Exhibit 10.1

 

Execution Version

 

SECOND AMENDMENT TO THE ASSET PURCHASE AGREEMENT

 

This SECOND AMENDMENT TO ASSET PURCHASE AGREEMENT (this “Amendment”), dated as
of October 21, 2019, by and among Navajo Transitional Energy Company, LLC, a
Navajo Nation limited liability company (“Purchaser”), Cloud Peak Energy Inc., a
Delaware corporation (the “Company”), and the Additional Sellers (together with
the Company, the “Sellers” and each entity individually a “Seller”). Capitalized
terms used but not otherwise defined herein shall have the meanings set forth in
the Purchase Agreement (as defined below).

 

RECITALS:

 

A.                                    The parties hereto are parties to that
certain Asset Purchase Agreement, dated as of August 19, 2019, as amended by
that First Amendment to the Asset Purchase Agreement, dated as of September 30,
2019 (as may be amended, supplemented or otherwise modified, the “Purchase
Agreement”).

 

B.                                    The parties hereto desire to amend the
Purchase Agreement as hereinafter set forth.

 

NOW, THEREFORE, in consideration of the foregoing and the mutual covenants and
agreements set forth in this Amendment and other good and valuable
consideration, the receipt and sufficiency of which are hereby acknowledged, the
Parties hereby agree as follows:

 

1.1                               Amendments to the Purchase Agreement. The
Purchase Agreement is hereby amended as follows:

 

(a)                                 Section 2.1(b)(v) of the Purchase Agreement
is hereby amended and restated in its entirety as follows: “(v) subject to
Section 8.15 to the extent applicable to the relevant Purchased Contracts, the
Contracts, including those listed on Schedule 2.1(b)(v), that are unexpired as
of the Closing Date (collectively, the “Purchased Contracts”), in each case as
each such Contract may have been amended or otherwise modified prior to the date
of (or as permitted in accordance with the terms of) this Agreement;”.

 

(b)                                 Section 2.2(f) of the Purchase Agreement is
hereby amended and restated in its entirety as follows: “(f) subject to
Section 2.1(b)(xii), and except as set forth on Section 2.1(b)(v) of the
Disclosure Schedules, all insurance policies of Sellers;”.

 

(c)                                  The following paragraph is hereby added to
the Purchase Agreement as Section 8.15:

 

“8.15                  Certain Insurance Matters.  The parties acknowledge that
(a) except as otherwise set forth herein, the insurance policies governing the
Sellers and the Business will remain with Sellers following the Closing and
(b) certain of such policies are being assigned to the Purchaser pursuant to
Section 2.1(b)(v) (the “Assigned Policies”); provided that, for the avoidance of
doubt, after the Closing, Sellers shall retain coverage thereunder with respect
to occurrences affecting the Sellers or the Business prior to the Closing Date
(subject to deductibles, self-insured retentions and policy limits thereof).
Following the

 

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Closing Date, (i) Sellers shall be entitled to independently make and manage
claims under such Assigned Policies arising from loss, damage or casualty that
occurred prior to the Closing Date, and shall be entitled to negotiate,
communicate and deal directly with brokers, insurers and claims adjusters in
respect of such insurance (including with respect to settlement) and (ii) any
claim paid by the insurers on such claims shall be paid solely to the applicable
Seller(s); provided that the Purchaser shall reasonably cooperate with respect
to the preparation, negotiation and resolution of any claims made by any Seller
under the Assigned Policies. At the Closing, the Purchaser shall reimburse the
Sellers for the portion of the premiums Sellers paid for the Assigned Policies
for the period beginning (and including) the day after Closing Date through (and
including) the date of expiration of such Assigned Policies. In addition, in
support of (but not satisfaction of) the Purchaser’s obligations pursuant to
Section 8.6(d), until the expiration of the Interim Period, Purchaser shall name
the Sellers as additional insured parties on the Purchaser’s general liability
and excess liability insurance policies with respect to the Purchased Assets.”

 

(d)                                 Section 11.1(b) of the Purchase Agreement is
hereby amended to and restated in its entirety as follows: “(b)     Anything to
the contrary in the foregoing notwithstanding, the obligations of the Parties
set forth in Sections 2.7, 8.6, 8.8, 8.10, 8.12, 8.14 and 8.15 of this Agreement
shall survive the Closing and continue until fully discharged by the relevant
Party.”

 

(e)                                  Exhibit E attached to the Purchase
Agreement is hereby deleted in its entirety and replaced with Exhibit E attached
hereto.

 

(f)                                   Each of Schedule 1.1(b), Schedule
2.1(b)(v) and Schedule 2.2(n) attached to the Purchase Agreement are hereby
deleted in their entirety and replaced with Schedule 1.1(b), Schedule
2.1(b)(v) and Schedule 2.2(n) attached hereto.

 

1.2                               Effect of Amendment; Effectiveness;
Ratification. All references to the Purchase Agreement in any document,
instrument, agreement or writing delivered pursuant to the Purchase Agreement
(as amended hereby), shall hereafter be deemed to refer to the Purchase
Agreement as amended hereby. This Amendment shall not be deemed, either
expressly or impliedly, to waive, amend or supplement any provision of the
Purchase Agreement other than as specifically set forth herein. This Amendment
shall not be effective until approved by order of the Bankruptcy Court. The
Purchase Agreement as amended by this Amendment, is hereby ratified and
confirmed in all respects.

 

1.3                               Entire Agreement; Amendment. This Amendment
and the Purchase Agreement represent the entire understanding and agreement
between the Parties with respect to the subject matter hereof and thereof, and
supersede all prior discussions and agreements between the Parties with respect
to the subject matter hereof and thereof. This Amendment can be amended,
supplemented or changed, and any provision hereof can be waived, only by written
instrument making specific reference to this Amendment signed by the Party
against whom enforcement of any such amendment, supplement, modification or
waiver is sought.

 

1.4                               Conflicts. This Amendment amends and
supplements the terms and conditions of the Purchase Agreement. If any provision
of this Amendment is construed to conflict with any

 

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provision of the Purchase Agreement (except as otherwise expressly provided in
this Amendment), the provisions of this Amendment shall be deemed controlling to
the extent of that conflict.

 

1.5                               Counterparts. This Amendment may be executed
in any number of counterparts, each of which will be deemed to be an original
copy of this Agreement and all of which, when taken together will be deemed to
constitute on and the same agreement.

 

1.6                               Jurisdiction; Waiver of Right to Trial by
Jury; Governing Law. The provisions of Sections 11.4, 11.5 and 11.7 of the
Purchase Agreement shall apply mutatis mutandis to this Amendment.

 

1.7                               Captions. The captions used in this Amendment
are for convenience of reference only and do not constitute a part of this
Amendment and will not be deemed to limit, characterize or in any way affect any
provision of this Amendment, and all provisions of this Amendment will be
enforced and construed as if no caption had been used in this Amendment.

 

1.8                               Severability. If any term or other provision
of this Amendment is invalid, illegal, or incapable of being enforced by any Law
or public policy, all other terms or provisions of this Amendment will
nevertheless remain in full force and effect so long as the economic or legal
substance of the transactions contemplated hereby are not affected in any manner
materially adverse to any Party. Upon such determination that any term or other
provision is invalid, illegal, or incapable of being enforced, the Parties will
negotiate in good faith to modify this Amendment so as to effect the original
intent of the Parties as closely as possible in an acceptable manner in order
that the transactions contemplated hereby are consummated as originally
contemplated to the greatest extent possible.

 

[Signature pages follow]

 

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IN WITNESS WHEREOF, the Parties have caused this Amendment to be executed by
their respective officers thereunto duly authorized, as of the date hereof.

 

 

PURCHASER:

 

 

 

NAVAJO TRANSITIONAL ENERGY COMPANY, LLC

 

 

 

By:

/s/ Clark Moseley

 

 

Name: Clark Moseley

 

 

Title: Chief Executive Officer

 

Signature Page to Second Amendment to Asset Purchase Agreement

 

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COMPANY:

 

 

 

CLOUD PEAK ENERGY INC.

 

 

 

By:

/s/ Heath A. Hill

 

 

Name: Heath A. Hill

 

 

Title: Executive Vice President and Chief Financial Officer

 

Signature Page to Second Amendment to Asset Purchase Agreement

 

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ADDITIONAL SELLERS:

 

 

 

 

 

Antelope Coal LLC

 

Arrowhead I LLC

 

 

 

 

 

By:

/s/ Heath A. Hill

 

By:

/s/ Heath A. Hill

Name: Heath A. Hill

 

Name: Heath A. Hill

Title: Executive Vice President and Chief Financial Officer

 

Title: Executive Vice President and Chief Financial Officer

 

 

 

Arrowhead II LLC

 

Arrowhead III LLC

 

 

 

 

 

By:

/s/ Heath A. Hill

 

By:

/s/ Heath A. Hill

Name: Heath A. Hill

 

Name: Heath A. Hill

Title: Executive Vice President and Chief Financial Officer

 

Title: Executive Vice President and Chief Financial Officer

 

 

 

Big Metal Coal Co. LLC

 

Caballo Rojo LLC

 

 

 

 

 

By:

/s/ Heath A. Hill

 

By:

/s/ Heath A. Hill

Name: Heath A. Hill

 

Name: Heath A. Hill

Title: Executive Vice President and Chief Financial Officer

 

Title: Executive Vice President and Chief Financial Officer

 

 

 

Caballo Rojo Holdings LLC

 

Cloud Peak Energy Finance Corp.

 

 

 

 

 

By:

/s/ Heath A. Hill

 

By:

/s/ Heath A. Hill

Name: Heath A. Hill

 

Name: Heath A. Hill

Title: Executive Vice President and Chief Financial Officer

 

Title: Executive Vice President and Chief Financial Officer

 

 

 

Cloud Peak Energy Logistics LLC

 

Cloud Peak Energy Logistics I LLC

 

 

 

 

 

By:

/s/ Heath A. Hill

 

By:

/s/ Heath A. Hill

Name: Heath A. Hill

 

Name: Heath A. Hill

Title: Executive Vice President and Chief Financial Officer

 

Title: Executive Vice President and Chief Financial Officer

 

 

 

Cloud Peak Energy Resources LLC

 

Cloud Peak Energy Services Company

 

 

 

 

 

By:

/s/ Heath A. Hill

 

By:

/s/ Heath A. Hill

Name: Heath A. Hill

 

Name: Heath A. Hill

Title: Executive Vice President and Chief Financial Officer

 

Title: Executive Vice President and Chief Financial Officer

 

Signature Page to Second Amendment to Asset Purchase Agreement

 

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Cordero Mining LLC

 

Cordero Mining Holdings LLC

 

 

 

 

 

By:

/s/ Heath A. Hill

 

By:

/s/ Heath A. Hill

Name: Heath A. Hill

 

Name: Heath A. Hill

Title: Executive Vice President and Chief Financial Officer

 

Title: Executive Vice President and Chief Financial Officer

 

 

 

 

 

 

Kennecott Coal Sales LLC

 

NERCO LLC

 

 

 

 

 

By:

/s/ Heath A. Hill

 

By:

/s/ Heath A. Hill

Name: Heath A. Hill

 

Name: Heath A. Hill

Title: Executive Vice President and Chief Financial Officer

 

Title: Executive Vice President and Chief Financial Officer

 

 

 

 

 

 

NERCO Coal LLC

 

NERCO Coal Sales LLC

 

 

 

 

 

By:

/s/ Heath A. Hill

 

By:

/s/ Heath A. Hill

Name: Heath A. Hill

 

Name: Heath A. Hill

Title: Executive Vice President and Chief Financial Officer

 

Title: Executive Vice President and Chief Financial Officer

 

 

 

Prospect Land and Development LLC

 

Resource Development LLC

 

 

 

 

 

By:

/s/ Heath A. Hill

 

By:

/s/ Heath A. Hill

Name: Heath A. Hill

 

Name: Heath A. Hill

Title: Executive Vice President and Chief Financial Officer

 

Title: Executive Vice President and Chief Financial Officer

 

 

 

Spring Creek Coal LLC

 

Western Minerals LLC

 

 

 

 

 

By:

/s/ Heath A. Hill

 

By:

/s/ Heath A. Hill

Name: Heath A. Hill

 

Name: Heath A. Hill

Title: Executive Vice President and Chief Financial Officer

 

Title: Executive Vice President and Chief Financial Officer

 

 

 

Youngs Creek Holdings I LLC

 

Youngs Creek Holdings II LLC

 

 

 

 

 

By:

/s/ Heath A. Hill

 

By:

/s/ Heath A. Hill

Name: Heath A. Hill

 

Name: Heath A. Hill

Title: Executive Vice President and Chief Financial Officer

 

Title: Executive Vice President and Chief Financial Officer

 

Signature Page to Second Amendment to Asset Purchase Agreement

 

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Youngs Creek Mining Company, LLC

 

Sequatchie Valley Coal Corporation

 

 

 

 

 

By:

/s/ Heath A. Hill

 

By:

/s/ Heath A. Hill

Name: Heath A. Hill

 

Name: Heath A. Hill

Title: Executive Vice President and Chief Financial Officer

 

Title: Executive Vice President and Chief Financial Officer

Title:

 

Title:

 

 

 

Cordero Oil and Gas LLC

 

 

 

 

 

 

By:

/s/ Heath A. Hill

 

Name: Heath A. Hill

 

 

Title: Executive Vice President and Chief Financial Officer

 

 

 

Signature Page to Second Amendment to Asset Purchase Agreement

 

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EXHIBIT E

 

[See attached.]

 

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Exhibit E

 

Term Sheet for $40.0 Million Promissory Note

 

TERM

 

SUMMARY

 

 

 

Amount

 

·                  $40,000,000

 

·                  If the Note is not repaid in full (i) on the first
anniversary of the closing date, the principal amount will be increased by an
additional $1,000,000, (ii) on the second anniversary of the closing date, the
principal amount will be increased by an additional $2,000,000, (iii) on the
third anniversary of the closing date, the principal amount will be increased by
an additional $3,000,000, and (iv) on the fourth anniversary of the closing
date, the principal amount will be increased by an additional $3,000,000,

 

 

 

Payor

 

·                  Purchaser

 

 

 

Payee/Structure

 

·                  Either, at the option of the Payee, (i) the Company with
immediate assignment to its DIP Lenders and Senior Secured Lenders or (ii) a
newly formed entity formed by the DIP and Senior Secured Lenders. The structure
of Payor and Payee, including for tax purposes, shall be acceptable to the DIP
Lenders and Senior Secured Lenders in all respects.

 

 

 

Loan Parties

 

·                  Payor and all Subsidiaries of the Payor (“Payor
Subsidiaries”)

 

 

 

Interest

 

·                  Interest rate: 9.0% per annum payable in cash each quarter

 

·                  Default rate: Additional 3.0% per annum, payable in cash on
demand

 

 

 

Amortization

 

·                  $2,000,000 quarterly through maturity

 

 

 

Mandatory Prepayments

 

·                  Prepayments required from 100% of extraordinary receipts and
asset sale proceeds

 

 

 

Maturity

 

·                  Five-year note maturing five years from closing on the sale
of the CPE Assets to Purchaser

 

·                  All outstanding principal and accrued and unpaid interest
must be paid in cash at maturity

 

 

 

Payments

 

·                  All payments must be received by 12 noon New York City time

 

·                  Payor may prepay all or any part of the principal amount
without prepayment penalty or premium

 

·                  The indebtedness evidenced by the note shall not be subject
to setoff, reduction or any counterclaim by any of the Loan Parties

 

 

 

Collateral

 

·                  None

 

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TERM

 

SUMMARY

 

 

 

Events of Default

 

Typical and customary events of default with respect to the Loan Parties,
acceptable to the Payee and its counsel, including, without limitation:

 

·                  A Loan Party fails to pay any amount when due under any Loan
Document, subject to mutually agreed cure period

 

·                  A Loan Party commences a voluntary bankruptcy

 

·                  An involuntary bankruptcy is commenced against a Loan Party

 

·                  A trustee, receiver, assignee, liquidator or similar official
is appointed for a Loan Party or a majority of a Loan Party’s assets

 

·                  The dissolution, termination of existence, cessation of a
substantial part of the business of the Payor or any material Subsidiary

 

·                  Any event or condition occurs that results in any material
debt (amounts to be determined) of a Loan Party becoming due prior to its stated
maturity or that enables or permits a holder of such debt to cause such debt to
be come due and payable prior to its scheduled maturity

 

·                  One or more material judgments shall be rendered against a
Loan Party and shall remain undischarged for a period of time to be determined
during which execution is not stayed and/or an appeal bond is posted

 

·                  Any default or event of default occurs under any Loan
Document, subject to mutually agreed cure periods

 

·                  Any representation or warranty by a Loan Party in a Loan
Document is untrue in any material respect on the date on which made, deemed
made or confirmed

 

·                  A Loan Party fails to comply with covenants in any Loan
Document, subject to mutually agreed materiality and cure provisions

 

·                  Any Loan Document shall cease to be enforceable or in full
force and effect

 

·                  ERISA defaults

 

·                  Change of Control

 

·                  Certain events with respect to key management employees,
including loss/departure of management

 

·                  The exercise of remedies will be subject to a standstill
period for 120 days after notice to the secured lenders has been given

 

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TERM

 

SUMMARY

 

 

 

Affirmative Covenants

 

Typical and customary affirmative covenants with respect to the Loan Parties
acceptable to the Payee and its counsel, including, without limitation:

 

·                  Notification of occurrence of an event of default

 

·                  Notification of defaults and other material events (including
material adverse condition, litigation, ERISA event, material change in
accounting or financial reporting practices, disposition of property, sale of
equity, incurrence of debt)

 

·                  Delivery of information, including to comply with beneficial
ownership regulations

 

·                  Maintain proper books and records in accordance with GAAP

 

·                  Maintain good and marketable title to the property, free and
clear of all liens, other than customary permitted liens to be agreed

 

·                  Maintain and preserve the property in all material respects
and keep the same in good repair and working order

 

·                  Deliver quarterly and audited annual financial statements for
Loan Parties and other financial reporting in manner acceptable to the Payee

 

·                  Maintain insurance

 

·                  Payment of taxes

 

·                  Compliance with laws

 

·                  Compliance with environmental laws

 

·                  Preservation of existence

 

·                  Fiscal year

 

·                  Inspection rights

 

·                  Anti-bribery, sanctions and anti-corruption compliance of
Payor

 

·                  Further assurances and additional guarantees and collateral

 

·                  Payment of obligations, compliance with and enforcement of
materials contracts

 

·                  Intellectual Property

 

·                  Customary further assurances covenant with respect to liens
and guarantees

 

 

 

 

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TERM

 

SUMMARY

 

 

 

Negative Covenants

 

Typical and customary negative covenants with respect to the Loan Parties
(subject to customary permitted exceptions) acceptable to the Payee and its
counsel, including, without limitation:

 

·                  No liens other than (i) liens in favor of the Payee,
(ii) liens securing Permitted Senior Lien Debt and the APS Note, and (iii) other
permitted liens to be agreed

 

·                  Certain restrictions on sales, leases, assignments or other
dispositions. All dispositions shall be for fair market value and cash
consideration and all proceeds of dispositions (other than with respect to
inventory in the ordinary course of business) shall be used to prepay the
obligations under the New Note.

 

·                  No debt (including guarantees) owed by any Loan Party or any
subsidiary thereof other than senior debt (which debt may be secured by liens)
in an amount not to exceed $120,000,000 in the aggregate(the “Permitted Senior
Lien Debt”) plus the APS Note.

 

·                  Restrictions on mergers, dissolution and other fundamental
changes

 

·                  Restrictions on changes in nature of business

 

·                  No dividends and other restricted payments

 

·                  Restrictions on loans/investments, subject to agreed baskets

 

·                  Restrictions on limitations on subsidiary
distributions/negative pledges and other burdensome agreements

 

·                  Restrictions on ability to change governing documents

 

·                  Restrictions on accounting methods/fiscal year

 

·                  Anti-money laundering, sanctions anti-terrorism

 

·                  Anti-bribery and anti-corruption

 

·                  Restrictions on capital expenditures, with commercially
reasonable capital expenditure thresholds

 

·                  Affiliate transactions required to be at arms’ length and on
commercially reasonable terms

 

·                  Restrictions on amendments to material agreements

 

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TERM

 

SUMMARY

 

 

 

Representations and Warranties

 

·                  None

 

 

 

Closing Conditions

 

·                  Typical and customary closing conditions precedent,
including, without limitation, satisfactory documentation, due diligence,
resolutions, certificates and legal opinions

 

 

 

Expenses

 

·                  Each party shall pay their own costs in the initial
documentation of the Loan Documents, provided that the Loan Documents shall
provide for customary reimbursement of fees and expenses.

 

 

 

Indemnification

 

·                  The Loan Documents will provide customary and appropriate
provisions relating to indemnity and related matters and tax gross-up

 

 

 

Assignments

 

·                  The Payee may sell or assign any Loan Document and related
rights without the prior consent of Payor.

 

·                  No Loan Party may sell or assign any Loan Document or related
rights without the prior consent of the Payee.

 

This Term Sheet and the written agreement memorializing these terms shall be
governed by the laws of the State of New York.

 

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