Ebix Makes a New Substantially Improved Offer to Acquire HealthAxis

Business Wire, Oct 3, 2008

ATLANTA -- Ebix, Inc. (NASDAQ: EBIX), a leading international developer and supplier of software and e-commerce solutions to the insurance industry, today announced it has sent a new offer to acquire HealthAxis, Inc. (NASDAQ: HAXS), to the HealthAxis Board of Directors today.

The new proposal was outlined in a letter from Robin Raina, Chairman and Chief Executive Officer of Ebix, Inc., to the HealthAxis Board of Directors. Ebix announced that in view of the urgency imposed by the proposed proxy vote on the existing merger proposal from BPO Management Services (OTC Bulletin Board: BPOM), it has decided to disclose the contents of the letter sent to the HealthAxis Board for all the HealthAxis and Ebix investors through this press release.

The letter as sent to the HealthAxis Board of Directors is reproduced below:

October 3, 2008

Board of Directors
C/o John Carradine
HealthAxis Inc.
7301 State Hwy 161
Suite 300
Irving, TX 75039

Dear Members of the Board:

We wrote a letter to you dated 23rd September 2008 proposing a strategic merger between HealthAxis, Inc. and Ebix, Inc. This letter is to follow up on our earlier letter and detail a new proposal that we believe is substantially better than the terms proposed by BPO Management Services (BPOM).

Preamble to our Proposal-

In the last few days, we have done extensive reading of HealthAxis and BPOM's SEC filings, to understand the dynamics of the BPOM Merger proposal with HealthAxis. This research has been complimented by the innumerable number of calls received by us from your shareholders, conveying their understanding and concerns about the proposed merger with BPOM.

Our review of your filings - the relevant 8-Ks, the 10-Qs and the 10-Ks, has brought us to the following conclusions -

* BPOM market capitalization is presently estimated at $1.39 million (stock price of 11 cents) while HealthAxis market capitalization is presently estimated at $3.5 million. As public companies, both HealthAxis and BPOM have the benefit of not having to resort to hypothetical paper valuations since that is precisely what stock prices are meant to do.

* BPOM's proposed reverse merger with HealthAxis will lead to the creation of approximately 50 million common shares (after taking into account all conversion rates as defined in your proposed merger document) with HealthAxis present shareholders getting 20% of those shares - implying an ownership of approximately 10 million Healthaxis common shares

* A proposed merger with BPOM will need to be followed up by a reverse split of the HealthAxis stock, if Healthaxis had to keep itself listed on the NASDAQ markets.

* This would imply that HealthAxis shareholders ownership at best can only be valued at $0.98 million; (HealthAxis share price @ 35 cents) assuming that the reverse split is not accompanied by any further price drops. In reality, merger of a $1.3 million market-capitalized company with a $3.5 million market-capitalized company, can possibly create a combined company with a diluted shareholding and the existing Healthaxis shareholders owning 20% of that diluted shareholding.

* The proposed merger between BPOM and HealthAxis also mandates the authorization and approval of another 3 million shares of common stock, which can only serve to further dilute the present shareholders.

* HealthAxis will need to retain its entire customer base (especially the top three customers) and institute synergistic cuts if it has to turn the company profitable.

Some of the Larger Events that can have a negative effect on the HealthAxis -BPOM merger -

1. As you are already aware, one of your three largest customers who accounted for 17% of your revenues in 2007 (as per your SEC filings) has already signed a contract with Ebix's Employee Benefits Division. With the customer in question moving its business to Ebix over the next few months, it can only have a negative effect on the HealthAxis revenues and net income projections.

2. HealthAxis' market capitalization of $3.5 million is presently more than 2.5 times the $1.3 million market capitalization of BPOM. This fact along with the fact that existing HealthAxis shareholders holding a 2.5 times greater market capitalization than BPOM shareholders will have merely a 20% of ownership in the combined entity, cannot be assuring to a HealthAxis shareholder.

3. Remaining listed on NASDAQ will require a reverse split of HealthAxis stock in a timely fashion. A study of reverse splits in the public markets will reveal to you that reverse splits are typically accompanied by drops in the stock price, another potential factor in the problematic valuation of the proposed merger.

4. The additional 3 million shares of common state to be issued will require SEC registration. From public records, it is apparent that BPOM has been late with its required SEC filings, which implies that the company is likely to not be eligible to use Form S-3 but rather will be restricted to Form S-1, a much lengthier and costly registration process.

Ebix's New Proposal -