Exhibit 10.1

 

EXECUTION VERSION

 

AMENDMENT NO. 1

 

This AMENDMENT No. 1 dated as of July 16, 2019 (this “Amendment”) to that
certain Amended and Restated Sale and Plan Support Agreement, dated as of May 9,
2019, is by and among (i) Cloud Peak Energy Inc. (“Parent”), Cloud Peak Energy
Resources LLC (“CPE Resources”) and Cloud Peak Energy Finance Corp. (the
“Co-Issuer” and, together with CPE Resources, collectively, the “Issuers”), and
the other direct and indirect subsidiaries of Parent that are party hereto (such
entities together with Parent and Issuers, the “Cloud Peak Entities” or the
“Company”); (ii) each holder of 2021 Notes Claims that are party hereto; and
(c) each holder of 2024 Notes Claims party hereto (collectively, the “Consenting
Noteholders) (as amended, supplemented, restated or otherwise modified from time
to time prior to the date hereof, the “Existing Agreement”).  Each of the Cloud
Peak Entities and the Consenting Noteholders are referred to herein individually
as a “Party,” and collectively as the “Parties.”

 

RECITALS:

 

WHEREAS, on May 6, 2019, the Parties entered into the original Plan and Sale
Support Agreement (the “Original Agreement”);

 

WHEREAS, on May 9, 2019, the Parties amended and restated the Original
Agreement, thereby effectuating the Existing Agreement;

 

WHEREAS, on May 10, 2019, the Cloud Peak Entities commenced voluntary cases (the
“Chapter 11 Cases”) under chapter 11 of title 11 of the United States Code in
the United States Bankruptcy Court for the District of Delaware (the “Bankruptcy
Court”);

 

WHEREAS, on June 11, 2019, the  Cloud Peak Entities filed in the Bankruptcy
Court the Motion of Debtors for Entry of an Order (I) Authorizing the Debtors to
Assume the Amended and Restated Sale and Plan Support Agreement, (II) Approving
the Lien and Guaranty Settlement Contained in the Amended and Restated Sale and
Plan Support Agreement, (III) Modifying the Automatic Stay, and (IV) Granting
Related Relief [ECF No. 258] seeking, inter alia, authorization to assume the
Existing Agreement (the “Motion”) and a proposed order granting the relief set
forth therein (the “Proposed Order”);

 

WHEREAS, the parties hereto desire to amend the Existing Agreement upon the
terms and conditions set forth herein; and

 

WHEREAS, the Consenting Noteholders party hereto constitute the Required
Consenting Noteholders (as defined in the Existing Agreement) able to effectuate
the amendments to the Existing Agreement set forth herein and such Consenting
Noteholders hereby notify the Cloud Peak Entities of their consent to this
Amendment.

 

1.                                      Defined Terms.  Capitalized terms used
and not otherwise defined herein have the meanings assigned to them in the
Existing Agreement, as amended hereby (the “Amended Agreement”).

 

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2.                                      Amendments.  Each party hereto agrees
that, effective on the Amendment Effective Date, the Existing Agreement shall be
amended as follows:

 

(a)                                 Each party hereto agrees that, effective on
the Amendment Effective Date, the Existing Agreement shall be amended (i) to
delete the stricken text (indicated textually in the same manner as the
following example: stricken text) and to add the double-underlined text
(indicated textually in the same manner as the following example:
double-underlined text) as set forth in the pages of the Existing Agreement
attached as Annex I hereto.

 

4.                                      Representations and Warranties.  Each
party hereto hereby represents and warrants that by its execution of this
Amendment, the undersigned officer on behalf of such party hereby certifies
that, as of the Amendment Effective Date, each such party (x) has the corporate
or other organizational power and authority to enter into this Amendment and to
perform its obligations under this Amendment, and (y) the execution, delivery
and performance of this Amendment are within such party’s corporate powers and
will not violate any such party’s charter or by-laws, any material agreement or
contract to which it or its property is bound or material law, rule, writ, order
or judgment to which such party or its property is subject or bound.

 

5.                              Conditions to Effectiveness.  This Amendment
shall become effective on the date (such date, the “Amendment Effective Date”)
that the following conditions have been satisfied:

 

(a)                                 The Bankruptcy Court shall have granted the
relief requested in the Motion and entered the Proposed Order in the Chapter 11
Cases, inter alia, authorizing the Cloud Peak Entities’ entry into the Amended
Agreement in form substantially identical to Annex I and approving the Lien and
Guarantee Settlement (as defined in the Existing Agreement).

 

(b)                                 The representations and warranties in
Section 4 of this Amendment shall be true and correct in all material respects
(or if qualified by “materiality,” “material adverse effect” or similar
language, in all respects (after giving effect to such qualification)) on the
Amendment Effective Date (or to the extent that such representations and
warranties specifically refer to an earlier date, such representations and
warranties shall have been true and correct in all material respects as of such
earlier date).

 

6.                                      Ratification.  Except to the extent
hereby amended, the Existing Agreement remains in full force and effect and are
hereby ratified and affirmed as of the Amendment.

 

7.                                      Miscellaneous.  This Amendment shall be
limited precisely as written and, except as expressly provided herein, shall not
be deemed to be a consent granted pursuant to, or a waiver or modification of,
any term or condition of the Existing Agreement or any of the instruments or
agreements referred to therein. Unless the context indicates otherwise, on and
after the Amendment Effective Date, whenever the Existing Agreement is referred
to in the Amended Agreement or any of the instruments, agreements or other
documents or papers

 

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executed or delivered in connection therewith, such reference shall be deemed to
mean the Amended Agreement.

 

8.                                      Counterparts.  This Amendment may be
executed in two or more counterparts, each of which shall constitute an original
but all of which, when taken together, shall constitute but one contract, and
shall become effective as provided in Section 10(h) of the Existing Agreement. 
Delivery of an executed counterpart to this Amendment by facsimile transmission
shall be as effective as delivery of a manually signed original.

 

9.                                      Governing Law.  THIS AMENDMENT AND ALL
ACTIONS ARISING UNDER THIS AMENDMENT SHALL BE GOVERNED BY, AND CONSTRUED IN
ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK AND (TO THE EXTENT
APPLICABLE) THE BANKRUPTCY CODE.

 

10.                               Entire Agreement.  This Amendment and the
Agreement constitute the entire agreement among the parties with respect to the
subject matter hereof and thereof and supersede all other prior agreements and
understandings, both written and verbal, among the parties or any of them with
respect to the subject matter hereof.

 

11.                               Severability.  In the event any one or more of
the provisions contained in this Amendment should be held invalid, illegal or
unenforceable in any respect, the validity, legality and enforceability of the
remaining provisions contained herein and therein shall not in any way be
affected or impaired thereby.  The parties shall endeavor in good-faith
negotiations to replace the invalid, illegal or unenforceable provisions with
valid provisions the economic effect of which comes as close as possible to that
of the invalid, illegal or unenforceable provisions.

 

12.                               Waiver of Jury Trial;
Jurisdiction.             The provision of Sections 18(m) of the Existing
Agreement shall apply to this Amendment, mutatis mutandis.

 

[Signature Pages Follow]

 

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IN WITNESS WHEREOF, the Parties hereto have caused this Agreement to be duly
executed and delivered by their respective duly authorized officers, all as of
the date and year first above written.

 

 

CLOUD PEAK ENERGY RESOURCES LLC,

 

as Issuer

 

 

 

 

By:

/s/ Bryan Pechersky

 

 

Bryan Pechersky

 

 

Executive Vice President, General Counsel and Corporate Secretary

 

 

 

CLOUD PEAK ENERGY FINANCE CORP.,

 

as Issuer

 

 

 

 

By:

/s/ Bryan Pechersky

 

 

Bryan Pechersky

 

 

Executive Vice President, General Counsel and Corporate Secretary

 

 

 

CLOUD PEAK ENERGY INC.,

 

as Parent

 

 

 

 

By:

/s/ Bryan Pechersky

 

 

Bryan Pechersky

 

 

Executive Vice President, General Counsel and Corporate Secretary

 

[Signature Page to Amendment to Amended and Restated Sale and Plan Support
Agreement]

 

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ARROWHEAD I LLC

 

ARROWHEAD II LLC

 

ARROWHEAD III LLC

 

YOUNGS CREEK HOLDINGS I LLC

 

YOUNGS CREEK HOLDINGS II LLC

 

YOUNGS CREEK MINING COMPANY, LLC

 

BIG METAL COAL CO. LLC

 

CORDERO MINING LLC

 

CORDERO MINING HOLDINGS LLC

 

CORDERO OIL AND GAS LLC

 

CABALLO ROJO LLC

 

CABALLO ROJO HOLDINGS LLC

 

NERCO LLC

 

NERCO COAL LLC

 

ANTELOPE COAL LLC

 

SPRING CREEK COAL LLC

 

NERCO COAL SALES LLC

 

PROSPECT LAND AND DEVELOPMENT LLC

 

CLOUD PEAK ENERGY LOGISTICS LLC

 

CLOUD PEAK ENERGY LOGISTICS I LLC

 

KENNECOTT COAL SALES LLC

 

RESOURCE DEVELOPMENT LLC

 

WESTERN MINERALS LLC

 

SEQUATCHIE VALLEY COAL CORPORATION

 

CLOUD PEAK ENERGY SERVICES COMPANY,

 

as Subsidiary Guarantors

 

 

 

 

 

/s/ Bryan Pechersky

 

Bryan Pechersky

 

Executive Vice President, General Counsel and Corporate Secretary

 

[Signature Page to Amendment No. 1]

 

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ALLIANZ GLOBAL INVESTORS U.S. LLC, in its capacity as investment manager,
investment adviser or investment sub-adviser and on behalf of the investment
vehicles identified below as Consenting Noteholders:

 

 

 

Allianz Short Duration High Yield Fund, a series of Allianz Global Investors
Trust

 

 

 

AllianzGI Short Duration High Income Fund, a series of Allianz Funds
Multi-Strategy Trust

 

 

 

Allianz Rendite Plus 2019

 

 

 

Allianz US Short Duration High Income Bond Fund, a sub-fund of Allianz Global
Investors Fund

 

 

 

 

 

 

By:

/s/ Steven Gish

 

 

Name: Steven Gish

 

 

Title: Director

 

 

 

 

 

Attn: Steven Gish

 

 

 

Tel:

 

 

 

Email:

 

 

 

Address:

 

Holdings

Principal Amount of 2021 Notes

Principal Amount of 2024 Notes

 

[Signature Page to Amendment to Amended and Restated Sale and Plan Support
Agreement]

 

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Arena Capital Advisors, LLC for and on behalf of the funds and accounts it
manages and as Consenting Noteholder

 

 

 

 

 

 

By:

/s/ Jeremy Sagi

 

 

Name: Jeremy Sagi

 

 

Title: CFO

 

 

 

 

 

Attn:

 

Title:

 

Tel:

 

Email:

 

Address:

 

Holdings

Principal Amount of 2021 Notes

Principal Amount of 2024 Notes

 

[Signature Page to Amendment No. 1]

 

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GRACE BROTHERS, LP, as Consenting Noteholder

 

 

 

 

By:

BRO-GP, LLC

 

 

A General Partner

 

 

 

 

By:

/s/ Bradford T. Whitmore

 

 

Name: Bradford T. Whitmore

 

 

Title: Manager

 

 

 

 

 

 

Attn:

Bradford T. Whitmore

 

Tel:

 

 

Email:

 

 

Address:

 

 

Holdings

Principal Amount of 2021 Notes

Principal Amount of 2024 Notes

 

[Signature Page to Amendment No. 1]

 

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TIAA Global Public Investments, LLC — Series High Yield, as Consenting
Noteholder

 

 

 

By: Teachers Advisors, LLC, its investment manager

 

 

 

 

 

 

By:

/s/ Ji Min Shin

AD

 

 

Name: Ji Min Shin

 

 

Title: Senior Director

 

 

 

 

 

 

Attn:

 

 

Tel:

 

 

Email:

 

 

Address:

 

 

Holdings

Principal Amount of 2021 Notes

Principal Amount of 2024 Notes

 

[Signature Page to Amendment No. 1]

 

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TIAA Global Public Investments, LLC — Series Loan, as Consenting Noteholder

 

 

 

By: Teachers Advisors, LLC, its investment manager

 

 

 

 

 

 

By:

/s/ Ji Min Shin

AD

 

 

Name: Ji Min Shin

 

 

Title: Senior Director

 

 

 

 

 

 

Attn:

 

 

Tel:

 

 

Email:

 

 

Address:

 

 

Holdings

Principal Amount of 2021 Notes

Principal Amount of 2024 Notes

 

[Signature Page to Amendment No. 1]

 

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TIAA-CREF Bond Plus Fund, as Consenting Noteholder

 

 

 

By: Teachers Advisors, LLC, its investment manager

 

 

 

 

 

 

By:

/s/ Ji Min Shin

AD

 

 

Name: Ji Min Shin

 

 

Title: Senior Director

 

 

 

 

 

 

Attn:

 

 

Tel:

 

 

Email:

 

 

Address:

 

 

Holdings

Principal Amount of 2021 Notes

Principal Amount of 2024 Notes

 

[Signature Page to Amendment No. 1]

 

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TIAA-CREF High Yield Fund, as Consenting Noteholder

 

 

 

By: Teachers Advisors, LLC, its investment manager

 

 

 

 

 

 

By:

/s/ Ji Min Shin

AD

 

 

Name: Ji Min Shin

 

 

Title: Senior Director

 

 

 

 

 

 

Attn:

 

 

Tel:

 

 

Email:

 

 

Address:

 

 

Holdings

Principal Amount of 2021 Notes

Principal Amount of 2024 Notes

 

[Signature Page to Amendment No. 1]

 

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Teachers Insurance and Annuity Association of America, as Consenting Noteholder

 

 

 

By: Nuveen Alternatives Advisors LLC, its investment manager

 

 

 

 

 

 

By:

/s/ Ji Min Shin

AD

 

 

Name: Ji Min Shin

 

 

Title: Senior Director

 

 

 

 

 

 

Attn:

 

 

Tel:

 

 

Email:

 

 

Address:

 

 

Holdings

Principal Amount of 2021 Notes

Principal Amount of 2024 Notes

 

[Signature Page to Amendment No. 1]

 

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WEXFORD SPECTRUM INVESTORS LLC, as Consenting Noteholder

 

 

 

 

By:

/s/ Paul Jacobi

 

 

Name: Paul Jacobi

 

 

Title: Vice President

 

 

 

WEXFORD CATALYST INVESTORS LLC, as Consenting Noteholder

 

 

 

 

By:

/s/ Paul Jacobi

 

 

Name: Paul Jacobi

 

 

Title: Vice President

 

 

 

DEBELLO INVESTORS LLC, as Consenting Noteholder

 

 

 

 

By:

/s/ Paul Jacobi

 

 

Name: Paul Jacobi

 

 

Title: Vice President

 

 

 

 

 

 

Attn:

Legal

 

Tel:

 

 

Email:

 

 

Address:

 

 

Holdings

Principal Amount of 2021 Notes

Principal Amount of 2024 Notes

 

[Signature Page to Amendment No. 1]

 

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Wolverine Flagship Fund Trading Limited, as Consenting Noteholder

 

 

 

 

 

 

By:

/s/ Kenneth L. Nadel

 

 

Name: Kenneth L. Nadel

 

 

Title: Authorized Signatory

 

 

 

 

 

Attn: Kenneth L. Nadel

 

Tel:

 

Email:

 

Address:

 

Holdings

Principal Amount of 2021 Notes

Principal Amount of 2024 Notes

 

[Signature Page to Amendment No. 1]

 

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EXECUTION VERSION

 

Annex I

 

Second Amended and Restated SAPSA

 

[See Attached]

 

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THIS SECOND AMENDED AND RESTATED SALE AND PLAN SUPPORT AGREEMENT IS NOT AN OFFER
WITH RESPECT TO ANY SECURITIES.  ANY SUCH OFFER OR SOLICITATION WILL COMPLY WITH
ALL APPLICABLE SECURITIES LAWS.  NOTHING CONTAINED IN THIS AMENDED AND RESTATED
SALE AND PLAN SUPPORT AGREEMENT SHALL BE AN ADMISSION OF FACT OR LIABILITY OR,
UNTIL THE OCCURRENCE OF THE AGREEMENT EFFECTIVE DATE ON THE TERMS DESCRIBED
HEREIN, DEEMED BINDING ON ANY OF THE PARTIES HERETO.

 

SECOND AMENDED AND RESTATED SALE AND PLAN SUPPORT AGREEMENT

 

This SECOND AMENDED AND RESTATED SALE AND PLAN SUPPORT AGREEMENT (as the same
may be amended, modified or supplemented from time to time in accordance with
the terms hereof, this “Agreement”), dated as of May 9July 16, 2019, is entered
into by and among:

 

(a)                                 Cloud Peak Energy Inc. (“Parent”), Cloud
Peak Energy Resources LLC (“CPE Resources”) and Cloud Peak Energy Finance Corp.
(the “Co-Issuer” and, together with CPE Resources, collectively, the “Issuers”),
and the other direct and indirect subsidiaries of Parent that are party hereto
(such entities together with Parent and Issuers, the “Cloud Peak Entities” or ,”
the “Company” or the “Debtors”);

 

(b)                                 each holder of 2021 Notes Claims (as defined
below) that is party hereto (the “Consenting 2021 Notes Holders”); and

 

(c)                                  each holder of 2024 Notes Claims (as
defined below) party hereto (the “Consenting 2024 Notes Holders” and, together
with the Consenting 2021 Notes Holders, the “Consenting Noteholders”).(1)

 

Each of the Cloud Peak Entities and the Consenting Noteholders are referred to
herein individually as a “Party”, and collectively as the “Parties.”

 

RECITALS

 

WHEREAS, certain Cloud Peak Entities issued notes pursuant to (i) that certain
Indenture, dated as of October 17, 2016 (as amended, modified, supplemented or
waived from time to time, the “2021 Notes Indenture”), by and among
Parent, Issuers, the Subsidiary Guarantors (as defined in the 2021 Notes
Indenture, the “Subsidiary Guarantors”) and Wilmington Trust, National
Association, as indenture trustee (the “2021 Notes Indenture Trustee”) (ii) that
certain First Supplemental Indenture, dated as of March 11, 2014 (as amended,
modified, supplemented or

 

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(1)              For the purposes of this Agreement, where the signature block
of a Party indicates that such Party enters into this Agreement on behalf of a
business unit, group, division or similar entity of such Party, or, in the case
a signatory is an investment manager or advisor that has been delegated
investment management authority over the applicable claims, “Consenting
Noteholder” shall mean, with respect to such Party, such business unit, group,
division or similar entity of such Party as defined in the signature block of
such Party, or, with respect to an investment manager or advisor, the holdings
over which such investment manager or advisor has been delegated investment
management authority.

 

17

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waived from time to time, the “2024 Notes Indenture”), by and among
Parent, Issuers, the Subsidiary Guarantors and Wells Fargo Bank, National
Association, as indenture trustee (the “2024 Notes Indenture Trustee”);

 

WHEREAS, (i) pursuant to Section 10.01 of the 2021 Notes Indenture, in addition
to Parent, the Subsidiary Guarantors (together with Parent, the “2021 Notes
Guarantors”) agreed to jointly and severally, and unconditionally guarantee the
payment of any notes issued under the 2021 Notes Indenture (the “2021 Notes
Subsidiary Guaranties”) and (ii) pursuant to Section 11.01 of the 2024 Notes
Indenture, in addition to Parent, the Subsidiary Guarantors (together with
Parent, the “Guarantors”) agreed to jointly, severally and unconditionally
guarantee the payment of any notes issued under the 2024 Notes Indenture (the
“2024 Notes Subsidiary Guaranties” and, together with the 2021 Notes Subsidiary
Guaranties, the “Subsidiary Guaranties”);

 

WHEREAS, pursuant to the Security Documents (as defined in the 2021 Notes
Indenture), including the Mortgages and the 2021 Notes Security Agreement (as
defined below), Parent, the Issuers, and the Subsidiary Guarantors granted
second-priority liens on substantially all of their respective assets (the
“Second Liens”) to the holders of notes issued pursuant to the 2021 Notes
Indenture (the “2021 Notes Holders”);

 

WHEREAS, as of the date of this Agreement, (i) notes in the aggregate principal
amount of $290,366,000 were outstanding pursuant to the 2021 Notes Indenture and
(ii) notes in the aggregate principal amount of $56,408,000 were outstanding
pursuant to the 2024 Notes Indenture;

 

WHEREAS, on November 15, 2018, (i) that certain Amended and Restated Credit
Agreement, dated as of May 24, 2018 (the “Credit Agreement”), by and among CPE
Resources, PNC Bank, National Association, as administrative agent (the “Credit
Agreement Agent”), the guarantors party thereto (the “Credit Agreement
Guarantors”) and the lenders party thereto was terminated and (ii) the
guarantees and liens securing obligations under the Credit Agreement granted by
CPE Resources and each Credit Agreement Guarantor under the Security Documents
(as defined in the Credit Agreement), including under any Mortgages (as defined
in the Credit Agreement) and the Amended and Restated Guarantee and Security
Agreement, dated as of May 24, 2018, by and among CPE Resources, the Credit
Agreement Agent and the Credit Agreement Guarantors, were released and
terminated, in each case, pursuant to that certain letter agreement, dated as of
November 15, 2018, by and among CPE Resources, the Credit Agreement Agent and
the Credit Agreement Guarantors (the “Release of Credit Agreement Obligations”);

 

WHEREAS, in its Form 10-K filed with the U.S. Securities and Exchange Commission
on March 15, 2019, Parent disclosed that the termination of the Credit Agreement
on November 15, 2018 may have resulted in a release of the 2021 Notes Subsidiary
Guaranties and the Second Liens granted by the Subsidiary Guarantors (the
“Subsidiary Liens”);

 

WHEREAS, the Consenting Noteholders dispute the view that the Release of Credit
Agreement Obligations resulted in the release of the 2021 Notes Subsidiary
Guaranties and the Subsidiary Liens (the “Lien and Guaranty Dispute”);

 

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WHEREAS, the Cloud Peak Entities have determined to commence voluntary cases
(the “Chapter 11 Cases”) under chapter 11 of title 11 of the United States Code
(as amended from time to time, the “Bankruptcy Code”), in the United States
Bankruptcy Court for the District of Delaware (the “Bankruptcy Court”) to
effectuate the Sale (as defined below) and distribute the proceeds thereof and
liquidate the Cloud Peak Entities’ estates pursuant to a plan of liquidation;

 

WHEREAS, in preparation for the commencement of the Chapter 11 Cases, the
Company conducted a process to obtain postpetition debtor-in-possession
financing which yielded proposals from potential third-party lenders and a
proposal from an ad hoc group of certain of the Consenting Noteholders;

 

WHEREAS, based on an analysis of the terms and conditions, expected time
required to close the financing, likelihood of closing, and amount of liquidity
offered under the debtor-in-possession financing proposals, the Company
initially determined that the proposals from the ad hoc group of Consenting
Noteholders and one of the potential third party lenders (the “Alternative
Lender”) were the most actionable and favorable proposals, and therefore, the
Company moved forward in negotiating the terms of each of the two proposals on
parallel paths and ultimately decided to proceed with the Alternative Lender’s
proposal;

 

WHEREAS, in full and final settlement of the Lien and Guaranty Dispute, the
Parties entered into the Original Agreement (as defined below) under which, in
exchange for, inter alia, the commitments of the Consenting Noteholders and the
Backup DIP Commitment Parties (as defined below) thereunder and in the Backup
DIP Facility Commitment Letter (as defined below), including the Backup DIP
Commitments (as defined below) the consent to use of Cash Collateral (as defined
below), consent to priming liens of the Alternative Lender under a proposed
Third Party DIP Facility (as defined below), and support of the Sale Process and
the Plan (each as defined below), the Subsidiary Guarantors reaffirmed the
Subsidiary Guaranties provided in the 2021 Notes Indenture and 2024 Notes
Indenture and the Subsidiary Liens provided in the Security Documents (as
defined in the 2021 Notes Indenture) irrespective of the Release of Credit
Agreement Obligations effective upon the date of the Original Agreement;

 

WHEREAS, after extensive good faith negotiations, it became clear that the
Alternative Lender’s proposed Third Party DIP Facility would likely provide less
liquidity than originally anticipated, and the Cloud Peak Entities reopened
discussions with the Backup DIP Commitment Parties, while continuing to
negotiate with the Alternative Lender, seeking for the Backup DIP Commitment
Parties to improve the terms of their commitment;

 

WHEREAS, the Backup DIP Commitment Parties have agreed to, and committed to
provide postpetition financing on, such improved terms, all as set forth in the
DIP Facility Commitment Letter (as defined below);

 

WHEREAS, the board of directors, board of managers, or equivalent governing
body, as applicable, of each of the Cloud Peak Entities has determined, after
receiving advice from counsel and other advisors, that the terms for
debtor-in-possession financing proposed by the Backup Commitment Parties in the
DIP Facility Commitment Letter are was superior to the terms proposed by the
Alternative Lender under the Third Party DIP Facility;and

 

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WHEREAS, the Parties now desire to amend and restate amended and restated the
Original Agreement and, as part of the compromise and settlement of the Lien and
Guaranty Dispute, in exchange for, inter alia, the commitments of the Consenting
Noteholders and the DIP Commitment Parties (as defined below) hereunder and in
the DIP Facility Commitment Letter, including the DIP Commitments (including the
greater than ratable commitment provided by that that certain Consenting 2024
Noteholder relative to its holdings of 2021 Notes Claims), the consent to use of
Cash Collateral (as defined below), and support of the Sale Process and the Plan
(each as defined below), the Subsidiary Guarantors agree agreed to reaffirm the
Subsidiary Guaranties provided in the 2021 Notes Indenture and 2024 Notes
Indenture and the Subsidiary Liens provided in the Security Documents (as
defined in the 2021 Notes Indenture) irrespective of the Release of Credit
Agreement Obligations;

 

WHEREAS, on May 10, 2019, the Cloud Peak Entities commenced voluntary cases (the
“Chapter 11 Cases”) under chapter 11 of title 11 of the United States Code (as
amended from time to time, the “Bankruptcy Code”), in the United States
Bankruptcy Court for the District of Delaware (the “Bankruptcy Court”) to
effectuate the Sale (as defined below) and distribute the proceeds thereof and
liquidate the Cloud Peak Entities’ estates pursuant to a plan of liquidation;

 

WHEREAS, on May 22, 2019, the United States Trustee issued a notice [ECF
No. 143], indicating that the Committee of Unsecured Creditors (the “Committee”)
had been appointed pursuant to section 1102(a)(1) of the Bankruptcy Code;

 

WHEREAS, on June 11, 2019, the Debtors filed the Motion of Debtors for Entry of
an Order (I) Authorizing the Debtors to Assume the Amended and Restated Sale and
Plan Support Agreement, (II) Approving the Lien and Guaranty Settlement
Contained in the Amended and Restated Sale and Plan Support Agreement,
(III) Modifying the Automatic Stay, and (IV) Granting Related Relief [ECF
No. 258] seeking authorization to assume the Amended and Restated Sale and Plan
Support Agreement and approval of the Lien and Guaranty Settlement; and

 

WHEREAS, the Committee supports the Debtors’ assumption of the First Amended and
Restated Agreement and the Lien and Guaranty Settlement, subject to the
amendment and restatement of the First Amended and Restated Agreement
contemplated in this Agreement occurring contemporaneously with the Bankruptcy
Court’s approval of such assumption, and has agreed that it shall support a
Plan, subject to its fiduciary duties, which for the avoidance of doubt
distributes Net Sale Proceeds in accordance with Section 4(c) hereof; provided
that such Plan shall be consistent with the terms hereof and otherwise
reasonably acceptable to the Committee;

 

NOW, THEREFORE, in consideration of the premises and agreements set forth
herein, and for other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the Parties, intending to be
legally bound, agree as follows:

 

Incorporation of Defined Terms.  Capitalized terms used and not defined or
otherwise specified in this Agreement shall have the meaning ascribed to them in
the DIP Credit Agreement (as defined below).

 

Definitions.  The following terms shall have the following definitions:

 

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“2021 Notes Claims” means all Claims (as defined below) of any kind whatsoever
arising under or related to the 2021 Notes Indenture and the other 2021 Notes
Documents.

 

“2021 Notes Documents” has the meaning set forth in the 2021 Notes Indenture.

 

“2021 Notes Guarantors” has the meaning set forth in the recitals hereto.

 

“2021 Notes Holders” has the meaning set forth in the recitals hereto.

 

“2021 Notes Indenture” has the meaning set forth in the recitals hereto.

 

“2021 Notes Indenture Trustee” has the meaning set forth in the recitals hereto.

 

“2021 Notes Security Agreement” means that certain Security Agreement dated as
of October 17, 2016 by the Issuers and the other grantors from time to time
party thereto in favor of Wilmington Trust, National Association, solely in its
capacity as collateral agent thereunder.

 

“2021 Notes Subsidiary Guaranties” has the meaning set forth in the recitals
hereto.

 

“2024 Notes Claims” means all claims of any kind whatsoever arising under the
2024 Notes Indenture and the other 2024 Note Documents.

 

“2024 Notes Documents” has the meaning set forth in the 2024 Indenture.

 

“2024 Notes Indenture” has the meaning set forth in the recitals hereto.

 

“2024 Notes Indenture Trustee” has the meaning set forth in the recitals hereto.

 

“2024 Notes Subsidiary Guaranties” has the meaning set forth in the recitals
hereto.

 

“Affiliate” means, with respect to any Person, any other Person which directly
or indirectly controls, or is under common control with, or is controlled by,
such Person.  As used in this definition, “control” (including, with its
correlative meanings, “controlled by” and “under common control with”) shall
mean, with respect to any Person, the possession, directly or indirectly, of
power to direct or cause the direction of management or policies (whether
through ownership of securities or partnership or other ownership interests, by
contract or otherwise) of such Person.

 

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

 

“Agreement Effective Date” has the meaning set forth in Section 6 hereof.

 

“Alternative Lender” has the meaning set forth in the recitals hereto.

 

“Alternative Transaction” means a transaction involving any or all of (i) a
chapter 11 plan or other financial and/or corporate restructuring of any or all
of the Cloud Peak Entities, (ii) the sale or disposition of any assets or equity
of a Cloud Peak Entity, (iii) a merger,

 

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consolidation, business combination, liquidation, any debt or equity refinancing
or recapitalization of any or all of the Cloud Peak Entities or (iv) any similar
transaction involving any or all of the Cloud Peak Entities, in each case other
than the Sale, the Plan, or any transactions contemplated by the Plan.

 

“Asset Purchase Agreement(s)” mean the purchase and sale agreement or agreements
executed in connection with any Sale.

 

“Assets” means all or substantially all of the assets of the Cloud Peak
Entities.

 

“Backup DIP Commitment Party” means each Consenting Noteholder that is
identified as a Backup DIP Commitment Party on Schedule 1 to the Backup DIP
Facility Commitment Letter.

 

“Backup DIP Commitments” means each Backup DIP Commitment Party’s Commitment as
set forth on Schedule 1 to the Backup DIP Facility Commitment Letter.

 

“Backup DIP Facility” means the debtor-in-possession financing facility that was
to be provided by the Backup DIP Commitment Parties (or their affiliates or
funds managed by them) or the joining creditors pursuant to the Original
Agreement on the terms and conditions set forth in the Backup DIP Facility Term
Sheet (as defined below) in the event the Third Party DIP Facility was not
entered into by the Company and approved by the Bankruptcy Court pursuant to the
DIP Order as contemplated in the Original Agreement.

 

“Backup DIP Facility Commitment Letter” means that certain Commitment Letter,
originally dated as of May 1, 2019, which was extended from time to time and a
copy of which was attached as Exhibit E to the Original Agreement.

 

“Backup DIP Facility Term Sheet” means the term sheet that was attached as
Exhibit A to the Backup DIP Facility Commitment Letter.

 

“Bankruptcy Code” has the meaning set forth in the recitals hereto.

 

“Bankruptcy Court” has the meaning set forth in the recitals hereto.

 

“Beneficial Ownership” means, with respect to any security, “beneficial
ownership” of such security as determined pursuant to Rule 13d-3 of the
Securities Exchange Act of 1934.

 

“Bidding Procedures” means the bidding procedures substantially in the form
attached hereto as Exhibit B.

 

“Bidding Procedures Order” means an order of the Bankruptcy Court, approving,
among other things, the Bidding Procedures.

 

“Business Day” means any day other than Saturday, Sunday and any day that is a
legal holiday or a day on which banking institutions in New York, New York are
authorized by law or other governmental action to close.

 

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“Carve-Out” has the meaning set forth in the DIP Order (as defined below).

 

“Carve-Out Reserve Account” has the meaning set forth in Section 4(c) hereof.

 

“Cash Collateral” means “cash collateral,” as defined in section 363 of the
Bankruptcy Code, in which the 2021 Notes Indenture Trustee or the Collateral
Agent (as defined in the 2021 Notes Indenture), as applicable, has a lien,
security interest or other interest (including, without limitation, any adequate
protection liens or security interests), in each case whether existing on the
Petition Date (as defined below), arising pursuant to the DIP Order or
otherwise, and which the Company shall be permitted to use in accordance with
the DIP Order.

 

“Chapter 11 Cases” has the meaning set forth in the recitals hereto.

 

“Claims” has the meaning assigned to such term in the Bankruptcy Code.

 

“Cloud Peak Entities” has the meaning set forth in the preamble hereof.

 

“Collateral” has the meaning given to it in the 2021 Notes Indenture.

 

“Company” has the meaning set forth in the preamble hereof.

 

“Confirmation Order” means an order of the Bankruptcy Court confirming the Plan.

 

“Consenting 2024 Notes Holders” has the meaning set forth in the preamble
hereof.

 

“Consenting Noteholders” has the meaning set forth in the preamble hereof.

 

“Credit Agreement” has the meaning set forth in the recitals hereto.

 

“Credit Agreement Agent” has the meaning set forth in the recitals hereto.

 

“Credit Agreement Guarantors” has the meaning set forth in the recitals hereto.

 

“Critical Vendor Order” means the Final Order (I) Authorizing the Debtors to Pay
Certain Prepetition Claims of Critical Vendors and (II) Granting Related Relief
[ECF No. 244].

 

“Critical Vendor Payments” means all payments that are authorized pursuant to
Critical Vendor Order up to the amount set forth therein.

 

“Davis Polk” means Davis Polk & Wardwell LLP, as counsel to the Consenting
Noteholders.

 

“Definitive Documents” has the meaning set forth in Section 3(a) hereof.

 

“DIP Commitment Party” means each Consenting Noteholder that is identified as a
DIP Commitment Party on Schedule 1 to the DIP Facility Commitment Letter.

 

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“DIP Commitments” means each DIP Commitment Party’s Commitment as set forth on
Schedule 1 to the DIP Facility Commitment Letter.

 

“DIP Credit Agreement” means that certain Superpriority Secured
Debtor-in-Possession Credit Agreement (as amended, supplemented or otherwise
modified from time to time in accordance with the terms thereof), in form and
substance acceptable to the DIP Commitment Parties, that shall have been
approved by the Bankruptcy Court pursuant to the DIP Order.

 

“DIP Facility” means the debtor-in-possession financing facility to be provided
by the DIP Commitment Parties (or their affiliates or funds managed by them) or
the joining creditors on the terms and conditions set forth in the DIP Credit
Agreement.

 

“DIP Facility Commitment Letter” means that certain Commitment Letter, dated as
of May 9, 2019, which may be extended from time to time and a copy of which is
attached hereto as Exhibit A.

 

“DIP New Money Claims” means any Claim held by the DIP Commitment Parties
arising on account of any new money loans New Money Loans (as defined in the DIP
Credit Agreement) provided to the Company pursuant to the DIP Credit Agreement
as approved by the Bankruptcy Court in the DIP Order.

 

“DIP Final Roll-Up AmountClaim” means the amount of any roll-up loans comprised
of a pro rata roll-up of prepetition 2021 Notes Claims any Claim held by the DIP
Commitment Parties or their respective affiliates in accordance with arising on
account of any Final Roll-up Loans (Second Borrowing) and Final Roll-Up Loans
(Third Borrowing) (each as defined in the DIP Credit Agreement) as approved by
the Bankruptcy Court in the DIP Order.

 

“DIP Contingent Roll-Up Claim” means any Claim held by the DIP Lenders (as
defined in the Final DIP Order) arising on account of any Contingent Roll-Up
Loan (as defined in the DIP Credit Agreement) as approved by the Bankruptcy
Court in the DIP Order.

 

“DIP Motion” means a motion filed by the Company in the Chapter 11 Cases seeking
the Bankruptcy Court’s entry of the Interim DIP Order and Final DIP Order, among
other things, approving the DIP Facility and allowing the use of Cash
Collateral.

 

“DIP Order” means the Interim DIP Order (as defined below) or the Final DIP
Order (as defined below), if such Final DIP Order shall have been entered by the
Bankruptcy Court.

 

“Exhibits and Schedules” has the meaning set forth in Section 15 hereof.

 

“Final DIP Order” means an order entered by the Bankruptcy Court in the Chapter
11 Cases approving the DIP Facility and granting any other relief requested in
the DIP Motion on a final basis.

 

“First Amended and Restated Agreement” means the First Amended and Restated Sale
and Plan Support Agreement dated as of May 9, 2019 by and among the Parties.

 

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“First Day Lien/Priority Claim Payments” means all payments that are authorized
pursuant to the Lien/Priority Claims Order, which for the avoidance of doubt
shall include claims arising under section 503(b)(9) of the Bankruptcy Code, up
to the amount set forth therein.

 

“First Day Pleadings” means any motions or other pleadings filed by any Cloud
Peak Entity seeking “first day” relief in the Chapter 11 Cases.

 

“Indenture Trustees” means the 2021 Notes Indenture Trustee and the 2024 Notes
Indenture Trustee, collectively.

 

“Interim DIP Order” means an order entered by the Bankruptcy Court in the
Chapter 11 Cases in form and substance reasonably acceptable to the Required
Consenting Noteholders approving the DIP Facility and granting any other relief
requested in the DIP Motion on an interim basis.

 

“Issuers” has the meaning set forth in the preamble hereof.

 

“KEIP/KERP Amounts” means all amounts contemplated to be paid under the
KEIP/KERP Plans.

 

“KEIP/KERP Plans” means, collectively, that certain Key Employee Retention Plan
adopted on January 23, 2019 and that certain Key Employee Incentive Plan adopted
on March 13, 2019.

 

“Lien and Guaranty Dispute” has the meaning set forth in the recitals hereof.

 

“Lien/Priority Claims Order” means the Final Order (I) Authorizing the Debtors
to Pay (A) Certain Prepetition Claims of Shippers, Warehousemen, and Service
Providers, (B) Claims Arising Under Section 503(b)(9) of the Bankruptcy Code,
and (C) Certain Royalty and Lease Obligations and (II) Granting Related Relief
[ECF No. 245].

 

“Net Sale Proceeds” means proceeds payable to the Company upon closing of a Sale
following deduction of (i) costs, fees, expenses, or commissions (including with
respect to any investment banking transaction fees or commissions) incurred in
connection therewith or relating thereto and (ii) an amount equal to any
break-up fee or expense reimbursement payable under any Asset Purchase
Agreement(s) due on account of such closing, as applicable, and which in each
case, if any, shall be paid directly from the applicable Prevailing Bidder(s) to
any applicable stalking horse purchaser under the applicable Asset Purchase
Agreement(s).

 

“Note Documents” means the 2021 Notes Documents and the 2024 Notes Documents,
collectively.

 

“Noteholders” means the 2021 Notes Holders and the 2024 Notes Holders,
collectively.

 

“Notes Claims” means the 2021 Notes Claims and the 2024 Notes Claims,
collectively.

 

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“Original Agreement” means the Sale and Plan Support Agreement dated as of
May 6, 2019 by and among the Parties.

 

“Parent” has the meaning set forth in the preamble hereof.

 

“Parties” has the meaning set forth in the preamble hereof.

 

“Person” means an individual, a partnership, a joint venture, a limited
liability company, a corporation, a trust, an unincorporated organization, a
group or any other legal entity or association.

 

“Permitted Transfer” has the meaning set forth in Section 14 hereof.

 

“Permitted Transferee” has the meaning set forth in Section 14 hereof.

 

“Petition Date” means the date the Chapter 11 Cases are commenced.

 

“Plan” means a chapter 11 plan of liquidation in form and substance reasonably
acceptable to the Company and the Required Consenting Noteholders and the
Committee that distributes Net Sale Proceeds in accordance with
Section 4(c) hereof and provides for , inter alia, (i) customary releases and
exculpations, including a release of the 2024 Notes Indenture Trustee, (ii) a
release of avoidance actions against holders of general unsecured claims against
the Cloud Peak Entities (to the extent not purchased and waived in connection
with any Sale), (iii) the payment of the reasonable and documented fees and
expenses of the 2024 Notes Indenture Trustee in an amount not to exceed an
amount to be agreed, (iv) the appointment of a general unsecured creditor claims
administrator selected by the Company and the Committee and (v) effectuates the
Unsecured Creditor Sharing Agreement.

 

“Prevailing Bidder(s)” means the Person(s) that is determined by the Company, in
consultation with the Required Consenting Noteholders, to have submitted the
highest or otherwise best bid(s) for the Assets at the conclusion of the Sale
Process.

 

“Qualified Marketmaker” has the meaning set forth in Section 14(b) hereof.

 

“Release of Credit Agreement Obligations” has the meaning set forth in the
recitals hereto.

 

“Required Consenting Noteholders” means the Consenting Noteholders holding a
majority in dollar amount of the outstanding principal amount of the 2021 Notes
Claims held by all Consenting Noteholders as determined at the time of such
consent.

 

“Sale” means the sale of substantially all of the Assets pursuant to, inter
alia, sections 105, 363 and 365 of the Bankruptcy Code, to the Prevailing
Bidder(s) in accordance with terms and conditions hereof.

 

“Sale Order” means the order or orders of the Bankruptcy Court which, among
other things, (i) approves any Sale, (ii) approves the assumption by the Company
(and, if applicable, assignment to the Prevailing Bidder(s)) of any
contract(s) pursuant to section 365 of

 

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the Bankruptcy Code, (iii) contains findings of fact and conclusions of law that
the Prevailing Bidder(s) is or are a good faith purchaser entitled to the
protections of section 363(m) of the Bankruptcy Code, and (iv) provides that Net
Sale Proceeds be distributed by the Company to the 2021 Notes Indenture Trustee
for distribution to the 2021 Notes Holders, upon the later of (1) consummation
of the applicable Asset Purchase Agreement(s) and (2) consummation of a chapter
11 plan of liquidation that distributes the Net Sale Proceeds in accordance with
and subject to Section 4(c) hereof.

 

“Sale Process” means the marketing process that the Company and its
professionals have commenced to solicit bids for the purchase of any or all of
the Assets.

 

“Second Liens” has the meaning set forth in the recitals hereto.

 

“Subsidiary Guarantors” has the meaning set forth in the recitals hereto.

 

“Subsidiary Liens” has the meaning set forth in the recitals hereto.

 

“Terminating Consenting Noteholders” has the meaning set forth in
Section 7(c) hereof.

 

“Termination Date” has the meaning set forth in Section 8 hereof.

 

“Termination Event” has the meaning set forth in Section 7 hereof.

 

“Third Party DIP Facility” means a postpetition debtor-in-possession financing
facility proposed to be provided by a third party lender on terms to be agreed
upon by the Company and such third party lender in connection with the Chapter
11 Cases and as contemplated in the Original Agreement.

 

“Transfer” has the meaning set forth in Section 14 hereof.

 

“Transfer Agreement” means the form attached hereto as Exhibit C or Exhibit D,
as applicable, as may be amended, modified or supplemented only in accordance
with Section 14 hereof.

 

“Unsecured Creditor Sharing Agreement” has the meaning set forth in
Section 4(e) hereof.

 

“Wind-Down Budget” means a budget negotiated in good faith among the Company and
the Required Consenting Noteholders to pay in full in cash all administrative
expense claims and priority claims that have not been paid in the ordinary
course of business or in connection with Sales that are supported by the
Required Consenting Noteholders and other reasonable fees, costs and expenses to
conclude the Chapter 11 Cases under a confirmed Plan following the consummation
of a Sale.

 

Obligations of the Parties.  Subject to the terms and conditions of this
Agreement, each of the Parties agrees as follows:

 

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(a)                                 to promptly negotiate, in good faith, the
definitive documents relating to the implementation and effectuation of the Sale
and the Plan, including, but not limited to:  (i) each Asset Purchase Agreement,
(ii) the Disclosure Statement, (iii) the Plan, (iv) the DIP Credit Agreement,
(v) the Interim DIP Order and the Final DIP Order, (vi) the Sale Order, (ix) the
Confirmation Order, (x) the Bidding Procedures Order, (xi) the Wind-Down Budget,
and (xii) all other agreements, documents, exhibits, annexes, schedules and any
orders of the Bankruptcy Court, as applicable, that are reasonably necessary or
appropriate for the prompt consummation of the Sale and the Plan, including
those motions and proposed court orders that the Company files on or after the
Petition Date and seeks to have heard on an expedited basis at the “first day
hearing” (all of the foregoing, collectively with this Agreement, in each case
as amended, modified or supplemented from time to time in accordance with the
terms hereof or thereof, the “Definitive Documents”); provided that, in each
case, such Definitive Documents shall be in form and substance reasonably
acceptable to the Cloud Peak Entities and the Required Consenting Noteholders;
and

 

(b)                                 to promptly execute and deliver (to the
extent a party thereto), and otherwise support the prompt consummation of the
transactions contemplated by, the Definitive Documents.;

 

(c)                                  to work in good faith with potential
purchasers to effectuate the assumption and assignment (including payment of all
associated undisputed cure obligations) of all agreements and unexpired leases
that the purchaser determines are integral to the operation of the purchased
assets; and

 

(d)                                 to work in good faith to cause the purchaser
to purchase and waive avoidance actions against holders of general unsecured
claims.

 

Obligations of the Consenting Noteholders.(2)

 

(a)                                 Consent to Use of Cash Collateral.  Each of
the Consenting 2021 Notes Holders shall consent to the Company’s use of
Collateral (including, without limitation, Cash Collateral) pursuant to the
terms set forth in this Agreement and the Interim DIP Order, as such order may
be superseded by the Final DIP Order and/or supplemental order(s) entered by the
Bankruptcy Court.

 

(b)                                 Consent to Priming Liens; Consent to DIP
Order.  Each of the Consenting 2021 Notes Holders shall consent to each of the
Cloud Peak Entities granting senior priming liens pursuant to section
364(d)(1) of the Bankruptcy Code on the Collateral to the DIP Commitment

 

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(2)              Notwithstanding anything to the contrary in this Agreement,
Claims, other claims, equity interests, actions or activities of a Consenting
Noteholder subject to this Agreement shall not include any Claims, other claims,
equity interests, actions or activities held or performed in a fiduciary
capacity or held, acquired or performed by any other division, business unit or
trading desk of such Consenting Noteholder (other than the division, business
unit or trading desk expressly identified on the signature pages hereto), unless
and until such division, business unit or trading desk is or becomes a party to
this Agreement. In the case of an investment manager or advisor acting on behalf
of a Consenting Noteholder, these conditions would apply only to holdings over
which such investment manager or advisor has been delegated investment
management authority.

 

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Parties in connection with the DIP Facility pursuant to the terms set forth in
this Agreement and the Interim DIP Order, as such order may be superseded by the
Final DIP Order and/or supplemental order(s) entered by the Bankruptcy Court. 
Further, each of the Consenting Noteholders shall not object to, delay, impede,
or take any other action (including to instruct or direct the Indenture
Trustees) to interfere with the prompt entry by the Bankruptcy Court of the DIP
Order approving the DIP Facility.

 

(c)                                  Consent to Distribution of Cash
Consideration.  In furtherance of the confirmation of a Plan and approval of any
Sale, upon and following the closing of any Asset Purchase Agreement, each of
the Consenting Noteholders hereby consents to the use of the Net Sale Proceeds
of any Sale as follows:

 

(i)                                     first, an amount shall be deposited into
a segregated account (the “Carve-Out Reserve Account”) in trust maintained by
the Company equal to (a) all accrued but unpaid fees and expenses, and all
estimated fees and expenses, of the professionals of the Company and any
creditors committee appointed in the Chapter 11 Cases, if any, plus (b) the
lesser of (x) any fixed dollar amount constituting the agreed cap on
professional fees subject to the carve-out (or equivalent term) following
delivery of a carve-out trigger notice (or equivalent term) and (y) the
Wind-Down Budget, which shall in each case be used to pay such professionals in
accordance with the compensation procedures approved by the Bankruptcy Court and
subject to the terms and conditions of the DIP Order;

 

(ii)                                  second, an amount equal to the aggregate
amount of cure amounts asserted by cure claimants whose contracts are being
assumed in the Sale(s) for which the Company is responsible, in each case, in
accordance with the applicable Asset Purchase Agreement(s), shall be paid to
such cure claimants;

 

(iii)                               third, after application of all funds held
in the Segregated Account (as defined in the DIP Order) to the repayment of the
DIP New Money Claims, to pay the DIP New Money Claims in full; and

 

(iv)                              fourth, an amount equal to the following,
without duplication, if such amount is a positive sum, shall be deposited in an
account or accounts maintained by the Company that is subject to the springing
control of the 2021 Notes Indenture Trustee:

 

(A)                               an aggregate amount equal to all accrued but
unpaid administrative expenses (other than administrative expenses to be paid
from the Carve-Out Reserve Account), all KEIP/KERP Amounts not previously paid,
claims under section 503(b)(9) of the Bankruptcy Code, and other priority claims
and the Critical Vendor Payments (related to the assets subject to such sale),
in each case that are not assumed by the Prevailing Bidder(s) pursuant to the
applicable Asset Purchase Agreement(s), for payment of such claims and expenses
in full in cash subject to the terms and conditions of the DIP Order and, to the
extent applicable, in accordance with the Plan; plus

 

(B)                               the amount of the Wind-Down Budget (to the
extent not covered by the Carve-Out Reserve Account); lessand

 

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(C)                               the Company’s unrestricted cash balance as of
such date and any excess restricted cash available to or returned to the Company
as a result of the accounts receivable securitization facility being paid off or
otherwise terminated;

 

(v)                                 fifth, after making the payments and
distributions in full in cash set forth in Sections 4(c)(i)-(iv), and upon the
later of (i) consummation of the applicable Asset Purchase Agreement(s) and
(ii) consummation of the Plan, unless the Plan has not been consummated within
75 days after consummation of the applicable Asset Purchase Agreement(s), the
remaining Net Sale Proceeds shall be used: (A) first, to pay the DIP Final
Roll-Up Amount Claims to the DIP Commitment Parties (to the extent the Company
has obtained Bankruptcy Court approval of the DIP Facility) in full; provided
that, if the Net Sale Proceeds of any Sale of substantially all of the Company’s
assets are insufficient to pay the DIP Roll-Up Amount in full in cash, the
Required Consenting Noteholders may agree to be paid in full with cash and
non-cash consideration; (B) second, to pay any adequate protection claims and
liens granted for the benefit of the 2021 Notes Holders in the DIP Order in
full, subject to the Unsecured Creditor Sharing Agreement; and (C) third, to
satisfy any Obligations (as defined in the 2021 Notes Indenture) arising under
the 2021 Notes Indenture until such Obligations have been paid in full ; andand
any DIP Contingent Roll-Up Claims, if any, subject to the Unsecured Creditor
Sharing Agreement.

 

(vi)                              sixth, after making the payments and
distributions set forth in Sections 4(c)(i)-(v), any remaining Net Sale Proceeds
shall be used to pay unsecured creditors and other stakeholders pursuant to the
treatment provided for such creditors and stakeholders in the Plan.

 

For the avoidance of doubt, the liens of the 2021 Notes Indenture Trustee and
the other creditors secured by the Assets, if any, shall attach to the Net Sale
Proceeds of any Sale in the same priority and to the same extent as existed on
the Assets prior to the consummation of the Sale; provided that distributions,
if any, of the Net Sale Proceeds for payment of professional fees and costs,
cure costs, administrative expenses, priority claims, the break-up fee or
expense reimbursement under any Asset Purchase Agreement or any distribution to
creditors, in each case in accordance with the terms of this Agreement, shall be
distributed free and clear of any liens, claims, interests, or encumbrances of
the 2021 Notes Indenture Trustee or any 2021 Notes Holder.

 

(d)                                 Use of Parent and Issuer Cash.  The
Consenting Noteholders consent to the use of cash on hand at the Parent and
Issuers to pay, and the Debtors shall pay, in each case prior to the occurrence
of the Cash Collateral Termination Date (as defined in the DIP Order) (other
than in subsection (v) hereof) and solely to the extent such amounts have not
been previously satisfied pursuant to the foregoing section 4(c):

 

(i)                                     Critical Vendor Payments in an aggregate
amount not to exceed $1.87 million (A) necessary to be satisfied solely in
connection with Sales that are supported by the Required Consenting Noteholders,
upon the closing of such Sale or (B) as such payments come due in the ordinary
course of business, in each case in accordance with the Critical Vendor Order
and solely to the extent that the Debtors believe such payments should be made
in the reasonable exercise of their business judgment;

 

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(ii)                                  all administrative expense claims arising
under section 503(b) of the Bankruptcy Code as such claims come due in the
ordinary course of business other than the Wind-Down Budget; provided, that such
payment of all administrative expense claims shall be substantially consistent
with the Budget (as defined in the DIP Order) on a line item basis, without
giving effect to any permitted variances; provided, further, that
notwithstanding the foregoing, all allowed claims arising under section
503(b)(9) of the Bankruptcy Code shall be paid in an amount not to exceed $4.6
million in the aggregate;

 

(iii)                               priority claims (including all First Day
Lien/Priority Claim Payments other than claims arising under section
503(b)(9) of the Bankruptcy Code) necessary to be satisfied solely in connection
with Sales that are supported by the Required Consenting Noteholders;

 

(iv)                              all payments necessary to cure any executory
contracts and unexpired leases of real property to be assumed by a purchaser
solely in connection with Sales that are supported by the Required Consenting
Noteholders;

 

(v)                                 an aggregate amount equal to all accrued but
unpaid amounts subject the Carve-Out, less the balance of the Carve-Out Reserve
Account; provided, however, that notwithstanding the occurrence of the Cash
Collateral Termination Date, and for the avoidance of doubt, amounts subject to
the Carve-Out may continue to be paid out of the Carve-Out Reserve Account; and

 

(vi)                              all KEIP/KERP Amounts not previously paid;

 

provided, that such amounts shall be paid, first, from cash on hand that does
not constitute Cash Collateral and second, from Cash Collateral; provided,
further, that, for the avoidance of doubt, use of cash on hand at the Parent and
Issuers to pay the foregoing amounts pursuant to this section 4(d) shall be
taken into account when calculating diminution in value with respect to the
Adequate Protection Superpriority Claims (as defined in the DIP Order).

 

(e)                                  Unsecured Creditor Sharing Agreement. 
Pursuant to the Plan, following (x) the payment in full in cash of all DIP New
Money Claims, the DIP Final Roll-Up Claims and (y) the receipt of a 50% recovery
by 2021 Secured Notes Claims and DIP Contingent Roll-Up Claims (as such recovery
is valued by the Debtors or, if challenged, as determined by the Bankruptcy
Court), any additional distribution to holders of 2021 Secured Notes Claims and
DIP Contingent Roll-Up Claims shall be shared as follows:

 

(i)                                     until such time as 2021 Secured Notes
Claims and DIP Contingent Roll-Up Claims have received a 75% recovery (as such
recovery is valued by the Debtors or, if challenged, as determined by the
Bankruptcy Court), 90% shall be distributed to 2021 Secured Notes Claims and DIP
Contingent Roll-Up Claims and 10% shall be distributed to unsecured claims; and

 

(ii)                                  after such time as 2021 Secured Notes
Claims and DIP Roll-Up Contingent Claims have received a 75% recovery, and until
such time as 2021 Secured Notes Claims and DIP Contingent Roll-Up Claims are
paid in full (as such recovery is valued by the Debtors or, if challenged, as
determined by the Bankruptcy Court), 80% shall be distributed to

 

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2021 Secured Notes Claims and DIP Contingent Roll-Up Claims and 20% shall be
distributed to unsecured claims.

 

(f)                                   (d)Support of Sale.  Subject to the terms
and conditions of this Agreement, each of the Consenting Noteholders or the
investment manager or advisor to certain Consenting Noteholders, agrees that,
until this Agreement has been terminated in accordance with Section 7 hereof,
such Consenting Noteholder or the investment manager or advisor to certain
Consenting Noteholders shall (severally and not jointly):

 

(i)                                     not commence, support or object to any
action or proceeding or take any other action that would, or would reasonably be
expected to, impede or delay, the consummation of any Asset Purchase Agreement
or Sale or approval and closing of the DIP Facility;

 

(ii)                                  not commence or support any action or
proceeding to appoint a trustee, conservator, receiver or examiner for any of
the Cloud Peak Entities (or any of their respective Affiliates or subsidiaries),
to dismiss any of the Chapter 11 Cases, or to convert any of the Chapter 11
Cases to cases under chapter 7 of the Bankruptcy Code;

 

(iii)                               upon the consummation of any Sale to a
Prevailing Bidder, (A) release or terminate any liens on the applicable Assets
sold pursuant to the applicable Asset Purchase Agreement and (B) authorize the
2021 Notes Indenture Trustee to execute and deliver such lien releases,
terminations and similar documents or instruments as the 2021 Notes Indenture
Trustee deems necessary or appropriate in connection with such Asset Purchase
Agreement and the release or termination of the liens and obligations described
herein; and

 

(iv)                              not direct or instruct any Indenture Trustee
to take any action that is inconsistent with the terms and conditions of this
Agreement, and, if any Indenture Trustee takes or threatens to take any such
action, to promptly take all commercially reasonable efforts to direct such
Indenture Trustee not to take such action.

 

(g)                                  (e)Consent to Plan.  Each of the Consenting
Noteholders hereby further consents to:

 

(i)                                     (A) subject to receipt of the Disclosure
Statement, vote all Notes Claims against the Cloud Peak Entities now or
hereafter owned by such Consenting Noteholder to accept the Plan in accordance
with the applicable procedures set forth in a disclosure statement (the
“Disclosure Statement”) to be filed by the Company that meets the requirements
of applicable law, including sections 1125 and 1126 of the Bankruptcy Code;
(B) timely return a duly-executed ballot voting to accept the Plan; and (C) not
“opt out” of or object to any releases or exculpation provided under the Plan
(and, to the extent required by such ballot, affirmatively “opt in” to such
releases and exculpation) and otherwise support the releases and exculpation
provided for in the Plan;

 

(ii)                                  not withdraw, amend, change, or revoke (or
seek to withdraw, amend, change, or revoke) its tender, consent, or vote with
respect to the Plan;

 

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(iii)                               not (A) object to, delay, impede, or take
any other action (including to instruct or direct the applicable Indenture
Trustee) to interfere with the prompt consummation of the Sale, the Definitive
Documents (including the entry by the Bankruptcy Court of an order approving the
Disclosure Statement and confirming the Plan); (B) object to, delay, impede, or
take any other action (including to instruct or direct the applicable Indenture
Trustee) to interfere with or seek to avoid payment of any KEIP/KERP Amounts in
accordance with the terms of the KEIP/KERP Plans, including with respect to
approval of any motion in connection therewith, or any other amounts under the
bonus letters executed by the Company in connection with the Sale Process
previously disclosed to the Consenting Noteholders or their advisors;
(C) propose, file, support, or vote for any restructuring, workout,
reorganization, liquidation, or chapter 11 plan or other Alternative Transaction
for any of the Cloud Peak Entities, other than the Sale and the Plan; or
(D) encourage or support any other Person or entity, including, without
limitation, any Indenture Trustee, to do any of the foregoing, and, if any such
Person or entity does or threatens to do any of the foregoing, to promptly take
all commercially reasonable efforts to direct such Person or entity not to do
any of the foregoing; and

 

(iv)                              not take any other action, including, without
limitation, initiating or joining in any legal proceeding, that is inconsistent
with its obligations under this Agreement.

 

The foregoing provisions of this Section 4 will not (a) prohibit any Consenting
2021 Notes Holder from taking, or directing the applicable Indenture Trustee to
take, any action relating to the maintenance, protection and preservation of the
Collateral that is not inconsistent with the DIP Order approving the DIP
Facility or the Plan; (b) prohibit any Consenting 2021 Note Holder from
objecting, or directing the 2021 Notes Indenture Trustee to object, to any
motion or pleading filed with the Bankruptcy Court seeking approval to use Cash
Collateral other than pursuant to the DIP Order approving the DIP Facility or to
obtain debtor-in-possession financing other than the DIP Facility; (c) limit the
right of the 2021 Notes Indenture Trustee or any Consenting 2021 Noteholder (in
its capacity as a 2021 Notes Holder or a DIP Commitment Party) to credit bid to
the fullest extent provided for in section 363(k) of the Bankruptcy Code,
subject to such parties’ express agreement to the contrary; provided, however,
that in any Sale(s) under section 363 of the Bankruptcy Code of substantially
all Assets of the Cloud Peak Entities, the amount of any such credit bid shall
include as a condition to the closing of such Sale(s) the funding in full of the
amount of the Wind-Down Budget; or (d) limit any Consenting Noteholder’s rights
under the 2021 Notes Indenture, 2024 Notes Indenture, any other Note Document
and/or applicable law to appear and participate as a party in interest in any
matter to be adjudicated in any case or proceeding under the Bankruptcy Code or
other applicable law, so long as with respect to the foregoing clauses
(a)-(d) such action, appearance and the positions advocated in connection
therewith are not materially inconsistent with this Agreement and do not hinder
or delay the Sale Process, approval and implementation of the DIP Facility, or
confirmation of the Plan.

 

Company Obligations.

 

(a)                                 Generally.  Subject to the provisions of
Section 5(b) of this Agreement, the Company shall:

 

(i)                                     do all things reasonable, necessary and
appropriate in furtherance of the Sale Process, any Sale(s), the Plan, and all
transactions set forth in this Agreement, including,

 

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without limitation, seeking Bankruptcy Court approval of bidding procedures to
govern the Sale Process and all other reasonably necessary Bankruptcy Court
relief, creating and monitoring a data room and offering access to the data room
to qualified potential participants in the Sale Process, and conducting an
auction (if necessary);

 

(ii)                                  use its reasonable best efforts to obtain
any and all required regulatory and/or third-party approvals for any Sale(s) and
the Plan;

 

(iii)                               not take any action that is inconsistent
with, or could reasonably be expected to interfere with or impede or delay
consummation of, the Sale(s) or Plan;

 

(iv)                              timely file a formal objection, in form and
substance reasonably acceptable to the Consenting Noteholders to any motion
filed with the Bankruptcy Court by a third party seeking the entry of an order
(A) directing the appointment of a trustee or examiner (with expanded powers
beyond those set forth in section 1106(a)(3) and (4) of the Bankruptcy Code),
(B) converting the Chapter 11 Cases to cases under chapter 7 of the Bankruptcy
Code, (C) dismissing the Chapter 11 Cases, (D) modifying or terminating the
Company’s exclusive right to file and/or solicit acceptances of a chapter 11
plan, as applicable, or (E) directing the appointment of an official committee
of equity interest holders; and

 

(v)                                 report to the Consenting Noteholders any
instance of the Company’s intentional or unintentional material noncompliance
with this Agreement or the failure of any term under this Agreement within one
(1) Business Day of the Company’s discovery of such noncompliance or failure.

 

(b)                                 Fiduciary Duties.  Notwithstanding anything
to the contrary herein, nothing in this Agreement shall prohibit the board of
directors, board of managers, directors, managers, or officers or any other
fiduciary of any Cloud Peak Entity from taking any action, or from refraining
from taking any action, to the extent such board of directors, board of
managers, or such similar governing body determines, after receiving advice from
counsel, that taking such action, or refraining from taking such action, as
applicable, may be required to comply with applicable law or its fiduciary
obligations under applicable law.

 

(c)                                  Ordinary Course Operations.  The Company
shall not enter into any material, non-ordinary course transactions or make any
material non-ordinary course payments inconsistent with this Agreement,
including entering into any new key employee incentive plan or key employee
retention plan or similar arrangement (other than the KEIP/KERP Plans), or any
new or amended agreement regarding executive compensation, without the consent
of the Required Consenting Noteholders, such consent not to be unreasonably
withheld.

 

(d)                                 Fees and Expenses. The Company hereby
agrees, and each Cloud Peak Entity agrees jointly and severally, to pay in cash,
in full in accordance with their respective engagement letters and fee letters,
as applicable, (and in any case within five (5) Business Days), all invoiced
fees and out-of-pocket expenses of the Consenting Noteholders’ advisors
(collectively, the “Consenting Noteholder Professionals”):  (a) Davis Polk &
Wardwell LLP, (b) Houlihan Lokey Capital, Inc., including, for the avoidance of
doubt, the financing fee and completion fee payable in accordance with the terms
of the engagement letter between the 2021

 

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Notes Holders and Houlihan Lokey dated as of February 15, 2019, (c) Morris,
Nichols, Arsht & Tunnell LLP and (d) Ankura Trust Company, LLC; provided that
following the Petition Date, payment of fees and expenses pursuant to this
Section 5(d) shall be subject to the terms and conditions of the DIP Order.

 

(e)                                  Bankruptcy Court Pleadings. The Company
will use commercially reasonable efforts to provide draft copies of all material
motions, pleadings and documents other than the First Day Pleadings that the
Company intends to file with the Bankruptcy Court to counsel to the Consenting
Noteholders at least two (2) days before the date on which the Company intends
to file such motions and shall consult in good faith with counsel to the
Consenting Noteholders regarding the form and substance of such documents.

 

Agreement Effective Date. This Agreement, and the rights and obligations of the
Parties hereunder, shall be effective on the date on which the following
conditions have been satisfied (the “Agreement Effective Date”):

 

(a)                                 the Company shall have executed and
delivered to Davis Polk counterpart signature pages to this Agreement;

 

(b)                                 holders of 2021 Notes that hold, in the
aggregate, at least 50.1% of the then outstanding principal amount of the 2021
Notes Claims under the 2021 Notes Indenture shall have executed and delivered to
the Company counterpart signature pages to this Agreement;

 

(c)                                  holders of 2024 Notes that hold, in the
aggregate, at least 50.1% of the then outstanding principal amount of the 2024
Notes Claims under the 2024 Notes Indenture shall have executed and delivered to
the Company counterpart signature pages to this Agreement;

 

(d)                                 all representations and warranties of the
Parties contained herein shall be true and correct in all material respects as
of the Agreement Effective Date; and

 

(e)                                  the Company shall have agreed to pay (and,
within two (2) day after the Agreement Effective Date, shall have paid) the
reasonable and documented fees and expenses of the Consenting Noteholders
Professionals (including in the Consenting Noteholders’ capacities as DIP
Commitment Parties) incurred and invoiced on or prior to the Agreement Effective
Date.

 

Termination of Obligations.

 

(a)                                 This Agreement shall terminate, and all of
the rights and obligations of the Parties hereunder shall be of no further force
or effect, in the event that (i) the Required Consenting Noteholders and the
Company agree to such termination in writing or (ii) this Agreement is
terminated pursuant to the remaining paragraphs of this Section 7 (the
occurrence of any such event shall be deemed a “Termination Event”).

 

(b)                                 Company Termination Events. The Company
shall have the right, but not the obligation, upon written notice to the other
Parties, such notice delivered by the Company in accordance with
Section 18(e) hereof, to terminate this Agreement upon the occurrence of any of

 

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the following events, unless waived, in writing, by the Company on a prospective
or retroactive basis:

 

(i)                                     the board of directors, board of
managers, or equivalent governing body of any Cloud Peak Entity determines,
after receiving advice from counsel, that proceeding with the transactions
contemplated by this Agreement would be inconsistent with the exercise of their
respective fiduciary duties;

 

(ii)                                  the Required Consenting Noteholders
terminate the obligations of the Required Consenting Noteholders under and in
accordance with this Agreement;

 

(iii)                               a material breach by any Consenting
Noteholder of its respective obligations hereunder that would reasonably be
expected to have a material adverse impact on the Company, the Sale Process, the
prompt consummation of the Sale, or confirmation or effectiveness of the Plan,
which material breach is not cured on or within five (5) Business Days after the
giving of written notice of such breach to the applicable breaching Consenting
Noteholder; provided that, with respect to the Consenting Noteholders, so long
as the nonbreaching Consenting Noteholders hold a majority of the outstanding
2021 Notes Claims, the termination shall only be effective as to the breaching
Consenting Noteholder;

 

(iv)                              upon the termination of the Company’s right to
use any Collateral (including Cash Collateral) in accordance with the DIP Order;

 

(v)                                 upon the termination of the DIP Credit
Agreement by the DIP Commitment Parties, or the failure of the DIP Commitment
Parties to provide funding of the DIP Facility in accordance with the DIP Order;
or

 

(vi)                              the issuance by any governmental authority,
including any regulatory authority or court of competent jurisdiction, of an
order or other decree, in each case, which has become final and non-appealable
and which restrains, enjoins or otherwise prohibits the implementation of a
material portion of any Asset Purchase Agreement, Sale, or the Sale Process.

 

(c)                                  Required Consenting Noteholders Termination
Events. The Consenting Noteholders shall have the right, but not the obligation,
upon written notice to the other Parties by Consenting Noteholders representing
Required Consenting Noteholders, such notice in each case delivered in
accordance with Section 17(e) hereof by such Required Consenting Noteholders, to
terminate the obligations of the Consenting Noteholders under this Agreement
(such Consenting Noteholders, the “Terminating Consenting Noteholders”) upon the
occurrence of any of the following events, unless waived, in writing, by the
Required Consenting Noteholders on a prospective or retroactive basis:

 

(i)                                     the earlier of the date (A) that is nine
(9) months after the Agreement Effective Date and (B) on which the obligations
under the DIP Facility are accelerated after the occurrence of an Event of
Default under Section 8.01 of the DIP Credit Agreement;

 

(ii)                                  any Party other than the Terminating
Consenting Noteholders materially breaches its obligations under this Agreement,
which breach is not cured within five (5) Business Days after the giving of
written notice of such breach; provided that if the breaching

 

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Party is a Consenting Noteholder, so long as the nonbreaching Consenting
Noteholders hold a majority of the outstanding 2021 Notes Claims, the
termination shall only be effective as to the breaching Consenting Noteholder;

 

(iii)                               any Cloud Peak Entity executes or files with
the Bankruptcy Court any Definitive Document that is materially inconsistent
with the requirements set forth in this Agreement without the consent of the
Required Consenting Noteholders;

 

(iv)                              any of the Cloud Peak Entities files, amends,
modifies, terminates, or withdraws, or files a pleading seeking authority to
amend or modify, any of the Definitive Documents without the prior written
consent of the Required Consenting Noteholders;

 

(v)                                 the DIP Order shall have been altered or
modified in any manner that is materially and directly adverse to the Required
Consenting Noteholders, and the DIP Order shall not have been stayed or vacated
without the prior written consent of the Required Consenting Noteholders;

 

(vi)                              [Reserved];

 

(vii)                           the Bankruptcy Court enters an order in the
Chapter 11 Cases terminating any of the Cloud Peak Entities’ exclusive right to
file or solicit acceptances of a plan or plans or reorganization pursuant to
section 1121 of the Bankruptcy Code;

 

(viii)                        the (A) conversion of one or more of the Chapter
11 Cases of any Cloud Peak Entity to a case under chapter 7 of the Bankruptcy
Code; (B) dismissal of one or more of the Chapter 11 Cases of the Cloud Peak
Entities, unless such conversion or dismissal, as applicable, is made with the
prior written consent of the Required Consenting Noteholders; or (C) appointment
of a trustee, receiver, or examiner with expanded powers beyond those set forth
in section 1106(a)(3) and (4) of the Bankruptcy Code in one or more of the
Chapter 11 Cases;

 

(ix)                              the Company files any motion or pleading
(other than the DIP Motion seeking approval of the DIP Facility) seeking to
avoid, disallow, subordinate or recharacterize any Notes Claim held by any
Consenting Noteholder, or the Company files any motion or pleading seeking to
avoid and recover any payment previously made to any of the Cloud Peak Entities
by any of the Consenting Noteholders on account of their respective Notes
Claims;

 

(x)                                 either (i) any Cloud Peak Entity files with
the Bankruptcy Court a motion, application or adversary proceeding (or any Cloud
Peak Entity supports any such motion, application, or adversary proceeding filed
or commenced by any third party) challenging the validity, enforceability, or
priority of, or seeking avoidance or subordination of, the Notes Claims or the
liens securing the 2021 Notes Claims save and except for the approval of any
priming liens under the DIP Facility or (ii) the Bankruptcy Court enters an
order providing relief against the 2021 Notes Indenture Trustee, 2024 Notes
Indenture Trustee or any Consenting Noteholder with respect to any of the
foregoing causes of action or proceedings filed by any Cloud Peak Entity;

 

(xi)                              any governmental authority, including the
Bankruptcy Court, any regulatory authority, or any other court of competent
jurisdiction issues any order, injunction or other decree or takes any other
action, in each case, which (A) is inconsistent with this Agreement

 

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in any material respect or (B) would, or would reasonably be expected to,
materially frustrate the consummation of the Sale Process; provided, however,
that the Company shall have five (5) Business Days after issuance of such order,
injunction, or other decree or the taking of such action to seek relief that
would allow consummation of the Sale Process in a manner that (X) does not
prevent or diminish in any way compliance with the terms of this Agreement and
(Y) is reasonably acceptable to the Required Consenting Noteholders;

 

(xii)                           any Cloud Peak Entity terminates its obligations
under and in accordance with this Agreement; or

 

(xiii)                        the Company proposes, supports, assists, solicits
or files a pleading seeking approval of any Alternative Transaction (or any
approval of any sales, voting or other procedures in connection with such
Alternative Transaction) without the consent of the Required Consenting
Noteholders.

 

(d)                                 Individual Consenting Noteholder Termination
Events. Any Consenting Noteholder may terminate this Agreement as to itself only
(the “Individual Terminating Noteholder”), in the event that such Consenting
Noteholder has transferred all (but not less than all) of its holdings of Notes
Claims in accordance with Section 14 of this Agreement (such termination shall
be effective on the date on which such Consenting Noteholder has effected such
transfer, satisfied the requirements of Section 14 and provided the written
notice required above in this Section 7, by giving ten (10) Business Days’
written notice to the Cloud Peak Entities and the other Consenting Noteholders;
provided that such written notice shall be given by the applicable Noteholder
within five (5) Business Days of such amendment. Termination pursuant to this
Section 7(d) shall be an “Individual Noteholder Termination.”

 

Effect of Termination. The earliest date on which termination of this Agreement
as to a Party is effective in accordance with Section 7 of this Agreement shall
be referred to, with respect to such Party, as a “Termination Date.”  Upon the
occurrence of a Termination Date, (a) all Parties’ obligations under this
Agreement shall be terminated effective immediately (in the case of an
Individual Noteholder Termination, solely with respect to obligations of or in
favor of the Individual Terminating Noteholder), and (b) the Parties shall be
released from all commitments, undertakings, and agreements hereunder,
including, for the avoidance of doubt, and without limitation, the compromise
and settlement of the Lien and Guaranty Dispute; provided, however, that each of
the following shall survive any such termination: (x) any claim for breach of
this Agreement that occurs prior to such Termination Date, and all rights with
respect to such claims shall not be prejudiced in any way and (y) Sections 8, 9
(except as expressly provided for therein) 16, 18(a), 18(b), 18(c), 18(d),
18(e), 18(f), 18(g), 18(h), 18(i), 18(k), 18(l) and 17(m) hereof, including the
definitions incorporated by reference into such sections pursuant to Sections 1
and 2 hereof.  Notwithstanding any provision in this Agreement to the contrary,
the right to terminate this Agreement under this Section 8 shall not be
available to any Party whose failure to fulfill any obligation under this
Agreement has been the cause of, or resulted in, the occurrence of the
applicable Termination Event.

 

Settlement.  The Parties stipulate and agree that, in compromise and settlement
of the Lien and Guaranty Dispute:

 

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(a)                                 the Cloud Peak Entities shall not, in any
forum, proceeding or otherwise, take any position that (i) disputes that the
Subsidiary Guaranties are in full force and effect and constitute legal, valid
and binding obligations of the Subsidiary Guarantors or (ii) challenges the
liens and security interests granted to the 2021 Notes Indenture Trustee in
connection with the 2021 Notes Subsidiary Guaranties and the Subsidiary Liens;

 

(b)                                 each Party hereby conclusively, absolutely,
unconditionally, irrevocably, and forever releases, waives and discharges any
and all claims, suits, or actions against any other Party related to the Lien
and Guaranty Dispute; and

 

(c)                                  for the avoidance of any doubt, each
Subsidiary Guarantor, immediately effective upon the Agreement Effective Date,
hereby (i) reaffirms the 2021 Notes Subsidiary Guaranties and hereby jointly,
severally and unconditionally guarantees the payment of any notes issued under
the 2021 Notes Indenture in accordance with and to the extent provided in
Article X of the 2021 Notes Indenture (the terms of which are incorporated
herein by reference), (ii) reaffirms the 2024 Notes Subsidiary Guaranties and
hereby jointly, severally and unconditionally guarantees the payment of any
notes issued under the 2024 Notes Indenture in accordance with and to the extent
provided in Article XI of the 2024 Notes Indenture (the terms of which are
incorporated herein by reference) and (iii) reaffirms the Subsidiary Liens and
grants liens and security interests in favor of the 2021 Notes Indenture Trustee
in accordance with and to the extent provided in the Security Documents (as
defined in the 2021 Notes Indenture) (the terms of which are incorporated herein
by reference);

 

provided that, in the event this Agreement is either (x) terminated by the
Company and becomes effective as to all Consenting Noteholders under
Section 7(b)(iii) hereof or (y) terminated by the Required Consenting
Noteholders under Section 7(c)(v) hereof, (A) the compromise and settlement set
forth in Section 9(a)-(b) shall be automatically null and void and the
agreements set forth in Section 9(a)-(b) of the Cloud Peak Entities shall (1) be
deemed to have never been made and (2) be automatically terminated without
further action of any party; (B) the guaranties issued and the liens granted
pursuant to Section 9(c) shall be terminated and released without prejudice to
any Subsidiary Guaranties and Subsidiary Liens existing prior to the Agreement
Effective Date; and (C) each Party reserves all rights with respect to the Lien
and Guaranty Dispute; provided, however, that after entry of the Final DIP
Order, termination of this Agreement by the Required Consenting Noteholders
under Section 7(c)(v) hereof shall not result in any of (A), (B), or (C) of this
paragraph.

 

Representations of the Company. Each Cloud Peak Entity hereby represents and
warrants to each Consenting Noteholder as follows as of the date hereof:

 

(a)                                 Corporate Power and Authority.  It has all
requisite corporate, partnership or limited liability company power and
authority to enter into this Agreement and to carry out the transactions
contemplated by, and perform its obligations under, this Agreement.

 

(b)                                 Authorization.  The execution and delivery
of this Agreement and the performance of its obligations hereunder have been
duly authorized by all necessary corporate, partnership or limited liability
company action on its part.

 

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(c)                                  No Conflicts.  The execution, delivery and
performance by it of this Agreement does not (i) violate any provision of law,
rule or regulation applicable to it or any of its subsidiaries or its
certificate of incorporation or bylaws or other organizational documents or
those of any of its subsidiaries or (ii) conflict with, result in a breach of or
constitute (with due notice or lapse of time or both) a default under any
material contractual obligation to which it or any of its subsidiaries is a
party, other than as a result of the commencement of the Chapter 11 Cases.

 

(d)                                 Governmental Consents.  The execution,
delivery and performance by it of this Agreement does not require any
registration or filing with, consent or approval of, or notice to, or other
action to, with or by, any federal, state or other governmental authority or
regulatory body, other than, for the avoidance of doubt, the consents or
approvals of governmental authorities or regulatory bodies that may be required
in connection with the Sale Process or any Sale(s).

 

(e)                                  Binding Obligation. This Agreement is its
legally valid and binding obligation, enforceable against it in accordance with
its terms, except as such enforceability may be limited by bankruptcy,
insolvency, fraudulent conveyance and other laws affecting creditors’ rights,
and by general limitations in the availability of equitable remedies.

 

(f)                                   No Solicitation.  This Agreement is not
intended to be, and each signatory to this Agreement acknowledges that this
Agreement is not, whether for the purposes of sections 1125 and 1126 of the
Bankruptcy Code or otherwise, a solicitation for the acceptance or rejection of
a chapter 11 plan for any of the Cloud Peak Entities.  The Cloud Peak Entities
will not solicit acceptances of a Plan from any Consenting Noteholder until the
Consenting Noteholders have been sent copies of the Disclosure Statement in
respect of the Plan.

 

Representations of Each Consenting Noteholder.  Each of the Consenting
Noteholders party hereto severally (but not jointly) represents and warrants to
the other Parties as follows with respect to itself only and as of the date
hereof:

 

(a)                                 Ownership or Investment Discretion.  As of
the date hereof, it (i) either (A) is the sole legal and beneficial owner of the
amount of 2021 Notes Claims and 2024 Notes Claims appearing on its signature
page hereto and all related claims, rights and causes of action arising out of,
or in connection with, or otherwise relating thereto, in each case free and
clear (other than pursuant to this Agreement), of any pledge, lien, security
interest, charge, claim, equity, option, proxy, voting restriction, right of
first refusal or other limitation on disposition or encumbrances of any kind,
that would, or would reasonably be expected to, adversely affect in any material
way such Party’s performance of its obligations contained in this Agreement at
the time such obligations are required to be performed, or (B) has investment or
voting discretion with respect to such Notes Claims and has the power and
authority to bind the beneficial owner(s) of such Notes Claims to the terms of
this Agreement; and (ii) has full power and authority to consent to matters
concerning such Notes Claims with respect to the DIP Facility, the Sale Process,
any Sale(s), and the Plan.

 

(b)                                 Securities Laws.  (i) It or each beneficial
owner it represents herein is either (A) a qualified institutional buyer as
defined in rule 144A of the Securities Act of 1933, (B) an institutional
accredited investor (as defined in rule 501(a)(1), (2), (3), or (7) under the
Securities Act of 1933, as amended, (C) a Regulation S non-U.S. person, or
(D) the foreign equivalent of (A)

 

40

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or (B) above; and (ii) any securities of the Company acquired by the applicable
Consenting Noteholder will have been acquired for investment and not with a view
to distribution or resale in violation of the Securities Act of 1933, as
amended.

 

(c)                                  Sufficiency of Information Received.  It
has reviewed, or has had the opportunity to review, with the assistance of
professional and legal advisors of its choosing, all information it deems
necessary and appropriate for it to evaluate the financial risks inherent in the
approval of the DIP Facility and the Sale Process, and it has conducted its own
analysis and made its own decision to execute this Agreement.

 

(d)                                 Corporate Power and Authority.  It has all
requisite corporate, partnership or limited liability company power and
authority to enter into this Agreement and to carry out the transactions
contemplated by, and perform its obligations under, this Agreement.

 

(e)                                  Authorization.  The execution and delivery
of this Agreement and the performance of its obligations hereunder have been
duly authorized by all necessary corporate, partnership or limited liability
company action on its part.

 

(f)                                   No Conflicts.  The execution, delivery and
performance by it of this Agreement do not and shall not (i) violate any
provision of law, rule or regulation applicable to it or any of its subsidiaries
or its certificate of incorporation or bylaws or other organizational documents
or those of any of its subsidiaries or (ii) conflict with, result in a breach
of, or constitute (with due notice or lapse of time or both) a default under,
any material contractual obligation to which it or any of its subsidiaries is a
party.

 

(g)                                  Governmental Consents.  The execution,
delivery and performance by it of this Agreement do not and shall not require
any registration or filing with, consent or approval of, or notice to, or other
action to, with or by, any federal, state or other governmental authority or
regulatory body.

 

(h)                                 Binding Obligation.  This Agreement is its
legally valid and binding obligation, enforceable against it in accordance with
its terms, except as such enforceability may be limited by bankruptcy,
insolvency, fraudulent conveyance and other laws affecting creditors’ rights,
and by general limitations in the availability of equitable remedies.

 

[Reserved]

 

Claims and Interests.  This Agreement shall in no way be construed to preclude
any Consenting Noteholder from acquiring or holding claims against, or interests
in, any of the Cloud Peak Entities (or any of its respective Affiliates or
subsidiaries).  However, in the event any Consenting Noteholder shall acquire or
hold any such claims and interests, then such claims and interests shall,
without further action of or notice to any Person, automatically be deemed to be
subject to the terms and conditions of this Agreement.

 

Transfer Restrictions.

 

(a)                                 So long as this Agreement has not been
terminated in accordance with its terms, no Consenting Noteholder shall
(i) sell, use, pledge, hypothecate, assign, transfer, permit

 

41

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the participation in, or otherwise dispose of its right, title, or interest
(including any Beneficial Ownership) in Notes Claims, in whole or in part or
(ii) grant any proxies or deposit any of such Consenting Noteholder’s right,
title, or interest in Notes Claims into a voting trust, or enter into a voting
agreement with respect to any such interest (collectively, the actions described
in clauses (i) and (ii), a “Transfer”), unless it satisfies the following
requirement (a transferee that satisfies such requirement, a “Permitted
Transferee,” and such Transfer, a “Permitted Transfer”):  the intended
transferee executes and delivers to counsel to the Company, on a confidential
basis, on the terms set forth in clauses (b) and (c) below, an executed form of
the Transfer Agreement before such Transfer is effective (it being understood
that any Transfer shall not be effective, including, without limitation, for
purposes of calculating Required Consenting Noteholders, until notification of
such Transfer and a copy of the executed Transfer Agreement is received by
counsel to the Company, in each case, on the terms set forth herein), in which
event, from and after the delivery of such executed copy of such Transfer
Agreement to counsel to the Company (in accordance with the notice provisions
set forth herein and prior to the effectiveness of such Transfer), the
transferor shall be deemed to relinquish its rights, and be released from its
obligations, under this Agreement; provided that any transferor Consenting
Noteholder who Transfers less than all ownership (including any Beneficial
Ownership) in the Notes Claims shall remain subject to this Agreement with
respect to any portions of the Notes Claims not transferred; provided further
that in no event shall any such Transfer relieve a Party hereto from liability
for its breach or nonperformance of its obligations hereunder prior to the date
of delivery of such Transfer Agreement.  Notwithstanding anything herein to the
contrary, so long as this Agreement has not been terminated in accordance with
its terms, each Consenting Noteholder may offer, sell, or otherwise transfer any
or all of its  Notes Claims to any entity that, as of the date of transfer,
controls, is controlled by, or is under common control with such Consenting
Noteholder; provided, however, that such entity shall automatically be subject
to the terms of this Agreement and be a Consenting Noteholder hereunder, and
shall execute a Transfer Agreement.

 

(b)                                 Notwithstanding anything herein to the
contrary, (i) a Consenting Noteholder may Transfer any right, title, or interest
in its Notes Claims to an entity that is acting in its capacity as a Qualified
Marketmaker (as defined below) without the requirement that the Qualified
Marketmaker be or become a Consenting Noteholder only if such Qualified
Marketmaker has purchased such Claims with a view to immediate resale of such
Notes Claims (by purchase, sale, assignment, transfer, participation or
otherwise) as soon as reasonably practicable, and in no event later than the
earlier of (A) one (1) business day prior to any voting deadline with respect to
the Plan (solely if such Qualified Marketmaker acquires such Notes Claims prior
to such voting deadline) and (B) twenty (20) business days of consummation of
its acquisition of such Notes Claims to a Permitted Transferee that is or
becomes a Consenting Noteholder; and (ii) to the extent that a Consenting
Noteholder is acting in its capacity as a Qualified Marketmaker, it may Transfer
or participate any right, title, or interest in any Notes Claims that the
Qualified Marketmaker acquires from a holder of such Notes Claims who is not a
Consenting Noteholder without the requirement that the transferee be or become a
Consenting Noteholder. Notwithstanding the foregoing, (w) if at the time of a
proposed Transfer of any Notes Claim to the Qualified Marketmaker in accordance
with the foregoing, the date of such proposed Transfer is on or before the
voting deadline with respect to the Plan, the proposed transferor Consenting
Noteholder shall first vote such Claim acquired from a Consenting Noteholder in
accordance with the requirements of Section 4(e) hereof prior to any Transfer or
(x) if, after a transfer in accordance with this Section 14(b), a Qualified
Marketmaker is holding a Claim on the

 

42

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voting deadline with respect to the Plan, such Qualified Marketmaker shall vote
such Claim in accordance with the requirements of Section (e) hereof. For these
purposes, a “Qualified Marketmaker” means an entity that: (y) holds itself out
to the market as standing ready in the ordinary course of its business to
purchase from customers and sell to customers claims against the Company and its
affiliates (including debt securities or other debt) or enter into with
customers long and short positions in claims against the Company and its
affiliates (including debt securities or other debt), in its capacity as a
dealer or marketmaker in such claims against the Company and its affiliates; and
(z) is in fact regularly in the business of making a market in claims against
issuers or borrowers (including debt securities or other debt). A Qualified
Marketmaker acting in such capacity may purchase, sell, assign, transfer, or
participate any Claims other than Claims held by a Consenting Noteholder without
any requirement that the transferee be or become subject to this Agreement..

 

(c)                                  This Agreement shall in no way be construed
to preclude a Consenting Noteholder from acquiring additional Notes Claims or
any other Claim against any Cloud Peak Entity; provided that (i) if any
Consenting Noteholder acquires additional Notes Claims after the Agreement
Effective Date, such Consenting Noteholder shall make commercially reasonable
efforts to notify counsel to the Company and counsel to the applicable Indenture
Trustee, on a confidential basis, within a reasonable period of time following
such acquisition, of such acquisition, including the amount of such acquisition
and (ii) such Consenting Noteholder hereby acknowledges and agrees that such
Notes Claims shall automatically and immediately upon acquisition by a
Consenting Noteholder be subject to the terms of this Agreement (regardless of
when or whether notice of such acquisition is given in accordance herewith).

 

(d)                                 Any Transfer made in violation of this
Section14 shall be void ab initio and the Company and each of the Consenting
Noteholders shall have the right to enforce the voiding of such Transfer.  Any
Consenting Noteholder that effectuates a Permitted Transfer to a Permitted
Transferee shall have no liability under this Agreement arising from, or related
to, the failure of the Permitted Transferee to comply with the terms of this
Agreement.

 

Exhibits, Annexes and Schedules Incorporated by Reference.  Each of the
exhibits, annexes and schedules attached hereto, and each of the schedules and
annexes to such exhibits (collectively, the “Exhibits and Schedules”) is
expressly incorporated herein and made a part of this Agreement, and all
references to this Agreement shall include the Exhibits and Schedules.  In the
event of any inconsistency between this Agreement (without reference to the
Exhibits and Schedules) and the Exhibits and Schedules, this Agreement (without
reference to the Exhibits and Schedules) shall govern and control.

 

Entire Agreement; Prior Negotiations.  This Agreement, including any exhibits,
sets forth in full the terms of agreement between and among the Parties with
respect to the transactions contemplated herein and is intended as the full,
complete and exclusive contract governing the relationship between and among the
Parties with respect to the transactions contemplated herein, superseding all
other discussions, promises, representations, warranties, agreements and
understandings, whether written or oral, between or among the Parties with
respect to the subject matter hereof; provided that nothing herein shall affect
the settlement of the Lien and Guaranty Dispute set forth in Section 9 of the
Original Agreement; provided further that any confidentiality agreement between
or among any of the Parties shall remain in full force and effect in accordance

 

43

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with its terms.  No representations, oral or written, other than those set forth
herein, may be relied on by any Party in connection with the subject matter
hereof.

 

Amendment or Waiver.  No waiver, modification or amendment of any term or
provision of this Agreement shall be valid unless such waiver, modification or
amendment is in writing and has been signed by the Company and the Required
Consenting Noteholders; provided, however, that any modification or amendment
that alters any of the material terms hereof in a manner that is
disproportionately adverse to any one Consenting Noteholder as compared to
similarly situated Consenting Noteholders shall be valid only if such waiver,
modification or amendment is in writing and has been signed by the Company and
each of the Consenting Noteholders.  No waiver of any of the provisions of this
Agreement or the Asset Purchase Agreement(s) shall constitute or be deemed to
constitute a waiver of any other provision of this Agreement or the Asset
Purchase Agreement(s), whether or not similar, nor shall any waiver be deemed a
continuing waiver.  Any modification of this Section 17 shall require the
written consent of all Parties.

 

Miscellaneous.

 

(a)                                 Governing Law.  This Agreement shall be
governed by, and construed in accordance with, the laws of the State of New
York, without regard to such state’s choice of law provisions which would
require the application of the law of any other jurisdiction.  By its execution
and delivery of this Agreement, each of the Parties hereby irrevocably and
unconditionally agrees for itself that any legal action, suit or proceeding
against it with respect to any matter arising under, or arising out of, or in
connection with, this Agreement, or for recognition or enforcement of any
judgment rendered in any such action, suit or proceeding, may be brought in the
United States District Court for the District of Delaware, and by execution and
delivery of this Agreement, each of the Parties hereby irrevocably accepts and
submits itself to the exclusive jurisdiction of such court, generally and
unconditionally, with respect to any such action, suit or proceeding. 
Notwithstanding the foregoing, upon any commencement of the Chapter 11 Cases and
until entry of a final decree in each of the Chapter 11 Cases, each of the
Parties agrees that the Bankruptcy Court shall have exclusive jurisdiction of
all matters arising out of, or in connection with, this Agreement.

 

(b)                                 Specific Performance.  It is understood and
agreed by the Parties that money damages would not be a sufficient remedy for
any breach of this Agreement by any Party, and each nonbreaching Party shall be
entitled to specific performance and injunctive or other equitable relief
(excluding monetary remedies) as its sole and exclusive remedy of any such
breach, including, without limitation, an order of the Bankruptcy Court or other
court of competent jurisdiction requiring any Party to comply promptly with any
of its obligations hereunder.

 

(c)                                  Reservation of Rights.  Except as expressly
provided in this Agreement, nothing herein is intended to, or does, in any
manner, waive, limit, impair or restrict the ability of each Consenting
Noteholder to protect and preserve its rights, remedies and interests, including
its claims, against the Company.  If the Sale Process contemplated herein is not
consummated in the manner set forth in this Agreement, or if this Agreement is
terminated for any reason, the Parties hereto fully reserve any and all of their
respective rights and remedies.  Pursuant to Federal Rule of Evidence 408, any
applicable state rules of evidence and any other applicable law, foreign or
domestic, this Agreement and all negotiations relating thereto shall not be
admissible into evidence

 

44

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in any proceeding other than a proceeding to enforce the terms and provisions of
this Agreement. This Agreement (including, for the avoidance of doubt, the
Exhibits and Schedules) and any related document shall in no event be construed
as, or be deemed to be evidence of, an admission or concession on the part of
any Party of any claim or fault or liability or damages whatsoever.  Each of the
Parties denies any and all wrongdoing or liability of any kind and does not
concede any infirmity in the claims or defenses which it has asserted or could
assert.

 

(d)                                 Headings.  The section headings of this
Agreement are for convenience of reference only and shall not, for any purpose,
be deemed a part of this Agreement.

 

(e)                                  Notice.  All notices, requests and other
communications hereunder must be in writing and will be deemed to have been duly
given only if delivered personally, by electronic transmission or mailed
(first-class postage prepaid) to the Parties at the following addresses or email
addresses, as applicable:

 

Each Consenting Noteholder:

 

The address or electronic mail address specified on its respective signature
page to this Agreement.

 

with a copy (which shall not constitute notice) to:

 

Davis Polk & Wardwell LLP

450 Lexington Avenue

New York, New York 10017

Attn: Damian S. Schaible and Aryeh Ethan Falk

Email: damian.schaible@davispolk.com and aryeh.falk@davispolk.com

 

The Company:

 

Cloud Peak Energy Inc.

385 Interlocken Crescent, Suite 400

Broomfield, Colorado 80021

Attn: General Counsel

 

with a copy (which shall not constitute notice) to:

 

Vinson & Elkins, L.L.P.

666 Fifth Avenue, 26th Floor

New York, New York 10103-0040

Attn: David Meyer, Jessica Peet, and Lauren Kanzer

Email:                dmeyer@velaw.com

jpeet@velaw.com

lkanzer@velaw.com

 

(f)                                   Successors and Assigns, Third-Party
Beneficiaries.  This Agreement is intended to bind and inure to the benefit of
the Parties and their respective successors, permitted

 

45

--------------------------------------------------------------------------------

 

assigns, heirs, executors, administrators and representatives.  Unless expressly
stated herein, this Agreement shall be solely for the benefit of the Parties
hereto and no other Person or entity shall, or shall be deemed to, be a
third-party beneficiary hereof.

 

(g)                                  Severability.  Wherever possible, each
provision of this Agreement shall be interpreted in such a manner as to be
effective and valid under applicable law, but if any provision of this Agreement
shall be prohibited by or invalid under applicable law, such provision shall be
ineffective to the extent of such prohibition or invalidity, without
invalidating the remainder of such provision or the remaining provisions of this
Agreement.

 

(h)                                 Several Obligations. The agreements,
representations and obligations of each Consenting Noteholder under this
Agreement are several, and not joint, in all respects.  Any breach of this
Agreement by a Party shall not result in liability for any other nonbreaching
Party (it being acknowledged and agreed by all parties that their sole and
exclusive remedy for any breach of this Agreement shall be specific performance
and injunctive or other equitable relief (excluding monetary remedies) as
provided in Section 17(b) above).  It is understood and agreed that any
Consenting Noteholder may trade in the Notes Claims or other debt securities of
the Company without the consent of the Company or any other Consenting
Noteholder, subject to applicable laws, if any, Section 14 herein, and the
applicable Notes Indenture (as applicable).  No Consenting Noteholder shall have
any responsibility for any such trading by any other entity by virtue of this
Agreement.

 

(i)                                     Counterparts.  This Agreement may be
executed in several counterparts, each of which shall be deemed to be an
original, and all of which together shall be deemed to be one and the same
agreement.  Execution copies of this Agreement may be delivered by facsimile or
electronic mail which shall be deemed to be an original for the purposes of this
Agreement.

 

(j)                                    Public Disclosure.  To the extent
practicable, at least two (2) Business Days prior to release or filing thereof,
the Company will submit to Davis Polk any press release and/or public filing
relating to this Agreement, the Asset Purchase Agreement(s), or the transactions
contemplated hereby and thereby, and any amendments thereof.

 

(k)                                 No Strict Construction.  This Agreement and
all other agreements and documents executed and/or delivered in connection
herewith have been prepared through the joint efforts of all of the Parties
hereto or thereto.  Neither the provisions of this Agreement or any such other
agreements and documents, nor any alleged ambiguity therein, shall be
interpreted or resolved against any Party on the ground that such Party or such
Party’s counsel drafted this Agreement or such other agreements and documents,
or based on any other rule of strict construction.

 

(l)                                     No Violation of Automatic Stay.  The
Consenting Noteholders are authorized to take any steps necessary to effectuate
the termination of this Agreement, as applicable, including the sending of any
applicable notices to the Company, notwithstanding section 362 of the Bankruptcy
Code or any other applicable law (and the Company hereby waives, to the greatest
extent possible, the applicability of the automatic stay to the giving of such
notice), and no cure period contained in this Agreement shall be extended
pursuant to sections 108 or 365

 

46

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of the Bankruptcy Code or any other applicable law without the prior written
consent of the Required Consenting Noteholders.

 

(m)                             WAIVER OF JURY TRIAL.  EACH OF THE PARTIES TO
THIS AGREEMENT HEREBY IRREVOCABLY WAIVES ALL RIGHT TO A TRIAL BY JURY IN ANY
ACTION, PROCEEDING OR COUNTERCLAIM ARISING OUT OF OR RELATING TO THIS AGREEMENT
OR THE TRANSACTIONS CONTEMPLATED HEREBY.

 

(n)                                 Time Periods.  If any time period or other
deadline provided in this Agreement expires on a day that is not a Business Day,
then such time period or other deadline, as applicable, shall be deemed extended
to the next succeeding Business Day.

 

[Remainder of page intentionally left blank; signature pages follow]

 

47

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IN WITNESS WHEREOF, the Parties hereto have caused this Agreement to be duly
executed and delivered by their respective duly authorized officers, all as of
the date and year first above written.

 

 

CLOUD PEAK ENERGY RESOURCES LLC,

 

as Issuer

 

 

 

 

By:

/s/ Bryan Pechersky

 

 

Bryan Pechersky

 

 

Executive Vice President, General Counsel and Corporate Secretary

 

 

 

CLOUD PEAK ENERGY FINANCE CORP.,

 

as Issuer

 

 

 

 

By:

/s/ Bryan Pechersky

 

 

Bryan Pechersky

 

 

Executive Vice President, General Counsel and Corporate Secretary

 

 

 

CLOUD PEAK ENERGY INC.,

 

as Parent

 

 

 

 

By:

/s/ Bryan Pechersky

 

 

Bryan Pechersky

 

 

Executive Vice President, General Counsel and Corporate Secretary

 

[Signature Page to Sale and Plan Support Agreement]

 

--------------------------------------------------------------------------------

 

 

ARROWHEAD I LLC

 

ARROWHEAD II LLC

 

ARROWHEAD III LLC

 

YOUNGS CREEK HOLDINGS I LLC

 

YOUNGS CREEK HOLDINGS II LLC

 

YOUNGS CREEK MINING COMPANY, LLC

 

BIG METAL COAL CO. LLC

 

CORDERO MINING LLC

 

CORDERO MINING HOLDINGS LLC

 

CORDERO OIL AND GAS LLC

 

CABALLO ROJO LLC

 

CABALLO ROJO HOLDINGS LLC

 

NERCO LLC

 

NERCO COAL LLC

 

ANTELOPE COAL LLC

 

SPRING CREEK COAL LLC

 

NERCO COAL SALES LLC

 

PROSPECT LAND AND DEVELOPMENT LLC

 

CLOUD PEAK ENERGY LOGISTICS LLC

 

CLOUD PEAK ENERGY LOGISTICS I LLC

 

KENNECOTT COAL SALES LLC

 

RESOURCE DEVELOPMENT LLC

 

WESTERN MINERALS LLC

 

SEQUATCHIE VALLEY COAL CORPORATION

 

CLOUD PEAK ENERGY SERVICES COMPANY,

 

as Subsidiary Guarantors

 

 

 

 

 

 /s/ Bryan Pechersky

 

Bryan Pechersky

 

Executive Vice President, General Counsel and Corporate Secretary

 

[Signature Page to Sale and Plan Support Agreement]

 

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ALLIANZ GLOBAL INVESTORS U.S. LLC, in its capacity as investment manager,
investment adviser or investment sub-adviser and on behalf of the investment
vehicles identified below as Consenting Noteholders:

 

 

 

Allianz Short Duration High Yield Fund, a series of Allianz Global Investors
Trust

 

 

 

AllianzGI Short Duration High Income Fund, a series of Allianz Funds
Multi-Strategy Trust

 

 

 

Allianz Rendite Plus 2019

 

 

 

Allianz US Short Duration High Income Bond Fund, a sub-fund of Allianz Global
Investors Fund

 

 

 

 

By:

/s/ Steve Gish

 

 

Name: Steve Gish

 

 

Title: Director

 

 

 

Attn: Steven Gish

 

 

 

Tel:

 

 

 

Email:

 

 

 

Address:

 

Holdings

Principal Amount of 2021 Notes

Principal Amount of 2024 Notes

 

[Signature Page to Sale and Plan Support Agreement]

 

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Arena Capital Advisors, LLC for and on behalf of the funds and accounts it
manages and as Consenting Noteholder

 

 

 

 

By:

/s/ Jeremy Sagi

 

 

Name: Jeremy Sagi

 

 

Title: Chief Investment Officer

 

 

 

 

 

 

Attn:

Sanije Perrett

 

Title:

President

 

Tel:

 

 

Email:

 

 

Address:

 

 

Holdings

Principal Amount of 2021 Notes

Principal Amount of 2024 Notes

 

[Signature Page to Sale and Plan Support Agreement]

 

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GRACE BROTHERS, LP, as Consenting Noteholder

 

 

 

 

By:

BRO-GP, LLC

 

 

A General Partner

 

 

 

 

By:

/s/ Bradford T. Whitmore

 

 

Name: Bradford T. Whitmore

 

 

Title: Manager

 

 

 

 

 

 

Attn:

Bradford T. Whitmore

 

Tel:

 

 

Email:

 

Address:

 

Holdings

Principal Amount of 2021 Notes

Principal Amount of 2024 Notes

 

[Signature Page to Sale and Plan Support Agreement]

 

--------------------------------------------------------------------------------

 

 

NOMURA CORPORATE RESEARCH AND ASSET MANAGEMENT INC., as Investment Advisor on
behalf of certain funds and accounts, as Consenting Noteholder

 

 

 

 

By:

/s/ Joshua Givelber

 

 

Name: Joshua Givelber

 

 

Title: Executive Director

 

 

 

 

 

 

Attn:

Joshua Givelber

 

Tel:

 

 

Email:

 

Address:

 

Holdings

Principal Amount of 2021 Notes

Principal Amount of 2024 Notes

 

[Signature Page to Sale and Plan Support Agreement]

 

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TIAA Global Public Investments, LLC — Series Loan, as Consenting Noteholder

 

 

 

By: Teachers Advisors, LLC, its investment manager

 

 

 

 

By:

/s/ Anders Persson

 

 

Name: Anders Persson

 

 

Title: Managing Director

 

 

 

 

 

Attn:

 

Tel:

 

Email:

 

Address:

 

Holdings

Principal Amount of 2021 Notes

Principal Amount of 2024 Notes

 

[Signature Page to Sale and Plan Support Agreement]

 

--------------------------------------------------------------------------------

 

 

TIAA Global Public Investments, LLC — Series High Yield, as Consenting
Noteholder

 

 

 

By: Teachers Advisors, LLC, its investment manager

 

 

 

 

By:

/s/ Anders Persson

 

 

Name: Anders Persson

 

 

Title: Managing Director

 

 

 

 

 

Attn:

 

Tel:

 

Email:

 

Address:

 

Holdings

Principal Amount of 2021 Notes

Principal Amount of 2024 Notes

 

[Signature Page to Sale and Plan Support Agreement]

 

--------------------------------------------------------------------------------

 

 

TIAA-CREF High Yield Fund, as Consenting Noteholder

 

 

 

By: Teachers Advisors, LLC, its investment manager

 

 

 

 

By:

/s/ Anders Persson

 

 

Name: Anders Persson

 

 

Title: Managing Director

 

 

 

 

 

Attn:

 

Tel:

 

Email:

 

Address:

 

Holdings

Principal Amount of 2021 Notes

Principal Amount of 2024 Notes

 

[Signature Page to Sale and Plan Support Agreement]

 

--------------------------------------------------------------------------------

 

 

TIAA-CREF Bond Plus Fund, as Consenting Noteholder

 

 

 

By: Teachers Advisors, LLC, its investment manager

 

 

 

 

By:

/s/ Anders Persson

 

 

Name: Anders Persson

 

 

Title: Managing Director

 

 

 

 

 

Attn:

 

Tel:

 

Email:

 

Address:

 

Holdings

Principal Amount of 2021 Notes

Principal Amount of 2024 Notes

 

[Signature Page to Sale and Plan Support Agreement]

 

--------------------------------------------------------------------------------

 

 

Teachers Insurance and Annuity Association of America, as Consenting Noteholder

 

 

 

By: Nuveen Alternatives Advisors LLC, its investment manager

 

 

 

 

By:

/s/ Ji Min Shin

AD

 

 

Name: Ji Min Shin

 

 

Title: Senior Director

 

 

 

 

 

 

 

Attn:

Ji Min Shin

 

Tel:

 

 

Email:

 

Address:

 

Holdings

Principal Amount of 2021 Notes

Principal Amount of 2024 Notes

 

[Signature Page to Sale and Plan Support Agreement]

 

--------------------------------------------------------------------------------

 

 

WEXFORD SPECTRUM INVESTORS LLC, as Consenting Noteholder

 

 

 

 

By:

/s/ Arthur Amron

 

 

Name: Arthur Amron

 

 

Title: Vice President and Assistant Secretary

 

 

 

WEXFORD CATALYST INVESTORS LLC, as Consenting Noteholder

 

 

 

 

By:

/s/ Arthur Amron

 

 

Name: Arthur Amron

 

 

Title: Vice President and Assistant Secretary

 

 

 

DEBELLO INVESTORS LLC, as Consenting Noteholder

 

 

 

 

By:

/s/ Arthur Amron

 

 

Name: Arthur Amron

 

 

Title: Vice President and Assistant Secretary

 

 

 

 

 

Attn:  General Secretary

 

Tel:

 

Email:

 

Address:

 

Holdings

Principal Amount of 2021 Notes

Principal Amount of 2024 Notes

 

[Signature Page to Sale and Plan Support Agreement]

 

--------------------------------------------------------------------------------

 

 

Wolverine Flagship Fund Trading Limited, as Consenting Noteholder

 

 

 

 

By:

/s/ Kenneth L. Nadel

 

 

Name: Kenneth L. Nadel

 

 

Title: Authorized Signatory

 

 

 

Attn: Kenneth L. Nadel

 

Tel:

 

Email:

 

Address:

 

Holdings

Principal Amount of 2021 Notes

Principal Amount of 2024 Notes

 

[Signature Page to Sale and Plan Support Agreement]

 

--------------------------------------------------------------------------------

 

The exhibits to the Second Amended and Restated Sale and Plan Support Agreement
are unchanged from the Amended and Restated Sale and Plan Support Agreement and
are omitted.  Please refer to the exhibits to the Amended and Restated Sale and
Plan Support Agreement filed as Exhibit 10.1 to the Company’s current report on
Form 8-K, filed with the SEC on May 10, 2019.

 

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