Document:

Exhibit 10.7

 

PROMISSORY
NOTE

 

	
  $433,755,000

  	
   

  	
  November
  19, 2009                    

  

 

FOR VALUE RECEIVED, the undersigned, Cloud Peak
Energy Inc., a Delaware corporation (the “Payor”), hereby promises to pay to
the order of Rio Tinto Energy America Inc., a Delaware corporation (the “Payee”),
at the Payee’s office at 4700 Daybreak Parkway, South Jordan, Utah 84095 (or at
such other place of payment as the Payee may from time to time specify to the
Payor in writing), on the Payment Date (as defined below), the principal sum of
Four Hundred Thirty-Three Million, Seven Hundred Fifty-Five Thousand Dollars
($433,755,000), without interest (the “Principal Amount”) in lawful money of
the United States of America. Upon final indefeasible payment of all amounts
due under this Note, it shall be surrendered for cancellation.

 

Except as otherwise
defined herein, all capitalized terms used herein shall have the meaning
specified in that certain Acquisition Agreement dated November 19, 2009 between
the Payor and the Payee.

 

The outstanding Principal Amount shall become due
and payable upon demand by the Payee (such date, the “Payment Date”), but no
earlier than the First Closing Date; provided, however, that the
outstanding Principal Amount shall become due and payable on the Payment Date
only if the transactions contemplated to have occurred on the First Closing
Date by the Underwriting Agreement have occurred.

 

The Payor hereby expressly waives demand,
presentment, protest, notice of dishonor, diligence in collection and any other
notice of any kind.  No delay by the
Payee in the exercise of any right or remedy shall operate as a waiver thereof,
and no single or partial exercise by the Payee of any right or remedy shall
preclude any other or further exercise thereof or the exercise of any other
right or remedy.

 

In the event that Payor breaches the obligations
under this Note, the Payor agrees to pay to the Payee all expenses incurred or
paid by the Payee in connection with the collection of this Note, including,
without limitation, reasonable attorneys’ fees and court costs. Notwithstanding
the first paragraph of this Note, in the event the Payor fails
to make any payment due pursuant to this Note on or prior to the date on which
such payment becomes due and payable, whether at maturity or by acceleration or
on any other date, such unpaid amount shall accrue interest from the date on
which such payment was due until the date on which such payment is made at a
rate of interest of 10.0% (ten percent) per annum.

 

This Note shall inure to the benefit of and be
binding upon the Payor and the Payee and their respective successors and
assigns; provided that the Payor may not assign any of its rights or
obligations hereunder without the prior written consent of the other party
hereto.

 

THIS NOTE SHALL BE GOVERNED BY, AND CONSTRUED AND
INTERPRETED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK, WITHOUT
REGARD TO THE CONFLICTS OF LAW RULES THEREOF.

 

This Note may be amended,
and any provisions under the Note waived, only by a written agreement executed
by the Payee and the Payor.

 

 

If any terms or other
provision of this Note shall be determined by a court, administrative agency or
arbitrator to be invalid, illegal or unenforceable, such invalidity, illegality
or unenforceability shall not render the entire Note invalid.  Rather, this Note shall be construed as if
not containing the particular invalid, illegal or unenforceable provision, and
all other provisions of this Note shall remain in full force and effect in
accordance with its terms.

 

2

 

IN WITNESS THEREOF, the Payor has caused this Note
to be executed on its behalf by its duly authorized officer.

 

	
   

  	
  CLOUD
  PEAK ENERGY INC.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/
  Colin Marshall

  
	
   

  	
   

  	
  Name:

  	
  Colin
  Marshall

  
	
   

  	
   

  	
  Title:

  	
  President and CEO

  

 

 

[CPE
Promissory Note Signature Page]Exhibit 10.8

 

EXECUTION COPY

 

ASSIGNMENT OF TRADEMARKS

 

This ASSIGNMENT OF
TRADEMARKS (this “Assignment”) is
dated and effective as of November 19, 2009 between Rio Tinto Energy
America Inc., a Delaware corporation (“RTEA”)
and  Cloud Peak Energy Resources LLC, a
Delaware limited liability company (the “Company”).

 

RECITALS

 

WHEREAS, RTEA is the sole and exclusive owner of all
right, title, and interest in and to all of the trademarks and service marks
identified in Schedule A (collectively referred to herein as the “Trademarks”); and

 

WHEREAS, RTEA is the sole and exclusive owner of all
right, title, and interest in and to all of the domain name registrations
identified in Schedule B (collectively referred to herein as the “Domain Names”); and

 

WHEREAS, pursuant to the initial public offering
separating the Company from RTEA, the Company 
is the successor to that portion of the ongoing business of RTEA,
excluding Colowyo, to which the Trademarks and Domain Names pertain and is
desirous of acquiring, and RTEA is desirous of assigning to the Company, all
right, title, and interest in and to all of the Trademarks and Domain Names and
all goodwill connected with the use thereof, symbolized thereby and associated
therewith, and the right to sue and recover damages for past and future
infringement, misappropriation or other violations related to the Trademarks
and Domain Names;

 

NOW THEREFORE, for good and valuable
consideration, the receipt and sufficiency of which is hereby acknowledged,
RTEA and the Company hereby agree as follows:

 

1.                                       RTEA hereby sells, assigns and transfers to the Company, its
successors and assigns, all of its right, title and interest in and to the
Trademarks and the Domain Names, and all applications, registrations, and
renewals therefor, together with all goodwill symbolized thereby and associated
therewith.

 

2.                                       The Company and
RTEA hereby authorize and request the Commissioner of Patents and Trademarks of
the United States to issue and to record the title of the Company as owner of
all right, title, and interest in and to the Trademarks, all applications,
registrations, and renewals therefor, the goodwill connected with the use
thereof, symbolized thereby and associated therewith.

 

3.                                       The Company
shall solely and exclusively bear the cost of: (i) all filing and similar
fees relating to the filing or recordation of the Company’s ownership interest
in, or issuance to the Company of, the Trademarks and Domain Names, and (ii) all
maintenance, renewal and similar fees payable in connection with the Trademarks
and Domain Names after the date of this Assignment.

 

 

4.                                       The Company and
RTEA agree to make commercially reasonable efforts to promptly update the
registration information for the Domain Names to effect this Assignment.

 

5.                                       RTEA agrees to
execute, upon the reasonable request of the Company and at the Company’s
expense, such additional documents as are reasonably necessary or desirable to
continue, secure, defend, register, and otherwise give full effect to and
perfect the rights of the Company under this Assignment.

 

2

 

In
testimony whereof, RTEA has signed below, by its duly authorized legal
representatives, on this 16th day of November, 2009.

 

 

	
   

  	
  Rio Tinto Energy America Inc.

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ James P. Berson

  
	
   

  	
   

  	
   

  
	
   

  	
  Title:

  	
  Authorized Agent

  

 

	
  STATE OF  New Mexico

  	
  )

  
	
  COUNTY OF  Bernalillo

  	
  )

  

 

On this 16th day of November,
2009, before me appeared James Paul Berson of Rio Tinto Energy America Inc., who acknowledged execution of
this Assignment as a free act by Rio Tinto Energy America Inc.

 

 

	
   

  	
  /s/ Rosa Mendez

  
	
   

  	
   

  
	
   

  	
  Notary Public

  

 

ACKNOWLEDGMENT

 

On
behalf of Cloud Peak Energy Resources LLC, I hereby acknowledge receipt of
assignment, for good and valuable consideration, of the Trademarks set forth in
Schedule A.

 

	
   

  	
  Cloud Peak Energy
  Resources LLC

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Colin Marshall

  
	
   

  	
   

  	
   

  
	
   

  	
  Title:

  	
  President and CEO

  

 

3Exhibit
10.9

 

EXECUTION COPY

 

MANAGEMENT SERVICES
AGREEMENT

 

THIS MANAGEMENT SERVICES AGREEMENT (this “Agreement”) is made and entered
into as of November 19, 2009 (the “Effective Date”),
between Cloud Peak Energy Resources LLC, a Delaware limited liability company (“CPE LLC”), and Cloud Peak Energy
Inc., a Delaware corporation (“CPE”).  CPE and CPE LLC are sometimes referred to
herein separately as a “Party” and
together as the “Parties.”

 

RECITALS

 

WHEREAS, as contemplated by the terms of the Amended
and Restated Limited Liability Company Agreement of CPE LLC dated as of the
date hereof (as the same may be amended, restated, supplemented or otherwise
modified from time to time, the “LLC  Agreement”), the members of CPE LLC have approved this
Management Services Agreement;

 

WHEREAS, to facilitate the operation of the business
of CPE LLC, CPE LLC and CPE desire for CPE to provide management services to
CPE LLC supplemental to CPE’s role as manager (“Manager”)
under the LLC Agreement and memorialize the clarification of certain
responsibilities of CPE in managing CPE LLC on the terms and subject to the
conditions specified in this Agreement; and

 

WHEREAS, to facilitate CPE’s provision of management
services, CPE LLC and CPE desire for CPE LLC to pay CPE certain employee costs
for Service Employees (as defined herein) and to provide certain administrative
services, facilities and other resources to CPE on the terms and subject to the
conditions specified in this Agreement.

 

NOW, THEREFORE, in consideration of the foregoing
and the mutual covenants and agreements set forth below, and other good and
valuable consideration, the receipt and sufficiency of which is hereby
acknowledged, CPE LLC and CPE agree as follows:

 

1.                                      Definitions.

 

The following terms shall have the indicated
meaning:

 

“Affiliate”
means with respect to a Person (as defined below), any other Person that
directly, or indirectly through one or more intermediaries, controls, or is
controlled by, or is under common control with, such Person.  As used in this definition, the word “control”
means the possession, directly or indirectly, of the power to direct or cause
the direction of the management and policies of a Person, whether through
ownership of voting securities, by contract or otherwise.

 

“Aggregate
Employee  Costs”
means, with respect to any month, the aggregate amount of Attributable Employee
Costs.

 

“Agreement”
is defined in the introductory paragraph.

 

 

“Attributable
Employee  Costs”
means, with respect to each Service Employee (as defined below), the monthly
Employee Costs attributed to such Service Employee (as defined below).

 

“Board” is
defined in Section 2.1.

 

“CPE” is
defined in the introductory paragraph.

 

“CPE  Benefit
Plans” means, with respect to CPE,
any “employee pension benefit plan” (as defined in Section 3(2) of ERISA), “employee
welfare benefit plan” (as defined in Section 3(1) of ERISA) and any other plan
or arrangement of any kind, whether qualified or non-qualified, relating to
stock options, incentive compensation, bonus, profit sharing, retirement,
pension, deferred compensation, severance benefits, leave of absence, vacation,
life, health, accident, disability, sick pay, workmen’s compensation or other
insurance, severance, separation, fringe or any other benefits.

 

“CPE LLC” is
defined in the introductory paragraph.

 

“Effective Date”
is defined in the introductory paragraph.

 

“Employee Costs”
means the direct out-of-pocket costs or reasonable allocated costs of CPE (i) for
gross wages, salaries, bonuses, incentive compensation, equity compensation and
payroll taxes of the Service Employees, plus (ii) for workers’ compensation
insurance incurred by CPE with respect to the Service Employees, plus (iii) for
employee benefit plans attributable to any Service Employees, including but not
limited to pension, savings, medical, dental, vision, disability and life
insurance, plus (iv) for other benefits directly attributable to the Service
Employees, including but not limited to perquisites, personal or fringe
benefits or other similar incentive programs, executive programs, severance
pay, employee assistance programs, cafeteria plan benefits, dependent care and
health care flexible spending accounts, sick leave, legal assistance and
educational assistance, plus (v) related to the employee benefit plans or
programs, including but not limited to incremental costs of charges or
premiums, employee participation, actuarial reports, accounting, or legal fees.

 

“Governmental Authority”
means any United States federal, state or local or any foreign government,
supranational, governmental, regulatory or administrative authority,
instrumentality, agency or commission, political subdivision, self-regulatory
organization or any court, tribunal or judicial or arbitral body or other
governmental authority.

 

“Health and Welfare Plans”
is defined in Section 4.3(c).

 

“Law” means
any law (statutory, common or otherwise), constitution, ordinance, code, rule,
regulation, executive order or other similar authority enacted, adopted,
promulgated or applied by any Governmental Authority, each as amended from time
to time.

 

“LLC Agreement”
is defined in the Recitals.

 

“Loss” is
defined in Section 5.1.

 

2

 

“Management Services”
means all services performed by CPE (by Service Employees or otherwise),
whether the provision of such services by CPE is required or contemplated by
the LLC Agreement or is supplemental to the services to be provided by CPE to
CPE LLC under the LLC Agreement, relating to the management and operation of
the business of CPE LLC, including but not limited to executive oversight,
exploration, production, sales, marketing, finance and accounting support and
reporting, legal support and other services and activities as are customarily
performed by persons holding the positions set forth on Exhibit A hereto
and all other services provided by CPE, its officers, directors and employees
to or for the benefit of CPE LLC in, or relating to, CPE’s role as Manager of
CPE LLC.

 

“New York Courts” has the meaning set forth in Section 7.1.

 

“Person”
means an individual, corporation, joint venture, partnership, limited
partnership, limited liability company, trust, estate, business trust,
association, Governmental Authority or any other entity.

 

“Reimbursable Costs”
shall mean all of the reasonable out-of-pocket costs and expenses incurred or
suffered by CPE in connection with the providing of the Management Services,
including the following:

 

(a)           all supplies and
equipment purchased on behalf of CPE LLC in order to provide the Management
Services;

 

(b)           meals, travel, hotel
accommodations, and entertainment expenses incurred in connection with the
performance of the Management Services;

 

(c)           legal, accounting,
health and safety, environmental, mining, and other third party advisors and
consultants incurred in connection with the performance of the Management
Services;

 

(d)           directors’ fees,
directors’ and officers’ insurance policies, employee practices liability
insurance policies and any indemnification of directors, officers, employees or
agents of CPE;

 

(e)           operating,
administrative and other similar costs incurred in connection with the
performance of the Management Services;

 

(f)            any judgments,
settlements, penalties, fines or other costs and expenses (including any
indemnification related expenses) in respect of any claims against, or any
litigation or proceedings involving, CPE, other than indemnification related
expenses (a) owed to any member of the Rio Tinto Group (as such term is defined
in the Master Separation Agreement dated   , 2009 which CPE and CPE LLC are parties
thereto) and (b) payable by CPE pursuant to the Underwriting Agreement (as
defined in the Master Separation Agreement) and the Purchase Agreement (as
defined in the Master Separation Agreement);

 

(g)           fees and expenses
related to any securities offering, investment or acquisition transaction
(whether or not successful) authorized by the Board to the extent

 

3

 

the
proceeds of such securities offering, or any investment or asset acquired in
any such investment or acquisition transaction are contributed to or, if not
successful, were intended to be contributed to, CPE LLC; and

 

(h)           bank accounts
maintained by CPE on behalf of CPE LLC.

 

In addition, Reimbursable Costs shall include all items of corporate
overhead, including, but not limited to, mortgage or rent payments for real
property, or other fees, costs or expenses of any kind whatsoever incurred by
CPE and associated with, related to or otherwise necessary for CPE’s
maintenance of its corporate existence and business, its status as a reporting
company under the federal securities laws and being listed on a national
securities exchange.  Solely as
illustration and not by means of limitation, examples of such Reimbursable
Costs would be SEC filing fees, blue sky fees and expenses, transfer agent,
paying agent and registrar fees and expenses, franchise taxes, registered agent
fees and expenses and fees and expenses of its public accountants, legal advisors
or other consultants or advisors. 
Reimbursable Costs shall also include any fees, costs, commissions and
expenses payable by CPE under the Registration Rights Agreement dated as of the
date hereof by and among CPE, RTEA and KMS, as such agreement may be amended,
restated, supplemented or modified from time to time.

 

“Representatives”
means, with respect to any Person, any of such Person’s directors, officers,
members, partners, managers and employees.

 

“Service Employees”
means those employees of CPE who devote all or a portion of their working time
to the performance of the Management Services and whose (i) job title(s) and (ii)
initial estimated Attributable Employee Cost are set forth on Exhibit A
hereto, as may be amended from time to time. 
Service Employees include and will include any former Service Employee
to whom CPE has ongoing obligations.

 

“Services Fee”
is defined in Section 3.1.

 

“Supporting Documentation”
is defined in Section 2.5(a).

 

2.                                      Performance of Management Services.

 

2.1.          Management
Services.  From and after the
Effective Date, CPE agrees to provide the Management Services on the terms and
conditions set forth in this Agreement and in compliance with the policies and
programs established from time to time by the Board of Directors of CPE (the “Board”).

 

2.2.          Exhibit
A.

 

(a)           Exhibit A
shall set forth the name, job title and initial estimated Attributable Employee
Cost for each Service Employee employed by CPE. 
For the avoidance of doubt, Exhibit A shall not include any
employees that are employed by CPE LLC or any subsidiary of CPE LLC.

 

(b)           Notwithstanding
anything in this Agreement to the contrary, Exhibit A shall be deemed
automatically amended if CPE adds, removes or replaces a Service

 

4

 

Employee,
or if a Service Employee’s employment with CPE otherwise terminates.  In such an instance, CPE shall deliver to CPE
LLC a revised Exhibit A that reflects such change to the list of Service
Employees.

 

(c)           For those Service
Employees identified on Exhibit A as of the Effective Date, the initial
estimated Attributable Employee Cost shall be calculated for fiscal year 2009,
and for any subsequent Service Employee, initial estimated Attributable
Employee Cost shall be calculated for the fiscal year in which such individual
assumes the role of Service Employee. 
The estimated and actual Attributable Employee Costs will vary because
of factors including payment of bonuses or other incentive compensation, including
equity compensation (which bonuses, incentive and equity compensation will not
be included in the estimated Attributable Employee Costs on Exhibit A),
varying utilization of fringe benefits from estimated amounts and differences
between estimated and actual benefit costs.

 

(d)           Within thirty days
of each new fiscal year, CPE shall provide CPE LLC a notice containing an
updated estimated Attributable Employee Cost for each Service Employee.

 

2.3.          Subcontractors.  CPE may subcontract with third parties,
including Affiliates of CPE, to assist in the performance of the Management
Services; provided, however, that CPE shall not be relieved of
any obligation under this Agreement or the LLC Agreement as a result of any
subcontract entered into pursuant to this Section 2.3; and further
provided, that CPE, at all times, will manage, supervise and monitor such
parties.

 

2.4.          Compliance
with Laws.  CPE shall perform the
Management Services in compliance with all applicable Laws in all material
respects.

 

2.5.          Supporting
Documentation.

 

(a)           CPE shall keep
reasonable supporting documentation of all the Services Fees and Reimbursable
Costs (the “Supporting Documentation”).  CPE shall maintain and retain the Supporting
Documentation in a manner consistent with any CPE record retention policies.

 

(b)           CPE LLC, upon
reasonable notice to CPE, shall have the right to inspect and audit, during
normal business hours and using reasonable commercial efforts not to disrupt
CPE’s normal business operations, the Supporting Documentation to the extent
reasonably necessary to verify any information regarding the Services Fees or
Reimbursable Costs with respect to any year within the twelve month period
following the end of such year.  The
costs of any such inspection or audit shall be borne by CPE LLC.

 

2.6.          Employee
Matters.  All Service Employees shall
be employees of CPE, and not CPE LLC. 
CPE shall recruit, select, employ, promote, terminate, supervise,
direct, train and assign the duties of all Service Employees, and may change or
replace any such Service Employee at any time in each case in CPE’s sole
discretion.  To the extent practicable,
CPE shall notify CPE LLC before terminating any Service Employee, but all such
termination decisions

 

5

 

shall be made by CPE in its sole discretion.

 

2.7.          No
Partnership.  Nothing contained in
this Agreement or in the relationship between CPE and CPE LLC constitutes, or
may be construed to be or to create, a partnership or joint venture between CPE
and CPE LLC.

 

2.8.          CPE LLC Manager.  Nothing contained in this
Agreement shall alter or supersede CPE’s rights and obligations as Manager of
CPE LLC, as set forth in the LLC Agreement and pursuant to applicable law.

 

3.                                      Management Services Fee and Payment.

 

3.1.          Services
Fee.  During the term of this
Agreement, CPE LLC shall pay CPE a monthly fee (the “Services
Fee”) for performance of the Management Services equal to the
Aggregate Employee Costs for such month.

 

3.2.          Reimbursable
Costs.  During the term of this
Agreement, CPE LLC shall pay CPE the amount of the Reimbursable Costs on a
monthly basis.

 

3.3.          Billing
and Payments.  On the Effective Date,
CPE LLC shall pay CPE the estimated Services Fee for the remaining portion of
the then current month and for the following month, as set forth on Exhibit B.  Each month after the Effective Date, CPE will
invoice CPE LLC for the estimated Services Fee for the following month and the
Reimbursable Costs for the preceding month. 
The invoice shall also include any adjustment in the amount owed by CPE
LLC based on any difference between the prior estimated Services Fees and
actual Services Fees that have been accounted for in the preceding month.  CPE LLC shall pay CPE the Services Fee and
Reimbursable Costs set forth in the invoice in immediately available funds
within ten days following receipt of such invoice.

 

4.                                      Performance of Administrative Services.

 

4.1.          Administrative
Services.  From and after the
Effective Date, CPE LLC agrees to provide reasonable office facilities,
equipment, supplies and administrative and other support services to CPE as are
reasonably requested by CPE to perform the Management Services.

 

4.2.          Payroll,
Accounting and Financial Reporting and Other Support Services.  From and after the Effective Date, CPE LLC
agrees to provide payroll, accounting and financial reporting and other support
services for CPE.

 

(a)           Payroll.  CPE LLC shall perform all payroll functions
for payment of CPE LLC and CPE employees. 
CPE LLC shall be designated as the common paymaster for CPE LLC and CPE
and shall be responsible for payroll tax withholding, remission and payroll tax
reporting of compensation for CPE LLC and CPE employees.

 

(b)           Accounting and
Financial Reporting.  CPE LLC shall
provide accounting and financial reporting services as reasonably required by
CPE operations.

 

6

 

(c)           Other Support
Services.  CPE LLC shall provide
other reasonable supporting services for CPE including:  non-executive management, sales, marketing,
reserves, information technology, human resources, and legal supporting
services on the same or similar terms as such services are provided to CPE LLC.

 

4.3.          Employee
Benefits.  From and after the
Effective Date, CPE LLC agrees that CPE employees shall be eligible to actively
participate in the CPE LLC group employee benefit plans and, to the extent
applicable, CPE shall be a participating employer in any CPE LLC group employee
benefit plan.  CPE agrees that CPE LLC
employees may be eligible to receive awards under any CPE Benefit Plan,
including the CPE 2009 Long-Term Equity Incentive Plan.

 

(a)           CPE Benefit Plans.  CPE LLC shall provide administrative
supporting services with respect to operation, administration and required
reporting for any CPE Benefit Plan, including the CPE 2009 Long-Term Equity
Incentive Plan.  Section 3.4(b) of
the LLC Agreement shall govern the terms and conditions relating to
authorization and issuance of additional common membership units of CPE LLC in
connection with equity compensation awards under the CPE 2009 Long-Term Equity
Incentive Plan to employees and other service providers of CPE and CPE
LLC.  The Board or a committee of the
Board shall approve equity awards made under the plan.

 

(b)           401(k) Plan.  CPE LLC and CPE shall take all actions
required or appropriate to provide that CPE shall adopt the CPE LLC 401(k) Profit
Sharing Plan, or its successor, so that CPE will become a participating
employer or alternatively CPE LLC will adopt a plan with identical benefits to
provide for participation by eligible CPE employees.

 

(c)           Health and
Welfare Plans.  CPE LLC and CPE shall
take all actions required or appropriate to provide that CPE shall adopt, as a
participating employer, the health and welfare benefit plans and other fringe
benefits sponsored by CPE LLC for its employees (the “Health
and Welfare Plans”) to permit eligible CPE employees and their
covered dependents to participate in the Health and Welfare Plans.

 

5.                                      Limitation on Liability; Indemnification.

 

5.1.          Limitation
on Liability of CPE.  Neither CPE nor
its officers, directors, agents and employees shall be liable to CPE LLC for
any claims, actions, losses, damages, liabilities, causes of action, fines,
costs and expenses (including reasonable investigation costs and reasonable
attorneys’, experts’ and consultants’ fees) (“Losses”)
suffered or incurred by CPE LLC, directly or indirectly, in connection with the
performance of the Management Services, except to the extent such Losses are
caused by willful misconduct or gross negligence of CPE or the Service
Employees.  No Party hereto shall be
liable to the other Party for, and the term Losses shall not include, any lost
profits, lost sales, business interruption, decline in value, lost business
opportunities, or consequential, incidental, punitive or exemplary damages; provided, however,
that this waiver shall not limit a Party’s right to indemnification for
liabilities incurred by such Party to a third party (other than the members of
CPE LLC and their Affiliates) claiming such items as damages.

 

7

 

5.2.          CPE
LLC Indemnification of CPE.  CPE LLC
shall indemnify, defend and hold harmless CPE from and against all Losses
arising from the claims of any third party to the extent such claims arise
directly or indirectly out of CPE’s performance of the Management Services,
including any Losses arising out of or otherwise related to CPE’s employment of
the Service Employees and the furnishing of such Service Employees to CPE LLC; provided, however,
CPE LLC shall not be responsible for indemnifying or defending CPE or otherwise
be liable to CPE with respect to any Losses arising from CPE’s or the Service
Employees’ willful misconduct or gross negligence.

 

5.3.          CPE
Indemnification of CPE LLC.  CPE
shall indemnify, defend and hold harmless CPE LLC from and against all Losses
resulting directly or indirectly from any act or omission by CPE or the Service
Employees that constitutes willful misconduct or gross negligence; provided,
however, CPE shall not be responsible for indemnifying or defending CPE LLC or
otherwise be liable to CPE LLC with respect to any Losses for which CPE LLC is
obligated to indemnify CPE as provided in Section 5.2.

 

5.4.          Special
Indemnification Provisions.  The
indemnification obligations of CPE LLC under Section 5.2 and CPE under Section
5.3 shall in each case be conditioned upon (a) 30 days written notice from
the other Party hereto after such Person learns of any claim or basis therefor
which is covered by such indemnity (except to the extent that the failure to
provide prompt notice does not prejudice the indemnifying Party), (b) such
Party’s not acting, directly or indirectly, in any manner that would prevent
CPE LLC or CPE, as the case may be, from obtaining recovery under applicable
insurance policies or would prejudice the defense of the claim in question and (c)
such Party’s taking of all reasonably necessary steps, as applicable, to
prevent being barred from obtaining recovery under applicable insurance
policies or to prevent prejudicing the defense of the claim in question.

 

6.                                      Term; Termination; Default.

 

6.1.          Term.  This Agreement shall become effective on the
Effective Date and shall continue until terminated as provided in Section 6.2.

 

6.2.          Termination.  This Agreement shall terminate, with no
further action necessary by either CPE LLC or CPE, on the date that CPE,
directly or indirectly, ceases to be the Manager of CPE LLC pursuant to the
terms of the LLC Agreement.

 

6.3.          Surrender.  Upon the termination of this Agreement, CPE
LLC and CPE shall deliver any property belonging to the other Party hereto.

 

6.4.          Payment
of Expenses After Termination; Accrued Obligations.  Neither Party hereto shall be relieved from
any obligations or liabilities accruing prior to the effective date of termination,
including in the case of CPE LLC, its obligation to make payment to CPE of all
sums due CPE under this Agreement in respect of the performance of the
Management Services prior to the effective date of termination.  After termination of this Agreement, CPE
shall provide CPE LLC a final invoice showing any prorated amount of the
Services Fee to be returned to CPE LLC and the outstanding Reimbursable Costs
due to CPE. The balance owed to CPE or CPE LLC, as applicable, shall be paid by
the other Party within fifteen days following

 

8

 

receipt of the final invoice.

 

6.5.          Survival.  The provisions set forth in Sections 5,
6.3, 6.4 and 7 shall survive the termination of this
Agreement.

 

7.                                      Miscellaneous.

 

7.1.          Governing
Law; Submission to Jurisdiction; Waiver of Jury Trial.

 

(a)           This Agreement is to
be construed in accordance with and governed by the internal laws of the State
of New York without giving effect to any choice of law rule that would cause
the application of the laws of any jurisdiction other than the internal laws of
the State of New York to the rights and duties of the Parties.

 

(b)           Each Party hereby
irrevocably and unconditionally consents to submit to the sole and exclusive
jurisdiction of the United States District Court for the Southern District of
New York or, if such court does not have subject matter jurisdiction, the
Supreme Court of the State of New York sitting in New York County (the “New York Courts”) for any legal
action or other legal proceeding arising out of or relating to this Agreement,
or the negotiation, validity or performance of this Agreement, or the
transactions contemplated thereby (and agrees not to commence any legal action
or other legal proceeding relating thereto except in such courts), including to
enforce any settlement, order or award. 
Each Party hereto:

 

(i)            consents to service of process in any such proceeding in
any manner permitted by the laws of the State of New York, and also agrees that
service of process by registered or certified mail, return receipt requested,
at its address specified pursuant to Section 7.2 is sufficient and
reasonably calculated to give actual notice;

 

(ii)           agrees that the New York Courts shall be deemed to be a
convenient forum; and

 

(iii)          waives and agrees not to assert (by way of motion, as a
defense or otherwise), in any such legal proceeding commenced in the New York
Courts that such Party is not subject personally to the jurisdiction of such
court, that such legal proceeding has been brought in an inconvenient forum,
that the venue of such proceeding is improper or that this Agreement or the
subject matter hereof or thereof may not be enforced in or by such court.

 

(c)           In the event of any action or other
proceeding relating to this Agreement or the enforcement of any provision of
this Agreement, the prevailing party (as determined by the court) shall be
entitled to payment by the non-prevailing party of all costs and expenses
(including reasonable attorneys’ fees) incurred by the prevailing party,
including any costs and expenses incurred in connection with any challenge to
the jurisdiction or the convenience or propriety of venue of proceedings before
the New York Courts.

 

9

 

(d)           Each of the Parties hereto hereby
waives to the fullest extent permitted by applicable Law any right it may have
to a trial by jury with respect to any legal action or other legal proceeding
directly or indirectly arising out of, under or in connection with this
Agreement or the transactions contemplated hereby or thereby.  Each of the Parties hereto (a) certifies that
no Representative, agent or attorney of any other Party has represented,
expressly or otherwise, that such other Party would not, in the event of
litigation, seek to enforce that foregoing waiver and (b) acknowledges that it
and the other Parties hereto have been induced to enter into this Agreement and
the transactions contemplated by this Agreement, as applicable, by, among other
things, the mutual waivers set forth in this Section 7.1(d).

 

7.2.          Notices.  Any notice, instruction, direction or demand
required under the terms of this Agreement shall be in writing and shall be
duly given upon delivery, if delivered by hand, facsimile transmission or mail
(with postage prepaid), to the following addresses:

 

If to CPE:

 

Cloud Peak Energy Inc.

General Counsel

505 S. Gillette Avenue

Gillette, WY 82716

(307) 687-6000

Fax: (307) 687-6059

 

If to CPE LLC:

 

Cloud Peak Energy Inc.

General Counsel

505 S. Gillette Avenue

Gillette, WY 82716

(307) 687-6000

Fax: (307) 687-6059

 

or to such other addresses
or telecopy numbers as may be specified by like notice to the other Parties.

 

7.3.          Assignment.  No Party shall assign, transfer or otherwise
alienate any or all of its rights or interest under this Agreement without the
express prior written consent of the other Party, which consent may be granted
or withheld in such other Party’s sole discretion. Any attempted transfer in
violation of the previous sentence shall be invalid and ineffective ab initio.

 

7.4.          No Third-Party Beneficiaries.  This Agreement shall inure to the benefit of,
and be binding upon, the Parties hereto and their respective legal
representatives, successors and assigns. 
Nothing in this Agreement, express or implied, is intended to confer
upon any other Person any rights or remedies of any nature whatsoever under or
by reason of this Agreement.

 

10

 

7.5.          Amendment.  Subject to Section 10.2 of the LLC Agreement
and except with respect to an amendment to Exhibit A in accordance with Section
2.2, this Agreement may only be amended by a written agreement executed by
both Parties.

 

7.6.          Waiver.  A provision of this Agreement may be waived
only by a writing signed by the Party intended to be bound by the waiver. A
Party is not prevented from enforcing any right, remedy or condition in the
Party’s favor because of any failure or delay in exercising any right or remedy
or in requiring satisfaction of any condition, except to the extent that the
Party specifically waives the same in writing. 
A written waiver given for one matter or occasion is effective only in
that instance and only for the purpose stated. 
A waiver once given is not to be construed as a waiver for any other
matter or occasion.  Any enumeration of a
Party’s rights and remedies in this Agreement is not intended to be exclusive,
and a Party’s rights and remedies are intended to be cumulative to the extent
permitted by Law and include any rights and remedies authorized in Law or in
equity.

 

7.7.          Severability.  If any term or other provision of this
Agreement shall be determined by a court, administrative agency or arbitrator
to be invalid, illegal or unenforceable, such invalidity, illegality or unenforceability
shall not render the entire Agreement invalid. Rather, this Agreement shall be
construed as if not containing the particular invalid, illegal or unenforceable
provision, and all other provisions of this Agreement shall nevertheless remain
in full force and effect so long as the economic or legal substance of the
transactions contemplated hereby is not affected in any manner materially
adverse to either Party. Upon such determination that any term or other
provision is invalid, illegal or unenforceable, the Parties shall negotiate in
good faith to modify this Agreement so as to effect the original intent of the
Parties as closely as possible
in an acceptable manner to the end that the transactions contemplated hereby
are fulfilled to the fullest extent permitted under applicable Law.

 

7.8.          Counterparts
and Signatures.  This Agreement may
be executed in separate counterparts, each of which shall be deemed an original
and all of which, when taken together, shall constitute one and the same
agreement.  This Agreement may be
executed by electronic transmission, including by facsimile or electronic mail,
by each Party hereto of a signed signature page hereof to the other Party.

 

7.9.          Interpretation of
Agreement.

 

(a)           As used in this Agreement, the words “include”
and “including,” and variations thereof, shall not be deemed to be terms of
limitation, and shall be deemed to be followed by the words “without
limitation.”

 

(b)           Unless otherwise
specified, references in this Agreement to “Sections” and “Exhibits” are
intended to refer to Sections of and Exhibits to this Agreement.

 

(c)           The Section headings
contained in this Agreement are solely for the purpose of reference, are not
part of the agreement of the parties and shall not in any way affect the
meaning or interpretation of this Agreement.

 

(d)           Each Party hereto
and its counsel cooperated in drafting and preparation of this Agreement and
the documents referred to in this Agreement. 
Any rule of law or any

 

11

 

legal
decision that would require interpretation of any ambiguities in this Agreement
against the party that drafted it is of no application and is hereby expressly
waived.

 

[Signature page
to follow]

 

12

 

IN WITNESS WHEREOF, the parties hereto have caused
this Agreement to be executed on the day and year first above written.

 

 

	
   

  	
  CLOUD
  PEAK ENERGY RESOURCES LLC

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/
  Michael Barrett

  
	
   

  	
  Name:

  	
  Michael
  Barrett

  
	
   

  	
  Title:

  	
  CFO

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  CLOUD
  PEAK ENERGY INC.

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/
  Colin Marshall

  
	
   

  	
  Name:

  	
  Colin
  Marshall

  
	
   

  	
  Title:

  	
  President
  and CEO

  

 

 

[Signature
page for Management Services Agreement]

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00165-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00165-of-00352.parquet"}], [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00165-of-00352.parquet"}]]