jrcc_10q-ex1022.htm


     

    Exhibit 10.22

    
 

    General
Electric Capital Corporation

    401
Merritt Seven, First Floor

    Norwalk,
Connecticut  06851

    


    July 8,
2008

    


    


    James
River Coal Company

    901 E.
Byrd Street, Suite 1600

    Richmond,
Virginia  23219

    Attention:
Samuel M. Hopkins II

    


    Re:
Consent

    


    Ladies
and Gentlemen:

    


    Reference is hereby made to that
certain Revolving Credit Agreement, dated as of February 26, 2007 (as it may be
amended, restated, modified, supplemented or extended from time to time,
including all exhibits and schedules thereto, or otherwise modified, the “Credit Agreement”), 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 title and signature pages thereof, 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 thereto from time to time, as Guarantors (together, the
Borrowers and Guarantors, the “Credit Parties”), the
lenders party hereto from time to time (the “Lenders”), GENERAL
ELECTRIC CAPITAL CORPORATION (“GECC”), a corporation
formed under the laws of Delaware, as co-lead arranger and as administrative
agent for the Lenders (in such capacity, together with its successors and
assigns, if any, the “Administrative
Agent”) and as collateral agent for the Lenders (in such capacity, the
“Collateral
Agent”),with MORGAN STANLEY SENIOR FUNDING, INC., having acted as co-lead
arranger for the Lenders with GECC.  Capitalized terms used herein
without definition shall have the meanings assigned to such terms in the Credit
Agreement.

    


    The Borrowers have requested that the
Administrative Agent and the undersigned Lenders consent to (a) JRCC’s issuance
and/or sale of shares of JRCC common stock (the “Cheyenne Equity
Issuance”), as part of the purchase price under that certain Asset
Purchase Agreement, dated as of the date thereof, by and among JRCC, Leeco,
Inc., a Kentucky corporation, as buyer, Cheyenne Resources, Inc., a Kentucky
corporation, as seller, and the stockholders signatory thereto (the “Cheyenne Asset Purchase
Agreement”) relating to the acquisition of certain assets pursuant to the
Cheyenne Asset Purchase Agreement (the “Cheyenne
Acquisition”); (b) JRCC’s issuance and/or sale of shares of JRCC common
stock (each an “Equity
Issuance”) in an aggregate amount not to exceed $150,000,000 for all such
Equity Issuances after the date hereof, under the Shelf Registration and any
amendment, increase and/or replacement to such Shelf Registration; and (c) the prepayment
of certain Term Loan Obligations under the Term Credit Agreement and/or Senior
Notes with the Net Offering Proceeds of any such Equity Issuance (other than the
Cheyenne Equity Issuance).  Section 9.05 of the Credit Agreement
prohibits the Borrowers from (1) issuing equity in connection with the
acquisition contemplated under the Cheyenne Asset Purchase Agreement, and (2)
conducting Equity Issuances for purposes of prepaying Term Loan Obligations
under the Term Credit Agreement or Senior Notes without the consent of the
Administrative Agent and the Required Lenders.  Section 9.02 of the
Credit Agreement prohibits the Borrowers from prepaying any (x) Term Loan
Obligations unless on a pro forma basis after giving effect to such prepayment
the Credit Parties shall have Availability in excess of twenty million Dollars
($20,000,000) and (y) principal of the Senior Notes (except pursuant to a
Permitted Refinancing), in each case, without the consent of the Administrative
Agent and the Required Lenders.

    



    
      
         


      

      
        1

        
          

        

      

      
         


      

    


    Notwithstanding the restrictions
contained in Sections 9.02 and 9.05 of the Credit Agreement, the Administrative
Agent and the undersigned Lenders hereby consent to the Cheyenne Equity Issuance
and Equity Issuances under the Shelf Registration; provided that at
least fifty percent (50%) of the Net Offering Proceeds of any Equity Issuance
(other than the Cheyenne Equity Issuance) shall be, upon receipt, segregated
into a Cash Management Account and offered as a prepayment to the Term Lenders
(the “Equity
Repayment”).  In the event any Term Lender does not accept its
pro rata share of such Equity Prepayment, such Term Lender’s pro rata share of
the Equity Repayment may be retained by JRCC, or used by the Borrowers for any
corporate purpose (including, without limitation, to prepay the Senior
Notes).  Notwithstanding the foregoing, no prepayment of Indebtedness,
other than the Obligations and the Term Loan Obligations, shall be permitted if,
after giving effect to such prepayment on a pro forma basis, any Default or
Event of Default shall have occurred.

    


    The Administrative Agent and the
Lenders hereby agree that the Cheyenne Acquisition shall not be deemed to
constitute a Capital Expenditure under the Credit Agreement solely for the
purpose of calculating compliance under Section 10.03 of the Credit
Agreement.

    


    The Borrowers and Guarantors hereby
represent that the Cheyenne Equity Issuance, the Cheyenne Acquisition, any
Equity Issuance under the Shelf Registration and any other transaction
contemplated thereby (including the financing thereof) do not and will not
contravene any Material Contract, any Coal Supply Agreement or Mining Permit, or
any other agreement between the Borrowers or Guarantors and any third party, and
will not require any waiver, consent, approval or authorization under any
Material Contract that has not been obtained.

    


    The Borrowers and Guarantors hereby
agree to promptly take any action and execute and deliver any such documents as
may be required under Sections 8.07 and 8.08 of the Credit Agreement to obtain
and perfect the Collateral Agent’s first-priority Liens (subject to the
Intercreditor Agreement) on the assets acquired pursuant to the Cheyenne Asset
Purchase Agreement.

    


    The effectiveness of this consent
letter is subject to the following conditions: (i) that it shall be executed and
delivered by the Administrative Agent, the Required Lenders, the Borrowers and
the Guarantors; and (ii) that the Administrative Agent shall have received a
copy of a consent letter, in form and substance satisfactory to the
Administrative Agent, duly executed by the Term Loan Agent, the Required Lenders
(as defined in the Term Credit Agreement), the Borrowers and the
Guarantors.

    



    
      
         


      

      
        2

        
          

        

      

      
         


      

    


    None of the Administrative Agent or the
Lenders shall have any obligation to issue any further consent, waiver or
release with respect to the subject matter of this consent letter or any other
matter.  Except as specifically provided above, nothing contained in
this consent letter shall be deemed to be a waiver of, or shall in any way
impair or prejudice, any rights of the Agent or the Lenders under the Credit
Agreement or any other Loan Document.

    


    This consent letter may be executed in
any number of counterparts, each of which when so executed shall be deemed to be
an original and all of which taken together shall constitute one and the same
instrument.

    


    THIS CONSENT LETTER SHALL FOR ALL
PURPOSES BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE
OF NEW YORK.

    


    [remainder
of page intentionally left blank]

    



    
      
         


      

      
        3

        
          

        

      

      
         


      

    


    Kindly acknowledge your agreement with
the terms of this consent letter by signing where indicated below and returning
it to the Administrative Agent.

    


    
      	
              LENDER, ADMINISTRATIVE AGENT AND COLLATERAL
      AGENT:

            
	 
	
              GENERAL
      ELECTRIC CAPITAL CORPORATION

            
	 
	 
	
              By:
      /s/ James
      DeSantis                               
      

            
	
              Name: 
      James DeSantis

            
	
              Title:
      Duly Authorized Signatory

            


    

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

    
 

    
      
         


      

      
        4

        
          

        

      

      
         


      

    


    


    
      	
              BORROWERS:

            
	 
	
              JAMES
      RIVER COAL COMPANY

            
	 
	 
	
              By:   /s/ Samuel M. Hopkins
      II                          
      

            
	
              Name: 
      Samuel M. Hopkins II

            
	
              Title: 
      V.P.

            
	 
	 
	
              JAMES
      RIVER COAL SERVICE COMPANY

            
	 
	 
	
              By:   /s/ Samuel M. Hopkins
      II                          
      

            
	
              Name: 
      Samuel M. Hopkins II

            
	
              Title: 
      V.P.

            
	 
	 
	
              LEECO,
      INC.

            
	 
	 
	
              By:   /s/ Samuel M. Hopkins
      II                          
      

            
	
              Name: 
      Samuel M. Hopkins II

            
	
              Title: 
      V.P.

            
	 
	 
	
              TRIAD
      MINING, INC.

            
	 
	 
	
              By:   /s/ Samuel M. Hopkins
      II                          
      

            
	
              Name: 
      Samuel M. Hopkins II

            
	
              Title: 
      V.P.

            


    


    
      
         


      

      
        5

        
          

        

      

      
         


      

    


    


    
      	
              TRIAD
      UNDERGROUND MINING, LLC

            
	 
	 
	
              By:   /s/ Samuel M. Hopkins
      II                          
      

            
	
              Name: 
      Samuel M. Hopkins II

            
	
              Title: 
      Member

            
	 
	 
	
              BLEDSOE
      COAL CORPORATION

            
	 
	 
	
              By:   /s/ Samuel M. Hopkins
      II                          
      

            
	
              Name: 
      Samuel M. Hopkins II

            
	
              Title: 
      V.P.

            
	 
	 
	
              JOHNS
      CREEK ELKHORN COAL CORPORATION

            
	 
	 
	
              By:   /s/ Samuel M. Hopkins
      II                          
      

            
	
              Name: 
      Samuel M. Hopkins II

            
	
              Title: 
      V.P.

            
	 
	 
	
              JAMES
      RIVER COAL SALES, INC.

            
	 
	 
	
              By:   /s/ Samuel M. Hopkins
      II                          
      

            
	
              Name: 
      Samuel M. Hopkins II

            
	
              Title: 
      V.P.

            
	 
	 
	
              BLEDSOE
      COAL LEASING COMPANY

            
	 
	 
	
              By:   /s/ Samuel M. Hopkins
      II                          
      

            
	
              Name: 
      Samuel M. Hopkins II

            
	
              Title: 
      V.P.

            


    

    



    
      
         


      

      
        6

        
          

        

      

      
         


      

    


    


    
      	
              BLUE
      DIAMOND COAL COMPANY

            
	 
	 
	
              By:   /s/ Samuel M. Hopkins
      II                          
      

            
	
              Name: 
      Samuel M. Hopkins II

            
	
              Title: 
      V.P.

            
	 
	 
	
              MCCOY
      ELKHORN COAL CORPORATION

            
	 
	 
	
              By:   /s/ Samuel M. Hopkins
      II                          
      

            
	
              Name: 
      Samuel M. Hopkins II

            
	
              Title: 
      V.P.

            
	 
	 
	
              GUARANTORS:

            
	 
	 
	
              BDCC
      HOLDING COMPANY, INC.

            
	 
	 
	
              By:   /s/ Samuel M. Hopkins
      II                          
      

            
	
              Name: 
      Samuel M. Hopkins II

            
	
              Title: 
      V.P.

            
	 
	 
	
              EOLIA
      RESOURCES, INC.

            
	 
	 
	
              By:   /s/ Samuel M. Hopkins
      II                          
      

            
	
              Name: 
      Samuel M. Hopkins II

            
	
              Title: 
      V.P.

            
	 
	 
	
              SHAMROCK
      COAL COMPANY, INCORPORATED

            
	 
	 
	
              By:   /s/ Samuel M. Hopkins
      II                          
      

            
	
              Name: 
      Samuel M. Hopkins II

            
	
              Title: 
      V.P.

            


    


    
      
         


      

      
        7

        
          

        

      

      
         


      

    


    


    
       

      	
              JOHNS
      CREEK COAL COMPANY

            
	 
	 
	
              By:   /s/ Samuel M. Hopkins
      II                          
      

            
	
              Name: 
      Samuel M. Hopkins II

            
	
              Title: 
      V.P.

            
	 
	 
	
              JOHNS
      CREEK PROCESSING COMPANY

            
	 
	 
	
              By:   /s/ Samuel M. Hopkins
      II                          
      

            
	
              Name: 
      Samuel M. Hopkins II

            
	
              Title: 
      V.P.

            


    

    


    


     

     

     

     

     

     

     

     

     

     

     

     

     

    8