EX 10.1


    
		 

    
		 

    
		EXHIBIT
      10.1

    
		 

    
		AMENDED
      AND RESTATED PROMISSORY NOTE

    
		


    
      	
              
				$5,000,000.00

            	
              
				May 27,
                2008

            
	
			 	
              
				Tacoma,
                Washington

            


    

    
		 

    
		UNITED
      FUEL & ENERGY CORPORATION, a Nevada corporation located at 405 Marienfeld,
      Suite 300, Midland, Texas 79701 (“Maker”),
      entered into that certain Promissory Note (the “Existing
      Promissory Note”)
      in
      favor of the Greinke Personal Living Trust, Frank P. Greinke, Trustee,
      (“Holder”)
      dated
      April 14, 2008. Maker has requested that Holder agree and, subject to the terms
      and conditions of this Amended and Restated Promissory Note, Holder has agreed,
      to entirely amend and restate the Existing Financing Agreement as
      follows:

    
		 

    
		FOR
      VALUE RECEIVED,
      Maker hereby promises to pay to the order of the Holder on demand and in
      accordance with the terms hereinafter provided, the lesser of (i) Five Million
      Dollars ($5,000,000.00), and (ii) the unpaid principal amount of all advances
      (each, an “Advance”,
      and
      collectively, the “Advances”)
      made by
      Holder to Maker pursuant to this Note, together with interest on the unpaid
      principal balance from time to time outstanding at the rate per annum equal
      to:
      (i) with respect to the unpaid principal amount of all Advances outstanding
      for
      30 days or less, the one-month London interbank offered rate (“LIBOR”)
      in
      effect on the date of this Note plus three and one-half percent (3.50%), simple
      interest; and (ii) with respect to the unpaid principal amount of all Advances
      outstanding for more than 30 days, LIBOR in effect on the 30th
      day
      following the date of the Advance plus eight and one-half percent (8.50%),
      simple interest. Maker acknowledges and agrees that Holder shall not be
      obligated to make any Advance to Maker under this Note and, to the extent Holder
      makes an Advance under this Note, Holder shall not be obligated to make any
      additional Advances. In the event Holder makes one or more Advances under this
      Note, Holder is hereby authorized to record the amount and date of each such
      Advance, and the information so recorded shall be conclusive and binding upon
      Maker in the absence of manifest error.

    
		 

    
		All
      payments under or pursuant to this Note shall be made in United States Dollars
      by wire transfer in immediately available funds to an account designated by
      Holder in writing to Maker. 

    
		 

    
		1.    Payment.

    
		 

    
		1.1 Payment
      of Principal and Interest.
      All
      principal and accrued but unpaid interest on this Note shall be payable in
      cash
      upon the demand of the Holder
      provided
      to Maker with at least one (1) business day prior written notice.

    
		 

    
		1.2 Interest
      Upon Default.
      Upon the
      occurrence of an Event of Default (as defined in Section
      2.1),
      then,
      to the extent permitted by law, Maker will pay interest to Holder, payable
      on
      demand, on the outstanding principal balance of this Note from the date of
      the
      Event of Default until such Event of Default is cured at the rate of the lesser
      of (i) LIBOR in effect on the date of the Event of Default plus eight and
      one-half percent (8.5%) per annum, and (ii) the maximum applicable legal rate
      per annum. 


    
    
      
        
			 

      

      
        
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		1.3 Payment
      on Non-Business Days.
      Whenever
      any payment to be made shall be due on a Saturday, Sunday or a public holiday
      under the laws of the State of California, such payment may be due on the next
      succeeding business day.

    
		 

    
		1.4 Transfer.
      This
      Note may be transferred or sold, subject to the provisions of Section
      4.8
      of this
      Note, or pledged, hypothecated or otherwise granted as security by
      Holder.

    
		 

    
		1.5 Replacement.
      Upon
      receipt of a duly executed, notarized and unsecured written statement from
      Holder with respect to the loss, theft or destruction of this Note (or any
      replacement hereof), and without requiring an indemnity bond or other security,
      or, in the case of a mutilation of this Note, upon surrender and cancellation
      of
      such Note, Maker shall issue a new Note, of like tenor and amount, in lieu
      of
      such lost, stolen, destroyed or mutilated Note.

    
		 

    
		2.    Events
      of Default; Remedies.

    
		 

    
		2.1 Events
      of Default.
      The
      occurrence of any of the following events shall be an “Event
      of Default”
under
      this Note:

    
		 

    
		(a) Maker
      shall fail to make any payment of principal or interest in cash on the date
      such
      principal or interest payment is due hereunder; or

    
		 

    
		(b) default
      shall be made in the performance or observance by Maker of any material
      covenant, condition or agreement contained in this Note (other than as set
      forth
      in this clause (b) of this Section
      2.1)
      and such
      default is not fully cured within ten (10) business days after the occurrence
      thereof; or

    
		 

    
		(c) any
      material representation or warranty made by Maker herein shall prove to have
      been false or incorrect or breached in a material respect on the date as of
      which made; or

    
		 

    
		(d) Maker
      shall (i) apply for or consent to the appointment of, or the taking of
      possession by, a receiver, custodian, trustee or liquidator of all or a
      substantial part of his property or assets, (ii) commence a voluntary case
      under
      the United States Bankruptcy Code (as now or hereafter in effect) or under
      the
      comparable laws of any jurisdiction (foreign or domestic), (iii) file a petition
      seeking to take advantage of any bankruptcy, insolvency, moratorium,
      reorganization or other similar law affecting the enforcement of creditors’
rights generally, or (iv) take any action under the laws of any jurisdiction
      (foreign or domestic) analogous to any of the foregoing.

    
		 

    
		2.2 Remedies
      Upon An Event of Default.
      If an
      Event of Default shall have occurred and shall be continuing, Holder may at
      any
      time at its option (a) declare the entire unpaid principal balance of this
      Note,
      together with all interest accrued hereon, due and payable, and thereupon,
      the
      same shall be accelerated and so due and payable, without presentment, demand,
      protest, or notice, all of which are hereby expressly unconditionally and
      irrevocably waived by Maker; provided,
      however,
      that
      upon the occurrence of an Event of Default described in Section
      2.1(d),
      the
      outstanding principal balance and accrued interest hereunder shall be
      automatically due and payable, or (b) exercise or otherwise enforce any one
      or
      more of Holder’s


    
    
      
        
			 

      

      
        
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		rights,
      powers, privileges, remedies and interests under this Note or applicable law.
      No
      course of delay on the part of Holder shall operate as a waiver thereof or
      otherwise prejudice the right of Holder. No remedy conferred hereby shall be
      exclusive of any other remedy referred to herein or now or hereafter available
      at law, in equity, by statute or otherwise.

    
		 

    
		3.    Prepayment.
      Maker
      may prepay this Note in whole or in part at any time; provided,
      however,
      that any
      such prepayment will be applied first to the payment of expenses due under
      this
      Note, if any, second to interest accrued on this Note and third, if the amount
      of prepayment exceeds the amount of all such expenses and accrued interest,
      to
      the payment of principal of this Note.

    
		 

    
		4.    Miscellaneous.

    
		 

    
		4.1 Notices.
      Any
      notice, demand, request, waiver or other communication required or permitted
      to
      be given hereunder shall be in writing and shall be effective (a) upon hand
      delivery, telecopy or facsimile at the address or number designated in the
      first
      paragraph of this Note (if delivered on a business day during normal business
      hours where such notice is to be received), or the first business day following
      such delivery (if delivered other than on a business day during normal business
      hours where such notice is to be received), or (b) on the second business day
      following the date of mailing by express courier service, fully prepaid,
      addressed to such address, or upon actual receipt of such mailing, whichever
      shall first occur. 

    
		 

    
		4.2 Governing
      Law.
      This
      Note shall be governed by and construed in accordance with the internal laws
      of
      the State of California, without giving effect to the choice of law provisions.
      This Note shall not be interpreted or construed with any presumption against
      the
      party causing this Note to be drafted. 

    
		 

    
		4.3 Headings.
      Section
      headings in this Note are included herein for purposes of convenience of
      reference only and shall not constitute a part of this Note for any other
      purpose.

    
		 

    
		4.4 Remedies,
      Characterizations, Other Obligations, Breaches and Injunctive
      Relief.
      The
      remedies provided in this Note shall be cumulative and in addition to all other
      remedies available under this Note, at law or in equity (including, without
      limitation, a decree of specific performance and/or other injunctive relief),
      no
      remedy contained herein shall be deemed a waiver of compliance with the
      provisions giving rise to such remedy and nothing herein shall limit a Holder’s
      right to pursue actual damages for any failure by Maker to comply with the
      terms
      of this Note. Amounts set forth or provided for herein with respect to payments
      shall be the amounts to be received by Holder thereof and shall not, except
      as
      expressly provided herein, be subject to any other obligation of Maker (or
      the
      performance thereof). Maker acknowledges that a breach by it of its obligations
      hereunder will cause irreparable and material harm to Holder and that the remedy
      at law for any such breach may be inadequate. Therefore, Maker agrees that,
      in
      the event of any such breach or threatened breach, Holder shall be entitled,
      in
      addition to all other available rights and remedies, at law or in equity, to
      seek and obtain such equitable relief, including but not limited to an
      injunction restraining any such breach or

	

    
    
      
        
			 

      

      
        
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		threatened
      breach, without the necessity of showing economic loss and without any bond
      or
      other security being required. 

    
		 

    
		4.5 Enforcement
      Expenses.
      Maker
      agrees to pay all costs and expenses of enforcement of this Note, including,
      without limitation, reasonable attorneys’ fees and expenses incurred by Holder
      in connection with enforcement of Holder’s rights under this Note.

    
		 

    
		4.6 Binding
      Effect.
      The
      obligations of Maker and Holder set forth herein shall be binding upon the
      successors, assigns, heirs, administrators and transferees of each such
      party.

    
		 

    
		4.7 Amendments.
      This
      Note may not be modified or amended in any manner except in writing executed
      by
      Maker and Holder.

    
		 

    
		4.8 Transfer
      of this Note.
      With
      respect to any offer, sale or other disposition of this Note, Holder will give
      written notice to Maker prior thereto, describing briefly the manner
      thereof.

    
		 

    
		4.9 Consent
      to Jurisdiction.
      Each of
      Maker and Holder (i) hereby irrevocably submits to the exclusive jurisdiction
      of
      the United States District Court sitting in the Central District of California,
      Southern Division, and the courts of the State of California located in Orange
      County for the purposes of any suit, action or proceeding arising out of or
      relating to this Note and (ii) hereby waives, and agrees not to assert in any
      such suit, action or proceeding, any claim that it is not personally subject
      to
      the jurisdiction of such court, that the suit, action or proceeding is brought
      in an inconvenient forum or that the venue of the suit, action or proceeding
      is
      improper. Each of Maker and Holder consents to process being served in any
      such
      suit, action or proceeding by mailing a copy thereof via certified mail, return
      receipt requested, to such party at the address in effect for notices to it
      under this Note and agrees that such service shall constitute good and
      sufficient service of process and notice thereof. Nothing in this Section
      4.9
      shall
      affect or limit any right to serve process in any other manner permitted by
      law.

    
		 

    
		4.10 Failure
      or Indulgence Not Waiver.
      No
      failure or delay on the part of Holder in the exercise of any power, right
      or
      privilege hereunder shall operate as a waiver thereof, nor shall any single
      or
      partial exercise of any such power, right or privilege preclude other or further
      exercise thereof or of any other right, power or privilege.

    
		 

    
		4.11 Maker
      Waivers.
      Except
      as otherwise specifically provided herein, Maker and all others that may become
      liable for all or any part of the obligations evidenced by this Note, hereby
      waive presentment, demand, notice of nonpayment, protest and all other demands
      and notices in connection with the delivery, acceptance, performance and
      enforcement of this Note, and do hereby consent to any number of renewals or
      extensions of the time or payment hereof and agree that any such renewals or
      extensions may be made without notice to any such persons and without affecting
      their liability herein and do further consent to the release of any person
      liable hereon, all without affecting the liability of the other persons, firms
      or Maker liable for the payment of this Note, AND TO
      THE
      EXTENT NOT PROHIBITED BY APPLICABLE LAW WHICH CANNOT BE WAIVED, DO HEREBY WAIVE,
      AND COVENANT THAT THEY WILL NOT ASSERT (WHETHER AS PLAINTIFF, DEFENDANT OR
      OTHERWISE),


    
    
      
        
			 

      

      
        
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		ANY
      RIGHT
      TO TRIAL BY JURY IN ANY FORUM IN RESPECT OF ANY ISSUE, CLAIM, DEMAND, ACTION
      OR
      CAUSE OF ACTION ARISING OUT OF OR PASSED UPON THIS NOTE OR THE SUBJECT MATTER
      HEREOF, WHETHER NOW EXISTING OR HEREAFTER ARISING AND WHETHER SOUNDING IN TORT
      OR CONTRACT OR OTHERWISE. 
      No delay
      or omission on the part of Holder in exercising its rights under this Note,
      or
      course of conduct relating hereto, shall operate as a waiver of such rights
      or
      any other right of Holder, nor shall any waiver by Holder of any such right
      or
      rights on any one occasion be deemed a waiver of the same right or rights on
      any
      future occasion.

    
		 

    
		IN
      WITNESS
      WHEREOF, Maker has executed this Note as of the day and year first above
      written.

    
		 

    
      	 	
              
				UNITED
                FUEL & ENERGY CORPORATION,

              
				a
                Nevada corporation

            


    

     

     

    
      	
            	
			By: 
              /s/
              Charles McArthur


    

    
      	
            	 	
              
				Charles
                McArthur, Chief Executive Officer 

            


    

    
		 

    
      	 	
              
				Accepted
                and agreed:

            


    

    
		 

    
      	 	
              
				THE
                GREINKE PERSONAL LIVING TRUST

            


    

     

     

    
      	
            	
			By: 
              /s/
              Frank P. Greinke


    

    
      	
            	 	
              
				Frank
                P. Greinke, Trustee

            


      	 	 	 


      	 	 	 


    

    
      
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