8-K

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549

FORM 8-K

CURRENT REPORT
Pursuant to Section 13 or 15(d) of the
Securities Exchange Act 1934

Date of report (Date of earliest event reported):   November 20, 2008

WESTMORELAND COAL COMPANY
(Exact Name of Registrant as Specified in Charter)

Delaware	001-11155	23-1128670
(State or Other Jurisdiction of Incorporation)	(Commission File Number)	(IRS Employer Identification No.)

2nd Floor, 2 North Cascade Avenue, Colorado Springs, CO   80903
(Address of Principal Executive Offices)   (Zip Code)

Registrant's telephone number, including area code: (719) 442-2600

No Change
(Former Name or Former Address, if Changed Since Last Report)

               Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the obligation of the registrant under any of the following provisions:

             Written communication pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

             Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

             Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

             Pre-commencement communication pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

ITEM 1.01      ENTRY INTO A MATERIAL DEFINITIVE AGREEMENT

                On November 20, 2008, Westmoreland Resources, Inc. (“WRI”), a wholly-owned subsidiary of Westmoreland Coal Company (“Westmoreland”), entered into a second amendment (the “Amendment”) to the Business Loan Agreement dated October 29, 2007, as amended (the “Loan Agreement”), and a Change in Terms Agreement, with First Interstate Bank, Billings, Montana (“FIB”). Westmoreland Coal Company is guarantor of WRI’s obligations under the Loan Agreement and has pledged 100% of WRI’s common stock to FIB as collateral to secure such guaranty. The Loan Agreement provided WRI, as borrower, a $8,500,000 term loan and a $20,000,000 revolving line of credit. The revolving line of credit originally matured on October 28, 2008. On October 28, 2008, WRI entered into a 30-day extension of the revolving line of credit, and borrowings during this extension period were limited to $10,000,000.

                Pursuant to the Amendment and the Changes in Terms Agreement, the revolving line of credit has been extended to November 19, 2009 and the amount of borrowings available under the revolving line of credit is restored to the original amount of $20,000,000. The interest rate will be the prime rate, subject to a floor of 6% per annum and a ceiling of 8% per annum.

                A copy of the Amendment and Change in Terms Agreement are attached hereto as Exhibit 10.1 and 10.2 and are incorporated by reference herein. The foregoing description of the Amendment and Change in Terms Agreement do not purport to be complete and are qualified in their entirety by Exhibit 10.1 and Exhibit 10.2.

ITEM 9.01      FINANCIAL STATEMENTS AND EXHIBITS

(d) Exhibits

Exhibit 10.1 Amendment No. 2 to Business Loan Agreement dated November 20, 2008 between Westmoreland Resources, Inc., Westmoreland Coal Company and First Interstate Bank.

Exhibit 10.2 Change in Terms Agreement dated November 20, 2008 between Westmoreland Resources, Inc. and First Interstate Bank.

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SIGNATURE

                Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

Date: November 24, 2008

WESTMORELAND COAL COMPANY

By:	/s/ Morris W. Kegley
Name: Morris W. Kegley Title: General Counsel

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EXHIBIT INDEX

Exhibit
Number Description of Document

    10.1 Amendment No. 2 to Business Loan Agreement dated November 20, 2008 between Westmoreland Resources, Inc., Westmoreland Coal Company and First Interstate Bank.

    10.2 Change in Terms Agreement dated November 20, 2008 between Westmoreland Resources, Inc. and First Interstate Bank.

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EX-10

EXHIBIT 10.1

AMENDMENT NO. 2 TO
BUSINESS LOAN AGREEMENT

                THIS AMENDMENT NO. 2 TO BUSINESS LOAN AGREEMENT (the “Agreement”) dated and made effective as of November 20, 2008 (the “Effective Date”), by and among WESTMORELAND RESOURCES, INC., a Delaware corporation (“Borrower”) and WESTMORELAND COAL COMPANY, a Delaware corporation (“Guarantor”), and FIRST INTERSTATE BANK, a Montana banking corporation (together with any subsequent holder or holders of the Notes, the “Lender”).

RECITALS

                A.     Lender and Borrower are parties to a Business Loan Agreement dated October 29, 2007, as amended by Amendment to Business Loan Agreement and Commercial Security Agreement dated October 16, 2008 (the “October 2008 Amendment”) (as amended, the “Loan Agreement”) providing for an $8,500,000.00 term loan, evidenced by a promissory note (the “Term Note”) and a $20,000.000.00 revolving loan, evidenced by a promissory note (the “Revolving Note”) (the Term Note and Revolving Note are herein sometimes referred to as the “Notes”);

                B.     The obligations under the Loan Agreement, the Term Note and the Revolving Note are secured by inventory, chattel paper, accounts, equipment and intangibles of Borrower (subject to the exceptions thereto set forth in the October 2008 Amendment), and supported by the Commercial Guaranty of Guarantor and Guarantor’s pledge of 100% of the common stock of Borrower;

                C.     On October 28, 2008, Borrower and Lender entered into a Change in Terms Agreement which extended the maturity of the Revolving Note from October 28, 2008 to November 28, 2008 and reduced the maximum credit from $20 million to $10 million.

                D.     Borrower has requested that Lender extend the Maturity Date of the Revolving Note, on the terms and conditions set forth herein and in the Change in Terms Agreement attached hereto as Exhibit 1 (the “Loan Modification”); and

                E.     Lender is willing to make the Loan Modification subject to and conditioned upon the terms and conditions herein set forth.

AGREEMENT

                NOW THEREFORE, in consideration of the Recitals above, of the mutual covenants, representations and warranties below, and other good and valuable consideration, the receipt and sufficiency of which are acknowledged by each party, the parties agree, intending to be legally bound, as follows:

                1.     Recitals.   The Recitals listed above form an integral part of this Agreement and are fully binding upon each party hereto.

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                2.     Defined Terms.   Capitalized terms used and not otherwise defined herein shall have the meanings assigned to them in the Loan Agreement.

                3.     Modification of Related Documents. The following terms and conditions of this Agreement shall control, and shall be deemed to modify and amend all contrary and inconsistent terms and conditions of the Loan Agreement and Related Documents as necessary to give full force and effect to the following as of the Effective Date:

a. Maturity Date.   Any and all references in the Loan Agreement and Related Documents to the Maturity Date of the Revolving Note are hereby amended and modified as necessary to specifically refer to the new Maturity Date for the Revolving Note of November 19, 2009.

b. Modification Fee.   Contemporaneous with the parties’ execution of this Agreement, Borrower has paid a non-refundable loan modification fee of $200,000.00, receipt of which is hereby acknowledged by Lender.

c. Related Documents.   Any and all references in the Loan Agreement and Related Documents shall henceforth mean the Loan Agreement and Related Documents as they have been modified and amended hereby, and henceforth all references to “Related Documents” in the Related Documents shall include this Agreement and the other documents and instruments executed and delivered in conjunction with the Loan Modification.

d. Prepayments on Term Note.  Borrower shall not make any prepayments of principal on the Term Note at any time there is a continuing Event of Default under the Loan Agreement or any of the Related Documents, until the Revolving Note is paid in full; provided, however, that scheduled payments of principal and interest may be made during such period. Otherwise, Term Note prepayments or advance payments on principal can be made at any time. Any prepayments, if permitted, shall be applied on the Term Note principal in the inverse order of maturity, and shall not relieve Borrower from paying the next succeeding installment or installments of principal and interest due under the Term Note.

                4.     Priority of Liens and Security Interests.   The Related Documents, as modified hereby and by the October 2008 Amendment, shall continue to fully and completely secure all of Borrower’s obligations as represented by the Notes and Related Documents. Nothing contained herein is intended to change or adversely affect the perfection or priority of any lien or security interest previously granted as security for the Notes under the Related Documents, and all such liens and security interests shall continue in effect and shall secure the Notes according to their original priority and effective dates.

                5.     Inconsistency.   To the extent there is any inconsistency between the terms of this Agreement and the terms of any of the Related Documents, the terms of this Agreement shall control and shall be given full force and effect.

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                6.     Representations and Warranties.   Borrower represents and warrants (a) Borrower’s execution of this Agreement is fully authorized pursuant to Borrower’s bylaws and governing agreements; (b) the execution and performance of this Agreement by Borrower will not conflict with, or result in a breach or violation of, any other agreement, law or order binding on it; (c) all necessary consents, votes, and other approvals required to make this Agreement binding and enforceable against Borrower have been obtained; (d) this Agreement represents a valid and binding contract of Borrower, enforceable in accordance with its terms.

                7.     Expenses.   Borrower shall pay all expenses and costs of Lender in connection with this Agreement, including, without limitation, the fees and expenses of counsel for Lender in connection with the preparation, execution and delivery of this Agreement. In the event that any party to this Agreement breaches this Agreement, a non-breaching party shall be entitled to enforce the provisions hereof and to recover from the breaching party any and all reasonable attorney’s fees and other expenses incurred by the non-breaching party in enforcing the terms of this Agreement.

                8.     Ratification, Estoppel, Release.  

a. All terms and conditions of the Loan Agreement and Related Documents that are not contrary to, or inconsistent with, the terms and conditions of this Agreement shall remain in full force and effect and are hereby reaffirmed, ratified, confirmed as of the date hereof and are incorporated herein by reference.

b. Each of the representations, warranties, covenants, and agreements of Borrower, and Guarantor, as set forth in the Loan Agreement and Related Documents are true today, to the same extent as if made today, and are incorporated herein by reference as though more fully set out, except as modified herein.

c. Borrower and Guarantor each further represent and warrant that as of the date of this Agreement there are no counterclaims, defenses or offsets of any nature whatsoever to any of the obligations of such parties under the Loan Agreement or Related Documents. Borrower and Guarantor each hereby waive, discharge, and release forever all existing rights, claims, defenses, or causes of action, known or unknown, now existing, whether discovered hereafter or not, including but not limited to those related to the Loan which arise from any action or inaction by Lender, and which occurred on or before the date of this Agreement, which each may have against Lender or which might affect the enforceability by Lender of its rights and remedies under any of the Related Documents. Borrower and Guarantor each acknowledge and agree that the waivers, discharges, and releases herein contained are a material inducement for Lender entering into this Agreement, and constitutes an essential part of the consideration bargained for and received by Lender under this Agreement.

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                9.     No Oral Agreements.   This written agreement, together with the Loan Agreement and Related Documents which are incorporated herein by reference, is the final expression of the credit agreement between the Borrower and the Lender and may not be contradicted by evidence of any prior or contemporaneous oral agreement between the Borrower and the Lender. Borrower, Guarantor, and Lender each hereby affirm that there is no unwritten oral credit agreement between Borrower and Lender with respect to the subject matter of this written credit agreement.

                10.     Additional Documents.   The parties hereto agree to sign any additional documents reasonably necessary to give effect to the terms of this Agreement, if requested by Lender.

                11.     Guaranty.   Guarantor, by executing this Agreement, consents to the terms herein contained, and acknowledges, confirms and agrees that its Commercial Guaranty remains in full force and effect and constitutes and remains a guaranty of the Notes, the Loan Agreement and the Related Documents.

                12.     No Fiduciary Relationship.   Borrower acknowledges and agrees that its relationship with Lender is a lending relationship only, and that no fiduciary relationship exists between the parties. In entering into this Agreement, Borrower has not relied upon any covenant, representation or warranty by Lender as to the effect of this Agreement, including the tax effect of this Agreement, other than those expressly set forth in this Agreement, and all such other covenants, representations, and warranties are expressly disclaimed by each of the parties.

                13.     Miscellaneous.

a. Headings are inserted into this Agreement for convenience only and shall not be considered in construing any provision.

b. The laws of the State of Montana will govern all provisions of this Agreement.

c. This Agreement may not be amended, nor any of its provisions waived, except in a writing executed by all parties hereto.

d. Time shall be of the essence of the Agreement.

e. The provisions of this Agreement are separable. If any judgment is hereafter entered holding any provision of the Agreement to be invalid or unenforceable, then the remainder of the Agreement shall be carried out as nearly as possible according to its original terms.

f. No inference in favor of, or against, any person shall be drawn from the fact that such person has drafted all or any part of this Agreement or any other Loan Document.

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                14.     Counterparts.   This Agreement may be executed in any number of identical counterparts, any of which may contain the signatures of less than all parties, and all of which together shall constitute a single Agreement.

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                15.     Successors.   The covenants, conditions and agreements contained in this Agreement shall bind, and the benefits thereof shall inure to, the respective parties hereto and their respective heirs, executors, administrators, successors and assigns.

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

BORROWER:

WESTMORELAND RESOURCES, INC.

By:	/s/ Morris W. Kegley
Name: Morris W. Kegley Title: Vice President and General Counsel

GUARANTOR:

WESTMORELAND COAL COMPANY

By:	/s/ Doug Kathol
Name: Doug Kathol Title: Vice President and Treasurer

LENDER:

FIRST INTERSTATE BANK

By:	/s/ Steve Tostenrud
Steve Tostenrud Its:  Vice President

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EX-10

EXHIBIT 10.2

CHANGE IN TERMS AGREEMENT

BORROWER :
WESTMORELAND RESOURCES, INC.
PO BOX 449
HARDIN, MT 59034-0449
Lender:
FIRST INTERSTATE BANK
BILLINGS OFFICE-COMMERCIAL DEPT.
401 NORTH 31st STREET
PO BOX 30918
BILLINGS, MT 59116

Date of Agreement:   NOVEMBER 20, 2008
Note Number:   1100236355

Description of Existing Indebtedness:   REVOLVING LINE OF CREDIT.

Description of Collateral:   10,000 SHARES OF WESTMORELAND RESOURCES STOCK PLEDGED BY WESTMORELAND COAL COMPANY AND ALL INVENTORY, CHATTEL PAPER, ACCOUNTS, GENERAL INTANGIBLES AND EQUIPMENT OF WESTMORELAND RESOURCES, INC.

Description of Change in Terms:   THE LINE IS INCREASED TO MAXIMUM CREDIT OF $20,000,000.00 FROM $10,000,000.00. THE RATE IS CHANGED TO PRIME FLOATING, WITH A FLOOR OF 6% AND A CEILING OF 8%. THE NEW MATURITY DATE IS NOVEMBER 19, 2009. ALL OTHER TERMS AND CONDITIONS TO REMAIN.

Continuing Validity. Except as expressly changed by this Agreement, the terms of the original obligation or obligations, including all agreements evidenced or securing the obligation(s), remain unchanged and in full force and effect. Consent by Lender to this Agreement does not waive Lender’s right to strict performance of the obligation(s) as changed, nor obligate Lender to make any future change in terms. Nothing in this Agreement will constitute a satisfaction of the obligation(s). It is the intention of Lender to retain as liable parties all makers and endorsers of the original obligation(s), including accommodation parties, unless a party is expressly released by Lender in writing. Any maker or endorser, including accommodation makers, will not be released by virtue of this Agreement. If any person who signed the original obligation does not sign this Agreement below, then all persons signing below acknowledge that this Agreement is given conditionally, based on the representation to Lender that the non-signing party consents to the changes and provisions of this Agreement or otherwise will not be released by it. This waiver applies not only to any initial extension, modification or release, but also to all such subsequent actions.

PRIOR TO SIGNING THIS AGREEMENT, BORROWER READ AND UNDERSTOOD ALL THE PROVISIONS OF THIS AGREEMENT. BORROWER AGREES TO THE TERMS OF THE AGREEMENT AND ACKNOWLEDGES RECEIPT OF A COMPLETED COPY OF THE AGREEMENT.

BORROWER: WESTMORELAND RESOURCES, INC.

BY:	/s/ Morris W. Kegley
	VICE PRESIDENT AND GENERAL COUNSEL

FIRST INTERSTATE BANK

BY:	/s/ Steve Tostenrud
	STEVE TOSTENRUD, VICE PRESIDENT