Exhibit 10.1


 


AMENDMENT TO AGREEMENT AND PLAN OF
MERGER


 


THIS AMENDING AGREEMENT (“Amending Agreement”)
is made and entered into as of October 21, 2008 among
HealthAxis Inc., a Pennsylvania corporation (“HealthAxis”),
Outsourcing Merger Sub, Inc., a Delaware corporation and wholly owned
subsidiary of HealthAxis (“Merger
Sub”) and BPO Management Services, Inc., a Delaware
corporation (“BPOMS”).
Each of HealthAxis, Merger Sub and BPOMS are sometimes referred to herein as a “Party” or,
collectively, the “Parties”.


 


RECITALS


 


A.    HealthAxis, Merger Sub and BPOMS entered into
an agreement and plan of merger (the “Merger Agreement”) as of September 5,
2008 providing for a merger of Merger Sub into BPOMS and the issuance of shares
of HealthAxis Common Stock and HealthAxis Series B Preferred Stock to the
securityholders of BPOMS.


 


B.    The Parties have agreed to amend certain
provisions of the Merger Agreement, as provided by this Amending Agreement.


 


AGREEMENT


 


IN CONSIDERATION OF the
foregoing and of the mutual covenants and agreements herein contained, the
Parties agree as follows:


 


1.     In this Amending Agreement, all capitalized
terms which are not defined herein shall have the same meanings as set out in
the Merger Agreement.


 


2.     Each of the Exchange Ratios provided for by
the Merger Agreement in respect of each class or series of BPOMS Stock and in
respect of each series of the BPOMS Investor Warrants, BPOMS Non-Investor
Warrants and BPOMS Options indicated below are hereby amended (and remain
subject to adjustment after determination of the Reverse Split and otherwise in
accordance with Section 3.6 of the Merger Agreement) to be the amounts
hereinafter specified (and the definitions of each of the Exchange Ratios in
the Merger Agreement shall be as so specified):


 


	
  Class or
  Series of Stock,

  Warrants or Options

  	
   

  	
  Amended Exchange Ratios

  
	
  BPOMS Common Shares

  	
   

  	
  0.2467 (“Exchange Ratio”)

  
	
  BPOMS Series A Preferred Shares

  	
   

  	
  0.2773 (“Exchange Ratio”)

  
	
  BPOMS Series B Preferred Shares

  	
   

  	
  0.2467 (“Exchange Ratio”)

  
	
  BPOMS Series C Preferred Shares

  	
   

  	
  1.2868 (“Series C Exchange
  Ratio”)

  
	
  BPOMS Series D Preferred Shares

  	
   

  	
  3.9475 (“Series D Exchange
  Ratio”)

  
	
  BPOMS Series D-2 Preferred Shares

  	
   

  	
  3.9475 (“Series D-2 Exchange
  Ratio”)

  
	
  BPOMS Series F Preferred Shares

  	
   

  	
  6.1679 (“Series F Exchange Ratio”)

  
	
  BPOMS Series C Investor Warrant ($0.01)

  	
   

  	
  0.2467 (“Series C Warrant
  Exchange Ratio”)

  
	
  BPOMS Series D Investor Warrant ($0.01)

  	
   

  	
  0.2467 (“Series D Warrant
  Exchange Ratio”)

  
	
  BPOMS Outstanding Investor Warrants

  	
   

  	
  0.2467 (“Exchange Ratio”)

  
	
  BPOMS Non-Investor Warrants

  	
   

  	
  0.2467 (“Exchange Ratio”)

  
	
  BPOMS Options

  	
   

  	
  0.2467 (“Exchange Ratio”)

  



 


3.     Paragraph 9.1(h) of the Merger
Agreement is hereby amended by changing the Termination Date from December 31,
2008 to January 31, 2009.


 


4.     Paragraph 9.3(c) of the Merger
Agreement is hereby deleted and replaced with the following:


 


“HealthAxis shall pay BPOMS a termination fee of
$500,000 upon (i) termination of this Agreement by BPOMS pursuant to Section 9.1(d) at
any time, or (ii) termination of this Agreement by BPOMS or HealthAxis
pursuant to Section 9.1(f) at any time prior to October 27,
2008. HealthAxis shall pay BPOMS a termination fee of $1,000,000: (x) upon


 

















 


termination of this Agreement by BPOMS or HealthAxis
pursuant to Section 9.1(f) at any time on or after October 27,
2008, or (y) in the event that HealthAxis terminates this Agreement
pursuant to Section 9.1(h) and, prior to the Termination Date,
HealthAxis has received an Acquisition Proposal from another Person and
HealthAxis then completes an Acquisition Transaction with that Person or any
affiliate thereof at any time on or before December 31, 2009.”


 


5.     Paragraph 9.3(d) of the Merger
Agreement is hereby deleted and replaced with the following:


 


“BPOMS shall pay HealthAxis a termination fee of
$500,000 upon (i) termination of this Agreement by HealthAxis pursuant to Section 9.1(c) at
any time, or (ii) termination of this Agreement by HealthAxis or BPOMS
pursuant to Section 9.1(g) at any time prior to October 27,
2008. BPOMS shall pay HealthAxis a termination fee of $1,000,000 upon
termination of this Agreement by HealthAxis or BPOMS pursuant to Section 9.1(g) at
any time on or after October 27, 2008.”


 


6.     All numerical references in the Merger
Agreement to the number of BPOMS Series A Preferred Shares authorized or
issued and outstanding shall be deemed to be 1,608,612.


 


7.     All numerical references in the Certificate
of Designation of the HealthAxis Series B Preferred Shares shall be
adjusted consistent with the modification of the Exchange Ratios set forth in
this Amending Agreement.


 


8.     As and from the date of this Amending
Agreement, all references in any other documents to the Merger Agreement shall
be construed as references to the Merger Agreement, as amended hereby. Except
as expressly amended hereby, each and every provision of the Merger Agreement
shall continue in full force and effect and is hereby confirmed, and all rights
and obligations of the Parties shall not be affected in any manner except as
specifically provided for in this Amending Agreement.


 


9.     This Amending Agreement may be executed in
any number of counterparts, each of which, when so executed, shall be deemed to
be an original and all of which taken together shall be deemed to constitute
one and the same instrument.


 


2

















 


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


 


	
   

  	
   

  	
  HEALTHAXIS INC.

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Per:

  	
  /s/ JOHN CARRADINE

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Per:

  	
  Chief Executive Officer and President

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  OUTSOURCING MERGER SUB, INC.

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Per:

  	
  /s/ JOHN CARRADINE

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Per:

  	
  President

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  BPO MANAGEMENT SERVICES, INC.

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Per:

  	
  /s/ PATRICK DOLAN

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Per:

  	
  Chairman of the Board and

  Chief Executive Officer

  



 


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