Bank ofAmerica, N.A. WA1-501-17-32 800 FifthAvenue, Floor 17 Seattle,WA 98104

EX-10.6 3 a09-15679_1ex10d6.htm EX-10.6

Exhibit 10.6

Bank of America, N.A.

WA1-501-17-32

800 Fifth Avenue, Floor 17

Seattle, WA 98104

December 31, 2008

Prospect Medical Group, Inc.

1920 East 17th Street, Suite 200

Santa Ana, CA 92705

Re: Second Amendment to Letter Agreement Regarding Divestiture Plan (“Second Amendment”)

Ladies and Gentlemen:

Reference is hereby made to that certain side letter agreement dated as of May 15, 2008 (as amended, restated, supplemented or otherwise modified from time to time, the “Divestiture Letter Agreement”) among Prospect Medical Holdings, Inc. (“Holdings”), 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 “Second Lien Administrative Agent”), and the lenders party thereto (collectively, the “Second Lien Lenders”). Terms not otherwise defined in this Second Amendment shall have the meaning assigned thereto in the Divestiture Letter Agreement.

Under the terms of the Divestiture Letter Agreement, the Borrowers agreed to complete the sale of the ProMed Entities (as defined in the Divestiture Plan) no later than December 31, 2008 (the “Sale Deadline”). The Borrowers have requested that the Second Lien Administrative Agent and the Second Lien Lenders amend the Divestiture Letter Agreement to extend the Sale Deadline to January 31, 2009. The Second Lien Administrative Agent and the Second Lien Lenders are willing to grant the Borrowers’ request subject to the terms and conditions of this Second Amendment.

In furtherance thereof, the Second Lien Administrative Agent, the Second Lien Lenders and the Borrowers agree that paragraph (c) of the Divestiture Letter Agreement is hereby amended and restated in its entirety to read as follows:

“(c) The Borrowers shall complete the sale of (i) the Antelope Valley Entities (as defined in the Divesture Plan) no later than October 1, 2008 and in accordance with the terms set forth in the Amendment and (ii) the ProMed Entities (as defined in the Divesture Plan) no later than January 31, 2009 on terms and conditions reasonably satisfactory to the Second Lien Administrative Agent and the Required Lenders.”

This Second Amendment shall become effective as of December 31, 2008, upon (a) execution by the Borrowers, the Guarantors, the Second Lien Administrative Agent and the

Required Lenders, (b) payment of all professional fees and expenses of the Second Lien Administrative Agent and the Second Lien Lenders in connection with this Second Amendment, the Loan Documents and the transactions contemplated hereby and thereby (including all fees and expenses of Winston & Strawn LLP, in its capacity as counsel to the Second Lien Administrative Agent), pursuant to wire transfer instructions to be provided by the Second Lien Administrative Agent.

Except for the amendment contained herein, all of the terms and provisions of the Divestiture Letter Agreement and the other Loan Documents shall remain in full force and effect. The Borrowers, by their acceptance hereof, hereby acknowledge and agree that the failure to provide the required items within the time period set forth in the Divestiture Letter Agreement, or the failure to complete the sale of the ProMed Entities prior to the date specified in the Divestiture Letter Agreement, as amended hereby, shall result in an Event of Default in accordance with Section 8.01(b) of the Second Lien Credit Agreement.

Each of the Guarantors, by their acknowledgment hereto, agree and consent to this Second Amendment, to all prior Loan Documents, and to the documents and agreements referred to herein and therein, and to all future modifications and amendments thereto, and any termination thereof, and to any and all other present and future documents and agreements between or among the Borrowers and the Second Lien Administrative Agent. The Guarantors agree to be bound by all terms of the Loan Documents applicable to “Loan Parties”. Nothing contained herein shall in any way expand, limit or diminish any of the obligations of the Guarantors under their respective guaranty, each such guaranty being hereby ratified and affirmed. The signatures of each of the Guarantors shall be fully effective even if any other Guarantor fails to sign this Second Amendment.

Each of the Borrowers and Guarantors hereby waives and releases the Second Lien Administrative Agent, each Second Lien Lender 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 such Person may have as of the date of this Second Amendment based upon, relating to, or arising out of the Obligations and related transactions in any way. Each of the Borrowers and Guarantors 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 Second Amendment shall not constitute a release of the obligations of the Second Lien Administrative Agent or any Second 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.

This Second Amendment shall constitute a Loan Document and may be executed in one or more counterparts, each of which shall be deemed an original, but all of which together shall constitute one and the same instrument. Delivery of executed counterparts of this Second Amendment by telecopy or pdf shall be effective as an original.

Very truly yours,

	BANK OF AMERICA, N.A., in its capacity as Second Lien Administrative Agent

	By:	/s/ Tiffany Shin
	Name:	Tiffany Shin
	Title:	Assistant Vice President

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