EXHIBIT 10.1
GUARANTY
THIS GUARANTY (this "GUARANTY") is executed as of October 21, 2003, by
Arch Coal, Inc., a Delaware corporation ("ARCH"), for the benefit of Natural
Resource Partners L.P., a Delaware limited partnership ("NRP").
RECITALS
A. subsidiary of Arch is a lessee of NRP under four separate coal
mining leases on the following properties: Lone Mountain, Pardee, Boone/Lincoln
and Campbell's Creek (collectively, the "ARCH PROPERTIES").
B. Arch owns 42.25% of the general partner of NRP and owns
2,895,670 common units and 4,796,920 subordinated units in NRP.
C. For internal budgeting purposes, NRP has projected that it
will receive aggregate production royalties from the Arch Properties in fiscal
year 2004 of approximately $9.2 million.
D. Arch believes that, based on its own internal projections and
pricing forecasts, the production royalties generated from the Arch Properties
in 2004 will be approximately $11.3 million.
E. As a result of its ownership interest in NRP, Arch will
benefit, directly and indirectly, from any coal royalties paid to NRP, as well
as from cash distributions that NRP pays to its partners.
F. Arch desires to enter into this Guaranty for the purpose of
guaranteeing coal royalty payments with respect to the Arch Properties of no
less than $11.3 million to NRP in 2004 (the "GUARANTEED OBLIGATION").
G. In Arch's judgment, the value of the consideration received
and to be received by Arch from NRP is reasonably worth at least as much as its
liability and obligation under this Guaranty, and such liability and obligation
may reasonably be expected to benefit Arch directly or indirectly.
AGREEMENT
NOW, THEREFORE, for valuable consideration, the receipt and adequacy of
which are hereby acknowledged, Arch guarantees to NRP the prompt payment of the
Guaranteed Obligation as follows:
1. Guaranty. Arch hereby guarantees prompt payment of the
Guaranteed Obligation when due, but in no event later than January 20, 2005.
This is an absolute, unconditional irrevocable and continuing guaranty of
payment of the Guaranteed Obligation that will remain in effect until the
Guaranteed Obligation is paid in full. Arch may not rescind or revoke its
obligations to NRP under this Guaranty with respect to the Guaranteed
Obligation. All payments under this Guaranty shall be in U.S. Dollars.
2. Amount of Guaranty and Consideration. NRP's books and records
showing the amount of the Guaranteed Obligation shall be admissible in evidence
in any action or proceeding, and shall be rebuttably presumptive evidence for
the purpose of establishing the amount of the
Guaranteed Obligation absent manifest error. Arch represents and warrants to NRP
that the value of consideration received and to be received by it is reasonably
worth at least as much as its liability under this Guaranty, and such liability
may be reasonably be expected to benefit Arch, directly or indirectly.
3. Enforceability of Guaranty; No Release.
(a) This Guaranty shall not be affected by the
genuineness, validity, regularity or enforceability of the Guaranteed
Obligation or any instrument or agreement evidencing any part of the
Guaranteed Obligation, or by any fact or circumstance relating to the
Guaranteed Obligation which might otherwise constitute a defense to the
obligations of Arch under this Guaranty.
(b) Arch hereby agrees that its obligations under the
terms of this Guaranty shall not be released, discharged, diminished,
impaired, reduced or otherwise adversely affected by any of the
following: (i) any renewal, extension or rearrangement of the payment
of any or all of the Guaranteed Obligation, either with or without
notice to or consent of Arch, or any adjustment, indulgence,
forbearance, or compromise that may be granted or given by NRP to Arch;
(ii) any neglect, delay, omission, failure or refusal of NRP to take or
prosecute any action for the collection of all or any part of the
Guaranteed Obligation; or (iii) any failure of NRP to give Arch notice
of any of the foregoing, it being understood that NRP shall not be
required to give Arch any notice of any kind under any circumstances
with respect to or in connection with the Guaranteed Obligation, other
than any notice expressly required to be given to Arch under this
Guaranty.
4. Exercise of Rights and Waiver. No failure by NRP to exercise,
and no delay in exercising, any right or remedy under this Guaranty shall
operate as a waiver thereof. The exercise by NRP of any right under this
Guaranty shall not preclude the concurrent or subsequent exercise of any other
right. The remedies provided in this Guaranty are cumulative and not exclusive
of any rights provided by law or in equity. The unenforceability or invalidity
of any provision of this Guaranty shall not affect the enforceability or
validity of any other provision herein.
5. Expenses. Arch shall pay on demand all out-of-pocket expenses
(including reasonable attorneys' fees and expenses and the allocated cost and
disbursements of internal legal counsel) in any way relating to the enforcement
or protection of NRP's rights under this Guaranty. The obligations of the Arch
under the preceding sentence shall survive termination of this Guaranty.
6. Amendments. No provision of this Guaranty may be waived,
amended, supplemented or modified, except by a written instrument executed
by NRP and Arch.
7. Binding Agreement. This Guaranty is for the benefit of NRP and
its successors and assigns. This Guaranty is binding on Arch and Arch's
permitted assigns, provided that, Arch may not assign its rights or obligations
under this Guaranty without the prior written consent of NRP.
8. Notices. All notices required or permitted to be given under
this Guaranty, if any, must be in writing and shall be given as follows:
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If to Arch:
Arch Coal, Inc.
One CityPlace Drive, Suite 300
St. Louis, Missouri 63141
Telephone No.: (314) 994-2716
Facsimile No.: (314) 994-2734
Attn: Robert G. Jones
If to NRP:
Natural Resource Partners L.P.
c/o 601 Jefferson, Suite 3600
Houston, Texas 77002
Telephone: (713) 751-7516
Facsimile No.: (713) 650-0606
Attn: Wyatt L Hogan
9. Governing Law. This guaranty is to be construed, and its
performance enforced, under Delaware law (without regard to conflicts of
law principles).
GUARANTOR:
Arch Coal, Inc.
By:/s/ Steven F. Leer
-------------------------
Steven F. Leer
Chief Executive Officer
ACCEPTED:
Natural Resource Partners L.P.
By: NRP (GP) LP
By: GP Natural Resource Partners LLC
By:/s/ Corbin J. Robertson, Jr.
--------------------------------------
Corbin J. Robertson, Jr.
Chief Executive Officer
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