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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Under the Securities Exchange Act of 1934
Zevex International, Inc.
- -------------------------------
(Name Of Issuer)
Common Stock
- -----------------------------
(Title of Class of Securities)
98950E400
- -------------
CUSIP Number)
Dean Constantine, Zevex International, Inc., 5175 Greenpine Drive, Salt Lake
City, Utah 84123; (801) 264-1001
- -----------------------------------------------------------------------
(Name, Address and telephone Number of Persons Authorized to Receive Notices
and Communications)
May 15, 1997
- -------------------------------------------------------
(Date of Event Which Requires Filing of this Statement)
If the filing person has previously filed a statement on Schedule 13G to
report the acquisition which is the subject of this Schedule 13D, and is
filing this schedule because of Rule 13d-1(b)(3) or (4), check the following
box [ ].
Check the Following Box if a fee is being paid with the statement [ ].
Note: Six copies of this statement, including all exhibits, should be filed
with the Commission. See Rule 13d-1(a) for other parties to whom copies are
to be sent.
*The remainder of this cover page shall be filled out for a reporting
person's
initial filing on this form with respect to the subject class of securities,
and for any subsequent amendment containing information which would alter
disclosures provided in a prior cover page.
The information required on the remainder of this cover page shall not be
deemed to be "filed" for the purpose of Section 18 of the Securities Exchange
Act of 1934 ("Act") or otherwise subject to the liabilities of that section
of
the Act but shall be subject to all other provisions of the Act (however, see
the Notes).PAGE
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SCHEDULE 13D
CUSIP NO. 98950E400
1. Name of Reporting Person: Jeff Holmes
S.S. or I.R.S. Identification No. of Above Person: ###-##-####
2. Check the Appropriate Box if a Member of a Group: [ ]
3. SEC Use Only
4. Source of Funds: OO
5. Check Box if Disclosure of Legal Proceedings is required pursuant to
items 2(d) or 2(e): NA
6. Citizenship or Place of Organization: United States
7. Sole Voting Power: 125,000 shares of common stock
175,000 warrants to purchase shares of common stock
8. Shared Voting Power: 250,000 shares of common stock, see Item 3 and
Item 5
9. Sole Dispositive Power: 125,000 shares of common stock
175,000 warrants to purchase shares of
common stock
10. Shared Dispositive Power: 250,000 shares of common stock, see Item 3 and
Item 5
11. Aggregate Amount Beneficially owned by Each Reporting Person: 550,000
12. Check Box if the Aggregate Amount in Box (11) Excludes Certain Shares: NA
13. Percent of Class Represented by Amount in Row (11): At May 15, 1997, the
550,000 shares would represent 25.34%
14. Type of Reporting Person: IN
PAGE
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Item 1. Security and Issuer:
This statement relates to shares of Common Stock of Zevex International,
Inc. (the "Issuer") whose address is 5175 Greenpine Drive, Salt Lake City,
Utah 84123.
Item 2. Identity and Background:
(a) The individual filing this statement is Jeff Holmes;
(b) Mr. Holmes' business address is 600 Hwy. 50, Pinewild at Marla Bay,
Unit 101, Zephyr Cove, Nevada 89448
(c) Mr. Holmes is self employed principally involved in business
consulting;
(d) Mr. Holmes has not been convicted in a criminal proceeding;
(e) Mr. Holmes has not been a party to a civil proceeding of a judicial
or administrative body; and
(f) Mr. Holmes is a citizen of the United States.
Item 3. Source and Amount of Funds or other Consideration:
The securities acquired by Mr. Holmes were done so through Blosch and
Holmes, LLC, which is owned equally by Mr. Holmes and Kirk Blosch. Blosch and
Holmes, LLC originally acquired 500,000 shares of the Issuer's common stock
and 500,000 common stock purchase warrants to purchase shares of the Issuer's
common stock. The funds used in the purchase of the securities consisted of
$125,000 of Mr. Blosch's and $125,000 of Mr. Holmes' personal funds and
$1,000,000 borrowed by Blosch and Holmes, LLC, a Utah limited liability
company, from a few select individuals. Blosch and Holmes, LLC still holds
250,000 shares of the Issuer.
Item 4. Purpose of Transaction:
The securities were purchased for investment purposes only. Mr. Holmes
may acquire additional securities of the Issuer if he feels they are a good
investment at the time. Mr. Holmes, at this time, has no plans related to:
(a) The acquisition of additional securities of the Issuer or of the
disposition of any securities of the Issuer except as stated;
(b) An extraordinary corporate transaction, such as a merger,
reorganization or liquidation involving the Issuer or any of its subsidiaries;
(c) A sale or transfer of a material amount of assets of the Issuer or
of any of its subsidiaries;
(d) Any change in the present board of directors or management of the
Issuer, including any plans or proposals to change the number or term of
directors or to fill any existing vacancies on the board; although Blosch and
Holmes, LLC does have the right to appoint a new director if it should desire;
(e) Any material change in the present capitalization or dividend policy
of the Issuer;
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(f) Any other material change in the Issuer's business or corporate
structure;
(g) Changes in the Issuer's charter, bylaws or instruments corresponding
thereto or other transactions which may impede the acquisition of control of
the Issuer by any person;
(h) Causing a class of securities of the Issuer to be delisted from a
national securities exchange or to cease to be authorized to be quoted in an
inter-dealer quotation system of a registered national securities association;
(i) A class of equity securities of the Issuer becoming eligible for
termination of registration pursuant to Section 12(g)(4) of the Act; or
(j) Any action similar to any of those enumerated above.
Item 5. Interest in Securities of the Issuer.
(a) As of May 15, 1997, Mr. Holmes owned directly 125,000 shares of the
Issuer representing 6.26% of the Issuer's outstanding common stock at that
date. Additionally, Mr. Holmes owns in his name 175,000 warrants to purchase
an equal number of shares of the Issuer's common stock, and beneficially,
through Blosch and Holmes, LLC, an additional 250,000 shares of the Issuer's
common stock bringing the total number of shares owned directly and
beneficially to 550,000 shares representing 25.34% of the Issuer's common
stock, assuming the exercise of the warrants.
(b) Mr. Holmes has sole power to vote the 125,000 shares of the Issuer's
common stock held in his name and shared power to vote the 250,000 shares held
by Blosch and Holmes, LLC. When exercised, Mr. Holmes will have the sole
power to vote the shares represented by the 175,000 warrants he holds.
(c) During the past 60 days, Mr. Holmes has not engaged in any
transactions involving the Issuer's securities.
(d) Mr. Holmes has the sole right to receive and the power to direct the
receipt of dividends from, or the proceeds from the sale of the 125,000 shares
of the Issuer's shares of common stock he holds and shares power with Kirk
Blosch in regards to the 250,000 shares held by Blosch and Holmes, LLC.
Item 6. Contracts, Arrangements, Understandings or Relationships with
Respect
to Securities of the Issuer.
Mr. Holmes is not currently a party to any contracts, arrangements,
understandings or relationships with respect to the securities of the Issuer;
except that as a member of Blosch and Holmes, LLC which holds 250,000 shares
of the Issuer's securities and are subject to a security interest in favor of
the individuals who loaned Blosch and Holmes, LLC the money to purchase the
securities. Unless Blosch and Holmes, LLC is in default in regards to the
promissory notes, it has sole right to vote the shares. If in default on the
promissory notes, the secured party on the promissory note has the right to
vote the shares.
Item 7. Materials to be filed as Exhibits.
Exhibit Description Location
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Form of Promissory Note of Blosch and Holmes, LLC and
Form of Security Agreement Exhibit 1
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Signature:
After reasonable inquiry and to the best of my knowledge and belief, I
certify that the information set forth in this statement is true, complete
and
correct.
Date: May 26, 1997
/S/ Jeff Holmes
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Signature
Schedule 13D
Exhibit 1
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Date: ___________, 1997 Amount: $_______(U.S.)
BLOSCH AND HOLMES, L.L.C.
FORM OF
CUMULATIVE SECURED PROMISSORY NOTE
BEARING INTEREST AT 8% PER ANNUM
______
THIS NOTE HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED
(THE "SECURITIES ACT"), OR UNDER THE SECURITIES LAWS OF CERTAIN STATES. THESE
SECURITIES HAVE BEEN ACQUIRED FOR INVESTMENT AND MAY NOT BE TRANSFERRED OR
SOLD IN THE ABSENCE OF AN EFFECTIVE REGISTRATION OR OTHER COMPLIANCE UNDER THE
SECURITIES ACT OR THE LAWS OF THE APPLICABLE STATE OR A "NO-ACTION" OR
INTERPRETIVE OPINION OF COUNSEL REASONABLY SATISFACTORY TO THE ISSUER AND ITS
COUNSEL TO THE EFFECT THAT THE SALE OR TRANSFER IS EXEMPT FROM REGISTRATION
UNDER THE SECURITIES ACT AND SUCH STATE STATUTES.
______
BLOSCH AND HOLMES, L.L.C., a limited liability company duly organized and
existing under the laws of the state of Utah (hereinafter referred to as the
"Company"), for value received, hereby promises to pay to ______________, the
registered holders hereof, the principal sum of ________________________,
twenty four (24) months from date, upon presentation and surrender of this
promissory note (the "Note") at the offices of the Company, in such lawful
money of the United States of America as at the time of payment shall be legal
tender for the payment of public and private debt, until the principal hereof
is paid or made available for payment as herein provided.
This Note is subject to the following further terms and material
provisions:
1. Series. This Note is one of a duly authorized series of
promissory notes of the Company totaling $1,000,000 (the "Notes").
2. Term and Interest. The date of maturity of the Note shall be
twenty four (24) months from the date of issuance, subject to prepayment as
set forth in paragraph 3 hereof. The Note shall bear simple interest at the
rate of eight percent (8.0%) per annum. The principal on the Note is payable
on the maturity date, subject to prepayment as set forth in paragraph 3
hereof, and will be paid at the office of the Company, maintained for such
purposes, to the registered holder of the Note on the books and records of the
Company. Accrued interest on the Note will be payable annually, on the
anniversary date of the Note, and will be paid at the office of the Company,
maintained for such purposes, to the register holder of the Note on the books
and records of the Company
3. Prepayment. This Note is subject to prepayment, in whole or in
part, at the election of the Company at any time, upon not less than 10 days
notice. Prepayment shall be effected by paying the amount equal to the
outstanding principal amount of the Note and accrued interest at the date of
prepayment. On the date fixed for prepayment by the Company, the amount of
principal shall be paid in cash or certified funds. Any Note which is prepaid
only in part shall be presented for notation thereon by the Company of such
partial prepayment. If less than all the Note principal amount and interest
is to be prepaid, notice of the proposed prepayment shall be sent to the
registered holder of the Note and such prepayment shall be made.
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4. Satisfaction and Discharge of Note. This Note shall cease to be
of further effect (except as to any surviving rights of transfer, or exchange
of Notes herein expressly provided for) when:
(a) The Company has paid or caused to be paid all sums payable
hereunder by the Company, including all principal and interest amounts under
the Note; and
(b) All the conditions precedent herein provided for relating to the
satisfaction and discharge of this Note have been met.
5. Events of Default. "Events of Default," when used herein,
whatever the reason for such event of default and whether it shall be
voluntary or involuntary or be effected by operation of law pursuant to any
judgment, decree, or order of any court or any order, rule, or regulation of
any administrative or government body or be caused by the provisions of any
paragraph herein means any one of the following events:
(a) Default in the payment of the principal of the Note, when due,
whether at maturity, or otherwise; or
(b) Default in the performance or breach of any covenant or warranty
of the Company in this Note (other than a covenant or warranty, the breach or
default in performance of which is elsewhere in this section specifically
dealt with), and continuation of such default or breach for a period of 30
days after there has been given to the Company by registered or certified
mail, by the holders of a majority in principal amount of the outstanding
Note, a written notice specifying such default or breach and requiring it to
be remedied and stating that such notice is a notice of default hereunder; or
(c) The entry of a decree or order by a court having jurisdiction in
the premises adjudging the Company a bankrupt or insolvent, or approving as
properly filed a petition seeking reorganization, arrangement, adjustment, or
composition of or in respect of the Company under the Federal Bankruptcy Act
or any other applicable federal or state law, or appointing a receiver,
liquidator, assignee, trustee, sequestrator (or other similar official) of the
Company or of any substantial part of its property, or ordering the winding up
or liquidation of its affairs, and the continuation of any such decree or
order unstayed and in effect for a period of 30 consecutive days; or
(d) The institution by the Company of proceedings to be adjudicated a
bankrupt or insolvent, or the consent by it to the institution of bankruptcy
or insolvency proceedings against it, or a filing by it of a petition or
answer or consent seeking reorganization or relief under the Federal Bankruptcy
Act or any other applicable federal or state law; or
(e) The consent by the Company to the filing of any such petition or
the appointment of a receiver, liquidator, assignee, trustee, sequestrator (or
other similar official) of the Company or of any substantial part of its
property), or the making by it of an assignment for the benefit of creditors,
or the admission by it in writing of its inability to pay its debts generally
as they become due, or the taking of corporate action by the Company in
furtherance of any such action.
PAGE
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6. Acceleration of Maturity. If an event of default occurs and is
continuing then, in every such case, the holder of a majority in principal
amount of the outstanding Notes, may declare the principal of the Notes to be
due and payable immediately, by a notice in writing to the Company of such
default, and upon any such declaration, such principal shall become
immediately due and payable. At any time after such declaration of
acceleration has been made, and before a judgment or decree for payment of
money due has been obtained by the holders, the holders of a majority of the
principal of the outstanding Notes, by written notice to the Company, may
rescind and annul such declaration and its consequences, if all events of
default, other than the nonpayment of the principal of the Notes which has
become due solely by such acceleration, has been cured or waived. No such
recession shall affect any subsequent default or impair any right contingent
thereon.
7. Suits for Enforcement. If an event of default occurs and is
continuing, the holder of a majority in principal amount of the outstanding
Note may, in their discretion, proceed to protect and enforce their rights by
such appropriate judicial proceedings as the holders shall deem most effectual
to protect and enforce any such rights, whether for the specific enforcement
of any covenant or agreement under this Note or in aid of the exercise of any
power granted herein, or to enforce any other proper remedy.
8. Limitation on Suits. No holder of any Note shall have any right
to institute any proceedings, judicial or otherwise, with respect to this
Note, or for the appointment of a receiver or trustee, or for any remedy
hereunder, unless such holder has previously given written notice to the
Company of a continuing event of default as provided above; it being
understood and intended that no one or more holders of this Note shall have
any right in any manner whatever by virtue of, or by availing of, any
provisions of this Note to effect, disturb or prejudice the right of any other
holders of Notes, or to obtain or to seek to obtain priority or preference
over any other holders or to enforce any right under this Note, except in the
manner herein provided and for the equal and ratable benefit of all the
holders of the Note.
9. Acts of Holders. Any request, demand, authorization, direction,
notice, consent, waiver, or other action provided by this Note to be given or
taken by the holder hereof or by the holders of the Notes may be embodied in
and evidenced by one or more instruments of substantially similar tenor signed
by such holders in person or by their agent or attorney-in-fact, duly
appointed in writing; and, except as otherwise expressly provided herein, such
action shall become effective when such instrument or instruments are
delivered to the Company in the manner provided for giving notices herein.
Such instrument or instruments, and the action embodied therein or evidenced
thereby, are herein sometimes referred to as the "act" of the holders signing
such instrument or instruments. Proof of execution of any such instrument or
of writing appointing any such agent shall be sufficient for any purpose of
this Note if the fact and date of execution by any person of any purpose of
the Note if the fact and date of execution by any person of any such
instrument or writing is verified by the affidavit of a witness of such
execution or by the request, demand, authorization, direction, notice,
consent, waiver, or other action by the holder of this Note shall bind every
Note holder of the same Note and the holder of every Note issued upon the
transfer thereof or in exchange therefor or in lieu thereof in respect of
anything done or suffered to be done by any person in reliance thereon,
whether or not notation of such action is made upon such Note.
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10. Notices to Holders; Waiver. Where this Note provides for notice
to holders of any event, such notice shall be sufficiently given if in writing
and sent by courier providing for delivery within 72 hours or mailed,
registered, postage prepaid, to each holder affected by such event, at his
address as it appears in the Note register maintained by the Company, not
later than the latest date, and not earlier than the earliest date, prescribed
for the giving of such notice. Where the Note provides for notice to the
Company, such notice shall be sufficiently given if in writing and mailed,
registered, postage prepaid, to the Company at its address set forth above (or
at such other address as shall be provided to the holder of this Note in the
manner for giving notices set forth herein), not later than the latest date,
and not earlier than the earliest date, prescribed for the giving of such
notice. Where this Note provides for notice in any manner, such notice may be
waived in writing by the person entitled to receive such notice, whether
before or after the event, any such waiver shall be equivalent of such notice.
11. Restrictions. The holder of this Note, by acceptance hereof,
represents and warrants as follows:
(a) The Note is being acquired for the holder's own account to be
held for investment purposes only and not with a view to, or for, resale in
connection with any distribution of such Note or any interest therein without
registration or other compliance under the Securities Act and applicable state
securities laws, and the holder hereof has no direct or indirect participation
in any such undertaking or in underwriting such an undertaking.
(b) The holder hereof has been advised and understands that the Note
has not been registered under the Securities Act and the Note must be held and
may not be sold, transferred, or otherwise disposed of for value unless it is
subsequently registered under the Securities Act or an exemption from such
registration is available; except as set forth herein, the Company is under no
obligation to register the Note under the Securities Act; in the absence of
such registration, sale of the Note may be impracticable; the Company will
maintain stop-transfer orders against registration of transfer of the Note.
The Company may refuse to transfer the Note unless the holder thereof provides
an opinion of legal counsel reasonably satisfactory to the Company or a
"no-action" or interpretive response from the Securities and Exchange
Commission to the effect that the transfer is proper; further, unless such
letter or opinion states that the Note are free from any restrictions under
the Securities Act, the Company may refuse to transfer the Note to any
transferee who does not furnish in writing to the Company the same
representations and agree to the same conditions with respect to such Note if
any set forth herein. The Company may also refuse to transfer the Note if any
circumstance is present reasonably indicating that the transferee's
representations are not accurate.
12. Severability. In case any provision in this Note shall be
invalid, illegal, or unenforceable, the validity, legality, and enforceability
of the remaining provisions shall not in any way be affected or impaired
thereby.
13. Governing Law. This Note shall be governed by and construed and
interpreted in accordance with the laws of the state of Utah.
PAGE
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14. Legal Holidays. In any case where any date provided herein shall
not be a business day, then (notwithstanding any other provision of this Note)
the event required or permitted on such date shall be required or permitted,
as the case may be, on the next succeeding business day with the same force
and effect as if made on the date upon which such event was required or
permitted pursuant hereto.
15. Delay or Omission; No Waiver. No delay or omission of any holder
of the Note to exercise any right or remedy accruing upon any event of default
shall impair any such right or remedy or constitute a waiver of any such event
or default or any acquiescence therein. Every right or remedy given hereby or
by law may be from time to time, and as often as may be deemed expedient.
16. Security. This Note is secured, as set forth in the Security and
Pledge Agreement attached hereto as Exhibit "A," by _________________________
shares of ZEVEX's International, Inc.'s common stock, par value $0.04 per
share (the "ZEVEX Stock"), which are held by the Company. The ZEVEX Stock is
"restricted securities" as that term is defined under the Securities Act and
may not be transferred sold or otherwise disposed of without an effective
registration statement covering the shares of ZEVEX Stock or an exemption from
registration as provided in the Securities Act and the rules and regulations
promulgated thereunder and applicable state securities laws.
17. Miscellaneous. This Note is subject to the following additional
terms and conditions:
(a) If this Note is placed with any attorney for collection, or if
suit be instituted for collection, or if any other remedy provided by law is
pursued by the registered holder hereof, because of any default in the terms
and conditions herein, then in either event, the undersigned agrees to pay
reasonable attorneys' fees, costs, and other expenses incurred by the
registered holder hereof in so doing.
(b) None of the rights and remedies of the registered holder hereof
shall be waived or affected by failure or delay to exercise them. All
remedies conferred on the registered holder of this Note shall be cumulated
and none is exclusive. Such remedies may be exercised concurrently or
consecutively at the registered holder's option.
(c) This Note is negotiable and transferable, subject to compliance
with the provisions of paragraph 11 hereof.
(d) The makers, guarantors, and endorsers hereof severally waive
presentment for payment, protest, and notice of protest, and of nonpayment of
this Note.
DATED effective as of the ___th day of February, 1997.
BLOSCH AND HOLMES, L.L.C.
By ______________________________
Its Duly Authorized Manager
PAGE
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FORM OF PLEDGE AND SECURITY AGREEMENT
THIS PLEDGE AND SECURITY AGREEMENT (this "Agreement") is made and entered
into effective the 12th day of February, 1997, by and between Blosch and
Holmes, L.L.C., a Utah limited liability company (hereinafter referred to as
"Debtor"), and ___________________________________ (collectively referred to
as the "Creditor").
FOR AND IN CONSIDERATION of the mutual promises and covenants hereinafter
set forth, and other good and valuable consideration, it is agreed as follows:
1. Creation of Security Interest. To secure the due and timely
performance of the payment by Debtor to Creditor of the obligation represented
by a promissory note dated this date in the principal amount of
_______________________, ($______) and payable, together with interest thereon
at the rate of 8% per annum, on or before February 13, 1999, a copy of which
is attached hereto and incorporated herein by this reference and all
accessions, renewals, extensions, and modifications hereto (the "Note"),
Debtor hereby pledges, hypothecates, assigns, transfers, sets over, and grants
a security interest in and to ____________________________ (______) shares of
restricted common stock of ZEVEX International, Inc., a Nevada corporation,
with such shares hereinafter called the "Collateral." The Collateral shall be
delivered as hereinafter provided to be held for and on behalf of Creditor and
to be disposed of in accordance with the terms hereof.
Unless otherwise defined, words used herein shall have the meanings given
them in the Utah Uniform Commercial Code as now adopted and as hereinafter
amended from time to time.
2. Delivery of Collateral. So long as any of the Note remains
outstanding, Debtor, will, unless Creditor shall otherwise consent in writing,
(a) at its expense, promptly deliver to the agent, as provided in paragraph 7
below, for holding on behalf of Creditor such stock powers and other
documents, satisfactory in form and substance to the agent, with respect to
the Collateral as the agent may reasonably request to preserve and protect,
and to enable the agent to enforce, Creditor's rights and remedies hereunder;
(b) not sell, assign, exchange, or otherwise transfer any of his rights in any
of the Collateral; (c) not create or suffer to exist any lien, security
interest, or other charge or encumbrance against the Collateral, except for
the pledge hereunder; (d) not make or consent to any amendment or other
modification or waiver with respect to any of the Collateral or enter into any
agreement or permit to exist any restriction with respect to any of the
Collateral other than pursuant hereto; and (e) not take or fail to take any
action which would in any manner impair the value or enforceability of
Creditor's security interest in any of the Collateral. Any transfer by Debtor
of the Collateral shall be subject to the interest of Creditor as a secured
party therein.
3. Power to Vote Shares. During the term of this Agreement and so
long as Debtor is not in default in the performance of any of their terms of
this Agreement or the Note, Debtor shall have the sole right to vote the
shares of ZEVEX International, Inc. on all corporate questions and actions.
4. Ownership of Collateral. Debtor owns all the Collateral
absolutely, and no other person has or claims any interest in the Collateral.
Debtor will defend any proceeding which may affect the title to or Creditor's
security interest in any Collateral, and will indemnify Creditor for all costs
and expenses of Creditor's defense.
<PAGE> 7
5. Adjustments. In the event that, during the term of this
Agreement, any share dividend, reclassification, readjustment, or other change
is declared or made in the capital structure of ZEVEX International, Inc., all
new, substitute, and additional shares, or other securities, issued by reason
of any such change shall be delivered to the agent to be held for and on
behalf of Creditor under the terms of this Agreement in the same manner as the
shares of stock originally pledged hereunder.
6. Charges, Liens, and Encumbrances on Collateral. Debtor will pay,
when due, all future charges, liens, obligations, or encumbrances on, and all
taxes and assessments hereafter imposed on or affecting the Collateral.
7. Agreement to Hold Collateral. Simultaneously with the
execution of this Agreement, Creditor and Debtor shall enter into an agreement
in the form attached hereto and incorporated herein by reference, providing
for the deposit of the Collateral with an agent of Debtor, which shall hold
and dispose of the Collateral in accordance with the terms thereof.
8. Application of Payments. Unless applicable law provides
otherwise, all payments received by Creditor under the Note shall be applied
by Creditor first in payment of interest payable on the Note, next to the
principal of the Note, and last to any other sums secured by this Agreement.
9. Collateral Generally. As to all Collateral, unless specifically
otherwise agreed by the Creditor in writing, the Debtor will promptly deliver
the Collateral to Creditor to be held until payment of the Note is received or
the Collateral is disposed of pursuant to this Agreement.
10. Procedure on Default. In the event of default, at Creditor's
option, without demand or notice, all or any part of the principal of the Note
shall immediately become due and payable. Creditor may resell the Collateral,
provided such sale is completed in a commercially reasonable manner. From the
proceeds of any such sale Creditor shall deduct all expenses, including
reasonable attorneys' fees. The balance shall be applied to the amount due,
any surplus shall be paid to Debtor, and in case of deficiency, Debtor shall
pay same with interest at the rate of 8% per annum.
11. Events of Default. Upon the occurrence or during the continuance
of any one or more of the events hereinafter enumerated, Creditor may
forthwith or at any time thereafter during the continuance of any such event,
by notice in writing to Debtor, declare the unpaid balance of the principal
and interest on the Note to be immediately due and payable, and the principal
and interest shall become and shall be immediately due and payable without
presentation, demand, protest, notice of protest, or other notice of dishonor,
all of which are hereby expressly waived by Debtor, such events being as
follows:
(a) If any vendor shall file a lien, security interest, or any charge
or encumbrance of any kind against the Collateral and Debtor does not cure the
lien, security interest, charge or encumbrance within 30 days from notice of
such lien, security interest, charge or encumbrance;
(b) Default in the payment of the principal of the Note or any
portion thereof when the same shall become due and payable, whether at
maturity as herein expressed, by acceleration, or otherwise, unless cured
within ten days after notice thereof by Creditor of the Note to Debtor;
<PAGE> 8
(c) Debtor shall file a voluntary petition in bankruptcy or a
voluntary petition seeking reorganization, or shall file an answer admitting
the jurisdiction of the court and any material allegations of an involuntary
petition filed pursuant to any act of Congress relating to bankruptcy or to
any act purporting to be amendatory thereof, or shall be adjudicated bankrupt,
or shall make an assignment for the benefit of creditors, or shall apply for
or consent to the appointment of any receiver or trustee for Debtor, or of all
or any substantial portion of its property, or Debtor shall make an assignment
to an agent authorized to liquidate any substantial part of its assets; or
(d) An order shall be entered pursuant to any act of Congress
relating to bankruptcy or to any act purporting to be amendatory thereof
approving an involuntary petition seeking reorganization of Debtor, or an
order of any court shall be entered appointing any receiver or trustee of or
for Debtor, or any receiver or trustee of all or any substantial portion of
the property of Debtor, or a writ or warrant of attachment or any similar
process shall be issued by any court against all or any substantial portion of
the property of Debtor, and such order approving a petition seeking
reorganization or appointing a receiver or trustee is not vacated or stayed,
or such writ, warrant of attachment, or similar process is not released or
bonded within 60 days after its entry or levy.
12. Remedy Cumulative. All remedies provided in this Agreement are
distinct and cumulative to any other right or remedy under this Agreement or
afforded by law or equity, and may be exercised concurrently, independently,
or successively.
13. Financing Statement. Debtor agrees that this Agreement shall
also constitute a financing statement under the Utah Uniform Commercial Code.
14. Notices. Any notices or other communications required or
permitted hereunder shall be sufficiently given if personally delivered or if
sent by facsimile transmission or other electronic communication, confirmed by
registered or certified mail, postage prepaid, or if sent by prepaid telegram
or overnight courier addressed as follows:
If to Creditor, to:
If to Debtor, to: Blosch and Holmes, LLC
Attn.: Kirk Blosch
2081 South Lakeline Drive
Salt Lake City, Utah 84109
15. Waiver. No failure to exercise and no delay in exercising, any
right, power or privilege hereunder shall operate as a waiver thereof. Any
single or partial exercise of any right, power or privilege hereunder shall
not preclude any other or further exercise thereof, or the exercise of any
other right, power or privilege. No waiver of any provision of this Agreement
or of any right, or remedy, whether or not similar, nor shall any waiver
constitute a continuing waiver.
No waiver shall be binding unless evidenced by a writing which contains an
express reference to this Agreement and which is signed by the party against
whom enforcement of the waiver is sought.
<PAGE> 9
16. Modification. This Agreement may not be supplemented, varied, or
rescinded, except by a writing which contains an express reference to this
Agreement and which is signed by the party against whom enforcement of the
supplement, variance, or rescission is asserted.
17. Successors and Assigns. This Agreement shall bind and shall
inure to the benefit of the respective successors, assigns, heirs,
beneficiaries, and personal representatives of the parties hereto.
18. Additional Assurances and Documentation. Debtor agrees to
provide Creditor such further representations, assurances, and documents as
may, from time to time, be required by Creditor to document and evidence the
security interest in the Collateral created hereby including a UCC-1 which
will be filed in all states necessary to secure Creditor's interest in the
Collateral.
19. Headings. The headings or captions of the paragraphs, sections,
or articles herein are inserted for the convenience only and shall not be
deemed to constitute a part of this Agreement for any purpose, and in
particular shall not be construed to limit, define, or explain the subject
matter or modify the meaning of any part or all of this Agreement.
20. Survival of Warranties and Representations. The representations,
warranties, covenants, agreements, indemnities, and undertakings of the
parties in this Agreement shall not expire with, or be terminated or
extinguished by, the execution and delivery of this Agreement or any document
or instrument contemplated hereby, notwithstanding any investigations of the
facts constituting the basis of the representations and warranties of another
party by any party hereto or anyone on behalf of any party hereto.
Consummation of the transactions contemplated hereby shall not be deemed or
construed as a waiver of any right or remedy that any party hereto may have or
covenant, notwithstanding any fact or facts that such party knew or should
have known at such time.
21. Severability. In the event of this Agreement or the application
of any such provision to any person or circumstance shall conflict with any
jurisdiction, then such conflict shall not affect any other provision of this
Agreement which can be given effect without the conflicting provision and the
remainder of this Agreement or the application of such provisions to persons
or circumstances other than those as to which such provisions are held invalid
or unenforceable, shall not be affected thereby. The invalidity or
unenforceability of this Agreement or any provisions thereof in any
jurisdiction shall not affect the validity or enforceability of this Agreement
or of such provision in any other jurisdiction. To this end, the provisions
of this Agreement are declared to be severable. In the event that any law
limiting the amount of interest or other charges permitted to be collected
from the undersigned is interpreted so that any charge provided for in this
Agreement, whether considered separately or together with other charges that
are considered a party of this Agreement, violates such law, and the Debtor
declared by a court having jurisdiction in the premises to be entitled to the
benefit of such law, such charge is hereby reduced to the extent necessary to
eliminate such violation. The amounts, if any, previously paid to the
Creditor in excess of the amounts payable to the Creditor computed on the
basis of such charges as reduced shall be applied by Creditor to reduce the
principal of the indebtedness secured by this Agreement.
22. Modification. This Agreement may not be supplemented, varied, or
rescinded except by a writing which contains an express reference to this
Agreement and which is signed by the party against whom enforcement of the
supplement, variance, or rescission is asserted.
<PAGE> 10
23. Governing Law. This Agreement is being executed and delivered
and is intended to be performed in, and the execution, validity, construction,
and performance of this Agreement shall be construed and enforced in
accordance with, the laws of the state of Utah.
IN WITNESS WHEREOF, the parties have executed this Agreement as of the
date first above written.
DEBTOR:
BLOSCH AND HOLMES, L.L.C.
By:____________________________
Kirk Blosch, Manager
CREDITOR:
______________________________
Signature
