Exhibit 10.12

 

 

BORROWER:  RevCare, Inc.

 

 

 

GUARANTOR:

Orange County Professional
Services, Inc.

 

GUARANTY

 

To:                              BRIDGE BANK, N.A.

 

1.               The Guaranty.  For valuable consideration, the undersigned
(“Guarantor”) hereby unconditionally guarantees and promises to pay promptly to
Bridge Bank, N.A. (“Lender”), or order, in lawful money of the United States,
any and all Indebtedness of RevCare, Inc., a Nevada corporation (“Borrower”) to
Lender when due, whether at stated maturity, upon acceleration or otherwise, and
at all times thereafter.  The liability of Guarantor under this Guaranty is not
limited as to the principal amount of the Indebtedness guaranteed and includes,
without limitation, liability for all interest, fees, indemnities (including,
without limitation, hazardous waste indemnities), and other costs and expenses
relating to or arising out of the Indebtedness.  The liability of Guarantor is
continuing and relates to any Indebtedness, including that arising under
successive transactions which shall either continue the Indebtedness or from
time to time renew it after it has been satisfied.  This Guaranty is cumulative
and does not supersede any other outstanding guaranties, and the liability of
Guarantor under this Guaranty is exclusive of Guarantor’s liability under any
other guaranties signed by Guarantor.  If more than one individual or entity
sign this Guaranty, their obligations under this Guaranty shall be joint and
several.

 

2.               Definitions.  As used herein:

 

(a)          “Borrower” means the individual or the entity named in Paragraph 1
of this Guaranty and, if more than one, then any one or more of them.

 

(b)         “Guarantor” means the individual or the entity signing this Guaranty
and, if more than one, then any one or more of them, jointly and severally.

 

(c)          “Indebtedness” means any and all debts, liabilities, and
obligations of Borrower to Lender, now or hereafter existing, whether voluntary
or involuntary and however arising, whether direct or indirect or acquired by
Lender by assignment, succession, or otherwise, whether due or not due, absolute
or contingent, liquidated or unliquidated, determined or undetermined, held or
to be held by Lender for its own account or as agent for another or others,
whether Borrower may be liable individually or jointly with others, whether
recovery upon such debts, liabilities, and obligations may be or hereafter
become barred by any statute of limitations, and whether such debts,
liabilities, and obligations may be or hereafter become otherwise
unenforceable.  Indebtedness includes, without limitation, any and all
obligations of Borrower to Lender for reasonable attorneys’ fees and all other
costs and expenses incurred by Lender in the collection or enforcement of any
debts, liabilities, and obligations of Borrower to Lender.

 

3.               Obligations Independent.  The obligations hereunder are
independent of the obligations of Borrower or any other guarantor, and a
separate action or actions may be brought and prosecuted against Guarantor
whether action is brought against Borrower or any other guarantor or whether
Borrower or any other guarantor be joined in any such action or actions.  Anyone
executing this Guaranty shall be bound by its terms without regard to execution
by anyone else.

 

4.               Rights of Lender.  Guarantor authorizes Lender, without notice
or demand and without affecting its liability hereunder, from time to time to:
(a) renew, compromise, extend, accelerate, or otherwise change the time for
payment, or otherwise change the terms, of the Indebtedness or any part thereof,
including increase or decrease of the rate of interest thereon, or otherwise
change the terms of the Indebtedness; (b) receive and hold security for the
payment of this Guaranty or any Indebtedness and exchange, enforce, waive,
release, fail to perfect, sell, or otherwise dispose of any such security; (c)
apply such security and direct the order or manner of sale thereof as Lender in
its discretion may determine; and (d) release or substitute any Guarantor or any
one or more of any endorsers or other guarantors of any of the Indebtedness.

 

5.               Guaranty to be Absolute.  Guarantor agrees that until the
Indebtedness has been paid in full and any

 

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commitments of Lender or facilities provided by Lender with respect to the
Indebtedness have been terminated, Guarantor shall not be released by or because
of the taking, or failure to take, any action that might in any manner or to any
extent vary the risks of Guarantor under this Guaranty or that, but for this
paragraph, might discharge or otherwise reduce, limit, or modify Guarantor’s
obligations under this Guaranty.  Guarantor waives and surrenders any defense to
any liability under this Guaranty based upon any such action, including but not
limited to any action of Lender described in the immediately preceding paragraph
of this Guaranty.  It is the express intent of Guarantor that Guarantor’s
obligations under this Guaranty are and shall be absolute and unconditional.

 

6.               Guarantor’s Waivers of Certain Rights and Certain Defenses. 
Guarantor waives: (a) any right to require Lender to proceed against Borrower,
proceed against or exhaust any security for the Indebtedness, or pursue any
other remedy in Lender’s power whatsoever; (b) any defense arising by reason of
any disability or other defense of Borrower, or the cessation from any cause
whatsoever of the liability of Borrower; (c) any defense based on any claim that
Guarantor’s obligations exceed or are more burdensome than those of Borrower;
and (d) the benefit of any statute of limitations affecting Guarantor’s
liability hereunder.  No provision or waiver in this Guaranty shall be construed
as limiting the generality of any other waiver contained in this Guaranty.

 

7.               Waiver of Subrogation.  Until the Indebtedness has been paid in
full and any commitments of Lender or facilities provided by Lender with respect
to the Indebtedness have been terminated, Guarantor waives any right of
subrogation, reimbursement, indemnification, and contribution (contractual,
statutory, or otherwise) including, without limitation, any claim or right of
subrogation under the Bankruptcy Code (Title 11, United States Code) or any
successor statute, arising from the existence or performance of this Guaranty,
and Guarantor waives any right to enforce any remedy which Lender now has or may
hereafter have against Borrower, and waives any benefit of, and any right to
participate in, any security now or hereafter held by Lender.

 

8.               Waiver of Notices.  Guarantor waives all presentments, demands
for performance, notices of nonperformance, protests, notices of protest,
notices of dishonor, notices of intent to accelerate, notices of acceleration,
notices of any suit or any other action against Borrower or any other person,
any other notices to any party liable on the Indebtedness (including Guarantor),
notices of acceptance of this Guaranty, and notices of the existence, creation,
or incurring of new or additional Indebtedness.

 

9.               General Partner Liability and Waivers of Other Rights and
Defenses.

 

(a)          If Borrower is a partnership and Guarantor is a general partner of
that partnership, then Guarantor shall not be liable under this Guaranty for any
portion of the Indebtedness which is secured by real property; provided,
however, that Guarantor shall remain liable under partnership law for all the
Indebtedness.

 

(b)         Guarantor waives any rights and defenses that are or may become
available to Guarantor by reason of Sections 2787 to 2855, inclusive, of the
California Civil Code.

 

(c)          Guarantor waives all rights and defenses that Guarantor may have
because any of the Indebtedness is secured by real property.  This means, among
other things:  (i) Lender may collect from Guarantor without first foreclosing
on any real or personal property collateral pledged by Borrower; and (ii) if
Lender forecloses on any real property collateral pledged by Borrower:  (1) the
amount of the Indebtedness may be reduced only by the price for which that
collateral is sold at the foreclosure sale, even if the collateral is worth more
than the sale price, and (2) Lender may collect from Guarantor even if Lender,
by foreclosing on the real property collateral, has destroyed any right
Guarantor may have to collect from Borrower.  This is an unconditional and
irrevocable waiver of any rights and defenses Guarantor may have because any of
the Indebtedness is secured by real property.  These rights and defenses
include, but are not limited to, any rights or defenses based upon Section 580a,
580b, 580d, or 726 of the California Code of Civil Procedure.

 

(d)         Guarantor waives any right or defense it may have at law or equity,
including California Code of Civil Procedure Section 580a, to a fair market
value hearing or action to determine a deficiency judgment after a foreclosure.

 

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10.         Security.  To secure all of Guarantor’s obligations hereunder,
Guarantor assigns and grants to Lender pursuant to that certain Security
Agreement, dated of even date herewith between Guarantor and Lender, a security
interest in all moneys, securities, and other property of Guarantor, now or
hereafter in the possession of Guarantor, all deposit accounts of Guarantor
maintained with Lender, and all proceeds thereof.  Upon default or breach of any
of Guarantor’s obligations to Lender, Lender may apply any deposit account to
reduce the Indebtedness, and may foreclose any collateral as provided in the
Uniform Commercial Code and in any security agreements between Lender and
Guarantor.

 

11.         Subordination.  Any obligations of Borrower to Guarantor, now or
hereafter existing, including but not limited to any obligations to Guarantor as
subrogee of Lender or resulting from Guarantor’s performance under this
Guaranty, are hereby subordinated to the Indebtedness.  In addition to
Guarantor’s waiver of any right of subrogation as set forth in this Guaranty
with respect to any obligations of Borrower to Guarantor as subrogee of Lender,
Guarantor agrees that, if Lender so requests, Guarantor shall not demand, take,
or receive from Borrower, by setoff or in any other manner, payment of any other
obligations of Borrower to Guarantor until the Indebtedness has been paid in
full and any commitments of Lender or facilities provided by Lender with respect
to the Indebtedness have been terminated.  If any payments are received by
Guarantor in violation of such waiver or agreement, such payments shall be
received by Guarantor as trustee for Lender and shall be paid over to Lender on
account of the Indebtedness, but without reducing or affecting in any manner the
liability of Guarantor under the other provisions of this Guaranty.  Any
security interest, lien, or other encumbrance that Guarantor may now or
hereafter have on any property of Borrower is hereby subordinated to any
security interest, lien, or other encumbrance that Lender may have on any such
property.

 

12.         Revocation of Guaranty.

 

(a)          Guarantor absolutely, unconditionally, knowingly, and expressly
waives any right to revoke this Guaranty as to future Indebtedness and, in light
thereof, all protection afforded Guarantor under Section 2815 of the California
Civil Code.  Guarantor fully realizes and understands that, upon execution of
this agreement, Guarantor will not have any right to revoke this Guaranty as to
any future Indebtedness and, thus, may have no control over such Guarantor’s
ultimate responsibility for the Indebtedness.  If, contrary to the express
intent of this agreement, any such revocation is effective notwithstanding the
foregoing waiver, Guarantor acknowledges and agrees that:  (a) no such
revocation shall be effective until written notice thereof has been received by
Lender; (b) no such revocation shall apply to any Indebtedness in existence on
such date (including any subsequent continuation, extension, or renewal thereof,
or change in the interest rate, payment terms, or other terms and conditions
thereof); (c) no such revocation shall apply to any Indebtedness made or created
after such date to the extent made or created pursuant to a legally binding
commitment of Lender which is, or is believed in good faith by Lender to be, in
existence on the date of such revocation; (d) no payment by Borrower, or from
any other source, prior to the date of such revocation shall reduce the
obligations of such Guarantor hereunder; and (e) any payment by Borrower or from
any source other than such Guarantor, subsequent to the date of such revocation,
shall first be applied to that portion of the obligations, if any, as to which
the revocation by such Guarantor is effective (and which are not, therefore,
guarantied by such Guarantor hereunder), and, to the extent so applied, shall
not reduce the obligations of such Guarantor hereunder.

 

(b)         In the event of the death of a Guarantor, the liability of the
estate of the deceased Guarantor shall continue in full force and effect as to
(i) the Indebtedness existing at the date of death, and any renewals or
extensions thereof, and (ii) loans or advances made to or for the account of
Borrower after the date of the death of the deceased Guarantor pursuant to a
commitment made by Lender to Borrower prior to the date of such death.  As to
all surviving Guarantors, this Guaranty shall continue in full force and effect
after the death of a Guarantor, not only as to the Indebtedness existing at that
time, but also as to the Indebtedness thereafter incurred by Borrower to Lender.

 

(c)          Guarantor acknowledges and agrees that this Guaranty may be revoked
only in accordance with the foregoing provisions of this paragraph and shall not
be revoked simply as a result of any change in name, location, or composition or
structure of Borrower, the dissolution of Borrower, or the termination,
increase, decrease, or other change of any personnel or owners of Borrower.

 

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13.         Reinstatement of Guaranty.  If this Guaranty is revoked, returned,
or cancelled, and subsequently any payment or transfer of any interest in
property by Borrower to Lender is rescinded or must be returned by Lender to
Borrower, this Guaranty shall be reinstated with respect to any such payment or
transfer, regardless of any such prior revocation, return, or cancellation.

 

14.         Stay of Acceleration.  In the event that acceleration of the time
for payment of any of the Indebtedness is stayed upon the insolvency,
bankruptcy, or reorganization of Borrower or otherwise, all such Indebtedness
guaranteed by Guarantor shall nonetheless be payable by Guarantor immediately if
requested by Lender.

 

15.         No Deductions.  All payments by Guarantor hereunder shall be paid in
full, without setoff or counterclaim or any deduction or withholding whatsoever,
including, without limitation, for any and all present and future taxes.  In the
event that Guarantor or Lender is required by law to make any such deduction or
withholding, Guarantor agrees to pay on behalf of Lender such amount directly to
the appropriate person or entity, or if the Guarantor cannot legally comply with
the foregoing, Guarantor shall pay to Lender such additional amounts as will
result in the receipt by Lender of the full amount payable hereunder.  Guarantor
shall promptly provide Lender with evidence of payment of any such amount made
on Lender’s behalf.

 

16.         Information Relating to Borrower.  Guarantor acknowledges and agrees
that it shall have the sole responsibility for, and has adequate means of,
obtaining from Borrower such information concerning Borrower’s financial
condition or business operations as Guarantor may require, and that Lender has
no duty, and Guarantor is not relying on Lender, at any time to disclose to
Guarantor any information relating to the business operations or financial
condition of Borrower.

 

17.         Borrower’s Authorization.  Where Borrower is a corporation,
partnership, trust, or limited liability company, it is not necessary for Lender
to inquire into the powers of Borrower or of the officers, directors, partners,
members, managers, or agents acting or purporting to act on its behalf, and any
Indebtedness made or created in reliance upon the professed exercise of such
powers shall be guaranteed hereunder, subject to any limitations on Guarantor’s
liability set forth herein.

 

18.         Information Relating to Guarantor.  Guarantor authorizes Lender to
verify or check any information given by Guarantor to Lender, check Guarantor’s
credit references, verify employment, and obtain credit reports. Guarantor
acknowledges and agrees that the authorizations provided in this paragraph apply
to any individual general partner of Guarantor and to Guarantor’s spouse and any
such general partner’s spouse if Guarantor or such general partner is married
and lives in a community property state.

 

19.         Guarantor’s Covenants.  Until the Indebtedness has been paid in full
and any commitments of Lender or facilities provided by Lender with respect to
the Indebtedness have been terminated and each and every term, covenant, and
condition of this Guaranty is fully performed, Guarantor agrees:

 

(a)          to provide the following financial information and statements in
form and content acceptable to Lender, and such additional information as
requested by Lender from time to time:

 

(i)                  if Guarantor is a business entity, within 45 days of
Guarantor’s fiscal year end, Guarantor’s annual financial statements. These
financial statements must be audited, (with an opinion satisfactory to Lender)
by a Certified Public Accountant (“CPA”) acceptable to Lender;

 

(ii)               if Guarantor is a business entity, within 45 days of the
period’s end, Guarantor’s quarterly financial statements.  These financial
statements must be certified and dated by an authorized financial officer of
Guarantor; and

 

(iii)            copies of Guarantor’s federal income tax return (with all forms
K-1 attached), within 30 days of filing, together with a statement of any
contributions made by Guarantor to any subchapter S corporation or trust, and,
if requested by Lender, copies of any extensions of the filing date.

 

20.         Taxes.  Guarantor represents and warrants that it is organized and
resident in the United States of America.  If Guarantor must make a payment
under this Guaranty, Guarantor represents and warrants that it will make the
payment from one of its U.S. resident offices to a U.S. office of Lender so that
no

 

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withholding tax is imposed on the payment.  If notwithstanding the foregoing,
Guarantor makes a payment under this Guaranty to which withholding tax applies,
then Guarantor shall pay any taxes (other than taxes on net income (a) imposed
by the country or any subdivision of the country in which Lender’s principal
office or actual lending office is located and (b) measured by the United States
taxable income Lender would have received if all payments under or in respect of
this Guaranty were exempt from taxes levied by Guarantor’s country) that are at
any time imposed on any such payments under or in respect of this Guaranty
including, but not limited to, payments made pursuant to this paragraph. 
Further, Guarantor shall also pay to Lender, on demand, all additional amounts
that Lender specifies as necessary to preserve the after-tax yield Lender would
have received if such taxes had not been imposed.

 

21.         Change of Status.  Guarantor shall not enter into any consolidation,
merger, or other combination unless Guarantor is the surviving business entity. 
Further, Guarantor shall not change its legal structure unless (a) Guarantor
obtains the prior written consent of Lender and (b) all Guarantor’s obligations
under this Guaranty are assumed by the new business entity.

 

22.         Notices.  All notices required under this Guaranty shall be
personally delivered or sent by first class mail, postage prepaid, or by
overnight courier, to the addresses on the signature page of this Guaranty, or
sent by facsimile to the fax numbers listed on the signature page, or to such
other addresses as Lender and Guarantor may specify from time to time in
writing.  Notices sent by (a) first class mail shall be deemed delivered on the
earlier of actual receipt or on the fourth business day after deposit in the
U.S. mail, postage prepaid, (b) overnight courier shall be deemed delivered on
the next business day, and (c) telecopy shall be deemed delivered when
transmitted.

 

23.         Successors and Assigns.  This Guaranty (a) binds Guarantor and
Guarantor’s executors, administrators, successors, and assigns, provided that
Guarantor may not assign its rights or obligations under this Guaranty without
the prior written consent of Lender, and (b) inures to the benefit of Lender and
Lender’s indorsees, successors, and assigns.  Lender may, without notice to
Guarantor and without affecting Guarantor’s obligations hereunder, sell, assign,
grant participations in, or otherwise transfer to any other person, firm, or
corporation the Indebtedness and this Guaranty, in whole or in part.  Guarantor
agrees that Lender may disclose to any assignee or purchaser, or any prospective
assignee or purchaser, of all or part of the Indebtedness any and all
information in Lender’s possession concerning Guarantor, this Guaranty, and any
security for this Guaranty.

 

24.         Amendments, Waivers, and Severability.  No provision of this
Guaranty may be amended or waived except in writing.  No failure by Lender to
exercise, and no delay in exercising, any of its rights, remedies, or powers
shall operate as a waiver thereof, and no single or partial exercise of any such
right, remedy, or power shall preclude any other or further exercise thereof or
the exercise of any other right, remedy, or power.  The unenforceability or
invalidity of any provision of this Guaranty shall not affect the enforceability
or validity of any other provision of this Guaranty.

 

25.         Costs and Expenses.  Guarantor agrees to pay all reasonable
attorneys’ fees, including allocated costs of Lender’s in-house counsel, and all
other costs and expenses which may be incurred by Lender (a) in the enforcement
of this Guaranty or (b) in the preservation, protection, or enforcement of any
rights of Lender in any case commenced by or against Guarantor or Borrower under
the Bankruptcy Code (Title 11, United States Code) or any similar or successor
statute.

 

26.         Governing Law and Jurisdiction.  This Guaranty shall be governed by
and construed under the laws of the State of California.  Guarantor irrevocably
(a) submits to the non-exclusive jurisdiction of any federal or state court
sitting in the State of California in any action or proceeding arising out of or
relating to this Guaranty and (b) waives to the fullest extent permitted by law
any defense asserting an inconvenient forum in connection therewith.  Service of
process by Lender in connection with such action or proceeding shall be binding
on Guarantor if sent to Guarantor by registered or certified mail at its address
specified below.

 

27.         Waiver of Jury Trial.  EACH PARTY TO THIS AGREEMENT HEREBY EXPRESSLY
WAIVES ANY RIGHT TO TRIAL BY JURY OF ANY CLAIM, DEMAND, ACTION OR CAUSE OF
ACTION ARISING UNDER ANY VAN DOCUMENT OR IN ANY WAY CONNECTED WITH OR RELATED OR
INCIDENTAL

 

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TO THE DEALINGS OF THE PARTIES HERETO OR ANY OF THEM WITH RESPECT TO ANY VAN
DOCUMENT, OR THE TRANSACTIONS RELATED THERETO, IN EACH CASE WHETHER NOW EXISTING
OR HEREAFTER ARISING, AND WHETHER FOUNDED IN CONTRACT OR TORT OR OTHERWISE; AND
EACH PARTY HEREBY AGREES AND CONSENTS THAT ANY SUCH CLAIM, DEMAND, ACTION OR
CAUSE OF ACTION SHALL BE DECIDED BY COURT TRIAL WITHOUT A JURY, AND THAT ANY
PARTY TO THIS AGREEMENT MAY FILE AN ORIGINAL COUNTERPART OR A COPY OF THIS
SECTION WITH ANY COURT AS WRITTEN EVIDENCE OF THE CONSENT OF THE SIGNATORIES
HERETO TO THE WAIVER OF THEIR RIGHT TO TRIAL BY JURY.  EACH PARTY REPRESENTS AND
WARRANTS THAT IT HAS REVIEWED THIS WAIVER, HAS DETERMINED FOR ITSELF THE
NECESSITY TO REVIEW THE SAME WITH ITS LEGAL COUNSEL, AND KNOWINGLY AND
VOLUNTARILY WAIVES ALL RIGHTS TO A JURY TRIAL.

 

28.         Remedies.  All rights and remedies provided in this Guaranty and any
instrument or agreement referred to herein are cumulative and are not exclusive
of any rights or remedies otherwise provided by law.  Any single or partial
exercise of any right or remedy shall not preclude the further exercise thereof
or the exercise of any other right or remedy.

 

29.         Severability.  The illegality or unenforceability of any provision
of this Guaranty or any instrument or agreement referred to herein shall not in
any way affect or impair the legality or enforceability of the remaining
provisions of this Guaranty or any instrument or agreement referred to herein.

 

Executed this          day of Febrary, 2003.

 

 

Business Entity Guarantor:

 

 

 

Orange County Professional Services, Inc.

 

 

 

 

 

By

 

 

Name:

 

 

Title:

 

 

 

 

 

Address for notices to Lender:

 

Address for notices to Guarantor:

Bridge Bank, National Association

 

 

Attn:  Mike Field

 

Orange County Professional Services, Inc.

2120 El Camino Real

 

 

 

Santa Clara, CA  95050

 

 

 

Tel: (408) 982-2106

 

Tel:

Fax: (408) 982-2112

 

Fax:

 

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