Exhibit
10.2


 


MODIFICATION
AGREEMENT


 


This Modification
Agreement (this “Agreement”) is made as of January 8, 2003 between
RevCare, Inc., a Nevada corporation (the “Company”), and Rob Perez (“Executive”).


 


RECITALS


 


A.                                   Executive made a
loan to the Company and/or its affiliates, which loan is evidenced by a
promissory note dated August 14, 2000 in the original principal amount of
$1,225,000 (the “Original Note”).


 


B.                                     The
Original Note, together with certain other promissory notes issued by the
Company, was secured by a Security Agreement dated August 14, 2000 (the “Original
Security Agreement”).


 


C.                                     Executive
and the Company entered into that certain Employment Agreement dated
August 14, 2000 ( the “Employment Agreement”).


 


D.                                    The
Company is negotiating certain credit accommodations with Bridge Bank NA, in
respect of which such bank is requiring Executive and the secured parties under
the Original Security Agreement to subordinate their rights under their
promissory notes and the Original Security Agreement pursuant to the terms and
conditions of a Subordination Agreement substantially in the form attached
hereto as Exhibit A (the “Subordination Agreement”).


 


E.                                      The Company and
Executive have entered into this Agreement to set forth the terms and
conditions upon which they have agreed to amend the Original Note, the Original
Security Agreement and the Employment Agreement.


 


NOW THEREFORE, the
Company and Executive agree as follows:


 


1.                                       Payments
to Executive.  On or before the
Closing Date (as defined below), the Company will pay or cause to be paid to
the client trust account for Andrew A. Talley, Esq. (“Escrow Holder”), as escrow
holder for the benefit of Executive, the aggregate sum of $145,000 (the “Cash Payment”)
in immediately available funds.  The
Escrow Holder shall deliver the Cash Payment to Executive upon confirmation
from the Company in writing of its receipt of all of the documents and
instruments described in Section 4 below. 
The “Closing Date” shall be the earlier of (i) the consummation of
the closing of the sale of the Company’s office building located at 5400 Orange
Avenue, Cypress, CA, (ii) the consummation of the closing of the credit
facility described in that letter agreement between the Company and Bridge
Bank, NA dated December 12, 2002 and (iii) March 31, 2003.


 


(a)                                  The
parties acknowledge and agree that $140,000 of the Cash Payment shall be
applied against the then outstanding principal owing under the Original Note.


 


(b)                                 The
parties further acknowledge and agree that the $5,000 balance of the Cash
Payment shall be paid to Executive to cover Executive’s expenses incurred in
renegotiating the terms of the Original Note, Original Security Agreement and
Employment Agreement,


 


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negotiating the terms of
the Subordination Agreement and consummating the transactions contemplated
herein and in the documents referenced herein.


 


2.                                       Amendment
of Original Note.  Concurrently upon
the execution of this Agreement, the first sentence of Section 1 of the Original
Note will be amended and restated to provide that, subject to the extension
provisions set forth in the second sentence of Section 1 of the Original Note,
the principal balance and all accrued but unpaid interest thereunder shall be
due and payable on January 5, 2004, unless earlier converted or paid in
accordance with the terms thereof. 
Section 3 of the Original Note is shall be deleted.


 


3.                                       Amendment
of Employment Agreement. 
Concurrently upon the execution of this Agreement, the term of the
Employment Agreement shall be extended to January 5, 2004; provided,
however, that the Company may terminate the Employment Agreement upon five (5)
days notice to Executive after July 31, 2002 if the Company has paid the
Original Note in full.  In addition,
Section 3(c) of the Employment Agreement shall be deleted.


 


4.                                       Delivery
of Documents by Executive.


 


(a)                                  Concurrently
upon the execution of this Agreement, Executive shall deliver to the Company an
Amended and Restated Security Agreement in the form attached hereto as Exhibit
B, duly executed by Executive and Executive’s spouse.


 


(b)                                 Upon
receipt of the Cash Payment by the Escrow Holder, but prior to the release of
any portion of the Escrow Payment by the Escrow Holder to Executive, Executive
shall cause to be delivered to the Company a Subordination Agreement in favor
of Bridge Bank NA substantially in the form attached hereto as Exhibit A,
duly executed and delivered by Executive and Executive’s spouse.


 


5.                                       Delivery
of Documents by the Company. 
Concurrently upon the execution of this Agreement, the Company shall
deliver to Executive an Amended and Restated Security Agreement in the form
attached hereto as Exhibit B, duly executed and delivered by the
Company.


 


6.                                       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:


 


Rob Perez

9752 Villa Woods Drive

Villa Park, CA 92861


 


Notices to Escrow
Holder:


 


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


 


With a copy to:


 


George L. McCabe,
Jr.

Managing Partner

FBR Financial Services Partners LP

1001 19th Street North, 10th Floor

Arlington, VA 22209


 


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.


 


7.                                       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.


 


8.                                       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.


 


9.                                       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.


 


10.                                 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.


 


11.                                 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.


 


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12.                                 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.


 


13.                                 Amendment
and Waiver.  The provisions of this
Agreement may be amended or waived only with the prior written consent of the
Company 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 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.


 


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/ Rob Perez

  
	
   

  	
  ROB PEREZ

  



 


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