Document:

DEREK RESOURCES CORPORATION
               Suite 1730 - 355 Burrard Street
                       Vancouver, B.C.
                           V6C 2G8

October 30, 2001

Mr. Dave Aldrich
Western Industrial, Inc.
P.O. Box 40139
Grand Junction, CO 81504
Tel. 719-784-3191
                                Two Pages By Fax: 505-632-0487

Dear Mr. Aldrich:

Re       LAK Ranch Project, Wyoming, U.S.A.

When  countersigned by each of the parties, the following will
set  forth  the terms and conditions pursuant to  which  Derek
Resources  Corporation ("Derek") and Western Industrial,  Inc.
("Western") have mutually agreed to defer payment  of  amounts
currently owing by Derek to Western:

1.                   Western  will agree to defer  payment  of
     US$89,838.35 (the "Debt") in amounts currently payable by
     Derek  to  Western  until August 31, 2002.   Any  amounts
     incurred by Derek for work by Western in excess  of  this
     amount  (US$89,838.35) will be due  and  payable  in  the
     normal course of business.

2.                   Western will receive, and Derek will pay,
     interest  on the principal amount deferred at a  rate  of
     ten per cent (10%) per annum, such interest to be accrued
     commencing August 1, 2001.

3.                    There  are  no  fixed  repayment  terms;
     however  all  interest and principal  is  fully  due  and
     payable by no later than August 31, 2002.  Derek may make
     interim  payments of principal and interest at any  time,
     and  may  repay  all  amounts due at  any  time,  without
     penalty   for   early  repayment.   Subsequent   interest
     calculations will then be made on the remaining principal
     outstanding.  Payments by Derek will be made by certified
     cheque  and will be considered effective at the date  and
     time   upon   which  Derek  completes  the  certification
     process.

4.                  In addition to the above detailed interest
     payments  and  in  consideration for the deferral,  Derek
     will  grant a permanent, gross overriding royalty on  the
     LAK   Ranch   Property  to  Western  in  the  amount   of
     US$0.0089838  per barrel of oil produced net  to  Derek's
     interest.

                             -2-

5.                  As security for the amount deferred, Derek
     will  grant  a  lien in favour of Western, first  on  the
     surface  equipment  owned by Derek  and  located  on  the
     property  and,  secondly, if required to satisfy  amounts
     outstanding, on the property itself.

6.                  Derek agrees that it will endeavour to pay
     off  all  amounts  due to Western and any  other  debtors
     before   committing  any  available  capital   to   plant
     expansion,    new    projects   or   other    unnecessary
     expenditures.

7.                   Derek agrees that it will not enter  into
     any  agreement  or  arrangement with  any  other  of  its
     creditors  on terms more favourable than those set  forth
     in  this agreement with Western. However, Derek may  make
     subsequent  financial arrangements as they  see  fit,  so
     long   as  the  proceeds  of  any  significant  financial
     arrangements  result in the payment  to  Western  of  all
     principal and interest amounts due.

8.                   Western may at any time and from time  to
     time convert, in whole or in part, the amounts payable to
     Western  by Derek into common shares of Derek at a  price
     of  Cdn$0.75 per share. In order to exercise the right of
     conversion,  Western shall deliver to Derek,  at  Derek's
     address  shown above, notice of the amount  of  the  Debt
     being convened. Derek will deliver to Western within five
     business   days   thereafter  a  share   certificate   or
     certificates  representing  the  number  of   shares   so
     converted. The right to convert the Debt to shares  shall
     expire on the earlier of the date that the Debt is repaid
     or August 31, 2002 unless extended by the parties.  It is
     acknowledged  that any shares, which  may  be  issued  on
     conversion  of  the Debt, will be subject  to  applicable
     hold periods in accordance with the rules of the Canadian
     Venture Exchange.

9.                   This  Agreement will be  subject  to  the
     prior approval of the Canadian Venture Exchange.

If  you are in agreement with the foregoing, please sign  this
letter where indicated below and return same to us and we will
instruct  our  solicitors  to make the  required  filings  for
Canadian Venture Exchange approval.

Yours truly,

DEREK RESOURCES CORPORATION

PER:    /s/ Frank Hallam
            ---------------
            Frank R. Hallam

                 ACKNOWLEDGED AND AGREED BY
                  WESTERN INDUSTRIAL, INC.

PER:    /s/ Dave Aldrich
            ------------
            Dave AldrichEQUIVA
                                               TRADING COMPANY

August 9, 2002

DEREK RESOURCES CORP
WIRE PAYMENT
335 BURRARD ST STE 1730
VANCOUVER BC CANADA V6C2G8, 1-0

Dear Sir or Madam:

Re: Change In Posted Price

You  were  recently  sent  a Contract Assignment  from  Equiva
Trading  Company (ETCO) to Shell Trading (US) Company (STUSCO)
effective September 1, 2002. August 31, 2002 will be the  last
day  Equiva  Trading  Company will post  for  crude  oil,  and
effective September 1, 2002, STUSCO will commence posting  for
crude oil.

Accordingly, we would appreciate your acknowledgement  of  the
change   of  posted  prices  on  crude  contracts  (listing[s]
enclosed)  from  ETCO to Shell Trading (US) Company  effective
September 1, 2002.

We  would  appreciate receiving your response by  returning  a
signed copy of this letter, either by mail or fax to (713) 246-
8674  within ten days from the date of this letter. If  we  do
not receive your response within ten days, we will assume your
consent to the change of posted prices.

Thank you for your cooperation.

Sincerely,

/s/ Matt McComiskey
    ---------------
    Matt McComiskey
    Vice President

Attachments

     Crude Contract Numbers:             98679R01

     This will acknowledge the change of posted prices on our
contracts that were assigned from Equiva Trading Company to
Shell Trading (US) Company:

     By:       /s/ Frank Hallam

     Title:        CFO

     Date:         August 29/02Document ID No. 355-002

August 19 2002

Derek Resources Corporation
Suite 1730, Marine Building
355 Burrard Street
Vancouver, B. C.
V6C 2G8

Attention:              Frank Hallam
                        Director, V.P. Finance

Dear Mr. Hallam:

Re:       Leasing Proposal for Derek Resources Corporation  of
    Office Space on the 15th Floor
    at Marine Building, 355 Burrard Street Vancouver, B. C.

We  are  pleased on behalf of Landlord to submit the following
proposal  to  lease  office  space in  Marine  Building,  (the
"Building") on the following terms and conditions.

1.     Landlord:                                        Marine
                    Building  Holdings Ltd. and  OMERS  Realty
                    Corporation   as  represented   by   their
                    managing agent, Oxford Management Services
                    Inc.

2.     Tenant:                                           Derek
                    Resources Corporation

3.     Premises:                                             A
                    portion  of the 15th floor having a  gross
                    leasable   area  of  approximately   1,200
                    square  feet  as shown blacklined  on  the
                    plan attached as Schedule A.

                    The  gross leasable area shall be  subject
                    to  adjustment  upon final measurement  by
                    Landlord, in accordance with the method of
                    measurement defined in the Lease.

4.     Commencement Date:                The Commencement Date
                    shall  be  December 1,  2002.  The  Tenant
                    shall be permitted to have Early Occupancy
                    of  the Premises as noted below not  later
                    than  October 1, 2002. The Landlord  shall
                    use   reasonable  efforts  to   have   the
                    Landlords Work outlined below complete  by
                    October 10th, 2002.

Oxford Properties Group             Tel: 604-893-3200
401 West Georgia Street             Fax: 604-893-3294
Suite 1700
oxfordproperties.com
Vancouver, B. C., V6B 5A1
August 19, 2002

5.     Early Occupancy:                        Provided Tenant
                    has  executed and delivered the Lease, the
                    Premises  are  vacant and Landlord's  Work
                    has   been  substantially  completed   and
                    Tenant   has   delivered  to  Landlord   a
                    certificate of insurance indicating that a
                    policy  of  Tenant's  insurance  for   the
                    Premises, as described in the Lease, is in
                    full  force  and  effect, Tenant  will  be
                    permitted  non-exclusive  access  to   the
                    Premises prior to the Commencement Date to
                    carry  out  Tenant's Work  and/or  conduct
                    Tenant's business.

                    Tenant  will not be responsible  for  Rent
                    and   Tenant's  Proportionate   Share   of
                    Operating  Costs  and  Taxes  during  this
                    period  but all other terms of  the  Lease
                    shall apply.

6.     Term:                                               The
                    Term  of the Lease shall be two (2)  years
                    from the Commencement Date.

7.     Rent:                                              Rent
                    shall be payable monthly in advance by way
                    of   electronic  funds  transfer,  without
                    deduction,  at  the  rate  of  $16.00  per
                    square  foot  of gross leasable  area  per
                    annum.

8.     Operating Costs  &  Taxes:         In addition to Rent,
                    Tenant  shall be responsible for  its  pro
                    rata  share  of  all costs,  charges,  and
                    expenses  attributable to  the  operation,
                    repair, maintenance and management of  the
                    Building including capital taxes, if  any,
                    large corporation tax and realty taxes  as
                    reasonably allocated by Landlord,  all  as
                    defined  in  Exhibit  "B"  to  the   Lease
                    ("Operating Costs and Taxes").  This  cost
                    is  estimated at $12.97 per square foot of
                    gross leasable area per annum for the year
                    2002 and is subject to annual adjustment.

                    Tenant  shall also be responsible for  the
                    cost  of  maintaining any specialty  light
                    fixtures in the Premises.

9.     Condition of Premises:                  Subject      to
                    Landlord's Work as outlined herein, Tenant
                    accepts  the  Premises in a "then  as  is"
                    condition  and acknowledges that  Landlord
                    has  no  obligations with respect  to  the
                    Premises for any alterations, improvements
                    or  additions, any of which, if  required,
                    shall  be  completed  by  Tenant  at   its
                    expense, in accordance with the provisions
                    of  the Lease and any construction methods
                    and procedures manual for the Building.

10.  Landlord's Work:                         Prior   to   the
                    Commencement   Date,  Landlord,   at   its
                    expense,  shall:  install demising  walls,
                    create one (1) new office, and create  one
                    kitchen/coffee area, all as  indicated  on
                    the  plan  attached hereto as Schedule  A.
                    All  other  work subsequent to  this  work
                    shall  be  treated  as  Tenant's  Work  as
                    outlined below.

11.  Tenant's Work                                Subject   to
                    Landlord's Work as outlined herein, Tenant
                    agrees to lease the Premises in a "then as
                    is"  condition. Tenant shall pay  for  the
                    cost  of  the  design,  co-ordination  and
                    complete  construction of  any  additional
                    leasehold  improvements (and  any  special
                    requirements beyond those now existing  in
                    the  Premises) all in accordance with  the
                    provisions of the attached Lease, and  any
                    construction   methods   and    procedures
                    manual  for  the Building ("Tenants Work").

12.  Lease:                                                The
                    Lease  shall  be in the attached  standard
                    form and shall be prepared by Landlord  to
                    reflect the terms of this proposal. Tenant
                    shall execute such Lease within seven  (7)
                    business days of delivery of the Lease  by
                    Landlord.  Tenant shall have no  right  to
                    occupy the Premises for any purpose  until
                    the   Lease   is   fully   executed,   and
                    Landlord's  Work shall not commence  until
                    the Lease is fully executed.

13.  Deposit:                                           Tenant
                    shall  pay  to  Landlord a deposit  in  an
                    amount  equal  to the last  month's  gross
                    rent   which   shall  accompany   Tenant's
                    acceptance of this proposal and which will
                    be  held  as  security to the end  of  the
                    Lease  for  the due and proper performance
                    of  all  the terms and conditions  of  the
                    Lease.

14.  Use:                                                  The
                    Premises shall be actively, diligently and
                    continuously used and occupied only  as  a
                    business  office and Tenant shall  operate
                    the  business  office  in  a  first-class,
                    reputable  manner befitting the reputation
                    and image of the Building.

15.  Required Conditions                  For the purposes  of
                    this proposal and the Lease, Tenant agrees
                    that  the  following shall constitute  the
                    required    conditions   (the    "Required
                    Conditions"):

                    (a)        execution and delivery  of  the
                       Lease by Tenant and Landlord;

                    (b)        Tenant has paid all Rent as and
                       when  due  and punctually observed  and
                       performed  the  terms,  covenants   and
                       conditions  contained  in   the   Lease
                       throughout  the Term to the  applicable
                       date;

                    (c)        Tenant  is  in  possession  and
                       occupancy of the whole of the  Premises
                       and  is  carrying on business therefrom
                       and  has not sublet at any time all  or
                       any  part  of the Premises or  assigned
                       the Lease;

                    (d)       except where the Transfer occurs
                       as  a  result of trading in the  shares
                       of  Tenant listed on a recognized stock
                       exchange   in  Canada  or  the   United
                       States,  there has not been a Transfer,
                       and

                    (e)         no   lien,  (construction   or
                       otherwise)   affects  the   Land,   the
                       Premises or the Building, and no  claim
                       under  workplace safety  and  insurance
                       legislation    has   been    made    in
                       connection with anything done by or  on
                       behalf of Tenant.

16.  Assignment of Proposal:           Tenant shall not assign
                    or  transfer, directly or indirectly, this
                    proposal without the prior written consent
                    of   Landlord,   which  consent   may   be
                    unreasonably withheld.

17.  Transmission via  Facsimile:     All parties  agree  that
                    this   proposal  may  be  transmitted   by
                    facsimile device and that the reproduction
                    of  signatures by way of facsimile  device
                    will    be   treated   as   though    such
                    reproductions were executed originals  and
                    communication by such means will be  legal
                    and binding.

18.  Conditions of Proposal:            This proposal is
subject to the following conditions:

                      (a)             Landlord's senior
                          executive approval.

                      (b)            the Landlords review and
                          approval of the Tenant's financial
                          standing; and,

                      (c)          the  Landlord  successfully
                          negotiating  a  surrender   of   tat
                          portion of that portion of the Lease
                          covering  the  Premises,  on   terms
                          satisfactory to the Landlord.

                      The  above conditions are for  the  sole
                      benefit  of  Landlord and  may  only  be
                      waived  by  Landlord. In the absence  of
                      notice in writing to the contrary by  or
                      on  behalf  of Landlord to Tenant  given
                      prior  to  the expiration of the  above-
                      noted   time  period,  these  conditions
                      shall   be  deemed  not  to  have   been
                      satisfied or waived by Landlord and this
                      proposal shall be null and void.

                      (d)          the  Tenant's  review   and
                          approval   of  a  design   for   the
                          Landlord's  Work to be completed  in
                          the   Premises  within   three   (3)
                          business days of Landlord and Tenant
                          acceptance of this proposal.

                      The  above  condition is  for  the  sole
                      benefit of Tenant and may only be waived
                      by  Tenant. In the absence of notice  in
                      writing to the contrary by or on  behalf
                      of Tenant to Landlord given prior to the
                      expiration   of  the  above-noted   time
                      period,  this condition shall be  deemed
                      not to have been satisfied or waived  by
                      Landlord and this proposal shall he null
                      and void.

This  proposal is open for your acceptance until 4:00 p.m.  on
August 23, 2002, and if not accepted by then, will be null and
void  and  of  no further effect.  This proposal may  only  be
accepted  by return of the signed counterpart and the  payment
of  the Deposit prior to the time of its expiration.  We  look
forward  to  your favorable response and should you  have  any
questions  regarding this proposal, please call the writer  at
604-893-3257.

Sincerely,

OXFORD PROPERTIES GROUP
on behalf of Landlord

/s/ Chuck We
    --------
    Chuck We
    Leasing Manager

TENANT'S ACCEPTANCE (corporation)

The  undersigned, Derek Resources Corporation, hereby  accepts
the  above  proposal  upon  the terms  and  conditions  stated
herein.

DATED at Vancouver this 23 day of August, 2002

DEREK RESOURCES CORPORATION

Per:   /s/ Frank Hallam         Per:    Brent Ehrl
           ------------                 ----------
Name:      Frank Hallam         Name:   Brent Ehrl
Title:     Director & CFO       Title:  Corporate Secretary

           Having authority to bind the Corporation

This is page 5 of a leasing proposal for Derek Resources
Corporation dated August 19, 2002.

September 3, 2002
                                                      VIA FAX

Derek Resources Corporation
Suite 1730, Marine Building
355 Burrard Street
Vancouver, B. C.
V6C 2G8

Attention:              Frank Hallam
                        Director, V.P. Finance

Dear Sirs:

Re:          Leasing Proposal for Derek Resources Corporation
                Re 15th floor premises, Marine Building
                355 Burrard Street, Vancouver, B.C.

Further  to  our  proposal  dated  August  19,  2002  and  our
subsequent  telephone conversation, enclosed for  your  review
and   acceptance  is  a  revised  floor  plan  reflecting  the
relocation of the premises to allow us to accommodate  another
prospective  tenant's  space requirements.  The  area  of  the
premises  as indicated in the enclosed layout is approximately
1,000 square feet, subject to final legal survey.

Please confirm your acceptance of this revised plan by signing
both  copies  of  this  letter  where  indicated  below.  Upon
completion, return both copies to this office for execution by
the  senior management of Oxford Management Services  Inc.  as
managing agent for the Landlord. A fully executed copy of this
letter agreement will be returned to you for your files.

Oxford Properties Group                   Tel:  604-893-3200
401 West Georgia Street                   Fax:  604-893-3294
Suite 1700                                oxfordproperties.com
Vancouver, British Columbia.
V6B 5A1

If  you have any questions with respect to the above or if  we
can  be of further assistance do not hesitate to contact Chuck
We at 604-893-3257 or the undersigned at 604-893-3202.

Yours truly,

OXFORD PROPERTIES GROUP

/s/ Chuck We
    --------
    Chuck We
    Leasing Manager

Enclosure:  Revised plan showing layout of premises

AGREED TO AND ACCEPTED this 3 day of Sept., 2002

DEREK RESOURCES CORPORATION

/s/ Frank Hallam
--------------------
Signature

Frank Hallam                    CFO
---------------------------------------
Name in Print                   Title

AGREED TO AND ACCEPTED this ________ day of ____________, 2002

MARINE BUILDING HOLDINGS LTD. and OMERS REALTY CORPORATION  by
their managing agent, OXFORD MANAGEMENT SERVICES INC., without
personal liability.

David W. Harper
Vice President, Vancouver

Oxford Properties Group                   Tel:   604-893-3200
401 West Georgia Street                   Fax:   604-893-3294
Suite 1700                                oxfordproperties.com
Vancouver, British Columbia.
V6B 5A1

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