**EXHIBIT 10.54****SEPARATION AGREEMENT AND RELEASE**     This Separation Agreement and Release (this Agreement”) is entered into between John Lettkoand 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. TheEmployee 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 andacknowledge as follows:     1. Termination. Effective as of February 28, 2008 (the “Termination Date”), theEmployment 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 andDirector 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 payEmployee accrued Vacation/Paid Time Off in the amount of $55,654.04. In addition, Company will payEmployee all reimbursable business expenses that are outstanding.     3. Severance.          a. The Company agrees to pay Employee as severance compensation the gross amount of TwoHundred Ten Thousand Dollars and No Cents ($210,000), minus taxes and withholdings. This severancepay will be paid in equal installments over a six (6) month period, pursuant to the Company’snormal payroll schedule. The first installment of this severance pay shall be sent to Employee onthe next regular payroll day that occurs after Foley & Lardner has received an original of thisAgreement that has been signed and dated by Employee.          b. If Employee timely elects, pursuant to “COBRA,” to continue participation in any applicablegroup medical or dental plan in which he is currently enrolled, the Company will pay the normalemployer share of the monthly premium for Employee’s current coverage, on behalf of Employee, forthe first 6 months of such COBRA continuation. After this 6 month period, any furtherparticipation in the Company’s group medical and dental plan pursuant to COBRA will be at theexpense of Employee and will be governed by the applicable plan provisions and the provisions ofCOBRA. Employee hereby authorizes the Company to deduct the normal employee share of the premiumfrom his severance payments. However, the payment by the Company of the employee share of themonthly premium pursuant to this paragraph will not begin unless and until the revocation periodcontained in this Agreement has expired without revocation by Employee.          c. Employee and Company each acknowledge that the benefits provided hereunder are differentthan those set forth in the Termination section 5 of the May 10, 2005 Employment Agreement betweenthem. This Agreement is the result of Employee and Company negotiating a mutually agreed uponcompromise of potentially disputed benefit levels that could have been asserted by Employee orCompany under the terms of the Employment Agreement.     4. References. Any employment references requested by a third party and approved byEmployee will be directed to the Chairman of the Board, Jim Hudak.     5. Public Announcement. The parties will jointly prepare a public announcementregarding Employee’s termination, to be released no later than four (4) days after the TerminationDate.     6. Employee Release. Employee releases the Company and the Released Parties (asdefined below) from all claims or rights of any kind arising before or through the date Employeesigns this Agreement. This release of all claims includes, but is not limited to, all claims, orrights arising out of or in connection with Employee’s employment with the Company or thetermination of that employment. Employee also releases and waives any claim or right to furtherwages, compensation, benefits, damages, penalties, attorneys’ fees, costs, or expenses of any kindfrom the Company or any of the other Released Parties. Employee fully understands and acknowledgesthat the general release of all claims contained in this paragraph means that Employee is forevergiving up and waiving all claims and rights Employee may have against the Company or any of theother Released Parties based on any conduct that occurred on or before the date Employee signs thisAgreement.          a. The term “Released Parties” includes the Company and the Company’s past and presentemployees, officers, agents, insurers, attorneys, shareholders, successors, executors andrepresentatives of any kind. The term “Released Parties” also includes the Company’s subsidiariesand 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 andaffiliate of the Company.          b. Employee fully understands and acknowledges that the general release contained aboveincludes, but is not limited to, a release of any rights or claims Employee may have under any ofthe following laws: the Age Discrimination in Employment Act; Title VII of the Civil Rights Act of1964; the Americans with Disabilities Act; the California Fair Employment and Housing Act; theReconstruction Era Civil Rights Acts; Executive Order
 

 
11246; the Rehabilitation Act of 1973; the Civil Rights Act of 1991; any other employmentdiscrimination laws; the Employee Retirement Income Security Act of 1974; state and federal familyand medical leave laws; state and federal discrimination laws; any laws that provide for payment ofattorneys’ fees, costs, expenses or punitive, exemplary or statutory damages; and any otherfederal, state, or local laws or regulations of any kind. The general release contained in thisAgreement also includes, but is not limited to, a release by Employee of any claims for wrongfultermination or any tort, breach of contract, defamation, public policy or invasion of privacyclaims. 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 andthose he does not know about.          c. Not withstanding any provision herein, all obligations to provide a defense and/orindemnification to employee pursuant to the May 10, 2005 Indemnification Agreement between Companyand Employee, the Articles and By-Laws of the Company, or any statute, including but not limited toCalifornia Labor Code section 2802, shall remain in full force and effect. Nothing containedherein shall be interpreted to impact the obligations of the Company with regard to Directors andOfficers Liability insurance coverages.     7. Company Release. In return for the promises set forth herein, the Company, on itsown 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 hisgrantees, agents, representatives, heirs, devisees, trustees, assigns, assignors, attorneys, or anyother entities in which he has an interest (collectively, the “Lettko Releasees”), from allliabilities, 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, whethersuspected or unsuspected, whether fixed or contingent, including but not limited to those arisingfrom (i) his employment with, compensation by and/or separation from the Company; and (ii) any actsor omissions occurring prior to the Effective Date by the Lettko Releasees, including those arisingunder 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 mayclaim 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 notapply to a judgment by a court of competent jurisdiction or other final adjudication of a violationof criminal law by Employee, unless Employee had reasonable cause to believe his conduct waslawful.     8. Waiver. Except as provided in Sections 7(c), 7(d), and 8(a) above, Employee andthe Company understand and agree that all of their rights under California Civil Code Section 1542are expressly waived. Section 1542 provides as follows:**A general release does not extend to claims that a creditor does not knowor suspect to exist in his favor at the time of executing the release, which ifknown 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 1542means that even if they should eventually suffer some damage arising out of Employee’s employmentand/or termination of employment with the Company, they will not be able to make any claims forthose damages, even as to claims which may now exist, but which they do not know exist, and whichif 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 notlimited to, the Company’s products, services, research and development of new products andservices, customers, methods of doing business, financial data, marketing plans and salestechniques, in each case that has or could have value to the Company, which if disclosed could bedetrimental to the Company, and which the Company has taken reasonable steps to prevent fromdisclosure to the general public. “Proprietary Information” as used herein shall mean all suchinformation that is protected in accordance with the Uniform Trade Secrets Act, codified atCalifornia Civil Code section 3426, et. seq,          a. Employee agrees that he will not use, disclose or reveal to any third party any suchProprietary 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 suchproperty to the Company.          c. Employee recognizes that the unauthorized use or disclosure of the Proprietary Informationis unlawful and that the Company may obtain damages or seek injunctive relief against him for anywillful misappropriation of same, including but not limited to treble damages and attorney feesunder the Uniform Trade Secrets Act.     10. Non-Solicitation; Non-Circumvention. Employee will not: (i) for a period of oneyear following the termination date herein solicit any current employee of Company to leave theemploy of Company or (ii) use any Proprietary Information to unlawfully interfere with any of theCompany’s business relationships, including, without limitation, those with
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customers, clients, suppliers, consultants, attorneys, accountants and other agents, whetheror not evidenced by written or oral agreements.     11. Vested Benefits.          a. Employee understands that this Agreement in no way affects any vested rights Employee mayhave, if any, under the Company’s 401(k) plan or pension plan. Employee understands andacknowledges that Employee’s eligibility for any and all other benefits of employment ceased as ofEmployee’s Termination Date.          b. Company recognizes that Employee has received certain vested stock options in accordancewith the terms of the May 10, 2005 Employment Agreement and related Stock Option Agreement. Thelatest exercise date of all such options shall be eighteen (18) months following the terminationdate 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 theCompany held by Employee are eligible for resale pursuant to Rule 144(k) promulgated under theSecurities Act of 1933, as amended, if the Company files a registration statement with theSecurities Exchange Commission (other than on Form S-8 or Form S-4) for the sale or resale ofcommon stock, the Company shall include Employee’s shares in such registration, subject to acutback of the number of Employee’s shares included in such registration should an underwriter ofthe 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, norany actions taken by either party toward compliance with the terms of this Agreement constitutes anadmission that either party acted improperly or unlawfully toward each other or violated any stateor federal law.     14. Reemployment. Employee agrees that Employee is not entitled to, and gives up anyright to, reinstatement or reemployment with the Company, and he will not at any time after signingof this Agreement apply for a position (as an employee, independent contractor or through anemployment 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 ifeither party violates any of the provisions of this Agreement, the prevailing party will beentitled to reimbursement from the other party for actual attorneys’ fees and costs incurred ineither enforcing this Agreement or in defending against a claim released by the other party inthis Agreement. This obligation to pay the Company’s attorneys’ fees and costs would not apply toan action by Employee challenging the validity of this Agreement under the Age Discrimination inEmployment Act.     16. No Other Claims or Action. Employee agrees not to (and did not already) file orjoin in any complaints, lawsuits, or proceedings of any kind against the Company or any of theother Released Parties, with the exception of the following: (a) nothing in this Agreementprevents Employee from making a claim for unemployment compensation benefits; (b) while thisAgreement does not prevent Employee from filing a charge with the EEOC or the DFEH or otherwisecooperating with the EEOC or the DFEH, this Agreement does prohibit Employee from obtaining anypersonal or monetary relief for himself based on such a charge or such cooperation. This Agreementalso prohibits Employee from obtaining any personal or monetary relief for himself or herself inany lawsuit in court or in any other proceeding of any kind instituted by Employee or by anyoneelse on behalf of Employee.     17. Company Property. Employee agrees to return all tangible Company property to theCompany including all documents, reports, credit cards, computer equipment, phones, identificationcards and papers, if any are still in his possession. Employee further represents that he hasreturned all other property and information belonging to the Company, including, but not limitedto, all confidential business information, technical and product information, pricing informationand customer information such as customer lists and customer identification information, brochures,specifications, quotations, marketing strategies, inventory records, sales records, or othersimilar material. Employee acknowledges that he has not kept any copies, nor made or retained anyabstracts or notes of such information.     18. Non-Disparagement. Employee agrees that he will not in any way disparage, defameor otherwise cause to be published or disseminated, whether verbally or in writing, any negative orcritical statements, remarks, comments or information regarding the Company or the Releasees,including, without limitation, any statement, remark or comment related to their respectivebusinesses, reputation, products, practices, services or conduct. In addition, Employee will notmake any public statements regarding the Company, without the prior written approval of theChairman of the Board of Directors Jim Hudak. The Company agrees that it will not in any waydisparage, defame or otherwise cause to be published or disseminated, whether verbally or inwriting, any negative or critical statements, remarks, comments or information regarding Employee.     19. Miscellaneous.          a. This Agreement constitutes the full, complete, unconditional, and immediate substitutionfor any and all rights, claims, demands, and causes of actions whatsoever, which heretofore existedor 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 Agreementsupersedes any and all agreements—whether written or oral—that may have previously existed betweenthe 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 thanas may be expressly provided herein.          b. In the event of Employee’s death, the rights described in this Agreement shall pass by willor by the laws of descent or distribution. This Agreement shall be binding upon the partieshereto, as well as upon all representatives, assigns, successors, heirs, affiliates and agents ofthe parties.          c. The parties hereto each represent and warrant to the other party that except to the extentotherwise provided herein, that they have not assigned or transferred to any third party any of therights, claims, causes of action or items to be released or transferred which they are obligated totransfer or to release as part of this Agreement.          d. The provisions of this Agreement may not be waived, altered, amended or repealed, in wholeor 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, thelaws of the State of California, without regard to choice of law principles. Except for actionsseeking injunctive relief (which may be brought in any appropriate jurisdiction) suit under thisAgreement shall only be brought in a court of competent jurisdiction in Orange County, State ofCalifornia. This choice of venue is intended by the parties to be mandatory and not permissive innature, and to preclude the possibility of litigation between the parties with respect to, or arising out of, this Agreement in any jurisdiction other than thatspecified in this Section. Each party waives any right it may have to assert the doctrine of forumnon conveniens or similar doctrine or to object to venue with respect to any proceeding brought inaccordance with this Section.          f. Each party agrees to perform any further acts and execute and deliver any further documentsthat 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 anyconstruction to be made of this Agreement or of any of its terms and provisions, the same shall notbe 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 beseparated from it or appropriately limited in scope shall remain fully valid, legal andenforceable.          i. The parties acknowledge and agree that they have been represented by independent counsel inthe negotiation, preparation and execution of this Agreement and that each of them have read thisAgreement and has had it fully explained by his, or its counsel prior to its execution and is fullyaware of its contents and legal effect.          j. Each party represents that it is authorized to execute this Agreement. Each personexecuting this Agreement on behalf of a person or entity represents that he or she is authorized toexecute this Agreement on behalf of said entity.          k. This Agreement may be executed in counterparts, each of which shall be considered anoriginal, but all of which shall constitute one and the samedocument. The parties agree that the delivery of this Agreement by facsimile transmission or electronicdelivery via PDF shall have the same force and effect as delivery of original signatures and thateach party may use such facsimile or PDF as evidence of the execution and delivery of thisAgreement 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 AGENERAL RELEASE OF ALL KNOWN AND UNKNOWN CLAIMS OF ANY KIND AGAINST THE COMPANY OR ANY OF THE OTHERRELEASED 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 DateChairman of the Board of Directors  
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