Exhibit 10.4
SECURITY AGREEMENT
THE OBLIGATIONS, RIGHTS, REMEDIES AND SECURITY INTERESTS EVIDENCED BY THIS
SECURITY AGREEMENT ARE SUBORDINATED TO THE PRIOR PAYMENT IN FULL OF THE HHCF
OBLIGATIONS (AS DEFINED IN THE SUBORDINATION AGREEMENT HEREINAFTER REFERRED TO)
PURSUANT TO, AND TO THE EXTENT PROVIDED IN, THAT CERTAIN SUBORDINATION AGREEMENT
DATED AS OF AUGUST 26, 2002 AMONG XXXXXXX XXXXX, XXXXXX HEALTHCARE FINANCE, INC.
AND THE BORROWERS NAMED THEREIN.
SECURITY AGREEMENT, dated August 26, 2002, by and between Xxxxxxx Xxxxx
("Secured Party") and Star Multi Care Services, Inc., Amserv Healthcare of New
Jersey, Inc., Amserv Healthcare of Ohio, Inc. and EFCC Acquisition Corp.
(collectively referred to herein as the "Debtors").
W I T N E S S E T H:
--------------------
WHEREAS, Debtors has borrowed money from the Secured Party in the original
sum of Fifty Thousand Dollars ($50,000), pursuant to the promissory note of even
date, by and between the Debtors and Secured Party (said amount hereinafter
referred to as the "Debt"); and NOW, THEREFORE, in consideration of the mutual
promises herein contained, the parties hereby agree as follows:
1. Security Interest. To secure the payment of the Debt and all sums due
in connection therewith (such payments being hereinafter referred to
collectively as the "Obligations"), the Debtors hereby grants, conveys, assigns
and transfers to the Secured Party a security interest in and to all of the
Debtors' assets, including but not limited to all accounts receivable at any
time owned by or to which the Debtors are entitled (the "Collateral") subject
and subordinate only to that prior lien held by Xxxxxx Healthcare Financial,
Inc. The Debtors hereby authorize the Secured Party to file appropriate
financing statements as required under any applicable Uniform Commercial Code or
similar provisions of applicable U.S. Federal law in order to perfect and
maintain the security interest herein granted and, in any jurisdiction or with
any agency where such action is authorized by law, to effect such filings
without Debtors' signature affixed thereto. The parties also acknowledge that
additional loans and advances may be made by the Secured Party to the Debtors
and these additional loans and advances shall be incorporated into the term Debt
and shall be secured under this Security Agreement.
2. Default.
2.1 The term "Event of Default", as used herein, shall mean the
occurrence and continuation of any one or more of the following events:
(a) The failure of the Debtors promptly and faithfully to pay,
when due, any of the Obligations, such failure having continued for a period of
five (5) days after written notice thereof; or
(b) The commission by the Debtors, or the occurrence, of any
of the following acts:
(i) admitting in writing its inability to pay its debts
generally as they become due;
(ii) filing or acquiescing in the filing of a petition in
bankruptcy, or filing or acquiescing in the filing of a petition to take
advantage of any insolvency act;
(iii) making an assignment for the benefit of its
creditors;
(v) on a petition in bankruptcy filed against it, being
adjudicated a bankrupt;
(vi) filing a petition or answer seeking reorganization or
arrangement or other aid or relief under any bankruptcy or insolvency laws or
any other law for the relief of debtors; or
(c) The entry by a court of competent jurisdiction of any
order, judgment or decree appointing, without the consent of the Debtors, as the
case may be, a receiver for the Debtors of for all or substantially all of its
property, or approving a petition filed against its seeking reorganization or
arrangement of the Debtors under any bankruptcy or insolvency laws or any law
for the relief of debtors, which order, judgment or decree shall not be vacated
or set aside or stayed within sixty (60) days from the date of entry thereof; or
(d) The assumption by any court of competent jurisdiction of
custody or control of the Debtors or of all or substantially all of its property
under the provisions of any law for the relief of debtors, which custody or
control shall not be terminated or stayed within sixty (60) days from the date
of assumption of such custody or control.
2.2 Upon the occurrence of an Event of Default, the Secured Party
shall have, in addition to all the rights and remedies of a secured party under
the Uniform Commercial Code, the right to sell, dispose of or hold any or all of
the Collateral as the Secured Party in its sole discretion shall decide. The
Secured Party shall give the Debtors and the prior lienor reasonable notice of
the time and place of any public or private sale or other intended disposition
of all or any portion of the Collateral. The Debtors agree that the requirements
of reasonable notice shall be met if notice is mailed by certified or registered
mail, return receipt requested, to the Debtors at its address set forth below,
written not less than ten (10) business days prior to the sale or other
disposition. Expenses of retaking, holding, preparing for sale, selling or the
like shall be paid by the Debtors. Subject to the provisions of Section 2.3
hereof, Secured Party's rights and remedies, whether pursuant hereto or pursuant
to the Uniform Commercial Code or any other statute or rule of law conferring
rights similar to those conferred by the Uniform Commercial Code, shall be
cumulative and not alternative.
2.3 The Secured Party, by act, delay, omission or otherwise, shall
not be deemed to have waived any rights or remedies, or both, hereunder unless
such waiver is in writing signed by either Secured Party and only to the extent
therein set forth. A waiver by the Secured Party of any right or remedy, or
both, on any one occasion shall not be construed as a bar to or waiver of any
such right or remedy, or both, to which the Secured Party would otherwise be
entitled on any future occasion.
3. Notices. Except as otherwise provided herein, notices or other
communications to either party hereunder shall be in writing and shall be
conclusively deemed to have been duly and properly given on the date such
notices or other communications are received, if delivered personally, or the
date of postmark, if mailed by registered or certified mail, return receipt
requested, postage prepaid and addressed as follows:
If to Secured Party: Xxxxxxx Xxxxx
0000 Xxxxxxx Xxxxxx
Xxxxx 0000, Xxxxxxx
Xxx Xxxx 00000
If to the Debtors: Star Multi Care Services, Inc.
00 Xxxx Xxxxxxx Xxxx
Xxxxxxxxxx Xxxxxxx, XX 00000
If to the prior lienor: Xxxxxx Healthcare Finance, Inc.
0 Xxxxxxxxx Xxxxxx, Xxxxxx Xxxxx
Xxxxx Xxxxx, Xxxxxxxx 00000
Attention: Xxxxxxx Xxxxxxxxxx, Chief Counsel
Telephone: (000) 000-0000
Telecopier: (000) 000-0000
4. Termination of Agreement. The security interest created hereunder
shall terminate only when the Debtor have been fully satisfied the Obligations,
whether at maturity, by prepayment, or otherwise. At such time, the Secured
Party shall execute and deliver all such instruments and documents as the
Debtors shall reasonably request in confirmation of such termination.
5. Applicable Law and Jurisdiction. This Agreement shall be governed by
and interpreted under the laws of the State of New York without giving effect to
its principles of conflict of laws. Except in respect of an action commenced by
a third party in another jurisdiction, or any action which is required by nature
of the relief demanded to be maintained in the jurisdiction in which the
Collateral is located, Debtor and the Secured Party agree that any legal suit,
action or proceeding arising out of or relating to this Security Agreement must
be instituted in the appropriate State or Federal court in the State of New
York, and they hereby irrevocably submit to the jurisdiction of any such court.
6. Miscellaneous.
6.1 Successors. This Security Agreement shall insure to the
benefit of and shall be binding upon the respective successors, assigns and
legal representatives of the parties hereto.
6.2 Severability. No provision of this Agreement which may be
deemed unenforceable shall in any way invalidate any other provision hereof all
of which shall remain in full force and effect.
6.3 Captions. The captions used herein are inserted for
reference purposes only and shall not affect the interpretation or meaning of
this Security Agreement.
6.4 Counterparts. This Security Agreement may be executed in
one or more counterparts, each of which shall be deemed an original, but all of
which together shall constitute one and the same agreement.
6.5 Financing Statements. The Debtors shall, at the request of
Secured Party from time to time, execute for the benefit of Secured Party,
financing statements (or similar instruments) or extensions thereof in such form
as may be necessary to perfect or maintain and continue perfection of the
security interest in the Collateral in any or all pertinent jurisdictions,
provided the form and scope of such financing statements is reasonably
satisfactory to Debtor.
IN WITNESS WHEREOF, the Parties hereto have caused this Agreement to be executed
as of the 26th day of August 2002.
STAR MULTI CARE SERVICES, INC.
By:___________________________
Dated: August 26, 2002
AMSERV HEALTHCARE OF NEW JERSEY, INC.
By:___________________________
Dated: August 26, 2002
AMSERV HEALTHCARE OF OHIO, INC.
By:___________________________
Dated: Xxxxxx 00, 0000
XXXX ACQUISITION CORP.
By:___________________________
Dated: August 26, 2002
XXXXXXX XXXXX
BY:___________________________
Dated: August 26, 2002
