Document:

Exhibit 10.2

                              GULFWEST ENERGY, INC.

                            2005 STOCK INCENTIVE PLAN

                        RESTRICTED STOCK AWARD AGREEMENT

This Restricted Stock Award Agreement (the "Agreement") is made and entered into
as of the date of grant set forth  below (the  "Date of  Grant") by and  between
GulfWest Energy, Inc., a Texas corporation (the "Company"),  and the participant
named below (the "Participant"). Capitalized terms not defined herein shall have
the meaning  ascribed to them in the Company's  2005 Stock  Incentive  Plan (the
"Plan").

          Participant:

          Social Security Number:

          Address:                          GulfWest Energy Inc.
                                            --------------------

                                            480 N. Sam Houston Pkwy. E.
                                            ---------------------------

                                            Suite 300
                                            ---------

                                            Houston, TX 77060
                                            -----------------

          Total Restricted Shares:

          Fair Market Value Per Share:

          Fair Market Value Aggregate:      (on Date of Grant)
                                            ------------------

          Purchase Price/Consideration:

          Date of Grant:

     1.   Grant of Restricted  Shares.  The Company hereby grants to Participant
the total number of  restricted  shares of Common Stock of the Company set forth
above as Total Restricted Shares (the "Shares"), subject to all of the terms and
conditions of this Agreement and the Plan.

     2.   Vesting Period.

          2.1. Regular  Vesting.   Provided  Participant  continues  to  provide
Continuous Service to the Company or any Affiliate, the Shares will become fully
vested  on the ____  anniversary  of the Date of Grant  set  forth  above.  When

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issued, the certificate  evidencing the Shares will be held by the Company until
the Shares are fully vested,  at which time the certificate  will be released to
the Participant.

          2.2. Change of  Control.  In the event of a Change of Control (as such
term is defined in the Plan),  vesting shall be accelerated and the Shares shall
become  immediately  vested with  respect to one hundred  percent  (100%) of the
Shares  without  regard  to the  Participant's  number  of years  of  Continuous
Service.

          2.3. Termination for Cause or Participant's Voluntary Resignation.  If
Participant's  Continuous  Service is  terminated by the Company for Cause or by
the Participant's  voluntary resignation,  the Company may exercise its Right of
Repurchase or otherwise  reacquire,  or the Participant  shall forfeit  unvested
shares granted in consideration of future services, and any or all of the Shares
which have not vested as of the date of  termination  shall be forfeited and the
Participant shall have no rights with respect to the Shares.

          2.4. Termination Without Cause or Unsuccessful Re-election Bid. In the
event  Participant's  Continuous  Service is terminated  by the Company  without
Cause  (as  such  term is  defined  in the  Plan) or the  Participant's  bid for
re-election to the Company's Board of Directors is  unsuccessful,  vesting shall
be accelerated  and the Shares shall become  immediately  vested with respect to
one hundred  percent (100%) of the Shares  without  regard to the  Participant's
number of years of Continuous Service.

          2.5. Death  or  Disability.  In  the  event  Participant's  Continuous
Service is  terminated  on  account  of Death or  Disability,  for  purposes  of
determining  vesting under Section 2.1,  Participant shall be deemed to continue
Continuous Service through the date that is the anniversary of the Date of Grant
coincident with or next following the date of such termination.

     3.   Compliance  with Laws and  Regulations.  The  issuance and transfer of
Shares shall be subject to  compliance by the Company and  Participant  with all
applicable  requirements  of  federal  and  state  securities  laws and with all
applicable  requirements  of any stock  exchange on which the  Company's  Common
Stock  may be  listed  at the time of such  issuance  or  transfer.  Participant
understands  that the Company is under no  obligation to register or qualify the
Shares with the SEC, any state  securities  commission or any stock  exchange to
effect such compliance.

     4.   General.

          4.1. Interpretation.  Any dispute regarding the interpretation of this
Agreement shall be submitted by Participant or the Company to the  Administrator
of the Plan (the  "Administrator")  for review. The resolution of such a dispute
by the Administrator shall be final and binding on the Company and Participant.

          4.2. Entire Agreement.  The Plan is incorporated  herein by reference.
This Agreement and the Plan  constitute the entire  agreement of the parties and
supercede  all prior  undertakings  and  agreements  with respect to the subject

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matter hereof.  If any inconsistency  should exist between the  nondiscretionary
terms and  conditions of this  Agreement and the Plan, the Plan shall govern and
control.

          4.3. Notices.  Any notice  required  to be given or  delivered  to the
Company under the terms of this  Agreement  shall be in writing and addressed to
the Corporate Secretary of the Company at its principal  corporate offices.  Any
notice required to be given or delivered to Participant  shall be in writing and
addressed to Participant at the address indicated above or to such other address
as such party may  designate in writing  from time to time to the  Company.  All
notices  shall be deemed to have been  given or  delivered  upon:  (a)  personal
delivery; (b) five (5) days after deposit in the United States mail by certified
or registered  mail (return receipt  requested);  (c) two (2) business day after
deposit  with any  return  receipt  express  courier  (prepaid);  or (d) one (1)
business day after transmission by facsimile.

          4.4. Successors and Assigns.  The Company may assign any of its rights
under this  Agreement.  This  Agreement  shall be binding  upon and inure to the
benefit  of  the  successors  and  assigns  of  the  Company.   Subject  to  the
restrictions on transfer set forth herein,  this Agreement shall be binding upon
Participant  and   Participant's   heirs,   executors,   administrators,   legal
representatives, successors and assigns.

          4.5. Governing Law. This Agreement  shall be governed by and construed
in accordance  with the laws of the State of Texas without  giving effect to its
conflict of law principles.  If any provision of this Agreement is determined by
a court of law to be  illegal  or  unenforceable,  then such  provision  will be
enforced to the maximum  extent  possible and the other  provisions  will remain
fully effective and enforceable.

     5.   Acceptance.  Participant hereby acknowledges  receipt of a copy of the
Plan and this  Agreement.  Participant  has read and  understands  the terms and
provisions thereof, and accepts the award of the Shares subject to all the terms
and conditions of the Plan and this  Agreement.  Participant  acknowledges  that
there may be adverse tax  consequences  upon  disposition of the Shares and that
Participant should consult a tax advisor prior to such disposition.

                            [SIGNATURE PAGE FOLLOWS]

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     IN WITNESS WHEREOF, the Company has caused this Agreement to be executed by
its duly authorized  representative and Participant has executed this Agreement,
effective as of the Date of Grant.

                                 GULFWEST ENERGY, INC.

                                 By:
                                 Name:
                                 Title:

                                 PARTICIPANT

                                 (Signature)

                                 Printed Name:Exhibit 10.3

                            INDEMNIFICATION AGREEMENT

     This  Indemnification  Agreement (this  "Agreement")  dated the ____ day of
_______,  2005, by and between  GulfWest Energy Inc., a Texas  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 shareholders 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 (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,
officers and 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, applicable law, the Articles and/or the
Bylaws or any resolutions adopted pursuant thereto (including any contractual or
other rights of Indemnitee that may exist).

     F.   Indemnitee is a director  and/or officer of the Company and his or her
willingness to continue to serve in such capacity is predicated,  in substantial
part,  upon the  Company's  willingness  to indemnify  him or her to the fullest
extent  permitted  by the  laws  of the  State  of  Texas  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:

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                                   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  or agent of the  Company or a  director,  officer,  partner,
venturer,  proprietor,  trustee,  employee,  agent or similar functionary 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,  partner,
venturer, proprietor, trustee, employee, agent or similar functionary of another
Enterprise  if  Indemnitee  is or was serving as a director,  officer,  partner,
venturer,  proprietor,  trustee,  employee, agent or similar functionary 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 or  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 named  defendant  or  respondent  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 attorneys' 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, or as a result of being, 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

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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.

     "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 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 an
actual 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 of
Indemnitee  to act) or any  action or  alleged  action  (or  failure  or alleged
failure  to act) on  Indemnitee's  part,  while  acting in his or her  Corporate
Status or (ii) the fact that  Indemnitee is or was serving at the request of the
Company as director, officer, employee, partner, venturer,  proprietor,  trustee
or agent or similar functionary 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 or her 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"  as a  trustee,
employee,  agent or similar  functionary of an employee benefit plan include any
service as a director,  officer,  employee or agent of the Company which imposes
duties,  liabilities,  Losses or other  obligations on, or involves services by,
such person with respect to any  employee  benefit  plan,  its  participants  or
beneficiaries; and a person who acted or failed to act in the performance of his
or her duties in good faith and for a purpose he or she  reasonably  believed to
be in the best interests of the  participants  and  beneficiaries of an employee

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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.

                                   ARTICLE 2
                             SERVICES TO THE COMPANY

     2.1  Services to the Company.  Indemnitee  agrees to serve as a ________ of
the  Company.  Indemnitee  may at any time and for any or no 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
reasonable  Expenses and all 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 paid or incurred by Indemnitee in connection
with such Proceeding.  In addition,  and not withstanding anything herein to the
contrary, the Company will fully indemnify,  defend and hold harmless Indemnitee
against  any and all  Expenses  and all  Losses  that  are paid or  incurred  by
Indemnitee in connection with any threatened, pending or completed legal 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  formal or
informal,  and in each case whether or not  commenced  prior to the date of this
Agreement  and  whether  or not based on facts,  circumstances,  or events  that
occurred prior to the dates of this Agreement,  which Indemnitee was, is or will
be involved as a party or otherwise,  which is brought or asserted,  directly or
indirectly,  by, on behalf, or in the name of Scott Brown, Volant Energy LLC (or
any  similar  entity  owned  or  controlled  by  Scott  Brown),  or any of their
respective  affiliates  or  assigns  arising  out  of or  relating  to  (i)  the
formation,  operations,  business proposals or any actual or alleged opportunity
of Volant Energy LLC (or any similar  entity owned or controlled by Scott Brown)
directly or indirectly related to the Company,  (ii) discussions,  negotiations,
and actual or proposed  transactions between or among Oaktree Capital Management
LLC or any of its  affiliates,  the  Company,  Scott  Brown  and/or  Indemnitee,
including  without  limitation  the  transactions  contemplated  by that certain
Subscription  Agreement  dated the dated  hereof  between the Company and OCM GW
Holdings,  LLC, or (iii)  otherwise  relating to or involving  the Company.  For
purposes of this  Agreement,  the  meaning of the phrase "to the fullest  extent

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permitted by law" will include to the fullest extent permitted by Article 2.02-1
of the Texas Business  Corporation  Act ("TBCA") or any section that replaces or
succeeds  Article  2.02-1 of the TBCA with respect to such  matters,  but in the
case of any  such  replacement  or  succession,  only to the  extent  that  such
succession  permits the Company to provide broader  indemnification  rights than
were permitted prior thereto.

     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 wholly  successful,  on the
merits or  otherwise,  in defense of any  Proceeding  or any part  thereof,  the
Company will indemnify Indemnitee against all reasonable Expenses and all Losses
that are actually 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 reasonable Expenses and all Losses that are actually 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 or abandonment 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
or her Corporate  Status, a witness in any Proceeding to which Indemnitee is not
at such  time a named  defendant  or  respondent,  the  Company  will  indemnify
Indemnitee  against all Expenses  actually  paid or incurred by Indemnitee or on
his or her behalf in connection therewith.

     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

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actually  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 affirmation of Indemnitee's  good faith belief that Indemnitee
has met the  standard  of  conduct  necessary  for such  indemnification  and an
undertaking (hereinafter,  collectively,  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 TBCA, 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
5 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 TBCA or any other applicable law.

                                   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

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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 or her  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.

     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  the  Indemnitee:  (1) so  long  as  there  are
Disinterested Directors with respect to such Proceeding,  a majority vote of the
Disinterested Directors,  regardless of whether the Disinterested Directors make
up a quorum of the Board of Directors, (2) a majority vote of a committee of one
or  more  Disinterested   Directors   designated  by  a  majority  vote  of  the
Disinterested  Directors, (3) Independent Counsel in a written opinion delivered
to the Board of Directors, a copy of which will also be delivered to Indemnitee,

                                       7

<PAGE>

or (4) by the  shareholders  in a vote  excluding  shares held by all  directors
other than Disinterested Directors. In the event that there are no Disinterested
Directors,  the  determination  shall  be made  in  accordance  with  (4) of the
preceding  sentence.  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  to the extent permitted by applicable law).
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 in accordance with (1) or (2)
of Section 6.2. The Company will give written notice to Indemnitee  advising him
or her of the identity of the  Independent  Counsel so  selected.  In any event,
Indemnitee  may, within 10 days after such written notice of selection is given,
deliver to the Company 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  reasonable
particularity  the factual basis of such  assertion.  Absent a proper and timely
objection in accordance with this Agreement,  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  thirty 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  an  appropriate  court of the  State of  Texas or any  other  court of
competent  jurisdiction  for resolution of any objection  which has been made by
Indemnitee  to the Company'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.

     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

                                       8

<PAGE>

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  also  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 or other agents 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, that 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.

     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 or (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  or her  obligations  pursuant  to  Section  6.8  and  (ii)  such
indemnification is not prohibited under applicable law; provided,  however, that

                                       9

<PAGE>

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
20 business 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,  notwithstanding anything
herein to the contrary, 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 2 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 2 year period).

     6.10 Report to Shareholders.  To the extent required by applicable law, any
indemnification  or advance of expenses to Indemnitee  in  accordance  with this
Agreement  shall be reported in writing to the  shareholders  with or before the
notice or waiver of notice of the next  shareholders  meeting  or with or before
the next  submission to  shareholders  of a consent to action  without a meeting
and,  in any  case,  within  the  12  month  period  immediately  following  the
indemnification or advance.

                                   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 or her
Corporate Status, and to ensure the Company's performance of its indemnification

                                       10

<PAGE>

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, to the extent
permitted by any other  agreements to which the Company is a party,  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 Texas, or in any other
court  of  competent   jurisdiction,   of  his  or  her   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 Texas 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.

     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

                                       11

<PAGE>

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 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  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 or her 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 5
business 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  and other
provisions 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.

                                   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 shareholders, a resolution of the

                                       12

<PAGE>

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 shareholders, 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  TBCA,  whether  by  statute  (including  the Texas
Business   Organizations   Code)   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.

                                       13

<PAGE>

                                   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 10 business 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.

     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's  Prior Consent  Required.  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

                                       14

<PAGE>

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,  that  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, except
for Article  13,  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) 10 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.

     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;  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; provided, further, that if
the Company  changes it domicile from Texas to Delaware  pursuant to a merger of
the Company  into a wholly owned  subsidiary  or  otherwise,  the Company or its
successor,  as the case may be,  shall enter into an agreement  with  Indemnitee
substantially  similar  to  this  Agreement  but  with  such  changes  as may be
necessary to conform to Delaware law. 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

                                       15

<PAGE>

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 Company:

          GulfWest Energy Inc.
          480 N. Sam Houston Parkway East
          Houston, Texas 77060
          Attention: ____________
          Facsimile: (281) 260-8488

          If to Indemnitee:

          -------------------------

          -------------------------
          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 state or federal  court sitting in Harris  County,
Texas 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.

                                       16

<PAGE>

     13.5 Submission to Jurisdiction.  Any action, suit or proceeding seeking to
enforce any provision of, or based on any matter arising out of or in connection
with,  this  Agreement  may only be brought in a district  court of the State of
Texas  sitting in Harris  County,  which will be the  exclusive  and only proper
forum for adjudicating such action, suit or proceeding,  and each party consents
to the exclusive  jurisdiction  and venue of such court (and of the  appropriate
appellate  courts  therefrom)  in  any  such  action,  suit  or  proceeding  and
irrevocably  waives,  to the fullest extent permitted by law, any objection that
it may now or hereafter have to the laying of the venue of any such action, suit
or  proceeding  in any such court or that any such  action,  suit or  proceeding
brought in any such court has been brought in an inconvenient forum.  Process in
any such action,  suit or proceeding  may be served on any party anywhere in the
world, whether within or without the jurisdiction of any such court.

     13.6 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.

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

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

     13.9 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

     13.10 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.

                                       17

<PAGE>

     13.11 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.  For  purposes  of
determining   whether  a  party  has  signed  this  Agreement  or  any  document
contemplated  hereby or any  amendment  or  waiver  hereof,  only a  handwritten
signature  on a paper  document or a  facsimile  transmission  of a  handwritten
original signature will constitute a signature, notwithstanding any law relating
to or enabling the creation,  execution or delivery of any contract or signature
by electronic means.

     13.12 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]

                                       18

<PAGE>

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

                                   GULFWEST ENERGY INC.

                                   By:
                                      -----------------------------------------
                                       Name:
                                       Title:

                                   INDEMNITEE

                                   Signature

                                   ------------------------------
                                   Print Name

                   Signature Page to Indemnification Agreement

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