Exhibit 10.76


 


STOCK PURCHASE AGREEMENT


 


This Stock
Purchase Agreement (“Agreement”) is made and entered into this 26th
day of November, 2008 by and among Arthur Lipper, M.D. (“Purchaser”), as buyer,
Osmundo R.  Saguil, M.D. (“Seller”), as
seller, Prospect Medical Group, Inc., a California professional
corporation (“Company”) and Prospect Medical Systems, Inc., a Delaware
corporation (“PMS”).


 


RECITALS


 


This Agreement
is made with reference to the following facts and circumstances:


 


A.            Seller is a physician licensed in
the State of California and the record owner of four thousand (4,000) shares
(the “Shares”) of common stock of Company, representing one hundred percent
(100%) of the issued and outstanding shares of Company.


 


B.            Purchaser is a physician licensed in
the State of California.


 


C.            PMS is the manager of Company
pursuant to a long term management agreement and was the holder of an option to
buy the Shares of Company.


 


D.            PMS assigned the option to Purchaser
so that Purchaser, as a duly licensed physician, could serve as the nominee
shareholder of Company.


 


E.             Purchaser exercised the option to
purchase the Shares and desires to effectuate the transfer of the Shares
pursuant to this Agreement.


 


F.             As a result of Purchaser’s purchase
of the Shares, Purchaser will hold all the issued and outstanding shares of
Company.


 


G.            Seller desires to sell the Shares to
Purchaser and Purchaser desires to purchase the Shares from Seller, on the
terms and conditions set forth in this Agreement.


 


NOW,
THEREFORE, in consideration of the covenants and conditions contained herein
and for other valuable consideration, the receipt and sufficiency of which are
hereby acknowledged, the parties hereby agree as follows:


 


1.             PURCHASE AND SALE OF STOCK


 


1.1           The Shares.  Pursuant to the terms and conditions set
forth herein, on the Closing Date, Seller shall sell, convey, transfer, and
deliver to Purchaser all right, title, and interest in and to the Shares.


 


2.             PURCHASE PRICE


 


2.1           Consideration for
the Shares.  Subject to the terms and
conditions of this Agreement and in full consideration of the sale and issuance
of the Shares, Purchaser shall receive One Thousand Dollars ($1,000.00) as
payment (the “Purchase Price”) on the Closing 


 

















 


Date for the
Shares.  PMS shall advance the Purchase
Price to Purchaser, for Purchaser’s payment to Seller of such Purchase Price.


 


3.             TRANSFER OF SHARES


 


3.1           Transfer.  In order to effectuate the transfer of record
title to the Shares to Purchaser, on the Closing Date, Seller shall issue to
Purchaser all stock certificates representing the Shares, with a stock power
duly endorsed for transfer (“Stock Power”), along with any other documents
reasonably requested by Purchaser to effectuate the purposes of this
Agreement.  Notwithstanding the
foregoing, Purchaser acknowledges that that the stock certificate representing
the Shares is currently in the possession of the Company’s lender (“Lender”) as
evidence of the pledge of the Shares as collateral for the Company’s loan
pursuant to the terms of that First Lien Pledge Agreement and the Second Lien
Pledge Agreement, copies of which have been previously delivered to Purchaser
(the “Pledge Agreements”).  Purchaser
acknowledges that the Shares will continue to be collateral for the Company’s
loan (which is also the loan for the Company’s affiliates) after the purchase
hereunder.  As a result, on the Closing
Date, Seller shall deliver the Stock Power duly endorsed in blank and the
Company and PMS, shall work with Lender to obtain a return of the original
stock certificate for the Shares so that such stock certificate can be
cancelled and a new stock certificate issued in the name of Purchaser.  The new stock certificate representing the
Shares will then be returned to Lender, along with a Stock Power signed by Purchaser
for the benefit of Lender.


 


4.             REPRESENTATIONS, WARRANTIES AND COVENANTS
OF COMPANY


 


Company
represents and warrants to Purchaser that:


 


4.1           Organization and
Authority.  Company is a California
professional corporation duly formed, legally existing and in good standing
under the laws of the State of California. 
Seller is the sole shareholder of Company.  Company has full power and authority to enter
into this Agreement, to carry out and perform his obligations hereunder and to
consummate the transactions contemplated hereby.


 


4.2           Authorization and
Enforceability.  Company has duly
authorized, executed and delivered this Agreement.  Assuming the Purchaser, Seller and PMS duly
authorize, execute and deliver it, this Agreement is enforceable against Company.


 


4.3           Title.  Seller is the record owner of and has good
and valid record title to and has the full right to sell, convey and transfer
the Shares under the terms of this Agreement. 
The Shares are encumbered by (a) the Pledge Agreements, and (b) a
Fourth Amended and Restated Assignable Option Agreement (“Existing Assignable
Option Agreement”) between Company, PMS and Seller which gives PMS the
authority at any time during the term of the Existing Assignable Option
Agreement to designate the owner of the Shares. 
A copy of the Existing Assignable Option Agreement has been delivered to
Purchaser.


 


4.4           No Violation of
Other Agreements.  Neither this
Agreement nor any of the transactions contemplated hereby conflicts and will
not conflict with or result in the breach of any of the terms or provisions of,
or constitute a default under, any contractual obligation to which Company is a
party or by which Company, or the Shares, is bound, or any legal 


 


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requirement
applicable to Company or the Shares.  No
approval is required to be obtained by Company in connection with the
execution, delivery and performance of this Agreement or the transactions
contemplated hereby.


 


4.5           No Other
Representations.  No oral or written
representation inconsistent with this Agreement has been made to Purchaser.


 


5.             REPRESENTATIONS, WARRANTIES AND COVENANTS
OF PMS


 


PMS represents
and warrants to Purchaser, PMS and Company that:


 


5.1           Organization and
Authority.  PMS is a Delaware corporation
duly formed, legally existing and in good standing under the laws of the State
of Delaware and qualified to do business in the State of California.  PMS has full power and authority to enter
into this Agreement, to carry out and perform his obligations hereunder and to
consummate the transactions contemplated hereby.


 


5.2           Authorization and
Enforceability.  PMS has duly
authorized, executed and delivered this Agreement.  Assuming the Purchaser, Seller and Company
duly authorize, execute and deliver it, this Agreement is enforceable against
PMS.


 


5.3           No Violation of
Other Agreements.  Neither this
Agreement nor any of the transactions contemplated hereby conflicts and will
not conflict with or result in the breach of any of the terms or provisions of,
or constitute a default under, any contractual obligation to which PMS is a
party or by which PMS, or the Shares, is bound, or any legal requirement
applicable to PMS or the Shares.  No
approval is required to be obtained by PMS in connection with the execution,
delivery and performance of this Agreement or the transactions contemplated
hereby.


 


5.4           No Other
Representations.  No oral or written
representation inconsistent with this Agreement has been made to Purchaser.


 


6.             REPRESENTATIONS, WARRANTIES AND COVENANTS
OF SELLER


 


Seller
represents and warrants to Purchaser, PMS and Company that:


 


6.1           Title.  Seller is the record owner of the
Shares.  Seller has not (i) granted
any option, warrant or other right to any person to acquire any of the Shares
or any other security of, or equity interest in, Company, or (ii) any
contractual obligation that could have the same effect.  Seller hereby discloses to Purchaser that the
Shares are encumbered by (a) the Pledge Agreements, and (b) the
Existing Assignable Option Agreement which gives PMS the authority at any time
during the term of the Existing Assignable Option Agreement to designate the
owner of the Shares.  Other than the
encumbrances described above or any encumbrances that could be deemed to exist
as a result of the operation of the Company in its ordinary course, Seller has
not encumbered or placed any liens on the Shares.


 


6.2           No Violation of
Other Agreements.  Neither this
Agreement nor any of the transactions contemplated hereby conflicts and will
not conflict with or result in the breach of 


 


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any of the
terms or provisions of, or constitute a default under, any contractual
obligation to which Seller is a party or by which Seller, or the Shares, is
bound, or any legal requirement applicable to Seller or the Shares.  No approval is required to be obtained by
Seller in connection with the execution, delivery and performance of this
Agreement or the transactions contemplated hereby.


 


6.3           No Other
Representations.  No oral or written
representation inconsistent with this Agreement has been made to Purchaser.


 


6.4           Access to
Independent Counsel.  Seller has had
ample opportunity to consult independent legal counsel with respect to this
Agreement and has not relied upon Company’s counsel for legal advice.


 


7.             REPRESENTATIONS, WARRANTIES AND COVENANTS
OF PURCHASER


 


Purchaser
hereby represents and warrants to Seller, Company and PMS that:


 


7.1           No Violation of
Other Agreements.  Neither this
Agreement nor any of the transactions contemplated hereby conflicts and will
not conflict with or result in the breach of any of the terms or provisions of,
or constitute a default under, any contractual obligation to which Purchaser is
a party or by which Purchaser is bound, or any legal requirement applicable to
Purchaser.  No approval is required to be
obtained by Purchaser in connection with the execution, delivery and
performance of this Agreement or the transactions contemplated hereby.


 


7.2           Access to
Properties, Books and Records. 
Purchaser acknowledges that he has been afforded reasonable access to
all properties, books and records of Company with respect to the Shares, the
Existing Assignable Option Agreement, and the Pledge Agreements.


 


7.3           Access to
Independent Counsel.  Purchaser has
had ample opportunity to consult independent legal counsel with respect to this
Agreement and has not relied upon Company’s counsel for legal advice.


 


8.             COVENANTS AND AGREEMENTS OF THE PARTIES


 


8.1           Publicity.  Neither Purchaser nor Seller shall, at any
time on or after the date hereof, issue any publicity or written or oral
statement, or otherwise disclose the existence of this Agreement or any of the
terms or conditions hereof, or disclose the contemplation, implementation or
consummation of any of the transactions intended hereby, without the prior
written consent of the Company and PMS. 
Notwithstanding the foregoing, Purchaser and Seller acknowledge that the
Company and PMS are part of the Prospect family of companies and that Prospect
Medical Holdings, Inc., a Delaware corporation, is a public company
required to file annual and periodic disclosure filings with the Securities and
Exchange Commission.  Purchaser and
Seller acknowledge that this Agreement, and any agreement referenced herein or
contemplated hereby, may be filed as an exhibit to such securities’ filings.


 


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9.             CLOSING DATE; CLOSING CONDITIONS;
EFFECTUATION OF CLOSING


 


9.1           Closing Date.  The transactions contemplated by this Agreement
shall be consummated at the “Closing”, at such location mutually agreed to by
the parties.  The Closing Date shall be November       ,
2008, or on such other date mutually agreed to by the parties.


 


9.2           Conditions to
Closing.


 


(a)           Purchaser shall have
executed (i) the Assignable Option Agreement between PMS, Company and
Purchaser, in the form attached hereto as Exhibit A., (ii) pledge
agreements prepared by Lender in the form attached hereto as Exhibit B
and Exhibit C.


 


(b)           Seller shall have
received evidence reasonably satisfactory to Seller that the Pledge Agreements,
and any uniform commercial code filings which were filed to perfect Lender’s
security interest in the Shares naming Seller, have or will be terminated by
Lender promptly upon the closing of the transactions under this Agreement.


 


9.3           Effectuation of
Closing.  At Closing, assuming the
satisfaction of the terms and conditions of sale set forth in this Agreement,
Seller shall deliver to Purchaser the Stock Power and Seller shall receive the
Purchase Price.


 


10.          MISCELLANEOUS


 


10.1         Entire Agreement.  This Agreement, together with all documents
referred to herein, constitutes the entire agreement between the parties with
respect to the subject matter hereof, 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.  Each party to this Agreement
acknowledges that no representations, inducements, promises, or agreements,
orally or otherwise, have been made by the other party, or by anyone acting on
behalf of any party, that are not embodied herein, and that no other agreement,
statement, or promise not contained in this Agreement shall be valid or
binding.


 


10.2         Successors and
Assigns.  This Agreement shall be
binding upon and shall inure to the benefit of the parties and their respective
heirs, legal representatives, and permitted successors and assigns.  No party may assign this Agreement or the
rights, interests or obligations hereunder. 
Any assignment or delegation in contravention of this Section shall
be null and void.


 


10.3         Counterparts.  This Agreement, and any amendments thereto,
may be executed in counterparts, each of which shall constitute an original
document, but which together shall constitute one and the same instrument.


 


10.4         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.


 


10.5         Notices.  Any notices required or permitted to be given
hereunder by any party to the other shall be in writing and shall be deemed
delivered upon personal delivery; twenty-four 


 


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(24) hours
following deposit with a courier for overnight delivery; or seventy-two (72)
hours 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
  Seller:

  	
   

  	
  Osmundo R.
  Saguil, M.D.

  
	
   

  	
   

  	
  c/o Prospect
  Medical Group, Inc.

  
	
   

  	
   

  	
  1920 E. 17th
  Street, Suite 200

  
	
   

  	
   

  	
  Santa Ana,
  CA 92705

  
	
   

  	
   

  	
   

  
	
  If to
  Purchaser:

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  



 


10.6         Governing Law.  This Agreement shall be governed by and
construed in accordance with the laws of the State of California.


 


10.7         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.


 


10.8         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.


 


10.9         Survival of
Representations and Warranties. 
Except as expressly stated to the contrary herein, the representations
and warranties of Purchaser and Seller contained in this Agreement or in any
certificate or document delivered pursuant to the provisions hereof shall
survive the Closing Date for a period of one (1) year.


 


10.10       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.


 


10.11       Dispute Resolution.  If the parties to this Agreement cannot
settle grievances or disputes between them in an informal and expeditious
fashion, the dispute shall be submitted, upon the motion of either party, to arbitration
in Los Angeles County, California, in accordance with the commercial rules of
the American Arbitration Association and applying the laws of the State of
California.  Except as may be expressly
provided to the contrary in this Agreement, the arbitration procedure described
in this Section shall be the sole means of resolving any disputes
hereunder.  The parties agree that the
decision of the arbitrator shall be final and binding as to each of them, and
judgment thereon may be entered in any court having jurisdiction thereof.  During the pendency of any such arbitration
and until final judgment thereon has been entered, this Agreement shall remain
in full force and effect unless otherwise terminated as provided
hereunder.  The provisions of this Section 10.11
shall survive the expiration or sooner termination of this Agreement regardless
of the cause of such termination.


 


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10.12       Venue.  In the event of any litigation under this
Agreement, the parties agree that the venue for such litigation shall be Los
Angeles County, California.


 


10.13       Attorneys’ Fees.  Should either party hereto institute any
action or procedure to enforce this Agreement or any provision hereof, 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
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.


 


10.14       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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IN WITNESS
WHEREOF, the undersigned have executed this Agreement as of the date first
written above.


 


	
  “Purchaser”:

  	
   

  	
  “Seller”:

  
	
   

  	
   

  	
   

  
	
  ARTHUR
  LIPPER, M.D.

  	
   

  	
  OSMUNDO R.
  SAGUIL, M.D.

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  By:

  	
              /s/
  Arthur Lipper, M.D.

  	
   

  	
  By:

  	
              /s/
  Osmundo R. Saguil, M.D.

  
	
   

  	
  Arthur
  Lipper, M.D.

  	
   

  	
   

  	
  Osmundo R.
  Saguil, M.D.

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  “Company”:

  	
   

  	
  “PMS”:

  
	
   

  	
   

  	
   

  
	
  PROSPECT
  MEDICAL GROUP, INC.

  	
   

  	
  PROSPECT
  MEDICAL SYSTEMS, INC.

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  By:

  	
              /s/
  Samuel S. Lee

  	
   

  	
  By:

  	
              /s/
  Samuel S. Lee

  
	
   

  	
  Samuel S.
  Lee

  	
   

  	
   

  	
  Samuel S.
  Lee

  
	
   

  	
  Senior VP

  	
   

  	
   

  	
  Chairman of
  the Board

  
						



 


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Exhibit D


 


SPOUSAL JOINDER AND CONSENT


 


I am the
spouse of Arthur Lipper, M.D. (“Purchaser”). 
To the extent that I have any interest in any of the Shares (as that
term is defined in the Stock Purchase Agreement (“Agreement”) entered into as
of this date, by and among Osmundo R. Saguil, M.D., as seller, Prospect Medical
Group, Inc. (“Company”) and Prospect Medical Systems, Inc. (“PMS”), I
hereby join in the Agreement and agree to be bound by its terms and conditions
to the same extent as my spouse.  I have
read the Agreement, understand its terms and conditions, and to the extent that
I have felt it necessary, I have retained independent legal counsel to advise
me concerning the legal effect of this Agreement and this Spousal Joinder and
Consent.


 


I understand
and acknowledge that Purchaser is relying on the validity and accuracy of this
Spousal Joinder and Consent in entering into this Agreement.


 


Executed this
23rd day of November, 2008.


 


	
  Signature:

  	
  /s/ Allyson Lipper

  	
   

  
	
   

  
	
  Printed or Typed Name:

  	
  Allyson
  Lipper