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SECURITIES AND EXCHANGE COMMISSION
Washington, D. C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
For the month of April, 1996
ISRAMCO, INC.
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(Exact name of registrant as specified in charter)
Delaware
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(State of Incorporation)
800 Fifth Avenue, New York, New York 10021 Suite 21-D
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(Address of principal executive offices)
212-888-0200
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(Telephone number)
0-12500 13-3145265
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Commission File No. IRS Employer ID No.
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Item 5. Other Material Events
On April 17, 1996, Dr. Joseph Elmaleh resigned as the Chairman
of the Board, Chief Executive Officer and as a Director of Isramco, Inc. (the
"Company") pursuant to a Termination Agreement entered into between the Company
and Dr. Joseph Elmaleh (the "Termination Agreement").
In August of 1995, Dr. Joseph Elmaleh and Southern Shipping and Energy
Inc. ("SSE"), a company which Dr. Elmaleh controls, sold all of their shares in
J.O.E.L. - Jerusalem Oil Exploration Ltd. ("JOEL") (16.825% of the equity and
vote in JOEL) to Pass-port Ltd. JOEL owns and controls 36.1% of the
outstanding shares of the common stock of the Company (not including the 2.5
million Class A Warrants and 2.5 million Class B Warrants which are owned by
JOEL). JOEL had requested that Dr. Joseph Elmaleh tender his resignation as
Chairman of the Board, Chief Executive Officer and a Director of the Company
and thereafter, the Board of Directors appointed a Special Committee to
initiate termination discussions with Dr. Joseph Elmaleh.
Pursuant to the terms of the Termination Agreement:
1. The Company terminated the July 1995 Consulting Agreement with
Dr. Joseph Elmaleh and paid to Dr. Elmaleh the sum of $123,750 representing the
balance of the unpaid consulting fees otherwise due to Dr. Elmaleh through the
remaining term of the Consulting Agreement.
2. Dr. Joseph Elmaleh covenanted that for a term of three (3)
years not to directly or indirectly either on behalf of himself or on behalf of
any business venture, as an employee, agent, broker, consultant, partner,
principal, stockholder, officer or otherwise compete with the
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Company in connection with the exploration for oil and gas in the State of
Israel or in the territorial waters offshore Israel or in territories currently
under the control of the State of Israel. The Company paid to Dr. Joseph
Elmaleh the sum of $270,000 in consideration of his covenant not to compete as
set forth in the Termination Agreement.
3. The Company purchased from SSE 292,675 shares of the common
stock of the Company held by SSE for a purchase price of $208,238.21.
The terms and conditions of the Termination Agreement are fully set
forth in Exhibit A attached hereto.
At the present time, the Company has not filled the office of Chairman
of the Board and Chief Executive Officer, or the office of director, vacated by
Dr. Joseph Elmaleh.
Item 7. Exhibits
Exhibit A - Termination Agreement
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934,
the registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
Isramco, Inc.
(registrant)
April 17, 1996 By: /s/ Danny Toledano
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(date) Danny Toledano
President
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EXHIBIT INDEX
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Exhibit A -- Termination Agreement
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TERMINATION AGREEMENT
AGREEMENT made as of the 16th day of April, 1996 by and between Isramco,
Inc., a Delaware corporation with offices at 800 Fifth Avenue, Suite 21-D, New
York, New York 10021 (the "Company") and Dr. Joseph Elmaleh, with offices at
One Royal Avenue, London SW3 4QD, England.
WHEREAS, the largest shareholder of the Company, Jerusalem Oil Exploration
Ltd. ("JOEL") has inquired as to whether Dr. Joseph Elmaleh would render his
resignation as Chairman of the Board of Directors, Chief Executive Officer and
a director of the Company; and
WHEREAS, the Company in July 1995 entered into a Consulting Agreement with
Dr. Joseph Elmaleh (the "Consulting Agreement") which provides for the payment
of an annual consulting fee of Ninety-Nine Thousand ($99,000) Dollars per
annum, payable in installments of Eight Thousand Two Hundred Fifty ($8,250)
Dollars per month and further provides that upon severance of Dr. Elmaleh's
consulting relationship by the Company, Dr. Elmaleh shall be entitled to
receive a severance payment of one lump sum equal to the balance of the unpaid
consulting fee through the remaining term of the Consulting Agreement; and
WHEREAS, the Consulting Agreement pursuant to its terms expires on July 31,
1997; and
WHEREAS, upon the termination of Dr. Joseph Elmaleh as an officer and
director of the Company, the Company is desirous of Dr. Elmaleh covenanting
that he will not compete in Israel with the Company for the exploration of oil
and gas.
NOW, THEREFORE, in consideration of the mutual covenants and promises
herein contained, the parties hereto agree as follows:
1. The Company hereby terminates the Consulting Agreement with Dr.
Joseph Elmaleh in consideration for immediately paying to Dr. Joseph Elmaleh or
his designee the sum of One Hundred Twenty-Three Thousand Seven Hundred Fifty
($123,750) Dollars representing a lump sum payment equal to the balance of the
unpaid consulting fee due to Dr. Elmaleh through the remaining term of the
Consulting Agreement.
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2. (a) Dr. Joseph Elmaleh hereby covenants and agrees that for a
term of three (3) years from the date hereof, Dr. Elmaleh will not directly or
indirectly either on behalf of himself or on behalf of any business venture, as
an employee, agent, broker, consultant, partner, principal, stockholder,
officer or otherwise compete with the Company in connection with the
exploration for oil and gas in the State of Israel or territorial waters
offshore Israel or territories currently under the control of the State of
Israel. This restrictive covenant is specifically limited as provided for
herein and shall not be applicable in any other regard.
(b) Dr. Joseph Elmaleh shall not directly or indirectly
acquire or assist any third party in acquiring any securities of the Company or
securities of the Negev 2 Limited Partnership.
(c) Dr. Joseph Elmaleh will not stand for election as an
officer of director of the Company or directly or indirectly solicit the vote
of any shareholder of the Company in connection with Company business.
(d) In the event of a breach by Dr. Elmaleh of the above
covenants, the Company shall be entitled to pursue any available remedy at law
or equity and in the event that any such remedy is inadequate, the Company
shall be entitled, in addition to any of its available legal remedies to an
injunction restraining such breach.
(e) In consideration for the covenant set forth in Paragraph
2(a) hereof, the Company shall immediately to pay to Dr. Joseph Elmaleh or his
designee the sum of Two Hundred Seventy Thousand ($270,000) Dollars.
3. For good and valuable consideration the Company at the request of
Dr. Joseph Elmaleh hereby agrees to purchase from Southern Shipping and Energy
Inc. and Southern Shipping and Energy Inc. agrees to sell 292,675 shares of the
common stock of the Company for a purchase price of Two Hundred Eight Thousand
Two Hundred Thirty-Eight Dollars and 21/100 ($208,238.21).
4. (a) In consideration for Dr. Elmaleh entering into this
Agreement, the Company hereby releases and discharges Dr. Joseph Elmaleh, his
heirs, executors, administrators, successors and assigns from all actions,
causes of actions, suits, debts, dues, sums of money, accounts, covenants,
contracts, controversies, agreements, promises, damages, claims and demands
whatsoever, in law or equity, which against Dr. Elmaleh, the Company ever had,
now has or hereinafter can, shall or may have for, upon or by reason of any
matter, cause or thing whatsoever from the beginning of the world to the day of
the date of this release, specifically excluding the rights and obligations of
the parties under this Termination Agreement.
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(b) In consideration for the Company entering into this
Agreement, Dr. Joseph Elmaleh hereby releases and discharges the Company, its
successors and assigns from all actions, causes of actions, suits, debts, dues,
sums of money, accounts, covenants, contracts, controversies, agreements,
promises, damages, claims and demands whatsoever, in law or equity, which
against the Company, Dr. Elmaleh ever had, now has or hereinafter can, shall or
may have for, upon or by reason of any matter, cause or thing whatsoever from
the beginning of the world to the day of the date of this release, specifically
excluding the rights and obligations of the parties under this Termination
Agreement, the rights of the parties under the Indemnity Agreement referred to
in Paragraph 6 hereunder and the rights provided to the officers and directors
under the Company's Certificate of Incorporation, By-laws or by statute.
5. Dr. Joseph Elmaleh's resignation as Chairman of the Board, Chief
Executive Officer and as a director of the Company shall be effective upon the
receipt by Dr. Joseph Elmaleh or his designee of the aggregate sum of (a) One
Hundred Twenty-Three Thousand Seven Hundred Fifty ($123,750) Dollars as set
forth in Paragraph 1; (b) Two Hundred Seventy Thousand ($270,000) Dollars as
set forth in Paragraph 2(e); and, (c) the sum of Two Hundred Eight Thousand Two
Hundred Thirty-Eight Dollars and 21/100 ($208,238.21) as set forth in Paragraph
3. These funds shall be delivered by wire transfer pursuant to the written
instructions of Dr. Joseph Elmaleh.
6. The Company covenants and agrees that the Indemnity Agreement
entered into the 8th day of October, 1992 between and among the Company,
Isramco Oil and Gas Ltd. and Dr. Joseph Elmaleh shall continue to remain in
full force and effect.
7. The Company by executing this Agreement hereby represents and
warrants to Dr. Joseph Elmaleh that this Agreement has been duly authorized,
executed and delivered by the Company and is a legal, valid and binding
agreement of the Company enforceable against the Company in accordance with its
terms, except as to the extent that enforcement may be limited by bankruptcy,
insolvency, reorganization, moratorium and other laws or court decisions now or
hereinafter in effect relating to or affecting creditors' rights and remedies
generally and to the general principles of equity.
8. Dr. Joseph Elmaleh by executing this Agreement represents that
this Agreement has been duly executed and delivered by him to the Company and
is a legal, valid and binding agreement, enforceable against him in accordance
with its terms except as to the extent that enforcement may be limited by
bankruptcy, insolvency, reorganization, moratorium and other laws or court
decisions now or hereinafter in effect relating to or affecting creditors'
rights and remedies generally and to the general principles of equity.
9. The Company agrees to use its best efforts to maintain on behalf
of the Company, its officers and directors its current or similar Officers and
Directors Indemnity Insurance coverage for a period of five (5) years from the
date hereof.
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10. The public announcement relating to this Agreement and the
transactions contemplated hereby shall be made jointly by the parties hereto.
11. Any notices under or relating to this Agreement shall be given in
writing and shall be deemed sufficiently given and served for all purposes when
delivered by hand; or three (3) days after a writing is consigned to a
commercial carrier; and ten (10) days after a writing is deposited in the mail,
by certified mail with postage and other charges prepaid addressed as follows:
To: Isramco, Inc.
800 Fifth Avenue
Suite 21-D
New York, New York 10021
With copies to: Wynn E. Stern, Jr., Esq.
342 Madison Avenue
Suite 1002
New York, New York 10173
and
With copies to: Law Offices of David Malkin, P.C.
460 Park Avenue
21st Floor
New York, New York 10022
To: Dr. Joseph Elmaleh
One Royal Avenue
London SW3 4QD
England
or to such other address as provided in writing to the other party.
12. (a) This Agreement shall be governed by, construed, interpreted and
enforced in accordance with the laws of the State of New York without regard to
its conflicts of law or rules and the parties hereby agree to submit their
person to the jurisdiction of the federal and state courts located in the
County and State of New York.
(b) This Agreement may be executed in any number of counterparts, each
of which shall be deemed an original, but all of which shall constitute one
agreement.
(c) This Agreement supersedes any and all prior agreements or
understandings, written or oral between the parties relating to the termination
and resignation of Dr. Joseph Elmaleh as an officer and director of the Company
and incorporates the entire understanding of the parties with respect thereto.
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(d) This Agreement may amended, modified or supplemented only
by a written instrument signed by all of the parties and no wavier of any
provision shall be effective unless in writing and signed by the party to be
charged.
(e) Dr. Joseph Elmaleh shall execute documents, if requested
by a bank or brokerage firm servicing the Company to remove his name as an
authorized signatory.
IN WITNESS WHEREOF, the parties hereto have executed or caused to be executed
this Agreement as of the day and year first above written.
Isramco, Inc.
By: s/Danny Toledano
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s/Joseph Elmaleh
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Dr. Joseph Elmaleh
ONLY AS TO PARAGRAPH 3
Southern Shipping and Energy Inc.
By: s/Joseph Elmaleh
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