Exhibit 10.12


 


AMENDMENT TO THIRD AMENDED AND RESTATED


OPTION AGREEMENT


 


THIS AMENDMENT TO THIRD
AMENDED AND RESTATED OPTION AGREEMENT (this “Amendment”), is made and entered
into as of July 29, 2009, by and between Prospect Medical Group, Inc.,
a California professional corporation (“PMG”), and Arthur Lipper, M.D. (“Shareholder”),
with reference to the following facts:


 


RECITALS


 


A.                                   The parties hereto  entered into
that certain Third Amended and Restated Option Agreement, dated as of November 26,
2008 (the “Option Agreement”).


 


B.                                     Effective as of
the date hereof, Prospect Medical Holdings, Inc., an affiliate of PMG,
refinanced its former senior credit facilities with a new senior secured notes
facility and a revolving credit facility (the “Credit Facility Refinancing”).


 


C.                                     The parties
desire to amend the Option Agreement to account for the Credit Facility
Refinancing by deleting all references to the replaced financing facilities.


 


NOW
THEREFORE, the parties to this Amendment hereby agree as follows:


 


AGREEMENT


 


1.                                       Amendments.


 


a.                                       Section 7.2(a) of
the Option Agreement is hereby amended to read, in its entirety, as follows:


 


“(a)                            TRANSFER.  Sell, lease, transfer, or otherwise dispose
of the Shares;”


 


b.                                      Section 7.2(c) of
the Option Agreement is hereby amended to read, in its entirety, as follows:


 


“(c)                            NO FURTHER
HYPOTHECATION.  Pledge, hypothecate,
encumber, redeem or dispose of the Shares or any interest therein until all of
Physician’s obligations under this Agreement have been fully satisfied or the
Stock has been released;”


 


c.                                       Section 8.2
of the Option Agreement is hereby amended to read, in its entirety, as follows:


 


“8.2                           [Intentionally
omitted.]”


 


d.                                      Section 9.3
of the Option Agreement is hereby amended to read, in its entirety, as follows:


 


“9.3                           ASSIGNMENT.  All of PMG’s rights and duties under this
Agreement may be assigned or delegated by PMG. 
Notwithstanding any other provision of this Agreement, neither this
Agreement nor the rights and duties of this Agreement may be assigned or
delegated by Physician.  


 

















 


This
Agreement binds the successors, heirs, and authorized assignees of the parties.”


 


2.                                       Full Force and
Effect.  Except as provided above, the
Option Agreement shall remain in full force and effect.


 


[signature
page follows]


 


2

















 


IN WITNESS WHEREOF, the
parties hereto have executed this Amendment as of the day and year first above
written.


 


 


	
   

  	
  “PMG”

  
	
   

  	
   

  
	
   

  	
  PROSPECT MEDICAL GROUP,
  INC.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Samuel S. Lee

  
	
   

  	
  Name: Samuel S. Lee

  
	
   

  	
  Title: Senior Vice
  President

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  “SHAREHOLDER”

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  /s/ Arthur Lipper, M.D.

  
	
   

  	
  Arthur Lipper, M.D.

  



 


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