Document:

EX-10.50 OVERADVANCE SIDE LETTER

 

Exhibit 10.50

June 21, 2007

ProxyMed, Inc.

1854 Shackleford Ct., Suite 200

Norcross, Georgia 30093

Attention: Chief Financial Officer and General Counsel

               Re: Overadvance Side Letter

     Reference is hereby made to that certain Security and Purchase Agreement dated as of December
6, 2005 by and among Proxymed, Inc., a Florida corporation (the “Parent”), ProxyMed Transaction
Services, LLC, a Delaware limited liability company (“PTS”), PlanVista Corporation, a Delaware
corporation (“PlanVista”), Plan Vista Solutions, Inc., a New York corporation (“PVS”) and National
Network Services, LLC, a Delaware limited liability company (“NNS”, and together with the Parent,
PTS, PlanVista and PVS, the “Companies” and each, a “Company”) and Laurus Master Fund, Ltd.
(“Laurus”) (as amended, modified and/or supplemented from time to time, the “Security Agreement”).
Capitalized terms used but not defined herein shall have the meanings ascribed them in the Security
Agreement. Subject to satisfaction of the Overadvance Conditions (as defined below), Laurus is
hereby notifying the Companies of its decision to exercise the discretion granted to it pursuant to
Section 2(a)(ii) of the Security Agreement to make Loans to the Companies during the Period (as
defined below) in excess of the Formula Amount on the date hereof (the “Overadvance”). Subject to
satisfaction of the Overadvance Conditions, the aggregate principal amount of the Overadvance as of
the date hereof shall be $3,000,000 (the “Initial Overadvance Amount”). The outstanding
Overadvance shall at no time exceed the lesser of (x) Applicable Overadvance Amount (as defined
below) and (y) the remainder of the Capital Availability Amount less the Formula Amount as of the
date of determination (the lesser of clauses (x) and (y) above, the “Maximum Overadvance Amount”).
The “Applicable Overadvance Amount” shall mean on any date of determination such amount set forth
on Annex A hereto under the heading “Pre-Commitment” and opposite the period during which
such determination is made; provided, that, in the event that the Companies deliver
to Laurus, on or prior to August 10, 2007, evidence in form and substance satisfactory to Laurus
(as determined by Laurus in its sole discretion) of a firm “commitment” of debt or equity financing
which will result in gross cash proceeds to the Companies of no less than $22,000,000, the
Applicable Overadvance Amount shall mean on any date of determination such amount set forth on
Annex A hereto under the heading “Post-Commitment” and opposite the period during which
such determination is made.

 

 

     In connection with making the Overadvance, for a period commencing on the date hereof through
and including June 30, 2008 (the “Period”), Laurus hereby waives compliance with Section 3 of the
Security Agreement, but solely as such provision relates to the immediate repayment requirement for
Overadvances. Laurus further agrees that solely for such Period (but not thereafter), (i) the
incurrence and existence of the Overadvance shall not trigger an Event of Default under Section
19(a) of the Security Agreement and (ii) during the Period, the rate of interest applicable to such
Overadvances shall be as set forth in Section 5(b)(ii) of the Security Agreement (collectively, the
“Overadvance Rate”). Interest shall be (i) calculated on the basis of a 360 day year, and (ii)
payable monthly, in arrears, commencing on July 1, 2007 on the first business day of each
consecutive calendar month thereafter through and including the expiration of the Period, whether
by acceleration or otherwise. All other terms and provisions of the Security Agreement and the
Ancillary Agreements shall remain in full force and effect. For the avoidance of doubt, all
proceeds applied by any Company in repayment of its obligations to Laurus hereunder and under the
Security Agreement and the Ancillary Agreements shall be first applied as a repayment of the
Overadvance unless otherwise agreed by Laurus. Once repaid, the Overadvance may be reborrowed
during the Period provided that the maximum amount of the Overadvance outstanding shall not at any
time exceed the Maximum Overadvance Amount.

     Each Company hereby acknowledges and agrees that Laurus’ obligation to fund the Initial
Overadvance Amount on the date hereof and each permitted reborrowing thereof after the date hereof
up to the Maximum Overadvance Amount shall, at the time of such making of such Overadvance or
reborrowing, and immediately after giving effect thereto, be subject to the satisfaction of the
following conditions (the “Overadvance Conditions”): (i) no Event of Default shall exist and be
continuing as of such date; (ii) all representations, warranties and covenants made by each Company
in connection with the Security Agreement and the Ancillary Agreements shall be true, correct and
complete as of such date; (iii) each Company and its Subsidiaries shall have taken all action
necessary to grant Laurus “control” over all of such Company’s and its respective Subsidiaries’
Deposit Accounts (the “Control Accounts”), with any agreements establishing “control” to be in form
and substance satisfactory to Laurus and (iv) the Companies shall have provided to Laurus on the
1st and 15th of each month during the Period a borrowing base certificate
(each, a “Certificate”) in the form attached hereto as Annex B, which Certificate shall be
properly completed and executed as determined by Laurus in its reasonable discretion. “Control”
over such Control Accounts shall be released upon the indefeasible repayment in full and
termination of the Overadvance (together with all accrued interest and fees which remain unpaid in
respect thereof).

     Each Company hereby acknowledges and agrees that all amounts outstanding under the Overadvance
(together with accrued interest and fees which remain unpaid in respect thereof) on the date of
expiration of the Period shall, jointly and severally, be repaid in full by the Companies on such
date of expiration. Each Company hereby further acknowledges and agrees that all amounts
outstanding under the Overadvance (together with accrued interest and fees which remain unpaid in
respect thereof) in excess of the Maximum Overadvance Amount (each, an “Excess”) at any time shall,
jointly and severally, be repaid in full by the Companies within 3 business days of the first date
of each such Excess. The failure to make any required repayment of an Overadvance shall give rise
to an immediate Event of Default.

2

 

     The Parent understands that it has an affirmative obligation to make prompt public disclosure
of material agreements and material amendments to such agreements. It is the Parent’s determination
that this Overadvance Side Letter and the related amendment dated as of the date hereof are
material. The Parent agrees to file an 8-K within 4 days of the date hereof and in the form
otherwise prescribed by the SEC.

     This letter may not be amended or waived except by an instrument in writing signed by each of
the Companies and Laurus. This letter may be executed in any number of counterparts, each of which
shall be an original and all of which, when taken together, shall constitute one agreement.
Delivery of an executed signature page of this letter by facsimile transmission shall be effective
as delivery of a manually executed counterpart hereof or thereof, as the case may be. THIS LETTER
SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK. This
letter sets forth the entire agreement between the parties hereto as to the matters set forth
herein and supersede all prior communications, written or oral, with respect to the matters herein.

     This Overadvance Side Letter shall for all purposes be deemed to be an Ancillary Agreement.

     If the foregoing meets with the Companies’ approval please signify the Companies’ acceptance
of the terms hereof by signing below.

	 	 	 	 	 	 	 
	 	 	LAURUS MASTER FUND, LTD.	 	 
	 
	 	 	 	 	 	 
	 

	 	By:	 	/s/ David Grin	 	 
	 

	 	Name:
	 	 

	 	 
	 

	 	Title:	 	 	 	 

3

 

AGREED AND ACCEPTED ON THE DATE HEREOF:

	 	 	 	 	 
	 

	 	 	 	 
	PROXYMED, INC.	 	 
	 
	 	 	 	 
	By:
	 	/s/ Gerard M. Hayden	 	 
	 

	 	 	 	 
	Name:
	 	Gerard M. Hayden	 	 
	 

	 	 	 	 
	Title:
	 	CFO	 	 
	 

	 	 	 	 
	 
	 	 	 	 
	PROXYMED TRANSACTION SERVICES, LLC	 	 
	 
	 	 	 	 
	By:
	 	/s/ Gerard M. Hayden	 	 
	 

	 	 	 	 
	Name:
	 	Gerard M. Hayden	 	 
	 

	 	 	 	 
	Title:
	 	CFO	 	 
	 

	 	 	 	 
	 
	 	 	 	 
	PLANVISTA CORPORATION	 	 
	 
	 	 	 	 
	By:
	 	/s/ Gerard M. Hayden	 	 
	 

	 	 	 	 
	Name:
	 	Gerard M. Hayden	 	 
	 

	 	 	 	 
	Title:
	 	CFO	 	 
	 

	 	 	 	 
	 
	 	 	 	 
	PLAN VISTA SOLUTIONS, INC.	 	 
	 
	 	 	 	 
	By:
	 	/s/ Gerard M. Hayden	 	 
	 

	 	 	 	 
	Name:
	 	Gerard M. Hayden	 	 
	 

	 	 	 	 
	Title:
	 	CFO	 	 
	 

	 	 	 	 
	 
	 	 	 	 
	NATIONAL NETWORK SERVICES, LLC	 	 
	 
	 	 	 	 
	By:
	 	/s/ Gerard M. Hayden	 	 
	 

	 	 	 	 
	Name:
	 	Gerard M. Hayden	 	 
	 

	 	 	 	 
	Title:
	 	CFO	 	 
	 

	 	 	 	 

4

 

ANNEX A

	 	 	 	 	 
	Period	 	Pre-Commitment	 	Post-Commitment
	June 21, 2007 through and including
November 30, 2007
	 	$3,000,000	 	$4,200,000
	 
	 	 	 	 
	December 1, 2007 through and including
December 31, 2007
	 	$2,750,000	 	$3,900,000
	 
	 	 	 	 
	January 1, 2008 through and including
January 31, 2008
	 	$2,500,000	 	$3,600,000
	 
	 	 	 	 
	February 1, 2008 through and including
February 28, 2008
	 	$2,250,000	 	$3,300,000
	 
	 	 	 	 
	March 1, 2008 through and including
March 31, 2008
	 	$2,000,000	 	$3,000,000
	 
	 	 	 	 
	April 1, 2008 through and including
April 30, 2008
	 	$1,750,000	 	$2,700,000
	 
	 	 	 	 
	May 1, 2008 through and including May
31, 2008
	 	$1,500,000	 	$2,400,000
	 
	 	 	 	 
	June 1, 2008 through and including
June 29, 2008
	 	$1,250,000	 	$2,100,000
	 
	 	 	 	 
	June 30, 2008 and thereafter
	 	$              0
	 	$              0

5

 

PILL

Borrowing Base Certificate

BBC #

Date

	 	 	 	 	 	 	 	 	 	 	 
	I. Accounts Receivable Roll Forward
	 	 	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 
	a. Prior BBC Gross Accounts Receivable
	 	Date:                      	 	 	 	 	 	$	—	 
	 
	 	 	 	 	 	 	 	 	 	 
	Period Date: Add: New Sales
	 	 	 	 	 	 	 	$	—	 
	(from — to)   Less: Collections
	 	 	 	 	 	 	 	$	—	 
	  Less: Credits
	 	 	 	 	 	 	 	$	—	 
	  Less: Discounts/Allowances
	 	 	 	 	 	 	 	$	—	 
	  Add / (Less) AR Adjustments
	 	 	 	 	 	 	 	$	—	 
	 
	 	 	 	 	 	 	 	 	 	 
	b. Accounts Receivable Balance
	 	As of:                    	 	 	 	 	 	$	—	 
	 
	 	 	 	 	 	 	 	 	 	 
	II. Accounts Receivable Aging Spread as of:
	 	 	 	 	 	 	 	 	 	 

	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	Current	 	31 - 60	 	61 - 90	 	Over 90	 	Total
	0.00
	 	 	0.00	 	 	 	0.00	 	 	 	0.00	 	 	 	0.00	 

	 	 	 	 	 	 	 	 	 	 	 
	III. Gross Accounts Receivable
	 	 	 	 	 	 	 	$	—	 
	 
	 	 	 	 	 	 	 	 	 	 
	a. Ineligibles as of:                    
	 	 	 	 	 	 	 	 	 	 
	Past Due > 90 Days
	 	 	 	$	—	 	 	 	 	 
	Credits Past Due > 90 Days
	 	 	 	$	—	 	 	 	 	 
	Cross Aged > 50%
	 	 	 	$	—	 	 	 	 	 
	Foreign Accounts
	 	 	 	$	—	 	 	 	 	 
	Government Accounts
	 	 	 	$	—	 	 	 	 	 
	Intercompany Accounts / Affiliated Accounts
	 	 	 	$	—	 	 	 	 	 
	Contra Accounts
	 	 	 	$	—	 	 	 	 	 
	Concentration Reserve (25%)
	 	 	 	$	—	 	 	 	 	 
	 	 	 	 	 	 	 	 	 	 
	Total Ineligibles
	 	 	 	$	—	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 
	b. Eligible Accounts Receivable
	 	 	 	 	 	 	 	$	—	 
	 
	 	 	 	 	 	 	 	 	 	 
	c. Eligible Accounts Receivable @
	 	90%	 	 	 	 	 	$	—	 
	 
	IV. Gross Inventory
	 	As of:                     	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 
	a. Inventory Components
	 	 	 	 	 	 	 	 	 	 
	Raw Goods Inventory
	 	 	 	 	 	 	 	$	—	 
	Work in Process Inventory
	 	 	 	 	 	 	 	$	—	 
	Finished Goods Inventory
	 	 	 	 	 	 	 	$	—	 
	 
	Total Inventory
	 	 	 	 	 	 	 	$	—	 
	 
	 	 	 	 	 	 	 	 	 	 
	b. Ineligible Inventory
	 	 	 	 	 	 	 	 	 	 
	Raw Materials
	 	 	 	$	—	 	 	 	 	 
	Work in Process
	 	 	 	$	—	 	 	 	 	 
	Slow Moving
	 	 	 	$	—	 	 	 	 	 
	Supplies / Packaging
	 	 	 	$	—	 	 	 	 	 
	Outside location/3rd Party
	 	 	 	$	—	 	 	 	 	 
	In-Transit Inventory
	 	 	 	$	—	 	 	 	 	 
	 	 	 	 	 	 	 	 	 	 
	Total Ineligibles
	 	 	 	$	—	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 
	c. Eligible Inventory
	 	 	 	 	 	 	 	$	—	 
	 
	 	 	 	 	 	 	 	 	 	 
	d. Eligible Inventory @
	 	30%	 	 	 	 	 	$	—	 
	 
	 	 	 	 	 	 	 	 	 	 
	e. Inventory Cap
	 	$600,000.00	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 
	f. Net Inventory Availability
	 	 	 	 	 	 	 	$	—	 
	 
	V. Total Collateral Availability
	 	 	 	 	 	 	 	$	—	 
	 
	VI. Revolving Limit
	 	$3,000,000.00	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 
	a. Current Revolving Loan Balance
	 	 	 	$	—	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 
	b. Available to Borrow
	 	 	 	 	 	 	 	$	—	 
	 
	 	 	 	 	 	 	 	 	 	 
	 
	VIII. Accounts Receivable Cash Reconciliation
	 	 	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 
	a. Collections Posted to Accounts Receivable
	 	 	 	 	 	 	 	 	0.00	 
	 
	 	 	 	 	 	 	 	 	 	 
	b. Cash Deposited in Lock Box
	 	 	 	 	 	 	 	 	0.00	 
	 
	 	 	 	 	 	 	 	 	 	 
	c. Difference
	 	 	 	 	 	 	 	 	0.00	 
	 
	 	 	 	 	 	 	 	 	 	 
	d. Reconciliation of Difference
	 	 	 	 	 	 	 	 	 	 
	Description:
	 	 	 	 	0.00	 	 	 	 	 
	Description:
	 	 	 	 	0.00	 	 	 	 	 
	Description:
	 	 	 	 	0.00	 	 	 	 	 
	Description:
	 	 	 	 	0.00	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 	0.00	 

“The undersigned hereby represents and warrants that the foregoing is a correct statement regarding the
status of its Accounts and Inventory assigned to Laurus Master Fund, Ltd. (“Laurus”) and that the figures set
forth herein are accurate and correct. The undersigned further represents and warrants that (i) no Event of Default
exists on the date hereof, (ii) on the date hereof, all representations, warranties and covenants made by the undersigned and
its Subsidiaries in connection with the Security Agreement and the Ancillary Agreements referred to therein are true, correct
and complete and (iii) on the date hereof, all of the undersigned’s and its Subsidiaries’ covenant requirements have been met.
The undersigned further understands that the Loans to the undersigned will be based upon reliance on the information contained herein.
Each capitalized term used herein shall have the meaning provided such term in the Security Agreement, dated as of                     , 200___by
and among the undersigned, certain Subsidiaries of the undersigned from time to time party thereto and Laurus.”

	 	 	 	 	 	 	 	 	 	 	 
	Attest:

	 	Title:
	 	 	 	Amount to Wire:	 	 	 	 
	 

	 	Date:
	 	12/18/2006
	 	Account Number:
	 	1077003740
	 

	 	 	 	 	 	Account Name:
	 	One IP Voice Inc

	 

	 	 	 	 	 	Bank Name & Address:
	 	People’s Bank Hartford CT

	 

	 	 	 	 	 	ABA:
	 	221172186Ex-10.1

 

Exhibit 10.1

Approved June 6, 2007

NON-EMPLOYEE DIRECTOR COMPENSATION POLICY

	•	 	Annual Retainers: $40,000, plus

	 	•	 	Audit Committee:

	 	•	 	Chair: $20,000

	 	•	 	Member: $12,500

	 	•	 	Other Committee:

	 	•	 	Chair: $12,500

	 	•	 	Member: $7,500

Note: These retainers would be payable on a quarterly basis with the
first payment of the term being made on or about the June 30 following the date
of the annual meeting of stockholders and following the re-election of the
director to the board and the designation of committee responsibilities.
Amounts would be pro-rated for partial year service.

	•	 	Meeting Attendance: There will be no per meeting fees.

	•	 	Restricted Stock Awards:

	 	•	 	Initial Election: Number of shares equal to $120,000 (increasing by 5% per year
beginning in 2008) divided by the average trading price for the 10 trading days
preceding the date of the initial election

	 	•	 	Annual Award: Number of shares equal to $82,500 (increasing by 5%
per year beginning in 2008) divided by the average trading price for the 10
trading days preceding the date of the annual meeting
	 
	 		 	Note:
These awards will be made under the 2006 Equity Incentive Plan
on the date of the annual meeting of stockholders and will vest one
year following the date of grant. If the director resigns or is removed prior to the vesting, or if
director fails to attend 75% or more of the Board and applicable
committee meetings
during that 12-month period, shares would be forfeited, unless
resignation or
failure to attend is caused by director’s disability. For
GTCR-affiliated
directors, cash amount will be paid directly to GTCR in lieu of
issuing shares
(subject to the same rules on service, attendance, and
forfeiture/refunding
described above).

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