Document:

Exhibit 10.65

 

AMENDED AND
RESTATED SECURED REVOLVING NOTE

 

	
  $11,500,000

  	
  Los Angeles, California

  
	
   

  	
  July 3, 1999

  

 

1.                                       FOR VALUE
RECEIVED, PROSPECT MEDICAL HOLDINGS, INC., a Delaware corporation, (“Maker”),
promises to pay to the order of IMPERIAL BANK, a California banking corporation
(“Payee”), on or before the Maturity Date, the principal sum of Eleven
Million Five Hundred Thousand Dollars ($11,500,000), or such lesser sum as
shall equal the aggregate, outstanding principal amount of the Revolving Loans
made by Payee to Maker pursuant to the Agreement (as defined below).

 

2.                                       This Amended and
Restated Secured Revolving Note (this “Note”) shall bear interest at a
per annum rate equal to the Prime Rate plus me Applicable Margin (the “Lending
Rate”).  As used herein “Prime
Rate” means the rate of interest announced by Payee at its corporate
headquarters as its prime rate and which serves as the basis upon which
effective rates of interest are calculated for those loans making reference
thereto.  The Prime Rate is determined
by Payee from time to time as a means of pricing credit extensions to some
customers and is neither directly tied to some external rate of interest or
index nor necessarily the lowest rate of interest charged by Payee at any given
time for any particular class of customers or credit extensions.  All computations of interest shall be
calculated on the basis of a year of three hundred sixty (360) days for the
actual days elapsed.  In the event that
the Prime Rate announced is, from time to time, changed, adjustment in the rate
of interest payable hereunder shall be made as of 12:01 a.m. (California time)
on the effective date of the change in the Prime Rate.  Interest shall accrue from the date of this
Note to the date of repayment of this Note in accordance with the provisions
hereof.  Maker shall pay all accrued but
unpaid interest on the Revolving Loans, in arrears, on the first Business Day
of each and every month.  As used
herein, “Business Day” means any day other than a Saturday, a Sunday, or
a day on which commercial banks in the City of Los Angeles, California are
authorized or required by law or executive order or decree to close.

 

3.                                       Maker hereby
authorizes Payee to record in its books and records the date and amount of each
Revolving Loan, and of each payment of principal made by Maker, and Maker
agrees that all such notations shall, in the absence of manifest error, be
conclusive as to the matters so noted; provided, however, any
failure by Payee to make such notation with respect to any Revolving Loan or
payment thereof shall not limit or otherwise affect Maker’s obligations under
the Agreement or this Note.

 

4.                                       If any payment
due hereunder or under the Agreement shall not be paid when due (whether at the
stated maturity, by acceleration or otherwise), in addition to and not in
substitution of any other rights and remedies which Payee may have with respect
to such nonpayment, the entire principal balance owing hereunder shall bear
interest at the Lending Rate plus five hundred (500) basis points until
such overdue payment is paid in full. 
In addition, interest,

 

 

Bank
Expenses and Fees due hereunder or under the Agreement not paid when due shall
bear interest at the Lending Rate plus five hundred (500) basis points
until such overdue payment is paid in full.

 

5.                                       If any payment due hereunder, whether for
principal, interest, or otherwise, is not paid on or before the tenth day after
the date such payment is due, in addition to and not in substitution of any of
Payee’s other rights and remedies with respect to such nonpayment, Maker shall
pay to Payee, a late payment fee (“Late Payment Fee”) equal to five
percent (5 %) of the amount of such overdue payment.  The Late Payment Fee shall be due and payable on the eleventh day
after the due date of the overdue payment with respect thereto.

 

6.                                       Maker shall make all payments hereunder in
lawful money of the United States of America and in immediately available funds
to Payee at Payee’s office located at 9920 South La Cienega Boulevard, Suite
628, Inglewood, CA 90301, Attention Lending Services Department; or to such
other address as Payee may from time to time specify by notice to Maker in
accordance with the terms of the Agreement.

 

7.                                       In no event shall the interest rate and other
charges hereunder exceed the highest rate permissible under any law which a
court of competent jurisdiction shall, in a final determination, deem
applicable hereto.  In the event that
such a court determines that Payee has received interest and other charges
hereunder in excess of the highest rate applicable hereto, such excess shall be
deemed received on account of, and shall automatically be applied to reduce,
the principal balance hereof, and the provisions hereof shall be deemed amended
to provide for the highest permissible rate. 
If there is no principal balance outstanding, Payee shall refund to
Maker such excess.

 

8.                                       This Note is the “Note” referred to in that
certain Amended and Restated Revolving Credit Agreement, dated as of
July 3, 1999, (as may be at any time hereafter amended, supplemented, or
otherwise modified or restated, the “Agreement”), by and between Maker,
as Borrower, and Payee, as Bank, and is governed by the terms thereof.  Initially capitalized terms used but not
defined herein shall have the meanings assigned to such terms in the
Agreement.  The Agreement, among other
things, contains provisions for acceleration of the maturity of this Note upon
the happening of certain stated events and also for prepayments on account of
principal of this Note prior to the maturity hereof upon the terms and
conditions specified in the Agreement.

 

9.                                       This Note is secured by the Liens granted to
Payee under the Loan Documents.

 

10.                                 Maker hereby waives presentment for payment,
notice of dishonor, protest and notice of protest.

 

11.                                 This Note shall be governed by and construed
in accordance with the internal laws of the State of California without regard
to principles of conflicts of laws.

 

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12.                                 (a)                                  Other than (i) nonjudicial foreclosure and
all matters in connection therewith regarding security interests in real or
personal property; or (ii) the appointment of a receiver, or the exercise of
other provisional remedies (any and all of which may be initiated pursuant to applicable
law), each controversy, dispute or claim between Maker and Payee arising out of
or relating to this Note, which controversy, dispute or claim is not settled in
writing within thirty (30) days after the “Claim Date” (defined as
the date on which either Maker or Payee gives written notice to the other that
a controversy, dispute or claim exists), will be settled by a reference
proceeding in California in accordance with the provisions of Section 638 et
seq. of the California Code of Civil Procedure, or their successor
section (“CCP”), which shall constitute the exclusive remedy for
the settlement of any controversy, dispute or claim concerning this Note,
including whether such controversy, dispute or claim is subject to the
reference proceeding and except as set forth above, Maker and Payee waive their
rights to initiate any legal proceedings against each other in any court or
jurisdiction other than the Superior Court in the County where any real
property collateral is located, or Los Angeles County, if none (the “Court”).  The referee shall be a retired Judge of the
Court selected by mutual agreement of Maker and Payee, and if they cannot so
agree within forty-five (45) days after the Claim Date, the referee shall be
promptly selected by the Presiding Judge of the Court (or his or her
representative).  The referee shall be
appointed to sit as a temporary judge, with all of the powers for a temporary
judge, as authorized by law, and upon selection should take and subscribe to
the oath of office as provided for in Rule 244 of the California Rules of Court
(or any subsequently enacted Rule). 
Each party shall have one peremptory challenge pursuant to CCP
§ 170.6.  The referee shall (i) be
requested to set the matter for hearing within sixty (60) days after the Claim
Date and (ii) try any and all issues of law or fact and report a statement of
decision upon them, if possible, within ninety (90) days of the Claim
Date.  Any decision rendered by the
referee will be final, binding and conclusive and judgment shall be entered
pursuant to CCP § 644 in any court in the State of California having
jurisdiction.  Any party may apply for a
reference proceeding at any time after thirty (30) days following notice to any
other party of the nature of the controversy, dispute or claim, by filing a
petition for a hearing and/or trial. 
All discovery permitted by herein shall be completed no later than
fifteen (15) days before the first hearing date established by the referee.  The referee may extend such period in the
event of a party’s refusal to provide requested discovery for any reason
whatsoever, including, without limitation, legal objections raised to such
discovery or unavailability of a witness due to absence or illness.  No party shall be entitled to “priority” in conducting
discovery.  Depositions may be taken by
either party upon seven (7) days written notice, and request for production or
inspection of documents shall be responded to within ten (10) days after
service.  All disputes relating to
discovery which cannot be resolved by Maker and Payee shall be submitted to the
referee whose decision shall be final and binding upon the parties.  Pending appointment of the referee as
provided herein, the Superior Court is empowered to issue temporary and/or
provisional remedies, as appropriate.

 

(b)                                 Except as expressly set forth herein, the
referee shall determine the manner in which the reference proceeding is
conducted including the time and place of all hearings, the order of
presentation of evidence, and all other questions that arise with respect to
the course of the reference proceeding. 
All proceedings and hearings conducted before the referee, except for
trial, shall be conducted without a court reporter except that when any party
so requests, a court reporter will be used at any hearing conducted before the
referee.  The party making such a
request shall have

 

3

 

the
obligation to arrange for and pay for the court reporter.  The costs of the court reporter at the trial
shall be borne equally by the parties.

 

(c)                                  The referee shall be required to determine
all issues in accordance with existing case law and the statutory laws of the
State of California.  The rules of
evidence applicable to proceedings at law in the State of California will be
applicable to the reference proceeding. 
The referee shall be empowered to enter equitable as well as legal
relief, to provide all temporary and/or provisional remedies and to enter
equitable orders that will be binding upon the parties.  The referee shall issue a single judgment at
the close of the reference proceeding which shall dispose of all of the claims
of the parties that are the subject of the reference.  Maker and Payee expressly reserve the right to contest or appeal
from the final judgment or any appealable order or appealable judgment entered
by the referee.  Maker and Payee
expressly reserve the right to findings of fact, conclusions of laws, a written
statement of decision, and the right to move for a new trial or a different
judgment, which new trial, if granted, is also to be a reference proceeding
under this provision.

 

(d)                                 In the event that the enabling legislation
which provides for appointment of a referee is repealed (and no successor
statute is enacted), any dispute between Maker and Payee that would otherwise
be determined by the reference procedure herein described will be resolved and
determined by arbitration.  The
arbitration will be conducted by a retired judge of the Court, in accordance
with the California Arbitration Act. § 1280 through § 1294.2 of the
CCP as amended from time to time.  The
limitations with respect to discovery as set forth hereinabove shall apply to
any such arbitration proceeding.

 

13.                                 This Note amends and restates that certain
Replacement Secured Revolving Note, dated as of February 6, 1998, in the
amount of Twelve Million Five Hundred Thousand

 

4

 

Dollars
($12,500,000), executed by Maker to the order of Payee, and continues the
obligations of Maker incurred thereunder.

 

IN WITNESS WHEREOF, Maker has duly executed this Note as of the date
first above written.

 

	
  Maker:

  	
  PROSPECT MEDICAL HOLDINGS, INC.,

  
	
   

  	
  a
  Delaware corporation

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By

  	
   

  	
  R. Stewart Kahn

  	
   

  
	
   

  	
  Title

  	
   

  	
  Executive
  Vice President

  	
   

  
	
   

  	
   

  
	
   

  
	
  ACCEPTED AND AGREED:

  
	
   

  
	
  IMPERIAL BANK,

  
	
  a
  California banking corporation

  
	
   

  
	
   

  
	
  By

  	
   

  	
  [ILLEGIBLE]

  	
   

  
	
  Title

  	
   

  	
  Senior Vice President

  	
   

  
										

 

5Exhibit
10.66

 

FIRST AMENDMENT

TO

AMENDED AND RESTATED SECURED REVOLVING NOTE

 

This
First Amendment to Amended and Restated Secured Revolving Note (“Amendment”) is
entered into as of October 25, 2000, between 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 an Amended and Restated Secured Revolving
Note, dated as of July 3, 1999 (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 Amount.”   The number “$11,500,000,” appearing in the
upper left-hand corner of the first page of the Note is hereby deleted
therefrom and replaced with the number “$4,000,000.”

 

1.2           Amendment of Paragraph 1.   Paragraph
number 1 of the Note is hereby amended and restated to read in its entirety as
follows:

 

“1.           For Value Received,
Prospect Medical Holdings, Inc., a Delaware corporation (‘Maker’), promises to
pay to the order of Imperial Bank, a California banking corporation (‘Payee’),
on or before the Maturity Date, the principal sum of four million dollars
($4,000,000) or such lesser sum as shall equal the aggregate, outstanding
principal, amount of the Revolving Loans made by Payee to Maker pursuant to the
Agreement (as defined below).”

 

ARTICLE 2 – REPRESENTATIONS AND WARRANTIES

 

2.1           Borrower’s Representations and
Warranties.  In order to induce the
Bank to enter into this Amendment, the Borrower represents and warrants to the
Bank that the Borrower has

 

1

 

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           Acknowledgment
of Borrower.  The Borrower expressly
acknowledges and agrees that as of the date of this Amendment, it has no
offsets, claims or defenses whatsoever against any of the Obligations owing to
the Bank.

 

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.

 

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”

  
	
  Imperial Bank

  	
  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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