Exhibit 2.9

ASSET PURCHASE AGREEMENT

AMONG

STARCARE MEDICAL GROUP, INC.,

d/b/a GATEWAY MEDICAL GROUP, INC.,

PINNACLE HEALTH RESOURCES,

PRIMARY AND MULTI-SPECIALTY MEDICAL CLINICS

OF ANAHEIM, INC.,

AND

CLYDE J. DOS SANTOS, M.D.

NARINDAR SINGH, M.D.

JOHN BIJOY, M.D.

BERTRAND DE SILVA, M.D.

ANOOSHIRAVAN HAMI, M.D.

HARINDER GOGIA, M.D.

HARMOHINDER GOGIA, M.D.

ASSET PURCHASE AGREEMENT

This Asset Purchase Agreement (the “Agreement”) is dated as of March 31, 2004, by and among StarCare Medical Group, Inc. d/b/a Gateway Medical Group, Inc., a California professional corporation (“StarCare”), Pinnacle Health Resources, a California corporation (“Pinnacle”), Primary and Multi-Specialty Medical Clinics of Anaheim, Inc., a California professional corporation (“Buyer”), and Clyde J. Dos Santos, M.D., Narindar Singh, M.D., John Bijoy, M.D., Bertrand De Silva, M.D., Anooshiravan Hami, M.D., Harinder Gogia, M.D., and Harmohinder Gogia, M.D., as shareholders of Buyer (each, a “Shareholder”, collectively, the “Shareholders”) (Buyer and Shareholders are collectively referred to herein as the “Buyer Parties”).

RECITALS

A. WHEREAS, StarCare Medical Group, Inc., dba Gateway Medical Group, Inc., a California professional corporation (“StarCare”) is a licensed California professional corporation that (i) operates as an independent practice association and, as such, contracts with physicians and providers of ancillary services to provide professional medical services to patients through contracts with health plans (the “IPA Business”) and (ii) owns and operates the Medical Clinics located at 1303 North Euclid, Anaheim, CA (the “Anaheim Clinic”), 500 South Anaheim Hills Rd., Suite 230, Anaheim, CA (the “Anaheim Hills Clinic”) and 710 N. Euclid Street, Anaheim Hills, CA (the “Euclid Clinic”) (collectively, the “Medical Clinics”) and manages such medical clinics out of the corporate offices located at 710 N. Euclid Street, Anaheim Hills, CA (“Clinic Corporate Office”) using storage space for its medical records at 15330 Valley View, La Mirada, CA (“Clinic Storage Space”) (collectively, the “Clinic Business”);

B. WHEREAS, StarCare is a wholly-owned subsidiary of Prospect Medical Group, Inc., a California professional corporation (“Prospect”), which operates as an independent practice association similar to the IPA Business operated by StarCare;

C. WHEREAS, Prospect acquired all the shares of StarCare effective February 1, 2004 pursuant to a Stock Purchase Agreement dated as of January 31, 2004 (the “Gateway Agreement”) with StarCare, APAC Medical Group, Inc., dba Gateway Physicians Medical Associates, Inc., a California professional corporation (“APAC”) and David Tsoong, M.D., the sole shareholder of StarCare and APAC (“Tsoong”) and in which transaction, Prospect also acquired all the shares of APAC, which operates as an independent practice association similar to StarCare, and Prospect’s affiliate, Prospect Medical Systems, Inc., a Delaware corporation (“PMS”), acquired all the shares of Pinnacle , which operates as the management company of StarCare and APAC, from Tsoong (collectively, the “Gateway Transaction”);

D. WHEREAS, Prospect desires to sell the Clinic Business of StarCare while retaining the IPA Business, including in such sale of the Clinic Business, the transfer of employees of Pinnacle who provide services exclusively or substantially to the Clinic Business,

but where employees of Pinnacle due to StarCare’s outsourcing of non-professional administrative functions to Pinnacle;

E. WHEREAS, Buyer is a California professional corporation formed by the Shareholders, all of whom are licensed California physicians, to purchase and operate the Clinic Business;

F. WHEREAS, each Shareholder owns an equal number of the issued and outstanding shares of Buyer (approximately 14.2898% each), representing, in the aggregate, 100% of the record and beneficial ownership of Buyer;

G. WHEREAS, StarCare and the Buyer Parties desire to provide for the terms and conditions of the sale of assets, and assumption of liabilities, of the Medical Clinics, Clinic Corporate Office and Clinic Storage Space (the “Clinic Business Asset Purchase”) and to make certain representations and warranties and other agreements in connection with the Clinic Business Asset Purchase.

AGREEMENT

NOW, THEREFORE, in reliance on the foregoing recitals and in and for the consideration and representations, warranties, agreements and covenants set forth herein, the parties hereto hereby agree as follows:

ARTICLE 1

PURCHASE AND SALE OF CLINIC BUSINESS

1.1 Closing. The consummation (the “Closing”) of the Clinic Business Asset Purchase and the other transactions contemplated by this Agreement (collectively, the “Transaction”), will take place at 10:00 am at the offices of Miller & Holguin, 1801 Century Park East, Suite 700, Los Angeles, California 90067 on March 31, 2004, or such earlier date as the parties may mutually agree (the “Closing Date”) and the Transaction shall be deemed effective as of 12:01 am on April 1, 2004 (the “Effective Date”).

1.2 Purchase and Sale of Clinic Business. On the terms and subject to the conditions of this Agreement, StarCare hereby sells, transfers, conveys and delivers to Buyer, free and clear of all liens, claims or encumbrances except as set forth on Schedule 2.4, and Buyer agrees to purchase from StarCare, all of StarCare’s right, title and interest in the property and assets relating to the Clinic Business as set forth in Schedule 1.2(a) (the “Clinic Assets”), but specifically excluding those assets listed on Schedule 1.2(b) (the “Excluded Clinic Assets”).

1.3 Assumption of Liabilities. Buyer shall assume those liabilities and/or obligations of StarCare and/or Pinnacle which pertain to the Clinic Business, which liabilities are listed on Schedule 1.3. Except for those liabilities and/or obligations specifically set forth in Schedule 1.3, Buyer is not assuming any liabilities or obligations of StarCare and/or Pinnacle, and Buyer

shall not be responsible for any liabilities or obligations of StarCare and/or Pinnacle of any kind or nature whatsoever, whether incurred prior to or after the Effective Date, all of which shall remain the obligations of StarCare and/or Pinnacle.

1.4 Purchase Price and Payment. In consideration of the sale by StarCare to Buyer of the Clinic Assets, Buyer shall pay to StarCare the sum of Seven Hundred Thousand Dollars ($700,000) (the “Purchase Price”), payable as follows:

(a) Three Hundred Thousand Dollars ($300,000) shall be delivered by Buyer to StarCare at Closing by wire transfer to an account designated by StarCare (“Cash Payment”);

(b) Four Hundred Thousand Dollars ($400,000) shall be paid by delivery to StarCare by Buyer of a secured promissory note, dated as of the Closing Date, in the form attached hereto as Exhibit “A” (the “Purchase Price Note”), which shall bear interest at the rate of five percent (5%) per annum, with principal and accrued interest payable in twelve (12) monthly installments, commencing one (1) month from the Effective Date, until thirteen (13) months from the Effective Date. The Purchase Price Note shall be secured by all of the Clinic Assets, as evidenced by a Security Agreement in the form attached hereto as Exhibit “B” (the “Security Agreement”), and shall be guaranteed by the personal guarantee of the Shareholders, as evidenced by a Guaranty in the form attached hereto as Exhibit “C” (the “Purchase Price Guaranty”).

1.5 Additional Consideration. The Buyer Parties acknowledge that StarCare has outstanding loans with Wells Fargo Bank, the proceeds of which were used for the Clinic Business and are therefore liabilities of the Clinic Business (the “Wells Fargo Loans”). The Wells Fargo Loans are shown on the February Financial Statements and the March Estimated Partial Financial Statements (as defined in Section 2.5) and are generally described on Schedule 1.5. As of the Effective Date, the approximate aggregate balance of the Wells Fargo Loans total Four Hundred Twenty Four Thousand Nine Hundred Ninety Four Dollars and 25/100 ($424,994.25). The Buyer Parties and StarCare have agreed that in exchange for Buyer’s execution of a promissory note in the form attached hereto as Exhibit “D” (the “Additional Consideration Note”) payable to StarCare in the amount of the Wells Fargo Loans, that StarCare shall retain liability for the pay-off of the Wells Fargo Loans. The Additional Note shall bear interest at a rate of five percent (5%) per annum, with principal and accrued interest payable as follows:

(i) 59 monthly installments of $5,447.52, commencing one (1) month from the Effective Date and continuing until the sixty (60^th) month after the Effective Date, and

(ii) a final 60^th installment, due on the sixty-first (61^st) month after the Effective Date for the full amount of the unpaid balance and accrued interest.

The Additional Consideration Note shall be secured by all of the Clinic Assets by means of the Security Agreement, and shall be guaranteed by the personal guarantee of the Shareholders in the form of the Guaranty attached hereto as Exhibit “E” (the “Additional Consideration Guaranty”). The parties acknowledge that as a result of StarCare’s retention of liability for the Wells Fargo

Loans due to the execution of the Additional Consideration Note, the Closing Date Financial Statements (as defined in Section 2.5) will no longer have a note payable entry for the Wells Fargo Loans but will instead show a note payable entry for the Additional Consideration Note.

1.6 PTO Repayment. The Buyer Parties acknowledge that it is a requirement of the Transaction that StarCare and/or Pinnacle, as applicable, terminate the Terminated Employees (as defined in Section 2.12) and pay all wages and benefits due Existing Closing Date Physicians (as defined in Section 2.12) through the Closing Date (“Closing Date Employee Wage/Benefit Payment”). The Buyer Parties acknowledge that the Closing Date Employee Wage/Benefit Payment includes wages due the Terminated Employees and Existing Closing Date Physicians through their date of termination and a payment of all paid time off (“PTO”) accumulated during their employment with StarCare. The PTO accumulated through the Closing Date which is being paid off at Closing is $243,252.29 as shown on Schedule 1.6. The parties acknowledge that the February Financial Statements and the March Estimated Partial Financial Statements reflect a liability of the Clinic Business for “Accrued Salaries and Benefits” and that this accrual is a reference to accrued but unpaid PTO (it reflects the amount due at the time such financial statements were prepared).

As a result of the payoff of the PTO, Buyer will be obligated to repay StarCare for all PTO by means of a promissory note in the form attached hereto as Exhibit “F” (the “PTO Note”), which shall bear interest at a rate of five percent (5%) per annum, with principal and accrued interest payable as follows:

(i) an installment of $121,626.00, due on the thirty-sixth (36th) month after the Effective Date, and

(ii) a final installment due on the sixty-first (61^st) month after the Effective Date for the full amount of the unpaid balance plus accrued interest.

The PTO Note shall be secured by all of the Clinic Assets by means of the Security Agreement, and shall be guaranteed by the personal guarantee of the Shareholders in the form of the Guaranty attached hereto as Exhibit “G” (the “PTO Guaranty”). The parties acknowledge that as a result of the pay-off of the PTO and the execution of the PTO Note, the Closing Date Financial Statements (as defined in Section 2.5) will no longer have a note payable entry for the Accrued Salary and Benefits of the Clinic Business but will instead show a note payable entry for the PTO Note.

1.7 Purchase Price Allocation. The parties agree that they shall mutually cooperate in completing the allocation of the Purchase Price as shown in Schedule 1.7 prior to the Closing Date, and agree that they shall use such allocation for purposes of federal and state tax reporting. The parties further agree to mutually cooperate in the filing of Form 8594 with the Internal Revenue Service.

1.8 Cooperation in Transition of Utilities. StarCare and Buyer acknowledge that certain of the Clinic Leases require that the lessee or subtenant reimburse the landlord (“Landlord Facilitator”) for one or more of the gas, electricity, telephone, water, and other utilities serving the Clinic Business (collectively, “Utilities”) and certain require that the lessee

or subtenant arrange directly with the providers of Utilities (collectively, the “Utility Companies”) for one or more of such Utilities to the Clinic Business (“Utility Company Facilitator”). StarCare and Buyer recognize that the continued provision of Utilities to the Clinic Business is essential to the continuity of patient care and the operation of the Clinic Business following Closing. StarCare and Buyer further acknowledge that demands by the Utility Companies for the immediate replacement of cash deposits by Buyer in those cases where there is a Utility Company Facilitator could disrupt patient care and the operation of the Clinic Business. Accordingly, StarCare and Buyer shall cooperate to formulate a plan for coordinated communication to the Utility Company Facilitator to inform them that Buyer is assuming financial and operational responsibility for the Clinic Business pursuant to this Agreement, and to arrange for the continuation of Utilities services as required for the orderly operation of the Clinic Business. StarCare shall assign its rights in all cash deposits (if any) paid to Utility Company Facilitators to the extent they relate exclusively to the Clinic Business.

ARTICLE 2

REPRESENTATIONS AND WARRANTIES

OF STARCARE AND PINNACLE

In order to induce Buyer to enter into this Agreement and to consummate the Transaction, StarCare makes the representations and warranties set forth in this Article 2, and Pinnacle makes the representations as to Sections 2.1(a), 2.1(b), 2.2, 2.3 and 2.12 of this Article 2, as of the Closing Date.

2.1(a) Organization. StarCare is a professional corporation duly organized, validly existing and in good standing under the laws of the State of California. Pinnacle is a corporation duly organized and in good standing under the laws of the State of California. StarCare and Pinnacle have all requisite authority to own, lease, and operate their respective assets and to carry on their respective businesses as currently being conducted.

2.1(b) Authorization. Each of StarCare and Pinnacle has the power and authority to enter into this Agreement and to consummate the Transaction. All actions on the part of StarCare and Pinnacle necessary for the authorization, execution, delivery and performance of this Agreement and the consummation of the Transaction have been or will be taken prior to the Closing Date, and this Agreement (including exhibits, schedules and the ancillary agreements) constitutes the legal, valid and binding obligation of StarCare and Pinnacle, enforceable against them in accordance with its terms, except as enforceability may be restricted, limited or delayed by applicable bankruptcy, insolvency, fraudulent conveyance, or other laws affecting creditor’s rights generally, and except as enforceability is subject to general principles of equity.

2.2 No Consent Required. Except as set forth on Schedule 2.2, neither the execution and delivery of this Agreement by StarCare and/or Pinnacle or the performance by them of their obligations under this Agreement or the documents required hereunder requires the consent, approval, order or authorization of, or registration, declaration or filing with any governmental entity or any third party that will not have been obtained and delivered to Buyer prior to the Closing Date.

2.3 No Violation of Other Agreements; No Conflicts.

(a) Except as set forth on Schedule 2.3, neither this Agreement nor any part of the Transaction violates, conflicts with or results in a breach of, or shall violate, conflict with or result in a breach of any lease, contract, document or agreement to which StarCare and/or Pinnacle is a party or by which StarCare and/or Pinnacle may be bound.

(b) Neither the execution and delivery of this Agreement nor the consummation or performance of the Transaction, will, directly or indirectly (with or without the giving of notice, or lapse of time, or both):

(i) contravene, conflict with, or result in a violation of any provision of the organizational documents of StarCare and/or Pinnacle;

(ii) contravene, conflict with, or result in a violation of any order, judgment or decree to which StarCare and/or Pinnacle may be subject; or

(iii) contravene, conflict with or result in a violation of any of the terms or requirements, or give any governmental body the right to revoke, withdraw, suspend, cancel, terminate or modify, any governmental authorization that is held by StarCare and/or Pinnacle.

2.4 Title to Clinic Assets. StarCare has, and on the Effective Date shall have, good, marketable and valid title to the Clinic Assets, free and clear of all liens, claims or encumbrances (“Liens”) except as set forth on Schedule 2.4 hereto.

2.5 Financial Statements of the Clinic Business. Schedule 2.5(a) contains a pro forma balance sheet of the Clinic Business for the period ending February 29, 2004 (“February Clinic Balance Sheet”) and accompanying schedules of accounts receivable, inventory, property, plant and equipment, prepaid expenses, accounts payable and accrued expenses for the period ending February 29, 2004 (“February Schedules”). The February Clinic Balance Sheet and the February Schedules shall be referred to as the “February Financial Statements”. Schedule 2.5(b) contains a pro forma estimated balance sheet of the Clinic Business for the period ending March 25, 2004 (“March Estimated Partial Clinic Balance Sheet”) and accompanying estimated schedules of accounts receivable, inventory, property, plant and equipment, prepaid expenses, accounts payable and accrued expenses for the period ending March 25, 2004 (“March Estimated Partial Schedules”). The March Estimated Partial Clinic Balance Sheet and the March Estimated Partial Schedules shall be referred to as the “March Estimated Partial Financial Statements”). On or prior to April 15, 2004 (“Closing Date Financials Delivery Date”) StarCare shall deliver a pro forma balance sheet of the Clinic Business for the period ending March 31, 2004 (“Closing Date Balance Sheet”) and accompanying schedules of accounts receivable, inventory, property, plant and equipment, prepaid expenses (which are part of the Clinic Assets described herein), accounts payable and accrued expenses (which are part of the obligations being assumed hereunder) for the period ending March 31, 2004 (“Closing Date Schedules”). The Closing Date Balance Sheet and the Closing Date Schedules shall be referred to as the “Closing Date Financial Statements”). The February Financial Statements do, and the

Closing Date Financial Statements shall, fairly and accurately represent the financial condition and results of operation of the Clinic Business as of the date and for the periods set forth therein and do not or will not omit to state any material fact required to be stated therein or necessary to make the statements therein not misleading. Since the date of the February Financial Statements, there has not been any material adverse changes in the operation of the Clinic Business and since such date, the Clinic Business has been operated in the ordinary course. Since the date of the February Financial Statements, StarCare has continued operations of the Clinic Business in the ordinary course of business conducted in a manner consistent with past practices and customs. The accounts receivable shown on the Closing Date Financial Statements shall constitute valid and bona fide receivables arising from services actually performed or goods actually provided by StarCare in the ordinary course of StarCare’s business. The March Estimated Partial Financial Statements reflect StarCare’s best estimate of the financial condition of the Clinic Business for the period ending March 25, 2004, and includes those entries recorded in the ordinary course of business based on payables Received (as defined in below) prior to March 25, 2004 and entries based on StarCare’s best estimate of payables that will be Received after March 25, 2004 for the period prior to the Effective Date. The March Estimated Partial Financial Statements will not reflect all payables (including Utilities) that were incurred on or prior to March 25, 2004. The March Estimated Partial Financial Statements will reflect only those items booked in the ordinary course of StarCare’s business and an estimate of all other charges. The parties acknowledge however, that payables are often sent to the Medical Clinics and the Clinic Corporate Office and not directly to the accounting department of StarCare. Therefore, a bill may be “received” by StarCare, but because of the need to forward the bill to the accounting department and/or the need for accounting department to input the bill, StarCare’s accounting department may not have yet paid the bill or entered it as a payable though technically it was in the possession of an employee of StarCare. In all such cases this process is consistent with StarCare’s normal course of operating its business and StarCare shall not be deemed to have “received” the bill or invoice until it has been processed by its accounting department in the ordinary course of business. References in this Agreement to bills, invoices or payables “Received” in the ordinary course of business shall incorporate the processing time referred to herein.

2.6 Leases and Subleases. Schedule 2.6 contains a true, correct and complete list of all leases and subleases of real property currently being used in the Clinic Business (collectively, the “Clinic Leases”). As set forth in Section 4.8 of this Agreement, the Subleases (as defined therein) incorporate by reference the terms of such Clinic Leases. The parties acknowledge that the Clinic Leases contain obligations of the tenant and/or subtenant for base or minimum rent (“Base Rent”) plus an allocation for other charges such as, property taxes on the underlying real property (“Property Taxes”), common area maintenance and/or operating expenses amounts (“CAM”), insurance (“Insurance”) and utilities in those instances where the landlord under the Clinic Lease is a Landlord Facilitator (“Utilities”) (Base Rent, Property Taxes, CAM, Insurance and Utilities are collectively referred to as “Other Rent Charges”). Base Rent which was due and payable under such Clinic Leases prior to the Effective Date has been paid in full.

With respect to Other Rent Charges:

(i) CAM charges under the Clinic Leases are remitted to the landlord based on “estimates” for each calendar year which subsequently are reconciled with “actual” charges. Except for the Clinic Lease for the Anaheim Clinic which is currently being reconciled and any reconciliation deficiency, if any, will be paid by StarCare, all CAM charges for calendar year 2003 and previous calendar years which were based on “estimates”, have subsequently been reconciled against “actual” charges and no further payments will be owing for CAM charges for such periods. All CAM charges based on “estimated” charges for January/February/March 2004 have been paid in an amount equal to such estimates. The parties acknowledge that subsequent to the Closing Date they will receive CAM reconciliation reports for those Clinic Leases which have CAM charges and that Buyer will be obligated to pay any increased CAM charges for January/February/March 2004 that may become due post-Closing for such pre-Closing period as a result of such reconciliation. Likewise, Buyer shall be entitled to retain any credit for charges that may result should the “actual” CAM charges for January/February/March 2004 be determined to be less than what was actually paid by StarCare.

(ii) Property Taxes are paid directly to the county tax collector for the Clinic Lease for the Euclid Clinic. All Property Taxes for the Euclid Clinic for calendar year 2003 have been paid by StarCare. StarCare received an invoice during March 2004 for the six-month period commencing January 2004 and ending June 2004. StarCare paid the invoice and will treat the prorated portion for April through June as a Pre-Paid Obligation (as defined in Section 4.13). Property Taxes under the Clinic Leases for other than the Euclid Clinic are paid to the landlord under such Clinic Leases based on estimates similar to CAM. StarCare has paid all Property Taxes owing prior to the Effective Date for the Euclid Clinic. Except for the Clinic Lease for the Anaheim Clinic which is currently being reconciled and any reconciliation deficiency, if any, will be paid by StarCare, all Property Tax charges for calendar year 2003 and previous calendar years which were based on “estimates”, have subsequently been reconciled against “actual” charges and no further payments will be owing for Property Taxes for such periods. All Property Taxes for Clinic Leases based on “estimated” amounts for January/February/March 2004 have been paid in an amount equal to such estimates. The parties acknowledge that subsequent to the Closing Date they will receive reconciliation reports from those Clinic Leases which have Property Tax charges and that Buyer will be obligated to pay any increased Property Tax charges for January/February/March 2004 that may become due post-Closing for such pre-Closing period as a result of such reconciliation. Likewise, Buyer shall be entitled to retain any credit for charges that may result should the “actual” Property Tax charges for January/February/March 2004 be determined to be less than what was actually paid by StarCare.

(iii) Insurance for the Clinic Lease for the Euclid Clinic is paid to the landlord. This insurance is paid a year in arrears. All Insurance that is owing by StarCare for calendar year 2003 and prior has been paid. At Closing, StarCare will estimate the taxes for January/February March 2004, based on what was paid for this same period in 2003, and will add this amount to the April capitation payment of Buyer. After the Closing, Buyer shall be responsible for all insurance for the Euclid Clinic, including the insurance for January/February March 2004 when the bill is received in 2005.

(iv) Utilities for the Clinic Leases are billed in arrears (whether Utilities are paid to the landlord or to the utility company). StarCare has paid all bills for Utilities it Received (as

defined in Section 2.5) in the ordinary course of business and hereby represents to Buyer that no Utility bills are “past due”. The parties acknowledge however that subsequent to the Closing Date, Buyer will be responsible for Utility bills other than those Received by StarCare in the ordinary course of business on or prior to the Closing Date.

2.7 Tangible Personal Property. Schedule 2.7 contains a list of each item of furniture, equipment and other tangible personal property with an original cost of $500 or more that is owned by StarCare and pertains to the Clinic Business (“Tangible Personal Property”). StarCare has good, marketable and valid title to all Tangible Personal Property and is owned by it free and clear of Liens except as set forth on Schedule 2.4. Exclusive only of items set forth on Schedule 2.7(b) which are currently in storage or supply rooms at 710 N. Euclid or the Clinic Storage Space, all of the Tangible Personal Property is in operating condition. Except for the representation set forth above, the Tangible Personal Property is sold “AS IS-WHERE IS” with no warranty or representation of any kind as to its physical condition.

2.8 Intellectual Property. Schedule 2.8 lists all intellectual property owned by StarCare that is currently being used in the Clinic Business. Except as listed on Schedule 2.8, StarCare does not pay, nor does it know of any reason it is obligated to pay, any royalties, license fees or other amounts to any person or entity as a result of the use of the intellectual property set forth on Schedule 2.8. To the knowledge of StarCare, its use of the trade names listed on Schedule 2.8, does not infringe on the rights of any third party.

2.9 Contracts. Schedule 2.9 sets forth a list of all contracts, arrangements, and commitments (whether oral or written) to which the Clinic Business is bound (the “Contracts”), which relate to the Clinic Business, and which are being assumed by Buyer. StarCare has delivered to Buyer a correct and complete copy of each Contract. Each of the Contracts is a legal, valid, binding, enforceable agreement of StarCare, in full force and effect, except as enforceability may be restricted, limited or delayed by applicable bankruptcy, insolvency, fraudulent conveyance, or other laws affecting creditor’s rights generally, and except as enforceability is subject to general principles of equity. There is not now and, to the knowledge of StarCare, there has not been claimed or alleged by any person or entity, that a default exists, or an event that with notice or lapse of time or both would constitute a default or event of default, on the part of StarCare, or to the knowledge of StarCare, any other party thereto which default would have a material adverse effect on the Clinic Business. Except as set forth on Schedule 2.2 and Schedule 2.9, no consent from, or notice to any third person or governmental entity is required in order to maintain in full force and effect any of the Contracts, other than consents that have been obtained and are unconditional and in full force and effect, except as enforceability may be restricted, limited or delayed by applicable bankruptcy, insolvency, fraudulent conveyance, or other laws affecting creditor’s rights generally, and except as enforceability is subject to general principles of equity, or consents that will be obtained which will be unconditional and in full force and effect, except as enforceability may be restricted, limited or delayed by applicable bankruptcy, insolvency, fraudulent conveyance, or other laws affecting creditor’s rights generally, and except as enforceability is subject to general principles of equity.

2.10 Legal Proceedings. There is no pending claim, suit, action, legal or administrative proceeding (“Proceeding”), and, to the knowledge of StarCare, no person, entity or authority

(including, but not limited to, any employee, agent, contractor or provider of StarCare has threatened to commence any Proceeding or any investigation that could lead to a Proceeding against StarCare that challenges, or that may have the effect of preventing, delaying, making illegal, or otherwise interfering with, any part of the Transaction. There is no outstanding order, judgment, writ, injunction or decree of any court or any federal, state, local or other governmental department, commission, board, bureau, agency or instrumentality, to which StarCare or any of the other assets owned or used by StarCare in the Clinic Business is subject that has not been fully complied with to the satisfaction of such governmental entity. Except as set forth on Schedule 2.10 (“Existing and Threatened Claims”), there is no Proceeding, nor to the knowledge of StarCare has anyone threatened to commence any Proceeding or any investigation that could lead to a Proceeding against StarCare. Except for the cases entitled Laurie Colebaugh vs. Pinnacle Health Resources, Gateway Medical Group, Inc. Los Angeles Superior Court Case No. BC282583, Colebaugh vs. StarCare Medical Group, Inc., Gateway Medical Group, Inc., Pinnacle Health Resources, Inc. Orange County Superior Court Case No. 03CC01720 (the “Colebaugh Case”), and Ron Herrador vs. Gateway Medical Group Los Angeles Superior Court Central District Case No. BC304297 (“Herrador Case”) (Colebaugh Case and Herrador Case are collectively referred to as, the “Colebaugh/Herrador Cases”) listed on Schedule 2.10 as two of the Existing and Threatened Claims, the insurance coverage of StarCare, or in the case of actions involving its affiliate Pinnacle, as of the date hereof is sufficient to fully cover all fees, expenses and costs, including attorney fees relating to the defense of such actions and all settlement and judgment amounts pertaining to such actions, subject to the policy deductibles and policy limits, exclusive, however, of allegations of fraud and punitive damages. In the Gateway Transaction, Tsoong has agreed to indemnify StarCare for the Colebaugh/Herrador Cases. Irrespective of Tsoong’s indemnification obligations and irrespective that the Existing Threatened Claims are not an assumed liability under this Agreement, the parties agree that to the extent there is a request for information or records pertaining to the Clinic Business or Buyer otherwise has a reasonable request for a status report, StarCare and Buyer shall agree to reasonably cooperate in providing such requested information.

2.11 Compliance with Laws. StarCare is not in violation of any law, rule, regulation or administrative or judicial order pertaining to the Clinic Business (including, without limitation, licensing, health care, federal, state or local laws relating to kickbacks, illegal referrals, illegal billings or the like, drug enforcement, securities, zoning, building, environmental, immigration, civil rights and occupational health and safety laws, regulations, ordinances and codes) and there is no law, rule, regulation or administrative or judicial order applicable to StarCare (as opposed to a law, rule, regulation or administrative or judicial order only applicable to Prospect) that any part of the Transaction would violate, which would have an adverse effect on the Clinic Business or would have the effect of delaying, making illegal or otherwise interfering with, any part of the Transaction. To the best of its knowledge, StarCare has no reason to anticipate that existing circumstances are likely to result in violations of any of the foregoing.

2.12 Employees. Set forth on Schedule 2.12 are the following:

(a) Except only for an acupuncturist named Wellington Cheng (“Dr. Cheng”) whose employment has been terminated by StarCare prior to the Closing Date, a complete and accurate list of the names, titles, dates of hire and rates of pay of all employees of StarCare

and/or Pinnacle that pertain to the Clinic Business. Except as set forth separately on Schedule 2.12, all employees are “at will” employees and no written or oral employment, consultant or independent contractor agreement exists with respect to StarCare or Pinnacle or to which StarCare or Pinnacle may be bound with respect to these employees.

(b) Except for those physician employees listed on Schedule 2.12 (excluding only Dr. Cheng) as having an employment or independent contractor agreement with the Clinic Business (“Existing Closing Date Physicians”), all employees listed on Schedule 2.12 have been, or shall be, terminated by the close of business on the Closing Date so that they are made available for employment by Buyer commencing the Effective Date (“Terminated Employees”). Except as otherwise provided in Section 4.6, none of the employment or independent contractor agreements with the Existing Closing Date Physicians (“Existing Physician Employment Contracts”), has been, or shall be, terminated by StarCare. As set forth in Section 4.6, all Existing Physician Employment Contracts are being assigned under this Agreement and liabilities and/or obligations to such Existing Closing Date Physicians which arise on or after the Effective Date, are being assumed by Buyer. All compensation and benefits which was or is required to be paid to the Terminated Employees and the Existing Closing Date Physicians on or prior to the Closing Date has been paid.

Except as set forth in Schedule 2.12, neither StarCare nor Pinnacle is a party to, bound by, nor do they maintain or make any contribution to, nor have they incurred any expense with respect to any employment agreement, pension, retirement, deferred compensation, profit sharing, bonus or incentive plan, medical, dental or other health insurance plan, life insurance plan, or other employee benefit plan, program, arrangement or undertaking, whether or not legally binding (including, without limitation, any “employee benefit plan” as defined in Section 3(3) of the federal Employee Retirement Income Security Act (“ERISA”)), under which employees of the Clinic Business are eligible to participate or derive a benefit (collectively “Employee Plans” and individually “Employee Plan”).

There is no liability of the Clinic Business which has not been properly accrued on the February Financial Statements or the March Estimated Partial Financial Statements for any Employee Plan or unpaid compensation, tax withholdings, wrongful termination, Federal Insurance Contribution Act and disability payments of any kind with respect to any employee or independent contractor providing services to StarCare and/or Pinnacle, including without limitation, vacation pay, sick leave pay, personal day pay, severance pay and bonus pay.

All obligations arising from the notice of termination given to Dr. Cheng, including but not limited to any salary and benefits (including PTO) for the notice period in Dr. Cheng’s employment agreement or any COBRA continuation coverage obligations shall be paid by StarCare. StarCare has paid or shall pay, on or prior to the Closing Date, any amounts owing physicians pursuant to performance bonus awards for calendar year 2003. The parties acknowledge that two physicians shown on Schedule 2.12, namely, Dr. Monta Tsai and Dr. Howard Siegel are currently paid as medical directors of the Clinic Business. StarCare and Pinnacle have agreed that for a period of 6 months from the Closing Date, it will pay $1,000 a month to these two physicians to perform medical director services. All other obligations under

the employment agreements of Dr. Tsai and Dr. Siegel for services after the Effective Date shall be paid by Buyer.

2.13 No Bankruptcy Proceedings. StarCare has not (i) made a general assignment for the benefit of creditors, (ii) filed any voluntary petition in bankruptcy or suffered the filing of an involuntary petition by its creditors, (iii) suffered the appointment of a receiver to take possession of all or substantially all of its assets, property or business, (iv) suffered the attachment or other judicial seizure of all or substantially all of its assets, property or business, (v) admitted in writing its inability to pay its debts as they come due, or (vi) made an offer of settlement, extension or compromise to its creditors generally.

2.14 Licensure. As of the date hereof, each of the employees of StarCare who provide services in the Clinic Business who is required to be licensed in connection with the delivery of health care services is duly licensed without restriction.

2.15 Environmental. StarCare has complied with all federal, state and local environmental laws, rules and regulations as in effect on the date hereof applicable to its business and its assets. To the knowledge of StarCare, no hazardous or toxic waste, substance, material or pollutant (as those or similar terms are defined under the Comprehensive Environmental Response, Compensation and Liability Act of 1980, as amended, 42 U.S.C. 9601 et seq., Toxic Substances Control Act, 15 U.S.C. 2601 et seq., the Resource Conservation and Recovery Act of 1976, 42 U.S.C. 6901 et seq. or any other applicable federal, state and local environmental law, statute, ordinance, order, judgment, rule or regulation relating to the environment or the protection of human health (“Environmental Laws”)), including but not limited to, any asbestos or asbestos related products, oils or petroleum-derived compounds, CFCs or PCBs, have been released, emitted or discharged or are currently located in, on, under, or about the real property on which the Clinic Business is located. The Clinic Business is not in violation of any Environmental Laws nor any occupational, safety and health law now in effect.

2.16 Confidentiality, Non-Solicitation and Non-Compete Arrangements. Except as set forth on Schedule 2.16, the Clinic Business is not a party to or is bound or affected by, any confidentiality, non-solicitation or non-compete agreements or arrangements, or any acquisition or sale or other agreements that contain any confidentiality, non-solicitation, or non-compete agreements or arrangements, that are currently in effect, or are contained in agreements or arrangements that have lapsed but which contain continuing confidentiality non-solicitation or non-compete obligations, agreements or arrangements.

2.17 Reimbursement. As of the date hereof:

(a) StarCare participates in the Medicare and Medicaid programs and in other applicable governmental health care payment programs, and has been and, to the knowledge of StarCare, will continue to be authorized to receive reimbursement from such programs for fees and charges incurred by eligible patients for services of such programs. StarCare has not received any notice that any such license, participation or authorization has been or is threatened to be terminated or restricted, and StarCare does not know of any basis for any such termination or restriction. There is no federal or state investigation pending or, to the best knowledge of the

StarCare, contemplated, that will have an impact upon the reimbursement status of StarCare or StarCare’s ability to operate its business as currently conducted. StarCare has not received any notice of action nor, to the knowledge of StarCare, is there any threatened or likely action by the Medicare or Medicaid program or any carrier, to recoup or challenge any Medicare or Medicaid reimbursement that StarCare has received or for which StarCare currently has a claim pending for services rendered in connection with its business.

(b) All billing practices by StarCare to all third parties including, but not limited to, Medicare, Medicaid and private insurance companies, have been true, fair and correct and in compliance with all applicable laws, regulations and policies of all such third party payors, and StarCare has not billed for or received any payment or reimbursement in excess of amounts permitted by law.

2.18 Absence of Certain Business Practices. Neither StarCare nor any of its agents has directly or indirectly (i) offered to pay or solicited any remuneration, in cash or in kind, to, or made any financial arrangements with, any past or present customers, past or present suppliers, contractors, third parties, or third party payors of StarCare in order to obtain business or payments from such persons; other than entertainment activities in the ordinary and lawful course of business; (ii) given or received, or agreed to give or receive, or is aware that there has been made or that there is any agreement to make or receive, any gift or gratuitous payment of any kind, nature or description (whether in money, property or services) to any customer or potential customer, supplier or potential supplier, contractors, third party payor or any other person other than in connection with promotional or entertainment activities in the ordinary and lawful course of business; (iii) made or agreed to make, or is aware that there has been made or that there is any agreement to make any contribution, payment or gift of funds or property to, or for the private use of, any governmental official, employee or agent where either the contribution, payment or gift or the purpose of such contribution, payment or gift is or was illegal under the laws of the United States or under the laws of any state thereof or any other jurisdiction under which such payment, contribution or gift was made; (iv) established or maintained any unrecorded fund or asset for any purpose or made any false or artificial entries on any of its books or records for any reason; or (v) made or agreed to make or is aware that there has been made or that there is any intention to make, any payment to any person with the intention or understanding that any part of such payment would be used for any purpose other than that described in the documents supporting such payment.

2.19 Permits. Schedule 2.19 sets forth a list of all permits, licenses and approvals from federal, state, local and foreign governmental and regulatory bodies (collectively “Permits”) held by the Clinic Business and relating to the assets which are a part of the Transaction. To the knowledge of StarCare, none of the Permits is to be or proposed to be suspended, canceled or revoked or amended, modified or limited in any fashion.

2.20 Fraud and Abuse. Neither StarCare, nor any individual or entity having an ownership interest in, or who is an officer, director or licensed healthcare employee of StarCare has been convicted of, or to the knowledge of StarCare, investigated for, a Medicare or Medicaid health program related offense. To the knowledge of StarCare, no individual or entity having an ownership interest in, or who is an officer, director or licensed healthcare employee of StarCare

has been convicted or charged with any federal or state health program related offense or convicted of, charged with or investigated for a violation of federal or state law related to fraud, theft, embezzlement, breach of fiduciary responsibility, financial misconduct, obstruction of an investigation or controlled substances, or has been excluded or suspended from participation in state health program or has been subject to any order or consent decree of, or criminal or civil fine or penalty imposed by, any court or governmental agency.

2.21 Recoupment. There is no action or, to the knowledge of StarCare, threatened action for recoupment against StarCare, nor is there any request for payments by StarCare to Medicare or of reimbursement from StarCare by Medicare, nor by any other agency affiliated with Medicare, nor by or from any third-party reimburser, including, without limitation, any insurance carrier, pre-paid plan, or any other similar entity, nor is StarCare aware of any basis for such recoupment by any party. StarCare further represents that none of their accounts has been acquired by unlawful special arrangements or kickbacks, or other unlawful acts.

2.22 Insurance. Schedule 2.22 contains a list of all insurance policies maintained by or for the benefit of the Clinic Business, which shall be maintained through the Closing Date.

2.23 No Undisclosed Liabilities. To the knowledge of StarCare, there are no liabilities or obligations of any nature that effect or may affect the Clinic Business (whether known or unknown and whether absolute, accrued, contingent, or otherwise) except: (i) for those shown on the Financial Statements; and (ii) those incurred subsequent to the Financial Statements in the ordinary course of business conducted in a manner consistent with past practices and custom.

2.24 Tax Matters. StarCare is a “C” corporation, and except for StarCare’s status as an “S” corporation from its date of incorporation (February 25, 1999) through December 31, 2002, has never made an “S” election. StarCare has timely filed all income and franchise tax returns required to be filed by it and has timely paid in full all Taxes (defined below) owed by it for the periods ending on December 31, 2002 and has properly accrued, in accordance with generally accepted accounting principles, on the financial statements of StarCare all Taxes for all periods thereafter up to and including December 31, 2003. Except as provided in Schedule 2.24, all tax returns filed by or on behalf of StarCare are true, accurate and complete in all material respects. Except as provided in Schedule 2.24, (i) no action or proceeding for the assessment or collection of any Taxes is pending against StarCare, (ii) no deficiency, assessment or other formal claim for any Taxes has been asserted or made against any of StarCare that has not been fully paid or finally settled; and (iii) no issue has been formally raised by any taxing authority in connection with an audit or examination of any return of Taxes. Except as provided in Schedule 2.24, no federal or state income tax returns of StarCare have been audited or examined, and there are no outstanding agreements or waivers extending the applicable statutory periods of limitation for such Taxes for any period. The audit of the state tax returns of StarCare described on Schedule 2.24 has concluded with a determination by the California Franchise Tax Board that additional taxes and interest of $7,243.00 was due and owing, which amount has been paid. All Taxes that StarCare has been required to collect or withhold have been duly withheld or collected and, to the extent required, have been paid to the proper taxing authority. “Taxes” means taxes, charges, fees, levies, or assessments including, without limitation, income, excise, property, withholding,

payroll, sales and franchise taxes, imposed by federal, state, county, local or foreign government or subdivision or agency thereof, and including any interest, penalties or additions.

2.25 Inspections. Schedule 2.25 sets forth accurately and fully describes (i) all inspections of StarCare by any governmental agency or health plan at any time (A) during the one (1) year period preceding the date of this Agreement wherein a violation was noted or corrective action required pertaining or related to the Clinic Business, or (B) for the last five (5) years wherein a violation was noted or corrective action required and such violation has not been resolved to the satisfaction of such inspecting party.

2.26 Enrollment Information and Eligibility Reports. The enrollment information of the Clinic Business set forth in Attachment A to Schedule 1.2(a) was prepared from the eligibility reports of the health plans who are a party to the contracts shown on Attachment A to Schedule 1.2(a). The enrollment information set forth in Attachment A to Schedule 1.2(a) accurately and completely describes the information provided in the eligibility reports of the health plans as to the enrollment numbers of the Clinic Business as of March 26, 2004.

2.27 Enrollment Information and Eligibility Reports. StarCare has delivered to Buyer all eligibility reports showing monthly enrollment information pertaining to the Clinic Business prepared through and including March 26, 2004, and such are true, accurate and complete based on the information provided by the health plans who are a party to the contracts shown on Attachment A to Schedule 1.2(a).

2.28 Payables Incurred On or Before the Closing Date. All accounts payables incurred by the Clinic Business on or prior to March 25, 2004 (the date of the March Estimated Partial Financial Statements) and for which bills or invoices have been Received by StarCare, have been properly accrued on the March Estimated Partial Financial Statements in the ordinary course of StarCare’s business. All accounts payables incurred by the Clinic Business between March 25, 2004 and the Closing Date and/or for which bills or invoices are Received by StarCare after March 25, 2004 for the period prior to the Closing Date shall be properly accrued on the Closing Date Financial Statements and shall be incurred in the ordinary course of business. As stated in Section 2.5, the parties acknowledge that the March Estimated Partial Financial Statements will not include all payables incurred by StarCare on or prior to March 25, 2004 as some payables are billed subsequent to such date and some bills are “Received” by StarCare after March 25, 2004. In all cases however StarCare has processed such payables consistent with its ordinary course of business and no payable is “past due”.

2.29 Disclosure. No representation or warranty by StarCare contained in this Agreement or in respect of the exhibits, schedules, lists or other documents delivered to Buyer by StarCare and referred to herein or therein, and no statement contained in any certificate furnished or to be furnished by or on behalf of StarCare pursuant hereto or thereto, or in connection with the Transaction, contains, or will contain as of the date such representation or warranty is made or such certificate is or will be furnished, any untrue statement of a material fact, or omits, or will omit to state as of the date such representation or warranty is made or such certificate is or will be furnished, any material fact which is known to the party making the

representation or warranty to be necessary to make the statements contained herein or therein, in light of the circumstances under which they were made, not misleading.

2.30 Brokers’ and Finders’ Fees. StarCare has not incurred any liability to any broker, finder or agent for any brokerage fees, finder’s fees or commissions with respect to the transactions contemplated by this Agreement, and if StarCare has incurred any such liability, such liability shall be and remain the sole responsibility of StarCare, and StarCare shall indemnify, defend and hold Buyer harmless from and against any and all liabilities, losses, damages, claims, causes of action, costs and expenses (including without limitation, reasonable attorneys’ fees), arising out of or relating to such liability.

ARTICLE 3

REPRESENTATIONS AND WARRANTIES OF THE BUYER PARTIES

In order to induce StarCare and Pinnacle to enter into this Agreement and to consummate the Transaction, Buyer and the Shareholders, jointly and severally, make the representations and warranties set forth in this Article 3 as of the Closing Date.

3.1 Organization. Buyer is a professional corporation duly organized, validly existing and in good standing under the laws of the State of California. Buyer has all requisite authority to own, lease, and operate its assets and to carry on its business as currently being conducted.

3.2 Authorization. Each of Buyer and each Shareholder has the power and authority to enter into this Agreement and to consummate the Transaction. All actions on the part of Buyer necessary for the authorization, execution, delivery and performance of this Agreement and the consummation of the Transaction, including all necessary approvals by the shareholders of Buyer, have been or will be taken prior to the Closing Date, and this Agreement (including exhibits, schedules and the ancillary agreements) constitutes the legal, valid and binding obligation of each of Buyer and each Shareholder, enforceable against it in accordance with its terms, except as enforceability may be restricted, limited or delayed by applicable bankruptcy, insolvency, fraudulent conveyance, or other laws affecting creditor’s rights generally, and except as enforceability is subject to general principles of equity.

3.3 No Consent Required. Except as set forth in Schedule 3.3, neither the execution and delivery of this Agreement by the Buyer Parties nor the performance by them of their obligations under this Agreement or the documents required hereunder requires the consent, approval, order or authorization of, or registration, declaration or filing with any governmental entity or any third party that will not have been obtained and delivered to StarCare prior to the Closing Date.

3.4 No Violation of Other Agreements; No Conflicts.

(a) Neither this Agreement nor any part of the Transaction violates, conflicts with or results in a breach of, or shall violate, conflict with or result in a breach of any lease,

contract, document or agreement to which either of the Buyer Parties is a party or by which either of the Buyer Parties may be bound.

(b) Neither the execution and delivery of this Agreement nor the consummation or performance of the Transaction will, directly or indirectly (with or without the giving of notice, or lapse of time, or both):

(i) contravene, conflict with, or result in a violation of any provision of the organizational documents of Buyer;

(ii) contravene, conflict with, or result in a violation of, any legal requirement or any order, judgment or decree to which either of the Buyer Parties may be subject; or

(iii) contravene, conflict with, or result in a violation of any of the terms or requirements of, or give any governmental body the right to revoke, withdraw, suspend, cancel, terminate, or modify, any governmental authorization that is held by either of the Buyer Parties.

3.6 Legal Proceedings. There is no pending Proceeding, and, to the knowledge of the Buyer Parties, no person has threatened to commence any Proceeding nor is there an investigation that could lead to a Proceeding that challenges, or that may have the effect of preventing, delaying, making illegal, or otherwise interfering with, any part of the Transaction.

3.7 Compliance with Laws. Neither of the Buyer Parties or any entity controlled by, under common control with, or controlling them, is in violation of any rule, regulation or administrative or judicial order pertaining to the assets or the business of either of the Buyer Parties (including, without limitation, licensing, health care, federal, state or local laws relating to kickbacks, illegal referrals, illegal billings or the like, drug enforcement, securities, zoning, building, environmental, immigration, civil rights and occupational health and safety laws, regulations, ordinances and codes) and there is no law, rule, regulation or administrative or judicial order that any part of the Transaction would violate which would have the effect of preventing, delaying, making illegal, or otherwise interfering with, any part of the Transaction. To the best of their knowledge, neither of the Buyer Parties has any reason to anticipate that existing circumstances are likely to result in violations of any of the foregoing.

3.8 Due Diligence. The Shareholders acknowledge that they, on behalf of Buyer, were provided the opportunity to conduct a due diligence review of the Clinic Business.

3.9 Disclosure. No representation or warranty by either or both of the Buyer Parties contained in this Agreement or in respect of the exhibits, schedules, lists or other documents delivered to StarCare by the Buyer Parties and referred to herein or therein, and no statement contained in any certificate furnished or to be furnished by or on behalf of either of the Buyer Parties pursuant hereto or thereto, or in connection with the transactions contemplated hereby, contains, or will contain as of the date such representation or warranty is made or such certificate is or will be furnished, any untrue statement of a material fact, or omits, or will omit to

state as of the date such representation or warranty is made or such certificate is or will be furnished, any material fact which is known to the party making the representation or warranty to be necessary to make the statements contained herein or therein, in light of the circumstances under which they were made, not misleading.

3.10 Brokers’ and Finders’ Fees. None of the Buyer Parties has incurred any liability to any broker, finder or agent for any brokerage fees, finder’s fees or commissions with respect to the transactions contemplated by this Agreement, and if the Buyer Parties have incurred any such liability, such liability shall be and remain the sole responsibility of the Buyer Parties, and the Buyer Parties shall indemnify, defend and hold StarCare harmless from and against any and all liabilities, losses, damages, claims, causes of action, costs and expenses (including without limitation, reasonable attorneys’ fees), arising out of or relating to such liability.

ARTICLE 4

ADDITIONAL AGREEMENTS OF THE PARTIES

In order to induce the other party to enter into this Agreement and to consummate the Transaction, StarCare and Pinnacle, on the one hand, and the Buyer Parties, on the other hand, enter into the agreements set forth in this Article 4.

4.1 Indemnification Obligations of StarCare in the Event of Overlapping Indemnification Obligations with the Gateway Transaction. Attached hereto as Schedule 4.1 are the representations and warranties made by Tsoong in the Gateway Transaction that pertain to the Clinic Business (“Gateway Transaction Representation and Warranties”). To the extent the representations and/or warranties of StarCare and/or Pinnacle set forth in this Agreement (“StarCare Representations and/or Warranties”) overlap with and/or or restate the same representation (modified only as necessary to apply to the Clinic Business rather than the entire business of StarCare or Pinnacle), they shall be referred to as “Overlapping Representations and/or Warranties.” Alternatively, to the extent StarCare or Pinnacle has made a StarCare Representation and/or Warranty that does not overlap with and/or restate the same representation (modified only as necessary to apply to the Clinic Business rather than the entire business of StarCare), such shall be referred to as “StarCare Independent Representations and/or Warranties.”

As a result of the existence of Overlapping Representations and/or Warranties, most of the obligations of StarCare to indemnify the Buyer Parties under this Agreement are based on Tsoong’s obligation to indemnify Prospect, and correspondingly StarCare (“Overlapping Indemnification Obligations”). The Buyer Parties and StarCare agree that with respect to the Overlapping Indemnification Obligations, StarCare shall have the obligation to indemnify the Buyer Parties pursuant to Article 6 hereof only if, and then only, to the extent that, Tsoong has the obligation to indemnify Prospect and/or StarCare for a breach of the Overlapping Representations and/or Warranties, provided however that nothing herein shall be deemed or intended to be a waiver of any rights Buyer may have against any third parties other than

StarCare or any entity or person controlled by, under common control with or controlling, StarCare (

Prospect Medical Holdings Inc · 10-12B · On 5/27/04 · EX-2.9

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Prospect Medical Holdings Inc · 10-12B · On 5/27/04 · EX-2.9

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