Exhibit 10.8

 

AMENDED AND RESTATED EMPLOYMENT AGREEMENT

 

This Amended and Restated Employment Agreement (this “Agreement”) is made as of
January 8, 2003 between RevCare, Inc., a Nevada corporation (the “Company”), and
Russ Mohrmann (“Executive”).  This Agreement amends and restates in its entirety
that certain Employment Agreement between Executive and Orange County
Professional Services, Inc. dated August 14, 2000.

 

1.                                       Employment.  The Company shall employ
Executive, and Executive hereby accepts employment with the Company, upon the
terms and conditions set forth in this Agreement for the period beginning on the
date hereof and ending as provided in paragraph 4 hereof (the “Employment
Period”).

 

2.                                       Position and Duties.  The Company
hereby engages Executive as an employee of the Company.  During the Employment
Period, Executive shall render services to the Company and its subsidiaries as
the Company’s board of directors (the “Board”), or a person designated by the
Board, may from time to time direct.  During the Employment Period, Executive
shall report to the Board, or a person designated by the Board, and shall devote
his best efforts and attention to the business and affairs of the Company and
its subsidiaries.  Executive shall act as an “Ambassador” for the Company and
its subsidiaries, acting as a key salesperson with existing clients and
soliciting and generating new business opportunities.  As an exempt employee who
will be spending a majority of his time out of the office with clients,
Executive will not be required to account to the Company for a strict 40 hour
week.  Executive’s duties will not include the duties of an executive officer,
except, on an interim basis, as Executive and the Board may mutually agree. 
Executive shall perform his duties, responsibilities and functions to the
Company and its subsidiaries hereunder to the best of his abilities in a
diligent, trustworthy, businesslike and efficient manner.

 

3.                                       Compensation and Benefits.

 

(a)                                  During the Employment Period, Executive’s
base salary shall be $200,000.00 per annum or such other increased rate as the
Board may determine from time to time (as adjusted from time to time, the “Base
Salary”), which salary shall be payable by the Company in regular installments
in accordance with the Company’s general payroll practices.  The Base Salary
shall not be subject to decrease.  In addition, during the Employment Period,
Executive shall be entitled to participate in all of the Company’s employee
welfare benefit programs for which senior executive employees of the Company and
its subsidiaries are generally eligible, and Executive shall be entitled to four
weeks of paid vacation each year, which if not taken during any year may not be
carried forward to any subsequent year.

 

(b)                                 In addition to the Base Salary, the Board
may, in its sole discretion, award a bonus to Executive following the end of
each fiscal year during the Employment Period based upon Executive’s performance
and the Company’s operating results during such year.

 

(c)                                  Executive shall be entitled to such fringe
benefits and perquisites as are generally made available to executive officers
of the Company, and such other fringe benefits as may be approved by the Board
for executive officers of the Company during the term hereof.

 

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(d)                                 During the Employment Period, the Company
shall reimburse Executive for all reasonable expenses incurred by him in the
course of performing his duties and responsibilities under this Agreement which
are consistent with the Company’s policies in effect from time to time for key
employees with respect to travel, entertainment, auto and other business
expenses, subject to the Company’s requirements with respect to reporting and
documentation of such expenses.

 

(e)                                  Executive may receive such grants of
equity-based compensation (e.g., option grants for Company common stock), if
any, as shall be determined within the sole discretion of the Board (or any
committee of the Board which is appointed to consider matters relative to
equity-based compensation).

 

(f)                                    All amounts payable to Executive as
compensation hereunder shall be subject to all required withholding by the
Company.

 

4.                                       Term.

 

(a)                                  Subject to prior termination of this
Agreement as hereinafter provided, the Employment Period shall end on January 5,
2004 and shall automatically be renewed on the same terms and conditions set
forth herein as modified from time to time by the parties hereto for additional
one-year periods beginning on January 6, 2004, unless the Company or Executive
gives the other party written notice of the election not to renew the Employment
Period at least 60 days prior to any such renewal date;  provided that (i) the
Employment Period shall terminate prior to such date immediately upon
Executive’s resignation, death or inability to perform the essential duties,
responsibilities and functions of Executive’s position with the Company and its
subsidiaries as a result of any mental or physical disability or incapacity even
with reasonable accommodations of such disability or incapacity provided by the
Company and its subsidiaries or if providing such accommodations would be
unreasonable (as determined by the Board in its good faith judgment), (ii) the
Employment Period may be terminated by the Executive at any time prior to such
date upon at least ninety (90) days prior notice to the Company, (iii) the
Employment Period may be terminated by the Company at any time prior to such
date, with Cause (as defined herein) upon at least ninety (90) days prior notice
to the Executive, or (iv) the Employment Period may be terminated by the Company
at any time prior to such date, upon five (5) days prior notice to the
Executive, upon payment by the Company in full of the promissory notes described
in Exhibit A hereto (the “Notes”).  The Company may elect to accelerate the
effective date of termination, but Executive shall still be entitled to receive
the compensation and benefits payable hereunder until the ninety (90) day notice
period has expired.

 

(b)                                 For purposes of this Agreement, “Cause”
shall mean (i) commission of a felony or other crime involving moral turpitude
or the commission of any other act or omission involving dishonesty, disloyalty
or fraud with respect to the Company or any of its subsidiaries or any of their
customers, (ii) reporting to work under the influence of alcohol or illegal
drugs, the use of illegal drugs (whether or not at the workplace) or other
repeated conduct causing the Company or any of its subsidiaries substantial
public disgrace or disrepute or economic harm, (iii) substantial and repeated
failure to perform duties as reasonably directed by the Board, (iv) gross
negligence or willful misconduct with respect to the Company or any of its
subsidiaries or (v) any material breach of this Agreement.

 

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5.                                       Confidential Information.  Executive
acknowledges that the information, observations and data (including trade
secrets) obtained by him while employed by the Company and its subsidiaries
concerning the business or affairs of the Company and any of its subsidiaries
(“Confidential Information”) are the property of the Company or such Affiliate. 
Therefore, Executive agrees that he shall not disclose to any unauthorized
person or use for his own purposes any Confidential Information without the
prior written consent of the Board, unless and to the extent that the
Confidential Information becomes generally known to and available for use by the
public other than as a result of Executive’s acts or omissions.  Executive shall
deliver to the Company at the termination or expiration of the Employment
Period, or at any other time the Company may request, all memoranda, notes,
plans, records, reports, computer tapes, printouts and software and other
documents and data (and copies thereof) embodying or relating to the
Confidential Information, Work Product (as defined below) or the business of the
Company and its subsidiaries which he may then possess or have under his
control.

 

6.                                       Inventions and Patents.  Executive
acknowledges that all inventions, innovations, improvements, developments,
methods, designs, analyses, drawings, reports and all similar or related
information (whether or not patentable) which relate to the Company’s or any of
its subsidiaries’ actual or anticipated business, research and development or
existing or future products or services and which are conceived, developed or
made by Executive while employed by the Company and its subsidiaries (“Work
Product”) belong to the Company or such Affiliate.  Executive shall promptly
disclose such Work Product to the Board and, at the Company’s expense, perform
all actions reasonably requested by the Board (whether during or after the
Employment Period) to establish and confirm such ownership (including, without
limitation, assignments, consents, powers of attorney and other instruments). 
If applicable, this Agreement does not apply to inventions which qualify fully
for protection under Section 2870 of the California Labor Code (which, if
applicable, could apply to ideas or inventions for which no equipment, supplies,
facility or trade secret information of the Company or its subsidiaries were
used and which were developed entirely on Executive’s own time, and (i) which do
not relate at the time of conception or reduction to practice of the invention
(A) to the actual business of the Company or its subsidiaries, or (B) to the
Company or its subsidiaries actual or demonstrably anticipated research or
development or (ii) which do not result from any work performed by Executive for
the Company or its subsidiaries.  Notwithstanding the foregoing, Executive shall
disclose in confidence to the Company any invention in order to permit the
Company to make a determination as to compliance by Executive with the terms and
conditions of this Agreement.

 

7.                                       Enforcement.  If, at the time of
enforcement of paragraph 5 or 6 of this Agreement, a court holds that the
restrictions stated herein are unreasonable under circumstances then existing,
the parties hereto agree that the maximum period, scope or geographical area
reasonable under such circumstances shall be substituted for the stated period,
scope or area.  Because Executive’s services are unique and because Executive
has access to Confidential Information and Work Product, the parties hereto
agree that money damages would not be an adequate remedy for any breach of this
Agreement.  Therefore, in the event a breach or threatened breach of this
Agreement, the Company or its successors or assigns, in addition to other rights
and remedies existing in their favor, shall be entitled to specific performance
and/or injunctive or other equitable relief from a court of competent
jurisdiction in order to enforce, or prevent any violations of, the provisions
hereof (without posting a bond or other security).

 

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8.                                       Board Seat.  Concurrently upon the
execution of this Agreement, Executive shall be elected to serve as a member of
the Board of the Company.  With respect to all elections of directors occurring
prior to the payment in full of the Notes, the Company shall nominate, and use
its reasonable efforts to cause the election of, Executive to serve as a member
of the Board of the Company.  Upon the earlier of (i) the termination or
expiration of the Employment Period or (ii) the payment in full of the Notes, at
the Board’s request, Executive shall resign as a director of the Company.

 

9.                                       Executive’s Representations.  Executive
hereby represents and warrants to the Company that (a) the execution, delivery
and performance of this Agreement by Executive do not and shall not conflict
with, breach, violate or cause a default under any contract, agreement,
instrument, order, judgment or decree to which Executive is a party or by which
he is bound, (b) Executive is not a party to or bound by any employment
agreement, noncompete agreement or confidentiality agreement with any other
person or entity except the Non-Competition Agreement between Executive and the
Company dated August 14, 2000, and (c) upon the execution and delivery of this
Agreement by the Company, this Agreement shall be the valid and binding
obligation of Executive, enforceable in accordance with its terms.  Executive
hereby acknowledges and represents that he has had an opportunity to consult
with independent legal counsel regarding his rights and obligations under this
Agreement and that he fully understands the terms and conditions contained
herein.

 

10.                                 Survival.  Paragraphs 5 through 7 and 9
through 19 shall survive and continue in full force in accordance with their
terms notwithstanding the expiration or termination of the Employment Period.

 

11.                                 Notices.  Any notice provided for in this
Agreement shall be in writing and shall be either personally delivered, sent by
reputable overnight courier service or mailed by first class mail, return
receipt requested, to the recipient at the address below indicated:

 

Notices to Executive:

 

Russ Mohrmann
9432 Walker Ranch Circle
Villa Park, CA 92816-2820

 

With a copy to:

 

Andrew A. Talley, Esq.
Attorney at Law
500 N. State College Blvd., Suite 1030
Orange, CA 92868

 

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Notices to the Company:

 

RevCare, Inc.
5400 Orange Avenue, Suite 200
Cypress, CA 90630
attn: Chief Financial Officer

 

or such other address or to the attention of such other person as the recipient
party shall have specified by prior written notice to the sending party.  Any
notice under this Agreement shall be deemed to have been given when so
delivered, sent or mailed.

 

12.                                 Severability.  Whenever possible, each
provision of this Agreement shall be interpreted in such manner as to be
effective and valid under applicable law, but if any provision of this Agreement
is held to be invalid, illegal or unenforceable in any respect under any
applicable law or rule in any jurisdiction, such invalidity, illegality or
unenforceability shall not affect any other provision or any action in any other
jurisdiction, but this Agreement shall be reformed, construed and enforced in
such jurisdiction as if such invalid, illegal or unenforceable provision had
never been contained herein.

 

13.                                 Complete Agreement.  This Agreement embodies
the complete agreement and understanding among the parties and supersedes and
preempts any prior understandings, agreements or representations by or among the
parties, written or oral, which may have related to the subject matter hereof in
any way, including, without limitation, any prior understandings, agreements or
representations between Executive, on the one hand, and the Company and its
subsidiaries, on the other hand.

 

14.                                 No Strict Construction.  The language used
in this Agreement shall be deemed to be the language chosen by the parties
hereto to express their mutual intent, and no rule of strict construction shall
be applied against any party.

 

15.                                 Counterparts.  This Agreement may be
executed in separate counterparts, each of which is deemed to be an original and
all of which taken together constitute one and the same agreement.

 

16.                                 Successors and Assigns.  This Agreement is
intended to bind and inure to the benefit of and be enforceable by Executive,
the Company and their respective heirs, successors and assigns, except that
Executive may not assign his rights or delegate his duties or obligations
hereunder without the prior written consent of the Company.

 

17.                                 Choice of Law.  All issues and questions
concerning the construction, validity, enforcement and interpretation of this
Agreement and the exhibits and schedules hereto shall be governed by, and
construed in accordance with, the laws of the State of California, without
giving effect to any choice of law or conflict of law rules or provisions
(whether of the State of California or any other jurisdiction) that would cause
the application of the laws of any jurisdiction other than the State of
California.

 

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18.                                 Amendment and Waiver.  The provisions of
this Agreement may be amended or waived only with the prior written consent of
the Company (as approved by the Board) and Executive, and no course of conduct
or course of dealing or failure or delay by any party hereto in enforcing or
exercising any of the provisions of this Agreement (including, without
limitation, the Company’s right to terminate the Employment Period for Cause)
shall affect the validity, binding effect or enforceability of this Agreement or
be deemed to be an implied waiver of any provision of this Agreement.

 

19.                                 Arbitration.  Except with respect to
disputes or claims under paragraphs 5 and 6 hereof (which may be pursued in any
court of competent jurisdiction as specified below and with respect to which
each party shall bear the cost of its own attorney’s fees and expenses except as
otherwise required by applicable law), each party hereto agrees that the
arbitration procedure set forth in Exhibit B hereto shall be the sole and
exclusive method for resolving any claim or dispute (“Claim”) arising out of or
relating to the rights and obligations acknowledged and agreed to in this
Agreement and the employment of Executive by the Company and its subsidiaries
(including, without limitation, disputes and claims regarding employment
discrimination, sexual harassment, termination and discharge), whether such
Claim arose or the facts on which such Claim is based occurred prior to or after
the execution and delivery of adoption of this Agreement.  The parties agree
that the result of any arbitration hereunder shall be final, conclusive and
binding on all of the parties.  Nothing in this paragraph shall prohibit a party
hereto from instituting litigation to enforce any “Final Determination” (as
defined in Exhibit B hereto).  Each party hereto hereby irrevocably submits to
the jurisdiction of any United States District Court or California state court
of competent jurisdiction sitting in Orange County, California, and agrees that
such court shall be the exclusive forum with respect to disputes and claims
under paragraphs 5 and 6 and for the enforcement of any Final Determination. 
Each party hereto irrevocably consents to service of process by registered mail
or personal service and waives any objection on the grounds of personal
jurisdiction, venue or inconvenience of the forum.  Each party hereto further
agrees that each other party hereto may initiate litigation in any court of
competent jurisdiction to execute any judicial judgment enforcing a Final
Determination.

 

IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the
date first written above.

 

 

REVCARE, INC.

 

 

 

 

 

By:

/s/ Fred McGee

 

Name:

Fred McGee

 

Title:

CFO

 

 

 

 

 

 

/s/ Russell E. Mohrmann

 

RUSS MOHRMANN

 

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Exhibit A

 

1.                                       That certain Secured Convertible
Promissory Note dated January 8, 2003 issued by RevCare, Inc. in favor of Russ
Mohrmann and Suzette Mohrmann in the original principal amount of $1,373,981.03;

 

2.                                       That certain Secured Convertible
Promissory Note dated January 8, 2003 issued by RevCare, Inc. in favor of RBA
Rem-Care, Inc. in the original principal amount of $412,435.40;

 

3.                                       That certain Secured Convertible
Promissory Note dated January 8, 2003 issued by RevCare, Inc. in favor of
Insource Medical Solutions, LLC in the original principal amount of $198,442.10;
and

 

4.                                       That certain Secured Convertible
Promissory Note dated January 8, 2003 issued by RevCare, Inc. in favor of
Hospital Employee Labor Pool in the original principal amount of $583,653.23.

 

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Exhibit B

 

ARBITRATION PROCEDURE

 

1.                                       Notice of Claim.  A party asserting a
Claim (the “Claimant”) shall deliver written notice to each party against whom
the Claim is asserted (collectively, the “Opposing Party”), with a copy to the
persons required to receive copies of notices under the Agreement (the
“Additional Notice Parties”), specifying the nature of the Claim and requesting
a meeting to resolve same.  The Additional Notice Parties shall be given
reasonable notice of and invited and permitted to attend any such meeting.  If
no resolution is reached within 10 business days after delivery of such notice,
the Claimant or the Opposing Party may, within 45 days after giving such notice,
invoke the arbitration procedure provided herein by delivering to each Opposing
Party and the Additional Notice Parties a Notice of Arbitration, which shall
specify the Claim as to which arbitration is sought, the nature of the Claim,
the basis for the Claim, and the nature and amount of any damages or other
compensation or relief sought (a “Notice of Arbitration”).  Each party agrees
that no punitive damages may be sought or recovered in any arbitration, judicial
proceeding or otherwise.  Failure to file a Notice of Arbitration within 45 days
shall constitute a waiver of any right to relief for the matters asserted in the
notice of claim.  Any Claim shall be forever barred, and no relief may be sought
therefor, if written notice of such Claim is not made as provided above within
one year of the date such claim accrues.

 

2.                                       Selection of Arbitrator.  Within 20
business days after receipt of the Notice of Arbitration, the Executive and the
Board shall meet and attempt to agree on an arbitrator to hear and decide the
Claim.  If the Executive and the Board cannot agree on an arbitrator within ten
business days, then they shall request the Judicial Arbitration and Mediation
Service (“JAMS”) in Orange County, California to appoint an arbitrator
experienced in the area of dispute who does not have an ongoing business
relationship with any of the parties to the dispute.  If the arbitrator selected
informs the parties he cannot hear and resolve the Claim within the time-frame
specified below, the Executive and the Board shall request the appointment of
another arbitrator by the JAMS subject to the same requirements.

 

3.                                       Arbitration Procedure.  The following
procedures shall govern the conduct of any arbitration under this section.  All
procedural matters relating to the conduct of the arbitration other than those
specified below shall be discussed among counsel for the parties and the
arbitrator.  Subject to any agreement of the parties, the arbitrator shall
determine all procedural matters not specified herein.

 

(a)                                  Within 30 days after the delivery of a
Notice of Arbitration, each party shall afford the other, or its counsel, with
reasonable access to documents relating directly to the issues raised in the
Notice of Arbitration.  All documents produced and all copies thereof shall be
maintained as strictly confidential, shall be used for no purpose other than the
arbitration hereunder, and shall be returned to the producing party upon
completion of the arbitration.  There shall be no other discovery except that,
if a reasonable need is shown, limited depositions may be allowed in the
discretion of the arbitrator, it being the expressed intention and agreement of
each party to have the arbitration proceedings conducted and resolved as
expeditiously, economically and fairly as reasonably practicable, and with the
maximum degree of confidentiality.

 

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(b)                                 All written communications regarding the
proceeding sent to the arbitrator shall be sent simultaneously to each party or
its counsel, with a copy to the Additional Notice Parties.  Oral communications
between any of the parties or their counsel and the arbitrator shall be
conducted only when all parties or their counsel are present and participating
in the conversation.

 

(c)                                  Within 20 days after selection of the
arbitrator, the Claimant shall submit to the arbitrator a copy of the Notice of
Arbitration, along with a supporting memorandum and any exhibits or other
documents supporting the Claim.

 

(d)                                 Within 20 days after receipt of the
Claimant’s submission, the Opposing Party shall submit to the arbitrator a
memorandum supporting its position and any exhibits or other supporting
documents.  If the Opposing Party fails to respond to any of the issues raised
by the Claimant within 20 days of receipt of the Claimant’s submission, then the
arbitrator may find for the Claimant on any such issue and bar any subsequent
consideration of the matter.

 

(e)                                  Within 20 days after receipt of the
Opposing Party’s response, the Claimant may submit to the arbitrator a reply to
the Opposing Party’s response, or notification that no reply is forthcoming.

 

(f)                                    Within 10 days after the last submission
as provided above, the arbitrator shall notify the parties and the Additional
Notice Parties of the date of the hearing on the issues raised by the Claim. 
Scheduling of the hearing shall be within the sole discretion of the arbitrator,
but in no event more than 30 days after the last submission by the parties, and
shall take place within 50 miles of the corporate headquarters of the Company at
a place selected by the arbitrator or such other place as is mutually agreed. 
Both parties shall be granted substantially equal time to present evidence at
the hearing.  The hearing shall not exceed one business day, except for good
cause shown.

 

(g)                                 Within 30 days after the conclusion of the
hearing, the arbitrator shall issue a written decision to be delivered to both
parties and the Additional Notice Parties (the “Final Determination”).  The
Final Determination shall address each issue disputed by the parties, state the
arbitrator’s findings and reasons therefor, and state the nature and amount of
any damages, compensation or other relief awarded.

 

(h)                                 The award rendered by the arbitrator shall
be final and non-appealable, except as otherwise provided under applicable law,
and judgment may be entered upon it in accordance with applicable law in such
court as has jurisdiction thereof.

 

4.                                       Costs of Arbitration.  As part of the
Final Determination, the arbitrator shall determine the allocation of the costs
and expenses of the arbitration, including the arbitrator’s fee and both
parties’ attorneys’ fees and expenses, based upon the extent to which each party
prevailed in the arbitration.  In the event that any relief which is awarded is
non-monetary, then such costs and expenses shall be allocated in any manner as
may be determined by the arbitrators.

 

5.                                       Confidentiality of Proceedings.  The
parties hereto agree that all of the arbitration proceedings provided for
herein, including any notice of claim, the Notice of Arbitration, the
submissions of the parties, and the Final Determination issued by the
arbitrator, shall be

 

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confidential and shall not be disclosed at any time to any person other than the
parties, their representatives, the arbitrator and the Additional Notice
Parties; provided, however, that this provision shall not prevent the party
prevailing in the arbitration from submitting the Final Determination to a court
for the purpose of enforcing the award, subject to comparable confidentiality
protections if the court agrees; and further provided that the foregoing shall
not prohibit disclosure to the minimum extent reasonably necessary to comply
with (i) applicable law (or requirement having the force of law), court order,
judgment or decree, including, without limitation, disclosures which may be
required pursuant to applicable securities laws, and (ii) the terms of
contractual arrangements (such as financing arrangements) to which the Company
or any Additional Notice Party may be subject so long as such contractual
arrangements were not entered into for the primary purpose of permitting
disclosure which would otherwise be prohibited hereunder.

 

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