Environmental Remediation And Indemnification Agreement

ENVIRONMENTAL REMEDIATION AND INDEMNIFICATION AGREEMENT


THIS ENVIRONMENTAL REMEDIATION AND INDEMNIFICATION AGREEMENT (the "Agreement") is executed this 6th day of February, 1998, by and among INTERCELL Corporation, a Colorado corporation ("INTERCELL"), Jaymark, Inc., a Delaware corporation ("Jaymark"), and California Tube Laboratory, Inc., a California corporation ("CTL").


RECITALS


A. INTERCELL owns one hundred percent (100%) of the issued and outstanding shares of capital stock of CTL (the "CTL Stock").


B. Jaymark wishes to acquire, and INTERCELL wishes to sell, all of the CTL Stock in exchange for cash in accordance with the terms and subject to the conditions set forth in that certain Stock Purchase Agreement dated as of February 6, 1998, by and among Jaymark, INTERCELL and CTL (the "Stock Purchase Agreement").


C. Between 1949 and January 1998, CTL operated its commercial and industrial business on property located at 1255-1305 17th Avenue in the Live Oak District of Santa Cruz County, California (the "Santa Cruz Site").


D. Weber, Hayes & Associates has prepared a Phase I/II Environmental Site Assessment of the Santa Cruz Site, dated January 8, 1998 (the "Site Assessment"), attached hereto as Exhibit A, and has discovered various toxic and hazardous substances in the groundwater and soil underlying the Santa Cruz Site including, but not limited to, tetrachloroethane, trichloroethane, carbon tetrachloride, motor oil, diesel, polychlorinated biphenyls and other various contaminants (the "Contamination").


E. The Site Assessment has been or will be submitted to the State Water Resources Control Board and/or the California Regional Water Quality Control Board (Central Coast Region), the State Department of Toxic Substances Control and the Santa Cruz County Department of Environmental Health Services, and, pending their review, input and instructions, further investigation regarding the extent of the Contamination at the Santa Cruz Site and remediation activities at the Santa Cruz Site will be commenced.


F. Due to the proposed acquisition of CTL by Jaymark from INTERCELL and the discovery of the Contamination, Jaymark has requested that INTERCELL furnish to Jaymark and CTL written confirmation that INTERCELL will complete all investigation and remediation of the Contamination as may be required by state and federal law, and that INTERCELL will indemnify, defend and hold harmless Jaymark and CTL for all liabilities, claims, costs and legal proceedings arising as a result of the Contamination.


G. INTERCELL is willing to provide such written confirmation to Jaymark and CTL upon the terms and subject to the conditions stated herein.


NOW, THEREFORE, INTERCELL covenants and agrees as follows:


1. INTERCELL will comply with all reporting and disclosure requirements of applicable state and federal law relating to the Contamination, including, but not limited to, the reporting and disclosure requirements of the State Water Resources Control Board and/or the California Regional Water


1 Quality Control Board (Central Coast Region), the State Department of Toxic Substances Control and the Santa Cruz County Departm ...