Document:

ex10_1.htm

    
      

    

    
      Exhibit
10.1

       

      PARTICIPATION
AND

      EXCLUSIVITY
AGREEMENT

      

      

      This
PARTICIPATION AND EXCLUSIVITY AGREEMENT (the “Agreement”) is made among
Amerpro Industries US Ltd. (the “Participant”), a wholly owned
subsidiary of Amerpro Industries, Inc. (the “Parent”), Gulf Western
Petroleum Corporation (“GWPC”) and Caskids Operating
Company (“Operator”) and
is effective June 10, 2008 (the “Effective
Date”).  Participant and GWPC are each a “Party” and collectively “Parties”.  In
addition to granting an exclusive option to Participant to participate in
drilling on the Lease, this Agreement sets forth the terms, conditions, and
consideration of Participant for its evaluation of: (a) GWPC’s interests in and
to that certain oil, gas and mineral lease (the “Lease”) covering certain lands
(the “Prospect Area”)
located in Wharton County, Texas, as described on the attached Exhibit “A”; (b)
the Lease; and (c) title to the Prospect Area, and its subsequent participation
in the drilling and completion of certain oil and/or gas wells upon the Prospect
Area.

      

      Subject
to the terms and conditions set forth herein, GWPC hereby grants to Participant
the exclusive right to conduct due diligence and to elect to participate in
drilling opportunities on the Lease.  This exclusive right shall be in
effect from the Effective Date until 5 pm August 1, 2008 (the “Exclusivity
Period”).

      

      Upon
Closing, this Agreement shall govern the drilling and development of the
Anderson No. 1, Anderson No. 2, Anderson No. 3 and Anderson No. 4 wells (each a
“Prospect Well” and
collectively, the “Prospect
Wells”) within the Prospect Area.

      

      

      ARTICLE
1

      

      EXCLUSIVITY
PERIOD AND DUE DILIGENCE

      

      Payment
of Deposit

      

      1.1                  
Subject to the terms and provisions of this Agreement, Participant shall deliver
to GWPC a deposit subject to the following terms and conditions  (the
“Deposit”).  Upon
execution of this Agreement, Participant shall pay to GWPC  the amount
of one hundred thousand dollars ($100,000) and this shall be referred to as the
“Initial Deposit”.  Before Closing (as defined below), Participant
shall use best efforts to attempt to pay to GWPC an additional
payment  in the amount of one hundred fifty thousand dollars
($150,000) and this additional payment shall be referred to as the “Additional
Deposit” and together with the Initial Deposit shall be referred to as the
“Deposit”.  Each such payment shall be by wire transfer to an account
nominated by GWPC or otherwise in immediately available funds.  In the
event  the Additional Deposit is not paid prior to
Closing,  this Agreement shall not terminate and the amount of the
Prospect Generation Fee shall not be reduced by the amount of the Additional
Deposit..

      
        
           

        

        
           

          
            

          

        

        
           

        

      

      Right
to Conduct Due Diligence

      

      1.2                  
Subject to the timely receipt of the entire Deposit, during the Exclusivity
Period, GWPC hereby grants to Participant the exclusive right to conduct due
diligence as to GWPC’s title in and to the Lease and Prospect Area and the
sufficiency of the terms and conditions of the Lease and to elect to participate
in drilling opportunities on the Lease.

      

      Access
to Records

      

      1.3                 
 During the Exclusivity Period, GWPC will provide and make available to the
Participant, upon request, all of its records relating to the Lease and the
Prospect Area, inclusive of all oil and gas leasehold documentation, all title
information including title opinions or landman runsheets, and, subject to any
applicable licensing restrictions, all geophysical data as reasonably requested
by Participant in order to assist Participant in the performance of its due
diligence on the Lease and the Prospect Area.  Participant shall also
have access during normal business hours to all such information at GWPC’s
office in Houston, Texas.  Participant understands and agrees that all
such records and other information provided pursuant to this Agreement are
material non-public information (“Confidential Information”) and
are being disclosed to Participant in strict confidence and shall not be copied
or distributed to any third parties without the prior written consent of
GWPC.  Notwithstanding anything to the contrary in this Agreement,
such duty of confidentiality shall survive the termination of this Agreement for
a period of three (3) years.

      

      NI-51-101

      

      1.4                  
Participant acknowledges that it has received, reviewed and analyzed the
National Instrument 51-101 Evaluation “Oil and Natural Gas Reserves Oakcrest
Prospect, Wharton County Texas”, dated September 1, 2007, as prepared by MHA
Petroleum Consultants for GWPC (the “NI 51-101”).

      

      Defects

      

      1.5                 
 By written notice(s) delivered to GWPC by July 1, 2008, (each a “Defect Notice”) Participant
may notify GWPC of the existence of any matter that it reasonably believes
constitutes a Defect.  With the exception of the Special and Limited
Warranty (as defined herein), Participant hereby waives any Defects not
addressed in timely delivered Defect Notices.  A “Defect” includes:

      

      (a)           failure
of GWPC to have good and defensible title in and to 95.75% working interest,
with royalty burdens totalling no greater than 28.0% in the Lease without
reduction, suspension or termination of such interest throughout the productive
life of the Lease, it being understood and acknowledged that the outstanding
4.25% working interest is a carried working interest held by Caskids in the
amount of 3.50% and Ben Carter, an individual, in the amount of
0.75%;

      

      (b)           failure
of GWPC to own such interests in the Lease free and clear of any liens or
encumbrances, other than those liens described on the attached Exhibit “C” in
favor of Metage Funds Limited and NCIM Limited (the “Permitted
Encumbrances”);

      
        
           

        

        
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      (c)           failure
of the Lease to cover 100% of the mineral rights as to oil and gas in the lands
and depths described therein, free and clear of any liens or encumbrances,
without reduction, suspension or termination throughout the productive life of
the Lease; and

      

      (d)           failure
of the Lease, and subsequent conveyances, to grant to GWPC the exclusive right
to operate for, explore, drill and produce 100%  of the oil and gas on
the Prospect Area.

      

      Right
to Cure Defects

      

      1.6                  
GWPC shall have the right to cure any Defect prior to Closing.  In the
event GWPC is unable to cure any Defect prior to Closing, Participant shall have
the right to terminate this Agreement.

      

      Pre-Closing
Obligations of GWPC Regarding the Lease

      

      1.7                
  During the Exclusivity Period, GWPC shall (except as otherwise
provided in this Agreement):

      

      (a)           maintain
and keep the Lease in full force and effect; and

      

      (b)           pay
timely any costs and expenses incurred in connection with the
Lease.

      

      Refraining
from Certain Actions

      

      1.8                
  During the Exclusivity Period, GWPC shall refrain from taking any of
the following actions without the prior consent of Participant (which consent
shall not be unreasonably withheld):

      

      (a)           sell,
assign, lien or encumber any interest in the Lease or Prospect
Area;

      

      (b)          
voluntarily waive or release any material rights with respect to any Lease or
voluntarily permit the Lease to lapse or expire;

      

      (c)          
enter into any contract requiring expenditure or for the sale or other
disposition, or any call or option for such purchase, of hydrocarbons to be
produced from the Lease;

      

      (d)         
 supplement, modify or amend in any material respect the
Lease;

      

      (e)           commence
any drilling, reworking, completion or similar operations on the Lease;
or

      

      (f)         
  commit to do any of the foregoing.

      
        
           

        

        
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      ARTICLE
2

       

      CLOSING

      

      Conditions
to GWPC’s Obligations to Close

      

      2.1                 
GWPC’s obligation to close is subject to the waiver by GWPC or satisfaction of
the following conditions at or before Closing:

      

      (a)           the
representations and warranties of Participant and Parent contained herein shall
be true and correct in all material respects at the Closing as though made at
and as of the Closing;

      

      (b)           participant
shall have performed and satisfied in all material respects the obligations,
covenants and agreements required hereunder to be performed and satisfied by
Participant at or before the Closing; and

      

      (c)           no
suit, action or other proceeding by a governmental authority or other third
person shall be pending or threatened that seeks substantial damages from GWPC
in connection with, or seeks to restrain, enjoin or otherwise prohibit the
consummation of, the transactions contemplated by this Agreement.

      

      Conditions
to Participant’s Obligations to Close

      

      2.2              
    Participant’s obligation to close is subject to the
waiver by Participant or satisfaction of the following conditions at or before
Closing:

      

      (a)           the
representations and warranties of GWPC contained herein shall be true and
correct in all material respects at the Closing as though made at and as of the
Closing;

      

      (b)           GWPC
shall have performed and satisfied in all material respects the obligations,
covenants and agreements required hereunder to be performed and satisfied by
GWPC at or before the Closing;

      

      (c)           no
suit, action or other proceeding by a governmental authority or other third
person shall be pending or threatened that seeks substantial damages from
Participant in connection with, or seeks to restrain, enjoin or otherwise
prohibit the consummation of, the transactions contemplated by this
Agreement;

      

      (d)           all
Defects which are the subject of timely Defect Notices have been cured to
Participant’s reasonable satisfaction, exercised in good faith, or waived by
Participant in writing;

      

      (e)           all
liens (excluding the Permitted Encumbrances) covering or affecting the Lease
have been released or at Participant’s sole discretion, subordinated to the
rights of Participant herein; and

      
        
           

        

        
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      (f)          
all consents to assign affecting the Lease or the transfer of interests to
Participant as contemplated herein, or to otherwise enter into this Agreement,
shall have been obtained.

      

      Closing

      

      2.3                  The
Closing shall be held at 10:00 a.m. in the registered offices of the GWPC on
August 1, 2008, or at such other date or time, or in such other location, as
GWPC and Participant may mutually agree in writing (the “Closing”).  Each
Party’s obligations at Closing are each a condition precedent to the other’s
obligations at Closing and each shall be deemed to have occurred
simultaneously.

      

      

      ARTICLE
3

      

      PROSPECT
GENERATION FEE

      

      Payment
of Fees

      

      3.1               
  At Closing, Participant shall pay to GWPC by wire transfer or other
immediately available funds the amount of one million two hundred thousand
dollars ($1,200,000) (the “Prospect Generation Fee”),
less the amount of Deposit paid by Participant (which sum is referred to as the
“Closing Amount” in consideration of GWPC’s geological and geophysical
interpretations, seismic data, leasehold and data acquisition costs and
administrative expenses relative to the Prospect Area and the right to
participate in the Prospect Wells.

      

      3.2                 
At Closing, the Releases (as defined below) and the Closing Amount shall be
delivered to an escrow agent agreed upon by Participant and GWPC. The escrow
agent shall hold such items in escrow until the Option Fee has been received by
Metage Funds Limited and NCIM Limited. Upon delivery of the Option Fee,
Participant and GWPC shall instruct the escrow agent to deliver the Releases to
Participant and the Closing Amount to GWPC. Any fees or expenses charged by the
escrow agent shall be borne equally by Participant and GWPC.

      

      

      ARTICLE
4

      

      TERMINATION

      

      Right
of Early Termination

      

      4.1                 
This Agreement may be terminated at any time at or before Closing by notice
given at or before the Closing:

      

      (a)           by
mutual written consent of GWPC and Participant;

      

      (b)           by
GWPC if any of the conditions in Section 2.1 has been neither waived by GWPC nor
satisfied by the time of the Closing;

      
        
           

        

        
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      (c)           by
Participant if any of the conditions in Section 2.2 has been neither waived by
Participant nor satisfied by the time of the Closing; or

      

      (d)           by
Participant in its sole discretion.

      

      Effect
of Termination

      

      4.2                   If
this Agreement is terminated pursuant to Section 4.1, this Agreement shall
become void and of no further force or effect except as set forth
herein.  Participant and Parent agree that neither Participant, Parent
nor any of either of their affiliates, representatives or agents shall, for a
period of one year from the date of such termination, acquire, directly or
indirectly, any interest in and to the Lease or any acreage covered thereby,
including without limitation any replacement lease, lease renewal, top lease,
option, purchase agreement or other arrangement.  In the event
Participant or Parent or any of either of their affiliates, representatives or
agents should acquire such an interest in contravention of this Section 4.2, the
interest so acquired shall, at GWPC’s option be conveyed to GWPC free and clear
of any liens and encumbrances and at no cost to GWPC.  Further, but
without limiting the foregoing, in the event this Agreement is terminated
pursuant to Section 4.1, the Parties agree that if:

      

      (a)           GWPC
terminates this Agreement in accordance with Section 4.1(b) or Participant
terminates this Agreement in accordance with Section 4.1(d) (provided that the
provisions of Section 4.1(a), and 4.1(c) are inapplicable), GWPC shall accept
the Deposit (with all interest accrued thereon) as liquidated damages and as its
sole and exclusive legal and equitable remedy for Participant’s failure to
perform and neither Party shall have any further liability or obligation to the
other.  The Parties acknowledge and stipulate that, by executing this
Agreement, GWPC loses substantial investment opportunity to market the Lease to
third persons during the Exclusivity Period; that damages for Participant’s
failure to satisfy the conditions in Article 3 (as well as the value of GWPC’s
investment opportunities without this Agreement) are difficult or incapable of
accurate estimation and that the Deposit (with all interest accrued thereon) is
a reasonable forecast of just compensation for any harm that might be caused by
Participant’s breach; or

      

      (b)           the
Parties jointly terminate this Agreement under Section 4.1(a), or Participant
terminates this Agreement in accordance with Section 4.1(c), then the Deposit
(with all interest accrued thereon) shall be refunded to Participant and neither
Party shall have any further liability or obligation to the other.

      

      

      ARTICLE
5

       

      TITLE
OPINION

      

      Delivery
of Title

      

      5.1                
  Prior to the issuance of the AFE for the Initial Well, GWPC hereby agrees
to have or cause to have the title for the drill site for the Initial Well
examined by an oil and gas title attorney and to provide Participant with a
photocopy of said drill site title opinion.  GWPC agrees that if, in
the opinion of such attorney, GWPC does not own free and clear of any liens
(other than Permitted Encumbrances), 95.75% Working Interest and 72% Net Revenue
Interest in the Lease and/or the Lease does not cover 100% of the mineral rights
as to oil and gas in the lands being examined, then Participant in its sole
discretion may elect to terminate this Agreement.

      
        
           

        

        
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      ARTICLE
6

       

      AFE
AND DRILLING

      

      Delivery
of AFE

      

      6.1                 
 GWPC shall deliver to Participant an Authority for Expenditure (“AFE”) for the dry hole costs
of the Anderson No. 1 Well, (the “Initial Well”) on or before
July 15, 2008.  Each AFE prepared by the Operator shall be a good
faith estimate of the dry hole costs to drill a Prospect Well at a mutually
acceptable location to a total depth of 14,000 feet below the surface of the
earth or such shallower depth as the Parties may mutually select (“Objective
Depth”).  Each subsequent AFE for a Prospect Well shall be
delivered to Participant at least thirty (30) days prior to the proposed spud
date for such well.

      

      Payment
of AFE for Initial Well

      

      6.2                 
 Payment of the dry hole costs as reflected in an AFE for the Initial Well
shall be due and payable to Operator at Closing.  Should Participant
not timely make remittance of the dry hole costs as set forth in the AFE for the
Initial Well, this Agreement shall, at the option of GWPC, be terminated in its
entirety pursuant to Section 4.1(b).

      

      Delivery
of Subsequent AFE

      

      6.3                 
 No AFE for a subsequent Prospect Well shall be delivered to Participant
until at least fifteen (15) days after the prior Prospect Well (or any
Replacement Well, as defined herein) has been completed or plugged and
abandoned.

      

      Payment
of AFE for Subsequent Wells

      

      6.4                  
Participant shall make remittance of the dry hole costs (as set forth in the
applicable AFE) for subsequent Prospect Wells within thirty (30) days of receipt
of the applicable AFE.  If Participant fails to make such payment to
Operator within five (5) business days after receipt of a notice from GWPC of
failure to timely pay such costs, Participant shall forfeit all interest in and
to the subject Prospect Well, the right to participate in any future Prospect
Wells and all unearned acreage covered by the Lease and Participant shall retain
its rights in Prospect Wells for which Participant paid the dry hole costs as
set forth in the applicable AFE and the acreage earned or that may be earned by
such wells.  Provided that GWPC is not in material breach of its
representations or obligations hereunder, Participant shall not be entitled to
any refund of any portion of the Prospect Generation Fee.

      
        
           

        

        
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      Costs
to Reach Objective Depth

      

      6.5                
  For each Prospect Well, the Participant shall be responsible for
100% of all costs, expenses or services necessary to reach Objective
Depth.  These costs include, but are not limited to the
following:

      

      (a)           the
staking of locations, building of roads and performance of operations necessary
for the preparation of the drill site;

      

      (b)        
  the furnishing of a suitable drilling rig;

      

      (c)           paying
for all surface or crop damage to the landowners associated with the drilling
and/or completion of the wells;

      

      (d)           providing
all water, fuel and chemicals needed to drill the wells to Objective Depth in a
prudent manner;

      

      (e)           providing
open-hole logs, necessary to evaluate the Prospect Wells in a prudent manner to
the Objective Depth, in order to obtain sufficient information to determine
whether or not casing should be set and a completion attempt should be
made;

      

      (f)         
  plugging and abandonment of any of the Prospect Wells if a dry hole,
including backfilling of all pits and restoration of the surface;

      

      (g)           the
cost of any additional open-hole evaluation, sidewall coring, formation testing,
and sidewall core evaluation;

      

      (h)           the
cost of fuel, mud and chemicals, if any are required, after running the
open-hole logs to surface;

      

      (i)          
 rig time for any of the above, at the contractor’s day rate;
and

      

      (j)          
 such other costs attributable to the Prospect Well prior to reaching the
Objective Depth which are chargeable to the joint account as set forth in the
COPAS accounting procedures attached to the JOA.

      

      Proceeding
with Prospect Well

      

      6.6                  
After a Prospect Well has been drilled to the Objective Depth and the log(s) and
test(s) identified in the AFE have been run, the Operator shall advise
Participant as to whether it recommends attempting a completion or plugging and
abandoning such well.

      

      Completion
Costs for Prospect Wells

      

      6.7                   If
the Operator proposes a completion of a Prospect Well pursuant to Section 6.6,
and Participant elects to participate in such completion attempt, Participant
shall be responsible for 100% of all costs and expenses related to such
completion attempt.

      
        
           

        

        
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      Forfeiture
by Participant in Prospect Well

      

      6.8                   If the
Participant elects not to participate in such attempted completion operations,
Participant shall forfeit all right, title and interest in and to the Lease and
such Prospect Well and all future Prospect Wells to GWPC.

      

      Retaining
Interest in Prior Prospect Wells

      

      6.9                  
Notwithstanding Section 6.8, should Participant elect not to participate in such
a completion attempt, it shall be entitled to retain its interests in and to any
prior Commercial Wells (as defined below) and shall be entitled to retain the
acreage allocated to the proration unit for each such Commercial Well, or if no
proration unit has been designated for such Commercial Well, then forty (40)
acres in the form of a square with such Commercial Well as its center (if such
configuration is not possible or practicable, then such forty (40) acres in as
nearly the form of a square as possible under the circumstances).

      

      No
Release for Prior Wells

      

      6.10                
Nothing in Sections 6.6 to 6.9 of this Agreement shall be construed as releasing
Participant from any liability for plugging and abandonment, environmental
damages, or other liability that arose from operations conducted upon the Lease
for any wells in which the Participant participated pursuant to this Agreement,
prior to the relinquishment of Participant’s interest.

      

      P&A
Costs If Participant Elects Non-Completion of Prospect Well

      

      6.11              
  If Participant elects not to participate in such a completion
attempt, and GWPC attempts such completion, GWPC shall assume responsibility for
100% of the plugging and abandonment costs of such well and agrees to defend,
hold harmless and indemnify Participant in connection with same.

      

      Proceeding
with Dry Hole or Lost Prospect Well

      

      6.12                 In
the event that a Prospect Well is deemed by the Operator (provided such decision
is reasonable and in good faith) to be a dry hole, or is lost at any depth by
reason of any accident or casualty, or igneous rock or other impenetrable
substances are encountered, or loss of circulation or other conditions which
would render further drilling impracticable by methods currently in general use
in the oil and gas industry, Participant may elect one of the following
options:

      

      (a)           to
plug and abandon the Prospect Well and not commence drilling a Replacement Well;
or

      

      (b)           to
plug and abandon the Prospect Well and commence a replacement well (“Replacement Well”) on the
Prospect Area within sixty (60) days after plugging and abandonment of the
original Prospect Well.

      
        
           

        

        
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      Replacement
Well

      

      6.13               
 If, pursuant to Section 6.12(b), the Parties decide to drill a Replacement
Well, a new AFE will be provided and Participant will be responsible for all
costs related to the drilling and completion of the Replacement Well in the same
manner as any Prospect Well as provided in this Article 6.

      

      Election
Not to Participate in Replacement Well

      

      6.14               
 Should Participant elect not to participate in a Replacement Well as set
out in Section 6.12(a) above, then such Prospect Well shall be plugged and
abandoned at Participant’s sole cost and expense.  Notwithstanding the
foregoing, should Participant elect not to participate in such a Replacement
Well and GWPC elects to commence such a Replacement Well, Participant shall
forfeit all rights in and to such Replacement Well.  Participant shall
remain responsible for all costs of plugging and abandoning the original
Prospect Well, but Participant shall have no obligations or liability with
respect to such Replacement Well, and GWPC shall defend, hold harmless and
indemnify Participant in connection with same.

      

      Retaining
Interest in Prior and Future Prospect Wells

      

      6.15                
Notwithstanding Section 6.14, if the Participant elects not to participate in a
Replacement Well, Participant shall:

      

      (a)           be
entitled to retain its interests in and to any prior Commercial Wells (as
defined below) and the acreage allocated to the proration unit for each such
Commercial Well, or if no proration unit has been designated for such Commercial
Well, then forty (40) acres in the form of a square with such Commercial Well as
its center (if such configuration is not possible or practicable, then such
forty (40) acres in as nearly the form of a square as possible under the
circumstances), and

      

      (b)           retain
the right to participate in all future Prospect Wells.

      

      Completion
and Pipeline/Gathering Line Costs

      

      6.16              
  Unless otherwise agreed to in writing by both Parties, or unless
Participant has forfeited its rights and interests in and to a given Prospect
Well, Participant agrees to pay 100% of completion and pipeline/ gathering line
interconnection costs for each Prospect Well within thirty (30) days of
receiving a cash call(s) from the Operator.  Failure to timely pay to
the Operator pipeline/ gathering line interconnection costs following notice of
non-payment from GWPC and failure to cure such non-payment within five (5) days
of such notice will result in Participant forfeiting the entirety of its
interest in the Prospect Well being connected, any future Prospect Wells
and  unearned acreage covered by the Lease.  Notwithstanding
the foregoing, should Participant not make such payment, it shall be entitled to
retain its interests in and to any prior Commercial Wells and shall be entitled
to retain the acreage allocated to the proration unit for each such Commercial
Well, or if no proration unit has been designated for such Commercial Well, then
forty (40) acres in the form of a square with such Commercial Well as its center
(if such configuration is not possible or practicable, then such forty (40)
acres in as nearly the form of a square as possible under the
circumstances).  Participant agrees to execute such documents and
assignments as may be reasonably requested by GWPC and Operator, including
amendment of this Agreement and the JOA to reflect the Participant’s forfeiture
of any Prospect Wells.

      
        
           

        

        
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      ARTICLE
7

      

      JOINT
OPERATING AGREEMENT

      

      Execution
of Operating Agreement

      

      7.1              
   At Closing, the Parties shall execute a Standard A.A.P.L. Form
610 - 1989 Revised Model Operating Agreement, substantially identical in form to
that form attached to this Agreement and made a part hereof as Exhibit “B” (the
“JOA”).  The
JOA shall be executed by the Operator and shall be executed by GWPC, Ben Carter
and Participant as non-operators.  It is hereby agreed that the JOA
will cover the Lease and all oil and/or gas operations on the Prospect Area that
are associated with Participant’s participation in the Prospect
Wells.  If any provision of the JOA and this Agreement conflict, the
terms and provisions of this Agreement shall prevail.

      

      Appointment
of Manager

      

      7.2                
  For purposes of day-to-day management and direction of the Operator,
GWPC agrees and consents to serve as the Managing Non-Operator, and will be paid
a fee, payable from the joint account of no more than $100 per
month for serving in such capacity.

      

      Responsibilities
of Manager

      

      7.3               
   In its capacity as Managing Non-Operator, GWPC agrees to
manage the commercial activities of the Prospect Wells, including but not
limited to, the marketing of the oil and/or gas production, and the negotiation
of and entry into commercial agreements for the purchase and sale of production
and any associated processing, gathering and/or transportation.  GWPC
shall use its commercially reasonable efforts to discharge its duties as
Managing Non-Operator, and shall not be the agent of Participant.  The
Parties hereby stipulate and agree that no agency or fiduciary duty has been or
will be established hereby.

      

      Limitations
of GWPC’s actions

      

      7.4              
    Except as set forth herein, GWPC shall refrain from
taking any of the following actions without the prior consent of Participant
(which consent shall not be unreasonably withheld):

      

      (a)           sell,
assign, lien or encumber any interest in the Lease or Prospect Area;
or

      

      (b)           voluntarily
waive or release any material rights with respect to any Lease or voluntarily
permit the Lease to lapse or expire.

      
        
           

        

        
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      ARTICLE
8

      

      ASSIGNMENT

      

      Assignment
of Leasehold Interest

      

      8.1                
  Provided that a Prospect Well is completed and is capable of
producing in paying quantities (a “Commercial Well”) and provided
Participant has timely and completely paid all costs associated with the
drilling, completion and pipeline interconnection costs of such Commercial Well
(either actual costs or as estimated in an AFE), within ten (10) days of the
completion of the well, GWPC will execute and deliver to Participant, or its
designee, a recordable assignment, effective as of the date of first production,
of an undivided 86.175% Working Interest with a Net Revenue Interest
of  62.046% in the subject Commercial Well (“Assignment”).  Said
Assignment will cover only the wellbore and the acreage which is allocated to
the proration unit for the Commercial Well as to all depths.  If no
proration unit has been designated for the Commercial Well, the acreage so
assigned shall be forty (40) acres in the form of a square with the Commercial
Well as its center (if such configuration is not possible or practicable, then
such forty (40) acres in as nearly the form of a square as possible under the
circumstances).  In the event GWPC owns less than 95.75% of the
working interest in and to the interests so assigned, and such Defect has been
waived by Participant, the interest assigned to Participant shall be
proportionately reduced.  Each such assignment will be AS IS, WHERE
IS, without warranty of any kind, either express or implied, except as to title
to the assigned working interest and net revenue percentages, which shall be by,
through and under GWPC (“Special and Limited Title
Warranty”) and not otherwise.  GWPC shall obtain all necessary
consents to assign in connection with each Assignment.

      

      Back-In
After Payout

      

      8.2                  
Each Assignment shall grant GWPC the right receive, on a well-by-well basis, an
assignment of an additional undivided fifteen percent (15%) of 8/8ths working
interest with a Net Revenue Interest of 10.8% in and to the Commercial Well and
associated acreage after payout from production revenues of 110% of the costs
expended by Participant to drill, complete and connect such Commercial Well
(“Payout”).  Participant
agrees to deliver a recordable assignment of such interest to GWPC within ten
(10) days of each Payout, free and clear of any liens and encumbrances not filed
of record prior to Participant’s receipt of such Assignment.  In the
event GWPC owned less than 95.75% of the working interest in and to the
interests originally assigned to Participant pursuant to Section 8.1, and such
Defect has been waived by Participant, the interest assigned to GWPC as set
forth in this Section 8.2 shall be proportionately reduced.

      

      Leasehold
Burdens

      

      8.3                 
 It is hereby understood and agreed between the Parties that each
Assignment and this Agreement are subject to the terms and conditions of the
Lease.  The Parties understand and agree that the Lease is subject to
royalty burdens equalling 28% and Participant hereby agrees to assume its
proportionate share of such royalty burdens (but not more than 28%). In the
event the royalty burdens exceed 28%, and Participant has waived such Defect,
Participant shall assume its proportionate share of such royalty
burdens.

      
        
           

        

        
          - 12
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      ARTICLE
9

      

      REPRESENTATIONS

      

      Representations
and Warranties of GWPC

      

      9.1                 
 GWPC represents and warrants to Participant on the date hereof and as of
the Closing as follows:

      

      (a)           GWPC
is a corporation duly formed and validly existing under the laws of Nevada and
is duly qualified to do business in the State of Texas;

      

      (b)           GWPC
has all requisite power and authority to own the assets owned by it, to execute
and deliver this Agreement, to consummate the transactions contemplated herein
and to perform its obligations under this Agreement.  The execution
and delivery of this Agreement by GWPC, the performance by GWPC of all
obligations to be performed by it and the consummation by GWPC of the
transactions contemplated herein have been duly authorized and approved by all
necessary corporate action on behalf of GWPC.  This Agreement has been
duly executed and delivered by GWPC and constitutes the valid and binding
obligation of GWPC, enforceable against GWPC in accordance with this Agreement’s
terms, except as such enforceability may be limited by bankruptcy, insolvency or
other laws relating to or affecting the enforcement of creditors’ rights and
general principles of equity (regardless of whether such enforceability is
considered in a proceeding at law or in equity);

      

      (c)           there
is no demand, action, suit, arbitration, proceeding or governmental authority
investigation against GWPC that has been served on GWPC or to the best of GWPC’s
knowledge, pending or threatened against GWPC, if determined adversely to GWPC,
could have a material adverse effect on the value or operation of the subject
interests upon or after the Effective Date or that challenges or may have the
effect of delaying, making illegal or otherwise interfering with the
transactions contemplated by this Agreement;

      

      (d)           the
execution and delivery of this Agreement by GWPC does not, and the fulfillment
and compliance with the provisions of this Agreement and the consummation by
GWPC of the transactions contemplated herein will not:

      

      (i)        
    violate or conflict with any provision of the articles
or  bylaws (or similar organizational documents) of GWPC;

      

      (ii)        
   require any filing or registration by GWPC with, or any
permit, consent or approval for GWPC from, any governmental authority (assuming
receipt of all consents and approvals of governmental authorities and other
third persons customarily obtained, or not required to be obtained until, after
the sale or transfer of title, operatorship or control); or

      
        
           

        

        
          - 13
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      (iii)           conflict
with, result in a breach of, constitute a default under, constitute an event
that with notice or lapse of time would constitute a default under, accelerate
or permit the acceleration of the performance required by or require any
consent, authorization or approval under any order, judgment or decree of any
governmental authority;

      

      (e)           neither
GWPC nor any of its related persons has incurred any obligation or liability
(direct, contingent or otherwise) for brokers’ fees, finders’ fees, agents’
commissions or other similar compensation in connection herewith for which
Participant has any responsibility;

      

      (f)           there
are no bankruptcy, reorganization or liquidation proceedings served on or being
contemplated by GWPC or, to the best of GWPC’s knowledge, pending or threatened
against GWPC;

      

      (g)           to
the best of GWPC’s knowledge, the Lease is full force and effect, there have not
been any operations on the Lease and there are no unplugged wells located on the
lands covered by the Lease;

      

      (h)           the
Lease and/or the production obtained therefrom is not subject to nor will be
subject to any hydrocarbon purchase or sale agreements that are neither
terminable, without penalty, upon seventy (70) days’ notice or
less;

      

      (i)           
at Closing, all consents to assign the interests in and to the Lease to
Participant will have been obtained;

      

      (j)           except
for the Permitted Encumbrances described in Exhibit “C” attached hereto, GWPC
has not encumbered the Lease in favour of a financial institution or any lender;
and

      

      (k)           the
outstanding 4.25% working interest in the Lease are a carried working interests
held by Caskids in the amount of 3.50% and Ben Carter, an individual, in the
amount of 0.75%.

      

      

      Representations
and Warranties of Participant

      

      9.2                  
Participant and Parent, as applicable, each represent and warrant to GWPC on the
date hereof and as of the Closing as follows:

      

      (a)           Participant
is a limited liability company duly formed and validly existing under the laws
of Nevada and will be duly qualified to do business in the State of Texas by
Closing;

      
        
           

        

        
          - 14
-

          
            

          

        

        
           

        

      

      (b)           Parent
is a corporation duly formed and validly existing under the laws of British
Columbia, Canada, is duly qualified to do business in the State of Texas, is
listed on and in good standing with the TSX Venture Exchange, and is not aware
of or has not been notified of any investigations into or violation of TSX
Venture Exchange rules, or other regulatory or governmental investigations or
violations which, if determined adversely to Parent could reasonably be
anticipated to have a material adverse effect on the transactions contemplated
by this Agreement.

      

      (c)           Participant
has all requisite power and authority to own interests in and to the Lease, to
execute and deliver this Agreement, to consummate the transactions contemplated
herein and to perform its obligations under this Agreement.  The
execution and delivery of this Agreement by Participant, the performance by
Participant of all obligations to be performed by it and the consummation by
Participant of the transactions contemplated herein have been duly authorized
and approved by all necessary corporate action on behalf of
Participant.  This Agreement has been duly executed and delivered by
Participant and constitutes the valid and binding obligation of Participant,
enforceable against Participant in accordance with this Agreement’s terms,
except as such enforceability may be limited by bankruptcy, insolvency or other
laws relating to or affecting the enforcement of creditors’ rights and general
principles of equity (regardless of whether such enforceability is considered in
a proceeding at law or in equity);

      

      (d)           there
is no demand, action, suit, arbitration, proceeding or governmental authority
investigation against Participant that has been served on Participant or to the
best of Participant’s knowledge, pending or threatened against Participant, if
determined adversely to Participant, that challenges or may have the effect of
delaying, making illegal or otherwise interfering with the transactions
contemplated by this Agreement;

      

      (e)           the
execution and delivery of this Agreement by Participant does not, and the
fulfillment and compliance with the provisions of this Agreement and the
consummation by Participant of the transactions contemplated herein will
not:

      

      (i)           violate
or conflict with any provision of the articles or  bylaws (or similar
organizational documents) of Participant;

      

      (ii)           require
any filing or registration by Participant with, or any permit, consent or
approval for Participant from, any governmental authority except the TSX Venture
Exchange (assuming receipt of all consents and approvals of governmental
authorities and other third persons customarily obtained, or not required to be
obtained until, after the sale or transfer of title, operatorship or control);
or

      

      (iii)          conflict
with, result in a breach of, constitute a default under, constitute an event
that with notice or lapse of time would constitute a default under, accelerate
or permit the acceleration of the performance required by or require any
consent, authorization or approval under any order, judgment or decree of any
governmental authority;

      
        
           

        

        
          - 15
-

          
            

          

        

        
           

        

      

      (f)      
     neither Participant nor any of its related persons
has incurred any obligation or liability (direct, contingent or otherwise) for
brokers’ fees, finders’ fees, agents’ commissions or other similar compensation
in connection herewith for which GWPC has any responsibility;

      

      (g)           there
are no bankruptcy, reorganization or liquidation proceedings served on or being
contemplated by Participant or, to the best of Participant’s knowledge, pending
or threatened against Participant;

      

      (h)           Participant
has sufficient knowledge and experience in financial and business matters to
enable it to evaluate the merits and risks of this investment and is in a
position to bear the economic risks of this investment.  Participant
understands and agrees that oil and gas exploration, development and production
activities inherently involve highly speculative activities in which results
cannot be predicted and which necessarily involve risk of loss which not limited
the anticipated AFEs in this project; and

      

      (i)         
  Participant represents that it has (or will have at Closing) the
financial ability and available funds to pay the Prospect Generation Fee and its
share of AFE costs for the Initial Well, and Participant shall have the
financial ability and available funds to pay the Option Fee as of
Closing.

      

      Acknowledgements
of Participant

      

      9.3                  
Participate acknowledges:

      

      (a)           that
no guaranty of production or rate of production or return has been made to
Participant and that it is not relying upon any such guaranty or representation
in the purchase of the interest covered hereby;

      

      (b)         
 that this Agreement and any interest acquired hereunder has not been and
will not be registered under the Securities Act of 1933, as amended, or the
securities laws of any state.  Participant hereby acknowledges that it
is a “sophisticated investor” under the rules and regulations of the Security
and Exchange Commission (“SEC”) and hereby releases GWPC
and any of its representatives, agents or associates from any and all claims
that it may make under SEC rules and regulations;

      

      (c)           that
Participant or its agents or representatives have had access to and an
opportunity to inspect certain information and data related to geological
aspects of the interest to be acquired hereunder which it deemed necessary to
make an informed investment judgment with respect to such interest and that it
has such knowledge and experience in financial and business matters in general
and investments in particular, including investments in the oil and gas
exploration and production industry, as to be capable of evaluating the merits
and risks of this Agreement and any interest acquired hereunder;

      

      (d)           that
Participant has or will have performed prior to Closing its due diligence to
verify the information provided, including information on maps and schedules to
verify the accuracy thereof.  GWPC nor any of its representatives,
agents or associates, does not warrant the accuracy of the information presented
to the Participant on the maps or otherwise;

      
        
           

        

        
          - 16
-

          
            

          

        

        
           

        

      

      (e)           that
Participant was provided information in connection with its participation in
this project.  Any reserve estimates, price forecasts, expense
forecasts, exploration success predictions or similar information or statements
made to Participant, either verbal or in writing, to assist it in evaluating its
participation in this venture are estimates only.  Actual results may
vary materially from prediction.  Information obtained from numerous
third party sources was used to prepare the materials presented on this
project.  Neither GWPC, nor any of its representatives, agents or
associates, does or can guarantee the accuracy of the information or the
interpretations derived therefrom as presented to assist Participant in its
review of this project.  As to the interest acquired by Participant
herein, GWPC, its representatives, agents or associates, shall not be held
liable for any loss, costs, damages or expenses, including but not limited to,
well drilling, completion or other costs resulting from decisions made based
upon presentation materials made from this data or information, whether
incomplete, in error or otherwise.  Participant hereby represents that
it has either independently verified any and all data and interpretations
presented to it by GWPC, its representatives, agents and associates, or that it
accepts the interpretations and data presented to it by GWPC with the full
knowledge that the information or interpretations derived therefrom may vary
materially from actual facts;

      

      (f)          
 that Participant has read and understands the geologic/geophysical reports
and/or diagrams concerning the above prospect and that it is purchasing this
interest for its sole ownership and not for resale; and

      

      (g)           although
GWPC represents the data provided to Participant is correct to the best of its
knowledge it may not be complete to the extent of satisfying Participant in its
evaluation of the prospect.  Participant realizes and agrees that
geological, geophysical, technical and other data provided by GWPC may not be up
to date, complete or correct.  Participant further agrees to conduct
its own research on the above mentioned prospect and will hold GWPC its
affiliates, representatives or agents harmless from any omissions or errors
regarding the geology, geophysical, technical and other data furnished by either
GWPC its affiliates, representatives or agents.

      

      Participant
May Rely on Representations

      

      9.4                 
 Notwithstanding Section 9.3, and subject to the limitations set forth in
this Agreement, including without limitation Section 11.15, Participant is
expressly entitled to rely on the representations and warranties by GWPC
expressly set forth in Section 9.1 and the Special and Limited Title Warranty in
Article 8 and shall be entitled to all available recourse should any of such
representations or warranties be inaccurate.

      
        
           

        

        
          - 17
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      ARTICLE
10

      

      OPTION
TO PARTICIPATE IN FUTURE WELLS

      

      Priority
of Drilling of Wells

      

      10.1             
   GWPC agrees that no other wells shall be proposed for or
drilled on the Lease prior to the completion of the drilling of the Prospect
Wells and any Replacement Wells therefor.

      

      Option
Wells

      

      10.2            
    In addition to the right of the Participant to
participate in the Prospect Wells, GWPC hereby grants to the Participant the
option to participate, on a well-by-well basis, in each subsequent well covered
by the Lease, including but not limited to, those wells identified in the NI
51-101  (the “Option
Wells”), on the same terms as its participation in subsequent Prospect
Wells under this Agreement.

      

      Option
Fee

      

      10.3            
    The consideration for the grant of the option by GWPC to
the Participant to participate in the Option Wells is three million seven
hundred thousand dollars ($3,700,000) (the “Option Fee”) payable by the
Participant.

      

      Payment
of Option Fee at Closing

      

      10.4            
    The Parties agree that the Participant will pay directly
to Metage Funds Limited and NCIM Limited the Option Fee by wire transfer or
other immediately available funds on or before Closing and that such payment(s)
will be on behalf of GWPC for the release of the Permitted
Encumbrances.

      

      Release
of Permitted Encumbrances

      

      10.5             
   Provided that the Participant pays the Option Fee described in
Section 10.4, GWPC will cause to be released the Permitted Encumbrances on
Closing. Such releases shall be in a form acceptable to Participant (the
“Releases”).

      

      Procedure
for Option Wells

      

      10.6              
  Provided that Participant has paid the Option Fee pursuant to
Section 10.4, GWPC will provide written notice to Participant of each proposal
to drill an Option Well and for each such Option Well, Participant shall forward
to GWPC a notice in writing within fifteen (15) days of receipt of such proposal
indicating whether or not Participant elects to exercise its option and
participate in the drilling thereof.  Each Option Well Participant
elects to participate in shall be treated as a subsequent Prospect Well, and
shall be subject to the terms and conditions of the JOA.

      
        
           

        

        
          - 18
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      ARTICLE
11

      

      MISCELLANEOUS

      

      Notices

      

      77.1         
      All notices and other communication
required, permitted or desired to be given hereunder must be in writing and sent
to the appropriate addresses below by (a) pre-paid U.S. registered or certified
mail, (b) hand delivery, (c) facsimile (telecopier), or (d) electronic mail
transmission (provided that any facsimile or electronic mail transmission shall
be followed within one (1) business day by pre-paid U.S. registered or certified
mail or by hand delivery).  Any such notice or communication shall be
deemed given and received effective upon actual receipt by the addressee;
nonetheless, if such date is not a business day, then such notice or
communication shall be deemed given and received on the next date that is a
business day.

      

      (a)           If
to GWPC:

      

      Gulf
Western Petroleum Corporation

      4801
Woodway Drive, Suite 306W

      Houston,
Texas 77056

      

      (713)
355-7001 (phone)

      (713)
976-3798 (fax)

      

      Attention:
M. Milton Cox

      milton.cox@comcast.net

      

      
        With a
copy to:

      

      

      Porter
& Hedges LLP

      1000 Main
Street, 26th Fl.

      Houston,
TX  77002

      

      
        	
                 
      

              	
                (713)
      226-6694 (phone)

              

      

      
        	
                 
      

              	
                (713)
      226-6294 (fax)

              

      

      

      
        	
                 
      

              	
                Attention:  Matthew
      R. Reynolds

              

      

      
        	
                 
      

              	
                mreynolds@porterhedges.com

              

      

      
        
           

        

        
          - 19
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                (b)

              	
                If
      to Participant:

              

      

      

      Amerpro
Industries US Ltd.

      1000, 250
– 2nd Street SW

      Calgary,
Canada T2P 0C1

      

      (403) u (phone)

      (403) u (fax)

      

      Attention:
Dan Jabour

      djabour@shaw.ca

      

      With a
copy to:

      

      Amerpro
Industries Inc.

      1708 West
6th Avenue

      Vancouver,
Canada V6J 5E8

      

      (604) u (phone)

      (604) u (fax)

      

      and

      

      Lang
Michener LLP

      1500-1055
West Georgia Street

      Vancouver,
Canada V6E 4NY

      

      (604)
689-9111 (phone)

      (604) 685-7084
(fax)

      

      Attention:  Desmond
Balakrishnan

      dbalakrishnan@lms.com

      

      (c)           If
to Operator:

      

      Caskids
Operating Company

      3637 W.
Alabama Street

      Houston,
Texas  77027-5902

      

      (403) u (phone)

      (403) u (fax)

       

      Attention:
Michael Caswell

      u

      

      Each
Party may change its address by notifying the other Party in writing in
accordance with this Section 11.1.

      
        
           

        

        
          - 20
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      Public
Announcements

      

      11.2            
   To the extent possible and practicable, GWPC and Participant
shall consult with each other with regard to all press releases and other
announcements concerning this Agreement or the transaction contemplated
hereby.  Except as may be required by applicable laws or the
applicable rules or regulations of any governmental authority or stock exchange,
neither Participant nor GWPC shall issue any such press release or formal public
announcement without the prior consent of the other
Party.  Notwithstanding the foregoing, GWPC understands and
acknowledges that the Participant is listed on the TSX Venture Exchange and has
on-going public disclosure obligations that include the requirement to seek the
approval for the transactions contemplated hereunder from the TSX Venture
Exchange and to disclose material information relative to this
Agreement.  No advance consultation with or approval from GWPC is
required for such disclosures.

      

      Amendments

      

      11.3           
    No amendment to this Agreement shall be effective or
binding on a Party unless the same shall be in writing and signed by that
Party.

      

      Governing
Law

      

      11.4           
    This Agreement, each Assignment and all other documents
executed pursuant hereto and any claims based on, related to or arising out of
(in whole or in part in any way) this Agreement, the Lease, any assignment or
any other document executed pursuant hereto shall be governed by and construed
under the laws of the State of Texas (excluding any choice-of-laws or
conflict-of-laws rules that may direct the application of the laws of another
jurisdiction).

      

      No
Partnership Created

      

      11.5            
   The arrangement created by and between Participant and GWPC as
a result of this Agreement shall not be considered a partnership or joint
venture.  All obligations and liabilities hereunder, except as herein
expressly provided to the contrary, shall be several and not joint or
collective.  While it is understood that the rights, obligations and
liabilities hereunder are several, and not joint, if for federal tax purposes,
this Agreement or the relationship established thereby shall be regarded as a
partnership, then each party elects not to be treated as partners, and this
Agreement and the relationship created thereby does not constitute a partnership
under the Internal Revenue Code (the “Code”) and, each party specifically elects
to be excluded from the application of all sections of Sub-Chapter K of the
Code.

      

      Successors
and Assigns

      

      11.6            
   This Agreement shall be binding upon the Parties and their
respective successors and assigns.  This Agreement shall inure solely
to the benefit of GWPC and its successors and assigns and Participant and its
successors and assigns.  Before Closing, neither Party shall transfer
to any third person without the prior written consent of the other party any
right, title or interest in or to any portion of this Agreement or the
Lease.

      
        
           

        

        
          - 21
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      No
Third Person Beneficiaries

      

      11.7              
  Nothing in this Agreement, express or implied, shall entitle any
person (other than GWPC or its successors or assigns or Participant or its
permitted successors or assigns or, solely to the extent expressly provided for
in Article 7 and subject to all other limitations herein, Participant’s other
related persons or GWPC’s other related persons) to any claim, remedy or right
of any kind whatsoever.

      

      Execution
in Counterparts

      

      11.8            
   This Agreement may be executed in multiple originals or
counterparts, each of which shall be deemed to be an original, but all of which
when taken together shall constitute one and the same valid and binding
agreement.

      

      Entire
Agreement

      

      11.9          
     This Agreement (together with the exhibits hereto)
supersedes all prior and contemporaneous negotiations, understandings,
discussions and agreements (whether oral, written or otherwise) between
Participant and GWPC relating to the Lease and constitutes the entire
understanding and agreement between them with respect to same.

      

      Expenses
of Agreement

      

      11.10                      Each
Party shall be solely responsible for all expenses incurred by it in connection
with the negotiation, execution and delivery of, and the transactions
contemplated by, this Agreement (including without limitation fees and expenses
of its agents, brokers, representatives, counsel, accountants and
consultants).

      

      Exhibits

      

      11.11                      All
exhibits attached to this Agreement are incorporated into and made a part of
this Agreement.

      

      Severability

      

      11.12                      If
any provision of this Agreement is held to be illegal, or unenforceable under
present or future laws, such provisions shall be fully severable; this Agreement
shall be construed and enforced as if such illegal, invalid or unenforceable
provisions had never compromised a part hereof; and the remaining provisions
hereof shall remain in full force and affect and shall not be affected by the
illegal, invalid or unenforceable provisions or by its severance
therefrom.  Furthermore, in lieu of such illegal, invalid or
unenforceable provision there shall be added automatically as a part of this
Agreement a provision as similar in terms to such illegal, invalid or
unenforceable provision as may be possible and be legal, valid and
enforceable.

      
        
           

        

        
          - 22
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      Disputes

      

      11.13                      In
the event that a dispute arises between Participant and GWPC in connection with
or as a result of this Agreement, the Parties agree that said dispute shall be
resolved by arbitration.  Arbitration shall be conducted in accordance
with the CPR Rules for Non-Administered Arbitration (“CPR Rules”) then currently in
effect and, unless otherwise agreed among the Parties to the dispute, shall be
presided over by a single arbitrator knowledgeable in the oil and gas industry.
The arbitrator will be appointed pursuant to the CPR Rules.  The venue
of the arbitration hearing shall be Houston, Texas.  The arbitrator
does not have jurisdiction to award damages in excess of compensatory damages,
and each Party expressly waives and forgoes any right to indirect,
consequential, incidental, special, punitive, exemplary or similar
damages.  The arbitrator may impose the costs of the arbitration
proceedings, including reasonable attorney fees, upon the losing Party, or
divide such costs between or among the Parties on any terms that they deem to be
just, fair and equitable.  The arbitration shall be governed by the
Federal Arbitration Act, 9 U.S.C. §§ 1-16 and by Texas law.  The
decision of the arbitrator on any claim(s) submitted by the Parties shall be
final and binding, and judgment upon the award rendered by the arbitrators may
be entered in any court having jurisdiction thereof.

      

      Currency

      

      11.14                      All
references to currency are in United States dollars.

      

      Limitation
on Rights

      

      11.15                      In
no event shall any Party be liable to any other party for any of such other
party’s consequential, special, exemplary or punitive damages in any way arising
out of or in connection with this Agreement or the Lease, regardless of whether
the legal theory of liability for such damages arises in breach of contract,
tort, under statute or any other theory of legal liability.

      

      Further
Assurance/ Parent Guarantee

      

      11.16                      The
Parties shall from time to time and at all times do all such further acts and
execute and deliver all such further deeds and documents as shall be reasonably
required in order fully to perform and carry out the terms of this
Agreement.  Amerpro Industries Inc., as Parent of Participant, hereby
unconditionally, absolutely, and irrevocably guarantees, as a primary obligor
and not merely as a surety, the due and punctual payment of all monies when due
and performance in full of the all obligations of Participant hereunder, in each
case strictly in accordance with the terms hereof. In furtherance of the
foregoing and not in limitation of any other right that GWPC may have at law or
in equity against Parent by virtue hereof, Parent agrees that upon failure of
Participant to pay any obligations when and as the same shall become due, Parent
will, without any demand or notice whatsoever, forthwith pay or cause to be paid
to GWPC or Operator, as the case may be, in cash in immediately available funds,
an amount equal to the unpaid amount of such obligations.

      

      SIGNATURE
PAGE FOLLOWS

      
        
           

        

        
          - 23
-

          
            

          

        

        
           

        

      

      IN WITNESS WHEREOF, this
Agreement has been duly executed on this u day of u, 2008.

      

      

      
        	
                AMERPRO
      INDUSTRIES US LTD.

              	 
      
	 
      	 
      	 
      
	 
      	 
      	 
      
	
                Per:

              	
                / s
      / Dan Jabour

              	 
      
	 
      	
                Authorized
      Signatory

              	 
      
	 
      	 
      	 
      
	 
      	 
      	 
      
	
                AMERPRO
      INDUSTRIES INC.

              	 
      
	 
      	 
      	 
      
	 
      	 
      	 
      
	
                Per:

              	
                / s
      / Dan Jabour

              	 
      
	 
      	
                Authorized
      Signatory

              	 
      
	 
      	 
      	 
      
	 
      	 
      	 
      
	
                GULF
      WESTERN PETROLEUM CORPORATION

              	 
      
	 
      	 
      	 
      
	 
      	 
      	 
      
	
                Per:

              	
                / s
      / Wm. M. Cox

              	 
      
	 
      	
                Authorized
      Signatory

              	 
      
	 
      	 
      	 
      
	 
      	 
      	 
      
	
                CASKIDS
      OPERATING COMPANY

              	 
      
	 
      	 
      	 
      
	 
      	 
      	 
      
	
                Per:

              	
                / s
      / Michael Caswell

              	 
      
	 
      	
                Authorized
      Signatory

              	 
      

      

      
        
           

        

        
          - 24
-

          
            

          

        

        
           

        

      

      EXHIBIT
“A”

      

      

      Attached
to and made a part of that certain Participation and Exclusivity Agreement,
dated June 10, 2008, among Gulf Western Petroleum Corporation, Amerpro
Industries US Inc., and Caskids Operating Company.

      

      1.           Wells

      

      
        	
                WELL
      NAME

              	
                PRODUCING
      HORIZON

              	
                UNIT
      SIZE

              
	 
      	 
      	 
      
	
                ANDERSON
      NO. 1

              	
                Middle
      Wilcox

              	
                40
      Acre Unit

              
	 
      	 
      	 
      
	
                ANDERSON
      NO. 2

              	
                Middle
      Wilcox

              	
                40
      Acre Unit

              
	 
      	 
      	 
      
	
                ANDERSON
      NO. 3

              	
                Middle
      Wilcox

              	
                40
      Acre Unit

              
	 
      	 
      	 
      
	
                ANDERSON
      NO. 4

              	
                Middle
      Wilcox

              	
                40
      Acre Unit

              

      

      

      2.           Lease

      

      Oil and
Gas Lease dated September 1, 2006, as amended to extend the primary term to
August 31, 2008, between Arthur A. Anderson, Sr. and wife, Mary Lou Anderson,
and Mark N. Anderson and wife, Rebecca M. Anderson, as Lessors, and CODEAMERICA
INVESTMENTS, L.L.C., as Lessee, dated September 1, 2006, a Memorandum of Oil and
Gas Lease recorded in Volume 674, Page 897 in the Official Records of Wharton
County, Texas; said Lease identifies a certain 418.015-acre area of land within
the A. Edgar Survey, A-93, in said County and State, being the lands covered by
said Oil and Gas Lease.  As assigned by Lessee to Wharton Resources
LP, a wholly owned limited partnership of Gulf Western Petroleum
Corporation.

      
        
           

        

        
          
          

          
            

          

        

        
           

        

      

      EXHIBIT
“B”

      

      JOINT
OPERATING AGREEMENT

      

      [EXECUTED
TO BE INSERTED]

      
        
           

        

        
          
          

          
            

          

        

        
           

        

      

      EXHIBIT
“C”

      

      PERMITTED
ENCUMBRANCES

      

      

      That
certain Mortgage, Deed of Trust, Assignment of Production, Security Agreement,
Fixture Filing and Financing Statement dated effective September 10, 2007 from
Gulf Western Petroleum, LP as Mortgagor, to Thomas J. Perich, Trustee, for the
benefit of Metage Funds Limited, as Collateral Agent, securing certain
indebtedness from Metage Funds Limited and NCIM Limited, as recorded in Volume
714, Page 86, Document # 275932 of the Official Records of Wharton County,
Texas.FIRST
      AMENDMENT

    TO

    AMENDED
      AND RESTATED STOCKHOLDER PROTECTION RIGHTS AGREEMENT

    

    This
      First Amendment to Amended and Restated Stockholder Protection Rights Agreement
      (this Amendment")
      is
      entered into as of June 13, 2008, between Wilshire Enterprises, Inc., a Delaware
      corporation (the "Company"),
      and
      Continental Stock Transfer & Trust Company, a limited purpose trust company
      organized under the banking laws of the State of New York, as rights agent
      (the
      "Rights
      Agent").
      

     

    W
      I T N E S S E T H:

     

    WHEREAS,
      the Company and the Rights Agent are parties to an Amended and Restated
      Stockholder Protection Rights Agreement, dated as of December 6, 2006 (the
      "Rights
      Agreement");

     

    WHEREAS,
      the Company, NWJ Apartment Holdings Corp., a Maryland corporation ("Parent"),
      and
      NWJ Acquisition Corp., a Delaware corporation and a direct wholly-owned
      subsidiary of Parent ("Merger Sub"), intend to enter into an Agreement and
      Plan
      of Merger (the "Merger
      Agreement")
      pursuant to which, among other things, Merger Sub shall be merged with and
      into
      the Company (the "Merger")
      with
      the Company surviving the Merger on the terms and subject to the conditions
      set
      forth therein;

     

    WHEREAS,
      pursuant to Section 5.4 of the Rights Agreement, the Company and the Rights
      Agent may from time to time supplement or amend the Rights Agreement prior
      to
      the Flip-in Date (as such term is defined in the Rights Agreement) in any
      respect and that the Rights Agent shall duly execute and deliver any such
      supplement or amendment requested by the Company;

     

    WHEREAS,
      on June 13, 2008, the Company's Board of Directors resolved to amend the Rights
      Agreement as set forth herein in order to render the Rights (as such term is
      defined herein) inapplicable to the Merger and the other transactions
      contemplated by the Merger Agreement;

     

    NOW
      THEREFORE, in
      exchange for good and valuable consideration, the receipt and sufficiency of
      which is hereby acknowledged, and intending to be legally bound hereby, the
      parties hereto hereby agree as follows:

    

    Section
      1. Defined
      Terms.
      All
      capitalized terms used but not defined herein shall have the meanings ascribed
      to them in the Rights Agreement.

    

    Section
      2. Amendments
      to Rights Agreement.
      Effective as of the date first written above, the Rights Agreement is hereby
      amended as follows:

    

    (a) The
      definition of "Acquiring Person" set forth in Section 1.1 of the Rights
      Agreement is hereby amended to add the following at the end
      thereof:

     

    
      	 	 	
              "In
                addition, notwithstanding anything in this Agreement to the contrary,
                none
                of NWJ Apartment Holdings Corp., a Maryland corporation ("Parent"),
                and
                NWJ Acquisition Corp., a Delaware corporation and a direct wholly-owned
                subsidiary of Parent ("Merger Sub"), or any of their Affiliates or
                Associates, individually or collectively, shall be an "Acquiring
                Person"
                solely by reason of: (1) the approval, adoption, execution or delivery
                of
                an Agreement and Plan of Merger (as it may be amended and supplemented,
                the "Merger Agreement"), among the Company, Parent and Merger Sub
                pursuant
                to which, among other things, Merger Sub shall be merged with and
                into the
                Company (the "Merger") with the Company surviving the Merger on the
                terms
                and subject to the conditions set forth therein, (2) the approval,
                adoption, execution or delivery of the Voting Agreement (as defined
                in the
                Merger Agreement)(as it may be amended and supplemented, the "Voting
                Agreement"), (3) the consummation of the Merger or (4) the consummation
                of
                any of the other transactions contemplated by the Merger Agreement
                or the
                Voting Agreement." 

            

    

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    

    

    (b) The
      definition of "Beneficial Ownership" set forth in Section 1.1 of the Rights
      Agreement is hereby amended to add the following sentence at the end thereof:
      

     

    "Notwithstanding
      anything in this definition of "Beneficial Owner," "Beneficial Ownership" or
      "Beneficially Own" to the contrary, none of Parent, Merger Sub, or any of their
      Affiliates or Associates, individually or collectively, shall be deemed the
      "Beneficial Owner" or shall be deemed to "Beneficially Own" any shares of Common
      Stock solely as a result of (i) the approval, adoption, execution or delivery
      of
      the Merger Agreement, (ii) the approval, adoption, execution or delivery of
      the
      Voting Agreement, (iii) the consummation of the Merger or (iv) the consummation
      of any of the other transactions contemplated by the Merger Agreement or the
      Voting Agreement." 

     

    (c) The
      definition of "Expiration Time" in Section 1.1 of the Rights Agreement is hereby
      amended and restated in its entirety to read as follows: 

     

    “Expiration
      Time” shall mean the earliest of (i) the Exchange Time, (ii) the Redemption
      Time, (iii) the effective time of a consolidation, merger or share exchange
      (each a “Business Combination”) of the Company into another entity pursuant to
      an agreement entered into prior to a Flip-in Date, (iv) the Effective Time
      (as
      such term is defined in the Merger Agreement), (v) the close of business on
      August 31, 2007, unless the Independent Directors determine at a meeting to
      be
      held within 30 days prior to August 31, 2007, that this Agreement continues
      to
      be in the best interests of the Company and its stockholders, (vi) the close
      of
      business on August 31, 2008, unless the stockholders of the Company approve
      this
      Agreement at the Company’s 2008 annual meeting of stockholders, and (vii) the
      close of business on August 31, 2010. In the event the Expiration Date means
      the
      Effective Time, the Company shall promptly notify the Rights Agent after the
      occurrence of such Effective Time."

     

    (d) The
      definition of "Stock Acquisition Date" in Section 1.1 of the Rights Agreement
      is
      hereby amended to add the following sentence at the end thereof: 

     

    "Notwithstanding
      anything in this Agreement to the contrary, no Stock Acquisition Date shall
      be
      deemed to have occurred solely as a result of (i) the approval, adoption,
      execution or delivery of the Merger Agreement, (ii) the approval, adoption,
      execution or delivery of the Voting Agreement, (iii) the consummation of the
      Merger or (iv) the consummation of any of the other transactions contemplated
      by
      the Merger Agreement or the Voting Agreement."

     

    (e) The
      definition of "Flip-in Date" in Section 1.1 of the Rights Agreement is hereby
      amended to add the following at the end thereof immediately prior to the period:
      

     

    
      
         

      

      
        -2-

        
          

        

      

      
         

      

    

    

     

    ";
      provided,
      however,
      that,
      notwithstanding anything in this Agreement to the contrary, a Flip-in Date
      shall
      be deemed not to have occurred solely as a result of (i) the approval, adoption,
      execution or delivery of the Merger Agreement, (ii) the approval, adoption,
      execution or delivery of the Voting Agreement, (iii) the consummation of the
      Merger or (iv) the consummation of any of the other transactions contemplated
      by
      the Merger Agreement or the Voting Agreement". 

     

    (f) The
      definition of "Flip-over Transaction or Event" in Section 1.1 of the Rights
      Agreement is hereby amended to add the following at the end thereof immediately
      prior to the period: 

     

    ";
      provided,
      however,
      that,
      notwithstanding anything in this Agreement to the contrary, a Flip-over
      Transaction or Event shall be deemed not to have occurred solely as a result
      of
      (i) the approval, adoption, execution or delivery of the Merger Agreement,
      (ii)
      the approval, adoption, execution or delivery of the Voting Agreement, (iii)
      the
      consummation of the Merger or (iv) the consummation of any of the other
      transactions contemplated by the Merger Agreement or the Voting
      Agreement".

     

    (g) The
      definition of "Separation Time" in Section 1.1 of the Rights Agreement is hereby
      amended to add the following at the end thereof immediately prior to the period:
      

     

    ";
      provided,
      however,
      that,
      notwithstanding anything in this Agreement to the contrary, a Separation Time
      shall be deemed not to have occurred solely as a result of (i) the approval,
      adoption, execution or delivery of the Merger Agreement, (ii) the approval,
      adoption, execution or delivery of the Voting Agreement, (iii) the consummation
      of the Merger or (iv) the consummation of any of the other transactions
      contemplated by the Merger Agreement or the Voting Agreement ".

     

    (h) Section
      1.1 of the Rights Agreement is amended by adding at the end thereof the
      following:

     

    "Each
      of
      "Merger Agreement", "Parent", "Merger Sub" "Merger" and "Voting Agreement"
      shall
      have the meanings given to such terms in the definition of "Acquiring Person".
      

     

    Section
      3. Effective
      Date.
      This
      Amendment shall become effective as of the date first written above, but such
      effectiveness is contingent upon the execution and delivery of the Merger
      Agreement by the parties thereto. 

     

    Section
      4. Interpretation.
      The
      term "Agreement" as used in the Rights Agreement shall be deemed to refer to
      the
      Rights Agreement as amended by this Amendment. 

     

    Section
      5. Effect
      of Amendment.
      Except
      as expressly provided herein, the Rights Agreement shall be and remain in full
      force and effect. 

     

    Section
      6. Governing
      Law.
      This
      Amendment shall be governed by, and construed in accordance with, the laws
      of
      the State of Delaware (without giving effect to any conflict of laws principles
      that would cause the application of the laws of any other jurisdiction).

     

    
      
         

      

      
        -3-

        
          

        

      

      
         

      

    

    

     

    Section
      7. Counterparts.
      This
      Amendment may be executed in any number of counterparts and each of such
      counterparts shall for all purposes be deemed to be an original, and all such
      counterparts shall together constitute but one and the same instrument.

     

    Section
      8. Certification.
      The
      officer of the Company executing this Amendment, being an appropriate officer
      of
      the Company and authorized to do so by resolution of the Board of Directors
      of
      the Company duly adopted and approved at a meeting held on June 13, 2008, hereby
      certifies to the Rights Agent that the amendments to the Rights Agreement set
      forth in this Amendment are in compliance with the terms of Section 5.4 of
      the
      Rights Agreement. 

     

    Section
      9. Severability.
      If any
      term, provision, covenant or restriction of this Amendment is held by a court
      of
      competent jurisdiction or other authority to be invalid, void or unenforceable,
      the remainder of the terms, provisions, covenants and restrictions of this
      Amendment shall remain in full force and effect and shall in no way be affected,
      impaired or invalidated. 

     

    Section
      10. Descriptive
      Headings.
      Descriptive headings of the several Sections of this Amendment are inserted
      for
      convenience only and shall not control or affect the meaning or construction
      of
      any of the provisions hereof. 

     

    IN
      WITNESS WHEREOF,
      this
      Amendment has been executed and delivered as of the date and year first above
      written by a duly authorized officer or representative of each party hereto,
      as
      the case may be.

     

    
      	     	
              WILSHIRE
                ENTERPRISES, INC.

            
	 	 	     
	 	 	     
	 	
              By:
                

            	
              /s/
                Sherry Wilzig Izak

            
	 	
              Name:

            	
              Sherry
                Wilzig Izak

            
	 	
              Title:
                

            	
              Chairman
                of the Board

            
	 	 	     
	 	
              CONTINENTAL
                STOCK TRANSFER &

              TRUST
                COMPANY

            
	 	 	     
	 	
              By:
                

            	
              /s/
                Michael G. Mullings

            
	 	
              Name:
                

            	
              Michael
                G. Mullings

            
	 	
              Title:
                

            	
              Vice
                President

            

    

     

    

    
      
         

      

      
        -4-

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