EXHIBIT 10.01
January 30, 1998
Xxxx Xxxxxxxxx
INTERCELL Corporation
000 00xx Xxxxxx, Xxxxx 0000
Xxxxxx, XX 00000
Dear Xx. Xxxxxxxxx:
The purpose of this Side Letter Agreement (the "Agreement") is to memorialize
our agreement with respect to the advance payment of Fifty Thousand Dollars
($50,000) by Jaymark, Inc. ("Jaymark") to INTERCELL Corporation ("INTERCELL") in
connection with Jaymark's purchase from INTERCELL of one hundred percent (100%)
of the issued and outstanding capital stock of California Tube Laboratory, Inc.
("CTL"), a wholly-owned subsidiary of INTERCELL, the terms and conditions of
which are more fully described in that certain Stock Purchase Agreement dated as
of February 6, 1998 by and among Jaymark, INTERCELL and CTL (the "Stock Purchase
Agreement"). The $50,000 advance payment by Jaymark is to be applied toward and
considered part of the Purchase Price (as defined in the Stock Purchase
Agreement).
In the event that the acquisition of CTL by Jaymark is, for any reason, not
consummated on or prior to February 6, 1998 then INTERCELL shall repay to
Jaymark the $50,000 advance payment. Such repayment, if necessary, shall be by
wire transfer payable in same-day funds and shall take place on February 9,
1998. The advance will be secured by the Accounts Receivable and Inventory of
CTL as evidenced by the Security Agreement attached as Attachment 1.
If you agree with these conditions and procedures, please execute this letter in
the spaces provided below. This Agreement may be executed in any number of
counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument.
Sincerely,
/s/ Xxxxx Xxxxxxx
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Xxxxx Xxxxxxx
Treasurer & Chief Financial Officer
AGREED TO AND ACCEPTED:
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INTERCELL CORPORATION JAYMARK, INC.
By /s/ Xxxx Xxxxxxxxx By /s/ Xxxx Xxxxxx
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Xxxx Xxxxxxxxx, President and Xxxx Xxxxxx, President and
Chief Executive Officer Chief Executive Officer
Attachment (Security Agreement)
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ATTACHMENT 1
SECURITY AGREEMENT
This Security Agreement ("Agreement") is made as of January 30, 1998, by
and between JAYMARK, INC., a Delaware corporation, ("Creditor") and INTERCELL
CORPORATION, a Colorado corporation, ("Debtor").
1. CREATION OF SECURITY INTEREST. To secure the payment and performance
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by Debtor of the Obligations, as hereinafter defined, Debtor hereby grants to
Creditor a security interest in and to all Collateral, as hereinafter defined.
2. OBLIGATIONS SECURED. The security interest herein granted by Debtor to
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Creditor secures the re-payment by Debtor to Creditor of the payment made by
Creditor to Debtor of $50,000, as an advance payment in connection with
Jaymark's purchase from Debtor of one hundred percent (100%) of the issued and
outstanding capital stock of California Tube Laboratory, Inc. ("CTL"), a wholly
owned subsidiary of Debtor, the terms and conditions of which are more fully
described in that certain Stock Purchase Agreement dated as of February 6, 1998
by and among Creditor, Debtor, and CTL (the "Stock Purchase Agreement"). This
advance payment is made in accordance with the terms of the Side Letter
Agreement dated January 30, 1998 ("Side Letter Agreement").
3. COLLATERAL. The term "Collateral" collectively means all of CTL's
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Accounts Receivable and Inventory, including, but not limited to: raw materials,
brazing alloys, work-in-process, and finished goods, together with any and all
proceeds, substitutions, additions, assertions, replacements, increases and
products of the foregoing including all cash and non-cash proceeds.
4. BUSINESS PURPOSE. Debtor represents and warrants that the Collateral
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is not used for personal, family or household purposes. The Collateral may not
be used for any of such purposes.
5. PROTECTION OF SECURITY INTEREST. Creditor may, at Debtor's sole cost,
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file a copy of this Agreement in any public office deemed necessary by Creditor
to perfect or continue Creditor's security interest in the Collateral.
6. CUSTODY AND PRESERVATION OF THE COLLATERAL. Creditor will be deemed to
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have exercised reasonable care in the custody and preservation of any Collateral
in its possession (even if Creditor fails to sell or convert Collateral which is
falling in market value). The failure of Creditor to preserve or protect any
rights with respect to any of the Collateral against other parties may not be
deemed a failure to exercise reasonable care in the custody of preservation of
such Collateral.
7. NO RELEASE OR IMPAIRMENT OF COLLATERAL. Creditor's security interest
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hereunder shall continue unimpaired notwithstanding that Creditor take or
release other security, release any person primarily or secondarily liable for
any of the Obligations, grants or allows extensions, renewals, modifications,
rearrangements, restructures, replacements or refinancings thereof, whether or
not the same involve modifications to interest rates or other payment terms
thereof, or indulgences with respect to the Obligations.
8. DEALING WITH COLLATERAL. Creditor may, in its discretion: (i)
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exchange, waive or release any of the Collateral; (ii) apply Collateral and
direct the order or manner of sale thereof as Creditor may determine; and (iii)
settle, compromise, collect or otherwise liquidate any Collateral in any manner,
in each case without affecting the Obligations or Creditor's right to take any
other action with respect to any other Collateral.
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9. CREDITOR'S RIGHTS TO PROTECT COLLATERAL. For the purpose of carrying
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out the terms of this Agreement, Debtor hereby irrevocably constitutes and
appoints Creditor and any officer or agent thereof, with full power of
substitution, as its true and lawful attorney-in-fact, with full irrevocable
power and authority in Debtor's place, stead and name, or in its own name, from
time to time in Creditor's discretion, and at any time before or after default
and without notice to Debtor, to make any payment and do any other act which
Debtor is obligated to do under this Agreement, to exercise such rights as
Debtor might exercise, to enter Debtor's premises to give notice of Creditor's
security interest, to execute and file in Debtor's name any financing
statements, other filings and amendments thereto, or applications for
registration or like documents, required to perfect Debtor's security interest
in any Collateral, and to take any other reasonable action, all to protect and
preserve the Collateral and Creditor's rights therein. No action or inaction by
Creditor or any of the terms of this Agreement shall, however, relieve Debtor of
the obligation to do any of the foregoing acts or impose on Creditor any such
obligation. Debtor will immediately pay all Creditor's costs, including
reasonable attorneys' fees, and indemnify Creditor against all claims, demands
and liabilities incurred in exercising any of the foregoing rights or by reason
of Creditor being made a party to or intervening in any action or proceeding
affecting any Collateral or Creditor's rights, with interest on each item of
cost and liability from the date paid by Creditor at the annual rate of ten
percent (10%). This power of attorney is a power coupled with an interest and
shall be irrevocable.
10. PROHIBITED TRANSFERS. Debtor will not sell, lease, contract to sell
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or lease, transfer or create any encumbrance, purchase money or other security
interest in any Collateral until all Obligations have been paid, even though
Creditor has a security interest in proceeds of such Collateral and regardless
of whether any sale, lease, encumbrance or transfer is to an organization or
person controlled by Debtor or its then principals. Debtor will not without
Creditor's prior written consent change the legal form of its organization or
its business structure in any way which Creditor in good faith decides might
adversely affect the prospect of repayment of any of the Obligations, impair the
continuing validity or perfection of its security interest as to any Collateral
(including later-acquired property), or make a filed financing statement
misleading, and Debtor will not without Creditor's prior written consent merge
with or into any other organization or be subject to a change of control by
reason of a transfer of shares, voting power or other means. Any of the
foregoing notwithstanding, Debtor may sell any of the Collateral in the ordinary
course of business.
11. EVENTS OF DEFAULT. The occurrence of any of the following shall
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constitute an "Event of Default" under this Agreement:
11.1. Repayment of the $50,000 advance payment has not been made in
full when due; or
11.2. Any representation or warranty made by Debtor in this Agreement
or in the Side Letter Agreement is discovered to have been false in any material
respect at the time made.
12. CREDITOR'S RIGHTS ON DEFAULT. Upon the occurrence of an Event of
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Default, Creditor may take any of the actions set forth herein or otherwise
available by law. Debtor will voluntarily surrender possession of the
Collateral to Creditor and Debtor will cooperate in an orderly transfer of
ownership of the Collateral to Creditor. Creditor may take possession of any
Collateral and enter any premises where any Collateral is kept, with or without
judicial process, may xxx Debtor for the full amount of any or all of the
Obligations without proceeding against any or all of the Collateral or xxx
Debtor for any deficiency remaining after disposition of any or all of the
Collateral, may without notice or demand setoff and apply toward payment of any
of the Obligations, and may sell or lease in any commercially reasonable manner
in one or more transactions any or all of the Collateral in its then condition
or following any commercially reasonable preparation or processing. Whenever
any Collateral is in Creditor's possession, Creditor may
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use, operate or consume it in any commercially reasonable manner or as it deems
appropriate for paying or performing Debtor's Obligations, and Creditor may also
at its option abandon any Collateral. Creditor shall have no liability to Debtor
for any damage to real or personal property which is not Collateral caused by
acts or omissions of Creditor or its agents done in good faith in the course of
removing of disposing of Collateral, or for any other such damage to Collateral
except as a result of Creditor's failure to sell or lease Collateral in a
commercially reasonable manner. Debtor will indemnify and hold Creditor harmless
from any claims, demands and liability, including reasonable attorneys' fees,
arising from claims of third persons resulting from such acts or omissions.
Debtor will also immediately pay Creditor its reasonable expenses of retaking,
holding, preparing for sale or lease, selling, or leasing any Collateral and the
like and its reasonable attorneys' fees and legal expenses relating to such
action. All rights and remedies hereunder shall be cumulative and Creditor shall
have the right to enforce one or more remedies hereunder successively or
concurrently, and any such action shall not stop or prevent Creditor from
pursuing any further remedy which it may pursue hereunder or by law. If a
sufficient sum is not realized from any such disposition of the Collateral to
pay all Obligations secured by this Agreement, Debtor hereby promises to pay
Creditor any deficiency.
13. COSTS AND EXPENSES. Debtor shall reimburse Creditor upon demand for
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any and all legal costs, including reasonable attorneys' fees, and other
expenses incurred in collecting any sums payable by Debtor to Creditor or any
other Obligation secured hereby or in enforcing any term or provision of this
Agreement, the repayment of all of the foregoing expenses to be secured by this
Agreement.
14. NOTICES AND APPLICATION OF PROCEEDS. Any notice required to be given
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by Creditor under this Agreement, when deposited in the United States mail
addressed to Debtor at its address below (or at such other address as shall have
previously been provided to Creditor in writing) at least five (5) days prior to
any actions Creditor proposes to take shall constitute reasonable notice to
Debtor of any such action.
15. WAIVERS AND AMENDMENTS. Any provision of this Agreement may be
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amended, waived or modified upon the mutual written consent of Debtor and
Creditor.
16. MISCELLANEOUS. Time is of the essence of this Agreement and all its
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provisions. This Agreement contains the entire agreement between Creditor and
Debtor with respect to all Collateral. This Agreement shall be governed by the
law of the State of California. Titles preceding any paragraph of this
Agreement are for convenience only and are not a part of this Agreement. No
waiver by Creditor of any breach or default shall be deemed a waiver of any
breach or default thereafter occurring. The taking of any action by Creditor
shall not be deemed a waiver of any breach or default thereafter occurring and
the taking of any action by Creditor shall not be deemed to be an election of
that action, by rather the rights and privileges and options granted to Creditor
under the terms hereof shall be deemed cumulative, the one with the other and
not the alternative. This Agreement benefits Creditor's successors and assigns
and binds Debtor's heirs, legatees, personal representatives, successors and
assigns. Any provision of this Agreement which is prohibited or unenforceable
in any jurisdiction shall, as to such jurisdiction, be ineffective to the extent
of such prohibition or unenforceability without invalidating the remaining
provisions hereof, and any such prohibition or unenforceability in any
jurisdiction shall not invalidate or render unenforceable such provision in any
other jurisdiction. Nothing herein shall in any way limit the effect of the
terms and conditions of any other security or other agreement executed by Debtor
or any other party with respect to the Obligations, but each and every condition
hereof shall be in addition thereto.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of
the date first set forth above.
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DEBTOR: CREDITOR:
INTERCELL CORPORATION JAYMARK, INC
a Colorado corporation a Delaware corporation
By /s/ Xxxx Xxxxxxxxx By /s/ Xxxx Xxxxxx
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Title: Title: CEO
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Date: Date: January 30, 1998
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