Unassociated Document


    
      
        
Exhibit
        10.13

    

     

    AMENDMENT
      NO. 3 AND WAIVER 

     

    AMENDMENT
      No. 3 AND WAIVER (this “Amendment and Waiver”) dated as of November 7, 2006, to
      the CREDIT AGREEMENT dated as of May 3l, 2005, as amended by that certain
      Amendment No. 1 and Waiver dated February 22, 2006, as further amended by that
      certain Amendment No. 2 and Waiver dated May 30, 2006 (as may be further
      amended, restated, modified or replaced, the “Credit Agreement”), among JAMES
      RIVER COAL COMPANY (the “Borrower”), the LENDERS from time to time party
      thereto, PNC BANK, NATIONAL ASSOCIATION, as Administrative Agent.

     

    A.
      Pursuant to the Credit Agreement, the Lenders have extended credit to the
      Borrower, and have agreed to extend credit to the Borrower, in each case
      pursuant to the terms and subject to the conditions set forth
      therein.

     

    B.
      The
      Borrower has requested that the Lenders agree to waive and amend certain
      provisions of the Credit Agreement, in each case pursuant to the terms and
      subject to the applicable conditions set forth herein.

     

    C.
      The
      undersigned Lenders are willing, pursuant to the terms and subject to the
      applicable conditions set forth herein, to grant such waivers and approve such
      amendments.

     

    D.
      Capitalized terms used but not defined herein shall have the respective meanings
      assigned to them in the Credit Agreement (as amended hereby).

     

    Accordingly,
      in consideration of the mutual agreements herein contained and other good and
      valuable consideration, the receipt and sufficiency of which are hereby
      acknowledged, and subject to the applicable conditions set forth herein, the
      parties hereto hereby agree as follows:

     

    SECTION
      1. Waivers.
      Subject
      to the applicable conditions set forth herein, the undersigned Lenders hereby
      waive compliance with Sections 6.12 [Fixed Charge Covenant Ratio], Section
      6.13
      [Leverage Ratio] and Section 6.14 [Senior Secured Leverage Ratio] for the period
      from September 30, 2006, to and including December 30, 2006.

     

    SECTION
      2. Amendment
      of the Definition of Applicable Rate.
      The
      defined term “Applicable Rate” contained in Section 1.01 [Defined Terms] of the
      Credit Agreement is amended by adding the following sentence at the end of
      the
      definition thereto: 

     

    “Notwithstanding
      anything herein to the contrary, from October 1, 2006 and thereafter, the
      Applicable Rate with respect to the Loan ABR Spread shall be 2.50% and the
      Applicable Rate with respect to the Loan Eurodollar Spread shall be
      3.50%.”

     

    SECTION
      3. Amendment
      of the Definition of Pro Forma Basis.
      The
      defined term “Pro Forma Basis” contained in Section 1.01 [Defined Terms] of the
      Credit Agreement is amended by replacing the phrase “Sections 6.12, 6.13, 6.14
      and 6.15” with the phrase “Sections 6.12, 6.13, 6.14, 6.15, 6.18 and
      6.19.”

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    SECTION
      4. Amendment
      of Section 1.01[Defined Terms].
      Section
      1.01 [Defined Terms] of the Credit Agreement is amended by inserting the
      following new definition into Section 1.01 in alphabetical order thereto:


     

    ““Liquidity”
means
      the sum of the Borrower’s liquid assets at any time in the form of (a) cash on
      hand, (b) cash equivalents, (c) marketable securities traded on a national
      exchange or on NASDAQ and (d) the difference between the Revolving Commitment
      and the Revolving Exposure.”

     

    SECTION
      5. Amendment
      of Section 2.12(c).
      Section
      2.12(c) is amended by adding the following sentence at the end of the
      paragraph:

     

    “Notwithstanding
      anything contrary contained in the Credit Agreement, the interest rate
      referenced in Section 2.12(c)(i)(a) shall increase to 3.50% for the period
      commencing on October 1, 2006 and thereafter.”

     

    SECTION
      6. Amendment
      of Article VI [Negative Covenants].
      Article
      VI [Negative
      Covenants]of
      the
      Credit Agreement is hereby amended by adding the following Section 6.18 thereto:
      

     

    “SECTION
      6.18. Minimum
      Consolidated EBITDA.
      The
      Borrower shall generate Consolidated EBITDA in an amount greater than or equal
      to $8,000,000 for the fiscal quarter ending September 30, 2006.” 

    


    SECTION
      7. Amendment
      of Article VI [Negative Covenants].
      Article
      VI [Negative
      Covenants]
      of the
      Credit Agreement is hereby amended by adding the following Section 6.19 thereto:
      

     

    “SECTION
      6.19. Minimum
      Liquidity.
      The
      Borrower shall not permit Liquidity to be less than $7,500,000.00 at any time,
      including on a Pro Forma Basis prior to the Borrower making the December 1,
      2006
      interest payment on the Senior Notes.”

     

    SECTION
      8. Representations
      and Warranties.
      The
      Borrower represents and warrants to the Administrative Agent and the Lenders
      that:

     

    (a)
      This
      Amendment and Waiver has been duly authorized, executed and delivered by the
      Borrower and constitutes a legal, valid and binding obligation of the Borrower,
      enforceable in accordance with its terms, subject to applicable bankruptcy,
      insolvency, reorganization, moratorium or other laws affecting creditors’ fights
      generally and subject to general principles of equity, regardless of whether
      considered in a proceeding in equity or at law.

     

    (b)
      None
      of
      the execution, delivery or performance by the Borrower of this Amendment and
      Waiver or the compliance by the Borrower with the terms and provisions hereof
      (i) will contravene any material provision of any applicable law, statute,
      rule
      or regulation, or any order, writ, injunction or decree of any Governmental
      Authority, (ii) will conflict or be inconsistent with, or result in any breach
      of, any of the terms, covenants, conditions or provisions of, or constitute
      a
      default under, or result in the creation or imposition of (or the obligation
      to
      create or impose) any Lien upon any of the property or assets of Borrower or
      any
      of its respective Subsidiaries pursuant to the terms of any indenture, mortgage,
      deed of trust, loan agreement, credit agreement or any other material agreement
      or instrument to which Borrower or any of its respective Subsidiaries is a
      party
      or by which Borrower or any of its respective Subsidiaries or any of the
      property or assets of Borrower or any of its respective Subsidiaries are bound
      or to which Borrower or any of its respective Subsidiaries may be subject or
      (iii) will violate any provision of the certificate or articles of
      incorporation, by-laws, certificate of partnership, partnership agreement,
      certificate of limited liability company, limited liability company agreement
      or
      equivalent organizational document, as the case may be, of Borrower or any
      of
      its respective Subsidiaries.

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    (c)
      The
      representations and warranties of Borrower set forth in the Loan Documents
      are
      true and correct on and as of the date hereof, except to the extent such
      representations and warranties expressly relate to an earlier date, in which
      case such representations and warranties are true and correct as of such earlier
      date.

     

    (d)
      After
      giving effect to this Amendment and Waiver, no Default or Event of Default
      shall
      have occurred and be continuing.

     

    SECTION
      9. Amendment
      Fee.
      In
      consideration of the agreements of the Lenders contained in this Amendment
      and
      Waiver, the Borrower agrees to pay to the Administrative Agent, for the account
      of each consenting Lender that delivers an executed counterpart of this
      Amendment and Waiver to the Administrative Agent prior to 5:00 p.m., New York
      City time, on November 10, 2006, an amendment fee in an amount equal to 0.15%
      of
      such Lender’s Revolving Exposures, Synthetic LC Exposure, unused Revolving
      Commitments and Excess Credit-Linked Deposits as of such date.

     

    SECTION
      10. Conditions
      to Effectiveness.
      This
      Amendment and Waiver shall become effective as of the date (the “Effective
      Date”) on which each of the following conditions has been
      satisfied:

     

    (a)
      the
      Administrative Agent shall have received counterparts of this Amendment and
      Waiver that, when taken together, bear the signatures of the Borrower and the
      Required Lenders;

     

    (b)
      the
      Administrative Agent shall have received a certificate of a Financial Officer
      of
      the Borrower, dated the Effective Date, to the effect that the representations
      and warranties set forth in Section 8 hereof are true and correct;

     

    (c)
      the
      Borrower shall have paid to the Administrative Agent, in immediately available
      funds, for the account of each of the Lenders entitled thereto, the Amendment
      Fee referred to in Section 9 hereof; and

     

    (d)
      to
      the
      extent invoiced, the Administrative Agent shall have received payment or
      reimbursement of its reasonable out-of-pocket expenses in connection with this
      Amendment and Waiver and any other out-of-pocket expenses of the Administrative
      Agent required to be paid or reimbursed pursuant to the Credit Agreement,
      including the reasonable fees, charges and disbursements of counsel for the
      Administrative Agent.

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    SECTION
      11. Effect
      of Amendment and Waiver.
      Except
      as specifically set forth herein, this Amendment and Waiver shall not by
      implication or otherwise limit, impair, constitute a waiver of, or otherwise
      affect the rights and remedies of the Lenders, any Agent, the Collateral Agent,
      the Borrower under the Credit Agreement or any other Loan Document, and shall
      not alter, modify, amend or in any way affect any of the terms, conditions,
      obligations, covenants or agreements contained in the Credit Agreement or any
      other Loan Document, all of which are ratified and affirmed in all respects
      and
      shall continue in full force and effect. Nothing herein shall be deemed to
      entitle the Borrower to a consent to, or a waiver, amendment, modification
      or
      other change of, any of the terms, conditions, obligations, covenants or
      agreements contained in the Credit Agreement or any other Loan Document in
      similar or different circumstances. After the date hereof, any reference to
      the
      Credit Agreement shall mean the Credit Agreement as amended and waived hereby.
      This Amendment and Waiver shall be a Loan Document for all
      purposes.

     

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

     

    SECTION
      13. Counterparts.
      This
      Amendment and Waiver may be executed in two or more counterparts, each of which
      shall constitute an original but all of which when taken together shall
      constitute but one agreement. Delivery of an executed signature page to this
      Amendment and Waiver by facsimile or other electronic transmission shall be
      effective as delivery of a manually signed counterpart of this Amendment and
      Waiver.

     

    SECTION
      14. Expenses.
      The
      Borrower agrees to reimburse the Administrative Agent for its out-of-pocket
      expenses in connection with this Amendment and Waiver, including the reasonable
      fees, charges and disbursements of Buchanan Ingersoll & Rooney PC, counsel
      for the Administrative Agent.

     

    SECTION
      15. Headings.
      The
      Section headings used herein are for convenience of reference only, are not
      part
      of this Amendment and Waiver and are not to affect the construction of, or
      to be
      taken into consideration in interpreting, this Amendment and
      Waiver.

     

    [REMAINDER
      OF THIS PAGE LEFT BLANK INTENTIONALLY]

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    [SIGNATURE
      PAGE TO AMENDMENT NO. 3 TO CREDIT AGREEMENT]

     

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

    

      
        	 	 	 	
                JAMES
                  RIVER COAL COMPANY, as Borrower

              
	 	 	 	 	
                By: 

              	
                 

                /s/
                  Samuel M. Hopkins, II

              
	 	 	 	 	
                Name: 

              	
                Samuel
                  M. Hopkins, II

              
	 	 	 	 	
                Title: 

              	
                Vice
                  President

              


      

    

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    [SIGNATURE
      PAGE TO AMENDMENT NO. 3 TO CREDIT AGREEMENT]

    

      
        	 	 	 	
                PNC
                  BANK, NATIONAL ASSOCIATION,

                 as
                  Lender and as Administrative
                  Agent

              
	 	 	 	 	
                By: 

              	
                 

                /s/
                  Holly Kay

              
	 	 	 	 	
                Name: 

              	
                Holly
                  Kay

              
	 	 	 	 	
                Title: 

              	 


      

    

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    
      [SIGNATURE
        PAGE TO AMENDMENT NO. 3 TO CREDIT AGREEMENT]

       

      To
        Approve the Amendment and Waiver:

       

      
        	 	 	 	
                Name
                  of Institution:

              
	 	 	 	 
	 	 	 	
                BEAR
                  STEARNS CORPORATE LENDING INC.

              
	 	 	 	 	
                By: 

              	
                 

                /s/ Richard
                  Bram Smith

              
	 	 	 	 	
                Name: 

              	
                Richard
                  Bram Smith

              
	 	 	 	 	
                Title: 

              	
                Vice
                  President

              


      

       

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

    

     

    
      [SIGNATURE
        PAGE TO AMENDMENT NO. 3 TO CREDIT AGREEMENT]

       

      To
        Approve the Amendment and Waiver:

       

      
        	 	 	 	
                Name
                  of Institution:

              
	 	 	 	 
	 	 	 	
                Gleneagles
                  CLO, Ltd.

              
	 	 	 	 
	 	 	 	
                By:

              	
                Highland
                  Capital Management, L.P. as

                Collateral
                  Manager

              
	 	 	 	 	 	
                By: 

              	
                 

                Strand
                  Advisors, Inc. Its General Partner

              
	 	 	 	 	 	
                By: 

              	
                 

                /s/
                  David W. Lancelot

              
	 	 	 	 	 	
                Name: 

              	
                David
                  W. Lancelot

              
	 	 	 	 	 	
                Title: 

              	
                Treasurer,
                  Strand Advisors, Inc., 

                General
                  Partner of Highland Capital Management,
                  L.P.

              


      

    

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    [SIGNATURE
      PAGE TO AMENDMENT NO. 3 TO CREDIT AGREEMENT]

     

    To
      Approve the Amendment and Waiver:

     

    
      	 	 	 	
              Name
                of Institution:

            
	 	 	 	 
	 	 	 	
              Highland
                Credit Strategies Fund

            
	 	 	 	 	
              By: 

            	
               

               

            
	 	 	 	 	
              Name: 

            	 
	 	 	 	 	
              Title: 

            	 


    

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    


    [SIGNATURE
      PAGE TO AMENDMENT NO. 3 TO CREDIT AGREEMENT]

     

    To
      Approve the Amendment and Waiver:

     

    
      	 	 	 	
              Name
                of Institution:

            
	 	 	 	 
	 	 	 	
              Highland
                Floating Rate Advantage Fund

            
	 	 	 	 	
              By: 

            	
               

              /s/ M.
                Jason Blackburn

            
	 	 	 	 	
              Name: 

            	
              M.
                Jason Blackburn

            
	 	 	 	 	
              Title: 

            	
              Treasurer

            


    

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    
      [SIGNATURE
        PAGE TO AMENDMENT NO. 3 TO CREDIT AGREEMENT]

       

      To
        Approve the Amendment and Waiver:

      


      
        	 	 	 	
                Name
                  of Institution:

              
	 	 	 	 
	 	 	 	
                Highland
                  Floating Rate LLC

              
	 	 	 	 	
                By: 

              	
                 

                 

              
	 	 	 	 	
                Name: 

              	 
	 	 	 	 	
                Title: 

              	 


      

    

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    


    [SIGNATURE
      PAGE TO AMENDMENT NO. 3 TO CREDIT AGREEMENT]

     

    To
      Approve the Amendment and Waiver:

    


    
      	 	 	 	
              Name
                of Institution:

            
	 	 	 	 
	 	 	 	
              Highland
                Offshore Partners, L.P.

            
	 	 	 	 
	 	 	 	
              By:

            	
              Highland
                Capital Management, L.P. as

              Collateral
                Manager

            
	 	 	 	 	 	
              By: 

            	
               

              Strand
                Advisors, Inc. Its General Partner

            
	 	 	 	 	 	
              By: 

            	
               

              /s/
                David W. Lancelot

            
	 	 	 	 	 	
              Name: 

            	
              David
                W. Lancelot

            
	 	 	 	 	 	
              Title: 

            	
              Treasurer,
                Strand Advisors, Inc., 

              General
                Partner of Highland Capital Management,
                L.P.

            


    


    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    [SIGNATURE
      PAGE TO AMENDMENT NO. 3 TO CREDIT AGREEMENT]

     

    To
      Approve the Amendment and Waiver:

     

    
      	 	 	 	
              Name
                of Institution:

            
	 	 	 	 
	 	 	 	
              Jasper
                CLO, Ltd.

            
	 	 	 	 	
              By: 

            	
               

              /s/
                David W. Lancelot

            
	 	 	 	 	
              Name: 

            	
              David
                W. Lancelot

            
	 	 	 	 	
              Title: 

            	
              Treasurer,
                Strand Advisors, Inc., 

              General
                Partner of Highland Capital Management,
                L.P.

            


    

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    [SIGNATURE
      PAGE TO AMENDMENT NO. 3 TO CREDIT AGREEMENT]

     

    To
      Approve the Amendment and Waiver:

     

    
      	 	 	 	
              Name
                of Institution:

            
	 	 	 	 
	 	 	 	
              Liberty
                CLO, Ltd.

            
	 	 	 	 
	 	 	 	
              By:

            	
              Highland
                Capital Management, L.P. as

              Collateral
                Manager

            
	 	 	 	 	 	
              By: 

            	
               

              Strand
                Advisors, Inc. Its General Partner

            
	 	 	 	 	 	
              By: 

            	
               

              /s/
                David W. Lancelot

            
	 	 	 	 	 	
              Name: 

            	
              David
                W. Lancelot

            
	 	 	 	 	 	
              Title: 

            	
              Treasurer,
                Strand Advisors, Inc., 

              General
                Partner of Highland Capital Management,
                L.P.

            


    


    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    [SIGNATURE
      PAGE TO AMENDMENT NO. 3 TO CREDIT AGREEMENT]

     

    To
      Approve the Amendment and Waiver:

     

    
      	 	 	 	
              Name
                of Institution:

            
	 	 	 	 
	 	 	 	
              Liberty
                Mutual Fire Insurance Company

            
	 	 	 	 
	 	 	 	
              By:

            	
              Highland
                Capital Management, L.P. its

              Investment
                Advisor

            
	 	 	 	 	 	
              By: 

            	
               

              Strand
                Advisors, Inc. Its General Partner

            
	 	 	 	 	 	
              By: 

            	
               

              /s/
                David W. Lancelot

            
	 	 	 	 	 	
              Name: 

            	
              David
                W. Lancelot

            
	 	 	 	 	 	
              Title: 

            	
              Treasurer,
                Strand Advisors, Inc., 

              General
                Partner of Highland Capital Management,
                L.P.

            


    


    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    [SIGNATURE
      PAGE TO AMENDMENT NO. 3 TO CREDIT AGREEMENT]

     

    To
      Approve the Amendment and Waiver:

     

    
      	 	 	 	
              Name
                of Institution:

            
	 	 	 	 
	 	 	 	
              Liberty
                Mutual Insurance Company

            
	 	 	 	 
	 	 	 	
              By:

            	
              Highland
                Capital Management, L.P. its

              Investment
                Advisor

            
	 	 	 	 	 	
              By: 

            	
               

              Strand
                Advisors, Inc. Its General Partner

            
	 	 	 	 	 	
              By: 

            	
               

              /s/
                David W. Lancelot

            
	 	 	 	 	 	
              Name: 

            	
              David
                W. Lancelot

            
	 	 	 	 	 	
              Title: 

            	
              Treasurer,
                Strand Advisors, Inc., 

              General
                Partner of Highland Capital Management,
                L.P.

            


    


    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    [SIGNATURE
      PAGE TO AMENDMENT NO. 3 TO CREDIT AGREEMENT]

     

    To
      Approve the Amendment and Waiver:

     

    
      	 	 	 	
              Name
                of Institution:

            
	 	 	 	 
	 	 	 	
              Loan
                Funding IV LLC

            
	 	 	 	 
	 	 	 	
              By:

            	
              Highland
                Capital Management, L.P. its

              Investment
                Advisor

            
	 	 	 	 	 	
              By: 

            	
               

              Strand
                Advisors, Inc. Its General Partner

            
	 	 	 	 	 	
              By: 

            	
               

              /s/
                David W. Lancelot

            
	 	 	 	 	 	
              Name: 

            	
              David
                W. Lancelot

            
	 	 	 	 	 	
              Title: 

            	
              Treasurer,
                Strand Advisors, Inc., 

              General
                Partner of Highland Capital Management,
                L.P.

            


    


    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    [SIGNATURE
      PAGE TO AMENDMENT NO. 3 TO CREDIT AGREEMENT]

     

    To
      Approve the Amendment and Waiver:

     

    
      	 	 	 	
              Name
                of Institution:

            
	 	 	 	 
	 	 	 	
              Loan
                Funding VII LLC

            
	 	 	 	 
	 	 	 	
              By:

            	
              Highland
                Capital Management, L.P. its

              Investment
                Advisor

            
	 	 	 	 	 	
              By: 

            	
               

              Strand
                Advisors, Inc. Its General Partner

            
	 	 	 	 	 	
              By: 

            	
               

              /s/
                David W. Lancelot

            
	 	 	 	 	 	
              Name: 

            	
              David
                W. Lancelot

            
	 	 	 	 	 	
              Title: 

            	
              Treasurer,
                Strand Advisors, Inc., 

              General
                Partner of Highland Capital Management,
                L.P.

            


    


    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    [SIGNATURE
      PAGE TO AMENDMENT NO. 3 TO CREDIT AGREEMENT]

     

    To
      Approve the Amendment and Waiver:

     

    
      	 	 	 	
              Name
                of Institution:

            
	 	 	 	 
	 	 	 	
              Restoration
                Funding CLO, LTD

            
	 	 	 	 
	 	 	 	
              By:

            	
              Highland
                Capital Management, L.P., as

              
                Collateral
                  Manager

              

            
	 	 	 	 	 	
              By: 

            	
               

              Strand
                Advisors, Inc. Its General Partner

            
	 	 	 	 	 	
              By: 

            	
               

              /s/
                David W. Lancelot

            
	 	 	 	 	 	
              Name: 

            	
              David
                W. Lancelot

            
	 	 	 	 	 	
              Title: 

            	
              Treasurer,
                Strand Advisors, Inc., 

              General
                Partner of Highland Capital Management,
                L.P.