----

----

----

| Period                                                              | Ratio                                    |
|---------------------------------------------------------------------|------------------------------------------|
|                                                                |                                     |
| September 30                through December 31, 2005     | 3.50                to 1.00              |
| January 1,                2006 through March 31, 2006     | 2.85                to 1.00              |
| April 1,                2006 through September 30, 2006   | 2.50                to 1.00              |
| October 1,                2006 through September 30, 2007 | 2.25                to 1.00              |
| October 1,                2007 and thereafter                  |  2.00                to 1.00” |

| Year                                                | Amount                   |
|-----------------------------------------------------|--------------------------|
| 2006                                                | $85,000,000              |
| 2007                and each fiscal year thereafter |  $80,000,000” |

----

----

**SECTION      14. **
**Applicable      Law**
**.      THIS AMENDMENT AND WAIVER SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE      WITH, THE LAWS OF THE STATE OF NEW YORK.**

----

|         |                                                             |                           |
|--------------|------------------------------------------------------------------|--------------------------------|
|         | JAMES              RIVER COAL              COMPANY, as Borrower, |
|    |                                                        |                      |
|         | By:                                                    | Samuel              M. Hopkins |
|         |   Name:              Samuel M. Hopkins                 |
|         |                 Title: Vice President                  |

|         |                                                                                                |                                         |
|--------------|-----------------------------------------------------------------------------------------------------|----------------------------------------------|
|         | PNC                BANK, NATIONAL ASSOCIATION, as Lender and as Administrative                Agent |
|    |                                                                                           |                                    |
|         | By:                                                                                       | /s/ Christopher              N. Moravec |
|         |   Name:              Christopher N. Moravec                                               |
|         |                 Title:  SVP                                                          |

----

|         |                                                              |                                       |
|--------------|-------------------------------------------------------------------|--------------------------------------------|
|         | Name                of Institution:                               |
|    | Bear                Stearns                Corporate Lending Inc. |
|         | by                                                                |  /s/              Victor Bulzacchelli |
|         | Name: Victor              Bulzacchelli                       |
|         | Title:              Vice President                                |

----

|         |                                  |                                   |
|--------------|---------------------------------------|----------------------------------------|
|         | Name                  of Institution: |
|    | Bank of America                       |
|         | by                                    |  /s/                Jonathan M. B |
|         | Name:                Jonathan M. B    |
|         | Title:                Vice President  |

----

|         |                                                                                                                                                             |                                   |
|--------------|------------------------------------------------------------------------------------------------------------------------------------------------------------------|----------------------------------------|
|         | BRIDGEPORT                    CLO LTDBy: Deerfield                    Capital Management LLC                    asits                    Collateral Manager |
|    |                                                                                                                                                                  |
|         | By                                                                                                                                                               |  /s/                  Peter Sakon |
|         | Name:                  Peter Sakon                                                                                                                               |
|         | Title:                  Vice President                                                                                                                           |

----

|         |                                                                                                                                                                              |                                       |
|--------------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------------------------------------------|
|         | BRYN                        MAWR CLO, Ltd.By: Deerfield                        Capital Management LLC                        asits                        Collateral Manager |
|    |                                                                                                                                                                                   |
|         | By                                                                                                                                                                                |  /s/                      Peter Sakon |
|         | Name:                      Peter Sakon                                                                                                                                            |
|         | Title:                      Vice President                                                                                                                                        |

----

|         |                                            |                                              |
|--------------|-------------------------------------------------|---------------------------------------------------|
|         | Name                  of Institution:           |
|    | Caterpillar Financial Services                  |
|         | by                                              |  /s/                Christopher C. Patterson |
|         | Name:                Christopher C. Patterson   |
|         | Title:                Global Operations Manager |

----

|         |                                                                                                                                                                         |                                     |
|--------------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|------------------------------------------|
|         | CUMBERLAND                      II CLO LTD.By: Deerfield                      Capital Management LLC                      asits                      Collateral Manager |
|    |                                                                                                                                                                              |
|         | By                                                                                                                                                                           |  /s/                    Peter Sakon |
|         | Name:                    Peter Sakon                                                                                                                                         |
|         | Title:                    Vice President                                                                                                                                     |

----

|         |                                               |                                                |
|--------------|----------------------------------------------------|-----------------------------------------------------|
|         | Name                            of Institution:    |
|    | THE FOOTHILL GROUP, INC.                           |
|         | by                                                 |  /s/                          Dennis R. Ascher |
|         | Name:                          Dennis R. Ascher    |
|         | Title:                          Sr. Vice President |

----

|         |                                                                                                                                                                                                                 |                                               |
|--------------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|----------------------------------------------------|
|         | FOREST                                CREEK CLO, Ltd.By: Deerfield                                Capital Management LLC                                asits                                Collateral Manager |
|    |                                                                                                                                                                                                                      |
|         | By                                                                                                                                                                                                                   |  /s/                              Peter Sakon |
|         | Name:                              Peter Sakon                                                                                                                                                                       |
|         | Title:                              Vice President                                                                                                                                                                   |

----

|         |                                                                                                                                                                                                                                          |                                                     |
|--------------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|----------------------------------------------------------|
|         | LONG                                      GROVE CLO, LIMITEDBy: Deerfield                                      Capital Management LLC                                      asits                                      Collateral Manager |
|    |                                                                                                                                                                                                                                               |
|         | By                                                                                                                                                                                                                                            |  /s/                                    Peter Sakon |
|         | Name:                                    Peter Sakon                                                                                                                                                                                          |
|         | Title:                                    Vice President                                                                                                                                                                                      |

----

|         |                                                                                                                                                                                                                                                                  |                                                           |
|--------------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|----------------------------------------------------------------|
|         | MARKET                                            SQUARE CLO, Ltd.By: Deerfield                                            Capital Management LLC                                            asits                                            Collateral Manager |
|    |                                                                                                                                                                                                                                                                       |
|         | By                                                                                                                                                                                                                                                                    |  /s/                                          Peter Sakon |
|         | Name:                                          Peter Sakon                                                                                                                                                                                                            |
|         | Title:                                          Vice President                                                                                                                                                                                                        |

----

|         |                                                                                                                                                                                                                                                                  |                                                           |
|--------------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|----------------------------------------------------------------|
|         | MARQUETTE                                            PARK CLO LTD.By: Deerfield                                            Capital Management LLC                                            asits                                            Collateral Manager |
|    |                                                                                                                                                                                                                                                                       |
|         | By                                                                                                                                                                                                                                                                    |  /s/                                          Peter Sakon |
|         | Name:                                          Peter Sakon                                                                                                                                                                                                            |
|         | Title:                                          Vice President                                                                                                                                                                                                        |

----

|         |                                                                         |                                                                       |
|--------------|------------------------------------------------------------------------------|----------------------------------------------------------------------------|
|         | Name                                                of Institution:          |
|    | Muirfield Trading                                                LLC         |
|         | by                                                                           |  /s/                                              M. Cristina Higgins |
|         | Name:                                              M. Cristina Higgins       |
|         | Title:                                              Assistant Vice President |

----

|         |                                                                                                                                                                                                                                                                                                         |                                                                     |
|--------------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------------------------------------------------------------------------|
|         | ROSEMONT CLO                                                      LTD.By: Deerfield                                                      Capital Management LLC                                                      asits                                                      Collateral Manager |
|    |                                                                                                                                                                                                                                                                                                              |
|         | By                                                                                                                                                                                                                                                                                                           |  /s/                                                    Peter Sakon |
|         | Name:                                                    Peter Sakon                                                                                                                                                                                                                                         |
|         | Title:                                                    Vice President                                                                                                                                                                                                                                     |

----

|         |                                                                                                                                         |                                            |
|--------------|----------------------------------------------------------------------------------------------------------------------------------------------|-------------------------------------------------|
|         | Name                    of Institution:                                                                                                      |
|    | Sankaty                    Advisors, LLC as Collateral Manager for Loan Funding XI LLC,                    as Term                    Lender |
|         | by                                                                                                                                           |  /s/                  James F. Kellogg III |
|         | Name:                  James F. Kellogg III                                                                                                  |
|         | Title:                  Managing Director                                                                                                    |

----

|         |                                                                                           |                                            |
|--------------|------------------------------------------------------------------------------------------------|-------------------------------------------------|
|         | Name                    of Institution:                                                        |
|    | Katonah                    II, Ltd. by Sankaty Advisors                    LLC as Sub-Advisors |
|         | by                                                                                             |  /s/                  James F. Kellogg III |
|         | Name:                  James F. Kellogg III                                                    |
|         | Title:                  Managing Director                                                      |

----

|         |                                                                                                                                                        |                                            |
|--------------|-------------------------------------------------------------------------------------------------------------------------------------------------------------|-------------------------------------------------|
|         | Name                    of Institution:                                                                                                                     |
|    | Sankaty                    Advisors,                    LLC as Collateral Manager for Race Point CLO, Limited, as Term                    Lender  |
|         | by                                                                                                                                                          |  /s/                  James F. Kellogg III |
|         | Name:                  James F. Kellogg III                                                                                                                 |
|         | Title:                  Managing Director                                                                                                                   |

----

|         |                                                                                                                                                            |                                              |
|--------------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------|---------------------------------------------------|
|         | Name                      of Institution:                                                                                                                       |
|    | Sankaty                      Advisors,                      LLC as Collateral Manager for AVERY POINT CLO, LTD., as Term                      Lender  |
|         | by                                                                                                                                                              |  /s/                    James F. Kellogg III |
|         | Name:                    James F. Kellogg III                                                                                                                   |
|         | Title:                    Managing Director                                                                                                                     |

----

|         |                                                                                                                         |                                                |
|--------------|------------------------------------------------------------------------------------------------------------------------------|-----------------------------------------------------|
|         | Name                        of Institution:                                                                                  |
|    | Chatgham Light II CLO, Limited, by Sanakty                        Advisors LLC,                        as Collateral Manager |
|         | by                                                                                                                           |  /s/                      James F. Kellogg III |
|         | Name:                      James F. Kellogg III                                                                              |
|         | Title:                      Managing Director                                                                                |

----

|         |                                                                                                                                                                       |                                                |
|--------------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------|-----------------------------------------------------|
|         | Name                        of Institution:                                                                                                                                |
|    | Sankaty                        Advisors,                        LLC as Collateral Manager for Castle Hill I-INGOTS, Ltd., as Term                        Lender  |
|         | by                                                                                                                                                                         |  /s/                      James F. Kellogg III |
|         | Name:                      James F. Kellogg III                                                                                                                            |
|         | Title:                      Managing Director                                                                                                                              |

----

|         |                                                                                                                                                                       |                                                |
|--------------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------|-----------------------------------------------------|
|         | Name                        of Institution:                                                                                                                                |
|    | Sankaty                        Advisors,                        LLC as Collateral Manager for Race Point II CLO, Limited, as Term                        Lender  |
|         | by                                                                                                                                                                         |  /s/                      James F. Kellogg III |
|         | Name:                      James F. Kellogg III                                                                                                                            |
|         | Title:                      Managing Director                                                                                                                              |

----

|         |                                                                                                                                                                                        |                                                        |
|--------------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|-------------------------------------------------------------|
|         | Name                                of Institution:                                                                                                                                         |
|    | Sankaty                                Advisors,                                LLC as Collateral Manager for Castle Hill III CLO, as Term                                Lender  |
|         | by                                                                                                                                                                                          |  /s/                              James F. Kellogg III |
|         | Name:                              James F. Kellogg III                                                                                                                                     |
|         | Title:                              Managing Director                                                                                                                                       |

----

|         |                                                                                                                                                                                                                               |                                                        |
|--------------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|-------------------------------------------------------------|
|         | Name                                of Institution:                                                                                                                                                                                |
|    | Sankaty                                Advisors,                                LLC as Collateral Manager for Castle Hill II-INGOTS, Ltd.,                                as Term                                Lender  |
|         | by                                                                                                                                                                                                                                 |  /s/                              James F. Kellogg III |
|         | Name:                              James F. Kellogg III                                                                                                                                                                            |
|         | Title:                              Managing Director                                                                                                                                                                              |

----