Document:

Lease Agreement No. 11124       

 

EXHIBIT
10.1

 

EQUIPMENT LEASE/OPTION TO PURCHASE AGREEMENT

 

THIS EQUIPMENT LEASE/OPTION TO PURCHASE
AGREEMENT (the "Lease") is made effective the day of July 17, 2013 ("Effective Date")

 

BETWEEN:

 

Save The World Air, Inc.

(the "Lessor")

- and
-

TransCanada Keystone Pipeline, L.P.

by its agent,

TC Oil Pipeline Operations Inc.

("TransCanada")

(collectively, the "Parties" or individually,
a "Party")

 

RECITALS

 

WHEREAS TransCanada
operates a high pressure oil pipeline and related facilities and the Lessor has developed viscosity reduction technology ("Technology");

 

AND WHEREAS
TransCanada wishes to lease and test the effectiveness of Lessor's Technology and Equipment (as described below);

 

AND WHEREAS
the Lessor is prepared to lease the Equipment to TransCanada on the terms and conditions set forth in this Lease, which includes
an option for TransCanada to purchase the Equipment during or upon termination of the Initial Term or Extended Term, if any (defined
below).

 

NOW, THEREFORE,
in consideration of the covenants set forth below and for other good and valuable consideration, the receipt and sufficiency of
which is acknowledged by the Parties, the Parties agree, as follows:

 

	1.		Equipment Leased.

 

The Lessor hereby leases, non-exclusively,
to TransCanada and TransCanada leases from the Lessor the equipment, along with the equipment attached thereto or contained therein
as described in Schedule A attached to this Lease and made a part hereof (the "Equipment"), together with all
parts, components, accessories, accessions, replacements, substitutions, additions and improvements now or in the future attached
to or forming a part thereof.

 

    	1

    	 

    

 

	2.		Delivery, Installation, Data Collection and Maintenance of the Equipment.

 

	A.		The Lessor, at TransCanada's expense, shall deliver the Equipment to TransCanada by
a date no later than January 13, 2014. This date may be extended by the mutual written consent of the Parties.

 

	B.		The Equipment shall be delivered and installed, at TransCanada's expense, to the location
designated by TransCanada.

 

	C.		Installation shall be performed by TransCanada in a professional and workmanlike manner
in conformance with all recommendations of Lessor, and in compliance with good construction and engineering practices.

 

	D.		The Lessor shall provide TransCanada with instructional service in the installation
and operation of the Equipment.

 

	E.		Any alterations or modifications to the Equipment may be made only upon consultation
with and written approval by the Lessor, which approval shall not be unreasonably withheld.

 

	F.		TransCanada, at its expense, shall keep and maintain
the Equipment in good working order and repair. In the event the Equipment, during the Term hereof, is lost, damaged, destroyed,
in whole or in part, or stolen, TransCanada shall pay to Lessor the replacement cost of the Equipment, and the obligations of
this Lease shall end.

 

	G.		All repairs and maintenance of the Equipment shall be performed promptly by TransCanada.
TransCanada shall supply labor, at TransCanada's cost, and all materials shall be provided by Lessor, at Lessor's cost. Lessor
shall provide TransCanada with a designated person to assist in TransCanada's repairs and maintenance of the Equipment.

 

	H.		Data acquisition will be collaborative and transparent
between Lessor and TransCanada, including, but is not limited to data described in Schedule C. All data collected will be subject
to mutually binding confidentiality and nondisclosure agents. Data cannot be shared or released to any outside entity (other than
Lessor or TransCanada) or third party without the written consent of both Parties.

 

	I.		Parties may, from time to time, make changes or improvements to the Equipment ("Improvements").
Any such Improvements will be the sole intellectual property of Lessor.

 

	3.		Term And Lease Payment.

 

	3.1		The term of this Lease of Equipment shall be for a period of six (6) months (the "Initial
Term"), commencing on the date of installation of the Equipment, estimated to be on a date no later than March 1st, 2014.
On sixty (60) days' written notice prior to the expiration of the Initial Term, TransCanada shall have an option to extend the
Lease for an additional eighty-four (84) months ("Extended Term"), subject to TransCanada's exercise, if at all,
of its option to purchase the Equipment in accordance with Section 12, below.

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	3.2		During the Initial Term and Extended Term, if any, TransCanada shall pay to the Lessor,
a monthly lease fee in U.S. Dollars in the amount of Sixty Thousand Dollars ($60,000) ("Monthly Lease Payment").
In the event the Equipment is removed from service at its initial location and re-installed to a new location during the Initial
Term of the Lease, the Monthly Lease Payment during the Initial Term of the Lease shall be reduced to Twenty Thousand Dollars
($20,000) per month ("Standby Lease Payment") until the Equipment is placed back in service at its new location,
at which time the Monthly Lease Payments shall again be Sixty Thousand Dollars ($60,000). If the Equipment is in service for a
partial month, the Monthly Lease Payment and Standby Lease Payment shall be calculated and paid on a pro rata per day basis.

 

	3.3		TransCanada shall pay each Monthly Lease Payment
to the Lessor on the first day of each month during the Initial Term and Extended Term, if any, of this Lease.

 

	3.4		TransCanada shall pay each Monthly Lease Payment to a bank account designated by the
Lessor.

 

	3.5		TransCanada shall be responsible for payment
of all licensing and registration fees in respect of the Equipment.

 

	4.		Title.

 

The Parties agree that title and ownership to the Equipment shall
remain at all times with the Lessor, unless purchased by TransCanada in accordance with Section 12, below.

 

	5.		Acceptance of Delivery.

 

	5.1		By accepting possession of the Equipment under
this Lease, TransCanada accepts the condition of the Equipment.

 

	5.2		Upon consultation with and approval by Lessor,
the Parties agree that TransCanada is authorized, at its sole expense, to furnish or install on the Equipment new or renewed
replacement parts and to make any additions or improvements which TransCanada deems necessary for the proper maintenance and operation
of the Equipment. All such parts, additions and improvements shall be deemed a part of the Equipment, and subject to Section 4,
above.

 

	6.		Operating Use.

 

TransCanada shall operate the Equipment during the Initial Term
and Extended Term, if any, for the purpose only as set forth in the Recitals, above.

 

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	7.		Limitation of Liability.

 

	7.1		Each Party shall be liable to the other Party,
its agents and employees for all losses or damages arising out of or attributable to the acts or omissions, willful misconduct
or breach of this Lease by such Party.

 

	7.2		TransCanada acknowledges that TransCanada will
obtain the Equipment on an "as is where is basis" without relying on the Lessor. The Lessor makes no warranty
or representation, express or implied, statutory or otherwise, as to the design, quality, capacity or fitness of the Equipment
for any particular purpose.

 

	7.3		TransCanada agrees that no defect or unfitness
of the Equipment shall relieve TransCanada of the obligation to pay the Monthly Lease Payments throughout the Initial Term
and Extended Term, if any, hereof.

 

	7.4		TransCanada acknowledges and agrees that the Lessor shall not be liable or responsible
for any non-compliance with any statute, law, ordinance, rule or regulation relating to the installation, operation, use or maintenance
of the Equipment, it being expressly understood that all such liability shall be the responsibility of TransCanada. Lessor shall
be responsible to confirm the manufacturing of the Equipment is within compliance with all applicable state and federal regulations
and codes.

 

	8.		Indemnity.

 

	8.1		Each Party ("Indemnitor") shall indemnify
and hold harmless the other Party ("Indemnitee"), its affiliates and each of their representatives, directors,
officers, employees and agents from and against all claims, demands, losses, costs (including attorneys' fees), damages, suits
or proceedings by third parties (collectively referred to as "Claims") that arise out of or are attributable to:

 

		(i)	TransCanada's installation, operation and maintenance of the Equipment;

 

		(ii)	any breach of this Lease by the Indemnitor, or its personnel, agents or subcontractors;

 

		(iii)	TransCanada's obligations to pay taxes and fees as a result
of this Lease, and any related penalties imposed by any governmental or other authority having jurisdiction.

 

		(iv)	in the case of Supplier, any claim or suit for alleged infringement of any patent, industrial design,
license, copyright or trademark resulting from or arising in connection with the manufacture, sale, use or other disposition of
the Equipment. If the Equipment or any portion thereof constitutes an infringement, Supplier shall, in addition to its other obligations
under this Agreement, at its own expense and as directed by Company, either procure for Company the right to continue using such
Equipment without liability for such infringement, or modify or replace such Equipment with non-infringing Equipment accomplishing
the same purpose as the replaced Equipment.

 

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	8.2		The Indemnitor will assume on behalf of the Indemnitee, and conduct with due diligence
and in good faith, the defense of any Claims with counsel reasonably satisfactory to the Indemnitee; provided that the Indemnitee
and their insurer shall have the right to be represented therein by advisory counsel of their own selection and at their own expense;
provided further that if the defendants in any such action include both the Indemnitor and the Indemnitee, and if the Indemnitee
will have reasonably concluded that there may be legal defenses available to it which are different from, additional to, or inconsistent
with those available to the Indemnitor, then the Indemnitee and their insurer shall have the right to select separate counsel
to participate in the defense of such Claims on its own behalf and at the Indemnitor's expense. Without the prior consent of the
Indemnitee, the Indemnitor will not enter into any settlement of any Claim which would lead to liability or create any financial
or other obligation on the part of the Indemnitee.

 

	9.		Insurance

 

TransCanada shall bear the risk, responsibility and liability for
the delivery, return, installation, operation and maintenance of the Equipment. TransCanada shall maintain, at its cost, all such
insurance on the Equipment with losses payable to Lessor against fire, theft, destruction, property damage, personal injury, general
liability and other risks as are appropriate and specified by Lessor. TransCanada shall provide Lessor proof of such insurance.

 

	10.		Default.

 

	10.1		TransCanada shall be in default hereunder if TransCanada fails to pay the Monthly
Lease Payment as required hereunder within ten (10) business days of the due date thereof.

 

	10.2		Either Party will be in default under this Lease if the Party defaults in the performance
of an obligation required from the Party under this Lease.

 

	10.3		If either Party defaults in performance of any of its obligations under this Lease,
the other Party shall provide a written notice of the default to the defaulting Party and if the defaulting Party does not remedy
the default within ten (10) business days after the receipt of such notice, the other Party may rely on any legal or equitable
remedy available in law or equity.

 

	11.		Return Condition.

 

	11.1		Subject to TransCanada's option to purchase under Section 12, below, upon the expiration
or termination of this Lease, TransCanada shall return, at TransCanada's expense, such Equipment and any parts, additions or improvements
made thereon or thereto, to the Lessor at Lessor's offices or other place designated by the Lessor. On return to the Lessor, the
Equipment shall be free and clear of oil, operational and in good working order and repair, except for ordinary wear and tear.

 

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	12.		Option to Purchase.

 

	12.1		Provided TransCanada is not in default with respect to any obligations or payments
required to be made under this Lease, the Lessor grants to TransCanada, during the Initial Term and Extended Term, if any, hereof,
an option to purchase the Lessor's interest in the Equipment for the amounts set forth in the attached Schedule B.

 

	12.2		This option may be exercised by TransCanada giving the Lessor written notice (the
"Notice") of its intention to exercise the option. The Notice shall set forth the time for the closing of the sale which
shall be the date which is sixty (60) days after the date of the Notice or in the event there are less than sixty (60) days remaining
in the Initial Term or Extended Term, if any, at the end of such term (the "Closing Date"). On the Closing Date, TransCanada
shall pay the purchase price set forth in Schedule B to the Lessor by way of certified check or money order and the Lessor
shall transfer its interest in the Equipment to TransCanada whereupon this Lease shall cease.

 

	12.3		TransCanada shall pay any and all taxes, license or registration fees, or other fees,
costs, or charges payable in connection with any such sale and purchase of the Equipment. The bill of sale from the Lessor to
TransCanada shall contain warranties on the part of the Lessor that it has done no act nor created any security interest in the
Equipment that would adversely affect the title to it.

 

	13.		Encumbrances, Taxes and Other Laws.

 

TransCanada
shall keep the Equipment free and clear of any liens or other encumbrances, and shall not permit any act where Lessor's title or
rights may be negatively affected. TransCanada shall be responsible for complying with and conforming to all laws, rules, regulations,
ordinances and statutes relating to the possession, use, operation or maintenance of the Equipment. Furthermore, TransCanada shall
promptly pay all taxes, fees, licenses and governmental charges, together with any penalties or interest thereon, relating to the
possession, use, operation or maintenance of the Equipment.

 

	14.		Termination.

 

During the Initial Term, either
Party may terminate this Agreement at any time for any reason on ninety (90) days written notice to the other.

 

	15.		Mutual Representations and Warranties. Each Party agrees, represents and warrants
to the other Party that:

 

		(a)	This Lease constitutes a valid and legally binding obligation of the Party, enforceable against
the Party in accordance with its terms and all applicable laws;

 

		(b)	Neither the entering into or the delivery of this Lease nor the completion of the transactions
contemplated in this Lease by the Party will result in the violation of any agreement or other instrument to which the Party is
a party or by which the Party is bound or in a violation of any laws applicable to the Party;

 

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		(c)	Lessor owns all right, title and interest in and to the Equipment and any parts, additions
and improvements made thereon or thereto.

 

	16.		Address.

 

Any notice or documentation required
under this Lease must be provided either by personal service to the address below, or e-mail to the address below, or delivery
by registered mail to the Party's address below.

 

To TransCanada:

TransCanada Keystone
Pipeline Limited Partnership

450 1 Street S.W.

Calgary, Alberta,
Canada

Attention: Sherry
Richardson

Telephone: 403.920.6113

email:
sherry_richardson@transcanada.com

 

To the Lessor:

Save The World Air,
Inc.

735 State Street,
Suite 500

Santa Barbara, CA
93101

Attention: Gregg
M. Bigger, President and CFO

Telephone: 805.729.1815

email:
gregg.bigger@stwa.com

 

	17.		General Provisions.

 

	17.1		In this Lease, the words importing the singular
will include the plural and vice versa.

 

	17.2		Unless something in the subject matter is inconsistent therewith, all references to
Articles, Sections or Schedules refer to Articles, Sections or Schedules of this Lease.

 

	17.3		A waiver by any Party of the strict performance
of any covenant or provision of this Lease will not of itself constitute a waiver or any subsequent breach of such covenant or
provision or of any other covenant, provision or term of this Lease. A waiver will be effective if it is in writing and signed
by a duly authorized representative of the Party granting the waiver.

 

	17.4		Each Party will from time to time and at all times do all such further acts and execute
and deliver all such further documents and assurances as shall be reasonably required in order to fully perform and carry out
the terms of this Lease.

 

	17.5		Time is of the essence in all respects of this
Lease.

 

	17.6		This Lease may be amended from time to time upon mutual agreement. All amendments
must be in writing and signed by duly authorized representatives of the parties.

 

	17.7		This Lease, including Schedules A, B and C, constitutes
the entire agreement between the Parties with respect to its subject matter. There are no other agreements, representations, warranties,
conditions, terms or understandings, written, verbal, express or implied between the Parties, unless mutually agreed to and confirmed
in writing subsequent to the date of this Lease.

 

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	17.8		In the event, and to the extent, of conflict between any of the terms of this Lease
and Schedule A, Schedule B or Schedule C, the terms of this Lease shall prevail.

 

	17.9		If any one or more provisions of this Lease are found to be invalid, unenforceable
or void by any court or tribunal of competent jurisdiction, the remaining terms and provisions will be deemed to be severable
from the part so found and remain in full force and effect.

 

	17.10		This Lease is subject to and shall be construed in accordance with the laws in force
in the State of New York. The federal or state courts located in New York, New York shall have exclusive jurisdiction over any
disputes arising under this Lease.

 

	17.11		This Lease may be executed in counterparts, each of which will be deemed an original
and all of which will together constitute one and same instrument. Delivery of this Lease may be made by facsimile or other electronic
format attached to email.

 

[Signature
Page Follows]

 

 

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IN WITNESS WHEREOF the parties have executed
this Lease as of the day and year first above written.

 

	TransCanada Keystone Pipeline, L.P.	 	 	Save the World Air, Inc.
	by its agent

    TransCanada Oil Pipeline Operations Ltd.	 	 	 
	 	 	 	 	 
	Per:	/s/ Andy Mather	 	Per:	/s/ Greggory M. Bigger
	Name:	Andy Mather	 	Name:	Greggory M. Bigger
	Title:	Director of Facilities Products	 	Title:	President & CFO

 

 

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Schedule
A

 

The Equipment is generally described as follows:

 

·AOTTM
Midstream, skid mounted ; Quantity = 4

 

·Header
assembly; Multiple 30" 600 series steel spool pieces reducing to 20" 600 series nozzles; Quantity = 2 (intake and outtake)

 

·AOTTM
Power Supplies (1 per AOTTM); LH series 5 kW regulated high-voltage DC power supply; Quantity = 4

 

·Data
acquisition and control (SCADA/PLC); specifications TBD; Quantity = 1

 

·Power
supply and SCADA housing; Class 1 — Division 1 portable structure, specifications TBD; Quantity — 1

 

	DESCRIPTION	MAKE	MANUFACTURER	MODEL	YEAR	Serial #	License #
	 	 	 	 	 	 	 
	 	 	 	 	 	 	 
	 	 	 	 	 	 	 
	 	 	 	 	 	 	 
	 	 	 	 	 	 	 
	 	 	 	 	 	 	 
	 	 	 	 	 	 	 

 

 

 

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Schedule
B

 

Option
to Purchase Leased Equipment

 

TransCanada may, at its option, purchase the Equipment during the
Initial Term of the Lease for a fixed price of Four Million Three Hundred Thousand U.S. Dollars ($4,300,000).

 

If TransCanada extends the Lease, TransCanada may, at its option,
purchase the Equipment during the Extended Term at the greater of $4,300,000 or fair market value.

 

 

 

 

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Schedule
C

 

DATA
COLLABORATION

 

Save The
World Air, Inc.'s AOTTM Midstream operation requires collaborative access to specific data points for the successful implementation
of the Equipment and for testing purposes. Data points are required from pump stations immediately upstream and downstream of the
Equipment installation point, currently described as PS 30 (ROCK) and PS 31 (PONCA CITY), to determine the safe and successful
operation of the devices as installed by TransCanada to the Keystone XL Pipeline. The data points required for collaborative real-time
access and recording from the pump stations' data acquisition SCADA / PLC includes but is not limited to the following:

 

	1.		System
                                                                                                                         time
                                                                                                                         and date

	2.		Pump
                                                                                                                         station
                                                                                                                         status

	3.		Main
                                                                                                                         pipeline
                                                                                                                         temperature
                                                                                                                         directly
                                                                                                                         upstream
                                                                                                                         of pump
                                                                                                                         station

	4.		Main
                                                                                                                         pipeline
                                                                                                                         pressure
                                                                                                                         directly
                                                                                                                         upstream
                                                                                                                         of pump
                                                                                                                         station

	5.		Pump
                                                                                                                         motor
                                                                                                                         variable
                                                                                                                         frequency
                                                                                                                         drive
                                                                                                                         (VFD)

	6.		Pump
                                                                                                                         station
                                                                                                                         pipeline
                                                                                                                         flow
                                                                                                                         rate

	7.		Pump
                                                                                                                         station
                                                                                                                         oil pressure

	8.		Pump
                                                                                                                         station
                                                                                                                         oil temperature

	9.		Main
                                                                                                                         pipeline
                                                                                                                         temperature
                                                                                                                         directly
                                                                                                                         downstream
                                                                                                                         of pump
                                                                                                                         station

	10.		Main
                                                                               pipeline pressure directly downstream of pump station

	11.		Pump
                                                                                                                           station
                                                                                                                           pressure
                                                                                                                           differential

	12.		Discharge
                                                                                                                           pressure
                                                                                                                           reduction

	13.		Flow
                                                                                                                           summary,
                                                                                                                           data
                                                                                                                           and
                                                                                                                           graphs

 

    	12Exhibit 4.12

 

FORM OF SUPPLEMENTAL INDENTURE

 

SUPPLEMENTAL INDENTURE
(this “Supplemental Indenture”) dated as of ____________, 2013, among JAMES RIVER
COAL COMPANY, a
Virginia corporation (the “Company”),
BDCC HOLDING COMPANY,
INC., a Delaware corporation, BELL COUNTY COAL CORPORATION, a Delaware corporation,
BLEDSOE COAL CORPORATION, a Kentucky corporation, BLEDSOE COAL
LEASING COMPANY, a
Delaware corporation, BLUE
DIAMOND COAL COMPANY,
a Delaware corporation,
EOLIA RESOURCES, INC., a
North Carolina corporation,
IRP GP HOLDCO LLC, a Delaware limited liability company, IRP LP HOLDCO INC., a Delaware corporation, JAMES RIVER
COAL SALES, INC., a
Delaware corporation, JAMES RIVER
COAL SERVICE COMPANY,
a Kentucky corporation, JOHNS CREEK COAL COMPANY, a Tennessee corporation, JOHNS CREEK ELKHORN COAL CORPORATION, a Delaware
corporation, JOHNS CREEK PROCESSING COMPANY, a Delaware corporation, LEECO, INC., a Kentucky corporation, MCCOY ELKHORN COAL CORPORATION,
a Kentucky corporation, SHAMROCK COAL COMPANY, INCORPORATED, a Delaware corporation, TRIAD MINING, INC., an Indiana corporation,
TRIAD UNDERGROUND MINING, LLC, an Indiana limited liability company, INTERNATIONAL RESOURCE PARTNERS LP, a Delaware limited partnership,
INTERNATIONAL RESOURCES HOLDINGS I LLC, a Delaware limited liability company, IRP WV CORP., a Delaware corporation, INTERNATIONAL
RESOURCES HOLDINGS II LLC, a Delaware limited liability company, INTERNATIONAL RESOURCES, LLC, a West Virginia limited liability
company, HAMPDEN COAL COMPANY, LLC, a West Virginia limited liability company, ROCKHOUSE CREEK DEVELOPMENT, LLC, a West Virginia
limited liability company, CHAFIN BRANCH COAL COMPANY, LLC, a West Virginia limited liability company,
SNAP CREEK MINING,
LLC, a West
Virginia limited liability
company, LOGAN &
KANAWHA COAL CO.,
LLC, a West
Virginia limited liability company,
IRP KENTUCKY LLC, a Kentucky limited liability
company, LAUREL MOUNTAIN RESOURCES LLC, a Kentucky limited liability
company, BUCK BRANCH
RESOURCES LLC, a Kentucky limited
liability company, JELLICO MINING, LLC, a Kentucky limited liability company,
and JAMES RIVER ESCROW INC.,
a Delaware corporation
(collectively, the “Subsidiary Guarantors”), and U.S. BANK
NATIONAL ASSOCIATION, as trustee
under the indenture referred
to below (the “Trustee”).

 

RECITALS

 

 

WHEREAS,
the Company, the Subsidiary
Guarantors and the Trustee have heretofore executed
an Indenture dated as of May 22,
2013 (the “Indenture”) providing for the issuance of the Company’s 10.00% Convertible Senior Notes due 2018 (the
“Securities”) and for the initial issuance of $123,261,000 aggregate principal amount of Securities, which was effected
pursuant to the Indenture on May 22, 2013 in separate, privately negotiated exchange transactions exempt from registration pursuant
to Section 4(a)(2) of the Securities Act of 1933, as amended (the “Securities Act”), and Regulation D promulgated thereunder
(the “Privately Placed Notes”);

 

WHEREAS, Section 4.09(c)
of the Indenture currently contemplates the Company paying, subject to the terms and conditions of the Indenture, specified additional
interest to Holders of the Securities during the occurrence of certain events of default relating to the filing and effectiveness
of a shelf registration statement registering the resale of the common stock issuable upon conversion of the Securities, which
is referred to in the Indenture as Registration Default Interest;

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WHEREAS, the Company
desires to issue additional Securities under the Indenture, as is contemplated by Section 2.02 of the Indenture, which additional
Securities are not intended to be accorded the benefits of the Registration Default provisions and related Registration Default
Interest provisions of Section 4.09(c) of the Indenture because such additional Securities will be issued pursuant to an effective
registration statement under the Securities Act;

 

WHEREAS, the Company desires
to amend the Indenture to clarify that the Registration Default provisions and related Registration Default Interest provisions
of the Indenture are applicable only with respect to the Privately Placed Notes and are not applicable with respect to additional
Securities that may be issued pursuant to the Indenture;

 

WHEREAS, pursuant to Section
9.01(h) of the Indenture, the Trustee, the Company and the Subsidiary Guarantors are authorized to modify or amend the Indenture
without notice to or consent of any Securityholder to add or modify any provision therein with respect to matters or questions
arising thereunder which the Company may deem necessary or desirable and which does not materially and adversely affect the rights
of any Holder;

 

WHEREAS, the Board of Directors
of the Company has concluded in good faith that the amendments contemplated by this Supplemental Indenture do not materially and
adversely affect the rights of any Holder;

 

WHEREAS, the Trustee, the
Company and the Subsidiary Guarantors are authorized to execute and deliver this Supplemental Indenture;

 

NOW THEREFORE, in consideration
of the foregoing and for other good and valuable consideration, the Company,
the Subsidiary Guarantors
and the Trustee
mutually covenant and
agree as follows:

 

1.Capitalized Terms.
Capitalized terms used in this Supplemental Indenture (including the recitals hereto) without definition shall have the meanings
set forth in the Indenture.

 

2.Amendment to Indenture.
The Indenture is hereby amended as follows:

 

a.Section
1.01 of the Indenture is hereby amended by adding the definition of “Privately Placed Notes” in appropriate alphabetical
order as follows:

 

“Privately Placed Notes”
means the $123,261,000 aggregate principal amount of Securities issued on the Issue Date pursuant to the terms and conditions set
forth herein.

 

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b.Section
1.01 of the Indenture is hereby amended by deleting the definition of “Registration Statement” in its entirety and
replacing with the following:

 

“Registration Statement”
means a shelf registration statement pursuant to Rule 415 under the Securities Act registering the resale of all shares of Common
Stock issued or issuable upon conversion of the Privately Placed Notes.

 

c.Section
2.02 of the Indenture is hereby amended by deleting the first sentence of the fifth paragraph thereof in its entirety and replacing
it with the following:

 

“The Company may, without the
consent of Holders of the Securities, increase the aggregate principal amount of Securities by issuing additional Securities in
the future on the same terms and conditions, except for any difference in (i) the issue date, (ii) the issue price, (iii) the initial
date from which interest begins to accrue, (iv) if applicable, the existence of transfer restrictions pursuant to the Securities
Act, (v) the existence and applicability of the Registration Default and Registration Default Interest provisions set forth in
Section 4.09(c) herein and (vi) any other registration default or registration default interest provisions applicable to such additional
Securities; provided that if such additional Securities have the same CUSIP number as the Securities initially issued hereunder,
such additional Securities must constitute part of the same issue as the Securities initially issued hereunder for U.S. Federal
income tax purposes.”

 

d.Section
4.09(c) of the Indenture is hereby deleted in its entirety and replaced with the following:

 

 

 

 

 

 

 

 

 

 

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(c)If
any of the following events shall occur with respect to the Privately Placed Notes (each a “Registration Default”),
then the Company shall pay Additional Interest to the Holders of the Privately Placed Notes (“Registration Default Interest”)
in respect of such Privately Placed Notes as follows:

 

(i)If
the Registration Statement is not filed within 10 Business Days after the Issue Date, Registration Default Interest shall accrue
on the Privately Placed Notes at a rate of 1.00% per annum on the principal amount of such Privately Placed Notes for the first
20 days from and including such specified date, and increasing to 2.50% per annum thereafter; provided that such Registration Default
Interest shall cease to accrue on the earlier of (a) the date on which the Registration Statement is filed and (b) the first anniversary
of the Issue Date; 

 

(ii)If
the Registration Statement is not declared effective within 180 days after the Issue Date, Registration Default Interest shall
accrue on the Privately Placed Notes at a rate of 2.50% per annum on the principal amount of such Privately Placed Notes (in addition
to any amounts accruing pursuant to clause (i) above, if applicable); provided that such Registration Default Interest shall cease
to accrue on the earlier of (a) the date on which the Registration Statement is declared effective and (b) the first anniversary
of the Issue Date; and

 

(iii)If
the Registration Statement has been declared effective but thereafter ceases to be effective or available for the resale of all
shares of Common Stock issued or issuable upon conversion of the Privately Placed Notes at any time prior to the first anniversary
of the Issue Date and such failure exists for more than 30 consecutive days or more than 60 days (whether or not consecutive) during
the period prior to the first anniversary of the Issue Date, then commencing on the 31st day or 61st day,
as applicable, following the date on which such Registration Statement ceases to be effective, Registration Default Interest shall
accrue on such Privately Placed Notes at a rate of 2.50% per annum of the principal amount of such Privately Placed Notes from
and including such 31st day or 61st day, as applicable; provided that such Registration Default Interest
shall cease to accrue on the earlier of (a) the date on which the Registration Statement is available for the resale of all shares
of Common Stock issued or issuable upon conversion of such Privately Placed Notes and (b) the first anniversary of the Issue Date.
The provisions of this clause (iii) shall apply to successive failures (as described in the immediately preceding sentence) to
maintain effectiveness of the Registration Statement.

 

e.Section
4.09(d) of the Indenture is hereby deleted in its entirety and replaced with the following:

 

(d)Additional
Interest payable in accordance with Sections 4.09(a), 4.09(b), if applicable with respect to the Privately Placed Notes, 4.09(c),
and, if applicable pursuant to the terms of additional Securities issued hereunder, shall be payable in arrears on each Interest
Payment Date for the applicable Securities following accrual in the same manner as regular interest on the applicable Securities
and shall be in addition to, not in lieu of, any Additional Interest that may accrue under Section 6.02(b) as the sole remedy
relating to the Company’s failure to comply with Section 4.03(b).

    	4

    	 

    

 

f.Section
6.02(b) of the Indenture is hereby amended by deleting the third sentence thereof in its entirety and replacing with the following:

 

Additional Interest payable pursuant
to this Section 6.02(b) shall be in addition to, not in lieu of, any Additional Interest payable pursuant to Section 4.09(a),
Section 4.09(b), if applicable in respect of the Privately Placed Notes, Section 4.09(c), and if applicable pursuant to the
terms of additional Securities issued hereunder.

 

g.Exhibit
A of the Indenture is hereby amended by striking the reference in Section 1 thereof to “May 22, 2013” in its entirety
and replacing with “[May 22, 2013]1[______, 2013]2”.

 

h.Exhibit
A of the Indenture is hereby amended by deleting Section 14 thereof in its entirety and replaced with the following:

 

[14. Registration
Rights. The Holders are entitled to the benefits of the Exchange Agreements. In the event of a Registration Default, the Holder
shall be entitled to Additional Interest as specified in Section 4.09(c) until the Registration Default is cured.]1 

 

i.Exhibit
A of the Indenture is hereby amended by inserting the following footnotes on the appropriate page corresponding to the footnote
reference:

 

1. To be used with respect
to the Privately Placed Notes.

2. To be used with respect
to Securities other than the Privately Placed Notes.

 

3.Ratification of
Indenture; Supplemental Indenture Part of Indenture. Except as expressly amended hereby, the Indenture is in all respects ratified
and confirmed and all the terms, conditions and provisions thereof shall remain in full force and effect. This Supplemental Indenture
shall form a part of the Indenture for all purposes, and every Holder of Securities heretofore or hereafter authenticated and delivered
shall be bound hereby.

 

4.Trustee’s
Disclaimer. The Trustee makes no representation or warranty as to the validity or sufficiency of this Supplemental Indenture.

 

5.Governing Law.
THIS SUPPLEMENTAL INDENTURE SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK BUT WITHOUT
GIVING EFFECT TO APPLICABLE PRINCIPLES OF CONFLICTS OF LAW TO THE EXTENT THAT THE APPLICATION OF THE LAWS OF ANOTHER JURISDICTION
WOULD BE REQUIRED THEREBY.

    	5

    	 

    

 

 

6.Counterparts.
This Supplemental Indenture may be executed in two or more counterparts, all of which shall be considered one and the same agreement.

 

7.Effect of Headings.
The Section headings herein are for convenience only and shall not affect the construction thereof.

 

8.Conflict with
the Trust Indenture Act. If any provision of this Supplemental Indenture limits, qualifies or conflicts with any provision
of the Trust Indenture Act of 1939 (the “TIA”) that is required under the TIA to be part of and govern any provision
of this Supplemental Indenture, the provision of the TIA shall control. If any provision of this Supplemental Indenture modifies
or excludes any provision of the TIA that may be so modified or excluded, the provision of the TIA shall be deemed to apply to
the Indenture as so modified or to be excluded by this Supplemental Indenture.

 

 

 

 

[signature page follows]

 

 

 

 

 

 

 

 

 

 

    	6

    	 

    

IN WITNESS WHEREOF, the
parties hereto have caused this Supplemental Indenture to be duly executed as of the date first written above.

 

 

	 	 
	 	The Company:
	 	 
	 	JAMES RIVER COAL COMPANY
	 	 
	 	       by
	 	           ______________________________________
	 	          Name:
	 	          Title:
	 	 
	 	 
	 	The Trustee:
	 	 
	 	U.S. BANK NATIONAL ASSOCIATION
	 	 
	 	       by
	 	          ______________________________________
	 	          Name:
	 	          Title:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

[Signature pages continue]

 

 

[Signature Page to Supplemental Indenture (Corrective
Supplemental Indenture)

    	7

    	 

    

 

	 	
        The Subsidiary Guarantors:

         

        BDCC HOLDING COMPANY, INC.

        BELL COUNTY COAL CORPORATION

        BLEDSOE COAL CORPORATION

        BLEDSOE COAL LEASING COMPANY

        BLUE DIAMOND COAL COMPANY

        EOLIA RESOURCES, INC.

        IRP GP HOLDCO LLC

        IRP LP HOLDCO INC.

        JAMES RIVER COAL SALES, INC.

        JAMES RIVER COAL SERVICE COMPANY

        JAMES RIVER ESCROW INC.

        JELLICO MINING, LLC

        JOHNS CREEK COAL COMPANY

        JOHNS CREEK ELKHORN COAL CORPORATION

        JOHNS CREEK PROCESSING COMPANY

        LEECO, INC.

        MCCOY ELKHORN COAL CORPORATION

        SHAMROCK COAL COMPANY, INCORPORATED

        TRIAD MINING, INC.

        TRIAD UNDERGROUND MINING, LLC

        INTERNATIONAL RESOURCE PARTNERS LP

        INTERNATIONAL RESOURCES HOLDINGS I LLC

        IRP WV CORP.

        INTERNATIONAL RESOURCES HOLDINGS II LLC

        INTERNATIONAL RESOURCES, LLC

        HAMPDEN COAL COMPANY, LLC

        ROCKHOUSE CREEK DEVELOPMENT, LLC

        CHAFIN BRANCH COAL COMPANY, LLC

        SNAP CREEK MINING, LLC

        LOGAN & KANAWHA COAL CO., LLC

        IRP KENTUCKY LLC

        LAUREL MOUNTAIN RESOURCES LLC

        BUCK BRANCH RESOURCES LLC

         

        On behalf of each of the above named entities

         

        by

        ______________________________________

        Name:

        Title:

         

 

 

 

 

[Signature Page to Supplemental Indenture (Corrective
Supplemental Indenture)

 

 

    	8

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