Document:

<PAGE>

                        AMENDMENT TO AMENDED AND RESTATED
                               OPTION TO PURCHASE
                            500,000 PREFERRED SHARES
                                       OF
                         PROVIDENT AMERICAN CORPORATION

         AGREEMENT made effective as of the 9th day of September, 1999, between
PROVIDENT AMERICAN CORPORATION ("PAMCO") and ALVIN H. CLEMENS ("Owner").

                                   BACKGROUND

         A. PAMCO and Owner entered into an Amended and Restated Option to
Purchase 500,000 Preferred Shares (the "Shares") of Provident American
Corporation dated December 11, 1996 ("Option Agreement").

         B. By reason of a stock dividend declared by PAMCO in April, 1993 and
pursuant to the Option Agreement, the number of shares which Owner could
exercise pursuant to the Option Agreement was 550,000.

         C. The parties are desirous of amending the Option Agreement.

         NOW, THEREFORE, for and in consideration of the sum of Ten ($10.00)
Dollars and other good and valuable consideration , the receipt of which is
hereby acknowledged, and intending to be legally bound, the parties hereto agree
as follows:

         1. Release of Options. Owner hereby releases and assigns to PAMCO all
rights, title, and interest in and to options to purchase One Hundred Fifty Two
Thousand Eight Hundred Two (152,802) of the Shares.

         2. Conversion Rights. The Option Agreement shall be amended to change
the right to purchase all or any part of an aggregate of Five Hundred and Fifty
Thousand (550,000) Shares to the right to purchase all or any part of an
aggregate of Three Hundred Ninety Seven Thousand One Hundred Ninety Eight
(397,198) shares of PAMCO's common stock.

         From and after the effective date of this Agreement, Owner shall not
have any right of any kind whatsoever to exercise any or all options pursuant to
the Option Agreement, as hereby amended, to purchase Series A Preferred Stock,
Class A Common Stock or any other class or type of securities other than PAMCO's
Common Stock.

         3. As herein amended, the provisions of the Option Agreement are hereby
ratified, approved and affirmed.

<PAGE>

         4. The Option Agreement, as amended by this Agreement, states the
entire understanding among the parties hereto with respect to the subject matter
hereof, and supercedes all prior oral or written communications and agreements
with respect to the subject matter hereof.

         IN WITNESS WHEREOF, the parties hereto have placed their hands and
seals as of the day and year above first written.

                                            PROVIDENT AMERICAN CORPORATION

                                           By:__________________________________
                                              Michael Ashker, President

                                              __________________________________
                                              Alvin H. Clemens<PAGE>

                              AMENDED AND RESTATED
                           CERTIFICATE OF DESIGNATION
                                       OF
                              AMENDED AND RESTATED
                            ARTICLES OF INCORPORATION
                                       OF
                              HEALTHAXIS.COM, INC.

                  HEALTHAXIS.COM, INC., a Pennsylvania corporation (the
"Corporation"), acting pursuant to Section 1522 of the Pennsylvania Business
Corporation Law, does hereby submit the following Amended and Restated
Certificate of Designation of Series and Determination of Rights and Preferences
of its Series A Preferred Stock.

                  FIRST:  The name of the Corporation is HealthAxis.com, Inc.

                  SECOND: By unanimous written consent of the Board of Directors
of the Corporation dated December 8, 1999, the following resolutions were duly
adopted:

                  WHEREAS the Board of Directors of the Corporation is
authorized, subject to limitations prescribed by law and by the provisions of
Article 5 of the Corporation's Amended and Restated Articles of Incorporation to
establish and fix the number of shares to be included in any series of Preferred
Stock and the designation, rights, preferences and limitations of the shares of
each series; and

                  NOW, THEREFORE, BE IT RESOLVED that pursuant to Article 5 of
the Corporation's Amended and Restated Articles of Incorporation, the
designation, rights, preferences, powers, restrictions and limitations
applicable to the Series A Preferred Stock be and hereby are revised and set
forth in this Amended and Restated Certificate of Designation as defined in the
Stock Purchase Agreement dated March 30, 1999 which supplements Article 5 as
follows:

1. Dividends.

                  (1) The holder of each share of Series A Preferred Stock shall
be entitled to receive such dividends as declared by the Board of Directors of
the Corporation in its discretion, out of funds legally available for that
purpose. Dividends on each share of Series A Preferred Stock, if and when
declared, shall accrue from the applicable date of declaration so that if at any
time Accrued Dividends (as hereinafter defined) upon the Series A Preferred
Stock shall not have been paid, the amount and deficiency in such dividends
shall be fully paid (but without interest) or dividends which have been declared
on the shares of the Series A Preferred Stock or any share of Preferred Stock of
the Corporation which is junior to the Series A Preferred Stock with respect to
the payment of dividends or distribution of assets of the Corporation or both
(the "Junior Stock") and a sum sufficient for the payment thereof shall have
been set apart for such payment, before any dividend shall be declared or paid
or any other distribution ordered or made upon shares of Common Stock or any
Junior Stock and before any sum or sums shall be set aside for or applied to the
purchase or redemption of any shares of Common Stock or the Junior Stock, other
than the repurchase by the Corporation of shares of Common Stock from any
employee thereof upon cessation of their employment, which shall under all
circumstances be permitted notwithstanding the foregoing.

<PAGE>

                  (2) "Accrued Dividends" shall mean that amount that shall be
equal to dividends declared by the Board of Directors, on the Series A Preferred
Stock (plus any other dividends declared but unpaid) for the period of time
elapsed from the declaration date by the Board to the date as of which Accrued
Dividends are to be paid less an amount equal to all dividends paid on the
Series A Preferred Stock through the date of calculation thereof.

                  (3) "set apart for payment" shall be deemed to include the
recording by the Corporation in its accounting ledgers of any accounting or
bookkeeping entry which indicates, pursuant to a declaration of dividends or
other distribution by the Board of Directors of the Corporation, the allocation
of funds to be so paid on any series or class of capital stock of the
Corporation; provided, however, that if any funds for any class of series of
Junior Stock or any class of series of stock ranking on a parity with the Series
A Preferred Stock as to the payment of dividends are placed in a separate
account of the Corporation or delivered to a disbursing, paying or other similar
agent, then "set apart for payment" with respect to the Series A Preferred Stock
shall mean placing such funds in a separate account or delivering such funds to
a disbursing, paying or other similar agent.

2. Liquidation.

         (a) Upon a Liquidation (as defined below), after payment or provision
for payment of the debts and other liabilities of the Corporation and all
amounts which the holders of shares of Preferred Stock ranking senior to the
Series A Preferred Stock, with respect to liquidation rights, including the
Series B, C and D Preferred Stock, and any other class of capital stock ranking
senior to the Series A Preferred Stock shall be entitled to receive upon such
Liquidation:

                (i) the holders of Series A Preferred Stock shall be entitled
to receive, prior and in preference to the holders of Common Stock, out of the
remaining assets of the Corporation available for distribution to its
stockholders with respect to each share of Series A Preferred Stock, an amount
(the "Series A Preference Amount") per share of Series A Preferred Stock equal
to the sum of (A) $4.396279 (the "Original Issuance Price" of the Series A
Preferred Stock) and (B) all Accrued Dividends payable with respect to such
share under Section 1. If upon any Liquidation the assets of the Corporation
available for distribution to its stockholders shall be insufficient to pay the
holders of Series A Preferred Stock the full respective Series A Preference
Amounts to which they shall be entitled, the holders of Series A Preferred Stock
shall share ratably in any distribution of assets based on the amounts which
would be payable to them on or with respect to the shares of Series A Preferred
Stock held by them upon such distribution pursuant to this Section 2 as if all
amounts payable on or with respect to such shares were paid in full.

                                      -2-
<PAGE>

                  (ii) After distribution to the holders of Series B, Series C
and Series D Preferred Stock of the full Series B, Series C and Series D
Preference Amount, respectively (as such term is defined in Section 2(a)(i) of
the Certificate of Designation of the Series B, Series C and Series D Preferred
Stock, respectively) and distribution to the holders of Series A Preferred Stock
of the full Series A Preference Amount set forth in Section 2(a)(i), the holders
of Series A Preferred Stock, Series B Preferred Stock, Series C Preferred Stock,
Series D Preferred Stock and Common Stock shall be entitled to receive, on a pro
rata basis (determined, in the case of Series A Preferred, Series B Preferred,
Series C Preferred and Series D Preferred Stock, on an "as converted" basis),
the remaining assets of the Corporation available for distribution to its
stockholders.

          (b) For purposes of this Section 2, a Corporate Transaction (as
defined below) shall be treated as a Liquidation and shall entitle the holders
of Preferred Stock to receive, upon the consummation of such Corporate
Transaction, consideration in the same form as is to be provided in such
Corporate Transaction (whether cash, securities, other property or any
combination thereof), having a value (as determined in accordance with the next
sentence) equivalent to the amounts to which such holders of each series of
Preferred Stock outstanding would otherwise have been entitled pursuant to
Section 2(a) assuming such Corporate Transaction had constituted a Liquidation
within the meaning of said Section 2(a).

         (c) As used herein, the following terms shall have the following
respective meanings:

                  (i) "Corporate Transaction" means (A) any consolidation or
merger of the Corporation, other than any merger or consolidation resulting in
the holders of the capital stock of the Corporation entitled to vote for the
election of directors holding a majority of the capital stock of the surviving
or resulting entity entitled to vote for the election of directors, (B) any
person or entity (including any affiliates thereof) becoming the holder of a
majority of the capital stock of the Corporation entitled to vote for the
election of directors, or (C) any sale or other disposition by the Corporation
of all or substantially all of its assets. Notwithstanding the foregoing, the
merger of the Corporation with Insurdata Incorporated shall not constitute a
Corporate Transaction.

                  (ii) "Liquidation" means any voluntary or involuntary
liquidation, dissolution or winding up of the affairs of the Corporation, other
than any dissolution, liquidation or winding up in connection with any
reincorporation of the Corporation in another jurisdiction.

                  (iii) "Original Issuance Date" means November 12, 1998.

3. Mandatory Redemption.

         (a) The Corporation shall have the option, exercisable on or after
September 15, 1999 (the "Mandatory Redemption Period") to redeem any or all of
the shares of Series A Preferred Stock (the "Mandatory Redemption"), and the
holders of Series A Preferred Stock shall so sell to the Corporation, such
number of shares of Series A Preferred Stock requested by the Corporation to be
redeemed, at a redemption price per share equal to the Original Issuance Price
(subject to equitable adjustment to reflect stock splits, stock dividends, stock
combinations, recapitalizations and like occurrences), plus an amount that would
yield a total annualized return of 10% calculated daily and compounded annually
from the closing date through the date of Mandatory Redemption.

                                      -3-
<PAGE>

         (b) Notice of the exercise of the Mandatory Redemption (the "Mandatory
Notice of Exercise") pursuant to Section 3(a) shall be sent by first-class
certified mail, postage prepaid and return receipt requested, or by overnight
courier to the Corporation. The Corporation shall, within fifteen (15) days of
receipt of the Mandatory Notice of Exercise, send notice to those holders of
Series A Preferred Stock who sent the Mandatory Notice of Exercise informing
them of whether the Corporation is legally permitted to effectuate the Mandatory
Redemption. If the Corporation is legally permitted to effectuate the Mandatory
Redemption, then at any time during the Mandatory Redemption Period, the holders
of record of shares of Series A Preferred Stock shall, as to the shares of
Series A Preferred Stock to be redeemed on such date, be entitled to receive
payment in cash of the Mandatory Redemption Price with respect to such Series A
Preferred Stock upon actual delivery to the Corporation or its agent of the
certificate or certificates representing the shares of Series A Preferred Stock
to be redeemed.

         (c) Anything contained herein to the contrary notwithstanding, the
holders of shares of Series A Preferred Stock shall have the right, exercisable
at any time during the Mandatory Redemption Period, to convert all or any part
of such shares into shares of Common Stock pursuant to Section 5 hereof

4. Voting Rights.

         (a) In addition to the rights provided by law or in the Corporation's
By-laws, each share of Series A Preferred Stock shall entitle the holder thereof
to such number of votes as shall equal the nearest whole number of shares of
Common Stock into which such share of Series A Preferred Stock is then
convertible pursuant to Section 5. Except as provided in paragraph (b) below or
as otherwise provided by law, the holders of Series A Preferred Stock, shall be
entitled to vote on all matters as to which holders of Common Stock shall be
entitled to vote, in the same manner and with the same effect as such holders of
Common Stock, voting together with the holders of Common Stock as one class.

         (b) The Corporation shall not, without the affirmative consent or
approval of the holders of at least a majority of the shares of Series A
Preferred Stock then outstanding, voting as a separate class:

                  (1) authorize, create, designate or establish any class or
series of capital stock or other security or other instrument convertible into
or exchangeable for any security ranking senior to the Series A Preferred Stock
(other than the Series B and Series C Preferred Stock) or reclassify any shares
of Common Stock into shares having any preference or priority as to dividends or
assets superior to any such preference or priority of the Series A Preferred
Stock (other than the Series B and Series C Preferred Stock);

                  (2) in any other manner amend or modify the powers,
privileges, preferences, or rights, or qualifications, limitations or
restrictions of the Series A Preferred Stock as to materially adversely affect
the holders thereof;

                                      -4-
<PAGE>

                  (3) amend the Amended and Restated Articles of Incorporation
of the Corporation so as to materially adversely affect the powers, preferences
or rights, or qualification, limitations or restrictions, of the shares of
Series A Preferred Stock (other than the creation of the Series B and Series C
Preferred Stock);

                  (4) amend the By-laws of the Corporation in any manner that
would materially adversely affect the powers, preferences or rights, or
qualifications, limitations or restrictions of the Series A Preferred Stock;

5. Optional Conversion.

         (a) Upon the terms set forth in this Section 5, the holder of shares of
Series A Preferred Stock shall have the right, at the holder's option, at any
time and from time to time, to convert any of such shares into the number of
fully paid and nonassessable shares of Common Stock equal to the quotient
obtained by dividing (i) the Original Issuance Price by (ii) the Conversion
Price (as defined below) therefor, as last adjusted and then in effect, by
surrender of the certificates representing the shares of Series A Preferred
Stock to be converted. The conversion price per share at which shares of Common
Stock shall be issuable upon conversion of shares of Series A Preferred Stock
shall initially be the Original Issuance Price (the "Conversion Price"), subject
to adjustment as set forth in paragraph (d) below.

         (b) The holder of the shares of Series A Preferred Stock may exercise
the conversion right pursuant to paragraph (a) above by delivering to the
Corporation the certificate or certificates for the shares to be converted, duly
endorsed or assigned in blank or to the Corporation (if required by it),
accompanied by written notice stating that the holder elects to convert such
shares and stating the name or names (with address) in which the certificate or
certificates for the shares of Common Stock are to be issued. Conversion shall
be deemed to have been effected on the date when such delivery is made (the
"Conversion Date"). As promptly as practicable thereafter, the Corporation shall
issue and deliver to such holder's address appearing on the Corporation's
records or upon the written order of such holder, to the place designated by
such holder, a certificate or certificates for the number of full shares of
Common Stock to which such holder is entitled, and a cash amount in respect of
any fractional interest in a share of Common Stock as provided in paragraph (c)
below. The person in whose name the certificate or certificates for Common Stock
are to be issued shall be deemed to have become a stockholder of record on the
applicable Conversion Date unless the transfer books of the Corporation are
closed on that date, in which event such person shall be deemed to have become a
stockholder of record on the next succeeding date on which the transfer books
are open, but the Conversion Price shall be that in effect on the Conversion
Date. Upon conversion of only a portion of the number of shares covered by a
certificate representing shares of Series A Preferred Stock surrendered for
conversion, the Corporation shall issue and deliver to or upon the written order
of the holder of the certificate so surrendered for conversion, at the expense
of the Corporation, a new certificate covering the number of shares of Series A
Preferred Stock representing the unconverted portion of the certificate so
surrendered.

                                      -5-
<PAGE>

         (c) No fractional shares of Common Stock or scrip shall be issued upon
conversion of shares of Series A Preferred Stock. The number of full shares of
Common Stock issuable upon conversion of Series A Preferred Stock shall be
computed on the basis of the aggregate number of shares of Series A Preferred
Stock to be converted. Instead of any fractional shares of Common Stock which
would otherwise be issuable upon conversion of any shares of Series A Preferred
Stock, the Corporation shall pay a cash adjustment in respect of such fractional
interest in an amount equal to the product of (i) the price of one share of
Common Stock as determined in good faith by the Board of Directors and (ii) such
fractional interest. The holders of fractional interests shall not be entitled
to any rights as stockholders of the Corporation in respect of such fractional
interests.

         (d) The Conversion Price applicable to the Series A Preferred Stock
shall be subject to adjustment from time to time as follows:

                  (i) If the Corporation shall at any time during the period
beginning on the Original Issuance Date and ending on the date of the
consummation of the Second Qualified Financing issue any shares of Common Stock
(including shares of Common Stock deemed to be issued pursuant to Subdivision
(3) of clause (iii) below) other than Excluded Stock (as defined in clause (iv)
below), without consideration or for a consideration per share less than the
Conversion Price applicable to the Series A Preferred Stock in effect
immediately prior to each such issuance of equity, then the applicable
Conversion Price in effect immediately prior to each such issuance shall
forthwith be lowered to a price equal to the amount of such lower consideration
per share.

                  (ii) If the Corporation shall at any time or from time to time
after the date of the consummation of the Second Qualified Financing issue any
shares of Common Stock (including shares of Common Stock deemed to be issued
pursuant to subdivision (3) of clause (iv) below) other than Excluded Stock (as
defined in clause (iv) below) without consideration or for a consideration per
share less than the Conversion Price applicable to the Series A Preferred Stock
in effect immediately prior to the issuance of such Common Stock, then the
applicable Conversion Price in effect immediately prior to each such issuance
shall forthwith be lowered to a price equal to the quotient obtained by
dividing:

                           (1) an  amount equal to the sum of (x) the total
number of shares of Common Stock outstanding (including any shares of Common
Stock deemed to have been issued pursuant to subdivision (3) of clause (iii)
below) immediately prior to such issuance, multiplied by the applicable
Conversion Price in effect immediately prior to such issuance, and (y) the
consideration received by the Corporation upon such issuance; by

                           (2) the total number of shares of Common Stock
outstanding (including any shares of Common Stock deemed to have been issued
pursuant to subdivision (3) of clause (iii) below) immediately after the
issuance of such Common Stock.

                  (iii) For the purposes of any adjustment of the Conversion
Price pursuant to clauses (i) and (ii) above, the following provisions shall be
applicable:

                                      -6-
<PAGE>

                           (1) In the case of the issuance of Common Stock for
cash in a public offering or private placement, the consideration shall be
deemed to be the amount of cash paid therefor after deducting therefrom any
discounts, commissions or placement fees payable by the Corporation to any
underwriter or placement agent in connection with the issuance and sale thereof.

                           (2) In the case of the issuance of Common  Stock for
a consideration in whole or in part other than cash, the consideration other
than cash shall be deemed to be the fair market value thereof (such fair market
value being determined as provided in the definition thereof but with reference
to such consideration), irrespective of any accounting treatment.

                           (3) The issuance after the Original Issuance Date of
options to purchase or rights to subscribe for Common Stock, securities by their
terms convertible into or exchangeable for Common Stock, or options to purchase
or rights to subscribe for such convertible or exchangeable securities shall be
deemed to be an issuance of Common Stock for purposes of clauses (i) and (ii)
above. In the case of any such issuance of options to purchase or rights to
subscribe for Common Stock, securities by their terms convertible into or
exchangeable for Common Stock, or options to purchase or rights to subscribe for
such convertible or exchangeable securities:

                                    a. the aggregate maximum number of shares of
Common Stock deliverable upon exercise of such options to purchase or rights to
subscribe for Common Stock shall be deemed to have been issued at the time such
options or rights were issued and for a consideration equal to the consideration
(determined in the manner provided in subdivisions (1) and (2) above), if any,
received by the Corporation upon the issuance of such options or rights plus the
minimum purchase price provided in such options or rights for the Common Stock
covered thereby;

                                    b. the aggregate maximum number of shares of
Common Stock deliverable upon conversion of or in exchange for any such
convertible or exchangeable securities or upon the exercise of options to
purchase or rights to subscribe for such convertible or exchangeable securities
and subsequent conversion or exchange thereof shall be deemed to have been
issued at the time such securities, options, or rights were issued and for a
consideration equal to the consideration received by the Corporation for any
such securities and related options or rights (excluding any cash received on
account of accrued interest or accrued dividends), plus the additional
consideration, if any, to be received by the Corporation upon the conversion or
exchange of such securities or the exercise of any related options or rights
(the consideration in each case to be determined in the manner provided in
subdivisions (1) and (2) above);

                                    c. on any change in the number of shares or
exercise price of Common Stock deliverable upon exercise of any such options or
rights or conversions of or exchange for such securities, other than a change
resulting from the anti-dilution provisions thereof, the applicable Conversion
Price shall forthwith be readjusted to such Conversion Price as would have been
obtained had the adjustment made upon the issuance of such options, rights or
securities not converted prior to such change or options or rights related to
such securities not converted prior to such change been made upon the basis of
such change; and

                                      -7-
<PAGE>

                                    d. on the expiration of any such options or
rights, the termination of any such rights to convert or exchange or the
expiration of any options or rights related to such convertible or exchangeable
securities, the applicable Conversion Price shall forthwith be readjusted to
such Conversion Price as would have been obtained had the adjustment made upon
the issuance of such options, rights, securities or options or rights related to
such securities been made upon the basis of the issuance of only the number of
shares of Common Stock actually issued upon the exercise of such options or
rights, upon the conversion or exchange of such securities, or upon the exercise
of the options or rights related to such securities and subsequent conversion or
exchange thereof.

                  (iv) "Excluded Stock" means (A) up to 8,600,000 shares of
Common Stock, and options therefor, issued or granted from time to time to
employees, directors and officers of and consultants to the Corporation pursuant
to agreements, plans or arrangements approved by the Board of Directors; (B)
shares of Common Stock issued upon conversion of shares of any series of
Preferred Stock provided that any shares of Common Stock, options or warrants
issued after the date of filing of the Amended and Restated Certificate of
Designation are issued at a price of not less than $4.00; (C) shares of Common
Stock issued by the Corporation as a stock dividend or upon any subdivision,
split-up or combination of shares of Common Stock; and (D) shares of Common
Stock issued in the Qualified Financing only if the issuance price of such
Common Stock is no less than 85% of the Original Issuance Price.

                  (v) If, at any time after the Original Issuance Date, the
number of shares of Common Stock outstanding is increased by a stock dividend
payable in shares of Common Stock or by a subdivision or split-up of shares of
Common Stock, then, following the record date for the determination of holder of
Common Stock entitled to receive such stock dividend, subdivision or split-up,
the Conversion Price shall be appropriately decreased so that the number of
shares of Common Stock issuable on conversion of each share of Preferred Stock
shall be increased in proportion to such increase in outstanding shares.

                  (vi) If, at any time after the Original Issuance Date, the
number of shares of Common Stock outstanding is decreased by a combination of
the outstanding shares of Common Stock, then, following the record date for such
combination, the Conversion Price shall be appropriately increased so that the
number of shares of Common Stock issuable on conversion of each share of Series
A Preferred Stock shall be decreased in proportion to such decrease in
outstanding shares.

                  (vii) In the event of any capital reorganization of the
Corporation, any reclassification of the stock of the Corporation (other than a
change in par value or from par value to no par value or from no par value to
par value or as a result of a stock dividend or subdivision, split-up or
combination of shares), or any consolidation or merger of the Corporation (other
than a consolidation or merger in which the Corporation is the continuing
corporation and which does not result in any change in the Common Stock), each
share of Series A Preferred Stock shall after such reorganization,
reclassification, consolidation or merger (unless, in the case of a
consolidation or merger, payment shall have been made to the holders of Series A
Preferred Stock of the full amount to which they shall have been entitled
pursuant to Section 2 hereof) be convertible into the kind and number of shares
of stock or other securities or property of the Corporation or of the
corporation resulting from such consolidation or surviving such merger to which
the holder of the number of shares of Common Stock deliverable (immediately
prior to the time of such reorganization, reclassification, consolidation or
merger) upon conversion of such share of Series A Preferred Stock would have
been entitled upon such reorganization, reclassification, consolidation or
merger. The provisions of this clause shall similarly apply to successive
reorganizations, reclassifications, consolidations or mergers.

                                      -8-
<PAGE>

                  (viii) All calculations under this paragraph shall be made to
the nearest one hundredth (1/100) of a cent or the nearest one tenth (1/10) of a
share, as the case may be.

                  (ix) In any case in which the provisions of this paragraph (d)
shall require that an adjustment shall become effective immediately after a
record date of an event, the Corporation may defer until the occurrence of such
event (A) issuing to the holder of any share of Series A Preferred Stock
converted after such record date and before the occurrence of such event the
shares of capital stock issuable upon such conversion by reason of the
adjustment required by such event in addition to the shares of capital stock
issuable upon such conversion before giving effect to such adjustments, and (B)
paying to such holder any amount in cash in lieu of a fractional share of
capital stock pursuant to paragraph (c) above; provided, however, that the
Corporation shall deliver to such holder an appropriate instrument evidencing
such holder's right to receive such additional shares and such cash.

         (e) Whenever the Conversion Price shall be adjusted as provided in
paragraph (d), the Corporation shall make available for inspection during
regular business hours, at its principal executive offices or at such other
place as may be designated by the Corporation, a statement, signed by its chief
executive officer, showing in detail the facts requiring such adjustment and the
Conversion Price that shall be in effect after such adjustment. The Corporation
shall also cause a copy of such statement to be sent by first class certified
mail, return receipt requested and postage prepaid, to each holder of Series A
Preferred Stock as to which the Conversion Price shall be so adjusted at such
holder's address appearing on the Corporation's records. Where appropriate, such
copy may be given in advance and may be included as part of any notice required
to be mailed under the provisions of paragraph (f) below.

         (f) If the Corporation shall propose to take any action of the types
described in clauses (v), (vi) or (vii) of paragraph (d) above, the Corporation
shall give notice to each holder of shares of Series A Preferred Stock, in the
manner set forth in paragraph (e) above, which notice shall specify the record
date, if any, with respect to any such action and the date on which such action
is to take place. Such notice shall also set forth such facts with respect
thereto as shall be reasonably necessary to indicate the effect of such action
(to the extent such effect may be known at the date of such notice) on the
Conversion Price and the number, kind or class of shares or other securities or
property which shall be deliverable or purchasable upon the occurrence of such
action or deliverable upon conversion of shares of Series A Preferred Stock. In
the case of any action which would require the fixing of a record date, such
notice shall be given at least 20 days prior to the date so fixed, and in case
of all other action, such notice shall be given at least 30 days prior to the
taking of such proposed action. Failure to give such notice, or any defect
therein, shall not affect the legality or validity of any such action.

                                      -9-
<PAGE>

         (g) The Corporation shall reserve, and at all times from and after the
date of Original Issuance Date keep reserved, free from preemptive rights, out
of its authorized but unissued shares of Common Stock, solely for the purpose of
effecting the conversion of the shares of Series A Preferred Stock, sufficient
shares of Common Stock to provide for the conversion of all outstanding shares
of Series A Preferred Stock.

         (h) At any time the Corporation makes or fixes a record date for the
determination of holders of Common Stock entitled to receive a dividend or other
distribution payable in securities of the Corporation other than shares of
Common Stock, provision shall be made so that each holder of shares of Series A
Preferred Stock shall receive upon conversion thereof, in addition to the shares
of Common Stock receivable thereupon, the number of securities of the
Corporation which it would have received had its shares of Series A Preferred
Stock been converted into shares of Common Stock on the date of such event and
had such holder thereafter, during the period from the date of such event to and
including the date of conversion, retained such securities receivable by it
pursuant to this paragraph during such period, subject to the sum of all other
adjustments called for during such period under this Section 5 with respect to
the rights of such holder of shares of Series A Preferred Stock.

6. Mandatory Conversion.

         (a) Upon the earlier of: (i) the consummation of the first underwritten
public offering for the account of the Corporation of its Common Stock pursuant
to a registration statement filed under the Securities Act of 1933, as amended,
at a net offering price per share of Common Stock that represents a pre-offering
market capitalization of no less than $150,000,000 and with aggregate proceeds
(net of underwriting discounts and commissions) to the Corporation of not less
than $25,000,000 (a "Qualified Public Offering"); or (ii) the consummation of a
Qualified Merger of the Corporation, each share of Series A Preferred Stock then
outstanding shall, by virtue of and simultaneously with such Qualified Public
Offering or Qualified Merger (as the case may be), be deemed automatically
converted into the number of fully paid and nonassessable shares of Common Stock
equal to the quotient obtained by dividing (i) the Original Issuance Price of
the Series A Preferred Stock by (ii) the applicable Conversion Price, as last
adjusted and then in effect.

         (b) As promptly as practicable after the date of consummation of any
Qualified Public Offering or Qualified Merger (as the case may be) and the
delivery to the Corporation of the certificate or certificates for the shares of
Series A Preferred Stock which have been converted, duly endorsed or assigned in
blank to the Corporation (if required by it), the Corporation shall issue and
deliver to or upon the written order of each holder of Series A Preferred Stock,
to the place designated by such holder, a certificate or certificates for the
number of full shares of Common Stock to which such holder is entitled, and a
cash amount in respect of any fractional interest in a share of Common Stock as
provided in paragraph (c) below. The person in whose name the certificate or
certificates for Common Stock are to be issued shall be deemed to have become a
holder of Common Stock of record on the date of such Qualified Public Offering
or Qualified Merger and on such date the shares of Series A Preferred Stock
shall cease to be outstanding, whether or not the certificates representing such
shares have been received by the Corporation.

                                      -10-
<PAGE>

         (c) For purposes of this Section, the term "Qualified Merger" shall
mean an upstream merger of the Corporation with Provident American Corporation
("Provident") or the merger of the Corporation with a wholly-owned subsidiary of
Provident pursuant to which the Corporation shall be the only operating
subsidiary of Provident and Provident's only operations shall be within the
Corporation upon the following conditions:

                  (i) the merger is approved, in addition to such vote as may
otherwise be required by applicable law, by a majority vote of holders of the
Series B Preferred Stock, Series C Preferred Stock, and Series D Preferred Stock
of the Corporation;

                  (ii) the Corporation receives a fairness opinion from
BancBoston Robertson Stephens Inc. (or such other investment banking firm as
approved by the majority vote of the holders of the Series B, Series C and
Series D Preferred Stock) indicating that the merger is fair to the stockholders
of the Corporation, other than Provident and its subsidiaries, from a financial
point of view;

                  (iii) the securities to be issued to holders of the Preferred
Stock upon the completion of the merger shall be registered with the Securities
and Exchange Commission pursuant to the Securities Act of 1933, as amended,
freely tradeable and listed on a national securities exchange or quoted on the
NASDAQ Stock Market; and

                  (iv) the resulting entity has a market capitalization of at
least $200,000,000.

         (d) The Conversion Price in effect for purposes of a Qualified Public
Offering or Qualified Merger under this Section 6 shall be determined after
giving effect to the Conversion Price adjustment provisions set forth in Section
5 with respect to such Qualified Public Offering or Qualified Merger, as
applicable, in the same manner as they apply to the conversion of Series A
Preferred Stock pursuant to Section 5.

                                      -11-

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00005-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00005-of-00352.parquet"}]]