Amended and Restated Loan Agreement dated as of May 25, 2008 between Isramco Inc. and J.O.E.L. Jerusalem Oil Explorations Ltd AMENDED AND RESTATED LOAN AGREEMENT Dated as of May 25, 2008 by and between ISRAMCO, INC. A Delaware corporation, as the...
EXHIBIT
10.12
Amended
and Restated Loan Agreement dated as of May 25, 2008 between Isramco Inc. and
▇.▇.▇.▇. Jerusalem Oil Explorations Ltd
AMENDED
AND RESTATED
$48,900,000
Dated
as of
May
25, 2008
by and
between
ISRAMCO,
INC.
A
Delaware corporation,
as the
“Borrower”,
and
▇.▇.▇.▇.
JERUSALEM OIL EXPLORATIONS, LTD.
As the
“Lender”
AMENDED AND RESTATED LOAN
AGREEMENT
THIS
AMENDED AND RESTATED LOAN AGREEMENT (the Amended and Restated Agreement), dated
as of May 25, 2008, is made and entered into by and between ISRAMCO, INC., a
Delaware corporation (the “Borrower or "Isramco”) and ▇.▇.▇.▇ JERUSALEM OIL
EXPLORATIONS LTD. (the “Lender”).
WITNESSETH:
WHEREAS,
effective February 15, 2008, Isramco entered one certain Loan Agreement with the
Lender pursuant to which Lender agreed to provide financing in the amount of
$24,000,000 (the “First Loan Agreement”);
WHEREAS,
effective March 10, 2008, Isramco entered one certain Loan Agreement with the
Lender pursuant to which Lender agreed to provide financing in the amount of
$5,400,000 (the Second Loan Agreement”); and
WHEREAS,
effective ▇▇▇▇▇ ▇▇, ▇▇▇▇, ▇▇▇▇▇▇▇ entered one certain Loan Agreement with the
Lender pursuant to which Lender agreed to provide financing in the amount of
$19,500,000 (the “Third Loan Agreement”);
WHEREAS,
Lender and Isramco desire to amend and restate the rights and obligations of the
parties to the First Loan Agreement, the Second Loan Agreement and the Third
Loan Agreement and to consolidate these rights and obligations into this Amended
and Restated Agreement on the terms and conditions hereinafter set
forth.
NOW,
THEREFORE, in consideration of the mutual covenants and agreements contained
herein, and other good and valuable consideration, receipt of which is
acknowledged by the parties hereto, the parties agree, as follows:
ARTICLE
I
CERTAIN
DEFINITIONS
When used
herein, the following terms shall have the following meanings:
1.1 Business
Day shall mean a day other than a Saturday, Sunday or a day upon which banks in
the State of Texas are closed to business generally; provided that when used in
connection with a Libor Loan, the term shall also exclude any day on which banks
are not open for dealings in dollar deposits in the London interbank
market.
1.2 Default
Rate shall mean the Stated Rate plus 12 percentage points (12%) per
annum.
1.3 Effective
Date shall mean May 25, 2008.
1.4 Event of
Default shall mean any of the events specified in Section 7.1 of this Amended
and Restated Agreement, and Default shall mean any event, which together with
any lapse of time or giving of any notice, or both, would constitute an Event of
Default.
1.5 Governmental
Authority shall include the country, the state, county, city and political
subdivisions in which any Person or such Person’s property is located or which
exercises valid jurisdiction over any such Person or such Person’s property, and
any Tribunal of any of them, including monetary authorities, which exercises
valid jurisdiction over any such Person or such Person’s
property. Unless otherwise specified, all references to Governmental
Authority herein shall mean a Governmental Authority having jurisdiction over,
where applicable, Borrower, any of its Subsidiaries, any of Borrower’s
properties or the Lender.
1.6 Governmental
Requirement shall mean any Law, or other directive or requirement (whether or
not having the force of law), including, without limitation, environmental laws,
energy regulations and occupational, safety and health standards or controls, of
any Governmental Authority.
1.7 Indebtedness
shall mean any and all: (i) indebtedness, obligations and liabilities of the
Borrower to the Lender incurred or which may be incurred hereafter
pursuant to the terms of this Amended and Restated Agreement or any of the other
Loan Documents, and any extensions, renewals, substitutions, amendments and
increases in amount thereof, including such amounts as may be evidenced by the
Note and all lawful interest thereon and other charges, and all reasonable costs
and expenses incurred by the Lender in connection with the preparation, filing
and recording of the Loan Documents, including attorneys fees (ii) all
reasonable costs and expenses, including attorneys’ fees, paid or incurred by
the Lender in enforcing or attempting to enforce collection of any Indebtedness
and in enforcing or realizing upon or attempting to enforce or realize upon any
collateral or security for any Indebtedness and in protecting and preserving the
Lender’s interest in the Indebtedness or any collateral or security for any
Indebtedness in any bankruptcy or reorganization proceeding, including interest
on all sums so expended by the Lender accruing from the date upon which such
expenditures are made until paid, at an annual rate equal to the Default Rate;
and (iii) sums expended by the Lender in curing any Event of Default or Default
of the Borrower under the terms of this Amended and Restated Agreement, the
other Loan Documents or any other security agreement or other writing evidencing
or securing the payment of the Indebtedness described herein, including the
Note.
1.8 Law(s)
shall mean all statutes, laws, ordinances, regulations, orders, rules, codes,
permits, franchises, licenses, certificates, writs, injunctions, or decrees of
the United States, any state or commonwealth, any municipality, any foreign
country, any territory or possession, or any Tribunal.
1.9 Libor
shall mean the rate per annum of the London interbank offered rate for deposits
in Dollars at approximately 11:00 a.m. (London time) two (2) Business Days prior
to the first day of the Interest Period for a term of 1 (one)
month or for a term comparable to the Interest Period, at Lender
discretion.
1.10 Loan
shall mean the funds owing to the Borrower by the Lender pursuant to the Prior
Loan Agreements.
1.11 Loan
Documents means, on any date, this Amended and Restated Agreement, the Note and
all other agreements relating to this Amended and Restated Agreement entered
into from time to time between Borrower and the Lender and all other documents
and certificates executed and delivered to the Lender by the Borrower in
connection with any of the foregoing, as from time to time amended,
supplemented, amended and restated, or otherwise modified and in effect on such
date.
1.12 Material
Adverse Effect shall mean any material and adverse effect on (i) the assets,
liabilities, financial condition, business, operations, prospects or affairs of
the Borrower and its Subsidiaries taken as a whole; or (ii) the ability of the
Borrower and its Subsidiaries, taken as a whole, to carry out their business on
and after the Effective Date or as proposed as of the Effective Date to be
conducted or meet its obligations under the Loan Documents on a timely
basis.
1.13 Maturity
Date shall mean, unless the Note is sooner accelerated pursuant to this Amended
and Restated Agreement, June 30, 2015.
1.14 Maximum
Rate shall mean at any particular in question, the maximum rate of interest
which, under applicable law, may then be charged. If such maximum
rate changes after the date hereof, the Maximum Rate shall be automatically
increased or decreased, as the case may be, without notice to Borrower from time
to time as the effective date of each change in such maximum rate
period.
1.15 Note
shall mean the Note as described and defined in Article II of this Amended and
Restated Agreement, together with each and every extension, renewal,
modification, replacement, substitution and change in form thereof which may be
from time to time and for any term or terms effected.
1.16 Person
shall mean and include an individual, a partnership, a limited partnership, a
limited liability company, a joint venture, a corporation, a trust, an
unincorporated organization, and a government or any department, agency or
political subdivision thereof.
1.17 Prior
Loan Agreements means the First Loan Agreement, the Second Loan Agreement and
the Third Loan Agreement.
1.18 Responsible
Officer shall mean the chief executive officer, chief operating officer, chief
financial officer, president or managing director of the Borrower.
1.19 Subsidiary
shall mean (i) any corporation, at least 50% of the total combined voting power
of all classes of Voting Stock of which shall, at the time as of which any
determination is being made, be owned by the Borrower either directly or through
Subsidiaries; and (ii) any partnership, joint venture or similar entity if at
least a 50% interest in the profits or capital thereof is owned by the Borrower,
either directly or through Subsidiaries.
1.20 Stated
Rate shall mean a rate per annum equal to LIBOR plus 6.00%; provided, however,
that if the Stated Rate ever exceeds the Maximum Rate, the Stated Rate shall
then and thereafter be fixed at a rate per annum equal to the Maximum Rate then
and from time to time thereafter in effect until the total amount of interest
accrued at the Stated Rate on the unpaid balance of this Note equals the total
amount of interest which would have accrued at the Maximum Rate from time to
time in effect.
1.21 Taxes
shall mean all taxes, assessments, fees, or other charges or levies from time to
time or at any time imposed by any Laws or by any Tribunal as hereafter
defined.
1.22 Tribunal
shall mean any municipal, state, commonwealth, Federal, foreign, territorial or
other sovereign, governmental entity, governmental department, court,
commission, board, bureau, agency or instrumentality.
1.23 Other
Definitional Provisions. References to Sections, subsections, Exhibits and
Schedules shall be to Sections, subsections, Exhibits and Schedules,
respectively, of this Amended and Restated Agreement unless otherwise
specifically provided. Any of the terms defined in Article I may,
unless the content otherwise requires, be used in the singular or the plural
depending on the reference. In this Amended and Restated Agreement,
words importing any gender include the other genders; the words including,
includes and include shall be deemed to be followed by the words without
limitation; references to agreements and other contractual instruments shall be
deemed to include subsequent amendments, assignments, and other modifications
thereto, but only to the extent such amendments, assignments and other
modifications are not prohibited by the terms of this Amended and Restated
Agreement or any other Loan Document; references to Persons include their
respective permitted successors and assigns or, in the case of governmental
Persons, Persons succeeding to the relevant functions of such Persons; and all
references to statutes and related regulations shall include any amendments of
same and any successor statutes and regulations.
ARTICLE
II
LOAN
2.1 Loan. Pursuant
to the Prior Loan Agreements the Borrower has borrowed and the Lender has loaned
sums to the Borrower having a current total balance outstanding of Forty Eight
Million Nine Hundred Thousand U.S. Dollars ($48,900,000.00) (the
“Loan”). The receipt of the Loan is acknowledged by Borrower. The
unpaid principal balance and all accrued interest of the Loan are due and
payable on the Maturity Date.
2.2 Prior
Loan Agreements Void. Upon execution of this Amended and Restated
Agreement all Prior Loan Agreements, together with all documents related thereto
(including but not limited to loan documents, notes, etc.) shall be cancelled,
terminated and void in their entirety as of the Effective Date. As of
the Effective Date, the terms and conditions of this Amended and Restated
Agreement will govern the rights and obligations of the parties.
2.3 Note. The
Borrower shall execute and deliver to the order of the Lender a promissory note
in the original principal amount the Loan, the form of which is annexed hereto
as Exhibit A and hereby made a part hereof (hereinafter referred to as the
“Note”). The Note shall be dated as of the Effective Date, and shall
provide for payment of principal and accrued interest on the Maturity
Date. The Note shall bear interest on the unpaid balance of principal
from time to time outstanding and on any past due interest at an annual interest
rate determined pursuant to Section 2.6 hereof, but in no event at a rate
greater than permitted by applicable Law. All payments received shall
be applied first to accrued interest and then to the outstanding principal
amount owing on the Note. All payments and prepayments shall be made
in lawful money of the United States of America. After maturity
(whether by acceleration or otherwise) the Note shall bear interest at the
Default Rate, payable on demand. Interest shall be calculated on the
basis of a year of 365 days, but assessed for the actual number of days elapsed
before full payment.
2.4 Proceeds
of Loan. It is agreed and acknowledged that proceeds of the Prior
Loan Agreements were used only for the purposes of (i) Borrower’s equity
contribution to Isramco Energy, LLC and Isramco Resources, LLC, wholly owned
subsidiaries of Borrower; (ii) working capital and general corporate purposes;
and (iii) refinancing of existing debt.
2.5 Responsible
Officer. A Responsible Officer may, from time to time, notify the
Lender in writing of a change in the Responsible Officer. From and
after the Lender’s receipt of such written notice, the Lender may rely on any
such request or certificate purportedly signed by any individual who has been so
designated as a Responsible Officer pursuant to this Amended and Restated
Agreement unless or until it receives written notice from a Responsible Officer
of the deletion of a Responsible Officer.
2.6 Interest
Rates.
2.6.1 (a) Interest
Prior to Maturity. Subject to the provisions and limitations hereof,
the outstanding principal balance of the Loan hereunder shall accrue interest at
the Stated Rate.
2.6.2 (b) Interest
After Maturity. After the outstanding principal amount of the Loan
shall have become past due (by acceleration or past the stated maturity date),
such Loan shall bear interest for each day until paid (before and after
judgment) at the Default Rate.
2.7 Prepayments. Borrower
shall have the right at its option, from time to time, to prepay the Loan in
whole or part without premium or penalty at any time.
2.8 Installment
Payments. Principal and accrued interest shall be payable in four (4)
equal annual installments on June 30, 2012 through and including June 30,
2015.
2.9 Payments
From Borrower. All payments shall be payable to the Lender on the day
when due without presentment, demand, protest or notice of any kind, all of
which are hereby expressly waived, and an action therefor shall immediately
accrue if not timely paid within applicable grace or curative periods herein
specified. Such payments shall be made to the Lender at such location
as Lender may from time to time designate in writing in U.S. Dollars in funds
immediately available at such office without set off, counterclaim or other
deduction of any nature. To the extent permitted by law, after there
shall have become due (by acceleration or otherwise), interest or any other
amounts due from the Borrower hereunder or under the Note (excluding overdue
principal, which shall bear interest as described in Section 2.6(b) hereof),
such amounts shall bear interest for each day until paid (before and after
judgment), payable on demand, at the Default Rate.
2.10 Full
Payment. All outstanding principal and accrued but unpaid interest on
the Note shall be due and payable at the Maturity Date.
ARTICLE
III
CONDITIONS
PRECEDENT TO LOANS
3.1 Conditions
Precedent to Funding. The effectiveness of this Amended and Restated
Agreement is subject to the satisfaction of all of the following conditions on
or prior to the Effective Date (in addition to the other terms and conditions
set forth herein):
(a) Representations
and Warranties. The covenants, representations and warranties set
forth herein and in the other Loan Documents shall be true and correct in all
material respects on and as of the Effective Date, with the same effect as
though made on and as of the Effective Date.
(b) Note. The
Borrower shall have executed and delivered to the Lender the Note payable to the
order of the Lender.
(c) Other
Information. The Lender shall have received such other information,
documents and assurances as shall be reasonably requested by the
Lender.
ARTICLE
IV
AFFIRMATIVE
COVENANTS
The
Borrower covenants and agrees with the Lender that from the date hereof and so
long as this Amended and Restated Agreement is in effect (by extension,
amendment or otherwise) and until payment in full of all Indebtedness and the
performance of all other obligations of the Borrower under this Amended and
Restated Agreement, unless the Lender shall otherwise consent in
writing:
4.1 Payment of Taxes and
Claims. The Borrower will pay and discharge or cause to be
paid and discharged all Taxes imposed upon the income or profits of the Borrower
or upon the property, real, personal or mixed, or upon any part thereof,
belonging to Borrower before the same shall be in default, and all lawful claims
for labor, rentals, materials and supplies which, if unpaid, might become a Lien
upon its property or any part thereof; provided, however, that the Borrower
shall not be required to pay and discharge or cause to be paid or discharged any
such Tax, assessment or claim so long as the validity thereof shall be contested
in good faith by appropriate proceedings, and adequate book reserves shall be
established with respect thereto, and the Borrower shall pay such Tax, charge or
claim before any property subject thereto shall become subject to levy of
attachment or execution.
4.2 Maintenance of
Existence. The Borrower will do or cause to be done all things
necessary to preserve and keep in full force and effect its organizational
existence, rights and franchises and good standing in the State of Delaware and
as a foreign corporation qualified in such other jurisdiction(s) in which the
failure to maintain such qualification would have a Material Adverse
Effect.
4.3 Preservation of
Property. The Borrower will at all times maintain, preserve
and protect all of the Borrower’s properties which are used or useful in the
conduct of the Borrower’s businesses whether owned in fee or otherwise, or
leased, in good repair and operating condition and comply with all material
leases to which it is a party or under which it occupies property so as to
prevent any material loss or forfeiture thereunder.
4.4 Payment of
Indebtedness/Performance of Obligations. The Borrower will pay
the obligations under the Note according to the reading, tenor and effect
thereof and the Borrower hereby agrees to pay, when due and owing, all
Indebtedness, whether or not evidenced by the Note.
4.5 Operation of Properties and
Equipment.
(a) The
Borrower will maintain and operate, and will cause each of its Affiliates (if
any) to maintain and operate, their respective properties in a good and
workmanlike manner, except to the extent a failure to so observe and comply is
not reasonably expected to have a Material Adverse Effect.
(b) The
Borrower will comply, and will cause each of its Affiliates (if any) to comply,
in all respects with all contracts and agreements applicable to or relating to
their respective properties, except to the extent a failure to so comply is not
reasonably expected to have a Material Adverse Effect.
ARTICLE
V
NEGATIVE
COVENANTS
The
Borrower covenants and agrees with the Lender that from the date hereof and so
long as this Amended and Restated Agreement is in effect (by extension,
amendment or otherwise) and until payment in full of all Indebtedness, unless
the Lender shall otherwise consent in writing:
5.1 Use of Loan
Proceeds. The Borrower shall not use any proceeds of the Loan
for any purpose other than those expressly permitted and contemplated by this
Amended and Restated Agreement, and in no event shall any loan proceeds be used
for any purpose that would create or cause a breach, violation or default or
event of default hereunder or under any of the other Loan Documents or violation
of Regulations T, U or X or any other regulation of the Board of Governors of
the Federal Reserve System or to violate Section 7 of the Securities Exchange
Act of 1934 or any rule or regulation thereunder, in each case as now in effect
or as the same may hereinafter be in effect.
ARTICLE
VI
REPRESENTATIONS
AND WARRANTIES
To induce
the Lender to enter into this Amended and Restated Agreement, and in
consideration thereof, the Borrower represents, warrants and covenants as
follows:
6.1 Good Standing, and Due
Qualification. The Borrower (a) is a limited liability company
duly formed, validly existing, and in good standing under the laws of the State
of Delaware; (b) has the power and authority to own its assets and to transact
the business in which it is now engaged or in which it is proposed to be
engaged; and (c) is duly qualified as a foreign corporation and in good standing
under the laws of each other jurisdiction in which such qualification is
required, except where the failure to so qualify could not reasonably be
expected to have a Material Adverse Effect. The initial Responsible
Officer of the Borrower has all necessary corporate power and authority to
execute and deliver this Amended and Restated Agreement, the Note, and the other
Loan Documents to the Lender.
6.2 Litigation. There
is no action, suit, investigation or proceeding threatened or pending before any
Tribunal against or affecting the Borrower or any properties or rights of the
Borrower, which, if adversely determined, would result in any material adverse
change in the business or condition, financial or otherwise, of the Borrower, or
otherwise materially adversely affect the ability of the Borrower to perform its
obligations under this Amended and Restated Agreement. The Borrower
is not in default with respect to any judgment, order, writ, injunction, decree,
rule or regulation of any Tribunal.
6.3 Conflicting Agreements and
Other Matters. To the best of Borrower’s knowledge and belief,
the Borrower is not in default in the performance of any material obligation,
covenant, or condition in any material agreement to which it is a party or by
which it is bound. Neither the execution nor delivery of any of the
Loan Documents, nor fulfillment of, nor compliance with their respective terms
and provisions will conflict with, or result in a material breach of the terms,
conditions or provisions of, or constitute a default under, or result in any
material violation of, or result in the creation of any Lien (except those
created by the Loan Documents) upon any of the properties or assets of the
Borrower pursuant to, or require any consent, approval or other action by or any
notice to or filing with any Tribunal (other than routine filings after the
Effective Date with the Securities and Exchange Commission, any securities
exchange and/or state blue sky authorities) pursuant to any award of any
arbitrator, or any agreement, instrument or Laws to which the Borrower is
subject.
6.4 Title to Properties,
Authority. The Borrower has full power, authority and legal
right to own and operate the properties which it now owns and operates, and to
carry on the lines of business in which it is now engaged, and to the knowledge
of Borrower has good and defensible title to all of its assets. The Borrower has
full power, authority and legal right to execute and deliver and to perform and
observe the provisions of this Amended and Restated Agreement and the other Loan
Documents and the Loan Documents constitute the legal, valid and binding
obligations of the Borrower, enforceable against it in accordance with their
respective terms, subject only to applicable bankruptcy, insolvency or similar
laws and general principles of equity.
6.5 Corporate
Authorization. The Borrower has duly authorized the execution
and delivery of each of the Loan Documents and the performance of their
respective terms. No other authorizations, approvals, consents or
actions of any other Person are required as a prerequisite to the validity and
enforceability of the Loan Documents.
ARTICLE
VII
EVENTS OF
DEFAULT
7.1 Events of
Default. The occurrence of any one or more of the following
events shall constitute an Event of Default (whether such occurrence shall be
voluntary or involuntary or come about or be effected by operation of Law or
otherwise):
(a) Borrower
shall fail to make any annual or other payment due on the Note, or fail to pay
any other fee, charge or assessment within thirty (30) days after the same shall
become due and payable (whether by extension, renewal, acceleration, maturity or
otherwise); or
(b) Any
representation, warranty or certification of the Borrower made herein, or in any
other writing furnished in connection with or pursuant to any of the Loan
Documents shall have been incorrect, false or misleading in any material respect
on the date when made; or
(c) The
Borrower shall fail to duly observe, perform or comply with any covenant,
agreement or term (other than payment provisions which are governed by
subparagraph (a) hereof) contained in this Amended and Restated Agreement or any
of the Loan Documents and such default or breach shall have not been cured or
remedied within thirty (30) days following the date the Lender first notifies
the Borrower in writing; or
(d) Any of
the following: (i) the Borrower shall be unable to pay its debts as they mature,
or shall make an assignment for the benefit of creditors or admit in writing its
inability to pay its debts generally as they become due or fail generally to pay
its debts as they mature; or (ii) an order, judgment or decree is entered
adjudicating the Borrower insolvent or an order for relief under the United
States Bankruptcy Code is entered with respect to the Borrower; or (iii) the
Borrower shall petition or apply to any Tribunal for the appointment of a
trustee, receiver, custodian or liquidator of the Borrower or of any substantial
part of the assets of the Borrower or shall commence any proceedings relating to
the Borrower under any bankruptcy, reorganization, compromise, arrangement,
insolvency, readjustment of debts, dissolution, or liquidation Law of any
jurisdiction, whether now or hereafter in effect; or (iv) any such petition or
application shall be filed, or any such proceedings shall be commenced, against
the Borrower and the Borrower by any act shall indicate its approval thereof,
consent thereto or acquiescence therein, or an order, judgment or decree shall
be entered appointing any such trustee, receiver, custodian or liquidator, or
approving the petition in any such proceedings, and such order, judgment or
decree shall remain unstayed and in effect for more than thirty (30) days; or
(v) the Borrower shall fail to make timely payment or deposit of any amount of
tax required to be withheld by such Borrower and paid to or deposited to or to
the credit of the United States of America pursuant to the provisions of the
Internal Revenue Code of 1986, as amended, in respect of any and all wages and
salaries paid to employees of the Borrower; or
(e) Any
default or event of default under any of the other Loan Documents following the
lapse of any applicable curative or grace period provided therein.
7.2
Remedies. Upon
the occurrence of any Event of Default referred to in Section 7.1, the Note and
all other Indebtedness shall be immediately due and payable, without notice of
any kind. Upon the occurrence of any other Event of Default, and
without prejudice to any right or remedy of the Lender under this Amended and
Restated Agreement or the Loan Documents or under applicable Law or under any
other instrument or document delivered in connection herewith, the Lender may
declare the Note and the Indebtedness, or any part thereof, to be forthwith due
and payable, whereupon the Note and the other Indebtedness, or such portion as
is designated by the Lender shall forthwith become due and payable, without
presentment, demand, notice or protest of any kind, all of which are hereby
expressly waived by the Borrower. No delay or omission on the part of
the Lender in exercising any power or right hereunder or under the Note, the
Loan Documents or under applicable law shall impair such right or power or be
construed to be a waiver of any default or any acquiescence therein, nor shall
any single or partial exercise by Lender of any such power or right preclude
other or further exercise thereof or the exercise of any other such power or
right by such Person. In the event that all or part of the
Indebtedness becomes or is declared to be forthwith due and payable as herein
provided, Lender shall have the right to set off the amount of all the
Indebtedness of the Borrower owing to such Person against, and shall have a lien
upon and security interest in, all property of the Borrower in such Person’s
possession at or subsequent to such default, regardless of the capacity in which
such property is held, including but not limited to any balance or share of any
deposit, demand, collection or agency account. At any time after the
occurrence of any Event of Default, the Lender may, at its option, cause an
audit of any and/or all of the books, records and documents of the Borrower to
be made by auditors satisfactory to the Lender at the expense of the
Borrower. The Lender also shall have, and may exercise, each and
every right and remedy granted to it for default under the terms of the other
Loan Documents.
7.3 Application of
Proceeds. After the exercise of remedies provided for in
Section 7.2 (or after the Indebtedness automatically becomes immediately due and
payable as set forth in Section 7.2), any amounts received on account of such
Indebtedness shall be applied in the following order:
First: to
payment of that portion of the Indebtedness constituting fees, indemnities,
expenses or other amounts (other than principal and interest) payable to the
Lender (including fees, charges and disbursements of counsel);
Second: to
payment of accrued and unpaid interest on the Indebtedness;
Third: to
payment of unpaid principal of the Indebtedness;
and
Last: the balance, if
any, after all of the Indebtedness has been indefeasibly paid in full, to
Borrower or as otherwise required by applicable Laws.
ARTICLE
VIII
MISCELLANEOUS
8.1 Notices. Unless
otherwise provided herein, all notices, requests, consents and demands shall be
in writing and shall be either hand-delivered (by courier or otherwise), mailed
by certified mail, postage prepaid, or transmitted via telex or facsimile to the
respective addresses specified below, or, as to any party, to such other address
as may be designated by it in written notice to the other parties:
If to the
Borrower, to:
Isramco,
Inc.
▇▇▇▇
▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇,
▇▇ ▇▇▇▇▇
Telephone
No.: (713) 621 -3882
Facsimile
No.: (713) 621 – 3988
e – mail
▇▇▇▇▇▇@▇▇▇▇▇▇.▇▇▇
If to the Lender, to:
▇.▇.▇.▇.
Jerusalem Oil Explorations, Ltd.
▇ ▇▇▇▇▇▇
▇▇.
▇.▇.▇.
▇▇▇▇▇
▇▇▇▇▇▇-▇▇▇▇▇
▇▇▇▇▇
▇▇▇▇▇▇
Phone: ▇▇▇-▇-▇▇▇-▇▇▇-▇
e-mail: ▇▇▇▇▇▇@▇▇▇▇▇▇▇.▇▇▇
All
notices, requests, consents and demands hereunder will be effective when
hand-delivered or transmitted by telecopier or sent, answer-back received,
respectively, by the Lender to the notice address of the Borrower, or two (2)
Business Days after the date when mailed by certified mail, postage prepaid, in
each case given or addressed as aforesaid by either party hereto.
8.2 Place of
Payment. All sums payable hereunder shall be paid in
immediately available funds, at such location as may be designated from time to
time in writing by Lender. If any interest, principal or other
payment falls due on a date other than a Business Day, then (unless otherwise
provided herein) such due date shall be extended to the next succeeding Business
Day, and such extension of time will, in such case, be included in computing
interest, if any, in connection with such payment.
8.3 Survival of
Agreements. All covenants, agreements, representations and
warranties made herein shall survive the execution and the delivery of Loan
Documents.
8.4 Parties in
Interest. All covenants, agreements and obligations contained
in this Amended and Restated Agreement shall bind and inure to the benefit of
the parties hereto and the respective successors and permitted assigns of the
parties hereto, except that the Borrower may not assign any of its rights or
obligations hereunder or under the Note without the prior written consent of the
Lender.
8.5 Governing
Law. This Amended and Restated Agreement and the Note shall be
deemed to have been made or incurred under the Laws of the State of Texas and
shall be construed and enforced in accordance with and governed by the Laws of
Texas except only where the applicable remedial or procedural laws of the other
jurisdictions are situated are applicable thereto. Tex. Rev. Civ.
Stat. ▇▇▇. Art. 5069, Ch 15 (which regulates certain revolving credit loan
accounts and revolving tri-party accounts) shall not apply to this Amended and
Restated Agreement or the Note.
8.6 Interest. It
is the intention of the parties hereto that the Lender shall conform strictly to
usury laws applicable to them. Accordingly, if the transactions
contemplated hereby would be usurious as to the Lender under laws applicable to
it (including the laws of the United States of America or any other jurisdiction
whose laws may be mandatorily applicable the Lender notwithstanding the other
provisions of this Amended and Restated Agreement), then, in that event,
notwithstanding anything to the contrary in any of the Loan Documents, it is
agreed as follows: (i) the aggregate of all consideration which
constitutes interest under law applicable to the Lender that is contracted for,
taken, reserved, charged or received by the Lender under any of the Loan
Documents or agreements or otherwise in connection with the Note shall under no
circumstances exceed the Maximum Rate, and any excess shall be canceled
automatically and if theretofore paid shall be credited by such Lender on the
principal amount of the Indebtedness (or, to the extent that the principal
amount of the Indebtedness shall have been or would thereby be paid in full,
refunded by any Lender to the Borrower); and (ii) in the event that the maturity
of the Note is accelerated by reason of an election of the holder thereof
resulting from any Event of Default under this Amended and Restated Agreement or
otherwise, or in the event of any required or permitted prepayment, then such
consideration that constitutes interest under law applicable to the Lender may
never include interest greater than the Maximum Rate, and excess interest, if
any, provided for in this Amended and Restated Agreement or otherwise shall be
canceled automatically as of the date of such acceleration or prepayment and, if
theretofore paid, shall be credited by the Lender on the principal amount of the
Indebtedness (or, to the extent that the principal amount of the Indebtedness
shall have been or would thereby be paid in full, refunded by the Lender to the
Borrower). All sums paid or agreed to be paid to the Lender for the
use, forbearance or detention of sums due hereunder shall, to the extent
permitted by law, be amortized, prorated, allocated and spread throughout the
full term of the Loans evidenced by the Note until payment in full so that the
rate or amount of interest on account of any Loans hereunder does not exceed the
Maximum Rate. If at any time and from time to time (i) the amount of
interest payable to the Lender on any date shall be computed at the highest
lawful rate applicable to the Lender pursuant to this Section 8.6; and (ii) in
respect of any subsequent interest computation period the amount of interest
otherwise payable to Lender would be less than the amount of interest payable to
the Lender computed at the highest lawful rate applicable to the Lender, then
the amount of interest payable to the Lender in respect of such subsequent
interest computation period shall continue to be computed at the highest lawful
rate applicable to the Lender until the total amount of interest payable to the
Lender shall equal the total amount of interest which would have been payable to
the Lender if the total amount of interest had been computed without giving
effect to this Section 8.6. To the extent that the Texas Credit Title
(V.T.C.A., Texas Finance Code §§ 301.001 et seq.) is relevant to the
Lender for the purpose of determining the highest lawful rate, the Lender hereby
elects to determine the applicable ceiling rate under the Texas Credit Title by
the weekly ceiling from time to time in effect.
8.7 No Waiver, Cumulative
Remedies. No failure to exercise, and no delay in exercising,
on the part of the Lender, any right, power or privilege hereunder or under any
other Loan Document or applicable Law shall preclude any other or further
exercise thereof or the exercise of any other right, power or privilege of the
Lender. The rights and remedies herein provided are cumulative and
not exclusive of any other rights or remedies provided by any other instrument
or by law. No notice to or demand on the Borrower in any case shall
entitle the Borrower to any other or further notice or demand in similar or
other circumstances.
8.8 Costs. The
Borrower agrees to pay to the Lender on demand all recording fees and filing
costs, all reasonable attorneys fees and reasonable legal expenses incurred or
accrued by the Lender in connection with and preparation, negotiation, closing,
administration, perfection, enforcement, refinancing, renegotiation,
restructuring, amendment, waiver or other modifications of this Amended and
Restated Agreement and the Loan Documents or any amendment, waiver, consent or
modification to and of the Loan Documents. In any action to enforce
or construe the provisions of this Amended and Restated Agreement or any of the
Loan Documents, the Lender shall be entitled to recover its reasonable
attorneys’ fees, disbursements of counsel and all costs and expenses related
thereto.
8.9 Right of Set -
Off. The Borrower hereby grants to the Lender a lien, security
interest and right of setoff as security for all Indebtedness and obligations of
the Borrower upon and against all deposits, credit, and property of the
Borrower, now or hereafter in the possession, custody, safekeeping or control of
such Person; and upon (a) the occurrence and during the continuance of any Event
of Default; and (b) the decision by the Lender to declare the Note due and
payable pursuant to the provisions of Article VII, the Lender is hereby
authorized at any time and from time to time, to set off and otherwise apply any
and all deposits (general or special, time or demand, provisional or final,
other than trust funds) at any time held and other indebtedness at any time
owing by the Lender to or for the credit or the account of the Borrower against
any and all of the Indebtedness of the Borrower now or hereafter existing under
this Amended and Restated Agreement and the Note, irrespective of whether demand
under this Amended and Restated Agreement or the Note shall have been made and
although such Indebtedness may be unmatured. The Lender shall
promptly notify the Borrower after any such set off and application; provided, however, that the
failure to give such notice shall not affect the validity of such setoff and
application. The rights of the Lender under this Section are in
addition to other rights and remedies (including, without limitation, other
rights of set - off) that such Persons may have at law, in equity or
otherwise.
8.10 Headings. The
article and section headings of this Amended and Restated Agreement are for
convenience of reference only and shall not constitute a part of the text hereof
nor alter or otherwise affect the meaning or interpretation of any provision
hereof.
8.11 Severability. The
unenforceability or invalidity as determined by a Tribunal of competent
jurisdiction, of any provision or provisions of this Amended and Restated
Agreement shall not render unenforceable or invalid any other provision or
provisions hereof.
8.12 Survival. To
the extent that any payments on the Indebtedness are subsequently invalidated,
declared to be fraudulent or preferential, set aside or required to be repaid to
a trustee, debtor-in-possession, receiver or other Person under any bankruptcy
law, common law or equitable cause, then to such extent, the Indebtedness so
satisfied shall be revived and continue as if such payment or proceeds had not
been received and the Liens, security interests, rights, powers and remedies
under this Amended and Restated Agreement shall continue in full force and
effect.
8.13 NO ORAL
AGREEMENTS.
THE LOAN
DOCUMENTS EMBODY THE ENTIRE AGREEMENT AND UNDERSTANDING BETWEEN THE PARTIES AND
SUPERSEDE ALL OTHER AGREEMENTS AND UNDERSTANDINGS BETWEEN SUCH PARTIES RELATING
TO THE SUBJECT MATTER HEREOF AND THEREOF THE LOAN DOCUMENTS REPRESENT THE FINAL
AGREEMENT BETWEEN THE PARTIES AND MAY NOT BE CONTRADICTED BY EVIDENCE OF PRIOR,
CONTEMPORANEOUS OR SUBSEQUENT ORAL AGREEMENTS OF THE PARTIES. THERE
ARE NO UNWRITTEN ORAL AGREEMENTS BETWEEN THE PARTIES.
8.14 Counterparts. This
Amended and Restated Agreement may be executed in any number of counterparts,
all of which taken together shall constitute one and the same instrument and any
of the parties hereto may execute this Amended and Restated Agreement by signing
any such counterpart. Delivery of an executed counterpart of a
signature page to this Amended and Restated Agreement by telecopier shall be as
effective as delivery of a manually executed counterpart of this Amended and
Restated Agreement.
8.15 Amendments. No
amendment or waiver of any provision of this Amended and Restated Agreement, the
Note, or any other Loan Document to which the Borrower is a party, nor any
consent to any departure by the Borrower therefrom, shall in any event be
effective unless the same shall be agreed or consented to by the Lender and the
Borrower, and each such waiver or consent shall be effective only in the
specific instance and for the specific purpose for which given; provided, that
no amendment, waiver, or consent shall, unless in writing and signed by the
Lender and the Borrower, do any of the following: (a) reduce the
principal of, or interest on, the Note or any fees or other amounts payable
hereunder; (b) postpone any date fixed for any payment of principal of, or
interest on, the Note or any fees or other amounts payable hereunder; (c) change
the percentage of the Commitment or of the aggregate unpaid principal amount of
the Note; or (d) change any provision contained in this Section
8.16.
8.16 Successors and
Assigns. This Amended and Restated Agreement shall be binding
upon and inure to the benefit of the parties hereto and their respective
successors and assigns. The Borrower may not assign or transfer any
of its rights or obligations hereunder without the prior written consent of the
Lender.
8.17 IN
WITNESS WHEREOF, the Borrower has caused this Amended and Restated Agreement to
be executed and delivered to the Lender, effective as of the day and year first
above written by the undersigned duly authorized corporate officer of the
Borrower.
BORROWER:
ISRAMCO,
INC.
By: ______________________________________
Haim Tsuff, Chief Executive
Officer
LENDER:
▇.▇.▇.▇.
JERUSALEM OIL EXPLORATIONS, LTD.
By: ______________________________________
▇▇▇▇▇▇
▇▇▇▇▇▇, Director
By:
______________________________________
Noa
Lendner, Authorized Representative