or, if the Limited
Partner or Assignee is a nominee holding for the account of another Person, the nationality,
citizenship or other related status of such Person) as the General Partner may request. If a
Limited Partner or Assignee fails to furnish to the General Partner within the aforementioned
30-day period such Citizenship Certification or other requested information or if upon receipt of
such Citizenship Certification or other requested information the General Partner determines, with
the advice of counsel, that a Limited Partner or Assignee is not an Eligible Citizen, the
Partnership Interests owned by such Limited Partner or Assignee shall be subject to redemption in
accordance with the provisions of Section 4.10. In addition, the General Partner may require



33









 







that
the status of any such Partner or Assignee be changed to that of a Non-citizen Assignee and,
thereupon, the General Partner shall be substituted for such Non-citizen Assignee as the Limited
Partner in respect of his Limited Partner Interests.



     (b) The General Partner shall, in exercising voting rights in respect of Limited Partner
Interests held by it on behalf of Non-citizen Assignees, distribute the votes in the same ratios as
the votes of Partners (including without limitation the General Partner) in respect of Limited
Partner Interests other than those of Non-citizen Assignees are cast, either for, against or
abstaining as to the matter.



     (c) Upon dissolution of the Partnership, a Non-citizen Assignee shall have no right to receive
a distribution in kind pursuant to Section 12.4 but shall be entitled to the cash equivalent
thereof, and the Partnership shall provide cash in exchange for an assignment of the Non-citizen
Assignee’s share of the distribution in kind. Such payment and assignment shall be treated for
Partnership purposes as a purchase by the Partnership from the Non-citizen Assignee of his Limited
Partner Interest (representing his right to receive his share of such distribution in kind).



     (d) At any time after he can and does certify that he has become an Eligible Citizen, a
Non-citizen Assignee may, upon application to the General Partner, request admission as a
Substituted Limited Partner with respect to any Limited Partner Interests of such Non-citizen
Assignee not redeemed pursuant to Section 4.10, and upon his admission pursuant to Section 10.2,
the General Partner shall cease to be deemed to be the Limited Partner in respect of the
Non-citizen Assignee’s Limited Partner Interests.



Section 4.10 Redemption of Partnership Interests of Non-citizen Assignees.



     (a) If at any time a Limited Partner or Assignee fails to furnish a Citizenship Certification
or other information requested within the 30-day period specified in Section 4.9(a), or if upon
receipt of such Citizenship Certification or other information the General Partner determines, with
the advice of counsel, that a Limited Partner or Assignee is not an Eligible Citizen, the
Partnership may, unless the Limited Partner or Assignee establishes to the satisfaction of the
General Partner that such Limited Partner or Assignee is an Eligible Citizen or
has transferred his Partnership Interests to a Person who is an Eligible Citizen and who
furnishes a Citizenship Certification to the General Partner prior to the date fixed for redemption
as provided below, redeem the Partnership Interest of such Limited Partner or Assignee as follows:




     (i) The General Partner shall, not later than the 30th day before the date fixed for
redemption, give notice of redemption to the Limited Partner or Assignee, at his last
address designated on the records of the Partnership or the Transfer Agent, by registered or
certified mail, postage prepaid. The notice shall be deemed to have been given when so
mailed. The notice shall specify the Redeemable Interests, the date fixed for redemption,
the place of payment, that payment of the redemption price will be made upon surrender of
the Certificate evidencing the Redeemable Interests and that on and after the date fixed for
redemption no further allocations or distributions to which the Limited Partner or Assignee
would otherwise be entitled in respect of the Redeemable Interests will accrue or be made.



34









 






     (ii) The aggregate redemption price for Redeemable Interests shall be an amount equal
to the Current Market Price (the date of determination of which shall be the date fixed for
redemption) of Limited Partner Interests of the class to be so redeemed multiplied by the
number of Limited Partner Interests of each such class included among the Redeemable
Interests. The redemption price shall be paid, in the discretion of the General Partner, in
cash or by delivery of a promissory note of the Partnership in the principal amount of the
redemption price, bearing interest at the rate of 10% annually and payable in three equal
annual installments of principal together with accrued interest, commencing one year after
the redemption date.




     (iii) Upon surrender by or on behalf of the Limited Partner or Assignee, at the place
specified in the notice of redemption, of the Certificate evidencing the Redeemable
Interests, duly endorsed in blank or accompanied by an assignment duly executed in blank,
the Limited Partner or Assignee or his duly authorized representative shall be entitled to
receive the payment therefor.




     (iv) After the redemption date, Redeemable Interests shall no longer constitute issued
and Outstanding Limited Partner Interests.



     (b) The provisions of this Section 4.10 shall also be applicable to Limited Partner Interests
held by a Limited Partner or Assignee as nominee of a Person determined to be other than an
Eligible Citizen.



     (c) Nothing in this Section 4.10 shall prevent the recipient of a notice of redemption from
transferring his Limited Partner Interest before the redemption date if such transfer is otherwise
permitted under this Agreement. Upon receipt of notice of such a transfer, the General Partner
shall withdraw the notice of redemption, provided the transferee of such Limited Partner Interest
certifies to the satisfaction of the General Partner in a Citizenship Certification delivered in
connection with the Transfer Application that he is an Eligible Citizen. If the transferee fails to
make such certification, such redemption shall be effected from the transferee on the original
redemption date.



ARTICLE V




CAPITAL CONTRIBUTIONS AND ISSUANCE OF PARTNERSHIP INTERESTS




Section 5.1 Organizational Contributions.




     In connection with the formation of the Partnership under the Delaware Act, the General
Partner made an initial Capital Contribution to the Partnership in the amount of $20.00, for a 2%
General Partner Interest in the Partnership and has been admitted as the General Partner of the
Partnership, and the Organizational Limited Partner made an initial Capital Contribution to the
Partnership in the amount of $980.00 for a 98% Limited Partner Interest in the Partnership and was
admitted as a Limited Partner of the Partnership. As of the Closing Date, the interest of the
Organizational Limited Partner was redeemed as provided in the Contribution Agreement; the initial
Capital Contributions of the Organizational Limited Partner was refunded; and the



35









 







Organizational
Limited Partner ceased to be a Limited Partner of the Partnership. Ninety-eight percent of any
interest or other profit that may have resulted from the investment or other use of such initial
Capital Contributions was allocated and distributed to the Organizational Limited Partner, and the
balance thereof was allocated and distributed to the General Partner.



Section 5.2 Contributions by the General Partner and its Affiliates.




     (a) On the Closing Date and pursuant to the Contribution and Conveyance Agreement, the General
Partner and its Affiliates made Capital Contributions in accordance with Section 5.2(a) of the
Partnership Agreement.



     (b) Upon the issuance of any additional Limited Partner Interests by the Partnership (other
than the issuance of Limited Partner Interests pursuant to the Underwriting Agreement), the General
Partner shall be required to make additional Capital Contributions equal to 2/98ths of any amount
contributed to the Partnership by the Limited Partners in exchange for such additional Limited
Partner Interests. Except as set forth in the immediately preceding sentence and Article XII, the
General Partner shall not be obligated to make any additional Capital Contributions to the
Partnership.



Section 5.3 Contributions by Initial Limited Partners.




     On the Closing Date and pursuant to the Underwriting Agreement, the initial Limited Partners
made Capital Contributions in accordance with Section 5.3 of the Partnership Agreement.



Section 5.4 Interest and Withdrawal.




     No interest shall be paid by the Partnership on Capital Contributions. No Partner or Assignee
shall be entitled to the withdrawal or return of its Capital Contribution, except to the extent, if
any, that distributions made pursuant to this Agreement or upon termination of the Partnership may
be considered as such by law and then only to the extent provided for in this Agreement. Except to
the extent expressly provided in this Agreement, no Partner or Assignee shall have priority over
any other Partner or Assignee either as to the return of Capital Contributions or as to profits,
losses or distributions. Any such return shall be a compromise to which all Partners and Assignees
agree within the meaning of Section 17-502(b) of the Delaware Act.



Section 5.5 Capital Accounts.




     (a) The Partnership shall maintain for each Partner (or a beneficial owner of Partnership
Interests held by a nominee in any case in which the nominee has furnished the identity of such
owner to the Partnership in accordance with Section 6031(c) of the Code or any other method
acceptable to the General Partner in its sole discretion) owning a Partnership Interest a separate
Capital Account with respect to such Partnership Interest in accordance with the rules of Treasury
Regulation Section 1.704-1(b)(2)(iv). Such Capital Account shall be increased by (i) the amount of
all Capital Contributions made to the Partnership with respect to such Partnership Interest
pursuant to this Agreement and (ii) all items of Partnership income and



36









 







gain (including, without
limitation, income and gain exempt from tax) computed in accordance with Section 5.5(b) and
allocated with respect to such Partnership Interest pursuant to Section 6.1, and decreased by (x)
the amount of cash or Net Agreed Value of all actual and deemed distributions of cash or property
made with respect to such Partnership Interest pursuant to this Agreement and (y) all items of
Partnership deduction and loss computed in accordance with Section 5.5(b) and allocated with
respect to such Partnership Interest pursuant to Section 6.1.



     (b) For purposes of computing the amount of any item of income, gain, loss or deduction which
is to be allocated pursuant to Article VI and is to be reflected in the Partners’ Capital Accounts,
the determination, recognition and classification of any such item shall be the same as its
determination, recognition and classification for federal income tax purposes (including, without
limitation, any method of depreciation, cost recovery or amortization used for that purpose),
provided, that:




     (i) Solely for purposes of this Section 5.5, the Partnership shall be treated as owning
directly its proportionate share (as determined by the General Partner based upon the
provisions of the Operating Company Agreement) of all property owned by the Operating
Company or any other Subsidiary that is classified as a partnership for federal income tax
purposes.




     (ii) All fees and other expenses incurred by the Partnership to promote the sale of (or
to sell) a Partnership Interest that can neither be deducted nor amortized under
Section 709 of the Code, if any, shall, for purposes of Capital Account maintenance, be
treated as an item of deduction at the time such fees and other expenses are incurred and
shall be allocated among the Partners pursuant to Section 6.1.




     (iii) Except as otherwise provided in Treasury Regulation Section 1.704-1(b)(2)(iv)(m),
the computation of all items of income, gain, loss and deduction shall be made without
regard to any election under Section 754 of the Code which may be made by the Partnership
and, as to those items described in Section 705(a)(1)(B) or 705(a)(2)(B) of the Code,
without regard to the fact that such items are not includable in gross income or are neither
currently deductible nor capitalized for federal income tax purposes. To the extent an
adjustment to the adjusted tax basis of any Partnership asset pursuant to Section 734(b) or
743(b) of the Code is required, pursuant to Treasury Regulation Section
1.704-1(b)(2)(iv)(m), to be taken into account in determining Capital Accounts, the amount
of such adjustment in the Capital Accounts shall be treated as an item of gain or loss.




     (iv) Any income, gain or loss attributable to the taxable disposition of any
Partnership property shall be determined as if the adjusted basis of such property as of
such date of disposition were equal in amount to the Partnership’s Carrying Value with
respect to such property as of such date.




     (v) In accordance with the requirements of Section 704(b) of the Code, any deductions
for depreciation, cost recovery or amortization attributable to any Contributed



37









 






Property
shall be determined as if the adjusted basis of such property on the date it was acquired by
the Partnership were equal to the Agreed Value of such property. Upon an adjustment pursuant
to Section 5.5(d) to the Carrying Value of any Partnership property subject to depreciation,
cost recovery or amortization, any further deductions for such depreciation, cost recovery
or amortization attributable to such property shall be determined (A) as if the adjusted
basis of such property were equal to the Carrying Value of such property immediately
following such adjustment and (B) using a rate of depreciation, cost recovery or
amortization derived from the same method and useful life (or, if applicable, the remaining
useful life) as is applied for federal income tax purposes; provided, however, that, if the
asset has a zero adjusted basis for federal income tax purposes, depreciation, cost recovery
or amortization deductions shall be determined using any reasonable method that the General
Partner may adopt.




     (vi) If the Partnership’s adjusted basis in a depreciable or cost recovery property is
reduced for federal income tax purposes pursuant to Section 48(q)(1) or 48(q)(3) of the
Code, the amount of such reduction shall, solely for purposes hereof, be deemed to be an
additional depreciation or cost recovery deduction in the year such property is placed in
service and shall be allocated among the Partners pursuant to Section 6.1. Any restoration
of such basis pursuant to Section 48(q)(2) of the Code shall, to the extent possible, be
allocated in the same manner to the Partners to whom such deemed deduction was allocated.



     (c) (i) A transferee of a Partnership Interest shall succeed to a pro rata portion of the
Capital Account of the transferor relating to the Partnership Interest so transferred.




     (ii) Immediately prior to the transfer of a Subordinated Unit or of a Subordinated Unit
that has converted into a Common Unit pursuant to Section 5.8 by a holder thereof (other
than a transfer to an Affiliate unless the General Partner elects to have this subparagraph
5.5(c)(ii) apply), the Capital Account maintained for such Person with respect to its
Subordinated Units or converted Subordinated Units will (A) first, be allocated to the
Subordinated Units or converted Subordinated Units to be transferred in an amount equal to
the product of (x) the number of such Subordinated Units or converted Subordinated Units to
be transferred and (y) the Per Unit Capital Amount for a Common Unit, and (B) second, any
remaining balance in such Capital Account will be retained by the transferor, regardless of
whether it has retained any Subordinated Units or converted Subordinated Units. Following
any such allocation, the transferor’s Capital Account, if any, maintained with respect to
the retained Subordinated Units or converted Subordinated Units, if any, will have a balance
equal to the amount allocated under clause (B) hereinabove, and the transferee’s Capital
Account established with respect to the transferred Subordinated Units or converted
Subordinated Units will have a balance equal to the amount allocated under clause (A)
hereinabove.



     (d) (i) In accordance with Treasury Regulation Section 1.704-1(b)(2)(iv)(f), on an issuance of
additional Partnership Interests for cash or Contributed Property or the conversion of the General
Partner’s Combined Interest to Common Units pursuant to Section 11.3(b), the Capital Account of all
Partners and the Carrying Value of each Partnership property immediately



38









 







prior to such issuance
shall be adjusted upward or downward to reflect any Unrealized Gain or Unrealized Loss attributable
to such Partnership property, as if such Unrealized Gain or Unrealized Loss had been recognized on
an actual sale of each such property immediately prior to such issuance and had been allocated to
the Partners at such time pursuant to Section 6.1 in the same manner as any item of gain or loss
actually recognized during such period would have been allocated. In determining such Unrealized
Gain or Unrealized Loss, the aggregate cash amount and fair market value of all Partnership assets
(including, without limitation, cash or cash equivalents) immediately prior to the issuance of
additional Partnership Interests shall be determined by the General Partner using such reasonable
method of valuation as it may adopt; provided, however, that the General Partner, in arriving at
such valuation, must take fully into account the fair market value of the Partnership Interests of
all Partners at such time. The General Partner shall allocate such aggregate value among the assets
of the Partnership (in such manner as it determines in its discretion to be reasonable) to arrive
at a fair market value for individual properties.




     (ii) In accordance with Treasury Regulation Section 1.704-1(b)(2)(iv)(f), immediately
prior to any actual or deemed distribution to a Partner of any Partnership property (other
than a distribution of cash that is not in redemption or retirement of a Partnership
Interest), the Capital Accounts of all Partners and the Carrying Value of all Partnership
property shall be adjusted upward or downward to reflect any Unrealized
Gain or Unrealized Loss attributable to such Partnership property, as if such
Unrealized Gain or Unrealized Loss had been recognized in a sale of such property
immediately prior to such distribution for an amount equal to its fair market value, and had
been allocated to the Partners, at such time, pursuant to Section 6.1 in the same manner as
any item of gain or loss actually recognized during such period would have been allocated.
In determining such Unrealized Gain or Unrealized Loss the aggregate cash amount and fair
market value of all Partnership assets (including, without limitation, cash or cash
equivalents) immediately prior to a distribution shall (A) in the case of an actual
distribution which is not made pursuant to Section 12.4 or in the case of a deemed
distribution, be determined and allocated in the same manner as that provided in Section
5.5(d)(i) or (B) in the case of a liquidating distribution pursuant to Section 12.4, be
determined and allocated by the Liquidator using such reasonable method of valuation as it
may adopt.



Section 5.6 Issuances of Additional Partnership Securities.




     (a) Subject to Section 5.7, the Partnership may issue additional Partnership Securities and
options, rights, warrants and appreciation rights relating to the Partnership Securities for any
Partnership purpose at any time and from time to time to such Persons for such consideration and on
such terms and conditions as shall be established by the General Partner in its sole discretion,
all without the approval of any Limited Partners.



     (b) Each additional Partnership Security authorized to be issued by the Partnership pursuant
to Section 5.6(a) may be issued in one or more classes, or one or more series of any such classes,
with such designations, preferences, rights, powers and duties (which may be senior to existing
classes and series of Partnership Securities), as shall be fixed by the General Partner



39









 







in the
exercise of its sole discretion, including (i) the right to share Partnership profits and losses or
items thereof; (ii) the right to share in Partnership distributions; (iii) rights upon dissolution
and liquidation of the Partnership; (iv) whether, and the terms and conditions upon which, the
Partnership may redeem the Partnership Security; (v) whether such Partnership Security is issued
with the privilege of conversion or exchange and, if so, the terms and conditions of such
conversion or exchange; (vi) the terms and conditions upon which each Partnership Security will be
issued, evidenced by certificates and assigned or transferred; and (vii) the right, if any, of each
such Partnership Security to vote on Partnership matters, including matters relating to the
relative rights, preferences and privileges of such Partnership Security.



     (c) The General Partner is hereby authorized and directed to take all actions that it deems
necessary or appropriate in connection with (i) each issuance of Partnership Securities and
options, rights, warrants and appreciation rights relating to Partnership Securities pursuant to
this Section 5.6, (ii) the conversion of the General Partner Interest or any Incentive Distribution
Rights into Units pursuant to the terms of this Agreement, (iii) the admission of Additional
Limited Partners and (iv) all additional issuances of Partnership Securities. The General Partner
is further authorized and directed to specify the relative rights, powers and duties of the holders
of the Units or other Partnership Securities being so issued. The General Partner shall do all
things necessary to comply with the Delaware Act and is authorized and directed to do all
things it deems to be necessary or advisable in connection with any future issuance of Partnership
Securities or in connection with the conversion of the General Partner Interest or any Incentive
Distribution Rights into Units pursuant to the terms of this Agreement, including compliance with
any statute, rule, regulation or guideline of any federal, state or other governmental agency or
any National Securities Exchange on which the Units or other Partnership Securities are listed for
trading.



Section 5.7 Limitations on Issuance of Additional Partnership Securities.




     Except as otherwise specified in this Section 5.7, the issuance of Partnership Securities
pursuant to Section 5.6 shall be subject to the following restrictions and limitations:



     (a) During the Subordination Period, the Partnership shall not issue (and shall not issue any
options, rights, warrants or appreciation rights relating to) an aggregate of more than 5,676,829
additional Parity Units without the prior approval of the holders of a Unit Majority. In applying
this limitation, there shall be excluded Common Units and other Parity Units issued (A) in
connection with the Underwriting Agreement, (B) in accordance with Sections 5.7(b) and 5.7(c), (C)
upon conversion of Subordinated Units pursuant to Section 5.8, (D) upon conversion of the General
Partner Interest or any Incentive Distribution Rights pursuant to Section 11.3(b), (E) pursuant to
the employee benefit plans of the General Partner, the Partnership or any other Group Member, (F)
upon a conversion or exchange of Parity Units issued after the date hereof into Common Units or
other Parity Units; provided that the total amount of Available Cash required to pay the aggregate
Minimum Quarterly Distribution on all Common Units and all Parity Units does not increase as a
result of this conversion or exchange and (G) in the event of a combination or subdivision of
Common Units. Notwithstanding anything to the contrary in this Section 5.7(a), the issuance of
Common Units upon conversion of the Class B Units pursuant to Section 5.12 shall be subject to the
prior approval of the Unitholders specified in Section 5.12(f).



40









 





     (b) During the Subordination Period, the Partnership may also issue an unlimited number of
Common Units and other Parity Units without the prior approval of the Unitholders, if such issuance
occurs (i) in connection with an Acquisition or a Capital Improvement or (ii) within 365 days of,
and the net proceeds from such issuance are used to repay debt incurred in connection with, an
Acquisition or a Capital Improvement, in each case where such Acquisition or Capital Improvement
involves assets that, if acquired (or in the case of a Capital Improvement, put into commercial
service) by the Partnership as of the date that is one year prior to the first day of the Quarter
in which such Acquisition was consummated or such Capital Improvement was put into commercial
service (“One Year Test Period”), would have resulted, on a pro forma or estimated pro forma basis
(as described below), in an increase in:




     (A) the amount of Adjusted Operating Surplus generated by the Partnership on a
per-Unit basis (for all Outstanding Units) with respect to the One Year Test Period
(on a pro forma or estimated pro forma basis as described below) as compared to




     (B) the actual amount of Adjusted Operating Surplus generated by the
Partnership on a per-Unit basis (for all Outstanding Units) with respect to the One
Year Test Period as adjusted as provided below.


The General Partner’s good faith determination that such an increase would have resulted shall be
conclusive. The amount in clause (A) shall be determined on a pro forma or estimated pro forma
basis assuming that (1) all of the Parity Units to be issued in connection with or within 365 days
of such Acquisition or Capital Improvement had been issued and outstanding as of the commencement
of such One Year Test Period, (2) all indebtedness for borrowed money to be incurred or assumed in
connection with such Acquisition or Capital Improvement (other than any such indebtedness that is
to be repaid with the proceeds of such issuance of Parity Units) had been incurred or assumed, in
each case as of the commencement of the One Year Test Period, (3) the personnel expenses that would
have been incurred by the Partnership in the operation of the acquired assets are the personnel
expenses for employees to be retained by the Partnership in the operation of the acquired assets,
and (4) the personnel expenses that would have been incurred by the Partnership in the operation of
the constructed assets and the non-personnel costs and expenses that would have been incurred by
the Partnership in the operation of the acquired or constructed assets are computed on the same
basis as those incurred by the Partnership in the operation of the Partnership’s business at
similarly situated Partnership facilities or, if there are no such similarly situated facilities,
as estimated by the General Partner in good faith using such assumptions as in its sole discretion
it believes are reasonable. If (1) the Partnership makes a Capital Improvement or (2) the
Partnership makes an Acquisition for which no financial statements are required to be furnished
pursuant to Regulation S-X under the Securities Exchange Act of 1934, then the amount of Adjusted
Operating Surplus in clause (A) attributable to such Acquisition or Capital Improvement shall be
estimated by the General Partner in good faith using such assumptions as in its sole discretion it
believes are reasonable. In determining Adjusted Operating Surplus attributable to an Acquisition
or a Capital Improvement, there shall be excluded from the amount in clause (B) above (i) any
Operating Surplus attributable to such Acquisition or Capital Improvement (regardless of whether
such Operating Surplus is positive or negative), and (ii) for the purpose of calculating the number
of outstanding Units, any Units


41









 






issued to finance the Acquisition or Capital Improvement. The
number of Units, excluding any Common Units or other Parity Units to be issued in connection with
or within 365 days of such Acquisition or Capital Improvement, deemed to be Outstanding for the
purpose of calculating the amounts in clause (A) and clause (B) shall be the weighted average
number of Units Outstanding during the One Year Test Period. For the purposes of this Section
5.7(b), the term “debt” shall be deemed to include the indebtedness used to extend, refinance,
renew, replace or defease debt originally incurred in connection with an Acquisition or Capital
Improvement; provided, that, the amount of such indebtedness does not exceed the principal sum of,
plus accrued interest on, the indebtedness so extended, refinanced, renewed, replaced or defeased.




     (c) During the Subordination Period, without the prior approval of the holders of a Unit
Majority, the Partnership shall not issue any additional Partnership Securities (or options,
rights, warrants or appreciation rights related thereto) (i) that are entitled in any Quarter to
receive in respect of the Subordination Period any distribution of Available Cash from Operating
Surplus before the Common Units and any Parity Units have received (or amounts have been set
aside for payment of) the Minimum Quarterly Distribution and any Cumulative Common Unit Arrearage
for such Quarter or (ii) that are entitled to allocations in respect of the Subordination Period of
Net Termination Gain before the Common Units and any Parity Units have been allocated Net
Termination Gain pursuant to Section 6.1(c)(i)(B).



     (d) During the Subordination Period, without the prior approval of the holders of a Unit
Majority, the Partnership may issue additional Partnership Securities (or options, rights, warrants
or appreciation rights related thereto) (i) that are not entitled in any Quarter during the
Subordination Period to receive any distributions of Available Cash from Operating Surplus until
after the Common Units and any Parity Units have received (or amounts have been set aside for
payment of) the Minimum Quarterly Distribution and any Cumulative Common Unit Arrearage for such
Quarter and (ii) that are not entitled to allocations in respect of the Subordination Period of Net
Termination Gain before the Common Units and Parity Units have been allocated Net Termination Gain
pursuant to Section 6.1(c)(i)(B), even if (A) the amount of Available Cash from Operating Surplus
to which each such Partnership Security is entitled to receive after the Minimum Quarterly
Distribution and any Cumulative Common Unit Arrearage have been paid or set aside for payment on
the Common Units exceeds the Minimum Quarterly Distribution, or (B) the amount of Net Termination
Gain to be allocated to such Partnership Security after Net Termination Gain has been allocated to
any Common Units and Parity Units pursuant to Section 6.1(c)(i)(B) exceeds the amount of such Net
Termination Gain to be allocated to each Common Unit or Parity Unit.



     (e) During the Subordination Period, the Partnership may also issue an unlimited number of
Parity Units without the approval of the Unitholders, if the proceeds from such issuance are used
exclusively to repay up to $25.0 million of indebtedness of a Group Member where the aggregate
amount of distributions that would have been paid with respect to such newly issued Units or
Partnership Securities, plus the related distributions on the General Partner Interest in respect
of the four-Quarter period ending prior to the first day of the Quarter in which the issuance is to
be consummated (assuming such additional Units



42









 







or Partnership Securities had been Outstanding
throughout such period and that distributions equal to the distributions that were actually paid on
the Outstanding Units during the period were paid on such additional Units or Partnership
Securities) would not have exceeded the interest costs actually incurred during such period on the
indebtedness that is to be repaid (or, if such indebtedness was not outstanding throughout the
entire period, would have been incurred had such indebtedness been outstanding for the entire
period). In the event that the Partnership is required to pay a prepayment penalty in connection
with the repayment of such indebtedness, for purposes of the foregoing test the number of Parity
Units issued to repay such indebtedness shall be deemed increased by the number of Parity Units
that would need to be issued to pay such penalty.



     (f) No fractional Units shall be issued by the Partnership.



     (g) During the Subordination Period, the Partnership may also issue an unlimited number of
Common Units and other Parity Units without the prior approval of the Unitholders, if
the net proceeds of such issuance are used to redeem an equal number of Common Units at a
price per unit equal to the net proceeds per unit, before expenses, that the Partnership receives
from such issuance.



Section 5.8 Conversion of Subordinated Units.




     (a) A total of 2,838,415 of the Outstanding Subordinated Units will convert into Common Units
on a one-for-one basis immediately after the distribution of Available Cash to Partners pursuant to
Section 6.3(a) in respect of any Quarter ending on or after September 30, 2005 in respect of which:




     (i) distributions under Section 6.4 in respect of all Outstanding Common Units and
Subordinated Units and any other Outstanding Units that are senior or equal in right of
distribution to the Subordinated Units with respect to each of the three consecutive,
non-overlapping four-Quarter periods immediately preceding such date equaled or exceeded the
sum of the Minimum Quarterly Distribution on all of the Outstanding Common Units and
Subordinated Units and any other Outstanding Units that are senior or equal in right of
distribution to the Subordinated Units during such periods;




     (ii) the Adjusted Operating Surplus generated during each of the three consecutive,
non-overlapping four-Quarter periods immediately preceding such date equaled or exceeded the
sum of the Minimum Quarterly Distribution on all of the Common Units, Subordinated Units and
any other Units that are senior or equal in right of distribution to the Subordinated Units
that were Outstanding during such periods on a Fully Diluted Basis, plus the related
distribution on the General Partner Interest in the Partnership, during such periods;




     (iii) the Cumulative Common Unit Arrearage on all of the Common Units is zero; and




     (iv) the Cumulative Class B Unit Arrearage on all of the Outstanding Class B Units is
zero.



     (b) An additional 2,838,414 of the Outstanding Subordinated Units will convert into Common
Units on a one-for-one basis immediately after the distribution of Available Cash to



43









 







Partners
pursuant to Section 6.3(a) in respect of any Quarter ending on or after September 30, 2006, in
respect of which:




     (i) distributions under Section 6.4 in respect of all Outstanding Common Units and
Subordinated Units and any other Outstanding Units that are senior or equal in right of
distribution to the Subordinated Units with respect to each of the three consecutive,
non-overlapping four-Quarter periods immediately preceding such date equaled or exceeded the
sum of the Minimum Quarterly Distribution on all of the Outstanding Common Units and
Subordinated Units and any other Outstanding Units that are senior or equal in right of
distribution to the Subordinated Units during such periods;




     (ii) the Adjusted Operating Surplus generated during each of the three consecutive,
non-overlapping four-Quarter periods immediately preceding such date equaled or exceeded the
sum of the Minimum Quarterly Distribution on all of the Common Units, Subordinated Units and
any other Units that are senior or equal in right of distribution to the Subordinated Units
that were Outstanding during such periods on a Fully Diluted Basis, plus the related
distribution on the General Partner Interest during such periods;




     (iii) the Cumulative Common Unit Arrearage on all of the Common Units is zero; and




     (iv) the Cumulative Class B Unit Arrearage on all of the Outstanding Class B Units is
zero;


provided, however, that the conversion of Subordinated Units pursuant to this Section 5.8(b) may
not occur until at least one year following the conversion of Subordinated Units pursuant to
Section 5.8(a).




     (c) In the event that less than all of the Outstanding Subordinated Units shall convert into
Common Units pursuant to Section 5.8(a) or 5.8(b) at a time when there shall be more than one
holder of Subordinated Units, then the Subordinated Units that are to be converted into Common
Units shall be allocated among the holders of Subordinated Units pro rata based on the number of
Subordinated Units held by each such holder as of the date on which Available Cash is distributed
to Partners as provided in clauses (a) and (b) above, immediately after which such conversion shall
occur; provided, however, notwithstanding any other provision of this Agreement, to the extent such
conversion of less than all the Outstanding Subordinated Units would result in the issuance of
fractional Common Units to any holder of Subordinated Units, then (i) the number of Common Units
issuable upon conversion of Subordinated Units held by such holder shall be rounded down to the
nearest whole number of Common Units, and the Partnership shall pay to such holder, in lieu of such
fractional Common Unit, cash equal to the product of (A) the last reported sales price of a Common
Unit on the national securities exchange on which the Common Units are listed for trading on the
day before such conversion of less than all the Outstanding Subordinated Units and (B) such
fractional Common Unit and (ii) the number of Subordinated Units retained and not converted by such
holder shall also be rounded down to the nearest whole number of Subordinated Units, and the
Partnership shall pay to such holder, in



44









 







lieu of such fractional Subordinated Unit, cash equal to
the product of (A) the last reported sales price of a Subordinated Unit on the national securities
exchange on which the Subordinated Units are listed for trading on the day before such conversion
of less than all the Outstanding Subordinated Units and (B) such fractional Subordinated Unit.



     (d) Any Subordinated Units that are not converted into Common Units pursuant to Section 5.8(a)
and (b) shall convert into Common Units on a one-for-one basis immediately after the distribution
of Available Cash to Partners pursuant to Section 6.3(a) in respect of the final Quarter of the
Subordination Period.



     (e) Notwithstanding any other provision of this Agreement, all the then Outstanding
Subordinated Units will automatically convert into Common Units on a one-for-one basis as set forth
in, and pursuant to the terms of, Section 11.4.



     (f) A Subordinated Unit that has converted into a Common Unit shall be subject to the
provisions of Section 6.7(b).



Section 5.9 Limited Preemptive Right.




     Except as provided in this Section 5.9 and in Section 5.2, no Person shall have any
preemptive, preferential or other similar right with respect to the issuance of any Partnership
Security, whether unissued, held in the treasury or hereafter created. The General Partner shall
have the right, which it may from time to time assign in whole or in part to any of its Affiliates,
to purchase Partnership Securities from the Partnership whenever, and on the same terms that, the
Partnership issues Partnership Securities to Persons other than the General Partner and its
Affiliates, to the extent necessary to maintain the Percentage Interests of the General Partner and
its Affiliates equal to that which existed immediately prior to the issuance of such Partnership
Securities.



Section 5.10 Splits and Combinations.




     (a) Subject to Sections 5.10(d), 6.6 and 6.9 (dealing with adjustments of distribution
levels), the Partnership may make a Pro Rata distribution of Partnership Securities to all Record
Holders or may effect a subdivision or combination of Partnership Securities so long as, after any
such event, each Partner shall have the same Percentage Interest in the Partnership as before such
event, and any amounts calculated on a per Unit basis (including any Common Unit Arrearage,
Cumulative Common Unit Arrearage, Class B Unit Arrearage or Cumulative Class B Unit Arrearage) or
stated as a number of Units (including the number of Subordinated Units that may convert prior to
the end of the Subordination Period, the number of Common Units into which the Class B Units may
convert and the number of additional Parity Units that may be issued pursuant to Section 5.7
without a Unitholder vote) are proportionately adjusted retroactive to the beginning of the
Partnership.



     (b) Whenever such a distribution, subdivision or combination of Partnership Securities is
declared, the General Partner shall select a Record Date as of which the distribution, subdivision
or combination shall be effective and shall send notice thereof at least 20 days prior to such
Record Date to each Record Holder as of a date not less than 10 days prior to the date of



45









 







such
notice. The General Partner also may cause a firm of independent public accountants selected by it
to calculate the number of Partnership Securities to be held by each Record Holder after giving
effect to such distribution, subdivision or combination. The General Partner shall be entitled to
rely on any certificate provided by such firm as conclusive evidence of the accuracy of such
calculation.



     (c) Promptly following any such distribution, subdivision or combination, the Partnership may
issue Certificates to the Record Holders of Partnership Securities as of the
applicable Record Date representing the new number of Partnership Securities held by such
Record Holders, or the General Partner may adopt such other procedures as it may deem appropriate
to reflect such changes. If any such combination results in a smaller total number of Partnership
Securities Outstanding, the Partnership shall require, as a condition to the delivery to a Record
Holder of such new Certificate, the surrender of any Certificate held by such Record Holder
immediately prior to such Record Date.



     (d) The Partnership shall not issue fractional Units upon any distribution, subdivision or
combination of Units. If a distribution, subdivision or combination of Units would result in the
issuance of fractional Units but for the provisions of Section 5.7(e) and this Section 5.10(d),
each fractional Unit shall be rounded to the nearest whole Unit (and a 0.5 Unit shall be rounded to
the next higher Unit).



Section 5.11 Fully Paid and Non-Assessable Nature of Limited Partner Interests.




     All Limited Partner Interests issued pursuant to, and in accordance with the requirements of,
this Article V shall be fully paid and non-assessable Limited Partner Interests in the Partnership,
except as such non-assessability may be affected by Section 17-607 of the Delaware Act.



Section 5.12 Establishment of Class B Units.




     (a) General. The General Partner hereby designates and creates a class of Units to be
designated as “Class B Units” and consisting of a total of 2,821,960 Class B Units, and fixes the
designations, preferences and relative, participating, optional or other special rights, powers and
duties of holders of the Class B Units as set forth in this Section 5.12.



     (b) Rights of Class B Units. During the period commencing upon issuance of the Class B Units
and ending on the Conversion Effective Date, unless amended pursuant to Section 5.12(g) hereof:




     (i) Allocations. Except as otherwise provided in this Agreement, all items of
Partnership income, gain, loss, deduction and credit shall be allocated to the Class B Units
to the same extent as such items would be so allocated if such Class B Units were Common
Units that were then Outstanding.




     (ii) Distributions of Available Cash from Operating Surplus During Subordination
Period. Notwithstanding anything to the contrary in Section 6.4(a), and subject to Section
5.12(g), Unitholders holding Class B Units shall receive the same



46









 







distribution per Unit
pursuant to Section 6.4(a) as Unitholders holding Common Units receive pursuant to Section
6.4(a); provided that:




     (A) Unitholders holding Class B Units shall not receive any distribution
pursuant to Section 6.4(a)(i) or Section 6.4(a)(ii) in respect of such Class B
Units; and




     (B) following any distribution pursuant to Section 6.4(a)(ii) and prior to any
distribution pursuant to Section 6.4(a)(iii), Available Cash shall be distributed as
follows: (x) 98% to the Unitholders holding Class B Units, Pro Rata, and 2% to the
General Partner, until there has been distributed in respect of each Class B Unit
then Outstanding an amount equal to the Minimum Quarterly Distribution for such
Quarter; and (y) then, 98% to the Unitholders holding Class B Units, Pro Rata, and
2% to the General Partner, until there has been distributed in respect of each Class
B Unit then Outstanding an amount equal to the Cumulative Class B Unit Arrearage, if
any, existing with respect to such Quarter.




     (iii) Distributions of Available Cash from Operating Surplus After Subordination
Period. Notwithstanding anything to the contrary in Section 6.4(b), and subject to Section
5.12(g), Unitholders holding Class B Units shall receive the same distribution per Unit
pursuant to Section 6.4(b) as other Unitholders receive pursuant to Section 6.4(b);
provided, that:




     (A) Unitholders holding Class B Units shall not receive any distributions
pursuant to Section 6.4(b)(i) in respect of such Class B Units; and




     (B) following any distribution pursuant to Section 6.4(b)(i) (subject to
Section 5.12(b)(iii)(A)), and prior to any distribution pursuant to Section
6.4(b)(ii), Available Cash shall be distributed 98% to the Unitholders holding Class
B Units, Pro Rata, and 2% to the General Partner until there has been distributed in
respect of each Class B Unit then Outstanding an amount equal to the Minimum
Quarterly Distribution for such Quarter.




     (iv) Allocation of Net Termination Gain to Class B Unitholders. Notwithstanding
anything to the contrary in Section 6.1(c)(i), Unitholders holding Class B Units shall be
allocated Net Termination Gain in accordance with Section 6.1(c)(i); provided, that:




     (A) Unitholders holding Class B Units shall not receive any allocation pursuant
to Section 6.1(c)(i)(B) or Section 6.1(c)(i)(C) in respect of such Class B Units;
and




     (B) following any allocation made pursuant to Section 6.1(c)(i)(B) and prior to
any allocation made pursuant to Section 6.1(c)(i)(C), any remaining Net Termination
Gain shall be allocated 98% to all Unitholders holding Class B Units, Pro Rata, and
2% to the General Partner, until the Capital Account in respect of each Class B Unit
then Outstanding is equal to the sum of (1) its Unrecovered



47









 






Capital, determined for
the taxable year (or portion thereof) to which this allocation of gain relates, plus
(2) the Minimum Quarterly Distribution for the Quarter during which the Liquidation
Date occurs, reduced by any distribution pursuant to Section 5.12(b)(ii)(B)(x) with
respect to such Class B Unit for such Quarter, plus (3) any then existing Cumulative
Class B Unit Arrearage.




     (v) Allocation of Net Termination Loss to Class B Unitholders. Notwithstanding
anything to the contrary in Section 6.1(c)(ii), with respect to allocations made in
accordance with Section 6.1(c)(ii), Unitholders holding Class B Units shall be allocated Net
Termination Loss in accordance with Section 6.1(c)(ii)(B) in the same manner as Unitholders
holding Common Units.




     (vi) Elimination of Cumulative Class B Unit Arrearages Upon Conversion. If a Cumulative
Class B Unit Arrearage exists on the Conversion Effective Date, Available Cash shall be
distributed 98% to the Unitholders holding Class B Units, Pro Rata, and 2% to the General
Partner, until there has been distributed in respect of each Class B Unit then Outstanding
an amount equal to the Cumulative Class B Unit Arrearage as of such date. This distribution
shall not be deemed a distribution on a Common Unit, but the satisfaction of prior
entitlements of the holders of Class B Units as of the Conversion Effective Date. For the
taxable year in which the distribution is made, if not previously allocated, each Person
receiving such distribution shall be allocated items of gross income in an amount equal to
such distribution as provided in Section 6.1(d)(iii)(A).



     (c) Voting Rights. The Class B Units will have such voting rights pursuant to the Agreement as
such Class B Units would have if they were Common Units that were then Outstanding, except that (i)
with respect to Conversion Approval, none of the Class B Units shall be deemed Outstanding as of
the record date for such vote or be entitled to vote thereon and (ii) other than with respect to
Conversion Approval, the Class B Units shall be entitled to vote together with the Common Units as
a single class on any matter on which Common Units are entitled to vote. Each Class B Unit will be
entitled to the number of votes equal to the number of Common Units into which a Class B Unit is
convertible at the time of the record date for the vote or written consent on the matter.



     (d) Certificates. The Class B Units will be evidenced by certificates in such form as the
General Partner may approve and, subject to the satisfaction of any applicable legal and regulatory
requirements, may be assigned or transferred in a manner identical to the assignment and transfer
of other Units. The certificates will initially include a restrictive legend to the effect that the
Class B Units have not been registered under the Securities Act or any state securities laws.



     (e) Registrar and Transfer Agent. The General Partner will act as registrar and transfer agent
of the Class B Units.



     (f) Conversion. Except as provided in Section 5.12(i) and in this Section 5.12(f), the Class B
Units are not convertible into Common Units. The Partnership shall take such actions as may be
necessary or appropriate to submit to a vote or consent of the Unitholders (other than



48









 







holders of
Class B Units) the approval of a change in the terms of the Class B Units to provide that each
Class B Unit shall automatically convert into one Common Unit (subject to appropriate adjustment in
the event of any split-up, combination or similar event affecting the Common Units that occurs
prior to the conversion of the Class B Units) effective immediately upon receipt
of such approval from such Unitholders (the “Conversion Approval”) without any further action
by the holders thereof. The vote or consent required for the Conversion Approval will be the
requisite vote required under the rules or staff interpretations of the National Securities
Exchange on which the Common Units are listed or admitted for trading, provided, the issuance of
Common Units upon conversion of Class B Units must comply with Section 5.7(a) of this Agreement.
Upon receipt of the Conversion Approval and compliance with Section 5.12(h), the terms of the Class
B Units will be changed, automatically and without further action, so that each Class B Unit is
converted into one Common Unit (subject to appropriate adjustment in the event of any split-up,
combination or similar event affecting the Common Units that occurs prior to the conversion of the
Class B Units) and, immediately thereafter, none of the Class B Units shall be Outstanding. The
date that Conversion Approval is obtained is herein referred to as the “Conversion Approval Date.”



     (g) Automatic Provisions. If the Conversion Effective Date has not occurred on or prior to the
180th day after the earlier to occur of (1) the Second Closing and (2) March 31, 2008,
then, effective as of the next succeeding day after such 180th day (the “Class B
Distribution Increase Date”) until the Conversion Effective Date, Section 5.12(b) will be deemed to
be amended in its entirety, automatically and without further action, as follows:




     “(b) Rights of Class B Units. Prior to the Conversion Effective Date (or the later date
specified in this Section 5.12(b)):




         (i) Allocations. Except as otherwise provided in this Agreement, all items of
Partnership income, gain, loss, deduction and credit shall be allocated to the Class B Units
to the same extent as such items would be so allocated if such Class B Units were Common
Units that were then Outstanding.




         (ii) Distributions of Available Cash from Operating Surplus During Subordination
Period. Notwithstanding anything to the contrary in Section 6.4(a), Unitholders holding
Class B Units shall receive distributions per Unit pursuant to Section 6.4(a) equal to 110%
of the distribution per Unit received by Unitholders holding Common Units pursuant to
Section 6.4(a); provided that:




     (A) Unitholders holding Class B Units shall not receive any distribution
pursuant to Section 6.4(a)(i) or Section 6.4(a)(ii); and




     (B) following any distribution pursuant to Section 6.4(a)(ii), and prior to any
distribution pursuant to Section 6.4(a)(iii), Available Cash shall be distributed
(x) 98% to the Unitholders holding Class B Units, Pro Rata, and 2% to the General
Partner, until there has been distributed in respect of each Class B Unit then
Outstanding an amount equal to 110% of the Minimum Quarterly Distribution for such
Quarter (provided, further, that the portion of such



49









 






distribution attributable to
the additional 10% above the Minimum Quarterly Distribution shall be pro rated in
the Quarter in which the Class B Distribution Increase Date occurs); and (y) then,
98% to the Unitholders holding Class B
Units, Pro Rata, and 2% to the General Partner, until there has been
distributed in respect of each Class B Unit then Outstanding an amount equal to the
Cumulative Class B Unit Arrearage, if any, existing with respect to such Quarter.




     (iii) Distributions of Available Cash from Operating Surplus After Subordination
Period. Notwithstanding anything to the contrary in Section 6.4(b), Unitholders holding
Class B Units shall receive distributions per Unit pursuant to Section 6.4(b) equal to 110%
of the distribution per Unit received by other Unitholders pursuant to Section 6.4(b);
provided, that:




     (A) Unitholders holding Class B Units shall not receive any distributions
pursuant to Section 6.4(b)(i); and




     (B) following any distribution pursuant to Section 6.4(b)(i) (subject to
Section 5.12(b)(iii)(A)) and prior to any distribution pursuant to Section
6.4(b)(ii), Available Cash shall be distributed 98% to the Unitholders holding Class
B Units, Pro Rata, and 2% to the General Partner, until there has been distributed
in respect of each Class B Unit then Outstanding an amount equal to 110% of the
Minimum Quarterly Distribution for such Quarter.




     (iv) Allocation of Net Termination Gain to Class B Unitholders. Notwithstanding
anything to the contrary in Section 6.1(c)(i), Unitholders holding Class B Units shall be
allocated Net Termination Gain in accordance with Section 6.1(c)(i); provided, that:




     (A) Unitholders holding Class B Units shall not receive any allocation pursuant
to Section 6.1(c)(i)(B) or Section 6.1(c)(i)(C);




     (B) following any allocation made pursuant to Section 6.1(c)(i)(B) and prior to
any allocation made pursuant to Section 6.1(c)(i)(C), any remaining Net Termination
Gain shall be allocated 98% to all Unitholders holding Class B Units, Pro Rata, and
2% to the General Partner, until the Capital Account in respect of each Class B Unit
then Outstanding is equal to the sum of (1) its Unrecovered Capital, determined for
the taxable year (or portion thereof) to which this allocation of gain relates, plus
(2) 110% of the Minimum Quarterly Distribution for the Quarter during which the
Liquidation Date occurs, reduced by any distribution pursuant to Section
5.12(b)(ii)(B)(x) with respect to such Class B Unit for such Quarter, plus (3) any
then existing Cumulative Class B Unit Arrearage;




     (C) the amount allocated to Unitholders holding Class B Units pursuant to
Section 6.1(c)(i)(D), Section 6.1(c)(i)(E), Section 6.1(c)(i)(F) and Section
6.1(c)(i)(G) shall be the amount required to make the Per Unit Capital



50









 






Amount of
each Class B Unit equal to 110% of the Per Unit Capital Amount of a Common Unit.




     (v) Allocation of Net Termination Loss to Class B Unitholders. Notwithstanding
anything to the contrary in Section 6.1(c)(ii), with respect to allocations made in
accordance with Section 6.1(c)(ii), Unitholders holding Class B Units shall be allocated Net
Termination Loss in accordance with Section 6.1(c)(ii)(B) in the same manner as Unitholders
holding Common Units.




     (vi) Elimination of Cumulative Class B Unit Arrearages Upon Conversion; Excess
Payments. If the Conversion Effective Date occurs after the Class B Distribution Increase
Date, on the Conversion Effective Date (or the later date specified in Section
5.12(b)(vi)(B) below):




     (A) if a Cumulative Class B Unit Arrearage exists on the Conversion Effective
Date, Available Cash shall be distributed 98% to the Unitholders holding Class B
Units, Pro Rata, and 2% to the General Partner, until there has been distributed in
respect of each Class B Unit then Outstanding an amount equal to the Cumulative
Class B Unit Arrearage as of the Conversion Effective Date. This distribution shall
not be deemed a distribution on a Common Unit, but the satisfaction of prior
entitlements of the holders of Class B Units as of the Conversion Effective Date.
For the taxable year in which such distribution is made, if not previously
allocated, each Person receiving such cash distribution shall be allocated items of
gross income in an amount equal to such distribution as provided in Section
6.1(d)(iii)(A); and




     (B) for the Quarter in which such conversion occurs, concurrently with the
distribution of Available Cash in respect of such Quarter in accordance with Section
6.4 hereof (subject to this Section 5.12), a distribution shall be paid to each
holder of record of Class B Units as of the Conversion Effective Date, with the
amount of such distribution for each such Class B Unit to be equal to the product of
(a) 10% of the amount to be distributed in respect of such Quarter to each Common
Unit times (b) a fraction, of which (I) the numerator is the number of days in such
Quarter up to but excluding the Conversion Effective Date and (II) the denominator
is the total number of days in such Quarter (such amount, the “Excess Payment”).
For the taxable year in which an Excess Payment is made, if not previously
allocated, each holder of a Class B Unit shall be allocated items of gross income in
an amount equal to the Excess Payment distributed to it as provided in Section
6.1(d)(iii)(A). For the avoidance of doubt, each Common Unit issued upon conversion
of a Class B Unit shall be entitled to receive the full distribution payable to the
holder of a Common Unit concurrently with the distribution of such Excess Payment.”



     (h) Surrender of Certificates. Upon receipt of the Conversion Approval in accordance with
Section 5.12(f) or a change in rules of the National Securities Exchange as described in Section
5.12(i), the General Partner shall give the holders of the Class B Units



51









 







prompt notice of such
Conversion Approval or change in rules and, subject to the requirements
of Section 6.7(c), each holder of Class B Units shall promptly surrender the Class B Unit
Certificates therefor, duly endorsed, at the office of the General Partner. In the case of any
such conversion, the Partnership shall, as soon as practicable thereafter, issue and deliver at
such office to such holder of Class B Units one or more Common Unit Certificates, registered in the
name of such holder, for the number of Common Units to which such holder shall be entitled. Such
conversion shall be deemed to have been made as of the Conversion Approval Date or, in the case of
Section 5.12(i), the date of the effectiveness of such rule change (the “Conversion Effective
Date”), and the Person entitled to receive the Common Units issuable upon such conversion shall be
treated for all purposes as the record holder of such Common Units as of such date.



     (i) Change in Rules of National Securities Exchange. If at any time (i) the rules of the
National Securities Exchange on which the Common Units are listed or admitted to trading or the
staff interpretations of such rules are changed or (ii) facts or circumstances arise so that no
vote or consent of Unitholders is required as a condition to the listing or admission to trading of
the Common Units that would be issued upon any conversion of any Class B Units into Common Units as
provided in Section 5.12(f), the terms of such Class B Units will be changed so that each Class B
Unit is converted (without further action or any vote of any Unitholders other than compliance with
Section 5.12(h)) into one Common Unit (subject to appropriate adjustment in the event of any
split-up, combination or similar event affecting the Common Units that occurs prior to the
conversion of the Class B Units) and, immediately thereafter, none of the Class B Units shall be
Outstanding.



ARTICLE VI




ALLOCATIONS AND DISTRIBUTIONS




Section 6.1 Allocations for Capital Account Purposes.




     For purposes of maintaining the Capital Accounts and in determining the rights of the Partners
among themselves, the Partnership’s items of income, gain, loss and deduction (computed in
accordance with Section 5.5(b)) shall be allocated among the Partners in each taxable year (or
portion thereof) as provided herein below.



     (a) Net Income. After giving effect to the special allocations set forth in Section 6.1(d),
Net Income for each taxable year and all items of income, gain, loss and deduction taken into
account in computing Net Income for such taxable year shall be allocated as follows:




     (i) First, 100% to the General Partner, in an amount equal to the aggregate Net Losses
allocated to the General Partner pursuant to Section 6.1(b)(iii) for all previous taxable
years until the aggregate Net Income allocated to the General Partner pursuant to this
Section 6.1(a)(i) for the current taxable year and all previous taxable years is equal to
the aggregate Net Losses allocated to the General Partner pursuant to Section 6.1(b)(iii)
for all previous taxable years;



52









 






     (ii) Second, 2% to the General Partner, in an amount equal to the aggregate Net Losses
allocated to the General Partner pursuant to Section 6.1(b)(ii) for all previous taxable
years and 98% to the Unitholders, Pro Rata, until the aggregate Net Income allocated to such
Partners pursuant to this Section 6.1(a)(ii) for the current taxable year and all previous
taxable years is equal to the aggregate Net Losses allocated to such Partners pursuant to
Section 6.1(b)(ii) for all previous taxable years; and




     (iii) Third, 2% to the General Partner, and 98% to the Unitholders, Pro Rata.



     (b) Net Losses. After giving effect to the special allocations set forth in Section 6.1(d),
Net Losses for each taxable period and all items of income, gain, loss and deduction taken into
account in computing Net Losses for such taxable period shall be allocated as follows:



     (i) First, 2% to the General Partner, and 98% to the Unitholders, Pro Rata, until the
aggregate Net Losses allocated pursuant to this Section 6.1(b)(i) for the current taxable
year and all previous taxable years is equal to the aggregate Net Income allocated to such
Partners pursuant to Section 6.1(a)(iii) for all previous taxable years, provided that the
Net Losses shall not be allocated pursuant to this Section 6.1(b)(i) to the extent that such
allocation would cause any Unitholder to have a deficit balance in its Adjusted Capital
Account at the end of such taxable year (or increase any existing deficit balance in its
Adjusted Capital Account);



     (ii) Second, 2% to the General Partner, and 98% to the Unitholders, Pro Rata; provided,
that Net Losses shall not be allocated pursuant to this Section 6.1(b)(ii) to the extent
that such allocation would cause any Unitholder to have a deficit balance in its Adjusted
Capital Account at the end of such taxable year (or increase any existing deficit balance in
its Adjusted Capital Account);



     (iii) Third, the balance, if any, 100% to the General Partner.



     (c) Net Termination Gains and Losses. After giving effect to the special allocations set forth
in Section 6.1(d), all items of income, gain, loss and deduction taken into account in computing
Net Termination Gain or Net Termination Loss for such taxable period shall be allocated in the same
manner as such Net Termination Gain or Net Termination Loss is allocated hereunder. All allocations
under this Section 6.1(c) shall be made after Capital Account balances have been adjusted by all
other allocations provided under this Section 6.1 and after all distributions of Available Cash
provided under Sections 6.4 and 6.5 have been made; provided, however, that solely for purposes of
this Section 6.1(c), Capital Accounts shall not be adjusted for distributions made pursuant to
Section 12.4.




     (i) If a Net Termination Gain is recognized (or deemed recognized pursuant to Section
5.5(d)), such Net Termination Gain shall be allocated among the Partners in the following
manner (and the Capital Accounts of the Partners shall be increased by the
amount so allocated in each of the following subclauses, in the order listed, before an
allocation is made pursuant to the next succeeding subclause):



53









 






     (A) First, to each Partner having a deficit balance in its Capital Account, in
the proportion that such deficit balance bears to the total deficit balances in the
Capital Accounts of all Partners, until each such Partner has been allocated Net
Termination Gain equal to any such deficit balance in its Capital Account;




     (B) Second, 98% to all Unitholders holding Common Units, Pro Rata, and 2% to
the General Partner, until the Capital Account in respect of each Common Unit then
Outstanding is equal to the sum of (1) its Unrecovered Capital plus (2) the Minimum
Quarterly Distribution for the Quarter during which the Liquidation Date occurs,
reduced by any distribution pursuant to Section 6.4(a)(i) or (b)(i) with respect to
such Common Unit for such Quarter (the amount determined pursuant to this clause (2)
is hereinafter defined as the “Unpaid MQD”) plus (3) any then existing Cumulative
Common Unit Arrearage;




     (C) Third, if such Net Termination Gain is recognized (or is deemed to be
recognized) prior to the expiration of the Subordination Period, 98% to all
Unitholders holding Subordinated Units, Pro Rata, and 2% to the General Partner,
until the Capital Account in respect of each Subordinated Unit then Outstanding
equals the sum of (1) its Unrecovered Capital, determined for the taxable year (or
portion thereof) to which this allocation of gain relates, plus (2) the Minimum
Quarterly Distribution for the Quarter during which the Liquidation Date occurs,
reduced by any distribution pursuant to Section 6.4(a)(iii) with respect to such
Subordinated Unit for such Quarter;




     (D) Fourth, 98% to all Unitholders, Pro Rata, and 2% to the General Partner,
until the Capital Account in respect of each Common Unit then Outstanding is equal
to the sum of (1) its Unrecovered Capital, plus (2) the Unpaid MQD, plus (3) any
then existing Cumulative Common Unit Arrearage, plus (4) the excess of (aa) the
First Target Distribution less the Minimum Quarterly Distribution for each Quarter
of the Partnership’s existence over (bb) the cumulative per Unit amount of any
distributions of Available Cash that is deemed to be Operating Surplus made pursuant
to Sections 6.4(a)(iv) and 6.4(b)(ii) (the sum of (1) plus (2) plus (3) plus (4) is
hereinafter defined as the “First Liquidation Target Amount”);




     (E) Fifth, 85% to all Unitholders, Pro Rata, 13% to the holders of the
Incentive Distribution Rights, Pro Rata, and 2% to the General Partner, until the
Capital Account in respect of each Common Unit then Outstanding is equal to the sum
of (1) the First Liquidation Target Amount, plus (2) the excess of (aa) the Second
Target Distribution less the First Target Distribution for each Quarter of
the Partnership’s existence over (bb) the cumulative per Unit amount of any
distributions of Available Cash that is deemed to be Operating Surplus made pursuant
to Sections 6.4(a)(v) and 6.4(b)(iii) (the sum of (1) plus (2) is hereinafter
defined as the “Second Liquidation Target Amount”);



54









 






     (F) Sixth, 75% to all Unitholders, Pro Rata, 23% to the holders of the
Incentive Distribution Rights, Pro Rata, and 2% to the General Partner, until the
Capital Account in respect of each Common Unit then Outstanding is equal to the sum
of (1) the Second Liquidation Target Amount, plus (2) the excess of (aa) the Third
Target Distribution less the Second Target Distribution for each Quarter of the
Partnership’s existence over (bb) the cumulative per Unit amount of any
distributions of Available Cash that is deemed to be Operating Surplus made pursuant
to Sections 6.4(a)(vi)and 6.4(b)(iv) (the sum of (1) plus (2) is hereinafter defined
as the “Third Liquidation Target Amount”); and




     (G) Finally, any remaining amount 50% to all Unitholders, Pro Rata, 48% to the
holders of the Incentive Distribution Rights, Pro Rata, and 2% to the General
Partner.




     (ii) If a Net Termination Loss is recognized (or deemed recognized pursuant to Section
5.5(d)), such Net Termination Loss shall be allocated among the Partners in the following
manner:




     (A) First, if such Net Termination Loss is recognized (or is deemed to be
recognized) prior to the conversion of the last Outstanding Subordinated Unit, 98%
to the Unitholders holding Subordinated Units, Pro Rata, and 2% to the General
Partner, until the Capital Account in respect of each Subordinated Unit then
Outstanding has been reduced to zero;




     (B) Second, 98% to all Unitholders holding Common Units, Pro Rata, and 2% to
the General Partner, until the Capital Account in respect of each Common Unit then
Outstanding has been reduced to zero; and




     (C) Third, the balance, if any, 100% to the General Partner.



     (d) Special Allocations. Notwithstanding any other provision of this Section 6.1, the
following special allocations shall be made for such taxable period:




     (i) Partnership Minimum Gain Chargeback. Notwithstanding any other provision of this
Section 6.1, if there is a net decrease in Partnership Minimum Gain during any Partnership
taxable period, each Partner shall be allocated items of Partnership income and gain for
such period (and, if necessary, subsequent periods) in the manner and amounts provided in
Treasury Regulation Sections 1.704-2(f)(6), 1.704-2(g)(2) and 1.704-2(j)(2)(i), or any
successor provision. For purposes of this Section 6.1(d), each Partner’s Adjusted Capital
Account balance shall be determined, and
the allocation of income or gain required hereunder shall be effected, prior to the
application of any other allocations pursuant to this Section 6.1(d) with respect to such
taxable period (other than an allocation pursuant to Sections 6.1(d)(vi) and 6.1(d)(vii)).
This Section 6.1(d)(i) is intended to comply with the Partnership Minimum Gain chargeback
requirement in Treasury Regulation Section 1.704-2(f) and shall be interpreted consistently
therewith.



55









 






     (ii) Chargeback of Partner Nonrecourse Debt Minimum Gain. Notwithstanding the other
provisions of this Section 6.1 (other than Section 6.1(d)(i)), except as provided in
Treasury Regulation Section 1.704-2(i)(4), if there is a net decrease in Partner Nonrecourse
Debt Minimum Gain during any Partnership taxable period, any Partner with a share of Partner
Nonrecourse Debt Minimum Gain at the beginning of such taxable period shall be allocated
items of Partnership income and gain for such period (and, if necessary, subsequent periods)
in the manner and amounts provided in Treasury Regulation Sections 1.704-2(i)(4) and
1.704-2(j)(2)(ii), or any successor provisions. For purposes of this Section 6.1(d), each
Partner’s Adjusted Capital Account balance shall be determined, and the allocation of income
or gain required hereunder shall be effected, prior to the application of any other
allocations pursuant to this Section 6.1(d), other than Section 6.1(d)(i) and other than an
allocation pursuant to Sections 6.1(d)(vi) and 6.1(d)(vii), with respect to such taxable
period. This Section 6.1(d)(ii) is intended to comply with the chargeback of items of income
and gain requirement in Treasury Regulation Section 1.704-2(i)(4) and shall be interpreted
consistently therewith.




     (iii) Priority Allocations.




     (A) If the amount of cash or the Net Agreed Value of any property distributed
(except cash or property distributed pursuant to Section 12.4) to any Unitholder
with respect to its Units for a taxable year is greater (on a per Unit basis) than
the amount of cash or the Net Agreed Value of property distributed to the other
Unitholders with respect to their Units (on a per Unit basis), then (1) each
Unitholder receiving such greater cash or property distribution shall be allocated
gross income in an amount equal to the product of (aa) the amount by which the
distribution (on a per Unit basis) to such Unitholder exceeds the distribution (on a
per Unit basis) to the Unitholders receiving the smallest distribution and (bb) the
number of Units owned by the Unitholder receiving the greater distribution; and (2)
the General Partner shall be allocated gross income in an aggregate amount equal to
2/98ths of the sum of the amounts allocated in clause (1) above.




     (B) After the application of Section 6.1(d)(iii)(A), all or any portion of the
remaining items of Partnership gross income or gain for the taxable period, if any,
shall be allocated 100% to the holders of Incentive Distribution Rights, Pro Rata,
until the aggregate amount of such items allocated to the holders of
Incentive Distribution Rights pursuant to this paragraph 6.1(d)(iii)(B) for the
current taxable year and all previous taxable years is equal to the cumulative
amount of all Incentive Distributions made to the holders of Incentive Distribution
Rights from the Closing Date to a date 45 days after the end of the current taxable
year.




     (iv) Qualified Income Offset. In the event any Partner unexpectedly receives any
adjustments, allocations or distributions described in Treasury Regulation Sections
1.704-1(b)(2)(ii)(d)(4), 1.704-1(b)(2)(ii)(d)(5), or 1.704-1(b)(2)(ii)(d)(6), items



56









 






of
Partnership income and gain shall be specially allocated to such Partner in an amount and
manner sufficient to eliminate, to the extent required by the Treasury Regulations
promulgated under Section 704(b) of the Code, the deficit balance, if any, in its Adjusted
Capital Account created by such adjustments, allocations or distributions as quickly as
possible unless such deficit balance is otherwise eliminated pursuant to Section 6.1(d)(i)
or (ii).




     (v) Gross Income Allocations. In the event any Partner has a deficit balance in its
Capital Account at the end of any Partnership taxable period in excess of the sum of (A) the
amount such Partner is required to restore pursuant to the provisions of this Agreement and
(B) the amount such Partner is deemed obligated to restore pursuant to Treasury Regulation
Sections 1.704-2(g) and 1.704-2(i)(5), such Partner shall be specially allocated items of
Partnership gross income and gain in the amount of such excess as quickly as possible;
provided, that an allocation pursuant to this Section 6.1(d)(v) shall be made only if and to
the extent that such Partner would have a deficit balance in its Capital Account as adjusted
after all other allocations provided for in this Section 6.1 have been tentatively made as
if this Section 6.1(d)(v) were not in this Agreement.




     (vi) Nonrecourse Deductions. Nonrecourse Deductions for any taxable period shall be
allocated to the Partners in accordance with their respective Percentage Interests. If the
General Partner determines in its good faith discretion that the Partnership’s Nonrecourse
Deductions must be allocated in a different ratio to satisfy the safe harbor requirements of
the Treasury Regulations promulgated under Section 704(b) of the Code, the General Partner
is authorized, upon notice to the other Partners, to revise the prescribed ratio to the
numerically closest ratio that does satisfy such requirements.




     (vii) Partner Nonrecourse Deductions. Partner Nonrecourse Deductions for any taxable
period shall be allocated 100% to the Partner that bears the Economic Risk of Loss with
respect to the Partner Nonrecourse Debt to which such Partner Nonrecourse Deductions are
attributable in accordance with Treasury Regulation Section 1.704-2(i). If more than one
Partner bears the Economic Risk of Loss with respect to a Partner Nonrecourse Debt, such
Partner Nonrecourse Deductions attributable thereto shall be allocated between or among such
Partners in accordance with the ratios in which they share such Economic Risk of Loss.




     (viii) Nonrecourse Liabilities. For purposes of Treasury Regulation Section
1.752-3(a)(3), the Partners agree that Nonrecourse Liabilities of the Partnership in excess
of the sum of (A) the amount of Partnership Minimum Gain and (B) the total amount of
Nonrecourse Built-in Gain shall be allocated among the Partners in accordance with their
respective Percentage Interests.




     (ix) Code Section 754 Adjustments. To the extent an adjustment to the adjusted tax
basis of any Partnership asset pursuant to Section 734(b) or 743(c) of the Code is required,
pursuant to Treasury Regulation Section 1.704-1(b)(2)(iv)(m), to be taken into account in
determining Capital Accounts, the amount of such adjustment to the



57









 






Capital Accounts shall be
treated as an item of gain (if the adjustment increases the basis of the asset) or loss (if
the adjustment decreases such basis), and such item of gain or loss shall be specially
allocated to the Partners in a manner consistent with the manner in which their Capital
Accounts are required to be adjusted pursuant to such Section of the Treasury Regulations.




     (x) Economic Uniformity.




     (A) At the election of the General Partner with respect to any taxable period
ending upon, or after, the termination of the Subordination Period, all or a portion
of the remaining items of Partnership gross income or gain for such taxable period,
after taking into account allocations pursuant to Section 6.1(d)(iii), shall be
allocated 100% to each Partner holding Subordinated Units that are Outstanding as of
the termination of the Subordination Period (“Final Subordinated Units”) in the
proportion of the number of Final Subordinated Units held by such Partner to the
total number of Final Subordinated Units then Outstanding, until each such Partner
has been allocated an amount of gross income or gain which increases the Capital
Account maintained with respect to such Final Subordinated Units to an amount equal
to the product of (A) the number of Final Subordinated Units held by such Partner
and (B) the Per Unit Capital Amount for a Common Unit. The purpose of this
allocation is to establish uniformity between the Capital Accounts underlying Final
Subordinated Units and the Capital Accounts underlying Common Units held by Persons
other than the General Partner and its Affiliates immediately prior to the
conversion of such Final Subordinated Units into Common Units. This allocation
method for establishing such economic uniformity will only be available to the
General Partner if the method for allocating the Capital Account maintained with
respect to the Subordinated Units between the transferred and retained Subordinated
Units pursuant to Section 5.5(c)(ii) does not otherwise provide such economic
uniformity to the Final Subordinated Units.




     (B) At the election of the General Partner with respect to any taxable period
ending upon, or after, the conversion of the Class B Units pursuant to Section 5.12,
all or a portion of the remaining items of Partnership gross income
or gain for such taxable period, after taking into account allocations pursuant
to Section 6.1(d)(iii) and Section 6.1(d)(x)(A), shall be allocated 100% to the
Partners holding such Common Units resulting from the conversion pursuant to Section
5.12 in the proportion of the number of converted Class B Units held by such Partner
to the total number of converted Class B Units then Outstanding, until each such
Partner has been allocated an amount of gross income or gain which increases the
Capital Account maintained with respect to such converted Class B Units to an amount
equal to the product of (A) the number of converted Class B Units held by such
Partner and (B) the Per Unit Capital Amount for a Common Unit. The purpose of this
allocation is to establish uniformity between the Capital Accounts underlying
converted Class B Units and the Capital Accounts underlying Common Units held by
Persons other than the General



58









 






Partner and its Affiliates immediately prior to the
conversion of such converted Class B Units into Common Units.




     (xi) Curative Allocation.




     (A) Notwithstanding any other provision of this Section 6.1, other than the
Required Allocations, the Required Allocations shall be taken into account in making
the Agreed Allocations so that, to the extent possible, the net amount of items of
income, gain, loss and deduction allocated to each Partner pursuant to the Required
Allocations and the Agreed Allocations, together, shall be equal to the net amount
of such items that would have been allocated to each such Partner under the Agreed
Allocations had the Required Allocations and the related Curative Allocation not
otherwise been provided in this Section 6.1. Notwithstanding the preceding sentence,
Required Allocations relating to (1) Nonrecourse Deductions shall not be taken into
account except to the extent that there has been a decrease in Partnership Minimum
Gain and (2) Partner Nonrecourse Deductions shall not be taken into account except
to the extent that there has been a decrease in Partner Nonrecourse Debt Minimum
Gain. Allocations pursuant to this Section 6.1(d)(xi)(A) shall only be made with
respect to Required Allocations to the extent the General Partner reasonably
determines that such allocations will otherwise be inconsistent with the economic
agreement among the Partners. Further, allocations pursuant to this Section
6.1(d)(xi)(A) shall be deferred with respect to allocations pursuant to clauses (1)
and (2) hereof to the extent the General Partner reasonably determines that such
allocations are likely to be offset by subsequent Required Allocations.




     (B) The General Partner shall have reasonable discretion, with respect to each
taxable period, to (1) apply the provisions of Section 6.1(d)(xi)(A) in whatever
order is most likely to minimize the economic distortions that might otherwise
result from the Required Allocations, and (2) divide all allocations pursuant to
Section 6.1(d)(xi)(A) among the Partners in a manner that is likely to minimize such
economic distortions.




     (xii) Corrective Allocations. In the event of any allocation of Additional Book Basis
Derivative Items or any Book-Down Event or any recognition of a Net Termination Loss, the
following rules shall apply:




     (A) In the case of any allocation of Additional Book Basis Derivative Items
(other than an allocation of Unrealized Gain or Unrealized Loss under Section 5.5(d)
hereof), the General Partner shall allocate additional items of gross income and
gain away from the holders of Incentive Distribution Rights to the Unitholders and
the General Partner, or additional items of deduction and loss away from the
Unitholders and the General Partner to the holders of Incentive Distribution Rights,
to the extent that the Additional Book Basis Derivative Items allocated to the
Unitholders or the General Partner exceed their Share of Additional Book Basis
Derivative Items. For this purpose, the Unitholders and the



59









 






General Partner shall be
treated as being allocated Additional Book Basis Derivative Items to the extent that
such Additional Book Basis Derivative Items have reduced the amount of income that
would otherwise have been allocated to the Unitholders or the General Partner under
the Partnership Agreement (e.g., Additional Book Basis Derivative Items taken into
account in computing cost of goods sold would reduce the amount of book income
otherwise available for allocation among the Partners). Any allocation made pursuant
to this Section 6.1(d)(xii)(A) shall be made after all of the other Agreed
Allocations have been made as if this Section 6.1(d)(xii) were not in this Agreement
and, to the extent necessary, shall require the reallocation of items that have been
allocated pursuant to such other Agreed Allocations.




     (B) In the case of any negative adjustments to the Capital Accounts of the
Partners resulting from a Book-Down Event or from the recognition of a Net
Termination Loss, such negative adjustment (1) shall first be allocated, to the
extent of the Aggregate Remaining Net Positive Adjustments, in such a manner, as
reasonably determined by the General Partner, that to the extent possible the
aggregate Capital Accounts of the Partners will equal the amount which would have
been the Capital Account balance of the Partners if no prior Book-Up Events had
occurred, and (2) any negative adjustment in excess of the Aggregate Remaining Net
Positive Adjustments shall be allocated pursuant to Section 6.1(c) hereof.




     (C) In making the allocations required under this Section 6.1(d)(xii), the
General Partner, in its sole discretion, may apply whatever conventions or other
methodology it deems reasonable to satisfy the purpose of this Section 6.1(d)(xii).



Section 6.2 Allocations for Tax Purposes.




     (a) Except as otherwise provided herein, for federal income tax purposes, each item of income,
gain, loss and deduction shall be allocated among the Partners in the same manner as its
correlative item of “book” income, gain, loss or deduction is allocated pursuant to Section 6.1.



     (b) In an attempt to eliminate Book-Tax Disparities attributable to a Contributed Property or
Adjusted Property, items of income, gain, loss, depreciation, amortization and cost recovery
deductions shall be allocated for federal income tax purposes among the Partners as follows:




     (i) (A) In the case of a Contributed Property, such items attributable thereto shall be
allocated among the Partners in the manner provided under Section 704(c) of the Code that
takes into account the variation between the Agreed Value of such property and its adjusted
basis at the time of contribution; and (B) any item of Residual Gain or Residual Loss
attributable to a Contributed Property shall be allocated among the Partners in the same
manner as its correlative item of “book” gain or loss is allocated pursuant to Section 6.1.



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     (ii) (A) In the case of an Adjusted Property, such items shall (1) first, be allocated
among the Partners in a manner consistent with the principles of Section 704(c) of the Code
to take into account the Unrealized Gain or Unrealized Loss attributable to such property
and the allocations thereof pursuant to Section 5.5(d)(i) or 5.5(d)(ii), and (2) second, in
the event such property was originally a Contributed Property, be allocated among the
Partners in a manner consistent with Section 6.2(b)(i)(A); and (B) any item of Residual Gain
or Residual Loss attributable to an Adjusted Property shall be allocated among the Partners
in the same manner as its correlative item of “book” gain or loss is allocated pursuant to
Section 6.1.




     (iii) The General Partner shall apply the principles of Treasury Regulation Section
1.704-3(d) to eliminate Book-Tax Disparities.



     (c) For the proper administration of the Partnership and for the preservation of uniformity of
the Limited Partner Interests (or any class or classes thereof), the General Partner shall have
sole discretion to (i) adopt such conventions as it deems appropriate in determining the amount of
depreciation, amortization and cost recovery deductions; (ii) make special allocations for federal
income tax purposes of income (including, without limitation, gross income) or deductions; and
(iii) amend the provisions of this Agreement as appropriate (x) to reflect the proposal or
promulgation of Treasury Regulations under Section 704(b) or Section 704(c) of the Code or (y)
otherwise to preserve or achieve uniformity of the Limited Partner Interests (or any class or
classes thereof). The General Partner may adopt such conventions, make such allocations and make
such amendments to this Agreement as provided in this Section 6.2(c) only if such conventions,
allocations or amendments would not have a material adverse effect on the Partners, the holders of
any class or classes of Limited Partner
Interests issued and Outstanding or the Partnership, and if such allocations are consistent
with the principles of Section 704 of the Code.



     (d) The General Partner in its discretion may determine to depreciate or amortize the portion
of an adjustment under Section 743(b) of the Code attributable to unrealized appreciation in any
Adjusted Property (to the extent of the unamortized Book-Tax Disparity) using a predetermined rate
derived from the depreciation or amortization method and useful life applied to the Partnership’s
common basis of such property, despite any inconsistency of such approach with Treasury Regulation
Section 1.167(c)-l(a)(6) or any successor regulations thereto. If the General Partner determines
that such reporting position cannot reasonably be taken, the General Partner may adopt depreciation
and amortization conventions under which all purchasers acquiring Limited Partner Interests in the
same month would receive depreciation and amortization deductions, based upon the same applicable
rate as if they had purchased a direct interest in the Partnership’s property. If the General
Partner chooses not to utilize such aggregate method, the General Partner may use any other
reasonable depreciation and amortization conventions to preserve the uniformity of the intrinsic
tax characteristics of any Limited Partner Interests that would not have a material adverse effect
on the Limited Partners or the Record Holders of any class or classes of Limited Partner Interests.



     (e) Any gain allocated to the Partners upon the sale or other taxable disposition of any
Partnership asset shall, to the extent possible, after taking into account other required



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allocations of gain pursuant to this Section 6.2, be characterized as Recapture Income in the same
proportions and to the same extent as such Partners (or their predecessors in interest) have been
allocated any deductions directly or indirectly giving rise to the treatment of such gains as
Recapture Income.



     (f) All items of income, gain, loss, deduction and credit recognized by the Partnership for
federal income tax purposes and allocated to the Partners in accordance with the provisions hereof
shall be determined without regard to any election under Section 754 of the Code which may be made
by the Partnership; provided, however, that such allocations, once made, shall be adjusted as
necessary or appropriate to take into account those adjustments permitted or required by Sections
734 and 743 of the Code.



     (g) Each item of Partnership income, gain, loss and deduction shall for federal income tax
purposes, be determined on an annual basis and prorated on a monthly basis and shall be allocated
to the Partners as of the opening of the New York Stock Exchange on the first Business Day of each
month; provided, however, that (i) such items for the period beginning on the Closing Date and
ending on the last day of the month in which the Option Closing Date or the expiration of the
Over-Allotment Option occurs shall be allocated to the Partners as of the opening of the New York
Stock Exchange on the first Business Day of the next succeeding month; and provided, further, that
gain or loss on a sale or other disposition of any assets of the Partnership or any other
extraordinary item of income or loss realized and recognized other than in the ordinary course of
business, as determined by the General Partner in its sole discretion, shall be allocated to the
Partners as of the opening of the New York Stock Exchange on the first
Business Day of the month in which such gain or loss is recognized for federal income tax
purposes. The General Partner may revise, alter or otherwise modify such methods of allocation as
it determines necessary or appropriate in its sole discretion, to the extent permitted or required
by Section 706 of the Code and the regulations or rulings promulgated thereunder.



     (h) Allocations that would otherwise be made to a Limited Partner under the provisions of this
Article VI shall instead be made to the beneficial owner of Limited Partner Interests held by a
nominee in any case in which the nominee has furnished the identity of such owner to the
Partnership in accordance with Section 6031(c) of the Code or any other method acceptable to the
General Partner in its sole discretion.




			
	Section 6.3	 	Requirement and Characterization of Distributions; Distributions to Record
Holders.





     (a) Within 45 days following the end of each Quarter commencing with the Quarter ending on
December 31, 2002, an amount equal to 100% of Available Cash with respect to such Quarter shall,
subject to Section 17-607 of the Delaware Act, be distributed in accordance with this Article VI by
the Partnership to the Partners as of the Record Date selected by the General Partner in its
reasonable discretion. All amounts of Available Cash distributed by the Partnership on any date
from any source shall be deemed to be Operating Surplus until the sum of all amounts of Available
Cash theretofore distributed by the Partnership to the Partners pursuant to Section 6.4 equals the
Operating Surplus from the Closing Date through the close of the immediately preceding Quarter. Any
remaining amounts of Available Cash distributed by the



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Partnership on such date shall, except as
otherwise provided in Section 6.5, be deemed to be “Capital Surplus.” All distributions required to
be made under this Agreement shall be made subject to Section 17-607 of the Delaware Act.



     (b) Notwithstanding Section 6.3(a), in the event of the dissolution and liquidation of the
Partnership, all receipts received during or after the Quarter in which the Liquidation Date
occurs, other than from borrowings described in (a)(ii) of the definition of Available Cash, shall
be applied and distributed solely in accordance with, and subject to the terms and conditions of,
Section 12.4.



     (c) The General Partner shall have the discretion to treat taxes paid by the Partnership on
behalf of, or amounts withheld with respect to, all or less than all of the Partners, as a
distribution of Available Cash to such Partners.



     (d) Each distribution in respect of a Partnership Interest shall be paid by the Partnership,
directly or through the Transfer Agent or through any other Person or agent, only to the Record
Holder of such Partnership Interest as of the Record Date set for such distribution. Such payment
shall constitute full payment and satisfaction of the Partnership’s liability in respect of such
payment, regardless of any claim of any Person who may have an interest in such payment by reason
of an assignment or otherwise.



Section 6.4 Distributions of Available Cash from Operating Surplus.




     (a) During Subordination Period. Available Cash with respect to any Quarter within the
Subordination Period that is deemed to be Operating Surplus pursuant to the provisions of Section
6.3 or 6.5 shall, subject to Section 17-607 of the Delaware Act, be distributed as follows, except
as otherwise required by Section 5.6(b) in respect of additional Partnership Securities issued
pursuant thereto:




     (i) First, 98% to the Unitholders holding Common Units, Pro Rata, and 2% to the General
Partner, until there has been distributed in respect of each Common Unit then Outstanding an
amount equal to the Minimum Quarterly Distribution for such Quarter;




     (ii) Second, 98% to the Unitholders holding Common Units, Pro Rata, and 2% to the
General Partner, until there has been distributed in respect of each Common Unit then
Outstanding an amount equal to the Cumulative Common Unit Arrearage existing with respect to
such Quarter;




     (iii) Third, 98% to the Unitholders holding Subordinated Units, Pro Rata, and 2% to the
General Partner, until there has been distributed in respect of each Subordinated Unit then
Outstanding an amount equal to the Minimum Quarterly Distribution for such Quarter;




     (iv) Fourth, 98% to all Unitholders, Pro Rata, and 2% to the General Partner, until
there has been distributed in respect of each Unit then Outstanding an amount equal to the
excess of the First Target Distribution over the Minimum Quarterly Distribution for such
Quarter;



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     (v) Fifth, 85% to all Unitholders, Pro Rata, 13% to the holders of the Incentive
Distribution Rights, Pro Rata, and 2% to the General Partner, until there has been
distributed in respect of each Unit then Outstanding an amount equal to the excess of the
Second Target Distribution over the First Target Distribution for such Quarter;




     (vi) Sixth, 75% to all Unitholders, Pro Rata, 23% to the holders of the Incentive
Distribution Rights, Pro Rata, and 2% to the General Partner, until there has been
distributed in respect of each Unit then Outstanding an amount equal to the excess of the
Third Target Distribution over the Second Target Distribution for such Quarter; and




     (vii) Thereafter, 50% to all Unitholders, Pro Rata, 48% to the holders of the Incentive
Distribution Rights, Pro Rata, and 2% to the General Partner;


provided, however, if the Minimum Quarterly Distribution, the First Target Distribution, the Second
Target Distribution and the Third Target Distribution have been reduced to zero pursuant to the
second sentence of Section 6.6(a), the distribution of Available Cash that is deemed to be
Operating Surplus with respect to any Quarter will be made solely in accordance with Section
6.4(a)(vii).




     (b) After Subordination Period. Available Cash with respect to any Quarter after the
Subordination Period that is deemed to be Operating Surplus pursuant to the provisions of Section
6.3 or 6.5, subject to Section 17-607 of the Delaware Act, shall be distributed as follows, except
as otherwise required by Section 5.6(b) in respect of additional Partnership Securities issued
pursuant thereto:




     (i) First, 98% to all Unitholders, Pro Rata, and 2% to the General Partner, until there
has been distributed in respect of each Unit then Outstanding an amount equal to the Minimum
Quarterly Distribution for such Quarter;




     (ii) Second, 98% to all Unitholders, Pro Rata, and 2% to the General Partner, until
there has been distributed in respect of each Unit then Outstanding an amount equal to the
excess of the First Target Distribution over the Minimum Quarterly Distribution for such
Quarter;




     (iii) Third, 85% to all Unitholders, Pro Rata, 13% to the holders of the Incentive
Distribution Rights, Pro Rata, and 2% to the General Partner, until there has been
distributed in respect of each Unit then Outstanding an amount equal to the excess of the
Second Target Distribution over the First Target Distribution for such Quarter;




     (iv) Fourth, 75% to all Unitholders Pro Rata, 23% to the holders of the Incentive
Distribution Rights, Pro Rata, and 2% to the General Partner, until there has been
distributed in respect of each Unit then Outstanding an amount equal to the excess of the
Third Target Distribution over the Second Target Distribution for such Quarter; and



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     (v) Thereafter, 50% to all Unitholders, Pro Rata, 48% to the holders of the Incentive
Distribution Rights, Pro Rata, and 2% to the General Partner;


provided, however, if the Minimum Quarterly Distribution, the First Target Distribution, the Second
Target Distribution and the Third Target Distribution have been reduced to zero pursuant to the
second sentence of Section 6.6(a), the distribution of Available Cash that is deemed to be
Operating Surplus with respect to any Quarter will be made solely in accordance with Section
6.4(b)(v).




Section 6.5 Distributions of Available Cash from Capital Surplus.




     Available Cash that is deemed to be Capital Surplus pursuant to the provisions of Section
6.3(a) shall, subject to Section 17-607 of the Delaware Act, be distributed, unless the provisions
of Section 6.3 require otherwise, 98% to all Unitholders, Pro Rata, and 2% to the General Partner,
until a hypothetical holder of a Common Unit acquired on the Closing Date has received with respect
to such Common Unit, during the period since the Closing Date through
such date, distributions of Available Cash that are deemed to be Capital Surplus in an
aggregate amount equal to the Initial Unit Price. Available Cash that is deemed to be Capital
Surplus shall then be distributed 98% to all Unitholders holding Common Units, Pro Rata, and 2% to
the General Partner, until there has been distributed in respect of each Common Unit then
Outstanding an amount equal to the Cumulative Common Unit Arrearage. Available Cash that is deemed
to be Capital Surplus shall then be distributed 98% to all Unitholders holding Class B Units, Pro
Rata, and 2% to the General Partner, until there has been distributed in respect of each Class B
Unit then Outstanding an amount equal to the Cumulative Class B Unit Arrearage. Thereafter, all
Available Cash shall be distributed as if it were Operating Surplus and shall be distributed in
accordance with Section 6.4.



Section 6.6 Adjustment of Minimum Quarterly Distribution and Target Distribution Levels.




     (a) The Minimum Quarterly Distribution, First Target Distribution, Second Target Distribution,
Third Target Distribution, Common Unit Arrearages, Cumulative Common Unit Arrearages, Class B Unit
Arrearages and Cumulative Class B Unit Arrearages shall be proportionately adjusted in the event of
any distribution, combination or subdivision (whether effected by a distribution payable in Units
or otherwise) of Units or other Partnership Securities in accordance with Section 5.10. In the
event of a distribution of Available Cash that is deemed to be from Capital Surplus, the then
applicable Minimum Quarterly Distribution, First Target Distribution, Second Target Distribution
and Third Target Distribution, shall be adjusted proportionately downward to equal the product
obtained by multiplying the otherwise applicable Minimum Quarterly Distribution, First Target
Distribution, Second Target Distribution and Third Target Distribution, as the case may be, by a
fraction of which the numerator is the Unrecovered Capital of the Common Units immediately after
giving effect to such distribution and of which the denominator is the Unrecovered Capital of the
Common Units immediately prior to giving effect to such distribution.



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     (b) The Minimum Quarterly Distribution, First Target Distribution, Second Target Distribution
and Third Target Distribution, shall also be subject to adjustment pursuant to Section 6.9.




			
	Section 6.7	 	Special Provisions Relating to the Holders of Subordinated Units and Class B
Units.





     (a) Except with respect to the right to vote on or approve matters requiring the vote or
approval of a percentage of the holders of Outstanding Common Units and the right to participate in
allocations of income, gain, loss and deduction and distributions made with respect to Common
Units, the holder of a Subordinated Unit shall have all of the rights and obligations of a
Unitholder holding Common Units hereunder; provided, however, that immediately upon the conversion
of Subordinated Units into Common Units pursuant to Section 5.8, the Unitholder holding a
Subordinated Unit shall possess all of the rights and obligations of a Unitholder holding Common
Units hereunder, including the right to vote as a Common Unitholder and the
right to participate in allocations of income, gain, loss and deduction and distributions made
with respect to Common Units; provided, however, that such converted Subordinated Units shall
remain subject to the provisions of Sections 5.5(c)(ii), 6.1(d)(x) and 6.7(b).



     (b) The Unitholder holding a Subordinated Unit which has converted into a Common Unit pursuant
to Section 5.8 shall not be issued a Common Unit Certificate pursuant to Section 4.1, and shall not
be permitted to transfer its converted Subordinated Units to a Person which is not an Affiliate of
the holder until such time as the General Partner determines, based on advice of counsel, that a
converted Subordinated Unit should have, as a substantive matter, like intrinsic economic and
federal income tax characteristics, in all material respects, to the intrinsic economic and federal
income tax characteristics of an Initial Common Unit. In connection with the condition imposed by
this Section 6.7(b), the General Partner may take whatever reasonable steps are required to provide
economic uniformity to the converted Subordinated Units in preparation for a transfer of such
converted Subordinated Units, including the application of Sections 5.5(c)(ii) and 6.1(d)(x);
provided, however, that no such steps may be taken that would have a material adverse effect on the
Unitholders holding Common Units represented by Common Unit Certificates.



     (c) A Unitholder holding a Class B Unit that has converted into a Common Unit pursuant to
Section 5.12 shall not be issued a Common Unit Certificate pursuant to Section 4.1, and shall not
be permitted to transfer such Common Units until such time as the General Partner determines, based
on advice of counsel, that the converted Class B Unit should have, as a substantive matter, like
intrinsic economic and federal income tax characteristics of an Initial Common Unit. In connection
with the condition imposed by this Section 6.7(c), the General Partner shall take whatever steps
are required to provide economic uniformity to the converted Class B Units in preparation for a
transfer of such Units, including the application of Section 6.1(d)(x)(B); provided, however, that
no such steps may be taken that would have a material adverse effect on the Unitholders holding
Common Units represented by Common Unit Certificates.



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Section 6.8 Special Provisions Relating to the Holders of Incentive Distribution Rights.




     Notwithstanding anything to the contrary set forth in this Agreement, the holders of the
Incentive Distribution Rights (a) shall (i) possess the rights and obligations provided in this
Agreement with respect to a Limited Partner pursuant to Articles III and VII and (ii) have a
Capital Account as a Partner pursuant to Section 5.5 and all other provisions related thereto and
(b) shall not (i) be entitled to vote on any matters requiring the approval or vote of the holders
of Outstanding Units, (ii) be entitled to any distributions other than as provided in Sections
6.4(a)(v), (vi) and (vii), 6.4(b)(iii), (iv) and (v), and 12.4 or (iii) be allocated items of
income, gain, loss or deduction other than as specified in this Article VI.



Section 6.9 Entity-Level Taxation.




     If legislation is enacted or the interpretation of existing language is modified by the
relevant governmental authority which causes a Group Member to be treated as an association taxable
as a corporation or otherwise subjects a Group Member to entity-level taxation for federal, state
or local income tax purposes, the then applicable Minimum Quarterly Distribution, First Target
Distribution, Second Target Distribution and Third Target Distribution, shall be adjusted to equal
the product obtained by multiplying (a) the amount thereof by (b) one minus the sum of (i) the
highest marginal federal corporate (or other entity, as applicable) income tax rate of the Group
Member for the taxable year of the Group Member in which such Quarter occurs (expressed as a
percentage) plus (ii) the effective overall state and local income tax rate (expressed as a
percentage) applicable to the Group Member for the calendar year next preceding the calendar year
in which such Quarter occurs (after taking into account the benefit of any deduction allowable for
federal income tax purposes with respect to the payment of state and local income taxes), but only
to the extent of the increase in such rates resulting from such legislation or interpretation. Such
effective overall state and local income tax rate shall be determined for the taxable year next
preceding the first taxable year during which the Group Member is taxable for federal income tax
purposes as an association taxable as a corporation or is otherwise subject to entity-level
taxation by determining such rate as if the Group Member had been subject to such state and local
taxes during such preceding taxable year.



ARTICLE VII




MANAGEMENT AND OPERATION OF BUSINESS




Section 7.1 Management.




     (a) The General Partner shall conduct, direct and manage all activities of the Partnership.
Except as otherwise expressly provided in this Agreement, all management powers over the business
and affairs of the Partnership shall be exclusively vested in the General Partner, and no Limited
Partner or Assignee shall have any management power over the business and affairs of the
Partnership. In addition to the powers now or hereafter granted a general partner of a limited
partnership under applicable law or which are granted to the General Partner under any other
provision of this Agreement, the General Partner, subject to Section 7.3, shall have full



67









 







power and
authority to do all things and on such terms as it, in its sole discretion, may deem necessary or
appropriate to conduct the business of the Partnership, to exercise all powers set forth in Section
2.5 and to effectuate the purposes set forth in Section 2.4, including the following:




     (i) the making of any expenditures, the lending or borrowing of money, the assumption
or guarantee of, or other contracting for, indebtedness and other liabilities, the issuance
of evidences of indebtedness, including indebtedness that is convertible into Partnership
Securities, and the incurring of any other obligations;




     (ii) the making of tax, regulatory and other filings, or rendering of periodic or other
reports to governmental or other agencies having jurisdiction over the business or assets of
the Partnership;




     (iii) the acquisition, disposition, mortgage, pledge, encumbrance, hypothecation or
exchange of any or all of the assets of the Partnership or the merger or other combination
of the Partnership with or into another Person (the matters described in this clause (iii)
being subject, however, to any prior approval that may be required by Section 7.3);




     (iv) the use of the assets of the Partnership (including cash on hand) for any purpose
consistent with the terms of this Agreement, including the financing of the conduct of the
operations of the Partnership Group; subject to Section 7.6(a), the lending of funds to
other Persons (including other Group Members), the repayment or guarantee of obligations of
the Partnership Group and the making of capital contributions to any member of the
Partnership Group;




     (v) the negotiation, execution and performance of any contracts, conveyances or other
instruments (including instruments that limit the liability of the Partnership under
contractual arrangements to all or particular assets of the Partnership, with the other
party to the contract to have no recourse against the General Partner or its assets other
than its interest in the Partnership, even if same results in the terms of the transaction
being less favorable to the Partnership than would otherwise be the case);




     (vi) the distribution of Partnership cash;




     (vii) the selection and dismissal of employees (including employees having titles such
as “president,” “vice president,” “secretary” and “treasurer”) and agents, outside
attorneys, accountants, consultants and contractors and the determination of their
compensation and other terms of employment or hiring;




     (viii) the maintenance of such insurance for the benefit of the Partnership Group and
the Partners as it deems necessary or appropriate;




     (ix) the formation of, or acquisition of an interest in, and the contribution of
property and the making of loans to, any further limited or general partnerships, joint
ventures, corporations, limited liability companies or other
relationships (including the



68









 







acquisition of interests in, and the contributions of property to, any Group Member from
time to time) subject to the restrictions set forth in Section 2.4;




     (x) the control of any matters affecting the rights and obligations of the Partnership,
including the bringing and defending of actions at law or in equity and otherwise engaging
in the conduct of litigation and the incurring of legal expense and the settlement of claims
and litigation;




     (xi) the indemnification of any Person against liabilities and contingencies to the
extent permitted by law;




     (xii) the entering into of listing agreements with any National Securities Exchange and
the delisting of some or all of the Limited Partner Interests from, or requesting that
trading be suspended on, any such exchange (subject to any prior approval that may be
required under Section 4.8);




     (xiii) unless restricted or prohibited by Section 5.7, the purchase, sale or other
acquisition or disposition of Partnership Securities, or the issuance of additional options,
rights, warrants and appreciation rights relating to Partnership Securities; and




     (xiv) the undertaking of any action in connection with the Partnership’s participation
in any Group Member as a member or partner.



     (b) Notwithstanding any other provision of this Agreement, the Operating Company Agreement,
the Delaware Act or any applicable law, rule or regulation, each of the Partners and the Assignees
and each other Person who may acquire an interest in Partnership Securities hereby (i) approves,
ratifies and confirms the execution, delivery and performance by the parties thereto of the
Operating Company Agreement, any other limited liability company or partnership agreement of any
other Group Member, the Underwriting Agreement, the Omnibus Agreement, the Contribution Agreement
and the other agreements described in or filed as exhibits to the Registration Statement that are
related to the transactions contemplated by the Registration Statement; (ii) agrees that the
General Partner (on its own or through any officer of the Partnership) is authorized to execute,
deliver and perform the agreements referred to in clause (i) of this sentence and the other
agreements, acts, transactions and matters described in or contemplated by the Registration
Statement on behalf of the Partnership without any further act, approval or vote of the Partners or
the Assignees or the other Persons who may acquire an interest in Partnership Securities; and (iii)
agrees that the execution, delivery or performance by the General Partner, any Group Member or any
Affiliate of any of them, of this Agreement or any agreement authorized or permitted under this
Agreement (including the exercise by the General Partner or any Affiliate of the General Partner of
the rights accorded pursuant to Article XV), shall not constitute a breach by the General Partner
of any duty that the General Partner may owe the Partnership or the Limited Partners or any other
Persons under this Agreement (or any other agreements) or of any duty stated or implied by law or
equity.



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Section 7.2
Certificate of Limited Partnership.




     The General Partner has caused the Certificate of Limited Partnership to be filed with the Secretary of State of the State
of Delaware as required by the Delaware Act. The General Partner shall use all reasonable efforts to cause to be filed such other
certificates or documents as may be determined by the General Partner in its sole discretion to be reasonable and necessary or
appropriate for the formation, continuation, qualification and operation of a limited partnership (or a partnership in which the
limited partners have limited liability) in the State of Delaware or any other state in which the Partnership may elect to do
business or own property. To the extent that such action is determined by the General Partner in its sole discretion to be reasonable
and necessary or appropriate, the General Partner shall file amendments to and restatements of the Certificate of Limited Partnership
and do all things to maintain the Partnership as a limited partnership (or a partnership or other entity in which the limited
partners have limited liability) under the laws of the State of Delaware or of any other state in which the Partnership may elect to
do business or own property. Subject to the terms of Section 3.4(a), the General Partner shall not be required, before or after
filing, to deliver or mail a copy of the Certificate of Limited Partnership, any qualification document or any amendment thereto to
any Limited Partner.



Section 7.3
Restrictions on the General Partner’s Authority.




     (a) The General Partner may not, without written approval of the specific act by holders of all of the Outstanding
Limited Partner Interests or by other written instrument executed and delivered by holders of all of the Outstanding Limited Partner
Interests subsequent to the date of this Agreement, take any action in contravention of this Agreement, including, except as
otherwise provided in this Agreement, (i) committing any act that would make it impossible to carry on the ordinary business of the
Partnership; (ii) possessing Partnership property, or assigning any rights in specific Partnership property, for other than a
Partnership purpose; (iii) admitting a Person as a Partner; (iv) amending this Agreement in any manner; or (v) transferring its
interest as a general partner of the Partnership.



     (b) Except as provided in Articles XII and XIV, the General Partner may not sell, exchange or otherwise dispose of all
or substantially all of the Partnership’s assets in a single transaction or a series of related transactions (including by way of
merger, consolidation or other combination) or approve on behalf of the Partnership the sale, exchange or other disposition of all or
substantially all of the assets of the Operating Company and its Subsidiaries taken as a whole without the approval of holders of a
Unit Majority; provided however that this provision shall not preclude or limit the General Partner’s ability to mortgage, pledge,
hypothecate or grant a security interest in all or substantially all of the assets of the Partnership or the Operating Company and
shall not apply to any forced sale of any or all of the assets of the Partnership or the Operating Company pursuant to the
foreclosure of, or other realization upon, any such encumbrance. Without the approval of holders of a Unit Majority, the General
Partner shall not, on behalf of the Partnership, (i) consent to any amendment to the Operating Company Agreement or, except as
expressly permitted by Section 7.9(d), take any action permitted to be taken by a member of the Operating Company, in either case,
that would adversely affect the Limited Partners (including any particular class of Partnership Interests as compared to any other
class of Partnership Interests) in any material respect or (ii) except as permitted under Sections




70









 




4.6, 11.1 and 11.2, elect or cause the Partnership to elect a successor general partner
of the Partnership.





			
	Section 7.4	 	Reimbursement of the General Partner.





     (a) Except as provided in this Section 7.4 and elsewhere in this Agreement, the General
Partner shall not be compensated for its services as a general partner or managing member of any
Group Member.



     (b) The General Partner shall be reimbursed on a monthly basis, or such other reasonable basis
as the General Partner may determine in its sole discretion, for (i) all direct and indirect
expenses it incurs or payments it makes on behalf of the Partnership (including salary, bonus,
incentive compensation and other amounts paid to any Person including Affiliates of the General
Partner to perform services for the Partnership or for the General Partner in the discharge of its
duties to the Partnership), and (ii) all other necessary or appropriate expenses allocable to the
Partnership or otherwise reasonably incurred by the General Partner in connection with operating
the Partnership’s business (including expenses allocated to the General Partner by its Affiliates).
The General Partner shall determine the expenses that are allocable to the Partnership in any
reasonable manner determined by the General Partner in its sole discretion. Reimbursements pursuant
to this Section 7.4 shall be in addition to any reimbursement to the General Partner as a result of
indemnification pursuant to Section 7.7.



     (c) Subject to Section 5.7, the General Partner, in its sole discretion and without the
approval of the Limited Partners (who shall have no right to vote in respect thereof), may propose
and adopt on behalf of the Partnership employee benefit plans, employee programs and employee
practices (including plans, programs and practices involving the issuance of Partnership Securities
or options to purchase, or rights, warrants or appreciation rights relating to, Partnership
Securities), or cause the Partnership to issue Partnership Securities in connection with, or
pursuant to, any employee benefit plan, employee program or employee practice maintained or
sponsored by the General Partner or any of its Affiliates, in each case for the benefit of
employees of the General Partner, any Group Member or any Affiliate, or any of them, in respect of
services performed, directly or indirectly, for the benefit of the Partnership Group. The
Partnership agrees to issue and sell to the General Partner or any of its Affiliates any
Partnership Securities that the General Partner or such Affiliates are obligated to provide to any
employees pursuant to any such employee benefit plans, employee programs or employee practices.
Expenses incurred by the General Partner in connection with any such plans, programs and practices
(including the net cost to the General Partner or such Affiliates of Partnership Securities
purchased by the General Partner or such Affiliates from the Partnership to fulfill options or
awards under such plans, programs and practices) shall be reimbursed in accordance with Section
7.4(b). Any and all obligations of the General Partner under any employee benefit plans, employee
programs or employee practices adopted by the General Partner as permitted by this Section 7.4(c)
shall constitute obligations of the General Partner hereunder and shall be assumed by any successor
General Partner approved pursuant to Section 11.1 or 11.2 or the transferee of or successor to all
of the General Partner’s General Partner Interest pursuant to Section 4.6.



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	Section 7.5	 	Outside Activities.





     (a) After the Closing Date, the General Partner, for so long as it is the General Partner of
the Partnership (i) agrees that its sole business will be to act as a general partner or managing
member, as the case may be, of the Partnership and any other partnership or limited liability
company of which the Partnership or the Operating Company is, directly or indirectly, a partner or
member and to undertake activities that are ancillary or related thereto (including being a limited
partner in the Partnership), (ii) shall not engage in any business or activity or incur any debts
or liabilities except in connection with or incidental to (A) its performance as general partner or
managing member of one or more Group Members or as described in or contemplated by the Registration
Statement, or (B) the acquiring, owning or disposing of debt or equity securities in any Group
Member and (iii) except to the extent permitted in the Omnibus Agreement, shall not, and shall
cause its Affiliates (other than the Adena Group, which shall be subject to the Restricted Business
Contribution Agreement) not to, engage in any Restricted Business.



     (b) On the Closing Date, Arch Coal, Inc., Ark Land, Great Northern, New Gauley, Western
Pocahontas and certain of their respective Affiliates entered into the Omnibus Agreement with the
General Partner, the Partnership and the Operating Company. As of the date of this Agreement, the
Omnibus Agreement sets forth certain restrictions on the ability of Great Northern, New Gauley,
Western Pocahontas and such Affiliates to engage in Restricted Businesses. Cline, Foresight and
Adena have entered into the Restricted Business Contribution Agreement with the General Partner,
the Partnership, the Organizational General Partner and the Operating Company, which agreement sets
forth certain restrictions on the ability of the Adena Group to engage in Adena Restricted
Businesses.



     (c) Except as specifically restricted by Section 7.5(a), the Omnibus Agreement and the
Restricted Business Contribution Agreement, each Indemnitee (other than the General Partner) shall
have the right to engage in businesses of every type and description and other activities for
profit and to engage in and possess an interest in other business ventures of any and every type or
description, whether in businesses engaged in or anticipated to be engaged in by any Group Member,
independently or with others, including business interests and activities in direct competition
with the business and activities of any Group Member, and none of the same shall constitute a
breach of this Agreement or any duty express or implied by law to any Group Member or any Partner
or Assignee. Neither any Group Member, any Limited Partner nor any other Person shall have any
rights by virtue of this Agreement, the Operating Company Agreement, any other limited liability
company or partnership agreement of any other Group Member, or the partnership relationship
established hereby or thereby in any business ventures of any Indemnitee.



     (d) Subject to the terms of Section 7.5(a), Section 7.5(b), Section 7.5(c), the Omnibus
Agreement and the Restricted Business Contribution Agreement, but otherwise notwithstanding
anything to the contrary in this Agreement, (i) the engaging in competitive activities by any
Indemnitees (other than the General Partner) in accordance with the provisions of this Section 7.5
is hereby approved by the Partnership and all Partners, (ii) it shall be deemed not to be a breach
of the General Partner’s fiduciary duty or any other obligation of any type whatsoever of



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the General Partner for the Indemnitees (other than the General Partner) to engage in such
business interests and activities in preference to or to the exclusion of the Partnership and
(iii) except as set forth in the Omnibus Agreement or the Restricted Business Contribution
Agreement, the General Partner and the Indemnitees shall have no obligation to present business
opportunities to the Partnership.



     (e) The General Partner and any of its Affiliates may acquire Units or other Partnership
Securities in addition to those acquired on the Closing Date and, except as otherwise provided in
this Agreement, shall be entitled to exercise all rights of the General Partner or Limited Partner,
as applicable, relating to such Units or Partnership Securities.



     (f) The term “Affiliates” when used in Section 7.5(a) and Section 7.5(e) with respect to the
General Partner shall not include any Group Member or any Subsidiary of the Group Member.



     (g) Anything in this Agreement to the contrary notwithstanding, to the extent that provisions
of Sections 7.7, 7.8, 7.9, 7.10 or other Sections of this Agreement purport or are interpreted to
have the effect of restricting the fiduciary duties that might otherwise, as a result of Delaware
or other applicable law, be owed by the General Partner to the Partnership and its Limited
Partners, or to constitute a waiver or consent by the Limited Partners to any such restriction,
such provisions shall be inapplicable and have no effect in determining whether the General Partner
has complied with its fiduciary duties in connection with determinations made by it under this
Section 7.5.




			
	Section 7.6	 	Loans from the General Partner; Loans or Contributions from the Partnership;
Contracts with Affiliates; Certain Restrictions on the General Partner.





     (a) The General Partner or any of its Affiliates may lend to any Group Member, and any Group
Member may borrow from the General Partner or any of its Affiliates, funds needed or desired by the
Group Member for such periods of time and in such amounts as the General Partner may determine;
provided, however, that in any such case the lending party may not charge the borrowing party
interest at a rate greater than the rate that would be charged the borrowing party or impose terms
less favorable to the borrowing party than would be charged or imposed on the borrowing party by
unrelated lenders on comparable loans made on an arm’s-length basis (without reference to the
lending party’s financial abilities or guarantees). The borrowing party shall reimburse the lending
party for any costs (other than any additional interest costs) incurred by the lending party in
connection with the borrowing of such funds. For purposes of this Section 7.6(a) and Section
7.6(b), the term “Group Member” shall include any Affiliate of a Group Member that is controlled by
the Group Member. No Group Member may lend funds to the General Partner or any of its Affiliates
(other than another Group Member).



     (b) The Partnership may lend or contribute to any Group Member, and any Group Member may
borrow from the Partnership, funds on terms and conditions established in the sole discretion of
the General Partner; provided, however, that the Partnership may not charge the Group Member
interest at a rate less than the rate that would be charged to the Group Member



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(without reference to the General Partner’s financial abilities or guarantees) by unrelated
lenders on comparable loans. The foregoing authority shall be exercised by the General Partner in
its sole discretion and shall not create any right or benefit in favor of any Group Member or any
other Person.



     (c) The General Partner may itself, or may enter into an agreement with any of its Affiliates
to, render services to a Group Member or to the General Partner in the discharge of its duties as
General Partner of the Partnership. Any services rendered to a Group Member by the General Partner
or any of its Affiliates shall be on terms that are fair and reasonable to the Partnership;
provided, however, that the requirements of this Section 7.6(c) shall be deemed satisfied as to (i)
any transaction approved by Special Approval, (ii) any transaction, the terms of which are no less
favorable to the Partnership Group than those generally being provided to or available from
unrelated third parties or (iii) any transaction that, taking into account the totality of the
relationships between the parties involved (including other transactions that may be particularly
favorable or advantageous to the Partnership Group), is equitable to the Partnership Group. The
provisions of Section 7.4 shall apply to the rendering of services described in this Section
7.6(c).



     (d) The Partnership Group may transfer assets to joint ventures, other partnerships,
corporations, limited liability companies or other business entities in which it is or thereby
becomes a participant upon such terms and subject to such conditions as are consistent with this
Agreement and applicable law.



     (e) Neither the General Partner nor any of its Affiliates shall sell, transfer or convey any
property to, or purchase any property from, the Partnership, directly or indirectly, except
pursuant to transactions that are fair and reasonable to the Partnership; provided, however, that
the requirements of this Section 7.6(e) shall be deemed to be satisfied as to (i) the transactions
effected pursuant to Sections 5.2 and 5.3, the Contribution Agreement and any other transactions
described in or contemplated by the Registration Statement, (ii) any transaction approved by
Special Approval, (iii) any transaction, the terms of which are no less favorable to the
Partnership than those generally being provided to or available from unrelated third parties, or
(iv) any transaction that, taking into account the totality of the relationships between the
parties involved (including other transactions that may be particularly favorable or advantageous
to the Partnership), is equitable to the Partnership. With respect to any contribution of assets to
the Partnership in exchange for Partnership Securities, the Conflicts Committee, in determining
whether the appropriate number of Partnership Securities are being issued, may take into account,
among other things, the fair market value of the assets, the liquidated and contingent liabilities
assumed, the tax basis in the assets, the extent to which tax-only allocations to the transferor
will protect the existing partners of the Partnership against a low tax basis, and such other
factors as the Conflicts Committee deems relevant under the circumstances.



     (f) The General Partner and its Affiliates will have no obligation to permit any Group Member
to use any facilities or assets of the General Partner and its Affiliates, except as may be
provided in contracts entered into from time to time specifically dealing with such use, nor shall
there be any obligation on the part of the General Partner or its Affiliates to enter into such
contracts.



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     (g) Without limitation of Sections 7.6(a) through 7.6(f), and notwithstanding anything to the
contrary in this Agreement, the existence of the conflicts of interest described in the
Registration Statement are hereby approved by all Partners.




			
	Section 7.7	 	Indemnification.





     (a) To the fullest extent permitted by law but subject to the limitations expressly provided
in this Agreement, all Indemnitees shall be indemnified and held harmless by the Partnership from
and against any and all losses, claims, damages, liabilities, joint or several, expenses (including
legal fees and expenses), judgments, fines, penalties, interest, settlements or other amounts
arising from any and all claims, demands, actions, suits or proceedings, whether civil, criminal,
administrative or investigative, in which any Indemnitee may be involved, or is threatened to be
involved, as a party or otherwise, by reason of its status as an Indemnitee; provided, that in each
case the Indemnitee acted in good faith and in a manner that such Indemnitee reasonably believed to
be in, or (in the case of a Person other than the General Partner) not opposed to, the best
interests of the Partnership and, with respect to any criminal proceeding, had no reasonable cause
to believe its conduct was unlawful; provided, further, no indemnification pursuant to this Section
7.7 shall be available to the General Partner or its Affiliates (other than a Group Member) with
respect to its or their obligations incurred pursuant to the Underwriting Agreement, the Omnibus
Agreement, the Restricted Business Contribution Agreement, the Contribution Agreement or the Adena
Contribution Agreements (other than obligations incurred by the General Partner on behalf of the
Partnership). The termination of any action, suit or proceeding by judgment, order, settlement,
conviction or upon a plea of nolo contendere, or its equivalent, shall not create a presumption
that the Indemnitee acted in a manner contrary to that specified above. Any indemnification
pursuant to this Section 7.7 shall be made only out of the assets of the Partnership, it being
agreed that the General Partner shall not be personally liable for such indemnification and shall
have no obligation to contribute or loan any monies or property to the Partnership to enable it to
effectuate such indemnification.



     (b) To the fullest extent permitted by law, expenses (including legal fees and expenses)
incurred by an Indemnitee who is indemnified pursuant to Section 7.7(a) in defending any claim,
demand, action, suit or proceeding shall, from time to time, be advanced by the Partnership prior
to the final disposition of such claim, demand, action, suit or proceeding upon receipt by the
Partnership of any undertaking by or on behalf of the Indemnitee to repay such amount if it shall
be determined that the Indemnitee is not entitled to be indemnified as authorized in this Section
7.7.



     (c) The indemnification provided by this Section 7.7 shall be in addition to any other rights
to which an Indemnitee may be entitled under any agreement, pursuant to any vote of the holders of
Outstanding Limited Partner Interests, as a matter of law or otherwise, both as to actions in the
Indemnitee’s capacity as an Indemnitee and as to actions in any other capacity (including any
capacity under the Underwriting Agreement), and shall continue as to an Indemnitee who has ceased
to serve in such capacity and shall inure to the benefit of the heirs, successors, assigns and
administrators of the Indemnitee.



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     (d) The Partnership may purchase and maintain (or reimburse the General Partner or its
Affiliates for the cost of) insurance, on behalf of the General Partner, its Affiliates and such
other Persons as the General Partner shall determine, against any liability that may be
asserted against or expense that may be incurred by such Person in connection with the
Partnership’s activities or such Person’s activities on behalf of the Partnership, regardless of
whether the Partnership would have the power to indemnify such Person against such liability under
the provisions of this Agreement.



     (e) For purposes of this Section 7.7, the Partnership shall be deemed to have requested an
Indemnitee to serve as fiduciary of an employee benefit plan whenever the performance by it of its
duties to the Partnership also imposes duties on, or otherwise involves services by, it to the plan
or participants or beneficiaries of the plan; excise taxes assessed on an Indemnitee with respect
to an employee benefit plan pursuant to applicable law shall constitute “fines” within the meaning
of Section 7.7(a); and action taken or omitted by it with respect to any employee benefit plan in
the performance of its duties for a purpose reasonably believed by it to be in the interest of the
participants and beneficiaries of the plan shall be deemed to be for a purpose which is in, or not
opposed to, the best interests of the Partnership.



     (f) In no event may an Indemnitee subject the Limited Partners to personal liability by reason
of the indemnification provisions set forth in this Agreement.



     (g) An Indemnitee shall not be denied indemnification in whole or in part under this Section
7.7 because the Indemnitee had an interest in the transaction with respect to which the
indemnification applies if the transaction was otherwise permitted by the terms of this Agreement.



     (h) The provisions of this Section 7.7 are for the benefit of the Indemnitees, their heirs,
successors, assigns and administrators and shall not be deemed to create any rights for the benefit
of any other Persons.



     (i) No amendment, modification or repeal of this Section 7.7 or any provision hereof shall in
any manner terminate, reduce or impair the right of any past, present or future Indemnitee to be
indemnified by the Partnership, nor the obligations of the Partnership to indemnify any such
Indemnitee under and in accordance with the provisions of this Section 7.7 as in effect immediately
prior to such amendment, modification or repeal with respect to claims arising from or relating to
matters occurring, in whole or in part, prior to such amendment, modification or repeal, regardless
of when such claims may arise or be asserted.




			
	Section 7.8	 	Liability of Indemnitees.





     (a) Notwithstanding anything to the contrary set forth in this Agreement, no Indemnitee shall
be liable for monetary damages to the Partnership, the Limited Partners, the Assignees or any other
Persons who have acquired interests in the Partnership Securities, for losses sustained or
liabilities incurred as a result of any act or omission if such Indemnitee acted in good faith.



76









 





     (b) Subject to its obligations and duties as General Partner set forth in Section 7.1(a), the
General Partner may exercise any of the powers granted to it by this Agreement and perform any of
the duties imposed upon it hereunder either directly or by or through its agents, and the
General Partner shall not be responsible for any misconduct or negligence on the part of any
such agent appointed by the General Partner in good faith.



     (c) To the extent that, at law or in equity, an Indemnitee has duties (including fiduciary
duties) and liabilities relating thereto to the Partnership or to the Partners, the General Partner
and any other Indemnitee acting in connection with the Partnership’s business or affairs shall not
be liable to the Partnership or to any Partner for its good faith reliance on the provisions of
this Agreement. The provisions of this Agreement, to the extent that they restrict or otherwise
modify the duties and liabilities of an Indemnitee otherwise existing at law or in equity, are
agreed by the Partners to replace such other duties and liabilities of such Indemnitee.



     (d) Any amendment, modification or repeal of this Section 7.8 or any provision hereof shall be
prospective only and shall not in any way affect the limitations on the liability to the
Partnership, the Limited Partners, the General Partner, and the Partnership’s and General Partner’s
directors, officers and employees under this Section 7.8 as in effect immediately prior to such
amendment, modification or repeal with respect to claims arising from or relating to matters
occurring, in whole or in part, prior to such amendment, modification or repeal, regardless of when
such claims may arise or be asserted.




			
	Section 7.9	 	Resolution of Conflicts of Interest.





     (a) Unless otherwise expressly provided in this Agreement, the Operating Company Agreement, or
any other limited liability company or partnership agreement of any other Group Member, whenever a
potential conflict of interest exists or arises between the General Partner or any of its
Affiliates, on the one hand, and the Partnership, the Operating Company, any other Group Member,
any Partner or any Assignee, on the other, any resolution or course of action by the General
Partner or its Affiliates in respect of such conflict of interest shall be permitted and deemed
approved by all Partners, and shall not constitute a breach of this Agreement, of the Operating
Company Agreement, of any agreement contemplated herein or therein, or of any duty stated or
implied by law or equity, if the resolution or course of action is, or by operation of this
Agreement is deemed to be, fair and reasonable to the Partnership. The General Partner shall be
authorized but not required in connection with its resolution of such conflict of interest to seek
Special Approval of such resolution. Any conflict of interest and any resolution of such conflict
of interest shall be conclusively deemed fair and reasonable to the Partnership if such conflict of
interest or resolution is (i) approved by Special Approval (as long as the material facts known to
the General Partner or any of its Affiliates regarding any proposed transaction were disclosed to
the Conflicts Committee at the time it gave its approval), (ii) on terms no less favorable to the
Partnership than those generally being provided to or available from unrelated third parties or
(iii) fair to the Partnership, taking into account the totality of the relationships between the
parties involved (including other transactions that may be particularly favorable or advantageous
to the Partnership). The General Partner may also adopt a resolution or course of action that has
not received Special Approval. The General Partner (including the Conflicts Committee in connection
with Special Approval) shall be authorized in connection with its determination of



77









 







what is “fair and reasonable” to the Partnership and in connection with its resolution of any
conflict of interest to consider (A) the relative interests of any party to such conflict,
agreement, transaction or situation and the benefits and burdens relating to such interest; (B) any
customary or accepted industry practices and any customary or historical dealings with a particular
Person; (C) any applicable generally accepted accounting practices or principles; and (D) such
additional factors as the General Partner (including the Conflicts Committee) determines in its
sole discretion to be relevant, reasonable or appropriate under the circumstances. Nothing
contained in this Agreement, however, is intended to nor shall it be construed to require the
General Partner (including the Conflicts Committee) to consider the interests of any Person other
than the Partnership. In the absence of bad faith by the General Partner, the resolution, action or
terms so made, taken or provided by the General Partner with respect to such matter shall not
constitute a breach of this Agreement or any other agreement contemplated herein or a breach of any
standard of care or duty imposed herein or therein or, to the extent permitted by law, under the
Delaware Act or any other law, rule or regulation.



     (b) Whenever this Agreement or any other agreement contemplated hereby provides that the
General Partner or any of its Affiliates is permitted or required to make a decision (i) in its
“sole discretion” or “discretion,” that it deems “necessary or appropriate” or “necessary or
advisable” or under a grant of similar authority or latitude, except as otherwise provided herein,
the General Partner or such Affiliate shall be entitled to consider only such interests and factors
as it desires and shall have no duty or obligation to give any consideration to any interest of, or
factors affecting, the Partnership, any other Group Member, any Limited Partner or any Assignee,
(ii) it may make such decision in its sole discretion (regardless of whether there is a reference
to “sole discretion” or “discretion”) unless another express standard is provided for, or (iii) in
“good faith” or under another express standard, the General Partner or such Affiliate shall act
under such express standard and shall not be subject to any other or different standards imposed by
this Agreement, the Operating Company Agreement, any other limited liability company or partnership
agreement of any other Group Member, any other agreement contemplated hereby or under the Delaware
Act or any other law, rule or regulation. In addition, any actions taken by the General Partner or
such Affiliate consistent with the standards of “reasonable discretion” set forth in the
definitions of Available Cash or Operating Surplus shall not constitute a breach of any duty of the
General Partner to the Partnership or the Limited Partners. The General Partner shall have no duty,
express or implied, to sell or otherwise dispose of any asset of the Partnership Group other than
in the ordinary course of business. No borrowing by any Group Member or the approval thereof by the
General Partner shall be deemed to constitute a breach of any duty of the General Partner to the
Partnership or the Limited Partners by reason of the fact that the purpose or effect of such
borrowing is directly or indirectly to (A) enable distributions to the General Partner or its
Affiliates (including in their capacities as Limited Partners) to exceed 2% of the total amount
distributed to all partners or (B) hasten the expiration of the Subordination Period or the
conversion of any Subordinated Units into Common Units.



     (c) Whenever a particular transaction, arrangement or resolution of a conflict of interest is
required under this Agreement to be “fair and reasonable” to any Person, the fair and reasonable
nature of such transaction, arrangement or resolution shall be considered in the context of all
similar or related transactions.



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     (d) The Unitholders hereby authorize the General Partner, on behalf of the Partnership as a
partner or member of a Group Member, to approve of actions by the general partner or managing
member of such Group Member similar to those actions permitted to be taken by the General Partner
pursuant to this Section 7.9.




			
	Section 7.10	 	Other Matters Concerning the General Partner.





     (a) The General Partner may rely and shall be protected in acting or refraining from acting
upon any resolution, certificate, statement, instrument, opinion, report, notice, request, consent,
order, bond, debenture or other paper or document believed by it to be genuine and to have been
signed or presented by the proper party or parties.



     (b) The General Partner may consult with legal counsel, accountants, appraisers, management
consultants, investment bankers and other consultants and advisers selected by it, and any act
taken or omitted to be taken in reliance upon the opinion (including an Opinion of Counsel) of such
Persons as to matters that the General Partner reasonably believes to be within such Person’s
professional or expert competence shall be conclusively presumed to have been done or omitted in
good faith and in accordance with such opinion.



     (c) The General Partner shall have the right, in respect of any of its powers or obligations
hereunder, to act through any of its duly authorized officers, a duly appointed attorney or
attorneys-in-fact or the duly authorized officers of the Partnership.



     (d) Any standard of care and duty imposed by this Agreement or under the Delaware Act or any
applicable law, rule or regulation shall be modified, waived or limited, to the extent permitted by
law, as required to permit the General Partner to act under this Agreement or any other agreement
contemplated by this Agreement and to make any decision pursuant to the authority prescribed in
this Agreement, so long as such action is reasonably believed by the General Partner to be in, or
not inconsistent with, the best interests of the Partnership.




			
	Section 7.11	 	Purchase or Sale of Partnership Securities.





     The General Partner may cause the Partnership to purchase or otherwise acquire Partnership
Securities; provided that, except as permitted pursuant to Section 4.10, the General Partner may
not cause any Group Member to purchase Subordinated Units during the Subordination Period. As long
as Partnership Securities are held by any Group Member, such Partnership Securities shall not be
considered Outstanding for any purpose, except as otherwise provided herein. The General Partner or
any of Affiliate of the General Partner may also purchase or otherwise acquire and sell or
otherwise dispose of Partnership Securities for its own account, subject to the provisions of
Articles IV and X.




			
	Section 7.12	 	Registration Rights of the General Partner and its Affiliates.





     (a) If (i) the General Partner or any Affiliate of the General Partner (including for purposes
of this Section 7.12, any Person that was an Affiliate of the General Partner at the Closing Date,
notwithstanding that it may later cease to be an Affiliate of the General Partner or Adena) holds
Partnership Securities that it desires to sell and (ii) Rule 144 of the Securities Act



79









 







(or any successor rule or regulation to Rule 144) or another exemption from registration is
not available to enable such holder of Partnership Securities (the “Holder”) to dispose of the
number of Partnership Securities it desires to sell at the time it desires to do so without
registration under the Securities Act, then at the option and upon the request of the Holder, the
Partnership shall file with the Commission as promptly as practicable after receiving such request,
and use all commercially reasonable efforts to cause to become effective and remain effective for a
period of not less than six months following its effective date or such shorter period as shall
terminate when all Partnership Securities covered by such registration statement have been sold, a
registration statement under the Securities Act registering the offering and sale of the number of
Partnership Securities specified by the Holder; provided, however, that the Partnership shall not
be required to effect more than two registrations pursuant to Section 7.12(a) and Section 7.12(b)
at the request of Adena or more than one registration pursuant to Section 7.12(a) and Section
7.12(b) at the request of each of Western Pocahontas, Great Northern and New Gauley; and provided
further, however, that if the Conflicts Committee determines that the requested registration would
be materially detrimental to the Partnership and its Partners because such registration would (x)
materially interfere with a significant acquisition, reorganization or other similar transaction
involving the Partnership, (y) require premature disclosure of material information that the
Partnership has a bona fide business purpose for preserving as confidential or (z) render the
Partnership unable to comply with requirements under applicable securities laws, then the
Partnership shall have the right to postpone such requested registration for a period of not more
than three months after receipt of the Holder’s request, such right pursuant to this Section
7.12(a) or Section 7.12(b) not to be utilized more than twice in any twelve-month period. Except as
provided in the preceding sentence, the Partnership shall be deemed not to have used all
commercially reasonable efforts to keep the registration statement effective during the applicable
period if it voluntarily takes any action that would result in Holders of Partnership Securities
covered thereby not being able to offer and sell such Partnership Securities at any time during
such period, unless such action is required by applicable law. In connection with any registration
pursuant to the first sentence of this Section 7.12(a), the Partnership shall (i) promptly prepare
and file (A) such documents as may be necessary to register or qualify the securities subject to
such registration under the securities laws of such states as the Holder shall reasonably request;
provided, however, that no such qualification shall be required in any jurisdiction where, as a
result thereof, the Partnership would become subject to general service of process or to taxation
or qualification to do business as a foreign corporation or partnership doing business in such
jurisdiction solely as a result of such registration, and (B) such documents as may be necessary to
apply for listing or to list the Partnership Securities subject to such registration on such
National Securities Exchange as the Holder shall reasonably request, and (ii) do any and all other
acts and things that may reasonably be necessary or appropriate to enable the Holder to consummate
a public sale of such Partnership Securities in such states. Except as set forth in Section
7.12(d), all costs and expenses of any such registration and offering (other than the underwriting
discounts and commissions, if any) shall be paid by the Partnership, without reimbursement by the
Holder.



     (b) If any Holder holds Partnership Securities that it desires to sell and Rule 144 of the
Securities Act (or any successor rule or regulation to Rule 144) or another exemption from
registration is not available to enable such Holder to dispose of the number of Partnership
Securities it desires to sell at the time it desires to do so without registration under the
Securities



80









 







Act, then at the option and upon the request of the Holder, the Partnership shall file with
the Commission as promptly as practicable after receiving such request, and use all reasonable
efforts to cause to become effective and remain effective for a period of not less than six months
following its effective date or such shorter period as shall terminate when all Partnership
Securities covered by such shelf registration statement have been sold, a “shelf” registration
statement covering the Partnership Securities specified by the Holder on an appropriate form under
Rule 415 under the Securities Act, or any similar rule that may be adopted by the
Commission; provided, however, that the Partnership shall not be required to effect more than
two registrations pursuant to Section 7.12(a) and Section 7.12(b) at the request of Adena or more
than one registration pursuant to Section 7.12(a) and Section 7.12(b) at the request of each of
Western Pocahontas, Great Northern and New Gauley; and provided further, however, that if the
Conflicts Committee determines in good faith that any offering under, or the use of any prospectus
forming a part of, the shelf registration statement would be materially detrimental to the
Partnership and its Partners because such offering or use would (x) materially interfere with a
significant acquisition, reorganization or other similar transaction involving the Partnership, (y)
require premature disclosure of material information that the Partnership has a bona fide business
purpose for preserving as confidential or (z) render the Partnership unable to comply with
requirements under applicable securities laws, then the Partnership shall have the right to suspend
such offering or use for a period of not more than six months after receipt of the Holder’s
request, such right pursuant to Section 7.12(a) or this Section 7.12(b) not to be utilized more
than twice in any twelve-month period. Except as provided in the preceding sentence, the
Partnership shall be deemed not to have used all reasonable efforts to keep the shelf registration
statement effective during the applicable period if it voluntarily takes any action that would
result in Holders of Partnership Securities covered thereby not being able to offer and sell such
Partnership Securities at any time during such period, unless such action is required by applicable
law. In connection with any shelf registration pursuant to this Section 7.12(b), the Partnership
shall (i) promptly prepare and file (A) such documents as may be necessary to register or qualify
the securities subject to such shelf registration under the securities laws of such states as the
Holder shall reasonably request; provided, however, that no such qualification shall be required in
any jurisdiction where, as a result thereof, the Partnership would become subject to general
service of process or to taxation or qualification to do business as a foreign corporation or
partnership doing business in such jurisdiction solely as a result of such shelf registration, and
(B) such documents as may be necessary to apply for listing or to list the Partnership Securities
subject to such shelf registration on such National Securities Exchange as the Holder shall
reasonably request, and (ii) do any and all other acts and things that may be necessary or
appropriate to enable the Holder to consummate a public sale of such Partnership Securities in such
states. Except as set forth in Section 7.12(d), all costs and expenses of any such shelf
registration and offering (other than the underwriting discounts and commissions, if any) shall be
paid by the Partnership, without reimbursement by the Holder.



     (c) If the Partnership shall at any time propose to file a registration statement under the
Securities Act for an offering of equity securities of the Partnership for cash (other than an
offering relating solely to an employee benefit plan), the Partnership shall use all reasonable
efforts to provide notice of its intention to file such registration statement and shall use all
reasonable efforts to include such number or amount of securities held by the Holder in such
registration statement as the Holder shall request; provided, that the Partnership is not required
to



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make any effort or take any action to so include the securities of the Holder once the
registration statement is declared effective by the Commission, including any registration
statement providing for the offering from time to time of securities pursuant to Rule 415 of the
Securities Act or any similar rule that may be adopted by the Commission. If the proposed offering
pursuant to this Section 7.12(c) shall be an underwritten offering, then, in the event that the
managing underwriter or managing underwriters of such offering advise the Partnership and the
Holder in writing that in their opinion the inclusion of all or some of the Holder’s Partnership
Securities would adversely and materially affect the success of the offering, the Partnership shall
include in such offering only that number or amount, if any, of securities held by the Holder
that, in the opinion of the managing underwriter or managing underwriters, will not so adversely
and materially affect the offering. Except as set forth in Section 7.12(d), all costs and expenses
of any such registration and offering (other than the underwriting discounts and commissions) shall
be paid by the Partnership, without reimbursement by the Holder.



     (d) If underwriters are engaged in connection with any registration referred to in this
Section 7.12, the Partnership shall provide indemnification, representations, covenants, opinions
and other assurance to the underwriters in form and substance reasonably satisfactory to such
underwriters. Further, in addition to and not in limitation of the Partnership’s obligation under
Section 7.7, the Partnership shall, to the fullest extent permitted by law, indemnify and hold
harmless the Holder, its officers, directors and each Person who controls the Holder (within the
meaning of the Securities Act) and any agent thereof (collectively, “Indemnified Persons”) from and
against any and all losses, claims, damages, liabilities, joint or several, expenses (including
legal fees and expenses), judgments, fines, penalties, interest, settlements or other amounts
arising from any and all claims, demands, actions, suits or proceedings, whether civil, criminal,
administrative or investigative, in which any Indemnified Person may be involved, or is threatened
to be involved, as a party or otherwise under the Securities Act or otherwise (hereinafter referred
to in this Section 7.12(d) as a “claim” and in the plural as “claims”) based upon, arising out of
or resulting from any untrue statement or alleged untrue statement of any material fact contained
in any registration statement under which any Partnership Securities were registered under the
Securities Act or any state securities or Blue Sky laws, in any preliminary prospectus (if used
prior to the effective date of such registration statement), or in any summary or final prospectus
or in any amendment or supplement thereto (if used during the period the Partnership is required to
keep the registration statement current), or arising out of, based upon or resulting from the
omission or alleged omission to state therein a material fact required to be stated therein or
necessary to make the statements made therein not misleading; provided, however, that the
Partnership shall not be liable to any Indemnified Person to the extent that any such claim arises
out of, is based upon or results from an untrue statement or alleged untrue statement or omission
or alleged omission made in such registration statement, such preliminary, summary or final
prospectus or such amendment or supplement, in reliance upon and in conformity with written
information furnished to the Partnership by or on behalf of such Indemnified Person specifically
for use in the preparation thereof.



     (e) The provisions of Section 7.12(a), Section 7.12(b) and Section 7.12(c) shall continue to
be applicable with respect to the General Partner (and any of the General Partner’s Affiliates)
after it ceases to be a general partner of the Partnership, during a period of two years subsequent
to the effective date of such cessation and for so long thereafter as is required for the



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Holder to sell all of the Partnership Securities with respect to which it has requested during
such two-year period inclusion in a registration statement otherwise filed or that a registration
statement be filed; provided, however, that the Partnership shall not be required to file
successive registration statements covering the same Partnership Securities for which registration
was demanded during such two-year period. The provisions of Section 7.12(d) shall continue in
effect thereafter.



     (f) The rights to cause the Partnership to register Partnership Securities pursuant to this
Section 7.12 may be assigned (but only with all related obligations) by a Holder to a
transferee or assignee of such Partnership Securities, provided (i) the Partnership is, within
a reasonable time after such transfer, furnished with written notice of the name and address of
such transferee or assignee and the Partnership Securities with respect to which such registration
rights are being assigned; and (ii) such transferee or assignee agrees in writing to be bound by
and subject to the terms set forth in this Section 7.12.



     (g) Any request to register Partnership Securities pursuant to this Section 7.12 shall (i)
specify the Partnership Securities intended to be offered and sold by the Person making the
request, (ii) express such Person’s present intent to offer such Partnership Securities for
distribution, (iii) describe the nature or method of the proposed offer and sale of Partnership
Securities, and (iv) contain the undertaking of such Person to provide all such information and
materials and take all action as may be required in order to permit the Partnership to comply with
all applicable requirements in connection with the registration of such Partnership Securities.




			
	Section 7.13	 	Reliance by Third Parties.





     Notwithstanding anything to the contrary in this Agreement, any Person dealing with the
Partnership shall be entitled to assume that the General Partner and any officer of the General
Partner authorized by the General Partner to act on behalf of and in the name of the Partnership
has full power and authority to encumber, sell or otherwise use in any manner any and all assets of
the Partnership and to enter into any authorized contracts on behalf of the Partnership, and such
Person shall be entitled to deal with the General Partner or any such officer as if it were the
Partnership’s sole party in interest, both legally and beneficially. Each Limited Partner hereby
waives any and all defenses or other remedies that may be available against such Person to contest,
negate or disaffirm any action of the General Partner or any such officer in connection with any
such dealing. In no event shall any Person dealing with the General Partner or any such officer or
its representatives be obligated to ascertain that the terms of this Agreement have been complied
with or to inquire into the necessity or expedience of any act or action of the General Partner or
any such officer or its representatives. Each and every certificate, document or other instrument
executed on behalf of the Partnership by the General Partner or its representatives shall be
conclusive evidence in favor of any and every Person relying thereon or claiming thereunder that
(a) at the time of the execution and delivery of such certificate, document or instrument, this
Agreement was in full force and effect, (b) the Person executing and delivering such certificate,
document or instrument was duly authorized and empowered to do so for and on behalf of the
Partnership and (c) such certificate, document or instrument was duly executed and delivered in
accordance with the terms and provisions of this Agreement and is binding upon the Partnership.



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ARTICLE
VIII




BOOKS,
RECORDS, ACCOUNTING AND REPORTS





			
	Section 8.1	 	Records and Accounting.





     The General Partner shall keep or cause to be kept at the principal office of the Partnership
appropriate books and records with respect to the Partnership’s business, including all books and
records necessary to provide to the Limited Partners any information required to be
provided pursuant to Section 3.4(a). Any books and records maintained by or on behalf of the
Partnership in the regular course of its business, including the record of the Record Holders and
Assignees of Units or other Partnership Securities, books of account and records of Partnership
proceedings, may be kept on, or be in the form of, computer disks, hard drives, punch cards,
magnetic tape, photographs, micrographics or any other information storage device; provided, that
the books and records so maintained are convertible into clearly legible written form within a
reasonable period of time. The books of the Partnership shall be maintained, for financial
reporting purposes, on an accrual basis in accordance with U.S. GAAP.




			
	Section 8.2	 	Fiscal Year.





     The fiscal year of the Partnership shall be a fiscal year ending December 31.




			
	Section 8.3	 	Reports.





     (a) As soon as practicable, but in no event later than 120 days after the close of each fiscal
year of the Partnership, the General Partner shall cause to be mailed or made available to each
Record Holder of a Unit as of a date selected by the General Partner in its discretion, an annual
report containing financial statements of the Partnership for such fiscal year of the Partnership,
presented in accordance with U.S. GAAP, including a balance sheet and statements of operations,
Partnership equity and cash flows, such statements to be audited by a firm of independent public
accountants selected by the General Partner.



     (b) As soon as practicable, but in no event later than 90 days after the close of each Quarter
except the last Quarter of each fiscal year, the General Partner shall cause to be mailed or made
available to each Record Holder of a Unit, as of a date selected by the General Partner in its
discretion, a report containing unaudited financial statements of the Partnership and such other
information as may be required by applicable law, regulation or rule of any National Securities
Exchange on which the Units are listed for trading, or as the General Partner determines to be
necessary or appropriate.



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ARTICLE
IX




TAX
MATTERS





			
	Section 9.1	 	Tax Returns and Information.





     The Partnership shall timely file all returns of the Partnership that are required for
federal, state and local income tax purposes on the basis of the accrual method and a taxable year
ending on December 31. The tax information reasonably required by Record Holders for federal and
state income tax reporting purposes with respect to a taxable year shall be furnished to them
within 90 days of the close of the calendar year in which the Partnership’s taxable year ends. The
classification, realization and recognition of income, gain, losses and deductions and other items
shall be on the accrual method of accounting for federal income tax purposes.




			
	Section 9.2	 	Tax Elections.





     (a) The Partnership shall make the election under Section 754 of the Code in accordance with
applicable regulations thereunder, subject to the reservation of the right to seek to revoke any
such election upon the General Partner’s determination that such revocation is in the best
interests of the Limited Partners. Notwithstanding any other provision herein contained, for the
purposes of computing the adjustments under Section 743(b) of the Code, the General Partner shall
be authorized (but not required) to adopt a convention whereby the price paid by a transferee of a
Limited Partner Interest will be deemed to be the lowest quoted closing price of the Limited
Partner Interests on any National Securities Exchange on which such Limited Partner Interests are
traded during the calendar month in which such transfer is deemed to occur pursuant to Section
6.2(g) without regard to the actual price paid by such transferee.



     (b) The Partnership shall elect to deduct expenses incurred in organizing the Partnership
ratably over a sixty-month period as provided in Section 709 of the Code.



     (c) Except as otherwise provided herein, the General Partner shall determine whether the
Partnership should make any other elections permitted by the Code.




			
	Section 9.3	 	Tax Controversies.





     Subject to the provisions hereof, the General Partner is designated as the Tax Matters Partner
(as defined in the Code) and is authorized and required to represent the Partnership (at the
Partnership’s expense) in connection with all examinations of the Partnership’s affairs by tax
authorities, including resulting administrative and judicial proceedings, and to expend Partnership
funds for professional services and costs associated therewith. Each Partner agrees to cooperate
with the General Partner and to do or refrain from doing any or all things reasonably required by
the General Partner to conduct such proceedings.




			
	Section 9.4	 	Withholding.





     Notwithstanding any other provision of this Agreement, the General Partner is authorized to
take any action that it determines in its discretion to be necessary or appropriate to cause the



85









 







Partnership and the other Group Members to comply with any withholding requirements
established under the Code or any other federal, state or local law including, without limitation,
pursuant to Sections 1441, 1442, 1445 and 1446 of the Code. To the extent that the Partnership is
required or elects to withhold and pay over to any taxing authority any amount resulting from the
allocation or distribution of income to any Partner or Assignee (including, without limitation, by
reason of Section 1446 of the Code), the amount withheld may at the discretion of the General
Partner be treated by the Partnership as a distribution of cash pursuant to Section 6.3 in the
amount of such withholding from such Partner.



ARTICLE
X




ADMISSION
OF PARTNERS





			
	Section 10.1	 	Intentionally Omitted.






			
	Section 10.2	 	Admission of Substituted Limited Partner.





     By transfer of a Limited Partner Interest in accordance with Article IV, the transferor shall
be deemed to have given the transferee the right to seek admission as a Substituted Limited Partner
subject to the conditions of, and in the manner permitted under, this Agreement. A transferor of a
Certificate representing a Limited Partner Interest shall, however, only have the authority to
convey to a purchaser or other transferee who does not execute and deliver a Transfer Application
(a) the right to negotiate such Certificate to a purchaser or other transferee and (b) the right to
transfer the right to request admission as a Substituted Limited Partner to such purchaser or other
transferee in respect of the transferred Limited Partner Interests. Each transferee of a Limited
Partner Interest (including any nominee holder or an agent acquiring such Limited Partner Interest
for the account of another Person) who executes and delivers a Transfer Application shall, by
virtue of such execution and delivery, be an Assignee and be deemed to have applied to become a
Substituted Limited Partner with respect to the Limited Partner Interests so transferred to such
Person. Such Assignee shall be admitted to the Partnership as a Substituted Limited Partner when
any such admission is reflected on the books and records of the Partnership, which the General
Partner shall cause to be done no less frequently than quarterly. An Assignee shall have an
interest in the Partnership equivalent to that of a Limited Partner with respect to allocations and
distributions, including liquidating distributions, of the Partnership. With respect to voting
rights attributable to Limited Partner Interests that are held by Assignees, the General Partner
shall be deemed to be the Limited Partner with respect thereto and shall, in exercising the voting
rights in respect of such Limited Partner Interests on any matter, vote such Limited Partner
Interests at the written direction of the Assignee who is the Record Holder of such Limited Partner
Interests. If no such written direction is received, such Limited Partner Interests will not be
voted. An Assignee shall have no other rights of a Limited Partner.



86









 






			
	Section 10.3	 	Admission of Successor General Partner.





     A successor General Partner approved pursuant to Section 11.1 or 11.2 or the transferee of or
successor to all of the General Partner Interest pursuant to Section 4.6 who is proposed to be
admitted as a successor General Partner shall be admitted to the Partnership as the General
Partner, effective immediately prior to the withdrawal or removal of the predecessor or
transferring General Partner, pursuant to Section 11.1 or 11.2 or the transfer of the General
Partner Interest pursuant to Section 4.6, provided, however, that no such successor shall be
admitted to the Partnership until compliance with the terms of Section 4.6 has occurred and such
successor has executed and delivered such other documents or instruments as may be required to
effect such admission. Any such successor shall, subject to the terms hereof, carry on the business
of the members of the Partnership Group without dissolution.




			
	Section 10.4	 	Admission of Additional Limited Partners.





     (a) A Person (other than the General Partner or a Substituted Limited Partner) who makes a
Capital Contribution to the Partnership in accordance with this Agreement shall be admitted to the
Partnership as an Additional Limited Partner only upon furnishing to the General Partner




     (i) evidence of acceptance in form satisfactory to the General Partner of all of the
terms and conditions of this Agreement, including the power of attorney granted in Section
2.6, and




     (ii) such other documents or instruments as may be required in the discretion of the
General Partner to effect such Person’s admission as an Additional Limited Partner.



     (b) Notwithstanding anything to the contrary in this Section 10.4, no Person shall be admitted
as an Additional Limited Partner without the consent of the General Partner, which consent may be
given or withheld in the General Partner’s discretion. The admission of any Person as an Additional
Limited Partner shall become effective on the date upon which the name of such Person is recorded
as such in the books and records of the Partnership, following the consent of the General Partner
to such admission.




			
	Section 10.5	 	Amendment of Agreement and Certificate of Limited Partnership.





     To effect the admission to the Partnership of any Partner, the General Partner shall take all
steps necessary and appropriate under the Delaware Act to amend the records of the Partnership to
reflect such admission and, if necessary, to prepare as soon as practicable an amendment to this
Agreement and, if required by law, the General Partner shall prepare and file an amendment to the
Certificate of Limited Partnership, and the General Partner may for this purpose, among others,
exercise the power of attorney granted pursuant to Section 2.6.



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ARTICLE
XI




WITHDRAWAL
OR REMOVAL OF PARTNERS





			
	Section 11.1	 	Withdrawal of the General Partner.





     (a) The General Partner shall be deemed to have withdrawn from the Partnership upon the
occurrence of any one of the following events (each such event herein referred to as an “Event of
Withdrawal”);




     (i) The General Partner voluntarily withdraws from the Partnership by giving written
notice to the other Partners;




     (ii) The General Partner transfers all of its rights as General Partner pursuant to
Section 4.6;




     (iii) The General Partner is removed pursuant to Section 11.2;




     (iv) The General Partner (A) makes a general assignment for the benefit of creditors;
(B) files a voluntary bankruptcy petition for relief under Chapter 7 of the United States
Bankruptcy Code; (C) files a petition or answer seeking for itself a liquidation,
dissolution or similar relief (but not a reorganization) under any law; (D) files an answer
or other pleading admitting or failing to contest the material allegations of a petition
filed against the General Partner in a proceeding of the type described in clauses (A)-(C)
of this Section 11.1(a)(iv); or (E) seeks, consents to or acquiesces in the appointment of a
trustee (but not a debtor-in-possession), receiver or liquidator of the General Partner or
of all or any substantial part of its properties;




     (v) A final and non-appealable order of relief under Chapter 7 of the United States
Bankruptcy Code is entered by a court with appropriate jurisdiction pursuant to a voluntary
or involuntary petition by or against the General Partner; or




     (vi) (A) in the event the General Partner is a corporation, a certificate of
dissolution or its equivalent is filed for the General Partner, or 90 days expire after the
date of notice to the General Partner of revocation of its charter without a reinstatement
of its charter, under the laws of its state of incorporation; (B) in the event the General
Partner is a partnership or a limited liability company, the dissolution and commencement of
winding up of the General Partner; (C) in the event the General Partner is acting in such
capacity by virtue of being a trustee of a trust, the termination of the trust; (D) in the
event the General Partner is a natural person, his death or adjudication of incompetency;
and (E) otherwise in the event of the termination of the General Partner.



If an Event of Withdrawal specified in Section 11.1(a)(iv), (v) or (vi)(A), (B), (C) or (E) occurs,
the withdrawing General Partner shall give notice to the Limited Partners within 30 days after such
occurrence. The Partners hereby agree that only the Events of Withdrawal described in this Section
11.1 shall result in the withdrawal of the General Partner from the Partnership.



88









 





     (b) Withdrawal of the General Partner from the Partnership upon the occurrence of an Event of
Withdrawal shall not constitute a breach of this Agreement under the following circumstances: (i)
at any time during the period beginning on the Closing Date and ending at 12:00 midnight, Eastern
Standard Time, on September 30, 2012, the General Partner voluntarily withdraws by giving at least
90 days advance notice of its intention to withdraw to the Limited Partners; provided that prior to
the effective date of such withdrawal, the withdrawal is approved by Unitholders holding at least a
majority of the Outstanding Common Units and Class B Units (excluding Common Units and Class B
Units held by the General Partner and its Affiliates) and the General Partner delivers to the
Partnership an Opinion of Counsel (“Withdrawal Opinion of Counsel”) that such withdrawal (following
the selection of the successor General Partner) would not result in the loss of the limited
liability of any Limited Partner or any Group Member or cause any Group Member to be treated as an
association taxable as a corporation or otherwise to be taxed as an entity for federal income tax
purposes (to the extent not previously treated as such); (ii) at any time after 12:00 midnight,
Eastern Standard Time, on September 30, 2012, the General Partner voluntarily withdraws by giving
at least 90 days advance notice to the Unitholders, such withdrawal to take effect on the date
specified in such notice; (iii) at any time that the General Partner ceases to be the General
Partner pursuant to Section 11.1(a)(ii) or is
removed pursuant to Section 11.2; or (iv) notwithstanding clause (i) of this sentence, at any
time that the General Partner voluntarily withdraws by giving at least 90 days advance notice of
its intention to withdraw to the Limited Partners, such withdrawal to take effect on the date
specified in the notice, if at the time such notice is given one Person and its Affiliates (other
than the General Partner and its Affiliates) own beneficially or of record or control at least 50%
of the Outstanding Units. The withdrawal of the General Partner from the Partnership upon the
occurrence of an Event of Withdrawal shall also constitute the withdrawal of the General Partner as
general partner or managing member, to the extent applicable, of the other Group Members. If the
General Partner gives a notice of withdrawal pursuant to Section 11.1(a)(i), the holders of a Unit
Majority, may, prior to the effective date of such withdrawal, elect a successor General Partner.
The Person so elected as successor General Partner shall automatically become the successor general
partner or managing member, to the extent applicable, of the other Group Members of which the
General Partner is a general partner or a managing member. If, prior to the effective date of the
General Partner’s withdrawal, a successor is not selected by the Unitholders as provided herein or
the Partnership does not receive a Withdrawal Opinion of Counsel, the Partnership shall be
dissolved in accordance with Section 12.1. Any successor General Partner elected in accordance with
the terms of this Section 11.1 shall be subject to the provisions of Section 10.3.




			
	Section 11.2	 	Removal of the General Partner.





     The General Partner may be removed if such removal is approved by the Unitholders holding at
least 66 2/3% of the Outstanding Units (including Units held by the General Partner and its
Affiliates). Any such action by such holders for removal of the General Partner must also provide
for the election of a successor General Partner by the Unitholders holding a majority of the
outstanding Common Units voting as a class and a majority of the outstanding Subordinated Units
voting as a class (including Units held by the General Partner and its Affiliates). Such removal
shall be effective immediately following the admission of a successor General Partner pursuant to
Section 10.3. The removal of the General Partner shall also automatically constitute



89









 







the removal of the General Partner as general partner or managing member, to the extent
applicable, of the other Group Members of which the General Partner is a general partner or a
managing member. If a Person is elected as a successor General Partner in accordance with the terms
of this Section 11.2, such Person shall, upon admission pursuant to Section 10.3, automatically
become a successor general partner or managing member, to the extent applicable, of the other Group
Members of which the General Partner is a general partner or a managing member. The right of the
holders of Outstanding Units to remove the General Partner shall not exist or be exercised unless
the Partnership has received an opinion opining as to the matters covered by a Withdrawal Opinion
of Counsel. Any successor General Partner elected in accordance with the terms of this Section 11.2
shall be subject to the provisions of Section 10.3.




			
	Section 11.3	 	Interest of Departing Partner and Successor General Partner.





     (a) In the event of (i) withdrawal of the General Partner under circumstances where such
withdrawal does not violate this Agreement or (ii) removal of the General Partner by the holders of
Outstanding Units under circumstances where Cause does not exist, if the successor General Partner
is elected in accordance with the terms of Section 11.1 or 11.2, the Departing Partner shall have
the option, exercisable prior to the effective date of the departure of such
Departing Partner, to require its successor to purchase its General Partner Interest and its
general partner interest (or equivalent interest), if any, in the other Group Members and all of
its Incentive Distribution Rights (collectively, the “Combined Interest”) in exchange for an amount
in cash equal to the fair market value of such Combined Interest, such amount to be determined and
payable as of the effective date of its departure. If the General Partner is removed by the
Unitholders under circumstances where Cause exists or if the General Partner withdraws under
circumstances where such withdrawal violates this Agreement, and if a successor General Partner is
elected in accordance with the terms of Section 11.1 or 11.2, such successor shall have the option,
exercisable prior to the effective date of the departure of such Departing Partner, to purchase the
Combined Interest for such fair market value of such Combined Interest of the Departing Partner. In
either event, the Departing Partner shall be entitled to receive all reimbursements due such
Departing Partner pursuant to Section 7.4, including any employee-related liabilities (including
severance liabilities), incurred in connection with the termination of any employees employed by
the Departing Partner for the benefit of the Partnership or the other Group Members.



     For purposes of this Section 11.3(a), the fair market value of the Departing Partner’s
Combined Interest shall be determined by agreement between the Departing Partner and its successor
or, failing agreement within 30 days after the effective date of such Departing Partner’s
departure, by an independent investment banking firm or other independent expert selected by the
Departing Partner and its successor, which, in turn, may rely on other experts, and the
determination of which shall be conclusive as to such matter. If such parties cannot agree upon one
independent investment banking firm or other independent expert within 45 days after the effective
date of such departure, then the Departing Partner shall designate an independent investment
banking firm or other independent expert, the Departing Partner’s successor shall designate an
independent investment banking firm or other independent expert, and such firms or experts shall
mutually select a third independent investment banking firm or independent expert, which third
independent investment banking firm or other independent expert shall determine the



90









 







fair market value of the Combined Interest of the Departing Partner. In making its
determination, such third independent investment banking firm or other independent expert may
consider the then current trading price of Units on any National Securities Exchange on which Units
are then listed, the value of the Partnership’s assets, the rights and obligations of the Departing
Partner and other factors it may deem relevant.



     (b) If the Combined Interest is not purchased in the manner set forth in Section 11.3(a), the
Departing Partner (or its transferee) shall become a Limited Partner and its Combined Interest
shall be converted into Common Units pursuant to a valuation made by an investment banking firm or
other independent expert selected pursuant to Section 11.3(a), without reduction in such
Partnership Interest (but subject to proportionate dilution by reason of the admission of its
successor). Any successor General Partner shall indemnify the Departing Partner (or its transferee)
as to all debts and liabilities of the Partnership arising on or after the date on which the
Departing Partner (or its transferee) becomes a Limited Partner. For purposes of this Agreement,
conversion of the Combined Interest of the Departing Partner to Common Units will be characterized
as if the Departing Partner (or its transferee) contributed its Combined Interest to the
Partnership in exchange for the newly issued Common Units.



     (c) If a successor General Partner is elected in accordance with the terms of Section 11.1 or
11.2 and the option described in Section 11.3(a) is not exercised by the party entitled to do so,
the successor General Partner shall, at the effective date of its admission to the Partnership,
contribute to the Partnership cash in the amount equal to 2/98ths of the Net Agreed Value of the
Partnership’s assets on such date. In such event, such successor General Partner shall, subject to
the following sentence, be entitled to 2% of all Partnership allocations and distributions to which
the Departing Partner was entitled. In addition, the successor General Partner shall cause this
Agreement to be amended to reflect that, from and after the date of such successor General
Partner’s admission, the successor General Partner’s interest in all Partnership distributions and
allocations shall be 2%.




			
	Section 11.4	 	Termination of Subordination Period, Conversion of Subordinated Units and
Extinguishment of Cumulative Common Unit Arrearages.





     Notwithstanding any provision of this Agreement, if the General Partner is removed as general
partner of the Partnership under circumstances where Cause does not exist and Units held by the
General Partner and its Affiliates are not voted in favor of such removal, (i) the Subordination
Period will end and all Outstanding Subordinated Units will immediately and automatically convert
into Common Units on a one-for-one basis and (ii) all Cumulative Common Unit Arrearages on the
Common Units will be extinguished.




			
	Section 11.5	 	Withdrawal of Limited Partners.





     No Limited Partner shall have any right to withdraw from the Partnership; provided, however,
that when a transferee of a Limited Partner’s Limited Partner Interest becomes a Record Holder of
the Limited Partner Interest so transferred, such transferring Limited Partner shall cease to be a
Limited Partner with respect to the Limited Partner Interest so transferred.



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ARTICLE
XII




DISSOLUTION
AND LIQUIDATION





			
	Section 12.1	 	Dissolution.





     The Partnership shall not be dissolved by the admission of Substituted Limited Partners or
Additional Limited Partners or by the admission of a successor General Partner in accordance with
the terms of this Agreement. Upon the removal or withdrawal of the General Partner, if a successor
General Partner is elected pursuant to Section 11.1 or 11.2, the Partnership shall not be dissolved
and such successor General Partner shall continue the business of the Partnership. The Partnership
shall dissolve, and (subject to Section 12.2) its affairs shall be wound up, upon:



     (a) an Event of Withdrawal of the General Partner as provided in Section 11.1(a) (other than
Section 11.1(a)(ii)), unless a successor is elected and an Opinion of Counsel is received as
provided in Section 11.1(b) or 11.2 and such successor is admitted to the Partnership pursuant to
Section 10.3;



     (b) an election to dissolve the Partnership by the General Partner that is approved by the
holders of a Unit Majority;



     (c) the entry of a decree of judicial dissolution of the Partnership pursuant to the
provisions of the Delaware Act; or



     (d) the sale, exchange or disposition of all or substantially all of the assets and properties
of the Partnership Group.




			
	Section 12.2	 	Continuation of the Business of the Partnership After Dissolution.





     Upon (a) dissolution of the Partnership following an Event of Withdrawal caused by the
withdrawal or removal of the General Partner as provided in Section 11.1(a)(i) or (iii) and the
failure of the Partners to select a successor to such Departing Partner pursuant to Section 11.1 or
11.2, then within 90 days thereafter, or (b) dissolution of the Partnership upon an event
constituting an Event of Withdrawal as defined in Section 11.1(a)(iv), (v) or (vi), then, to the
maximum extent permitted by law, within 180 days thereafter, the holders of a Unit Majority may
elect to reconstitute the Partnership and continue its business on the same terms and conditions
set forth in this Agreement by forming a new limited partnership on terms identical to those set
forth in this Agreement and having as the successor General partner a Person approved by the
holders of a Unit Majority. Unless such an election is made within the applicable time period as
set forth above, the Partnership shall conduct only activities necessary to wind up its affairs. If
such an election is so made, then:




     (i) the reconstituted Partnership shall continue unless earlier dissolved in accordance
with this Article XII;



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     (ii) if the successor General Partner is not the former General Partner, then the
interest of the former General Partner shall be treated in the manner provided in Section
11.3; and




     (iii) all necessary steps shall be taken to cancel this Agreement and the Certificate
of Limited Partnership and to enter into and, as necessary, to file a new partnership
agreement and certificate of limited partnership, and the successor General Partner may for
this purpose exercise the powers of attorney granted the General Partner pursuant to Section
2.6; provided, that the right of the holders of a Unit Majority to approve a successor
General Partner and to reconstitute and to continue the business of the Partnership shall
not exist and may not be exercised unless the Partnership has received an Opinion of Counsel
that (x) the exercise of the right would not result in the loss of limited liability of any
Limited Partner and (y) neither the Partnership, the reconstituted limited partnership nor
the Operating Company or any other Group Member would be treated as an association taxable
as a corporation or otherwise be taxable as an entity for federal income tax purposes upon
the exercise of such right to continue.




			
	Section 12.3	 	Liquidator.





     Upon dissolution of the Partnership, unless the Partnership is continued under an election to
reconstitute and continue the Partnership pursuant to Section 12.2, the General Partner shall
select one or more Persons to act as Liquidator. The Liquidator (if other than the General Partner)
shall be entitled to receive such compensation for its services as may be approved by holders of at
least a majority of the Outstanding Common Units and Subordinated Units voting
as a single class. The Liquidator (if other than the General Partner) shall agree not to
resign at any time without 15 days’ prior notice and may be removed at any time, with or without
cause, by notice of removal approved by holders of at least a majority of the Outstanding Common
Units and Subordinated Units voting as a single class. Upon dissolution, removal or resignation of
the Liquidator, a successor and substitute Liquidator (who shall have and succeed to all rights,
powers and duties of the original Liquidator) shall within 30 days thereafter be approved by
holders of at least a majority of the Outstanding Common Units and Subordinated Units voting as a
single class. The right to approve a successor or substitute Liquidator in the manner provided
herein shall be deemed to refer also to any such successor or substitute Liquidator approved in the
manner herein provided. Except as expressly provided in this Article XII, the Liquidator approved
in the manner provided herein shall have and may exercise, without further authorization or consent
of any of the parties hereto, all of the powers conferred upon the General Partner under the terms
of this Agreement (but subject to all of the applicable limitations, contractual and otherwise,
upon the exercise of such powers, other than the limitation on sale set forth in Section 7.3(b)) to
the extent necessary or desirable in the good faith judgment of the Liquidator to carry out the
duties and functions of the Liquidator hereunder for and during such period of time as shall be
reasonably required in the good faith judgment of the Liquidator to complete the winding up and
liquidation of the Partnership as provided for herein.



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	Section 12.4	 	Liquidation.





     The Liquidator shall proceed to dispose of the assets of the Partnership, discharge its
liabilities, and otherwise wind up its affairs in such manner and over such period as the
Liquidator determines to be in the best interest of the Partners, subject to Section 17-804 of the
Delaware Act and the following:



     (a) The assets may be disposed of by public or private sale or by distribution in kind to one
or more Partners on such terms as the Liquidator and such Partner or Partners may agree. If any
property is distributed in kind, the Partner receiving the property shall be deemed for purposes of
Section 12.4(c) to have received cash equal to its fair market value; and contemporaneously
therewith, appropriate cash distributions must be made to the other Partners. The Liquidator may,
in its absolute discretion, defer liquidation or distribution of the Partnership’s assets for a
reasonable time if it determines that an immediate sale or distribution of all or some of the
Partnership’s assets would be impractical or would cause undue loss to the Partners. The Liquidator
may, in its absolute discretion, distribute the Partnership’s assets, in whole or in part, in kind
if it determines that a sale would be impractical or would cause undue loss to the Partners.



     (b) Liabilities of the Partnership include amounts owed to the Liquidator as compensation for
serving in such capacity (subject to the terms of Section 12.3) and amounts to Partners otherwise
than in respect of their distribution rights under Article VI. With respect to any liability that
is contingent, conditional or unmatured or is otherwise not yet due and payable, the Liquidator
shall either settle such claim for such amount as it thinks appropriate or establish a reserve of
cash or other assets to provide for its payment. When paid, any unused portion of the reserve shall
be distributed as additional liquidation proceeds.



     (c) All property and all cash in excess of that required to discharge liabilities as provided
in Section 12.4(b) shall be distributed to the Partners in accordance with, and to the extent of,
the positive balances in their respective Capital Accounts, as determined after taking into account
all Capital Account adjustments (other than those made by reason of distributions pursuant to this
Section 12.4(c)) for the taxable year of the Partnership during which the liquidation of the
Partnership occurs (with such date of occurrence being determined pursuant to Treasury Regulation
Section 1.704-1(b)(2)(ii)(g)), and such distribution shall be made by the end of such taxable year
(or, if later, within 90 days after said date of such occurrence).




			
	Section 12.5	 	Cancellation of Certificate of Limited Partnership.





     Upon the completion of the distribution of Partnership cash and property as provided in
Section 12.4 in connection with the liquidation of the Partnership, the Partnership shall be
terminated and the Certificate of Limited Partnership and all qualifications of the Partnership as
a foreign limited partnership in jurisdictions other than the State of Delaware shall be canceled
and such other actions as may be necessary to terminate the Partnership shall be taken.



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	Section 12.6	 	Return of Contributions.





     The General Partner shall not be personally liable for, and shall have no obligation to
contribute or loan any monies or property to the Partnership to enable it to effectuate, the return
of the Capital Contributions of the Limited Partners or Unitholders, or any portion thereof, it
being expressly understood that any such return shall be made solely from Partnership assets.




			
	Section 12.7	 	Waiver of Partition.





     To the maximum extent permitted by law, each Partner hereby waives any right to partition of
the Partnership property.




			
	Section 12.8	 	Capital Account Restoration.





     No Limited Partner shall have any obligation to restore any negative balance in its Capital
Account upon liquidation of the Partnership. The General Partner shall be obligated to restore any
negative balance in its Capital Account upon liquidation of its interest in the Partnership by the
end of the taxable year of the Partnership during which such liquidation occurs, or, if later,
within 90 days after the date of such liquidation.



ARTICLE
XIII




AMENDMENT
OF PARTNERSHIP AGREEMENT; MEETINGS; RECORD DATE





			
	Section 13.1	 	Amendment to be Adopted Solely by the General Partner.





     Each Partner agrees that the General Partner, without the approval of any Partner or Assignee,
may amend any provision of this Agreement and execute, swear to, acknowledge, deliver, file and
record whatever documents may be required in connection therewith, to reflect:



     (a) a change in the name of the Partnership, the location of the principal place of business
of the Partnership, the registered agent of the Partnership or the registered office of the
Partnership;



     (b) admission, substitution, withdrawal or removal of Partners in accordance with this
Agreement;



     (c) a change that, in the sole discretion of the General Partner, is necessary or advisable to
qualify or continue the qualification of the Partnership as a limited partnership or a partnership
in which the Limited Partners have limited liability under the laws of any state or to ensure that
the Group Members will not be treated as associations taxable as corporations or otherwise taxed as
entities for federal income tax purposes;



     (d) a change that, in the discretion of the General Partner, (i) does not adversely affect the
Limited Partners (including any particular class of Partnership Interests as compared to other
classes of Partnership Interests) in any material respect, (ii) is necessary or advisable to (A)
satisfy any requirements, conditions or guidelines contained in any opinion, directive, order,



95









 







ruling or regulation of any federal or state agency or judicial authority or contained in any
federal or state statute (including the Delaware Act) or (B) facilitate the trading of the Units
(including the division of any class or classes of Outstanding Units into different classes to
facilitate uniformity of tax consequences within such classes of Units) or comply with any rule,
regulation, guideline or requirement of any National Securities Exchange on which the Units are or
will be listed for trading, compliance with any of which the General Partner determines in its
discretion to be in the best interests of the Partnership and the Limited Partners, (iii) is
necessary or advisable in connection with action taken by the General Partner pursuant to Section
5.10 or (iv) is required to effect the intent expressed in the Registration Statement or the intent
of the provisions of this Agreement or is otherwise contemplated by this Agreement;



     (e) a change in the fiscal year or taxable year of the Partnership and any changes that, in
the discretion of the General Partner, are necessary or advisable as a result of a change in the
fiscal year or taxable year of the Partnership including, if the General Partner shall so
determine, a change in the definition of “Quarter” and the dates on which distributions are to be
made by the Partnership;



     (f) an amendment that is necessary, in the Opinion of Counsel, to prevent the Partnership, or
the General Partner or its directors, officers, trustees or agents from in any manner being
subjected to the provisions of the Investment Company Act of 1940, as amended, the Investment
Advisers Act of 1940, as amended, or “plan asset” regulations adopted under the Employee Retirement
Income Security Act of 1974, as amended, regardless of whether such are substantially similar to
plan asset regulations currently applied or proposed by the United States Department of Labor;



     (g) subject to the terms of Section 5.7, an amendment that, in the discretion of the General
Partner, is necessary or advisable in connection with the authorization of issuance of any class or
series of Partnership Securities pursuant to Section 5.6;



     (h) any amendment expressly permitted in this Agreement to be made by the General Partner
acting alone;



     (i) an amendment effected, necessitated or contemplated by a Merger Agreement approved in
accordance with Section 14.3;



     (j) an amendment that, in the discretion of the General Partner, is necessary or advisable to
reflect, account for and deal with appropriately the formation by the Partnership of, or investment
by the Partnership in, any corporation, partnership, joint venture, limited liability company or
other entity, in connection with the conduct by the Partnership of activities permitted by the
terms of Section 2.4;



     (k) a merger or conveyance pursuant to Section 14.3(d); or



     (l) any other amendments substantially similar to the foregoing.



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	Section 13.2	 	Amendment Procedures.





     Except as provided in Sections 13.1 and 13.3, all amendments to this Agreement shall be made
in accordance with the following requirements. Amendments to this Agreement may be proposed only by
or with the consent of the General Partner which consent may be given or withheld in its sole
discretion. A proposed amendment shall be effective upon its approval by the holders of a Unit
Majority, unless a greater or different percentage is required under this Agreement or by Delaware
law. Each proposed amendment that requires the approval of the holders of a specified percentage of
Outstanding Units shall be set forth in a writing that contains the text of the proposed amendment.
If such an amendment is proposed, the General Partner shall seek the written approval of the
requisite percentage of Outstanding Units or call a meeting of the Unitholders to consider and vote
on such proposed amendment. The General Partner shall notify all Record Holders upon final adoption
of any such proposed amendments.




			
	Section 13.3	 	Amendment Requirements.





     (a) Notwithstanding the provisions of Sections 13.1 and 13.2, no provision of this Agreement
that establishes a percentage of Outstanding Units (including Units deemed owned by the General
Partner) required to take any action shall be amended, altered, changed, repealed or rescinded in
any respect that would have the effect of reducing such voting percentage unless such amendment is
approved by the written consent or the affirmative vote of holders of Outstanding Units whose
aggregate Outstanding Units constitute not less than the voting requirement sought to be reduced.



     (b) Notwithstanding the provisions of Sections 13.1 and 13.2, no amendment to this Agreement
may (i) enlarge the obligations of any Limited Partner without its consent, unless such shall be
deemed to have occurred as a result of an amendment approved pursuant to Section 13.3(c), (ii)
enlarge the obligations of, restrict in any way any action by or rights of, or reduce in any way
the amounts distributable, reimbursable or otherwise payable to, the General Partner or any of its
Affiliates without its consent, which consent may be given or withheld in its sole discretion,
(iii) change Section 12.1(b), or (iv) change the term of the Partnership or, except as set forth in
Section 12.1(b), give any Person the right to dissolve the Partnership.



     (c) Except as provided in Section 14.3, and without limitation of the General Partner’s
authority to adopt amendments to this Agreement without the approval of any Partners or Assignees
as contemplated in Section 13.1, any amendment that would have a material adverse effect on the
rights or preferences of any class of Partnership Interests in relation to other classes of
Partnership Interests must be approved by the holders of not less than a majority of the
Outstanding Partnership Interests of the class affected.



     (d) Notwithstanding any other provision of this Agreement, except for amendments pursuant to
Section 13.1 and except as otherwise provided by Section 14.3(b), no amendments shall become
effective without the approval of the holders of at least 90% of the Outstanding Units voting as a
single class unless the Partnership obtains an Opinion of Counsel to the effect that such amendment
will not affect the limited liability of any Limited Partner under applicable law.



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     (e) Except as provided in Section 13.1, this Section 13.3 shall only be amended with the
approval of the holders of at least 90% of the Outstanding Units.




			
	Section 13.4	 	Special Meetings.





     All acts of Limited Partners to be taken pursuant to this Agreement shall be taken in the
manner provided in this Article XIII. Special meetings of the Limited Partners may be called by the
General Partner or by Limited Partners owning 20% or more of the Outstanding Units of the class or
classes for which a meeting is proposed. Limited Partners shall call a special meeting by
delivering to the General Partner one or more requests in writing stating that the signing Limited
Partners wish to call a special meeting and indicating the general or specific purposes for which
the special meeting is to be called. Within 60 days after receipt of such a call from Limited
Partners or within such greater time as may be reasonably necessary for the Partnership to comply
with any statutes, rules, regulations, listing agreements or similar requirements governing the
holding of a meeting or the solicitation of proxies for use at such a meeting, the General Partner
shall send a notice of the meeting to the Limited Partners either directly or indirectly through
the Transfer Agent. A meeting shall be held at a time and place determined by the General Partner
on a date not less than 10 days nor more than 60 days after the mailing of notice of the meeting.
Limited Partners shall not vote on matters that would cause the Limited Partners to be deemed to be
taking part in the management and control of the business and affairs of the Partnership so as to
jeopardize the Limited Partners’ limited liability under the Delaware Act or the law of any other
state in which the Partnership is qualified to do business.




			
	Section 13.5	 	Notice of a Meeting.





     Notice of a meeting called pursuant to Section 13.4 shall be given to the Record Holders of
the class or classes of Units for which a meeting is proposed in writing by mail or other means of
written communication in accordance with Section 16.1. The notice shall be deemed to have been
given at the time when deposited in the mail or sent by other means of written communication.




			
	Section 13.6	 	Record Date.





     For purposes of determining the Limited Partners entitled to notice of or to vote at a meeting
of the Limited Partners or to give approvals without a meeting as provided in Section 13.11 the
General Partner may set a Record Date, which shall not be less than 10 nor more than 60 days before
(a) the date of the meeting (unless such requirement conflicts with any rule, regulation, guideline
or requirement of any National Securities Exchange on which the Units are listed for trading, in
which case the rule, regulation, guideline or requirement of such exchange shall govern) or (b) in
the event that approvals are sought without a meeting, the date by which Limited Partners are
requested in writing by the General Partner to give such approvals.




			
	Section 13.7	 	Adjournment.





     When a meeting is adjourned to another time or place, notice need not be given of the
adjourned meeting and a new Record Date need not be fixed, if the time and place thereof are



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announced at the meeting at which the adjournment is taken, unless such adjournment shall be
for more than 45 days. At the adjourned meeting, the Partnership may transact any business which
might have been transacted at the original meeting. If the adjournment is for more than 45 days or
if a new Record Date is fixed for the adjourned meeting, a notice of the adjourned meeting shall be
given in accordance with this Article XIII.




			
	Section 13.8	 	Waiver of Notice; Approval of Meeting; Approval of Minutes.





     The transactions of any meeting of Limited Partners, however called and noticed, and whenever
held, shall be as valid as if it had occurred at a meeting duly held after regular call and notice,
if a quorum is present either in person or by proxy, and if, either before or after the meeting,
Limited Partners representing such quorum who were present in person or by proxy and entitled to
vote, sign a written waiver of notice or an approval of the holding of the meeting or an approval
of the minutes thereof. All waivers and approvals shall be filed with the Partnership records or
made a part of the minutes of the meeting. Attendance of a Limited Partner at a meeting shall
constitute a waiver of notice of the meeting, except when the Limited Partner does not approve, at
the beginning of the meeting, of the transaction of any business because the meeting is not
lawfully called or convened; and except that attendance at a meeting is not a waiver of any right
to disapprove the consideration of matters required to be included in the notice of the meeting,
but not so included, if the disapproval is expressly made at the meeting.




			
	Section 13.9	 	Quorum.





     The holders of a majority of the Outstanding Units of the class or classes for which a meeting
has been called (including Outstanding Units deemed owned by the General Partner) represented in
person or by proxy shall constitute a quorum at a meeting of Limited Partners of such class or
classes unless any such action by the Limited Partners requires approval by holders of a greater
percentage of such Units, in which case the quorum shall be such greater percentage. At any meeting
of the Limited Partners duly called and held in accordance with this Agreement at which a quorum is
present, the act of Limited Partners holding Outstanding Units that in the aggregate represent a
majority of the Outstanding Units entitled to vote and be present in person
or by proxy at such meeting shall be deemed to constitute the act of all Limited Partners,
unless a greater or different percentage is required with respect to such action under the
provisions of this Agreement, in which case the act of the Limited Partners holding Outstanding
Units that in the aggregate represent at least such greater or different percentage shall be
required. The Limited Partners present at a duly called or held meeting at which a quorum is
present may continue to transact business until adjournment, notwithstanding the withdrawal of
enough Limited Partners to leave less than a quorum, if any action taken (other than adjournment)
is approved by the required percentage of Outstanding Units specified in this Agreement (including
Outstanding Units deemed owned by the General Partner). In the absence of a quorum any meeting of
Limited Partners may be adjourned from time to time by the affirmative vote of holders of at least
a majority of the Outstanding Units entitled to vote at such meeting (including Outstanding Units
deemed owned by the General Partner) represented either in person or by proxy, but no other
business may be transacted, except as provided in Section 13.7.



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	Section 13.10	 	Conduct of a Meeting.





     The General Partner shall have full power and authority concerning the manner of conducting
any meeting of the Limited Partners or solicitation of approvals in writing, including the
determination of Persons entitled to vote, the existence of a quorum, the satisfaction of the
requirements of Section 13.4, the conduct of voting, the validity and effect of any proxies and the
determination of any controversies, votes or challenges arising in connection with or during the
meeting or voting. The General Partner shall designate a Person to serve as chairman of any meeting
and shall further designate a Person to take the minutes of any meeting. All minutes shall be kept
with the records of the Partnership maintained by the General Partner. The General Partner may make
such other regulations consistent with applicable law and this Agreement as it may deem advisable
concerning the conduct of any meeting of the Limited Partners or solicitation of approvals in
writing, including regulations in regard to the appointment of proxies, the appointment and duties
of inspectors of votes and approvals, the submission and examination of proxies and other evidence
of the right to vote, and the revocation of approvals in writing.




			
	Section 13.11	 	Action Without a Meeting.





     If authorized by the General Partner, any action that may be taken at a meeting of the Limited
Partners may be taken without a meeting if an approval in writing setting forth the action so taken
is signed by Limited Partners owning not less than the minimum percentage of the Outstanding Units
(including Units deemed owned by the General Partner) that would be necessary to authorize or take
such action at a meeting at which all the Limited Partners were present and voted (unless such
provision conflicts with any rule, regulation, guideline or requirement of any National Securities
Exchange on which the Units are listed for trading, in which case the rule, regulation, guideline
or requirement of such exchange shall govern). Prompt notice of the taking of action without a
meeting shall be given to the Limited Partners who have not approved in writing. The General
Partner may specify that any written ballot submitted to Limited Partners for the purpose of taking
any action without a meeting shall be returned to the Partnership within the time period, which
shall be not less than 20 days, specified by the General Partner. If a ballot returned to the
Partnership does not vote all of the Units held by the Limited Partners, the Partnership shall be
deemed to have failed to receive a ballot for the Units that were not voted. If approval of the
taking of any action by the Limited Partners is solicited by any
Person other than by or on behalf of the General Partner, the written approvals shall have no
force and effect unless and until (a) they are deposited with the Partnership in care of the
General Partner, (b) approvals sufficient to take the action proposed are dated as of a date not
more than 90 days prior to the date sufficient approvals are deposited with the Partnership and (c)
an Opinion of Counsel is delivered to the General Partner to the effect that the exercise of such
right and the action proposed to be taken with respect to any particular matter (i) will not cause
the Limited Partners to be deemed to be taking part in the management and control of the business
and affairs of the Partnership so as to jeopardize the Limited Partners’ limited liability, and
(ii) is otherwise permissible under the state statutes then governing the rights, duties and
liabilities of the Partnership and the Partners.



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	Section 13.12	 	Voting and Other Rights.





     (a) Only those Record Holders of the Units on the Record Date set pursuant to Section 13.6
(and also subject to the limitations contained in the definition of “Outstanding”) shall be
entitled to notice of, and to vote at, a meeting of Limited Partners or to act with respect to
matters as to which the holders of the Outstanding Units have the right to vote or to act. All
references in this Agreement to votes of, or other acts that may be taken by, the Outstanding Units
shall be deemed to be references to the votes or acts of the Record Holders of such Outstanding
Units.



     (b) With respect to Units that are held for a Person’s account by another Person (such as a
broker, dealer, bank, trust company or clearing corporation, or an agent of any of the foregoing),
in whose name such Units are registered, such other Person shall, in exercising the voting rights
in respect of such Units on any matter, and unless the arrangement between such Persons provides
otherwise, vote such Units in favor of, and at the direction of, the Person who is the beneficial
owner, and the Partnership shall be entitled to assume it is so acting without further inquiry. The
provisions of this Section 13.12(b) (as well as all other provisions of this Agreement) are subject
to the provisions of Section 4.3.



ARTICLE
XIV




MERGER





			
	Section 14.1	 	Authority.





     The Partnership may merge or consolidate with one or more corporations, limited liability
companies, business trusts or associations, real estate investment trusts, common law trusts or
unincorporated businesses, including a general partnership or limited partnership, formed under the
laws of the State of Delaware or any other state of the United States of America, pursuant to a
written agreement of merger or consolidation (“Merger Agreement”) in accordance with this Article
XIV.




			
	Section 14.2	 	Procedure for Merger or Consolidation.





     Merger or consolidation of the Partnership pursuant to this Article XIV requires the prior
approval of the General Partner. If the General Partner shall determine, in the exercise of its
discretion, to consent to the merger or consolidation, the General Partner shall approve the
Merger Agreement, which shall set forth:



     (a) the names and jurisdictions of formation or organization of each of the business entities
proposing to merge or consolidate;



     (b) the name and jurisdiction of formation or organization of the business entity that is to
survive the proposed merger or consolidation (the “Surviving Business Entity”);



     (c) the terms and conditions of the proposed merger or consolidation;



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     (d) the manner and basis of exchanging or converting the equity securities of each constituent
business entity for, or into, cash, property or general or limited partner interests, rights,
securities or obligations of the Surviving Business Entity; and (i) if any general or limited
partner interests, securities or rights of any constituent business entity are not to be exchanged
or converted solely for, or into, cash, property or general or limited partner interests, rights,
securities or obligations of the Surviving Business Entity, the cash, property or general or
limited partner interests, rights, securities or obligations of any limited partnership,
corporation, trust or other entity (other than the Surviving Business Entity) which the holders of
such general or limited partner interests, securities or rights are to receive in exchange for, or
upon conversion of their general or limited partner interests, securities or rights, and (ii) in
the case of securities represented by certificates, upon the surrender of such certificates, which
cash, property or general or limited partner interests, rights, securities or obligations of the
Surviving Business Entity or any general or limited partnership, corporation, trust or other entity
(other than the Surviving Business Entity), or evidences thereof, are to be delivered;



     (e) a statement of any changes in the constituent documents or the adoption of new constituent
documents (the articles or certificate of incorporation, articles of trust, declaration of trust,
certificate or agreement of limited partnership or other similar charter or governing document) of
the Surviving Business Entity to be effected by such merger or consolidation;



     (f) the effective time of the merger, which may be the date of the filing of the certificate
of merger pursuant to Section 14.4 or a later date specified in or determinable in accordance with
the Merger Agreement (provided, that if the effective time of the merger is to be later than the
date of the filing of the certificate of merger, the effective time shall be fixed no later than
the time of the filing of the certificate of merger and stated therein); and



     (g) such other provisions with respect to the proposed merger or consolidation as are deemed
necessary or appropriate by the General Partner.




			
	Section 14.3	 	Approval by Limited Partners of Merger or Consolidation.





     (a) Except as provided in Section 14.3(d), the General Partner, upon its approval of the
Merger Agreement, shall direct that the Merger Agreement be submitted to a vote of Limited
Partners, whether at a special meeting or by written consent, in either case in accordance with the
requirements of Article XIII. A copy or a summary of the Merger Agreement shall be included in or
enclosed with the notice of a special meeting or the written consent.



     (b) Except as provided in Section 14.3(d), the Merger Agreement shall be approved upon
receiving the affirmative vote or consent of the holders of a Unit Majority unless the Merger
Agreement contains any provision that, if contained in an amendment to this Agreement, the
provisions of this Agreement or the Delaware Act would require for its approval the vote or consent
of a greater percentage of the Outstanding Units or of any class of Limited Partners, in which case
such greater percentage vote or consent shall be required for approval of the Merger Agreement.



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     (c) Except as provided in Section 14.3(d), after such approval by vote or consent of the
Limited Partners, and at any time prior to the filing of the certificate of merger pursuant to
Section 14.4, the merger or consolidation may be abandoned pursuant to provisions therefor, if any,
set forth in the Merger Agreement.



     (d) Notwithstanding anything else contained in this Article XIV or in this Agreement, the
General Partner is permitted, in its discretion, without Limited Partner approval, to convert the
Partnership or any Group Member into a new limited liability entity, to merge the Partnership or
any Group Member into, or convey all of the Partnership’s assets to, another limited liability
entity which shall be newly formed and shall have no assets, liabilities or operations at the time
of such Merger other than those it receives from the Partnership or other Group Member if (i) the
General Partner has received an Opinion of Counsel that the conversion, merger or conveyance, as
the case may be, would not result in the loss of the limited liability of any Limited Partner or
any Group Member or cause the Partnership or any Group Member to be treated as an association
taxable as a corporation or otherwise to be taxed as an entity for federal income tax purposes (to
the extent not previously treated as such), (ii) the sole purpose of such conversion, merger or
conveyance is to effect a mere change in the legal form of the Partnership into another limited
liability entity and (iii) the governing instruments of the new entity provide the Limited Partners
and the General Partner with the same rights and obligations as are herein contained.




			
	Section 14.4	 	Certificate of Merger.





     Upon the required approval by the General Partner and the Unitholders of a Merger Agreement, a
certificate of merger shall be executed and filed with the Secretary of State of the State of
Delaware in conformity with the requirements of the Delaware Act.




			
	Section 14.5	 	Effect of Merger.





     (a) At the effective time of the certificate of merger:




     (i) all of the rights, privileges and powers of each of the business entities that has
merged or consolidated, and all property, real, personal and mixed, and all debts due to any
of those business entities and all other things and causes of action belonging to each of
those business entities, shall be vested in the Surviving Business Entity and after the
merger or consolidation shall be the property of the Surviving Business Entity to the extent
they were of each constituent business entity;




     (ii) the title to any real property vested by deed or otherwise in any of those
constituent business entities shall not revert and is not in any way impaired because of the
merger or consolidation;




     (iii) all rights of creditors and all liens on or security interests in property of any
of those constituent business entities shall be preserved unimpaired; and




     (iv) all debts, liabilities and duties of those constituent business entities shall
attach to the Surviving Business Entity and may be enforced against it to the same extent as
if the debts, liabilities and duties had been incurred or contracted by it.



103









 





     (b) A merger or consolidation effected pursuant to this Article shall not be deemed to result
in a transfer or assignment of assets or liabilities from one entity to another.



ARTICLE
XV




RIGHT
TO ACQUIRE LIMITED PARTNER INTERESTS





			
	Section 15.1	 	Right to Acquire Limited Partner Interests.





     (a) Notwithstanding any other provision of this Agreement, if at any time the General Partner
and its Affiliates hold more than 80% of the total Limited Partner Interests of any class then
Outstanding, the General Partner shall then have the right, which right it may assign and transfer
in whole or in part to the Partnership or any Affiliate of the General Partner, exercisable in its
sole discretion, to purchase all, but not less than all, of such Limited Partner Interests of such
class then Outstanding held by Persons other than the General Partner and its Affiliates, at the
greater of (x) the Current Market Price as of the date three days prior to the date that the notice
described in Section 15.1(b) is mailed and (y) the highest price paid by the General Partner or any
of its Affiliates for any such Limited Partner Interest of such class purchased during the 90-day
period preceding the date that the notice described in Section 15.1(b) is mailed. As used in this
Agreement, (i) “Current Market Price” as of any date of any class of Limited Partner Interests
means the average of the daily Closing Prices (as hereinafter defined) per Limited Partner Interest
of such class for the 20 consecutive Trading Days (as hereinafter defined) immediately prior to
such date; (ii) “Closing Price” for any day means the last sale price on such day, regular way, or
in case no such sale takes place on such day, the average of the closing bid and asked prices on
such day, regular way, in either case as reported in the principal consolidated transaction
reporting system with respect to securities listed or admitted for trading on the principal
National Securities Exchange (other than the Nasdaq Stock Market) on which such Limited Partner
Interests of such class are listed or admitted to trading or, if such Limited Partner Interests of
such class are not listed or admitted to trading on any National Securities Exchange (other than
the Nasdaq Stock Market), the last quoted price on such day or, if not so quoted, the average of
the high bid and low asked prices on such day in the over-the-counter market, as reported by the
Nasdaq Stock Market or such other system then in use, or, if on any such day such Limited Partner
Interests of such class are not quoted by any such organization, the average of the closing bid and
asked prices on such day as furnished by a professional market maker making a market in such
Limited Partner Interests of such class selected by the General Partner, or if on any such day no
market maker is making a market in such Limited Partner Interests of such class, the fair value of
such Limited Partner Interests on such day as determined reasonably and in good faith by the
General Partner; and (iii) “Trading Day” means a day on which the principal National Securities
Exchange on which such Limited Partner Interests of any class are listed or admitted to trading is
open for the transaction of business or, if Limited Partner
Interests of a class are not listed or admitted to trading on any National Securities
Exchange, a day on which banking institutions in New York City generally are open.



     (b) If the General Partner, any Affiliate of the General Partner or the Partnership elects to
exercise the right to purchase Limited Partner Interests granted pursuant to Section 15.1(a), the
General Partner shall deliver to the Transfer Agent notice of such election to



104









 







purchase (the “Notice of Election to Purchase”) and shall cause the Transfer Agent to mail a
copy of such Notice of Election to Purchase to the Record Holders of Limited Partner Interests of
such class (as of a Record Date selected by the General Partner) at least 10, but not more than 60,
days prior to the Purchase Date. Such Notice of Election to Purchase shall also be published for a
period of at least three consecutive days in at least two daily newspapers of general circulation
printed in the English language and published in the Borough of Manhattan, New York. The Notice of
Election to Purchase shall specify the Purchase Date and the price (determined in accordance with
Section 15.1(a)) at which Limited Partner Interests will be purchased and state that the General
Partner, its Affiliate or the Partnership, as the case may be, elects to purchase such Limited
Partner Interests, upon surrender of Certificates representing such Limited Partner Interests in
exchange for payment, at such office or offices of the Transfer Agent as the Transfer Agent may
specify, or as may be required by any National Securities Exchange on which such Limited Partner
Interests are listed or admitted to trading. Any such Notice of Election to Purchase mailed to a
Record Holder of Limited Partner Interests at his address as reflected in the records of the
Transfer Agent shall be conclusively presumed to have been given regardless of whether the owner
receives such notice. On or prior to the Purchase Date, the General Partner, its Affiliate or the
Partnership, as the case may be, shall deposit with the Transfer Agent cash in an amount sufficient
to pay the aggregate purchase price of all of such Limited Partner Interests to be purchased in
accordance with this Section 15.1. If the Notice of Election to Purchase shall have been duly given
as aforesaid at least 10 days prior to the Purchase Date, and if on or prior to the Purchase Date
the deposit described in the preceding sentence has been made for the benefit of the holders of
Limited Partner Interests subject to purchase as provided herein, then from and after the Purchase
Date, notwithstanding that any Certificate shall not have been surrendered for purchase, all rights
of the holders of such Limited Partner Interests (including any rights pursuant to Articles IV, V,
VI, and XII) shall thereupon cease, except the right to receive the purchase price (determined in
accordance with Section 15.1(a)) for Limited Partner Interests therefor, without interest, upon
surrender to the Transfer Agent of the Certificates representing such Limited Partner Interests,
and such Limited Partner Interests shall thereupon be deemed to be transferred to the General
Partner, its Affiliate or the Partnership, as the case may be, on the record books of the Transfer
Agent and the Partnership, and the General Partner or any Affiliate of the General Partner, or the
Partnership, as the case may be, shall be deemed to be the owner of all such Limited Partner
Interests from and after the Purchase Date and shall have all rights as the owner of such Limited
Partner Interests (including all rights as owner of such Limited Partner Interests pursuant to
Articles IV, V, VI and XII).



     (c) At any time from and after the Purchase Date, a holder of an Outstanding Limited Partner
Interest subject to purchase as provided in this Section 15.1 may surrender his Certificate
evidencing such Limited Partner Interest to the Transfer Agent in exchange for payment of the
amount described in Section 15.1(a), therefor, without interest thereon.




105










 





ARTICLE XVI




GENERAL PROVISIONS



Section 16.1 Addresses and Notices.




     Any notice, demand, request, report or proxy materials required or permitted to be given or
made to a Partner or Assignee under this Agreement shall be in writing and shall be deemed given or
made when delivered in person or when sent by first class United States mail or by other means of
written communication to the Partner or Assignee at the address described below. Any notice,
payment or report to be given or made to a Partner or Assignee hereunder shall be deemed
conclusively to have been given or made, and the obligation to give such notice or report or to
make such payment shall be deemed conclusively to have been fully satisfied, upon sending of such
notice, payment or report to the Record Holder of such Partnership Securities at his address as
shown on the records of the Transfer Agent or as otherwise shown on the records of the Partnership,
regardless of any claim of any Person who may have an interest in such Partnership Securities by
reason of any assignment or otherwise. An affidavit or certificate of making of any notice, payment
or report in accordance with the provisions of this Section 16.1 executed by the General Partner,
the Transfer Agent or the mailing organization shall be prima facie evidence of the giving or
making of such notice, payment or report. If any notice, payment or report addressed to a Record
Holder at the address of such Record Holder appearing on the books and records of the Transfer
Agent or the Partnership is returned by the United States Postal Service marked to indicate that
the United States Postal Service is unable to deliver it, such notice, payment or report and any
subsequent notices, payments and reports shall be deemed to have been duly given or made without
further mailing (until such time as such Record Holder or another Person notifies the Transfer
Agent or the Partnership of a change in his address) if they are available for the Partner or
Assignee at the principal office of the Partnership for a period of one year from the date of the
giving or making of such notice, payment or report to the other Partners and Assignees. Any notice
to the Partnership shall be deemed given if received by the General Partner at the principal office
of the Partnership designated pursuant to Section 2.3. The General Partner may rely and shall be
protected in relying on any notice or other document from a Partner, Assignee or other Person if
believed by it to be genuine.


Section 16.2 Further Action.




     The parties shall execute and deliver all documents, provide all information and take or
refrain from taking action as may be necessary or appropriate to achieve the purposes of this
Agreement.


Section 16.3 Binding Effect.




     This Agreement shall be binding upon and inure to the benefit of the parties hereto and their
heirs, executors, administrators, successors, legal representatives and permitted assigns.



106









 




Section 16.4 Integration.




     This Agreement constitutes the entire agreement among the parties hereto pertaining to the
subject matter hereof and supersedes all prior agreements and understandings pertaining thereto.


Section 16.5 Creditors.




     None of the provisions of this Agreement shall be for the benefit of, or shall be enforceable
by, any creditor of the Partnership.


Section 16.6 Waiver.




     No failure by any party to insist upon the strict performance of any covenant, duty, agreement
or condition of this Agreement or to exercise any right or remedy consequent upon a breach thereof
shall constitute waiver of any such breach of any other covenant, duty, agreement or condition.


Section 16.7 Counterparts.




     This Agreement may be executed in counterparts, all of which together shall constitute an
agreement binding on all the parties hereto, notwithstanding that all such parties are not
signatories to the original or the same counterpart. Each party shall become bound by this
Agreement immediately upon affixing its signature hereto or, in the case of a Person acquiring a
Unit, upon accepting the certificate evidencing such Unit or executing and delivering a Transfer
Application as herein described, independently of the signature of any other party.


Section 16.8 Applicable Law.




     This Agreement shall be construed in accordance with and governed by the laws of the State of
Delaware, without regard to the principles of conflicts of law.


Section 16.9 Invalidity of Provisions.




     If any provision of this Agreement is or becomes invalid, illegal or unenforceable in any
respect, the validity, legality and enforceability of the remaining provisions contained herein
shall not be affected thereby.


Section 16.10 Consent of Partners.




     Each Partner hereby expressly consents and agrees that, whenever in this Agreement it is
specified that an action may be taken upon the affirmative vote or consent of less than all of the
Partners, such action may be so taken upon the concurrence of less than all of the Partners and
each Partner shall be bound by the results of such action.



107









 





     IN WITNESS WHEREOF, the General Partner has executed this Agreement as of the date first
written above.



	 	 	 	 	 
	 	GENERAL PARTNER:



NRP (GP) LP

 	 
	 	By:	GP Natural Resource Partners LLC, its general
partner	 
	 
	 	By:  	/s/ Nick Carter	 
	 	 	Nick Carter 	 
	 	 	President and Chief Operating Officer 	 
	 


NATURAL RESOURCE PARTNERS L.P.

SECOND AMENDED AND RESTATED AGREEMENT OF LIMITED PARTNERSHIP





 









 








EXHIBIT A

to the Second Amended and

Restated Agreement of Limited Partnership of

Natural Resource Partners L.P.

Certificate Evidencing Common Units

Representing Limited Partner Interests in

Natural Resource Partners L.P.




			
	 	 	 
	No.                     
	 	                     Common Units






     In accordance with Section 4.1 of the Second Amended and Restated Agreement of Limited
Partnership of Natural Resource Partners L.P., as amended, supplemented or restated from time to
time (the “Partnership Agreement”), Natural Resource Partners L.P., a Delaware limited partnership
(the “Partnership”), hereby certifies that                                          (the “Holder”) is the registered
owner of Common Units representing limited partner interests in the Partnership (the “Common
Units”) transferable on the books of the Partnership, in person or by duly authorized attorney,
upon surrender of this Certificate properly endorsed and accompanied by a properly executed
application for transfer of the Common Units represented by this Certificate. The rights,
preferences and limitations of the Common Units are set forth in, and this Certificate and the
Common Units represented hereby are issued and shall in all respects be subject to the terms and
provisions of, the Partnership Agreement. Copies of the Partnership Agreement are on file at, and
will be furnished without charge on delivery of written request to the Partnership at, the
principal office of the Partnership located at 601 Jefferson Street, Suite 3600, Houston, Texas
77002. Capitalized terms used herein but not defined shall have the meanings given them in the
Partnership Agreement.



     The Holder, by accepting this Certificate, is deemed to have (i) requested admission as, and
agreed to become, a Limited Partner and to have agreed to comply with and be bound by and to have
executed the Partnership Agreement, (ii) represented and warranted that the Holder has all right,
power and authority and, if an individual, the capacity necessary to enter into the Partnership
Agreement, (iii) granted the powers of attorney provided for in the Partnership Agreement and (iv)
made the waivers and given the consents and approvals contained in the Partnership Agreement.



 









 






     This Certificate shall not be valid for any purpose unless it has been countersigned and
registered by the Transfer Agent and Registrar.



	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	Dated:	 	 	 	 	 	Natural Resource Partners L.P.	 	 
	 

	 	 	 

	 	 	 	 	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	Countersigned and Registered by:	 	 	 	By:	 	 	 	NRP (GP) LP, its General Partner	 	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 

	 	 	 	 	 	 	 	 	 	 	 	By:
	 	GP Natural Resource Partners LLC, its General Partner	 	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 

	 	 	 	 	 	 	 	By: 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	 	 
	as Transfer Agent and Registrar	 	Name:	 	 	 	 	 	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	By: 

	 	 	 	 	 	 	 	By: 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	 	 	 
	 	 	 	 	Authorized Signature	 	 	 	 	 	 	 	Secretary	 	 






2









 






[Reverse of Certificate]




ABBREVIATIONS




     The following abbreviations, when used in the inscription on the face of this Certificate,
shall be construed as follows according to applicable laws or regulations:



	 	 	 	 	 	 	 	 	 	 	 
	TEN COM –	 	as tenants in common	 	 	 	UNIF GIFT/TRANSFERS MIN ACT
	TEN ENT –

	 	as tenants by the entireties
	 	 	 	 	 	Custodian 	 	 
	 

	 	 	 	 	 	 
	 	 	 
	 

	 	 	 	 	 	(Cust)
	 	 	(Minor)
	JT TEN –	 	as joint tenants with right of 

survivorship and not as


tenants in common	 	 	 	under Uniform Gifts/Transfers to CD 

Minors Act (State)
	 

	 	 	 	 	 	 	 	 	 





Additional abbreviations, though not in the above list, may also be used.




ASSIGNMENT OF COMMON UNITS

in

NATURAL RESOURCE PARTNERS L.P.

IMPORTANT NOTICE REGARDING INVESTOR RESPONSIBILITIES

DUE TO TAX SHELTER STATUS OF

NATURAL RESOURCE PARTNERS L.P.




     You have acquired an interest in Natural Resource Partners L.P., 601 Jefferson Street, Suite
3600, Houston Texas 77002, whose taxpayer identification number is 32-2164875. The Internal
Revenue Service has issued Natural Resource Partners L.P. the following tax shelter registration
number:                                         .



     YOU MUST REPORT THIS REGISTRATION NUMBER TO THE INTERNAL REVENUE SERVICE IF YOU CLAIM ANY
DEDUCTION, LOSS, CREDIT OR OTHER TAX BENEFIT OR REPORT ANY INCOME BY REASON OF YOUR INVESTMENT IN
NATURAL RESOURCE PARTNERS L.P.



     You must report the registration number as well as the name and taxpayer identification number
of Natural Resource Partners L.P. on Form 8271. FORM 8271 MUST BE ATTACHED TO THE RETURN ON WHICH
YOU CLAIM THE DEDUCTION, LOSS, CREDIT OR OTHER TAX BENEFIT OR REPORT ANY INCOME BY REASON OF YOUR
INVESTMENT IN NATURAL RESOURCE PARTNERS L.P.



     If you transfer your interest in Natural Resource Partners L.P. to another person, you are
required by the Internal Revenue Service to keep a list containing (a) that person’s name, address
and taxpayer identification number, (b) the date on which you transferred the interest and (c) the
name, address and tax shelter registration number of Natural Resource Partners L.P. If you do not
want to keep such a list, you must (1) send the information specified above to the Partnership,
which will keep the list for this tax shelter, and (2) give a copy of this notice to the person to
whom you transfer your interest. Your failure to comply with any of the above-



3









 





described responsibilities could result in the imposition of a penalty under Section 6707(b)
or 6708(a) of the Internal Revenue Code of 1986, as amended, unless such failure is shown to be due
to reasonable cause.




     ISSUANCE OF A REGISTRATION NUMBER DOES NOT INDICATE THAT THIS INVESTMENT OR THE CLAIMED TAX
BENEFITS HAVE BEEN REVIEWED, EXAMINED OR APPROVED BY THE INTERNAL REVENUE SERVICE.



     FOR VALUE RECEIVED,                      hereby assigns, conveys, sells and transfers unto



	 	 	 	 	 	 	 
	 

	 	 	 	 	 	 
	(Please print or typewrite name
and 

address of Assignee)

	 	 	(Please insert Social Security or other
identifying number of Assignee)	 	 
	 
	 	 	 	 	 	 
	                     Common Units representing limited partner interests evidenced by this Certificate, subject to the Partnership Agreement, and does hereby irrevocably constitute and appoint             
         as its attorney-in-fact with full power of substitution to transfer the same on the books of Natural Resource Partners L.P.
	 
	 	 	 	 	 	 
	Date:                     	 	NOTE:	 	The signature to any endorsement hereon must correspond with the name as written upon the face of this Certificate in every particular, without alteration, enlargement or change.
	 
	 	 	 	 	 	 
	SIGNATURE(S) MUST BE
GUARANTEED BY A MEMBER FIRM OF
THE NATIONAL ASSOCIATION OF
SECURITIES DEALERS, INC. OR BY
A COMMERCIAL BANK OR TRUST
COMPANY SIGNATURE(S)
GUARANTEED

	 	 	 	 	 
	 	 	 	 	 	 
	 	 	 	(Signature)	 	 
	 	 	 	 	 	 
	 	 	 	 	 	 
	 	 	 	 	 	 
	 	 	 	 	 	 
	 	 	 	 	 	 
	 	 	 	(Signature)	 	 
	 
	 	 	 	 	 	 
	 


	 	 	 	 	 	 






     No transfer of the Common Units evidenced hereby will be registered on the books of the
Partnership, unless the Certificate evidencing the Common Units to be transferred is surrendered
for registration or transfer and an Application for Transfer of Common Units has been executed by a
transferee either (a) on the form set forth below or (b) on a separate application that the
Partnership will furnish on request without charge. A transferor of the Common Units shall have no
duty to the transferee with respect to execution of the transfer application in order for such
transferee to obtain registration of the transfer of the Common Units.



4









 





APPLICATION FOR TRANSFER OF COMMON UNITS




     The undersigned (“Assignee”) hereby applies for transfer to the name of the Assignee of the
Common Units evidenced hereby.



     The Assignee (a) requests admission as a Substituted Limited Partner and agrees to comply with
and be bound by, and hereby executes, the Amended and Restated Agreement of Limited Partnership of
Natural Resource Partners L.P. (the “Partnership”), as amended, supplemented or restated to the
date hereof (the “Partnership Agreement”), (b) represents and warrants that the Assignee has all
right, power and authority and, if an individual, the capacity necessary to enter into the
Partnership Agreement, (c) appoints the General Partner of the Partnership and, if a Liquidator
shall be appointed, the Liquidator of the Partnership as the Assignee’s attorney-in-fact to
execute, swear to, acknowledge and file any document, including, without limitation, the
Partnership Agreement and any amendment thereto and the Certificate of Limited Partnership of the
Partnership and any amendment thereto, necessary or appropriate for the Assignee’s admission as a
Substituted Limited Partner and as a party to the Partnership Agreement, (d) gives the powers of
attorney provided for in the Partnership Agreement, and (e) makes the waivers and gives the
consents and approvals contained in the Partnership Agreement. Capitalized terms not defined herein
have the meanings assigned to such terms in the Partnership Agreement.



Date:                     



	 	 	 
	 

	 	 
	Social Security or other identifying number

	 	Signature of Assignee
	 
	 	 
	 

	 	 
	Purchase Price including commissions, if any

	 	Name and Address of Assignee





Type of Entity (check one):




	 	 	 	 	 	 	 	 	 	 	 	 	 
	 

	 	 ̈
	 	Individual
	 	 ̈
	 	Partnership
	 	 ̈
	 	Corporation
	 
	 	 	 	 	 	 	 	 	 	 	 	 
	 

	 	 ̈
	 	Trust
	 	 ̈
	 	Other (specify)	 	 	 	 





Nationality (check one):




	 	 	 	 	 	 	 	 	 	 
	 	 	 ̈	 	U.S. Citizen, Resident or Domestic Entity
	 
	 	 	 	 	 	 	 	 	 	 
	 

	 	 ̈
	 	Foreign Corporation
	 	 ̈
	 	Non-resident Alien	 	 






     If the U.S. Citizen, Resident or Domestic Entity box is checked, the following certification
must be completed.



     Under Section 1445(e) of the Internal Revenue Code of 1986, as amended (the “Code”), the
Partnership must withhold tax with respect to certain transfers of property if a holder of an
interest in the Partnership is a foreign person. To inform the Partnership that no withholding is



5









 




required with respect to the undersigned interestholder’s interest in it, the undersigned
hereby certifies the following (or, if applicable, certifies the following on behalf of the
interestholder).




Complete Either A or B:




	A.	 	Individual Interestholder






	 	1.	 	I am not a non-resident alien for purposes of U.S. income taxation.
	 
	 	2.	 	My U.S. taxpayer identification number (Social Security Number) is             .
	 
	 	3.	 	My home address is          
              
               
              
              
               .






	B.	 	Partnership, Corporation or Other Interestholder






	 	1.	 	                     is not a foreign corporation, foreign partnership, foreign
trust (Name of Interestholder) or foreign estate (as those terms are defined in the
Code and Treasury Regulations).
	 
	 	2.	 	The interestholder’s U.S. employer identification number is          
           .
	 
	 	3.	 	The interestholder’s office address and place of incorporation (if applicable)
is                     .





     The interestholder agrees to notify the Partnership within sixty (60) days of the date the
interestholder becomes a foreign person.



     The interestholder understands that this certificate may be disclosed to the Internal Revenue
Service by the Partnership and that any false statement contained herein could be punishable by
fine, imprisonment or both.



     Under penalties of perjury, I declare that I have examined this certification and to the best
of my knowledge and belief it is true, correct and complete and, if applicable, I further declare
that I have authority to sign this document on behalf of:



 





Name of Interestholder
 





Signature and Date



 





Title (if applicable)




     Note: If the Assignee is a broker, dealer, bank, trust company, clearing corporation, other
nominee holder or an agent of any of the foregoing, and is holding for the account of any other
person, this application should be completed by an officer thereof or, in the case of a broker or
dealer, by a registered representative who is a member of a registered national securities exchange
or a member of the National Association of Securities Dealers, Inc., or, in the case of



6









 




any other nominee holder, a person performing a similar function. If the Assignee is a
broker, dealer, bank, trust company, clearing corporation, other nominee owner or an agent of any
of the foregoing, the above certification as to any person for whom the Assignee will hold the
Common Units shall be made to the best of the Assignee’s knowledge.





7