Promissory Note dated as of May
25, 2008, issued to and J.O.E.L JERUSALEM OIL
EXPLORATION, LTD. in the principal amount of
$48,900,000
PROMISSORY
NOTE
US
$48,900,000 Houston,
Texas May
25, 2008
FOR VALUE RECEIVED , ISRAMCO, INC. , a Delaware corporation
with offices at 4801 Woodway Drive, Suite 100E, Houston,
Texas 77056 (herein called the “Maker”),
promises to pay to the order of J.O.E.L. JERUSALEM
OIL EXPLORATIONS, LTD. (herein called the “Payee”)
at its main office at 8 Granit St., P. O. B. 10188, Petach –
Tikva, 49002, Israel, or such other place as Payee may designate in
writing from time to time, in lawful money of the United States of
America, the sum of FORTY EIGHT MILLION NINE HUNDRED THOUSAND
AND NO/100 DOLLARS (US $48,900,000.00) , payable as
follows:
(a)
Principal and Interest . Principal and interest
shall be due and payable in four equal annual installments,
commencing on June 30, 2012.
(b)
Interest . Interest shall accrue at the Stated
Rate.
If any payment
shall be due on a day that is not a business day, such payment
shall be due and payable on the next business day and interest
shall accrue to such day.
This Note shall be due and payable on or before
June 30, 2015 , being the final maturity date of this Note
(the “Maturity Date”) when the entire unpaid principal
balance and all unpaid accrued interest owing, together with all
other fees and charges, if any, will be due and payable in
full.
"Stated Rate" means a rate per annum equal to LIBOR plus
6.00%; provided, however, that if the Stated Rate ever exceeds the
Maximum Rate, the Stated Rate shall then and thereafter be fixed at
a rate per annum equal to the Maximum Rate then and from time to
time thereafter in effect until the total amount of interest
accrued at the Stated Rate on the unpaid balance of this Note
equals the total amount of interest which would have accrued at the
Maximum Rate from time to time in effect.
7.5 “
LIBOR ” shall mean the rate per annum of the London
interbank offered rate for deposits in Dollars at approximately
11:00 a.m. (London time) two (2) Business Days prior to the first
day of the Interest Period for a term of 1 (one)
month or for a term comparable to the Interest Period,
at Lender discretion.
"Maximum Rate" means, on any day, the maximum nonusurious rate
of interest permitted for that day by whichever of applicable
federal or Texas laws permits the higher interest rate, stated as a
rate per annum. On each day, if any, that the Texas
Credit Title (V.T.C.A., Texas Finance Code §§ 301.001 et
seq.) establishes the Ceiling Rate, the Ceiling Rate shall be the
“weekly ceiling” (as defined in the Texas Credit Title)
for that day. Payee may from time to time, as to current
and future balances, implement any other ceiling under the Texas
Credit Title by notice to Maker, if and to the extent permitted by
the Texas Finance Code. Without notice to Maker or any
other person or entity, the Ceiling Rate shall automatically
fluctuate upward and downward as and in the amount by which such
maximum nonusurious rate of interest permitted by applicable law
fluctuates.
7.6 “Interest
Period” shall mean shall mean the period commencing on
the Effective Date and ending on the numerically corresponding day
in the every six (6) calendar months thereafter, except that each
Interest Period which commences on the last Business Day of a
calendar month (or on any day for which there is no numerically
corresponding day in the appropriate subsequent calendar month)
shall end on the last Business Day of the appropriate subsequent
calendar month.
Interest on this Note shall be computed for the
actual number of days elapsed and on the basis of a year consisting
of 365 days, unless the Maximum Rate would thereby be exceeded, in
which event, to the extent necessary to avoid exceeding the Maximum
Rate, interest shall be computed on the basis of the actual number
of days elapsed in the applicable calendar year in which
accrued.
The proceeds of this Note shall be used by the
Maker solely for the purpose of the acquisition of oil and gas
properties and working capital, and for no other
purpose.
The payment of this Note is
unsecured.
The Maker may at any time pay the full amount or
any part of this Note without the payment of any premium or
fee. All payments and prepayments hereon shall be
applied first to accrued interest and the balance to principal in
the inverse order of maturity.
All past due principal and interest on this Note
shall bear interest at the Maximum Rate, or only if applicable law
shall not provide a maximum nonusurio
