EXHIBIT
        10.4


    

     

    FORM
      OF DIRECTOR INDEMNIFICATION AGREEMENT

    


    This
      Indemnification Agreement (this “Agreement”)
      dated
      the ____ day of October 2007, by and between United Fuel & Energy
      Corporation, a Nevada corporation (the “Company”),
      and
      ______________________, an individual (“Indemnitee”).

    


    RECITALS

    


    A. Competent
      and experienced persons are reluctant to serve or to continue to serve as
      directors and officers of corporations or in other capacities unless they are
      provided with adequate protection through insurance or indemnification (or
      both)
      against claims against them arising out of their service and activities on
      behalf of the corporation.

    


    B. The
      current uncertainties relating to the availability of adequate insurance have
      increased the difficulty for corporations of attracting and retaining competent
      and experienced persons to serve in such capacity.

    


    C. The
      Board
      of Directors of the Company (the “Board
      of Directors”)
      has
      determined that the continuation of present trends in litigation will make
      it
      more difficult to attract and retain competent and experienced persons to serve
      as directors and officers of the Company, that this situation is detrimental
      to
      the best interests of the Company’s stockholders and that the Company should act
      to assure such persons that there will be increased certainty of adequate
      protection in the future.

    


    D. As
      a
      supplement to and in the furtherance of the Company’s Articles of Incorporation,
      as amended (the “Articles”),
      and
      Bylaws, as amended (the “Bylaws”),
      it is
      reasonable, prudent, desirable and necessary for the Company contractually
      to
      obligate itself to indemnify, and to pay in advance expenses on behalf of
      directors to the fullest extent permitted by law so that they will serve or
      continue to serve the Company free from concern that they will not be so
      indemnified and that their expenses will not be so paid in advance;

    


    E. This
      Agreement is not a substitute for, nor does it diminish or abrogate any rights
      of Indemnitee under, the Articles and the Bylaws or any resolutions adopted
      pursuant thereto (including any contractual rights of Indemnitee that may
      exist).

    


    F. Indemnitee
      is a director of the Company and his willingness to continue to serve in such
      capacity is predicated, in substantial part, upon the Company’s willingness to
      indemnify him to the fullest extent permitted by the laws of the State of Nevada
      and upon the other undertakings set forth in this Agreement.

    


    AGREEMENT

    


    NOW,
      THEREFORE,
      in
      consideration of the premises and covenants contained herein, the Company and
      Indemnitee hereby agree as follows:

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    
ARTICLE
      1

    CERTAIN
      DEFINITIONS

    


    Capitalized
      terms used but not otherwise defined in this Agreement have the meanings set
      forth below:

    


    “Corporate
      Status”
means
      the status of a person who is or was a director, officer, employee, partner,
      member, manager, trustee, fiduciary or agent of the Company or of any other
      Enterprise which such person is or was serving at the request of the Company.
      In
      addition to any service at the actual request of the Company, Indemnitee will
      be
      deemed, for purposes of this Agreement, to be serving or to have served at
      the
      request of the Company as a director, officer, employee, partner, member,
      manager, trustee, fiduciary or agent of another Enterprise if Indemnitee is
      or
      was serving as a director, officer, employee, partner, member, manager,
      fiduciary, trustee or agent of such Enterprise and (i) such Enterprise is or
      at
      the time of such service was a Controlled Affiliate, (ii) such Enterprise is
      or
      at the time of such service was an employee benefit plan (or related trust)
      sponsored on maintained by the Company or a Controlled Affiliate or (iii) the
      Company or a Controlled Affiliate directly or indirectly caused Indemnitee
      to be
      nominated, elected, appointed, designated, employed, engaged or selected to
      serve in such capacity.

    


    “Controlled
      Affiliate”
means
      any corporation, limited liability company, partnership, joint venture, trust
      or
      other Enterprise, whether or not for profit, that is directly or indirectly
      controlled by the Company. For purposes of this definition, the term “control”
means the possession, directly or indirectly, of the power to direct, or cause
      the direction of, the management or policies of an Enterprise, whether through
      the ownership of voting securities, through other voting rights, by contract
      or
      otherwise; provided,
      however,
      that
      direct or indirect beneficial ownership of capital stock or other interests
      in
      an Enterprise entitling the holder to cast 30% or more of the total number
      of
      votes generally entitled to be cast in the election of directors (or persons
      performing comparable functions) of such Enterprise will be deemed to constitute
      “control” for purposes of this definition. 

    


    “Disinterested
      Director”
means
      a
      director of the Company who is not and was not a party to the Proceeding in
      respect of which indemnification is sought by Indemnitee.

    


    “Enterprise”
means
      the Company and any other corporation, partnership, limited liability company,
      joint venture, employee benefit plan, trust or other entity or other enterprise
      of which Indemnitee is or was serving at the request of the Company in a
      Corporate Status.

    


    “Expenses”
means
      all attorney’s fees, disbursements and retainers, court costs, transcript costs,
      fees of experts, witness fees, travel expenses, duplicating costs, printing
      and
      binding costs, telephone charges, postage, fax transmission charges, secretarial
      services, delivery service fees and all other disbursements or expenses paid
      or
      incurred in connection with prosecuting, defending, preparing to prosecute
      or
      defend, investigating, being or preparing to be a witness in, or otherwise
      participating in, a Proceeding, or in connection with seeking indemnification
      under this Agreement. Expenses will also include Expenses paid or incurred
      in
      connection with any appeal resulting from any Proceeding, including the premium,
      security for and other costs relating to any appeal bond or its equivalent.
      Expenses, however, will not include amounts paid in settlement by Indemnitee
      or
      the amount of judgments or fines against Indemnitee. 

     

    
      
        
        

      

      
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    “Independent
      Counsel”
means
      an attorney or firm of attorneys that is experienced in matters of corporation
      law and neither currently is, nor in the past five (5) years has been, retained
      to represent: (i) the Company or Indemnitee in any matter material to either
      such party (other than with respect to matters concerning the Indemnitee under
      this Agreement and/or the indemnification provisions of the Articles or Bylaws,
      or of other indemnitees under similar indemnification agreements), or (ii)
      any
      other party to the Proceeding giving rise to a claim for indemnification
      hereunder. Notwithstanding the foregoing, the term “Independent Counsel” does
      not include any person who, under the applicable standards of professional
      conduct then prevailing, would have a conflict of interest in representing
      either the Company or Indemnitee in an action to determine Indemnitee’s rights
      under this Agreement. 

    


    “Losses”
means
      any loss, liability, judgments, damages, amounts paid in settlement, fines
      (including excise taxes and penalties assessed with respect to employee benefit
      plans), penalties (whether civil, criminal or otherwise) and all interest,
      assessments and other charges paid or payable in connection with or in respect
      of any of the foregoing.

    


    “Proceeding”
means
      any threatened, pending or completed action, suit, claim, demand, arbitration,
      alternate dispute resolution mechanism, investigation, inquiry, administrative
      hearing or any other actual, threatened or completed proceeding, including
      any
      and all appeals, whether brought by or in the right of the Company or otherwise,
      whether civil, criminal, administrative or investigative, whether formal or
      informal, and in each case whether or not commenced prior to the date of this
      Agreement, in which Indemnitee was, is or will be involved as a party or
      otherwise, by reason of or relating to Indemnitee’s Corporate Status and by
      reason of or relating to either (i) any action or alleged action taken by
      Indemnitee (or failure or alleged failure to act) or of any action or alleged
      action (or failure or alleged failure to act) on Indemnitee’s part, while acting
      in his Corporate Status or (ii) the fact that Indemnitee is or was serving
      at
      the request of the Company as director, officer, employee, partner, member,
      manager, trustee, fiduciary or agent of another Enterprise, in each case whether
      or not serving in such capacity at the time any Loss or Expense is paid or
      incurred for which indemnification or advancement of Expenses can be provided
      under this Agreement, except one initiated by Indemnitee to enforce his rights
      under this Agreement. For purposes of this definition, the term “threatened”
will be deemed to include Indemnitee’s good faith belief that a claim or other
      assertion may lead to institution of a Proceeding. 

    


    References
      to “serving
      at the request of the Company”
include
      any service as a director, officer, employee or agent of the Company which
      imposes duties on, or involves services by, such director, officer, employee
      or
      agent with respect to any employee benefit plan, its participants or
      beneficiaries; and a person who acted in good faith and in a manner he or she
      reasonably believed to be in the best interests of the participants and
      beneficiaries of an employee benefit plan will be deemed to have acted in a
      manner “not
      opposed to the best interests of the Company”
as
      referred to under applicable law or in this Agreement. 

     

    
      
        
        

      

      
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    ARTICLE
      2

    SERVICES
      TO THE COMPANY

    


    2.1 Services
      to the Company.
      Indemnitee agrees to serve as a director of the Company. Indemnitee may at
      any
      time and for any reason resign from such position (subject to any other
      contractual obligation or any obligation imposed by operation of law), in which
      event the Company will have no obligation under this Agreement to continue
      Indemnitee in such position. This Agreement will not be construed as giving
      Indemnitee any right to be retained in the employ of the Company (or any other
      Enterprise). 

    


    ARTICLE
      3

    INDEMNIFICATION

    


    3.1 Company
      Indemnification.
      Except
      as otherwise provided in this Article 3,
      if
      Indemnitee was, is or becomes a party to, or was or is threatened to be made
      a
      party to, or was or is otherwise involved in, any Proceeding, the Company will
      indemnify and hold harmless Indemnitee to the fullest extent permitted by the
      Articles, Bylaws and applicable law, as the same exists or may hereafter be
      amended, interpreted or replaced (but in the case of any such amendment,
      interpretation or replacement, only to the extent that such amendment,
      interpretation or replacement permits the Company to provide broader
      indemnification rights than were permitted prior thereto), against any and
      all
      Expenses and Losses, and any federal, state, local or foreign taxes imposed
      as a
      result of the actual or deemed receipt of any payments under this Agreement,
      that are actually and reasonably paid or incurred by Indemnitee in connection
      with such Proceeding. For purposes of this Agreement, the meaning of the phrase
      “to
      the fullest extent permitted by law”
will
      include to the fullest extent permitted by the Nevada Revised Statues, as
      amended (the “NRS”),
      with
      respect to such matters.

     

    3.2 Mandatory
      Indemnification if Indemnitee is Wholly or Partly
      Successful.
      Notwithstanding any other provision of this Agreement (other than Section 6.9),
      to the
      extent that Indemnitee has been successful, on the merits or otherwise, in
      defense of any Proceeding or any part thereof, the Company will indemnify
      Indemnitee against all Expenses that are actually and reasonably paid or
      incurred by Indemnitee in connection therewith. If Indemnitee is not wholly
      successful in such Proceeding, but is successful, on the merits or otherwise,
      as
      to one or more but fewer than all claims, issues or matters in such Proceeding,
      the Company will indemnify and hold harmless Indemnitee against all Expenses
      paid or incurred by Indemnitee in connection with each successfully resolved
      claim, issue or matter on which Indemnitee was successful. For purposes of
      this
Section 3.2,
      the
      termination of any Proceeding, or any claim, issue or matter in such Proceeding,
      by dismissal with or without prejudice will be deemed to be a successful result
      as to such Proceeding, claim, issue or matter.

    


    3.3 Indemnification
      for Expenses of a Witness.
      Notwithstanding any other provision of this Agreement, to the extent that
      Indemnitee is, by reason of his Corporate Status, a witness in any Proceeding
      to
      which Indemnitee is not a party, the Company will indemnify Indemnitee against
      all Expenses actually and reasonably paid or incurred by Indemnitee on his
      behalf in connection therewith.

     

    
      
        
        

      

      
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    3.4 Exclusions.
      Notwithstanding any other provision of this Agreement, the Company will not
      be
      obligated under this Agreement to provide indemnification in connection with
      the
      following:

    


    (a) Any
      Proceeding (or part of any Proceeding) initiated or brought voluntarily by
      Indemnitee against the Company or its directors, officers, employees or other
      indemnities, unless the Board of Directors has authorized or consented to the
      initiation of the Proceeding (or such part of any Proceeding); provided,
      however,
      that
      nothing in this Section 3.4(a)
      shall
      limit the right of Indemnitee to be indemnified under Section 8.4.

    


    (b) For
      an
      accounting of profits made from the purchase and sale (or sale and purchase)
      by
      Indemnitee of securities of the Company within the meaning of Section 16(b)
      of the Exchange Act or any similar successor statute.

    


    ARTICLE
      4

    ADVANCEMENT
      OF EXPENSES

     

    4.1 Expense
      Advances.
      Except
      as set forth in Section 4.2,
      the
      Company will, if requested by Indemnitee, advance, to the fullest extent
      permitted by law, to Indemnitee (hereinafter an “Expense
      Advance”)
      any
      and all Expenses actually and reasonably paid or incurred by Indemnitee in
      connection with any Proceeding (whether prior to or after its final
      disposition). Indemnitee’s right to each Expense Advance will not be subject to
      the satisfaction of any standard of conduct and will be made without regard
      to
      Indemnitee’s ultimate entitlement to indemnification under the other provisions
      of this Agreement, or under provisions of the Articles or Bylaws or otherwise.
      Each Expense Advance will be unsecured and interest free and will be made by
      the
      Company without regard to Indemnitee’s ability to repay the Expense Advance;
provided,
      however,
      that,
      if applicable law requires, an Expense Advance will be made only upon delivery
      to the Company of an undertaking (hereinafter an “Undertaking”),
      by or
      on behalf of Indemnitee, to repay such Expense Advance if it is ultimately
      determined, by final decision by a court or arbitrator, as applicable, from
      which there is no further right to appeal, that Indemnitee is not entitled
      to be
      indemnified for such Expenses under the Articles, Bylaws, the NRS, this
      Agreement or otherwise. An Expense eligible for an Expense Advance will include
      any and all reasonable Expenses incurred pursuing an action to enforce the
      right
      of advancement provided for in this Article 4,
      including Expenses incurred preparing and forwarding statements to the Company
      to support the Expense Advances claimed.

     

    4.2 Exclusions.
      Indemnitee will not be entitled to any Expense Advance in connection with any
      of
      the matters for which indemnity is excluded pursuant to Section 3.4.

     

    4.3 Timing.
      An
      Expense Advance pursuant to Section 4.1
      will be
      made within five business days after the receipt by the Company of a written
      statement or statements from Indemnitee requesting such Expense Advance (which
      statement or statements will include, if requested by the Company, reasonable
      detail underlying the Expenses for which the Expense Advance is requested),
      whether such request is made prior to or after final disposition of such
      Proceeding. Such request must be accompanied by or preceded by the Undertaking,
      if then required by the NRS or any other applicable law.

     

    
      
        
        

      

      
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    ARTICLE
      5

    CONTRIBUTION
      IN THE EVENT OF JOINT LIABILITY

    


    5.1 Contribution
      by Company.
      To the
      fullest extent permitted by law, if the indemnification provided for in this
      Agreement is unavailable to Indemnitee for any reason whatsoever, the Company,
      in lieu of indemnifying Indemnitee, will contribute to the amount of Expenses
      and Losses actually and reasonably incurred or paid by Indemnitee in connection
      with any Proceeding in proportion to the relative benefits received by the
      Company and all officers, directors and employees of the Company other than
      Indemnitee who are jointly liable with Indemnitee (or would be if joined in
      such
      Proceeding), on the one hand, and Indemnitee, on the other hand, from the
      transaction from which such Proceeding arose; provided,
      however,
      that
      the proportion determined on the basis of relative benefit may, to the extent
      necessary to conform to law, be further adjusted by reference to the relative
      fault of the Company and all officers, directors and employees of the Company
      other than Indemnitee who are jointly liable with Indemnitee (or would be if
      joined in such Proceeding), on the one hand, and Indemnitee, on the other hand,
      in connection with the events that resulted in such Expenses and Losses, as
      well
      as any other equitable considerations which applicable law may require to be
      considered. The relative fault of the Company and all officers, directors and
      employees of the Company other than Indemnitee who are jointly liable with
      Indemnitee (or would be if joined in such Proceeding), on the one hand, and
      Indemnitee, on the other hand, will be determined by reference to, among other
      things, the degree to which their actions were motivated by intent to gain
      personal profit or advantage, the degree to which their liability is primary
      or
      secondary, and the degree to which their conduct was active or passive.


    


    5.2 Indemnification
      for Contribution Claims by Others.
      To the
      fullest extent permitted by law, the Company will fully indemnify and hold
      Indemnitee harmless from any claims of contribution which may be brought by
      other officers, directors or employees of the Company who may be jointly liable
      with Indemnitee for any Loss or Expense arising from a Proceeding.

    


    ARTICLE
      6

    PROCEDURES
      AND PRESUMPTIONS FOR THE 

    DETERMINATION
      OF ENTITLEMENT TO INDEMNIFICATION

     

    6.1 Notification
      of Claims; Request for Indemnification.
      Indemnitee agrees to notify promptly the Company in writing of any claim made
      against Indemnitee for which indemnification will or could be sought under
      this
      Agreement; provided,
      however,
      that a
      delay in giving such notice will not deprive Indemnitee of any right to be
      indemnified under this Agreement unless, and then only to the extent that,
      the
      Company did not otherwise learn of the Proceeding and such delay is materially
      prejudicial to the Company’s ability to defend such Proceeding; and,
provided,
      further,
      that
      notice will be deemed to have been given without any action on the part of
      Indemnitee in the event the Company is a party to the same Proceeding. The
      omission to notify the Company will not relieve the Company from any liability
      for indemnification which it may have to Indemnitee otherwise than under this
      Agreement. Indemnitee may deliver to the Company a written request to have
      the
      Company indemnify and hold harmless Indemnitee in accordance with this
      Agreement. Subject to Section 6.9,
      such
      request may be delivered from time to time and at such time(s) as Indemnitee
      deems appropriate in his sole discretion. Following such a written request
      for
      indemnification, Indemnitee’s entitlement to indemnification shall be determined
      according to Section 6.2.
      The
      Secretary of the Company will, promptly upon receipt of such a request for
      indemnification, advise the Board of Directors in writing that Indemnitee has
      requested indemnification. The Company will be entitled to participate in any
      Proceeding at its own expense.

     

    
      
        
        

      

      
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    6.2 Determination
      of Right to Indemnification.
      Upon
      written request by Indemnitee for indemnification pursuant to Section 6.1
      hereof
      with respect to any Proceeding, a determination, if, but only if, required
      by
      applicable law, with respect to Indemnitee’s entitlement thereto will be made by
      one of the following, at the election of Indemnitee: (1) so long as there are
      Disinterested Directors with respect to such Proceeding, a majority vote of
      the
      Disinterested Directors, even though less than a quorum of the Board of
      Directors, (2) so long as there are Disinterested Directors with respect to
      such
      Proceeding, a committee of such Disinterested Directors designated by a majority
      vote of such Disinterested Directors, even though less than a quorum of the
      Board of Directors or (3) Independent Counsel in a written opinion delivered
      to
      the Board of Directors, a copy of which will also be delivered to Indemnitee.
      The election by Indemnitee to use a particular person, persons or entity to
      make
      such determination is to be included in the written request for indemnification
      submitted by Indemnitee (and if no election is made in the request it will
      be
      assumed that Indemnitee has elected the Independent Counsel to make such
      determination). The person, persons or entity chosen to make a determination
      under this Agreement of the Indemnitee’s entitlement to indemnification will act
      reasonably and in good faith in making such determination.
      

     

    6.3 Selection
      of Independent Counsel.
      If the
      determination of entitlement to indemnification pursuant to Section 6.2
      will be
      made by an Independent Counsel, the Independent Counsel will be selected as
      provided in this Section 6.3.
      The
      Independent Counsel will be selected by Indemnitee (unless Indemnitee requests
      that such selection be made by the Board of Directors, in which event the
      immediately following sentence will apply) and Indemnitee will give written
      notice to the Company advising it of the identity of the Independent Counsel
      so
      selected. If the Independent Counsel is selected by the Board of Directors,
      the
      Company will give written notice to Indemnitee advising him of the identity
      of
      the Independent Counsel so selected. In either event, Indemnitee or the Company,
      as the case may be, may, within ten days after such written notice of selection
      is given, deliver to the Company or to Indemnitee, as the case may be, a written
      objection to such selection; provided,
      however,
      that
      such objection may be asserted only on the ground that the Independent Counsel
      so selected does not meet the requirements of “Independent Counsel” as defined
      in this Agreement, and the objection will set forth with particularity the
      factual basis of such assertion. Absent a proper and timely objection, the
      person so selected will act as Independent Counsel. If a written objection
      is
      made and substantiated, the Independent Counsel selected may not serve as
      Independent Counsel unless and until such objection is withdrawn or a court
      has
      determined that such objection is without merit. If, within 30 days after
      submission by Indemnitee of a written request for indemnification pursuant
      to
Section 6.1,
      no
      Independent Counsel is selected, or an Independent Counsel for which an
      objection thereto has been properly made remains unresolved, either the Company
      or Indemnitee may petition the appropriate court of the State of Nevada or
      other
      court of competent jurisdiction for resolution of any objection which has been
      made by the Company or Indemnitee to the other’s selection of Independent
      Counsel and/or for the appointment as Independent Counsel of a person selected
      by the court or by such other person as the court may designate, and the person
      with respect to whom all objections are so resolved or the person so appointed
      will act as Independent Counsel under Section 6.2.
      The
      Company will pay any and all fees and expenses incurred by such Independent
      Counsel in connection with acting pursuant to Section 6.2
      hereof,
      and the Company will pay all fees and expenses incident to the procedures of
      this Section 6.3,
      regardless of the manner in which such Independent Counsel was selected or
      appointed. 

     

    
      
        
        

      

      
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    6.4 Burden
      of Proof.
      In
      making a determination with respect to entitlement to indemnification hereunder,
      the person, persons or entity making such determination will presume that
      Indemnitee is entitled to indemnification under this Agreement. Anyone seeking
      to overcome this presumption will have the burden of proof and the burden of
      persuasion, by clear and convincing evidence. In making a determination with
      respect to entitlement to indemnification hereunder which under this Agreement,
      the Articles, Bylaws or applicable law requires a determination of Indemnitee’s
      good faith and/or whether Indemnitee acted in a manner which he or she
      reasonably believed to be in or not opposed to the best interests of the
      Company, the person, persons or entity making such determination will presume
      that Indemnitee has at all times acted in good faith and in a manner he or
      she
      reasonably believed to be in or not opposed to the best interests of the
      Company. Anyone seeking to overcome this presumption will have the burden of
      proof and the burden of persuasion, by clear and convincing evidence. Indemnitee
      will be deemed to have acted in good faith if Indemnitee’s action with respect
      to a particular Enterprise is based on the records or books of account of such
      Enterprise, including financial statements, or on information supplied to
      Indemnitee by the officers of such Enterprise in the course of their duties,
      or
      on the advice of legal counsel for such Enterprise or on information or records
      given or reports made to such Enterprise by an independent certified public
      accountant or by an appraiser or other expert selected by such Enterprise;
      provided,
      however
      this
      sentence will not be deemed to limit in any way the other circumstances in
      which
      Indemnitee may be deemed to have met such standard of conduct. In addition,
      the
      knowledge and/or actions, or failure to act, of any other director, officer,
      agent or employee of such Enterprise will not be imputed to Indemnitee for
      purposes of determining the right to indemnification under this
      Agreement.

    


    6.5 No
      Presumption in Absence of a Determination or As Result of an Adverse
      Determination; Presumption Regarding Success.
      Neither
      the failure of any person, persons or entity chosen to make a determination
      as
      to whether Indemnitee has met any particular standard of conduct or had any
      particular belief to make such determination, nor an actual determination by
      such person, persons or entity that Indemnitee has not met such standard of
      conduct or did not have such belief, prior to or after the commencement of
      legal
      proceedings by Indemnitee to secure a judicial determination that Indemnitee
      should be indemnified under this Agreement under applicable law, will 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
      addition, the termination of any Proceeding by judgment, order, settlement
      (whether with or without court approval) or conviction, or upon a plea of nolo
      contendere, or its equivalent, will 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 applicable law. In the event that any Proceeding to which
      Indemnitee is a party is resolved in any manner other than by final adverse
      judgment (as to which all rights of appeal therefrom have been exhausted or
      lapsed) against Indemnitee (including, without limitation, settlement of such
      Proceeding with or without payment of money or other consideration) it will
      be
      presumed that Indemnitee has been successful on the merits or otherwise in
      such
      Proceeding. Anyone seeking to overcome this presumption will have the burden
      of
      proof and the burden of persuasion, by clear and convincing
      evidence.

     

    
      
        
        

      

      
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    6.6 Timing
      of Determination.
      The
      Company will use its reasonable best efforts to cause any determination required
      to be made pursuant to Section 6.2
      to be
      made as promptly as practicable after Indemnitee has submitted a written request
      for indemnification pursuant to Section 6.1.
      If the
      person, persons or entity chosen to make a determination does not make such
      determination within 30 days after the later of the date (a) the Company
      receives Indemnitee’s request for indemnification pursuant to Section 6.1
      and (b)
      on which an Independent Counsel is selected pursuant to Section 6.3,
      if
      applicable (and all objections to such person, if any, have been resolved),
      the
      requisite determination of entitlement to indemnification will be deemed to
      have
      been made and Indemnitee will be entitled to such indemnification, so long
      as
      (i) Indemnitee has fulfilled his obligations pursuant to Section 6.8
      and (ii)
      such indemnification is not prohibited under applicable law; provided,
      however,
      that
      such 30 day period may be extended for a reasonable time, not to exceed an
      additional 15 days, if the person, persons or entity making the determination
      with respect to entitlement to indemnification in good faith requires such
      additional time for the obtaining of or evaluating of documentation and/or
      information relating thereto.

     

    6.7 Timing
      of Payments.
      All
      payments of Expenses, including any Expense Advance, and other amounts by the
      Company to the Indemnitee pursuant to this Agreement will be made as soon as
      practicable after a written request or demand therefor by Indemnitee is
      presented to the Company, but in no event later than thirty (30) days after
      (i)
      such demand is presented or (ii) such later date as a determination of
      entitlement to indemnification is made in accordance with Section 6.6,
      if
      applicable; provided,
      however,
      that an
      Expense Advance will be made within the time provided in Section 4.3
      hereof.

     

    6.8 Cooperation.
      Indemnitee will cooperate with the person, persons or entity making a
      determination with respect to Indemnitee’s entitlement to indemnification,
      including providing to such person, persons or entity, upon reasonable advance
      request, any documentation or information which is not privileged or otherwise
      protected from disclosure and which is reasonably available to Indemnitee and
      reasonably necessary to such determination. Any Expenses incurred by Indemnitee
      in so cooperating with the person, persons or entity making such determination
      will be borne by the Company (irrespective of the determination as to
      Indemnitee’s entitlement to indemnification) and the Company will indemnify
      Indemnitee therefor and will hold Indemnitee harmless therefrom.

     

    6.9 Time
      for Submission of Request.
      Indemnitee will be required to submit any request for Indemnification pursuant
      to this Article 6
      within a
      reasonable time, not to exceed two years, after any judgment, order, settlement,
      dismissal, arbitration award, conviction, acceptance of a plea of nolo
      contendere (or its equivalent) or other full or partial final determination
      or
      disposition of the Proceeding (with the latest date of the occurrence of any
      such event to be considered the commencement of the two year
      period). 

     

    
      
        
        

      

      
        9

        
          

        

      

      
        
        

      

    

     

    ARTICLE
      7

    LIABILITY
      INSURANCE

     

    7.1 Company
      Insurance.
      Subject
      to Section 7.3,
      the
      Company will obtain and maintain a policy or policies of insurance with one
      or
      more reputable insurance companies providing Indemnitee with coverage in such
      amount as will be determined by the Board of Directors for Losses and Expenses
      paid or incurred by Indemnitee as a result of acts or omissions of Indemnitee
      in
      his Corporate Status, and to ensure the Company’s performance of its
      indemnification obligations under this Agreement; provided,
      however,
      in all
      policies of director and officer liability insurance obtained by the Company,
      Indemnitee will be named as an insured party in such manner as to provide
      Indemnitee with the same rights and benefits as are afforded to the most
      favorably insured directors or officers, as applicable, of the Company under
      such policies. Any reductions to the amount of director and officer liability
      insurance coverage maintained by the Company as of the date hereof will be
      subject to the approval of the Board of Directors.

    


    7.2 Notice
      to Insurers.
      If, at
      the time of receipt by the Company of a notice from any source of a Proceeding
      as to which Indemnitee is a party or participant, the Company will give prompt
      notice of such Proceeding to the insurers in accordance with the procedures
      set
      forth in the respective policies, and the Company will provide Indemnitee with
      a
      copy of such notice and copies of all subsequent correspondence between the
      Company and such insurers related thereto. The Company will thereafter take
      all
      necessary or desirable actions to cause such insurers to pay, on behalf of
      Indemnitee, all amounts payable as a result of such Proceeding in accordance
      with the terms of such policies. 

     

    7.3 Insurance
      Not Required.
      Notwithstanding Section 7.1,
      the
      Company will have no obligation to obtain or maintain the insurance contemplated
      by Section 7.1
      if the
      Board of Directors determines in good faith that such insurance is not
      reasonably available, if the premium costs for such insurance are
      disproportionately high compared to the amount of coverage provided, or if
      the
      coverage provided by such insurance is limited by exclusions so as to provide
      an
      insufficient benefit. The Company will promptly notify Indemnitee of any such
      determination not to provide insurance coverage.

     

    ARTICLE
      8

    REMEDIES
      OF INDEMNITEE

    


    8.1 Action
      by Indemnitee.
      In the
      event that (i) a determination is made pursuant to Article 6
      of this
      Agreement that Indemnitee is not entitled to indemnification under this
      Agreement, (ii) an Expense Advance is not timely made pursuant to Section 4.3
      of this
      Agreement, (iii) no determination of entitlement to indemnification is made
      within the applicable time periods specified in Section 6.6
      or (iv)
      payment of indemnified amounts is not made within the applicable time periods
      specified in Section 6.7,
      Indemnitee will be entitled to an adjudication in an appropriate court of the
      State of Nevada, or in any other court of competent jurisdiction, of his
      entitlement to such indemnification or payment of an Expense Advance.
      Alternatively, Indemnitee, at Indemnitee’s option, may seek an award in
      arbitration to be conducted by a single arbitrator pursuant to the Commercial
      Arbitration Rules of the American Arbitration Association. The provisions of
      Nevada law (without regard to its conflict of laws rules) will apply to any
      such
      arbitration. The Company will not oppose Indemnitee’s right to seek any such
      adjudication or award in arbitration. 

     

    
      
        
        

      

      
        10

        
          

        

      

      
        
        

      

    

     

    8.2 De
      Novo Review
      if Prior Adverse Determination.
      In the
      event that a determination is made pursuant to Article 6
      that
      Indemnitee is not entitled to indemnification, any judicial proceeding or
      arbitration commenced pursuant to this Article 8
      will be
      conducted in all respects as a de
      novo
      trial or
      arbitration, as applicable, on the merits and Indemnitee will not be prejudiced
      by reason of that adverse determination. In any judicial proceeding or
      arbitration commenced pursuant to this Article 8,
      Indemnitee will be presumed to be entitled to indemnification under this
      Agreement, the Company will have the burden of proving Indemnitee is not
      entitled to indemnification and the Company may not refer to or introduce
      evidence of any determination pursuant to Article 6
      adverse
      to Indemnitee for any purpose. If Indemnitee commences a judicial proceeding
      or
      arbitration pursuant to this Article 8,
      Indemnitee will not be required to reimburse the Company for any Expense Advance
      made pursuant to Article 4
      until a
      final determination is made with respect to Indemnitee’s entitlement to
      indemnification (as to which all rights of appeal have been exhausted or
      lapsed). 

    


    8.3 Company
      Bound by Favorable Determination by Reviewing Party.
      If a
      determination is made that Indemnitee is entitled to indemnification pursuant
      to
Article 6,
      the
      Company will be bound by such determination in any judicial proceeding or
      arbitration commenced pursuant to this Article 8,
      absent
      (i) a misstatement by Indemnitee of a material fact or an omission of a material
      fact necessary to make Indemnitee’s statements in connection with the request
      for indemnification not materially misleading or (ii) a prohibition of such
      indemnification under law.

    


    8.4 Company
      Bears Expenses if Indemnitee Seeks Adjudication.
      In the
      event that Indemnitee, pursuant to this Article 8,
      seeks a
      judicial adjudication or arbitration of his rights under, or to recover damages
      for breach of, this Agreement, any other agreement for indemnification, the
      indemnification or advancement of expenses provisions in the Articles or Bylaws,
      payment of Expenses in advance or contribution hereunder or to recover under
      any
      director and officer liability insurance policies maintained by the Company,
      the
      Company will, to the fullest extent permitted by law, indemnify and hold
      harmless Indemnitee against any and all Expenses which are paid or incurred
      by
      Indemnitee in connection with such judicial adjudication or arbitration,
      regardless of whether Indemnitee ultimately is determined to be entitled to
      such
      indemnification, payment of Expenses in advance or contribution or insurance
      recovery. In addition, if requested by Indemnitee, the Company will (within
      five
      days after receipt by the Company of the written request therefor), pay as
      an
      Expense Advance such Expenses, to the fullest extent permitted by law.


    


    8.5 Company
      Bound by Provisions of this Agreement.
      The
      Company will be precluded from asserting in any judicial or arbitration
      proceeding commenced pursuant to this Article 8
      that the
      procedures and presumptions of this Agreement are not valid, binding and
      enforceable and will stipulate in any such judicial or arbitration proceeding
      that the Company is bound by all the provisions of this Agreement.

     

    
      
        
        

      

      
        11

        
          

        

      

      
        
        

      

    

     

    ARTICLE
      9

    NON-EXCLUSIVITY,
      SUBROGATION; NO DUPLICATIVE PAYMENTS; 

    MORE
      FAVORABLE TERMS

    


    9.1 Non-Exclusivity.
      The
      rights of indemnification and to receive Expense Advances as provided by this
      Agreement will not be deemed exclusive of any other rights to which Indemnitee
      may at any time be entitled under applicable law, the Articles, the Bylaws,
      any
      agreement, a vote of stockholders, a resolution of the directors or otherwise.
      To the extent Indemnitee otherwise would have any greater right to
      indemnification or payment of any advancement of Expenses under any other
      provisions under applicable law, the Articles, Bylaws, any agreement, vote
      of
      stockholders, a resolution of directors or otherwise, Indemnitee will be
      entitled under this Agreement to such greater right. No amendment, alteration
      or
      repeal of this Agreement or of any provision hereof limits or restricts any
      right of Indemnitee under this Agreement in respect of any action taken or
      omitted by such Indemnitee prior to such amendment, alteration or repeal. To
      the
      extent that a change in the NRS, whether by statute or judicial decision,
      permits greater indemnification than would be afforded currently under the
      Articles, Bylaws and this Agreement, it is the intent of the parties hereto
      that
      Indemnitee enjoy by this Agreement the greater benefits so afforded by such
      change. No right or remedy herein conferred is intended to be exclusive of
      any
      other right or remedy, and every other right and remedy will be cumulative
      and
      in addition to every other right and remedy given hereunder or now or hereafter
      existing at law or in equity or otherwise. The assertion or employment of any
      right or remedy hereunder, or otherwise, will not prevent the concurrent
      assertion or employment of any other right or remedy.

    


    9.2 Subrogation.
      In the
      event of any payment by the Company under this Agreement, the Company will
      be
      subrogated to the extent of such payment to all of the rights of recovery of
      Indemnitee with respect thereto and Indemnitee will execute all papers required
      and take all action necessary to secure such rights, including execution of
      such
      documents as are necessary to enable the Company to bring suit to enforce such
      rights (it being understood that all of Indemnitee’s reasonable Expenses related
      thereto will be borne by the Company).

    


    9.3 No
      Duplicative Payments.
      The
      Company will not be liable under this Agreement to make any payment of amounts
      otherwise indemnifiable (or any Expense for which advancement is provided)
      hereunder if and to the extent that Indemnitee has otherwise actually received
      such payment under any insurance policy, contract, agreement or otherwise.
      The
      Company’s obligation to indemnify or advance Expenses hereunder to Indemnitee in
      respect of Proceedings relating to Indemnitee’s service at the request of the
      Company as a director, officer, employee, partner, member, manager, trustee,
      fiduciary or agent of any other Enterprise will be reduced by any amount
      Indemnitee has actually received as indemnification or advancement of Expenses
      from such other Enterprise. 

    


    9.4 More
      Favorable Terms.
      In the
      event the Company enters into an indemnification agreement with another officer
      or director, as the case may be, containing terms more favorable to the
      indemnitee thereof than the terms contained herein (and absent special
      circumstances justifying such more favorable terms), Indemnitee will be afforded
      the benefit of such more favorable terms and such more favorable terms will
      be
      deemed incorporated by reference herein as if set forth in full herein. As
      promptly as practicable following the execution thereof, the Company will (a)
      send a copy of the agreement containing more favorable terms to Indemnitee,
      and
      (b) prepare, execute and deliver to Indemnitee an amendment to this Agreement
      containing such more favorable terms.

     

    
      
        
        

      

      
        12

        
          

        

      

      
        
        

      

    

     

    ARTICLE
      10

    DEFENSE
      OF PROCEEDINGS

     

    10.1 Company
      Assuming the Defense.
      Subject
      to Section 10.3
      below,
      in the event the Company is obligated to pay in advance the Expenses of any
      Proceeding pursuant to Article 4,
      the
      Company will be entitled, by written notice to Indemnitee, to assume the defense
      of such Proceeding, with counsel approved by Indemnitee, which approval will
      not
      be unreasonably withheld. The Company will identify the counsel it proposes
      to
      employ in connection with such defense as part of the written notice sent to
      Indemnitee notifying Indemnitee of the Company’s election to assume such
      defense, and Indemnitee will be required, within ten days following Indemnitee’s
      receipt of such notice, to inform the Company of its approval of such counsel
      or, if it has objections, the reasons therefor. If such objections cannot be
      resolved by the parties, the Company will identify alternative counsel, which
      counsel will also be subject to approval by Indemnitee in accordance with the
      procedure described in the prior sentence.

     

    10.2 Right
      of Indemnitee to Employ Counsel.
      Following approval of counsel by Indemnitee pursuant to Section 10.1
      and
      retention of such counsel by the Company, the Company will not be liable to
      Indemnitee under this Agreement for any fees and expenses of counsel
      subsequently incurred by Indemnitee with respect to the same Proceeding;
provided,
      however,
      that
      (a) Indemnitee has the right to employ counsel in any such Proceeding at
      Indemnitee’s expense and (b) the Company will be required to pay the fees and
      expenses of Indemnitee’s counsel if (i) the employment of counsel by Indemnitee
      has been previously authorized by the Company, (ii) Indemnitee reasonably
      concludes that there is an actual or potential conflict between the Company
      (or
      any other person or persons included in a joint defense) and Indemnitee in
      the
      conduct of such defense or representation by such counsel retained by the
      Company or (iii) the Company does not continue to retain the counsel approved
      by
      Indemnitee. 

     

    
      
        
        

      

      
        13

        
          

        

      

      
        
        

      

    

     

    10.3 Company
      Not Entitled to Assume Defense.
      Notwithstanding Section 10.1,
      the
      Company will not be entitled to assume the defense of any Proceeding brought
      by
      or on behalf of the Company or any Proceeding as to which Indemnitee has
      reasonably made the conclusion provided for in Section 10.2(b)(ii).

     

    ARTICLE
      11

    SETTLEMENT

    


    11.1 Company
      Bound by Provisions of this Agreement.
      Notwithstanding anything in this Agreement to the contrary, the Company will
      have no obligation to indemnify Indemnitee under this Agreement for any amounts
      paid in settlement of any Proceeding effected without the Company’s prior
      written consent.

    


    11.2 When
      Indemnitee’s Prior Consent Required.
      The
      Company will not, without the prior written consent of Indemnitee, consent
      to
      the entry of any judgment against Indemnitee or enter into any settlement or
      compromise which (i) includes an admission of fault of Indemnitee, any
      non-monetary remedy imposed on Indemnitee or a Loss for which Indemnitee is
      not
      wholly indemnified hereunder or (ii) with respect to any Proceeding with respect
      to which Indemnitee may be or is made a party or a participant or may be or
      is
      otherwise entitled to seek indemnification hereunder, does not include, as
      an
      unconditional term thereof, the full release of Indemnitee from all liability
      in
      respect of such Proceeding, which release will be in form and substance
      reasonably satisfactory to Indemnitee. Neither the Company nor Indemnitee will
      unreasonably withhold its consent to any proposed settlement; provided,
      however,
      Indemnitee may withhold consent to any settlement that does not provide a full
      and unconditional release of Indemnitee from all liability in respect of such
      Proceeding.

    


    ARTICLE
      12

    DURATION
      OF AGREEMENT

    


    12.1 Duration
      of Agreement.
      This
      Agreement will continue until and terminate upon the latest of (a) the statute
      of limitations applicable to any claim that could be asserted against an
      Indemnitee with respect to which Indemnitee may be entitled to indemnification
      and/or an Expense Advance under this Agreement, (b) ten years after the date
      that Indemnitee has ceased to serve as a director or officer of the Company
      or
      as a director, officer, employee, partner, member, manager, fiduciary or agent
      of any other Enterprise which Indemnitee served at the request of the Company,
      or (c) if, at the later of the dates referred to in (a) and (b) above, there
      is
      pending a Proceeding in respect of which Indemnitee is granted rights of
      indemnification or the right to an Expense Advance under this Agreement or
      a
      Proceeding commenced by Indemnitee pursuant to Article 8
      of this
      Agreement, one year after the final termination of such Proceeding, including
      any and all appeals.

    


    ARTICLE
      13

    MISCELLANEOUS

    


    13.1 Entire
      Agreement.
      This
      Agreement constitutes the entire agreement and understanding of the parties
      in
      respect of the subject matter hereof and supersedes all prior understandings,
      agreements or representations by or among the parties, written or oral, to
      the
      extent they relate in any way to the subject matter hereof; provided,
      however,
      it is
      agreed that the provisions contained in this Agreement are a supplement to,
      and
      not a substitute for, any provisions regarding the same subject matter contained
      in the Articles, the Bylaws and any employment or similar agreement between
      the
      parties. 

     

    
      
        
        

      

      
        14

        
          

        

      

      
        
        

      

    

     

    13.2 Assignment;
      Binding Effect; Third Party Beneficiaries.
      No
      party may assign either this Agreement or any of its rights, interests or
      obligations hereunder without the prior written approval of the other party
      and
      any such assignment by a party without prior written approval of the other
      parties will be deemed invalid and not binding on such other parties;
      provided,
      however, that the Company may assign all (but not less than all) of its rights,
      obligations and interests hereunder to any direct or indirect successor to
      all
      or substantially all of the business or assets of the Company by purchase,
      merger, consolidation or otherwise and will cause such successor to be bound
      by
      and expressly assume the terms and provisions hereof. All of the terms,
      agreements, covenants, representations, warranties and conditions of this
      Agreement are binding upon, and inure to the benefit of and are enforceable
      by,
      the parties and their respective successors, permitted assigns, heirs, executors
      and personal and legal representatives. There are no third party beneficiaries
      having rights under or with respect to this Agreement.

    


    13.3 Notices.
      All
      notices, requests and other communications provided for or permitted to be
      given
      under this Agreement must be in writing and be given by personal delivery,
      by
      certified or registered United States mail (postage prepaid, return receipt
      requested), by a nationally recognized overnight delivery service for next
      day
      delivery, or by facsimile transmission, as follows (or to such other address
      as
      any party may give in a notice given in accordance with the provisions
      hereof):

    


    If
      to the
      Company:

    


    United
      Fuel
      & Energy Corporation

    405
      N.
      Marienfeld

    Midland,
      Texas 78701

    Attention:
      Charles McArthur

    Facsimile:
      (432)
      571-8099

    


    with
      a
      copy (which will not constitute notice) to:

    


    Akin
      Gump
      Strauss Hauer & Feld LLP

    300
      Convent Street, Suite 1500

    San
      Antonio, Texas 78205

    Attention:
      Wilhelm E. Liebmann

    Facsimile:
      (210) 224-2035

     

    
      
        
        

      

      
        15

        
          

        

      

      
        
        

      

    

     

    If
      to
      Indemnitee:

    


    _____________________

    _____________________

    _____________________

    Attention:
      _____________________

    Facsimile:
      _____________________

    


    


    with
      a
      copy (which will not constitute notice) to:

    


    _____________________

    _____________________

    _____________________

    Attention:
      _____________________

    Facsimile:
      _____________________

    


    All
      notices, requests or other communications will be effective and deemed given
      only as follows: (i) if given by personal delivery, upon such personal delivery,
      (ii) if sent by certified or registered mail, on the fifth business day after
      being deposited in the United States mail, (iii) if sent for next day delivery
      by overnight delivery service, on the date of delivery as confirmed by written
      confirmation of delivery, (iv) if sent by facsimile, upon the transmitter’s
      confirmation of receipt of such facsimile transmission, except that if such
      confirmation is received after 5:00 p.m. (in the recipient’s time zone) on a
      business day, or is received on a day that is not a business day, then such
      notice, request or communication will not be deemed effective or given until
      the
      next succeeding business day. Notices, requests and other communications sent
      in
      any other manner, including by electronic mail, will not be
      effective.

    


    13.4 Specific
      Performance; Remedies.
      Each
      party acknowledges and agrees that the other party would be damaged irreparably
      if any provision of this Agreement were not performed in accordance with its
      specific terms or were otherwise breached. Accordingly, the parties will be
      entitled to an injunction or injunctions to prevent breaches of the provisions
      of this Agreement and to enforce specifically this Agreement and its provisions
      in any action or proceeding instituted in any court of the United States or
      any
      state thereof having jurisdiction over the parties and the matter, in addition
      to any other remedy to which they may be entitled, at law or in equity. Except
      as expressly provided herein, the rights, obligations and remedies created
      by
      this Agreement are cumulative and in addition to any other rights, obligations
      or remedies otherwise available at law or in equity. Except as expressly
      provided herein, nothing herein will be considered an election of
      remedies.

    


    13.5 Headings.
      The
      article and section headings contained in this Agreement are inserted for
      convenience only and will not affect in any way the meaning or interpretation
      of
      this Agreement.

    


    13.6 Governing
      Law.
      This
      Agreement will be governed by and construed in accordance with the laws of
      the
      State of Nevada, without giving effect to any choice of law
      principles.

     

    
      
        
        

      

      
        16

        
          

        

      

      
        
        

      

    

     

    13.7 Amendment.
      This
      Agreement may not be amended or modified except by a writing signed by all
      of
      the parties.

    


    13.8 Extensions;
      Waivers.
      Any
      party may, for itself only, (i) extend the time for the performance of any
      of
      the obligations of any other party under this Agreement, (ii) waive any
      inaccuracies in the representations and warranties of any other party contained
      herein or in any document delivered pursuant hereto and (iii) waive compliance
      with any of the agreements or conditions for the benefit of such party contained
      herein. Any such extension or waiver will be valid only if set forth in a
      writing signed by the party to be bound thereby. No waiver by any party of
      any
      default, misrepresentation or breach of warranty or covenant hereunder, whether
      intentional or not, may be deemed to extend to any prior or subsequent default,
      misrepresentation or breach of warranty or covenant hereunder or affect in
      any
      way any rights arising because of any prior or subsequent such occurrence.
      Neither the failure nor any delay on the part of any party to exercise any
      right
      or remedy under this Agreement will operate as a waiver thereof, nor will any
      single or partial exercise of any right or remedy preclude any other or further
      exercise of the same or of any other right or remedy.

    


    13.9 Severability.
      The
      provisions of this Agreement will be deemed severable and the invalidity or
      unenforceability of any provision will not affect the validity or enforceability
      of the other provisions hereof; provided that if any provision of this
      Agreement, as applied to any party or to any circumstance, is judicially
      determined not to be enforceable in accordance with its terms, the parties
      agree
      that the court judicially making such determination may modify the provision
      in
      a manner consistent with its objectives such that it is enforceable, and/or
      to
      delete specific words or phrases, and in its modified form, such provision
      will
      then be enforceable and will be enforced.

    


    13.10 Counterparts;
      Effectiveness.
      This
      Agreement may be executed in two or more counterparts, each of which will be
      deemed an original but all of which together will constitute one and the same
      instrument. This Agreement will become effective when one or more counterparts
      have been signed by each of the parties and delivered to the other parties,
      which delivery may be made by exchange of copies of the signature page by
      facsimile transmission or email of a .pdf or .tiff formatted
      document.

    


    13.11 Construction.
      This
      Agreement has been freely and fairly negotiated among the parties. If an
      ambiguity or question of intent or interpretation arises, this Agreement will
      be
      construed as if drafted jointly by the parties and no presumption or burden
      of
      proof will arise favoring or disfavoring any party because of the authorship
      of
      any provision of this Agreement. Any reference to any law will be deemed also
      to
      refer to such law as amended and all rules and regulations promulgated
      thereunder, unless the context requires otherwise. The words “include,”
“includes,” and “including” will be deemed to be followed by “without
      limitation.” Pronouns in masculine, feminine, and neuter genders will be
      construed to include any other gender, and words in the singular form will
      be
      construed to include the plural and vice versa, unless the context otherwise
      requires. The words “this Agreement,” “herein,” “hereof,” “hereby,” “hereunder,”
and words of similar import refer to this Agreement as a whole and not to any
      particular subdivision unless expressly so limited. The parties intend that
      each
      representation, warranty, and covenant contained herein will have independent
      significance. If any party has breached any representation, warranty, or
      covenant contained herein in any respect, the fact that there exists another
      representation, warranty or covenant relating to the same subject matter
      (regardless of the relative levels of specificity) which the party has not
      breached will not detract from or mitigate the fact that the party is in breach
      of the first representation, warranty, or covenant. Time is of the essence
      in
      the performance of this Agreement.

     

    [Signature
      page follows]

     

    
      
        
        

      

      
        17

        
          

        

      

      
        
        

      

    

     

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

    
 

    
      
        
          	
                   

                	
                  UNITED
                    FUEL & ENERGY CORPORATION

                	 
	 	 	 	 	 
	 	 	 	 	 
	
                   

                	
                  By: 
                    

                	     
	 
	 	 	
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                  INDEMNITEE

                	 
	 	 	 	 	 
	 	 	 	 	 
	 	 	 
	 	
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