Exhibit 10.38


 


AMENDMENT NUMBER ONE TO COLLATERAL

ASSIGNMENT OF TRANSACTION DOCUMENTS


 


THIS AMENDMENT NUMBER ONE TO COLLATERAL ASSIGNMENT OF TRANSACTION
DOCUMENTS (this “Amendment”) has been executed and delivered as of
January 26, 2000, by and between PROSPECT MEDICAL SYSTEMS, INC., a Delaware
corporation (“Assignor”), and IMPERIAL BANK, a California banking
corporation (“Bank”), with reference to the following facts:


 


RECITALS


 


A.            Assignor and Bank
have entered into that certain Collateral Assignment of Transaction Documents,
dated as of July 3, 1997 (the Assignment”), pursuant to which Assignor
assigned to Bank the Transaction Documents.


 


B.            The Transaction
Documents included that certain Assignable Option Agreement, dated as of June
5, 1996, by and among Assignor, Physician Group, and Gregg DeNicola, M.D. (“DeNicola”)
relating in part to shares of Physician Group (the “Shares”) owned by
DeNicola (the “Old Option Agreement”).


 


C.            On September 2,
1998, Physician Group, Assignor and DeNicola, entered into that certain Amended
and Restated Assignable Option Agreement, pursuant to which Assignor exercised
its option to buy all the Shares from DeNicola and designated Jacob Y.  Terner (“Terner”) as the Successor
Physician to DeNicola on January 13, 2000.


 


D.            Assignor, Physician
Group and Terner are contemporaneously herewith entering into that certain
Assignable Option Agreement (the “New Option Agreement”), to reflect
Terner as the owner of the Shares.


 


E.             Assignor and Bank
have agreed to amend the Assignment to include the New Option Agreement as one
of the Transaction Documents.


 


AGREEMENT


 


In consideration of the premises and the mutual agreements herein set
forth, Assignor and Bank hereby agree as follows:


 


1.             Defined Terms.  All initially capitalized terms used but not
defined herein shall have the meanings assigned to such terms in the
Assignment.


 


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2.             Amendments.


 


2.1           Section 2.1(b) of the Assignment is
amended to read as follows:


 


“(b)         Assignable Option Agreement,
dated as of January 13, 2000, by and among Assignor, Physician Group and Jacob
Y. Terner, M.D.; and”


 


3.             Transaction Documents.  Concurrent herewith, Assignor is delivering
to Bank possession of the original New Option Agreement, together with any and
all amendments thereto, as in effect on the date hereof.


 


4.             Counterparts: Effectiveness.  This Amendment may be executed in any number
of counterparts, each of which, when executed and delivered, shall be deemed to
be an original.  All of such counterparts,
taken together, shall constitute but one and the same agreement.  This Amendment shall become effective upon
the execution of a counterpart of this Amendment by each of the parties hereto.


 


5.             Limited Effect.  In the event of a conflict between the terms
and provisions of this Amendment and the terms and provisions of the
Assignment, the terms and provisions of this Amendment shall govern.  In all other respects, the Assignment, as
amended and supplemented hereby, shall remain in full force and effect.


 


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EXECUTED as of the date first above written.


 


	
   

  	
  “Assignor”

  
	
   

  	
   

  
	
   

  	
  PROSPECT MEDICAL SYSTEMS, INC.,

  a Delaware corporation

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ [ILLEGIBLE]

  	
   

  
	
   

  	
  Title:

  	
  [ILLEGIBLE]

  	
   

  
	
   

  	
   

  
	
   

  	
  “Bank”

  
	
   

  	
   

  
	
   

  	
  IMPERIAL BANK,

  
	
   

  	
  a California banking corporation

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ [ILLEGIBLE]

  	
   

  
	
   

  	
  Title:

  	
  [ILLEGIBLE]

  	
   

  
						



 


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CONSENT TO ASSIGNMENT


 


The undersigned acknowledges the terms of the above Amendment and the
Assignment, consents to the assignment by Assignor to Bank of the New Option
Agreement and agrees to recognize Bank or Bank’s nominee as Assignor’s assignee
under the New Option Agreement, notwithstanding anything to the contrary in
Section 5 of the New Option Agreement. 
The undersigned hereby represents and warrants to Bank that (i) it has
no knowledge of any fact or circumstance which would or could have a material
adverse effect on the rights granted to Bank in the New Option Agreement, (ii)
the New Option Agreement complies with all applicable laws and regulations,
(iii) the New Option Agreement is in full force and effect, and all signatures,
names, addresses, amounts and other statements and facts contained therein are
true and correct, and (iv) there are no defenses, offsets or counterclaims to
enforcement of the New Option Agreement.


 


ACKNOWLEDGED AND CONSENTED TO

THIS 26th DAY OF JANUARY, 2000:


 


	
  /s/ Jacob Y. Terrier

  	
   

  
	
  Jacob Y. Terrier, M.D.

  



 


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