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Exhibit 10.78
STOCK PURCHASE AGREEMENT
This Stock Purchase Agreement ("Agreement") is made and entered
into this 26 th 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 ("PMG") 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 eight hundred thirty-nine and 02/100 (839.02)
shares (the "Shares") of common stock of Company, representing
approximately fifty five percent (55%) of the issued and
outstanding shares of Nuestra Familia Medical Group, Inc.
("Nuestra") and one hundred percent (100%) of the issued and
outstanding shares of Nuestra held by Seller on behalf of PMG.
B.
Purchaser is a physician licensed in the State of California.
C.
PMG was the holder of an option to buy the Shares.
D.
PMS is the manager of PMG pursuant to a long term management
agreement and is a party to an agreement of accommodation
reflecting that option to buy the Shares then held by PMG, was held
by PMG as an accommodation on behalf of PMS. .
D.
PMG assigned the option to Purchaser, with the consent of PMS, so
that Purchaser, as a duly licensed physician, could serve as the
nominee holder of record title to PMG’s shares in
Nuestra.
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 of PMG’s shares in Nuestra which equals
approximately 55% of Nuestra’s issued and outstanding
shares.
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.
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 Dollar
($1.00) as payment (the "Purchase Price") on the Closing Date for
the Shares. PMG 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 PMG’s lender ("Lender") as evidence of the
pledge of the Shares as collateral for PMG’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 PMG’s loan
(which is also the loan for PMS, Nuestra and their affiliates)
after the purchase hereunder. As a result, on the Closing
Date, Seller shall deliver the Stock Power duly endorsed in blank
and PMG 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 PMG
PMG represents and warrants to Purchaser that:
4.1
Organization and Authority . PMG and Nuestra are
California professional corporations duly formed, legally existing
and in good standing under the laws of the State of
California. Seller is the holder of 839.02 shares of
Nuestra. PMG 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 . PMG 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 PMG.
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, (b) a
Second Amended and Restated Option Agreement ("Existing Option
Agreement") between PMG and Seller which gives PMG the authority at
any time during the term of the Existing Option Agreement to
designate the owner of the Shares, and (c) an Agreement of
Accommodation and Future Assignment of Rights
2
under the Option Agreement ("Agreement of Accommodation").
A copy of the Existing Option Agreement and the Agreement of
Accommodation have 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 PMG is a party or by which PMG, or
the Shares, is bound, or any legal requirement applicable to PMG or
the Shares. No approval is required to be obtained by PMG 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 PMG 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 PMG 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 PMG
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, Nuestra, or (ii) any
contractual obligation that could have the same effect.&
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