Exhibit
4.2


 


$600,000,000


 


CLOUD
PEAK ENERGY RESOURCES LLC


and


CLOUD
PEAK ENERGY FINANCE CORP.


 


$300,000,000
8.250% Senior Notes due 2017


 


$300,000,000
8.500% Senior Notes due 2019


 


REGISTRATION
RIGHTS AGREEMENT


 


November 25, 2009


 


Morgan Stanley & Co. Incorporated


Credit Suisse Securities (USA) LLC


RBC Capital Markets Corporation,


  As Representatives of the Several
Purchasers,


c/o Morgan Stanley & Co. Incorporated


          1585
Broadway


             New
York, N.Y. 10036


 


Dear Sirs:


 


Cloud Peak Energy Resources LLC, a Delaware limited
liability company (the “Issuer”) and Cloud Peak Energy Finance Corp., a
Delaware corporation (the “Co-Issuer” and together with the Issuer, the “Issuers”),
propose to issue and sell to Morgan Stanley & Co. Incorporated, Credit
Suisse Securities (USA) LLC and RBC Capital Markets Corporation, as
representatives of the initial purchasers (collectively, the “Initial
Purchasers”), upon the terms set forth in a purchase agreement dated November 20,
2009 (the “Purchase Agreement”), U.S.$300,000,000 aggregate principal amount of
their 8.250% Senior Notes due 2017 (the “2017 Notes”) and U.S.$ 300,000,000
aggregate principal amount of their 8.500% Senior Notes due 2019 (the “2019
Notes” and together with the 2017 Notes, the “Initial Securities”) to be
unconditionally guaranteed (the “Guaranties”) by the guarantors party hereto
(the “Guarantors” and together with the Issuers, the “Company”).  The Initial Securities will be issued
pursuant to an Indenture, dated as of November 25, 2009, (the “Indenture”)
among the Issuers the Guarantors named therein, Wilmington Trust Company (the “Trustee”)
and Citibank, N.A. (the “Securities Administrator”).  As an inducement to the Initial Purchasers,
the Company agrees with the Initial Purchasers, for the benefit of the holders
of the Initial Securities (including, without limitation, the Initial
Purchasers), the Exchange Securities (as defined below) and the Private
Exchange Securities (as defined below) (collectively the “Holders”), as
follows:


 


1.  Registered
Exchange Offer.  The Company shall, at its own cost,
prepare and, not later than 270 days after (or if the 270th day is not a
business day, the first business day thereafter) the date of original issue of
the Initial Securities (the “Issue Date”), file with the Securities and
Exchange Commission (the “Commission”) a registration statement (the “Exchange
Offer Registration Statement”) on an appropriate form under the Securities Act
of 1933, as amended (the “Securities Act”), with respect to a proposed offer
(the “Registered Exchange Offer”) to the Holders of Transfer Restricted
Securities (as defined in Section 6 hereof), who are not prohibited by any
law or policy of the Commission from participating in the Registered Exchange
Offer, to issue and deliver to such Holders, in exchange for the Initial
Securities, a like aggregate principal amount of debt securities (the “Exchange
Securities”) of the Company issued under the Indenture and identical in all
material respects to the Initial Securities (except for the transfer
restrictions relating to


 

















 


the Initial Securities and the provisions relating to
the matters described in Section 6 hereof) that would be registered under
the Securities Act.  The Company shall
use its commercially reasonable efforts to cause such Exchange Offer
Registration Statement to become effective under the Securities Act within 360
days (or if the 360th day is not a business day, the first business day
thereafter) after the Issue Date (such 360th day, an “effectiveness deadline”)
of the Initial Securities and shall keep the Exchange Offer Registration
Statement effective for not less than 30 days (or longer, if required by
applicable law) after the date notice of the Registered Exchange Offer is
mailed to the Holders (such period being called the “Exchange Offer
Registration Period”).


 


If the Company effects the Registered Exchange Offer,
the Company will be entitled to close the Registered Exchange Offer 30 days
after the commencement thereof provided that the Company has accepted all the
Initial Securities theretofore validly tendered in accordance with the terms of
the Registered Exchange Offer.


 


Following the declaration of the effectiveness of the
Exchange Offer Registration Statement, the Company shall promptly commence the
Registered Exchange Offer, it being the objective of such Registered Exchange
Offer to enable each Holder of Transfer Restricted Securities (as defined in Section 6
hereof) electing to exchange the Initial Securities for Exchange Securities
(assuming that such Holder is not an affiliate of Cloud Peak Energy Inc. within
the meaning of the Securities Act, acquires the Exchange Securities in the
ordinary course of such Holder’s business, is not a broker-dealer tendering
Securities acquired directly from the Company for its own account and has no
arrangements or understandings with any person to participate in the
distribution of the Exchange Securities and is not prohibited by any law or
policy of the Commission from participating in the Registered Exchange Offer)
to trade such Exchange Securities from and after their receipt without any
limitations or restrictions under the Securities Act and without material
restrictions under the securities laws of the several states of the United
States.


 


The Company acknowledges that, pursuant to current
interpretations by the Commission’s staff of Section 5 of the Securities
Act, in the absence of an applicable exemption therefrom, (i) each Holder
which is a broker-dealer electing to exchange Securities, acquired for its own
account as a result of market making activities or other trading activities,
for Exchange Securities (an “Exchanging Dealer”), is required to deliver a
prospectus containing the information set forth in (a) Annex A hereto on
the cover, (b) Annex B hereto in the “Exchange Offer Procedures” section
and the “Purpose of the Exchange Offer” section, and (c) Annex C hereto in
the “Plan of Distribution” section of such prospectus in connection with a sale
of any such Exchange Securities received by such Exchanging Dealer pursuant to
the Registered Exchange Offer and (ii) an Initial Purchaser that elects to
sell Exchange Securities acquired in exchange for Securities constituting any
portion of an unsold allotment is required to deliver a prospectus containing
the information required by Items 507 or 508 of Regulation S-K under the
Securities Act, as applicable, in connection with such sale.


 


The Company shall use its commercially reasonable
efforts to keep the Exchange Offer Registration Statement effective and to amend
and supplement the prospectus contained therein, in order to permit such
prospectus to be lawfully delivered by all persons subject to the prospectus
delivery requirements of the Securities Act for such period of time as such
persons must comply with such requirements in order to resell the Exchange
Securities; provided, however, that (i) in the case where such prospectus
and any amendment or supplement thereto must be delivered by an Exchanging
Dealer or an Initial Purchaser, such period shall be the lesser of 180 days and
the date on which all Exchanging Dealers and the Initial Purchasers have sold
all Exchange Securities held by them (unless such period is extended pursuant
to Section 3(j) below) and (ii) the Company shall make such
prospectus and any amendment or supplement thereto, available to any
broker-dealer for use in connection with any resale of any Exchange Securities
for a period of not less than 90 days after the consummation of the Registered
Exchange Offer.


 


If, upon consummation of the Registered Exchange
Offer, any Initial Purchaser holds Initial Securities acquired by it as part of
its initial distribution, the Company, simultaneously with the delivery of


 

















 


the Exchange Securities pursuant to the Registered
Exchange Offer, shall issue and deliver to such Initial Purchaser upon the
written request of such Initial Purchaser, in exchange (the “Private Exchange”)
for the Initial Securities held by such Initial Purchaser, a like principal
amount of debt securities of the Company issued under the Indenture and
identical in all material respects (including the existence of restrictions on
transfer under the Securities Act and the securities laws of the several states
of the United States, but excluding provisions relating to the matters described
in Section 6 hereof) to the Initial Securities (the “Private Exchange
Securities”).  The Initial Securities,
the Exchange Securities and the Private Exchange Securities are herein
collectively called the “Securities”.


 


In connection with the Registered Exchange Offer, the
Company shall:


 


(a)  mail to
each Holder a copy of the prospectus forming part of the Exchange Offer
Registration Statement, together with an appropriate letter of transmittal and
related documents provided, that
the Company shall only be required to mail such prospectus to Holders of which
the Company is aware after due inquiry;


 


(b)  keep the
Registered Exchange Offer open for not less than 30 days (or longer, if
required by applicable law) after the date notice thereof is mailed to the
Holders;


 


(c)  utilize
the services of a depositary for the Registered Exchange Offer with an address
in the Borough of Manhattan, The City of New York, which may be the Trustee,
the Securities Administrator or an affiliate of the Trustee or the Securities
Administrator;


 


(d)  permit
Holders to withdraw tendered Securities at any time prior to the close of
business, New York time, on the last business day on which the Registered
Exchange Offer shall remain open; and


 


(e)  otherwise
comply with all applicable laws.


 


As soon as practicable after the close of the
Registered Exchange Offer or the Private Exchange, as the case may be, the
Company shall:


 


(x)  accept for
exchange all the Securities validly tendered and not withdrawn pursuant to the
Registered Exchange Offer and the Private Exchange;


 


(y)  deliver to
the Trustee or the Securities Administrator for cancellation all the Initial
Securities so accepted for exchange; and


 


(z)  cause the
Trustee or the Securities Administrator as soon as practicable to authenticate
and deliver to each Holder of the Initial Securities, Exchange Securities or
Private Exchange Securities, as the case may be, equal in principal amount to
the Initial Securities of such Holder so accepted for exchange.


 


The Indenture will provide that the Exchange
Securities will not be subject to the transfer restrictions set forth in the
Indenture and that all the Securities of a series will vote and consent
together on all matters as one class and that none of the Securities of a
series will have the right to vote or consent as a class separate from one
another on any matter.


 


Interest on each Exchange Security and Private
Exchange Security issued pursuant to the Registered Exchange Offer and in the
Private Exchange will accrue from the last interest payment date on which
interest was paid on the Initial Securities surrendered in exchange therefor
or, if no interest has been paid on the Initial Securities, from the date of
original issue of the Initial Securities.


 

















 


Each Holder participating in the Registered Exchange
Offer shall be required to represent to the Company that at the time of the
consummation of the Registered Exchange Offer (i) any Exchange Securities
received by such Holder will be acquired in the ordinary course of business, (ii) such
Holder is not engaged in, and does not intend to engage in, and will have no
arrangements or understanding with any person to participate in the
distribution of the Securities or the Exchange Securities within the meaning of
the Securities Act, (iii) such Holder is not an “affiliate,” as defined in
Rule 405 of the Securities Act, of the Issuers or a broker-dealer
tendering Initial Securities acquired directly from the Company for its own
account or if it is an affiliate, such Holder will comply with the registration
and prospectus delivery requirements of the Securities Act to the extent
applicable, (iv) if such Holder is not a broker-dealer, that it is not
engaged in, and does not intend to engage in, the distribution of the Exchange
Securities and (v) if such Holder is a broker-dealer, that it will receive
Exchange Securities for its own account in exchange for Initial Securities that
were acquired as a result of market-making activities or other trading
activities and that it will be required to acknowledge that it will deliver a
prospectus in connection with any resale of such Exchange Securities.


 


Notwithstanding any other provisions hereof, the
Company will ensure that (i) any Exchange Offer Registration Statement and
any amendment thereto and any prospectus forming part thereof and any
supplement thereto complies in all material respects with the Securities Act
and the rules and regulations thereunder, (ii) any Exchange Offer
Registration Statement and any amendment thereto does not, when it becomes
effective, contain an untrue statement of a material fact or omit to state a
material fact required to be stated therein or necessary to make the statements
therein not misleading and (iii) any prospectus forming part of any
Exchange Offer Registration Statement, and any supplement to such prospectus,
does not include an untrue statement of a material fact or omit to state a
material fact required to be stated therein or necessary in order to make the
statements therein, in the light of the circumstances under which they were
made, not misleading; provided,
that the Company shall not be responsible for written information furnished to
the Company by or on behalf of Holders expressly for use therein.


 


In addition, notwithstanding anything herein to the
contrary, the Company will have no further obligation under this Agreement upon
consummation of the Registered Exchange Offer to any Holder of Transfer
Restricted Securities who was eligible to participate in the Registered
Exchange Offer and did not participate.


 


2.  Shelf
Registration.  If, (i) because
of any change in law or in applicable interpretations thereof by the staff of
the Commission, the Company is not permitted to effect a Registered Exchange
Offer, as contemplated by Section 1 hereof, (ii) the Exchange Offer
Registration Statement is not declared effective by the 360th day after the
Issue Date or the Registered Exchange Offer is not consummated within 40 days
after such date, (iii) any Initial Purchaser so requests with respect to
the Initial Securities (or the Private Exchange Securities) not eligible to be
exchanged for Exchange Securities in the Registered Exchange Offer and held by
it following consummation of the Registered Exchange Offer or (iv) any
Holder (other than an Exchanging Dealer) is not eligible to participate in the
Registered Exchange Offer or, in the case of any Holder (other than an
Exchanging Dealer) that participates in the Registered Exchange Offer, such
Holder does not receive freely tradeable Exchange Securities on the date of the
exchange, the Company shall take the following actions:


 


(a)  The
Company shall, at its cost, no more than 270 days after so required or
requested pursuant to this Section 2, file with the Commission and
thereafter shall use its commercially reasonable efforts to cause to be
declared effective (unless it becomes effective automatically upon filing) no
more than 360 days after such requirement or request pursuant to this Section 2
(such 360th day, an “effectiveness deadline”), a registration statement (the “Shelf
Registration Statement” and, together with the Exchange Offer Registration
Statement, a “Registration Statement”) on an appropriate form under the
Securities Act relating to the offer and sale of the


 

















 


Transfer Restricted Securities (as defined in Section 6
hereof) by the Holders thereof from time to time in accordance with the methods
of distribution set forth in the Shelf Registration Statement and Rule 415
under the Securities Act (hereinafter, the “Shelf Registration”); provided, however,
that no Holder (other than an Initial Purchaser) shall be entitled to have the
Securities held by it covered by such Shelf Registration Statement unless such
Holder agrees in writing to be bound by all the provisions of this Agreement
applicable to such Holder.


 


(b)  The
Company shall use its commercially reasonable efforts to keep the Shelf
Registration Statement continuously effective in order to permit the prospectus
included therein to be lawfully delivered by the Holders of the relevant
Securities, for a period of one year (or for such longer period if extended
pursuant to Section 3(j) below) from the Issue Date or such shorter
period that will terminate when all the Securities covered by the Shelf
Registration Statement (i) have been sold pursuant thereto or (ii) are
no longer restricted securities (as defined in Rule 144 under the
Securities Act, or any successor rule thereof).  The Company shall be deemed not to have used
its commercially reasonable efforts to keep the Shelf Registration Statement
effective during the requisite period if it voluntarily takes any action that
would result in Holders of Securities covered thereby not being able to offer
and sell such Securities during that period, unless such action is required by
applicable law or permitted pursuant to Section 3(k) below.


 


(c)  Notwithstanding
any other provisions of this Agreement to the contrary, the Company shall cause
the Shelf Registration Statement and the related prospectus and any amendment
or supplement thereto, as of its respective effective date, (i) to comply
in all material respects with the applicable requirements of the Securities Act
and the rules and regulations of the Commission and (ii) not to
contain any untrue statement of a material fact or omit to state a material
fact required to be stated therein or necessary in order to make the statements
therein, in light of the circumstances under which they were made, not
misleading, provided, that the
Company shall not be responsible for written information furnished to the
Company by or on behalf of Holders expressly for use therein.


 


3.  Registration
Procedures.  In connection
with any Shelf Registration contemplated by Section 2 hereof and, to the
extent applicable, any Registered Exchange Offer contemplated by Section 1
hereof, the following provisions shall apply:


 


(a)  The
Company shall (i) furnish to each of the Representatives, prior to the
filing thereof with the Commission, a copy of the Registration Statement and
each amendment thereof and each supplement, if any, to the prospectus included
therein and, in the event that an Initial Purchaser (with respect to any
portion of an unsold allotment from the original offering) is participating in
the Registered Exchange Offer or the Shelf Registration Statement, the Company
shall use its commercially reasonable efforts to reflect in each such document,
when so filed with the Commission, such comments as the Representatives
reasonably may propose; (ii) include the information set forth in Annex A
hereto on the cover, in Annex B hereto in the “Exchange Offer Procedures”
section and the “Purpose of the Exchange Offer” section and in Annex C hereto
in the “Plan of Distribution” section of the prospectus forming a part of the
Exchange Offer Registration Statement and include the information set forth in
Annex D hereto in the Letter of Transmittal delivered pursuant to the
Registered Exchange Offer; (iii) if requested by a Representative, include
the information required by Items 507 or 508 of Regulation S-K under the
Securities Act, as applicable, in the prospectus forming a part of the Exchange
Offer Registration Statement; (iv) include within the prospectus contained
in the Exchange Offer Registration Statement a section entitled “Plan of
Distribution,” reasonably acceptable to the Representatives, which shall
contain a summary statement of the positions taken or policies made by the
staff of the Commission with respect to the potential “underwriter” status of
any broker-dealer that is the beneficial owner (as defined in Rule 13d-3
under the Securities Exchange Act of 1934, as amended


 

















 


(the “Exchange Act”)) of Exchange Securities received
by such broker-dealer in the Registered Exchange Offer (a “Participating
Broker-Dealer”), whether such positions or policies have been publicly
disseminated by the staff of the Commission or such positions or policies, in
the reasonable judgment of the Representatives based upon advice of counsel
(which may be in-house counsel), represent the prevailing views of the staff of
the Commission; and (v) in the case of a Shelf Registration Statement,
include in the prospectus included in the Shelf Registration Statement (or, if
permitted by Commission Rule 430B(b), in a prospectus supplement that
becomes a part thereof pursuant to Commission Rule 430B(f)) that is
delivered to any Holder pursuant to Section 3(d) and (f), the
names of the Holders, who propose to sell Securities pursuant to the Shelf
Registration Statement, as selling securityholders.


 


(b)  The
Company shall give written notice to the Representatives, the Holders of the
Securities covered by any Shelf Registration Statement (but only to such
Holders named as selling securityholders in the prospectus forming part of such
Shelf Registration Statement or in a supplement to such prospectus) and any
Participating Broker-Dealer from whom the Company has received prior written
notice that it will be a Participating Broker-Dealer in the Registered Exchange
Offer (which notice pursuant to clauses (ii)-(vi) hereof shall be
accompanied by an instruction to suspend the use of the prospectus until the
requisite changes have been made):


 


(i)  when the
Registration Statement or any amendment thereto has been filed with the
Commission and when the Registration Statement or any post-effective amendment
thereto has become effective;


 


(ii)  of any
request by the Commission for amendments or supplements to the Registration
Statement or the prospectus included therein or for additional information;


 


(iii)  of the
issuance by the Commission of any stop order suspending the effectiveness of
the Registration Statement or the initiation of any proceedings for that
purpose;


 


(iv) of the issuance
by the Commission of a notification of objection to the use of the form on
which the Registration Statement has been filed, and of the happening of any
event that causes the Company to become an “ineligible issuer,” as defined in
Commission Rule 405;


 


(v)  of the
receipt by the Company or its legal counsel of any notification with respect to
the suspension of the qualification of the Securities for sale in any
jurisdiction or the initiation or threatening of any proceeding for such
purpose; and


 


(vi)  of the
happening of any event that requires the Company to make changes in the
Registration Statement or the prospectus in order that the Registration
Statement or the prospectus do not contain an untrue statement of a material
fact nor omit to state a material fact required to be stated therein or
necessary to make the statements therein (in the case of the prospectus, in
light of the circumstances under which they were made) not misleading.


 


(c)  The
Company shall make every reasonable effort to obtain the withdrawal at the
earliest possible time, of any order suspending the effectiveness of the
Registration Statement.


 


(d)  The Company
shall furnish to each Holder of Securities included within the coverage of the
Shelf Registration, without charge, at least one copy of the Shelf Registration
Statement and any post-effective amendment or supplement thereto, including
financial statements and schedules,


 

















 


and, if the Holder so requests in writing, all
exhibits thereto (including those, if any, incorporated by reference).


 


(e)  The
Company shall deliver to each Exchanging Dealer or Representative who so
requests, without charge, at least one copy of the Exchange Offer Registration
Statement and any post-effective amendment thereto, including financial
statements and schedules, and, if any Exchanging Dealer or Representative
request in writing, all exhibits thereto (including those incorporated by
reference).


 


(f)  The
Company shall, during the Shelf Registration Period, deliver to each Holder of
Securities included within the coverage of the Shelf Registration, without
charge, as many copies of the prospectus (including each preliminary
prospectus) included in the Shelf Registration Statement and any amendment or
supplement thereto as such person may reasonably request. The Company consents,
subject to the provisions of this Agreement, to the use of the prospectus or
any amendment or supplement thereto by each of the selling Holders of the
Securities in connection with the offering and sale of the Securities covered
by the prospectus, or any amendment or supplement thereto, included in the
Shelf Registration Statement.


 


(g)  The Company
shall deliver to each Initial Purchaser, any Exchanging Dealer, any
Participating Broker-Dealer and such other persons required to deliver a
prospectus following the Registered Exchange Offer, without charge, as many
copies of the final prospectus included in the Exchange Offer Registration
Statement and any amendment or supplement thereto as such persons may
reasonably request.  The Company
consents, subject to the provisions of this Agreement, to the use of the prospectus
or any amendment or supplement thereto by any Initial Purchaser, if necessary,
any Participating Broker-Dealer and such other persons required to deliver a
prospectus following the Registered Exchange Offer in connection with the
offering and sale of the Exchange Securities covered by the prospectus, or any
amendment or supplement thereto, included in such Exchange Offer Registration
Statement.


 


(h)  Prior to
any public offering of the Securities, pursuant to any Registration Statement,
the Company shall register or qualify or cooperate with the Holders of the
Securities included therein and their respective counsel in connection with the
registration or qualification of the Securities for offer and sale under the
securities or “blue sky” laws of such states of the United States as any Holder
of the Securities reasonably requests in writing and do any and all other acts
or things necessary or advisable to enable the offer and sale in such
jurisdictions of the Securities covered by such Registration Statement;
provided, however, that the Company shall not be required to (i) qualify
generally to do business in any jurisdiction where it is not then so qualified
or (ii) take any action which would subject it to general service of
process or to taxation in any jurisdiction where it is not then so subject.


 


(i)  The
Company shall cooperate with the Holders of the Securities to facilitate the
timely preparation and delivery of certificates representing the Securities to
be sold pursuant to any Registration Statement free of any restrictive legends and
in such denominations and registered in such names as the Holders may request a
reasonable period of time prior to sales of the Securities pursuant to such
Registration Statement.


 


(j)  Upon the
occurrence of any event contemplated by paragraphs (ii) through (vi) of
Section 3(b) above or Section 3(k) below during the period
for which the Company is required to maintain an effective Registration
Statement, the Company shall promptly prepare and file a post-effective
amendment to the Registration Statement or a supplement to the related
prospectus and any other required document so that, as thereafter delivered to
Holders of the Securities or purchasers of Securities, the prospectus will not
contain an untrue statement of a material fact or


 

















 


omit to state any material fact required to be stated
therein or necessary to make the statements therein, in light of the
circumstances under which they were made, not misleading.  If the Company notifies the Initial Purchasers,
the Holders of the Securities and any known Participating Broker-Dealer in
accordance with paragraphs (ii) through (vi) of Section 3(b) above
or Section 3(k) below to suspend the use of the prospectus until the
requisite changes to the prospectus have been made, then the Initial
Purchasers, the Holders of the Securities and any such Participating
Broker-Dealers shall suspend use of such prospectus, and the period of
effectiveness of the Shelf Registration Statement provided for in Section 2(b) above
and the Exchange Offer Registration Statement provided for in Section 1
above shall each be extended by the number of days from and including the date
of the giving of such notice to and including the date when the Initial
Purchasers, the Holders of the Securities and any known Participating Broker-Dealer
shall have received such amended or supplemented prospectus pursuant to this Section 3(j).


 


(k)  If the
Board of Directors of the Company has resolved that the Company has a bona fide
business purpose for suspending the availability of a Shelf Registration
Statement and the related prospectus, the Company shall give notice (without
notice of the nature or details of such business purpose) to the Holders (but
only to such Holders named as selling securityholders in the prospectus forming
part of such Shelf Registration Statement or in a supplement to such prospects)
that the availability of the Shelf Registration is suspended and, upon actual
receipt of any such notice, each Holder agrees not to sell any Securities
pursuant to the Shelf Registration until such Holder’s receipt of copies of the
supplemented or amended prospectus, or until it is advised in writing by the
Company that the prospectus may be used and has received copies of any
additional or supplemental filings that are incorporated or deemed incorporated
by reference in such prospectus.  The
period during which the availability of the Shelf Registration and any
prospectus is suspended shall not exceed 45 days in any three-month period or
60 days in any twelve-month period.


 


(l)  Not later
than the effective date of the applicable Registration Statement, the Company
will provide a CUSIP number for the Initial Securities, the Exchange Securities
or the Private Exchange Securities, as the case may be, and provide the
applicable trustee with printed certificates for the Initial Securities, the
Exchange Securities or the Private Exchange Securities, as the case may be, in
a form eligible for deposit with The Depository Trust Company.


 


(m)  The
Company will comply with all rules and regulations of the Commission to
the extent and so long as they are applicable to the Registered Exchange Offer
or the Shelf Registration and will make generally available to its security
holders (or otherwise provide in accordance with Section 11(a) of the
Securities Act) an earnings statement satisfying the provisions of Section 11(a) of
the Securities Act, no later than 45 days after the end of a 12-month period
(or 90 days, if such period is a fiscal year) beginning with the first month of
the Company’s first fiscal quarter commencing after the effective date of the
Registration Statement, which statement shall cover such 12-month period.


 


(n)  The
Company shall cause the Indenture to be qualified under the Trust Indenture Act
of 1939, as amended, in a timely manner and containing such changes, if any, as
shall be necessary for such qualification. 
In the event that such qualification would require the appointment of a
new trustee under the Indenture, the Company shall appoint a new trustee
thereunder pursuant to the applicable provisions of the Indenture.


 


(o)  The
Company may require each Holder of Securities to be sold pursuant to the Shelf
Registration Statement to furnish to the Company such information regarding the
Holder and the distribution of the Securities as the Company may from time to
time reasonably require for inclusion in the Shelf Registration Statement, and
the Company may exclude from such registration


 

















 


the Securities of any Holder that unreasonably fails
to furnish such information within a reasonable time after receiving such
request.


 


(p)  The
Company shall enter into such customary agreements (including, if requested, an
underwriting agreement in customary form) and take all such other appropriate
action, if any, as the Holders of a majority of the Securities to be included
in the Shelf Registration Statement shall reasonably request in order to
facilitate the disposition of the Securities pursuant to any Shelf
Registration.


 


(q)  In the
case of any Shelf Registration, the Company shall (i) make reasonably
available for inspection, upon written request, by the Holders of the
Securities, a representative of the Initial Purchasers to be registered
thereunder, the managing underwriter, if any, participating in any disposition
pursuant to the Shelf Registration Statement and any attorney, accountant or
other agent retained by the Holders of the Securities, such Initial Purchasers
or managing underwriter, to be registered thereunder, all relevant financial
and other records, pertinent corporate documents and properties of the Company
and (ii) cause the Company’s officers, directors, employees, accountants
and auditors to supply all relevant information reasonably requested by such
Holders of the Securities or any such underwriter, attorney, accountant or agent
in connection with the Shelf Registration Statement, in each case, as shall be
reasonably necessary to enable such persons, to conduct a reasonable
investigation within the meaning of Section 11 of the Securities Act;
provided, however, that the foregoing inspection and information gathering
shall be coordinated on behalf of the Initial Purchasers by you and on behalf
of the other parties, by one counsel designated by and on behalf of such other
parties as described in Section 4 hereof; provided, that if any such
information is reasonably identified by the Company as being confidential or
proprietary, each such Person receiving such information shall take such
actions as are reasonably to protect the confidentiality of such information,
and shall sign confidentiality agreements in customary form prior to the
receipt of such information.


 


(r)  In the
case of any Shelf Registration, the Company shall:


 


(i) cause its
officers to execute and deliver all customary documents and certificates and
updates thereof requested by any underwriters of the applicable Securities;


 


(ii) obtain opinions
of counsel to the Company and updates thereof (which counsel and opinions (in
form, scope and substance) shall be reasonably satisfactory to the managing
underwriters, if any) addressed to each selling Holder and the underwriters, if
any, covering such matters as are customarily covered in opinions requested in
underwritten offerings and such other matters as may be reasonably requested by
such Holders and underwriters; and


 


(iii) obtain “comfort”
letters and updates thereof from the independent certified public accountants
of the Company (and, if necessary, any other independent certified public
accountants of any subsidiary of the Company or of any business acquired by the
Company for which financial statements and financial data are, or are required
to be, included in the Registration Statement), addressed to each selling
Holder of Securities registered thereunder and the underwriters, if any, in
customary form and covering matters of the type customarily covered in “comfort”
letters in connection with primary underwritten offerings.


 
















 


(s)  In the
case of the Registered Exchange Offer, if requested by any Initial Purchaser or
any known Participating Broker-Dealer, the Company shall cause its officers to
execute and deliver all customary documents and certificates and updates
thereof requested by any underwriters of the applicable Securities.


 


(t)  If a
Registered Exchange Offer or a Private Exchange is to be consummated, upon
delivery of the Initial Securities by Holders to the Company (or to such other
Person as directed by the Company) in exchange for the Exchange Securities or
the Private Exchange Securities, as the case may be, the Company shall mark, or
caused to be marked, on the Initial Securities so exchanged that such Initial
Securities are being canceled in exchange for the Exchange Securities or the
Private Exchange Securities, as the case may be; in no event shall the Initial
Securities be marked as paid or otherwise satisfied.


 


(u)  The
Company will use its commercially reasonable efforts to if the Initial
Securities have been rated prior to the initial sale of such Initial
Securities, confirm such ratings will apply to the Securities covered by a
Registration Statement.


 


(v)  In the
event that any broker-dealer registered under the Exchange Act shall underwrite
any Securities or participate as a member of an underwriting syndicate or
selling group or “assist in the distribution” (within the meaning of the
Conduct Rules (the “Rules”) of the Financial Industry Regulatory Authority, Inc.
(“FINRA”)) thereof, whether as a Holder of such Securities or as an
underwriter, a placement or sales agent or a broker or dealer in respect
thereof, or otherwise, the Company will assist such broker-dealer in complying
with the requirements of such Rules, including, without limitation, by (i) if
such Rules, including Rule 2720, shall so require, engaging a “qualified
independent underwriter” (as defined in Rule 2720) to participate in the
preparation of the Registration Statement relating to such Securities, to
exercise usual standards of due diligence in respect thereto and, if any
portion of the offering contemplated by such Registration Statement is an
underwritten offering or is made through a placement or sales agent, to
recommend the yield of such Securities, (ii) indemnifying any such qualified
independent underwriter to the extent of the indemnification of underwriters
provided in Section 5 hereof and (iii) providing such information to
such broker-dealer as may be required in order for such broker-dealer to comply
with the requirements of the Rules.


 


(w)  The
Company shall use its commercially reasonable efforts to take all other steps
necessary to effect the registration of the Securities covered by a
Registration Statement contemplated hereby.


 


4.  Registration
Expenses.  The Company shall bear
all fees and expenses incurred in connection with the performance of its
obligations under Sections 1 through 3 hereof (including the reasonable fees
and expenses, if any, of Davis Polk & Wardwell LLP, counsel for the
Initial Purchasers, incurred in connection with the Registered Exchange Offer),
whether or not the Registered Exchange Offer or a Shelf Registration is filed
or becomes effective, and, in the event of a Shelf Registration, shall bear or
reimburse the Holders of the Securities covered thereby for the reasonable fees
and disbursements of one firm of counsel designated by the Holders of a
majority in principal amount of the Initial Securities covered thereby to act
as counsel for the Holders of the Initial Securities in connection therewith.  Except as set forth in the preceding sentence,
each Holder shall pay all underwriting discounts and commissions of any
underwriters with respect to any Securities sold by or on behalf of such
Holder, if any, and any transfer taxes attributable to the sale or disposition
of Securities by a Holder.


 


5.  Indemnification.  (a)  The Company agrees to indemnify and
hold harmless each Holder of the Securities, any Participating Broker-Dealer
and each person, if any, who controls such Holder or such Participating Broker-Dealer
within the meaning of the Securities Act or the Exchange Act (each Holder, any


 

















 


Participating Broker-Dealer and such controlling
persons are referred to collectively as the “Indemnified Parties”) from and
against any losses, claims, damages or liabilities, joint or several, or any  actions in respect thereof (including,
but not limited to, any losses, claims, damages, liabilities or actions
relating to purchases and sales of the Securities) to which each Indemnified
Party may become subject under the Securities Act, the Exchange Act or
otherwise, insofar as such losses, claims, damages, liabilities or actions
arise out of or are based upon any untrue statement or alleged untrue statement
of a material fact contained in a Registration Statement or prospectus or in
any amendment or supplement thereto or in any preliminary prospectus or “issuer
free writing prospectus,” as defined in Commission Rule 433 (“Issuer FWP”),
relating to a Shelf Registration, or arise out of, or are based upon, the omission
or alleged omission to state therein a material fact required to be stated
therein or necessary to make the statements therein not misleading, and shall
reimburse, as incurred, the Indemnified Parties for any legal or other expenses
reasonably incurred by them in connection with investigating or defending any
such loss, claim, damage, liability or action in respect thereof; provided,
however, that the Company shall not be liable in any such case to the extent
that such loss, claim, damage or liability arises out of or is based upon any
untrue statement or alleged untrue statement or omission or alleged omission
made in a Registration Statement or prospectus or in any amendment or
supplement thereto or in any preliminary prospectus or Issuer FWP relating to a
Shelf Registration in reliance upon and in conformity with written information
pertaining to such Holder and furnished to the Company by or on behalf of such
Holder specifically for inclusion therein; provided further, however, that this
indemnity agreement will be in addition to any liability which the Company may
otherwise have to such Indemnified Party. 
The Company shall also indemnify underwriters, their officers and
directors and each person who controls such underwriters within the meaning of
the Securities Act or the Exchange Act to the same extent as provided above
with respect to the indemnification of the Holders of the Securities if
requested by such Holders.  The Company
shall not, in connection with any one such action or proceeding or separate but
substantially similar or related actions or proceedings in the same
jurisdiction arising out of the same general allegations or circumstances, be
liable for the reasonable fees and expenses of more than one separate firm of
attorneys (in addition to any local counsel) at any time for such Indemnified
Holders, which firm shall be designated by the Holders.


 


(b)  Each Holder of the Securities,
severally and not jointly, will indemnify and hold harmless the Company and
each person, if any, who controls the Company within the meaning of the
Securities Act or the Exchange Act from and against any losses, claims, damages
or liabilities or any actions in respect thereof, to which the Company or any
such controlling person may become subject under the Securities Act, the
Exchange Act or otherwise, insofar as such losses, claims, damages, liabilities
or actions arise out of or are based upon any untrue statement or alleged
untrue statement of a material fact contained in a Registration Statement or
prospectus or in any amendment or supplement thereto or in any preliminary
prospectus or Issuer FWP relating to a Shelf Registration, or arise out of or
are based upon the omission or alleged omission to state therein a material
fact necessary to make the statements therein not misleading, but in each case
only to the extent that the untrue statement or omission or alleged untrue
statement or omission was made in reliance upon and in conformity with written
information pertaining to such Holder and furnished to the Company by or on
behalf of such Holder specifically for inclusion therein; and, subject to the
limitation set forth immediately preceding this clause, shall reimburse, as
incurred, the Company for any legal or other expenses reasonably incurred by
the Company or any such controlling person in connection with investigating or
defending any loss, claim, damage, liability or action in respect thereof.  This indemnity agreement will be in addition
to any liability which such Holder may otherwise have to the Company or any of
its controlling persons.


 


(c)  Promptly after receipt by an
indemnified party under this Section 5 of notice of the commencement of
any action or proceeding (including a governmental investigation), such
indemnified party will, if a claim in respect thereof is to be made against the
indemnifying party under this Section 5, notify the indemnifying party of
the commencement thereof; but the failure to notify the indemnifying party
shall not relieve the indemnifying party from any liability that it may have
under subsection (a) or (b) above except to the extent that it has
been materially prejudiced (through the forfeiture of substantive rights or


 

















 


defenses) by such failure; and provided further that
the failure to notify the indemnifying party shall not relieve it from any
liability that it may have to an indemnified party otherwise than under
subsection (a) or (b) above. 
In case any such action is brought against any indemnified party, and it
notifies the indemnifying party of the commencement thereof, the indemnifying
party will be entitled to participate therein and, to the extent that it may
wish, jointly with any other indemnifying party similarly notified, to assume
the defense thereof, with counsel reasonably satisfactory to such indemnified
party (who shall not,  except with the consent of the indemnified party, be counsel to the
indemnifying party), and after notice from the indemnifying party to such
indemnified party of its election so to assume the defense thereof the
indemnifying party will not be liable to such indemnified party under this Section 5
for any legal or other expenses, other than reasonable costs of investigation,
subsequently incurred by such indemnified party in connection with the defense
thereof.  No indemnifying party shall,
without the prior written consent of the indemnified party, effect any
settlement of any pending or threatened action in respect of which any
indemnified party is or could have been a party and indemnity could have been
sought hereunder by such indemnified party unless such settlement (i) includes
an unconditional release of such indemnified party from all liability on any
claims that are the subject matter of such action, and (ii) does not
include a statement as to or an admission of fault, culpability or a failure to
act by or on behalf of any indemnified party.


 


(d)  If the indemnification provided for in
this Section 5 is unavailable or insufficient to hold harmless an
indemnified party under subsections (a) or (b) above, then each
indemnifying party shall contribute to the amount paid or payable by such
indemnified party as a result of the losses, claims, damages or liabilities (or
actions in respect thereof) referred to in subsection (a) or (b) above
(i) in such proportion as is appropriate to reflect the relative benefits
received by the indemnifying party or parties on the one hand and the
indemnified party on the other from the exchange of the Securities, pursuant to
the Registered Exchange Offer, or (ii) if the allocation provided by the foregoing
clause (i) is not permitted by applicable law, in such proportion as is
appropriate to reflect not only the relative benefits referred to in clause (i) above
but also the relative fault of the indemnifying party or parties on the one
hand and the indemnified party on the other in connection with the statements
or omissions that resulted in such losses, claims, damages or liabilities (or
actions in respect thereof) as well as any other relevant equitable
considerations.  The relative fault of
the parties shall be determined by reference to, among other things, whether
the untrue or alleged untrue statement of a material fact or the omission or
alleged omission to state a material fact relates to information supplied by
the Company on the one hand or such Holder or such other indemnified party, as
the case may be, on the other, and the parties’ relative intent, knowledge,
access to information and opportunity to correct or prevent such statement or
omission.  The amount paid by an
indemnified party as a result of the losses, claims, damages or liabilities
referred to in the first sentence of this subsection (d) shall be deemed
to include any legal or other expenses reasonably incurred by such indemnified
party in connection with investigating or defending any action or claim which
is the subject of this subsection (d). 
Notwithstanding any other provision of this Section 5(d), the
Holders of the Securities shall not be required to contribute any amount in
excess of the amount by which the net proceeds received by such Holders from
the sale of the Securities pursuant to a Registration Statement exceeds the
amount of damages which such Holders have otherwise been required to pay by
reason of such untrue or alleged untrue statement or omission or alleged omission.  No person guilty of fraudulent
misrepresentation (within the meaning of Section 11(f) of the
Securities Act) shall be entitled to contribution from any person who was not
guilty of such fraudulent misrepresentation. 
For purposes of this paragraph (d), each person, if any, who controls
such indemnified party within the meaning of the Securities Act or the Exchange
Act shall have the same rights to contribution as such indemnified party and
each person, if any, who controls the Company within the meaning of the
Securities Act or the Exchange Act shall have the same rights to contribution
as the Company.


 


(e)  The agreements contained in this Section 5
shall survive the sale of the Securities pursuant to a Registration Statement
and shall remain in full force and effect, regardless of any termination or
cancellation of this Agreement or any investigation made by or on behalf of any
indemnified party.


 

















 


6.  Additional
Interest Under Certain Circumstances.  (a)  Additional interest (the “Additional
Interest”) with respect to the Transfer Restricted Securities shall be assessed
as follows if any of the following events occur (each such event in
clauses (i) through (iii) below a “Registration Default”):


 


(i)  any
Registration Statement is not declared effective on or prior to the applicable
effectiveness deadline;


 


(ii)  the Exchange
Offer is not consummated on or prior to the date that is 40 days after the
Exchange Offer Registration Statement is declared effective; or


 


(iii)  If after
either the Exchange Offer Registration Statement or the Shelf Registration
Statement becomes effective (A) such Registration Statement thereafter
ceases to be effective at a time such Registration Statement is required to
remain effective; or (B) such Registration Statement or the related
prospectus ceases to be usable (except as permitted in paragraph (b)) in
connection with resales of Transfer Restricted Securities during the periods
specified herein because either (1) any event occurs as a result of which
the related prospectus forming part of such Registration Statement would
include any untrue statement of a material fact or omit to state any material
fact necessary to make the statements therein in the light of the circumstances
under which they were made not misleading or, (2) it shall be necessary to
amend such Registration Statement or supplement the related prospectus, to
comply with the Securities Act or the Exchange Act or the respective rules thereunder.


 


Additional Interest shall accrue on the Transfer
Restricted Securities over and above the interest set forth in the title of the
applicable Securities from and including the date on which any such
Registration Default shall occur to but excluding the date on which all such
Registration Defaults have been cured, at a rate of 0.25% per annum for the
first 90-day period immediately following the occurrence of a Registration
Default, to be increased by an additional 0.25% per annum with respect to each
subsequent 90-day period until all Registration Defaults have been cured, up to
a maximum additional interest rate of 1.00% per annum.


 


(b)  A Registration Default referred to in Section 6(a)(iii)(B) hereof
shall be deemed not to have occurred and be continuing in relation to a Shelf
Registration Statement or the related prospectus if (i) such Registration
Default has occurred solely as a result of (x) the filing of a
post-effective amendment to such Shelf Registration Statement to incorporate
annual audited financial information with respect to the Company where such
post-effective amendment is not yet effective and needs to be declared
effective to permit Holders to use the related prospectus or (y) other
material events, with respect to the Company that would need to be described in
such Shelf Registration Statement or the related prospectus and (ii) in
the case of clause (y), the Company is proceeding promptly and in good faith to
amend or supplement such Shelf Registration Statement and related prospectus to
describe such events; provided, however, that in any case if such Registration
Default occurs for a continuous period in excess of 30 days, Additional
Interest shall be payable in accordance with the above paragraph from the day
such Registration Default occurs until such Registration Default is cured.


 


(c)  Any amounts of Additional Interest due
pursuant to clause (i), (ii) or (iii) of Section 6(a) above
will be payable by wire transfer of immediately available funds on the regular
interest payment dates with respect to the Transfer Restricted Securities. The
amount of Additional Interest applicable to a series of Securities will be
determined by multiplying the applicable Additional Interest rate by the
principal amount of the Transfer Restricted Securities of such series,
multiplied by a fraction, the numerator of which is the number of days such
Additional Interest rate was applicable during such period (determined on the
basis of a 360-day year comprised of twelve 30-day months), and the denominator
of which is 360.


 

















 


(d)  “Transfer Restricted Securities” means
each Security until (i) the date on which such Security has been exchanged
by a person other than a broker-dealer for a freely transferable Exchange
Security in the Registered Exchange Offer, (ii) following the exchange by
a broker-dealer in the Registered Exchange Offer of a Initial Security for an
Exchange Note, the date on which such Exchange Note is sold to a purchaser who
receives from such broker-dealer on or prior to the date of such sale a copy of
the prospectus contained in the Exchange Offer Registration Statement or (iii) the
date on which such Initial Security has been effectively registered under the
Securities Act and disposed of in accordance with the Shelf Registration
Statement.


 


7.  Rules 144
and 144A.  The Company shall use its commercially reasonable
efforts to file the reports required to be filed by it under the Securities Act
and the Exchange Act in a timely manner and, if at any time the Company is not
required to file such reports, it will, upon the request of any Holder of
Initial Securities that are “restricted securities” within the meaning of Rule 144
and are not saleable pursuant to Rule 144(d), make publicly available
other information so long as necessary to permit sales of  their securities pursuant to Rules 144
and 144A.  The Company covenants that it
will take such further action as any Holder of Initial Securities may
reasonably request, all to the extent required from time to time to enable such
Holder to sell Initial Securities without registration under the Securities Act
within the limitation of the exemptions provided by Rules 144 and 144A
(including the requirements of Rule 144A(d)(4)).  The Company will provide a copy of this
Agreement to prospective purchasers of Initial Securities identified to the
Company by the Initial Purchasers upon request. 
If the Company ceases to be a reporting company under the Exchange Act,
upon the request of any Holder of Initial Securities, the Company shall deliver
to such Holder a written statement as to whether it has complied with such requirements.
Notwithstanding the foregoing, nothing in this Section 7 shall be deemed
to require the Company to register any of its securities pursuant to the
Exchange Act.


 


8.  Underwritten
Registrations.  If any of the Transfer Restricted
Securities covered by any Shelf Registration are to be sold in an underwritten
offering, the investment banker or investment bankers and manager or managers
that will administer the offering (“Managing Underwriters”) will be selected by
the Holders of a majority in aggregate principal amount of such Transfer
Restricted Securities to be included in such offering; provided, however, that
such investment banker(s) and manager(s) must be reasonably
acceptable to the Company.


 


No person may participate in any underwritten registration
hereunder unless such person (i) agrees to sell such person’s Transfer
Restricted Securities on the basis reasonably provided in any underwriting
arrangements approved by the persons entitled hereunder to approve such
arrangements and (ii) completes and executes all questionnaires, powers of
attorney, indemnities, underwriting agreements and other documents reasonably
required under the terms of such underwriting arrangements.


 


9.  Miscellaneous.


 


(a)  Amendments
and Waivers.  The provisions of this Agreement may not be
amended, modified or supplemented, and waivers or consents to departures from
the provisions hereof may not be given, except by the Company and the written
consent of the Holders of a majority in principal amount of the Securities affected
by such amendment, modification, supplement, waiver or consents.


 


(b)  Notices.  All
notices and other communications provided for or permitted hereunder shall be
made in writing by hand delivery, first-class mail, facsimile transmission, or
air courier which guarantees overnight delivery:


 


(1)  if to a Holder of the Securities, at the
most current address given by such Holder to the Company.


 

















 


(2)  if to the Initial Purchasers;


 


Morgan Stanley & Co. Incorporated,


1585 Broadway


New York, N.Y. 10036


Fax No.:  (212)
761-0538


Attention: 
Equity Capital Markets


 


with a copy to:


 


Davis Polk &
Wardwell LLP


450 Lexington Avenue


New York, NY 10017


Fax No.:  (212)
701-5111


Attention: 
Michael Kaplan


 


(3)           if to the Company, at its address as
follows:


 


Cloud Peak Energy Resources LLC and Cloud Peak Energy
Finance Corp.


c/o Cloud Peak Energy Inc.


505 S. Gillette Ave.


Gillette, WY 82718


Fax No.: (307) 687-6015


Attention: 
Michael Barrett


 


with a copy to:


 


Cloud Peak Energy Inc.


505 S. Gillette Ave.


Gillette, WY 82718


Fax No.: (307) 687-6059


Attention: 
General Counsel


 


All such notices and communications shall be deemed to
have been duly given:  at the time
delivered by hand, if personally delivered; three business days after being
deposited in the mail, postage prepaid, if mailed; when receipt is acknowledged
by recipient’s facsimile machine operator, if sent by facsimile transmission;
and on the day delivered, if sent by overnight air courier guaranteeing next
day delivery.


 


(c)  No
Inconsistent Agreements.  The Company has not, as of the
date hereof, entered into, nor shall it, on or after the date hereof, enter
into, any agreement with respect to its securities that is inconsistent with
the rights granted to the Holders herein or otherwise conflicts with the provisions
hereof.


 


(d)  Successors
and Assigns.  This Agreement shall be binding upon the
Company and its successors and assigns.


 


(e)  Counterparts.  This
Agreement may be executed in any number of counterparts and by the parties
hereto in separate counterparts, each of which when so executed shall be deemed
to be an original and all of which taken together shall constitute one and the
same agreement.


 

















 


(f)  Headings.  The
headings in this Agreement are for convenience of reference only and shall not
limit or otherwise affect the meaning hereof.


 


(g)  Governing
Law.  THIS AGREEMENT SHALL BE GOVERNED BY, AND CONSTRUED
IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK WITHOUT REGARD TO
PRINCIPLES OF CONFLICTS OF LAWS.


 


(h)  Severability.  If
any one or more of the provisions contained herein, or the application thereof
in any circumstance, is held invalid, illegal or unenforceable, the validity,
legality and enforceability of any such provision in every other respect and of
the remaining provisions contained herein shall not be affected or impaired
thereby.


 


(i)  Securities
Held by the Company.  Whenever the consent or approval of
Holders of a specified percentage of principal amount of Securities is required
hereunder, Securities held by the Company or its affiliates (other than
subsequent Holders of Securities if such subsequent Holders are deemed to be
affiliates solely by reason of their holdings of such Securities) shall not be
counted in determining whether such consent or approval was given by the Holders
of such required percentage.


 

















 


If the foregoing is in accordance with your
understanding of our agreement, please sign and return to the Company a
counterpart hereof, whereupon this instrument, along with all counterparts,
will become a binding agreement among the several Initial Purchasers, the
Issuer, the Co-Issuer and the Guarantors in accordance with its terms.


 


	
    

  	
  Very truly yours,

  
	
   

  	
   

  
	
   

  	
  CLOUD PEAK ENERGY RESOURCES LLC

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Colin Marshall

  
	
   

  	
   

  	
  Name:

  	
  Colin Marshall

  
	
   

  	
   

  	
  Title:

  	
  President & CEO

  
	
   

  	
   

  	
   

  
	
   

  	
  CLOUD PEAK ENERGY FINANCE CORP.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Michael Barrett

  
	
   

  	
   

  	
  Name:

  	
  Michael Barrett

  
	
   

  	
   

  	
  Title:

  	
  CFO

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  CORDERO MINING LLC

  
	
   

  	
  CORDERO MINING HOLDINGS 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

  
	
   

  	
  NORTHERN COAL TRANSPORTATION LLC

  
	
   

  	
  KENNECOTT COAL SALES LLC

  
	
   

  	
  RESOURCE DEVELOPMENT LLC

  
	
   

  	
  WESTERN MINERALS LLC

  
	
   

  	
  SEQUATCHIE VALLEY COAL CORPORATION

  
	
   

  	
  CLOUD PEAK ENERGY SERVICES COMPANY

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Michael Barrett

  
	
   

  	
   

  	
  Name:

  	
  Michael Barrett

  
	
   

  	
   

  	
  Title:

  	
  CFO

  



 


[Signature page to Registration Rights Agreement]


 

















 


The foregoing Registration


Rights Agreement is hereby confirmed


and accepted as of the date first


above written.


 


	
  Acting on behalf of themselves

  	
   

  
	
  and as the Representatives

  	
   

  
	
  of the several Purchasers

  	
   

  
	
   

  	
   

  
	
  MORGAN STANLEY & CO. INCORPORATED

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
  By:

  	
  /s/
  Peter Zippelius

  	
   

  
	
   

  	
  Name:

  	
  Peter
  Zippelius

  	
   

  
	
   

  	
  Title:

  	
  Vice
  President

  	
   

  
	
   

  	
   

  
	
  CREDIT SUISSE SECURITIES (USA) LLC

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
  By:

  	
  /s/
  Michael Speller

  	
   

  
	
   

  	
  Name:

  	
  Michael
  Speller

  	
   

  
	
   

  	
  Title:

  	
  Managing
  Director

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
  RBC CAPITAL MARKETS CORPORATION

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
  By:

  	
  /s/
  David Capaldi

  	
   

  
	
   

  	
  Name:

  	
  David
  Capaldi

  	
   

  
	
   

  	
  Title:

  	
  Managing
  Director

  	
   

  



 


[Signature page to Registration Rights Agreement]


 
















 


ANNEX A


 


Each broker-dealer that
receives Exchange Securities for its own account pursuant to the Exchange Offer
must acknowledge that it will deliver a prospectus in connection with any
resale of such Exchange Securities.  The
Letter of Transmittal states that by so acknowledging and by delivering a
prospectus, a broker-dealer will not be deemed to admit that it is an “underwriter”
within the meaning of the Securities Act. 
This Prospectus, as it may be amended or supplemented from time to time,
may be used by a broker-dealer in connection with resales of Exchange
Securities received in exchange for Initial Securities where such Initial
Securities were acquired by such broker-dealer as a result of market-making
activities or other trading activities. 
The Company has agreed that, for a period of 180 days after the
Expiration Date (as defined herein), it will make this Prospectus available to
any broker-dealer for use in connection with any such resale.  See “Plan of Distribution.”


 

















 


ANNEX B


 


Each broker-dealer that
receives Exchange Securities for its own account in exchange for Securities,
where such Initial Securities were acquired by such broker-dealer as a result
of market-making activities or other trading activities, must acknowledge that
it will deliver a prospectus in connection with any resale of such Exchange
Securities.  See “Plan of Distribution.”


 

















 


ANNEX C


 


PLAN OF
DISTRIBUTION


 


Each broker-dealer that
receives Exchange Securities for its own account pursuant to the Exchange Offer
must acknowledge that it will deliver a prospectus in connection with any
resale of such Exchange Securities.  This
Prospectus, as it may be amended or supplemented from time to time, may be used
by a broker-dealer in connection with resales of Exchange Securities received
in exchange for Initial Securities where such Initial Securities were acquired
as a result of market-making activities or other trading activities.  The Company has agreed that, for a period of
180 days after the Expiration Date, it will make this prospectus, as amended or
supplemented, available to any broker-dealer for use in connection with any
such resale.  In addition, until                   , 20 ,  all dealers effecting transactions in the
Exchange Securities may be required to deliver a prospectus.(1)


 


The Company will not
receive any proceeds from any sale of Exchange Securities by
broker-dealers.  Exchange Securities
received by broker-dealers for their own account pursuant to the Exchange Offer
may be sold from time to time in one or more transactions in the
over-the-counter market, in negotiated transactions, through the writing of
options on the Exchange Securities or a combination of such methods of resale,
at market prices prevailing at the time of resale, at prices related to such
prevailing market prices or negotiated prices. 
Any such resale may be made directly to purchasers or to or through
brokers or dealers who may receive compensation in the form of commissions or
concessions from any such broker-dealer or the purchasers of any such Exchange
Securities.  Any broker-dealer that
resells Exchange Securities that were received by it for its own account
pursuant to the Exchange Offer and any broker or dealer that participates in a
distribution of such Exchange Securities may be deemed to be an “underwriter”
within the meaning of the Securities Act and any profit on any such resale of
Exchange Securities and any commission or concessions received by any such
persons may be deemed to be underwriting compensation under the Securities Act.  The Letter of Transmittal states that, by
acknowledging that it will deliver and by delivering a prospectus, a
broker-dealer will not be deemed to admit that it is an “underwriter” within
the meaning of the Securities Act.


 


For a period of 180 days
after the Expiration Date the Company will promptly send additional copies of
this Prospectus and any amendment or supplement to this Prospectus to any
broker-dealer that requests such documents in the Letter of Transmittal.  The Company has agreed to pay all expenses
incident to the Exchange Offer (including the expenses of one counsel for the
Holders of the Securities) other than commissions or concessions of any brokers
or dealers and will indemnify the Holders of the Securities (including any
broker-dealers) against certain liabilities, including liabilities under the
Securities Act.


 






(1)  In
addition, the legend required by Item 502(e) of Regulation S-K
will appear on the back cover page of the Exchange Offer prospectus.


 

















 


ANNEX D


 


·              CHECK
HERE IF YOU ARE A BROKER-DEALER AND WISH TO RECEIVE 10 ADDITIONAL COPIES OF THE
PROSPECTUS AND 10 COPIES OF ANY AMENDMENTS OR SUPPLEMENTS THERETO.


 


	
  Name:

  	
   

  	
   

  
	
  Address:

  	
   

  	
   

  
				



 


If the undersigned is not
a broker-dealer, the undersigned represents that it is not engaged in, and does
not intend to engage in, a distribution of Exchange Securities.  If the undersigned is a broker-dealer that
will receive Exchange Securities for its own account in exchange for Initial
Securities that were acquired as a result of market-making activities or other
trading activities, it acknowledges that it will deliver a prospectus in
connection with any resale of such Exchange Securities; however, by so
acknowledging and by delivering a prospectus, the undersigned will not be
deemed to admit that it is an “underwriter” within the meaning of the
Securities Act.