Exhibit 10.1

 

EXECUTION VERSION

 

 

AMENDED AND RESTATED RECEIVABLES PURCHASE AGREEMENT

 

dated as of January 31, 2017

 

among

 

CLOUD PEAK ENERGY RECEIVABLES LLC,
as Seller,

 

CLOUD PEAK ENERGY RESOURCES LLC,
as Servicer,

 

THE VARIOUS CONDUIT PURCHASERS, RELATED COMMITTED PURCHASERS, LC PARTICIPANTS
AND PURCHASER AGENTS FROM TIME TO TIME PARTY HERETO,

 

and

 

PNC BANK, NATIONAL ASSOCIATION,
as Administrator and as LC Bank

 

 

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TABLE OF CONTENTS

 

 

 

 

Page

 

 

 

 

ARTICLE I

AMOUNTS AND TERMS OF THE PURCHASES

 

2

 

 

 

 

Section 1.1

Purchase Facility

 

2

Section 1.2

Making Purchases

 

4

Section 1.3

Purchased Interest Computation

 

5

Section 1.4

Settlement Procedures

 

5

Section 1.5

Fees

 

11

Section 1.6

Payments and Computations, Etc

 

11

Section 1.7

Increased Costs

 

12

Section 1.8

Requirements of Law

 

13

Section 1.9

Funding Losses

 

14

Section 1.10

Taxes

 

14

Section 1.11

Inability to Determine Euro-Rate or LMIR

 

17

Section 1.12

Mitigation Obligations

 

18

Section 1.13

Extension of Termination Date

 

18

Section 1.14

Intended Tax Treatment

 

18

Section 1.15

Letters of Credit

 

18

Section 1.16

Issuance of Letters of Credit

 

19

Section 1.17

Requirements For Issuance of Letters of Credit

 

20

Section 1.18

Disbursements, Reimbursement

 

20

Section 1.19

Repayment of Participation Advances

 

21

Section 1.20

Documentation

 

21

Section 1.21

Determination to Honor Drawing Request

 

22

Section 1.22

Nature of Participation and Reimbursement Obligations

 

22

Section 1.23

Indemnity

 

23

Section 1.24

Liability for Acts and Omissions

 

23

 

 

 

 

ARTICLE II

REPRESENTATIONS AND WARRANTIES; COVENANTS; TERMINATION EVENTS

 

25

 

 

 

 

Section 2.1

Representations and Warranties; Covenants

 

25

Section 2.2

Termination Events

 

25

 

 

 

 

ARTICLE III

INDEMNIFICATION

 

26

 

 

 

 

Section 3.1

Indemnities by the Seller

 

26

 

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TABLE OF CONTENTS

(continued)

 

 

 

 

Page

 

 

 

 

Section 3.2

Indemnities by the Servicer

 

28

 

 

 

 

ARTICLE IV

ADMINISTRATION AND COLLECTIONS

 

28

 

 

 

 

Section 4.1

Appointment of the Servicer

 

28

Section 4.2

Duties of the Servicer

 

29

Section 4.3

Lock-Box Account and LC Collateral Account Arrangements

 

30

Section 4.4

Enforcement Rights

 

31

Section 4.5

Responsibilities of the Seller

 

32

Section 4.6

Servicing Fee

 

32

 

 

 

 

ARTICLE V

THE AGENTS

 

32

 

 

 

 

Section 5.1

Appointment and Authorization

 

32

Section 5.2

Delegation of Duties

 

33

Section 5.3

Exculpatory Provisions

 

34

Section 5.4

Reliance by Agents

 

34

Section 5.5

Notice of Termination Events

 

35

Section 5.6

Non-Reliance on Administrator, Purchaser Agents and Other Purchasers

 

35

Section 5.7

Administrator, Purchasers, Purchaser Agents and Affiliates

 

35

Section 5.8

Indemnification

 

36

Section 5.9

Successor Administrator

 

36

 

 

 

 

ARTICLE VI

MISCELLANEOUS

 

37

 

 

 

 

Section 6.1

Amendments, Etc

 

37

Section 6.2

Notices, Etc

 

37

Section 6.3

Successors and Assigns; Participations; Assignments

 

37

Section 6.4

Costs, Expenses and Taxes

 

40

Section 6.5

No Proceedings; Limitation on Payments

 

41

Section 6.6

GOVERNING LAW AND JURISDICTION

 

41

Section 6.7

Confidentiality

 

42

Section 6.8

Execution in Counterparts

 

42

Section 6.9

Survival of Termination

 

42

Section 6.10

WAIVER OF JURY TRIAL

 

42

Section 6.11

Sharing of Recoveries

 

43

 

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TABLE OF CONTENTS

(continued)

 

 

 

 

Page

 

 

 

 

Section 6.12

Right of Setoff

 

43

Section 6.13

Entire Agreement

 

43

Section 6.14

Headings

 

43

Section 6.15

Purchaser Groups’ Liabilities

 

43

Section 6.16

USA Patriot Act

 

44

 

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TABLE OF CONTENTS

(continued)

 

 

 

 

Page

 

EXHIBIT I

Definitions

 

 

EXHIBIT II

Conditions of Purchases

 

 

EXHIBIT III

Representations and Warranties

 

 

EXHIBIT IV

Covenants

 

 

EXHIBIT V

Termination Events

 

 

SCHEDULE I

Credit and Collection Policy

 

 

SCHEDULE II

Lock-Box Banks and Lock-Box Accounts

 

 

SCHEDULE III

Trade Names

 

 

SCHEDULE IV

Mortgages

 

 

SCHEDULE V

Addresses for Notice

 

 

SCHEDULE VI

Group Commitments

 

 

ANNEX A

Form of Information Package

 

 

ANNEX B-1

Form of Purchase Notice

 

 

ANNEX B-2

Form of Issuance Notice

 

 

ANNEX C

Form of Assumption Agreement

 

 

ANNEX D

Form of Transfer Supplement

 

 

ANNEX E

Form of Paydown Notice

 

 

ANNEX F

Closing Memorandum

 

 

ANNEX G

Form of Compliance Certificate

 

 

ANNEX H

Form of Daily Report

 

 

ANNEX I

Form of Weekly Report

 

 

ANNEX J

Form of Letter of Credit Application

 

 

 

iv

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This AMENDED AND RESTATED RECEIVABLES PURCHASE AGREEMENT (as amended, restated,
supplemented or otherwise modified from time to time, this “Agreement”) is
entered into as of January 31, 2017, among CLOUD PEAK ENERGY RECEIVABLES LLC, a
Delaware limited liability company, as seller (the “Seller”), CLOUD PEAK ENERGY
RESOURCES LLC, a Delaware limited liability company (together with its
successors and permitted assigns, “Cloud Peak”), as initial servicer (in such
capacity, together with its successors and permitted assigns in such capacity,
the “Servicer”), the various Conduit Purchasers, Related Committed Purchasers,
LC Participants and Purchaser Agents (in each case, as defined herein) from time
to time party hereto, and PNC BANK, NATIONAL ASSOCIATION, as Administrator (in
such capacity, together with its successors and assigns in such capacity, the
“Administrator”) and as issuer of Letters of Credit (in such capacity, together
with its successors and assigns in such capacity, the “LC Bank”).

 

PRELIMINARY STATEMENTS.  Certain terms that are capitalized and used throughout
this Agreement are defined in Exhibit I.  References in the Exhibits, Schedules
and Annexes hereto to the “Agreement” refer to this Agreement, as amended,
supplemented or otherwise modified from time to time.

 

This Agreement amends and restates in its entirety, as of the Closing Date, the
Receivables Purchase Agreement, dated as of February 11, 2013 (as amended,
restated, supplemented or otherwise modified prior to the date hereof, the
“Prior Agreement”), among each of the parties hereto (other than the LC Bank and
LC Participants), Credit Agricole Corporate and Investment Bank and Atlantic
Asset Securitization LLC.  Upon the effectiveness of this Agreement, the terms
and provisions of the Prior Agreement shall, subject to this paragraph, be
superseded hereby in their entirety.  Notwithstanding the amendment and
restatement of the Prior Agreement by this Agreement, (i) the Seller and
Servicer shall continue to be liable to PNC and any other Indemnified Party or
Affected Person (as such terms are defined in the Prior Agreement) for fees and
expenses which are accrued and unpaid under the Prior Agreement on the date
hereof (collectively, the “Prior Agreement Outstanding Amounts”) and all
agreements to indemnify such parties in connection with events or conditions
arising or existing prior to the effective date of this Agreement and (ii) the
security interest created under the Prior Agreement shall remain in full force
and effect as security for such Prior Agreement Outstanding Amounts until such
Prior Agreement Outstanding Amounts shall have been paid in full.  Upon the
effectiveness of this Agreement, each reference to the Prior Agreement in any
other Transaction Document shall mean and be a reference to this Agreement. 
Nothing contained herein, unless expressly herein stated to the contrary, is
intended to amend, modify or otherwise affect any other instrument, document or
agreement executed and/or delivered in connection with the Prior Agreement.

 

The Seller (i) desires to sell, transfer and assign an undivided variable
percentage ownership interest in a pool of receivables, and the Purchasers
desire to acquire such undivided variable percentage ownership interest, as such
percentage interest shall be adjusted from time to time based upon, in part,
reinvestment payments that are made by such Purchasers and (ii) may, subject to
the terms and conditions hereof, request that the LC Bank issue or cause the
issuance of one or more Letters of Credit.

 

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In consideration of the mutual agreements, provisions and covenants contained
herein, the sufficiency of which is hereby acknowledged, the parties hereto
agree as follows:

 

ARTICLE I

 

AMOUNTS AND TERMS OF THE PURCHASES

 

Section 1.1                                    Purchase Facility.

 

(a)                                 On the terms and subject to the conditions
hereof, the Seller may, from time to time before the Facility Termination Date,
(i) request that (x) the Conduit Purchasers ratably (based on the aggregate
Commitments of the Related Committed Purchasers in their respective Purchaser
Groups) make purchases of and reinvestments in, or (y) only if a Conduit
Purchaser denies such request or is unable to fund (and provides notice of such
denial or inability to the Seller, the Servicer, the Administrator and its
Purchaser Agent), the Related Committed Purchasers ratably (based on their
respective Commitments) make purchases of and reinvestments in, undivided
percentage ownership interests with regard to the Purchased Interest from the
Seller and (ii) request that the LC Bank issue or cause the issuance of Letters
of Credit, in each case subject to the terms hereof (each such purchase,
reinvestment or issuance is referred to herein as a “Purchase”).  Subject to
Section 1.4(b) concerning reinvestments, at no time will a Conduit Purchaser
have any obligation to make a Purchase.  Each Related Committed Purchaser
severally hereby agrees, on the terms and subject to the conditions hereof, to
make purchases of and reinvestments in undivided percentage ownership interests
with regard to the Purchased Interest from the Seller from time to time from the
Closing Date to (but excluding) the Facility Termination Date, based on the
applicable Purchaser Group’s Group Commitment Percentage of each Purchase
requested pursuant to Section 1.2(a) (and, in the case of each Related Committed
Purchaser, its Commitment Percentage of its Purchaser Group’s Group Commitment
Percentage of such Purchase) and, on the terms of and subject to the conditions
hereof, the LC Bank hereby agrees to issue Letters of Credit in return for (and
each LC Participant hereby severally agrees to make participation advances in
connection with any draws under such Letters of Credit equal to such LC
Participant’s Pro Rata Share of such draws), undivided percentage ownership
interests with regard to the Purchased Interest from the Seller from time to
time from the date hereof to the Facility Termination Date.  Notwithstanding
anything set forth in this Section 1.1(a) or otherwise herein to the contrary,
under no circumstances shall any Purchaser make any purchase (including, without
limitation, any Funded Purchase deemed requested by the Seller pursuant to
Section 1.1(c) or 1.18(a)) or reinvestment or the LC Bank issue any Letters of
Credit hereunder, as applicable, if, after giving effect to such Purchase:

 

(i)                                     any event has occurred and is
continuing, or would result from such Purchase, that constitutes a Termination
Event or an Unmatured Termination Event;

 

(ii)                                  the aggregate outstanding Capital of such
Purchaser, when added to all other Capital of all other Purchasers in such
Purchaser’s Purchaser Group, would exceed (A) its Purchaser Group’s Group
Commitment minus (B) the related LC Participant’s Pro Rata Share of the LC
Participation Amount;

 

2

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(iii)                               (x) the Aggregate Capital plus the LC
Participation Amount would exceed the Purchase Limit or (y) the LC Participation
Amount would exceed the aggregate of the Commitments of the LC Participants; or

 

(iv)                              the Purchased Interest would exceed 100%.

 

The Seller may, subject to this paragraph (a) and the other requirements and
conditions herein, use the proceeds of any Purchase by the Purchasers hereunder
to satisfy its Reimbursement Obligation to the LC Bank and the LC Participants
(ratably, based on the outstanding amounts funded by the LC Bank and each such
LC Participant) pursuant to Section 1.18 below.

 

(b)                                 The Seller may, upon at least 10 days’
written notice to the Administrator and each Purchaser Agent, terminate the
purchase facility provided hereunder in whole or reduce the Purchase Limit in
whole or in part (but not below the amount that would cause the sum of the
Aggregate Capital plus the LC Participation Amount to exceed the Purchase Limit
or would cause the Group Capital of any Purchaser Group to exceed its Group
Commitment, in either case, after giving effect to such reduction); provided
that each partial reduction shall be in the amount of at least $5,000,000, or an
integral multiple of $1,000,000 in excess thereof and that, unless terminated in
whole, the Purchase Limit shall in no event be reduced below $50,000,000.  In
connection with each such reduction of the Purchase Limit, the Commitment of
each Purchaser and the Group Commitment of each Purchaser Group shall
automatically be ratably reduced by a proportionate amount.  The Administrator
shall advise the Purchaser Agents of any notice received by it pursuant to this
Section 1.1(b); it being understood and agreed that no such termination of the
purchase facility provided hereunder shall be effective unless and until (i) if
any Letters of Credit are outstanding, the amount on deposit in the LC
Collateral Account is at least equal to the aggregate undrawn face amount of
such Letters of Credit plus all related fees to accrue through the stated
expiration dates thereof (such fees to accrue, as reasonably estimated by the LC
Bank, the “LC Fee Expectation”), (ii) the Aggregate Capital is reduced to zero
and (iii) all other amounts then owed to the Administrator, the Purchaser Agents
and the Purchasers under the Transaction Documents have been paid in full.

 

(c)                                  If there is a drawing under any Letter of
Credit, the Seller shall, on the applicable Drawing Date, automatically (and
without the requirement of any further action on the part of any Person
hereunder) be deemed to have requested a new Purchase from the Conduit
Purchasers or Committed Purchasers, as applicable, on such date, on the terms
and subject to satisfaction of the conditions hereof (other than conditions with
respect to notice and the minimum Purchase amount) in an aggregate amount equal
to the amount of such drawing.  Subject to the limitations on funding set forth
in paragraph (a) above (and the other requirements and conditions herein set
forth (other than conditions with respect to notice and minimum Purchase
amount)), the Conduit Purchasers or Committed Purchasers, as applicable, shall
fund such Purchase so requested and deliver the proceeds thereof directly to the
Administrator to be immediately distributed by the Administrator to the LC
Bank.  If any of the conditions to the funding of such Purchase are not
satisfied on the applicable Drawing Date (other than conditions with respect
notice and the minimum Purchase amount), the Seller shall reimburse the LC Bank
for the full amount of the drawing under such Letter of Credit (out of its own
funds available therefor) in accordance with Section 1.18.

 

3

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Section 1.2                                    Making Purchases.  (a) Each
Funded Purchase (but not reinvestment) of undivided percentage ownership
interests with regard to the Purchased Interest hereunder may be made on any day
upon the Seller’s irrevocable written notice in the form of Annex B-1 (each, a
“Purchase Notice”) delivered to the Administrator and each Purchaser Agent in
accordance with Section 6.2 (which notice must be received by the Administrator
and each Purchaser Agent before 2:00 p.m., New York City time) at least two
Business Days before the requested Purchase Date, which notice shall specify:
(A) solely in the case of a Funded Purchase, the amount requested to be paid to
the Seller (which amount shall not be less than $200,000 (or such lesser amount
as agreed to by the Administrator) and shall be in integral multiples of
$100,000 in excess thereof) with respect to each Purchaser Group in connection
with such Funded Purchase, (B) the date of such Funded Purchase (which shall be
a Business Day) and (C) the pro forma calculation of the Purchased Interest
after giving effect to the increase in the Aggregate Capital resulting from such
Funded Purchase.

 

(b)                                 On the date of each Funded Purchase (but not
reinvestment or issuance of a Letter of Credit) of undivided percentage
ownership interests with regard to the Purchased Interest hereunder, each
applicable Conduit Purchaser or Related Committed Purchaser, as the case may be,
shall, upon satisfaction of the applicable conditions set forth in Exhibit II,
make available to the Seller in same day funds, at such account as may be
designated in writing by the Seller to the Administrator and each Purchaser
Agent from time to time, an amount equal to the portion of Capital relating to
the undivided percentage ownership interest then being funded by such Purchaser.

 

(c)                                  Effective on the date of each Purchase, the
Seller hereby sells and assigns to the Administrator for the benefit of the
Purchasers (ratably, based on the Purchasers’ respective outstanding Capital
plus its share of the LC Participation Amount at such time after giving effect
to such Purchase) an undivided percentage ownership interest in: (i) each Pool
Receivable then existing, (ii) all Related Security with respect to such Pool
Receivables, and (iii) all Collections with respect to, and other proceeds of,
such Pool Receivables and Related Security.

 

(d)                                 To secure all of the Seller’s obligations
(monetary or otherwise) under this Agreement and the other Transaction Documents
to which it is a party, whether now or hereafter existing or arising, due or to
become due, direct or indirect, absolute or contingent, the Seller hereby grants
to the Administrator (for the benefit of the Administrator, the Purchasers and
the Purchaser Agents and their respective successors and permitted assigns), a
security interest in all of the Seller’s right, title and interest (including
any undivided interest of the Seller) in, to and under all of the following,
whether now or hereafter owned, existing or arising: (i) all Pool Receivables,
(ii) all Related Security with respect to such Pool Receivables, (iii) all
Collections with respect to such Pool Receivables, (iv) the Lock-Box Accounts
and all amounts on deposit therein, and all certificates and instruments, if
any, from time to time evidencing such Lock-Box Accounts and amounts on deposit
therein, (v) the LC Collateral Account and all amounts on deposit therein, and
all certificates and instruments, if any, from time to time evidencing such LC
Collateral Account and amounts on deposit therein, (vi) all rights (but none of
the obligations) of the Seller under the Purchase and Sale Agreement, (vii) all
proceeds of, and all amounts received or receivable under any or all of, the
foregoing and (viii) all of its other property (collectively, the “Pool
Assets”).  The Seller hereby authorizes the Administrator to file financing
statements naming the Seller as debtor or seller and describing as the
collateral covered thereby as “all of

 

4

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the debtor’s personal property or assets” or words to that effect,
notwithstanding that such wording may be broader in scope than the collateral
described in this Agreement.  The Administrator (for the benefit of the
Administrator, the Purchasers and the Purchaser Agents and their respective
successors and permitted assigns) shall have, with respect to the Pool Assets,
and in addition to all the other rights and remedies available to the
Administrator, the Purchasers and the Purchaser Agents, all the rights and
remedies of a secured party under any applicable UCC.  The Seller hereby
acknowledges and agrees that pursuant to the Prior Agreement, the Seller granted
to the Administrator a security interest in all of the Seller’s right, title and
interest in, to and under the Pool Assets (as defined in the Prior Agreement). 
The Seller hereby confirms such security interest and acknowledges and agrees
that such security interest is continuing and is supplemented and restated by
the security interest granted by the Seller pursuant to this Section 1.2(d).

 

(e)                                  Each Related Committed Purchaser’s
obligations hereunder shall be several, such that the failure of any Related
Committed Purchaser to make a payment in connection with any Funded Purchase
hereunder, shall not relieve any other Related Committed Purchaser of its
obligation hereunder to make payment for any Funded Purchase. Further, in the
event any Related Committed Purchaser fails to satisfy its obligation to make a
Funded Purchase as required hereunder, upon receipt of notice of such failure
from the Administrator (or any relevant Purchaser Agent), subject to the
limitations set forth herein, the non-defaulting Related Committed Purchasers in
such defaulting Related Committed Purchaser’s shall fund the defaulting Related
Committed Purchaser’s Commitment Percentage of the related Funded Purchase pro
rata in proportion to their relative remaining Commitment Percentages
(determined without regard to the Commitment Percentage of the defaulting
Related Committed Purchaser; it being understood that a defaulting Related
Committed Purchaser’s Commitment Percentage of any Funded Purchase shall be
first funded by the Related Committed Purchasers in such defaulting Related
Committed Purchaser’s Purchaser Group and thereafter if there are no other
Related Committed Purchasers in such Purchaser Group or if such other Related
Committed Purchasers are also defaulting Related Committed Purchasers, then such
defaulting Related Committed Purchaser’s Commitment Percentage of such Funded
Purchase shall be funded by each other Purchaser Group ratably and applied in
accordance with this paragraph (e)). Notwithstanding anything in this paragraph
(e) to the contrary, no Related Committed Purchaser shall be required to make a
Funded Purchase pursuant to this paragraph for an amount which would cause the
aggregate Capital of such Related Committed Purchaser (after giving effect to
such Funded Purchase) to exceed its Commitment.

 

Section 1.3                                    Purchased Interest Computation. 
The Purchased Interest shall be initially computed on the date of the initial
Purchase hereunder.  Thereafter, until the Facility Termination Date, the
Purchased Interest shall be automatically recomputed (or deemed to be
recomputed) on each Business Day other than a Termination Day.  On each
Termination Day, the Purchased Interest shall be deemed to be 100%. The
Purchased Interest shall become zero on the Final Payout Date.

 

Section 1.4                                    Settlement Procedures.

 

(a)                                 The collection of the Pool Receivables shall
be administered by the Servicer in accordance with this Agreement. The Seller
shall provide to the Servicer on a timely basis all

 

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information needed for such administration, including notice of the occurrence
of any Termination Day and current computations of the Purchased Interest.

 

(b)                                 The Servicer shall, on each day on which
Collections of Pool Receivables are received (or deemed received) by the Seller
or the Servicer in accordance with this Agreement, including Section 1.4(g):

 

(i)                                     set aside and hold in trust (and shall,
at the request of the Administrator, segregate in a separate account approved by
the Administrator) for the benefit of each Purchaser Group, out of such
Collections, an amount equal to the sum of (i) the Aggregate Discount accrued
through such day for each Portion of Capital and not previously set aside, (ii)
an amount equal to the Fees accrued and unpaid through such day and (iii) an
amount equal to the Purchasers’ Share of the Servicing Fee accrued through such
day and not previously set aside;

 

(ii)                                  subject to Section 1.4(f), if such day is
not a Termination Day, remit to the Seller, ratably, on behalf of the
Purchasers, the remainder of such Collections.  Such remainder shall, to the
extent representing a return on the Aggregate Capital, be automatically
reinvested, ratably according to each Purchaser’s Capital, in Pool Receivables
and in the Related Security, Collections and other proceeds with respect
thereto; provided, however, that if, after giving effect to any such
reinvestment, (x) the Purchased Interest would exceed 100%, or (y) the sum of
the Aggregate Capital plus the LC Participation Amount would exceed the Purchase
Limit then in effect, then the Servicer shall not remit such remainder to the
Seller or reinvest, but shall set aside and hold in trust for the Administrator
(for the benefit of the Purchasers) (and shall, at the request of the
Administrator, segregate in a separate account approved by the Administrator) a
portion of such Collections that, together with the other Collections set aside
pursuant to this paragraph, shall equal the amount necessary to reduce the
Purchased Interest to 100% or cause the sum of the Aggregate Capital plus the LC
Participation Amount not to exceed the Purchase Limit, as the case may be
(determined as if such Collections set aside had been applied to reduce the
Aggregate Capital or LC Participation Amount, as applicable, at such time),
which amount shall either (x) be deposited ratably to each Purchaser Agent’s
account (for the benefit of its related Purchasers) for distribution and
application or (y) be deposited in the LC Collateral Account, in each case, as
applicable, on the next Settlement Date in accordance with Section 1.4(d);
provided, further, that (x) in the case of any Purchaser that is a Conduit
Purchaser, if such Purchaser has provided notice (a “Declining Notice”) to its
Purchaser Agent, the Administrator, and the Servicer that such Purchaser (a
“Declining Conduit Purchaser”) no longer wishes Collections with respect to any
Portion of Capital funded or maintained by such Purchaser to be reinvested
pursuant to this clause (ii), and (y) in the case of any Purchaser that has
provided notice (an “Exiting Notice”) to its Purchaser Agent of its refusal,
pursuant to Section 1.13, to extend the then-scheduled Facility Termination Date
hereunder (an “Exiting Purchaser”) then in either case set forth in subclauses
(x) or (y), above, such Collections shall not be reinvested and shall instead be
held in trust for the benefit of such Purchaser and applied in accordance with
clause (iii) below;

 

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(iii)                               if such day is a Termination Day (or any day
following the provision of a Declining Notice or an Exiting Notice), set aside,
segregate and hold in trust (and shall, at the request of the Administrator,
segregate in a separate account approved by the Administrator) for the benefit
of each Purchaser Group the entire remainder of such Collections (or in the case
of a Declining Conduit Purchaser or an Exiting Purchaser an amount equal to such
Purchaser’s ratable share of such Collections based on its Capital; provided,
that solely for the purpose of determining such Purchaser’s ratable share of
such Collections, such Purchaser’s Capital shall be deemed to remain constant
from the date of the provision of a Declining Notice or an Exiting Notice, as
the case may be, until the date such Purchaser’s Capital has been paid in full;
it being understood that if such day is also a Termination Day, such Declining
Conduit Purchaser’s or Exiting Purchaser’s Capital shall be recalculated taking
into account amounts received by such Purchaser in respect of this parenthetical
and thereafter Collections shall be set aside for such Purchaser ratably in
respect of its Capital (as recalculated)); and

 

(iv)                              release to the Seller (subject to Section
1.4(f)) for its own account any Collections in excess of:  (w) amounts required
to be reinvested in accordance with clause (ii) plus (x) the amounts that are
required to be set aside pursuant to clause (i) above, pursuant to the proviso
to clause (ii) above and pursuant to clause (iii) above, plus (y) the Seller’s
Share of the Servicing Fee accrued and unpaid through such day and all
reasonable and appropriate out-of-pocket costs and expenses of the Servicer for
servicing, collecting and administering the Pool Receivables plus (z) all other
amounts then due and payable by the Seller under this Agreement to the
Purchasers, the Purchaser Agents, the Administrator, and any other Indemnified
Party or Affected Person.

 

(c)                                  On each Settlement Date, the Servicer
shall, in accordance with the priorities set forth in Section 1.4(d), deposit
into the account specified by each Purchaser Agent Collections held for such
Purchaser Agent (for the benefit of its related Purchasers) pursuant to Section
1.4(b)(i) or 1.4(f) plus the amount of Collections then held for such Purchaser
Agent (for the benefit of its related Purchasers) pursuant to Sections
1.4(b)(ii) and 1.4(b)(iii); provided, that if Cloud Peak or an Affiliate thereof
is the Servicer, such day is not a Termination Day and the Administrator has not
notified Cloud Peak (or such Affiliate) that such right is revoked, Cloud Peak
(or such Affiliate) may retain the portion of the Collections set aside pursuant
to Section 1.4(b)(i) that represents the aggregate of the Purchasers’ Share of
the Servicing Fee.  Not later than 1 Business Day prior to each Settlement Date,
each Purchaser Agent will notify the Servicer by electronic mail of the amount
of Discount accrued with respect to each Portion of Capital during the related
Settlement Period.

 

(d)                                 The Servicer shall distribute the amounts
described (and at the times set forth) in Section 1.4(c), as follows:

 

(i)                                     if such distribution occurs on a day
that is not a Termination Day:

 

(A)                               first, if the Servicer has set aside amounts
in respect of the Servicing Fee pursuant to Section 1.4(b)(i) and has not
retained such amounts pursuant to Section 1.4(c), to the Servicer (payable in
arrears on each Settlement

 

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Date) in payment in full of the aggregate Purchasers’ Share of the accrued
Servicing Fees so set aside; and

 

(B)                               second, to each Purchaser Agent ratably
according to the Discount and Fees accrued during such Settlement Period (for
the benefit of the relevant Purchasers within such Purchaser Agent’s Purchaser
Group) in payment in full of all such accrued Discount with respect to each
Portion of Capital maintained by such Purchasers and all such accrued Fees owing
to such Purchasers; it being understood that each Purchaser Agent shall
distribute such amounts to the Purchasers within its Purchaser Group ratably
according to Discount and Fees, respectively; and

 

(ii)                                  if such distribution occurs on a
Termination Day:

 

(A)                               first, to the Servicer (if the Servicer is not
Cloud Peak of an Affiliate thereof), in payment in full of the Purchasers’ Share
of all accrued Servicing Fees;

 

(B)                               second to each Purchaser Agent ratably (based
on the aggregate accrued and unpaid Discount and Fees payable to all Purchasers
at such time) (for the benefit of the relevant Purchasers in such Purchaser
Agent’s Purchaser Group) in payment in full of all accrued Discount with respect
to each Portion of Capital funded or maintained by the Purchasers within such
Purchaser Agent’s Purchaser Group and all accrued Fees;

 

(C)                               third to each Purchaser Agent ratably
according to the aggregate of the Capital of each Purchaser in each such
Purchaser Agent’s Purchaser Group (for the benefit of the relevant Purchasers in
such Purchaser Agent’s Purchaser Group) in payment in full of each Purchaser’s
Capital; it being understood that each Purchaser Agent shall distribute the
amounts described in the first, second and third clauses of this Section
1.4(d)(ii) to the Purchasers within such Purchaser Agent’s Purchaser Group
ratably according to Discount, Fees and Capital, respectively;

 

(D)                               fourth, to the LC Collateral Account for the
benefit of the LC Bank and the LC Participants (x) the amount necessary to cash
collateralize the LC Participation Amount until the amount of cash collateral
held in such LC Collateral Account (other than amount representing LC Fee
Expectation) equals 100% of the LC Participation Amount (determined as if such
Collections had been applied to reduce the aggregate outstanding amount of the
LC Participation Amount) and (y) if such day is a Termination Day of the type
described in clause (b) of the definition thereof or a Termination Event is
continuing, an amount equal to the LC Fee Expectation at such time (or such
portion thereof not currently on deposit in the LC Collateral Account);

 

(E)                                fifth, if the Aggregate Capital and accrued
Aggregate Discount with respect to each Portion of Capital for all Purchaser
Groups have been

 

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reduced to zero, and the aggregate of the Purchasers’ Share of all accrued
Servicing Fees payable to the Servicer have been paid in full, to each Purchaser
Agent ratably, based on the remaining amounts, if any, payable to each Purchaser
in such Purchaser Agent’s Purchaser Group (for the benefit of the relevant
Purchasers in such Purchaser Agent’s Purchaser Group), the Administrator and any
other Indemnified Party or Affected Person in payment in full of any other
amounts owed thereto by the Seller or the Servicer hereunder; and

 

(F)                                 sixth, to the Servicer (if the Servicer is
Cloud Peak or an Affiliate thereof) in payment in full of the aggregate of the
Purchasers’ Share of all accrued Servicing Fees.

 

After the Aggregate Capital, Aggregate Discount, Fees and Servicing Fees with
respect to the Purchased Interest, and any other amounts payable by the Seller
and the Servicer to each Purchaser Group, the Administrator or any other
Indemnified Party or Affected Person hereunder, have been paid in full, and
after an amount equal to 100% of the LC Participation Amount and the LC Fee
Expectation has been deposited in the LC Collateral Account, all additional
Collections with respect to the Purchased Interest shall be paid to the Seller
for its own account.

 

(e)                                  For the purposes of this Section 1.4:

 

(i)                                     if on any day the Outstanding Balance of
any Pool Receivable is reduced or adjusted as a result of any defective,
rejected, returned, repossessed or foreclosed goods or services, or any
revision, cancellation, allowance, rebate, discount or other adjustment made by
the Seller or any Affiliate of the Seller, or the Servicer or any Affiliate of
the Servicer, or any setoff or dispute between the Seller or any Affiliate of
the Seller, or the Servicer or any Affiliate of the Servicer and an Obligor, the
Seller shall be deemed to have received on such day a Collection of such Pool
Receivable in the amount of such reduction or adjustment and shall (i) if such
day is not a Termination Day, hold any and all such amounts in trust for the
benefit of the Purchasers and their assigns and, on the following Settlement
Date, apply such amounts in accordance with this Section 1.4 or (ii) if such day
is a Termination Day, promptly, and in any event within one Business Day, pay
any and all such amounts in respect thereof to a Lock-Box Account for the
benefit of the Purchasers and their assigns and for application pursuant to
Section 1.4;

 

(ii)                                  if on any day any of the representations
or warranties in Sections 1(j) or 3(a) of Exhibit III is not true with respect
to any Pool Receivable, the Seller shall be deemed to have received on such day
a Collection of such Pool Receivable in full and shall immediately pay the
amount of such deemed Collection to a Lock-Box Account (or as otherwise directed
by the Administrator at such time) for the benefit of the Purchasers and their
assigns and for application pursuant to this Section 1.4 (Collections deemed to
have been received pursuant to clause (i) or (ii) of this paragraph (e) are
hereinafter sometimes referred to as “Deemed Collections”);

 

(iii)                               except as provided in clause (i) or (ii)
otherwise required by applicable law or the relevant Contract, all Collections
received from an Obligor of any Receivable

 

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shall be applied to the Receivables of such Obligor in the order of the age of
such Receivables, starting with the oldest such Receivable, unless such Obligor
designates in writing its payment for application to specific Receivables;

 

(iv)                              if and to the extent the Administrator, any
Purchaser Agent or any Purchaser shall be required for any reason to pay over to
an Obligor (or any trustee, receiver, custodian or similar official in any
Insolvency Proceeding) any amount received by it hereunder, such amount shall be
deemed not to have been so received by such Person but rather to have been
retained by the Seller and, accordingly, such Person shall have a claim against
the Seller for such amount, payable when and to the extent that any distribution
from or on behalf of such Obligor is made in respect thereof; and

 

(v)                                 if at any time before the Facility
Termination Date the Seller is deemed to have received any Deemed Collections,
so long as no Termination Day then exists, the Seller may satisfy its obligation
to deliver the amount of such Deemed Collections to a Lock-Box Account or hold
such amount in trust and apply it in accordance with this Section 1.4, as the
case may be, by instead recalculating (or being deemed to have recalculated) the
Purchased Interest by decreasing the Net Receivables Pool Balance by the amount
of such Deemed Collections, so long as such adjustment does not cause the
Purchased Interest to exceed 100%.

 

(f)                                   If at any time the Seller shall wish to
cause the reduction of Aggregate Capital (but not to commence the liquidation,
or reduction to zero, of the entire Aggregate Capital) the Seller may do so as
follows:

 

(i)                                     the Seller shall give the Administrator,
each Purchaser Agent and the Servicer written notice in the form of Annex E
(each, a “Paydown Notice”) at least two Business Days prior to the date of such
reduction and each such Paydown Notice shall include, among other things, the
amount of such proposed reduction and the proposed date on which such reduction
will commence;

 

(ii)                                  on the proposed date of the commencement
of such reduction and on each day thereafter, the Servicer shall cause
Collections not to be reinvested until the amount thereof not so reinvested
shall equal the desired amount of reduction; and

 

(iii)                               the Servicer shall hold such Collections in
trust for the benefit of each Purchaser ratably according to its Capital, for
payment to each such Purchaser (or its related Purchaser Agent for the benefit
of such Purchaser) on the next Settlement Date (or such other date as agreed to
by the Administrator and Seller) with respect to any Portions of Capital
maintained by such Purchaser immediately following the related current
Settlement Period, and the Aggregate Capital (together with the Capital of any
related Purchaser) shall be deemed reduced in the amount to be paid to such
Purchaser (or its related Purchaser Agent for the benefit of such Purchaser)
only when in fact finally so paid;

 

provided, that:

 

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(A)                               the amount of any such reduction shall be not
less than $100,000 for each Purchaser Group and shall be an integral multiple of
$100,000 in excess thereof, and unless reduced to zero, the entire Aggregate
Capital after giving effect to such reduction shall be not less than $1,000,000;
and

 

(B)                               with respect to any Portion of Capital, the
Seller shall choose a reduction amount, and the date of commencement thereof, so
that to the extent practicable such reduction shall commence and conclude in the
same Settlement Period.

 

(g)                                  The Servicer may, and shall at the
direction of the Administrator or any Purchaser Agent, deliver a Daily Report to
the Administrator on any Business Day that the Administrator is then exercising
exclusive dominion and control over the Lock-Box Accounts during a Level II
Minimum Liquidity Period.  Upon receipt of such Daily Report, the Administrator
shall promptly review such Daily Report to determine if such Daily Report
constitutes a Qualifying Interim Report.  In the event that the Administrator
reasonably determines that such Daily Report constitutes a Qualifying Interim
Report, so long as no Termination Event or Unmatured Termination Event has
occurred, the Administrator shall promptly remit to the Servicer from the
Lock-Box Accounts (or the LC Collateral Account, if applicable) the lesser of
(i) the amount identified on such Qualifying Interim Report as Collections on
deposit in the Lock-Box Accounts and/or LC Collateral Account in excess of the
amount necessary to ensure that the Purchased Interest does not exceed 100% and
(ii) the aggregate amount of available amounts then on deposit in the Lock-Box
Accounts and the LC Collateral Account.

 

Section 1.5                                    Fees.  The Seller shall pay to
the Administrator, Purchaser Agents and Purchasers certain fees in the amounts
and on the dates set forth in one or more fee letter agreements, in each case
entered into from time to time by and among the Seller, (the Servicer if
applicable) and the applicable Purchaser Agent and/or the Administrator (as any
such fee letter agreement may be amended, restated, supplemented or otherwise
modified from time to time, each, a “Fee Letter”).

 

Section 1.6                                    Payments and Computations, Etc.

 

(a)                                 All amounts to be paid or deposited by the
Seller or the Servicer hereunder or under any other Transaction Document shall
be made without reduction for offset or counterclaim and shall be paid or
deposited no later than 3:00 p.m. (New York City time) on the day when due in
same day funds to the account for each Purchaser maintained by the applicable
Purchaser Agent (or such other account as may be designated from time to time by
such Purchaser Agent to the Seller and the Servicer).  All amounts received
after 3:00 p.m. (New York City time) will be deemed to have been received on the
next Business Day. Except as expressly set forth herein, each Purchaser Agent
shall distribute the amounts paid to it hereunder for the benefit of the
Purchasers in its Purchaser Group to the Purchasers within its Purchaser Group
ratably (x) in the case of such amounts paid in respect of Discount and Fees,
according to the Discount and Fees payable to such Purchasers and (y) in the
case of such amounts paid in respect of Capital (or in respect of any other
obligations other than Discount and Fees), according to the outstanding Capital
funded by such Purchasers.

 

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(b)                                 The Seller or the Servicer, as the case may
be, shall, to the extent permitted by law, pay interest on any amount not paid
or deposited by the Seller or the Servicer, as the case may be, when due
hereunder, at an interest rate per annum equal to the sum of 2.00% per annum
plus the greater of the Base Rate at such time and the Euro-Rate or LMIR at such
time, payable on demand.

 

(c)                                  All computations of interest under Section
1.6(b) and all computations of Discount, Fees and other amounts hereunder shall
be made on the basis of a year of 360 (or 365 or 366, as applicable, with
respect to Discount or other amounts calculated by reference to the Base Rate)
days for the actual number of days elapsed. Whenever any payment or deposit to
be made hereunder shall be due on a day other than a Business Day, such payment
or deposit shall be made on the next Business Day and such extension of time
shall be included in the computation of such payment or deposit.

 

Section 1.7                                    Increased Costs.  (a) If after
the Initial Closing Date the Administrator, any Purchaser Agent, any Purchaser,
any Liquidity Provider or any other Program Support Provider or any of their
respective Affiliates (each an “Affected Person”) reasonably determines that any
Change in Law affects or would affect the amount of capital required or expected
to be maintained by such Affected Person, and such Affected Person determines
that the amount of such capital is increased by or based upon the existence of
any commitment to make purchases of (or otherwise to maintain the investment in)
Pool Receivables or to issue or maintain any such Letter of Credit or any
related liquidity facility, credit enhancement facility and other commitments of
the same type, then, upon demand by such Affected Person or its related
Purchaser Agent (with a copy to the Administrator), the Seller shall promptly
pay to the related Purchaser Agent, for the account of such Affected Person,
from time to time as specified by such Affected Person or its related Purchaser
Agent, additional amounts sufficient to compensate such Affected Person for such
increased costs in the light of such circumstances, to the extent that such
Affected Person reasonably determines such increase in capital to be allocable
to the existence of any of such commitments.

 

(b)                                 If due to any Change in Law, there shall be
any increase after the Initial Closing Date in the cost to any Affected Person
of agreeing to purchase or purchasing, or maintaining the ownership of, the
Purchased Interest (or its portion thereof and including, without limitation,
funding or maintaining its Capital or issuing or maintaining any Letter of
Credit), then, upon demand by such Affected Person, the Seller shall promptly
pay to such Affected Person, from time to time as specified by such Affected
Person, additional amounts sufficient to compensate such Affected Person for
such increased costs.

 

(c)                                  A certificate of an Affected Person (or its
related Purchaser Agent) setting forth the amount or amounts necessary to
compensate such Affected Person as specified in clause (a) or (b) of this
Section and delivered to the Seller and the Administrator, shall be conclusive
absent manifest error.  The Seller shall pay such Affected Person’s related
Purchaser Agent (for the account of such Affected Person) the amount shown as
due on the first Settlement Date occurring after the Seller’s receipt of such
certificate.

 

(d)                                 Failure or delay on the part of any Affected
Person to demand compensation pursuant to this Section 1.7 shall not constitute
a waiver of such Affected Person’s right to

 

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demand such compensation; provided that the Seller shall not be required to
compensate an Affected Person pursuant to this Section for any increased costs
or reductions incurred more than 270 days prior to the date that such Affected
Person, notifies the Seller of the Change in Law giving rise to such increased
costs or reductions and of such Affected Person’s intention to claim
compensation therefor; provided further that, if the Change in Law giving rise
to such increased costs or reductions is retroactive, then the 270-day period
referred to above shall be extended to include the period of retroactive effect
thereof.

 

Section 1.8                                    Requirements of Law.  (a) If,
after the date hereof, any Affected Person determines that any Change in Law:

 

(i)                                     does or shall impose, modify or hold
applicable any reserve, special deposit, compulsory loan or similar requirement
against assets held by, or deposits or other liabilities in or for the account
of, purchases, advances or loans by, or other credit extended by, or any other
acquisition of funds by, any office of such Affected Person that are not
otherwise included in the determination of the Euro-Rate or LMIR hereunder; or

 

(ii)                                  does or shall impose on such Affected
Person any other condition;

 

and the result of any of the foregoing is: (A) to increase the cost to such
Affected Person of acting as Administrator or as a Purchaser Agent, agreeing to
purchase or purchasing or maintaining the ownership of undivided percentage
ownership interests with regard to the Purchased Interest (or interests
therein), any Portion of Capital or any Letter of Credit, or (B) to reduce any
amount receivable hereunder (whether directly or indirectly), then, in any such
case, upon demand by such Affected Person, the Seller shall promptly pay to such
Affected Person additional amounts necessary to compensate such Affected Person
for such additional cost or reduced amount receivable.  All such amounts shall
be payable as incurred.  A certificate as to such amounts submitted to the
Seller and the Administrator by such Affected Person shall be conclusive and
binding for all purposes, absent manifest error.

 

(b)                                 A certificate of an Affected Person (or its
related Purchaser Agent) setting forth the amount or amounts necessary to
compensate such Affected Person as specified in clause (a) of this Section and
delivered to the Seller and the Administrator, shall be conclusive absent
manifest error.  The Seller shall pay such Affected Person’s related Purchaser
Agent (for the account of such Affected Person) the amount shown as due on each
Settlement Date occurring after the Seller’s receipt of such certificate.

 

(c)                                  Failure or delay on the part of any
Affected Person to demand compensation pursuant to this Section 1.8 shall not
constitute a waiver of such Affected Person’s right to demand such compensation;
provided that the Seller shall not be required to compensate an Affected Person
pursuant to this Section for any increased costs or reductions incurred more
than 270 days prior to the date that such Affected Person, notifies the Seller
of the Change in Law giving rise to such increased costs or reductions and of
such Affected Person’s intention to claim compensation therefor; provided
further that, if the Change in Law giving rise to such increased costs or
reductions is retroactive, then the 270-day period referred to above shall be
extended to include the period of retroactive effect thereof.

 

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Section 1.9                                    Funding Losses.

 

(a)                                 The Seller will compensate each Purchaser in
accordance with the terms of this Section 1.8 for all losses, expenses and
liabilities (including any loss, expense or liability incurred by reason of the
liquidation or reemployment of deposits or other funds acquired by such
Purchaser in order to fund or maintain any Portion of Capital hereunder, but
expressly excluding any foregone Program Fees (as defined in the Fee Letter)) as
a result of (i) any repayment (in whole or in part) of any Portion of Capital of
such Purchaser on any day other than a Settlement Date or (ii) any Funded
Purchase not being completed by the Seller in accordance with its request
therefor pursuant to Section 1.2.  Such losses, expenses and liabilities will
include the amount, if any, by which (A) the additional Discount that would have
accrued had such repayment or failure to Purchase not have occurred, exceeds (B)
the income, if any, received by the applicable Purchaser.

 

(b)                                 A certificate of a Purchaser (or its related
Purchaser Agent) setting forth the amount or amounts necessary to compensate
such Purchaser as specified in clause (a) of this Section and delivered to the
Seller and the Administrator, shall be conclusive absent manifest error.  The
Seller shall pay such Purchaser’s related Purchaser Agent (for the account of
such Purchaser) the amount shown as due on each Settlement Date occurring after
the Seller’s receipt of such certificate.

 

Section 1.10                             Taxes.  The Seller agrees that:

 

(a)                                 Any and all payments by the Seller under
this Agreement and any other Transaction Document shall be made free and clear
of and without deduction for any Taxes or Other Taxes; provided, however, that
such payments shall exclude (i) overall income or franchise taxes, in either
case, imposed on the Person receiving such payment by the Seller hereunder by
the jurisdiction under whose laws such Person is organized, the jurisdiction of
such Person’s principal place of business or the jurisdiction in which such
Person holds its undivided percentage ownership interest in the Purchased
Interest, or any political subdivision thereof and (ii) any U.S. Federal
withholding tax imposed by FATCA (all such Taxes other than those referred to in
the proviso above shall hereinafter be referred to as “Indemnified Taxes”).  If
the Seller shall be required by law to deduct any Indemnified Taxes from or in
respect of any sum payable hereunder to any Purchaser, any Liquidity Provider,
Program Support Provider or the Administrator, then the sum payable shall be
increased by the amount necessary to yield to such Person (after payment of all
Taxes) an amount equal to the sum it would have received had no such deductions
been made.

 

(b)                                 Whenever any Indemnified Taxes are payable
by the Seller, as promptly as possible thereafter, the Seller shall send to the
Administrator for its own account or for the account of any Purchaser or any
Liquidity Provider or other Program Support Provider, as the case may be, a
certified copy of an original official receipt showing payment thereof or such
other evidence of such payment as may be available to the Seller and acceptable
to the taxing authorities having jurisdiction over such Person.  If the Seller
fails to pay any Indemnified Taxes when due to the appropriate taxing authority
or fails to remit to the Administrator the required receipts or other required
documentary evidence, the Seller shall indemnify the Administrator

 

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and/or any other Affected Person, as applicable, for any incremental Taxes,
interest or penalties that may become payable by such party as a result of any
such failure.

 

(c)                                  The Seller shall indemnify each Affected
Person within ten Business Days after written demand therefor, for the full
amount of any Indemnified Taxes paid by such Affected Person on or with respect
to any payment by or on account of any obligation of the Seller hereunder
(including Indemnified Taxes imposed or asserted on or attributable to amounts
payable under this Section 1.10) and any penalties, interest and reasonable
expenses arising therefrom or with respect thereto, whether or not such
Indemnified Taxes were correctly or legally imposed or asserted by the relevant
Governmental Authority.  None of Sections 1.7, 1.8, 3.1, 3.2 or 6.4(a) shall
apply to Taxes, which shall be governed exclusively by this Section 1.10.

 

(d)                                 If an Affected Person requests
indemnification or repayment under this Section 1.10, a certificate describing
such amounts shall be submitted to the Seller and the applicable Purchaser Agent
by such Affected Person and shall be conclusive and binding for all purposes,
absent manifest error.

 

(e)                                  (i) Any Affected Person that is entitled to
an exemption from or reduction of withholding tax with respect to payments under
this Agreement shall deliver to the Seller and the Administrator, at the time or
times reasonably requested by the Seller or the Administrator, such properly
completed and executed documentation prescribed by applicable law or reasonably
requested by the Seller or the Administrator as will permit such payments to be
made without withholding or at a reduced rate of withholding.  In addition, any
Affected Person, if reasonably requested by the Seller or the Administrator,
shall deliver such other documentation prescribed by applicable law or
reasonably requested by the Seller or the Administrator as will enable the
Seller or the Administrator to determine whether or not such Affected Person is
subject to backup withholding or information reporting requirements. 
Notwithstanding anything to the contrary in the preceding two sentences, the
completion, execution and submission of such documentation (other than such
documentation required to be delivered by the applicable Affected Person
pursuant to the terms of clause (ii) below) shall not be required if in such
Affected Person’s reasonable judgment such completion, execution or submission
would subject such Affected Person to any material unreimbursed cost or expense
or would materially prejudice the legal or commercial position of such Affected
Person.

 

(ii) Without limiting the generality of the foregoing, each Affected Person
shall deliver to the Seller and the Administrator on or prior to the date on
which such Affected Person, becomes a party to this Agreement (and from time to
time thereafter upon the expiration or invalidity of any of the certificates or
IRS forms described below or upon the request of the Seller or the
Administrator), two (2) original copies of whichever of the following is
applicable:

 

(A) duly completed and executed IRS Form W-8BEN-E or IRS Form W-8BEN, as
applicable (or successor form) establishing eligibility for benefits of an
income tax treaty to which the United States is a party or that such party is
not subject to deduction or withholding of United States federal income tax,

 

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(B) duly completed and executed IRS Form W-8ECI (or successor form),
establishing that such party is not subject to deduction or withholding of
United States federal income tax,

 

(C) in the case of a party claiming the benefits of the exemption for portfolio
interest under Section 881(c) of the Internal Revenue Code, (x) duly executed
certificate to the effect that such Affected Person is not a “bank” within the
meaning of Section 881(c)(3)(A) of the Internal Revenue Code, a “10 percent
shareholder” of the Seller within the meaning of Section 881(c)(3)(B) of the
Internal Revenue Code, or a “controlled foreign corporation” described in
Section 881(c)(3)(C) of the Internal Revenue Code, and (y) duly completed and
executed IRS Form W-8BEN-E or IRS Form W-8BEN, as applicable (or successor
form),

 

(D) duly completed and executed IRS Form W-8IMY (or successor form), accompanied
by appropriate attachments from each beneficial owners that either (a) satisfies
one of the clauses (A) through (C) above, or (b) is a duly completed and
executed IRS Form W-9 (or successor form), or

 

(E) IRS Form W-9 (or successor form), establishing that such party is not
subject to backup withholding or information reporting requirements.

 

Notwithstanding any other provisions of this paragraph, any Affected Person
shall not be required to deliver any form or certificate pursuant to this
subparagraph (ii) that such Affected Person, is not legally able to deliver.

 

(iii) If a payment made to a Affected Person under any Transaction Document
would be subject to U.S. Federal income withholding tax imposed by FATCA, such
Affected Person shall deliver to Seller and the Administrator, at the time or
times prescribed by law and at such time or times reasonably requested by Seller
or the Administrator, such documentation prescribed by applicable law (including
as prescribed by Section 1471(b)(3)(C)(i) of the Internal Revenue Code) and such
additional documentation reasonably requested by Seller or the Administrator as
may be necessary for Seller and the Administrator to comply with their
obligations under FATCA and to determine that such Affected Person has complied
with such Affected Person’s obligations under FATCA or to determine the amount
to deduct and withhold from such payment.  Solely for purposes of this clause
(iii), “FATCA” shall include any amendments made to FATCA after the Initial
Closing Date.

 

(f)                                   If an Affected Person determines, in its
reasonable discretion, that it has received a refund of any Taxes or Other Taxes
as to which it has been indemnified by the Seller or with respect to which the
Seller has paid additional amounts pursuant to this Section 1.10, it shall pay
over such refund to the Seller (but only to the extent of indemnity payments
made, or additional amounts paid, by the Seller under this Section 1.10 with
respect to the Taxes or Other Taxes giving rise to such refund), net of all
out-of-pocket expenses (including Taxes) of the Affected Person, and without
interest (other than any interest paid by the relevant Governmental Authority
with respect to such refund); provided that the Seller, upon the request of such
Affected Person, agrees to repay the amount paid over to the Seller (plus any
penalties, interest or other charges imposed by the relevant Governmental
Authority) to such Affected Person in the event such

 

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Affected Person is required to repay such refund to such Governmental
Authority.  Notwithstanding anything to the contrary in this clause (f), in no
event will any Affected Person be required to pay any amount to the Seller
pursuant to this clause (f) the payment of which would place such Affected
Person in a less favorable net after-Tax position than such Affected Person
would have been in if the indemnification payments or additional amounts giving
rise to such refund had never been paid.  This Section 1.10 shall not be
construed to require any Affected Person to make available its tax returns (or
any other information relating to its taxes which it deems confidential) to the
Seller or any other Person.

 

Section 1.11                             Inability to Determine Euro-Rate or
LMIR. (a)  If the Administrator (or any Purchaser Agent) determines before the
first day of any Settlement Period (or solely with respect to LMIR, on any day)
(which determination shall be final and conclusive) that, by reason of
circumstances affecting the interbank eurodollar market generally, (i) deposits
in dollars (in the relevant amounts for such Settlement Period) are not being
offered to banks in the interbank eurodollar market for such Settlement Period,
(ii) adequate means do not exist for ascertaining the Euro-Rate or LMIR for such
Settlement Period (or portion thereof) or (iii) the Euro-Rate or LMIR does not
accurately reflect the cost to any Purchaser (as determined by the related
Purchaser or the applicable Purchaser Agent) of maintaining any Portion of
Capital during such Settlement Period (or portion thereof), then the
Administrator shall give notice thereof to the Seller.  Thereafter, until the
Administrator or such Purchaser Agent notifies the Seller that the circumstances
giving rise to such suspension no longer exist, (a) no Portion of Capital shall
be funded at the Alternate Rate determined by reference to the Euro-Rate or LMIR
and (b) the Discount for any outstanding Portions of Capital then funded at the
Alternate Rate determined by reference to the Euro-Rate or LMIR shall, on the
last day of the then current Settlement Period (or solely with respect to LMIR,
immediately), be converted to the Alternate Rate determined by reference to the
Base Rate.

 

(b)                                 If, on or before the first day of any
Settlement Period (or solely with respect to LMIR, on any day), the
Administrator shall have been notified by any Affected Person that such Affected
Person has determined (which determination shall be final and conclusive) that
any Change in Law, or compliance by such Affected Person with any Change in Law,
shall make it unlawful or impossible for such Affected Person to fund or
maintain any Portion of Capital at the Alternate Rate and based upon the
Euro-Rate or LMIR, the Administrator shall notify the Seller thereof.  Upon
receipt of such notice, until the Administrator notifies the Seller that the
circumstances giving rise to such determination no longer apply, (a) no Portion
of Capital shall be funded at the Alternate Rate determined by reference to the
Euro-Rate or LMIR and (b) the Discount for any outstanding Portions of Capital
then funded at the Alternate Rate determined by reference to the Euro-Rate or
LMIR shall be converted to the Alternate Rate determined by reference to the
Base Rate either (i) on the last day of the then current Settlement Period (or
solely with respect to LMIR, immediately) if such Affected Person may lawfully
continue to maintain such Portion of Capital at the Alternate Rate determined by
reference to the Euro-Rate or LMIR to such day, or (ii) immediately, if such
Affected Person may not lawfully continue to maintain such Portion of Capital at
the Alternate Rate determined by reference to the Euro-Rate or LMIR to such day.

 

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Section 1.12                             Mitigation Obligations.

 

If any Purchaser requests compensation under Sections 1.7 or 1.8, or if the
Seller is required to pay any additional amount to any Purchaser or any
Governmental Authority for the account of any Purchaser pursuant to Section
1.10, then such Purchaser shall use reasonable efforts to designate a different
lending office for funding or booking its Purchases hereunder or to assign its
rights and obligations hereunder to another of its offices, branches or
affiliates, if, in the judgment of such Purchaser, such designation or
assignment (i) would eliminate or reduce amounts payable pursuant to Sections
1.7, 1.8 or 1.10, as the case may be, in the future and (ii) would not subject
such Purchaser to any unreimbursed cost or expense and would not otherwise be
disadvantageous to such Purchaser.  The Seller hereby agrees to pay all
reasonable costs and expenses incurred by any Purchaser in connection with any
such designation or assignment.

 

Section 1.13                             Extension of Termination Date.

 

Provided that no Termination Event or Unmatured Termination Event has occurred
and is continuing, the Seller may request, in a written notice given to the
Administrator and each Purchaser Agent not less than 60 days and not more than
120 days prior to the then current Facility Termination Date, that the date set
forth in clause (a) of the then-current definition of “Facility Termination
Date” be extended to the date that is 364 days after such then-current date.  In
the event that the Purchasers are all agreeable to such extension, the
Administrator shall so notify the Seller and the Servicer in writing (it being
understood that the Purchasers may accept or decline such a request in their
sole discretion and on such terms as they may elect) not less than 30 days prior
to the then current Facility Termination Date and the Seller, the Servicer, the
Administrator, the Purchaser Agents and the Purchasers shall enter into such
documents as the Purchasers may deem necessary or appropriate to reflect such
extension, and all reasonable costs and expenses incurred by the Purchasers, the
Administrator and the Purchaser Agents in connection therewith (including
reasonable Attorney Costs) shall be paid by the Seller.  In the event any
Purchaser declines the request for such extension, such Purchaser (or the
applicable Purchaser Agent on its behalf) shall so notify the Administrator and
the Administrator shall so notify the Seller of such determination; provided,
that the failure of the Administrator to notify the Seller of the determination
to decline such extension shall not affect the understanding and agreement that
the applicable Purchasers shall be deemed to have refused to grant the requested
extension in the event the Administrator fails to affirmatively notify the
Seller, in writing, of their agreement to accept the requested extension.

 

Section 1.14                             Intended Tax Treatment.  All parties to
this Agreement covenant and agree to treat any Purchase under this Agreement as
debt for all federal income tax purposes (the “Intended Tax Treatment”). All
parties to this Agreement agree not to take any position on any tax return
inconsistent with the Intended Tax Treatment.

 

Section 1.15                             Letters of Credit.  Subject to the
terms and conditions hereof and the satisfaction of the applicable conditions
set forth in Exhibit II, the LC Bank shall issue or cause the issuance of
Letters of Credit (“Letters of Credit”) on behalf of the Seller, an Originator
or an Affiliate of an Originator which is (x) a wholly owned Subsidiary of Cloud
Peak and (y) acceptable to the applicable LC Bank in its sole discretion in
favor of such beneficiaries as the Seller may approve); provided, however, that,
for the avoidance of doubt, the LC Bank’s obligation to issue a Letter of Credit
shall be subject in all respects to the limitations set forth in Section
1.1(a).  Discount shall accrue on all amounts drawn under Letters of Credit for
each day

 

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on and after the applicable Drawing Date so long as such drawn amounts shall
have not been reimbursed to the LC Bank pursuant to the terms hereof.  Letters
of Credit that have not been drawn upon shall not accrue Discount.

 

Section 1.16                             Issuance of Letters of Credit.

 

(a)                                 The Seller may request the LC Bank, upon two
(2) Business Days’ prior written notice submitted on or before 1:00 p.m., New
York time, to issue a Letter of Credit by delivering to the Administrator a
letter of credit application (the “Letter of Credit Application”), substantially
in the form of Annex J attached hereto and an Issuance Notice, substantially in
the form of Annex B-2 (each, an “Issuance Notice”), in each case completed to
the satisfaction of the Administrator and the LC Bank; and, such other
certificates, documents and other papers and information as the Administrator
and LC Bank may reasonably request.  The Seller also has the right to give
instructions and make agreements with respect to any Letter of Credit
Application and the disposition of documents, and to agree with the
Administrator upon any amendment, extension or renewal of any Letter of Credit.

 

(b)                                 Each Letter of Credit shall (i) provide for
the payment of sight drafts or other written demands for payment when presented
for honor thereunder in accordance with the terms thereof and when accompanied
by the documents described therein and (ii) have an expiry date not later than
twelve (12) months after such Letter of Credit’s date of issuance, extension or
renewal, as the case may be, and in no event later than twelve (12) months after
the date in clause (a) of the definition of “Facility Termination Date”.  The
terms of each Letter of Credit may include customary “evergreen” provisions
providing that such Letter of Credit’s expiry date shall automatically be
extended for additional periods not to exceed twelve (12) months unless, not
less than thirty (30) days (or such longer period as may be specified in such
Letter of Credit) (the “Notice Date”) prior to the applicable expiry date, the
LC Bank delivers written notice to the beneficiary thereof declining such
extension; provided, however, that if (x) any such extension would cause the
expiry date of such Letter of Credit to occur after the date that is twelve (12)
months after the date in clause (a) of the definition of “Facility Termination
Date” or (y) the LC Bank determines that any condition precedent (including,
without limitation, those set forth in Section 1.1(a) or Exhibit II) to issuing
such Letter of Credit hereunder is not satisfied (other than any such condition
requiring the Seller to submit an Issuance Notice or Letter of Credit
Application in respect thereof), then the LC Bank, in the case of clause (x)
above, may (or at the written direction of any LC Participant, shall) or, in the
case of clause (y) above, shall, use reasonable efforts in accordance with (and
to the extent permitted by) the terms of such Letter of Credit to prevent the
extension of such expiry date (including notifying the Seller and the
beneficiary of such Letter of Credit in writing prior to the Notice Date that
such expiry date will not be so extended).  Each Letter of Credit shall be
subject either to the Uniform Customs and Practice for Documentary Credits (2007
Revision), International Chamber of Commerce Publication No. 600, and any
amendments or revisions thereof adhered to by the LC Bank or the International
Standby Practices (ISP98-International Chamber of Commerce Publication Number
590), and any amendments or revisions thereof adhered to by the LC Bank, as
determined by the LC Bank.

 

(c)                                  Immediately upon the issuance by the LC
Bank of any Letter of Credit (or any amendment to a Letter of Credit increasing
the amount thereof), the LC Bank shall be deemed to

 

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have sold and transferred to each LC Participant, and each LC Participant shall
be deemed irrevocably and unconditionally to have purchased and received from
the LC Bank, without recourse or warranty, an undivided interest and
participation, to the extent of such LC Participant’s Pro Rata Share, in such
Letter of Credit, each drawing made thereunder and the obligations of the Seller
hereunder with respect thereto, and any security therefor or guaranty pertaining
thereto. Upon any change in the Commitments or Pro Rata Shares of the LC
Participants pursuant to this Agreement, it is hereby agreed that, with respect
to all outstanding Letters of Credit and unreimbursed drawings thereunder, there
shall be an automatic adjustment to the participations pursuant to this Section
1.16(c) to reflect the new Pro Rata Shares of the assignor and assignee LC
Participant or of all LC Participants with Commitments, as the case may be.  In
the event that the LC Bank makes any payment under any Letter of Credit and the
Seller shall not have reimbursed such amount in full to the LC Bank pursuant to
Section 1.18(a), each LC Participant shall be obligated to make Participation
Advances with respect to such Letter of Credit in accordance with Section
1.18(b).

 

Section 1.17                             Requirements For Issuance of Letters of
Credit.  The Seller hereby authorizes and directs the LC Bank to name the
Seller, an Originator or an Affiliate of an Originator for whose benefit a
Letter of Credit has been issued in accordance with Section 1.15 as the
“Applicant” or “Account Party” of such Letter of Credit.

 

Section 1.18                             Disbursements, Reimbursement.

 

(a)                                 In the event of any request for a drawing
under a Letter of Credit by the beneficiary or transferee thereof, the LC Bank
will promptly notify the Administrator, each Purchaser Agent and the Seller of
such request and of any funding thereunder. On the date that an amount is paid
by the LC Bank under any Letter of Credit (each such date, a “Drawing Date”),
the Seller shall be deemed to have requested that a Funded Purchase in an amount
equal to the amount so paid by the LC Bank be made by the Purchasers in the
Purchaser Group for the LC Bank and the LC Participants to be disbursed on the
Drawing Date under such Letter of Credit in accordance with Section 1.1(c).  In
the event that the conditions precedent to making a Purchase are satisfied on
such Drawing Date, the applicable Purchasers shall make a Funded Purchase in
accordance with (and subject to the terms of) Section 1.1(c). The proceeds of
each such Funded Purchase shall be delivered directly to the Administrator to be
immediately distributed by the Administrator to the LC Bank.

 

(b)                                 If any Funded Purchase described in the
preceding clause (a) cannot be made because the conditions precedent to such
Purchase are not satisfied, the Seller shall (out of its own funds available
therefor) reimburse the LC Bank (such obligation to reimburse the LC Bank, a
“Reimbursement Obligation”) by 2:00 p.m., New York time on the applicable
Drawing Date (or, if notice of the Drawing Date is not received by the Seller by
10:00 a.m., New York time on the Drawing Date, by 2:00 p.m., New York time on
the first Business Day after such notice is received by the Seller) in an amount
equal to the positive difference between (x) the amount so paid by the LC Bank
and not repaid in accordance with clause (a) above and (y) the amount of
available funds on deposit in the LC Collateral Account. Available funds on
deposit in the LC Collateral Account shall be applied by the Administrator to
satisfy the Reimbursement Obligation in respect of such drawing or a portion
thereof. In the event the Seller fails to so reimburse the LC Bank for the full
amount of any drawing under any Letter of Credit when and

 

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as required hereunder, the LC Bank will promptly notify each LC Participant
thereof whereupon (i) each LC Participant shall upon receipt of such notice make
available to the LC Bank a participation advance in immediately available funds
equal to its Pro Rata Share of the amount of the drawing (a “Participation
Advance”), whereupon the LC Participants shall each be deemed to have made a
Purchase in that amount. If any LC Participant so notified fails to make
available to the LC Bank the amount of such LC Participant’s Pro Rata Share of
such amount by 2:00 p.m. (New York City time) on the Drawing Date, then interest
shall accrue on such LC Participant’s obligation to make such payment, from the
Drawing Date to the date on which such LC Participant makes such payment (i) at
a rate per annum equal to the Federal Funds Rate during the first three days
following the Drawing Date and (ii) at a rate per annum equal to the Base Rate
on and after the fourth day following the Drawing Date. The LC Bank will
promptly give notice to each LC Participant of the occurrence of the Drawing
Date, but failure of the LC Bank to give any such notice on the Drawing Date or
in sufficient time to enable any LC Participant to effect such payment on such
date shall not relieve such LC Participant from its obligation under this clause
(b). Each LC Participant’s Commitment shall continue until the Final Payout
Date.  No Participation Advance by any LC Participant shall reduce the then
outstanding Reimbursement Obligation owed by the Seller to the LC Bank.

 

(c)                                  Any notice given by the LC Bank pursuant to
this Section 1.18 may be oral if promptly confirmed in writing; provided that
the lack of such a prompt written confirmation shall not affect the
conclusiveness or binding effect of such oral notice.

 

Section 1.19                             Repayment of Participation Advances.

 

(a)                                 Upon (and only upon) receipt by the LC Bank
for its account of immediately available funds from or for the account of the
Seller (i) in reimbursement of any payment made by the LC Bank under a Letter of
Credit with respect to which any LC Participant has made a Participation Advance
to the LC Bank or (ii) in payment of Discount on the Purchases made or deemed to
have been made in connection with any such draw, the LC Bank will pay to each LC
Participant, ratably (based on the outstanding drawn amounts funded by each such
LC Participant in respect of such Letter of Credit) its share of such funds, in
the same funds as those received by the LC Bank; it being understood, that the
LC Bank shall retain a ratable amount of such funds that were not the subject of
any payment in respect of such Letter of Credit by any LC Participant.

 

(b)                                 If the LC Bank is required at any time to
return to the Seller, or to a trustee, receiver, liquidator, custodian, or any
official in any Insolvency Proceeding, any portion of the payments made by the
Seller to the LC Bank pursuant to this Agreement in reimbursement of a payment
made under the Letter of Credit or interest or fee thereon, each LC Participant
shall, on demand of the LC Bank, forthwith return to the LC Bank the amount of
its Pro Rata Share of any amounts so returned by the LC Bank plus interest at
the Federal Funds Rate, from the date the payment was first made to such LC
Participant through, but not including, the date the payment is returned by such
LC Participant.

 

Section 1.20                             Documentation; Documentary and
Processing Charges.  The Seller agrees to be bound by the terms of the Letter of
Credit Application and by the LC Bank’s written regulations and customary
practices relating to letters of credit. In the event of a conflict between

 

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the Letter of Credit Application and this Agreement, this Agreement shall
govern.  Except in the case of gross negligence or willful misconduct, the LC
Bank shall not be liable for any error, negligence and/or mistakes, whether of
omission or commission, in following the Seller’s instructions or those
contained in the Letters of Credit or any modifications, amendments or
supplements thereto.  In addition to any other fees or expenses owing under the
Fee Letter or any other Transaction Document or otherwise pursuant to any Letter
of Credit Application, the Seller shall pay to the LC Bank for its own account
it standard and customary fees with respect to the issuance, amendment, renewal
or extension of any Letter of Credit or processing of drawings thereunder.  Such
customary fees shall be payable in arrears on each Settlement Date for the prior
Settlement Period and on the Final Payout Date and shall be nonrefundable.

 

Section 1.21                             Determination to Honor Drawing
Request.  In determining whether to honor any request for drawing under any
Letter of Credit by the beneficiary thereof, the LC Bank shall be responsible
only to determine that the documents and certificates required to be delivered
under such Letter of Credit have been delivered and that they comply on their
face with the requirements of such Letter of Credit and that any other drawing
condition appearing on the face of such Letter of Credit has been satisfied in
the manner so set forth.

 

Section 1.22                             Nature of Participation and
Reimbursement Obligations.  Each LC Participant’s obligation in accordance with
this Agreement to make Participation Advances as a result of a drawing under a
Letter of Credit, and the obligations of the Seller to reimburse the LC Bank
upon a draw under a Letter of Credit, shall be absolute, unconditional and
irrevocable, and shall be performed strictly in accordance with the terms of
this Article I under all circumstances, including the following circumstances:

 

(a)                                 any set-off, counterclaim, recoupment,
defense or other right which such LC Participant may have against the LC Bank,
the Administrator, the Purchaser Agents, the Purchasers, the Seller, the
Servicer, an Originator, the Performance Guarantor or any other Person for any
reason whatsoever;

 

(b)                                 the failure of the Seller or any other
Person to comply with the conditions set forth in this Agreement for the making
of a purchase, reinvestments, requests for Letters of Credit or otherwise, it
being acknowledged that such conditions are not required for the making of
Participation Advances hereunder;

 

(c)                                  any lack of validity or enforceability of
any Letter of Credit or any set-off, counterclaim, recoupment, defense or other
right which Seller, the Servicer, an Originator, the Performance Guarantor or
any Affiliate thereof on behalf of which a Letter of Credit has been issued may
have against the LC Bank, the Administrator, any Purchaser, any Purchaser Agent
or any other Person for any reason whatsoever;

 

(d)                                 any claim of breach of warranty that might
be made by the Seller, an Originator or an Affiliate thereof, the LC Bank or any
LC Participant against the beneficiary of a Letter of Credit, or the existence
of any claim, set-off, defense or other right which the Seller, the Servicer,
the LC Bank or any LC Participant may have at any time against a beneficiary,
any successor beneficiary or any transferee of any Letter of Credit or the
proceeds thereof (or any Persons for whom any such transferee may be acting),
the LC Bank, any LC Participant, the

 

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Administrator, any Purchaser or any Purchaser Agent or any other Person, whether
in connection with this Agreement, the transactions contemplated herein or any
unrelated transaction (including any underlying transaction between the Seller
or any Affiliates of the Seller and the beneficiary for which any Letter of
Credit was procured);

 

(e)                                  the lack of power or authority of any
signer of, or lack of validity, sufficiency, accuracy, enforceability or
genuineness of, any draft, demand, instrument, certificate or other document
presented under any Letter of Credit, or any such draft, demand, instrument,
certificate or other document proving to be forged, fraudulent, invalid,
defective or insufficient in any respect or any statement therein being untrue
or inaccurate in any respect, even if the Administrator or the LC Bank has been
notified thereof;

 

(f)                                   payment by the LC Bank under any Letter of
Credit against presentation of a demand, draft or certificate or other document
which does not comply with the terms of such Letter of Credit;

 

(g)                                  the solvency of, or any acts or omissions
by, any beneficiary of any Letter of Credit, or any other Person having a role
in any transaction or obligation relating to a Letter of Credit, or the
existence, nature, quality, quantity, condition, value or other characteristic
of any property or services relating to a Letter of Credit;

 

(h)                                 [Reserved];

 

(i)                                     any Material Adverse Effect on the
Seller, any Originator or any Affiliates thereof;

 

(j)                                    any breach of this Agreement or any
Transaction Document by any party thereto;

 

(k)                                 the occurrence or continuance of an
Insolvency Proceeding with respect to the Seller, any Originator or any
Affiliate thereof;

 

(l)                                     the fact that a Termination Event or an
Unmatured Termination Event shall have occurred and be continuing;

 

(m)                             the fact that this Agreement or the obligations
of Seller or Servicer hereunder shall have been terminated; and

 

(n)                                 any other circumstance or happening
whatsoever, whether or not similar to any of the foregoing.

 

Section 1.23                             [Reserved].

 

Section 1.24                             Liability for Acts and Omissions.  As
between the Seller, on the one hand, and the Administrator, the LC Bank, the LC
Participants, the Purchaser Agents and the Purchasers, on the other, the Seller
assumes all risks of the acts and omissions of, or misuse of any Letter of
Credit by, the respective beneficiaries of such Letter of Credit. In furtherance
and not in limitation of the respective foregoing, none of the Administrator,
the LC Bank, the LC Participants, the Purchaser Agents or the Purchasers shall
be responsible for: (i) the form,

 

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validity, sufficiency, accuracy, genuineness or legal effect of any document
submitted by any party in connection with the application for an issuance of any
such Letter of Credit, even if it should in fact prove to be in any or all
respects invalid, insufficient, inaccurate, fraudulent or forged (even if the LC
Bank, any LC Participant or any Purchaser shall have been notified thereof);
(ii) the validity or sufficiency of any instrument transferring or assigning or
purporting to transfer or assign any such Letter of Credit or the rights or
benefits thereunder or proceeds thereof, in whole or in part, which may prove to
be invalid or ineffective for any reason; (iii) the failure of the beneficiary
of any such Letter of Credit, or any other party to which such Letter of Credit
may be transferred, to comply fully with any conditions required in order to
draw upon such Letter of Credit or any other claim of the Seller against any
beneficiary of such Letter of Credit, or any such transferee, or any dispute
between or among the Seller and any beneficiary of any Letter of Credit or any
such transferee; (iv) errors, omissions, interruptions or delays in transmission
or delivery of any messages, by mail, electronic mail, cable, telegraph, telex,
facsimile or otherwise, whether or not they be encrypted; (v) errors in
interpretation of technical terms; (vi) any loss or delay in the transmission or
otherwise of any document required in order to make a drawing under any such
Letter of Credit or of the proceeds thereof; (vii) the misapplication by the
beneficiary of any such Letter of Credit of the proceeds of any drawing under
such Letter of Credit; or (viii) any consequences arising from causes beyond the
control of the Administrator, the LC Bank, the LC Participants, the Purchaser
Agents and the Purchasers, including any Governmental Acts, and none of the
above shall affect or impair, or prevent the vesting of, any of the LC Bank’s
rights or powers hereunder.  Nothing in the preceding sentence shall relieve the
LC Bank from liability to the Seller in any independent action or proceeding
brought by the Seller against the LC Bank following reimbursement or payment by
the Seller to the extent of any unavoidable direct damages suffered by the
Seller that are caused directly by the LC Bank’s gross negligence or willful
misconduct in connection with the actions or omissions described in such clauses
(i) through (viii) of such sentence.; provided that (i) the LC Bank shall be
deemed to have acted with due diligence and reasonable care if it acts in
accordance with standard letter of credit practice of commercial banks; and (ii)
the Seller’s aggregate remedies against the LC Bank for wrongfully honoring a
presentation or wrongfully retaining honored documents shall in no event exceed
the aggregate amount paid by the Seller to the LC Bank with respect to the
honored presentation, plus interest.  In no event shall the Administrator, the
LC Bank, the LC Participants, the Purchaser Agents or the Purchasers or their
respective Affiliates, be liable to the Seller or any other Person for any
indirect, consequential, incidental, punitive, exemplary or special damages or
expenses (including without limitation Attorney Costs), or for any damages
resulting from any change in the value of any property relating to a Letter of
Credit.

 

Without limiting the generality of the foregoing, the Administrator, the LC
Bank, the LC Participants, the Purchaser Agents and the Purchasers and each of
its Affiliates (i) may rely on any written communication believed in good faith
by such Person to have been authorized or given by or on behalf of the applicant
for a Letter of Credit; (ii) may honor any presentation if the documents
presented appear on their face to comply with the terms and conditions of the
relevant Letter of Credit; (iii) may honor a previously dishonored presentation
under a Letter of Credit, whether such dishonor was pursuant to a court order,
to settle or compromise any claim of wrongful dishonor, or otherwise, and shall
be entitled to reimbursement to the same extent as if such presentation had
initially been honored, together with any interest paid by the LC Bank or its
Affiliates; (iv) may honor any drawing that is

 

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payable upon presentation of a statement advising negotiation or payment, upon
receipt of such statement (even if such statement indicates that a draft or
other document is being delivered separately), and shall not be liable for any
failure of any such draft or other document to arrive, or to conform in any way
with the relevant Letter of Credit; (v) may pay any paying or negotiating bank
claiming that it rightfully honored under the laws or practices of the place
where such bank is located; and (vi) may settle or adjust any claim or demand
made on the Administrator, the LC Bank, the LC Participants, the Purchaser
Agents or the Purchasers or their respective Affiliates, in any way related to
any order issued at the applicant’s request to an air carrier, a letter of
guarantee or of indemnity issued to a carrier or any similar document (each an
“Order”) and may honor any drawing in connection with any Letter of Credit that
is the subject of such Order, notwithstanding that any drafts or other documents
presented in connection with such Letter of Credit fail to conform in any way
with such Letter of Credit.

 

In furtherance and extension and not in limitation of the specific provisions
set forth above, any action taken or omitted by the LC Bank under or in
connection with any Letter of Credit issued by it or any documents and
certificates delivered thereunder, if taken or omitted in good faith and without
gross negligence or willful misconduct, as determined by a final non-appealable
judgment of a court of competent jurisdiction, shall not put the LC Bank under
any resulting liability to the Seller, any LC Participant or any other Person.

 

ARTICLE II

 

REPRESENTATIONS AND WARRANTIES; COVENANTS;

TERMINATION EVENTS

 

Section 2.1                                    Representations and Warranties;
Covenants.  Each of the Seller and the Servicer hereby makes the representations
and warranties, and hereby agrees to perform and observe the covenants,
applicable to it as set forth in Exhibits III and IV, respectively.

 

Section 2.2                                    Termination Events.  If any of
the Termination Events set forth in Exhibit V shall occur, the Administrator may
(with the consent of the Majority Purchaser Agents) or shall (at the direction
of the Majority Purchaser Agents), by notice to the Seller, declare the Facility
Termination Date to have occurred (in which case the Facility Termination Date
shall be deemed to have occurred); provided, that automatically upon the
occurrence of any event (without any requirement for the passage of time or the
giving of notice) described in paragraph (f) of Exhibit V, the Facility
Termination Date shall occur. Upon any such declaration, occurrence or deemed
occurrence of the Facility Termination Date, the Administrator, each Purchaser
Agent and each Purchaser shall have, in addition to the rights and remedies that
they may have under this Agreement, all other rights and remedies provided to
secured parties after default under the UCC and under other applicable law,
which rights and remedies shall be cumulative.

 

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ARTICLE III

 

INDEMNIFICATION

 

Section 3.1                                    Indemnities by the Seller. 
Without limiting any other rights any such Person may have hereunder or under
applicable law, the Seller hereby indemnifies and holds harmless, on an
after-tax basis, the Administrator, each Purchaser Agent, each Liquidity
Provider, each Program Support Provider and each Purchaser and their respective
officers, directors, agents and employees (each an “Indemnified Party”) from and
against any and all damages, losses, claims, liabilities, penalties, Taxes,
costs and expenses (including reasonable attorneys’ fees and court costs) (all
of the foregoing collectively, the “Indemnified Amounts”) at any time imposed on
or incurred by any Indemnified Party arising out of or otherwise relating to any
Transaction Document, the transactions contemplated thereby or the acquisition
of any portion of the Purchased Interest, or any action taken or omitted by any
of the Indemnified Parties (including any action taken by the Administrator as
attorney-in-fact for the Seller, the Servicer or any Originator hereunder or
under any other Transaction Document and including as a consequence, direct or
indirect, of the issuance of any Letter of Credit), whether arising by reason of
the acts to be performed by the Seller hereunder or otherwise, excluding only
Indemnified Amounts to the extent (a) a final judgment of a court of competent
jurisdiction holds that such Indemnified Amounts resulted from gross negligence
or willful misconduct of the Indemnified Party seeking indemnification, (b) due
to the credit risk of the Obligor and for which reimbursement would constitute
recourse to any Originator, the Seller or the Servicer for uncollectible
Receivables or (c) such Indemnified Amounts include Taxes imposed or based on,
or measured by, the gross or net income or receipts of such Indemnified Party by
the jurisdiction under the laws of which such Indemnified Party is organized (or
any political subdivision thereof); provided, however, that nothing contained in
this sentence shall limit the liability of the Seller or the Servicer or limit
the recourse of any Indemnified Party to the Seller or the Servicer for any
amounts otherwise specifically provided to be paid by the Seller or the Servicer
hereunder.  Without limiting the foregoing indemnification, but subject to the
limitations set forth in clauses (a), (b), (c) and (d) of the previous sentence,
the Seller shall indemnify each Indemnified Party for Indemnified Amounts
(including losses in respect of uncollectible Receivables, regardless, for
purposes of these specific matters, whether reimbursement therefor would
constitute recourse to the Seller or the Servicer) relating to or resulting from
any of the following:

 

(i)                                     the failure of any Receivable included
in the calculation of the Net Receivables Pool Balance as an Eligible Receivable
to be an Eligible Receivable as of the date of such calculation, the failure of
any information contained in any Information Package or Interim Report to be
true and correct, or the failure of any other information provided to any
Purchaser or the Administrator with respect to the Receivables or this Agreement
to be true and correct;

 

(ii)                                  the failure of any representation,
warranty or statement made or deemed made by the Seller (or any employee,
officer or agent of the Seller) under or in connection with this Agreement, any
other Transaction Document, or any Information Package, any Interim Report or
any other information or report delivered by or on behalf of the Seller pursuant
hereto to have been true and correct as of the date made or deemed made;

 

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(iii)                               the failure by the Seller to comply with any
applicable law, rule or regulation with respect to any Receivable or the related
Contract, or the nonconformity of any Receivable or related Contract with any
such applicable law, rule or regulation;

 

(iv)                              the failure of the Seller to vest and maintain
vested in the Administrator, for the benefit of the Purchasers, a first priority
perfected ownership or security interest in the Purchased Interest and the
property conveyed hereunder, free and clear of any Adverse Claim;

 

(v)                                 any commingling of funds to which the
Administrator, any Purchaser Agent or any Purchaser is entitled hereunder with
any other funds;

 

(vi)                              the failure to have filed, or any delay in
filing, financing statements (including fixture filings and as extracted
collateral filings) or other similar instruments or documents under the UCC of
any applicable jurisdiction or other applicable laws with respect to any
Receivables in, or purporting to be in, the Receivables Pool and the other Pool
Assets, whether at the time of any Purchase or at any subsequent time;

 

(vii)                           any failure of a Lock-Box Bank to comply with
the terms of the applicable Lock-Box Agreement;

 

(viii)                        any dispute, claim, offset or defense (other than
discharge in bankruptcy of the Obligor) of the Obligor to the payment of any
Receivable (including without limitation a defense based on such Receivable or
the related Contract not being a legal, valid and binding obligation of such
Obligor enforceable against it in accordance with its terms), or any other claim
resulting from the sale or lease of goods or the rendering of services related
to such Receivable or the furnishing or failure to furnish any such goods or
services or other similar claim or defense not arising from the financial
inability of any Obligor to pay undisputed indebtedness;

 

(ix)                              any failure of the Seller (or any of its
Affiliates acting as the Servicer) to perform its duties or obligations in
accordance with the provisions of this Agreement, any Contract or any other
Transaction Document to which it is a party;

 

(x)                                 any action taken by the Administrator as
attorney-in-fact for the Seller or any Originator pursuant to this Agreement or
any other Transaction Document;

 

(xi)                              any reduction in Capital as a result of the
distribution of Collections pursuant to Section 1.4(d), if all or a portion of
such distributions shall thereafter be rescinded or otherwise must be returned
for any reason;

 

(xii)                           the use of proceeds of Purchases or the issuance
of any Letter of Credit; or

 

(xiii)                        any environmental liability claim, products
liability claim or personal injury or property damage suit or other similar or
related claim or action of whatever sort, arising out of or in connection with
any Receivable or any other suit, claim or action of whatever sort relating to
any of the Transaction Documents.

 

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Section 3.2                                    Indemnities by the Servicer. 
Without limiting any other rights that any Indemnified Party may have hereunder
or under applicable law, rules or regulations, the Servicer hereby agrees to
indemnify each Indemnified Party from and against any and all Indemnified
Amounts arising out of or resulting from (whether directly or indirectly): (a)
the failure of any information contained in any Information Package or Interim
Report to be true and correct, or the failure of any other information provided
to such Indemnified Party by, or on behalf of, the Servicer to be true and
correct, (b) the failure of any representation, warranty or statement made or
deemed made by the Servicer (or any of its officers) under or in connection with
this Agreement or any other Transaction Document to which it is a party to have
been true and correct as of the date made or deemed made when made, (c) the
failure by the Servicer to comply with any applicable law, rule or regulation
with respect to any Pool Receivable or the related Contract, (d) any dispute,
claim, offset or defense of the Obligor (other than as a result of discharge in
bankruptcy with respect to such Obligor) to the payment of any Receivable in, or
purporting to be in, the Receivables Pool resulting from or related to the
collection activities with respect to such Receivable or (e) any failure of the
Servicer to perform its duties or obligations in accordance with the provisions
hereof or any other Transaction Document to which it is a party.

 

ARTICLE IV

 

ADMINISTRATION AND COLLECTIONS

 

Section 4.1                                    Appointment of the Servicer.

 

(a)                                 The servicing, administering and collection
of the Pool Receivables shall be conducted by the Person so designated from time
to time as the Servicer in accordance with this Section 4.1. Until the
Administrator gives notice to Cloud Peak (in accordance with this Section 4.1)
of the designation of a new Servicer, Cloud Peak is hereby designated as, and
hereby agrees to perform the duties and obligations of, the Servicer pursuant to
the terms hereof. Upon the occurrence of a Termination Event, the Administrator
may (with the consent of the Majority Purchaser Agents) or shall (at the
direction of the Majority Purchaser Agents) designate as Servicer any Person
(including itself) to succeed Cloud Peak or any successor Servicer, on the
condition in each case that any such Person so designated shall agree to perform
the duties and obligations of the Servicer pursuant to the terms hereof.

 

(b)                                 Upon the designation of a successor Servicer
as set forth in clause (a), Cloud Peak agrees that it will terminate its
activities as Servicer hereunder in a manner that the Administrator reasonably
determines will facilitate the transition of the performance of such activities
to the new Servicer, and Cloud Peak shall cooperate with and assist such new
Servicer. Such cooperation shall include access to and transfer of related
records (including all Contracts) and use by the new Servicer of all licenses
(or the obtaining of new licenses), hardware or software necessary or reasonably
desirable to collect the Pool Receivables and the Related Security.

 

(c)                                  Cloud Peak acknowledges that, in making its
decision to execute and deliver this Agreement, the Administrator and each
member in each Purchaser Group have relied on Cloud Peak agreement to act as
Servicer hereunder. Accordingly, Cloud Peak agrees that it will not voluntarily
resign as Servicer.

 

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(d)                                 The Servicer may delegate its duties and
obligations hereunder to any subservicer (each a “Sub-Servicer”); provided,
that, in each such delegation: (i) such Sub-Servicer shall agree in writing to
perform the delegated duties and obligations of the Servicer pursuant to the
terms hereof, (ii) the Servicer shall remain liable for the performance of the
duties and obligations so delegated, (iii) the Seller, the Administrator and
each Purchaser Group shall have the right to look solely to the Servicer for
performance, (iv) the terms of any agreement with any Sub-Servicer shall provide
that the Administrator may terminate such agreement upon the termination of the
Servicer hereunder by giving notice of its desire to terminate such agreement to
the Servicer (and the Servicer shall provide appropriate notice to each such
Sub-Servicer) and (v) if such Sub-Servicer is not an Affiliate of Cloud Peak,
the Administrator and the Majority Purchaser Agents shall have consented in
writing in advance to such delegation.

 

Section 4.2                                    Duties of the Servicer.

 

(a)                                 The Servicer shall take or cause to be taken
all such action as may be necessary or reasonably advisable to administer and
collect each Pool Receivable from time to time, all in accordance with this
Agreement and all applicable laws, rules and regulations, with reasonable care
and diligence, and in accordance with the Credit and Collection Policy and
consistent with the past practices of the Originators.  The Servicer shall set
aside for the accounts of the Seller and each Purchaser Group the amount of
Collections to which each such Purchaser Group is entitled in accordance with
Article I hereof.  The Servicer may, in accordance with the applicable Credit
and Collection Policy and consistent with past practices of the Originators,
extend the maturity of any Pool Receivable and extend the maturity or adjust the
Outstanding Balance of any Defaulted Receivable, as the Servicer may reasonably
determine to be appropriate to maximize Collections thereof or reflect
adjustments expressly permitted under the Credit and Collection Policy or as
expressly required under applicable laws, rules or regulations or the applicable
Contract; provided, that for purposes of this Agreement: (i) such extension
shall not, and shall not be deemed to, change the number of days such Pool
Receivable has remained unpaid from the date of the original due date related to
such Pool Receivable, (ii) such extension or adjustment shall not alter the
status of such Pool Receivable as a Delinquent Receivable or a Defaulted
Receivable or limit the rights of any Purchaser, Purchaser Agent or the
Administrator under this Agreement or any other Transaction Document and (iii)
if a Termination Event has occurred and is continuing and Cloud Peak or an
Affiliate thereof is serving as the Servicer, Cloud Peak or such Affiliate may
take such action only upon the prior approval of the Administrator.  The Seller
shall deliver to the Servicer and the Servicer shall hold for the benefit of the
Seller and the Administrator (individually and for the benefit of each Purchaser
Group), in accordance with their respective interests, all records and documents
(including computer tapes or disks) with respect to each Pool Receivable.
Notwithstanding anything to the contrary contained herein, if a Termination
Event has occurred and is continuing, the Administrator may direct the Servicer
(whether the Servicer is Cloud Peak or any other Person) to commence or settle
any legal action to enforce collection of any Pool Receivable or to foreclose
upon or repossess any Related Security.

 

(b)                                 The Servicer shall, as soon as practicable
following actual receipt of collected funds, turn over to the Seller the
collections of any indebtedness that is not a Pool Receivable, less, if Cloud
Peak or an Affiliate thereof is not the Servicer, all reasonable and appropriate
out-of-pocket costs and expenses of such Servicer of servicing, collecting and
administering such

 

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collections. The Servicer, if other than Cloud Peak or an Affiliate thereof,
shall, as soon as practicable upon demand, deliver to the Seller all records in
its possession that evidence or relate to any indebtedness that is not a Pool
Receivable, and copies of records in its possession that evidence or relate to
any indebtedness that is a Pool Receivable.

 

(c)                                  The Servicer’s obligations hereunder shall
terminate on the Final Payout Date.  After such termination, if Cloud Peak or an
Affiliate thereof was not the Servicer on the date of such termination, the
Servicer shall promptly deliver to the Seller all books, records and related
materials that the Seller previously provided to the Servicer, or that have been
obtained by the Servicer, in connection with this Agreement.

 

Section 4.3                                    Lock-Box Account and LC
Collateral Account Arrangements.  Prior to the Closing Date, the Seller shall
have entered into Lock-Box Agreements with all of the Lock-Box Banks and
delivered executed counterparts thereof to the Administrator.  During the
continuance of a Termination Event or during a Level II Minimum Liquidity
Period, the Administrator may (and shall, at the direction of the Majority
Purchaser Agents), at any time thereafter give notice to each Lock-Box Bank that
the Administrator is exercising its rights under the Lock-Box Agreements to do
any or all of the following:  (a) to exercise exclusive dominion and control
(for the benefit of the Secured Parties) over each of the Lock-Box Accounts and
all funds on deposit therein and (b) to take any or all other actions permitted
under the applicable Lock-Box Agreement. The Seller and the Servicer each hereby
agree that if the Administrator at any time takes any action set forth in the
preceding sentence, the Administrator shall have exclusive control (for the
benefit of the Secured Parties) of the proceeds (including Collections) of all
Pool Receivables and the Seller and the Servicer hereby further agree to take
any other action that the Administrator may reasonably request to transfer such
control or to ensure that the Administrator maintains such control.  Any
proceeds of Pool Receivables received by the Seller or the Servicer thereafter
shall be sent immediately to, or as otherwise instructed by, the Administrator. 
The Seller and the Servicer hereby irrevocably instruct the Administrator on
each Business Day during the Level II Minimum Liquidity Period, so long as the
Administrator has taken exclusive dominion and control over each of the Lock-Box
Accounts and no Termination Event or Unmatured Termination Event exists, to
transfer all available amounts on deposit in the Lock-Box Accounts as of the end
of each Business Day and after giving effect to any distributions to the
Servicer on such day pursuant to Section 1.4(g), to the LC Collateral Account.

 

The Administrator shall have exclusive dominion and control, including the
exclusive right of withdrawal, over the LC Collateral Account.  Amounts, if any,
on deposit in the LC Collateral Account on the Final Payout Date shall be
remitted by the Administrator to the Seller.

 

The Administrator shall, on each Settlement Date (if such date occurs on a
Termination Day), remove any available amounts then on deposit in the LC
Collateral Account and deposit such amounts into each Purchaser Agent’s account
in accordance with the priorities set forth in Section 1.4(d), to the extent
that any amounts are then due and owing under clauses first through third of
Section 1.4(d)(ii) after giving effect to the distribution, if any, by the
Servicer on such date in accordance with Section 1.4(d).

 

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Section 4.4            Enforcement Rights.

 

(a)           At any time following the occurrence and during the continuation
of a Termination Event:

 

(i)            the Administrator may direct the Obligors that payment of all
amounts payable under any Pool Receivable is to be made directly to the
Administrator or its designee,

 

(ii)           the Administrator may instruct the Seller or the Servicer to give
notice of the Purchaser Groups’ interest in Pool Receivables to each Obligor,
which notice shall direct that payments be made directly to the Administrator or
its designee (on behalf of such Purchaser Groups), and the Seller or the
Servicer, as the case may be, shall give such notice at the expense of the
Seller or the Servicer, as the case may be; provided, that if the Seller or the
Servicer, as the case may be, fails to so notify each Obligor, the Administrator
(at the Seller’s or the Servicer’s, as the case may be, expense) may so notify
the Obligors,

 

(iii)          the Administrator may request the Servicer to, and upon such
request the Servicer shall: (A) assemble all of the records necessary or
desirable to collect the Pool Receivables and the Related Security, and transfer
or license to a successor Servicer the use of all software necessary or
desirable to collect the Pool Receivables and the Related Security, and make the
same available to the Administrator or its designee (for the benefit of the
Purchasers) at a place selected by the Administrator, and (B) segregate all
cash, checks and other instruments received by it from time to time constituting
Collections in a manner reasonably acceptable to the Administrator and, promptly
upon receipt, remit all such cash, checks and instruments, duly endorsed or with
duly executed instruments of transfer, to the Administrator or its designee, and

 

(iv)          the Administrator may collect any amounts due from an Originator
under the Purchase and Sale Agreement.

 

(b)           The Seller hereby authorizes the Administrator (on behalf of each
Purchaser Group), and irrevocably appoints the Administrator as its
attorney-in-fact with full power of substitution and with full authority in the
place and stead of the Seller, which appointment is coupled with an interest, to
take any and all steps in the name of the Seller and on behalf of the Seller
necessary or desirable, in the reasonable determination of the Administrator,
after the occurrence and during the continuation of a Termination Event, to
collect any and all amounts or portions thereof due under any and all Pool
Assets, including endorsing the name of the Seller on checks and other
instruments representing Collections and enforcing such Pool Assets.
Notwithstanding anything to the contrary contained in this subsection, none of
the powers conferred upon such attorney-in-fact pursuant to the preceding
sentence shall subject such attorney-in-fact to any liability if any action
taken by it shall prove to be inadequate or invalid, nor shall they confer any
obligations upon such attorney-in-fact in any manner whatsoever.

 

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Section 4.5            Responsibilities of the Seller.

 

(a)           Anything herein to the contrary notwithstanding, the Seller shall:
(i) perform all of its obligations, if any, under the Contracts related to the
Pool Receivables to the same extent as if interests in such Pool Receivables had
not been transferred hereunder, and the exercise by the Administrator, the
Purchaser Agents or the Purchasers of their respective rights hereunder shall
not relieve the Seller from such obligations, and (ii) to the extent the Seller
is under any obligation to do so, pay when due any taxes, including any sales
taxes payable in connection with the Pool Receivables and their creation and
satisfaction. None of the Administrator, the Purchaser Agents or any of the
Purchasers shall have any obligation or liability with respect to any Pool
Asset, nor shall any of them be obligated to perform any of the obligations of
Seller, Servicer, Cloud Peak or any Originator thereunder.

 

(b)           Cloud Peak hereby irrevocably agrees that if at any time it shall
cease to be the Servicer hereunder, it shall act (if the then-current Servicer
so requests) as the data-processing agent of the Servicer and, in such capacity,
Cloud Peak shall conduct the data-processing functions of the administration of
the Receivables and the Collections thereon in substantially the same way that
Cloud Peak conducted such data-processing functions while it acted as the
Servicer.  In connection with any such processing functions, the Seller shall
pay to Cloud Peak its reasonable out-of-pocket costs and expenses from the
Seller’s own funds (subject to the priority of payments set forth in
Section 1.4).

 

Section 4.6            Servicing Fee.  (a)  Subject to clause (b), the Servicer
shall be paid a fee (the “Servicing Fee”) equal to 1.00% per annum (the
“Servicing Fee Rate”) of the daily average aggregate Outstanding Balance of the
Pool Receivables.  The Purchasers’ Share of the Servicing Fee shall be paid
through the distributions contemplated by Section 1.4(d) and the Seller’s Share
of the Servicing Fee shall be paid by the Seller on each Settlement Date.

 

(b)           If the Servicer ceases to be Cloud Peak or an Affiliate thereof,
the Servicing Fee shall be the greater of: (i) the amount calculated pursuant to
clause (a), and (ii) an alternative amount specified by the successor Servicer
not to exceed 110% of the aggregate reasonable costs and expenses incurred by
such successor Servicer in connection with the performance of its obligations as
Servicer.

 

ARTICLE V
 
THE AGENTS

 

Section 5.1            Appointment and Authorization.  (a)  Each Purchaser and
Purchaser Agent hereby irrevocably designates and appoints PNC Bank, National
Association, as the “Administrator” hereunder and authorizes the Administrator
to take such actions and to exercise such powers as are delegated to the
Administrator hereby and to exercise such other powers as are reasonably
incidental thereto.  The Administrator shall have no duties or responsibilities
except those expressly set forth in this Agreement or in the other Transaction
Documents.  The duties of the Administrator shall be mechanical and
administrative in nature.  At no time shall the Administrator have any duty or
responsibility to any Person to investigate or confirm the correctness or
accuracy of any information or documents delivered to it in its role as

 

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Administrator hereunder or any obligation in respect of the failure of any
Person (other than the Administrator) to perform any obligation hereunder or
under any other Transaction Document.  The Administrator shall not have, by
reason of this Agreement, a fiduciary relationship in respect of any Purchaser
Agent, Purchaser, the Seller, the Servicer or any Originator.  Nothing in this
Agreement or any of the Transaction Documents, express or implied, is intended
to or shall be construed to impose upon the Administrator any obligations in
respect of this Agreement or any of the Transaction Documents except as
expressly set forth herein or therein.  The Administrator shall not have any
duty or responsibility, either initially or on a continuing basis, to provide
any Purchaser or Purchaser Agent with any credit or other information with
respect to the Seller, any Originator, Cloud Peak or their Affiliates, whether
coming into its possession before the Closing Date or at any time or times
thereafter.

 

(b)           Each Purchaser hereby irrevocably designates and appoints the
respective institution identified as the Purchaser Agent for such Purchaser’s
Purchaser Group on the signature pages hereto or in the Assumption Agreement or
Transfer Supplement pursuant to which such Purchaser becomes a party hereto, and
each authorizes such Purchaser Agent to take such action on its behalf under the
provisions of this Agreement and to exercise such powers and perform such duties
as are expressly delegated to such Purchaser Agent by the terms of this
Agreement, if any, together with such other powers as are reasonably incidental
thereto. Notwithstanding any provision to the contrary elsewhere in this
Agreement, no Purchaser Agent shall have any duties or responsibilities, except
those expressly set forth herein, or any fiduciary relationship with any
Purchaser or other Purchaser Agent or the Administrator, and no implied
covenants, functions, responsibilities, duties, obligations or liabilities on
the part of such Purchaser Agent shall be read into this Agreement or otherwise
exist against such Purchaser Agent.

 

(c)           Except as otherwise specifically provided in this Agreement, the
provisions of this Article V are solely for the benefit of the Purchaser Agents,
the Administrator and the Purchasers, and none of the Seller or Servicer shall
have any rights as a third-party beneficiary or otherwise under any of the
provisions of this Article V, except that this Article V shall not affect any
obligations which any Purchaser Agent, the Administrator or any Purchaser may
have to the Seller or the Servicer under the other provisions of this Agreement.
Furthermore, no Purchaser shall have any rights as a third-party beneficiary or
otherwise under any of the provisions hereof in respect of a Purchaser Agent
which is not the Purchaser Agent for such Purchaser.

 

(d)           In performing its functions and duties hereunder, the
Administrator shall act solely as the agent of the Purchasers and the Purchaser
Agents and does not assume nor shall be deemed to have assumed any obligation or
relationship of trust or agency with or for the Seller or Servicer or any of
their successors and assigns. In performing its functions and duties hereunder,
each Purchaser Agent shall act solely as the agent of its respective Purchaser
and does not assume nor shall be deemed to have assumed any obligation or
relationship of trust or agency with or for the Seller, the Servicer, any other
Purchaser, any other Purchaser Agent or the Administrator, or any of their
respective successors and assigns.

 

Section 5.2            Delegation of Duties.  The Administrator may execute any
of its duties through agents or attorneys-in-fact and shall be entitled to
advice of counsel concerning all

 

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matters pertaining to such duties.  The Administrator shall not be responsible
for the negligence or misconduct of any agents or attorneys-in-fact selected by
it with reasonable care.

 

Section 5.3            Exculpatory Provisions.  None of the Purchaser Agents,
the Administrator or any of their respective directors, officers, agents or
employees shall be liable for any action taken or omitted (i) with the consent
or at the direction of the Majority Purchaser Agents (or in the case of any
Purchaser Agent, the Purchasers within its Purchaser Group that have a majority
of the aggregate Commitments of such Purchaser Group) or (ii) in the absence of
such Person’s gross negligence or willful misconduct.  The Administrator shall
not be responsible to any Purchaser, Purchaser Agent or other Person for (i) any
recitals, representations, warranties or other statements made by the Seller,
the Servicer, any Originator or any of their Affiliates, (ii) the value,
validity, effectiveness, genuineness, enforceability or sufficiency of any
Transaction Document, (iii) any failure of the Seller, the Servicer, any
Originator or any of their Affiliates to perform any obligation hereunder or
under the other Transaction Documents to which it is a party (or under any
Contract), or (iv) the satisfaction of any condition specified in Exhibit II. 
The Administrator shall not have any obligation to any Purchaser or Purchaser
Agent to ascertain or inquire about the observance or performance of any
agreement contained in any Transaction Document or to inspect the properties,
books or records of the Seller, the Servicer, any Originator or any of their
respective Affiliates.

 

Section 5.4            Reliance by Agents.  (a)  Each Purchaser Agent and the
Administrator shall in all cases be entitled to rely, and shall be fully
protected in relying, upon any document or other writing or conversation
believed by it to be genuine and correct and to have been signed, sent or made
by the proper Person and upon advice and statements of legal counsel (including
counsel to the Seller), independent accountants and other experts selected by
the Administrator.  Each Purchaser Agent and the Administrator shall in all
cases be fully justified in failing or refusing to take any action under any
Transaction Document unless it shall first receive such advice or concurrence of
the Majority Purchaser Agents (or in the case of any Purchaser Agent, the
Purchasers within its Purchaser Group that have a majority of the aggregate
Commitment of such Purchaser Group), and assurance of its indemnification, as it
deems appropriate.

 

(b)           The Administrator shall in all cases be fully protected in acting,
or in refraining from acting, under this Agreement in accordance with a request
of the Majority Purchaser Agents or the Purchaser Agents, and such request and
any action taken or failure to act pursuant thereto shall be binding upon all
Purchasers, the Administrator and Purchaser Agents.

 

(c)           The Purchasers within each Purchaser Group with a majority of the
Commitments of such Purchaser Group shall be entitled to request or direct the
related Purchaser Agent to take action, or refrain from taking action, under
this Agreement on behalf of such Purchasers. Such Purchaser Agent shall in all
cases be fully protected in acting, or in refraining from acting, under this
Agreement in accordance with a request of such Majority Purchaser Agents, and
such request and any action taken or failure to act pursuant thereto shall be
binding upon all of such Purchaser Agent’s Purchasers.

 

(d)           Unless otherwise advised in writing by a Purchaser Agent or by any
Purchaser on whose behalf such Purchaser Agent is purportedly acting, each party
to this Agreement may assume that (i) such Purchaser Agent is acting for the
benefit of each of the Purchasers in respect

 

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of which such Purchaser Agent is identified as being the “Purchaser Agent” in
the definition of “Purchaser Agent” hereto, as well as for the benefit of each
assignee or other transferee from any such Person, and (ii) each action taken by
such Purchaser Agent has been duly authorized and approved by all necessary
action on the part of the Purchasers on whose behalf it is purportedly acting.
Each Purchaser Agent and its Purchaser(s) shall agree amongst themselves as to
the circumstances and procedures for removal, resignation and replacement of
such Purchaser Agent.

 

Section 5.5            Notice of Termination Events.  Neither any Purchaser
Agent nor the Administrator shall be deemed to have knowledge or notice of the
occurrence of any Termination Event or Unmatured Termination Event unless the
Administrator and the Purchaser Agents have received notice from any Purchaser,
the Servicer or the Seller stating that a Termination Event or an Unmatured
Termination Event has occurred hereunder and describing such Termination Event
or Unmatured Termination Event.  In the event that the Administrator receives
such a notice, it shall promptly give notice thereof to each Purchaser Agent
whereupon each such Purchaser Agent shall promptly give notice thereof to its
related Purchasers.  In the event that a Purchaser Agent receives such a notice
(other than from the Administrator), it shall promptly give notice thereof to
the Administrator.  The Administrator shall take such action concerning a
Termination Event or an Unmatured Termination Event as may be directed by the
Majority Purchaser Agents (unless such action otherwise requires the consent of
all Purchasers or the LC Bank), but until the Administrator receives such
directions, the Administrator may (but shall not be obligated to) take such
action, or refrain from taking such action, as the Administrator deems advisable
and in the best interests of the Purchasers and the Purchaser Agents.

 

Section 5.6            Non-Reliance on Administrator, Purchaser Agents and Other
Purchasers.  Each Purchaser expressly acknowledges that none of the
Administrator, the Purchaser Agents nor any of their respective officers,
directors, employees, agents, attorneys-in-fact or Affiliates has made any
representations or warranties to it and that no act by the Administrator, or any
Purchaser Agent hereafter taken, including any review of the affairs of the
Seller, Cloud Peak, the Servicer or any Originator, shall be deemed to
constitute any representation or warranty by the Administrator or such Purchaser
Agent, as applicable.  Each Purchaser represents and warrants to the
Administrator and the Purchaser Agents that, independently and without reliance
upon the Administrator, Purchaser Agents, the LC Bank or any other Purchaser and
based on such documents and information as it has deemed appropriate, it has
made and will continue to make its own appraisal of and investigation into the
business, operations, property, prospects, financial and other conditions and
creditworthiness of the Seller, Cloud Peak, the Servicer or any Originator, and
the Receivables and its own decision to enter into this Agreement and to take,
or omit, action under any Transaction Document.  Except for items specifically
required to be delivered hereunder, the Administrator shall not have any duty or
responsibility to provide any Purchaser Agent with any information concerning
the Seller, Cloud Peak, the Servicer or any Originator or any of their
Affiliates that comes into the possession of the Administrator or any of its
officers, directors, employees, agents, attorneys-in-fact or Affiliates.

 

Section 5.7            Administrator, Purchasers, Purchaser Agents and
Affiliates.  Each of the Administrator, the Purchasers and the Purchaser Agents
and any of their respective Affiliates may extend credit to, accept deposits
from and generally engage in any kind of banking, trust,

 

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debt, equity or other business with the Seller, Cloud Peak, the Servicer or any
Originator or any of their Affiliates.  With respect to the acquisition of the
Eligible Receivables pursuant to this Agreement, each of the Purchaser Agents
and the Administrator shall have the same rights and powers under this Agreement
as any Purchaser and may exercise the same as though it were not such an agent,
and the terms “Purchaser” and “Purchasers” shall include, to the extent
applicable, each of the Purchaser Agents and the Administrator in their
individual capacities.

 

Section 5.8            Indemnification.  Each LC Participant and Related
Committed Purchaser shall indemnify and hold harmless the Administrator (but
solely in its capacity as Administrator) and its respective officers, directors,
employees, representatives and agents and the LC Bank (to the extent not
reimbursed by the Seller, the Servicer or any Originator and without limiting
the obligation of the Seller, the Servicer or any Originator to do so), ratably
(based on its Commitment) from and against any and all liabilities, obligations,
losses, damages, penalties, judgments, settlements, costs, expenses and
disbursements of any kind whatsoever (including in connection with any
investigative or threatened proceeding, whether or not the Administrator, the LC
Bank or such Person shall be designated a party thereto) that may at any time be
imposed on, incurred by or asserted against the Administrator, the LC Bank or
such Person as a result of, or related to, any of the transactions contemplated
by the Transaction Documents or the execution, delivery or performance of the
Transaction Documents or any other document furnished in connection therewith;
provided, however, that no LC Participant or Related Committed Purchaser shall
be liable for any such liabilities, obligations, losses, damages, penalties,
judgments, settlements, costs, expenses or disbursements resulting solely from
the Administrator’s or the LC Bank’s gross negligence or willful misconduct of
the Administrator or such Person as determined by final non-appealable judgment
of a court of competent jurisdiction).  Without limiting the generality of the
foregoing, each LC Participant agrees to reimburse the Administrator and the LC
Bank, ratably according to their Pro Rata Shares, promptly upon demand, for any
out-of-pocket expenses (including reasonable counsel fees) incurred by the
Administrator or the LC Bank in connection with the administration,
modification, amendment or enforcement (whether through negotiations, legal
proceedings or otherwise) of, or legal advice in respect of its rights or
responsibilities under, this Agreement.

 

Section 5.9            Successor Administrator.  The Administrator may, upon at
least thirty (30) days’ prior written notice to the Seller, each Purchaser and
Purchaser Agent, resign as Administrator.  Such resignation shall not become
effective until (x) a successor Administrator is appointed by the Majority
Purchaser Agents and the LC Bank and has accepted such appointment and (y) so
long as no Termination Event or Unmatured Termination Event has occurred and is
continuing, the Seller and the Servicer shall have consented to such successor
Administrator (such consent not to be unreasonably withheld or delayed).  Upon
such acceptance of its appointment as Administrator hereunder by a successor
Administrator, such successor Administrator shall succeed to and become vested
with all the rights and duties of the retiring Administrator, and the retiring
Administrator shall be discharged from its duties and obligations under the
Transaction Documents.  After any retiring Administrator’s resignation
hereunder, the provisions of Sections 3.1 and 3.2 and this Article V shall inure
to its benefit as to any actions taken or omitted to be taken by it while it was
the Administrator.

 

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ARTICLE VI

 

MISCELLANEOUS

 

Section 6.1            Amendments, Etc.  No amendment or waiver of any provision
of this Agreement or any other Transaction Document, or consent to any departure
by the Seller or the Servicer therefrom, shall be effective unless in a writing
signed by the Administrator, the Majority Purchaser Agents and the LC Bank and,
in the case of an amendment, by the other parties thereto; provided, however,
that no such amendment or waiver shall, (a) without the consent of each affected
Purchaser, (i) extend the date of any payment or deposit of Collections by the
Seller or the Servicer or decrease the outstanding amount of or rate of Discount
or extend the repayment of or any scheduled payment date for the payment of any
Discount in respect of any Portion of Capital or any fees owed to a Purchaser;
(ii) reduce any fees payable pursuant to the applicable Fee Letter,
(iii) forgive or waive or otherwise excuse any repayment of Capital or change
either the amount of Capital of any Purchaser or any Purchaser’s pro rata share
of the Purchased Interest; (iv) amend or modify the Pro Rata Share of any LC
Participant; (v) increase the Commitment of any Purchaser; (vi) amend or modify
the provisions of this Section 6.1 or the definition of “Capital”, “Eligible
Foreign Obligor”, “Eligible Receivables”, “Facility Termination Date” (other
than pursuant to an extension thereof in accordance with Section 1.13 hereof),
“Level I Minimum Liquidity Period”, “Level II Minimum Liquidity Period”,
“Majority Purchaser Agents”, “Net Receivables Pool Balance”, “Purchased
Interest”, “Termination Day” or “Total Reserves”, (vii) release all or
substantially all of the Pool Assets from the security interest granted by the
Seller to the Administrator hereunder or (viii) amend or modify any defined term
(or any term used directly or indirectly in such defined term) used in clauses
(i) through (vi) above in a manner that would circumvent the intention of the
restrictions set forth in such clauses and (b) without the consent of the
Majority Purchaser Agents amend, waive or modify any provision expressly
requiring the consent of the Majority Purchaser Agents.  Each such amendment,
waiver or consent shall be effective only in the specific instance and for the
specific purpose for which it was given.  No failure on the part of any
Purchaser Agent, any Purchaser or the Administrator to exercise, and no delay in
exercising any right hereunder shall operate as a waiver thereof, nor shall any
single or partial exercise of any right hereunder preclude any other or further
exercise thereof or the exercise of any other right.

 

Section 6.2            Notices, Etc.  All notices and other communications
provided for hereunder shall, unless otherwise stated herein, be in writing
(including facsimile and email communications) and shall be personally delivered
or sent by facsimile or email, or by overnight mail, to the intended party at
the mailing or email address or facsimile number of such party set forth on
Schedule V hereto (or in any other document or agreement pursuant to which it is
or became a party hereto), or at such other address or facsimile number as shall
be designated by such party in a written notice to the other parties hereto. 
All such notices and communications shall be effective (i) if delivered by
overnight mail, when received, and (ii) if transmitted by facsimile or email,
when sent, receipt confirmed by telephone or electronic means.

 

Section 6.3            Successors and Assigns; Participations; Assignments.

 

(a)           Successors and Assigns.  Whenever in this Agreement any of the
parties hereto is referred to, such reference shall be deemed to include the
successors and assigns of such party;

 

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all covenants, promises and agreements by or on behalf of any parties hereto
that are contained in this Agreement shall bind and inure to the benefit of the
parties hereto and their respective successors and assigns. Except as otherwise
provided in Section 4.1(d), neither the Seller nor the Servicer may assign or
transfer any of its rights or delegate any of its duties hereunder or under any
Transaction Document without the prior written consent of the Administrator,
each Purchaser Agent and the LC Bank.

 

(b)           Participations.  Except as otherwise specifically provided herein,
any Purchaser may sell to one or more Persons (each a “Participant”)
participating interests in the interests of such Purchaser hereunder; provided,
that no Purchaser shall grant any participation under which the Participant
shall have rights to approve any amendment to or waiver of this Agreement or any
other Transaction Document.  Such Purchaser shall remain solely responsible for
performing its obligations hereunder, and the Seller, the Servicer, each
Purchaser Agent and the Administrator shall continue to deal solely and directly
with such Purchaser in connection with such Purchaser’s rights and obligations
hereunder.  A Purchaser shall not agree with a Participant to restrict such
Purchaser’s right to agree to any amendment hereto, except amendments that
require the consent of all Purchasers.  Any such Participant shall not have any
rights hereunder or under the Transaction Documents.  Each Committed Purchaser
that sells a participation shall, acting solely for this purpose as an agent of
the Seller, maintain a register on which it enters the name and address of each
Participant and the principal amounts (and stated interest) of each
Participant’s interest in the Capital or other obligations under this Agreement
(the “Participant Register”); provided that no Committed Purchaser shall have
any obligation to disclose all or any portion of the Participant Register
(including the identity of any Participant or any information relating to a
Participant’s interest in any Commitments, Capital, Letters of Credit or its
other obligations under any this Agreement) to any Person except to the extent
that such disclosure is necessary to establish that such Commitment, Capital,
Letter of Credit or other obligation is in registered form under
Section 5f.103-1(c) of the United States Treasury Regulations.  The entries in
the Participant Register shall be conclusive absent manifest error, and such
Committed Purchaser shall treat each Person whose name is recorded in the
Participant Register as the owner of such participation for all purposes of this
Agreement notwithstanding any notice to the contrary.  For the avoidance of
doubt, the Administrator (in its capacity as Administrator) shall have no
responsibility for maintaining a Participant Register.

 

(c)           Assignments by Certain Related Committed Purchasers.  Any Related
Committed Purchaser may assign to one or more Persons (each a “Purchasing
Related Committed Purchaser”), reasonably acceptable to each of the
Administrator, the LC Bank and the related Purchaser Agent in each such Person’s
sole discretion, any portion of its Commitment pursuant to a supplement hereto,
substantially in the form of Annex D with any changes as have been approved by
the parties thereto (each, a “Transfer Supplement”), executed by each such
Purchasing Related Committed Purchaser, such selling Related Committed
Purchaser, such related Purchaser Agent and the Administrator and with the
consent of the Seller (provided, that the consent of the Seller shall not be
unreasonably withheld or delayed and that no such consent shall be required if a
Termination Event or Unmatured Termination Event has occurred and is continuing;
provided, further, that no consent of the Seller shall be required if the
assignment is made by any Related Committed Purchaser to the Administrator, to
any other Related Committed Purchaser, to any Affiliate of the Administrator or
any Related Committed Purchaser, to any Program Support Provider or any Person
which (i) is in the business of issuing

 

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commercial paper notes and (ii) is associated with or administered by the
Administrator or such Related Committed Purchaser or any Affiliate of the
Administrator or such Related Committed Purchaser).  Any such assignment by
Related Committed Purchaser cannot be for an amount less than $10,000,000.  Upon
(i) the execution of the Transfer Supplement, (ii) delivery of an executed copy
thereof to the Seller, the Servicer, such related Purchaser Agent and the
Administrator and (iii) payment by the Purchasing Related Committed Purchaser to
the selling Related Committed Purchaser of the agreed purchase price, if any,
such selling Related Committed Purchaser shall be released from its obligations
hereunder to the extent of such assignment and such Purchasing Related Committed
Purchaser shall for all purposes be a Related Committed Purchaser party hereto
and shall have all the rights and obligations of a Related Committed Purchaser
hereunder to the same extent as if it were an original party hereto.  The amount
of the Commitment of the selling Related Committed Purchaser allocable to such
Purchasing Related Committed Purchaser shall be equal to the amount of the
Commitment of the selling Related Committed Purchaser transferred regardless of
the purchase price, if any, paid therefor.  The Transfer Supplement shall be an
amendment hereof only to the extent necessary to reflect the addition of such
Purchasing Related Committed Purchaser as a “Related Committed Purchaser” and a
related “LC Participant” and any resulting adjustment of the selling Related
Committed Purchaser’s Commitment and, if applicable, selling related LC
Participant’s Pro Rata Share of the LC Participation Amount.

 

(d)           Assignments to Liquidity Providers and other Program Support
Providers.  Any Conduit Purchaser may at any time grant to one or more of its
Liquidity Providers or other Program Support Providers, participating interests
in its portion of the Purchased Interest.  In the event of any such grant by
such Conduit Purchaser of a participating interest to a Liquidity Provider or
other Program Support Provider, such Conduit Purchaser shall remain responsible
for the performance of its obligations hereunder.  The Seller agrees that each
Liquidity Provider and Program Support Provider of any Conduit Purchaser
hereunder shall be entitled to the benefits of Sections 1.7 and 1.8.

 

(e)           Other Assignment by Conduit Purchasers.  Each party hereto agrees
and consents (i) to any Conduit Purchaser’s assignment, participation, grant of
security interests in or other transfers of any portion of, or any of its
beneficial interest in, the Purchased Interest (or portion thereof), including
without limitation to any collateral agent in connection with its commercial
paper program and (ii) to the complete assignment by any Conduit Purchaser of
all of its rights and obligations hereunder to any other Person, and upon such
assignment such Conduit Purchaser shall be released from all obligations and
duties, if any, hereunder; provided, that such Conduit Purchaser may not,
without the prior consent of its Related Committed Purchasers, make any such
transfer of its rights hereunder unless the assignee (x) is a commercial paper
conduit that (i) is principally engaged in the purchase of assets similar to the
assets being purchased hereunder, (ii) has as its Purchaser Agent the Purchaser
Agent of the assigning Conduit Purchaser and (iii) issues commercial paper or
other Notes with credit ratings substantially comparable to the ratings of the
assigning Conduit Purchaser or (y) is a Related Committed Purchaser or Liquidity
Provider for such Conduit Purchaser.  Any assigning Conduit Purchaser shall
deliver to any assignee a Transfer Supplement with any changes as have been
approved by the parties thereto, duly executed by such Conduit Purchaser,
assigning any portion of its interest in the Purchased Interest to its
assignee.  Such Conduit Purchaser shall promptly (i) notify each of the other
parties hereto of such assignment and (ii) take all further action that the

 

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assignee reasonably requests in order to evidence the assignee’s right, title
and interest in such interest in the Purchased Interest and to enable the
assignee to exercise or enforce any rights of such Conduit Purchaser hereunder. 
Upon the assignment of any portion of its interest in the Purchased Interest,
the assignee shall have all of the rights hereunder with respect to such
interest (except that the Discount therefor shall thereafter accrue at the rate,
determined with respect to the assigning Conduit Purchaser unless the Seller,
the related Purchaser Agent and the assignee shall have agreed upon a different
Discount).

 

(f)            Certain Pledges.  Without limiting the right of any Purchaser to
sell or grant interests, security interests or participations to any Person as
otherwise described in this Section 6.3, any Purchaser may at any time pledge or
assign a security interest in all or any portion of its rights under this
Agreement to secure its obligations as a Purchaser hereunder, including any
pledge or assignment to secure obligations to a Federal Reserve Bank;  provided
that no such pledge or assignment shall release such Purchaser from any of its
obligations hereunder or substitute any such pledgee or assignee for such
Purchaser as a party hereto.

 

Section 6.4            Costs, Expenses and Taxes.  (a)  Without limiting any of
the Seller’s other obligations hereunder or under any other Transaction Document
(including, without limitation, its obligations under Sections 1.5, 1.7, 1.8,
1.10 and 3.1 of this Agreement and under Section 1(e) of Exhibit IV of this
Agreement), the Seller shall pay to the Administrator, each Purchaser Agent and
each Purchaser on demand all costs and expenses in connection with (i) the
preparation, execution, delivery and administration of this Agreement or the
other Transaction Documents and the other documents and agreements to be
delivered hereunder and thereunder (and all reasonable costs and expenses in
connection with any amendment, waiver or modification of any thereof), (ii) the
sale of the Purchased Interest (or any portion thereof), (iii) the perfection
(and continuation) of the Administrator’s rights in the Receivables, Collections
and other Pool Assets, (iv) the enforcement by the Administrator, any Purchaser
Agent or any member of any Purchaser Group of the obligations of the Seller, the
Servicer or any Originator under the Transaction Documents or of any Obligor
under a Receivable and (v) the maintenance by the Administrator of the Lock-Box
Accounts (and any related lock-box or post office box), including Attorney Costs
for the Administrator, the Purchaser Agents and the Purchasers relating to any
of the foregoing or to advising the Administrator or any member of any Purchaser
Group (including, any related Liquidity Provider or any other related Program
Support Provider) about its rights and remedies under any Transaction Document
or any other document, agreement or instrument related thereto and all costs and
expenses (including Attorney Costs) of the Administrator, any Purchaser Agent
and any Purchaser in connection with the enforcement or administration of the
Transaction Documents or any other document, agreement or instrument related
thereto.  The Administrator and each member of a Purchaser Group agree, however,
that unless a Termination Event has occurred and is continuing, all such
entities will be represented by a single law firm.  The Seller shall, subject to
the provisos in clause (e) of each of Sections 1 and 2 of Exhibit IV, reimburse
the Administrator, each Purchaser Agent and each Purchaser for the cost of such
Person’s auditors (which may be employees of such Person) auditing the books,
records and procedures of the Seller or the Servicer.

 

(b)           In addition, the Seller shall pay on demand any and all stamp,
franchise and other taxes and fees payable in connection with the execution,
delivery, filing and recording of this Agreement or the other documents or
agreements to be delivered hereunder, and agrees to save

 

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each Indemnified Party and Affected Person harmless from and against any
liabilities with respect to or resulting from any delay in paying or omission to
pay such taxes and fees.

 

Section 6.5                                    No Proceedings; Limitation on
Payments.  (a)  Each of the Seller, Cloud Peak, the Servicer, the Administrator,
the Purchaser Agents, the Purchasers, the LC Bank, each assignee of the
Purchased Interest or any interest therein, and each Person that enters into a
commitment to purchase the Purchased Interest or interests therein, hereby
covenants and agrees that it will not institute against, or join any other
Person in instituting against, any Conduit Purchaser any bankruptcy,
reorganization, arrangement, insolvency or liquidation proceeding, or other
proceeding under any federal or state bankruptcy or similar law, for one year
and one day after the latest maturing Note issued by such Conduit Purchaser is
paid in full.

 

(b)                                 Each party hereto agrees that it will not
institute against, or join any Person in instituting against, the Seller any
bankruptcy, reorganization, arrangement, insolvency or liquidation proceeding,
or any other proceeding under any federal or state bankruptcy or similar law,
for one year and one day after the Final Payout Date; provided that the
Administrator may take any such action with the prior written consent of the
Majority Purchaser Agents and the LC Bank.

 

(c)                                  Notwithstanding any provisions contained in
this Agreement to the contrary, no Conduit Purchaser shall or shall be obligated
to, pay any amount, if any, payable by it pursuant to this Agreement or any
other Transaction Document unless (i) such Conduit Purchaser has received funds
which may be used to make such payment and which funds are not required to repay
the Notes when due and (ii) after giving effect to such payment, either (x) such
Conduit Purchaser could issue Notes to refinance all outstanding Notes (assuming
such outstanding Notes matured at such time) in accordance with the program
documents governing such Conduit Purchaser’s securitization program or (y) all
Notes are paid in full.  Any amount which such Conduit Purchaser does not pay
pursuant to the operation of the preceding sentence shall not constitute a claim
(as defined in §101 of the Bankruptcy Code) against or company obligation of
such Conduit Purchaser for any such insufficiency unless and until such Conduit
Purchaser satisfies the provisions of clauses (i) and (ii) above.

 

(d)                                 The provisions of this Section 6.5 shall
survive any termination of this Agreement.

 

Section 6.6                                    GOVERNING LAW AND JURISDICTION.

 

(a)                                 THIS AGREEMENT SHALL BE DEEMED TO BE A
CONTRACT MADE UNDER AND GOVERNED BY THE INTERNAL LAWS OF THE STATE OF NEW YORK
WITHOUT REGARD TO ANY OTHERWISE APPLICABLE CONFLICTS OF LAW PRINCIPLES (OTHER
THAN SECTIONS 5-1401 AND 5-1402 OF THE GENERAL OBLIGATIONS LAW OF THE STATE OF
NEW YORK) EXCEPT TO THE EXTENT THAT THE VALIDITY OR PERFECTION OF A SECURITY
INTEREST OR REMEDIES HEREUNDER, IN RESPECT OF ANY PARTICULAR COLLATERAL ARE
GOVERNED BY THE LAWS OF A JURISDICTION OTHER THAN THE STATE OF NEW YORK.

 

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(b)                                 ANY LEGAL ACTION OR PROCEEDING WITH RESPECT
TO THIS AGREEMENT MAY BE BROUGHT IN THE COURTS OF THE STATE OF NEW YORK OR OF
THE UNITED STATES FOR THE SOUTHERN DISTRICT OF NEW YORK; AND, BY EXECUTION AND
DELIVERY OF THIS AGREEMENT, EACH OF THE PARTIES HERETO CONSENTS, FOR ITSELF AND
IN RESPECT OF ITS PROPERTY, TO THE NON-EXCLUSIVE JURISDICTION OF THOSE COURTS. 
EACH OF THE PARTIES HERETO IRREVOCABLY WAIVES, TO THE MAXIMUM EXTENT PERMITTED
BY LAW, ANY OBJECTION, INCLUDING ANY OBJECTION TO THE LAYING OF VENUE OR BASED
ON THE GROUNDS OF FORUM NON CONVENIENS, THAT IT MAY NOW OR HEREAFTER HAVE TO THE
BRINGING OF ANY ACTION OR PROCEEDING IN SUCH JURISDICTION IN RESPECT OF THIS
AGREEMENT OR ANY DOCUMENT RELATED HERETO. EACH OF THE PARTIES HERETO WAIVES
PERSONAL SERVICE OF ANY SUMMONS, COMPLAINT OR OTHER PROCESS, WHICH SERVICE
MAY BE MADE BY ANY OTHER MEANS PERMITTED BY NEW YORK LAW.

 

Section 6.7                                    Confidentiality.  Unless
otherwise required by applicable law, each of the Seller and the Servicer agrees
to maintain the confidentiality of this Agreement and the other Transaction
Documents (and all drafts thereof) in communications with third parties and
otherwise; provided, that this Agreement may be disclosed (a) to third parties
to the extent such disclosure is made pursuant to a written agreement of
confidentiality in form and substance reasonably satisfactory to the
Administrator and each Purchaser Agent and (b) to the Seller’s and Servicer’s
legal counsel and auditors if they agree to hold it confidential.  Unless
otherwise required by applicable law, rules or regulations, the Administrator,
the Purchaser Agents and the Purchasers agree to maintain the confidentiality of
non-public financial information regarding the Seller, the Servicer and any
Originator; provided, that such information may be disclosed (i) to third
parties to the extent such disclosure is made pursuant to a written agreement of
confidentiality in form and substance reasonably satisfactory to the Servicer,
(ii) to legal counsel and auditors of the Purchasers, the Purchaser Agents or
the Administrator if they agree to hold it confidential, (iii) to any nationally
recognized statistical rating organization, (iv) to any Program Support Provider
or potential Program Support Provider (if they agree to hold it confidential),
(v) to any placement agency placing the Notes, and (vi) to any regulatory
authorities having jurisdiction over the Administrator, the Purchaser Agents,
any Purchaser, any Program Support Provider or any Liquidity Provider.

 

Section 6.8                                    Execution in Counterparts.  This
Agreement may be executed in any number of counterparts, each of which, when so
executed, shall be deemed to be an original, and all of which, when taken
together, shall constitute one and the same agreement.

 

Section 6.9                                    Survival of Termination.  The
provisions of Sections 1.7, 1.8, 1.9, 1.10, 1.22, 1.23, 3.1, 3.2, 6.4, 6.5, 6.6,
6.7, 6.10 and 6.15 shall survive any termination of this Agreement.

 

Section 6.10                             WAIVER OF JURY TRIAL.  EACH OF THE
PARTIES HERETO WAIVES ITS RESPECTIVE RIGHTS TO A TRIAL BY JURY OF ANY CLAIM OR
CAUSE OF ACTION BASED UPON OR ARISING OUT OF OR RELATED TO THIS AGREEMENT OR THE
TRANSACTIONS CONTEMPLATED HEREBY IN ANY ACTION, PROCEEDING OR OTHER LITIGATION
OF ANY TYPE BROUGHT BY ANY OF THE PARTIES

 

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AGAINST ANY OTHER PARTY OR PARTIES, WHETHER WITH RESPECT TO CONTRACT CLAIMS,
TORT CLAIMS OR OTHERWISE.  EACH OF THE PARTIES HERETO AGREES THAT ANY SUCH CLAIM
OR CAUSE OF ACTION SHALL BE TRIED BY A COURT TRIAL WITHOUT A JURY. WITHOUT
LIMITING THE FOREGOING, EACH OF THE PARTIES HERETO FURTHER AGREES THAT ITS
RESPECTIVE RIGHT TO A TRIAL BY JURY IS WAIVED BY OPERATION OF THIS SECTION AS TO
ANY ACTION, COUNTERCLAIM OR OTHER PROCEEDING THAT SEEKS, IN WHOLE OR IN PART, TO
CHALLENGE THE VALIDITY OR ENFORCEABILITY OF THIS AGREEMENT OR ANY PROVISION
HEREOF. THIS WAIVER SHALL APPLY TO ANY SUBSEQUENT AMENDMENTS, RENEWALS,
SUPPLEMENTS OR MODIFICATIONS TO THIS AGREEMENT.

 

Section 6.11                             Sharing of Recoveries.  Each Purchaser
agrees that if it receives any recovery, through set-off, judicial action or
otherwise, on any amount payable or recoverable hereunder in a greater
proportion than should have been received hereunder or otherwise inconsistent
with the provisions hereof, then the recipient of such recovery shall purchase
for cash an interest in amounts owing to the other Purchasers (as return of
Capital or otherwise), without representation or warranty except for the
representation and warranty that such interest is being sold by each such other
Purchaser free and clear of any Adverse Claim created or granted by such other
Purchaser, in the amount necessary to create proportional participation by the
Purchaser in such recovery.  If all or any portion of such amount is thereafter
recovered from the recipient, such purchase shall be rescinded and the purchase
price restored to the extent of such recovery, but without interest.

 

Section 6.12                             Right of Setoff.  Each Purchaser is
hereby authorized (in addition to any other rights it may have) to setoff,
appropriate and apply (without presentment, demand, protest or other notice
which are hereby expressly waived) any deposits and any other indebtedness held
or owing by such Purchaser (including by any branches or agencies of such
Purchaser) to, or for the account of, the Seller against amounts owing by the
Seller hereunder (even if contingent or unmatured).

 

Section 6.13                             Entire Agreement.  This Agreement and
the other Transaction Documents embody the entire agreement and understanding
between the parties hereto, and supersede all prior or contemporaneous
agreements and understandings of such Persons, verbal or written, relating to
the subject matter hereof and thereof.

 

Section 6.14                             Headings.  The captions and headings of
this Agreement and any Exhibit, Schedule or Annex hereto are for convenience of
reference only and shall not affect the interpretation hereof or thereof.

 

Section 6.15                             Purchaser Groups’ Liabilities.  The
obligations of each Purchaser Agent and each Purchaser under the Transaction
Documents are solely the corporate obligations of such Person. Except with
respect to any claim arising out of the willful misconduct or gross negligence
of the Administrator, any Purchaser Agent or any Purchaser, no claim may be made
by the Seller or the Servicer or any other Person against the Administrator, any
Purchaser Agent or any Purchaser or their respective Affiliates, directors,
officers, employees, attorneys or agents for any special, indirect,
consequential or punitive damages in respect of any claim for breach of

 

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contract or any other theory of liability arising out of or related to the
transactions contemplated by this Agreement or any other Transaction Document,
or any act, omission or event occurring in connection therewith; and each of
Seller and Servicer hereby waives, releases, and agrees not to sue upon any
claim for any such damages, whether or not accrued and whether or not known or
suspected to exist in its favor.

 

Section 6.16                             USA Patriot Act.  Each of the
Administrator and each of the Purchasers hereby notifies the Seller and the
Servicer that pursuant to the requirements of the USA PATRIOT Act, Title III of
Pub. L. 107-56 (signed into law October 26, 2001) (the “PATRIOT Act”), the
Administrator and the Purchasers may be required to obtain, verify and record
information that identifies the Seller, the Servicer and the Performance
Guarantor, which information includes the name, address, tax identification
number and other information regarding the Seller, the Servicer and the
Performance Guarantor that will allow the Administrator and the Purchasers to
identify the Seller, the Servicer and the Performance Guarantor in accordance
with the PATRIOT Act. This notice is given in accordance with the requirements
of the PATRIOT Act.  Each of the Seller and the Servicer agrees to provide the
Administrator and the Purchasers, from time to time, with all documentation and
other information required by bank regulatory authorities under “know your
customer” and anti-money laundering rules and regulations, including, without
limitation, the PATRIOT Act.

 

[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]

 

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IN WITNESS WHEREOF, the parties have caused this Agreement to be executed by
their respective signatories thereunto duly authorized, as of the date first
above written.

 

THE SELLER:

 

 

 

CLOUD PEAK ENERGY RECEIVABLES LLC, as Seller

 

 

 

 

 

 

 

By:

/s/ Heath A. Hill

 

Name:

Heath A. Hill

 

Title:

Executive Vice President and Chief Financial Officer

 

Amended & Restated
Receivables Purchase Agreement
(Cloud Peak Energy Receivables LLC)

 

S-1

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THE SERVICER:

 

 

 

CLOUD PEAK ENERGY RESOURCES LLC, as Servicer

 

 

 

 

 

By:

/s/ Heath A. Hill

 

Name:

Heath A. Hill

 

Title:

Executive Vice President and Chief Financial Officer

 

Amended & Restated
Receivables Purchase Agreement
(Cloud Peak Energy Receivables LLC)

 

S-2

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PNC’S PURCHASER GROUP:

 

 

 

PNC BANK, NATIONAL ASSOCIATION, as the Related Committed Purchaser and as an LC
Participant

 

 

 

 

 

By:

/s/ Michael Brown

 

Name:

Michael Brown

 

Title:

Senior Vice President

 

 

 

PNC BANK, NATIONAL ASSOCIATION, as Purchaser Agent for its Purchaser Group

 

 

 

 

 

By:

/s/ Michael Brown

 

Name:

Michael Brown

 

Title:

Senior Vice President

 

 

 

PNC BANK, NATIONAL ASSOCIATION, as the LC Bank

 

 

 

 

 

By:

/s/ Michael Brown

 

Name:

Michael Brown

 

Title:

Senior Vice President

 

 

 

PNC BANK, NATIONAL ASSOCIATION, as Administrator

 

 

 

 

 

By:

/s/ Michael Brown

 

Name:

Michael Brown

 

Title:

Senior Vice President

 

Amended & Restated
Receivables Purchase Agreement
(Cloud Peak Energy Receivables LLC)

 

S-3

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EXHIBIT I

DEFINITIONS

 

As used in this Agreement (including its Exhibits, Schedules and Annexes), the
following terms shall have the following meanings (such meanings to be equally
applicable to both the singular and plural forms of the terms defined). Unless
otherwise indicated, all Section, Annex, Exhibit and Schedule references in this
Exhibit are to Sections of and Annexes, Exhibits and Schedules to this
Agreement.

 

“Adjusted LC Participation Amount” means, at any time, the greater of (i) LC
Participation Amount less the amount of cash collateral held in the LC
Collateral Account at such time and (ii) zero ($0).

 

“Administrator” has the meaning set forth in the preamble to this Agreement.

 

“Adverse Claim” means a lien, security interest or other charge or encumbrance,
or any other type of preferential arrangement; it being understood that any
thereof in favor of the Administrator (for the benefit of the Purchasers) or the
Seller as contemplated by the Purchase and Sale Agreement shall not constitute
an Adverse Claim.

 

“Affected Person” has the meaning set forth in Section 1.7 of this Agreement.

 

“Affiliate” means, as to any Person: (a) any Person that, directly or
indirectly, is in control of, is controlled by or is under common control with
such Person, or (b) who is a director or officer: (i) of such Person or (ii) of
any Person described in clause (a), except that, in the case of each Conduit
Purchaser, Affiliate shall mean the holder of its capital stock or membership
interest, as the case may be.  For purposes of this definition, control of a
Person shall mean the power, direct or indirect: (x) to vote 25% or more of the
securities having ordinary voting power for the election of directors of such
Person, or (y) to direct or cause the direction of the management and policies
of such Person, in either case whether by ownership of securities, contract,
proxy or otherwise.

 

“Aggregate Capital” means at any time the aggregate outstanding Capital of all
Purchasers at such time.

 

“Aggregate Discount” at any time, means the sum of the aggregate for each
Purchaser of the accrued and unpaid Discount with respect to each such
Purchaser’s Capital at such time.

 

“Agreement” has the meaning set forth in the preamble hereto.

 

“Alternate Rate” for any Settlement Period for any Capital (or portion thereof)
funded by any Purchaser other than through the issuance of Notes, means an
interest rate per annum equal to: (i) solely with respect to PNC, as a
Purchaser, (a) the daily average LMIR for such Settlement Period or (b) if LMIR
is unavailable pursuant to Section 1.11, the daily average Base Rate for such
Settlement Period or (ii) with respect to any Purchaser other than PNC, (a) the
Euro-Rate for such Settlement Period or (b) if the Euro-Rate is unavailable
pursuant to Section 1.11, the daily average Base Rate for such Settlement
Period; provided, however, that the “Alternate Rate”

 

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for any day while a Termination Event has occurred and is continuing shall be an
interest rate per annum equal to the sum of 2.00% per annum plus the greater of
(i) the Base Rate in effect on such day and (ii) the Euro-Rate at such time.

 

“Anti-Terrorism Laws” means any Applicable Law relating to terrorism, trade
sanctions programs and embargoes, import/export licensing, money laundering or
bribery, and any regulation, order, or directive promulgated, issued or enforced
pursuant to such Applicable Laws, all as amended, supplemented or replaced from
time to time.

 

“Applicable Law” means, with respect to any Person, (x) all provisions of law,
statute, treaty, constitution, ordinance, rule, regulation, ordinance,
requirement, restriction, permit, executive order, certificate, decision,
directive or order of any Governmental Authority applicable to such Person or
any of its property and (y) all judgments, injunctions, orders, writs, decrees
and awards of all courts and arbitrators in proceedings or actions in which such
Person is a party or by which any of its property is bound.

 

“Assumption Agreement” means an agreement substantially in the form set forth in
Annex C to this Agreement.

 

“Attorney Costs” means and includes all reasonable fees and disbursements of any
law firm or other external counsel.

 

“BLM” means the Bureau of Land Management.

 

“Bankruptcy Code” means the United States Bankruptcy Reform Act of 1978 (11
U.S.C. § 101, et seq.), as amended from time to time.

 

“Base Rate” means, with respect to any Purchaser, for any day, a fluctuating
interest rate per annum as shall be in effect from time to time, which rate
shall be at all times equal to the higher of:

 

(a)                                 the rate of interest in effect for such day
as publicly announced from time to time by the applicable Purchaser Agent or its
Affiliate as its “reference rate” or “prime rate”, as applicable.  Such
“reference rate” or “prime rate” is set by the applicable Purchaser Agent based
upon various factors, including such Person’s costs and desired return, general
economic  conditions and other factors, and is used as a reference point for
pricing some loans, which may be priced at, above or below such announced rate,
and is not necessarily the lowest rate charged to any customer; and

 

(b)                                 0.50% per annum above the latest Federal
Funds Rate.

 

“Benefit Plan” means any employee benefit pension plan as defined in
Section 3(2) of ERISA in respect of which the Seller, any Originator, Cloud Peak
or any ERISA Affiliate is, or at any time during the immediately preceding six
years was, an “employer” as defined in Section 3(5) of ERISA.

 

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“Business Day” means any day (other than a Saturday or Sunday) on which: 
(a) banks are not authorized or required to close in Broomfield, Colorado,
Gillette, Wyoming, Pittsburgh, Pennsylvania, or New York City, New York, and
(b) if this definition of “Business Day” is utilized in connection with the
Euro-Rate or LMIR, dealings are carried out in the London interbank market.

 

“Capital” means, with respect to any Purchaser, without duplication, the
aggregate amounts (i) paid to, or on behalf of, the Seller in connection with
all Funded Purchases made by such Purchaser pursuant to Section 1.2(b) of this
Agreement, (ii) paid by such Purchaser, as an LC Participant, to the LC Bank in
respect of a Participation Advance made by such Purchaser to LC Bank pursuant to
Section 1.18 and (iii) with respect to the Purchaser that is the LC Bank, paid
by the LC Bank with respect to all drawings under the Letter of Credit to the
extent such drawings have not been reimbursed by the Seller or funded by
Participation Advances, in each case, as reduced from time to time by
Collections distributed to such Purchaser (or its Purchaser Agent on its behalf)
and applied on account of such Capital pursuant to Section 1.4(d) of this
Agreement; provided, that if such Capital shall have been reduced by any
distribution and thereafter all or a portion of such distribution is rescinded
or must otherwise be returned for any reason, such Capital shall be increased by
the amount of such rescinded or returned distribution as though it had not been
made.

 

“Change in Control” means that any of the following has occurred:

 

(a)                                 Cloud Peak ceases to directly own 100% of
the membership interests and any other equity interests of the Seller free and
clear of all Adverse Claims;

 

(b)                                 Cloud Peak ceases to own, directly or
indirectly, 100% of the common stock, membership interests and any other equity
interests (as applicable) of each Originator;

 

(c)                                  any “person” or “group” (as such terms are
used for purposes of Sections 13(d) and 14(d) of the Securities Exchange Act of
1934, as amended), other than (in the case of Cloud Peak) the Parent, is or
becomes the “beneficial owner” (as such term is used in Rules 13d-3 under the
Securities Exchange Act of 1934, as amended), directly or indirectly, of more
than 49% of the total voting power of the Voting Stock of the Parent or Cloud
Peak; provided, that as used in this paragraph, (i) “Voting Stock” means with
respect to any Person, Capital Stock of any class or kind ordinarily having the
power to vote for the election of directors, managers or other voting members of
the governing body of such Person, and (ii) “Capital Stock” means (A) shares of
capital stock, partnership interests, membership interests in a limited
liability company, beneficial interest in a trust or other equity ownership
interests in a Person or (B) any warrants, options, or other rights to acquire
such shares or interests;

 

(d)                                 individuals who on the Initial Closing Date
constituted the board of directors of the Parent (or, from and after the time,
if any, at which Cloud Peak shall have a board of directors, individuals who, on
such date, constituted the board of directors of Cloud Peak), together with any
new directors whose election by the board of directors or whose  nomination for
election by the equity holders of the Parent or Cloud Peak, as applicable, was
approved by a majority of the directors then still in office who were either
directors or whose election or

 

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nomination for election was previously so approved, cease for any reason to
constitute a majority of the board of directors of the Parent or Cloud Peak, as
applicable, then in office; or

 

(e)                                  the  Parent ceases to be the managing
member of Cloud Peak.

 

“Change in Law” means the occurrence, after the Initial Closing Date, of any of
the following: (a) the adoption or taking effect of any law, rule, regulation or
treaty, (b) any change in any law, rule, regulation or treaty or in the
administration, interpretation, implementation or application thereof by any
Governmental Authority or (c) the making or issuance of any request, rule,
guideline or directive (whether or not having the force of law) by any
Governmental Authority; provided that notwithstanding anything herein to the
contrary, (x) the Dodd-Frank Wall Street Reform and Consumer Protection Act and
all requests, rules, guidelines or directives thereunder or issued in connection
therewith and (y) all requests, rules, guidelines or directives promulgated by
the Bank for International Settlements, the Basel Committee on Banking
Supervision (or any successor or similar authority) or the United States or
foreign regulatory authorities, in each case pursuant to Basel III, shall in
each case be deemed to be a “Change in Law”, regardless of the date enacted,
adopted or issued.

 

“Closing Date” means January 31, 2017.

 

“Cloud Peak” has the meaning set forth in the preamble to this Agreement.

 

“Cloud Peak Credit Agreement” means that certain Credit Agreement, dated as of
February 21, 2014 among Cloud Peak, as borrower, the “Guarantors,” “Lenders,”
and “Issuing Banks” from time to time party thereto, and PNC Bank, National
Association, as “Administrative Agent” and “Swingline Lender” thereunder, as
amended by First Amendment to Credit Agreement dated as of September 5, 2014 and
as the same may be further amended, restated, supplemented or otherwise modified
from time to time.

 

“Collections” means, with respect to any Pool Receivable: (a) all funds that are
received by any Originator, Cloud Peak, the Seller or the Servicer in payment of
any amounts owed in respect of such Receivable (including purchase price,
finance charges, interest and all other charges), or applied to amounts owed in
respect of such Receivable (including insurance payments and net proceeds of the
sale or other disposition of repossessed goods or other collateral or property
of the related Obligor or any other Person directly or indirectly liable for the
payment of such Pool Receivable and available to be applied thereon), (b) all
Deemed Collections and (c) all other proceeds of such Pool Receivable.

 

“Commitment” means, with respect to any Related Committed Purchaser or LC
Participant, as applicable, the maximum aggregate amount which such Purchaser is
obligated to pay hereunder on account of all Funded Purchases or Participation
Advances, as applicable, as set forth on Schedule VI or in the Assumption
Agreement or other agreement pursuant to which it became a Purchaser, as such
amount may be modified in connection with any subsequent assignment pursuant to
Section 6.3(c) or in connection with a change in the Purchase Limit pursuant to
Section 1.1(b).

 

“Commitment Percentage” means, for each Related Committed Purchaser or related
LC Participant in a Purchaser Group, the Commitment of such Related Committed
Purchaser or

 

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related LC Participant, as the case may be, divided by the total of all
Commitments of all Related Committed Purchasers or related LC Participants, as
the case may be, in such Purchaser Group.

 

“Concentration Percentage” means (a) except as provided in clause (b) below,
(i) for any Group A Obligor, 15.50%, (ii) for any Group B Obligor, 10.50%,
(iii) for any Group C Obligor, 5.50% and (iv) for any Group D Obligor, 4.00% and
(b) for the Salt River Project (the “Special Obligor”), 20.00% (the “Special
Concentration Limit”); provided, however, that the Administrator (with the prior
written consent of each Purchaser Agent) may approve higher “Concentration
Percentages” for selected Obligors; provided, further, that the Administrator
may, upon not less than five (5) Business Days’ notice to Seller, cancel or
reduce the Special Concentration Limit with respect to any or all Special
Obligor(s), in which case the Concentration Percentage for such Special
Obligor(s) shall be determined pursuant to clause (a) above.  In the event that
any other Obligor is or becomes an Affiliate of a Special Obligor, the Special
Concentration Limit shall apply to both such Obligor and such Special Obligor
and shall be calculated as if such Obligor and such Special Obligor were a
single Obligor.

 

“Concentration Reserve” means at any time, the product of (a) the Aggregate
Capital plus the Adjusted LC Participation Amount, multiplied by (b)(i) the
Concentration Reserve Percentage divided by (ii) 1 minus the Concentration
Reserve Percentage.

 

“Concentration Reserve Percentage” means, at any time, the largest of: (a) the
sum of the five (5) largest Obligor Percentages of the Group D Obligors, (b) the
sum of the three (3) largest Obligor Percentages of the Group C Obligors,
(c) the sum of the two (2) largest Obligor Percentages of the Group B Obligors
and (d) the largest Obligor Percentage of the Group A Obligors.

 

“Conduit Purchaser” means each commercial paper conduit that is a party to this
Agreement, as a purchaser, or that becomes a party to this Agreement, as a
purchaser pursuant to an Assumption Agreement or otherwise.

 

“Contract” means, with respect to any Receivable, any and all contracts,
instruments, agreements, leases, invoices, notes or other writings, in each case
related to the sale or delivery of coal or coal products, pursuant to which such
Receivable arises or that evidence such Receivable or under which an Obligor
becomes or is obligated to make payment in respect of such Receivable.

 

“Covered Entity” shall mean (a) each of Seller, the Servicer, each Originator,
the Performance Guarantor, the Parent and each of Cloud Peak’s Subsidiaries and
(b) each Person that, directly or indirectly, is in control of a Person
described in clause (a) above.  For purposes of this definition, control of a
Person shall mean the direct or indirect (x) ownership of, or power to vote, 25%
or more of the issued and outstanding equity interests having ordinary voting
power for the election of directors of such Person or other Persons performing
similar functions for such Person, or (y) power to direct or cause the direction
of the management and policies of such Person whether by ownership of equity
interests, contract or otherwise.

 

“CP Rate” means, for any Conduit Purchaser and for any Settlement Period for any
Portion of Capital (a) the per annum rate equivalent to the weighted average
cost (as determined

 

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by the applicable Purchaser Agent and which shall include commissions of
placement agents and dealers, incremental carrying costs incurred with respect
to Notes of such Person maturing on dates other than those on which
corresponding funds are received by such Conduit Purchaser, other borrowings by
such Conduit Purchaser (other than under any Program Support Agreement) and any
other costs associated with the issuance of Notes) of or related to the issuance
of Notes that are allocated, in whole or in part, by the applicable Conduit
Purchaser to fund or maintain such Portion of Capital (and which may be also
allocated in part to the funding of other assets of such Conduit Purchaser);
provided, however, that if any component of such rate is a discount rate, in
calculating the “CP Rate” for such Portion of Capital for such Settlement
Period, the applicable Purchaser Agent shall for such component use the rate
resulting from converting such discount rate to an interest bearing equivalent
rate per annum; provided, further, that notwithstanding anything in this
Agreement or the other Transaction Documents to the contrary, the Seller agrees
that any amounts payable to any Conduit Purchaser in respect of Discount for any
Settlement Period with respect to any Portion of Capital funded by such Conduit
Purchaser at the CP Rate shall include an amount equal to the portion of the
face amount of the outstanding Notes issued to fund or maintain such Portion of
Capital that corresponds to the portion of the proceeds of such Notes that was
used to pay the interest component of maturing Notes issued to fund or maintain
such Portion of Capital, to the extent that such Conduit Purchaser had not
received payments of interest in respect of such interest component prior to the
maturity date of such maturing Notes (for purposes of the foregoing, the
“interest component” of Notes equals the excess of the face amount thereof over
the net proceeds received by such Conduit Purchaser from the issuance of Notes,
except that if such Notes are issued on an interest-bearing basis its “interest
component” will equal the amount of interest accruing on such Notes through
maturity) or (b) any other rate designated as the “CP Rate” for such Conduit
Purchaser in an Assumption Agreement or Transfer Supplement or other document
pursuant to which such Person becomes a party as a Conduit Purchaser to this
Agreement, or any other writing or agreement provided by such Conduit Purchaser
to the Seller, the Servicer and the applicable Purchaser Agent from time to
time.  The “CP Rate” for any Conduit Purchaser for any day while a Termination
Event has occurred and is continuing shall be an interest rate per annum equal
to the sum of 2.00% per annum plus the greatest of (i) the Base Rate on such
day, (ii) the Euro-Rate on such day and (iii) the applicable “CP Rate” on such
day as determined without giving effect to this sentence.

 

“Credit and Collection Policy” means, as the context may require, those
receivables credit and collection policies and practices of Cloud Peak in effect
on the date of this Agreement and described in Schedule I to this Agreement, as
modified from time to time in compliance with this Agreement.

 

“Daily Report” means a report substantially in the form of Annex H.

 

“Days’ Sales Outstanding” means, for any calendar month, an amount computed as
of the last day of such calendar month equal to: (a) the average of the
Outstanding Balance of all Pool Receivables as of the last day of each of the
three most recent calendar months ended on the last day of such calendar month
divided by (b)(i) the aggregate initial Outstanding Balance of all Pool
Receivables generated by the Originators during the three calendar months ended
on the last day of such calendar month divided by (ii) 90.

 

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“Debt” of any Person shall mean, without duplication, (a) all obligations of
such Person for borrowed money, (b) all obligations of such Person evidenced by
bonds, debentures, notes or similar instruments, (c) all obligations of such
Person under conditional sale or other title retention agreements relating to
property or assets purchased by such Person, (d) all obligations of such Person
issued or assumed as the deferred purchase price of property or services (other
than current trade liabilities and current intercompany liabilities (but not any
refinancings, extensions, renewals or replacements thereof) incurred in the
ordinary course of business and maturing within 365 days after the incurrence
thereof), (e) all guarantees by such Person of Debt of others, (f) all capital
lease obligations of such Person, (g) all payments that such Person would have
to make in the event of an early termination, on the date Debt of such Person is
being determined, in respect of outstanding swap agreements, (h) the principal
component of all obligations, contingent or otherwise, of such Person as an
account party in respect of letters of credit and (i) the principal component of
all obligations of such person in respect of bankers’ acceptances.  The Debt of
any person shall include the Debt of any partnership in which such Person is a
general partner, other than to the extent that the instrument or agreement
evidencing such Debt expressly limits the liability of such person in respect
thereof.  In no event shall Debt include (i) Specified Coal Agreement
Obligations, (ii) obligations (other than obligations with respect to Debt for
borrowed money or other Funded Debt (as defined in the Cloud Peak Credit
Agreement)) related to surface rights under an agreement for the acquisition of
surface rights for the production of coal reserves in the ordinary course of
business in a manner consistent with historical practice of Cloud Peak
(including Rio Tinto Energy America, Inc., as its predecessor) and its
Subsidiaries, or (iii) obligations under the Tax Receivable Agreement dated as
of November 19, 2009 between Rio Tinto Energy America, Inc. and the Parent.

 

“Declining Conduit Purchaser” has the meaning set forth in Section 1.4(b)(ii) of
this Agreement.

 

“Declining Notice” has the meaning set forth in Section 1.4(b)(ii) of this
Agreement.

 

“Deemed Collections” has the meaning set forth in Section 1.4(e)(ii) of this
Agreement.

 

“Default Ratio” means the ratio (expressed as a percentage and rounded to the
nearest 1/100 of 1%) computed as of the last day of each calendar month by
dividing:  (a) the aggregate Outstanding Balance of all Pool Receivables that
became Defaulted Receivables during such month, by (b) the Outstanding Balance
of all Pool Receivables generated by the Originators during the month that is
three calendar months before such month.

 

“Defaulted Receivable” means a Receivable:

 

(a)                                 as to which any payment, or part thereof,
remains unpaid for more than 60 days from the original due date for such
payment, or

 

(b)                                 without duplication (i) as to which an
Insolvency Proceeding shall have occurred with respect to the Obligor thereof or
any other Person obligated thereon or owning any Related Security with respect
thereto, or (ii) that has been written off the applicable Originator’s or the
Seller’s books as uncollectible.

 

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“Delinquency Ratio” means the ratio (expressed as a percentage and rounded to
the nearest 1/100 of 1%, with 5/1000th of 1% rounded upward) computed as of the
last day of each calendar month by dividing: (a) the aggregate Outstanding
Balance of all Pool Receivables that were Delinquent Receivables on such day by
(b) the aggregate Outstanding Balance of all Pool Receivables on such day.

 

“Delinquent Receivable” means a Receivable (other than a Defaulted Receivable)
as to which any payment, or part thereof, remains unpaid for more than 60 days
from the original due date for such payment.

 

“Dilution Horizon Ratio” means, for any calendar month, the ratio (expressed as
a percentage and rounded to the nearest 1/100th of 1%) computed as of the last
day of such calendar month of: (a) the aggregate initial Outstanding Balance of
all Pool Receivables generated by the Originators during the two most recent
calendar months, to (b) the Net Receivables Pool Balance at the last day of such
calendar month.

 

“Dilution Ratio” means the ratio (expressed as a percentage and rounded to the
nearest 1/100th of 1%), computed as of the last day of each calendar month by
dividing: (a) the aggregate amount of Deemed Collections during such calendar
month by (b) the aggregate initial Outstanding Balance of all Pool Receivables
generated by the Originators during the calendar month that is one month prior
to such calendar month.

 

“Dilution Reserve” means, on any day, an amount equal to: (a) the sum of the
Aggregate Capital plus the Adjusted LC Participation Amount at the close of
business of the Servicer on such day multiplied by (b) (i) the Dilution Reserve
Percentage on such day, divided by (ii) 100% minus the Dilution Reserve
Percentage on such day.

 

“Dilution Reserve Percentage” means on any date, the product of (a) the Dilution
Horizon Ratio multiplied by (b) the sum of (i) 2.50 times the arithmetic average
of the Dilution Ratios for the twelve most recent calendar months and (ii) the
Dilution Volatility Component.

 

“Dilution Volatility Component” means, for any calendar month, (a) the positive
difference, if any, between: (i) the highest Dilution Ratio for any calendar
month during the twelve most recent calendar months and (ii) the arithmetic
average of the Dilution Ratios for such twelve months times (b) the quotient of
(i) the highest Dilution Ratio for any calendar month during the twelve most
recent calendar months divided by (ii) the arithmetic average of the Dilution
Ratios for such twelve months.

 

“Discount” means, with respect to any Purchaser:

 

(a)                                 for any Portion of Capital for any
Settlement Period with respect to any Purchaser to the extent such Portion of
Capital will be funded by such Purchaser during such Settlement Period through
the issuance of Notes:

 

CPR x C x ED/360

 

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(b)                                 for any Portion of Capital for any
Settlement Period with respect to any Purchaser to the extent such Portion of
Capital will not be funded by such Purchaser during such Settlement Period
through the issuance of Notes:

 

AR x C x ED/Year

 

where:

 

AR                              =                                         the
Alternate Rate for such Portion of Capital for such Settlement Period with
respect to such Purchaser;

 

C                                      
=                                         the Capital with respect to such
Portion of Capital during such Settlement Period with respect to such Purchaser;

 

CPR                       =                                         the CP Rate
for the Portion of Capital for such Settlement Period with respect to such
Purchaser;

 

ED                               =                                         the
actual number of days during such Settlement Period; and

 

Year                      =                                         if such
Portion of Capital is funded based upon: (i) the Euro-Rate or LMIR, 360 days,
and (ii) the Base Rate, 365 or 366 days, as applicable;

 

provided, that no provision of this Agreement shall require the payment or
permit the collection of Discount in excess of the maximum permitted by
applicable law; and provided further, that Discount for any Portion of Capital
shall not be considered paid by any distribution to the extent that at any time
all or a portion of such distribution is rescinded or must otherwise be returned
for any reason.

 

“Drawing Date” has the meaning set forth in Section 1.18 of the Agreement.

 

“Eligible Foreign Obligor” means an Obligor which is a resident of any country
(other than the United States of America or Canada) that meets both of the
following criteria: (a) such Obligor is not a Group D Obligor, and (b) such
country has a short-term foreign currency rating (or, if such country does not
have such a short-term foreign currency rating, a long-term foreign currency
rating) of at least “A2” (or “A”) by Standard & Poor’s and “P-1” (or “A2”) by
Moody’s.

 

“Eligible Foreign Obligor Concentration Percentage” means (i) 15.00% at any time
when the Cloud Peak has both (x) a rating of “B+” or better by Standard & Poor’s
on its long-term senior unsecured and uncredit-enhanced debt securities and
(y) a rating of “B2” or better by Moody’s on its long-term senior unsecured and
uncredit-enhanced debt securities, (ii) 5.00% at any time when (A) Cloud Peak
does not meet the ratings requirements set forth in clause (i) above and
(B) Cloud Peak has both (x) a rating of “B” or better by Standard & Poor’s on
its long-term senior unsecured and uncredit-enhanced debt securities and (y) a
rating of “B3” or better by Moody’s on its long-term senior unsecured and
uncredit-enhanced debt securities, and (iii) 0.00% at any other time.

 

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“Eligible Receivable” means, at any time, a Pool Receivable:

 

(a)                                 the Obligor of which is (i) either (x) a
resident of the United States of America or Canada; provided that with respect
to any Receivable the Obligor of which is a resident of Canada, the Seller shall
have taken all actions, at its own expense, and shall have delivered (or caused
to be delivered) to the Administrator all further instruments, opinions and
documents, that may be necessary or desirable in the sole determination of the
Administrator, as the Administrator may reasonably request, to perfect, protect
or more fully evidence such Receivable and the security interest granted therein
and in the Related Security and Collections with respect thereto, or to enable
the Administrator, any Purchaser Agent or any Purchaser to exercise and enforce
their respective rights and remedies under this Agreement or (y) an Eligible
Foreign Obligor, not a Federal government or Federal government subdivision or
department, affiliate, agency or other entity (other than any Subsidiary of
Korea Electric Power Corporation, Tokyo Electric Power Company or any Subsidiary
thereof, or Tennessee Valley Authority) unless otherwise approved by the
Administrator in writing, (iii) not subject to any Insolvency Proceeding, not a
Sanctioned Person and not a resident of a Sanctioned Country, (iv) not an
Affiliate of the Parent, Cloud Peak, any Originator, the Seller or any of their
respective Affiliates and (v) not the Obligor with respect to Delinquent
Receivables with an aggregate Outstanding Balance exceeding 50% of the aggregate
Outstanding Balance of all such Obligor’s Pool Receivables;

 

(b)                                 that is denominated and payable in U.S.
dollars to a Lock-Box Account in the United States, and the Obligor with respect
to which has been instructed to remit Collections in respect thereof to a
Lock-Box Account in the United States;

 

(c)                                  that is not a Delinquent Receivable or a
Defaulted Receivable;

 

(d)                                 in which the Seller owns good and marketable
title, free and clear of any Adverse Claims (other than Permitted Liens), and
that is freely assignable by the Seller;

 

(e)                                  that does not have a stated maturity or due
date which is more than sixty (60) days after the original invoice date of such
Receivable;

 

(f)                                   that has been billed or, if such
Receivable has not yet been billed, the related coal has been shipped within the
last thirty (30) days;

 

(g)                                  that satisfies all applicable requirements
of the Credit and Collection Policy;

 

(h)                                 that arises under a duly authorized Contract
for the sale and delivery of goods and services in the ordinary course of the
applicable Originator’s business, which Contract is in full force and effect and
that is a legal, valid and binding obligation of the related Obligor,
enforceable against such Obligor in accordance with its terms;

 

(i)                                     that is not subject to any right of
rescission, set-off (including, without limitation, any such right arising from
an Obligor making a deposit or similar payment to an Originator), counterclaim,
any other defense against the applicable Originator (as its

 

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assignee) or Adverse Claim (other than Permitted Liens), and the Obligor of
which holds no right as against the applicable Originator to cause such
Originator to repurchase the goods or merchandise, the sale of which shall have
given right to such Receivable;

 

(j)                                    that has not been modified, waived or
restructured since its creation, except as permitted pursuant to Section 4.2 of
this Agreement;

 

(k)                                 that conforms in all material respects with
all applicable laws, rulings and regulations in effect;

 

(l)                                     for which the Administrator (for the
benefit of each Purchaser) has a valid and enforceable undivided percentage
ownership or security interest, to the extent of the Purchased Interest, and a
valid and enforceable first priority perfected security interest therein and in
the Related Security and Collections with respect thereto, in each case free and
clear of any Adverse Claim (other than Permitted Liens);

 

(m)                             for which none of the Originators, the Seller
and the Servicer has established any offset or netting arrangements with the
related Obligor (other than offset or netting arrangements for coal quality
pursuant to the terms of the related contract in accordance with the Credit and
Collection Policy and which offset or netting has been reflected in such
Receivable’s Outstanding Balance);

 

(n)                                 that represents amounts earned and payable
by the Obligor that are not subject to the performance of additional services by
any Originator;

 

(o)                                 that constitutes an “account” as defined in
the UCC, and that is not evidenced by instruments or chattel paper; and

 

(r)                                    that satisfies all applicable
requirements of clause (k) of Section 6.1 of the Purchase and Sale Agreement.

 

“ERISA” means the Employee Retirement Income Security Act of 1974, as amended
from time to time, and any successor statute of similar import, together with
the rulings and regulations thereunder, in each case as in effect from time to
time. References to sections of ERISA also refer to any successor sections.

 

“ERISA Affiliate” means: (a) any corporation that is a member of the same
controlled group of corporations (within the meaning of Section 414(b) of the
Internal Revenue Code) as the Seller, any Originator or Cloud Peak, (b) a trade
or business (whether or not incorporated) under common control (within the
meaning of Section 414(c) of the Internal Revenue Code) with the Seller, any
Originator or Cloud Peak, or (c) a member of the same affiliated service group
(within the meaning of Section 414(m) of the Internal Revenue Code) as the
Seller, any Originator, any corporation described in clause (a) or any trade or
business described in clause (b).

 

“Euro-Rate” means with respect to any Settlement Period, the greater of
(a) 0.00% and (b) the interest rate per annum determined by the applicable
Purchaser Agent by dividing (the resulting quotient rounded upwards, if
necessary, to the nearest 1/100th of 1% per annum) (i) the

 

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rate of interest determined by such Purchaser Agent in accordance with its usual
procedures (which determination shall be conclusive absent manifest error) to be
the rate per annum for deposits in U.S. dollars as reported by Bloomberg Finance
L.P. and shown on US0001M Screen as the composite offered rate for London
interbank deposits for such period (or on any successor or substitute page of
such service, or any successor to or substitute for such service, providing rate
quotations comparable to those currently provided on such page of such service,
as determined by such Purchaser Agent from time to time for purposes of
providing quotations of interest rates applicable to dollar deposits in the
London interbank market) at or about 11:00 a.m. (London time) on the Business
Day which is two (2) Business Days prior to the first day of such Settlement
Period for an amount comparable to the Portion of Capital to be funded at the
Alternate Rate and based upon the Euro-Rate during such Settlement Period by
(ii) a number equal to 1.00 minus the Euro-Rate Reserve Percentage. The
Euro-Rate may also be expressed by the following formula:

 

 

 

Composite of London interbank offered rates shown on

 

 

Bloomberg Finance L.P. Screen US0001M

 

 

or appropriate successor

 

Euro-Rate =

 

 

 

 

 

 

 

 

1.00 - Euro-Rate Reserve Percentage

 

 

where “Euro-Rate Reserve Percentage” means, the maximum effective percentage in
effect on such day as prescribed by the Board of Governors of the Federal
Reserve System (or any successor) for determining the reserve requirements
(including without limitation, supplemental, marginal, and emergency reserve
requirements) with respect to eurocurrency funding (currently referred to as
“Eurocurrency Liabilities”). The Euro-Rate shall be adjusted with respect to any
Portion of Capital funded at the Alternate Rate and based upon the Euro-Rate
that is outstanding on the effective date of any change in the Euro-Rate Reserve
Percentage as of such effective date. The applicable Purchaser Agent shall give
prompt notice to the Seller of the Euro-Rate as determined or adjusted in
accordance herewith (which determination shall be conclusive absent manifest
error).

 

“Excess Concentration” means the sum of the following (without duplication):

 

(i)                                     the aggregate of the amounts calculated
for each Obligor on a Pool Receivable equal to the amount (if any) by which the
Outstanding Balance of Eligible Receivables of such Obligor then in the
Receivables Pool exceeds an amount equal to the Concentration Percentage for
such Obligor multiplied by the Outstanding Balance of all Eligible Receivables
then in the Receivables Pool; plus

 

(ii)                                  the amount (if any) by which the aggregate
Outstanding Balance of all Eligible Receivables then in the Receivables Pool the
Obligor of which is a resident of Canada exceeds 3.00% of the aggregate
Outstanding Balance of all Eligible Receivables then in the Receivables Pool;
plus

 

(iii)                               the sum of (A) the amount (if any) by which
(x) the aggregate Outstanding Balance of all Eligible Receivables then in the
Receivables Pool, the Obligors of which are Eligible Foreign Obligors that are
not Group A Obligors, exceeds (y) 2.50% of the aggregate

 

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Outstanding Balance of all Eligible Receivables then in the Receivables Pool,
plus (B) the amount (if any) by which (x) the amount equal to (I) the aggregate
Outstanding Balance of all Eligible Receivables then in the Receivables Pool,
the Obligors of which are Eligible Foreign Obligors, minus (II) the amount (if
any) determined pursuant to clause (A) above, exceeds (y) the Eligible Foreign
Obligor Concentration Percentage of the aggregate Outstanding Balance of all
Eligible Receivables then in the Receivables Pool; plus

 

(iv) the amount (if any) by which the aggregate Outstanding Balance of all
Eligible Receivables then in the Receivables Pool with stated maturities or due
dates that are more than thirty (30) days after the original invoice dates
thereof exceeds 3.00% of the aggregate Outstanding Balance of all Eligible
Receivables then in the Receivables Pool.

 

In the case of any Obligor which is an Affiliate of any other Obligor, “Excess
Concentration” and the components thereof (including, without limitation, the
Concentration Percentages and Outstanding Balances) shall be calculated as if
such Obligors were a single Obligor.

 

“Excluded Receivable” means any Receivable (such term being used in this
definition without giving effect to the proviso to the definition of
“Receivable”), (a) the Obligor of which is Venture Fuels Partnership or (b) the
Obligor of which is, or is a Subsidiary of, or a resident of South Korea (a/k/a
the Republic of Korea); provided, however, that the Receivables of any such
Obligor shall cease to be Excluded Receivables upon the Seller or the Servicer
delivering written notice to the Administrator and each Purchaser Agent
confirming that such Obligor described in clause (b) above has consented in
writing to the Originators’ transfer of such Receivables to the Seller and the
Seller’s sale and pledge of such Receivables to the Administrator pursuant to
the Transaction Documents.

 

“Exiting Notice” has the meaning set forth in Section 1.4(b)(ii) of this
Agreement.

 

“Exiting Purchaser” has the meaning set forth in Section 1.4(b)(ii) of this
Agreement.

 

“FATCA” means Sections 1471 through 1474 of the Internal Revenue Code, as of the
date of this Agreement (or any amended or successor version that is
substantively comparable and not materially more onerous to comply with), and
any current or future regulations or official interpretations thereof.

 

“Facility Termination Date” means the earliest to occur of: (a) with respect to
each Purchaser, LC Participant or LC Bank, January 23, 2020, subject to any
extension pursuant to Section 1.13 of this Agreement (it being understood that
if any such Purchaser does not extend its Commitment hereunder then the Purchase
Limit shall be reduced ratably with respect to the Purchasers in each Purchaser
Group by an amount equal to the Commitment of such Exiting Purchaser and the
Commitment Percentages and Group Commitments of the Purchasers within each
Purchaser Group shall be appropriately adjusted), (b) the date determined
pursuant to Section 2.2 of this Agreement, (c) the date the Purchase Limit
reduces to zero pursuant to Section 1.1(b) of this Agreement, (d) with respect
to each Purchaser Group, the date that the commitment, of all of the Related
Committed Purchasers of such Purchaser Group terminate pursuant to Section 1.13
and (e) the date which is 30 days after the date on which the

 

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Administrator has received written notice from the Seller of its election to
terminate the Purchase Facility.

 

“Federal Funds Rate” means, for any day, the per annum rate set forth in the
weekly statistical release designated as H.15(519), or any successor
publication, published by the Federal Reserve Board (including any such
successor, “H.15(519)”) for such day opposite the caption “Federal Funds
(Effective).” If on any relevant day such rate is not yet published in
H.15(519), the rate for such day will be the rate set forth in the daily
statistical release designated as the Composite 3:30 p.m. Quotations for U.S.
Government Securities, or any successor publication, published by the Federal
Reserve Bank of New York (including any such successor, the “Composite 3:30
p.m. Quotations”) for such day under the caption “Federal Funds Effective Rate.”
If on any relevant day the appropriate rate is not yet published in either
H.15(519) or the Composite 3:30 p.m. Quotations, the rate for such day will be
the arithmetic mean as determined by the Administrator of the rates for the last
transaction in overnight Federal funds arranged before 9:00 a.m. (New York City
Time) on that day by each of three leading brokers of Federal funds transactions
in New York City selected by the Administrator.

 

“Federal Reserve Board” means the Board of Governors of the Federal Reserve
System, or any entity succeeding to any of its principal functions.

 

“Fee Letter” has the meaning set forth in Section 1.5 of the Agreement.

 

“Fees” means the fees payable by the Seller to each member of each Purchaser
Group pursuant to the applicable Purchaser Group Fee Letter.

 

“Final Payout Date” means the latest of (i) the Facility Termination Date,
(ii) the date on which no Capital of or Discount in respect of the Purchased
Interest shall be outstanding, (iii) the LC Participation Amount is zero ($0),
and (iv) the date all other amounts owing to the Purchaser Agents, the
Purchasers and the Administrator by the Seller, the Originators, the Servicer
and the Performance Guarantor under this Agreement and each of the other
Transaction Documents have been paid in full (other than indemnification or
other contingent obligations not yet due and owing).

 

“Financial Officer” means the chief financial officer, principal accounting
officer, treasurer or controller of Cloud Peak or the Seller, as applicable.

 

“Fitch” means Fitch, Inc. and any successor thereto that is a nationally
recognized statistical rating organization.

 

“Funded Purchase” shall mean a Purchase that is made pursuant to Section 1.2(b).

 

“GAAP” means the generally accepted accounting principles and practices in the
United States, consistently applied.

 

“Governmental Acts” means any act or omission, whether rightful or wrongful, of
any present or future de jure or de facto Governmental Authority.

 

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“Governmental Authority” means the government of the United States, any other
nation or any political subdivision thereof, whether state or local, and any
agency, authority, instrumentality, regulatory body, court, central bank or
other entity (including any supranational body, including the European Union and
the European Central Bank) exercising executive, legislative, judicial, taxing,
regulatory or administrative powers or functions of or pertaining to government.

 

“Group A Obligor” means any Obligor (or, if such Obligor is not rated, its
parent company) with a short-term rating of at least: (a) “A-1” by Standard &
Poor’s, or if such Obligor (or, if applicable, such parent company) does not
have a short-term rating from Standard & Poor’s, a rating of “A+” or better by
Standard & Poor’s on its long-term senior unsecured and uncredit-enhanced debt
securities, and (b) “P-1” by Moody’s, or if such Obligor (or, if applicable,
such parent company) does not have a short-term rating from Moody’s, “A1” or
better by Moody’s on its long-term senior unsecured and uncredit-enhanced debt
securities.

 

“Group B Obligor” means any Obligor that is not a Group A Obligor, which Obligor
(or, if such Obligor is not rated, its parent company) has a short-term rating
of at least: (a) “A-2” by Standard & Poor’s, or if such Obligor does not have a
short-term rating from Standard & Poor’s, a rating of “BBB+” to “A” by
Standard & Poor’s on its long-term senior unsecured and uncredit-enhanced debt
securities, and (b) “P-2” by Moody’s, or if such Obligor (or, if applicable,
such parent company) does not have a short-term rating from Moody’s, “Baa1” to
“A2” by Moody’s on its long-term senior unsecured and uncredit-enhanced debt
securities.

 

“Group C Obligor” means any Obligor that is not a Group A Obligor or Group B
Obligor, which Obligor (or, if such Obligor is not rated, its parent) has a
short-term rating of at least: (a) “A-3” by Standard & Poor’s, or if such
Obligor does not have a short-term rating from Standard & Poor’s, a rating of
“BBB-” to “BBB” by Standard & Poor’s on its long-term senior unsecured and
uncredit-enhanced debt securities, and (b) “P-3” by Moody’s, or if such Obligor
(or, if applicable, such parent company) does not have a short-term rating from
Moody’s, “Baa3” to “Baa2” by Moody’s on its long-term senior unsecured and
uncredit-enhanced debt securities.

 

“Group Capital” means with respect to any Purchaser Group, an amount equal to
the aggregate of all Capital of the Purchasers within such Purchaser Group.

 

“Group Capital Percentage” means with respect to any Purchaser Group, a fraction
(expressed as a percentage) (i) the numerator of which is the Group Capital of
such Purchaser Group and (ii) the denominator of which is the Aggregate Capital.

 

“Group Commitment” means with respect to any Purchaser Group, the amount which
is set forth opposite the name of such Purchaser Group on Schedule VI, as such
amount may be modified in connection with a change in the Purchase Limit
pursuant to Section 1.1(b).

 

“Group Commitment Percentage” means with respect to any Purchaser Group, a
fraction (expressed as a percentage) (i) the numerator of which is the Group
Commitment of such Purchaser Group and (ii) the denominator of which is the
aggregate Group Commitments of all Purchaser Groups.

 

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“Group D Obligor” means any Obligor that is not a Group A Obligor, Group B
Obligor or Group C Obligor.

 

“Indemnified Amounts” has the meaning set forth in Section 3.1 of this
Agreement.

 

“Indemnified Party” has the meaning set forth in Section 3.1 of this Agreement.

 

“Indemnified Taxes” has the meaning set forth in Section 1.10 of this Agreement.

 

“Independent Director” has the meaning set forth in paragraph 3(c) of Exhibit IV
to this Agreement.

 

“Information Package” means a report, in substantially the form of Annex A to
this Agreement, furnished by or on behalf of the Servicer to the Administrator
and each Purchaser Agent pursuant to the Agreement, reflective of the
Receivables Pool as of the end of the most recently completed calendar month.

 

“Initial Closing Date” means February 11, 2013.

 

“Insolvency Proceeding” means: (a) any case, action or proceeding before any
court or other Governmental Authority relating to bankruptcy, reorganization,
insolvency, liquidation, receivership, dissolution, winding-up or relief of
debtors, or (b) any general assignment for the benefit of creditors of a Person
or any composition, marshalling of assets for creditors of a Person, or other
similar arrangement in respect of its creditors generally or any substantial
portion of its creditors, in each case, undertaken under U.S. Federal, state or
foreign law, including the Bankruptcy Code.

 

“Intended Tax Treatment” has the meaning set forth in Section 1.14 of the
Agreement.

 

“Interim Report” means each Daily Report and Weekly Report.

 

“Internal Revenue Code” means the Internal Revenue Code of 1986, as amended from
time to time, and any successor statute of similar import, together with the
regulations thereunder, in each case as in effect from time to time. References
to sections of the Internal Revenue Code also refer to any successor sections.

 

“IRS” means the United States Internal Revenue Service.

 

“LBA” means the acquisition of federal coal through an application for a federal
coal lease submitted in accordance with the BLM competitive leasing regulations.

 

“LBM” means the acquisition of federal coal through an application to modify an
existing coal lease submitted in accordance with the BLM non-competitive leasing
regulations.

 

“LC Bank” has the meaning set forth in the preamble to the Agreement.

 

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“LC Collateral Account” means the account at any time designated as the LC
Collateral Account established and maintained by the Administrator (for the
benefit of the LC Bank and the LC Participants), or such other account as may be
so designated as such by the Administrator.

 

“LC Fee Expectation” has the meaning set forth in Section 1.1(b) of the
Agreement.

 

“LC Participant” means each Person listed as such (and its respective
Commitment) for each Purchaser Group as set forth on the signature pages of this
Agreement or in any Assumption Agreement or Transfer Supplement.

 

“LC Participation Amount” means, at any time, the sum of the undrawn face amount
of all Letters of Credit outstanding at such time.

 

“LCR Security” means any commercial paper or security (other than equity
securities issued to Parent or any Originator that is a consolidated subsidiary
of Parent under GAAP) within the meaning of Paragraph   .32(e)(viii) of the
final rules titled Liquidity Coverage Ratio: Liquidity Risk Measurement
Standards, 79 Fed. Reg. 197, 61440 et seq. (October 10, 2014).

 

“Letter of Credit” means any stand-by letter of credit issued by the LC Bank
pursuant to the Agreement.

 

“Letter of Credit Application” has the meaning set forth in Section 1.16 of the
Agreement.

 

“Level I Minimum Liquidity Period” means each period, if any, commencing on the
day on which an Information Package or Interim Report is delivered and Liquidity
is less than $300,000,000 but greater than or equal to $175,000,000 as of the
related Liquidity Reporting Date and ending on (but not including) the
commencement of a Level II Minimum Liquidity Period or the day on which an
Information Package or Interim Report is delivered and Liquidity is no longer
less than $300,000,000 as of the related Liquidity Reporting Date.

 

“Level II Minimum Liquidity Period” means each period, if any, commencing on the
day on which an Information Package or Interim Report is delivered and Liquidity
is less than $175,000,000 as of the related Liquidity Reporting Date and ending
on (but not including) the day on which an Information Package or Interim Report
is delivered and Liquidity is no longer less than $175,000,000 as of the related
Liquidity Reporting Date.

 

“Liquidity” shall have the meanings assigned thereto in the Cloud Peak Credit
Agreement as in effect on the Closing Date without giving effect to any
subsequent amendment, supplement or other modification thereof except to the
extent that such amendment, supplement or modification (as the case may be) has
been consented to in writing by the Administrator, the LC Bank and each
Purchaser Agent (each acting in its sole discretion and in its capacity as such
hereunder).

 

“Liquidity Agent” means each of the banks acting as agent for the various
Liquidity Providers under each Liquidity Agreement.

 

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“Liquidity Agreement” means any agreement entered into in connection with this
Agreement pursuant to which a Liquidity Provider agrees to make purchases or
advances to, or purchase assets from, any Conduit Purchaser in order to provide
liquidity for such Conduit Purchaser’s Purchases.

 

“Liquidity Provider” means each bank or other financial institution that
provides liquidity support to any Conduit Purchaser pursuant to the terms of a
Liquidity Agreement.

 

“Liquidity Reporting Date” means (a) with respect to each Information Package,
the last Business Day of the related calendar month, (b) with respect to each
Weekly Report, the last Business day of the related calendar week and (c) with
respect to each Daily Report, the previous Business Day.

 

“LMIR” means for any day during any Settlement Period, the greater of (a) 0.00%
and (b) the one-month Eurodollar rate for U.S. dollar deposits as reported on
the Reuters Screen LIBOR01 Page or any other page that may replace such
page from time to time for the purpose of displaying offered rates of leading
banks for London interbank deposits in United States dollars, as of 11:00
a.m. (London time) on such day, or if such day is not a Business Day, then the
immediately preceding Business Day (or if not so reported, then as determined by
the Administrator from another recognized source for interbank quotation), in
each case, changing when and as such rate changes.

 

“Lock-Box Account” means each account listed on Schedule II to this Agreement
and maintained, in each case in the name of the Seller and maintained by the
Seller at a bank or other financial institution acting as a Lock-Box Bank
pursuant to a Lock-Box Agreement for the purpose of receiving Collections.

 

“Lock-Box Agreement” means an agreement, among the Seller, the Servicer, a
Lock-Box Bank and the Administrator, governing the terms of the related Lock-Box
Accounts, in each case acceptable to the Administrator.

 

“Lock-Box Bank” means any of the banks or other financial institutions holding
one or more Lock-Box Accounts.

 

“Loss Horizon Ratio” means, on any date, the ratio (expressed as a percentage
and rounded to the nearest 1/100 of 1%) computed by dividing: (a) the aggregate
initial Outstanding Balance of all Pool Receivables generated by the Originators
during the four (4) most recent calendar months, by (b) the Net Receivables Pool
Balance as of such date.

 

“Loss Reserve” means, on any date, an amount equal to:  (a) the sum of the
Aggregate Capital plus the Adjusted LC Participation Amount at the close of
business of the Servicer on such date multiplied by (b) (i) the Loss Reserve
Percentage on such date divided by (ii) 100% minus the Loss Reserve Percentage
on such date.

 

“Loss Reserve Percentage” means, on any date, the product of (a) 2.50, times
(b) the highest average of the Default Ratios for any three consecutive calendar
months during the twelve most recent calendar months, times (c) the Loss Horizon
Ratio.

 

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“Majority Purchaser Agents” means, at any time, the Purchaser Agents for the
Purchaser Groups with Group Commitments that aggregate more than 50% of the
Purchase Limit; provided, however, that so long as the Group Commitment of any
single Purchaser Group is greater than 50% of the Purchase Limit, then “Majority
Purchaser Agents” shall mean a minimum of two Purchaser Agents for Purchaser
Groups with Group Commitments that aggregate more than 50% of the Purchase
Limit.

 

“Material Adverse Effect” means a material adverse effect on any of the
following:

 

(a)                                 the assets, operations, business or
financial condition of Cloud Peak, the Servicer, any Originator or the Seller;

 

(b)                                 the ability of any of Cloud Peak, the
Servicer, any Originator or the Seller to perform its obligations under this
Agreement or any other Transaction Document to which it is a party;

 

(c)                                  the validity or enforceability of any of
the Transaction Documents, or the validity, enforceability or collectibility of
any material portion of the Pool Receivables; or

 

(d)                                 the status, perfection, enforceability or
priority of the Administrator’s, any Purchaser’s or the Seller’s interest in the
Pool Assets.

 

“Material Debt” means (a) any Debt of Cloud Peak or any of its Affiliates under
the Cloud Peak Credit Agreement and (b) any other Debt of the Parent, Cloud Peak
or any of their respective Subsidiaries that is outstanding in a principal
amount of at least $50,000,000 in the aggregate.

 

“Material Debt Agreement” means the Cloud Peak Credit Agreement and any other
agreement under which any Material Debt was created or is governed or which
provides for the incurrence of Debt in an amount which would constitute Material
Debt (whether or not an amount of Debt constituting Material Debt is outstanding
thereunder).

 

“Minimum Dilution Reserve” means at any time, the product of (a) the sum of the
Aggregate Capital plus the Adjusted LC Participation Amount, and (b)(i) the
Minimum Dilution Reserve Percentage divided by (ii) 1 minus the Minimum Dilution
Reserve Percentage.

 

“Minimum Dilution Reserve Percentage” means, at any time, the product of (a) the
arithmetic average of the Dilution Ratios for the twelve most recent calendar
months at such time multiplied by (b) the Dilution Horizon Ratio.

 

“Moody’s” means Moody’s Investors Service, Inc. and any successor thereto that
is a nationally recognized statistical rating organization.

 

“Net Receivables Pool Balance” means, at any time: (a) the Outstanding Balance
of Eligible Receivables then in the Receivables Pool minus (b) the Excess
Concentration.

 

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“Notes” means short-term promissory notes issued, or to be issued, by any
Conduit Purchaser to fund its investments in accounts receivable or other
financial assets.

 

“Notice Date” has the meaning set forth in Section 1.16 of this Agreement.

 

“Obligor” means, with respect to any Receivable, the Person obligated to make
payments pursuant to the Contract relating to such Receivable.

 

“Obligor Percentage” means, at any time, for each Obligor, a fraction, expressed
as a percentage, (a) the numerator of which is the aggregate Outstanding Balance
of the Eligible Receivables of such Obligor less the amount (if any) then
included in the calculation of the Excess Concentration with respect to such
Obligor, and (b) the denominator of which is the aggregate Outstanding Balance
of all Eligible Receivables at such time; provided, however, that the Salt River
Project’s Obligor Percentage shall not be deemed to exceed 15.50% for so long as
the Salt River Project remains a Special Obligor pursuant to the definition of
“Concentration Percentage”.

 

“Order” has the meaning set forth in Section 1.24 of this Agreement.

 

“Originator” means each Person from time to time party to the Purchase and Sale
Agreement in the capacity of an “Originator” thereunder.  As of the Closing
Date, the Originators are (i) Cloud Peak, (ii) Kennecott Coal Sales LLC, an
Oregon limited liability company, (iii) Cloud Peak Energy Logistics LLC, an
Oregon limited liability company, (iv) Spring Creek Coal LLC, a Delaware limited
liability company, (v) Antelope Coal LLC, a Delaware limited liability company,
(vi) Cordero Mining LLC, a Delaware limited liability company, and (vii) Caballo
Rojo LLC, a Delaware limited liability company.

 

“Other Taxes” means any and all present or future stamp or documentary taxes or
any other excise or property taxes, charges or similar levies arising from any
payment made hereunder or from the execution, delivery or enforcement of, or
otherwise with respect to, this Agreement or any other Transaction Document.

 

“Outstanding Balance” of any Receivable at any time means the then outstanding
principal balance thereof.

 

“Parent” means Cloud Peak Energy Inc., a Delaware corporation.

 

“Participant” has the meaning set forth in Section 6.3(b) of this Agreement.

 

“Participant Register” has the meaning set forth in Section 6.3(b) of this
Agreement.

 

“Participation Advance” has the meaning set forth in Section 1.18 of this
Agreement.

 

“Performance Guarantor” means Cloud Peak Energy Resources LLC, a Delaware
limited liability company.

 

“Performance Guaranty” means the Performance Guaranty, dated as of February 11,
2013, by the Performance Guarantor, in favor of the Administrator for the
benefit of the

 

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Administrator, the Purchasers, the Purchaser Agents, as the same may be amended,
restated, supplemented or otherwise modified from time to time.

 

“Permitted Liens” shall mean the following encumbrances but only to the extent
the holders of such encumbrances have not commenced a foreclosure or other
enforcement action with respect thereto: (a) Adverse Claims for taxes or
assessments or other governmental charges not yet due and payable or that are
being contested in good faith and by appropriate proceedings diligently
conducted, and for which adequate reserves have been set aside in accordance
with GAAP (but only to the extent that any Adverse Claim to secure payment of
such taxes or assessments or other governmental charges is an inchoate tax
lien); (b) inchoate and unperfected workers’, mechanics’, suppliers’ or similar
Adverse Claims arising in the ordinary course of business; (d) carriers’,
warehousemen’s or other similar possessory liens arising in the ordinary course
of business and securing liabilities in an outstanding aggregate amount not in
excess of $1,000,000 at any one time; and (e) currently existing or hereinafter
created liens in favor of Seller, the Purchasers or the Administrator.

 

“Person” means an individual, partnership, corporation (including a business
trust), joint stock company, trust, unincorporated association, joint venture,
limited liability company or other entity, or a government or any political
subdivision or agency thereof.

 

“Pool Assets” has the meaning set forth in Section 1.2(d) of this Agreement.

 

“Pool Receivable” means a Receivable in the Receivables Pool.

 

“Portion of Capital” means, with respect to any Purchaser and its related
Capital, the portion of such Capital being funded or maintained by such
Purchaser by reference to a particular interest rate basis.

 

“Prior Agreement” has the meaning set forth in the preamble to this Agreement.

 

“Prior Agreement Outstanding Amounts” has the meaning set forth in the preamble
to this Agreement.

 

“Private Coal Agreement” means an agreement between Cloud Peak and/or one or
more of its Subsidiaries, on the one hand, and a seller or lessee (in each case,
that is not a Governmental Authority) (the “Transferee”) under which Cloud Peak
and its Subsidiaries acquire coal through (i) a lease from such Transferee,
(ii) the purchase of one or more coal deposit or other assets from such
Transferee or (iii) the exchange of coal assets between Cloud Peak and its
Subsidiaries, on the one hand, and such Transferee, on the other.

 

“Pro Rata Share” means, as to any LC Participant, a fraction, the numerator of
which equals the Commitment of such LC Participant at such time and the
denominator of which equals the aggregate of the Commitments of all LC
Participants at such time.

 

“Program Support Agreement” means and includes any Liquidity Agreement and any
other agreement entered into by any Program Support Provider providing for:
(a) the issuance of one or more letters of credit for the account of any Conduit
Purchaser, (b) the issuance of one or more surety bonds for which the such
Conduit Purchaser is obligated to reimburse the applicable

 

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Program Support Provider for any drawings thereunder, (c) the sale by such
Conduit Purchaser to any Program Support Provider of the Purchased Interest (or
portions thereof) maintained by such Conduit Purchaser and/or (d) the making of
loans and/or other extensions of credit to any Conduit Purchaser in connection
with such Conduit Purchaser’s securitization program contemplated in this
Agreement, together with any letter of credit, surety bond or other instrument
issued thereunder.

 

“Program Support Provider” means and includes with respect to each Conduit
Purchaser any Liquidity Provider and any other Person (other than any customer
of such Conduit Purchaser) now or hereafter extending credit or having a
commitment to extend credit to or for the account of, or to make purchases from,
such Conduit Purchaser pursuant to any Program Support Agreement.

 

“Purchase” has the meaning set forth in Section 1.1(a) of this Agreement.

 

“Purchase and Sale Agreement” means the Purchase and Sale Agreement, dated as of
February 11, 2013, among the Originators, the Seller and the Servicer, as the
same may be amended, amended and restated, supplemented or otherwise modified
from time to time.

 

“Purchase Date” means the date of which a Purchase or a reinvestment is made
pursuant to this Agreement.

 

“Purchase Facility” has the meaning set forth in Section 1.1 of the Purchase and
Sale Agreement.

 

“Purchase Limit” means $70,000,000, as such amount may be reduced pursuant to
Section 1.1(b) of this Agreement or otherwise in connection with any Exiting
Purchaser.

 

“Purchase Notice” has the meaning set forth in Section 1.2(a) to this Agreement.

 

“Purchased Interest” means, at any time, the undivided percentage ownership
interest in: (a) each and every Pool Receivable now existing or hereafter
arising, (b) all Related Security with respect to such Pool Receivables and
(c) all Collections with respect to, and other proceeds of, such Pool
Receivables and Related Security. Such undivided percentage interest shall be
computed as:

 

Aggregate Capital + Adjusted LC Participation Amount + Total Reserves 
Net Receivables Pool Balance

 

The Purchased Interest shall be determined from time to time pursuant to
Section 1.3 of this Agreement.

 

“Purchaser” means each Conduit Purchaser, each Related Committed Purchaser, LC
Participant and/or the LC Bank.

 

“Purchaser Agent” means each Person acting as agent on behalf of a Purchaser
Group and designated as a Purchaser Agent for such Purchaser Group on the
signature pages to this Agreement or any other Person who becomes a party to
this Agreement as a Purchaser Agent

 

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pursuant to an Assumption Agreement or a Transfer Supplement or otherwise in
accordance with this Agreement.

 

“Purchaser Group” means, (i) for any Conduit Purchaser, such Conduit Purchaser,
together with such Conduit Purchaser’s Related Committed Purchasers, related
Purchaser Agent and related LC Participants and (ii) for PNC, PNC, as a
Purchaser Agent, a Related Committed Purchaser, the LC Bank and an LC
Participant.

 

“Purchasers’ Share” of any amount, at any time, means such amount multiplied by
the Purchased Interest at such time.

 

“Purchasing Related Committed Purchaser” has the meaning set forth in
Section 6.3(c) of this Agreement.

 

“Qualifying Interim Report” shall mean any Daily Report that satisfies each of
the following conditions: (A) the Purchased Interest as set forth in such Daily
Report shall not exceed 100%; (B) such Daily Report is calculated as of the
immediately prior Business Day and (C) all information or calculations set forth
in such Daily Report are true and correct.

 

“Receivable” means any indebtedness and other obligations owed to any Originator
or the Seller or any right of the Seller or any Originator to payment from or on
behalf of an Obligor or any right to reimbursement for funds paid or advanced by
the Seller or any Originator on behalf of an Obligor, whether constituting an
account, chattel paper, payment intangible, instrument, general intangible or
as-extracted collateral, however arising (whether or not earned by performance),
and includes, without limitation, the obligation to pay any finance charges,
fees and other charges with respect thereto; provided, however, that
“Receivable” (except as used in the definition of “Excluded Receivable”) does
not include any Excluded Receivable.  Indebtedness and other obligations arising
from any one transaction, including, without limitation, indebtedness and other
obligations represented by an individual invoice or agreement, shall constitute
a Receivable separate from a Receivable consisting of the indebtedness and other
obligations arising from any other transaction.

 

“Receivables Pool” means, at any time, all of the then outstanding Receivables
purchased by the Seller pursuant to the Purchase and Sale Agreement prior to the
Facility Termination Date.

 

“Reimbursement Obligation” has the meaning set forth in Section 1.18 of this
Agreement.

 

“Related Committed Purchaser” means each Person listed as such (and its
respective Commitment) for each Conduit Purchaser as set forth on the signature
pages of this Agreement or in any Assumption Agreement or Transfer Supplement.

 

“Related Rights” has the meaning set forth in Section 1.1 of the Purchase and
Sale Agreement.

 

“Related Security” means, with respect to any Receivable:

 

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(a)                                 all of the Seller’s and each Originator’s
interest in any goods (including returned goods), and documentation of title
evidencing the shipment or storage of any goods (including returned goods), the
sale of which gave rise to such Receivable;

 

(b)                                 all instruments and chattel paper that may
evidence such Receivable;

 

(c)                                  all other security interests or liens and
property subject thereto from time to time purporting to secure payment of such
Receivable, whether pursuant to the Contract related to such Receivable or
otherwise, together with all UCC financing statements or similar filings
relating thereto;

 

(d)                                 all of the Seller’s and each Originator’s
rights, interests and claims under the Contracts relating to such Receivable,
and all guaranties, indemnities, insurance and other agreements (including the
related Contract) or arrangements of whatever character from time to time
supporting or securing payment of such Receivable or otherwise relating to such
Receivable, whether pursuant to the Contract related to such Receivable or
otherwise; and

 

(e)                                  all of the Seller’s rights, interests and
claims under the Purchase and Sale Agreement and the other Transaction
Documents.

 

“Reportable Compliance Event” shall mean that any Covered Entity becomes a
Sanctioned Person, or is charged by indictment, criminal complaint or similar
charging instrument, arraigned, or custodially detained in connection with any
Anti-Terrorism Law or any predicate crime to any Anti-Terrorism Law, or has
knowledge of facts or circumstances to the effect that it is reasonably likely
that any aspect of its operations is in actual or probable violation of any
Anti-Terrorism Law.

 

“Restricted Payments” has the meaning set forth in Section 1(o) of Exhibit IV to
the Agreement.

 

“Sales Agency Agreement” means that certain Sales Agency Agreement, dated as of
February 11, 2013, among the Originators, as the same may be amended, amended
and restated, supplemented or otherwise modified from time to time.

 

“Salt River Project” means the Salt River Project Agricultural Improvement and
Power District.

 

“Sanctioned Country” means a country subject to a sanctions program maintained
under any Anti-Terrorism Law.

 

“Sanctioned Person”  means any individual person, group, regime, entity or thing
listed or otherwise recognized as a specially designated, prohibited, sanctioned
or debarred person, group, regime, entity or thing, or subject to any
limitations or prohibitions (including but not limited to the blocking of
property or rejection of transactions), under any Anti-Terrorism Law.

 

“SEC” shall mean the Securities and Exchange Commission or any governmental
agencies substituted therefor.

 

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“Secured Parties” means the Administrator, each Purchaser, each Purchaser Agent,
each Indemnified Party and each Affected Person.

 

“Seller” has the meaning set forth in the preamble to this Agreement.

 

“Seller’s Share” of any amount means the greater of: (a) $0 and (b) such amount
minus the product of (i) such amount multiplied by (ii) the Purchased Interest.

 

“Servicer” has the meaning set forth in the preamble to this Agreement.

 

“Servicing Fee” shall mean the fee referred to in Section 4.6 of this Agreement.

 

“Servicing Fee Rate” shall have the meaning set forth in Section 4.6 of this
Agreement.

 

“Settlement Date” means the twentieth (20th) day of each calendar month (or if
such day is not a Business Day, the next occurring Business Day), provided, that
on and after the occurrence and continuation of any Termination Event, the
Settlement Date shall be the date selected as such by the Administrator from
time to time (it being understood that the Administrator may select such
Settlement Date to occur as frequently as daily) or, in the absence of any such
selection, the date which would be the Settlement Date pursuant to this
definition.

 

“Settlement Period” means:  (a) before the Facility Termination Date, each
calendar month commencing on (and including) the first day of such calendar
month and ending on (and including) the last day of such calendar month, and
(b) on and after the Facility Termination Date, such period (including a period
of one day) as shall be selected from time to time by the Administrator (with
the consent or at the direction of the Majority Purchaser Agents) or, in the
absence of any such selection, each calendar month as described in clause
(a) above.  For the avoidance of doubt, the applicable or related Settlement
Period for each Settlement Date shall be the Settlement Period most recently
ended prior to such Settlement Date.

 

“Solvent” means, with respect to any Person at any time, a condition under
which:

 

(i)                                     the fair value and present fair saleable
value of such Person’s total assets is, on the date of determination, greater
than such Person’s total liabilities (including contingent and unliquidated
liabilities) at such time;

 

(ii)                                  the fair value and present fair saleable
value of such Person’s assets is greater than the amount that will be required
to pay such Person’s probable liability on its existing debts as they become
absolute and matured (“debts,” for this purpose, includes all legal liabilities,
whether matured or unmatured, liquidated or unliquidated, absolute, fixed, or
contingent);

 

(iii)                               such Person is and shall continue to be able
to pay all of its liabilities as such liabilities mature; and

 

(iv)                              such Person does not have unreasonably small
capital with which to engage in its current and in its anticipated business.

 

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For purposes of this definition:

 

(A)                               the amount of a Person’s contingent or
unliquidated liabilities at any time shall be that amount which, in light of all
the facts and circumstances then existing, represents the amount which can
reasonably be expected to become an actual or matured liability;

 

(B)                               the “fair value” of an asset shall be the
amount which may be realized within a reasonable time either through collection
or sale of such asset at its regular market value;

 

(C)                               the “regular market value” of an asset shall
be the amount which a capable and diligent business person could obtain for such
asset from an interested buyer who is willing to Purchase such asset under
ordinary selling conditions; and

 

(D)                               the “present fair saleable value” of an asset
means the amount which can be obtained if such asset is sold with reasonable
promptness in an arm’s-length transaction in an existing and not theoretical
market.

 

“Specified Coal Agreement Obligations” means installment or deferred payment
obligations or royalty payment obligations or obligations in connection with the
acquisition of related surface rights, in each case, in connection with a
Specified Coal Agreement owed solely to the seller or lessor thereunder (and not
to a bank or other third-party financer), but excluding, in any event, any
Funded Debt (as defined in the Cloud Peak Credit Agreement).

 

“Specified Coal Agreements” means any LBA, LBM, State Coal Lease and Private
Coal Agreements.

 

“Standard & Poor’s” means Standard & Poor’s Ratings Services, a Standard &
Poor’s Financial Services LLC business, and any successor thereto that is a
nationally recognized statistical rating organization.

 

“State Coal Lease” means the acquisition of coal owned by a State in accordance
with the coal leasing regulations of such State.

 

“Sub-Servicer” has the meaning set forth in Section 4.1(d) of this Agreement.

 

“Subordinated Note” means the promissory note issued by the Seller to Cloud Peak
for the benefit of the Originators in the form of Exhibit B to the Purchase and
Sale Agreement (as it may be amended, supplemented, endorsed or otherwise
modified from time to time, together with all promissory notes issued from time
to time in substitution therefor or renewal thereof in accordance with the
Transaction Documents and in substantially the form of Exhibit B to the Purchase
and Sale Agreement).

 

“Subsidiary” means, as to any Person (“parent”) at any date, (a) any
corporation, partnership, limited liability company, joint venture or other
entity the accounts of which would be consolidated with those of the parent in
the parent’s consolidated financial statements if such financial statements were
prepared in accordance with GAAP as of such date and (b) any other

 

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corporation, limited liability company, partnership or other entity of which
securities or other ownership interests representing more than 50% of the equity
or more than 50% of the ordinary voting power or, in the case of a partnership,
more than 50% of the general partnership interests are, as of such date, owned,
controlled or held by the parent and/or one or more of its subsidiaries.

 

“Tangible Net Worth” means, with respect to any Person, the tangible net worth
of such Person as determined in accordance with GAAP.

 

“Taxes” means, with respect to any Person, any and all present or future taxes,
charges, fees, levies or other assessments (including income, gross receipts,
profits, withholding, excise, property, sales, use, license, occupation and
franchise taxes and including any related interest, penalties or other
additions) imposed by any jurisdiction or taxing authority (whether foreign or
domestic) under the laws of which such Person is organized.

 

“Termination Day” means: (a) each day on which the conditions set forth in
Section 2 of Exhibit II to this Agreement are not satisfied or (b) each day that
occurs on or after the Facility Termination Date.

 

“Termination Event” has the meaning specified in Exhibit V to the Agreement. 
For the avoidance of doubt, any Termination Event that occurs shall be deemed to
be continuing unless and until such Termination Event has been waived in
accordance with the terms of the Agreement.

 

“Total Reserves” means, at any time the sum of: (a) the Yield Reserve, plus
(b) the greater of (i) the sum of the Loss Reserve plus the Dilution Reserve and
(ii) the sum of the Minimum Dilution Reserve plus the Concentration Reserve.

 

“Transaction Documents” means this Agreement, the Lock-Box Agreements, each
Purchaser Group Fee Letter, the Purchase and Sale Agreement, the Subordinated
Note, the Performance Guaranty, the Sales Agency Agreement, and all other
certificates, instruments, reports, notices, agreements and documents executed
or delivered under or in connection with this Agreement, in each case as the
same may be amended, amended and restated, supplemented or otherwise modified
from time to time in accordance with the terms thereof.

 

“Transfer Supplement” has the meaning set forth in Section 6.3(c) of this
Agreement.

 

“UCC” means the Uniform Commercial Code as from time to time in effect in the
applicable jurisdiction.

 

“Unmatured Termination Event” means an event that, with the giving of notice or
lapse of time, or both, would constitute a Termination Event.

 

“Weekly Report” means a report substantially in the form of Annex I.

 

“Yield Reserve” means, on any date, an amount equal to (a) the sum of the
Aggregate Capital plus the Adjusted LC Participation Amount at the close of
business of the Servicer on

 

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such date multiplied by (b)(i) the Yield Reserve Percentage on such date divided
by (ii) 1, minus the Yield Reserve Percentage on such date.

 

“Yield Reserve Percentage” means, at any time the following amount:

 

1.50 x DSO x (BR + SFR)

360

 

where:

 

BR                              =                                         the
Base Rate in effect at such time,

 

DSO                       =                                         the Days’
Sales Outstanding, and

 

SFR                         =                                         the
Servicing Fee Rate.

 

Other Terms. All accounting terms not specifically defined herein shall be
construed in accordance with GAAP.  All terms used in Article 9 of the UCC in
the State of New York, and not specifically defined herein, are used herein as
defined in such Article 9. Unless the context otherwise requires, “or” means
“and/or,” and “including” (and with correlative meaning “include” and
“includes”) means including without limiting the generality of any description
preceding such term.

 

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EXHIBIT II

CONDITIONS OF PURCHASES

 

1.                                      Conditions Precedent to Effectiveness. 
This Agreement shall become effective as of the Closing Date when (a) the
Administrator shall have received each of the documents, agreements (in fully
executed form), opinions of counsel, certificates and other deliverables listed
on the closing memorandum attached as Annex F hereto, in each case, in form and
substance acceptable to the Administrator and (b) all fees and expenses payable
by the Seller on the Closing Date to the Purchasers have been paid in full in
accordance with the terms of the Transaction Documents.

 

2.                                      Conditions Precedent to All Funded
Purchases, Issuances of Letters of Credit and Reinvestments.  Each Funded
Purchase, including the initial Funded Purchase (but excluding any deemed Funded
Purchase pursuant to Section 1.2(e), and the issuance of any Letters of Credit
and each reinvestment shall be subject to the further conditions precedent that:

 

(a)                                 in the case of each Funded Purchase and the
issuance of any Letters of Credit, the Servicer shall have delivered to the
Administrator and each Purchaser Agent on or before such purchase or issuance,
as the case may be, in form and substance satisfactory to the Administrator and
each Purchaser Agent, the most recent Information Package to reflect the level
of the Aggregate Capital, the LC Participation Amount and related reserves and
the calculation of the Purchased Interest after such subsequent purchase or
issuance, as the case may be, and a completed Purchase Notice or Issuance
Notice, as applicable, in the form of Annex B-1 or B-2, as applicable; and

 

(b)                                 on the date of such Funded Purchase,
issuance or reinvestment, as the case may be, the following statements shall be
true (and acceptance of the proceeds of such Funded Purchase, issuance or
reinvestment shall be deemed a representation and warranty by the Seller that
such statements are then true):

 

(i)             the representations and warranties contained in Exhibit III to
the Agreement are true and correct in all material respects on and as of the
date of such Funded Purchase, issuance or reinvestment, as the case may be, as
though made on and as of such date except for representations and warranties
which apply as to an earlier date (in which case such representations and
warranties shall be true and correct as of such earlier date);

 

(ii)          no event has occurred and is continuing, or would result from such
Funded Purchase or issuance, that constitutes a Termination Event or an
Unmatured Termination Event; and, in the case of reinvestments, no event has
occurred and is continuing or would result from such reinvestment that
constitutes a Termination Event;

 

(iii)       the sum of the Aggregate Capital plus the LC Participation Amount,
after giving effect to any such Funded Purchase, issuance or reinvestment, as
the case may be, shall not exceed the Purchase Limit, and the Purchased Interest
shall not exceed 100%; and

 

(iv)      the Facility Termination Date has not occurred.

 

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(c)                                  with respect to the first issuance of a
Letter of Credit hereunder on or after the Closing Date, the Seller shall have
delivered (or caused to be delivered) to the Administrator and each Purchaser
Agent favorable opinions of Bracewell LLP, as counsel to the Cloud Peak and
Seller, opining as to (i) customary true sale matters with respect to the
transactions contemplated by the  Purchase and Sale Agreement, and
(ii) customary substantive consolidation matters between the Seller on one hand
and Cloud Peak and the other Originators on the other, in each case, in form and
in form and substance reasonably satisfactory to the Administrator and addressed
to the Administrator, each Purchaser Agent and each Purchaser.

 

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EXHIBIT III

REPRESENTATIONS AND WARRANTIES

 

1.                                      Representations and Warranties of the
Seller.  The Seller represents and warrants to the Administrator, each Purchaser
Agent and each Purchaser as of the date of execution of this Agreement and as of
each other date specified in Section 5 of this Exhibit III that:

 

(a)                                 Existence and Power.  The Seller is a
limited liability company duly formed, validly existing and in good standing
under the laws of Delaware, and has all organizational power and all
governmental licenses, authorizations, consents and approvals required to carry
on its business in each jurisdiction in which its business is conducted, except
where the failure to so do could not reasonably be expected to result in a
Material Adverse Effect.

 

(b)                                 Company and Governmental Authorization,
Contravention.  The execution, delivery and performance by the Seller of this
Agreement and each other Transaction Document to which it is a party are within
the Seller’s organizational powers, have been duly authorized by all necessary
organizational action, require no action by or in respect of, or filing with
(other than the filing of UCC financing statements and continuation statements),
any governmental body, agency or official, and, do not contravene, or constitute
a default under, any provision of applicable law or regulation or of the
operating agreement of the Seller or of any agreement, judgment, injunction,
order, decree or other instrument binding upon the Seller or result in the
creation or imposition of any lien (other than liens in favor of the
Administrator) on assets of the Seller, except as could not reasonably be
expected to result in a Material Adverse Effect.

 

(c)                                  Binding Effect of Agreement.  This
Agreement and each other Transaction Document to which it is a party constitutes
the legal, valid and binding obligation of the Seller enforceable against the
Seller in accordance with its respective terms, except as such enforceability
may be limited by bankruptcy, insolvency, reorganization or other similar laws
affecting the enforcement of creditors’ rights generally and by general
principles of equity, regardless of whether enforceability is considered in a
proceeding in equity or at law.

 

(d)                                 Accuracy of Information.  No information
(other than projections, forward looking statements, budgets, estimates and
general market data) heretofore furnished by the Seller to the Administrator or
any Purchaser Agent in writing pursuant to or in connection with this Agreement
or any other Transaction Document contains any material misstatement of fact or
omits to state any material fact necessary to make the statements therein, when
made and in light of the circumstances under which they were made, not
materially misleading.

 

(e)                                  Actions, Suits.  Except as set forth in
disclosures publicly filed by the Parent with the SEC as of the date of
execution of this Agreement, there are no actions, suits or proceedings pending
or, to the best of the Seller’s knowledge, threatened against or affecting the
Seller or any of its properties, in or before any court, arbitrator or other
body.

 

(f)                                   Accuracy of Exhibits; Lock-Box
Arrangements.  The names and addresses of all the Lock-Box Banks together with
the account numbers of the Lock-Box Accounts at such Lock-Box Banks, are
specified in Schedule II to this Agreement, and all Lock-Box Accounts are
subject to Lock-Box Agreements. All information on each Exhibit, Schedule or
Annex to this

 

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Agreement or the other Transaction Documents (as updated by the Seller from time
to time) is true and complete.  The Seller has delivered a copy of all Lock-Box
Agreements to the Administrator.  The Seller has not granted any interest in any
Lock-Box Account (or any related lock-box or post office box) to any Person
other than the Administrator and, upon delivery to a Lock-Box Bank of the
related Lock-Box Agreement, the Administrator will have exclusive ownership and
control of the Lock-Box Account at such Lock-Box Bank.

 

(g)                                  No Material Adverse Effect.  Since the date
of formation of Seller as set forth in its certificate of formation, there has
been no Material Adverse Effect.

 

(h)                                 Names and Location.  The Seller has not used
any company names, trade names or assumed names other than its name set forth on
the signature pages of this Agreement. The Seller is “located” (as such term is
defined in the applicable UCC) in Delaware.  The office where the Seller keeps
its records concerning the Receivables is at the address of such party set forth
on Schedule V hereto.

 

(i)                                     Margin Stock.  The Seller is not engaged
in the business of extending credit for the purpose of purchasing or carrying
margin stock (within the meaning of Regulations T, U and X, as issued by the
Board of Governors of the Federal Reserve System), and no proceeds of any
Purchase will be used to purchase or carry any margin stock or to extend credit
to others for the purpose of purchasing or carrying any margin stock.

 

(j)                                    Eligible Receivables.  Each Pool
Receivable included as an Eligible Receivable in the calculation of the Net
Receivables Pool Balance is, as of the date of such calculation, an Eligible
Receivable.

 

(k)                                 Credit and Collection Policy.  The Seller
has complied in all material respects with the Credit and Collection Policy with
regard to each Receivable originated by such Originator.

 

(l)                                     Investment Company Act; Not a Covered
Fund.  The Seller is not an “investment company” as defined in, or subject to
regulation under, the Investment Company Act of 1940, as amended (the
“Investment Company Act”), and the Seller is not a “covered fund” under the
Volcker Rule (Section 619 of the Dodd-Frank Wall Street Reform and Consumer
Protection Act and the regulations implemented thereunder).  In reaching those
conclusions, although other statutory or regulatory exemptions may be available
under the Investment Company Act, the Seller has relied on Section 3(c)(5) of
the Investment Company Act.

 

(m)                             Mortgages Covering As-Extracted Collateral. 
Except as set forth in Schedule IV, there are no mortgages that are effective as
financing statements covering as-extracted collateral and that name any
Originator as grantor, debtor or words of similar effect filed or recorded in
any jurisdiction.  The Seller may amend Schedule IV from time to time by
delivering written notice thereof to the Administrator and each Purchaser Agent,
which notice shall include a replacement for Schedule IV.  No mortgage set forth
on Schedule IV has a description of property or collateral covered thereby that
includes, or purports to include, any Receivables transferred or purported to be
transferred under the Transaction Documents, the Lock-Box Accounts or any
subaccount thereof, other than a mortgage (i) relating to the sale thereof by an

 

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Originator to the Seller under the Purchase and Sale Agreement, (ii) relating to
the security interest granted to the Administrator under this Agreement, or
(iii) that has been released or terminated.

 

(n)                                 Anti-Money Laundering/International Trade
Law Compliance.  (x) No Covered Entity is a Sanctioned Person and (y) no Covered
Entity, either in its own right or through any third party, (i) has any of its
assets in a Sanctioned Country or in the possession, custody or control of a
Sanctioned Person in violation of any Anti-Terrorism Law; (ii) does business in
or with, or derives any of its income from investments in or transactions with,
any Sanctioned Country or Sanctioned Person in violation of any Anti-Terrorism
Law; or (iii) engages in any dealings or transactions prohibited by any
Anti-Terrorism Law, in each case, however, with respect to any Covered Entity
that is not the Parent, Cloud Peak or a Subsidiary of Cloud Peak, to the
Seller’s knowledge.

 

(o)                                 Liquidity Coverage Ratio.  The Seller has
not issued any LCR Securities, and the Seller is a consolidated subsidiary of
Cloud Peak under GAAP.

 

2.                                      Representations and Warranties of the
Servicer.  The Servicer represents and warrants to the Administrator, each
Purchaser Agent and each Purchaser as of the date of execution of this Agreement
and as of each other date specified in Section 5 of this Exhibit III that:

 

(a)                                 Existence and Power.  The Servicer is a
limited liability company duly formed, validly existing and in good standing
under the laws of its state of organization, and has all company power and all
governmental licenses, authorizations, consents and approvals required to carry
on its business in each jurisdiction in which its business is conducted, except
where the failure to so do could not reasonably be expected to result in a
Material Adverse Effect.

 

(b)                                 Company and Governmental Authorization,
Contravention.  The execution, delivery and performance by the Servicer of this
Agreement and each other Transaction Document to which it is a party are within
the Servicer’s organizational powers, have been duly authorized by all necessary
organizational action, require no action by or in respect of, or filing with,
any governmental body, agency or official other than filings and disclosures
made under securities laws, and do not contravene, or constitute a default
under, any provision of any material agreement to which it is a party or of any
applicable law or regulation or of the certificate of formation of the Servicer
or of any judgment, injunction, order or decree or agreement or other instrument
binding upon the Servicer or result in the creation or imposition of any lien on
assets of the Servicer, except as could not reasonably be expected to result in
a Material Adverse Effect.

 

(c)                                  Binding Effect of Agreement.  This
Agreement and each other Transaction Document to which it is a party constitutes
the legal, valid and binding obligation of the Servicer enforceable against the
Servicer in accordance with its terms, except as such enforceability may be
limited by bankruptcy, insolvency, reorganization or other similar laws
affecting the enforcement of creditors’ rights generally and by general
principles of equity, regardless of whether enforceability is considered in a
proceeding in equity or at law.

 

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(d)                                 Accuracy of Information.    No information
(other than projections, forward looking statements, budgets, estimates and
general market data) heretofore furnished in writing by the Servicer or the
Administrator or any Purchaser Agent pursuant to or in connection with this
Agreement or any Transaction Document contains any material misstatement of fact
or omits to state any material fact necessary to make the statements therein,
when made and in light of the circumstances under which they were made, not
materially misleading.

 

(e)                                  Actions, Suits.  Except as set forth in
disclosures publicly filed by the Parent with the SEC as of the date of
execution of this Agreement, there are no actions, suits or proceedings pending
or, to the best of the Servicer’s knowledge, threatened against or affecting the
Servicer or any of its Affiliates or their respective properties, in or before
any court, arbitrator or other body, which could reasonably be expected to have
a Material Adverse Effect.

 

(f)                                   No Material Adverse Effect.  Since the
date of the financial statements described in Section 2(i) below, there has been
no Material Adverse Effect.

 

(g)                                  Credit and Collection Policy.  The Servicer
has complied in all material respects with the Credit and Collection Policy with
regard to each Receivable originated by such Originator.

 

(h)                                 Investment Company Act.  The Servicer is not
an “investment company” as defined in, or subject to regulation under, the
Investment Company Act of 1940, as amended.

 

(i)                                     Financial Information.  The balance
sheets of the Parent and its consolidated Subsidiaries as of September 30, 2016,
and the related statements of income and retained earnings for the fiscal
quarter then ended, copies of which have been made publicly available, fairly
present in all material respects the financial condition of the Parent and its
consolidated Subsidiaries as at such date and the results of the operations of
the Parent and its consolidated Subsidiaries for the period ended on such date,
all in accordance with generally accepted accounting principles consistently
applied.

 

(j)                                    Lockbox Accounts.  On or prior to the
Closing Date, the Servicer has transferred and assigned all of its rights,
title, and interest in and to, and remedies, powers, and privileges in respect
of, the Lock-Box Accounts to the Seller.

 

(k)                                 Anti-Money Laundering/International Trade
Law Compliance.  (x) No Covered Entity is a Sanctioned Person, and (y) no
Covered Entity, either in its own right or through any third party, (i) has any
of its assets in a Sanctioned Country or in the possession, custody or control
of a Sanctioned Person in violation of any Anti-Terrorism Law; (ii) does
business in or with, or derives any of its income from investments in or
transactions with, any Sanctioned Country or Sanctioned Person in violation of
any Anti-Terrorism Law; or (iii) engages in any dealings or transactions
prohibited by any Anti-Terrorism Law, in each case, however, with respect to any
Covered Entity that is not the Parent, Cloud Peak or a Subsidiary of Cloud Peak,
to the Servicer’s knowledge.

 

3.                                      Representations, Warranties and
Agreements Relating to the Security Interest.  The Seller hereby makes the
following representations, warranties and agreements with respect

 

III-4

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to the Receivables and Related Security as of the date of execution of this
Agreement and as of each other date specified in Section 5 of this Exhibit III:

 

(a)                                 The Receivables.

 

(i)                                     Creation.  This Agreement creates a
valid and continuing security interest (as defined in the applicable UCC) in the
Receivables included in the Receivables Pool in favor of the Administrator (for
the benefit of the Purchasers), which security interest is prior to all other
Adverse Claims (other than Permitted Liens), and is enforceable as such as
against creditors of and purchasers from the Seller.

 

(ii)                                  Ownership of Receivables.  The Seller owns
and has good and marketable title to the Receivables included in the Receivables
Pool and Related Security free and clear of any Adverse Claim (other than
Permitted Liens).

 

(iii)                               Perfection and Related Security.  The Seller
has caused the filing of all appropriate financing statements in the proper
filing office in the appropriate jurisdictions under applicable law in order to
perfect the sale of the Receivables and Related Security from each Originator to
the Seller pursuant to the Purchase and Sale Agreement, and the sale and
security interest therein from the Seller to the Administrator under this
Agreement.

 

(b)                                 The Lock-Box Accounts.

 

(i)                                     Nature of Lock-Box Accounts.  Each
Lock-Box Account constitutes a “deposit account” within the meaning of the
applicable UCC.

 

(ii)                                  Ownership.  Each Lock-Box Account is in
the name of the Seller, and the Seller owns and has good and marketable title to
the Lock-Box Accounts free and clear of any Adverse Claim (other than Permitted
Liens).

 

(iii)                               Perfection.  The Seller has delivered to the
Administrator a fully executed Lock-Box Agreement relating to each Lock-Box
Account, pursuant to which each applicable Lock-Box Bank, respectively, has
agreed, following the delivery of a notice of control by the Administrator, to
comply with all instructions originated by the Administrator (on behalf of the
Purchasers) directing the disposition of funds in such Lock-Box Account without
further consent by the Seller or the Servicer.

 

(c)                                  Priority.

 

(i)                                     Other than the transfer of the
Receivables to the Seller and the Administrator under the Purchase and Sale
Agreement and this Agreement, respectively, and/or the security interest granted
to the Seller and the Administrator pursuant to the Purchase and Sale Agreement
and this Agreement, respectively, neither the Seller nor any Originator has
pledged, assigned, sold, granted a security interest in, or otherwise conveyed
any of the Receivables transferred or purported to be transferred under the
Transaction Documents, the Lock-Box Accounts or any subaccount thereof, except
for any such pledge, grant or other conveyance which has been released or
terminated. 

 

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Neither any of the Originators nor the Seller has authorized the filing of, or
is aware of any financing statements or mortgage against either the Seller, any
Originator or any of their properties that include a description of Receivables
transferred or purported to be transferred under the Transaction Documents, the
Lock-Box Accounts or any subaccount thereof, other than any financing statement
(i) relating to the sale thereof by an Originator to the Seller under the
Purchase and Sale Agreement, (ii) relating to the security interest granted to
the Administrator under this Agreement, or (iii) that has been released or
terminated.

 

(ii)                                  The Seller is not aware of any judgment,
ERISA or tax lien filings against either the Seller, the Servicer or any
Originator, other than any judgment, ERISA or tax lien filing that (A) has not
been outstanding for greater than 30 days from the earlier of such Person’s
knowledge or notice thereof, (B) is less than $250,000 and (C) does not
otherwise give rise to a Termination Event under clause (k) of Exhibit V to the
Agreement.

 

(iii)                               The Lock-Box Accounts are not in the name of
any person other than the Seller or the Administrator.  Neither the Seller nor
the Servicer has consented to any bank maintaining such account to comply with
instructions of any person other than the Administrator and, prior to the
occurrence and continuation of a Termination Event and the delivery of a notice
of control by the Administrator, the Servicer.

 

(d)                                 Survival of Supplemental Representations. 
Notwithstanding any other provision of this Agreement or any other Transaction
Document, the representations contained in this Section shall be continuing, and
remain in full force and effect until such time as the Purchased Interest and
all other obligations under this Agreement have been finally and fully paid and
performed.

 

4.                                      Ordinary Course of Business.  The Seller
represents and warrants that each remittance of Collections by or on behalf of
the Seller to the Administrator and the Purchasers under this Agreement will
have been (i) in payment of a debt incurred by the Seller in the ordinary course
of business or financial affairs of the Seller and (ii) made in the ordinary
course of business or financial affairs of the Seller.

 

5.                                      Reaffirmation of Representations and
Warranties.  On the date of each Purchase hereunder, and on the date each
Information Package or Interim Report is delivered to the Administrator, any
Purchaser Agent or any Purchaser hereunder, the Seller and the Servicer, by
accepting the proceeds of such Purchase and/or the provision of such Information
Package or Interim Report, shall each be deemed to have certified that (i) all
representations and warranties of the Seller and the Servicer, as applicable,
described in this Exhibit III, as from time to time amended in accordance with
the terms hereof, are correct on and as of such day as though made on and as of
such day, except for representations and warranties which apply as to an earlier
date (in which case such representations and warranties shall be true and
correct as of such date), and (ii) no event has occurred and is continuing, or
would result from any such Purchase, which constitutes a Termination Event or an
Unmatured Termination Event.

 

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EXHIBIT IV
COVENANTS

 

1.                                      Covenants of the Seller.  At all times
from the Closing Date until the Final Payout Date:

 

(a)                                 Financial Reporting.  The Seller will
maintain a system of accounting established and administered in accordance with
generally accepted accounting principles as in effect in the appropriate
jurisdiction, and the Seller (or the Servicer on its behalf) shall furnish to
the Administrator and each Purchaser Agent:

 

(i)                                     Annual Reporting.  Promptly upon
completion and in no event later than 120 days after the close of each fiscal
year of the Seller, annual unaudited financial statements of the Seller
certified by a designated financial or other officer of the Seller.

 

(ii)                                  Reports.  (A) As soon as available and in
any event not later than two Business Days prior to the Settlement Date, an
Information Package as of the most recently completed calendar month, (B) at any
time during the continuance of a Level I Minimum Liquidity Period, as soon as
available and in any event not later than the third Business Day of each
calendar week, a Weekly Report as of the most recently completed calendar week
and (C) at any time during the continuance of a Level II Minimum Liquidity
Period, a Daily Report on each Business Day as of the date that is one Business
Day prior to such date: provided, that the enhanced reporting obligations set
forth in clauses (B) and (C) hereof shall only take effect on the seventh
Business Day following the Administrator’s delivery of notice to the Servicer
that such enhanced reporting obligations are then in effect (which notice may be
revoked and reinstated at any time at the Administrator’s sole discretion). 
Each Information Package and Interim Report shall report Liquidity as of the
applicable Liquidity Reporting Date.

 

(iii)                               Other Information.  Such other information
(including non-financial information) as the Administrator or any Purchaser
Agent may from time to time reasonably request, within a reasonable time after
such request is received.

 

(iv)                              Quarterly Financial Statements of the Parent. 
As soon as available and in no event later than 45 days following the end of
each of the first three fiscal quarters in each of the Parent’s fiscal years,
(i) the unaudited consolidated balance sheet and statements of income of the
Parent and its consolidated Subsidiaries as at the end of such fiscal quarter
and the related unaudited consolidated statements of earnings and cash flows for
such fiscal quarter and for the elapsed portion of the fiscal year ended with
the last day of such fiscal quarter, in each case setting forth comparative
figures for the corresponding fiscal quarter in the prior fiscal year, all of
which shall be certified by the chief financial officer, the treasurer or any
financial officer (including a controller) of the Parent that they fairly
present in all material respects, in accordance with generally accepted
accounting principles as in effect in the United States consistently applied,
the financial condition of the Parent and its consolidated Subsidiaries as of
the dates indicated and the results of their operations for the periods
indicated, subject to normal year-end audit adjustments and the absence of
footnotes, and (ii) management’s

 

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discussion and analysis of the important operational and financial developments
during such fiscal quarter.

 

(v)                                 Annual Financial Statements of the Parent. 
Within 90 days after the close of each of the Parent’s fiscal years, the
consolidated balance sheet of the Parent and its consolidated Subsidiaries as at
the end of such fiscal year and the related consolidated statements of earnings
and cash flows for such fiscal year setting forth comparative figures for the
preceding fiscal year, all reported on by independent certified public
accountants of recognized national standing (without a “going concern” or like
qualification or exception) to the effect that such consolidated financial
statements present fairly in all material respects the financial condition and
results of operations of the Parent and its Subsidiaries on a consolidated basis
in accordance with generally accepted accounting principles as in effect in the
United States consistently applied.

 

(vi)                              Other Reports and Filings.  Promptly (but in
any event within ten days) after the filing or delivery thereof, copies of all
financial information, proxy materials and reports, if any, which the Parent or
any of its consolidated Subsidiaries shall publicly file with the SEC or deliver
to holders (or any trustee, agent or other representative therefor) of any of
its material indebtedness pursuant to the terms of the documentation governing
the same.

 

(vii)                           Electronic Delivery.  Notwithstanding anything
herein to the contrary, any financial information, proxy statements or other
material required to be delivered pursuant to this paragraph (a) shall be deemed
to have been furnished to each of the Administrator and each Purchaser Agent on
the date that such report, proxy statement or other material is posted on the
SEC’s website at www.sec.gov or on the Parent’s website at
www.cloudpeakenergy.com.

 

(b)                                 Notices.  The Seller (or the Servicer on its
behalf) will notify the Administrator and each Purchaser Agent in writing of any
of the following events promptly upon (but in no event later than three Business
Days after) a Financial Officer or other officer of Cloud Peak or the Seller who
is involved in the on-going administration of the transactions contemplated
under the Transaction Documents learning of the occurrence thereof, with such
notice describing the same, and if applicable, the steps being taken by the
Person(s) affected with respect thereto:

 

(i)                                     Notice of Termination Events or
Unmatured Termination Events.  A statement of a Financial Officer of the Seller
setting forth details of any Termination Event or Unmatured Termination Event
and the action which the Seller proposes to take with respect thereto.

 

(ii)                                  Representations and Warranties.  The
failure of any representation or warranty to be true in any material respect
(when made or at any time thereafter) with respect to the Receivables included
in the Receivables Pool.

 

(iii)                               Litigation.  The institution of any
litigation, arbitration proceeding or governmental proceeding which may have a
Material Adverse Effect.

 

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(iv)                              Adverse Claim.  (A) Any Person shall obtain an
Adverse Claim (other than a Permitted Lien) upon the Pool Receivables or
Collections with respect thereto, (B) any Person other than the Seller, the
Servicer or the Administrator shall obtain any rights or direct any action with
respect to any Lock-Box Account (or related lock-box or post office box) or
(C) any Obligor shall receive any change in payment instructions with respect to
Pool Receivable(s) from a Person other than the Servicer or the Administrator.

 

(v)                                 ERISA and Other Claims.  Promptly after the
filing or receiving thereof, copies of all reports and notices that the Seller
or any ERISA Affiliate files under ERISA with the Internal Revenue Service, the
Pension Benefit Guaranty Corporation or the U.S. Department of Labor or that the
Seller or any Affiliate receives from any of the foregoing or from any
multiemployer plan (within the meaning of Section 4001(a)(3) of ERISA) to which
the Seller or any of its Affiliates is or was, within the preceding five years,
a contributing employer, in each case in respect of any Reportable Event (as
defined in ERISA) that could, in the aggregate, result in the imposition of
liability on the Seller and/or any such Affiliate that could reasonably be
expected to have a Material Adverse Effect.

 

(c)                                  Conduct of Business.  The Seller will carry
on and conduct its business in substantially the same manner and in
substantially the same fields of enterprise as it is presently conducted and
will do all things necessary to remain duly organized, validly existing and in
good standing as a domestic organization in its jurisdiction of organization and
maintain all requisite authority to conduct its business in each jurisdiction in
which its business is conducted if the failure to have such authority could
reasonably be expected to have a Material Adverse Effect.

 

(d)                                 Compliance with Laws.  The Seller will
comply with all laws, rules, regulations, orders, writs, judgments, injunctions,
decrees or awards to which it may be subject if the failure to comply could
reasonably be expected to have a Material Adverse Effect.

 

(e)                                  Furnishing of Information and Inspection of
Receivables.  The Seller will furnish to the Administrator, the LC Bank and each
Purchaser Agent from time to time such information with respect to the Pool
Receivables as the Administrator, the LC Bank or such Purchaser Agent may
reasonably request.  The Seller will, at the Seller’s expense, at any time and
from time to time during regular business hours with reasonable prior written
notice (i) permit the Administrator, the LC Bank or any Purchaser Agent, or
their respective agents or representatives, (A) to examine and make copies of
and abstracts from all books and records relating to the Pool Receivables or
other Pool Assets and (B) to visit the offices and properties of the Seller for
the purpose of examining such books and records, and to discuss matters relating
to the Pool Receivables, other Pool Assets or the Seller’s performance hereunder
or under the other Transaction Documents to which it is a party with any of the
officers, directors, employees or independent public accountants of the Seller
(provided that representatives of the Seller are present during such
discussions) having knowledge of such matters; provided that the Seller shall be
required to reimburse the Administrator, the LC Bank and Purchaser Agents for
only two (2) such examinations and visits per year, unless a Termination Event
has occurred and is continuing and (ii) without limiting the provisions of
clause (i) above, from time to time during regular business hours, at the
Seller’s expense, upon reasonable prior written notice from the Administrator,
the LC Bank and the Purchaser Agents, permit certified public accountants or

 

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other auditors acceptable to the Administrator to conduct a review of its books
and records with respect to the Pool Receivables; provided that the Seller shall
be required to reimburse the Administrator and Purchaser Agents for only (x) one
such audit per year or (y) during a Level I Minimum Liquidity Period, two
(2) such audits per year, in either case unless a Termination Event has occurred
and is continuing.

 

(f)                                   Payments on Receivables, Lock-Box
Accounts.  The Seller (or the Servicer on its behalf) will, and will cause each
Originator and the Servicer to, at all times instruct all Obligors to deliver
payments on the Pool Receivables to a Lock-Box Account.  The Seller (or the
Servicer on its behalf) will, and will cause each Originator to, at all times,
maintain such books and records necessary to identify Collections received from
time to time on Receivables and to segregate such Collections from other
property of the Servicer and the Originator.  If any such payments or other
Collections are received by the Seller or any Originator, Seller shall (or shall
cause such Person to) hold such payments in trust for the benefit of the
Administrator and the Purchasers and promptly (but in any event within two
Business Days after receipt) remit such funds into a Lock-Box Account.  The
Seller will cause each Lock-Box Bank to comply with the terms of each applicable
Lock-Box Agreement.  Except as set forth in the following paragraphs, the Seller
will not permit the funds other than Collections on Pool Receivables and other
Pool Assets to be deposited into any Lock-Box Account.  If such funds are
nevertheless deposited into any Lock-Box Account, the Seller shall (or shall
cause the Servicer to) promptly identify such funds for segregation.  Except as
set forth in the following paragraphs, the Seller will not, and will not permit
the Servicer, any Originator or other Person to, commingle Collections or other
funds to which the Administrator, any Purchaser Agent or any Purchaser is
entitled with any other funds.  The Seller shall only add or replace, and shall
only permit the Originator to add or replace, a Lock-Box Bank (or the related
lock-box or post office box), or Lock-Box Account to those listed on Schedule II
to this Agreement, if the Administrator has received notice of such addition or
replacement, a copy of any new Lock-Box Agreement and an executed and
acknowledged copy of a Lock-Box Agreement in form and substance acceptable to
the Administrator from any such new Lock-Box Bank.  The Seller shall only
terminate a Lock-Box Bank or close a Lock-Box Account (or the related lock-box
or post office box), upon 30 days’ advance notice to and with the prior written
consent of the Administrator.

 

(g)                                  Sales, Liens, etc.  Except as otherwise
provided herein, the Seller will not sell, assign (by operation of law or
otherwise) or otherwise dispose of, or create or suffer to exist any Adverse
Claim (other than Permitted Liens) upon (including, without limitation, the
filing of any financing statement) or with respect to, any Pool Receivable or
other Pool Asset, or assign any right to receive income in respect thereof .

 

(h)                                 Extension or Amendment of Pool Receivables. 
Except as otherwise permitted in Section 4.2 of this Agreement, the Seller will
not extend, amend or otherwise modify the terms of any Pool Receivable, other
than in accordance with the Credit and Collection Policy, or amend, modify or
waive in material respect any term or condition of any Contract related thereto,
without the prior written consent of the Administrator.  The Seller shall at its
expense, timely perform and comply with all material provisions, covenants and
other promises, if any, required to be observed by it under the Contracts
related to the Pool Receivables, and timely and fully comply in all material
respects with the Credit and Collection Policy with regard to each Receivable
and the related Contract.

 

IV-4

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(i)            Change in Business.  The Seller will not (i) make any change in
the character of its business, which change would materially and adversely
impair the collectibility of any Pool Receivable or (ii) make any change in any
Credit and Collection Policy that could reasonably be expected to materially
adversely affect the collectibility of the Pool Receivables, the enforceability
of any related Contract or its ability to perform its obligations under the
related Contract or the Transaction Documents, in the case of either (i) or
(ii) above, without the prior written consent of the Administrator.  The Seller
shall not make any change in any Credit and Collection Policy without giving
prior written notice thereof to the Administrator.

 

(j)            Fundamental Changes.  The Seller shall not, without the prior
written consent of the Administrator and the Majority Purchaser Agents, permit
(i) itself to merge or consolidate with or into, or convey, transfer, lease or
otherwise dispose of (whether in one transaction or in a series of transactions)
all or substantially all of its assets (whether now owned or hereafter acquired)
to, any Person or (ii) a Change of Control described in clause (a) of the
definition thereof.  The Seller shall provide the Administrator and each
Purchaser Agent with at least 30 days’ prior written notice before making any
change in the Seller’s name, location or making any other change in the Seller’s
identity or corporate structure that could impair or otherwise render any UCC
financing statement filed in connection with this Agreement “seriously
misleading” as such term (or similar term) is used in the applicable UCC; each
notice to the Administrator and the Purchaser Agents pursuant to this sentence
shall set forth the applicable change and the proposed effective date thereof. 
The Seller will also maintain and implement (or cause the Servicer to maintain
and implement) administrative and operating procedures (including an ability to
recreate records evidencing Pool Receivables and related Contracts in the event
of the destruction of the originals thereof), and keep and maintain (or cause
the Servicer to keep and maintain) all documents, books, records, computer tapes
and disks and other information reasonably necessary or advisable in the
reasonable discretion of the Seller for the collection of all Pool Receivables
(including records adequate to permit the daily identification of each Pool
Receivable and all Collections of and adjustments to each existing Pool
Receivable).

 

(k)           Change in Payment Instructions to Obligors.  The Seller shall not
(and shall not permit any Originator to) add to, replace or terminate any of the
Lock-Box Accounts (or any related lock-box or post office box) listed in
Schedule II hereto or make any change in its (or their) instructions to the
Obligors regarding payments to be made to the Lock-Box Accounts (or any related
lock-box or post office box), unless the Administrator shall have received
(x) prior written notice of such addition, termination or change and (y) signed
and acknowledged Lock-Box Agreements with respect to such new Lock-Box Accounts
(or any related lock-box or post office box).

 

(l)            Ownership Interest, Etc.  The Seller shall (and shall cause the
Servicer to), at its expense, take all action necessary or desirable to
establish and maintain a valid and enforceable first priority perfected
undivided percentage ownership or security interest, to the extent of the
Purchased Interest, in the Pool Receivables, the Related Security and
Collections with respect thereto, and a first priority perfected security
interest in the Pool Assets, in each case free and clear of any Adverse Claim
(other than Permitted Liens), in favor of the Administrator (on behalf of the
Purchasers), including taking such action to perfect, protect or more fully
evidence the interest of the Administrator (on behalf of the Purchasers) as the
Administrator or any Purchaser Agent, may reasonably request.

 

IV-5

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(m)          Certain Agreements.  Without the prior written consent of the
Administrator and the Majority Purchaser Agents, the Seller will not amend,
modify, waive, revoke or terminate any Transaction Document to which it is a
party or any provision of the Seller’s organizational documents.

 

(n)           Restricted Payments.  (i)  Except pursuant to clause (ii) below,
the Seller will not: (A) purchase or redeem any shares of its membership
interest, (B) declare or pay any dividend or set aside any funds for any such
purpose, (C) prepay, purchase or redeem any Debt, (D) lend or advance any funds
or (E) repay any loans or advances to, for or from any of its Affiliates (the
amounts described in clauses (A) through (E) being referred to as “Restricted
Payments”).

 

(ii)           Subject to the limitations set forth in clause (iii) below, the
Seller may make Restricted Payments so long as such Restricted Payments are made
only in one or more of the following ways: (A) the Seller may make cash payments
(including prepayments) on the Subordinated Note in accordance with their
respective terms, and (B) if no amounts are then outstanding under any
Subordinated Note, the Seller may declare and pay dividends.

 

(iii)          The Seller may make Restricted Payments only out of the funds, if
any, it receives pursuant to Sections 1.4(b)(ii) and (iv) and 1.4(d) of this
Agreement. Furthermore, the Seller shall not pay, make or declare: (A) any
dividend if, after giving effect thereto, the Tangible Net Worth of the Seller
would be less than $6,000,000, or (B) any Restricted Payment (including any
dividend) if, after giving effect thereto, any Termination Event or Unmatured
Termination Event shall have occurred and be continuing.

 

(o)           Other Business.  The Seller will not: (i) engage in any business
other than the transactions contemplated by the Transaction Documents,
(ii) create, incur or permit to exist any Debt of any kind (or cause or permit
to be issued for its account any letters of credit or bankers’ acceptances)
other than pursuant to this Agreement or the Subordinated Note, or (iii) form
any Subsidiary or make any investments in any other Person; provided, that the
Seller shall be permitted to incur minimal obligations to the extent necessary
for the day-to-day operations of the Seller (such as expenses for stationery,
audits, maintenance of legal status, etc.).

 

(p)           Use of Seller’s Share of Collections.  The Seller shall apply the
Seller’s Share of Collections to make payments in the following order of
priority: (i) the payment of its expenses (including all obligations payable to
the Purchasers, the Purchaser Agents and the Administrator under this Agreement
and under the Purchaser Group Fee Letters), (ii) the payment of accrued and
unpaid interest on the Subordinated Note and (iii) other legal and valid
corporate purposes.

 

(q)           Tangible Net Worth.  The Seller will not permit its Tangible Net
Worth, at any time, to be less than $6,000,000.

 

(r)            Anti-Money Laundering/International Trade Law Compliance.  The
Seller will not become a Sanctioned Person.  Neither the Parent or its
Subsidiaries, either in its own right or through any third party, will (a) have
any of its assets in a Sanctioned Country or in the possession, custody or
control of a Sanctioned Person in violation of any Anti-Terrorism Law;

 

IV-6

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(b) do business in or with, or derive any of its income from investments in or
transactions with, any Sanctioned Country or Sanctioned Person in violation of
any Anti-Terrorism Law; (c) engage in any dealings or transactions prohibited by
any Anti-Terrorism Law or (d) use the proceeds of any Purchase to fund any
operations in, finance any investments or activities in, or, make any payments
to, a Sanctioned Country or Sanctioned Person in violation of any Anti-Terrorism
Law.  The funds used to repay Capital will not be derived from any activity in
violation of any Anti-Terrorism Law.  The Seller shall comply with all
Anti-Terrorism Laws.

 

(s)            Liquidity Coverage Ratio.  The Seller shall not issue any LCR
Security.

 

2.             Covenants of the Servicer.  At all times from the Closing Date
until the Final Payout Date:

 

(a)           Financial Reporting.  The Servicer will maintain a system of
accounting established and administered in accordance with generally accepted
accounting principles as in effect in the appropriate jurisdiction, and the
Servicer shall furnish or cause to be furnished to the Administrator and each
Purchaser Agent:

 

(i)            Reports.  (A) As soon as available and in any event not later
than two Business Days prior to the Settlement Date, an Information Package as
of the most recently completed calendar month, (B) at any time during the
continuance of a Level I Minimum Liquidity Period, as soon as available and in
any event not later than the third Business Day of each calendar week, a Weekly
Report as of the most recently completed calendar week and (C) at any time
during the continuance of a Level II Minimum Liquidity Period, a Daily Report on
each Business Day as of the date that is one Business Day prior to such date:
provided, that the enhanced reporting obligations set forth in clauses (B) and
(C) hereof shall only take effect on the seventh Business Day following the
Administrator’s delivery of notice to the Servicer that such enhanced reporting
obligations are then in effect (which notice may be revoked and reinstated at
any time at the Administrator’s sole discretion).  Each Information Package and
Interim Report shall report Liquidity as of the applicable Liquidity Reporting
Date.

 

(ii)           Other Information.  Such other information (including
non-financial information) as the Administrator or any Purchaser Agent may from
time to time reasonably request, within a reasonable time after such request is
received.

 

(iii)          Compliance Certificates.  (a) Concurrently with each delivery by
the Seller of the Parent’s quarterly and annual financial statements pursuant to
Sections 1(a)(iv) and 1(a)(v) of this Exhibit IV, a compliance certificate
substantially in the form attached as Annex G signed by its chief accounting
officer or treasurer solely in their capacities as officers of Cloud Peak
stating that no Termination Event or Unmatured Termination Event has occurred
and is continuing, or if any Termination Event or Unmatured Termination Event
has occurred and is continuing, stating the nature and status thereof.

 

IV-7

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(b)           Notices.  The Servicer will notify the Administrator and each
Purchaser Agent in writing of any of the following events promptly upon (but in
no event later than three Business Days after) a Financial Officer or other
officer of Cloud Peak or the Servicer who is involved in the on-going
administration of the transactions contemplated under the Transaction Documents
learning of the occurrence thereof, with such notice describing the same, and if
applicable, the steps being taken by the Person(s) affected with respect
thereto:

 

(i)            Notice of Termination Events or Unmatured Termination Events.  A
statement of the Financial Officer of the Servicer setting forth details of any
Termination Event or Unmatured Termination Event and the action which the
Servicer proposes to take with respect thereto.

 

(ii)           Representations and Warranties.  The failure of any
representation or warranty to be true in any material respect (when made or at
any time thereafter) with respect to the Pool Receivables.

 

(iii)          Litigation.  The institution of any litigation, arbitration
proceeding or governmental proceeding which could reasonably be expected to have
a Material Adverse Effect.

 

(iv)          Adverse Claim.  (A) Any Person shall obtain an Adverse Claim
(other than a Permitted Lien) upon the Pool Receivables or Collections with
respect thereto, (B) any Person other than the Seller, the Servicer or the
Administrator shall obtain any rights or direct any action with respect to any
Lock-Box Account (or related lock-box or post office box) or (C) any Obligor
shall receive any change in payment instructions with respect to Pool
Receivable(s) from a Person other than the Servicer or the Administrator.

 

(v)           Name Changes.  At least ten days before any change in any
Originator’s or the Seller’s name or any other change requiring the amendment of
UCC financing statements, a notice setting forth such changes and the effective
date thereof.

 

(vi)          Material Adverse Change.  A material adverse change in the
business, operations, property or financial or other condition of any
Originator, the Servicer or the Seller.

 

(c)           Conduct of Business.  The Servicer will do all things necessary to
remain duly organized, validly existing and in good standing as a domestic
limited liability company in its jurisdiction of formation and maintain all
requisite authority to conduct its business in each jurisdiction in which its
business is conducted if the failure to have such authority could reasonably be
expected to have a Material Adverse Effect.

 

(d)           Compliance with Laws.  The Servicer will comply with all laws,
rules, regulations, orders, writs, judgments, injunctions, decrees or awards to
which it may be subject if the failure to comply could reasonably be expected to
have a Material Adverse Effect.

 

(e)           Furnishing of Information and Inspection of Receivables.  The
Servicer will furnish to the Administrator and each Purchaser Agent from time to
time such information with respect to the Pool Receivables as the Administrator
or such Purchaser Agent may reasonably

 

IV-8

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request.  The Servicer will, at the Servicer’s expense, at any time and from
time to time during regular business hours with reasonable prior written notice
(i) permit the Administrator or any Purchaser Agent, or their respective agents
or representatives, (A) to examine and make copies of and abstracts from all
books and records relating to the Pool Receivables or other Pool Assets and
(B) to visit the offices and properties of the Servicer for the purpose of
examining such books and records, and to discuss matters relating to the Pool
Receivables, other Pool Assets or the Servicer’s performance hereunder or under
the other Transaction Documents to which it is a party with any of the officers,
directors, employees or independent public accountants of the Servicer (provided
that representatives of the Servicer are present during such discussions) having
knowledge of such matters; provided that the Servicer shall be required to
reimburse the Administrator and Purchaser Agents (x) one such audit per year or
(y) during a Level I Minimum Liquidity Period, for only two (2) such
examinations and visits per year, in either case unless a Termination Event has
occurred and is continuing and (ii) without limiting the provisions of clause
(i) above, during regular business hours, at the Servicer’s expense, upon
reasonable prior written notice from the Administrator, permit certified public
accountants or other auditors acceptable to the Administrator and the Purchaser
Agents to conduct, a review of its books and records with respect to the Pool
Receivables; provided that the Servicer shall be required to reimburse the
Administrator and Purchaser Agents for only two (2) such audits per year, unless
a Termination Event has occurred and is continuing.

 

(f)            Payments on Receivables, Lock-Box Accounts.  The Servicer will at
all times instruct all Obligors to deliver payments on the Pool Receivables to a
Lock-Box Account.  The Servicer will, at all times, maintain such books and
records necessary to identify Collections received from time to time on
Receivables and to segregate such Collections from other property of the
Servicer and the Originators.  If any such payments or other Collections are
received by the Servicer, it shall hold such payments in trust for the benefit
of the Administrator and the Purchasers and promptly (but in any event within
two Business Days after receipt) remit such funds into a Lock-Box Account.  The
Servicer will cause each Lock-Box Bank to comply with the terms of each
applicable Lock-Box Agreement.  Except as set forth in the following paragraphs,
the Servicer will not permit the funds other than Collections on Pool
Receivables and other Pool Assets to be deposited into any Lock-Box Account.  If
such funds are nevertheless deposited into any Lock-Box Account, the Servicer
will promptly identify such funds for segregation.  The Servicer will not
commingle Collections or other funds to which the Administrator, any Purchaser
Agent or any Purchaser is entitled hereunder with any other funds.  The Servicer
shall only add or replace, a Lock-Box Bank (or the related lock-box or post
office box), or Lock-Box Account to those listed on Schedule II to this
Agreement, if the Administrator has received notice of such addition or
replacement, a copy of any new Lock-Box Agreement and an executed and
acknowledged copy of a Lock-Box Agreement in form and substance acceptable to
the Administrator from any such new Lock-Box Bank.  The Servicer shall only
terminate a Lock-Box Bank or close a Lock-Box Account (or the related lock-box
or post office box), upon 30 days’ advance notice to and with the prior written
consent of the Administrator.

 

(g)           Extension or Amendment of Pool Receivables.  Except as otherwise
permitted in Section 4.2 of this Agreement, the Servicer will not extend, amend
or otherwise modify the terms of any Pool Receivable, or amend, modify or waive
in any material respect any term or condition of any Contract related thereto,
other than in accordance with the Credit and Collection Policy, without the
prior written consent of the Administrator. The Servicer shall at its

 

IV-9

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expense, timely perform and comply with all material provisions, covenants and
other promises required to be observed by it under the Contracts related to the
Pool Receivables to the same extent as it would had the Pool Receivables not
been sold to the Seller, and timely and fully comply in all material respects
with the Credit and Collection Policy with regard to each Pool Receivable and
the related Contract.

 

(h)           Change in Business.  The Servicer will not (i) make any change in
the character of its business, which change would materially and adversely
impair the collectibility of any Pool Receivable or (ii) make any change in any
Credit and Collection Policy that could reasonably be expected to materially and
adversely affect the collectibility of the Pool Receivables, the enforceability
of any related Contract or its ability to perform its obligations under the
related Contract or the Transaction Documents, in the case of either (i) or
(ii) above, without the prior written consent of the Administrator.  The
Servicer shall not make any material change in any Credit and Collection Policy
without giving prior written notice thereof to the Administrator.

 

(i)            Records.  The Servicer will maintain and implement administrative
and operating procedures (including an ability to recreate records evidencing
Pool Receivables and related Contracts in the event of the destruction of the
originals thereof), and keep and maintain all documents, books, records,
computer tapes and disks and other information reasonably necessary or advisable
for the collection of all Pool Receivables (including records adequate to permit
the daily identification of each Pool Receivable and all Collections of and
adjustments to each existing Pool Receivable).

 

(j)            Change in Payment Instructions to Obligors.  The Servicer shall
not add to, replace or terminate any of the Lock-Box Accounts (or any related
lock-box or post office box) listed in Schedule II hereto or make any change in
its instructions to the Obligors regarding payments to be made to the Lock-Box
Accounts (or any related lock-box or post office box), unless the Administrator
shall have received (x) prior written notice of such addition, termination or
change and (y) signed and acknowledged Lock-Box Agreements with respect to such
new Lock-Box Accounts (or any related lock-box or post office box).

 

(k)           Ownership Interest, Etc.  The Servicer shall, at its expense, take
all action necessary or desirable to establish and maintain a valid and
enforceable first priority perfected undivided percentage ownership or security
interest, to the extent of the Purchased Interest, in the Pool Receivables, the
Related Security and Collections with respect thereto, and a first priority
perfected security interest in the Pool Assets, in each case free and clear of
any Adverse Claim (other than Permitted Liens) in favor of the Administrator (on
behalf of the Purchasers), including taking such action to perfect, protect or
more fully evidence the interest of the Administrator (on behalf of the
Purchasers) as the Administrator or any Purchaser Agent, may reasonably
request.  In order to evidence the interests of the Administrator under this
Agreement, the Servicer shall, from time to time take such action, or execute
and deliver such instruments as may be necessary (including, without limitation,
such actions as are reasonably requested by the Administrator or any Purchaser
Agent) to maintain and perfect, as a first-priority interest, the
Administrator’s security interest in the Receivables, Related Security and
Collections.  The Servicer shall, from time to time and within the time limits
established by law, prepare and present to the Administrator for the
Administrator’s authorization and approval, all financing statements (including
fixture filings or as extracted collateral filings), amendments, continuations

 

IV-10

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or initial financing statements in lieu of a continuation statement, or other
filings necessary to continue, maintain and perfect the Administrator’s security
interest as a first-priority interest.  The Administrator’s approval of such
filings shall authorize the Servicer to file such financing statements under the
UCC without the signature of the Seller, any Originator or the Administrator
where allowed by applicable law.  Notwithstanding anything else in the
Transaction Documents to the contrary, the Servicer shall not have any authority
to file a termination, partial termination, release, partial release, or any
amendment that deletes the name of a debtor or excludes collateral of any such
financing statements, without the prior written consent of the Administrator.

 

(l)            Further Assurances; Change in Name or Jurisdiction of
Origination, etc.  The Servicer hereby authorizes and hereby agrees from time to
time, at its own expense, promptly to execute (if necessary) and deliver all
further instruments and documents, and to take all further actions, that may be
necessary or desirable, or that the Administrator may reasonably request, to
perfect, protect or more fully evidence the purchases made under this Agreement
and/or security interest granted pursuant to this Agreement or any other
Transaction Document, or to enable the Administrator (on behalf of the
Purchasers) to exercise and enforce their respective rights and remedies under
this Agreement or any other Transaction Document.  Without limiting the
foregoing, the Servicer hereby authorizes, and will, upon the request of the
Administrator, at the Servicer’s own expense, execute (if necessary) and file
such financing or continuation statements, or amendments thereto, and such other
instruments and documents, that may be necessary or desirable, or that the
Administrator may reasonably request, to perfect, protect or evidence any of the
foregoing.

 

(m)          Anti-Money Laundering/International Trade Law Compliance.  The
Servicer will not become a Sanctioned Person.  Neither the Parent or its
Subsidiaries, either in its own right or through any third party, will (a) have
any of its assets in a Sanctioned Country or in the possession, custody or
control of a Sanctioned Person in violation of any Anti-Terrorism Law; (b) do
business in or with, or derive any of its income from investments in or
transactions with, any Sanctioned Country or Sanctioned Person in violation of
any Anti-Terrorism Law; (c) engage in any dealings or transactions prohibited by
any Anti-Terrorism Law or (d) use the proceeds of any Purchase to fund any
operations in, finance any investments or activities in, or, make any payments
to, a Sanctioned Country or Sanctioned Person in violation of any Anti-Terrorism
Law.  The funds used to repay Capital will not be derived from any activity in
violation of any Anti-Terrorism Law.  The Servicer shall comply with all
Anti-Terrorism Laws.  The Servicer shall promptly notify the Administrator and
each Purchaser Agent in writing upon the occurrence of a Reportable Compliance
Event.

 

3.             Separate Existence.  Each of the Seller and the Servicer hereby
acknowledges that the Purchasers and the Administrator are entering into the
transactions contemplated by this Agreement and the other Transaction Documents
in reliance upon the Seller’s identity as a legal entity separate from Cloud
Peak, the Originators and their respective Affiliates.  Therefore, from and
after the date hereof, each of the Seller and the Servicer shall take all steps
specifically required by this Agreement to continue the Seller’s identity as a
separate legal entity and to make it apparent to third Persons that the Seller
is an entity with assets and liabilities distinct from those of Cloud Peak, the
Originators and any other Person, and is not a division of Cloud Peak, the
Originators or any other Person. Without limiting the generality of the
foregoing and in

 

IV-11

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addition to and consistent with the other covenants set forth herein, each of
the Seller and the Servicer shall take such actions as shall be required in
order that:

 

(a)           The Seller will be a limited liability company whose primary
activities are restricted in its operating agreement to: (i) purchasing or
otherwise acquiring from the Originators, owning, holding, granting security
interests or selling interests in Pool Assets, (ii) entering into agreements for
the selling and servicing of the Receivables Pool, and (iii) conducting such
other activities as it deems necessary or appropriate to carry out its primary
activities;

 

(b)           The Seller shall not engage in any business or activity, or incur
any indebtedness or liability (including, without limitation, any assumption or
guaranty of any obligation of Cloud Peak, any Originator or any Affiliate
thereof), other than as expressly permitted by the Transaction Documents;

 

(c)           (i) Not less than one member of the Seller’s board of managers or
other governing body (the “Independent Director”) shall be a natural person
(A) who is not at the time of initial appointment and has not been at any time
during the five (5) years preceding such appointment: (1) an equityholder,
director (other than the Independent Director), officer, employee, member,
manager, attorney or partner of Cloud Peak, Seller or any of their Affiliates;
(2) a customer of, supplier to or other person who derives more than 1% of its
purchases or revenues from its activities with Cloud Peak, Seller or any of
their Affiliates; (3) a person or other entity controlling, controlled by or
under common control with any such equity holder, partner, member, manager
customer, supplier or other person; or (4) a member of the immediate family of
any such equity holder, director, officer, employee, member, manager, partner,
customer, supplier or other person and (B) who has (x) prior experience as an
independent director for a corporation or an independent manager of a limited
liability company whose charter documents required the unanimous consent of all
independent director or independent managers thereof before such corporation
could consent to the institution of bankruptcy or insolvency proceedings against
it or could file a petition seeking relief under any applicable federal or state
law relating to bankruptcy and (y) at least three years of employment experience
with one or more entities that provide, in the ordinary course of their
respective businesses, advisory, management or placement services to issuers of
securitization or structured finance instruments, agreements or securities. 
Under this clause (c), the term “control” means the possession, directly or
indirectly, of the power to direct or cause the direction of management,
policies or activities of a Person, whether through ownership of voting
securities, by contract or otherwise.  (ii) The operating agreement of the
Seller shall provide that: (A) the Seller’s board of managers or other governing
body shall not approve, or take any other action to cause the filing of, a
voluntary bankruptcy petition with respect to the Seller unless the Independent
Director shall approve the taking of such action in writing before the taking of
such action, and (B) such provision and each other provision requiring an
Independent Director cannot be amended without the prior written consent of the
Independent Director;

 

(d)           The Independent Director shall not at any time serve as a trustee
in bankruptcy for the Seller, Cloud Peak, any Originator or any of their
respective Affiliates;

 

IV-12

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(e)           The Seller shall conduct its affairs strictly in accordance with
its organizational documents and observe all necessary, appropriate and
customary company formalities, including, but not limited to, holding all
regular and special members’ and board of managers’ meetings appropriate to
authorize all limited liability company action, keeping separate and accurate
minutes of its meetings, passing all resolutions or consents necessary to
authorize actions taken or to be taken, and maintaining accurate and separate
books, records and accounts, including, but not limited to, payroll and
intercompany transaction accounts;

 

(f)            Any employee, consultant or agent of the Seller will be
compensated from the Seller’s funds for services provided to the Seller, and to
the extent that Seller shares the same officers or other employees as Cloud Peak
or any Originator (or any other Affiliate thereof), the salaries and expenses
relating to providing benefits to such officers and other employees shall be
fairly allocated among such entities, and each such entity shall bear its fair
share of the salary and benefit costs associated with such common officers and
employees. The Seller will not engage any agents other than its attorneys,
auditors and other professionals, and a servicer and any other agent
contemplated by the Transaction Documents for the Receivables Pool, which
servicer will be fully compensated for its services by payment of the Servicing
Fee, and a manager, which manager will be fully compensated from the Seller’s
funds;

 

(g)           The Seller will contract with the Servicer to perform for the
Seller all operations required on a daily basis to service the Receivables Pool.
The Seller will pay the Servicer the Servicing Fee pursuant hereto. Except as
otherwise permitted by this Agreement, the Seller will not incur any material
indirect or overhead expenses for items shared with Cloud Peak or any
Originators (or any other Affiliate thereof) that are not reflected in the
Servicing Fee. To the extent, if any, that the Seller (or any Affiliate thereof)
shares items of expenses not reflected in the Servicing Fee or the manager’s
fee, such as legal, auditing and other professional services, such expenses will
be allocated to the extent practical on the basis of actual use or the value of
services rendered, and otherwise on a basis reasonably related to the actual use
or the value of services rendered; it being understood that Cloud Peak, in its
capacity as Servicer, shall pay all expenses relating to the preparation,
negotiation, execution and delivery of the Transaction Documents, including
legal, agency and other fees;

 

(h)           The Seller’s operating expenses will not be paid by Cloud Peak or
any Originator or any Affiliate thereof;

 

(i)            The Seller will have its own separate stationery;

 

(j)            The Seller’s books and records will be maintained separately from
those of Cloud Peak, each Originator and any other Affiliate thereof and in a
manner such that it will not be difficult or costly to segregate, ascertain or
otherwise identify the assets and liabilities of Seller;

 

(k)           All financial statements of Cloud Peak or any Originator or any
Affiliate thereof that are consolidated to include Seller will disclose that
(i) the Seller’s sole business consists of the purchase or acceptance through
capital contributions of the Receivables and Related Rights from such Originator
and the subsequent retransfer of or granting of a security interest in such
Receivables and Related Rights to certain purchasers party to this Agreement,
(ii) the Seller is a separate legal entity with its own separate creditors who
will be entitled, upon its liquidation, to

 

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be satisfied out of the Seller’s assets prior to any assets or value in the
Seller becoming available to the Seller’s equity holders and (iii) the assets of
the Seller are not available to pay creditors of Cloud Peak or any Originator or
any other Affiliates of Cloud Peak or any Originator;

 

(l)            The Seller’s assets will be maintained in a manner that
facilitates their identification and segregation from those of Cloud Peak, any
Originator or any Affiliates thereof;

 

(m)          The Seller will strictly observe corporate formalities in its
dealings with Cloud Peak, each Originator and any Affiliates thereof, and funds
or other assets of the Seller will not be commingled with those of Cloud Peak,
any Originator or any Affiliates thereof except as permitted by this Agreement
in connection with servicing the Pool Receivables. The Seller shall not maintain
joint bank accounts or other depository accounts to which Cloud Peak or any
Affiliate thereof (other than Cloud Peak in its capacity as the Servicer) has
independent access. The Seller is not named, and has not entered into any
agreement to be named, directly or indirectly, as a direct or contingent
beneficiary or loss payee on any insurance policy with respect to any loss
relating to the property of Cloud Peak, any Originator or any Subsidiaries or
other Affiliates thereof. The Seller will pay to the appropriate Affiliate the
marginal increase or, in the absence of such increase, the market amount of its
portion of the premium payable with respect to any insurance policy that covers
the Seller and such Affiliate;

 

(n)           The Seller will maintain arm’s-length relationships with Cloud
Peak, each Originator and any Affiliates thereof.  Any Person that renders or
otherwise furnishes services to the Seller will be compensated by the Seller at
market rates for such services it renders or otherwise furnishes to the Seller. 
Neither the Seller on the one hand, nor Cloud Peak or any Originator, on the
other hand, will be or will hold itself out to be responsible for the debts of
the other or the decisions or actions respecting the daily business and affairs
of the other. The Seller, Cloud Peak and each Originator will immediately
correct any known misrepresentation with respect to the foregoing, and they will
not operate or purport to operate as an integrated single economic unit with
respect to each other or in their dealing with any other entity;

 

(o)           The Seller shall have a separate area from Cloud Peak and each
Originator for its business (which may be located at the same address as such
entities) and to the extent that any other such entity has offices in the same
location, there shall be a fair and appropriate allocation of overhead costs
between them, and each shall bear its fair share of such expenses; and

 

(p)           To the extent not already covered in paragraphs (a) through
(o) above, Seller shall comply and/or act in accordance with the provisions of
Section 6.4 of the Purchase and Sale Agreement.

 

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EXHIBIT V

 

TERMINATION EVENTS

 

Each of the following shall be a “Termination Event”:

 

(a)           (i)            the Seller, Cloud Peak, any Originator or the
Servicer shall fail to perform or observe any term, covenant or agreement under
this Agreement or any other Transaction Document and, except as otherwise
provided herein, such failure shall, solely to the extent capable of cure,
continue for thirty days after the earlier of any such Person’s knowledge or
notice thereof or (ii) the Seller or the Servicer shall fail to make when due
any payment or deposit to be made by it under this Agreement or any other
Transaction Document and such failure shall remain unremedied for three Business
Days;

 

(b)           Cloud Peak (or any Affiliate thereof) shall fail to transfer to
any successor Servicer, when required, any rights pursuant to this Agreement
that Cloud Peak (or such Affiliate) then has as Servicer;

 

(c)           any representation or warranty made or deemed made by the Seller,
the Servicer or any Originator (or any of their respective officers) under or in
connection with this Agreement or any other Transaction Document, or any
information or report delivered by the Seller, the Servicer or any Originator
pursuant to this Agreement or any other Transaction Document, shall prove to
have been incorrect or untrue in any material respect when made or deemed made
or delivered and, if the representation or warranty is of a type that is capable
of being cured, shall remain incorrect or untrue for thirty days after the
earlier of such Person’s knowledge or notice thereof;

 

(d)           the Seller or the Servicer shall fail to deliver any Information
Package or Interim Report when due pursuant to this Agreement, and such failure
shall remain unremedied for two Business Days;

 

(e)           this Agreement (and each Lock-Box Agreement, as applicable) or any
purchase or reinvestment pursuant to this Agreement shall for any reason:
(i) cease to create, or the Purchased Interest shall for any reason cease to be,
a valid and enforceable first priority perfected undivided percentage ownership
or security interest to the extent of the Purchased Interest in each Pool
Receivable, the Related Security and Collections with respect thereto, free and
clear of any Adverse Claim (other than Permitted Liens), or (ii) cease to create
with respect to the Pool Assets, or the interest of the Administrator (for the
benefit of the Administrator, the Purchaser Agents and the Purchasers) with
respect to such Pool Assets shall cease to be, a valid and enforceable first
priority perfected security interest, free and clear of any Adverse Claim (other
than Permitted Liens);

 

(f)            (A) an involuntary proceeding shall be commenced or an
involuntary petition shall be filed seeking (i) liquidation, reorganization or
other relief in respect of the Seller, the Parent, Cloud Peak, the Servicer or
any Originator or its debts, or of a substantial part of its assets, under any
Federal, state or foreign bankruptcy, insolvency, receivership or similar law
now or hereafter in effect or (ii) the appointment of a receiver, trustee,
custodian, sequestrator, conservator or similar official for the Seller, the
Parent, Cloud Peak, the Servicer or any

 

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Originator or for a substantial part of its assets, and, in any such case, such
proceeding or petition shall continue undismissed for 60 days or an order or
decree approving or ordering any of the foregoing shall be entered, (B) the
Seller, the Parent, Cloud Peak, the Servicer or any Originator shall
(i) voluntarily commence any proceeding or file any petition seeking
liquidation, reorganization or other relief under any Federal, state or foreign
bankruptcy, insolvency, receivership or similar law now or hereafter in effect,
(ii) consent to the institution of, or fail to consent in a timely and
appropriate manner, any proceeding or petition described in clause (A) above,
(iii) apply for or consent to the appointment of a receiver, trustee, custodian,
sequestrator, conservator or similar official for the Seller, the Parent, Cloud
Peak, the Servicer or any Originator or for a substantial part of its assets,
(iv) file an answer admitting the material allegations of a petition filed
against it in any such proceeding, (v) make a general assignment for the benefit
of creditors or (vi) take any action for the purpose of effecting any of the
foregoing or (C) the Seller, the Parent, Cloud Peak, the Servicer or any
Originator shall become unable, admit in writing its inability or fail generally
to pay its debts as they become due,

 

(g)           any of the following shall occur:

 

(i)                                     the Default Ratio shall exceed 3.00%;

 

(ii)                                  the average Default Ratio for any three
consecutive calendar months shall exceed 2.00%;

 

(iii)                               the Delinquency Ratio shall exceed 4.50%;

 

(iv)                              the average Delinquency Ratio for any three
consecutive calendar months shall exceed 3.50%;

 

(v)                                 the average Dilution Ratio for any three
consecutive calendar months shall exceed 3.00%; or

 

(vi)                              the Days’ Sales Outstanding shall exceed 40
days;

 

(h)           a Change in Control shall occur;

 

(i)            the Purchased Interest shall exceed 100% for two (2) consecutive
Business Days;

 

(j)            (i) the Parent, Cloud Peak or any of their respective
Subsidiaries fail to pay any principal of or premium or interest on any Material
Debt when the same becomes due and payable (whether by scheduled maturity,
required prepayment, acceleration, demand or otherwise), which failure continues
after the applicable grace period, if any, specified in the related Material
Debt Agreement (whether or not such failure is waived under any related Material
Debt Agreement); (ii) any other event or condition occurs or exists under, and
continues to exist after the applicable grace period, in any, specified in, any
Material Debt Agreement, which event or condition gives the applicable
debtholders, lenders or counterparties the right (whether or not acted upon and
whether or not such failure is waived under any related Material Debt Agreement)
to (x) accelerate the maturity of the related Material Debt or otherwise cause
such Material Debt to be due and payable prior to scheduled maturity thereof or
(y) cause the early termination of any commitment of any such debtholder, lender
or counterparty under the

 

V-2

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such Material Debt Agreement prior to the scheduled termination of such
commitment; or (iii) any Material Debt shall be declared to be due and payable,
or required to be prepaid (other than by a regularly scheduled required
prepayment), redeemed, purchased or defeased, or an offer to repay, redeem,
purchase or defease such Debt shall be required to be made, in each case before
the stated maturity thereof;

 

(k)           either the Internal Revenue Service or the Pension Benefit
Guaranty Corporation shall have filed one or more notices of lien asserting a
claim or claims pursuant to the Internal Revenue Code, or ERISA, as applicable,
against the assets of Seller, any Originator, Cloud Peak or any ERISA Affiliate;
or

 

(l)            any Letter of Credit is drawn upon and is not fully reimbursed by
the Seller (whether by a Participation Advance or otherwise) within two
(2) Business Days from the date it is required to be reimbursed by the Seller
pursuant to Section 1.18(b).

 

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