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EXHIBIT 10.16.1
INTEGRATED HEALTHCARE HOLDINGS INC.
AMENDMENT TO
COMMON STOCK WARRANT
APRIL 26, 2006
This Amendment to Common Stock Warrant (this "AMENDMENT") is made and
entered into as of the date set forth above (the "EFFECTIVE DATE") by and
between Integrated Healthcare Holdings, Inc., a Nevada corporation (the
"COMPANY"), and Healthcare Financial Management & Acquisitions, Inc., a Nevada
corporation (the "HOLDER").
RECITALS
A. On December 12, 2005, the Company issued a warrant to subscribe for
and purchase a minimum of 26,097,561 shares of Common Stock of the Company
subject to the provisions and upon the terms and conditions set forth therein
(the "WARRANT").
B. The Warrant, a true and correct copy of which is attached hereto as
EXHIBIT A, provides that the number of Shares issuable upon exercise of the
Warrant is subject to adjustment from time to time as set forth therein.
C. A provision of the Warrant provides for adjustment of the number of
Shares issuable upon exercise of the Warrant based on changes in the fair market
value of the Shares (the "FMV ADJUSTMENTS"). D. The Company and Holder desire to
enter into this Amendment to, among other thing's, amend the provision contained
in the Warrant regarding FMV Adjustments.
NOW, THEREFORE, in consideration of the foregoing recitals and the
mutual promises hereinafter set forth and for other good and valuable
consideration the receipt and sufficiency of which is hereby acknowledged, the
parties hereto agree to amend the Warrant as set forth herein and agree as
follows:
AGREEMENT
1. RECITALS. The foregoing Recitals are incorporated by reference as
though fully set forth herein.
2. DEFINITIONS. Unless otherwise defined herein, capitalized terms
shall have the meanings assigned to such terms in the Warrant.
3. AMENDMENT OF FMV ADJUSTMENTS. The first paragraph of Section 3 of
the Warrant is hereby amended to read in its entirety as follows:
"ADJUSTMENT TO THE NUMBER OF SHARES ISSUABLE AND/OR THE
EXERCISE PRICE. The number of Shares issuable upon the exercise of this
Warrant is subject to adjustment from time to time as set forth in this
Section 3. Upon each adjustment pursuant to this Section 3, the Holder
shall thereafter prior to the Expiration Date be entitled to purchase
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the adjusted number of Shares of Common Stock at the Exercise Price.
Notwithstanding anything to the contrary provided herein, the number of
Shares of Common Stock issuable upon the exercise of this Warrant and
the payment of the Exercise Price shall be automatically adjusted to be
the greater of the following: (1) 26,097,561 Shares of Common Stock (as
set forth on page 1 of this Warrant), (2) Shares of Common Stock
representing thirty-one and nine one-hundredths percent (31.09%) of all
Common Stock Equivalents (as defined hereinbelow) of the Company, or
(3) the number of Shares of Common Stock equal to the Outstanding
Amount (as defined hereinbelow) divided by the then current fair market
value (as determined in Section 1(d) hereof) of each Share of Common
Stock; provided , however, that if the number of Shares resulting from
such calculation exceeds the aggregate number of shares of authorized
but unissued Common Stock and authorized and issued Common Stock held
in the Company's treasury then available for issuance upon exercise of
this Warrant (such excess number of Shares is referred to herein as the
"EXCESS WARRANT SHARES"), then the Company shall pay to the Holder or
Holders, upon exercise of this Warrant for all or any portion of the
Excess Warrant Shares, an amount equal to the then current fair market
value (as determined in Section 1(d) hereof) of each Share of Common
Stock multiplied by the number of Excess Warrant Shares for which the
Holder or Holders have exercised their right(s) to purchase pursuant to
this Warrant. For avoidance of doubt and solely for example purposes,
if a) the Outstanding Amount is $5,000,000, b) the aggregate number of
shares of authorized but unissued Common Stock and authorized and
issued Common Stock held in the Company's treasury then available for
issuance upon exercise of this Warrant is 28,000,000, c) the then
current fair market value of each Share of Common Stock is $0.15, and
d) the total number of shares that the Holder or Holders would be
entitled to receive upon exercise of this Warrant in full was
33,333,333 Shares of Common Stock, then upon exercise of this Warrant
in full, the Holder or Holders shall receive 28,000,000 Shares of
Common Stock, the Excess Warrant Shares would be 5,333,333.33 Shares of
Common Stock and the Company shall be obligated to pay the Holder or
Holders an aggregate cash payment of $800,000. As used herein, the term
"OUTSTANDING AMOUNT" shall mean the amount of that certain $10,700,000
loan (the "LOAN") made with respect to the Credit Agreement that is not
repaid at the maturity or default of such Loan plus any accrued and
unpaid interest thereon, Lender's fees, costs and expenses, and
attorneys' fees, as such Outstanding Amount is determined in the sole
and absolute discretion of the Lender. "COMMON STOCK EQUIVALENTS" shall
mean, collectively, (i) all shares of Common Stock issued and
outstanding, (ii) shares of Common Stock issued or deemed issued as a
dividend or distribution, including on any preferred stock, (iii)
shares of Common Stock issued or issuable by reason of a dividend,
stock split, split-up or other distribution on shares of Common Stock,
(iv) shares of Common Stock or Convertible Securities issued or
issuable upon the exercise of rights, options or warrants to subscribe
for, purchase or otherwise acquire Common Stock or Convertible
Securities (as defined hereinbelow) (collectively, "OPTIONS") or shares
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of Common Stock issued or issuable upon the conversion or exchange of
any evidences of indebtedness, shares, preferred stock or other
securities directly or indirectly convertible into or exchangeable for
Common Stock ("CONVERTIBLE SECURITIES"), pursuant to the terms of such
Option or Convertible Security, (v) shares of Common Stock or
Convertible Securities issued or issuable to third parties upon the
exercise of rights, options, warrants or otherwise, including, without
limitation, to suppliers, banks, equipment lessors or other financial
institutions, or to real property lessors, pursuant to a debt
financing, equipment leasing or real property leasing transaction, and
(vi) shares of Common Stock issued or issuable to employees or
directors of, or consultants to, the Corporation or any of its
subsidiaries pursuant to a plan, agreement or arrangement approved by
the Board of Directors of the Company."
4. NET ISSUE EXERCISE. Section 1(c) of the Warrant is hereby amended to
read in its entirety as follows:
"NET ISSUE EXERCISE. In lieu of exercising this Warrant, the
Holder may elect to receive Shares of Common Stock equal to the value
of this Warrant (or the portion thereof being canceled) by surrender of
this Warrant at the principal office of the Company together with
notice of such election, in which event the Company shall issue to the
Holder a number of Shares computed using the following formula:
X = Y (A-B)
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A
Where X = the number of the Shares to be
issued to the Holder.
Y = the number of the Shares purchasable
under this Warrant.
A = the fair market value of one Share
on the date of election under this
Section 1(c).
B = the Exercise Price divided by Y
(as adjusted to the date of such
calculation)."
5. Section 3(d)(ii) of the Warrant is hereby amended to read in its
entirety as follows:
"(ii) in the case of the issuance of shares of Common Stock
for a consideration in whole or in part other than cash, the
consideration other than cash shall be deemed to be the fair market
value thereof as determined by the Appraiser, whose determination shall
be conclusive."
6. The second sentence of Section 8(a) of the Warrant which reads:
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"The Warrants may be divided or combined, upon request to the
Company by the Holder, into one or more 3new warrants representing the
same aggregate number of Warrants."
is hereby amended to read in its entirety as follows:
"The Warrant may be divided or combined, upon request to the
Company by the Holder, into one or more new warrants representing the
same aggregate number of Shares."
7. Section 9(c)(ii) of the Warrant is hereby amended to read in its
entirety as follows:
"(ii) Each Holder of Shares who participates in a registration
pursuant to Section 9 shall indemnify and hold harmless the Company,
each of its directors, each of its officers who have signed any such
registration statement, and each person, if any, who controls the
Company within the meaning of the Securities Act, against any losses,
claims, damages or liabilities. to which the Company, or any such
director, officer or controlling person may become subject under the
Securities Act, the Exchange Act or other federal or state law, insofar
as such losses, claims, damages or liabilities (or actions in respect
thereof) arise out of, or are based upon, any untrue or alleged untrue
statement of any material fact contained in any such registration
statement, or final prospectus, or any amendment or supplement thereto,
or arise out of or are based upon the omission or the alleged omission
to state therein a material fact required to be stated therein or
necessary to make the statements therein not misleading, in each case
to the extent, but only to the extent, that such untrue statement or
alleged untrue statement or omission or alleged omission was made in
any such .registration statement, or final prospectus, or any amendment
or supplement thereto, in reliance upon and in conformity with written
information furnished by such Holder expressly for use in the
preparation thereof; and will reimburse any legal or other expenses
reasonably incurred by the Company, or any such director, officer or
controlling person in connection with investigating or defending
against any such loss, claim, damage, liability or action; provided,
however, that the indemnity agreement contained in this subparagraph
(ii) shall not apply to amounts paid to any claimant in settlement of
any suit or claim unless such payment is first approved by such Holder;
and, provided further, that the aggregate amount payable by a Holder
pursuant to this Section 9(c)(ii) shall not exceed the net proceeds
received by such Holder in the registered offering out of which its
obligations pursuant to this Section 9(c)(ii) arise."
8. Except as set forth herein, the Warrant shall remain unmodified and
in full force and effect.
9. This Amendment may be executed in counterparts, each of which shall
be deemed an original, but all of which together shall constitute one and the
same instrument.
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IN WITNESS WHEREOF, the parties hereto have executed this Amendment to
Common Stock Warrant as of the date and year first above written.
INTEGRATED HEALTHCARE
HOLDINGS, INC., A NEVADA CORPORATION
BY: /s/ Bruce Mogel
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Name: Bruce Mogel
Title: Chief Executive Officer
HEALTHCARE FINANCIAL
MANAGEMENT & ACQUISITIONS, INC.,
A NEVADA CORPORATION
By: /s/ Joseph J. Lampariello
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Name: Joseph J. Lampariello
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Title: PRESIDENT
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