"Available Cash" means for any quarter prior to liquidation:
(a) the sum of:
(1) all cash and cash equivalents of Natural Resource Partners and its subsidiaries on hand at the end of that quarter; and
(2) all additional cash and cash equivalents of Natural Resource Partners and its subsidiaries on hand on the date of determination of available cash for that quarter resulting from working capital borrowings made after the end of that quarter;
(b) less the amount of cash reserves that is necessary or appropriate in the reasonable discretion of the general partner to:
(1) provide for the proper conduct of the business of Natural Resource Partners and its subsidiaries (including reserves for future capital expenditures and for anticipated future credit needs of Natural Resource Partners and its subsidiaries) after that quarter;
(2) comply with applicable law or any debt instrument or other agreement or obligation to which Natural Resource Partners or any of its subsidiaries is a party or by which it is bound or its assets are subject;
(3) provide funds for distributions to unitholders for any one or more of the next four quarters; and provided, however, that the general partner may not establish cash reserves pursuant to clause (b)(3) immediately above if the effect of such reserves would be that Natural Resource Partners is unable to distribute the minimum quarterly distribution on all common units and any cumulative common unit arrearages thereon for that quarter; and provided, further, that disbursements made by Natural Resource Partners or any of its subsidiaries of cash reserves established, increased or reduced after the end of that quarter but on or before the date of determination of available cash for that quarter shall be deemed to have been made, established, increased or reduced, for purposes of determining available cash, within that quarter if the general partner so determines.
British thermal unit, or Btu - means a measure of the energy required to raise the temperature of one pound of water one degree Fahrenheit.
Compliance Coal - means coal which, when burned, emits less than 1.2 pounds of sulfur dioxide per million Btus. Compliance coal meets sulfur emission standards imposed by Title IV of the Clean Air Act.
Contract Mining - means the contractual engagement of a third-party mining company by the mineral rights holder to mine coal. Contract mining companies are typically paid on a set price per ton of coal mined. Under most contract mining agreements the mineral rights holder is responsible for the permitting of the mine site. The contract miner is generally responsible for providing all equipment, financing for its operation, internal mine capital needs, employee salary and benefits and all other requirements associated with an independent business.
Incentive Distribution Right - means a non-voting limited partner interest issued to the general partner or one of its affiliates conferring upon it the right to receive increasing percentages, up to 48%, of the cash we distribute each quarter in excess of $0.28125 per unit.
Low Sulfur Coal - means coal with a sulfur content of less than 1.0%.
Metallurgical Coal - means the various grades of coal suitable for carbonization to make coke for the manufacture of steel. Also known as "met" coal, it possesses four important qualities; volatility, which affects coke yield; the level of impurities, which affects coke quality; composition, which affects coke strength; and expansion characteristics, which affect coke oven safety.
Operating Expenditures - means all expenditures of Natural Resource Partners and its subsidiaries 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:
(a) payments (including prepayments) of principal of and premium on indebtedness other than working capital borrowings will not constitute operating expenditures; and
(b) operating expenditures will not include:
(1) capital expenditures made for acquisitions or for capital improvement;
(2) payment of transaction expenses relating to interim capital transactions; or
(3) distributions to partners.
Probable Reserves - means reserves for which quantity and grade and/or quality are computed from information similar to that used for proven reserves, but the sites for inspection, sampling and measurement are farther apart or are otherwise less adequately spaced. The degree of assurance, although lower than that for proven reserves, is high enough to assume continuity between points of observation.
Proven Reserves - means reserves for which: (a) quantity is computed from dimensions revealed in outcrops, trenches, workings or drill holes; grade and/or quality are computed from the results of detailed sampling; and (b) the sites for inspection, sampling and measurement are spaced so closely and the geologic character is so well defined that size, shape, depth and mineral content of reserves are well-established.
Reserves - means that part of a mineral deposit that could be economically and legally extracted or produced at the time of the reserve determination.
Sulfur - means one of the elements present in varying quantities in coal. Sulfur dioxide is produced as a gaseous by-product of coal combustion.
Tons - means a "short" or net ton, which is equal to 2,000 pounds.
Units - means stock exchange traded units, but not the general partner interest.
