Healthaxis Board of Directors Declines Latest Ebix Offer

Business Wire, Nov 4, 2008

As mentioned earlier, the Board would also like to take this opportunity to clear up some misperceptions that you may have, to point out your prior misrepresentations, and generally correct the record.

Facts Regarding Your Representations Concerning the Valuation and Other Aspects of the BPOMS Transaction

In your various public releases, you have made the following statements:

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All of these statements, of course, ignore the fact that BPOMS has a complex capital structure that includes both common stock and multiple series of preferred stock. An informed assessment of BPOMS' total value cannot be achieved by an analysis that is based solely on the market price of BPOMS' common stock. While the market price for BPOMS' common stock should be, and was, considered, it is necessary to understand both BPOMS' and Healthaxis' entire capital structure, evaluate the enterprise value of both entities, and then analyze the proposed combined company's capital structure to competently assess the value of the BPOMS transaction to our shareholders.

The Healthaxis Board has spent over one year analyzing the company's strategic options and carefully considering various options available to it. We have very carefully studied the valuation of the BPOMS transaction in comparison to other alternative transactions. As discussed in our recently filed preliminary proxy statement, we engaged a respected, independent valuation firm to provide a fairness opinion with respect to the proposed merger with BPOMS. The proxy statement includes a summary of their work and a range of valuations for the combined BPOMS/HAXS company using five different commonly used and well-recognized valuation methodologies, each of which exceeded a value of $57 million, and in some cases by a considerable margin.

While some investors may not understand that the market price of BPOMS' common stock is a poor metric to understand the value of BPOMS, we assume that you do understand the relative significance that various valuation methodologies should be given. I urge you to carefully read the preliminary proxy statement to gain a better understanding of the Board's views regarding the value of BPOMS and the factors it considered, both for and against the BPOMS transaction.

Facts Regarding Your Offers Related to Termination of Warrants

In each of your offers dated October 3 and thereafter, you demand that all outstanding warrants be terminated. As you are well aware, warrants are a contractual obligation that a company cannot unilaterally terminate. Certain warrant holders have agreed to terminate their warrants in the BPOMS transaction, but a number of warrants would remain outstanding. The success of your offers will depend on persuading the holders of outstanding warrants to terminate their contractual rights, which is a factor that lends uncertainty to the probable outcome of your offers.

Facts Regarding Your Inappropriate Communications and Conversations with Healthaxis Shareholders

In your various public releases you have expressly addressed a number of your representations directly to Healthaxis shareholders, and you have acknowledged that you have had numerous conversations with some Healthaxis shareholders. A few of your published statements in this regard are as follows: