Healthaxis Board of Directors Declines Latest Ebix Offer

Business Wire, Nov 4, 2008

IRVING, Texas -- Healthaxis Inc. (NASDAQ: HAXS) announced today its response to the most recent revised unsolicited offer by Ebix, Inc. to purchase Healthaxis. The Healthaxis Board of Directors carefully evaluated the Ebix proposal contained in a letter from Ebix dated October 27, 2008, as clarified by Ebix on October 30, 2008. Following receipt of that proposal, the Healthaxis Board of Directors met with its financial and legal advisors and concluded that pursuing this latest proposal from Ebix is not in the best interests of Healthaxis and is not reasonably likely to lead to an offer that is superior to the proposed merger with BPO Management Services, Inc. On November 4, 2008, Healthaxis delivered a letter to Ebix formally declining the Ebix offer and addressing other aspects of Ebix's various offers. The complete text of this letter is as follows:

November 4, 2008

VIA FAX

Mr. Robin Raina
Ebix, Inc.
5 Concourse Pkwy Suite 3200
Atlanta, GA 30328

Mr. Raina:

The purpose of this letter is to convey to you the response from the Healthaxis Board of Directors concerning your most recent proposal as outlined in a press release you issued on October 27, 2008, with information subsequently issued in a separate release on October 30, 2008. Given the background and circumstances surrounding this latest unsolicited public offer from you, the Healthaxis Board of Directors feels compelled to provide you with a detailed response, not only to your current proposal, but also to address many of the public misstatements and misrepresentations that you have made in connection with the various and constantly changing versions of your proposals.

As you know, Healthaxis declined your first two proposals without any dialogue with you because the Board determined that those offers were inferior to the terms of Healthaxis' merger agreement with BPO Management Services, Inc. ("BPOMS" or "BPOM") and were not reasonably likely to lead to a "superior offer," as defined under the terms of the BPOMS merger agreement.

In response to your third proposal dated October 8, 2008, the Healthaxis Board of Directors concluded that it was appropriate to enter into discussions with you because it appeared that your proposal was reasonably likely to lead to a superior offer. On its face that offer, as publicly disseminated by you, would have provided an opportunity for all Healthaxis common and preferred shareholders to elect either cash or Ebix stock; and all of those Healthaxis common and preferred shareholders electing stock, would have had your guarantee of a minimum floor price and a right to "put" the stock back to you at any time within the first year at the guaranteed floor price. In fact, your October 8 proposal made the following representation concerning this aspect of your offer as it applied to all of our common and preferred shareholders:

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In addition, your October 8 proposal included an offer to pay Tak Investments, Inc. a net amount of $2.5 million for the Healthaxis warrants convertible into 3,333,334 shares of Healthaxis common stock. Your letter made the following representation concerning this aspect of your offer:

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Furthermore, your original offer issued on September 23, 2008, contained the following statement:

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As a result, and based on your repeated public statements that Healthaxis shareholders would, in effect, have an ongoing all cash option available to them, on October 9, 2008, the Healthaxis Board of Directors authorized the commencement of discussions with you.

During the course of these conversations and through a review of written correspondence from you, we came to understand that Ebix's offer as expressed in the October 8 letter was being "modified" and no longer represented a cash offer with respect to the holders of a majority of our common stock or the warrant holder. Instead, at that point, contrary to your public statements, what you were actually offering would have required our two largest shareholders (Tak Investments and Lewis Opportunity Fund) and the warrant holder (Tak Investments) to accept an unspecified form of security that could be put back to Ebix at a guaranteed floor price no sooner than the 13th month following a closing, and then only for a period of 30 days. Further, you stated that your position on this point was non-negotiable, and that you absolutely would not consider the guaranteed effective all cash offer you originally used to induce these shareholders and the Board of Directors to spend time discussing the potential merger of our two companies. Faced with these revised terms, and after discussing the modified offer with these two shareholders, the Healthaxis Board of Directors concluded that your modified proposal was no longer reasonably likely to lead to a "superior offer." Accordingly, on October 23, 2008 we provided you with formal written notice that Healthaxis was abandoning any further discussions with Ebix, and that your October 8 proposal, as modified through subsequent conversations and correspondence, was declined. Healthaxis issued a straightforward and courteous release at that time, summarizing its reasons, as further described above, for declining your offer and abandoning discussions with you.