EXHIBIT 10.54
SEPARATION AGREEMENT AND RELEASE
     This Separation Agreement and Release (this Agreement”) is entered into
between John Lettko and Proxymed, Inc., dba MedAvant Healthcare, effective
February 27, 2008 (the “Effective Date”). In this Agreement “Employee” refers to
John Lettko and “the Company” refers to Proxymed, Inc. The Employee enters into
this Agreement on behalf of himself, and his spouse, heirs, successors, assigns,
executors, and representatives of any kind, if any. In consideration of the
terms, conditions, and provisions contained in this Agreement, the Employee and
the Company agree and acknowledge as follows:
     1. Termination. Effective as of February 28, 2008 (the “Termination Date”),
the Employment Agreement between the parties is hereby terminated and of no
further force or effect. Employee, by his execution of this Agreement, hereby
resigns as the Chief Executive Officer and Director of the Company and any of
the Company’s affiliated or subsidiary entities.
     2. Accrued Vacation; Business Expenses. On the Termination Date, the
Company will pay Employee accrued Vacation/Paid Time Off in the amount of
$55,654.04. In addition, Company will pay Employee all reimbursable business
expenses that are outstanding.
     3. Severance.
          a. The Company agrees to pay Employee as severance compensation the
gross amount of Two Hundred Ten Thousand Dollars and No Cents ($210,000), minus
taxes and withholdings. This severance pay will be paid in equal installments
over a six (6) month period, pursuant to the Company’s normal payroll schedule.
The first installment of this severance pay shall be sent to Employee on the
next regular payroll day that occurs after Foley & Lardner has received an
original of this Agreement that has been signed and dated by Employee.
          b. If Employee timely elects, pursuant to “COBRA,” to continue
participation in any applicable group medical or dental plan in which he is
currently enrolled, the Company will pay the normal employer share of the
monthly premium for Employee’s current coverage, on behalf of Employee, for the
first 6 months of such COBRA continuation. After this 6 month period, any
further participation in the Company’s group medical and dental plan pursuant to
COBRA will be at the expense of Employee and will be governed by the applicable
plan provisions and the provisions of COBRA. Employee hereby authorizes the
Company to deduct the normal employee share of the premium from his severance
payments. However, the payment by the Company of the employee share of the
monthly premium pursuant to this paragraph will not begin unless and until the
revocation period contained in this Agreement has expired without revocation by
Employee.
          c. Employee and Company each acknowledge that the benefits provided
hereunder are different than those set forth in the Termination section 5 of the
May 10, 2005 Employment Agreement between them. This Agreement is the result of
Employee and Company negotiating a mutually agreed upon compromise of
potentially disputed benefit levels that could have been asserted by Employee or
Company under the terms of the Employment Agreement.
     4. References. Any employment references requested by a third party and
approved by Employee will be directed to the Chairman of the Board, Jim Hudak.
     5. Public Announcement. The parties will jointly prepare a public
announcement regarding Employee’s termination, to be released no later than four
(4) days after the Termination Date.
     6. Employee Release. Employee releases the Company and the Released Parties
(as defined below) from all claims or rights of any kind arising before or
through the date Employee signs this Agreement. This release of all claims
includes, but is not limited to, all claims, or rights arising out of or in
connection with Employee’s employment with the Company or the termination of
that employment. Employee also releases and waives any claim or right to further
wages, compensation, benefits, damages, penalties, attorneys’ fees, costs, or
expenses of any kind from the Company or any of the other Released Parties.
Employee fully understands and acknowledges that the general release of all
claims contained in this paragraph means that Employee is forever giving up and
waiving all claims and rights Employee may have against the Company or any of
the other Released Parties based on any conduct that occurred on or before the
date Employee signs this Agreement.
          a. The term “Released Parties” includes the Company and the Company’s
past and present employees, officers, agents, insurers, attorneys, shareholders,
successors, executors and representatives of any kind. The term “Released
Parties” also includes the Company’s subsidiaries and affiliates and their past
and present employees, officers, agents, insurers, attorneys, shareholders,
successors, executors and representatives of any kind. The term “Released
Parties” also includes all current directors of the Company and all current
directors of any subsidiary and affiliate of the Company.
          b. Employee fully understands and acknowledges that the general
release contained above includes, but is not limited to, a release of any rights
or claims Employee may have under any of the following laws: the Age
Discrimination in Employment Act; Title VII of the Civil Rights Act of 1964; the
Americans with Disabilities Act; the California Fair Employment and Housing Act;
the Reconstruction Era Civil Rights Acts; Executive Order

 

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11246; the Rehabilitation Act of 1973; the Civil Rights Act of 1991; any other
employment discrimination laws; the Employee Retirement Income Security Act of
1974; state and federal family and medical leave laws; state and federal
discrimination laws; any laws that provide for payment of attorneys’ fees,
costs, expenses or punitive, exemplary or statutory damages; and any other
federal, state, or local laws or regulations of any kind. The general release
contained in this Agreement also includes, but is not limited to, a release by
Employee of any claims for wrongful termination or any tort, breach of contract,
defamation, public policy or invasion of privacy claims. The release also
includes a release of any claims arising out of any Company policy, practice,
contract or agreement. The release covers both claims that Employee knows about
and those he does not know about.
          c. Not withstanding any provision herein, all obligations to provide a
defense and/or indemnification to employee pursuant to the May 10, 2005
Indemnification Agreement between Company and Employee, the Articles and By-Laws
of the Company, or any statute, including but not limited to California Labor
Code section 2802, shall remain in full force and effect. Nothing contained
herein shall be interpreted to impact the obligations of the Company with regard
to Directors and Officers Liability insurance coverages.
     7. Company Release. In return for the promises set forth herein, the
Company, on its own behalf, and on behalf of its successors and assigns
(collectively, the “Company Releasors”), hereby agrees to release and forever
discharge by this Agreement, Employee and each of his grantees, agents,
representatives, heirs, devisees, trustees, assigns, assignors, attorneys, or
any other entities in which he has an interest (collectively, the “Lettko
Releasees”), from all liabilities, causes of actions, charges, complaints,
suits, claims, obligations, costs, losses, damages, rights, judgments,
attorneys’ fees, expenses, bonds, bills, penalties, fines, and all other legal
responsibilities of any form whatsoever, whether known or unknown, whether
suspected or unsuspected, whether fixed or contingent, including but not limited
to those arising from (i) his employment with, compensation by and/or separation
from the Company; and (ii) any acts or omissions occurring prior to the
Effective Date by the Lettko Releasees, including those arising under any theory
of law, whether common, constitutional, statutory or other of any jurisdiction,
foreign or domestic, whether known or unknown, whether in law or in equity,
which they had or may claim to have against any of the Lettko Releasees.
          a. The Company’s Release in this section, and the Company’s Waiver in
Section 9 below, do not apply to a judgment by a court of competent jurisdiction
or other final adjudication of a violation of criminal law by Employee, unless
Employee had reasonable cause to believe his conduct was lawful.
     8. Waiver. Except as provided in Sections 7(c), 7(d), and 8(a) above,
Employee and the Company understand and agree that all of their rights under
California Civil Code Section 1542 are expressly waived. Section 1542 provides
as follows:
A general release does not extend to claims that a creditor does not know or
suspect to exist in his favor at the time of executing the release, which if
known by him, must have materially affected his settlement with the debtor.
     Employee and the Company understand that by waiving their rights under
Civil Code Section 1542 means that even if they should eventually suffer some
damage arising out of Employee’s employment and/or termination of employment
with the Company, they will not be able to make any claims for those damages,
even as to claims which may now exist, but which they do not know exist, and
which if known would have affected their decision to sign this Agreement.
     9. Confidentiality; Use of Trade Secrets. During his employment with the
Company, Employee had access to the Company’s trade secrets and proprietary
information, including but not limited to, the Company’s products, services,
research and development of new products and services, customers, methods of
doing business, financial data, marketing plans and sales techniques, in each
case that has or could have value to the Company, which if disclosed could be
detrimental to the Company, and which the Company has taken reasonable steps to
prevent from disclosure to the general public. “Proprietary Information” as used
herein shall mean all such information that is protected in accordance with the
Uniform Trade Secrets Act, codified at California Civil Code section 3426, et.
seq,
          a. Employee agrees that he will not use, disclose or reveal to any
third party any such Proprietary Information.
          b. Employee agrees that he has returned all confidential or
Proprietary Information, documents, materials, apparatus, equipment, other
physical property or the reproduction of any such property to the Company.
          c. Employee recognizes that the unauthorized use or disclosure of the
Proprietary Information is unlawful and that the Company may obtain damages or
seek injunctive relief against him for any willful misappropriation of same,
including but not limited to treble damages and attorney fees under the Uniform
Trade Secrets Act.
     10. Non-Solicitation; Non-Circumvention. Employee will not: (i) for a
period of one year following the termination date herein solicit any current
employee of Company to leave the employ of Company or (ii) use any Proprietary
Information to unlawfully interfere with any of the Company’s business
relationships, including, without limitation, those with

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customers, clients, suppliers, consultants, attorneys, accountants and other
agents, whether or not evidenced by written or oral agreements.
     11. Vested Benefits.
          a. Employee understands that this Agreement in no way affects any
vested rights Employee may have, if any, under the Company’s 401(k) plan or
pension plan. Employee understands and acknowledges that Employee’s eligibility
for any and all other benefits of employment ceased as of Employee’s Termination
Date.
          b. Company recognizes that Employee has received certain vested stock
options in accordance with the terms of the May 10, 2005 Employment Agreement
and related Stock Option Agreement. The latest exercise date of all such options
shall be eighteen (18) months following the termination date referenced above,
in accordance with Section 3(c) of the Employment Agreement.
     12. Register of Stock. Until such time as all the shares of common stock of
the Company held by Employee are eligible for resale pursuant to Rule 144(k)
promulgated under the Securities Act of 1933, as amended, if the Company files a
registration statement with the Securities Exchange Commission (other than on
Form S-8 or Form S-4) for the sale or resale of common stock, the Company shall
include Employee’s shares in such registration, subject to a cutback of the
number of Employee’s shares included in such registration should an underwriter
of the offering that is the subject of such registration request such cutback.
     13. No Admission. Neither the Company’s nor Employee’s signing of this
Agreement, nor any actions taken by either party toward compliance with the
terms of this Agreement constitutes an admission that either party acted
improperly or unlawfully toward each other or violated any state or federal law.
     14. Reemployment. Employee agrees that Employee is not entitled to, and
gives up any right to, reinstatement or reemployment with the Company, and he
will not at any time after signing of this Agreement apply for a position (as an
employee, independent contractor or through an employment agency) with the
Company or any of its parent, subsidiary or affiliated companies.
     15. Attorney’s Fees and Costs. Employee and Company understand and agree
that if either party violates any of the provisions of this Agreement, the
prevailing party will be entitled to reimbursement from the other party for
actual attorneys’ fees and costs incurred in either enforcing this Agreement or
in defending against a claim released by the other party in this Agreement. This
obligation to pay the Company’s attorneys’ fees and costs would not apply to an
action by Employee challenging the validity of this Agreement under the Age
Discrimination in Employment Act.
     16. No Other Claims or Action. Employee agrees not to (and did not already)
file or join in any complaints, lawsuits, or proceedings of any kind against the
Company or any of the other Released Parties, with the exception of the
following: (a) nothing in this Agreement prevents Employee from making a claim
for unemployment compensation benefits; (b) while this Agreement does not
prevent Employee from filing a charge with the EEOC or the DFEH or otherwise
cooperating with the EEOC or the DFEH, this Agreement does prohibit Employee
from obtaining any personal or monetary relief for himself based on such a
charge or such cooperation. This Agreement also prohibits Employee from
obtaining any personal or monetary relief for himself or herself in any lawsuit
in court or in any other proceeding of any kind instituted by Employee or by
anyone else on behalf of Employee.
     17. Company Property. Employee agrees to return all tangible Company
property to the Company including all documents, reports, credit cards, computer
equipment, phones, identification cards and papers, if any are still in his
possession. Employee further represents that he has returned all other property
and information belonging to the Company, including, but not limited to, all
confidential business information, technical and product information, pricing
information and customer information such as customer lists and customer
identification information, brochures, specifications, quotations, marketing
strategies, inventory records, sales records, or other similar material.
Employee acknowledges that he has not kept any copies, nor made or retained any
abstracts or notes of such information.
     18. Non-Disparagement. Employee agrees that he will not in any way
disparage, defame or otherwise cause to be published or disseminated, whether
verbally or in writing, any negative or critical statements, remarks, comments
or information regarding the Company or the Releasees, including, without
limitation, any statement, remark or comment related to their respective
businesses, reputation, products, practices, services or conduct. In addition,
Employee will not make any public statements regarding the Company, without the
prior written approval of the Chairman of the Board of Directors Jim Hudak. The
Company agrees that it will not in any way disparage, defame or otherwise cause
to be published or disseminated, whether verbally or in writing, any negative or
critical statements, remarks, comments or information regarding Employee.
     19. Miscellaneous.
          a. This Agreement constitutes the full, complete, unconditional, and
immediate substitution for any and all rights, claims, demands, and causes of
actions whatsoever, which heretofore existed or might have existed on behalf of
any party against any other party and

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their successors, predecessors, subsidiaries, affiliates, parents, stockholders,
partners, employees, agents, officers, and directors. Except as otherwise
specified herein, this Agreement supersedes any and all agreements—whether
written or oral—that may have previously existed between the parties. No
statements, promises, or representations have been made by any party to any
other, or relied upon, and no consideration has been offered, promised,
expected, or held out other than as may be expressly provided herein.
          b. In the event of Employee’s death, the rights described in this
Agreement shall pass by will or by the laws of descent or distribution. This
Agreement shall be binding upon the parties hereto, as well as upon all
representatives, assigns, successors, heirs, affiliates and agents of the
parties.
          c. The parties hereto each represent and warrant to the other party
that except to the extent otherwise provided herein, that they have not assigned
or transferred to any third party any of the rights, claims, causes of action or
items to be released or transferred which they are obligated to transfer or to
release as part of this Agreement.
          d. The provisions of this Agreement may not be waived, altered,
amended or repealed, in whole or in part, except upon the prior written consent
of the parties hereto.
          e. This Agreement shall be construed and enforced in accordance with,
and governed by, the laws of the State of California, without regard to choice
of law principles. Except for actions seeking injunctive relief (which may be
brought in any appropriate jurisdiction) suit under this Agreement shall only be
brought in a court of competent jurisdiction in Orange County, State of
California. This choice of venue is intended by the parties to be mandatory and
not permissive in nature, and to preclude the possibility of litigation between
the parties with respect to, or arising out of, this Agreement in any
jurisdiction other than that specified in this Section. Each party waives any
right it may have to assert the doctrine of forum non conveniens or similar
doctrine or to object to venue with respect to any proceeding brought in
accordance with this Section.
          f. Each party agrees to perform any further acts and execute and
deliver any further documents that may be reasonably necessary to carry out the
provisions of this Agreement.
          g. Each party has cooperated in the drafting and preparation of this
Agreement. In any construction to be made of this Agreement or of any of its
terms and provisions, the same shall not be construed against any party.
          h. If any portion of this Agreement is found to be illegal, invalid or
unenforceable, Employee, the Company and the other Released Parties desire that
all other portions that can be separated from it or appropriately limited in
scope shall remain fully valid, legal and enforceable.
          i. The parties acknowledge and agree that they have been represented
by independent counsel in the negotiation, preparation and execution of this
Agreement and that each of them have read this Agreement and has had it fully
explained by his, or its counsel prior to its execution and is fully aware of
its contents and legal effect.
          j. Each party represents that it is authorized to execute this
Agreement. Each person executing this Agreement on behalf of a person or entity
represents that he or she is authorized to execute this Agreement on behalf of
said entity.
          k. This Agreement may be executed in counterparts, each of which shall
be considered an original, but all of which shall constitute one and the same
document. The parties agree that the delivery of this Agreement by facsimile
transmission or electronic delivery via PDF shall have the same force and effect
as delivery of original signatures and that each party may use such facsimile or
PDF as evidence of the execution and delivery of this Agreement by all parties
to the same extent that the original signature could be used.
     20. This Agreement shall be deemed effective as of the Effective Date.
     EMPLOYEE CERTIFIES AS FOLLOWS: I HAVE READ THIS AGREEMENT, UNDERSTAND IT,
KNOW IT CONTAINS A GENERAL RELEASE OF ALL KNOWN AND UNKNOWN CLAIMS OF ANY KIND
AGAINST THE COMPANY OR ANY OF THE OTHER RELEASED PARTIES, AND I AM VOLUNTARILY
ENTERING INTO IT.

     
/s/ John Lettko
  2/28/2008
 
   
John Lettko
  Date
 
   
APPROVED:
   
 
   
/s/ James Brown 2-28-08
     
 
 
James Brown, Esq.
   
Attorney for Employee
   
 
   
Proxymed, Inc.
   
 
   
/s/ Jim Hudak
  2/28/2008
 
   
By: Jim Hudak
  Date
Chairman of the Board of Directors
   

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