Exhibit 10.23

FOURTH AMENDMENT TO TERM CREDIT AGREEMENT

 
THIS FOURTH AMENDMENT TO TERM CREDIT AGREEMENT (this “Agreement”), is made and
entered into as of November 5, 2008 (the “Effective Date”), by and among James
River Coal Company, a corporation organized under the laws of Virginia (“JRCC”),
and certain of JRCC’s Subsidiaries identified on the signature pages hereof, as
borrowers (such Subsidiaries, together with JRCC, are referred to hereinafter
each individually as a “Borrower”, and collectively, jointly and severally, as
the “Borrowers”), and the other credit parties hereto, identified on the
signature pages hereof as Guarantors (together, the Borrowers and Guarantors,
the “Credit Parties”), the lenders party hereto from time to time (the
“Lenders”), Morgan Stanley Senior Funding, Inc. (“MS”), a corporation formed
under the laws of Delaware, as administrative agent for the Lenders (in such
capacity, together with its successors and assigns, if any, the “Administrative
Agent”) and as sole-bookrunner and lead arranger (in such capacity, the “Lead
Arranger”), and Morgan Stanley & Co. Incorporated, as collateral agent for the
Lenders (in such capacity, together with its successors and assigns, if any, the
“Collateral Agent”).

W I T N E S S E T H:
 
WHEREAS, the Borrowers, the other Credit Parties signatory thereto, the Lenders
and L/C Issuers party thereto, and the Administrative Agent are parties to that
certain Term Credit Agreement, dated as of February 26, 2007 (as amended,
restated, supplemented and revised from time to time, the “Credit Agreement”),
pursuant to which the Lenders have committed to make certain loans and other
extensions of credit to the Borrowers upon the terms and conditions set forth
therein; and
 
WHEREAS, the Borrowers have requested that the Lenders make certain changes to
the Credit Agreement and that the Lenders consent to certain actions of the
Borrowers; and
 
WHEREAS, the Lenders are willing, upon and subject to certain conditions, to
amend the Credit Agreement in certain respects, all in accordance with and
subject to the terms and conditions set forth herein.
 
NOW, THEREFORE, in consideration of the premises, the covenants and agreements
contained herein, and other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the parties hereto do hereby agree
that capitalized terms used herein and not otherwise defined herein shall have
the meanings given to such terms in the Credit Agreement and as follows:
 

 

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1.            Waiver. The Administrative Agent and the undersigned Lenders,
subject to the terms and conditions of this Agreement, including without
limitation the conditions to effectiveness specified in Section 7 below, hereby
waive any Default or Event of Default solely occurring by reason of the
Borrower’s failure to comply at any time with the financial covenants set forth
in Article X of the Credit Agreement solely for the periods ending September 30,
2008 and December 31, 2008.
 
2.            Amendments to the Credit Agreement.
 
(a)           Section 1.01 of the Credit Agreement, Definitions, is hereby
amended by adding the following definitions in the appropriate alphabetical
order:

“Fourth Amendment Date” means the effective date of the Fourth Amendment to Term
Credit Agreement dated as of November 5, 2008.

“Fourth Amendment Fee” means each Lender’s pro rata share of $2,738,898.26.

“Supplemental Fourth Amendment Fee” means each Lender’s pro rata share of
$5,477,796.52.
 
(b)           Section 1.01 of the Credit Agreement, Definitions, is hereby
amended by deleting the definitions of “Applicable Margin”, “Commitment Fee” in
their entirety and substituting in lieu thereof the following:

"Applicable Margin” means (a) from and including October 1, 2008 until December
31, 2008 the Applicable Margin shall be six and a half percentage points (6.50%)
in the case of Base Rate Loans and seven and a half percentage points (7.50%) in
the case of LIBOR Rate Loans; (b) from and including January 1, 2009 until March
31, 2009 the Applicable Margin shall be nine percentage points (9.0%) in the
case of Base Rate Loans and ten percentage points (10.0%) in the case of LIBOR
Rate Loans; (c) from and including April 1, 2009 the Applicable Margin shall be
eleven and a half percentage points (11.50%) in the case of Base Rate Loans and
twelve and a half percentage points (12.50%) in the case of LIBOR Rate Loans.
 
(c)           Section 4.04, of the Credit Agreement, Fees, is hereby amended by
deleting the “and” immediately prior to subsection (c) and adding a final clause
“(d)” and “(e)” as follows:
 
“, (d) substantially contemporaneously with the effectiveness of the Fourth
Amendment, the Borrowers hereby agree to pay the Fourth Amendment Fee to each
Lender that, on or before November 12, 2008, executes and delivers its consent
to the Fourth Amendment, and (e) on the earlier of February 28, 2009 or date on
which the Loans have been prepaid in full the Borrowers hereby agree to pay the
Supplemental Fourth Amendment Fee to each Lender that delivered its consent to
the Fourth Amendment on or before November 12, 2008. Such Fees shall be fully
earned upon the Fourth Amendment Date, and for the avoidance of doubt, shall
constitute Obligations of the Borrower.”
 

 
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3.          Affirmation and Acknowledgment of the Borrowers.  The Borrowers
hereby ratify and confirm all of their Obligations to the Lenders, including,
without limitation, the Loans, and the Borrowers hereby affirm their absolute
and unconditional promise to pay to the Lenders all indebtedness, obligations
and liabilities in respect of the Loans, the Letters of Credit, and all other
amounts due under the Credit Agreement and the other Loan Documents as amended
hereby.  The Borrowers hereby confirm that the Obligations are and remain
secured pursuant to the Loan Documents and pursuant to all other instruments and
documents executed and delivered by the Borrowers as security for the
Obligations.
 
4.          No Other Waivers, Amendments or Consents.  Except for the waiver in
Section 1 hereof and the amendments expressly set forth and referred to in
Section 2 hereof, the Credit Agreement shall remain unchanged and in full force
and effect.  The waiver and consents contained herein shall not extend beyond
the terms expressly set forth herein for such waiver and consents, nor impair
any right or power accruing to the Administrative Agent or any Lender with
respect to any other Default or Event of Default or any Default or Event of
Default which occurs after the date hereof.  Nothing in this Agreement is
intended or shall be construed to be a novation of any Obligations or any part
of the Credit Agreement or any of the other Loan Documents or to affect, modify
or impair the continuity or perfection of the Administrative Agent’s Liens under
the Credit Agreement and Loan Documents.
 
5.           Representations, Warranties and Covenants.  To induce the
undersigned Lenders to enter into this Agreement, the Credit Parties hereby
warrant, represent and covenant to and with to the Lenders and the
Administrative Agent that: (a) this Agreement has been duly authorized, executed
and delivered by the Credit Parties; (b) this Agreement and the Credit Agreement
as amended hereby constitute legal, valid and binding obligations of the Credit
Parties, enforceable in accordance with their respective terms; (c) after giving
effect to this Agreement, no Default or Event of Default has occurred and is
continuing as of this date; (d) no approval or consent of, or filing with, any
governmental agency or authority is required to make valid and legally binding
the execution, delivery or performance by the Credit Parties of this Agreement
or the Credit Agreement as amended hereby; and (e) after giving effect to this
Agreement, all of the representations and warranties made by the Credit Parties
in the Credit Agreement are true and correct in all material respects on and as
of the date of this Agreement (except to the extent that any such
representations or warranties expressly referred to a specific prior date and
except for changes therein expressly permitted or expressly contemplated by the
Credit Agreement or the other Loan Documents).  Any breach by the Credit Parties
of any of its representations, warranties and covenants contained in this
Section 5 shall be an Event of Default under the Credit Agreement.
 
6.            Conditions to Effectiveness.  This Agreement shall not become
effective unless and until the Administrative Agent has received (a) payment by
the Borrowers of the Fourth Amendment Fee and (b) one or more counterparts of
this Agreement, duly executed, completed and delivered by the Borrowers, the
other Credit Parties and the Required Lenders.
 
7.           Reimbursement of Expenses.  The Borrowers hereby agree to reimburse
the Administrative Agent on demand for all reasonable fees and reasonable
out-of-pocket costs and expenses (including without limitation the reasonable
and actual fees and expenses of its counsel) incurred by the Administrative
Agent in connection with the negotiation, documentation and consummation of this
Agreement and the other documents executed in connection herewith and the
transactions contemplated hereby.
 

 
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8.           Governing Law.  THIS AGREEMENT SHALL BE GOVERNED BY, AND CONSTRUED
IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK FOR CONTRACTS TO BE
PERFORMED ENTIRELY WITHIN SAID STATE AND ANY APPLICABLE LAWS OF THE UNITED
STATES OF AMERICA.
 
9.           Severability of Provisions.  Any provision of this Agreement which
is prohibited or unenforceable in any jurisdiction shall, as to such
jurisdiction, be ineffective to the extent of such prohibition or
unenforceability without invalidating the remaining provisions hereof or
affecting the validity or enforceability of such provision in any other
jurisdiction.  To the extent permitted by applicable law, the Borrowers hereby
waive any provision of law that renders any provision hereof prohibited or
unenforceable in any respect.
 
10.           Counterparts.  This Agreement may be executed in any number of
several counterparts, all of which shall be deemed to constitute but one
original and shall be binding upon all parties, their successors and permitted
assigns.  Delivery of an executed signature page of this Agreement by facsimile
transmission or electronic transmission shall be as effective as delivery of a
manually executed counterpart hereof.
 
11.           Entire Agreement.  The Credit Agreement as amended through this
Agreement embodies the entire agreement between the parties hereto relating to
the subject matter thereof and supersedes all prior agreements, representations
and understandings, if any, relating to the subject matter thereof.
 
12.           No Strict Construction.  The parties hereto have participated
jointly in the negotiation and drafting of this Agreement.  In the event an
ambiguity or question of intent or interpretation arises, this Agreement shall
be construed as if drafted jointly by the parties hereto and no presumption or
burden of proof shall arise favoring or disfavoring any party by virtue of the
authorship of any provisions of this Agreement.
 
13.           No Third Party Reliance.  This Agreement is solely for the benefit
of the parties signatory hereto, their successors and permitted assigns.  No
waiver, consent or amendment pursuant to this Agreement may be relied upon by
any third parties.
 

 
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14.           Release. The Credit Parties hereby remise, release, acquit,
satisfy and forever discharge the Lenders, the Administrative Agent, the
Collateral Agent, and the L/C Issuer and their respective agents, employees,
officers, directors, predecessors, attorneys and all others acting or purporting
to act on behalf of or at the direction of the Lenders, the Administrative
Agent, the Collateral Agent, or the L/C Issuer of and from any and all manner of
actions, causes of action, suit, debts, accounts, covenants, contracts,
controversies, agreements, variances, damages, judgments, claims and demands
whatsoever, in law or in equity, which any of such parties ever had or now has
against the Lenders, the Administrative Agent, the Collateral Agent, and the L/C
Issuer their respective agents, employees, officers, directors, attorneys and
all persons acting or purporting to act on behalf of or at the direction of the
Lenders or the Administrative Agent (“Releasees”), for, upon or by reason of any
matter, cause or thing whatsoever arising from, in connection with or in
relation to the Credit Agreement or any of the other Loan Documents (including
this Agreement) through the date hereof.  Without limiting the generality of the
foregoing, the Credit Parties waive and affirmatively agree not to allege or
otherwise pursue any defenses, affirmative defenses, counterclaims, claims,
causes of action, setoffs or other rights they do, shall or may have as of the
date hereof, including, but not limited to, the rights to contest any conduct of
the Lenders, Administrative Agent or other Releasees on or prior to the date
hereof.
 

 
 
 
 
 
 
 
 
 
 

 
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IN WITNESS WHEREOF, the parties have caused this Fourth Amendment to Term Credit
Agreement to be duly executed by their respective officers or representatives
thereunto duly authorized, as of the date first above written.
 

 
BORROWERS:
 
JAMES RIVER COAL COMPANY
 
By: /s/  Peter T. Socha
Name: Peter T. Socha
Title:   Chief Executive Officer
   
JAMES RIVER COAL SERVICE COMPANY
 
By: /s/  Peter T. Socha
Name: Peter T. Socha
Title:   Chief Executive Officer
   
LEECO, INC.
 
By: /s/  Peter T. Socha
Name: Peter T. Socha
Title:   Chief Executive Officer

 
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TRIAD MINING, INC.
 
By: /s/  Peter T. Socha
Name: Peter T. Socha
Title:   Chief Executive Officer
   
TRIAD UNDERGROUND MINING, LLC
 
By: /s/  Peter T. Socha
Name: Peter T. Socha
Title:   Chief Executive Officer
   
BLEDSOE COAL CORPORATION
 
By: /s/  Peter T. Socha
Name: Peter T. Socha
Title:   Chief Executive Officer
   
JOHNS CREEK ELKHORN COAL CORPORATION
 
By: /s/  Peter T. Socha
Name: Peter T. Socha
Title:   Chief Executive Officer
   
JAMES RIVER COAL SALES, INC.
 
By: /s/  Peter T. Socha
Name: Peter T. Socha
Title:   Chief Executive Officer
   
BLEDSOE COAL LEASING COMPANY
 
By: /s/  Peter T. Socha
Name: Peter T. Socha
Title:   Chief Executive Officer

 
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BLUE DIAMOND COAL COMPANY
 
By: /s/  Peter T. Socha
Name: Peter T. Socha
Title:   Chief Executive Officer
   
MCCOY ELKHORN COAL CORPORATION
 
By: /s/  Peter T. Socha
Name: Peter T. Socha
Title:   Chief Executive Officer
   
GUARANTORS:
 
BDCC HOLDING COMPANY, INC.
 
By: /s/  Peter T. Socha
Name: Peter T. Socha
Title:   Chief Executive Officer
   
EOLIA RESOURCES, INC.
 
By: /s/  Peter T. Socha
Name: Peter T. Socha
Title:   Chief Executive Officer

 
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SHAMROCK COAL COMPANY, INCORPORATED
 
By: /s/  Peter T. Socha
Name: Peter T. Socha
Title:   Chief Executive Officer
   
JOHNS CREEK COAL COMPANY
 
By: /s/  Peter T. Socha
Name: Peter T. Socha
Title:   Chief Executive Officer
   
JOHNS CREEK PROCESSING COMPANY
 
By: /s/  Peter T. Socha
Name: Peter T. Socha
Title:   Chief Executive Officer

 
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LENDER:
MORGAN STANLEY SENIOR FUNDING, INC.
_________________________________________
   
By: /s/  Stephen B. King
Name: Stephen B. King
Title:   VP
   
COLLATERAL AGENT
 
MORGAN STANLEY & CO. INCORPORATED
 
By: /s/  Stephen B. King
Name: Stephen B. King
Title:   Executive Director
 

 
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LENDER:
 
SANDELMAN FINANCE 2006-1, LTD.
 
By: /s/  Peter A. Bio
Name: Peter A. Bio
Title:   Head of Capital Structure

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 

 

 
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LENDER:
 
TRILOGY PORTFOLIO COMPANY, LLC
 
By: /s/  Paul S. Greenberg
Name: Paul S. Greenbergo
Title:   Principle

 

 
 
 
 
 
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