OMNIBUS AMENDMENT
Exhibit 10.56
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.
(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/ Xxxxx Xxxxxxx
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| Name: Xxxxx Xxxxxxx Title: Interim CEO |
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| PROXYMED TRANSACTION SERVICES, INC. | ||||||
| By: | /s/ Xxxxx Xxxxxxx
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| Name: Xxxxx Xxxxxxx Title: Interim CEO |
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| PROXYMED LAB SERVICES, LLC | ||||||
| By: Proxymed Transaction Services, Inc., its sole member |
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| By: | /s/ Xxxxx Xxxxxxx
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| Name: Xxxxx Xxxxxxx Title: Interim CEO |
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| LAURUS MASTER FUND, LTD. | ||||||
| By: Laurus Capital Management, LLC, its investment manager |
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| By: | /s/ Xxxxx Xxxxxxxxx
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| Name: Xxxxx Xxxxxxxxx Title: Authorized Signatory |
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| LV ADMINISTRATIVE SERVICES, INC. as Agent |
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| By: | /s/ Xxxxx Xxxxxxxxx
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| Name: Xxxxx Xxxxxxxxx Title: Authorized Signatory |
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EXHIBIT A
REAFFIRMATION AND RATIFICATION AGREEMENT
May 8, 2008
LV Administrative Services, Inc.
000 Xxxxxxx Xxxxxx, 00xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
000 Xxxxxxx Xxxxxx, 00xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
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;
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.
State of New York.
| Very truly yours, | ||||||||
| PROXYMED, INC. | ||||||||
| By: | /s/ Xxxxx Xxxxxxx
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| Name: Xxxxx Xxxxxxx Title: Interim CEO |
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| PROXYMED TRANSACTION SERVICES, INC. | ||||||||
| By: | /s/ Xxxxx Xxxxxxx | |||||||
| Name: Xxxxx Xxxxxxx Title: Interim CEO |
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| PROXYMED LAB SERVICES, LLC By: Proxymed Transaction Services, Inc., its sole member |
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| By: | /s/ Xxxxx Xxxxxxx | |||||||
| Name: Xxxxx Xxxxxxx Title: Interim CEO |
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| ACKNOWLEDGED: | ||||
| LAURUS MASTER FUND, LTD. | ||||
| By: Laurus Capital Mangement, LLC, as investment manager | ||||
By:
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/s/ Xxxxx Xxxxxxxxx
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| Name: Xxxxx Xxxxxxxxx Title: Authorized Signatory |
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| LV ADMINISTRATIVE SERVICES, INC as Agent |
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By:
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/s/ Xxxxx Xxxxxxxxx | |||
| Name: Xxxxx Xxxxxxxxx Title: Authorized Signatory |
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