Document:

petro_8k-ex1004.htm

    Exhibit
10.4

     

    

    

    

    

    
      

      

    

    

    

    

    

    SECOND
LIEN GUARANTY AND COLLATERAL AGREEMENT

    

    dated
as of September 9, 2008

    

    made
by

    

    PETRO
RESOURCES CORPORATION

    

    and

    

    EACH
OF THE OTHER GRANTORS (AS DEFINED HEREIN)

    

    in
favor of

    

    CIT
CAPITAL USA INC.,

    as
Administrative Agent

    

    

     

    REFERENCE
IS MADE TO THE INTERCREDITOR AGREEMENT DATED AS OF SEPTEMBER 9, 2008 (AS
AMENDED, RESTATED, SUPPLEMENTED OR OTHERWISE MODIFIED FROM TIME TO TIME, THE
“INTERCREDITOR AGREEMENT”), AMONG THE
BORROWER, CIT CAPITAL USA INC., AS FIRST LIEN COLLATERAL AGENT (AS DEFINED
THEREIN), AND CIT CAPITAL USA INC., AS SECOND LIEN COLLATERAL AGENT (AS DEFINED
THEREIN).  NOTWITHSTANDING ANYTHING HEREIN TO THE CONTRARY, THE LIEN
AND SECURITY INTEREST GRANTED TO THE SECOND LIEN COLLATERAL AGENT, FOR THE
BENEFIT OF THE SECURED PARTIES, PURSUANT TO THIS AGREEMENT AND THE EXERCISE OF
ANY RIGHT OR REMEDY BY THE SECOND LIEN COLLATERAL AGENT AND THE OTHER SECURED
PARTIES HEREUNDER ARE SUBJECT TO THE PROVISIONS OF THE INTERCREDITOR
AGREEMENT.  IN THE EVENT OF ANY CONFLICT OR INCONSISTENCY BETWEEN THE
PROVISIONS OF THE INTERCREDITOR AGREEMENT AND THIS AGREEMENT, THE PROVISIONS OF
THE INTERCREDITOR AGREEMENT SHALL CONTROL.

     

     

    

     

    
      

      

    

     

    
      
        
        

      

      
        
        

        
        

      

      
        
        

      

    

    

    TABLE
OF CONTENTS

     

    
      	 
      	 
      	
              Page

            
	 
      	 
      	 
      
	 
      	
              ARTICLE
      I

            	 
      
	 
      	
              DEFINITIONS

            	
              1

            
	 
      	 
      	 
      
	
              Section
      1.01

            	
              Definitions

            	
              1

            
	
              Section
      1.02

            	
              Other
      Definitional Provisions

            	
              5

            
	
              Section
      1.03

            	
              Rules
      of Interpretation

            	
              5

            
	 
      	 
      	 
      
	 
      	
              ARTICLE
      II

            	 
      
	 
      	
              GUARANTEE

            	
              6

            
	 
      	 
      	 
      
	
              Section
      2.01

            	
              Guarantee.

            	
              6

            
	
              Section
      2.02

            	
              Right
      of Contribution

            	
              6

            
	
              Section
      2.03

            	
              No
      Subrogation

            	
              7

            
	
              Section
      2.04

            	
              Guaranty
      Amendments, Etc. with respect to the Borrower Obligations

            	
              7

            
	
              Section
      2.05

            	
              Waivers

            	
              8

            
	
              Section
      2.06

            	
              Guaranty
      Absolute and Unconditional

            	
              8

            
	
              Section
      2.07

            	
              Reinstatement

            	
              9

            
	
              Section
      2.08

            	
              Payments

            	
              10

            
	 
      	 
      	 
      
	 
      	
              ARTICLE
      III

            	 
      
	 
      	
              GRANT
      OF SECURITY INTEREST

            	
              10

            
	 
      	 
      	 
      
	
              Section
      3.01

            	
              Grant
      of Security Interest

            	
              10

            
	
              Section
      3.02

            	
              Transfer
      of Pledged Securities

            	
              11

            
	 
      	 
      	 
      
	 
      	
              ARTICLE
      IV

            	 
      
	 
      	
              REPRESENTATIONS
      AND WARRANTIES

            	
              11

            
	 
      	 
      	 
      
	
              Section
      4.01

            	
              Representations
      in Term Loan Agreement

            	
              11

            
	
              Section
      4.02

            	
              Title;
      No Other Liens

            	
              12

            
	
              Section
      4.03

            	
              Perfected
      First Priority Liens

            	
              12

            
	
              Section
      4.04

            	
              Grantor
      Information

            	
              12

            
	
              Section
      4.05

            	
              Inventory
      and Equipment

            	
              13

            
	
              Section
      4.06

            	
              Deposit
      Accounts and Securities Accounts

            	
              13

            
	
              Section
      4.07

            	
              Farm
      Products

            	
              13

            
	
              Section
      4.08

            	
              Investment
      Property

            	
              13

            
	
              Section
      4.09

            	
              Receivables

            	
              14

            
	
              Section
      4.10

            	
              Contracts

            	
              14

            
	
              Section
      4.11

            	
              Intellectual
      Property

            	
              14

            
	
              Section
      4.12

            	
              Commercial
      Tort Claims

            	
              15

            
	
              Section
      4.13

            	
              Benefit
      to the Guarantors

            	
              15

            

    

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    
      	 
      	
              ARTICLE
      V

            	 
      
	 
      	
              COVENANTS

            	
              15

            
	 
      	 
      	 
      
	
              Section
      5.01

            	
              Covenants
      and Events of Default in Term Loan Agreement

            	
              15

            
	
              Section
      5.02

            	
              Delivery
      of Instruments, Certificated Securities and Chattel Paper

            	
              16

            
	
              Section
      5.03

            	
              Maintenance
      of Perfected Security Interest; Further Documentation

            	
              16

            
	
              Section
      5.04

            	
              Changes
      in Locations, Name, Etc.

            	
              16

            
	
              Section
      5.05

            	
              Notices

            	
              17

            
	
              Section
      5.06

            	
              Investment
      Property

            	
              17

            
	
              Section
      5.07

            	
              Intellectual
      Property

            	
              19

            
	
              Section
      5.08

            	
              Commercial
      Tort Claims

            	
              20

            
	 
      	 
      	 
      
	 
      	
              ARTICLE
      VI

            	 
      
	 
      	
              REMEDIAL
      PROVISIONS

            	
              21

            
	 
      	 
      	 
      
	
              Section
      6.01

            	
              Certain
      Matters Relating to Receivables

            	
              21

            
	
              Section
      6.02

            	
              Communications
      with Obligors; Grantors Remain Liable

            	
              21

            
	
              Section
      6.03

            	
              Pledged
      Securities

            	
              22

            
	
              Section
      6.04

            	
              Proceeds
      to be Turned Over to Administrative Agent

            	
              23

            
	
              Section
      6.05

            	
              Application
      of Proceeds

            	
              23

            
	
              Section
      6.06

            	
              Code
      and Other Remedies

            	
              23

            
	
              Section
      6.07

            	
              Registration
      Rights

            	
              24

            
	
              Section
      6.08

            	
              Waiver;
      Deficiency

            	
              25

            
	
              Section
      6.09

            	
              Non-Judicial
      Enforcement

            	
              26

            
	 
      	 
      	 
      
	 
      	
              ARTICLE
      VII

            	 
      
	 
      	
              THE
      ADMINISTRATIVE AGENT

            	
              26

            
	 
      	 
      	 
      
	
              Section
      7.01

            	
              Administrative
      Agent’s Appointment as Attorney-in-Fact, Etc.

            	
              26

            
	
              Section
      7.02

            	
              Duty
      of Administrative Agent

            	
              27

            
	
              Section
      7.03

            	
              Execution
      of Financing Statements

            	
              28

            
	
              Section
      7.04

            	
              Authority
      of Administrative Agent

            	
              28

            
	 
      	 
      	 
      
	 
      	
              ARTICLE
      VIII

            	 
      
	 
      	
              SUBORDINATION
      OF INDEBTEDNESS

            	
              29

            
	 
      	 
      	 
      
	
              Section
      8.01

            	
              Subordination
      of All Grantor Claims

            	
              29

            
	
              Section
      8.02

            	
              Claims
      in Bankruptcy

            	
              29

            
	
              Section
      8.03

            	
              Payments
      Held in Trust

            	
              29

            
	
              Section
      8.04

            	
              Liens
      Subordinate

            	
              30

            
	
              Section
      8.05

            	
              Notation
      of Records

            	
              30

            

    

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    
      	 
      	
              ARTICLE
      IX

            	 
      
	 
      	
              MISCELLANEOUS

            	
              30

            
	 
      	 
      	 
      
	
              Section
      9.01

            	
              No
      Waiver by Course of Conduct; Cumulative Remedies

            	
              30

            
	
              Section
      9.02

            	
              Notices

            	
              30

            
	
              Section
      9.03

            	
              Enforcement
      Expenses; Indemnities

            	
              30

            
	
              Section
      9.04

            	
              Amendments
      in Writing

            	
              31

            
	
              Section
      9.05

            	
              Successors
      and Assigns

            	
              31

            
	
              Section
      9.06

            	
              Survival;
      Revival; Reinstatement.

            	
              31

            
	
              Section
      9.07

            	
              Counterparts;
      Integration; Effectiveness

            	
              32

            
	
              Section
      9.08

            	
              Severability

            	
              32

            
	
              Section
      9.09

            	
              Set-Off

            	
              33

            
	
              Section
      9.10

            	
              Governing
      Law; Submission to Jurisdiction; Waiver of Jury Trial

            	
              33

            
	
              Section
      9.11

            	
              Headings

            	
              34

            
	
              Section
      9.12

            	
              Acknowledgments

            	
              34

            
	
              Section
      9.13

            	
              Additional
      Grantors and Additional Pledged Securities

            	
              35

            
	
              Section
      9.14

            	
              Releases

            	
              35

            
	
              Section
      9.15

            	
              Acceptance

            	
              36

            

    

    

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    SCHEDULES:

    1           Notice
Addresses

    2           Investment
Property

    3           Perfection
Matters

    4           Location
of Jurisdiction of Organization and Chief Executive Office

    5           Inventory
and Equipment Locations

    6           Intellectual
Property

    7           Existing
Permitted Financing Statements

    8           Deposit
Accounts and Securities Accounts

    

    ANNEXES:

    I           
Form of Acknowledgment and Consent

    II         
 Form of Assumption Agreement

    III         
Form of Supplement

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    This
SECOND LIEN GUARANTY AND
COLLATERAL AGREEMENT, dated as of September 9, 2008,
is made by Petro Resources Corporation, a Delaware corporation (the
“Borrower”) and
each of the signatories hereto (the Borrower and each of the signatories hereto,
together with any Subsidiary of the Borrower that becomes a party hereto from
time to time after the date hereof, the “Grantors”) in favor
of CIT Capital USA
Inc., as administrative agent (in such capacity, together with its
successors in such capacity, the “Administrative
Agent”) for the banks and other financial institutions (the “Lenders”) from time
to time parties to the Second Lien Term Loan Agreement, dated as of September 9,
2008 (as amended, supplemented or otherwise modified from time to time, the
“Term Loan
Agreement”), among the Borrower, the Administrative Agent and the
Lenders.

     

    R
E C I T A L S

     

    A.           It
is a condition precedent to the obligation of the Lenders to make their
respective loans to and extensions of credit on behalf of the Borrower under the
Term Loan Agreement that the Grantors shall have executed and delivered this
Agreement to the Administrative Agent for the ratable benefit of the
Lenders.

     

    B.           Now,
therefore, in consideration of the premises herein and to induce the
Administrative Agent and the Lenders to enter into the Term Loan Agreement and
to induce the Lenders to make their respective loans to and extensions of credit
on behalf of the Borrower thereunder, each Grantor hereby agrees with the
Administrative Agent, for the ratable benefit of the Lenders, as
follows:

     

    ARTICLE
I

    Definitions

     

    Section
1.01 Definitions.

     

    (a) Unless
otherwise defined herein, terms defined in the Term Loan Agreement and used
herein have the meanings given to them in the Term Loan Agreement, and all
uncapitalized terms which are defined in the UCC (as defined herein) on the date
hereof are used herein as so defined.

     

    (b) The
following terms are used herein as defined in the UCC on the date
hereof:  Accounts, Certificated Security, Chattel Paper, Commercial
Tort Claims, Contracts, Documents, Electronic Chattel Paper, Equipment, Farm
Products, Fixtures, General Intangibles,  Instruments, Inventory,
Letter-of-Credit Rights, Proceeds, Securities Accounts, Supporting Obligations,
and Tangible Chattel Paper.

     

    (c) The
following terms have the following meanings:

     

    “Acknowledgment and
Consent” means an Acknowledgement and Consent substantially in the form
attached hereto as Annex I.

     

    “Administrative Agent”
has the meaning assigned such term in the Preamble.

     

    
      
        
        

      

      
        -1-

        
          

        

      

      
        
        

      

    

     

    “Agreement” means this
Guaranty and Collateral Agreement, as the same may be amended, restated,
supplemented or otherwise modified from time to time.

     

    “Assumption Agreement”
means an Assumption Agreement substantially in the form attached hereto as Annex
II.

     

    “Bankruptcy Code”
means Title 11 of the United States Code, as amended from time to
time.

     

    “Borrower” has the
meaning assigned such term in the Preamble.

     

    “Borrower Obligations”
means the collective reference to the unpaid principal of and interest on the
Loans, the Indebtedness, and all other obligations and liabilities of the
Borrower and the other Grantors (including, without limitation, interest
accruing at the then applicable rate provided in the Term Loan Agreement after
the maturity of the Loans and interest accruing at the then applicable rate
provided in the Term Loan Agreement after the filing of any petition in
bankruptcy, or the commencement of any insolvency, reorganization or like
proceeding, relating to the Borrower, whether or not a claim for post-filing or
post-petition interest is allowed in such proceeding) to the Secured Parties,
whether direct or indirect, absolute or contingent, due or to become due, or now
existing or hereafter incurred, which may arise under, out of, or in connection
with, the Secured Documents, in each case, whether on account of principal,
interest, reimbursement obligations, payments in respect of an early termination
date, fees, indemnities, costs, expenses or otherwise (including, without
limitation, all fees and disbursements of counsel to the Secured Parties that
are required to be paid by the Borrower pursuant to the terms of any of the
Secured Documents).

     

    “Collateral” has the
meaning assigned such term in Section 3.01.

     

    “Collateral Account”
means any collateral account established by the Administrative Agent as provided
in Section 6.01 or Section 6.04.

     

    “Copyrights” means the
collective reference to (a) all copyrights arising under the laws of the United
States, any other country or any political subdivision thereof, whether
registered or unregistered and whether published or unpublished (including those
listed in Schedule 6), all registrations and recordings thereof, and all
applications in connection therewith, including all registrations, recordings
and applications in the United States Copyright Office and (b) the right to
obtain all renewals thereof.

     

    “Copyright Licenses”
means any written agreement naming any Grantor as licensor or licensee, granting
any right under any Copyright, including the grant of rights to manufacture,
distribute, exploit and sell materials derived from any Copyright.

     

    “Deposit Account” has
the meaning given such term in the Uniform Commercial Code of any applicable
jurisdiction and, in any event, including any demand, time, savings, passbook or
like account maintained with a depositary institution.

     

    “Grantors” has the
meaning assigned such term in the Preamble.

     

    
      
        
        

      

      
        -2-

        
          

        

      

      
        
        

      

    

     

    “Grantor Claims” has
the meaning assigned to such term in Section 8.01.

     

    “Guarantor
Obligations” means with respect to any Guarantor, the collective
reference to (a) the Borrower Obligations and (b) all obligations and
liabilities of such Guarantor which may arise under or in connection with any
Secured Document to which such Guarantor is a party (including, without
limitation, Article II of this Agreement), in each case, whether on account of
principal, interest, guarantee obligations, reimbursement obligations, payments
in respect of an early termination date, fees, indemnities, costs, expenses or
otherwise (including, without limitation, all fees and disbursements of counsel
to any Secured Party under any Secured Document).

     

    “Guarantors” means the
collective reference to all Grantors other than the Borrower.

     

    “Intellectual
Property” means the collective reference to all rights, priorities and
privileges relating to intellectual property, whether arising under United
States, multinational or foreign laws or otherwise, including the Copyrights,
the Copyright Licenses, the Patents, the Patent Licenses, the Trademarks and the
Trademark Licenses, and all rights to sue at law or in equity for any
infringement or other impairment thereof, including the right to receive all
proceeds and damages therefrom.

     

    “Intercompany Note”
means any promissory note evidencing loans made by any Grantor to the Borrower
or any of its Subsidiaries.

     

    “Investment Property”
means the collective reference to (a) all “investment property” as such term is
defined in Section 9.102(a)(49) of the UCC and (b) whether or not constituting
“investment property” as so defined, all Pledged Notes and all Pledged
Securities.

     

    “Issuers” means the
collective reference to each issuer of any Investment Property.

     

    “Lenders” has the
meaning assigned such term in the Preamble.

     

    “LLC” means, with
respect to any Grantor, each limited liability company described or referred to
in Schedule 2 in which such Grantor has an interest.

     

    “LLC Agreement” means
each operating agreement relating to an LLC, as each agreement has heretofore
been, and may hereafter be, amended, restated, supplemented or otherwise
modified from time to time.

     

    “Obligations”
means:  (a) in the case of the Borrower, the Borrower Obligations and
(b) in the case of each Guarantor, its Guarantor Obligations.

     

    “Partnership” means,
with respect to any Grantor, each partnership described or referred to in
Schedule 2 in which such Grantor has an interest.

     

    “Partnership
Agreement” means each partnership agreement governing a Partnership, as
each such agreement has heretofore been, and may hereafter be, amended,
restated, supplemented or otherwise modified.

     

    
      
        
        

      

      
        -3-

        
          

        

      

      
        
        

      

    

     

    “Patent License” means
all agreements, whether written or oral, providing for the grant by or to any
Grantor of any right to manufacture, use or sell any invention covered in whole
or in part by a Patent, including, without limitation, any thereof referred to
in Schedule 6.

     

    “Patents” means the
collective reference to (a) all letters patent of the United States, any other
country or any political subdivision thereof, all reissues and extensions
thereof and all goodwill associated therewith, including any of the foregoing
referred to in Schedule 6, (b) all applications for letters patent of the United
States or any other country and all divisions, continuations and
continuations-in-part thereof, including any of the foregoing referred to in
Schedule 6 and (c) all rights to obtain any reissues or extensions of the
foregoing.

     

    “Pledged LLC
Interests” means, with respect to any Grantor, all right, title and
interest of such Grantor as a member of all LLCs and all right, title and
interest of such Grantor in, to and under the LLC Agreements.

     

    “Pledged
Notes”  means all promissory notes listed on Schedule 2, all
Intercompany Notes at any time issued to any Grantor and all other promissory
notes issued to or held by any Grantor (other than promissory notes issued in
connection with extensions of trade credit by any Grantor in the ordinary course
of business).

     

    “Pledged Partnership
Interests” means, with respect to any Grantor, all right, title and
interest of such Grantor as a limited or general partner in all Partnerships and
all right, title and interest of such Grantor in, to and under the Partnership
Agreements.

     

    “Pledged Securities”
means: (a) the Equity Interests described or referred to in Schedule 2 (as
the same may be supplemented from time to time pursuant to a Supplement),
together with any other Equity Interests of any Person that may be issued or
granted to, or held by, any Grantor while this Agreement is in effect;
including, but not limited to, all Pledged LLC Interests and Pledged Partnership
Interests related thereto; and (b) the certificates or instruments, if any,
representing such Equity Interests, (c) all dividends (cash, Equity Interests or
otherwise), cash, instruments, rights to subscribe, purchase or sell and all
other rights and Property from time to time received, receivable or otherwise
distributed in respect of or in exchange for any or all of such securities, (d)
all replacements, additions to and substitutions for any of the Property
referred to in this definition, including, without limitation, claims against
third parties, (e) the proceeds, interest, profits and other income of or on any
of the Property referred to in this definition, (f) all security entitlements in
respect of any of the foregoing, if any, and (g) all books and records relating
to any of the Property referred to in this definition.

     

    “Proceeds” means all
“proceeds” as such term is defined in the UCC on the date hereof and, in any
event, shall include, without limitation, all dividends or other income from the
Pledged Securities, collections thereon or distributions or payments with
respect thereto.

     

    “Receivable” means any
right to payment for goods sold or leased or for services rendered, whether or
not such right is evidenced by an Instrument or Chattel Paper and whether or not
it has been earned by performance (including any Account).

     

    
      
        
        

      

      
        -4-

        
          

        

      

      
        
        

      

    

     

    “Secured Documents”
means the collective reference to the Term Loan Agreement, the other Loan
Documents and any other document made, delivered or given in connection with any
of the foregoing.

     

    “Secured Parties”
means the collective reference to the Administrative Agent and the
Lenders.

     

    “Securities Act” means
the Securities Act of 1933, as amended.

     

    “Supplement” means a
Supplement substantially in the form attached hereto as
Annex III.

     

    “Term Loan Agreement”
has the meaning assigned such term in the Preamble.

     

    “Trademark License”
means any agreement, whether written or oral, providing for the grant by or to
any Grantor of any right to use any Trademark.

     

    “Trademarks” means (a)
all trademarks, trade names, corporate names, company names, business names,
fictitious business names, trade styles, service marks, logos and other source
or business identifiers, and all goodwill associated therewith, now existing or
hereafter adopted or acquired, all registrations and recordings thereof, and all
applications in connection therewith, whether in the United States Patent and
Trademark Office or in any similar office or agency of the United States, any
State thereof or any other country or any political subdivision thereof, or
otherwise, and all common-law rights related thereto, including any of the
foregoing referred to in Schedule 6 and (b) the right to obtain all renewals
thereof.

     

    “UCC” means the
Uniform Commercial Code as from time to time in effect in the State of Texas;
provided, however, that, in the event that, by reason of mandatory provisions of
law, any of the attachment, perfection or priority of the Administrative Agent’s
security interest in any Collateral is governed by the Uniform Commercial Code
as in effect in a jurisdiction other than the State of Texas, the term “UCC”
shall mean the Uniform Commercial Code as in effect in such other jurisdiction
for purposes of the provisions hereof relating to such attachment, perfection,
the effect thereof or priority and for purposes of definitions related to such
provisions.

     

    Section
1.02 Other Definitional
Provisions.  Where the context requires, terms relating to the
Collateral or any part thereof, when used in relation to a Grantor, refer to
such Grantor’s Collateral or the relevant part thereof.

     

    Section
1.03 Rules of
Interpretation.  Section 1.04 and Section 1.05 of the
Term Loan Agreement are hereby incorporated herein by reference and shall apply
to this Agreement, mutatis mutandis.

     

    
      
        
        

      

      
        -5-

        
          

        

      

      
        
        

      

    

     

    ARTICLE
II

    Guarantee

     

    Section
2.01 Guarantee.

     

    (a) Each of
the Guarantors hereby, jointly and severally, unconditionally and irrevocably,
guarantees to the Secured Parties and each of their respective successors,
indorsees, transferees and assigns, the prompt and complete payment in cash and
performance by the Borrower when due (whether at the stated maturity, by
acceleration or otherwise) of the Borrower Obligations.  This is a
guarantee of payment and not collection and the liability of each Guarantor is
primary and not secondary.

     

    (b) Anything
herein or in any other Loan Document to the contrary notwithstanding, the
maximum liability of each Guarantor hereunder and under the other Loan Documents
shall in no event exceed the amount which can be guaranteed by such Guarantor
under applicable federal and state laws relating to the insolvency of debtors
(after giving effect to the right of contribution established in Section
2.02).

     

    (c) Each
Guarantor agrees that the Borrower Obligations may at any time and from time to
time exceed the amount of the liability of such Guarantor hereunder without
impairing the guarantee contained in this Article II or affecting the
rights and remedies of any Secured Party hereunder.

     

    (d) Each
Guarantor agrees that if the maturity of the Borrower Obligations is accelerated
by bankruptcy or otherwise, such maturity shall also be deemed accelerated for
the purpose of this guarantee without demand or notice to such
Guarantor.  The guarantee contained in this Article II shall
remain in full force and effect until all the Borrower Obligations shall have
been irrevocably and indefeasibly satisfied by payment in full in
cash.

     

    (e) No
payment made by any Grantor, any other guarantor or any other Person or received
or collected by any Secured Party from the Borrower, any of the Guarantors, any
other guarantor or any other Person by virtue of any action or proceeding or any
set-off or appropriation or application at any time or from time to time in
reduction of or in payment of the Borrower Obligations shall be deemed to
modify, reduce, release or otherwise affect the liability of any Guarantor
hereunder which shall, notwithstanding any such payment (other than any payment
made by such Guarantor in respect of the Borrower Obligations or any payment
received or collected from such Guarantor in respect of the Borrower
Obligations), remain liable for the Borrower Obligations up to the maximum
liability of such Guarantor hereunder until the Borrower Obligations are
irrevocably and indefeasibly paid in full in cash.

     

    Section
2.02 Right of
Contribution.  Each Guarantor hereby agrees that to the extent
that a Guarantor shall have paid more than its proportionate share of any
payment made hereunder, such Guarantor shall be entitled to seek and receive
contribution from and against any other Guarantor hereunder which has not paid
its proportionate share of such payment.  Each Guarantor’s right of
contribution shall be subject to the terms and conditions of Section
2.03.  The provisions of this Section 2.02 shall in no respect limit
the obligations and liabilities of any Guarantor to the Secured Parties, and
each Guarantor shall remain liable to the Secured Parties for the full amount
guaranteed by such Guarantor hereunder.

     

    
      
        
        

      

      
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    Section
2.03 No
Subrogation.  Notwithstanding any payment made by any Guarantor
hereunder or any set-off or application of funds of any Guarantor by any Secured
Party, no Guarantor shall be entitled to be subrogated to any of the rights of
any Secured Party against the Borrower or any other Guarantor or any collateral
security or guarantee or right of offset held by any Secured Party for the
payment of the Borrower Obligations, nor shall any Guarantor seek or be entitled
to seek any indemnity, exoneration, participation, contribution or reimbursement
from the Borrower or any other Guarantor in respect of payments made by such
Guarantor hereunder, until all amounts owing to the Secured Parties on account
of the Borrower Obligations are irrevocably and indefeasibly paid in full in
cash.  If any amount shall be paid to any Guarantor on account of such
subrogation rights at any time when all of the Borrower Obligations shall not
have been irrevocably and indefeasibly paid in full in cash, such amount shall
be held by such Guarantor in trust for the Secured Parties, and shall, forthwith
upon receipt by such Guarantor, be turned over to the Administrative Agent in
the exact form received by such Guarantor (duly indorsed by such Guarantor to
the Administrative Agent, if required), to be applied against the Borrower
Obligations, whether matured or unmatured, in accordance with
Section 10.02(c) of the Term Loan Agreement.

     

    Section
2.04 Guaranty Amendments, Etc.
with respect to the Borrower Obligations.  Each Guarantor shall
remain obligated hereunder, and such Guarantor’s obligations hereunder shall not
be released, discharged or otherwise affected, notwithstanding that, without any
reservation of rights against any Guarantor and without notice to, demand upon
or further assent by any Guarantor (which notice, demand and assent requirements
are hereby expressly waived by such Guarantor):  (a) any demand for
payment of any of the Borrower Obligations made by any Secured Party may be
rescinded by such Secured Party or otherwise and any of the Borrower Obligations
continued; (b)
the Borrower Obligations, the liability of any other Person upon or for any part
thereof or any collateral security or guarantee therefor or right of offset with
respect thereto, may, from time to time, in whole or in part, be renewed,
extended, amended, modified, accelerated, compromised, waived, surrendered or
released by, or any indulgence or forbearance in respect thereof granted by, any
Secured Party; (c) any Secured
Document may be amended, modified, supplemented or terminated, in whole or in
part, as the Secured Parties may deem advisable from time to time; (d) any collateral
security, guarantee or right of offset at any time held by any Secured Party for
the payment of the Borrower Obligations may be sold, exchanged, waived,
surrendered or released; (e) any additional
guarantors, makers or endorsers of the Borrower Obligations may from time to
time be obligated on the Borrower Obligations or any additional security or
collateral for the payment and performance of the Borrower Obligations may from
time to time secure the Borrower Obligations; or (f) any other event
shall occur which constitutes a defense or release of sureties
generally.  No Secured Party shall have any obligation to protect,
secure, perfect or insure any Lien at any time held by it as security for the
Borrower Obligations or for the guarantee contained in this Article II or
any Property subject thereto.

     

    
      
        
        

      

      
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    Section
2.05 Waivers.  Each
Guarantor hereby waives any and all notice of the creation, renewal, extension
or accrual of any of the Borrower Obligations and notice of or proof of reliance
by any Secured Party upon the guarantee contained in this Article II or
acceptance of the guarantee contained in this Article II; the Borrower
Obligations, and any of them, shall conclusively be deemed to have been created,
contracted or incurred, or renewed, extended, amended or waived, in reliance
upon the guarantee contained in this Article II and no notice of creation
of the Borrower Obligations or any extension of credit already or hereafter
contracted by or extended to the Borrower need be given to any Guarantor; and
all dealings between the Borrower and any of the Guarantors, on the one hand,
and the Secured Parties, on the other hand, likewise shall be conclusively
presumed to have been had or consummated in reliance upon the guarantee
contained in this Article II.  Each Guarantor waives diligence,
presentment, protest, demand for payment and notice of default or nonpayment to
or upon the Borrower or any of the Guarantors with respect to the Borrower
Obligations.

     

    Section
2.06 Guaranty Absolute and
Unconditional.

     

    (a) Each
Guarantor understands and agrees that the guarantee contained in this
Article II is, and shall be construed as, a continuing, completed, absolute
and unconditional guarantee of payment, and each Guarantor hereby waives any
defense of a surety or guarantor or any other obligor on any obligations arising
in connection with or in respect of any of the following and hereby agrees that
its obligations hereunder shall not be discharged or otherwise affected as a
result of any of the following:

     

    (i) the
invalidity or unenforceability of any Secured Document, any of the Borrower
Obligations or any other collateral security therefor or guarantee or right of
offset with respect thereto at any time or from time to time held by any Secured
Party;

     

    (ii) any
defense, set-off or counterclaim (other than a defense of payment or
performance) which may at any time be available to or be asserted by the
Borrower or any other Person against any Secured Party;

     

    (iii) the
insolvency, bankruptcy arrangement, reorganization, adjustment, composition,
liquidation, disability, dissolution or lack of power of the Borrower or any
other Guarantor or any other Person at any time liable for the payment of all or
part of the Obligations, including any discharge of, or bar or stay against
collecting, any Obligation (or any part of them or interest therein) in or as a
result of such proceeding;

     

    (iv) any sale,
lease or transfer of any or all of the assets of the Borrower or any other
Guarantor, or any changes in the shareholders of the Borrower or any other
Guarantor;

     

    (v) any
change in the corporate existence (including its constitution, laws, rules,
regulations or power), structure or ownership of any Grantor or in the
relationship between the Borrower and any Grantor;

     

    (vi) the fact
that any Collateral or Lien contemplated or intended to be given, created or
granted as security for the repayment of the Obligations shall not be properly
perfected or created, or shall prove to be unenforceable or subordinate to any
other Lien, it being recognized and agreed by each of the Guarantors that it is
not entering into this Agreement in reliance on, or in contemplation of the
benefits of, the validity, enforceability, collectability or value of any of the
Collateral for the Obligations;

     

    
      
        
        

      

      
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    (vii) the
absence of any attempt to collect the Obligations or any part of them from any
Grantor;

     

    (viii) (A) any
Secured Party’s election, in any proceeding instituted under Chapter 11 of the
Bankruptcy Code, of the application of Section 1111(b)(2) of the Bankruptcy
Code; (B) any borrowing or grant of a Lien by the Borrower, as
debtor-in-possession, or extension of credit, under Section 364 of the
Bankruptcy Code; (C) the disallowance, under Section 502 of the Bankruptcy
Code, of all or any portion of any Secured Party’s claim (or claims) for
repayment of the Obligations; (D) any use of cash collateral under
Section 363 of the Bankruptcy Code; (E) any agreement or stipulation as to
the provision of adequate protection in any bankruptcy proceeding; (F) the
avoidance of any Lien in favor of the Secured Parties or any of them for any
reason; or (G) failure by any Secured Party to file or enforce a claim against
the Borrower or its estate in any bankruptcy or insolvency case or proceeding;
or

     

    (ix) any other
circumstance or act whatsoever, including any action or omission of the type
described in Section 2.04 (with or without notice to or knowledge of the
Borrower or such Guarantor), which constitutes, or might be construed to
constitute, an equitable or legal discharge of the Borrower for the Borrower
Obligations, or of such Guarantor under the guarantee contained in this
Article II, in bankruptcy or in any other instance.

     

    (b) When
making any demand hereunder or otherwise pursuing its rights and remedies
hereunder against any Guarantor, any Secured Party may, but shall be under no
obligation to, join or make a similar demand on or otherwise pursue or exhaust
such rights and remedies as it may have against the Borrower, any other
Guarantor or any other Person or against any collateral security or guarantee
for the Borrower Obligations or any right of offset with respect thereto, and
any failure by any Secured Party to make any such demand, to pursue such other
rights or remedies or to collect any payments from the Borrower, any other
Guarantor or any other Person or to realize upon any such collateral security or
guarantee or to exercise any such right of offset, or any release of the
Borrower, any other Guarantor or any other Person or any such collateral
security, guarantee or right of offset, shall not relieve any Guarantor of any
obligation or liability hereunder, and shall not impair or affect the rights and
remedies, whether express, implied or available as a matter of law, of any
Secured Party against any Guarantor.  For the purposes hereof “demand”
shall include the commencement and continuance of any legal
proceedings.

     

    Section
2.07 Reinstatement.  The
guarantee contained in this Article II shall continue to be effective, or
be reinstated, as the case may be, if at any time payment, or any part thereof,
of any of the Borrower Obligations is rescinded or must otherwise be restored or
returned by any Secured Party upon the insolvency, bankruptcy, dissolution,
liquidation or reorganization of the Borrower or any Guarantor, or upon or as a
result of the appointment of a receiver, intervenor or conservator of, or
trustee or similar officer for, the Borrower or any Guarantor or any substantial
part of its Property, or otherwise, all as though such payments had not been
made.

     

    
      
        
        

      

      
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    Section
2.08 Payments.  Each
Guarantor hereby guarantees that payments hereunder will be paid to the
Administrative Agent, for the ratable benefit of the Secured Parties, without
set-off, deduction or counterclaim, in U.S. dollars, in immediately available
funds, at the offices of the Administrative Agent specified in
Section 12.01 of the Term Loan Agreement (or from time to time designated
in accordance with the terms thereof).

     

    ARTICLE
III

    Grant
of Security Interest

     

    Section
3.01 Grant of Security
Interest.  Each Grantor hereby pledges, assigns and transfers
to the Administrative Agent, and hereby grants to the Administrative Agent, for
the ratable benefit of the Secured Parties, a first priority continuing security
interest in, lien on and right of setoff against, all of the following Property
now owned or at any time hereafter acquired by such Grantor or in which such
Grantor now has or at any time in the future may acquire any right, title or
interest and whether now existing or hereafter coming into existence
(collectively, the “Collateral”), as
collateral security for the prompt and complete payment and performance when due
(whether at the stated maturity, by acceleration or otherwise) of such Grantor’s
Obligations:

     

    (a) all
Accounts;

     

    (b) all
Chattel Paper (whether Tangible Chattel Paper or Electronic Chattel
Paper);

     

    (c) all
Commercial Tort Claims (including, without limitation, with respect to the
matters set forth on Schedule 3);

     

    (d) all
Contracts (except for any Contract that will terminate automatically upon the
grant of security interests hereunder, provided, however, that any such Contract
shall automatically cease to be excluded from the Collateral at such time as (i)
the prohibition of the creation of a Lien in such Contract is no longer in
effect or is rendered ineffective as a matter of law, (ii) the Grantors have
obtained the consent of the other parties to such Contract to the creation of a
Lien in such Contract (which consent, upon the request of the Administrative
Agent, Grantors will obtain), or (iii) the breach, default, event of default or
any other conditions otherwise giving rise to the exclusion of such Contract
from Collateral under this clause (d) shall cease to exist);

     

    (e) all
Deposit Accounts other than payroll, withholding tax and other fiduciary Deposit
Accounts;

     

    (f) all
Documents;

     

    (g) all
Equipment;

     

    (h) all
Fixtures;

     

    (i) all
General Intangibles;

     

    
      
        
        

      

      
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    (j) all
Instruments;

     

    (k) all
Intellectual Property;

     

    (l) all
Inventory;

     

    (m) all
Securities Accounts and Investment Property;

     

    (n) all
Letter-of-Credit Rights (whether or not the letter of credit is evidenced by a
writing);

     

    (o) all other
Property not otherwise described above (except for any Property specifically
excluded from any defined term used in any clause of this section
above);

     

    (p) all books
and records pertaining to the Collateral; and

     

    (q) to the
extent not otherwise included, all Proceeds, Supporting Obligations and products
of any and all of the foregoing and all collateral security and guarantees given
by any Person with respect to any of the foregoing.

     

    Section
3.02 Transfer of Pledged
Securities.  Subject to the Intercreditor Agreement, all
certificates or instruments representing or evidencing the Pledged Securities
shall be delivered to and held pursuant hereto by the Administrative Agent or a
Person designated by the Administrative Agent and shall be in suitable form for
transfer by delivery, or shall be accompanied by duly executed instruments of
transfer or assignment in blank, and accompanied by any required transfer tax
stamps to effect the pledge of the Pledged Securities to the Administrative
Agent.  Notwithstanding the preceding sentence, at the Administrative
Agent’s discretion, all Pledged Securities must be delivered or transferred in
such manner as to permit the Administrative Agent to be a “protected purchaser”
to the extent of its security interest as provided in Section 8.303 of the
UCC (if the Administrative Agent otherwise qualifies as a protected
purchaser).  During the continuance of an Event of Default, the
Administrative Agent shall have the right, at any time in its discretion and
without notice, to transfer to or to register in the name of the Administrative
Agent or any of its nominees any or all of the Pledged Securities, subject only
to the revocable rights of the relevant Grantor specified in Section
6.03.  In addition, during the continuance of an Event of Default, the
Administrative Agent shall have the right at any time to exchange certificates
or instruments representing or evidencing Pledged Securities for certificates or
instruments of smaller or larger denominations.

     

    ARTICLE
IV

    Representations
and Warranties

     

    To induce
the Administrative Agent and the Lenders to enter into the Term Loan Agreement
and to induce the Lenders to make their respective loans to, each Grantor hereby
represents and warrants to the Administrative Agent and each Lender
that:

     

    Section
4.01 Representations in Term Loan
Agreement.  In the case of each Guarantor, the representations
and warranties set forth in Article VII of the Term Loan Agreement as they
relate to such Guarantor or to the Loan Documents to which such Guarantor is a
party, each of which is hereby incorporated by reference, are true and correct,
and the Administrative Agent and the Lenders shall be entitled to rely on each
of them, provided that each reference in each such representation and warranty
to the Borrower’s knowledge shall, for the purposes of this Section 4.01, be
deemed to be a reference to such Guarantor’s knowledge.

     

    
      
        
        

      

      
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    Section
4.02 Title; No Other
Liens.  Except for the security interest granted to the
Administrative Agent for the ratable benefit of the Secured Parties pursuant to
this Agreement and the other Liens permitted to exist on the Collateral by the
Term Loan Agreement, such Grantor owns each item of the Collateral free and
clear of any and all Liens or claims of others.  No financing
statement or other public notice with respect to all or any part of the
Collateral is on file or of record in any public office, except such as have
been filed in favor of the Administrative Agent, for the ratable benefit of the
Secured Parties, pursuant to this Agreement or as are permitted by the Term Loan
Agreement.  Schedule 7 is a complete list of any existing permitted
financing statements or other public notice with respect to all or any part of
the Collateral on the date hereof.  For the avoidance of doubt, it is
understood and agreed that any Grantor may, as part of its business, grant
licenses to third parties to use Intellectual Property owned or developed by a
Grantor.  For purposes of this Agreement and the other Loan Documents,
such licensing activity shall not constitute a “Lien” on such Intellectual
Property.  Each of the Administrative Agent and each Lender
understands that any such licenses may be exclusive to the applicable licensees,
and such exclusivity provisions may limit the ability of the Administrative
Agent to utilize, sell, lease or transfer the related Intellectual Property or
otherwise realize value from such Intellectual Property pursuant
hereto.

     

    Section
4.03 Perfected First Priority
Liens.  The security interests granted pursuant to this
Agreement (a)
upon completion of the filings and other actions specified on Schedule 3 (which,
in the case of all filings and other documents referred to on said Schedule,
have been delivered to the Administrative Agent in completed and duly executed
form, except for such filings and other documents to be delivered after the date
hereof pursuant to the Term Loan Agreement) will constitute  valid
perfected security interests in favor of the Administrative Agent, for the
ratable benefit of the Secured Parties, as collateral security for such
Grantor’s Obligations, in all of the Collateral, enforceable in accordance with
the terms hereof against all creditors of such Grantor and any Persons
purporting to purchase any Collateral from such Grantor and (b) are prior to all
other Liens on the Collateral in existence on the date hereof subject only to
Liens securing the loans and commitments under the Senior Revolving Credit
Documents which have priority over the Liens on the Collateral and all other
Liens permitted by Section 9.03 of the Term Loan Agreement.

     

    Section
4.04 Grantor
Information.  On the date hereof, the correct legal name of
such Grantor, all names and trade names that such Grantor has used in the last
five years, such Grantor’s jurisdiction of organization and each jurisdiction of
organization of such Grantor over the last five years, such Grantor’s
organizational number (if any), taxpayor identification number, and the
location(s) of such Grantor’s chief executive office or sole place of business
or principal residence, as the case may be, over the last five years are
specified on Schedule 4.  The Administrative Agent has received a
certified charter, certificate of incorporation or other organization document
and good standing certificate as of a date which is recent to the date
hereof.

     

    
      
        
        

      

      
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    Section
4.05 Inventory and
Equipment.  On the date hereof, any Inventory and the Equipment
(other than mobile goods) are kept at the locations listed on Schedule
5.

     

    Section
4.06 Deposit Accounts and
Securities Accounts.  Schedule 8 correctly identifies all
Deposit Accounts and Securities Accounts owned by each Grantor and institutions
holding such Deposit Accounts or Securities Accounts on the date
hereof.

     

    Section
4.07 Farm
Products.  None of the Collateral constitutes, or is the
Proceeds of, Farm Products.

     

    Section
4.08 Investment
Property.

     

    (a) The
Pledged Securities required to be pledged hereunder and under the Term Loan
Agreement by such Grantor on the date hereof are listed in Schedule
2.  The shares of Pledged Securities pledged by such Grantor hereunder
constitute all the issued and outstanding shares of all classes of the Equity
Interests of each Issuer owned by such Grantor.  All the shares of the
Pledged Securities have been duly and validly issued and are fully paid and
nonassessable; and such Grantor is the record and beneficial owner of, and has
good and marketable title to, the Investment Property pledged by it hereunder,
free of any and all Liens or options in favor of, or claims of, any other
Person, except the security interest created by this Agreement, Liens securing
the loans and commitments under the Senior Revolving Credit Documents and all
other Liens permitted by Section 9.03 of the Term Loan Agreement, and has rights
in or the power to transfer the Investment Property in which a Lien is granted
by it hereunder, free and clear of any Lien except Liens securing the loans and
commitments under the Senior Revolving Credit Documents or any other Liens
permitted by Section 9.03 of the Term Loan Agreement.

     

    (b) There are
no restrictions on transfer (that have not been waived or otherwise consented
to) in the LLC Agreement governing any Pledged LLC Interest or the Partnership
Agreement governing any Pledged Partnership Interest or any other agreement
relating thereto which would limit or restrict:  (i) the grant of a
security interest in the Pledged LLC Interests or the Pledged Partnership
Interests, (ii) the perfection of such security interest or (iii) the exercise
of remedies in respect of such perfected security interest in the Pledged LLC
Interests or the Pledged Partnership Interests, in each case, as contemplated by
this Agreement.  Upon the exercise of remedies in respect of the
Pledged LLC Interests or the Pledged Partnership Interests, a transferee or
assignee of a membership interest or a partnership interest, as the case may be,
of such LLC or Partnership, as the case may be, shall become a member or
partner, as the case may be, of such LLC or Partnership, as the case may be,
entitled to participate in the management thereof and, upon the transfer of the
entire interest of such Grantor, such Grantor shall cease to be a member or
partner, as the case may be.

     

    (c) Each of
the Pledged Notes constitutes the legal, valid and binding obligation of the
obligor with respect thereto, enforceable in accordance with its terms, subject
to the effects of bankruptcy, insolvency, fraudulent conveyance, reorganization,
moratorium and other similar laws relating to or affecting creditors’ rights
generally, general equitable principles (whether considered in a proceeding in
equity or at law) and an implied covenant of good faith and fair
dealing.

     

    
      
        
        

      

      
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    Section
4.09 Receivables.

     

    (a) No amount
payable to such Grantor under or in connection with any Receivable is evidenced
by any Instrument or Chattel Paper which has not been delivered to the
Administrative Agent.

     

    (b) None of
the obligors on any Receivables is a Governmental Authority.

     

    (c) The
amounts represented by such Grantor to the Lenders from time to time as owing to
such Grantor in respect of the Receivables will at such times be
accurate.

     

    Section
4.10 Contracts.

     

    (a) No
consent of any party (other than such Grantor) to any Contract is required, or
purports to be required, in connection with the execution, delivery and
performance of this Agreement, except as has been obtained.

     

    (b) No
consent or authorization of, filing with or other act by or in respect of any
Governmental Authority is required in connection with the execution, delivery,
performance, validity or enforceability of any of the Contracts by any party
thereto other than those which have been duly obtained, made or performed, are
in full force and effect and do not subject the scope of any such Contract to
any material adverse limitation, either specific or general in
nature.

     

    (c) Neither
such Grantor nor (to the best of such Grantor’s knowledge) any of the other
parties to the Contracts is in default in the performance or observance of any
of the terms thereof.

     

    (d) The
right, title and interest of such Grantor in, to and under the Contracts are not
subject to any defenses, offsets, counterclaims or claims.

     

    (e) Such
Grantor has delivered to the Administrative Agent a complete and correct copy of
each material Contract, including all amendments, supplements and other
modifications thereto.

     

    (f) No amount
payable to such Grantor under or in connection with any Contract is evidenced by
any Instrument or Chattel Paper which has not been delivered to the
Administrative Agent.

     

    (g) None of
the parties to any Contract is a Governmental Authority.

     

    Section
4.11 Intellectual
Property.

     

    (a) Schedule
6 lists all Intellectual Property owned by such Grantor in its own name on the
date hereof.

     

    (b) On the
date hereof, all material Intellectual Property is valid, subsisting, unexpired
and enforceable, has not been abandoned and does not infringe the intellectual
property rights of any other Person.

     

    
      
        
        

      

      
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    (c) Except as
set forth in Schedule 6, on the date hereof, none of the Intellectual Property
is the subject of any licensing or franchise agreement pursuant to which such
Grantor is the licensor or franchisor.

     

    (d) No
holding, decision or judgment has been rendered by any Governmental Authority
which would limit, cancel or question the validity of, or such Grantor’s rights
in, any Intellectual Property in any respect that could reasonably be expected
to have a Material Adverse Effect.

     

    (e) No action
or proceeding is pending, or, to the knowledge of such Grantor, threatened, on
the date hereof (i) seeking to limit, cancel or question the validity of any
Intellectual Property or such Grantor’s ownership interest therein, or (ii)
which, if adversely determined, would have a material adverse effect on the
value of any Intellectual Property.

     

    Section
4.12 Commercial Tort
Claims.

     

    (a) On the
date hereof, except to the extent listed in Schedule 3, no Grantor has rights in
any Commercial Tort Claim with potential value in excess of
$100,000.

     

    (b) Upon the
filing of a financing statement covering any Commercial Tort Claim referred to
in Section 5.08 against such Grantor in the jurisdiction specified in Schedule
3, the security interest granted in such Commercial Tort Claim will constitute a
valid perfected security interest in favor of the Administrative Agent, for the
ratable benefit of the Secured Parties, as collateral security for such
Grantor’s Obligations, enforceable in accordance with the terms hereof against
all creditors of such Grantor and any Persons purporting to purchase such
Collateral from such Grantor, which security interest shall be prior to all
other Liens on such Collateral except for unrecorded liens permitted by the Term
Loan Agreement which have priority over the Liens on such Collateral by
operation of law.

     

    Section
4.13 Benefit to the
Guarantors.  The Borrower is a member of an affiliated group of
companies that includes such Grantor, and the Borrower and the other Grantors
are engaged in related businesses.  Such Grantor may reasonably be
expected to benefit, directly or indirectly, from the Transactions; and such
Grantor has determined that this Agreement is convenient to the conduct,
promotion and attainment of the business of such Grantor.

     

    ARTICLE
V

    Covenants

     

    Each
Grantor covenants and agrees with the Administrative Agent and the Lenders that,
from and after the date of this Agreement until the Borrower Obligations shall
have been irrevocably and indefeasibly paid in full in cash:

     

    Section
5.01 Covenants and Events of
Default in Term Loan Agreement.  Such Grantor shall take, or
shall refrain from taking, as the case may be, each action that is necessary to
be taken or not taken, as the case may be, by it so that no Default or Event of
Default is caused by the failure to take such action or to refrain from taking
such action by such Grantor.

     

    
      
        
        

      

      
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    Section
5.02 Delivery of Instruments,
Certificated Securities and Chattel Paper.  If any amount
payable under or in connection with any of the Collateral shall be or become
evidenced by any Instrument, Certificated Security or Chattel Paper, such
Instrument, Certificated Security or Chattel Paper shall be immediately
delivered to the Administrative Agent, duly indorsed in a manner satisfactory to
the Administrative Agent, to be held as Collateral pursuant to this
Agreement.

     

    Section
5.03 Maintenance of Perfected
Security Interest; Further Documentation.

     

    (a) Such
Grantor shall maintain the security interest created by this Agreement as a
perfected security interest having at least the priority described in Section
4.03 and shall defend such security interest against the claims and demands of
all Persons whomsoever (other than holders of Liens securing the loans and
commitments under the Senior Revolving Credit Documents and all other Liens
permitted by Section 9.03 of the Term Loan Agreement), subject to the rights of
such Grantor under the Loan Documents to dispose of the Collateral.

     

    (b) Such
Grantor will furnish to the Administrative Agent and the Lenders from time to
time statements and schedules further identifying and describing the assets and
property of such Grantor and such other reports in connection therewith as the
Administrative Agent may reasonably request, all in reasonable
detail.

     

    (c) At any
time and from time to time, upon the written request of the Administrative
Agent, and at the sole expense of such Grantor, such Grantor will promptly and
duly execute and deliver, and have recorded, such further instruments and
documents and take such further actions as the Administrative Agent may
reasonably request for the purpose of obtaining or preserving the full benefits
of this Agreement and of the rights and powers herein granted, including,
without limitation, filing any financing or continuation statements under the
UCC (or other similar laws) in effect in any jurisdiction with respect to the
security interests created hereby.  Subject to the Intercreditor
Agreement, and without limiting the above obligations of the Grantors, upon the
request of the Administrative Agent, and at the sole expense of such Grantor,
such Grantor will promptly take such further actions as the Administrative Agent
may reasonably request for the purpose of obtaining or preserving the full
benefits of this Agreement and of the rights and powers herein granted,
including, without limitation, (i) delivering certificated securities and (ii)
in the case of Investment Property, Securities Account, Deposit Accounts,
Letter-of-Credit Rights and any other relevant Collateral, taking any actions
reasonably necessary to enable the Administrative Agent to obtain “control”
(within the meaning of the applicable Uniform Commercial Code) with respect
thereto.

     

    Section
5.04 Changes in Locations, Name,
Etc.  Such Grantor recognizes that financing statements
pertaining to the Collateral have been or may be filed where such Grantor
maintains any Collateral or is organized.  Without limitation of
Section 8.01(k) of the Term Loan Agreement or any other covenant herein,
such Grantor will not cause or permit any change in (a) its corporate
name or in any trade name used to identify it in the conduct of its business or
in the ownership of its Properties, (b) the location of
its chief executive office or principal place of business, (c) its identity or
corporate structure or its jurisdiction of organization or its organizational
identification number in such jurisdiction of organization or 

     

    
      
        
        

      

      
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    (d) its federal
taxpayer identification number, unless, in each case, such Grantor shall have
first (i) notified
the Administrative Agent of such change at least thirty (30) days prior the
effective date of such change and (ii) taken all
action reasonably requested by the Administrative Agent for the purpose of
maintaining the perfection and priority of the Administrative Agent’s security
interest under this Agreement.  In any notice furnished pursuant to
this Section 5.04, such Grantor will expressly state in a conspicuous manner
that the notice is required by this Agreement and contains facts that may
require additional filings of financing statements or other notices for the
purposes of continuing perfection of the Administrative Agent’s security
interest in the Collateral.  At the request of the Administrative
Agent, on or prior to the occurrence of such event, the Borrower will provide to
the Administrative Agent and the Lenders an opinion of counsel, in form and
substance reasonably satisfactory to the Administrative Agent, to the effect
that such event will not impair the validity of the security interest hereunder,
the perfection and priority thereof, the enforceability of the Loan Documents,
and such other matters as may be requested by the Administrative
Agent.

     

    Section
5.05 Notices.  Such
Grantor will advise the Administrative Agent and the Lenders promptly, in
reasonable detail, of:

     

    (a) any Lien
(other than Liens securing the loans and commitments under the Senior Revolving
Credit Documents, security interests created hereby or any other Liens permitted
under the Term Loan Agreement) on any of the Collateral which would adversely
affect the ability of the Administrative Agent to exercise any of its remedies
hereunder; and

     

    (b) of the
occurrence of any other event which could reasonably be expected to have a
material adverse effect on the aggregate value of the Collateral or on the
security interests created hereby.

     

    Section
5.06 Investment
Property.

     

    (a) Subject
to the Intercreditor Agreement, if such Grantor shall receive any certificate
(including, without limitation, any certificate representing a dividend or a
distribution in connection with any reclassification, increase or reduction of
capital or any certificate issued in connection with any reorganization), option
or rights in respect of the Equity Interests of any Issuer, whether in addition
to, in substitution of, as a conversion of, or in exchange for, any shares of
the Pledged Securities, or otherwise in respect thereof, such Grantor shall
accept the same as the agent of the Secured Parties, hold the same in trust for
the Secured Parties, segregated from other Property of such Grantor, and deliver
the same forthwith to the Administrative Agent in the exact form received, duly
indorsed by such Grantor to the Administrative Agent, if required, together with
an undated stock power covering such certificate duly executed in blank by such
Grantor and with, if the Administrative Agent so requests, signature guaranteed,
to be held by the Administrative Agent, subject to the terms hereof, as
additional collateral security for the Obligations.  Any sums paid
upon or in respect of the Investment Property upon the liquidation or
dissolution of any Issuer shall be paid over to the Administrative Agent to be
held by it hereunder as additional collateral security for the Obligations, and
in case any distribution of capital shall be made on or in respect of the
Investment Property or any property shall be distributed upon or with respect to
the Investment Property pursuant to the recapitalization or reclassification of
the capital of any Issuer or pursuant to the reorganization thereof, the
property so distributed shall, unless otherwise subject to a perfected security
interest in favor of the Administrative Agent, be delivered to the
Administrative Agent to be held by it hereunder as additional collateral
security for the Obligations.  If any sums of money or property so
paid or distributed in respect of the Investment Property shall be received by
such Grantor, such Grantor shall, until such money or property is paid or
delivered to the Administrative Agent, hold such money or property in trust for
the Administrative Agent and the Lenders, segregated from other funds of such
Grantor, as additional collateral security for the Obligations.

     

    
      
        
        

      

      
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    (b) Without
the prior written consent of the Administrative Agent, such Grantor will not (i)
unless otherwise expressly permitted hereby or under the other Loan Documents,
vote to enable, or take any other action to permit, any Issuer to issue any
Equity Interests of any nature or to issue any other securities convertible into
or granting the right to purchase or exchange for any Equity Interests of any
nature of any Issuer, (ii) sell, assign, transfer, exchange, or otherwise
dispose of, or grant any option with respect to, the Investment Property or
Proceeds thereof (except pursuant to a transaction expressly permitted by the
Term Loan Agreement), (iii) create, incur or permit to exist any Lien or option
in favor of, or any claim of any Person with respect to, any of the Investment
Property or Proceeds thereof, or any interest therein, except for Liens securing
the loans and commitments under the Senior Revolving Credit Documents, all other
Liens permitted by Section 9.03 of the Term Loan Agreement, and the security
interests created by this Agreement or (iv) enter into any agreement or
undertaking restricting the right or ability of such Grantor or the
Administrative Agent to sell, assign or transfer any of the Investment Property
or Proceeds thereof.

     

    (c) In the
case of each Grantor that is an Issuer, such Issuer agrees that (i) it will be
bound by the terms of this Agreement relating to the Investment Property issued
by it and will comply with such terms insofar as such terms are applicable to
it, (ii) it will notify the Administrative Agent promptly in writing of the
occurrence of any of the events described in Section 5.06(a) with respect to the
Investment Property issued by it and (iii) the terms of Section 6.03(c) and
Section 6.07 shall apply to it, mutatis mutandis, with
respect to all actions that may be required of it pursuant to Section 6.03(c) or
Section 6.07 with respect to the Investment Property issued by it.  In
the case of any Issuer that is not a Grantor hereunder, such Grantor shall
promptly cause such Issuer to execute and deliver to the Administrative Agent an
Acknowledgment and Consent.

     

    (d) In the
case of each Grantor that is a partner in a Partnership, such Grantor hereby
consents to the extent required by the applicable Partnership Agreement to the
pledge by each other Grantor, pursuant to the terms hereof, of the Pledged
Partnership Interests in such Partnership and to the transfer of such Pledged
Partnership Interests to the Administrative Agent or its nominee and to the
substitution of the Administrative Agent or its nominee as a substituted partner
in such Partnership with all the rights, powers and duties of a general partner
or a limited partner, as the case may be.  In the case of each Grantor
that is a member of an LLC, such Grantor hereby consents to the extent required
by the applicable LLC Agreement to the pledge by each other Grantor, pursuant to
the terms hereof, of the Pledged LLC Interests in such LLC and to the transfer
of such Pledged LLC Interests to the Administrative Agent or its nominee and to
the substitution of the Administrative Agent or its nominee as a substituted
member of the LLC with all the rights, powers and duties of a member of such
LLC.

     

    
      
        
        

      

      
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    (e) Such
Grantor shall not agree to any amendment of a Partnership Agreement or an LLC
Agreement that (i) in any way adversely affects the perfection of the security
interest of the Administrative Agent in the Pledged Partnership Interests or
Pledged LLC Interests pledged by such Grantor hereunder or (ii) causes any
Partnership Agreement or LLC Agreement to include an election to treat the
membership interests or partnership interests of such Grantor as a security
under Section 8.103 of the UCC.

     

    (f) Subject
to the Intercreditor Agreement, such Grantor shall furnish to the Administrative
Agent such stock or equity powers and other instruments as may be required by
the Administrative Agent to assure the transferability of the Investment
Property when and as often as may be reasonably requested by the Administrative
Agent.

     

    (g) The
Pledged Securities set forth on Schedule 2 will at all times constitute not less
than 100% of the Equity Interests of the Issuer thereof owned by such
Grantor.  Such Grantor will not permit any Issuer of any of the
Pledged Securities set forth on Schedule 2 to issue any new shares of any class
of Equity Interests of such Issuer without the prior written consent of the
Administrative Agent.

     

    Section
5.07 Intellectual
Property.

     

    (a) Such
Grantor (either itself or through licensees) will (i) continue to use each
material Trademark on each and every trademark class of goods applicable to its
current line as reflected in its current catalogs, brochures and price lists in
order to maintain such Trademark in full force free from any claim of
abandonment for non-use, (ii) maintain as in the past the quality of products
and services offered under such Trademark, (iii) use such Trademark with the
appropriate notice of registration and all other notices and legends required by
applicable Governmental Requirements, (iv) not adopt or use any mark which is
confusingly similar or a colorable imitation of such Trademark unless the
Administrative Agent, for the ratable benefit of the Secured Parties, shall
obtain a perfected security interest in such mark pursuant to this Agreement and
(v) not (and not permit any licensee or sublicensee thereof to) do any act or
knowingly omit to do any act whereby such Trademark may become invalidated or
impaired in any way.

     

    (b) Such
Grantor (either itself or through licensees) will not do any act, or omit to do
any act, whereby any material Patent may become forfeited, abandoned or
dedicated to the public.

     

    (c) Such
Grantor (either itself or through licensees) (i) will employ each material
Copyright and (ii) will not (and will not permit any licensee or sublicensee
thereof to) do any act or knowingly omit to do any act whereby any material
portion of the Copyrights may become invalidated or otherwise
impaired.  Such Grantor will not (either itself or through licensees)
do any act whereby any material portion of the Copyrights may fall into the
public domain.

     

    (d) Such
Grantor (either itself or through licensees) will not do any act that knowingly
uses any material Intellectual Property to infringe the intellectual property
rights of any other Person.

     

    
      
        
        

      

      
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    (e) Such
Grantor will notify the Administrative Agent and the Lenders immediately if it
knows, or has reason to know, that any application or registration relating to
any material Intellectual Property may become forfeited, abandoned or dedicated
to the public, or of any adverse determination or development (including,
without limitation, the institution of, or any such determination or development
in, any proceeding in the United States Patent and Trademark Office, the United
States Copyright Office or any court or tribunal in any country) regarding such
Grantor’s ownership of, or the validity of, any material Intellectual Property
or such Grantor’s right to register the same or to own and maintain the
same.

     

    (f) Whenever
such Grantor, either by itself or through any agent, employee, licensee or
designee, shall file an application for the registration of any Intellectual
Property with the United States Patent and Trademark Office, the United States
Copyright Office or any similar office or agency in any other country or any
political subdivision thereof, such Grantor shall report such filing to the
Administrative Agent within five Business Days after the last day of the fiscal
quarter in which such filing occurs.  Upon request of the
Administrative Agent, such Grantor shall execute and deliver, and have recorded,
any and all agreements, instruments, documents, and papers as the Administrative
Agent may request to evidence the Administrative Agent’s and the Lenders’
security interest in any Copyright, Patent or Trademark and the goodwill and
General Intangibles of such Grantor relating thereto or represented
thereby.

     

    (g) Such
Grantor will take all reasonable and necessary steps, including, without
limitation, in any proceeding before the United States Patent and Trademark
Office, the United States Copyright Office or any similar office or agency in
any other country or any political subdivision thereof, to maintain and pursue
each application (and to obtain the relevant registration) and to maintain each
registration of the material Intellectual Property, including, without
limitation, filing of applications for renewal, affidavits of use and affidavits
of incontestability.

     

    (h) In the
event that any material Intellectual Property is infringed, misappropriated or
diluted by a third party, such Grantor shall (i) take such actions as such
Grantor shall reasonably deem appropriate under the circumstances to protect
such Intellectual Property and (ii) if such Intellectual Property is of material
economic value, promptly notify the Administrative Agent after it learns thereof
and sue for infringement, misappropriation or dilution, to seek injunctive
relief where appropriate and to recover any and all damages for such
infringement, misappropriation or dilution.

     

    Section
5.08 Commercial Tort
Claims.  If such Grantor shall obtain an interest in any
Commercial Tort Claim with a potential value in excess of $100,000, such Grantor
shall, within 30 days of obtaining such interest, sign and deliver documentation
acceptable to the Administrative Agent granting a security interest under the
terms and provisions of this Agreement in and to such Commercial Tort
Claim.

     

    
      
        
        

      

      
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    ARTICLE
VI

    Remedial
Provisions

     

    Section
6.01 Certain Matters Relating to
Receivables. 

     

    (a) The
Administrative Agent shall have the right to make test verifications of the
Receivables in any manner and through any medium that it reasonably considers
advisable, and each Grantor shall furnish all such assistance and information as
the Administrative Agent may require in connection with such test
verifications.  At any time and from time to time, upon the
Administrative Agent’s request and at the expense of the relevant Grantor, such
Grantor shall cause independent public accountants or others satisfactory to the
Administrative Agent to furnish to the Administrative Agent reports showing
reconciliations, aging and test verifications of, and trial balances for, the
Receivables.

     

    (b) The
Administrative Agent hereby authorizes each Grantor to collect such Grantor’s
Receivables and the Administrative Agent may curtail or terminate said authority
at any time after the occurrence and during the continuance of an Event of
Default.  If required by the Administrative Agent at any time after
the occurrence and during the continuance of an Event of Default, any payments
of Receivables, when collected by any Grantor, (i) shall be forthwith (and, in
any event, within two Business Days) deposited by such Grantor in the exact form
received, duly indorsed by such Grantor to the Administrative Agent if required,
in a Collateral Account maintained under the sole dominion and control of the
Administrative Agent, subject to withdrawal by the Administrative Agent for the
account of the Lenders only as provided in Section 6.05 and (ii) until so turned
over, shall be held by such Grantor in trust for the Administrative Agent and
the Lenders, segregated from other funds of such Grantor.  Each such
deposit of Proceeds of Receivables shall be accompanied by a report identifying
in reasonable detail the nature and source of the payments included in the
deposit.

     

    (c) At the
Administrative Agent’s request, each Grantor shall deliver to the Administrative
Agent all original and other documents evidencing, and relating to, the
agreements and transactions which gave rise to the Receivables, including,
without limitation, all original orders, invoices and shipping
receipts.

     

    Section
6.02 Communications with
Obligors; Grantors Remain Liable.

     

    (a) The
Administrative Agent in its own name or in the name of others may at any time
communicate with obligors under the Receivables and parties to the Contracts to
verify with them to the Administrative Agent’s satisfaction the existence,
amount and terms of any Receivables.

     

    (b) Upon the
request of the Administrative Agent at any time after the occurrence and during
the continuance of an Event of Default, each Grantor shall notify obligors on
the Receivables that the Receivables have been assigned to the Administrative
Agent for the ratable benefit of the Secured Parties and that payments in
respect thereof shall be made directly to the Administrative Agent.

     

    
      
        
        

      

      
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    (c) Anything
herein to the contrary notwithstanding, each Grantor shall remain liable under
each of the Receivables to observe and perform all the conditions and
obligations to be observed and performed by it thereunder, all in accordance
with the terms of any agreement giving rise thereto.  Neither the
Administrative Agent nor any Lender shall have any obligation or liability under
any Receivable (or any agreement giving rise thereto) by reason of or arising
out of this Agreement or the receipt by the Administrative Agent or any Lender
of any payment relating thereto, nor shall the Administrative Agent or any
Lender be obligated in any manner to perform any of the obligations of any
Grantor under or pursuant to any Receivable (or any agreement giving rise
thereto), to make any payment, to make any inquiry as to the nature or the
sufficiency of any payment received by it or as to the sufficiency of any
performance by any party thereunder, to present or file any claim, to take any
action to enforce any performance or to collect the payment of any amounts which
may have been assigned to it or to which it may be entitled at any time or
times.

     

    Section
6.03 Pledged Securities.

     

    (a) Unless an
Event of Default shall have occurred and be continuing and the Administrative
Agent shall have given notice to the relevant Grantor of the Administrative
Agent’s intent to exercise its corresponding rights pursuant to Section 6.03(b),
each Grantor shall be permitted to receive all cash dividends paid in respect of
the Pledged Securities and all payments made in respect of the Pledged Notes, in
each case paid in the normal course of business of the relevant Issuer and
consistent with past practice, to the extent permitted in the Term Loan
Agreement, and to exercise all voting and corporate or other organizational
rights with respect to the Investment Property; provided, however, that no vote
shall be cast or corporate or other organizational right exercised or other
action taken which would impair the Collateral or which would be inconsistent
with or result in any violation of any provision of the Term Loan Agreement,
this Agreement or any other Loan Document.

     

    (b) If an
Event of Default shall occur and be continuing and the Administrative Agent
shall give notice of its intent to exercise such rights to the relevant Grantor
or Grantors, (i) the Administrative Agent shall have the right to receive any
and all cash dividends, payments or other Proceeds paid in respect of the
Investment Property and make application thereof to the Obligations in such
order as the Administrative Agent may determine, and (ii) any or all of the
Investment Property shall be registered in the name of the Administrative Agent
or its nominee, and the Administrative Agent or its nominee may thereafter
exercise (A) all voting, corporate and other rights pertaining to such
Investment Property at any meeting of shareholders of the relevant Issuer or
Issuers or otherwise and (B) any and all rights of conversion, exchange and
subscription and any other rights, privileges or options pertaining to such
Investment Property as if it were the absolute owner thereof (including, without
limitation, the right to exchange at its discretion any and all of the
Investment Property upon the merger, consolidation, reorganization,
recapitalization or other fundamental change in the corporate or other
organizational structure of any Issuer, or upon the exercise by any Grantor or
the Administrative Agent of any right, privilege or option pertaining to such
Investment Property, and in connection therewith, the right to deposit and
deliver any and all of the Investment Property with any committee, depositary,
transfer agent, registrar or other designated agency upon such terms and
conditions as the Administrative Agent may determine), all without liability
except to account for property actually received by it, but the Administrative
Agent shall have no duty to any Grantor to exercise any such right, privilege or
option and shall not be responsible for any failure to do so or delay in so
doing.

     

    
      
        
        

      

      
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    (c) Each
Grantor hereby authorizes and instructs each Issuer of any Investment Property
pledged by such Grantor hereunder to (i) comply with any instruction received by
it from the Administrative Agent in writing that (A) states that an Event of
Default has occurred and is continuing and (B) is otherwise in accordance with
the terms of this Agreement, without any other or further instructions from such
Grantor, and each Grantor agrees that each Issuer shall be fully protected in so
complying, and (ii) unless otherwise expressly permitted hereby, pay any
dividends or other payments with respect to the Investment Property directly to
the Administrative Agent.

     

    Section
6.04 Proceeds to be Turned Over
to Administrative Agent.  In addition to the rights of the
Administrative Agent and the Lenders specified in Section 6.01 with respect to
payments of Receivables, if an Event of Default shall occur and be continuing,
all Proceeds received by any Grantor consisting of cash, checks and other
near-cash items shall be held by such Grantor in trust for the Administrative
Agent and the Lenders, segregated from other funds of such Grantor, and shall,
forthwith upon receipt by such Grantor, be turned over to the Administrative
Agent in the exact form received by such Grantor (duly indorsed by such Grantor
to the Administrative Agent, if required).  All Proceeds received by
the Administrative Agent hereunder shall be held by the Administrative Agent in
a Collateral Account maintained under its sole dominion and
control.  All Proceeds while held by the Administrative Agent in a
Collateral Account (or by such Grantor in trust for the Administrative Agent and
the Lenders) shall continue to be held as collateral security for all the
Obligations and shall not constitute payment thereof until applied as provided
in Section 6.05.

     

    Section
6.05 Application of
Proceeds.  At such intervals as may be agreed upon by the
Borrower and the Administrative Agent, or, if an Event of Default shall have
occurred and be continuing, at any time at the Administrative Agent’s election,
the Administrative Agent may apply all or any part of Proceeds constituting
Collateral, whether or not held in any Collateral Account, and any proceeds of
the guarantee set forth in Article II, in payment of the Obligations in
accordance with Section 10.02(c) of the Term Loan
Agreement.    

     

    Section
6.06 Code and Other
Remedies.

     

    (a) If an
Event of Default shall occur and be continuing, the Administrative Agent, on
behalf of the Secured Parties, may exercise, in addition to all other rights and
remedies granted to them in this Agreement, the other Loan Documents and in any
other instrument or agreement securing, evidencing or relating to the
Obligations, all rights and remedies of a secured party under the UCC or any
other applicable law or otherwise available at law or equity.  Without
limiting the generality of the foregoing, the Administrative Agent, without
demand of performance or other demand, presentment, protest, advertisement or
notice of any kind (except any notice required by law referred to below) to or
upon any Grantor or any other Person (all and each of which demands, defenses,
advertisements and notices are hereby waived), may in such circumstances
forthwith collect, receive, appropriate and realize upon the Collateral, or any
part thereof, and/or may forthwith sell, lease, assign, give option or options
to purchase, or otherwise dispose of and deliver the Collateral or any part
thereof (or contract to do any of the foregoing), in one or more parcels at
public or private sale or sales, at any exchange, broker’s board or office of
any Secured Party or elsewhere upon such terms and conditions as it may deem
advisable and at such prices as it may deem best, for cash or on credit or for
future delivery without assumption of any credit risk.  

     

    
      
        
        

      

      
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    Any
Secured Party shall have the right upon any such public sale or sales, and, to
the extent permitted by law, upon any such private sale or sales, to purchase
the whole or any part of the Collateral so sold, free of any right or equity of
redemption in any Grantor, which right or equity is hereby waived and
released.  Each Grantor further agrees, at the Administrative Agent’s
request, to assemble the Collateral and make it available to the Administrative
Agent at places which the Administrative Agent shall reasonably select, whether
at such Grantor’s premises or elsewhere.  Any such sale or transfer by
the Administrative Agent either to itself or to any other Person shall be
absolutely free from any claim of right by any Grantor, including any equity or
right of redemption, stay or appraisal which any Grantor has or may have under
any rule of law, regulation or statute now existing or hereafter adopted (and
each Grantor hereby waives any rights it may have in respect
thereof).  Upon any such sale or transfer, the Administrative Agent
shall have the right to deliver, assign and transfer to the purchaser or
transferee thereof the Collateral so sold or transferred.  The
Administrative Agent shall apply the net proceeds of any action taken by it
pursuant to this Section 6.06, after deducting all reasonable costs and expenses
of every kind incurred in connection therewith or incidental to the care or
safekeeping of any of the Collateral or in any way relating to the Collateral or
the rights of the Administrative Agent and the Secured Parties hereunder,
including, without limitation, reasonable attorneys’ fees and disbursements, to
the payment in whole or in part of the Obligations, in accordance with
Section 10.02(c) of the Term Loan Agreement, and only after such
application and after the payment by the Administrative Agent of any other
amount required by any provision of law, including, without limitation, Section
9.615(a)(3) of the UCC, need the Administrative Agent account for the surplus,
if any, to any Grantor.  To the extent permitted by applicable law,
each Grantor waives all claims, damages and demands it may acquire against the
Administrative Agent or any Secured Party arising out of the exercise by them of
any rights hereunder except to the extent caused by the gross negligence or
willful misconduct of the Administrative Agent or such Secured Party or their
respective agents.  If any notice of a proposed sale or other
disposition of Collateral shall be required by law, such notice shall be deemed
reasonable and proper if given at least 10 days before such sale or other
disposition.

     

    (b) In the
event that the Administrative Agent elects not to sell the Collateral, the
Administrative Agent retains its rights to dispose of or utilize the Collateral
or any part or parts thereof in any manner authorized or permitted by law or in
equity, and to apply the proceeds of the same towards payment of the
Obligations.  Each and every method of disposition of the Collateral
described in this Agreement shall constitute disposition in a commercially
reasonable manner.  Without limitation of the foregoing, any
disposition involving three (3) or more bidders that are “accredited investors”
(within the meaning of the Securities Act) shall constitute disposition in a
commercially reasonable manner.

     

    (c) The
Administrative Agent may appoint any Person as agent to perform any act or acts
necessary or incident to any sale or transfer of the Collateral.

     

    Section
6.07 Registration
Rights.

     

    (a) If the
Administrative Agent shall determine to exercise its right to sell any or all of
the Pledged Securities pursuant to Section 6.06, and if in the opinion of the
Administrative Agent it is necessary or advisable to have the Pledged
Securities, or that portion thereof to be sold, registered under the provisions
of the Securities Act, the relevant Grantor will cause the Issuer thereof to

     

    
      
        
        

      

      
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    (i)
execute and deliver, and cause the directors and officers of such Issuer to
execute and deliver, all such instruments and documents, and do or cause to be
done all such other acts as may be, in the opinion of the Administrative Agent,
necessary or advisable to register the Pledged Securities, or that portion
thereof to be sold, under the provisions of the Securities Act, (ii) use its
best efforts to cause the registration statement relating thereto to become
effective and to remain effective for a period of one year from the date of the
first public offering of the Pledged Securities, or that portion thereof to be
sold and (iii) make all amendments thereto and/or to the related prospectus
which are reasonably necessary or advisable, all in conformity with the
requirements of the Securities Act and the rules and regulations of the
Securities and Exchange Commission applicable thereto.  Each Grantor
agrees to cause such Issuer to comply with the provisions of the securities or
“Blue Sky” laws of any and all jurisdictions which the Administrative Agent
shall designate and to make available to its security holders, as soon as
practicable, an earnings statement (which need not be audited) which will
satisfy the provisions of Section 11(a) of the Securities Act.

     

    (b) Each
Grantor recognizes that the Administrative Agent may be unable to effect a
public sale of any or all the Pledged Securities, by reason of certain
prohibitions contained in the Securities Act and applicable state securities
laws or otherwise, or  may determine that a public sale is
impracticable or not commercially reasonable, and, accordingly, may resort to
one or more private sales thereof to a restricted group of purchasers which will
be obliged to agree, among other things, to acquire such securities for their
own account for investment and not with a view to the distribution or resale
thereof.  Each Grantor acknowledges and agrees that any such private
sale may result in prices and other terms less favorable than if such sale were
a public sale and, notwithstanding such circumstances, agrees that any such
private sale shall be deemed to have been made in a commercially reasonable
manner.  The Administrative Agent shall be under no obligation to
delay a sale of any of the Pledged Securities for the period of time necessary
to permit the Issuer thereof to register such securities for public sale under
the Securities Act, or under applicable state securities laws, even if such
Issuer would agree to do so.

     

    (c) Each
Grantor agrees to use its best efforts to do or cause to be done all such other
acts as may be necessary to make such sale or sales of all or any portion of the
Pledged Securities pursuant to this Section 6.07 valid and binding and in
compliance with any and all other applicable Governmental
Requirements.  Each Grantor further agrees that a breach of any of the
covenants contained in this Section 6.07 will cause irreparable injury to the
Secured Parties, that the Secured Parties have no adequate remedy at law in
respect of such breach and, as a consequence, that each and every covenant
contained in this Section 6.07 shall be specifically enforceable against such
Grantor, and such Grantor hereby waives and agrees not to assert any defenses
against an action for specific performance of such covenants except for a
defense that no Event of Default has occurred under the Term Loan
Agreement.

     

    Section
6.08 Waiver;
Deficiency.  Each Grantor waives and agrees not to assert any
rights or privileges which it may acquire under the UCC.  Each Grantor
shall remain liable for any deficiency if the proceeds of any sale or other
disposition of the Collateral are insufficient to pay its Obligations and the
reasonable fees and disbursements of any attorneys employed by the
Administrative Agent or any Secured Party to collect such
deficiency.

     

    
      
        
        

      

      
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    Section
6.09 Non-Judicial
Enforcement.  The Administrative Agent may enforce its rights
hereunder without prior judicial process or judicial hearing, and to the extent
permitted by law, each Grantor expressly waives any and all legal rights which
might otherwise require the Administrative Agent to enforce its rights by
judicial process.

     

    ARTICLE
VII

    The
Administrative Agent

     

    Section
7.01 Administrative Agent’s
Appointment as Attorney-in-Fact, Etc.

     

    (a) Each
Grantor hereby irrevocably constitutes and appoints the Administrative Agent and
any officer or agent thereof, with full power of substitution, as its true and
lawful attorney-in-fact with full irrevocable power and authority in the place
and stead of such Grantor and in the name of such Grantor or in its own name,
for the purpose of carrying out the terms of this Agreement, to take any and all
appropriate action and to execute any and all documents and instruments which
may be necessary or desirable to accomplish the purposes of this Agreement, and,
without limiting the generality of the foregoing, each Grantor hereby gives the
Administrative Agent the power and right, on behalf of such Grantor, without
notice to or assent by such Grantor, to do any or all of the
following:

     

    (i) in the
name of such Grantor or its own name, or otherwise, take possession of and
indorse and collect any checks, drafts, notes, acceptances or other instruments
for the payment of moneys due under any Receivable or with respect to any other
Collateral and file any claim or take any other action or proceeding in any
court of law or equity or otherwise deemed appropriate by the Administrative
Agent for the purpose of collecting any and all such moneys due under any
Receivable or with respect to any other Collateral whenever
payable;

     

    (ii) in the
case of any Intellectual Property, execute and deliver, and have recorded, any
and all agreements, instruments, documents and papers as the Administrative
Agent may request to evidence the Administrative Agent’s and the Secured
Parties’ security interest in such Intellectual Property and the goodwill and
general intangibles of such Grantor relating thereto or represented
thereby;

     

    (iii) pay or
discharge Taxes and Liens levied or placed on or threatened against the
Collateral, effect any repairs or any insurance called for by the terms of this
Agreement or any other Loan Document and pay all or any part of the premiums
therefor and the costs thereof;

     

    (iv) execute,
in connection with any sale provided for in Section 6.06 or Section 6.07, any
indorsements, assignments or other instruments of conveyance or transfer with
respect to the Collateral; and

     

    (v) (A)
direct any party liable for any payment under any of the Collateral to make
payment of any and all moneys due or to become due thereunder directly to the
Administrative Agent or as the Administrative Agent shall direct; (B) ask or
demand for, collect, and receive payment of and receipt for, any and all moneys,
claims and other amounts due or to become due at any time in respect of or
arising out of any Collateral; (C) sign and indorse any invoices, freight or
express bills, bills of lading, storage or warehouse receipts, drafts against
debtors, assignments, verifications, notices and other documents in connection
with any of the Collateral; 

     

    
      
        
        

      

      
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    (D) in
the name of such Grantor, or in its own name, or otherwise, commence and
prosecute any suits, actions or proceedings at law or in equity in any court of
competent jurisdiction to collect the Collateral or any portion thereof and to
enforce any other right in respect of any Collateral; (E) defend any suit,
action or proceeding brought against such Grantor with respect to any
Collateral; (F) settle, compromise or adjust any such suit, action or proceeding
and, in connection therewith, give such discharges or releases as the
Administrative Agent may deem appropriate; (G) assign any Copyright, Patent or
Trademark (along with the goodwill of the business to which any such Copyright,
Patent or Trademark pertains), throughout the world for such term or terms, on
such conditions, and in such manner, as the Administrative Agent shall in its
sole discretion determine; and (H) generally, sell, transfer, pledge and make
any agreement with respect to or otherwise deal with any of the Collateral as
fully and completely as though the Administrative Agent were the absolute owner
thereof for all purposes, and do, at the Administrative Agent’s option and such
Grantor’s expense, at any time, or from time to time, all acts and things which
the Administrative Agent deems necessary to protect, preserve or realize upon
the Collateral and the Administrative Agent’s and the Secured Parties’ security
interests therein and to effect the intent of this Agreement, all as fully and
effectively as such Grantor might do.

     

    Anything
in this Section 7.01(a) to the contrary notwithstanding, the Administrative
Agent agrees that it will not exercise any rights under the power of attorney
provided for in this Section 7.01(a) unless an Event of Default shall have
occurred and be continuing.

     

    (b) If any
Grantor fails to perform or comply with any of its agreements contained herein,
the Administrative Agent, at its option, but without any obligation so to do,
may perform or comply, or otherwise cause performance or compliance, with such
agreement.

     

    (c) The
expenses of the Administrative Agent incurred in connection with actions
undertaken as provided in this Section 7.01, together with interest thereon at
the post-default rate specified in Section 3.02(c) of the Term Loan Agreement,
but in no event to exceed the Highest Lawful Rate, from the date of payment by
the Administrative Agent to the date reimbursed by the relevant Grantor, shall
be payable by such Grantor to the Administrative Agent on demand.

     

    (d) Each
Grantor hereby ratifies all that said attorneys shall lawfully do or cause to be
done by virtue hereof.  All powers, authorizations and agencies
contained in this Agreement are coupled with an interest and are irrevocable
until this Agreement is terminated and the security interests created hereby are
released.

     

    Section
7.02 Duty of Administrative
Agent.  The Administrative Agent’s sole duty with respect to
the custody, safekeeping and physical preservation of the Collateral in its
possession, under Section 9.207 of the UCC or otherwise, shall be to deal with
it in the same manner as the Administrative Agent deals with similar Property
for its own account, and the Administrative Agent shall be deemed to have
exercised reasonable care in the custody and preservation of the Collateral in
its possession if the Collateral is accorded treatment substantially equal to
that which comparable secured parties accord comparable
collateral.  

     

    
      
        
        

      

      
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    Neither
the Administrative Agent, any Secured Party nor any of their Related Parties
shall be liable for failure to demand, collect or realize upon any of the
Collateral or for any delay in doing so or shall be under any obligation to sell
or otherwise dispose of any Collateral upon the request of any Grantor or any
other Person or to take any other action whatsoever with regard to the
Collateral or any part thereof.  The powers conferred on the
Administrative Agent and the Secured Parties hereunder are solely to protect the
Administrative Agent’s and the Secured Parties’ interests in the Collateral and
shall not impose any duty upon the Administrative Agent or any Secured Party to
exercise any such powers.  The Administrative Agent and the Secured
Parties shall be accountable only for amounts that they actually receive as a
result of the exercise of such powers, and neither they nor any of their Related
Parties shall be responsible to any Grantor for any act or failure to act
hereunder, except for their own gross negligence or willful
misconduct.  To the fullest extent permitted by applicable law, the
Administrative Agent shall be under no duty whatsoever to make or give any
presentment, notice of dishonor, protest, demand for performance, notice of
non-performance, notice of intent to accelerate, notice of acceleration, or
other notice or demand in connection with any Collateral or the Obligations, or
to take any steps necessary to preserve any rights against any Grantor or other
Person or ascertaining or taking action with respect to calls, conversions,
exchanges, maturities, tenders or other matters relative to any Collateral,
whether or not it has or is deemed to have knowledge of such
matters.  Each Grantor, to the extent permitted by applicable law,
waives any right of marshaling in respect of any and all Collateral, and waives
any right to require the Administrative Agent or any Secured Party to proceed
against any Grantor or other Person, exhaust any Collateral or enforce any other
remedy which the Administrative Agent or any Secured Party now has or may
hereafter have against any Grantor or other Person.

     

    Section
7.03 Execution of Financing
Statements.  Pursuant to the UCC and any other applicable law,
each Grantor authorizes the Administrative Agent to file or record financing
statements and other filing or recording documents or instruments with respect
to the Collateral without the signature of such Grantor in such form and in such
offices as the Administrative Agent determines appropriate to perfect the
security interests of the Administrative Agent under this
Agreement.  A photographic or other reproduction of this Agreement
shall be sufficient as a financing statement or other filing or recording
document or instrument for filing or recording in any
jurisdiction.  Each Grantor authorizes the Administrative Agent to use
the collateral description “all personal property” or “all assets” in any such
financing statements.  Each Grantor hereby ratifies and authorizes the
filing by the Administrative Agent of any financing statement with respect to
the Collateral made prior to the date hereof.

     

    Section
7.04 Authority of Administrative
Agent.  Each Grantor acknowledges that the rights and
responsibilities of the Administrative Agent under this Agreement with respect
to any action taken by the Administrative Agent or the exercise or non-exercise
by the Administrative Agent of any option, voting right, request, judgment or
other right or remedy provided for herein or resulting or arising out of this
Agreement shall, as between the Administrative Agent and the Secured Parties, be
governed by the Term Loan Agreement and by such other agreements with respect
thereto as may exist from time to time among them, but, as between the
Administrative Agent and the Grantors, the Administrative Agent shall be
conclusively presumed to be acting as agent for the Secured Parties with full
and valid authority so to act or refrain from acting, and no Grantor shall be
under any obligation, or entitlement, to make any inquiry respecting such
authority.

     

    
      
        
        

      

      
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    ARTICLE
VIII

    Subordination
of Indebtedness

     

    Section
8.01 Subordination of All Grantor
Claims.  As used herein, the term “Grantor Claims” shall
mean all debts and obligations of the Borrower or any other Grantor to any other
Grantor, whether such debts and obligations now exist or are hereafter incurred
or arise, or whether the obligation of the debtor thereon be direct, contingent,
primary, secondary, several, joint and several, or otherwise, and irrespective
of whether such debts or obligations be evidenced by note, contract, open
account, or otherwise, and irrespective of the Person or Persons in whose favor
such debts or obligations may, at their inception, have been, or may hereafter
be created, or the manner in which they have been or may hereafter be acquired
by.  After and during the continuation of an Event of Default, no
Grantor shall receive or collect, directly or indirectly, from any obligor in
respect thereof any amount upon the Grantor Claims.

     

    Section
8.02 Claims in
Bankruptcy.  In the event of receivership, bankruptcy,
reorganization, arrangement, debtor’s relief, or other insolvency proceedings
involving any Grantor, the Administrative Agent on behalf of the Administrative
Agent and the Secured Parties shall have the right to prove their claim in any
proceeding, so as to establish their rights hereunder and receive directly from
the receiver, trustee or other court custodian, dividends and payments which
would otherwise be payable upon Grantor Claims.  Each Grantor hereby
assigns such dividends and payments to the Administrative Agent for the benefit
of the Administrative Agent and the Secured Parties for application against the
Borrower Obligations as provided under Section 10.02(c) of the Term Loan
Agreement.  Should the Administrative Agent or any Secured Party
receive, for application upon the Obligations, any such dividend or payment
which is otherwise payable to any Grantor, and which, as between such Grantors,
shall constitute a credit upon the Grantor Claims, then upon irrevocable and
indefeasible payment in full in cash of the Borrower Obligations, the expiration
of all Letters of Credit outstanding under the Term Loan Agreement and the
termination of all of the Commitments, the intended recipient shall become
subrogated to the rights of the Administrative Agent and the Secured Parties to
the extent that such payments to the Administrative Agent and the Secured
Parties on the Grantor Claims have contributed toward the liquidation of the
Obligations, and such subrogation shall be with respect to that proportion of
the Obligations which would have been unpaid if the Administrative Agent and the
Secured Parties had not received dividends or payments upon the Grantor
Claims.

     

    Section
8.03 Payments Held in
Trust.  In the event that, notwithstanding Section 8.01 and
Section 8.02, any Grantor should receive any fund, payment, claim or
distribution which is prohibited by such Sections, then it agrees: (a) to hold in trust
for the Administrative Agent and the Secured Parties an amount equal to the
amount of all funds, payments, claims or distributions so received and (b) that it shall
have absolutely no dominion over the amount of such funds, payments, claims or
distributions except to pay them promptly to the Administrative Agent, for the
benefit of the Secured Parties; and each Grantor covenants promptly to pay the
same to the Administrative Agent.

     

    
      
        
        

      

      
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    Section
8.04 Liens
Subordinate.  Each Grantor agrees that, until the Borrower
Obligations are irrevocably and indefeasibly paid in full in cash, any Liens
securing payment of the Grantor Claims shall be and remain inferior and
subordinate to any Liens securing payment of the Obligations, regardless of
whether such encumbrances in favor of such Grantor, the Administrative Agent or
any Secured Party presently exist or are hereafter created or
attach.  Without the prior written consent of the Administrative
Agent, no Grantor, during the period in which any of the Borrower Obligations
are outstanding, shall (a) exercise or
enforce any creditor’s right it may have against any debtor in respect of the
Grantor Claims or (b) foreclose,
repossess, sequester or otherwise take steps or institute any action or
proceeding (judicial or otherwise, including without limitation the commencement
of or joinder in any liquidation, bankruptcy, rearrangement, debtor’s relief or
insolvency proceeding) to enforce any Lien held by it.

     

    Section
8.05 Notation of
Records.  Upon the request of the Administrative Agent, all
promissory notes and all accounts receivable ledgers or other evidence of the
Grantor Claims accepted by or held by any Grantor shall contain a specific
written notice thereon that the indebtedness evidenced thereby is subordinated
under the terms of this Agreement.

     

    ARTICLE
IX

    Miscellaneous

     

    Section
9.01 No Waiver by Course of
Conduct; Cumulative Remedies.  Neither the Administrative Agent
nor any Secured Party shall by any act (except by a written instrument pursuant
to Section 9.04), delay, indulgence, omission or otherwise be deemed to have
waived any right or remedy hereunder or to have acquiesced in any Default or
Event of Default.  No failure to exercise, nor any delay in
exercising, on the part of the Administrative Agent or any Secured Party, and no
course of dealing with respect to, any right, power or privilege hereunder, or
any abandonment or discontinuance of steps to enforce such right, power or
privilege, shall operate as a waiver thereof.  No single or partial
exercise of any right, power or privilege hereunder shall preclude any other or
further exercise thereof or the exercise of any other right, power or
privilege.  A waiver by the Administrative Agent or any Secured Party
of any right or remedy hereunder on any one occasion shall not be construed as a
bar to any right or remedy which the Administrative Agent or such Secured Party
would otherwise have on any future occasion.  The rights and remedies
herein provided are cumulative, may be exercised singly or concurrently and are
not exclusive of any other rights or remedies provided by law or
equity.

     

    Section
9.02 Notices.  All
notices and other communications provided for herein shall be given in the
manner and subject to the terms of Section 12.01 of the Term Loan
Agreement; provided that any such notice, request or demand to or upon any
Guarantor shall be addressed to such Guarantor at its notice address set forth
on Schedule 1.

     

    Section
9.03 Enforcement Expenses;
Indemnities.

     

    (a) Each
Guarantor agrees to pay or reimburse each Secured Party and the Administrative
Agent for all its costs and expenses incurred in collecting against such
Guarantor under the guarantee contained in Article II or otherwise enforcing or
preserving any rights under this Agreement and the other Loan Documents to which
such Guarantor is a party, including, without limitation, the fees and
disbursements of counsel (including the allocated fees and expenses of in-house
counsel) to each Secured Party and of counsel to the Administrative
Agent.

     

    
      
        
        

      

      
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    (b) Each
Guarantor agrees to pay, and to save the Administrative Agent and the Secured
Parties harmless from, any and all liabilities with respect to, or resulting
from any delay in paying, any and all Other Taxes which may be payable or
determined to be payable with respect to any of the Collateral or in connection
with any of the transactions contemplated by this Agreement.

     

    (c) Each
Guarantor agrees to pay, and to save the Administrative Agent and the Secured
Parties harmless from, any and all liabilities, obligations, losses, damages,
penalties, actions, judgments, suits, costs, expenses or disbursements of any
kind or nature whatsoever with respect to the execution, delivery, enforcement,
performance and administration of this Agreement to the extent the Borrower
would be required to do so pursuant to Section 12.03 of the Term Loan
Agreement.

     

    (d) The
agreements in this Section 9.03 shall survive repayment of the Obligations and
all other amounts payable under the Term Loan Agreement and the other Loan
Documents.

     

    Section
9.04 Amendments in
Writing.  None of the terms or provisions of this Agreement may
be waived, amended, supplemented or otherwise modified except in accordance with
Section 12.02 of the Term Loan Agreement.

     

    Section
9.05 Successors and
Assigns.  The provisions of this Agreement shall be binding
upon the Grantors and their successors and assigns and shall inure to the
benefit of the Administrative Agent and the Secured Parties and their respective
successors and assigns; provided that no Grantor may assign, transfer or
delegate any of its rights or obligations under this Agreement without the prior
written consent of the Administrative Agent, and any such purported assignment,
transfer or delegation shall be null and void.

     

    Section
9.06 Survival; Revival;
Reinstatement.

     

    (a) All
covenants, agreements, representations and warranties made by any Grantor herein
and in the certificates or other instruments delivered in connection with or
pursuant to this Agreement or any other Loan Document to which it is a party
shall be considered to have been relied upon by the Administrative Agent and the
Lenders and shall survive the execution and delivery of this Agreement and the
making of any Loans, regardless of any investigation made by any such other
party or on its behalf and notwithstanding that the Administrative Agent, the
other agents or any Lender may have had notice or knowledge of any Default or
incorrect representation or warranty at the time any credit is extended
hereunder, and shall continue in full force and effect as long as the principal
of or any accrued interest on any Loan or any fee or any other amount payable
under the Term Loan Agreement is outstanding and unpaid.  The
provisions of Section 9.03 shall survive and remain in full force and effect
regardless of the consummation of the transactions contemplated hereby, the
repayment of the Loans or the termination of this Agreement, any other Loan
Document or any provision hereof or thereof.

     

    
      
        
        

      

      
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    (b) To the
extent that any payments on the Obligations or proceeds of any Collateral are
subsequently invalidated, declared to be fraudulent or preferential, set aside
or required to be repaid to a trustee, debtor in possession, receiver or other
Person under any bankruptcy law, common law or equitable cause, then to such
extent, the Obligations so satisfied shall be revived and continue as if such
payment or proceeds had not been received and the Administrative Agent’s and the
Secured Parties’ Liens, security interests, rights, powers and remedies under
this Agreement and each other Loan Document shall continue in full force and
effect.  In such event, each Loan Document shall be automatically
reinstated and the Borrower shall take such action as may be reasonably
requested by the Administrative Agent and the Secured Parties to effect such
reinstatement.

     

    Section
9.07 Counterparts; Integration;
Effectiveness.

     

    (a) This
Agreement may be executed in multiple counterparts (and by different parties
hereto on different counterparts), each of which shall constitute an original,
but all of which when taken together shall constitute a single
contract.

     

    (b) This
Agreement, the other Loan Documents and any separate letter agreements with
respect to fees payable to the Administrative Agent constitute the entire
contract among the parties relating to the subject matter hereof and thereof and
supersede any and all previous agreements and understandings, oral or written,
relating to the subject matter hereof and thereof.  THIS AGREEMENT AND THE OTHER LOAN
DOCUMENTS REPRESENT THE FINAL AGREEMENT AMONG THE PARTIES HERETO AND THERETO AND
MAY NOT BE CONTRADICTED BY EVIDENCE OF PRIOR, CONTEMPORANEOUS OR SUBSEQUENT ORAL
AGREEMENTS OF THE PARTIES.  THERE ARE NO UNWRITTEN ORAL AGREEMENTS
BETWEEN THE PARTIES.

     

    (c) This
Agreement shall become effective when it shall have been executed by the
Administrative Agent and when the Administrative Agent shall have received
counterparts hereof which, when taken together, bear the signatures of each of
the other parties hereto, and thereafter shall be binding upon and inure to the
benefit of the parties hereto, the Lenders and their respective successors and
assigns.  Delivery of an executed counterpart of a signature page of
this Agreement by telecopy shall be effective as delivery of a manually executed
counterpart of this Agreement.

     

    Section
9.08 Severability.  Any
provision of this Agreement or any other Loan Document held to be invalid,
illegal or unenforceable in any jurisdiction shall, as to such jurisdiction, be
ineffective to the extent of such invalidity, illegality or unenforceability
without affecting the validity, legality and enforceability of the remaining
provisions hereof or thereof; and the invalidity of a particular provision in a
particular jurisdiction shall not invalidate such provision in any other
jurisdiction.

     

    
      
        
        

      

      
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    Section
9.09 Set-Off.  If
an Event of Default shall have occurred and be continuing, each Lender and each
of its Affiliates is hereby authorized at any time and from time to time,
without notice to such Person or any other Grantor, any such notice being
expressly waived by each Grantor, to the fullest extent permitted by law, to set
off and appropriate and apply any and all deposits (general or special, time or
demand, provisional or final), in any currency, and any other credits,
indebtedness, claims or obligations of whatsoever kind, in any currency, whether
direct or indirect, absolute or contingent, matured or unmatured, at any time
held or owing by such Lender or Affiliate to or for the credit or the account of
any Grantor against any of and all the obligations and liabilities of the
Grantor owed to such Lender now or hereafter existing under this Agreement or
any other Loan Document, irrespective of whether or not such Lender shall have
made any demand under this Agreement or any other Loan Document and although
such obligations may be unmatured.  The rights of each Lender under
this Section 9.09 are in addition to other rights and remedies (including other
rights of setoff) which such Lender or its Affiliates may have.

     

    Section
9.10 Governing Law; Submission to
Jurisdiction;
Waiver of Jury Trial.

     

    (a) THIS
AGREEMENT SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF
THE STATE OF TEXAS.

     

    (b) ANY LEGAL
ACTION OR PROCEEDING WITH RESPECT TO THIS AGREEMENT OR ANY OTHER LOAN DOCUMENT
MAY BE BROUGHT IN THE COURTS OF THE STATE OF TEXAS OR OF THE UNITED STATES OF
AMERICA FOR THE SOUTHERN DISTRICT OF TEXAS, AND, BY EXECUTION AND DELIVERY OF
THIS AGREEMENT, EACH OF THE PARTIES HEREBY ACCEPTS FOR ITSELF AND (TO THE EXTENT
PERMITTED BY LAW) IN RESPECT OF ITS PROPERTY, GENERALLY AND UNCONDITIONALLY, THE
JURISDICTION OF THE AFORESAID COURTS.  EACH PARTY HEREBY IRREVOCABLY
WAIVES ANY OBJECTION, INCLUDING, WITHOUT LIMITATION, ANY OBJECTION TO THE LAYING
OF VENUE OR BASED ON THE GROUNDS OF FORUM NON CONVENIENS, WHICH IT MAY NOW OR
HEREAFTER HAVE TO THE BRINGING OF ANY SUCH ACTION OR PROCEEDING IN SUCH
RESPECTIVE JURISDICTIONS.  THIS SUBMISSION TO JURISDICTION IS
NON-EXCLUSIVE AND DOES NOT PRECLUDE A PARTY FROM OBTAINING JURISDICTION OVER
ANOTHER PARTY IN ANY COURT OTHERWISE HAVING JURISDICTION.

     

    (c) EACH
PARTY IRREVOCABLY CONSENTS TO THE SERVICE OF PROCESS OF ANY OF THE
AFOREMENTIONED COURTS IN ANY SUCH ACTION OR PROCEEDING BY THE MAILING OF COPIES
THEREOF BY REGISTERED OR CERTIFIED MAIL, POSTAGE PREPAID, TO IT AT THE ADDRESS
SPECIFIED IN SECTION 12.01 OF THE TERM LOAN AGREEMENT (OR SUCH OTHER
ADDRESS AS IS SPECIFIED PURSUANT TO SECTION 12.01 OF THE TERM LOAN
AGREEMENT) OR SCHEDULE 1 HERETO, AS APPLICABLE, SUCH SERVICE TO BECOME EFFECTIVE
THIRTY (30) DAYS AFTER SUCH MAILING.  NOTHING HEREIN SHALL AFFECT THE
RIGHT OF A PARTY OR ANY HOLDER OF A NOTE TO SERVE PROCESS IN ANY OTHER MANNER
PERMITTED BY LAW OR TO COMMENCE LEGAL PROCEEDINGS OR OTHERWISE PROCEED AGAINST
ANOTHER PARTY IN ANY OTHER JURISDICTION.

     

    
      
        
        

      

      
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    (d) EACH
PARTY HEREBY (i) IRREVOCABLY AND UNCONDITIONALLY WAIVES, TO THE FULLEST EXTENT
PERMITTED BY LAW, TRIAL BY JURY IN ANY LEGAL ACTION OR PROCEEDING RELATING TO
THIS AGREEMENT OR ANY OTHER LOAN DOCUMENT AND FOR ANY COUNTERCLAIM THEREIN; (ii)
IRREVOCABLY WAIVES, TO THE MAXIMUM EXTENT NOT PROHIBITED BY LAW, ANY RIGHT IT
MAY HAVE TO CLAIM OR RECOVER IN ANY SUCH LITIGATION ANY SPECIAL, EXEMPLARY,
PUNITIVE OR CONSEQUENTIAL DAMAGES, OR DAMAGES OTHER THAN, OR IN ADDITION TO,
ACTUAL DAMAGES; (iii) CERTIFIES THAT NO PARTY HERETO NOR ANY REPRESENTATIVE OR
AGENT OF COUNSEL FOR ANY PARTY HERETO HAS REPRESENTED, EXPRESSLY OR OTHERWISE,
OR IMPLIED THAT SUCH PARTY WOULD NOT, IN THE EVENT OF LITIGATION, SEEK TO
ENFORCE THE FOREGOING WAIVERS AND (IV) ACKNOWLEDGES THAT IT HAS BEEN INDUCED TO
ENTER INTO THIS AGREEMENT, THE OTHER LOAN DOCUMENTS AND THE TRANSACTIONS
CONTEMPLATED HEREBY AND THEREBY BY, AMONG OTHER THINGS, THE MUTUAL WAIVERS AND
CERTIFICATIONS CONTAINED IN THIS SECTION 9.10.

     

    Section
9.11 Headings.  Article
and Section headings and the Table of Contents used herein are for convenience
of reference only, are not part of this Agreement and shall not affect the
construction of, or be taken into consideration in interpreting, this
Agreement.

     

    Section
9.12 Acknowledgments.  Each
Grantor hereby acknowledges that:

     

    (a) it has
been advised by counsel in the negotiation, execution and delivery of this
Agreement and the other Loan Documents to which it is a party;

     

    (b) neither
the Administrative Agent nor any Secured Party has any fiduciary relationship
with or duty to any Grantor arising out of or in connection with this Agreement
or any of the other Loan Documents, and the relationship between the Grantors,
on the one hand, and the Administrative Agent and Secured Parties, on the other
hand, in connection herewith or therewith is solely that of debtor and creditor;
and

     

    (c) no joint
venture is created hereby or by the other Loan Documents or otherwise exists by
virtue of the transactions contemplated hereby among the Secured Parties or
among the Grantors and the Secured Parties.

     

    (d) Each of
the parties hereto specifically agrees that it has a duty to read this
Agreement, the Security Instruments and the other Loan Documents and agrees that
it is charged with notice and knowledge of the terms of this Agreement, the
Security Instruments and the other Loan Documents; that it has in fact read this
Agreement, the Security Instruments and the other Loan Documents and is fully
informed and has full notice and knowledge of the terms, conditions and effects
thereof; that it has been represented by independent legal counsel of its choice
throughout the negotiations preceding its execution of this Agreement and the
Security Instruments; and has received the advice of its attorney in entering
into this Agreement and the Security Instruments; and that it recognizes that
certain of the terms of this Agreement and the Security Instruments result in
one party assuming the liability inherent in some aspects of the transaction and
relieving the other party of its responsibility for such
liability.  

     

    
      
        
        

      

      
        -34-

        
          

        

      

      
        
        

      

    

     

    EACH PARTY HERETO
AGREES AND COVENANTS THAT IT WILL NOT CONTEST THE VALIDITY OR ENFORCEABILITY OF
ANY EXCULPATORY PROVISION OF THIS AGREEMENT AND THE SECURITY INSTRUMENTS ON THE
BASIS THAT THE PARTY HAD NO NOTICE OR KNOWLEDGE OF SUCH PROVISION OR THAT THE
PROVISION IS NOT “CONSPICUOUS.”

     

    Section
9.13 Additional Grantors and
Additional Pledged
Securities.  Each Subsidiary of the Borrower that is required
to become a party to this Agreement pursuant to Section 8.13 of the Term
Loan Agreement shall become a party hereto as a Grantor for all
purposes of this Agreement upon execution and delivery by such Subsidiary of an
Assumption Agreement and shall thereafter have the same rights, benefits and
obligations as a Grantor party hereto on the date hereof.  Each
Grantor that is required to pledge additional Equity Interests pursuant to the
Term Loan Agreement shall execute and deliver a Supplement.

     

    Section
9.14 Releases.

     

    (a) Release Upon Payment in
Full.  Upon the indefeasible payment in full in cash of the
Borrower Obligations, the security interest granted hereby shall terminate and
all rights to the Collateral shall revert to the applicable Grantor to the
extent such Collateral shall not have been sold or otherwise applied pursuant to
the terms hereof.  Upon any such termination, the Administrative Agent
will, at the Grantors’ expense, execute and deliver to the applicable Grantor
such documents (including, without limitation, UCC-3 termination statements) as
such Grantor shall reasonably request to evidence such termination.

     

    (b) Partial
Releases.  If any of the Collateral shall be sold, transferred
or otherwise disposed of by any Grantor in a transaction permitted by the Term
Loan Agreement, then the Administrative Agent, at the request and sole expense
of such Grantor, shall promptly execute and deliver to such Grantor all releases
or other documents reasonably necessary or desirable for the release of the
Liens created hereby on such Collateral.  At the request and sole
expense of the Borrower, a Guarantor shall be released from its obligations
hereunder in the event that all the Equity Interests of such Guarantor shall be
sold, transferred or otherwise disposed of in a transaction permitted by the
Term Loan Agreement; provided that the Borrower shall have delivered to the
Administrative Agent, at least fifteen Business Days prior to the date of the
proposed release, a written request of a Responsible Officer for release
identifying the relevant Guarantor and the terms of the sale or other
disposition in reasonable detail, including the price thereof and any expenses
in connection therewith, together with a certification by the Borrower stating
that such transaction is in compliance with the Term Loan Agreement and the
other Loan Documents.

     

    (c) Retention in
Satisfaction.  Except as may be expressly applicable pursuant
to Section 9.620 of the UCC, no action taken or omission to act by the
Administrative Agent or the Secured Parties hereunder, including, without
limitation, any exercise of voting or consensual rights or any other action
taken or inaction, shall be deemed to constitute a retention of the Collateral
in satisfaction of the Obligations or otherwise to be in full satisfaction of
the Obligations, and the Obligations shall remain in full force and effect,
until the Administrative Agent and the Secured Parties shall have applied
payments (including, without limitation, collections from Collateral) towards
the Obligations in the full amount then outstanding or until such subsequent
time as is provided in Section 9.14(a).

     

    
      
        
        

      

      
        -35-

        
          

        

      

      
        
        

      

    

     

    Section
9.15 Acceptance.  Each
Grantor hereby expressly waives notice of acceptance of this Agreement,
acceptance on the part of the Administrative Agent and the Secured Parties being
conclusively presumed by their request for this Agreement and delivery of the
same to the Administrative Agent.

     

     

     

    [Remainder
of page intentionally left blank; signature page follows]

     

     

    
      
        
        

      

      
        -36-

        
          

        

      

      
        
        

      

    

     

    IN
WITNESS WHEREOF, each of the undersigned has caused this Guaranty and Collateral
Agreement to be duly executed and delivered as of the date first above
written.

     

     

     

    
      
        	
                BORROWER:

              	
                Petro
      Resources Corporation

              
	 
      	 
      
	 
      	 
      
	 
      	
                By:  /s/ Wayne
      Hall                                                          
      

              
	 
      	
                Name:  Wayne
      Hall

              
	 
      	
                Title:    CEO

              
	 
      	 
      
	 
      	 
      
	 
      	 
      
	 
      	 
      
	
                GUARANTORS:

              	
                PRC
      Williston, LLC

              
	 
      	 
      
	 
      	
                By:  Petro
      Resources Corporation,

              
	 
      	
                        its
      sole member

              
	 
      	 
      
	 
      	 
      
	 
      	
                By:  /s/ Wayne
      Hall                                                           
      

              
	 
      	
                Name:  Wayne
      Hall

              
	 
      	
                Title:    CEO

              

      

     

    
      
        
           

        

        
          
            Signature Page
1 – Guaranty and
Collateral Agreement

          

          
            

          

        

        
           

        

      

    

    

    Acknowledged
and Agreed to as

    of the
date hereof by:

     

     

    
      
        	
                ADMINISTRATIVE
      AGENT:

              	
                CIT CAPITAL USA
      INC.,

              
	 
      	
                as
      Administrative Agent

              
	 
      	 
      
	 
      	 
      
	 
      	
                By:  /s/ George
      McKean                                                   
      

              
	 
      	
                Name:
      George McKean

              
	 
      	
                Title:  
      Vice President

              

      

    

     

     

     

     

     

     

    
      Signature
Page 2 –
Guaranty and Collateral Agreementngru_8k-ex1064.htm

    EXHIBIT 10.64

     

    AGREEMENT
AND PLAN OF MERGER

     

    HealthAxis
Inc.,

     

    Outsourcing
Merger Sub, Inc.,

     

    and

     

    BPO
Management Services, Inc.

     

    Dated
as of September 5, 2008

     

    

    
      
         

      

      
         

        
          

        

      

      
         

      

    

     

    TABLE
OF CONTENTS

     

    
      	 
      	 
      	 
      	
              Page

            
	 
      	 
      	 
      	 
      
	
              ARTICLE
      1 DEFINITIONS, SCHEDULES AND EXHIBITS

            	 
      	
              2

            
	 
      	 
      	 
      	 
      
	
              1.1

            	
              Definitions

            	 
      	
              2

            
	 
      	 
      	 
      	 
      
	
              1.2

            	
              Schedules

            	 
      	
              4

            
	 
      	 
      	 
      	 
      
	
              1.3

            	
              Exhibits

            	 
      	
              5

            
	 
      	 
      	 
      	 
      
	
              ARTICLE
      2 DESCRIPTION OF THE TRANSACTIONS

            	 
      	
              5

            
	 
      	 
      	 
      	 
      
	
              2.1

            	
              BPOMS
      Pre-Merger Steps

            	 
      	
              5

            
	 
      	 
      	 
      	 
      
	
              2.2

            	
              HealthAxis
      Pre-Merger Steps

            	 
      	
              6

            
	 
      	 
      	 
      	 
      
	
              2.3

            	
              The
      Merger

            	 
      	
              8

            
	 
      	 
      	 
      	 
      
	
              2.4

            	
              Effects
      of the Merger

            	 
      	
              8

            
	 
      	 
      	 
      	 
      
	
              2.5

            	
              The
      Closing

            	 
      	
              8

            
	 
      	 
      	 
      	 
      
	
              2.6

            	
              Effective
      Time

            	 
      	
              8

            
	 
      	 
      	 
      	 
      
	
              2.7

            	
              Corporate
      Organization

            	 
      	
              8

            
	 
      	 
      	 
      	 
      
	
              2.8

            	
              Directors
      and Officers of Surviving Corporation and HealthAxis

            	 
      	
              9

            
	 
      	 
      	 
      	 
      
	
              2.9

            	
              Tax
      Consequences

            	 
      	
              9

            
	 
      	 
      	 
      	 
      
	
              ARTICLE
      3 CONVERSION OF SECURITIES

            	 
      	
              9

            
	 
      	 
      	 
      	 
      
	
              3.1

            	
              Conversion
      of Merger Sub Shares

            	 
      	
              9

            
	 
      	 
      	 
      	 
      
	
              3.2

            	
              Conversion
      of BPOMS Common Stock

            	 
      	
              9

            
	 
      	 
      	 
      	 
      
	
              3.3

            	
              Conversion
      of BPOMS Preferred Stock

            	 
      	
              10

            
	 
      	 
      	 
      	 
      
	
              3.4

            	
              Conversion
      of BPOMS Investor Warrants

            	 
      	
              11

            
	 
      	 
      	 
      	 
      
	
              3.5

            	
              Conversion
      of BPOMS Employee Stock Options and Non-Investor Warrants

            	 
      	
              12

            
	 
      	 
      	 
      	 
      
	
              3.6

            	
              Adjustments

            	 
      	
              13

            
	 
      	 
      	 
      	 
      
	
              3.7

            	
              Reservation
      of Shares

            	 
      	
              15

            
	 
      	 
      	 
      	 
      
	
              3.8

            	
              Dissenting
      BPOMS Stockholders

            	 
      	
              16

            
	 
      	 
      	 
      	 
      
	
              ARTICLE
      4 EXCHANGE OF SHARES

            	 
      	
              16

            
	 
      	 
      	 
      	 
      
	
              4.1

            	
              Exchange
      of Common Stock Certificates

            	 
      	
              16

            
	 
      	 
      	 
      	 
      
	
              4.2

            	
              Exchange
      of Preferred Stock Certificates and Penny Warrants

            	 
      	
              18

            
	 
      	 
      	 
      	 
      
	
              4.3

            	
              Withholding
      Rights

            	 
      	
              19

            
	 
      	 
      	 
      	 
      
	
              ARTICLE
      5 REPRESENTATIONS AND WARRANTIES OF BPOMS

            	 
      	
              19

            
	 
      	 
      	 
      	 
      
	
              5.1

            	
              Organization;
      Good Standing; Authority; Compliance with Law

            	 
      	
              20

            

    

     

    i

    

      
        
           

        

        
           

          
            

          

        

        
           

        

      

     

    TABLE
OF CONTENTS

    (continued)

     

    
      	 
      	 
      	 
      	
              Page

            
	 
      	 
      	 
      	 
      
	
              5.2

            	
              Authorization,
      Validity and Effect of Agreements

            	 
      	
              21

            
	 
      	 
      	 
      	 
      
	
              5.3

            	
              Capitalization

            	 
      	
              21

            
	 
      	 
      	 
      	 
      
	
              5.4

            	
              Subsidiaries

            	 
      	
              23

            
	 
      	 
      	 
      	 
      
	
              5.5

            	
              Other
      Interests

            	 
      	
              24

            
	 
      	 
      	 
      	 
      
	
              5.6

            	
              No
      Violation

            	 
      	
              24

            
	 
      	 
      	 
      	 
      
	
              5.7

            	
              SEC
      Filings; Financial Statements

            	 
      	
              25

            
	 
      	 
      	 
      	 
      
	
              5.8

            	
              Litigation

            	 
      	
              26

            
	 
      	 
      	 
      	 
      
	
              5.9

            	
              Absence
      of Certain Changes

            	 
      	
              26

            
	 
      	 
      	 
      	 
      
	
              5.10

            	
              Taxes

            	 
      	
              28

            
	 
      	 
      	 
      	 
      
	
              5.11

            	
              Books
      and Records

            	 
      	
              30

            
	 
      	 
      	 
      	 
      
	
              5.12

            	
              Properties

            	 
      	
              31

            
	 
      	 
      	 
      	 
      
	
              5.13

            	
              Environmental
      Matters

            	 
      	
              31

            
	 
      	 
      	 
      	 
      
	
              5.14

            	
              Brokers

            	 
      	
              32

            
	 
      	 
      	 
      	 
      
	
              5.15

            	
              Related
      Party Transactions

            	 
      	
              32

            
	 
      	 
      	 
      	 
      
	
              5.16

            	
              Contracts
      and Commitments

            	 
      	
              32

            
	 
      	 
      	 
      	 
      
	
              5.17

            	
              Employee
      Matters and Benefit Plans

            	 
      	
              34

            
	 
      	 
      	 
      	 
      
	
              5.18

            	
              Intellectual
      Property

            	 
      	
              38

            
	 
      	 
      	 
      	 
      
	
              5.19

            	
              Anti-Takeover
      Plan

            	 
      	
              42

            
	 
      	 
      	 
      	 
      
	
              5.20

            	
              Shareholder
      Vote Required

            	 
      	
              42

            
	 
      	 
      	 
      	 
      
	
              5.21

            	
              Undisclosed
      Liabilities

            	 
      	
              42

            
	 
      	 
      	 
      	 
      
	
              5.22

            	
              Insurance

            	 
      	
              42

            
	 
      	 
      	 
      	 
      
	
              5.23

            	
              Financial
      Forecast and Relationships with Suppliers, Licensors and
      Customers

            	 
      	
              43

            
	 
      	 
      	 
      	 
      
	
              ARTICLE
      6 REPRESENTATIONS AND WARRANTIES OF HEALTHAXIS AND MERGER
    SUB

            	 
      	
              43

            
	 
      	 
      	 
      	 
      
	
              6.1

            	
              Organization;
      Good Standing; Authority; Compliance with Law

            	 
      	
              43

            
	 
      	 
      	 
      	 
      
	
              6.2

            	
              Authorization,
      Validity and Effect of Agreements

            	 
      	
              44

            
	 
      	 
      	 
      	 
      
	
              6.3

            	
              Capitalization

            	 
      	
              45

            
	 
      	 
      	 
      	 
      
	
              6.4

            	
              Subsidiaries

            	 
      	
              47

            
	 
      	 
      	 
      	 
      
	
              6.5

            	
              Other
      Interests

            	 
      	
              47

            
	 
      	 
      	 
      	 
      
	
              6.6

            	
              No
      Violation

            	 
      	
              47

            

    

     

    ii

    
      
         

      

      
         

        
          

        

      

      
         

      

    

     

    TABLE
OF CONTENTS

    (continued)

     

    
      	 
      	 
      	 
      	
              Page

            
	 
      	 
      	 
      	 
      
	
              6.7

            	
              SEC
      Filings; Financial Statements

            	 
      	
              48

            
	 
      	 
      	 
      	 
      
	
              6.8

            	
              Litigation

            	 
      	
              49

            
	 
      	 
      	 
      	 
      
	
              6.9

            	
              Absence
      of Certain Changes

            	 
      	
              49

            
	 
      	 
      	 
      	 
      
	
              6.10

            	
              Taxes

            	 
      	
              52

            
	 
      	 
      	 
      	 
      
	
              6.11

            	
              Books
      and Records

            	 
      	
              54

            
	 
      	 
      	 
      	 
      
	
              6.12

            	
              Properties

            	 
      	
              54

            
	 
      	 
      	 
      	 
      
	
              6.13

            	
              Environmental
      Matters

            	 
      	
              54

            
	 
      	 
      	 
      	 
      
	
              6.14

            	
              No
      Brokers

            	 
      	
              55

            
	 
      	 
      	 
      	 
      
	
              6.15

            	
              Related
      Party Transactions

            	 
      	
              55

            
	 
      	 
      	 
      	 
      
	
              6.16

            	
              Contracts
      and Commitments

            	 
      	
              55

            
	 
      	 
      	 
      	 
      
	
              6.17

            	
              Employee
      Matters and Benefit Plans

            	 
      	
              57

            
	 
      	 
      	 
      	 
      
	
              6.18

            	
              Intellectual
      Property and Products; HIPAA Compliance

            	 
      	
              60

            
	 
      	 
      	 
      	 
      
	
              6.19

            	
              Anti-Takeover
      Matters

            	 
      	
              63

            
	 
      	 
      	 
      	 
      
	
              6.20

            	
              Shareholder
      Vote Required

            	 
      	
              64

            
	 
      	 
      	 
      	 
      
	
              6.21

            	
              Undisclosed
      Liabilities

            	 
      	
              64

            
	 
      	 
      	 
      	 
      
	
              6.22

            	
              Insurance

            	 
      	
              64

            
	 
      	 
      	 
      	 
      
	
              6.23

            	
              Financial
      Forecast and Relationships with Suppliers, Licensors and
      Customers

            	 
      	
              64

            
	 
      	 
      	 
      	 
      
	
              6.24

            	
              Continuity
      of Business Enterprise

            	 
      	
              64

            
	 
      	 
      	 
      	 
      
	
              6.25

            	
              Ownership
      of BPOMS Shares

            	 
      	
              65

            
	 
      	 
      	 
      	 
      
	
              ARTICLE
      7 COVENANTS AND OTHER AGREEMENTS

            	 
      	
              65

            
	 
      	 
      	 
      	 
      
	
              7.1

            	
              Conduct
      of Businesses

            	 
      	
              65

            
	 
      	 
      	 
      	 
      
	
              7.2

            	
              BPOMS
      Stockholders Meeting

            	 
      	
              70

            
	 
      	 
      	 
      	 
      
	
              7.3

            	
              HealthAxis
      Fairness Hearing; Stockholders Meeting

            	 
      	
              71

            
	 
      	 
      	 
      	 
      
	
              7.4

            	
              Approvals;
      Other Action

            	 
      	
              73

            
	 
      	 
      	 
      	 
      
	
              7.5

            	
              Access
      to Information; Confidentiality

            	 
      	
              74

            
	 
      	 
      	 
      	 
      
	
              7.6

            	
              Publicity

            	 
      	
              74

            
	 
      	 
      	 
      	 
      
	
              7.7

            	
              Listing
      of HealthAxis Common Stock

            	 
      	
              75

            
	 
      	 
      	 
      	 
      
	
              7.8

            	
              Further
      Action

            	 
      	
              75

            
	 
      	 
      	 
      	 
      
	
              7.9

            	
              Tax
      Treatment

            	 
      	
              75

            

    

     

    iii

    
      
         

      

      
         

        
          

        

      

      
         

      

    

     

    TABLE
OF CONTENTS

    (continued)

     

    
      	 
      	 
      	 
      	
              Page

            
	 
      	 
      	 
      	 
      
	
              7.10

            	
              No
      Solicitation

            	 
      	
              75

            
	 
      	 
      	 
      	 
      
	
              7.11

            	
              Notice
      of Certain Events

            	 
      	
              78

            
	 
      	 
      	 
      	 
      
	
              7.12

            	
              Directors
      and Officers

            	 
      	
              79

            
	 
      	 
      	 
      	 
      
	
              7.13

            	
              Indemnification
      and Insurance

            	 
      	
              79

            
	 
      	 
      	 
      	 
      
	
              7.14

            	
              Restrictions
      on Transfer

            	 
      	
              81

            
	 
      	 
      	 
      	 
      
	
              ARTICLE
      8 CONDITIONS

            	 
      	
              81

            
	 
      	 
      	 
      	 
      
	
              8.1

            	
              Conditions
      to Each Party’s Obligation to Effect the Merger

            	 
      	
              81

            
	 
      	 
      	 
      	 
      
	
              8.2

            	
              Conditions
      to Obligations of BPOMS to Effect the Merger

            	 
      	
              81

            
	 
      	 
      	 
      	 
      
	
              8.3

            	
              Conditions
      to Obligations of HealthAxis and Merger Sub to Effect the
      Merger

            	 
      	
              82

            
	 
      	 
      	 
      	 
      
	
              ARTICLE
      9 TERMINATION

            	 
      	
              83

            
	 
      	 
      	 
      	 
      
	
              9.1

            	
              Termination

            	 
      	
              83

            
	 
      	 
      	 
      	 
      
	
              9.2

            	
              Effect
      of Termination

            	 
      	
              85

            
	 
      	 
      	 
      	 
      
	
              9.3

            	
              Expenses
      and Termination Fee

            	 
      	
              85

            
	 
      	 
      	 
      	 
      
	
              9.4

            	
              Extension;
      Waiver

            	 
      	
              86

            
	 
      	 
      	 
      	 
      
	
              ARTICLE
      10 GENERAL PROVISIONS

            	 
      	
              87

            
	 
      	 
      	 
      	 
      
	
              10.1

            	
              Nonsurvival
      of Representations, Warranties and Agreements

            	 
      	
              87

            
	 
      	 
      	 
      	 
      
	
              10.2

            	
              Notices

            	 
      	
              87

            
	 
      	 
      	 
      	 
      
	
              10.3

            	
              Assignment;
      Binding Effect; Benefit

            	 
      	
              88

            
	 
      	 
      	 
      	 
      
	
              10.4

            	
              Entire
      Agreement

            	 
      	
              88

            
	 
      	 
      	 
      	 
      
	
              10.5

            	
              Confidentiality

            	 
      	
              88

            
	 
      	 
      	 
      	 
      
	
              10.6

            	
              Amendment

            	 
      	
              89

            
	 
      	 
      	 
      	 
      
	
              10.7

            	
              Governing
      Law; Attorneys’ Fees

            	 
      	
              89

            
	 
      	 
      	 
      	 
      
	
              10.8

            	
              Counterparts

            	 
      	
              89

            
	 
      	 
      	 
      	 
      
	
              10.9

            	
              Headings

            	 
      	
              89

            
	 
      	 
      	 
      	 
      
	
              10.10

            	
              Waivers

            	 
      	
              89

            
	 
      	 
      	 
      	 
      
	
              10.11

            	
              Incorporation

            	 
      	
              90

            
	 
      	 
      	 
      	 
      
	
              10.12

            	
              Severability

            	 
      	
              90

            
	 
      	 
      	 
      	 
      
	
              10.13

            	
              Interpretation

            	 
      	
              90

            
	 
      	 
      	 
      	 
      
	
              10.14

            	
              Specific
      Performance

            	 
      	
              90

            

    

     

    iv

    

      
        
           

        

        
           

          
            

          

        

        
           

        

      

     

    TABLE
OF CONTENTS

    (continued)

     

    
      	
              SCHEDULES

            	 
      
	 
      	 
      
	
              Schedule
      2.1(b)

            	
              BPOMS
      Cap Table

            
	 
      	 
      
	
              Schedule
      2.2(b)

            	
              HealthAxis
      Cap Table

            
	 
      	 
      
	
              EXHIBITS

            	 
      
	 
      	 
      
	
              Exhibit A

            	
              HealthAxis
      Voting Agreement

            
	
              Exhibit B

            	
              BPOMS
      Voting Agreement

            
	
              Exhibit C

            	
              BPOMS
      Series F Certificate of Designation

            
	
              Exhibit D

            	
              BPOMS
      Series F Convertible Preferred Stock Issuance
    Agreement

            
	
              Exhibit E

            	
              HealthAxis/Tak
      Termination Agreement

            
	
              Exhibit F

            	
              HealthAxis/Preferred
      Conversion and Termination Agreement

            
	
              Exhibit G

            	
              Lewis
      Warrant Termination Agreement

            
	
              Exhibit H

            	
              Amendment
      to the Remote Resourcing Agreement

            
	
              Exhibit I

            	
              HealthAxis
      Articles of Amendment

            
	
              Exhibit J

            	
              HealthAxis
      Series B Certificate of
Designation

            

    

     

    v

    

      
        
           

        

        
           

          
            

          

        

        
           

        

      

     

    AGREEMENT
AND PLAN OF MERGER

     

    This
AGREEMENT AND PLAN OF MERGER (this “Agreement”)
is made and entered into as of September 5, 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 intend to effect a merger of
      Merger Sub into BPOMS (the “Merger”)
      in accordance with this Agreement and the Delaware General Corporation Law
      (“DGCL”),
      as a result of which Merger Sub will cease to exist, and BPOMS will become
      a wholly owned subsidiary of
HealthAxis.

            

    

    
      	
               
      

            	
               

            

    

    
      	
               
      

            	
              B.                                   
      BPOMS, HealthAxis and Merger Sub intend that the Merger qualify as
      a tax-free reorganization within the meaning of
      Section 368(a) of the
Code.

            

    

    
      	
               
      

            	
               

            

    

    
      	
               
      

            	
              C.                                   
      The Board of Directors of HealthAxis, after consideration of the
      fairness opinion rendered by its investment advisor and other relevant
      factors: (i) has determined that this Agreement and the transactions
      and other matters contemplated hereby are advisable and in the best
      interests of HealthAxis and its stockholders, (ii) has approved this
      Agreement and the transactions and other matters contemplated hereby,
      including the issuance of shares of HealthAxis Common Stock and HealthAxis
      Preferred Stock to the stockholders of BPOMS pursuant to the terms of this
      Agreement, the HealthAxis Pre-Merger Steps (as hereinafter defined) and
      the other actions contemplated by this Agreement and (iii) has
      determined to recommend that the stockholders of HealthAxis vote to
      approve this Agreement and the transactions and other matters contemplated
      by this Agreement.

            

    

    
      	
               
      

            	
               

            

    

    
      	
               
      

            	
              D.                                  
      The Board of Directors of Merger Sub: (i) has determined that
      this Agreement and the Merger are advisable and in the best interests of
      Merger Sub and its sole stockholder, (ii) has approved this
      Agreement, the Merger, and the other actions contemplated by this
      Agreement, (iii) has adopted this Agreement and (iv) has
      determined to recommend that the stockholder of Merger Sub vote to adopt
      this Agreement and to approve the Merger and such other actions as are
      contemplated by this Agreement.

            

    

    
      	
               
      

            	
               

            

    

    
      	
               
      

            	
              E.                                    
      The Board of Directors of BPOMS: (i) has determined that the
      proposed Merger is advisable and is in the best interests of BPOMS and its
      stockholders, (ii) has approved this Agreement, the Merger, the BPOMS
      Pre-Merger Steps (as hereinafter defined) and the other actions
      contemplated by this Agreement, (iii) has adopted this Agreement and
      (iv) has determined to recommend that the stockholders of BPOMS vote
      to adopt this Agreement and to approve the Merger and such other
      transactions as are contemplated by this
  Agreement.

            

    

    
      	
               
      

            	
               

            

    

    
      	
               
      

            	
              F.                                    
      As a condition and inducement to the Parties entering into this
      Agreement and incurring the obligations set forth herein, concurrently
      with the execution and delivery of this Agreement (i) certain
      HealthAxis stockholders are entering into the HealthAxis Voting
      Agreement in the form attached as Exhibit A
      and certain BPOMS stockholders are entering into the BPOMS Voting
      Agreement in the form attached as Exhibit B
      with respect to the voting of their shares of HealthAxis and BPOMS,
      respectively, in connection with the transactions contemplated by this
      Agreement, and (ii) certain HealthAxis security holders are entering
      into the agreements referenced in Section 2.2(a) below in
      connection with the HealthAxis Pre-Merger Steps and BPOMS has entered into
      certain agreements and taken other steps, as referenced in
      Section 2.1(a) below in connection with the BPOMS Pre-Merger
      Steps.

            

    

     

    1

    
      
         

      

      
         

        
          

        

      

      
         

      

    

     

     

    
      	
               
      

            	
               

            

    

    AGREEMENT

     

    In
consideration of the foregoing, and of the representations, warranties,
covenants and agreements contained herein, the parties hereto hereby agree as
follows:

     

    ARTICLE
1

    DEFINITIONS,
SCHEDULES AND EXHIBITS

     

    
      	
               
      

            	
              1.1                              
      Definitions

            

    

     

    In this
Agreement, the following terms shall have the meanings set out in the paragraphs
indicated below:

     

    
      	
              “Additional
      Financing”

            	
              7.10(a)

            
	
              “Affiliate”

            	
              5.17(a)(i)

            
	
              “BPOMS
      Cap Table”

            	
              2.1(b)

            
	
              “BPOMS
      Common Share” and collectively “BPOMS Common Shares”

            	
              3.2(a)

            
	
              “BPOMS
      Common Stock”

            	
              3.2(a)

            
	
              “BPOMS
      Contracts”

            	
              5.16(a)

            
	
              “BPOMS
      Convertible Preferred Stock”

            	
              3.6(d)

            
	
              “BPOMS
      Designees

            	
              7.12

            
	
              “BPOMS
      Disclosure Letter”

            	
              Article 5

            
	
              “BPOMS
      Forecast”

            	
              5.23

            
	
              “BPOMS
      Intellectual Property”

            	
              5.18(a)(ii)

            
	
              “BPOMS
      Investor Warrants

            	
              3.4

            
	
              “BPOMS
      Material Adverse Effect”

            	
              5.1(a)

            
	
              “BPOMS
      Meeting”

            	
              7.2(a)

            
	
              “BPOMS
      Non-Investor Warrants”

            	
              3.5(a)

            
	
              “BPOMS
      Option”

            	
              3.5(a)

            
	
              “BPOMS
      Outstanding Investor Warrants”

            	
              3.4(c)

            
	
              “BPOMS
      Penny Warrants

            	
              4.2(a)

            
	
              “BPOMS
      Pre-Merger Steps

            	
              2.1(a)

            
	
              “BPOMS
      Products”

            	
              5.18(e)

            
	
              “BPOMS
      Proxy Statement”

            	
              7.2(b)

            
	
              “BPOMS
      Registered Intellectual Property”

            	
              5.18(a)(iii)

            
	
              “BPOMS
      SEC Documents”

            	
              5.7(a)

            
	
              “BPOMS
      Series A Preferred Shares”

            	
              5.3(a)

            

    

     

    2

    
      
         

      

      
         

        
          

        

      

      
         

      

    

     

    
      	
              “BPOMS
      Series B Preferred Shares”

            	
              5.3(a)

            
	
              “BPOMS
      Series C Preferred Shares”

            	
              5.3(a)

            
	
              “BPOMS
      Series D Preferred Shares”

            	
              5.3(a)

            
	
              “BPOMS
      Series D-2 Preferred Shares”

            	
              5.3(a)

            
	
              “BPOMS
      Series F Preferred Shares”

            	
              2.1(a)(ii)

            
	
              “BPOMS
      Subsidiaries” and, individually, a “BPOMS
      Subsidiary”

            	
              5.4

            
	
              “California
      Permit”

            	
              7.3(a)

            
	
              “Cancelled
      BPOMS Common Shares”

            	
              3.2(b)

            
	
              “Certificates”

            	
              4.1(b)

            
	
              “Certifications”

            	
              5.7(a) and
      6.7(a)

            
	
              “Closing”

            	
              2.5

            
	
              “Closing
      Date”

            	
              2.5

            
	
              “Code”

            	
              2.9

            
	
              “Delaware
      Courts”

            	
              10.7

            
	
              “Dissenting
      Common Stock”

            	
              3.8

            
	
              “Domain
      Names”

            	
              5.18(l)

            
	
              “Effective
      Time”

            	
              2.6

            
	
              “Employee”

            	
              5.17(a)(ii)

            
	
              “Employee
      Agreement”

            	
              5.17(a)(iii)

            
	
              “Employee
      Plan”

            	
              5.17(a)(iv)

            
	
              “Environmental
      Laws”

            	
              5.13

            
	
              “ERISA”

            	
              5.17(a)(v)

            
	
              “Exchange
      Act”

            	
              5.6,
      7.2(b) and 7.3(d)

            
	
              “Exchange
      Agent”

            	
              4.1(a)

            
	
              “Exchange
      Merger Consideration”

            	
              4.1(b)

            
	
              “Exchange
      Ratio”

            	
              3.2(a) and
      3.3(b)

            
	
              “Exchange
      Ratios”

            	
              3.6(a)

            
	
              “Fairness
      Hearing”

            	
              7.3(a)

            
	
              “GAAP”

            	
              5.7(c)

            
	
              “Government
      Agencies”

            	
              5.1(c)

            
	
              “Government
      Approvals”

            	
              5.1(c)

            
	
              “HealthAxis
      Cap Table”

            	
              2.2(b)

            
	
              “HealthAxis
      Contracts”

            	
              6.16(a)

            
	
              “HealthAxis
      Common Shares”

            	
              3.2(a)

            
	
              “HealthAxis
      Common Stock”

            	
              3.2(a)

            
	
              “HealthAxis
      Disclosure Letter”

            	
              Article 6

            
	
              “HealthAxis
      Domain Names”

            	
              6.18(k)

            
	
              “HealthAxis
      Forecast”

            	
              6.23

            
	
              “HealthAxis
      Intellectual Property”

            	
              6.18(a)

            
	
              “HealthAxis
      Material Adverse Effect”

            	
              6.1(a)

            
	
              “HealthAxis
      Meeting”

            	
              7.3(c)

            
	
              “HealthAxis
      Pre-Merger Steps”

            	
              2.2(a)

            
	
              “HealthAxis
      Products”

            	
              6.18(d)

            
	
              “HealthAxis
      Proxy Statement”

            	
              7.3(d)

            

    

     

    3

    
      
         

      

      
         

        
          

        

      

      
         

      

    

     

    
      	
              “HealthAxis
      SEC Documents”

            	
              6.7(a)

            
	
              “HealthAxis
      Series A Preferred Shares”

            	
              6.3(a)

            
	
              “HealthAxis
      Series B Preferred Shares”

            	
              2.2(a)(vi)

            
	
              “HealthAxis
      Subsidiaries” and, individually, a “HealthAxis
      Subsidiary”

            	
              6.1(b) and
      6.4

            
	
              “HealthAxis
      Registered Intellectual Property”

            	
              6.18(b)

            
	
              “HealthAxis/Preferred
      Investor Rights Agreement”

            	
              2.2(a)(ii)

            
	
              “HealthAxis/Preferred
      Registration Rights Agreement”

            	
              2.2(a)(ii)

            
	
              “HealthAxis/Tak
      Investor Rights Agreement”

            	
              2.2(a)(i)

            
	
              “HealthAxis/Tak
      Registration Rights Agreement”

            	
              2.2(a)(i)

            
	
              “HIPPA”

            	
              6.18(m)

            
	
              “Indemnified
      Parties”

            	
              7.13(b)

            
	
              “Intellectual
      Property”

            	
              5.18(a)(i)

            
	
              “IRS”

            	
              5.17(vi)

            
	
              “Merger”

            	
              2.3

            
	
              “Multiemployer
      Plan”

            	
              5.17(a)(vii)

            
	
              “Non-Disclosure
      Agreement”

            	
              10.5

            
	
              “Pension
      Plan”

            	
              5.17(a)(viii)

            
	
              “Preferred
      Certificates”

            	
              4.2(a)

            
	
              “PTO”

            	
              5.18(b)

            
	
              “Regulatory
      Filings”

            	
              5.6

            
	
              “Representative”

            	
              7.10(c)(2)

            
	
              “Reporting
      Tail Coverage”

            	
              7.13(d)

            
	
              “Reverse
      Split”

            	
              2.2(a)(v)

            
	
              “SEC”

            	
              3.5(c)

            
	
              “Securities
      Act”

            	
              3.5(c)

            
	
              “Surviving
      Corporation”

            	
              2.3

            
	
              “Series C
      Exchange Ratio”

            	
              3.3(c)

            
	
              “Series C
      Warrant Exchange Ratio

            	
              3.4(a)

            
	
              “Series D
      Exchange Ratio”

            	
              3.3(d)

            
	
              “Series D
      Warrant Exchange Ratio

            	
              3.4(b)

            
	
              “Series D-2
      Exchange Ratio”

            	
              3.3(e)

            
	
              “Series F
      Exchange Ratio”

            	
              3.3(f)

            
	
              “SVB
      Loan Agreement”-

            	
              7.1(c)(x)

            
	
              “Taxes”

            	
              5.10(a) and
      6.10(a)

            
	
              “Tax
      Returns”

            	
              5.10(b) and
      6.10(b)

            
	
              “Termination
      Date”

            	
              9.1(h)

            
	
              “Utilize”
      or “Utilization”

            	
              5.18(a)(iv)

            

    

     

    
      	
               
      

            	
              1.2                              
      Schedules

            

    

     

    The
schedules to this Agreement are hereby incorporated and made a part hereof and
are an integral part of this Agreement.  All schedules annexed hereto or
referred to herein are hereby incorporated in and made a part of this Agreement
as if set forth in full herein.  Any capitalized terms used in any Schedule
but not otherwise defined therein shall be defined as set forth in this
Agreement.  The Schedules are as follow:

     

    4

    
      
         

      

      
         

        
          

        

      

      
         

      

    

     

    
      	
              Schedule
      2.1(b)

            	
              BPOMS
      Cap Table

            
	 
      	 
      
	
              Schedule
      2.2(b)

            	
              HealthAxis
      Cap Table

            

    

     

    
      	
               
      

            	
              1.3                              
      Exhibits

            

    

    
      	
               
      

            	
               

            

    

    The
following documents are referred to herein as Exhibits and copies are annexed
hereto:

     

    
      	
              Exhibit A

            	
              HealthAxis
      Voting Agreement

            
	
              Exhibit B

            	
              BPOMS
      Voting Agreement

            
	
              Exhibit C

            	
              BPOMS
      Series F Certificate of Designation

            
	
              Exhibit D

            	
              BPOMS
      Series F Convertible Preferred Stock Issuance
    Agreement

            
	
              Exhibit E

            	
              HealthAxis/Tak
      Termination Agreement

            
	
              Exhibit F

            	
              HealthAxis/Preferred
      Conversion and Termination Agreement

            
	
              Exhibit G

            	
              Lewis
      Warrant Termination Agreement

            
	
              Exhibit H

            	
              Amendment
      to the Remote Resourcing Agreement

            
	
              Exhibit I

            	
              HealthAxis
      Articles of Amendment

            
	
              Exhibit J

            	
              HealthAxis
      Series B Certificate of
Designation

            

    

     

    ARTICLE
2

    DESCRIPTION
OF THE TRANSACTIONS

     

    
      	
               
      

            	
              2.1                              
      BPOMS Pre-Merger Steps.

            

    

    
      	
               
      

            	
               

            

    

    
      	
               
      

            	
              (a)                                
      Prior to the date of this Agreement BPOMS has issued shares of its
      capital stock, authorized the grant of options to purchase shares of its
      capital stock and taken certain other steps, as follows (the “BPOMS
      Pre-Merger Steps”):

            

    

    
      	
               
      

            	
               

            

    

    
      	
               
      

            	
              (i)                                   
      by issuing 583,333 shares of BPOMS Series D-2 Preferred Stock
      pursuant to the exercise by investors of the amended BPOMS Series J
      Preferred Stock Purchase Warrants for aggregate net proceeds of
      $5,600,000,

            

    

    
      	
               
      

            	
               

            

    

    
      	
               
      

            	
              (ii)                                
      by creating a new series of preferred stock designated as
      Series F Convertible Preferred Stock (the “BPOMS
      Series F Preferred Shares”) pursuant to the BPOMS
      Series F Certificate of Designations in the form attached hereto as
      Exhibit C;

            

    

    
      	
               
      

            	
               

            

    

    
      	
               
      

            	
              (iii)                             
      by issuing 894,942 shares of BPOMS Series F Preferred Stock
      pursuant to the exchange of certain amended BPOMS Series A Purchase
      Warrants, BPOMS Series B Purchase Warrants, and those BPOMS
      Series D Purchase Warrants having an exercise price of $1.10,
      pursuant to the BPOMS Series F Convertible Preferred Stock Issuance
      Agreement in the form attached as Exhibit D;

            

    

    
      	
               
      

            	
               

            

    

    
      	
               
      

            	
              (iv)                            
      by entering into that certain Waiver and Amendment Agreement,
      Amended and Restated Warrant Acknowledgment, Second Amendment to
      Series D Convertible Stock Purchase Agreement and
      Third Amendment to Series D Convertible Stock Purchase Agreement each
      in the form previously approved by Healthaxis, with those parties
      necessary to achieve the intended legal effect of the provisions set forth
      therein; and

            

    

     

    5

    

    
      
         

      

      
         

        
          

        

      

      
         

      

    

     

     

    
      	
               
      

            	
               

            

    

    
      	
               
      

            	
              (v)                               
      by increasing the number of options to purchase BPOMS Common Stock
      issuable pursuant to the amended BPOMS’ 2007 Stock Incentive Plan to an
      aggregate of 12,300,000 options, some or all of which may, at the
      discretion of the board of directors of BPOMS, be granted to certain
      employees, directors and advisors of BPOMS prior to the Effective Time at
      exercise prices to be established as of the dates of such
      grants.

            

    

    
      	
               
      

            	
               

            

    

    
      	
               
      

            	
              (b)                               
      As a result of the BPOMS Pre-Merger Steps (assuming that all of the
      increased number of options to purchase BPOMS Common Stock referred to in
      subparagraph 2.1(a)(v) hereof are granted prior to the Effective
      Time), the number and class of issued and outstanding securities of BPOMS
      at the Effective Time will be as set forth in the table (the “BPOMS Cap
      Table”) attached as Schedule
      2.1(b).

            

    

    
      	
               
      

            	
               

            

    

    
      	
               
      

            	
              2.2                              
      HealthAxis Pre-Merger Steps.

            

    

    
      	
               
      

            	
               

            

    

    
      	
               
      

            	
              (a)                                
      On the terms and subject to the conditions of this Agreement, at or
      prior to the Effective Time, as a condition precedent to the Merger,
      HealthAxis shall have carried out the following re-structuring of its
      capital and related matters (the “HealthAxis
      Pre-Merger Steps”):

            

    

    
      	
               
      

            	
               

            

    

    
      	
               
      

            	
              (i)                                   
      the termination and cancellation of all HealthAxis Warrants issued
      to Tak Investments, Inc., and the termination of the HealthAxis
      Investor Rights Agreement dated May 13, 2005 with Tak
      Investments, Inc. (the “HealthAxis/Tak
      Investor Rights Agreement”) and the HealthAxis Registration Rights
      Agreement dated May 13, 2005 with Tak Investments, Inc. (the
      “HealthAxis/Tak
      Registration Rights Agreement”), in accordance with the
      HealthAxis/Tak Termination Agreement in the form attached hereto as Exhibit E;

            

    

    
      	
               
      

            	
               

            

    

    
      	
               
      

            	
              (ii)                                
      the conversion of all outstanding shares of HealthAxis
      Series A Preferred Stock into 740,401 shares of HealthAxis Common
      Stock and the termination of the HealthAxis Investor Rights Agreement
      dated June 30, 2004 with holders of the HealthAxis Series A
      Preferred Stock (the “HealthAxis/Preferred
      Investor Rights Agreement”) and the HealthAxis Registration Rights
      Agreement dated June 30, 2004 with holders of the HealthAxis
      Series A Preferred Stock (the “HealthAxis/Preferred
      Registration Rights Agreement”) pursuant to the
      HealthAxis/Preferred Conversion and Termination Agreement in the form
      attached hereto as Exhibit F;

            

    

     

    6

    
      
         

      

      
         

        
          

        

      

      
         

      

    

     

    
      	
               
      

            	
              (iii)                             
      the termination and cancellation of the HealthAxis Warrant held by
      Lewis Opportunity Fund in accordance with the Lewis Warrant Termination
      Agreement in the form attached hereto as Exhibit G;

            

    

    
      	
               
      

            	
               

            

    

    
      	
               
      

            	
              (iv)                            
      the amendment of the Remote Resourcing Agreement dated May 13,
      2005 between HealthAxis, Ltd., a subsidiary of HealthAxis, and Healthcare
      BPO Partners, L.P., an affiliate of Tak Investments, Inc., pursuant
      to the amendment in the form attached hereto as Exhibit H;

            

    

    
      	
               
      

            	
               

            

    

    
      	
               
      

            	
              (v)                               
      a reverse split of the shares of HealthAxis Common Stock in a ratio
      to be determined by the Board of Directors of HealthAxis (within a range
      approved by the HealthAxis shareholders) (the “Reverse
      Split”) pursuant to the filing with the Pennsylvania Department of
      State of the HealthAxis Articles of Amendment substantially in the form
      attached hereto as Exhibit I;

            

    

    
      	
               
      

            	
               

            

    

    
      	
               
      

            	
              (vi)                            
      the Board of Directors of HealthAxis will adopt a resolution
      creating a new series of preferred stock designated as Series B
      Convertible Preferred Stock (the “HealthAxis
      Series B Preferred Shares”), to which will be
      attached the rights, preferences and other provisions as set out in the
      HealthAxis Series B Certificate of Designations in the form attached
      hereto as Exhibit J,
      subject to the adjustments contemplated by Section 3.6 hereof;
      and

            

    

    
      	
               
      

            	
               

            

    

    
      	
               
      

            	
              (vii)                         
      the Board of Directors of HealthAxis will authorize and approve the
      addition of approximately 3,000,000 shares of HealthAxis Common Stock
      (prior to giving effect to the Reverse Split) to the HealthAxis Inc. 2005
      Stock Incentive Plan (or to a new plan developed by HealthAxis) and, to
      the extent required by the rules of the Nasdaq Stock
      Market, Inc., the shareholders of HealthAxis will approve such
      additional shares.

            

    

    
      	
               
      

            	
               

            

    

    In order
to carry out the HealthAxis Pre-Merger Steps, following execution of this
Agreement, HealthAxis will use its best efforts to take the steps and actions
and obtain all approvals as may be required by the provisions of paragraphs
(i) to (vii) of this paragraph 2.2(a).

     

    
      	
               
      

            	
              (b)                               
      Subject to the terms and conditions of this Agreement, following
      the completion of the HealthAxis Pre-Merger Steps, immediately prior to
      the Effective Time, the number and class of issued and outstanding
      securities of HealthAxis will be as set forth in the table (the “HealthAxis
      Cap Table”) attached hereto as Schedule
      2.2(b).

            

    

    
      	
               
      

            	
               

            

    

    
      	
               
      

            	
              (c)                                
      No fractional shares of HealthAxis’ Common Stock shall be issued in
      connection with the Reverse Split, and no certificates or scrip for any
      such fractional shares shall be issued.  Any holder of HealthAxis
      Common Stock who would otherwise be entitled to receive a fraction of a
      share as a result of the Reverse Split shall, in lieu of such fraction of
      a share, receive one full share of HealthAxis Common
  Stock.

            

    

     

    7

    

      
        
           

        

        
           

          
            

          

        

        
           

        

      

    
      	
               
      

            	
              2.3                              
      The Merger.

            

    

    
      	
               
      

            	
               

            

    

    Upon the
terms and subject to the conditions contained in this Agreement, at the
Effective Time, Merger Sub shall be merged with and into BPOMS, and the separate
corporate existence of Merger Sub shall thereupon cease (the “Merger”).
BPOMS shall continue as the surviving corporation in the Merger (the “Surviving
Corporation”).

     

    
      	
               
      

            	
              2.4                              
      Effects of the Merger.

            

    

    
      	
               
      

            	
               

            

    

    The
Merger shall have the effects provided in this Agreement and the applicable
provisions of the DGCL. As a result of the Merger, BPOMS will become a wholly
owned subsidiary of HealthAxis.

     

    
      	
               
      

            	
              2.5                              
      The Closing.

            

    

    
      	
               
      

            	
               

            

    

    On the
terms and subject to the conditions of this Agreement, the closing of the Merger
(the “Closing”)
shall take place at 10:00 a.m., local time, on (a) the third (3rd)
business day immediately following the day on which the last of the conditions
set forth in Article 8 shall be fulfilled or waived in accordance herewith,
or (b) at such other time, date or place as BPOMS and HealthAxis may
otherwise agree in writing. Unless the parties shall otherwise agree and subject
to Article 8, the parties shall use their best efforts to cause the Closing
to occur as soon as practicable after the last to occur of the BPOMS Meeting and
the HealthAxis Meeting. The date on which the Closing occurs is hereinafter
referred to as the “Closing
Date”.

     

    
      	
               
      

            	
              2.6                              
      Effective Time.

            

    

    
      	
               
      

            	
               

            

    

    If all
the conditions to the Merger set forth in Article 8 shall have been
fulfilled or waived in accordance herewith, and this Agreement shall not have
been terminated as provided in Article 9, the parties hereto shall cause a
Certificate of Merger satisfying the requirements of the DGCL to be properly
executed, verified and delivered for filing in accordance with the DGCL on the
Closing Date. The Merger shall become effective upon the acceptance for record
of the Certificate of Merger by the Secretary of State of the State of Delaware
in accordance with the DGCL (but not earlier than the Closing Date) or at such
later time that the parties hereto shall have agreed upon and designated in such
filing in accordance with applicable law as the effective time of the Merger
(the “Effective
Time”).

     

    
      	
               
      

            	
              2.7                              
      Corporate Organization.

            

    

    
      	
               
      

            	
               

            

    

    
      	
               
      

            	
              (a)                                
      At the Effective Time, unless otherwise determined by BPOMS and
      HealthAxis prior to the Effective Time, the Certificate of Incorporation
      of the Surviving Corporation shall be the Certificate of Incorporation of
      Merger Sub immediately prior to the Effective Time, until thereafter
      amended as provided by the DGCL and such Certificate of
      Incorporation.

            

    

     

    8

    
      
         

      

      
         

        
          

        

      

      
         

      

    

     

    
      	
               
      

            	
              (b)                                
      Unless otherwise determined by BPOMS and HealthAxis prior to the
      Effective Time, the By-laws of Merger Sub in effect immediately prior to
      the Effective Time shall be the By-laws of the Surviving
      Corporation.

            

    

    
      	
               
      

            	
               

            

    

    
      	
               
      

            	
              (c)                                 
      At the Effective Time, (i) HealthAxis shall file an amendment
      to its Amended and Restated Articles of Incorporation to change the name
      of HealthAxis to “BPO
      Management Services, Inc.”, and (ii) BPOMS shall file an
      amendment to its Amended and Restated Articles of Incorporation to change
      the name of BPOMS to “BPOMS, Inc.”.

            

    

    
      	
               
      

            	
               

            

    

    
      	
               
      

            	
              2.8                              
      Directors and Officers of Surviving Corporation and
      HealthAxis.

            

    

    
      	
               
      

            	
               

            

    

    
      	
               
      

            	
              (a)                                 
      The directors of BPOMS immediately prior to the Effective Time
      shall initially become the directors of the Surviving Corporation as of
      the Effective Time, each to hold office in accordance with the Certificate
      of Incorporation and Bylaws of the Surviving Corporation, until their
      respective successors are duly elected or appointed and
      qualified.

            

    

    
      	
               
      

            	
               

            

    

    
      	
               
      

            	
              (b)                                
      The officers of BPOMS immediately prior to the Effective Time shall
      initially become the officers of the Surviving Corporation as of the
      Effective Time, until their respective successors are duly elected or
      appointed and qualified.

            

    

    
      	
               
      

            	
               

            

    

    
      	
               
      

            	
              (c)                                 
      The directors and officers of HealthAxis as of the Effective Time
      will be determined as provided by Section 7.12
  hereof.

            

    

    
      	
               
      

            	
               

            

    

    
      	
               
      

            	
              2.9                              
      Tax Consequences.

            

    

    
      	
               
      

            	
               

            

    

    For
federal income tax purposes, the Merger is intended to constitute a
reorganization within the meaning of Section 368( a) of the Internal
Revenue Code of 1986, as amended (the “Code”),
and the parties shall report the Merger consistent therewith. The parties to
this Agreement hereby adopt this Agreement as a “plan of
reorganization” within the meaning of Section 1.368-2(g) and
1.368-3(a) of the United States Treasury Regulations.

     

    ARTICLE
3

    CONVERSION
OF SECURITIES

     

    
      	
               
      

            	
              3.1                              
      Conversion of Merger Sub
Shares.

            

    

    
      	
               
      

            	
               

            

    

    At the
Effective Time, by virtue of the Merger and without any action on the part of
HealthAxis, Merger Sub, BPOMS or the holders thereof, each share of common
stock, $0.01 par value per share, of Merger Sub that is issued and outstanding
immediately prior to the Effective Time shall be converted into one share of
common stock, $0.01 par value per share, of the Surviving
Corporation.

    
      	
               
      

            	
               

            

    

    
      	
               
      

            	
              3.2                              
      Conversion of BPOMS Common
Stock.

            

    

    
      	
               
      

            	
               

            

    

    
      	
               
      

            	
              (a)                                 
      At the Effective Time, by virtue of the Merger and without any
      action on the part of HealthAxis, Merger Sub, BPOMS or the holders
      thereof, each issued and outstanding share of common
      stock, par value $0.001 per share of BPOMS (the “BPOMS
      Common Stock”; each a “BPOMS
      Common Share”; and collectively, the “BPOMS
      Common Shares”) shall be converted into the right to receive 0.3393
      (to be adjusted after determination of the Reverse Split and otherwise in
      accordance with Section 3.6) (the “Exchange
      Ratio”) shares of common stock, par value $0.10 per share, of
      HealthAxis (the “HealthAxis
      Common Stock”). The shares of HealthAxis Common Stock to be issued
      in connection with the Merger are sometimes referred to as the “HealthAxis
      Common Shares” and shall bear appropriate restrictive
      legends.

            

    

    
      	
               
      

            	
               

            

    

    9

    

      
        
           

        

        
           

          
            

          

        

        
           

        

      

    
      	
               
      

            	
               

            

    

    
      	
               
      

            	
              (b)                                
      Each BPOMS Common Share held in BPOMS’ treasury, if any,
      immediately prior to the Effective Time (collectively, “Cancelled
      BPOMS Common Shares”) shall, at the Effective Time, by virtue of
      the Merger and without any action on the part of the holder thereof, be
      canceled and retired and cease to exist and no payment shall be made with
      respect thereto.

            

    

    
      	
               
      

            	
               

            

    

    
      	
               
      

            	
              (c)                                 
      No fractional shares of HealthAxis Common Stock shall be issued
      under this Section in connection with the Merger, and no certificates
      or scrip for any such fractional shares shall be issued. Any holder of
      BPOMS Common Shares who would otherwise be entitled to receive a fraction
      of a share of HealthAxis Common Stock (after aggregating all fractional
      shares of HealthAxis Common Stock issuable to such holder) shall, in lieu
      of such fraction of a share and upon surrender of such holder’s
      Certificate(s) (as defined in Section 4.1 (b)), receive one full
      share of HealthAxis Common Stock.

            

    

    
      	
               
      

            	
               

            

    

    
      	
               
      

            	
              3.3                              
      Conversion of BPOMS Preferred
Stock.

            

    

    
      	
               
      

            	
               

            

    

    
      	
               
      

            	
              (a)                                 
      At the Effective Time, each share of BPOMS Series A Preferred
      Stock that is then outstanding and unconverted shall cease to represent a
      right to acquire shares of BPOMS Common Stock, and shall be converted
      automatically into a right to receive 0.3393 (to be adjusted after
      determination of the Reverse Split and otherwise in accordance with
      Section 3.6) (also called the “Exchange
      Ratio”) shares of HealthAxis Common
  Stock.

            

    

    
      	
               
      

            	
               

            

    

    
      	
               
      

            	
              (b)                                
      At the Effective Time, each share of BPOMS Series B Preferred
      Stock that is then outstanding and unconverted shall cease to represent a
      right to acquire shares of BPOMS Common Stock, and shall be converted
      automatically into a right to receive 0.3393 (to be adjusted after
      determination of the Reverse Split and otherwise in accordance with
      Section 3.6) (also called the “Exchange
      Ratio”) shares of HealthAxis Common
  Stock.

            

    

    
      	
               
      

            	
               

            

    

    
      	
               
      

            	
              (c)                                 
      At the Effective Time, each share of BPOMS Series C Preferred
      Stock that is then outstanding shall be converted automatically into a
      right to receive 1.7700 (to be adjusted after determination of the Reverse
      Split and otherwise in accordance with Section 3.6) (the “Series C
      Exchange Ratio”) shares of HealthAxis Common
  Stock.

            

    

     

    10

    
      
         

      

      
         

        
          

        

      

      
         

      

    

     

    
      	
               
      

            	
              (d)                                
      At the Effective Time, each share of BPOMS Series D Preferred
      Stock that is then outstanding and unconverted shall cease to represent a
      right to acquire shares of BPOMS Common Stock, and shall be converted
      automatically into a right to receive 5.4288 (to be adjusted after
      determination of the Reverse Split and otherwise in accordance with
      Section 3.6) (the “Series D
      Exchange Ratio”) shares of HealthAxis Series B Preferred
      Stock.

            

    

    
      	
               
      

            	
               

            

    

    
      	
               
      

            	
              (e)                                 
      At the Effective Time, each share of BPOMS Series D-2
      Preferred Stock that is then outstanding and unconverted shall cease to
      represent a right to acquire shares of BPOMS Common Stock, and shall be
      converted automatically into a right to receive 5.4288 (to be adjusted
      after determination of the Reverse Split and otherwise in accordance with
      Section 3.6) (the “Series D-2
      Exchange
      Ratio”) shares of HealthAxis Series B Preferred
      Stock.

            

    

    
      	
               
      

            	
               

            

    

    
      	
               
      

            	
              (f)                                   
      At the Effective Time, each share of BPOMS Series F Preferred
      Stock that is then outstanding and unconverted shall cease to represent a
      right to acquire shares of BPOMS Common Stock, and shall be converted
      automatically into a right to receive 8.4825 (to be adjusted after
      determination of the Reverse Split and otherwise in accordance with
      Section 3.6) (the “Series F
      Exchange Ratio”) shares of HealthAxis Series B Preferred
      Stock.

            

    

    
      	
               
      

            	
               

            

    

    
      	
               
      

            	
              (g)                                
      No fractional shares of HealthAxis Common Stock or HealthAxis
      Series B Preferred Stock shall be issued under this Section in
      connection with the Merger, and no certificates or scrip for any such
      fractional shares shall be issued.  Any holder of BPOMS Series A
      Preferred Stock, BPOMS Series B Preferred Stock, BPOMS Series C
      Preferred Stock, BPOMS Series D Preferred Stock, BPOMS
      Series D-2 Preferred Stock or BPOMS Series F Preferred Stock who
      would otherwise be entitled to receive a fraction of a share of HealthAxis
      Common Stock or HealthAxis Series B Preferred Stock (after
      aggregating all fractional shares of HealthAxis Common Stock or HealthAxis
      Series B Preferred Stock issuable to such holder) shall, in lieu of
      such fraction of a share and upon surrender of such holder’s Preferred
      Certificates (as defined in Section 4.2(a)), receive one full share
      of HealthAxis Common Stock or HealthAxis Series B Preferred Stock, as
      the case may be.

            

    

    
      	
               
      

            	
               

            

    

    
      	
               
      

            	
              3.4                              
      Conversion of BPOMS Investor
Warrants

            

    

    
      	
               
      

            	
               

            

    

    In this
Agreement, BPOMS Series A Warrants, Series B Warrants, Series C
Warrants and Series D Warrants (including both Series D Warrants with
an exercise price of $0.01 and the Series D Warrants with an exercise price
of $1.10) are collectively called the “BPOMS Investor
Warrants”.  At the Effective Time, the BPOMS Investor Warrants will
be dealt with as follows.

    
      	
               
      

            	
               

            

    

    
      	
               
      

            	
              (a)                                 
      At the Effective Time, each BPOMS Series C Warrant that is
      then outstanding and unexercised shall cease to represent a right to
      acquire shares of BPOMS Common Stock, and shall be converted automatically
      into a right to receive 0.3393 (to be adjusted after determination of the
      Reverse Split and otherwise in accordance with
      Section 3.6) (the “Series C
      Warrant Exchange Ratio”) shares of HealthAxis Series B
      Preferred Stock.

            

    

     

    11

    
      
         

      

      
         

        
          

        

      

      
         

      

    

     

     

    
      	
               
      

            	
               

            

    

    
      	
               
      

            	
              (b)                                
      At the Effective Time, each BPOMS Series D Warrant with an
      exercise price of $0.01 that is then outstanding and unexercised shall
      cease to represent a right to acquire shares of BPOMS Common Stock, and
      shall be converted automatically into a right to receive 0.3393 (to be
      adjusted after determination of the Reverse Split and otherwise in
      accordance with Section 3.6) (the “Series D
      Warrant Exchange Ratio”) shares of HealthAxis Series B
      Preferred Stock.

            

    

    
      	
               
      

            	
               

            

    

    
      	
               
      

            	
              (c)                                 
      At the Effective Time, each BPOMS Series A Warrant,
      Series B Warrant and Series D Warrant with an exercise price of
      $1.10 that has not previously been exercised and is then outstanding and
      unexercised (the “BPOMS
      Outstanding Investor Warrants”) shall cease to represent a right to
      acquire shares of BPOMS Common Stock and shall be converted automatically
      into a warrant to acquire, under the same terms and conditions as were
      applicable to such BPOMS Outstanding Investor Warrants immediately prior
      to the Effective Time, shares of HealthAxis Common Stock, and HealthAxis
      shall assume each BPOMS Outstanding Investor Warrant and each agreement
      pursuant to which any such BPOMS Outstanding Investor Warrant was granted;
      provided, however, that from and after the Effective Time, (i) the
      number of shares of HealthAxis Common Stock purchasable upon exercise of
      such BPOMS Outstanding Investor Warrants shall be equal to the number of
      shares of BPOMS Common Stock that were purchasable under such BPOMS
      Outstanding Investor Warrant immediately prior to the Effective Time,
      multiplied by the Exchange Ratio, rounded down to the nearest whole share,
      and (ii) the per share exercise price under each such BPOMS
      Outstanding Investor Warrant shall be adjusted by dividing the per share
      exercise price of each such BPOMS Outstanding Investor Warrant by the
      Exchange Ratio, rounding up to the nearest cent.  The terms of each
      BPOMS Outstanding Investor Warrant shall be subject to further adjustment
      as appropriate to reflect the Reverse Split and any other stock split,
      stock dividend, recapitalization or other similar transaction with respect
      to the HealthAxis Common Stock on or subsequent to the Effective
      Time.  As soon as practicable after the Effective Time, HealthAxis
      shall deliver to each holder of a BPOMS Outstanding Investor Warrant an
      appropriate notice setting forth such holder’s rights pursuant thereto,
      and such BPOMS Outstanding Investor Warrant shall continue in effect on
      the same terms and conditions.

            

    

    
      	
               
      

            	
               

            

    

    
      	
               
      

            	
              3.5                              
      Conversion of BPOMS Employee Stock Options and Non-Investor
      Warrants.

            

    

    
      	
               
      

            	
               

            

    

    
      	
               
      

            	
              (a)                                 
      At the Effective Time, each option, whether vested or unvested, to
      purchase BPOMS Common Stock that is then outstanding and unexercised (a
      “BPOMS
      Option”) and all warrants to purchase BPOMS Stock other than the
      BPOMS Investor Warrants (collectively, the “BPOMS
      Non-Investor Warrants”) shall cease to represent a right to acquire
      shares of BPOMS Common Stock and shall be converted automatically into an
      option or warrant to acquire, under the same terms and conditions as were
      applicable to such BPOMS Option or BPOMS Non-Investor
      Warrant immediately prior to the Effective Time, shares of HealthAxis
      Common Stock, and HealthAxis shall assume each BPOMS Option and BPOMS
      Non-Investor Warrant and each option plan or agreement pursuant to which
      any such BPOMS Option and BPOMS Non-Investor Warrant were granted;
      provided, however, that from and after the Effective Time, (i) the
      number of shares of HealthAxis Common Stock purchasable upon exercise of
      such BPOMS Option or BPOMS Non-Investor Warrant shall be equal to the
      number of shares of BPOMS Common Stock that were purchasable under such
      BPOMS Option or BPOMS Non-Investor Warrant immediately prior to the
      Effective Time multiplied by the Exchange Ratio rounding down to the
      nearest whole share, and (ii) the per share exercise price under each
      such BPOMS Option and BPOMS Non-Investor Warrant shall be adjusted by
      dividing the per share exercise price of each such BPOMS Option and BPOMS
      Non-Investor Warrant by the Exchange Ratio, rounding up to the nearest
      cent. The terms of each BPOMS Option and BPOMS Non-Investor Warrant shall
      be subject to further adjustment as appropriate to reflect the Reverse
      Split and any other stock split, stock dividend, recapitalization or other
      similar transaction with respect to HealthAxis Common Stock on or
      subsequent to the Effective Time.

            

    

     

    12

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    
      	
               
      

            	
               

            

    

     

    
      	
               
      

            	
               

            

    

    
      	
               
      

            	
              (b)                                
      As soon as practicable after the Effective Time, HealthAxis shall
      deliver to each holder of an outstanding BPOMS Option or BPOMS
      Non-Investor Warrant an appropriate notice setting forth such holder’s
      rights pursuant thereto, and such BPOMS Option and BPOMS Non-Investor
      Warrant shall continue in effect on the same terms and conditions
      (including anti-dilution
provisions).

            

    

    
      	
               
      

            	
               

            

    

    
      	
               
      

            	
              (c)                                 
      Promptly following the Effective Time, HealthAxis shall exercise
      its best efforts to file with the Securities and Exchange Commission
      (“SEC”)
      a registration statement on Form S-8 (to the extent such form is
      available) under the Securities Act of 1933, as amended (the
      “Securities Act”), with respect to the shares of HealthAxis Common
      Stock issuable upon exercise of BPOMS Options and BPOMS Non-Investor
      Warrants assumed pursuant to Section 3.5(a) hereof and eligible
      for inclusion on Form S-8 under applicable securities laws, and shall
      use its best efforts to maintain the current status of the prospectus
      contained therein, as well as to comply with any applicable state
      securities or “blue
      sky” laws, for one year after the Effective
  Time.

            

    

    
      	
               
      

            	
               

            

    

    
      	
               
      

            	
              3.6                              
      Adjustments.

            

    

    
      	
               
      

            	
               

            

    

    
      	
               
      

            	
              (a)                                 
      When the Reverse Split is determined by the Board of Directors of
      HealthAxis as contemplated by Section 2.2(a)(v) hereof, each of
      the Exchange Ratio, the Series C Exchange Ratio, the Series D
      Exchange Ratio, the Series D-2 Exchange Ratio, the Series F
      Exchange Ratio, the Series C Warrant Exchange Ratio and the
      Series D Warrant Exchange Ratio (collectively, the “Exchange Ratios”) shall
      be adjusted to equal the rate determined by multiplying the applicable
      exchange ratio then in effect by a fraction: (i) the numerator of
      which is the number of shares of HealthAxis Common Stock issued and
      outstanding and issuable, on a fully-diluted basis, after giving effect to
      the Reverse Split but immediately prior to the Effective Time, and (ii) the denominator of which is the
      number of shares of HealthAxis Common Stock issued and outstanding and
      issuable, on a fully-diluted basis, as of the date hereof (or, if there
      has been a previous adjustment pursuant to this section, then the
      denominator will be the number of shares of HealthAxis Common Stock issued
      and outstanding and issuable on a fully-diluted basis, as of the date of
      such previous adjustment).

            

    

     

    13

    
      
         

      

      
         

        
          

        

      

      
         

      

    

     

     

    
      	
               
      

            	
               

            

    

    
      	
               
      

            	
              (b)                                
      If at any time during the period between the date of this Agreement
      and the Effective Time, any change in the BPOMS Common Stock, BPOMS
      Series A Preferred Stock, BPOMS Series B Preferred Stock, BPOMS
      Series C Preferred Stock, BPOMS Series D Preferred Stock, BPOMS
      Series D-2 Preferred Stock, BPOMS Series F Preferred Stock,
      HealthAxis Common Stock or HealthAxis Series B Preferred Stock shall
      occur by reason of any reclassification, recapitalization, stock dividend,
      stock split or combination (excluding the Reverse Split, unless and to the
      extent that the ratio of the Reverse Split is revised from that originally
      authorized by the Board of Directors of HealthAxis as contemplated by
      Section 2.2(a)(v)), exchange or readjustment of shares, or any stock
      dividend thereon with the record date during such period, then each of the
      Exchange Ratios shall be appropriately
adjusted.

            

    

    
      	
               
      

            	
               

            

    

    
      	
               
      

            	
              (c)                                 
      If at any time during the period between the date of this Agreement
      and the Effective Time, HealthAxis shall issue any additional shares of
      HealthAxis Common Stock or any other securities exercisable for or
      convertible into shares of HealthAxis Common Stock (excluding shares of
      HealthAxis Common Stock issuable pursuant to the Reverse Split or shares
      or other securities issued pursuant to any reclassification,
      recapitalization, stock dividend, stock split, combination, exchange or
      readjustment of shares referred to in paragraph (b) of this
      Section 3.6) then each of the Exchange Ratios shall be adjusted to
      equal the rate determined by multiplying the applicable exchange ratio
      then in effect by a fraction: (i) the numerator of which is the
      number of shares of HealthAxis Common Stock issued and outstanding and
      issuable, on a fully-diluted basis, following the issuance of shares or
      other securities referred to in this paragraph (c), and (ii) the
      denominator of which is the number of shares of HealthAxis Common Stock
      issued and outstanding and issuable, on a fully-diluted basis, as of the
      date hereof (or, if there has been a previous adjustment pursuant to this
      section, then the denominator will be the number of shares of HealthAxis
      Common Stock issued and outstanding and issuable, on a fully-diluted
      basis, as of the date of such previous
  adjustment).

            

    

    
      	
               
      

            	
               

            

    

    
      	
               
      

            	
              (d)                                
      If at any time during the period between the date of this Agreement
      and the Effective Time, BPOMS shall issue any shares of BPOMS Common Stock
      or any other securities exercisable for or convertible into shares of
      BPOMS Common Stock (“BPOMS
      Convertible Preferred Stock”) (excluding shares and other
      securities issuable pursuant to the BPOMS Pre-Merger Steps or shares or
      other securities issuable pursuant to any reclassification,
      recapitalization, stock dividend, stock split, combination, exchange or
      readjustment of shares or any stock dividend referred to in paragraph
      (b) of this Section 3.6), then each of the  Exchange Ratios shall be adjusted to equal the rate determined by
      multiplying the applicable exchange ratio then in effect by a fraction:
      (i) the numerator of which is the aggregate of the number of shares
      of BPOMS Common Stock and the number of shares of BPOMS Convertible
      Preferred Stock of all series issued and outstanding and issuable, on a
      fully-diluted basis, as of the date of this Agreement (or, if there has
      been a previous adjustment pursuant to this section, then the numerator
      will be the number of shares of BPOMS Common Stock and BPOMS Convertible
      Preferred Stock issued and outstanding and issuable, on a fully-diluted
      basis, as of the date of such previous adjustment), and (ii) the
      denominator of which is the aggregate of the number of shares of BPOMS
      Common Stock and shares of BPOMS Convertible Preferred Stock of all series
      issued and outstanding and issuable on a fully-diluted basis after the
      issuance of shares or other securities referred to in this paragraph
      (d).

            

    

     

    14

    
      
         

      

      
         

        
          

        

      

      
         

      

    

     

     

    
      	
               
      

            	
               

            

    

    
      	
               
      

            	
              (e)                                 
      The adjustments provided for in this Section 3.6 are
      cumulative and shall apply to successive reclassifications,
      recapitalizations, stock dividends, stock splits, combinations, exchanges
      or readjustments of shares or issuances of shares or other securities
      (without duplication).

            

    

    
      	
               
      

            	
               

            

    

    
      	
               
      

            	
              (f)                                   
      No adjustment to any of the Exchange Ratios shall be required in
      connection with securities of HealthAxis or BPOMS issued pursuant to the
      exercise of any warrants, options or other rights which are outstanding as
      of the date of this Agreement or upon conversion of any convertible
      securities or exchange of any exchangeable securities outstanding as of
      the date of this Agreement.

            

    

    
      	
               
      

            	
               

            

    

    
      	
               
      

            	
              (g)                                
      In addition to such adjustments to the Exchange Ratios, when the
      Reverse Split is determined by the Board of Directors of HealthAxis as
      contemplated by Section 2.2(a)(v) hereof, the provisions set out
      in the HealthAxis Series B Certificate of Designations with respect
      to (i) the particular number of HealthAxis Series B Preferred
      Shares in Section 1 of the Certificate and the VWAP in paragraph
      2(b) of the Certificate, (ii) the number of HealthAxis
      Series B Preferred Shares in paragraphs 3(a) and 3(c) of
      the Certificate, (iii) the Liquidation Preference Amount per share in
      Section 4 of the Certificate, (iv) the Closing Bid Price
      referred to in paragraph 5(c) of the Certificate, (v) the
      Conversion Price in paragraph 5(d) of the Certificate, and
      (vi) the number of HealthAxis Series B Preferred Shares referred
      to in Section 9 of the Certificate, will be adjusted appropriately
      based on the Reverse Split.

            

    

    
      	
               
      

            	
               

            

    

    
      	
               
      

            	
              3.7                              
      Reservation of Shares

            

    

    
      	
               
      

            	
               

            

    

    At or
prior to the Effective Time, HealthAxis shall reserve for issuance the number of
shares of HealthAxis Common Stock issuable upon conversion of the HealthAxis
Series B Preferred Stock issued or to be issued pursuant to
Section 3.3.  In addition, at or prior to the Effective Time,
HealthAxis shall reserve for issuance the number of shares of HealthAxis Common
Stock subject to (i) BPOMS Outstanding Investor Warrants assumed pursuant
to Section 3.4(c) hereof and (ii) BPOMS Options and BPOMS
Non-Investor Warrants assumed pursuant to
Section 3.5(a) hereof.

     

    15

    
      
         

      

      
         

        
          

        

      

      
         

      

    

     

    
      	
               
      

            	
              3.8                              
      Dissenting BPOMS
Stockholders.

            

    

    
      	
               
      

            	
               

            

    

    Notwithstanding
any provision of this Agreement to the contrary, if required by the DGCL but
only to the extent required thereby, shares of BPOMS Common Stock that are
issued and outstanding immediately prior to the Effective Time and that are held
by holders of such shares of BPOMS Common Stock who have properly exercised
appraisal rights with respect thereto (the “Dissenting
Common Stock”) in accordance with Section 262 of the DGCL will not
be exchangeable for the right to receive the per share amount of the merger
consideration described in Section 3.2(a) attributable to such shares
of Dissenting Common Shares, and holders of such shares of Dissenting Common
Stock will be entitled to receive payment of the appraised value of such shares
of Dissenting Common Stock in accordance with the provisions of such
Section 262 unless and until such holders fail to perfect or effectively
withdraw or lose their rights to appraisal and payment under the DGCL. If, after
the Effective Time, any such holder fails to perfect or effectively withdraws or
loses such right, such shares of Dissenting Common Stock will thereupon be
treated as if they had been converted into and have become exchangeable for, at
the Effective Time, the right to receive the merger consideration attributable
to such shares of Dissenting Common Stock. Notwithstanding anything to the
contrary contained in this Section 3.8, if the Merger is not consummated,
then the right of any stockholder to be paid the fair value of such
stockholder’s Dissenting Common Stock pursuant to Section 262 of the DGCL
shall cease. BPOMS will promptly comply with its obligations under
Section 262 of the DGCL and will give HealthAxis prompt notice of any
demands and withdrawals of such demands received by BPOMS for appraisals of
shares of Dissenting Common Stock.

     

    ARTICLE
4

    EXCHANGE
OF SHARES

     

    
      	
               
      

            	
              4.1                              
      Exchange of Common Stock
Certificates.

            

    

    
      	
               
      

            	
               

            

    

    
      	
               
      

            	
              (a)                                 
      Prior to the Effective Time, HealthAxis shall designate either its
      transfer agent as of the date hereof or a bank or trust company as shall
      be reasonably acceptable to BPOMS, to act as Exchange Agent in connection
      with the Merger (the “Exchange
      Agent”). At or immediately prior to the Effective Time, HealthAxis
      will take all steps necessary to deposit with the Exchange Agent for the
      benefit of the holders of BPOMS Common Shares certificates representing
      the aggregate number of shares of HealthAxis Common Stock issuable
      pursuant to Section 3.2 in exchange for outstanding BPOMS Common
      Shares.

            

    

    
      	
               
      

            	
               

            

    

    
      	
               
      

            	
              (b)                                
      Promptly after the Effective Time, HealthAxis and the Surviving
      Corporation shall cause the Exchange Agent to mail to each Person who was
      a record holder, as of the Effective Time, of an outstanding certificate
      or certificates that immediately prior to the Effective Time represented
      BPOMS Common Shares (the “Certificates”),
      a letter of transmittal (which shall specify that delivery shall be
      effected, and risk of loss and title to the Certificates shall pass, only
      upon proper delivery of the Certificates to the Exchange Agent) and
      instructions for use in effecting the surrender of the Certificates in
      exchange for certificates evidencing HealthAxis Common Shares. Upon
      surrender to the Exchange Agent of a Certificate, together with such
      letter of transmittal duly executed, and
any

            

    

     

    16

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    
      	
               
      

            	
               

            

    

    other
required documents, the holder of such Certificate shall be entitled to receive
in exchange therefor (i) a certificate representing the number of whole
shares of HealthAxis Common Stock to which such holder shall be entitled
pursuant to Section 3.2, and (ii) any dividends or other distributions
to which such holder is entitled pursuant to Section 4.1(c) (the
HealthAxis Common Shares and cash paid pursuant to
Section 4.1(c) being referred to, collectively, as the “Exchange Merger
Consideration”) and such Certificate shall forthwith be canceled. 
The holder of such Certificate may elect to receive uncertificated shares of
HealthAxis Common Stock issued through the direct registration system instead of
a physical certificate. If payment is to be made to a Person other than the
Person in whose name the Certificate surrendered is registered, it shall be a
condition of payment that the transfer not be prohibited under applicable law
and the Certificate so surrendered shall be properly endorsed or otherwise in
proper form for transfer as determined by the Exchange Agent, and that the
Person requesting such payment shall pay any transfer, or other taxes required
by reason of the payment to a Person other than the registered holder of the
Certificate surrendered or established to the satisfaction of the Surviving
Corporation that such tax has been paid or is not applicable. Until surrendered
in accordance with the provisions of this Section 4.1, each Certificate
(other than Certificates representing Canceled BPOMS Common Shares and other
than Certificates representing Dissenting Common Stock) shall represent for all
purposes only the right to receive the Exchange Merger Consideration, without
any interest thereon. In the event of a transfer of ownership of BPOMS Common
Shares which is not registered in the stock transfer records of BPOMS, the
Exchange Merger Consideration may be issued to such a transferee if the transfer
is not prohibited under applicable law and the certificate representing BPOMS
Common Shares is presented to the Exchange Agent, accompanied by all documents
required to evidence and effect such transfer and to evidence that any
applicable stock transfer taxes have been paid or are not payable.

    
      	
               
      

            	
               

            

    

    
      	
               
      

            	
              (c)                                 
      No dividends or other distributions declared or made after the
      Effective Time with respect to shares of HealthAxis Common Stock with a
      record date after the Effective Time shall be paid to the holder of any
      unsurrendered Certificate with respect to the shares of HealthAxis Common
      Stock they are entitled to receive until the holder of such Certificate
      shall surrender such Certificate. Subject to applicable law, following
      surrender of any such Certificate, there shall be paid to the record
      holder of the certificates representing whole shares of HealthAxis Common
      Stock issued in exchange therefor, without interest, at the time of such
      surrender, the amount of dividends or other distributions with a record
      date after the Effective Time theretofore paid with respect to such whole
      shares of HealthAxis Common Stock.

            

    

    
      	
               
      

            	
               

            

    

    
      	
               
      

            	
              (d)                                
      After the Effective Time, there shall be no registration on the
      share transfer books of the Surviving Corporation of transfers of the
      BPOMS shares that were outstanding immediately prior to the Effective
      Time, and as of the Effective Time, the share ledger of BPOMS shall be
      closed. All Exchange Merger Consideration paid upon the surrender of
      Certificates in accordance with the terms of this Article 4 shall be deemed to have been paid in full
      satisfaction of all rights pertaining to the BPOMS Common Shares
      previously evidenced by Certificates. After the Effective Time, the
      holders of BPOMS Common Shares outstanding at the Effective Time shall
      cease to have any rights with respect to such BPOMS Common Shares except
      as provided herein or by applicable law. If, after the Effective Time,
      certificates evidencing BPOMS Common Shares are presented to the Surviving
      Corporation, they shall be canceled and exchanged for the Exchange Merger
      Consideration as provided in this
  Article 4.

            

    

     

    17

    
      
         

      

      
         

        
          

        

      

      
         

      

    

     

     

    
      	
               
      

            	
               

            

    

    
      	
               
      

            	
              (e)                                 
      In the event any Certificates shall have been lost, stolen or
      destroyed, the Exchange Agent shall issue in exchange for such lost,
      stolen or destroyed Certificates, upon the making of an affidavit of that
      fact by the holder thereof, such shares of HealthAxis Common Stock as may
      be required pursuant to Section 3.2 and any dividends or
      distributions payable pursuant to Section 4.1(c), provided, however,
      that HealthAxis may, in its discretion and as a condition precedent to the
      issuance and/or payment thereof, require the owner of such lost, stolen or
      destroyed Certificates to deliver a bond in such sum as it may reasonably
      direct as indemnity against any claim that may be made against HealthAxis,
      the Surviving Corporation or the Exchange Agent with respect to the
      Certificates alleged to have been lost, stolen or
    destroyed.

            

    

    
      	
               
      

            	
               

            

    

    
      	
               
      

            	
              4.2                              
      Exchange of Preferred Stock Certificates and Penny
      Warrants.

            

    

    
      	
               
      

            	
               

            

    

    
      	
               
      

            	
              (a)                                 
      Promptly after the Effective Time, HealthAxis shall mail to each
      Person who was a holder, as of the Effective Time, of an outstanding
      certificate or certificates which immediately prior to the Effective Time
      represented shares of BPOMS Series A Preferred Stock, BPOMS
      Series B Preferred Stock, BPOMS Series C Preferred Stock, BPOMS
      Series D Preferred Stock, BPOMS Series D-2 Preferred Stock or
      BPOMS Series F Preferred Stock (the “Preferred
      Certificates”) and to each person who was a holder, as of the
      Effective Time, of any BPOMS Series C Warrants or BPOMS Series D
      Warrants with an exercise price of $0.01 (the “BPOMS Penny
      Warrants”), a letter of transmittal (which shall specify that
      delivery shall be effected, and the risk of loss and title to the
      Preferred Certificates and the BPOMS Penny Warrants shall pass, only upon
      proper delivery of the Preferred Certificates and the BPOMS Penny Warrants
      to HealthAxis) and instructions for use in effecting the surrender of the
      Preferred Certificates and the BPOMS Penny Warrants in exchange for
      certificates evidencing shares of HealthAxis Common Stock or HealthAxis
      Series B Preferred Stock, as the case may be, as provided by
      Section 3.3 and 3.4. Upon surrender to HealthAxis of a Preferred
      Certificate and the BPOMS Penny Warrants, together with such letter of
      transmittal duly executed, and any other required documents, the holder of
      such Preferred Certificate and the BPOMS Penny Warrants shall be entitled
      to receive in exchange therefor a certificate representing the number of
      shares of HealthAxis Common Stock or HealthAxis Series B Preferred
      Stock to which such holder shall be entitled pursuant to Section 3.3
      or 3.4 and such Preferred Certificate and the BPOMS Penny Warrants shall
      forthwith be cancelled. A holder entitled to receive a certificate
      representing HealthAxis Common Stock may elect to receive uncertificated shares of HealthAxis Common Stock issued through the
      direct registration system instead of a physical
    certificate.

            

    

     

    18

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    
      	
               
      

            	
               

            

    

     

    
      	
               
      

            	
               

            

    

    
      	
               
      

            	
              (b)                                
      In the event any Preferred Certificates and the BPOMS Penny
      Warrants shall have been lost, stolen or destroyed, HealthAxis shall issue
      in exchange for such lost, stolen or destroyed Preferred Certificates and
      the BPOMS Penny Warrants, upon the making of an affidavit of that fact by
      the holder thereof, such shares of HealthAxis Common Stock or HealthAxis
      Series B Preferred Stock as may be required pursuant to
      Section 3.3 or 3.4, provided, however, that HealthAxis may, in its
      discretion and as a condition precedent to the issuance and/or payment
      thereof, require the owner of such lost, stolen or destroyed Preferred
      Certificates and the BPOMS Penny Warrants to deliver a bond in such sum as
      it may reasonably direct as indemnity against any claim that may be made
      against HealthAxis with respect to the Preferred Certificates and the
      BPOMS Penny Warrants alleged to have been lost, stolen or
      destroyed.

            

    

    
      	
               
      

            	
               

            

    

    
      	
               
      

            	
              4.3                              
      Withholding Rights.

            

    

    
      	
               
      

            	
               

            

    

    HealthAxis
and the Surviving Corporation shall be entitled to deduct and withhold from the
number of shares of HealthAxis Common Stock and HealthAxis Series B
Preferred Stock otherwise deliverable under the Agreement such amounts as
HealthAxis and the Surviving Corporation are required to deduct and withhold
with respect to such delivery and payment under the Code or any provision of
state, local, provincial or foreign tax law.  To the extent that amounts
are so withheld, such withheld amounts shall be treated for all purposes of this
Agreement as having been delivered and paid to the holder of shares of BPOMS
Common Stock, BPOMS Series A Preferred Stock, BPOMS Series B Preferred
Stock, BPOMS Series C Preferred Stock, BPOMS Series D Preferred Stock,
BPOMS Series D-2 Preferred Stock, BPOMS Series F Preferred Stock,
BPOMS Series C Warrant or BPOMS Series D Warrant in respect of which
such deduction and withholding was made by HealthAxis and the Surviving
Corporation.

     

    ARTICLE
5

    REPRESENTATIONS
AND WARRANTIES OF BPOMS

     

    BPOMS
hereby represents and warrants to HealthAxis and Merger Sub as follows, except
as set forth in (i) BPOMS’ Annual Report on Form 10-K for the year
ending December 31, 2007 and any other BPOMS SEC Documents (as defined
below) filed subsequent to December 31, 2007, and (ii) the written
disclosure letter delivered at or prior to the execution hereof to HealthAxis
(the “BPOMS
Disclosure Letter”). The BPOMS Disclosure Letter shall be arranged in
sections or subsections corresponding to the number and lettered sections and
subsections contained in this Article 5. The disclosures in any section or
subsection of the BPOMS Disclosure Letter shall qualify the correspondingly
numbered representation and warranty and such other representations and
warranties in this Article 5 to the extent it is reasonably clear from a
reading of the disclosure that such disclosure is applicable to such other
representations and warranties.

     

    19

    
      
         

      

      
         

        
          

        

      

      
         

      

    

     

    
      	
               
      

            	
              5.1                              
      Organization; Good Standing; Authority; Compliance with
      Law.

            

    

    
      	
               
      

            	
               

            

    

    
      	
               
      

            	
              (a)                                 
      BPOMS is a corporation duly organized, validly existing and in good
      standing under the laws of the State of Delaware and has all requisite
      power and authority to own, lease and operate its properties and to carry
      on its business as now conducted. BPOMS is duly licensed or qualified and
      is in good standing to transact business as a foreign corporation in each
      jurisdiction in which the character of the properties owned or leased by
      it therein or in which the nature of its business makes such qualification
      or licensing necessary, except where the failure to be so licensed or
      qualified would not have, individually or in the aggregate, a BPOMS
      Material Adverse Effect. For purposes of this Agreement, a “BPOMS
      Material Adverse Effect” means a material adverse effect on the
      business, assets (including intangible assets), financial condition or
      results of operations of BPOMS and the BPOMS Subsidiaries (as defined in
      Section 5.4) taken as a whole.

            

    

    
      	
               
      

            	
               

            

    

    
      	
               
      

            	
              (b)                                
      Each of the BPOMS Subsidiaries is a corporation, partnership or
      limited liability company duly incorporated or organized, validly existing
      and in good standing under the laws of its jurisdiction of incorporation
      or organization, has the corporate, partnership or limited liability
      company power and authority to own its properties and to carry on its
      business as it is now being conducted, and is duly qualified to transact
      business and is in good standing in each jurisdiction in which the
      ownership of its property or the conduct of its business requires such
      qualification, except for jurisdictions in which such failure to be so
      qualified or to be in good standing would not, individually or in the
      aggregate, have a BPOMS Material Adverse
Effect.

            

    

    
      	
               
      

            	
               

            

    

    
      	
               
      

            	
              (c)                                 
      The business of BPOMS and the BPOMS Subsidiaries is being operated
      in compliance with all laws, ordinances, regulations and orders of all
      governmental entities, except for violations that would not have,
      individually or in the aggregate, a BPOMS Material Adverse Effect. BPOMS
      and the BPOMS Subsidiaries have all permits, certificates, licenses,
      approvals, consents and other authorizations (collectively, “Government
      Approvals”) of all governmental agencies, entities, commissions,
      boards, bureaus, tribunals, officials or authorities, whether Federal,
      state or local (collectively, “Governmental
      Agencies”), required by law with respect to the operation of their
      businesses, except those the absence of which would not, individually or
      in the aggregate, have a BPOMS Material Adverse Effect or prevent or delay
      consummation of the Merger. All such Government Approvals are in full
      force and effect, and, BPOMS and the BPOMS Subsidiaries are in compliance
      with all conditions and requirements of the Government Approvals and with
      all rules and regulations relating thereto, other than failures that
      would not have a BPOMS Material Adverse Effect. BPOMS has not received any
      notices of violations of any Federal, state and local laws, regulations
      and ordinances relating to its business, operations or assets which, if it
      were determined that a violation had occurred, would have a BPOMS Material
      Adverse Effect.

            

    

     

    20

    
      
         

      

      
         

        
          

        

      

      
         

      

    

     

    
      	
               
      

            	
              (d)                                
      The certificate of incorporation or other charter documents, bylaws
      and organizational documents (and in each such case, all amendments
      thereto) of BPOMS and each of the BPOMS Subsidiaries which carries on any
      active business are listed in Section 5.1(d) of the BPOMS
      Disclosure Letter, true and correct copies of which have previously been
      delivered to HealthAxis or its
counsel.

            

    

    
      	
               
      

            	
               

            

    

    
      	
               
      

            	
              5.2                              
      Authorization, Validity and Effect of
  Agreements.

            

    

    
      	
               
      

            	
               

            

    

    BPOMS has
the requisite corporate power and authority to execute and deliver this
Agreement and to consummate the transactions contemplated hereby. The Board of
Directors of BPOMS has taken all necessary corporate action required to be taken
by it to approve this Agreement, the Merger, and the transactions contemplated
by this Agreement. The execution by BPOMS of this Agreement and the consummation
of the transactions contemplated by this Agreement have been duly authorized by
all requisite corporate action on the part of BPOMS, subject to the approvals
described in Section 5.2 of the BPOMS Disclosure Letter. This Agreement
constitutes the valid and legally binding obligation of BPOMS, enforceable
against BPOMS in accordance with its terms, subject to applicable bankruptcy,
insolvency, moratorium or other similar laws relating to creditors’ rights and
general principles of equity.

     

    
      	
               
      

            	
              5.3                              
      Capitalization.

            

    

    
      	
               
      

            	
               

            

    

    
      	
               
      

            	
              (a)                                 
      The authorized capital stock of BPOMS consists of 150,000,000
      shares of BPOMS Common Stock and 28,135,816 shares of preferred stock, par
      value $0.001 per share, of which 2,308,612 shares are designated as
      Series A (the “BPOMS
      Series A Preferred Shares”), 1,449,204 shares are designated
      as Series B (the “BPOMS
      Series B Preferred Shares”), 21,378,000 shares are designated
      as Series C (the “BPOMS
      Series C Preferred Shares”), 1,500,000 shares are designated
      as Series D (the “BPOMS
      Series D Preferred Shares”), 1,500,000 shares are designated
      as Series D-2 (the “BPOMS
      Series D-2 Preferred Shares”) and 1,300,000 shares are
      designated as Series F (the “BPOMS
      Series F Preferred Shares”).  As of the date
      hereof, there are 12,671,034 BPOMS Common Shares issued and outstanding,
      1,808,163 BPOMS Series A Preferred Shares issued and outstanding,
      1,449,204 BPOMS Series B Preferred Shares issued and outstanding,
      916,666 BPOMS Series C Preferred Shares issued and outstanding, 1,427,084 BPOMS
      Series D Preferred Shares issued and outstanding, 1,312,500 BPOMS
      Series D-2 Preferred Shares issued and outstanding and 894,942 BPOMS
      Series F Preferred Shares issued and outstanding.  All
      outstanding shares of BPOMS are duly authorized, validly issued, fully
      paid, nonassessable and free of preemptive rights or rights of first
      refusal created by statute, the Certificate of Incorporation or Bylaws of
      BPOMS or any agreement to which BPOMS is a party or by which it is bound,
      and free of any liens or encumbrances other than any liens or encumbrances
      created by or imposed upon the holders thereof or under applicable federal
      or state securities or “blue
      sky” laws.

            

    

    
      	
               
      

            	
               

            

    

    
      	
               
      

            	
              (b)                                
      Except as set forth in Section 5.3 of the BPOMS Disclosure
      Letter, BPOMS has no outstanding bonds, debentures, notes or other
      obligations the holders of which have or upon the
      happening of certain events would have the right to vote (or which are
      convertible into or exercisable or exchangeable for securities having the
      right to vote) with the stockholders of BPOMS on any
    matter.

            

    

     

    21

    
      
         

      

      
         

        
          

        

      

      
         

      

    

     

     

    
      	
               
      

            	
               

            

    

    
      	
               
      

            	
              (c)                                 
      Except for the BPOMS options and BPOMS warrants described in
      Section 5.3 of the BPOMS Disclosure Letter, there are no existing
      options, warrants, calls, subscriptions, convertible securities, or other
      rights, agreements, stock appreciation rights or similar derivative
      securities or instruments or commitments which obligate BPOMS to issue,
      transfer or sell any BPOMS Shares or make any payments in lieu thereof.
      Section 5.3 of the BPOMS Disclosure Letter contains a complete and
      correct list setting forth as of the date hereof (i) the number of
      options and warrants outstanding (setting forth for each option the plan
      under which it was granted and for each warrant whether it is a BPOMS
      Series A Warrant, BPOMS Series B Warrant, BPOMS Series C
      Warrant, BPOMS Series D Warrant or BPOMS Non-Investor Warrant),
      (ii) the dates on which such options or warrants were granted,
      (iii) the dates on which such options or warrants shall vest and
      expire and (iv) the exercise or conversion price of each outstanding
      option or warrant, as the case may be.  The terms of the BPOMS
      Options, the BPOMS Outstanding Investor Warrants and the BPOMS
      Non-Investor Warrants permit the assumption or substitution of rights to
      purchase HealthAxis Common Stock as provided in this Agreement, without
      the consent or approval of the holders of such securities or BPOMS
      stockholders. Except for such assumption or substitution, neither the
      entry into this Agreement nor the consummation of the transactions
      contemplated hereby will affect the vesting or other terms of the BPOMS
      Options, BPOMS Outstanding Investor Warrants or the BPOMS Non-Investor
      Warrants.  BPOMS does not have outstanding any shares of restricted
      stock subject to vesting. All outstanding securities of BPOMS and each
      BPOMS Subsidiary have been issued and granted in compliance in all
      material respects with (i) all applicable securities laws and
      (ii) all requirements set forth in all applicable contracts. 
      The shares of BPOMS Common Stock issued under options or warrants were
      issued in transactions which qualified for exemptions under either
      Section 4(2) of, or Rule 701 under, the Securities Act for
      stock issuances under compensatory benefit
  plans.

            

    

    
      	
               
      

            	
               

            

    

    
      	
               
      

            	
              (d)                                
      Except as set forth in Section 5.3 of the BPOMS Disclosure
      Letter, there are no agreements or understandings to which BPOMS or any
      BPOMS Subsidiary is a party with respect to the voting of any BPOMS Shares
      or which restrict the transfer of any such shares, nor does BPOMS have
      knowledge of any such agreements or understandings with respect to the
      voting of any such shares or which restrict the transfer of any such
      shares.  Except as set forth in Section 5.3 of the BPOMS
      Disclosure Letter, there are no outstanding contractual obligations of
      BPOMS or any BPOMS Subsidiary to register under the securities laws of any
      jurisdiction or to repurchase, redeem or otherwise acquire any BPOMS
      Shares or any other securities of BPOMS or any BPOMS
      Subsidiary.

            

    

    
      	
               
      

            	
               

            

    

    
      	
               
      

            	
              (e)                                 
      Materially true and complete copies of all agreements and
      instruments relating to the securities described above and in
      Section 5.3 of the BPOMS Disclosure Letter, or
      forms thereof, have been provided to HealthAxis and such agreements and
      instruments have not been amended, modified or supplemented, and there are
      no agreements to amend, modify or supplement such agreements or
      instruments in any case from the form provided to
    HealthAxis.

            

    

     

    22

    

      
        
           

        

        
           

          
            

          

        

        
           

        

      

    
      	
               
      

            	
               

            

    

     

    
      	
               
      

            	
               

            

    

    
      	
               
      

            	
              (f)                                   
      Set forth below is a summary of all securities of any type of BPOMS
      (including all shares, options, warrants, calls, subscriptions,
      convertible securities or other rights, agreements, stock appreciation
      rights, or derivative securities or instruments or commitments which
      obligate BPOMS to issue, transfer or sell any securities) that are
      outstanding as of the date hereof, which are separately categorized to
      indicate the number of such securities outstanding and the number of
      shares of BPOMS Common Stock (or any other indicated class of securities)
      into which they are convertible or
exercisable:

            

    

     

    
      	
              Security

            	 
      	
              Number

              Outstanding

            	 
      	
              Shares Into Which

              Convertible/Exercisable

            	 
      
	 
      	 
      	 
      	 
      	 
      	 
      
	
              BPOMS
      Common Stock

            	 
      	
              12,671,034

            	 
      	
              12,671,034

            	 
      
	
              BPOMS
      Series A Preferred Shares

            	 
      	
              1,808,163

            	 
      	
              1,808,163

            	 
      
	
              BPOMS
      Series B Preferred Shares

            	 
      	
              1,449,204

            	 
      	
              1,449,204

            	 
      
	
              BPOMS
      Series C Preferred Shares

            	 
      	
              916,666

            	 
      	
              0

            	 
      
	
              BPOMS
      Series D Preferred Shares

            	 
      	
              1,427,083.8

            	 
      	
              22,833,341

            	 
      
	
              BPOMS
      Series D-2 Preferred Shares

            	 
      	
              1,312,499.9

            	 
      	
              20,999,998

            	 
      
	
              BPOMS
      Series F Preferred Shares

            	 
      	
              894,942

            	 
      	
              22,373,550

            	 
      
	 
      	 
      	 
      	 
      	 
      	 
      
	
              BPOMS
      Options

            	 
      	
              15,002,954

            	 
      	
              15,002,954

            	 
      
	 
      	 
      	 
      	 
      	 
      	 
      
	
              BPOMS
      Series A Warrants

            	 
      	
              1,666,667

            	 
      	
              1,666,667

            	 
      
	
              BPOMS
      Series B Warrants

            	 
      	
              3,333,334

            	 
      	
              3,333,334

            	 
      
	
              BPOMS
      Series C Warrants

            	 
      	
              10,000,001

            	 
      	
              10,000,001

            	 
      
	
              BPOMS
      Series D Warrants (with $1.10 exercise price)

            	 
      	
              1,000,000

            	 
      	
              1,000,000

            	 
      
	
              BPOMS
      Series D Warrants (with $0.01 exercise price)

            	 
      	
              9,333,327

            	 
      	
              9,333,327

            	 
      
	
              BPOMS
      Series J Warrants

            	 
      	
              0

            	 
      	
              0

            	 
      
	
              BPOMS
      Non-Investor Warrants

            	 
      	
              2,078,261

            	 
      	
              2,078,261

            	 
      

    

    
      	
               
      

            	
               

            

    

    
      	
               
      

            	
              5.4                              
      Subsidiaries.

            

    

    
      	
               
      

            	
               

            

    

    Section 5.4
of the BPOMS Disclosure Letter lists all Subsidiaries (as defined in
Section 10.13) of BPOMS which carry on any active business (the “BPOMS
Subsidiaries” and, individually, a “BPOMS
Subsidiary”). BPOMS owns directly or indirectly all of the outstanding
shares of capital stock or other equity interests of each of the BPOMS
Subsidiaries. All of the outstanding shares of capital stock in each of the
BPOMS Subsidiaries are duly authorized, validly issued, fully paid and
nonassessable. Except as set forth in Section 5.4 of the BPOMS Disclosure
Letter, all of the outstanding shares of capital stock of each of the BPOMS
Subsidiaries owned, directly or indirectly, by BPOMS are owned free and
clear of all liens, pledges, security interests, claims or other encumbrances.
Except as set forth in Section 5.4 of the BPOMS Disclosure Letter, there
are no options, warrants, calls, subscriptions, convertible securities, or other
rights, agreements or commitments which obligate BPOMS or any BPOMS Subsidiary
to issue, transfer or sell any shares of capital stock of any BPOMS Subsidiary.
The following information for each BPOMS Subsidiary is set forth in
Section 5.4 of the BPOMS Disclosure Letter: (i) its name and
jurisdiction of incorporation, (ii) its authorized capital stock and
(iii) its outstanding capital stock.

     

    23

    
      
         

      

      
         

        
          

        

      

      
         

      

    

     

     

     

    
      	
               
      

            	
              5.5                              
      Other Interests.

            

    

    
      	
               
      

            	
               

            

    

    Except
for interests in the BPOMS Subsidiaries, neither BPOMS nor any BPOMS Subsidiary
owns directly or indirectly any interest or investment (whether equity or debt)
in any corporation, partnership, joint venture, business, trust or other entity
(other than investments in short term investment securities).

     

    
      	
               
      

            	
              5.6                              
      No Violation.

            

    

    
      	
               
      

            	
               

            

    

    Except as
set forth in Section 5.6 of the BPOMS Disclosure Letter, neither the
execution and delivery by BPOMS of this Agreement nor the consummation by BPOMS
of the transactions contemplated by this Agreement in accordance with its terms
will: (i) conflict with or result in a breach of any provisions of BPOMS’
Certificate of Incorporation or Bylaws; (ii) violate, result in a breach of
any provision of, or constitute a default under, or require any approval or
consent under or result in the termination or in a right of termination or
cancellation of, or accelerate the performance required by or result in a
material adverse change to, or result in the creation of any lien, security
interest, charge or encumbrance upon any of the properties owned or leased by
BPOMS or the BPOMS Subsidiaries under, any of the terms, conditions or
provisions of any note, bond, mortgage, indenture, deed of trust or any license,
franchise, permit, lease, contract, agreement or other instrument to which BPOMS
or any of the BPOMS Subsidiaries is a party, or by which BPOMS or any of the
BPOMS Subsidiaries or any of the properties owned or leased by BPOMS or the
BPOMS Subsidiaries is bound or affected, except for any of the foregoing matters
in this clause which, individually or in the aggregate, would not have a BPOMS
Material Adverse Effect and would not reasonably be expected to prevent,
materially alter or materially delay any of the transactions contemplated by
this Agreement; (iii) contravene or conflict with or constitute a violation
of any provision of any law, rule, regulation, judgment, injunction, order or
decree binding upon or applicable to BPOMS or any BPOMS Subsidiary; or
(iv) other than the filings provided for in this Agreement, required under
the Securities Exchange Act of 1934, as amended (the “Exchange
Act”), the Securities Act or applicable state securities and “Blue
Sky” laws (collectively, the “Regulatory
Filings”), require any consent, approval or authorization of, or
declaration, filing or registration with, any governmental or regulatory
authority which has not been obtained or made, except where the failure to
obtain any such consent, approval or authorization of, or declaration, filing or
registration with, any governmental or regulatory authority would not have a
BPOMS Material Adverse Effect and could not reasonably be expected to prevent,
materially alter or materially delay any of the transactions contemplated by
this Agreement.

     

    24

    
      
         

      

      
         

        
          

        

      

      
         

      

    

     

    
      	
               
      

            	
              5.7                              
      SEC Filings; Financial
Statements.

            

    

    
      	
               
      

            	
               

            

    

    
      	
               
      

            	
              (a)                                 
      In this Agreement, all registration statements, proxy statements,
      Certifications (as defined below) and other statements, reports,
      schedules, forms and other documents filed by BPOMS with the SEC since
      December 15, 2006 are called the “BPOMS SEC
      Documents”. 
      BPOMS has delivered to HealthAxis accurate and complete copies of
      all BPOMS SEC Documents, other than any BPOMS SEC Documents which can be
      obtained on the SEC’s website at www.sec.gov. Except as set forth on
      Section 5.7(a) of the BPOMS Disclosure Letter or as would not
      have a BPOMS Material Adverse Effect, all statements, reports, schedules,
      forms and other documents required to have been filed by BPOMS with the
      SEC within the twelve-month period preceding the date of this Agreement
      have been duly filed on a timely basis. None of the BPOMS Subsidiaries is
      required to file any documents with the SEC under the Exchange Act. As of
      the time it was filed with the SEC (or, if amended or superseded by a
      filing prior to the date of this Agreement, then on the date of such
      filing): (i) each of the BPOMS SEC Documents complied in all material
      respects with the applicable requirements of the Securities Act or the
      Exchange Act (as the case may be); and (ii) none of the BPOMS SEC
      Documents contained any untrue statement of a material fact or omitted to
      state a material fact required to be stated therein or necessary in order
      to make the statements therein, in the light of the circumstances under
      which they were made, not misleading. The certifications and statements
      required by (A) Rule 13a-14 under the Exchange Act and
      (B) 18 U.S.C. §1350 (Section 906 of the Sarbanes-Oxley Act)
      relating to the BPOMS SEC Documents (collectively, the “Certifications”)
      are accurate and complete and comply as to form and content with all
      applicable laws or rules of applicable governmental and regulatory
      authorities.

            

    

    
      	
               
      

            	
               

            

    

    
      	
               
      

            	
              (b)                                
      Except as described in the BPOMS SEC Documents, (i) BPOMS
      maintains disclosure controls and procedures that satisfy the requirements
      of Rule 13a-15 under the Exchange Act, and (ii) such disclosure
      controls and procedures are designed to ensure that all material
      information concerning BPOMS is made known on a timely basis to the
      individuals responsible for the preparation of BPOMS’ filings with the SEC
      and other public disclosure
documents.

            

    

    
      	
               
      

            	
               

            

    

    
      	
               
      

            	
              (c)                                 
      The financial statements (including any related notes) contained or
      incorporated by reference in the BPOMS SEC Documents: (i) complied as
      to form in all material respects with the published rules and
      regulations of the SEC applicable thereto; (ii) were prepared in
      accordance with generally accepted accounting principles (“GAAP”) (except as may be
      indicated in the notes to such financial statements or, in the case of
      unaudited financial statements, as permitted by Form 10-QSB of the
      SEC, and except that the unaudited financial statements may not contain
      footnotes and are subject to normal and recurring year-end adjustments
      that are not reasonably expected to be material in amount) applied on a
      consistent basis unless otherwise noted therein throughout the periods
      indicated; and (iii) fairly present the consolidated financial
      position of BPOMS and the BPOMS Subsidiaries as of the respective dates
      thereof and the consolidated results of operations and cash flows of BPOMS
      and the BPOMS Subsidiaries for the periods covered
  thereby.

            

    

     

    25

    
      
         

      

      
         

        
          

        

      

      
         

      

    

     

     

    
      	
               
      

            	
               

            

    

    
      	
               
      

            	
              (d)                                
      BPOMS’ auditor has at all required times since the date of
      enactment of the Sarbanes-Oxley Act been: (i) to the knowledge of
      BPOMS, a registered public accounting firm (as defined in
      Section 2(a)(12) of the Sarbanes-Oxley Act); (ii) “independent”
      with respect to BPOMS and the BPOMS Subsidiaries within the meaning of
      Regulation S-X under the Exchange Act; and (iii) to the knowledge of
      BPOMS, in compliance with subsections (g) through (l) of
      Section 10A of the Exchange Act and the rules and regulations
      promulgated by the SEC and the Public Company Accounting Oversight Board
      thereunder. Section 5.7(d) of the BPOMS Disclosure Letter
      contains an accurate and complete description of all non-audit services
      performed by BPOMS’ auditors for BPOMS and the BPOMS Subsidiaries since
      December 15, 2006 and the fees paid for such services. All such
      non-audit services were approved as required by Section 202 of the
      Sarbanes-Oxley Act.

            

    

    
      	
               
      

            	
               

            

    

    
      	
               
      

            	
              (e)                                 
      Section 5.7(e) of the BPOMS Disclosure Letter lists, and
      BPOMS has delivered to HealthAxis accurate and complete copies of the
      documentation creating or governing, all securitization transactions and
      “off-balance
      sheet arrangements” (as defined in Item 303(c) of Regulation
      S-K under the Exchange Act) effected by BPOMS since December 15,
      2006.

            

    

    
      	
               
      

            	
               

            

    

    
      	
               
      

            	
              5.8                              
      Litigation.

            

    

    
      	
               
      

            	
               

            

    

    Except as
set forth in Section 5.8 of the BPOMS Disclosure Letter, there are
(i) no continuing orders, injunctions or decrees of any court, arbitrator
or governmental authority to which BPOMS or any BPOMS Subsidiary is a party or
by which any of its properties or assets are bound or likely to be affected and
(ii) no actions, suits or proceedings pending against BPOMS or any BPOMS
Subsidiary or to which any of their respective properties or assets are subject
or, to the knowledge of BPOMS, threatened against BPOMS or any BPOMS Subsidiary
or to which any of their respective properties or assets are subject, at law or
in equity, that in each such case could, individually or in the aggregate, have
a BPOMS Material Adverse Effect.

     

    
      	
               
      

            	
              5.9                              
      Absence of Certain Changes.

            

    

    
      	
               
      

            	
               

            

    

    Except as
set forth in Sections 5.7(c) or 5.9 of the BPOMS Disclosure Letter or the
BPOMS SEC Documents, since December 31, 2007, BPOMS and the BPOMS
Subsidiaries have conducted their business only in the ordinary course of such
business and consistent with past practices and there has not been
any:

     

    
      	
               
      

            	
              (a)                                 
      BPOMS Material Adverse
Effect;

            

    

    
      	
               
      

            	
               

            

    

    
      	
               
      

            	
              (b)                                
      amendment or change in the Certificate of Incorporation or By-Laws
      of BPOMS or in any similar organizational documents of any BPOMS
      Subsidiaries, other than as contemplated by this
  Agreement;

            

    

     

    26

    
      
         

      

      
         

        
          

        

      

      
         

      

    

     

    
      	
               
      

            	
              (c)                                 
      incurrence, creation or assumption by BPOMS or any of the BPOMS
      Subsidiaries of (i) any mortgage, deed of trust, security interest,
      pledge, lien, title retention device, collateral assignment, claim,
      charge, restriction or other encumbrance of any kind on any of the assets
      or properties of BPOMS or any of the BPOMS Subsidiaries; or (ii) any
      obligation or liability of any indebtedness for borrowed
      money;

            

    

    
      	
               
      

            	
               

            

    

    
      	
               
      

            	
              (d)                                
      issuance or sale of any debt or equity securities of BPOMS or any
      of the BPOMS Subsidiaries, or the issuance or grant of any options,
      warrants or other rights to acquire from BPOMS or any of the BPOMS
      Subsidiaries, directly or indirectly, any debt or equity securities of
      BPOMS or any of the BPOMS Subsidiaries (other than the shares issued and
      options authorized as part of the BPOMS Pre-Merger Steps as contemplated
      by this Agreement);

            

    

    
      	
               
      

            	
               

            

    

    
      	
               
      

            	
              (e)                                 
      purchase, license, sale, assignment or other disposition or
      transfer, or any agreement or other arrangement for the purchase, license,
      sale, assignment or other disposition or transfer, of any of the assets,
      properties or goodwill of BPOMS other than a license or sale of any
      product or products of BPOMS or any of the BPOMS Subsidiaries made in the
      ordinary course of BPOMS’ business;

            

    

    
      	
               
      

            	
               

            

    

    
      	
               
      

            	
              (f)                                   
      payment or discharge by BPOMS or any of the BPOMS Subsidiaries of
      any security interest, lien, claim, or encumbrance of any kind on any
      asset or property of BPOMS or any of the BPOMS Subsidiaries, or the
      payment or discharge of any liability that was not either shown or
      reflected in the BPOMS SEC Documents or incurred in the ordinary course of
      BPOMS’ business after December 31, 2007 and was in an amount in
      excess of $150,000 for any single liability to a particular
      creditor;

            

    

    
      	
               
      

            	
               

            

    

    
      	
               
      

            	
              (g)                                
      damage, destruction or loss of any property or asset, whether or
      not covered by insurance, having (or likely with the passage of time to
      have) a BPOMS Material Adverse
Effect;

            

    

    
      	
               
      

            	
               

            

    

    
      	
               
      

            	
              (h)                                
      declaration, setting aside or payment of any dividend on, or the
      making of any other distribution in respect of, the capital stock of
      BPOMS, any split, combination or recapitalization of the capital stock of
      BPOMS or any direct or indirect redemption, purchase or other acquisition
      of the capital stock of BPOMS or any change in any rights, preferences,
      privileges or restrictions of any outstanding security of BPOMS, other
      than as contemplated by this
Agreement;

            

    

    
      	
               
      

            	
               

            

    

    
      	
               
      

            	
              (i)                                    
      increase in the compensation payable or to become payable to any of
      the officers, directors or employees of BPOMS or any of the BPOMS
      Subsidiaries, or any bonus or pension, insurance or other benefit payment
      or arrangement (including without limitation stock awards, stock option
      grants, stock appreciation rights or stock option grants other than
      issuance of stock options as part of the BPOMS Pre-Merger Steps) made to
      or with any of such officers, directors or employees, other than increases
      in base salary for employees (excluding senior management employees) in
      the ordinary course of business and consistent with past
      practice;

            

    

     

    27

    
      
         

      

      
         

        
          

        

      

      
         

      

    

     

    
      	
               
      

            	
              (j)                                    
      obligation or liability incurred by BPOMS or any of the BPOMS
      Subsidiaries to any of its officers, directors or stockholders except for
      normal and customary compensation and expense allowances payable to
      officers in the ordinary course of BPOMS’ business consistent with past
      practice and except in connection with the BPOMS Pre-Merger
      Steps;

            

    

    
      	
               
      

            	
               

            

    

    
      	
               
      

            	
              (k)                                 
      making by BPOMS or any of the BPOMS Subsidiaries of any loan,
      advance or capital contribution to, or any investment in, any officer,
      director, employee or stockholder of BPOMS or of any BPOMS Subsidiary or
      any firm or business enterprise in which any such Person had a direct or
      indirect material interest at the time of such loan, advance, capital
      contribution or investment;

            

    

    
      	
               
      

            	
               

            

    

    
      	
               
      

            	
              (l)                                    
      entering into, amendment of, relinquishment, termination or
      non-renewal by BPOMS or any BPOMS Subsidiary of any contract, lease,
      transaction, commitment or other right or obligation other than in the
      ordinary course of its business, or any written or oral indication or
      assertion by the other party thereto of any problems with BPOMS’ or any
      BPOMS Subsidiary’s services or performance under such contract, lease,
      transaction, commitment or other right or obligation having a BPOMS
      Material Adverse Effect, or of such other party’s demand to amend,
      terminate or not renew any such contract, lease, transaction, commitment
      or other right or obligation which would be likely to have a BPOMS
      Material Adverse Effect;

            

    

    
      	
               
      

            	
               

            

    

    
      	
               
      

            	
              (m)                              
      material change in the manner in which BPOMS or any BPOMS
      Subsidiary extends discounts, credits or warranties to customers or
      otherwise deals with its customers;

            

    

    
      	
               
      

            	
               

            

    

    
      	
               
      

            	
              (n)                                
      entering into by BPOMS or any of the BPOMS Subsidiaries of any
      transaction, contract or agreement that by its terms requires or
      contemplates a required minimum current and/or future financial
      commitment, expenses (inclusive of overhead expenses) or obligation on the
      part of BPOMS or any of the BPOMS Subsidiaries involving in excess of
      $150,000, excluding legal and accounting fees associated with this
      Agreement and the transactions contemplated hereby) or that is not entered
      into in the ordinary course of BPOMS’ business, or the conduct of any
      business or operations by BPOMS or any BPOMS Subsidiary that is other than
      in the ordinary course of BPOMS’ or such BPOMS Subsidiary’s business;
      or

            

    

    
      	
               
      

            	
               

            

    

    
      	
               
      

            	
              (o)                                
      license, transfer or grant of a right under any BPOMS Intellectual
      Property (as defined in Section 5.18 below), other than those
      licensed, transferred or granted in the ordinary course of business
      consistent with its past practices.

            

    

    
      	
               
      

            	
               

            

    

    
      	
               
      

            	
              5.10                       
      Taxes.

            

    

    
      	
               
      

            	
               

            

    

    Except as
set forth in Section 5.10 of the BPOMS Disclosure Letter or where such
failure would not have, individually or in the aggregate, a BPOMS Material
Adverse Effect:

     

    
      	
               
      

            	
              (a)                                 
      BPOMS and each of the BPOMS Subsidiaries has paid or caused to be
      paid all federal, state, local, foreign, and other taxes, and all
      deficiencies, or other additions to tax, interest,
      fines and penalties (collectively, “Taxes”),
      owed or accrued by it and due and payable through the date hereof
      (including any Taxes payable pursuant to Treasury Regulation § 1.1502-6
      and any similar state, local or foreign
  provision).

            

    

     

    28

    
      
         

      

      
         

        
          

        

      

      
         

      

    

     

     

    
      	
               
      

            	
               

            

    

    
      	
               
      

            	
              (b)                                
      BPOMS and each of the BPOMS Subsidiaries has timely filed all
      federal, state, local and foreign tax returns (collectively “Tax
      Returns”) required to be filed by any of them through the date
      hereof, and all such returns accurately set forth the amount of any Taxes
      relating to the applicable period.

            

    

    
      	
               
      

            	
               

            

    

    
      	
               
      

            	
              (c)                                 
      BPOMS and each of the BPOMS Subsidiaries has withheld and paid all
      Taxes required to have been withheld and paid in connection with amounts
      paid or owing to any employee, independent contractor, creditor,
      shareholder or other party.

            

    

    
      	
               
      

            	
               

            

    

    
      	
               
      

            	
              (d)                                
      The financial statements included in the BPOMS SEC Documents
      reflect adequate reserves for Taxes payable by BPOMS and each BPOMS
      Subsidiary for all taxable periods and portions thereof through the date
      of such financial statements.

            

    

    
      	
               
      

            	
               

            

    

    
      	
               
      

            	
              (e)                                 
      Since December 31, 2007, each of BPOMS and the BPOMS
      Subsidiaries has made sufficient accrual for Taxes in accordance with GAAP
      with respect to periods for which Tax Returns have not been filed. 
      All liabilities for Taxes attributable to the period commencing on the day
      following the filing date of the most recently filed BPOMS SEC Documents
      were incurred in the ordinary course of
  business.

            

    

    
      	
               
      

            	
               

            

    

    
      	
               
      

            	
              (f)                                   
      There are no outstanding agreements, waivers or arrangements
      extending the statutory period of limitations applicable to any claim for,
      or the period for the collection or assessment of, Taxes due from BPOMS or
      any BPOMS Subsidiary for any taxable period and there have been no
      deficiencies proposed, assessed or asserted for such
  Taxes.

            

    

    
      	
               
      

            	
               

            

    

    
      	
               
      

            	
              (g)                                
      There are no closing agreements that could affect Taxes of BPOMS or
      any BPOMS Subsidiary for periods after the Effective Time pursuant to
      Section 7121 of the Code or any similar provision under state, local
      or foreign tax laws.

            

    

    
      	
               
      

            	
               

            

    

    
      	
               
      

            	
              (h)                                
      No audit or other proceedings by any court, governmental or
      regulatory authority or similar authority relating to Taxes has occurred,
      been asserted or is pending and none of BPOMS or any BPOMS Subsidiary has
      received notice that any such audit or proceeding may be
      commenced.

            

    

    
      	
               
      

            	
               

            

    

    
      	
               
      

            	
              (i)                                    
      No election has been made or filed by or with respect to, and no
      consent to the application of, Section 341(f)(2) of the Code has
      been made by or with respect to, BPOMS, any BPOMS Subsidiary or any of
      their properties or assets.

            

    

    
      	
               
      

            	
               

            

    

    
      	
               
      

            	
              (j)                                    
      None of BPOMS or any BPOMS Subsidiary has agreed to, or filed
      application for, or is required, to make any changes or adjustment to its
      accounting method.

            

    

     

    29

    
      
         

      

      
         

        
          

        

      

      
         

      

    

     

    
      	
               
      

            	
              (k)                                 
      Except as set forth in Section 5.10(k) of the BPOMS
      Disclosure Letter, there is no contract, agreement, plan or arrangement
      covering any Person that, individually or collectively, could give rise to
      the payment of any amount that would not be deductible by BPOMS or any
      BPOMS Subsidiary by reason of Section 280G or
      Section 162(m) of the
Code.

            

    

    
      	
               
      

            	
               

            

    

    
      	
               
      

            	
              (l)                                    
      Neither BPOMS nor any BPOMS Subsidiary has (i) been a member
      of an affiliated group (within the meaning of Section 1504 of the
      Code) or an affiliated, combined, consolidated, unitary, or similar group
      for state, local or foreign Tax purposes, other than the group of which
      BPOMS is the common parent or (ii) any liability for or in respect of
      the Taxes of, or determined by reference to the Tax liability of, another
      Person (other than BPOMS or any BPOMS Subsidiary) under Treasury
      Regulation § 1.1502-6 (or any similar provision of state, local or
      foreign law), as a transferee or successor, by contract or
      otherwise.

            

    

    
      	
               
      

            	
               

            

    

    
      	
               
      

            	
              (m)                              
      Neither BPOMS nor any BPOMS Subsidiary has constituted either a
      “distributing corporation” or a “controlled corporation” in a distribution
      of stock qualifying for tax-free treatment under Section 355 of the
      Code (x) in the two (2) years prior to the date of this
      Agreement or (y) in a distribution which could otherwise constitute
      part of a “plan” or “series of related transactions” (within the meaning
      of Section 355(e) of the Code) in conjunction with the
      Merger.

            

    

    
      	
               
      

            	
               

            

    

    
      	
               
      

            	
              (n)                                
      Neither BPOMS nor any BPOMS Subsidiary is a party to any agreement
      providing for the allocation, indemnification, or sharing of Taxes other
      than any such agreement to which BPOMS or any BPOMS Subsidiary are the
      exclusive parties.

            

    

    
      	
               
      

            	
               

            

    

    BPOMS has
not taken any action or engaged in any activities that would preclude the
treatment of the Merger as a reorganization under Section 368(a) of
the Code.  In addition, BPOMS has no plan or intention to take any action
or engage in any activities that would preclude the treatment of the Merger as a
reorganization of under Section 368(a) of the Code.

     

    
      	
               
      

            	
              5.11                       
      Books and Records.

            

    

    
      	
               
      

            	
               

            

    

    
      	
               
      

            	
              (a)                                 
      The books of account and other financial records of BPOMS and each
      of the BPOMS Subsidiaries are true, complete and correct in all material
      respects, and have been maintained in accordance with good business
      practices, since December 15,
2006.

            

    

    
      	
               
      

            	
               

            

    

    
      	
               
      

            	
              (b)                                
      The minute books and other records of BPOMS and each of the BPOMS
      Subsidiaries contain accurate records of all meetings and accurately
      reflect all other action of the stockholders and Board of Directors and
      any committees of the Board of Directors of BPOMS and each of the BPOMS
      Subsidiaries since December 15,
2006.

            

    

     

    30

    
      
         

      

      
         

        
          

        

      

      
         

      

    

     

    
      	
               
      

            	
              5.12                       
      Properties.

            

    

    
      	
               
      

            	
               

            

    

    
      	
               
      

            	
              (a)                                 
      Section 5.12 (a) of the BPOMS Disclosure Letter sets
      forth a list of all real property currently, or since December 15,
      2006, owned or leased by BPOMS or any of the BPOMS Subsidiaries, and, with
      respect to all real property currently leased by BPOMS or any of the BPOMS
      Subsidiaries, the location of the property, the unexpired term of the
      lease and the aggregate annual rental and/or other fees payable under any
      such lease. All such current leases are, to the knowledge of BPOMS, in
      full force and effect, are valid and effective in accordance with their
      respective terms, and there is not to the knowledge of BPOMS any existing
      material default or event of default under any such lease (or event which
      with notice or lapse of time, or both, would constitute such a material
      default).

            

    

    
      	
               
      

            	
               

            

    

    
      	
               
      

            	
              (b)                                
      BPOMS and each of the BPOMS Subsidiaries has good and valid title
      to, or, in the case of leased properties and assets, valid leasehold
      interests in, all of its tangible properties and assets, real, personal
      and mixed, used or held for use in its business, free and clear of any
      liens, except as reflected in the BPOMS SEC Documents or in
      Section 5.12(b) of the BPOMS Disclosure Letter and except for
      liens for taxes not yet due and payable and such imperfections of title
      and encumbrances, if any, which are not material in character, amount or
      extent, and which do not materially detract from the value, or materially
      interfere with the present use, of the property subject thereto or
      affected thereby.

            

    

    
      	
               
      

            	
               

            

    

    
      	
               
      

            	
              5.13                       
      Environmental Matters.

            

    

    
      	
               
      

            	
               

            

    

    Except as
set forth in Section 5.13 of the BPOMS Disclosure Letter, neither BPOMS nor
any of the BPOMS Subsidiaries is in violation of any laws, regulations,
judgments or consent decrees relating to hazardous substances or hazardous waste
(collectively, “Environmental
Laws”) which violation could reasonably be expected to result in a BPOMS
Material Adverse Effect. Except as set forth in Section 5.13 of the BPOMS
Disclosure Letter, neither BPOMS, any of the BPOMS Subsidiaries, nor, to the
knowledge of BPOMS, any third party, has used, released, discharged, generated,
manufactured, produced, stored, or disposed of in, on, or under or about its
owned or leased property or other assets, or transported thereto or therefrom,
any hazardous substances or hazardous wastes, including asbestos, lead and
petroleum, during the period of BPOMS’ or the BPOMS Subsidiary’s ownership or
lease of such property in a manner that could reasonably be expected to subject
BPOMS or any BPOMS Subsidiary to a material liability under the Environmental
Laws. None of BPOMS or any of the BPOMS Subsidiaries has received written notice
from any governmental authority that any property owned or leased by BPOMS or
any of the BPOMS Subsidiaries is in violation of any Environmental Laws. There
is no pending civil, criminal or administrative suit or other legal proceeding
against BPOMS or any of the BPOMS Subsidiaries with respect to any Environmental
Laws. BPOMS has provided HealthAxis complete copies of all environmental
reports, assessments and studies in BPOMS’ possession and control with respect
to properties owned or leased by BPOMS or any BPOMS Subsidiary. As used in this
Agreement, the terms “hazardous
substances” and “hazardous
wastes” shall have the meanings set forth in the Comprehensive
Environmental Response, Compensation and Liability Act, as amended, and the
regulations thereunder; the Resource Conservation and Recovery Act, as
amended, and the regulations thereunder; the Federal Clean Water Act, as
amended, and the regulations thereunder; the Clean Air Act, 42 U.S.C. Sections
7401 et seq.; the Federal Insecticide, Fungicide and Rodenticide Act, 7 U.S.C.
Sections 136 et seq.; the Emergency Planning and Community Right-to-Know Act, 42
U.S.C. Sections 11001 et seq.; the Occupational Safety and Health Act of 1970;
the Hazardous Materials Transportation Act, as amended by the Hazardous
Materials Transportation Authorization Act of 1994, 49 U.S.C. Sections 5101 et
seq.; the Toxic Substances Control Act, 15 U.S.C. Sections 2601 et seq.; the Oil
Pollution Act of 1990,33 U.S.C. Sections 2701 et seq.; as each of these may be
amended from time to time; and any and state or local analogues to any of these
statutes.

     

    31

    
      
         

      

      
         

        
          

        

      

      
         

      

    

     

     

     

    
      	
               
      

            	
              5.14                       
      Brokers.

            

    

    
      	
               
      

            	
               

            

    

    Except as
set forth on Section 5.14 of the BPOMS Disclosure Letter, neither BPOMS nor
any of the BPOMS Subsidiaries has entered into any contract, arrangement or
understanding with any Person or firm that may result in the obligation of such
entity or HealthAxis or the Surviving Corporation to pay any finder’s fees,
brokerage or agent’s commissions or other like payments in connection with the
negotiations leading to this Agreement or the consummation of the transactions
contemplated hereby. BPOMS is not aware of any claim for payment of any finder’s
fees, brokerage or agent’s commissions or other like payments in connection with
the negotiations leading to this Agreement or the consummation of the
transactions contemplated hereby other than as set forth in Section 5.14 of
the BPOMS Disclosure Letter.

     

    
      	
               
      

            	
              5.15                       
      Related Party Transactions.

            

    

    
      	
               
      

            	
               

            

    

    Except as
set forth in the BPOMS SEC Documents or the BPOMS Disclosure Letter, since
December 31, 2007, no event has occurred that would be required to be
reported by BPOMS pursuant to Item 404 of Regulation S-B promulgated under the
Securities Act.

     

    
      	
               
      

            	
              5.16                       
      Contracts and Commitments.

            

    

    
      	
               
      

            	
               

            

    

    
      	
               
      

            	
              (a)                                 
      Except as filed with the BPOMS SEC Documents or as set forth in
      Section 5.16(a) of the BPOMS Disclosure Letter, neither BPOMS
      nor any of the BPOMS Subsidiaries has, or is party to or is bound
      by:

            

    

    
      	
               
      

            	
               

            

    

    
      	
               
      

            	
              (i)                                    
      any consulting agreement, contract or commitment under which any
      firm or other organization provides consulting services to BPOMS or any of
      the BPOMS Subsidiaries, other than in the ordinary course of business and
      consistent with past practice;

            

    

    
      	
               
      

            	
               

            

    

    
      	
               
      

            	
              (ii)                                 
      any fidelity or surety bond or completion
  bond;

            

    

    
      	
               
      

            	
               

            

    

    
      	
               
      

            	
              (iii)                              
      any guaranty of the obligations of a third
  party;

            

    

    
      	
               
      

            	
               

            

    

    
      	
               
      

            	
              (iv)                             
      any agreement, contract, commitment, transaction or series of
      transactions for any purpose other than in the ordinary course of BPOMS’
      or any of the BPOMS Subsidiaries’ business relating to capital
      expenditures or commitments or long term obligations in excess of
      $150,000;

            

    

     

    32

    
      
         

      

      
         

        
          

        

      

      
         

      

    

     

    
      	
               
      

            	
              (v)                               
      any agreement, contract or commitment relating to the disposition
      or acquisition of assets or any interest in any business enterprise
      outside the ordinary course of BPOMS’ or any of the BPOMS Subsidiaries’
      business;

            

    

    
      	
               
      

            	
               

            

    

    
      	
               
      

            	
              (vi)                            
      any mortgages, indentures, loans or credit agreements, security
      agreements or other arrangements or instruments relating to the borrowing
      of money or extension of credit, including capital leases and also
      guaranties referred to in clause
  (iii) hereof;

            

    

    
      	
               
      

            	
               

            

    

    
      	
               
      

            	
              (vii)                         
      any purchase order or contract for the purchase of inventory or
      other materials involving $150,000 or
more;

            

    

    
      	
               
      

            	
               

            

    

    
      	
               
      

            	
              (viii)                     
      any assignment, license or other agreement with respect to any form
      of intangible property, excluding agreements made in the ordinary course
      of business;

            

    

    
      	
               
      

            	
               

            

    

    
      	
               
      

            	
              (ix)                            
      any agreement, contract or commitment that involves $150,000 or
      more or is not cancellable without penalty upon 30 days notice, excluding
      agreements made in the ordinary course of
  business;

            

    

    
      	
               
      

            	
               

            

    

    
      	
               
      

            	
              (x)                               
      any agreement or contract involving the sharing of profits and
      losses by BPOMS or any of the BPOMS Subsidiaries with any other
      Person;

            

    

    
      	
               
      

            	
               

            

    

    
      	
               
      

            	
              (xi)                            
      any contract containing covenants that restrict or limit the
      ability of BPOMS or any BPOMS Subsidiaries to engage in any line of
      business or compete with any person;
or

            

    

    
      	
               
      

            	
               

            

    

    
      	
               
      

            	
              (xii)                         
      any “material contracts” within the meaning set forth in Item
      601(b)(10) of Regulation S-B  promulgated under the Securities
      Act.

            

    

    
      	
               
      

            	
               

            

    

    The
contracts and other documents referred to in (i) through (xii) above and
all contracts and documents required to be filed with any BPOMS SEC Documents
shall be referred to herein as “BPOMS
Contracts”.

     

    
      	
               
      

            	
              (b)                                
      Except as would not individually or in the aggregate have a BPOMS
      Material Adverse Effect, all BPOMS Contracts are valid and binding on
      BPOMS and, to the best of the knowledge of BPOMS, on the other parties
      thereto, and are in full force and effect and enforceable against BPOMS
      and, to the best of the knowledge of BPOMS, against the other parties
      thereto, in accordance with their respective terms. Except as disclosed in
      Section 5.16(b) of the BPOMS Disclosure Letter, no approval or
      consent of, or notice to any Person the failure of which to obtain would
      have a BPOMS Material Adverse Effect is needed in order that the BPOMS
      Contracts shall continue in full force and effect in accordance with their
      terms without penalty, acceleration or rights of early termination
      following the consummation of the transactions contemplated by this
      Agreement. Except to the extent any of the following would not
      individually or in the aggregate have a BPOMS Material Adverse Effect,
      BPOMS is not in violation of, breach of or default under any BPOMS
      Contract nor, to BPOMS’ knowledge, is any other party
      to any BPOMS Contract. Except as set forth in Section 5.16 of the
      BPOMS Disclosure Letter, BPOMS is not in violation or breach of or default
      under any BPOMS Contract (including leases of real property) relating to
      non-competition, indebtedness, guarantees of indebtedness of any other
      Person, employment, or collective
bargaining.

            

    

     

    33

    
      
         

      

      
         

        
          

        

      

      
         

      

    

     

     

    
      	
               
      

            	
               

            

    

    
      	
               
      

            	
              5.17                       
      Employee Matters and Benefit
Plans.

            

    

    
      	
               
      

            	
               

            

    

    
      	
               
      

            	
              (a)                                 
      With the exception of the definition of “Affiliate”
      set forth in Section 5.17(a)(i) below (which definition shall
      apply only to this Section 5.17 and Section 6.17), for purposes
      of this Agreement, the following terms shall have the meanings set forth
      below:

            

    

    
      	
               
      

            	
               

            

    

    
      	
               
      

            	
              (i)                                    
      “Affiliate”
      shall mean any other Person under common control with or otherwise
      required to be aggregated with a Person or any Subsidiary of such Person
      as set forth in Section 414(b), (c), (m) or (0) of the Code and
      the regulations thereunder;

            

    

    
      	
               
      

            	
               

            

    

    
      	
               
      

            	
              (ii)                                 
      “Employee”
      shall mean any current, former or retired employee, officer, or director
      of a Person or any Subsidiary or any Affiliate of such
    Person;

            

    

    
      	
               
      

            	
               

            

    

    
      	
               
      

            	
              (iii)                              
      “Employee
      Agreement” shall refer to any material management, employment,
      severance, consulting, relocation, repatriation, expiration, visas, work
      permit or similar agreement or contract between a Person or any Subsidiary
      or Affiliate of such Person and any Employee or consultant that is not an
      Employee Plan;

            

    

    
      	
               
      

            	
               

            

    

    
      	
               
      

            	
              (iv)                             
      “Employee
      Plan” shall refer to any plan, program, policy, practice, contract,
      agreement or other arrangement providing for compensation, severance,
      termination pay, performance awards, stock or stock related awards, fringe
      benefits or other employee benefits or remuneration of any kind, whether
      formal or informal, funded or unfunded and whether or not legally binding,
      including without limitation, each “employee
      benefit plan” within the meaning of Section 3(3) of ERISA
      (as defined below), which is or has been maintained, contributed to, or
      required to be contributed to, by a Person or any of its Subsidiaries or
      any Affiliate for the benefit of any “Employee.”
      and pursuant to which such Person or any of its Subsidiary or any
      Affiliate has or may have any material liability contingent or
      otherwise;

            

    

    
      	
               
      

            	
               

            

    

    
      	
               
      

            	
              (v)                                
      “ERISA”
      shall mean the Employee Retirement Income Security Act of 1974, as
      amended;

            

    

    
      	
               
      

            	
               

            

    

    
      	
               
      

            	
              (vi)                             
      “IRS” shall
      mean the Internal Revenue Service;

            

    

    
      	
               
      

            	
               

            

    

    
      	
               
      

            	
              (vii)                          
      “Multiemployer
      Plan” shall mean any “Pension
      Plan” (as defined below) which is a “multiemployer
      plan,” as defined in Sections 3(37) and 4001 (a)(3) of ERISA;
      and

            

    

     

    34

    
      
         

      

      
         

        
          

        

      

      
         

      

    

     

    
      	
               
      

            	
              (viii)                       
      “Pension
      Plan” shall refer to each BPOMS and Subsidiary Employee Plan that
      is an “employee
      pension benefit plan,” within the meaning of
      Section 3(2) of ERISA.

            

    

    
      	
               
      

            	
               

            

    

    
      	
               
      

            	
              (b)                                
      Section 5.17(b) of the BPOMS Disclosure Letter contains
      an accurate and complete list of each Employee Agreement of BPOMS and
      Employee Plan of BPOMS. No benefits under any Employee Agreement or
      Employee Plan of BPOMS will be increased, or subject to accelerated
      vesting, by the occurrence of any of the transactions contemplated by this
      Agreement, nor will the value of any of the benefits thereunder be
      calculated on the basis of any transactions contemplated by this
      Agreement. Except as set forth in Section 5.17(b) of the BPOMS
      Disclosure Letter, neither BPOMS nor any of its Subsidiaries or Affiliates
      has any announced plan or commitment, whether legally binding or not, to
      establish any new Employee Plan or Employee Agreement, to modify any
      Employee Agreement (except to the extent required by law or to conform any
      such Employee Agreement to the requirements of any applicable law, in each
      case as previously disclosed to HealthAxis in writing, or as required by
      this Agreement), or to enter into any Employee Plan or Employee Agreement,
      nor does it have any intention or commitment to do any of the
      foregoing.

            

    

    
      	
               
      

            	
               

            

    

    
      	
               
      

            	
              (c)                                 
      BPOMS has provided to HealthAxis correct and complete copies of all
      material documents embodying or relating to each Employee Agreement and
      Employee Plan, including:  (i) all amendments thereto;
      (ii) the most recent annual actuarial valuations, if any, prepared
      for each BPOMS Employee Plan; (iii) the three most recent annual
      reports (Series 5500 and all schedules thereto), if any, required
      under ERISA or the Code in connection with each BPOMS Employee Plan or
      related trust; (iv) if the BPOMS Employee Plan is funded, the most
      recent annual and periodic accounting of Employee Plan assets;
      (v) the most recent summary plan description together with the most
      recent summary of material modifications, if any, required under ERISA
      with respect to each BPOMS Employee Plan; (vi) all IRS determination
      letters and rulings relating to BPOMS Employee Plans and copies of all
      applications and correspondence to or from the IRS or DOL with respect to
      any BPOMS Employee Plan; and (vii) all communications material to any
      Employee or Employees relating to any BPOMS Employee Plan and any proposed
      BPOMS Employee Plans, in each case, relating to any amendments,
      terminations, establishments, increases or decreases in benefits,
      acceleration of payments or vesting schedules or other events which would
      result in any material liability to BPOMS or any BPOMS
      Subsidiary.

            

    

    
      	
               
      

            	
               

            

    

    
      	
               
      

            	
              (d)                                
      Except as set forth in Section 5.l7(d) of the BPOMS
      Disclosure Letter:

            

    

    
      	
               
      

            	
               

            

    

    
      	
               
      

            	
              (i)                                    
      BPOMS and each of the BPOMS Subsidiaries and Affiliates has
      performed in all material respects all obligations required to be
      performed by them under each BPOMS Employee Plan, and each BPOMS Employee
      Plan has been established and maintained in all material respects in
      accordance with its terms and in compliance with all applicable laws,
      statutes, orders, rules and regulations,
      including but not limited to ERISA and the
Code;

            

    

     

    35

    
      
         

      

      
         

        
          

        

      

      
         

      

    

     

     

    
      	
               
      

            	
               

            

    

    
      	
               
      

            	
              (ii)                                 
      no “prohibited
      transaction,” within the meaning of Section 4975 of the Code
      or Section 406 of ERISA for which no class or statutory exemption is
      available, has occurred with respect to any BPOMS Employee
      Plan;

            

    

    
      	
               
      

            	
               

            

    

    
      	
               
      

            	
              (iii)                              
      there are no material actions, suits or claims pending or, to the
      knowledge of BPOMS, threatened or anticipated (other than routine claims
      for benefits) against any BPOMS Employee Plan or against the assets of any
      BPOMS Employee Plan;

            

    

    
      	
               
      

            	
               

            

    

    
      	
               
      

            	
              (iv)                             
      such BPOMS Employee Plan can be amended, terminated or otherwise
      discontinued after the Effective Time in accordance with its terms,
      without material liability to BPOMS or any of the BPOMS Subsidiaries or
      any of its Affiliates (other than ordinary administration expenses
      typically incurred in a termination
event);

            

    

    
      	
               
      

            	
               

            

    

    
      	
               
      

            	
              (v)                                
      there are no audits, inquiries or proceedings pending or, to the
      knowledge of BPOMS, threatened by the IRS or DOL with respect to any BPOMS
      Employee Plan;

            

    

    
      	
               
      

            	
               

            

    

    
      	
               
      

            	
              (vi)                             
      neither BPOMS nor any of the BPOMS Subsidiaries is subject to any
      penalty or tax with respect to any BPOMS Employee Plan under
      Section 402(i) of ERISA or Section 4975 through 4980 of the
      Code; and

            

    

    
      	
               
      

            	
               

            

    

    
      	
               
      

            	
              (vii)                          
      all contributions, including any top heavy contributions, required
      to be made prior to the Closing by BPOMS or any Affiliate to any Employee
      Plan have been made or shall be made on or before the Closing
      Date.

            

    

    
      	
               
      

            	
               

            

    

    
      	
               
      

            	
              (e)                                 
      Neither BPOMS nor any of the BPOMS Subsidiaries or Affiliates
      currently maintain, sponsor, participate in or contribute to, nor have
      they ever maintained, established, sponsored, participated in, or
      contributed to, any Pension Plan which is subject to Part 3 of
      Subtitle B of Title I of ERISA, Title IV of ERISA or Section 412 of
      the Code.

            

    

    
      	
               
      

            	
               

            

    

    
      	
               
      

            	
              (f)                                   
      At no time has BPOMS or any of the BPOMS Subsidiaries or Affiliates
      contributed to or been requested or obligated to contribute to any
      Multiemployer Plan.

            

    

    
      	
               
      

            	
               

            

    

    
      	
               
      

            	
              (g)                                
      Except as set forth in Section 5.17(g) of the BPOMS
      Disclosure Letter or as required by local, state or federal law, no
      Employee Plan or Employee Agreement to which BPOMS is a party provides, or
      is required to provide, life insurance, medical or other employee benefits
      to any Employee upon his or her retirement or termination of employment
      for any reason, and BPOMS and each of the BPOMS Subsidiaries has never
      represented, promised or contracted (whether in oral or written form) to
      any Employee (either individually or to Employees as a group) that
      such Employee(s) would be provided with life insurance, medical or
      other employee welfare benefits upon their retirement or termination of
      employment.

            

    

     

    36

    
      
         

      

      
         

        
          

        

      

      
         

      

    

     

    
      	
               
      

            	
               

            

    

    
      	
               
      

            	
              (h)                                
      The execution of this Agreement and the consummation of the
      transactions contemplated hereby will not (either alone or upon the
      occurrence of any additional or subsequent events) constitute an event
      under any Employee Agreement, Employee Plan, trust or loan that will or
      may result in any payment (whether of severance payor otherwise),
      acceleration, forgiveness of indebtedness, vesting, distribution, increase
      in benefits or obligation to fund benefits with respect to any Employee,
      except as set forth in Schedule 5.17(h) of the BPOMS Disclosure
      Letter.

            

    

    
      	
               
      

            	
               

            

    

    
      	
               
      

            	
              (i)                                    
      Except as set forth in Section 5.l7(i) of the Disclosure
      Letter, BPOMS and each of the BPOMS Subsidiaries (i) is in compliance
      in all respects with all applicable foreign, federal, state and local
      laws, rules and regulations respecting employment, employment
      practices, terms and conditions of employment and wages and hours, in each
      case, with respect to Employees except as would not have a BPOMS Material
      Adverse Effect; (ii) has withheld all amounts required by law or by
      agreement to be withheld from the wages, salaries, and other payments to
      Employees; (iii) is not liable for any arrears of wages or any taxes
      or any penalty for failure to comply with any of the foregoing; and
      (iv) is not liable for any payment to any trust or other fund or to
      any governmental or administrative authority, with respect to unemployment
      compensation benefits, social security or other benefits or obligations
      for Employees (other than routine payments to be made in the normal course
      of business and consistent with past
practice).

            

    

    
      	
               
      

            	
               

            

    

    
      	
               
      

            	
              (j)                                    
      No work stoppage or labor strike against BPOMS or any BPOMS
      Subsidiary is pending or, to the knowledge of BPOMS, threatened. Neither
      BPOMS nor any of the BPOMS Subsidiaries is involved in or, to the
      knowledge of BPOMS, threatened with, any labor dispute, grievance,
      administrative proceeding or litigation relating to labor, safety,
      employment practices or discrimination matters involving any Employee,
      including, without limitation, charges of unfair labor practices or
      discrimination complaints, which, if adversely determined, would,
      individually or in the aggregate, have a BPOMS Material Adverse Effect.
      Neither BPOMS nor any of the BPOMS Subsidiaries has engaged in any unfair
      labor practices within the meaning of the National Labor Relations Act
      that would, individually or in the aggregate, directly or indirectly have
      a BPOMS Material Adverse Effect. Neither BPOMS nor any of the BPOMS
      Subsidiaries or Affiliates has ever been a party to any agreement with any
      labor organization or union, and none of the BPOMS Employees are
      represented by any labor organization or union, nor have any BPOMS
      Employees threatened to organize or join a union or filed a petition for
      representation with the National Labor Relations
  Board.

            

    

    
      	
               
      

            	
               

            

    

    
      	
               
      

            	
              (k)                                 
      There are no (i) bonus or severance payments that could be
      payable to Employees of BPOMS under existing Employee Agreements on
      account of the transactions contemplated by this Agreement (without regard
      to termination of employment), or (ii) severance obligations that
      could be payable to Employees of BPOMS under existing
      Employee Agreements on account of terminations of employment following the
      Effective Time, except as disclosed in Section 5.17(k) of the
      BPOMS Disclosure Letter.

            

    

     

    37

    
      
         

      

      
         

        
          

        

      

      
         

      

    

     

     

    
      	
               
      

            	
               

            

    

    
      	
               
      

            	
              (l)                                    
      The employment agreements contemplated by
      Section 8.1(d) hereof shall in all respects be excepted from the
      representations set forth in this
  Section 5.17.

            

    

    
      	
               
      

            	
               

            

    

    
      	
               
      

            	
              5.18                       
      Intellectual Property.

            

    

    
      	
               
      

            	
               

            

    

    
      	
               
      

            	
              (a)                                 
      For the purposes of this Agreement, the following terms have the
      following definitions:

            

    

    
      	
               
      

            	
               

            

    

    
      	
               
      

            	
              (i)                                    
      “Intellectual
      Property” shall mean any or all of the following and all rights in,
      arising out of, or associated therewith: (a) all United States,
      international and foreign patents and applications therefor and all
      reissues, divisions, renewals, extensions, provisionals, continuations and
      continuations in part thereof; (b) all inventions (whether patentable
      or not), invention disclosures, improvements, trade secrets, proprietary
      information, know how, technology, technical data, customer lists,
      proprietary processes and formulae, all source and object code,
      algorithms, architectures, structures, display screens, layouts,
      inventions, development tools and all documentation and media
      constituting, describing or relating to the above, including, without
      limitation, manuals, memoranda and records; (c) all copyrights,
      copyrights registrations and applications therefor, and all other rights
      corresponding thereto throughout the world; (d) all industrial
      designs and any registrations and applications therefor throughout the
      world; (e) all trade names, logos, common law trademarks and service
      marks, trademark and service mark registrations and applications therefor
      throughout the world; (t) all proprietary databases and data
      collections and all rights therein throughout the world; and (g) any
      equivalent rights to any of the foregoing anywhere in the
      world.

            

    

    
      	
               
      

            	
               

            

    

    
      	
               
      

            	
              (ii)                                 
      “BPOMS
      Intellectual Property” shall mean that Intellectual Property owned
      by or licensed to or controlled by BPOMS or any of the BPOMS
      Subsidiaries.

            

    

    
      	
               
      

            	
               

            

    

    
      	
               
      

            	
              (iii)                              
      “BPOMS
      Registered Intellectual Property” means those United States,
      international and foreign: (a) patents and patent applications
      (including provisional applications); (b) registered trademarks and
      service marks, applications to register trademarks or service marks,
      intent to use applications, or other registrations or applications related
      to trademarks or service marks; and (c) registered copyrights and
      applications for copyright registration, owned by
  BPOMS.

            

    

    
      	
               
      

            	
               

            

    

    
      	
               
      

            	
              (iv)                             
      “Utilize”
      or “Utilization”
      means to make, manufacture, use, market, import, export, distribute, sell,
      dispose, assign, license, develop, publish, display, modify and/or
      amend.

            

    

     

    38

    
      
         

      

      
         

        
          

        

      

      
         

      

    

     

    
      	
               
      

            	
              (b)                                
      Section 5.18(b) of the BPOMS Disclosure Letter lists all
      material proceedings or actions known to BPOMS before any court, tribunal
      (including the United States Patent and Trademark Office (“PTO”)
      or equivalent authority anywhere in the world) related to any BPOMS
      Intellectual Property. No BPOMS Intellectual Property is the subject of
      any outstanding decree, order, judgment, agreement, or stipulation
      restricting in any manner the use, transfer, or licensing thereof by BPOMS
      or any of the BPOMS Subsidiaries, or which may affect the validity, use or
      enforceability of any BPOMS Intellectual
  Property.

            

    

    
      	
               
      

            	
               

            

    

    
      	
               
      

            	
              (c)                                 
      Section 5.18(c) of the BPOMS Disclosure Letter lists all
      BPOMS Registered Intellectual Property. With respect to each item of BPOMS
      Registered Intellectual Property, necessary registration, maintenance and
      renewal fees in connection with such BPOMS Registered Intellectual
      Property have been made and all necessary documents and certificates in
      connection with such BPOMS Registered Intellectual Property have been
      filed with the relevant patent, trademark or copyright authorities in the
      United States or other jurisdictions for the purposes of maintaining such
      BPOMS Registered Intellectual
Property.

            

    

    
      	
               
      

            	
               

            

    

    
      	
               
      

            	
              (d)                                
      BPOMS or a BPOMS Subsidiary has the right to prevent others from
      using, marketing, distributing, selling or licensing all BPOMS
      Intellectual Property used in its business as presently conducted and as
      it is expected to be conducted as of the Effective Time, including without
      limitation, all Intellectual Property used or to be used in the BPOMS
      Products (as defined below), and such rights to Utilize the BPOMS
      Intellectual Property are sufficient for such conduct of their respective
      businesses.

            

    

    
      	
               
      

            	
               

            

    

    
      	
               
      

            	
              (e)                                 
      To BPOMS’ knowledge, Utilization by BPOMS or any of the BPOMS
      Subsidiaries of any BPOMS products currently being licensed, produced or
      sold by BPOMS or any of the BPOMS Subsidiaries or currently under
      development or consideration by BPOMS or any of the BPOMS Subsidiaries
      (“BPOMS
      Products”) does not violate any license or agreement between BPOMS
      or any of the BPOMS Subsidiaries and any third party or, to BPOMS’
      knowledge, infringe any Intellectual Property right, moral right or right
      of publicity or privacy of any other party, and, except as set forth in
      Section 5.18(e) of the BPOMS Disclosure Letter, BPOMS has not
      received notice of any pending or threatened claim or litigation
      contesting the validity, ownership or right to Utilize any BPOMS
      Intellectual Property nor, to the knowledge of BPOMS, is there any basis
      for any such claim under applicable law, nor has BPOMS or any of the BPOMS
      Subsidiaries received any notice asserting that any BPOMS Products or the
      Utilization thereof conflicts or will conflict with the rights of any
      other party.

            

    

    
      	
               
      

            	
               

            

    

    
      	
               
      

            	
              (f)                                   
      BPOMS and the BPOMS Subsidiaries have timely and satisfactorily
      fulfilled their respective obligations under all material agreements
      pursuant to which BPOMS or any of the BPOMS Subsidiaries, as the case may
      be, has agreed to program, design or develop on behalf of a third party,
      whether for original use or for porting or conversion (for use on a
      different hardware platform or in a different language), any software
      products or any part thereof’ except where the failure to so comply would
      not reasonably be expected to have a BPOMS Material Adverse
      Effect.

            

    

     

    39

    
      
         

      

      
         

        
          

        

      

      
         

      

    

     

     

    
      	
               
      

            	
               

            

    

    
      	
               
      

            	
              (g)                                
      Except as set forth in Section 5.18(g) of the BPOMS
      Disclosure Letter, to the extent that any work, invention, or material has
      been developed or created by a third party for BPOMS or any of the BPOMS
      Subsidiaries, to BPOMS’ knowledge, BPOMS or a BPOMS Subsidiary has a
      written agreement with such third party with respect thereto and BPOMS or
      a BPOMS Subsidiary has obtained ownership of, and is the exclusive owner
      of, or has a valid license to use, all BPOMS Intellectual Property in such
      work, material or invention by operation of law or by valid assignment or
      by agreement, as the case may be.

            

    

    
      	
               
      

            	
               

            

    

    
      	
               
      

            	
              (h)                                
      Section 5.18(h) of the BPOMS Disclosure Letter lists all
      material contracts, licenses and agreements to which BPOMS or any of the
      BPOMS Subsidiaries is a party that are currently in effect (i) with
      respect to BPOMS Intellectual Property licensed or offered to any third
      party (other than licenses granted in the ordinary course of business); or
      (ii) pursuant to which a third party has licensed or transferred any
      Intellectual Property to BPOMS or any of the BPOMS Subsidiaries (other
      than licenses granted in the ordinary course of business). Except as set
      forth in Section 5.18(h) of the BPOMS Disclosure Letter, neither
      BPOMS nor any of the BPOMS Subsidiaries has transferred ownership of, or
      granted any license with respect to, any BPOMS Intellectual Property, to
      any third party (other than licenses granted in the ordinary course of
      business).

            

    

    
      	
               
      

            	
               

            

    

    
      	
               
      

            	
              (i)                                    
      Except as set forth in Section 5.18(i) of the BPOMS
      Disclosure Letter, the contracts, licenses and agreements listed in
      Section 5.18(h) are in full force and effect to BPOMS’
      knowledge. The consummation of the transactions contemplated by this
      Agreement will not violate or result in the breach, modification,
      cancellation, termination, or suspension of such contracts, licenses and
      agreements listed in Section 5.18(h) and will not cause the
      forfeiture or termination or give rise to a right of forfeiture or
      termination of any rights of BPOMS to any BPOMS Intellectual Property or
      impair the right of BPOMS or any of the BPOMS Subsidiaries or the
      Surviving Corporation to Utilize any BPOMS Intellectual Property or
      portion thereof BPOMS and each of the BPOMS Subsidiaries is in material
      compliance with, and has not materially breached any term any of such
      contracts, licenses and agreements listed in
      Section 5.18(h) and, to the knowledge of BPOMS, all other
      parties to such contracts, licenses and agreements listed in
      Section 5.18(h) are in compliance with, and have not breached
      any term of, such contracts, licenses and agreements. Except as set forth
      in Section 5.18(i) of the BPOMS Disclosure Letter, following the
      Effective Time, the Surviving Corporation will be permitted to exercise
      all of BPOMS’ and each of the BPOMS Subsidiaries’, if any, rights under
      the contracts, licenses and agreements listed in
      Section 5.18(h) to the same extent BPOMS and such BPOMS
      Subsidiary would have been able to had the transactions contemplated by
      this Agreement not occurred and without the payment of any additional
      funds other than ongoing fees, royalties or payments which BPOMS or such
      BPOMS Subsidiary would otherwise be required to
  pay.

            

    

     

    40

    
      
         

      

      
         

        
          

        

      

      
         

      

    

     

    
      	
               
      

            	
              (j)                                    
      Except as set forth in Section 5.18(j) of the BPOMS
      Disclosure Letter, (i) BPOMS and each of the BPOMS Subsidiaries
      (including to the knowledge of each of their executive officers, directors
      and employees) has not received any notice or claim (whether written, oral
      or otherwise) challenging BPOMS’ ownership or rights in the BPOMS
      Intellectual Property or claiming that any other Person or entity has any
      legal or beneficial ownership with respect thereto; (ii) all the
      BPOMS Intellectual Property rights owned by BPOMS and embodied in BPOMS
      Products are, to BPOMS’ knowledge, legally valid and enforceable without
      any material qualification, limitation or restriction on their use, and
      BPOMS has not received any notice or claim (whether written or oral)
      challenging the validity or enforceability of any of the BPOMS
      Intellectual Property rights; and (iii) to BPOMS’ knowledge, no third
      party is infringing or misappropriating any part of the BPOMS Intellectual
      Property.

            

    

    
      	
               
      

            	
               

            

    

    
      	
               
      

            	
              (k)                                 
      BPOMS and each of the BPOMS Subsidiaries has taken reasonable and
      practicable measures designed to protect their respective rights in their
      respective confidential information and trade secrets or any trade secrets
      or confidential information of third parties provided to BPOMS or any of
      the BPOMS Subsidiaries. To the knowledge of BPOMS or any of the BPOMS
      Subsidiaries, neither BPOMS nor any BPOMS Subsidiary, has permitted any
      such confidential information or trade secrets to be used, divulged or
      appropriated for the benefit of Persons to the material detriment of BPOMS
      or any of the BPOMS Subsidiaries.

            

    

    
      	
               
      

            	
               

            

    

    
      	
               
      

            	
              (l)                                    
      Section 5.18(l) of the BPOMS Disclosure Letter sets forth
      a list of all Internet domain names used by BPOMS in its business
      (collectively, the “Domain
      Names”). BPOMS has, and after the Effective Time, to BPOMS’
      knowledge, the Surviving Corporation will have, a valid registration and
      all material rights (free of any material restriction) in and to the
      Domain Names, including, without limitation, all rights necessary to the
      continued use of the BPOMS Domain Names in connection with the conduct of
      BPOMS’ business as it is currently
conducted.

            

    

    
      	
               
      

            	
               

            

    

    
      	
               
      

            	
              (m)                              
      Neither BPOMS nor any of the BPOMS Subsidiaries is or has been a
      party to any Government Contract relating to or affecting ownership or
      Utilization of any BPOMS Intellectual Property. For purposes of this
      paragraph, the term “Government
      Contract” means any Government Prime Contract, Government
      Subcontract, Bid or Teaming Agreement. “Government
      Prime Contract” means any prime contract, basic ordering agreement,
      letter contract, purchase order, delivery order, change, arrangement or
      other commitment of any kind, on which final payment has not been made,
      between a party and either the U.S. Government or a State Government.
      “Government
      Subcontract” means any subcontract, basic ordering agreement,
      letter contract, purchase order, delivery order, change, arrangement, or
      other commitment of any kind, on which final payment has not been made,
      between a party and any prime contractor to either the U.S. Government or
      a State Government or any subcontractor with respect to a Government Prime
      Contract. “State
      Government” means any state, territory or possession of the United
      States or any department, agency or instrumentality thereof, or any department or agency of any of the above with
      statewide jurisdiction and responsibility, or any municipal or local
      government, department, agency or instrumentality. “Teaming
      Agreement” has same meaning as the term
      “contractor team arrangement(s)” as defined in the Federal
      Acquisition Regulation (FAR) Subpart 9.601. “Us.
      Government” means the United States Government or any department,
      agency or instrumentality thereof.

            

    

     

    41

    
      
         

      

      
         

        
          

        

      

      
         

      

    

     

     

    
      	
               
      

            	
               

            

    

    
      	
               
      

            	
              5.19                       
      Anti-Takeover Plan.

            

    

    
      	
               
      

            	
               

            

    

    BPOMS has
taken all action necessary to exempt the transactions contemplated by this
Agreement from the operation of any “fair price,” “moratorium,” “control share acquisition,”
or other similar anti-takeover statute or regulation enacted under the state or
federal laws of the United States.  Neither BPOMS nor any BPOMS Subsidiary
has in effect any plan, scheme, device or arrangement, commonly or colloquially
known as a “poison
pill” or, an “anti-takeover”
plan or any similar plan, scheme, device or arrangement.

     

    
      	
               
      

            	
              5.20                       
      Shareholder Vote Required.

            

    

    
      	
               
      

            	
               

            

    

    The only
votes of the holders of any class of shares of capital stock of BPOMS necessary
to approve this Agreement, the Merger and the other transactions contemplated by
this Agreement are: (i) the affirmative vote of holders of a majority of
the outstanding BPOMS Common Stock, BPOMS Series A Preferred Shares, BPOMS
Series B Preferred Shares and BPOMS Series C Preferred Shares (voting
together, as a single class), and (ii) the affirmative votes of holders of
a majority of each of the outstanding BPOMS Series A Preferred Shares,
BPOMS Series C Preferred Shares, BPOMS Series D Preferred Shares,
BPOMS Series D-2 Preferred Shares and BPOMS Series F Preferred
Shares.  BPOMS has, prior to the date of this Agreement, obtained the
required votes described in clause (ii) of this Section 5.20 and
timely complied with its obligations under Section 262 of the
DGCL.

     

    
      	
               
      

            	
              5.21                       
      Undisclosed Liabilities.

            

    

    
      	
               
      

            	
               

            

    

    Except as
and to the extent reflected, reserved against or otherwise disclosed in
Section 5.7(c) of the Disclosure Letter or the BPOMS SEC Documents or
as set forth in Section 5.21 of the BPOMS Disclosure Letter, neither BPOMS
nor any BPOMS Subsidiary has any liabilities or obligations of any kind, whether
accrued, absolute, asserted or unasserted, contingent or otherwise, of a nature
required to be disclosed on a balance sheet prepared in accordance with GAAP
consistently applied, which would have, individually or in the aggregate, a
BPOMS Material Adverse Effect.

     

    
      	
               
      

            	
              5.22                       
      Insurance.

            

    

    
      	
               
      

            	
               

            

    

    BPOMS
maintains, and has maintained or caused to be maintained, without interruption,
since December 15, 2006, policies or binders of insurance covering such
risk, and events, including personal injury, property damage, errors and
omissions and general liability in amounts BPOMS reasonably believes adequate
for its business and operations, and its current insurance policies (other than
directors’ and officers’ insurance) will not terminate due to the consummation
of the Merger. Section 5.22 of the BPOMS Disclosure Letter sets forth a
summary of all current insurance policies (including, without limitation,
limits, deductibles and terms) maintained by BPOMS and the BPOMS
Subsidiaries.

     

    42

    
      
         

      

      
         

        
          

        

      

      
         

      

    

     

     

     

    
      	
               
      

            	
              5.23                       
      Financial Forecast and Relationships with Suppliers, Licensors and
      Customers.

            

    

    
      	
               
      

            	
               

            

    

    BPOMS has
provided to HealthAxis a copy of its 2008 Forecast (the “BPOMS
Forecast”). The Forecast was prepared in good faith and BPOMS believes
there is a reasonable basis for the BPOMS Forecast. No current distributor,
customer of or supplier to BPOMS or any of the BPOMS Subsidiaries has notified
BPOMS or such BPOMS Subsidiary of an intention to terminate or substantially
alter its existing business relationship with BPOMS or such BPOMS Subsidiary,
nor has any licensor under a license agreement with BPOMS or any of the BPOMS
Subsidiaries notified BPOMS or such BPOMS Subsidiary of an intention to
terminate or substantially alter BPOMS’ or such BPOMS Subsidiary’s rights under
such license, which termination or alteration would cause BPOMS to fail to
achieve the projections set forth in the BPOMS Forecast or would otherwise have
a BPOMS Material Adverse Effect in 2008.

     

    ARTICLE
6

    REPRESENTATIONS
AND WARRANTIES OF HEALTHAXIS AND MERGER SUB

     

    HealthAxis
and Merger Sub hereby represent and warrant to BPOMS as follows, except as set
forth in (i) HealthAxis’ Annual Report on Form 10-K for the year
ending December 31, 2007 and any other HealthAxis SEC Documents (as defined
below) filed subsequent to December 31, 2007, and (ii) the written
disclosure letter delivered at or prior to the execution hereof to BPOMS (the
“HealthAxis
Disclosure Letter”). The HealthAxis Disclosure Letter shall be arranged
in sections or subsections corresponding to the number and lettered sections and
subsections contained in this Article 6. The disclosures in any section or
subsection of the HealthAxis Disclosure Letter shall qualify the correspondingly
numbered representation and warranty and such other representations and
warranties in this Article 6 to the extent it is reasonably clear from a
reading of the disclosure that such disclosure is applicable to such other
representations and warranties.

     

    
      	
               
      

            	
              6.1                              
      Organization; Good Standing; Authority; Compliance with
      Law.

            

    

    
      	
               
      

            	
               

            

    

    
      	
               
      

            	
              (a)                                 
      HealthAxis is a corporation duly organized, validly existing and in
      good standing under the laws of the State of Pennsylvania and Merger Sub
      is a corporation duly organized, validly existing and in good standing
      under the laws of the State of Delaware. Each of HealthAxis and Merger Sub
      has all requisite power and authority to own, lease and operate its
      properties and to carry on its business as now conducted. HealthAxis is
      duly licensed or qualified and is in good standing to transact business as
      a foreign corporation in each jurisdiction in which the character of the
      properties owned or leased by it therein or in which the nature of its
      business makes such qualification or licensing necessary, except where the
      failure to be so licensed or qualified would not have, individually or in
      the aggregate, a HealthAxis Material Adverse Effect. For purposes of this
      Agreement, a “HealthAxis
      Material Adverse Effect” means a material adverse effect on the
      business, assets (including intangible assets), financial condition or
      results of  operations
      of HealthAxis and the HealthAxis Subsidiaries (as defined in
      Section 6.4), taken as a
whole.

            

    

     

    43

    
      
         

      

      
         

        
          

        

      

      
         

      

    

     

    
      	
               
      

            	
               

            

    

    
      	
               
      

            	
              (b)                                
      Each of the Subsidiaries of HealthAxis (the “HealthAxis
      Subsidiaries”) is a corporation,
      partnership or limited liability company duly incorporated or formed,
      validly existing and in good standing under the laws of its jurisdiction
      of incorporation or formation, has the corporate, partnership or limited
      liability company power and authority to own its properties and to carry
      on its business as it is now being conducted, and is duly qualified to
      transact business and is in good standing in each jurisdiction in which
      the ownership of its property or the conduct of its business requires such
      qualification, except for jurisdictions in which such failure to be so
      qualified or to be in good standing would not have, individually or in the
      aggregate, a HealthAxis Material Adverse
Effect.

            

    

    
      	
               
      

            	
               

            

    

    
      	
               
      

            	
              (c)                                 
      The business of HealthAxis and the HealthAxis Subsidiaries is being
      operated in compliance with all laws, ordinances, regulations and orders
      of all governmental entities, except for violations which would not have,
      individually or in the aggregate, a HealthAxis Material Adverse Effect.
      HealthAxis and the HealthAxis Subsidiaries have all Government Approvals
      of all Governmental Agencies, required by law with respect to the
      operation of their businesses, except those the absence of which would
      not, individually or in the aggregate, have a HealthAxis Material Adverse
      Effect or prevent or delay consummation of the Merger. All such Government
      Approvals are in full force and effect, and HealthAxis and the HealthAxis
      Subsidiaries are in compliance with all conditions and requirements of the
      Government Approvals and with all rules and regulations relating
      thereto other than failures that would not have a HealthAxis Material
      Adverse Effect. HealthAxis has not received any notices of violations of
      any Federal, state and local laws, regulations and ordinances relating to
      its business, operations or assets which, if it were determined that a
      violation had occurred, would have a HealthAxis Material Adverse
      Effect.

            

    

    
      	
               
      

            	
               

            

    

    
      	
               
      

            	
              (d)                                
      The Amended and Restated Articles of Incorporation or other charter
      documents and Bylaws (and in each such case, all amendments thereto) of
      HealthAxis and each of the HealthAxis Subsidiaries are listed in
      Section 6.1(d) of the HealthAxis Disclosure Letter, and true and
      correct copies have previously been delivered or made available to BPOMS
      and its counsel.

            

    

    
      	
               
      

            	
               

            

    

    
      	
               
      

            	
              6.2                              
      Authorization, Validity and Effect of
  Agreements.

            

    

    
      	
               
      

            	
               

            

    

    HealthAxis
and Merger Sub each has the requisite corporate power and authority to execute
and deliver this Agreement and to consummate the transactions contemplated
hereby. The Board of Directors of each of HealthAxis and Merger Sub has taken
all necessary corporate action required to be taken by it to approve this
Agreement, the Merger, and the transactions contemplated by this Agreement. The
execution by HealthAxis and Merger Sub of this Agreement and the consummation of
the transactions contemplated by this Agreement have been duly authorized by all
requisite action on the part of HealthAxis and Merger Sub, subject to the
approvals described in Section 6.2 of the HealthAxis Disclosure Letter.
This Agreement constitutes the valid and legally binding obligation of
HealthAxis and Merger Sub, enforceable against HealthAxis and Merger Sub in
accordance with its terms, subject to applicable bankruptcy, insolvency,
moratorium or other similar laws relating to creditors’ rights and general
principles of equity.

     

    44

    
      
         

      

      
         

        
          

        

      

      
         

      

    

     

     

     

    
      	
               
      

            	
              6.3                              
      Capitalization.

            

    

    
      	
               
      

            	
               

            

    

    
      	
               
      

            	
              (a)                                 
      The authorized capital stock of HealthAxis as of the date hereof
      and prior to the HealthAxis Pre-Merger Steps consists of 1,900,000,000
      shares of HealthAxis Common Stock, $0.10 par value per share, and
      100,000,000 shares of preferred stock, $1.00 par value per share, of which
      3,850,000 shares are designated as Series A Convertible Preferred
      Shares (the “HealthAxis
      Series A Preferred Shares”). As of the date hereof, there are
      8,816,088 shares of HealthAxis Common Stock issued and outstanding and
      740,401 HealthAxis Series A Preferred Shares issued and outstanding.
      All such outstanding shares of HealthAxis are duly authorized, validly
      issued, fully paid, nonassessable and free of preemptive rights or rights
      of first refusal created by statute, the Certificate of Incorporation or
      Bylaws of HealthAxis or any agreement to which HealthAxis is a party or by
      which it is bound, and free of any liens or encumbrances other than any
      liens or encumbrances created by or imposed upon the holders thereof or
      under applicable federal or state securities or “blue
      sky” laws. The authorized capital stock of Merger Sub consists of
      100 shares of common stock, par value $0.01 per share. As of the date
      hereof, 100 shares of common stock of Merger Sub are issued and
      outstanding, fully paid and non-assessable and owned by HealthAxis. Except
      as set forth in Section 6.3 of the HealthAxis Disclosure Letter
      HealthAxis has no outstanding bonds, debentures, notes or other
      obligations the holders of which have or upon the happening of certain
      events would have the right to vote (or which are convertible into or
      exercisable for securities having the right to vote) with the stockholders
      of HealthAxis on any matter. Except as set forth in Section 6.3 of
      the HealthAxis Disclosure Letter or as shall be terminated as part of the
      HealthAxis Pre-Merger Steps, there are no existing options, warrants,
      calls, subscriptions, convertible securities, or other rights, agreements,
      stock appreciation rights or similar derivative securities or instruments
      or commitments which obligate HealthAxis to issue, transfer or sell any
      Shares of HealthAxis of any class or make any payments in lieu
      thereof.  Except as set forth in Section 6.3 of the HealthAxis
      Disclosure Letter, there are no agreements or understandings to which
      HealthAxis or any HealthAxis Subsidiary is a party with respect to the
      voting of any HealthAxis Shares or which restrict the transfer of any such
      shares (other than such restrictions as shall terminate as part of the
      HealthAxis Pre-Merger Steps), nor does HealthAxis have knowledge of any
      such agreements or understandings with respect to the voting of any such
      shares or which restrict the transfer of any such shares. Except as
      disclosed in Section 6.3 of the HealthAxis Disclosure Letter and
      except for such obligations as shall be terminated as part of the
      HealthAxis Pre-Merger Steps, there are no outstanding contractual
      obligations of HealthAxis or any HealthAxis Subsidiary
      to register under the securities laws of any jurisdiction or to
      repurchase, redeem or otherwise acquire any HealthAxis Shares or any other
      securities of HealthAxis or any HealthAxis Subsidiary. Section 6.3 of
      the HealthAxis Disclosure Letter contains a complete and correct list
      setting forth as of the date hereof (i) the number of options and
      warrants outstanding, (ii) the dates on which such options or
      warrants were granted, (iii) the dates on which such options or
      warrants shall expire and (iv) the exercise or conversion price of
      each outstanding option or warrant, as the case may be. Materially true
      and complete copies of all agreements and instruments relating to the
      securities described above and in Section 6.3 of the HealthAxis
      Disclosure Letter, or forms thereof, have been provided to BPOMS and such
      agreements and instruments have not been amended, modified or
      supplemented, and there are no agreements to amend, modify or supplement
      such agreements or instruments in any case from the form provided to
      BPOMS.  All outstanding securities of HealthAxis and each HealthAxis
      Subsidiary have been issued and granted in compliance in all material
      respects with (i) all applicable securities laws; and (ii) all
      requirements set forth in all applicable contracts.  The shares of
      HealthAxis Common Stock issued under options or warrants were issued in
      transactions which were registered under the Securities Act or which
      qualified for exemptions under either Section 4(2) of, or
      Rule 701 under, the Securities Act for stock issuances under
      compensatory benefit plans.

            

    

     

    45

    
      
         

      

      
         

        
          

        

      

      
         

      

    

     

     

    
      	
               
      

            	
               

            

    

    
      	
               
      

            	
              (b)                                
      The shares of HealthAxis Common Stock and HealthAxis Series B
      Preferred Stock to be issued pursuant to the Merger, at the Effective
      Time, will be duly authorized, validly issued, fully paid and unassessable
      and free of preemptive rights of any
nature.

            

    

    
      	
               
      

            	
               

            

    

    
      	
               
      

            	
              (c)                                 
      Set forth below is a summary of all securities of any type of
      HealthAxis (including all shares, options, warrants, calls, subscriptions,
      convertible securities or other rights, agreements, stock appreciation
      rights, or derivative securities or instruments or commitments which
      obligate HealthAxis to issue, transfer or sell any securities) that are
      outstanding as of the date hereof, which are separately categorized to
      indicate the number of such securities outstanding and the number of
      shares of HealthAxis Common Stock (or any other indicated class of
      securities) into which they are convertible or
  exercisable:

            

    

     

    
      	
              Security

            	 
      	
              Number

              Outstanding

            	 
      	
              Shares Into Which

              Convertible/Exercisable

            	 
      
	 
      	 
      	 
      	 
      	 
      	 
      
	
              HealthAxis
      Common Stock

            	 
      	
              8,816,088

            	
              (1)

            	
              —

            	 
      
	 
      	 
      	 
      	 
      	 
      	 
      
	
              HealthAxis
      Series A Preferred Shares

            	 
      	
              740,401

            	 
      	
              740,401

            	 
      
	 
      	 
      	 
      	 
      	 
      	 
      
	
              HealthAxis
      Options

            	 
      	
              878,725

            	 
      	
              878,725

            	 
      
	 
      	 
      	 
      	 
      	 
      	 
      
	
              Healthaxis
      Warrants

            	 
      	
              200,632

            	 
      	
              200,632

            	 
      

    

     

    

    (1) 
Includes 380,125 shares of restricted stock.

     

    46

    
      
         

      

      
         

        
          

        

      

      
         

      

    

     

    
      	
               
      

            	
              6.4                              
      Subsidiaries

            

    

    
      	
               
      

            	
               

            

    

    Section 6.4
of the HealthAxis Disclosure Letter lists all Subsidiaries of HealthAxis (the
“HealthAxis
Subsidiaries” and, individually, a “HealthAxis
Subsidiary”). HealthAxis owns directly or indirectly all of the
outstanding shares of capital stock or other equity interests of each of the
HealthAxis Subsidiaries. All of the outstanding shares of capital stock in each
of the HealthAxis Subsidiaries are duly authorized, validly issued, fully paid
and nonassessable. Except as set forth in Section 6.4 of the HealthAxis
Disclosure Letter, all of the outstanding shares of capital stock of each of the
HealthAxis Subsidiaries owned, directly or indirectly, by HealthAxis are owned
free and clear of all liens, pledges, security interests, claims or other
encumbrances. Except as set forth in Section 6.4 of the HealthAxis
Disclosure Letter, there are no options, warrants, calls, subscriptions,
convertible securities, or other rights, agreements or commitments which
obligate HealthAxis or any HealthAxis Subsidiary to issue, transfer or sell any
shares of capital stock of any HealthAxis Subsidiary. The following information
for each HealthAxis Subsidiary is set forth in Section 6.4 of the
HealthAxis Disclosure Letter: (i) its name and jurisdiction of
incorporation, (ii) its authorized capital stock and (iii) its
outstanding capital stock.

     

    
      	
               
      

            	
              6.5                              
      Other Interests.

            

    

    
      	
               
      

            	
               

            

    

    Except
for interests in the HealthAxis Subsidiaries, neither HealthAxis nor any
HealthAxis Subsidiary owns directly or indirectly any interest or investment
(whether equity or debt) in any corporation, partnership, joint venture,
business, trust or other entity (other than investments in short term investment
securities).

     

    
      	
               
      

            	
              6.6                              
      No Violation.

            

    

    
      	
               
      

            	
               

            

    

    Except as
set forth in Section 6.6 of the HealthAxis Disclosure Letter, neither the
execution and delivery by HealthAxis and Merger Sub of this Agreement nor the
consummation by HealthAxis and Merger Sub of the transactions contemplated by
this Agreement in accordance with its terms will: (i) conflict with or
result in a breach of any provisions of HealthAxis’ or Merger Sub’s respective
charter or by-laws; (ii) violate, result in a breach of any provision of,
or constitute a default under, or require any approval or consent under or
result in the termination or in a right of termination or cancellation of, or
accelerate the performance required by or result in a material adverse change
to, or result in the creation of any lien, security interest, charge or
encumbrance upon any of HealthAxis’ or Merger Sub’s properties under, any of the
terms, conditions or provisions of any note, bond, mortgage, indenture, deed of
trust or any license, franchise, permit, lease, contract, agreement or other
instrument to which HealthAxis or Merger Sub is a party, or by which HealthAxis
or Merger Sub or any of their properties is bound or affected, except for any of
the foregoing matters in this clause which, individually or in the aggregate,
would not have a HealthAxis Material Adverse Effect; (iii) contravene or
conflict with or constitute a violation of any provision of any law, rule,
regulation, judgment, injunction, order or decree binding upon or applicable to
HealthAxis or Merger Sub; or (iv) other than the filings provided for in
this Agreement and the Regulatory Filings, require any consent, approval or
authorization of, or declaration, filing or registration with, any governmental
or regulatory authority which has not been obtained or made, except where the
failure to obtain any such consent, approval or authorization of, or
declaration, filing or registration with, any governmental or regulatory
authority would not have a HealthAxis Material Adverse Effect and could not
reasonably be expected to prevent, materially alter or materially delay any of
the transactions contemplated by this Agreement.

     

    47

    
      
         

      

      
         

        
          

        

      

      
         

      

    

     

     

     

    
      	
               
      

            	
              6.7                              
      SEC Filings; Financial
Statements.

            

    

    
      	
               
      

            	
               

            

    

    
      	
               
      

            	
              (a)                                 
      In this Agreement, all registration statements, proxy statements,
      Certifications (as defined below) and other statements, reports,
      schedules, forms and other documents filed by HealthAxis with the SEC on
      or after December 31, 2006 are called the “HealthAxis
      SEC Documents”.  HealthAxis has delivered to BPOMS accurate
      and complete copies of all HealthAxis SEC Documents, other than any
      HealthAxis SEC Documents which can be obtained on the SEC’s website at
      www.sec.gov. Except as set forth on Section 6.7(a) of the
      HealthAxis Disclosure Letter or as would not have a HealthAxis Material
      Adverse Effect, all statements, reports, schedules, forms and other
      documents required to have been filed by HealthAxis with the SEC within
      the twelve-month period preceding the date of this Agreement have been
      filed on a timely basis. None of the HealthAxis Subsidiaries is required
      to file any documents with the SEC under the Exchange Act. As of the time
      it was filed with the SEC (or, if amended or superseded by a filing prior
      to the date of this Agreement, then on the date of such filing):
      (i) each of the HealthAxis SEC Documents complied in all material
      respects with the applicable requirements of the Securities Act or the
      Exchange Act (as the case may be); and (ii) none of the HealthAxis
      SEC Documents contained any untrue statement of a material fact or omitted
      to state a material fact required to be stated therein or necessary in
      order to make the statements therein, in the light of the circumstances
      under which they were made, not misleading. The certifications and
      statements required by (A) Rule 13a-14 under the Exchange Act
      and (B) 18 U.S.C. §1350 (Section 906 of the Sarbanes-Oxley Act)
      relating to the HealthAxis SEC Documents (collectively, the “Certifications”)
      are accurate and complete and comply as to form and content with all
      applicable laws or rules of applicable governmental and regulatory
      authorities.

            

    

    
      	
               
      

            	
               

            

    

    
      	
               
      

            	
              (b)                                
      Except as described in the HealthAxis SEC Documents,
      (i) HealthAxis maintains disclosure controls and procedures that
      satisfy the requirements of Rule 13a-15 under the Exchange Act, and
      (ii) such disclosure controls and procedures are designed to ensure
      that all material information concerning HealthAxis is made known on a
      timely basis to the individuals responsible for the preparation of
      HealthAxis’ filings with the SEC and other public disclosure documents.
      Except as set forth in Section 6.7(b) of the HealthAxis
      Disclosure Letter, HealthAxis is in compliance with the applicable listing
      and other rules and regulations of the Nasdaq Capital Market and has
      not received any notice from the Nasdaq Capital Market asserting any
      present non-compliance with such rules and
    regulations.

            

    

    
      	
               
      

            	
               

            

    

    
      	
               
      

            	
              (c)                                 
      The financial statements (including any related notes) contained or
      incorporated by reference in the HealthAxis SEC Documents:
      (i) complied as to form in all material respects with the published
      rules and regulations of the SEC applicable thereto; (ii) were
      prepared in accordance with GAAP (except as may be indicated in the notes to such financial statements or, in the case of
      unaudited financial statements, as permitted by Form 10-Q of the SEC,
      and except that the unaudited financial statements may not contain
      footnotes and are subject to normal and recurring year-end adjustments
      that are not reasonably expected to be material in amount) applied on a
      consistent basis unless otherwise noted therein throughout the periods
      indicated; and (iii) fairly present the consolidated financial
      position of HealthAxis and the HealthAxis Subsidiaries as of the
      respective dates thereof and the consolidated results of operations and
      cash flows of HealthAxis and the HealthAxis Subsidiaries for the periods
      covered thereby.

            

    

     

    48

    
      
         

      

      
         

        
          

        

      

      
         

      

    

     

     

    
      	
               
      

            	
               

            

    

    
      	
               
      

            	
              (d)                                
      HealthAxis’ auditor has at all required times since the date of
      enactment of the Sarbanes-Oxley Act been: (i) to the knowledge of
      HealthAxis, a registered public accounting firm (as defined in
      Section 2(a)(12) of the Sarbanes-Oxley Act); (ii) “independent”
      with respect to HealthAxis and the HealthAxis Subsidiaries within the
      meaning of Regulation S-X under the Exchange Act; and (iii) to the
      knowledge of HealthAxis, in compliance with subsections (g) through
      (l) of Section 10A of the Exchange Act and the rules and
      regulations promulgated by the SEC and the Public Company Accounting
      Oversight Board thereunder. Section 6.7(d) of the HealthAxis
      Disclosure Letter contains an accurate and complete description of all
      non-audit services performed by HealthAxis’ principal auditors for
      HealthAxis and the HealthAxis Subsidiaries from January 1, 2006 to
      March 31, 2008 and the fees paid for such services. All such
      non-audit services were approved as required by Section 202 of the
      Sarbanes-Oxley Act.

            

    

    
      	
               
      

            	
               

            

    

    
      	
               
      

            	
              (e)                                 
      Section 6.7(e) of the HealthAxis Disclosure Letter lists,
      and HealthAxis has delivered to BPOMS accurate and complete copies of the
      documentation creating or governing, all securitization transactions and
      “off-balance
      sheet arrangements” (as defined in Item 303(c) of Regulation
      S-K under the Exchange Act) effected by HealthAxis since December 31,
      2006.

            

    

    
      	
               
      

            	
               

            

    

    
      	
               
      

            	
              6.8                              
      Litigation.

            

    

    
      	
               
      

            	
               

            

    

    Except as
set forth in Section 6.8 of the HealthAxis Disclosure Letter, there are
(i) no continuing orders, injunctions or decrees of any court, arbitrator
or governmental authority to which HealthAxis or any HealthAxis Subsidiary is a
party or by which any of its properties or assets are bound or likely to be
affected and (ii) no actions, suits or proceedings pending against
HealthAxis or any HealthAxis Subsidiary as to which any of their respective
properties or assets are subject or, to the knowledge of HealthAxis threatened
against HealthAxis or any HealthAxis Subsidiary or to which any of their
respective properties or assets are subject, at law or in equity, that in each
such case could, individually or in the aggregate, have an HealthAxis Material
Adverse Effect.

     

    
      	
               
      

            	
              6.9                              
      Absence of Certain Changes.

            

    

    
      	
               
      

            	
               

            

    

    Except as
set forth in Section 6.9 of the HealthAxis Disclosure Letter or the
HealthAxis SEC Documents or as contemplated by Section 8.1(d) of this
Agreement, since December 31, 2007,
HealthAxis and the HealthAxis Subsidiaries have conducted their business only in
the ordinary course of such business and consistent with past practices and
there has not been any:

     

    49

    
      
         

      

      
         

        
          

        

      

      
         

      

    

     

     

    
      	
               
      

            	
              (a)                                 
      HealthAxis Material Adverse
Effect;

            

    

    
      	
               
      

            	
               

            

    

    
      	
               
      

            	
              (b)                                
      amendment or change in the charter or By-Laws of HealthAxis or any
      of the HealthAxis Subsidiaries, other than as contemplated in this
      Agreement;

            

    

    
      	
               
      

            	
               

            

    

    
      	
               
      

            	
              (c)                                 
      incurrence, creation or assumption by HealthAxis or any of the
      HealthAxis Subsidiaries of (i) any mortgage, deed of trust, security
      interest, pledge, lien, title retention device, collateral assignment,
      claim, charge, restriction or other encumbrance of any kind on any of the
      assets or properties of HealthAxis or any of the HealthAxis Subsidiaries;
      or (ii) any obligation or liability of any indebtedness for borrowed
      money, other than pursuant to the SVB Loan Agreement (as defined below) or
      any amendment, extension or renewal thereof or any related
      documents;

            

    

    
      	
               
      

            	
               

            

    

    
      	
               
      

            	
              (d)                                
      issuance or sale of any debt or equity securities of HealthAxis or
      any of its Subsidiaries, or the issuance or grant of any options, warrants
      or other rights to acquire from HealthAxis or any HealthAxis Subsidiaries,
      directly or indirectly, any debt or equity securities of HealthAxis or any
      of its Subsidiaries, other than (i) the shares to be issued and stock
      options to be granted as contemplated by this Agreement, and
      (ii) upon the exercise of any options and warrants outstanding as of
      the date of this Agreement;

            

    

    
      	
               
      

            	
               

            

    

    
      	
               
      

            	
              (e)                                 
      payment or discharge by HealthAxis or any of the HealthAxis
      Subsidiaries of any security interest, lien, claim, or encumbrance of any
      kind on any asset or property of HealthAxis or any of the HealthAxis
      Subsidiaries, or the payment or discharge of any liability that was not
      either shown or reflected in the HealthAxis SEC Documents or incurred in
      the ordinary course of HealthAxis’ business after December 31, 2007
      and was in an amount in excess of $150,000 for any single liability to a
      particular creditor;

            

    

    
      	
               
      

            	
               

            

    

    
      	
               
      

            	
              (f)                                   
      purchase, license, sale, assignment or other disposition or
      transfer, or any agreement or other arrangement for the purchase, license,
      sale, assignment or other disposition or transfer, of any of the assets,
      properties or goodwill of HealthAxis other than a license or sale of any
      product or products of HealthAxis or any of the HealthAxis Subsidiaries
      made in the ordinary course of HealthAxis’
  business;

            

    

    
      	
               
      

            	
               

            

    

    
      	
               
      

            	
              (g)                                
      damage, destruction or loss of any property or asset, whether or
      not covered by insurance, having (or likely with the passage of time to
      have) a HealthAxis Material Adverse
Effect;

            

    

    
      	
               
      

            	
               

            

    

    
      	
               
      

            	
              (h)                                
      declaration, setting aside or payment of any dividend on, or the
      making of any other distribution in respect of, the capital stock of
      HealthAxis, any split, combination or recapitalization of the capital
      stock of HealthAxis or any direct or indirect redemption, purchase or
      other acquisition of the capital stock of HealthAxis
      or any change in any rights, preferences, privileges or restrictions of
      any outstanding security of HealthAxis, other than the Reverse Split and
      the other steps contemplated by the HealthAxis Pre-Merger Steps and other
      than the nominal dividend relating to the HealthAxis Series A
      Preferred Stock and any stock repurchased (on a set-off basis without any
      cash outlay by HealthAxis other than to the IRS) in connection with the
      payment of withholding taxes associated with equity compensation
      incentives;

            

    

     

    50

    
      
         

      

      
         

        
          

        

      

      
         

      

    

     

     

    
      	
               
      

            	
               

            

    

    
      	
               
      

            	
              (i)                                    
      increase in the compensation payable or to become payable to any of
      the officers, directors or employees of HealthAxis or any of the
      HealthAxis Subsidiaries, or any bonus or pension, insurance or other
      benefit payment or arrangement (including without limitation stock awards,
      stock option grants, stock appreciation rights or stock option grants)
      made to or with any of such officers, directors or employees, other than
      increases in base salary for employees (excluding senior management
      employees) in the ordinary course of business and consistent with past
      practice;

            

    

    
      	
               
      

            	
               

            

    

    
      	
               
      

            	
              (j)                                    
      obligation or liability incurred by HealthAxis or any of the
      HealthAxis Subsidiaries to any of its officers, directors or stockholders
      except for normal and customary compensation and expense allowances
      payable to officers in the ordinary course of HealthAxis’ business
      consistent with past practice and except in connection with the HealthAxis
      Pre-Merger Steps;

            

    

    
      	
               
      

            	
               

            

    

    
      	
               
      

            	
              (k)                                 
      making by HealthAxis or any of the HealthAxis Subsidiaries of any
      loan, advance or capital contribution to, or any investment in, any
      officer, director, employee or stockholder of HealthAxis or any HealthAxis
      Subsidiary or any firm or business enterprise in which any such Person had
      a direct or indirect material interest at the time of such loan, advance,
      capital contribution or investment;

            

    

    
      	
               
      

            	
               

            

    

    
      	
               
      

            	
              (l)                                    
      entering into, amendment of, relinquishment, termination or
      non-renewal by HealthAxis or any HealthAxis Subsidiary of any contract,
      lease, transaction, commitment or other right or obligation other than in
      the ordinary course of its business or any written or oral indication or
      assertion by the other party thereto of any material problems with
      HealthAxis’ or any HealthAxis Subsidiary’s services or performance under
      such contract, lease, transaction, commitment or other right or obligation
      having a HealthAxis Material Adverse Effect, or of such other party’s
      demand to amend, terminate or not renew any such contract, lease,
      transaction, commitment or other right or obligation which would be likely
      to have a HealthAxis Material Adverse
Effect;

            

    

    
      	
               
      

            	
               

            

    

    
      	
               
      

            	
              (m)                              
      material change in the manner in which HealthAxis or any HealthAxis
      Subsidiary extends discounts, credits or warranties to customers or
      otherwise deals with its customers;

            

    

    
      	
               
      

            	
               

            

    

    
      	
               
      

            	
              (n)                                
      entering into by HealthAxis or any of the HealthAxis Subsidiaries
      of any transaction, contract or agreement that by its terms requires or
      contemplates a required minimum current and/or future financial
      commitment, expenses (inclusive of overhead expenses)
      or obligation on the part of HealthAxis or any of the HealthAxis
      Subsidiaries involving in excess of $150,000, excluding any amendment,
      extension or renewal of the SVB Loan Agreement (or related documents) or
      any legal and accounting fees or other fees or obligations associated with
      this Agreement and the transactions contemplated hereby (including fees
      described in Section 6.14) or that is not entered into in the
      ordinary course of HealthAxis’ business, or the conduct of any business or
      operations by HealthAxis or any HealthAxis Subsidiary that is other than
      in the ordinary course of HealthAxis’ or such HealthAxis Subsidiary’s
      business; or

            

    

     

    51

    
      
         

      

      
         

        
          

        

      

      
         

      

    

     

     

    
      	
               
      

            	
               

            

    

    
      	
               
      

            	
              (o)                                
      license, transfer or grant of a right under any HealthAxis
      Intellectual Property (as defined in Section 6.18 below), other than
      those licensed, transferred or granted in the ordinary course of business
      consistent with its past practices.

            

    

    
      	
               
      

            	
               

            

    

    
      	
               
      

            	
              6.10                       
      Taxes.

            

    

    
      	
               
      

            	
               

            

    

    Except as
set forth in Section 6.10 of the HealthAxis Disclosure Letter or where such
failure would not have, individually or in the aggregate, a HealthAxis Material
Adverse Effect:

     

    
      	
               
      

            	
              (a)                                 
      HealthAxis and each of the HealthAxis Subsidiaries has paid or
      caused to be paid all federal, state, local, foreign, and other taxes, and
      all deficiencies, or other additions to tax, interest, fines and penalties
      (collectively, “Taxes”),
      owed or accrued by it and due and payable through the date hereof
      (including any Taxes payable pursuant to Treasury Regulation § 1.1502-6
      (and any similar state, local or foreign
  provision).

            

    

    
      	
               
      

            	
               

            

    

    
      	
               
      

            	
              (b)                                
      HealthAxis and each of the HealthAxis Subsidiaries has timely filed
      all federal, state, local and foreign tax returns (collectively “Tax
      Returns”) required to be filed by any of them through the date
      hereof, and all such returns accurately set forth the amount of any Taxes
      relating to the applicable period.

            

    

    
      	
               
      

            	
               

            

    

    
      	
               
      

            	
              (c)                                 
      HealthAxis and each of the HealthAxis Subsidiaries has withheld and
      paid all Taxes required to have been withheld and paid in connection with
      amounts paid or owing to any employee, independent contractor, creditor,
      shareholder or other party.

            

    

    
      	
               
      

            	
               

            

    

    
      	
               
      

            	
              (d)                                
      The financial statements included in the HealthAxis SEC Documents
      reflect adequate reserves for Taxes payable by HealthAxis and each
      HealthAxis Subsidiary for all taxable periods and portions thereof through
      the date of such financial
statements.

            

    

    
      	
               
      

            	
               

            

    

    
      	
               
      

            	
              (e)                                 
      Since December 31, 2007, each of HealthAxis and the HealthAxis
      Subsidiaries has made sufficient accrual for Taxes in accordance with GAAP
      with respect to periods for which Tax Returns have not been filed. 
      All liabilities for Taxes attributable to the period commencing on the day
      following the filing date of the most recently filed HealthAxis SEC
      Documents were incurred in the ordinary course of
  business.

            

    

     

    52

    
      
         

      

      
         

        
          

        

      

      
         

      

    

     

    
      	
               
      

            	
              (f)                                   
      There are no outstanding agreements, waivers or arrangements
      extending the statutory period of limitations applicable to any claim for,
      or the period for the collection or assessment of, Taxes due from
      HealthAxis or any HealthAxis Subsidiary for any taxable period and there
      have been no deficiencies proposed, assessed or asserted for such
      Taxes.

            

    

    
      	
               
      

            	
               

            

    

    
      	
               
      

            	
              (g)                                
      There are no closing agreements that could affect Taxes of
      HealthAxis or any HealthAxis Subsidiary for periods after the Effective
      Time pursuant to Section 7121 of the Code or any similar provision
      under state, local or foreign tax
laws.

            

    

    
      	
               
      

            	
               

            

    

    
      	
               
      

            	
              (h)                                
      No audit or other proceedings by any court, governmental or
      regulatory authority or similar authority relating to Taxes has occurred,
      been asserted or is pending and none of HealthAxis or any HealthAxis
      Subsidiary has received notice that any such audit or proceeding may be
      commenced.

            

    

    
      	
               
      

            	
               

            

    

    
      	
               
      

            	
              (i)                                    
      No election has been made or filed by or with respect to, and no
      consent to the application of, Section 341(f)(2) of the Code has
      been made by or with respect to, HealthAxis, any HealthAxis Subsidiary or
      any of their properties or assets.

            

    

    
      	
               
      

            	
               

            

    

    
      	
               
      

            	
              (j)                                    
      None of HealthAxis or any HealthAxis Subsidiary has agreed to, or
      filed application for, or is required, to make any changes or adjustment
      to its accounting method.

            

    

    
      	
               
      

            	
               

            

    

    
      	
               
      

            	
              (k)                                 
      Except as set forth in Section 5.10(k) of the HealthAxis
      Disclosure Letter, there is no contract, agreement, plan or arrangement
      covering any Person that, individually or collectively, could give rise to
      the payment of any amount that would not be deductible by HealthAxis or
      any HealthAxis Subsidiary by reason of Section 280G or
      Section 162(m) of the
Code.

            

    

    
      	
               
      

            	
               

            

    

    
      	
               
      

            	
              (l)                                    
      Neither HealthAxis nor any HealthAxis Subsidiary has (i) been
      a member of an affiliated group (within the meaning of Section 1504
      of the Code) or an affiliated, combined, consolidated, unitary, or similar
      group for state, local or foreign Tax purposes, other than the group of
      which HealthAxis is the common parent or (ii) any liability for or in
      respect of the Taxes of, or determined by reference to the Tax liability
      of, another Person (other than HealthAxis or any HealthAxis Subsidiary)
      under Treasury Regulation § 1.1502-6 (or any similar provision of
      state, local or foreign law), as a transferee or successor, by contract or
      otherwise.

            

    

    
      	
               
      

            	
               

            

    

    
      	
               
      

            	
              (m)                              
      Neither HealthAxis nor any HealthAxis Subsidiary has constituted
      either a “distributing corporation” or a “controlled corporation” in a
      distribution of stock qualifying for tax-free treatment under
      Section 355 of the Code (x) in the two (2) years prior to
      the date of this Agreement or (y) in a distribution which could
      otherwise constitute part of a “plan” or “series of related transactions”
      (within the meaning of Section 355(e) of the Code) in
      conjunction with the Merger.

            

    

    
      	
               
      

            	
               

            

    

    
      	
               
      

            	
              (n)                                
      Neither HealthAxis nor any HealthAxis Subsidiary is a party to any
      agreement providing for the allocation, indemnification, or sharing of
      Taxes other than any such agreement to which
      HealthAxis or any HealthAxis Subsidiary are the exclusive
      parties.

            

    

     

    53

    
      
         

      

      
         

        
          

        

      

      
         

      

    

     

     

    
      	
               
      

            	
               

            

    

    HealthAxis
has not taken any action or engaged in any activities that would preclude the
treatment of the Merger as a reorganization under Section 368(a) of
the Code.  In addition, HealthAxis has no plan or intention to take any
action or engage in any activities that would preclude the treatment of the
Merger as a reorganization of under Section 368(a) of the
Code.

     

    
      	
               
      

            	
              6.11                       
      Books and Records.

            

    

    
      	
               
      

            	
               

            

    

    
      	
               
      

            	
              (a)                                 
      The books of account and other financial records of HealthAxis and
      each of the HealthAxis Subsidiaries are true, complete and correct in all
      material respects, and have been maintained in accordance with good
      business practices since December 31,
2006.

            

    

    
      	
               
      

            	
               

            

    

    
      	
               
      

            	
              (b)                                
      The minute books and other records of HealthAxis and each of the
      HealthAxis Subsidiaries contain accurate records of all meetings and
      accurately reflect all other action of the stockholders and Board of
      Directors and any committees of the Board of Directors of HealthAxis and
      each of the HealthAxis Subsidiaries since December 31,
      2006.

            

    

    
      	
               
      

            	
               

            

    

    
      	
               
      

            	
              6.12                       
      Properties.

            

    

    
      	
               
      

            	
               

            

    

    
      	
               
      

            	
              (a)                                 
      Section 6.12(a) of the HealthAxis Disclosure Letter sets
      forth a list of all real property currently owned or leased by HealthAxis
      or any of the HealthAxis Subsidiaries, and, with respect to all real
      property currently leased by HealthAxis or any of the HealthAxis
      Subsidiaries, the location of the property, the unexpired term of the
      lease and the aggregate annual rental and/or other fees payable under any
      such lease. All such current leases are, to the knowledge of HealthAxis,
      in full force and effect, are valid and effective in accordance with their
      respective terms, and there is not to the knowledge of HealthAxis any
      existing material default or event of default under any such lease (or
      event which with notice or lapse of time, or both, would constitute such a
      material default).

            

    

    
      	
               
      

            	
               

            

    

    
      	
               
      

            	
              (b)                                
      HealthAxis and each of the HealthAxis Subsidiaries has good and
      valid title to, or, in the case of leased properties and assets, valid
      leasehold interests in, all of its tangible properties and assets, real,
      personal and mixed, used or held for use in its business, free and clear
      of any liens, except as reflected in the HealthAxis SEC Documents or in
      Section 6.12(b) of the HealthAxis Disclosure Letter and except
      for liens for taxes not yet due and payable and such imperfections of
      title and encumbrances, if any, which are not material in character,
      amount or extent, and which do not materially detract from the value, or
      materially interfere with the present use, of the property subject thereto
      or affected thereby.

            

    

    
      	
               
      

            	
               

            

    

    
      	
               
      

            	
              6.13                       
      Environmental Matters.

            

    

    
      	
               
      

            	
               

            

    

    Except as
set forth in Section 6.13 of the HealthAxis Disclosure Letter, neither
HealthAxis nor any of the HealthAxis Subsidiaries is in violation of any
Environmental Laws which violation could reasonably be expected to result
in a HealthAxis Material Adverse Effect. Except as set forth in
Section 6.13 of the HealthAxis Disclosure Letter, neither HealthAxis, any
of the HealthAxis Subsidiaries, nor, to the knowledge of HealthAxis, any third
party, has used, released, discharged, generated, manufactured, produced,
stored, or disposed of in, on, or under or about its owned or leased property or
other assets, or transported thereto or therefrom, any hazardous substances or
hazardous wastes, including asbestos, lead and petroleum, during the period of
HealthAxis’ or the HealthAxis Subsidiary’s ownership or lease of such property
in a manner that could reasonably be expected to subject HealthAxis or any
HealthAxis Subsidiary to a material liability under the Environmental Laws. None
of HealthAxis or any of the HealthAxis Subsidiaries has received written notice
from any governmental authority that any property owned or leased by HealthAxis
or any of the HealthAxis Subsidiaries is in violation of any Environmental Laws.
There is no pending civil, criminal or administrative suit or other legal
proceeding against HealthAxis or any of the HealthAxis Subsidiaries with respect
to any Environmental Laws. HealthAxis has provided BPOMS complete copies of all
environmental reports, assessments and studies in HealthAxis’ possession and
control with respect to properties owned or leased by HealthAxis or any
HealthAxis Subsidiary.

     

    54

    
      
         

      

      
         

        
          

        

      

      
         

      

    

     

    
      	
               
      

            	
              6.14                       
      No Brokers.

            

    

    
      	
               
      

            	
               

            

    

    Except as
set forth in Section 6.14 of the HealthAxis Disclosure Letter, neither
HealthAxis nor Merger Sub nor any of the HealthAxis Subsidiaries has entered
into any contract, arrangement or understanding with any Person or firm which
may result in the obligation of such entity or BPOMS to pay any finder’s fees,
brokerage or agent’s commissions or other like payments in connection with the
negotiations leading to this Agreement or the consummation of the transactions
contemplated hereby. Except as set forth in the HealthAxis Disclosure Letter,
neither HealthAxis nor Merger Sub is aware of any claim for payment directly by
HealthAxis or Merger Sub of any finder’s fees, brokerage or agent’s commissions
or other like payments in connection with the negotiations leading to this
Agreement or the consummation of the transactions contemplated
hereby.

     

    
      	
               
      

            	
              6.15                       
      Related Party Transactions.

            

    

    
      	
               
      

            	
               

            

    

    Except as
set forth in the HealthAxis SEC Documents, or the HealthAxis Disclosure Letter,
since December 31, 2007, no event has occurred that would be required to be
reported by HealthAxis pursuant to Item 404 of Regulation S-K promulgated under
the Securities Act.

     

    
      	
               
      

            	
              6.16                       
      Contracts and Commitments

            

    

    
      	
               
      

            	
               

            

    

    
      	
               
      

            	
              (a)                                 
      Except as filed with the HealthAxis SEC Documents or as set forth
      in Section 6.16(a) of the HealthAxis Disclosure Letter, neither
      HealthAxis nor any of the HealthAxis Subsidiaries has, or is party to or
      is bound by:

            

    

    
      	
               
      

            	
               

            

    

    
      	
               
      

            	
              (i)                                    
      any consulting agreement, contract or commitment under which any
      firm or other organization provides consulting services to HealthAxis or
      any of the HealthAxis Subsidiaries other than in the ordinary course of
      business;

            

    

    
      	
               
      

            	
               

            

    

    
      	
               
      

            	
              (ii)                                 
      any fidelity or surety bond or completion
  bond;

            

    

     

    55

    
      
         

      

      
         

        
          

        

      

      
         

      

    

     

    
      	
               
      

            	
              (iii)                              
      any guaranty of the obligations of a third
  party;

            

    

    
      	
               
      

            	
               

            

    

    
      	
               
      

            	
              (iv)                             
      any agreement, contract, commitment, transaction or series of
      transactions for any purpose other than in the ordinary course of
      HealthAxis’ or any of the HealthAxis Subsidiaries’ business relating to
      capital expenditures or commitments or long term obligations in excess of
      $150,000 (other than the SVB Loan Agreement and any amendment, extension
      or renewal thereof or of any related
documents);

            

    

    
      	
               
      

            	
               

            

    

    
      	
               
      

            	
              (v)                                
      any agreement, contract or commitment relating to the disposition
      or acquisition of assets or any interest in any business enterprise
      outside the ordinary course of HealthAxis’ or any of the HealthAxis
      Subsidiaries’ business;

            

    

    
      	
               
      

            	
               

            

    

    
      	
               
      

            	
              (vi)                             
      any mortgages, indentures, loans or credit agreements, security
      agreements or other arrangements or instruments relating to the borrowing
      of money or extension of credit, including capital leases and also
      guaranties referred to in clause (iii) hereof (other than the SVB
      Loan Agreement and any amendment, extension or renewal thereof or of any
      related documents);

            

    

    
      	
               
      

            	
               

            

    

    
      	
               
      

            	
              (vii)                          
      any purchase order or contract for the purchase of inventory or
      other materials involving $150,0000 or
more;

            

    

    
      	
               
      

            	
               

            

    

    
      	
               
      

            	
              (viii)                       
      any distribution, joint marketing or development agreement, other
      than agreements made in the ordinary course of
  business;

            

    

    
      	
               
      

            	
               

            

    

    
      	
               
      

            	
              (ix)                               
      any assignment, license or other agreement with respect to any form
      of intangible property, excluding agreements made in the ordinary course
      of business;

            

    

    
      	
               
      

            	
               

            

    

    
      	
               
      

            	
              (x)                                  
      any agreement or contract involving the sharing of profits and
      losses by HealthAxis or any of the
Subsidiaries;

            

    

    
      	
               
      

            	
               

            

    

    
      	
               
      

            	
              (xi)                               
      any agreement, contract or commitment that involves $150,000 or
      more or is not cancellable without penalty upon 30 days notice, excluding
      agreements made in the ordinary course of
  business;

            

    

    
      	
               
      

            	
               

            

    

    
      	
               
      

            	
              (xii)                            
      any contract containing covenants that restrict or limit the
      ability of HealthAxis or any HealthAxis Subsidiaries to engage in any line
      of business or compete with any person;
or

            

    

    
      	
               
      

            	
               

            

    

    
      	
               
      

            	
              (xiii)                         
      any “material contracts” within the meaning set forth in Item
      601(b)(10) of Regulation S-K  promulgated under the Securities
      Act.

            

    

    
      	
               
      

            	
               

            

    

    The
contracts and other documents referred to in (i) through (xiii) above and
all contracts and documents required to be filed with any HealthAxis SEC
Documents shall be referred to herein as “HealthAxis
Contracts”.

     

    56

    
      
         

      

      
         

        
          

        

      

      
         

      

    

     

    
      	
               
      

            	
              (b)                                
      Except as would not individually or in the aggregate have a
      HealthAxis Material Adverse Effect, all HealthAxis Contracts are valid and
      binding on HealthAxis and, to the best of the knowledge of HealthAxis, on
      the other parties thereto, and are in full force and effect and
      enforceable against HealthAxis and, to the best of the knowledge of
      HealthAxis, against the other parties thereto, in accordance with their
      respective terms. Except as disclosed in Section 6.16(b) of the
      HealthAxis Disclosure Letter, no approval or consent of, or notice to any
      Person the failure of which to obtain would have a HealthAxis Material
      Adverse Effect is needed in order that the HealthAxis Contracts shall
      continue in full force and effect in accordance with their terms without
      penalty, acceleration or rights of early termination following the
      consummation of the transactions contemplated by this Agreement. Except to
      the extent any of the following would not individually or in the aggregate
      have a HealthAxis Material Adverse Effect, HealthAxis is not in violation
      of, breach of or default under any HealthAxis Contract nor, to HealthAxis’
      knowledge, is any other party to any HealthAxis Contract. Except as set
      forth in Section 6.16 of the HealthAxis Disclosure Letter, HealthAxis
      is not in violation or breach of or default under any HealthAxis Contract
      (including leases of real property) relating to non-competition,
      indebtedness, guarantees of indebtedness of any other Person, employment,
      or collective bargaining.

            

    

    
      	
               
      

            	
               

            

    

    
      	
               
      

            	
              6.17                       
      Employee Matters and Benefit
Plans.

            

    

    
      	
               
      

            	
               

            

    

    
      	
               
      

            	
              (a)                                 
      Section 6.17(a) of the HealthAxis Disclosure Letter
      contains an accurate and complete list of each Employee Agreement and
      Employee Plan of HealthAxis (including for each such plan a description of
      any of the benefits of which will be increased, or the vesting of benefits
      of which will be accelerated, by the occurrence of any of the transactions
      contemplated by this Agreement of the value of any of the benefits of
      which will be calculated on the basis of any transactions contemplated by
      this Agreement). Except as set forth in Section 6.17(a) of the
      HealthAxis Disclosure Letter, neither HealthAxis nor any of the HealthAxis
      Subsidiaries or Affiliates has any announced plan or commitment, whether
      legally binding or not, to establish any new Employee Plan or Employee
      Agreement, to modify any Employee Plan or Employee Agreement (except to
      the extent required by law or to conform any such Employee Plan or
      Employee Agreement to the requirements of any applicable law, in each case
      as previously disclosed to BPOMS in writing, or as required by this
      Agreement), or to enter into any Employee Plan or Employee Agreement, nor
      does it have any intention or commitment to do any of the
      foregoing.

            

    

    
      	
               
      

            	
               

            

    

    
      	
               
      

            	
              (b)                                
      HealthAxis has provided or made available to BPOMS correct and
      complete copies of all material documents embodying or relating to each
      HealthAxis Employee Plan and Employee Agreement including: (i) all
      amendments thereto; (ii) the most recent annual actuarial valuations,
      if any, prepared for each HealthAxis Employee Plan; (iii) the three
      most recent annual reports (Series 5500 and all schedules thereto),
      if any, required under ERISA or the Code in connection with each
      HealthAxis Employee Plan or related trust; (iv) if the HealthAxis
      Employee Plan is funded, the most recent annual and periodic accounting of Employee Plan assets; (v) the most recent
      summary plan description together with the most recent summary of material
      modifications, if any, required under ERISA with respect to each
      HealthAxis Employee Plan; (vi) all IRS determination letters and
      rulings relating to HealthAxis Employee Plans and copies of all
      applications and correspondence to or from the IRS or DOL with respect to
      any HealthAxis Employee Plan; and (vii) all communications material
      to any Employee or Employees relating to any HealthAxis Employee Plan and
      any proposed HealthAxis Employee Plans, in each case, relating to any
      amendments, terminations, establishments, increases or decreases in
      benefits, acceleration of payments or vesting schedules or other events
      which would result in any material liability to HealthAxis or any
      HealthAxis Subsidiary.

            

    

     

    57

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    
      	
               
      

            	
               

            

    

     

    
      	
               
      

            	
               

            

    

    
      	
               
      

            	
              (c)                                 
      (i) Except as set forth in Section 6.l7(c) of the
      HealthAxis Disclosure Letter, HealthAxis and each of the HealthAxis
      Subsidiaries and Affiliates has performed in all material respects all
      obligations required to be performed by them under each HealthAxis
      Employee Plan, and each HealthAxis Employee Plan has been established and
      maintained in all material respects in accordance with its terms and in
      compliance with all applicable laws, statutes, orders, rules and
      regulations, including but not limited to ERISA and the Code; (ii) no
      “prohibited
      transaction,” within the meaning of Section 4975 of the Code
      or Section 406 of ERISA for which no class or statutory exemption is
      available, has occurred with respect to any HealthAxis Employee Plan;
      (iii) there are no material actions, suits or claims pending or, to
      the knowledge of HealthAxis, threatened or anticipated (other than routine
      claims for benefits) against any HealthAxis Employee Plan or against the
      assets of any HealthAxis Employee Plan; (iv) such HealthAxis Employee
      Plan can be amended, terminated or otherwise discontinued after the
      Effective Time in accordance with its terms, without material liability to
      HealthAxis or any of the HealthAxis Subsidiaries or any of its Affiliates
      (other than ordinary administration expenses typically incurred in a
      termination event); (v) there are no audits, inquiries or proceedings
      pending or, to the knowledge of HealthAxis, threatened by the IRS or DOL
      with respect to any HealthAxis Employee Plan; (vi) neither HealthAxis
      nor any of the HealthAxis Subsidiaries is subject to any penalty or tax
      with respect to any HealthAxis Employee Plan under
      Section 402(i) of ERISA or Section 4975 through 4980 of the
      Code; and (vii) all contributions, including any top heavy
      contributions, required to be made prior to the Closing by HealthAxis or
      any Affiliate to any Employee Plan have been made or shall be made on or
      before the Closing Date.

            

    

    
      	
               
      

            	
               

            

    

    
      	
               
      

            	
              (d)                                
      Neither HealthAxis nor any of the HealthAxis Subsidiaries or
      Affiliates currently maintain, sponsor, participate in or contribute to,
      nor have they ever maintained, established, sponsored, participated in, or
      contributed to, any Pension Plan which is subject to Part 3 of
      Subtitle B of Title I of ERISA, Title IV of ERISA or Section 412 of
      the Code.

            

    

    
      	
               
      

            	
               

            

    

    
      	
               
      

            	
              (e)                                 
      At no time has HealthAxis or any of the HealthAxis Subsidiaries or
      Affiliates contributed to or been requested or obligated to contribute to
      any Multiemployer Plan.

            

    

     

    58

    
      
         

      

      
         

        
          

        

      

      
         

      

    

     

    
      	
               
      

            	
              (f)                                  
      Except as set forth in Section 6.17(f) of the HealthAxis
      Disclosure Letter or as required by local, state or federal law, no
      Employee Plan or any Employment Agreement to which HealthAxis is a party
      provides, or is required to provide, life insurance, medical or other
      employee benefits to any Employee upon his or her retirement or
      termination of employment for any reason, and HealthAxis and each of the
      HealthAxis Subsidiaries has never represented, promised or contracted
      (whether in oral or written form) to any Employee (either individually or
      to Employees as a group) that such Employee(s) would be provided with
      life insurance, medical or other employee welfare benefits upon their
      retirement or termination of
employment.

            

    

    
      	
               
      

            	
               

            

    

    
      	
               
      

            	
              (g)                                
      The execution of this Agreement and the consummation of the
      transactions contemplated hereby will not (either alone or upon the
      occurrence of any additional or subsequent events) constitute an event
      under any HealthAxis Employee Plan, Employee Agreement, trust or loan that
      will or may result in any payment (whether of severance payor otherwise),
      acceleration, forgiveness of indebtedness, vesting, distribution, increase
      in benefits or obligation to fund benefits with respect to any HealthAxis
      Employee, except as set forth in Section 6.17(g) of the
      HealthAxis Disclosure Letter.

            

    

    
      	
               
      

            	
               

            

    

    
      	
               
      

            	
              (h)                               
      Except as set forth in Section 6.17(h) of the HealthAxis
      Disclosure Letter, HealthAxis and each of the HealthAxis Subsidiaries
      (i) is in compliance in all respects with all applicable foreign,
      federal, state and local laws, rules and regulations respecting
      employment, employment practices, terms and conditions of employment and
      wages and hours; in each case, with respect to Employees except as would
      not have an HealthAxis Material Adverse Effect; (ii) has withheld all
      amounts required by law or by agreement to be withheld from the wages,
      salaries, and other payments to Employees; (iii) is not liable for
      any arrears of wages or any taxes or any penalty for failure to comply
      with any of the foregoing; and (iv) is not liable for any payment to
      any trust or other fund or to any governmental or administrative
      authority, with respect to unemployment compensation benefits, social
      security or other benefits or obligations for Employees (other than
      routine payments to be made in the normal course of business and
      consistent with past practice).

            

    

    
      	
               
      

            	
               

            

    

    
      	
               
      

            	
              (i)                                   
      No work stoppage or labor strike against HealthAxis or any
      HealthAxis Subsidiary is pending or, to the knowledge of HealthAxis,
      threatened. Neither HealthAxis nor any of the HealthAxis Subsidiaries is
      involved in or, to the knowledge of HealthAxis, threatened with, any labor
      dispute, grievance, administrative proceeding or litigation relating to
      labor, safety, employment practices or discrimination matters involving
      any Employee, including, without limitation, charges of unfair labor
      practices or discrimination complaints, which, if adversely determined,
      would, individually or in the aggregate, have a HealthAxis Material
      Adverse Effect. Neither HealthAxis nor any of the HealthAxis Subsidiaries
      has engaged in any unfair labor practices within the meaning of the
      National Labor Relations Act which would, individually or in the
      aggregate, directly or indirectly have a HealthAxis Material Adverse
      Effect.

            

    

     

    59

    
      
         

      

      
         

        
          

        

      

      
         

      

    

     

    Neither
HealthAxis nor any of the HealthAxis Subsidiaries or Affiliates has ever been a
party to any agreement with any labor organization or union, and none of the
HealthAxis Employees are represented by any labor organization or union, nor
have any HealthAxis Employees threatened to organize or join a union or filed a
petition for representation with the National Labor Relations
Board.

    
      	
               
      

            	
               

            

    

    
      	
               
      

            	
              (j)                                   
      There are no (i) bonus or severance payments that could be
      payable to Employees of HealthAxis under existing Employee Agreements or
      Employee Plans on account of the transactions contemplated by this
      Agreement (without regard to termination of employment), or
      (ii) severance obligations that could be payable to Employees of
      HealthAxis under existing Employee Agreements and Employee Plans on
      account of terminations of employment following the Effective Time, except
      as disclosed in Schedule 6.17(j) of the HealthAxis Disclosure
      Letter.

            

    

    
      	
               
      

            	
               

            

    

    
      	
               
      

            	
              (k)                                
      The employment agreements contemplated by
      Section 8.1(d) of this Agreement and the addition to shares of
      the 2005 Stock Incentive Plan (or a new plan) contemplated by
      Section 2.2(a)(viii) of this Agreement shall in all respects be
      excepted from the representations set forth in this
      Section 6.17.

            

    

    
      	
               
      

            	
               

            

    

    
      	
               
      

            	
              6.18                       
      Intellectual Property and Products; HIPAA
    Compliance.

            

    

    
      	
               
      

            	
               

            

    

    
      	
               
      

            	
              (a)                                
      Section 6.18(a) of the HealthAxis Disclosure Letter lists
      all material proceedings or actions known to HealthAxis before any court,
      tribunal (including the PTO or equivalent authority anywhere in the world)
      related to any Intellectual Property owned by; or licensed to, or
      controlled by HealthAxis or any of the HealthAxis Subsidiaries (the “HealthAxis
      Intellectual Property”). No HealthAxis Intellectual Property is the
      subject of any outstanding decree, order, judgment, agreement, or
      stipulation restricting in any manner the use, transfer, or licensing
      thereof by HealthAxis or any of the HealthAxis Subsidiaries, or which may
      affect the validity, use or enforceability of any HealthAxis Intellectual
      Property.

            

    

    
      	
               
      

            	
               

            

    

    
      	
               
      

            	
              (b)                               
      Section 6.18(b) of the HealthAxis Disclosure Letter lists
      all United States, international and foreign: (a) patents and patent
      applications (including provisional applications); (b) registered
      trademarks and service marks, applications to register trademarks or
      service marks, intent to use applications, or other registrations or
      applications related to trademarks or service marks; and
      (c) registered copyrights and applications for copyright registration
      owned by HealthAxis (collectively, the “HealthAxis
      Registered Intellectual Property”). With respect to each item of
      HealthAxis Registered Intellectual Property, all material registration,
      maintenance and renewal fees necessary in connection with such HealthAxis
      Registered Intellectual Property have been made and all material documents
      and certificates necessary in connection with such HealthAxis Registered
      Intellectual Property have been filed with the relevant patent, trademark
      or copyright authorities in the United States or other jurisdictions for
      the purposes of maintaining such HealthAxis Registered Intellectual
      Property.

            

    

     

    60

    
      
         

      

      
         

        
          

        

      

      
         

      

    

     

    
      	
               
      

            	
              (c)                                
      HealthAxis or a HealthAxis Subsidiary has the right to prevent
      others from using, marketing, distributing, selling or licensing all
      HealthAxis Intellectual Property used in its business as presently
      conducted and as it is expected to be conducted as of the Effective Time,
      including without limitation, all Intellectual Property used or to be used
      in the HealthAxis Products (as defined below), and such rights to Utilize
      are sufficient for such conduct of their respective
      businesses.

            

    

    
      	
               
      

            	
               

            

    

    
      	
               
      

            	
              (d)                               
      To HealthAxis’ knowledge, the Utilization by HealthAxis or any of
      the HealthAxis Subsidiaries of any HealthAxis products currently being
      licensed, produced or sold by HealthAxis or any of the HealthAxis
      Subsidiaries or currently under development or consideration by HealthAxis
      or any of the HealthAxis Subsidiaries (“HealthAxis
      Products”) does
      not violate any license or agreement between HealthAxis or any of the
      HealthAxis Subsidiaries and any third party or, to HealthAxis’ knowledge,
      infringe any Intellectual Property right, moral right or right of
      publicity or privacy of any other party, and, except as set forth in
      Section 6.18(d) of the Disclosure Letter, HealthAxis has not
      received notice of any pending or threatened claim or litigation
      contesting the validity, ownership or right to Utilize any HealthAxis
      Intellectual Property nor, to the knowledge of HealthAxis, is there any
      basis for any such claim under applicable law, nor has HealthAxis or any
      of the HealthAxis Subsidiaries received any notice asserting that any
      HealthAxis Products or Utilization thereof conflicts or will conflict with
      the rights of any other party.

            

    

    
      	
               
      

            	
               

            

    

    
      	
               
      

            	
              (e)                                
      HealthAxis and the HealthAxis Subsidiaries have timely and
      satisfactorily fulfilled their respective obligations under all material
      agreements pursuant to which HealthAxis or any of the HealthAxis
      Subsidiaries, as the case may be, has agreed to program, design or develop
      on behalf of a third party, whether for original use or for porting or
      conversion (for use on a different hardware platform or in a different
      language), any software products or any part thereof, except where the
      failure to so comply would not reasonably be expected to have a HealthAxis
      Material Adverse Effect.

            

    

    
      	
               
      

            	
               

            

    

    
      	
               
      

            	
              (f)                                  
      Except as set forth in Section 6.18(f) of the HealthAxis
      Disclosure Letter, to the extent that any work, invention, or material has
      been developed or created by a third party for HealthAxis or any of the
      HealthAxis Subsidiaries, to HealthAxis’ knowledge, HealthAxis or a
      HealthAxis Subsidiary has a written agreement with such third party with
      respect thereto and HealthAxis or a HealthAxis Subsidiary thereby has
      obtained ownership of, and is the exclusive owner of, or has a valid
      license to use, all HealthAxis Intellectual Property in such work,
      material or invention by operation of law or by valid assignment or by
      agreement, as the case may be.

            

    

    
      	
               
      

            	
               

            

    

    
      	
               
      

            	
              (g)                               
      Section 6.l8(g) of the HealthAxis Disclosure Letter lists
      all material contracts, licenses and agreements to which HealthAxis or any
      of the HealthAxis Subsidiaries is a party that are currently in effect
      (i) with respect to HealthAxis Intellectual Property licensed or
      offered to any third party (other than licenses granted in the ordinary
      course of business); or (ii) pursuant to which a third party
      has
      licensed or transferred any Intellectual Property to HealthAxis or any of
      the HealthAxis Subsidiaries. Except as set forth in
      Section 6.18(g) of the HealthAxis Disclosure Letter, neither
      HealthAxis nor any of the HealthAxis Subsidiaries has transferred
      ownership of, or granted any license with respect to, any HealthAxis
      Intellectual Property, to any third party (other than licenses granted in
      the ordinary course of business).

            

    

     

    61

    
      
         

      

      
         

        
          

        

      

      
         

      

    

     

    
      	
               
      

            	
               

            

    

    
      	
               
      

            	
              (h)                               
      Except as set forth in Section 6.18(h) of the HealthAxis
      Disclosure Letter, the contracts, licenses and agreements listed in
      Section 6.18(h) are in full force and effect to HealthAxis’
      knowledge. The consummation of the transactions contemplated by this
      Agreement will not violate or result in the breach, modification,
      cancellation, termination, or suspension of such contracts, licenses and
      agreements listed in Section 6.18(h) and will not cause the
      forfeiture or termination or give rise to a right of forfeiture or
      termination of any rights of HealthAxis to any HealthAxis Intellectual
      Property or impair the right of HealthAxis or any of the HealthAxis
      Subsidiaries to Utilize any HealthAxis Intellectual Property or portion
      thereof.  HealthAxis and each of the HealthAxis Subsidiaries is in
      material compliance with, and has not materially breached any term any of
      such contracts, licenses and agreements listed in
      Section 6.18(h) and, to the knowledge of HealthAxis, all other
      parties to such contracts, licenses and agreements listed in
      Section 6.18(h) are in compliance with, and have not breached
      any term of, such contracts, licenses and agreements. Except as set forth
      in Section 6.18(h) of the HealthAxis Disclosure Letter,
      following the Effective Time HealthAxis and each of the HealthAxis
      Subsidiaries will be permitted to exercise all of HealthAxis’ and each of
      the HealthAxis Subsidiaries, if any, respective rights under the
      contracts, licenses and agreements listed in Section 6.18(h) to
      the same extent HealthAxis and such HealthAxis Subsidiary would have been
      able to had the transactions contemplated by this Agreement not occurred
      and without the payment of any additional funds other than ongoing fees,
      royalties or payments which HealthAxis or a HealthAxis Subsidiary would
      otherwise be required to pay.

            

    

    
      	
               
      

            	
               

            

    

    
      	
               
      

            	
              (i)                                   
      Except as set forth in Section 6.18(i) of the HealthAxis
      Disclosure Letter, (i) HealthAxis and each of the HealthAxis
      Subsidiaries (including to the knowledge of each of their executive
      officers, directors and employees) has not received any notice or claim
      (whether written, oral or otherwise) challenging HealthAxis’ ownership or
      rights in the HealthAxis Intellectual Property or claiming that any other
      Person or entity has any legal or beneficial ownership with respect
      thereto; (ii) all the HealthAxis Intellectual Property rights owned
      by HealthAxis and embodied in its HealthAxis Products are, to HealthAxis’
      knowledge, legally valid and enforceable without any material
      qualification, limitation or restriction on their use, and HealthAxis has
      not received any notice or claim (whether written or oral) challenging the
      validity or enforceability of any of the HealthAxis Intellectual Property
      rights; and (iii) to HealthAxis’ knowledge, no third party is
      infringing or misappropriating any part of the HealthAxis Intellectual
      Property.

            

    

     

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              (j)                                  
      HealthAxis and each of the HealthAxis Subsidiaries has taken
      reasonable and practicable measures designed to protect their respective
      rights in their respective confidential information and trade secrets or
      any trade secrets or confidential information of third parties provided to
      HealthAxis or any of the HealthAxis Subsidiaries. To the knowledge of
      HealthAxis or any of the HealthAxis Subsidiaries, neither HealthAxis nor
      any HealthAxis Subsidiaries has permitted any such confidential
      information or trade secrets to be used, divulged or appropriated for the
      benefit of Persons to the material detriment of HealthAxis or any of the
      HealthAxis Subsidiaries.

            

    

    
      	
               
      

            	
               

            

    

    
      	
               
      

            	
              (k)                               
      Section 6.18(k) of the HealthAxis Disclosure Letter sets
      forth a list of all Internet domain names used by HealthAxis in its
      business (collectively, the “HealthAxis
      Domain Names”). To HealthAxis’ knowledge, HealthAxis has a valid
      registration and all material rights (free of any material restriction) in
      and to the HealthAxis Domain Names, including, without limitation, all
      rights necessary to the continued use of the HealthAxis Domain Names in
      connection with the conduct of HealthAxis’ business as it is currently
      conducted.

            

    

    
      	
               
      

            	
               

            

    

    
      	
               
      

            	
              (l)                                  
      Neither HealthAxis nor any of the HealthAxis Subsidiaries is or has
      been a party to any Government Contract relating to or affecting ownership
      or Utilization of any HealthAxis Intellectual
  Property.

            

    

    
      	
               
      

            	
               

            

    

    
      	
               
      

            	
              (m)                            
      HealthAxis is in compliance, in all materials respects, with the
      Health Insurance Portability and Accountability Act of 1996, including,
      without limitation, all regulations and requirements relating to security,
      privacy and electronic transactions standards promulgated thereunder
      (collectively, “HIPAA”). 
      HealthAxis Products, which assist HealthAxis customers to perform services
      in compliance with HIPAA, are compliant, in all material respects, with
      HIPAA requirements to the extent applicable.  HealthAxis and
      HealthAxis Products are compliant, in all material respects, with the laws
      and regulations of any state where HealthAxis conducts business, relating
      to obligations of Business Associates (as defined under HIPAA) to maintain
      such compliance.

            

    

    
      	
               
      

            	
               

            

    

    
      	
               
      

            	
              6.19                       
      Anti-Takeover Matters.

            

    

    
      	
               
      

            	
               

            

    

    HealthAxis
and Merger Sub have taken all action necessary to exempt the merger and the
other transactions contemplated by this Agreement from the operation of any
“fair
price,” “moratorium,”
“control
share acquisition,” or other similar anti-takeover statute or regulation
enacted under the state or federal laws of the United States, including without
limitation, Section 203 of the DGCL. Except for the HealthAxis/Tak Investor
Rights Agreement, the HealthAxis/Tak Registration Rights Agreement, the
HealthAxis/Preferred Investor Rights Agreement and the HealthAxis/Preferred
Registration Rights Agreement, copies of which have been provided to BPOMS and
which will be terminated at Closing, neither HealthAxis nor any HealthAxis
Subsidiary has in effect any agreement, plan, scheme, device or arrangement
commonly or colloquially known as a “poison
pill” or an “anti-takeover”
plan or any similar plan, scheme, device or arrangement.

     

    63

    
      
         

      

      
         

        
          

        

      

      
         

      

    

     

    
      	
               
      

            	
              6.20                       
      Shareholder Vote Required.

            

    

    
      	
               
      

            	
               

            

    

    The only
vote of the holders of any class of shares of the capital stock of HealthAxis
necessary to approve the Reverse Split, the change of HealthAxis’ name to BPO
Management Services, Inc., this Agreement, the creation and issuance of
HealthAxis stock in the Merger, the change of control of HealthAxis for purposes
of NASD Rule 4350(i)(B) and the other transactions and other matters
contemplated by this Agreement is the affirmative vote of a majority of the
votes cast by the holders of the outstanding HealthAxis Common
Stock.

     

    
      	
               
      

            	
              6.21                       
      Undisclosed Liabilities.

            

    

    
      	
               
      

            	
               

            

    

    Except as
and to the extent reflected, reserved against or otherwise disclosed in
Section 6.7(c) of the Disclosure Letter or the HealthAxis SEC
Documents and except as set forth in Section 6.21 of the HealthAxis
Disclosure Letter, neither HealthAxis nor the HealthAxis Subsidiaries have any
liabilities or obligations of any kind, whether accrued, absolute, asserted or
unasserted, contingent or otherwise, of a nature required to be disclosed on a
balance sheet prepared in accordance with GAAP consistently applied, which would
have, individually or in the aggregate, a HealthAxis Material Adverse
Effect.

     

    
      	
               
      

            	
              6.22                       
      Insurance.

            

    

    
      	
               
      

            	
               

            

    

    HealthAxis
maintains, and has maintained or caused to be maintained, without interruption,
since January 1, 2002, policies or binders of insurance covering such risk,
and events, including personal injury, property damage, errors and omissions and
general liability in amounts HealthAxis reasonably believes adequate for its
business and operations, and its current insurance policies (other than
directors and officers insurance) will not terminate due to consummation of the
Merger.  Section 6.22 of the HealthAxis Disclosure Letter sets forth a
summary of all current  insurance
policies (including, without limitation, limits, deductibles and terms)
maintained by HealthAxis and the HealthAxis Subsidiaries.

     

    
      	
               
      

            	
              6.23                       
      Financial Forecast and Relationships with Suppliers, Licensors and
      Customers.

            

    

    
      	
               
      

            	
               

            

    

    HealthAxis
has provided to BPOMS a copy of its 2008 forecast (the “HealthAxis
Forecast”). The
HealthAxis Forecast was prepared in good faith and HealthAxis believes there is
a reasonable basis for the HealthAxis Forecast. No current supplier, licensor,
distributor or customer of HealthAxis or any of the HealthAxis Subsidiaries has
notified HealthAxis or such HealthAxis Subsidiary of an intention to terminate
or substantially alter its existing business relationship with HealthAxis or
such HealthAxis Subsidiary, which termination or alteration would cause
HealthAxis to fail to achieve the projections set forth in the HealthAxis
Forecast or would otherwise have a HealthAxis Material Adverse Effect in
2008.

     

    
      	
               
      

            	
              6.24                       
      Continuity of Business
Enterprise.

            

    

    
      	
               
      

            	
               

            

    

    It is the
present intention of HealthAxis to continue at least one significant historic
business line of BPOMS, or to use at least a significant portion of BPOMS’
historic assets in a business, in each case within the meaning of the United
States Treasury Regulations Section 1.368-1(d).

     

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              6.25                       
      Ownership of BPOMS Shares.

            

    

    
      	
               
      

            	
               

            

    

    As of the
date hereof, and during the three (3) year period immediately preceding the
date hereof, neither HealthAxis nor, to HealthAxis’ knowledge, any affiliate or
associate (as defined in Section 203 of the DGCL) thereof, is an “interested
stockholder” of BPOMS within the meaning of Section 203 of the
DGCL.

     

    ARTICLE
7

    COVENANTS
AND OTHER AGREEMENTS

     

    
      	
               
      

            	
              7.1                              
      Conduct of Businesses.

            

    

    
      	
               
      

            	
               

            

    

    
      	
               
      

            	
              (a)                                 
      During the period from the date of this Agreement until the
      Effective Time, except as specifically permitted by this Agreement, unless
      the other Party has consented in writing
  thereto:

            

    

    
      	
               
      

            	
               

            

    

    
      	
               
      

            	
              (i)                                  
      BPOMS and HealthAxis shall use their reasonable best efforts, and
      shall cause their respective Subsidiaries to use their reasonable best
      efforts, to preserve intact their business organizations and
      goodwill;

            

    

    
      	
               
      

            	
               

            

    

    
      	
               
      

            	
              (ii)                               
      BPOMS and HealthAxis shall confer on a regular basis with one or
      more representatives of the other to report on material operational
      matters relating to the business of BPOMS and the BPOMS
      Subsidiaries;

            

    

    
      	
               
      

            	
               

            

    

    
      	
               
      

            	
              (iii)                            
      each Party will cooperate with and, at the request of the other
      Party, provide reasonable assistance to the other Party to seek to reduce
      or avoid disruptions to the other Party’s business that may result from or
      arise out of the announcement or pendency of the transactions contemplated
      hereby;

            

    

    
      	
               
      

            	
               

            

    

    
      	
               
      

            	
              (iv)                           
      BPOMS and HealthAxis shall promptly notify the other of any
      material emergency or other material change in the condition (financial or
      otherwise), business, properties, assets, liabilities or the normal course
      of its businesses or in the operation of their properties, any material
      governmental complaints, investigations or hearings (or communications
      indicating that the same may be
contemplated);

            

    

    
      	
               
      

            	
               

            

    

    
      	
               
      

            	
              (v)                              
      each Party shall promptly deliver to the other Party true and
      correct copies of any report, statement or schedule filed with the SEC
      subsequent to the date of this Agreement other than those reports,
      statements or schedules that are available through the SEC’s website;
      and

            

    

    
      	
               
      

            	
               

            

    

    
      	
               
      

            	
              (vi)                           
      In the event either Party becomes aware that any of its respective
      representations or warranties set forth in Sections 5 and 6 hereof will
      not be true and correct in all material respects on the Closing Date as if
      made at and as of the Closing Date, such Party shall give prompt written
      notice thereof to the other Party, and shall give access to all
      appropriate information related thereto that is in its possession or
      control.

            

    

     

    65

    
      
         

      

      
         

        
          

        

      

      
         

      

    

     

    
      	
               
      

            	
              (b)                                
      Prior to the Closing Date, except as expressly provided in this
      Agreement or unless BPOMS has first obtained written consent of
      HealthAxis, BPOMS:

            

    

    
      	
               
      

            	
               

            

    

    
      	
               
      

            	
              (i)                                   
      Shall, and shall cause each BPOMS Subsidiary to, exercise its best
      efforts to conduct its operations according to their usual, regular and
      ordinary course in substantially the same manner as heretofore conducted,
      preserve and protect the BPOMS Intellectual Property and keep available
      the services of its officers and
employees;

            

    

    
      	
               
      

            	
               

            

    

    
      	
               
      

            	
              (ii)                                
      Shall not amend BPOMS’ Certificate of Incorporation or By-laws, and
      shall cause each BPOMS Subsidiary not to amend its certificates of
      incorporation, bylaws or equivalent organizational
    documents;

            

    

    
      	
               
      

            	
               

            

    

    
      	
               
      

            	
              (iii)                             
      Shall not, and shall cause each BPOMS Subsidiary not
      to,

            

    

    
      	
               
      

            	
               

            

    

    
      	
               
      

            	
              (A)                            
      issue or authorize for issue any BPOMS capital stock or security
      convertible into or exercisable for any BPOMS capital stock (except for
      (I) shares of BPOMS Series F Preferred Stock issued as part of
      the BPOMS Pre-Merger Steps, (II) shares of BPOMS Common Stock issued
      upon the exercise of options or warrants outstanding as of the date of
      this Agreement and (III) options issued as permitted under the
      following clause (C));

            

    

    
      	
               
      

            	
               

            

    

    
      	
               
      

            	
              (B)                              
      effect any share split, reverse share split, share dividend,
      recapitalization or other similar transaction or issue or authorize the
      issuance of any other securities in respect of, in lieu of or in
      substitution for BPOMS capital stock or capital stock of any BPOMS
      Subsidiary, except for the BPOMS Pre-Merger
  Steps;

            

    

    
      	
               
      

            	
               

            

    

    
      	
               
      

            	
              (C)                              
      grant, confer or award any option, warrant, conversion right or
      other right not existing on the date hereof to acquire, redeem or
      repurchase any BPOMS capital stock except in connection with the BPOMS
      Pre-Merger Steps;

            

    

    
      	
               
      

            	
               

            

    

    
      	
               
      

            	
              (D)                             
      increase any compensation or enter into or amend any employment
      agreement with any of its present or future officers, directors or
      employees except in the ordinary course of business and except for the
      employment agreements contemplated by
      Section 8.1(d) hereof;

            

    

    
      	
               
      

            	
               

            

    

    
      	
               
      

            	
              (E)                               
      adopt any new Employee Plan or (except as contemplated in this
      Agreement) amend any existing BPOMS Employee Plan or severance or
      termination pay policies in any material respect, except as required by
      applicable law or for changes which are less favorable to participants in
      such plans;

            

    

    
      	
               
      

            	
               

            

    

    
      	
               
      

            	
              (F)                               
      authorize, declare, set aside or pay any dividends or make any
      other distribution or payments with respect to any BPOMS capital
      stock, or directly or indirectly redeem, purchase or
      otherwise acquire any BPOMS capital stock or capital stock of any of the
      BPOMS Subsidiaries except in connection with the BPOMS Pre-Merger Steps;
      or

            

    

     

    66

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    
      	
               
      

            	
               

            

    

     

    
      	
               
      

            	
               

            

    

    
      	
               
      

            	
              (G)                             
      make any commitment for any such
action;

            

    

    
      	
               
      

            	
               

            

    

    
      	
               
      

            	
              (iv)                            
      Shall not, and shall not permit any of the BPOMS Subsidiaries to,
      pay, discharge or satisfy any claims, liabilities or obligations
      (absolute, accrued, asserted or unasserted, contingent or otherwise),
      other than the payment, discharge or satisfaction, in the ordinary course
      of business consistent with past practice or in accordance with their
      terms, of liabilities reflected or reserved against in, or contemplated
      by, the BPOMS SEC Documents or incurred after the date thereof in the
      ordinary course of business consistent with past
  practice;

            

    

    
      	
               
      

            	
               

            

    

    
      	
               
      

            	
              (v)                               
      Shall not, and shall not permit any of the BPOMS Subsidiaries to,
      enter into or amend, modify or terminate any contract which is outside the
      ordinary course of business and which may result in total fixed or
      guaranteed payments or liability by or to it in excess of $100,000, other
      than contracts for expenses of attorneys and accountants incurred in
      connection with the Merger and office space leases on commercially
      reasonable terms;

            

    

    
      	
               
      

            	
               

            

    

    
      	
               
      

            	
              (vi)                           
      Shall not, and shall not permit any of the BPOMS Subsidiaries to,
      enter into or amend any contract with any officer, trustee, director,
      consultant or affiliate of BPOMS or any of the BPOMS Subsidiaries, other
      than as contemplated by the BPOMS Pre-Merger
  Steps;

            

    

    
      	
               
      

            	
               

            

    

    
      	
               
      

            	
              (vii)                        
      Shall, and shall cause each BPOMS Subsidiary to, timely prepare, in
      a manner consistent with past practice, and file all Tax Returns required
      to be filed the due date of which (including reasonable extensions) occurs
      on or before the Effective Time and pay all Taxes due with respect to any
      such Tax Returns;

            

    

    
      	
               
      

            	
               

            

    

    
      	
               
      

            	
              (viii)                    
      Shall not, and shall not permit any BPOMS Subsidiary to, amend any
      Tax Returns, make any election relating to Taxes, change any election
      relating to Taxes already made, adopt any accounting method relating to
      Taxes, change any accounting method relating to Taxes unless required by
      GAAP (as agreed with BPOMS’ independent public accountants) or a change in
      the Code, enter into any closing agreement relating to Taxes, settle or
      compromise any claim, suit, litigation, proceeding, investigation, audit
      or controversy relating to Taxes (unless required by law), or consent to
      the waiver of the statute of limitations for any claim or audit relating
      to Taxes;

            

    

    
      	
               
      

            	
               

            

    

    
      	
               
      

            	
              (ix)                            
      Shall not enter into, terminate or materially amend or renew any
      contract other than with third parties in the ordinary course of operating
      its business consistent with past practice and with
      the employees referred to in Section 8.1(d) hereof;
      and

            

    

     

    67

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    
      	
               
      

            	
               

            

    

     

    
      	
               
      

            	
               

            

    

    
      	
               
      

            	
              (x)                                
      Shall not incur any indebtedness or other obligation for borrowed
      money other than trade payables and other accruals made in the ordinary
      course of business consistent with past
  practice.

            

    

    
      	
               
      

            	
               

            

    

    
      	
               
      

            	
              (c)                                
      Prior to the Closing Date, except as expressly provided in this
      Agreement unless HealthAxis has first obtained written consent of BPOMS,
      HealthAxis:

            

    

    
      	
               
      

            	
               

            

    

    
      	
               
      

            	
              (i)                                  
      Shall, and shall cause each HealthAxis Subsidiary to, exercise its
      best efforts to conduct its operations according to their usual, regular
      and ordinary course in substantially the same manner as heretofore
      conducted, preserve and protect the HealthAxis Intellectual Property and
      keep available the services of its officers and
  employees;

            

    

    
      	
               
      

            	
               

            

    

    
      	
               
      

            	
              (ii)                               
      Shall not amend HealthAxis’ Amended and Restated Articles of
      Incorporation or By-laws, and shall cause each HealthAxis Subsidiary not
      to amend its charters, bylaws or equivalent organizational documents
      except in connection with the HealthAxis Pre-Merger
  Steps;

            

    

    
      	
               
      

            	
               

            

    

    
      	
               
      

            	
              (iii)                            
      Shall not, and shall cause each HealthAxis Subsidiary not
      to,

            

    

    
      	
               
      

            	
               

            

    

    
      	
               
      

            	
              (A)                            
      issue or authorize for issue any HealthAxis capital stock or
      security convertible into or exercisable for any HealthAxis capital stock,
      except for (i) the shares to be issued and stock options to be
      granted as contemplated by this Agreement, and (ii) upon the exercise
      of any options and warrants outstanding as of the date of this
      Agreement,

            

    

    
      	
               
      

            	
               

            

    

    
      	
               
      

            	
              (B)                              
      effect any share split, reverse share split, share dividend,
      recapitalization or other similar transaction or issue or authorize the
      issuance of any other securities in respect of, in lieu of or in
      substitution for HealthAxis capital stock or capital stock of any
      HealthAxis Subsidiary except in connection with the HealthAxis Pre-Merger
      Steps,

            

    

    
      	
               
      

            	
               

            

    

    
      	
               
      

            	
              (C)                              
      grant, confer or award any option, warrant, conversion right or
      other right not existing on the date hereof to acquire, redeem or
      repurchase any HealthAxis capital stock, except repurchases of stock in
      connection with the payment of withholding taxes related to equity
      compensation incentives which are on a set-off basis and do not involve
      any cash outlay by HealthAxis other than to the
  IRS,

            

    

    
      	
               
      

            	
               

            

    

    
      	
               
      

            	
              (D)                             
      increase any compensation or enter into or amend any employment
      agreement with any of its present or future officers, directors or
      employees other than as contemplated by
      Section 8.1(d) hereof,

            

    

     

    68

    
      
         

      

      
         

        
          

        

      

      
         

      

    

     

    
      	
               
      

            	
              (E)                              
      adopt any new Employee Plan or amend any existing HealthAxis
      Employee Plan or severance or termination pay policies in any material
      respect, except as contemplated by this Agreement or as required by
      applicable law or for changes which are less favorable to participants in
      such plans,

            

    

    
      	
               
      

            	
               

            

    

    
      	
               
      

            	
              (F)                               
      authorize, declare, set aside or pay any dividends (except as
      expressly provided in this Agreement) or make any other distribution or
      payments with respect to any HealthAxis capital stock, or directly or
      indirectly redeem, purchase or otherwise acquire any HealthAxis capital
      stock or capital stock of any of the HealthAxis Subsidiaries, except for
      the nominal dividend relating to the HealthAxis Series A Preferred
      Stock and any stock repurchased in connection with the payment of
      withholding taxes associated with equity compensation incentives on a
      set-off basis and not involving any cash outlay by HealthAxis other than
      to the IRS, or

            

    

    
      	
               
      

            	
               

            

    

    
      	
               
      

            	
              (G)                              
      make any commitment for any such
action;

            

    

    
      	
               
      

            	
               

            

    

    
      	
               
      

            	
              (iv)                           
      Shall not, and shall not permit any of the HealthAxis Subsidiaries
      to, pay, discharge or satisfy any claims, liabilities or obligations
      (absolute, accrued, asserted or unasserted, contingent or otherwise),
      other than the payment, discharge or satisfaction, in the ordinary course
      of business consistent with past practice or in accordance with their
      terms, of liabilities reflected or reserved against in, or contemplated
      by, the HealthAxis SEC Documents or incurred after the date thereof in the
      ordinary course of business consistent with past
  practice;

            

    

    
      	
               
      

            	
               

            

    

    
      	
               
      

            	
              (v)                              
      Shall not, and shall not permit any of the HealthAxis Subsidiaries
      to, enter into or amend, modify or terminate any contract which may result
      in total fixed or guaranteed payments or liability by or to it in excess
      of $150,000 other than contracts for expenses of financial advisors,
      attorneys and accountants incurred in connection with the
      Merger;

            

    

    
      	
               
      

            	
               

            

    

    
      	
               
      

            	
              (vi)                           
      Shall not, and shall not permit any of the HealthAxis Subsidiaries
      to, enter into any contract with any officer, trustee, director or
      affiliate of HealthAxis or any of the HealthAxis Subsidiaries other than
      as contemplated by the HealthAxis Pre-Merger
  Steps;

            

    

    
      	
               
      

            	
               

            

    

    
      	
               
      

            	
              (vii)                        
      Shall, and shall cause each HealthAxis Subsidiary to, timely
      prepare, in a manner consistent with past practice, and file all Tax
      Returns required to be filed the due date of which (including reasonable
      extensions) occurs on or before the Effective Time and pay all Taxes due
      with respect to any such Tax
Returns;

            

    

     

    69

    
      
         

      

      
         

        
          

        

      

      
         

      

    

     

    
      	
               
      

            	
              (viii)                     
      Shall not, and shall not permit any HealthAxis Subsidiary to, amend
      any Tax Returns, make any election relating to Taxes, change any election
      relating to Taxes already made, adopt any accounting method relating to
      Taxes, change any accounting method relating to Taxes unless required by
      GAAP (as agreed with HealthAxis’ independent public accountants) or a
      change in the Code, enter into any closing agreement relating to Taxes,
      settle or compromise any claim, suit, litigation, proceeding,
      investigation, audit or controversy relating to Taxes (unless required by
      law), or consent to the waiver of the statute of limitations for any claim
      or audit relating to Taxes;

            

    

    
      	
               
      

            	
               

            

    

    
      	
               
      

            	
              (ix)                             
      Shall not enter into, terminate or materially amend or renew any
      contract other than with third parties in the ordinary course of operating
      its business consistent with past practice;
and

            

    

    
      	
               
      

            	
               

            

    

    
      	
               
      

            	
              (x)                                
      Shall not incur any indebtedness or other obligation for borrowed
      money other than pursuant to the Loan and Security Agreement between the
      Company and Silicon Valley Bank dated August 14, 2006 (as amended,
      the “SVB Loan
      Agreement”), and other than trade payables and other accruals made
      in the ordinary course of business consistent with past
      practice.

            

    

    
      	
               
      

            	
               

            

    

    
      	
               
      

            	
              7.2                              
      BPOMS Stockholders Meeting.

            

    

    
      	
               
      

            	
               

            

    

    
      	
               
      

            	
              (a)                                
      BPOMS will take all action necessary in accordance with applicable
      law and its respective Certificate of Incorporation, to convene an annual
      or special meeting of its stockholders (the “BPOMS
      Meeting”) as promptly as practicable to consider and vote upon the
      adoption and approval of this Agreement and the transactions contemplated
      hereby including the Merger and the BPOMS Pre-Merger Steps. The Board of
      Directors of BPOMS shall recommend that its stockholders adopt and approve
      this Agreement and the transactions contemplated hereby and BPOMS shall
      use its reasonable best efforts to obtain such approval; provided,
      however, that nothing contained in this Section 7.2 shall prohibit
      the directors of BPOMS from failing to make, withdrawing such
      recommendation, modifying such recommendation or using their reasonable
      best efforts to obtain such adoption and approval if BPOMS shall have
      received an Acquisition Proposal (as hereinafter defined) and if such
      directors have determined in good faith, after consulting with their
      financial and legal advisors, that the Acquisition Proposal is a Superior
      Offer (as hereinafter defined).

            

    

    
      	
               
      

            	
               

            

    

    
      	
               
      

            	
              (b)                               
      As promptly as practicable following the date hereof, BPOMS shall
      prepare and, following review and incorporation of reasonable comments by
      HealthAxis (which review shall be as prompt as practicable), file with the
      SEC a preliminary proxy statement and form of proxy, or preliminary
      information statement, as permitted by Regulation 14A or 14C, as
      applicable, under the Securities Exchange Act of 1934, as amended (“Exchange
      Act”) relating to the BPOMS Meeting and the vote of the
      stockholders of BPOMS with respect to this Agreement,
      the Merger, the transactions contemplated by this Agreement, and the BPOMS
      Pre-Merger Steps. As soon as practicable and permitted under applicable
      laws, BPOMS shall prepare the related final proxy statement or final
      information statement (such final proxy statement or final information
      statement, the “BPOMS
      Proxy Statement”); mail the BPOMS Proxy Statement to its
      shareholders and file the BPOMS Proxy Statement with the SEC. HealthAxis
      shall promptly furnish all information about itself and its business and
      operations and all necessary financial information to BPOMS as BPOMS may
      reasonably request in connection with the preparation of the BPOMS Proxy
      Statement, it being understood that prior to execution of this Agreement,
      BPOMS has requested HealthAxis to provide BPOMS with all financial and
      other information required by Regulation 14A under the Exchange Act to be
      disclosed in the BPOMS Proxy Statement with regard to HealthAxis and its
      business, operations and financial condition.  HealthAxis shall
      ensure that the financial statements to be included in the BPOMS Proxy
      Statement (i) are prepared in accordance with GAAP applied on a
      consistent basis throughout the periods involved (except as may be
      indicated in the footnotes thereto and that the interim financial
      statements may not have notes thereto and other presentation items that
      may be required by GAAP and are subject to normal and recurring year-end
      adjustments that are not reasonably expected to be material in amount),
      and (ii) fairly present in all material respects the consolidated
      financial position and operating results and cash flows of HealthAxis as
      of the dates and for the periods indicated
  therein.

            

    

     

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              (c)                                
      As promptly as practicable following the date hereof, BPOMS shall
      deliver to HealthAxis a draft of the preliminary proxy statement
      containing all information required to be included therein, other than
      such information as is to be provided by or is dependent upon information
      provided by HealthAxis pursuant to
      Section 7.2(b) above.

            

    

    
      	
               
      

            	
               

            

    

    
      	
               
      

            	
              (d)                               
      Whenever BPOMS receives any comments from the SEC or its staff or
      any other event occurs relating to this Agreement or the Merger which is
      required to be set forth in a filing with the SEC by BPOMS, whether an
      amendment or supplement to the BPOMS Proxy Statement or otherwise, BPOMS
      shall (i) promptly inform HealthAxis of such occurrence,
      (ii) provide reasonable advance notice to HealthAxis of such filing
      (including without limitation an opportunity to provide comments thereto)
      and (iii) cooperate with HealthAxis in such filing with the SEC or
      its staff, including without limitation in completing any mailing to
      Stockholders of BPOMS or any amendment or supplement to the BPOMS Proxy
      Statement.

            

    

    
      	
               
      

            	
               

            

    

    
      	
               
      

            	
              7.3                              
      HealthAxis Fairness Hearing; Stockholders
  Meeting.

            

    

    
      	
               
      

            	
               

            

    

    
      	
               
      

            	
              (a)                                
      As promptly as practicable following the execution of this
      Agreement, HealthAxis shall prepare and file, with the full cooperation of
      BPOMS, an application to obtain a permit (a “California
      Permit”) from the Commissioner of Corporations of the State of
      California after a hearing before such Commissioner (the “Fairness
      Hearing”) pursuant to Section 25121 of the California
      Corporate Securities Law of 1968, so that the issuance
      of HealthAxis securities in the Merger shall be exempt from registration
      under Section 3(a)(10) of the Securities Act.  HealthAxis,
      with the full cooperation of BPOMS, will use commercially reasonable
      efforts to respond to any comments from the California Department of
      Corporations and each of HealthAxis and BPOMS will use their commercially
      reasonable efforts to have the California Permit granted as soon as
      practicable after such filing, including without limitation, scheduling
      the Fairness Hearing on the first practicable date after filing of the
      application.  As promptly as practical after the date of this
      Agreement, HealthAxis and BPOMS shall prepare and make such filings as are
      required under applicable Blue Sky laws relating to the transactions
      contemplated by this Agreement.  BPOMS shall use reasonable and good
      faith efforts to assist HealthAxis as may be necessary to cause the Permit
      Application and any solicitation material sent to Stockholders of BPOMS to
      comply with the securities and Blue Sky
laws.

            

    

     

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              (b)                               
      In the event the parties are not able to obtain a California
      Permit, HealthAxis shall, at its election, use commercially reasonable
      efforts to prepare and file with the SEC a registration statement on
      Form S-4 or other comparable form in which a proxy statement to
      solicit and obtain the approval of BPOMS’ Stockholders as contemplated in
      Section 7.2(b) above will be
included.

            

    

    
      	
               
      

            	
               

            

    

    
      	
               
      

            	
              (c)                                
      As promptly as practicable following the receipt of the California
      Permit, HealthAxis will take all action necessary in accordance with
      applicable law and its respective Certificate of Incorporation, to convene
      an annual or special meeting of its stockholders (the “HealthAxis
      Meeting”) to consider and vote upon the approval of this Agreement
      and the transactions and other matters contemplated hereby including the
      issuance of HealthAxis stock in the Merger and the Reverse Split. The
      Board of Directors of HealthAxis shall recommend that its stockholders
      approve this Agreement and the transactions and other matters contemplated
      hereby and HealthAxis shall use its reasonable best efforts to solicit and
      obtain such approval; provided, however, that nothing contained in this
      Section 7.3 shall prohibit the directors of HealthAxis from failing
      to make, withdrawing such recommendation, modifying such
      recommendation  or using their reasonable best efforts to obtain such
      approval if HealthAxis shall have received an Acquisition Proposal and if
      such directors have determined in good faith, after consultation with
      their financial and legal advisors, that the Acquisition Proposal is a
      Superior Offer. The materials submitted to the BPOMS’ stockholders shall
      be subject to review and approval by HealthAxis and include information
      regarding BPOMS; the terms of the Merger; the Agreement and any related
      agreements; and the unanimous recommendation of the Board of Directors of
      BPOMS in favor of the Merger, this Agreement and any related
      agreements.

            

    

    
      	
               
      

            	
               

            

    

    
      	
               
      

            	
              (d)                               
      As promptly as practicable following the receipt of the California
      Permit, HealthAxis shall prepare and, following review and incorporation
      of reasonable comments by BPOMS (which review shall be as prompt as
      practicable), file with the SEC a preliminary proxy statement and form of
      proxy, or preliminary information statement, as permitted by Regulation
      14A or 14C, as applicable, under
      the Securities Exchange Act of 1934, as amended (“Exchange
      Act”) relating to the HealthAxis Meeting and the vote of the
      stockholders of HealthAxis with respect to this Agreement and the
      transactions and other matters contemplated by this Agreement. As soon as
      practicable and permitted under applicable laws, HealthAxis shall prepare
      the related final proxy statement or final information statement (such
      final proxy statement or final information statement, the “HealthAxis
      Proxy Statement”); mail the HealthAxis Proxy Statement to its
      shareholders and file the HealthAxis Proxy Statement with the SEC. BPOMS
      shall promptly furnish all information about itself and its business and
      operations and all necessary financial information to HealthAxis as
      HealthAxis may reasonably request in connection with the preparation of
      the HealthAxis Proxy Statement, it being understood that prior to
      execution of this Agreement, HealthAxis has requested BPOMS to provide
      HealthAxis with all financial and other information required by Regulation
      14A under the Exchange Act to be disclosed in the HealthAxis Proxy
      Statement with regard to BPOMS and its business, operations and financial
      condition.  BPOMS shall ensure that the financial statements to be
      included in the HealthAxis Proxy Statement (i) are prepared in
      accordance with GAAP applied on a consistent basis throughout the periods
      involved (except as may be indicated in the footnotes thereto and that the
      interim financial statements may not have notes thereto and other
      presentation items that may be required by GAAP and are subject to normal
      and recurring year-end adjustments that are not reasonably expected to be
      material in amount), and (ii) fairly present in all material respects
      the consolidated financial position and operating results and cash flows
      of BPOMS as of the dates and for the periods indicated
      therein.

            

    

     

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              (e)                                
      As promptly as practicable following the date hereof, HealthAxis
      shall deliver to BPOMS a draft of the preliminary proxy statement
      containing all information required to be included therein, other than
      such information as is to be provided by or is dependent upon information
      provided by BPOMS pursuant to
    Section 7.3(b) above.

            

    

    
      	
               
      

            	
               

            

    

    
      	
               
      

            	
              (f)                                  
      Whenever HealthAxis receives any comments from the SEC or its staff
      or any other event occurs relating to this Agreement or the Merger which
      is required to be set forth in a filing with the SEC by HealthAxis,
      whether an amendment or supplement to the HealthAxis Proxy Statement or
      otherwise, HealthAxis shall (i) promptly inform BPOMS of such
      occurrence, (ii) provide reasonable advance notice to BPOMS of such
      filing (including without limitation an opportunity to provide comments
      thereto) and (iii) cooperate with BPOMS in such filing with the SEC
      or its staff, including without limitation in completing any mailing to
      Stockholders of HealthAxis or any amendment or supplement to the
      HealthAxis Proxy Statement.

            

    

    
      	
               
      

            	
               

            

    

    
      	
               
      

            	
              7.4                              
      Approvals; Other Action.

            

    

    
      	
               
      

            	
               

            

    

    Subject
to the terms and conditions herein provided, BPOMS and HealthAxis shall:
(i) use best efforts to cooperate with one another in (x) determining
which filings are required to be made
prior to the Effective Time with, and which consents, approvals, permits or
authorizations are required to be obtained prior to the Effective Time from,
governmental or regulatory authorities of the United States, the several states
and any third parties in connection with the execution and delivery of this
Agreement, the consummation of the transactions contemplated by this Agreement
and (y) timely making all such filings and timely seeking all such
consents, approvals, permits or authorizations; (ii) use best efforts to
obtain in writing any consents required from third parties to effectuate the
Merger, such consents to be in form reasonably satisfactory to BPOMS and
HealthAxis; and (iii) use best efforts to take, or cause to be taken, all
other actions and do, or cause to be done, all other things necessary, proper or
appropriate to consummate and make effective the transactions contemplated by
this Agreement. If, at any time after the Effective Time, any further action is
necessary or desirable to carry out the purpose of this Agreement, the proper
officers and directors HealthAxis and BPOMS shall take all such necessary
action.

     

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              7.5                              
      Access to Information;
Confidentiality.

            

    

    
      	
               
      

            	
               

            

    

    
      	
               
      

            	
              (a)                                 
      Upon reasonable notice and subject to the restrictions contained in
      the Non-Disclosure Agreement referenced in Section 10.5 below, BPOMS
      and HealthAxis shall (and shall cause their respective Subsidiaries to)
      afford to the officers, employees, accountants, counsel and other
      representatives of the other reasonable access, during normal business
      hours during the period prior to the Effective Time, to all their
      properties, books, contracts, Tax Returns, commitments and records and
      permit such Persons to make such inspections as they may reasonably
      require and, during such period, each of BPOMS and HealthAxis shall (and
      shall cause their respective Subsidiaries to) furnish promptly to the
      other all information concerning its business, properties and Personnel as
      the other may reasonably request; provided that if a Party is withholding
      information because it is obligated to do so pursuant to a confidentiality
      agreement by which it is bound, the Party shall give the other notice of
      such withholding.

            

    

    
      	
               
      

            	
               

            

    

    
      	
               
      

            	
              (b)                                
      In addition to any other obligations contained in the
      Non-Disclosure Agreement, in the event of termination of this Agreement
      for any reason each Party shall promptly return all such information
      obtained from the other, and any copies made of, or reports or analyses
      based on, such information, to the other and not use any such information
      for any purpose that would be competitive with or cause material harm to
      the other.

            

    

    
      	
               
      

            	
               

            

    

    
      	
               
      

            	
              7.6                              
      Publicity.

            

    

    
      	
               
      

            	
               

            

    

    HealthAxis
and BPOMS shall consult with each other before issuing any press release or
otherwise making any public statements with respect to this Agreement or any
transaction contemplated herein and shall not issue any such press release or
make any such public statement without the prior consent of the other Party,
which consent shall not be unreasonably withheld; provided, however, that a
Party may, without the prior consent of the other Party, issue such press
release or make such public statement as may be required by law or the
rules of the Nasdaq Stock Market if it has used its reasonable best efforts
to consult with the other Party and to obtain such Party’s consent but has been
unable to do so in a timely manner.

     

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              7.7                              
      Listing of HealthAxis Common
Stock.

            

    

    
      	
               
      

            	
               

            

    

    Subject
to the terms of this Agreement and the impact of the transactions contemplated
hereby, prior to the Effective Time HealthAxis and BPOMS shall coordinate their
efforts with respect to the possible listing on the Nasdaq Capital Market of the
HealthAxis Common Stock.

     

    
      	
               
      

            	
              7.8                              
      Further Action.

            

    

    
      	
               
      

            	
               

            

    

    Each
Party hereto shall, subject to Article 9 and subject to the fulfillment at
or before the Effective Time of each of the conditions of performance set forth
herein or the waiver thereof, perform such further acts and execute such
documents as may reasonably be required to effect the Merger.

     

    
      	
               
      

            	
              7.9                              
      Tax Treatment.

            

    

    
      	
               
      

            	
               

            

    

    None of
HealthAxis, Merger Sub, or BPOMS shall, and they shall not permit any of their
respective Subsidiaries to, take any action prior to or following the Closing
that would reasonably be expected to cause the Merger to fail to qualify as a
reorganization within the meaning of Section 368(a) of the
Code.

     

    
      	
               
      

            	
              7.10                       
      No Solicitation.

            

    

    
      	
               
      

            	
               

            

    

    
      	
               
      

            	
              (a)                                 
      For purposes of this Agreement, “Acquisition
      Proposal” shall mean, with respect to a Party, any offer or
      proposal (other than an offer or proposal made or submitted by BPOMS, on
      the one hand or HealthAxis, on the other hand, to the other Party)
      contemplating or otherwise relating to any Acquisition Transaction with
      such Party. “Acquisition
      Transaction” shall mean any transaction or series of transactions
      described in subparagraphs (i), (ii) or (iii) of this
      paragraph  (other than the BPOMS Pre-Merger Steps, HealthAxis
      Pre-Merger Steps, and a private placement of shares of HealthAxis Common
      Stock or securities convertible into or exercisable for shares of
      HealthAxis Common Stock, which private placement would be for the purpose
      of raising up to $3,000,000 of working capital for HealthAxis and would
      close after the Effective Time, and would not require a stockholder vote
      (the “Additional
      Financing”), but the entry into which would be subject to the prior
      written consent of HealthAxis pursuant to
      Section 7.1(b) hereof):

            

    

    
      	
               
      

            	
               

            

    

    
      	
               
      

            	
              (i)                                   
      any merger, consolidation, amalgamation, share exchange, business
      combination, issuance of securities, acquisition of securities,
      reorganization, recapitalization, tender offer, exchange offer or other
      similar transaction: (i) in which a Party or any of its affiliates is
      a constituent corporation; (ii) in which a Person or “group”
      (as defined in the Exchange Act and the rules promulgated thereunder)
      of Persons directly or indirectly acquires beneficial or record ownership
      of securities representing more than 15% of the outstanding securities of
      any class of voting securities of a Party or any of its Subsidiaries;
      (iii) in which a Party or any of its Subsidiaries issues securities
      representing more than 15% of the outstanding securities of any class of
      voting securities of such Party or any
      of its Subsidiaries; or (iv) in which a Party or any of its
      Subsidiaries would acquire a “significant
      subsidiary” as defined in Rule 1-02(w) of Regulation S-X
      promulgated under the Exchange Act;

            

    

     

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              (ii)                                
      any sale, lease, exchange, transfer, license, acquisition or
      disposition of any business or businesses or assets that constitute or
      account for: (i) 15% or more of the consolidated net revenues of a
      Party and its Subsidiaries, taken as a whole, consolidated net income of a
      Party and its Subsidiaries, taken as a whole, or consolidated book value
      of the assets of a Party and its Subsidiaries, taken as a whole; or
      (ii) 15% or more of the fair market value of the assets of a Party
      and its Subsidiaries, taken as a whole;
or

            

    

    
      	
               
      

            	
               

            

    

    
      	
               
      

            	
              (iii)                             
      any liquidation or dissolution of a
  Party.

            

    

    
      	
               
      

            	
               

            

    

    
      	
               
      

            	
              (b)                               
      For purposes of this Agreement, “Superior
      Offer” shall mean an unsolicited bona fide written offer made to a
      Party or any of its Subsidiaries by a third party to enter into (i) a
      merger, consolidation, amalgamation, share exchange, business combination,
      issuance of securities, acquisition of securities, reorganization,
      recapitalization, tender offer, exchange offer or other similar
      transaction as a result of which either (A) the Party’s stockholders
      prior to such transaction in the aggregate cease to own at least 50% of
      the voting securities of the entity surviving or resulting from such
      transaction (or the ultimate parent entity thereof) or (B) in which a
      Person or “group”
      (as defined in the Exchange Act and the rules promulgated thereunder)
      directly or indirectly acquires beneficial or record ownership of
      securities representing 50% or more of the Party’s capital stock or
      (ii) a sale, lease, exchange transfer, license, acquisition or
      disposition of any business or other disposition of at least 50% of the
      assets of the Party or its Subsidiaries, taken as a whole, in a single
      transaction or a series of related transactions that: (a) was not
      obtained or made as a direct or indirect result of a breach of (or in
      violation of) this Agreement; and (b) is on terms and conditions that
      the board of directors of the Party determines, in its reasonable, good
      faith judgment, after obtaining and taking into account such matters that
      its board of directors deems relevant following consultation with its
      outside legal counsel and financial advisor: (x) is reasonably likely
      to be more favorable, from a financial point of view, to the Party’s
      stockholders, than the terms of the transactions contemplated by the
      Merger Agreement; and (y) is reasonably capable of being consummated;
      provided, however, that any such offer shall not be deemed to be a “Superior
      Offer” if any financing required to consummate the transaction
      contemplated by such offer is not committed and is not reasonably capable
      of being obtained by such third
party.

            

    

    
      	
               
      

            	
               

            

    

    
      	
               
      

            	
              (c)                                
      Each Party agrees that neither it nor any of its Subsidiaries
      shall, nor shall it nor any of its Subsidiaries authorize or permit any of
      the officers, directors, investment bankers, attorneys or accountants
      retained by it or any of its Subsidiaries to, and that it shall use
      commercially reasonable efforts to cause its and its Subsidiaries’
      non-officer employees and other agents not to (and shall not authorize any
      of them to) directly or indirectly: (i) solicit, initiate, encourage,
      induce
      or knowingly facilitate the communication, making, submission or
      announcement of any Acquisition Proposal; (ii) furnish any
      information regarding such Party to any Person in connection with or in
      response to an Acquisition Proposal; (iii) engage in discussions or
      negotiations with any Person with respect to any Acquisition Proposal;
      (iv) approve, endorse or recommend any Acquisition Proposal; or
      (v) execute or enter into any letter of intent or similar document or
      any agreement contemplating or otherwise relating to any Acquisition
      Transaction; provided, however,
that,

            

    

     

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              (1)                                
      nothing contained in this Agreement shall prevent a Party or its
      board of directors from complying with its disclosure obligations under
      Sections 14d-9 and 14e-2 of the Exchange Act with regard to an Acquisition
      Proposal; provided, further however, that, if such disclosure has the
      substantive effect of withdrawing, modifying or qualifying the directors’
      recommendation in a manner adverse to the other Party or the adoption of
      this Agreement by the other Party’s Board of Directors, then BPOMS and
      HealthAxis each shall have the right to terminate this Agreement as set
      forth in Sections 9.1(f) and 9.1(g), respectively;
  and

            

    

    
      	
               
      

            	
               

            

    

    
      	
               
      

            	
              (2)                                
      at any time prior to the approval of the transactions contemplated
      by this Agreement by each Party’s stockholders, each Party may furnish
      nonpublic information regarding itself or its Subsidiaries to, and enter
      into discussions or negotiations with, any Person, and take any action
      otherwise prohibited by this Section 7.10(c), in response to an
      Acquisition Proposal that is submitted to such Party or any of its
      Subsidiaries by such Person (and not withdrawn) if: (A) neither such
      Party nor any Representative of such Party shall have breached this
      Section; (B) the Board of Directors of such Party concludes in good
      faith after consulting with its financial and legal advisors, that the
      Acquisition Proposal is a Superior Offer or is reasonably likely to lead
      to a Superior Offer; (C) at least two business days prior to
      furnishing any such non-public information to, or entering into
      discussions with, such Person, such Party gives the other Party written
      notice of the identity of such Person and of such Party’s intention to
      furnish non-public information to, or enter into discussions with, such
      Person; (D) such Party receives from such Person an executed
      confidentiality agreement containing provisions (including nondisclosure
      provisions, use restrictions, non-solicitation provisions, no hire
      provisions and
      “standstill” provisions) at least as favorable to such Party as
      those contained in the Non-Disclosure Agreement; and (E) concurrently
      with furnishing any such nonpublic information to such Person, such Party
      furnishes such nonpublic information to the other Party (to the extent
      such nonpublic information has not been previously furnished). Without
      limiting the generality of the foregoing, each Party acknowledges and
      agrees that, in the event any officer, director, employee, controlling
      stockholder, agent or representative (including, without limitation, any
      investment banker, attorney or accountant retained by it or any of its
      Subsidiaries) of such Party (each, a “Representative”)
      (whether or
      not such Representative is purporting to act on behalf of such Party)
      takes any action that, if taken by such Party, would constitute a breach
      of this Section by such Party, the taking of such action by such
      Representative shall be deemed to constitute a breach of this
      Section by such Party for purposes of this
  Agreement.

            

    

     

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              (d)                               
      If any Party or any Representative of such Party receives an
      Acquisition Proposal at any time prior to the Closing Date, then such
      Party shall promptly (and in no event later than one (l) business day
      after such Party becomes aware of such Acquisition Proposal) advise the
      other Party orally and in writing of such Acquisition Proposal (including
      the identity of the Person making or submitting such Acquisition Proposal,
      and the terms thereof). Such Party shall keep the other Party fully
      informed with respect to the status and terms of any such Acquisition
      Proposal and any modification or proposed modification
      thereto.

            

    

    
      	
               
      

            	
               

            

    

    
      	
               
      

            	
              (e)                                
      Each Party shall immediately cease and cause to be terminated any
      existing discussions with any Person that relate to any Acquisition
      Proposal as of the date of this
Agreement.

            

    

    
      	
               
      

            	
               

            

    

    
      	
               
      

            	
              (f)                                  
      Each Party shall not release or permit the release of any Person
      from, or waive or permit the waiver of any provision of or right under,
      any confidentiality, non-solicitation, no hire, “standstill”
      or similar agreement (whether entered into prior to or after the date of
      this Agreement) to which such Party is a party or under which such Party
      has any rights, and shall enforce or cause to be enforced each such
      agreement to the extent requested by the other Party. Each Party shall
      promptly request each Person that has executed a confidentiality or
      similar agreement in connection with its consideration of a possible
      Acquisition Transaction or equity investment to return to such Party all
      confidential information heretofore furnished to such Person by or on
      behalf of such Party.

            

    

    
      	
               
      

            	
               

            

    

    
      	
               
      

            	
              7.11                       
      Notice of Certain Events.

            

    

    
      	
               
      

            	
               

            

    

    Each of
BPOMS and HealthAxis shall as promptly as reasonably practicable notify the
other of: (i) any notice or other communication from any Person alleging
that the consent of such Person (or another Person) is or may be required in
connection with the transactions contemplated by this Agreement and/or that such
consent will or may be withheld or unobtainable on a timely basis or without
unreasonable effort or expense; (ii) any notice or other communication from
any governmental or regulatory agency or authority in connection with the
transactions contemplated by this Agreement; (iii) any actions, suits,
claims, investigations or proceedings commenced or threatened against, relating
to or involving or otherwise affecting such Party or any of its Subsidiaries
that, if pending on the date of this Agreement, would have been required to have
been disclosed pursuant to Section 5.9 or 6.9, as applicable, or which
relate to the consummation of the transactions contemplated by this Agreement;
and (iv) of any fact or occurrence between the date of this Agreement and
the Effective Time of which it becomes aware which makes any of its
representations and warranties contained in this Agreement untrue in any
material respect (without regard to any materiality qualification contained in
such representation
or warranty) or causes any breach of its obligations under this Agreement in any
material respect (without regard to any materiality qualification contained in
such obligation).

     

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              7.12                       
      Directors and Officers.

            

    

    
      	
               
      

            	
               

            

    

    HealthAxis
shall cause the Persons to be nominated for election to the HealthAxis
Board of Directors as BPOMS shall designate in writing prior to the filing of
the preliminary Proxy Statement (the “BPOMS
Designees”). The HealthAxis Proxy
Statement shall include a proposal that the BPOMS Designees be elected to serve
as directors of HealthAxis, subject to the condition that the Closing
Date occur within thirty (30) days of the HealthAxis Meeting.  BPOMS
will ensure that all information required to be provided in the HealthAxis Proxy
Statement regarding the BPOMS Designees is true and correct and is timely
provided to HealthAxis.  At or prior to the Effective Time, HealthAxis
shall obtain the resignations as officers (but not as employees) of all current
officers of HealthAxis, to be effective as of the Effective Time. Effective as
of the Effective Time, the Board of Directors of HealthAxis shall appoint each
of the individuals to serve as officers of HealthAxis as BPOMS shall designate
in writing prior to the filing of the preliminary Proxy Statement.

     

    
      	
               
      

            	
              7.13                       
      Indemnification and
Insurance.

            

    

    
      	
               
      

            	
               

            

    

    
      	
               
      

            	
              (a)                                
      The By-Laws and charter of each of HealthAxis and the Surviving
      Corporation shall contain the provisions with respect to indemnification
      set forth in the By-Laws and charter of each of HealthAxis and BPOMS
      respectively, which provisions shall not be amended, repealed or otherwise
      modified for a period of six (6) years from the Effective Time in any
      manner that would adversely affect the rights thereunder as of the
      Effective Time of individuals who at the Effective Time were directors,
      officers, employees or agents of HealthAxis or BPOMS, respectively, unless
      such modification is required after the Effective Time by
    law.

            

    

    
      	
               
      

            	
               

            

    

    
      	
               
      

            	
              (b)                               
      Notwithstanding the foregoing, HealthAxis and the Surviving
      Corporation do hereby agree, to the fullest extent permitted under
      applicable law or under HealthAxis’ or the Surviving Corporation’s charter
      or By-Laws, to indemnify and hold harmless, each present and former
      director, officer or employee of HealthAxis or BPOMS, as applicable, or
      any of their respective Subsidiaries (collectively, the “Indemnified
      Parties”) against any costs or expenses (including attorneys’
      fees), judgments, fines, losses, claims, damages, liabilities and amounts
      paid in settlement in connection with any claim, action, suit, proceeding
      or investigation, whether civil, criminal, administrative or
      investigative, (x) arising out of or pertaining to the negotiation,
      authorization, execution or performance of this Agreement or any document
      or agreement contemplated hereby, or the transactions contemplated hereby
      or thereby, or (y) otherwise with respect to any acts or omissions
      occurring at or prior to the Effective Time, to the same extent as
      provided in HealthAxis’ or BPOMS’ charter or By-Laws, as applicable, or
      any applicable contract or agreement as in effect on the date hereof, in
      each case for a period of six (6) years after the Effective Time. In
      the event of any such claim, action, suit, proceeding or investigation
      (whether arising before or after the Effective Time), (i) the
      Indemnified Parties may retain any counsel reasonably satisfactory
      to HealthAxis, (ii) after the Effective Time, HealthAxis shall
      advance to the Indemnified Party the reasonable fees and expenses of such
      counsel, and other reasonable costs incurred in the defense of such
      matter, and (iii) HealthAxis and the Surviving Corporation will
      cooperate in the defense of any such matter; provided, however, that
      HealthAxis and/or the Surviving Corporation shall not be liable for any
      settlement effected without its written consent (which consent shall not
      be unreasonably withheld); and provided, further, that, in the event that
      any claim or claims for indemnification are asserted or made within such
      six (6).year period, all rights to indemnification in respect of any such
      claim or claims shall continue until the disposition of any and all such
      claims. The Indemnified Parties as a group may retain only one law firm to
      represent them in each applicable jurisdiction with respect to any single
      action unless there is, under applicable standards of professional
      conduct, a conflict on any significant issue between the positions of any
      two or more Indemnified Parties, in which case each Indemnified Person
      with respect to whom such a conflict exists (or group of such Indemnified
      Persons who among them have no such conflict) may retain one separate law
      firm in each applicable
jurisdiction.

            

    

     

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              (c)                                
      This Section 7.13 shall survive the consummation of the Merger
      at the Effective Time, is intended to benefit HealthAxis, BPOMS, the
      Surviving Corporation and the Indemnified Parties, shall be binding on all
      successors and assigns of the Surviving Corporation and HealthAxis and
      shall be enforceable by the Indemnified Parties as third-party
      beneficiaries to this Agreement.

            

    

    
      	
               
      

            	
               

            

    

    
      	
               
      

            	
              (d)                               
      HealthAxis and BPOMS shall, until at least the sixth anniversary of
      the Effective Time, cause to be maintained in effect, to the extent
      available, the policies of directors’ and officers’ liability insurance
      maintained by HealthAxis and the HealthAxis Subsidiaries as of the date
      hereof (or policies of at least the same coverage and amounts containing
      terms that are not less advantageous to the insured parties) with respect
      to claims arising from facts that occurred on or prior to the Effective
      Time, including without limitation all claims based upon, arising out of,
      directly or indirectly resulting from, in consequence of, or in any way
      involving the Merger and any and all related events. In lieu of the
      purchase of such insurance by HealthAxis, HealthAxis may purchase a six
      (6) year non-cancellable extended reporting period endorsement (“Reporting
      Tail Coverage”) under HealthAxis’ existing directors’ and officers’
      liability insurance coverage, providing that such Reporting Tail Coverage
      shall extend .the directors’ and officers’ liability coverage in force as
      of the date hereof for a period of at least six years from the Effective
      Time for any claim based upon, arising out of, directly or indirectly
      resulting from, in consequence of, or any way involving acts or omissions
      occurring or prior to the Effective Time, including without limitation all
      claims based upon, arising out of, directly or indirectly resulting from,
      in consequence of, or any way involving this Agreement, all agreements
      contemplated hereby, the Merger or any and all related events. BPOMS shall
      cooperate with HealthAxis in obtaining such insurance
      coverage.

            

    

     

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              7.14                       
      Restrictions on Transfer.

            

    

    
      	
               
      

            	
               

            

    

    Subject
to the receipt of the California Permit and the continued listing of the
HealthAxis Common Stock on the Nasdaq Capital Market , each share of HealthAxis
Common or Preferred Stock to be issued hereunder shall be issued without any
legend restricting transfer of such shares except (i) as relates to
restrictions on the transfer by Affiliates of HealthAxis (following completion
of the Merger) pursuant to Rule 144 of the Securities Act, as applicable,
and (ii) any legend relating to BPOMS’ Restricted Stock while such shares
are subject to any repurchase option, risk of forfeiture or other
condition.

     

    ARTICLE
8

    CONDITIONS

     

    
      	
               
      

            	
              8.1                              
      Conditions to Each Party’s Obligation to Effect the
      Merger.

            

    

    
      	
               
      

            	
               

            

    

    The
respective obligation of each Party to effect the Merger and the other
transactions contemplated herein shall be subject to the fulfillment at or prior
to the Closing Date of the following conditions, any or all of which may be
waived, in whole or in part by the parties hereto, to the extent permitted by
applicable law:

     

    
      	
               
      

            	
              (a)                                 
      This Agreement and the transactions contemplated hereby shall have
      been approved by the requisite vote of stockholders of BPOMS and
      HealthAxis.

            

    

    
      	
               
      

            	
               

            

    

    
      	
               
      

            	
              (b)                                
      The BPOMS Pre-Merger Steps shall have been
    completed.

            

    

    
      	
               
      

            	
               

            

    

    
      	
               
      

            	
              (c)                                 
      The HealthAxis Pre-Merger Steps shall have been
      consummated.

            

    

    
      	
               
      

            	
               

            

    

    
      	
               
      

            	
              (d)                                
      BPOMS shall have entered into mutually acceptable employment
      agreements with the four (4) current senior management employees of
      HealthAxis.  Such employment agreements will become effective at the
      Effective Time and may provide that they will be assumed by HealthAxis at
      that time.

            

    

    
      	
               
      

            	
               

            

    

    
      	
               
      

            	
              8.2                              
      Conditions to Obligations of BPOMS to Effect the
      Merger.

            

    

    
      	
               
      

            	
               

            

    

    The
obligation of BPOMS to effect the Merger and to complete the BPOMS Pre-Merger
Steps shall be subject to the fulfillment at or prior to the Closing Date of the
following conditions, unless waived by BPOMS:

     

    
      	
               
      

            	
              (a)                                 
      Each of the representations and warranties of HealthAxis contained
      in this Agreement shall be true and correct as of the date of this
      Agreement and as of the Closing Date as though made on and as of the
      Closing Date, except to the extent that any changes, circumstances or
      events making such representations and warranties not true or correct
      would not, individually or in the aggregate, constitute a HealthAxis
      Material Adverse Effect (without regard to any materiality qualification
      contained in such representation or warranty), and BPOMS shall have
      received a certificate, dated the Closing Date, signed on behalf of
      HealthAxis by the Chief Executive Officer or Chief Financial Officer of
      HealthAxis to the foregoing effect.

            

    

     

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              (b)                                
      HealthAxis shall have performed or complied in all material
      respects (without regard to any materiality qualification contained in the
      covenants herein) with all agreements and covenants required by this
      Agreement to be performed or complied with by it on or prior to the
      Closing Date, and BPOMS shall have received a certificate, dated the
      Closing Date, signed on behalf of HealthAxis by the Chief Executive
      Officer or Chief Financial Officer of HealthAxis to the foregoing
      effect.

            

    

    
      	
               
      

            	
               

            

    

    
      	
               
      

            	
              (c)                                 
      From the date of this Agreement through the Effective Time, there
      shall not have occurred any change, circumstance or event concerning
      HealthAxis and the HealthAxis Subsidiaries, taken as a whole, that has had
      a HealthAxis Material Adverse Effect (it being agreed that none of the
      matters referred to in Section 6.9 of the HealthAxis Disclosure
      Letter shall be deemed to constitute a HealthAxis Material Adverse
      Effect), and BPOMS shall have received a certificate, dated the Closing
      Date, signed on behalf of HealthAxis by the Chief Executive Officer or
      Chief Financial Officer of HealthAxis to the foregoing effect to such
      officer’s knowledge.

            

    

    
      	
               
      

            	
               

            

    

    
      	
               
      

            	
              (d)                                
      The BPOMS Designees shall have been duly elected as directors of
      HealthAxis and the persons designated by BPOMS to serve as officers of
      HealthAxis shall have been duly appointed, as of the Effective
      Time.

            

    

    
      	
               
      

            	
               

            

    

    
      	
               
      

            	
              (e)                                 
      All third party consents required in order to enable HealthAxis to
      consummate the transactions contemplated hereby shall have been obtained
      on terms and conditions acceptable to
BPOMS.

            

    

    
      	
               
      

            	
               

            

    

    
      	
               
      

            	
              (f)                                   
      The HealthAxis/Tak Investor Rights Agreement, the HealthAxis/Tak
      Registration Rights Agreement, the HealthAxis/Preferred Investor Rights
      Agreement and the HealthAxis/Preferred Registration Rights Agreement shall
      have been terminated without any liability to HealthAxis, effective as of
      the Closing Date.

            

    

    
      	
               
      

            	
               

            

    

    
      	
               
      

            	
              (g)                                
      HealthAxis shall not be in default under the terms of the SVB Loan
      Agreement, HealthAxis shall be entitled to continue to draw on the working
      capital credit facility under the SVB Loan Agreement and, to the extent
      required, Silicon Valley Bank shall have consented to the consummation of
      the transactions contemplated
hereby.

            

    

    
      	
               
      

            	
               

            

    

    
      	
               
      

            	
              8.3                              
      Conditions to Obligations of HealthAxis and Merger Sub to Effect
      the Merger.

            

    

    
      	
               
      

            	
               

            

    

    The
obligations of HealthAxis and Merger Sub to effect the Merger and the HealthAxis
Pre-Merger Steps shall be subject to the fulfillment at or prior to the Closing
Date of the following conditions, unless waived by HealthAxis:

     

    
      	
               
      

            	
              (a)                                 
      Each of the representations and warranties of BPOMS contained in
      this Agreement shall be true and correct as of the date of this Agreement
      and as of the Closing Date as though made on and as of the Closing Date
      except to the extent that any changes, circumstances or events making such
      representations and warranties not true or correct would not, individually
      or in the aggregate, constitute
      a BPOMS Material Adverse Effect (without regard to any materiality
      qualification contained in such representation or warranty), and
      HealthAxis shall have received a certificate, dated the Closing Date,
      signed on behalf of BPOMS by the Chief Executive Officer or the Chief
      Financial Officer of BPOMS to the foregoing
  effect.

            

    

     

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              (b)                                
      BPOMS shall have performed or complied in all material respects
      (without regard to any materiality qualification contained in the
      covenants herein) with all agreements and covenants required by this
      Agreement to be performed or complied with by it on or prior to the
      Effective Time, and HealthAxis shall have received a certificate, dated
      the Closing Date, signed on behalf of BPOMS by the Chief Executive Officer
      or the Chief Financial Officer of BPOMS to the foregoing
      effect.

            

    

    
      	
               
      

            	
               

            

    

    
      	
               
      

            	
              (c)                                 
      From the date of this Agreement through the Effective Time, there
      shall not have occurred any change, circumstance or event, concerning
      BPOMS and the BPOMS Subsidiaries, taken as a whole, that has had a BPOMS
      Material Adverse Effect and HealthAxis shall have received a certificate,
      dated the Closing Date, signed on behalf of BPOMS by the Chief Executive
      Officer or the Chief Financial Officer of BPOMS to the foregoing
      effect.

            

    

    
      	
               
      

            	
               

            

    

    
      	
               
      

            	
              (d)                                
      All third party consents required in order to enable BPOMS to
      consummate the transactions contemplated hereby shall have been obtained
      on terms and conditions acceptable to
  HealthAxis.

            

    

    
      	
               
      

            	
               

            

    

    ARTICLE
9

    TERMINATION

     

    
      	
               
      

            	
              9.1                              
      Termination.

            

    

    
      	
               
      

            	
               

            

    

    This
Agreement may be terminated and abandoned at any time prior to the Effective
Time (whether before or after approval and adoption of this Agreement and/or
approval of the issuance of the HealthAxis Shares by the stockholders of
HealthAxis):

     

    
      	
               
      

            	
              (a)                                 
      by mutual written consent authorized by the Board of Directors of
      HealthAxis and BPOMS;

            

    

    
      	
               
      

            	
               

            

    

    
      	
               
      

            	
              (b)                                
      by either HealthAxis or BPOMS if any United States federal or state
      court of competent jurisdiction or other governmental entity shall have
      issued a final order, decree or ruling or taken any other action
      permanently restraining, enjoining or otherwise prohibiting the
      transactions contemplated by this Agreement and such order, decree, ruling
      or other action shall have become final and non-appealable, provided that
      the Party seeking to terminate shall have used its commercially reasonable
      efforts to appeal such order, decree, ruling or other
    action;

            

    

    
      	
               
      

            	
               

            

    

    
      	
               
      

            	
              (c)                                 
      by HealthAxis upon a breach of any representation, warranty,
      covenant or agreement contained in this Agreement on the part of BPOMS and
      as a result of such
      breach the conditions set forth in Section 8.3(a) or
      Section 8.3(b), as the case may be, would not then be satisfied;
      provided, that if such breach is capable of being cured by the Termination
      Date and BPOMS diligently proceeds to cure the breach, then HealthAxis
      shall not have the right to terminate this Agreement under this
      Section 9.1(c) unless such breach has not been so cured by the
      Termination Date;

            

    

     

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              (d)                                
      by BPOMS upon a breach of any representation, warranty, covenant or
      agreement contained in this Agreement on the part of HealthAxis or Merger
      Sub and as a result of such breach the conditions set forth in
      Section 8.2(a) or Section 8.2(b), as the case may be, would
      not then be satisfied; provided, that if such breach is capable of being
      cured by the Termination Date and HealthAxis diligently proceeds to cure
      the breach, then BPOMS shall not have the right to terminate this
      Agreement under this Section 9.1(d) unless such breach has not
      been so cured by the Termination
Date;

            

    

    
      	
               
      

            	
               

            

    

    
      	
               
      

            	
              (e)                                 
      by BPOMS if any of the consents referred to in paragraph
      8.2(e) hereof are not obtained prior to the Effective Time, or by
      HealthAxis if any of the consents referred to in paragraph
      8.3(d) hereof are not obtained prior to the Effective
      Time;

            

    

    
      	
               
      

            	
               

            

    

    
      	
               
      

            	
              (f)                                   
      by BPOMS or HealthAxis if (i) the Board of Directors of
      HealthAxis pursuant to Section 7.3(c) fails to make, withdraws
      or modifies adversely to BPOMS its approval or recommendation of this
      Agreement or (ii) HealthAxis enters into a definitive agreement
      providing for the implementation of a Superior Offer in accordance with
      the provisions of
Section 7.10;

            

    

    
      	
               
      

            	
               

            

    

    
      	
               
      

            	
              (g)                                
      by BPOMS or HealthAxis if (i) the Board of Directors of BPOMS
      pursuant to Section 7.2(a) fails to make, withdraws or modifies
      adversely to HealthAxis its approval or recommendation of this Agreement
      or (ii) BPOMS enters into a definitive agreement providing for the
      implementation of a Superior Offer in accordance with the provisions of
      Section 7.10;

            

    

    
      	
               
      

            	
               

            

    

    
      	
               
      

            	
              (h)                                
      by either HealthAxis or BPOMS, if the Merger shall not have been
      consummated on or before December 31, 2008 (“Termination
      Date”) (other than due to the failure of the Party seeking to
      terminate this Agreement to perform its obligations under this Agreement
      required to be performed by it at or prior to the Effective Time, a breach
      by such Party of this Agreement or the failure of such Party to satisfy
      the conditions precedent to the other Party’s obligation to effect the
      Merger);

            

    

    
      	
               
      

            	
               

            

    

    
      	
               
      

            	
              (i)                                    
      by HealthAxis or BPOMS if this Agreement and the transactions
      contemplated hereby shall have failed to receive the requisite vote for
      approval and adoption by the common stockholders of
      HealthAxis or BPOMS upon the execution of a written consent or the holding
      of a duly convened stockholders meeting and any adjournments
      thereof;

            

    

     

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              (j)                                    
      by HealthAxis if BPOMS suffers a BPOMS Material Adverse Effect, or
      by BPOMS if HealthAxis suffers a HealthAxis Material Adverse Effect (it
      being agreed that none of the matters referred to in Section 6.9 of
      the HealthAxis Disclosure Letter shall be deemed to constitute a
      HealthAxis Material Adverse Effect);
or

            

    

    
      	
               
      

            	
               

            

    

    
      	
               
      

            	
              (k)                                 
      by either Party, if the other Party becomes unable to pay its
      liabilities as they come due or seeks protection under any bankruptcy,
      receivership, trust deed, creditors arrangement, composition or comparable
      proceeding, or if any such proceeding is instituted against such other
      Party (and not dismissed within sixty (60)
  days).

            

    

    
      	
               
      

            	
               

            

    

    The right
of any Party hereto to terminate this Agreement pursuant to this
Section 9.1 shall remain operative and in full force and effect regardless
of any investigation made by or on behalf of any Party hereto, any Person
controlling any such Party or any of their respective employees, officers,
directors, agents, representatives or advisors, whether prior to or after the
execution of this Agreement.

     

    
      	
               
      

            	
              9.2                              
      Effect of Termination.

            

    

    
      	
               
      

            	
               

            

    

    In the
event of the termination and abandonment of this Agreement pursuant to
Section 9.1 hereof, this Agreement shall forthwith become void and have no
effect, without any liability on the part of any Party hereto or its affiliates,
directors, officers or stockholders and all rights and obligations of any Party
hereto shall cease except for the agreements contained in this Section 9.2
(Effect of Termination), Section 9.3 (Expenses and Termination Fees),
Section 9.4 (Extension; Waiver) and Section 10.5 (Confidentiality);
provided, however, that nothing contained in this Section 9.2 shall relieve
any Party from liability for any breach of this Agreement.

     

    
      	
               
      

            	
              9.3                              
      Expenses and Termination
Fee.

            

    

    
      	
               
      

            	
               

            

    

    
      	
               
      

            	
              (a)                                 
      Except as set forth in this Section 9.3, all fees and expenses
      incurred in connection with this Agreement and the transactions
      contemplated hereby shall be paid by the Party incurring such expenses,
      whether or not the Merger is consummated and irrespective of the failure
      of any closing condition set forth in Article 8 hereof to be
      met.

            

    

    
      	
               
      

            	
               

            

    

    
      	
               
      

            	
              (b)                                
      BPOMS shall pay as and when requested all fees and expenses
      incurred by HealthAxis in listing the HealthAxis Shares on the Nasdaq
      Capital Market in connection with the Merger and in connection with the
      substitute listing for the Reverse
Split.

            

    

    
      	
               
      

            	
               

            

    

    
      	
               
      

            	
              (c)                                 
      HealthAxis shall pay BPOMS a termination fee of $500,000, upon the
      termination of this Agreement by BPOMS pursuant to
      Section 9.1(d) or upon termination of this Agreement by BPOMS or
      HealthAxis pursuant to
Section 9.1(f).

            

    

     

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              (d)                                
      BPOMS shall pay HealthAxis a termination fee of $500,000 upon the
      termination of this Agreement by HealthAxis pursuant to
      Section 9.1(c) or upon termination of this Agreement by
      HealthAxis or BPOMS pursuant to
  Section 9.1(g).

            

    

    
      	
               
      

            	
               

            

    

    
      	
               
      

            	
              (e)                                 
      If either Party fails to pay when due any amount payable by such
      Party under Section 9.3, then (i) such Party shall reimburse the
      other Party for reasonable costs and expenses (including reasonable fees
      and disbursements of counsel) incurred in connection with the collection
      of such overdue amount and the enforcement by the other Party of its
      rights under this Section 9.3, and (ii) such Party shall pay to
      the other Party interest on such overdue amount (for the period commencing
      as of the date such overdue amount was originally required to be paid and
      ending on the date such overdue amount is actually paid to the other Party
      in full) at a rate per annum equal to the “prime
      rate” (as announced by Bank of America or any successor thereto) in
      effect on the date such overdue amount was originally required to be
      paid.

            

    

    
      	
               
      

            	
               

            

    

    
      	
               
      

            	
              (f)                                   
      Subject to Section 9.3(g), the remedy set forth in
      Section 9.3(c) shall be BPOMS’ exclusive remedy in the event of
      the termination of this Agreement on a basis specified therein, and the
      remedy set forth in Section 9.3(d) shall be HealthAxis’
      exclusive remedy in the event of the termination of this Agreement on a
      basis specified therein.

            

    

    
      	
               
      

            	
               

            

    

    
      	
               
      

            	
              (g)                                
      BPOMS, HealthAxis and Merger Sub each acknowledges that the
      agreements contained in this Section 9.3 are an integral part of the
      transactions contemplated by this Agreement and that the amounts payable
      hereunder are not a penalty, but rather are liquidated damages in a
      reasonable amount that will compensate the aggrieved party for the efforts
      and resources expended and opportunities foregone while negotiating this
      Agreement and in reliance on this Agreement and on the expectation of the
      consummation of the transactions contemplated hereby, and for losses and
      damages likely to be incurred or suffered as a result of termination in
      the circumstances described in this Section 9.3, which amounts would
      otherwise be impossible to calculate with precision. In the event that a
      Party hereto shall fail to pay an amount specified under this
      Section 9.3 when due, the costs and expenses actually incurred or
      accrued by the Party entitled thereto shall also be paid by the Party
      failing to pay the specified amount when due.  Payment of the fees
      and expenses described in this Section 9.3 shall not be in lieu of
      any damages incurred in the event of willful breach of this
      Agreement.

            

    

    
      	
               
      

            	
               

            

    

    
      	
               
      

            	
              9.4                              
      Extension; Waiver.

            

    

    
      	
               
      

            	
               

            

    

    At any
time prior to the Effective Time, any Party hereto, by action taken by its Board
of Directors, may, to the extent legally allowed, (a) extend the time for
the performance of any of the obligations or other acts of the other Party,
(b) waive any inaccuracies in the representations and warranties made to
such Party contained herein or in any document delivered pursuant hereto and
(c) waive compliance with any of the agreements or conditions for the
benefit of such Party contained herein. Any agreement on the part of a Party
hereto to any such extension or waiver shall be valid only if set forth in an
instrument in writing signed on behalf of such Party.

     

    86

    
      
         

      

      
         

        
          

        

      

      
         

      

    

     

    ARTICLE
10

    GENERAL
PROVISIONS

     

    
      	
               
      

            	
              10.1                       
      Nonsurvival of Representations, Warranties and
      Agreements.

            

    

    
      	
               
      

            	
               

            

    

    The
representations and warranties of HealthAxis, Merger Sub, and BPOMS contained in
this Agreement or any certificate or instrument delivered pursuant to this
Agreement shall terminate at the Effective Time, and only the covenants that by
their terms survive the Effective Time and this Article 10 shall survive
the Effective Time.

     

    
      	
               
      

            	
              10.2                       
      Notices.

            

    

    
      	
               
      

            	
               

            

    

    Any
notice required to be given hereunder shall be in writing and shall be sent by
facsimile transmission (confirmed by any of the methods that follow), courier
service (with proof of service), hand delivery or certified or registered mail
(return receipt requested and first class postage prepaid) and addressed as
follows:

     

    If to
BPOMS:

     

    BPO
Management Services Inc.

    1290 N.
Hancock St.

    Suite 202

    Anaheim,
California    92807

    Attn:
Chief Executive Officer

    Tel.:
(714) 974.2670

    Fax:
(714) 970.1342

     

    With a
copy to (which shall not constitute notice):

     

    Cornman &
Swartz

    19800
MacArthur Blvd., Suite 820

    Irvine,
CA 92612

    Attn:
Jack T. Cornman, Esq.

    Tel.:
(949) 224-1500

    Fax:
(949) 224-1505

     

    and

     

    If to
HealthAxis and Merger Sub:

     

    HealthAxis
Inc.

    7301
North State Highway 161, Suite 300

    Irving,
Texas  75039

    Attn: 
Chief Executive Officer

    Tel.: 
972-443-5223

    Fax: 
972-409-0977

     

    87

    
      
         

      

      
         

        
          

        

      

      
         

      

    

     

    With
copies to (which shall not constitute notice):

     

    HealthAxis
Inc.

    7301
North State Highway 161, Suite 300

    Irving,
Texas  75039

    Attn: 
General Counsel

    Tel.: 
972-443-5241

    Fax: 
972-409-0977

     

    Locke
Lord Bissell & Liddell LLP

    2200 Ross
Avenue, Suite 2200

    Dallas,
Texas  75201

    Attn: 
John B. McKnight, Esq.

    Tel.: 
214-740-8675

    Fax: 
214-756-8675

     

    or to
such other address as any Party shall specify by written notice so given, and
such notice shall be deemed to have been delivered as of the date
received.

     

    
      	
               
      

            	
              10.3                       
      Assignment; Binding Effect;
Benefit.

            

    

    
      	
               
      

            	
               

            

    

    Neither
this Agreement nor any of the rights, interests or obligations hereunder shall
be assigned by any of the parties hereto (whether by operation of law or
otherwise) without the prior written consent of the other parties. Subject to
the preceding sentence, this Agreement shall be binding upon and shall inure to
the benefit of the parties hereto and their respective successors and assigns.
Notwithstanding anything contained in this Agreement to the contrary, nothing in
this Agreement, expressed or implied, is intended to confer on any Person other
than the parties hereto or their respective heirs, surviving corporations,
executors, administrators and assigns any rights, remedies, obligations or
liabilities under or by reason of this Agreement.

     

    
      	
               
      

            	
              10.4                       
      Entire Agreement.

            

    

    
      	
               
      

            	
               

            

    

    This
Agreement, the BPOMS Disclosure Letter, the HealthAxis Disclosure Letter, the
Schedules, the Exhibits and any documents delivered by the parties in connection
herewith constitute the entire agreement among the Parties with respect to the
subject matter hereof and supersede all prior agreements and understandings
among the parties with respect thereto, except that the Non-Disclosure Agreement
(as hereinafter defined) shall remain in effect and shall be binding upon
HealthAxis and BPOMS in accordance with its terms. No addition to or
modification of any provision of this Agreement shall be binding upon any Party
hereto unless made in writing and signed by all parties hereto.

     

    
      	
               
      

            	
              10.5                       
      Confidentiality.

            

    

    
      	
               
      

            	
               

            

    

    HealthAxis
and BPOMS understand and agree that they are and shall remain bound by and
subject to the terms of the non-disclosure agreement, dated as of
February 8, 2008, by and between HealthAxis and BPOMS (the “Non-Disclosure
Agreement”), regardless of any termination of this
Agreement.

     

    88

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    
      	
               
      

            	
               

            

    

    
      	
               
      

            	
              10.6                       
      Amendment.

            

    

    
      	
               
      

            	
               

            

    

    This
Agreement may be amended by the parties hereto, by action taken by their
respective authorized Person, Persons or governing bodies, at any time before or
after approval of matters presented in connection with the Merger by the
stockholders of BPOMS and HealthAxis, but after any such stockholder approval,
no amendment shall be made which by law requires the further approval of
stockholders without obtaining such further approval. This Agreement may not be
amended except by an instrument in writing signed on behalf of each of the
parties hereto.

     

    
      	
               
      

            	
              10.7                       
      Governing Law; Attorneys’
Fees.

            

    

    
      	
               
      

            	
               

            

    

    
      	
               
      

            	
              (a)                                 
      This Agreement shall be governed by and construed in accordance
      with the laws of the State of Delaware without regard to its rules of
      conflict of laws. Each of HealthAxis and BPOMS hereby irrevocably and
      unconditionally consent to submit to the exclusive jurisdiction of the
      courts of the State of Delaware and the United States of America located
      in the State of Delaware (the “Delaware
      Courts”) for any litigation arising out of or relating to this
      Agreement and the transactions contemplated hereby (and agree not to
      commence any litigation relating thereto except in such courts), consent
      to the service of process in such Delaware Courts, waive any objection to
      the laying of venue of any such litigation in the Delaware Courts and
      agree not to plead or claim in any Delaware Court that such litigation
      brought therein has been brought in any inconvenient
  forum.

            

    

    
      	
               
      

            	
               

            

    

    
      	
               
      

            	
              (b)                                
      In any action at law or suit in equity to enforce this Agreement or
      the rights of any Parties under this Agreement, the prevailing Party in
      such action or suit shall be entitled to receive a reasonable sum for its
      attorney’s fees and all other reasonable costs and expenses incurred in
      such action or suit.

            

    

    
      	
               
      

            	
               

            

    

    
      	
               
      

            	
              10.8                       
      Counterparts.

            

    

    
      	
               
      

            	
               

            

    

    This
Agreement may be executed by the parties hereto in separate counterparts, each
of which so executed and delivered shall be an original, but all such
counterparts shall together constitute one and the same instrument. Each
counterpart may consist of a number of copies hereof each signed by less than
all, but together signed by all of the parties hereto. In the event that any
signature is delivered by facsimile transmission, such signature shall create a
valid and binding obligation of the Party executing (or on whose behalf such
signature is executed) the same with the same force and effect as if such
facsimile signature were the original thereof.

     

    
      	
               
      

            	
              10.9                       
      Headings.

            

    

    
      	
               
      

            	
               

            

    

    Headings
of the Articles and Sections of this Agreement are for the convenience of the
parties only, and shall be given no substantive or interpretive effect
whatsoever.

     

    
      	
               
      

            	
              10.10                
      Waivers.

            

    

    
      	
               
      

            	
               

            

    

    Except as
provided in this Agreement, no action taken pursuant to this Agreement,
including, without limitation, any investigation by or on behalf of any Party,
shall be deemed to

     

    89

    
      
         

      

      
         

        
          

        

      

      
         

      

    

     

    constitute
a waiver by the Party taking such action of compliance with any representations,
warranties, covenants or agreements contained in this Agreement. The waiver by
any Party hereto of a breach of any provision hereunder shall not operate or be
construed as a waiver of any prior or subsequent breach of the same or any other
provision hereunder.

     

    
      	
               
      

            	
              10.11                
      Incorporation.

            

    

    
      	
               
      

            	
               

            

    

    The BPOMS
Disclosure Letter and the HealthAxis Disclosure Letter and all Schedules
attached hereto and thereto and referred to herein and therein are hereby
incorporated herein and made a part hereof for all purposes as if fully set
forth herein.

     

    
      	
               
      

            	
              10.12                
      Severability.

            

    

    
      	
               
      

            	
               

            

    

    Any term
or provision of this Agreement which is invalid or unenforceable in any
jurisdiction shall, as to that jurisdiction, be ineffective to the extent of
such invalidity or unenforceability without rendering invalid or unenforceable
the remaining terms and provisions of this Agreement or affecting the validity
or enforceability of any of the terms or provisions of this Agreement in any
other jurisdiction. If any provision of this Agreement is so broad as to be
unenforceable, the provision shall be interpreted to be only so broad as is
enforceable.

     

    
      	
               
      

            	
              10.13                
      Interpretation.

            

    

    
      	
               
      

            	
               

            

    

    
      	
               
      

            	
              (a)                                 
      In this Agreement, unless the context otherwise requires, words
      describing the singular number shall include the plural and vice versa,
      and words denoting any gender shall include all
  genders.

            

    

    
      	
               
      

            	
               

            

    

    
      	
               
      

            	
              (b)                                
      As used in this Agreement, the word “Subsidiary”
      or “Subsidiaries”
      when used with respect to any Party means any corporation, partnership,
      joint venture, business trust or other entity, of which such Party
      directly or indirectly owns or controls at least a majority of the
      securities or other interests having by their terms ordinary voting power
      to elect a majority of the board of directors or others performing similar
      functions with respect to such corporation or other
      organization.

            

    

    
      	
               
      

            	
               

            

    

    
      	
               
      

            	
              (c)                                 
      As used in this Agreement, the word “Person”
      means an individual, a corporation, a partnership, an association, a joint
      stock company, a trust, a limited liability company, any unincorporated
      organization or any other entity.

            

    

    
      	
               
      

            	
               

            

    

    
      	
               
      

            	
              (d)                                
      As used in this Agreement unless otherwise indicated, the word
      “Affiliate”
      shall have the meaning set forth in Rule 12b-2 of the Exchange
      Act.

            

    

    
      	
               
      

            	
               

            

    

    
      	
               
      

            	
              10.14                
      Specific Performance.

            

    

    
      	
               
      

            	
               

            

    

    The
parties hereto agree that if any of the provisions of this Agreement were not
performed in accordance with their specific terms or were otherwise breached,
irreparable damage would occur, no adequate remedy at law would exist, and
damages would be difficult to determine, and that the parties shall be entitled
to specific performance of the terms hereof, without the posting of any bond
whatsoever in addition to any other remedy at law or equity.

     

    90

    

      
        
           

        

        
           

          
            

          

        

        
           

        

      

     

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

     

    
      	 
      	
              HEALTHAXIS,
      INC.

            
	 
      	 
      
	 
      	 
      
	 
      	
              Per:

            	
              /s/
      John M. Carradine

            
	 
      	 
      
	 
      	 
      
	 
      	
              Per:

            	
              CEO
      and President

            
	 
      	 
      
	 
      	 
      
	 
      	
              OUTSOURCING
      MERGER SUB, INC.

            
	 
      	 
      
	 
      	 
      
	 
      	
              Per:

            	
              /s/
      John M. Carradine

            
	 
      	 
      
	 
      	 
      
	 
      	
              Per:

            	
              President

            
	 
      	 
      
	 
      	 
      
	 
      	
              BPO MANAGEMENT SERVICES,
      INC.

            
	 
      	 
      
	 
      	 
      
	 
      	
              Per:

            	
              /s/
      Patrick Dolan

            
	 
      	 
      
	 
      	 
      
	 
      	
              Per:

            	
              Chairman
      and CEO

            

    

     

     

     

     

     

     

    91

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