SEVERANCE AND RELEASE AGREEMENT

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Exhibit 10.10

SEVERANCE AND RELEASE AGREEMENT

        This Severance and Release Agreement ("Agreement") is made and entered into by and between Prospect Medical Holdings, Inc., on behalf of itself and its subsidiaries, parents, affiliates, successors and assigns, and all of their agents, officers and directors, employees and former employees, and other representatives (collectively "Prospect"), on the one hand, and Michael Terner ("Terner"), an individual, on the other hand (Prospect and Terner are collectively, the "Parties").

        WHEREAS, Terner is employed by Prospect as its Executive Vice President;

        WHEREAS, Terner also serves as a director for Prospect subsidiaries, including Prospect Medical Systems, Inc., Sierra Medical Management, Inc., Prospect Hospital Advisory Services, Inc., and Pinnacle Health Resources;

        WHEREAS, Prospect and Terner mutually agree that Terner's employment with Prospect shall end on the terms and conditions described herein;

        NOW, THEREFORE, in consideration of the covenants herein, and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged by the Parties, intending to be legally bound hereby, the Parties agree as follows:

        1.      Employment Separation Date.     Terner acknowledges that his last day of employment with Prospect is June 4, 2008 ("Employment Separation Date"). Terner also acknowledges that he will perform no further duties, functions, services, or work for Prospect or its subsidiaries, as an employee, director or in any other capacity, subsequent to the Employment Separation Date. On the Employment Separation Date, Prospect will issue to Terner his final paycheck, representing all wages, compensation, accrued and unused vacation to which he is entitled. Terner acknowledges and agrees that except for the amounts due to him in his final paycheck, he has received all monies, bonuses, compensation, remuneration he earned or was due through the Employment Separation Date.

        2.      Consideration.     In consideration for the promises made herein, including, but not limited to, Terner's agreement to the release of all claims in the release, paragraph 5 of this Agreement, Prospect agrees to provide Terner with the following, upon satisfaction of the terms identified herein. Prospect shall pay Terner three (3) months of his regular base salary, a total of Forty Five Thousand Dollars ($45,000). Terner further agrees that this payment will be subject to income tax and other legally required withholding, and will be reported by Prospect as income to Terner on an IRS Form W-2. Following the execution of this Agreement, Prospect will pay Terner Fifteen Thousand Dollars ($15,000) on July 7, August 7, and September 5, 2008, unless Terner chooses to revoke the Agreement during the revocation period described in paragraph 7.

        3.      Payment of Moneys Owed.     Terner acknowledges that Prospect has paid all moneys owed to him as a result of his employment with Prospect, including but not limited to his salary and all accrued paid time off pay through his Employment Separation Date.

        4.      Non-Admission of Liability .    While this Agreement resolves all issues between Prospect and Terner, as well as any future effects of any acts or omissions, it does not constitute an admission by Prospect of any violation of any federal, state or local law, ordinance or regulation or of any violation of Prospect's policies or procedures or of any liability or wrongdoing whatsoever. Neither this Agreement nor anything in this Agreement shall be construed to be or shall be admissible in any proceeding as evidence of liability or wrongdoing by Prospect.

        5.      General Release .    In consideration of the covenants undertaken herein by Prospect, and except for those obligations created by or arising out of this Agreement, Terner, on his own behalf and on behalf of his descendants, dependents, heirs, executors, administrators, assigns and successors, does

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hereby covenant not to sue and acknowledges complete satisfaction of and hereby releases, absolves and discharges Prospect and its owners, heirs, successors and assigns, parents, subsidiaries, divisions and Affiliates, past, present and future, and including without limitation their trustees, directors, officers, shareholders, members, managers, employees, attorneys, insurers, lenders, brokers, consultants and any other agents, past, present and future, and each of them (hereinafter collectively referred to as "Releasees"), with respect to and from any and all claims, demands, liens, agreements, contracts, covenants, actions, suits, causes of action, wages, obligations, debts, expenses, attorneys' fees, damages, judgments, orders and liabilities of whatever kind or nature in law, equity or otherwise, whether now known or unknown, suspected or unsuspected, and whether or not concealed or hidden, which Terner now owns or holds or has at any time heretofore owned or held as against said Releasees, or any of them, including specifically but not exclusively and without limiting the generality of the foregoing, any and all claims, demands, agreements, obligations and causes of action, known or unknown, suspected or unsuspected by Terner: (1) arising out of or in any way connected with Terner's Employment; or (2) arising out of or in any way connected with any transactions, occurrences, acts or omissions set forth, or facts alleged, in any and all charges, complaints, claims or pleadings filed by Terner against any Releasee prior to the date hereof with any city, county, state or federal agency, commission, office or tribunal whatsoever; or (3) arising out of or in any way connected with any transactions, occurrences, acts or omissions occurring prior to the date hereof, including specifically without limiting the generality of the foregoing any claim under Title VII of the Civil Right