**Exhibit10.8**

**COLLATERAL ASSIGNMENT OFPROMED ACQUISITION DOCUMENTS**

THIS COLLATERAL ASSIGNMENT OF PROMED ACQUISITIONDOCUMENTS (this “***Assignment***”)has been executed and delivered as of June 1, 2007, by and between [PROSPECTMEDICAL HOLDINGS, INC., a Delaware corporation (“***Holdings***”),and PROSPECT MEDICAL GROUP, INC., a California professional corporation] (withHoldings, collectively, “***Assignor***”),and BANK OF AMERICA, N.A., a national banking association, as administrativeagent (“***AdministrativeAgent***”), with reference to the following facts:

**RECITALS**

A.            Assignor is a party to certaindocuments pursuant to which, among other things, Assignor acquired or willacquire the stock and assets of Pomona Calley Medical Group, Inc., ProMedHealth Services Company, ProMed Health Care Administrators and Upland MedicalGroup (each a “***ProfessionalCorporation***” and collectively, the “***Professional Corporations***”),and provides management services to the Professional Corporation.

B.            Pursuant to that certain CreditAgreement, dated on or about the date hereof (as the same may be amended,restated, supplemented or otherwise modified from time to time, the “***Credit Agreement***”),Administrative Agent and the Lenders (as defined therein) have agreed to extendcredit and other financial accommodations to Assignor and/or certain ofAssignor’s affiliates, and Assignor and the other Loan Parties (as definedtherein and including, without limitation, the Professional Corporations) haveagreed to guarantee the payment and performance of all of the Obligations (asdefined therein) and to grant to Administrative Agent security interests in theCollateral (as defined therein) to secure payment and performance of all of theObligations.

C.            Assignor has agreed to execute anddeliver this Assignment to Administrative Agent in order to supplement theterms of the Credit Agreement and the Security Agreement (As defined in theCredit Agreement) with respect to the ProMed Acquisition Documents (ashereinafter defined).

D.            Assignor acknowledges that AdministrativeAgent and the Lenders would not enter into the Credit Agreement absent Assignor’sagreements hereunder.

**AGREEMENT**

In consideration of the premises and the mutualagreements herein set forth, Assignor and Administrative Agent hereby agree asfollows:

1.             *Defined Terms.*  All initially capitalized terms used but notdefined herein shall have the meanings assigned to such terms in the CreditAgreement.

2.             *Assignment.*  As additional security for the Obligations,Assignor hereby collaterally assigns and transfers to Administrative Agent, andacknowledges that, pursuant to the Security Agreement, Assignor has granted toAdministrative Agent a security interest in:

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2.1           *ProMedAcquisition Documents.*  All ofAssignor’s right, title and interest in and to the documents set forth on  *Exhibit A*attached hereto (collectively, the “***ProMed Acquisition Documents***”).

2.2           *Rightsand Remedies.*  All of therights, benefits, remedies, privileges and claims of Assignor with respect tothe ProMed Acquisition Documents (collectively, the “***Rights And Remedies***”),including, without limitation, (i) all rights to monies or payments owingto Assignor under the ProMed Acquisition Documents, and any and all securitytherefor and for all other obligations owing to Assignor thereunder, (ii) anyright that Assignor may have to indemnification under the ProMed AcquisitionDocuments, (iii) all Rights and Remedies of Assignor with respect to anybreach of the representations, warranties and covenants set forth in any of theProMed Acquisition Documents, and (iv) the proceeds thereof (the ProMedAcquisition Documents and the Rights and Remedies are collectively referred toherein as, the “***Collateral***”).

3.             *Right and RemediesGenerally.*  Prior to theoccurrence of an Event of Default under the Credit Agreement or any other LoanDocument (a “***Default***”),Assignor will enforce all of its Rights and Remedies diligently and in goodfaith.  Effective from and after theoccurrence of a Default, Assignor hereby irrevocably authorizes and empowersAdministrative Agent, in Administrative Agent’s sole discretion, to assert asAdministrative Agent may deem proper, either directly or on behalf of Assignor,any of the Rights and Remedies which Assignor may from time to time have underthe ProMed Acquisition Documents, and to receive and collect all damages,awards and other monies resulting therefrom and to apply the same on account ofany of the Obligations.

4.             *Termination.*  This Assignment shall continue in effectuntil all of the Obligations have been paid in full and the Credit Agreementhas been terminated in accordance with the terms thereof, at which timeAdministrative Agent shall release to the Assignor Administrative Agent’sinterests in the ProMed Acquisition Documents and the Rights and Remedies andthe other rights assigned to Administrative Agent hereby.

5.             *Further Assurances.*  At any time or from time to time, uponAdministrative Agent’s written request, Assignor will execute and deliver toAdministrative Agent such further documents and do such other acts and thingsas Administrative Agent may request in order to further effect the purposes ofthis Assignment or any schedule, amendment or supplement hereto, or a financingor continuation statement with respect hereto, in accordance with the laws ofany applicable jurisdictions.  Assignorhereby authorizes Administrative Agent to effect any such filing or recordingstatements (or amendments thereto) without the signature of Assignor, andAdministrative Agent’s costs and expenses with respect thereto shall be part ofthe Obligations and shall be payable by Assignor on demand.

6.             *ProMed AcquisitionDocuments.*  Concurrentherewith, Assignor is delivering to Administrative Agent possession of theoriginal ProMed Acquisition Documents, together with any and all amendmentsthereto, as in effect on the date hereof, to hold in accordance with the termsof the Credit Agreement until the Credit Agreement is terminated in accordancewith its terms.

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7.             *Attorney-in-Fact.*  Assignor hereby irrevocably makes, constitutes,and appoints Administrative Agent (and Administrative Agent’s officers,employees, or agents) as Assignor’s true and lawful agent and attorney-in-factfor the purposes of enabling Administrative Agent or its agent(s) after theoccurrence of a Default to (a) assert such Rights and Remedies and tocollect such damages, awards and other monies and to apply them in the mannerset forth hereinabove, and (b) to sign the name of Assignor on anydocuments which need to be executed, recorded, or filed, and to do any and allthings necessary in the name and on behalf of Assignor in order to protectAdministrative Agent’s interests in the ProMed Acquisition Documents.  Assignor agrees that neither AdministrativeAgent, nor any of its designees or attorneys-in-fact, will be liable for anyact of commission or omission, or for any error of judgment or mistake of factor law with respect to the exercise of the power of attorney granted under this*Section 7*, other than as aresult of its or their gross negligence or wilful misconduct.  The power of attorney granted under this *Section 7* is coupled with an interestand shall be irrevocable until all of the Obligations have been paid in full,the Credit Agreement and the other Loan Documents terminated, and Assignor’s dutiesunder this Assignment have been discharged in full.  Assignor will not assign, pledge or otherwiseencumber any of its rights, title or interest under, in or to the ProMedAcquisition Document or ProMed Acquisition Documents except for the assignment toAdministrative Agent and its successors or assigns as set forth herein.

8.             *Modification ofRights and Remedies.*  Assignorshall keep Administrative Agent informed of all circumstances bearing adverselyupon the Rights and Remedies.  Assignorshall not waive, amend, alter or modify any of the Rights and Remedies in anymaterial respect without the prior written consent of AdministrativeAgent.  Assignor shall not, withoutAdministrative Agent’s prior written consent, amend, alter, modify or terminateany of the ProMed Acquisition Documents, or waive any of the provisions hereof,or do or permit any act in contravention thereof.

9.             *Assignor to RemainLiable.*  Notwithstanding theforegoing, Assignor expressly acknowledges and agrees that it shall remain liableunder the ProMed Acquisition Documents to observe and perform all of theconditions and obligations in the ProMed Acquisition Documents which Assignoris bound to observe and perform, and that neither this Assignment, nor anyaction taken pursuant hereto, shall cause Administrative Agent to be under anyobligation or liability in any respect whatsoever to observe or perform any ofthe representations, warranties, conditions, covenants, agreements or terms ofthe ProMed Acquisition Documents.

10.           *Counterparts;Effectiveness.*  ThisAssignment may be executed in any number of counterparts, each of which, whenexecuted and delivered, shall be deemed to be an original.  All of such counterparts, taken together,shall constitute but one and the same agreement.  This Assignment shall become effective uponthe execution of a counterpart of this Assignment by each of the partieshereto.

11.           *Notices.*  All notices, requests and othercommunications to any party hereunder shall be sent in accordance with Section10.02 of the Credit Agreement.

12.           *Modificationsand Amendments.*  ThisAssignment shall not be changed orally but shall be changed only by agreementin writing signed by Assignor and Administrative Agent.  No course of dealing between the parties, nousage of trade and no parole or extrinsic evidence 

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of any nature shall be used to supplement or modifyany of the terms or provisions of this Assignment.

13.           *Severability.*  If any provision of this Assignment is heldto be illegal, invalid or unenforceable under present or future laws, thelegality, validity and enforceability of the remaining provisions of thisAssignment shall not be affected thereby, and this Assignment shall beliberally construed so as to carry out the intent of the parties to it.

14.           *GoverningLaw; Successors and Assigns; Entire Agreement.*  This Assignment (a) shall be construedin accordance with and governed by the internal laws of the State ofCalifornia, without regard to principles of conflicts of laws; (b) shallbe binding upon and inure to the benefit of the parties hereto and theirrespective successors and assigns; and (c) embodies the entire agreementand understanding between the parties with respect to the subject matter hereofand supersedes all prior agreements, consents and understandings relating tosuch subject matter.

15.           *California JudicialReference*.  If any action orproceeding is filed in a court of the State of California by or against anyparty hereto in connection with any of the transactions contemplated by thisAssignment, (a) the court shall, and is hereby directed to, make a generalreference pursuant to California Code of Civil Procedure Section 638 to areferee (who shall be a single active or retired judge) to hear and determineall of the issues in such action or proceeding (whether of fact or of law) andto report a statement of decision, provided that at the option of any party tosuch proceeding, any such issues pertaining to a “provisional remedy” asdefined in California Code of Civil Procedure Section 1281.8 shall beheard and determined by the court, and (b) Assignor shall be solelyresponsible to pay all fees and expenses of any referee appointed in suchaction or proceeding.

 

[*Signature Pages Follow*]

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EXECUTED as of the date first above written.
|        |         | ***ASSIGNOR:***                                      |
|--------|--------------|------------------------------------------------------|
|   | *** *** | **PROSPECT  MEDICAL HOLDINGS, INC.**                 |
|   |         | By:                                                  |   |   |
|   |         | Name:                                                |   | Jacob Y. Terner, M.D. |
|   |         | Title:                                               |   | Chief Executive Officer |
|   |         | **PROSPECT  MEDICAL GROUP, INC.**                    |
|   |         | By:                                                  |   |   |
|   |         | Name:                                                |   | Jacob Y. Terner, M.D. |
|   |         | Title:                                               |   | Chief Executive Officer |
|   |         | ***ADMINISTRATIVE  AGENT:***                         |
|   |         | **BANK  OF AMERICA, N.A.**,  as administrative agent |
|   |         | By:                                                  |   |   |
|   |         | Name:                                                |   |   |
|   |         | Title:                                               |   |   |

 

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EXHIBITA

PROMEDACQUISITION DOCUMENTS

 

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