Document:

Exhibit
      10.77

    March
      31,
      2008

     

    Via
      CERTIFIED MAIL

     

    Tekoil
      and Gas Gulf Coast, LLC 

    25050
      1-45 North, Suite 525 

    The
      Woodlands, Texas 77380 

    Attention:
      Mr. Mark Western 

    Facsimile:
      (281) 364-8007

    

    
      	
              Re:

            	
              Credit
                and Guaranty Agreement dated as of May 11, 2007 (as amended, supplemented,
                or restated to the date hereof, the "Credit Agreement") among Tekoil
                and
                Gas Gulf Coast, LLC, a Delaware limited liability company ("Borrower"),
                Tekoil & Gas Corporation, a Delaware corporation ("Parent") and the
                other guarantors parties thereto from time to time ("Guarantors"),
                the
                lenders party thereto ("Lenders"), J. Aron & Company, as lead arranger
                and as syndication agent, and J. Aron & Company, as administrative
                agent for the Lenders (in such capacity, the "Administrative
                Agent").

            

    

     

    Dear
      Mark:

     

    We
      refer
      to the Credit Agreement referenced above and note that all defined terms used
      in
      the Credit Agreement are used in this letter unless expressly provided for
      otherwise. 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")
      between J. Aron & Company (in such capacity, "Lender Counterparty") and
      the Borrower.

     

    As
      of the
      date of this letter, certain Events of Default ("Existing Defaults") have
      occurred and are continuing under the Credit Agreement as a result of (a) the
      Borrower's failure to make the principal payment due on March 26, 2008, in
      the
      amount of $1,000,000, (b) the Borrower's failure to deliver the title opinions
      required by Section 8.1(s) of the Credit Agreement by March 8, 2008, as required
      thereunder, (c) the Borrower's failure to deliver the Consolidated financial
      statements for its fiscal year ended December 31, 2007, the related unqualified
      opinion from independent certified public accountants acceptable to
      Administrative Agent, and the related report of such accounts calculating
      compliance with the applicable Sections of the Credit Agreement by March 31,
      2008, as required by Section 5.2(a) of the Credit Agreement, (d) the Borrower's
      failure to settle in full its obligations with respect to the GPI Notes, on
      terms acceptable to Administrative Agent, on or before March 31, 2008, as
      required by Section 8.1(bb) of the Credit Agreement, and (e) the existence
      of
      the foregoing Events of Default under the Credit Agreement constitutes an Event
      of Default under the ISDA Agreement. Without limiting the foregoing, the
      "Existing Defaults" as defined in the letter dated March 10, 2008 (the "March
      10
      Default Notice") also remain outstanding, uncured, and unwaived. This letter
      does not constitute a waiver of the March 10 Default Notice or such additional
      Events of Default or any of the Administrative Agents' or Lenders' rights
      thereunder or with respect thereto.

     

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    

      Tekoil
        and Gas Gulf Coast, LLC 

      Mr.
        Mark
        Western 

      March
        31,
        2008

      Page
        2
of
        3

    

     

    At
      the
      present time, however, other than as specifically set forth in this letter,
      the
      Administrative Agent and the Lenders have elected not to pursue any of their
      remedies under the Credit Agreement, the other Transaction Documents and
      applicable Law. Notwithstanding the foregoing, the Administrative Agent and
      the
      Lenders reserve all of their rights and remedies and may exercise any or all
      of
      their rights and remedies at any time without further notice, unless further
      notice is required under the Credit Agreement, the other Transaction Documents,
      or applicable Law. Additionally, all of the terms and provisions of the Credit
      Agreement and the other Transaction Documents are and shall remain in full
      force
      and effect. You are advised that the Administrative Agent and the Lenders
      require strict performance by the Borrower and the Guarantors of all of their
      respective obligations, agreements and covenants contained in the Credit
      Agreement and the other Transaction Documents, and no inaction or action
      regarding any such breach is intended to be or shall be a waiver
      thereof.

     

    As
      a
      result of the continuing nature of the above-described Existing Defaults, the
      Lenders have no obligation to make additional Loans until such Existing Defaults
      have been waived in writing by the Administrative Agent and the Lenders (it
      being understood that neither the Administrative Agent nor the Lenders are
      obligated to grant any such waiver). Also, as provided in Amendment No. 3 and
      Waiver to the Credit Agreement dated as of October 24, 2007 and Amendment No.
      4
      and Waiver to the Credit Agreement dated as of January 18, 2008 (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.

     

    In
      no
      event and under no circumstance shall any past or future discussions with the
      Administrative Agent or any Lender, or any forbearance by the Administrative
      Agent and the Lender of the rights and remedies under the Transaction Documents,
      serve to (a) cause a modification of the Transaction Documents,
      (b) establish a custom with respect to any of the Transaction Documents,
      (c) operate as a waiver of any existing or future Default or Event of Default
      under the Transaction Documents, (d) entitle the Borrower or any Guarantor
      to
      any other or further notice or demand whatsoever beyond those required by the
      Transaction Documents, (e) in any way modify, change, impair, affect, diminish
      or release any of the Borrower's or any Guarantor's obligations or liability
      under the Transaction Documents or any other liability you may have to the
      Administrative Agent or any Lender, or (f) waive, limit or condition the
      Administrative Agent's or any Lender Party's rights and remedies under the
      Transaction Documents, all of which rights and remedies are expressly
      reserved.

     

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    

      Tekoil
        and Gas Gulf Coast, LLC 

      Mr.
        Mark
        Western 

      March
        31,
        2008

      Page
        3
of
        3

       

    

    Pursuant
      to the March 10 Default Notice, the Borrower was previously notified that all
      outstanding Loans, and to the extent permitted by applicable Law, any interest
      payments on the Loans or any fees or other amounts owed under the Credit
      Agreement, shall bear interest at a rate equal to three percent (3%) per annum
      above the otherwise applicable rate set forth in the Credit Agreement. This
      letter shall serve as notice to the Borrower that all outstanding Loans, and
      to
      the extent permitted by applicable Law, any interest payments on the Loans
      or
      any fees or other amounts owed under the Credit Agreement, shall continue to
      bear interest at a rate equal to three percent (3%) per annum above the
      otherwise applicable rate set forth in the Credit Agreement.

     

    The
      Existing Defaults described herein are based upon the information available
      to
      the Administrative Agent on the date hereof and shall not be deemed to exclude
      the existence of other Defaults or Events of Default. The failure of the
      Administrative Agent to give notice to the Borrower of any such other Defaults
      or Events of Default is not intended to be, nor shall be, a waiver thereof.
      Furthermore, the Administrative Agent and the Lenders' past, present or future
      failure to exercise available rights and remedies notwithstanding the existence
      of a Default or Event of Default are not intended to, and shall not, (i) operate
      as a waiver of rights and remedies available to the Administrative Agent or
      any
      Lender pursuant to the Credit Agreement or the Transaction Documents or (ii)
      indicate an agreement on the Administrative Agent or any Lender's part to
      forbear from exercising its rights and remedies, all of which the Administrative
      Agent and each Lender expressly reserve. Further, any single or partial exercise
      of any of the Administrative Agent or any Lender's rights and remedies shall
      not
      preclude any other or further exercise of any available rights and
      remedies.

     

    Please
      contact John Howie at (713) 658-2682 or Danny Savitz at (713) 658-2688 with
      any
      questions or comments.

     

    
      	 	 	 
	 	Very
              truly
              yours,
	 	 
	 	
              J. ARON & COMPANY,

              as Administrative Agent

            
	 
 	 
 	 
 
	
            	By:  	/s/
              John
              K. Howie
	 	
              
Name: John
              K. Howie
	 	Title:
              Vice
              PresidentUnassociated Document

     

    April
      16,
      2008

    

    National
      Holdings Corporation

    120
      Broadway, 27th
      Floor

    New
      York,
      NY 10271

    Attn:
      Mark Goldwasser, CEO

    

    
      	
            	Re:	
              March
                31, 2008 $3,000,000
                Financing

            

    

    

    Dear
      Mr.
      Goldwasser:

    

    Reference
      is made to that certain Securities Purchase Agreement, dated as of March 31,
      2008 (the “Agreement”), by and between St. Cloud Capital Partners II, L.P. (“St.
      Cloud”) and National Holdings Corporation (the “Company”) and that certain 10%
      Senior Subordinated Convertible Promissory Note of the Company, dated March
      31,
      2008, payable to the order of St. Cloud (the “Note”). Terms not defined herein
      shall have the meanings ascribe them in the Agreement or the Note. The
      undersigned agree as follows:

    

    
      	 	
              1.

            	
              The
                definition of “Other Senior Debt” as set forth in the Agreement and the
                Note shall be $2,000,000 of other senior indebtedness.
                

            

    

    

    
      	 	
              2.

            	
              It
                is contemplated that up to $2,000,000 of debt financing will be obtained
                by vFinance, Inc. (the “vFinance Financing”) prior to the consummation of
                the proposed merger of vFinance, Inc. with and into vFin Acquisition
                Corporation, the Company’s wholly-owned subsidiary. The foregoing debt
                shall be assumed by the Company in connection with the merger and
                shall
                rank pari passu with the Company indebtedness owed to St.
                Cloud.

            

    

    

    
      	 	
              3.

            	
              In
                the event that the vFinance Financing includes provisions that are
                more
                advantageous to the holders of such debt than those currently held
                by St.
                Cloud as set forth in the Note, including, but not limited to, a
                higher
                rate of interest, more advantageous conversion, redemption or exercise
                prices, higher pre-payment penalties, or the granting of a security
                interest in the Company or its subsidiaries, then the Company shall
                amend
                and conform the Note to include such advantageous
                provisions.

            

    

     

    
      	 	 	 
	 	ST.
              CLOUD CAPITAL
              PARTNERS II, L.P.
	 	 
	 	
              By:
                SGCP II, LLC
Its: General
              Partner 
	 
 	 
 	 
 
	 	By:  	/S/ BENJAMIN
              HOM
	 	
              

              Benjamin
                Hom

              Managing
                Member

            

    

     

    
      	
              ACCEPTED
                AND AGREED:

              

              NATIONAL
                HOLDINGS CORPORATION

            	 	 	 
	 	 	 	 	 
	By:   	/S/ MARK
              GOLDWASSER	 	 	 
	 	
              

              Mark
                Goldwasser, Chief Executive Officer

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