Document:

ex10-27.htm

    
      

    

    Exhibit
      10.27

     

    
      

      

      AMENDMENT
        NO. 5 TO REVOLVING CREDIT AGREEMENT

      

      This
        Amendment No. 5 (this “Amendment
        No. 5”) to Revolving Credit Agreement is made and entered into and has an
        effective date as of the ___ day of October, 2007, by and among WHITESTONE
        REIT
        f/k/a HARTMAN REIT OPERATING PARTNERSHIP, L.P. (“Whitestone OP”), WHITESTONE
        REIT OPERATING PARTNERSHIP III, L.P. f/k/a HARTMAN REIT OPERATING PARTNERSHIP
        III, L.P. (“WHITESTONE III”) and the Subsidiaries of Whitestone OP and/or
        Whitestone III which are listed on Schedule 1 (as such Schedule 1 may be
        amended from time to time) (Whitestone OP, Whitestone III and any such
        Subsidiary being hereinafter referred to collectively as the “Borrower” unless
        referred to in their individual capacities) to a certain Revolving Credit
        Agreement (as amended, the “Credit Agreement”) dated as of March 11, 2005, each
        having its principal place of business at 1450 West Sam Houston Parkway North,
        Suite 100, Houston, Texas 77043, KEYBANK NATIONAL ASSOCIATION (“KeyBank”),
        having a principal place of business at 127 Public Square, Cleveland, Ohio
        44114, and certain other lenders individually and in certain agent capacities
        (collectively with KeyBank, the “Lenders”) and KeyBank, as administrative agent
        for itself and each other Lender (the “Agent”).

      

      WHEREAS,
        the Borrower has requested
        certain amendments to the Credit Agreement, as set forth herein.

      

      NOW,
        THEREFORE, in consideration of One
        Dollar ($1.00) and other good and valuable consideration by each of the parties
        hereto, the receipt and sufficiency of which are hereby acknowledged, it
        is
        agreed as follows:

      

      
        	
                 

              	
                1.

              	
                Capitalized
                  terms used but not defined herein shall have the respective meanings
                  assigned to such terms in the Credit
                  Agreement.

              

      

      

      
        	
                 

              	
                2.

              	
                Effective
                  from and after May 25, 2007:

              

      

      

      
        	
                 

              	
                (a)

              	
                The
                  term Loan Documents shall include this Amendment No. 5 to Credit
                  Agreement, dated as of October __, 2007, among the Borrower, the
                  Lenders
                  and the Agent.

              

      

      

      
        	
                 

              	
                (b)

              	
                Section
                  1.1 of the Credit Agreement is amended by inserting, in the appropriate
                  alphabetical order, the following new
                  definition:

              

      

      

      
        	
                 

              	
                “G
                  and A Expenses.  All payroll and other employment-related
                  expenses incurred by the Trust in connection with becoming a self-managed
                  REIT.”

              

      

       

       

      
        
           

        

        
          -1-

          
            

          

        

        
           

        

      

       

      
        	
                 

              	
                (b)

              	
                Section
                  9.6(a) of the Credit Agreement is amended to read in its entirety
                  as
                  follows:

              

      

      

      “(a)
        The
        Borrower will not declare or make (i) annual Distributions in excess of (x)
        105%
        of “funds from operations” for the fiscal quarters ended March 31, 2007, June
        30, 2007, September 30, 2007, December 31, 2007 and March 31, 2008 or (y)
        95% of
“funds from operations” for any fiscal quarter thereafter; or (ii) any
        Distributions during any period after any Event of Default has occurred;
        provided, however, (a) that the Borrower may at all times
        (including while an Event of Default is continuing) make Distributions to
        the
        extent (after taking into account all available funds of the Trust from all
        other sources) required in order to enable the Trust to continue to qualify
        as a
        REIT and (b) in the event that the Borrower cures any such Event of Default
        in
        clause (ii) above and the Agent has accepted such cure prior to accelerating
        the
        Loan, the limitation of clause (ii) above shall cease to apply with respect
        to
        such Event of Default.”

      

      
        	
                 

              	
                (b)

              	
                Section
                  9.6(c) of the Credit Agreement is amended to read in its entirety
                  as
                  follows:

              

      

      

      “(c)           Notwithstanding
        the definition of “funds from operations” by the Board of Governors of the
        National Association of Real Estate Investment Trusts, for purposes of
        determining the Distributions permitted to be declared under Section 9.6(a)(i),
        (i) for any fiscal period ending on or after December 31, 2006 through December
        31, 2007, Excluded Litigation Fees shall not reduce “funds from operations” and
        (ii) “funds from operations” shall be calculated in a manner consistent with its
        calculation prior to the Trust becoming a self-managed fund and shall not
        be
        reduced by G and A Expenses.”

      

      
        	
                 

              	
                3.

              	
                The
                  Borrower hereby represents and warrants as
                  follows:

              

      

      

      (a)  Representations
        in Credit Agreement.  Both before and after giving effect to this
        Amendment No. 5, each of the representations and warranties made by or on
        behalf
        of the Borrower, the Trust or any of their respective Subsidiaries contained
        in
        the Credit Agreement or any of the other Loan Documents, was true when made
        and
        is true on and as of the date hereof with the same full force and effect
        as if
        each of such representations and warranties had been made on the date hereof
        and
        in this Amendment No. 5, except to the extent that such representations and
        warranties relate expressly to an earlier date.

      

      
        
           

        

        
          -2-

          
            

          

        

        
           

        

         

      

      (b)  No
        Events of Default.  No Default or Event of Default exists on the
        date hereof (both before and after giving effect to this Amendment No.
        5).

      

      (c)  Binding
        Effect of Documents.  This Amendment No. 5 has been duly executed
        and delivered by the Borrower and the Trust and is in full force and effect
        as
        of the date hereof, and the agreements and obligations of the Borrower contained
        herein constitute legal, valid and binding obligations of the Borrower
        enforceable against the Borrower in accordance with their respective
        terms.

      

      
        	
                 

              	
                4.

              	
                Provisions
                  of General Application.

              

      

      

      (a)  No
        Other Changes.  Except as otherwise expressly provided by this
        Amendment No. 5, all of the terms, conditions and provisions of the Credit
        Agreement and each of the other Loan Documents remain unaltered.  The
        Credit Agreement and this Amendment No. 5 shall be read and construed as
        one
        agreement.

      

      (b)  Governing
        Law.  This Amendment No. 5 is intended to take effect as a sealed
        instrument and shall be deemed to be a contract under the laws of the State
        of
        Ohio.  This Amendment No. 5 and the rights and obligations of each of
        the parties hereto shall be governed by and interpreted and determined in
        accordance with the laws of the State of Ohio.

      

      (c)  Binding
        Effect; Assignment.  This Amendment No. 5 shall be binding upon
        and inure to the benefit of each of the parties hereto and their respective
        successors in title and assigns.

      

      (d)  Counterparts.  This
        Amendment No. 5 may be executed in any number of counterparts, but all such
        counterparts shall together constitute but one and the same
        agreement.  In making proof of this Amendment No. 5, it shall not be
        necessary to produce or account for more than one counterpart thereof signed
        by
        each of the parties hereto.

      

      (e)  Conflict
        with Other Agreements.  If any of the terms of this Amendment No.
        5 shall conflict in any respect with any of the terms of any of the Credit
        Agreement or any other Loan Document, the terms of this Amendment No. 5 shall
        be
        controlling.

      

      (f)  Condition
        Precedent.  The effectiveness of this Amendment No. 5 is subject
        to the condition precedent that the Agent shall have received, in form and
        substance satisfactory to it, an executed original of this Amendment No.
        5 from
        each Borrower and from the Majority Lenders.

      

      
        
           

        

        
          -3-

          
            

          

        

        
           

        

         

      

      WITNESS
        the execution hereof, under seal, as of the day and year first written
        above

      

      

      KEYBANK
        NATIONAL ASSOCIATION,

      as
        Administrative Agent

       

       

      

      
        
          	
                   

                	
                  By:

                	
                  _________________________

                

          	 	 	
                  Name:

                

          	 	 	Title:

        

         

      

      
 

      

      

      (Signatures
        continued on next page)

      

      

      
        
           

        

        
          -4-

          
            

          

        

        
           

        

         

      

      WHITESTONE
        REIT

      

      
        	
                 

              	
                By:

              	
                Whitestone
                  Commercial Properties REIT, a Maryland real estate investment trust,
                  its
                  sole general partner

              

      

      

      

      
        
          	
                   

                	
                  By:

                	
                  _________________________

                

          	 	 	
                  James
                    C. Mastandrea, CEO

                

        

         

        

      

      

      WHITESTONE
        REIT OPERATING PARTNERSHIP III LP

      

      
        	
                 

              	
                By:

              	
                Whitestone
                  REIT Operating Partnership III GP LLC, a Texas limited liability
                  company,
                  its sole general partner

              

      

      

      
        	
                 

              	
                By:

              	
                Whitestone
                  REIT, a Maryland real estate investment trust, its sole
                  member

              

      

      

      
        	
                 

              	
                By:

              	
                Whitestone
                  Commercial Properties REIT, a Maryland real estate investment trust,
                  its
                  sole general partner

              

      

      

      

      
        
          	
                   

                	
                  By:

                	
                  _________________________

                

        

        
          	
                   

                	
                  James
                    C. Mastandrea, CEO

                

        

        

 

      

      WHITESTONE
        REIT OPERATING PARTNERSHIP III GP LLC, a Texas limited liability
        company

      

      
        	
                 

              	
                By:

              	
                Whitestone
                  REIT, a Maryland real estate investment trust, its sole
                  member

              

      

      

      
        	
                 

              	
                By:

              	
                Whitestone
                  Commercial Properties REIT, a Maryland Real estate investment trust,
                  its
                  sole general partner

              

      

      

      

      

      
        	
                 

              	
                By:

              	
                ____________________________

              

      

      
        	
                 

              	
                James
                  C. Mastandrea, CEO

              

      

      

      

      
        
           

        

        
          -5-

          
            

          

        

        
           

        

         

      

      WHITESTONE
        REIT OPERATING PARTNERSHIP III LP LTD, a Texas limited
        partnership

      

      
        	
                 

              	
                By:

              	
                Whitestone
                  REIT Operating Partnership III GP LLC, a Texas limited liability
                  company,
                  its sole general partner

              

      

      

      
        	
                 

              	
                By:

              	
                Whitestone
                  REIT, a Maryland real estate investment trust, its sole
                  member

              

      

      

      
        	
                 

              	
                By:

              	
                Whitestone
                  Commercial Properties REIT, a Maryland Real estate investment trust,
                  its
                  sole general partner

              

      

      

      

      

      
        	
                 

              	
                By:

              	
                _________________________

              

      

      
        	
                 

              	
                James
                  C. Mastandrea, CEO

              

      

      

      ACCEPTED
        AND AGREED AS OF

      THE
        DATE
        FIRST WRITTEN ABOVE:

      

      WHITESTONE
        COMMERCIAL PROPERTIES REIT, a

      Maryland
        real estate investment trust, Guarantor

      

      

      

      
        	
                By:

              	
                _________________________________

              

      

      
        	
                 

              	
                James
                  C. Mastandrea, CEO

              

      

    

     

     

    -6-<PAGE>
                                                                    Exhibit 10.1

                              EMPLOYMENT AGREEMENT

        This Employment Agreement (this "Agreement") made effective as of the
1st day of August, 2007 (the "Effective Date"), by and between ISRAMCO, INC., a
Delaware corporation (the "Corporation"), with its principal operating offices
located in Houston, Texas, and EDY FRANCIS (the "Employee").

                              W I T N E S S E T H:

        WHEREAS, the Corporation and its subsidiaries are involved in the
business of exploring for, developing and producing hydrocarbons and operating
producing properties in the United States (referred to as the "Business");

        WHEREAS, the Corporation and its subsidiaries own, control and have
exclusive access to Confidential Information, as defined below;

        WHEREAS, the Corporation desires to retain the services of the Employee,
and the Employee desires to be employed by Corporation, upon the terms and
conditions hereinafter set forth.

        NOW, THEREFORE, in consideration of the premises, the agreements herein
contained and other good and valuable consideration, receipt of which is hereby
acknowledged, the parties hereto agree as follows:

1.      EMPLOYMENT BY CORPORATION. Subject to the terms and conditions
hereinafter set forth, Corporation hereby agrees to employ the Employee, and the
Employee hereby agrees to serve Corporation, in the capacity and for the Term of
Employment (as defined below) specified herein.

2.      SCOPE OF EMPLOYMENT. During the Term of Employment hereunder, the
Employee will serve as the chief financial officer the Corporation and its
subsidiaries, including but not limited to Jay Petroleum Corp, Jay Management
Company, Inc., and Isramco Energy, LLC, a Texas limited liability company (each
a "Company" and collectively, the "Companies"). In this connection, the Employee
will occupy the top financial position in the Corporation and the Companies and
will, among other duties, be responsible for:

        A.      Overseeing all Corporate and Company accounting practices,
including accounting departments, preparing budgets, financial reports, tax and
audit functions;

        B.      Directing financial strategy, planning and forecasts; conferring
with the board of directors and officers of the Corporation and manager(s) and
officers of the Companies;

        C.      Ensuring compliance with all financial reporting requirements
applicable to the Corporation and the Companies, including reports due pursuant
to loan covenants and banking requirements;

                              EMPLOYMENT AGREEMENT
                                     PAGE 1
<PAGE>

        D.      Supervising investment and collection of funds;

        E.      Providing studies, analysis and reports on trends, opportunities
for expansion and projection of future Corporation and Company growth;

        F.      Assisting the Corporation and the Companies in the creation,
maintenance and expansion of favorable relations with banking and other
financial partners;

        G.      Using his best efforts, diligently, to the best of Employee's
ability, and with the highest degree of good faith and loyalty, perform all such
duties incident to his position to promote the interests and goodwill of the
Corporation and Companies; and

        H.      Such other duties and responsibilities as may from time - to -
time be assigned by the president or chief executive officer the Corporation.

3.      ENGAGING IN OTHER EMPLOYMENT. The Employee shall devote his entire
productive time, ability, and attention to the business of the Corporation and
Companies during the term of this Agreement and shall not engage in any
competitive business activity. The Employee shall not directly or indirectly
render any services of a business, commercial, or professional nature to any
other persons or organization, whether for compensation or otherwise, without
the prior written consent of the Corporation. Notwithstanding anything herein
contained to the contrary, the Employee shall be able to devote such time as he
deems reasonably necessary to his own private investments and affairs, so long
as the performance of the Employee hereunder is not impaired and the covenants
contained herein are not violated.

        A.      Without limitation of the foregoing, to avoid any such conflicts
of interest, Employee (either individually or with any related party or parties)
shall not, without the approval of the Corporation directly or indirectly (other
than through investment companies, investment funds or other vehicles in which
the Employee has no influence over specific investment decisions): (1) invest in
the securities of any company in which the Corporation itself has made an equity
or equity linked investment; (2) make any investment in a potential corporate
opportunity; or (3) make any investment (determined at the time it is made),
whether direct or indirect through any other person or entity, in any competitor
of the Corporation.

        B.      For purposes of this Section 3, a "corporate opportunity" means
business opportunity that Employee, or, to his, a related party, intends to
pursue, whether through investment or participation in the business, and that
the Corporation or any Company might reasonably be interested in pursuing, which
(1) has a direct or close relationship to a business or line of business in
which the Corporation and/or any Company is currently engaged, or (2) with
respect to which (a) the Corporation and/or any Company has announced that it
intends to engage or (b) the Employee is aware the Corporation and/or any
Company has determined it intends to engage or is in the process of considering
whether it will engage.

4.      COMPENSATION. As compensation for his services hereunder, the
Corporation shall pay, during the Term of Employment, and the Employee shall be
entitled to receive, subject to the terms and conditions of this Agreement,
compensation in the amount of $50,000.00 per annum (the "Base

                              EMPLOYMENT AGREEMENT
                                     PAGE 2
<PAGE>

Salary"), payable in accordance with Corporation's payroll policy. All
compensation paid to the Employee shall be subject to applicable employment and
withholding taxes. The Employee shall be responsible for any taxes resulting
from a determination that any portion of any benefit supplied to the Employee
may be reimbursing personal as well as business expenses.

5.      VACATION; HOLIDAYS; SICK LEAVE. During the Term of Employment the
Employee shall be entitled to five (5) working days of paid sick leave ("Sick
Leave") , Corporation holidays, and an annual vacation of three (3) weeks
(fifteen working days), including American holidays ("Vacation"). All Vacation
time and Sick Leave not taken prior to calendar year end shall be forfeited. All
of the foregoing shall be subject to and taken in accordance with the regular
policy of Corporation, during which time Employee's Base Salary shall be paid in
full. Sick Leave and Vacation for the current year will be pro rated, commencing
three calendar months after the Effective Date.

6.      BUSINESS EXPENSES. The Employee, from time to time, may incur reasonable
expenses. Corporation agrees that during the Term of Employment it will
reimburse the Employee for out-of-pocket expenses reasonably incurred by him in
connection with the performance of his services hereunder upon the presentation
by the Employee of an itemized monthly accounting of such expenditures,
including receipts as required or appropriate for federal income tax regulations
and such other documentation in support thereof that is adequate in
Corporation's sole discretion.

7.      EMPLOYEE BENEFITS DURING THE TERM OF EMPLOYMENT. It is understood and
agreed that the Employee shall not be entitled to participate in any health and
dental benefits plans of Corporation now or hereafter in effect or to
participate in any 401(k) plans, retirement plans or arrangements of Corporation
now or hereafter in effect. In the event the Corporation offers such benefits
and in the event the Employee desires to participate, such participation will
subject to the mutual written agreement of Corporation and Employee as to the
terms and conditions of any such participation.

        A.      AUTOMOBILE. For the term of this Agreement, The Corporation will
                provide Employee with a vehicle of a make and model selected in
                the sole discretion of the Corporation (the:" Vehicle"). The
                Corporation will pay all reasonable and necessary operating and
                maintenance expenses for the Vehicle including insurance upon
                presentation of an itemized account therefore in accordance with
                the Corporation's businesses expense reimbursement policy. The
                Employee will maintain the Vehicle in accordance with service
                requirements.

        B.      HOUSING. For the term of this Agreement, the Corporation will
                provide Employee with completely furnished and equipped housing,
                as selected by the Corporation in its sole discretion.

        C.      FLIGHT TICKETS. For the term of this Agreement, The Corporation
                will provide Employee with a flight ticket to Israel, for
                homeland vacation, twice a year (economy class).The Employee
                shall give the Corporation a prior written notice of 30 days
                regarding his scheduled homeland vacation.

        D.      SIGNATURE BONUS. The Corporation will grant the Employee with a
                $ 5,000 (five thousand) signature bonus (the: "Bonus"). In the
                event the Term of Employment ( as

                              EMPLOYMENT AGREEMENT
                                     PAGE 3
<PAGE>

                defined below) shall be terminated within 12 months from its
                commencement (from any reason), the Bonus shall be repaid to the
                Corporation in whole (but without any interest) upon the
                termination of the Term of Employment.

8.      TERM OF EMPLOYMENT. The "Term of Employment," as used herein, shall mean
a period commencing on September 2, 2007, and shall continue until and unless
terminated sooner as herein provided.

9.      TERMINATION OF EMPLOYMENT. The Employee may terminate the Term of
Employment, but not this Agreement, for any reason, with or without notice.
Corporation may terminate the Term of Employment, but not this Agreement, for
any reason with notice or without notice for Cause, or the death or Permanent
Disability of Employee. For purposes of this Agreement,

        A.      "CAUSE" means:

                (i) the commission by the Employee of an act constituting a
        dishonest or other act of misconduct, or a fraudulent act or a felony
        under the laws of any state or of the United States to which Corporation
        or Employee is subject to;

                (ii) the material breach by the Employee of any of the
        provisions of this Agreement; Corporation which remains uncured after
        fifteen (15) days written notice thereof;

                (iii) the Employee's violation of rules governing employee
        performance, including, without limitation, any rules, regulations or
        statements now or hereafter set forth by Corporation, which violation
        remains uncured after fifteen (15) days written notice thereof; or

                (iv) actions by Employee which are designed or intended to be
        harmful to the interests of the Corporation or the Companies or their
        business relationships or damage the Corporation's or any Company's
        reputation or goodwill in the conduct of its business or valuation by
        the financial markets, or which would reasonably be anticipated to have
        such effect.

        B.      "PERMANENT DISABILITY" means a disability by reason of the
occurrence of an injury or disease (including a mental illness) or a physical or
mental condition that (i) results in a person becoming unable adequately to
perform his or her customary duties for the Corporation, and (ii) has existed
for a continuous period of at least fourteen (14) consecutive weeks, during the
last ten (10) weeks of which time such person has been unable to average in
excess of twenty (20) hours per week of the type of work for which such person
is employed by the Corporation. In determining whether a Member is Permanently
Disabled, the Corporation may rely upon the opinion of any doctor licensed to
practice medicine who has been selected by the Corporation, and any other
evidence the Corporation deems appropriate. The Corporation shall be the sole
judge as to whether a Member is Permanently Disabled as defined herein, and its
judgment shall be binding and conclusive.

        C.      EFFECT OF TERMINATION.

                              EMPLOYMENT AGREEMENT
                                     PAGE 4
<PAGE>

                (i) TERMINATION BY CORPORATION FOR CAUSE; PERMANENT DISABILITY
        OR DEATH OR TERMINATION BY EMPLOYEE WITHOUT NOTICE. In the event the
        Corporation terminates Employee's employment for Cause, Permanent
        Disability, or Death, or in the event the Employee terminates this
        Agreement without a minimum of sixty (60) calendar days' written notice:

                        (a)     The Corporation will pay Employee his Base
                Salary on a pro rata basis through the effective time of
                termination along with any unreimbursed expenses incurred as of
                the effective date of termination, subject to and in accordance
                with Section 6;

                        (b)     The Corporation's obligation to make any other
                payments shall immediately terminate; and

                        (c)     The provisions of Sections 10 and 18 will remain
                in force according to their terms.

                (ii) TERMINATION BY CORPORATION WITHOUT CAUSE, DEATH, PERMANENT
        DISABILITY OR NOTICE. If this Agreement is terminated by Corporation
        without: i) Cause; or ii) the death of Employee; or iii) without the
        Permanent Disability of Employee; or iv) without sixty (60) calendar
        days' written notice, at the option of Corporation: i) the Employee
        shall be paid a monthly sum equal to the Employee's Base Salary for
        three months, less all applicable taxes; or (ii) the Employee will be
        paid a lump sum equal to $30,000.00, less all applicable taxes. In
        either event, the Corporation will pay Employee unreimbursed expenses
        incurred as of the effective date of termination, subject to and in
        accordance with Section 6, and the provisions of Sections 10 and 18 will
        remain in force according to their terms.

                (iii) TERMINATION BY EITHER PARTY ON NOTICE. In the event either
        Corporation or Employee terminates the employment of Employee upon sixty
        (60) days' written notice, the Corporation will pay Employee his Base
        Salary and all other benefits, and Employee shall perform all duties
        required hereunder, through the effective time of termination. After
        termination of employment the provisions of Sections 10 and 18 will
        remain in force according to their terms.

        D.      RETURN OF PROPERTY. All computers, equipment, files, records,
documents, drawings, presentations, specifications, equipment, data, computer
printouts, records, written materials and similar items relating to the business
of the Corporation, whether prepared by the Employee or otherwise coming into
his possession shall remain the exclusive property of the Corporation and shall
be returned to the premises of the Corporation at the termination of employment
termination or whenever requested by the Corporation. In the event the Employee
fails to return the Corporation's property when required or requested to do so,
the Corporation may, in addition to any other remedy provided by law, withhold
any amounts due the Employee until full compliance with this Section 9.D.

10.     NON - DISCLoSURE COVENANTS. The Employee hereby acknowledges that during
the course of

                              EMPLOYMENT AGREEMENT
                                     PAGE 5
<PAGE>

his employment, he will have access to and will become familiar with the
confidential information of the Corporation and its business, including, without
limitation, financial information, personnel information, lists of vendors,
investors, partners and accounts, internal corporate information relating to the
Corporation and its Related Entities, revenue information, information on
prospective acquisitions and sales, leasing information, production and geologic
information, seismic and geophysical information and such other information of a
confidential nature which must remain confidential for the continuing success of
the Corporation (the "Confidential Information"). Additionally, the Employee
acknowledges that the Corporation's methods of doing business and the
Confidential Information, as they may exist from time to time, are valuable,
special and unique assets of the Corporation's business. Therefore, in
consideration of the mutual promises herein contained, and for other good and
valuable consideration, to protect the foregoing valuable property of the
Corporation, the Corporation and the Employee expressly covenant and agree as
follows:

        A.      NON - DISCLOSURE. The Employee will not, during and after the
termination of his employment for any reason:

                (i)     Disclose, directly or indirectly, the Corporation's
        methods of doing business or Confidential Information, or any part
        thereof, to any person, firm, corporation, association or other entity
        for any reason or purpose whatsoever, unless such disclosure is done in
        the normal course of Employee's business for Corporation or on behalf of
        the Corporation with Corporation's consent;

                (ii)    Directly or indirectly use the Corporation's methods of
        doing business or Confidential Information, or any part thereof, for his
        own purpose or for his own benefit in any activity of any nature
        whatsoever; or

                (iii)   Directly or indirectly disclose the terms of this
        Agreement except as may be required for income tax purposes or by court
        order.

        B.      ACKNOWLEDGEMENTS. The parties acknowledge:

                (i)     That due to the nature of the Corporation's business,
        the foregoing covenants contain limitations as to scope of activity to
        be restrained that are reasonable and do not impose a greater restraint
        upon the Employee than is reasonably necessary to protect the goodwill
        or other business interests of the Corporation;

                (ii)    That these covenants protect a legitimate interest of
        the Corporation and do not serve solely to limit the Corporation's
        future competition or the Employee's ability to find employment;

                (iii)   That this Agreement is not an invalid or unreasonable
        restraint of trade;

                (iv)    That a breach of Section 10 of this Agreement by the
        Employee would cause irreparable damage to the Corporation; and

                              EMPLOYMENT AGREEMENT
                                     PAGE 6
<PAGE>

                (v)     That the signing of this Agreement is necessary to the
        Employee's employment by the Corporation.

        C.      REMEDIES. In the event of any breach, or of any threatened or
attempted breach by the Employee of the covenants herein contained, it is agreed
that in addition to all other legal remedies, Employee agrees that Corporation
shall be entitled to a temporary restraining order, preliminary injunction
and/or permanent injunction restraining and enjoining Employee from violating
the provisions herein without the requirement to post a bond. The Employee
further agrees that for the purpose of any such injunction proceeding, it shall
be presumed that the Corporation's legal remedies would be inadequate and that
the Corporation would suffer irreparable harm as a result of the Employee's
violation of the provisions of this Agreement. In any proceeding brought by the
Corporation to enforce the provisions of this Agreement, no other matter
relating to the terms of any claim or cause of action of the Employee against
the Corporation will be a defense thereto. Nothing in this Agreement shall be
construed to prohibit Corporation from pursuing any other available remedies for
such breach or threatened breach, including the recovery of damages from
Employee. If the Employee breaches any of the terms of this Agreement, then
Employee shall pay to Corporation all of Corporation's costs and expenses,
including attorneys' fees, incurred by Corporation in enforcing the terms of
this Agreement.

        D.      JUDICIAL MODIFICATION. The Corporation and the Employee further
agree that, should the legality or enforceability of the covenants ever be
challenged and any part thereof be deemed unreasonably excessive, the Court
rendering such decision shall not invalidate the covenants in their entirety,
but rather shall reduce the scope thereof to what the Court deems reasonable
under the circumstances.

        E.      AUTHORIZATION TO NOTIFY. Employee hereby authorizes Corporation
to notify third parties about Corporation's rights and obligations under this
Agreement following the termination of the Agreement.

11.     REPRESENTATIONS AND WARRANTIES OF EMPLOYEE. In addition to the
representations and warranties contained in other Sections of this Agreement,
and in any other agreements executed by the parties hereto, the Employee makes
the following representations and warranties which shall be true and correct as
of the date hereof and which will survive the date hereof:

        A.      The Employee is free to enter into this transaction and that
there are no agreements which are in full force and effect which prohibit or
limit the full effectiveness of the matters and obligations herein stated;

        B.      All information furnished to the Corporation or its agent is
true and correct;

        C.      There are no actions or proceedings pending or threatened
against the Employee which may affect his ability to perform hereunder; and

        D.      No special consents are required to carry out the transaction
contemplated by this Agreement.

                              EMPLOYMENT AGREEMENT
                                     PAGE 7
<PAGE>

12.     THIRD-PARTY BENEFICIARIES. The Corporation and the Employee acknowledge
and agree that the term "Corporation" as used in this Agreement shall, for
purposes of Employee's covenants and obligations hereunder, include not only the
Corporation but also the Companies and its parent, sister, or any other related
affiliates or subsidiaries, presently existing or subsequently formed, or any
other entity which is a shareholder of the Corporation or has any of the same
shareholders of the Corporation (collectively, the "Related Entities") and such
Related Entities are third-party beneficiaries of the covenants contained in
this Agreement. It is further agreed by the Employee that the Corporation and
the Related Entitles may jointly or severally enforce the covenants contained in
Sections 10 or 18 hereof.

13.     SEVERABILITY. Employee acknowledges and agrees that each agreement and
covenant set forth herein constitutes a separate agreement independently
supported by good and adequate consideration and that each such agreement shall
be severable from the other provisions of this Agreement and shall survive this
Agreement. Employee understands and agrees that this Agreement is to be enforced
to the fullest extent permitted by law. In the event that any of the provisions
of this Agreement are held to be too broad to be enforced as written or
otherwise invalid or unenforceable in whole or in part, those provisions to the
extent enforceable and all other provisions shall nevertheless continue to be
valid and enforceable as though the invalid or unenforceable parts had not been
included in this Agreement. In the event that any provision relating to the time
period or scope of a restriction shall be declared by a court of competent
jurisdiction to exceed the maximum time period or scope such court deems
reasonable and enforceable, then the time period or scope of the restriction
deemed reasonable and enforceable by the court shall become and shall thereafter
be the maximum time period or the applicable scope of the restriction. If,
however, any provision is held to be illegal, invalid or unenforceable under
present or future law, and not subject to reformation, then (i) such provision
shall be fully severable, (ii) this Agreement shall be construed and enforced as
if such provision was never a part of this Agreement and (iii) the remaining
provisions of this Agreement shall remain in full force and effect and shall not
be affected by the illegal, invalid or unenforceable provision or by its
severance.

14.     LEGAL FEES AND EXPENSES. In the event that either of the parties to this
Agreement contests the validity or enforceability of any of the provisions of
Sections 10 or 18, then such contesting party hereby agrees to pay in a timely
and prompt manner any and all legal fees and expenses incurred by the other
party from time to time as a result of such contesting party's contesting of the
validity or enforceability of any provision of Sections 10 or 18 hereof this
Agreement; PROVIDED, HOWEVER, nothing contained in this Section 14 shall
obligate Corporation to pay any legal fees or expenses incurred by the Employee
in connection with any litigation by Corporation against the Employee to enforce
the terms of this Agreement against the Employee.

15.     ASSIGNMENT. The rights and benefits of the Corporation under this
Agreement shall inure to the benefit of and be binding upon the successors and
assigns of the Corporation. This Agreement is a personal employment contract and
the rights and interests of the Employee hereunder may not be sold, transferred,
assigned, pledged, or hypothecated, directly or indirectly, or by operation of
law or otherwise.

                              EMPLOYMENT AGREEMENT
                                     PAGE 8
<PAGE>

16.     ENTIRE AGREEMENT. This Agreement sets forth the entire agreement and
understanding between the parties relating to the subject matter hereof and
supercedes and merges all prior discussions between the parties. No modification
of or amendment to this Agreement, nor any waiver of any rights under this
Agreement, will be effective unless in writing signed by the party to be
charged. Any subsequent change or changes in my duties, salary or compensation
will not affect the validity or scope of this Agreement. As used in this
Agreement, the term of employment includes any time during which I may be
retained by Corporation as a consultant.

17.     GOVERNING LAW. This Agreement shall be governed by and construed in
accordance with the laws of the State of Texas and Employee irrevocably agrees
to subject himself to the exclusive personal jurisdiction and venue of any court
in the Southern District of Texas.

18.     NON-DISPARAGEMENT: During Employee's employment with Corporation and,
should Employee's employment terminate for any reason (whether voluntary or
involuntary), for a period of 24 months following Employee's separation,
Employee agrees that Employee will not make any comment or take any action which
disparages, defames, or places in a negative light Corporation or its past and
present officers, directors, and employees. Corporation agrees that during this
same period, its officers and directors shall refrain from making any comment or
taking any action to disparage, defame, or place Employee in a negative public
light.

19.     WAIVER. No waiver by Corporation of any breach of this Agreement shall
be a waiver of any preceding or succeeding breach. No waiver by Corporation of
any right under this Agreement shall be construed as a waiver of any other
right. Corporation shall not be required to give notice to enforce strict
adherence to all terms of this Agreement

20.     SURVIVAL. The provisions of this Agreement shall survive the termination
hereof employment and the assignment of this Agreement by Corporation to any
successor in interest or other assignee.

21.     HEADINGS. The headings to each section or Section of this Agreement are
provided for convenience of reference only and shall have no legal effect in the
interpretation of the terms hereof.

22.     NOTICES. Any notices or other communications required or permitted
hereunder shall be sufficiently given if sent by registered mail, postage
prepaid, and

         A.       if to the Employee, addressed to him at:
                  Edy Francis

         B.       if to Corporation, addressed to it at:

                  Isramco, Inc.
                  11767 Katy Freeway
                  Houston, Texas 77079.

or such other address as the party to whom or to which such notice or other
communication is to

                              EMPLOYMENT AGREEMENT
                                     PAGE 9
<PAGE>

be given shall have specified in writing to the other party, and any such notice
or communication shall be deemed to have been given as of the date so mailed.

23.     ARBITRATION. Corporation and Employee agrees to submit to final and
binding arbitration any and all disputes, claims (whether in tort, contract,
statutory, or otherwise) and/or disagreements concerning the interpretation or
application of this Agreement and/or Employee's employment by Corporation and/or
the termination of this Agreement and/or Employee's employment by Corporation;
provided, however, notwithstanding the foregoing, in no event shall any dispute,
claim or disagreement arising under Section 10 of this Agreement be submitted to
arbitration pursuant to this Section 23 or otherwise. Any such dispute, claim
and/or disagreement subject to arbitration pursuant to the terms of this Section
23 shall be resolved by arbitration in accordance with the Employment Dispute
Resolution Rules then in effect with the American Arbitration Association (the
"AAA"). Arbitration under this provision must be initiated within 30 days of the
action, inaction, or occurrence about which the party initiating the arbitration
is complaining. Within ten days of the initiation of an arbitration hereunder,
each party with designate an arbitrator pursuant to Rule 14 of the AAA Rules.
The appointed arbitrators will appoint a neutral arbitrator from the panel in
the manner prescribed in Rule 13 of the AAA Rules. Employee and Corporation
agree that the decision of the arbitrators selected hereunder will be final and
binding on both parties. The parties hereto agree that any decision rendered by
the arbitration panel may be entered as a judgment of the Harris County, Texas
Courts or the United States District Court for the Southern District of Texas,
Houston Division of Texas.

24.     COUNTERPARTS. This Agreement may be executed in two or more
counterparts, each of which shall be deemed an original, but all of which shall
constitute one and the same agreement.

        IN WITNESS WHEREOF, Corporation has caused this Agreement to be executed
by a duly authorized officer thereof, and the Employee has executed this
Agreement effective as of the Effective Date.

            CORPORATION:              ISRAMCO, INC.

                                      By: ________________________________
                                          Haim Tsuff, Chief Executive Officer

        I UNDERSTAND THAT THIS AGREEMENT RESTRICTS MY RIGHT TO DISCLOSE OR USE
CORPORATION'S CONFIDENTIAL INFORMATION DURING AND SUBSEQUENT TO MY EMPLOYMENT. I
HAVE READ THIS EMPLOYMENT AGREEMENT CAREFULLY AND UNDERSTAND ITS TERMS.

         Dated:  August ___, 2007.

                                    EMPLOYEE: __________________________________
                                              EDY FRANCIS

                              EMPLOYMENT AGREEMENT
                                    PAGE 10

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