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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.
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"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
