Exhibit 10.74  THIRD AMENDED AND RESTATED OPTION AGREEMENT  THIS THIRD
AMENDED AND RESTATED OPTION AGREEMENT (Agreement) is dated as of November 26,
2008, by and between Prospect Medical Group, Inc., a California
professional corporation (PMG) and Arthur Lipper, M.D. (Physician), with
reference to the following facts:  RECITALS  A.Physician
acquired record title to PMGs shares (Shares) in Nuestra Familia Medical
Group, Inc. (Nuestra) pursuant to a Stock Purchase Agreement with the
previous record holder, Osmundo R. Saguil, M.D. (Prior Physician).  B.PMG
and the Prior Physician were parties to a Second Amended and Restated Option
Agreement effective August 8, 2008 (the Prior Option Agreement) wherein
the Prior Physician granted PMG an assignable option to acquire the Shares.  C.A
condition of Physicians acquisition of record title to the Shares, was
Physicians agreement to grant PMG an assignable option to acquire the Shares,
as more fully set forth herein.  D.PMG
and Physician desire to amend and restate the Prior Option Agreement in its
entirety.  NOW,
THEREFORE, in consideration of the foregoing promises and other good and
valuable consideration, the receipt and sufficiency of which are hereby
acknowledged by the parties, PMG and Physician agree as follows:  1.GRANT
OF OPTION.  Physician hereby grants to
PMG the assignable right to designate a successor purchaser (Successor
Purchaser) of the Shares (the Option).  2.TERM
OF AGREEMENT.  The term of this Agreement
commences as of the day and year first above written and continues for thirty
(30) years (Term).  3.OPTION
PRICE.  The purchase price for the Option
(the Option Price) is One  Dollar
($1.00) and Physician acknowledges receipt of such payment.  4.EXERCISE
OF OPTION.  Subject to applicable law:  4.1During
the Term of this Agreement, PMG may elect to exercise the Option at any time.  4.2To
the extent that the Option is exercised by PMG, PMG will send Physician a
written notice (the Stock Exercise Notice) specifying the Stock to be
purchased and the name of the Successor Purchaser who will exercise the Option.  4.3PMG
may cancel any Stock Exercise Notice at any time.


4.4Physician
shall cooperate with PMG or any Successor Purchaser in any due diligence.  5.ASSIGNMENT
OF THE OPTION.  PMG may elect to assign
the Option to any person, by a written assignment, signed by both PMG and the
assignee.  The assignee shall agree as a
condition of the assignment to be bound by the terms of this Agreement.  6.PURCHASE
PRICE OF THE SHARES.  6.1PURCHASE
PRICE.  The purchase price for the Shares
to be purchased pursuant to the exercise of the Option shall be $1.00 (Stock
Purchase Price).  PMG shall cause the
Successor Purchaser to pay Physician the Stock Purchase Price.  6.2CLOSING.  The transactions contemplated by this
Agreement are to close fifteen (15) days after the date of the Stock Exercise
Notice (Closing), unless extended by PMG.  7.ADDITIONAL
OBLIGATIONS OF PHYSICIAN.  7.1AFFIRMATIVE
COVENANTS.  Physician shall:  (a)ACCESS.  Permit PMG, its representatives, and its
agents access to inspect the Shares certificate at any time, and to make copies
of records pertaining to the Shares, at reasonable times at PMGs request;  (b)REPORTS.  Furnish PMG any reports relating to the
Shares at PMGs request;  (c)DELIVERY
OF CERTIFICATES.  Deliver to PMG all
certificates heretofore issued representing all of the Shares held by
Physician, and each certificate hereafter issued representing any Share, with
each certificate endorsed in blank for transfer.  7.2NEGATIVE
COVENANTS.  Without the prior written
consent of PMG, Physician shall not:  (a)TRANSFER.  Other than as contemplated by the First Lien
Pledge Agreement by and among Physician, PMG, Prospect Medical Holdings, Inc.
(Holdings), Prospect Medical Systems, Inc. (PMS), Bank of America,
N.A., as administrative agent and the Second Lien Pledge Agreement by and among
Physician, PMG, Holdings, PMS, Bank of America, N.A., as administrative agent
(the Pledge Agreement), sell, lease, transfer, or otherwise dispose of the
Shares;  (b)DEBT.  Incur, guarantee, assume or otherwise become
liable for any borrowing or increase any existing indebtedness; or discharge or
cancel any debt owed to Physician;  (c)NO
FURTHER HYPOTHECATION.  Other than as
contemplated by the Pledge Agreements, pledge, hypothecate, encumber, redeem or
dispose of the Shares or  2


any interest
therein until all of Physicians obligations under this Agreement have been
fully satisfied or the Stock has been released;  8.CONFIDENTIALITY;
SUBORDINATION.  8.1The
parties shall use all good faith efforts to keep the contents of this Agreement
and all other aspects of the negotiations preceding execution of this Agreement
confidential.  Unless required by law,
neither Physician nor PMG shall  disclose
the contents of this Agreement or the negotiations leading to this Agreement to
third parties without the prior written consent of the other party.  PMG shall ensure that all of the assignees
likewise comply with the obligations of confidentiality imposed by this
Section, except that PMG and the assignees may disclose the contents of such to
their respective agents, representatives, contractors, and employees to the
extent necessary to exercise their respective rights or perform their
respective obligations hereunder.  8.2Notwithstanding
anything herein to the contrary, each of PMG, PMS and Holdings hereby
subordinates all of its rights under this Agreement to the rights of the First
Lien Administrative Agent and the Second Lien Administrative Agent under the
Pledge Agreements until the indefeasible payment in full in cash of all
Obligations (as such term is defined in each of the respective Credit
Agreements) and termination of all commitments to lend under the First Lien
Credit Agreement.  9.GENERAL.  9.1COMPLIANCE
WITH LAW.  PMG and Physician shall comply
with all applicable requirements of the Joint Commission on the Accreditation
of Healthcare Organizations, the Medicare and Medicaid programs, applicable
state law and regulations, and other licensing and accreditation authorities.  9.2RELATIONSHIP
OF PARTIES.  In the exercise of their
respective rights and the performance of their respective obligations under
this Agreement, PMG on the one hand and Physician (or any assignee) on the
other hand are acting in the capacity of the grantor and grantee of an option
to purchase the Shares, and nothing in this Agreement is intended nor shall be
construed to create between the parties an employer/employee relationship, a
partnership or joint venture relationship or a landlord/tenant relationship.  9.3ASSIGNMENT.  All of PMGs rights and duties under this
Agreement may be assigned or delegated by PMG including, but not limited to,
Bank of America, N.A., in its capacity as Administrative Agent and/or control
agent under the First Lien Credit Agreement, dated as of August 8, 2007
(as amended, supplemented, restated, or modified from time to time, the First
Lien Credit Agreement) among Holdings, PMG, Bank of America, N.A., as First
Lien Administrative Agent, and the Lenders party thereto, and the Second Lien
Credit Agreement, dated as of August 8, 2007 (as amended, supplemented,
restated or modified from time to time, the Second Lien Credit Agreement and
together with the First Lien Credit Agreement, the Credit Agreements) among
Holdings, PMG, Bank of America, N.A., as Second Lien Administrative Agent, and
the Lenders party thereto. 
Notwithstanding any other provision of this Agreement, neither this
Agreement nor the rights and duties of this Agreement may be  3


assigned or
delegated by Physician.  This Agreement
binds the successors, heirs, and authorized assignees of the parties.  9.4ENTIRE
AGREEMENT.  Except as expressly provided
in this Agreement to the contrary, this Agreement, including its incorporated
exhibits, constitutes the entire agreement between the parties with respect to
the Option, and supersedes all other and prior agreements on the same subject,
whether written or oral, and contains all of the covenants and agreements
between the parties with respect to the subject matter hereof.  Except as expressly provided in this Agreement
to the contrary, each party to this Agreement acknowledges that no
representations, inducements, promises, or agreements, orally or otherwise,
have been made by any other party hereto, or by anyone acting on behalf of any
party hereto, that are not embodied herein, and that no agreement, statement,
or promise not contained in this Agreement shall be valid or binding.  9.5COUNTERPARTS.  This Agreement, and any amendments hereto,
may be executed in counterparts, each of which shall constitute an original
document, but which together shall constitute one and the same instrument.  9.6HEADINGS.  The section headings contained in this
Agreement are inserted for convenience only and shall not affect in any way the
meaning or interpretation of this Agreement.  9.7NOTICES.  Any notices required or permitted to be given
hereunder by any party to another shall be in writing and shall be deemed
delivered upon personal delivery, twenty-four (24) hours following deposit with
a courier for overnight delivery or seventy two (72) hours following deposit in
the U.S. Mail, registered or certified mail, postage prepaid, return-receipt
requested, addressed to the parties at the following addresses or to such other
addresses as the parties may specify in writing:  If to PMG:  Prospect
Medical Group
1920 East 17th Street, Suite 200
Santa Ana, California 92705  If to
Physician:  Arthur Lipper,
M.D.
c/o Prospect Medical Group
1920 East 17th Street, Suite 200
Santa Ana, California 92705  9.8GOVERNING
LAW.  This Agreement shall be governed by
and construed in accordance with the laws of the State of California.  9.9AMENDMENT.  This Agreement may be amended at any time by
agreement of PMG and Physician, provided that any amendment shall be in writing
and executed by PMG and Physician.  4


9.10SEVERABILITY.  If any provision of this Agreement is held by
a court of competent jurisdiction to be invalid or unenforceable, the remaining
provisions will nevertheless continue in full force and effect, unless such
invalidity or unenforceability would defeat an essential business purpose of
this Agreement.  9.11FEES
AND EXPENSES.  PMG shall bear all
expenses, including, without limitation, attorneys and accountants fees,
incurred in connection with the preparation of this Agreement and the
transactions contemplated hereby.  9.12TIME
OF ESSENCE.  Time is expressly made of
the essence of this Agreement and each and every provision hereof of which time
of performance is a factor.  9.13ATTORNEYS
FEES.  Should any of the parties hereto
institute any action or procedure to enforce this Agreement or any provision
hereof (including without limitation, arbitration), or for damages by reason of
any alleged breach of this Agreement or of any provision hereof, or for a
declaration of rights hereunder (including, without limitation, by means of
arbitration), the prevailing party in any such action or proceeding shall be
entitled to receive from the other party all costs and expenses, including
without limitation reasonable attorneys fees, incurred by the prevailing party
in connection with such action or proceeding.  9.14FURTHER
ASSURANCES.  The parties shall take such
actions and execute and deliver such further documentation as may reasonably be
required in order to give effect to the transactions contemplated by this
Agreement and the intentions of the parties hereto.  9.15RIGHTS
CUMULATIVE.  The various rights and
remedies herein granted to the respective parties hereto shall be cumulative
and in addition to any other rights any such party may be entitled to under
law.  The exercise of one or more rights
or remedies by a party shall not impair the right of such party to exercise any
other right or remedy, at law or equity.  5


IN WITNESS
WHEREOF, PMG and Physician execute this Agreement as set forth below.  PROSPECT
  MEDICAL GROUP, INC.,
  
  PHYSICIANa California
  professional corporation/s/ Samuel S. Lee
  
  /s/ Arthur Lipper, M.D.Samuel S.
  Lee
  
  Arthur
  Lipper, M.D.Senior Vice
  President   Acknowledged and Agreed:  The
undersigned acknowledges and agrees that after the date hereof references to Physician
under this Agreement shall refer solely to Dr. Lipper and that the
undersigned is no longer be a party to this Agreement.  /s/ Osmundo R. Saguil, M.D.Osmundo R.
  Saguil, M.D.  6


SPOUSAL JOINDER AND CONSENT  I am the
spouse of Arthur Lipper, M.D., the holder of the record title to the shares
of  Prospect Medical Group, Inc., a
California professional medical corporation (PMG) in Nuestra Familia Medical Group, Inc., a
California professional medical corporation (Physician).  To the
extent that I have any interest in any of the Shares (as that term is defined
in the Third Amended and Restated Option Agreement (the Option Agreement), entered into as of
this date, by and among Physician and PMG, I hereby join in the Option
Agreement and agree to be bound by its terms and conditions to the same extent
as my spouse.  I have read the Option
Agreement, understand its terms and conditions, and to the extent that I have
felt it necessary, have retained independent legal counsel to advise me
concerning the legal effect of the Option Agreement and this Spousal Joinder
and Consent.  I understand
and acknowledge that PMG is relying on the validity and accuracy of this
Spousal Joinder and Consent in entering into the Option Agreement.  Executed this
8th day of November, 2008.   Signature:
  /s/ Allyson LipperPrinted or Typed Name:
  Allyson
  Lipper  7