10-Q

UNITED STATES SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

FORM 10-Q

(Mark One)

[X] QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended March 31, 2007

[   ] TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from ____________________________ to ______________________________

Commission file number: 000-22052

PROXYMED, INC.

(Exact name of registrant as specified in its charter)

Florida	65-0202059
(State or Other Jurisdiction of	(I.R.S. Employer
Incorporation or Organization)	Identification No.)
1854 Shackleford Court, Suite 200, Norcross, Georgia	30093
(Address of Principal Executive Offices)	(Zip Code)

(770) 806-9918
(Registrant’s Telephone Number Including Area Code)
___________________________________________________________
(Former Name, Former Address and Former Fiscal Year, if Changed Since Last Report)

Indicate by check mark whether the registrant: (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.     [X] Yes     [  ] No

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, or a non-accelerated filer. See definition of “accelerated filer and large accelerated filer” in Rule 12b-2 of the Exchange Act. (Check one):        Large accelerated filer [  ]        Accelerated filer [X]        Non-accelerated filer [  ]

Indicate by check mark whether registrant is a shell company (as defined by Rule 12b-2 of the Securities Exchange Act of 1934).     [  ] Yes     [X] No

APPLICABLE ONLY TO CORPORATE ISSUERS:
Indicate the number of shares outstanding of each of the issuer’s classes of Common Stock, as of the latest practicable date:

Common Stock, $0.001 Par Value
13,210,188 Shares as of May 7, 2007

TABLE OF CONTENTS
	Page
Part I – Financial Information
Item 1 – Financial Statements:
Consolidated Balance Sheets as of March 31, 2007 (unaudited) and December 31, 2006	3
Consolidated Statements of Operations for the Three Months Ended
March 31, 2007 and 2006 (unaudited)	4
Consolidated Statements of Cash Flows for the Three Months Ended
March 31, 2007 and 2006 (unaudited)	5
Notes to Consolidated Financial Statements (unaudited)	6
Item 2 – Management’s Discussion and Analysis of Financial Condition and Results of Operations	13
Item 3 – Quantitative and Qualitative Disclosures About Market Risk	21
Item 4 – Controls and Procedures	21
Part II – Other Information
Item 1 – Legal Proceedings	22
Item 1A – Risk Factors	22
Item 6 – Exhibits	23
Signatures	24
EX-31.1 SECTION 302, CERTIFICATION OF THE CEO
EX-31.2 SECTION 302, CERTIFICATION OF THE CFO
EX-32.1 SECTION 906, CERTIFICATION OF THE CEO
EX-32.2 SECTION 906, CERTIFICATION OF THE CFO
Items 2, 3, 4 and 5 of Part II are omitted because they are not applicable.

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PART I - FINANCIAL INFORMATION
ITEM 1 - CONSOLIDATED FINANCIAL STATEMENTS
PROXYMED, INC. AND SUBSIDIARIES
Consolidated Balance Sheets
(amounts in thousands except for share and per share data)
	(Unaudited)
	March 31,			December 31,
	2007			2006
ASSETS
Current assets:
Cash and cash equivalents	$	442		$	682
Accounts receivable — trade, net of allowance for doubtful accounts of $3,174 and $3,777,
respectively		15,142			15,045
Other receivables		82			91
Inventory, net		924			759
Other current assets		1,559			1,295
Total current assets		18,149			17,872
Property and equipment, net		5,135			5,555
Goodwill		13,972			26,480
Purchased technology, capitalized software and other intangible assets, net		11,841			19,702
Other long-term assets		2,388			2,631
Total assets	$	51,485		$	72,240
LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities:
Accounts payable, accrued expenses and other current liabilities	$	9,920		$	10,842
Current portion of capital leases		897			1,041
Notes payable and current portion of long-term debt		15,859			12,512
Deferred revenue		344			439
Income taxes payable		748			674
Total current liabilities		27,768			25,508
Income taxes payable		—			238
Convertible notes		13,137			13,137
Other long-term debt		3,470			3,992
Long-term portion of capital leases		1,107			1,296
Long-term deferred revenue and other long-term liabilities		510			645
Total liabilities		45,992			44,816
Stockholders’ equity:
Series C 7% Convertible Preferred Stock — $.01 par value. Authorized 300,000 shares;
issued 253,265 shares; outstanding 2,000; liquidation preference $100		—			—
Common Stock — $.001 par value. Authorized 30,000,000 shares; issued and
outstanding 13,210,188, and 13,210,188 shares, respectively		14			14
Additional paid-in capital		243,649			243,387
Accumulated deficit		(238,170	)		(215,977	)
Total stockholders’ equity		5,493			27,424
Total liabilities and stockholders’ equity	$	51,485		$	72,240
The accompanying notes are an integral part of the consolidated financial statements.

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PROXYMED, INC. AND SUBSIDIARIES
Consolidated Statements of Operations
(unaudited)
(amounts in thousands except for share and per share data)
	Three Months Ended March 31,
	2007			2006
Net revenues:
Transaction fees, cost containment services and license fees	$	13,057		$	15,575
Communication devices and other tangible goods		1,939			2,500
		14,996			18,075
Costs and expenses:
Cost of transaction fees, cost containment services and
license fees, excluding depreciation and amortization		3,114			4,334
Cost of laboratory communication devices and other tangible
goods, excluding depreciation and amortization		1,071			1,503
Selling, general and administrative expenses		10,798			11,463
Depreciation and amortization		1,807			1,662
Write-off of impaired assets		19,449			-
		36,239			18,962
Operating loss		(21,243	)		(887	)
Interest expense, net		953			686
Loss before income taxes		(22,196	)		(1,573	)
Provision for income taxes		—			—
Net loss	$	(22,196	)	$	(1,573	)
Basic and diluted weighted average shares outstanding		13,210,188			13,203,702
Basic and diluted loss per share	$	(1.68	)	$	(0.12	)

The accompanying notes are an integral part of the consolidated financial statements.

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PROXYMED, INC. AND SUBSIDIARIES
Consolidated Statements of Cash Flows
(unaudited)
(amounts in thousands)
	Three Months Ended March 31,
	2007			2006
Cash flows from operating activities:
Net loss	$	(22,196	)	$	(1,573	)
Adjustments to reconcile net loss to net cash used in operating activities:
Depreciation and amortization		1,807			1,662
Write-off of impaired assets		19,449			-
Provision for obsolete inventory		9			7
Non-cash interest expense		261			249
Loss on disposal of fixed assets		3			9
Share based compensation		265			257
Changes in assets and liabilities, net of effect
of acquisitions and dispositions:
Accounts receivable and other receivables		(88	)		(246	)
Inventory		(174	)		115
Other assets		(281	)		(421	)
Accounts payable, accrued expenses and other current liabilities		(923	)		(2,664	)
Deferred revenue		(95	)		6
Income taxes payable		(164	)		(150	)
Other, net		(134	)		(97	)
Net cash used in operating activities		(2,261	)		(2,846	)
Cash flows from investing activities:
Acquisition of businesses, net of cash acquired		—			(225	)
Capital expenditures		(279	)		(442	)
Capitalized software		(192	)		(186	)
Proceeds from sale of fixed assets		—			4
Net cash used in investing activities		(471	)		(849	)
Cash flows from financing activities:
Draws on line of credit		14,063			14,539
Repayments of line of credit		(10,733	)		(14,046	)
Debt issuance costs		—			(145	)
Payment of notes payable, long-term debt and capital leases		(838	)		(350	)
Net cash provided by (used in) financing activities		2,492			(2	)
Net decrease in cash and cash equivalents		(240	)		(3,697	)
Cash and cash equivalents at beginning of period		682			5,546
Cash and cash equivalents at end of period	$	442		$	1,849
The accompanying notes are an integral part of the consolidated financial statements.

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ProxyMed, Inc. and Subsidiaries
Notes to Consolidated Financial Statements
(Unaudited)

(1)	Summary of Significant Accounting Policies
	a)	Basis of Presentation — The accompanying unaudited consolidated financial statements of ProxyMed, Inc. d/b/a MedAvant Healthcare Solutions (“MedAvant,” “our,” “we,” “us,” or “the Company”) and the notes thereto have been prepared in accordance with the instructions of Form 10-Q and Rule 10-01 of Regulation S-X of the Securities and Exchange Commission (the “SEC”) and do not include all of the information and disclosures required by accounting principles generally accepted in the United States of America. However, such information reflects all adjustments (consisting of normal recurring adjustments), which are, in the opinion of management, necessary for a fair statement of results for the interim periods.
		The unaudited results of operations for the three months ended March 31, 2007, are not necessarily indicative of the results to be expected for the full year. The unaudited consolidated financial statements included herein should be read in conjunction with the audited consolidated financial statements and the notes thereto included in our Annual Report on Form 10-K for the year ended December 31, 2006, as filed with the SEC on March 15, 2007 (“10-K”).
	b)	Going Concern — Over the last several years we have experienced declining revenues, recurring losses from operations and have limitations on our access to capital. Our working capital deficit was approximately $9.6 million and our accumulated deficit was approximately $238.2 million at March 31, 2007. The Company had availability under its revolving credit facility of approximately $4.5 million at December 31, 2006, approximately $1.3 million at March 31, 2007, and approximately $1.5 million as of  May 7, 2007.
		We closely monitor our liquidity, capital resources and financial position on an ongoing basis, and we are continuing our efforts to reduce costs and increase revenues through new product launches and expanded relationships with certain customers. In addition, we are reviewing several strategic and operational initiatives that we believe would reverse some of these negative trends and also address our current liquidity issues. These initiatives include a review of strategic assets, certain product offerings and additional cost cutting initiatives while continuing efforts to seek additional sources of long-term financing. We are hiring proven veterans of our industry’s sales force because we believe that revenue growth through new sales is an essential part of our future success.
		At the same time, we are finding ways to achieve greater efficiencies and reductions in operating expenses. The PhoenixSM platform, for example, is yielding significant benefits to our internal processes and workflows much like it has for our EDI customers. Accordingly, at or about the time of filing this Form 10-Q we expect to implement reductions to our operating expenses consistent with our streamlined model.
	c)	Revenue Recognition — Revenue is derived from our Transaction Services and Laboratory Communication Solutions segments.
		Revenues in our Transaction Services segment are recorded as follows:
		·	For revenues derived from insurance payers, pharmacies and submitters, such revenues are recognized on a per transaction basis or flat fee basis in the period the services are rendered.
		·	Revenue from our medical cost containment business is recognized when the services are performed and are recorded net of estimated allowances. These revenues are primarily in the form of fees generated from discounts we secure for payers that access our provider network.
		·	Revenues associated with revenue sharing agreements are recorded as gross revenue on a per transaction basis or a percentage of revenue basis and may involve increasing amounts or percentages based on transaction or revenue volumes achieved. This treatment is in accordance

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	with Emerging Issues Task Force Consensus No. 99-19, “Reporting Revenue Gross as a Principal Versus Net as an Agent.”
·	Revenue from certain up-front fees is recognized ratably over the term of the contract. This treatment is in accordance with Staff Accounting Bulletin No. 104, “Revenue Recognition” (“SAB No. 104”).
·	Revenue from support and maintenance contracts is recognized ratably over the contract period.

   Revenues in our Laboratory Communication Solutions segment are recorded as follows:

·    Revenue from support and maintenance contracts is recognized ratably over the contract period.

·    Revenue from the sale of inventory and manufactured goods is recognized when the product is delivered, price is fixed or determinable, and collectibility is probable. This treatment is in accordance with SAB No. 104.

·    Revenue from the rental of laboratory communication devices is recognized ratably over the period of the rental contract.

d)	Allowance for Doubtful Accounts/Revenue Allowances/Bad Debt Estimates — We rely on estimates to determine revenue adjustments and the adequacy of our allowance for doubtful accounts receivable. These estimates are based on our historical experience and the industry in which we operate. If the financial condition of our customers was to deteriorate, resulting in an impairment of their ability to make payments, additional allowances may be required. Additionally, in our Transaction Services segment, we evaluate the collectibility of our accounts receivable based on a combination of factors, including historical collection ratios.
	In circumstances where we are aware of a specific customer’s inability to meet its financial obligations, we record a reserve for doubtful accounts against amounts due to reduce the net recognized receivable to the amount we reasonably believe will be collected. For all other customers, we recognize reserves for bad debts based on past write-off history and the length of time the receivables are past due. To the extent historical credit experience is not indicative of future performance or other assumptions used by management do not prevail, loss experience could differ significantly, resulting in either higher or lower future provision for losses.
e)	Net Loss per Share — Basic net loss per share of our Common Stock is computed by dividing net loss by the weighted average shares of Common Stock outstanding during the period. Diluted net loss per share reflects the potential dilution from the exercise or conversion of securities into our Common Stock; however, the following shares were excluded from the calculation of diluted net loss per share because their effects would have been anti-dilutive:

	Three months ended March 31,
	(unaudited)	(unaudited)
	2007	2006
Common Stock excluded in the computation of net loss per share:
Convertible preferred stock	13,333	13,333
Convertible notes payable	238,989	238,989
Stock options	1,786,426	1,705,643
Warrants	13,333	857,215
	2,052,081	2,815,180

f)

Share-Based Compensation – We account for stock-based awards under SFAS 123(R) using the modified prospective method, which requires measurement of compensation cost for all stock-based awards at fair value on date of grant and recognition of compensation over the service period for awards expected to vest.

The fair value of stock is determined using a lattice valuation model. Such value is recognized as expense over the service period, net of estimated forfeitures. The estimation of stock awards that will ultimately vest requires judgment, and to the extent actual results or updated estimates differ from our current estimates, such amounts will be recorded as a cumulative adjustment in the period estimates are revised. We consider many factors when estimating expected forfeitures, including types of awards, employee class, and historical experience. Actual results, and future changes in estimates, may differ substantially from our

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		current estimates. We recognized approximately $265,000 and $257,000 in share-based compensation expense for the three months ended March 31, 2007 and 2006.
	g)	New Accounting Pronouncements — The Company adopted the provisions of Financial Accounting Standards Board, or FASB, Interpretation No. 48, or FIN 48, “Accounting for Uncertainty in Income Taxes,” effective January 1, 2007. FIN 48 is an interpretation of Statement of Financial Accounting Standards No. 109, “Accounting for Income Taxes,” which seeks to reduce the diversity in practice associated with certain aspects of measurement and recognition in accounting for income taxes. In addition, FIN 48 provides guidance on derecognition, classification, interest and penalties, and accounting in interim periods and requires expanded disclosure with respect to the uncertainty in income taxes. Adoption of FIN 48 had no cumulative effect on the Company’s consolidated financial position at January 1, 2007. At March 31, 2007, the Company had no significant unrecognized tax benefits related to income taxes.
		The Company's policy with respect to penalties and interest in connection with income tax assessments or related to unrecognized tax benefits is to classify penalties as provision for income taxes and interest as interest expense in its consolidated income statement.
		The Company files income tax returns in the U.S. federal and several state jurisdictions. We believe that the Company is no longer subject to U.S. federal and state income tax examinations for years before 2003.
		In September 2006, the FASB issued SFAS No. 157, “Fair Value Measurements,” which is effective for financial statements issued for fiscal years beginning after November 15, 2007. SFAS No. 157 defines fair value as “the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date.” SFAS No. 157 also expands disclosure requirements to include: (a) the fair value measurements of assets and liabilities at the reporting date, (b) segregation of assets and liabilities between fair value measurements based on quoted market prices and those based on other methods and (c) information that enables users to assess the method or methods used to estimate fair value when no quoted price exists. We are currently in the process of reviewing this guidance to determine its impact on our consolidated financial position and results of operations.
		In February 2007, the FASB issued SFAS No. 159, “The Fair Value Option for Financial Assets and Financial Liabilities” (“SFAS No. 159”), which permits entities to elect to measure many financial instruments and certain other items at fair value that are not currently required to be measured at fair value. This election is irrevocable. SFAS No. 159 will be effective in the first quarter of fiscal year 2008. We are currently assessing the potential impact that the adoption of SFAS No. 159 will have on our consolidated financial statements.
(2)	Inventory
	Inventory consists of the following as of the dates indicated, and is valued at the lower of average cost or market:

	(Unaudited)
	March 31,		December 31,
	2007		2006
	(In thousands)
Materials, supplies and component parts	$	485	$	262
Work in process		90		87
Finished goods		349		410
Total	$	924	$	759

(3)	Goodwill & Other Intangible Assets
		As a result of the Company’s continuing revenue and stock price declines during the first quarter of 2007, the Company performed an interim goodwill impairment test as of March 31, 2007. In accordance with the provisions of SFAS No. 142, the Company used a discounted cash flow analysis which indicated that the book value of the Transaction Services segment exceeded its estimated fair value and that goodwill impairment had occurred. Step 2 of this impairment test, as prescribed by SFAS 142, led us to conclude that an impairment of goodwill had occurred. In addition, as a result of the goodwill analysis, the Company assessed whether there had been an impairment of the Company’s long-lived assets in accordance with SFAS No. 144. This impairment analysis indicated that the carrying value of certain finite-lived intangible assets was greater than their expected undiscounted future cash flows. Therefore, the Company concluded

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that these intangible assets were impaired and adjusted the carrying value of these assets to fair value. Accordingly, the Company recorded a non-cash impairment charge of $19.4 million for the three months ended March 31, 2007 in its Transaction Services Segment. This charge included a $12.5 million impairment of goodwill and a $6.9 million impairment of certain other intangibles.

For March 31, 2007, we recorded no impairment charge in our Laboratory Communications Solutions segment.

The changes in the carrying amounts of goodwill, net, for the period ending March 31, 2007 by operating segment are as follows:

				Laboratory
	Transaction			Communications
In thousands	Services			Solutions		Total
Balance as of December 31, 2006	$	24,378		$	2,102	$	26,480
Impairment charge		(12,508	)		-		(12,508	)
Balance as of March 31, 2007 (unaudited)	$	11,870		$	2,102	$	13,972

The following table summarizes the changes in our other intangibles for the three months ended March 31, 2007.

	Other Intangibles										Other Intangibles
	Balance as of										Balance as of
	December 31,				Amortization			Impairment			March 31,
(In thousands)	2006		Additions		Expense			Charge			2007 (unaudited)
Capitalized software	$	2,257	$	109	$	(136	)	$	-		$	2,230
Purchased technology		2,177		83		(349	)		-			1,911
Customer relationships		6,768		-		(286	)		(6,482	)		-
Provider network		8,500		-		(341	)		(459	)		7,700
	$	19,702	$	192	$	(1,112	)	$	(6,941	)	$	11,841

The estimates of useful lives of other intangible assets are based on historical experience, the industry in which we operate, or on contractual terms. Other intangible assets are being amortized on a straight-line basis. Amortization expense was $1.1 million and $1.0 million for the three months ended March 31, 2007 and 2006, respectively.

As of March 31, 2007, estimated future amortization of other intangible assets is as follows:

In thousands (unaudited)
2007 (remainder of the year)	$	2,806
2008		3,007
2009		1,974
2010		1,365
2011		1,365
2012		900
	$	11,417

(4)	Debt Obligations
	(a)	Revolving Credit Facility and Term Debt - On December 7, 2005, we and certain of our wholly-owned subsidiaries, entered into a security and purchase agreement (the “Loan Agreement”) with Laurus Master Fund, Ltd. (“Laurus”) to provide up to $20.0 million in financing to us.

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		Under the terms of the Loan Agreement, Laurus extended financing to us in the form of a $5.0 million secured term loan (the “Term Loan”) and a $15.0 million secured revolving credit facility (the “Revolving Credit Facility”). The Term Loan has a stated term of five (5) years and will accrue interest at Prime plus 2%, subject to a minimum interest rate of 8%. The Term Loan is payable in equal monthly principal installments of approximately $89,300 plus interest until the maturity date on December 6, 2010. The Revolving Credit Facility has a stated term of three (3) years and will accrue interest at the 90 day LIBOR rate plus 5%, subject to a minimum interest rate of 7%, and a maturity date of December 6, 2008 with two (2) one-year extension-options at the discretion of Laurus. Additionally, in connection with the Loan Agreement, we issued 500,000 shares of our Common Stock, par value $0.001 per share (the “Closing Shares”) t o Laurus that were valued at approximately $2.4 million at the time of issuance. As of March 31, 2007, we had approximately $1.3 million of borrowing capacity on our revolving credit facility.
		We granted Laurus a first priority security interest in substantially all of our present and future tangible and intangible assets (including all intellectual property) to secure our obligations under the Loan Agreement. The Loan Agreement contains various customary representations and warranties of us as well as customary affirmative and negative covenants, including, without limitation, liens of property, maintaining specific forms of accounting and record maintenance, and limiting the incurrence of additional debt. The Loan Agreement does not contain restrictive covenants regarding minimum earning requirements, historical earning levels, fixed charge coverage, or working capital requirements. We can borrow up to three times the trailing 12-months of historical earnings, as defined in the agreement. Per the Loan Agreement, we are required to maintain a lock box arrangement wherein monies received by us are automatically swept to repay the loan balance on the revolving credit facility.
		The Loan Agreement also contains certain customary events of default, including, among others, non- payment of principal and interest, violation of covenants, and in the event we are involved in certain insolvency proceedings. Upon the occurrence of an event of default, Laurus is entitled to, among other things, accelerate all obligations. In the event Laurus accelerates the loans, the amount due will include all accrued interest plus 120% of the then outstanding principal amount of the loans being accelerated as well as all unpaid fees and expenses of Laurus. In addition, if the Revolving Credit Facility is terminated for any reason, whether because of a prepayment or acceleration, there shall be paid an additional premium of up to 5% of the total amount of the Revolving Credit Facility. In the event we elect to prepay the Term Loan, the amount due shall be the accrued interest plus 115% of the then outstanding principal amount of the Term Loan. Due to certain subjective acceleration clauses contained in the agreement and a lockbox arrangement, the revolving credit facility is classified as current in the accompanying unaudited consolidated balance sheet.
	(b)	Convertible Notes — On December 31, 2002, we issued $13.4 million of 4% uncollateralized convertible promissory notes to the former shareholders of MedUnite as part of the consideration paid in the acquisition of MedUnite. These notes mature on December 31, 2008. Interest is payable quarterly in cash in arrears. The notes were convertible into 716,968 shares, based on a conversion price of $18.323 per share.
		Convertibility was dependent upon certain revenue targets being met. During the measurement period, only the first revenue target was achieved, therefore, one-third of the outstanding shares will remain convertible until December 31, 2008. The total amount of convertible notes as of March 31, 2007, and December 31, 2006, is $13.1 million. The notes are now convertible into 238,989 shares of our Common Stock.
	(c)	Notes Payable — On October 10, 2006, the Company signed two $1.0 million notes payable in conjunction with its acquisition of MRL. The notes payable accrue interest at 7% and are payable in 24 equal monthly installments of principal and interest of approximately $0.1 million, beginning in November 2006.
(5)	Equity Transactions
		During the three months ended March 31, 2007, we granted 76,929 stock options, at exercise prices between $2.92 and $5.65 per share to officers, directors, and employees. Such options are for ten-year terms and generally vest over four years following the date of the grant. During the three months ended March 31, 2007, no employee stock options were exercised, and 60,420 stock options were cancelled.

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(6)	Segment Information
		As defined in SFAS 131, “Disclosures About Segments of an Enterprise and Related Information”, we have two operating segments: Transaction Services and Laboratory Communications. Basic differences in products, services and customer bases underlie our decision to report these two separate segments. Transaction Services focuses on electronic exchanges of information between healthcare providers and payers, whether through our EDI platform or PPO network. Technology, such as our Phoenix platform, plays an essential role in operations and serving our Transaction Services customers. Laboratory Communication Solutions produces equipment that facilitates results reporting between laboratories and healthcare providers. Therefore, the operating environment is different as is the management perspective. Besides having different customers than Transaction Services, Laboratory Communications’ revenue structure is different than Transaction Services. In additio n to selling or leasing the communication equipment, Laboratory Communications provides support services under maintenance agreements post sale. Transaction Services generally recognizes revenue when transactions are processed for a customer.
		Our segment reporting includes revenue and expense by each operating unit, including depreciation and amortization. Because our financing, particularly the debt, is negotiated and secured on a consolidated basis, our segment reporting does not allocate interest expense (or interest income) by reportable segment.

	Three Months Ended March 31,
	(Unaudited)			(Unaudited)
	2007			2006
	(In thousands)
Net revenues by operating segment:
Transaction Services	$	12,410		$	15,132
Laboratory Communication Solutions		2,586			2,943
	$	14,996		$	18,075
Operating income (loss) by operating segment:
Transaction Services	$	(21,849	)	$	(1,473	)
Laboratory Communication Solutions		606			586
	$	(21,243	)	$	(887	)
	March 31, 2007			December 31, 2006
Total assets by operating segment:
Transaction Services	$	35,955		$	57,145
Laboratory Communication Solutions		15,530			15,095
	$	51,485		$	72,240

(7)	Income Taxes
		As of March 31, 2007, we had a net deferred tax asset of approximately $113.5 million, which was fully offset by a valuation allowance due to cumulative losses in recent years. Realization of the net deferred tax asset is dependent upon us generating sufficient taxable income prior to the expiration of the federal net operating loss carryforwards. We will adjust this valuation reserve if, during future periods, management believes we will generate sufficient taxable income to realize the net deferred tax asset.

(8)	Commitments and Contingencies
	(a)	Litigation — We were named as a defendant in an action filed in July 2006, in the United States District Court of New Jersey by MedAvante, Inc., (“MedAvante”). MedAvante claimed that our use of the names “MedAvant” and “MedAvant Healthcare Solutions” infringed trademark rights allegedly held by

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	MedAvante. MedAvante sought unspecified compensatory damages and injunctive relief. On February 12, 2007, the District Court issued a settlement order. The specific terms of the proposed Settlement and Release Agreement are currently being negotiated, but the total value of the settlement is expected to be approximately $1.3 million, of which $1.0 million will be covered by insurance proceeds. We have accrued a preliminary estimate of $0.3 million (net of expected insurance proceeds) based upon these negotiations.
	From time to time, we are a party to other legal proceedings in the course of our business. We, however, do not expect such other legal proceedings to have a material adverse effect on our business or financial condition.
(b)	Employment Agreements — We entered into employment agreements with certain executives and other members of management that provide for cash severance payments if these employees are terminated without cause. Our aggregate commitment under these agreements is $1.0 million at March 31, 2007.

(9)	Supplemental Disclosure of Cash Flow Information
		Cash paid for interest was $0.7 million for the quarter ended March 31, 2007, and $0.4 million for the quarter ended March 31, 2006. During the three months ended March 31, 2007, and March 31, 2006, the Company made income tax payments to the state of New York in the amounts of $0.2 million and $0.2 million, respectively.
(10)	Subsequent Event
		On April 30, 2007, we executed an agreement for the sale of our pharmacy transaction processing business for $0.5 million, consisting of $0.4 million in cash received at closing and $0.1 million held in escrow to be received on or about October 29, 2007. In connection with this transaction, we were released from a contingent obligation to pay up to $10 million to the pharmacy transaction business’ former owner. See Note 15 in the Notes to Consolidated Financial Statements of our Form 10-K for the year ended December 31, 2006.

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ITEM 2 - MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

Overview

        Management’s discussion and analysis of financial condition and results of operations (“MD&A”) is provided as a supplement to ProxyMed, Inc.’s (“ProxyMed,” “MedAvant,” “our,” “us,” “we,” or “the Company”) unaudited consolidated financial statements in this Form 10-Q and notes thereto and to the audited consolidated financial statements and the notes thereto including our Annual Report on Form 10-K for the year ended December 31, 2006, as filed with the Securities and Exchange Commission (“SEC”) on March 15, 2007. Unless the context otherwise requires, all references to “we,” “our,” “us,” “Company,” “ProxyMed” or “MedAvant” re fer to ProxyMed, Inc., d/b/a MedAvant Healthcare Solutions, and its subsidiaries.

Introduction

        MedAvant Healthcare Solutions (“MedAvant”) is an information technology company that facilitates the exchange of medical claim and clinical information among doctors, hospitals, medical laboratories, pharmacies and insurance payers. MedAvant also enables the electronic transmission of laboratory results and prescription orders.

        MedAvant is a trade name of ProxyMed, Inc. which was incorporated in 1989 in Florida. In December 2005, ProxyMed began doing business under the new operating name, MedAvant Healthcare Solutions, to unite all business units and employees under one brand identity. The new name was one of several results of a strategic analysis completed in the third quarter of 2005 following the acquisition of seven companies between 1997 and 2004.

        Whether we are working with our 550,000 healthcare provider-customers, 42,000 pharmacies, 200 labs or 1,500 insurance payers, our goal is the same: provide the business intelligence necessary to expedite clinical and healthcare transactions. We make the transactions secure, faster, more accurate and more economical by using our processing platform known as Phoenix. With this real-time processing system, we provide visibility into an insurance claim’s entire lifecycle, from the time the provider files it to the time the insurance payer reimburses the provider. That information provides data our customers use to improve their business efficiencies. The Phoenix platform is currently used at less than 40% of capacity; therefore, we can easily scale with future growth.

        Management believes MedAvant is the nation’s fourth largest claims processor and is among the top five independent Preferred Provider Organizations (“PPO”). Management believes we are the largest company that facilitates delivery of laboratory results, and we have several larger competitors in the electronic prescription
delivery industry.

Operating Segments

        We operate two separately managed reportable segments: Transaction Services and Laboratory Communications. A description of these segments, their primary services and our source of revenue, in each, is as follows:

Transaction Services

·    Processing claims. The primary tool our customers use to process claims is a real-time web portal called myMedAvant, powered by our Phoenix platform. It offers standard and premium services with features such as verifying a patient’s insurance, enrolling with payers, tracking a claim’s progress with the payer and retrieving reports from payers. On average, we processed approximately 750,000 revenue-related transactions a day in 2006. Providers pay for claims processing based on either a flat monthly fee or a per- transaction fee.

·    Operating a PPO. Our PPO is called the National Preferred Provider Network (“NPPN^TM ” or “NPPN”) and is accessed by more than 7,000,000 patients, 550,000 physicians, 4,000 acute care facilities and 90,000 ancillary care providers. We generate revenue primarily by charging participating payers a percentage of the savings they receive through NPPN. Because we operate a PPO, we can offer payers discounts on claims when a patient uses an out-of-network provider and we can negotiate non-discounted claims for

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Laboratory Communications

·    Printing Technology. Our intelligent printing technology is integrated into printers for labs to purchase and install in physician offices. This allows for the secure transmittal of laboratory reports. Laboratories also purchase support, maintenance and monitoring programs to manage printers that have our integrated technology.

·    Pilot. This patent-pending, web-enabled device sits in a provider’s office and is used to transfer lab reports in virtually any format to a printer, a personal computer or a hand-held device. It integrates with most Practice Management Systems and usually saves the provider the cost of a dedicated phone line. Labs either purchase Pilot devices with an annual support program or they subscribe to Pilot with a program that includes support services.

·    Fleet Management System (“FMS”). Labs use this online tool to monitor printers in provider offices and receive alerts for routine problems such as a printer being out of paper or having a paper jam. FMS can also be used to monitor printer inventory and schedule regular maintenance. Labs pay a monthly fee per printer to use FMS.

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Results of Operations

Three Months Ended March 31, 2007 Compared to Three Months Ended March 31, 2006
(some percents may not foot due to rounding)
	(Unaudited)
	Three Months Ended March 31,
				% of Net					% of Net
(In thousands)	2007			Revenues		2006			Revenues		Change $			Change %
Net revenues:
Transaction Services	$	12,410		82.8	%	$	15,132		83.7	%	$	(2,722	)	-18.0	%
Laboratory Communication Solutions		2,586		17.2	%		2,943		16.3	%		(357	)	-12.1	%
		14,996		100.0	%		18,075		100	%		(3,079	)	-17.0	%
Cost of sales:
Transaction Services		2,948		19.7	%		4,272		23.6	%		(1,324	)	-31.0	%
Laboratory Communication Solutions		1,237		8.2	%		1,565		8.7	%		(328	)	-21.0	%
		4,185		27.9	%		5,837		32.3	%		(1,652	)	-28.3	%
Selling, general and administrative expenses:
Transaction Services		10,117		67.5	%		10,749		59.5	%		(632	)	-5.9	%
Laboratory Communication Solutions		681		4.5	%		714		4.0	%		(33	)	-4.6	%
		10,798		72.0	%		11,463		63.4	%		(665	)	-5.8	%
Write-off of impaired assets:
Transaction Services		19,449		129.7	%		-		0.0	%		19,449		100.0	%
Laboratory Communication Solutions		-		0.0	%		-		0.0	%		-		0.0	%
		19,449		129.7	%		-		0.0	%		19,449		100.0	%
Depreciation and amortization:
Transaction Services		1,746		11.6	%		1,584		8.8	%		162		10.2	%
Laboratory Communication Solutions		61		0.4	%		78		0.4	%		(17	)	-21.8	%
		1,807		12.0	%		1,662		9.2	%		145		8.7	%
Operating income (loss):
Transaction Services		(21,849	)	-145.7	%		(1,473	)	-8.1	%		(20,376	)	-1383.3	%
Laboratory Communication Solutions		606		4.0	%		586		3.2	%		20		3.4	%
		(21,243	)	-141.7	%		(887	)	-4.9	%		(20,356	)	-2294.9	%
Interest expense, net		953		6.4	%		686		3.8	%		267		38.9	%
Net loss	$	(22,196	)			$	(1,573	)			$	(20,623	)

        Net Revenues. Consolidated net revenues decreased $3.1 million, or 17%, to $15.0 million for the three months ended March 31, 2007 compared to $18.1 million for the three months ended March 31, 2006.

        Net revenues in our Transaction Services segment decreased by $2.7 million, or 18%, for the three months ended March 31, 2007 compared to the same period in 2006. This decrease resulted primarily from lost customer volumes due to pricing pressures and increased direct customer connectivity to payers ($2.1 million). Additionally, we experienced a drop in transaction services revenue due to the elimination of certain unprofitable product lines beginning in late 2005 and continuing into early 2006 ($0.8 million). These decreases in revenue were partially offset by revenue generated by our recent acquisition of MRL ($0.2 million). We do not expect revenues to reverse the declining trends which we have experienced during the year 2006, and the quarter ended March 3 1, 2007; yet we do expect that our revenues will not continue this 18% rate of decline, as mentioned above.

        Laboratory Communication Solutions segment net revenues decreased by $0.4 million, or 12%, for the three months ended March 31, 2007, compared to the same period last year. This decrease is due primarily to one of our largest customers postponing orders during the month of March due to their warehousing issues, and also the continued downturn in business from another of our largest customers. We do not expect revenues to reverse the declining trends which we have experienced during the year 2006, and the quarter ended March 31, 2007; yet we do expect that our revenues will not continue this 12% rate of decline, as mentioned above.

        Cost of Sales. Consolidated cost of sales decreased $1.7 million, or 28%, to $4.2 million, for the three months ended March 31, 2007 compared to $5.8 million for the same period last year.

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        The following table illustrates our cost of sales as a percentage of segment net revenues:

	(Unaudited)
	Three Months Ended March 31,
			% of Segment				% of Segment
(In thousands)	2007		Net Revenue		2006		Net Revenue
Cost of sales:
Transaction Services	$	2,948	23.8	%	$	4,272	28.2	%
Laboratory Communication Solutions		1,237	47.8	%		1,565	53.2	%
	$	4,185	27.9	%	$	5,837	32.3	%
Gross margin:
Transaction Services	$	9,462	76.2	%	$	10,860	71.8	%
Laboratory Communication Solutions		1,349	52.2	%		1,378	46.8	%
	$	10,811	72.1	%	$	12,238	67.7	%

        Cost of sales in our Transaction Services segment consists of EDI transaction fees, provider network access fees, services and license fees, third-party electronic transaction processing costs, certain telecommunication and co-location center costs, and revenue sharing arrangements with our business partners. Cost of sales decreased $1.3 million, or 31%, to $2.9 million, for the three months ended March 31, 2007, compared to $4.3 million for the same period last year. Cost of sales as a percentage of segment net revenues improved to 24% during the period from 28% last year. This improvement was primarily due to the corresponding decrease in net revenues during the period (18%) coupled with the impact of our re-contracting with certain of our vend ors during 2006. Gross margins on Transaction Services increased to 76% during the three months ended March 31, 2007, compared to 72% in the same period last year as management continues to focus on more profitable product lines.

        Cost of sales in our Laboratory Communication Solutions segment includes hardware, third party software, consumable materials, direct manufacturing labor and indirect manufacturing overhead. Cost of sales decreased $0.3 million to $1.2 million for the three months ended March 31, 2007, compared to the same period in 2006. Cost of sales as a percentage of segment revenue decreased to 48% during the period, from 53% last year. This improvement was a result of an increased proportion of Pilot in our sales mix, which has higher margins, which in this segment increased gross margins to 52% during the period, compared to 47% last year.

        Selling, General and Administrative Expenses (“SG&A”). SG&A decreased for the three months ended March 31, 2007, by $0.7 million, or 6%, to $10.8 million from $11.5 million for the three months ended March 31, 2006. SG&A expenses as a percentage of total net revenues increased to 72% for the three months ended March 31, 2007, from 63% in the same period last year. The number of our employees decreased to 333 at March 31, 2007, from 384 at March 31, 2006.

        Transaction Services segment SG&A expenses decreased $0.6 million, or 6%, to $10.1 million for the three months ending March 31, 2007, compared to $10.7 million for the same period last year. This decrease was primarily due to lower payroll expenses ($1.0 million), resulting from our reduction in the number of employees, along with improved operational efficiencies and lower commissions ($0.1 million). These were partially offset by increases in outside labor fees of $0.3 million as we migrate our PPO operating business to ppoONE.

        Laboratory Communication Solutions segment SG&A expenses remained flat at $0.7 million for the three months ended March 31, 2007, as compared to the same period of 2006.

        Impairment Charges. As a result of the Company’s continuing revenue and stock price declines during the first quarter of 2007, the Company performed a goodwill impairment test as of March 31, 2007. In accordance with the provisions of SFAS No. 142, the Company used a discounted cash flow analysis which indicated that the book value of the Transaction Services segment exceeded its estimated fair value and that goodwill impairment had occurred. In addition, as a result of the goodwill analysis, the Company assessed whether there had been an impairment of the Company’s long-lived assets in accordance with SFAS No. 144. The Company concluded that the book value of certain intangible assets was higher than their expec ted future cash flows and that impairment had occurred. In addition, the Company also reduced the remaining useful lives of its other intangible assets based on the foregoing analysis. Accordingly, the Company recorded a non-cash impairment charge of $19.4 million for the three months ended March 31, 2007 in its Transaction Services Segment. This charge included a $12.5 million impairment of goodwill and a $6.9 million impairment of certain other intangibles.

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        For March 31, 2007, we recorded no impairment charge in our Laboratory Communications Solutions segment.

        Depreciation and Amortization. Depreciation and amortization increased by $0.1 million to $1.8 million for the three months ended March 31, 2007, from $1.7 million for the same period last year. This increase is primarily the result of our recent acquisition of MRL and our recent build out of our mirrored back up site in Texas.

        Operating Loss. As a result of the foregoing, the combined operating loss for the three months ended March 31, 2007, was $21.2 million compared to an operating loss of $0.9 million for the same period last year.

        Interest Expense. Net interest expense for the three months ended March 31, 2007, was $1.0 million compared to $0.7 for the same period last year. This increase in expense was primarily due to higher effective interest charges on our Laurus debt facility and increased borrowings. We anticipate that interest expense will increase as our borrowings on our revolving credit facility increase.

        Net Loss. As a result of the foregoing, net loss for the three months ended March 31, 2007 and 2006, was $22.2 million and $1.6 million, respectively.

Liquidity and Capital Resources

        Over the last several years we have experienced declining revenues, recurring losses from operations and have limitations on our access to capital. Our working capital deficit was approximately $9.6 million and our accumulated deficit was approximately $238.2 million as of March 31, 2007. We had availability under our revolving credit facility of approximately $4.5 million at December 31, 2006, approximately $1.3 million at March 31, 2007, and approximately $1.5 million as of May 7, 2007.

        As a result of these items, our independent registered public accounting firm has issued a going concern opinion with respect to our consolidated financial statements for the year ended December 31, 2006.

        We closely monitor our liquidity, capital resources and financial position on an ongoing basis, and we are continuing our efforts to reduce costs and increase revenues through new product launches and expanded relationships with certain customers. In addition, we are reviewing several strategic and operational initiatives that we believe would reverse some of these negative trends and also address current liquidity issues. These initiatives include a review of our strategic assets (including the sale of our pharmacy transaction business line on April 30, 2007), certain product offerings and additional cost cutting initiatives while continuing efforts to seek additional sources of long-term financing. We are hiring proven veterans of our industry’s sales f orce because we believe that revenue growth through new sales is an essential part of our future success.

        At the same time we are finding ways to achieve greater efficiencies and reductions in operating expenses. The Phoenix platform, for example, is yielding significant benefits to our internal processes and workflows much like it has for our EDI customers. Accordingly, at or about the time of filing this Form 10-Q we expect to implement reductions to our operating expenses consistent with our streamlined model.

        We believe that we will have sufficient cash and cash equivalents on hand or available to us under our credit facility to fund our operations and capital requirements through 2007. Management has discretion over its capital expenditures, and will continue to evaluate the Company’s cost structure and asset base, in order to remain solvent. Management will also focus upon revenue growth, and balancing the relationship between maximizing cash realizations of receivables, and also to manage committed expenditures. If we require additional funding in the future to satisfy any of our outstanding future obligations or to further our strategic plans, there can be no assurance that any additional funding will be available to us, or if available, that it will be av ailable on acceptable terms. If we are successful in obtaining additional financing, the terms of the financing may have the effect of significantly diluting or adversely affecting the holdings or the rights of the holders of our Common Stock. We believe that if we are not successful in obtaining additional financing for further product development or strategic acquisitions, such inability may adversely impact our ability to successfully execute our business plan and may put us at a significant competitive disadvantage.

        During the three months ended March 31, 2007, net cash used by operating activities totaled $2.3 million, related to our continued effort to pay down outstanding payables and accrued expenses during the first quarter of

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2007; and otherwise for our net loss from operations. Cash used by investing activities totaled $0.5 million for the funding of capital expenditures related to our technical infrastructure and administrative systems, and capitalized development of internal systems. We anticipate that we will spend approximately $750,000 on capital expenditures, including capitalized development costs, for the remainder of 2007. These capital expenditures may be deferred to future periods by management at its discretion. Cash provided by financing activities totaled $2.5 million, consisting of drawings on our Laurus credit facility for the repayments of notes payable, payments of other long-term debt, payments related to capital leases, and funding our net cash used by operating activities.

        On December 7, 2005, we entered into a loan transaction with Laurus pursuant to which Laurus extended $20 million in financing to us in the form of a $5.0 million secured term loan and a $15.0 million secured revolving credit facility. The term loan has a stated term of five (5) years and will accrue interest at Prime plus 2%, subject to a minimum interest rate of 8%. The term loan is payable in equal monthly principal installments of approximately $89,300 plus interest until the maturity date on December 6, 2010. The revolving credit facility has a stated term of three (3) years, with two one-year extension options, and will accrue interest at the 90 day LIBOR rate plus 5%, subject to a minimum interest rate of 7%, and a maturity date of December 6, 2008. In connection with the Loan Agreement, we issued 500,000 shares of our Common Stock to Laurus. We also granted Laurus a first priority security interest in substantially all of our present and future tangible and intangible assets (including all intellectual property) to secure our obligations under the Loan Agreement. As of May 7, 2007, we had approximately $1.5 million available on our revolving credit facility and cash available. Per the Loan Agreement, we are required to maintain a lock box arrangement wherein monies received by us are automatically swept to repay the loan balance on the revolving credit facility.

Critical Accounting Policies and Estimates

        Our discussion and analysis of our financial condition and results of operations are based on our consolidated financial statements, which have been prepared in accordance with accounting principles generally accepted in the United States of America. The preparation of our consolidated financial statements requires us to make estimates and judgments that affect the reported amounts of assets, liabilities, revenues and expenses, and related disclosure of contingent assets and liabilities. We base our estimates on historical experience and on various other assumptions that are believed to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities that are not r eadily apparent from other sources. Actual results may differ from these estimates under different assumptions or conditions, but we believe that any variation in results would not have a material effect on our financial condition. We evaluate our estimates on an ongoing basis.

        We believe the following critical accounting policies affect our more significant judgments and estimates used in the preparation of our condensed consolidated financial statements. For a detailed discussion on the application of these and other accounting policies, see Note 1 in the Notes to Consolidated Financial Statements of our Form 10-K for the year ended December 31, 2006.

        Revenue Recognition - Revenue is derived from our Transaction Services and Laboratory Communication Solutions segments.

        Revenues in our Transaction Services segment are recorded as follows:

·      For revenues derived from insurance payers, pharmacies, and submitters, such revenues are recognized on a per transaction basis or flat fee basis in the period the services are rendered.

·      Revenue from our medical cost containment business is recognized when the services are performed and are recorded net of estimated allowances. These revenues are primarily in the form of fees generated from discounts we secure for payers that access our provider network.

·      Revenues associated with revenue sharing agreements are recorded on a per transaction basis or a percentage of revenue basis and may involve increasing amounts or percentages based on transaction or revenue volumes achieved. This treatment is in accordance with Emerging Issues Task Force No. 99-19, “Reporting Revenue Gross as a Principal Versus Net as an Agent.”

·      Revenue from certain up-front fees is recognized ratably over the contract’s life. This treatment is in accordance with Staff Accounting Bulletin No. 104, “Revenue Recognition” (“SAB No. 104”).

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·      Revenue from support and maintenance contracts is recognized ratably over the contract period.

        Revenues in our Laboratory Communication Solutions segment are recorded as follows:

·      Revenue from support and maintenance contracts is recognized ratably over the contract period.

·      Revenue from the sale of inventory and manufactured goods is recognized when the product is delivered, price is fixed or determinable, and collectibility is probable. This treatment is in accordance with SAB No. 104.

·      Revenue from the rental of laboratory communication devices is recognized ratably over the period of the rental contract.

        Capitalized Software Development and Research and Development – Costs incurred internally and fees paid to outside contractors and consultants during the application development stage of our internally used software products are capitalized. Costs of upgrades and major enhancements that result in additional functionality are also capitalized. Costs incurred for maintenance and minor upgrades are expensed as incurred. All other costs are expensed as incurred as research and development expenses (included in “Selling, general and administrative expenses”). Application development stage costs generally include software configuration, coding, installation to hardware and testing. Once the project i s completed, capitalized costs are amortized over their remaining estimated economic life. Our judgment is used in determining whether costs meet the criteria for immediate expense or capitalization. We periodically review projected cash flows and other criteria in assessing the impairment of any internal-use capitalized software and take impairment charges as needed.

        Allowance for Revenue Adjustments/Doubtful Accounts/Bad Debt Estimates – We rely on estimates to determine the revenue adjustments, bad debt expense and the adequacy of the allowance for doubtful accounts receivable. These estimates are based on our historical experience, including historical collection ratios, and the industry in which we operate. If the financial condition of a customer was to deteriorate, resulting in an impairment of its ability to make payments, additional allowances may be required.

New Accounting Pronouncements

        The Company adopted the provisions of Financial Accounting Standards Board, or FASB, Interpretation No. 48, or FIN 48, “Accounting for Uncertainty in Income Taxes,” effective January 1, 2007. FIN 48 is an interpretation of Statement of Financial Accounting Standards No. 109, “Accounting for Income Taxes,” which seeks to reduce the diversity in practice associated with certain aspects of measurement and recognition in accounting for income taxes. In addition, FIN 48 provides guidance on derecognition, classification, interest and penalties, and accounting in interim periods and requires expanded disclosure with respect to the uncertainty in income taxes. Adoption of FIN 48 had no cumulative effect on the Company’s consolidated financial position at January 1, 2007. At March 31, 2007, the Company had no significant unrecognized tax benefits related to income taxes.

        The Company's policy with respect to penalties and interest in connection with income tax assessments or related to unrecognized tax benefits is to classify penalties as provision for income taxes and interest as interest expense in its consolidated income statement.

        The Company files income tax returns in the U.S. federal and several state jurisdictions. We believe that the Company is no longer subject to U.S. federal and state income tax examinations for years before 2003.

        In September 2006, the FASB issued SFAS No. 157, “Fair Value Measurements,” which is effective for financial statements issued for fiscal years beginning after November 15, 2007. SFAS No. 157 defines fair value as “the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date.” SFAS No. 157 also expands disclosure requirements to include: (a) the fair value measurements of assets and liabilities at the reporting date, (b) segregation of assets and liabilities between fair value measurements based on quoted market prices and those based on other methods and (c) information that enables users to assess the method or methods used to estimate fair value when no quoted price exists. We are currently in the process of reviewing this guidance to determine its impact on our consolidated financial position and results of operations. 

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        In February 2007, the FASB issued SFAS No. 159, “The Fair Value Option for Financial Assets and Financial Liabilities” (“SFAS No. 159”), which permits entities to elect to measure many financial instruments and certain other items at fair value that are not currently required to be measured at fair value. This election is irrevocable. SFAS No. 159 will be effective in the first quarter of fiscal year 2008. We are currently assessing the potential impact that the adoption of SFAS No. 159 will have on our financial statements.

Cautionary Statement Pursuant to Safe Harbor Provisions of the Private Securities Litigation Reform Act of 1995

        Statements contained in “Management’s Discussion and Analysis of Financial Condition and Results of Operations” and elsewhere in this report contain information that includes or is based upon forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Forward-looking statements present our expectations or forecasts of future events. These statements can be identified by the fact that they do not relate strictly to historical or current facts. They frequently are accompanied by words such as “anticipate,” “estimate,” “expect,” “project,” “intend,” “plan,” “believe,” and other words and terms of similar meaning. In particular, these inc lude statements relating to: our ability to identify suitable acquisition candidates; our successful integration of any future acquisitions; our ability to successfully sell certain business units; our ability to successfully develop, market, sell, cross-sell, install and upgrade our clinical and financial transaction services and applications to new and current physicians, payers, medical laboratories and pharmacies; our ability to compete effectively on price and support services; our ability to increase revenues and revenue opportunities; and our ability to meet expectations regarding future capital needs and the availability of credit and other financing sources.

        All statements other than statements of historical fact are statements that could be deemed forward-looking statements, including any projections of earnings, revenues, synergies, accretion, margins or other financial items; any statements of the plans, strategies and objectives of management for future operations, including the execution of integration and restructuring plans and the anticipated timing of filings, approvals and closings relating to the merger or other planned acquisitions or dispositions; any statements concerning proposed new products, services, developments or industry rankings; any statements regarding future economic conditions or performance; any statements of belief; and any statements of assumptions underlying any of the foregoing.

        Actual results may differ significantly from projected results due to a number of factors, including, but not limited to, the soundness of our business strategies relative to perceived market opportunities; our assessment of the healthcare industry’s need, desire and ability to become technology efficient; market acceptance of our products and services; and our ability and that of our business associates to comply with various government rules regarding healthcare information and patient privacy.

        Forward-looking statements are not guarantees of performance. They involve risks, uncertainties and assumptions. Our future results and shareholder values may differ materially from those expressed in the forward-looking statements. Many of the factors that will determine these results and values are beyond our ability to control or predict. We refer you to the cautionary statements and risk factors set forth in the documents we file from time to time with the SEC, particularly our Annual Report on Form 10-K for the year ended December 31, 2006, as filed with the SEC on March 15, 2007. Shareholders are cautioned not to put undue reliance on any forward-looking statements. For those statements, we claim the protection of the safe harbor for forward-looking stat ements contained in the Private Securities Litigation Reform Act of 1995. We expressly disclaim any intent or obligation to update any forward-looking statements.

Available Information

        MedAvant’s Internet address is www.medavanthealth.com. MedAvant makes available free of charge on or through our Internet website our Annual Report on Form 10-K, Quarterly Reports on Form 10-Q, Current Reports on Form 8-K, and amendments to those reports filed or furnished pursuant to Section 13(a) or 15(d) of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), as soon as reasonably practicable after such material is electronically filed with, or furnished to, the SEC. Our stock is traded on the Nasdaq Global Market under the stock symbol “PILL.”

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ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

        We own no derivative financial instruments or derivative commodity instruments. We have no international sales and, therefore, we do not believe that we are exposed to material risks related to foreign currency exchange rates, or tax changes.

ITEM 4. CONTROLS AND PROCEDURES

        As of the end of the period covered by this report, we evaluated the effectiveness of the design and operation of our disclosure controls and procedures (as defined in Exchange Act Rule 13a-15(e)), under the supervision and with the participation of our management, including our Chief Executive Officer and Chief Financial Officer. Based upon such evaluation, management has concluded that our disclosure controls and procedures are effective to ensure that the information we are required to disclose in reports that we file or submit under the Exchange Act is communicated to management, including the Chief Executive Officer and Chief Financial Officer, as appropriate, to allow timely decisions regarding required disclosure, and is recorded, processe d, summarized and reported within the time periods specified in the Commission rules and forms.

        There have not been any changes in our internal control over financial reporting during the quarter ended March 31, 2007, that have materially affected, or are reasonably likely to materially affect, our internal controls over financial reporting.

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PART II - OTHER INFORMATION

ITEM 1. LEGAL PROCEEDINGS

        We were named as a defendant in an action filed in July 2006, in the United States District Court of New Jersey by MedAvante, Inc., (“MedAvante”). MedAvante claimed that our use of the names “MedAvant” and “MedAvant Healthcare Solutions” infringed trademark rights allegedly held by MedAvante. MedAvante sought unspecified compensatory damages and injunctive relief. On February 12, 2007, the District Court issued a settlement order. The specific terms of the proposed Settlement and Release Agreement are currently being negotiated, but the total value of the settlement is expected to be approximately $1.3 million, of which $1.0 million will be covered by insurance proceeds. The Company has accrued a preliminary estimate of $0.3 million (net of expected insurance proceeds) based upon these negotiations.

        From time to time, we are a party to other legal proceedings in the course of our business. We, however, do not expect such other legal proceedings to have a material adverse effect on our business or financial condition.

ITEM 1A. RISK FACTORS

        There have been no material changes from the risk factors disclosed in the “Risk Factors” section of our Annual Report on Form 10-K for the fiscal year ended December 31, 2006, filed on March 15, 2007.

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ITEM 6. EXHIBITS

The following exhibits are furnished or filed as part of this Report on Form 10-Q:

10.43	Employment Agreement dated March 22, 2007, by and between ProxyMed, Inc. d/b/a MedAvant Healthcare Solutions, and Peter E. Fleming, III.
10.44	Purchase Agreement dated April 30, 2007, by and between SureScripts, LLC, and ProxyMed, Inc. d/b/a MedAvant Healthcare Solutions.
10.45	Escrow Agreement dated April 30, 2007, by and among SureScripts, LLC, ProxyMed, Inc. d/b/a MedAvant Healthcare Solutions, and SunTrust Bank.
10.46	Non-Competition Agreement dated April 30, 2007, by and between ProxyMed, Inc. d/b/a MedAvant Healthcare Solutions, and SureScripts, LLC.
10.47	Letter of Termination, dated April 30, 2007, of Purchase Agreement, as amended, dated June 27, 1997, between Walgreen Co., and ProxyMed, Inc. d/b/a MedAvant Healthcare Solutions.
31.1	Certification by John G. Lettko, Chief Executive Officer, pursuant to Exchange Act Rules 13a-14 and 15d-14.
31.2	Certification by Gerard M. Hayden, Jr., Chief Financial Officer, pursuant to Exchange Act Rules 13a-14 and 15d-14.
32.1	Certification by John G. Lettko, Chief Executive Officer, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
32.2	Certification by Gerard M. Hayden, Jr., Chief Financial Officer, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.

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SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

PROXYMED, INC.

Date:	May 10, 2007	By:	/s/ John G. Lettko
			John G. Lettko
			Chief Executive Officer
Date:	May 10, 2007	By:	/s/ Gerard M. Hayden, Jr.
			Gerard M. Hayden, Jr.
			Chief Financial Officer

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EX-10.43

EXHIBIT 10.43

EMPLOYMENT AGREEMENT

        THIS EMPLOYMENT AGREEMENT ("Agreement") is made and entered on March 22, 2007, by and between ProxyMed, Inc., a Florida corporation, d/b/a MedAvant Healthcare Solutions (the "Company"), and Peter E. Fleming, III (“Executive”).

        WHEREAS, upon the terms and subject to the conditions of this Agreement, the Company desires to employ the Executive, and Executive is willing to accept such employment.

        NOW, THEREFORE, in consideration of the mutual covenants and agreements set forth hereinafter and other good and valuable considerations, the receipt and sufficiency of which are hereby acknowledged, the Company and the Executive intending to be legally bound agree as follows:

1.     Term. The initial term of the Agreement shall commence on March 26, 2007, (the “Effective Date”), and shall continue for three (3) years and shall be automatically renewed from year to year thereafter (hereafter, the initial term and any renewals thereof shall constitute the “Term”), unless either party provides the other party with notice of its intent not to renew this Agreement not less than ninety (90) days nor more than 120 days prior to the expiration of the then-current term or unless this Agreement is earlier terminated in accordance with its terms.

2.     Position; Duties; Loyalty.

        a) Position. Executive will be employed by Company and shall render service to Company as its GENERAL COUNSEL, reporting to the Chief Executive Officer or their designees, pursuant to the terms, provisions and conditions hereinafter set forth.

        b) Location. The location as to where the Executive’s duties are to be performed will be determined at the reasonable discretion of the Company.

        c) Duties. Executive shall be employed by Company on a full-time, exclusive basis. Executive will be required to travel on business, as is customary and usual for Executive’s position. Executive shall perform such duties and have such authority and responsibilities customarily accompanying his/her position and as reasonably directed by the Chief Executive Officer of the Company consistent with the Executive's position. Executive shall perform the duties and have the authority and responsibilities customarily accompanying those of GENERAL COUNSEL of a public company, including without limitations, those prescribed b y the Company’s By-laws or as may be assigned to the Executive from time to time by the Company’s Board of Directors.

        d) Loyalty. Executive shall devote the full working time required for Executive’s position and shall give Executive’s best efforts to the business of the Company and to the performance of the duties and obligations described in this Agreement. Except as maybe authorized in writing by the Chief Executive Officer of the Company, Executive shall not, directly or indirectly, alone, or as a partner, officer, director or shareholder of any other institution, be engaged in any other commercial activities whatsoever, or continue or assume any other corporate affiliations except for (i) an Affiliate; (ii) passive investments; and (iii) minimal time utilized for business activities that do no t compete with the business of the Company or its subsidiaries. As used herein, the term “Affiliate” shall refer to any entity that is owned or controlled by, under common ownership or control with, or which owns or controls the Company or any of its subsidiaries, now or in the future.

3.     Compensation and Expenses.

        a) Salary. In consideration for the services rendered by the Executive under this Agreement, Company shall pay the Executive a monthly base salary of $18,750.00 per month (“Base Salary”) in accordance with the Company's customary payroll practices. Executive performance reviews (with or without a wage increase) will be conducted at least annually or as otherwise agreed to by the parties in writing. The Company shall adjust Executive’s Base Salary for any wage increases approved in writing by the Board of Directors or its Compensation Committee in its sole discretion. As used herein, the term “Base Compens ation” shall refer collectively to (i) Executive’s Base Salary, adjusted for any wage increases, (ii) the Options (as defined in Section 3(b)), (iii) future options granted pursuant to any Stock Option Plans (as defined in Section 3(b)), (iv) any Bonuses, (v) any bonuses to which Executive may be entitled pursuant to any Bonus Plan, (vi) Vacation; and (vii) Benefits.

        b) Bonus. The Executive shall be entitled to and may earn such bonuses (“Bonuses”) as may be awarded from time to time by the Board of Directors of the Company, sitting as a whole or in committee, in its sole discretion, including pursuant to any bonus plan (“Bonus Plan”) implemented by the Company, and to participate in any stock option plans (“Stock Option Plans”) or other Bonus Plans which the Company may now have or in the future develop and for which the Executive qualifies for eligibility under the terms of such plan.

        c) Expenses. Company shall promptly pay or reimburse the Executive for all reasonable business expenses actually incurred or paid by the Executive in the performance of Executive’s services hereunder in accordance with the policies and procedures of the Company, provided that Executive properly accounts therefore.

        d) Tax Withholding. The Company shall have the right to deduct or withhold from all compensation due Executive hereunder any and all sums required, including without limitation for Federal income, social security and Medicare taxes and all state and local taxes now applicable or that may be enacted and become applicable in the future.

4.     Benefits.

        a) Vacation. The Executive shall be entitled to a yearly vacation of four (4) weeks during the first year of this Agreement, and thereafter such additional time as may be provided by the Company in writing in its then-current policies or otherwise, at full pay to be accrued and taken in accordance with the Company’s policies in effect from time to time (“Vacation”). Vacation shall accrue ratably during each calendar year in accordance with Company policies. Vacation not taken in one calendar year may be carried over to the following calendar year subject to any limitations set forth in the Company policies in effect from time to time. Executive shall not be entitled to receive any additional compensation from the Company for Executive’s failure to take all of Executive’s granted vacation time. In the event Executive's employment is terminated pursuant to Section 5(b) below, any vacation time used but not earned at the time of termination shall be deducted from any monies owed to Executive.

        b) Participation in Benefit Plans. Executive shall be eligible for and entitled to receive all other benefits and perquisites (“Benefits”) offered or extended to other senior executives of the Company.

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5.     Termination.

        a) Involuntary Termination for Death or Disability. This Agreement shall terminate immediately upon Executive’s death. The Company may terminate Executive’s employment with the Company for Disability. For purposes of this Agreement, "Disability" is defined to mean the inability of Executive due to illness or physical or mental infirmity (as determined by a physician selected by Executive and acceptable to the Company) to perform Executive’s duties hereunder on a full-time basis for six (6) consecutive months with reasonable accommodation by the Company. Upon termination due to death or Disability, Executive or Executive’s beneficiary or estate or legal representative shall be entitled to receive the amounts payable under Section 5(c).

        b) Termination by Company For Cause. The Company may terminate Executive's employment with the Company at any time “For Cause” effective immediately, unless stated otherwise in writing, upon giving written notice thereof to Executive, which notice shall state with reasonable specificity the facts supporting the termination “For Cause.” “For Cause” shall include the following:

                (i) Conviction of, or pleading guilty to, a felony or any crime involving moral turpitude, fraud, dishonesty or theft or engaging in any act which is a violation of any law or regulation protecting the rights of employees or;

                (ii) Failure by Executive to satisfactorily perform the duties stated herein or to substantially perform such duties in accordance with any tasks, goals, and objectives as assigned from time to time by the Company in writing, if Executive has not corrected or remedied, or has not commenced to correct or remedy, such unsatisfactorily or non-substantial performance of such specified duties within thirty (30) days (or such other time as may be provided in writing by the Company) of Executive’s actual receipt of such written notice; or

                (iii) Executive’s gross negligence or willful misconduct relating to the Company that is materially injurious to the Company; or

                (iv) Executive’s excessive use of alcohol or illegal drugs that (A) interferes with the performance of Executive’s duties hereunder; and (B) continues even after written warning regarding such excessive use is actually received by Executive; or

                (v) Executive’s abandonment of his position or termination of this Agreement for “No Good Reason;” or

                (vi) Any material breach by Executive of this Agreement or of any of the Company’s applicable written policies then in effect, including without limitations, the Company’s Code of Ethics for Officers and Directors with written notice thereof by the Company, provided such notice is actually received by Executive and an appropriate period to cure such material breach, if such breach is curable, is given and has expired.

        Upon the Company’s termination of this Agreement and Executive's employment For Cause, the Executive shall be entitled to, and the Company shall pay the Executive the following “For Cause Separation Pay”: the Executive’s Base Salary and benefits through the effective date of termination at the Executive’s then current rate (including any applicable pro rated bonus and accrued vacation pay). Except as provided for herein or in any other written agreement, the Company shall have no other liabilities or obligations to Executive upon payment in full of the For Cause Separation Pay.

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        c) Termination by Company Without Cause. The Company may terminate “Without Cause” Executive’s employment with the Company or this Agreement at any time for any or no reason upon thirty (30) Days written notice. Such termination by Company shall be deemed to be “without cause” by the Company. In the event of termination by the Company pursuant to this Section, Executive shall execute a full and complete release of any and all claims against the Company in a form satisfactory to the Company, in which event, for a period of six (6) months commencing from the effective date of termination, the Executive shall be entitled to and shall receive, and the Compan y shall pay the following “Without Cause Separation Pay”: (i) An amount equal to Executive's Base Salary as of the date of termination; plus (ii) a pro rata portion of any accrued vacation not already taken and of any bonus that would have been paid to Executive under any bonus plan which is adopted by the Company's Compensation Committee or Board of Directors in such year if the Company and Executive had met the targeted goals to the date of termination; plus (iii) the continuation for three (3) months from the effective date of termination of all of Executive’s benefits including, without limitation, all insurance plans, on the same terms and conditions as had been provided to Executive prior to the termination, all of the foregoing which shall be payable in accordance with the Company's customary payroll practices then in effect, plus (iv) any unvested options shall be vested as of the date of termination.

        d) Termination by Executive For Good Reason. Executive may terminate this Agreement for “Good Reason” by giving the Company thirty (30) days prior written notice (the “Notice Period”) to that effect, specifically stating Executive’s Good Reason for terminating in sufficient detail to allow the Company to respond effectively to the notice, with the termination becoming effective on the 31^st day after such notice is actually received by the Company (the “Termination Date”), unless the Company at its option cures any alleged breach, if curable, on or before the Termination Date, or if the breach is not capable of being cured within the Notice Period, Company made good faith efforts to cure any alleged breach prior to the Termination Date. The stated Good Reason must be one or more of any of the reasons defined as a “Good Reason” herein. As used in this Agreement, a “Good Reason” means termination by Executive only for any one or more of the following reasons:

                (i) Any reduction of Executive’s then-current Base Salary without Executive’s prior written consent; or

                (ii) Any material breach of this Agreement by the Company, not cured or in the process of being cured by the Company as provided herein after the Company receives not less than 30 days prior written notice by the Executive.

                An Executive’s termination for any of the foregoing Good Reasons shall be treated the same as a termination “Without Cause” by the Company for purposes of calculating separation pay, entitling the Executive to the Without Cause Separation Pay set forth in Section 5(c).

        e) Termination by Executive for No Good Reason. Executive may terminate this Agreement for any reason (other than a Good Reason) or no reason at any time with not less than thirty (30) days prior written notice to the Company (such termination shall be called a termination for "No Good Reason"). After the Company receives notice of a termination for No Good Reason, the Company may by written notice to the Executive cause the effective date of any such termination to be accelerated without causing such termination to be considered a termination by the Company Without Cause. Executive’s termination for No Good Reason shall be treated the same as a termination “For Cause” by the Company for purposes of calculating separation pay, entitling the Executive to the For Cause Separation Pay set forth in Section 5(b). For avoidance of doubt, a termination by Executive for any reason that is also a Good Reason shall be treated as a termination by Executive for Good Reason as set forth in Section 5(d).

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        f) Return of Company Property. Upon any termination of this Agreement, Executive shall immediately return to the Company all property of the Company in Executive's possession, including Confidential Information (as defined below). Executive acknowledges that the Company may withhold any compensation and benefits owed to Executive hereunder until all such property is returned in good condition, normal wear and tear excepted.

        g) Change in Control. If, within ninety (90) days prior to a Change of Control, as defined in Executive's Stock Option Agreement, the Agreement terminates for any reason (other than pursuant to Section 5(b) or (e) above), then, (i) any unvested options shall vest as of the date of the Change of Control and shall remain vested and exercisable as specified in Executive's Stock Option Agreement, and (ii) Executive shall receive, and the Company shall pay the Executive, the “Without Cause Separation Pay” set forth in Section 5(c) above.

6.     Covenants of Executive.

        a) Executive agrees that during the Term of this Agreement and for one (1) year following its expiration or termination for any or no reason, including without limitation, “For Cause”, “Without Cause”, “For Good Reason”, or “No Good Reason”, Executive will not, directly or indirectly, without the prior written consent of the Company, induce or solicit any person employed or hereafter employed by the Company to leave the employ of the Company, or solicit, recruit, hire or attempt to solicit, recruit or hire any person employed by the Company.

        b) Executive agrees that for a period of two (2) years after the expiration or termination of this Agreement for any or no reason, including without limitation, “For Cause”, “Without Cause”, “For Good Reason”, or “No Good Reason”, Executive will not, directly or indirectly, without the prior written consent of the Company, solicit or attempt to solicit, divert or take away, or attempt to divert or take away, Customers or their laboratory business from the Company and/or the Company’s then-current Affiliates. As used in the preceding sentence, the term “Customer” shall include, however known to Executive as of the date of such termination or expiration, (i) any current end-user of the Company’s or its then-current Affiliates’ products or services, or any potential end-user thereof with whom the Company or its then-current Affiliates have had contact with within the preceding six (6) months; (ii) any current suppliers of the Company’s or its then-current Affiliates; and/or (iii) vendor of the Company or its then-current Affiliates or reseller of the Company or its then-current Affiliates; and/or (iv) their Affiliates, successors or assigns.

        c) Executive agrees and acknowledges that Executive will disclose promptly to the Company every discovery, improvement and invention made, conceived or developed by Executive during the entire period of employment (whether or not during working hours) which discoveries, improvements or inventions are capable of use in any way in connection with the business of the Company. To the fullest extent permitted by law, all such discoveries, inventions and improvements will be deemed works made-for-hire. Executive grants and agrees to convey to Company or its nominee the entire right, title and interest, domestic and foreign, which Executive may have in such discoveries, improvements or inventions, or a lesser interest therein, at the op tion of Company. Executive further agrees to promptly, upon request, sign all applications for patents, copyrights, assignments and other appropriate documents, and to perform all acts and to do all things necessary and appropriate to carry out the intent of this section, whether or not Executive is still an employee of the Company at the time of such requests.

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        d) Executive agrees and acknowledges that the Confidential Information of the Company is valuable, special and unique to its business, that such business depends on such Confidential Information, and that the Company wishes to protect such Confidential Information by keeping it confidential for the exclusive use and benefit of the Company. Based on the foregoing, Executive agrees to undertake the following obligations with respect to such Confidential Information:

                (i) Executive agrees to keep any and all Confidential Information in trust for the use and benefit of the Company;

                (ii) Executive agrees that, except as required by Executive's duties or authorized in writing by the Company, Executive will not at any time during and for a period of three (3) years after the termination of Executive’s employment with the Company, disclose, directly or indirectly, any Confidential Information of the Company to any third party; except as may be required by applicable law or court order, in which case Executive shall promptly notify Company so as to allow it to seek a protective order if it so elects;

                (iii) Executive agrees to take all reasonable steps necessary, or reasonably requested by the Company, to ensure that all Confidential Information of the Company is kept confidential for the use and benefit of the Company and its subsidiaries; and

                (iv) Executive agrees that, upon termination of Executive’s employment by the Company or at any other time the Company may in writing so request, Executive will promptly deliver to the Company all materials constituting Confidential Information (including all copies and derivatives thereof) that are in the possession of or under the control of Executive. Executive further agrees that, if requested by the Company to return any Confidential Information pursuant to this Subsection (iv), Executive will not make or retain any copy or extract from such materials.

        For the purposes of this Section 6(d), "Confidential Information" means any and all information, including derivative works, developed by or for the Company or entrusted to the Company in confidence by its customers, of which Executive gained knowledge by reason of Executive’s employment by the Company, which is not generally known in any industry in which the Company is or may become engaged, but does not apply to information which is generally known to the public or the trade, unless such knowledge results from an unauthorized disclosure by Executive. Confidential Information includes, but is not limited to, any and all information developed by or for the Company concerning plans, marketing and sales methods, materials, pr ocesses, business forms, procedures, devices used by the Company, its suppliers and customers with which the Company had dealt with prior to Executive's termination of employment with the Company, plans for development of new products, services and expansion into new areas or markets, internal operations, and any trade secrets, proprietary information of any type owned by the Company, together with all written, graphic and other materials relating to all or any part of the same. The Company will receive all materials, including, software programs, source code, object code, specifications, documents, abstracts and summaries developed in connection with Executive's employment. Executive acknowledges that the programs and documentation developed in connection with Exe cutive's employment with the Company shall be the exclusive property of the Company, and that the Company shall retain all right, title and interest in such materials, including without limitation patent and copyright interests. Nothing herein shall be construed as a license from the Company to Executive to make, use, sell or copy any inventions, ideas, trade secrets, trademarks, copyrightable works or other intellectual property of the Company during the Term of this Agreement or subsequent to its termination.

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        e) Executive acknowledges that there is no general geographical restriction contained in this Section 6 because the Company’s and/or Affiliates’ Customers are not confined to one geographical area or operate on a national level. Notwithstanding the foregoing, if a court of competent jurisdiction were to determine that any of the foregoing covenants would be held to be unreasonable in time or distance or scope, the time or distance or scope may be reduced by appropriate order of the court to that deemed reasonable.

        f) Executive confirms that Executive is not bound by the terms of any agreement with any previous Company or other party which restricts in any way Executive’s use or disclosure of information or Executive’s engagement in any business, except as Executive may disclose in a separate schedule attached to this Agreement prior to Company’s and Executive’s execution of this Agreement. Further, Executive represents that Executive has delivered to the Company prior to executing this Agreement true and complete copies of any agreements disclosed on such attached schedule. Executive represents to the Company that Executive’s execution of this Agreement, employment with the Company and the performance of Executive& #146;s proposed duties for the Company will not violate any obligations Executive may have to any such previous Company or other party. In any work for the Company, Executive will not disclose or make use of any information in violation of any agreements with or rights of any such previous Company or other party, and will not bring to the premises of the Company any copies or other tangible embodiments of non-public information belonging to or obtained from any such previous employment or other party. In the event of breach of this subsection (f) Executive hereby agrees to defend, indemnify and hold harmless the Company, its officers, directors, employees, agents (the "Indemnified Parties") from any and all damages, suits, claims, liabilities, actions (individually and collectively, the "Indemnity Event") arising or resulting from such breach. In the event of any Indemnity Event, the Indemnified Parties shall provide Executive with timely written notice of same, and thereafter Executive shall at its own expense defend, protect and hold harmless the applicable indemnified Parties against said Indemnity Event. If the Executive should fail to so defend and/or indemnify and save harmless the Indemnified Parties, then in such instance the Indemnified Parties shall have full rights to defend, pay or settle said Indemnity Event on their behalf without notice to Executive and with full rights to recourse against Executive for all fees, costs, expenses and payments made or agreed to be paid to discharge said Indemnity Event.

        g) Assistance in Litigation. Executive shall upon reasonable notice, furnish such information and proper assistance to the Company as it may reasonably require in connection with any litigation in which the Company is, or may become, a party either during or after Executive’s employment with the Company.

        h) Injunctive Relief.

                i) Executive acknowledges and agrees that the covenants and obligations contained in this Section 6 relate to special, unique and extraordinary matters and that a violation of any of the terms of this Section will cause the Company irreparable injury for which adequate remedies at law are not available. Therefore, Executive agrees that the Company shall be entitled (without having to post a bond or other surety) to an injunction, restraining order, or other equitable relief from any court of competent jurisdiction, restraining the Executive from committing any violation of the covenants and obligations set forth in this Section 6.

                ii) The Company's rights and remedies under this Section 6 are cumulative and are in addition to any other rights and remedies the Company may have pursuant to the specific provisions of this Agreement and at law or in equity.

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7.     Miscellaneous.

        a) Attorney's Fees. In the event a proceeding is brought to enforce or interpret any part of this Agreement or the rights or obligations of any party to this Agreement, each party shall pay their own fees and expenses, including reasonable attorney's fees and costs.

        b) Successors and Assigns. This Agreement and the benefits hereunder are personal to the Company and are not assignable or transferable by the Executive. Subject to the foregoing, this Agreement shall be binding upon and inure to the benefit of the Company and the Executive, and the Executive's heirs and legal representatives, and the Company's successors and assigns.

        c) Governing Law. This Agreement shall be construed in accordance with and governed by the law of the State of Florida, without regard to the application of Florida’s principles of conflict of laws.

        d) Arbitration. Except for disputes relating to Section 6(d) of this Agreement or any injunctions, any and all disputes or controversies that shall arise under or in connection with this Agreement or in any other way related to Executive's employment by the Company, including termination of employment, shall be submitted to a panel of three arbitrators under the National Rules for the Resolution of Employment Disputes of the American Arbitration Association then in effect. The parties hereby acknowledge that the Federal Arbitration Act takes precedence over any state arbitration statutes, rules and regulations. Each of the arbitrators shall be qualified and experienced in employment related matters with at least one arbitrator being a licensed attorney. The arbitrators must base their determination solely on the terms and conditions of this Agreement and the law in the State of Florida. The arbitrators shall have the authority to award any remedies that a court may order or grant, except that they will have no authority to award punitive damages or any other damages not measured by the prevailing party’s actual damages, and may not, in any event, make any ruling, finding or award that does not conform to the terms and conditions of this Agreement. Arbitration shall be held in Fort Lauderdale, Florida, and the parties hereby agree to accept service of process served in accordance with the Notices provision of this Agreement and in the personal juri sdiction and venue as set out herein. Both parties expressly covenant and agree to be bound by the decision of the arbitrators as the final determination of the matter in dispute. Judgment upon the award rendered by the arbitrators may be entered into any court having jurisdiction thereof.

        e) Notices. All notices and other communications required or permitted to be given under this Agreement shall be in writing and shall be deemed to have been given if delivered personally or sent by certified mail, return receipt requested, postage prepaid, to the parties to this Agreement addressed to the Company’s then-current Chief Executive Officer at its then principal office, as notified to Executive, or to the Executive at Executive’s most current address as shown in Executive’s personnel file, or to either party hereto at such other address or addresses as Executive or it may from time to time specify for such purposes in a notice similarly given.

        f) Modification; Waiver. No provisions of this Agreement may be modified, waived or discharged unless such modification, waiver or discharge is approved by a duly authorized officer of the Company and is agreed to in a writing signed by the Executive and such officer. No waiver by either party hereto at any time of any breach by the other party hereto of, or compliance with, any condition or provision of this Agreement to be performed by such other party shall be deemed a waiver of similar or dissimilar provisions or conditions at the same or at any prior or subsequent time.

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        g) Headings. The headings in this Agreement are for convenience of reference only and shall not control or affect the meaning or construction of this Agreement.

        h) Validity. The invalidity or unenforceability of any one or more provisions of this Agreement shall not affect the validity or enforceability of any other provision of this Agreement, which shall remain in full force and effect.

        i) Severability. The invalidity of any one or more of the words, phrases, sentences, clauses or sections contained in this Agreement shall not affect the enforceability of the remaining portions of this Agreement or any part thereof, all of which are inserted conditionally on their being valid in law, and if any one or more of the words, phrases, sentences, clauses or sections contained in this Agreement shall be declared invalid, this Agreement shall be construed as if such invalid word or words, phrase or phrases, sentence or sentences, clause or clauses, or section or sections had not been inserted.

        k) Counterparts. This Agreement may be executed in one or more counterparts, each of which shall be deemed to be an original but all of which together will constitute one and the same instrument.

        l) Surviving Provisions. Any portion of this Agreement which by it nature survives the termination of this Agreement, including Section 6, shall survive the termination of this Agreement.

        m) Entire Agreement. Except as modified by this Agreement, all of Executive’s benefits and obligations are as set forth in the Company’s policies in effect from time to time. Other than the Company’s policies in effect from time to time, as modified herein, no agreements or representations, oral or otherwise, express or implied, with respect to the subject matter hereof have been made by either party, which are not set forth expressly in this Agreement. This Agreement constitute the final and entire agreement between the parties, and supersedes all prior written and oral agreements, understandings, or communications with respect to the subject matter of this Agreement.

        IN WITNESS WHEREOF, the parties have executed this Agreement as of the date and year first above written.

COMPANY			EXECUTIVE
By:	/s/ JOHN G. LETTKO		By:	/s/ PETER E. FLEMING III
	Signature			Signature
Print Name:		JOHN G. LETTKO	Print Name:		PETER E. FLEMING III

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EX-10.44

EXHIBIT 10.44

PURCHASE AGREEMENT
BY AND BETWEEN
SURESCRIPTS, LLC
AND
PROXYMED, INC.

April 30, 2007

PURCHASE AGREEMENT
BY AND BETWEEN
SURESCRIPTS, LLC,
AND
PROXYMED, INC.
List of Exhibits
Exhibit A	List of all pharmacies connected to the Pharmacy Health Information Exchange
Exhibit B	Seller Pharmacy Contracts
Exhibit C	Seller Prescriber Contracts
Exhibit D	Form of Escrow Agreement
Exhibit E	Form of Non-Competition Agreement
Exhibit F	Buyer Disclosure Schedule
Exhibit G	Seller Disclosure Schedule
Exhibit H	Seller Talking Points

Execution Version

PURCHASE AGREEMENT
BY AND BETWEEN
SURESCRIPTS, LLC
AND
PROXYMED, INC.

        THIS PURCHASE AGREEMENT (the “Agreement”), dated as of this 30th day of April, 2007 (the “Effective Date”), is made by and between ProxyMed, Inc. d/b/a MedAvant Healthcare Solutions, a corporation duly organized and validly existing under the laws of the State of Florida (“Seller”), and SureScripts, LLC, a limited liability company duly organized and validly existing under the laws of the State of Virginia (“Buyer”).

        WHEREAS, Seller is a party to the Seller Contracts (defined below) pursuant to which Seller provides various back-end services to pharmacies and providers through its proprietary national healthcare information network, including enabling pharmacies and providers to exchange prescription information electronically through a system referred to, from time to time, as one or more of the following names: Phoenix, ProxyMed Network, ProxyNet Network, PreScribe.net, and/or ProxyNet Interface (collectively, the “ProxyMed Network” and, together with the Seller Contracts, the “Pharmacy Processing Business”; provided, however, it is agreed that for purposes of this Agreement, the terms ProxyMed Network and Pharmacy Processing Business shall apply only to that aspect of Seller’s proprietary national healthcare information network applicable to Electronic Prescribing Transactions, as defined below);

        WHEREAS; Seller licenses third party software applications to physicians so that they may connect to the ProxyMed Network and send and receive electronic prescription information via the ProxyMed Network, and such software applications are referred to, from time to time, by one or more of the following names: PreScribe, ProxyMed.com, MedAvantHealth.com (collectively, the “MedAvant Prescribing Applications”);

        WHEREAS, Buyer operates a network that facilitates the electronic exchange of prescription information between pharmacies and providers (the “Pharmacy Health Information Exchange”);

        WHEREAS, Buyer and Seller (d/b/a ProxyMed Transaction Services, Inc.) are parties to that certain Prescriber Network Aggregator Agreement, dated as of May 2, 2005 (the “ProxyMed SureScripts Agreement”);

        WHEREAS, Seller is a party to that certain Walgreens Purchase Agreement, dated June 27, 1997, as amended (“Walgreens Agreement”), with Walgreen Co., pursuant to which Seller’s sale of the Pharmacy Processing Business triggers the obligation of Seller to pay Walgreens a penalty in the amount of ten million dollars ($10,000,000); and

        WHEREAS, Seller desires to sell the Pharmacy Processing Business to Buyer, and Buyer desires to purchase the Pharmacy Processing Business from Seller, upon the terms and conditions set forth herein;

        NOW THEREFORE, for good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged, the parties agree as follows:

ARTICLE 1.
PURCHASE OF PHARMACY PROCESSING BUSINESS

        SECTION 1.1. Incorporation of Recitals. The recitals set forth above are incorporated herein by reference.

        SECTION 1.2. Terms of Purchase and Sale.

                a. As of the Effective Date, Seller will sell, and Buyer shall purchase, all current and future Electronic Prescribing Transactions (as defined below) processed by the ProxyMed Network (the “Pharmacy Processing Business”). “Electronic Prescribing Transactions” is defined as all electronic prescribing messages (including, but not limited to, new prescriptions, refill requests, refill responses, stop orders), formulary and/or eligibility messages related to prescription claims, and patient identifiable medication history messages as derived from electronic prescribing messages, formulary and/or eli gibility messages, and/or the dispensed history data bases of pharmacies that are processed by and through the ProxyMed Network, whether through true electronic data interchange or facsimile. Seller shall continue to process Electronic Prescribing Transactions through the ProxyMed Network in the normal course of its business, consistent with past practices and course of conduct, until the Termination Date (as defined below), and Seller shall retain all personnel necessary and devote internal and external resources, all at its own cost and expense, necessary to operate the ProxyMed Network, consistent with past practices and course of conduct, during the transition period contemplated by Sections 1.2. f and/or 1.2. g herein.

                b. As of the Effective Date, the ProxyMed SureScripts Agreement is deemed amended, without any further action of the parties required, to amend Exhibit Five thereof to be in the form and substance of Exhibit A hereto, thereby adding to such exhibit all pharmacies connected to the Pharmacy Health Information Exchange, whether directly or indirectly.

                c. Seller represents and warrants to Buyer that Exhibit B hereto sets forth a list of (i) all customers with contracts pursuant to which Electronic Prescribing Transactions are processed, as of the Effective Date, to which Seller is a party to with respect to connectivity of any pharmacy with the ProxyMed Network and (ii) to its knowledge, all contracts pursuant to which Electronic Prescribing Transactions are processed to which Seller is a party to with respect to connectivity of any pharmacy with the ProxyMed Network (the “Pharmacy Contracts”). Seller shall terminate or cause to be terminated each Pharmacy Contract in conjunction and simultaneously with the termination of the technical connection (electronic or fax connection) between such contracted pharmacy and the ProxyMed Network. For the periods from the Effective Date until the termination of each such Pharmacy Contract, Seller shall bill each such pharmacy for all Electronic Prescribing Messages pursuant to its customary practice and historic rates, without any deduction, discount, or offset not in the historic ordinary course of business, and each such bill or invoice shall direct the applicable pharmacy to pay such amounts directly to SureScripts in satisfaction of the invoice. In the event that any such pharmacy sends payment for

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any such invoice to Seller, Seller shall immediately pay such amounts over to Buyer. For the periods from and after the termination of any such Pharmacy Contract, Buyer and/or its value added reseller, as the case may be, shall have the right to bill, and collect from, such pharmacies all on the terms and conditions of the agreements between SureScripts or its value added reseller, on the one hand, and such pharmacy, on the other hand.

                d. Seller represents and warrants to Buyer that Exhibit C hereto sets forth a list of (i) all customers with contracts pursuant to which Electronic Prescribing Transactions are processed, as of the Effective Date, pursuant to which Seller provides any third party prescriber application with connectivity to the ProxyMed Network and (ii) to its knowledge, all contracts pursuant to which Electronic Prescribing Transactions are processed pursuant to which Seller provides any third party prescriber application with connectivity to the ProxyMed Network (the “Prescriber Contracts” and, together with the Pharmacy Contracts, the “Seller Contracts”). As soon as reasonably possible after the Effective Date, Seller shall terminate or cause to be terminated all Prescriber Contracts in conjunction and simultaneously with the termination of the technical connection (electronic or fax connection) between such contracted third party prescriber application and the ProxyMed Network. Until termination of such Prescriber Contracts, Seller shall be entitled to bill and invoice such third party prescriber applications in the normal course of business, and SureScripts shall have no right to such billed amounts.

                e. Buyer agrees that, from and after the Effective Date, Buyer shall continue to pay Seller the Adoption Incentive Fee as contemplated by Exhibit One of the ProxyMed SureScripts Agreement for any Eligible Transaction, as defined in such Exhibit One, processed by the ProxyMed Network, pursuant to the ProxyMed SureScripts Agreement until such agreement is terminated pursuant to Section 1.2h below.

                f. The parties acknowledge that as soon as reasonably possible after the Effective Date, Seller shall take steps to divest itself of the MedAvant Prescribing Applications. Seller shall sell the MedAvant Prescribing Applications only to an entity that has a contract with Buyer or Buyer’s value added reseller for connectivity to the Pharmacy Health Information Exchange. In the event, after a period of six (6) months from the Effective Date, Seller has not sold the MedAvant Prescribing Applications to an entity that has a contract with Buyer or Buyer’s value added reseller for connectivity to the Pharmacy Health Information Exchange, then Seller shall, during the subsequent six (6) month period, cooperate with Buyer and take all < /FONT>steps reasonably necessary as requested by Buyer to transfer either the MedAvant Prescribing Applications or the users of such MedAvant Prescribing Applications to an entity(ies) of Buyer’s selection, all for no charge or consideration. Seller shall retain all personnel necessary and devote internal and external resources, all at its own cost and expense, necessary to operate the MedAvant Prescribing Applications consistent with past practices until the MedAvant Prescribing Applications or the users thereof have been sold or transferred pursuant to the terms hereof.

                g. Seller shall take all steps reasonably necessary to terminate (i) all connectivity of any third party with the ProxyMed Network, (ii) unless previously sold and transferred to a third party, all connectivity of the MedAvant Prescribing Applications with the ProxyMed Network, and (ii) all operations of Pharmacy Processing Business, all to occur as soon as reasonably possible after the Effective Date, but no later than July 31, 2007 (the

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“Termination Date”); provided, however, that either Buyer or Seller may extend the Termination Date with respect to the connectivity of any third party (i.e., not the MedAvant Prescribing Applications) to the ProxyMed Network for no more than three (3) periods of thirty (30) days each. Notwithstanding anything herein to the contrary, all connectivity of the MedAvant Prescribing Applications shall be transferred to the Pharmacy Health Information Exchange no later than July 31, 2007. Unless mutually extended in writing by both parties, after the Termination Date, Seller shall not operate the Pharmacy Processing Business or the ProxyMed Network for any purpose whatsoever. Immediately after all connectivity of any third party vendor applications and th e MedAvant Prescribing Applications with the ProxyMed Network are terminated, all Seller Contracts are terminated, and all operations of the Pharmacy Processing Business are terminated, Seller shall provide written notice to Buyer, in form and substance acceptable to Buyer, representing and warranting that such has occurred (the “Termination Affidavit”).

                h. The ProxyMed SureScripts Agreement shall be deemed terminated, and of no further force and effect (other than those terms that are intended to survive termination) on the later to occur of (i) the Termination Date or (ii) when the MedAvant Prescriber Applications or their users have been transferred pursuant to Section 1.2. f.

        SECTION 1.3. Walgreen. As a condition of the transaction detailed herein, Seller must obtain from Walgreen Co. a written termination of Seller’s obligations in the Walgreens-ProxyMed PreScribe Purchase Agreement.

        SECTION 1.4. No Assumption of Liabilities. Seller specifically agrees that Buyer is not assuming any liabilities, contracts, employees, or obligations, known or unknown, contingent or otherwise, of Seller pursuant to this Agreement or the transactions contemplated hereby.

        SECTION 1.5. Purchase Price. Subject to the terms and conditions of this Agreement, and in reliance on the representations, warranties, and covenants contained herein, on the Effective Date, Seller shall sell to Buyer and Buyer shall purchase from Seller the Pharmacy Processing Business for the total amount of five hundred thousand dollars ($500,000) (the “Purchase Price”). The Purchase Price shall be paid as follows:

                a. Four hundred thousand dollars ($400,000) shall be paid to Seller on the Effective Date in the form of cash, wire transfer, or other immediately available funds; and

                b. One hundred thousand dollars ($100,000) (the “Escrow Amount”) shall be deposited into an escrow account (an “Escrow Account”) on the Effective Date pursuant to the escrow agreement attached hereto as Exhibit D (the “Escrow Agreement”). The Escrow Amount shall be paid to Seller on, or immediately after, the Termination Date (as extended pursuant to Section 1.2. g) so long as (i) Buyer shall have received an acceptable Termination Affidavit, and (ii) there shall have been no breach of any of the representations and warranties of Seller as set forth in Article 3.

ARTICLE 2.
OTHER AGREEMENTS

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        SECTION 2.1. Noncompetition Agreement. On the Effective Date, Seller shall enter into a Noncompetition Agreement with Buyer, substantially in form and substance as set forth in Exhibit E, attached hereto and incorporated by reference (“Noncompetition Agreement”).

        SECTION 2.2. Cooperation and Further Assurances. From and after the Effective Date, Seller shall fully cooperate with, and shall cause all of its employees and agents to fully cooperate with, Buyer to transition on or before the Termination Date all Electronic Prescribing Transactions from the ProxyMed Network to the Pharmacy Health Information Exchange in a manner than minimizes to the greatest extent possible any disruption or interference of service to the customers of either Buyer or Seller. Such cooperation shall include, but not be limited to, facilitating contacts between Buyer and any entities contracted with Seller (i.e., pharmacies or vendors of prescriber applications). Each party s hall bear its own expenses in connection with any such transition.

                b. From and after the Effective Date, Seller will provide Buyer with reports detailing Electronic Prescribing Transactions processed and all bills and invoices sent by Seller from the Effective Date until the Termination Date.

                c. From time to time after the Effective Date for a period of two (2) years from the Effective Date, Seller shall give to Buyer and its representatives, auditors, and counsel full access during normal business hours to all of the properties, books, records, contracts, licenses, franchises, and all of the documents of Seller relating to the business being sold and transferred hereunder, and shall furnish to Buyer all information with respect thereto as Buyer may from time to time reasonably request.

ARTICLE 3.
REPRESENTATIONS AND WARRANTIES
OF SELLER

        Seller represents and warrants to Buyer that, except as set forth on the Disclosure Schedule attached hereto as Exhibit F and incorporated herein by reference (which Disclosure Schedule either (i) makes explicit reference to the particular representation or warranty as to which exception is taken or (ii) describes the exception with sufficient specificity and in such a manner that a reasonable person could determine, without any independent investigation, from the terms of this Agreement and the Disclosure Schedule, the particular representation(s) or warranty(ies) as to which exception is taken):

        SECTION 3.1. Organization, Qualification, and Power of Seller. Seller (a) is a duly organized and validly existing corporation in good standing under the laws of the State of Florida; (b) has the requisite corporate power and authority to carry on its business; and (c) has all requisite corporate power and authority and licenses, permits, franchises, certificates, authorizations, approvals, consents, and rights to own and operate the Pharmacy Processing Business.

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        SECTION 3.2. Former Names. Seller either was formally known as, or is the legal owner of, or is the successor to the businesses known as, at one time or another, Phoenix, ProxyMed, Inc., ProxyMed Network, ProxyNet Network, PreScribe.net, and/or ProxyNet Interface, and that no other names are being used, or have been used, to describe Seller’s healthcare information network to permit pharmacies and providers to exchange prescription information electronically.

        SECTION 3.3. Contracts. Seller represents and warrants to Buyer that Seller has provided to Buyer true and correct copies of the Seller Contracts as currently in force and effect. Seller represents and warrants to Buyer that no party to any such contract has provided, or threatened to provide, a notice of breach, a notice of termination, and no such party has submitted any complaint to Seller regarding performance under any of the contracts. Buyer represents and warrants to Seller that all due diligence materials provided to Buyer in connection with this transaction, including but not limited to, volume reports, were when provided and are as of the Effective Date true and correct, without any material misstatement or omission therein.

        SECTION 3.4. Validity. Seller has the full legal power and authority to execute, deliver, and perform this Agreement and all other agreements and documents necessary to consummate the contemplated transactions, and all actions of Seller necessary for such execution, delivery, and performance have been taken. This Agreement and all agreements related to this transaction requiring execution by Seller have been duly executed and delivered by Seller and constitute the legal, valid, and binding obligation of Seller, enforceable in accordance with their respective terms (subject as to enforcement of remedies to the discretion of courts in awarding equitable relief and to applicable bankruptcy, reorg anization, insolvency, moratorium, and similar laws affecting the rights of creditors generally). The execution and delivery by Seller of this Agreement, and the performance of its obligations hereunder, do not require any action or consent of any party other than Seller pursuant to any contract, agreement, or other undertaking of Seller, or pursuant to any order or decree to which Seller is a party or to which any of its properties or assets are subject, and will not violate any provision of law, the Articles of Incorporation or Bylaws of Seller, any order of any court or other agency of the government, or any indenture, agreement or other instrument to which Seller, or any of its properties or assets, are bound, or conflict with, result in a breach of or constitute (with due notice or lapse of time or both) a default under any such indenture, agreement or other instrument, or result in the creation or imposition of any claim of any nature whatsoever upon any of the properties or assets of Seller.

        SECTION 3.5. Disclosure. No representation or warranty by Seller in this Agreement, and no exhibit, schedule or certificate furnished or to be furnished by Seller pursuant hereto, (a) contains any untrue statement of a material fact or (b) omits to state a fact required to be stated therein or necessary to make the statements contained herein or therein, in light of the circumstances in which they were made, not materially misleading.

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ARTICLE 4.
REPRESENTATIONS AND WARRANTIES
OF BUYER

        Buyer represents and warrants to Seller that, except as set forth on the Disclosure Schedule attached hereto as Exhibit F and incorporated by reference (which Disclosure Schedule either (i) makes explicit reference to the particular representation or warranty as to which exception is taken or (ii) describes the exception with sufficient specificity and in such a manner that a reasonable person could determine, without any independent investigation, from the terms of this Agreement and the Disclosure Schedule, the particular representation(s) or warranty(ies) as to which exception is taken):

        SECTION 4.1. Organization, Qualification and Corporate Power of Buyer. Buyer (a) is a limited liability company duly organized, validly existing and in good standing under the laws of the Commonwealth of Virginia; (b) has the corporate power and authority to carry on its business as now conducted; and (c) has all requisite power and authority and licenses, permits, franchises, certificates, authorizations, approvals, consents, and rights to own and operate the Pharmacy Health Information Exchange.

        SECTION 4.2. Validity. Buyer has the full legal power and authority to execute, deliver, and perform this Agreement and all other agreements and documents necessary to consummate the contemplated transactions, and all corporate actions of Buyer necessary for such execution, delivery, and performance have been taken. This Agreement and all agreements related to this transaction have been duly executed and delivered by Buyer and constitute the legal, valid and binding obligation of Buyer enforceable in accordance with their terms (subject as to enforcement of remedies to equitable principles and to the discretion of courts in awarding equitable relief and to applicable bankruptcy, reorganization , insolvency, moratorium and similar laws affecting the rights of creditors generally). The execution and delivery by Buyer of this Agreement and the other agreements related hereto to which Buyer is a party, and the performance of its obligations hereunder and thereunder, will not violate any provision of law, the Certificate of Formation or Operating Agreement of Buyer, any order of any court or other agency of the government, or any indenture, agreement or other instrument to which Buyer, or any of its properties or assets are bound, or conflict with, result in a breach of or constitute (with due notice or lapse of time or both) a default under any such indenture, agreement or other instrument, or result in the creation or imposition of any lien, charge, restriction, claim or encumbrance of an y nature whatsoever upon any of the properties or assets of Buyer.

        SECTION 4.3. Other Approvals. All consents, approvals, qualifications, orders or authorizations of, or filings with, any governmental authority, including any court or other third party, required in connection with Buyer’s valid execution, delivery or performance of this Agreement, or the consummation of any transaction contemplated by this Agreement, shall have been duly made and obtained and are effective on and as of the date hereof.

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        SECTION 4.4. Disclosure. No representation or warranty by Buyer in this Agreement, and no exhibit, schedule or certificate furnished or to be furnished by Buyer pursuant hereto, (a) contains any untrue statement of a material fact or (b) omits to state a fact required to be stated therein or necessary to make the statements contained herein or therein, in light of the circumstances in which they were made, not materially misleading.

ARTICLE 5.
COVENANTS OF SELLER

        SECTION 5.1. Cooperation with Buyer. Seller covenants to Buyer that Seller shall cooperate with Buyer and shall use its reasonable best efforts after the Effective Date so that Buyer shall obtain all required consents of third parties and approvals for Buyer’ purchase of the business contemplated hereby, and in addressing other matters necessary to consummate the transactions and receive the benefits contemplated by this Agreement.

        SECTION 5.2. Non-Contravention. Seller covenants to Buyer that it shall not take any action, or omit to take any action, which action or omission would have the effect of materially violating any of the covenants of this Agreement or warranties or representations of Seller in this Agreement.

ARTICLE 6.
JOINT COVENANTS OF THE PARTIES

        SECTION 6.1. Confidentiality of Business Information. The parties heretofore have received and hereafter may receive various financial and other information concerning the activities, business, assets, and properties of the other parties hereto. The parties agree that:

                a. all such information thus received by a party hereto shall not at any time, or in any way or manner, be utilized by such party for its respective advantage or disclosed by it to others for any purpose whatsoever; and

                b. the parties shall take all reasonable measures to assure that no employee or agent under its respective control shall at any time use or disclose any information described in this Section other than for the purposes hereunder; and

                c. this Section shall not apply to (i) any such information that was known to a party prior to its disclosure to such party in accordance with this Section or was, is, or becomes generally available to the public other than by disclosure by the party or any of its respective employees or agents in violation of this Section; (ii) any disclosure which such party makes to any regulatory agency pursuant to that party’s obligations of disclosure to such agency; (iii) any disclosure that is necessary or appropriate in obtaining any consent or approval required for the consummation of the transactions contemplated by this Agreement; or (iv) any disclosure required by or necessary or appropriate in connection with legal proceedings.

        SECTION 6.2. Confidentiality of this Agreement. Until such time as the parties hereto publicly disclose the existence and contents of this Agreement and any related documents

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in accordance with the requirements of this Section 6.2 (“Public Disclosure”), the nature and status of the transactions described herein shall be confidential. The timing and content of any announcements, press releases or other public statements concerning the transactions contemplated by this Agreement will occur upon, and be determined by, the mutual agreement and consent of Seller and Buyer, which shall not be unreasonably withheld. This Section shall not apply to:

                a. any disclosure to such party’s directors, managers, members, officers, key employees, affiliates, accounting, investment banking and legal advisers;

                b. any disclosure which such party makes to any regulatory agency pursuant to that party’s obligations of disclosure to such agency;

                c. any disclosure that is necessary or appropriate in obtaining any consent or approval required for the consummation of the transactions contemplated by this Agreement;

                d. any disclosure required by or necessary or appropriate in connection with legal proceedings; or

                e. any disclosure which, in the written opinion of counsel to the party seeking to make the disclosure, is required by applicable law.

Attached hereto as Exhibit H is an outline representing Seller’s position as it relates to this transaction (“Talking Points”). Buyer agrees to adhere to the Talking Points or defer questions to Seller whenever responding to questions about Seller. Seller shall defer any questions about Buyer to Buyer. The Party’s agree that once Public Disclosure has occurred, the Party’s can speak with media outlets and publicly about the transactions contemplated hereby without seeking the other Party’s consent.

ARTICLE 7.
INDEMNIFICATION

        SECTION 7.1. Indemnification by Seller. Subject to Section 7.4, Seller agrees to indemnify and hold harmless Buyer, its officers, employees, agents, directors, representatives, members, controlling persons and affiliates (collectively, the “Buyer Indemnified Persons”) for, and will pay to the Buyer Indemnified Persons the amount of, any loss, liability, claim, damage (including incidental and consequential damages), expense (including costs of investigation and defense and reasonable attorneys’ fees) or diminution of value incurred by Buyer Indemnified Persons, whether or not involving a third-party claim, arising, directly or indirectly, from or in connection with:

                a. any breach of any representation or warranty made by Seller in this Agreement or any other certificate or document delivered by Seller pursuant to this Agreement;

                b. any federal, state, or local tax or fee incurred, accrued, or assessed in connection with the ProxyMed Network prior to the Effective Date;

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                c. any liability or obligation of Seller related to or in connection with any Seller Contract or the Pharmacy Processing Business as conducted by Seller. Seller specifically agrees that Buyer is not assuming any obligation or liability of Seller under any contract to which it is a party, whether related to the Pharmacy Processing Business, the MedAvant Prescribing Applications or otherwise; or

                d. any breach by Seller of any covenant or obligation of Seller in this Agreement.

        SECTION 7.2. Indemnification by Buyer. Subject to Section 7.4, Buyer agrees to indemnify and hold harmless Seller, and its officers, employees, agents, directors, representatives, members, controlling persons and affiliates (collectively, “Seller Indemnified Persons”) for, and will pay to the Seller Indemnified Persons the amount of, any loss, liability, claim, damage (including incidental and consequential damages), expense (including costs of investigation and defense and reasonable attorneys’ fees) incurred by Seller Indemnified Persons, whether or not involving a third-party claim, arising, directly or indirectly, from or i n connection with:

                a. any breach of any representation or warranty made by Buyer in this Agreement or any other certificate or document delivered by Buyer pursuant to this Agreement;

                b. any federal, state, or local tax or fee incurred, accrued or assessed in connection with Buyer with respect to any period from and after the Effective Date; or

                c. any breach by Buyer of any covenant or obligation of Buyer in this Agreement.

        SECTION 7.3. Liability and Risk of Loss. Seller shall remain liable for all of its obligations and liabilities, costs and expenses, fixed or contingent following the Effective Date.

        SECTION 7.4. Procedure for Indemnification: Third Party Claims. Promptly after receipt by an indemnified party under either Section 7.1, or 7.2 of notice of the commencement of any proceeding against it by a third party, such indemnified party will, if a claim is to be made against an indemnifying party under either such Section, give notice to the indemnifying party of the commencement of such claim, but the failure to notify the indemnifying party will not relieve the indemnifying party of any liability that it may have to any indemnified party, except to the extent that the indemnifying party demonstrates that the defense of such action is prejudiced by the indemnified party’s failure to give such notice.

                b. If any proceeding is brought against an indemnified party and it gives notice to the indemnifying party of the commencement of such proceeding, the indemnifying party will be entitled to participate in such proceeding and, to the extent that it wishes (unless (i) the indemnifying party is also a party to such proceeding and the indemnified party determines in good faith that joint representation would be inappropriate, or (ii) the indemnifying party fails to provide reasonable assurance to the indemnified party of its financial capacity to defend such proceeding and provide indemnification with respect to such proceeding), to assume the defense of such proceeding with counsel satisfactory to the indemnified party and, after notice from the indemnifying party to the indemnified party of its election to assume the defense of such

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proceeding, the indemnifying party will not, as long as it diligently conducts such defense, be liable to the indemnified party under this Section 7 for any fees of other counsel or any other expenses with respect to the defense of such proceeding, in each case subsequently incurred by the indemnified party in connection with the defense of such proceeding, other than reasonable costs of investigation. If the indemnifying party assumes the defense of a proceeding, (i) it will be conclusively established for purposes of this Agreement that the claims made in that proceeding are within the scope of and subject to indemnification; (ii) no compromise or settlement of such claims may be effected by the indemni fying party without the indemnified party’s consent unless (a) there is no finding or admission of any violation of legal requirements or any violation of the rights of any person and no effect on any other claims that may be made against the indemnified party, and (b) the sole relief provided is monetary damages that are paid in full by the indemnifying party; and (iii) the indemnified party will have no liability with respect to any compromise or settlement of such claims effected without its consent. If notice is given to an indemnifying party of the commencement of any proceeding and the indemnifying party does not, within ten (10) days after the indemnified party’s n otice is given, give notice to the indemnified party of its election to assume the defense of such proceeding, the indemnifying party will be bound by any determination made in such proceeding or any compromise or settlement effected by the indemnified party.

                c. Notwithstanding the foregoing, if an indemnified party determines in good faith that there is a reasonable probability that a proceeding may adversely affect it or its affiliates other than as a result of monetary damages for which it would be entitled to indemnification under this Agreement, the indemnified party may, by notice to the indemnifying party, assume the exclusive right to defend, compromise, or settle such proceeding, but the indemnifying party will not be bound by any determination of a proceeding so defended or any compromise or settlement effected without its consent (which may not be unreasonably withheld).

ARTICLE 8.
MISCELLANEOUS

        SECTION 8.1. Notice. Whenever notice must be given under the provisions of this Agreement, such notice must be in writing and addressed to the parties at their respective addresses set forth below and shall be deemed to have been duly given if delivered by (a) hand-delivery (with written confirmation of receipt); (b) facsimile (with written confirmation of receipt), provided that a copy is delivered by one of the other methods authorized in this Section; or (c) by commercial overnight delivery service, as follows:

If to Seller:	ProxyMed, Inc.
	1854 Shackleford Court
	Suite 200
	Norcross, GA
	Attention: General Counsel
	Telephone:  (404) 770-4803
	Facsimile:  (404) 877-3385

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If to Buyer:	5971 Kingstowne Village Parkway
	Suite 200
	Alexandria, VA 22315
	Attention:  Paul L. Uhrig, Esq.
	Facsimile:  (703) 921-2161

        Notices shall be deemed given upon the earliest to occur of (i) receipt by the party to whom such notice is directed, if hand delivered; (ii) if sent by facsimile machine, on the day (other than a Saturday, Sunday or legal holiday in the jurisdiction to which such notice is directed) such notice is sent if sent (as evidenced by the facsimile confirmed receipt) prior to 5:00 p.m. Pacific Time and, if sent after 5:00 p.m. Pacific Time, on the day (other than a Saturday, Sunday or legal holiday in the jurisdiction to which such notice is directed) after which such notice is sent; or (iii) on the first business day (other than a Saturda y, Sunday or legal holiday in the jurisdiction to which such notice is directed) following the day the same is deposited with the commercial carrier if sent by commercial overnight delivery service. Each party, by notice duly given in accordance therewith may specify a different address for the giving of any notice hereunder.

        SECTION 8.2. Survival of Provisions. All warranties, representations, hold harmless and indemnity obligations and restrictions made, undertaken and agreed to by the parties under this Agreement shall survive the Closing.

        SECTION 8.3. Amendment. No modification, waiver, amendment, discharge, or change of this Agreement shall be valid unless in writing and signed by the party against whom enforcement of such modification, waiver, amendment, discharge or change is sought; provided any party may change their own address as set forth in Section 8.1 hereof by unilateral written notice to the other parties hereto.

        SECTION 8.4. Assignment.This Agreement shall not be assignable by any party without the prior written consent of the others. Except as noted above, no other person or corporate entity shall acquire or have any rights under or by virtue of this Agreement.

        SECTION 8.5. Severability.If any one or more of the provisions of this Agreement should be ruled wholly or partly invalid or unenforceable by a court or other government body of competent jurisdiction, then: (a) the validity and enforceability of all provisions of this Agreement not ruled to be invalid or unenforceable shall be unaffected; (b) the effect of the ruling shall be limited to the jurisdiction of the court or other government body making the ruling; (c) the provision(s) held wholly or partly invalid or unenforceable shall be deemed amended, and the court or other government body is authorized to reform the provision(s), to the minimum extent necessary to render them valid and enforceable in conformity with the parties’intent as manifested herein and a provision having a similar economic effect shall be substituted; and (d) if the ruling and/or the controlling principle of law or equity leading to the ruling, is subsequently overruled, modified or amended by legislative, judicial or administrative action, the provision(s) in question as originally set forth in this Agreement shall be deemed valid and enforceable to the maximum extent permitted by the new controlling principle of law or equity.

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        SECTION 8.6. Choice of Law.The interpretation of this Agreement and the rights and obligations of the parties hereunder shall be governed by the laws of the Commonwealth of Virginia, without regard to choice of law provisions.

        SECTION 8.7. Binding Nature.The provisions, covenants, and agreements herein contained shall inure to the benefit of, and be binding upon, the parties hereto and each of their respective legal representatives, successors and permitted assigns.

        SECTION 8.8. Headings.All headings contained in this Agreement are for reference purposes only and are not intended to affect in any way the meaning or interpretation of this Agreement. All words used in this Agreement shall be construed to be of such gender and number as the circumstances require.

        SECTION 8.9. Counterparts. This Agreement may be executed in one or more counterparts, each of which shall be deemed an original, but all of which collectively shall constitute one and the same agreement.

        SECTION 8.10. Expenses. Each of the parties shall bear its own expenses in connection with this Agreement.

        SECTION 8.11. Waiver. The waiver by any party of a breach or violation of any provision of this Agreement shall not operate or be construed as a waiver of any subsequent breach of such provision or any other provision of this Agreement.

        SECTION 8.12. Construction. This Agreement shall not be construed more strictly against any party hereto by virtue of the fact that the Agreement may have been drafted or prepared by such party or its counsel, it being recognized that all of the parties hereto have contributed substantially and materially to its preparation and that this Agreement has been the subject of and is the product of negotiations between the parties.

        SECTION 8.13. Cumulative Remedies. Any right, power, or remedy provided under this Agreement to any party hereto shall be cumulative and in addition to any other right, power, or remedy provided under this Agreement now or hereafter existing at law or in equity, and may be exercised singularly or concurrently.

        SECTION 8.14. Attorneys’ Fees. Each party shall bear its own attorney’s fees, expenses and any costs associated with any dispute or litigation arising from or related to this Agreement

        SECTION 8.15. Arbitration. In the event of a dispute between the parties arising from or relating to this Agreement, including, but not limited to, construction, interpretation, implementation or enforcement of this Agreement or the performance or breach of any provision in this Agreement, the parties shall meet and confer in good faith to resolve such dispute. In the event such efforts do not resolve the dispute within fifteen (15) days from the date the dispute arises, either party may demand arbitration, within one (1) year after the date the dispute arises, by the American Arbitration Association, before three (3) arbitrators, under its Commercial Arbitration Rules existing as of the Effec tive Date, such arbitration to be final, conclusive and binding. The arbitrators shall have no authority to award punitive or exemplary damages or

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attorneys’ fees. Judgment on the award rendered by the arbitrator may be entered by any court having proper jurisdiction. The arbitrators shall base their award on the terms of this Agreement, and they will endeavor to follow the law and judicial precedents which a United States District judge sitting in the District of the District of Columbia would apply in the event the dispute was litigated in such court. The arbitrators shall render the award in writing and, unless both parties agree otherwise, shall include an explanation of the reasons for their award, the findings of fact and conclusions of law upon which their award is based. Notwithstanding the foregoing, any party may seek or assert entitlement to injunctive relief or specific performance in court as an initial matter and s hall have no prior obligation to establish in arbitration the entitlement to injunctive relief or specific performance.

        SECTION 8.16. Entire Agreement. This Agreement supersedes all prior agreements between the parties with respect to its subject matter (including all term sheets and letters of intent exchanged by the parties), and constitutes (along with the documents referred to in this Agreement) a complete and exclusive statement of the terms of the agreement among the parties with respect to its subject matter.

[Remainder of Page Intentionally Left Blank]

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        IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed by their respective duly authorized officers as of the date first above written.

SURESCRIPTS, LLC
By:	/s/ Kevin Hutchinson
	Signature
	Kevin Hutchinson
	Print Name
Its:	President & CEO
	Title
PROXYMED, INC., D/B/A
MEDAVANT HEALTHCARE
SOLUTIONS, INC.
By:	/s/ Peter Fleming
	Signature
	Peter Fleming
	Print Name
Its:	General Counsel
	Title

Signature Page to Purchase Agreement

EXHIBIT A

LIST OF SURESCRIPTS PHARMACIES

The following table represents those pharmacies, Certified Pharmacy Aggregators, and Certified VARs with contractual commitments to the Pharmacy Health Information Exchange.

Organization

Abacus Systems 

CarePoint 

RxLinc (Computer-Rx) 

eRx Network, LLC (PDX customers only) 

HealthCare Computer Corporation (Synercom, AlphaPC, and Visual Pharmacy)

McKesson Corporation 

Micro Merchant 

PerSe* 

QS/1 Data Systems (RxCarePlus, CRX, and NRX)

Albertson’s, Inc. 

CVS Corporation 

Wal*Mart Stores, Inc. 

*PerSe has contracts with pharmacy organizations utilizing PerSe software products including but not limited to Condor, EnterpriseRx, PharmacyRx, and Zadall. In addition, PerSe has contracts with organizations, including, but not limited to, the following:

Best Computer Systems
Brooks
Brookshire Grocery Co.
Community Distributors
CompuSolve
DataDoc
Datascan

Discount Drug Mart
Eckerds (Brooks)
EnterpriseRx
Etreby
Foundation Systems
Giant Eagle
Giant Foods
Haggens
Health Business Systems
HEB
Hy-Vee
ISM
JasCorp
Kerr Drug
Kinney Drugs
Kroger Company, The
Lewis
Longs
Marc’s
Medicine Shoppe International, Inc.
Midco
NeighborCare
Opus-ISM
Pacific Pharmacy Computers
PharmacyRx
Pharmacy Solutions
Price Chopper (Golub)
Raleys
Rite-Aid
Sav-Mor Franchising, Inc.
Shaws
Stop & Shop
Transaction Data Systems
TOPS
Ukrops
USADrug
Walgreens

EXHIBIT B

PHARMACY CONTRACTS

1. Walgreens

2. Rite-Aide

3. CareMark

4. Medco

5. e-Rx

6. SureScritps

7. WalMart

8. QS1

EXHIBIT C

PRESCRIBER CONTRACTS

1.	Medical Manger (Emdeon Business Services)
2.	Availty
3.	Imedica
4.	Iscribe/CareMark
5.	Misys
6.	e-Rx

EXHIBIT D

ESCROW AGREEMENT

(See attached.)

EXHIBIT E

NONCOMPETITION AGREEMENT

(See attached.)

EXHIBIT F

SELLER DISCLOSURE SCHEDULE

None

EXHIBIT G

SELLER DISCLOSURE SCHEUDLE

None

EXHIBIT G

TALKING POINTS

        The pharmacy business was MedAvant’s smallest business line and it did not complement their business strategy. This sell allows MedAvant to now focus on its key business lines.

        The divestiture was a small but important step in simplifying MedAvant’s business structure and focusing on their core business lines, which hold the best opportunity for future growth.

        The sell allows MedAvant to focus on its core strategy of leveraging their Phoenix and Pilot technologies and well as their national PPO in order to build upon a strong market presence in their core business lines.

EX-10.45

EXHIBIT 10.45

ESCROW AGREEMENT
BY AND AMONG
SURESCRIPTS, LLC,
PROXYMED, INC.,
AND
SUNTRUST BANK

        THIS ESCROW AGREEMENT (this “Agreement”), dated as of April 30, 2007, is made by and among SureScripts, LLC, a limited liability company duly organized and validly existing under the laws of the Commonwealth of Virginia (“Buyer”), ProxyMed, Inc. d/b/a MedAvant Healthcare Solutions, a corporation duly organized and validly existing under the laws of the State of Florida (“Seller”), and SunTrust Bank, a Georgia Banking corporation (the “Escrow Agent” and, together with Buyer and Seller, the “Parties”).

        WHEREAS, Buyer and Seller have entered into that certain Purchase Agreement, dated as of the date hereof, a copy of which is attached hereto (the “Purchase Agreement”); and

        WHEREAS, the Purchase Agreement contemplates that Buyer and Seller will enter into this Agreement in connection with the payment of one hundred thousand dollars ($100,000) of the Purchase Price to Seller.

        NOW, THEREFORE, in consideration of the premises and covenants as set forth herein, and subject to the representations, warranties, and conditions contained herein, the Parties agree as follows:

        Section 1. Recitals. The foregoing recitals are restated and incorporated into this Agreement as fully as if set forth herein.

        Section 2. Purchase Agreement. Undefined capitalized terms used herein are defined in the Purchase Agreement. Except for referring to definitions of certain undefined capitalized terms herein, the Escrow Agent is not charged with any duties or responsibilities under the Purchase Agreement.

        Section 3. Escrow Fund.

        3.1 Escrow Deposit. Upon execution of this Agreement and the Purchase Agreement, Buyer shall deposit with Escrow Agent one hundred thousand dollars ($100,000) (the “Escrow Deposit”) into SunTrust Bank, ABA: 061000104, Account: 9443001321, Account Name: Corporate Agency Services, Reference: SureScripts/ProxyMed – 7920801, Attention: Emily J. Hare (804) 782-5400. The term “Escrow Fund” means the Escrow Deposit and all accumulated interest thereon. Escrow Agent hereby agrees to act as escrow agent and to hold, safeguard, and disburse the Escrow Fund pursuant to the t erms and conditions hereof.

        3.2 Tax Liability. Any tax liability attributable to the payment of any amount payable to either party with respect to the Escrow Fund will be the responsibility of the Party receiving the distribution from the Escrow Fund. Buyer and Seller, jointly and severally, agree to indemnify and hold the Escrow Agent harmless from and against any liability on account of

taxes to which the Escrow Agent may be or becomes subject in connection with, or that arises out of, this Escrow Agreement, including costs and expenses (including reasonable legal and experts’ fees and expenses), interest, and penalties, other than any taxes payable by the Escrow Agent due to the payment to it of the Escrow Agent fees as contemplated herein.

        Section 4. Escrow Period and Distribution Upon Termination.

        4.1 The Escrow Fund will remain in existence from the date hereof until October 29, 2007, unless terminated or extended as provided for hereunder.

        4.2 Unless Buyer provides a Buyer Non-Compliance Notice pursuant to Section 4.4, prior to the close of business on October 29, 2007, Escrow Agent shall distribute to Seller the Escrow Deposit (i.e., one hundred thousand dollars ($100,000)).

        4.3 Buyer may deliver to Escrow Agent at any time prior to October 29, 2007, written authorization to distribute to Seller the Escrow Deposit (i.e., one hundred thousand dollars ($100,000)), in which case Escrow Agent shall, as soon as reasonably possible after receipt of such notice, distribute to Seller the Escrow Deposit (i.e., one hundred thousand dollars ($100,000)).

        4.4 Buyer may, by written notice delivered to Escrow Agent and Seller on or before the close of business on October 29, 2007, direct the Escrow Agent to retain beyond such date the Escrow Fund because, in Buyer’s reasonable judgment, the conditions set forth in Section 1.5(b) of the Purchase Agreement have not been satisfied (a “Buyer Non-Compliance Notice”). In the event that Buyer delivers to Escrow Agent a Buyer Non-Compliance Notice, Escrow Agent shall deliver to Buyer all funds in the Escrow Fund on the fifteenth (15^th) day after receipt of such Buyer Non-Compliance Notice, unless Seller shall provide written notice to Escrow Agent and Buyer that it disputes in good faith the Buyer Non-Compliance Notice (a “Dispute Notice”). If Seller gives such a Dispute Notice, Escrow Agent will not transfer, deliver, or assign to Buyer any of the Escrow Funds under this Section 4.4 until either (a) it receives the written consent of Seller or (b) there is a final decision under Section 5 and Escrow Agent receives the written notice of such decision, including directions as to the disposition of the Escrow Fund, under Section 5.

        4.5 In no event shall Seller be entitled to more than the Escrow Deposit (i.e., one hundred thousand dollars ($100,000)). Any amounts in the Escrow Fund in excess of Escrow Deposit shall be delivered to Buyer at the same time that the Escrow Deposit is distributed to Seller.

        Section 5. Dispute Resolution. All disputes arising under this Agreement (“Disputes”) will be resolved in accordance with the procedures set forth in Section 8.11 hereof. Upon resolution of a Dispute under such Section 8.11, Buyer and Seller will cause the written determination of the resolution contemplated by such section to be delivered to Escrow Agent promptly.

        Section 6. Investment of Escrow Deposit. Escrow Agent will invest the Escrow Deposit in the STI Classic US Treasury Money Market Fund.

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       Section 7. Escrow Agent’s Provisions.

       7.1 Limitation on Escrow Agent’s Liability. In performing any of its duties under this Agreement, Escrow Agent will not be liable to any Party for damages, except in the event of gross negligence or willful misconduct on Escrow Agent’s part. Escrow Agent will not incur any liability for (a) any act or failure to act made or omitted in good faith or (b) any action taken or omitted in reliance upon any instrument, including any written statement or affidavit provided for in this Escrow Agreement, that Escrow Agent in good faith believes to be genuine, nor will Escrow Agent be liable or responsible for forgeries, fraud, impersonations, or determining the scope of any agen t’s authority. In addition, Escrow Agent may consult with legal counsel in connection with its duties under this Agreement and will be fully protected in any act taken, suffered, or permitted by it in good faith in accordance with the advice of counsel. Escrow Agent is not responsible for determining and verifying the authority of any person acting or purporting to act on behalf of any Party.

       7.2 Indemnification of Escrow Agent. Buyer and Seller, and their respective successors and assigns, agree jointly and severally to indemnify and hold Escrow Agent harmless against any and all losses, claims, damages, liabilities, and expenses, including reasonable costs of investigation and counsel fees (including allocated costs of in-house counsel) and disbursements, that may be imposed on Escrow Agent or incurred by Escrow Agent in connection with the performance of its duties under this Agreement, including those arising from any lawsuit, claim, or action initiated in connection with this Escrow Agreement or involving its subject matter, but excluding those arising from Escrow Agent’ s willful default or gross negligence.

       7.3 Right of Interpleader. Should any controversy arise involving the Parties or any of them or any other person with respect to this Escrow Agreement or the Escrow Fund, or should a substitute escrow agent fail to be designated as provided in Section 7.5 below, or if Escrow Agent should be in doubt as to what action to take, Escrow Agent will have the right, but not the obligation, either to (a) withhold delivery of the Escrow Deposit until the controversy is resolved, the conflicting demands are withdrawn, or its doubt is resolved or (b) institute a petition for interpleader in any court of competent jurisdiction to determine the rights of Buyer and Seller. If the Escrow Agent is a party to any dispute, Escrow Agent will have the additional right to refer such controversy to binding arbitration to be conducted in accordance with Sections 5 and 8.11. Escrow Agent is also authorized to deposit with the clerk of the court all documents and Escrow Deposit held in escrow. Upon initiating such action, Escrow Agent will be fully released and discharged of and from all obligations and liability imposed by this Agreement.

        7.4 Escrow Agent Fees. Reasonable fees and expenses for the services Escrow Agent renders pursuant to this Agreement (including reasonable fees and disbursements of its counsel incurred in connection with its performance of such services) will be paid to Escrow Agent. Seller will pay such fees and expenses. Escrow Agent’s fee schedule is set forth on Exhibit A.

        7.5 Successor Escrow Agent. The Escrow Agent, or any successor to it hereafter appointed, may at any time resign by giving thirty (30) days notice in writing to Buyer and Seller and will be discharged of its duties hereunder upon the appointment of a successor Escrow Agent

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as hereinafter provided. Upon any such resignation, Buyer and Seller will appoint a successor Escrow Agent, which will be a bank or trust company organized under the laws of the United States of America or any state thereof and having a combined capital and surplus of not less than US$1 billion. Any such successor Escrow Agent will deliver to Buyer and Seller a written instrument accepting such appointment hereunder, and thereupon it will succeed to all the rights and duties of Escrow Agent hereunder and will be entitled to receive the Escrow Fund.

        Section 8. Miscellaneous.

        8.1 Assignment; Successors and Assigns. This Agreement shall not be assignable by any Party without the prior written consent of the others. This Agreement shall be binding upon the Parties and their respective successors, assigns, heirs, transferees, executors, and administrators.

        8.2 Cumulative Remedies. Each right, power, and remedy of any Party provided for in this Agreement or now or hereafter existing at law or in equity or by statute or otherwise shall be distinct, cumulative, and concurrent, and shall be in addition to every other such right, power, or remedy. The exercise or beginning of the exercise by any Party of any one or more of the rights, powers, or remedies provided for in this Agreement or now or hereafter existing at law or in equity or by statute or otherwise shall not preclude the simultaneous or later exercise by such Party of all such other rights, powers or remedies, and no failure or delay on the part of such Party to exercise any such ri ght, power or remedy shall operate as a waiver thereof.

        8.3 Further Assurances. The provisions of this Agreement shall be self-operative and shall not require further agreement by the Parties except as may be herein specifically provided to the contrary; provided, however, at the reasonable request of any Party, the other Parties shall execute such additional instruments and take such additional acts as the requesting Party may deem necessary to effectuate this Agreement.

        8.4 Notice. Whenever notice must be given under the provisions of this Agreement, such notice must be in writing and addressed to the Parties at their respective addresses set forth below and shall be deemed to have been duly given if delivered by (a) hand-delivery (with written confirmation of receipt); (b) facsimile (with written confirmation of receipt), provided that a copy is delivered by one of the other methods authorized in this Section; or (c) by commercial overnight delivery service, as follows:

If to Seller:	ProxyMed, Inc.
	1854 Shackleford Court
	Suite 200
	Norcross, GA
	Attention: General Counsel
	Telephone:  (404) 770-4803
	Facsimile:  (404) 877-3385

4

If to Buyer:	SureScripts, LLC
	5971 Kingstowne Village Parkway
	Suite 200
	Alexandria, VA 22315
	Attention: Paul L. Uhrig, Esq.
	Phone: (703) 921-2179
	Facsimile: (703) 921-2161

If to Escrow Agent:
	SunTrust Bank
	Corporate Agency Services
	919 East Main Street, 10th Floor
	Richmond, VA 23219
	Attn: Emily J. Hare
	Telephone:  (804) 782-5400
	Facsimile:  (804) 782-7855

Notices shall be deemed given upon the earliest to occur of (i) receipt by the Party to whom such notice is directed, if hand delivered; (ii) if sent by facsimile machine, on the day (other than a Saturday, Sunday, or legal holiday in the jurisdiction to which such notice is directed) such notice is sent if sent (as evidenced by the facsimile confirmed receipt) prior to 5:00 p.m. Eastern Time and, if sent after 5:00 p.m. Eastern Time, on the day (other than a Saturday, Sunday, or legal holiday in the jurisdiction to which such notice is directed) after which such notice is sent; or (iii) on the first business day (other than a Saturday, Sunday, or legal holiday in the jurisdiction to which such notice is directed) following the day the same is deposited with the commercial carrier if sent by commercial overnight delivery service. Any Party, by notice duly given in accordance therewith to the other Parties hereto may specify a different address for the giving of any notice hereunder.

        8.5 Severability. If any one or more of the provisions of this Agreement should be ruled wholly or partly invalid or unenforceable by a court or other government body of competent jurisdiction, then: (i) the validity and enforceability of all provisions of this Agreement not ruled to be invalid or unenforceable shall be unaffected; (ii) the effect of the ruling shall be limited to the jurisdiction of the court or other government body making the ruling; (iii) the provision(s) held wholly or partly invalid or unenforceable shall be deemed amended, and the court or other government body is authorized to reform the provision(s), to the minimum extent necessary to render them valid and enfo rceable in conformity with the Parties’ intent as manifested herein and a provision having a similar economic effect shall be substituted; and (iv) if the ruling and/or the controlling principle of law or equity leading to the ruling, is subsequently overruled, modified or amended by legislative, judicial or administrative action, the provision(s) in question as originally set forth in this Agreement shall be deemed valid and enforceable to the maximum extent permitted by the new controlling principle of law or equity.

        8.6 Amendment. No modification, waiver, amendment, discharge, or change of this Agreement shall be valid unless in writing and signed by the Party or Parties against whom enforcement of such modification, waiver, amendment, discharge, or change is sought.

5

        8.7 Choice of Law. The construction, interpretation, and enforcement of this Agreement shall at all times and in all respects be governed by the laws of the Commonwealth of Virginia, without reference to Virginia’s choice of law or conflict of law provisions or principles.

        8.8 Counterparts. This Agreement may be executed in one or more counterparts, each of which shall be deemed an original, but all of which collectively shall constitute one and the same agreement.

        8.9 Waiver. The waiver by any Party of a breach or violation of any provision of this Agreement shall not operate or be construed as a waiver of any subsequent breach of such provision or any other provision of this Agreement.

        8.10 Headings; Gender; Number. The headings in this Agreement are intended solely for convenience of reference and shall be given no effect in the construction or interpretation of this Agreement. All words used in this Agreement shall be construed to be of such gender and number as the circumstances require.

        8.11 Arbitration. In the event of a dispute among any of the Parties arising from or relating to this Agreement, including, but not limited to, construction, interpretation, implementation, or enforcement of this Agreement or the validity, performance, or breach of any provision in this Agreement, the applicable Parties shall meet and confer in good faith to resolve such dispute. In the event such efforts do not resolve the dispute within fifteen (15) days from the date the of receipt by a Party of written notice of a dispute, a Party may demand arbitration by the American Arbitration Association (“AAA”), under its Commercial Arbitration Rules th en in effect, such arbitration to be final, conclusive, and binding. Judgment on the award rendered by the arbitrators may be entered by any court having jurisdiction. There shall be three (3) neutral and impartial arbitrators, of whom Seller shall appoint one and Buyer shall appoint another, both within thirty (30) days of the receipt by the respondent of the demand for arbitration. The two arbitrators so appointed shall select the third arbitrator, who shall serve as the chair of the arbitral tribunal, within thirty (30) days of the appointment of the second arbitrator. If any arbitrator is not appointed within the time limit provided herein, such arbitrator shall be appointed by the AAA in accordance with the listing, striking, and ranking procedure in the rules of the AAA. Any arbitrator appo inted by the AAA shall be a retired judge or a practicing attorney with no less than fifteen years of experience with large commercial cases and an experienced arbitrator. The arbitrators shall base their award on the terms of this Agreement, and they will follow the law of the Commonwealth of Virginia. The arbitral tribunal is not empowered to award damages in excess of compensatory damages, and the Parties hereby irrevocably waive any right to recover punitive, exemplary or similar damages with respect to any dispute. The arbitrators shall render the award in writing and, unless the Parties agree otherwise, shall include an explanation of the reasons for the award and the findings of fact and conclusions of law upon which the award is based. Notwithstanding the foregoing, by agreeing to arbitra tion, the Parties do not intend to deprive any court of its jurisdiction to issue a pre-arbitral injunction, pre-arbitral attachment, or other order in aid of arbitration proceedings and the enforcement of any award. Without prejudice to such provisional remedies as may be available under the jurisdiction of a court, the arbitrators shall have full authority to grant provisional remedies and to direct the Parties to request that any court modify or vacate any

6

temporary or preliminary relief issued by such court, and to award damages for the failure of the Parties to respect the arbitrators' orders to that effect.

        8.12 Attorney’s Fees. In the event that any Party breaches any of its obligations pursuant to this Agreement, the non-breaching Party(ies) shall be entitled to recover from the breaching Party(ies), in addition to any and all other remedies, its reasonable attorney’s fees, expenses, and costs which it incurs in enforcing its rights hereunder.

        8.13 Construction. This Agreement shall not be construed more strictly against any Party hereto merely by the virtue of the fact that the Agreement may have been drafted or prepared by such party or its counsel, it being recognized that each of the Parties hereto have contributed substantially and materially to its preparation and that this Agreement has been the subject of negotiations between the Parties and as a product of that negotiation.

        8.14 Entire Agreement. This Agreement supersedes all prior agreements between the Parties with respect to its subject matter and constitutes (along with the schedules, attachments, exhibits, and/or other documents referred to in this Agreement) a complete and exclusive statement of the terms of the agreement between the parties with respect to its subject matter. All schedules and exhibits attached hereto are part of the Agreement and are fully incorporated herein with the same effect as if such schedules and exhibits were restated in their entirety in the body of the Agreement.

[Remainder of Page Intentionally Left Blank]

7

        IN WITNESS WHEREOF, the Parties have executed this Agreement as of the date first above written.

SURESCRIPTS, LLC 

/s/ Kevin Hutchinson__________________ 

Signature 

Kevin Hutchinson____________________ 

Print Name 

President & CEO_____________________ 

Office or Title 

April 30, 2007_______________________ 

Date 

PROXYMED, INC. 

/s/ Peter Fleming_____________________ 

Signature 

Peter Fleming________________________ 

Print Name 

General Counsel______________________ 

Office or Title 

SUNTRUST BANK 

/s/ Emily J. Hare______________________ 

Signature 

Emily J. Hare________________________ 

Print Name 

Vice-President_______________________ 

Office or Title 

April 30, 2007_______________________ 

Date 

EXHIBIT A
Escrow Agent’s Fee Schedule

Escrow Administration Fee  $ 1,500.00 * 

* This fee is based on the investment of Escrow Funds in the STI Classic US Treasury Money Market Fund.

EX-10.46

EXHIBIT 10.46

NONCOMPETITION AGREEMENT

        THIS NONCOMPETITION AGREEMENT (this “Agreement”), is made and entered into as of this 30th day of April, 2007, by and between ProxyMed, Inc. d/b/a MedAvant Healthcare Solutions, a corporation duly organized and validly existing under the laws of the State of Florida (“Seller”), and SureScripts, LLC, a limited liability company duly organized and validly existing under the laws of the Commonwealth of Virginia (“Buyer”).

        WHEREAS, Seller and Buyer have entered into that certain Purchase Agreement, dated as of April 30, 2007 (the “Purchase Agreement”) whereby Buyer has agreed to purchase the Pharmacy Processing Business of Seller, all as set forth in such Purchase Agreement;

        WHEREAS, as a material part of the benefit of the bargain and as an inducement to Buyer, without which Buyer would not enter into the Purchase Agreement, Seller has promised and agreed to abide by the covenants and promises set forth in this Agreement; and

        WHEREAS, Buyer would not enter into the Purchase Agreement or pay to Seller any of the proposed purchase price pursuant to the Purchase Agreement without Seller agreeing to abide by the restrictions set forth in this Agreement.

        NOW, THEREFORE, in consideration of the foregoing, the mutual promises hereinafter set forth, and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereto promise and agree as follows:

        1. Incorporation of Recitals; Definitions; Acknowledgments.

        (a) The foregoing recitals are restated and incorporated herein by reference and made a part hereof. All capitalized terms used herein but not otherwise defined herein shall have the meaning ascribed to them in the Purchase Agreement.

        (b) Seller acknowledges that: (i) the Restricted Activity (as defined below) is intensely competitive; (ii) Seller has knowledge of Seller Confidential Information (defined below) associated with the sale of the Pharmacy Processing Business; (iii) the disclosure by Seller of any such Seller Confidential Information to competitors of Buyer may place Buyer at a competitive disadvantage and may do damage, monetary or otherwise, to Buyer; (iv) the engagement by Seller, or by any party at any time during the Restricted Period controlling, controlled by, or under common control with Seller (each a “Seller Party”) in any of the activities prohibited by Sections 2 or 7 hereof would constitute a bre ach of this Agreement and may constitute improper appropriation and/or use of such Seller Confidential Information; (v) Seller has been advised by counsel in connection with its entering into this Agreement; and (vi) the noncompetition and other restrictive covenants and agreements set forth in this Agreement are reasonable.

        (c) As used herein, “Seller Confidential Information” shall mean non-public information of Seller owned and/or known by Seller related to the Pharmacy Processing Business being purchased by Buyer pursuant to the Purchase Agreement. “Seller Confidential Information” shall not include any information (i) that is generally known or becomes known to

the public other than as a result of disclosure by Seller in breach of this Agreement; (ii) was or becomes available to others on a non-confidential basis from a source other than Seller; or (iii) is disclosed with the prior written approval of Buyer.

        2. Noncompetition and Nonsolicitation. Except as otherwise specifically permitted in this Agreement and the Purchase Agreement, from the date hereof until April 30, 2012 (the “Restricted Period”), Seller and each and every Seller Party shall not, directly or indirectly, in the United States or any territory of the United States:

        (a) (i) own, (ii) operate, (iii) manage, (iv) lease, (v) control, and/or (vi) render services (including consulting services) (the restriction related to services shall be limited to services related to Electronic Prescribing Transactions) to, be an investor in, or be a lender to, any person, entity, or business that owns, operates, manages, leases, or controls:

                an electronic network that establishes, facilitates, and/or maintains connectivity between and among providers, pharmacies, and/or pharmacy benefit management companies for the purpose of processing, routing, delivering, and/or exchanging Electronic Prescribing Transactions (as defined below) (all of subsection (a) to be referred to herein as the “Restricted Activity”);

        (b) intentionally interfere with, disrupt, or attempt to disrupt any current contractual relationship between Buyer and any customer, supplier, or employee of Buyer; or

        (c) employ, hire, or solicit for employment, or attempt to employ, hire, or solicit for employment, any person employed by Buyer as of the date hereof or during the Restricted Period, or induce or attempt to induce, directly or indirectly, any person employed by Buyer as of the date hereof or during the Restricted Period, to terminate his or her employment with Buyer.

        For purposes of this Agreement, Electronic Prescribing Transactions is defined as electronic prescribing messages (including, but not limited to, new prescriptions, refill requests, refill responses, stop orders), formulary and/or eligibility messages related to prescription claims, and patient identifiable medication history as derived from electronic prescribing messages, formulary and/or eligibility messages, and/or the dispensed history data bases of pharmacies, whether through true electronic data interchange or facsimile.

        3. Exceptions. Notwithstanding the foregoing set forth in Section 2, nothing set forth in this Agreement shall prohibit any of the following:

        (a) Seller’s ownership of a passive investment of no more than five percent (5%) in any publicly traded entity that engages in the Restricted Activity; provided, that Seller may own more than five percent (5%) of such company in the event it obtains such interest as a result of a Change of Control (as defined below) pursuant to an arm's length transaction negotiated in good faith not for the purpose of circumventing the intent of this Agreement as it applies to Seller.

2

        (b) Seller’s engagement in general employment solicitation activities to the public at large, including posting or advertising for positions and interviewing and hiring any employee of Buyer that apply for positions as a result of such general postings and advertising.

        (c) Seller hiring any employee of Buyer who (i) resigns voluntarily or (ii) is terminated by Buyer.

        (d) Seller selling its proprietary technology applications to one or more third parties and providing routine maintenance, upgrades, and/or enhancements to such technology applications (so long as such maintenance, upgrades, and/or enhancements are of general applicability, and do not specifically relate or apply to Electronic Prescribing Transactions only).

        4. Extension of Term. In the event a court of competent jurisdiction determines that Seller or any Seller Party has breached any covenant set forth in Section 2, as limited by Section 3, the term of the covenant set forth in Section 2 so breached will be extended as to Seller and each and every Seller Party by the period of the duration of such breach with respect to Seller and each Seller Party.

        5. Enforcement/Remedies. Seller acknowledges and agrees that the geographic area, time periods, subject matter, and all other aspects of the restrictions set forth in Sections 2 and 7 of this Agreement are reasonable and are appropriate for the protection of Buyer’s legitimate property and business interest. In the event that Seller or any Seller Party breaches any such restrictions, Buyer may suffer immediate and irreparable harm and injury for which there may not be an adequate remedy at law, and Buyer will be entitled, in addition to any other remedies or damages available them for such breach, to seek and obtain temporary, preliminary, and permanent injunctive relief, consisten t with, and enforcing the terms of, this Agreement, without posting any bond with respect thereto.

        6. Indemnification. In the event that Seller or any Seller Party breaches any provision of Section 2 or Section 7, Seller shall indemnify and hold harmless Buyer and their respective officers, directors, shareholders, members, and employees for, from and against any and all liabilities, losses, damages, claims, causes of action, costs and expenses (including reasonable attorneys’ fees) incurred by Buyer or Buyer as a result of such breach.

        7. Confidentiality Agreement. During the Restricted Period, Seller and each Seller Party will treat and hold as confidential all of the Seller Confidential Information, and not use it for any purpose. In the event that during the Restricted Period Seller or any Seller Party is called upon to reveal Seller Confidential Information in order to comply with the requirements of law or the lawful orders or process of a court or governmental agency, it shall so notify Buyer in writing upon becoming aware of such request for compliance and, in any event, not less than five (5) days prior to the date for compliance and prior to disclosing of such information. In the event Buyer seeks relief, by way of a protective order or otherwise, Seller or the applicable Seller Party shall cooperate in good faith, but at the sole expense of Buyer, with respect to such effort to obtain relief. If, in the absence of a protective order or the receipt of a waiver hereunder, Seller or the applicable Seller Party is, on the advice of counsel, compelled to disclose any Seller Confidential Information during the Restricted Period to any tribunal or else stand liable for contempt, Seller or the applicable Seller Party may disclose the Seller Confidential Information

3

EX-10.47

EXHIBIT 10.47

Peter E. Fleming, III
General Counsel
1854 Shackleford Ct., Ste. 200
Norcross, GA 30093

April 30, 2007

Ms. Casey Handal
Manager, Automation & Technology Development
Walgreen Co.
200 Wilmot Road
Pharmacy Technology Services, M. S. #3211
Deerfield, Illinois 60015

Dear Ms. Handal,

        Walgreen Co. (“Walgreen” or “you”) and ProxyMed, Inc. d/b/a Medavant Healthcare Solutions (“ProxyMed”, “we” or “our”) are parties to that certain Purchase Agreement, as amended, dated as of June 27, 1997 (the “Agreement”), a copy of which is attached hereto. We plan to enter into a transaction with SureScripts, LLC (the “SureScripts Transaction”), which is scheduled to close on Monday, April 30, 2007. It is a condition precedent to the closing of the SureScripts Transaction that we take action to terminate certain provisions of the Purchase Agreement including, but not limited to, the obligation to pay Walgreen a $10,000,000 penalty set forth in Section 1.5 of the Agreement and any other obligation of ProxyMed to make any further payments Walgreen for any reason, as well as any provision that purports to obligate a successor in interest of ProxyMed to make any such payments.

        To facilitate the SureScripts Transaction and assist us in fulfilling the conditions of our agreement with SureScripts, you have agreed to terminate the Purchase Agreement, specifically including the provisions described above. Therefore, upon the closing of the SureScripts Transaction, the parties hereto agree that the Purchase Agreement shall be terminated, its terms will be of no further force or effect, and neither party shall have any other or further liability to the other under the Agreement.

        Please indicate your agreement with the foregoing by signing below and returning a copy of the signed document to MedAvant at the address set forth above.

Regards,
/s/ Peter E. Fleming, III
Name:	Peter E. Fleming, III
Title:	General Counsel

Acknowledged and Agreed to by:

Walgreen Co.
By:	/s/ R. Bruce Bryant
Name:	R. Bruce Bryant
Title:	Senior Vice President Drug Store Operations

EX-31.1

EXHIBIT 31.1

CERTIFICATION OF CHIEF EXECUTIVE OFFICER PURSUANT TO
EXCHANGE ACT RULES 13a-14(a) AND 15d-14(a), AS ADOPTED PURSUANT TO
SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002

I, John G. Lettko, certify that:

        1. I have reviewed this Quarterly Report on Form 10-Q of ProxyMed, Inc. ;

        2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

        3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

        4. The registrant's other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15(d)-15(f)) for the registrant and have:

     (a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

     (b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

     (c) Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

     (d) Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and

        5. The registrant's other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions):

     (a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

     (b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date: May 10, 2007

/s/ JOHN G. LETTKO
John G. Lettko
Chief Executive Officer

EX-31.2

EXHIBIT 31.2

CERTIFICATION OF CHIEF FINANCIAL OFFICER PURSUANT TO
EXCHANGE ACT RULES 13a-14(a) AND 15d-14(a), AS ADOPTED PURSUANT TO
SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002

I, Gerard M. Hayden, Jr., certify that:

           1. I have reviewed this Quarterly Report on Form 10-Q of ProxyMed, Inc. ;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4. The registrant's other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15(d)-15(f)) for the registrant and have:

     (a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

     (b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

     (c) Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

     (d) Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and

5. The registrant's other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions):

     (a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

     (b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date: May 10, 2007

/s/ GERARD M. HAYDEN, JR.
Gerard M. Hayden, Jr.
Chief Financial Officer

EX-32.1

EXHIBIT 32.1

CERTIFICATION OF CHIEF EXECUTIVE OFFICER PURSUANT TO
18 U.S.C. SECTION 1350,
AS ADOPTED PURSUANT TO
SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

In connection with the Quarterly Report of ProxyMed, Inc. (the “Company”) on Form 10-Q, for the period ending March 31, 2007, as filed with the Securities and Exchange Commission on the date hereof (the “Report”), I, John G. Lettko, Chief Executive Officer of the Company, certify, pursuant to 18 U.S.C. §1350, as adopted pursuant to § 906 of the Sarbanes-Oxley Act of 2002, that:

          (1) The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

          (2) The information contained in the Report fairly presents, in all material respects, the financial condition and result of operations of the Company.

/s/ JOHN G. LETTKO
John G. Lettko
Chief Executive Officer
May 10, 2007

A signed original of this written statement required by Section 906 has been provided to ProxyMed, Inc., and will be retained by ProxyMed, Inc., and furnished to the Securities and Exchange Commission or its staff upon request.

EX-32.2

EXHIBIT 32.2

CERTIFICATION OF CHIEF FINANCIAL OFFICER PURSUANT TO
18 U.S.C. SECTION 1350,
AS ADOPTED PURSUANT TO
SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

In connection with the Quarterly Report of ProxyMed, Inc. (the “Company”) on Form 10-Q, for the period ending March 31, 2007, as filed with the Securities and Exchange Commission on the date hereof (the “Report”), I, Gerard M. Hayden, Jr., Chief Financial Officer of the Company, certify, pursuant to 18 U.S.C. §1350, as adopted pursuant to § 906 of the Sarbanes-Oxley Act of 2002, that:

          (1) The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

          (2) The information contained in the Report fairly presents, in all material respects, the financial condition and result of operations of the Company.

/s/ GERARD M. HAYDEN, JR.
Gerard M. Hayden, Jr.
Chief Financial Officer
May 10, 2007

A signed original of this written statement required by Section 906 has been provided to ProxyMed, Inc., and will be retained by ProxyMed, Inc., and furnished to the Securities and Exchange Commission or its staff upon request.