Exhibit 10.56
OMNIBUS AMENDMENT
This Omnibus Amendment (this “Amendment”), dated as of May 8, 2008, is entered
into by Proxymed, Inc., a Florida corporation doing business as MedAvant (the
“Parent”), ProxyMed Transaction Services, Inc., (f/k/a MedUnite, Inc.) a
Delaware corporation (“PTS”) and ProxyMed Lab Services LLC (f/k/a Key
Communications Service, Inc.), a Delaware limited liability company (“PLS”, and
together with the Parent and PTS, the “Companies” and each, a “Company”) and LV
Administrative Services, Inc., as administrative and collateral agent (the
“Agent”) for Laurus Master Fund, Ltd., a Cayman Islands company (“Laurus”, and
together with Agent, the “Creditors”) for the purpose of amending the terms of
each of (i) that certain Security and Purchase Agreement, dated as of
December 6, 2005, by and among the Companies and Laurus (as amended, restated,
modified, assigned and/or supplemented from time to time, the “Security
Agreement”) and (ii) that certain Secured Revolving Note, dated as of
December 6, 2005, issued by the Companies to Laurus (as amended, restated,
modified, assigned and/or supplemented from time to time, the “Revolving Note”
and together with the Security Agreement and the other Ancillary Agreements
described in the Security Agreement, the “Documents”). Capitalized terms used
herein without definition shall have the meanings ascribed to such terms in the
Security Agreement.
     WHEREAS, each of the Companies and Creditors have agreed to make certain
changes to the Documents as set forth herein.
     NOW, THEREFORE, in consideration of the above, and for other good and
valuable consideration, the receipt and sufficiency of which is hereby
acknowledged, the parties hereto agree as follows:
     1. The Security Agreement is hereby amended by deleting Section 2(a)(vii)
in its entirety and inserting the following new Section 2(a)(vii) in lieu
thereof:
     “(vii) Intentionally Omitted.”
     2. The Security Agreement is hereby amended by adding the following new
Section 13(z) immediately following the end of existing Section 13(y) appearing
therein:
     “(z) Additional Covenants. (i)(I) On the fifth (5th) business day of each
of June 2008 and July 2008, the Companies shall submit to Laurus, a report (each
a “Covenant Compliance Report”) setting forth (x) the Companies’ actual
“consolidated cash receipts” received during the fiscal month immediately prior
to the month of submission of such Covenant Compliance Report; and (y) the
Companies actual “consolidated revenues” for the fiscal month immediately prior
to the month of submission of such Covenant Compliance Report and (II) on the
tenth (10th) business day of each of June 2008 and July 2008, the Companies
shall submit to Laurus a Covenant Compliance Report setting forth the Companies
actual “consolidated EBITDA” for the fiscal month immediately prior to the month
of submission of such Covenant Compliance Report.

 

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     (ii) In respect of each Covenant Compliance Report required to be delivered
by the Companies to Laurus pursuant to Section 13(z)(i) above, each such
Covenant Compliance Report shall be accompanied by a work sheet that describes
in reasonable detail the methodology, calculations and relied upon data used in
determining the “consolidated cash receipts”, “consolidated revenues” and
“consolidated EBITDA” calculations set forth in such Covenant Compliance Report,
as applicable, which methodology, calculations and relied upon data shall all be
required to be reasonably satisfactory to Laurus as determined by Laurus in its
sole discretion.
     (iii) The Companies shall not have, on the last day of each fiscal month
set forth below, a “consolidated cash receipts” for such fiscal month less than
the amount set forth opposite such fiscal month:

          Fiscal Month Ending   “consolidated cash receipts”
May 31, 2008
  $ 2,250,000  
June 30, 2008
  $ 2,150,000  

     (iv) The Companies shall not have, on the last day of each fiscal month set
forth below, a “consolidated revenues” for such fiscal month less than the
amount set forth opposite such fiscal month:

          Fiscal Month Ending   “consolidated revenues”
May 31, 2008
  $ 2,350,000  
June 30, 2008
  $ 2,350,000  

     (v) The Companies shall not have, on the last day of each fiscal month set
forth below, a “consolidated EBITDA” for such fiscal month less than the amount
set forth opposite such fiscal month:

          Fiscal Month Ending   “consolidated EBITDA”
May 31, 2008
  $ 115,000  
June 30, 2008
  $ 25,000  

     3. Section 19 of the Security Agreement is hereby amended by (i) deleting
the period appearing at the end of Section 19(r) and inserting the text “; or”
in lieu thereof and (ii) adding the following new Section 19(s) immediately
following the end of prior Section 19(r) appearing therein:

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     “(s) any Company or any of its Subsidiaries shall breach any term or
provision of Section 13(z) of this Agreement.”
     4. The definition of “Approved Budget” appearing in Annex A to the Security
Agreement and Exhibit D to the Security Agreement are each hereby deleted in
their entirety.
     5. The definitions of “Formula Amount,” “Maximum Availability Amount” and
“Revolving Loan Term” appearing in Annex A to the Security Agreement are hereby
deleted in their entirety and the following new definitions are inserted in lieu
thereof:
          “Formula Amount’ means for the period commencing on May 1, 2008
through and including July 31, 2008, $7,000,000.
          “Maximum Availability Amount’ means $7,000,000.”
     “Revolving Loan Term’ means the Closing Date through the close of business
on July 31, 2008.”
     6. In consideration of the foregoing, the Companies shall jointly and
severally pay to Laurus, a non-refundable payment in an amount equal to $325,000
(the “Laurus Payment”). The Laurus Payment will be paid on the Effective Date
(as defined below).
     The parties hereto agree that the fair market value of the Laurus Payment
(as reasonably determined by the parties) received in consideration of this
Amendment made by Laurus hereunder is hereby designated as interest and,
accordingly, shall be treated as a reduction of the remaining stated principal
amount (which reduced principal amount shall be treated as the issue price) of
the Revolving Note for U.S. federal income tax purposes under and pursuant to
Treasury Regulation Sections 1.1001-3(e)(2)(iii), 1.1273-2(g)(2)(ii) and
1.1274-2(b)(1). The parties further agree to file all applicable tax returns in
accordance with such characterization and shall not take a position on any tax
return or in any judicial or administrative proceeding that is inconsistent with
such characterization. Notwithstanding the foregoing, nothing contained in this
paragraph shall or shall be deemed to modify or impair in any manner whatsoever
the Companyies’ obligations from time to time owing to Laurus under
the Documents.
     7. Upon the effectiveness of this Amendment, each Company hereby reaffirms
all covenants, representations and warranties made in the Documents and
acknowledges that all such covenants, representations and warranties shall be
deemed to have been made and are true and correct as of the effective date (as
defined below) of this Amendment.
     8. This Amendment shall be effective on the first date on which (the
“Effective Date”) each of the following has occurred: (i) the execution and
delivery of this Amendment by each Company, Laurus and Agent, (ii) the execution
and delivery of this Amendment by each Company, Laurus and Agent of the
Reaffirmation and Ratification Agreement attached hereto as Exhibit A, and
(iii) Laurus shall have received the Laurus Payment.

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     9. Except as specifically set forth in this Amendment, there are no other
amendments to the Documents, and all of the other forms, terms and provisions of
the Documents remain in full force and effect.
     10. Each Company hereby represents and warrants to the Creditors that as of
the date hereof, both before and after giving effect to this Amendment, (i) no
Event of Default (as defined in the Security Agreement) exists and is continuing
and (ii) all representations, warranties and covenants made by each Company and
its subsidiaries in connection with the Security Agreement and/or any Ancillary
Agreement referred to in the Security Agreement are true, correct and complete
and all of each Company and its respective subsidiaries’ covenant requirements
have been met. The Parent hereby agrees to, no later than five days after the
date hereof, file an 8-K with the Securities and Exchange Commission disclosing
the transactions set forth in this Amendment (the “8-K”) on the date hereof.
     11. This Amendment shall be binding upon the parties hereto and their
respective successors and permitted assigns and shall inure to the benefit of
and be enforceable by each of the parties hereto and its successors and
permitted assigns. THIS AMENDMENT SHALL BE CONSTRUED AND ENFORCED IN ACCORDANCE
WITH AND GOVERNED BY THE LAW OF THE STATE OF NEW YORK. This Amendment may be
executed in any number of counterparts, each of which shall be an original, but
all of which shall constitute one instrument.

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     IN WITNESS WHEREOF, each Company, Laurus and LV has caused this Amendment
to be effective and signed in its name effective as of the date set forth above.

                  PROXYMED, INC.    
 
           
 
  By:   /s/ Peter Fleming
 
        Name: Peter Fleming
Title: Interim CEO    
 
                PROXYMED TRANSACTION SERVICES, INC.    
 
           
 
  By:   /s/ Peter Fleming
 
        Name: Peter Fleming
Title: Interim CEO    
 
                PROXYMED LAB SERVICES, LLC         By: Proxymed Transaction
Services, Inc.,
its sole member    
 
           
 
  By:   /s/ Peter Fleming
 
        Name: Peter Fleming
Title: Interim CEO    
 
                LAURUS MASTER FUND, LTD.         By: Laurus Capital Management,
LLC,
its investment manager    
 
           
 
  By:   /s/ Scott Bluestein
 
        Name: Scott Bluestein
Title: Authorized Signatory    
 
                LV ADMINISTRATIVE SERVICES, INC.
as Agent    
 
           
 
  By:   /s/ Scott Bluestein
 
        Name: Scott Bluestein
Title: Authorized Signatory    

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EXHIBIT A
REAFFIRMATION AND RATIFICATION AGREEMENT
May 8, 2008
LV Administrative Services, Inc.
335 Madison Avenue, 10th Floor
New York, New York 10017
Ladies and Gentlemen:
On September 28, 2007, LV Administrative Services, Inc., a Delaware corporation
(the “Agent”) was appointed administrative and collateral agent for Laurus
Master Fund, Ltd., a Cayman Islands company (“Laurus” and, together with Laurus’
permitted assigns and Agent, the “Creditor Parties” and each, a “Creditor
Party”). Reference is made to the (a) Security and Purchase Agreement, dated as
of December 6, 2005 by and between Proxymed, Inc., a Florida corporation doing
business as MedAvant (“Parent”), ProxyMed Transaction Services, Inc. (f/k/a
MedUnite, Inc.) a Delaware corporation (“PTS”), ProxyMed Lab Services LLC (f/k/a
Key Communications Service, Inc.) a Delaware limited liability company (“PLS”
and together with Parent and PTS, the “Companies” and each, a “Company”) and
Laurus (as amended, modified or supplemented from time to time, the “Security
Agreement”), (b) a Stock Pledge Agreement, dated as of December 6, 2005 made by
Parent in favor of Laurus (as amended, modified or supplemented from time to
time, the “Stock Pledge”), (c) a Member Pledge Agreement, dated as of
December 6, 2005 made by PTS in favor of Laurus (as amended, modified or
supplemented from time to time, the “Member Pledge”) and (d) an IP Security
Agreement, dated as of December 6, 2005 made by the Companies in favor of Laurus
(as amended, modified or supplemented from time to time, the “IP Security
Agreement”) (the Security Agreement, the Stock Pledge, the Member Pledge and the
IP Security Agreement, collectively, the “Existing Security Agreements”). Terms
used herein and not otherwise defined herein shall have those definitions
ascribed such terms in the Security Agreement.
          To induce Agent and Laurus to agree to the amendments set forth in
that certain Omnibus Amendment, dated May 8, 2008 by and among Agent, Laurus,
and each Company (as amended, modified or supplemented from time to time, the
“Amendment”), each Company hereby:
     1. represents and warrants to each Creditor Party that it has reviewed and
approved the terms and provisions of the Amendment and the documents,
instruments and agreements entered into in connection therewith;
     2. acknowledges, ratifies and confirms that all indebtedness incurred by,
and all other obligations and liabilities of, each Company under the Security
Agreement and the Ancillary Agreements referred to therein, both before and
after giving effect to the Amendment, are (i) “Obligations” under, and defined
in the Security Agreement, (ii) “Indebtedness” under, and as defined in, the
Stock Pledge Agreement, (iii) “Secured Obligations” under, and as defined in,
the Member Pledge Agreement and (iii) “Obligations” under, and as defined in the
IP Security Agreement;

 

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     3. acknowledges, ratifies and confirms that the Amendment is a (i)
“Document” under, and as defined in, each of the Security Agreement and the
Stock Pledge Agreement and (ii) “Purchase Document” under, and as defined in the
Member Pledge Agreement;
     4. acknowledges, ratifies and confirms that all of the terms, conditions,
representations and covenants contained in the Existing Security Agreements are
in full force and effect and shall remain in full force and effect both before
and after giving effect to the execution and effectiveness of the Amendment;
     5. represents and warrants that no offsets, counterclaims or defenses exist
as of the date hereof with respect to any of the undersigned’s obligations under
any Existing Security Agreement; and
     6. acknowledges, ratifies and confirms the grant by each Company to any
Creditor Party of a security interest in the assets of (including the equity
interests owned by) each Company, respectively, as more specifically set forth
in the Existing Security Agreements.

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This letter agreement shall be governed by and construed in accordance with the
laws of the
State of New York.

                      Very truly yours,    
 
                        PROXYMED, INC.    
 
               
 
      By:   /s/ Peter Fleming
 
            Name: Peter Fleming
Title: Interim CEO    
 
                        PROXYMED TRANSACTION SERVICES, INC.    
 
               
 
      By:   /s/ Peter Fleming    
 
                        Name: Peter Fleming
Title: Interim CEO    
 
                        PROXYMED LAB SERVICES, LLC
By: Proxymed Transaction Services, Inc.,
its sole member    
 
               
 
      By:   /s/ Peter Fleming    
 
                        Name: Peter Fleming
Title: Interim CEO    

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          ACKNOWLEDGED:    
 
        LAURUS MASTER FUND, LTD.    
 
        By: Laurus Capital Mangement, LLC, as investment manager    
 
       
By:
  /s/ Scott Bluestein
 
    Name: Scott Bluestein
Title: Authorized Signatory    
 
        LV ADMINISTRATIVE SERVICES, INC
as Agent    
 
       
By:
  /s/ Scott Bluestein    
 
        Name: Scott Bluestein
Title: Authorized Signatory    

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