UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

 

FORM 8-K

 

CURRENT REPORT

Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

 

Date of Report (Date of earliest event reported): May 7, 2019

 

Cloud Peak Energy Inc.

(Exact name of registrant as specified in its charter)

 

Delaware

 

001-34547

 

26-3088162

(State or other Jurisdiction of
Incorporation)

 

(Commission File Number)

 

(IRS Employer Identification No.)

 

748 T-7 Road, Gillette, Wyoming

 

82718

(Address of Principal Executive Offices)

 

(Zip Code)

 

Registrant’s telephone number, including area code: (307) 687-6000

 

Not Applicable

(Former name or former address if changed since last report.)

 

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

 

o     Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

 

o     Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

 

o     Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

 

o     Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

 

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (17 CFR §230.405) or Rule 12b-2 of the Securities Exchange Act of 1934 (17 CFR §240.12b-2).

 

Emerging growth company o

 

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. o

 

Securities registered pursuant to Section 12(b) of the Act: None

 

Title of each class:

 

Trading Symbol(s) 

 

Name of each exchange on which registered:

 

 

 

 

 

 

 

 


 

Item 1.01                    Entry into a Material Definitive Agreement.

 

As previously disclosed, Cloud Peak Energy Resources LLC (“CPE Resources”), a wholly owned subsidiary of Cloud Peak Energy Inc. (“CPE,” the “Company,” “we” or “our”), elected not to make an interest payment under its 6.375% senior notes due 2024 (the “2024 Notes”) of approximately $1.8 million, which was due on March 15, 2019. The indenture governing the 2024 Notes (the “2024 Notes Indenture”) provided a 30-day grace period that extended the last day to make the interest payment to April 14, 2019 before an event of default would occur under the 2024 Notes Indenture. As a result of CPE Resources’ decision not to make the interest payment by April 14, 2019, an event of default occurred under the 2024 Notes Indenture. This event of default allows the trustee or the holders of at least 25% of principal amount of the 2024 Notes to accelerate maturity of the principal, plus any accrued and unpaid interest, on the 2024 Notes. In the event of acceleration, we do not have adequate liquidity to repay the principal balance. On April 15, 2019, CPE Resources entered into a Forbearance Agreement (the “2024 Notes Forbearance Agreement”) with CPE, Cloud Peak Finance Corp. and Nomura Corporate Research and Asset Management Inc. (“Nomura”), which provided that Nomura, an investment advisor for the holders or beneficial owners of a majority (but less than 75%) of the 2024 Notes outstanding, would not enforce any of its rights and remedies available under the 2024 Notes Indenture as a result of the event of default caused by the continued non-payment of interest under the 2024 Notes until the earlier of (i) May 1, 2019 and (ii) two business days following written notice from Nomura of any breach of the 2024 Notes Forbearance Agreement. As previously disclosed, the parties entered into a letter agreement, dated as of April 30, 2019, which extended the May 1, 2019 termination date to May 7, 2019.  On May 7, 2019, the parties entered into a second letter agreement (the “Second Letter Agreement”) amending the 2024 Notes Forbearance Agreement, which further extended the termination date to May 10, 2019.

 

An event of default under the 2024 Notes for failure to pay interest does not result in a default under the 12.00% second lien senior notes due 2021 (the “2021 Notes”) unless the 2024 Notes are accelerated. The event of default under the 2024 Notes Indenture for failure to pay interest on the 2024 Notes resulted in a cross-default under our Accounts Receivable Securitization Program (the “A/R Securitization Program”), which permits PNC Bank, National Association, as administrator, to terminate the A/R Securitization Program. On April 12, 2019, we entered into an Amended and Restated Forbearance Agreement (the “PNC Forbearance Agreement”) with Cloud Peak Energy Receivables LLC, CPE Resources and PNC Bank, National Association, as administrator, which amended and restated the Forbearance Agreement originally dated March 14, 2019 and provided that PNC Bank, National Association would not exercise any of its remedies upon a default under the A/R Securitization Program based on (i) the existence of a going concern qualification in our annual audit for fiscal year 2018 or (ii) the event of default under the 2024 Notes Indenture for failure to pay interest on the 2024 Notes. As previously disclosed, the parties entered into a Second Amended and Restated Forbearance Agreement, dated as of April 30, 2019, which provided that the forbearance period under the PNC Forbearance Agreement would terminate on the earlier of (x) May  7 , 2019 and (y) the date on which any additional events of default may occur, as specified therein. On May 7, 2019, the parties entered into a Third Amended and Restated Forbearance Agreement (the “Third Amended and Restated Forbearance Agreement”), which extended the termination date to May 10, 2019.

 

As previously disclosed, we have retained Centerview Partners LLC as our investment banker, Vinson & Elkins LLP as our legal advisor, and FTI Consulting, Inc. as our financial advisor to assist us in our review of capital structure and restructuring alternatives. Our restructuring evaluation process is continuing.  We remain actively engaged in discussions with certain of our creditor groups’ financial and legal advisors and certain holders of the 2021 Notes regarding potential alternatives, including asset sales, a debt restructuring, or some combination thereof, which transaction or transactions may take place through a court-supervised process under Chapter 11 of the U.S. Bankruptcy Code, and we are also in discussions regarding our related financing needs.  Although this process remains uncertain and fluid, we will need to restructure our balance sheet in order to improve our capital structure, adjust our business to ongoing depressed Powder River Basin thermal coal industry conditions, address our significantly reduced liquidity and continue as a going concern.

 

In connection with our review of capital structure and restructuring alternatives, we expect our mining operations and reclamation activities to continue in the ordinary course of business.

 

The foregoing descriptions of the Second Letter Agreement and the Third Amended and Restated Forbearance Agreement, respectively, do not purport to be complete and are qualified in their entirety by reference

 

2


 

to the full terms and conditions of the Second Letter Agreement and the Third Amended and Restated Forbearance Agreement, which are filed with this Form 8-K as Exhibit 10.1 and Exhibit 10.2, respectively.

 

Item 2.04                    Triggering Events That Accelerate or Increase a Direct Financial Obligation or an Obligation under an Off-Balance Sheet Arrangement.

 

The information included or incorporated by reference in Item 1.01 above is incorporated into this Item 2.04.

 

Item 9.01                    Financial Statements and Exhibits

 

(d)    Exhibits.  The following exhibit is being furnished herewith.

 

Exhibit

Number

 

Description

10.1

 

Letter Agreement, dated as of May 7, 2019, by and among Cloud Peak Energy Resources LLC, Cloud Peak Energy Inc., Cloud Peak Finance Corp., and Nomura Corporate Research and Asset Management Inc.

10.2

 

Third Amended and Restated Forbearance Agreement, dated May 7, 2019, by and among Cloud Peak Energy Receivables LLC, Cloud Peak Energy Resources LLC, and PNC Bank, National Association as the Administrator, a Purchaser, a Purchaser Agent and the LC Bank

 

3


 

SIGNATURE

 

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

 

Date: May 8, 2019

 

 

CLOUD PEAK ENERGY INC.

 

 

 

By:

/s/ Bryan J. Pechersky

 

 

Name:

Bryan J. Pechersky

 

 

Title:

Executive Vice President, General Counsel and Corporate Secretary

 

4


Exhibit 10.1

 

NOMURA CORPORATE RESEARCH

AND ASSET MANAGEMENT INC.

309 West 49th Street

New York, NY 10019

 

May 7, 2019

 

Cloud Peak Energy Resources LLC

385 Interlocken Crescent, Suite 400

Broomfield, CO 80021

Attention: Heath A. Hill, Executive V.P. and Chief Financial Officer

 

Ladies and Gentlemen:

 

This letter agreement refers to the Forbearance Agreement, dated April 30, 2019 (as amended by that certain letter agreement dated as of April 30, 2019, the “ Forbearance Agreement ”), between Nomura Corporate Research and Asset Management Inc. (“ us ” and “ we ”), Cloud Peak Energy Resources (the “ Issuer ”), Cloud Peak Energy Finance Corp. (the “ Co-Issuer ”) and Cloud Peak Energy Inc. (the “ Parent Guarantor ”; collectively, with the Issuer and the Co-Issuer, “ you ”). Capitalized terms used but not defined herein have the meanings assigned to such terms in the Forbearance Agreement (including by reference to the 2024 Indenture (as defined therein)).

 

1.                                       Amendments . Upon execution of this letter agreement by you and us, the last sentence of Section 1(a) of the Forbearance Agreement shall be amended and restated as follows:

 

As used herein, “ Forbearance Termination Date ” means the earlier to occur of (a) 11:59 p.m. (New York City time) on May 10, 2019 and (b) two (2) Business Days following written notice from the Holder of any breach by any Note Party of any of the conditions or agreements provided in this Agreement (which breach remains uncured during such period).

 

2.                                       Conditions Precedent .  The effectiveness of this letter agreement is subject to the satisfaction, or waiver by the Holder, of the following conditions:

 

(a)                                  Counterparts .  The execution of this letter agreement by each Note Party and the Holder.

 

(b)                                  No Default .  No Default or Event of Default under the 2024 Indenture other than the Interest Payment Default shall have occurred and be continuing as of the date the condition set forth in Section 2(a) is satisfied.

 

3.                                       Miscellaneous . Other than as expressly amended by this letter agreement, the terms of the Forbearance Agreement shall remain in full force and effect. This letter agreement shall be governed by, and construed in accordance with, the laws of the State of New York. This letter agreement may be executed in any number of counterparts and by different parties hereto in separate counterparts, each of which when so executed and delivered shall be deemed an original, but all such counterparts together shall constitute but one and the same instrument.  Delivery of an executed signature page of this letter agreement by facsimile transmission or other electronic transmission (i.e., a “pdf” or “tif”) shall be effective as delivery of a manually executed counterpart thereof.

 

[Signature Pages Follow]

 


 

Very truly yours,

 

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

 

By:

/s/ David Crall

 

 

Name:

David Crall

 

 

Title:

CIO

 

 


 

 

NOTE PARTIES

 

 

 

CLOUD PEAK ENERGY RESOURCES LLC , as Issuer

 

 

 

By:

/s/ Heath A. Hill

 

Name:

Heath A. Hill

 

Title:

Executive V.P. and Chief Financial Officer

 

 

 

CLOUD PEAK ENERGY FINANCE CORP. , as Issuer

 

 

 

By:

/s/ Heath A. Hill

 

Name:

Heath A. Hill

 

Title:

Executive V.P. and Chief Financial Officer

 

 

 

CLOUD PEAK ENERGY INC. , as Parent Guarantor

 

 

 

By:

/s/ Heath A. Hill

 

Name:

Heath A. Hill

 

Title:

Executive V.P. and Chief Financial Officer

 


Exhibit 10.2

EXECUTION VERSION

 

THIRD AMENDED AND RESTATED FORBEARANCE AGREEMENT

 

This THIRD AMENDED AND RESTATED FORBEARANCE AGREEMENT, dated as of May 7, 2019 (this “ Agreement ”), is entered into among the undersigned in connection with the AMENDED AND RESTATED RECEIVABLES PURCHASE AGREEMENT, dated as of January 31, 2017 (as amended, supplemented and modified from time to time, the “ RPA ”) among CLOUD PEAK ENERGY RECEIVABLES LLC, a Delaware limited liability company, as seller (individually and in such capacity, the “ Seller ”), CLOUD PEAK ENERGY RESOURCES LLC, a Delaware limited liability company (“ Cloud Peak ”), as initial servicer (in such capacity, together with its successors and permitted assigns in such capacity, the “ Servicer ”), the various Conduit Purchasers, Related Committed Purchasers, LC Participants and Purchaser Agents from time to time party hereto, and PNC BANK, NATIONAL ASSOCIATION, as Administrator (in such capacity, together with its successors and assigns in such capacity, the “ Administrator ”) and as issuer of Letters of Credit (in such capacity, together with its successors and assigns in such capacity, the “ LC Bank ”).  This Agreement amends and restates the Second Amended and Restated Forbearance Agreement among the undersigned entered into on April 30, 2019, (“ Second Amended and Restated Forbearance Agreement ”), which amended and restated the Amended and Restated Forbearance Agreement among the undersigned entered into on April 12, 2019 (“ Amended and Restated Forbearance Agreement ”) which amended and restated the Forbearance Agreement among the undersigned entered into on March 14, 2019 (the “ Original Forbearance Agreement ”).  T erms which are capitalized in this Agreement and not otherwise defined herein shall have the meanings ascribed to such terms in the RPA.

 

W I T N E S S E T H

 

WHEREAS, the Seller and Cloud Peak have each advised the Administrator that the audited consolidated financial statements of Parent and its consolidated Subsidiaries for fiscal year 2018 contained a “going concern” or like qualification or exception by Parent’s auditors (such financial statements, the “ Specified Qualified Financial Statements ”);

 

WHEREAS, the delivery by the Seller and Cloud Peak of such Subject Qualified Financial Statements constituted a breach by the Seller of its covenants under Section 1(a)(v)  of Exhibit IV to the RPA and a breach by Cloud Peak of its covenants under Section 7(a)  of the Performance Guaranty (the “ Original Specified Breaches ”), which resulted in the occurrence of a Termination Event pursuant to under clause a(i)  of Exhibit V to the RPA (such Termination Event solely to the extent arising from the Original Specified Breaches, the “ Original Specified Termination Event ”);

 

WHEREAS, the Seller and Cloud Peak have each advised the Administrator that Cloud Peak did not make an interest payment due and owing on the 6.375% unsecured notes due 2024 (the “ Additional Specified Breach ,” collectively with the Original Specified Breaches, the “ Specified Breaches ”) which resulted in the occurrence of a Termination Event pursuant to clause (j) of Exhibit V to the RPA (such Termination Event solely to the extent arising from the Additional Specified Breach, the “ Additional Specified Termination Event ,” collectively with the Original Specified Termination Event, the “ Specified Termination Events ”); and

 


 

WHEREAS, the Seller and Cloud Peak now request that the Administrator, the Purchasers and the Purchaser Agents (collectively, the “ Forbearing Parties ”), for an additional limited period of time, forbear from exercising their respective rights and remedies under the RPA and the other Transaction Documents with respect to the Specified Termination Events, and each Forbearing Party is willing to agree to such forbearance, on and subject to the terms and conditions set forth in this Agreement;

 

NOW, THEREFORE, in consideration of the mutual provisions and covenants contained herein and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereto agree as follows:

 

1.             Acknowledgment of Specified Termination Events and Rights and Remedies .  The Seller and Cloud Peak both acknowledge, confirm and agree that the Specified Termination Events have occurred, and as a result thereof, the Administrator has the right to exercise all such rights and remedies against the Seller and Cloud Peak as available to it under the RPA, the other Transaction Documents and under applicable law, with such notice as may be expressly provided for in the RPA, the other Transaction Documents or required by applicable law.  The Forbearing Parties hereby acknowledge and agree that the Amended and Restated Forbearance Agreement constituted notice of the Specified Breaches and Specified Termination Events pursuant to Sections 1(a) and 1(b) of the RPA.

 

2.             Acknowledgments.

 

(a)           Acknowledgment of Current Outstanding Obligations.   The Seller and Cloud Peak hereby acknowledge that, as of the Effective Date (as defined below), the Seller is indebted to the Forbearing Parties (as defined below) for all amounts outstanding on the Effective Date in respect of the Aggregate Capital, the LC Participation Amount and the aggregate amount of accrued and unpaid Discount and Fees (the foregoing amounts are hereafter collectively referred to as the “ Current Outstanding Obligations ”), all without offset, counterclaims or defenses of any kind.  Except as specifically set forth herein, nothing shall alter, amend, modify or extinguish the obligation of the Seller or Cloud Peak to repay any Current Outstanding Obligations or any other obligations they have or may have under the Transaction Documents.

 

(b)           Acknowledgment of Liens and Priority; Reaffirmation of Security Interests .  The Seller hereby acknowledges, confirms and agrees that (i)  the Seller has caused the filing of all appropriate financing statements in the proper filing office in the appropriate jurisdictions under applicable law in order to perfect the sale of the Receivables and Related Security from each Originator to the Seller pursuant to the Purchase and Sale Agreement, and the sale and security interest therein from the Seller to the Administrator under the RPA as required under the RPA, (ii) the RPA creates a valid and continuing security interest (as defined in the applicable UCC) in the Receivables included in the Receivables Pool in favor of the Administrator (for the benefit of the Purchasers) and (iii) the Seller has taken all action necessary or desirable to establish and maintain a valid and enforceable first priority perfected undivided percentage ownership or security interest, to the extent of the Purchased Interest, in the Pool Receivables, the Related Security and Collections with respect thereto and a first priority perfected

 


 

security interest in the Pool Assets, in each case, free and clear of any Adverse Claim (other than Permitted Liens), in favor of the Administrator (on behalf of the Purchasers), as required under the RPA.  The Seller hereby reaffirms the Seller’s prior conveyance to the Administrator of a continuing security interest in and lien on the Pool Assets which it granted to the Administrator including a security interest in and lien upon any and all funds and/or monies of the Seller.

 

(c)           Acknowledgement of Notice Received and Compliance Therewith .  The Seller and the Servicer acknowledge their receipt on March 6, 2019 of the Administrator’s notice that it will require the Seller and the Servicer to deliver Daily Reports pursuant to Sections 1(a)(ii)(C) and 2(a)(i)(C) of Exhibit IV to the RPA.  The Seller and the Servicer acknowledge and agree that they began delivering such Daily Reports in accordance with such Sections on or prior to March 22, 2019 and will continue to do so unless and until the Administrator otherwise instructs the Seller and the Servicer in writing.

 

3.             No Waivers; Reservation of Rights .  The Forbearing Parties have not waived, are not by this Agreement waiving, and have no intention of waiving, any Specified Breach, the Specified Termination Events, any other breach of any Transaction Document or any Termination Events which may be continuing on the date hereof or any breach of any Transaction Document or any Termination Events which may occur after the date hereof (whether the same or similar to the Specified Breaches or the Specified Termination Events or otherwise).

 

4.             Limited Forbearance Period; Forbearance Termination.

 

(a)           At the Seller and Cloud Peak’s request and in reliance upon the representations, warranties and covenants of the Seller and Cloud Peak contained in this Agreement, and subject to the terms and conditions of this Agreement, each Forbearing Party hereby agrees to forbear during the Forbearance Period (as defined below) from exercising any of its rights and remedies with respect to the Specified Breaches or the Specified Termination Events, whether arising under the RPA, the other Transaction Documents or applicable law; provided that the Forbearing Parties agree that during the Forbearance Period the “Alternate Rate” and the “CP Rate” will be determined as if no Termination Event shall have occurred under the RPA.  For the purposes of this Agreement, the “ Forbearance Period ” means the period commencing on the Effective Date (as defined below) and terminating on the earlier to occur of (i) May 10, 2019 and (ii) the date on which any one or more of the following events has occurred and is continuing (hereinafter referred to as an “ Additional Event of Default ”):  (1) the failure by the Seller or Cloud Peak to perform or observe any of the covenants or agreements contained in this Agreement or any Transaction Document to which it is a party (other than a Specified Breach), (2) the occurrence of any Termination Event or default under the RPA or any Transaction Document that is not one of the Specified Termination Events or (3) the exercise of rights and/or remedies by the unsecured noteholders and/or Trustee on account of the 6.375% Senior Unsecured Notes due 2024 against any of Cloud Peak and/or any of its respective affiliates.

 


 

(b)           From and after the date on which the Forbearance Period terminates or expires, whichever occurs first (said date is hereinafter referred to as the “ Forbearance Termination Date ”), the Forbearing Parties’ respective agreements hereunder to forbear shall automatically and without further notice or action terminate and be of no further force and effect, and each Forbearing Party shall have the immediate and unconditional right, in its discretion (subject to applicable provisions of the RPA, the other Transaction Documents and applicable law), to exercise any or all of its rights and remedies under the RPA, the other Transaction Documents and applicable law with respect to the Specified Termination Events, any Termination Event or default which may be continuing on the date hereof or any Additional Event of Default which may occur after the date hereof, including, without limitation, enforcement of the Liens upon the Pool Assets or any portion thereof held by the Administrator or any other Forbearing Party.  The Forbearing Parties have not waived any of such rights or remedies, and nothing in this Agreement, nor any delay on any Forbearing Party’s part after the Forbearance Termination Date in exercising any such rights or remedies, can be construed as a waiver of any of such rights or remedies.

 

5.             Conditions Precedent to Effectiveness .

 

The effectiveness of this Agreement is subject to the receipt by the Administrator, in form and substance reasonably acceptable to the Administrator, of counterparts of this Agreement duly executed by the Seller and Cloud Peak (the date of such satisfaction, the “ Effective Date ”).

 

6.             Fees and Expenses .

 

(a)           T he Seller and Cloud Peak hereby jointly and severally agree to pay all fees, costs and expenses incurred by the Administrator in connection with this Agreement and any transactions contemplated hereby, including any and all outstanding legal and consultant fees and expenses of the Administrator, as set forth in invoices delivered to the Seller and Cloud Peak within two Business Days of the later of (i) the date that any such invoice is received by the Seller and Cloud Peak and (ii) the Effective Date.

 

(b)           The Seller and Cloud Peak hereby jointly and severally agree to pay to the Administrator (for its own account) a forbearance fee in an aggregate amount of $100,000, which forbearance fee shall be non-refundable and was earned in full on the Effective Date of the Amended and Restated Forbearance Agreement.(1)  Such forbearance fee will be payable upon the earliest to occur of (i) the effectiveness of any amendment to the RPA after the date hereof, (ii) the expiration or termination of the Forbearance Period, (iii) the Facility Termination Date and (iv) the date on which the Aggregate Capital and the LC Participation Amount have been reduced to zero ($0).

 


(1)  For the avoidance of doubt, the fee set forth in this section 6(b) is the same fee as the fee set forth in section 6(b) the Second Amended and Restated Forbearance Agreement and the Amended and Restated Forbearance Agreement and not an additional fee.

 


 

7.             RELEASE .  THE SELLER AND CLOUD PEAK, ON BEHALF OF THEMSELVES, RESPECTIVELY, AND ALL PERSONS AND ENTITIES CLAIMING BY, THROUGH, OR UNDER THEM, HEREBY RELEASE, WAIVE AND FOREVER RELINQUISH AND DISCHARGE EACH FORBEARING PARTY AND ITS RESPECTIVE OFFICERS, DIRECTORS, ATTORNEYS, AGENTS, AFFILIATES, AND SUCCESSORS AND ASSIGNS (COLLECTIVELY THE “ RELEASEES ”), OF, FROM, AND WITH RESPECT TO ANY AND ALL MANNER OF ACTION AND ACTIONS, DEMANDS, OBLIGATIONS, CAUSE AND CAUSES OF ACTIONS, SUITS, DISPUTES, CLAIMS AND DEFENSES, COUNTERCLAIMS AND/OR LIABILITIES, CROSS CLAIMS, AND DEFENSES, THAT ARE KNOWN OR UNKNOWN, SUSPECTED OR UNSUSPECTED, PAST OR PRESENT, ASSERTED OR UNASSERTED, CONTINGENT OR LIQUIDATED, WHETHER OR NOT WELL FOUNDED IN FACT OR LAW, WHETHER IN CONTRACT, IN TORT OR OTHERWISE, AT LAW OR IN EQUITY, BASED UPON, RELATING TO, ARISING OUT OF, BASED UPON OR IN ANY MANNER CONNECTED WITH (I) ANY TRANSACTION, EVENT, CIRCUMSTANCE, ACTION, FAILURE TO ACT OR OCCURRENCE OF ANY SORT OR TYPE, WHETHER KNOWN OR UNKNOWN, WITH RESPECT TO THE TRANSACTION DOCUMENTS AND/OR THE ADMINISTRATION THEREOF OR THE OBLIGATIONS CREATED THEREBY; (II) ANY DISCUSSIONS, COMMITMENTS, NEGOTIATIONS, CONVERSATIONS OR COMMUNICATIONS WITH RESPECT TO THE REFINANCING, RESTRUCTURING OR COLLECTION OF ANY OBLIGATIONS RELATED TO THE TRANSACTION DOCUMENTS AND/OR THE ADMINISTRATION THEREOF OR THE OBLIGATIONS CREATED THEREBY, OR (III) ANY MATTER RELATED TO THE FOREGOING, IN EACH CASE, PRIOR TO THE EFFECTIVE DATE.

 

8.             Representations and Warranties of Borrower .  The Seller and Cloud Peak make the following representations and warranties to the Forbearing Parties as of each of the date hereof and the Effective Date:

 

(a)           each of the representations and warranties (other than (i) any representation and warranty which would not be true by virtue of the Specified Termination Events and Specified Breaches and (ii) with respect to Cloud Peak, the representation and warranty set forth in Section 2(f) of Exhibit III to the RPA) by the Seller and Cloud Peak set forth in the RPA and each other Transaction Document to which it is a party are true and correct in all material respects, except to the extent that such representations and warranties specifically refer to an earlier date in which case they shall have been true and correct in all material respects as of such earlier date;

 

(b)           other than the Specified Termination Events, no Termination Event has occurred and is continuing, and other than as a result of the Specified Breaches, no Unmatured Termination Event has occurred and is continuing;

 

(c)           the execution, delivery and performance by the Seller and Cloud Peak of this Agreement and any other documents entered into in connection therewith are (i) within their powers, (ii) have been duly authorized by all necessary limited liability company action, respectively, (iii) do not contravene any provision of their operating agreements, (iv) do not violate any law or regulation, or any order or decree of any court

 


 

or Governmental Authority, (v) do not conflict with or result in a material breach or termination of, constitute a material default under or accelerate or permit the acceleration of any performance required by any material indenture, mortgage, deed of trust, lease, agreement or other instrument to which it is a party or by which it or any of its property is bound, (vi) do not result in the creation or imposition of any Lien upon any of its property other than those in favor of the Administrator and (vii) do not require any material consent or approval of any Governmental Authority or any other Person; and

 

(d)           each of this Agreement and any other documents entered into in connection therewith constitutes a legal, valid and binding obligation of the Seller and Cloud Peak enforceable against them in accordance with its terms, except to the extent limited by applicable bankruptcy, insolvency, reorganization, moratorium and other laws affecting creditors’ rights generally, and by general equitable principles (whether considered in a proceeding in equity or at law).

 

9.             Acknowledgement .  Each party hereto acknowledges that the terms of this Agreement shall not constitute a course of dealing among the parties hereto.

 

10.          Counterparts .  This Agreement may be executed in any number of counterparts and by the different parties hereto on separate counterparts and each such counterpart shall be deemed to be an original, but all such counterparts shall together constitute but one and the same Action.  Receipt by telecopy or electronic copy of any executed signature page to this Agreement shall constitute effective delivery of such signature page.

 

11.          Severability .  The illegality or unenforceability of any provision of this Agreement or any instrument or agreement required hereunder shall not in any way affect or impair the legality or enforceability of the remaining provisions of this Agreement or any instrument or agreement required hereunder.

 

12.          GOVERNING LAW; JURISDICTION; NOTICES .  THIS AGREEMENT SHALL BE GOVERNED BY, AND SHALL BE CONSTRUED AND ENFORCED IN ACCORDANCE WITH, THE INTERNAL LAWS OF THE STATE OF NEW YORK (NOT INCLUDING SUCH STATE’S CONFLICTS OF LAWS PROVISION OTHER THAN SECTIONS 5-1401 AND 5-1402 OF THE NEW YORK GENERAL OBLIGATIONS LAW). SECTIONS 11.10 AND 11.11 OF THE CREDIT AGREEMENT ARE INCORPORATED HEREIN BY REFERENCE, MUTATIS MUTANDIS .

 

13.          WAIVER OF JURY TRIAL .  THE PARTIES HERETO WAIVE ALL RIGHT TO TRIAL BY JURY IN ANY ACTION, SUIT, OR PROCEEDING BROUGHT TO RESOLVE ANY DISPUTE, WHETHER SOUNDING IN CONTRACT, TORT OR OTHERWISE, BETWEEN OR AMONG THE ADMINISTRATOR, THE SELLER AND CLOUD PEAK ARISING OUT OF, CONNECTED WITH, RELATED TO, OR INCIDENTAL TO THE RELATIONSHIP ESTABLISHED AMONG THEM IN CONNECTION WITH, THIS AGREEMENT OR THE TRANSACTIONS RELATED HERETO.

 


 

14.          Section Titles .  The Section titles contained in this Agreement are and shall be without substantive meaning or content of any kind whatsoever and are not a part of the agreement between the parties hereto.

 

15.          Transaction Document .  The Agreement, the Second Amended and Restated Forbearance Agreement, the Amended and Restated Forbearance Agreement and the Original Forbearance Agreement shall be deemed to be Transaction Documents for all purposes of the RPA and each other Transaction Document.

 

[ Signature Pages Follow ]

 


 

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

 

 

 

CLOUD PEAK ENERGY RECEIVABLES LLC

 

 

 

 

 

 

By:

/s/ Heath A. Hill

 

Name: Heath A. Hill

 

Title: Executive V.P. and Chief Financial Officer

 

 

 

 

 

CLOUD PEAK ENERGY RESOURCES LLC

 

 

 

 

 

 

By:

/s/ Heath A. Hill

 

Name: Heath A. Hill

 

Title: Executive V.P. and Chief Financial Officer

 


 

 

PNC BANK, NATIONAL ASSOCIATION, as the Administrator, a Purchaser, a Purchaser Agent and the LC Bank

 

 

 

 

 

 

 

By:

/s/ Michael Brown

 

Name: Michael Brown

 

Title: Senior Vice President