Document:

DEMAND
      PROMISSORY NOTE

    

    
      	
              $10,625.00

            	
              May
                __, 2008

            

    

    

    FOR
      VALUE
      RECEIVED, One XL Corp., a corporation organized and existing under the laws
      of
      State of Nevada, with offices at 3925 Ayrshire Place, Charlotte, NC 28210 (the
      “Company”), promises to pay to the order of White Interests Limited Partnership,
      a partnership having an address at 3925 Ayrshire Place, Charlotte, NC 28210
      2519
      (the "Holder"), the principal amount of TEN THOUSAND SIX HUNDRED TWENTY FIVE
      Dollars ($10,625.00, together with interest incurred thereon at the rate of
      eight percent (8%) per annum. The entire unpaid principal and accrued interest
      thereon shall be immediately due and payable on demand by the Holder. Interest
      payable hereunder shall be calculated for actual days elapsed on the basis
      of a
      360-day year. Any payments of amounts due hereunder shall be in such currency
      of
      the United States at the time of payment as shall be legal tender for the
      payment of public or private debts. 

    

    This
      Note
      shall be paid without deduction by reason of any set-off, defense or
      counterclaim of the Company. This Note may be repaid in whole or in part by
      the
      Company without penalty or premium at any time and from time to time. All
      payments received by the Holder hereunder will be applied first to costs of
      collection and fees, if any, then to interest, and the balance to principal.
      

    

    All
      payments shall be made at the address for the Holder set forth above, or at
      such
      other place as the Holder hereof may from time to time designate in writing.
      

    

    The
      undersigned waives presentment for payment, demand, protest and notice of
      protest and of non-payment.

    

    Any
      and
      all notices, requests, consents and demands required or permitted to be given
      hereunder shall be in writing, delivered to the addresses stated above. Either
      party may change by notice the address to which notices to it are to be
      addressed.

    

    Notwithstanding
      any other provision of this Note, interest under this Note shall not exceed
      the
      maximum rate permitted by law; and if any amount is paid under this Note as
      interest in excess of such maximum rate, then the amount so paid will not
      constitute interest but will constitute a prepayment on account of the principal
      amount of this Note.

    

    The
      Company agrees to pay on demand all expenses of collecting and enforcing this
      Note and any guarantee or collateral securing this Note, including, without
      limitation, expenses and fees of legal counsel, court costs and the cost of
      appellate proceedings.

    

    The
      failure or delay by the Holder in exercising any of its rights hereunder in
      any
      instance shall not constitute a waiver thereof in that or any other instance.
      The Holder may not waive any of its rights except by an instrument in writing
      signed by the Holder.

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    

    This
      Note
      shall be construed and enforced in accordance with, and the rights of the
      parties shall be governed by, the laws of the State of Nevada, without giving
      effect to the conflict of law provisions thereof.

    

    This
      Note
      may not be assigned, transferred or otherwise negotiated by the Holder without
      the prior written consent of the Company. 

    

    This
      Note
      may not be amended without the written approval of the Holder.

    

    IN
      WITNESS WHEREOF, the Company has caused this Note to be signed on the date
      first
      set forth above.

    

    
      	
              ONE
                XL CORP.

            
	 
	
              By:

            	 
	
              Print
                Name: C. Lynn White

            
	
              Title:
                PresidentUnassociated Document

    
      EXHIBIT
        10.1

    

     

    EMPLOYMENT
      AGREEMENT

     

    THIS
      EMPLOYMENT AGREEMENT (this “Agreement”)
      is
      made as of the 16th day of September, 2008 (the “Commencement
      Date”),
      by
      and between United Fuel & Energy Corporation, a Nevada corporation on behalf
      of itself and any and all subsidiaries (together, the “Company”),
      and
      William C. Bousema (“Employee”).
      

     

    In
      consideration of the mutual covenants and agreements set forth below, it is
      hereby covenanted and agreed by the Company and Employee as
      follows:

     

    1.  Employment
      Term.
      This
      Agreement will remain in effect from the Commencement Date and shall end on
      the
      date that is the first anniversary of the Commencement Date unless this
      Agreement is earlier terminated in accordance with its express terms (the
“Initial
      Term”);
      provided,
      however,
      that
      upon the expiration of the Initial Term, and on each anniversary of the
      Commencement Date thereafter, the term of this Agreement shall automatically
      extend for an additional one-year term (each a “Renewal
      Term,”
and
      together with the Initial Term, the “Employment
      Term”)
      unless
      (a) either Party gives the other Party three (3) months’ written notice of its
      desire not to extend this Agreement prior to the expiration of the Initial
      Term
      or Renewal Term, as applicable, or (b) this Agreement is earlier terminated
      in
      accordance with its express terms.

     

    2.  Position.
      During
      the Employment Term, Employee shall serve in the position of Executive Vice
      President and Chief Financial Officer. 

     

    3.  Duties.
      During
      the Employment Term, Employee shall devote all of his business time, attention
      and energies to the performance of his duties hereunder. As Chief Financial
      Officer, Employee will have such duties and responsibilities as determined
      by
      Company’s Board of Directors and
      Chief
      Executive Officer consistent with the Company’s Bylaws. If requested by Company,
      Employee will serve as an officer or director of any subsidiary of Company
      without additional compensation. Employee will devote his full business energies
      and abilities and all of his business time to the performance of his duties
      hereunder and will not, without the Company’s prior written consent, render to
      others any service of any kind (whether or not for compensation) that, in the
      Company’s sole but reasonable judgment, would interfere with the full
      performance of his duties hereunder. Notwithstanding the foregoing, Employee
      is
      permitted to spend reasonable amounts of time to manage his personal financial
      and legal affairs and, with the Company’s consent which will not be unreasonably
      withheld, to serve on civic, charitable, not-for-profit, industry or corporate
      boards or advisory committees, provided that such activities, individually
      and
      collectively, do not materially interfere with the performance of Employee’s
      duties hereunder. In no event will Employee engage in any activities that could
      reasonably create a conflict of interest or the appearance of a conflict of
      interest. Employee shall be subject to the Company’s policies, procedures and
      approval practices, as generally in effect from time to time.

     

    4.  Compensation
      and Benefits.
      During
      the Employment Term, the Company shall pay and provide Employee with the
      following:

     

    (a)  Base
      Salary.
      The
      Company shall pay Employee an initial base salary at a monthly rate of Twenty
      Thousand Eight Hundred Thirty Three Dollars and Thirty Three Cents ($20,833.33)
      (the “Monthly
      Salary”)
      equaling an annual salary of Two Hundred Fifty Thousand Dollars and No Cents
      ($250,000.00) (the “Base
      Salary),
      payable in accordance with its normal payroll practices, as in effect from
      time
      to time. The Base Salary is first subject to review within the first three
      (3)
      months after the end of the fiscal year ending December 31, 2008 and,
      thereafter, subject to periodic review not less frequently than annually within
      the first three (3) months after the end of the next successive fiscal
      year, and to increase (but not decrease) as approved by the Compensation
      Committee of the Board (“Compensation
      Committee”),
      or,
      if the Board desires to approve increases to the Base Salary, the Board, in
      the
      sole discretion of the Compensation Committee or the Board, as
      applicable.

     

    
      
        
        

      

      
        1

        
          

        

      

      
        
        

      

    

     

    (b)  Incentive
      Bonuses.
      During
      the term of Employee’s employment under this Agreement, Employee will be
      eligible to participate in all bonus plans applicable to senior executives
      of
      the Company established by the Board or the Compensation Committee, if any,
      subject to the terms and conditions of any such plans. The target amount of
      incentive bonuses will be determined by the Board or the Compensation Committee,
      and will be tied to the Company’s achievement of financial objectives
      established by the Board or the Compensation Committee and individual
      performance objectives to be established annually by the Compensation Committee.
      For the avoidance of doubt, incentive bonuses will be payable only if financial
      and performance objectives established by the Board and/or the Compensation
      Committee are achieved. Employee must be employed by the Company as of the
      eligibility date established by the Compensation Committee for a given fiscal
      year to be eligible for consideration for an incentive bonus for that year.
      Incentive bonuses will be paid out according to the terms of the applicable
      bonus plan, if any, but in no event later than March 15 of the year that
      immediately follows the fiscal year to which the bonus relates.

     

    (c)  Discretionary
      Bonus.
      Employee shall also be eligible to receive an annual discretionary bonus. The
      bonus will be determined at the sole discretion of the Compensation Committee
      or
      the Board based on Employee’s performance during the twelve month period ending
      September 30th
      of each
      year or other annual period determined by the Board or Compensation Committee.
      

     

    (d)  Equity
      Incentive Grants.

     

    (i)  Stock
      Options.
      As will
      be evidenced by a separate stock option agreement in substantially the form
      attached hereto as Exhibit
      A,
      the
      Company shall grant to Employee an incentive stock option on the Commencement
      Date or as soon as administratively feasible thereafter, to purchase 150,000
      shares of the Company’s common stock pursuant to the Company’s 2005 Equity
      Incentive Plan (the “2005
      Plan”)
      . The
      option will vest in twelve (12) equal quarterly installments with an exercise
      price equal to the Fair Market Value of the Company’s common stock (as defined
      in the 2005 Plan) on the Commencement Date or the actual date of grant if the
      grant occurs after the Commencement Date.

     

    (ii)  Restricted
      Stock.
      As will
      be evidenced by a separate restricted stock agreement in substantially the
      form
      attached hereto as Exhibit
      B,
      the
      Company shall grant to Employee pursuant to the 2005 Plan 150,000 shares of
      the
      Company’s common stock on the Commencement Date or as soon as administratively
      feasible thereafter. The restricted stock shall be subject to forfeiture, and
      will vest in twelve (12) equal quarterly installments. 

     

    (iii)  Additional
      Equity Interests.
      Employee
      shall be eligible to receive such additional stock options and restricted stock
      as the Board or Compensation Committee may determine in its reasonable
      discretion based on Company and individual performance criteria to be mutually
      agreed upon by Employee and the Company. 

     

    
      
        
        

      

      
        2

        
          

        

      

      
        
        

      

    

     

    (e)  Benefits.Employee
      shall be eligible to participate in the employee benefit plans and programs
      generally provided to its employees, and in all benefit plans and programs
      afforded to senior or executive management employees, in accordance with the
      terms thereof, as in effect and as amended from time to time, including the
      Company’s health benefit plan, vacation, sick leave and any other allowed
      absences, paid or unpaid.

     

    (f)  Expenses.
      Upon
      submission of appropriate documentation, the Company shall reimburse Employee
      for all previously approved, reasonable business expenses incurred in connection
      with the performance of his duties hereunder in accordance with the Company’s
      expense reimbursement policies, as in effect from time to time. 

     

    (g)  Termination
      of Employment.
      This
      Agreement may be terminated upon the following terms:

     

    (i)  Termination
      Upon Death.
      If
      Employee should die during the Employment Term, this Agreement will terminate
      on
      the date of death. 

     

    (ii)  Termination
      Upon Disability.
      This
      Agreement shall automatically terminate upon the Employee’s Disability.
“Disability”
means
      that the (i) Employee is unable to engage in any substantial gainful activity
      by
      reason of any medically determinable physical or mental impairment that can
      be
      expected to result in death or can be expected to last for a continuous period
      of not less than 12 months; (ii) Employee is, by reason of any medically
      determinable physical or mental impairment that can be expected to result in
      death or can be expected to last for a continuous period of not less than 12
      months, receiving income replacement benefits for a period of not less than
      three months under an accident and health plan covering employee’s of Company;
      (iii) Employee is determined to be totally disabled by the Social Security
      Administration; or (iv) Employee is determined to be disabled in accordance
      with
      the disability insurance program under which the Company has provided disability
      insurance to the Employee, provided that the definition of disability applied
      under such disability insurance program complies with the requirements of
      Treasury Regulation Section 1.409A-3(i)(4). Nothing in this Paragraph relieves
      the Company of any of its obligations of reasonable accommodation under the
      Americans with Disabilities Act.

     

    (iii)  Termination
      by Company With Cause.
      Company
      will be entitled to terminate Employee’s employment at any time for Cause.
“Cause”
will
      constitute any one of the following:

     

    (1)  Employee’s
      demonstrated and material neglect of or failure or refusal to perform the
      material duties of his position, or failure to follow the reasonable and lawful
      instructions of the Board or the Chief Executive Officer (other than a failure
      resulting from a Disability);

     

    (2)  Employee
      engaging in willful, reckless, or grossly negligent misconduct that the Board
      reasonably determines has caused, is causing or reasonably is likely to cause
      harm that is materially injurious to the Company, monetarily or
      otherwise;

     

    (3)  Employee’s
      conviction of, or plea of guilty or nolo contender to, a felony or a crime
      involving moral turpitude, other than a traffic offense that is not punishable
      by a sentence of incarceration or a felony related to hunting live game, except
      for felonies pertaining to acts of poaching, criminal trespass or violations
      of
      federal or state weapons or firearms laws;

     

    
      
        
        

      

      
        3

        
          

        

      

      
        
        

      

    

     

    (4)  Employee
      commits an act of fraud, misappropriation, or personal dishonesty (in each
      case,
      that is not de
      minimus)
      that
      the Board reasonably determines has caused, is causing, or reasonably is likely
      to cause harm to the Company; and

     

    (5)  Employee
      commits a material breach of this Agreement and fails to cure such breach within
      thirty (30) days from the date that the Company gives notice thereof to Employee
      identifying the provision of this Agreement that the Company has determined
      has
      been breached.

     

    Termination
      pursuant to Section
      4(g)(iii)(1)
      above
      shall be effective only if such instances of neglect, failure or refusal
      continue after Employee has been given written notice thereof by the Company,
      and Employee is given fifteen (15) days after the receipt of such notice to
      present his position to the Board or to cure the same.

     

    (iv)  Termination
      by Company Without Cause.
      Company
      may at any time terminate Employee's employment without Cause. 

     

    (v)  Resignation
      for Good Reason.
      Employee may terminate this Agreement for Good Reason (as defined below) by
      giving written notice of such termination, which termination will become
      effective on the thirtieth (30th) day following receipt by the Company. As
      used
      in this Agreement, “Good
      Reason”
shall
      mean any one of the following: (i) a material reduction in Employee’s Base
      Salary and/or a material failure to provide the benefits required in
Section
      4;
      (ii)
      any other action or inaction that constitutes a material breach by the Company
      of this Agreement; (iii) a material diminution in Employee’s authority, duties
      or responsibilities such that they are materially inconsistent with his position
      as Chief Financial Officer of the Company; (iv) relocation of the Company’s
      headquarters to a location more than thirty (30) miles from 1800 Katella Avenue
      in Anaheim, California; and (v) in the event of a Change in Control (as defined
      below), failure of the successor to the Company or to the Company’s business (A)
      to offer Employee the position of Chief Financial Officer of the successor
      company, reporting only to the board of directors and/or the chief executive
      officer of the successor to the Company, with duties, responsibilities,
      compensation and benefits materially similar to those enjoyed by Employee
      immediately preceding the Change in Control, or (B) to assume the obligations
      of
      the Company under and to become a party to this Agreement, provided that no
      termination for Good Reason shall be effective until Employee has given the
      Company written notice (pursuant to Section
      8(g)
      below)
      within sixty (60) days of the initial occurrence of any of the foregoing
      specifying the event or condition constituting the Good Reason and the specific
      reasonable cure requested by Employee, the Company has failed to cure the
      occurrence within thirty (30) days of receiving written notice from Employee,
      and Employee resigns within six (6) months following the initial occurrence.
      In
      the event of a termination for Good Reason, Employee will be entitled to the
      Accrued Benefits and the Severance Benefits, on the same conditions as would
      apply to Employee if he were terminated without cause on or after the 91st
      day
      of the Initial Term.

     

    As
      used
      in this Agreement, a “Change
      in Control”
shall
      mean any of the following events:

     

    (1)  the
      acquisition by any Group or Person (as such terms are defined in Section 13(d)
      or 14(d) of the Securities Exchange Act of 1934, as amended (the “1934
      Act”)),
      other than (A) a trustee or other fiduciary holding securities of the Company
      under an employee benefit plan of the Company, (B) an entity in which the
      Company directly or indirectly beneficially owns fifty percent (50%) or more
      of
      the voting securities of such entity (an “Affiliate”),
      or (C)
      Frank Greinke or an affiliate of Frank Greinke, of any securities of the
      Company,
      immediately after which such Group or Person has beneficial ownership (within
      the meaning of Rule 13d-3 promulgated under the 1934 Act) of more than fifty
      percent (50%) of (X) the outstanding shares of Common Stock or (Y) the combined
      voting power of the Company’s then outstanding securities entitled to vote
      generally in the election of directors;

     

    
      
        
        

      

      
        4

        
          

        

      

      
        
        

      

    

     

    (2)  the
      Company (and/or its subsidiaries) is a party to a merger or consolidation with
      a
      Person, or series or related transactions, with a Person other than an
      Affiliate, which results in the holders of voting securities of the Company
      outstanding immediately before such merger or consolidation failing to continue
      to represent (either by remaining outstanding or being converted into voting
      securities of the surviving entity) more than fifty percent (50%) of the
      combined voting power of the then outstanding voting securities of the
      corporation resulting from such merger or consolidation; or

     

    (3)  all
      or
      substantially all of the assets of the Company and its subsidiaries are, in
      any
      transaction or series of transactions, sold or otherwise disposed of (or
      consummation of any transaction, or series of related transactions, having
      similar effect , other than to an Affiliate; 

     

    provided,
      however, that in no event shall a “Change in Control” be deemed to have occurred
      for purposes of this Agreement solely because the Company engages in an internal
      reorganization, which may include a transfer of assets to, or a merger or
      consolidation with, one or more Affiliates.

     

    (vi)  Voluntary
      Resignation without Good Reason.
      In the
      event that Employee resigns without Good Reason as defined above in Section
      4(v),
      Employee will be entitled only to the Accrued Benefits through the termination
      date. The Company will have no further obligation to pay any compensation of
      any
      kind (including without limitation any bonus or portion of a bonus that
      otherwise may have become due and payable to Employee with respect to the year
      in which such termination date occurs), or severance payments of any
      kind.

     

    5.  Payments
      and Benefits upon any Expiration or Termination.
      Upon
      termination of employment, the Company shall provide Employee with the payments
      and benefits set forth in this Section
      5.
      Upon
      termination of employment for any reason, Employee shall also resign (and shall
      be deemed to have resigned) any officerships, directorships or other positions
      that he then holds with the Company or any of its affiliates. 

     

    (a)  General.
      Upon
      the termination of Employee’s employment for any reason, the Company shall pay
      and provide Employee (or, in the case of his death, his surviving spouse or,
      if
      none, his estate) with the following amounts and benefits: (i) all earned but
      unpaid compensation, including accrued unpaid vacation) through the effective
      date of termination, payable on or before the termination date; (ii) any
      previously awarded but unpaid cash bonuses, payable on or before the termination
      date; (iii) reimbursement for all un-reimbursed business expenses incurred
      on or
      prior to the date of termination to which Employee would be otherwise entitled;
      and (iv) continued coverage under the Company’s insurance benefit plans through
      the termination date and such other benefits to which he may be entitled
      pursuant to the Company’s benefit plans (other than any severance
      plan). The
      payments and benefits set forth in this Section
      5(a)
      shall be
      referred to as the “Accrued
      Benefits.”

     

    (b)  Special
      Benefits Upon Death or Disability.
      Upon
      the termination of Employee’s employment in the event of Employee’s death or
      disability pursuant to Sections
      4(g)(i)
      or
(ii)
      above,
      the stock option described in Section
      4(d)(i)
      above
      shall fully vest and become exercisable by Employee’s legal representative or
      authorized assignee for a period of no more than six (6) months following
      Employee’s date of death and the restrictions shall immediately lapse with
      respect to the restricted stock grant described in Section
      4(d)(ii)
      above.

     

    
      
        
        

      

      
        5

        
          

        

      

      
        
        

      

    

     

    (c)  Special
      Benefits Upon Termination Without Cause or for Good Reason.
      Upon
      the Company’s termination of Employee’s employment without Cause pursuant to
Section
      4(g)(iv)
      above or
      upon Employee’s termination of Employee’s employment for Good Reason pursuant to
Section
      4(g)(v)
      above,
      the stock option described in Section
      4(d)(i)
      above
      shall remain exercisable by Employee for a period of no more than twelve (12)
      months following the date of termination to the extent such option was vested
      and exercisable as of the date of termination. In addition, upon the Company’s
      termination of Employee’s employment without Cause pursuant to Section
      4(g)(iv)
      above on
      or after the 91st
      day of
      the Initial Term or at any time during any Renewal Term or upon Employee’s
      termination of Employee’s employment for Good Reason pursuant to Section
      4(g)(v)
      above on
      or after the 91st
      day of
      the Initial Term or at any time during any Renewal Term, the Company will also
      (i) continue to pay Employee the equivalent of the Base Salary he would have
      earned over the next twelve (12) months following the termination date (less
      necessary withholdings and authorized deductions) at his current Base Salary
      (the “Severance
      Payment”),
      payable in equal monthly installments over the twelve (12) months following
      the
      termination date (the “Severance
      Period”),
      in
      accordance with the Company’s regular payroll practices, as in effect from time
      to time, subject to Section
      7(b)
      below;
      (ii) reimburse Employee the amount of any insurance premiums actually paid
      by
      Employee to retain group health insurance coverage as of the termination date
      for the Employee and his eligible dependents pursuant to Consolidated Omnibus
      Budget Reconciliation Act of 1986 (COBRA) for a period of up to twelve (12)
      months following the date of termination; and (iii) immediately vest the number
      of outstanding unvested options and shares of restricted stock granted to
      Employee pursuant
      to Sections
      4(d)(i)
      and
4(d)(ii).
      The
      payments and benefits set forth in this Section
      5(c)(i)-(iii)
      shall be
      referred to as the “Severance
      Benefits.”
      

     

    (d)  No
      Further Benefits.
      Other
      than as expressly provided in this Agreement, from and after the date of
      termination, Employee shall not be entitled to any other payments or benefits
      in
      connection with his employment and/or the termination thereof, and shall have
      no
      further right to receive compensation or other consideration from the Company.
      

     

    6.  Confidential
      Information.
      Prior
      to the execution of this Agreement, the Company has, and following the executing
      this Agreement, the Company will provide Employee with some or all of the
      Company’s various trade secrets and confidential or proprietary information.
“Confidential
      Information”
means
      information relating to the Company, it’s business or operations that the
      Company takes reasonable efforts to keep confidential, including the following:
      (i) information relating to the Company’s business, operations, assets,
      liabilities or financial condition; (ii) information regarding the Company’s
      pricing, sales, merchandising, marketing, capital expenditures, costs, joint
      ventures, business alliances, purchasing or manufacturing; (iii) information
      regarding the Company’s employees or representatives, including their
      identities, responsibilities, competence and compensation; (iv) information
      regarding the Company’s current or prospective customers; (v) information
      regarding the Company’s current or prospective vendors, suppliers, competitors,
      distributors or other business partners; (vi) trading positions, forecasts,
      projections, budgets and business plans regarding the Company; (vii) information
      regarding the Company’s planned or pending acquisitions, divestitures or other
      business combinations; (viii) the Company’s trade secrets and proprietary
      information, including strategies (including investment and trading strategies),
      potential investments, trades and trading positions, and company, commodity
      and
      industry research information; (ix) technical information, patent disclosures
      and applications, copyright applications, sketches, drawings, blueprints,
      models, know-how, discoveries, inventions, improvements, techniques, processes,
      business methods, equipment, algorithms, software programs, software source
      documents and formulae, in each case regarding the Company’s current, future or
      proposed products or services (including information concerning the Company’s
      research, experimental work, development, design details and specifications,
      and
      engineering); (x) information regarding the Company’s web site designs, web site
      content, proposed domain names, and data bases; (xi) confidential information
      received by the Company belonging to third parties which the Company is required
      to keep confidential; and, (xii) any of the foregoing which may be developed
      by
      Employee incident to his duties with the Company. Notwithstanding anything
      herein to the contrary, the following information shall not be deemed to
      constitute Confidential Information and Employee shall have no obligation with
      respect to such information which: 

     

    
      
        
        

      

      
        6

        
          

        

      

      
        
        

      

    

     

    (i)  is
      or
      becomes publicly known or available through no fault or wrongful act of
      Employee;

     

    (ii)  is
      rightfully received from a third party without restriction and without breach
      of
      this Agreement;

     

    (iii)  is
      approved for release by written authorization of the Company.

     

    Employee
      agrees that all Confidential Information, whether prepared by Employee or
      otherwise, coming into his possession, shall remain the exclusive property
      of
      the Company. Employee further agrees that he shall not, without the prior
      written consent of the Company, use or disclose to any third party any of the
      Confidential Information described herein, directly or indirectly, either during
      Employee’s employment with the Company or at any time following the termination
      of Employee’s employment with the Company. Employee understands and acknowledges
      that the disclosure or use of the Confidential Information described herein
      in
      violation of this Agreement may damage the Company or its affiliates and is
      prohibited by the law. 

     

    Upon
      termination of this Agreement, Employee agrees that all Confidential Information
      and other files, documents, materials, records, notebooks, customer lists,
      business proposals, contracts, agreements and other repositories containing
      information concerning the Company or the businesses of the Company (including
      all copies thereof) in Employee’s possession, custody or control, whether
      prepared by Employee or others, shall remain with or be returned to the Company
      promptly (within five (5) business days) after the termination of Employee’s
      employment. Employee also agrees not to use any Confidential Information for
      the
      benefit of Employee or any third party. All Confidential Information that cannot
      be returned upon the termination of Employee’s employment, e.g., information
      residing on magnetic or electronic media belonging to Employee, shall be
      destroyed and its destruction certified by Employee under penalty of perjury
      and
      to the reasonable satisfaction of the Company. It is not a breach of this
      Agreement for Employee to disclose Confidential Information pursuant to an
      order
      of a court or other governmental or legal body. Nothing in this Agreement,
      however, shall prohibit Employee from using or disclosing Confidential
      Information (A) to the extent required by law, or (B) while employed by the
      Company to the extent necessary in furtherance of Employee’s duties to the
      Company. If Employee is required by applicable law to disclose any Confidential
      Information, then, to the extent permitted by law, Employee shall (1) provide
      the Company with prompt notice before such disclosure so that the Company may
      attempt to obtain a protective order or other assurance that confidential
      treatment will be accorded such information and (2) cooperate with the Company
      in attempting to obtain such order or assurance.

     

    
      
        
        

      

      
        7

        
          

        

      

      
        
        

      

    

     

    7.  Taxes.
      

     

    (a)  Withholdings.
      The
      Company may withhold from any compensation and benefits payable under this
      Agreement all federal, state, city and other taxes or amounts as shall be
      determined by the Company to be required to be withheld pursuant to applicable
      laws, or governmental regulations or rulings. Employee shall be solely
      responsible for the satisfaction of any taxes (including employment taxes
      imposed on employees and penalty taxes on nonqualified deferred compensation).
      

     

    (b)  Section
      409A Compliance.

     

    (i)  Section
      409A Six-Month Delay Rule.
      If any
      amounts that become due under this Agreement on account of Employee’s
      termination of employment constitute “nonqualified deferred compensation” within
      the meaning of Code section 409A (“Section
      409A”),
      payment of such amounts shall not commence until Employee experiences a
“separation from service” within the meaning of Treasury Regulation Section
      1.409A-1(h). If, at the time of Employee’s separation from service, Employee’s
      is a “specified employee” (under Section 409A), any such amounts will not be
      paid until after the first business day of the seventh (7th) month after
      Employee’s separation from service (the “409A
      Suspension Period”).
      Within fourteen (14) calendar days after the end of the 409A Suspension Period,
      Employee shall be paid a lump sum payment in cash equal to any payments delayed
      because of the preceding sentence, together with interest on them for the period
      of delay at a rate equal to the average prime interest rate published in the
      Wall Street Journal on any day chosen by the Company during that period.
      Thereafter, Employee shall receive any remaining benefits as if there had not
      been an earlier delay.

     

    (ii)  Interpretation.
      This
      Agreement is intended to comply with or be exempt from Section 409A, and the
      Company shall have complete discretion to interpret and construe this Agreement
      and any associated documents in any manner that establishes an exemption from
      (or otherwise conforms them to) the requirements of Section 409A. To the extent
      that any regulations or other guidance issued under Section 409A (after
      application of the previous sentence) would result Employee being subject to
      the
      payment of interest or any additional tax under Section 409A, the parties agree,
      to the extent reasonably possible, to amend this Agreement in order to avoid
      the
      imposition of any such interest or additional tax under Section 409A, which
      such
      amendment shall have the minimum economic effect necessary and be reasonably
      determined in good faith by Employee and the Company, provided it does not
      increase the overall expense to the Company in providing the
      benefits.

     

    8.  General

     

    (a)  Governing
      Law; Jurisdiction.
      The
      laws of the State of California shall govern the validity, performance,
      enforcement, interpretation, and other aspects of this Agreement,
      notwithstanding any state’s choice of law provisions to the contrary. Any
      proceeding arising from or in connection with this Agreement shall be conducted
      in Orange County, California. 

     

    
      
        
        

      

      
        8

        
          

        

      

      
        
        

      

    

     

    (i)  Subject
      to the rights of any party to seek a temporary restraining order or injunctive
      relief from a court of competent jurisdiction, and without waiving the same,
      the
      parties agree that all disputes, controversies or claims that may arise among
      them (including their agents and employees) whether sounding in contract,
      statute, tort, fraud, misrepresentation, discrimination or any other legal
      theory relating to or involving the construction, performance or breach of
      this
      Agreement or Employee’s employment with the Company, including, without
      limitation, (i) any claims arising out of or relating to this Agreement or
      the
      breach, termination or invalidity thereof, (ii) any claim arising out of the
      termination of Employee’s employment, or (iii) any claim for discrimination
      (e.g.,
      sex,
      sexual harassment, race, national origin, age, color, religion or disability),
      retaliation, whether statutory or otherwise, e.g.,
      claims
      under the Fair Labor Standards Act, the Family and Medical Leave Act, Title
      VII
      of the Civil Rights Act of 1964, the Age Discrimination in Employment Act,
      the
      Americans with Disabilities Act or any other similar federal, state or local
      law, or alleged violations of public policy, shall be settled by arbitration
      conducted by one arbitrator mutually agreeable to the parties to such
      dispute.  In the event that, within 60 days after submission of any dispute
      to arbitration the parties cannot mutually agree on one arbitrator, then the
      parties shall arrange for American Arbitration Association (“AAA”)
      to
      designate a single arbitrator in accordance with the rules of AAA.  The
      arbitrator shall determine how all expenses relating to the arbitration shall
      be
      paid, including the respective expenses of each party, the fees of the
      arbitrator and the administrative fee of the AAA.  The arbitrator shall set
      a limited time period and establish procedures designed to reduce the cost
      and
      time for discovery while allowing the parties an opportunity, adequate in the
      sole judgment of the arbitrator to discover from the opposing parties all
      information reasonably calculated to lead to the discovery of admissible
      evidence.  The arbitrator shall rule upon motions to compel or limit
      discovery and shall have the authority to impose sanctions to the same extent
      as
      a competent court of law or equity, should the arbitrator determine that
      discovery was sought without substantial justification or that discovery was
      refused or objected to without substantial justification.  The decision of
      the arbitrator with respect to such dispute shall be final, binding and
      conclusive upon the parties provided that such decision shall address all claims
      and defenses asserted by the parties, shall not be contrary to law, shall be
      written, shall be supported by written findings of fact as all material facts
      whose existence or non-existence was proved to the satisfaction of or otherwise
      relied upon by the arbitrator in making his or her decision, and shall set
      forth
      the award, judgment, decree or other award of the arbitrator.  All payments
      required by the arbitrator shall be made within 30 days after the decision
      of
      the arbitrator is rendered.  Judgment upon any award rendered by the
      arbitrator may be entered in any court having jurisdiction.  The Company,
      Employee and the arbitrator, shall maintain in strict confidence all matters
      relating to any arbitration proceeding pursuant hereto (including, without
      limitation, the fact that the arbitration is or was ongoing, the facts or
      allegations in such arbitration proceeding and the decision of the arbitrator
      and the written findings of fact and conclusions of such arbitrator); provided,
      however, the Company and the Employee (and each employee, representative, or
      other agent of such Partner) may disclose such information (i) to the extent,
      and only the extent, required under applicable law or necessary to protect
      or
      pursue any legal right of such party (e.g., in an action to enforce an award
      by
      an arbitrator) or (ii) to its representatives who need to know in
      connection with the provision of services to the Company or the Employee, as
      the
      case may be (e.g.,
      attorneys, accountants in the preparation of filings before the Securities
      and
      Exchange Commission, tax returns, etc.), and agree to maintain such
      confidentiality. 

     

    (ii)  EACH
      OF
      THE PARTIES TO THIS AGREEMENT WAIVES ANY RIGHT TO TRIAL BY JURY OF ANY DISPUTE
      OF ANY NATURE WHATSOEVER THAT MAY ARISE BETWEEN THEM, INCLUDING, BUT NOT LIMITED
      TO, THOSE DISPUTES RELATING TO OR INVOLVING, IN ANY WAY THE CONSTRUCTION,
      PERFORMANCE OR BREACH OF THIS AGREEMENT OR ANY OTHER AGREEMENT BETWEEN THE
      PARTIES, THE PROVISIONS OF ANY FEDERAL, STATE OR LOCAL LAW, REGULATION OR
      ORDINANCE NOTWITHSTANDING. By execution of this Agreement, each of the parties
      hereto acknowledges and agrees that such party has had an opportunity to consult
      with legal counsel and that such party knowingly and voluntarily waives any
      right to a trial by jury of any dispute pertaining to or relating in any way
      to
      the transactions contemplated by this Agreement, the provisions of any federal,
      state or local law, regulation or ordinance notwithstanding. 

     

    
      
        
        

      

      
        9

        
          

        

      

      
        
        

      

    

     

    (b)  Indemnification
      and Insurance.
      The
      Company will indemnify Employee to the fullest extent permitted by the laws
      of
      the State of Nevada, as more fully described in the Indemnification Agreement
      dated as of the Commencement Date, the form of which is attached hereto as
      Exhibit
      C.
      While
      employed by the Company, and thereafter to the extent provided to the Company’s
      other senior executives, the Company shall, at its cost, provide insurance
      coverage to Employee at least to the same extent as other senior executives
      of
      the Company with respect to (i) officers and directors liability, (ii) errors
      and omissions and (iii) general liability. The foregoing rights conferred upon
      Employee shall not be exclusive of any other right which Employee may have
      or
      hereafter may acquire under any statute, provision of the certificate of
      incorporation or bylaws of the Company, agreement, vote of the stockholders
      or
      directors or otherwise.

     

    (c)  Assignment;
      Binding Nature.
      This
      Agreement shall be binding upon, and shall inure to the benefit of, Employee
      and
      his estate, but Employee may not assign or pledge this Agreement or any rights
      arising under it, except to the extent permitted under the terms of the benefit
      plans in which he participates. No rights or obligations of the Company under
      this Agreement may be assigned or transferred except that the Company shall
      require any successor (whether direct or indirect, by purchase, merger,
      reorganization, sale, transfer of stock, consideration or otherwise) to all
      or
      substantially all of the business and/or assets of the Company to expressly
      assume and agree to perform this Agreement in the same manner and to the same
      extent that the Company would be required to perform it if no succession had
      taken place. As used in this Agreement, “Company”
means
      the Company as hereinbefore defined and any successor to its business and/or
      assets (by merger, purchase or otherwise as provided in this Section
      8
      which
      executes and delivers the agreement provided for in this Section
      8
      or which
      otherwise becomes bound by all the terms and provisions of this Agreement by
      operation of law. In the event that any successor refuses to assume the
      obligations hereunder, the Company as hereinbefore defined shall remain fully
      responsible for all obligations hereunder.

     

    (d)  Survival.
      The
      respective rights and obligations of the parties hereunder shall survive any
      termination of Employee’s employment or other service and the termination of
      this Agreement to the extent necessary for the intended preservation of such
      rights and obligations.

     

    (e)  Amendment
      or Waiver.
      No
      provision in this Agreement may be amended unless such amendment is agreed
      to in
      writing and signed by Employee and an authorized officer of the Company. Except
      as set forth herein, no delay or omission to exercise any right, power or remedy
      accruing to any party shall impair any such right, power or remedy or shall
      be
      construed to be a waiver of or an acquiescence to any breach hereof. No waiver
      by either party of any breach by the other party of any condition or provision
      contained in this Agreement to be performed by such other party shall be deemed
      a waiver of a similar or dissimilar condition or provision at the same or any
      prior or subsequent time. Any waiver must be in writing and signed by Employee
      or an authorized officer of the Company, as the case may be.

     

    
      
        
        

      

      
        10

        
          

        

      

      
        
        

      

    

     

    (f)  Severability.
      In the
      event that any provision or portion of this Agreement shall be determined to
      be
      invalid or unenforceable for any reason, in whole or in part, the remaining
      provisions of this Agreement shall be unaffected thereby and shall remain in
      full force and effect to the fullest extent permitted by law.

     

    (g)  Notices.
      All
      notices, requests, demands and other communications hereunder shall be in
      writing and shall be given by hand delivery, facsimile, telecopy, overnight
      courier service, or by United States certified or registered mail, return
      receipt requested. Each such notice, request, demand or other communication
      shall be effective (i) if delivered by hand or by overnight courier service,
      when delivered at the address specified in this Section
      8(g);
      (ii) if
      given by facsimile or telecopy, when such facsimile or telecopy is transmitted
      to the facsimile or telecopy number specified in this Section
      8(g)
      and
      confirmation is received if during normal business hours on a business day,
      and
      otherwise, on the next business day; and (iii) if given by certified or
      registered mail, three (3) days after the mailing thereof. Notices shall be
      addressed to the parties as follows (or at such other address or fax number
      as
      either party may from time to time specify in writing by giving notice as
      provided herein):

     

    
      
        	If to the Company:	 	United Fuel & Energy
                Corporation
	 	 	1800 Katella Avenue , Suite
                _____
	 	 	Anaheim, California, 92863
	 	 	Attn: Chief Executive Officer
	 	 	Fax No: (   )
                _________________
	 	 	 
	If to Employee:	 	William C. Bousema
	 	 	1800 Katella Avenue, Suite _____
	 	 	Anaheim, California 92863______
	 	 	Fax
                No:_____________________

      

    

     

    (h)  Entire
      Agreement.Except
      for the Incentive Stock Option Agreement, the Restricted Stock Agreement and
      the
      Indemnification Agreement, this Agreement contains the entire understanding
      and
      agreement between the parties concerning the subject matter hereof and
      supersedes all prior agreements, understandings, discussions, negotiations
      and
      undertakings, whether written or oral, between the parties with respect
      thereto.

     

    (i)  Counterparts.
      This
      Agreement may be executed in two (2) or more counterparts, each of which shall
      be deemed to be an original, but all of which together shall constitute one
      and
      the same Agreement. Digitally transmitted signatures shall have the force and
      effect of original signatures.

     

    (j)  No
      Conflict of Interest.
      Employee agrees that, during the Employment Term, he will not knowingly become
      involved in a conflict between his personal interests and those of Company
      or
      any of its affiliates, and, upon discovery thereof, will not willfully allow
      such conflict of interest to continue. Employee agrees to disclose in writing
      to
      the Company facts that could reasonably be expected to involve a material
      conflict of interest upon Employee’s awareness that such a material conflict
      exist. The Company and Employee recognizes that it is impossible to provide
      an
      exhaustive list of actions or activities that constitute or might constitute
      a
      conflict of interest, but recognizes that these actions or activities may
      include the following:

     

    (i)  ownership
      of more than a 1% interest in any supplier, contractor, customer, or other
      person that does business with Company or any of its affiliates;

     

    
      
        
        

      

      
        11

        
          

        

      

      
        
        

      

    

     

    (ii)  acting
      in
      any capacity, including as a director, officer, employee, partner, consultant,
      or agent, for any supplier, contractor, customer, or other person that does
      business with Company or any of its affiliates;

     

    (iii)  acceptance,
      directly or indirectly, of payments, services, or loans (other
      than entertainment, gifts, or other sales incentives that may be furnished
      in
      the ordinary course of business)
      from a
      supplier, contractor, customer, or other person that does business with Company
      or any of its affiliates; and

     

    (iv)  appropriation
      by Employee or diversion to any other person, directly or indirectly, of any
      business opportunity in the business of marketing refined petroleum products
      in
      which it is known or could reasonably be anticipated that Company or its
      affiliates would be interested.

     

    (k)  Expenses.
      Except
      as otherwise expressly provided in this Agreement, each Party will bear its
      own
      costs and expenses incurred in connection with the preparation, execution and
      performance of this Agreement, including all fees and expenses of agents,
      representatives, financial advisors, legal counsel and accountants.

     

    (l)  Representation.
      Employee represents and warrants to the Company, and Employee acknowledges
      that
      the Company has relied on such representations and warranties in employing
      Employee, that neither Employee’s duties as an employee of the Company nor his
      performance of this Agreement will breach any other agreement to which Employee
      is a party, including without limitation, any agreement limiting the use or
      disclosure of any information acquired by Employee prior to his employment
      by
      the Company. In the course of performing Employee’s duties for the Company,
      Employee will not disclose or make use of any information, documents or
      materials that Employee is under any obligation to any other party to maintain
      in confidence. In addition, Employee represents and warrants and acknowledges
      that the Company has relied on such representations and warranties in employing
      Employee, that (i) he has not entered into, and will not enter into, any
      agreement, either oral or written, in conflict herewith.

     

    (m)  Construction.
      The
      Parties have participated jointly in the negotiation and drafting of this
      Agreement. 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 federal, state, local, or foreign law will be deemed also to refer to 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.

     

    
      
        
        

      

      
        12

        
          

        

      

      
        
        

      

    

     

    (n)  Electronic
      Signatures.
      Delivery of a copy of this Agreement bearing an original signature by facsimile
      transmission (whether directly from one facsimile device to another by means
      of
      a dial-up connection or whether mediated by the worldwide web), by electronic
      mail in “portable document format” (“.pdf”) form, or by any other electronic
      means intended to preserve the original graphic and pictorial appearance of
      a
      document, will have the same effect as physical delivery of the paper document
      bearing the original signature. “Originally signed” or “original signature”
means or refers to a signature that has not been mechanically or electronically
      reproduced.

     

     

    [SIGNATURE
      PAGE FOLLOWS]

     

    
      
        
        

      

      
        13

        
          

        

      

      
        
        

      

    

     

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

     

    
      	 	 	 
	 	
              UNITED
                FUEL & ENERGY CORPORATION

            
	 
 	 
 	 
 
	
            	By:  	/s/ Frank P. Greinke
	 	
              
Frank
              P. Greinke 
	 	President and Chief Executive Officer
              

    

     

     

    
      
        	 	 	 
	 	
                EMPLOYEE

              
	 
 	 
  
 
	 	/s/ William C. Bousema
	 	
                
WILLIAM
                C. BOUSEMA
	
              	       	 

      

       

      
        
          
          

        

        
          14

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