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FORM 8-K
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
Date of Report (Date of earliest event reported) April 21, 1999
INTELLICELL CORP.
(Exact name of registrant as specified in its charter)
Delaware
(State or other jurisdiction of incorporation)
001-12571 95-4467726
(Commission File Number) (I.R.S. Employer Identification No.)
9314 Eton Avenue
Chatsworth, California 91311
(Address of principal executive offices) (Zip Code)
(818) 709-2300
Registrant's telephone number, including area code
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Item 5. OTHER EVENTS
On April 21, 1999, Intellicell Corp. (the "Company") and Ben Neman entered
into an agreement pursuant to which Mr. Neman resigned as the Company's Chairman
of the Board and President as of April 21, 1999, and the parties terminated Mr.
Neman's existing employment agreement with the Company. The Company paid Mr.
Neman $250,000 upon signing of the termination agreement and will pay him 24
monthly payments of $14,583.33 each, with the first payment commencing on May 1,
1999. These monthly payments will be accelerated in the event the Company fails
to comply with any of the provisions of the agreement or if the parties are
unable to complete a private sale by Mr. Neman of 200,000 of his shares of the
Company's common stock by approximately May 11, 1999. The termination agreement
also provides for certain limitations on Mr. Neman's public sales of the balance
of his shares of the Company's common stock.
Item 7. FINANCIAL STATEMENTS AND EXHIBITS
(c) Exhibits
10.1 Agreement dated April 21, 1999 between Ben Neman and the Company.
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Company has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
INTELLICELL CORP.
Date: April 28, 1999 By: /s/ DAVID KANE
-------------------------------------
David Kane, Chief Financial Officer
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INDEX TO EXHIBITS
<TABLE>
<CAPTION>
EXHIBIT
NUMBER DESCRIPTION
- -------- -----------
<S> <C>
10.1 Agreement dated April 21, 1999 between Ben Neman and the Company.
</TABLE>
<PAGE>
Exhibit 10.1
AGREEMENT
This Agreement is entered into as of the 21st day of April 1999 by and
between Ben Neman ("Neman") and Intellicell Corp., a Delaware corporation
("Intellicell") with reference to the following facts:
A. Neman served as the Chairman of the Board, President and Chief
Executive Officer of Intellicell from the inception of Intellicell through
November 9, 1998 and has served as Intellicell's Chairman of the Board and
President since that time pursuant to an Employment Agreement dated November
9, 1998 by and between Neman and Intellicell (the "Employment Agreement").
B. In connection with the Employment Agreement, Neman agreed to
certain restrictions on the sale of all of his shares of Intellicell common
stock (the "Neman Shares") and entered into a lock-up agreement, dated
November 10, 1998 (the "Lock-Up Agreement") with respect to the Neman Shares.
C. Neman wishes to resign as Intellicell's Chairman of the Board and
President, and Neman and Intellicell wish to provide for the immediate sale
by Neman of certain of the Neman Shares and for certain restrictions on
transfer of the remaining Neman Shares.
NOW, THEREFORE, in consideration of the mutual covenants and agreements
contained herein, Neman and Intellicell hereby agree as follows:
1. RESIGNATION. Neman will resign as Intellicell's Chairman of the
Board and President and as a member of Intellicell's Board of Directors,
effective immediately, and upon such resignation shall cease to be an officer
and director of Intellicell.
2. TERMINATION OF PRIOR AGREEMENTS. The Employment Agreement and
Lock-Up Agreement and any other prior agreements between Neman and
Intellicell with respect to any matter (other than any Stock Option
Agreements) shall be canceled effectively immediately, and neither Neman nor
Intellicell shall have any further rights or obligations (including any right
to salary, bonus or severance payments) under any of the canceled agreements.
3. PAYMENTS TO NEMAN. Intellicell shall make the following payments
to Neman in consideration of the various covenants and agreements of Neman
contained in this Agreement:
(a) $250,000 upon the parties signing this Agreement.
(b) 24 monthly payments of $14,583.33 each, with the first payment
commencing on May 1, 1999, and with payments thereafter on the first day of
each month.
(c) Notwithstanding anything to the contrary contained herein,
Intellicell shall immediately pay to Neman all amounts due and unpaid under
(a) and (b) of this paragraph 3 upon the earlier to occur of the following
(i) in the event that Intellicell fails to comply with any of the provisions
of this Agreement and fails to cure such breach within the cure period
provided in paragraph 9(o) hereof, or (ii) if Intellicell merges,
consolidates or is otherwise combined with another entity and is not the
surviving entity.
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4. SALE OF NEMAN SHARES. Intellicell agrees that within 15 days
following the execution of this Agreement (plus the additional five-day cure
period provided by paragraph 9(o) hereof), one or more investors shall
purchase from Neman a total of 200,000 of the Neman Shares at a price of
$2.50 per share (the "Private Placement"). In the event the sale of the
foregoing 200,000 Neman Shares has not been consummated within the foregoing
20-day period following the execution of this Agreement, (a) the 24 monthly
payments of $14,583.33 each to be made pursuant to paragraph 3(b) hereof
shall instead be made as 12 monthly payments of $29,166.66 each, with the
first payment commencing on May 1, 1999 (to the extent the foregoing 20-day
period elapses after May 1, 1999, the $14,583.33 payment made on that date
would, accordingly, then be supplemented with an additional payment of
$14,583.33) and (b) Intellicell shall file within 30 days following the
expiration of such deadline a registration statement under the Securities Act
of 1933 (the "Securities Act") to register all of the Neman Shares, and the
restrictions upon transfer of the Neman Shares set forth in paragraph 5
hereof shall no longer be applicable. In the event the restrictions on
transfer of the Neman Shares set forth in paragraph 5 hereof cease to be
applicable pursuant to the foregoing sentence, Intellicell shall advise its
transfer agent to accept the opinion of Troop Steuber Pasich Reddick & Tobey,
LLP (or other counsel of Neman reasonable acceptable to Intellicell) if
delivered to the transfer agent more than 90 days after the date of execution
of this Agreement to the effect that Neman is no longer an affiliate of
Intellicell for purposes of Rule 144 and Neman agrees that Intellicell shall
be entitled to rely on such opinion.
5. RESTRICTIONS ON TRANSFERS OF NEMAN SHARES. During the one-year
period following the execution of this Agreement, Neman shall not sell,
transfer, pledge or assign any of the Neman Shares, except as follows:
(a) Neman may sell up to 200,000 Neman Shares pursuant to the
Private Placement.
(b) In addition to the Private Placement, Neman may, at any time
prior to a registration statement covering the resale of the Neman Shares
becoming effective, make privately negotiated sales of any of the Neman
Shares, provided that the purchasers of these shares (including Meir Abramov
should he exercise any of his outstanding options to acquire any of the Neman
shares) are bound by operation of law or agree to be bound by the volume
limitations of Rule 144 on their resales of these shares for the one-year
period following their acquisition of these shares, irrespective of whether
Neman was an affiliate of Intellicell at the time of their acquisition of
these shares.
(c) During the first six months following the execution of this
Agreement, Neman shall make no public sales of any of the Neman Shares
pursuant to Rule 144 or otherwise.
(d) During the six-month period commencing after six months
following the execution of this Agreement through one year from the execution
of this Agreement, Neman may publicly sell within each three-month segment of
that six-month period an amount equal to up to 1% of the total number of then
outstanding shares of Intellicell common stock.
(e) During the six-month period commencing after one year
following the execution of this Agreement, Neman may publicly sell within
each three-month segment of that six-month period an amount equal to up to
the greater of (i) 1% of the total number of then outstanding shares of
Intellicell common stock or
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(ii) the average weekly trading volume for the four calendar weeks preceding
the sale of the Neman Shares, as calculated pursuant to Rule 144.
(f) Notwithstanding anything to the contrary contained herein, all
restrictions set forth in (a) through (e) of this paragraph 5 shall terminate
upon the earlier to occur of the following (i) in the event that Intellicell
fails to comply with any of the provisions of this Agreement and fails to
cure such breach within the cure period provided in paragraph 8(o) hereof, or
(ii) if Intellicell merges, consolidates or is otherwise combined with
another entity and is not the surviving entity.
6. REGISTRATION OF NEMAN SHARES. At the option of Neman, Intellicell
agrees to include all of the Neman Shares in the first registration statement
that Intellicell files under the Securities Act covering the resale of any
Intellicell securities by any third party and agrees that such a registration
statement covering the Neman Shares will in no event be filed later than one
year following the execution of this Agreement; PROVIDED, HOWEVER, that
Intellicell shall file a registration statement to register all of the Neman
Shares under the Securities Act within 30 days following a breach of any of
the provisions of this Agreement by Intellicell that remains uncured within
the applicable five-day cure period if Mr. Neman demands such registration.
Any private sales by Neman of Neman Shares made following the effectiveness
of any registration statement shall be subject to the limitations set forth
in paragraph 5(b) hereof unless Intellicell has committed an uncured breach
of this Agreement or Intellicell merges, consolidates or is otherwise
combined with another entity and is not the surviving entity.
7. ADDITIONAL COVENANTS OF THE PARTIES.
(a) INSURANCE. Intellicell shall continue to pay Neman's medical
insurance premiums for the one-year period following the execution of this
Agreement.
(b) LEGAL FEES. Upon execution of this Agreement, Intellicell
shall pay Neman's counsel $5,000 for legal fees in connection with the
negotiation and preparation of this Agreement.
(c) PRESS RELEASE. Intellicell and Neman shall agree to the text
of a press release to be disseminated that describes Neman's resignation as
Intellicell's Chairman of the Board and President, which shall be
substantially in the form attached hereto as Exhibit A.
(d) PROHIBITION ON EMPLOYEE SOLICITATION. Assuming Intellicell is
not in breach of this Agreement beyond the applicable cure period, Neman
agrees that for a six-month period following the execution of this Agreement,
he will not solicit any employee of Intellicell to work for any other
organization or otherwise interfere with Intellicell's contractual or other
employment relationships with any of its employees.
(e) TAXES. Intellicell shall withhold from the payments it makes
to Neman pursuant to paragraph 3 hereof the minimum amounts that Intellicell
determines are required to be withheld to satisfy all applicable tax laws.
8. REPRESENTATIONS AND WARRANTIES.
(a) INDEPENDENT LEGAL ADVICE. Neman and Intellicell each
represents, warrants and agrees that he or it has received independent legal
<PAGE>
advice from his or its attorneys with respect to the advisability of
executing this Agreement.
(b) NO OTHER REPRESENTATION. Neman and Intellicell each
represents, warrants and agrees that, in executing this Agreement, he or it
has relied solely on the statements expressly set forth within this
Agreement. Neman and Intellicell each further represents, warrants and
agrees that, in executing this Agreement, he or it has placed no reliance
whatsoever on any statement, representation or promise of any other party, or
any other person or entity, that is not expressly set forth within this
Agreement, or upon the failure of any other party, or any other person or
entity, to make any statement, representation or disclosure of anything
whatsoever. Neman and Intellicell have included this clause (i) to preclude
any claim that either Neman or Intellicell was without the advice of counsel;
and (ii) to preclude the introduction of parol evidence to vary, interpret,
supplement or contradict the terms of this Agreement.
(c) FACTUAL INVESTIGATION. Neman and Intellicell each represents,
warrants and agrees that he or it has made a sufficient investigation of the
facts pertaining to all matters contained in or related to this Agreement as
he or it deems necessary or desirable.
(d) AUTHORITY. Neman and Intellicell each represents, warrants
and agrees that he or it has the full right, power and authority to execute
this Agreement and that the person executing this Agreement on his or its
behalf has the full right, power and authority to commit and to bind that
party fully to the terms of this Agreement.
(e) NO ASSIGNMENT. Neman and Intellicell each represents,
warrants and agrees that there has been no assignment or transfer, including,
without limitation, by way of subrogation or operation of law or otherwise,
to any person or entity whatsoever of claims released by that party or of any
other claim, right, demand, action or cause of action that the parties may
have had, have or might have arising out of the matters that are the subject
of this Agreement. Neman and Intellicell each, to the extent any particular
party breaches this representation or warranty, agrees to defend, to
indemnify and to hold harmless any nonbreaching party to this Agreement from
and against any and all claims, allegations, demands, liabilities, losses,
obligations, promises, damages, costs, expenses (including, without
limitation, attorneys' fees and costs of investigation), lawsuits, actions
(in law, equity or otherwise), causes of action, rights and privileges
actually incurred as a result of that breach.
(f) Neman represents and agrees that he is not owed any cash,
securities or other amounts by Intellicell in connection with his employment
with Intellicell (including as an officer and director) and is not aware of
any other claims that he may have against Intellicell.
9. GENERAL.
(a) FULL INTEGRATION. Except as set forth hereinbelow, this
Agreement is the final written expression and the complete and exclusive
statement of all of the agreements, conditions, promises, representations and
covenants between Neman and Intellicell with respect to the subject matter of
this Agreement, and replaces and supersedes all prior, former or
contemporaneous agreements, negotiations, understandings, representations,
discussions or warranties between the parties, their respective
representatives, and any other person or entity, with respect to the subject
matter of this Agreement. Any
<PAGE>
modification, alteration or amendment of this Agreement shall be nonbinding,
ineffective or invalid unless it is in writing, specifically refers to this
Agreement and is signed by the party to be charged with the modification,
alteration or amendment or by a duly authorized representative of that party.
(b) NO ADMISSIONS. Neman and Intellicell each expressly
acknowledges and agrees that this Agreement represents a settlement of
disputed claims and is not, in any respect, nor for any purpose, to be deemed
or construed to be an admission or concession of any liability or wrongdoing
by any party whatsoever or of the existence of any claim. Furthermore, this
Agreement shall not be deemed to be for the benefit of, or to confer any
rights of any kind or nature whatsoever upon, any third party (whether a
person or entity).
(c) WAIVER AND SEVERABILITY. No waiver of any term, covenant or
condition of this Agreement shall be construed as a waiver of any other term,
covenant or condition, nor shall any waiver of any default under this
Agreement be construed as a continuing waiver of any term, condition or
covenant or as a waiver of any other default. Furthermore, in the event any
portion of this Agreement is found, judicially or otherwise, to be unlawful,
void or, for any other reason, unenforceable, that provision shall be deemed
severable from this Agreement and the invalidity or lack of enforceability
shall not affect the validity and enforceability of the remaining portions of
this Agreement.
(d) CALIFORNIA LAW GOVERNS. This Agreement shall be construed and
enforced in accordance with, and governed by, the internal, substantive laws
of the State of California. Any lawsuits filed to enforce any provision of
this Agreement by any party hereto shall be filed in the Superior Court for
the State of California, County of Los Angeles.
(e) ATTORNEYS' FEES. Except as otherwise provided in this
Agreement, each side is to bear its own legal expenses and attorneys' fees.
In the event any legal or governmental action or proceeding is commenced
under or pursuant to any other terms and conditions of this Agreement, or to
interpret or enforce the terms of or obligations arising out of this
Agreement, or to recover damages for the breach of this Agreement, the party
prevailing in any such action or proceeding shall be entitled, in addition to
any other relief awarded by the Court or other tribunal, to recover from the
other party all reasonable attorneys' fees, costs and expenses incurred by
the prevailing party. In addition, the prevailing party shall be entitled to
recover from the non-prevailing party post-judgment/award/order attorneys',
fees incurred by the prevailing party in enforcing a judgment, order or award
against the non-prevailing party. Notwithstanding anything in this Agreement
to the contrary, the provisions of the preceding sentence are intended to be
severable from the balance of the Agreement, shall survive any judgment
rendered in connection with the aforesaid legal action, and shall not be
merged into any such judgment, order or award.
(f) COUNTERPARTS, COPIES, FAXED SIGNATURES. This Agreement may be
executed in any number of counterparts by the parties, and, when each party
has signed and delivered at least one counterpart to the other party, each
counterpart shall be deemed an original and, taken together, shall constitute
and be deemed to be one and the same agreement, and shall be binding and
effective as to both of the parties. In addition, true and correct copies
may be used in lieu of the original Agreement for any purpose whatsoever.
Finally, faxed copies of this Agreement and faxed signature pages shall be
binding and effective as to both parties and may be used in lieu of the
original Agreement, and, in particular, in lieu of original signatures, for
any purpose whatsoever.
<PAGE>
(g) HEADINGS. The headings to the paragraphs of this Agreement
are inserted for convenience only and will not be deemed a part of this
Agreement, nor will the heading affect the construction or interpretation of
the provisions contained within this Agreement.
(h) SURVIVAL OF WARRANTIES. All representations and warranties
contained within this Agreement shall survive its execution, effectiveness
and delivery. It is expressly understood and agreed by the parties that none
of the releases or covenants set forth within this Agreement are intended to
or do release or affect any claims or rights specifically arising out of this
Agreement or the breach of it.
(i) FURTHER INSTRUMENTS. Neman and Intellicell each shall execute
and deliver further instruments, documents or papers and shall perform all
acts necessary or proper to carry out and effectuate the terms of this
Agreement as may be required by the terms of the Agreement or as may be
reasonably requested by either party to this Agreement.
(j) NO PRESUMPTION FROM DRAFTING. This Agreement has been
negotiated at arm's-length between persons knowledgeable in the matters set
forth within this Agreement. Accordingly, given that all parties have had
the opportunity to draft, review and/or edit the language of this Agreement,
no presumption for or against any party arising out of drafting all or any
part of this Agreement will be applied in any action relating to, connected
with or involving this Agreement. In particular, any rule of law, including,
but not limited to, Section 1654 of the California Civil Code Section, or any
other statutes, legal decisions, or common law principles of similar effect,
that would require interpretation of any ambiguities in this Agreement
against the party that has drafted it, is of no application and is hereby
expressly waived. The provisions of this Agreement shall be interpreted in a
reasonable manner to effect the intentions of the parties.
(k) BENEFITS SUCCESSORS. Except as limited by the terms of this
Agreement, this Agreement shall be binding upon and shall inure to the
benefit of each of the parties to this Agreement and to their respective
heirs, executors, administrators, assigns, successors-in-interest,
representatives, trustees, beneficiaries and Related Entities.
(l) ALL TERMS ARE CONTRACTUAL. Each term of this Agreement is
contractual and not merely a recital.
(m) VOLUNTARY EXECUTION OF AGREEMENT. Neman represents that he
has carefully read this entire Agreement and that he knows and understands
its contents. Neman has had the opportunity to receive independent legal
advice from attorneys of his choice with respect to the preparation, review
and advisability of executing this Agreement. Neman further represents and
acknowledges that he has freely and voluntarily executed this Agreement after
independent investigation and without fraud, duress, or undue influence, with
the full understanding of the legal and binding effect of this Agreement and
with the approval of his legal counsel. Neman thereby knowingly waives the
21-day period under the Older Workers Benefits Protection Act to review this
Agreement with his attorney prior to signing.
(n) RIGHT OF REVOCATION. With respect only to claims arising
under the Age Discrimination in Employment Act ("ADEA"), Neman has the right
to revoke this Agreement for any reason within seven days after he signs it.
To be effective, Neman's notice of revocation must be in writing and must be
hand
<PAGE>
delivered or mailed to David Kane, Intellicell Corp., 9314 Eton Avenue,
Chatsworth, California 91311, within the seven-day period. If mailed, the
revocation must be postmarked within the seven-day period, properly addressed
and sent by certified mail, return receipt requested. If hand-delivered, it
must be given to David Kane within the seven-day period.
(o) CURE PERIOD. Intellicell shall have five days following
written notice from Neman to cure any failure to make a required payment to
Neman by Intellicell or any third party as required under this Agreement.
IN WITNESS WHEREOF, the parties to this Agreement have approved and
executed this Agreement as of the date set forth above.
BEN NEMAN
/s/ BEN NEMAN
--------------------------------
Ben Neman
INTELLICELL CORP.
By: /s/ DAVID KANE
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Its: CFO
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APPROVED AS TO FORM:
TROY & GOULD
Professional Corporation
By: /s/ SANFORD J. HILLSBERG
--------------------------------
Sanford J. Hillsberg
Attorneys for Intellicell Corp.
TROOP STEUBER PASICH REDDICK
& TOBEY, LLP
By: /s/ HOWARD J. KERN
--------------------------------
Howard J. Kern
Attorneys for Ben Neman
