Document:

Exhibit 10.3

 

AMENDED

AND RESTATED SECURED CONVERTIBLE PROMISSORY NOTE

 

THE SECURITIES REPRESENTED BY THIS NOTE HAVE NOT BEEN REGISTERED UNDER

THE SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES ACT”) OR THE LAWS

OF ANY STATE.  THIS NOTE AND THE SECURITIES

ISSUABLE UPON THE CONVERSION HEREOF MAY BE PLEDGED, HYPOTHECATED, SOLD,

TRANSFERRED OR OTHERWISE DISPOSED ONLY IF REGISTERED AND QUALIFIED PURSUANT TO

THE RELEVANT PROVISIONS OF FEDERAL AND STATE SECURITIES LAWS OR IF MAKER IS

PROVIDED AN OPINION OF COUNSEL, WHICH OPINION IS SATISFACTORY IN FORM AND

SUBSTANCE TO MAKER, TO THE EFFECT THAT SUCH REGISTRATION AND QUALIFICATION IS

NOT REQUIRED.

 

THE SALE, PLEDGE, HYPOTHECATION OR TRANSFER AND THE VOTING OF THE

SECURITIES REPRESENTED BY THIS NOTE IS SUBJECT TO THE TERMS AND CONDITIONS OF A

CERTAIN STOCK RESTRICTION AGREEMENT BY AND BETWEEN MAKER AND CERTAIN HOLDERS OF

SECURITIES OF MAKER.  COPIES OF SUCH

AGREEMENT MAY BE OBTAINED UPON WRITTEN REQUEST TO THE SECRETARY OF MAKER.

 

	

  $1,373,981.03

  	

  January 8, 2003

  

 

FOR VALUE RECEIVED, RevCare Inc., a Nevada

corporation (“Maker”), promises to pay to Russ Mohrmann, an individual, and

Suzette M. Mohrmann an individual (collectively, “Holder”), at 9432 Walker

Ranch Circle, Villa Park, CA 92861 the principal sum of One Million Three

Hundred Seventy Three Thousand Nine Hundred Eighty One and 03/100 Dollars

($1,373,981.03), plus interest thereon from the date hereof until paid on

the terms set forth below; provided, however, that in the event

this Note is converted into Common Stock (as defined herein) as provided

herein, any obligation of Maker with respect to payment of such amount, other

than any interest accrued but unpaid thereon, shall be terminated.

 

1.                                       Maturity Date.  The unpaid principal balance of this Note

and all accrued but unpaid interest shall be due and payable on January 5,

2004, unless this Note is earlier converted or paid in accordance with the

terms hereof.

 

2.                                       Interest.  The unpaid principal balance outstanding

under this Note shall bear interest at a rate equal to eight percent (8%) per

annum, compounded annually in the event this Note is not paid in full on

January 5, 2004.

 

3.                                       Security

Interest.  Payment of this Note is

secured by a security interest in certain collateral, pursuant to the terms and

conditions of that certain Security Agreement entered into between Maker and

Holder concurrently with the execution of this Note (the “Security Agreement”).

 

4.                                       Default;

Acceleration.  The entire sum of

unpaid principal and any accrued but unpaid interest hereunder shall become

immediately due and payable without further notice,

 

1

 

demand or presentment, at Holder’s option, upon the occurrence at any

time of any of the following events of default:

 

4.1                                 Default

in the payment of any installment of principal or interest when due should such

default not be cured within ten (10) days after written notice thereof is

delivered to Maker at its last known address; or

 

4.2                                 Default

under the Security Agreement should such default not be cured within ten (10)

days after written notice thereof is delivered to Maker at its last known

address; or

 

4.3                                 Termination

of that certain Employment Agreement between Russ Mohrmann (“Executive”) and

Maker of even date herewith by Maker for any reason other than “Cause.”  For purposes of this Note, “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 Maker 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 Maker 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 of Directors of Maker

(the “Board”), (iv) gross negligence or willful misconduct with respect to

Maker or any of its subsidiaries or (v) any material breach of the Employment

Agreement; or

 

4.4                                 An

assignment by Maker of substantially all of its assets for the benefit of

creditors; or

 

4.5                                 The

adjudication of Maker as a bankrupt (in involuntary or voluntary proceedings);

or

 

4.6                                 The

filing by Maker of a petition under the Federal Bankruptcy Act or any

comparable state law for a reorganization, arrangement or other judicial

protection upon insolvency; or

 

4.7                                 The

incurrence of any indebtedness by Maker or any of its subsidiaries other than

to pay off indebtedness owed by Maker to Bridge Bank, NA; or

 

4.8                                 The

sale of capital stock of Maker or any of its subsidiaries with gross proceeds

to Maker and/or its subsidiaries in excess of One Million Dollars ($1,000,000),

other than to pay off indebtedness owed by Maker to Bridge Bank, NA; or

 

4.9                                 The

sale of substantially all of the assets of Maker or any of its subsidiaries

other than to pay off indebtedness owed by Maker to Bridge Bank, NA; or

 

4.10                           The

filing of any form, report or document required to be filed with the Securities

and Exchange Commission (“SEC”) in accordance with the requirements of the

Securities Act or the Securities and Exchange Act of 1934, as amended, and the

rules and regulations of the SEC thereunder which reflects that total

shareholders’ equity is below Two

 

2

 

Million Seven Hundred Thousand Dollars ($2,700,000); should such

default not be cured within ten (10) days after written notice thereof is

delivered to Maker at its last known address. 

The foregoing option to accelerate the indebtedness evidenced hereby may

be exercised by Holder at any time after the occurrence of any of the events of

default.  The failure to exercise said

option upon the occurrence of one or more of such events of default shall not

prevent its exercise upon the reoccurrence of such an event of default or upon

the occurrence of any other event of default.

 

5.                                       Conversion.

 

5.1                                 Optional

Conversion.  All or any portion of

the unpaid principal balance outstanding under this Note may be converted into

fully paid and nonassessable shares of Common Stock, $.001 par value per share,

of Maker (the “Common Stock”) at any time during the term of this Note at the

option of Holder.  The number of shares

of Common Stock into which this Note is to be converted shall be determined by

dividing said unpaid principal balance by $0.735 (the “Conversion

Price”), subject to adjustment as provided in Section 7 below, with any accrued

but unpaid interest paid in cash at the time of conversion.

 

5.2                                 Notice

of Conversion.  If Holder desires to

convert the Note, Holder shall provide written notice to Maker at 5400 Orange

Avenue, Suite 200, Cypress, California 

90630, Attention:  Manuel

Occiano, notifying Maker of the requested conversion to be effected.  Within ten (10) days of receipt of such

notice, Maker shall respond to Holder’s request in writing, specifying the

number of shares of Common Stock to be issued upon conversion, the amount of

accrued interest to be paid in cash and the date on which such conversion will

occur and calling upon such Holder to surrender to Maker, in the manner and at

the place designated, this Note.  Such

response by Maker shall be delivered to Holder at the address last shown on the

records of Maker for Holder or given by Holder to Maker for the purpose of

notice.

 

5.3                                 Mechanics

and Effect of Conversion.  No

fractional shares of Common Stock shall be issued upon conversion of this

Note.  In lieu of issuing any fractional

shares to Holder upon the conversion of this Note, Maker shall pay to Holder

the amount of outstanding principal that is not so converted.  Upon the conversion of this Note, Holder

shall surrender this Note, duly endorsed, at the principal office of Maker.  Upon conversion of this Note, Maker shall be

forever released from all its obligations and liabilities under this Note.

 

5.4                                 Delivery

of Stock Certificates.  As promptly

as practicable after the conversion of this Note, Maker at its expense will

cause to be issued and delivered to Holder a certificate or certificates for

the number of full shares of Common Stock issuable upon such conversion

(bearing such legends as are required by applicable state and federal

securities laws in the opinion of counsel to Maker), together with a check

payable to Holder for any cash amounts payable for any accrued but unpaid

interest and fractional shares as described above.  In the event only a portion of this Note is converted, Maker

shall, at the time of delivery of the stock certificate or certificates,

deliver to Holder a new Note evidencing the remaining unpaid principal balance

of this Note, which Note shall in all other respects be identical with this

Note.

 

3

 

6.                                       Maker Right

to Prepay Note.  Subject to the

earlier conversion of this Note pursuant to Section 5 above, all or any portion

of the unpaid principal balance outstanding under this Note may be prepaid at

any time during the term of this Note at the option of Maker.  In the event Maker elects to prepay this

Note, notice of such election shall be given to Holder not less than sixty (60)

days prior to the date of prepayment. 

Each such notice shall state the amount of principal to be paid in cash,

the date on which such prepayment will occur and the place at which Holder is

to surrender this Note to Maker.  Such

notice by Maker shall be delivered to Holder at the address last shown on the

records of Maker for Holder or given by Holder to Maker for the purpose of notice.  In the event only a portion of this Note is

prepaid, Maker shall, at the time of prepayment and receipt of this Note,

deliver to Holder a new Note evidencing the remaining unpaid principal balance

of this Note, which Note shall in all other respects be identical with this

Note.

 

7.                                       Adjustments.  The Conversion Price and the number of

shares into which this Note may be converted are subject to adjustment from

time to time as follows:

 

7.1                                 Reclassifications,

etc.  If Maker, at any time while

this Note, or any portion thereof, remains outstanding and unexpired by

reclassification of securities or otherwise, shall change any of the securities

as to which conversion rights under this Note exist into the same or a

different number of securities or any other class or classes, this Note shall

thereafter represent the right to acquire such number and kinds of securities

that were subject to the conversion rights under this Note immediately prior to

such reclassification or other change and the Conversion Price therefor shall

be appropriately adjusted.

 

7.2                                 Split,

Subdivision or Combination of Shares. 

If Maker, at any time with this Note, or any portion thereof, remains

outstanding and unexpired shall split, subdivide or combine the securities as

to which conversion rights under this Note exist into a different number of

securities of the same class, then (i) in the case of a split or subdivision,

the Conversion Price for such securities shall be proportionately decreased and

the securities issuable upon conversion of this Note shall be proportionately

increased, and (ii) in the case of a combination, the Conversion Price for such

securities shall be proportionately increased and the securities issuable upon

conversion of this Note shall be proportionately decreased.

 

8.                                       Investment

Representations.  Holder

acknowledges that this Note and the Common Stock issuable upon the conversion

of this Note (i) constitute “securities” under federal and applicable state

securities laws, (ii) will be unregistered as such, and (iii) are being

transferred in reliance upon exemptions from registration based, in part, upon

Holder’s representations contained herein. 

Holder is acquiring such securities for its own account and not with a

view to, or for sale in connection with, any distribution thereof.

 

9.                                       Offset.  Maker shall be entitled to offset amounts

otherwise payable by Holder to Maker pursuant to Sections 1.4.3 and 7.1.1 of

that certain Purchase Agreement made and effective as of May 30, 2000

among Maker, Holder and certain other parties named therein.

 

10.                                 No Assignment.  Neither Maker nor Holder shall be entitled

to assign, pledge, transfer or otherwise convey the benefits or burdens of this

Note without the prior written consent of the other, except that any entity

acquiring all or substantially all of the assets or stock

 

4

 

of Maker shall

automatically acquire the burdens of this Note, however, Maker shall not be

released from its obligations hereunder.

 

11.                                 No Stockholder Rights.  Prior to the conversion hereof, nothing

contained in this Note shall be construed as conferring upon Holder or any

other person the right to vote or to consent or to receive notice as a

stockholder in respect of meetings of stockholders for the election of

directors of Maker or any other matters or any rights whatsoever as a

stockholder of Maker.

 

12.                                 Applicable Law.  This Note and the rights and obligations of

the parties hereunder shall be construed under, and governed by, the laws of

the State of California without giving effect to conflict of laws provisions.

 

13.                                 Attorneys’ Fees.  In the event of any suit, action or

arbitration to enforce any of the terms or provisions of this Note, the

prevailing party shall be entitled to its reasonable attorneys’ fees and

costs.  The foregoing entitlement shall

also include attorneys’ fees and costs of the prevailing party on any appeal of

a judgment and for any action to enforce a judgment.

 

14.                                 Amendment and

Restatement of Prior Note.  This

Note contemporaneously amends and restates, in its entirety, that certain

Secured Convertible Promissory Note dated August 14, 2000 issued by Maker

in favor of Holder in the original principal amount of $1,225,000.

 

 

[Remainder of page intentionally left blank]

 

5

 

15.                                 Subordination.  This Note and the rights of  Holder hereunder and under the Security

Agreement are subordinate to the rights of Bridge Bank, NA pursuant to the

terms of a Subordination Agreement (the “Subordination Agreement”).  Nothing contained in this Note shall

directly or indirectly modify the provisions of the Subordination Agreement in

any manner which might terminate or impair the subordination of the

Subordinated Debt (as defined in the Subordination Agreement) or the

subordination of the security interest or lien that Holder may have in any

property of Maker or its subsidiaries.

 

 

	

   

  	

  RevCare, Inc.

  
	

   

  	

  a Nevada corporation

  
	

   

  	

   

  
	

   

  	

   

  
	

   

  	

  By:

  	

  /s/ Fred McGee

  
	

   

  	

  Name:

  	

  Fred McGee

  
	

   

  	

  Title:

  	

  CFO

  
	

   

  	

   

  
	

  Acknowledged and Agreed:

  	

   

  
	

   

  	

   

  
	

   

  	

   

  
	

  /s/ Russell E. Mohrmann

  	

   

  	

   

  
	

  Russ Mohrmann

  	

   

  
	

   

  	

   

  
	

   

  	

   

  
	

  /s/ Suzette Mohrmann

  	

   

  	

   

  
	

  Suzette Mohrmann

  	

   

  

 

 

DO NOT DESTROY THIS

ORIGINAL NOTE: When paid, said original Note must be surrendered to Maker for

cancellation and retention.

 

6Exhibit
10.4

 

AMENDED
AND RESTATED SECURED CONVERTIBLE PROMISSORY NOTE

 

THE SECURITIES REPRESENTED BY THIS NOTE HAVE NOT BEEN REGISTERED UNDER
THE SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES ACT”) OR THE LAWS
OF ANY STATE.  THIS NOTE AND THE SECURITIES
ISSUABLE UPON THE CONVERSION HEREOF MAY BE PLEDGED, HYPOTHECATED, SOLD,
TRANSFERRED OR OTHERWISE DISPOSED ONLY IF REGISTERED AND QUALIFIED PURSUANT TO
THE RELEVANT PROVISIONS OF FEDERAL AND STATE SECURITIES LAWS OR IF MAKER IS
PROVIDED AN OPINION OF COUNSEL, WHICH OPINION IS SATISFACTORY IN FORM AND
SUBSTANCE TO MAKER, TO THE EFFECT THAT SUCH REGISTRATION AND QUALIFICATION IS
NOT REQUIRED.

 

THE SALE, PLEDGE, HYPOTHECATION OR TRANSFER AND THE VOTING OF THE
SECURITIES REPRESENTED BY THIS NOTE IS SUBJECT TO THE TERMS AND CONDITIONS OF A
CERTAIN STOCK RESTRICTION AGREEMENT BY AND BETWEEN MAKER AND CERTAIN HOLDERS OF
SECURITIES OF MAKER.  COPIES OF SUCH
AGREEMENT MAY BE OBTAINED UPON WRITTEN REQUEST TO THE SECRETARY OF MAKER.

 

 

	
  $412,435.40

  	
   

  	
  January 8,
  2003

  

 

FOR VALUE RECEIVED, RevCare Inc., a Nevada corporation
(“Maker”),
promises to pay to RBA Rem-Care, Inc. (“Holder”), at 9432 Walker Ranch Circle,
Villa Park, CA 92861 the principal sum of Four Hundred Twelve Thousand Four
Hundred Thirty Five and 40/100 Dollars ($412,435.40), plus interest thereon
from the date hereof until paid on the terms set forth below; provided, however,
that in the event this Note is converted into Common Stock (as defined herein)
as provided herein, any obligation of Maker with respect to payment of such
amount, other than any interest accrued but unpaid thereon, shall be
terminated.

 

1.                                       Maturity
Date.  The unpaid principal balance
of this Note and all accrued but unpaid interest shall be due and payable on
January 5, 2004, unless this Note is earlier converted or paid in
accordance with the terms hereof.

 

2.                                       Interest.  The unpaid principal balance outstanding
under this Note shall bear interest at a rate equal to eight percent (8%) per
annum, compounded annually in the event this Note is not paid in full on
January 5, 2004.

 

3.                                       Security
Interest.  Payment of this Note is
secured by a security interest in certain collateral, pursuant to the terms and
conditions of that certain Security Agreement entered into between Maker and
Holder concurrently with the execution of this Note (the “Security Agreement”).

 

4.                                       Default;
Acceleration.  The entire sum of
unpaid principal and any accrued but unpaid interest hereunder shall become
immediately due and payable without further notice,

 

1

 

demand or presentment, at Holder’s option, upon the occurrence at any
time of any of the following events of default:

 

4.1                                 Default
in the payment of any installment of principal or interest when due should such
default not be cured within ten (10) days after written notice thereof is
delivered to Maker at its last known address; or

 

4.2                                 Default
under the Security Agreement should such default not be cured within ten (10)
days after written notice thereof is delivered to Maker at its last known
address; or

 

4.3                                 Termination
of that certain Employment Agreement between Russ Mohrmann (“Executive”) and
Maker of even date herewith by Maker for any reason other than “Cause.”  For purposes of this Note, “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 Maker 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 Maker 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 of Directors of Maker
(the “Board”), (iv) gross negligence or willful misconduct with respect to
Maker or any of its subsidiaries or (v) any material breach of the Employment
Agreement; or

 

4.4                                 An
assignment by Maker of substantially all of its assets for the benefit of
creditors; or

 

4.5                                 The
adjudication of Maker as a bankrupt (in involuntary or voluntary proceedings);
or

 

4.6                                 The
filing by Maker of a petition under the Federal Bankruptcy Act or any
comparable state law for a reorganization, arrangement or other judicial
protection upon insolvency; or

 

4.7                                 The
incurrence of any indebtedness by Maker or any of its subsidiaries other than
to pay off indebtedness owed by Maker to Bridge Bank, NA; or

 

4.8                                 The
sale of capital stock of Maker or any of its subsidiaries with gross proceeds
to Maker and/or its subsidiaries in excess of One Million Dollars ($1,000,000),
other than to pay off indebtedness owed by Maker to Bridge Bank, NA; or

 

4.9                                 The
sale of substantially all of the assets of Maker or any of its subsidiaries
other than to pay off indebtedness owed by Maker to Bridge Bank, NA; or

 

4.10                           The
filing of any form, report or document required to be filed with the Securities
and Exchange Commission (“SEC”) in accordance with the requirements
of the Securities Act or the Securities and Exchange Act of 1934, as amended,
and the rules and regulations of the SEC thereunder which reflects that total
shareholders’ equity is below Two

 

2

 

Million Seven Hundred Thousand Dollars ($2,700,000); should such
default not be cured within ten (10) days after written notice thereof is
delivered to Maker at its last known address.

 

The foregoing option to
accelerate the indebtedness evidenced hereby may be exercised by Holder at any
time after the occurrence of any of the events of default.  The failure to exercise said option upon the
occurrence of one or more of such events of default shall not prevent its
exercise upon the reoccurrence of such an event of default or upon the
occurrence of any other event of default.

 

5.                                       Conversion.

 

5.1                                 Optional
Conversion.  All or any portion of
the unpaid principal balance outstanding under this Note may be converted into
fully paid and nonassessable shares of Common Stock, $.001 par value per share,
of Maker (the “Common Stock”) at any time during the term of this Note at the
option of Holder.  The number of shares
of Common Stock into which this Note is to be converted shall be determined by
dividing said unpaid principal balance by $0.735 (the “Conversion
Price”), subject to adjustment as provided in Section 7 below, with any accrued
but unpaid interest paid in cash at the time of conversion.

 

5.2                                 Notice
of Conversion.  If Holder desires to
convert the Note, Holder shall provide written notice to Maker at 5400 Orange
Avenue, Suite 200, Cypress, California 90630, Attention:  Manuel Occiano, notifying Maker of the
requested conversion to be effected. 
Within ten (10) days of receipt of such notice, Maker shall respond to
Holder’s request in writing, specifying the number of shares of Common Stock to
be issued upon conversion, the amount of accrued interest to be paid in cash
and the date on which such conversion will occur and calling upon such Holder
to surrender to Maker, in the manner and at the place designated, this
Note.  Such response by Maker shall be
delivered to Holder at the address last shown on the records of Maker for
Holder or given by Holder to Maker for the purpose of notice.

 

5.3                                 Mechanics
and Effect of Conversion.  No
fractional shares of Common Stock shall be issued upon conversion of this
Note.  In lieu of issuing any fractional
shares to Holder upon the conversion of this Note, Maker shall pay to Holder
the amount of outstanding principal that is not so converted.  Upon the conversion of this Note, Holder
shall surrender this Note, duly endorsed, at the principal office of
Maker.  Upon conversion of this Note,
Maker shall be forever released from all its obligations and liabilities under
this Note.

 

5.4                                 Delivery
of Stock Certificates.  As promptly
as practicable after the conversion of this Note, Maker at its expense will
cause to be issued and delivered to Holder a certificate or certificates for
the number of full shares of Common Stock issuable upon such conversion
(bearing such legends as are required by applicable state and federal
securities laws in the opinion of counsel to Maker), together with a check
payable to Holder for any cash amounts payable for any accrued but unpaid
interest and fractional shares as described above.  In the event only a portion of this Note is converted, Maker
shall, at the time of delivery of the stock certificate or certificates,
deliver to Holder a new Note evidencing the remaining unpaid principal balance
of this Note, which Note shall in all other respects be identical with this
Note.

 

3

 

6.                                       Maker
Right to Prepay Note.  Subject to
the earlier conversion of this Note pursuant to Section 5 above, all or any
portion of the unpaid principal balance outstanding under this Note may be
prepaid at any time during the term of this Note at the option of Maker.  In the event Maker elects to prepay this Note,
notice of such election shall be given to Holder not less than sixty (60) days
prior to the date of prepayment.  Each
such notice shall state the amount of principal to be paid in cash, the date on
which such prepayment will occur and the place at which Holder is to surrender
this Note to Maker.  Such notice by
Maker shall be delivered to Holder at the address last shown on the records of
Maker for Holder or given by Holder to Maker for the purpose of notice.  In the event only a portion of this Note is
prepaid, Maker shall, at the time of prepayment and receipt of this Note,
deliver to Holder a new Note evidencing the remaining unpaid principal balance
of this Note, which Note shall in all other respects be identical with this
Note.

 

7.                                       Adjustments.  The Conversion Price and the number of shares
into which this Note may be converted are subject to adjustment from time to
time as follows:

 

7.1                                 Reclassifications,
etc.  If Maker, at any time while
this Note, or any portion thereof, remains outstanding and unexpired by
reclassification of securities or otherwise, shall change any of the securities
as to which conversion rights under this Note exist into the same or a
different number of securities or any other class or classes, this Note shall
thereafter represent the right to acquire such number and kinds of securities
that were subject to the conversion rights under this Note immediately prior to
such reclassification or other change and the Conversion Price therefor shall
be appropriately adjusted.

 

7.2                                 Split,
Subdivision or Combination of Shares. 
If Maker, at any time with this Note, or any portion thereof, remains
outstanding and unexpired shall split, subdivide or combine the securities as
to which conversion rights under this Note exist into a different number of
securities of the same class, then (i) in the case of a split or subdivision,
the Conversion Price for such securities shall be proportionately decreased and
the securities issuable upon conversion of this Note shall be proportionately
increased, and (ii) in the case of a combination, the Conversion Price for such
securities shall be proportionately increased and the securities issuable upon
conversion of this Note shall be proportionately decreased.

 

8.                                       Investment
Representations.  Holder
acknowledges that this Note and the Common Stock issuable upon the conversion
of this Note (i) constitute “securities” under federal and applicable state
securities laws, (ii) will be unregistered as such, and (iii) are being
transferred in reliance upon exemptions from registration based, in part, upon
Holder’s representations contained herein. 
Holder is acquiring such securities for its own account and not with a
view to, or for sale in connection with, any distribution thereof.

 

9.                                       Offset.  Maker shall be entitled to offset amounts
otherwise payable by Holder to Maker pursuant to Sections 1.4.3 and 7.1.1 of
that certain Purchase Agreement made and effective as of May 30, 2000
among Maker, Holder and certain other parties named therein.

 

10.                                 No
Assignment.  Neither Maker nor
Holder shall be entitled to assign, pledge, transfer or otherwise convey the
benefits or burdens of this Note without the prior written consent of the
other, except that any entity acquiring all or substantially all of the assets
or stock

 

4

 

of Maker shall automatically acquire the burdens of this Note, however,
Maker shall not be released from its obligations hereunder.

 

11.                                 No
Stockholder Rights.  Prior to the
conversion hereof, nothing contained in this Note shall be construed as
conferring upon Holder or any other person the right to vote or to consent or
to receive notice as a stockholder in respect of meetings of stockholders for
the election of directors of Maker or any other matters or any rights
whatsoever as a stockholder of Maker.

 

12.                                 Applicable
Law.  This Note and the rights and
obligations of the parties hereunder shall be construed under, and governed by,
the laws of the State of California without giving effect to conflict of laws
provisions.

 

13.                                 Attorneys’
Fees.  In the event of any suit,
action or arbitration to enforce any of the terms or provisions of this Note,
the prevailing party shall be entitled to its reasonable attorneys’ fees and
costs.  The foregoing entitlement shall
also include attorneys’ fees and costs of the prevailing party on any appeal of
a judgment and for any action to enforce a judgment.

 

14.                                 Amendment
and Restatement of Prior Note.  This
Note contemporaneously amends and restates, in its entirety, that certain
Secured Convertible Promissory Note dated August 14, 2000 issued by
Maker’s affiliate, Orange County Professional Services, Inc., in favor of
Holder in the original principal amount of $350,000.

 

[Remainder of page
intentionally left blank]

 

5

 

15.                                 Subordination.  This Note and the rights of Holder hereunder
and under the Security Agreement are subordinate to the rights of Bridge Bank,
NA pursuant to the terms of a Subordination Agreement (the “Subordination
Agreement”).  Nothing
contained in this Note shall directly or indirectly modify the provisions of
the Subordination Agreement in any manner which might terminate or impair the
subordination of the Subordinated Debt (as defined in the Subordination
Agreement) or the subordination of the security interest or lien that Holder
may have in any property of Maker or its subsidiaries.

 

 

	
   

  	
  RevCare, Inc.

  
	
   

  	
  a Nevada corporation

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
    /s/ Fred
  McGee

  	
   

  
	
   

  	
  Name:

  	
     Fred
  McGee

  	
   

  
	
   

  	
  Title:

  	
      CFO

  	
   

  
	
   

  
	
  Acknowledged and
  Agreed:

  
	
   

  
	
   

  
	
  RBA Rem-Care, Inc.

  
	
   

  
	
  By:

  	
     /s/
  Russell E. Mohrmann

  	
   

  
	
  Name:

  	
     Russell E. Mohrmann

  	
   

  
	
  Title:

  	
     President

  	
   

  
								

 

 

DO NOT DESTROY THIS ORIGINAL NOTE: When paid, said original
Note must be surrendered to Maker for cancellation and retention.

 

6

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00053-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00053-of-00352.parquet"}]]