Exhibit 10.87


 


SPENCER TRASK
VENTURES, INC.


535 Madison Avenue,
18th Floor


New York, New York
10022


 


January 15, 2004


 


Prospect Medical Holdings, Inc.


6083 Bristol Parkway, Suite 100


Culver City, California 90230,


	
  Attn.:

  	
   

  	
  Jacob Y.
  Terner, M.D.

  
	
   

  	
   

  	
  Chief Executive
  Officer

  



 


Re:          Finder’s Fee Agreement


 


Dear Mr. Evans:


 


This will confirm our agreement, referred to in Section 3(g) of the
Placement Agency Agreement (the “Agency Agreement”), dated November 1, 2003,
between Spencer Trask Ventures Inc. (“Spencer Trask”) and Prospect Medical
Holdings, Inc. (the “Company”) to act as a non-exclusive finder for the
Company.


 


In the event that the Company shall, at any time after the Final
Closing (as defined in the Agency Agreement) and prior to the two (2) year
anniversary of the Final Closing, consummate a significant transaction,
including, without limitation, any sale or exchange of stock or assets, merger,
consolidation, acquisition, financing, joint venture, a material investment in
the securities of or loan to the Company, a purchase of a material portion of
the stock of the Company (collectively, a “Material Transaction”) with any
third party introduced by Spencer Trask to the Company, directly or indirectly,
during the twelve (12) months immediately following the Final Closing, as a (i)
potential candidate for such Material Transaction or (ii) strategic partner,
investor or customer during such period, the Company shall pay to Spencer Trask
a fee (the “Finder’s Fee”) equal to (i) five percent (5%) of the first $1,000,000
or a portion thereof; plus (ii) four percent (4%) of any transaction value in
excess of $1,000,000 but less than $2,000,000; plus (iii) three percent
(3%) of any transaction value in excess of $2,000,000 but less than $3,000,000;
plus (iv) two percent (2%) of any transaction value in excess of $3,000,000 but
less than $4,000,000; plus (v) one percent (1%) of any transaction value in
excess of $4,000,000.


 


The Company shall have the right, in its sole discretion, to reject any
third party’s offer or to abandon any Material Transaction undertaken by the
Company prior to the actual closing of such Material Transaction.  Any determination as to whether to
consummate a Material Transaction shall be made by the Company’s Board of
Directors, and no Finder’s Fee shall be due and owing unless a Material
Transaction is closed.


 


The Finder’s Fee due Spencer Trask shall be paid by the Company on the
date of closing of such Transaction, regardless of whether the consummated
Transaction involves payment on an installment basis.


 

















 


For purposes of calculating any Finder’s Fee
to which Spencer Trask has demonstrated its entitlement, the transaction value
of each Material Transaction undertaken by the Company shall not be aggregated
with the transaction value of any other Material Transaction previously
undertaken by the Company except where the parties to each such transaction
were affiliated with one another prior to the completion of such
transactions.  Any such Finder’s Fee due
shall be paid at the closing of the Material Transaction for which the Finder’s
Fee is payable.


 


In the event
that, for any reason, the Company shall fail to pay to Spencer Trask all or any
portion of the Finder’s Fee payable hereunder when due, interest shall accrue
and be payable on the unpaid cash balance due hereunder from the date when
first due through and including the date when actually collected by Spencer
Trask,  at a rate equal to five
percent (5%), computed on a daily basis.


 


The Company
represents and warrants to Spencer Trask that Spencer Trask’s engagement
hereunder has been duly authorized and approved by the Board of Directors of
the Company.


 


This letter
agreement (i) shall be governed by, and construed in accordance with, the laws
of the State of New York, (ii) may not be assigned by either party without
prior written consent of the other party, (iii) may not by modified or amended
except in writing, (iv) constitutes the entire agreement of the parties with
respect to the subject matter hereof superseding all prior agreements and
understandings, written or oral and (v) may be executed in counterparts each of
which shall be deemed to be an original and all of which shall constitute one
agreement.


 


[REST OF PAGE INTENTIONALLY BLANK]


 


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If the
foregoing accurately reflects our understanding, please so indicate by signing
in the space provided below.


 


 


	
   

  	
  Sincerely,

  
	
   

  	
   

  
	
   

  	
   

  
	
  SPENCER
  TRASK VENTURES, INC.

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
  By:

  	
   

  	
   

  	
   

  
	
   

  	
  Name:
  William P. Dioguardi

  	
   

  
	
   

  	
  Title:
  President

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
  Agreed and Accepted:

  	
   

  
	
   

  	
   

  
	
  This 15th
  day of January, 2004

  	
   

  
	
   

  	
   

  
	
  PROSPECT
  MEDICAL HOLDINGS, INC.

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
  By:

  	
   

  	
   

  	
   

  
	
   

  	
  Name: Jacob
  Y. Terner, M.D.

  	
   

  
	
   

  	
  Title: Chief
  Executive Officer

  	
   

  
					



 


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