<PAGE>

Exhibit 10.6

                            JAMES RIVER COAL COMPANY

                            INDEMNIFICATION AGREEMENT

        This Indemnification Agreement ("Agreement") is effective as of
_________________ by and between James River Coal Company, a Virginia
corporation (the "Company"), and _________________ ("Indemnitee").

        WHEREAS, the Company desires to attract and retain the services of
highly qualified individuals, such as Indemnitee, to serve the Company and its
related entities;

         WHEREAS, in order to induce Indemnitee to continue to provide services
to the Company, the Company wishes to provide for the indemnification of, and
the advancement of expenses to, Indemnitee to the maximum extent permitted by
Virginia law;

        WHEREAS, the Company and Indemnitee desire to have in place the
protection provided by an indemnification agreement and to provide
indemnification and advancement of expenses to Indemnitee to the maximum extent
permitted by Virginia law; and

        WHEREAS, in view of the considerations set forth above, the Company
desires that Indemnitee shall be indemnified and advanced expenses by the
Company as set forth herein;

        NOW, THEREFORE, the Company and Indemnitee hereby agree as set forth
below.

        1. CERTAIN DEFINITIONS.

            (a) "Change in Control" shall mean, and shall be deemed to have
occurred if, a majority of the directors of the Company has changed after the
date of the Covered Event giving rise to a Claim.

            (b) "Claim" shall mean with respect to a Covered Event: any
threatened, pending or completed investigation, action, suit, proceeding or
appeal, whether civil, criminal, administrative or investigative and whether
formal or informal.

            (c) References to the "Company" shall include, in addition to the
Company, any constituent corporation (including any constituent of a
constituent) absorbed in a consolidation, merger, sale or other transaction to
which the Company (or any of its wholly owned subsidiaries) is a party which, if
its separate existence had continued, would have had power and authority to
indemnify its directors, officers, employees, agents or fiduciaries, so that if
Indemnitee is or was a director, officer, employee, agent or fiduciary of such
constituent corporation, or is or was serving at the request of such constituent
corporation as a director, officer, employee, agent or fiduciary of another
corporation, partnership, limited liability company, joint venture, employee
benefit plan, trust or other enterprise, Indemnitee shall stand in the same
position under the provisions of this Agreement with respect to the resulting or
surviving corporation as Indemnitee would have with respect to such constituent
corporation if its separate existence had continued.



<PAGE>

            (d) "Covered Event" shall mean any event or occurrence related to
the fact that Indemnitee is or was a director, officer, employee, agent or
fiduciary of the Company, or any subsidiary of the Company, or is or was serving
at the request of the Company as a director, officer, employee, agent or
fiduciary of another corporation, partnership, limited liability company, joint
venture, trust or other enterprise, or by reason of any action or inaction on
the part of Indemnitee while serving in such capacity.

            (e) "Expenses" shall mean (i) any and all expenses (including
attorneys' fees and all other costs (including expert witness fees) and
obligations incurred in connection with investigating, defending, being a
witness in or participating in (including on appeal), or preparing to defend, to
be a witness in or to participate in, any action, suit, proceeding, alternative
dispute resolution mechanism, hearing, inquiry or investigation, or asserting a
claim for indemnification hereunder), judgments, fines, penalties and amounts
paid in settlement (if such settlement is approved in advance by the Company,
which approval shall not be unreasonably withheld or delayed), actually and
reasonably incurred, of any Claim, (ii) any federal, state, local or foreign
taxes imposed on Indemnitee as a result of the actual or deemed receipt of any
payments under this Agreement, and (iii) any federal, state, local or foreign,
taxes imposed on Indemnitee as a result of the receipt of payments.

            (f) "Expense Advance" shall mean a payment to Indemnitee of Expenses
pursuant to Section 3 in advance of the settlement of or final judgment in any
action, suit, proceeding or alternative dispute resolution mechanism, hearing,
inquiry or investigation which constitutes a Claim.

            (g) References to "Indemnitee" (except in Section 1(d) hereof) shall
include, in addition to Indemnitee, (a) Indemnitee's principal employer (other
than the Company) and (b) any shareholder of the Company that is controlled by
such principal employer, in each case, if and only if, Indemnitee serves on the
Board of Directors of the Company and such service is directly related to
Indemnitee's employment with such principal employer.

            (h) References to "other enterprises" shall include employee benefit
plans; references to "fines" shall include any excise taxes assessed on
Indemnitee with respect to an employee benefit plan; and references to "serving
at the request of the Company" shall include any service as a director, officer,
employee, agent or fiduciary of the Company which imposes duties on, or involves
services by, such director, officer, employee, agent or fiduciary with respect
to an employee benefit plan, its participants or its beneficiaries; and if
Indemnitee acted in good faith and in a manner Indemnitee reasonably believed to
be in the interests of the participants in and beneficiaries of an employee
benefit plan, Indemnitee shall be deemed to have acted in a manner "not opposed
to the best interests of the Company" as referred to in this Agreement.

            (i) "Reviewing Party" shall mean, subject to the provisions of
Section 2(d), any person or body appointed by the Board of Directors in
accordance with Virginia law to make a determination regarding the Company's
obligations hereunder and under Virginia law, which may include a committee of
or the full Board of Directors of the Company, Special Legal Counsel, or the
shareholders of the Company.

            (j) "Section" refers to a section of this Agreement unless otherwise
indicated.


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<PAGE>

            (k) "Special Legal Counsel" shall mean an attorney or firm of
attorneys, selected in accordance with the provisions of Section 2(d) hereof,
who may or may not be counsel for the Company.

            (l) "Voting Securities" shall mean any securities of the Company
that vote generally in the election of directors.

        2. INDEMNIFICATION.

            (a) INDEMNIFICATION OF EXPENSES. Subject to the provisions of
Section 2(b) below, the Company shall indemnify Indemnitee for Expenses to the
fullest extent permitted by Virginia law if Indemnitee was or is or becomes a
party to or witness or other participant in, or is threatened to be made a party
to or witness or other participant in, any Claim (whether by reason of or
arising in part out of a Covered Event), including all interest, assessments and
other charges paid or payable in connection with or in respect of such Expenses;
except such Expenses as are incurred because of Indemnitee's willful misconduct
or knowing violation of the criminal law.

            (b) REVIEW OF INDEMNIFICATION OBLIGATIONS. Notwithstanding the
foregoing, but subject to the provisions of Section 2(e) below, in the event any
Reviewing Party shall have determined that Indemnitee is not entitled to be
indemnified hereunder under Virginia law, (i) the Company shall have no further
obligation under Section 2(a) to make any payments to Indemnitee not made prior
to such determination by such Reviewing Party, and (ii) the Company shall be
entitled to be reimbursed by Indemnitee (who hereby agrees to reimburse the
Company) for all Expenses theretofore paid in indemnifying Indemnitee; PROVIDED,
HOWEVER, that if Indemnitee has commenced or thereafter commences legal
proceedings in a court of competent jurisdiction to secure a determination that
Indemnitee is entitled to be indemnified hereunder under Virginia law, any
determination made by any Reviewing Party that Indemnitee is not entitled to be
indemnified hereunder under Virginia law shall not be binding and Indemnitee
shall not be required to reimburse the Company for any Expenses theretofore paid
in indemnifying Indemnitee until a final judicial determination is made with
respect thereto (as to which all rights of appeal therefrom have been exhausted
or lapsed). Indemnitee's obligation to reimburse the Company for any Expenses
shall be an unlimited, unsecured general obligation accepted without reference
to Indemnitee's ability to make repayment, and no interest shall be charged
thereon.

            (c) INDEMNITEE RIGHTS ON UNFAVORABLE DETERMINATION; BINDING EFFECT.
If any Reviewing Party determines that Indemnitee substantively is not entitled
to be indemnified hereunder in whole or in part under Virginia law, Indemnitee
shall have the right to commence litigation seeking an initial determination by
the court or challenging any such determination by such Reviewing Party or any
aspect thereof, including the legal or factual bases therefor, and, subject to
the provisions of Section 15, the Company hereby consents to service of process
and to appear in any such proceeding. Absent such litigation, any determination
by any Reviewing Party shall be conclusive and binding on the Company and
Indemnitee.

            (d) SELECTION OF REVIEWING PARTY; CHANGE IN CONTROL. If there has
not been a Change in Control, any Reviewing Party shall be selected in
accordance with the provisions of Section 13.1-701(B) of the Virginia Stock
Corporation Act and the Company's Articles of Incorporation, and if



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there has been a Change in Control, any Reviewing Party with respect to all
matters thereafter arising concerning the rights of Indemnitee to
indemnification of Expenses under this Agreement or any other agreement with or
for the benefit of the Indemnitee or under the Company's Articles of
Incorporation or Bylaws as now or hereafter in effect, or under any other
Virginia law, if desired by Indemnitee, shall be Special Legal Counsel jointly
selected and agreed upon by the Company's Board of Directors and Indemnitee. The
Company agrees to pay the reasonable fees of the Reviewing Party referred to
above and to indemnify fully such Reviewing Party against any and all expenses
(including attorneys' fees), claims, liabilities and damages arising out of or
relating to this Agreement or the Reviewing Party's engagement pursuant hereto.
Notwithstanding any other provision of this Agreement, the Company shall not be
required to pay Expenses of more than one Special Legal Counsel in connection
with all matters concerning a single Indemnitee, and such Special Legal Counsel
shall be the Special Legal Counsel for any or all other Indemnitees unless (i)
the Company otherwise determines or (ii) any Indemnitee shall provide a written
statement setting forth in detail a reasonable objection to such Special Legal
Counsel representing other Indemnitees.

            (e) MANDATORY PAYMENT OF EXPENSES. Notwithstanding any other
provision of this Agreement other than Section 10 hereof, to the extent that
Indemnitee entirely prevails in the defense of any Claim, Indemnitee shall be
indemnified against all Expenses incurred by Indemnitee in connection therewith.

        3. EXPENSE ADVANCES.

            (a) OBLIGATION TO MAKE EXPENSE ADVANCES. The Company shall make
Expense Advances to Indemnitee upon receipt of (i) a written undertaking by or
on behalf of Indemnitee to repay such amounts, unless it shall previously have
been determined pursuant to this Agreement that Indemnitee is not entitled to be
indemnified therefor by the Company and (ii) a written statement by Indemnitee
of his or her good faith belief that he or she has met the standard of conduct
described in Section 13.1-697 of the Virginia Stock Corporation Act.

            (b) FORM OF UNDERTAKING. Any written undertaking by Indemnitee to
repay any Expense Advances hereunder shall be unsecured and no interest shall be
charged thereon.

            (c) DETERMINATION OF REASONABLE EXPENSE ADVANCES. The parties agree
that for the purposes of any Expense Advance for which Indemnitee has made
written demand to the Company in accordance with this Agreement, all Expenses
included in such Expense Advance that are certified by affidavit of Indemnitee's
counsel as being reasonable shall be presumed conclusively to be reasonable,
subject to applicable law.

        4. PROCEDURES FOR INDEMNIFICATION AND EXPENSE ADVANCES.

            (a) TIMING OF PAYMENTS. All payments of Expenses (including without
limitation Expense Advances) by the Company to Indemnitee pursuant to this
Agreement shall be made to the fullest extent permitted by Virginia law as soon
as practicable after written demand by Indemnitee therefor is presented to the
Company, but in no event later than forty-five (45) business days after such
written demand by Indemnitee is presented to the Company, except in the case of
Expense



                                       -4-
<PAGE>

Advances, which shall be made no later than twenty (20) business days after such
written demand by Indemnitee is presented to the Company.

            (b) NOTICE/COOPERATION BY INDEMNITEE. Indemnitee shall, as a
condition precedent to Indemnitee's right to be indemnified or Indemnitee's
right to receive Expense Advances under this Agreement, give the Company notice
in writing as soon as practicable of any Claim made against Indemnitee for which
indemnification will or could be sought under this Agreement. Notice to the
Company shall be directed to the President of the Company at the address shown
on the signature page of this Agreement (or such other address as the Company
shall designate in writing to Indemnitee). In addition, Indemnitee shall give
the Company such information and cooperation as it may reasonably require and as
shall be within Indemnitee's knowledge and reasonable power to furnish.

            (c) NO PRESUMPTIONS; BURDEN OF PROOF. For purposes of this
Agreement, the termination of any Claim by judgment, order, settlement (whether
with or without court approval) or conviction, or upon a plea of NOLO
CONTENDERE, or its equivalent, shall not create a presumption that Indemnitee
did not meet any particular standard of conduct or have any particular belief or
that a court has determined that indemnification is not permitted by this
Agreement or Virginia law. In addition, neither the failure of any Reviewing
Party to have made a determination as to whether Indemnitee has met any
particular standard of conduct or had any particular belief, nor an actual
determination by any Reviewing Party that Indemnitee has not met such standard
of conduct or did not have such belief, prior to the commencement of legal
proceedings by Indemnitee to secure a judicial determination that Indemnitee
should be indemnified under this Agreement or Virginia law, shall be a defense
to Indemnitee's claim or create a presumption that Indemnitee has not met any
particular standard of conduct or did not have any particular belief. In
connection with any determination by any Reviewing Party or otherwise as to
whether Indemnitee is entitled to be indemnified hereunder, the burden of proof
shall be on the Company to establish that Indemnitee is not so entitled.

            (d) SELECTION OF COUNSEL. In the event the Company shall be
obligated hereunder to provide indemnification for or make any Expense Advances
with respect to the Expenses of any Claim, the Company, if appropriate, shall be
entitled to assume the defense of such Claim with counsel approved by Indemnitee
(which approval shall not be unreasonably withheld) upon the delivery to
Indemnitee of written notice of the Company's election to do so. After delivery
of such notice, approval of such counsel by Indemnitee and the retention of such
counsel by the Company, the Company will not be liable to Indemnitee under this
Agreement for any fees or expenses of separate counsel subsequently employed by
or on behalf of Indemnitee with respect to the same Claim; PROVIDED THAT, (i)
Indemnitee shall have the right to employ Indemnitee's separate counsel in any
such Claim at Indemnitee's expense and (ii) if (A) the employment of separate
counsel by Indemnitee has been previously authorized by the Company, (B)
Indemnitee shall have reasonably concluded that there may be a conflict of
interest between the Company and Indemnitee in the conduct of any such defense,
or (C) the Company shall not continue to retain such counsel to defend such
Claim, then the fees and expenses of Indemnitee's separate counsel shall be
Expenses for which Indemnitee may receive indemnification or Expense Advances
hereunder.


                                      -5-
<PAGE>

        5. ADDITIONAL INDEMNIFICATION RIGHTS; NONEXCLUSIVITY.

            (a) SCOPE. The Company hereby agrees to indemnify Indemnitee to the
fullest extent permitted by Virginia law, notwithstanding that such
indemnification is not specifically authorized by the other provisions of this
Agreement, the Company's Articles of Incorporation, the Company's Bylaws or by
statute. In the event of any change after the date of this Agreement in any
Virginia law, statute or rule which expands the right of a Virginia corporation
to indemnify a member of its board of directors or an officer, employee, agent
or fiduciary, it is the intent of the parties hereto that Indemnitee shall enjoy
by this Agreement the greater benefits afforded by such change. In the event of
any change in any Virginia law, statute or rule which narrows the right of a
Virginia corporation to indemnify a member of its board of directors or an
officer, employee, agent or fiduciary, such change, to the extent not otherwise
required by such law, statute or rule to be applied to this Agreement, shall
have no effect on this Agreement or the parties' rights and obligations
hereunder.

            (b) NONEXCLUSIVITY. The indemnification and the payment of Expense
Advances provided by this Agreement shall be in addition to any rights to which
Indemnitee may be entitled under the Company's Articles of Incorporation, its
Bylaws, any other agreement, any vote of shareholders or disinterested
directors, the Virginia Stock Corporation Act, or otherwise. The indemnification
and the payment of Expense Advances provided under this Agreement shall continue
as to Indemnitee for any action taken or not taken while serving in an
indemnified capacity even though subsequent thereto Indemnitee may have ceased
to serve in such capacity.

        6. NO DUPLICATION OF PAYMENTS. The Company shall not be liable under
this Agreement to make any payment in connection with any Claim made against
Indemnitee to the extent Indemnitee has otherwise actually received payment
(under any insurance policy, provision of the Company's Articles of
Incorporation, Bylaws or otherwise) of the amounts otherwise payable hereunder.

        7. PARTIAL INDEMNIFICATION. If Indemnitee is entitled under any
provision of this Agreement to indemnification by the Company for some or a
portion of Expenses incurred in connection with any Claim, but not, however, for
all of the total amount thereof, the Company shall nevertheless indemnify
Indemnitee for the portion of such Expenses to which Indemnitee is entitled.

        8. MUTUAL ACKNOWLEDGMENT. Both the Company and Indemnitee acknowledge
that in certain instances, federal law or applicable public policy may prohibit
the Company from indemnifying its directors, officers, employees, agents or
fiduciaries under this Agreement or otherwise. Indemnitee understands and
acknowledges that the Company has undertaken or may be required in the future to
undertake with the Securities and Exchange Commission to submit the question of
indemnification to a court in certain circumstances for a determination of the
Company's right under public policy to indemnify Indemnitee.


        9. LIABILITY INSURANCE. To the extent the Company maintains liability
insurance applicable to directors, officers, employees, agents or fiduciaries,
Indemnitee shall be covered by such policies.

        10. EXCEPTIONS. Notwithstanding any other provision of this Agreement,
the Company shall not be obligated pursuant to the terms of this Agreement:



                                      -6-
<PAGE>

            (a) EXCLUDED ACTION OR OMISSIONS. To indemnify Indemnitee for
Expenses resulting from acts, omissions or transactions for which Indemnitee is
prohibited from receiving indemnification under this Agreement or Virginia law;
PROVIDED, HOWEVER, that notwithstanding any limitation set forth in this Section
10(a) regarding the Company's obligation to provide indemnification, Indemnitee
shall be entitled under Section 3 to receive Expense Advances hereunder with
respect to any such Claim unless and until a court having jurisdiction over the
Claim shall have made a final judicial determination (as to which all rights of
appeal therefrom have been exhausted or lapsed) that Indemnitee has engaged in
acts, omissions or transactions for which Indemnitee is prohibited from
receiving indemnification under this Agreement or Virginia law.

            (b) CLAIMS INITIATED BY INDEMNITEE. To indemnify or make Expense
Advances to Indemnitee with respect to Claims initiated or brought voluntarily
by Indemnitee and not by way of defense, counterclaim or crossclaim, except (i)
with respect to actions or proceedings brought to establish or enforce a right
to indemnification or advancement of Expenses under this Agreement or any other
agreement or insurance policy or under the Company's Articles of Incorporation
or Bylaws now or hereafter in effect relating to Claims for Covered Events, (ii)
in specific cases if the Board of Directors has approved the initiation or
bringing of such Claim, or (iii) as otherwise required under the Virginia Stock
Corporation Act, regardless of whether Indemnitee ultimately is determined to be
entitled to such indemnification or insurance recovery, as the case may be.

            (c) LACK OF GOOD FAITH. To indemnify Indemnitee for any Expenses
incurred by Indemnitee with respect to any action instituted (i) by Indemnitee
to enforce or interpret this Agreement, if a court having jurisdiction over such
action determines as provided in Section 13 that each of the material assertions
made by Indemnitee as a basis for such action was not made in good faith or was
frivolous, or (ii) by or in the name of the Company to enforce or interpret this
Agreement, if a court having jurisdiction over such action determines as
provided in Section 13 that each of the material defenses asserted by Indemnitee
in such action was made in bad faith or was frivolous.

            (d) CLAIMS UNDER SECTION 16(B). To indemnify Indemnitee for expenses
and the payment of profits arising from the purchase and sale by Indemnitee of
securities in violation of Section 16(b) of the Securities Exchange Act of 1934,
as amended, or any similar successor statute, PROVIDED, HOWEVER, that
notwithstanding any limitation set forth in this Section 10(d) regarding the
Company's obligation to provide indemnification, Indemnitee shall be entitled
under Section 3 to receive Expense Advances hereunder with respect to any such
Claim unless and until a court having jurisdiction over the Claim shall have
made a final judicial determination (as to which all rights of appeal therefrom
have been exhausted or lapsed) that Indemnitee has violated said statute.

        11. COUNTERPARTS. This Agreement may be executed in two or more
counterparts, each of which shall constitute an original.

        12. BINDING EFFECT; SUCCESSORS AND ASSIGNS. This Agreement shall be
binding upon and inure to the benefit of and be enforceable by the parties
hereto and their respective successors, assigns (including any direct or
indirect successor by purchase, merger, consolidation or otherwise to all or
substantially all of the business or assets of the Company), spouses, heirs and
personal and legal representatives.


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        13. EXPENSES INCURRED IN ACTION RELATING TO ENFORCEMENT OR
INTERPRETATION. In the event that any action is instituted by Indemnitee under
this Agreement or under any liability insurance policies maintained by the
Company to enforce or interpret any of the terms hereof or thereof, Indemnitee
shall be entitled to be indemnified for all Expenses incurred by Indemnitee with
respect to such action (including without limitation attorneys' fees),
regardless of whether Indemnitee is ultimately successful in such action, unless
as a part of such action a court having jurisdiction over such action makes a
final judicial determination (as to which all rights of appeal therefrom have
been exhausted or lapsed) that each of the material assertions made by
Indemnitee as a basis for such action was not made in good faith or was
frivolous; PROVIDED, HOWEVER, that until such final judicial determination is
made, Indemnitee shall be entitled under Section 3 to receive payment of Expense
Advances hereunder with respect to such action. In the event of an action
instituted by or in the name of the Company under this Agreement to enforce or
interpret any of the terms of this Agreement, Indemnitee shall be entitled to be
indemnified for all Expenses incurred by Indemnitee in defense of such action
(including without limitation costs and expenses incurred with respect to
Indemnitee's counterclaims and crossclaims made in such action), unless as a
part of such action a court having jurisdiction over such action makes a final
judicial determination (as to which all rights of appeal therefrom have been
exhausted or lapsed) that each of the material defenses asserted by Indemnitee
in such action was made in bad faith or was frivolous; PROVIDED, HOWEVER, that
until such final judicial determination is made, Indemnitee shall be entitled
under Section 3 to receive payment of Expense Advances hereunder with respect to
such action.

        14. NOTICE. All notices, requests, demands and other communications
under this Agreement shall be in writing and shall be deemed duly given (i) if
delivered by hand and signed for by the party addressed, on the date of such
delivery, or (ii) if mailed by domestic certified or registered mail with
postage prepaid, on the third business day after the date postmarked. Addresses
for notice to either party are as shown on the signature page of this Agreement,
or as subsequently modified by written notice.

        15. CONSENT TO JURISDICTION. The Company and Indemnitee each hereby
irrevocably consent to the jurisdiction of the courts of the Commonwealth of
Virginia for all purposes in connection with any action or proceeding which
arises out of or relates to this Agreement and agree that any action instituted
under this Agreement shall be commenced, prosecuted and continued only in the
Commonwealth of Virginia in and for Henrico County, which shall be the exclusive
and only proper forum for adjudicating such a claim.

        16. SEVERABILITY. The provisions of this Agreement shall be severable in
the event that any of the provisions hereof (including any provision within a
single section, paragraph or sentence) are held by a court of competent
jurisdiction to be invalid, void or otherwise unenforceable, and the remaining
provisions shall remain enforceable to the fullest extent permitted by Virginia
law. Furthermore, to the fullest extent possible, the provisions of this
Agreement (including without limitation each portion of this Agreement
containing any provision held to be invalid, void or otherwise unenforceable,
that is not itself invalid, void or unenforceable) shall be construed so as to
give effect to the intent manifested by the provision held invalid, illegal or
unenforceable.


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<PAGE>

        17. CHOICE OF LAW. This Agreement, and all rights, remedies,
liabilities, powers and duties of the parties to this Agreement, shall be
governed by and construed in accordance with the laws of the Commonwealth of
Virginia without regard to its conflicts of laws principles.

        18. SUBROGATION. In the event of payment under this Agreement, the
Company shall be subrogated to the extent of such payment to all of the rights
of recovery of Indemnitee, who shall execute all documents required and shall do
all acts that may be necessary to secure such rights and to enable the Company
effectively to bring suit to enforce such rights.

        19. AMENDMENT AND TERMINATION. No amendment, modification, termination
or cancellation of this Agreement shall be effective unless it is in writing
signed by both the parties hereto. No waiver of any of the provisions of this
Agreement shall be deemed to be or shall constitute a waiver of any other
provisions hereof (whether or not similar), nor shall such waiver constitute a
continuing waiver.

        20. INTEGRATION AND ENTIRE AGREEMENT. This Agreement sets forth the
entire understanding between the parties hereto and supersedes and merges all
previous written and oral negotiations, commitments, understandings and
agreements relating to the subject matter hereof between the parties hereto. 21.
NO CONSTRUCTION AS EMPLOYMENT AGREEMENT. Nothing contained in this Agreement
shall be construed as giving Indemnitee any right to be retained in the employ
of the Company or any of its subsidiaries or affiliated entities.

                            [SIGNATURE PAGE FOLLOWS.]



                                      -9-
<PAGE>




         IN WITNESS WHEREOF, the parties hereto have executed this
Indemnification Agreement as of the date first above written.

                                      JAMES RIVER COAL COMPANY


                                      By:
                                               ---------------------------------

                                      Name:
                                            ------------------------------------

                                      Title:
                                            ------------------------------------

                                      Address: 901 E. Byrd Street, Suite 1600
                                               Richmond, VA  23219



AGREED TO AND ACCEPTED:


-------------------------------
[Indemnitee]

Address:
        ------------------------
        ------------------------







                               [SIGNATURE PAGE TO
                            JAMES RIVER COAL COMPANY
                           INDEMNIFICATION AGREEMENT]



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