EXHIBIT 10.1
AMENDMENT NO. 1 TO SECURITIES PURCHASE AGREEMENT
This Amendment No. 1 to Securities Purchase Agreement (this "SPA
AMENDMENT") is dated effective as of January 30, 2009, among Integrated
Healthcare Holdings, Inc., a Nevada corporation ("COMPANY"), Kali P. Chaudhuri,
M.D., an individual ("INVESTOR"), and William E. Thomas, an individual
("THOMAS") (for purposes of amendments to Articles IV and VI only). Capitalized
terms used herein and not otherwise defined herein have the meanings set forth
in the SPA (as defined below).
R E C I T A L S
WHEREAS, on July 18, 2008, the parties entered into the SPA, pursuant
to which, among other things, the Company sold to Investor a purchase right to
purchase shares of the Company's Common Stock ("PREVIOUS PURCHASE RIGHT") and
granted to Investor and Thomas certain pre-emptive rights, releases and waivers,
as more fully described in the SPA.
WHEREAS, as a condition and inducement to Investor entering into the
SPA and incurring the obligations and taking the actions set forth therein,
concurrently with the execution and delivery of the SPA, the Company, Lenders,
Healthcare Financial and the Subsidiary Borrowers entered into the Payoff
Agreement. In addition, Investor exercised the Exercised Warrants and entered
into the Option and Standstill Agreement concurrent with his entry into the SPA.
WHEREAS, the Previous Purchase Right expired on January 10, 2009, the
market price of shares of the Company's Common Stock has declined since July 18,
2008, the Company was unable to resolve certain litigation in satisfaction of a
condition to closing of the Previous Purchase Right, and the Company desires to
sell an additional 33,333,333 shares of Common Stock ("ADDITIONAL SHARES"), at a
purchase price of $0.03 per share and to grant a new purchase right as set forth
herein.
WHEREAS, Investor desires to purchase the Additional Shares and obtain
a new purchase right on the terms and subject to the conditions of this
Agreement.
A G R E E M E N T
NOW, THEREFORE, IN CONSIDERATION of the mutual covenants contained in
this Amendment and the Agreement, and for other good and valuable consideration,
the receipt and adequacy of which are hereby acknowledged, the Company and
Investor (and Thomas for purposes of Articles IV and VI of the Agreement, as
amended hereby) agree as follows:
1. DEFINED TERMS.
(a) The following defined terms contained in Article I of the SPA are
hereby amended and restated as follows:
"AGREEMENT" means the SPA, as amended by the SPA Amendment.
"CLOSING" means an Additional Shares Closing or SPR Closing,
each of which shall take place at the offices of Rutan & Tucker, LLP,
611 Anton Boulevard, Suite 1400, Costa Mesa, California 92626 or at
such other location as the parties may agree.
"CLOSING DATE" means an Additional Shares Closing Date or an
SPR Closing Date.
"INVESTMENT AMOUNT" means the portion of the Maximum
Investment Amount elected to be paid by Investor at an SPR Closing.
"OPTION AND STANDSTILL AGREEMENT" means the Option and
Standstill Agreement dated effective as of July 18, 2008, among MPFC I,
MPFC II, Healthcare Financial and Investor, as amended from time to
time in a manner satisfactory to Investor in his sole discretion.
"OUTSIDE DATE" means 5:00 p.m. California time on January 30,
2010.
"PAYOFF AGREEMENT" means the Early Loan Payoff Agreement dated
effective as of July 18, 2008, among the Company, the Subsidiary
Borrowers, Healthcare Financial and Lenders, as amended from time to
time in a manner satisfactory to Investor in his sole discretion.
"SECURITIES" means the Shares, the Warrants, the Warrant
Shares and the Additional Shares.
"TRANSACTION DOCUMENTS" means the SPA, the Payoff Agreement,
the SPA Amendment and any other documents or agreements executed in
connection with the transactions contemplated hereunder and thereunder.
(b) The following defined terms are hereby added to Article I of the
SPA in appropriate alphabetical order:
"ADDITIONAL SHARES" has the meaning set forth in the recitals
to the SPA Amendment.
"ADDITIONAL SHARES CLOSING" means the closing of the purchase
and sale of Additional Shares as contemplated by the SPA Amendment.
"ADDITIONAL SHARES CLOSING DATE" means the date of the
Additional Shares Closing, which shall occur, subject to the terms and
conditions of this Agreement, on or before the later of (i) January 30,
2009 and (ii) the tenth Business Day after full execution and delivery
of the SPA Amendment and the documents referred to in Section 5.1(h) of
this Agreement.
"CAPITAL INCREASE EFFECTIVE TIME" means the date upon which
the Company's authorized capital is increased to 500,000,000 shares of
Common Stock as contemplated by Section 4.12 of this Agreement.
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"MAXIMUM INVESTMENT AMOUNT" means $5,968,268.01, except that
prior to the Capital Increase Effective Time, only an aggregate of up
to $4,468,268.00 of this amount may be invested at SPR Closings.
"SPA" means the Securities Purchase Agreement dated as of July
18, 2008, among the Company, Investor and Thomas.
"SPA AMENDMENT" means Amendment No. 1 to the SPA, among the
Company, Investor and Thomas.
"SPR CLOSING" means a closing, if any, of the purchase and
sale of some or all of the SPR Shares.
"SPR CLOSING DATE" means the date of any SPR Closing, which
shall occur, if at all, on or prior to 5:00 p.m. California time on the
Outside Date.
"SPR SHARES" means Shares purchased at the Per Share Purchase
Price at an SPR Closing pursuant to the Purchase Right.
(c) The defined term "Company Deliverables" is hereby deleted in its
entirety.
2. EXECUTION OF SPA AMENDMENT. Section 2.1 of the SPA is hereby amended
by inserting the following new Section 2.1(c) immediately following Section
2.1(b):
"(c) Effective January 30, 2009, the Company hereby grants to
Investor a new Purchase Right on the terms described in the SPA
Amendment, and Investor shall deliver to the Company on or prior to
January 30, 2009 the balance, if any, of $30,000.00 being paid by
Investor in consideration for Investor's receipt of the new Purchase
Right."
3. SPR CLOSINGS. Section 2.2 of the SPA is hereby amended and restated
to read in its entirety as follows:
"2.2 SPR CLOSINGS AND SPR CLOSING DELIVERIES. Subject to the
terms and conditions set forth in this Agreement (including, without
limitation, the conditions set forth in Article V), on each SPR Closing
Date, the Company shall issue and sell to Investor, and Investor shall
purchase from the Company, the number of Shares equal to the Investment
Amount divided by the Per Share Purchase Price, and:
(a) The Company shall deliver or cause to be
delivered to Investor the following:
(i) irrevocable instructions to the
Company's transfer agent to promptly deliver a
certificate or certificates in denominations
requested by Investor evidencing an aggregate number
of Shares equal to the portion of the Investment
Amount elected to be paid by Investor at the SPA
Closing divided by the Per Share Purchase Price,
registered in the name of Investor;
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(ii) the legal opinions of Company Counsel
addressed to Investor and in such forms as are
reasonably requested by Investor; and
(iii) certificates of officers as required
under Sections 5.1(b) and 5.1(c) of this Agreement;
and
(b) Investor shall deliver or cause to be delivered
to the Company:
(i) the Investment Amount, in United States
dollars and in immediately available funds, by wire
transfer to an account designated in writing by the
Company for such purpose; and
(ii) A duly executed investor certification
required pursuant to Section 3.2(b) of this
Agreement."
4. ADDITIONAL SHARES CLOSING. Article II of the SPA is hereby amended
by inserting the following new Section 2.3 immediately following revised Section
2.2:
"2.3 ADDITIONAL SHARES CLOSING AND DELIVERIES. Subject to the
terms and conditions set forth in this Agreement (including, without
limitation, the conditions set forth in Article V), on the Additional
Shares Closing Date:
(a) The Company shall deliver or cause to be delivered to
Investor:
(i) irrevocable instructions to the Company's
transfer agent to promptly deliver a certificate or
certificates in denominations requested by Investor evidencing
the Additional Shares, registered in the name of Investor;
(ii) a copy of an amendment to the Payoff Agreement,
duly executed by the Company, the Subsidiary Borrowers,
Healthcare Financial and Lenders, in form and substance
satisfactory to Investor;
(iii) the legal opinions of Company Counsel addressed
to Investor and Thomas and in such forms as are reasonably
requested by Investor and Thomas;
(iv) certifications acknowledging and agreeing that
the execution of the Transaction Documents, the consummation
of the transactions contemplated thereby, and/or the exercise
of the Exercised Warrants or the Warrants will not give rise
to or trigger any severance, termination or other rights or
obligations of the Company under any employment, consulting or
similar agreements or arrangements to which the Company, any
member of the Board of Directors of the Company, Ken
Westbrook, Steve Blake, Dan Brothman, Scott Schoeffel or Jerry
Kanaly is a party or is otherwise bound, duly executed by each
party to such agreements or arrangements;
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(v) resolutions of the Board of Directors authorizing
and approving the SPA Amendment and the transactions
contemplated thereby, including without limitation the
increase in authorized capital contemplated by Section 4.12,
which resolutions are certified by the Secretary of the
Company;
(vi) resolutions of the Board of Directors or
Compensation Committee of the Board of Directors of the
Company, as appropriate, ensuring that no awards under the
Company's 2006 Stock Incentive Plan are accelerated by the
execution of the Transaction Documents, the consummation of
the transactions contemplated hereby and thereby, and/or the
exercise of the Exercised Warrants or Warrants, which
resolutions are certified by the Secretary of the Company; and
(vii) certificates of officers as required under
Sections 5.1(b) and 5.1(c) of this Agreement.
(b) Investor shall deliver or cause to be delivered to the
Company:
(i) $1,000,000 in United States dollars, representing
the purchase price of the Additional Shares; and
(ii) A duly executed investor certification required
pursuant to Section 3.2(b) of this Agreement."
5. REPRESENTATIONS AND WARRANTIES OF THE COMPANY. Section 3.1 of the
SPA is hereby amended as follows:
(a) Section 3.1(g) is hereby amended by amended and restated
in its entirety as follows:
"(g) CAPITALIZATION. The only class of capital stock
that the Company is authorized to issue is Common Stock. The
total number of shares of Common Stock outstanding is
161,973,929, excluding the issuances of Additional Shares
being made hereunder. The total number of shares of Common
Stock issuable upon full exercise of options outstanding under
the Company's option plan (whether or not vested or
exercisable) is 9,445,000. Other than rights granted to
Investor and Thomas pursuant to Section 4.9 of this Agreement,
no securities of the Company are entitled to preemptive or
similar rights, and no Person has any right of first refusal,
preemptive right, right of participation, or any similar right
to participate in the transactions contemplated by the
Transaction Documents. Other than the Warrants, the Exercised
Warrants, the 9,445,000 options, the $10.7 Million Note and
the Purchase Right and right to purchase Additional Shares
granted hereunder, there are no outstanding options, warrants,
scrip rights to subscribe to, calls or commitments of any
character whatsoever relating to, or securities, rights or
obligations convertible into or exchangeable for, or giving
any Person any right to subscribe for or acquire, any shares
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of Common Stock, or contracts, commitments, understandings or
arrangements by which the Company or any Subsidiary is or may
become bound to issue additional shares of Common Stock, or
securities or rights convertible or exchangeable into shares
of Common Stock. The issue and sale of the Securities will
not, immediately or with the passage of time, obligate the
Company to issue shares of Common Stock or other securities to
any Person (other than Investor) and will not result in a
right of any holder of Company securities to adjust the
exercise, conversion, exchange or reset price under such
securities, except as set forth in the first paragraph of
Section 3 of each of the Warrants."
(b) Section 3.1(i)(v) is hereby amended and restated in its
entirety as follows:
"(v) the Company has not issued any equity securities
to any officer, director or Affiliate, except pursuant to
existing Company stock option plans or pursuant to this
Agreement."
(c) Section 3.1(j) is hereby amended by inserting the words
"or any current report on Form 8-K or quarterly report on Form 10-Q
filed by the Company for any subsequent period" immediately after the
words "Latest Form 10-K" in each of the three places where the words
"Latest Form 10-K" appear.
(d) Section 3.1(k) is hereby amended by inserting the words
"or any current report on Form 8-K or quarterly report on Form 10-Q
filed by the Company for any subsequent period" immediately after the
words "Latest Form 10-K".
(e) Section 3.1(q) is hereby amended and restated in its
entirety as follows:
"(q) INTERNAL ACCOUNTING CONTROLS. The Company and
the Subsidiaries maintain a system of internal accounting
controls sufficient to provide reasonable assurance that (i)
transactions are executed in accordance with management's
general or specific authorizations, (ii) transactions are
recorded as necessary to permit preparation of financial
statements in conformity with GAAP and to maintain asset
accountability, (iii) access to assets is permitted only in
accordance with management's general or specific
authorization, and (iv) the recorded accountability for assets
is compared with the existing assets at reasonable intervals
and appropriate action is taken with respect to any
differences. The Company has established disclosure controls
and procedures (as defined in Exchange Act Rules 13a-15 and
15d-15) for the Company and designed such disclosure controls
and procedures to ensure that material information relating to
the Company, including its Subsidiaries, is made known to the
certifying officers by others within those entities,
particularly during the period in which the Company's Form
10-K or 10-Q, as the case may be, is being prepared. The
Company's certifying officers have evaluated the effectiveness
of the Company's controls and procedures in accordance with
Item 307 of Regulation S-K under the Exchange Act for the year
ended March 31, 2008 and for each subsequent quarter ended
after that date for which a Form 10-Q has been filed (each
such date, the "EVALUATION DATE"). The Company presented in
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the Latest Form 10-K and each subsequent Form 10-Q the
conclusions of the certifying officers about the effectiveness
of the disclosure controls and procedures based on their
evaluations as of the Evaluation Date. Except as disclosed in
the Latest Form 10-K and each subsequent Form 10-Q, since the
Evaluation Date, there have been no changes in the Company's
internal controls (as such term is defined in Item 308(c) of
Regulation S-K under the Exchange Act) that have materially
affected or are reasonably likely to materially affect, the
Company's internal controls."
(f) Section 3.1(s) is hereby amended by replacing "$30,000"
with "$60,000".
6. OTHER AGREEMENTS OF THE PARTIES. Article IV of the SPA is hereby
amended as follows:
(a) Section 4.1(b) is hereby amended by deleting the words
"Except as set forth in Section 4.1(c), certificates" and replacing
them with the word "Certificates".
(b) Section 4.1(c) is hereby deleted in its entirety.
(c) The introductory clause to Section 4.2 is hereby amended
by deleting the words "At the Closing" and replacing them with the
words "On July 18, 2008,".
(d) Section 4.5 is hereby amended and restated in its entirety
as follows:
"4.5 SECURITIES LAWS DISCLOSURE; PUBLICITY. By 6:00
a.m. (California time) on the Trading Day following the
execution of the SPA, and by 6:00 a.m. (California time) on
the Trading Day following each Closing Date (other than the
Additional Shares Closing Date), the Company shall issue press
releases disclosing the transactions contemplated hereby and
the Closing. On the Trading Day following the execution of the
SPA, and no later than the second Trading Day following the
execution of the SPA Amendment, the Company will file a
Current Report on Form 8-K disclosing the material terms of
the Transaction Documents (and attach or incorporate by
reference as exhibits thereto the Transaction Documents), and
on the Trading Day following each Closing Date (other than the
Additional Shares Closing Date), the Company will file an
additional Current Report on Form 8-K to disclose the Closing.
In addition, the Company will make such other filings and
notices in the manner and time required by the Commission and
the Trading Market on which the Common Stock is listed.
Notwithstanding the foregoing, the Company shall not publicly
disclose the name of Investor, or include the name of Investor
in any filing with the Commission (other than in a
registration statement filed pursuant to Section 4.2 and any
exhibits to filings made in respect of this transaction in
accordance with periodic filing requirements under the
Exchange Act) or any regulatory agency or Trading Market,
without the prior written consent of Investor, except to the
extent such disclosure is required by law or Trading Market
regulations."
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(e) Section 4.8 is hereby amended and restated in its entirety
as follows:
"4.8 USE OF PROCEEDS. The Company will use all of the
proceeds from the exercise of the Exercised Warrants to repay
a portion of the $10.7 Million Note concurrent with the
exercise of the Exercised Warrants, in accordance with the
terms of the Payoff Agreement. The Company will use all of the
proceeds from the sale of Additional Shares and the sale or
sales, if any, of SPR Shares hereunder to repay a portion of
the $10.7 Million Note equal to such proceeds concurrent with
each Closing in accordance with the terms of the Payoff
Agreement. Concurrent with the SPR Closing, if any, at which
the aggregate Investment Amounts paid on or prior to that SPR
Closing Date equal the Maximum Investment Amount, the Company
will pay such additional funds of the Company as needed to
repay the balance of the $10.7 Million Note and any then
outstanding obligations under the $10.7 Million Credit
Facility in accordance with the terms of the Payoff
Agreement."
(f) Section 4.9 is hereby amended and restated in its entirety
as follows:
"4.9 PRE-EMPTIVE RIGHTS. Effective July 18, 2008, the
Company hereby grants to Investor and Thomas pre-emptive
rights with respect to issuances, on or after July 18, 2008,
by the Company of its equity securities or securities or
rights convertible into or exercisable for equity securities
(other than issuances of Additional Shares, SPR Shares, or
shares of Common Stock issued on July 18, 2008 upon exercise
of the Exercised Warrants), where issuance of those securities
or rights would result in dilution of Investor's or Thomas's
beneficial ownership (as calculated by Investor or Thomas for
purposes of Section 13(d) of the Exchange Act) of the Common
Stock of the Company on a fully-diluted basis taking into
account all Common Stock Equivalents (each a "POST-TRANSACTION
PERCENTAGE") to less than his respective beneficial ownership
of the Common Stock of the Company on a fully-diluted basis
taking into account all Common Stock Equivalents immediately
prior to the consummation of the proposed issuance (each a
"PRE-TRANSACTION PERCENTAGE"). Each time the Company proposes
to issue or offer any shares of, or securities or rights
convertible into or exercisable for any shares of, any class
of the Company's equity securities (the "NEW SHARES") that
would reduce Investor's or Thomas's Post-Transaction
Percentage to below his respective Pre-Transaction Percentage,
the Company shall first make a written offer (the "OFFER
NOTICE") to Investor and Thomas of such portion of the New
Shares that would maintain Investor's and Thomas's
Post-Transaction Percentage at a minimum of their respective
Pre-Transaction Percentage (the "PRO RATA SHARE"). The Offer
Notice would state the Company's (A) bona fide intention to
issue or offer the New Shares, (B) the identity of the
Person(s) to whom the New Shares are to be issued or offered,
(C) the number of New Shares to be issued or offered, and (D)
the price and terms upon which it proposes to issue or offer
the New Shares. Investor and/or Thomas may, by written notice
to the Company delivered within thirty (30) days of their
respective receipt of the Offer Notice, elect to purchase, at
the price and on the terms specified in the Offer Notice, up
to the Pro Rata Share. The closing of the sale of such portion
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of the Pro Rata Share as Investor and/or Thomas elect to
purchase shall occur simultaneously with the issuance or sale
of the New Shares to other Person(s) identified in the Offer
Notice, no earlier than forty-five (45) days following
Investor's and Thomas's receipt of the Offer Notice (unless a
shorter period of time is agreed to by Investor and Thomas in
their sole discretion), and the Pro Rata Share shall be priced
equal to the lowest price paid by any of the other Person(s)
identified in the Offer Notice, including any who may be
receiving or purchasing New Shares by virtue of similar
pre-emptive or other purchase rights. If the Company does not
consummate the issuance or sale of the New Shares within sixty
(60) days following Investor's and Thomas's receipt of the
Offer Notice, then the New Shares shall not be offered, issued
or sold unless again offered to Investor and Thomas in
accordance with this Section 4.9. Effective July 18, 2008, the
pre-emptive rights contained in this Section 4.9 shall
supersede and replace the pre-emptive rights contained or
incorporated by reference in the Rescission Agreement. For the
avoidance of doubt, the parties acknowledge and agree that
unless and until this Section 4.9 is specifically terminated
in a writing signed by Investor and Thomas that explicitly
refers to and provides for the termination of this Section
4.9, this Section 4.9 shall survive each Closing and the
Outside Date, regardless of whether any Additional Shares or
SPR Shares are purchased by Investor and notwithstanding any
other termination, expiration or lapse of this Agreement or
the Purchase Right."
(g) Section 4.11 is hereby amended (x) to insert the words
"and amendment" after the words "entry into" in the first sentence
thereof and (y) to insert the following sentence at the end thereof:
"The receipt by Company of funds or other accommodations made by
Investor or Thomas in connection with the Transaction Documents and the
transactions contemplated thereby on any date on or after July 18, 2008
shall constitute a ratification, adoption, and confirmation by Company
and all other Releasing Parties of the provisions of Section 4.11,
which are hereby reiterated in their entirety as of each such date."
(h) The following new Section 4.12 is hereby inserted
immediately following Section 4.11:
"4.12 AUTHORIZED CAPITAL. The Company covenants and
agrees to promptly use all commercially reasonable efforts in
good faith to increase the Company's authorized capital from
time to time as and to the extent necessary to ensure there
are sufficient authorized shares of Common Stock reserved and
available for issuance as contemplated under this Agreement,
subject to Investor's cooperation in approving by vote or
written consent from time to time resolutions approving such
increases in authorized capital. The Company will procure at
its sole expense upon each such authorization and reservation
of shares the listing thereof (subject to issuance or notice
of issuance) on all stock exchanges on which the Common Stock
is then listed or inter-dealer trading systems or markets on
which the Common Stock is then traded. The Company will take
all such actions as may be necessary to assure that such
shares of Common Stock may be so issued without violation of
any applicable law or regulation, or of any requirements of
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any national securities exchange upon which the Common Stock
may be listed or inter-dealer trading system on which the
Common Stock is then traded. In furtherance, and not in
limitation, of the foregoing, the Company covenants and agrees
to prepare and file with the Securities and Exchange
Commission preliminary and definitive versions of a Schedule
14C Information Statement and make such other filings and
mailings to the Company's stockholders as Investor reasonably
requests and/or as otherwise are necessary or appropriate to
cause an increase in the Company's authorized capital to
500,000,000 shares of Common Stock to become effective as soon
as practicable after the Additional Shares Closing Date, with
the goal of obtaining effectiveness of the increase in
authorized capital by March 31, 2009."
7. CONDITIONS PRECEDENT TO CLOSING. Article V of the SPA is hereby
amended as follows:
(a) The introductory clause to Section 5.1 is hereby amended
and restated in its entirety as follows:
"7. CONDITIONS PRECEDENT TO THE OBLIGATION OF INVESTOR TO
PURCHASE THE SHARES. The obligation of Investor to acquire the Shares
at the Closing is subject to the satisfaction or waiver by Investor, at
or before the Closing, of each of the following conditions:"
(b) Section 5.1(a) is hereby amended and restated in its
entirety as follows:
"(a) ELECTION TO EXERCISE PURCHASE RIGHT. In
connection with an SPR Closing, Investor shall have elected,
in his sole discretion, to exercise the Purchase Right, as
follows:
(i) at any time or from time to time on or
after August 1, 2008, Investor may provide written notice to
the Company of his intention to purchase any or all of the SPR
Shares pursuant to the Purchase Right ("ELECTION NOTICE");
(ii) if Investor provides to the Company an
Election Notice pursuant to Section 5.1(a)(i), then the
Closing shall occur on a date mutually acceptable to Investor
and the Company, which date shall be within 30 days after the
Company's receipt of the Election Notice and shall be subject
to the fulfillment of the conditions precedent to Closing
contained in this Article V."
(c) Section 5.1(f) is hereby amended and restated in its
entirety as follows:
"(f) COMPANY DELIVERABLES. The Company shall have
delivered the Company deliverables required in accordance with
Section 2.2 or 2.3, as appropriate."
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(d) Section 5.1(h) is hereby amended and restated in its
entirety as follows:
(e) "(h) OTHER AGREEMENTS. In the case of the Additional
Shares Closing, Investor shall have received duly executed copies of
amendments to the Option and Standstill Agreement and the Payoff
Agreement in form and substance satisfactory to Investor in his sole
discretion. The Payoff Agreement and the Option and Standstill
Agreement (as amended thereby) shall be in full force and effect and
the parties thereto shall be in compliance with their obligations
thereunder.
(f) The following new Section 5.1(j) is hereby inserted
immediately following Section 5.1(i):
"(j) AVAILABLE SHARES. The Company's authorized
capital must be sufficient to cover the issuance of the Shares
at the Closing."
(g) Section 5.2(d) is hereby amended and restated in its
entirety as follows:
"(d) INVESTOR DELIVERABLE. Investor shall have
delivered the Investor deliverables required in accordance
with Section 2.2 or 2.3, as appropriate."
(h) The following new Section 5.2(e) is hereby inserted
immediately following Section 5.2(d):
"(e) AVAILABLE SHARES. The Company's authorized and
unreserved capital must be sufficient to cover the issuance of
the Shares at the Closing. To the extent the Company's
authorized and unreserved capital is insufficient to cover the
issuance of all Shares desired to be purchased by Investor at
the Closing, the Company shall, at Investor's election, be
obligated to issue at the Closing up to the maximum number of
shares of Common Stock that are then available for issuance
without causing the Company's fully-diluted capital stock to
exceed its authorized and unreserved capital. Notwithstanding
the foregoing, however, this condition precedent does not
eliminate or diminish the Company's obligations under Section
4.12 of the Agreement."
8. MISCELLANEOUS. Article VI of the SPA is hereby amended as follows:
(a) Section 6.5 is hereby deleted in its entirety and replaced
with the following:
"6.5 INTENTIONALLY OMITTED."
(b) Section 6.8 is hereby deleted in its entirety and replaced
with the following:
"6.8 NO THIRD-PARTY BENEFICIARIES. This Agreement is
intended for the benefit of the parties hereto and their
respective successors and permitted assigns and is not for the
benefit of, nor may any provision hereof be enforced by, any
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other Person, except for Thomas and except as otherwise set
forth in Section 4.6 (as to each Investor Party) and Section
4.11 (as to each of the Released Parties)."
(c) Section 6.13 is hereby amended by inserting the words "or
Thomas" after the word "Investor" in each place it occurs.
(d) Section 6.15 is hereby amended by inserting ",Thomas"
after the word "Investor".
(e) A new Section 6.17 is hereby inserted immediately
following Section 6.16 as follows:
"6.17 EFFECT OF AMENDMENT. Except as specifically
amended hereby or as provided herein, all terms, conditions,
covenants, representations and warranties contained in the SPA
remain in full force and effect."
[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK
SIGNATURE PAGES FOLLOW]
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IN WITNESS WHEREOF, the parties hereto have caused this Amendment to be
duly executed by their respective authorized signatories as of the date first
indicated above.
INTEGRATED HEALTHCARE HOLDINGS, INC.
By: /S/ KEN WESTBROOK
----------------------------------------
Name: Ken Westbrook
Title: President and CEO
INVESTOR
/S/ KALI P. CHAUDHURI
--------------------------------------------
Kali P. Chaudhuri, M.D.
SHARE ISSUANCE AND DELIVERY INSTRUCTIONS
CERTIFICATES SHOULD BE ISSUED AS FOLLOWS:
Kali P. Chaudhuri, M.D.
3322 Loma Linda Lane
Las Vegas, NV 89121-5716
CERTIFICATES SHOULD BE DELIVERED TO:
Kali P. Chaudhuri, M.D.
c/o Strategic Global Management, Inc.
6800 Indiana Avenue, Suite 130
Riverside, CA 92506
WITH A COPY OF THE FRONT AND BACK OF EACH
CERTIFICATE SENT TO INVESTOR'S COUNSEL AT
THE ADDRESS SET FORTH IN SECTION 6.3
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For purposes of Articles IV and VI of the Agreement, I hereby agree to
the rights and obligations as set forth in Article IV and the miscellaneous
provisions set forth in Article VI, as amended hereby. Except as expressly set
forth in the preceding sentence, I am not a party to the Agreement and have
given no representations, warranties or assurances to any person.
THOMAS
/S/ WILLIAM E. THOMAS
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William E. Thomas
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