Exhibit 10.2
 
EXECUTION VERSION
 

 
ROYALTIES SALE AND CONTRIBUTION AGREEMENT
 
 
 
DATED May 18, 2015
 
 
 
 
between
 
 
ISRAMCO, INC.,
as Seller
 
 
AND
 
 
TAMAR ROYALTIES LLC,
as Borrower
 

 
 
 
 
 
 
 
 
GRAPHIC [image.jpg]
REF: 15041-30150
 
 
 

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CONTENTS
 
Clause
 
Page
     
ARTICLE 1 DEFINITIONS; CONSTRUCTION
1
Section 1.01
Definitions
1
Section 1.02
Construction
25
   
ARTICLE 2 SALE OF ROYALTIES RECEIVABLES; PAYMENT OF PURCHASE PRICE
27
Section 2.01
Sale and Contribution of Royalties Receivables to the Borrower
27
Section 2.02
Purchase Price; Consideration for Royalties Receivables
27
   
ARTICLE 3 BACK-UP SECURITY INTEREST
28
Section 3.01
Grant of back-up Security
28
   
ARTICLE 4 CONDITIONS PRECEDENT
28
Section 4.01
Conditions Precedent
28
   
ARTICLE 5 REPRESENTATIONS AND WARRANTIES
29
Section 5.01
Representations and Warranties of the Seller
29
Section 5.02
Representations and Warranties regarding the Royalties Receivables
33
Section 5.03
Breach of Representations and Warranties
37
   
ARTICLE 6 SELLER COVENANTS
37
Section 6.01
Reporting Requirements
37
Section 6.02
Notices
40
Section 6.03
Compliance with Laws, Contractual Obligations
40
Section 6.04
Payment of Taxes; Claims
41
Section 6.05
Transfer Taxes
41
Section 6.06
Preservation of Corporate Existence, Etc
41
Section 6.07
Sale of Royalties Receivables
42
Section 6.08
Security Interest
42
Section 6.09
Performance and Enforcement of Documents
43
Section 6.10
True Sale
43
Section 6.11
Payments
43
Section 6.12
No Further Sale or Transfer
44
Section 6.13
Defense of Right, Title and Interest
44
Section 6.14
Books, Records and Accounts
44
Section 6.15
Change of Name; Jurisdiction of Organization
44
Section 6.16
Separateness Covenants
44
Section 6.17
Value of Assets
45
Section 6.18
Agreements; Amendments
45
Section 6.19
Project Company Charge
45
   
ARTICLE 7 INDEMNIFICATION
46
Section 7.01
Indemnification
46
   
ARTICLE 8 MISCELLANEOUS PROVISIONS
47
Section 8.01
Amendments; Waivers
47

 
 
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Section 8.02
Governing Law; Waiver of Jury Trial; Submission to Jurisdiction
48
Section 8.03
Notices
49
Section 8.04
Severability of Provisions
51
Section 8.05
Counterparts; Facsimile Execution
51
Section 8.06
Successors and Assigns
51
Section 8.07
Assignment of Agreement
51
Section 8.08
No Petition
52
Section 8.09
Subordination
52
Section 8.10
Survival
52
Section 8.11
No Set-off
52
Section 8.12
Costs and Expenses
52
Section 8.13
Further Assurances
52
Section 8.14
Power of Attorney
53
Section 8.15
No Waiver; Remedies Cumulative
54
Section 8.16
Binding Effect
54
Section 8.17
Independence of Covenants
54
Section 8.18
Headings
54
   
SCHEDULE 1 SELLER NAME; JURISDICTION OF ORGANIZATION; ETC.
59

 
 
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ROYALTIES SALE AND CONTRIBUTION AGREEMENT
 
THIS ROYALTIES SALE AND CONTRIBUTION AGREEMENT (this “Agreement”) is dated as of
May 18, 2015 and is entered into by and between ISRAMCO, INC., a Delaware
corporation (the “Seller”), TAMAR ROYALTIES LLC, a Delaware limited liability
company (the “Borrower”) and DEUTSCHE BANK TRUST COMPANY AMERICAS, with respect
to Sections 8.07, 8.13 and 8.14 hereof , in its capacity as Collateral Agent
(the “Collateral Agent”), and with respect to Section 6.01 and Section 8.07
hereof, in its capacity as Facility Agent (the “Facility Agent”).
 
RECITALS:
 
WHEREAS, capitalized terms used and not defined in these Recitals shall have the
respective meanings set forth in Article 1 hereof;
 
WHEREAS, Isramco Negev 2, Limited Partnership (the “Project Company”)
transferred the Royalties to the Seller pursuant to certain Royalties Transfer
Agreements; and
 
WHEREAS, the parties hereto desire that: (a) the Seller sell, assign, transfer
and contribute (collectively, “Sell and Contribute”, and references herein to
“Sale and Contribution” shall be construed accordingly) all of its right, title
and interest in and to the Royalties and the Related Assets (collectively, the
“Royalties Receivables”) to the Borrower and (b) the Borrower purchase, acquire
and accept such Royalties and Related Assets from the Seller, in each case
pursuant to the terms of this Agreement; and
 
WHEREAS, the Borrower, the financial institutions from time to time parties
thereto as lenders (the “Lenders”), Deutsche Bank Trust Company Americas, as
facility agent (in such capacity together with any successor in such capacity,
the “Facility Agent”), the Collateral Agent, and Deutsche Bank AG, London
Branch, as Sole Lead Arranger (in such capacity, the “Arranger”) entered into
that certain Term Loan Credit Agreement, dated as of the date hereof (the
“Credit Agreement”), pursuant to which the Initial Lenders have agreed, subject
to the terms and conditions of the Credit Agreement, to make Loans to the
Borrower; and
 
WHEREAS, the Royalties Receivables purchased and contributed hereunder will be
pledged as collateral under the Security Agreement to secure the prompt and
complete performance in full by the Borrower of the Obligations; and
 
NOW, THEREFORE, in consideration of the mutual covenants herein contained, the
parties hereto agree as follows:
 
ARTICLE 1
DEFINITIONS; CONSTRUCTION
 
Section 1.01 Definitions.  As used in this Agreement, the following terms shall
have the following meanings:
 
“Account Bank” means Deutsche Bank Trust Company Americas.
 
 
 

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“Account Control Agreement” means the Securities Account Control Agreement,
dated on or prior to the Notice Date for the Initial Series, among the Borrower,
the Collateral Agent and the Account Bank.
 
“Additional Lender” means any party that becomes a Lender with respect to the
Additional Series upon the effectiveness of an Additional Series Joinder
Agreement in accordance with Section 2.03 of the Credit Agreement.
 
“Additional Series” means the additional Series of Loans satisfying the
requirements of Section 2.03(a) of the Credit Agreement.
 
“Additional Series Availability Period” means the period from the thirty-sixth
(36th) calendar month after the Initial Funding Date to the Maturity Date of the
Initial Series.
 
“Additional Series Joinder Agreement” means a joinder agreement in form and
substance reasonably acceptable to the Facility Agent, for its own account and
on behalf of the Required Lenders containing the interest rate, Applicable
Margin, Amortization Schedule, Maturity Date, Availability Period, required
percentages applicable to the Notional Hedge Amount Requirement for Hedge
Transactions and the Commitments of each of the Lenders, in each case, for such
Additional Series executed and delivered by the Borrower, the Lenders for the
Additional Series and the Facility Agent at least five (5) Business Days prior
to the initial Funding Date for the Additional Series, pursuant to which such
Lenders agree to be bound to the terms of the Credit Agreement, as amended or
supplemented by the terms of such Additional Series Joinder Agreement, and the
other applicable Credit Documents in accordance with Section 2.03(b)(xii) of the
Credit Agreement.
 
“Adjusted Libor Rate” means, for any Interest Period, an interest rate per annum
(rounded upwards, if necessary, to the next 1/16 of 1%) equal to (a) the Libor
Rate for such Interest Period multiplied by (b) the Statutory Reserve Rate.
 
“Adverse Proceeding” means any action, suit, proceeding (whether administrative,
judicial or otherwise), governmental investigation or arbitration at law or in
equity, or before or by any Governmental Authority whether pending or, to the
knowledge of the Seller, threatened in writing against or affecting the Seller
or any of its property, the Royalties Receivables or any Credit Document to
which the Seller is a party.
 
“Affected Party” means (a) any Lender, (b) Deutsche Bank Trust Company Americas,
in its individual capacity or in its capacity as the Facility Agent, the
Collateral Agent or the Account Bank, (c) with respect to each of the foregoing,
the parent company or holding company that controls such Person and (d) any of
the foregoing or any combination thereof (as the context requires).
 
“Affiliate” means, as to any Person, any other Person that, directly or
indirectly, controls, is controlled by or is under common control with such
Person or is a director or officer of such Person.
 
“Aggregate Transfer Value” has the meaning given to such term in Section 2.02.
 
 
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“Amortization Schedule” means (a) for the Initial Series, the amortization
schedule attached to the Credit Agreement as Schedule 1 and (b) for the
Additional Series, the amortization schedule attached to the Additional Series
Joinder Agreement.
 
“Anti-Corruption Laws” means all laws, rules, and regulations of any
jurisdiction applicable to the Borrower and/or its Affiliates concerning or
relating to bribery or corruption.
 
“Applicable Law” means, as to any Person: (a) the certificate of incorporation,
charter, by-laws, memorandum of association, articles of association or other
organizational or governing documents of such Person and (b) any statute, law,
executive order, decree, treaty, rule, regulation, decision, directive or
determination of a Governmental Authority, including the laws of the United
States of America and the Laws of the State of Israel, in each case applicable
to and legally binding upon such Person and/or any of its property or to which
such Person and/or any of its property is legally subject.
 
“Applicable Margin” means: (a) for the Initial Series 2.75% per annum and (b)
for the Additional Series, the applicable margin set forth in the Additional
Series Joinder Agreement.
 
“Application for Borrower Registration” means the application dated June 25,
2014, from the Seller, as transferor, and the Borrower, as transferee, to the
Petroleum Commissioner, Ministry of National Infrastructures, Energy and Water
Resources, for the approval of the transfer of the Royalties from the Seller to
the Borrower and the registration of the Borrower’s rights to the Royalties in
the Petroleum Register.
 
“Application for Collateral Agent Registration” means the application dated June
25, 2014, from the Borrower, as pledgor, and the Collateral Agent, as pledgee,
to the Petroleum Commissioner, Ministry of National Infrastructures, Energy and
Water Resources, for the approval of the grant of a first-priority Lien on the
Royalties by the Borrower in favor of the Collateral Agent, for the benefit of
the Secured Parties, and the registration of the Collateral Agent’s
first-priority Lien on the Royalties in the Petroleum Register.
 
“Application for Seller Registration” means the application for transfer and
request for registration dated October 20, 2013, from the Project Company, as
transferor, and the Seller, as transferee, to the Petroleum Commissioner,
Ministry of National Infrastructures, Energy and Water Resources, in the form
attached as Schedule 4 to the Credit Agreement.
 
“Arranger” has the meaning given to such term in the Recitals.
 
“Authorized Officer” means, as applied to any Person, any individual holding the
position of chairman of the board, chief executive officer, president, chief
financial officer, general counsel, treasurer or controller or other similar
officer of such Person who is duly authorized to act for such Person; provided
that, with respect to the Borrower “Authorized Officer” means any individual
holding the position of chairman of the board, chief executive officer,
president, chief financial officer, general counsel, treasurer or controller or
other similar officer of the Manager who is duly authorized to act on behalf of
the Borrower.
 
 
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“Availability Period” means (a) with respect to the Initial Series, the period
commencing on the Signing Date and ending on the twentieth (20th) Business Day
thereafter and (b) with respect to the Additional Series, the Additional Series
Availability Period.
 
“Bankruptcy Code” means Title 11 of the United States Code entitled
“Bankruptcy.”
 
“Board” means the Board of Governors of the Federal Reserve System of the United
States of America.
 
“Borrower” has the meaning given to such term in the introduction to this
Agreement.
 
“Borrower Business Day” means any day that is not a Saturday, Sunday or other
day on which commercial banks in New York, New York, Los Angeles, California or
Tel Aviv, Israel are authorized or required by law to remain closed.
 
“Borrower Indemnified Liabilities” has the meaning given to such term in Section
7.01.
 
“Borrower Indemnified Person” has the meaning given to such term in Section
7.01.
 
“Borrower Registration” means the registration of the Borrower’s rights to the
Royalties  in the Petroleum Register.
 
“Borrower’s Operating Agreement” means the Amended and Restated Limited
Liability Company Agreement dated as of May 18, 2015, among the Independent
Manager, the Manager, and the Seller.
 
“Business Day” means any day that is not a Saturday, Sunday or other day on
which commercial banks in New York, New York or Los Angeles, California are
authorized or required by law to remain closed, and, if the term "Business Day"
is used in connection with the Libor Rate, any such day on which dealings are
conducted between banks in the London interbank market.
 
“Calculation Date” means each Payment Date occurring on or after the date that
is three (3) calendar months following the Initial Funding Date; provided, that
for purposes of the  Historic DSCR to be calculated by reference to a twelve
(12) month Calculation Period, the "Calculation Date" means each Payment Date
occurring on or after the date that is twelve (12) calendar months following the
Initial Funding Date.
 
“Calculation Period” means, with respect to each Calculation Date:
 
(a)           in the case of the Historic DSCR: (i) the twelve (12) month period
preceding, and ending on (but excluding), such Calculation Date, (ii) the six
(6) month period preceding and ending on (but excluding), such Calculation Date,
and (iii) the three (3) month period preceding, and ending on (but excluding),
such Calculation Date;
 
(b)           in the case of the Forecast DSCR, each twelve (12) month period,
from (and including) such Calculation Date to (but excluding) the Latest
Maturity Date; provided, that the last such period shall be shortened, if
necessary, to end on (but exclude) the Latest Maturity Date; and
 
 
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(c)           in the case of the Loan Life Coverage Ratio, the period from (and
including) such Calculation Date to (but excluding) the Latest Maturity Date.
 
“Collateral” has the meaning specified in the Security Agreement.
 
“Collateral Agent” has the meaning given to such term in the Recitals.
 
“Collateral Agent Registration” means the registration of the Collateral Agent’s
Lien on the Royalties in the Petroleum Register.
 
“Commitment” means, as to any Lender: (a) with respect to the Initial Series,
(i) if such Lender is an Initial Lender, the amount set forth opposite such
Lender’s name on the signature pages of the Credit Agreement less, if
applicable, all amounts assigned by it pursuant to an Assignment and Assumption,
(ii) if such Lender is an assignee of an Initial Lender, the amount set forth
with respect to such assignee in its Assignment and Assumption from such Initial
Lender less, if applicable, all amounts assigned by it pursuant to another
Assignment and Assumption, and (iii) otherwise, zero, and (b) with respect to
the Additional Series, (i) if such Lender is an Additional Lender, the amount
set forth opposite such Lender’s name on the signature pages of the Additional
Series Joinder Agreement less, if applicable, all amounts assigned by it
pursuant to an Assignment and Assumption, (ii) if such Lender is an assignee of
an Additional Lender, the amount set forth with respect to such assignee in its
Assignment and Assumption from such Additional Lender less, if applicable, all
amounts assigned by it pursuant to another Assignment and Assumption, and (iii)
otherwise, zero.
 
“Contractual Obligation” has the meaning given to such term in Section 5.01(c).
 
“Contribution Amount” has the meaning given to such term in Section 2.02(a)(ii).
 
“control”, “controlled” and “under common control” of, by or with a Person means
the possession, direct or indirect, of the power to direct or cause the
direction of the management and policies of such Person, whether through the
ability to exercise voting power, by contract or otherwise.
 
“Control Agreement” has the meaning specified in the Security Agreement.
 
“Credit Agreement” has the meaning given to such term in the Recitals.
 
“Credit Documents” means this Agreement, the Credit Agreement, the Israeli
Security Agreement, the Security Agreement, the Account Control Agreement, the
Control Agreement (if any), the UCC Financing Statements, the filing and
registration in the Israeli Pledges Registry of the Collateral Agent’s Security
Interest in the Collateral, the Seller Security Agreement, the Servicing
Agreement, the Borrower’s Operating Agreement, the Subscription Agreement, the
Independent Manager Agreement, the Hedge Agreements, the Royalties Transfer
Agreements, the Royalties Payment Instruction, the Indemnity Agreement, the
Notes and any other instruments, certificates or documents entered into in
connection herewith or therewith or the transactions contemplated hereby or
thereby.
 
 
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“Default” means any Event of Default or any event that would constitute an Event
of Default but for the requirement that notice be given or time elapse or both.
 
“Defaulting Lender” means any Lender that: (a) has failed, within two (2)
Borrower Business Days of the date required to be funded or paid, to: (i) fund
any portion of its Loan or (ii) pay over to the Facility Agent or any other
Lender any other amount required to be paid by it hereunder, unless, in the case
of clause (i) above, such Lender notifies the Facility Agent in writing that
such failure is the result of such Lender’s good faith determination that a
condition precedent to funding (specifically identified and including the
particular default, if any) has not been satisfied, (b) has notified the
Borrower, the Facility Agent or any other Lender in writing, or has made a
public statement to the effect, that it does not intend or expect to comply with
any of its funding obligations under the Credit Agreement (unless such writing
or public statement indicates that such position is based on such Lender’s good
faith determination that a condition precedent (specifically identified and
including the particular default, if any) to funding a loan under the Credit
Agreement cannot be satisfied) or generally under other agreements in which it
commits to extend credit, (c) has failed, within three (3) Borrower Business
Days after request by the Facility Agent or any Lender, acting in good faith, to
provide a certification in writing from an authorized officer of such Lender
that it will comply with its obligations (and is financially able to meet such
obligations) to fund prospective Loans under the Credit Agreement; provided that
such Lender shall cease to be a Defaulting Lender pursuant to this clause (c)
upon such Lender’s or the Facility Agent’s receipt of such certification in form
and substance satisfactory to it or the Facility Agent, as the case may be, or
(d) has become the subject of an Insolvency Event.
 
“Designated Person” means any Person listed on a Sanctions List.
 
“Discount Rate” means, for the relevant Calculation Period, the weighted average
(by amount of principal outstanding) of the interest rates, calculated in
accordance with clause (b) of the definition of Loan Service Amount, at which it
is assumed that interest on all Loans will accrue until the Latest Maturity
Date.
 
“Dollars” and the sign “$” mean the lawful money of the United States.
 
“Eligible Hedge Counterparty” means a Hedge Counterparty that (i)(a) has a
long-term unsecured, non-credit enhanced debt rating of not less than “A-” by
Fitch and “A3” by Moody’s (or has its obligations under the relevant Hedge
Agreement guaranteed by another Person that has such ratings pursuant to a
guaranty in form and substance satisfactory to the Facility Agent) and (b) is
incorporated or otherwise organized in a country with diplomatic relations with
the State of Israel or (ii) is Mizrahi Tefahot Bank Ltd.
 
“ERISA” means the Employee Retirement Income Security Act of 1974, as amended
from time to time, and the regulations promulgated and rulings issued
thereunder.
 
 
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“ERISA Affiliate” means any Person that for purposes of Title IV of ERISA is a
member of the Seller’s controlled group, or under common control with the
Seller, within the meaning of Section 414 of the Internal Revenue Code.
 
“ERISA Event” means (a)(i) the occurrence of a reportable event, within the
meaning of Section 4043 of ERISA, with respect to any Plan unless the 30 day
notice requirement with respect to such event has been waived by the PBGC, or
(ii) the requirements of subsection (1) of Section 4043(b) of ERISA (without
regard to subsection (2) of such Section) are met with respect to a contributing
sponsor, as defined in Section 4001(a)(13) of ERISA, of a Plan, and an event
described in paragraph (9), (10), (11), (12) or (13) of Section 4043(c) of ERISA
is reasonably expected to occur with respect to such Plan within the following
30 days; (b) the application for a minimum funding waiver with respect to a
Plan; (c) the provision by the administrator of any Plan of a notice of intent
to terminate such Plan pursuant to Section 4041(a)(2) of ERISA (including any
such notice with respect to a plan amendment referred to in Section 4041(e) of
ERISA); (d) the cessation of operations at a facility of the Seller or any ERISA
Affiliate in the circumstances described in Section 4062(e) of ERISA; (e) the
withdrawal by the Seller or any ERISA Affiliate from a Multiple Employer Plan
during a plan year for which it was a substantial employer, as defined in
Section 4001(a)(2) of ERISA; (f) the conditions for the imposition of a lien
under Section 303(k) of ERISA shall have been met with respect to any Plan; or
(g) the institution by the PBGC of proceedings to terminate a Plan pursuant to
Section 4042 of ERISA, or the occurrence of any event or condition described in
Section 4042 of ERISA that constitutes grounds for the termination of, or the
appointment of a trustee to administer, a Plan.
 
“Event of Default” has the meaning given to such term in Section 7.01 of the
Credit Agreement.
 
“Excluded Property” means all of the Borrower’s right, title and interest in, to
and under the Intercompany Loan, the Intercompany Loan Agreement and the I/C
Loan Account, including all of the Borrower’s rights to any distributions,
payments, monies, income, proceeds, collections, and all other property and
property or other rights arising from and from time to time, due or to become
due, received, receivable, paid or payable thereunder or in respect of all of
the foregoing property.
 
“Facility Account” means the “securities account” (as defined in Section 8-501
of the UCC) established by the Borrower and maintained with the Account Bank, as
“securities intermediary” (as defined in Section 8-102 of the UCC), into which
the payments and proceeds of all Royalties Receivables and all other Collateral
shall be directed to be paid, including pursuant to the Royalties Payment
Instruction.
 
“Facility Agent” has the meaning given to such term in the Recitals.
 
“Financial Model” means the financial model provided by the Borrower, based on
the Project Company Forecast Model, and approved by the Arranger prior to the
Signing Date, as the same may be amended from time to time by the Borrower with
the approval of the Arranger.
 
 
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“Fixed/Floating Rate Swap” means an interest rate hedge transaction pursuant to
a Hedge Agreement under which, on each Payment Date, the Borrower agrees to make
fixed payments to the Hedge Counterparty thereunder and receive therefrom
floating rate payments based on the Adjusted Libor Rate.
 
“Forced Transfer” means a forced transfer of the interest of the Project Company
in, under and pursuant to the Lease, and any rights granted thereunder, pursuant
to the Joint Operating Agreement because of a waiver by the Project Company of
the Petroleum Assets or its abandonment thereof or because of a forfeiture of
the Petroleum Assets as a result of a delay in payment by the Project Company or
a transfer to the partners who continue operations in accordance with the
provisions of the Joint Operating Agreement.
 
“Forecast DSCR” means, for each Calculation Period, the ratio of:
 
(a) the Projected Royalty Flows for such period;
 
to
 
(b) the Loan Service Amount forecast for such period;
 
for the avoidance of doubt, to the extent there is more than one Calculation
Period from the date on which the Forecast DSCR is calculated to (but excluding)
the Latest Maturity Date, there will be multiple Forecast DSCRs - one for each
such Calculation Period, and any reference to “the Forecast DSCR” is a reference
to each and all such Forecast DSCRs.
 
“Funding Date” means, with respect to a Series, the date on which the Loans of
such Series are funded to the Borrower in the manner specified in Section 2.01
of the Credit Agreement, which date shall be a Borrower Business Day during the
Availability Period for such Series.
 
“GAAP” means, subject to the limitations on the application thereof set forth in
Section 1.02 of the Credit Agreement, United States generally accepted
accounting principles in effect from time to time.
 
“Governmental Authority” means the government of the United States of America,
the State of Israel, any other nation or nations, or any political subdivision
of any thereof, whether state, local or regional, and any agency, ministry,
branch, department, subdivision, authority, instrumentality, regulatory body,
court, central bank or other entity exercising executive, legislative, judicial,
taxing, regulatory or administrative powers or functions of or pertaining to
government, including any supra-national bodies such as the European Union or
the European Central Bank.
 
“Hedge Agreement” means an agreement between the Borrower and a Hedge
Counterparty that governs one or more Hedge Transactions entered into pursuant
to and in compliance with the terms of Section 2.12 of the Credit Agreement: (a)
which agreement shall consist of a “Master Agreement” in a form published by the
International Swaps and Derivatives Association, Inc., together with a
“Schedule” thereto and one or more “Confirmations” thereunder confirming the
specific terms of each such Hedge Transaction, (b) the Hedge Counterparty to
which agreement is, at the time such agreement is entered into, an Eligible
Hedge Counterparty, (c) which shall require that all payments to be made by the
Hedge Counterparty thereunder or in connection therewith are to be made to the
Facility Account, and (d) the form and substance of which has been approved by
the Facility Agent.
 
 
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“Hedge Breakage Costs” means, for any Hedge Transaction, any amount payable by
the Borrower upon the early termination (in whole or in part) of that Hedge
Transaction.
 
“Hedge Counterparty” means a counterparty that enters into a Hedge Transaction
with the Borrower.  Each Hedge Counterparty must be an Eligible Hedge
Counterparty at the time the relevant Hedge Transaction is entered into.
 
“Hedge Transaction” means each interest rate hedge transaction, including any
Fixed/Floating Rate Swap, Rate Cap or other hedge transaction acceptable to the
Facility Agent, between the Borrower and a Hedge Counterparty that is entered
into pursuant to Section 2.12 of the Credit Agreement and is governed by a Hedge
Agreement: (a) the Hedge Counterparty to which, at the time such Hedge Agreement
is entered into (i) is an Eligible Hedge Counterparty and (ii) if not already a
party to this Agreement, has executed and delivered to the Facility Agent an
agreement in form and substance reasonably acceptable to the Facility Agent
pursuant to which such Hedge Counterparty agrees to be bound to the terms of
this Agreement and the other applicable Credit Documents, (b) a copy of which
Hedge Agreement has been delivered to each of the Lenders and (c) the form and
substance of which Hedge Agreement has been approved by the Facility Agent.
 
“Historic DSCR” means, for each Calculation Period, the ratio of:
 
(a)           the actual amount paid into the Facility Account from Royalties
during such period;
 
to
 
(b)           the actual Loan Service Amount for such Calculation Period.
 
“I/C Loan Account” means the deposit account that may be established and
maintained with a depositary account in accordance with the Credit Documents and
which shall (i) consist of no amounts other than those under or in respect of
the Intercompany Loan and the Intercompany Loan Agreement and (ii) not at any
time be subject to (A) a control agreement among, inter alia, the Borrower or
any Person or (B) the Collateral Agent’s Security Interest or any other security
interest or Lien of the Collateral Agent or any other Person.
 
“In Kind Royalties” means the right to receive in kind all or a part of the oil
and/or gas and/or other valuable substances that will be produced and derived
from the Lease.
 
“Indebtedness” of any Person means, without duplication: (a) all indebtedness of
such Person for borrowed money, (b) all obligations of such Person for the
deferred purchase price of property or services (other than trade payables
incurred in the ordinary course of such Person’s business), (c) all obligations
of such Person evidenced by notes, bonds, debentures or other similar
instruments, (d) all obligations of such Person created or arising under any
conditional sale or other title retention agreement with respect to property
acquired by such Person (even though the rights and remedies of the seller or
lender under such agreement in the event of default are limited to repossession
or sale of such property), (e) all obligations of such Person as lessee under
leases that have been or should be, in accordance with GAAP, recorded as capital
leases, (f) all non-contingent obligations of such Person in respect of
acceptances, letters of credit or similar extensions of credit, (g) all
Indebtedness of others referred to in clauses (a) through (f) above or clause
(h) below (collectively, "Guaranteed Indebtedness") guaranteed directly or
indirectly in any manner by such Person, or in effect guaranteed directly or
indirectly by such Person through an agreement (i) to pay or purchase such
Guaranteed Indebtedness or to advance or supply funds for the payment or
purchase of such Guaranteed Indebtedness, (ii) to purchase, sell or lease (as
lessee or lessor) property, or to purchase or sell services, primarily for the
purpose of enabling the debtor to make payment of such Guaranteed Indebtedness
or to assure the holder of such Guaranteed Indebtedness against loss, (iii) to
supply funds to or in any other manner invest in the debtor (including any
agreement to pay for property or services irrespective of whether such property
is received or such services are rendered) or (iv) otherwise to assure a
creditor against loss, and (h) all Indebtedness referred to in clauses (a)
through (g) above (including Guaranteed Indebtedness) secured by (or for which
the holder of such Indebtedness has an existing right, contingent or otherwise,
to be secured by) any Lien on property (including, without limitation, accounts
and contract rights) owned by such Person, even though such Person has not
assumed or become liable for the payment of such Indebtedness.
 
 
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“Indemnitee” means each Affected Party, their Affiliates and their respective
officers, partners, directors, trustees, employees and agents subject to Section
8.09(b) of the Credit Agreement.
 
“Indemnity Agreement” means the Indemnity Agreement, dated the Signing Date,
among the Indemnity Provider, the Collateral Agent and the Borrower.
 
“Indemnity Provider” means I.O.C-Israel Oil Company, Ltd., a private limited
company formed under the laws of Israel.
 
“Independent Manager” means Donald J. Puglisi of Puglisi & Associates, 850
Library Avenue Suite 204, Newark, DE 19711.
 
“Independent Manager Agreement” means the letter agreement dated December 6,
2013, and made between the Seller and the Independent Manager.
 
“Independent Manager Fees” means the fees payable to the Independent Manager
under the Independent Manager Agreement.
 
“Initial Funding Date” means the Funding Date of the Initial Series.
 
“Initial Lenders” mean the banks, financial institutions and other institutional
lenders listed on the signature pages of the Credit Agreement as of the date
thereof.
 
“Initial Series” means the Series of loans advanced by the Initial Lenders
pursuant to Section 2.02 of the Credit Agreement during the Availability Period
applicable thereto.
 
 
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“Insolvency Event” means, with respect to any Person, such Person becomes the
subject of a bankruptcy or insolvency proceeding, or has had a receiver,
conservator, trustee, administrator, custodian, assignee for the benefit of
creditors or similar Person charged with the reorganization or liquidation of
its business appointed for it, or, in the good faith determination of the
Facility Agent, has taken any action in furtherance of, or indicating its
consent to, approval of, or acquiescence in, any such proceeding or appointment;
provided that an Insolvency Event shall not result solely by virtue of any
ownership interest, or the acquisition of any ownership interest, in such Person
by a Governmental Authority or any instrumentality thereof, so long as that such
ownership interest does not result in or provide such Person with immunity from
the jurisdiction of courts within the United States or from the enforcement of
judgments or writs of attachment on its assets or permit such Person (or such
Governmental Authority or instrumentality) to reject, repudiate, disavow or
disaffirm any contracts or agreements made by such Person.
 
“Intercompany Loan” means a loan in the maximum principal amount of up to
$108,000,000 from the Borrower to the Seller pursuant to the Intercompany Loan
Agreement.
 
“Intercompany Loan Agreement” means, collectively, the loan agreement dated May
18, 2015, between the Borrower and the Seller and the confirmation related
thereto, in each case in the form attached as Exhibit H to the Credit Agreement
pursuant to which the Borrower may elect, subject to the terms and conditions
therein, to make the Intercompany Loan to the Seller, without giving effect to
any amendments, waivers, assignments or other modifications made without the
consent of the Facility Agent.
 
“Interest Period” means, with respect to each Loan, an interest period (a)
initially, commencing on and including the Funding Date of such Loan and ending
on but excluding the first Payment Date thereafter and (b) thereafter,
commencing on and including each Payment Date and ending on and excluding the
immediately succeeding Payment Date.
 
“Internal Revenue Code” means the Internal Revenue Code of 1986, as amended from
time to time, and the regulations promulgated and rulings issued thereunder.
 
“Investment Repayment Date” means the date after the signing of the Transfer of
Rights Agreement on which the Net Receipts that the Project Company has received
or is entitled to receive for oil and/or gas and/or other valuable substances
that will be derived and extracted from the petroleum assets of the Negev 2
Venture, when they are calculated in Dollars (at the representative rate
published by the Bank of Israel), will reach an amount equal to the full value
of all of the Project Company’s Expenses in the Negev 2 Venture when they are
calculated in Dollars (at the representative rate published by the Bank of
Israel) plus US $750,000.
 
“Israeli Collateral” has the meaning specified in the Israeli Security
Agreement.
 
“Israeli Security Agreement” means the Israeli Pledge, Assignment and Security
Agreement, dated on or prior to the Notice Date for the Initial Series, between
the Borrower and the Collateral Agent.
 
“Israeli Tax Ruling” means the tax ruling issued by the Israeli Tax Authority on
February 2, 2015 (Application No. 20149027), as supplemented by (i) the
Clarification of Taxation Decision issued by the Israeli Tax Authority on March
20, 2015 (Reference: 20150357) and (ii) the e-mail dated April 14, 2014 from
Zvika Barel, manager of the M&A department in the Israel Tax Authority.
 
 
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“January 2001 Minutes” means the resolution of the general meeting of the
holders of the Project Company’s participation units as of January 2, 2001
relating to the Project Company’s undertaking to grant royalties from the
“Matan” and “Michal” licenses or any petroleum asset that will replace them to
Isramco Oil and Gas Ltd.
 
“Joint Operating Agreement” means the Joint Operating Agreement dated 16
November 1999 among BG International Limited (“BG”), Mashav Initiating and
Development Ltd. (“Mashav”), Dor Chemicals Ltd. (“Dor”), Israel Petrochemical
Enterprises Ltd. (“IPE”) and Middle East Energy Limited Partnership (to which
the Project Company became party by means of an Earn-In Agreement dated
14 December 2000), as amended by: (a) a Novation Agreement dated December 2000,
between BG, the Project Company, I.N.O.C. Dead Sea Limited Partnership (“INOC”),
Naptha Exploration Limited Partnership (“Naptha”), Mashav, Dor and IPE, (b) a
letter agreement dated 1 April 2001 among Clal Industries and Energy Ltd.,
Mashav, Dor, IPE, STX (2000) – Limited Partnership (“STX”), INOV, the Project
Company, Naptha, Granite Hacarmel (G.H.A.) Petroleum Ltd. And Granite-Sonol Oil
and Gas Drilling L.P., (c) a Novation Agreement dated 6 April 2005 among BG,
Dor, the Project Company, STX and DOR Gas Explorations Limited Partnership
(“DorGas”), (d) a Novation Agreement dated 24 July 2006 among the Project
Company, Delek Drilling Limited Partnership (“Delek”), Avner Oil Exploration
Limited Partnership (“Avner”), STX, DorGas and Noble Energy Mediterranean Ltd.
(“Noble”), and (e) an Amendment Agreement dated 14 April 2011 by and between
Noble, the Project Company, Avner, Delek and DorGas.
 
“Latest Maturity Date” means, at any date of determination, the latest Maturity
Date applicable to any Series hereunder at such time.
 
“Lease” means the lease for the exploration and production of petroleum and
natural gas No. I/12 "Tamar" granted by the Petroleum Commissioner under Section
26 of the Petroleum Law and registered on the Petroleum Register on December 3,
2009.
 
“Lenders” means the Initial Lenders, the Additional Lenders, and each Person
that shall become a party hereto in one of such capacities pursuant to an
Assignment and Assumption in accordance with to Section 9.07(b) of the Credit
Agreement.
 
“Letter of Assignment” means the irrevocable letter of assignment of December
31, 2007 pursuant to which Isramco Oil and Gas Ltd. assigned its rights to the
Royalties B to the Seller.
 
“Libor Rate” means for any Loan (or portion thereof) for any Interest Period,
the rate per annum determined by the Facility Agent by reference to the display
page of Bloomberg designated as ICE LIBOR USD (or such other page as may replace
that page) as of 11:00 a.m. (London time) for deposits in Dollars for a period
comparable to such Interest Period, two (2) Business Days prior to the first day
of such Interest Period; provided that: (a) if such rate is not available at
such time for any reason, then the Facility Agent shall request quotes from each
of the Reference Banks of the rate at which it offers deposits in Dollars at
approximately 11:00 a.m., London time, on the second Business Day before the
first day of the related Interest Period, in the interbank market for a term
comparable to such Interest Period and in an amount comparable to the applicable
principal amount of the Loan, and the “Libor Rate” shall be the rate per annum
equal to the average (rounded upward to the nearest 1/16th of 1%) of the rates
of each of the Reference Banks that provided a quote thereof to the Facility
Agent and (b) the Libor Rate shall be subject to linear interpolation for any
Interest Period that is longer or shorter than three (3) months.
 
 
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“Lien” means: (a) any lien, mortgage, pledge, assignment, security interest,
charge or encumbrance of any kind (including any agreement to give any of the
foregoing, any conditional sale or other title retention agreement, and any
lease in the nature thereof) and any option, trust or other preferential
arrangement having the practical effect of any of the foregoing, and (b) in the
case of Securities, in addition to the foregoing, any purchase option, call or
similar right of a third party with respect to such Securities.
 
“Limited Partnership Agreement” means an agreement that was signed on March 2
and 3, 1989, between Isramco Oil and Gas Ltd., as general partner, and Isramco
(Management) 1988 Ltd., as limited partner, with regard to the founding of a
limited partnership, Isramco – Negev 2, to engage in oil explorations within the
framework of the Negev 2 Venture.
 
“Loan” means a loan by a Lender to the Borrower pursuant to the Credit
Agreement.
 
“Loan Life Coverage Ratio” means, for each Calculation Period, the ratio of:
 
(a)           the sum of: (i) the net present value of the Projected Royalty
Flows (calculated in accordance with the Financial Model) for such period,
discounted using the Discount Rate and (ii) the amount on deposit in the Reserve
Account, after deducting all amounts paid or due to be paid therefrom and
without counting any amounts paid or due to be paid thereto, on the relevant
Calculation Date,
 
to
 
(b)           the sum of: (i) the aggregate outstanding principal amount of all
Loans and (ii) the aggregate outstanding, undrawn amount of all Commitments, on
the relevant Calculation Date.
 
“Loan Service Amount” means, as of the applicable Payment Date and for the
applicable Calculation Period, an amount equal to the sum of:
 
(a)           the aggregate amount of principal paid or due to be paid by the
Borrower in respect of all Loans during such period (assuming for each Loan that
has not been accelerated on or prior to such period, principal payments of each
Loan to be paid in accordance with the applicable Amortization Schedule in
effect on such Payment Date);
 
(b)           the aggregate amount of interest paid or due to be paid by the
Borrower on all Loans during the such period, calculated for each Loan at (i)
with respect to the portion of such Loan that is not hedged pursuant to either a
Rate Cap or Fixed/Floating Rate Swap under Section 2.12 of the Credit Agreement,
the rate that appears on Bloomberg Screen FWCV (or any successor screen on the
Bloomberg service or any successor service) on the respective date of
determination under the caption “Spot” under the "Horizon Curve" tab for a tenor
equal to (or, if the precise term is not available on such screen, the term most
closely equal to) the length of the period from and including such Payment Date
to but excluding the applicable Maturity Date (specifying a currency of Dollars
and such Payment Date as the relevant spot and settlement dates and using a
coupon and mid-point pricing and taking into account the applicable Amortization
Schedule), subject to linear interpolation where the term available on such
screen is not precisely equal to such period; (ii) with respect to the portion
of such Loan that is hedged in accordance with Section 2.12 of the Credit
Agreement pursuant to a Rate Cap, the lesser of (A) the interest rate at which
such interest is hedged in accordance with Section 2.12 of the Credit Agreement
under such Rate Cap and (B) the rate that appears on Bloomberg Screen FWCV (or
any successor screen on the Bloomberg service or any successor service) on the
respective date of determination under the caption “Spot” under the "Horizon
Curve" tab for a tenor equal to (or, if the precise term is not available on
such screen, the term most closely equal to) the length of the period from and
including such Payment Date to but excluding the applicable Maturity Date
(specifying a currency of Dollars and such Payment Date as the relevant spot and
settlement dates and using a coupon and mid-point pricing and taking into
account the applicable Amortization Schedule), subject to linear interpolation
where the term available on such screen is not precisely equal to such period;
and (iii) with respect to the portion of such Loan that is hedged in accordance
with Section 2.12 of the Credit Agreement pursuant to a Fixed/Floating Rate
Swap, the fixed rate payable by the Borrower under such Fixed/Floating Rate
Swap;
 
 
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(c)           the aggregate amount of all fees, expenses, Hedge Breakage Costs
and all other amounts paid or due to be paid by the Borrower to a Hedge
Counterparty under the Credit Documents during such period;
 
(d)           the aggregate amount of all Royalties-related Taxes paid or due to
be paid under the Credit Agreement during such period;  and
 
(e)           the aggregate amount of all Servicing Fees, Independent Manager
Fees, and all other fees, costs, expenses, indemnities, Taxes paid or due to be
paid by the Borrower under the Credit Documents and, without duplication of any
of the foregoing, all other Obligations and other amounts paid or due to be paid
by the Borrower under the Credit Documents during such period (assuming, for
each such amount due to be paid that is subject to a cap, payment in the amount
of the cap).
 
“Manager” means N.M.A. Energy Resources Ltd., an Israeli company, in its
capacity as “Manager” pursuant to the terms of the Borrower’s Operating
Agreement.
 
“Market Value Royalties” means the right to receive the market value, in Dollars
or (if pursuant to law it is only possible to pay in Israeli currency), in
Israeli currency which is calculated in Dollars according to the representative
rate of the Dollar at the time of actual payment, at the wellhead, of the
royalties due in respect of the Lease.
 
“Material Adverse Effect” means a material adverse effect on: (a) the business,
operations, properties, assets, actual or contingent liabilities, financial
condition or prospects of the Borrower, (b) the Royalties Receivables, the
Seller Collateral or any other Collateral, including, the validity,
enforceability, priority, identifiability or collectability thereof (in each
case, including in favor of the Collateral Agent, for the benefit of the Secured
Parties), (c) the rights, remedies or benefits of the Secured Parties under any
Credit Document or in the Collateral or the Seller Collateral, (d) the ability
of the Borrower to pay any of its Obligations, (e) the ability of any party
thereto to fully and timely perform its material obligations under or otherwise
comply in all material respects with any Credit Document to which it is a party
or (f) the legality, validity, binding effect, or enforceability against the
Borrower, the Seller, the Servicer, the Manager or the Project Company of any
Credit Document to which it is a party; provided that, following the Project
Company’s sale, assignment or transfer of all or any part of the Lease, its
property that is the subject of the Lease or its rights under the Lease: (i) the
failure of the Royalties Payment Instruction to be legal, valid, binding, or
enforceable against the Project Company shall not be a “Material Adverse Effect”
if the purchaser, assignee or transferee thereof, the Seller, the Borrower and
the Collateral Agent have entered into a new legal, valid, binding, and
enforceable agreement substantially similar to the Royalties Payment Instruction
obligating such purchaser to pay the Royalties directly to the Facility Account
and (ii) a material adverse effect on the legality, validity, binding effect, or
enforceability against such purchaser, assignee or transferee of such new
agreement shall be a “Material Adverse Effect”.
 
 
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“Maturity Date” means the earlier of: (a)(i) with respect to the Loans of the
Initial Series, the seventh (7th) anniversary of the Initial Funding Date and
(ii) with respect to the Loans of the Additional Series, the maturity date
specified therefor in the Additional Series Joinder Agreement and (b) any other
date on which the Loans are declared immediately due and payable or
automatically become due and payable pursuant to Section 7.01 of the Credit
Agreement; provided, that if any such day is not a Business Day, the "Maturity
Date" shall be the next succeeding Business Day unless such next succeeding
Business Day would fall in the next calendar month, in which case, the "Maturity
Date" shall be the next preceding Business Day.
 
“Member” means Isramco, Inc. and any successor thereto pursuant to the terms of
the Borrower’s Operating Agreement, but does not include any Person that has
ceased to be a Member of the Borrower pursuant to Section 9 thereof.
 
“Moody’s” means Moody’s Investors Service, Inc.
 
“Multiemployer Plan” means a multiemployer plan, as defined in Section
4001(a)(3) of ERISA, to which the Seller or any ERISA Affiliate is making or
accruing an obligation to make contributions, or has within any of the preceding
five plan years made or accrued an obligation to make contributions.
 
“Multiple Employer Plan” means a single employer plan, as defined in Section
4001(a)(15) of ERISA, that (a) is maintained for employees of the Seller or any
ERISA Affiliate and at least one Person other than the Seller and the ERISA
Affiliates or (b) was so maintained and in respect of which the Seller or any
ERISA Affiliate could have liability under Section 4064 or 4069 of ERISA in the
event such plan has been or were to be terminated.
 
“Negev 2 Venture” means a venture between the participants whose names are set
out in Annex A of the Limited Partnership Agreement with regard to oil and gas
exploration operations in the area of license 224 (Negev-Ashkelon) and in the
areas of the preliminary permits with a priority right to receive license 102
(Negev-Yam), 103 (Negev-North) and 104 (Negev South) and other agreed areas.
 
 
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“Net Receipts” means the value of all the receipts for oil and/or gas and/or
other valuable substances that will be derived and extracted from the petroleum
assets of the Negev 2 Venture after deduction of all the expenses of producing
them and royalties that were paid in respect of them.
 
“Non-Israeli Applicable Law” means, as to any Person, any statute, law,
executive order, decree, treaty, rule, regulation, decision, directive or
determination of any Governmental Authority, other than the State of Israel or
any political subdivision thereof or any agency, ministry, branch, department,
subdivision, authority, instrumentality, regulatory body, court, central bank or
other entity exercising executive, legislative, judicial, taxing, regulatory or
administrative powers or functions of or pertaining to government thereof, in
each case applicable to and legally binding upon such Person and/or any of its
property or to which such Person and/or any of its property is legally subject.
 
“Note” means, for a Series, each promissory note of the Borrower payable to the
order of a Lender, delivered pursuant to a request made under Section 2.04(d) of
the Credit Agreement in substantially the form of Exhibit A to the Credit
Agreement, evidencing the aggregate indebtedness of the Borrower to such Lender
resulting from the Loans of such Series made by such Lender.
 
“Notional Hedge Amount Requirement” means the requirement that: (a) in the case
of the Initial Series, for any date on or after the Initial Funding Date, there
are Hedge Transactions in effect (with respect to the Loans of such Series) that
have an aggregate scheduled amortizing notional amount for such date, each
Payment Date thereafter and the applicable Maturity Date that reflects at least
75.00%, and no more than 100.00%, of the estimated aggregate outstanding
principal balance of the Loans of such Series as of such date, each such
subsequent Payment Date and the applicable Maturity Date, as determined by the
Borrower and approved by the Facility Agent; provided that the aggregate
scheduled amortizing notional amount of all such Hedge Transactions that are
Rate Caps in effect with respect to the Loans of such Series may not, as of such
date, any subsequent Payment Date or the applicable Maturity Date, exceed 50% of
the aggregate scheduled amortizing notional amount of all Hedge Transactions in
effect with respect to the Loans of such Series as of such dates, in each case
as determined by the Borrower and approved by the Facility Agent, and (b) in the
case of the Additional Series, for any date on or after the initial Funding Date
therefor, the Hedge Transactions in effect with respect to the Loans of such
Series have an aggregate amortizing notional amount for such date, each Payment
Date thereafter and the applicable Maturity Date, that reflects the percentages,
including any applicable percentages with respect to Fixed/Floating Rate Swaps
and Rate Caps with respect to the Loans of such Series, to be agreed upon by the
Borrower and the Facility Agent and specified in the Additional Series Joinder
Agreement (which percentage in respect of all such Hedge Transactions shall in
no event be more than 100.00%) of the estimated aggregate outstanding principal
balance of the Loans of such Series as of such date, each such subsequent
Payment Date and the applicable Maturity Date, as determined by the Borrower and
approved by the Facility Agent.
 
 
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“Obligations” means all present and future indebtedness and other liabilities
and obligations (howsoever created, arising or evidenced, whether direct or
indirect, absolute or contingent, or due or to become due) of the Borrower to
the Facility Agent, the Collateral Agent, the Lenders, any Hedge Counterparty,
the Servicer, the Account Bank, any Indemnitee and/or any other Secured Party,
arising under or in connection with the Credit Agreement or any other Credit
Document or the transactions contemplated hereby or thereby and shall include
all liability for principal of the Loans, interest on the Loans, fees, costs,
expenses, reimbursements, Taxes paid or due to be paid by the Borrower under the
Credit Documents, indemnifications, and other amounts due or to become due under
the Credit Documents, including any such obligations that accrue after the
commencement of a bankruptcy, insolvency or similar proceeding (in each case
whether or not allowed as a claim in such proceeding).
 
“OFAC” means the Office of Foreign Assets Control of the U.S. Department of
Treasury.
 
“Organizational Documents” means (a) with respect to any corporation, its
memorandum of association and its articles of association, certificate or its
articles of incorporation or organization and its bylaws, as applicable, (b)
with respect to any limited partnership, its certificate of limited partnership
and its limited partnership agreement, (c) with respect to any general
partnership, its partnership agreement, and (d) with respect to any limited
liability company, its certificate of formation and its operating agreement.  In
the event any term or condition of this Agreement or any other Credit Document
requires any Organizational Document to be certified by a secretary of state or
similar governmental official, the reference to any such "Organizational
Document" shall only be to a document of a type customarily certified by such
governmental official.
 
“Payment Date” means the first (1st) day of each January, April, July and
October, and the applicable Maturity Date or, if any such day is not a Business
Day, the next succeeding Business Day.
 
“Person” means an individual, partnership, corporation (including a business
trust), joint stock company, trust, unincorporated association, joint venture,
limited liability company or other entity, or a government or any political
subdivision or agency thereof.
 
“Petroleum Commissioner” means the Petroleum Commissioner of the Ministry of
National Infrastructures, Energy and Water Resources of Israel.
 
“Petroleum Law” means the Petroleum Law 5712-1952 of the State of Israel.
 
“Petroleum Register” means the register handled in accordance with Section 62 of
the Petroleum Law.
 
“Plan” means a Single Employer Plan or a Multiple Employer Plan.
 
“Project” means the development, financing, installation and operation by the
Persons party from time to time to the Joint Operating Agreement of the Tamar
natural gas field offshore Israel.  For the avoidance of doubt, no floating
liquefied natural gas installations are included in the definition of “Project”.
 
 
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“Project Account Bank” means Mizrahi Tefahot Bank Ltd.
 
“Project Company” means Isramco Negev 2 Limited Partnership, and any permitted
successor or assign.
 
“Project Company Forecast Model” means the financial model published by the
Project Company from time to time using the base case assumptions set forth
therein.
 
“Project Company’s Expenses in the Negev 2 Venture” means all of the expenses
that the Project Company paid and/or is liable to pay within the framework of
the Negev 2 Venture pursuant to the Negev 2 venture agreements and as payments
to the Seller for a share of the seismic information in accordance with the
Transfer of Rights Agreement, pursuant to clause 4.1 thereof, but excluding
expenses (up to Net Receipts) that were deducted from the (gross) value of the
receipts for the purpose of determining the Net Receipts.
 
“Projected Royalty Flows” means, as of the applicable Payment Date and for the
applicable Calculation Period, that portion of the monies projected under the
Financial Model to be received by the Borrower in respect of Royalties
Receivables (after deducting all expenses, payments, Statutory Royalties, Taxes
and any other amounts that are required or permitted to be netted from or paid
senior to the Royalties Receivables) during such period.
 
“Rate Cap” means an interest rate hedge transaction pursuant to a Hedge
Agreement under which the Borrower agrees to make an upfront payment to the
Hedge Counterparty thereunder and to receive from such Hedge Counterparty, by
direct payment to the Facility Account, a payment on each Payment Date to the
extent, and in the amount by which, the Adjusted Libor Rate exceeds 2.50%.
 
“Recharacterization” has the meaning given to such term in Section 3.01.
 
“Records” means documents, books, records, accounts, files, invoices and other
materials and information (including computer programs, discs, data processing
software and related property and rights) relating to the Royalties Receivables.
 
“Reference Banks” means the principal London offices of Deutsche Bank AG and
Citibank, N.A. or such other bank(s) as may be appointed by the Facility Agent
in consultation with the Borrower.
 
“Related Assets” means all of the Seller’s rights, title, interests, remedies,
claims, powers and privileges in, to and under (i) the Royalties and (ii) the
Royalties Transfer Agreements in respect of the Royalties, including:
 
(a) all distributions, payments, monies, collections and other property or
proceeds from time to time due or to become due, received, receivable, paid or
payable thereunder or in respect thereof or in exchange therefor;
 
(b) all claims of the Seller for breach, default or damages thereunder or with
respect thereto;
 
 
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(c) all rights of the Seller to receive monies and other proceeds of any
insurance, indemnity, warranty or guaranty thereunder or in respect thereof;
 
(d) all rights of the Seller to compel performance and otherwise exercise and
enforce all rights, remedies, powers and privileges thereunder or in respect
thereof;
 
(e) all rights of the Seller to agree, deny, give or withhold any consents,
requests, notices, demands, directions, approvals, assignments, extensions,
amendments, terminations or waivers under or with respect thereto;
 
(f) all property and assets (whether real or personal and whether tangible or
intangible) from time to time securing or purporting to secure the obligations
or payment of monies due or to become due to the Seller thereunder or pursuant
thereto;
 
(g) all Liens on any property described in clause (f), together with all UCC
financing statements and any other filings, recordings and registrations
covering such property;
 
(h) all Records in respect thereof and any of the rights or property described
in the foregoing clauses;
 
(i) all substitutions for and replacements of the Royalties or any of the rights
or property described in the foregoing clauses;
 
(j) all present and future claims, demands, causes and choses in action in
respect thereof or of any or all of the rights or property described in the
foregoing clauses; and
 
(k) all products, income, profits and proceeds (including from any sale,
assignment, transfer or other disposition) in respect of any or all of the
foregoing property described in the foregoing clauses.
 
“Required Lenders” means, on any date of determination:
 
(a) with respect to a particular Series of Loans, a Lender or Lenders of such
Series, excluding any Defaulting Lenders of such Series, having or holding more
than 66 and 2/3% of the sum of: (i) the aggregate amount of all outstanding and
undrawn Commitments of all Lenders of such Series (excluding Commitments of any
Defaulting Lender of such Series) and (ii) the aggregate outstanding principal
amount of all Loans of such Series (excluding the Loans of such Series of any
Defaulting Lender); and
 
(b) with respect to all Loans, a Lender or Lenders, excluding any Defaulting
Lenders, having or holding more than 66 and 2/3% of the sum of: (i) the
aggregate amount of all outstanding and undrawn Commitments of all Lenders
(excluding Commitments of any Defaulting Lender) and (ii) the aggregate
outstanding principal amount of all Loans (excluding the Loans of any Defaulting
Lender);
 
provided, that, if in relation to any request from the Facility Agent or the
Collateral Agent:
 
 
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(v)           for consent in relation to any of the terms of the Credit
Agreement or any other Credit Document;
 
(w)           to confirm whether any agreement, evidence, certificate, document
or term of any thereof is satisfactory;
 
(x)           to participate in any other vote of the Lenders for any purpose
under the terms of this Agreement or any other Credit Document;
 
(y)           to direct, authorize or approve any other action under the Credit
Agreement or any other Credit Documents; or
 
(z)           to provide any confirmation or notification under the Credit
Agreement or any other Credit Document,
 
in each case other than as described in Section 9.01(a) of the Credit Agreement,
any Lender fails to respond within ten (10) Borrower Business Days (or such
longer period as may be specified in such request) of its receipt of such
request, then such Lender’s outstanding and undrawn Commitments and the
outstanding principal amount of its Loans shall be deemed to be zero for
purposes of calculating the percentages in clauses (a) and (b) of this
definition.
 
“Required Reserve Amount” means, on each Funding Date and on each Payment Date,
the sum of: (a) the aggregate of the Loan Service Amounts payable on the next
two succeeding Payment Dates and (b) if the Forecast DSCR for one or more
Calculation Periods from a Payment Date to the Latest Maturity Date is less than
1.3 to 1.0, the aggregate of the amounts which, if added to the Loan Service
Amount for each such Calculation Period, would result in the Forecast DSCR being
1.3 to 1.0 for each such Calculation Period.
 
“Reserve Account” means a “securities account” (as defined in Section 8-501 of
the UCC) in the name of the Borrower, designated as the “Reserve Account”, in
which the Required Reserve Amount shall be held, and which account shall be
subject to the Account Control Agreement.
 
“Royalties” means, collectively, Royalties A and Royalties B.
 
“Royalties A” means royalties, whether In Kind Royalties or Market Value
Royalties, in the amounts stated below, which will derive from the first 10% of
the Project Company’s share in the oil and/or gas and/or other valuable
substances that will be derived or extracted under the Lease (before deducting
royalties of any kind, but after deducting the oil that will be used for the
purposes of the actual production):
 
(a)           1% until the Investment Repayment Date; and
 
(b)           13% after the Investment Repayment Date.
 
“Royalties B” means royalties in an amount of 5% of the Project Company’s share
of the proceeds of the oil and/or gas (gross, before expenses and other
payments, including Statutory Royalties) that will be produced from the Lease,
including any lease or license that will replace it and/or its area in whole or
in part.
 
 
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“Royalties Deed A” means the Royalties Deed of October 20, 2013 between the
Project Company and the Seller with respect to the rights to Royalties A granted
to the Seller under the Transfer of Rights Agreement.
 
“Royalties Deed B” means the Royalties Deed of October 20, 2013 between the
Project Company and the Seller with respect to rights to Royalties B granted to
the Seller pursuant to the January 2001 Minutes and the Letter of Assignment.
 
“Royalties Deed C” means the Royalties Deed, dated on or prior to the Notice
Date for the Initial Series, between the Seller and the Borrower with respect to
the rights to Royalties A Sold and Contributed to the Borrower under the
Royalties Sale and Contribution Agreement.
 
“Royalties Deed D” means the Royalties Deed, dated on or prior to the Notice
Date for the Initial Series, between the Seller and the Borrower with respect to
the rights to Royalties B Sold and Contributed to the Borrower under the
Royalties Sale and Contribution Agreement.
 
“Royalties Payment Instruction” means that certain Royalties Payment Instruction
Letter Agreement, dated on or prior to the Notice Date for the Initial Series,
among the Collateral Agent, the Borrower, the Seller, the Project Company, the
Project Account Bank and Deutsche Bank Luxembourg S.A., in its capacity as
“Intercreditor Agent”.
 
“Royalties Receivables” means the Royalties and the Related Assets.
 
“Royalties-related Taxes” means:
 
(a)           the amount of Israeli income tax applicable to the Borrower in
respect of the Royalties, if any;
 
(b)           the amount of U.S. Federal income tax applicable to the Borrower
in respect of the Royalties, if any; and
 
(c)           the amount of the Israeli Petroleum profits tax levy (Sheshinski
Tax) applicable to the Borrower in respect of the Royalties, if any,
 
in each case, that is due to the applicable Israeli or U.S. Federal tax
authority prior to the next Payment Date (each, a “Royalties-related Tax”).
 
“Royalties-related Tax Amount” means, on any date of determination, the sum of
each of the Royalties-related Taxes which:
 
(a)           in the case of such Royalties-related Taxes withheld from the
Royalties or otherwise deducted from any payments to the Facility Account
(including by or on behalf of the Project Company), shall be notified to the
Borrower and the Facility Agent by the Seller and evidenced by: (i) a
certificate of an Authorized Officer of the Seller, accompanied by evidence to
the Facility Agent of such withholding by the relevant Person, (A) certifying
the amount withheld, the detailed calculation thereof (including each of the
then-current effective applicable tax rates and the net income or assumed net
income of the Borrower subject to such tax rate), the applicable tax authority
for whom such amount was withheld and to whom such amount is due, the date such
amount is due to be paid to the applicable tax authority and that such amount
was withheld from the Royalties or otherwise deducted from any payments to the
Facility Account solely in respect of Royalties-related Taxes  and (B)
covenanting and agreeing to pay or cause to be paid all such withheld amounts to
the applicable tax authority on or prior to the date when due and (ii) only with
respect to Royalties-related U.S. Taxes, a certificate of the Accountants making
the same certifications contained in subclause (a)(i)(A) immediately above, each
certificate in subclause (i) and (ii) to be in form and substance satisfactory
to the Facility Agent; and
 
 
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(b)           in the case of Royalties-related U.S. Taxes not withheld from the
Royalties or otherwise deducted from any payments to the Facility Account, which
shall be notified to the Borrower and the Facility Agent by the Seller and
evidenced by: (i) a certificate of an Authorized Officer of the Seller (A)
certifying the amount required to be deposited in the Royalties Tax Account to
pay Royalties-related U.S. Taxes to the applicable tax authority, the detailed
calculation thereof (including each of the then-current effective applicable tax
rates and the net income or assumed net income of the Borrower subject to such
tax rate), the applicable tax authority to whom such amount is due to be paid,
the Royalties-related U.S. Tax in respect of which such amount must be paid, the
date such amount is due to be paid to the applicable tax authority and (B)
representing and warranting that such amount was not (nor was any portion
thereof) withheld from the Royalties or otherwise deducted from any payments to
the Facility Account and (ii) a certificate of the Accountants making the same
certifications contained in subclause (b)(i)(A) immediately above, each
certificate in subclause (i) and (ii) to be in form and substance satisfactory
to the Facility Agent.
 
“Royalties-related U.S. Taxes” means any Royalties-related Taxes described in
clause (b) of the definition thereof.
 
“Royalties Tax Account” means a “securities account” (as defined in Section
8-501 of the UCC) in the name of the Borrower and in which the Royalties-related
Tax Amount will be held.
 
 “Royalties Transfer Agreements” means, collectively, Royalties Deed A, the
Transfer of Rights Agreement, Royalties Deed B, the January 2001 Minutes, the
Letter of Assignment, the Application for Seller Registration, the Seller
Registration, Royalties Deed C, Royalties Deed D, the Royalties Sale and
Contribution Agreement, the Application for Borrower Registration, the Borrower
Registration, the Application for Collateral Agent Registration, the Collateral
Agent Registration, the Royalties Payment Instruction, and any other
instruments, certificates or documents heretofore, now or hereafter entered into
in connection therewith or the transactions contemplated thereby.
 
“Sanctioned Country” means a country or territory which is at any time subject
to a general export, import, financial or investment embargo under any
Sanctions.
 
“Sanctions” means:
 
 
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(a)           economic or financial sanctions or trade embargoes imposed,
administered or enforced from time to time by: (i) the U.S. government and
administered by OFAC, (ii) the United Nations Security Council, (iii) the
European Union or (iv) Her Majesty's Treasury of the United Kingdom; and
 
(b)           economic or financial sanctions imposed, administered or enforced
from time to time by the U.S. State Department, the U.S. Department of Commerce
or the U.S. Department of the Treasury.
 
“Sanctions List” means any of the lists of specifically designated nationals or
designated persons or entities (or equivalent) held by the U.S. government and
administered by OFAC, the U.S. State Department, the U.S. Department of Commerce
or the U.S. Department of the Treasury or the United Nations Security Council or
any similar list maintained by the European Union, any other EU Member State or
any other U.S. government entity, in each case as the same may be amended,
supplemented or substituted from time to time.
 
“Secured Parties” means the Facility Agent, the Collateral Agent, each Lender,
the Account Bank, the Servicer, each Hedge Counterparty, the Independent Manager
and each Indemnitee.
 
“Securities” means any stock, shares, partnership interests, membership
interests, voting trust certificates, certificates of interest or participation
in any profit sharing agreement or arrangement, options, warrants, bonds,
debentures, notes, or other evidences of indebtedness, secured or unsecured,
convertible, subordinated or otherwise, or in general any instruments commonly
known as "securities" or any certificates of interest, shares or participations
in temporary or interim certificates for the purchase or acquisition of, or any
right to subscribe to, purchase or acquire, any of the foregoing.
 
“Security Agreement” means the Pledge, Assignment and Security Agreement, dated
on or prior to the Notice Date for the Initial Series, between the Borrower and
the Collateral Agent.
 
“Security Documents” means the Security Agreement, the Israeli Security
Agreement, the Account Control Agreement, the Control Agreement (if any), the
UCC Financing Statements, the filing and registration in the Israeli Pledges
Registry of the Collateral Agent’s Security Interest in the Collateral, the
Seller Security Agreement, the Application for Collateral Agent Registration,
the Collateral Agent Registration and any other instruments, certificates or
documents entered into in connection therewith or the transactions contemplated
thereby.
 
“Security Interest” means: (a) with respect to the Collateral, the “Security
Interest” of the Collateral Agent, for the benefit of the Secured Parties, in
the Collateral, as defined in Section 2.01 of the Security Agreement, (b) with
respect to the Seller Collateral, the “Security Interest” of the Collateral, for
the benefit of the Secured Parties, in the Seller Collateral, as defined in
Section 2.01 of the Seller Security Agreement, (c) with respect to the Royalties
Receivables, the “Security Interest” of the Borrower in the Royalties
Receivables, as defined in Section 3.01 hereof, and (d) with respect to the
Israeli Collateral, the “Security Interest” of the Collateral Agent, for the
benefit of the Secured Parties, in the Israeli Collateral, as defined in Section
2.01 of the Israeli Security Agreement.
 
 
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“Sell and Contribute” has the meaning given to such term in the Recitals.

“Seller” means Isramco, Inc.
 
“Seller Collateral” has the meaning given to such term in the Seller Security
Agreement.
 
“Seller Governmental Approvals” has the meaning given to such term in Section
5.01(d).
 
“Seller Registration” means the registration of the Seller’s rights to the
Royalties in the Petroleum Register.
 
“Seller Security Agreement” means the Pledge and Security Agreement, dated on or
prior to the Notice Date for the Initial Series, between the Seller and the
Collateral Agent.
 
“Series” means Loans made on the same Funding Date with the same interest rate
and Maturity Date.  For the avoidance of doubt, the Initial Series and the
Additional Series shall each constitute a "Series" for purposes of this
definition.
 
“Servicer” means N.M.A. Energy Resources Ltd., an Israeli company, in its
capacity as the servicer, pursuant to the terms of the Servicing Agreement and
the Credit Agreement.
 
“Servicing Agreement” means the Servicing Agreement, dated the Signing Date,
among the Borrower, the Servicer, the Manager, the Facility Agent and the
Collateral Agent.
 
“Servicing Fee” has the meaning specified in the Servicing Agreement.
 
“Signing Date” means the date of the Credit Agreement.
 
“Single Employer Plan” means a single employer plan, as defined in Section
4001(a)(15) of ERISA, that (a) is maintained for employees of the Borrower or
any ERISA Affiliate and no Person other than the Borrower and the ERISA
Affiliates or (b) was so maintained and in respect of which the Borrower or any
ERISA Affiliate could have liability under Section 4069 of ERISA in the event
such plan has been or were to be terminated.
 
“Solvent” means, with respect to any Person on any date of determination, that
on such date (a) the fair value of the property of such Person is greater than
the total amount of liabilities, including contingent liabilities, of such
Person, (b) the present fair value of the assets of such Person is not less than
the amount that will be required to pay the probable liability of such Person on
its Indebtedness as they become absolute and matured, (c) such Person does not
intend to, and does not believe that it will, incur Indebtedness or liabilities
beyond such Person’s ability to pay such Indebtedness and liabilities as they
mature, (d) such Person is not engaged in business or a transaction, and is not
about to engage in business or a transaction, for which such Person’s property
would constitute an unreasonably small capital, (e) such Person is able to pay
its Indebtedness and liabilities, contingent obligations and other commitments
as they mature in the ordinary course of business and (f) such Person is
"solvent" within the meaning given that term and similar terms under laws
applicable to it relating to fraudulent transfers and conveyances.  The amount
of contingent liabilities at any time shall be computed as the amount that, in
the light of all the facts and circumstances existing at such time, represents
the amount that can reasonably be expected to become an actual or matured
liability.
 
 
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“Statutory Reserve Rate” means a fraction (expressed as a decimal), the
numerator of which is the number one and the denominator of which is the number
one minus the aggregate of the maximum reserve percentages (including any
marginal, special, emergency or supplemental reserves) expressed as a decimal
under regulations issued from time to time by the Board (or any successor) with
respect to liabilities or assets consisting of or including Eurocurrency
Liabilities (as such term is used in Regulation D of the Board), or with respect
to any other category of liabilities that includes deposits by reference to
which the interest rate on Eurocurrency Liabilities is determined.  Such reserve
percentages shall include those imposed pursuant to such Regulation D of the
Board. The Loans of the Initial Series shall be deemed to constitute
eurocurrency funding and to be subject to such reserve requirements without
benefit of or credit for proration, exemptions or offsets that may be available
from time to time to any Lender under such Regulation D of the Board or any
comparable regulation. The Statutory Reserve Rate shall be adjusted
automatically on and as of the effective date of any change in any reserve
percentage.
 
“Statutory Royalties” means all royalties required to be paid by the Project
Company to the State of Israel in connection with the Project under the
Petroleum Law and in accordance with the Lease.
 
“Subscription Agreement” means the Subscription Agreement, dated on or prior to
the Notice Date for the Initial Series, and made by and between the Borrower and
the Seller.
 
“Taxes” means all present or future taxes, levies, imposts, duties, deductions,
withholdings (including backup withholding), assessments, fees or other charges
imposed by any Governmental Authority, including any interest, additions to tax
or penalties applicable thereto.
 
“Transfer of Rights Agreement” means the Rights Transfer Agreement of March 5,
1988, between the Project Company and the Seller, including the Addendum to the
Agreement of July 28, 1991, regarding Royalties A.
 
“Transfer Taxes” has the meaning given to such term in Section 5.02(c).
 
“UCC” means the Uniform Commercial Code (or any similar or equivalent
legislation) as in effect in the State of New York or the State of Delaware, as
the context may require.
 
“UCC Financing Statements” means the UCC financing statements in the form
attached as Schedule 3 to the Credit Agreement.
 
“Units” means a fractional share of all the Interests (as defined in the
Borrower’s Operating Agreement) in the Borrower.
 
“U.S.” or “United States” means the United States of America.
 
Section 1.02 Construction.
 
 
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(a) For purposes of this Agreement, all capitalized terms used but not otherwise
defined herein shall have the meanings assigned thereto in the Credit Agreement.
 
(b) The definitions of terms herein shall apply equally to the singular and
plural forms of the terms defined.  Whenever the context may require, any
pronoun shall include the corresponding masculine, feminine and neuter
forms.  The words “include”, “includes” and “including” shall be deemed to be
followed by the phrase “without limitation”.  The word “will” shall be construed
to have the same meaning and effect as the word “shall”.  The word “law” shall
be construed as referring to all statutes, rules, regulations, codes and other
laws (including official rulings and interpretations thereunder having the force
of law or with which affected Persons customarily comply), and all judgments,
orders and decrees, of all Governmental Authorities.  All terms used in Article
9 of the UCC and not specifically defined herein are used herein as defined in
such Article 9.
 
(c) Unless the context requires otherwise:
 
(i) any definition of or reference to any agreement, instrument or other
document herein shall be construed as referring to such agreement, instrument or
other document as from time to time amended, restated, supplemented or otherwise
modified (subject to any restrictions on such amendments, restatements,
supplements or modifications set forth herein or therein),
 
(ii) any definition of or reference to any law, statute, rule or regulation
shall be construed as referring thereto as from time to time amended,
supplemented or otherwise modified (including by succession of comparable
successor laws),
 
(iii) any reference herein to any Person shall be construed to include such
Person’s successors and permitted assigns (subject to any restrictions on
assignment set forth herein or in any other applicable Credit Document) and, in
the case of any Governmental Authority, any other Governmental Authority that
shall have succeeded to any or all functions thereof,
 
(iv) the words “herein”, “hereof” and “hereunder”, and words of similar import,
shall be construed to refer to this Agreement in its entirety and not to any
particular provision hereof,
 
(v) all references herein to Articles, Sections and Schedules shall be construed
to refer to Articles and Sections of, and Schedules to, this Agreement unless
otherwise indicated,
 
(vi) in the computation of periods of time from a specified date to a later
specified date, the word “from”  means “from and including” and the words “to”
and “until” each mean “to but excluding”,
 
(vii) the words “asset” and “property” shall be construed to have the same
meaning and effect and to refer to any and all tangible and intangible assets
and properties, including cash, securities, accounts and contract rights, and
 
 
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(viii) a Default is “continuing” if it has not been waived or, if capable of
being remedied, has not been remedied, and an Event of Default, a Retention
Event and an Early Amortization Event  is “continuing” if it has not been
waived.
 

 
ARTICLE 2
SALE OF ROYALTIES RECEIVABLES; PAYMENT OF PURCHASE PRICE
 
Section 2.01 Sale and Contribution of Royalties Receivables to the Borrower.
 
(a) Upon the terms and subject to the conditions of this Agreement, effective as
of the Initial Funding Date, the Seller hereby Sells and Contributes to the
Borrower, without recourse except as otherwise set forth herein, free and clear
of any Liens or claims, and the Borrower hereby purchases, acquires and accepts,
all of the Seller’s right, title and interest in, to and under (but none of the
Seller’s obligations under) the Royalties Receivables.
 
(b) It is the intention of the parties hereto that the Sale and Contribution of
the Royalties Receivables made hereunder is an absolute and irrevocable true
sale and contribution that provides the Borrower with the full benefits of
ownership of the Royalties Receivables so purchased, acquired and accepted (such
that the Royalties Receivables will not constitute property of the Seller’s
estate in the event of the Seller’s bankruptcy), and is not a loan or financing
secured by such Royalties Receivables.
 
(c) The Sale and Contribution of the Royalties Receivables by the Seller to the
Borrower is made without recourse; provided, however, that: (i) the Seller shall
be liable to the Borrower Indemnified Persons for all representations,
warranties, covenants and indemnities made by the Seller hereunder and (ii) such
Sale and Contribution does not constitute and is not intended to result in an
assumption by the Borrower or any assignee thereof of any obligation or
liability of the Seller or any other Person arising in connection with the
Royalties Receivables or any other obligations or liabilities of the Seller.
 
(d) Upon the Sale and Contribution of the Royalties Receivables to the Borrower,
the Seller relinquishes all title to, ownership of and control thereover and the
Borrower and its designees and assignees shall have the sole right, in each case
subject to the terms hereof and of the Credit Agreement, to exercise control
over, including to service, administer, collect and enforce the Royalties
Receivables and to assign and/or delegate such right to others.
 
Section 2.02 Purchase Price; Consideration for Royalties Receivables.
 
(a) The total consideration for the Sale and Contribution of the Royalties
Receivables hereunder (the “Aggregate Transfer Value”) shall be $300,000,000, an
amount equal to the fair market value of the Royalties Receivables (the
“Contribution Amount”). In consideration for the Sale and Contribution of the
Royalties Receivables, the Borrower shall on the Initial Funding Date record on
its books and records a contribution of capital from the Seller, in respect of
its Interest in the Borrower, in an amount equal to the Contribution Amount, and
issue to the Seller the number of Units necessary to reflect such Contribution
Amount.
 
 
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(b) The Seller and the Borrower will treat the sale and contribution of the
Royalties Receivables as a sale for U.S. Federal tax purposes.
 
ARTICLE 3
BACK-UP SECURITY INTEREST
 
Section 3.01 Grant of back-up Security.  (a)  If, notwithstanding the parties’
intention expressed in Section 2.01 hereof, the Sale and Contribution by the
Seller to the Borrower of the Royalties Receivables is characterized as a
secured loan or financing or a collateral transfer for security or such Sale and
Contribution shall for any reason be ineffective or unenforceable or  the
Royalties Receivables are considered to be property of the Seller or its estate
(any of the foregoing being a “Recharacterization”), then this agreement shall
be deemed to and does hereby constitute a security agreement under the UCC and
all other Non-Israeli Applicable Laws.  For this purpose and without being in
derogation of the parties’ intention that the Sale and Contribution of the
Royalties Receivables constitute a true and absolute sale and contribution, the
Seller hereby pledges and grants to the Borrower a security interest in, and
assigns to the Borrower as collateral security (collectively, a “Security
Interest”), all of the Seller’s right, title and interest in, to and under all
of the Royalties Receivables, whether now existing or hereafter created or
arising, and all proceeds of the foregoing, to secure the prompt and complete
payment of a loan deemed to have been made in an amount equal to the aggregate
amount of Loans and other Obligations outstanding under the Credit Agreement
from time to time and the satisfaction of all other obligations owed to the
Borrower by the Seller under this Agreement.
 
(a) In the event of a Recharacterization, the Borrower and its assigns
(including the Collateral Agent) shall have, in addition to the rights and
remedies which they may have under this Agreement and the other Credit
Documents, all other rights and remedies provided to a secured creditor under
the UCC and other Non-Israeli Applicable Law, which rights and remedies shall be
cumulative.
 
(b) The parties hereto agree that any characterization of the Seller as “debtor”
and the Borrower as “secured party” in any financing statement or continuation
statement filed in connection with this Agreement is for protective purposes and
shall in no way be construed as being contrary to the intent of the parties that
this transaction constitute a true and absolute Sale and Contribution of the
Royalties Receivables from the Seller to the Borrower.
 
ARTICLE 4
CONDITIONS PRECEDENT
 
Section 4.01 Conditions Precedent.  The Borrower’s obligation to purchase and
accept the Royalties Receivables under this Agreement on the Initial Funding
Date shall be subject to the satisfaction of the following conditions precedent:
 
(a) all of the conditions precedent set forth in Sections 3.01 and 3.02 of the
Credit Agreement shall be satisfied prior to or contemporaneously with such Sale
and Contribution;
 
(b) all of the representations and warranties of Seller contained in this
Agreement shall be true and correct in all material respects as of the date
specified herein, other than representations and warranties qualified by
materiality, in which case such representation and warranty shall be true and
correct in all respects, and the Seller shall have performed all material
obligations to be performed by it hereunder on or prior to the date specified
herein; and
 
 
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(c) the Seller shall have, at its own expense, delivered to the Borrower or its
designee, all Records in the Seller’s possession or under its control relating
to the Royalties Receivables.
 
ARTICLE 5
REPRESENTATIONS AND WARRANTIES
 
Section 5.01 Representations and Warranties of the Seller.  The Seller makes the
following representations and warranties to the Borrower, on which the Borrower
is relying in purchasing and accepting the Royalties Receivables (1) as of the
date of this Agreement or, solely with respect to a representation and warranty
or portion thereof relating to a Credit Document dated on or about the Notice
Date for the Initial Series, on such Notice Date and (2) on the Initial Funding
Date; provided, however, that if any representation and warranty or portion
thereof is specified to occur on a particular date or dates, then instead of the
foregoing, the Seller makes such representation and warranty or portion thereof
on the date or dates so specified and on the Initial Funding Date.
 
(a) Organization; Power.  The Seller: (i) is duly organized, validly existing
and in good standing under the laws of the State of Delaware as a corporation,
(ii) has all requisite power and authority to own and operate its properties, to
carry on its business and operations as now conducted or proposed to be
conducted, to enter into the Credit Documents to which it is a party and to
carry out the transactions contemplated thereby, and (iii) except where the
failure to do so, individually or in the aggregate, could not reasonably be
expected to result in a Material Adverse Effect, is qualified to do business, is
in good standing and has all licenses, permits, consents and approvals, in each
jurisdiction where its assets are located and wherever necessary or advisable to
carry out its business and operations as now conducted or proposed to be
conducted, to enter into the Credit Documents to which it is a party and to
carry out the transactions contemplated thereby.
 
(b) Authorization; Enforceability.  The Seller’s execution, delivery and
performance of the Credit Documents to which it is a party were and are within
its powers and were and have been duly authorized by all necessary corporate
actions on its part.  This Agreement and each other Credit Document to which it
is a party has been duly executed and delivered by the Seller and constitutes
the legal, valid and binding obligation of the Seller, and is enforceable
against the Seller in accordance with its terms, subject to applicable
bankruptcy, insolvency, reorganization, moratorium or other laws affecting
creditors’ rights generally and subject to general principles of equity,
regardless of whether considered in a proceeding in equity or at law.
 
(c) No Conflicts.  The execution, delivery and performance by the Seller of the
Credit Documents to which it is a party and the consummation of the transactions
contemplated hereby and thereby did not, do not and will not: (i) violate any
Seller Governmental Approval, any provision of any law or any governmental rule
or regulation applicable to the Seller, any of its Organizational Documents, or
any order, judgement or decree of any court or other Governmental Authority
binding on it; (ii) conflict with, result in a breach of or constitute (with due
notice or lapse of time or both) a default under any Seller Governmental
Approval, any material agreement or other material instrument (each a
“Contractual Obligation”) binding upon the Seller or any of its properties or
assets; (iii) result in or require the creation or imposition of any Lien upon
any of the properties or assets of the Seller (other than the Lien created
hereunder in favor of the Borrower); or (iv) require any approval or consent of
any Person under any Contractual Obligation of the Seller, except for approvals
and consents that have already been received and are in full force and effect.
 
 
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(d) Governmental Approvals.  The execution, delivery and performance by the
Seller of the Credit Documents to which it is a party and the consummation of
the transactions contemplated thereby did not, do not and will not require any
registration with, consent or approval of, notice to, or registration with, or
other action to, with or by, any Governmental Authority (the “Seller
Governmental Approvals”) except for filings, registrations, recordings,
approvals and consents (including with respect to the Royalties Receivables)
that have been made and received on or prior to the Notice Date for the Initial
Series and are in full force and effect.
 
(e) Material Adverse Change.  Since December 31, 2012, no event, change or
condition has occurred that has had, or could reasonably be expected to have,
alone or in the aggregate, a Material Adverse Effect.
 
(f) Taxes Returns.  All tax returns and reports of the Seller required to be
filed by it have been timely filed, and all material taxes shown on such tax
returns to be due and payable and all assessments, fees and other governmental
charges upon the Seller and upon its properties, assets, income, businesses and
franchises which are shown to be due and payable on such returns and reports
have been paid when due and payable except these which are being contested in
good faith by appropriate proceedings diligently conducted and for which
adequate reserves have been provided in accordance with GAAP.  On the Notice
Date for the Initial Series and on the Initial Funding Date there are no tax
liens against the Seller or its properties, assets, income, businesses or
franchises, and the Seller knows of no proposed tax assessment or claim which is
not being actively contested by the Seller in good faith and by appropriate
proceedings; provided, such reserves or other appropriate provisions, if any, as
shall be required in conformity with GAAP shall have been made or provided
therefor.
 
(g) Litigation. There are no Adverse Proceedings that: (i) challenge the
Seller’s ownership of or rights in the Royalties Receivables or the validity or
enforceability of any of the Royalties Transfer Agreements to which the Seller
is a party, (ii) challenge or seek to prevent the Sale and Contribution of the
Royalties Receivables by the Seller to the Borrower or the entry into or
performance by the Seller of any Credit Document or any of the transactions
contemplated thereby, or (iii) seek any determination or ruling that could
reasonably be expected to have a Material Adverse Effect or a material adverse
effect on the Royalties Receivables, including the validity, enforceability,
priority, identifiability or collectability thereof (in each case, as of the
Initial Funding Date, in favor of the Borrower or the Collateral Agent) or, as
of the Initial Funding Date, the Borrower’s rights in respect thereof, or on the
rights, remedies or benefits of the Borrower under any Credit Document.
 
 
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(h) Compliance with Laws and Agreements.  The Seller has been and is in
compliance in all material respects with: (i) all applicable statutes, laws,
rules, regulations, orders writs, judgments, injunctions, decrees or awards to
which it may be subject, and all applicable restrictions imposed by, all
Governmental Authorities, (ii) all Contractual Obligations binding upon it or
any of its properties or assets, including the Credit Documents to which it is a
party, and (iii) its Organizational Documents, and, as of the Initial Funding
Date, the Royalties Receivables were acquired by the Seller in compliance with
the each of the foregoing.
 
(i) No Default.  No default, event of default, acceleration or any similar event
under any Credit Document to which it is a party has occurred and is continuing,
in each case resulting from, or could reasonably be expected, in each case to
result from: (i) its execution and delivery of any of the Credit Documents to
which it is a party, (ii) the performance, or failure to perform, of any of its
obligations under any of the Credit Documents to which it is a party, or (iii)
the consummation of the transactions contemplated thereby, including the Sale
and Contribution of the Royalties Receivables to the Borrower on the Initial
Funding Date or the application of the proceeds thereof by the Seller.  To its
knowledge, no other default, event of default, acceleration or any similar event
under any Credit Document has occurred and is continuing, or could reasonably be
expected to result from the execution, delivery or performance of any of the
Credit Documents to which it is a party or the consummation of the transactions
contemplated hereby or thereby, including the Sale and Contribution of the
Royalties Receivables to the Borrower on the Initial Funding Date or the
application of the proceeds thereof by the Seller.
 
(j) Investment Company Status.  The Seller is not an “investment company” or an
“affiliated person” of an “investment company,” as such terms are defined in the
Investment Company Act of 1940, as amended.
 
(k) ERISA.  Each Plan to which the Seller makes direct contributions, and, to
the knowledge of the Seller, each other Plan and each Multiemployer Plan, is in
compliance in all material respects with, and has been administered in all
material respects in compliance with, the applicable provisions of ERISA, the
Internal Revenue Code and any other Applicable Laws.  No ERISA Event has
occurred or is reasonably expected to occur that, when taken together with all
other such ERISA Events for which liability is reasonably expected to occur,
could reasonably be expected to result in a Material Adverse Effect.
 
(l) Ownership of Borrower.  The Seller owns one hundred percent (100%) of the
issued and outstanding membership interests of the Borrower.  Such membership
interests have been duly authorized and validly issued, are fully paid and are
owned by the Seller free and clear of all warrants, options, rights to purchase
and any other Liens, other than, as of the Notice Date for the Initial Series,
the Security Interest of the Collateral Agent under the Seller Security
Agreement.
 
(m) Solvency; Fraudulent Conveyance.  (i) As of the date hereof and (ii) in the
case of the Initial Funding Date, immediately prior to and immediately following
the Initial Funding Date after giving effect to the Sale and Contribution of the
Royalties Receivables, as the case may be, the Seller is Solvent and will not be
made insolvent by the Sale and Contribution of the Royalties Receivables.  The
Seller is not contemplating the commencement of insolvency, bankruptcy,
liquidation or consolidation proceedings or the appointment of a receiver,
liquidator, conservator, trustee or similar official in respect of the Seller or
any of its assets.  Seller is not subject to any proceeding under the Bankruptcy
Code or under any other applicable bankruptcy, insolvency or similar law.  The
Sale and Contribution of the Royalties Receivables by Seller to Borrower on the
Initial Funding Date has a legitimate business purpose and is being effected in
the ordinary course of business, and the Seller is not selling or contributing
the Royalties Receivables on the Initial Funding Date with any intent to hinder,
delay or defraud the Borrower or any creditors of the Seller.
 
 
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(n)Reasonably Equivalent Value.  As of the Initial Funding Date, the Seller has
received reasonably equivalent value and fair consideration from the Borrower in
consideration for the Sale and Contribution of the Royalties Receivables under
this Agreement, no such transfer has been made for or on account of an
antecedent debt owed by the Seller to the Borrower, and no such transfer is or
may be voidable or subject to avoidance under any section of the Bankruptcy Code
or under any other applicable bankruptcy, insolvency or similar law.
 
(o)Full Disclosure.  No information provided in writing by the Seller to the
Borrower, the Facility Agent, the Collateral Agent or the Arranger in connection
with this Agreement or any of the other Credit Documents or contained in any
financial statements prepared by the Seller and delivered hereunder or in any
written statement prepared by the Seller or furnished by or on behalf of the
Seller to the Borrower, the Facility Agent, the Collateral Agent or the Arranger
pursuant to the terms of this Agreement or any of the other Credit Documents
contains any untrue statement of a material fact or taken as a whole, omits to
state a material fact necessary to make the statements contained therein not
misleading in light of the circumstances under which they were made; provided,
that the Seller makes no representation or warranty with respect to the Project
Company Forecast Model or any other information prepared by the Project Company
and delivered, without alteration, by the Seller hereunder.  There is no fact
known to a responsible officer of the Seller that, after due inquiry, could
reasonably be expected to have a Material Adverse Effect that has not been
disclosed in a writing to the Borrower and the Arranger for use in connection
with the transaction contemplated hereunder or under the other Credit Documents.
 
(p)Anti-Corruption.  On a continuing basis, the Seller and its directors,
officers, employees, and agents have conducted their business in compliance with
Anti-Corruption Laws and to the extent required have instituted and maintained
policies and procedures designed to promote and achieve compliance with such
laws.
 
(q)OFAC.  On a continuing basis, none of the Seller or its directors or
officers, acting or benefiting in any capacity in connection with the Credit
Documents: (i) is a Designated Person, (ii) is a Person that is owned or
controlled by a Designated Person, (iii) is located, organized or resident in a
Sanctioned Country, or (iv) is otherwise in violation of Sanctions.
 
(r)Executive Offices.  The Seller’s: (i) name as it appears in official filings
in its jurisdiction of organization, (ii) jurisdiction of organization, (iii)
organization type, (iv) federal employer identification number and organization
number, if any, issued by its jurisdiction of organization, and (v) principal
place of business, and location where it keeps the Records relating to the
Royalties Receivables are, in each case, set forth in Schedule 1 hereto. The
Seller has only one jurisdiction of organization.  The Seller has had no chief
executive office in the five (5) years preceding the date hereof other than that
set forth on Schedule 1 hereto.
 
 
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(s) Trade Names.  The Seller has no, and has not used, any trade names,
fictitious names, assumed names, “doing business as” names or any other names
(or spelling, capitalization or punctuation thereof) in the five (5) years
preceding the date hereof, except as set forth on Schedule 1 hereto.
 
(t) Foreign Tax Liability.  (i) Except as set forth in the Financial Model, the
Seller is not aware of the Project Company or any other Person withholding any
portion of any payment due under or in respect of the Royalties because of the
requirements of a foreign taxing authority, and (ii) no foreign taxing authority
has notified or otherwise contacted the Seller concerning a withholding or other
foreign tax liability.
 
(u) Financial Statements.  The audited consolidated financial statements for the
Seller and its Subsidiaries for the fiscal year ending December 31, 2012 were
prepared in accordance with GAAP and fairly present the consolidated financial
position of the Seller and its Subsidiaries as of such date and their
consolidated results of operations and cash flows for such fiscal year.
 
(v) Nonconsolidation.  The statements and factual assumptions contained in the
opinion of Freshfields Bruckhaus Deringer US LLP regarding true sale and
substantive consolidation matters delivered to the Facility Agent in connection
with the Notice Date for the Initial Series are, in each case, true and correct.
 
(w) Accounting; Books and Records.  The Seller accounts for and otherwise treats
the Sale and Contribution of the Royalties Receivables on the Initial Funding
Date under this Agreement in its books and records (including financial
statements) as a true Sale and Contribution of the Royalties Receivables to the
Borrower.  The Seller has marked all of its books and records to reflect the
Sale and Contribution on the Initial Funding Date to, and ownership by the
Borrower of, the Royalties Receivables.
 
Section 5.02 Representations and Warranties regarding the Royalties
Receivables.  The Seller makes the following representations and warranties to
the Borrower, on which the Borrower is relying in purchasing and accepting the
Royalties Receivables (1) as of the date of this Agreement or, solely with
respect to a representation and warranty or portion thereof relating to a Credit
Document dated on or about the Notice Date for the Initial Series, on such
Notice Date and (2) on the Initial Funding Date; provided, however, that if any
representation and warranty or portion thereof is specified to occur on a
particular date or dates, then instead of the foregoing, the Seller makes such
representation and warranty or portion thereof  on the date or dates so
specified and on the Initial Funding Date.
 
(a) Ownership of Royalties Receivables.  Immediately prior to the Sale and
Contribution of the Royalties Receivable to the Borrower on the Initial Funding
Date as and in the manner contemplated by this Agreement, the Seller had good
title to, and was the sole owner of the Royalties Receivables, free and clear of
any interest, claim, Lien or charge of any other Person other than the Liens
contemplated by this Agreement.
 
 
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(b) Defenses.  No Royalties Receivables are subject to any right of rescission,
set-off, counterclaim or defense, nor will the operation of any the terms of the
Royalties Receivables or this Agreement, or the exercise of any rights
thereunder or hereunder, render any Royalties Receivable either unenforceable,
in whole or in part, or subject to any right of rescission, set-off,
counterclaim or defense, and no such right or rescission, set-off, counterclaim
or defense has been asserted with respect thereto.
 
(c) Transfer Tax; Tax upon Enforcement; Tax Ruling.  (i) The Sale and
Contribution of the Royalties Receivables (including all payments due or to
become due in connection therewith) by the Seller on the Initial Funding Date
pursuant to this Agreement and the other applicable Credit Documents is not
subject to and will not result in any Taxes payable by the Borrower or the
Seller to any Governmental Authority (“Transfer Taxes”).  In the event that the
Seller receives actual notice of any Transfer Taxes arising out of the Sale and
Contribution of the Royalties Receivables, the Seller shall give notice thereof
to the Borrower, and it shall be the obligation of the Seller to (and the Seller
shall) pay such Transfer Taxes when due and payment in full thereof by the
Seller on or prior to the date when due shall be deemed to constitute full
compliance by the Seller with this clause (c).
 
(ii) Under Applicable Law and the Israeli Tax Ruling, upon the Sale or other
disposition of Collateral pursuant to the Security Agreement or the Israeli
Security Agreement, the Seller (and not the Borrower, the Collateral Agent or
any Secured Party, including directly from the proceeds of such Sale or other
disposition) will be required pay all related Taxes (other than value added
taxes) to the applicable tax authority to whom such Taxes are due.
 
(iii) All representations, declarations and statements in Section 1 of the
Israeli Tax Ruling are true and correct and all other material representations,
declarations and statements made by, or directed by Seller to be made on behalf
of, the Seller to the Israeli Tax Authority or their agents in connection with
the Israeli Tax Ruling, including in any applications therefore, were, on the
date when made, and are true and correct in all material respects
 
(d) No Impairment.  Since the date of the applicable Credit Documents pursuant
to which the Seller acquired the Royalties, the terms of the Royalties
Receivables have not been released, terminated, impaired, waived, altered,
amended or modified in any respect, and the Project Company has not been
released, in whole or in part, from any of its obligations with respect thereto.
 
(e) No Default.  There is no default, event of default, breach or violation
existing with respect to the Royalties Receivables, and the Seller has not
waived any such default, event of default, breach or violation.
 
(f) Material Adverse Effect.  The Seller has not taken any action or failed to
take any action that could reasonably be expected to have a Material Adverse
Effect, and the Seller is not aware of any other circumstances or conditions
with respect to the Royalties Receivables that can be reasonably expected to
have a Material Adverse Effect.
 
 
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(g) Purchase of Royalties by the Seller.  (i) The sale, transfer and conveyance
of the Royalties as and in the manner contemplated by the Royalties Transfer
Agreements was sufficient to fully transfer to the Seller all right, title and
interest of the Project Company in, to and under the Royalties, and the Seller
thereby purchased, accepted and acquired all legal and equitable title to and
owned the Royalties free and clear of any Liens.  Such sale, transfer and
conveyance was sufficient to prevent any other actual or purported sale,
transfer, assignment, conveyance, contribution, pledge, assignment or
hypothecation of such Royalties (other than pursuant to a Forced Transfer from
the Project Company) from being enforceable; provided that the Seller did not
have any rights against third-party purchasers in respect of after-extracted oil
or gas that such third-party purchases directly from the Project Company.
 
(ii) All filings, recordings, registrations or other actions required in any
applicable jurisdiction in order to evidence, perfect, protect and enforce the
Seller’s title to and sole ownership of the Royalties as against the interest of
any other Person, including any purchasers (other than recipients, assignees or
transferees of the Project Company's rights from the Project Company pursuant to
a Forced Transfer) from, or creditors of, the Project Company were duly made or
taken and remain in full force and effect; provided that the Seller did not have
any rights against third-party purchasers in respect of after-extracted oil or
gas that such third-party purchases directly from the Project Company.  The
Seller gave reasonably equivalent value to the Project Company in consideration
for the sale, transfer and conveyance to the Seller by the Project Company of
the Royalties pursuant to the Royalties Transfer Agreements.
 
(iii) Any and all applicable requirements of law of all applicable jurisdictions
were complied with in connection with the sale, transfer and conveyance of the
Royalties to the Seller, and the consummation of the transactions contemplated
by the Royalties Transfer Agreements did not and do not cause the violation of
any such laws.
 
(h) Sale of Royalties by the Seller.
 
(i) (i) The sale, transfer and conveyance of the Royalties Receivables as and in
the manner contemplated by this Agreement and the Royalties Transfer Agreements
on the Initial Funding Date is sufficient to, and does, fully and validly sell,
transfer and contribute to the Borrower all right, title and interest of the
Seller in, to and under to all Royalties Receivables, and on such date the
Borrower has hereby purchased, accepted and acquired all legal and equitable
title to and owns such Royalties Receivables free and clear of any Liens other
than the Lien of the Collateral Agent contemplated by the Credit
Agreement.  Such Sale and Contribution of the Royalties Receivables on the
Initial Funding Date is sufficient to permit the Borrower to avail itself of all
protections available under Applicable Law against the claims of any present or
future creditors of or purchasers from the Seller or the Project Company (other
than recipients, assignees or transferees of the Project Company's rights from
the Project Company pursuant to a Forced Transfer) and to prevent any other
actual or purported sale, transfer, assignment, pledge, contribution or
hypothecation of the Royalties Receivables by the Seller or the Project Company
(other than pursuant to a Forced Transfer from the Project Company) from being
enforceable; provided that the Seller did not have any rights against
third-party purchasers in respect of after-extracted oil or gas that such
third-party purchases directly from the Project Company.
 
(ii) Without limiting the foregoing, all filings, recordings, registrations or
other actions required in any applicable jurisdiction in order to perfect,
protect and enforce the Borrower’s title to and sole ownership of the Royalties
Receivables as against the interest of any other Person, including any actual or
purported purchasers from, or creditors of, the Seller or the Project Company
(other than recipients, assignees or transferees of the Project Company's rights
from the Project Company pursuant to a Forced Transfer) have been duly made or
taken on or prior to the Initial Funding Date and remain in full force and
effect; provided, that the Borrower will not have any rights against third-party
purchasers in respect of after-extracted oil or gas that such third-party
purchases directly from the Project Company.
 
 
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(i) Back-up Security. (i)   To the extent that the Seller retains an interest in
the Royalties Receivables despite the Sale and Contribution thereof contemplated
hereunder, the provisions of this Agreement and the Royalties Transfer
Agreements effect, under Non-Israeli  Applicable Law, the grant, assignment and
pledge to the Borrower by the Seller of the Security Interest in the Royalties
Receivables contemplated hereby, and the Borrower has hereby acquired a valid
and, as of the Initial Funding Date, first priority, perfected Security Interest
under Non-Israeli Applicable Law in such Royalties Receivables, prior and
superior to all other Liens (other than the Lien of the Collateral Agent
contemplated by the Credit Agreement).  Without limiting the provisions of
Section 5.2(h)(i), as of the Initial Funding Date, this Agreement and the
Royalties Transfer Agreements are collectively sufficient to permit the Borrower
to avail itself of all protections available under Non-Israeli Applicable Law
against the claims of any present or future creditors of or purchasers from the
Seller or the Project Company (other than recipients, assignees or transferees
of the Project Company's rights from the Project Company pursuant to a Forced
Transfer) and to prevent any other actual or purported assignment of or pledge
or grant of security in such Royalties Receivables by the Seller or the Project
Company from being enforceable under Non-Israeli Applicable Law; provided that
the Seller did not have any rights against third-party purchasers in respect of
after-extracted oil or gas that such third-party purchases directly from the
Project Company.
 
(ii) This Agreement, together with the UCC Financing Statements described in
Section 3.02(d)(ii) of the Credit Agreement and filed in the State of Delaware
on or prior to the Notice Date for the Initial Series, creates a valid,
continuing and, as of the Initial Funding Date, perfected security interest (as
defined in the applicable UCC) in the Royalties Receivables in favor of the
Borrower, which security interest is, as of the Initial Funding Date, prior and
superior to all other Liens (other than the Lien of the Collateral Agent
contemplated by the Credit Agreement) and enforceable as such under Non-Israeli
Applicable Law against creditors of, subject to applicable bankruptcy,
insolvency, reorganization, moratorium or other laws affecting creditors’ rights
generally, the Seller, the Project Company and the Borrower and against
purchasers from the Borrower, the Seller, and the Project Company (other than
recipients, assignees or transferees of the Project Company's rights from the
Project Company pursuant to a Forced Transfer); provided, that the Borrower will
not have any rights against third-party purchasers in respect of after-extracted
oil or gas that such third-party purchases directly from the Project Company.
 
 
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(iii) Without limiting the foregoing, all other filings, recordings,
registrations or other actions required in any applicable jurisdiction other
than the State of Israel in order to evidence, perfect and protect the
Borrower’s Security Interest in the Collateral as prior and superior in right to
any other Lien (other than the Lien of the Collateral Agent contemplated by the
Credit Agreement), and enforceable under Non-Israeli Applicable Laws as such,
including as against any creditors of, subject to applicable bankruptcy,
insolvency, reorganization, moratorium or other laws affecting creditors’ rights
generally, the Seller, the Project Company and the Borrower and against
purchasers from the Borrower, the Seller, and the Project Company (other than
recipients, assignees or transferees of the Project Company's rights from the
Project Company pursuant to a Forced Transfer), have been duly made or taken on
or prior to the Initial Funding Date and remain in full force and effect;
provided, that the Borrower will not have any rights against third-party
purchasers in respect of after-extracted oil or gas that such third-party
purchases directly from the Project Company.
 
(j) Other Evidence of Ownership or Security.  The Seller has not authorized the
filing, registration or recording of, nor is the Seller aware of, any financing
statements or any other registrations, deeds, documents or other instruments
against the Seller or its interest in the Royalties Receivables that include a
description of the Royalties Receivables or any component thereof (other than
the financing statements, registrations and recordings relating to the Sale and
Contribution of the Royalties Receivables to the Borrower hereunder and the Lien
of the Borrower granted, pledged and assigned hereunder).
 
Section 5.03 Breach of Representations and Warranties.  The representations and
warranties set forth in this Article 5 shall survive the Sale and Contribution
of the Royalties Receivables by the Seller to the Borrower.  Upon discovery by
the Borrower or the Seller of any breach of a representation or warranty set
forth in this Article 5, the party discovering the same shall give prompt
written notice thereof to the other party and the Facility Agent.
 
ARTICLE 6
SELLER COVENANTS
 
The Seller covenants and agrees that, unless otherwise consented to by the
Borrower and the Facility Agent (at the written direction of the Required
Lenders), it will perform, observe and comply with the following.
 
Section 6.01 Reporting Requirements.  Unless otherwise provided below, the
Seller or its designee will deliver to the Facility Agent:
 
(a) Annual Financial Reporting.  as soon as available and in any event within
120 days after the close of each of its fiscal years, the audited consolidated
financial statements for the Seller and its Subsidiaries (including the
Borrower) for such fiscal year prepared in accordance with GAAP and accompanied
by an opinion, which opinion shall be prepared in accordance with GAAP and shall
not be subject to any “going concern” or like qualification or exception or any
qualification or exception as to the scope of such audit, of the Seller’s
accountants (the “Accountants”), who shall be MaloneBailey LLP or such other
internationally recognized independent registered certified public accounting
firm acceptable to the Facility Agent (at the written direction of the Required
Lenders);
 
 
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(b) Quarterly Reporting.  within 45 days after the close of each quarterly
period of each of its fiscal years, balance sheets for the Seller and the
Borrower as of the close of each such period and statements of income and
retained earnings and a statement of cash flows for the Seller and the Borrower
for the period from the beginning of such fiscal year to the end of such
quarter, all prepared in accordance with GAAP (subject to normal year-end
adjustments and without footnotes) and certified by such Person’s president,
executive vice president, chief executive officer or chief financial officer;
 
(c) Compliance Certificate.  together with the financial statements required
hereunder, a Compliance Certificate signed by such Person’s president, executive
vice president, chief executive officer or chief financial officer and dated the
date of such annual financial statement or quarterly financial statement;
 
(d) ERISA.  promptly (and in any event within five (5) Business Days) after: (A)
a responsible officer of the Seller knows or has reason to believe that an ERISA
Event with respect to any Plan or Multiemployer Plan has occurred or exists and
(B) the filing or receiving thereof, copies of all reports and notices with
respect to any “Reportable Event” as defined in Section 4043(c) of ERISA which
the Seller or any ERISA Affiliate files under ERISA with the Internal Revenue
Service or the Pension Benefit Guaranty Corporation or the U. S. Department of
Labor or which the Seller or any ERISA Affiliate receives from any such Person;
 
(e) Notices.  promptly upon (and in any event within two (2) Business Days
after) the Seller’s receipt, copies of:
 
(i) any notice of or request for cancellation, termination, consent, direction,
approval, extension, waiver, default, action, breach, grant of indulgence,
amendment, supplement or other modification of any Credit Document other than
any amendment permitted by Section 9.01 of the Credit Agreement; and
 
(ii) any other material notice, financial statement, certification, report or
other material communication from any Person under or in connection with any
Credit Document (other than the Facility Agent);
 
(f) Other Information.  such other information as the Borrower or the Facility
Agent (including at the direction of the Required Lenders) may from time to time
reasonably request; and
 
(g) Royalties-related Taxes. with respect to Royalties-related Taxes, notice:
 
(i) promptly (and in any event within two (2) Business Days), of any
Royalties-related Taxes being withheld from the Royalties or otherwise deducted
from any payments to the Facility Account, such notice to be evidenced by: (A) a
certificate of an Authorized Officer of the Seller, accompanied by evidence
satisfactory to the Facility Agent of such withholding or deduction by the
relevant Person, (1) certifying the amount withheld or deducted, the detailed
calculation thereof (including each of the then-current effective applicable tax
rates and the net income or assumed net income of the Borrower subject to such
tax rate), the applicable tax authority for whom such amount was withheld or
deducted and to whom such amount is due, the date such amount is due to be paid
to the applicable tax authority and that such amount was withheld from the
Royalties or otherwise deducted from any payments to the Facility Account solely
in respect of Royalties-related Taxes and (2) covenanting and agreeing (which,
for the avoidance of doubt, shall constitute covenants and agreements of the
Seller under this Agreement) to pay or cause to be paid all such withheld or
deducted amounts to the applicable tax authority on or prior to the date when
due and (B) only with respect to Royalties-related U.S. Taxes, a certificate of
the Accountants making the same certifications contained in subclause (A)(1)
immediately above, each certificate in subclause (A) and (B) to be in form and
substance satisfactory to the Facility Agent;
 
 
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(ii) on the fifth (5th) Business Day prior to each Payment Date, of any
Royalties-related Taxes not withheld from the Royalties or otherwise deducted
from any payments to the Facility Account, such notice to be evidenced by: (A) a
certificate of an Authorized Officer of the Seller (1) certifying the amount
required to be deposited in the Royalties Tax Account to pay Royalties-related
Taxes to the applicable tax authority, the detailed calculation thereof
(including each of the then-current effective applicable tax rates and the net
income or assumed net income of the Borrower subject to such tax rate), the
applicable tax authority to whom such amount is due to be paid, the
Royalties-related Taxes in respect of which such amount must be paid, the date
such amount is due to be paid to the applicable tax authority and (2)
representing and warranting (which, for the avoidance of doubt, shall constitute
representations and warranties of the Seller under this Agreement) that such
amount was not (nor was any portion thereof) withheld from the Royalties or
otherwise deducted from any payments to the Facility Account and (B) only with
respect to Royalties-related U.S. Taxes, a certificate of the Accountants making
the same certifications contained in subclause (A)(1) immediately above, each
certificate in subclause (A) and (B) to be in form and substance satisfactory to
the Facility Agent; and
 
(iii) on the fifth (5th) Business Day prior to the date on which any
Royalties-related Tax is due, of the details of any such Royalties-related Tax,
such notice to be evidenced by:
 
(A) with respect to Royalties-related U.S. Taxes, a certificate from the
Accountants, certifying: (1) the amount of each Royalties-related U.S. Tax that
is due to be paid, (2) the applicable U.S. Federal tax authority to whom each
such Royalties-related U.S. Tax is due and the payment details therefor, and (3)
the Business Day on which each such payment is due (which date shall be at least
five (5) Business Days after the date such notice is received by the Facility
Agent but prior to the next Payment Date);
 
(B) with respect to Royalties-related Taxes to be paid to an Israeli tax
authority, a certificate from an Authorized Officer of the Seller, certifying:
(1) the amount of each Royalties-related Tax that is due to be paid, (2) the
applicable Israeli tax authority to whom each such Royalties-related Tax is due
and the payment details therefor, and (3) the Business Day on which each such
payment is due (which date shall be at least five (5) Business Days after the
date such notice is received by the Facility Agent but prior to the next Payment
Date); and
 
 
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(C) a certificate from an Authorized Officer of the Seller, certifying that no
amount in respect of such Royalties-related Tax has been, or will be, withheld
from the Royalties or otherwise deducted from any payments to the Facility
Account and that all required tax returns with respect to such payment have been
duly filed (which certifications, for the avoidance of doubt, shall constitute
representations, warranties and covenants of the Seller under this Agreement);
and
 
(h) Section 104G of the Israeli Income Tax Ordinance.  within thirty (30) days
after the Initial Funding Date, a copy of the completed forms required to filed
by the Seller and the Borrower under Section 104G of the Israeli Income Tax
Ordinance with the Israeli Tax Assessor.
 
All financial statements required to be delivered in respect of the Seller
pursuant to this Section 6.01 must be delivered on both a consolidated (with its
consolidated subsidiaries) and a consolidating basis.
 
Section 6.02 Notices.  The Seller will notify the Borrower and the Facility
Agent in writing of any of the following promptly (and in any event within two
(2) Business Days) after obtaining knowledge or receiving notice thereof,
describing the same and, if applicable, the steps being taken with respect
thereto:
 
(a) Defaults and Events of Default.  The existence of any condition or event
that constitutes a default, event of default, acceleration or similar event
under any Credit Document or that notice has been given to the Seller with
respect thereto;
 
(b) Litigation. The institution or threat of any Adverse Proceeding that (i)
challenges the Borrower’s ownership of or rights in the Royalties Receivables or
the validity or enforceability of any of the Royalties Transfer Agreements to
which the Seller is a party, (ii) challenges or seeks to prevent the Sale and
Contribution of the Royalties Receivables by the Seller to the Borrower or the
entry into or performance by the Seller of any Credit Document or any of the
transactions contemplated thereby, or (iii) seeks any determination or ruling
that could reasonably be expected to have a Material Adverse Effect or a
material adverse effect on the Royalties Receivables, including the validity,
enforceability, priority, identifiability or collectability thereof (in each
case in favor of the Borrower or the Collateral Agent) or the Borrower’s rights
in respect thereof, or on the rights, remedies or benefits of the Borrower under
any Credit Document;
 
(c) Liens.  The existence or claim of any Lien on any of the Royalties
Receivables (other than the Liens in favour of the Borrower or the Collateral
Agent); and
 
(d) Material Adverse Effect.  The existence or occurrence of any event which has
or could reasonably be expected to have a Material Adverse Effect.
 
Section 6.03 Compliance with Laws, Contractual Obligations.  The Seller will
comply: (a) with all applicable statutes, laws, rules, regulations, orders
writs, judgments, injunctions, decrees or awards to which it may be subject, and
all applicable restrictions imposed by, all Governmental Authorities, except to
the extent that failure to comply, individually or in the aggregate, could not
reasonably be expected to have a Material Adverse Effect, (b) with all Credit
Documents to which it is a party and (c) with all Governmental Approvals; it
being understood that such compliance by the Seller with any Governmental
Approval shall not excuse, nullify or waive any breach by the Seller of any of
its covenants, agreements or obligations under this Agreement or any other
Credit Document to which it is a party that may result from such compliance.
 
 
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Section 6.04 Payment of Taxes.  The Seller will pay and discharge, before the
same shall become delinquent all Taxes, assessments and governmental charges or
levies imposed upon it or upon its property and all Taxes for which the Seller
is responsible under the terms of this Agreement, any other Credit Document or
the Israeli Tax Ruling and will indemnify and hold the Borrower and its
assignees, including the Collateral Agent, harmless, on an after-tax basis, from
and against any and all such Taxes; provided, that no such Tax need be paid if
it is being contested in good faith by appropriate proceedings promptly
instituted and diligently conducted, so long as (i) adequate reserves or other
appropriate provisions as shall be required in conformity with GAAP have been
made therefor, and (ii) such delay or failure to pay or discharge such Tax has
not and could not result in a Lien against any of the Royalties Receivables,
Collateral, Seller Collateral or Excluded Property.
 
Section 6.05 Transfer Taxes; Taxes upon Enforcement. (a)  In the event that the
Seller receives notice of any Transfer Taxes arising out of the Sale and
Contribution of the Royalties Receivables, the Seller will promptly pay all such
Transfer Taxes and will indemnify and hold the Borrower and its assignees,
including the Collateral Agent, harmless, on an after-tax basis, from and
against any and all such Transfer Taxes.
 
(b) If the Borrower or, in connection with the enforcement of its rights and
remedies under the Security Documents, the Collateral Agent (itself or through
an agent or nominee, in each case for the benefit of the Secured Parties) is
required under Applicable Law to withhold, deduct and/or pay any Taxes in
respect of a sale or other disposition of the Royalties Receivables or other
Collateral (other than value added taxes, which the parties agree shall be paid
by the purchaser in respect of such sale or disposition), then the Borrower or
the Collateral Agent, as the case may be, will withhold, deduct and/or pay such
Taxes, including from the proceeds of such a sale or other disposition, to the
applicable tax authority to whom such Taxes are due.  The Seller shall promptly
pay to the Borrower or the Collateral Agent, as the case may be, an amount equal
to all such Taxes withheld, deducted and/or paid by the Borrower or the
Collateral Agent, as the case may be, and will indemnify and hold the Borrower
or the Collateral Agent, as the case may be, harmless, on an after-tax basis,
from and against any and all such Taxes.
 
Section 6.06 Preservation of Corporate Existence, Etc.  The Seller will at all
times preserve and keep in full force and effect and in good standing its
corporate existence and all rights, rights and franchises, licenses, permits and
foreign qualifications material to its business, to its performance of its
obligations under the Credit Documents and to its exercise of its rights and
remedies under the Royalties Transfer Agreements.
 
 
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Section 6.07 Sale of Royalties Receivables. With respect to Royalties that are
sold, transferred and conveyed to the Seller pursuant to related Royalties
Transfer Agreements and the Royalties Receivables that are Sold and Contributed
to the Borrower pursuant hereto and the related Royalties Transfer Agreements,
the Seller shall take all actions necessary to sell, contribute, transfer and
vest, perfect, maintain, protect, more fully evidence, enforce and defend the
Borrower’s legal and equitable title to and sole ownership of the Royalties
Receivables pursuant to and in accordance herewith and the related Royalties
Transfer Agreements and all Applicable Laws, including:
 
(a) the giving of all notices and the filing of all financing statements or
other similar instruments or documents reasonably necessary under the UCC of all
appropriate jurisdictions and the executing, delivering, registering, recording
or filing of such other instruments, documents or notices as may be necessary or
appropriator under any other Applicable Law to perfect, maintain, protect and
defend the Borrower’s sole ownership of such Royalties Receivables as against
any purchasers from, or creditors of, the Seller, the Project Company or any
other Person (other than recipients, assignees or transferees of the Project
Company's rights pursuant to a Forced Transfer); provided that the Seller did
not have any rights against third-party purchasers in respect of after-extracted
oil or gas that such third-party purchases directly from the Project Company,
 
(b) the registration (and maintenance of such registration) in the Petroleum
Register of the sole ownership of and rights to the Royalties Receivables in the
name of the Borrower, and
 
(c) such other actions as the Borrower or the Facility Agent (including at the
written direction of the Required Lenders) may reasonably request.
 
Section 6.08 Security Interest.  The Seller shall take (or cause to be taken)
all necessary actions to create, evidence, maintain, protect and defend, under
Non-Israeli Applicable Law, a valid, enforceable and perfected Security Interest
in the Royalties Receivables in favor of the Borrower and the Collateral Agent,
for the benefit of the Secured Parties, prior and superior in right to all other
Liens and enforceable as such against creditors of, subject to applicable
bankruptcy, insolvency, reorganization, moratorium or other laws affecting
creditors’ rights generally, the Seller, the Project Company or the Borrower,
against purchasers from the Borrower or the Seller, and against purchasers from
the Project Company (other than recipients, assignees or transferees of the
Project Company's rights from the Project Company pursuant to a Forced
Transfer), including:
 
(a) the giving of all notices and the filing of all financing or continuation
statements or amendments thereto or other similar instruments or documents
reasonably necessary under the UCC or any other non-Israeli Applicable Laws of
all appropriate jurisdictions and the executing, delivering, registering or
filing of such other instruments, documents or notices as may be necessary or
appropriator under any other Non-Israeli Applicable Law, and
 
(b) such other actions as the Borrower or the Collateral Agent (including at the
written direction of the Required Lenders) may reasonably request;
 
 
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provided, that the Collateral Agent will not have the right to collect Royalties
from third-parties that have purchased after-extracted oil or gas directly from
the Project Company.
 
Section 6.09 Performance and Enforcement of Documents.  (a)   Subject to
6.01(d)(ii) of the Seller Security Agreement, the Seller will: (i) maintain each
Credit Document to which it is a party in full force and effect, (ii) timely and
fully perform, observe and comply with all of the provisions, covenants and
other terms required to be performed or observed by it under each Credit
Document to which it is a party in accordance with its terms, and (iii)
notwithstanding clause (ii), take any action in respect of the Royalties
Receivables under any Royalties Transfer Agreement, the Royalties Payment
Instruction or otherwise in respect of the Royalties Receivables, solely as
directed by or with the consent of the Collateral Agent (as reasonably directed
in writing by the Required Lenders), including: (A) making claims to which the
Seller may be entitled under any indemnity reimbursement or similar provision
contained therein, (B) enforcing its rights and remedies (and the rights and
remedies of the Collateral Agent, as assignee of the Borrower) thereunder,
including any audit and inspection rights thereunder, (C) making demands or
requests for information or reports or for action from any other party thereto,
or (D) approving or denying any request for any consent, direction, approval,
extension, waiver, grant of indulgence, amendment, supplement, modification,
cancellation or termination of or under any Royalties Transfer Agreement in
respect of the Royalties Receivables or otherwise in respect of the Royalties
Receivables.
 
(b) The Seller will promptly (and in any event within two (2) Business Days)
after its receipt of any request, notice or other correspondence with respect to
clause (a) above, notify the Facility Agent and provide it with a copy thereof.
 
(c) The Seller will not interfere in any manner that could reasonably be
expected to have a Material Adverse Effect, including a material adverse effect
on any right, power or remedy of the Collateral Agent or the Facility Agent
provided for in this Agreement or in any other Credit Document or now or
hereafter existing at law or in equity or by statute or otherwise, or the
exercise or beginning of the exercise by the Collateral Agent of any one or more
of such rights, powers or remedies.
 
Section 6.10 True Sale.  The Seller shall take (or shall cause to be taken) all
such actions as are necessary on its part to ensure that the facts and
assumptions set forth in the opinion of Freshfields Bruckhaus Deringer US LLP,
counsel for the Borrower, dated the Notice Date for the Initial Series under the
Credit Agreement and relating to true sale and contribution issues under this
Agreement, and in the certificates accompanying such opinion, remain true and
correct at all times.
 
Section 6.11 Payments.  The Seller shall and shall direct any other applicable
Person, to: (a) remit all amounts in respect of the Royalties Receivables,
directly to the Facility Account and (b) direct the Project Company and any
other applicable Person to (i) remit all amounts in respect of the Royalties
Receivables, directly to the Facility Account and (ii) direct the Project
Account Bank and any other applicable Person to remit all amounts in respect of
the Royalties Receivables, directly to the Facility Account.  The Seller shall,
and shall direct any other applicable Person, to cause any amounts received by
it in respect of the Royalties Receivables to be remitted directly to the
Facility Account as soon as practicable and in any event within one (1) Business
Day of its receipt of the same, and, at all times prior to such remittance, to
hold such amounts in trust, for the exclusive benefit of the Collateral Agent on
behalf of the Secured Parties.
 
 
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Section 6.12 No Further Sale or Transfer.  Except for the Sale and
Contribution  hereunder, the Seller will not (and will not purport to) sell,
pledge, assign, transfer, contribute or otherwise convey to any other Person, or
take any other action inconsistent with the Borrower’s ownership of the
Royalties Receivables or the Collateral Agent’s interests therein, or grant,
create, incur, assume or suffer to exist any Lien (other than Liens in favor of
the Borrower and the Collateral Agent for the benefit of the Secured Parties),
on the Royalties Receivables or any interest therein.
 
Section 6.13 Defense of Right, Title and Interest.  The Seller will not claim
any ownership interest in the Royalties Receivables conveyed to the Borrower and
will defend the right, title and interest of the Borrower and the Collateral
Agent in, to and under the Royalties Receivables, whether now existing or
hereafter created, against all claims of third parties claiming through or under
the Seller.
 
Section 6.14 Books, Records and Accounts
 
(a) .  In view of the intention of the parties hereto that the Sale and
Contribution made hereunder constitute an absolute sale and contribution of the
Royalties Receivables rather than a loan secured thereby, the Seller agrees: (a)
to note on its financial statements and in its Records that the Royalties
Receivables have been Sold and Contributed to the Borrower, (b) treat such Sale
and Contribution as a true and absolute sale for accounting and all other
purposes, and (c) not to take any action inconsistent with the ownership of the
Royalties Receivables by the Borrower or claim any ownership interest in the
Royalties Receivables.
 
Section 6.15 Change of Name; Jurisdiction of Organization.  At least thirty (30)
days before making any change to: (a) its name (including the use of any trade
names, fictitious names, assumed names or “doing business as” names); (b) its
jurisdiction of organization; (c) its form of organization; (d) the location of
its chief executive office, its principal place of business or any office in
which it maintains books or records relating to the Royalties Receivables; or
(e) its federal taxpayer identification number, the Seller will deliver to the
Borrower and the Facility Agent (x) written notice of such proposed change, and
(y) an opinion of counsel, in form and substance reasonably satisfactory to the
Borrower and the Facility Agent, to the effect that all actions have been taken
and all filings, registrations and recordings have been made, as are necessary
to continue and maintain the Borrower’s first priority perfected ownership of,
security interest in and Lien on the Royalties Receivables.
 
Section 6.16 Separateness Covenants.
 
(a) The Seller will not take any actions or fail to take any actions that would
cause the Borrower to violate the covenants set forth in Section 5.04 of the
Credit Agreement.
 
(b) The Seller will conduct its business and activities, and will cause each of
its Subsidiaries to conduct its business and activities, such that it is a
separate and readily identifiable business from, and independent of, the
Borrower.  Without limiting the foregoing, the Seller shall:
 
 
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(i) not hold the Borrower out as a department, division or other part of the
Seller;
 
(ii) not seek credit based on the assets of the Borrower;
 
(iii) maintain separate records, books and accounts from those of the Borrower
and not commingle its own assets with those of the Borrower;
 
(iv) not satisfy obligations of the Borrower from its own assets or satisfy its
own obligations from the assets of the Borrower;
 
(v) not assume any Indebtedness, obligations or liabilities of the Borrower;
 
(vi) at all times comply in all material respects with the provision of the
Credit Documents requiring all records with respect to the Royalties Receivables
to clearly indicate the ownership by the Borrower and the interest of the
Collateral Agent;
 
(vii) not fail to correct any misunderstanding that might arise about the
ownership of the Royalties Receivables by the Borrower and the interest of the
Collateral Agent therein; and
 
(viii) not take any other action inconsistent with the ownership of the
Royalties Receivables transferred to the Borrower hereunder and the interest of
the Collateral Agent therein.
 
Section 6.17 Value of Assets.  The Seller shall not take any action, or omit to
take any action, if the effect of such action or omission is to reduce or impair
the rights of the Borrower or the Collateral Agent with respect to the Royalties
Receivables or the value of the Royalties Receivables.
 
Section 6.18 Agreements; Amendments.  The Seller will not, without the prior
written consent of the Facility Agent (at the written direction of the Required
Lenders): (a) (i) cancel or terminate, (ii) give any consent, waiver, direction
or approval under, (iii) waive any default, action, omission or breach, or
otherwise grant any indulgence, under, or (iv) amend, supplement or otherwise
modify any of the material terms of, any Credit Document to which it is a party
or with respect to which it has the power to take such action, or (b) direct the
Project Company to take, or consent to their taking, any of the actions in
clause (a) with respect to the Royalties Receivables, including under any
Royalties Transfer Agreement to which they are a party.
 
Section 6.19 Project Company Charge.  For the avoidance of doubt: (a) the
representations, warranties and covenants set forth in Sections 5.02(g), (h) and
(i), 6.07 and 6.08 of this Agreement are subject to the fact that the Project
Company has previously charged all of its rights to the Lease and the Project;
provided, that the Royalties and the other Collateral are not subject to such
charge, and the foregoing statement shall not in any way limit the Seller’s
representations, warranties and covenants with respect to such Royalties or
other Collateral, including the ownership thereof and Security Interest therein,
and (b) the Project Company is liable to pay Statutory Royalties as a first and
prior payment from its revenues from the Project, and such amounts do not
constitute Royalties.
 
 
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ARTICLE 7
INDEMNIFICATION
 
Section 7.01 Indemnification.  Without limiting any other rights that the
Borrower, its successors, transferees and assigns, and the officers, directors,
employees, attorneys, agents and representatives of each of the foregoing (each,
a “Borrower Indemnified Person”) may have hereunder or under Applicable Law, the
Seller hereby agrees to indemnify and hold harmless each such Borrower
Indemnified Person from and against any and all damages, losses, claims,
liabilities, suits, actions, proceedings, injuries, costs and expenses,
including reasonable attorneys’ fees and disbursements and all costs of
investigation or defense, including those incurred upon any appeal, and whether
any such damages, losses, injuries, liabilities or expenses are incurred by a
Borrower Indemnified Person as an actual or potential party, witness or
otherwise (collectively, “Borrower Indemnified Liabilities”) that may be
instituted, asserted or awarded against or incurred by any such Borrower
Indemnified Person to the extent arising from, relating to or out of or incurred
in connection with this Agreement, any of the other Credit Documents to which
the Seller is a party, or the purchase, acquisition or acceptance of the
Royalties Receivables; provided, that the Seller shall not be liable for any
indemnification to a Borrower Indemnified Person to the extent that any such
Borrower Indemnified Liabilities:  (i) result solely from such Borrower
Indemnified Person’s gross negligence or willful misconduct, as finally
determined by a court of competent jurisdiction, or (ii) constitute recourse to
the Seller for uncollectible or uncollected amounts related to the Royalties
Receivables due solely to the failure or inability on the part of the Project
Company to perform its obligations under the Royalties Transfer
Agreements.  Without limiting the generality of the foregoing indemnification,
and subject to the foregoing proviso, the Seller shall indemnify each Borrower
Indemnified Person for Borrower Indemnified Liabilities to the extent relating
to, arising from or incurred in connection with any of the following:
 
(a) reliance on any representation or warranty made or deemed made by the Seller
under or in connection with this Agreement or any other Credit Document,
including any certificate executed in connection herewith or therewith (without
regard to any qualifications concerning the occurrence or non-occurrence of a
Material Adverse Effect or similar concepts of materiality) or on any other
information prepared and delivered by the Seller pursuant hereto or thereto
(which shall not, for the avoidance of doubt, include any information prepared
by the Project Company, including the Project Company Forecast Model) that shall
have been incorrect when made or deemed made or delivered;
 
(b) the failure by the Seller to comply with any term, provision or covenant
contained in this Agreement, any other Credit Document to which it is a party or
any agreement executed in connection herewith or therewith (without regard to
any qualifications concerning the occurrence or non-occurrence of a Material
Adverse Effect or similar concepts of materiality) or with any Applicable Law,
rule or regulation with respect to the Royalties Receivables;
 
 
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(c) any investigation, litigation or proceeding related to this Agreement or any
other Credit Document to which the Seller is a party, including the use of
proceeds of the Sale and Contribution made pursuant to this Agreement or any
other Credit Document to which the Seller is a party, or to the ownership of or
interest in the Royalties Receivables, or any other investigation, litigation or
proceeding relating to the Seller in which any Borrower Indemnified Person
becomes involved as a result of any of the transactions contemplated hereby or
by any other Credit Document to which the Seller is a party;
 
(d) the failure of the Borrower to have sole title to and first priority,
perfected record sole ownership of the Royalties Receivables free and clear of
any Lien except the Liens in favor of the Collateral Agent contemplated hereby
and by the Credit Agreement;
 
(e) the failure of the Borrower to have a first priority, perfected Security
Interest in the Royalties Receivables under Non-Israeli Applicable Law that is
prior and superior to any other Lien except the Liens in favor of the Collateral
Agent contemplated hereby and by the Credit Agreement;
 
(f) the failure by the Seller to (or to assist the Borrower or the Collateral
Agent to) file, or any delay in filing, registering or recording any financing
statements, continuation statements, amendments thereto or any other instruments
or documents, under the applicable UCC or the other Applicable Laws specified
herein or in any other Credit Document to which the Seller is a party with
respect to the Sale and Contribution of, or the grant of a Security Interest in,
any Royalties Receivables hereunder or thereunder, or the sale, assignment or
transfer of the Royalties to the Seller thereunder;
 
(g) the failure to pay when due any Taxes, including sales, excise, income or
personal property taxes payable by the Seller in connection with the Royalties
Receivables or otherwise relating to the transactions contemplated by the Credit
Documents; or
 
(h) the payment by such Borrower Indemnified Person of taxes, including any
taxes imposed by any jurisdiction on amounts payable and any liability
(including penalties, interest and expenses) arising therefrom or with respect
thereto, to the extent caused by the Seller’s actions or failure to act in
breach of this Agreement or any other Credit Document to which the Seller is a
party.
 
Any amounts subject to the indemnification provisions of this Section shall be
paid by the Seller to the applicable Borrower Indemnified Person within ten (10)
Business Days following written demand therefor.
 
ARTICLE 8
MISCELLANEOUS PROVISIONS
 
Section 8.01 Amendments; Waivers.
 
 
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(a) Neither this agreement nor any provision hereof may be amended, modified,
terminated or waived unless the same shall be in writing, executed by the
parties hereto, with the prior written consent of the Facility Agent (at the
direction of the Required Lenders).
 
(b) Neither the failure nor delay on the part of the Seller or the Borrower to
exercise any right, power or privilege under this Agreement and no course of
dealing between the Seller and the Borrower shall operate as a waiver thereof,
nor shall any single or partial exercise of any right, power or privilege under
this Agreement preclude any other or further exercise thereof, or the exercise
of any other right, power or privilege.  No notice to or demand on the Seller or
the Borrower in any case shall entitle the Seller or the Borrower, as
applicable, to any other or further notice or demand in similar or other
circumstances or constitute a waiver of the right of the Seller or the Borrower
to any other or further action in any circumstances without notice or demand.
 
Section 8.02 Governing Law; Waiver of Jury Trial; Submission to Jurisdiction.
 
(a) This Agreement and the rights and obligations of the parties hereunder shall
be governed by, and construed and enforced in accordance with, the laws of the
State of New York including Section 5-1401 and Section 5-1402 of the New York
General Obligations Law, but otherwise without regard to the State of New York's
conflict of laws provisions that would result in the application of the laws of
any other jurisdiction.
 
(b) All judicial proceedings brought against any party arising out of or
relating hereto or any other Credit Document, or any of the obligations
hereunder, may be brought in any state or federal court of competent
jurisdiction sitting in the Borough of Manhattan in the City of New York.  by
executing and delivering this Agreement, each of the parties, for itself and in
connection with its properties, irrevocably (i) accepts generally and
unconditionally the nonexclusive jurisdiction and venue of such courts; (ii)
waives any defense of forum non conveniens; (iii) agrees that service of all
process in any such proceeding in any such court may be made by registered or
certified mail, return receipt requested, to such party at its address set forth
in Section 8.03 of this Agreement and agrees that such any service is sufficient
to confer personal jurisdiction over such party in any such proceeding in any
such court, and otherwise constitutes effective and binding service in every
respect; and (iv) agrees that agents retain the right to serve process in any
other manner permitted by law or to bring proceedings against each party in the
courts of any other jurisdiction.
 
(c) Each of the parties hereby agrees that process (b) may be served on it by
certified mail, return receipt requested, to the addresses pertaining to it as
specified in Section 8.03. any and all service of process and any other notice
in any such action, suit or proceeding shall be effective against such party if
given by registered or certified mail, return receipt requested, or by any other
means or mail which requires a signed receipt, postage prepaid, mailed as
provided above.
 
(d) EACH OF THE PARTIES HERETO HEREBY AGREES TO WAIVE ITS RESPECTIVE RIGHTS TO A
JURY TRIAL OF ANY CLAIM OR CAUSE OF ACTION BASED UPON OR ARISING HEREUNDER OR
UNDER ANY OF THE OTHER CREDIT DOCUMENTS OR ANY DEALINGS BETWEEN THEM RELATING TO
THE SUBJECT MATTER OF THIS AGREEMENT.  THE SCOPE OF THIS WAIVER IS INTENDED TO
BE ALL ENCOMPASSING OF ANY AND ALL DISPUTES THAT MAY BE FILED IN ANY COURT AND
THAT RELATE TO THE SUBJECT MATTER OF THIS AGREEMENT, INCLUDING CONTRACT CLAIMS,
TORT CLAIMS, BREACH OF DUTY CLAIMS AND ALL OTHER COMMON LAW AND STATUTORY
CLAIMS.  EACH PARTY HERETO ACKNOWLEDGES THAT THIS WAIVER IS A MATERIAL
INDUCEMENT TO ENTER INTO A BUSINESS RELATIONSHIP, THAT EACH HAS ALREADY RELIED
ON THIS WAIVER IN ENTERING INTO THIS AGREEMENT, AND THAT EACH WILL CONTINUE TO
RELY ON THIS WAIVER IN ITS RELATED FUTURE DEALINGS.  EACH PARTY HERETO FURTHER
WARRANTS AND REPRESENTS THAT IT HAS REVIEWED THIS WAIVER WITH ITS LEGAL COUNSEL
AND THAT IT KNOWINGLY AND VOLUNTARILY WAIVES ITS JURY TRIAL RIGHTS FOLLOWING
CONSULTATION WITH LEGAL COUNSEL.  THIS WAIVER IS IRREVOCABLE, MEANING THAT IT
MAY NOT BE MODIFIED EITHER ORALLY OR IN WRITING (OTHER THAN BY A MUTUAL WRITTEN
WAIVER SPECIFICALLY REFERRING TO THIS SECTION 8.02 AND EXECUTED BY EACH OF THE
PARTIES HERETO), AND THIS WAIVER SHALL APPLY TO ANY SUBSEQUENT AMENDMENTS,
RENEWALS, SUPPLEMENTS OR MODIFICATIONS HERETO OR ANY OF THE OTHER CREDIT
DOCUMENTS OR TO ANY OTHER DOCUMENTS OR AGREEMENTS RELATING TO THIS
AGREEMENT.  IN THE EVENT OF LITIGATION, THIS AGREEMENT MAY BE FILED AS A WRITTEN
CONSENT TO A TRIAL BY THE COURT.
 
 
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Section 8.03 Notices.
 
(a) Unless otherwise specifically provided herein, any notice or other
communication herein required or permitted to be given to the Seller, the
Borrower, the Collateral Agent or the Facility Agent shall be sent to such
Person at the following address:
 
(i) if to the Borrower:
Tamar Royalties LLC
2425 West Loop South, Suite 810
Houston, Texas 77027
Tel: (713) 621-6785
Fax: (713) 621-3988
Attention: Haim Tsuff;

with a copy to:

Isramco, Inc.
2425 West Loop South, Suite 810
Houston, Texas 77027
Tel: (713) 621-6785
Fax: (713) 621-3988
Attention: Edy Francis

N.M.A. Energy Resources Ltd.
Naphtha House – 4th Floor
8 Granite Street, Petach Tikva
49002 Israel – P.O. Box 10188
Tel: +972 3 922 9225
Fax: +972 3 922 9255
Attention: Eran Saar
    Noa Lendner;
 
 
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(ii) if to the Seller:
Isramco, Inc.
2425 West Loop South, Suite 810
Houston, Texas 77027
Attention: Edy Francis;

(iii) if to the Facility Agent:
Deutsche Bank Trust Company Americas
Trust and Agency Services
60 Wall Street, 16th Floor
MS NYC60-1630
New York, New York 10005
Attention: Administrative Agency Services – Tamar Royalties LLC
Fax: (646) 961-3317;

(iv) if to the Collateral Agent:
Deutsche Bank Trust Company Americas
Trust and Agency Services
60 Wall Street – 16th floor
MSNYC60-1630
New York, New York 10005
Attention:  Project Finance – Tamar Royalties
Facsimile:  732-578-4636

or, in each case, to such other address as such party shall have notified in
writing to each of the other parties hereto.
 
(b) Each notice required or permitted hereunder shall be in writing and may be
personally delivered or sent by facsimile or United States mail or courier
service and shall be deemed to have been given when delivered in person or by
courier service and signed for against receipt thereof, upon receipt of
facsimile, or three (3) Business Days after depositing it in the United States
mail with postage prepaid and properly addressed; provided, that (i) no notice
to the Facility Agent or the Collateral Agent shall be effective until received
by the Facility Agent or the Collateral Agent, as the case may be, (ii) any
notice of a default shall be sent by both courier and facsimile, and (iii) the
Seller may deliver, or cause to be delivered any financial statements or reports
by electronic mail pursuant to procedures approved by the Facility Agent until
the Facility Agent notifies the Seller that it can no longer receive such
documents using electronic mail.  Any financial statements or reports sent to an
electronic mail address shall be deemed received upon the sender’s receipt of an
acknowledgement from the intended recipient (such as by the “return receipt
requested” function, if available, return electronic mail or other written
acknowledgement); provided, that if such document is sent after 4:00 p.m. (New
York City time), such document shall be deemed to have been sent at the opening
of business on the next Business Day.
 
 
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Section 8.04 Severability of Provisions.  If any one or more of the covenants,
agreements, provisions or terms of this Agreement shall be held invalid for any
reason whatsoever, then such covenants, agreements, provisions or terms shall be
deemed severable from the remaining covenants, agreements, provisions or terms
of this Agreement and shall in no way affect the validity or enforceability of
the other provisions of this Agreement.
 
Section 8.05 Counterparts; Facsimile Execution.  This Agreement may be executed
in one or more counterparts and by the different parties hereto on separate
counterparts, each of which, when so executed, shall be deemed to be an original
and such counterparts, together, shall constitute one and the same
agreement.  Delivery of an executed counterpart of this Agreement by facsimile
or electronic mail shall be equally as effective as delivery of an original
executed counterpart of this Agreement.  Any party delivering an executed
counterpart of this Agreement by facsimile or electronic mail also shall deliver
an original executed counterpart of this Agreement but the failure to deliver an
original executed counterpart shall not affect the validity, enforceability, and
binding effect of this Agreement.
 
Section 8.06 Successors and Assigns.  This Agreement shall bind the Seller and
the Borrower and inure to the benefit of and be enforceable by the Seller and
the Borrower, together with the Facility Agent, the Collateral Agent, the
Lenders and their successors and permitted assigns as express third party
beneficiaries.  The obligations of the Seller under this Agreement cannot be
assigned or delegated to a third party without the consent of each of the
Borrower and the Facility Agent, which consent shall be at each such Person’s
sole discretion.
 
Section 8.07 Assignment of Agreement.  The Seller acknowledges that all of the
Borrower’s right, title and interest in, to and under this Agreement, each of
the other Credit Documents and the Royalties Receivables, constitutes part of
the Collateral pledged to the Collateral Agent for the benefit of the Secured
Parties, and that, pursuant to and subject to the terms and conditions of the
Credit Documents, the Borrower has assigned to the Collateral Agent, for the
benefit of the Secured Parties, all benefits, rights and remedies exercisable by
the Borrower under this Agreement, the other Credit Documents and the Royalties
Receivables.  The foregoing assignment includes: (a) all monies due and to
become due to the Borrower from the Seller or the Seller from the Project
Company, whether in connection with the Royalties Receivables, any expenses,
costs, indemnities, or damages for the breach of this Agreement or any other
Credit Document, or otherwise, (b) all rights, remedies, powers, privileges and
claims of the Borrower against the Seller or the Seller against the Project
Company under or with respect to the Royalties Receivables or any other Credit
Document (whether arising pursuant to the terms hereof or thereof or as
otherwise available at law or in equity) and (c) the right, at any time, to give
or withhold consents, requests, notices, directions, approvals, demands,
extensions or waivers under or with respect to this Agreement or any other
Credit Document.  The Seller agrees to cooperate fully with the Collateral Agent
and the Lenders in the exercise of the foregoing rights and remedies; provided,
however, that the Collateral Agent shall not be obligated to perform any of the
obligations of the Borrower or the Seller under this Agreement or any other
Credit Document except at the direction of the Required Lenders in accordance
with the terms of the Security Agreement.  The Seller further agrees to give to
the Facility Agent copies of all notices it is required to give to the Borrower
hereunder.  The Borrower and the Seller each hereby acknowledge and agree that
the Facility Agent and each Lender have relied upon the terms and provisions set
forth in this Agreement in entering into the Credit Agreement.
 
 
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Section 8.08 No Petition.  The Seller hereby agrees that it will not institute
against the Borrower, join in the institution against the Borrower or authorize,
consent to or cause the Borrower to institute any proceeding: (a) seeking
bankruptcy, reorganization, winding-up, arrangement, moratorium, insolvency or
liquidation of the Borrower, (b) the appointment of an administrator, a trustee,
receiver, liquidator, custodian or other similar official with respect to the
Borrower or any substantial part of its property, or (c) any other proceeding
under any United States federal or any state bankruptcy law, including the
Bankruptcy Code, or under any other applicable bankruptcy, insolvency or similar
law now or hereafter in effect in any applicable jurisdiction, in any case prior
to the date which is one year and one day (or, if longer, such other preference
period under Applicable Law, plus one day) after the payment and discharge in
full of all Obligations of the Borrower.
 
Section 8.09 Subordination.  The Seller agrees that any claim against, or right
to payment from, the Borrower that the Seller may have under this Agreement or
otherwise shall be subordinate to the prior payment and satisfaction in full of
all Obligations of the Borrower owing to the Collateral Agent or the other
Secured Parties.  The Seller further agrees that it will not have any recourse
against any assets of the Borrower or against any officer, director, employee or
member of the Borrower for the satisfaction of any claim against, or payment of
any amount due or payable from, the Borrower.
 
Section 8.10 Survival.  The rights and remedies with respect to any breach of
any representation and warranty set forth in Section 5.01 or Section 5.02, any
covenant set forth in Article 6 and the provisions of Sections 6.04, 6.05, 7.01,
8.08 and 8.09 shall survive the termination of this Agreement.
 
Section 8.11 No Set-off.  Seller’s obligations under this Agreement shall not be
affected by any right of set-off, counterclaim, recoupment, defense or other
right the Seller might have against Borrower, all of which rights are hereby
expressly waived by the Seller.
 
Section 8.12 Costs and Expenses.  The Seller agrees to be liable for, and to pay
on demand, any and all stamp, sales, excise, transfer and other taxes and fees
payable or determined to be payable in connection with the execution, delivery,
filing or recording of this Agreement (it being understood that no Secured Party
shall have an obligation to pay such taxes and fees).
 
Section 8.13 Further Assurances.  (b) Whenever and so often as reasonably
requested by the Collateral Agent or the other party hereto, each of the
Borrower and the Seller shall promptly execute, acknowledge, deliver, file,
register, record and perform, or cause to be executed, acknowledged, delivered,
filed, registered, recorded and performed, all such other and further acts,
deeds, assignments, sales, contributions, transfers, conveyances, grants,
pledges, notices, statements, powers of attorney, instruments, documents or
assurances, and promptly do or cause to be done all such other things, as may be
necessary or reasonably required to effectuate the transactions contemplated by
this Agreement and the other Credit Documents to which it is a
party.  Notwithstanding anything else in the Credit Documents to the contrary,
none of the Borrower, the Seller or any agent of either thereof shall have any
authority to file a termination, partial termination, release, partial release
or any amendment to any financing statement or other recording, filing or
registration covering all or any portion of the Collateral that deletes the name
of the debtor, transferor, charger, pledgor or seller or excludes or releases
any of the Royalties Receivables or other Collateral described therein, without
the prior written consent of the Collateral Agent.
 
 
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(a) The Seller and the Borrower each hereby authorize the Collateral Agent (as
assignee of the Borrower) to file such financing statements, continuation
statements and amendments thereto and assignments thereof, and execute and file,
register or record such other documents, instruments or notices, in any
jurisdictions and with any filing offices without the signature of, or further
authorization by, the Seller.
 
(b) If the Seller fails to perform any of its respective agreements or
obligations under this Agreement or any of the other Credit Documents to which
it is a party, the Collateral Agent (as assignee of the Borrower) may (but shall
not be required to except in accordance with the Credit Agreement) itself
perform, or cause performance of, such agreement or obligation, and the
reasonable out-of-pocket expenses of the Collateral Agent incurred in connection
therewith shall be payable by the Seller upon demand therefor.
 
Section 8.14 Power of Attorney.  In addition to and without limiting any other
rights or powers of the Collateral Agent otherwise set forth herein or in any
other Credit Document, the Seller hereby constitutes and appoints the Collateral
Agent (as assignee of the Borrower) as its attorney-in-fact with full power of
substitution and with full authority in the place and stead of the Seller at any
time that an Event of Default has occurred and is continuing as a result of any
breach or failure to perform or observe by the Seller of any of its obligations
or any material term, covenant, undertaking or agreement set forth herein or in
any other Credit Document to which it is a party, which appointment is
irrevocable and coupled with an interest, for the purpose of carrying out the
provisions of this Agreement and each of the other Credit Documents to which the
Seller is a party and with respect to the Royalties Receivables, including to
execute any documents or instruments and take any and all actions in the name of
the Seller, and on behalf of the Seller as necessary or desirable, in the
reasonable determination of the Collateral Agent (as assignee of the Borrower),
to collect any and all amounts or portions thereof due under any and all
Royalties Receivables, to exercise and enforce all rights and remedies under or
in respect of such Royalties Receivables and to otherwise accomplish the
purposes hereof or thereof.  Notwithstanding anything to the contrary contained
herein, none of the powers conferred upon such attorney-in-fact pursuant to the
immediately preceding sentence shall subject the Collateral Agent or any of its
officers, directors, employees, agents, affiliates or representatives to any
liability for any failure to act or any delay in doing so or if any action taken
by it shall prove to be inadequate or invalid, nor shall such powers confer any
obligations or duties upon the Collateral Agent or any of its officers,
directors, employees, agents, affiliates or representatives in any manner
whatsoever.  This power of attorney has been granted to secure the Seller’s
obligations under this Agreement and to safeguard the rights of the Borrower and
the Collateral Agent in the Royalties Receivables under this Agreement.
 
 
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Section 8.15 No Waiver; Remedies Cumulative.  No failure or delay on the part of
the Borrower in the exercise of any power, right or privilege hereunder or under
any other Credit Document shall impair such power, right or privilege or be
construed to be a waiver of any default or acquiescence therein, nor shall any
single or partial exercise of any such power, right or privilege preclude other
or further exercise thereof or of any other power, right or privilege.  The
rights, powers and remedies given to the Borrower hereby are cumulative and
shall be in addition to and independent of all rights, powers and remedies
existing by virtue of any statute or rule of law or in any of the other Credit
Documents.  Any forbearance or failure to exercise, and any delay in exercising,
any right, power or remedy hereunder shall not impair any such right, power or
remedy or be construed to be a waiver thereof, nor shall it preclude the further
exercise of any such right, power or remedy.
 
Section 8.16 Binding Effect.  This Agreement shall become effective upon the
execution of a counterpart hereof by each of the parties hereto and receipt by
the Borrower and the Seller of written or telephonic notification of
authorization of delivery thereof.
 
Section 8.17 Independence of Covenants.  All covenants hereunder shall be given
independent effect so that if a particular action or condition is not permitted
by any of such covenants, the fact that it would be permitted by an exception
to, or would otherwise be within the limitations of, another covenant shall not
avoid the breach of such covenant if such action is taken or condition exists.
 
Section 8.18 Headings.  Section headings herein are included herein for
convenience of reference only and shall not constitute a part hereof for any
other purpose or be given any substantive effect.
 

 
[Remainder of page intentionally left blank.]
 
 
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IN WITNESS WHEREOF, the Seller and the Borrower have caused this Agreement to be
duly executed on their behalf by their respective officers thereunto duly
authorized as of the day and year first above written.
 
ISRAMCO, INC., as the Seller
 

 
 
By:  ______________________________

 
Name: Haim Tsuff

 
Title: Chairman and Chief Executive Officer

 
 

[Signature page to Royalties Sale and Contribution Agreement]
 
 

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TAMAR ROYALTIES LLC, as the Borrower
 
 
By: N.M.A. Energy Resources Ltd., as its Manager

 
 
 
By:  ______________________________

 
Name: Noa Lendner

 
Title: General Counsel

 

 
 
By:  ______________________________

 
Name: Eran Saar

 
Title: Chief Executive Officer and Director

 
 
[Signature page to Royalties Sale and Contribution Agreement]
 
 

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With respect to Sections 8.07, 8.13 and 8.14:
 
DEUTSCHE BANK TRUST COMPANY AMERICAS, as the Collateral Agent
 
 
By: Deutsche Bank National Trust Company

 

 
 
By:  ______________________________

 
Name:

 
Title:

 

 
 
By:  ______________________________

 
Name:

 
Title:

 

[Signature page to Royalties Sale and Contribution Agreement]
 
 

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With respect to Section 6.01 and Section 8.07:
 
DEUTSCHE BANK TRUST COMPANY AMERICAS, as the Facility Agent
 
 
By: Deutsche Bank National Trust Company

 

 
 
By:  ______________________________

 
Name:

 
Title:

 

 
 
By:  ______________________________

 
Name:

 
Title:

 
 
[Signature page to Royalties Sale and Contribution Agreement]
 
 

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SCHEDULE 1
 
SELLER NAME; JURISDICTION OF ORGANIZATION; ETC.
 
 
Seller’s Name:
 
Isramco, Inc.
 
Seller’s trade names, fictitious names, assumed names or “doing business as”
names used in the five (5) years preceding the date of this Agreement:
 
Isramco, Inc.
 
Seller’s Jurisdiction of Organization:
 
Delaware
 
Seller’s Organization Type:
 
Corporation
 
Seller’s Organization Number:
 
5507844
 
Seller’s Federal Employer Identification Number:
 
46-5302692
 
Sellers’ Chief Executive Office:
 
From 2007 to November 1, 2009:
4801 Woodway Drive, Suite 100E
Houston, Texas 77056
From November 2, 2009 to Present:
2425 West Loop South, Suite 810
Houston, Texas 77027
 
Sellers’ Principal Place of Business and location where it keeps the Records
relating to the Royalties Receivables:
 
See address of Chief Executive Office above