Document:

Exhibit
10.9

 

Second
Amendment

 

This is the second amendment to the Promissory Note (“Note”) dated
September 24, 2001 between RevCare, Inc. (“RevCare”) and Russ Mohrmann and
Manny Occiano (collectively “Holder”) wherein Holder agrees to extend the
maturity date of the Note to January 2, 2004.

 

All other terms and conditions contained in the original Note remain in
full force and effect.

 

 

	
  /s/ Manny Occiano

  	
   

  	
   

  	
   

  
	
  Manny Occiano

  	
   

  	
  Dated 

  	
  January 2, 2003

  
	
   

  	
   

  	
   

  	
   

  
	
  /s/ Russ Mohrmann

  	
   

  	
   

  	
   

  
	
  Russ Mohrmann

  	
   

  	
  Dated

  	
  January 2, 2003

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  RevCare, Inc.

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  /s/ Fred McGee

  	
   

  	
   

  	
   

  
	
  Fred McGee, CFO

  	
   

  	
  Dated

  	
  January 2, 2003Exhibit 10.10

 

BUSINESS FINANCING AGREEMENT

dated as of February 11, 2003

between

BRIDGE BANK, NATIONAL ASSOCIATION

and

REVCARE, INC., a Nevada corporation (“Borrower”).

 

Borrower
and Lender agree as follows:

 

1.               Definitions and
Construction.

 

1.1         Definitions.  In this Agreement:

 

“Account
Balance” means at any time the aggregate of the Receivable Amounts of all
Financed Receivables at such time.

 

“Account
Debtor” has the meaning in the California Uniform Commercial Code and
includes any person liable on any Receivable, including without limitation, any
guarantor of any Receivable and any issuer of a letter of credit or banker’s
acceptance assuring payment thereof.

 

“Adjustments”
means all discounts, allowances, disputes, offsets, defenses, rights of recoupment,
rights of return, warranty claims, or short payments, asserted by or on behalf
of any Account Debtor with respect to any Financed Receivable.

 

“Advance”
means as to any Receivable, the advance made by Lender to Borrower in respect
of such Receivable pursuant to Section 2.2.

 

“Advance
Rate” means 80%, net of deferred revenue, contras and other offsets related
to each specific Account Debtor, or such greater or lesser percentage as Lender
may from time to time establish in its sole discretion upon notice to Borrower.

 

“Agreement”
means this Business Financing Agreement.

 

“Cash
Infusion” is an infusion of subordinated debt or equity into Borrower in an
amount no less than $3,000,000 on or before March 31, 2003.

 

“Collateral”
is attached as Exhibit “A”.

 

“Collections”
means all payments from or on behalf of an Account Debtor with respect to
Receivables.

 

“Compliance
Certificate” means a certificate in the form attached to this Agreement by
the chief financial officer of Borrower that, among other things, the
representations and warranties set forth in this Agreement are true and correct
as of the date such certificate is delivered.

 

“Credit
Limit” means $2,500,000.

 

“Default”
means any Event of Default or any event that with notice, lapse of time or
otherwise would constitute an Event of Default.

 

“Earned
Reserve” means for any Financed Receivable on which the Advance has been
reduced during any Reconciliation Period, the amount (if any), as of the
Reconciliation Date for such Reconciliation Period,  by which (a) the product of the Advance Rate and the Receivable
Amount of such Financed Receivable as of such Reconciliation Date exceeds (b)
the outstanding amount of the Advance made on such Financed Receivable.

 

“Eligible
Receivable” means a Receivable that satisfies all of the following:

 

(a)                                  The
Receivable has been created by Borrower in the ordinary course of Borrower’s
business and without any obligation on the part of Borrower to render any
further performance.

 

1

 

(b)                                 There
are no conditions which must be satisfied before Borrower is entitled to
receive payment of the Receivable, and the Receivable does not arise from COD
sales, consignments or guaranteed sales.

 

(c)                                  The
Account Debtor upon the Receivable does not claim any defense to payment of the
Receivable, whether well founded or otherwise.

 

(d)                                 The
Receivable is not the obligation of an Account Debtor who has asserted or may
assert any counterclaims or offsets against Borrower (including offsets for any
“contra accounts” owed by Borrower to the Account Debtor for goods purchased by
Borrower or for services performed for Borrower).

 

(e)                                  The
Receivable represents a genuine obligation of the Account Debtor and to the
extent any credit balances exist in favor of the Account Debtor, such credit
balances shall be deducted in calculating the Receivable Amount.

 

(f)                                    Borrower
has sent an invoice to the Account Debtor in the amount of the Receivable.

 

(g)                                 Borrower
is not prohibited by the laws of the state where the Account Debtor is located
from bringing an action in the courts of that state to enforce the Account
Debtor’s obligation to pay the Receivable. 
Borrower has taken all appropriate actions to ensure access to the courts
of the state where the Account Debtor is located, including, where necessary,
the filing of a Notice of Business Activities Report or other similar filing
with the applicable state agency or the qualification by Borrower as a foreign
corporation authorized to transact business in such state.

 

(h)                                 The
Receivable is owned by Borrower free of any title defects or any liens or
interests of others except the security interest in favor of Lender, and Lender
has a perfected, first priority security interest in such Receivable.

 

(i)                                     The
Account Debtor on the Receivable is not any of the following:  (i) an employee, affiliate, parent or
subsidiary of Borrower, or an entity which has common officers or directors
with Borrower; (ii) the U.S. government or any agency or department of the U.S.
government unless Lender agrees in writing to accept the Receivable, Borrower
complies with the procedures in the Federal Assignment of Claims Act of 1940
(41 U.S.C.§15) with respect to the Receivable, and the underlying contract
expressly provides that neither the U.S. government nor any agency or
department thereof shall have the right of set-off against Borrower; or (iii)
any person or entity located in a foreign country unless (A) the Receivable is
supported by an irrevocable letter of credit issued by a bank acceptable to
Lender, and (B) if requested by Lender, the original of such letter of credit
and/or any usance drafts drawn under such letter of credit and accepted by the
issuing or confirming bank have been delivered to Lender.

 

(j)                                     The
Receivable is not in default (a Receivable will be considered in default if any
of the following occur: (i) the Receivable is not paid within 90 days from its
invoice date, provided however, Lender 
may, in its sole discretion, to consider Receivables not paid within 120
days from its invoice date as Eligible Receivables; (ii) the Account Debtor
obligated upon the Receivable suspends business, makes a general assignment for
the benefit of creditors, or fails to pay its debts generally as they come due;
or (iii) any petition is filed by or against the Account Debtor obligated upon
the Receivable under any bankruptcy law or any other law or laws for the relief
of debtors);

 

(k)                                  Intentionally
omitted.

 

(l)                                     The
Receivable does not arise from the sale of goods which remain in Borrower’s
possession or under Borrower’s control.

 

(m)                               The
Receivable is not evidenced by a promissory note or chattel paper, nor is the
Account Debtor obligated to Borrower under any other obligation which is
evidenced by a promissory note.

 

(n)                                 The
Receivable is otherwise acceptable to Lender.

 

“Event
of Default” has the meaning set forth in Section 9.1.

 

2

 

“Facility
Fee” means a payment of $10,000.00.

 

“Finance
Charge” means for each Reconciliation Period an interest amount equal to
the Finance Charge Percentage of the average daily Account Balance outstanding
during such Reconciliation Period.

 

“Finance
Charge Percentage” means a rate per year equal to Lender’s Prime Rate plus 1.50
percentage points; provided, however, that in the event Borrower
receives the Cash Infusion, then effective April 1, 2003 and thereafter the
Finance Charge Percentage shall decrease to a rate per year equal to Lender’s
Prime Rate plus 1.00 percentage points and in the event Borrower does not
receive the Cash Infusion, then effective April 1, 2003 and thereafter the
Finance Charge Percentage shall increase to a rate per year equal to Lender’s
Prime Rate plus 2.50 percentage points.

 

“Financed
Receivable” means a Receivable for which Lender makes an Advance pursuant
to a Funding Request.

 

“Funding
Request” means a writing signed by an authorized representative of Borrower
which accurately identifies the Receivables which Lender, at its election, is
being requested to finance, and includes for each such Receivable the correct
amount owed by the Account Debtor, the name and address of the Account Debtor,
the invoice number, the invoice date and the account code.

 

“Lender”
means Bridge Bank, National Association, and its successors and assigns.

 

“Maintenance
Fee” means for any Reconciliation Period, a fee equal to .45% of the
average daily balance of the Account Balance during such Reconciliation Period;
provided, however, that in the event Borrower receives the Cash
Infusion, then effective April 1, 2003 and thereafter the Maintenance Fee shall
be reduced to .15% and in the event Borrower does not receive the Cash
Infusion, then effective April 1, 2003 and thereafter the Maintenance Fee shall
increase to .75%.  Additionally, the
Maintenance Fee will increase an additional .50 percentage points from its then
current percentage during any period that an Event of Default has occurred and
is continuing.

 

“Obligations”
means all liabilities and obligations of Borrower to Lender of any kind or
nature, present or future, arising under or in connection with this Agreement
or under any other document, instrument or agreement, whether or not evidenced
by any note, guarantee or other instrument, whether arising on account or by
overdraft, whether direct or indirect (including those acquired by assignment)
absolute or contingent, primary or secondary, due or to become due, now owing
or hereafter arising, and however acquired; including, without limitation, all
Advances, Finance Charges, fees, interest, expenses, professional fees and
attorneys’ fees.

 

“Overadvance”
means that (a) as to the total amount of the Advances, the aggregate amount of
all unpaid Advances then outstanding exceeds the Credit Limit or (b) as to any
Advance (i) with respect to any Receivable which is not an Eligible Receivable,
the entire outstanding amount of such Advance, and (ii) in all other cases the
amount, if any, by which the outstanding amount of such Advance exceeds the
product of (i) the Advance Rate and (ii) the Receivable Amount of Financed
Receivable in respect of which such Advance was made.

 

“Prime
Rate” means the rate of interest publicly announced from time to time by
the Wall Street Journal as its Prime Rate, provided however, with respect to
the Borrowers Obligation’s under this Agreement, the Prime Rate will not be
less than 4.25%.  Lender may price loans
to its customers at, above, or below the Prime Rate.  Any change in the Prime Rate shall take effect at the opening of
business on the day specified in the public announcement of a change in the
Prime Rate.

 

“Recovery
Fee” means for any Collections which the Borrower has failed to remit as
required by the Agreement a fee of $5,000.

 

“Receivable
Amount” means as to any Receivable, the Receivable Amount due from the
Account Debtor after deducting all discounts, credits, offsets, payments or
other deductions of any nature whatsoever, whether or not claimed by the
Account Debtor.

 

3

 

“Receivables”
means Borrower’s rights to payment arising in the ordinary course of Borrower’s
business, including accounts, chattel paper, instruments, contract rights,
documents, general intangibles, letters of credit, drafts, and bankers
acceptances.

 

“Reconciliation
Date” means the last calendar day of each Reconciliation Period.

 

“Reconciliation
Period” means each calendar month.

 

“Refundable
Reserve” means for any Reconciliation Date:

 

(a)                                  The
total of the Earned Reserves as to all Financed Receivables as of such
Reconciliation Date,

 

minus

 

(b)                                 The
total for that Reconciliation Period ending on such Reconciliation Date of:

 

(i)             Maintenance Fees and
Recovery Fees;

 

(ii)          Finance Charges;

 

(iii)       Adjustments;

 

(iv)      Any outstanding Overadvance
Amounts; and

 

(v)         all amounts due,
including professional fees and expenses, as set forth in Section 11 for
which oral or written demand has been made by Lender to Borrower during that
Reconciliation Period to the extent Lender has agreed to accept payment thereof
by deduction from the Refundable Reserve.

 

“Reserve”
means as to any Financed Receivable the amount by which the Receivable Amount
of the Financed Receivable exceeds the Advance on that Financed Receivable.

 

“Reserve
Percentage” means 100% less the Advance Rate.

 

“Termination
Fee” means a payment of 1% percent of the Credit Limit.

 

1.2         Construction:

 

(a)          In this Agreement:  (a) references to the plural include
the singular and to the singular include the plural; (b) references to any
gender include any other gender; (c) the terms “include” and “including” are
not limiting; (d) the term “or” has the inclusive meaning represented by
the phrase “and/or,” (e) unless otherwise specified, section and subsection
references are to this Agreement, and (f) any reference to any statute, law, or
regulation shall include all amendments thereto and revisions thereof.

 

(b)         Neither this Agreement
nor any uncertainty or ambiguity herein shall be construed or resolved using
any presumption against either Borrower of Lender, whether under any rule of
construction or otherwise.  On the
contrary, this Agreement has been reviewed by each party hereto and their
respective counsel.  In case of any
ambiguity or uncertainty, this Agreement shall be construed and interpreted
according to the ordinary meaning of the words used to accomplish fairly the
purposes and intentions of all parties hereto.

 

(c)          Titles and section
headings used in this Agreement are for convenience only and shall not be used
in interpreting this Agreement.

 

4

 

2.               Financed
Receivables.

 

2.1         Funding Requests.  Borrower may request that Lender finance
Receivables by delivering to Lender a Funding Request for the Receivables for
which a request for financing is made. 
Lender shall be entitled to rely on all the information provided by
Borrower to Lender on or with the Funding Request and to rely on the signature
on any Funding Request as an authorized signature of Borrower.

 

2.2         Acceptance of
Receivables.  Lender has no
obligation to finance any Receivable and may exercise its sole discretion in
determining whether any Receivable is an Eligible Receivable before financing
such Receivable.  Upon acceptance by
Lender of any Receivable described in a Funding Request, Lender shall make an
Advance to Borrower in an amount equal to the Advance Rate multiplied by the
Receivable Amount of such Receivable. 
Upon Lender’s acceptance of the Receivable and payment to Borrower of
the Advance, the Receivable shall become a “Financed Receivable.”  It shall be a condition to each Advance that
(a) all of the representations and warranties set forth in Section 6
are true and correct on the date of such Advance as though made at and as of
each such date and (b) no Default has occurred and is continuing, or would
result from such Advance.  In no event
shall the Lender be obligated to make any Advance that results in an
Overadvance or while any Overadvance is outstanding.

 

2.3         Rights in Respect of
Financed Receivables.  Effective
upon Lender’s payment of an Advance, Lender shall have the exclusive right to
receive all Collections on the Financed Receivable and no Adjustments will be
made without the Lender’s consent. 
Lender shall have, with respect to any goods related to the Financed
Receivable, all the rights and remedies of an unpaid seller under the
California Uniform Commercial Code and other applicable law, including the
rights of replevin, claim and delivery, reclamation and stoppage in transit.

 

2.4         Reserve.  The Reserve is a book balance maintained on
the records of Lender and shall not be a segregated fund and is not the
property of Borrower.

 

2.5         Due Diligence.  Lender may at any time and from time to time
contact Account Debtors and other persons obligated or knowledgeable in respect
of Receivables to confirm the Receivable Amount of such Receivables, to
determine whether Receivables constitute Eligible Receivables, and for any
other purpose in connection with this Agreement.  Lender may audit Borrower’s Receivables and any and all records
pertaining to the Collateral, at Lender’s sole discretion and at Borrowers
expense.

 

3.               Collections,
Charges and Remittances.

 

3.1         Collections.  Lender shall credit Collections with respect
to Financed Receivables received by Lender to Borrower’s Account Balance within
three business days of the date received. 
If no Default has occurred and is continuing, Lender agrees to remit to
Borrower the amount of Collections it receives with respect to Receivables
other than Financed Receivables; provided that upon the occurrence and
during the continuance of any Default, Lender may apply all Collections to the
Obligations in such order and manner as Lender may determine.  Lender has no duty to do any act other than
to turn over such amounts as required above. 
If an item of Collections is not honored or Lender does not receive good
funds for any reason, the amount shall be included in the Account Balance as if
the Collections had not been received and Finance Charges under
Section 3.2 shall accrue thereon.

 

3.2         Finance Charges.  On each Reconciliation Date Borrower shall
pay to Lender the Finance Charge for the Reconciliation Period ending on such
Reconciliation Date.  Lender may deduct
the accrued Finance Charges as set forth in Section 3.5.

 

3.3         Fees.

 

(a)          Intentionally
omitted.

 

(b)         Maintenance Fee.  On each Reconciliation Date, Borrower shall
pay to Lender the Maintenance Fee for the Reconciliation Period ending on such
Reconciliation Date.

 

5

 

(c)          Intentionally
omitted.

 

(d)         Termination Fee.  In the event this Agreement is terminated
prior to the first anniversary of the date of this Agreement, Borrower shall
pay the Termination Fee to Lender.

 

(e)          Facility Fee.  Borrower shall pay the Facility Fee to
Lender promptly upon the execution of this Agreement.

 

(f)            Recovery Fee.  If Borrower fails to remit any Collections
to Lender as herein provided, Borrower shall in each case pay to Lender the
Recovery Fee for the amount of such Collections.

 

(g)         Intentionally omitted.

 

3.4         Reporting.  Within 15 days after the end of each
Reconciliation Period, Lender shall send to Borrower a report covering the
transactions for that Reconciliation Period, including the amount of all
Financed Receivables, all Collections, Adjustments, Finance Charges, and other
fees and charges.  The accounting shall
be deemed correct and conclusive unless Borrower makes written objection to
Lender within 30 days after the Lender mails the accounting to Borrower.

 

3.5         Reconciliations.  Unless a Default has occurred and is
continuing, Lender shall refund to Borrower after each Reconciliation Date, the
Refundable Reserve, if positive, for such Reconciliation Date by payment by any
means of payment acceptable to Borrower and Lender, subject to Lender’s rights
under Section 4.3 and Lender’s rights of offset and recoupment.  If the Refundable Reserve is negative,
Borrower shall immediately pay such amount in the same manner as set forth in
Section 4.3 for Overadvances.

 

3.6         Adjustments.  In the event of a breach of Sections 6
or 7, or in the event any Adjustment or dispute is asserted by any Account
Debtor, Borrower shall promptly advise Lender and shall, subject to the
Lender’s approval, resolve such disputes and advise Lender of any
adjustments.  Unless the Advance for the
disputed Financed Receivable is repaid in full, Lender shall have the right, at
any time, to take possession of any rejected, returned, or recovered personal
property.  If such possession is not
taken by Lender, Borrower is to resell it for Lender’s account at Borrower’s
expense with the proceeds made payable to Lender.  While Borrower retains possession of any returned goods, Borrower
shall segregate said goods and mark them as property of Lender.

 

3.7         Lockbox Account
Collection Services.  Borrower,
Lender and a lockbox provider acceptable to Lender shall immediately enter into
a three party agreement acceptable to Lender 
(the “Lockbox Agreement”). Borrower shall use the lockbox address as the
remit to and payment address for all of Borrower’s Collections and it will be
considered an immediate Event of Default if this does not occur or is not
operational within 60 days of the date of this Agreement   All Collections received to the lockbox
will be deposited to a non-interest bearing bank-control account maintained
with Lender and Borrower will not have access to that account.  Borrower will (i) immediately notify,
transfer and deliver to Lender all Collections Borrower receives and (ii)
deliver to Lender a detailed cash receipt’s journal on Friday of each week
until the lockbox is operational.  Additionally, Lender may request that Account Debtor’s pay (by
wire transfer or otherwise) Collections to Lender directly.  Lender reserves its right, in its sole
discretion, to notify the Account Debtors with respect to payments that should
be made to the lockbox.

 

4.               Recourse and
Overadvances.

 

4.1         Recourse.  Advances and the other Obligations shall be
with full recourse against Borrower.  If
any Advance is not repaid in full within 90 days from the date on which such
Advance is made, Borrower shall immediately pay the outstanding amount thereof
to Lender.

 

4.2         Overadvances.  Upon any occurrence of an Overadvance,
Borrower shall immediately pay down the Advances so that, after giving effect
to such payments, no Overadvance exists.

 

4.3         Borrower’s Payment.  When any Overadvance or other amount owing
to Lender becomes due, Lender shall inform Borrower of the manner of payment
which may be any one or more of the following in 

 

6

 

Lender’s
sole discretion:  (a) in cash
immediately upon demand therefor; (b) by delivery of substitute invoices
and an Funding Request acceptable to Lender which shall thereupon become
Financed Receivables; (c) by deduction from or offset against the
Refundable Reserve that would otherwise be due and payable to Borrower;
(d) by deduction from or offset against the amount that otherwise would be
forwarded to Borrower in respect of any further Advances that may be made by
Lender; or (e) by any combination of the foregoing as Lender may from time
to time choose.

 

5.               Power of
Attorney.  Borrower irrevocably
appoints Lender and its successors and assigns as Borrower’s true and lawful
attorney in fact, and authorizes Lender:

 

(a)          whether or not there has
been an Event of Default:

 

(i) to notify all Account
Debtors to pay Lender directly;

 

(ii)
to receive and open all mail addressed to Borrower which in Lender’s judgment,
may contain proceeds of Collateral;

 

(iii) to endorse
Borrower’s name on any checks or other forms of payment on the Receivables;

 

(iv)
to execute on behalf of Borrower any documents, financing statements and the
like to perfect Lender’s interests in the Receivables and Collateral;

 

(v) to do all acts and
things necessary or expedient, in furtherance of any such purpose; and

 

(b)         upon the occurrence and
continuance of an Event of Default:

 

(i) to sell, assign,
transfer, pledge, compromise, or discharge the whole or any part of the
Receivables;

 

(ii)
to demand, collect, receive, sue, and give releases to any Account Debtor for
the monies due or which may become due upon or with respect to the Receivables
and to compromise, prosecute, or defend any action, claim, case or proceeding
relating to the Receivables, including the filing of a claim or the voting of
such claims in any bankruptcy case, all in Lender’s name or Borrower’s name, as
Lender may choose;

 

(iii)
to prepare, file and sign Borrower’s name on any notice, claim, assignment,
demand, draft, or notice of or satisfaction of lien or mechanics’ lien or
similar document with respect to Receivables;

 

6.               Representations
and Warranties.  Borrower
represents and warrants:

 

(a)          With respect to each
Financed Receivable:

 

(i)                                     It
is the owner with legal right to sell, transfer and assign it;

 

(ii)                                  The
correct Receivable Amount is on the Funding Request and is not disputed;

 

(iii)                               Such
Financed Receivable is an Eligible Receivable;

 

(iv)                              Lender
has the right to endorse and/ or require Borrower to endorse all payments
received on Financed Receivables and all proceeds of Collateral; and

 

(v)                                 No
representation, warranty or other statement of Borrower in any certificate or
written statement given to Lender contains any untrue statement of a material
fact or omits to state a material fact necessary to make the statement
contained in the certificates or statement not misleading.

 

(b)         Borrower is duly existing
and in good standing in its state of formation and qualified and licensed to do
business in, and in good standing in, any state in which the conduct of its
business or its ownership of property requires that it be qualified.

 

(c)          The execution, delivery
and performance of this Agreement has been duly authorized, and does not
conflict with Borrower’s organizational documents, nor constitute an Event of
Default under any material agreement by which Borrower is bound.  Borrower is not in default under any
agreement to which or by which it is bound.

 

7

 

(d)         Borrower has good title
to the Collateral and all inventory is in all material respects of good and
marketable quality, free from material defects.

 

(e)          Borrower’s name, form of
organization, chief executive office, and the place where the records
concerning all Financed Receivables and Collateral are kept is set forth at the
beginning of this Agreement, Borrower is located at its address for notices set
forth in this Agreement.

 

(f)            If Borrower owns,
holds or has any interest in, any copyrights (whether registered, or
unregistered), patents or trademarks, and licenses of any of the foregoing,
such interest has been specifically disclosed and identified to Lender in
writing.

 

(g)         Pursuant to that certain
Purchase Agreement, dated as of May 30, 2000 (the “Purchase Agreement”), by and
among Cypress Financial Services, Inc., Orange County Professional Services,
Inc., Hospital Employee Labor Pool (“HELP”), Russell Mohrmann, Suzette M.
Mohrmann, and Allen Berman, Borrower has been granted all right, title, and
interest in and to any telephone numbers, domain name registrations, URL’s,
websites, trade names, trademarks, service names, brand names, labels,
registrations, or licenses held by HELP (including, but not limited to, the
names “Hospital Employee Labor Pool” and “HELP,” and any derivations thereof as
well as any trade names or trademarks acquired by HELP from any predecessor
owners or with respect to any predecessor entity. 

 

7.               Miscellaneous
Provisions.  Borrower will:

 

(a)          Maintain its corporate
existence and good standing in its jurisdictions of incorporation and maintain
its qualification in each jurisdiction necessary to Borrower’s business or
operations.

 

(b)         Give Lender at least 30
days prior written notice of changes to its name, organization, chief executive
office or location of records.

 

(c)          Pay all its taxes
including gross payroll, withholding and sales taxes when due and will deliver
satisfactory evidence of payment to Lender if requested.

 

(d)         Provide to Lender a
written report within (i) 20 days, if payment of any Financed Receivable does
not occur by its due date and include the reasons for the delay with respect to
Financed Receivables in an amount greater than $2,000.00 and (ii) 30 days, if
payment of any Financed Receivable does not occur by its due date and include
the reasons for the delay with respect to Financed Receivables in an amount
equal to or less than $2,000.00.

 

(e)          Give Lender copies of
all Forms 10-K, 10-Q and 8-K (or equivalents) within 5 days of filing with the
Securities and Exchange Commission, while any Financed Receivable is
outstanding.

 

(f)            Execute any further
instruments and take further action as Lender requests to perfect or continue
Lender’s security interest in the Collateral or to effect the purposes of this
Agreement.

 

(g)         Provide Lender with a
Compliance Certificate no later than 30 days following each quarter end or as
requested by Lender.

 

(h)         Immediately notify,
transfer and deliver to Lender all Collections Borrower receives.

 

(i)             Not create, incur,
assume, or be liable for any indebtedness with the exception of (i) Borrowers
existing indebtedness described in Exhibit “B” attached hereto and (ii)
indebtedness incurred in the ordinary course of Borrower’s business, provided
however, not to exceed an amount in aggregate greater than $100,000.

 

(j)             Immediately notify
Lender if Borrower hereafter obtains any interest in any copyrights, patents,
trademarks or licenses that are significant in value or are material to the
conduct of its business or the value of any Financed Receivable.

 

(k)          Provide to Lender not
less than 45 days after the end of each month the following with respect to
Borrower’s financial condition and results of operations for such month and the
period then ending: balance 

 

8

 

sheet,
income statement; statement of cashflows, accounts receivable and payable
aging, collections payable report, and such other matters as Lender may
request.

 

(l)             Provide to Lender
promptly upon the execution hereof, a subordination agreement by Russ Morhmann,
Suzette M. Mohramm, Robert Perez, Barbara C. Perez, [Hospital Employee Labor
Pool], RBA Rem-Care, Inc., FBR Financial Partners, L.P., and Insource Medical
Solutions, LLC, in favor of Lender which shall be in form satisfactory to
Lender.

 

(m)       On a monthly basis
Borrower’s net income will not have a negative variance greater than 25% (the
“Net Income Requirement”) from it’s plan which shall be agreed to by both
Lender and Borrower.  Borrower
acknowledges that there will be a pricing adjustment in the event Borrower
misses the Net Income Requirement, which shall be agreed to by both Borrower
and Lender.

 

(n)         Within [30] days of the
execution of this Agreement, file a Fictitious Business Name Statement in
[Nevada] with the following name: 
“RevCare, Inc. DBA Hospital Employee Labor Pool.”  Borrower will also ensure that HELP changes
its name to a name which is sufficiently dissimilar to its current name, as
required under the Purchase Agreement.

 

(o)         Maintain its primary
operating account at Lender.

 

8.               Security
Interest.  To secure the prompt
payment and performance to Lender of all of the Obligations, Borrower hereby
grants to Lender a continuing security interest in the Collateral.  Borrower is not authorized to sell, assign,
transfer or otherwise convey any Collateral without Lender’s prior written
consent, except for the sale of finished inventory in the Borrower’s usual
course of business.  Borrower agrees to
sign any instruments and documents requested by Lender to evidence, perfect, or
protect the interests of Lender in the Collateral.  Borrower agrees to deliver to Lender the originals of all
instruments, chattel paper and documents evidencing or related to the
Receivables and Collateral.  Borrower
shall not grant or permit any lien or security interest in the Collateral or any
interest therein.

 

9.               Default and Remedies.

 

9.1         Events of Default.  The occurrence of any one or more of the
following shall constitute an Event of Default hereunder.

 

(a)                                  Failure
to Pay.  Borrower fails to make a
payment under this Agreement.

 

(b)                                 Lien
Priority.  Lender fails to have an
enforceable first lien (except for any prior liens to which Lender has
consented in writing) on or security interest in the Collateral.

 

(c)                                  False
Information.  Borrower (or any
guarantor) has given Lender false or misleading information or representations.

 

(d)                                 Death.  If Borrower is a partnership, any general
partner dies or becomes legally incompetent; or any guarantor dies or becomes
legally incompetent.

 

(e)                                  Bankruptcy.  Borrower (or any guarantor) files a
bankruptcy petition, a bankruptcy petition is filed against Borrower (or any
guarantor) or Borrower (or any guarantor) makes a general assignment for the
benefit of creditors.

 

(f)                                    Receivers.  A receiver or similar official is appointed
for a substantial portion of Borrower’s (or any guarantor’s) business, or the
business is terminated.

 

(g)                                 Judgments.  Any judgments or arbitration awards are
entered against Borrower in an amount greater than $100,000 (or any guarantor),
or Borrower (or any guarantor) enters into any settlement agreements with
respect to any litigation or arbitration.

 

(h)                                 Material
Adverse Change.  A material adverse
change occurs, or is reasonably likely to occur, in Borrower’s (or any
guarantor’s) business condition (financial or otherwise), operations,
properties or prospects, or ability to repay the credit; or Lender determines
that it is insecure for any 

 

9

 

other reason.

 

(i)                                     Cross-default.  Any default occurs under any agreement in
connection with any credit Borrower (or any guarantor) or any of Borrower’s
related entities or affiliates has obtained from anyone else or which Borrower
(or any guarantor) or any of Borrower’s related entities or affiliates has
guaranteed.

 

(j)                                     Default
under Related Documents.  Any
default occurs under any guaranty, subordination agreement, security agreement,
deed of trust, mortgage, or other document required by or delivered in
connection with this Agreement or any such document is no longer in effect.

 

(k)                                  Other
Agreements.  Borrower (or any
guarantor) or any of Borrower’s related entities or affiliates fails to meet
the conditions of, or fails to perform any obligation under any other agreement
Borrower (or any guarantor) or any of Borrower’s related entities or affiliates
has with Lender or any affiliate of Lender.

 

(l)                                     Other
Breach Under Agreement.  Borrower
fails to meet the conditions of, or fails to perform any obligation under, any
term of this Agreement not specifically referred to above.

 

9.2         Remedies.  Upon the occurrence of an Event of Default,
(1) without implying any obligation to do so, Lender may cease making
Advances or extending any other financial accommodations to Borrower;
(2) all or a portion of the Obligations shall be, at the option of and
upon demand by Lender, or with respect to an Event of Default described in
Section 9.1(e), automatically and without notice or demand, due and
payable in full; and (3) Lender shall have and may exercise all the rights
and remedies under this Agreement and under applicable law, including the
rights and remedies of a secured party under the California Uniform Commercial
Code, all the power of attorney rights described in Section 5 with respect
to all Collateral, and the right to collect, dispose of, sell, lease, use, and
realize upon all Financed Receivables and all Collateral in any commercial
reasonable manner..

 

10.         Accrual of Interest.  If any amount owed by Borrower hereunder is
not paid when due, including, without limitation, amounts due under
Section 3.3, Overadvances, amounts due under Section 11, and any
other Obligations, such amounts shall bear interest at a per annum rate equal
to the per annum rate of the Finance Charges until the earlier of
(i) payment in good funds or (ii) entry of a final judgment thereof,
at which time the principal amount of any money judgment remaining unsatisfied
shall accrue interest at (i) a rate not to exceed two times the fees set forth
in Section 3.3 above or (ii) a rate greater than (i) if agreed to by both
Lender and Borrower.  All interest and
Finance Charges hereunder calculated at an annual rate shall be based on a year
of 360 days, which results in a higher effective rate of interest than if a
year of 365 or 366 days were used.

 

11.         Fees, Costs and
Expenses; Indemnification.  The
Borrower will pay to Lender upon demand all fees, costs and expenses (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, (b) any
litigation or dispute (whether instituted by Lender, Borrower or any other
person) in any way relating to the Financed Receivables, the Collateral, this
Agreement or any other agreement executed in connection herewith or therewith,
(c) enforcing any rights against Borrower or any guarantor, or any Account
Debtor, (d) protecting or enforcing its interest in the Financed
Receivables or the Collateral, (e) collecting the Financed Receivables and
the Obligations, or (f) the representation of Lender in connection with
any bankruptcy case or insolvency proceeding involving Borrower, any Financed
Receivable, the Collateral, any Account Debtor, or any guarantor.  Borrower 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.

 

12.         Integration,
Severability, Waiver, and Choice of Law. 
This Agreement and any related security or other agreements required by
this Agreement, collectively: (a) represent the sum of the understandings and 

 

10

 

agreements
between Lender and Borrower concerning this credit; (b) replace any prior oral
or written agreements between Lender and Borrower concerning this credit; and
(c) are intended by Lender and Borrower as the final, complete and exclusive
statement of the terms agreed to by them. 
In the event of any conflict between this Agreement and any other
agreements required by this Agreement, this Agreement will prevail.  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.  Lender retains all of its
rights, even if it makes an Advance after a default.  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.

 

13.         Notices.  All notices shall be given to Lender and
Borrower at the addresses or faxes set forth on the signature page of this Agreement
and shall be deemed to have been delivered and received: (a) if mailed,
three (3) calendar days after deposited in the United States mail, first class,
postage pre-paid, (b) one (1) calendar day after deposit with an overnight
mail or messenger service; or (c) on the same date of confirmed
transmission if sent by hand delivery, telecopy, telefax or telex.

 

14.         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 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 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.

 

15.         Term and Termination.  This Agreement shall automatically renew
upon the one year anniversary of the execution hereof, and shall continue to
renew each subsequent year, unless earlier terminated by either party. Borrower
and Lender each have the right to terminate the financing of Receivables under
this Agreement at any time upon notice to the other; provided that no
such termination shall affect Lender’s security interest in the Financed
Receivables and other Collateral, and this Agreement shall continue to be
effective, and Lender’s rights and remedies hereunder shall survive any such
termination, until all transactions entered into and Obligations incurred
hereunder or in connection herewith have been completed and satisfied in
full.  Upon any such termination,
Borrower shall, upon demand by Lender, immediately repay all Advances then
outstanding.

 

16.         Other Agreements.  Any security agreements, liens and/or
security interests securing payment of any obligations of Borrower owing to
Lender or its affiliates also secure the Obligations, and are valid and
subsisting and are not adversely affected by execution of this Agreement.  An Event of Default under this Agreement
constitutes a default under other outstanding agreements between Borrower and
Lender or its affiliates.

 

11

 

IN
WITNESS WHEREOF, Borrower and Lender have executed this Agreement on the day
and year above written.

 

 

	
  BORROWER:

  	
   

  	
  LENDER:

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  REVCARE, INC.

  	
  BRIDGE BANK,
  NATIONAL ASSOCIATION

  
	
   

  	
   

  
	
   

  	
   

  
	
  By

  	
  /s/ Manuel Occiano

  	
   

  	
  By

  	
  /s/ Lee Shodiss

  	
   

  
	
  Name: 

  	
  Manuel Occiano

  	
   

  	
  Name:

  	
  Lee Shodiss

  	
   

  
	
  Title: 

  	
  CEO

  	
   

  	
  Title:

  	
  Sr. Vice
  President/Manager

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Address for
  Notices: 

  	
   

  	
   

  	
  Address for
  Notices:

  	
   

  	
   

  
	
  5400 Orange
  Avenue  

  	
   

  	
  2120 El Camino
  Real

  
	
   

  	
   

  	
   

  
	
  Cypress, CA
  90630

  	
   

  	
  Santa Clara, CA
  95050

  
	
   

  	
   

  	
   

  
	
  (714) 243-3401

  	
   

  	
  Fax (408)
  982-2112

  
															

 

12

 

EXHIBIT A

 

(to UCC-1)

 

The
Collateral shall consist of all right, title and interest of Debtor, whether
now existing or hereafter acquired or created, in and to the following:

 

(a)          All goods, inventory,
merchandise, raw materials, parts, supplies, packing and shipping materials,
work in process and finished products including such inventory as is
temporarily out of Debtor’s custody or possession or in transit and including
any returns upon any accounts or other proceeds, including insurance proceeds, resulting
from the sale or disposition of any of the foregoing and any documents of title
representing any of the above;

 

(b)         All general intangibles
(other than the “Intellectual Property” described in paragraph (e)), contract
right, leases, license agreements, franchise agreements, blueprints, drawings,
purchase orders, customer lists, route lists, infringements, claims, computer
programs, computer discs, computer tapes, literature, reports, catalogs, design
rights, income tax refunds, payments of insurance and rights to payment of any
kind;

 

(c)          All accounts, contract
rights, royalties, license rights and all other forms of obligations owing to
Debtor, whether or not arising out of the sale or lease of goods, the licensing
of technology or the rendering of services by Debtor, and whether or not earned
by performance, and any and all credit insurance, guaranties, and other
security therefor, as well as all merchandise returned to or reclaimed by
Debtor;

 

(d)         All documents, cash,
deposit accounts, securities, investment property, letters of credit,
certificates of deposit, instruments and chattel paper and Debtor’s books
relating to the foregoing;

 

(e)          All goodwill,
trademarks, servicemarks, trade styles, trade names, patents, patent
applications, copyright rights, copyright applications, copyright registrations
and like protections in each work of authorship and derivative work thereof,
whether published or unpublished; all trade secret rights, including all rights
to unpatented inventions, know-how, operating manuals, license rights and
agreements and confidential information, now owned or hereafter acquired; all
mask work or similar rights available for the protection of semiconductor
chips; all claims for damages by way of any past, present and future infringement
of any of the foregoing (collectively the “Intellectual Property”).  Lender’s Security Interest in any
Intellectual Property is only to the extent that (i) such Intellectual Property
is proceeds of collateral other than Intellectual Property or (ii) any
collateral described in paragraph (c) above is proceeds of such Intellectual
Property; and

 

(f)            All Debtor’s books
relating to the foregoing and any and all claims, rights and interests in any
of the above and all substitutions for, additions and accessions to and
proceeds thereof.

 

1

 

EXHIBIT B

 

(Borrower’s Existing Indebtedness)

 

 

[list
all existing Indebtedness of Borrower as required under Section 7(i)

 

1

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