Bank of America, N.A. WA1-501-17-32 Seattle, WA 98104

Exhibit 10.12

Bank of America, N.A.

WA1-501-17-32

000 Xxxxx Xxxxxx, Xxxxx 00

Xxxxxxx, XX  00000

March 6, 2009

Prospect Medical Group, Inc.

0000 Xxxx 00xx Xxxxxx, Xxxxx 000

Xxxxx Xxx, XX 00000

Re: Fifth Amendment to Letter Agreement Regarding Divestiture Plan and Consent (this “Agreement”)

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”).  Reference is also hereby made to that certain Second Lien Credit Agreement dated as of August 8, 2007 (as amended, restated, supplemented or otherwise modified, the “Second Lien Credit Agreement”), pursuant to which the Second Lien Lenders have agreed to make the Loans and other extensions of credit, all upon the terms and conditions set forth in the Second Lien Credit Agreement.  Terms not otherwise defined in this Agreement shall have the meaning assigned thereto in the Divestiture Letter Agreement and the Second Lien Credit Agreement, as applicable.

1. Fourth Amendment to 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 March 6, 2009 (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 March 12, 2009 (the “Extension Deadline”).  During this additional extension period, in addition to working on the sale of the ProMed Entities, it is expected that the parties will negotiate a term sheet setting forth the salient terms for an amendment to the Second Lien Credit Agreement.  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 Agreement.

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 March 12, 2009 on terms and conditions reasonably satisfactory to the Second Lien Administrative Agent and the Required Lenders.”

2. Consent by the Second Lien Lenders

Prospect Hospital Advisory Services, Inc., a Prospect subsidiary, presently owns a minority interest in Xxxxxxx Medical Center, Inc. (“Xxxxxxx”).  In connection with Xxxxxxx’x exit from current bankruptcy proceedings and as part of a plan of reorganization for Xxxxxxx, the Borrowers placed certain amounts with the U.S. Bankruptcy Court for the Central District of California, Los Angeles Division, in an attempt to purchase additional equity in Xxxxxxx.  Should the Borrowers prevail, the Borrowers’ resulting ownership interest could approach 70% or more.

Under the terms of the Credit Agreement, acquiring a majority interest in Xxxxxxx would immediately qualify Xxxxxxx as a “Subsidiary” of the Borrowers and would require joinder of Xxxxxxx to the Collateral Agreement and the Subsidiary Guaranty Agreement within a short period of time following such acquisition.

Accordingly, the Borrowers have requested that, in the event that any Borrower (or any Subsidiary or Subsidiaries thereof) acquires a majority interest in Xxxxxxx prior to the Extension Deadline, the Second Lien Administrative Agent and the Second Lien Lenders exclude Xxxxxxx as a “Subsidiary” under the Second Lien Credit Agreement until the expiration of the Extension Deadline.

Subject to the terms and conditions of this Agreement, the Second Lien Administrative Agent and the Second Lien Lenders hereby consent and agree that, should any Borrower (or any Subsidiary or Subsidiaries thereof), acquire a majority ownership interest in Xxxxxxx prior to the expiration of the Extension Deadline, Xxxxxxx shall not be deemed or considered a “Subsidiary” under the terms of the Second Lien Credit Agreement for any purpose until the expiration of the Extension Deadline.

This Agreement shall become effective as of March 6, 2009, upon (a) execution and delivery of this Agreement by the Borrowers, the Guarantors, the Second Lien Administrative Agent and the Required Lenders under the Second Lien Credit Agreement, (b) execution and delivery by the Borrowers, the Guarantors, the First Lien Administrative Agent and the “Required” Lenders under the First Lien Credit Agreement of an agreement substantially similar to this Agreement, and (c) payment of all professional fees and expenses of the Second Lien Administrative Agent and the Second Lien Lenders in connection with this Agreement and the transactions contemplated hereby and thereby (including all fees and expenses of Winston & Xxxxxx 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 and consent contained herein, all of the terms and provisions of the Divestiture Letter Agreement, the Second Lien Credit 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 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.  In addition, the Borrowers acknowledge and agree that, should the Borrowers (or any Subsidiary or Subsidiaries thereof) obtain majority ownership of Xxxxxxx and unless otherwise addressed prior to such date in accordance with the terms of the Second Lien Credit Agreement, upon the expiration of the Extension Deadline, the Borrowers shall be required to comply with, and Xxxxxxx shall be subject to, the terms of the Second Lien Credit Agreement and the other Loan Documents in all respects.

Each of the Guarantors, by their acknowledgment hereto, agree and consent to this Agreement, 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, 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 Agreement.

[Signature Pages Follow]

This Agreement 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 Agreement 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/ Xxxxxxx Xxxx
	Name:	Xxxxxxx Xxxx
	Title:	Assistant Vice President

[Signature Pages Continue]

Fifth Amendment to Second Lien Divestiture Letter Agreement and Consent

	FIELD POINT I, LTD., as a Second Lien Lender
	By:	/s/ Xxxxxxx Xxxxxxxx
	Name:	Xxxxxxx Xxxxxxxx
	Title:	Authorized Signatory

[Signature Pages Continue]

Fifth Amendment to Second Lien Divestiture Letter Agreement and Consent

	FIELD POINT II, LTD., as a Second Lien Lender
	By:	/s/ Xxxxxxx Xxxxxxxx
	Name:	Xxxxxxx Xxxxxxxx
	Title:	Authorized Signatory

[Signature Pages Continue]

Fifth Amendment to Second Lien Divestiture Letter Agreement and Consent

	GRAND CENTRAL ASSET TRUST, CMF SERIES, as a Second Lien Lender
	By:	/s/ Xxxxx Xxxxxx
	Name:	Xxxxx Xxxxxx
	Title:	Attorney-in-fact

[Signature Pages Continue]

Fifth Amendment to Second Lien Divestiture Letter Agreement and Consent

Accepted and Agreed:
PROSPECT MEDICAL HOLDINGS, INC.
By:	/s/ Xxxxxx X. Xxx
Name:	Xxxxxx X. Xxx
Title:	Chief Executive Officer
PROSPECT MEDICAL GROUP, INC.
By:	/s/ Xxxxxx X. Xxx
Name:	Xxxxxx X. Xxx
Title:	Senior Vice President

[Guarantor Signature Pages Follow]

Fifth Amendment to Second Lien Divestiture Letter Agreement and Consent

ALTA HOSPITALS SYSTEM, LLC, formerly known as PROSPECT HOSPITALS SYSTEM, LLC			NUESTRA FAMILIA MEDICAL GROUP, INC.
By:	/s/ Xxxxxx X. Xxx		By:	/s/ Xxxxxx X. Xxx
Name:	Xxxxxx X. Xxx		Name:	Xxxxxx X. Xxx
Title:	Chief Executive Officer		Title:	Vice President
PROMED HEALTH CARE ADMINISTRATORS PROMED HEALTH SERVICES COMPANY			PROSPECT ADVANTAGE NETWORK, INC. PINNACLE HEALTH RESOURCES PROSPECT HOSPITAL ADVISORY SERVICES, INC.
			By:	/s/ Xxxxxx X. Xxx
By:	/s/ Xxxxxx X. Xxx		Name:	Xxxxxx X. Xxx
Name:	Xxxxxx X. Xxx		Title:	President and Chief Executive Officer
Title:	Vice President
POMONA VALLEY MEDICAL GROUP, INC. UPLAND MEDICAL GROUP, A PROFESSIONAL MEDICAL CORPORATION			XXXXXX X. XXXXXX, solely in his capacity as Pledgor
By:	/s/ Xxxxxx X. Xxx
Name:	Xxxxxx X. Xxx			/s/ Xxxxxx X. Xxxxxx
Title:	Vice President

[Signature Pages Continue]

Fifth Amendment to Second Lien Divestiture Letter Agreement and Consent

ALTA LOS ANGELES HOSPITALS, INC. ALTA HOLLYWOOD HOSPITALS, INC.			PROSPECT MEDICAL SYSTEMS, INC.
			By:	/s/ Xxxxxx X. Xxx
By:	/s/ Xxxxx X. Xxxx		Name:	Xxxxxx X. Xxx
Name:	Xxxxx X. Xxxx		Title:	Chairman of the Board
Title:	Secretary
SANTA XXX/TUSTIN PHYSICIANS GROUP, INC. PROSPECT HEALTH SOURCE MEDICAL GROUP, INC. PROSPECT PROFESSIONAL CARE MEDICAL GROUP, INC. PROSPECT NWOC MEDICAL GROUP, INC. APAC MEDICAL GROUPS, INC. STARCARE MEDICAL GROUP, INC. GENESIS HEALTHCARE OF SOUTHERN CALIFORNIA, INC., A MEDICAL GROUP PROSPECT PHYSICIANS ASSOCIATES, INC.
By:	/s/ Xxxxxx X. Xxx
Name:	Xxxxxx X. Xxx
Title:	Senior Vice President

Fifth Amendment to Second Lien Divestiture Letter Agreement and Consent