Document:

Exhibit 10.20

 

FIFTH
AMENDMENT

TO

AMENDED AND RESTATED REVOLVING CREDIT AGREEMENT

 

This Fifth Amendment to
Amended and Restated Revolving Credit Agreement (“Amendment”) is entered into
as of July 31, 2002, between Comerica Bank-California, successor-by-merger
to Imperial Bank (the “Bank”), and Prospect Medical Holdings, Inc. (the
“Borrower”).

 

RECITALS

 

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

 

The Borrower and the Bank
entered into an Amended and Restated Revolving Credit Agreement, dated as of
July 3, 1999 (as modified, amended, and supplemented to the date hereof,
the “Credit Agreement”).  Capitalized
terms used, but not defined herein, shall have the meanings ascribed thereto in
the Credit Agreement.  The Bank and the
Borrower desire to amend the Credit Agreement 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 “Maturity Date.” 
The definition of “Maturity Date,” contained in Section 1.1 of the
Credit Agreement, is hereby amended and restated to read in its entirety as
follows:

 

‘“Maturity Date’ means
October 3, 2003.”

 

ARTICLE 2
– CONDITIONS PRECEDENT

 

2.1                                 Conditions Precedent. 
This Amendment shall be effective upon satisfaction of all of the
following conditions precedent, as determined by the Bank in its sole
discretion:

 

(a)                                  the Bank shall have received a signed copy of
the following documents, all in form and content acceptable to the Bank in it
sole discretion, duly executed and delivered by an authorized representative of
the Borrower: (i) this Amendment; and (ii) the Third Amendment to Term Note;

 

(b)                                 the Borrower shall have paid to the Bank $122,075.26,
which the Bank shall apply to the repayment of the Term Loan in accordance with
the provisions thereof; and

 

1

 

(c)                                  the Borrower shall have taken such other
actions as may be requested by the Bank to more fully document the transaction
evidenced hereby.

 

ARTICLE 3
– REPRESENTATIONS AND WARRANTIES

 

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

 

3.1                                 Borrower’s Representations and Warranties.

 

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

 

(b)                                 The Borrower’s representations and warranties
contained in the Credit Agreement are true and correct in all respects on and
as of the date hereof as though made on and as of the date hereof, and no Event
of Default or Unmatured Event of Default has occurred and is continuing as of
the date hereof.

 

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

 

ARTICLE 4
– GENERAL PROVISIONS

 

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

 

4.2.                              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.

 

4.3                                 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.

 

2

 

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.

 

	
  “BANK”

  	
  “BORROWER”

  
	
  Comerica Bank-California

  	
  Prospect Medical Holdings,
  Inc.

  
	
   

  	
   

  
	
  By:

  	
  /s/ Thomas Turner

  	
   

  	
  By:

  	
  /s/ R. Stewart Kahn

  	
   

  
	
   

  	
  Thomas Turner,

  	
   

  	
   

  	
  R. Stewart Kahn,

  	
   

  
	
   

  	
  Vice President

  	
   

  	
   

  	
  Executive Vice President

  	
   

  

 

3Exhibit 10.21

 

SIXTH
AMENDMENT

TO

AMENDED AND RESTATED REVOLVING CREDIT AGREEMENT

 

This
Sixth Amendment to Amended and Restated Revolving Credit Agreement
(“Amendment”) is entered into as of September 24, 2003, between Comerica
Bank, successor-by-merger to Comerica Bank-California, successor-by-merger to
Imperial Bank (the “Bank”), and Prospect Medical Holdings, Inc. (the
“Borrower”).

 

RECITALS

 

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

 

The
Borrower and the Bank entered into an Amended and Restated Revolving Credit
Agreement, dated as of July 3, 1999 (as modified, amended, and
supplemented to the date hereof, the “Credit Agreement”).  Capitalized terms used, but not defined
herein, shall have the meanings ascribed thereto in the Credit Agreement.  The Bank and the Borrower desire to amend
the Credit Agreement 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 Certain Defined Terms.  The
definitions listed below contained in Section 1.1 of the Credit Agreement,
are hereby amended and restated to read in their entirety as  follows:

 

‘“Applicable
Margin’ means 75 basis points.”

 

‘“Maturity
Date’ means October 3, 2004.”

 

‘“Revolving
Credit Commitment’ means $4,000,000 until October 14, 2003, and
thereafter means $2,000,000.”

 

1.2                                 New Defined Terms.  The
following new defined terms are hereby added to Section 1.1 of the Credit
Agreement in appropriate alphabetical order:

 

“‘Debt
to Consolidated Net Worth Ratio’ means, as of the date of determination,
the ratio of: (i) Borrower’s and the Subsidiaries’ consolidated Debt as of such
date; to (ii) Borrower’s and the Subsidiaries Consolidated Net Worth as of such
date.”

 

‘“Cash
Flow Coverage Ratio’ means, as of the date of determination, the ratio of
(i) the sum of (x) EBITDAR for the rolling four (4) fiscal quarter period
ending on such date plus (y) 60% of the IBNR Expense for the rolling four (4)
fiscal quarter period ending on such date, to (ii) the sum of (x) Consolidated

 

1

 

Interest
Expense for the rolling four (4) fiscal quarter period ending on such date,
plus (y) Consolidated Lease Expense for the rolling four (4) fiscal quarter
period ending on such date, plus (z) the current portion of Borrower’s
consolidated long term Debt as of such date.”

 

1.3                                 Deletion of Certain Defined Terms.  The
definitions of “Coverage Ratio,” “Current Ratio” “Leverage Ratio” set forth in
Section 1.1 of the Credit Agreement are hereby deleted in their entirety.

 

1.4                                 Amendment to Section 6.16 - Financial
Covenants.  Section 6.16 of the Credit Agreement is
hereby amended in its entirety as follows:

 

“6.16                     Financial Condition. 
Permit or suffer:

 

(a)                                  Consolidated Net Worth at the end of each
fiscal quarter, beginning with the quarter ending September 30, 2003, to
be less than the sum of (i) $6,500,000, plus (ii) $500,000 per fiscal year,
commencing with the fiscal year ending September 30, 2004.

 

(b)                                 The Debt to Consolidated Net Worth Ratio,
measured at the end of each fiscal quarter, commencing with the fiscal quarter
ending September 30, 2003, at any time to be greater than 3.50:1.0.

 

(c)                                  Consolidated Net Income, measured at the end
of each fiscal quarter, commencing with the fiscal quarter ending
September 30, 2003, at any time to be less than $1.00

 

(d)                                 Consolidated Net Income, measured at the end
of each fiscal year, commencing with the fiscal year ending September 30,
2003, at any time to be less than $1,000,000.

 

(e)                                  The Cash Flow Coverage Ratio, measured at the
end of each fiscal quarter, commencing with the fiscal quarter ending
September 30, 2003, at any time to be less than 1.25:1.0.”

 

ARTICLE 2 - CONDITIONS PRECEDENT

 

2.1                                 Conditions Precedent.  This
Amendment shall be effective upon satisfaction of all of the following
conditions precedent, as determined by the Bank in its sole discretion:

 

(a)                                  the Bank shall have received a signed copy of
the following documents, all in form and content acceptable to the Bank in it
sole discretion, duly executed and delivered by an authorized representative of
the Borrower: (i) this Amendment; (ii) the Fifth Amendment to Amended and
Restated Secured Revolving Note; (iii) the Fourth Amendment to Term Note; and
(iv) such amendments or restatements of Bank’s security agreements and Uniform
Commercial Code filings as Bank shall require;

 

2

 

(b)                                 the Borrower shall have paid a commitment fee
in the amount of $5000 and all Bank Expenses incurred with the preparation of
this Amendment; and

 

(c)                                  the Borrower shall have taken such other
actions as may be requested by the Bank to more fully document the transaction
evidenced hereby.

 

ARTICLE 3 - REPRESENTATIONS AND WARRANTIES

 

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

 

3.1                                 Borrower’s Representations and Warranties.

 

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

 

(b)                                 The Borrower’s representations and warranties
contained in the Credit Agreement are true and correct in all respects on and
as of the date hereof as though made on and as of the date hereof, and no Event
of Default or Unmatured Event of Default has occurred and is continuing as of
the date hereof.

 

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

 

ARTICLE 4 - GENERAL PROVISIONS

 

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

 

4.2                                 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.

 

4.3                                 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.

 

3

 

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.

 

	
  “BANK”

  	
  “BORROWER”

  
	
   

  	
   

  
	
  Comerica Bank

  	
  Prospect Medical Holdings,
  Inc.

  
	
   

  	
   

  
	
  By:

  	
  /s/ Stephanie D. McElroy

  	
   

  	
  By:

  	
  /s/ R. Stewart Kahn

  	
   

  
	
   

  	
  Stephanie D. McElroy,

  	
   

  	
   

  	
  R. Stewart Kahn,

  	
   

  
	
   

  	
  Vice President

  	
   

  	
   

  	
  Executive Vice President

  	
   

  

 

4

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