Document:

EXHIBIT 10.11

                            INDEMNIFICATION AGREEMENT

         This Indemnification Agreement (this "AGREEMENT") dated the 28th day of
February,  2005, by and between  GulfWest Energy Inc., a Texas  corporation (the
"COMPANY"), and John Loehr, 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:

                                       1
<PAGE>

                                   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
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.

                                       2
<PAGE>

         "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
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.

                                       3
<PAGE>

                                   ARTICLE 2
                             SERVICES TO THE COMPANY

         2.1 SERVICES TO THE COMPANY.  Indemnitee  agrees to serve as a director
of the Company.  Indemnitee may at any time and for any 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
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.

                                       4
<PAGE>

         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
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.

                                       5
<PAGE>

         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
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.

                                       6
<PAGE>

         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,
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.

                                       7
<PAGE>

         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
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.

                                       8
<PAGE>

         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
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.

                                       9
<PAGE>

         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
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.

                                       10
<PAGE>

         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
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).

                                       11
<PAGE>

         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 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.

                                       12
<PAGE>

         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.

                                   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.

                                       13
<PAGE>

         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
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.

                                       14
<PAGE>

                                   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
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):

                                       15
<PAGE>

                  If to Company:

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

                  If to Indemnitee:

                  John Loehr
                  16300 Addison Road, Suite 300
                  Addison, Texas 75001
                  Facsimile: (972) 248-4717

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>

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

                                                GULFWEST ENERGY INC.

                                                By: /S/ JOHN E. LOEHR
                                                -------------------------
                                                Name: John E. Loehr
                                                Title: CEO

                                                INDEMNITEE

                                                /S/ JOHN E. LOEHR
                                                -------------------------
                                                Signature

                                                JOHN E. LOEHR
                                                -------------
                                                Print Name

                  Signature Page to Indemnification AgreementEXHIBIT 10.12

                            INDEMNIFICATION AGREEMENT

         This Indemnification Agreement (this "AGREEMENT") dated the 28th day of
February,  2005, by and between  GulfWest Energy Inc., a Texas  corporation (the
"COMPANY"), and Allan Keel, 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:

                                        1
<PAGE>
                                   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
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.

                                        2
<PAGE>

         "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
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.

                                       3
<PAGE>

                                   ARTICLE 2
                             SERVICES TO THE COMPANY

         2.1 SERVICES TO THE COMPANY.  Indemnitee  agrees to serve as a director
of the Company.  Indemnitee may at any time and for any 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
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.

                                       4
<PAGE>

         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
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.

                                       5
<PAGE>

         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
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.

                                       6
<PAGE>

         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,
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.

                                       7
<PAGE>

         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
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.

                                       8
<PAGE>

         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
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.

                                       9
<PAGE>

         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
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.

                                       10
<PAGE>

         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
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).

                                       11
<PAGE>

         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 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.

                                       12
<PAGE>

         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.

                                   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.

                                       13
<PAGE>

         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
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.

                                       14
<PAGE>

                                   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
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):

                                       15
<PAGE>

                  If to Company:

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

                  If to Indemnitee:

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

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>

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

                                        GULFWEST ENERGY INC.

                                        By: /S/ JOHN E. LOEHR
                                        --------------------------
                                        Name: John E. Loehr
                                        Title: CEO

                                        INDEMNITEE

                                        /S/ ALLAN D. KEEL
                                        --------------------------
                                        Signature

                                        ALLAN D. KEEL
                                        --------------------------
                                        Print Name

                  Signature Page to Indemnification Agreement

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00082-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00082-of-00352.parquet"}]]