<PAGE>
Exhibit 10.7
ACKNOWLEDGMENT, WAIVER AND CONSENT
AND AMENDMENT TO CREDIT AGREEMENTS
A. The undersigned
hereby acknowledge that the following agreements are
being entered into substantially concurrent with the execution of
this
Acknowledgment, Waiver and Consent and Amendment to Credit
Agreements:
(i) Settlement Agreement, General Release and Covenant
Not to Sue
("First Settlement Agreement") by and among Integrated Healthcare
Holdings, Inc.
("IHHI"), Anil V. Shah, M.D. ("Dr. Shah"), Orange County Physicians
Investment
Network, LLC ("OC-PIN"), Bruce Mogel ("Mogel"), Pacific Coast
Holdings
Investment, LLC ("PCHI"), West Coast Holdings, LLC, ("WCH"), Dr.
Kali P.
Chaudhuri ("Dr. Chaudhuri"), Ganesha Realty, LLC ("Ganesha"),
William E. Thomas
("Thomas"), Medical Capital Corporation ("MCC"), Medical Provider
Financial
Corporation I ("MPFCI"), Medical Provider Financial Corporation II
("MPFCII")
and Medical Provider Financial Corporation III ("MPFCIII") (MCC,
MPFCI, MPFCII
and MPFCIII are collectively, "MedCap"); and
(ii) Settlement Agreement No. 2 ("Second Settlement
Agreement", and
together with the First Settlement Agreement, the "Settlement
Agreements") by
and among Dr. Shah, OC-PIN, the members of OC-PIN (collectively,
"OC-PIN
Members"), PCHI, WCH, the members of WCH (collectively, "WCH
Members"), Dr.
Chaudhuri, and Ganesha.
B. The undersigned
hereby acknowledge that the Settlement Agreements
require parties thereto to enter into further agreements as
described therein,
including without limitation, a Voting Agreement between Dr.
Chaudhuri and
OC-PIN.
C. The undersigned
hereby acknowledge that the Settlement Agreements
contemplate the occurrence of various transactions and events,
including without
limitation, the dissolution of WCH and restructuring of PCHI, the
dissolution of
OC-PIN, the grant and exercise of an Option and Tag Along Rights
(as defined in
the Settlement Agreements) that will or may result in, among other
things,
changes in actual or beneficial ownership of the parties thereto
and/or
affiliates of those parties, some of whom are Credit Parties under
one or more
of the following credit facilities with MedCap (collectively,
"Credit
Facilities"): (a) the $10,700,000 Credit Agreement dated October 9,
2007 and
related documents (the "$10,700,000 Loan Documents") among MPFCIII,
IHHI, WMC-A,
Inc. ("WMC-A"), WMC-SA, Inc. ("WMC-SA"), Chapman Medical Center,
Inc.
("Chapman"), Coastal Communities Hospital, Inc. ("Coastal") (IHHI,
WMC-A,
WMC-SA, Chapman and Coastal are collectively, "Borrowers"), PCHI,
West Coast,
Ganesha and OC-PIN (PCHI, West Coast, Ganesha and OC-PIN are
collectively,
"Credit Parties"); (b) the $50,000,000 Revolving Credit Agreement
dated October
9, 2007 and related documents (the "$50,000,000 Loan Documents")
among MPFCI and
the Borrowers and Credit Parties; and (c) the $80,000,000 Credit
Agreement dated
October 9, 2007 and related documents (the "$80,000,000 Loan
Documents") among
MPFCII and the Borrowers and Credit Parties.
D. The undersigned
hereby acknowledge that: (a) included in the
$10,700,000 Loan Documents are an Environmental Indemnity Agreement
dated
October 9, 2007 among MPFCIII, the Borrowers, PCHI, WCH and OC-PIN;
a Guaranty
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Agreement dated October 9, 2007 executed by WCH and OC-PIN; and a
Pledge
Agreement dated October 9, 2007 executed by MPFCIII, IHHI, WCH and
Ganesha; (b)
included in the $50,000,000 Loan Documents are an Environmental
Indemnity
Agreement dated October 9, 2007 among MPFCI, the Borrowers, PCHI,
WCH and
OC-PIN; a Guaranty Agreement dated October 9, 2007 executed by WCH
and OC-PIN;
and a Pledge Agreement dated October 9, 2007 executed by MPFCI,
IHHI, WCH and
Ganesha; and (c) included in the $80,000,000 Loan Documents are an
Environmental
Indemnity Agreement dated October 9, 2007 among MPFCII, the
Borrowers, PCHI, WCH
and OC-PIN; a Guaranty Agreement dated October 9, 2007 executed by
WCH and
OC-PIN; and a Pledge Agreement dated October 9, 2007 executed by
MPFCII, IHHI,
WCH and Ganesha.
NOW, THEREFORE, in consideration of
the premises and the mutual covenants
hereinafter contained, and for other good and valuable
consideration, the
undersigned parties hereto agree as follows:
1. The undersigned
hereby agree that if and to the extent that the
agreements, transactions and events contemplated in the Settlement
Agreements
constitute, may constitute or will constitute a "Change of
Control", "Default",
"Event of Default" (as those terms are defined in the Credit
Facilities or the
Warrants (as defined below)) or other breach or default under any
of the Credit
Facilities or the Warrants, the undersigned each hereby waive and
consent to the
waiver of such event, breach or default. Without limitation of the
foregoing,
the undersigned hereby further agree that if and to the extent that
the
agreements, transactions and events contemplated in the Settlement
Agreements
result in the termination or release of the rights and obligations
of WCH
pursuant to the $10,700,000 Loan Documents, the $50,000,000 Loan
Documents and
the $80,000,000 Loan Documents, the undersigned each hereby consent
to such
termination and release and hereby irrevocably waive all objections
thereto.
This Acknowledgment, Waiver and Consent and Amendment to Credit
Agreements shall
be attached to each of the $10,700,000 Credit Agreement,
$50,000,000 Revolving
Credit Agreement and the $80,000,000 Credit Agreement and
constitute amendments
thereof. As used herein, "Warrants" are: (i) the warrant dated
October 9, 2007
issued to Healthcare Financial Management & Acquisitions, Inc.
("HFMA") to
purchase a minimum of 16,880,484 shares of common stock of IHHI
(subject to
certain adjustments described in the warrant), as amended; and (ii)
the warrant
dated December 12, 2005 issued to HFMA to purchase a minimum of
26,097,561
shares of common stock of IHHI (subject to certain adjustments
described in the
warrant), as amended.
2. Notwithstanding
anything in the Settlement Agreements to the
contrary (including, but not limited to, anything to the contrary
set forth in
the Shareholders Agreement attached as Exhibit "A" to the Second
Settlement
Agreement):
a. OC-PIN and each of the OC-PIN Members covenant
and agree not
to cause or permit the dissolution of OC-PIN or cause or permit
OC-PIN to make a
liquidating distribution of it's stock (together a "OC-PIN
Dissolution Event")
at any time prior to the date that all amounts due and owing to
MedCap under
each of the Credit Facilities have been paid in full and satisfied.
The
occurrence of an OC-PIN Dissolution Event will constitute an Event
of Default
under each of the Credit Facilities.
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b. In substitution for the Guaranty of WCH under
each of the
Credit Facilities, and on the Effective Date of this
Acknowledgment, Waiver and
Consent and Amendment to Credit Agreements, PCHI hereby agrees to
and shall
execute and deliver to MedCap the following Guaranty
Agreements:
(i) Guaranty Agreement ($80 Million Credit
Agreement)
attached hereto as EXHIBIT "A";
(ii) Guaranty Agreement ($10.7 Million Credit Agreement)
attached hereto as EXHIBIT "B"; and
(iii) Guaranty Agreement ($50 Million Revolving Credit
Agreement) attached hereto as EXHIBIT "C".
IN WITNESS WHEREOF, the parties
hereto have caused this Acknowledgment,
Waiver and Consent and Amendment to Credit Agreements to be duly
executed by
their respective authorized signatories as of April 2, 2009
("Effective Date").
INTEGRATED HEALTHCARE HOLDINGS, INC., a
Nevada corporation,
By:
/s/ Kenneth K. Westbrook
------------------------------------------
Name: Kenneth K. Westbrook
-------------------------------------
Title: CEO & President
------------------------------------
WMC-SA, INC., a California corporation,
By: /s/
Kenneth K. Westbrook
------------------------------------------
Name: Kenneth K. Westbrook
-------------------------------------
Title: CEO
------------------------------------
WMC-A, INC., a California corporation,
By: /s/ Kenneth K. Westbrook
------------------------------------------
Name: Kenneth K. Westbrook
-------------------------------------
Title:
CEO
------------------------------------
[SIGNATURE PAGE CONTINUES]
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<PAGE>
COASTAL
COMMUNITIES HOSPITAL, INC., a
California corporation,
By: /s/ Kenneth K. Westbrook
------------------------------------------
Name: Kenneth K. Westbrook
-------------------------------------
Title: CEO
------------------------------------
CHAPMAN MEDICAL CENTER, INC., a California
corporation,
By: /s/ Kenneth K. Westbrook
------------------------------------------
Name: Kenneth K. Westbrook
-------------------------------------
Title: CEO
------------------------------------
PACIFIC COAST HOLDINGS INVESTMENT, LLC, a
California limited liability company,
By: /s/ Jacob Sweidan, M.D.
------------------------------------------
Jacob Sweidan, M.D., Manager
By: /s/ Kali P. Chaudhuri, M.D.
------------------------------------------
Kali P. Chaudhuri, M.D., Manager
ORANGE COUNTY PHYSICIANS INVESTMENT NETWORK,
LLC, a Nevada limited liability company,
By: /s/ Anil V. Shah, M.D.
------------------------------------------
Anil V. Shah, M.D., Manager
GANESHA
REALTY, LLC, a California limited
liability company,
By: /s/ Kali P. Chaudhuri
------------------------------------------
Name:
Kali P. Chaudhuri
-------------------------------------
Title: Manager
------------------------------------
[SIGNATURE PAGE CONTINUES]
4
<PAGE>
WEST COAST HOLDINGS, LLC, a California limited
liability company,
By: /s/ Jacob Sweidan, M.D.
------------------------------------------
Name: Jacob Sweidan, M.D.
-------------------------------------
Title: Manager
------------------------------------
MEDICAL PROVIDER FINANCIAL CORPORATION I, a
Nevada corporation,
By: /s/ Joseph J. Lampariello
------------------------------------------
Joseph J. Lampariello, President and COO
MEDICAL PROVIDER FINANCIAL CORPORATION II, a
Nevada corporation,
By: /s/ Joseph J. Lampariello
------------------------------------------
Joseph J. Lampariello, President and COO
MEDICAL PROVIDER FINANCIAL CORPORATION III, a
Nevada corporation,
By: /s/ Joseph J. Lampariello
------------------------------------------
Joseph J. Lampariello, President and COO
HEALTHCARE FINANCIAL MANAGEMENT
& ACQUISITIONS,
INC., a Nevada corporation,
By: /s/ Joseph J. Lampariello
------------------------------------------
Name: Joseph J. Lampariello
-------------------------------------
Title: President and COO
------------------------------------
[SIGNATURE PAGE CONTINUES]
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<PAGE>
MEDICAL CAPITAL CORPORATION, a Nevada
corporation,
By: /s/ Joseph J. Lampariello
------------------------------------------
Name: Joseph J. Lampariello
-------------------------------------
Title: President and COO
------------------------------------
6
<PAGE>
EXHIBIT
"A" TO ACKNOWLEDGEMENT, WAIVER AND CONSENT
GUARANTY AGREEMENT OF PCHI
($80 MILLION CREDIT AGREEMENT)
SEE ATTACHED
1
<PAGE>
GUARANTY AGREEMENT
($80 MILLION CREDIT AGREEMENT)
This GUARANTY AGREEMENT (as the same
may be amended, modified, or
supplemented from time to time, the "Guaranty") is to be effective
as of April
2, 2009 ("Effective Date"), by PACIFIC COAST HOLDINGS INVESTMENT,
LLC, a
California limited liability company ("Guarantor"), in favor of
MEDICAL PROVIDER
FINANCIAL CORPORATION II, a Nevada corporation ("Lender"), with
reference to the
following facts:
RECITALS
A. Guarantor is a
party to that certain Credit Agreement ($80 Million
Facility) dated as of October 9, 2007 (including all annexes,
exhibits and
schedules thereto, and as the same may be and has been amended,
restated,
supplemented, or otherwise modified from time to time, the "Credit
Agreement"),
by and among INTEGRATED HEALTHCARE HOLDINGS, INC., a Nevada
corporation
("IHHI"), WMC-SA, INC., a California corporation ("WMC-SA"), WMC-A,
INC., a
California corporation ("WMC-A"), CHAPMAN MEDICAL CENTER, INC., a
California
corporation ("Chapman"), and COASTAL COMMUNITIES HOSPITAL, INC., a
California
corporation ("Coastal") (IHHI, WMC-SA, WMC-A, Chapman and Coastal
are sometimes
collectively referred to herein as "Borrowers" and individually as
"Borrower");
Guarantor, WEST COAST HOLDINGS, LLC, a California limited liability
company
("West Coast"), GANESHA REALTY, LLC, a California limited liability
company
("Ganesha") and ORANGE COUNTY PHYSICIANS INVESTMENT NETWORK, LLC, a
Nevada
limited liability company ("OC-PIN") (Guarantor, West Coast,
Ganesha and OC-PIN
are referred to collectively in the Credit Agreement as the "Credit
Parties"),
and Lender.
B. Pursuant to the
Credit Agreement, Lender agreed to and did make (i)
a $45,000,000 term loan ("$45,000,000 TERM LOAN") and (ii) a
$35,000,000
non-revolving line of credit loan ("$35,000,000 NON-REVOLVING LINE
OF CREDIT
LOAN") (each as amended, restated, supplemented or otherwise
modified from time
to time, the "LOANS") to the Borrowers. Repayment of the Loans is
evidenced by
(1) that certain $45,000,000 Term Note dated as of October 9, 2007
("$45,000,00
TERM NOTE") and (2) that certain $35,000,000 Non-Revolving Line of
Credit Note
dated as of October 9, 2007 ("$35,000,000 NON-REVOLVING LINE OF
CREDIT NOTE")
(the $45,000,000 Term Note and $35,000,000 Non-Revolving Line of
Credit Note,
each as amended, restated, supplemented or otherwise modified from
time to time,
are sometimes referred to collectively herein as the "NOTES," and
individually
as a "NOTE"). The Credit Agreement, the Notes and all other
agreements,
documents, and instruments evidencing and/or securing the payment
or performance
of the Obligations (as defined in the Credit Agreement), including
all Loan
Documents as defined in the Credit Agreement are hereinafter
collectively
sometimes referred to as the "LOAN DOCUMENTS."
C. The following
agreements are being entered into substantially
concurrent with the execution of this Guaranty:
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(i) Settlement
Agreement, General Release and Covenant Not to Sue
("FIRST SETTLEMENT AGREEMENT") by and among IHHI, Anil V. Shah,
M.D. ("Dr.
Shah"), OC-PIN, Bruce Mogel ("Mogel"), Guarantor, West Coast, Dr.
Kali P.
Chaudhuri ("Dr. Chaudhuri"), Ganesha, William E. Thomas ("Thomas"),
Medical
Capital Corporation ("MCC"), Medical Provider Financial Corporation
I ("MPFCI"),
Lender and Medical Provider Financial Corporation III ("MPFCIII")
(MCC, MPFCI,
Lender and MPFCIII are collectively, "MedCap"); and
(ii) Settlement Agreement No.
2 ("SECOND SETTLEMENT AGREEMENT", and
together with the First Settlement Agreement, the "SETTLEMENT
AGREEMENTS") by
and among Dr. Shah, OC-PIN, the members of OC-PIN, Guarantor, West
Coast, the
members of West Coast, Dr. Chaudhuri, and Ganesha.
D. The Settlement
Agreements require the parties thereto to enter into
further agreements as described therein, including without
limitation, a Voting
Agreement between Dr. Chaudhuri and OC-PIN.
E. The Settlement
Agreements contemplate the occurrence of various
transactions and events, including without limitation, the
dissolution of West
Coast and restructuring of Guarantor, the dissolution of OC-PIN,
the grant and
exercise of an Option and Tag Along Rights (as defined in the
Settlement
Agreements) that will or may result in, among other things, changes
in actual or
beneficial ownership of the parties thereto and/or affiliates of
those parties,
some of whom are Credit Parties under the Credit Agreement.
F. Among other
conditions for entering into the First Settlement
Agreement, Lender has required that the Guarantor guaranty the
payment and
performance of the Guaranty Obligations (defined below), including
repayment of
the Loans.
G. The parties
intend that these Recitals are made a part of this
Guaranty.
AGREEMENT
NOW, THEREFORE, in consideration of
the mutual covenants and agreements
set forth in this Guaranty, and for other good and valuable
consideration, the
receipt and adequacy of which are hereby acknowledged, Guarantor
hereby
covenants, promises and agrees for the benefit of Lender as
follows:
1. DEFINITIONS;
CERTAIN MATTERS OF CONSTRUCTION. Unless otherwise set
forth herein, (a) initially capitalized terms or matters of
construction defined
or established in the Credit Agreement shall be applied herein as
defined or
established therein, (b) any reference to a "Section" shall refer
to the
relevant section of this Guaranty, and (c) the following terms
shall have,
unless otherwise provided elsewhere in this Guaranty, the meanings
set forth
below:
"EQUITY INTEREST" means all shares
of Stock, options and warrants to
purchase equity securities or other forms of equity, membership
interests,
general or limited partnership interests or other equivalents
(regardless of how
designated) of or in a corporation, partnership, limited liability
company or
equivalent entity whether voting or nonvoting, including common
stock, preferred
stock or any other "equity security" (as such term is defined in
Rule 3a11-1 of
the General Rules and Regulations promulgated by the Securities and
Exchange
Commission under the Securities Exchange Act).
2
<PAGE>
"GUARANTY OBLIGATIONS" shall mean
(a) the obligations to repay the Loans
under the Notes, (b) the payment and performance obligations under
the Credit
Agreement, including repayment of the Loans and the Notes, (c)
payment and
performance obligations under the other Loan Documents, (d) all
other
indebtedness, liabilities, and obligations of all Borrowers and the
Credit
Parties to Lender whether now existing or hereafter arising under
the Loan
Documents, and (e) all indebtedness, liabilities, and Obligations
of Guarantors
to Lender whether now existing or hereafter arising under this
Guaranty or in
any of the Loan Documents.
"MATERIAL ADVERSE EVENT" means that
any one or more of the following has
occurred: (a) any representation or warranty in the Credit
Agreement or in any
of the other Loan Documents or in any written statement, report,
financial
statement or certificate made or delivered to Lender by any
Borrower or by any
Credit Party (including Guarantors) is untrue or incorrect in any
material
respect as of the date when made or deemed made; or (b) between the
Effective
Date and the Termination Date, any Borrower or any Credit Party
(including
Guarantors) commit any act or omit to take any act the result of
which
constitutes a fraud or intentional misrepresentation as to
Lender.
"OBLIGATIONS" means all obligations
of Borrower under the Credit
Agreement.
2. GUARANTY.
2.1 GUARANTY OF THE OBLIGATIONS.
(a)
In consideration of making the Loans to Borrowers under
the Credit Agreement, for all other financial accommodations to or
for the
benefit of Borrowers and Credit Parties, for entering into the
First Settlement
Agreement, and for other valuable consideration the receipt and
sufficiency of
which Guarantor hereby acknowledges, Guarantor hereby
unconditionally,
irrevocably and absolutely guaranties to Lender, and its respective
successors,
endorsees, transferees, and assigns, the prompt payment (whether at
stated
maturity, by acceleration or otherwise) and performance of the
Guaranty
Obligations.
(b) This Guaranty constitutes a guaranty of payment
and
performance when due and not of collection, and Guarantor
specifically agrees
that it shall not be necessary or required that Lender, or any of
its
successors, endorsees, transferees, or assigns assert any claim or
demand or
enforce any remedy whatsoever against any Borrower, any other
guarantor, or with
respect to any collateral provided by any Borrower (collectively,
"Collateral"),
before or as a condition to the obligations of Guarantor under this
Guaranty.
2.2 ABSOLUTE AND
IRREVOCABLE GUARANTY. The Guaranty Obligations shall
remain in full force and effect without regard to, and shall not be
impaired or
affected by, or be deemed to be satisfied by, and Guarantor shall
not be
exonerated, discharged, revoked or released by, any of the
following events:
3
<PAGE>
(a) Lender's exercise or enforcement of, or failure or
delay in
exercising or enforcing, legal proceedings to collect any of the
Loans or the
Guaranty Obligations or any power, right, or remedy with respect to
any of the
Loans, the Guaranty Obligations, or the Collateral, including
without
limitation: (i) any action or inaction of Lender to perfect,
protect, or enforce
any lien upon any Collateral; or (ii) any change in the time,
manner, or place
of payment of, or in any other term of, any or all of the Loans or
the Guaranty
Obligations, or any other amendment to, or waiver of, any of the
Notes, any
other Loan Document, or any other agreement or instrument governing
or
evidencing any of the Loans or any of the Guaranty Obligations;
(b) Insolvency, bankruptcy, reorganization,
arrangement,
adjustment, composition, assignment for the benefit of creditors,
appointment of
a receiver or trustee for all or any part of any Borrower's or any
Guarantor's
assets or of the assets of any other Guarantor of the Obligations,
liquidation,
winding-up, or dissolution of any Borrower or any Guarantor, or any
other
guarantor of the Obligations;
(c) Any limitation, discharge, cessation, or partial
satisfaction
of any of the Loans, the Guaranty Obligations, or the obligations
of any other
guarantor of the Obligations, or any invalidity, voidability,
unenforceability,
in whole or in part, of the Notes, this Guaranty, any other Loan
Document, or
any other document evidencing the Loans or Guaranty
Obligations;
(d) Any merger, acquisition, consolidation or change in
structure
of any Borrower or any Guarantor or any other guarantor of the
Obligations; or
any sale, lease, transfer, or other disposition of any or all of
the assets or
Equity Interests of any Borrower or any Guarantor or any other
Guarantor of the
Obligations, including, without limitation, any transfer by any
Borrower of all
or any part of any Collateral, or termination of any Borrower's
existence for
any reason;
(e) Any assignment or other transfer, in whole or in
part, of
Lender's interest in or rights in or under any of the Notes, or any
other Loan
Document, including, without limitation, this Guaranty, or with
respect to any
of the Loans, the Guaranty Obligations, or the Collateral;
(f) Any claim, defense, counterclaim, or setoff that
any Borrower
or any Guarantor or any other Guarantor of the Obligations may have
or assert,
including, without limitation, any defense of incapacity,
disability, or lack of
corporate, organizational or other authority to execute any
document relating to
any of the Loans, the Guaranty Obligations, the Collateral, or this
Guaranty,
other than (i) upon the occurrence of the Termination Date, the
defense of prior
performance, or (ii) any defense based on any applicable provision
of the
Uniform Commercial Code requiring that Collateral be disposed of in
a
commercially reasonable manner;
(g) Any purported revocation by any Guarantor;
(h) Any cancellation, renunciation or surrender of any
pledge,
guaranty, or any debt instrument evidencing any of the Loans or the
Guaranty
Obligations;
4
<PAGE>
(i) The vote, claim, distribution, election,
acceptance, action,
or inaction of Lender in any bankruptcy or reorganization case
related to any of
the Loans, the Guaranty Obligations, or the Collateral; or
(j) Any other action or circumstances that might
otherwise
constitute a defense available to, or a legal or equitable
discharge of, any
surety, any Guarantor or any other Guarantor, except as expressly
provided
herein;
it being agreed that the Guaranty Obligations shall not be
discharged or revoked
or released until the Termination Date.
2.3
DEMAND BY LENDER. In addition to the terms set forth herein,
and in no manner imposing any limitation on such terms, if any of
the
Obligations under any of the Notes or the Credit Agreement or the
other Loan
Documents are declared to be or otherwise becomes immediately due
and payable
due in whole or in part to the occurrence of a Material Adverse
Event(s), then
Guarantor, upon demand in writing therefor by Lender, shall
promptly pay the
Guaranty Obligations to Lender. Payment by Guarantor shall be made
to Lender to
be credited and applied to the Obligations, in immediately
available funds in
lawful money of the United States of America to an account
designated by Lender
or at the address set forth in the Credit Agreement or at any other
address that
may be specified in writing from time to time by Lender as provided
herein. Any
payment received by Lender with respect to any of the Loans or
other Obligations
shall reduce the Guaranty Obligations by the amount of such
payment.
2.4 GUARANTOR WAIVERS. In addition to any other waivers
contained
herein, each Guarantor waives, agrees and acknowledges as follows
and waives any
defense based upon or arising from the following:
(a) The Guaranty Obligations are the immediate,
direct,
primary and absolute liabilities of each Guarantor, and are
independent of, and
not co-extensive with, any of the Loans, the other Obligations or
the
obligations of any other Guarantor of the Obligations. Each
Guarantor expressly
waives any right it may have now or in the future to direct or
affect the manner
or timing of Lender's enforcement of its rights or remedies. Each
Guarantor
expressly waives any right he may have now or in the future to
revoke this
Guaranty. Each Guarantor expressly waives any right it may have now
or in the
future to require Lender to, and Lender shall not have any
liability to, pursue
or enforce first against any Borrower, any of the properties or
assets of any
Borrower, the Collateral or any other security, guaranty or pledge
that may now
or hereafter be held by Lender for any of the Loans or for the
Guaranty
Obligations, or to apply such security, guaranty, or pledge to any
of the Loans
or to the Guaranty Obligations. Each Guarantor shall remain liable
for the
Guaranty Obligations, notwithstanding any judgment Lender may
obtain against any
Borrower or any Guarantor, any other Guarantor of the Obligations,
or any other
Person or entity, or any modification, extension or renewal with
respect
thereto. Lender shall not be under any liability to marshal any
assets in favor
of each Guarantor or in payment of any or all of the Loans or the
Guaranty
Obligations.
(b) Each Guarantor has entered into this Guaranty
based
solely upon his/her/its independent knowledge of each Borrower's
financial
condition, and each Guarantor assumes full responsibility for
obtaining any
further information with respect to each Borrower or the conduct of
each
5
<PAGE>
Borrower's business. Each Guarantor represents that it is now, and
during the
terms of this Guaranty will be, responsible for ascertaining the
financial
condition of each Borrower. Each Guarantor hereby waives any duty
on the part of
Lender to disclose to any Guarantor, and agrees that it is not
relying upon or
expecting Lender to disclose to it, any fact known or hereafter
known by Lender
relating to the operation or condition of any Borrower or its
business or
relating to the existence, liability, or financial condition of any
other
Guarantor of the Obligations. Each Guarantor knowingly accepts the
full range of
risk encompassed in a contract of continuing guaranty, which risk
includes the
possibility that a Borrower may incur further indebtedness after
such Borrower's
financial condition or its ability to pay debts as they mature has
deteriorated.
(c) Except as specifically provided in this Guaranty
or
applicable law, each Guarantor waives, to the fullest extent
permitted by
applicable law (i) notice of the acceptance by Lender of this
Guaranty, (ii)
notice of the existence, creation, payment, nonpayment, performance
or
nonperformance of all or any of the Guaranty Obligations, (iii)
presentment,
demand and protest and notice of presentment, dishonor, intent to
accelerate,
acceleration, protest, default, nonpayment, maturity, release,
compromise,
settlement, extension or renewal of any or all of the Credit
Agreement or the
other Loan Documents, any of the Notes, commercial paper, accounts,
contract
rights, documents, instruments, chattel paper and guaranties at any
time held by
Lender on which Guarantors may be liable in any way, and hereby
ratifies and
confirms whatever Lender may do in this regard, (iv) all rights to
notice and a
hearing prior to Lender's taking possession or control of, or to
Lender's
replevy, attachment or levy upon, the Collateral or any bond or
security which
might be required by any court prior to allowing Lender to exercise
any of its
remedies, (v) all rights to receive notices from Lender with
respect to, or
otherwise sent to, each Guarantor or any other Guarantor of the
Obligations,
(vi) the benefit of all valuation, appraisal, stay, extension,
redemption and
exemption laws, (vii) the benefit of any law purporting to reduce
any
Guarantor's obligation in proportion to the principal obligation
hereby
guarantied, (viii) the benefit of any law purporting to exonerate
any
Guarantor's obligation upon performance or an offer of performance
of the
principal obligation, (ix) notice of any extension, modification,
renewal, or
amendment of any of the terms of any of the Notes or the Credit
Agreement or any
other Loan Document relating to any of the Loans or the Guaranty
Obligations,
(x) notice of the occurrence of any Default or Event of Default
with respect to
any of the Loans, the Guaranty Obligations, the Collateral or
otherwise, and
(xi) notice of any exercise or non-exercise by Lender of any right,
power, or
remedy with respect to any of the Loans, the Guaranty Obligations
or the
Collateral.
(d) If Lender, under applicable law, may proceed to
realize
its benefits under the Credit Agreement or any other Loan Document
providing for
a lien upon any Collateral, whether owned by Borrower or by any
other person or
entity, either by judicial foreclosure or by nonjudicial sale or
enforcement,
Lender, at its sole option, may determine which of its remedies or
rights it may
pursue without affecting any of its rights and remedies under this
Guaranty.
(e) Each Guarantor represents that each of the Loans
and
Guaranty Obligations are and shall be incurred by the Borrowers for
the
permitted uses set forth in the Credit Agreement. Each Guarantor
undertakes all
the risks encompassed in any of the Notes, in the Credit Agreement
and the other
Loan Documents as they may be now or are hereafter agreed upon by
Lender and any
of the Borrowers. Prior to the date this Guaranty terminates,
Lender, in such
manner and upon such terms and at such time as it deems best, and
with or
without notice to each Guarantor, may release, add, subordinate or
substitute
security for the any of the Loans or other Guaranty Obligations in
accordance
with the Credit Agreement.
6
<PAGE>
(f) A separate action or actions may be brought and
prosecuted against any Guarantor whether or not an action is
brought against any
Borrower, or whether any Borrower or any other Guarantor is joined
in any such
action or actions.
2.5 WAIVERS UNDER STATUTES. Each Guarantor makes the
following
waivers:
EACH GUARANTOR WAIVES ALL RIGHTS AND DEFENSES ARISING OUT OF AN
ELECTION OF
REMEDIES BY LENDER, EVEN THOUGH THAT ELECTION OF REMEDIES, SUCH AS
A NONJUDICIAL
FORECLOSURE WITH RESPECT TO SECURITY FOR A GUARANTEED OBLIGATION,
HAS DESTROYED
ANY RIGHTS GRANTED TO EACH GUARANTOR PURSUANT TO NEVADA LAW.
2.6 ADDITIONAL WAIVERS.
(a) Until the Termination Date, each Guarantor waives
any
and all rights of subrogation, reimbursement, indemnification, and
contribution
and any other rights and defenses that are or may become available
to any
Guarantor by reason of applicable state law. This means, among
other things,
that:
(i) Each Guarantor waives and will be unable to
raise
any defense based upon any statute or rule of law which provides
that the
obligation of a surety must be neither larger in amount nor in any
other
respects more burdensome than that of a principal;
(ii) Each Guarantor waives and will be unable to raise
any defense based upon any statute or rule of law which provides
that a creditor
may be required to pursue the principal obligor or the security for
the
principal obligation before seeking enforcement against a guarantor
or security
pledged by such guarantor;
(iii) Each Guarantor waives and will be unable to raise
any defense based upon any statute or rule of law which provides
that a
guarantor's obligations may be limited or exonerated by reason of
the creditor's
alteration of the principal obligation or of another guaranty, or
by reason of
the impairment or suspension of the creditor's rights or remedies
against the
principal, another guarantor, or any security given for the
principal obligation
or given for other guaranties;
(iv) Each Guarantor waives and will be unable to claim
any right to participate in, or the benefit of, any security given
for the
principal obligation now or hereafter held by Lender; and
(v) Each Guarantor waives and will be unable to
claim
any right of subrogation and any right to enforce any remedy which
Lender may
have against any Borrower.
7
<PAGE>
(b) Each Guarantor waives any defense based upon any
lack of
authority of the officers, directors, partners, members, managers,
or agents
acting or purporting to act on behalf of any Borrower or any
principal of any
Borrower or any legal disability or defect in the formation of any
Borrower.
(c) Each Guarantor waives any defense based upon
the
application by any Borrower of the proceeds of any of the Loans for
purposes
other than the purposes represented by Borrowers to Lender or
intended or
understood by Lender or any Guarantor.
(d) Each Guarantor waives the benefit of any statute
of
limitations affecting the liability of any Guarantor hereunder or
the
enforcement hereof, and each Guarantor further agrees that any act
or event
which tolls any statute of limitations applicable to the
obligations of any
Borrower shall similarly operate to toll the statute of limitations
applicable
to any Guarantor's liability hereunder.
(e) Each Guarantor further waives any and all defenses
which
are comparable to the waivers set forth in this Guaranty which
would otherwise
be available to a Guarantor under Nevada or California law (whether
based on a
statute or decisional law) and any other defenses available to
guarantors under
Nevada or California law, whether based on a statute or decisional
law.
2.7 BENEFITS OF GUARANTY. The provisions of this
Guaranty are for
the benefit of Lender and its successors, transferees, endorsees,
and assigns,
and nothing herein shall impair any of the Loans or other
Obligations, as
between Borrower, Guarantors and Lender. No such transfer,
endorsement, or
assignment shall increase or diminish any of the Guaranty
Obligations hereunder.
This Guaranty binds each Guarantor, and no Guarantor may assign,
transfer or
endorse this Guaranty. In the event all or any part of any of the
Loans or other
Obligations are transferred, endorsed or assigned by Lender to any
Person or
Persons, any reference to "Lender" herein shall be deemed to refer
equally to
such Person or Persons.
2.8 CONTINUING GUARANTY. (a) This is a continuing
guaranty, (b)
this Guaranty shall remain in full force and effect until the
Termination Date,
and (c) the Guaranty Obligations hereunder shall extend to each and
every
extension or renewal, if any, of any of the Notes, the Credit
Agreement or other
Loan Documents regardless of whether any of the Loans or other
Guaranty
Obligations, in successive transactions, may be paid, repaid,
advanced or
renewed from time to time.
2.9 SUBORDINATION. Except for compensation and employee
benefits
due any Guarantor from time to time from any Borrower, and all
dividends and
distributions permitted pursuant to the Credit Agreement and the
Pledge
Agreement to be paid or issued to any Guarantor, any and all
present and future
debts and obligations of each Borrower to any Guarantor are hereby
fully and
absolutely subordinated to the right and time of payment in full of
the Guaranty
Obligations to Lender under each of the Note, the Credit Agreement
and the other
Loan Documents. Notwithstanding the foregoing, unless an Event of
Default shall
have occurred, any Borrower may declare and pay dividends to its
shareholders,
including Guarantors, in accordance with its organizational
documents and
applicable law. Any Lien, now existing or hereafter arising, on or
in any of the
assets of any Borrower in favor of Guarantors, whether created by
contract,
assignment, subrogation, reimbursement, indemnity, operation of
law, principles
of equity or otherwise is hereby subordinated in priority to the
liens and
security interests of Lender, now existing or hereafter arising.
The
subordination provisions of this Section 2.9 shall be effective
regardless of
whether demand has been made by Lender and shall remain in effect
until the
Termination Date.
8
<PAGE>
3. REPRESENTATIONS
AND WARRANTIES. To induce Lender to provide the
consideration to each Borrower and each Guarantor described above,
each
Guarantor hereby makes the following representations and
warranties, and each
and all of which survive the execution and delivery of this
Guaranty:
3.1 DUE AUTHORIZATION. The execution, delivery and
performance by
such Guarantor of this Guaranty have been duly authorized by all
necessary
action of such Guarantor.
3.2 BINDING OBLIGATION. This Guaranty constitutes the
legal, valid
and binding obligations of such Guarantor, enforceable against such
Guarantor in
accordance with its terms.
3.3 NO CONFLICTS. To the best of such Guarantor's
knowledge, the
execution, delivery, and performance by such Guarantor of this
Guaranty does not
contravene any law or any contractual restriction binding on or
affecting such
Guarantor, and does not result in or require the creation of any
Lien upon or
with respect to any of its properties.
3.4 CONSENTS. No authorization or approval, or other
action by,
and no notice to or filing with, any governmental authority or
regulatory body
is required for the due execution, delivery and performance by such
Guarantor of
this Guaranty.
3.5 ADDRESS AND LOCATION OF RECORDS. The address of
such
Guarantor's principal place of business is accurately set forth on
the signature
page to this Guaranty.
3.6 NO SETOFF, DEFENSE, OR COUNTERCLAIM. As of the date
of this
Guaranty, the Guaranty Obligations are not subject to any setoff or
defense of
any kind against Lender or any Borrower, and such Guarantor
specifically waives
its right to assert any such defense or right of setoff. The
Guaranty
Obligations shall not be subject to any counterclaims, setoffs, or
defenses
against Lender or any Borrower that may arise in the future, except
for (a) any
defense of prior performance or payment, or (b) any defense based
on any
applicable provision of the Uniform Commercial Code requiring that
Collateral be
disposed of in a commercially reasonable manner, which any
Borrower, Guarantors,
or other guarantor of the Obligations may have or assert.
4. COVENANTS. Each
Guarantor covenants and agrees that until the
Termination Date, each Guarantor shall give prompt written notice
to Lender (in
any event not later than 10 days prior to any change described
below) of (a) any
change in the location of such Guarantor's principal place of
business, (b) any
change in the location of books and records pertaining to its
business, (c) any
change in its name, identity, or structure in any manner which
might make any
financing statement filed in connection with the Loan Documents
incorrect or
misleading.
5. FURTHER
ASSURANCES. Each Guarantor agrees that, at its expense, upon
the written request of Lender, it will promptly execute and deliver
to Lender
any additional instruments or documents reasonably considered
necessary by
Lender to cause this Guaranty to be, become, or remain valid and
effective in
accordance with its terms. Each Guarantor will provide Lender in
writing such
financial and other information with respect to its assets and
liabilities as
Lender shall request, in form reasonably satisfactory to
Lender.
9
<PAGE>
6. REINSTATEMENT.
This Guaranty shall remain in full force and effect
and continue to be effective, as the case may be, if at any time
payment or
performance of any of the Loans or the Guaranty Obligations, or any
part
thereof, pursuant to applicable law, is avoided, rescinded, or
reduced in
amount, or must otherwise be restored or returned by Lender, or any
other
obligee of any of the Loans or the Guaranty Obligations, whether as
a "voidable
preference," "fraudulent conveyance" or otherwise, all as though
such payment or
performance had not been made. In the event that any payment, or
any part
thereof, is avoided, rescinded, reduced, restored or returned, each
of the Loans
or the Guaranty Obligations, as the case may be, shall be
reinstated and deemed
reduced only by such amount paid and not so avoided, rescinded,
reduced,
restored or returned.
7. DEFAULTS AND
REMEDIES. Upon the occurrence and during the
continuance of an Event of Default under any of the Notes or the
Credit
Agreement or other Loan Documents, Lender may declare any or all of
the Guaranty
Obligations, immediately and without demand, notice or legal
process of any
kind, to be, and such Guaranty Obligations shall immediately
become, due and
payable, and then, or at any subsequent time, Lender may exercise
any or all of
its rights and remedies under this Guaranty, any of the Notes, the
Credit
Agreement, and any other Loan Documents, including the exercise of
any rights
and remedies of Lender as a secured party against the Collateral,
and under
applicable law, and in addition may make demand upon Guarantor for
the payment
of the Guaranty Obligations. All Guaranty Obligations shall bear
interest at the
Default Rate from and after the date an Event of Default occurs
under any of the
Notes.
8. APPLICATION OF
PAYMENTS. Any payment made by any Guarantor under
this Guaranty shall be applied by Lender as set forth in the Credit
Agreement.
9.
INDEMNIFICATION. Each Guarantor agrees to and shall indemnify
and
hold Lender, and its officers, directors, employees, agents,
attorneys and
representatives harmless from and against any liabilities, claims
and damages,
including, without limitation, reasonable costs, attorneys' fees,
disbursements
and other expenses incurred or arising by reason of the taking or
the failure to
take action by Lender, in good faith, in respect of any transaction
effected
under this Guaranty, including, without limitation, any action to
enforce
payment of the Guaranty Obligations. The liabilities of each
Guarantor under
this Section 9 shall survive the termination of this Guaranty.
10. NOTICES. All notices
and other communications required or desired to
be served, given or delivered hereunder shall be in writing and
shall be served,
given or delivered as provided in the Credit Agreement.
11. ENTIRE AGREEMENT.
This Guaranty, together with the Credit Agreement,
each of the Notes, and the other Loan Documents constitutes the
entire
agreement, and supersedes all prior and contemporaneous oral and
written
communications and agreements, between the parties with respect to
the subject
matter hereof.
10
<PAGE>
12. LIMITATION OF
LIABILITY. Neither Lender nor any of its officers,
directors, employees, agents, or counsel, shall be liable for any
action
lawfully taken or omitted to be taken by it or them hereunder or in
connection
herewith, except for its or their own respective gross negligence
or willful
misconduct.
13. ADVICE OF COUNSEL.
Each Guarantor represents and warrants that it
has either obtained the advice of counsel or has had the
opportunity to obtain
such advice in connection with the terms and provisions of this
Guaranty.
14. AMENDMENTS. No
amendment or waiver of any provisions of this
Guaranty, or consent to any departure by any Guarantor therefrom,
shall be
effective in any event unless the same shall be in writing and
signed by Lender
and all Guarantors and then such waiver or consent shall be
effective only in
the specific instance and for the specific purpose for which
given.
15. CONSENT TO LOAN
DOCUMENTS. Each Guarantor hereby acknowledges it has
received copies of, and consents to, the Credit Agreement, each of
the Notes,
and all other Loan Documents.
16. NO WAIVER. No
failure on the part of Lender to exercise, and no
delay in exercising, any right under the Credit Agreement of any
other Loan
Document shall operate as a waiver thereof; and no single or
partial exercise of
any right under the Credit Agreement or any other Loan Document
shall preclude
any other or further exercise thereof or the exercise of any other
right. The
remedies provided in the Credit Agreement and other Loan Documents
are
cumulative and not exclusive of any remedies provided by law.
17. BINDING EFFECT. This
Guaranty shall be binding upon and inure to
respective benefits of Lender and all Guarantors and their
respective successors
and assigns, except that no Guarantor shall have the right to
assign its rights
hereunder or any interest herein without Lender's prior written
consent.
18. SEVERABILITY. In the
event that any one or more of the provisions
contained in the Credit Agreement of any other Loan Documents shall
be
determined to be invalid, illegal, or unenforceable in any respect
for any
reason, the validity, legality, and enforceability of any such
provision or
provisions in every other respect, and the remaining provisions of
the Credit
Agreement and other Loan Documents shall not be in any way
impaired.
19. GOVERNING LAW. IN
ALL RESPECTS, INCLUDING ALL MATTERS OF
CONSTRUCTION, VALIDITY AND PERFORMANCE, OF THIS GUARANTY AND OF THE
CREDIT
AGREEMENT, EACH OF THE NOTES AND THE OTHER LOAN DOCUMENTS AND THE
GUARANTY
OBLIGATIONS SHALL BE GOVERNED BY, AND CONSTRUED AND ENFORCED IN
ACCORDANCE WITH,
THE LAWS OF THE STATE OF NEVADA APPLICABLE TO CONTRACTS MADE AND
PERFORMED IN
THAT STATE AND ANY APPLICABLE LAWS OF THE UNITED STATES OF AMERICA.
EACH
GUARANTOR, BY ITS ACCEPTANCE OF THIS GUARANTY, HEREBY CONSENT AND
AGREE THAT THE
STATE OR FEDERAL COURTS LOCATED IN THE STATE OF NEVADA, CLARK
COUNTY, CITY OF
LAS VEGAS, SHALL HAVE EXCLUSIVE JURISDICTION TO HEAR AND DETERMINE
ANY CLAIMS OR
DISPUTES BETWEEN ANY GUARANTOR AND LENDER PERTAINING TO THIS
GUARANTY OR ANY OF
11
<PAGE>
THE OTHER LOAN DOCUMENTS OR TO ANY MATTER ARISING OUT OF OR
RELATING TO THIS
GUARANTY OR ANY OF THE OTHER LOAN DOCUMENTS; PROVIDED, THAT EACH
GUARANTOR
ACKNOWLEDGES THAT ANY APPEALS FROM THOSE COURTS MAY HAVE TO BE
HEARD BY A COURT
LOCATED OUTSIDE OF CLARK COUNTY, NEVADA; PROVIDED FURTHER, THAT
NOTHING IN THIS
GUARANTY SHALL BE DEEMED OR OPERATE TO PRECLUDE LENDER FROM
BRINGING SUIT OR
TAKING OTHER LEGAL ACTION IN ANY OTHER JURISDICTION TO REALIZE ON
THE COLLATERAL
OR ANY OTHER SECURITY FOR THE OBLIGATIONS, OR TO ENFORCE A JUDGMENT
OR OTHER
COURT ORDER IN FAVOR OF LENDER. EACH GUARANTOR EXPRESSLY SUBMITS
AND CONSENTS IN
ADVANCE TO SUCH JURISDICTION IN ANY ACTION OR SUIT COMMENCED IN ANY
SUCH COURT,
AND EACH GUARANTOR HEREBY WAIVES ANY OBJECTION THAT ANY GUARANTOR
OR LENDER MAY
HAVE BASED UPON LACK OF PERSONAL JURISDICTION, IMPROPER VENUE OR
FORUM NON
CONVENIENS AND HEREBY CONSENT TO THE GRANTING OF SUCH LEGAL OR
EQUITABLE RELIEF
AS IS DEEMED APPROPRIATE BY SUCH COURT.
20. WAIVER OF TRIAL BY
JURY. Each Guarantor each hereby irrevocably
waives all right to trial by jury in any action, proceeding or
counterclaim
arising out of or relating to this Guaranty, any other Loan
Document, or any of
the transactions contemplated thereby.
21. COUNTERPARTS. This
Guaranty may be executed in any number of
identical counterparts, which shall constitute an original and
collectively and
separately constitute a single instrument or agreement.
[NO FURTHER TEXT ON THIS PAGE]
12
<PAGE>
IN WITNESS WHEREOF, Guarantor has
executed and delivered this Guaranty
Agreement ($80 Million Credit Agreement) to and for the benefit of
Lender as of
the Effective Date first above written.
GUARANTOR:
PACIFIC COAST HOLDINGS INVESTMENT, LLC, a
California limited liability company,
By: /s/ Kali P.
Chaudhuri
/s/ Jacob Sweidan
----------------------------------
Jacob Sweidan
Name: Kali P.
Chaudhuri
Manager PCHI
-----------------------------
Title: Manager
----------------------------
Address: 6800 Indiana Ave., Suite 130
-------------------------------
Riverside, CA 92506
-------------------------------
Attn:
-------------------------
Ph:
951-782-8812
-------------------------
Fax:
951-782-8850
-------------------------
13
<PAGE>
EXHIBIT "B" TO ACKNOWLEDGEMENT, WAIVER AND CONSENT
GUARANTY AGREEMENT OF PCHI
($10.7 MILLION CREDIT AGREEMENT)
SEE ATTACHED
1
<PAGE>
GUARANTY AGREEMENT
------------------
($10.7 MILLION CREDIT AGREEMENT)
This GUARANTY AGREEMENT (as the same
may be amended, modified, or
supplemented from time to time, the "Guaranty") is to be effective
as of April
2, 2009 ("Effective Date"), by PACIFIC COAST HOLDINGS INVESTMENT,
LLC, a
California limited liability company ("Guarantor"), in favor of
MEDICAL PROVIDER
FINANCIAL CORPORATION III, a Nevada corporation ("Lender"), with
reference to
the following facts:
RECITALS
A. Guarantor is a
party to that certain Credit Agreement ($10.7 Million
Facility) dated as of October 9, 2007 (including all annexes,
exhibits and
schedules thereto, and as the same may be and has been amended,
restated,
supplemented, or otherwise modified from time to time, the "Credit
Agreement"),
by and among INTEGRATED HEALTHCARE HOLDINGS, INC., a Nevada
corporation
("IHHI"), WMC-SA, INC., a California corporation ("WMC-SA"), WMC-A,
INC., a
California corporation ("WMC-A"), CHAPMAN MEDICAL CENTER, INC., a
California
corporation ("Chapman"), and COASTAL COMMUNITIES HOSPITAL, INC., a
California
corporation ("Coastal") (IHHI, WMC-SA, WMC-A, Chapman and Coastal
are sometimes
collectively referred to herein as "Borrowers" and individually as
"Borrower");
Guarantor, WEST COAST HOLDINGS, LLC, a California limited liability
company
("West Coast"), GANESHA REALTY, LLC, a California limited liability
company
("Ganesha") and ORANGE COUNTY PHYSICIANS INVESTMENT NETWORK, LLC, a
Nevada
limited liability company ("OC-PIN") (Guarantor, West Coast,
Ganesha and OC-PIN
are referred to collectively in the Credit Agreement as the "Credit
Parties"),
and Lender.
&nb
