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EXHIBIT 10.6

 
 BLAST ENERGY SERVICES, INC.
$1,120,000 SECURED PROMISSORY NOTE

 
$1,120,000
Houston, Texas
February 27, 2008

BLAST ENERGY SERVICES, INC., a Texas corporation (hereinafter called the
"Company," which term includes any successor entities), for value received,
hereby promises to pay to Berg McAfee Companies, LLC (hereinafter called
"Holder"), or his heirs, devisees, or assigns,  up to the principal sum of One
Million One Hundred and Twenty Thousand and No/100 dollars ($1,120,000),
together with interest on the amount of such principal sum from time to time
outstanding, payable in accordance with the terms set forth below.

The obligations of the Company contained in this Note are secured by a Security
Agreement between the Company and the Holder dated July 15, 2005, as may be
amended or modified (the "Security Agreement").

ARTICLE I
 
DEFINITIONS

1.1                      Definitions. For all purposes of this Note, except as
otherwise expressly provided or unless the context otherwise requires: (a) the
terms defined in this Article have the meanings assigned to them in this Article
and include the plural as well as the singular; (b) all accounting terms not
otherwise defined herein have the meanings assigned to them in accordance with
generally accepted accounting principles as promulgated from time to time by the
Association of Independent Certified Public Accountants; and (c) the words
"herein," "hereof" and "hereunder" and other words of similar import refer to
this Note as a whole and not to any particular Article, Section or other
subdivision.

“Base Amount” shall mean a principal amount outstanding under the Note of
$1,200,000.

"Board of Directors" means the board of directors of the Company as elected from
time to time or any duly authorized committee of the Board of Directors.

"Business Day" means each Monday, Tuesday, Wednesday, Thursday and Friday which
is not a day on which U.S. banking institutions are authorized or obligated by
law or executive order to be closed.

"Default" means any event which is, or after notice or passage of time would be,
an Event of Default.

"Event of Default" has the meaning specified in Section 3.1.

 
 

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"Maturity Date", when used with respect to this Note, means February 27, 2011
(or such earlier date upon which this Note becomes due and payable under Section
3.2).

"Note" means this $1,120,000 Promissory Note, as hereafter amended, modified,
substituted or replaced.

"Person" means any individual, corporation, limited liability company,
partnership, joint venture, association, joint-stock company, trust, estate,
other entity, unincorporated organization or government or any agency or
political subdivision thereof.

I.  ARTICLE II
 
PAYMENTS

2.1           Interest.  From the date of this Note through the Maturity Date,
interest on the principal amounts outstanding under the Note shall accrue at the
rate equal to eight percent (8%) per annum calculated on the basis of a 360-day
year from the date of this Note through the Maturity Date.

2.2           Payment of Principal and Interest.  The principal and all accrued
interest under this Note shall be due and payable in full on the Maturity Date.

2.3           Prepayments.  The Company may prepay this Note, in whole or in
part, without penalty or discount, upon five days' prior written notice given to
Holder pursuant to Section 5.5.  All payments made under this Note shall be
applied first to accrued interest, and the balance, if any, to principal.

2.4           Manner of Payment.
2.4.1                      Cash payments of principal on this Note will be made
by delivery of checks to Holder or wire transfers pursuant to instructions from
Holder. If the date upon which the payment of principal is required to be made
pursuant to this Note occurs other than on a Business Day, then such payment of
principal shall be made on the next occurring Business Day following said
payment date and shall include interest through said next occurring Business
Day.

2.4.2                      Payment of interest on this Note will be made in
Reorganized Blast Common Stock at the rate of $0.20 per share.

2.5           Security.  This Note is secured by the collateral defined in the
Security Agreement.
 
 

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ARTICLE III
 
REMEDIES

3.1           Events of Default. An "Event of Default" occurs if:

(a)           the Company defaults in the payment or mandatory prepayment of the
principal or interest on this Note when such principal or interest becomes due
and payable and such default remains uncured for a period of ten (10) Business
Days; or

(b)           the Company defaults in the performance of any covenant made by
the Company, and such default remains uncured for a period of thirty (30)
Business Days in this Note (other than a default in the performance of a
covenant specifically addressed elsewhere in this Section 3.1) or the Security
Agreement; or

(c)           any representation or warranty made by the Company in the Security
Agreement, or this Note or in any certificate furnished by the Company in
connection with the consummation of the transaction contemplated thereby or
hereby, is untrue in any material respect as of the date of making thereof and
such default remains uncured for a period of ten (10) Business Days; or

(d)           after the date hereof, a court of competent jurisdiction enters
(i) a decree or order for relief in respect of the Company in an involuntary
case or proceeding under any applicable federal or state bankruptcy, insolvency,
reorganization or other similar law or (ii) a decree or order adjudging the
Company a bankrupt or insolvent, or approving as properly filed a petition
seeking reorganization, arrangement, adjustment or composition of or in respect
of the Company under any applicable federal or state law, or appointing a
custodian, receiver, liquidator, assignee, trustee, sequestrator or other
similar official of the Company or of any substantial part of the property of
the Company or ordering the winding up or liquidation of the affairs of the
Company and any such decree or order of relief or any such other decree or order
remains unstayed for a period of 30 days from its date of entry; or

(e)           after the date hereof, the Company commences a voluntary case or
proceeding under any applicable federal or state bankruptcy, insolvency,
reorganization or other similar law or any other case or proceeding to be
adjudicated a bankrupt or insolvent, or the Company files a petition, answer or
consent seeking reorganization or relief under any applicable federal or state
law, or the Company makes an assignment for the benefit of creditors, or admits
in writing its inability to pay its debts generally as they become due; or

(f)           the Company (1) merges or consolidates with or into any other
Person (unless the Company is the surviving or acquiring party or if the merger
or consolidation is to effect a re-domicile of the Company); (2) dissolves or
liquidates; or (3) sells all or substantially all of its assets except where
such action by the Company would not have a material adverse effect on the
financial condition or business of the Company.
 
 

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3.2           Acceleration of Maturity. This Note and all accrued interest shall
automatically become immediately due and payable if an Event of Default
described in Sections 3.1(d), 3.1(e) or 3.1(f) occurs and, this Note shall, at
the option of the Holder in its sole discretion, become immediately due and
payable if any other Event of Default occurs, and in every such case the Holder
of the Note may declare the principal and interest on the Note to be due and
payable immediately.

ARTICLE IV
 
COVENANTS

The Company covenants and agrees that, so long as this Note is outstanding:

4.1           Payment of Principal and Accrued Interest. The Company will duly
and punctually pay or cause to be paid the principal sum of this Note, together
with interest accrued thereon from the date hereof to the date of payment, in
accordance with the terms hereof.

4.2            Existence. The Company will do or cause to be done all things
necessary to preserve and keep in full force and effect its corporate or Company
existence, rights (charter and statutory) and franchises.

4.3           Taxes; Claims; etc. The Company will promptly pay and discharge
all lawful taxes, assessments, and governmental charges or levies imposed upon
it or upon its income or profits, or upon any of its properties, real, personal,
or mixed, before the same shall become in default, as well as all lawful claims
for labor, materials, and supplies or otherwise which, if unpaid, might become a
lien or charge upon such properties or any part thereof, and which lien or
charge will have a material adverse effect on the business of the Company;
provided, however, that the Company shall not be required to pay or cause to be
paid any such tax, assessment, charge, levy, or claim prior to institution of
foreclosure proceedings if the validity thereof shall concurrently be contested
in good faith by appropriate proceedings and if the Company shall have
established reserves deemed by the Company adequate with respect to such tax,
assessment, charge, levy, or claim.

4.4           Maintenance of Existence and Properties. The Company will keep its
material properties in good repair, working order, and condition, ordinary wear
and tear excepted, so that the business carried on may be properly conducted at
all times in accordance with prudent business management.

4.5           Information and Records.  The Company shall maintain its books and
records in accordance with U.S. generally accepted accounting principles,
applied on a consistent basis.
 
 

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4.6           Notice of Defaults. The Company will promptly notify the Holder in
writing of the occurrence of any Event of Default under this Note.

4.7           Compliance with Laws. The Company will promptly comply in all
material respects with all laws, ordinances and governmental rules and
regulations to which it is subject, the violation of which would materially and
adversely affect the Company.
 
ARTICLE V
 
MISCELLANEOUS

5.1           Consent to Amendments. This Note may be amended, and the Company
may take any action herein prohibited, or omit to perform any act herein
required to be performed by it, if and only if the Company shall obtain the
written consent to such amendment, action or omission to act from the holders of
a majority of the aggregate principal amount of this Note.

5.2           Benefits of Note; No Impairment of Rights of Holder of Senior
Indebtedness. Nothing in this Note, express or implied, shall give to any
Person, other than the Company, Holder, and their successors any benefit or any
legal or equitable right, remedy or claim under or in respect of this Note.

5.3           Successors and Assigns. All covenants and agreements in this Note
contained by or on behalf of the Company and the Holder shall bind and inure to
the benefit of the respective successors and assigns of the Company and the
Holder.

5.4           Restrictions on Transfer.  Holder shall not transfer this Note
except with the prior written consent of the Company, such consent not to be
unreasonably withheld.  Any lender to which Holder grants a security interest in
this Note shall be entitled to exercise all remedies to which it is entitled by
contract or by law, including (without limitation) transferring this Note into
its own name or into the name of any purchaser at any sale undertaken in
connection with enforcement by such lender of its remedies.

5.5           Notice; Address of Parties. Except as otherwise provided, all
communications to the Company or Holder provided for herein or with reference to
this Note shall be deemed to have been sufficiently given or served for all
purposes (i) upon receipt if sent by hand delivery or overnight courier, (ii)
upon receipt if sent by facsimile, or (iii) on the third business day after
being sent as certified or registered mail, postage and charges prepaid, to the
following addresses: if to the Company at 14550 Torrey Chase Boulevard, Suite
330, Houston, Texas 77014-1022, Attn: John O’Keefe, or at any other address
designated by the Company in writing to Holder; if to Holder: Eric  A. McAfee at
10600 N de Anza Blvd Suite 250, Cupertino, CA 95014, or at any other address
designated by Holder to the Company in writing.

5.6           Separability Clause. In case any provision in this Note shall be
invalid, illegal or unenforceable in any jurisdiction, the validity, legality
and enforceability of the remaining provisions in such jurisdiction shall not in
any way be affected or impaired thereby; provided, however, such construction
does not destroy the essence of the bargain provided for hereunder.
 
 

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5.7           Governing Law; Arbitration. This Note shall be governed by, and
construed in accordance with, the internal laws of the State of Texas (without
regard to principles of choice of law).  All claims arising from or related in
any way to this Agreement shall be submitted to and resolved by binding
arbitration with the American Arbitration Association (“AAA”) through its office
in Harris County, Texas.  Except as to injunctions and other provisional relief,
this section on mandatory arbitration applies to any dispute, claim or
controversy arising out of or related in any way to this Agreement, including
but not limited to its enforceability, validity, or interpretation.  The
arbitration shall be conducted under rules of the AAA which are incorporated
herein unless expressly contradicted by the language of this paragraph.  One
neutral arbitrator shall be used. The arbitrator shall provide a written
decision setting forth his or her essential findings and conclusions on which
the award is based and judicial review of the arbitration award shall be allowed
to the extent required by any applicable federal, state or local law.  Judgment
upon the award rendered by the arbitrator may be entered in any court having
jurisdiction.  This paragraph shall be governed by the Federal Arbitration
Act.  Consistent with the expedited nature of arbitration, each party to any
arbitration filed under this paragraph will, upon the written request of the
other party, promptly provide the other with copies of documents relevant to the
issues raised by any claim or counterclaim.  Additionally, each party shall
allow any other party to depose witnesses under that party's control and shall
cooperate with the other party in scheduling depositions. Any dispute regarding
discovery, or the relevance or scope thereof, shall be determined by the
arbitrator.  All discovery shall be completed within 90 days following the
appointment of the arbitrator, unless the arbitrator finds that there is good
cause for extending the discovery period. Without waiving any remedy under this
Agreement, either party may seek from any court having jurisdiction injunctive
relief or any interim or provisional relief that is necessary to protect the
rights or property of that party, pending the arbitrator’s final determination
on the merits.  Any provision of this section on mandatory arbitration that is
found to be unconscionable shall be severed and this section on mandatory
arbitration shall be enforced without the severed provision.

 
 

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5.8           Usury. It is the intention of the parties hereto to conform
strictly to the applicable laws of the State of Texas and the United States of
America, and judicial or administrative interpretations or determinations
thereof regarding the contracting for, charging and receiving of interest for
the use, forbearance, and detention of money (hereinafter referred to in this
Section 5.8 as "Applicable Law"). The Holder shall have no right to claim, to
charge or to receive any interest in excess of the maximum rate of interest, if
any, permitted to be charged on that portion of the amount representing
principal which is outstanding and unpaid from time to time by Applicable Law.
Determination of the rate of interest for the purpose of determining whether
this Note is usurious under Applicable Law shall be made by amortizing,
prorating, allocating and spreading in equal parts during the period of the
actual time of this Note, all interest or other sums deemed to be interest
(hereinafter referred to in this Section 5.8 as "Interest") at any time
contracted for, charged or received from the Company in connection with this
Note. Any Interest contracted for, charged or received in excess of the maximum
rate allowed by Applicable Law shall be deemed a result of a mathematical error
and a mistake. If this Note is paid in part prior to the end of the full stated
term of this Note and the Interest received for the actual period of existence
of this Note exceeds the maximum rate allowed by Applicable Law, Holder shall
credit the amount of the excess against any amount owing under this Note or, if
this Note has been paid in full, or in the event that it has been accelerated
prior to maturity, Holder shall refund to the Company the amount of such excess,
and shall not be subject to any of the penalties provided by Applicable Law for
contracting for, charging or receiving Interest in excess of the maximum rate
allowed by Applicable Law. Any such excess which is unpaid shall be canceled.

IN WITNESS WHEREOF, the Company has caused this instrument to be duly executed
on the date first above written.

BLAST ENERGY SERVICES, INC.

By:/s/John O’Keefe
John O’Keefe
Chief Executive Officer