Document:

EXHIBIT E

                               CUSTODIAL AGREEMENT

      THIS CUSTODIAL AGREEMENT (this "Agreement") is made as of April 6, 2005,
by and among TNX Television Holdings, Inc., a Delaware corporation with an
address at Presidential Place, 800 S. Ocean Blvd, L1, Boca Raton Fla. 33432 (the
"Company"), the purchasers signatory hereto (each individually, a "Purchaser,"
and collectively, the "Purchasers"), and Feldman Weinstein LLP, as custodial
agent for and for the benefit of the Purchasers, with an address at 420
Lexington Avenue, Suite 2620, New York, New York 10170 (the "Custodian").
Capitalized terms used but not defined herein shall have the meanings set forth
in the Securities Purchase Agreement referred to in the first recital.

                              W I T N E S S E T H:

      WHEREAS, the Company and each Purchaser has entered into the Securities
Purchase Agreement of even date herewith (the "Purchase Agreement"), pursuant to
which the Purchasers are purchasing the Company's Secured Convertible Debentures
due two years after their date of issuance (collectively, the "Debentures") and
Warrants; and

      WHEREAS, in order to induce the Purchasers to enter into the Purchase
Agreement and to purchase the Debentures, and as a condition precedent thereto,
the Company has agreed to secure the payment and performance of its obligations
under the Purchase Agreement, the Debentures, this Agreement and the other
Transaction Documents by granting to the Purchasers a first priority security
interest in certain of the cash proceeds from the sale of the Debentures; and

      WHEREAS, the Company and the Purchasers have requested that the Custodian
hold 30% of the gross cash proceeds from the sale of the Debentures for the
benefit of the Purchasers, as secured parties, in accordance with the terms
hereof;

      NOW, THEREFORE, in consideration of the premises and the mutual covenants
hereinafter contained, and for other good and valuable consideration, the
receipt and sufficiency of which are hereby acknowledged, the parties hereto
agree as follows:

      1. Closing.

            (a) Upon the Custodian's receipt from the Purchasers of, in the
      aggregate, up to $5,000,000 (the "Aggregate Purchase Price") into its
      custodial account, together with each Purchaser's executed counterparts of
      this Agreement, the Purchase Agreement, the Security Agreement, the
      Registration Rights Agreement and, if applicable, the Series A Preferred
      Stock, the certificates evidencing the Series A-1 Preferred Stock, the
      Custodian shall telephonically advise the Company, or the Company's
      designated attorney or agent, of its receipt of such funds and such
      documents.

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            (b) Wire transfers to the Custodian shall be made as follows:

                        STERLING NATIONAL BANK
                        622 3RD AVENUE
                        NEW YORK, NY 10017
                        ACCOUNT NAME:  FELDMAN WEINSTEIN LLP
                        ABA ROUTING NO: 026007773
                        ACCT NO: 0814180101
                        REMARK: TNXT/[FUND NAME]

            (c) The Company, upon receipt of the telephonic notice described in
      Section 1(a) above, shall deliver to the Custodian the certificates
      representing the Debentures and the Warrants to be issued to each
      Purchaser at the Closing together with:

                  (i) a counterpart of the Registration Rights Agreement, duly
            executed by the Company;

                  (ii) the executed legal opinion of Company Counsel;

                  (iii) a counterpart of the Purchase Agreement, duly executed
            by the Company;

                  (iv) a counterpart of this Agreement, duly executed by the
            Company;

                  (v) a counterpart of the Security Agreement, along with all
            Security Documents;

                  (vi) if applicable, a warrant(s) issued to First Montauk
            Securities Corp. ("First Montauk") and/or its designees to purchase
            up to a number of shares of Common Stock equal to 10% of the number
            of shares of Common Stock issuable upon conversion of the Debentures
            that are issued to the Purchasers who were introduced to the Company
            by First Montauk, as set forth on Schedule 1.1(e) attached hereto,
            with an exercise price of $0.75, subject to adjustment therein, and
            otherwise in the form of the Warrants ("First Montauk Warrants");

                  (vii) a warrant(s) issued to T.R. Winston & Company, LLC
            ("T.R. Winston") and/or its designees to purchase up to a number of
            shares of Common Stock equal to 10% of the number of shares of
            Common Stock issuable upon conversion of the Debentures purchased by
            Bristol Investment Fund, Ltd. ("Bristol"), as set forth on Schedule
            1.1(e) attached hereto, with an exercise price of $0.75, subject to
            adjustment therein, and otherwise in the form of the Warrants ("T.R.
            Winston Warrants" and collectively with the First Montauk Warrants
            and the vFinance Warrants, the "Placement Agent Warrants");

                  (viii)a certificate evidencing a number of shares of Common
            Stock equal to 5% of the Aggregate Purchase Price, as set forth on
            Schedule 1.1(e) attached hereto, divided by the closing bid price on
            the Trading Day immediately prior to the date of the Purchase
            Agreement, registered in the name of such placement Agent (the
            "Placement Agent Shares"); and

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                  (ix) if applicable, a Secretary's Certificate, as required
            pursuant to Section 4.17 of the Purchase Agreement.

            (d) In the event that the foregoing items have not been delivered to
      the Custodian by the Company within five (5) Trading Days after the
      Custodian has received all of the Subscription Amounts (net of any
      permitted deductions pursuant to the Purchase Agreement), then each
      Purchaser shall have an independent and separate right to demand and
      receive the return of its Subscription Amount.

            (e) Once the Custodian receives all of the items required to be
      delivered hereunder, it shall wire the gross proceeds raised pursuant to
      the Purchase Agreement per the written instructions of the Company less
      (i) the balance of 30% of the Aggregate Gross Purchase Price (the "Secured
      Proceeds") which shall be initially transferred into a separate
      non-interest bearing Custodial Account of the Custodian (the "Custodial
      Account"), (ii) 5% of the Aggregate Purchase Price of all Purchasers to
      the Persons and in the amounts set forth on Schedule 1.1(e) attached
      hereto, (iii) $10,000 to the Custodian for payment of legal fees and
      expenses and (iv) 5% of the Subscription Amount purchased by Bristol.
      Thereafter, the Custodial Account shall be maintained by the Custodian in
      accordance with the terms of this Agreement and shall, if possible, be
      invested in an interest-bearing government securities or commercial money
      market fund made available by the Custodian's bank or as otherwise
      directed in a writing executed by the Company and each Purchaser. The
      Custodian, by its execution and delivery of this Agreement, hereby agrees
      to accept receipt of the Secured Proceeds and to hold such proceeds for
      the benefit of the Purchasers, as secured parties.

            (f) Within five (5) Trading Days after transferring the Secured
      Proceeds into the Custodial Account, the Custodian shall then arrange to
      have originals or counterpart originals of the Purchase Agreement, the
      Warrants, the Placement Agent Warrants (as applicable), the Debentures,
      the Registration Rights Agreement, the Security Agreement and the Security
      Documents, this Agreement, the Placement Agent Shares (as applicable) and
      the opinion of counsel delivered to the appropriate parties.

            (g) The Custodian shall hold the Secured Proceeds in the Custodial
      Account, for the benefit of each Purchaser, and not release such proceeds
      except as provided herein. NOTWITHSTANDING ANYTHING IN THIS AGREEMENT TO
      THE CONTRARY, AS TO ANY PURCHASER, THE CUSTODIAN SHALL ONLY RELEASE FUNDS
      TO THE COMPANY OR A PURCHASER UNDER THIS AGREEMENT TO THE EXTENT ALL SUCH
      RELEASES ON ACCOUNT OF SUCH PURCHASER, IN THE AGGREGATE, DO NOT EXCEED 30%
      OF THE ORIGINAL PRINCIPAL AMOUNT OF DEBENTURES PURCHASED BY SUCH PURCHASER
      PURSUANT TO THE PURCHASE AGREEMENT.

      2. Release of Secured Proceeds.

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            (a) Release Upon CVA Effective Date. Upon (a) the conclusion by TNCI
      UK Ltd. (the "Subsidiary") of a Company Voluntary Arrangement with its
      creditors under Part I of the Insolvency Act 1986, (b) the concurrent
      discharge of the administration order under the Insolvency Act 1986 to
      which Subsidiary is subject, (c) the approval by the boards of directors
      of each of Subsidiary and the Company of resolutions in form and substance
      satisfactory to a majority in interest of the Purchasers authorizing
      Subsidiary to become jointly and severally obligated with the Company for
      the loan of Secured Proceeds and to give security therefor, and (d) the
      creation by Subsidiary in favor and for the benefit of the Purchasers of
      (i) a first legal mortgage of all of Subsidiary's freehold and leasehold
      property and of all of Subsidiary's shares, bonds or other securities and
      investments, (ii) a first fixed charge of all of Subsidiary's plant and
      machinery, accounts, agreements, instruments, insurance, intellectual
      property and other assets, and (iii) a first floating charge of all of
      Subsidiary's assets not at any time otherwise effectively mortgaged,
      charged or assigned by way of fixed mortgage, charge or assignment in
      favor of the Purchasers, such security to be in form and substance
      satisfactory to a majority in interest of the Purchasers (the date on
      which all of the foregoing actions shall have been completed and not
      revoked or rescinded to be referred to as the "CVA Effective Date"), the
      Company shall provide each Purchaser with evidence of the occurrence of
      the CVA Effective Date, which evidence shall be satisfactory in form and
      substance to Purchasers of a majority in interest of the outstanding
      Principal Amount of Debentures ("Purchaser Majority"), wherefrom such
      Purchaser Majority and the Company shall promptly thereafter execute a
      joint certificate to the Custodian certifying that the CVA Effective Date
      has occurred (a "CVA Certificate", such release upon the CVA Effective
      Date shall be a "CVA Release" and such date of a CVA Release shall be the
      "CVA Release Date"). Promptly after its receipt of a CVA Certificate, the
      Custodian shall release all of the Secured Proceeds to the account
      specified in the written instructions of the Company, net of actual legal
      fees and expenses incurred by the Purchasers in connection with the lien
      granted to the Purchasers by the Subsidiary in all of the assets of the
      Subsidiary.

            (b) Release Upon Conversion of Debentures. Upon the conversion by
      any Purchaser of all or part of the principal amount of the Debenture(s)
      held by such Purchaser in excess of such Purchaser's Pro Rata Fraction of
      the sum of $_______________(1) (the "Pro Rata Fraction" is defined as the
      Principal Amount of the Purchaser divided by the aggregate Principal
      Amount that all of the Purchasers paid for in cash at the Closing) (the
      "Converted Principal Amount"), such Purchaser and the Company shall
      promptly thereafter execute a joint certificate to the Custodian
      certifying that such Converted Principal Amount has been converted by the
      Purchaser (a "Conversion Certificate", such release upon Conversion shall
      be a "Conversion Release" and such date of a Conversion Release shall be
      the "Conversion Release Date"). Promptly after its receipt of a Conversion
      Certificate, the Custodian shall release out of the Secured Proceeds,
      subject to the limitation set forth in Section 1(g), to the account
      specified in the written instructions of the Company, an amount equal to
      the Converted Principal Amount.

----------
(1)   75% of the aggregate Subscription Amounts.

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<PAGE>

            (c) Release Upon Consent of Purchasers. Upon receipt by the Company
      of written consent of each Purchaser to release any portion of the Secured
      Proceeds, the Company and each Purchaser shall execute and deliver to the
      Custodian a joint certificate (each, a "Consent Certificate" such release
      upon consent shall be a "Consent Release" and such date of a Consent
      Release shall be the "Consent Release Date") certifying that consent to
      release such Secured Proceeds has been obtained, which Consent Certificate
      shall include the amount of the Secured Proceeds to be released,
      representations from each Purchaser as to the outstanding Principal Amount
      of the Debentures held by it at the time such consent was obtained, and a
      representation by the Company's chief financial officer as to the
      aggregate Principal Amount of the Debentures outstanding at the time
      consent was obtained. Any Purchaser may consent or withhold consent to any
      such release of any of the Secured Proceeds in its sole and absolute
      discretion. Upon receipt of the Consent Certificate, the Custodian shall
      release, to the account of the Company designated in the Consent
      Certificate, subject to Section 1(g), the portion of the Secured Proceeds
      specified in the Consent Certificate. If less than all of the Secured
      Proceeds are released, the remaining amount, for purposes of calculating
      each Purchaser's rights hereunder, shall be re-allocated according to such
      Purchaser's Pro Rata Portion.

            (d) Release Upon an Event of Default. At any time after the
      occurrence of an Event of Default, any Purchaser may, at its option,
      deliver a certificate to the Custodian and the Company specifying the
      nature of the Event of Default. If, within ten days after its receipt of
      such certificate, the Custodian shall not have received written notice
      from the Company that it disputes the occurrence of such Event of Default,
      then the Custodian shall release to such Purchaser's Portion of the
      Secured Proceeds remaining in the Custodial Account, subject to Section
      1(g). In the event that the Company does deliver a timely notice to the
      Custodian and each Purchaser that it disputes such determination, then
      such dispute shall be resolved between the Company and the Purchaser by
      arbitration conducted as follows: the arbitration shall be conducted in
      New York, New York, before an arbitration panel of three arbitrators, one
      of whom shall be selected by the Purchaser, one of whom shall be selected
      by the Company, with the remaining arbitrator to be agreed upon by the
      first two. The arbitration shall be conducted in accordance with the
      commercial arbitration rules of the American Arbitration Association then
      in effect. Any arbitration decision or award shall be final and conclusive
      as to the parties to this Agreement and their successors and assigns;
      judgment upon such decision or award may be entered in any competent
      court. In the event that the arbitration shall be decided in favor of the
      applicable Purchaser, then upon delivery of a written copy of such
      decision by the Purchaser to the Custodian, the Custodian shall promptly
      release the Purchaser's remaining Secured Proceeds to the Purchaser,
      subject to Section 1(g).

            (e) Release Upon Forced Conversion. Upon written notice by the
      Company and any Purchaser to the Custodian that the Company has properly
      forced conversion of the Debentures, pursuant to Section 6 of the
      Debentures, then, such Purchaser and the Company shall promptly thereafter
      execute a joint certificate to the Custodian certifying that such amount
      under the Forced Conversion (as defined in the Debenture) has been
      converted (a "Forced Conversion Certificate", such release upon a Forced
      Conversion shall be a "Forced Conversion Release" and such date of a
      Forced Conversion Release shall be the "Forced Conversion Release Date");

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<PAGE>

      provided, however, if such Purchaser does not execute a Forced Conversion
      Certificate to the Custodian or does not object to the Company and the
      Custodian to the execution of such Forced Conversion Certificate within 5
      Trading Days after written and confirmed notice to such Purchaser from the
      Company of such request for release pursuant to this Section 2(e), then
      such Purchaser shall be deemed to have consented to such release. Promptly
      after its receipt of a Forced Conversion Certificate, the Custodian shall
      release the Secured Proceeds to the account specified in the written
      instructions of the Company, in an amount equal to the ratio that the
      amount of principal amount of Debentures subject to the Forced Conversion
      bears to the outstanding principal amount of the Debentures.

            (f) Procedure for Release. In the event that any CVA Release Date,
      Conversion Release Date, Consent Release, release upon an Event of Default
      or Forced Conversion Release (collectively, the "Release" and, the date of
      such Release, the "Release Date") is not a Business Day (as defined
      herein), then such Release shall be deemed to be the next Business Day.
      "Business Day" shall mean any day that is not a Saturday, a Sunday or a
      day on which banks are required or permitted to be closed in the State of
      New York. In the event that any of the Secured Proceeds shall have been
      paid in whole or in part on or prior to the applicable Release Date, the
      Company shall provide immediate telephonic notice thereof to the
      Purchasers and to the Custodian, promptly followed by written confirmation
      to such parties, and the amount requested pursuant to such Release shall
      be reduced by the aggregate amount of payments received by the Company in
      satisfaction of such Release.

      3. Security Agreement.

            (a) The Company hereby unconditionally and irrevocably grants to the
      Purchasers, to secure the payment and performance in full when due of all
      of the Obligations (as defined in the Security Agreement), a continuing
      first priority security interest in, and so pledges and assigns to the
      Purchasers all of, the Secured Proceeds and any interest that accrues
      thereon ("Collateral"). Such security interest is set forth in the
      Security Agreement. The security interest in the Secured Proceeds shall
      terminate upon the release of all of the Secured Proceeds from the
      Custodial Account, it being understood however that the Company's
      obligations under the Debentures shall remain in full force and effect.

            (b) Further Assurances. The Company agrees that at any time and from
      time to time, at the expense of the Company, the Company shall promptly
      execute and deliver all further instruments, documents and/or control
      agreements and take all further action, that may be necessary or
      desirable, or that the Purchasers may reasonably request, in order to
      perfect and protect any security interest granted or purported to be
      granted hereby or to enable any Purchaser to exercise and enforce its
      rights and remedies hereunder with respect to any of the Collateral.

            (c) Rights and Remedies. At any time after the occurrence of an
      Event of Default, and without any other notice to or demand upon the
      Company, the Purchasers shall have, in any jurisdiction in which
      enforcement hereof is sought, in addition to all other rights and
      remedies, the rights and remedies of a secured party under the Uniform
      Commercial Code in effect from time to time in the State of New York (the
      "UCC") and any additional rights and remedies which may be provided to a
      secured party in any applicable jurisdiction.

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            (d) Power of Attorney. The Company hereby irrevocably constitutes
      and appoints the Purchasers, and each of them, and any officer, partner,
      member or agent thereof, with full power of substitution, as its true and
      lawful attorneys-in-fact with full irrevocable power and authority in the
      name, place and stead of the Company or in their own names, for the
      purpose of carrying out the terms of this Agreement, to take any and all
      appropriate action and to execute any and all documents and instruments
      that may be necessary or useful to accomplish the purposes of this
      Agreement and, without limiting the generality of the foregoing, hereby
      gives said attorneys the power and right, on behalf of the Company,
      without notice to or assent by the Company, at any time after the
      occurrence of an Event of Default, to sell, transfer, pledge, make any
      agreement with respect to or otherwise dispose of or deal with any of the
      Collateral in such manner as is consistent with the UCC and as fully and
      completely as though the Purchasers were the absolute owners thereof for
      all purposes, and to do, at the Company's expense, at any time or from
      time to time, all acts and things which the Purchasers deem necessary or
      useful to protect, preserve or realize upon the Collateral and the
      security interest of the Purchasers therein, in order to effect the intent
      of this Agreement, all at least as fully and effectively as the Company
      might do.

            (e) Marshalling. All rights and remedies of the Purchasers hereunder
      and in respect of the Collateral and other assurances of payment shall be
      cumulative and in addition to all other rights and remedies, however
      existing or arising. To the extent that it lawfully may, the Company
      hereby agrees that it will not invoke any law relating to the marshalling
      of assets which might cause a delay in or impede the enforcement of the
      rights and remedies of the Purchasers under this Agreement, the
      Debentures, the other Transaction Documents or under any other instrument
      creating or evidencing any of the Obligations or under which any of the
      Obligations is outstanding or by which any of the Obligations is secured
      or payment thereof is otherwise assured, and to the extent that it
      lawfully may, the Company hereby irrevocably waives the benefits of all
      such law.

            (f) No Waiver, etc. The Purchasers shall not be deemed to have
      waived any of their rights or remedies in respect of the Obligations or
      the Collateral unless such waiver shall be in writing and signed by the
      Purchasers. No delay or omission on the part of the Purchasers in
      exercising any right or remedy shall operate as a waiver of such right or
      remedy or any other right or remedy. A waiver on any one occasion shall
      not be construed as a bar to or waiver of any right or remedy on any
      future occasion. All rights and remedies of the Purchasers with respect to
      the Obligations or the Collateral, whether evidenced hereby or by any
      other document or instrument, shall be cumulative and may be exercised
      singularly, alternatively, successively or concurrently at such time or at
      such times as the Purchasers deem expedient.

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            (g) Certain Defined Terms. Terms used in this Section 3 but not
      otherwise defined in this Agreement that are defined in the UCC (as such
      term is hereinafter defined) shall have the respective meanings given such
      terms therein; provided, however, that if a term is defined in Article 9
      of the UCC differently than in another Article of the UCC, then such term
      shall have the meaning specified in Article 9. "UCC" means the Uniform
      Commercial Code in effect from time to time in the State of New York.

      4. Conditions to Custodian's Duties. The acceptance by the Custodian of
its duties as such under this Agreement is subject to the following terms and
conditions, which all of the parties to this Agreement hereby agree shall govern
and control with respect to the rights, duties, liabilities and immunities of
the Custodian:

            (a) The Custodian is not a party to, nor is it bound by, any other
      agreement by which the other parties hereto may be bound (whether or not
      it has knowledge of such), other than as expressly herein set forth.

            (b) The Custodian shall be protected in acting upon any written
      notice, request, waiver, consent, receipt or other document which the
      Custodian, in good faith, believes to be genuine and what it purports to
      be. No waiver or any breach of any covenant or provision herein contained
      shall be deemed a waiver of any preceding or succeeding breach thereof, or
      of any other covenant or provision herein contained. No extension of time
      for performance of any obligation or act shall be deemed an extension of
      the time for performance of any other obligation or act. If the Custodian
      reasonably requires other or further instruments in connection with this
      Agreement or obligations in respect hereto, the necessary parties hereto
      shall join in furnishing such instruments.

            (c) The Custodian shall be indemnified and held harmless by the
      Company and the Purchasers, jointly and severally, from and against any
      and all loss, expense, fees (including attorneys' fees) and damages that
      may be incurred by the Custodian as a result of its agreeing to act in
      such capacity and its performance of this Agreement. The Custodian shall
      not be obligated to any party for any error in judgment or for any act
      done or steps taken or omitted by it in good faith, or for any mistake of
      fact or law, or for anything which it may do or refrain from doing in
      connection therewith, except as a result of its own gross negligence or
      willful misconduct. This indemnity includes the costs of enforcing the
      indemnification (including attorneys' fees).

            (d) The Custodian may consult with or retain legal counsel in
      connection with any dispute or question as to the construction of any of
      the provisions hereof or with regard to its duties and shall be held
      harmless and protected by the Company and the Purchasers in acting in good
      faith in accordance with the instructions of such counsel. Such counsel's
      fees and expenses shall be paid as set forth in Section 4(f) hereof. The
      Custodian may represent itself at its usual rates.

            (e) The Custodian shall not be responsible or liable for the default
      or misconduct of its agents, attorneys or employees, if they are selected
      with reasonable care.

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            (f) The Company will pay the Custodian's fees (at the Custodian's
      customary hourly rate for legal services) and out-of-pocket disbursements
      for time spent in performing its duties under this Agreement, and if any
      of Custodian's invoices are not paid in full within 30 days, the Custodian
      is directed to pay itself directly from the Custodial Account; provided
      that if fees are taken directly from the Custodial Account by the
      Custodian, the Purchasers shall have no claim against the Custodian for
      such funds but shall have a claim against the Company for reimbursement.
      The Company shall promptly replenish any funds that are disbursed to the
      Custodian from the Custodial Account.

            (g) The Custodian shall have no obligation to seek to maximize the
      rate of interest on the Secured Proceeds, and shall be without liability
      to any person in respect thereof.

            (h) No modification of this Agreement shall, without the consent of
      the Custodian and all other parties hereto, modify the provisions of this
      Agreement relating to the duties, obligations or rights of the Custodian.
      This Agreement is the final expression of, and contains the entire
      agreement between, the parties with respect to the subject matter hereof
      and supersedes all prior understandings with respect thereto.

      5. Conflict with Respect to Collateral.

                  (a) In the event that the Custodian at any time receives or
            becomes aware of conflicting demands or claims with respect to the
            Collateral, this Agreement or its duties hereunder, the Custodian
            shall have the right to discontinue and refrain from any and all
            activities on its part under this Agreement or in connection
            herewith until such conflict is resolved to its satisfaction.

                  (b) The Custodian shall have the further right to commence or
            defend any action or proceedings for the determination of such
            conflict. The Company and the Purchasers jointly and severally agree
            to pay all costs, damages, judgments and expenses, including
            reasonable attorneys' fees, suffered or incurred by the Custodian in
            connection with or arising out of this Agreement and the
            transactions described herein in the event of bona fide conflicting
            claims or demands, including, but without limiting the generality of
            the foregoing, a suit in interpleader brought by the Custodian. In
            the event that the Custodian files a suit in interpleader, it shall
            thereupon be fully released and discharged from all further
            obligations to perform any and all duties or obligations imposed
            upon it by this Agreement (except it may not release the Collateral
            except as designated by the court).

      6. Acknowledgement. All parties hereto agree that the Custodian is counsel
for Bristol Investment Fund, Ltd. ("Bristol") and shall be entitled to represent
Bristol with respect to the Purchase Agreement and the transactions contemplated
thereunder; and the Company and each other Purchaser hereby waives any right or
claim to object to such legal representation by Custodian of Bristol in
connection with this transaction.

      7. Resignation of Custodian. The Custodian may at any time resign
hereunder by giving written notice of its resignation to the Company and the
Purchasers, at least ten (10) days prior to the date specified for such
resignation to take effect, and upon the effective date of such resignation, all
property then held by the Custodian hereunder shall be delivered by it to such

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Person as may be designated by the Company and the Purchasers, in writing,
whereupon all the Custodian's obligations hereunder shall cease and terminate.
If no such Person shall have been designated by such date, all obligations of
the Custodian hereunder shall, nevertheless, cease and terminate. The
Custodian's sole responsibility thereafter shall be to keep safely all property
then held by it and to deliver the same to a Person designated by the parties
hereto or in accordance with the directions of a final order or judgment of a
court of competent jurisdiction, or to file a suit in interpleader as provided
in Section 5 above.

      8. Interest on Secured Proceeds. The Custodian shall owe no duty and have
no obligation whatsoever to the Company or the Purchasers to obtain or maintain
any level of interest on the Secured Proceeds.

      9. Successors and Assigns. The Purchasers may assign their rights
hereunder in connection with the transfer of Debentures. The Company may not
assign its rights under this Agreement. This Agreement shall be binding upon and
inure to the benefit of the parties hereto and their respective heirs,
administrators, successors and permitted assigns.

      10. Governing Law; Jurisdiction. THIS AGREEMENT SHALL BE GOVERNED BY AND
CONSTRUED IN ACCORDANCE WITH THE INTERNAL LAWS OF THE STATE OF NEW YORK, AND THE
PARTIES AGREE AND CONSENT TO THE EXCLUSIVE JURISDICTION OF THE FEDERAL AND STATE
COURTS LOCATED IN NEW YORK COUNTY, NEW YORK IN ANY ACTION OR PROCEEDING
HEREUNDER, AND TO SERVICE OF PROCESS BY CERTIFIED MAIL, RETURN RECEIPT REQUESTED
(WHICH SHALL CONSTITUTE "PERSONAL SERVICE"). THE PARTIES HERETO HEREBY
IRREVOCABLY WAIVE, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY AND
ALL RIGHT TO TRIAL BY JURY IN ANY LEGAL PROCEEDING ARISING OUT OF OR RELATING TO
THIS AGREEMENT.

      11. Amendment. No provision of this Agreement may be amended or waived
without the prior written consent of the Company and all the Purchasers;
provided, however, that any provision relating to the duties, obligations and
rights of the Custodian shall in addition require the approval of the Custodian,
as provided in Section 4 above.

      12. Notices. All notices or other communications between the parties
contemplated under, or relating to, this Agreement shall be in writing, shall be
signed by each person giving such notice or communication, and shall be
delivered by hand, reputable overnight courier or by certified mail, return
receipt requested, to the parties at their respective addresses set forth above
or to such other address as to which the sending party has received written
notice in accordance with this Section 12.

                                       10
<PAGE>

      IN WITNESS WHEREOF, the parties hereto have duly executed this Custodial
Agreement as of the day and year first above written.

TNX TELEVISION HOLDINGS, INC.

By:__________________________________________
     Name:
     Title:

CUSTODIAN:

FELDMAN WEINSTEIN LLP

By:__________________________________________
     Name:
     Title:

                   [PURCHASERS' SIGNATURE PAGES TO FOLLOW]

                                       11
<PAGE>

           [PURCHASER'S SIGNATURE PAGE TO TNXT CUSTODIAL AGREEMENT]

Name of Investing Entity:__________________________

Signature of Authorized Signatory of Investing Entity:__________________________

Name of Authorized Signatory:_________________________

Title of Authorized Signatory:__________________________

              [ADDITIONAL PURCHASERS' SIGNATURE PAGES TO FOLLOW]

                                       12NATURAL GAS SYSTEMS, INC.

                              EMPLOYMENT AGREEMENT

                                ROBERT S. HERLIN

         THIS AGREEMENT ("AGREEMENT") is entered into as of April 4, 2005 (the
"EFFECTIVE DATE"), by and between ROBERT S. HERLIN (the "EXECUTIVE") and NATURAL
GAS SYSTEMS, INC., a Nevada corporation (the "COMPANY"). The Agreement
supercedes any and all prior agreements, written or oral, including but not
limited to the Executive's prior employment agreement with the Company and its
predecessor in interest, Natural Gas Systems, a Delaware corporation, other than
stock options granted under the Company's 2003 Stock Option Plan of Natural Gas
Systems, Delaware, which was assumed by the Company, as referenced herein.

                  1. DUTIES AND SCOPE OF EMPLOYMENT.

                           (a) POSITION. For the term of his employment under
         this Agreement (the "Employment"), the Company agrees to employ the
         Executive in the position of President and Chief Executive Officer. The
         Executive shall report to the Company's Board of Directors. Executive
         shall not be obligated to relocate away from Houston, Texas.

                           (b) OBLIGATIONS TO THE COMPANY. During the term of
         Employment under this Agreement, Executive shall devote his/her full
         business efforts and time to the Company. The foregoing shall not
         preclude the Executive from engaging in appropriate civic, charitable
         or religious activities or from devoting a reasonable amount of time to
         private investments or from serving on the boards of directors of other
         entities, as long as such activities and/or services do not interfere
         or conflict with his/her responsibilities to the Company. The Executive
         shall comply with the Company's policies and rules, as they may be in
         effect from time to time during his Employment.

                           For purposes of this paragraph 1(b), the Company
         hereby consents and approves of the activities described in EXHIBIT A
         hereto.

                           (c) NO CONFLICTING OBLIGATIONS. The Executive
         represents and warrants to the Company that he is under no obligations
         or commitments, whether contractual or otherwise, that are inconsistent
         with his obligations under this Agreement.

                           (d) COMMENCEMENT DATE. This Agreement shall take
         effect upon the Effective date.

                  2.       CASH AND INCENTIVE COMPENSATION.

                  For clarification, it is understood by all parties that other
than as specified herein, the Company is not obligated to award any future
grants of stock options or other form of equity compensation to Executive during
Executive's Employment with the Company.

                                    1 of 11
<PAGE>

                           (a) SALARY. The Company shall pay the Executive as
         compensation for his services an initial base salary at a gross annual
         rate of $180,000.00, increasing to a $210,000.00 after one year from
         the Effective Date, with possible additional increases on an annual
         basis as determined by the Board of directors in their sole discretion.
         Such salary shall be payable in accordance with the Company's standard
         payroll procedures. The annual compensation specified in this
         Subsection (a), together with any increases in such compensation that
         the Company may grant from time to time, is referred to in this
         Agreement as "BASE SALARY."

                           (b) INCENTIVE BONUSES. The Executive shall be
         eligible to receive an annual incentive bonus of up to 100% of Base
         Salary based on reasonable criteria (with input from Executive)
         established by the Company's Board of Directors (the "BOARD") or the
         Compensation Committee of the Board, payable in cash or the fair value
         of securities equivalent to such cash amount. The determinations of the
         Board or its Compensation Committee with respect to the award of such
         bonus shall be final and binding. The Executive shall not be entitled
         to an incentive bonus if he has resigned or been terminated for Cause
         (as defined below) by the Company before the date when such bonus is
         payable.

                           (c) STOCK OPTIONS. Subject to the approval of the
         Board or the Compensation Committee of the Board, the Company shall
         grant the Executive stock options aggregating Five Hundred Thousand
         (500,000) shares of the Company's Common Stock. Such options shall be
         granted as soon as reasonably practicable after the date of this
         Agreement. The term of such option shall be 10 years, subject to
         earlier expiration in the event of the termination of the Executive's
         Employment. The Executive shall vest over a four year period, on an
         installment basis determined by the Board or the Compensation
         Committee. The grant(s) of such options shall be subject to the other
         terms and conditions set forth in the Company's 2004 Stock Plan and
         Stock Option Agreement, attached hereto as EXHIBITS B AND C,
         respectively.

                           (d) WARRANTS. Subject to the approval of the Board of
         the Compensation Committee of the Board, the Company shall grant the
         Executive warrants aggregating Two Hundred Eighty Seven Thousand Five
         Hundred (287,500) shares of the Company's Common Stock. The grant of
         such warrants shall be subject to the terms and conditions set forth in
         the Warrant Agreement, attached hereto as EXHIBIT D.

                                    2 of 11
<PAGE>

                           (d) BONUS FOR PRIOR YEAR. In lieu of the cash bonus
         provided for in the prior employment contract between the Company and
         Executive, and subject to applicable security laws and approval of the
         Board or the Compensation Committee, the Company agrees to issue
         250,000 warrants to Tatum Partners to satisfy Executive's and Company's
         obligation to Tatum Partners under the Resource Agreement, dated on or
         about September 2003, without reducing any amount of the 250,000 stock
         options previously granted to Executive under the 2003 Stock Option
         Plan.

                  3.       VACATION AND EMPLOYEE BENEFITS.

                           Executive shall be entitled to fifteen (15) days of
         vacation and five (5) personal days per year, to be taken in such
         amounts and at such times as shall be mutually convenient for Executive
         and the Company. Any vacation days exceeding five (5) days not taken by
         Executive in one year shall be forfeited and not carried forward to
         subsequent years. During his Employment, the Executive shall be
         eligible to participate in the employee benefit plans maintained by the
         Company, subject in each case to the generally applicable terms and
         conditions of the plan in question and to the determinations of any
         person or committee administering such plan.

4.       BUSINESS EXPENSES.

                           During his Employment, the Executive shall be
         authorized to incur necessary and reasonable travel, entertainment and
         other business expenses in connection with his duties hereunder. The
         Company shall reimburse the Executive for such expenses upon
         presentation of an itemized account and appropriate supporting
         documentation, all in accordance with the Company's generally
         applicable policies.

                  5.       TERMINATION OF EMPLOYMENT.

                           (a) TERMINATION OF EMPLOYMENT. The Company may
         terminate the Executive's Employment at any time and for any reason (or
         no reason), and with or without Cause, by giving the Executive ten
         day's notice in writing. The Executive may terminate his Employment by
         giving the Company ten days' advance notice in writing. The Executive's
         Employment shall terminate automatically in the event of his death. The
         termination of the Executive's Employment shall not limit or otherwise
         affect his obligations under Section 7.

                           (b) EMPLOYMENT AT WILL. The Executive's Employment
         with the Company shall be "at will," meaning that either the Executive
         or the Company shall be entitled to terminate the Executive's
         Employment at any time and for any reason, with or without Cause. Any
         contrary representations that may have been made to the Executive shall
         be superseded by this Agreement. This Agreement shall constitute the
         full and complete agreement between the Executive and the Company on
         the "at will" nature of the Executive's Employment, which may only be
         changed in an express written agreement signed by the Executive and a
         duly authorized officer of the Company.

                           (c) RIGHTS UPON TERMINATION. Except as expressly
         provided in Section 6, upon the termination of the Executive's
         Employment, the Executive shall only be entitled to the compensation,
         benefits and expense reimbursements that the Executive has earned or
         accrued under this Agreement before the effective date of the
         termination. Termination payments pursuant to Section 6 shall fully
         discharge all responsibilities of Company to Executive except for the
         Company's responsibilities listed in Sections 2, 3, 4, 5, 8, 9, 10 and
         Exhibits B, C and D herein.

                                    3 of 11
<PAGE>

                           (d) CONSTRUCTIVE TERMINATION. The term "CONSTRUCTIVE
         TERMINATION" shall mean any of the following: (i) any breach by the
         Company of any material provision of this Agreement, including, without
         limitation, the assignment to the Executive of duties inconsistent with
         his position specified in Section 1(a) hereof or any breach by the
         Company of such Section, which is not cured within 60 days after
         written notice of same by Executive (except that such cure period shall
         be fifteen days with respect to D&O Insurance described in Section
         10(h) hereof, unless such breach is due to the actions or inactions of
         the Executive), describing in detail the breach asserted and stating
         that it constitutes notice pursuant to this Section 5(d); or (ii)
         relocation of Executive's offices in excess of 20 miles from its
         current location; or (iii) a substantial reduction of the
         responsibilities, authority or scope of work of Executive.

                  6.       TERMINATION BENEFITS.

                           (a) GENERAL RELEASE. Any other provision of this
         Agreement notwithstanding, Subsection (b) below shall not apply unless
         the Executive: (i) has executed a general release fully discharging all
         responsibilities of the Company to the Executive for all claims except
         for those noted in 5 (c) above (in a form prescribed by the Company),
         and (ii) has returned all property of the Company in the Executive's
         possession, and (iii) is in material compliance with the restrictive
         covenants in Section 7 hereof .

                           (b) SEVERANCE PAY. If the Company terminates the
         Executive's Employment other than for Cause or Permanent Disability, or
         if the Executive is subject to a Constructive Termination, then the
         Company shall pay the Executive his Base Salary ("SEVERANCE PAY") for a
         period of one year following the termination of his Employment (the
         "CONTINUATION PERIOD"). Such Severance Pay shall be paid at the rate in
         effect at the time of the termination of Employment and in accordance
         with the Company's standard payroll procedures. In the event that (i)
         Executive is paid Severance Pay and Executive, AND (ii) Executive
         enters into similar employment prior to the end of the Continuation
         Period, then the Company may elect, at the Company's sole option and
         discretion, to terminate all Restrictive Covenant obligations of
         Executive under subsections 7(b) and 7(c) below in return for a
         reduction of fifty percent (50%) of the remaining Severance Pay
         obligations to Executive.

                           (c) DEFINITION  OF "CAUSE." For all purposes  under
         this Agreement, "CAUSE" shall mean:

                           (i) A material breach by the Executive of any written
         agreement between the Executive and the Company, provided that the
         Company has given written notice of such breach which notice describes
         in detail the breach asserted and stating that it constitutes notice
         pursuant to this Section 6(c) and which breach, if capable of being
         cured, has not been cured within thirty (30) days after such notice;

                            (ii) The Executive's conviction of, or plea of
         "guilty" or "no contest" to, a felony under the laws of the United
         States or any state thereof;

                                    4 of 11
<PAGE>

                           (iii) A material failure by the Executive to comply
         with the Company's lawful written policies or rules which causes
         material harm to the Company, provided that the Company has given
         written notice of such breach which notice describes in detail the
         breach asserted and stating that it constitutes notice pursuant to this
         Section 6(c) and which breach, if capable of being cured, has not been
         cured within thirty (30) days after such notice;

                           (iii) The Executive's fraud, gross negligence or
         willful misconduct; or

                           (iv) A continued failure by the Executive to perform
         his lawful and reasonable assigned duties, provided that the Company
         has given written notice of such breach which notice describes in
         detail the breach asserted and stating that it constitutes notice
         pursuant to this Section 6(c) and which breach, if capable of being
         cured, has not been cured within thirty (30) days after such notice.

                           (d) DEFINITION OF "PERMANENT DISABILITY." For all
         purposes under this Agreement, "PERMANENT DISABILITY" shall mean the
         Executive's inability to perform the essential functions of the
         Executive's position, with or without reasonable accommodation, for a
         period of at least 90 consecutive days because of a physical or mental
         impairment.

7.       RESTRICTIVE COVENANTS.

                           (A) CONFIDENTIAL INFORMATION

                           (i) During Executive's Employment and at all times
         thereafter, Executive shall not, without the prior express written
         consent of the Board (except as may be required in connection with any
         judicial or administrative proceeding or inquiry or by law ) disclose
         to any person, other than an officer or director of the Company or a
         person to whom disclosure is reasonably necessary or appropriate in
         connection with the performance by Executive of his duties as CEO and
         President, any Confidential Information (defined below) with respect to
         the business and affairs of the Company or any of its subsidiaries,
         unless such disclosure is subject to a confidentiality agreement or the
         confidential information has been previously disclosed through no fault
         of Executive.

                           (ii) Executive acknowledges that he has and will have
         access to proprietary information, trade secrets, and confidential
         material (including lists of key personnel, customers, clients,
         vendors, suppliers, distributors or consultants) of the Company (the
         "CONFIDENTIAL Information"). Executive agrees, without limitation in
         time or until such information shall become public other than by the
         Executive's unauthorized disclosure, to maintain the confidentiality of
         the Confidential Information and refrain from divulging, disclosing, or
         otherwise using in any respect the Confidential Information to the
         detriment of the Company and any of its subsidiaries, affiliates,
         successors or assigns, or for any other purpose or no purpose, unless
         such disclosure is subject to a confidentiality agreement or such
         Confidential Information is previously disclosed through no fault of
         Executive.

                           (B) NO SOLICITATION. For a period of one (1) year
         after he ceases to be employed by the Company, Executive agrees that he

                                    5 of 11
<PAGE>

         will not, directly or indirectly, for his benefit or for the benefit of
         any other person, firm or entity, do any of the following:

                           (i) solicit from any client doing business with the
         Company as of Executive's termination, business of the same or of a
         similar nature to the business of the Company with such client, if such
         business is expected to directly compete with the Company;

                           (ii) solicit from any known potential client of the
         Company business of the same or of a similar nature to that which has
         been the subject of a known written or oral bid, offer or proposal by
         the Company, or of substantial preparation with a view to making such a
         bid, proposal or offer, within six (6) months prior to Executive's
         termination, if such business is expected to directly compete with the
         Company;

                           (iii) solicit the employment or services of, or hire,
         any person who was known to be employed by the Company upon termination
         of Executive's Employment, or within six (6) months prior thereto,
         other than Executive's personal secretary; or

                           (iv) otherwise knowingly interfere with the business
         or accounts of the Company.

                           For the purposes of (b)(i) through (iv) above and (c)
         below, "compete" is defined to mean engagement in the same or
         essentially similar activities as the Company within the same field,
         parish or county as the Company.

                           (C) COVENANT NOT TO COMPETE. During the term hereof
         and for a period of one (1) year following the termination of this
         Agreement, Executive shall not directly or indirectly engage in, or own
         any interest in any business which engages in, (i) the business of the
         Company or any of its subsidiaries as of the date of this Agreement
         that is expected to directly compete with the Company or (ii) any other
         business which the Company or any of its subsidiaries shall have
         acquired by purchase, merger or otherwise prior to the date of
         termination in which the Company or any of its subsidiaries does
         business that is expected to compete to with the Company provided,
         however, that this sentence shall not prohibit Executive's ownership of
         not more than five (5) percent of the voting stock of any publicly held
         corporation. For clarification, Executive can work in the same line of
         business as the Company and its subsidiaries, including working in the
         same state, provided that Executive does not directly complete with the
         Company.

                           (D) SURVIVAL. The covenants contained in this Section
         7 shall survive any termination of Executive's Employment.

                  8.       SUCCESSORS.

                           (a) COMPANY'S SUCCESSORS. This Agreement shall be
         binding upon any successor (whether direct or indirect and whether by
         purchase, lease, merger, consolidation, liquidation or otherwise) to
         all or substantially all of the Company's business and/or assets. For
         all purposes under this Agreement, the term "Company" shall include any
         successor to the Company's business and/or assets that becomes bound by
         this Agreement.

                                    6 of 11
<PAGE>

                           (e) EXECUTIVE'S SUCCESSORS. This Agreement and all
         rights of the Executive hereunder shall inure to the benefit of, and be
         enforceable by, the Executive's personal or legal representatives,
         executors, administrators, successors, heirs, distributees, devisees
         and legatees.

                  9. ARBITRATION.

                           (a) SCOPE OF ARBITRATION REQUIREMENT. The parties
         hereby waive their rights to a trial before a judge or jury and agree
         to arbitrate before a neutral arbitrator any and all claims or disputes
         arising out of this Agreement and any and all claims arising from or
         relating to the Executive's Employment, including (but not limited to)
         claims against any current or former employee, director or agent of the
         Company, claims of wrongful termination, retaliation, discrimination,
         harassment, breach of contract, breach of the covenant of good faith
         and fair dealing, defamation, invasion of privacy, fraud,
         misrepresentation, constructive discharge or failure to provide a leave
         of absence, or claims regarding commissions, stock options or bonuses,
         infliction of emotional distress or unfair business practices.

                           (b) PROCEDURE. The arbitrator's decision shall be
         written and shall include the findings of fact and law that support the
         decision. The arbitrator's decision shall be final and binding on both
         parties, except to the extent applicable law allows for judicial review
         of arbitration awards. The arbitrator may award any remedies that would
         otherwise be available to the parties if they were to bring the dispute
         in court. The arbitration shall be conducted in accordance with the
         National Rules for the Resolution of Employment Disputes of the
         American Arbitration Association. The arbitration shall take place in
         Houston, Texas.

                           (c) COSTS. The parties shall share the costs of
         arbitration equally. Both the Company and the Executive shall be
         responsible for their own attorneys' fees. Notwithstanding the
         forgoing, the non-prevailing party shall reimburse the prevailing party
         for arbitration costs and reasonable attorney's fees, to the extent
         allowable under applicable law.

                           (d) APPLICABILITY. This Section 9 shall not apply to
         (i) workers' compensation or unemployment insurance claims or (ii)
         claims concerning the validity, infringement or enforceability of any
         trade secret, patent right, copyright or any other trade secret or
         intellectual property held or sought by either the Executive or the
         Company (whether or not arising under the restrictive covenants of
         Section 7 hereof).

                                    7 of 11
<PAGE>

                  10.      MISCELLANEOUS PROVISIONS

                            (a) NOTICE. Notices and all other communications
         contemplated by this Agreement shall be in writing and shall be deemed
         to have been duly given when personally delivered or when mailed by
         U.S. registered or certified mail, return receipt requested and postage
         prepaid. In the case of the Executive, mailed notices shall be
         addressed to him at the home address that he most recently communicated
         to the Company in writing. In the case of the Company, mailed notices
         shall be addressed to its corporate headquarters, and all notices shall
         be directed to the attention of its Secretary.

                           (b) MODIFICATIONS AND WAIVERS. No provision of this
         Agreement shall be modified, waived or discharged unless the
         modification, waiver or discharge is agreed to in writing and signed by
         the Executive and by an authorized officer of the Company (other than
         the Executive). No waiver by either party of any breach of, or of
         compliance with, any condition or provision of this Agreement by the
         other party shall be considered a waiver of any other condition or
         provision or of the same condition or provision at another time.

                           (c) WHOLE AGREEMENT. This Agreement supersedes any
         previous offer letter or employment agreement. No other agreements,
         representations or understandings (whether oral or written and whether
         express or implied) which are not expressly set forth in this Agreement
         have been made or entered into by either party with respect to the
         subject matter hereof. This Agreement and the Exhibits and agreements
         referenced herein contain the entire understanding of the parties with
         respect to the subject matter hereof.

                           (d) WITHHOLDING TAXES. All payments made under this
         Agreement shall be subject to reduction to reflect taxes or other
         charges required to be withheld by law.

                           (e) CHOICE OF LAW AND SEVERABILITY. This Agreement
         shall be interpreted in accordance with the laws of the State of Texas
         (except their provisions governing the choice of law). If any provision
         of this Agreement becomes or is deemed invalid, illegal or
         unenforceable in any applicable jurisdiction by reason of the scope,
         extent or duration of its coverage, then such provision shall be deemed
         amended to the minimum extent necessary to conform to applicable law so
         as to be valid and enforceable or, if such provision cannot be so
         amended without materially altering the intention of the parties, then
         such provision shall be stricken and the remainder of this Agreement
         shall continue in full force and effect. If any provision of this
         Agreement is rendered illegal by any present or future statute, law,
         ordinance or regulation (collectively the "LAW"), then such provision
         shall be curtailed or limited only to the minimum extent necessary to
         bring such provision into compliance with the Law. All the other terms
         and provisions of this Agreement shall continue in full force and
         effect without impairment or limitation.

                           (f) NO ASSIGNMENT. This Agreement and all rights and
         obligations of the Executive hereunder are personal to the Executive
         and may not be transferred or assigned by the Executive at any time.
         The Company may assign its rights under this Agreement to any entity

                                    8 of 11
<PAGE>

         that assumes the Company's obligations hereunder in connection with any
         sale or transfer of all or a substantial portion of the Company's
         assets to such entity.

                           (g) COUNTERPARTS. This Agreement may be executed in
         two or more counterparts, each of which shall be deemed an original,
         but all of which together shall constitute one and the same instrument.

                           (h) INDEMNIFICATION. As an officer of the Company,
         Executive will be protected by the indemnification provisions of
         Article VIII of the Company's Certificate of Incorporation. In
         addition, the Company has purchased and currently maintains insurance
         protecting its officers and directors against certain losses arising
         out of actual or threatened actions, suits or proceedings to which such
         persons may be made or threatened or be made parties ("D&O INSURANCE").
         The Company covenants to continue D&O Insurance coverage at current
         levels for the duration of Executive's service and for two (2) years
         thereafter. .

         IN WITNESS WHEREOF, each of the parties has executed this employment
Agreement, in the case of the Company by its duly authorized officer, as of the
day and year first above written.

                                    ----------------------------
                                    Robert S. Herlin, Executive

                                    NATURAL GAS SYSTEMS, INC.

                                    ------------------------------
                                    By: Laird Cagan
                                    Title: Chairman

                                    9 of 11

<PAGE>

                                    EXHIBIT A
                                 OTHER INTERESTS

         In accordance with Section 1 (b) of the Employment Agreement dated as
of March __, 2005, (the "Agreement"), the Company hereby consents and approves
of the following business interests conducted by Executive that are not directly
related to Company matters:

Executive serves the board of directors of Boots and Coots Group, Inc., a
publicly owned well service company that is not in direct or indirect
competition with the Company. The Company recognizes that it may benefit from
such activities, in that they broaden Executive's corporate governance
experience and extends Executive's exposure to industry. Executive currently
devotes a minimal amount of time per month on such activities and does not
believe that such service materially and adversely impacts his ability to
perform under the Agreement.

Executive is a partner with Tatum CFO Partners, a provider of contract CFO's and
other C level executives to industry and Tatum provides ongoing services to the
Company pursuant to a Services Agreement. Executive was introduced to the
Company through Tatum CFO Partners and intends to maintain that relationship,
however, Executive has not in the past, during his Employment with the Company,
and does not intend during the term of the Agreement to expend any material
business time or effort to such relationship, including the provision of
services to other companies. The Tatum CFO Partner services are valuable to the
Company by providing immediate resources in the areas of finance, accounting,
information services, management issues, human resources and other issues.

Executive currently owns direct minor oil and gas interests through a family
entity, none of which are directly or indirectly competitive with the Company's
interests. Executive agrees to advise the Company of any contemplated
investments that might be construed to be competitive with Company's interests,
prior to making such additional investments. Such ownership does not utilize a
material amount of Executive's time and none of Executive's business time or
efforts.

                                    10 of 11

<PAGE>

                                    EXHIBIT B
                             2004 STOCK OPTION PLAN

                                    EXHIBIT C
                           2004 STOCK OPTION AGREEMENT

                                    EXHIBIT D

                             STOCK OPTION AGREEMENT

                                    11 of 11

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