Exhibit 10.30
REVOLVING LOAN AGREEMENT
(with Security Agreement)
THIS REVOLVING LOAN AGREEMENT, dated as of January 12, 1996,
by and between IOMEGA CORPORATION (the "Borrower") and FIRST
SECURITY BANK OF UTAH, N.A. (the "Bank"):
RECITALS
The Borrower has requested the Bank to extend credit to the
Borrower up to the principal sum of Six Million Dollars
($6,000,000.00) on a revolving loan basis and the Bank is willing
to do so upon the terms and conditions hereinafter set forth.
NOW, THEREFORE, in consideration of the promises herein
contained, and each intending to be legally bound hereby, the
parties agree as follows:
SECTION I. DEFINITIONS.
As used herein:
1.01 Incorporation of Uniform Commercial Code Definitions.
All capitalized terms used herein shall have the same respective
meanings as are given (if any are given) to those terms in the Utah
Uniform Commercial Code.
1.02 "Bank" means First Security Bank of Utah, N.A.
1.03 "Borrower" means IOMEGA Corporation.
1.04 "Collateral" means all of the Personal Property
Collateral.
1.05 "Collateral Documents" means, collectively, the Financing
Statements, the Security Agreements and any other instruments,
papers agreements, documents or certificates which grant or create
security interests, liens or encumbrances in the Collateral in
favor of the Bank, or which further assist in perfecting the same
or in giving notice thereof.
1.06 "Financial Statements" means the consolidated balance
sheet and consolidated profit and loss statements of the Borrower
prepared according to Generally Accepted Accounting Principles
consistently applied.
1.07 "Financing Statements" shall have the meaning specified
in the Utah Uniform Commercial Code and shall include this
Agreement or any form UCC-1 required by the Bank of Borrower to
accomplish perfection of security interests in the Collateral.
1.08 "First Advance" means the first Loan made pursuant to the
Loan Commitment.
1.09 "Indebtedness" means, as to the Borrower, all items of
indebtedness, obligation or liability, whether matured or
unmatured, liquidated or unliquidated, direct or contingent, joint
or several, including but without limitation:
(A) All indebtedness guaranteed, directly or indirectly, in
any manner, or endorsed (other than for collection or deposit
in the ordinary course of business) or discounted with
recourse;
(B) All indebtedness in effect guaranteed, directly or
indirectly, through agreements, contingent or otherwise: (1)
to purchase such indebtedness; or (2) to purchase, sell or
lease (as lessee or lessor) property, products, materials or
supplies or to purchase or sell services, primarily for the
purpose of enabling the debtor to make payment of such
indebtedness or to assure the owner of the indebtedness
against loss; or (3) to supply funds to or in any other manner
invest in the debtor; and
(C) All indebtedness secured by (or for which the holder of
such indebtedness has a right, contingent or otherwise, to be
secured by) any mortgage, deed of trust, pledge, lien,
security interest or other charge or encumbrance upon property
owned or acquired subject thereto, whether or not the
liabilities secured thereby have been assumed.
1.10 "Laws" means all ordinances, statutes, rules, regulations,
orders, injunctions, writs or decrees of any government or
political subdivision or agency thereof, or any court or similar
entity established by any thereof.
1.11 "Loan" or "Loans" means any sum or sums of money advanced
to or on behalf of the Borrower pursuant to the Loan Commitment and
the terms may mean any specific advance of sums or all aggregate
sums, as the context may require.
1.12 "Loan Commitment" means the Bank's agreement and
commitment to loan funds to Borrower as provided herein and as
specifically defined herein.
1.13 "Loan Termination Date" means April 12, 1996.
1.14 "Note" means the revolving note referenced herein
evidencing the Loans, which Note matures on the Loan Termination
Date.
1.15 "Obligations" means the obligation of the Borrower:
(A) To pay the principal of and interest on the Note in
accordance with the terms thereof and to satisfy all of its
other liabilities to the Bank, whether hereunder or otherwise,
including but not limited to, all indebtedness of Borrower to
Bank arising in connection with the Note or any other
instrument or documentation of indebtedness of Bank, whether
now existing or hereafter incurred, matured or unmatured,
direct or contingent, joint or several, including any
extensions, modifications, renewals thereof and substitutions
therefor;
(B) To repay to the Bank all amounts advanced by the
Bank hereunder or otherwise on behalf of the Borrower,
including, but without limitation, advances for principal or
interest payments to prior secured parties, or lienors, or for
taxes, levies, insurance, rent, repairs to or maintenance or
storage of any of the Collateral; and
(C) To reimburse the Bank, on demand, for all of the
Bank's expenses and costs, including the reasonable fees and
expenses of its counsel, in connection with the preparation,
administration, amendment, modification, or enforcement of
this Agreement and the documents required hereunder,
including, without limitation, any proceeding brought or
threatened to enforce payment of any of the obligations
referred to in the foregoing paragraphs (A) and (B).
1.16 "Permitted Liens" means:
(A) Liens for taxes, assessments, or similar charges,
incurred in the ordinary course of business that are not yet
due and payable;
(B) Pledges or deposits made in the ordinary course of
business to secure payment or workmen's compensation, or to
participate in any fund in connection with workmen's
compensation, unemployment insurance, old-age pensions or
other social security programs;
(C) Liens of mechanics, materialmen, warehousemen,
carriers, or other like liens, securing obligations incurred
in the ordinary course of business that are not yet due and
payable;
(D) Good faith pledges or deposits made in the ordinary
course of business to secure performance of bids, tenders,
Contracts (other than for the repayment of borrowed money) or
leases, not in excess of ten percent (10%) of the aggregate
amount due thereunder, or to secure statutory obligations, or
surety, appeal, indemnity, performance or other similar bonds
required in the ordinary course of business;
(E) Encumbrances consisting of zoning restrictions,
easements or other restrictions on the use of real property,
none of which materially impairs the use of such property by
the Borrower in the operation of its business, and none of
which is violated in any material respect by existing or
proposed structures or land use;
(F) Liens in favor of the Bank;
(G) The existing lien in favor of Xxxxx Fargo Bank,
N.A., relating to a Security Agreement dated as of July 5,
1995 between Xxxxx Fargo Bank and Borrower;
(H) Purchase money security interest granted to vendors
or purchase money lenders to secure the purchase price of
assets;
(I) Such other security interests, liens or encumbrances
as Bank may, from time-to-time, approve in writing;
(J) The following, if the validity or amount thereof is
being contested in good faith by appropriate and lawful
proceedings, so long as levy and execution thereon have been
stayed and continued to be stayed and they do not, in the
aggregate, materially detract from the value of the property
of the Borrower, or materially impair the use thereof n the
operation of its business:
(1) Claims or liens for taxes, assessments or
charges due and payable and subject to interest or
penalty;
(2) Claims, liens and encumbrances upon, and
defects of title to, real or personal property, including
any attachment of personal or real property or other
legal process prior to adjudication of a dispute on the
merits;
(3) Claims or liens of mechanics, materialmen,
warehousemen, carriers, or other like liens; and
(4) Adverse judgments on appeal.
1.17 "Person" means any individual, corporation, partnership,
association, joint stock company, trust, unincorporated
organization, joint venture, court or government or political
subdivision or agency thereof.
1.18 "Personal Property Collateral" means all of the right,
title and interest of Borrower and of any subsidiary of the
Borrower, wherever located, whether now owned or hereafter
acquired, in and to all Accounts, Chattel Paper, Contracts,
Contract Rights, Documents, General Intangibles, Instruments,
Inventory, right as seller of goods and rights to returned or
repossessed goods and all proceeds, products, accessions, additions
and substitutions of, to and for all of the foregoing.
1.19 "Prime Rate" means the Bank's announced rate of interest
used as a reference point from which it may calculate the cost of
credit to customers. It is subject to change from time to time.
The Bank may make loans bearing interest above, at, or below its
prime rate.
SECTION II. THE LOAN.
2.01 Disbursement of the Loan. The Bank will disburse the
loan upon completion of such documents and action as is reasonably
required by the Bank.
2.02 General Terms. Subject to the terms hereof, the Bank
will lend the Borrower, from time to time until the Loan
Termination Date, such sums as the Borrower may request by not less
than two (2) business days' notice to the Bank, but which shall not
exceed, in the aggregate principal amount at any one time
outstanding, Six Million Dollars ($6,000,000.00) (the "Loan
Commitment"). The Borrower may borrow, repay without penalty or
premium and reborrow hereunder, from the date of this Agreement
until the Loan Termination Date.
2.03 The Note. The Loan Commitment shall be evidenced by a
revolving note, maturing on the Loan Termination Date, in the form
attached hereto as Exhibit "A".
2.04 Interest Rate and Payments of Interest. Interest shall
be paid as follows:
(1) Interest on the principal balance of the Loan, from
time to time outstanding, will be payable at the rate equal to
two (2.0) percent per annum above Bank's Prime rate in effect
from time to time, hereafter called the "Rate"). Each time the
Prime Rate shall change, the Rate shall change
contemporaneously with such change in the Prime Rate.
(2) Interest shall be calculated on the basis of a 360-day year,
counting the actual number of days elapsed, and
shall be payable monthly on the first day of each calendar
month commencing February 1, 1996.
If, at any time, the Rate shall be deemed by any competent
court of law, governmental agency or tribunal to exceed the maximum
rate of interest permitted by any applicable Laws, then, for such
time as the Rate would be deemed excessive, its application shall
be suspended and there shall be charged instead the maximum rate of
interest permissible under such Laws.
2.05 Payments to the Bank. All sums payable to the Bank
hereunder shall be paid directly to the Bank in immediately
available funds. The Bank shall for the convenience of the
Borrower, send the Borrower statements of all amounts due
hereunder, which statements shall be considered correct and
conclusively binding on the Borrower unless the Borrower notifies
the Bank to the contrary within thirty (30) days of its receipt of
any statement which it deems to be incorrect. Any omission of the
Bank to send such periodic statements to Borrower shall not relieve
Borrower from its obligation to make payment as otherwise provided
herein. Alternatively for the convenience of the Borrower, the
Bank may charge against any deposit account of the Borrower all or
any part of any amount due hereunder.
2.06 Commitment Fee. A non-refundable commitment fee of
Thirty Thousand Dollars ($30,000.00) shall be paid by the borrower
to the Bank upon execution of this Agreement.
SECTION III. CONDITIONS PRECEDENT.
The obligation of the Bank to make the Loans hereunder is
subject to the following conditions precedent:
3.01 Documents. The performance by the Bank hereunder and its
obligation to extend or continue credit and make Loans to Borrower
is in all events subject to (A) the continuing truth and accuracy
of Borrower's representations and warranties set forth in this
Agreement, (B) the full and timely performance of all of Borrower's
covenants and obligations theretofore to be performed hereunder,
(C) the due execution and delivery of this Agreement, the Note and
the Collateral Documents, (D) the due recordation and timely filing
of the Collateral Documents as necessary, (E) the non-occurrence of
any Event of Default, and (F) the receipt by the Bank of all
reasonably requested fees, instruments, documents and materials in
form and substance satisfactory to the Bank.
SECTION IV. SECURITY.
4.01 Personal Property Collateral Security Interest. The
Borrower does hereby transfer, assign and, as appropriate, pledge
to the Bank all of its right, title and interest in and to, and
grants the Bank a lien and security interest in, the Personal
Property Collateral as collateral security for performance and
payment of the Obligations, together with all replacements
therefor, accessions thereto and proceeds and products thereof.
4.02 Priority of Liens. The liens and security interests
described in Section 4.01 are and shall be, at all times, first and
prior liens and security interests except for Permitted Liens. The
lien in the Personal Property Collateral in favor of Xxxxx Fargo
Bank, N.A. by virtue of its security agreement dated July 5, 1995
with Borrower is a Permitted Lien.
4.03 Financing Statements and Other Acts to Perfect.
(A) The Borrower will:
(1) Execute such Financing Statements (including
amendments thereto and continuation statements thereof)
in form satisfactory to the Bank as the Bank may specify;
(2) Pay or reimburse the Bank for all costs of
filing or recording the financing statements and other
documents in such public offices as the Bank may
designate;
(3) Take such other steps as the Bank may direct,
including the noting of the Bank's lien in the Collateral
on records thereof and on any certificates of title
therefor and delivering to the Bank possession of certain
items of the Collateral (including documents of title and
other instruments), all as required to perfect the Bank's
security interest and lien in the Collateral.
(B) In addition to the foregoing, and not in limitation
thereof;
(1) A carbon, photographic or other reproduction of
this Agreement shall be sufficient as a Financing
Statement and may be filed in any appropriate office in
lieu thereof; and
(2) To the extent lawful, the Borrower hereby
appoints the Bank as its attorney-in-fact (without
requiring the Bank to act as such) to execute any
Financing Statement in the name of the Borrower, and to
perform all other acts that the Bank deems appropriate to
perfect and continue the security interest and lien of
the Bank in, and to protect and preserve the Collateral.
SECTION V. REPRESENTATIONS AND WARRANTIES.
5.01 Original Representations and Warranties. To induce the
Bank to enter into this Agreement, the borrower represents and
warrants to the Bank as follows:
(A) Borrower is a corporation duly organized and validly
existing and is in good standing under the Laws of the states
in which it is doing business; it has the lawful power to own
its properties and to engage in the business it conducts, and
is duly qualified and in good standing as a foreign
corporation in the jurisdictions wherein the nature of the
business transacted by it or property owned by it makes such
qualification necessary for the conduct of such business or
the availability of rights and remedies.
(B) The Borrower is not in default with respect to any
of its existing Indebtedness, and the making and performance
of this Agreement, the Note and the Collateral Documents will
not (immediately, with the passage of time, the giving of
notice, or any combination of the foregoing):
(1) Violate the charter or bylaw provisions of the
Borrower, or violate the Laws or result in a default
under any contract, agreement, or instrument to which the
Borrower is a party or by which the Borrower or its
property is bound; or
(2) Result in the creation or imposition of any
security interest in, or lien or encumbrance upon, any of
the assets of the Borrower expect in favor of the Bank
and except for Permitted Liens:
(C) The Borrower has the power and authority to enter
into and perform this Agreement, the Note, and the Collateral
Documents, and to incur the obligations herein and therein
provided for, and has taken all corporate or other action
necessary to authorize the execution, delivery and performance
of this Agreement, the Note, and the Collateral Documents;
(D) This Agreement and the Collateral Documents are, and
the Note when delivered will be, valid, binding and
enforceable in accordance with their respective terms;
(E) The Borrower and its subsidiaries have good and
marketable title to all of their respective assets, subject to
no security interest, encumbrance or lien, or the claim of any
third person except for Permitted Liens;
(F) The Financial Statements, including any schedules
and notes pertaining thereto, have been prepared in accordance
with generally accepted accounting principles consistently
applied, and fully and fairly present the financial condition
of the Borrower at the dates thereof and the results of
operations for the periods covered thereby, and there have
been no material adverse changes in the consolidated financial
condition or business of the Borrower hereof.
(G) The Borrower does not know and has no reasonable
ground to know of any basis for the assertion against it as of
the date hereof, of any material Indebtedness of any nature
not fully reflected and reserved against in the Financial
Statements;
(H) Except as otherwise permitted herein, the Borrower
has filed all federal, state and local tax returns and other
reports it is required by Laws to file prior to the date
hereof and which are material to the conduct of its respective
businesses, has paid or caused to be paid all taxes,
assessments and other governmental charges that are due and
payable prior to the date hereof, and has made adequate
provision for the payment of such taxes, assessments or other
charges accruing but not yet payable; the Borrower has no
knowledge of any deficiency or additional assessment in a
materially important amount in connection with any taxes,
assessments or charges not provided for on its books;
(I) Except as otherwise has been disclosed by Borrower,
or except to the extent that the failure to comply would not
materially interfere with the conduct of the business of the
Borrower, the Borrower has complied with all applicable Laws
with respect to: (1) any restrictions, specifications, or
other requirements pertaining to products that the Borrower
sells or to the services it performs; (2) the conduct of its
business; and (3) the use, maintenance, and operation of the
real and personal properties owned or leased by it in the
conduct of its business;
(J) No representation or warranty by the Borrower
contained herein or in any certificate or other document
furnished by the Borrower pursuant hereto contains any untrue
statement of material fact or omits to state a material fact
necessary to make such representation or warranty not
misleading in light of the circumstances under which it was
made.
(K) Each consent, approval or authorization of, or
filing, registration or qualification with, any Person
required to be obtained or effected by the Borrower or its
subsidiaries in connection with the execution and delivery of
this Agreement, the Note, and the Collateral Documents or the
undertaking or performance of any obligation hereunder or
thereunder has been duly obtained or effected;
(L) Except as has been fully disclosed to the Bank in
writing, the Borrower has no material lease, contract or
commitment of any kind (such as employment agreements;
collective bargaining agreements; powers of attorney;
distribution arrangements; patent license agreements;
contracts for future purchase or delivery of goods or
rendering of services; bonus, pension and retirement plans; or
accrued vacation pay, insurance and welfare agreements); all
parties (including the Borrower) to all such material leases,
contracts and other commitments to which the Borrower is a
party have complied with the provisions of such leases,
contracts and other commitments; no party is in default under
any thereof and no event has occurred which, but for the
giving of notice or the passage of time, or both, would
constitute a default;
5.02 Survival. All of the representations and warranties set
forth in Paragraph 5.01 shall survive until all Obligations are
satisfied in full.
SECTION VI. THE BORROWER'S COVENANTS.
The Borrower does hereby covenant and agree with the Bank
that, so long as any of the Obligations remain unsatisfied, it will
comply with the following covenants:
6.01 Affirmative Covenants.
(A) The Borrower will maintain all Collateral in good
condition and repair (normal wear and tear excepted), and will
pay and discharge or cause to be paid and discharged when due,
the cost of material repairs to or maintenance of the same.
The Borrower hereby agrees that, in the event it fails to
perform its obligations under this Subsection, the Bank may
undertake such maintenance or make such payments and be
reimbursed by the Borrower therefor.
(B) The Borrower will pay or cause to be paid when due,
all material taxes, assessments and charges or levies imposed
upon it or on any of its property, including the Collateral,
or which it is required to withhold and pay over, except where
contested in good faith by appropriate proceedings with
adequate reserves therefor having been set aside on its books.
But the Borrower shall pay or cause to be paid all such taxes,
assessments, charges or levies forthwith whenever foreclosure
on any lien that attaches (or security therefor) appears
imminent.
(C) The Borrower will, when requested so to do, make
available for inspection by duly authorized representatives of
the Bank of any of its books and records, and will furnish the
Bank any information regarding its business affairs and
financial condition within a reasonable time after written
request therefor.
(D) The Borrower will take all necessary steps to
preserve its corporate existence and franchises and comply
with all present and future Laws, applicable to it in the
operation of its respective businesses, and all material
agreements to which it is subject.
(E) The Borrower will collect its Accounts and sell its
Inventory only in the ordinary course of business.
(F) The Borrower will keep accurate and complete records
of its Accounts and Inventory, consistent with generally
accepted accounting principles.
(G) The Borrower will: (1) give notice to the Bank
within ten (10) days of: (a) any litigation or proceeding in
which it is a party if an adverse decision therein would
require it to pay (in addition to the proceeds of any
insurance therefore) more than Fifty Thousand Dollars
($50,000.00) or deliver assets the value of which exceeds such
sum (in excess of any insurance proceeds which may be payable
in connection with such claim); and (b) the institution of any
other suit or proceeding involving it that might materially
and adversely affect its operations, financial condition,
property or business; and (2) give prior notice to the Bank of
any grant, sale, conveyance or assignment which it is
anticipated, will have the effect of creating any lien,
encumbrance or security interest in favor of any entity
(excepting the Permitted Liens), such notice to include a
description and valuation of the assets which it is proposed,
shall be subject to such lien, encumbrance or security
interest. Borrower will also provide the Bank with quarterly
written reports respecting the progress and status of any
proceedings for which a notice required hereby has been given.
(H) The Borrower will pay when due (or within applicable
grace periods) all Indebtedness due third Persons, except when
the amount thereof is being contested in good faith by
appropriate proceedings and with adequate reserves therefor
being set aside on the books of the Borrower. If default be
made by the Borrower in the payment of any principal (or
installment thereof) of, or interest on, any such
Indebtedness, the Bank shall have the right, in its
discretion, to pay such interest or principal for the account
of the Borrower and be reimbursed by the Borrower therefor.
(I) The Borrower will notify the Bank immediately if it
becomes aware of the occurrence of any Event of Default or of
any fact, condition or event that only with the giving of
notice or passage of time or both, could become an Event of
Default, or of the failure of the Borrower to observe any of
its respective undertakings hereunder.
(J) The Borrower will notify the Bank thirty (30) days
in advance of any change in the location of any of its
principal places of business or of the establishment of any
new, or the discontinuance of any existing principal places of
business.
(K) The Borrower will: (1) fund all its Defined Benefit
Pension Plans in accordance with no less than the minimum
funding standards and (2) promptly advise the Bank of the
occurrence of any Reportable Event or Prohibited Transaction
with respect to any such Plan.
(L) The Borrower will, when requested so to do, provide
to duly authorized representatives of the Bank entry and
access to any of its offices and/or facilities for purposes of
inspection of the Collateral or any of it and for purposes of
physical inspection, observation and review of the conduct of
the businesses of the Borrower. Borrower will fully cooperate
in any such inspections, observing and reviewing.
(M) The Borrower agrees to carry on and maintain the
businesses of Borrower without fundamental or substantial
changes in the nature thereof or in the structure of the
financial, operational, marketing or management aspects
thereof.
6.02 Negative Covenants.
(A) The Borrower will not change its name, enter into
any merger, consolidation, reorganization or recapitalization,
or reclassify its capital stock.
(B) The Borrower will not sell, transfer, lease or
otherwise dispose of all or (except in the ordinary course of
business) any part of its right, title and interest in any
assets or property, including the Collateral, unless all of
the proceeds therefrom are applied to reduction and payment of
the Obligations.
(C) The Borrower will not, without the prior written
consent of the Bank, mortgage, pledge, grant or permit to
exist a material security interest in or lien upon any of its
assets, including the Collateral, of any kind, now owned or
hereafter acquired except for Permitted Liens.
(D) The Borrower will not, without the prior written
consent of the Bank, become liable, directly or indirectly, as
guarantor or otherwise, for any obligation of any other
Person, except for the endorsement of commercial paper for
deposit or collection in the ordinary course of business.
(E) The Borrower will not incur, create, assume, or
permit to exist any material Indebtedness except: (1) the
Loans; and (2) existing indebtedness previously disclosed to
Bank.
(F) The Borrower will not furnish the Bank any
certificate or other document that contains any untrue
statement of a material fact or that omits to state a material
fact necessary to make it not misleading in light of the
circumstances under which it is furnished.
(G) Borrower will not borrow more than the maximum sums
provided for hereunder under existing or future short-term
lines of credit, including the Obligations of Borrower under
this Agreement, excepting loans secured by Permitted Liens.
(H) Borrower will not, without the prior approval of the
Bank, enter into any transaction of merger or consolidation
except that: the Borrower may merge or consolidate into or
with any wholly owned subsidiary provided that the Borrower
shall be the surviving corporation and providing that
immediately following such merger or consolidation, the
Borrower shall be in compliance with the terms and covenants
of this Agreement.
(I) Without the written consent of the Bank, Borrower
will not materially expand its business operation, or incur in
any fiscal year any capital expenditures for improvements in
excess of presently budgeted capital expenditures or acquire
other assets or entities (including leasehold interests
containing an option to purchase or leases treated as
financing devices). The Borrower will not, without the prior
written consent of the Bank, engage in any business
substantially different from or unrelated to, or change or
modify in any material respect the character or conduct of,
the business of Borrower as of the date hereof.
(N) Borrower will not further pledge, transfer, sell,
encumber, assign or grant liens or security interests in their
respective assets except Permitted Liens.
(O) Borrower shall not pay any bonuses under Borrower's
Incentive Bonus Program or other similar plan based on 1995
performance until after this credit facility has expired and
been fully paid.
SECTION VII. DEFAULT.
7.01 Events of Default. The occurrence of any one or more of
the following events shall constitute an Event of Default
hereunder:
(A) The Borrower shall fail to pay when due any
installment of principal, interest, fee or other charge.
(B) The Borrower shall fail to pay, and such failure
shall result in acceleration of any material indebtedness due
any third Persons and such failure shall continue beyond any
applicable grace period, or the Borrower shall suffer to exist
any other event of default under any material agreement
binding the Borrower or any of its subsidiares.
(C) Any financial statement, representation, warranty or
certificate made or furnished by the Borrower to the Bank in
connection with this Agreement, or as inducement to the Bank
to enter into this Agreement, or in any separate statement or
document to be delivered hereunder to the Bank, shall be
materially false, incorrect, or incomplete when made.
(D) The Borrower shall admit in writing its inability to
pay its debts as they mature, or shall make an assignment for
the benefit of its or any of its creditors.
(E) Proceedings in bankruptcy, or for reorganization of
the Borrower or for the readjustment of any of their
respective debts, under the Bankruptcy Act, as amended, or any
part thereof, or under any other Laws, whether state or
federal, for the relief of debtors, now or hereafter existing,
shall be commenced by the Borrower or shall be commenced
against the Borrower and shall not be discharged within thirty
(30) days of their commencement.
(F) A receiver or trustee shall be appointed for the
Borrower or for any substantial part of their respective
assets, or any proceedings shall be instituted for the
dissolution or the full or partial liquidation of the Borrower
and such receiver or trustee shall not be discharged within
thirty (30) days of his appointment, or such proceedings shall
not be discharged within thirty (30) days of their
commencement, or the Borrower shall discontinue business or
materially change the nature of its business.
(G) The Borrower shall suffer final judgments for
payment of money aggregating in excess of One Million Dollars
($1,000,000.00) and shall not discharge the same within a
period of thirty (30) days unless, pending further
proceedings, execution has not been commenced or if commenced
has been effectively stayed or bonded against.
(H) A judgment creditor of the Borrower shall obtain
possession of any of the Collateral by any means, including,
but without limitation, levy, distraint, replevin or self-help.
7.02 Acceleration. Immediately and without notice upon the
occurrence of an Event of Default all Obligations, whether
hereunder or otherwise, shall immediately become due and payable
without further action of any kind.
7.03 Remedies. Upon the occurrence of an Event of Default
and/or after any acceleration, the Bank shall have, in addition to
the rights and remedies given it by this Agreement, the Note and
the Collateral Documents, all those rights and remedies allowed by
all applicable Laws, including but without limitation, the Uniform
Commercial Code as enacted in any jurisdiction in which any
Collateral may be located. Without limiting the generality of the
foregoing, the Bank may immediately, without demand for performance
and without other notice (except as specifically required by this
Agreement or the Collateral Documents) or demand whatsoever to the
Borrower, all of which are hereby expressly waived, and without
advertisement, sell at public or private sale or otherwise realize
upon, in Ogden, Utah or elsewhere, the shole or, from time to time,
any part of the Collateral, or any interest which the Borrower may
have therein. After deducting from the proceeds of sale or other
disposition of the Collateral all expenses (including all
reasonable expenses for leagal services), the Bank shall apply such
proceeds toward the satisfaction of the Obligations. Any remainder
of the proceeds after satisfaction in full of the Obligations shall
be distributed as required by applicable laws. Notice of any sale
or other disposition shall be given to the Borrower at least five
(5) days before the time of any intended public sale or of the time
after which any intended private sale or other disposition of the
Collateral is to be made, which the Borrower hereby agrees shall be
reasonable notice of such sale or other disposition. The Borrower
agrees to assemble, or to cause to be assembled, at its own
expense, the Collateral at such place or places as the Bank shall
designate. At any such sale or other disposition, the Bank may, to
the extent permissible under applicable Laws, purchase the whole or
any part of the Collateral, free from any right of redemption on
the part of the Borrower, which right is hereby waived and
released. Without limiting the generality of any of the rights and
remedies conferred upon the Bank under this paragraph, the Bank
may, to the full extent permitted by applicable Laws:
(A) Enter upon the premises of the Borrower and take
immediate possession of the Collateral, either personally or
by means of a receiver appointed by a court of competent
jurisdiction, using all necessary force to do so;
(B) At the Bank's option, use, operate, manage and
control the Collateral in any lawful manner;
(C) Collect and receive all rents, income, revenue,
earnings, issues and profits therefrom and give notice of the
assignment thereof to any account debtors; and
(D) Maintain, repair, renovate, alter or remove the
Collateral as the Bank may determine in its sole discretion.
SECTION VIII. MISCELLANEOUS.
8.01 Construction. The provisions of this Agreement shall be
in addition to those of any pledge or security agreement, note or
other evidence of liability held by the Bank, all of which shall be
construed as complementary to each other. Nothing herein contained
shall prevent the Bank from enforcing any or all other notes,
pledge or security agreements in accordance with their respective
terms.
8.02 Further Assurance. From time to time, the Borrower will
execute and deliver to the Bank such additional documents and will
provide such additional information as the Bank may reasonably
require to carry out the terms of this Agreement and be informed of
the Borrower's status and affairs. At the request of the Bank,
Borrower will deliver to the Bank any chattel paper and instruments
evidencing the Accounts assigned to the Bank as Collateral
hereunder, and the Borrower will execute and deliver assignments of
any security interests securing such Accounts.
8.03 Enforcement and Waiver by the Bank. The Bank shall have
the right at all times to enforce the provisions of this Agreement,
the Note and the Collateral Documents in strict accordance with the
terms hereof and thereof, notwithstanding any conduct or custom on
the part of the Bank in refraining from so doing at any time or
times. The failure of the Bank at any time or times to enforce
rights under such provisions, strictly in accordance with the same,
shall not be construed as having created a custom in any way or
manner contrary to specific provisions of this Agreement or as
having in any way or manner modified or waived the same. All
rights and remedies of the Bank are cumulative and concurrent and
the exercise of one right or remedy shall not be deemed a waiver or
release of any other right or remedy.
8.04 Expenses of the Bank. The Borrower will, on demand,
reimburse the Bank for all expenses, including the reasonable fees
and expenses of legal counsel for the Bank and its participants,
incurred by the Bank in connection with the administration,
amendment, modification, assignment or enforcement of this
Agreement and all related documents and the collection or attempted
collection of the Note, whether any default is ultimately cured or
whether the Bank is obligated to pursue remedies hereunder
including such fees and expenses incurred before legal action,
during the pendency of any such legal action and continuing to all
such fees and expenses in connection with any appeal to higher
courts arising out of transactions associated herewith. The
obligations of this section shall survive the making of this
Agreement, the Notes and the Collateral Documents, including any
documents or amendments subsequently executed.
8.05 Notices. Any notices or consents required or permitted
by this Agreement shall be in writing and shall be deemed delivered
if delivered in person or if sent by certified mail, postage
prepaid, return receipt requested, telegraph or telex, as follows,
unless such address is changed by written notice hereunder:
(A) If the Borrower:
IOMEGA Corporation
0000 Xxxx Xxxxxx Xxx
Xxx, Xxxx 00000
Attn: _________________________
(B) If to the Bank:
First Security Bank of Utah, N.A.
0000 Xxxxxxxxxx Xxxx.
Xxxxx, Xxxx 00000
Attention: Xxxx Xxxxx
8.06 Wavier and Release by the Borrower. To the maximum
extent permitted by applicable Laws, the Borrower:
(A) Waives: (1) protest of all commercial paper at any
time held by the Bank on which the Borrower is any way liable;
and (2) notice and opportunity to be heard, after acceleration
before exercise by the Bank of the remedies of self-help, set-off, or of
other summary procedures permitted by any
applicable Laws or by any agreement with the Borrower, and,
except where required hereby or by any applicable Laws, notice
of any other action taken by the Bank; and
(B) Releases the Bank and its officers, attorneys,
agents and employees from all claims for loss or damage caused
by any action or omission on the part of it except willful
misconduct.
8.07 Direct Notification and Collection. Upon the occurrence
of an Event of Default, the Bank shall have the authority, but
shall not be obligated to: (I) notify any or all Account Debtors or
any lessees or sublessees of the Collateral of the existence of the
Bank's security interest and to direct such Account Debtors to pay
or remit all sums due or to become due directly to the Bank or to
its nominee or nominees; (ii) in the name of the Borrower or
otherwise, to demand, collect, receive and receipt for, compound,
compromise, settle and give acquittance for, and in respect of any
or all of the Collateral, including all Accounts; (iii) require
Borrower to deposit any and all proceeds from the Accounts on a
daily basis in a special account or accounts with the Bank making
an accounting to the Bank of all such proceeds collected; (iv)
cause Borrower to deliver to the Bank such books, records,
documents and instruments in Borrower's possession as may relate to
the Collateral and as may be necessary to facilitate collections of
accounts, leases and subleases or the enforcement of the
obligations of Account Debtors and lessees and sublessees including
but not limited to correspondence, records, books and other
instruments relating thereto; (v) take any action which the Bank
may deem necessary or desirable in order to realize on the
Collateral, including without limitation, the power to perform any
contract, to indorse in the name of Borrower any checks, drafts,
notes or other instruments or documents received in payment of or
on account of the Collateral. Borrower will use diligence in the
enforcement and collection of all accounts, leases and subleases
and proceeds thereof until receipt of notice from the Bank to
notify all Account Debtors, lessees or sublessees of the existence
of its security interest. Borrower will hold all of the proceeds
of such collections in trust for the Bank and will not commingle
the same with any other funds or property of the Borrower and will
account to the Bank for the collection of all proceeds of the
Collateral. The Bank's authorized agents shall (should the Bank
deem it necessary or advisable) at all reasonable times have the
right to be present at Borrower's place of business to receive all
communications and remittances relating to the Collateral.
Notwithstanding any election by the Bank to effect such direct
collections of accounts, leases or subleases, Borrower agrees to
pay all expenses and costs of such collections including reasonable
attorneys' fees incurred by the Bank. The Bank shall have the
right but not the obligation to perform any obligations of Borrower
on Accounts or any leases or subleases and the same shall not
constitute an assumption of such obligations by the Bank unless the
Bank shall affirmatively and expressly so elect.
8.08 Applicable Law. The substantive Laws of the State of
Utah shall govern the construction of this Agreement and the rights
and remedies of the parties hereto.
8.09 Binding Effect, Assignment and Entire Agreement. This
Agreement shall inure to the benefit of, and shall be binding upon,
the respective successors and permitted assigns of the parties
hereto. The Borrower has no right to assign any of its rights or
obligations hereunder without the prior written consent of the
Bank. This Agreement, and the documents executed and delivered
pursuant hereto, constitute the entire agreement between the
parties, and may be amended only by a writing signed on behalf of
each party.
8.10 Severability. If any provision of this Agreement shall
be held invalid under any applicable Laws, such invalidity shall
not affect any other provision of this Agreement that can be given
effect without the invalid provision, and, to this end, the
provisions hereof are severable.
8.11 Counterparts. This Agreement may be executed in any
number of counterparts, each of which shall be deemed to be an
original, but all of which together shall constitute but one and
the same instrument.
IN WITNESS WHEREOF, the parties hereto have duly executed this
Agreement as of the day and year first above written.
BORROWER
IOMEGA CORPORATION
By: /s/ Xxxxx X. Xxxxxx
Its: Assistant Treasurer
BANK
FIRST SECURITY BANK
By: /s/ Xxxx Xxxxx
Its: Vice President
EXHIBIT "A"
All of the right, title and interest of Debtor and of any
subsidiary of the Debtor, wherever located, whether now owned or
hereafter acquired, in and to all Accounts, Chattel Paper,
Contracts, Contract Rights, Documents, General Intangibles,
Instruments, Inventory, right as seller of goods and rights to
returned or repossessed goods and all proceeds, products,
accessions, additions and substitutions of, to and for all of the
foregoing.
