Exhibit
10.72


 


THIRD AMENDMENT

TO

TERM LOAN NOTE


 


This Third Amendment to Term Loan Note (“Amendment”) is entered into as
of July 12, 2002, between Comerica Bank-California, successor-by-merger to
Imperial Bank (the “Bank”), and Prospect Medical Holdings, Inc. (the
“Borrower”).


 


RECITALS


 


This Amendment is being entered into in reference to the following
facts:


 


The Borrower and the Bank entered into a Term Loan Note, dated as of
October 25, 2000, in the original principal sum of $5,000,000 (as
modified, amended, and supplemented to the date hereof, the “Note”).
Capitalized terms used, but not defined herein, shall have the meanings
ascribed thereto in the Note.  The Bank
and the Borrower desire to amend the Note in certain respects subject to the
terms and conditions hereof.


 


NOW, THEREFORE, in consideration of the mutual covenants contained
herein, the parties hereto hereby agree as follows:


 


ARTICLE 1 - AMENDMENTS


 


1.1           Amendment of Third Paragraph.  The
third paragraph of the Note is hereby amended and restated to read in its
entirety as follows:


 


“Unless sooner due and
payable under the provisions of the Credit Agreement, the principal amount of
this Note shall be payable in fifteen (15) consecutive monthly
installments.  The first fourteen (14)
of such installments shall be payable on the twelfth (12th) day of
each month hereafter, with the first such installment being due on
August 12, 2002. The fifteenth (15th) and final installment
shall be payable on October 3, 2003. The first fourteen (14) installments
shall each be in the amount of $100,000, and the fifteenth (15th)
installment shall be in the amount of the then unpaid principal balance of the
Term Loan.”


 


1.2           Amendment of Fourth Paragraph.  The
fourth paragraph of the Note is hereby amended and restated to read in its
entirety as follows:


 


“Borrower shall prepay this
Note as provided in the Credit Agreement and as provided herein.  In addition to any other payments specified
herein or therein, Borrower shall pay to Bank, for application to the debt evidenced
hereby, all proceeds of the


 


1

















 


Claims and the Judgment as and when received by Borrower. ‘Claims and
Judgment’ means all claims raising out of the loss, non-conformity,
interference with the use of, defects, or infringement of right in, or damage
to any of the Collateral (as defined in the Security Agreement (Borrower)) by
Pacificare of California and/or St. Jude Hospital, Inc. and any arbitration
award and any judgment entered on those claims in favor of Borrower against
either of them, including the arbitration award in favor of Borrower against
Pacificare of California and St. Jude Hospital, Inc. and the judgment entered
thereon in the case entitled Prospect Medical Holdings, Inc. vs. Pacificare of
California (case
number 815670), issued by the Superior Court of California, County of Orange,
Central Justice Center, in the amount of $2,190,522. All other prepayments may
be made at Borrower’s option.  All such
prepayments shall be made without prepayment penalty or premium.  All such prepayments shall be applied first
to the satisfaction of the Bank’s Expenses and Fees, second, to accrued
and unpaid interest due hereunder, and third to installments of
principal hereof in inverse order of their maturity.”


 


ARTICLE 2 –
REPRESENTATIONS AND WARRANTIES


 


In order to induce the Bank to enter into this Amendment, the Borrower
represents, warrants, and covenants to the Bank as follows.


 


2.1           Borrower’s Representations and Warranties.  The
Borrower has the power and authority and has taken all action necessary to
execute, deliver and perform this Amendment and all other agreements and
instruments executed or delivered to be executed or delivered in connection
herewith and therewith and this Amendment and such other agreements and
instruments constitute the valid, binding and enforceable obligations of the
Borrower.


 


2.2           No Offsets.  As of the date of this
Amendment, it has no offsets, claims or defenses whatsoever against any of the
Obligations owing to the Bank.


 


2.3           Proceeds of Collateral.  The
Claims and Judgment are part of the proceeds of the Collateral for the
Obligations.  If those proceeds are for
any reason determined not to be the proceeds of the Collateral, then the
Borrower hereby grants to the Bank a security interest in the Claims and the
Judgment and the proceeds thereof for the purpose of securing payment and
performance of the Obligations.


 


ARTICLE 3 – GENERAL
PROVISIONS


 


3.1           Full Force and Effect. 
Except as expressly amended hereby, the Note and all other documents,
agreements and instruments relating to thereto are and shall remain unmodified
and in full force and effect.


 


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3.2.          Counterparts. 
This Amendment may be executed in any number of counterparts, each of
which when so executed and delivered shall be deemed to be an original and that
all of which taken together shall constitute one and the same instrument,
respectively.  Delivery of an executed
counterpart of this Amendment by facsimile shall be equally effective as
delivery of a manually executed counterpart of this Amendment.  Any party delivering an executed counterpart
by facsimile shall also deliver a manually executed counterpart of this
Amendment, but failure to do so shall not effect the validity, enforceability,
of binding effect of this Amendment.


 


3.3           Final Agreement.  This Amendment is intended by the Borrower
and the Bank to be the final, complete, and exclusive expression of the
agreement between them with respect to the subject matter hereof.  This Amendment supersedes any and all prior
oral or written agreements relating to the subject matter hereof.


 


IN WITNESS WHEREOF, the parties hereto have caused this Amendment to be
duly executed by their duly authorized officers as of the date first above
written.


 


	
  “PAYEE”

  	
  “MAKER”

  
	
  Comerica
  Bank-California

  	
  Prospect
  Medical Holdings, Inc.

  
	
   

  	
   

  
	
   

  	
   

  
	
  By:

  	
  /s/
  Thomas Turner

  	
   

  	
  By:

  	
  /s/
  R. Stewart Kahn

  	
   

  
	
   

  	
  Thomas
  Turner,

  	
   

  	
  R.
  Stewart Kahn,

  
	
   

  	
  Vice
  President

  	
   

  	
  Executive
  Vice President

  
						



 


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