Document:

Exhibit
10.11

 

SECURITY AGREEMENT

 

1.               THE SECURITY. 
The undersigned, Orange County
Professional Services, Inc. (“Grantor”), hereby assigns and grants
to Bridge Bank, National Association
(“Lender”) a continuing security interest in the following described property
(“Collateral”):

 

(a)                                  All of the following, whether now owned or
hereafter acquired by Grantor: accounts, contract rights, chattel paper,
instruments, deposit accounts, investment property and general intangibles.

 

(b)                                 All inventory now owned or hereafter
acquired by Grantor.

 

(c)                                  All negotiable and nonnegotiable documents
of title now owned or hereafter acquired by Grantor.

 

(d)                                 All rights under contracts of insurance now
owned or hereafter acquired by Grantor covering any of the above-described property.

 

(e)                                  All proceeds, product, rents and profits now
owned or hereafter acquired by Grantor of any of the above-described property.

 

(f)                                    All books and records now owned or hereafter
acquired by Grantor pertaining to any of the above-described property,
including but not limited to any computer-readable memory and any computer
hardware or software necessary to process such memory (“Books and Records”);

 

Grantor acknowledges and affirms that such security interest in the
Collateral has attached to all Collateral without further act on the part of
the Lender or Grantor.

 

2.               THE INDEBTEDNESS. 
The Collateral secures and will secure all Indebtedness of Revcare, Inc.
(“Borrower”) to Lender.  For the
purposes of this Agreement, “Indebtedness” means all loans and advances made by
Lender to Borrower and all other obligations and liabilities of Borrower to
Lender, whether now existing or hereafter incurred or created, whether
voluntary or involuntary, whether due or not due, whether absolute or
contingent, or whether incurred directly or acquired by Lender by assignment or
otherwise.  Unless Borrower shall have
otherwise agreed in writing, Indebtedness, for the purposes of this Agreement,
shall not include “consumer credit” subject to the disclosure requirements of
the Federal Truth in Lending Act or any regulations promulgated thereunder.

 

3.               GRANTOR’S COVENANTS. 
Grantor covenants and warrants that unless compliance is waived by
Lender in writing:

 

(a)                                  Grantor shall execute and deliver to Lender
concurrently with Grantor’s execution of this Security Agreement, and from time
to time at the request of Lender, all financing statements, continuation
financing statements, fixture filings, agreements, security agreements, chattel
mortgages, assignments, and all other documents that Lender may request, in
form satisfactory to Lender, to perfect and maintain perfected Lender’s
security interests in the Collateral and in order to consummate fully all of
the transactions contemplated by this Security Agreement and the Business
Financing Agreement.

 

(b)                                 Grantor will properly preserve the
Collateral; defend the Collateral against any adverse claims and demands; and
keep accurate Books and Records.

 

(c)                                  Grantor has notified Lender in writing of,
and will notify Lender in writing prior to any change in the locations of (i)
Grantor’s place of business or Grantor’s chief executive office if Grantor has
more than one place of business and (ii) any Collateral, including the Books
and Records.

 

(d)                                 Grantor will notify Lender in writing prior
to any change in Grantor’s name, identity or business structure.

 

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(e)                                  Grantor has not granted and will not grant
any security interest in any of the Collateral except to Lender, and will keep
the Collateral free of all liens, claims, security interests and encumbrances
of any kind or nature, except the security interest of Lender.

 

(f)                                    Grantor will not sell, lease, agree to sell
or lease, or otherwise dispose of, or remove from Grantor’s place of business
(i) any inventory except in the ordinary course of business as heretofore
conducted by Grantor, or (ii) any other Collateral except with the prior
written consent of Lender.

 

(g)                                 Grantor will promptly notify Lender in
writing of any event which affects the value of any Collateral, the ability of
Grantor or Lender to dispose of any Collateral, or the rights and remedies of
Lender in relation thereto, including, but not limited to, the levy of any
legal process against any Collateral and the adoption of any marketing order,
arrangement or procedure affecting the Collateral, whether governmental or
otherwise.

 

(h)                                 If any Collateral is or becomes the subject
of any negotiable document of title including any warehouse receipt or bill of
lading, Grantor shall immediately deliver such document to Lender.

 

(i)                                     Until Lender exercises its rights to make
collection, Grantor will diligently collect all Collateral.

 

4.               ADDITIONAL OPTIONAL REQUIREMENTS. 
Grantor agrees that Lender may at its option at any time, whether or not
Grantor is in default:

 

(a)                                  Require Grantor to segregate all collections
and proceeds of the Collateral so that they are capable of identification and
deliver daily such collections and proceeds to Lender in kind.

 

(b)                                 Require Grantor to deliver to Lender (i)
copies of or extracts from the Books and Records, and (ii) information on any
contracts or other matters affecting the Collateral.

 

(c)                                  Examine the Collateral, including the Books
and Records, and make copies of or extracts from the Books and Records, and for
such purposes enter at any reasonable time upon the property where any
Collateral or any Books and Records are located.

 

(d)                                 Require Grantor to deliver to Lender any
instruments or chattel paper.

 

(e)                                  Require Grantor to obtain Lender’s prior
written consent to any sale, lease, agreement to sell or lease, or other
disposition of any inventory.

 

(f)                                    Notify any account debtors, any buyers of
the Collateral, or any other persons of Lender’s interest in the Collateral.

 

(g)                                 Require Grantor to direct all account
debtors to forward all payments and proceeds of the Collateral to a lockbox
account as Lender may specify, pursuant to a lockbox agreement in form and
substance satisfactory to Lender, with a lockbox servicing agent acceptable to
Lender.

 

(h)                                 Demand and collect any payments and proceeds
of the Collateral.  In connection
therewith Grantor irrevocably authorizes Lender to endorse or sign Grantor’s
name on all checks, drafts, collections, receipts and other documents, and to
take possession of and open the mail addressed to Grantor and remove therefrom
any payments and proceeds of the Collateral.

 

5.               DEFAULTS.  Any one or more of the
following shall be a default hereunder:

 

(a)                                  Grantor fails to pay any Indebtedness when
due.

 

(b)                                 Grantor breaches any term, provision,
warranty or representation under this Agreement or under any other obligation
of Grantor to Lender.

 

(c)                                  Any custodian, receiver or trustee is
appointed to take possession, custody or control of

 

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all or a substantial portion of the property of Borrower or of any
guarantor of any Indebtedness.

 

(d)                                 Borrower or any guarantor of any
Indebtedness becomes insolvent, or is generally not paying or admits in writing
its inability to pay its debts as they become due, fails in business, makes a
general assignment for the benefit of creditors, dies or commences any case,
proceeding or other action under any bankruptcy or other law for the relief of,
or relating to, debtors.

 

(e)                                  Any case, proceeding or other action is
commenced against Borrower or any guarantor of any Indebtedness under any
bankruptcy or other law for the relief of, or relating to, debtors.

 

(f)                                    Any involuntary lien of any kind or
character attaches to any Collateral.

 

(g)                                 Any financial statements, certificates,
schedules or other information now or hereafter furnished by Borrower to Lender
proves false or incorrect in any material respect.

 

6.               LENDER’S REMEDIES AFTER DEFAULT.  In
the event of any default Lender may do any one or more of the following:

 

(a)                                  Declare any Indebtedness immediately due and
payable, without notice or demand.

 

(b)                                 Enforce the security interest given
hereunder pursuant to the Uniform Commercial Code and any other applicable law.

 

(c)                                  Enforce the security interest of Lender in
any deposit account of Grantor maintained with Lender by applying such account
to the Indebtedness.

 

(d)                                 Require Grantor to assemble the Collateral,
including the Books and Records, and make them available to Lender at a place
designated by Lender.

 

(e)                                  Enter upon the property where any
Collateral, including any Books and Records are located and take possession of
such Collateral and such Books and Records, and use such property (including
any buildings and facilities) and any of Grantor’s equipment, if Lender deems
such use necessary or advisable in order to take possession of, hold, preserve,
process, assemble, prepare for sale or lease, market for sale or lease, sell or
lease, or otherwise dispose of, any Collateral.

 

(f)                                    Grant extensions and compromise or settle
claims with respect to the Collateral for less than face value, all without
prior notice to Grantor.

 

(g)                                 Use or transfer any of Grantor’s rights and
interests in any Intellectual Property now owned or hereafter acquired by
Grantor, if Lender deems such use or transfer necessary or advisable in order
to take possession of, hold, preserve, process, assemble, prepare for sale or
lease, market for sale or lease, sell or lease, or otherwise dispose of, any
Collateral.  Grantor agrees that any
such use or transfer shall be without any additional consideration to
Grantor.  As used in this paragraph,
“Intellectual Property” includes, but is not limited to, all trade secrets,
computer software, service marks, trademarks, trade names, trade styles,
copyrights, patents, applications for any of the foregoing, customer lists,
working drawings, instructional manuals, and rights in processes for technical
manufacturing, packaging and labelling in which Grantor has any right or
interest, whether by ownership, license, contract or otherwise.

 

(h)                                 Have a receiver appointed by any court of
competent jurisdiction to take possession of the Collateral.

 

(i)                                     Take such measures as Lender may deem
necessary or advisable to take possession of, hold, preserve, process,
assemble, insure, prepare for sale or lease, market for sale or lease, sell or
lease, or otherwise dispose of, any Collateral, and Grantor hereby irrevocably
constitutes and appoints Lender as Grantor’s attorney-in-fact to perform all acts
and execute all documents in connection therewith.

 

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7.               MISCELLANEOUS.

 

(a)                                  Any waiver, express or implied, of any
provision hereunder and any delay or failure by Lender to enforce any provision
shall not preclude Lender from enforcing any such provision thereafter.

 

(b)                                 Grantor shall, at the request of Lender,
execute such other agreements, documents, instruments, or financing statements
in connection with this Agreement as Lender may reasonably deem necessary.

 

(c)                                  All notes, security agreements,
subordination agreements and other documents executed by Grantor or furnished
to Lender in connection with this Agreement must be in form and substance
satisfactory to Lender.

 

(d)                                 If any provision of this Agreement is deemed
invalid by reason of law, this Agreement will be construed as not containing
such provision and the remainder of the Agreement shall remain in full force
and effect.  If Lender waives a default,
it may enforce a later default.  Any
consent or waiver under, or amendment of this Agreement, must be in writing,
and no such consent, waiver, or amendment shall imply any obligation by Lender
to make any subsequent consent, waiver, or amendment.  THIS AGREEMENT SHALL BE GOVERNED BY AND INTERPRETED IN ACCORDANCE
WITH THE INTERNAL LAWS OF THE STATE OF CALIFORNIA.

 

(e)                                  All rights and remedies herein provided are
cumulative and 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.

 

(f)                                    All terms not defined herein are used as set
forth in the Uniform Commercial Code.

 

(g)                                 In the event of any action by Lender to
enforce this Agreement or to protect the security interest of Lender in the
Collateral, or to take possession of, hold, preserve, process, assemble,
insure, prepare for sale or lease, market for sale or lease, sell or lease, or
otherwise dispose of, any Collateral, Grantor agrees to pay immediately the
costs and expenses thereof, together with reasonable attorney’s fees and
allocated costs for in-house legal services.

 

(h)                                 This Agreement shall bind and inure to the
benefit of the respective successors and assigns of Grantor and Lender; provided,
however, that Grantor may not assign this Agreement nor delegate any of
its duties hereunder without Lender’s prior written consent and any prohibited
assignment or delegation shall be absolutely void.  Lender reserves the right to sell, transfer, negotiate, assign or
grant participations in all or part of, or any interest in, the rights and
benefits hereunder.

 

(i)                                     The Grantor will pay to Lender upon demand
all fees, costs and expense (including fees of attorneys and professionals and
their costs and expenses) that Lender incurs or may from time to time impose in
connection with any of the following: 
(a) preparing, negotiating, administering, and enforcing this
Agreement or any other agreement executed in connection herewith, including any
amendments, waivers or consents in connection with any of the foregoing, and
(b) any litigation or dispute (whether instituted by Lender, Grantor or
any other person) in any way relating to this Agreement or any other agreement
executed in connection herewith or therewith. 
Grantor shall indemnify and hold Lender harmless from and against any
and all claims, actions, damages, costs, expenses, and liabilities of any
nature whatsoever arising in connection with any of the foregoing.

 

(j)                                     EACH PARTY TO THIS AGREEMENT HEREBY
EXPRESSLY WAIVES ANY RIGHT TO TRIAL BY JURY OF ANY CLAIM, DEMAND, ACTION OR
CAUSE OF ACTION ARISING IN CONNECTION WITH THE OBLIGATIONS OR IN ANY WAY
CONNECTED WITH OR RELATED OR INCIDENTAL TO THE DEALINGS OF THE PARTIES HERETO
OR ANY OF THEM WITH RESPECT TO ANY OBLIGATION, OR THE TRANSACTIONS RELATED
THERETO, IN EACH CASE WHETHER NOW EXISTING OR HEREAFTER ARISING, AND WHETHER
FOUNDED IN CONTRACT OR TORT OR 

 

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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.

 

 

Executed
this           day of
                             ,
2003

 

 

	
  GRANTOR:

  	
  LENDER:

  
	
   

  	
   

  
	
  ORANGE COUNTY PROFESSIONAL SERVICES, INC. 

  	
  BRIDGE BANK, NATIONAL ASSOCIATION

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  	
   

  	
  By

  	
   

  	
   

  
	
  By

  	
   

  	
   

  	
  Name:

  	
   

  	
   

  
	
  Name:

  	
   

  	
   

  	
  Title:

  	
   

  	
   

  
	
  Title:

  	
   

  	
   

  	
   

  	
   

  	
   

  
											

 

5Exhibit
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

 

4

 

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

 

5

 

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:

  
							

 

6

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