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                                                                   Exhibit 10.12

                                   Schedule A

                                Energy West Inc.
                                  P.O. Box 2229
                           Great Falls, Montana 59403


June 5, 2003

DAMG Capital LLC
575 Lexington Avenue - 4th Floor
New York, N.Y. 10022

Gentlemen:

In connection with our engagement of DAMG Capital LLC ("DAMG") as our financial
advisor and investment banker, we hereby agree to indemnify and hold harmless
DAMG and its affiliates, and the respective directors, officers, shareholders,
agents and employees of DAMG (collectively the "Indemnified Persons"), from and
against any and all claims, actions, suits, proceedings (including those of
shareholders), damages, liabilities and expenses incurred by them (including the
reasonable fees and expenses of counsel) which are (a) related to or arise out
of (i) any actions taken or omitted to be taken (including any untrue statements
made or any statements omitted to be made) by the Company, or (ii) any actions
taken or omitted to be taken by any Indemnified Person in connection with our
engagement of DAMG, or (B) otherwise relate to or arise out of DAMG's activities
on our behalf under DAMG's engagement, and we shall reimburse any Indemnified
Person for all expenses (including the reasonable fees and expenses of counsel)
incurred by such Indemnified Person in connection with investigating, preparing
or defending any such claim, action, suit or proceeding (collectively a
"Claim"), whether or not in connection with pending or threatened litigation in
which any Indemnified Person is a party. We will not, however, be responsible
for any Claim, to the extent such Claim is finally judicially determined to have
resulted from the gross negligence or willful misconduct of any person seeking
indemnification hereunder. We further agree that no Indemnified Person shall
have any liability to us for or in connection with our engagement of DAMG except
for any Claim incurred by us to the extent such Claim results from any
Indemnified Person's gross negligence or willful misconduct.

We further agree that we will not, without the prior written consent of DAMG,
settle, compromise or consent to the entry of any judgment in any pending or
threatened Claim in respect of which indemnification may be sought hereunder
(whether or not any Indemnified Person is an actual or potential party to such
Claim), unless such settlement, compromise or consent includes an unconditional,
irrevocable release of each Indemnified Person hereunder from any and all
liability arising out of such Claim.

Promptly upon receipt by an Indemnified Person of notice of any complaint or the
assertion or institution of any Claim with respect to which indemnification is
being sought hereunder, such Indemnified Person shall notify us in writing of
such complaint or of such assertion or institution

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but failure to so notify us shall not relieve us from any obligation we may have
hereunder, unless only to the extent such failure results in actual prejudice,
and will not in any event relieve us from any other obligation or liability we
may have to any Indemnified Person otherwise than under this Agreement. If we so
elect or are requested by such Indemnified Person, we will assume the defense of
such Claim, including the employment of counsel reasonably satisfactory to such
Indemnified Person and the payment of the fees and expenses of such counsel. If,
however, such Indemnified Person reasonably determines that having common
counsel would present such counsel with a conflict of interest or if the
defendant in, or target of, any such Claim, includes an Indemnified Person and
us, and such Indemnified Person reasonably concludes that there may be legal
defenses available to it different from or in addition to those available to us,
then such Indemnified Person may employ its own separate counsel to represent or
defend it in any such Claim and we shall pay the reasonable fees and expenses of
such counsel. Notwithstanding the foregoing, the Company shall not be obligated
to pay the fees and expenses for more that one separate legal counsel in
connection with any Claim or group of related Claims. Notwithstanding anything
herein to the contrary, if we fail timely or diligently to defend, contest, or
otherwise protect against any Claim, the relevant Indemnified Person shall have
the right, but not the obligation, to defend, contest, compromise, settle,
assert crossclaims, or otherwise protect against the same, and shall be fully
indemnified by us therefor, including without limitation, for the reasonable
fees and expenses of its counsel and all amounts paid as a result of such Claim
or the compromise or settlement thereof; provided that no settlement or
compromise of any such Claim shall be made by an Indemnified Person without the
Company's advance written consent which consent shall not be withheld
unreasonably. In any Claim in which we assume the defense, the Indemnified
Person shall have the right to participate in such Claim and to retain its own
counsel therefor at its own expense, subject, however, to our right to control
such defense.

We agree that if any indemnity sought by an Indemnified Person hereunder is held
by a court to be unavailable for any reason, then (whether or not DAMG is the
Indemnified Person), we and DAMG shall contribute to the Claim for which such
indemnity is held unavailable in such proportion as is appropriate to reflect
the relative benefits to us, on the one hand, and DAMG on the other, in
connection with DAMG's engagement referred to above, subject to the limitation
that in no event shall the amount of DAMG's contribution to such Claim exceed
the amount of fees actually received by DAMG from us pursuant to DAMG's
engagement. We hereby agree that the relative benefits to us, on the one hand,
and DAMG on the other, with respect to DAMG's engagement shall be deemed in the
same proportion as (a) the total value paid or proposed to be paid or received
by us or our stockholders as the case may be, pursuant to the transaction
(whether or not consummated) for which you are engaged to render services bears
to (b) the fee actually paid to DAMG in connection with such engagement;
provided, however, that under no circumstances whatsoever shall DAMG be required
to contribute to any claim any amount in excess of the fee actually paid to it
in connection with such engagement.

Our indemnity, reimbursement and contribution obligations under this Agreement
shall be in addition to, and shall in no way limit or otherwise adversely affect
any rights that any Indemnified Party may have at law or at equity.

If DAMG or its personnel is required or requested by us to provide documentary
evidence or testimony in connection with any proceeding arising from or relating
to DAMG's engagement, we agree to pay all reasonable expenses (including
reasonable fees incurred for legal counsel) in

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complying therewith and $2,000 per day for sworn testimony or preparation
therefor payable in advance.

It is understood that, in connection with DAMG's engagement, DAMG may be engaged
to act in one or more additional capacities and that the terms of the original
engagement or any such additional engagement may be embodied in one or more
separate written agreements. The provisions of this Agreement shall apply to the
original engagement, any such engagement and any modification of the original
engagement or such engagement and shall remain in full force and effect
following the completion or termination of DAMG's engagement(s).

Very truly yours,

Energy West Inc.



By: /s/Edward J. Bernica
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    Edward J Bernica, President and Chief Executive Officer


Confirmed and Agreed to:

DAMG Capital LLC



By: /s/Simon S. Strauss
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    Simon S. Strauss, Senior Managing Director

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