8-K

                                  UNITED STATES
                       SECURITIES AND EXCHANGE COMMISSION
                             WASHINGTON, D.C. 20549

                                    FORM 8-K
                           --------------------------

                                 CURRENT REPORT
                     PURSUANT TO SECTION 13 OR 15(D) OF THE
                         SECURITIES EXCHANGE ACT OF 1934

        Date of Report (date of earliest event reported): August 29, 2007
                           --------------------------

                      INTEGRATED HEALTHCARE HOLDINGS, INC.
             (Exact Name of Registrant as Specified in its Charter)
                           --------------------------

             NEVADA                         0-23511              87-0412182
 (State or Other Jurisdiction of   (Commission File Number)   (I.R.S. Employer
 Incorporation or Organization)                              Identification No.)

                            1301 NORTH TUSTIN AVENUE
                           SANTA ANA, CALIFORNIA 92705
               (Address of Principal Executive Offices) (Zip Code)

                                 (714) 953-3503
                         (Registrant's telephone number,
                              including area code)

          (Former Name or Former Address, if Changed Since Last Report)
                           --------------------------

Check the appropriate box below if the Form 8-K filing is intended to
simultaneously satisfy the filing obligation of the registrant under any of the
following provisions:

   |_| Written communications pursuant to Rule 425 under the Securities Act (17
CFR 230.425)

   |_| Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17
CFR 240.14a-12)

   |_| Pre-commencement communications pursuant to Rule 14d-2(b) under the
Exchange Act (17 CFR 240.14d-2(b))

   |_| Pre-commencement communications pursuant to Rule 13e-4(c) under the
Exchange Act (17 CFR 240.13e-4(c))





ITEM 1.01.        ENTRY INTO A MATERIAL DEFINITIVE AGREEMENT.

On August 29, 2007, Integrated Healthcare Holdings, Inc. (the "COMPANY") entered
into a letter agreement (the "LETTER OF INTENT") with Medical Capital
Corporation proposing terms and conditions under which Medical Capital
Corporation or its affiliates (collectively, "MEDCAP") would make available to
the Company new credit facilities aggregating up to $140.7 million (the "NEW
CREDIT FACILITIES"). The New Credit Facilities would replace the Company's
existing indebtedness to affiliates of MedCap, which matured on March 2, 2007.
The Company is currently operating under an Agreement to Forbear with the
lenders under its existing indebtedness.

The closing of the New Credit Facilities is subject to the negotiation and
execution of definitive transaction documents and certain other customary
closing conditions. The Company and the other parties to the New Credit
Facilities are in the process of negotiating the definitive transaction
documents, and the Company expects to complete the transaction by no later than
October 1, 2007.

Under the Letter of Intent, the New Credit Facilities would consist of the
following instruments:

     o    A $45 million Real Estate Term Loan bearing a fixed interest rate of
          9% in the first year and 14% after the first year, used to repay
          amounts owing under the Company's existing $50 million term loan.

     o    A $35 million Non-Revolving Line of Credit bearing a fixed interest
          rate of 9.25% per year, used to repay amounts owing under the
          Company's existing $30 million line of credit, pay the origination
          fees on the other credit facilities and for working capital.

     o    A $10.7 million Convertible Term Loan bearing a fixed interest rate of
          9.25% per year, used to repay amounts owing under the Company's
          existing $10.7 million loan.

     o    A $50 million Revolving Line of Credit Loan bearing a fixed interest
          rate of 24% per year (subject to reduction to 18% if the $45 million
          Real Estate Term Loan is repaid prior to its maturity) and an unused
          commitment fee of 0.50% per year, used to finance the Company's
          accounts receivable.

Each of the above instruments would (i) require a 1.5% origination fee due at
funding, (ii) require monthly payments of interest and repayment of principal
upon maturity in three years, (iii) be collateralized by all of the assets of
the Company and its subsidiaries and the real estate underlying the Company's
hospital facilities (which are owned by Pacific Coast Holdings Investments, LLC
and leased to the Company), and (iv) be guaranteed by Ganesha Realty, LLC,
Orange County Physicians Investment Network, LLC, and West Coast Holdings, LLC.



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Under the Letter of Intent, the Company would also issue to MedCap a warrant to
purchase 4.95% of the Company's outstanding shares of common stock.

The Letter of Intent is furnished as an exhibit to this Report. The preceding
description of the Letter of Intent is summary in nature and does not purport to
be complete. This summary should be read in connection with the exhibit hereto.

ITEM 9.01         FINANCIAL STATEMENTS AND EXHIBITS.

(d) EXHIBITS.

EXHIBIT NUMBER                 DESCRIPTION

99.1    Letter Agreement, dated as of August 27, 2007, by and between the
        Registrant and Medical Capital Corporation.





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                                   SIGNATURES

         Pursuant to the requirements of the Securities Exchange Act of 1934,
the registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.

Date:  September 21, 2007

                            INTEGRATED HEALTHCARE HOLDINGS, INC.

                            By: /S/ STEVEN R. BLAKE
                               ---------------------------------------
                                Steven R. Blake
                                Chief Financial Officer







                                       3

EX-99.1

EXHIBIT 99.1 Letter Agreement, dated as of August 27, 2007, by and between the
             Registrant and Medical Capital Corporation.

August 27, 2007

HAND DELIVERED
- --------------

Larry Anderson, President
Bruce Mogel, Chief Executive Officer
Integrated Healthcare Holdings, Inc.
1301 North Tustin Avenue
Santa Ana, California 92705

         Re: Expression of Interest in Providing Credit Facilities

Gentlemen:

We are pleased to provide you with a summary of the terms and conditions
pursuant to which Medical Capital Corporation (by and through one or more of its
affiliated entities) (for convenience, "MCC") would consider making available to
Integrated Healthcare Holdings, Inc. ("Borrower") (i) a $45,000,000 real estate
term loan ("$45 Million Real Estate Term Loan"), (ii) a $35,000,000
non-revolving line of credit loan ("$35 Million Non-Revolving Line of Credit
Loan"), (iii) a $10,700,000 term loan ("$10.7 Million Term Loan"), and (iv) a
$50,000,000 revolving line of credit loan ("$50 Million Revolving Line of Credit
Loan") (the $45 Million Real Estate Term Loan, $35 Million Non-Revolving Line of
Credit Loan, $10.7 Million Term Loan and $50 Million Revolving Line of Credit
Loan are hereinafter together referred to as the "Credit Facilities"). The terms
and conditions pursuant to which MCC proposes to provide the Credit Facilities
are set forth below:

I. CREDIT FACILITIES.
A.   $45 Million Real Estate Term Loan. MCC proposes to make available to
     Borrower the following $45 Million Real Estate Term Loan:

     1.   Advance: A term loan made in a single advance on the Initial Funding
          Date.

     2.   Amount of Loan: $45,000,000.

     3.   Purpose: To repay all amounts due and owing under the existing
          $50,000,000 real estate term loan owed by Borrower to MCC.

     4.   Interest: During the first year, simple interest would be charged at
          the annual rate of 9.0% fixed. At commencement of the second year and
          thereafter, simple interest would be charged at the annual rate of
          14.0%


   2100 South State College Blvd, Anaheim California 92806 3 tel: 714-935-3100
                               fax: 714-935-3114
                             www.medicalcapital.com

                                       1



          fixed. Interest on the balance of the $45 Million Real Estate Term
          Loan shall be calculated on the basis of the actual number of days
          elapsed in a 360-day year.

     5.   Monthly Interest-Only Payments: Interest-only payments due and payable
          monthly, in arrears.

     6.   Balloon Payment: The unpaid principal balance plus accrued but unpaid
          interest shall be due in a balloon payment on the Maturity Date.

     7.   Maturity Date: Three (3) years from the Initial Funding Date.

     8.   Prepayment: No prepayment penalty or charge.

     9.   Origination Fee: $675,000 (1.5% of $45,000,000) due at the Initial
          Funding Date.

     10.  Loan to Value: The $45 Million Real Estate Term Loan combined with the
          $35 Million Non-Revolving Line of Credit Loan cannot exceed 70% of the
          M.A.I. appraised value of the Hospital Properties.

     11.  Collateral and Security: All Credit Facilities will be secured by a
          single first priority deed of trust on the fee simple interest in each
          of the Hospital Properties and a first priority perfected lien on and
          security interest in all assets of Borrower (including, without
          limitation, the Hospital Properties, fixtures, improvements,
          assignments of leases, equity interest in the Hospital Properties (if
          any), accounts receivable and proceeds thereof, and all other assets
          (including, without limitation, the inventory, equipment, intellectual
          property, contracts and other general intangibles, cash and proceeds
          of each of the foregoing) of Borrower and its direct and indirect
          subsidiaries, whether existing at Closing or thereafter organized or
          acquired.

     12.  Hospital Properties:

          a.   Western Medical Center Santa Ana, a 282-bed acute care hospital
               in Santa Ana, California.

          b.   Western Medical Center Anaheim, a 188-bed acute care hospital in
               Anaheim, California.

          c.   Coastal Communities Hospital, a 178-bed acute care hospital in
               Santa Ana, California.

          d.   Chapman Medical Center, a 114-bed acute care hospital in Orange,
               California and all related and attached properties owned by
               Borrower.

B.   $35 Million Non-Revolving Line of Credit Loan. A non-revolving line of
     credit loan in one or more advances, upon request of Borrower.

     1.   Maximum Line of Credit Commitment: $35,000,000.

     2.   Non-Revolving: Borrower may borrow and repay, but may not repay and


                                       2



          reborrow.

     3.   Approved Uses: The proceeds may be used only for the following
          purposes:

          a.   To repay all amounts due and owing under the existing $30,000,000
               line of credit loan to MCC.

          b.   To pay the Origination Fee on all Credit Facilities, Unused
               Commitment Fees, MCC's Costs on all Credit Facilities.

          c.   To pay for working capital as approved by MCC.

     4.   Interest: Simple interest at the annual rate of 9.25% fixed. Interest
          on the balance of the $35 Million Non-Revolving Line of Credit Loan
          shall be calculated on the basis of the actual number of days elapsed
          in a 360-day year.

     5.   Monthly Interest-Only Payments: Interest-only payments due and payable
          monthly, in arrears.

     6.   Balloon Payment. The unpaid principal balance plus accrued but unpaid
          interest shall be due in a balloon payment on the Maturity Date.

     7.   Maturity Date: Three (3) years from the Initial Funding Date.

     8.   Prepayment: No prepayment penalty or charge.

     9.   Loan to Value: The $45 Million Real Estate Term Loan combined with the
          $35 Million Non-Revolving Line of Credit Loan cannot exceed 70% of the
          M.A.I. appraised value of the Hospital Properties.

     10.  Collateral and Security: All Credit Facilities will be secured by a
          single first priority deed of trust in the fee simple interest in each
          of the Hospital Properties and a first priority perfected lien on and
          security interest in all assets of Borrower (including, without
          limitation, the Hospital Properties, fixtures, improvements,
          assignments of leases, equity interest in the Hospital Properties (if
          any), accounts receivable and proceeds thereof, and all other assets
          (including, without limitation, the inventory, equipment, intellectual
          property, contracts and other general intangibles, cash and proceeds
          of each of the foregoing) of Borrower and its direct and indirect
          subsidiaries, whether existing at Closing or thereafter organized or
          acquired.

     11.  Unused Commitment Fee: 0.50% per annum of the average daily difference
          between $35,000,000 minus the sum of the outstanding

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          principal amount of all advances for the period for which the Unused
          Commitment Fee is being paid.

     12.  Origination Fee: $525,000 (1.5% of $35,000,000) due at the Initial
          Funding Date.


C.   $10.7 Million Term Loan. MCC proposes to make available to Borrower the
     following $10.7 Million Term Loan:

     1.   Advance: A term loan made in a single advance on the Initial Funding
          Date.

     2.   Amount of Loan: $10,700,000.

     3.   Purpose: To repay the existing $10,700,000 loan owed by Borrower to
          MCC.

     4.   Interest: Simple interest at the annual rate of 9.25% fixed. Interest
          on the balance of the $10.7 Million Term Loan shall be calculated on
          the basis of the actual number of days elapsed in a 360-day year.

     5.   Monthly Interest-Only Payments: Interest-only payments due and payable
          monthly, in arrears.

     6.   Balloon Payment: The unpaid principal balance plus accrued but unpaid
          interest shall be due in a balloon payment on the Maturity Date.

     7.   Maturity Date: Three (3) years from the Initial Funding Date.

     8.   Prepayment: No prepayment penalty or charge.

     9.   Origination Fee: $160,500 (1.5% of $10,700,000) due at the Initial
          Funding Date.

     10.  Loan Convertible Into Common Stock. At any time prior to the Maturity
          Date, MCC shall have the right, at its option, to convert the $10.7
          Million Convertible Loan into fully paid and nonassessable shares of
          Borrower's voting common stock ("Common Stock"). The number of shares
          of Common Stock into which the $10.7 Million Convertible Loan may be
          converted ("Common Stock Conversion Shares") shall be determined by
          dividing the entire unpaid principal amount of the $10.7 Million
          Convertible Loan together with all accrued but unpaid interest thereon
          by the Common Stock Conversion Price in effect at the time of such
          conversion. The Common Stock Conversion Price per share of
          Common Stock shall be determined prior to closing. The Common Stock
          Conversion Price shall be subject to anti-dilution and other customary
          adjustments.

                                       4


     11.  Collateral and Security: All Credit Facilities will be secured by a
          single first priority deed of trust in the fee simple interest in each
          of the Hospital Properties and a first priority perfected lien on and
          security interest in all assets of Borrower (including, without
          limitation, the Hospital Properties, fixtures, improvements,
          assignments of leases, equity interest in the Hospital Properties (if
          any), accounts receivable and proceeds thereof, and all other assets
          (including, without limitation, the inventory, equipment, intellectual
          property, contracts and other general intangibles, cash and proceeds
          of each of the foregoing) of Borrower and its direct and indirect
          subsidiaries, whether existing at Closing or thereafter organized or
          acquired.

     12.  MCC Right to Assign: MCC shall have the right to sell, assign,
          transfer and convey its interest in the $10.7 Million Term Loan
          documents.

D.   $50 Million Revolving Line of Credit Loan. A revolving line of credit loan
     in one or more advances, upon request of Borrower.

     1.   Maximum Line of Credit Commitment: The maximum amount of advances
          available under the $50 Million Revolving Line of Credit Loan during
          the Term shall be $50,000,000. The amount available to Borrower at any
          one time shall be based upon the Availability (as defined below) which
          shall be determined subsequent to MCC's on-site due diligence.

     2.   Availability: Availability under the $50 Million Revolving Line of
          Credit Loan shall be an amount (a) up to 90% of the net collectable
          value of the accounts receivable from third-party payors that are aged
          less than 150 days from date of service and (b) up to 50% of unbilled
          accounts receivable from third party payors for up to 15 days
          subsequent to patient discharge. The "net collectable value" of
          Borrower's accounts receivable is the amount Borrower bills
          third-party payors less deductible obligations and contractual
          allowances, which Availability shall be determined by MCC upon
          completion of its on-site due diligence and which shall be set forth
          in applicable loan documents to be provided to Borrower.

     3.   Revolving: Borrower may borrow and repay, and may repay and reborrow.

     4.   Approved Uses: The proceeds may be used only to purchase Borrower's
          accounts receivable.

     5.   Interest: Simple interest at the annual rate of 24% fixed; provided,
          however, if the $45 Million Real Estate Term Loan is repaid in full
          and satisfied prior to its Maturity Date, the interest rate on the $50
          Million Revolving Line of Credit Loan will at that time decrease to
          simple interest at the annual rate of $18% fixed. Interest on the
          balance of the $50


                                       5


          Million Revolving Line of Credit Loan shall be calculated on the basis
          of the actual number of days elapsed in a 360-day year. Collections of
          Borrower's accounts receivable, in cash, by MCC under the $50 Million
          Revolving Line of Credit Loan shall be credited to Borrower's
          obligations thereunder on a daily basis, subject to five (5) business
          clearance days.

     6.   Monthly Interest-Only Payments: Interest-only payments due and payable
          monthly, in arrears.

     7.   Obligations. All obligations under the $50 Million Revolving Line of
          Credit Loan shall be due and payable in full on the Maturity Date.

     8.   Maturity Date: Three (3) years from the Initial Funding Date.

     9.   Prepayment: Not permitted during the eighteen (18) month period
          commencing on the Initial Funding Date.

     10.  Collateral and Security: All Credit Facilities will be secured by a
          single first priority deed of trust in the fee simple interest in each
          of the Hospital Properties and a first priority perfected lien on and
          security interest in all assets of Borrower (including, without
          limitation, the Hospital Properties, fixtures, improvements,
          assignments of leases, equity interest in the Hospital Properties (if
          any), accounts receivable and proceeds thereof, and all other assets
          (including, without limitation, the inventory, equipment, intellectual
          property, contracts and other general intangibles, cash and proceeds
          of each of the foregoing) of Borrower and its direct and indirect
          subsidiaries, whether existing at Closing or thereafter organized or
          acquired.

     11.  Unused Commitment Fee: 0.50% per annum of the average daily difference
          between $50,000,000 minus the sum of the outstanding principal amount
          of all advances for the period for which the Unused Commitment Fee is
          being paid.

     12.  Origination Fee: $750,000 (1.5% of $50,000,000) due at the Initial
          Funding Date.

II.       WARRANT. Borrower shall grant MCC a warrant to subscribe for and
purchase up to 4.95% of Borrower's fully paid and nonassessable shares Common
Stock at a price per share to be determined prior to closing (the "Exercise
Price"), subject to the provisions and upon the terms and conditions hereinafter
set forth. The Exercise Price shall be subject to anti-dilution and other
customary adjustments.

III.      GENERAL TERMS AND CONDITIONS.

          A. General. The definitive credit documentation to be provided to
Borrower relating to the Credit Facilities shall contain certain
representations, warranties, covenants and other terms and conditions consistent
with those customarily found in similar financings and such other




                                       6


terms and conditions as shall be agreed upon by Borrower and MCC. The $45
Million Real Estate Term Loan, the $35 Million Non-Revolving Line of Credit
Loan, the $10.7 Million Term Loan and the $50 Million Revolving Line of Credit
Loan shall be cross-collateralized and cross-defaulted.

          B. Loan Documents. Borrower shall execute and deliver to MCC such loan
and security agreements, notes, mortgages, deeds of trust, subordination and
inter-creditor agreements, instruments, documents, certificates, opinions,
environmental indemnities, right of first refusals, fraud guaranties, third
party reports and assurances as are reasonable and customary for similar loans,
and as MCC may require in connection with the Closing in its sole discretion.

          C. Guaranty. The Credit Facilities will be guaranteed by a full
guaranty of payment and performance by the Ganesha Realty, LLC., OC-PIN, and
West Coast Holdings, LLC.

          D. Closing Conditions. (1) Prior to Closing, there shall be no
material change in Borrower's business or general financial condition; (2) there
shall be no material default in any of Borrower's obligations under any
contract; (3) Borrower shall be in compliance with all applicable laws; (4) MCC
shall receive legal opinions from Borrower's counsel satisfactory to MCC; (5)
Borrower shall maintain and pay for one or more Lock Box Accounts mutually
satisfactory to Borrower and MCC for Borrower's cash collections; (6) MCC shall
receive all items typically required in connection with similar commercial real
estate mortgages (including without limitation third party reports which include
but are not limited to title insurance, appraisal, environmental report and
survey); (7) Borrower (as Tenant) and PCHI (as Landlord) shall each have
executed and delivered to MCC an estoppel certificate in form and content
acceptable to MCC in its sole and absolute discretion, confirming that there are
no defaults, disputes or disagreements between Landlord and Tenant in connection
with that certain Triple Net Hospital and Medical Office Building Lease dated
March 3, 2005 (as amended from time to time) with respect to the Western Medical
Center Santa Ana, Western Medical Center Anaheim, Coastal Communities Hospital,
Medical Office Building at Coastal Community Hospital and (if applicable) any
after-acquired medical office buildings; (8) Anil Shah shall have voluntarily
resigned as a director of Borrower and shall not at any time while any of the
Credit Facilities remain outstanding serve as an officer, director, employee,
manager, consultant, agent or representative of Borrower; and (9) MCC and its
advisors shall have the right to perform due diligence prior to Closing to
determine the liquidity of Borrower's accounts receivable and the general
financial and operational state of the Borrower. MCC's due diligence shall
include, but not be limited to, a review of the collateral files, relevant
financial information and other materials relevant to the Closing. The
undersigned, being duly authorized by and on behalf of the Borrower, hereby
grants to MCC a security interest in the Collateral securing repayment of all
obligations arising under this letter and to further secure all other
obligations of Borrower to MCC whether now existing or hereafter arising in the
future. Borrower hereby authorizes MCC to file a UCC Financing Statement for
each Borrower-affiliated entity with respect to such Collateral. Following the
Closing, MCC shall have the right to conduct periodic due diligence to assess
the on-going collateral value of Borrower's accounts receivable.

          E. Closing. The closing of the Credit Facilities will occur on a date
that is mutually satisfactory to Borrower and MCC; however, if the Credit
Facilities do not close on or before October 1, 2007, this proposal shall expire
and (except for such provisions which survive) have no further force or effect,
unless extended by MCC.


                                       7


         F. Costs and Expenses. All costs associated with establishing the
Credit Facilities, but not limited to, MCC's out-of-pocket expenses associated
with the transaction, professional fees, recording fees, search fees and filing
fees shall be paid by Borrower regardless of whether the transaction closes.
Upon acceptance of the general terms of this letter, Borrower shall remit a
$10,000 deposit, which shall be applied to all fees and expenses associated with
the above-mentioned transactions. In addition to this deposit, Borrower shall be
solely responsible for the payment of all expenses related to the issuance of
third party reports. To the extent that any third party reports are ordered by
MCC, Borrower may be required to remit an additional deposit to cover such
expenses. Furthermore, Borrower represents and warrants to MCC that it has not
contracted with, or does it know of, any broker to be paid by Borrower who has
participated in the transactions contemplated herein.

         G. Confidentiality. Borrower will not disclose the contents of this
letter (or that Borrower and MCC are having any discussions related to a
possible Credit Facility including the status thereof, termination thereof, any
decision on Borrower's or MCC's part to no longer consider such Credit
Facilities or any terms, conditions, or other facts with respect thereof) to any
third party, including, without limitation, any financial institution or
intermediary, without MCC's prior written consent, other than to Borrower's
officers and advisors on a need-to-know basis. Borrower agrees to inform all
such persons who receive information concerning this letter that such
information is confidential and may not be disclosed to any other person.
Further, until all of the Credit Facilities proposed herein are consummated or a
determination is made by MCC not to pursue such financing pursuant to the terms
and conditions herein, Borrower agrees to negotiate exclusively with MCC
regarding any financing the purpose of which is substantially the same as that
of the proposed transactions. It is the intention of the parties hereto that the
exclusivity provisions in favor of MCC shall apply separately to each of the
Credit Facilities and that MCC's continued pursuit of or commitment to either
facility shall preserve the exclusivity provisions in favor of MCC with respect
to such facility. Consequently, if Borrower fails to comply with any of the
provisions of this paragraph and/or consummates a transaction (except for an
extension of Borrower's existing credit facilities) with an entity other than
MCC during the one-year period following the date hereof, Borrower shall (no
later than the closing date of such transaction) pay MCC liquidated damages
equal to two percent (2%) of the aggregate amount to be made available under the
Credit Facilities, if one or more transactions similar to the Credit Facility
transactions described in this letter are consummated in violation of this
paragraph. Borrower acknowledges that such liquidated damages are intended to
compensate MCC for its estimated added administrative costs incurred and the
amount of damage sustained by MCC as a result of Borrower's decision not to
pursue the loan. Notwithstanding the foregoing, the exclusivity provisions with
respect to the Credit Facilities shall not apply in favor of MCC if Borrower
otherwise satisfies all terms and conditions herein. In connection with the
requested Credit Facilities, Borrower understands that MCC will continue to make
financial, legal and collateral investigations and determinations. Any dispute
arising under or in connection with this letter shall be governed by the laws of
the State of California without reference to internal choice of law. The
undersigned hereby consents to jurisdiction and venue of the state and federal
courts located in the State of California for the resolution of all disputes
arising under or in connection with this letter.

          H. Expiration. If MCC does not receive this accepted term sheet and
the deposit on or before August 31, 2007, the proposals set forth in this letter
shall automatically expire.


                                       8


          By signing this letter, Borrower agrees to indemnify MCC, its
managers, officers, and principals and hold each of them harmless against any
and all losses, liabilities and claims arising out of or by reason of any
investigation, litigation, or other proceeding brought or threatened relating to
any loan made or proposed to be made, including without limitation the claims of
any brokers or anyone claiming a right to any fees in connection with the Credit
Facilities. If the terms and conditions set forth above are satisfactory, please
sign the enclosed copy of this letter and return it to my attention along with
the $10,000 deposit.

Very truly yours,

MEDICAL CAPITAL CORPORATION

By: /s/Joseph J. Lampariello
    --------------------------------------
   Joseph J. Lampariello, President and COO

BORROWER HAS REVIEWED THE FOREGOING
AND HEREBY AGREES TO ITS TERMS:

INTEGRATED HEALTHCARE HOLDINGS, INC.,
a Nevada corporation

By:  /s/ Bruce Mogel
   ---------------------
      Title:   CEO
            -------------



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