EXHIBIT 99.5 SECURITY AGREEMENT

EXHIBIT 99.5

SECURITY AGREEMENT

[$10,700,000 loan]

This SECURITY AGREEMENT (as the same may be amended, restated, supplemented or otherwise modified from time to time, this " Security Agreement "), dated as of December 12, 2005 ( “Effective Date” ), is made by INTEGRATED HEALTHCARE HOLDINGS, INC., a Nevada corporation (“ Borrower ”), and MEDICAL PROVIDER FINANCIAL CORPORATION III, a Nevada corporation (“ Lender ”), in connection with that certain Credit Agreement dated as of the date hereof among the Borrower and Lender and certain other “Credit Parties” (as defined therein), (as amended, restated, supplemented or otherwise modified from time to time, the "Credit Agreement" ). Initially capitalized terms used herein and not otherwise defined herein shall have the respective meanings ascribed to such terms in the Credit Agreement.

RECITALS

A.    Borrower is in the business of delivering acute care services to the public through four (4) separate acute care hospital facilities located in Orange County, California ( “Hospital Facilities” ) identified in Annex D to the Credit Agreement; and, along with one or more of the Credit Parties, is also in the business of owning and operating certain medical office buildings and other healthcare businesses related thereto.

B.    Pursuant to that certain Credit Agreement dated as of March 3, 2005, as amended ( “Original Credit Agreement” ) by and between Borrower, the Credit Parties and Medical Provider Financial Corporation II, a Nevada corporation, an affiliate of Lender ( “Original Lender” ), Original Lender loaned $50,000,000 to IHHI, WMC-SA, WMC-A, Chapman and Coastal (the “Acquisition Loan” ) for the purpose of acquiring the Hospital Facilities, and made available to IHHI, WMC-SA, WMC-A, Chapman and Coastal a $30,000,000 line of credit (the “Line of Credit Loan” ) for the purpose of operating the Hospital Facilities (the Acquisition Loan and the Line of Credit Line are hereinafter referred to as the “Original Loan” ).

C.    Borrower under the Credit Agreement has requested that Lender make a new loan in the amount of $10,700,000 ( “New Loan” ) for the purpose of operating the Hospital Facilities. Lender has agreed, on the terms and conditions set forth in this Agreement.

D.    As an inducement to Lender to enter into the Credit Agreement and to make the New Loan to Borrower, Borrower has agreed to grant Lender a Lien on substantially all of the assets of Borrower, including without limitation a security interest in that number of fully-paid shares of Borrower’s common stock equal in value to the amount of the New Loan not repaid at Maturity plus any due and owing interest, Lender’s Costs and attorneys’ fees.

E.    In order to secure the prompt and complete payment, observance and performance of (i) all of Borrower's Obligations under the Credit Agreement, and (ii) all of Borrower's obligations and liabilities hereunder and in connection herewith (all such Obligations and such obligations and liabilities hereunder being hereinafter referred to collectively as the " Liabilities "), the Lender has required, as a condition, among others, to entering into the Credit Agreement and the other Loan Documents, that Borrower execute and deliver this Security Agreement.

F.    Unless otherwise defined herein, capitalized terms used in this Agreement shall have the meanings ascribed to them in Annex A (Definitions) of the Credit Agreement. These Recitals shall be construed as part of the Agreement.

AGREEMENT

NOW, THEREFORE, in consideration of the covenants and conditions hereinafter contained, and for other good and valuable consideration the receipt and sufficiency of which is hereby acknowledged, Borrower and Lender agree as follows:

Section 1.   Defined Terms: Construction .

LIEN: any mortgage, security deed or deed of trust, pledge, hypothecation, assignment, deposit arrangement, lien, charge, claim, security interest, security title, easement or encumbrance, or preference, priority or other security agreement or preferential arrangement of any kind or nature whatsoever (including any lease or title retention agreement, any financing lease having substantially the same economic effect as any of the foregoing, and the filing of, or agreement to give, any financing statement perfecting a security interest under the Uniform Commercial Code or comparable law of any jurisdiction) (collectively, a “ Lien ”).

LOAN: The New Loan and any other advance of monies made by Lender from time to time under the Credit Agreement or any of the other New Loan Documents (collectively, a “ Loan ”).

OBLIGATIONS: all “Obligations” as defined in the Credit Agreement, and all loans, advances, debts, expense reimbursement, fees, liabilities, and obligations for the performance of covenants, tasks or duties or for payment of monetary amounts (whether or not such performance is then required or contingent, or amounts are liquidated or determinable) owing by such Borrower or Credit Party to Lender, of any kind or nature, present or future, whether or not evidenced by any note, agreement or other instrument, whether arising under any of the New Loan Documents or under any other agreement between Borrower and Lender, and all covenants and duties regarding such amounts. This term includes all principal, interest (including interest accruing at the then applicable rate provided in this Security Agreement after the maturity of the New Loan and interest accruing at the then applicable rate provided in this Security Agreement after the filing of any petition in bankruptcy, or the commencement of any insolvency, reorganization or like proceeding, whether or not a claim for post-filing or post-petition interest is allowed in such proceeding), expenses, attorneys’ fees and any other sum chargeable to Borrower under any of the New Loan Documents, and all principal and interest due in respect of the New Loan and all obligations and liabilities of any Guarantor under any Guaranty (collectively, “ Obligations ”).

PERSON: any individual, sole proprietorship, partnership, limited liability partnership, joint venture, trust, unincorporated organization, association, corporation, limited liability company, institution, public benefit corporation, entity or government (whether Federal, state, county, city, municipal or otherwise, including any instrumentality, division, agency, body or department thereof), and shall include such Person’s successors and assigns (collectively, a “ Person ”).

REQUIREMENT OF LAW: As to Borrower, the Articles of Incorporation and By-Laws or other organizational or governing documents of Borrower, and any law, treaty, rule or regulation (including any federal and state health regulations) or determination of an arbitrator or a court or other Governmental Authority, in each case binding upon Borrower or any of its property or to which Borrower or any of its property is subject (collectively, “ Requirement of Law ”).

Section 2.   Grant of Lien .   To secure the prompt and complete payment, observance and performance of the Liabilities, Borrower hereby assigns and pledges to the Lender, and hereby grants to the Lender, a continuing Lien in all of Borrower's right, title and interest in and to all of its property and assets, whether real or personal, tangible or intangible, and whether now owned or existing or hereafter arising or acquired, or in which it now has or at any time in the future may acquire any right, title, or interest, including all of the following property and interests in property in which it now has or at any time in the future may acquire any right, title or interest and wheresoever located (collectively, the " Collateral "):

ACCOUNTS:   All “accounts,” as such term is defined in the Uniform Commercial Code, now owned or hereafter acquired by Borrower, including: (i) all accounts receivable, other receivables, book debts and other forms of obligations (other than forms of obligations evidenced by Chattel Paper or Instruments) (including any such obligations that may be characterized as an account or contract right under the Uniform Commercial Code); (ii) all of Borrower’s rights in, to and under all purchase orders or receipts for goods or services; (iii) all of Borrower’s rights to any goods represented by any of the foregoing (including unpaid sellers’ rights of rescission, replevin, reclamation and stoppage in transit and rights to returned, reclaimed or repossessed goods); (iv) all rights to payment due to Borrower for Goods or other property sold, leased, licensed, assigned or otherwise disposed of, for a policy of insurance issued or to be issued, for a secondary obligation incurred or to be incurred, for energy provided or to be provided, for the use or hire of a vessel under a charter or other contract, arising out of the use of a credit card or charge card, or for services rendered or to be rendered by Borrower or in connection with any other transaction (whether or not yet earned by performance on the part of Borrower); (v) all health care insurance receivables; and (vi) all collateral security of any kind given by Borrower with respect to any of the foregoing (collectively, " Accounts ");

BOOKS AND RECORDS: All books and records of Borrower, including all books, records, board minutes, contracts, licenses, insurance policies, maintenance and warranty records, environmental audits, business plans, files, ledgers, computer programs, computer files, computer discs and other data and Software storage and media devices, computer runs, accounting books and records, financial statements (actual and pro forma), filings with Governmental Authorities and any and all records and instruments relating to the Collateral or Borrower’s business (collectively, " Books and Records ");

CHATTEL PAPER, INSTRUMENTS AND DOCUMENTS: (i) All chattel paper (including tangible chattel paper, intangible chattel paper and electronic chattel paper), rental contracts, and leases (collectively, " Chattel Paper "); (ii) all instruments and all payments thereunder, including all certificated securities and all promissory notes and other evidences of indebtedness, other than instruments that constitute, or are a part of a group of writings that constitute Chattel Paper (collectively, " Instruments "); and (iii) all bills of sale, bills of lading, warehouse receipts and other documents of title, whether or not negotiable, including, without limitation, all other documents which purport to be issued by a Bailee (as defined in Section 4(A) below) or agent and purport to cover goods in any Bailee's or agent's possession which are either identified or are fungible portions of an identified mass, and all documents of title made available to the Lender for the purpose of ultimate sale or exchange of goods or for the purpose of loading, unloading, storing, shipping, transshipping, manufacturing, processing or otherwise dealing with goods in a manner preliminary to their sale or exchange (collectively, " Documents ");

COMMERCIAL TORT CLAIMS: All commercial tort claims set forth from time to time on Schedule 1 hereto, all other commercial tort claims pledged pursuant to a supplement to this Security Agreement pursuant to Section 5 and all payments due or made to Borrower in connection therewith (collectively, “ Commercial Tort Claims ”);

DEPOSIT ACCOUNTS: All deposit accounts (whether general or special), and all funds and amounts therein, whether or not restricted or designated for a particular purpose (collectively, " Deposit Accounts ");

EQUIPMENT: All “equipment” as such term is defined in the Uniform Commercial Code, now owned or hereafter acquired by Borrower, wherever located, including any and all machinery, apparatus, equipment, fittings, furniture, fixtures, motor vehicles and other tangible personal property and all other goods (including Software embedded in such goods) (other than Inventory) of every kind and description that may be now or hereafter used in Borrower’s operations or that are owned by Borrower or in which Borrower may have an interest, and all parts, accessories and accessions thereto and substitutions and replacements therefor (collectively, the " Equipment ");

GENERAL INTANGIBLES: All general intangibles as defined in the Uniform Commercial Code and other intangible property of any kind (other than Accounts, Chattel Paper, commercial tort claims, Deposit Accounts, Investment Property and Letter of Credit Rights), including, without limitation, (i) Payment Intangibles, (ii) the uniform resource locators set forth on Schedule 2 and the internet websites associated therewith; (iii) all rights to payment for loans, money or funds advanced or sold and other obligations receivable (other than Accounts); (iv) customer lists, credit files, correspondence, and advertising materials; (v) contracts and contract rights; (vi) all interests in corporations (including but not limited to that number of fully-paid shares of Borrower’s common stock equal in value to the amount of the New Loan not repaid at Maturity plus any due and owing interest, Lender’s Costs and attorneys’ fees), partnerships, limited liability companies, joint ventures and other unincorporated Persons; (vii) all tax refunds and tax refund claims; (viii) all right, title and interest under leases, subleases, licenses and concessions and other agreements relating to real or personal property (but excluding any interest in the underlying real property or personal property if such personal property constitutes equipment or fixtures); (ix) all payments due or made to Borrower in connection with any requisition, confiscation, condemnation, seizure or forfeiture of any property by any person or governmental authority; (x) all choses in action, causes of action or other claims (other than Commercial Tort Claims), and all payments due or made to Borrower in connection therewith; (xi) all credits with and other claims against carriers and shippers; (xii) all rights to indemnification; (xiii) all rights, priorities and privileges of Borrower relating to intellectual property, whether arising under United States, multinational or foreign laws or otherwise, including (1) all copyrights arising under the laws of the United States, any other country or any political subdivision thereof, whether registered or unregistered and whether published or unpublished, all registrations and recordings thereof and all applications in connection therewith, including all registrations, recordings and applications in the United States Copyright Office or in any foreign counterparts thereof; and the right to obtain all renewals thereof (" Copyrights "); (2) any written agreement naming Borrower as licensor or licensee granting any right under any Copyright, including the grant of any right to copy, publicly perform, create derivative works, manufacture, distribute, exploit or sell materials derived from any Copyright; (3) all letters patent of the United States, any other country or any political subdivision thereof and all reissues and extensions thereof, all applications for letters patent of the United States or any other country and all divisions, continuations and continuations-in-part thereof and all rights to obtain any reissues or extensions of the foregoing (" Patents "), (4) all agreements, whether written or oral, providing for the grant by or to Borrower of any right to manufacture, use, import, sell or offer for sale any invention covered in whole or in part by a Patent, (5) all trademarks, trade names, corporate names, company names, business names, fictitious business names, trade styles, brand names, labels, service marks, logos and other source or business identifiers, and, in each case, all goodwill associated therewith, all registrations and recordings thereof and all applications in connection therewith, in each case whether in the United States Patent and Trademark Office or in any similar office or agency of the United States, any State thereof or any other country or any political subdivision thereof, or otherwise, all common-law rights related thereto, and the right to obtain all renewals thereof (" Trademarks "), (6) any agreement, whether written or oral, providing for the grant by or to Borrower of any right to use any Trademark (collectively, " Intellectual Property ”), trade secrets, and all rights to sue at law or in equity for any infringement or other impairment thereof, including the right to receive all proceeds and damages therefrom, advertising materials, slogans, and all goodwill associated with the foregoing; (xiv) all licenses and permits from any Governmental Authority; (xv) all license agreements and franchise agreements, (xvi) all reversionary interests in pension and profit sharing plans and reversionary, beneficial and residual interest in trusts; (xvii) all proceeds of insurance of which Borrower is beneficiary; and (xviii) all letters of credit, guaranties, liens, security interests and other supporting obligations held by or granted to Borrower (collectively, " General Intangibles ”);

INVENTORY: All inventory as defined in the Uniform Commercial Code, including, without limitation, all goods, including Software embedded in such goods, wherever located, whether in the possession of Borrower or of a Bailee and whether consisting of whole goods, spare parts, components, supplies, materials, or returned or repossessed goods), which are held for sale or lease, which are to be furnished (or have been furnished) under any contract of service or which are raw materials, work in process, finished goods or materials used or consumed in such Borrower's business (collectively, " Inventory ");

INVESTMENT PROPERTY: All of Borrower's investment property, as defined in the Uniform Commercial Code (collectively, " Investment Property ");

LETTER OF CREDIT RIGHTS: All of Borrower's letters of credit and letter of-credit rights, as defined in the Uniform Commercial Code, now owned or hereafter acquired, including rights to payment or performance under a letter of credit, whether or not Borrower, as beneficiary, has demanded or is entitled to demand payment or performance (collectively, " Letter of Credit Rights ");

PAYMENT INTANGIBLES: All “payment intangibles” as such term is defined in the Uniform Commercial Code, now owned or hereafter acquired by Borrower (collectively, “ Payment Intangibles ”).

OTHER PROPERTY: All money, cash and cash equivalents; all property or interests in property now owned or hereafter acquired by Borrower (but only to the extent not excluded from the Collateral elsewhere in this Security Agreement) which now may be owned or hereafter may come into the possession, custody or control of the Lender in any way and for any purpose (whether for safekeeping, deposit, custody, pledge, transmission, collection or otherwise); and all proceeds of loans, including, without limitation, the New Loan made under the Credit Agreement (“ Other Property ”);

PROCEEDS: All “proceeds,” as such term is defined in the Uniform Commercial Code and, in any event, shall include: (i) any and all proceeds of any insurance, indemnity, warranty or guaranty payable to Borrower from time to time with respect to any Collateral; (ii) any and all payments (in any form whatsoever) made or due and payable to Borrower from time to time in connection with any requisition, confiscation, condemnation, seizure or forfeiture of any Collateral by any governmental body, authority, bureau or agency (or any person acting under color of governmental authority); (iii) any claim of Borrower against third parties (a) for past, present or future infringement of any Intellectual Property or (b) for past, present or future infringement or dilution of any Trademark or Trademark license or for injury to the goodwill associated with any Trademark, Trademark registration or Trademark licensed under any Trademark license; (iv) any recoveries by Borrower against third parties with respect to any litigation or dispute concerning any Collateral, including claims arising out of the loss or nonconformity of, interference with the use of, defects in, or infringement of rights in, or damage to, Collateral; (v) all amounts collected on, or distributed on account of, other Collateral, including dividends, interest, distributions and Instruments with respect to Investment Property and pledged Equity Interests; and (vi) any and all other amounts , rights to payment or other property acquired upon the sale, lease, license, exchange or other disposition of Collateral and all rights arising out of Collateral (collectively, “ Proceeds ”).

SOFTWARE: All “software” as such term is defined in the Uniform Commercial Code, now owned or hereafter acquired by Borrower, including all computer programs and all supporting information provided in connection with a transaction related to any program (collectively, “ Software ”).

SUPPORTING OBLIGATIONS: All of Borrower's presently existing and hereafter acquired supporting obligations, as defined in the Uniform Commercial Code (collectively, “ Supporting Obligations ”); and

together, for each component of the Collateral, with all Proceeds thereof, including without limitation accessions and additions thereto, substitutions therefore, and replacements, products thereof and any other property receivable or received from or upon the sale, lease, license, collection, use, exchange or other disposition, whether voluntary or involuntary, of any of the foregoing, including "proceeds" as defined in the Uniform Commercial Code, any and all proceeds of any insurance, indemnity, warranty or guaranty payable to or for the account of any Borrower from time to time with respect to any of the of the foregoing, any and all payments (in any form whatsoever) made or due and payable to Borrower from time to time in connection with any requisition, confiscation, condemnation, seizure or forfeiture of all or any part of the Collateral by any Governmental Authority (or any Person acting under color of Governmental Authority), any and all other amounts from time to time paid or payable under or in connection with any of the foregoing or for or on account of any damage or injury to or conversion of any of the foregoing by any Person, any and all tangible or intangible property received upon the sale or disposition of the foregoing and all proceeds of proceeds.

Section 3.   Borrower Remains Liable . Anything herein to the contrary notwithstanding, (A) Borrower shall remain solely liable under the contracts and agreements included in the Collateral to the extent set forth therein to perform all of its duties and obligations thereunder to the same extent as if this Security Agreement and the other New Loan Documents had not been executed, (B) the exercise by the Lender of any of its rights hereunder or under the New Loan Documents shall not release any Borrower from any of its duties or obligations under the contracts and agreements included in the Collateral and (C) the Lender shall not have any responsibility, obligation or liability under the contracts and agreements included in the Collateral by reason of this Security Agreement or the other New Loan Documents, nor shall the Lender be required or obligated, in any manner, to (i) perform or fulfill any of the obligations or duties of any Borrower thereunder, (ii) make any payment, or make any inquiry as to the nature or sufficiency of any payment received by any Borrower or the sufficiency of any performance by any party under any such contract or agreement or (iii) present or file any claim, or take any action to collect or enforce any claim for payment assigned hereunder.

Section 4.   Representations and Warranties . Borrower represents and warrants, as of the date of this Security Agreement, and as of each date on which representation and warranties under the Credit Agreement shall be made (except for changes permitted or contemplated by this Security Agreement or the other New Loan Documents) until termination of this Security Agreement pursuant to Section 20: