Document:

Exhibit
10.69

 

TERM LOAN NOTE

 

	
  U.S. $5,000,000

  	
   

  	
   

  	
  October 25, 2000

  

 

FOR
VALUE RECEIVED, the undersigned, Prospect Medical Holdings, Inc., a Delaware
corporation (“Borrower”), promises to pay to the order of Imperial Bank, a
California banking corporation (“Bank”) or holder the principal sum of
$5,000,000, in lawful money of the United States, together with interest
thereon in like lawful money, which interest shall be computed on the
outstanding principal balance owing hereunder at the rate of interest provided
below from the date hereof until paid in full.

 

This
Term Loan Note (the “Note”) is referred to in the Amended and Restated
Revolving Credit Agreement, date as of July 3, 1999, as amended, between Bank
and Borrower (the “Credit Agreement”), to which reference is hereby made for a
more complete statement of the terms and conditions under which the loan
evidenced hereby is made and is to be repaid. The Credit Agreement, among other
things, contains certain provisions for the acceleration of the maturity date
hereof, the prepayment of the principal amount hereof, and for changes in the
interest rate hereof upon the terms and conditions specified therein. All
capitalized terms used, but not specifically defined herein, shall have the
meanings ascribed thereto in the Credit Agreement.

 

Unless
sooner due and payable under the provisions of the Credit Agreement, the
principal amount of this Note shall be payable in thirteen (13) consecutive
monthly installments. The first twelve (12) of such installments shall be
payable on the twelfth (12th) day of each month hereafter, with the
first such installment being due on November 12, 2000. The thirteenth (13th)
and final installment shall be payable on November 3, 2001.  The first twelve (12) installments shall
each be in the amount of $41,666, and the thirteenth (13th)
installment shall be in the amount of the then unpaid principal balance of the
Term Loan.

 

Borrower
shall prepay this Note as provided in the Credit Agreement. All other
prepayments may be made at Borrower’s option. All such prepayments shall be
made without prepayment penalty or premium. All such prepayments shall be
applied first to the satisfaction of any sums (other than principal or
interest) owing by Borrower to Bank under the terms of the Credit Agreement,
second, to accrued and unpaid interest due hereunder, and third to installments
of principal hereof in inverse order of their maturity.

 

The
unpaid principal balance hereof shall accrue interest at the Lending Rate; provided,
however, if any payment of principal or interest due hereunder shall not
be paid when due (whether at the stated maturity, by acceleration, or
otherwise), including the any required prepayment, then, in addition to
and not in substitution of Bank’s other rights and remedies, the entire unpaid
principal balance hereof shall bear interest at the Lending Rate plus 5%
until such overdue payment is paid in full. All computations of interest shall
be calculated on the basis of a year of 360 days for actual days elapsed. In
the event that the Prime Rate is, from time to time, changed, adjustment of the
rate of interest payable hereunder shall be made as of 12:01 a.m.  (Pacific time) on the date of the effective
change in the Prime Rate. All accrued, but unpaid interest on the unpaid principal
balance hereof, shall be due and payable in arrears, on the twelfth.

 

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(12th) day of
each any every month, until the principal balance hereof is paid in full in
cash, except that all then accrued and unpaid interest shall be due and payable
in full, with the final installment payment of principal.

 

All
payments in respect of this Note shall be made to Bank in accordance with Section
2.8 of the Credit Agreement. 
Borrower authorizes and directs Bank (and Bank agrees) to deduct from
the Collection Account, to the extent of any funds therein, an amount equal to
any payments then due hereunder and apply such funds to those payments.

 

The
principal and all accrued and unpaid interest thereon shall be due and payable
in full on the Maturity Date, subject to earlier acceleration and/or mandatory
prepayment as provided in the Credit Agreement. All payments received hereunder
shall be applied first to the payment or reimbursement to Bank of the
Bank’s Expenses and Fees, second to accrued interest, and third
to the repayment of principal.

 

If
any payment due hereunder is not paid in full when due, Borrower promises to
pay all costs and expenses of collection and all attorney’s fees and expenses
and court costs incurred by the holder hereof on account of such collection
whether or not suit is filed thereon.

 

Borrower
waives protest, diligence, presentment, demand for payment, notice of default
or nonpayment, notice of dishonor and all other demands and notices in
connection with the delivery, acceptance, performance and enforcement of this
Note and to the fullest extent permitted by law, all rights to asset any
statute of limitations to an action hereunder.

 

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

 

This
Note is executed under and shall be governed by and construed in accordance
with the laws of the state of California without reference to conflicts of law
principles in the state of California.

 

In
any action brought under or arising out of this Note, Borrower hereby consents
to the jurisdiction of any competent court within Los Angeles County, state of
California, and consents to service or process by any means authorized by
California law. Company hereby waives any

 

[BALANCE OF PAGE INTENTIONALLY LEFT BLANK.]

 

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right which Borrower may
have to transfer or change the venue of any action brought by the holder of
this Note.

 

IN
WITNESS WHEREOF, Borrower has executed and delivered this Note as of the date
first written above.

 

	
   

  	
  “BORROWER”

  
	
   

  	
  Prospect Medical Holdings,
  Inc.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By

  	
      /s/
  R. Stewart Kahn

  	
   

  
	
   

  	
   

  	
      R.
  Stewart Kahn,

  
	
   

  	
   

  	
      Executive
  Vice President

  

 

3Exhibit
10.70

 

FIRST AMENDMENT

TO

TERM LOAN NOTE

 

This First Amendment to Term Loan Note (“Amendment”) is entered into as
of November 3, 2001, between Comerica Bank-California, successor-by-merger
to Imperial Bank (the “Bank”), and Prospect Medical Holdings, Inc. (the
“Borrower”).

 

RECTIALS

 

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

 

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

 

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

 

ARTICLE 1 - AMENDMENTS

 

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

 

“Unless sooner due and
payable under the provisions of the Credit Agreement, the principal amount of
this Note shall be payable in sixteen (16) consecutive monthly installments.
The first fifteen (15) of such installments shall be payable on the twelfth (12th)
day of each month hereafter, with the first such installment being due on
November 12, 2000. The sixteenth (16th) and final installment
shall be payable on February 1, 2002. The first fifteen (15) installments
shall each be in the amount of $41,666, and the sixteenth (16th)
installment shall be in the amount of the then unpaid principal balance of the
Term Loan.”

 

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 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

 

1

 

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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