**EXHIBIT 10.230**

**LIMITEDCONSENT, OMNIBUS AMENDMENT NO. 3 AND JOINDER AGREEMENTTO THE LOAN DOCUMENTS**

This Limited Consent, OmnibusAmendment No. 3 and Joinder Agreement to the Loan Documents (this “**Amendment**”), dated as of November 1,2005, is among Residential Funding Corporation, a Delaware corporation (“**Lender**”),Prospect Medical Holdings, Inc., a Delaware corporation (“**Holdings**”), Prospect Medical Group,Inc., a California professional corporation (“**PMG**”; and together with Holdings, each a “**Borrower**” and collectively, the “**Borrowers**”), PMG, as Borrower Agent (asdefined in the LSA referenced below), each of the Persons signatory hereto asGuarantors (each an “**Initial Guarantor**” and collectively,the “**Initial Guarantors**”; and togetherwith the Borrowers, the “**Initial CreditParties**” and each an “**Initial Credit Party**”)and Genesis Healthcare of SouthernCalifornia, Inc., a Medical Group, a California medical corporation (“**Genesis**”).

**W I T N E S S E T H:**

WHEREAS,****Lender and theInitial Credit Parties are parties to that certain Loan and Security Agreementdated as of September 27, 2004(as amended, restated, supplemented or otherwise modified prior to the datehereof, the “**LSA**”; capitalized terms used but notdefined herein shall have the meanings assigned to such terms in the LSA asamended hereby unless otherwise defined herein);

WHEREAS, the Borrowers and theother Initial Credit Parties have requested that the Lender agree to, andLender is willing to agree to, provide certain consents as hereinafter set forth,subject to the terms and conditions contained herein; and

WHEREAS, the parties heretodesire to amend the LSA and the other Loan Documents as hereinafter set forth.

NOW THEREFORE, in considerationof the parties’ mutual promises in this Amendment, and for other good andvaluable consideration, the receipt and sufficiency of which are herebyacknowledged, the parties agree as follows:

**Section 1****               Limited Consent**.  Notwithstanding any of the provisions of theLSA to the contrary, and subject to the satisfaction of each of the conditionsset forth in *Section 6* hereof, Lenderhereby consents to the acquisition by PMG of all of the outstanding Stock ofGenesis pursuant to that certain Stock Purchase Agreement, dated as of the datehereof, by and among PMG and Michael W. Lew, M.D., the sole shareholder ofGenesis (the “**Genesis Purchase Agreement**”)for an aggregate consideration set forth in *Section 1* ofthe Genesis Purchase Agreement.

**Section 2**               **LSA Amendments**.  Subject to the satisfaction of each of theconditions set forth in *Section 6*hereof, the LSA is hereby amended as follows:

### (a)           *Section 1.1* ofthe LSA is hereby amended by adding in proper alphabetical order the followingnew defined terms:

### **AmendmentNo. 3 Date** — means November 1, 2005.

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### **Genesis**— Genesis Healthcare of SouthernCalifornia, Inc., a Medical Group, a California medical corporation.

### **GenesisAcquisition** — means the acquisition by PMGof all of the outstanding Stock of Genesis pursuant to the Genesis Acquisition Documents.

### **GenesisAcquisition Agreement**— means that certain StockPurchase Agreement, dated as of November 1, 2005, by and between PMG andMichael W. Lew, M.D. pursuant to which PMG has agreed to acquire all of theoutstanding Stock of Genesis,as the same is in existence and in effect on the Amendment No. 3 Date.

### **GenesisAcquisition Documents** — collectively means (i) the Genesis Acquisition Agreement,(ii) the employment agreement between Genesis and Michael W. Lew, M.D., (iii)the non-competition agreement between Genesis and Michael W. Lew, M.D., and(iv) all other agreements, documents, certificates, opinions and otherinstruments delivered or executed in connection therewith, as each is inexistence and in effect on the Amendment No. 3 Date.

**Term Loan****A** — means the Term Loan A to be made by theLender to Borrowers pursuant to*Section2.1(b)* hereof.

**Term Loan****B** — means the Term Loan B to be made by theLender to Borrowers pursuant to*Section2.1(b)* hereof.

**Term Loan ACommitment** —means the Term Loan A Commitment set forth on *ExhibitA*.

**Term Loan BCommitment** —means the Term Loan B Commitment set forth on *ExhibitA*.

**Term Note****A** — means the Term Note A issued to the Lenderto evidence Term Loan A in the form attached as *Exhibit I-2/A.*

**Term Note B** — means the Term Note B issued to the Lenderto evidence Term Loan B in the form attached as *Exhibit I-2/B.*

### (b)           The following definitions set forth in *Section 1.1* of the LSA are hereby amended and restated toread in their entirety as follows:

**Loan** — means each Advance made by Lender to anyBorrower under the Revolving Credit, the Term Loan A and the Term Loan B madeby Lender to any Borrower pursuant to this Agreement.

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**Term Loan** — means, collectively, the Term Loan A andTerm Loan B to be made by the Lender to Borrowers pursuant to*Section 2.1(b)* hereof.

**Term LoanCommitment** —means, collectively, the Term Loan A Commitment and the Term Loan B Commitmentset forth on *Exhibit A*.

**Term LoanMaturity Date** —means the date on which the Term Loan A and Term Loan B shall terminate and theentire outstanding balance of the Term Loan A and Term Loan B shall be due andpayable, as set forth on *Exhibit A*.

**TermNote(s)** — means,collectively, the Term Note A and Term Note B.

### (c)           *Section 2.1(b)*of the LSA is hereby amended and restated to read in its entirety as follows:

### (b)           **Term Loans**.

### (1)           Subject to the termsand conditions of this Agreement, Lender agrees to make a loan on the ClosingDate in respect of Term Loan A to each Borrower (jointly and severally) in theamount of the Term Loan A Commitment. Lender shall not be obligated to make any further loan to Borrowersunder the Term Loan A after the Closing Date and no portion of the Term Loan Awhich has been repaid may be reborrowed. Each Borrower shall jointly and severally pay to Lender the principalbalance of the Term Loan A in monthly installments payable commencing onNovember 1, 2004 and continuing on the first day of each succeeding monththereafter in the amount of each such installment of $166,666.67 until theearlier of:  (i) the date that the Term LoanA is paid in full or (ii) the Term Loan Maturity Date.  The entire unpaid principal balance of theTerm Loan A, together with all accrued but unpaid interest thereon shall be duein payable on the Term Loan Maturity Date. In addition, Credit Parties shall make certain mandatory prepayments inrespect of the Term Loan A as provided in *Section3.2.2* hereof.  The Term Loan Ashall be evidenced by the Term Note A, and the Borrowers to which Term Loan Ais made shall jointly execute and deliver the Term Note A to Lender on theClosing Date.

### (2)           Subject to the termsand conditions of this Agreement, Lender agrees to make a loan on the AmendmentNo. 3 Date in respect of Term Loan B to each Borrower (jointly and severally)in the amount of the Term Loan B Commitment. Lender shall not be obligated to make any further loan to Borrowersunder the Term Loan B after the Amendment No. 3 Date and no portion of the TermLoan B which has been repaid may be reborrowed. Each Borrower shall jointly and severally pay to Lender

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### the principal balance of the Term Loan B inmonthly installments payable commencing on December  1, 2005 andcontinuing on the first day of each succeeding month thereafter in the amountof each such installment of $66,666.67 until the earlier of:  (i) the date that the Term Loan B is paid infull or (ii) the Term Loan Maturity Date. The entire unpaid principal balance of the Term Loan B, together withall accrued but unpaid interest thereon shall be due in payable on the TermLoan Maturity Date.  In addition, CreditParties shall make certain mandatory prepayments in respect of the Term Loan Bas provided in *Section 3.2.2*hereof.  The Term Loan B shall beevidenced by the Term Note B, and the Borrowers to which Term Loan B is madeshall jointly execute and deliver the Term Note B to Lender on the AmendmentNo. 3 Date.  Borrowers hereby direct Lender to disburseall proceeds of Term Loan B (net of all fees owing to Lender) to the followingaccount of Borrowers: Wells Fargo Bank, N.A., Los Angeles, California, ABA No.121000248, Account No. 4121043368, Reference: Prospect Medical Holdings, Inc.

### (d)           *Section 2.9* ofthe LSA is hereby amended by adding the following new sentence at the endthereof:

Notwithstanding the foregoing, the proceedsof the Term Loan B shall be used solely to fund the Genesis Acquisition and paycosts and expenses associated with the Genesis Acquisition that are approved byLender.

### (e)           The last sentence of *Section3.2.1*of the LSA is hereby amended and restated to read in itsentirety as follows:

Any partial prepayments of the Term Loan A orTerm Loan B shall be ratably applied to prepay the scheduled installments ofsuch Term Loan A or Term Loan B, as applicable, in inverse order of maturityexcept in connection with the payment in full of all Obligations and thetermination of this Agreement.

### (f)            *Section 3.2.2(a)*ofthe LSA is hereby amended and restated to read in its entirety as follows:

### (a)           If at any time the sum of the RevolvingCredit Balance and the principal balance of the Term Loan exceeds the amountequal to the lesser of (A) the Revolving Credit Borrowing Base or(B) the sum of the Revolving Credit Commitment *plus* the principal balance of the Term Loan thenoutstanding, Credit Parties shall immediately pay such excess to Lender forapplication as follows: first, to paymentof principal in respect of the Revolving Credit until all Obligations inrespect of the Revolving Credit have been repaid in full; second to theratable payment of principal in respect of the Term Loan A in inverse order ofmaturity until all Obligations in respect of Term Loan A have been repaid infull; and third

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### to the ratable payment of principal inrespect of the Term Loan B in inverse order of maturity until all Obligationsin respect of Term Loan B have been repaid in full provided that if any Default or Event of Default shall have occurredand be continuing at the time any payment shall be due or payable pursuant tothis section, all proceeds of any such payment shall be applied in accordancewith *Section 3.3* hereof.

### (g)           The second sentence of *Section3.2.2(b)*of the LSA is hereby amended and restated to read in itsentirety as follows:

Any prepayments required to be paid pursuantto this section shall be applied first, tothe ratable payment of principal in respect of the Term Loan A in inverse orderof maturity until all Obligations in respect of Term Loan A have been repaid infull; second, to the ratable payment of principal in respect of the TermLoan B in inverse order of maturity until all Obligations in respect of TermLoan B have been repaid in full; and third to payment of principal inrespect of the Revolving Credit until all Obligations in respect of theRevolving Credit have been repaid in full; providedthat if any Default or Event of Default shall have occurred and be continuingat the time any payment shall be due or payable pursuant to this section, allproceeds of any such payment shall be applied in accordance with *Section 3.3* hereof.

### (h)           The second sentence of *Section3.2.2(c)*of the LSA is hereby amended and restated to read in itsentirety as follows:

Any prepayments required tobe paid pursuant to this section shall be applied first, to payment of principal in respect of the Term Loan A ininverse order of maturity until all Obligations in respect of Term Loan A havebeen repaid in full; second, to payment of principal in respect of theTerm Loan B in inverse order of maturity until all Obligations in respect ofTerm Loan B have been repaid in full; and third, to payment in respect ofthe Revolving Credit until all Obligations in respect of the Revolving Credithave been repaid in full; provided that ifany Default or Event of Default shall have occurred and be continuing at thetime any payment shall be due or payable hereunder, all proceeds of any suchpayment shall be applied in accordance with *Section3.3* hereof.

### (i)            The second sentence of *Section3.2.2(d)*of the LSA is hereby amended and restated to read in itsentirety as follows:

### Anyprepayments required to be paid pursuant to this section shall be applied first, to payment of principal in respect ofthe Term Loan A in inverse order of maturity until all Obligations in respectof Term Loan A have been repaid in full; second, to payment of principalin respect of the Term Loan B in inverse order of maturity until allObligations in respect of Term Loan B have been repaid in full; and third,to payment in respect

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### of the Revolving Credit until all Obligationsin respect of the Revolving Credit have been repaid in full; provided that if any Default or Event ofDefault shall have occurred and be continuing at the time any payment shall bedue or payable hereunder, all proceeds of any such payment shall be applied inaccordance with *Section 3.3*hereof.

### (j)            *Section 3.3*ofthe LSA is hereby amended and restated to read in its entirety as follows:

Subject to *Section2.5*,**so long as noDefault or Event of Default has occurred and is continuing and the TerminationDate shall not have occurred and except for voluntary prepayments permitted pursuantto *Section 3.2.1* which shall beapplied in accordance with such section and mandatory prepayments pursuant to *Section 3.2.2* which shall be applied inaccordance with such section, all Collections and other payments (including allmonetary proceeds of Collateral) received shall be applied to amounts then dueand payable in the following order:

(a)           to the payment of, or the reimbursement of the Lender for or in respectof all Fees and Expenses, costs, disbursements and losses which shall have beenincurred or sustained by the Lender and are then due and owing in connectionwith the collection of such monies, or for the administration, exercise,protection or enforcement by the Lender of any of the rights, remedies, dutiesor powers of the Lender hereunder or under any of the other Loan Documents;

(b)           to the payment of any and all other accrued Fees and Expenses then dueand owing hereunder or under any of the other Loan Documents;

(c)           to interest on the Revolving Loans and Term Loan then due and owing, ratablyin proportion to the interest accrued as to each such Loan;

(d)           to principal payments on the Term Loan A then due and owing;

(e)           to principal payments on the Term Loan B then due and owing;

(f)            to payment of the Revolving Loans thenoutstanding; and

(g)           to all other Obligations which may be then due and owing.

While any Default or Event of Default shallhave occurred and remain continuing or at all times from and after theTermination Date, all Collections and other payments (including monetary proceedsof

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Collateral or of realizations upon any Collateral) received shall beapplied to the Obligations in such order as Lender may elect in its solediscretion.

### (k)           *Section 5.2(a)*of the LSA is hereby amended and restated to read in its entirety as follows:

(a)           On the Closing Date, Credit Parties (otherthan Genesis), and within 5 Business Days of the Amendment No. 3 Date Genesis,shall deliver Obligor Notices to all of their Obligors obligated under theReceivables consisting of Capitated Contract Rights, which Obligor Notice shalldirect each such Obligor to make payments of Collections directly to anapplicable Lockbox (or in the case of payments by wire transfer, the applicableLockbox Account), and on the Closing Date Credit Parties (other than Genesis),and within 5 Business Days of the Amendment No. 3 Date Genesis, shall deliveror cause to be delivered to Lender the duplicate original of each such ObligorNotices and evidence satisfactory to Lender that the delivery of such ObligorNotices to the Obligors has been accomplished. In addition, on the Closing Date, Credit Parties (other than Genesis),and within 5 Business Days of the Amendment No. 3 Date Genesis, shall deliverto Lender a master Obligor Notice, in form and substance satisfactory to Lender,in respect of all of their Obligors obligated under Fee-For-Service Receivableswhich are Governmental Receivables and a master Obligor Notice, in form andsubstance satisfactory to Lender, in respect of all of their Obligors obligatedunder Fee-For-Service Receivables which are not Governmental Receivables, acopy of which Obligor Notice specifying the applicable Obligor’s information,Lender may deliver to the applicable Obligors on or after an Event of Defaulthas occurred, and each of which master Obligor Notice, among other things,shall direct such Obligor to make payments of Collections directly to anapplicable Lockbox (or in the case of payments by wire transfer, the applicableLockbox Account), and mail all RA/EOBs directly to the applicable Lockbox, andeach of which master Obligor Notice shall attach a schedule listing all of theapplicable Obligors as of the date reasonably proximate to the Closing Datewith respect to Credit Parties (other than Genesis) and as of the datereasonably proximate to the Amendment No. 3 Date with respect to Genesis, whichschedules shall be updated pursuant to and in accordance with *Section 9.5(b)(xvi)*.  No such direction given by Credit Parties toany Obligor shall be changed, modified or superceded without the express priorwritten consent of Lender.  CreditParties shall cause all billing and claim forms sent to Obligors (and returnenvelopes, if any, furnished by Credit Parties) to set forth only theapplicable Lockbox as the address for payment of Receivables and, in the caseof Fee-For-Services Receivables, delivery of the related RA/EOBs, and only theapplicable Lockbox Account as the bank account for receipt of wire transfersfor payment of Receivables; provided that unless an Event of Defaultshall have occurred and Lender shall have requested Credit Parties to do so,the Credit Parties not be

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required to direct Obligors of Fee-For-Service Receivables to remitpayments and RA/EOBs only to a Lockbox or Lockbox Account.  If a payment on a Receivable is made by anObligor other than to the appropriate Lockbox and Lockbox Account, CreditParties shall (x) remit such payment to the Lockbox Account on the sameday of the receipt thereof, if possible, but in any event no later than theBusiness Day immediately following the day of the receipt thereof, and (y)promptly take all necessary actions to effect collection of such proceeds fromthe Person having possession thereof, if other than a Credit Party.

### (l)            *Section 9* ofthe LSA is hereby amended by adding the following new *Sections9.25* and *9.26* at the endthereof:

9.25         **Genesis Bank Account**.  Genesis shall be permitted to maintain theaccount no. 222-07A89 (“**Merrill Account**”)at Merrill Lynch Pierce Fenner and Smith, Inc. so long as (a) all fundsmaintained in such Merrill Account are at all times held in cash or in CashEquivalents, (b) Genesis furnishes evidence to Lender satisfactory to Lender onor prior to the Amendment No. 3 Date that all credit card related servicesassociated with such Merrill Account have been terminated and (c) Genesiscauses on each Business Day all available funds maintained in the MerrillAccount in excess of $700,000 (the “**Maximum Balance**”)to be transferred to the Concentration Account. Not later than January 1, 2006, Genesis shall cease writing any checkson the Merrill Account and except for the daily wire transfer of funds from theMerrill Account to the Concentration Account required by this Section, Genesisshall cease transferring funds from the Merrill Account or making deposits intothe Merrill Account.  In addition, notlater than January 1, 2006, Genesis shall have opened and caused to be fullyoperational disbursing accounts at Wells Fargo Bank which are subject toControl Agreements in favor of Lender on terms satisfactory to Lender.  From and after January 1, 2006, the MaximumBalance shall be reduced to the sum of all checks outstanding on the MerrillAccount plus $10,000 as a cushion for fees and expenses and as such checks arepresented and honored for payment, the amount described in this clause shallautomatically be reduced.  Commencing onthe Amendment No. 3 Date and continuing until the Lender has receivedsatisfactory evidence that the Merrill Account Reserve Release Conditions (asdefined below) have been met, Lender shall be entitled to establish andmaintain a special Availability Reserve in the amount of $700,000; providedthat after January 1, 2006, Borrower shall be entitled to present the monthlyaccount statement for the Merrill Account or other written evidence satisfactoryto Lender demonstrating that the actual balance in the Merrill Account is lessthan $700,000, and Lender shall reduce such special Availability Reserve to anamount equal to the actual balance in the Merrill Account promptly afterreceipt of such satisfactory written evidence; providedfurtherthat such special Availability Reserve shall be eliminated by Lender promptlyupon

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Lender’sreceipt of written evidence satisfactory to Lender demonstrating (a) that theactual balance in the Merrill Account is less than $100,000 and (b) all checksand electronic funds transfers from payors under the CapitatedContracts have been successfully redirected to a lockbox or bankaccount in the name of or under the control of the Lender (theevents in clauses (a) and (b) above, the “Merrill Account Reserve ReleaseConditions”).

9.26         **Genesis Management Agreement**.  Promptly upon entering into by Genesis of amanagement services agreement with any Management Credit Party, which shall bein form and substance satisfactory to Lender and shall be deemed to be includedin the definition of “**ManagementAgreements**” set forth in *Section1.1* of the LSA, Genesis shall enter into a collateral assignmentagreement, subordination agreement with Lender and any other agreements thatLender may request, in respect of such management services agreement, each inform and substance satisfactory to Lender

### (m)          *Section 11.1* ofthe LSA is hereby amended by (i) deleting the “.” at the end of subsection (s)thereof and inserting “; or” in place thereof and (ii) adding the following new*Subsection (t)* at the end thereof:

### (t)            any Credit Party makesany post-closing payment under the Genesis Acquisition Agreement when anyDefault or Event of Default shall have occurred and be continuing or wouldresult from the funding of such payment.

### (n)           Effective as of the date hereof, 2005, thenotice address for Credit Parties set forth in *Section 14.1*of the LSA is hereby amended and restated to read in its entirety as follows:

| If to Credit Parties: |   | c/o Prospect Medical Holdings, Inc.  400 Corporate Point, Suite 525  Culver City, California 92801  Attn: Jacob Y. Terner, CEO  Telephone: (310) 337-4162  Facsimile: (310) 338-1151  E-Mail: jack.terner@prospectmedical.com |
|-----------------------|--------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

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| With a copy to: |   | Miller & Holguin  1801 Century Park East, Suite 700  Los Angeles, California 90067  Attn: Dale S. Miller  Telephone: (310) 556-1990  Facsimile: (310) 557-2205  E-Mail: dmiller@millerholguin.com |
|-----------------|--------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

 

 

### (o)           *Sections I* and *III.C* of *Exhibit A* tothe LSA are hereby amended and restated to read in their entirety as follows:

|            |                                       | **I. Commitments**                                                     |
|------------|--------------------------------------------|------------------------------------------------------------------------|
|       |                                       |
| ** ** | **Revolving Credit Commitment:** | $5,000,000.00                                                          |
|       |                                       |                                                                   |
| ** ** | **Term Loan A Commitment:**                | $10,000,000.00                                                         |
|       |                                       |                                                                   |
| ** ** | **Term Loan B Commitment:**                | $4,000,000.00                                                          |
|       |                                       |                                                                   |
| ** ** |                                       | **C. Facility Origination Fee:**                        | 1.00% of the aggregate of the Revolving Credit  Commitment and the Term Loan A  Commitment, due on the Closing Date. |
|       |                                       |                                                                   |
|       |                                       | 1.00% of the Term Loan B Commitment, due on  the Amendment No. 3 Date. |

 

### (p)           The following definitions set forth on *Exhibit A* to the LSA are hereby amended and restated to readin their entirety as follows:

“**InterestRate**” — means: (i) the sum of the Prime Rate *plus* the Revolving Credit ApplicableMargin with respect to the Revolving Credit Balance, (ii) the sum of Prime Rate*plus* the Term Loan A ApplicableMargin with respect to the Term Loan A, and (iii) the sum of Prime Rate *plus* the Term Loan B Applicable Marginwith respect to the Term Loan B.

*“***Applicable Margin***”* — means (a) for the Revolving CreditBalance, the Revolving Credit Applicable Margin, (b) for the Term Loan A, theTerm Loan A Applicable Margin, and (c) for the Term Loan B, the Term Loan BApplicable Margin.

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(q)           *Exhibit A* to the LSA are hereby amended by adding in properalphabetical order the following new defined terms:

“**TermLoan A Applicable Margin**” — means 200 basis points.

“**TermLoan B Applicable Margin**” — means 200 basis points.

### (r)            *Schedules 8.7**, 8.13,8.15, 8.17, 8.20, 9.8(b) and 10.1* to the LSA are hereby amendedby adding thereto the information contained on the *Supplements to Schedules 8.7**, 8.13, 8.15, 8.17, 8.20, 9.8(b) and 10.1*attached hereto with respect to Genesis. All references in the LSA to *Schedules8.7**, 8.13, 8.15, 8.17, 8.20,9.8(b) and 10.1* shall now be deemed to include a reference to *Schedules 8.7**, 8.13,8.15, 8.17, 8.20, 9.8(b) and 10.1* as amended by the *Supplements to Schedules 8.7**, 8.13, 8.15, 8.17, 8.20, 9.8(b) and 10.1*.

Section 3                **Omnibus Amendments**.  Subject to the satisfaction of each of theconditions set forth in *Section 6*hereof, the LSA and the other Loan Documents are hereby amended so that eachreference in the LSA and in the other Loan Documents to the term “CreditParties” or “Guarantors” shall be deemed to include a reference to Genesis.

# Section 4**                Joinders**.

### (a)           *LSA*.  Genesis (sometimes referred to herein as the “**New Credit Party**”) hereby agrees toperform, for the benefit of Lender, all of the Obligations of a Guarantor and aCredit Party (other than a Borrower) under the LSA, as direct and primaryobligations of the New Credit Party, and further agrees that it shall complywith and be fully bound by the terms of the LSA as if it had been a signatorythereto as a Guarantor and a Credit Party as of the date thereof.  In furtherance thereof, (i) in order tosecure payment and performance of all of the Obligations, the New Credit Partyhereby grants to Lender a security interest in all Collateral in which it has aninterest, whether now or hereafter arising, in accordance with the terms of the*Section 6* of the LSA and(ii) the New Credit Party hereby agrees that it is jointly and severallyliable for, and hereby absolutely and unconditionally guarantees to Lender andits successors and assigns, the full and prompt payment (whether at statedmaturity, by acceleration or otherwise) and performance of, all Obligationsowed or hereafter owing to Lender by each other Credit Party, in accordancewith the terms of the *Section 15*of the LSA.

### (b)           Offset Agreement.  The New Credit Party hereby agrees toperform, for the benefit of Lender, all of the obligations of a RestrictedCredit Party (as defined therein) under the Offset Agreement, as direct andprimary obligations of the New Credit Party, and further agrees that it shallcomply with and be fully bound by the terms of the Offset Agreement as if ithad been a signatory thereto as a Credit Party as of the date thereof.

### (c)           Other Loan Documents.  The New Credit Party hereby agrees toperform, for the benefit of Lender, all of the obligations of a of a Guarantoror a Credit Party, as the case may be, under each other Loan Document, asdirect and primary obligations of the New Credit Party, and further agrees thatit shall comply with and be

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### fully bound by the terms of each such other Loan Document as if it hadbeen a signatory thereto as a Guarantor or a Credit Party, as applicable, as ofthe date thereof.

# Section 5**                Amendments toCollateral Assignments to Transaction Documents**.

### (a)           *Item (xiv)* of *Exhibit A* to that certain Collateral Assignment ofTransaction Documents dated as of September 27, 2004 between PMS and Lender (asamended, restated, supplemented or otherwise modified from time to time, the “**PMS Collateral Assignment**”) is herebyamended by deleting the “.” at the end thereof and inserting “(as amended,restated, supplemented or otherwise modified from time to time) and i*tem (xvii)* of *Exhibit A* tothe PMS Collateral Assignment is hereby amended by deleting the “.” at the endthereof and inserting “together with that certain Joinder Agreement by Genesis Healthcare of Southern California,Inc., a Medical Group, a California medical corporation, dated as of November1, 2005.”.

### (b)           *Item (x)* of *Exhibit A* to that certain Collateral Assignment ofTransaction Documents dated as of September 27, 2004 between Sierra Primary andLender (as amended, restated, supplemented or otherwise modified from time totime, the “**Sierra Primary CollateralAssignment**”) is hereby amended by deleting the “.” at the endthereof and inserting “(as amended, restated, supplemented or otherwisemodified from time to time) and i*tem (xi)* of *Exhibit A* to the Sierra Primary Collateral Assignment ishereby amended by deleting the “.” at the end thereof and inserting “togetherwith that certain Joinder Agreement by GenesisHealthcare of Southern California, Inc., a Medical Group, a California medicalcorporation, dated as of November 1, 2005.”.

### (c)           *Item (vii)* of *Exhibit A* to that certain Collateral Assignment ofTransaction Documents dated as of September 27, 2004 between PHR and Lender (asamended, restated, supplemented or otherwise modified from time to time, the “**PHR Collateral Assignment**”) is herebyamended by deleting the “.” at the end thereof and inserting “(as amended,restated, supplemented or otherwise modified from time to time) and i*tem (vii)* of *Exhibit A* tothe PHR Collateral Assignment is hereby amended by deleting the “.” at the endthereof and inserting “together with that certain Joinder Agreement by Genesis Healthcare of Southern California,Inc., a Medical Group, a California medical corporation, dated as of November1, 2005.”.

# Section 6                **Effectiveness andConditions Subsequent**.

6.1           This Amendment shallbecome effective on the date each of the following condition have been met:

### (a)           this Amendment shall have been executed anddelivered by Lender and the Credit Parties;

### (b)           Lender shall have received, each in form andsubstance satisfactory to Lender, (i) all documents, agreements and other itemslisted on the Closing Checklist attached hereto as Annex I duly executedand delivered by each applicable party thereto and (ii) all other informationand copies of all documents which Lender may have

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### requested in connection therewith. Upon the request of Lender or its counsel, such documents will be certifiedby appropriate corporate officers or Governmental Authority;

### (c)           Lender shall have completed its business,legal, and collateral due diligence, the results of each of which shall besatisfactory to Lender;

### (d)           Lender shall have received evidence, in formand substance satisfactory to Lender, that Lender has a valid perfectedsecurity interest in that portion of the Collateral associated with Genesis,subject only to Permitted Liens; and

### (e)           Borrowers shall have paid to the Lender afacility origination fee equal to $40,000 in connection with this Amendment.

6.2           Not later than the endof business on November 1, 2005, Lender shall have received a photocopy of theoriginal stock certificate(s) of Genesis (which may be in the name of EdwardMedical Group II, a Medical Corporation) accompanied by a stock power endorsedby Michael W. Lew, M.D. to PMG evidencing the consummation of the GenesisAcquisition. Failure to satisfy this condition in accordance with this *Section 6.2* shall constitute an immediate Event of Defaultunder the LSA and the other Loan Documents.

6.3           Each of the followingconditions must be satisfied on or before November 4, 2005:

### (a)           Lender shall have received certified copiesof (i) the Genesis Acquisition Documents and (i) the Management ServicesAgreement, dated as of April 1, 2001, between Advanced Medical Management, Inc.and Genesis together with all amendments, supplements or other modificationsthereto; and

### (b)           Lender shall have received the originalstock certificate representing 100% of the outstanding Stock of Genesis,together with the original undated stock power executed in blank in respect ofsuch Stock.

Failure to satisfyany of the above conditions in accordance with this *Section 6.3*shall constitute an immediate Event of Default under the LSA and the other LoanDocuments.

6.4           Each of the followingconditions must be satisfied on or before November 11, 2005:

### (a)           Lender shall have received a LandlordWaiver, satisfactory to Lender, for the premises leased by Genesis located at12665 Garden Grove Blvd., City of Garden Grove, California;

### (b)           Lender shall have received, each in form andsubstance satisfactory to Lender, certificates of insurance evidencing thatGenesis has been added to Credit Parties’ consolidated liability, casualty andproperty insurance policies evidencing its coverage under such policies andnaming Lender as loss payee and/or additional insured, as applicable,thereunder; and

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### (c)           Lenders shall have received, in form andsubstance satisfactory to Lender, certificatesfrom the applicable California tax authority evidencing the payment of allfranchise taxes by each California Credit Party.

Failure to satisfyany of the above conditions in accordance with this *Section 6.4*shall constitute an immediate Event of Default under the LSA and the other LoanDocuments.

6.5           On or priorto November 8, 2005, Lender shall have received, in form and substancesatisfactory to Lender, evidence that Genesis has sent a letter to Blue Shieldof California (“**BSC**”)acknowledging that (i) prior notice with respect to the Genesis Acquisition hasbeen sent to BSC, (ii) the Genesis Acquisition has been consummated and (iii)no objections or concerns have been received from BSC concerning the GenesisAcquisition and as a result Genesis has assumed the consent of BSC to theGenesis Acquisition, and no later than ninety (90) calendar days following theAmendment No. 3 Date, Lender shall have received, in form and substancesatisfactory to Lender, a copy of the assignment and assumption agreementexecuted between Genesis and BSC. Failure required to satisfy this condition inaccordance with this *Section 6.5*shall constitute an immediate Event of Default under the LSA and the other LoanDocuments.

Section 7                **Representations and Warranties of the CreditParties**. To induce the Lender to execute and deliver thisAmendment, the Credit Parties represent and warrant that:

### (a)           the execution, delivery and performance bythe Initial Credit Parties and the New Credit Party of this Amendment has beenduly authorized and this Amendment constitutes the legal, valid and bindingobligation of the Initial Credit Parties and the New Credit Party, enforceableagainst Initial Credit Parties and the New Credit Party in accordance with itsterms, except as the enforcement thereof may be subject to (i) the effect ofany applicable bankruptcy, insolvency, reorganization, moratorium or similarlaw affecting creditors’ rights generally and (ii) general principles of equity(regardless of whether such enforcement is sought in a proceeding in equity orat law);

### (b)           no Default or Event of Default has occurredand is continuing and each of the representations and warranties contained inthe LSA and the other Loan Documents is true and correct in all materialrespects on and as of the date hereof as if made on the date hereof, except tothe extent that such representations and warranties expressly relate to anearlier date, in which case such representations and warranties shall be trueand correct as of such earlier date, and each of the agreements and covenantsin the Loan Documents are hereby reaffirmed with the same force and effect asif each were separately stated herein and made as of the date hereof;

### (c)           the execution, delivery and performance ofthis Amendment and the Genesis Acquisition Agreement and the consummation ofthe transactions contemplated this Amendment and the Genesis AcquisitionAgreement do not and shall not contravene, result in a breach of, or violate(i) any provision of any Initial Credit Party’s or the New Credit Party’scorporate charter or bylaws or other governing documents, (ii) any material lawor regulation, or any order or decree of any court or

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### government instrumentality or (iii) any material indenture, mortgage,deed of trust, lease, agreement or other instrument to which any Initial CreditParty or the New Credit Party is a party or by which any Initial Credit Partyor the New Credit Party or any of their respective property is bound; and

### (d)           all reports, documents, notices or approvalsrequired to be filed or furnished to or obtained from any GovernmentalAuthority in connection with this Amendment have been filed or furnished to orobtained from such Governmental Authority.

# Section 8**                Miscellaneous**

### (a)           Effect.  The consents and amendments set forth hereinare effective solely for the purposes set forth herein and shall be limitedprecisely as written, and shall not be deemed to (i) except as expresslyprovided in this Amendment, be a consent to any amendment, waiver ormodification of any term or condition of the LSA or of any other Loan Document,(ii) prejudice any right or rights that Lender may now have or may have in thefuture under or in connection with the LSA or any other Loan Document, or (iii)constitute a course of dealing or other basis for altering any Obligation ofthe Borrowers or any other Credit Parties under the LSA or any other LoanDocument or any other contract or instrument.

### (b)           Reaffirmation.  Except as expressly amended herein, all ofthe terms and provisions of the LSA and the Loan Documents are ratified andconfirmed in all respects by each Initial Credit Party and the New Credit Partyand shall remain in full force and effect. Each Initial Credit Party and the New Credit Party hereby acknowledgesand agrees that there is no defense, setoff or counterclaim of any kind, natureor description to the Obligations or the payment thereof when due.  The execution, delivery and effectiveness ofthis Amendment shall not, except as expressly provided herein, operate as anamendment to or waiver of any right, power or remedy of the Lender under theLSA or any of the other Loan Documents, or constitute an amendment or waiver ofany provision of the LSA or any of the other Loan Documents.

### (c)           Binding on Successors and Assigns.  This Amendment shall be binding upon andinure to the benefit of the parties hereto and their respective successors andassigns.

### (d)           Severability.  Whenever possible, each provision of thisAmendment shall be interpreted in such manner as to be effective and validunder applicable law, but if any provision of this Amendment shall be held tobe prohibited by or invalid under applicable law, such provision shall beineffective only to the extent of such prohibition or invalidity, withoutinvalidating the remaining provisions of this Amendment.

### (e)           GOVERNING LAW.  THIS AMENDMENT AND THE RIGHTS AND OBLIGATIONSOF THE PARTIES HEREUNDER SHALL BE CONSTRUED IN ACCORDANCE WITH AND GOVERNED BYTHE INTERNAL LAWS OF THE

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### STATE OF CALIFORNIA WITHOUT REGARD TO PRINCIPLES OF CONFLICTS OF LAWS.

### (f)            No Waiver.  No waiver or consent, and no modification oramendment of any provision of this Amendment shall be effective unlessspecifically made in writing and duly signed by the party purportedly makingsuch waiver or consent.

### (g)           Counterparts.  This Amendment may be executed by the partieshereto individually or in combination, in one or more counterparts, each ofwhich shall be an original and all of which shall constitute one and the sameagreement.  This Amendment may beexecuted and delivered by telecopier with the same force and effect as if thesame were a fully executed and delivered original manual counterpart.

### (h)           Titles.  Paragraph and subparagraph titles, captionsand headings herein are inserted only as a matter of convenience and forreference, and in no way define, limit, extend or describe the scope of thisAmendment or the intent of any provisions hereof.

### (i)            Acknowledgment.  The Initial Credit Parties and the New CreditParty affirm and acknowledge that this Amendment constitutes a Loan Documentunder the LSA and any reference to the Loan Documents under the LSA containedin any notice, request, certificate or other document executed concurrentlywith or after the execution and delivery of this Amendment shall be deemed toinclude this Amendment unless the context shall otherwise specify.  Each of the Initial Credit Parties and theNew Credit Party hereby adopt and reaffirm each of the terms set forth in *Section 15.2* of the LSA as though the same were restated inthis Amendment.

**<***Remainder of page left intentionally blank***>****<***Signature pages follow***>**

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IN WITNESS WHEREOF, the parties have causedthis Amendment to be duly executed and delivered all as of the day and yearfirst above written.
|            | **BORROWER AGENT:**                                                         |
|------------|-----------------------------------------------------------------------------|
| ** ** | ** **                                                                  |
| ** ** | **PROSPECT MEDICAL GROUP, INC.****,**a California  professional corporation |
| ** ** | ** **                                                                  |
| ** ** | ** **                                                                  |
|       | By:                                                                         |   |
|       | Name:                                                                       |   |
|       | Title:                                                                      |   |
| ** ** | ** **                                                                  |
| ** ** | ** **                                                                  |
| ** ** | **BORROWERS:**                                                              |
| ** ** | ** **                                                                  |
| ** ** | **PROSPECT MEDICAL HOLDINGS, INC.,**a  Delaware  corporation                |
| ** ** | ** **                                                                  |
| ** ** | ** **                                                                  |
|       | By:                                                                         |   |
|       | Name:                                                                       |   |
|       | Title:                                                                      |   |
| ** ** | ** **                                                                  |
| ** ** | ** **                                                                  |
| ** ** | **PROSPECT MEDICAL GROUP, INC.****,**a California  professional corporation |
| ** ** | ** **                                                                  |
| ** ** | ** **                                                                  |
|       | By:                                                                         |   |
|       | Name:                                                                       |   |
|       | Title:                                                                      |   |

 

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|            | **GUARANTORS:**                                                                                      |
|------------|------------------------------------------------------------------------------------------------------|
| ** ** | ** **                                                                                           |
| ** ** | **PROSPECT MEDICAL SYSTEMS, INC.,**a  Delaware  corporation                                          |
| ** ** | ** **                                                                                           |
| ** ** | **PINNACLE HEALTH RESOURCES,**a  California  corporation                                             |
| ** ** | ** **                                                                                           |
| ** ** | ** **                                                                                           |
|       | By:                                                                                                  |   |
|       | Name:                                                                                                |   |
|       | Title:                                                                                               |   |
| ** ** | ** **                                                                                           |
| ** ** | ** **                                                                                           |
| ** ** | **SIERRA MEDICAL MANAGEMENT, INC.,**a  Delaware  corporation                                         |
| ** ** | ** **                                                                                           |
| ** ** | ** **                                                                                           |
|       | By:                                                                                                  |   |
|       | Name:                                                                                                |   |
|       | Title:                                                                                               |   |
| ** ** | ** **                                                                                           |
| ** ** | ** **                                                                                           |
| ** ** | **SIERRA PRIMARY CARE MEDICAL GROUP, A  MEDICAL CORPORATION,**a California professional  corporation |
| ** ** | ** **                                                                                           |
| ** ** | ** **                                                                                           |
|       | By:                                                                                                  |   |
|       | Name:                                                                                                |   |
|       | Title:                                                                                               |   |
| ** ** | ** **                                                                                           |
| ** ** | ** **                                                                                           |
| ** ** | **NUESTRA FAMILIA MEDICAL GROUP, INC.,**a  California professional corporation                       |
| ** ** | ** **                                                                                           |
| ** ** | ** **                                                                                           |
|       | By:                                                                                                  |   |
|       | Name:                                                                                                |   |
|       | Title:                                                                                               |   |
|            |                                                                                                      |  |  |

 

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| ** ** | **GUARANTORS:**                                                                            |
|------------|--------------------------------------------------------------------------------------------|
| ** ** | ** **                                                                                 | ** ** |
| ** ** | **SANTA ANA/TUSTIN PHYSICIANS GROUP,  INC.**, a  California professional corporation       |
| ** ** | ** **                                                                                 | ** ** |
| ** ** | **PEGASUS MEDICAL GROUP, INC.**,  a California  professional corporation                   |
| ** ** | ** **                                                                                 | ** ** |
| ** ** | **ANTELOPE VALLEY MEDICAL ASSOCIATES,  INC.**, a  California professional corporation      |
| ** ** | ** **                                                                                 | ** ** |
| ** ** | **PROSPECT HEALTH SOURCE MEDICAL  GROUP,  INC.**, a California professional corporation    |
| ** ** | ** **                                                                                 | ** ** |
| ** ** | **PROSPECT PROFESSIONAL CARE MEDICAL  GROUP, INC.**, a California professional corporation |
| ** ** | ** **                                                                                 | ** ** |
| ** ** | **PROSPECT NWOC MEDICAL GROUP, INC.**,  a  California professional corporation             |
| ** ** | ** **                                                                                 | ** ** |
| ** ** | **APAC MEDICAL GROUP, INC.**,  a California professional  corporation                      |
| ** ** | ** **                                                                                 | ** ** |
| ** ** | **STARCARE MEDICAL GROUP, INC.**,  a California  professional corporation                  |
| ** ** | ** **                                                                                 | ** ** |
| ** ** | ** **                                                                                 | ** ** |
| ** ** | By:                                                                                        | ** ** |
| ** ** | Name:                                                                                      |   |
| ** ** | Title:                                                                                     |   |
|            |                                                                                            |  |  |

 

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|       | **PROSPECT HOSPITAL ADVISORY  SERVICES, INC.**  (f/k/a Prospect Medical Management, Inc.), a Delaware  corporation |
|------------|--------------------------------------------------------------------------------------------------------------------|
|       |                                                                                                               |
|       |                                                                                                               |
| ** ** | By:                                                                                                                | ** ** |
| ** ** | Name:                                                                                                              |   |
| ** ** | Title:                                                                                                             |   |
| ** ** |                                                                                                               |
| ** ** |                                                                                                               |
|            | **GENESIS HEALTHCARE OF SOUTHERN  CALIFORNIA, INC., A MEDICAL GROUP**, a California  medical corporation           |
|       |                                                                                                               |
|       |                                                                                                               |
|       | **GENESIS HEALTHCARE OF SOUTHERN  CALIFORNIA, INC., A MEDICAL GROUP**, a California  medical corporation           |
|       |                                                                                                               |
|       |                                                                                                               |
| ** ** | By:                                                                                                                | ** ** |
| ** ** | Name:                                                                                                              |   |
| ** ** | Title:                                                                                                             |   |

 

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| ** ** | **LENDER:**                         |
|------------|-------------------------------------|
| ** ** | ** **                          |
| ** ** | **RESIDENTIAL FUNDING CORPORATION** |
| ** ** | ** **                          |
| ** ** | ** **                          |
| ** ** | By:                                 | ** ** |
| ** ** | Name:                               |   |
| ** ** | Title:                              |   |

 

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