Exhibit 99.1
As of May 1, 2006
Paincare Surgery Centers Inc,
1030 North Orange Avenue
Suite 105
Orlando, Florida 32801
Attn: Randy Lubinsky, Chief Executive Officer
Re:Paincare Holdings, Inc.; HBK Investments L.P.
Reference is made hereby to that certain Loan and Security Agreement, dated as of May 10, 2005 (as amended, restated or otherwise modified from time to time, the “Loan Agreement”), by and among, the lenders from time to time party thereto (such lenders, together with their respective successors and assigns, are referred to hereinafter each individually as a “Lender” and collectively as the “Lenders”), HBK Investments L.P., a Delaware limited partnership, as the arranger and administrative agent for the Lenders (in such capacity, together with its successors and assigns in such capacity, “Agent”), Paincare Holdings, Inc., a Florida corporation (“Parent”), and each of Parent’s Subsidiaries identified on the signature pages thereto (such Subsidiaries are referred to hereinafter each individually as a “Borrower”, and individually and collectively, jointly and severally, as the “Borrowers”). Capitalized terms used herein and not otherwise defined shall have the meaning ascribed thereto in the Loan Agreement.
Parent has informed the Agent and the Lenders that the Events of Default described onSchedule 1 attached hereto have occurred and are continuing (collectively the “DesignatedEvents of Default”).
Anything to the contrary in the Loan Agreement notwithstanding and subject to the receipt by Agent and Lenders of (1) a counterpart of this letter duly executed and delivered by Borrowers and Guarantors, and (2) a waiver fee of $300,000 (the “Waiver Fee”), Agent and the Lenders waive solely the Designated Events of Default. Borrowers hereby agree that the Waiver Fee shall be paid to Agent in immediately available funds on the date hereof, has been earned in full by Agent and Lenders on the date hereof, is non-refundable when paid, and is due and payable on the date hereof.
Parent and each Borrower hereby represents and warrants that (a) the execution, delivery, and performance of this letter agreement are within the corporate powers of Parent and the Borrowers, have been duly authorized by all necessary corporate action, and are not in contravention of any law, rule, or regulation, or any order, judgment, decree, writ, injunction, or award of any arbitrator, court, or governmental authority, or of the terms of Parent’s or the Borrowers’ charters or bylaws, or of any contract or undertaking to which Parent or the Borrowers are a party or by which any of Parent’s or the Borrowers’ properties may be bound or affected, and (b) the representations and warranties in the Loan Agreement and the other Loan
Documents are true and correct in all respects on and as of the date hereof, as though made on such date (except to the extent that such representations and warranties relate solely to an earlier date).
The waiver herein is limited to the specifics hereof, shall not apply with respect to any Default or Event of Default other than the Designated Events of Default, or any other facts or occurrences other than those on which the same are based, shall not excuse future non-compliance with the Loan Agreement (as it may from time to time be amended), and, except as expressly set forth herein, shall not operate as a waiver or an amendment of any right, power, or remedy of Agent or the Lenders, nor as a consent to or waiver of any further or other matter, under the Loan Documents.
This letter shall constitute a Loan Document and shall be subject to the provisions regarding governing law, waiver of jury trial, jurisdiction and venue applicable to the Loan Agreement.
This waiver letter may be executed in any number of counterparts and by different parties hereto in separate counterparts, each of which when so executed and delivered shall be an original, but all of which shall together constitute one and the same instrument. Delivery of an executed counterpart of this letter by telefacsimile shall be equally as effective as delivery of an original executed counterpart of this letter. Any party delivering an executed counterpart of this letter by telefacsimile shall also deliver an original executed counterpart of this letter, but the failure to do so shall not affect the validity, enforceability or binding effect of this letter. This letter shall be governed by the laws of the state of New York applicable to contracts made and to be performed in the state of New York.
Please have the acknowledgement set forth below executed on behalf of Borrowers and return a fully executed copy to HBK Investments L.P. at the address set forth above.
Very truly yours,
HBK INVESTMENTS L.P.,
as Agent
By:/s/ David C. Haly
Its authorized signatory
HBK MASTER FUND L.P.,
as Lender
By:/s/ David C. Haly
Its authorized signatory
DEL MAR MASTER FUND LTD.,
as Lender
By:/s/ Marc V. Simmons
Name: Marc V. Simons
Title: Director
ACKNOWLEDGED AND AGREED:
PAINCARE HOLDINGS, INC.
a Florida corporation
| By: | /s/ Mark Szporka |
| Name: | Mark Szporka |
| Title: | Chief Financial Officer |
PAINCARE SURGERY CENTERS, INC.
a Florida corporation
| By: | /s/ Mark Szporka |
| Name: | Mark Szporka |
| Title: | Chief Financial Officer |
ADVANCED ORTHOPAEDICS OF SOUTH FLORIDA II, INC.,
a Florida corporation
| By: | /s/ Mark Szporka |
| Name: | Mark Szporka |
| Title: | Chief Financial Officer |
PAIN AND REHABILITATION NETWORK, INC.,
a Florida corporation
| By: | /s/ Mark Szporka |
| Name: | Mark Szporka |
| Title: | Chief Financial Officer |
MEDICAL REHABILITATION SPECIALISTS II, INC.,
a Florida corporation
| By: | /s/ Mark Szporka |
| Name: | Mark Szporka |
| Title: | Chief Financial Officer |
PAINCARE ACQUISITION COMPANY V, INC.,
a Florida corporation
| By: | /s/ Mark Szporka |
| Name: | Mark Szporka |
| Title: | Chief Financial Officer |
PAINCARE ACQUISITION COMPANY VI, INC.,
a Florida corporation
| By: | /s/ Mark Szporka |
| Name: | Mark Szporka |
| Title: | Chief Financial Officer |
HEALTH CARE CENTER OF TAMPA, INC.,
a Florida corporation
| By: | /s/ Mark Szporka |
| Name: | Mark Szporka |
| Title: | Chief Financial Officer |
PAINCARE ACQUISITION COMPANY VIII, INC.,
a Florida corporation
| By: | /s/ Mark Szporka |
| Name: | Mark Szporka |
| Title: | Chief Financial Officer |
PAINCARE ACQUISITION COMPANY IX, INC.
a Florida corporation
| By: | /s/ Mark Szporka |
| Name: | Mark Szporka |
| Title: | Chief Financial Officer |
PAINCARE ACQUISITION COMPANY X, INC.
a Florida corporation
| By: | /s/ Mark Szporka |
| Name: | Mark Szporka |
| Title: | Chief Financial Officer |
PAINCARE ACQUISITION COMPANY X, INC.
a Florida corporation
| By: | /s/ Mark Szporka |
| Name: | Mark Szporka |
| Title: | Chief Financial Officer |
PAINCARE ACQUISITION COMPANY XI, INC.
a Florida corporation
| By: | /s/ Mark Szporka |
| Name: | Mark Szporka |
| Title: | Chief Financial Officer |
GEORGIA SURGICAL CENTERS, INC.
a Georgia corporation
| By: | /s/ Mark Szporka |
| Name: | Mark Szporka |
| Title: | Chief Financial Officer |
PAINCARE ACQUISITION COMPANY XIII, INC.,
a Florida corporation
| By: | /s/ Mark Szporka |
| Name: | Mark Szporka |
| Title: | Chief Financial Officer |
BENJAMIN ZOLPER, M.D., INC.
a Florida corporation
| By: | /s/ Mark Szporka |
| Name: | Mark Szporka |
| Title: | Chief Financial Officer |
PAINCARE ACQUISITION COMPANY XV, INC.
a Florida corporation
| By: | /s/ Mark Szporka |
| Name: | Mark Szporka |
| Title: | Chief Financial Officer |
PAINCARE ACQUISITION COMPANY XVII, INC.
a Florida corporation
| By: | /s/ Mark Szporka |
| Name: | Mark Szporka |
| Title: | Chief Financial Officer |
PAINCARE ACQUISITION COMPANY XIX, INC.
a Florida corporation
| By: | /s/ Mark Szporka |
| Name: | Mark Szporka |
| Title: | Chief Financial Officer |
PAINCARE ACQUISITION COMPANY XVIII, INC.
a Florida corporation
| By: | /s/ Mark Szporka |
| Name: | Mark Szporka |
| Title: | Chief Financial Officer |
PAINCARE SURGERY CENTERS I, INC.
a Florida corporation
| By: | /s/ Mark Szporka |
| Name: | Mark Szporka |
| Title: | Chief Financial Officer |
PAINCARE SURGERY CENTERS II, INC.
a Florida corporation
| By: | /s/ Mark Szporka |
| Name: | Mark Szporka |
| Title: | Chief Financial Officer |
PAINCARE, INC.,
a Nevada corporation
| By: | /s/ Mark Szporka |
| Name: | Mark Szporka |
| Title: | Chief Financial Officer |
PAINCARE MANAGEMENT SERVICES, INC.,
a Florida corporation
| By: | /s/ Mark Szporka |
| Name: | Mark Szporka |
| Title: | Chief Financial Officer |
CAPERIAN, INC.,
a Florida corporation
| By: | /s/ Mark Szporka |
| Name: | Mark Szporka |
| Title: | Chief Financial Officer |
ROTHBART PAIN MANAGEMENT CLINIC, INC.,
a Canadian corporation
| By: | /s/ Mark Szporka |
| Name: | Mark Szporka |
| Title: | Chief Financial Officer |
Schedule 1
Defaults and Events of Default
Section 5.11No Material Adverse Change.Certain financial statements delivered to Borrowers were not prepared according to GAAP and have been restated by Parent.
Section 5.19Complete Disclosure.Certain financial information delivered to Borrowers by Parent was not true and accurate at the time of delivery, and has been restated by Parent.
Section 6.1Accounting System.Parent's analysis of its Disclosure Controls and Procedures and Internal Controls Over Financial Reporting, as set forth in the Company's Form 10-K for the year ended December 31, 2005, will detail one or more material weaknesses in said controls.
Section 6.10Compliance with Laws.Parent has failed to fully comply with certain SEC disclosure obligations regarding its financial statements in that Parent has restated certain historical financial statements as set forth above.
Section 7.18(a)(i)Minimum EBITDA.Parent failed to attain the required EBITDA for the quarter ended December 31, 2005.
