Document:

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                                  EXHIBIT 10.7

                               GUARANTY AGREEMENT

                                       BY

                                  ISRAMCO, INC.

                                   IN FAVOR OF

                             WELLS FARGO BANK, N.A.,
                             AS ADMINISTRATIVE AGENT

                                  MARCH 2, 2007

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                                TABLE OF CONTENTS
                                -----------------

                                                                            PAGE
                                    ARTICLE I

                                  General Terms

Section 1.1   Terms Defined Above.............................................1
Section 1.2   Certain Definitions.............................................1
Section 1.3   Credit Agreement Definitions....................................1

                                   ARTICLE II

                                  The Guaranty

Section 2.1   Obligations Guaranteed..........................................2
Section 2.2   Nature of Guaranty..............................................2
Section 2.3   Administrative Agent's Rights...................................2
Section 2.4   Guarantor's Waivers.............................................2
Section 2.5   Maturity of Obligations; Payment................................3
Section 2.6   Administrative Agent's Expenses.................................3
Section 2.7   Liability.......................................................3
Section 2.8   Events and Circumstances Not Reducing or Discharging
              Guarantor's Obligations.........................................3

                                   ARTICLE III

                         Representations and Warranties

Section 3.1   By Guarantor....................................................5
Section 3.2   No Representation by Lenders....................................6

                                   ARTICLE IV

                          Subordination of Indebtedness

Section 4.1   Subordination of All Guarantor Claims...........................7
Section 4.2   Claims in Bankruptcy............................................7

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Section 4.3   Payments Held in Trust..........................................7
Section 4.4   Liens Subordinate...............................................7
Section 4.5   Notation of Records.............................................8

                                    ARTICLE V

                                  Miscellaneous

Section 5.1   Successors and Assigns..........................................8
Section 5.2   Notices.........................................................8
Section 5.3   Business and Financial Information..............................8
SECTION 5.4   GOVERNING LAW; CONSTRUCTION.....................................8
Section 5.5   Amendments......................................................9
Section 5.6   Invalidity......................................................9
Section 5.7   Electronic Delivery of Signature Pages..........................9
SECTION 5.8   ENTIRE AGREEMENT................................................9

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                               GUARANTY AGREEMENT
                               ------------------

        THIS GUARANTY AGREEMENT is made as of March 2, 2007 by ISRAMCO, Inc., a
Delaware corporation ("Guarantor"), in favor of Wells Fargo Bank, N.A., as
administrative agent (the "ADMINISTRATIVE AGENT") for the lenders (the
"LENDERS") that are or become parties to the Credit Agreement defined below.

                                R E C I T A L S:

        A.      Isramco Energy, LLC, a Texas limited liability company,
(hereinafter called "BORROWER"), the Administrative Agent and the Lenders have
entered into that certain Credit Agreement dated as of even date herewith (as
the same may be amended from time to time, the "CREDIT AGREEMENT").

        B.      One of the terms and conditions stated in the Credit Agreement
for the making of the loans described therein is the execution and delivery to
the Administrative Agent for the benefit of the Lenders of this Guaranty
Agreement.

        NOW, THEREFORE, (i) in order to comply with the terms and conditions of
the Credit Agreement, (ii) to induce the Lenders, at any time or from time to
time, to loan monies, with or without security to or for the account of Borrower
in accordance with the terms of the Credit Agreement, (iii) at the special
insistence and request of the Lenders, and (iv) for other good and valuable
consideration, the receipt and sufficiency of which is hereby acknowledged,
Guarantor hereby agrees as follows:

                                   ARTICLE I

                                  GENERAL TERMS

        Section 1.1     TERMS DEFINED ABOVE. As used in this Guaranty Agreement,
the terms defined in the opening paragraph and the Recitals above shall have the
meanings indicated therein.

        Section 1.2     CERTAIN DEFINITIONS. As used in this Guaranty Agreement,
the following terms shall have the following meanings, unless the context
otherwise requires:

        "GUARANTOR CLAIMS" shall have the meaning indicated in Section 4.1
        hereof.

        "GUARANTY AGREEMENT" shall mean this Guaranty Agreement, as the same may
        from time to time be amended, supplemented, restated or otherwise
        modified.

        "OBLIGATIONS" shall have the meaning assigned to such term in the Credit
        Agreement.

        Section 1.3     CREDIT AGREEMENT DEFINITIONS. Unless otherwise defined
herein, all terms beginning with a capital letter which are defined in the
Credit Agreement shall have the same meanings herein as therein.

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                                   ARTICLE II

                                  THE GUARANTY

        Section 2.1     OBLIGATIONS GUARANTEED. Guarantor hereby irrevocably and
unconditionally guarantees the prompt payment of the Obligations when due,
whether at maturity or otherwise.

        Section 2.2     NATURE OF GUARANTY. This Guaranty Agreement is an
absolute, irrevocable, completed and continuing guaranty of payment and not a
guaranty of collection, and no notice of the Obligations or any extension of
credit already or hereafter contracted by or extended to Borrower need be given
to Guarantor. This Guaranty Agreement may not be revoked by Guarantor and shall
continue to be effective with respect to debt under the Obligations arising or
created after any attempted revocation by Guarantor and shall remain in full
force and effect until the Obligations are paid in full and the Commitments are
terminated, notwithstanding that from time to time prior thereto no Obligations
may be outstanding. Borrower and the Lenders may modify, alter, rearrange,
extend for any period and/or renew from time to time, the Obligations, and the
Lenders may waive any Default or Events of Default without notice to Guarantor
and in such event Guarantor will remain fully bound hereunder on the
Obligations. This Guaranty Agreement shall continue to be effective or be
reinstated, as the case may be, if at any time any payment of the Obligations is
rescinded or must otherwise be returned by any of the Lenders upon the
insolvency, bankruptcy or reorganization of Borrower or otherwise, all as though
such payment had not been made. This Guaranty Agreement may be enforced by the
Administrative Agent and any subsequent holder of any of the Obligations and
shall not be discharged by the assignment or negotiation of all or part of the
Obligations. Guarantor hereby expressly waives presentment, demand, notice of
nonpayment, protest and notice of protest and dishonor, notice of Default or
Event of Default, notice of intent to accelerate the maturity and notice of
acceleration of the maturity and any other notice in connection with the
Obligations, and also notice of acceptance of this Guaranty Agreement,
acceptance on the part of the Lenders being conclusively presumed by the
Lenders' request for this Guaranty Agreement and delivery of the same to the
Administrative Agent.

        Section 2.3     ADMINISTRATIVE AGENT'S RIGHTS. Guarantor authorizes the
Administrative Agent, without notice or demand and without affecting its
liability hereunder, to take and hold security for the payment of this Guaranty
Agreement and/or the Obligations, and exchange, enforce, waive and release any
such security; and to apply such security and direct the order or manner of sale
thereof as the Administrative Agent in its discretion may determine; and to
obtain a guaranty of the Obligations from any one or more Persons and at any
time or times to enforce, waive, rearrange, modify, limit or release any of such
other Persons from their obligations under such guaranties.

        Section 2.4     GUARANTOR'S WAIVERS.

                (a)     GENERAL. Guarantor waives any right to require any of
        the Lenders to (i) proceed against Borrower or any other person liable
        on the Obligations, (ii) enforce any of their rights against any other
        guarantor of the Obligations (iii) proceed or enforce any of their
        rights against or exhaust any security given to secure the Obligations
        (iv) have Borrower joined with Guarantor in any suit arising out of this
        Guaranty

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        Agreement and/or the Obligations, or (v) pursue any other remedy in the
        Lenders' powers whatsoever. The Lenders shall not be required to
        mitigate damages or take any action to reduce, collect or enforce the
        Obligations. Guarantor waives any defense arising by reason of any
        disability, lack of corporate authority or power, or other defense of
        Borrower or any other guarantor of the Obligations, and shall remain
        liable hereon regardless of whether Borrower or any other guarantor be
        found not liable thereon for any reason. Whether and when to exercise
        any of the remedies of the Lenders under any of the Loan Documents shall
        be in the sole and absolute discretion of the Administrative Agent, and
        no delay by the Administrative Agent in enforcing any remedy, including
        delay in conducting a foreclosure sale, shall be a defense to
        Guarantor's liability under this Guaranty Agreement. To the extent
        allowed by applicable law, Guarantor hereby waives any good faith duty
        on the part of the Administrative Agent in exercising any remedies
        provided in the Loan Documents.

                (b)     SUBROGATION. Until the Obligations have been paid in
        full and the Commitments are terminated, Guarantor waives all rights of
        subrogation or reimbursement against the Borrower, whether arising by
        contract or operation of law (including, without limitation, any such
        right arising under any federal or state bankruptcy or insolvency laws)
        and waives any right to enforce any remedy which the Lenders now have or
        may hereafter have against the Borrower, and waives any benefit or any
        right to participate in any security now or hereafter held by the
        Administrative Agent or any Lender.

        Section 2.5     MATURITY OF OBLIGATIONS; PAYMENT. Guarantor agrees that
if the maturity of any of the Obligations is accelerated by bankruptcy or
otherwise, such maturity shall also be deemed accelerated for the purpose of
this Guaranty Agreement without demand or notice to Guarantor. Guarantor will,
forthwith upon notice from the Administrative Agent, pay to the Administrative
Agent the amount due and unpaid by Borrower and guaranteed hereby. The failure
of the Administrative Agent to give this notice shall not in any way release
Guarantor hereunder.

        Section 2.6     ADMINISTRATIVE AGENT'S EXPENSES. If Guarantor fails to
pay the Obligations after notice from the Administrative Agent of Borrower's
failure to pay any Obligations at maturity, and if the Administrative Agent
obtains the services of an attorney for collection of amounts owing by Guarantor
hereunder, or obtaining advice of counsel in respect of any of their rights
under this Guaranty Agreement, or if suit is filed to enforce this Guaranty
Agreement, or if proceedings are had in any bankruptcy, probate, receivership or
other judicial proceedings for the establishment or collection of any amount
owing by Guarantor hereunder, or if any amount owing by Guarantor hereunder is
collected through such proceedings, Guarantor agrees to pay to the
Administrative Agent the Administrative Agent's reasonable attorneys' fees.

        Section 2.7     LIABILITY. It is expressly agreed that the liability of
Guarantor for the payment of the Obligations guaranteed hereby shall be primary
and not secondary.

        Section 2.8     EVENTS AND CIRCUMSTANCES NOT REDUCING OR DISCHARGING
GUARANTOR'S OBLIGATIONS. Guarantor hereby consents and agrees to each of the
following to the fullest extent permitted by law, and agrees that its
obligations under this Guaranty Agreement shall not be released, diminished,
impaired, reduced or adversely affected by any of the following, and

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waives any rights (including without limitation rights to notice) which
Guarantor might otherwise have as a result of or in connection with any of the
following:

                (a)     MODIFICATIONS, ETC. Any renewal, extension,
        modification, increase, decrease, alteration or rearrangement of all or
        any part of the Obligations, or of the Notes, or the Credit Agreement or
        any instrument executed in connection therewith, or any contract or
        understanding between Borrower and any of the Lenders, or any other
        Person, pertaining to the Obligations;

                (b)     ADJUSTMENT, ETC. Any adjustment, indulgence, forbearance
        or compromise that might be granted or given by any of the Lenders to
        Borrower or Guarantor or any Person liable on the Obligations;

                (c)     CONDITION OF BORROWER OR GUARANTOR. The insolvency,
        bankruptcy arrangement, adjustment, composition, liquidation,
        disability, dissolution, death or lack of power of Borrower or Guarantor
        or any other Person at any time liable for the payment of all or part of
        the Obligations; or any dissolution of Borrower or Guarantor, or any
        sale, lease or transfer of any or all of the assets of Borrower or
        Guarantor, or any changes in the shareholders, partners, or members of
        Borrower or Guarantor; or any reorganization of Borrower or Guarantor;

                (d)     INVALIDITY OF OBLIGATIONS. The invalidity, illegality or
        unenforceability of all or any part of the Obligations, or any document
        or agreement executed in connection with the Obligations, for any reason
        whatsoever, including without limitation the fact that the Obligations,
        or any part thereof, exceed the amount permitted by law, the act of
        creating the Obligations or any part thereof is ULTRA VIRES, the
        officers or representatives executing the documents or otherwise
        creating the Obligations acted in excess of their authority, the
        Obligations violate applicable usury laws, the Borrower has valid
        defenses, claims or offsets (whether at law, in equity or by agreement)
        which render the Obligations wholly or partially uncollectible from
        Borrower, the creation, performance or repayment of the Obligations (or
        the execution, delivery and performance of any document or instrument
        representing part of the Obligations or executed in connection with the
        Obligations, or given to secure the repayment of the Obligations) is
        illegal, uncollectible, legally impossible or unenforceable, or the
        Credit Agreement or other documents or instruments pertaining to the
        Obligations have been forged or otherwise are irregular or not genuine
        or authentic;

                (e)     RELEASE OF OBLIGORS. Any full or partial release of the
        liability of Borrower on the Obligations or any part thereof, of any
        co-guarantors, or any other Person now or hereafter liable, whether
        directly or indirectly, jointly, severally, or jointly and severally, to
        pay, perform, guarantee or assure the payment of the Obligations or any
        part thereof, it being recognized, acknowledged and agreed by Guarantor
        that it may be required to pay the Obligations in full without
        assistance or support of any other Person, and Guarantor has not been
        induced to enter into this Guaranty Agreement on the basis of a
        contemplation, belief, understanding or agreement that other parties
        other than the Borrower will be liable to perform the Obligations, or
        the Lenders will look to other parties to perform the Obligations.

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                (f)     OTHER SECURITY. The taking or accepting of any other
        security, collateral or guaranty, or other assurance of payment, for all
        or any part of the Obligations;

                (g)     RELEASE OF COLLATERAL, ETC. Any release, surrender,
        exchange, subordination, deterioration, waste, loss or impairment
        (including without limitation negligent, willful, unreasonable or
        unjustifiable impairment) of any collateral, property or security, at
        any time existing in connection with, or assuring or securing payment
        of, all or any part of the Obligations;

                (h)     CARE AND DILIGENCE. The failure of the Lenders or any
        other Person to exercise diligence or reasonable care in the
        preservation, protection, enforcement, sale or other handling or
        treatment of all or any part of such collateral, property or security;

                (i)     STATUS OF LIENS. The fact that any collateral, security,
        security interest or lien contemplated or intended to be given, created
        or granted as security for the repayment of the Obligations shall not be
        properly perfected or created, or shall prove to be unenforceable or
        subordinate to any other security interest or lien, it being recognized
        and agreed by Guarantor that it is not entering into this Guaranty
        Agreement in reliance on, or in contemplation of the benefits of, the
        validity, enforceability, collectibility or value of any of the
        collateral for the Obligations;

                (j)     PAYMENTS RESCINDED. Any payment by Borrower to the
        Lenders is held to constitute a preference under the bankruptcy laws, or
        for any reason the Lenders are required to refund such payment or pay
        such amount to Borrower or someone else; or

                (k)     OTHER ACTIONS TAKEN OR OMITTED. Any other action taken
        or omitted to be taken with respect to the Credit Agreement, the
        Obligations, or the security and collateral therefor, whether or not
        such action or omission prejudices Guarantor or increases the likelihood
        that Guarantor will be required to pay the Obligations pursuant to the
        terms hereof; it being the unambiguous and unequivocal intention of
        Guarantor that it shall be obligated to pay the Obligations when due,
        notwithstanding any occurrence, circumstance, event, action, or omission
        whatsoever, whether contemplated or uncontemplated, and whether or not
        otherwise or particularly described herein, except for the full and
        final payment and satisfaction of the Obligations.

                                  ARTICLE III

                         REPRESENTATIONS AND WARRANTIES

        Section 3.1     BY GUARANTOR. In order to induce the Lenders to accept
this Guaranty Agreement, Guarantor represents and warrants to the Lenders (which
representations and warranties will survive the creation of the Obligations and
any extension of credit thereunder) that:

                (a)     BENEFIT TO GUARANTOR. Guarantor's guaranty pursuant to
        this Guaranty Agreement reasonably may be expected to benefit, directly
        or indirectly, Guarantor.

                (b)     CORPORATE EXISTENCE. Guarantor is a corporation duly
        organized, legally existing and in good standing under the laws of the
        State of Delaware and is duly

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        qualified as a foreign corporation in all jurisdictions wherein the
        property owned or the business transacted by it makes such qualification
        necessary.

                (c)     CORPORATE POWER AND AUTHORIZATION. Guarantor is duly
        authorized and empowered to execute, deliver and perform this Guaranty
        Agreement and all corporate action on Guarantor's part requisite for the
        due execution, delivery and performance of this Guaranty Agreement has
        been duly and effectively taken.

                (d)     BINDING OBLIGATIONS. This Guaranty Agreement constitutes
        valid and binding obligations of Guarantor, enforceable in accordance
        with its terms (except that enforcement may be subject to any applicable
        bankruptcy, insolvency or similar laws generally affecting the
        enforcement of creditors' rights).

                (e)     NO LEGAL BAR OR RESULTANT LIEN. This Guaranty Agreement
        will not violate any provisions of Guarantor's articles or certificate
        of incorporation, bylaws, or any contract, agreement, law, regulation,
        order, injunction, judgment, decree or writ to which Guarantor is
        subject, or result in the creation or imposition of any Lien upon any
        Properties of Guarantor.

                (f)     NO CONSENT. Guarantor's execution, delivery and
        performance of this Guaranty Agreement does not require the consent or
        approval of any other Person, including without limitation any
        regulatory authority or governmental body of the United States or any
        state thereof or any political subdivision of the United States or any
        state thereof.

                (g)     SOLVENCY. Guarantor hereby represents that (i) it is not
        insolvent as of the date hereof and will not be rendered insolvent as a
        result of this Guaranty Agreement, (ii) it is not engaged in business or
        a transaction, or about to engage in a business or a transaction, for
        which any property or assets remaining with Guarantor is unreasonably
        small capital, and (iii) it does not intend to incur, or believe it will
        incur, debts that will be beyond its ability to pay as such debts
        mature.

        Section 3.2     NO REPRESENTATION BY LENDERS. Neither the Lenders nor
any other Person has made any representation, warranty or statement to Guarantor
in order to induce Guarantor to execute this Guaranty Agreement. Guarantor
represents that, in executing and delivering this Guaranty, Guarantor has (i)
without reliance on the Lenders or any information received from the Lenders and
based upon such documents and information it deems appropriate, made an
independent investigation of the transactions contemplated hereby and the
Borrower, the Borrower's business, assets, operations, prospects and condition,
financial or otherwise, and any circumstances which may bear upon such
transactions, the Borrower or the obligations and risks undertaken herein with
respect to the Obligations; (ii) adequate means to obtain from the Borrower on a
continuing basis information concerning the Borrower; (iii) has full and
complete access to the Loan Documents and any other documents executed in
connection with the Loan Documents; and (iv) not relied and will not rely upon
any representations or warranties of the Lenders not embodied herein or any act
heretofore or hereafter taken by the Lenders (including but not limited to any
review by the Lenders of the affairs of the Borrower).

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                                   ARTICLE IV

                          SUBORDINATION OF INDEBTEDNESS

        Section 4.1     SUBORDINATION OF ALL GUARANTOR CLAIMS. As used herein,
the term "Guarantor Claims" shall mean all debts and liabilities of Borrower to
Guarantor, whether such debts and liabilities now exist or are hereafter
incurred or arise, or whether the obligation of Borrower thereon be direct,
contingent, primary, secondary, several, joint and several, or otherwise, and
irrespective of whether such debts or liabilities be evidenced by note,
contract, open account, or otherwise, and irrespective of the person or persons
in whose favor such debts or liabilities may, at their inception, have been, or
may hereafter be created, or the manner in which they have been or may hereafter
be acquired by Guarantor. Guarantor Claims shall include without limitation all
rights and claims of Guarantor against Borrower arising as a result of
subrogation or otherwise as a result of Guarantor's payment of all or a portion
of the Obligations. Until the Obligations shall be paid and satisfied in full,
Guarantor shall have performed all of its obligations hereunder and the
Commitments are terminated, Guarantor shall not receive or collect, directly or
indirectly, from Borrower or any other party any amount upon Guarantor Claims.

        Section 4.2     CLAIMS IN BANKRUPTCY. In the event of receivership,
bankruptcy, reorganization, arrangement, debtor's relief, or other insolvency
proceedings involving Borrower as debtor, the Lenders shall have the right to
prove their claim in any proceeding, so as to establish its rights hereunder and
receive directly from the receiver, trustee or other court custodian, dividends
and payments which would otherwise be payable upon Guarantor Claims. Guarantor
hereby assigns such dividends and payments to the Lenders. Should the
Administrative Agent or any Lender receive, for application upon the
Obligations, any such dividend or payment which is otherwise payable to
Guarantor, and which, as between Borrower and Guarantor, shall constitute a
credit upon Guarantor Claims, then upon payment in full of the Obligations,
Guarantor shall become subrogated to the rights of the Lenders to the extent
that such payments to the Lenders on Guarantor Claims have contributed toward
the liquidation of the Obligations, and such subrogation shall be with respect
to that proportion of the Obligations which would have been unpaid if the
Administrative Agent or a Lender had not received dividends or payments upon
Guarantor Claims.

        Section 4.3     PAYMENTS HELD IN TRUST. In the event that
notwithstanding Sections 4.1 and 4.2 above, Guarantor should receive any funds,
payments, claims or distributions which is prohibited by such Sections,
Guarantor agrees to hold in trust for the Lenders an amount equal to the amount
of all funds, payments, claims or distributions so received, and agrees that it
shall have absolutely no dominion over the amount of such funds, payments,
claims or distributions except to pay them promptly to the Administrative Agent,
and Guarantor covenants promptly to pay the same to the Administrative Agent.

        Section 4.4     LIENS SUBORDINATE. Guarantor agrees that any liens,
security interests, judgment liens, charges or other encumbrances upon
Borrower's assets securing payment of Guarantor Claims shall be and remain
inferior and subordinate to any liens, security interests, judgment liens,
charges or other encumbrances upon Borrower's assets securing payment of the
Obligations, regardless of whether such encumbrances in favor of Guarantor, the
Administrative Agent or the Lenders presently exist or are hereafter created or
attach. Without the prior written

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consent of the Lenders, Guarantor shall not (a) exercise or enforce any
creditor's right it may have against the Borrower, or (b) foreclose, repossess,
sequester or otherwise take steps or institute any action or proceeding
(judicial or otherwise, including without limitation the commencement of or
joinder in any liquidation, bankruptcy, rearrangement, debtor's relief or
insolvency proceeding) to enforce any lien, mortgages, deeds of trust, security
interest, collateral rights, judgments or other encumbrances on assets of
Borrower held by Guarantor.

        Section 4.5     NOTATION OF RECORDS. All promissory notes, accounts
receivable ledgers or other evidence of Guarantor Claims accepted by or held by
Guarantor shall contain a specific written notice thereon that the indebtedness
evidenced thereby is subordinated under the terms of this Guaranty Agreement.

                                   ARTICLE V

                                  MISCELLANEOUS

        Section 5.1     SUCCESSORS AND ASSIGNS. This Guaranty Agreement is and
shall be in every particular available to the successors and assigns of the
Lenders and is and shall always be fully binding upon the legal representatives,
heirs, successors and assigns of Guarantor, notwithstanding that some or all of
the monies, the repayment of which this Guaranty Agreement applies, may be
actually advanced after any bankruptcy, receivership, reorganization, death,
disability or other event affecting Guarantor.

        Section 5.2     NOTICES. Any notice or demand to Guarantor under or in
connection with this Guaranty Agreement may be given and shall conclusively be
deemed and considered to have been given and received in accordance with Section
12.02 of the Credit Agreement, addressed to Guarantor at the address on the
signature page hereof or at such other address provided to the Administrative
Agent in writing.

        Section 5.3     BUSINESS AND FINANCIAL INFORMATION. Guarantor will
promptly furnish to the Administrative Agent and the Lenders from time to time
upon request such information regarding the business and affairs and financial
condition of Guarantor and its subsidiaries as the Administrative Agent and the
Lenders may reasonably request.

        SECTION 5.4     GOVERNING LAW; CONSTRUCTION.

        (a)     THIS GUARANTY AGREEMENT SHALL BE GOVERNED BY, AND CONSTRUED IN
ACCORDANCE WITH, THE LAWS OF THE STATE OF TEXAS.

        (b)     ANY LEGAL ACTION OR PROCEEDING WITH RESPECT TO THIS GUARANTY
AGREEMENT OR ANY OTHER LOAN DOCUMENT TO WHICH GUARANTOR IS A PARTY SHALL BE
BROUGHT IN THE COURTS OF THE STATE OF TEXAS OR OF THE UNITED STATES OF AMERICA
FOR THE SOUTHERN DISTRICT OF TEXAS, AND, BY EXECUTION AND DELIVERY OF THIS
AGREEMENT, GUARANTOR HEREBY ACCEPTS FOR ITSELF AND (TO THE EXTENT PERMITTED BY
LAW) IN RESPECT OF ITS PROPERTY, GENERALLY AND UNCONDITIONALLY, THE JURISDICTION
OF THE AFORESAID COURTS. GUARANTOR HEREBY IRREVOCABLY WAIVES ANY OBJECTION,
INCLUDING, WITHOUT LIMITATION, ANY OBJECTION TO THE LAYING OF VENUE OR BASED ON
THE GROUNDS OF FORUM NON CONVENIENS, WHICH IT MAY NOW OR HEREAFTER HAVE TO THE
BRINGING OF ANY SUCH ACTION OR PROCEEDING IN SUCH RESPECTIVE JURISDICTIONS. THIS

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SUBMISSION TO JURISDICTION IS NON-EXCLUSIVE AND DOES NOT PRECLUDE THE
ADMINISTRATIVE AGENT OR ANY LENDER FROM OBTAINING JURISDICTION OVER GUARANTOR IN
ANY COURT OTHERWISE HAVING JURISDICTION.

        (c)     GUARANTOR HEREBY IRREVOCABLY CONSENTS TO THE SERVICE OF PROCESS
OF ANY OF THE AFOREMENTIONED COURTS IN ANY SUCH ACTION OR PROCEEDING BY THE
MAILING OF COPIES THEREOF BY REGISTERED OR CERTIFIED MAIL, POSTAGE PREPAID, TO
GUARANTOR AT ITS SAID ADDRESS, SUCH SERVICE TO BECOME EFFECTIVE THIRTY (30) DAYS
AFTER SUCH MAILING. NOTHING HEREIN SHALL AFFECT THE RIGHT OF THE ADMINISTRATIVE
AGENT, ANY LENDER OR ANY HOLDER OF A NOTE TO SERVE PROCESS IN ANY OTHER MANNER
PERMITTED BY LAW OR TO COMMENCE LEGAL PROCEEDINGS OR OTHERWISE PROCEED AGAINST
GUARANTOR OR ITS PROPERTIES IN ANY OTHER JURISDICTION.

        (d)     GUARANTOR HEREBY (I) IRREVOCABLY AND UNCONDITIONALLY WAIVES, TO
THE FULLEST EXTENT PERMITTED BY LAW, TRIAL BY JURY IN ANY LEGAL ACTION OR
PROCEEDING RELATING TO THIS GUARANTY AGREEMENT OR ANY OTHER LOAN DOCUMENT TO
WHICH IT IS A PARTY AND FOR ANY COUNTERCLAIM THEREIN; (II) IRREVOCABLY WAIVES,
TO THE MAXIMUM EXTENT NOT PROHIBITED BY LAW, ANY RIGHT IT MAY HAVE TO CLAIM OR
RECOVER IN ANY SUCH LITIGATION ANY SPECIAL, EXEMPLARY, PUNITIVE OR CONSEQUENTIAL
DAMAGES, OR DAMAGES OTHER THAN, OR IN ADDITION TO, ACTUAL DAMAGES; (III)
CERTIFIES THAT NO PARTY HERETO NOR ANY REPRESENTATIVE, AGENT OR COUNSEL FOR ANY
PARTY HERETO HAS REPRESENTED, EXPRESSLY OR OTHERWISE, OR IMPLIED THAT SUCH PARTY
WOULD NOT, IN THE EVENT OF LITIGATION, SEEK TO ENFORCE THE FOREGOING WAIVERS,
AND (IV) ACKNOWLEDGES THAT IT HAS BEEN INDUCED TO ENTER INTO THIS GUARANTY
AGREEMENT AND THE OTHER LOAN DOCUMENTS TO WHICH IT IS A PARTY AND THE
TRANSACTIONS CONTEMPLATED HEREBY AND THEREBY BY, AMONG OTHER THINGS, THE MUTUAL
WAIVERS AND CERTIFICATIONS CONTAINED IN THIS SECTION 5.4 AND SECTION 12.12 OF
THE CREDIT AGREEMENT.

        Section 5.5     AMENDMENTS. No amendment, modification or waiver of any
provision of this Guaranty Agreement shall be effective unless and until
evidenced in writing and executed by Guarantor and the Administrative Agent. Any
amendment, modification or waiver or release of this Guaranty Agreement executed
by the Administrative Agent may be relied upon by all other parties to the Loan
Documents as evidence of the consent of the Majority Lenders as required by
Section 12.04 of the Credit Agreement.

        Section 5.6     INVALIDITY. In the event that any one or more of the
provisions contained in this Guaranty Agreement shall, for any reason, be held
invalid, illegal or unenforceable in any respect, such invalidity, illegality or
unenforceability shall not affect any other provision of this Guaranty
Agreement.

        Section 5.7     ELECTRONIC DELIVERY OF SIGNATURE PAGES. Delivery of a
manually executed signature page of this Guaranty Agreement by e-mail or
facsimile shall be effective as delivery of an original executed signature page
of this Guaranty and shall be binding against Guarantor.

        SECTION 5.8     ENTIRE AGREEMENT. THIS WRITTEN GUARANTY AGREEMENT
EMBODIES THE ENTIRE AGREEMENT AND UNDERSTANDING BETWEEN THE LENDERS AND
GUARANTOR AND SUPERSEDES ALL OTHER AGREEMENTS AND UNDERSTANDINGS BETWEEN

                                      -9-
<PAGE>

SUCH PARTIES RELATING TO THE SUBJECT MATTER HEREOF AND THEREOF. THIS WRITTEN
GUARANTY AGREEMENT REPRESENTS THE FINAL AGREEMENT BETWEEN THE PARTIES AND MAY
NOT BE CONTRADICTED BY EVIDENCE OF PRIOR, CONTEMPORANEOUS, OR SUBSEQUENT ORAL
AGREEMENTS OF THE PARTIES. THERE ARE NO UNWRITTEN ORAL AGREEMENTS BETWEEN THE
PARTIES.

                         [SIGNATURES BEGIN ON NEXT PAGE]

                                      -10-
<PAGE>

        WITNESS THE EXECUTION HEREOF, as of the date first above written.

        The parties hereto have caused this Agreement to be duly executed as of
the day and year first above written.

BORROWER:                                    ISRAMCO, INC.

                                             By:    /s/ Haim Tsuff
                                             Name:  Haim Tsuff
                                             Title: Chief Executive Officer
                                             Address for Notices:
                                             11767 Katy Freeway, Suite 711
                                             Houston, Texas 77079
                                             Telephone No.:  (713) 621-5946
                                             Telecopier No.:  (713) 621-3988
                                             e-mail:  jayoil@swbell.net
                                             Attention:  Yossi Levy

                                             With copy to:

                                             Schaeffer Hutchinson P.C.
                                             2204 Louisiana, Suite 220
                                             Houston, Texas 77002-8657
                                             Telephone No.:  (713) 524-7300
                                             Telecopier No.:(713) 528-5677
                                             e-mail:  jhutchinson@schalaw.com
                                             Attention: James H. Hutchinson, III

                                 Signature Page<PAGE>

                                  EXHIBIT 10.8

                                PLEDGE AGREEMENT

                                       BY

                                 ISRAMCO, INC.,
                                   AS PLEDGOR,

                                   IN FAVOR OF

                             WELLS FARGO BANK, N.A.,
                            AS ADMINISTRATIVE AGENT,
                                AS SECURED PARTY

                          EFFECTIVE AS OF MARCH 2, 2007

<PAGE>

                                TABLE OF CONTENTS
                                -----------------

                                                                            PAGE

ARTICLE I DEFINED TERMS; INTERPRETATION.......................................1
---------------------------------------

   Section 1.1             Terms Defined Above................................1
   Section 1.2             Certain Definitions................................1
   Section 1.3             Credit Agreement Definitions.......................2
   Section 1.4             Interpretation.....................................2

ARTICLE II GRANT OF SECURITY INTEREST.........................................3
-------------------------------------

   Section 2.1             Security Interest..................................3
   Section 2.2             Collateral Held In Trust...........................3

ARTICLE III REPRESENTATIONS AND WARRANTIES....................................4
------------------------------------------

   Section 3.1             Due Authorization..................................4
   Section 3.2             Enforceability.....................................4
   Section 3.3             Ownership and Liens................................4
   Section 3.4             No Conflicts or Consents...........................4
   Section 3.5             Location...........................................4
   Section 3.6             Solvency of Pledgor................................4
   Section 3.7             Equity Interests...................................5

ARTICLE IV AFFIRMATIVE COVENANTS..............................................5
--------------------------------

   Section 4.1             Ownership and Liens................................5
   Section 4.2             Inspection of Books and Records....................5
   Section 4.3             Adverse Claim......................................5
   Section 4.4             Delivery of Instruments and/or Certificates........6
   Section 4.5             Further Assurances.................................6

ARTICLE V NEGATIVE COVENANTS..................................................6
----------------------------

   Section 5.1             Transfer or Encumbrance............................6
   Section 5.2             Impairment of Security Interest....................7
   Section 5.3             Dilution of Ownership..............................7
   Section 5.4             Restrictions on Equity Interests...................7
   Section 5.5             Voting Rights......................................7

ARTICLE VI RIGHTS OF SECURED PARTY............................................7
----------------------------------

   Section 6.1             Power of Attorney..................................7
   Section 6.2             Performance by Secured Party.......................8
   Section 6.3             Maintenance of Collateral..........................8

                                     Page i
<PAGE>

ARTICLE VII EVENTS OF DEFAULT AND REMEDIES....................................9
------------------------------------------

   Section 7.1             Events of Default..................................9
   Section 7.2             Remedies and Related Rights........................9
   Section 7.3             Remedies...........................................9
   Section 7.4             Private Sale of Equity Interests..................10
   Section 7.5             Application of Proceeds...........................10
   Section 7.6             Deficiency........................................11
   Section 7.7             Non-Judicial Remedies.............................11
   Section 7.8             Other Recourse....................................11
   Section 7.9             Voting Rights.....................................12
   Section 7.10            Dividend Rights and Interest Payments.............12

ARTICLE VIII MISCELLANEOUS...................................................12
--------------------------

   Section 8.1             Indemnity.........................................12
   Section 8.2             Actions by Secured Party..........................13
   Section 8.3             Waiver............................................13
   Section 8.4             Amendment.........................................13
   Section 8.5             Costs and Expenses................................13
   Section 8.6             Governing Law.....................................13
   Section 8.7             Severability......................................13
   Section 8.8             Notices...........................................14
   Section 8.9             Binding Effect and Assignment.....................14
   Section 8.10            Termination.......................................14
   Section 8.11            Cumulative Rights.................................14
   Section 8.12            Survival; Revival; Reinstatement..................14
   Section 8.13            Final Agreement of the Parties....................15
   Section 8.14            Counterparts; Electronic Delivery
                           of Signature Page.................................15
   Section 8.15            Acknowledgements..................................15

                                    Page ii
<PAGE>

                                PLEDGE AGREEMENT

        THIS PLEDGE AGREEMENT (this "AGREEMENT") dated as of March 2, 2007 by
Isramco, Inc., a Delaware corporation, whose address for notice is 11767 Katy
Freeway, Suite 711, Houston, Texas 77079 ("PLEDGOR"), is in favor of Wells Fargo
Bank, N.A., whose address for notice is 1000 Louisiana Street, 9th Floor,
Houston, Texas 77002, as administrative agent for itself and the lenders (the
"LENDERS") which are parties to the Credit Agreement referred to below (in such
capacity, together with its successors and assigns, the "SECURED PARTY").

                                    RECITALS

        A.      Isramco Energy, L.L.C., a Texas limited liability company and
wholly owned Subsidiary of Pledgor ("BORROWER"), Secured Party and the Lenders
have executed that certain Credit Agreement dated as of the date hereof (as the
same may be supplemented, amended, restated or otherwise modified from time to
time, the "CREDIT AGREEMENT").

        B.      Pledgor will derive various benefits from the execution of the
Credit Agreement and the loans thereunder to Borrower.

        C.      The Lenders have conditioned their obligations under the Credit
Agreement upon the execution and delivery by Pledgor to Secured Party of this
Agreement, and Pledgor has agreed to enter into this Agreement.

        THEREFORE, in order to comply with the terms and conditions of the
Credit Agreement and for other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, Pledgor hereby agrees as follows:

                                   ARTICLE I

                          DEFINED TERMS; INTERPRETATION

        Section 1.1     TERMS DEFINED ABOVE. As used in this Agreement, each of
the terms defined in the opening paragraph and the Recitals above shall have the
meaning assigned to such terms therein.

        Section 1.2     CERTAIN DEFINITIONS. As used in this Agreement, the
following terms shall have the following meanings, unless the context otherwise
requires:

                        "CODE" means the Uniform Commercial Code as in effect in
                the State of Texas on the date of this Agreement or as it may
                hereafter be amended from time to time.

                        "COLLATERAL" means (i) all Equity Interests described or
                referred to on SCHEDULE 1 attached hereto and made a part hereof
                and all certificates, instruments and/or other documents, if
                any, evidencing such Equity Interests; (ii) all of the following
                property which Pledgor becomes entitled to receive or shall
                receive in connection with any of the foregoing: (a) any stock
                certificate, including without limitation, any certificate
                representing a stock dividend or any certificate in connection
                with any recapitalization, reclassification, merger,
                consolidation,

                                     Page 1
<PAGE>

                conversion, sale of assets, combination of interests, split-up,
                spin-off, or any other like change, (b) any option, warrant,
                subscription or right, whether as an addition to or in
                substitution of any other Collateral, (c) any dividends or
                distributions of any kind whatsoever, whether distributable in
                cash, ownership interests, Equity Interests or other property,
                (d) any interest, premium or principal payments and (e) any
                conversion or redemption proceeds; (iii) all renewals,
                replacements and substitutions of all of the foregoing; (iv) all
                rights of Pledgor under the Operating Agreement; (v) all books
                and records related to the foregoing; and (vi) all PRODUCTS and
                PROCEEDS of all of the foregoing. The designation of proceeds
                does not authorize Pledgor to sell, transfer or otherwise convey
                any of the foregoing property. The delivery at any time by
                Pledgor to Secured Party of any property as a pledge to secure
                payment or performance of any indebtedness or obligation
                whatsoever shall also constitute a pledge of such property as
                Collateral hereunder.

                        "EQUITY INTERESTS" means any and all (i) shares, units
                representing interests, participations, rights in or other
                equivalents (however designated) of capital stock, (ii)
                partnership interests (whether general or limited) and any other
                interest or participation that confers the right to receive a
                share of the profits and losses of, or distributions of assets
                of, a partnership, (iii) membership interests in limited
                liability companies, and (iv) any warrants, options or other
                rights entitling the holder thereof to purchase or acquire any
                such Equity Interest.

                        "OBLIGATIONS" shall have the meaning assigned to such
                term in the Credit Agreement.

All words and phrases used herein which are expressly defined in Section 1.201,
Chapter 8 or Chapter 9 of the Code shall have the meaning provided for therein.
Other words and phrases defined elsewhere in the Code shall have the meaning
specified therein except to the extent such meaning is inconsistent with a
definition in Section 1.201, Chapter 8 or Chapter 9 of the Code. All terms
defined in this Agreement in the singular to have equivalent meanings when used
in the plural and VICE VERSA.

        Section 1.3     CREDIT AGREEMENT DEFINITIONS. Unless otherwise defined
herein, all terms beginning with a capital letter which are defined in the
Credit Agreement shall have the same meanings herein as therein.

        Section 1.4     INTERPRETATION.

                (a)     In this Agreement, unless a clear contrary intention
        appears: (i) the singular number includes the plural number and VICE
        VERSA, (ii) reference to any gender includes each other gender, (iii)
        the words "herein," "hereof" and "hereunder" and other words of similar
        import refer to this Agreement as a whole and not to any particular
        Section or other subdivision, (iv) reference to any Person includes such
        Person's successors and assigns but, if applicable, only if such
        successors and assigns are permitted by this Agreement, and reference to
        a Person in a particular capacity excludes such Person in any other
        capacity or individually, PROVIDED that nothing in this Clause (iv) is
        intended to authorize any assignment not otherwise permitted by this

                                     Page 2
<PAGE>

        Agreement or the Credit Agreement, (v) reference to any agreement
        (including this Agreement), document or instrument means such agreement,
        document or instrument as amended, modified, supplemented or extended
        and in effect from time to time in accordance with the terms thereof
        and, if applicable, the terms of this Agreement, and reference to any
        note includes any note issued in renewal, rearrangement, reinstatement,
        enlargement, amendment, modification, extension, substitution or
        replacement for such note, (vi) unless the context indicates otherwise,
        reference to any Section, Clause, paragraph, Schedule or Exhibit means
        such Section, Clause or paragraph of this Agreement or such Schedule or
        Exhibit to this Agreement, (vii) the word "including" (and with
        correlative meaning "include") means including, without limiting the
        generality of any description preceding such term; the word "or" is not
        exclusive; and the word "all" includes "any" and the word "any" includes
        "all", (viii) with respect to the determination of any period of time,
        the word "from" means "from and including" and the word "to" means "to
        but excluding", and (ix) reference to any law, ordinance, statute, code,
        rule, regulation, interpretation or judgment means such law, ordinance,
        statute, code, rule, regulation, interpretation or judgment as amended,
        modified, codified or reenacted, in whole or in part, and in effect from
        time to time.

                (b)     The Section and other headings in this Agreement are for
        convenience only and shall not affect the construction of this
        Agreement.

                (c)     No provision of this Agreement shall be interpreted or
        construed against any Person solely because that Person or its legal
        representative drafted such provision.

                                   ARTICLE II

                           GRANT OF SECURITY INTEREST

        Section 2.1     SECURITY INTEREST. As security for the Obligations,
Pledgor, for value received, hereby grants to Secured Party a continuing
security interest in the Collateral.

        Section 2.2     COLLATERAL HELD IN TRUST. Except for any dividends or
distributions permitted by the Credit Agreement, any Collateral received by
Pledgor shall be received in trust for the benefit of Secured Party and the
Lenders. All Collateral and any certificates or other written instruments or
documents evidencing and/or representing Collateral that is received by Pledgor,
together with such instruments of transfer as Secured Party may request, shall
immediately be delivered to or deposited with Secured Party and held by Secured
Party as Collateral under the terms of this Agreement. If any Collateral
received by Pledgor shall be shares of stock or other certificated Equity
Interests, such shares of stock or other certificated Equity Interests shall be
duly endorsed in blank or accompanied by proper instruments of transfer and
assignment duly executed in blank, all in form and substance satisfactory to
Secured Party. Secured Party shall be deemed to have possession of any
Collateral in transit to Secured Party or its agent. Notwithstanding the
foregoing, until the occurrence of an Event of Default (as hereinafter defined),
Pledgor shall be entitled to all cash dividends and all interest paid on the
Collateral free of the security interest created under this Agreement.

                                     Page 3
<PAGE>

                                  ARTICLE III

                         REPRESENTATIONS AND WARRANTIES

        Pledgor hereby represents and warrants the following to Secured Party:

        Section 3.1     DUE AUTHORIZATION. The execution, delivery and
performance of this Agreement and all of the other Loan Documents to which
Pledgor is a party have been duly authorized by all necessary actions of
Pledgor. Pledgor has and will have at all times full right, power and authority
to grant a security interest in the Collateral to Secured Party in the manner
provided herein, free and clear of any Lien or other charge or encumbrance.

        Section 3.2     ENFORCEABILITY. This Agreement and the other Loan
Documents constitute legal, valid and binding obligations of Pledgor,
enforceable in accordance with their respective terms, except as limited by
bankruptcy, insolvency or similar laws of general application relating to the
enforcement of creditors' rights and except to the extent specific remedies may
generally be limited by equitable principles. This Agreement creates a legal,
valid and binding security interest in favor of Secured Party in the Collateral.

        Section 3.3     OWNERSHIP AND LIENS. Pledgor owns 100% of the membership
interest of Borrower. Pledgor has good and marketable title to the Collateral
free and clear of all Liens, encumbrances or adverse claims, except for the
security interest created by this Agreement. No dispute, right of setoff,
counterclaim or defense exists with respect to all or any part of the
Collateral. Pledgor has not executed any other security agreement currently
affecting the Collateral and no financing statement or other instrument similar
in effect covering all or any part of the Collateral is on file in any recording
office except as may have been executed or filed in favor of Secured Party.

        Section 3.4     NO CONFLICTS OR CONSENTS. Neither the ownership, the
intended use of the Collateral by Pledgor, the grant of the security interest by
Pledgor to Secured Party herein nor the exercise by Secured Party of its rights
or remedies hereunder, will (i) conflict with any provision of (A) any domestic
or foreign law, statute, rule or regulation, or (B) the Charter Documents of
Pledgor, or (C) any agreement, judgment, license, order or permit applicable to
or binding upon Pledgor or otherwise affecting the Collateral, or (ii) result in
or require the creation of any lien, charge or encumbrance upon any assets or
properties of Pledgor or of any Person except as may be expressly contemplated
in the Loan Documents. Except as expressly contemplated in the Loan Documents,
no consent, approval, authorization or order of, and no notice to or filing
with, any court, Governmental Authority or third party is required in connection
with the grant by Pledgor of the security interest herein or the exercise by
Secured Party of its rights and remedies hereunder.

        Section 3.5     LOCATION. Pledgor's residence or chief executive office,
as the case may be, and the office where the records concerning the Collateral
are kept is located at its address set forth on the signature page hereof.

        Section 3.6     SOLVENCY OF PLEDGOR. As of the date hereof, and after
giving effect to this Agreement and the completion of all other transactions
contemplated by Pledgor at the time of the execution of this Agreement, (i)
Pledgor is and will be solvent, (ii) the fair saleable value of

                                     Page 4
<PAGE>

Pledgor's assets exceeds and will continue to exceed Pledgor's liabilities (both
fixed and contingent), (iii) Pledgor is paying and will continue to be able to
pay its debts as they mature, and (iv) Pledgor will have sufficient capital to
carry on Pledgor's business in which Pledgor will engage.

        Section 3.7     EQUITY INTERESTS. Any certificates evidencing Equity
Interests pledged as Collateral are valid and genuine and have not been altered.
All Equity Interests pledged as Collateral have been duly authorized and validly
issued, are fully paid and non-assessable, and were not issued in violation of
the preemptive rights of any party or of any agreement by which Pledgor or the
issuer thereof is bound. No restrictions or conditions exist with respect to the
transfer or voting of any Equity Interests pledged as Collateral, except as has
been disclosed to Secured Party in writing. To the best of Pledgor's knowledge,
no issuer of such Equity Interests (other than Equity Interests of a class which
are publicly traded) has any outstanding stock rights, rights to subscribe,
options, warrants or convertible Equity Interests outstanding or any other
rights outstanding entitling any party to have issued to such party capital
stock of such issuer, except as has been disclosed to Secured Party in writing.

                                   ARTICLE IV

                              AFFIRMATIVE COVENANTS

        Pledgor covenants and agrees with Secured Party that, from and after the
date of this Agreement until all Obligations shall have been paid in full in
cash, no Letter of Credit shall be outstanding and all of the Commitments shall
have terminated:

        Section 4.1     OWNERSHIP AND LIENS. Pledgor will maintain good and
marketable title to all Collateral free and clear of all liens, security
interests, encumbrances or adverse claims, except for the security interest
created by this Agreement and the security interests and other encumbrances
expressly permitted by the other Loan Documents. Pledgor will not permit any
dispute, right of setoff, counterclaim or defense to exist with respect to all
or any part of the Collateral. Pledgor will cause any financing statement or
other security instrument with respect to the Collateral to be terminated,
except as may exist or as may have been filed in favor of Secured Party.

        Section 4.2     INSPECTION OF BOOKS AND RECORDS. Pledgor will keep
adequate records concerning the Collateral and will permit Secured Party and all
representatives and agents appointed by Secured Party to inspect Pledgor's books
and records of or relating to the Collateral at any time during the normal
business hours, to make and take away photocopies, photographs and printouts
thereof and to write down and record any such information.

        Section 4.3     ADVERSE CLAIM. Pledgor will promptly notify Secured
Party of any claim, action or proceeding affecting title to the Collateral, or
any part thereof, or the security interest created hereunder and, at Pledgor's
expense, defend Secured Party's rights, title and security interest in the
Collateral against the claims of any third party. Pledgor will promptly deliver
to Secured Party a copy of all written notices received by Pledgor with respect
to the Collateral, including without limitation, notices received from the
issuer of any Equity Interests pledged hereunder as Collateral.

                                     Page 5
<PAGE>

        Section 4.4     DELIVERY OF INSTRUMENTS AND/OR CERTIFICATES.
Contemporaneously with the execution of this Agreement, Pledgor will deliver to
Secured Party any certificates, documents or instruments representing or
evidencing the Collateral, with Pledgor's endorsement thereon and/or accompanied
by proper instruments of transfer and assignment duly executed in blank, all in
form and substance satisfactory to Secured Party.

        Section 4.5     FURTHER ASSURANCES. Pledgor will contemporaneously with
the execution hereof and from time to time thereafter at its expense promptly
execute and deliver all further instruments and documents and take all further
action necessary or appropriate or that Secured Party may request in order (i)
to perfect and protect the security interest created or purported to be created
hereby and the first priority of such security interest, (ii) to enable Secured
Party to exercise and enforce its rights and remedies hereunder in respect of
the Collateral, and (iii) to otherwise effect the purposes of this Agreement,
including without limitation: (A) executing and filing any financing or
continuation statements, or any amendments thereto; (B) obtaining written
acknowledgement and confirmation from the issuer of any Equity Interests pledged
as Collateral of the pledge of such Equity Interests, in form and substance
satisfactory to Secured Party; (C) cooperating with Secured Party in registering
the pledge of any Equity Interests pledged as Collateral with the issuer of such
Equity Interests; (D) delivering notice of Secured Party's security interest in
any Equity Interests pledged as Collateral to any securities or financial
intermediary, clearing corporation or other party required by Secured Party, in
form and substance satisfactory to Secured Party; (E) obtaining written
confirmation and acknowledgement, in form and substance satisfactory to Secured
Party, of the pledge of any Equity Interests pledged as Collateral from any
securities or financial intermediary, clearing corporation or other party
required by Secured Party and that such Person holds possession for Secured
Party's benefit; and (F) upon the request of Secured Party, take or cause to be
taken all actions (other than any actions required to be taken by Secured Party)
requested by Secured Party to cause Secured Party to (1) have "control" (within
the meaning of Section 8.106 of the Code) over any Collateral constituting
investment property, including, without limitation, executing and delivering any
agreements, in form and substance satisfactory to Secured Party, with securities
intermediaries, issuers or other Persons in order to establish "control", and
Pledgor shall promptly notify Secured Party of Pledgor's acquisition of any such
Collateral, and (2) be a "protected purchaser" (as defined in Section 8.303 of
the Code). When applicable law provides more than one method of perfection of
Secured Party's security interest in the Collateral, Secured Party may choose
the method(s) to be used.

                                   ARTICLE V

                               NEGATIVE COVENANTS

        Pledgor covenants and agrees with Secured Party that, from and after the
date of this Agreement until all Obligations shall have been paid in full in
cash, no Letter of Credit shall be outstanding and all of the Commitments shall
have terminated:

        Section 5.1     TRANSFER OR ENCUMBRANCE. Pledgor will not (i) sell,
assign (by operation of law or otherwise) or transfer Pledgor's rights in any of
the Collateral, (ii) grant a Lien in or execute, file or record any financing
statement or other security instrument with respect to the Collateral to any
party other than Secured Party, or (iii) deliver actual or constructive
possession

                                     Page 6
<PAGE>

of any certificate, instrument or document evidencing and/or representing any of
the Collateral to any party other than Secured Party.

        Section 5.2     IMPAIRMENT OF SECURITY INTEREST. Pledgor will not take
or fail to take any action which would in any manner impair the existence or
enforceability of Secured Party's security interest in any Collateral.

        Section 5.3     DILUTION OF OWNERSHIP. As to any Equity Interests
pledged as Collateral (other than Equity Interests of a class which are publicly
traded), Pledgor will not consent to, approve of or allow the issuance of (i)
any additional shares or membership interests of any class of Equity Interests
of such issuer (unless immediately upon issuance additional Equity Interests are
pledged and delivered to Secured Party pursuant to the terms hereof to the
extent necessary to give Secured Party a security interest after such issuance
in at least the same percentage of such issuer's outstanding Equity Interests as
Secured Party had before such issuance), (ii) any instrument convertible
voluntarily by the holder thereof or automatically upon the occurrence or
non-occurrence of any event or condition into, or exchangeable for, any such
Equity Interests, or (iii) any warrants, options, contracts or other commitments
entitling any third party to purchase or otherwise acquire any such Equity
Interests.

        Section 5.4     RESTRICTIONS ON EQUITY INTERESTS. Pledgor will not enter
into any agreement creating, or otherwise permit to exist, any restriction or
condition upon the transfer, voting or control of any Equity Interests pledged
as Collateral, except as consented to in writing by Secured Party.

        Section 5.5     VOTING RIGHTS. As long as no Event of Default shall have
occurred hereunder, any voting rights incident to any membership interests or
other Equity Interests pledged as Collateral may be exercised by Pledgor;
PROVIDED, HOWEVER, that Pledgor will not exercise, or cause to be exercised, any
such voting rights, without the prior written consent of Secured Party, if the
direct or indirect effect of such vote will result in an Event of Default
hereunder.

                                   ARTICLE VI

                             RIGHTS OF SECURED PARTY

        Secured Party shall have the rights contained in this Section at all
times during the period of time this Agreement is effective.

        Section 6.1     POWER OF ATTORNEY. Pledgor hereby irrevocably appoints
Secured Party as Pledgor's attorney-in-fact, such power of attorney being
coupled with an interest, with full authority in the place and stead of Pledgor
and in the name of Pledgor or otherwise, to take any action and to execute any
instrument which Secured Party may from time to time in Secured Party's
discretion deem necessary or appropriate to accomplish the purposes of this
Agreement, including without limitation, the following action:

                (a)     transfer any Equity Interests, instruments, documents or
        certificates pledged as Collateral in the name of Secured Party or its
        nominee;

                                     Page 7
<PAGE>

                (b)     at any time an Event of Default exists, use any
        interest, premium or principal payments, conversion or redemption
        proceeds or other cash proceeds received in connection with any
        Collateral to reduce any of the Obligations;

                (c)     exchange any of the Equity Interests pledged as
        Collateral for any other property upon any merger, consolidation,
        reorganization, recapitalization or other readjustment of the issuer
        thereof, and, in connection therewith, to deposit and deliver any and
        all of such Equity Interests with any committee, depository, transfer
        agent, registrar or other designated agent upon such terms and
        conditions as Secured Party may deem necessary or appropriate;

                (d)     exercise or comply with any conversion, exchange,
        redemption, subscription or any other right, privilege or option
        pertaining to any Equity Interests pledged as Collateral (other than
        voting rights, which are otherwise provided for in Section 4 and Section
        11(g) hereof); PROVIDED, HOWEVER, except as provided herein, Secured
        Party shall not have a duty to exercise or comply with any such right,
        privilege or option (whether conversion, redemption or otherwise) and
        shall not be responsible for any delay or failure to do so; and

                (e)     file any claims or take any action or institute any
        proceedings which Secured Party may deem necessary or appropriate for
        the collection and/or preservation of the Collateral or otherwise to
        enforce the rights of Secured Party with respect to the Collateral.

        Section 6.2     PERFORMANCE BY SECURED PARTY. If Pledgor fails to
perform any agreement or obligation provided herein, Secured Party may itself
perform, or cause performance of, such agreement or obligation, and the expenses
of Secured Party incurred in connection therewith shall be a part of the
Obligations, secured by the Collateral and payable by Pledgor on demand.

Notwithstanding any other provision herein to the contrary, Secured Party does
not have any duty to exercise or continue to exercise any of the foregoing
rights and shall not be responsible for any failure to do so or for any delay in
doing so.

        Section 6.3     MAINTENANCE OF COLLATERAL. Other than the exercise of
reasonable care to assure the safe custody of any Collateral in Secured Party's
possession from time to time, Secured Party does not have any obligation, duty
or responsibility with respect to the Collateral. Without limiting the
generality of the foregoing, Secured Party shall not have any obligation, duty
or responsibility to do any of the following:

                (a)     ascertain any maturities, calls, conversions, exchanges,
        offers, tenders or similar matters relating to the Collateral or
        informing Pledgor with respect to any such matters;

                (b)     fix, preserve or exercise any right, privilege or option
        (whether conversion, redemption or otherwise) with respect to the
        Collateral unless (i) Pledgor makes written demand to Secured Party to
        do so, (ii) such written demand is received by Secured Party in
        sufficient time to permit Secured Party to take the action demanded in
        the ordinary course of its business, and (iii) Pledgor provides
        additional collateral, acceptable to Secured Party in its sole
        discretion;

                                     Page 8
<PAGE>

                (c)     collect any amounts payable in respect of the Collateral
        (Secured Party being liable to account to Pledgor only for what Secured
        Party may actually receive or collect thereon);

                (d)     sell all or any portion of the Collateral to avoid
        market loss;

                (e)     sell all or any portion of the Collateral unless and
        until (i) Pledgor makes written demand upon Secured Party to sell the
        Collateral, and (ii) Pledgor provides additional collateral, acceptable
        to Secured Party in its sole discretion; or

                (f)     hold the Collateral for or on behalf of any party other
        than Pledgor.

                                  ARTICLE VII

                         EVENTS OF DEFAULT AND REMEDIES

        Section 7.1     EVENTS OF DEFAULT. An Event of Default (as defined in
the Credit Agreement) shall constitute an "Event of Default" hereunder.

        Section 7.2     REMEDIES AND RELATED RIGHTS. If an Event of Default
shall have occurred, and without limiting any other rights and remedies provided
herein, under any of the other Loan Documents or otherwise available to Secured
Party, Secured Party may exercise one or more of the rights and remedies
provided in this Article.

        Section 7.3     REMEDIES. Secured Party may from time to time at its
discretion, without limitation and without notice except as expressly provided
in any of the Loan Documents:

                (a)     exercise in respect of the Collateral all the rights and
        remedies of a secured party under the Code (whether or not the Code
        applies to the affected Collateral);

                (b)     reduce its claim to judgment or foreclose or otherwise
        enforce, in whole or in part, the security interest granted hereunder by
        any available judicial procedure;

                (c)     sell or otherwise dispose of, at its office, on the
        premises of Pledgor or elsewhere, the Collateral, as a unit or in
        parcels, by public or private proceedings, and by way of one or more
        contracts (it being agreed that the sale or other disposition of any
        part of the Collateral shall not exhaust Secured Party's power of sale,
        but sales or other dispositions may be made from time to time until all
        of the Collateral has been sold or disposed of or until the Obligations
        has been paid and performed in full), and at any such sale or other
        disposition it shall not be necessary to exhibit any of the Collateral;

                (d)     buy the Collateral, or any portion thereof, at any
        public sale;

                (e)     buy the Collateral, or any portion thereof, at any
        private sale if the Collateral is of a type customarily sold in a
        recognized market or is of a type which is the subject of widely
        distributed standard price quotations;

                (f)     apply for the appointment of a receiver for the
        Collateral, and Pledgor hereby consents to any such appointment; and

                                     Page 9
<PAGE>

                (g)     at its option, retain the Collateral in satisfaction of
        the Obligations whenever the circumstances are such that Secured Party
        is entitled to do so under the Code or otherwise.

Pledgor agrees that in the event Pledgor is entitled to receive any notice under
the Code, as it exists in the state governing any such notice, of the sale or
other disposition of any Collateral, reasonable notice shall be deemed given
when such notice is deposited in a depository receptacle under the care and
custody of the United States Postal Service, postage prepaid, at Pledgor's
address set forth on the signature page hereof, five (5) days prior to the date
of any public sale, or after which a private sale, of any of such Collateral is
to be held. Secured Party shall not be obligated to make any sale of Collateral
regardless of notice of sale having been given. Secured Party may adjourn any
public or private sale from time to time by announcement at the time and place
fixed therefor, and such sale may, without further notice, be made at the time
and place to which it was so adjourned. Pledgor further acknowledges and agrees
that the redemption by Secured Party of any certificate of deposit pledged as
Collateral shall be deemed to be a commercially reasonable disposition under
Section 9.610 of the Code.

        Section 7.4     PRIVATE SALE OF EQUITY INTERESTS. Pledgor recognizes
that Secured Party may be unable to effect a public sale of all or any part of
the Equity Interests pledged as Collateral because of restrictions in applicable
federal and state Equity Interests laws and that Secured Party may, therefore,
determine to make one or more private sales of any such Equity Interests to a
restricted group of purchasers who will be obligated to agree, among other
things, to acquire such Equity Interests for their own account, for investment
and not with a view to the distribution or resale thereof. Pledgor acknowledges
that each any such private sale may be at prices and other terms less favorable
then what might have been obtained at a public sale and, notwithstanding the
foregoing, agrees that each such private sale shall be deemed to have been made
in a commercially reasonable manner and that Secured Party shall have no
obligation to delay the sale of any such Equity Interests for the period of time
necessary to permit the issuer to register such Equity Interests for public sale
under any federal or state Equity Interests laws. Pledgor further acknowledges
and agrees that any offer to sell such Equity Interests which has been made
privately in the manner described above to not less than five (5) bona fide
offerees shall be deemed to involve a "public sale" for the purposes of Section
9.610 of the Code, notwithstanding that such sale may not constitute a "public
offering" under any federal or state Equity Interests laws and that Secured
Party may, in such event, bid for the purchase of such Equity Interests.

        Section 7.5     APPLICATION OF PROCEEDS. If any Event of Default shall
have occurred, Secured Party may at its discretion apply or use any cash held by
Secured Party as Collateral, and any cash proceeds received by Secured Party in
respect of any sale or other disposition of, collection from, or other
realization upon, all or any part of the Collateral as follows in such order and
manner as Secured Party may elect:

                (a)     first, to the payment of all expenses incurred by
        Secured Party (including as Administrative Agent under the Credit
        Agreement) incident to the enforcement of this Agreement, the Credit
        Agreement, any other Loan Document or any of the Obligations (including,
        without limiting the generality of the foregoing, expenses of any entry
        or taking of possession, of any sale, of advertisement thereof, and of
        conveyances, and court costs, compensation of agents and employees,
        legal fees and a reasonable commission to

                                    Page 10
<PAGE>

        Secured Party acting), and to the payment of all other charges,
        expenses, liabilities and advances incurred or made by Secured Party
        (including as Administrative Agent under the Credit Agreement) under
        this Agreement, the Credit Agreement or any other Loan Document or in
        executing any trust or power hereunder or thereunder;

                (b)     second, to payment of the Obligations in such order and
        manner as set forth in Section 10.02(c) of the Credit Agreement;

                (c)     third, to the payment of any other amounts required by
        applicable law (including without limitation, Section 9.610 of the Code
        or any other applicable statutory provision); and

                (d)     fourth, by delivery to Pledgor or any other party
        lawfully entitled to receive such cash or proceeds whether by direction
        of a court of competent jurisdiction or otherwise.

        Section 7.6     DEFICIENCY. In the event that the proceeds of any sale
of, collection from, or other realization upon, all or any part of the
Collateral by Secured Party are insufficient to pay all amounts to which Secured
Party is legally entitled, Pledgor and any party who guaranteed or is otherwise
obligated to pay all or any portion of the Obligations shall be liable for the
deficiency, together with interest thereon as provided in the Loan Documents.

        Section 7.7     NON-JUDICIAL REMEDIES. In granting to Secured Party the
power to enforce its rights hereunder without prior judicial process or judicial
hearing, Pledgor expressly waives, renounces and knowingly relinquishes any
legal right which might otherwise require Secured Party to enforce its rights by
judicial process. Pledgor recognizes and concedes that non-judicial remedies are
consistent with the usage of trade, are responsive to commercial necessity and
are the result of a bargain at arm's length. Nothing herein is intended to
prevent Secured Party or Pledgor from resorting to judicial process at either
party's option.

        Section 7.8     OTHER RECOURSE. Pledgor waives any right to require
Secured Party to proceed against any third party, exhaust any Collateral or
other security for the Obligations, or to have any third party joined with
Pledgor in any suit arising out of the Obligations or any of the Loan Documents,
or pursue any other remedy available to Secured Party. Pledgor further waives
any and all notice of acceptance of this Agreement and of the creation,
modification, rearrangement, renewal or extension of the Obligations. Pledgor
further waives any defense arising by reason of any disability or other defense
of any third party or by reason of the cessation from any cause whatsoever of
the liability of any third party. Until all of the Obligations shall have been
paid in full, Pledgor shall have no right of subrogation and Pledgor waives the
right to enforce any remedy which Secured Party has or may hereafter have
against any third party, and waives any benefit of and any right to participate
in any other security whatsoever now or hereafter held by Secured Party. Pledgor
authorizes Secured Party, and without notice or demand and without any
reservation of rights against Pledgor and without affecting Pledgor's liability
hereunder or on the Obligations, to (i) take or hold any other property of any
type from any third party as security for the Obligations, and exchange,
enforce, waive and release any or all of such other property, (ii) apply such
other property and direct the order or manner of sale thereof as Secured Party
may in its discretion determine, (iii) renew, extend, accelerate, modify,
compromise, settle or release any of the Obligations or other security

                                    Page 11
<PAGE>

for the Obligations, (iv) waive, enforce or modify any of the provisions of any
of the Loan Documents executed by any third party, and (v) release or substitute
any third party.

        Section 7.9     VOTING RIGHTS. Upon the occurrence and during the
continuance of an Event of Default, Pledgor will not exercise any voting rights
with respect to Equity Interests pledged as Collateral. Pledgor hereby
irrevocably appoints Secured Party as Pledgor's attorney-in-fact (such power of
attorney being coupled with an interest) and proxy to exercise any voting rights
with respect to Pledgor's Equity Interests pledged as Collateral upon the
occurrence and during the continuance of an Event of Default.

        Section 7.10    DIVIDEND RIGHTS AND INTEREST PAYMENTS. Upon the
occurrence and during the continuance of an Event of Default:

                (a)     all rights of Pledgor to receive and retain the
        dividends and interest payments which it would otherwise be authorized
        to receive and retain pursuant to SECTION 2.2 shall automatically cease,
        and all such rights shall thereupon become vested with Secured Party
        which shall thereafter have the sole right to receive, hold and apply as
        Collateral such dividends and interest payments; and

                (b)     all dividend and interest payments which are received by
        Pledgor contrary to the provisions of SECTION 7.10(A) shall be received
        in trust for the benefit of Secured Party, shall be segregated from
        other funds of Pledgor, and shall be forthwith paid over to Secured
        Party in the exact form received (properly endorsed or assigned if
        requested by Secured Party), to be held by Secured Party as Collateral.

                                  ARTICLE VIII

                                  MISCELLANEOUS

        Section 8.1     INDEMNITY. Pledgor hereby indemnifies and agrees to hold
harmless Secured Party, and its officers, directors, employees, agents and
representatives (each an "Indemnified Person") from and against any and all
liabilities, obligations, claims, losses, damages, penalties, actions,
judgments, suits, costs, expenses or disbursements of any kind or nature
(collectively, the "Claims") which may be imposed on, incurred by, or asserted
against, any Indemnified Person arising in connection with the Loan Documents,
the Obligations or the Collateral (including without limitation, the enforcement
of the Loan Documents and the defense of any Indemnified Person's actions and/or
inactions in connection with the Loan Documents). WITHOUT LIMITATION, THE
FOREGOING INDEMNITIES SHALL APPLY TO EACH INDEMNIFIED PERSON WITH RESPECT TO ANY
CLAIMS WHICH IN WHOLE OR IN PART ARE CAUSED BY OR ARISE OUT OF THE NEGLIGENCE OF
SUCH AND/OR ANY OTHER INDEMNIFIED PERSON, EXCEPT TO THE LIMITED EXTENT THE
CLAIMS AGAINST AN INDEMNIFIED PERSON ARE PROXIMATELY CAUSED BY SUCH INDEMNIFIED
PERSON'S GROSS NEGLIGENCE OR WILLFUL MISCONDUCT. If Pledgor or any third party
ever alleges such gross negligence or willful misconduct by any Indemnified
Person, the indemnification provided for in this Section shall nonetheless be
paid upon demand, subject to later adjustment or reimbursement, until such time
as a court of competent jurisdiction enters a final judgment as to the extent
and effect of the alleged gross negligence or willful misconduct. The
indemnification provided for in this Section shall survive

                                    Page 12
<PAGE>

the termination of this Agreement and shall extend and continue to benefit each
individual or entity who is or has at any time been an Indemnified Person
hereunder.

        Section 8.2     ACTIONS BY SECURED PARTY. The lien, security interest
and other security rights of Secured Party hereunder shall not be impaired by
(i) any renewal, extension, increase or modification with respect to the
Obligations, (ii) any surrender, compromise, release, renewal, extension,
exchange or substitution which Secured Party may grant with respect to the
Collateral, or (iii) any release or indulgence granted to any endorser,
guarantor or surety of the Obligations. The taking of additional security by
Secured Party shall not release or impair the lien, security interest or other
security rights of Secured Party hereunder or affect the obligations of Pledgor
hereunder.

        Section 8.3     WAIVER. Secured Party may waive any Event of Default
without waiving any other prior or subsequent Event of Default. Secured Party
may remedy any default without waiving the Event of Default remedied. Neither
the failure by Secured Party to exercise, nor the delay by Secured Party in
exercising, any right or remedy upon any Event of Default shall be construed as
a waiver of such Event of Default or as a waiver of the right to exercise any
such right or remedy at a later date. No single or partial exercise by Secured
Party of any right or remedy hereunder shall exhaust the same or shall preclude
any other or further exercise thereof, and every such right or remedy hereunder
may be exercised at any time. No waiver of any provision hereof or consent to
any departure by Pledgor therefrom shall be effective unless the same shall be
in writing and signed by Secured Party and then such waiver or consent shall be
effective only in the specific instances, for the purpose for which given and to
the extent therein specified. No notice to or demand on Pledgor in any case
shall of itself entitle Pledgor to any other or further notice or demand in
similar or other circumstances.

        Section 8.4     AMENDMENT. No modification, consent or amendment of any
provision of this Agreement or any of the other Loan Documents shall be valid or
effective unless the same is in writing and signed by the party against whom it
is sought to be enforced.

        Section 8.5     COSTS AND EXPENSES. Pledgor will upon demand pay to
Secured Party the amount of any and all costs and expenses (including without
limitation, attorneys' fees and expenses), which Secured Party may incur in
connection with (i) the transactions which give rise to the Loan Documents, (ii)
the preparation of this Agreement and the perfection and preservation of the
security interests granted under the Loan Documents, (iii) the administration of
the Loan Documents, (iv) the custody, preservation, use or operation of, or the
sale of, collection from, or other realization upon, the Collateral, (v) the
exercise or enforcement of any of the rights of Secured Party under the Loan
Documents, or (vi) the failure by Pledgor to perform or observe any of the
provisions hereof.

        Section 8.6     GOVERNING LAW. This Agreement shall be governed by and
construed in accordance with the laws of the State of Texas and applicable
federal laws, except to the extent perfection and the effect of perfection or
non-perfection of the security interest granted hereunder, in respect of any
particular Collateral, are governed by the laws of a jurisdiction other than the
State of Texas.

        Section 8.7     SEVERABILITY. If any provision of this Agreement is held
by a court of competent jurisdiction to be illegal, invalid or unenforceable
under present or future laws, such

                                    Page 13
<PAGE>

provision shall be fully severable, shall not impair or invalidate the remainder
of this Agreement and the effect thereof shall be confined to the provision held
to be illegal, invalid or unenforceable.

        Section 8.8     NOTICES. All notices and other communications provided
for under or in connection with this Agreement from one party to the other shall
be in writing and given, and shall conclusively be deemed and considered to have
been given and received, in accordance with Section 12.02 of the Credit
Agreement, addressed to the receiving party at the address on the signature page
hereof or at such other address provided to the Administrative Agent in writing.
Pledgor or Secured Party may designate another address for the receipt of
notices and other communications, provided such new designation is provided in
accordance with the terms and conditions contained in the Credit Agreement.

        Section 8.9     BINDING EFFECT AND ASSIGNMENT. This Agreement (i)
creates a continuing security interest in the Collateral, (ii) shall be binding
on Pledgor and the heirs, executors, administrators, personal representatives,
successors and assigns of Pledgor, and (iii) shall inure to the benefit of
Secured Party and its successors and assigns. Without limiting the generality of
the foregoing, Secured Party may pledge, assign or otherwise transfer the
Obligations and its rights under this Agreement and any of the other Loan
Documents to any other party. Pledgor's rights and obligations hereunder may not
be assigned or otherwise transferred without the prior written consent of
Secured Party.

        Section 8.10    TERMINATION. It is contemplated by the parties hereto
that from time to time there may be no outstanding Obligations, but
notwithstanding such occurrences, this Agreement shall remain valid and shall be
in full force and effect as to subsequent outstanding Obligations. Upon (i) the
satisfaction in full of the Obligations, (ii) the termination or expiration of
any commitment of Secured Party to extend credit to Pledgor, (iii) written
request for the termination hereof delivered by Pledgor to Secured Party, and
(iv) written release delivered by Secured Party to Pledgor, this Agreement and
the security interests created hereby shall terminate. Upon termination of this
Agreement and Pledgor's written request, Secured Party will, at Pledgor's sole
cost and expense, return to Pledgor such of the Collateral as shall not have
been sold or otherwise disposed of or applied pursuant to the terms hereof and
execute and deliver to Pledgor such documents as Pledgor shall reasonably
request to evidence such termination.

        Section 8.11    CUMULATIVE RIGHTS. All rights and remedies of Secured
Party hereunder are cumulative of each other and of every other right or remedy
which Secured Party may otherwise have at law or in equity or under any of the
other Loan Documents, and the exercise of one or more of such rights or remedies
shall not prejudice or impair the concurrent or subsequent exercise of any other
rights or remedies.

        Section 8.12    SURVIVAL; REVIVAL; REINSTATEMENT.

                (a)     All covenants, agreements, representations and\
        warranties made by Pledgor herein and in the certificates or other
        instruments delivered in connection with or pursuant to this Agreement
        or any other Loan Document to which it is a party shall be considered to
        have been relied upon by the Administrative Administrative Agent, the
        Issuing Bank and the Lenders and shall survive the execution and
        delivery of this

                                    Page 14
<PAGE>

        Agreement and the making of any Loans and issuance of any Letters of
        Credit, regardless of any investigation made by any such other party or
        on its behalf and notwithstanding that the Administrative Administrative
        Agent, the Issuing Bank or any Lender may have had notice or knowledge
        of any Default or incorrect representation or warranty at the time any
        credit is extended under the Credit Agreement, and shall continue in
        full force and effect as long as the principal of or any accrued
        interest on any Loan or any fee or any other amount payable under the
        Credit Agreement is outstanding and unpaid or any Letter of Credit is
        outstanding and so long as the Commitments have not expired or
        terminated. The provisions of Section 8.1 shall survive and remain in
        full force and effect regardless of the consummation of the transactions
        contemplated hereby, the repayment of the Loans, the expiration or
        termination of the Letters of Credit and the Commitments or the
        termination of this Agreement, any other Loan Document or any provision
        hereof or thereof.

                (b)     To the extent that proceeds of any Collateral are
        subsequently invalidated, declared to be fraudulent or preferential, set
        aside or required to be repaid to a trustee, debtor in possession,
        receiver or other Person under any bankruptcy law, common law or
        equitable cause, then to such extent, the Obligations so satisfied shall
        be revived and continue as if such payment or proceeds had not been
        received and Secured Party's and the Lenders' Liens , rights, powers and
        remedies under this Agreement and each other Loan Document shall
        continue in full force and effect. In such event, each Loan Document
        shall be automatically reinstated and Borrower shall take such action as
        may be reasonably requested by Secured Party and the Lenders to effect
        such reinstatement.

        Section 8.13    FINAL AGREEMENT OF THE PARTIES. THIS AGREEMENT
(INCLUDING THE EXHIBITS TO THIS AGREEMENT), THE CREDIT AGREEMENT AND THE OTHER
LOAN DOCUMENTS CONSTITUTE A "LOAN AGREEMENT" AS DEFINED IN SECTION 26.02(A) OF
THE TEXAS BUSINESS AND COMMERCE CODE, AND REPRESENT THE FINAL AGREEMENT BETWEEN
THE PARTIES RELATING TO THE SUBJECT MATTER HEREOF AND THEREOF AND MAY NOT BE
CONTRADICTED BY EVIDENCE OF PRIOR, CONTEMPORANEOUS OR SUBSEQUENT ORAL AGREEMENTS
OF THE PARTIES. THERE ARE NO UNWRITTEN ORAL AGREEMENTS BETWEEN THE PARTIES.

        Section 8.14    COUNTERPARTS; ELECTRONIC DELIVERY OF SIGNATURE PAGE.
This Agreement may be executed in any number of counterparts, all of which taken
together shall constitute one and the same instrument and any of the parties
hereto may execute this Agreement by signing any such counterpart. Delivery of a
manually executed signature page of this Agreement by e-mail or facsimile shall
be effective as delivery of an original executed signature page of this
Agreement and binding against the parties hereto.

        Section 8.15    ACKNOWLEDGEMENTS. Pledgor hereby acknowledges that:

                (a)     it has been advised by counsel in the negotiation,
        execution and delivery of this Agreement and the other Loan Documents to
        which it is a party;

                (b)     neither Secured Party nor any Lender has any fiduciary
        relationship with or duty to Pledgor arising out of or in connection
        with this Agreement or any of the other Loan Documents, and the
        relationship between Pledgor, on the one hand, and Secured

                                    Page 15
<PAGE>

        Party and Lenders, on the other hand, in connection herewith or
        therewith is solely that of debtor and creditor; and

                (c)     no joint venture is created hereby or by the other Loan
        Documents or otherwise exists by virtue of the transactions contemplated
        hereby among the Lenders or among Pledgor and the Lenders.

                (d)     Each of the parties hereto specifically agrees that it
        has a duty to read this Agreement and the other Loan Documents and
        agrees that it is charged with notice and knowledge of the terms of this
        Agreement and the other Loan Documents; that it has in fact read this
        Agreement and the other Loan Documents and is fully informed and has
        full notice and knowledge of the terms, conditions and effects thereof;
        that it has been represented by independent legal counsel of its choice
        throughout the negotiations preceding its execution of this Agreement;
        and has received the advice of its attorney in entering into this
        Agreement; and that it recognizes that certain of the terms of this
        Agreement result in one party assuming the liability inherent in some
        aspects of the transaction and relieving the other party of its
        responsibility for such liability. EACH PARTY HERETO AGREES AND
        COVENANTS THAT IT WILL NOT CONTEST THE VALIDITY OR ENFORCEABILITY OF ANY
        EXCULPATORY PROVISION OF THIS AGREEMENT ON THE BASIS THAT THE PARTY HAD
        NO NOTICE OR KNOWLEDGE OF SUCH PROVISION OR THAT THE PROVISION IS NOT
        "CONSPICUOUS."

                           [SIGNATURE PAGE TO FOLLOW]

                                    Page 16
<PAGE>

         EXECUTED as of the date first written above.

                                         PLEDGOR:

                                         ISRAMCO, INC.

                                         By: /s/ Haim Tsuff
                                             Haim Tsuff, Chief Executive Officer

Pledgor's Address:

11767 Katy Freeway, Suite 711
Houston, TX  77079

Secured Party's Address:

1000 Louisiana Street
9th Floor
Houston, TX  77002

                       Signature Page to Pledge Agreement

<PAGE>
<TABLE>
<CAPTION>

                                               SCHEDULE 1
                                               ----------
                                                   TO
                                            PLEDGE AGREEMENT

                                          Dated March 2, 2007

                                             by and between
                                             ISRAMCO, INC.,
                                               as Pledgor

                                                  and

                                        WELLS FARGO BANK, N.A.,
                                            as Secured Party

        The following Equity Interest is a part of the Collateral as defined in the Pledge Agreement:

                                  PERCENTAGE    PERCENTAGE     CLASS OF         NO. OF     CERTIFICATE
    OWNER            ISSUER         OWNED         PLEDGED   STOCK OR OTHER      SHARES         NO.
                                                            EQUITY INTEREST
--------------   -------------   ------------  ------------ ---------------- -----------  ------------
<S>              <C>                 <C>           <C>        <C>               <C>           <C>
Isramco, Inc.       Isramco          100%          100%       All of the        [N/A]         [N/A]
                 Energy, L.L.C.                               membership
                                                               interests
</TABLE>

                                          Schedule 1 - Page 1
<PAGE>

                           ACKNOWLEDGMENT AND CONSENT

        The undersigned hereby acknowledges receipt of a copy of the Pledge
Agreement dated as of March 2, 2007 (the "PLEDGE AGREEMENT"), made by Isramco,
Inc., a Delaware corporation, as Pledgor for the benefit of Wells Fargo Bank,
N.A., as Secured Party. The undersigned agrees for the benefit of Secured Party
and the Lenders as follows:

        1.      The undersigned will be bound by the terms of the Pledge
Agreement and will comply with such terms insofar as such terms are applicable
to the undersigned.

        2.      The terms of Article VII of the Pledge Agreement shall apply to
it, MUTATIS MUTANDIS, with respect to all actions that may be required of it
pursuant thereto.

                                            ISRAMCO ENERGY, L.L.C.

                                            By:
                                               -----------------------
                                                     Yossi Levy
                                                     President

                           Acknowledgment and Consent

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