Exhibit 4.2


    
      

    

     

    Exhibit
      4.2


    AMENDMENT
      NO. 1 TO RIGHTS AGREEMENT

    


    


    This
      Amendment No. 1, dated November 3, 2006 (“Amendment No. 1”) to the Rights
      Agreement (the “Rights Agreement”) dated as of May 25, 2004 between James River
      Coal Company, a Virginia corporation (the “Company”), and Computershare Trust
      Company, N.A., as rights agent (the “Rights Agent”), successor to SunTrust Bank,
      is made by and between the Company and the Rights Agent. All capitalized terms
      not otherwise defined herein shall have the meanings ascribed thereto in the
      Rights Agreement.

    


    RECITALS

    


    WHEREAS,
      the Board of Directors of the Company has determined that it is in the best
      interests of the Company and its shareholders to amend the Rights Agreement
      to
      modify the definition therein of Acquiring Person; and

    


    WHEREAS,
      the Company has determined to amend the Rights Agreement in accordance with
      Section 27 of the Rights Agreement and the Rights Agent is directed to join
      in
      this Amendment No. 1 to the Rights Agreement as set forth herein.

    


    AGREEMENT

    


    NOW
      THEREFORE, the parties hereto, intending to be legally bound, hereby agree
      as
      follows:

    


    1.    The
      definition of Acquiring Person in Section 1 of the Rights Agreement is hereby
      amended to delete the definition in its entirety, and to insert in lieu thereof
      the following:

    


    “ACQUIRING
      PERSON” means any Person who or which, together with all Affiliates and
      Associates of such Person, shall be the Beneficial Owner of 20% or more of
      the
      shares of Common Stock then outstanding; PROVIDED, HOWEVER, that, an “ACQUIRING
      PERSON” shall not include the following Persons: (i) any Excluded Person, (ii)
      any Person who is the Beneficial Owner of 20% or more of the shares of Common
      Stock outstanding as of the Effective Date, or (iii) any Person, who alone
      or
      together with its Affiliates or Associates becomes the Beneficial Owner of
      20%
      or more of the shares of Common Stock then outstanding as a result of an
      Approved Acquisition; PROVIDED, FURTHER, that in the event that a Person does
      not become an ACQUIRING PERSON by reason of clause (ii) above, such Person
      nonetheless shall become an ACQUIRING PERSON if such Person thereafter becomes
      the Beneficial Owner of an additional 2% or more of the Common Stock then
      outstanding over and above the shares beneficially owned by such Person as
      of
      the Effective Date, unless the acquisition of such Common Stock is an Approved
      Acquisition. Notwithstanding the foregoing, if the Board of Directors of the
      Company determines in good faith that a Person who would otherwise be an
“ACQUIRING PERSON” as defined pursuant to the foregoing provisions of this
      SECTION 1(A) has become such inadvertently, and such Person divests as
      promptly as practicable a sufficient number of shares of Common Stock so that
      such Person would no longer be an “ACQUIRING PERSON” as defined pursuant to the
      foregoing provisions of this SECTION 1(A), then such Person shall not be deemed
      an Acquiring Person for any purposes of this Agreement. Such sales of shares
      should be effected in a manner satisfactory to the Board of Directors of the
      Company with due regard for the potential adverse impact on the trading markets
      for the Company's Common Stock.

     

     

    
 

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

     

    2.    Except
      as
      amended hereby, the Rights Agreement remains in full force and
      effect.

    


    IN
      WITNESS WHEREOF, the parties hereto have executed this Amendment No. 1 by their
      duly authorized representatives effective the date set forth above.

    


    
      	
              JAMES
                RIVER COAL COMPANY

            	
              COMPUTERSHARE
                TRUST COMPANY, N.A.

               

            
	
              By:
                /s/
                Peter T. Socha   

            	
              By:
                /s/
                Edward Gurgul   

            
	
              Name:
                Peter
                T. Socha   

            	
              Name:
                Edward
                Gurgul   

            
	
              Title:
                Chief
                Executive Officer  

            	
              Title:
                Senior
                Relationship Manager  

            
	 	 
	 	
              Address
                for notice:

            
	 	 
	 	
              730
                Peachtree Street, NE

            
	 	
              Suite
                840

            
	 	
              Atlanta,
                GA 30308

            
	 	
              Attn:
                Sandra Benefield