Document:

Exhibit 10.33

 

THE EXCESS SAVINGS PLAN

 

OF

 

CELERA CORPORATION

 

 

Effective July 1,
2008

 

 

TABLE OF CONTENTS

 

	
   

  	
   

  	
   

  	
   

  	
  Page No.

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE 1

  	
   

  	
  Definitions

  	
   

  	
  1

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE 2

  	
   

  	
  Purpose of Plan

  	
   

  	
  5

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE 3

  	
   

  	
  Eligibility

  	
   

  	
  6

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE 4

  	
   

  	
  Benefits

  	
   

  	
  7

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE 5

  	
   

  	
  Investment Direction

  	
   

  	
  10

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE 6

  	
   

  	
  Administration

  	
   

  	
  13

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE 7

  	
   

  	
  Amendment and Termination

  	
   

  	
  16

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE 8

  	
   

  	
  Trust

  	
   

  	
  17

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE 9

  	
   

  	
  Miscellaneous

  	
   

  	
  18

  	
   

  

 

 

THE EXCESS SAVINGS PLAN

 

OF

 

CELERA CORPORATION

 

The Celera Corporation, a
Delaware corporation having its principal place of business in Alameda,
California, hereby adopts as of July 1, 2008, The Excess Savings Plan of
Corporation.

 

Prior to July 1,
2008, Celera Corporation was operated as a business unit of Applera
Corporation, became a wholly-owned subsidiary of Applera Corporation, and after
its split-off from Applera Corporation, Celera Corporation became a separate
public company.  In addition to providing
retirement benefits where contributions are limited under the Savings Plan
because of the application of Code Section 415 and Code Section 401(a)(17)
for Employees of Celera, this Plan is being established to administer accrued
benefits and account balances earned pursuant to the Excess Benefit Plan of
Applera Corporation and the Applera Corporation Supplemental Executive
Retirement Plan by Participants who previously were Employees of Applera
Corporation.

 

ARTICLE 1

Definitions

 

The words and phrases
defined hereinafter shall have the following meaning:

 

Section 1.1
– Act.  Shall mean the Employee
Retirement Income Security Act of 1974, as amended.

 

Section 1.2
– Beneficiary.  Shall mean the
person or persons named under the provisions of Section 4.4 of this Plan.

 

Section 1.3
– Board of Directors.  Shall mean
the Board of Directors of the Company.

 

Section 1.4
– Change in Control Event.  shall
mean and shall be deemed to occur upon a Change in Ownership, a Change in
Effective Control, or a Change in Ownership of Substantial Assets.  For this purpose:

 

(a)           A
“Change in Ownership” shall mean that a
person or group acquires more 

 

1

 

than fifty percent (50%) of the aggregate fair market value or voting
power of the capital stock of the Company, including for this purpose capital
stock previously acquired by such person or group; provided, however, that a
Change in Ownership shall not be deemed to occur hereunder if, at the time of
any such acquisition, such person or group owns more than fifty percent (50%)
of the aggregate fair market value or voting power of the Company’s capital
stock.

 

(b)           A
“Change in Effective Control” shall mean
that (a) a person or group acquires (or has acquired during the
immediately preceding twelve (12)-month period ending on the date of the most
recent acquisition by such person or group) ownership of the capital stock of
the Company possessing thirty percent (30%) or more of the total voting power
of the Company, or (b) a majority of the members of the Board of the Company
is replaced during any twelve (12)-month period, whether by appointment or
election, without endorsement by a majority of the members of the Board prior
to the date of such appointment or election.

 

(c)           A
“Change in Ownership of Substantial Assets”
shall mean that any person or group acquires (or has acquired during the
immediately preceding twelve (12)-month period ending on the date of the most
recent acquisition) assets of the Company with an aggregate gross fair market
value of not less than forty percent (40%) of the aggregate gross fair market
value of the assets of the Company immediately prior to such acquisition.  For this purpose, gross fair market value
shall mean the fair value of the affected assets determined without regard to
any liabilities associated with such assets.

 

The Board shall determine whether a Change in Control
Event has occurred hereunder in a manner consistent with the provisions of Section 409A
and the regulations and applicable guidance promulgated thereunder.

 

Section 1.5
– Code.  Shall mean the Internal
Revenue Code of 1986, as amended, or as it may be amended from time to time.

 

Section 1.6–
Company.  Shall mean the Celera
Corporation, a Delaware corporation, or any successor to it in ownership of all
or substantially all of its assets.

 

Section 1.7–
Committee.  Shall mean the
Committee as appointed by the Board of Directors and shall be the same
Committee as constituted under Article 10 of the Celera Corporation
Deferred Compensation Plan.

 

2

 

Section 1.8
– Defined Contribution Account – Shall mean the book account which
reflects the credits under Section 4.1(a) of the Plan,  adjusted to take into account investment
income and gain or loss experienced by the Measurement Funds as selected by the
Participant or other investment as selected by the Committee.

 

Section 1.9 –
Defined Contribution Credit – Shall mean the credit to a Participant’s
Defined Contribution Account under Section 4.1(a) of the Plan.

 

Section 1.10
– Effective Date.  Shall mean July 1,
2008.

 

Section 1.11
– Employee.  Shall mean any
person, including any officer or director who is employed in the service of the
Company and who is a participant in the Savings Plan.

 

Section 1.12
– Grandfathered Benefits – Shall mean any benefit or credit under the
Prior Plan or the SERP which has been transferred to the Plan in connection
with the Company’s split-off from Applera Corporation, and which was vested
prior to January 1, 2005 and has been determined to be exempt from the
provisions of Section 409A of the Code pursuant to IRS regulations.

 

Section 1.13 – Measurement
Funds.  Shall mean a fund selected by
the Committee for the purpose of crediting additional amounts to a Participant’s
Defined Contribution Account or SERP Accrued Benefit Account.  A Participant may elect one or more of the
Measurement Funds.  The Committee may, in
its sole discretion, discontinue, substitute or add a Measurement Fund on a
prospective basis at any time and in any manner it deems appropriate.

 

Section 1.14
– Plan.  The Excess Savings Plan
of  Celera Corporation.

 

Section 1.15
– Prior Plan.  The Excess Benefit
Plan of Applera Corporation, including amounts earned and vested prior to January 1,
2005, such amounts shall be governed by the terms of the Prior Plan in effect
on October 3, 2004 and nothing in this Plan Document shall affect amounts
previously earned and vested under the Prior Plan.  It is intended that all amounts earned and
vested under the Prior Plan prior to January 1, 2005 shall be considered
grandfathered from the application of Section 409A.

 

Section 1.16
– Prior Plan Account.  Shall mean
the book account which reflects the account balance transferred from the Prior
Plan under Section 4.1(b) of the Plan,  adjusted 

 

3

 

to take into
account investment income and gain or loss experienced by the Measurement Funds
as selected by the Participant or other investment as selected by the
Committee.

 

Section 1.17
– Prior Savings Plan.  Shall mean
the Employee 401(k) Savings Plan of Applera Corporation.

 

Section 1.18 – Plan Year.  Shall mean
each twelve (12) consecutive month period from July 1 to the next
succeeding June 30.

 

Section 1.19 –
Savings Plan.  – Shall mean the
Celera Corporation 401(k) Plan.

 

Section 1.20
– Section 409A – Shall mean Section 409A of the Code and the
Treasury regulations and applicable guidance promulgated thereunder.

 

Section 1.21
– Section 409A Benefits – Shall mean any benefit or credit which
first became vested after December 31, 2004 or accrued or was credited
after December 31, 2004 including amounts accrued or credited under the
Prior Plan which has been transferred to the Plan in connection with the
Company’s split-off from Applera Corporation.

 

Section 1.22
– SERP – Shall mean the Applera Corporation Supplemental Executive
Retirement Plan.

 

Section 1.23
– SERP Accrued Benefit Account – Shall mean the book account established
to hold a Participant’s accrued benefit, if any, earned pursuant to Article 4
of the SERP, during such Participant’s employment with Applera, calculated as
of July 1, 2008 (or such other relevant date as specified by the
Committee), which has been transferred to the Plan following the Company’s
split-off from Applera Corporation, adjusted to take into account investment
income and gain or loss (but no further benefit accrual) experienced by the
Measurement Funds as selected by the Participant or other investment as
selected by the Committee.

 

Section 1.24
– Specified Employee – Shall mean one of the top fifty (50) highest
compensated employees of the Company and its controlled group determined
pursuant to the Company’s procedures and consistent with Section 409A and
the regulations promulgated thereunder.

 

Any word or phrase that
is not a defined term in this section, which is a defined word or term in the
Savings Plan,  the Prior Plan or the SERP
and is used in this Plan, shall have the same meaning as it does in the Plan in
which it appears.

 

4

 

ARTICLE 2

Purpose
of Plan

 

Section 2.1
- Purpose.  This Plan is designed
to provide retirement benefits payable out of the general assets of the Company
where contributions are limited under the Savings Plan because of the
application of Code Section 415 and Code Section 401(a)(17) and the
provisions of the Savings Plan which implement such sections.  In addition to providing retirement benefits
where contributions are limited under the Savings Plan because of the
application of Code Section 415 and Code Section 401(a)(17) for
Employees of Celera, this Plan is being established to administer accrued
benefits and account balances earned pursuant to the Prior Plan and/or the SERP
by Participants who previously were Employees of Applera Corporation.

 

5

 

ARTICLE 3

Eligibility

 

Section 3.1
- Eligibility.  Participation in
the Plan shall be limited to a select group of management or highly compensated
Employees of the Company, as determined by the Committee in its sole
discretion.  From that group, the
Committee shall select in its sole discretion, Employees to participate in the
Plan.

 

6

 

ARTICLE 4

Benefits

 

Section 4.1 – Amount of Benefits. 
The benefit payable under this Plan shall be equal to the sum of the
following amounts:

 

(a)                   an amount equal to the
Company Matching Contributions which would have been allocated on behalf of the
Employee under Section 1.10 of the Savings Plan if the limitations of Code
Sections 401(a)(17) and 415 were inapplicable; and

 

(b)                  the account balance, if
any, under the Prior Plan attributable to the account balance accumulated
pursuant to the Prior Savings Plan because such contributions were limited due
to the application of Code Section 415 and Code Section 401(a)(17)
and the provisions of the Prior Savings Plan which implemented such sections
which account balance, under the Prior Plan has been transferred to and assumed
by the Company; and

 

(c)                   an amount equal to the SERP Accrued Benefit Account,
if any.

 

In order to receive a Defined Contribution Credit, pursuant
to Section 4.1(a) of the Plan, the Employee must make a Deferral
Contribution to the Savings Plan equal to the Section 402(g) of the
Code limitation.  The amount of the
Defined Contribution Credit under this Plan shall be equal to the lesser of (i) six
percent (6%) of the Employee’s gross compensation before pre-tax reductions or (ii) the
Section 402(g) of the Code limitation offset by the Company Matching
Contribution in the Savings Plan.

 

Section 4.2 – Form of Benefit Payment.

 

(a)                   Grandfathered Benefits payable to or on behalf of an
Employee or his Beneficiary resulting from the provisions of Section 4.1
shall be payable as follows:

 

(i)      The form of a benefit payable under Section
4.1(a) shall be in a lump sum.

 

(ii)     A Grandfathered Benefit payable under
Section 4.1(b) shall be paid in accordance with the terms of the Prior Plan,
including the election forms executed by the Participant pursuant to the Prior
Plan.  Notwithstanding the foregoing, if
the lump sum present value of an Employee’s benefit at time of payment is equal
to or less than $5,000, such benefit shall be paid in a lump sum.

 

7

 

(iii)         The benefit payable pursuant to the SERP
shall be paid in accordance with the terms of the SERP, including the election
forms, if any, executed by the Participant under the SERP.

 

(b)                  Section 409A Benefits. Benefits under both Section 4.1(a) and
(b) shall be paid in a lump sum.

 

Section 4.3 - Time of Benefit Payments.

 

(a)                   Grandfathered Benefits due under this Plan shall be
paid at such time or times following the Employee’s termination, retirement or
death as the Committee in its discretion determines.

 

(b)                  Unless distributed earlier as provided in this Plan
and/or permitted pursuant to Code Section 409A, distributions of a
Participant’s Section 409A Benefits and SERP Accrued Benefit Account, if
any, shall be paid or shall commence within sixty (60) days of the earlier of a
Participant’s separation from service or death. If a Participant is classified
as a Specified Employee at the time of such Participant’s separation from
service, then, to the extent necessary to comply with Section 409A of the
Code, distributions of such Participant’s Code Section 409A Benefits and
SERP Accrued Benefit Account shall be paid (or commence) during the thirty (30)
day period following the six (6) month anniversary of such Participant’s
separation from service.

 

Section 4.4 - Beneficiary in the Event of Death.

 

(a)                   Each Employer shall have the
right, at any time, to designate his Beneficiary for purposes of the Section 4.1(a) Defined
Contribution Account to receive any benefits payable under the Plan upon his
death. The Beneficiary designated under the Plan may be the same as or
different from the Beneficiary designation under any other plan of the Company
in which the Employee participates.

 

(b)                  An Employee
shall designate his Beneficiary in the form and manner specified by the
Committee. An Employee shall have the right to change his Beneficiary by
complying with the terms of the Committee’s rules and procedures, as in
effect from time to time. If a married Participant names someone other than his
spouse as a Beneficiary, a spousal consent, in the form designated by the
Committee, must be signed by that Participant’s spouse and returned to the
Committee. Upon the acceptance by the Committee of a new Beneficiary
designation, all Beneficiary designations previously made shall be canceled. The
Committee shall be entitled to rely 

 

8

 

on the last Beneficiary designation made by the Employee and accepted
by the Committee prior to his death.

 

(c)                   No designation or change in
designation of a Beneficiary shall be effective until received and acknowledged
in writing by the Committee or its designated agent.

 

(d)                  Upon the death of an Employee, any remaining benefits
due under this Plan to an Employee other than benefits resulting from
subsection 4.1(b) shall be distributed to (i) the Beneficiary
designated by the Employee under this Plan, or if none, (ii) the
Beneficiary designated by the Employee under the Prior Plan, or if none, (iii) the
Beneficiary designated by the Employee under the Savings Plan, or if none, (iv) the
estate of the deceased Employee.

 

Section 4.5 - Benefits Unfunded. Benefits
payable under this Plan shall be paid by the Company each year out of its
general assets and shall not be funded in any manner.

 

Section 4.6 - Vesting. An Employee shall not
have a right to a benefit under this Plan unless:

 

(a)                   he has completed years of vesting service under the
Savings Plan or the Prior Savings Plan in accordance with the following
schedule:

 

	
  Years of Vesting Service

  	
   

  	
  Vested Percentage

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Less than 1

  	
   

  	
  0

  	
  %

  
	
  1 but less than
  2

  	
   

  	
  25

  	
  %

  
	
  2 but less than
  3

  	
   

  	
  50

  	
  %

  
	
  3 but less than
  4

  	
   

  	
  75

  	
  %

  
	
  4 or more

  	
   

  	
  100

  	
  %

  

 

(b)                  he has completed years of vesting service under the
SERP in accordance with Section 4.3 of the SERP.

 

For purposes of determining
vesting service under the Plan, years of vesting service shall include service
with Applera Corporation.

 

Section 4.7 – Forfeiture. A forfeiture shall
occur when an Employee terminates employment and is less than one hundred
percent (100%) vested as described in Section 4.6. The unvested interest
in the Employee’s benefit shall be forfeited at the end of the first Plan Year
during which the Employee terminated employment. Any forfeiture shall

 

9

 

be restored at the same time as the forfeiture is restored in the
Savings Plan or the SERP, if applicable.

 

Any benefits forfeited
under the Plan may be used by the Company to pay Plan expenses or to fund any
Employer Defined Contribution Credits.

 

ARTICLE 5

Investment Direction

 

Section 5.1 – Investment of Defined Contribution
Credit. A Participant shall elect, in such form and manner and at the time
as the Committee may direct or permit, the percentage of his or her Defined
Contribution Credit and SERP Accrued Benefit Account, if any, that will be
deemed invested in each Measurement Fund. An initial investment election of a
Participant shall be made at the time specified by the Committee for existing
Participants and for new Participants, the date the Participant commences or
recommences participation in the Plan. The Participant may make changes to such
investment elections at such times and in such manner as the Committee may
permit, and such elections shall apply to his or her Defined Contribution
Credit and SERP Accrued Benefit Account, if any, from and after the effective
date of such election. Any investment election timely and properly made
pursuant to this Section 5.1 with respect to a Participant’s Defined
Contribution Credit and/or SERP Accrued Benefit Account, if any, shall remain
in effect until changed by the Participant. The Committee shall have complete
discretion to adopt and revise procedures to be followed in making investment
elections.

 

Section 5.2 – Investment of Existing Defined
Contribution Account. A Participant, in connection with his or initial
Defined Contribution Credit election or SERP Accrued Benefit Account election,
if any, in accordance with Section 5.1 above, shall elect, in such form,
at the time, and in the manner as the Committee may direct or permit, the
percentage of his or her exiting Defined Contribution Account and/or SERP
Accrued Benefit Account, if any, that will be deemed invested in each
Measurement Fund. The Participant may make changes to such investment elections
at such times and in such manner as the Committee may permit, and such
elections shall apply to his or her Defined Contribution Account and/or SERP
Accrued Benefit Account, if any, from after the effective date of such election.
Any investment election timely and properly made pursuant to this Section 5.2
with respect to a Participant’s Defined Contribution Account or SERP Accrued
Benefit Account, if any, shall remain in effect until changed by the
Participant. The Committee shall have complete discretion to adopt and revise
procedures to be followed in making investment elections.

 

10

 

Section 5.3 – Proportionate Allocation. In
making any election described in Sections 5.1 and 5.2 above, the Participant
shall specify, in any whole percentage, the percentage of his or her Defined
Contribution Account, and/or SERP Accrued Benefit Account, if any, to be
allocated to a Measurement Fund (as if the Participant was making an investment
in that Measurement Fund with that portion of his or her Defined Contribution
Account and/or SERP Accrued Benefit Account, if any, as the case may be). Such
election shall be made in such form and manner as the Committee shall direct or
permit.

 

Section 5.4 – Crediting or Debiting Method. The
performance of each Measurement Fund (either positive or negative) will be
determined by the Committee, in its reasonable discretion, based on the
performance of the Measurement Funds themselves. A Participant’s Defined
Contribution Account and/or SERP Accrued Benefit Account, if any, shall be
credited or debited on a daily basis based on the performance of each
Measurement Fund selected by the Participant, as determined by the Committee in
its sole discretion, as though (a) a Participant’s Defined Contribution
Account was invested in the Measurement Fund(s) selected by the
Participant, in the percentages applicable as of the close of business on such
date and at the closing price on such date; (b) the portion of the SERP
Accrued Benefit Account, if any, that was credited was invested in the
Measurement Fund(s) selected by the Participant, in the percentages
applicable as of the close of business on the business day on which such
amounts were credited to the SERP Accrued Benefit Account at the closing price
on such date; and (c) any distribution made to a Participant that
decreases such Participant’s Defined Contribution Account, and SERP Accrued
Benefit Account ceased being invested in the Measurement Fund(s), in the
percentages applicable, as of the business day prior to the distribution, at
the closing price on such date.

 

Section 5.5 – No Actual Investment. Notwithstanding
any other provision of the Plan that may be interpreted to the contrary, the
Measurement Funds are to be used for measurement purposes only, and a
Participant’s election of any such Measurement Fund, the allocation of his or
her Defined Contribution Account and/or SERP Accrued Benefit Account thereto,
the calculation of additional amounts and the crediting or debiting of such
amounts to a Participant’s Defined Contribution Account or SERP Accrued Benefit
Account shall not be considered or construed in any manner as an actual
investment of, or as a requirement or direction to actually invest, his or her
Defined Contribution Account or SERP Accrued Benefit Account, if any, in any
such Measurement Fund. In the event that the Company or the trustee of the
Trust, in its own discretion, decides to invest funds in any or all of the
Measurement Funds, no Participant shall have any rights in or to such
investments themselves. Without limiting the foregoing, a Participant’s Defined

 

11

 

Contribution
Account and SERP Accrued Benefit Account shall at all times be a bookkeeping
entry only and shall not represent any investment made on his or her behalf of
the Company or the Trust. The Participant shall at all times remain an
unsecured creditor of the Company.

 

12

 

ARTICLE 6

Administration

 

Section 6.1 - Committee
Duties. The Plan shall be administered by a
Committee which shall be appointed by the Board of Directors and shall be the
same Committee as constituted under Article 10 of The Celera Corporation
Deferred Compensation Plan. Members of the Committee may be participants under
the Plan. The Committee shall also have the absolute discretion and authority
to (a) make, amend, interpret, and enforce all appropriate rules and
regulations for the administration of the Plan and (b) decide or resolve
any and all questions, including interpretations of the Plan, as may arise in
connection with the Plan. Any individual serving on the Committee who is a
participant shall not vote or act on any matter relating solely to himself. When
making a determination or calculation, the Committee shall be entitled to rely
on information furnished by an Employee or the Company.

 

Section 6.2  - Agents. In the
administration of the Plan, the Committee may, from time to time, employ agents
and delegate to them such administrative duties as it sees fit (including
acting through a duly appointed representative) and may from time to time
consult with counsel who may be counsel to the Company.

 

Section 6.3 - Binding
Effect of Decisions. The decision
or action of the Committee with respect to any question arising out of or in
connection with the administration, interpretation and application of the Plan
and the rules and regulations promulgated hereunder shall be final and
conclusive and binding upon all persons having any interest in the Plan.

 

Section 6.4 - Indemnity
of Committee. The Company shall indemnify and
hold harmless the members of the Committee and any Employee to whom the duties
of the Committee may be delegated against any and all claims, losses, damages,
expenses, or liabilities arising from any action or failure to act with respect
to the Plan, except in the case of willful misconduct by the Committee or any
of its members or any such Employee.

 

Section 6.5 — Claims Procedure

 

(a)                   Presentation of Claim. Any application for benefits, inquiries
about the Plan or inquiries about present or future rights under the Plan must
be submitted to the Committee in writing by the Participant or Beneficiary of a
deceased 

 

13

 

Participant (such Participant or Beneficiary being
referred to below as a “Claimant”).

 

(b)                  Notification of Decision. The Committee shall consider a Claimant’s
claim within ninety (90) days after the Committee receives the claim, unless
special circumstances require an extension of time, in which case the Committee
has up to an additional ninety (90) days for processing the claim. If an
extension of time for processing is required, written or electronic notice of
the extension shall be furnished to the applicant before the end of the initial
ninety (90)-day period describing the special circumstances necessitating the
additional time and the date by which the Committee is to render its decision. The
Committee shall notify the Claimant in writing:

 

(i)    that the Claimant’s
requested determination has been made, and that the claim has been allowed in
full; or

 

(ii)   that the
Committee has reached a conclusion contrary, in whole or in part, to the
Claimant’s requested determination, and such notice must set forth in a manner
calculated to be understood by the Claimant:

 

(1)   the specific
reason(s) for the denial of the claim, or any part of it;

 

(2)   specific reference(s) to
pertinent provisions of the Plan upon which such denial was based;

 

(3)   a description of
any additional material or information necessary for the Claimant to perfect
the claim, and an explanation of why such material or information is necessary;
and

 

(4)   an explanation of
the claim review procedure set forth in Section 6.5(c) below.

 

(c)                   Review of a Denied Claim. Within 60 days after receiving a notice
from the Committee that a claim has been denied, in whole or in part, a
Claimant (or the Claimant’s duly authorized representative) may file with the
Committee a written request for a review of the denial of the claim, which
request shall set forth all of the grounds on which such request is based, all
facts in support of the request and any other matters that the Claimant
believes are 

 

14

 

pertinent.
Thereafter, the Committee shall give the Claimant (or the Claimant’s duly
authorized representative), a reasonable opportunity for a full and fair review
of the claim and adverse benefit determination including:

 

(i)    the opportunity
to receive, upon request and free of charge, copies of all documents, records
and other information relevant to the Claimant’s claim for benefits;

 

(ii)   the opportunity
to submit written comments, other documents or information; and

 

(iii)  a review that
takes into account all comments, documents, records, and other information
submitted by the Claimant relating to the claim, without regard to whether such
information was submitted or considered in the initial benefit determination.

 

(d)                  Decision on Review. The Committee shall render its decision on review
promptly, and not later than 60 days after the filing of a written request for
review of the denial, unless a hearing is held or other special circumstances
require additional time, in which case the Committee’s decision must be
rendered within 120 days after such date. Such decision must be written in a
manner calculated to be understood by the Claimant, and it must contain:

 

(i)    specific reasons
for the decision;

 

(ii)   specific
reference(s) to the pertinent Plan provisions upon which the decision was
based;

 

(iii)  a description of
any additional material or information necessary for the claimant to perfect
the claim and an explanation of why such material or information is necessary,
and

 

(iv)  a description of
the Plan’s review procedures and the time limits applicable to such procedures,
including a statement of the claimant’s right to bring a civil action under Section 502(a) of
ERISA following an adverse benefit determination on review.

 

(e)                   Legal Action. A Claimant’s compliance with the foregoing
provisions of this Section 6.5 is a mandatory prerequisite to a Claimant’s
right to commence any legal action with respect to any claim under the Plan.

 

15

 

ARTICLE 7

Amendment and Termination

 

Section 7.1 - Amendment and Termination. While
the Company intends to maintain this Plan in conjunction with the Pension Plan
and the Savings Plan for as long as necessary, the Company acting through its
Board, reserves the right to amend and/or terminate it at any time for whatever
reasons it may deem appropriate.

 

Section 7.2 - Committee and Amendment of Plan.
Notwithstanding Section 7.1 above, the Committee shall be authorized to
amend the Plan without the approval of the Board. However, the Committee shall
not have the authority to amend the Plan if such amendment shall have a
financial impact to the Company of one million dollars or more.

 

16

 

 

ARTICLE 8

Trust

 

Section 8.1 – Establishment of the Trust
Notwithstanding the Unfunded Status of the Plan. The Company may establish
a grantor Trust, and may transfer over to the Trust such assets as the Company
determines, in its sole discretion, are necessary to provide, on a present
value basis, for its respective future liabilities created with respect to the
Defined Contribution Account, and the SERP Accrued Benefit.

 

Section 8.2 – Interrelationship of the Plan and
the Trust. The provisions of the Plan and the Plan Agreement shall govern
the rights of a Participant to receive distributions pursuant to the Plan. The
provisions of the Trust shall govern the rights of the Company, Participants,
and the creditors of the Company to the assets transferred to the Trust.

 

Section 8.3 – Distributions From the Trust. The
Company’s obligations under the Plan may be satisfied with Trust assets
distributed pursuant to the terms of the Trust, and any such distribution shall
reduce the Company’s obligations under the Plan.

 

17

 

ARTICLE 9

Miscellaneous

 

Section 9.1 – Status of Plan. The Plan is
intended to be a plan that is not qualified within the meaning of Code Section 401(a) and
that “is unfunded and is maintained by an employer primarily for the purpose of
providing deferred compensation for a select group of management or highly
compensated employees” within the meaning of ERISA Sections 201(2), 301(a)(3),
and 401(a)(1). The Plan shall be administered and interpreted to the extent
possible in a manner consistent with that intent.

 

Section 9.2 – Unsecured General Creditor. Participants
and their Beneficiaries, heirs, successors, and assigns shall have no legal or
equitable rights, interests, or claims in any property or assets of the Company.
For purposes of the payment of benefits under the Plan, any and all of the
Company’s assets shall be, and remain, the general, unpledged unrestricted
assets of the Company. The Company’s obligation under the Plan shall be merely
that of an unfunded and unsecured promise to pay money in the future.

 

Section 9.3 – Company’s Liability. This Plan
supersedes and shall be in lieu of all prior plans, arrangements, or
understandings regarding the benefits provided by the Plan, whether written or
oral.

 

Section 9.4 – Nonassignability. Neither a
Participant nor any other person shall have any right to commute, sell, assign,
transfer, pledge, anticipate, mortgage, or otherwise encumber, transfer,
hypothecate, alienate, or convey in advance of actual receipt, the amounts, if
any, payable hereunder, or any part thereof, which are, and all rights to which
are expressly declared to be, unassignable and non-transferable. No part of the
amounts payable shall, prior to actual payment, be subject to seizure,
attachment, garnishment, or sequestration for the payment of any debts,
judgments, alimony, or separate maintenance owed by a Participant or any other
person, be transferable by operation of law in the event of a Participant’s or
any other person’s bankruptcy or insolvency, or be transferable to a spouse as
a result of a property settlement or otherwise.

 

Section 9.5 – Not a Contract of Employment. The terms and
conditions of the Plan shall not be deemed to constitute a contract of
employment between the Company and a Participant. Such employment is hereby
acknowledged to be an “at will” employment relationship that can be terminated
at any time for any reason, or no reason, with or without cause, and with or
without notice, except as otherwise expressly provided in a written employment
agreement. Nothing in the Plan shall be deemed to give a 

 

18

 

Participant the right to be
retained in the service of the Company as an Employee or to interfere with the
right of any Employer to discipline or discharge the Participant at any time.

 

Section 9.6 – Furnishing Information. A Participant
or his or her Beneficiary shall cooperate with the Committee by furnishing any
and all information requested by the Committee and take such other actions as
may be requested in order to facilitate the administration of the Plan and the
payments of benefits hereunder, including but not limited to taking such
physical examinations as the Committee may deem necessary.

 

Section 9.7 – Terms. Whenever any
words are used herein in the masculine, they shall be construed as though they
were in the feminine in all cases where they would so apply; and whenever any
words are used herein in the singular or in the plural, they shall be construed
as though they were used in the plural or the singular, as the case may be, in
all cases where they would so apply.

 

Section 9.8 – Captions. The captions
of the articles, sections, and paragraphs of the Plan are for convenience only
and shall not control or affect the meaning or construction of any of its
provisions.

 

Section 9.9 – Governing Law. The
provisions of the Plan shall be construed and interpreted according to the
internal laws of the State of Connecticut without regard to its conflicts of
laws principles.

 

Section 9.10 – Notice. Any notice or
filing required or permitted to be given to the Committee under the Plan shall
be sufficient if in writing and hand-delivered, or sent by registered or
certified mail, to the address below:

 

Celera Corporation

1401 Harbor Bay Parkway 

Alameda, California 94502

Attn:  Vice President,  Site & Human Resources Services

 

Such notice shall be deemed
given as of the date of delivery or, if delivery is made by mail, as of the
date shown on the postmark on the receipt for registration or certification.

 

Any notice or filing
required or permitted to be given to a Participant under the 

 

19

 

Plan shall be sufficient if
in writing and hand-delivered, or sent by mail, to the last known address of
the Participant.

 

Section 9.11 – Successors. The
provisions of the Plan shall bind and inure to the benefit of the Participant’s
Company and its successors and assigns and the Participant and the Participant’s
designated Beneficiaries.

 

Section 9.12 – Spouse’s Interest. The interest
in the benefits hereunder of a spouse of a Participant who has predeceased the
Participant shall automatically pass to the Participant and, except as
otherwise provided in Section 9.15, shall not be transferable by such
spouse in any manner, including but not limited to such spouse’s will, nor
shall such interest pass under the laws of intestate succession.

 

Section 9.13 – Validity. In case any
provision of the Plan shall be determined to be illegal or invalid for any
reason, said illegality or invalidity shall not affect the remaining parts
hereof, but the Plan shall be construed and enforced as if such illegal or
invalid provision had never been inserted herein.

 

Section 9.14 – Incompetency. If the Committee
determines in its discretion that a benefit under the Plan is to be paid to a
minor, a person declared incompetent, or to a person incapable of handling the
disposition of that person’s property, the Committee may direct payment of such
benefit to the guardian, legal representative, or person having the care and
custody of such minor, incompetent, or incapable person. The Committee may
require proof of minority, incompetence, incapacity, or guardianship, as it may
deem appropriate, prior to distribution of the benefit. Any payment of a
benefit shall be a payment for the account of the Participant and the
Participant’s Beneficiary, as the case may be, and shall be a complete
discharge of any liability under the Plan for such payment amount.

 

Section 9.15 – Legal Fees to Enforce Rights
After Change in Control Event. The Company is aware that
upon the occurrence of a Change in Control Event, the Board or (which might
then be composed of new members) or a shareholder of the Company, or of any
successor corporation might then cause or attempt to cause the Company or such
successor to refuse to comply with its obligations under the Plan and might
cause or attempt to cause the Company to institute, or may institute,
litigation seeking to deny Participants the benefits intended under the Plan. In
these circumstances, the purpose of the Plan could be frustrated. Accordingly,
if, following a Change in Control Event, it should appear to any participant
that the Company, or any successor corporation has 

 

20

 

failed to comply with any of
its obligations under the Plan or any agreement thereunder or, if the Company,
or any other person takes any action to declare the Plan void or unenforceable
or institutes any litigation or other legal action designed to deny, diminish,
or to recover from any participant the benefits intended to be provided, then
the Company irrevocably authorize such participant to retain counsel of his or
her choice at the expense of the Company to represent such participant in
connection with the initiation or defense of any litigation or other legal
action, whether by or against the Company or any director, officer,
shareholder, or other person affiliated with the Company or any successor
thereto in any jurisdiction.

 

Section 9.16 – Tax
Withholding. The Company or
the trustee of the Trust shall withhold, in such manner as determined by the
Company or the trustee (as the case may be) in its sole discretion, from any
payments made to a Participant under the Plan such amount or amounts as may be
required to comply with all federal, state, and local income, employment, and
other withholding obligations.

 

Section 9.17 – Effect
on Other Employee Benefit Plans. Any benefit
paid or payable under this Plan shall not be included in a Participant’s
compensation for purposes of computing benefits under any employee benefit plan
maintained or contributed to by an Employer except as may otherwise be required
under the terms of such employee benefit plan.

 

Section 9.18 – Compliance
with Section 409A. The Plan and the benefits provided hereunder are
intended to comply with Section 409A and the regulations and guidance
issued thereunder to the extent applicable thereto. Notwithstanding any
provision of the Plan to the contrary, the Plan shall be interpreted and
construed consistent with this intent. Although the Company intends to
administer the Plan so that it will comply with, the requirements of Section 409A,
the Company, do not represent or warrant that the Plan will comply with Section 409A
or any other provision of federal, state, local, or non-United States law. Neither
the Company, its subsidiaries, nor their respective directors, officers,
employees or advisers shall be liable to any Participant (or any other individual
claiming a benefit through the Participant) for any tax, interest, or penalties
the Participant might owe as a result of participation in the Plan.

 

The information contained herein has been provided
by Celera Corporation and is the sole responsibility of Celera Corporation.

 

21Exhibit 10.2

 

Execution Version

 

FORBEARANCE
AGREEMENT

 

THIS
FORBEARANCE AGREEMENT (as the same may from time to time be amended, restated
or otherwise modified, this “Agreement”) is made as of February 13,
2008 and entered into by and among Prospect Medical Holdings, Inc. (“Holdings”)
and Prospect Medical Group, Inc. (“Prospect” and, collectively with
Holdings, the “Borrowers” and each, individually, a “Borrower”),
Bank of America, N.A., as Administrative Agent (in such capacity, the “First
Lien Administrative Agent”), and the lenders party hereto (collectively,
the “First Lien Lenders”).

 

RECITALS

 

WHEREAS, the
Borrowers, the First Lien Lenders and the First Lien Administrative Agent have
entered into that certain First Lien Credit Agreement dated as of August 8,
2007 (as amended, restated, supplemented or otherwise modified, the “First
Lien Credit Agreement”), pursuant to which the First Lien Lenders have
agreed to make the Loans (such term, together with each other capitalized term
used in this Agreement but not defined in this Agreement, shall be defined in
accordance with the First Lien Credit Agreement) and other extensions of
credit, all upon the terms and conditions set forth in the First Lien Credit
Agreement;

 

WHEREAS, as of
the date hereof, certain Defaults and Events of Default exist under the First
Lien Credit Agreement and, as a result of such Defaults and Events of Default,
the First Lien Lenders and the First Lien Administrative Agent have the right,
among other things, to declare the commitment of each First Lien Lender to make
Loans to be terminated and to exercise any and all other remedies available to
the First Lien Lenders under the First Lien Credit Agreement;

 

WHEREAS, the
Borrowers have requested that the First Lien Lenders and the First Lien
Administrative Agent forbear from exercising such rights for a limited period
of time; and

 

WHEREAS, the
First Lien Lenders and the First Lien Administrative Agent are willing to
forbear from exercising such rights for a limited period of time on the terms
and conditions set forth in this Agreement;

 

NOW,
THEREFORE, in consideration of the foregoing, the parties agree as follows:

 

ARTICLE
I.  FORBEARANCE

 

Section 1.1                                      Outstanding
Indebtedness.  Each Borrower
acknowledges and confirms (a) that Exhibit A hereto sets
forth, as of the date hereof, the aggregate principal amount of all outstanding
Loans and the issued and outstanding Letters of Credit, and (b) that such
amounts are not subject to any defense, counterclaim, recoupment or offset of
any kind.

 

Section 1.2                                      Existing
Defaults.  Each Borrower acknowledges
that the Borrowers have failed to comply with the provisions of the First Lien
Credit Agreement as set forth under the heading “January 28th
Events of Defaults” on Exhibit B hereto (collectively, the “January 28
Events of Default”).  Each Borrower
further acknowledges (and has so advised the First Lien Administrative Agent)
that it anticipates that it may fail during the Forbearance Period (as defined
herein) to comply with the provisions of the First Lien Credit Agreement as set
forth 

 

 

under the heading “Anticipated Events of Default” on Exhibit B
hereto (collectively, the “Anticipated Events of Default” and together
with the January 28 Events of Default, the “Existing Events of Default”).

 

Section 1.3             Continuing
Defaults.  With respect to each of
the Existing Events of Default, each Borrower acknowledges that (a) such
Existing Event of Default is continuing and has not been waived by virtue of
any previous actions (or failure to act) by the First Lien Administrative Agent
or the First Lien Lenders through any course of conduct or course of dealing or
otherwise, (b) as a result of the existence of such Existing Event of
Default, the First Lien Lenders and the First Lien Administrative Agent, pursuant
to Section 8.02 of the First Lien Credit Agreement and the other Loan
Documents, have the right to, among other things, (i) terminate the
obligations and any commitment of each First Lien Lender to make any further
Loans and/or L/C Credit Extensions, (ii) accelerate the maturity of all of
the Loans and all of the other Obligations, and (iii) decline to make any
further Loans and/or L/C Credit Extensions.

 

Section 1.4             Forbearance
and Forbearance Period.

 

(a)           The
First Lien Lenders and the First Lien Administrative Agent, by executing this
Agreement and upon the satisfaction of the conditions set forth in Article II
hereof, hereby agree to forbear from exercising their rights and remedies that
exist by virtue of the Existing Events of Default for the period from January 28,
2008 through and including March 31, 2008 (the “Forbearance Period”)
subject to the continuing satisfaction during the Forbearance Period of each of
the following conditions:

 

(i)            after
giving effect to the terms of this Agreement, other than the Existing Events of
Default, no other Default or Event of Default shall exist under the First Lien
Credit Agreement or any Loan Document;

 

(ii)           during
the Forbearance Period, other than the Existing Events of Default, no other
Default or Event of Default shall occur or arise under the First Lien Credit
Agreement or any Loan Document and no default or event of default shall occur
or arise under this Agreement;

 

(iii)          neither
the Second Lien Administrative Agent nor the Second Lien Lenders shall exercise
or seek to exercise any of their respective rights or remedies under the Second
Lien Loan Documents or take or seek to take any action that violates or is
inconsistent with the terms of the Intercreditor Agreement or that otherwise
impairs or adversely affects any rights or remedies of the First Lien
Administrative Agent or the First Lien Lenders under the Loan Documents;

 

(iv)          the
second lien forbearance agreement as described in Section 3.1(c) hereof
shall not have expired by its terms and the “Forbearance Period” set forth
therein shall not have terminated; and

 

(v)           the
Borrowers shall be in compliance with their obligations under the Fee Letter
(as defined in 

Section 3.1(d) hereof).

 

2

 

(b)           Unless
the Forbearance Period has been previously terminated in accordance with the
terms hereof, so long as the First Lien Lenders and the First Lien
Administrative Agent shall have received the Required Reporting Package (as
defined below) as soon as available and in any event no later than March 31,
2008, the Forbearance Period shall be automatically extended until April 10,
2008 (such date, the “Extended Forbearance Period Termination Date”).

 

“Required
Reporting Package” shall mean the following, in each case in form and
substance satisfactory to the First Lien Lenders and the First Lien
Administrative Agent:

 

(i)            a
final draft of Holdings’ and its Subsidiaries audited financial statements for
the fiscal year ended September 30, 2007 all prepared in accordance with Section 6.01(a) of
the First Lien Credit Agreement, which such draft audited financial statements
will only require the delivery of a mutually acceptable waiver and amendment
from the First Lien Lenders and the Second Lien Lenders with respect to the
Existing Events of Default in order for the audit to be finalized and
accompanied by an unqualified opinion of Holdings’ auditor;

 

(ii)           unaudited
copies of Holdings’ and its Subsidiaries quarterly financial statements for the
fiscal quarter ended December 31, 2007, all prepared in accordance with Section 6.01(b) of
the First Lien Credit Agreement;

 

(iii)          updated
copies of all financial information previously provided under Sections 6.01(b) and
6.01(c) of the First Lien Credit Agreement (in each case, together with
the related Compliance Certificate referred to in Section 6.02(b) of
the First Lien Credit Agreement), in each case revised to give effect to the
restatement of the financial statements of Holdings and its Subsidiaries
relating to the 2007 fiscal year;

 

(iv)          updated
copies of the historical monthly financial statements for Holdings and its
Subsidiaries for the period of October 2006 through the closing date of
the First Lien Credit Agreement;

 

(v)           Compliance
Certificates to be delivered in connection with each set of financial
statements referenced in Section 1.4(b)(i) and Section 1.4(b)(ii) above;

 

(vi)          revised
financial projections for fiscal year 2008 and fiscal year 2009, including (i) a
financial (cash flow) budget (i.e., a schedule of anticipated revenue and
expenditures) prepared on a monthly basis for fiscal year 2008 prepared in
accordance with Section 6.01(d) of the First Lien Credit Agreement, (ii) a
financial (cash flow) budget (i.e., a schedule of anticipated revenue and
expenditures) prepared on a quarterly basis for fiscal year 2009 prepared in
accordance with Section 6.01(d) of the First Lien Credit Agreement, (iii) a
projected EBITDA run rate for fiscal year 2008 and fiscal year 2009 and (iv) a
written assessment by management of the run-rate revenue and run-rate EBITDA by
business line, which assessment bridges to the financial information in respect

 

3

 

of the period ended March 31,
2007, which such financial information was provided to the First Lien Lenders
prior to closing of, and upon which the First Lien Lenders relied in entering
into the First Lien Credit Agreement; and

 

(vii)                           a
monthly report that shows projected versus actual comparison of the items
listed on the cash flow budget for 2008.

 

(c)                                  Each
Borrower acknowledges and agrees that, upon the failure of any Borrower to
satisfy any of the foregoing conditions at any time during the Forbearance
Period, the Forbearance Period shall automatically terminate, and each such
failure shall immediately constitute an Event of Default under the First Lien
Credit Agreement.  The First Lien
Administrative Agent agrees to provide the Borrowers promptly with notice of
the termination of the Forbearance Period; provided, however,
that the failure to give such notice shall not affect the automatic termination
of the Forbearance Period or its immediate constitution of an Event of Default,
and the Borrowers hereby waive any such notice. 
Upon termination of the Forbearance Period, the First Lien
Administrative Agent and the First Lien Lenders shall be permitted to exercise
any and all rights and remedies that exist with respect to the Existing Events
of Default.

 

ARTICLE
II.  OTHER AGREEMENTS

 

Section 2.1                                      Revolving
Loans.  During the Forbearance Period,
the Borrower shall be permitted to request Revolving Credit Loans; provided
that, (a) the Borrowers shall not request that any Revolving Credit Loans
be made if such request, if funded, would cause the Total Revolving Credit
Outstandings to exceed $6,000,000.00; (b) each Revolving Credit Borrowing (i) shall
bear interest at the Base Rate, (ii) shall be repaid in full (with accrued
interest) no later than 1:00 P.M. (Pacific) on the sixth (6th)
day following each such Revolving Credit Borrowing; (c) no Revolving
Credit Borrowing may be requested on or after March 25th, 2008;
(or, if the Forbearance Period is extended to April 10, 2008 in accordance
with Section 1.4(b) above, April 4, 2008); and (d) the
conditions set forth in Section 4.02 of the First Lien Credit Agreement
shall be met (provided that the Existing Events of Default shall not, in and of
themselves, constitute a failure to satisfy Section 4.02(b)).

 

Section 2.2                                      Pricing.  (a)  During the Forbearance Period, and
until such time as the First Lien Administrative Agent and the First Lien
Lenders shall have received a Compliance Certificate in accordance with Section 6.02(b) of
the First Lien Credit Agreement, each of the Applicable Rate and the Applicable
Fee Rate shall be Pricing Level 4; and (b) during the Forbearance Period,
all outstanding Obligations under the First Lien Credit Agreement shall bear
interest at the Default Rate.

 

Section 2.3                                      Consultant
Matters.  Further to their
obligations under Sections 6.10 and 10.04 of the First Lien Credit Agreement,
the Borrowers and their Subsidiaries (a) acknowledge and consent to the
retention of a third-party consultant or consultants hired on behalf of the
First Lien Lenders (the “Consultant”), (b) acknowledge and agree
that they will be responsible for the payment of all fees and expenses of such
Consultant, (c) agree to fully cooperate with such Consultant and allow
such Consultant to: visit and inspect any of the properties of the Borrowers
and their Subsidiaries; examine corporate, financial and operating records of
the Borrowers and 

 

4

 

their
Subsidiaries; make copies thereof or abstracts therefrom; and discuss the
affairs, finances and accounts of the Borrowers and their Subsidiaries with
their respective directors, officers, and independent public accountants, and (d) shall,
beginning on February 13, 2008 and on a bi-weekly basis thereafter,
provide to the Consultant (to be forwarded to the First Lien Administrative
Agent and the First Lien Lenders) on a rolling basis a thirteen-week financial
(cash-flow) budget (i.e., schedule of anticipated revenue and expenditures) and
shall, when they update such budget, also provide to the Consultant (to be
forwarded to the First Lien Administrative Agent and the First Lien Lenders) a
schedule that shows a projected versus actual comparison of the items set forth
in the budget over the course of (i) the preceding two weeks; and (ii) the
period beginning on February 18, 2008.

 

Section 2.4                                      Modification
of Maturity Date.  In the event that
the Borrowers, the First Lien Lenders and the Second Lien Lenders do not reach
a mutually acceptable waiver and amendment with respect to the Existing Events
of Default by the expiration or termination of the Forbearance Period (as such
may be extended in accordance with the terms and conditions hereof to the
Extended Forbearance Period Termination Date or as such Extended Forbearance
Period Termination Date may be extended by the Required Lenders under each of
the First Lien Credit Agreement and the Second Lien Credit Agreement), the
Maturity Date under the First Lien Credit Agreement shall be June 30,
2008.

 

ARTICLE
III.  CONDITIONS TO EFFECTIVENESS

 

Section 3.1                                      Conditions
Precedent.  This Agreement shall
become effective as of the date first written above upon the satisfaction of
each of the following conditions:

 

(a)                                  the
First Lien Administrative Agent shall have received duly executed counterparts
of this Agreement from each of the Borrowers, the Guarantors and the Required
Lenders;

 

(b)                                 the
Borrowers shall have paid all professional fees and expenses of the First Lien
Administrative Agent and the First Lien Lenders in connection with this
Agreement, the Loan Documents and the transactions contemplated hereby
(including all fees and expenses of Winston & Strawn LLP in its
capacity as counsel to the First Lien Administrative Agent and the Arranger)
pursuant to wire transfer instructions to be provided by the First Lien
Administrative Agent;

 

(c)                                  the
Second Lien Administrative Agent and the Second Lien Lenders shall have entered
into a forbearance agreement with the Borrowers on terms satisfactory to the
First Lien Administrative Agent which terms and conditions shall include an
acknowledgement, for the express benefit of the First Lien Administrative Agent
and the First Lien Lenders, that the effectiveness of either forbearance
agreement shall not constitute, or be deemed to constitute, the commencement of
a Standstill Period (as defined in the Intercreditor Agreement);

 

(d)                                 that
certain fee letter among the Borrowers, Banc of America Securities, LLC and
Bank of America, N.A. dated January 28, 2008 (the “Fee Letter”)
shall have 

 

5

 

been executed and delivered by
the Borrowers and the Borrowers shall be in compliance with their obligations
thereunder as of the date thereof; and

 

(e)                                  the
Borrowers shall have paid a forbearance fee (the “Forbearance Fee”) in
an amount equal to 50 basis points times the sum of (i) each
consenting First Lien Lender’s Revolving Credit Commitment plus (ii) the
aggregate outstanding principal amount of each consenting First Lien Lender’s
Term Loans to the Borrowers (in each case, (A) including Bank of America,
N.A., in its capacity as a First Lien Lender, and (B) as of the effective
date of this Agreement).

 

(f)                                    In
furtherance of the Borrowers’ obligations under Section 10.04(a) of
the First Lien Credit Agreement, the Borrowers shall have paid, to Winston &
Strawn LLP, counsel to the First Lien Administrative Agent, $75,000.00 in
immediately available funds (pursuant to wire transfer instructions to be
provided by the First Lien Administrative Agent) as payment for future services
to be provided by Winston & Strawn LLP to the First Lien
Administrative Agent in connection with the Loans, this Agreement, the First
Lien Credit Agreement and the other Loan Documents.

 

(g)                                 In
furtherance of the Borrowers’ obligations under Section 10.04(a) of
the First Lien Credit Agreement, the Borrowers shall have paid, to the Consultant
$40,000 in immediately available funds (pursuant to wire transfer instructions
to be provided by the First Lien Administrative Agent) as payment for future
services to be provided by the Consultant to the First Lien Administrative
Agent in connection with the Loans, this Agreement, the First Lien Credit
Agreement and the other Loan Documents.

 

ARTICLE
IV.  MISCELLANEOUS

 

Section 4.1                                      Representations
and Warranties.  Each Loan Party
hereby represents and warrants to the First Lien Administrative Agent and the
First Lien Lenders that (a) each Loan Party has the legal power and
authority to execute and deliver this Agreement; (b) the officers of each
Loan Party executing this Agreement have been duly authorized to execute and
deliver the same and bind each Loan Party with respect to the provisions
hereof; (c) the execution and delivery hereof by each Loan Party and the
performance and observance by each Loan Party of the provisions hereof do not
violate or conflict with any organizational document of any Loan Party or any
law applicable to any Loan Party or result in a breach of any provision of or
constitute a default under any other agreement, instrument or document binding
upon or enforceable against any Loan Party; (d) except with respect to the
Existing Events of Default, no Default or Event of Default exists under the
First Lien Credit Agreement, nor will any occur immediately after the execution
and delivery of this Agreement or by the performance or observance of any
provision hereof; (e) no Loan Party is aware of any claim or offset
against, or defense or counterclaim to, any Loan Party’s obligations or
liabilities under the First Lien Credit Agreement or any other Loan Document; (f) this
Agreement and each document executed by each Loan Party in connection herewith
(including, without limitation, the Fee Letter) constitute valid and binding
obligations of the applicable Loan Party in every respect, enforceable in
accordance with their terms; and (g) no Loan Party has received a notice
of default of any kind from any material account debtor or any counterparty to
a Material Contract and no material 

 

6

 

account debtor or counterparty
to a Material Contract has asserted any right of set-off, deduction or counterclaim
with respect to any account or such Material Contract, respectively.

 

Section 4.2                                      Release.  Each Loan Party hereby waives and releases
the First Lien Administrative Agent and the First Lien Lenders and their
respective directors, officers, employees, agents, attorneys, affiliates and
subsidiaries (each a “Releasee”) from any and all claims, offsets,
defenses and counterclaims, known and unknown, that any Loan Party may have as
of the date of this Agreement based upon, relating to, or arising out of the
Obligations and related transactions in any way.  Each Loan Party intends the foregoing release
to cover, encompass, release and extinguish, among other things, all claims and
matters that might otherwise be reserved by California Civil Code Section 1542,
which provides as follows:

 

“A general release does not extend to claims
which the creditor does not know or suspect to exist in his or her favor at the
time of executing the release, which if known by him or her must have
materially affected his or her settlement with the debtor.”

 

Notwithstanding the foregoing,
this Section 4.2 shall not constitute a release of the obligations
of the First Lien Administrative Agent or any First Lien Lender under the Loan
Documents, such waiver and release being with full knowledge and understanding
of the circumstances and effect thereof and after having consulted legal
counsel with respect thereto.

 

Section 4.3                                      Covenant Not
to Sue.  Each Loan Party, on behalf
of itself and its successors, assigns, and other legal representatives, hereby
absolutely, unconditionally and irrevocably, covenants and agrees with and in
favor of each Releasee that it will not sue (at law, in equity, in any
regulatory proceeding or otherwise) any Releasee on the basis of any claim
released, remised and discharged by such Loan Party pursuant to Section 4.2
above.  If any Loan Party or any of its
successors, assigns or other legal representations violates the foregoing
covenant, such Loan Party, for itself and its successors, assigns and legal representatives,
agrees to pay, in addition to such other damages as any Releasee may sustain as
a result of such violation, all attorneys’ fees and costs incurred by any
Releasee as a result of such violation.

 

Section 4.4                                      Loan Documents
Unaffected.  Except as otherwise
specifically provided herein, all provisions of the First Lien Credit Agreement
(including without limitation, Section 10.07 thereof) and the other Loan
Documents (including, without limitation, the Intercreditor Agreement) shall
remain in full force and effect and be unaffected hereby.  The parties hereto acknowledge and agree that
this Agreement constitutes a “Loan Document” under the terms of the First Lien
Credit Agreement.

 

Section 4.5                                      Guarantor
Acknowledgement.  Each Guarantor, by
signing this Agreement:

 

(a)                                  consents
and agrees to and acknowledges the terms of this Agreement;

 

(b)                                 acknowledges
and agrees that all of the Loan Documents to which such Guarantor is a party or
otherwise bound shall continue in full force and effect and that all of such
Guarantor’s obligations thereunder shall be valid and enforceable and shall not
be impaired or limited by the execution or effectiveness of this Agreement;

 

7

 

(c)           represents and warrants to the First
Lien Administrative Agent and the First Lien Lenders that all representations
and warranties made by such Guarantor and contained in this Agreement or any
other Loan Document to which it is a party are true and correct in all material
respects (other than such representations and warranties that are untrue or
otherwise inaccurate solely and directly as a result of the Existing Events of
Default) on and as of the date of this Agreement to the same extent as though made
on and as of such date, except to the extent that any thereof expressly relate
to an earlier date; and

 

(d)           acknowledges and agrees that (i) notwithstanding
the conditions to effectiveness set forth in this Agreement, such Guarantor is
not required by the terms of the First Lien Credit Agreement or any other Loan
Document to which such Guarantor is a party to consent to the terms of this
Agreement and (ii) nothing in the First Lien Credit Agreement, this
Agreement or any other Loan Document shall be deemed to require the consent of
such Guarantor to any future amendments or modifications to the First Lien
Credit Agreement.

 

Section 4.6             No
Other Promises or Inducements.  There
are no promises or inducements that have been made to any party hereto to cause
such party to enter into this Agreement other than those that are set forth in
this Agreement.  This Agreement has been
entered into by each Borrower and each Guarantor freely, voluntarily, with full
knowledge, and without duress, and, in executing this Agreement, neither any
Borrower nor any Guarantor is relying on any other representations, either
written or oral, express or implied, made to any Borrower or any Guarantor by
the First Lien Administrative Agent. 
Each Borrower and each Guarantor agrees that the consideration received
by the Borrowers under this Agreement has been actual and adequate.

 

Section 4.7             No
Course of Dealing.  Each Loan Party
acknowledges and agrees that, (a) this Agreement is not intended to, nor
shall it, establish any course of dealing between the Loan Parties, the First
Lien Administrative Agent and the First Lien Lenders that is inconsistent with
the express terms of the First Lien Credit Agreement or any other Loan
Document, (b) notwithstanding any course of dealing between the Loan
Parties, the First Lien Administrative Agent and the First Lien Lenders prior
to the date hereof, except as set forth herein, the First Lien Lenders shall
not be obligated to make any Loan, except in accordance with the terms and
conditions of this Agreement and the First Lien Credit Agreement, and (c) except
with respect to the limited forbearance granted herein specifically relating to
the Existing Events of Default, neither the First Lien Administrative Agent nor
any First Lien Lender shall be under any obligation to forbear from exercising
any of its rights or remedies upon the occurrence of any Default or Event of
Default.  Nothing herein modifies the
agreements among the First Lien Administrative Agent and the First Lien Lenders
with respect to the exercise of their respective rights and remedies under the
terms of the First Lien Credit Agreement.

 

Section 4.8             No
Waiver.  Each Loan Party acknowledges
and agrees that (a) except as expressly provided herein, this Agreement
shall not operate as a waiver of any right, power or remedy of the First Lien
Administrative Agent or the First Lien Lenders under the First Lien Credit
Agreement or any Loan Document, nor shall it constitute a continuing waiver at
any time,

 

8

 

(b) the First Lien Lenders
shall not have any obligation to extend the term of the Forbearance Period, (c) nothing
herein shall be deemed to constitute a waiver of any Default or Event of
Default, including the Existing Events of Default, and, except as expressly
provided herein, nothing herein shall in any way prejudice the rights and
remedies of the First Lien Administrative Agent or the First Lien Lenders under
the First Lien Credit Agreement, any Loan Document or applicable law.  In addition, the First Lien Administrative
Agent shall have the right to waive any condition or conditions set forth in
this Agreement, the First Lien Credit Agreement or any Loan Document, in its
sole discretion, and any such waiver shall not prejudice, waive or reduce any
other right or remedy that the First Lien Administrative Agent may have against
any Loan Party.

 

Section 4.9             Survival.  All representations, warranties, covenants,
agreements, releases and waivers made by or on behalf of any Loan Party under
this Agreement shall survive and continue after the expiration or termination
of the Forbearance Period.

 

Section 4.10           No
Waiver of Rights. No waiver shall be deemed to be made by any party
hereunder of any of its rights hereunder unless the same shall be in writing
signed on behalf of such party.

 

Section 4.11           Governing Law.  THIS
AGREEMENT SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF
THE STATE OF NEW YORK.

 

Section 4.12           Entire
Agreement.  This Agreement (together
with the Fee Letter) sets forth the entire agreement and understanding among
the parties as to the subject matter hereof and merges and supersedes all prior
discussions, agreements, and undertakings of every kind and nature among them
with respect to the subject matter hereof.

 

Section 4.13           Counterparts.  This Agreement may be executed in any number
of counterparts, and by the parties hereto on the same or separate counterparts
and by facsimile signature, and each such counterpart, when executed and
delivered, shall be deemed to be an original, but all such counterparts shall
together constitute but one and the same Agreement.

 

Section 4.14           Severability
Of Provisions; Captions; Attachments. 
Wherever possible each provision of this Agreement shall be interpreted
in such manner as to be effective and valid under applicable law.  Any provision of this Agreement that is
prohibited or unenforceable in any jurisdiction shall, as to such jurisdiction,
be ineffective to the extent of such prohibition or unenforceability without
invalidating the remaining provisions hereof or affecting the validity or
enforceability of such provision in any other jurisdiction. The captions to
Sections and subsections herein are inserted for convenience only and shall be
ignored in interpreting the provisions of this Agreement.  Each schedule or exhibit attached to this
Agreement shall be incorporated herein and shall be deemed to be a part hereof.

 

Section 4.15           JURY
TRIAL WAIVER.  EACH OF THE
UNDERSIGNED, TO THE EXTENT PERMITTED BY LAW, HEREBY WAIVE ANY RIGHT TO HAVE A
JURY PARTICIPATE IN RESOLVING ANY DISPUTE WHETHER SOUNDING IN CONTRACT, TORT,
OR OTHERWISE, AMONG THEM, OR ANY OF THEM, ARISING OUT OF, IN

 

9

 

CONNECTION WITH, RELATED TO OR
INCIDENTAL TO THE RELATIONSHIP ESTABLISHED AMONG THEM IN CONNECTION WITH THIS
AGREEMENT OR ANY DOCUMENT EXECUTED OR DELIVERED IN CONNECTION HEREWITH OR THE
TRANSACTIONS RELATED THERETO.

 

10

 

IN WITNESS WHEREOF, the parties hereto have executed this Agreement as
of the date referenced in the first paragraph of this Agreement.

 

 

	
   

  	
  PROSPECT
  MEDICAL HOLDINGS, INC.

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
  Name:

  	
   

  
	
   

  	
  Title:

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  PROSPECT
  MEDICAL GROUP, INC.

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
  Name:

  	
   

  
	
   

  	
  Title:

  	
   

  

 

 

	
   

  	
  BANK OF
  AMERICA, N.A

  
	
   

  	
  as First
  Lien Administrative Agent

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
  Name:

  	
   

  
	
   

  	
  Title:

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  BANK OF
  AMERICA, N.A., as a Lender

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
  Name:

  	
   

  
	
   

  	
  Title:

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  as a Lender

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
  Name:

  	
   

  
	
   

  	
  Title:

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  as a Lender

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
  Name:

  	
   

  
	
   

  	
  Title:

  	
   

  

 

 

Each of the undersigned acknowledges the

terms of and consents to the foregoing:

 

	
  GUARANTORS:

  
	
   

  
	
  SIERRA MEDICAL MANAGEMENT, INC.

  
	
   

  
	
  By:

  	
   

  	
   

  
	
  Name:

  	
   

  	
   

  
	
  Title:

  	
   

  	
   

  
	
   

  
	
   

  
	
  PROSPECT MEDICAL SYSTEMS, INC.

  
	
   

  
	
  By:

  	
   

  	
   

  
	
  Name:

  	
   

  	
   

  
	
  Title:

  	
   

  	
   

  
	
   

  
	
   

  
	
  PROSPECT HOSPITAL ADVISORY SERVICES, INC.

  
	
   

  
	
  By:

  	
   

  	
   

  
	
  Name:

  	
   

  	
   

  
	
  Title:

  	
   

  	
   

  
	
   

  
	
   

  
	
  PROSPECT ADVANTAGE NETWORK, INC.

  
	
   

  
	
  By:

  	
   

  	
   

  
	
  Name:

  	
   

  	
   

  
	
  Title:

  	
   

  	
   

  
	
   

  
	
   

  
	
  PROSPECT HOSPITALS SYSTEM, LLC

  
	
   

  
	
  By:

  	
   

  	
   

  
	
  Name:

  	
   

  	
   

  
	
  Title:

  	
   

  	
   

  
	
   

  
	
   

  
	
  ALTA HOLLYWOOD HOSPITALS, INC.

  
	
   

  
	
  By:

  	
   

  	
   

  
	
  Name:

  	
   

  	
   

  
	
  Title:

  	
   

  	
   

  
					

 

 

	
  ALTA LOS ANGELES HOSPITALS, INC.

  
	
   

  
	
  By:

  	
   

  	
   

  
	
  Name:

  	
   

  	
   

  
	
  Title:

  	
   

  	
   

  
	
   

  
	
   

  
	
  PROMED HEALTH CARE ADMINISTRATORS

  
	
   

  
	
  By:

  	
   

  	
   

  
	
  Name:

  	
   

  	
   

  
	
  Title:

  	
   

  	
   

  
	
   

  
	
   

  
	
  PINNACLE HEALTH RESOURCES

  
	
   

  
	
  By:

  	
   

  	
   

  
	
  Name:

  	
   

  	
   

  
	
  Title:

  	
   

  	
   

  
	
   

  
	
   

  
	
  PROSPECT PHYSICIAN ASSOCIATES, INC.

  
	
   

  
	
  By:

  	
   

  	
   

  
	
  Name:

  	
   

  	
   

  
	
  Title:

  	
   

  	
   

  
	
   

  
	
   

  
	
  PROSPECT HEALTH SOURCE MEDICAL GROUP, INC.

  
	
   

  
	
  By:

  	
   

  	
   

  
	
  Name:

  	
   

  	
   

  
	
  Title:

  	
   

  	
   

  
	
   

  
	
   

  
	
  PROSPECT PROFESSIONAL CARE MEDICAL GROUP, INC.

  
	
   

  
	
  By:

  	
   

  	
   

  
	
  Name:

  	
   

  	
   

  
	
  Title:

  	
   

  	
   

  
					

 

 

	
  NUESTRA FAMILIA MEDICAL GROUP, INC.

  
	
   

  
	
  By:

  	
   

  	
   

  
	
  Name:

  	
   

  	
   

  
	
  Title:

  	
   

  	
   

  
	
   

  
	
   

  
	
  APAC MEDICAL GROUP, INC.

  
	
   

  
	
  By:

  	
   

  	
   

  
	
  Name:

  	
   

  	
   

  
	
  Title:

  	
   

  	
   

  
	
   

  
	
   

  
	
  PROSPECT NWOC MEDICAL GROUP, INC.

  
	
   

  
	
  By:

  	
   

  	
   

  
	
  Name:

  	
   

  	
   

  
	
  Title:

  	
   

  	
   

  
	
   

  
	
   

  
	
  SIERRA PRIMARY CARE MEDICAL GROUP, A MEDICAL CORPORATION

  
	
   

  
	
  By:

  	
   

  	
   

  
	
  Name:

  	
   

  	
   

  
	
  Title:

  	
   

  	
   

  
	
   

  
	
   

  
	
  STARCARE MEDICAL GROUP, INC.

  
	
   

  
	
  By:

  	
   

  	
   

  
	
  Name:

  	
   

  	
   

  
	
  Title:

  	
   

  	
   

  
	
   

  
	
   

  
	
  PEGASUS MEDICAL GROUP, INC.

  
	
   

  
	
  By:

  	
   

  	
   

  
	
  Name:

  	
   

  	
   

  
	
  Title:

  	
   

  	
   

  
					

 

 

	
  ANTELOPE VALLEY MEDICAL ASSOCIATES, INC.

  
	
   

  
	
  By:

  	
   

  	
   

  
	
  Name:

  	
   

  	
   

  
	
  Title:

  	
   

  	
   

  
	
   

  
	
   

  
	
  SANTA ANA/TUSTIN PHYSICIANS GROUP, INC.

  
	
   

  
	
  By:

  	
   

  	
   

  
	
  Name:

  	
   

  	
   

  
	
  Title:

  	
   

  	
   

  
	
   

  
	
   

  
	
  PROMED HEALTH SERVICES COMPANY

  
	
   

  
	
  By:

  	
   

  	
   

  
	
  Name:

  	
   

  	
   

  
	
  Title:

  	
   

  	
   

  
	
   

  
	
   

  
	
  GENESIS HEALTHCARE OF SOUTHERN CALIFORNIA, INC., A MEDICAL GROUP

  
	
   

  
	
  By:

  	
   

  	
   

  
	
  Name:

  	
   

  	
   

  
	
  Title:

  	
   

  	
   

  
	
   

  
	
   

  
	
  POMONA VALLEY MEDICAL GROUP, INC.

  
	
   

  
	
  By:

  	
   

  	
   

  
	
  Name:

  	
   

  	
   

  
	
  Title:

  	
   

  	
   

  
	
   

  
	
   

  
	
  UPLAND MEDICAL GROUP, A PROFESSIONAL MEDICAL CORPORATION

  
	
   

  
	
  By:

  	
   

  	
   

  
	
  Name:

  	
   

  	
   

  
	
  Title:

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  DR. TERNER:

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Jacob Y. Terner, M.D.

  	
   

  
					

 

 

EXHIBIT A

 

OUTSTANDING INDEBTEDNESS

 

As
of February 1, 2008:

 

	
  First Lien Term Facility

  	
   

  	
  $

  	
  92,500,000.00

  	
   

  	
   

  
	
  First Lien Revolving Facility

  	
   

  	
  $

  	
  0.00

  	
   

  	
   

  
	
  Swing Line Facility

  	
   

  	
  $

  	
  0.00

  	
   

  	
   

  
	
  Letter of Credit Facility

  	
   

  	
  $

  	
  250,000.00
  

  	
   

  	
  (outstanding and undrawn)

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Total:

  	
   

  	
  $

  	
  92,750,000.00

  	
   

  	
   

  

 

A-1

 

EXHIBIT B

 

EXISTING EVENTS
OF DEFAULT

 

JANUARY 28TH
EVENTS OF DEFAULT

 

1.                                       Failure of
the Borrowers to deliver by January 28, 2008 to the First Lien
Administrative Agent and the First Lien Lenders the financial statements and
other reports and information required under Section 6.01(a) of the
First Lien Credit Agreement (Event of Default under Section 8.01(b) of
the First Lien Credit Agreement)

 

2.                                       Failure of
the Borrowers to deliver by January 28, 2008 to the First Lien
Administrative Agent and the First Lien Lenders the accountants certificate and
the Compliance Certificate required under Sections 6.02(a) and (b) of
the First Lien Credit Agreement (Events of Default under Section 8.01(b) of
the First Lien Credit Agreement)

 

ANTICIPATED EVENTS OF DEFAULT

 

1.                                       Failure of
the Borrowers to deliver by February 14, 2008 to the First Lien
Administrative Agent and the First Lien Lenders the financial statements and
other reports and information required under Section 6.01(b) of the
First Lien Credit Agreement (Event of Default under Section 8.01(b) of
the First Lien Credit Agreement)

 

2.                                       Failure of
the Borrowers to deliver by February 14, 2008 to the First Lien
Administrative Agent and the First Lien Lenders the Compliance Certificate
required under Sections 6.02(b) of the First Lien Credit Agreement (Events
of Default under Section 8.01(b) of the First Lien Credit Agreement)

 

3.                                       Failure of the
Borrowers to comply with the financial covenants set forth in Sections 7.11(a) and
(b) of the First Lien Credit Agreement (Events of Default under Section 8.01(b) of
the First Lien Credit Agreement) for the fiscal year ended September 30,
2007 and for the fiscal quarter ended December 31, 2007

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