Integrated Healthcare Holdings Receives New Equity Investment to Pay Down Debt

• Author: admin
• Filed under: Health News
• Date: Jul 21,2008

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On July 18, 2008, Integrated Healthcare Holdings, Inc. (IHHI), a hospital management company that owns four hospital facilities in Orange County, California, entered into a Securities Purchase Agreement with Kali P. Chaudhuri, M.D. to provide additional equity investment in the company.

Under the Securities Purchase Agreement, Dr. Chaudhuri agreed to invest up to $10,700,000 in additional equity in IHHI. Dr. Chaudhuri has invested $3,731,732 through the exercise of outstanding warrants to purchase 24,878,213 shares of common stock at an exercise price of $0.15 per share. In addition, Dr. Chaudhuri paid an additional $50,000 for the right to invest up to an additional $6,968,268 in IHHI through the purchase of 63,347,891 additional shares of common stock at $0.11 per share. The purchase right can be exercised by Dr. Chaudhuri from August 1, 2008 through January 10, 2009, and is subject to IHHI satisfying certain conditions on or prior to closing. IHHI also agreed to register for resale securities owned by Dr. Chaudhuri and William E. Thomas following demand pursuant to the Securities Purchase Agreement. The Purchase Agreement provides Dr. Chaudhuri and Mr. Thomas with certain pre-emptive rights to maintain their respective levels of ownership of IHHI’s common stock by acquiring additional equity securities concurrent with future issuances by IHHI of equity securities or securities or rights convertible into or exercisable for equity securities. These pre-emptive and registration rights superseded and replaced their existing pre-emptive and registration rights.

Concurrently with the execution of the Securities Purchase Agreement, IHHI and its subsidiaries entered into an Early Loan Payoff Agreement with Medical Provider Financial Corporation III, which holds a $10,700,000 convertible term note issued by IHHI on October 9, 2007. Under the Early Loan Payoff Agreement, IHHI used the proceeds from the warrant exercise, and will use any additional proceeds that it receives from Dr. Chaudhuri, to pay down the $10,700,000 convertible term note.

Also under the Early Loan Payoff Agreement, Medical Provider Financial Corporation I granted IHHI the right to extend the maturity date under its $80 Million Credit Agreement by one year, and Medical Provider Financial Corporation II granted IHHI the right to extend the maturity date under its $50 Million Credit Agreement by one year, subject to certain conditions including the full early payoff of the $10,700,000 convertible term note. IHHI also provided general releases, waivers and covenants not to sue to its lenders following the payoff in full of the $80 Million Credit Agreement and/or $50 Million Credit Agreement.

Source: Integrated Healthcare Holdings, Inc.