AMENDED AND RESTATED ASSIGNABLE OPTION AGREEMENT
THIS AMENDED AND RESTATED ASSIGNABLE OPTION AGREEMENT ("Agreement") is made
as of the 2nd day of September, 1998 and deemed to have been effective as of
October 31, 1997, by and among Sierra Medical Management, Inc., a Delaware
corporation ("Sierra Medical Management"), Pegasus Medical Group, Inc., a
California professional medical corporation ("Group"), and Prospect Medical
Group, Inc., a California professional corporation ("Prospect Medical Group"),
with reference to the following facts:
RECITALS
A. Group is a professional corporation that is organized and operated as
a medical practice (the "Practice").
B. Group, Xxxxxx X. Xxxxxxxx, M.D., Medical Corporation, d/b/a A.V.
Western Medical Group, Inc., a California corporation ("Seller") and J. Xxxxxx
Xxxx, M.D. entered into that certain Asset Purchase Agreement, dated as of
October 29, 1997 (the "Asset Purchase Agreement"), pursuant to which Seller is
selling certain assets to Group (the "Acquisition").
C. Subject to the conditions set forth herein, effective as of the
Closing of the Acquisition, Prospect Medical Group desires to grant to Sierra
Medical Management, and Sierra Medical Management desires to acquire from
Prospect Medical Group, (i) an assignable option to purchase all of the assets
of Group, and (ii) the right to designate the purchaser ("Successor Physician")
of all or part of the issued and outstanding stock in Group. When used in this
Agreement, the term "Assets" shall mean all of Group's and Prospect Medical
Group's right, title, interest and estate in and to all the assets of every kind
and description used in or pertaining to the Practice, including but not limited
to the assets set forth on Exhibit A. When used in this Agreement, the term
"Stock" shall mean all of Prospect Medical Group's right, title, interest and
estate in and to all of the issued and outstanding stock in Group, including any
rights to any additional stock, preemptive rights, warrants, and the like, as
set forth on Exhibit B.
D. Prospect Medical Group, Group and Sierra Medical Management desire to
enter into this Agreement to incorporate within the terms of one agreement all
of the amendments previously made and to be made as of the date of execution
hereof to an Assignable Option Agreement made as of October 31, 1997 (the
"Original Agreement").
NOW, THEREFORE, in consideration of the foregoing promises and other good
and valuable consideration, the receipt and sufficiency of which are hereby
acknowledged by the parties, Group, Prospect Medical Group, and Sierra Medical
Management agree as follows:
1. GRANT OF OPTION.
1.1 Prospect Medical Group hereby grants to Sierra Medical Management an
assignable option to purchase all or any part of the Assets (the "Assets
Option"), on the terms and subject to the conditions set forth in this
Agreement.
1.2 Group and Prospect Medical Group hereby grant to Sierra Medical
Management the assignable right to designate a Successor Physician or Successor
Physicians, which person or persons must be duly licensed physicians in the
State of California or otherwise permitted by law to be a shareholder in a
professional corporation, to purchase all or part of the Stock (the "Stock
Option"), on the terms and subject to the conditions set forth herein. In its
sole discretion, Sierra Medical Management may designate the amount of Stock
which is to be purchased. The Assets Option and the Stock Option are
collectively referred to herein as the "Option."
1.3 Group and Prospect Medical Group represent and warrant that as of the
day and year first above written and during the term of this Agreement, Exhibits
A and B are true and complete listings of the Assets and Stock, respectively, as
revised from time to time pursuant to this Agreement.
1.4 Other than in connection with that certain Amended and Restated Credit
Succession Agreement, dated as of July 14, 1997, by and among Prospect Medical
Holdings, Inc., a Delaware corporation ("Prospect Medical Holdings"), Prospect
Medical Group, Xxxxx XxXxxxxx, M.D., Santa Xxx/Tustin Physicians Group, Inc., a
California professional corporation ("Santa Xxx"), Prospect Medical Systems,
Inc., a Delaware corporation ("Prospect Medical Systems"), and Imperial Bank, a
California banking corporation ("Imperial"), as amended, and as supplemented by
the Joinder Agreement, dated as of September 25, 1997, entered into by and among
Sierra Medical Management, Sierra Primary Care Medical Group, A Medical
Corporation ("Sierra Medical Group"), Xxxxx XxXxxxxx, M.D., Prospect Medical
Holdings, Prospect Medical Systems, Prospect Medical Group, Santa Xxx and
Imperial, and the Joinder Agreement, dated as of October 31, 1997, entered into
by and among Group, Sierra Medical Management, Sierra Medical Group, Xxxxx
XxXxxxxx, M.D., Prospect Medical Holdings, Prospect Medical Systems, Prospect
Medical Group, Santa Xxx and Imperial (as amended and supplemented, the "Amended
and Restated Credit Succession Agreement"), Group shall not recognize any share
transfer or other action not in compliance with the terms of this Agreement.
2. TERM OF AGREEMENT. The term of this Agreement commences as of the day and
year first above written and continues for thirty (30) years ("Term"). So long
as the term of the Management Services Agreement, made and entered into of even
date herewith, by and between Sierra Medical Management and Group, as amended
(the "Management Services Agreement"), is automatically extended pursuant
thereto, the term of this Agreement shall be automatically extended for
additional coextensive terms of ten (10) years each. In the event the
Management Services Agreement is terminated pursuant to its terms, this
Agreement shall terminate upon the effective date of termination of said
Management Services Agreement.
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3. OPTION PRICE. The purchase price for the Option (the "Option Price") is
One Hundred Dollars ($100) and Group and Prospect Medical Group acknowledge
receipt of such payment.
4. EXERCISE OF OPTION.
4.1 During the Term of this Agreement, Sierra Medical Management may elect
to exercise the Option at any time. In the event of an election by Sierra
Medical Management to exercise the Option, Sierra Medical Management may
exercise either the Assets Option or the Stock Option, or both, at Sierra
Medical Management's sole discretion.
4.2 Notwithstanding the provisions of Section 4.1, if the Management
Services Agreement is terminated by either party, for any reason, Sierra Medical
Management's right to exercise the Option is automatically and immediately
exercised as of the termination date of the Management Services Agreement such
that Sierra Medical Management may exercise either the Assets Option or the
Stock Option, or both, at such time.
4.3 To the extent that the Assets Option is exercised by Sierra Medical
Management, Sierra Medical Management will send Group a written notice (the
"Assets Exercise Notice") specifying the Assets to be purchased. Sierra Medical
Management may exercise the Assets Option as many times as Sierra Medical
Management elects in its sole discretion.
4.4 To the extent that the Stock Option is exercised by Sierra Medical
Management, Sierra Medical Management will send Group a written notice (the
"Stock Exercise Notice") specifying the Stock to be purchased. Sierra Medical
Management may designate the Successor Physician(s) who will exercise the Stock
Option as many times as Sierra Medical Management elects in its sole discretion.
4.5 The Assets Option and the Stock Option are independent of each other,
and can be exercised at different times during the Term.
4.6 Sierra Medical Management may cancel any Assets Exercise Notice or
Stock Exercise Notice at any time.
4.7 Group and Prospect Medical Group shall cooperate with Sierra Medical
Management in any due diligence.
5. ASSIGNMENT OF THE OPTION. Sierra Medical Management may elect to assign
either the Assets Option or the Stock Option or both to any person, by a written
assignment, signed by both Sierra Medical Management and the assignee, which
designates the Assets or Stock. The assignee shall agree as a condition of the
assignment to be bound by the terms of this Agreement. Thereafter, only the
assignee named in the assignment (or its nominee) shall have the right to
exercise the applicable Assets Option and/or the Stock Option as to the
designated Assets and/or Stock, and that assignee, rather than Sierra Medical
Management, shall enter into a purchase agreement upon exercise of the Assets
Option and/or the Stock Option, as applicable. Written
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notice of any such assignment shall be given by Sierra Medical Management to
Group and Prospect Medical Group within a reasonable time period following
execution of any assignment pursuant to this Agreement. When the context so
requires in this Agreement, the term "Sierra Medical Management" shall be
deemed to refer to an assignee holding an assignment of an Asset Option or
Stock Option, and the terms "party" and "parties" shall be deemed to include
that assignee. The parties further understand and agree that the Assets
Option and the Stock Option are concurrently herewith being collaterally
assigned to Imperial pursuant to that certain Collateral Assignment of
Transaction Documents, dated as of October 31, 1997.
6. PURCHASE PRICE OF THE ASSETS OR STOCK.
6.1 PURCHASE PRICE.
(a) ASSETS PURCHASE PRICE. The purchase price for the Assets to be
purchased pursuant to the exercise of the Assets Option shall be $1,000 ("Assets
Purchase Price"). The purchase price of any partial purchase of the Assets
shall be a pro-rata percentage of the full Assets Purchase Price.
(b) STOCK PURCHASE PRICE. The purchase price for the Stock to be
purchased pursuant to the exercise of the Stock Option shall be $1,000 ("Stock
Purchase Price"). The purchase price of less than all of the issued and
outstanding Stock is a pro-rata percentage of the full Stock Purchase Price.
6.2 PAYMENT. For the Assets, Sierra Medical Management shall pay Group
the Assets Purchase Price at Closing in the form of immediately available funds
transferred by wire to an account at a financial institution designated by
Group. For the Stock, Sierra Medical Management shall cause the Successor
Physician to pay Prospect Medical Group the Stock Purchase Price.
6.3 CLOSING. The transactions contemplated by this Agreement are to close
forty-five (45) days after the date of either the Assets Exercise Notice or the
Stock Exercise Notice, as the case may be ("Closing"), unless extended by Sierra
Medical Management.
7. ADDITIONAL OBLIGATIONS OF GROUP.
7.1 AFFIRMATIVE COVENANTS. To the extent that Group and Prospect Medical
Group participate in the Practice and own, control, or use the Assets, Group and
Prospect Medical Group shall:
(a) CONDUCT OF PRACTICE. Conduct Group's business efficiently and
without voluntary interruption and preserve all rights, privileges, and
franchises held by Group and Group's Practice, including the maintenance of all
contracts, copyrights, trademarks, licenses, registrations, etc.;
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(b) USE. Make use of the Assets with reasonable care to prevent
diminution in value of the Practice and the Assets, and keep the Assets in good
repair;
(c) VALUE. Perform all acts necessary to maintain, preserve, and
protect the Assets, and maintain fire and extended coverage insurance on the
Assets in the amounts and under policies acceptable to Sierra Medical
Management, and provide Sierra Medical Management with the original policies and
certificates at Sierra Medical Management's request;
(d) FINANCING STATEMENTS. Execute and deliver to Sierra Medical
Management all financing statements and other documents that Sierra Medical
Management requests, in order to put third parties on notice of this Agreement;
(e) ACCESS. Permit Sierra Medical Management, its representatives,
and its agents to inspect the Assets at any time, and to make copies of records
pertaining to the Assets, at reasonable times at Sierra Medical Management's
request;
(f) REPORTS. Furnish Sierra Medical Management any reports relating
to the Assets at Sierra Medical Management's request;
(g) DEFAULTS. Notify Sierra Medical Management promptly in writing
of any default, potential default, or any development that might have a material
adverse effect on the Assets, the Stock, or the Practice, or of any litigation
that may have a material adverse effect on the Practice;
(h) EXPENSES. Pay all expenses, including attorneys' fees, incurred
by Sierra Medical Management in the perfection, preservation, realization,
enforcement, and exercise of its rights under this Agreement, including but not
limited to accounting, correspondence, collection efforts, filing, recording,
and recordkeeping;
(i) INDEMNITY. Indemnify Sierra Medical Management against losses,
liabilities, or damages, costs and expenses of any kind, including reasonable
attorneys' fees, caused to Sierra Medical Management by reason of its interest
in the Assets and/or the Stock;
(j) TAXES. Pay promptly when due all taxes and assessments owed in
connection with the Assets and the Stock; and
(k) DELIVERY OF CERTIFICATES. Deliver to Sierra Medical Management
all certificates heretofore issued representing all of the shares of Group's
capital stock held of record or beneficially owned by Prospect Medical Group,
and each certificate hereafter issued representing any share of Group's capital
stock, with each certificate endorsed in blank for transfer. Notwithstanding the
foregoing, this Section 7.1(k) shall only apply in the event that the Amended
and Restated Credit Succession Agreement is no longer in effect.
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7.2 NEGATIVE COVENANTS. Except as required under the Amended and Restated
Credit Succession Agreement, without the prior written consent of Sierra Medical
Management, Group and Prospect Medical Group shall not:
(a) TRANSFER. Sell, lease, transfer, or otherwise dispose of the
Assets or Stock;
(b) DEBT. Incur, guarantee, assume or otherwise become liable for
any borrowing or increase any existing indebtedness; or discharge or cancel any
debt owed to Group;
(c) NO FURTHER HYPOTHECATION. Pledge, hypothecate, encumber, redeem
or dispose of the Assets, the Stock or any interest therein until all of Group's
obligations under this Agreement have been fully satisfied or the Assets or the
Stock has been released;
(d) LOCATION. Move the Assets from their present locations without
the prior written consent of Sierra Medical Management;
(e) USE. Use the Assets or the Stock for any unlawful purpose or in
any way that would void any effective insurance;
(f) NAME AND LOCATION CHANGES. Change the name or place of business
or use a fictitious business name without the prior express consent of Sierra
Medical Management; and
(g) ISSUANCE OF STOCK; CHANGE IN OWNERSHIP; MERGERS AND
CONSOLIDATION. Permit any issuance of Stock, other equity, or debt; permit any
change in the composition or respective percentage ownership of Group; permit
Group to be merged, consolidated or otherwise reorganized with or into any other
corporation, partnership, trade, business, or the like; amend or otherwise
modify its articles of incorporation and bylaws; dissolve; or enter into any
agreement with any person to do any of the foregoing.
8. CONFIDENTIALITY. The parties shall use all good faith efforts to keep the
contents of this Agreement and all other aspects of the negotiations preceding
execution of this Agreement confidential. Unless required by law, Group,
Prospect Medical Group, and Sierra Medical Management shall not disclose the
contents of this Agreement or the negotiations leading to this Agreement to
third parties other than Imperial without the prior written consent of the other
party. Sierra Medical Management shall ensure that all of the assignees
likewise comply with the obligations of confidentiality imposed by this Section,
except that Sierra Medical Management and the assignees may disclose the
contents of such to their respective agents, representatives, contractors, and
employees to the extent necessary to exercise their respective rights or perform
their respective obligations hereunder.
9. GENERAL.
9.1 COMPLIANCE WITH LAW. Group and Prospect Medical Group shall comply
with all applicable requirements of the Joint Commission on the Accreditation of
Healthcare
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Organizations, the Medicare and Medicaid programs, applicable state law and
regulations, and other licensing and accreditation authorities.
9.2 RELATIONSHIP OF PARTIES. In the exercise of their respective rights
and the performance of their respective obligations under this Agreement, Group
and Prospect Medical Group on the one hand and Sierra Medical Management (or any
assignee) on the other hand are acting in the capacity of the grantor and
grantee of an option to purchase all or a portion of the Assets and/or Stock,
and nothing in this Agreement is intended nor shall be construed to create
between the parties an employer/employee relationship, a partnership or joint
venture relationship or a landlord/tenant relationship.
9.3 ASSIGNMENT. All of Sierra Medical Management' rights and duties under
this Agreement may be assigned or delegated by Sierra Medical Management or
Prospect Medical Holdings, including but not limited to an assignment to
Imperial; provided, however, that Sierra Medical Management or Prospect Medical
Holdings, Inc., shall give written notice of any such assignment to the Group
and Prospect Medical Group within a reasonable time period. Notwithstanding any
other provision of this Agreement, neither this Agreement nor the rights and
duties of this Agreement may be assigned or delegated by Group or Prospect
Medical Group. This Agreement binds the successors, heirs, and authorized
assignees of the parties.
9.4 ENTIRE AGREEMENT. Except as expressly provided in this Agreement to
the contrary, this Agreement, including its incorporated exhibits, constitutes
the entire agreement between the parties with respect to the Option, and
supersedes all other and prior agreements on the same subject, whether written
or oral, and contains all of the covenants and agreements between the parties
with respect to the subject matter hereof. Except as expressly provided in this
Agreement to the contrary, each party to this Agreement acknowledges that no
representations, inducements, promises, or agreements, orally or otherwise, have
been made by any other party hereto, or by anyone acting on behalf of any party
hereto, that are not embodied herein, and that no agreement, statement, or
promise not contained in this Agreement shall be valid or binding. This
Agreement incorporates the Original Agreement, together with all amendments
previously made and to be made to the date of execution hereof, and is deemed to
have been effective as of the date of the Original Agreement.
9.5 COUNTERPARTS. This Agreement, and any amendments hereto, may be
executed in counterparts, each of which shall constitute an original document,
but which together shall constitute one and the same instrument.
9.6 HEADINGS. The section headings contained in this Agreement are
inserted for convenience only and shall not affect in any way the meaning or
interpretation of this Agreement.
9.7 NOTICES. Any notices required or permitted to be given hereunder by
any party to another shall be in writing and shall be deemed delivered upon
personal delivery, twenty-four (24) hours following deposit with a courier for
overnight delivery or seventy two (72) hours
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following deposit in the U.S. Mail, registered or certified mail, postage
prepaid, return-receipt requested, addressed to the parties at the following
addresses or to such other addresses as the parties may specify in writing:
If to Group or Pegasus Medical Group, Inc.
Prospect Medical Group: c/o Prospect Medical Group, Inc.
00000 Xxxxx Xxxxx Xxxxxxxxx
Xxxxx Xxxxx, Xxxxxxxxxx 00000
Attention: Xxxxx X. Xxxxxx, M.D.
If to Sierra Medical Management: Sierra Medical Management, Inc.
x/x Xxxxxxxx Xxxxxxx Xxxxxxxx
00000 Xxxxx Xxxxx Xxxxxxxxx
Xxxxx Xxxxx, Xxxxxxxxxx 00000
Attention: Xxxxx X. Xxxxxx, M.D.
9.8 GOVERNING LAW. This Agreement shall be governed by and construed in
accordance with the laws of the State of California.
9.9 AMENDMENT. This Agreement may be amended at any time by agreement of
the parties, provided that any amendment shall be in writing and executed by all
parties.
9.10 SEVERABILITY. If any provision of this Agreement is held by a court
of competent jurisdiction to be invalid or unenforceable, the remaining
provisions will nevertheless continue in full force and effect, unless such
invalidity or unenforceability would defeat an essential business purpose of
this Agreement.
9.11 FEES AND EXPENSES. Group, Prospect Medical Group, and Sierra Medical
Management each shall bear their own expenses, including, without limitation,
attorneys' and accountants' fees, incurred in connection with the preparation of
this Agreement and the transactions contemplated hereby.
9.12 EXHIBITS AND SCHEDULES. All exhibits and schedules attached to this
Agreement are incorporated herein by this reference and all references herein to
"Agreement" shall mean this Agreement together with all such exhibits and
schedules.
9.13 TIME OF ESSENCE. Time is expressly made of the essence of this
Agreement and each and every provision hereof of which time of performance is a
factor.
9.14 DISPUTE RESOLUTION. In the event the parties hereto are unable to
resolve any dispute in connection with this Agreement, the parties may mutually
agree to arbitrate as set forth below.
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(a) There shall be one arbitrator. If the parties shall fail to
select a mutually acceptable arbitrator within ten (10) days after the demand
for arbitration is mailed, then the parties stipulate to arbitration before a
retired judge sitting on the Los Angeles, California, Judicial Arbitration
Mediation Services (JAMS) panel.
(b) The substantive law of the State of California shall be applied
by the arbitrator.
(c) Arbitration shall take place in Los Angeles, California, unless
Group and a majority of the other parties otherwise agree. As soon as
reasonably practicable, a hearing with respect to the dispute or matter to be
resolved shall be conducted by the arbitrator. As soon as reasonably
practicable thereafter, the arbitrator shall arrive at a final decision, which
shall be reduced to writing, signed by the arbitrator and mailed to each of the
parties and their legal counsel.
(d) All decisions of the arbitrator shall be final, binding and
conclusive on the parties and shall constitute the only method of resolving
disputes or matters subject to arbitration pursuant to this Agreement. The
arbitrator or a court of appropriate jurisdiction may issue a writ of execution
to enforce the arbitrator's judgment. Judgment may be entered upon such a
decision in accordance with applicable law in any court having jurisdiction
thereof.
(e) Notwithstanding the foregoing, because time is of the essence of
this Agreement, the parties specifically reserve the right to seek a judicial
temporary restraining order, preliminary injunction, or other similar short term
equitable relief, and grant the arbitrator the right to make a final
determination of the parties' rights, including whether to make permanent or
dissolve such court order.
(f) Notwithstanding the foregoing, any and all arbitration
proceedings are conditional upon such proceedings being covered within the
parties' respective risk insurance policies.
9.15 ATTORNEYS' FEES. Should any of the parties hereto institute any
action or procedure to enforce this Agreement or any provision hereof (including
without limitation, arbitration), or for damages by reason of any alleged breach
of this Agreement or of any provision hereof, or for a declaration of rights
hereunder (including, without limitation, by means of arbitration), the
prevailing party in any such action or proceeding shall be entitled to receive
from the other party all costs and expenses, including without limitation
reasonable attorneys' fees, incurred by the prevailing party in connection with
such action or proceeding.
9.16 FURTHER ASSURANCES. The parties shall take such actions and execute
and deliver such further documentation as may reasonably be required in order to
give effect to the transactions contemplated by this Agreement and the
intentions of the parties hereto.
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9.17 RIGHTS CUMULATIVE. The various rights and remedies herein granted to
the respective parties hereto shall be cumulative and in addition to any other
rights any such party may be entitled to under law. The exercise of one or more
rights or remedies by a party shall not impair the right of such party to
exercise any other right or remedy, at law or equity.
9.18 CONFLICTS. In the event that any provision contained herein shall
conflict with the Amended and Restated Credit Succession Agreement, the
provision of the Amended and Restated Credit Succession Agreement shall control
and such conflicting provision herein shall be of no further force or effect.
IN WITNESS WHEREOF, Group, Prospect Medical Group, and Sierra Medical
Management execute this Agreement by their duly authorized representatives as
set forth below.
"SIERRA MEDICAL MANAGEMENT, INC." "GROUP"
SIERRA MEDICAL MANAGEMENT, INC., PEGASUS MEDICAL GROUP, INC.,
a Delaware corporation a California professional corporation
By: Xxxxx X. Xxxxxx, M.D. By: Xxxxx X. Xxxxxx, M.D.
--------------------------- --------------------------------
Xxxxx X. Xxxxxx, M.D., Xxxxx X. Xxxxxx, M.D.,
Chief Executive Officer President
"PROSPECT MEDICAL GROUP"
Prospect Medical Group, Inc.,
a California professional corporation
By: Xxxxx X. Xxxxxx, M.D.
--------------------------------
Xxxxx X. Xxxxxx, M.D.,
Vice President
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EXHIBIT "A"
ASSETS
1. All contracts and agreements, including all payor contracts, vendor
contracts, loan agreements, leases and subleases.
2. All risk pool or other incentive arrangement payments relating to the
Practice, including hospital incentive funds, and any capitation advances to
physicians.
3. All cash, bank balances, monies in possession of any bank, other cash
items, marketable securities of Group and prepaid deposits relating to the
Practice.
4. All accounts receivable of Group ("Accounts Receivable") relating to
the Practice. As used herein, "Accounts Receivable" shall include all rights to
payment for goods or services rendered, whether or not yet earned by
performance, all other obligations and receivables from others no matter how
evidenced relating to the Practice, including purchase orders, notes,
instruments, drafts and acceptances and all guarantees of the foregoing and
security therefor, relating to the Practice.
5. All supplies and inventory relating to the Practice.
6. All patient records, files and X-rays relating to the Practice.
7. All of Group's goodwill relating to the Practice, which may include
location goodwill, name recognition goodwill, patient allegiance, etc.
8. All business, financial and accounting records and books of account
relating to the Practice, exclusive of Group's Articles, Bylaws, corporate
minutes, stock shares and general ledger.
9. Group's right to reimbursement for all professional services provided
to managed care and fee-for-service patients relating to the Practice.
10. All of Group's furniture, fixtures, leasehold improvements, machinery,
equipment, inventories, supplies and other like tangible personal property used
in the Practice.
11. All trademarks, trade names, fictitious business names, copyrights,
logos, licenses, ownership interests in telephone numbers at the Practice, or
related items of Group that in any way pertain to the Practice.
EXHIBIT "B"
STOCK
Stock has been pledged to Imperial Bank, a California banking corporation
("Bank") pursuant to the terms of that certain Joinder Agreement, dated as of
even date herewith, by and among Sierra Medical Management, Inc., a Delaware
corporation, Pegasus Medical Group, Inc., a California professional corporation,
Xxxxx XxXxxxxx, M.D., Prospect Medical Holdings, Inc., a Delaware corporation
("Borrower"), Prospect Medical Systems, Inc., a Delaware corporation
("Systems"), Prospect Medical Group, Inc., a California professional corporation
("Group"), Santa Xxx/Tustin Physicians Group, Inc., a California professional
corporation ("Santa Xxx"), Pegasus Medical Group, Inc., a California
professional corporation and Bank relating to the Amended and Restated Credit
Succession Agreement, dated as of July 14, 1997, by and among Bank, Borrower,
Systems, Group, Santa Xxx and Xxxxx XxXxxxxx, M.D.
