Exhibit 10.40


 


CONVERTIBLE
SECURED PROMISSORY NOTE


 


	$10,000,000	Signal
    Hill, California	October
    13, 2017


 


FOR
VALUE RECEIVED, the undersigned (“Maker”) hereby promises to pay jointly to NETWORK MEDICAL MANAGEMENT, INC., a California
corporation (“NMM”), and ALLIED PHYSICIANS OF CALIFORNIA, A PROFESSIONAL MEDICAL CORPORATION, a California corporation
(“APC,” which together with NMM and their respective successors and assigns who become holders of this Convertible
Secured Promissory Note (this “Note”), are collectively referred to as “Holder”), or order, at such place
as Holder may designate, the principal sum of Ten Million Dollars ($10,000,000), plus interest as set forth below. All payments
of principal, interest and other costs and fees payable hereunder shall be allocated between NMM and APC as they shall determine
in their sole and absolute discretion, and Maker shall comply with any payment instructions regarding such allocation.


 


Applicable
Interest Rate:


 


The
rate per annum which is one percent (1.0%) above the Prime Rate (the “Floating Rate”). The Floating Rate shall change
from time to time as and when the Prime Rate changes.


 


Prime
Rate:


 


The
"Prime Rate" shall mean the prime rate of interest for commercial customers, as publicly or privately announced from
time to time by Bank of America


 


Payments:


 


Installments
of interest only shall be payable on a monthly basis commencing on November 1, 2017, and continuing on the first day of each calendar
month thereafter until the date that is three (3) years following the date of this Note (the “Maturity Date”). The
outstanding principal balance, all accrued interest thereon and any other costs and fees payable hereunder shall be immediately
due and payable in full on the Maturity Date.


 


Each
payment made hereunder shall be in the legal currency of the United States and shall be applied upon the then unpaid balance of
the principal sum.


 


Prepayment:


 


This
Note may be prepaid at any time and from time to time, in whole or in part, without notice or penalty, but only after the date
that is one (1) year following the date of this Note, prior to which date this Note may not be prepaid at any time.


 


Default:


 


In
the event Maker fails to pay when due any sum payable under this Note, if such failure is not cured by Maker within sixty (60)
days after written notice of such default from Holder then, at any time during the continuance of such default after the sixtieth
(60th) day, the entire outstanding principal balance, all accrued interest thereon and any other costs and fees payable hereunder
shall, at the option of the Holder, become immediately due and payable.


 




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Maker
agrees to pay any and all costs and expenses, including but not limited to reasonable attorneys’ fees, incurred by Holder
in connection with the collection and enforcement of this Note.


 


Notices:


 


All
notices, consents, requests, demands and other communications hereunder (collectively, “Notices”) shall be in writing
and shall be deemed to have been duly given or delivered: (a) when delivered by hand (with written confirmation of receipt); (b)
on the third (3rd) day following mailing by registered or certified mail, return receipt requested, with first class
postage prepaid; or (c) on the next business day following deposit with a nationally recognized overnight delivery service (receipt
requested), in each case to the appropriate addresses set forth below (or to such other address as a party may designate by notice
to the other parties).


 


	If
    to
    Maker:	George M. Jayatilaka, M.D.
	 	3462 Via Campesina 
	 	Rancho Palos Verdes, CA 90275
	 	 
	If to Holder:	Allied Physicians of California
	 	Network Medical Management, Inc.
	 	1668 S. Garfield Ave., 2nd Floor
	 	Alhambra, CA 91801
	 	Attn: Chief Executive Officer


 


No
Waiver:


 


No
waiver of any breach, default or failure of condition under the terms of this Note shall be implied from any failure of Holder
to take, or any delay by Holder in taking, any action with respect to any such breach, default or failure of condition or from
any previous waiver of any similar or unrelated breach, default or failure of condition. A waiver of any term of this Note must
be made in writing and shall be limited to the express written terms of such wavier.


 


None
of the provisions hereof and none of Holder’s rights or remedies hereunder on account of any past or future default, shall
be deemed to have been waived by any indulgence granted by Holder to Maker. Without limiting the generality of the foregoing, the
acceptance of any installment of principal or interest by Holder after the time when it becomes due, as herein specified or the
acceptance of any partial payment of principal or interest, shall not be held to establish a custom, or to waive any rights of
Holder to enforce prompt payment of any further installments or any other rights, nor shall any failure or delay to exercise any
rights be held to waive the same.


 


This
Note shall be construed in accordance with the laws of the State of California.


 


Stock
Pledge Agreement:


 


This
Note is secured by that certain Stock Pledge Agreement dated as of the date hereof by and between George M. Jayatilaka, M.D., as
Pledgor, and NMM and APC, collectively as Pledgee (the “Stock Pledge Agreement”), a copy of which is attached hereto
as Exhibit “A”
and incorporated herein by this reference.


 




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Conversion


 


Notwithstanding
anything to the contrary contained in this Note, and pursuant to that certain Agreement dated effective as of October 9, 2017 by
and among Accountable Health Care IPA, A Professional Medical Corporation, a California professional medical corporation (“Accountable”),
Signal Health Solutions, Inc., Maker, and APC and NMM (the “Definitive Agreement”), Holder shall have the right, but
not the obligation, to convert the principal amount of this Note into shares of common stock of Accountable in accordance with
the Definitive Agreement.


 


Nonrecourse:


 


Notwithstanding
any provision in this Note to the contrary. Maker’s obligations under this Note and Stock Pledge Agreement is nonrecourse
and, in the event the Holder hereof shall take action to collect the indebtedness (whether principal, interest or otherwise) evidenced
by this Note and the Stock Pledge Agreement, the Holder hereof will look for satisfaction of such indebtedness and/or obligations
under the Stock Pledge Agreement solely to the security granted in the Stock Pledge Agreement and no deficiency judgment shall
be taken against Maker.


 


[Signature continued on next page]


 




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	 	“Maker”:
	 	 
	 	/s/ George M.
    Jayatilaka
	 	George M. Jayatilaka, M.D., 
	 	Individually


 




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