Exhibit 10.1

AMENDED AND RESTATED FORBEARANCE AGREEMENT

THIS AMENDED AND RESTATED FORBEARANCE AGREEMENT (as the same may from time to time be amended, restated or otherwise modified, this
"Agreement") is made as of April 10, 2008 and entered into by and among Prospect Medical Holdings, Inc.
("Holdings") and 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 "First Lien Administrative Agent"), and the lenders party hereto (collectively, the "First Lien
Lenders").

RECITALS

WHEREAS, the Borrowers, the First Lien Lenders and the First Lien Administrative Agent have entered into that certain First Lien Credit
Agreement dated as of August 8, 2007 (as amended, restated, supplemented or otherwise modified, the "First Lien Credit Agreement"), pursuant to
which the First Lien Lenders have agreed to make the Loans (such term, together with each other capitalized term used in this Agreement but not defined in this Agreement, shall be defined in
accordance with the First Lien Credit Agreement) and other extensions of credit, all upon the terms and conditions set forth in the First Lien Credit Agreement;

WHEREAS,
as of the date hereof, certain Defaults and Events of Default exist under the First Lien Credit Agreement and, which as a result of such Defaults and Events of Default, gave
rise to the First Lien Lenders and the First Lien Administrative Agent having the right, among other things, to declare the commitment of each First Lien Lender to make Loans to be terminated and to
exercise any and all other remedies available to the First Lien Lenders under the First Lien Credit Agreement;

WHEREAS,
the Borrowers, the First Lien Lenders and the First Lien Administrative Agent entered into a Forbearance Agreement on February 13, 2008 (as amended, the
"February 13 Forbearance Agreement") pursuant to which the First Lien Lenders and the First Lien Administrative Agent agreed, subject to the
terms and conditions set forth therein, to forbear from exercising such rights for a limited period of time provided that the Borrowers satisfied certain conditions set forth in the February 13
Forbearance Agreement;

WHEREAS,
the Borrowers have requested that the First Lien Lenders and the First Lien Administrative Agent amend and restate the February 13 Forbearance Agreement and thereby to
continue to forbear from exercising such rights for a limited period of time; and

WHEREAS,
the First Lien Lenders and the First Lien Administrative Agent are willing to amend and restate the February 13 Forbearance Agreement and thereby to forbear from
exercising such rights for a limited period of time;

NOW,
THEREFORE, in consideration of the foregoing, the parties agree as follows:

ARTICLE I. FORBEARANCE

Section 1.1Outstanding Indebtedness.    Each Borrower acknowledges and confirms (a) that Exhibit Ahereto sets forth, as of
the date hereof, the aggregate principal amount of all outstanding Loans and the issued and outstanding
Letters of Credit, and (b) that such amounts are not subject to any defense, counterclaim, recoupment or offset of any kind.

Section 1.2Existing Defaults.    Each Borrower acknowledges that the Borrowers have failed to comply with
the provisions of the First Lien Credit Agreement as set forth under the heading "Current Events of Defaults" onExhibit Bhereto (collectively,
the "Current Events of Default"). Each Borrower further acknowledges (and has so advised the First Lien Administrative Agent) that it anticipates that
it may fail during the Forbearance Period (as defined herein) to comply with the provisions of the First Lien Credit Agreement as set forth under the heading "Anticipated Events of Default" on
Exhibit B

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hereto
(collectively, the "Anticipated Events of Default" and together with the Current Events of Default, the "Existing Events
of Default").

Section 1.3Continuing Defaults.With respect to each of the Existing Events of Default, each Borrower
acknowledges that (a) such Existing Event of Default is continuing and has not been waived by virtue of any previous actions (or failure to act) by the First Lien Administrative Agent or the
First Lien Lenders through any course of conduct or course of dealing or otherwise, (b) as a result of the existence of such Existing Event of Default, the First Lien Lenders and the First Lien
Administrative Agent, pursuant to Section 8.02 of the First Lien Credit Agreement and the other Loan Documents, have the right to, among other things, (i) terminate the obligations and
any commitment of each First Lien Lender to make any further Loans and/or L/C Credit Extensions, (ii) accelerate the maturity of all of the Loans and all of the other Obligations, and
(iii) decline to make any further Loans and/or L/C Credit Extensions.

Section 1.4Forbearance and Forbearance Period.



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ARTICLE II. OTHER AGREEMENTS

Section 2.1Revolving Loans.During the Forbearance Period, the Borrowers agree that they will not
request any Credit Extension.

Section 2.2Consultant Matters.Further to their obligations under Sections 6.10 and 10.04 of the
First Lien Credit Agreement, the Borrowers and their Subsidiaries (a) acknowledge and agree to the First Lien Administrative Agent's continued retention of Alvarez & Marsal as
third-party consultants hired on behalf of the First Lien Lenders (the "Consultant"), (b) acknowledge and agree that they will be responsible for
the payment of all fees and expenses of such Consultant, (c) agree to fully cooperate with such Consultant and allow such Consultant to: visit and inspect any of the properties of the Borrowers
and their Subsidiaries; examine corporate, financial and operating records of the Borrowers and their Subsidiaries; make copies thereof or abstracts therefrom; and discuss the affairs, finances and
accounts of the Borrowers and their Subsidiaries with their respective directors, officers, and independent public accountants, (d) consistent with the February 13 Forbearance Agreement,
shall continue to provide on a bi-weekly basis to the Consultant (to be forwarded to the First Lien Administrative Agent and the First Lien Lenders) on a rolling basis a
thirteen-week financial (cash-flow) budget (i.e., schedule of anticipated
revenue and expenditures) and shall, when the Borrowers update such budget, also provide to the Consultant (to be forwarded to the First Lien Administrative Agent and the First Lien Lenders) a
schedule that shows a projected versus actual comparison of the items set forth in the budget over the course of (i) the preceding two weeks; and (ii) the period beginning on
February 18, 2008, and (e) within 2 Business Days' of each budget delivered in accordance with the foregoingSection 2.2(d),
participate in a conference call with the First Lien Lenders to discuss such budget and any variances contained therein.

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Section 2.3Modification of Maturity Date.In the event that the Borrowers, the First Lien Lenders and
the Second Lien Lenders do not reach a mutually acceptable waiver and amendment with respect to the Existing Events of Default by the expiration or termination of the Forbearance Period (as such
Forbearance Period may be extended by the Required Lenders under each of the First Lien Credit Agreement and the Second Lien Credit Agreement), the Maturity Date under the First Lien Credit Agreement
shall be June 30, 2008.

Section 2.4Amendments to First Lien Credit Agreement.The First Lien Administrative Agent, the First
Lien Lenders and the Borrowers agree to amend, effective as of the date of this Agreement, the First Lien Credit Agreement by:



Applicable RatePricing
Level

Consolidated Leverage Ratio

Eurodollar Rate and
Letter of Credit Fees

Base Rate1

Less than 3.00:1.00


5.00
%

4.00
%2

Greater than or equal to 3.00:1.00 but less than 3.25:1.00


5.25
%

4.25
%3

Greater than or equal to 3.25:1.00 but less than 3.50:1.00


5.50
%

4.50
%4

Greater than or equal to 3.50 but less than 3.75:1.00


5.75
%

4.75
%5

Greater than or equal to 3.75:1.00


7.50
%

6.50
%




Section 2.5Repayment from Tax Refunds.During the Forbearance Period, the Borrowers shall prepay the
Term Loans under the First Lien Credit Agreement in an amount equal to one hundred percent (100%) of any tax refunds (net of reasonable and customary expenses associated therewith in

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an
aggregate amount not to exceed $25,000) received by the Borrowers or any Subsidiary thereof within one (1) Business Day of receipt of any such refund.

ARTICLE III. CONDITIONS TO EFFECTIVENESS

Section 3.1Conditions Precedent.This Agreement shall become effective upon the satisfaction of each of
the following conditions:



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ARTICLE IV. MISCELLANEOUS

Section 4.1Representations and Warranties.Each Loan Party hereby represents and warrants to the First
Lien Administrative Agent and the First Lien Lenders that (a) each Loan Party has the legal power and authority to execute and deliver this Agreement; (b) the officers of each Loan Party
executing this Agreement have been duly authorized to execute and deliver the same and bind each Loan Party with respect to the provisions hereof; (c) the execution and delivery hereof by each
Loan Party and the performance and observance by each Loan Party of the provisions hereof do not violate or conflict with any organizational document of any Loan Party or any law applicable to any
Loan Party or result in a breach of any provision of or constitute a default under any other agreement, instrument or document binding upon or enforceable against any Loan Party; (d) except
with respect to the Existing Events of Default, no Default or Event of Default exists under the First Lien Credit Agreement, nor will any occur immediately after the execution and delivery of this
Agreement or by the performance or observance of any provision hereof; (e) no Loan Party is aware of any claim or offset against, or defense or counterclaim to, any Loan Party's obligations or
liabilities under the First Lien Credit Agreement or any other Loan Document; (f) this Agreement and each document executed by each Loan Party in connection herewith (including, without
limitation, the Fee Letter) constitute valid and binding obligations of the applicable Loan Party in every respect, enforceable in accordance with their terms; and (g) no Loan Party has
received a notice of default of any kind from any material account debtor or any counterparty to a Material Contract and no material account debtor or counterparty to a Material Contract has asserted
any right of set-off, deduction or counterclaim with respect to any account or such Material Contract, respectively.

Section 4.2Release.Each Loan Party hereby waives and releases the First Lien Administrative Agent and
the First Lien Lenders 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 any Loan Party may have as of the date of this Agreement based upon, relating to, or arising out of the Obligations and
related transactions in any way. Each Loan Party 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:



Notwithstanding
the foregoing, thisSection 4.2shall not constitute a release of the obligations of the First Lien Administrative Agent or any
First 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.

Section 4.3Covenant Not to Sue.Each Loan Party, on behalf of itself and its successors, assigns, and
other legal representatives, hereby absolutely, unconditionally and irrevocably, covenants and agrees with and in favor of each Releasee that it will not sue (at law, in equity, in any regulatory

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proceeding
or otherwise) any Releasee on the basis of any claim released, remised and discharged by such Loan Party pursuant toSection 4.2above. If any Loan Party or any of its successors, assigns or other legal representations violates the foregoing covenant, such Loan Party, for itself and its successors, assigns and legal
representatives, agrees to pay, in addition to such other damages as any Releasee may sustain as a result of such violation, all attorneys' fees and costs incurred by any Releasee as a result of such
violation.

Section 4.4Loan Documents Unaffected.Except as otherwise specifically provided herein, all provisions
of the First Lien Credit Agreement (including without limitation, Section 10.07 thereof) and the other Loan Documents (including, without limitation, the Intercreditor Agreement) shall remain
in full force and effect and be unaffected hereby. The parties hereto acknowledge and agree that this Agreement constitutes a "Loan Document" under the terms of the First Lien Credit Agreement.

Section 4.5Guarantor Acknowledgement.Each Guarantor, by signing this Agreement:



Section 4.6No Other Promises or Inducements.There are no promises or inducements that have been made to
any party hereto to cause such party to enter into this Agreement other than those that are set forth in this Agreement. This Agreement has been entered into by each Borrower and each Guarantor
freely, voluntarily, with full knowledge, and without duress, and, in executing this Agreement, neither any Borrower nor any Guarantor is relying on any other representations, either written or oral,
express or implied, made to any Borrower or any Guarantor by the First Lien Administrative Agent. Each Borrower and each Guarantor agrees that the consideration received by the Borrowers under this
Agreement has been actual and adequate.

Section 4.7No Course of Dealing.Each Loan Party acknowledges and agrees that, (a) this Agreement
is not intended to, nor shall it, establish any course of dealing between the Loan Parties, the First Lien Administrative Agent and the First Lien Lenders that is inconsistent with the express terms
of the First Lien Credit Agreement or any other Loan Document, (b) notwithstanding any course of dealing between the Loan Parties, the First Lien Administrative Agent and the First Lien Lenders
prior to the date hereof, except as set forth herein, the First Lien Lenders shall not be obligated to make any Loan, except in accordance with the terms and conditions of this Agreement and the First
Lien Credit Agreement, and (c) except with respect to the limited forbearance granted herein

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specifically
relating to the Existing Events of Default, neither the First Lien Administrative Agent nor any First Lien Lender shall be under any obligation to forbear from exercising any of its
rights or remedies upon the occurrence of any Default or Event of Default. Nothing herein modifies the agreements among the First Lien Administrative Agent and the First Lien Lenders with respect to
the exercise of their respective rights and remedies under the terms of the First Lien Credit Agreement.

Section 4.8No Waiver.Each Loan Party acknowledges and agrees that (a) except as expressly
provided herein, this Agreement shall not operate as a waiver of any right, power or remedy of the First Lien Administrative Agent or the First Lien Lenders under the First Lien Credit Agreement or
any Loan Document, nor shall it constitute a continuing waiver at any time, (b) the First Lien Lenders shall not have any obligation to extend the term of the Forbearance Period,
(c) nothing herein shall be deemed to constitute a waiver of any Default or Event of Default, including the Existing Events of Default, and, except as expressly provided herein, nothing herein
shall in any way prejudice the rights and remedies of the First Lien Administrative Agent or the First Lien Lenders under the First Lien Credit Agreement, any Loan Document or applicable law. In
addition, the First Lien Administrative Agent shall have the right to waive any condition or conditions set forth in this Agreement, the First Lien Credit Agreement or any Loan Document, in its sole
discretion, and any such waiver shall not prejudice, waive or reduce any other right or remedy that the First Lien Administrative Agent may have against any Loan Party.

Section 4.9Survival.All representations, warranties, covenants, agreements, releases and waivers made
by or on behalf of any Loan Party under this Agreement shall survive and continue after the expiration or termination of the Forbearance Period.

Section 4.10No Waiver of Rights.No waiver shall be deemed to be made by any party hereunder of any of
its rights hereunder unless the same shall be in writing signed on behalf of such party.

Section 4.11Governing Law.THIS AGREEMENT SHALL BE GOVERNED BY, AND CONSTRUED IN
ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK.

Section 4.12Entire Agreement.This Agreement (together with the Fee Letter and the side letter
referenced in Section 1.4(a)(vi)) sets forth the entire agreement and understanding among the parties as to the subject matter hereof and merges and supersedes all prior discussions,
agreements, and undertakings of every kind and nature among them with respect to the subject matter hereof.

Section 4.13Counterparts.This Agreement may be executed in any number of counterparts, and by the
parties hereto on the same or separate counterparts and by facsimile signature, and each such counterpart, when executed and delivered, shall be deemed to be an original, but all such counterparts
shall together constitute but one and the same Agreement.

Section 4.14Severability Of Provisions; Captions; Attachments.Wherever possible each provision of this
Agreement shall be interpreted in such manner as to be effective and valid under applicable law. Any provision of this Agreement that is prohibited or unenforceable in any jurisdiction shall, as to
such jurisdiction, be ineffective to the extent of such prohibition or unenforceability without invalidating the remaining provisions hereof or affecting the validity or enforceability of such
provision in any other jurisdiction. The captions to Sections and subsections herein are inserted for convenience only and shall be ignored in interpreting the provisions of this Agreement. Each
schedule or exhibit attached to this Agreement shall be incorporated herein and shall be deemed to be a part hereof.

Section 4.15JURY TRIAL WAIVER.EACH OF THE UNDERSIGNED, TO THE EXTENT PERMITTED BY LAW, HEREBY WAIVE ANY
RIGHT TO HAVE A JURY PARTICIPATE IN RESOLVING ANY DISPUTE WHETHER SOUNDING IN CONTRACT, TORT, OR OTHERWISE, AMONG THEM, OR ANY OF THEM, ARISING OUT OF, IN CONNECTION WITH, RELATED TO OR INCIDENTAL TO
THE RELATIONSHIP ESTABLISHED AMONG THEM IN

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CONNECTION
WITH THIS AGREEMENT OR ANY DOCUMENT EXECUTED OR DELIVERED IN CONNECTION HEREWITH OR THE TRANSACTIONS RELATED THERETO.

[REMAINDER
OF PAGE INTENTIONALLY LEFT BLANK]

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IN
WITNESS WHEREOF, the parties hereto have executed this Agreement as of the date referenced in the first paragraph of this Agreement.

PROSPECT MEDICAL HOLDINGS, INC.By:Name:Title:PROSPECT MEDICAL GROUP, INC.By:Name:Title:


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BANK OF AMERICA, N.A.,as First Lien Administrative AgentBy:Name:Title:


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BANK OF AMERICA, N.A.,as a First Lien Lender,
L/C Issuer and Swing Line LenderBy:Name:Title:


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EXHIBIT A  OUTSTANDING INDEBTEDNESS

As of April 7, 2008:First Lien Term Facility

$
91,250,000.00First Lien Revolving Facility

$
0.00Swing Line Facility

$
0.00Letter of Credit Facility

$
250,000.00

(outstanding and undrawn)Total:

$
91,500,000.00


A-1

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EXISTING EVENTS OF DEFAULT

CURRENT EVENTS OF DEFAULT

1.     Failure
of the Borrowers to deliver by January 28, 2008 to the First Lien Administrative Agent and the First Lien Lenders the financial statements and other
reports and information required under Section 6.01(a) of the First Lien Credit Agreement (Event of Default under Section 8.01(b) of the First Lien Credit Agreement).

2.     Failure
of the Borrowers to deliver by January 28, 2008 to the First Lien Administrative Agent and the First Lien Lenders the accountants certificate and the
Compliance Certificate required under Sections 6.02(a) and (b) of the First Lien Credit Agreement (Events of Default under Section 8.01(b) of the First Lien Credit Agreement).

3.     Failure
of the Borrowers to deliver by February 14, 2008 to the First Lien Administrative Agent and the First Lien Lenders the financial statements and other
reports and information required under Section 6.01(b) of the First Lien Credit Agreement (Event of Default under Section 8.01(b) of the First Lien Credit Agreement).

4.     Failure
of the Borrowers to deliver by February 14, 2008 to the First Lien Administrative Agent and the First Lien Lenders the Compliance Certificate required
under Sections 6.02(b) of the First Lien Credit Agreement (Events of Default under Section 8.01(b) of the First Lien Credit Agreement).

5.     Failure
of the Borrowers to comply with the financial covenant set forth in Section 7.11(a) of the First Lien Credit Agreement (Events of Default under
Section 8.01(b) of the First Lien Credit Agreement) for the fiscal year ended September 30, 2007.

6.     Failure
of the Borrowers to comply with the financial covenants set forth in Section 7.11(a) and Section 7.11(b) of the First Lien Credit Agreement (Events
of Default under Section 8.01(b) of the First Lien Credit Agreement) for the fiscal quarter ended December 31, 2007.

ANTICIPATED EVENTS OF DEFAULT

1.     Failure
of the Borrowers to comply with the financial covenants set forth in Section 7.11(a) and Section 7.11(b) of the First Lien Credit Agreement (Events
of Default under Section 8.01(b) of the First Lien Credit Agreement) for the fiscal quarter ended March 31, 2008.

B-1

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