EXHIBIT 10.2
AMENDMENT NO. 1 TO EARLY LOAN PAYOFF AGREEMENT
This AMENDMENT NO. 1 TO EARLY LOAN PAYOFF AGREEMENT (this "PAYOFF
AMENDMENT"), dated effective as of January 30, 2009, is made by and among
Integrated Healthcare Holdings, Inc., a Nevada corporation (the "Company"),
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"), Medical Provider Financial Corporation I, a Nevada corporation
("MPFC I"), Medical Provider Financial Corporation II, a Nevada corporation
("MPFC II"), Medical Provider Financial Corporation III, a Nevada corporation
("MPFC III") and Healthcare Financial Management & Acquisitions, Inc., a Nevada
corporation ("HFMA"). Capitalized terms used herein and not otherwise defined
herein have the meanings set forth in the ELPA (as defined below).
R E C I T A L S
WHEREAS, the parties entered into an Early Loan Payoff Agreement
("ELPA") effective July 18, 2008, pursuant to which Lenders granted to Borrowers
the right and option to extend the Maturity Dates under the $80 Million Credit
Agreement and the $50 Million Credit Agreement for one additional year, and HFMA
agreed to amend the 4.95% Warrant and the 31.09% Warrant in the manner set forth
therein.
WHEREAS, Borrowers have requested that Lenders agree to modify certain
terms of the ELPA in order to facilitate Borrower's ability to consummate the
early payoff contemplated thereby.
WHEREAS, Lenders and HFMA have agreed to Borrowers' request, on the
terms and conditions set forth below.
A G R E E M E N T
NOW, THEREFORE, IN CONSIDERATION of the mutual covenants contained in
this Payoff Amendment and the ELPA, and for other good and valuable
consideration the receipt and adequacy of which are hereby acknowledged, the
parties agree as follows:
1. DEFINED TERMS.
(a) The following defined terms contained in the ELPA are
hereby amended and restated as follows:
"AGREEMENT" means the ELPA, as amended effective as
of the effective date of the Payoff Amendment.
"FIRST CLOSING DATE" means July 18, 2008.
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"SECOND CLOSING DATE" means the Additional Shares
Closing Date (as defined in the Securities Purchase Agreement)
or the first Business Day thereafter.
"SECOND PAYOFF AMOUNT" means $1,000,000.
"SECURITIES PURCHASE AGREEMENT" means that certain
Securities Purchase Agreement dated effective as of July 18,
2008, as amended from time to time, among the Company, Kali P.
Chaudhuri, M.D. ("DR. CHAUDHURI"), and William E. Thomas, an
individual ("MR. THOMAS").
(b) The following defined term is added to the ELPA in
appropriate alphabetical order:
"FULL PAYOFF AMOUNT" means all outstanding principal,
accrued and unpaid interest, and other payment obligations
then due and owing under the $10.7 Million Credit Agreement
and $10.7 Million Note.
"SPR CLOSING" means an SPR Closing (as defined in the
Securities Purchase Agreement).
"SPR CLOSING DATE" means an SPR Closing Date (as
defined in the Securities Purchase Agreement) or the first
Business Day thereafter, or such other date as all of the
parties and Dr. Chaudhuri may agree.
2. EARLY PAYOFF OF $10.7 MILLION CREDIT AGREEMENT. Section 2.1(b) of
the ELPA is hereby amended and restated in its entirety as follows:
"(b) (i) On the Second Closing Date, the Company shall pay or
cause to be paid to MPFC III, in immediately available funds, the
Second Payoff Amount. MPFC III confirms that the rate of interest
applicable to the $10.7 Million Note as of the Second Closing Date is
the Interest Rate defined in the $10.7 Million Credit Agreement, and
that the outstanding principal balance of the $10.7 Million Note as of
the date of execution of the Payoff Amendment is $6,968,268.05 and the
Stated Maturity Date of the $10.7 Million Note is October 8, 2010.
(ii) On each SPR Closing Date, if any, the Company
shall pay or cause to be paid to MPFC III, in immediately available
funds, the Investment Amount (as defined in the Securities Purchase
Agreement) paid to the Company at the SPR Closing.
(iii) On the SPR Closing Date, if any, at which the
aggregate Investment Amount paid on or prior to that SPR Closing Date
equals the Maximum Investment Amount (as defined in the Securities
Purchase Agreement), the Company will pay or cause to be paid to MPFC
III, in immediately available funds, the Full Payoff Amount.
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(iv) Regardless of whether one or more SPR Closings
occurs and regardless of whether the Company receives the Maximum
Investment Amount at one or more SPR Closings, the Company may elect to
pay or cause to be paid to MPFC III, in immediately available funds,
the Full Payoff Amount prior to the Maturity Date (as defined in the
$10.7 Million Credit Agreement) in accordance Section 1.4(a)(iii) of
the $10.7 Million Credit Agreement.
3. OPTION TO EXTEND MATURITY DATES UNDER $80 MILLION CREDIT AGREEMENT
AND $50 MILLION CREDIT AGREEMENT; AMENDMENT OF 4.95% WARRANT AND 31.09% WARRANT.
The introductory clause of Section 2.2(a) of the ELPA, which currently reads
"(a) On condition that payment of the First Payoff Amount has been made pursuant
to Section 2.1(a) hereof," is hereby amended and restated to read in its
entirety as follows:
"(a) On condition that payment of the Full Payoff
Amount has been made on or prior to January 30, 2010,".
4. NO THIRD-PARTY BENEFICIARIES. Section 3.7 of the ELPA is hereby
amended and restated to read in its entirety as follows:
"3.7 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
other Person, other than Dr. Chaudhuri with respect to the
definitions of First Closing Date, Second Closing Date and SPR
Closing Date."
5 EFFECT OF AMENDMENT. A new Section 3.14 is hereby inserted
immediately following Section 3.13 as follows:
"3.14 EFFECT OF AMENDMENT. Except as specifically
amended by the Payoff Amendment, all terms, conditions,
covenants, representations and warranties contained in this
Agreement 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 Payoff
Amendment to be duly executed by their respective authorized signatories as of
the date first indicated above.
INTEGRATED HEALTHCARE HOLDINGS, INC., WMC-A, INC., a California
a Nevada corporation corporation
By: /S/ KEN WESTBROOK By: /S/ KEN WESTBROOK
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Ken Westbrook, President and CEO Ken Westbrook, President and CEO
WMC-SA, INC., a California CHAPMAN MEDICAL CENTER, INC.,
corporation a California corporation
By: /S/ KEN WESTBROOK By: /S/ KEN WESTBROOK
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Ken Westbrook, President and CEO Ken Westbrook, President and CEO
COASTAL COMMUNITIES HOSPITAL, INC., MEDICAL PROVIDER FINANCIAL
a California corporation CORPORATION I, a Nevada corporation
By: /S/ KEN WESTBROOK By: /S/ JOSEPH J. LAMPARIELLO
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Ken Westbrook, President and CEO Joseph J. Lampariello, President
and COO
MEDICAL PROVIDER FINANCIAL MEDICAL PROVIDER FINANCIAL
CORPORATION II, a Nevada corporation CORPORATION III, a Nevada corporation
By: /S/ JOSEPH J. LAMPARIELLO By: /S/ JOSEPH J. LAMPARIELLO
---------------------------------- ---------------------------------
Joseph J. Lampariello, President Joseph J. Lampariello, President
and COO and COO
HEALTHCARE FINANCIAL MANAGEMENT
& ACQUISITIONS, INC.
By: /S/ JOSEPH J. LAMPARIELLO
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Joseph J. Lampariello, President
and COO
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