EXHIBIT 99.1
AMENDMENT NO. 1 TO CREDIT AGREEMENT
This AMENDMENT NO. 1 TO CREDIT AGREEMENT (this "AMENDMENT NO. 1"),
dated as of December 18, 2006 ("EFFECTIVE DATE"), is made by and among
INTEGRATED HEALTHCARE HOLDINGS, INC., a Nevada corporation ("IHHI"), WMC-SA,
INC., a California corporation ("WMC-SA"), WMC-A, INC., a California corporation
("WMC-A"), CHAPMAN MEDICAL CENTER, INC., a California corporation ("CHAPMAN"),
COASTAL COMMUNITIES HOSPITAL, INC., a California corporation ("COASTAL"),
PACIFIC COAST HOLDINGS INVESTMENT, LLC, a California limited liability company
("PCHI"), ORANGE COUNTY PHYSICIANS INVESTMENT NETWORK, LLC, a Nevada limited
liability company ("OC-PIN"), GANESHA REALTY, LLC, a California limited
liability company ("GANESHA"), WEST COAST HOLDINGS, LLC, a California limited
liability company ("WEST COAST"), and MEDICAL PROVIDER FINANCIAL CORPORATION II,
a Nevada corporation ("LENDER"). IHHI, WMC-SA, WMC-A, Chapman and Coastal are
sometimes collectively referred to herein as "BORROWERS"; PCHI, Ganesha, and
West Coast are hereinafter together sometimes referred to as the "CREDIT
PARTIES"; and PCHI and OC-PIN are hereinafter together sometimes referred to as
the "GUARANTORS." This Amendment No. 1 amends that certain Credit Agreement
dated as of December 12, 2005 ("CREDIT AGREEMENT") by and between Lender,
Borrowers, the Credit Parties and the Guarantors. Capitalized terms not defined
in this Amendment No. 1 shall have the same meaning as set forth in the Credit
Agreement.
RECITALS
A. Pursuant to the Credit Agreement and related Loan Documents, Lender
extended to Borrowers a loan in the amount of $10,700,000 ("NEW LOAN").
Borrowers, Credit Parties and Guarantors acknowledge and agree that the
aggregate total of principal and interest due and owing under the New Loan as of
December 18, 2006 is $10,763,320.55.
B. Borrowers, the Credit Parties and Guarantors have requested, and
Lender has agreed, that the Credit Agreement be amended on the terms and
conditions set forth below.
AGREEMENT
NOW, THEREFORE, in consideration of the premises and the mutual
covenants hereinafter contained, and for other good and valuable consideration,
the parties hereto agree as follows:
1. RECITALS. The foregoing Recitals are incorporated by reference as if
fully set forth herein.
2. AMENDMENT TO CREDIT AGREEMENT. The Credit Agreement is hereby
amended to provide as follows:
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a. STATED MATURITY DATE. The Stated Maturity Date set forth in
Annex A to the Credit Agreement is hereby changed to March 2, 2007.
b. EXTENSION FEE. Borrowers hereby agree to and shall, on the
Effective Date of this Amendment No. 1, pay to Lender an extension fee
in the amount of $107,000. Said payment shall be made by federal funds
wire transfer to an account designated by Lender.
c. LEGAL FEES. Borrowers hereby agree to and shall, on the
Effective Date of this Amendment No. 1, pay Lender's legal fees, costs
and expenses related to this Amendment No. 1 in the aggregate amount of
$2,500. Said payment shall be made by federal funds wire transfer to an
account designated by Lender.
3. CONFIRMATION OF LOAN DOCUMENTS; CONFIRMATION OF GUARANTIES;
UNCONDITIONAL OBLIGATIONS; WAIVERS. Each of the Borrowers, each of the Credit
Parties, and each of the Guarantors hereby reaffirms, remakes and confirms each
of their respective representations and warranties made in each of the Loan
Documents. In addition, each Guarantor reaffirms and remakes each of their
obligations under its Guaranty and reaffirms and restates each and every term,
condition, and provision of its Guaranty. Each Guarantor reaffirms that its
obligations under its Guaranty are primary and are separate and distinct from
Borrower's obligations. Each Guarantor represents and warrants that it has no
defenses or claims against Lender that would or might affect the enforceability
of its Guaranty and that its Guaranty remains in full force and effect. Each
Guarantor irrevocably and permanently waives any and all rights of subrogation,
reimbursement, indemnity, contribution or any other claim arising from the
existence of performance of its Guaranty which each Guarantor may now or
hereafter have against Borrowers or any other person or entity (or their
respective properties) directly or contingently liable for said obligations.
Each Guarantor understands that if Lender forecloses by trustee's sale on the
Deed of Trust, each Guarantor might then have a defense preventing Lender from
thereafter enforcing said Guarantor's liability for the unpaid balance of the
Loan. This defense arises because the trustee's sale would eliminate Guarantor's
right of subrogation, and therefore Guarantor would be unable to obtain
reimbursement from Borrowers. Each Guarantor specifically waives this defense
and all rights and defenses that said Guarantor may have because the Loan is
secured by real property. This means, among other things: (i) Lender may collect
from each Guarantor without first foreclosing on any real or personal property
collateral pledged by Borrower; and (ii) if Lender forecloses on any real
property collateral pledged by Borrowers: (A) the amount of the Loan may be
reduced only by the price for which the collateral is sold at the foreclosure
sale, even if the collateral is worth more than the sale price; and (B) Lender
may collect from each Guarantor even if Lender, by foreclosing on the real
property collateral, has destroyed any right Guarantor may have to collect from
Borrower. This is an unconditional and irrevocable waiver of any rights and
defenses each Guarantor may have because the Loan is secured by real property.
These rights and defenses include, but are not limited to, any rights or
defenses based upon Section 580a, 580b, 580d, or 726 of the California Code of
Civil Procedure or similar laws in other states. Each Guarantor waives all
rights and defenses arising out of an election of remedies by the Lender, even
though that election of remedies, such as non-judicial foreclosure with respect
to security for a guaranteed obligation, has destroyed said Guarantor's rights
of subrogation and reimbursement against Borrower by operation of Section 580d
of the California Code of Civil Procedure or otherwise.
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4. NO OFFSETS. Each Borrower, each Credit Party and each Guarantor
represents and warrants that it has no offset, credit, claim or setoff against
any amount due or owing under the Loan Documents.
5. ADVICE OF LEGAL COUNSEL. Each Borrower, each Credit Party and each
Guarantor represents, warrants and covenants that it has consulted with and
received advice from its own legal counsel, that it has read this Amendment No.
1 and/or that its legal counsel has explained the contents of this Amendment No.
1, that it understands the terms and conditions of this Amendment No. 1, that it
understands the legal consequences of executing this Amendment No. 1, and agrees
to execute the same.
6. CREDIT AGREEMENT TO REMAIN IN FORCE AND EFFECT . Except as amended
by this Amendment No. 1, the Credit Agreement shall remain in full force and
effect according to its terms. In the event of an inconsistency or conflict
between this Amendment No. 1 and the Credit Agreement, in each instance this
Amendment No. 1 to prevail and govern.
IN WITNESS WHEREOF, this Amendment No. 1 has been duly executed as of
the date first written above.
BORROWERS:
INTEGRATED HEALTHCARE HOLDINGS, INC.,
a Nevada corporation,
By: /s/ Bruce Mogel
Name: Bruce Mogel
Title: Chief Executive Officer
WMC-SA, INC., a California corporation,
By: /s/ Bruce Mogel
Name: Bruce Mogel
Title: Chief Executive Officer
WMC-A, INC., a California corporation,
By: /s/ Bruce Mogel
Name: Bruce Mogel
Title: Chief Executive Officer
COASTAL COMMUNITIES HOSPITAL, INC.,
a California corporation,
By: /s/ Bruce Mogel
Name: Bruce Mogel
Title: Chief Executive Officer
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CHAPMAN MEDICAL CENTER, INC.,
a California corporation,
By: /s/ Bruce Mogel
Name: Bruce Mogel
Title: Chief Executive Officer
GUARANTORS:
PACIFIC COAST HOLDINGS INVESTMENT, LLC,
a California limited liability company,
By: /s/ Anil V. Shah, M.D.
Name: Anil V. Shah, M.D.
Title: Manager
By: /s/ Kali P. Chaudhuri, M.D.
Name: Kali P. Chaudhuri, M.D.
Title: Manager
ORANGE COUNTY PHYSICIANS INVESTMENT
NETWORK, LLC, a Nevada limited
liability company,
By: /s/ Anil V. Shah, M.D.
Name: Anil V. Shah, M.D.
Title: Manager
CREDIT PARTIES:
PACIFIC COAST HOLDINGS INVESTMENT, LLC,
a California limited liability company,
By: /s/ Anil V. Shah, M.D.
Name: Anil V. Shah, M.D.
Title: Manager
By: /s/ Kali P. Chaudhuri, M.D.
Name: Kali P. Chaudhuri, M.D.
Title: Manager
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ORANGE COUNTY PHYSICIANS INVESTMENT
NETWORK, LLC, a Nevada limited liability
company,
By: /s/ Anil V. Shah, M.D.
Name: Anil V. Shah, M.D.
Title: Manager
GANESHA REALTY, LLC, a California
limited liability company,
By: /s/ Kali P. Chaudhuri, M.D.
Name: Kali P. Chaudhuri, M.D.
Title: Manager
WEST COAST HOLDINGS, LLC, a California
limited liability company,
By: /s/ Anil V. Shah, M.D.
Name: Anil V. Shah, M.D.
Title: Manager
LENDER:
MEDICAL PROVIDER FINANCIAL CORPORATION
II, a Nevada corporation,
By: /s/ Joseph J. Lampariello
Joseph J. Lampariello,
President and COO
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