Document:

ex10_6.htm

    
      

    

    
      Exhibit
        10.6     Vendor Agreement(OS Imaging)

       

      MASTER
        FULFILLMENT SERVICES AGREEMENT

      

      This
        Master Services Agreement between OS Imaging, LLC. (“OSI”), A California
        Corporation with offices located at 216 E. Cota, Santa Barbara, CA 93101
        and Proton Laboratories Inc. (“Customer”), with offices located at 1135 Atlantic
        Avenue Suite 101 Alameda, CA 94501 includes the attached Service Supplements,
        together with any additional Service Schedules mutually agreed upon in writing
        in the future (collectively, the “Agreement”).

      

      1. 
        Services.   OSI
        will provide the services described in Attachment A - Services Supplement
        (“Services”) attached hereto.  OSI will not be required to provide any
        services not explicitly set forth in the Services Supplements attached
        hereto.

      

      2. 
        Term. 
The
        term of this Agreement shall be one year.  In addition, either party may
        terminate this Agreement and/or suspend performance in the event of any material
        breach by the other party (including, in the case of OSI, any overdue payment
        by
        Customer in excess of thirty (30) days).

      

      3. 
        Prices. 
        Prices for the Services are stated in the Service Supplements. Customer
        acknowledges that such prices are based on Customers commitment to purchase
        at
        least the minimum level of Services provided in the Services Supplements
        for the
        term of this Agreement. OSI may increase the prices set forth on any Service
        Supplement during the term hereof, provided that any such increase shall
        not
        exceed, on a percentage basis, the increase in OSI’s actual costs of providing
        the Services from the date hereof (including, without limitation, increases
        in
        the cost of labor, materials, insurance and similar items). Customer shall
        pay
        all sales, use, excise and other taxes, fees and charges relating to the
        Services.

       

      4. 
        Payment.  Payment
        for invoices for setup, graphics and fulfillment are due within ninety (90)
        days
        of the date of the invoice.  Invoices for postage are due upon
        delivery.  If any invoice is late, a late charge shall accrue on the
        delinquent amount at a rate of 1.5% per month, or the maximum rate permitted
        by
        law, whichever is less. Any and all dispute claims must be submitted to OSI
        within thirty (30) days of receipt of the applicable invoice.  All dispute
        claims not submitted within said thirty (30) day period are deemed
        waived. 

      

      5. 
        Obligations of
        OSI.  OSI shall be responsible for providing the Services consistent
        with industry standards, except as may be provided in applicable Service
        Supplements.  OSI DISCLAIMS ALL OTHER WARRANTIES AND REPRESENTATIONS,
        EXPRESSED OR IMPLIED, INCLUDING, WITHOUT LIMITATION, ANY WARRANTIES OF
        MERCHANTABILITY OR FITNESS FOR A PARTICULAR USE.

      

      6. 
        Compliance With
        Laws.  Customer shall be responsible for ensuring that its use of
        the Services, and all materials provided by Customer to OSI, comply with
        all
        applicable laws and regulations and the policies of OSI and do not infringe
        on
        the rights of others. Customer shall defend, indemnify and hold harmless
        OSI
        from and against any and all claims, damages, liabilities, losses, costs
        and
        expenses arising out of the use of the Services.

       

      7. 
        Liability
        Limitation.  EXCEPT AS PROVIDED IN SECTION 6 AND ANY BREACH BY
        CUSTOMER OF THE TERMS OF ANY SERVICE SUPPLEMENT, NEITHER PARTY SHALL BE LIABLE
        FOR ANY INDIRECT, INCIDENTAL, SPECIAL, CONSEQUENTIAL, EXEMPLARY OR PUNITIVE
        DAMAGES (INCLUDING, BUT NOT LIMITED TO, DAMAGES FOR LOST PROFITS OR LOST
        REVENUES), WHETHER OR NOT CAUSED BY THE ACTS OR OMISSIONS OR NEGLIGENCE OF
        ITS
        EMPLOYEES OR AGENTS, AND REGARDLESS OF WHETHER SUCH PARTY HAS BEEN INFORMED
        OF
        THE POSSIBILITY OR LIKELIHOOD OF SUCH DAMAGES. OSI’S AGGREGATE LIABILITY ARISING
        OUT OF THIS AGREEMENT, WHETHER IN CONTRACT, TORT OR OTHERWISE, SHALL NOT
        EXCEED
        THE TOTAL AMOUNT PAID BY CUSTOMER TO OSI FOR THE APPLICABLE SERVICE DURING
        THE
        THREE-MONTH PERIOD IMMEDIATELY PRECEDING THE EVENT WHICH GIVES RISE TO THE
        CLAIM.

      

      8. 
        Non-Solicitation. 
        Customer shall not, directly or indirectly, do any of the following:  (i)
        solicit any employee or agent of OSI, or encourage any such person to terminate
        any such relationship with OSI; (ii) encourage any customer, client, supplier
        or
        other business relationship of OSI to terminate or alter such relationship,
        whether contractual or otherwise written or oral, with OSI; (iii) encourage
        any
        prospective customer or supplier not to enter into a business relationship
        with
        OSI or; (iv) impair or attempt to impair any relationship, contractual or
        otherwise, written or oral, between OSI and any customer, supplier or other
        business relationship of OSI.

       

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

       

      9. 
        Miscellaneous. 
        Customer may not assign this Agreement or any rights or interests hereunder
        without the express prior written consent of OSI and no said assignment shall
        relieve Customer of its obligations hereunder. This Agreement shall be binding
        upon and inure to the benefit of the parties and their permitted successors
        and
        assigns.   This Agreement and any and all related Service Supplements
        constitute the entire agreement and understanding of the parties and supersede
        all prior and contemporaneous agreements and understandings between the parties
        with respect to the subject matter hereof. In the event of any action or
        proceeding to enforce or construe any of the provisions of this Agreement,
        the
        prevailing party shall be entitled to reasonable attorneys’ fees and
        costs.  This Agreement shall be governed and construed in accordance with
        the laws of the State of California.  In the event of litigation the forum
        will be in the City of Santa Barbara, County of Santa Barbara. Any changes
        to
        this Agreement, or any additional or different terms in the Service Supplements
        or any other documents will not be effective unless agreed to in writing
        by
        OSI.

       

      EXECUTION
        IN COUNTERPARTS

      

      To
        facilitate execution, this Agreement may be executed in as many counterparts
        as
        may be required; and it shall not be necessary that the signatures of, or
        on
        behalf of, each party, or that the signatures of all persons required to
        bind
        any party, appear on each counterpart; but it shall be sufficient that the
        signature of, or on behalf of, each party, or that the signatures of the
        persons
        required to bind any party, appear on one or more of the counterparts.  A
        facsimile signature will constitute an original and binding signature.  All
        counterparts shall collectively constitute a single agreement.  It shall
        not be necessary in making proof of this Agreement to produce or account
        for
        more than the number of counterparts containing the respective signatures
        of, or
        on behalf of, all of the parties hereto.

      

      IN
        WITNESS HEREOF, the parties
        hereto have executed this Agreement as of the date and year written
        below.

      

      
        	
                
                

                OS
                  Imaging, LLC

              	
                
                

                 

              	
                Proton
                  Laboratories, Inc.

              
	
                
                

                   

              	 	
                
                

                                                                               

              	 	 
	By:	/s/
                Michael Vazquez	 	By: 	/s/  Ed
                Alexander
	 	Michael
                Vazquez	 	 	Ed
                Alexander
	
                Name:

              	Michael
                Vazquez 	
                                                            

              	Name:   	Ed
                Alexander   
	
                Title:

              	President	
                                                                     

              	Title: 	CEO  

      

      

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

       

      ATTACHMENT
        A – SERVICE SUPPLEMENT

      

      Fulfillment

       

      
        	
                 

              	
                A.

              	
                Description
                  of
                  Fulfillment Kit.

              

      

      

      OS
        Imaging will be paid .70 (seventy cents) per piece for the setup and graphical
        layout of for two hundred fifty thousand (250,000) mailing pieces promoting
        Proton Laboratories totaling one hundred seventy five thousand dollars
        ($175,000.00) due net 90.

      

      
        	
                 

              	
                B.

              	
                Terms
                  of
                  Fulfillment.

              

      

      

      OSI
        will
        inventory, pick, print variable mailing data, assemble, apply postage and
        ready
        for carrier pick up for each completed unit.

      

      Products
        will be shipped Monday through Friday on standard business days of
        operation.  Fulfillment will not be performed on state and federal
        holidays.

      

      Fulfillment
        will be included for no additional cost.

       

      
        	
                 

              	
                C.

              	
                Postage
&
                  Delivery.

              

      

      

      All
        postage will be paid by Customer.  Postage will not be marked up by OS
        Imaging and will be provided to Customer at cost.  If delivered on OS
        Imaging’s account postage must be prepaid in advance.

    

     

     

    81EXHIBIT
      10.70

    

    AMENDMENT
      NO. 4
      AND WAIVER

     

    This Amendment
      No. 4 and Waiver (this
      "Agreement")
      dated
      as of January 18, 2008 (the "Effective
      Date"),
      is by
      and among Tekoil
      and Gas Gulf Coast, LLC,
      a
      Delaware limited liability company (the "Company"),
      Tekoil
      & Gas Corporation,
      a
      Delaware corporation, as guarantor (the "Guarantor"),
      the
      lenders party to the Credit Agreement described below ("Lenders"),
      J.
      Aron & Company,
      as Lead
      Arranger and as Syndication Agent (in such capacities, "Syndication
      Agent"),
      and
J.
      Aron & Company,
      as
      Administrative Agent for such Lenders (together with its permitted successors
      in
      such capacity, the "Administrative
      Agent")
      and as
      counterparty to the Company under the ISDA Agreement referred to below (in
      such
      capacity, "Lender
      Counterparty").

     

    RECITALS

     

    A. Reference
      is made to that certain Credit and Guaranty Agreement dated as of May 11,
      2007 among the Company, the Guarantor, the Lenders, the Syndication Agent and
      the Administrative Agent (as amended or supplemented to the date hereof, the
      "Credit
      Agreement").
      Reference is further made to that certain ISDA Master Agreement dated as of
      May
      11, 2007 (as amended, supplemented, or restated to the date hereof, and together
      with all confirmations issued thereunder, the "ISDA
      Agreement").

     

    B. Subject
      to the terms and conditions of this Agreement, the Company, the Guarantor,
      the
      Lenders, the Syndication Agent, the Administrative Agent and the Lender
      Counterparty, as applicable, wish to (i) make certain amendments to the Credit
      Agreement as provided herein and (ii) provide a waiver for the Waiver Defaults,
      as defined below.

     

    NOW
      THEREFORE, in consideration of their mutual undertakings, the Company, the
      Guarantor, the Lenders, the Syndication Agent, the Administrative Agent and
      the
      Lender Counterparty hereby agree as follows:

     

    Section
      1. Definitions
      and Interpretations.
      As used
      in this Agreement, each of the terms defined in the opening paragraph and the
      Recitals above shall have the meanings assigned to such terms therein. Each
      term
      defined in the Credit Agreement and used herein without definition shall have
      the meaning assigned to such term in the Credit Agreement, unless expressly
      provided to the contrary. Article, Section, Schedule, and Exhibit references
      are
      to this Agreement, unless otherwise specified. Paragraph headings have been
      inserted in this Agreement as a matter of convenience for reference only and
      it
      is agreed that such paragraph headings are not a part of this Agreement and
      shall not be used in the interpretation of any provision of this
      Agreement.

     

    Section
      2. Waiver.
      

     

    (a) The
      Company hereby acknowledges the existence of the following Events of Default
      (the "Waiver
      Defaults"):
      (i)
      the Company's failure to comply with the maximum debt to EBITDA ratio set forth
      in Section 6.11 of the Credit Agreement as of September 30, 2007, as
      demonstrated by the Compliance Certificate delivered by the Company for the
      period ending on such date, (ii) the Company's failure to comply with the PDP
      Collateral Coverage Ratio set forth in Section 6.12 of the Credit Agreement
      as
      of September 30, 2007, (iii) the Company's failure to deposit in the Collateral
      Account by November 23, 2007, $370,000 or applicable greater amount as required
      by Section 8.1(x) of the Credit Agreement, (iv) the Company's failure to deliver
      the reports required by Section 5.2(f)(iii) and 5.2(f)(v) for the month of
      October within 30 days after the end of such month, (v) the Company's failure
      to
      deliver by November 1, 2007, the proposed business plan required by Section
      5.2(j) of the Credit Agreement to have been delivered by such date, (vi) the
      Company's failure to deliver by December 31, 2007, the insurance coverage
      report required by Section 5.2(k) of the Credit Agreement to have been
      delivered by such date, (vii) the Parent's failure to have received, on or
      before November 7, 2007, net cash proceeds from the issuance of debt or sale
      of
      its Capital Stock in an aggregate amount of not less than $5,000,000 on terms
      and conditions satisfactory to the Administrative Agent in all respects as
      required by Section 8.1(q) of the Credit Agreement, (viii) the Parent's failure
      to pay to Geophysical Pursuit, Inc. the aggregate amount of $983,500.00 when
      due
      pursuant to two unsecured demand promissory notes (the "GPI
      Notes")
      dated
      July 11, 2007 and December 6, 2007, in the respective amounts of $581,000.00
      and
      $402,500.00, which failure constitutes an Event of Default pursuant to Section
      8.1(h) of the Credit Agreement, and (ix) the existence of the foregoing Events
      of Default under the Credit Agreement constitutes an Event of Default under
      the
      ISDA Agreement.

     

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    (b) Subject
      to the terms and conditions of this Agreement, the Lenders and the Lender
      Counterparty, as applicable, hereby waive the Waiver Defaults. The waiver by
      the
      Lenders and the Lender Counterparty described in this Section 2 is contingent
      upon the satisfaction of the conditions precedent set forth below in this
      Agreement and is limited to the Waiver Defaults. Such waiver shall not be
      construed to be a consent to or a permanent waiver of any Section covered by
      either of the Waiver Defaults or any other terms, provisions, covenants,
      warranties or agreements contained in the Credit Agreement, the ISDA Agreement,
      or in any of the other Transaction Documents. The Lenders and the Lender
      Counterparty reserve the right to exercise any rights and remedies available
      to
      them in connection with any other present or future defaults with respect to
      the
      Credit Agreement, the ISDA Agreement, or any other provision of any Transaction
      Document. The description herein of the Waiver Defaults is based upon the
      information available to the Lenders and the Lender Counterparty on the date
      hereof and shall not be deemed to exclude the existence of any other Events
      of
      Default. The failure of the Lenders or the Lender Counterparty to give notice
      to
      any Credit Party of any such other Events of Default is not intended to be
      nor
      shall be a waiver thereof. The Company and the Guarantor hereby agree and
      acknowledge that the Lenders and the Lender Counterparty require and will
      require strict performance by the Company and the Guarantor of all of their
      respective obligations, agreements and covenants contained in the Credit
      Agreement, the ISDA Agreement, and the other Transaction Documents, as amended
      hereby, and no inaction or action regarding any Event of Default is intended
      to
      be or shall be a waiver thereof. 

     

    (c) Without
      limitation of the foregoing, any failure (i) to comply with the maximum debt
      to
      EBITDA ratio set forth in Section 6.11 of the Credit Agreement (as amended
      hereby) or the PDP Collateral Coverage Ratio set forth in Section 6.12 of the
      Credit Agreement as of any subsequent measurement date, (ii) to deposit in
      the
      Collateral Account all amounts required by Section 8.1(x) of the Credit
      Agreement by the date set forth in Section 8.1(x) of the Credit Agreement (as
      amended hereby), (iii) to deliver the report required by Section 5.2(f)(v)
      of
      the Credit Agreement for the month of October by the date set forth in Section
      8.1(y) of the Credit Agreement, (iv) to deliver the proposed business plan
      required by Section 5.2(j) of the Credit Agreement for fiscal year 2008 by
      the
      date set forth in Section 8.1(y) of the Credit Agreement, (v) of the Parent
      to
      have received, by the date set forth in Section 8.1(q) of the Credit
      Agreement (as amended hereby), net cash proceeds from the issuance of debt
      or
      sale of its Capital Stock in an aggregate amount of not less than $5,000,000
      on
      terms and conditions satisfactory to the Administrative Agent in all respects,
      or (vi) pursuant to Section 8.1(bb) with respect to the GPI Notes, shall
      constitute an Event of Default under the Credit Agreement, and any such Event
      of
      Default under the Credit Agreement shall constitute an Event of Default under
      the ISDA Agreement.

     

    
      
         

      

      
        -2-

        
          

        

      

      
         

      

    

    Section
      3. Amendments
      to the Credit Agreement.
      

     

    (a) Section
      1.1 of the Credit Agreement is hereby amended by deleting the definition of
      "Calculation Quarter" in its entirety and replacing it with the
      following:

     

    "Calculation
      Month"
      means
      each calendar month period.

     

    In
      addition, each reference in the Credit Agreement to "Calculation Quarter" is
      hereby replaced with a reference to "Calculation Month."

     

    (b) Section
      1.1 of the Credit Agreement is hereby amended by deleting the definition of
      "Interest Period" in its entirety and replacing it with the
      following:

     

    "Interest
      Period"
      means
      (a) the one-month period ending on but not including January 26, 2008, and
      (b)
      each subsequent one-month period from and including one Monthly Payment Date
      to
      but not including the next Monthly Payment Date.

     

    (c) Section
      1.1 of the Credit Agreement is hereby amended by deleting the definition of
      "Permitted G&A Expense Amount" in its entirety and replacing it with the
      following:

     

    "Permitted
      G&A Expense Amount"
      means
      the amount of $125,000 per calendar month. The parties agree and acknowledge
      that such amount comprises the "Service
      Fee"
      payable
      under the Management Services Agreement.

     

    (d) Section
      1.1 of the Credit Agreement is hereby amended by deleting the definition of
      "Quarterly Payment Date" in its entirety and replacing it with the
      following:

     

    "Monthly
      Payment Date"
      means
      the 26th
      day of
      each calendar month, commencing with January 26, 2008.

     

    In
      addition, each reference in the Credit Agreement to "Quarterly Payment Date"
      is
      hereby replaced with a reference to "Monthly Payment Date."

     

    (e) Section
      2.6(c) of the Credit Agreement is hereby deleted in its entirety and replaced
      with the following:

     

    (c) Interest
      on each Loan shall be due and payable in arrears, and Company shall pay such
      interest then accrued and owing, (i) on and to each Monthly Payment Date
      applicable to that Loan; (ii) on the date of any prepayment of all or any
      portion of such Loan, whether voluntary or mandatory, to the extent accrued
      on
      the amount being prepaid; and (iii) at maturity, including the July 2007
      Uncommitted Loan Maturity Date and the Maturity Date, as
      applicable.

     

    
      
         

      

      
        -3-

        
          

        

      

      
         

      

    

    (f) Section
      2.11 of the Credit Agreement is hereby deleted in its entirety and replaced
      with
      the following:

     

    2.11 Payment
      of Principal.
      On
      each
      Monthly Payment Date, Company will repay the principal of the Loans, without
      premium or penalty, in an amount equal to (i) on each of January 26, 2008,
      February 26, 2008, March 26, 2008, April 26, 2008, May 26, 2008, and
      June 26, 2008, the greater of (A) $1,000,000 and (B) 100% of ANCF (or such
      lesser percentage of ANCF, not to be less than 50%, as may be selected by Agent
      in its sole discretion) for the immediately preceding Calculation Month and
      (ii)
      on each Monthly Payment Date thereafter, the greater of (A) $2,000,000 and
      (B)
      100% of ANCF (or such lesser percentage of ANCF, not to be less than 50%, as
      may
      be selected by Agent in its sole discretion) for the immediately preceding
      Calculation Month. Such amount shall be applied first
      to pay
      (or prepay) the principal of Loans other than the July 2007 Uncommitted Loan
      and
second
      to pay
      (or prepay) the principal of the July 2007 Uncommitted Loan.

     

    (g) Section
      5.2 of the Credit Agreement is hereby amended by adding the following clause
      (p)
      in appropriate alphabetical order:

     

    (p) On
      or
      about each of the first and fifteenth days of each month (or, if such day is
      not
      a Business Day, on the immediately succeeding Business Day), or as otherwise
      requested by the Administrative Agent, an update regarding the status of all
      approvals and authorizations from (i) the Texas Railroad Commission and (ii)
      the
      Texas General Land Office.

     

    (h) Section
      6.11 of the Credit Agreement is hereby amended by modifying the table included
      in such Section by deleting in its entirety the reference to "12/31/07" from
      the
      Fiscal Quarter column as well as by deleting in its entirety the corresponding
      reference to "2.50 to 1.00" from the Maximum Ratio column to the immediate
      right
      thereof. 

     

    (i) Section
      6.11 of the Credit Agreement is hereby further amended by deleting the final
      paragraph thereof in its entirety and replacing it with the
      following:

     

    Such
      ratio with respect to the Fiscal Quarters ending March 31, 2008, June 30, 2008,
      and September 30, 2008 shall be calculated using "Annualized
      EBITDA".
      For
      purposes of this Section 6.11, "Annualized
      EBITDA"
      means
      (a) with respect to the Fiscal Quarter ending March 31, 2008, EBITDA for such
      Fiscal Quarter multiplied by 4; (b) with respect to the Fiscal Quarter ending
      June 30, 2008, EBITDA for the period commencing on January 1, 2008 through
      June
      30, 2008 multiplied by 2; and (c) with respect to the Fiscal Quarter ending
      September 30, 2008, for the period commencing on January 1, 2008 through
      September 30, 2008 multiplied by 4/3.

     

    (j) Section
      8.1(s) of the Credit Agreement is hereby deleted in its entirety and replaced
      with the following:

     

    
      
         

      

      
        -4-

        
          

        

      

      
         

      

    

    (s) Company
      shall fail to, on or before March 8, 2008 (i) furnish title opinions, in form
      and substance reasonably satisfactory to Administrative Agent, covering Texas
      State Lease MF030085 (State Tract 5-8A), and any lease pooled or unitized
      therewith, specifically addressing, without limitation, the interests of
      Borrower in and to the following wells and non-producing reserves: State Tract
      5-8A #02, State Tract 5-8A #01, State Tract 5-8 #01(BP01), State Tract 5-8A
      #01(BP02), or (ii) comply with all reasonable requirements made by
      Administrative Agent pursuant to such title opinions;

     

    (k) Section
      8.1(q) of the Credit Agreement is hereby deleted in its entirety and replaced
      with the following:

     

    (q) Parent
      shall not have received, on or before February 18, 2008, net cash proceeds
      from
      the issuance of debt or sale of its Capital Stock in an aggregate amount of
      not
      less than $5,000,000 (in addition to, and exclusive of, amounts received in
      connection with the Required Capital Date) on terms and conditions satisfactory
      to the Administrative Agent in all respects;

     

    (l) Section
      8.1(x) of the Credit Agreement is hereby deleted in its entirety and replaced
      with the following:

     

    (x) Company
      (i) shall fail to notify Administrative Agent within 1 Business Day after
      receiving any notice regarding the filing, or threatened filing, of any
      mechanic's and materialman's lien, or similar lien, by J-W Power or (ii) shall
      not have deposited in the Collateral Account, within 15 days after Company's
      receipt of any such notice, $370,000 or such greater amount as is sufficient
      in
      accordance with GAAP to adequately reserve for the Liabilities asserted by
      J-W
      Power to be owed by Company and/or Sellers, such amounts to be held under the
      control of Administrative Agent as cash collateral and applied to satisfy such
      Liabilities or other obligations approved in writing or required by the Required
      Lenders (including without limitation application to the reduction of
      outstanding principal, interest and other sums owed by the Company on the Loans,
      the other Obligations, or otherwise under the Transaction
      Documents).

     

    (m) Section
      8.1 of the Credit Agreement is amended by adding the following clause (y) in
      appropriate alphabetical order:

     

    (y) (A)
      The
      report required by Section 5.2(f)(v) of the Credit Agreement for the month
      of
      October shall not have been delivered, in detail satisfactory to the
      Administrative Agent, on or before January 31, 2008, (B) the proposed business
      plan required by Section 5.2(j) of the Credit Agreement for fiscal year 2008,
      in
      form and detail satisfactory to the Administrative Agent, shall not have been
      delivered by March 31, 2008, or (C) the insurance coverage report required
      by Section 5.2(k) of the Credit Agreement shall not have been delivered, in
      form and substance satisfactory to the Administrative Agent, shall not have
      been
      delivered by January 31, 2008; or

     

    (n) Section
      8.1 of the Credit Agreement is amended by adding the following clause (z) in
      appropriate alphabetical order:

     

    
      
         

      

      
        -5-

        
          

        

      

      
         

      

    

    (z) (i)
      Any
      of the following shall not have occurred on or before February 18, 2008: (A)
      Company has hired an operations consultant acceptable to Administrative Agent
      or
      (B) Company has hired a financial consultant acceptable to Administrative Agent,
      or (ii) Company shall fail to hire a regulatory matters consultant acceptable
      to
      Administrative Agent within 15 days of a request by Administrative Agent that
      Company hire a regulatory matters consultant; or

     

    (o) Section
      8.1 of the Credit Agreement is amended by adding the following clause (aa)
      in
      appropriate alphabetical order:

     

    (aa) Any
      of
      the following shall not have occurred on or before April 30, 2008 with respect
      to Company's unnamed, unnumbered workover rig barge (the "Barge"):
      (A)
      Company has documented the Barge with the United States Coast Guard, (B) Company
      has delivered a preferred vessel mortgage, or other first priority perfected
      security interest acceptable to Administrative Agent, with respect to the Barge,
      and (C) Company has delivered such legal opinions as are requested by
      Administrative Agent in connection therewith, all acceptable to Administrative
      Agent.

     

    (p) Section
      8.1 of the Credit Agreement is amended by adding the following clause (bb)
      in
      appropriate alphabetical order:

     

    (bb) Any
      of
      the following shall occur with respect to either of the GPI Notes: (A) Parent
      fails to settle in full its obligations with respect to the GPI Notes, on terms
      acceptable to Administrative Agent, on or before February 29, 2008, (B) any
      acceleration of such obligations, or (C) the commencement of any remedies or
      filing of any suit by or on behalf of the payee with respect to such
      obligations.

     

    Section
      4. Amendment
      to the Management Services Agreement.
      In
      connection with, and in consideration of, the foregoing amendments to the Credit
      Agreement, Company and Guarantor hereby amend the Management Services Agreement
      by deleting the definition of "Service Fee" in its entirety and replacing it
      with the following:

     

    "Service
      Fee"
      means
      (a) through and including December 31, 2007, $250,000 for each calendar month
      ("Subject Month") beginning June 1, 2007; provided that if a "Default" or
      "Event of Default" (as those terms are defined in the senior credit facility
      of
      the Company in effect from time to time) exists or existed in such Subject
      Month, then such amount shall be reduced to $125,000 for such Subject Month
      and
      (b) commencing January 1, 2008 and thereafter, $125,000 for each calendar
      month.

     

    Section
      5. No
      Obligation to Make Payments; Application.
      Notwithstanding anything herein to the contrary, Company hereby acknowledges,
      confirms and agrees that for so long as any Event of Default or Potential Event
      of Default (as such terms are defined in the ISDA Agreement) is outstanding
      with
      respect to Company, and at all time prior to the Capitalization Date (a) any
      obligation Lender Counterparty may have to make any payment under the ISDA
      Agreement shall be suspended and (b) any amounts payable by Lender Counterparty
      under the ISDA Agreement may be applied to the Obligations at the Administrative
      Agent's election, in such order as may be elected by the Administrative Agent
      in
      its sole discretion.

     

    
      
         

      

      
        -6-

        
          

        

      

      
         

      

    

    Section
      6. Representations
      and Warranties.
      

     

    (a) The
      Guarantor represents and warrants that (i) after giving effect to this
      Agreement, the representations and warranties set forth in the Credit Agreement,
      the representations and warranties set forth in the ISDA Agreement, and the
      representations and warranties contained in the other Transaction Documents
      to
      which the Guarantor is a party are true and correct in all material respects
      on
      and as of the Effective Date as if made on and as of such date; (ii) other
      than
      the Waiver Defaults, no Default or Event of Default, or Event of Default or
      Potential Event of Default (as such terms are defined in the ISDA Agreement)
      has
      occurred and is continuing; (iii) the execution, delivery and performance of
      this Agreement and the other documents, instruments, certificates and agreements
      required to be delivered by this Agreement ("Other
      Documents")
      and to
      which the Guarantor is a party are within the corporate power and authority
      of
      the Guarantor and have been duly authorized by appropriate corporate action
      and
      proceedings; (iv) this Agreement and the Other Documents to which the Guarantor
      is a party constitute legal, valid, and binding obligations of the Guarantor
      enforceable in accordance with their respective terms, except as limited by
      applicable bankruptcy, insolvency, reorganization, moratorium, or similar laws
      affecting the rights of creditors generally and general principles of equity;
      (v) there are no governmental or other third party consents, licenses and
      approvals required in connection with the execution, delivery, performance,
      validity and enforceability of this Agreement or any of the Other Documents
      to
      which the Guarantor is a party; and (vi) the Liens under the Security Documents
      are valid and subsisting and secure the Company's and the Guarantor's
      obligations under the Credit Agreement, the ISDA Agreement, and the other
      Transaction Documents.

     

    (b) The
      Company represents and warrants that: (i) after giving effect to this Agreement,
      the representations and warranties contained in the Credit Agreement, the
      representations and warranties set forth in the ISDA Agreement, and the
      representations and warranties contained in the other Transaction Documents
      to
      which the Company is a party are true and correct in all material respects
      on
      and as of the Effective Date as if made on and as of such date; (i) other than
      the Waiver Defaults, no Default or Event of Default or Event of Default or
      Potential Event of Default (as such terms are defined in the ISDA Agreement)
      has
      occurred and is continuing; (ii) the execution, delivery and performance of
      this
      Agreement and the Other Documents to which the Company is a party are within
      the
      limited liability company power and authority of the Company and have been
      duly
      authorized by appropriate limited liability company action and proceedings;
      (iv)
      this Agreement and the Other Documents to which the Company is a party
      constitute legal, valid, and binding obligations of the Company enforceable
      in
      accordance with their respective terms, except as limited by applicable
      bankruptcy, insolvency, reorganization, moratorium, or similar laws affecting
      the rights of creditors generally and general principles of equity; (v) there
      are no governmental or other third party consents, licenses and approvals
      required in connection with the execution, delivery, performance, validity
      and
      enforceability of this Agreement or any of the Other Documents to which the
      Company is a party; and (vi) the Liens under the Security Documents are valid
      and subsisting and secure Company's obligations under the Credit Agreement,
      the
      ISDA Agreement, and the other Transaction Documents.

     

    Section
      7. Conditions
      to Effectiveness.
      This
      Agreement shall become effective and enforceable against the parties hereto,
      the
      Credit Agreement and Management Services Agreement shall be amended as provided
      herein, upon the occurrence of the following conditions precedent on or before
      the Effective Date:

     

    
      
         

      

      
        -7-

        
          

        

      

      
         

      

    

    (a) Agreement.
      The
      Administrative Agent shall have received multiple original counterparts of
      this
      Agreement duly and validly executed and delivered by duly authorized officers
      of
      the Company, the Guarantor, the Administrative Agent, the Lenders, and the
      Lender Counterparty; 

     

    (b) No
      Default; Representations.
      Other
      than the Waiver Defaults, no Default or Event of Default or Event of Default
      or
      Potential Event of Default (as such terms are defined in the ISDA Agreement)
      shall have occurred and be continuing as of the Effective Date. The
      representations and warranties in this Agreement, and in the Credit Agreement
      and the ISDA Agreement, shall be true and correct in all material
      respects;

     

    (c) Closing
      Documents List.
      The
      Administrative Agent shall have received, and shall be satisfied in its sole
      discretion with, the other items listed on the Closing Documents List attached
      hereto as Exhibit
      A;
      and

     

    (d) Fees.
      The
      Company shall have paid all fees and expenses of the Administrative Agent's
      outside legal counsel and other consultants pursuant to all invoices presented
      for payment on or prior to the Effective Date.

     

    Section
      8. Effect
      on Transaction Documents; Acknowledgments.
      

     

    (a) The
      Company and the Guarantor each acknowledges that on the date hereof all
      Obligations are payable without defense, offset, counterclaim or
      recoupment.

     

    (b) Except
      as
      set forth in Section 2 above, the Lenders, Lender Counterparty, and
      Administrative Agent hereby expressly reserve all of their respective rights,
      remedies, and claims under the Credit Agreement, the ISDA Agreement, and the
      other Transaction Documents. Nothing in this Agreement shall constitute a waiver
      or relinquishment of (i) any Default or Event of Default, or any Event of
      Default or Potential Event of Default (as such terms are defined in the ISDA
      Agreement), under the Credit Agreement, the ISDA Agreement, or any of the other
      Transaction Documents other than as expressly set forth in Section 2 above,
      (ii)
      any of the agreements, terms or conditions contained in the Credit Agreement,
      the ISDA Agreement, or any of the other Transaction Documents, (iii) any rights
      or remedies of the Lenders, Lender Counterparty, Administrative Agent, Royalty
      Owner, or Warrant Owner with respect to the Credit Agreement, the ISDA
      Agreement, and the other Transaction Documents, or (iv) the rights of each
      of
      the Lenders, the Lender Counterparty, and the Administrative Agent to collect
      the full amounts owing to it under the Credit Agreement, the ISDA Agreement,
      and
      the other Transaction Documents.

     

    (c) The
      Company, the Guarantor, the Lenders and Administrative Agent, each hereby
      adopts, ratifies, and confirms the Credit Agreement, as amended hereby, and
      the
      Company, the Guarantor, and the Lender Counterparty each hereby adopts,
      ratifies, and confirms the ISDA Agreement, and each of the foregoing parties
      acknowledges and agrees that the Credit Agreement, as amended hereby, the ISDA
      Agreement and the other Transaction Documents are and remain in full force
      and
      effect, and the Company and the Guarantor each acknowledges and agrees that
      neither its liabilities under the Credit Agreement, the ISDA Agreement, and
      the
      other Transaction Documents nor the validity, perfection, or priority of any
      lien or security interest securing the Obligations are impaired in any respect
      by this Agreement.

     

    
      
         

      

      
        -8-

        
          

        

      

      
         

      

    

    (d) From
      and
      after the Effective Date, all references to the Credit Agreement, the ISDA
      Agreement, and the Transaction Documents (including without limitation the
      Management Services Agreement) shall mean such Credit Agreement, such ISDA
      Agreement, and such Transaction Documents (including without limitation the
      Management Services Agreement) as amended by this Agreement.

     

    (e) This
      Agreement and each of the Other Documents is a Transaction Document for the
      purposes of the provisions of the other Transaction Documents (including without
      limitation the Management Services Agreement). Without limiting the foregoing,
      any breach of representations, warranties, and covenants under this Agreement
      shall be a Default or Event of Default, as applicable, under the Credit
      Agreement.

     

    Section
      9. Reaffirmation
      of the Guaranty.
      The
      Guarantor hereby ratifies, confirms, and acknowledges that its obligations
      under
      the Guaranty are in full force and effect and that the Guarantor continues
      to
      unconditionally and irrevocably guarantee the full and punctual payment, when
      due, whether at stated maturity or earlier by acceleration or otherwise, all
      of
      the Guaranteed Obligations as such Guaranteed Obligations have been increased
      and amended by this Agreement. The Guarantor hereby acknowledges that its
      execution and delivery of this Agreement does not indicate or establish an
      approval or consent requirement by the Guarantor under the Credit Agreement
      in
      connection with the execution and delivery of amendments to the Credit
      Agreement, the Notes, the ISDA Agreement, or any of the other Transaction
      Documents.

     

    Section
      10. Release
      of Claims.
      

     

    (a) TO
      INDUCE ADMINISTRATIVE AGENT, LENDERS, AND LENDER COUNTERPARTY TO AGREE TO THE
      TERMS OF THIS AGREEMENT, EACH CREDIT PARTY HEREBY (A) REPRESENTS AND WARRANTS
      THAT, AS OF THE DATE OF THIS AGREEMENT, THERE ARE NO CLAIMS OR OFFSETS AGAINST
      OR DEFENSES OR COUNTERCLAIMS TO ITS OBLIGATIONS UNDER THE TRANSACTION DOCUMENTS
      OR UNDER THE ISDA AGREEMENT, AND WAIVES ANY AND ALL SUCH CLAIMS, OFFSETS,
      DEFENSES, OR COUNTERCLAIMS, WHETHER KNOWN OR UNKNOWN, ARISING PRIOR TO THE
      DATE
      OF THIS AGREEMENT, (B) RELEASES AND FOREVER DISCHARGES THE RELEASED PERSONS
      (AS
      HEREINAFTER DEFINED) FROM ANY AND ALL RELEASED CLAIMS (AS HEREINAFTER DEFINED),
      AND (C) COVENANTS NOT TO ASSERT (AND NOT TO ASSIST OR ENABLE ANY OTHER PERSON
      TO
      ASSERT) ANY RELEASED CLAIM AGAINST ANY RELEASED PERSON. THE CREDIT PARTIES
      ACKNOWLEDGE AND AGREE THAT SUCH RELEASE IS A GENERAL RELEASE OF ANY AND ALL
      RELEASED CLAIMS THAT CONSTITUTES A FULL AND COMPLETE SATISFACTION FOR ALL OR
      ANY
      ALLEGED INJURIES OR DAMAGES ARISING OUT OF OR IN CONNECTION WITH THE RELEASED
      CLAIMS, ALL OF WHICH ARE HEREIN COMPROMISED AND SETTLED. 

     

    
      
         

      

      
        -9-

        
          

        

      

      
         

      

    

    (b) As
      used
      above, "Released Claims" shall mean any and all actions, causes of action,
      judgments, executions, suits, debts, claims, demands, controversies,
      liabilities, obligations, damages and expenses of any and every character
      (whether known or unknown, liquidated or unliquidated, absolute or contingent,
      acknowledged or disputed, direct or indirect), at law or in equity, of
      whatsoever kind or nature (including claims of usury), whether heretofore or
      hereafter accruing, for or because of any matter or things done, omitted or
      suffered to be done by any of the Released Persons prior to and including the
      date hereof that in any way directly or indirectly arise out of or in any way
      are connected to (i) any of the Transaction Documents or the ISDA Agreement
      or
      any default or event of default thereunder, (ii) any negotiation, discussion,
      enforcement action, agreement or failure to agree related to any Transaction
      Document, the ISDA Agreement or any default or event of default thereunder,
      or
      (iii) any action, event, occurrence, or omission otherwise related to the
      rights, duties, obligations and relationships among the various Credit Parties,
      Administrative Agent, Lenders, and Lender Counterparty; provided, however,
      that
“Released Claims” shall not include any outstanding obligations owed as of the
      date of this Agreement to Company by Lender Counterparty, or any affiliate
      thereof, under the express terms of the ISDA Agreement, and "Released Persons"
      shall mean Administrative Agent, Lenders, Royalty Owner, Warrant Owner, and
      Lender Counterparty, together with their respective employees, agents,
      attorneys, officers, partners, shareholders, accountants, consultants,
      directors, and Affiliates, and their respective successors and
      assigns.

     

    Section
      11. Miscellaneous.
      

     

    (a) Counterparts.
      This
      Agreement may be signed in any number of counterparts, each of which shall
      be an
      original and all of which, taken together, constitute a single instrument.
      This
      Agreement may be executed by facsimile signature and all such signatures shall
      be effective as originals.

     

    (b) Successors
      and Assigns.
      This
      Agreement shall be binding upon and inure to the benefit of the parties hereto
      and their respective successors and assigns permitted pursuant to the Credit
      Agreement or ISDA Agreement, as applicable.

     

    (c) Invalidity.
      In the
      event that any one or more of the provisions contained in this Agreement shall
      for any reason be held invalid, illegal or unenforceable in any respect, such
      invalidity, illegality or unenforceability shall not affect any other provision
      of this Agreement.

     

    (d) Governing
      Law.
      THIS
      AGREEMENT AND THE RIGHTS AND OBLIGATIONS OF THE PARTIES HEREUNDER SHALL BE
      GOVERNED BY, AND SHALL BE CONSTRUED AND ENFORCED IN ACCORDANCE WITH, THE LAWS
      OF
      THE STATE OF NEW YORK WITHOUT REGARD TO CONFLICT OF LAWS PRINCIPLES
      THEREOF.

     

    THIS
      AGREEMENT, THE CREDIT AGREEMENT AS AMENDED BY THIS AGREEMENT, THE NOTES, THE
      ISDA AGREEMENT, AND THE OTHER TRANSACTION DOCUMENTS CONSTITUTE THE ENTIRE
      UNDERSTANDING AMONG THE PARTIES HERETO WITH RESPECT TO THE SUBJECT MATTER HEREOF
      AND SUPERSEDE ANY PRIOR AGREEMENTS, WRITTEN OR ORAL, WITH RESPECT
      THERETO.

     

    THERE
      ARE NO UNWRITTEN
      ORAL AGREEMENTS AMONG THE PARTIES.

     

    

    
      
         

      

      
        -10-

        
          

        

      

      
         

      

    

     

    IN
      WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed
      by
      their respective officers thereunto duly authorized, as of the date first above
      written.

     

     

    
      	 	COMPANY
	 	 	 
	 	TEKOIL AND GAS GULF COAST,
              LLC
	 	 	 
	 	By: Tekoil & Gas Corporation,
              its Managing Member
	 	 	 

    

     

    

    
      	 	By:	/s/ Mark Western
	 	 	
              
                

              

              Mark Western

            
	 	 	CEO and Chairman of the Board of
              Directors
	 	 	 
	 	 	 
	 	GUARANTOR
	 	 
	 	TEKOIL & GAS
              CORPORATION
	 	 

    

     

    
      
        	 	By:	/s/ Mark Western
	 	 	
                
                  

                

                Mark Western

              
	 	 	CEO and Chairman of the Board of
                Directors
	 	 	 

      

       

       

      
        
           

        

        
          
            Signature
              Page to Amendment No. 4 and Waiver

          

          
            

          

        

        
           

        

      

       

       

      
        	 	 	 
	 	
                J.
                  ARON & COMPANY,

                as
                  Lead Arranger, Syndication Agent,

                Administrative
                  Agent, Lender Counterparty and a Lender

              
	 	 

      

       

      
        
          	 	By:	Donna
                  Mansfield
	 	 	
                  
                    

                  

                  Authorized
                    Signatory

                

        

         

         

        
          
             

          

          
            
              Signature
                Page to Amendment No. 4 and Waiver

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