EX-10.3 5 a08-23140_1ex10d3.htm EX-10.3

Exhibit 10.3

 

LEWIS WARRANT TERMINATION AGREEMENT

 

This Lewis Warrant Termination Agreement (this “Agreement”), dated as of the 25th day of July, 2008, is entered into by and between HealthAxis Inc., a Pennsylvania corporation (“Company”), and Lewis Opportunity Fund, LP, a Delaware (“Warrant Holder”).

 

Recitals

 

WHEREAS, on June 30, 2004, Company issued Warrant No. 2004-01 to Brown Simpson Partners I, Ltd. (“Brown Simpson”) to purchase 490,306 shares of Company’s common stock (the “Warrant”);

 

WHEREAS, pursuant to that certain Warrant Purchase Agreement dated as of July 31, 2006, by and between Brown Simpson and Warrant Holder, Brown Simpson sold to Warrant Holder all of its rights and interests in the Warrant;

 

WHEREAS, Company, BPO Management Services, Inc., a Delaware corporation (“BPOMS”), and Outsourcing Merger Sub, Inc., a Delaware corporation (“Merger Sub”), are parties to that certain Agreement and Plan of Merger dated of even date herewith (the “Merger Agreement”), pursuant to which it is expected that BPOMS and Merger Sub will merge, BPOMS will become a wholly-owned subsidiary of Company and Company will issue shares of its capital stock to the stockholders of BPOMS, all as more particularly described in the Merger Agreement (the “Merger”);

 

WHEREAS, it is a condition to BPOMS’ execution of the Merger Agreement that Company and Warrant Holder enter into this Agreement; and

 

WHEREAS, subject to and in the event of the consummation of the Merger, Company and Warrant Holder desire to provide for the cancellation and termination of the Warrant in consideration of the anticipated benefits to be received by Company and Warrant Holder as a result of the consummation of the Merger.

 

NOW THEREFORE, in consideration of the mutual covenants hereinafter set forth and for other good and valuable consideration, the parties hereto do hereby agree as follows:

 

1.               Cancellation and Termination of Warrant.  Warrant Holder and Company do hereby agree that the Warrant shall automatically be cancelled and terminated without any further action by any party thereto effective as of the date of consummation of the Merger.

 

2.               Representations and Agreements.

 

(a)                                  Each of Company and Warrant Holder represents and warrants to the other that (i) it is an entity duly organized, validly existing and in good standing under the laws of its jurisdiction of organization, (ii) it has all requisite power and authority to enter into this Agreement and to perform its obligations hereunder, (iii) the execution and delivery of this Agreement and the performance of its obligations hereunder have been duly authorized by all necessary actions on its part, and (iv) this Agreement has been duly executed and delivered by it,

 


 

and assuming due authorization, execution and delivery by the other, constitutes a valid and binding agreement of it, enforceable against it in accordance with the terms of this Agreement, except as enforcement may be subject to or limited by bankruptcy, insolvency, reorganization, moratorium or other laws now or hereafter in effect affecting creditors’ rights generally and the effect of general principles of equity.

 

(b)                                 Each of Company and Warrant Holder represents and warrants to the other that (i) neither the execution and delivery of this Agreement nor the performance by it of its obligations hereunder will result in a violation of, or a default under, or conflict with, its governing documents or any contract, trust, commitment, agreement, understanding, arrangement or restriction of any kind to which it is a party or by which it is bound, except as would not prevent, delay or otherwise materially impair its ability to perform its obligations hereunder.

 

(c)                                  Warrant Holder hereby represents and warrants to Company that it has complete ownership and good title to the Warrant, free and clear of all liens or any encumbrances, and that it has not transferred or attempted to transfer the Warrant to any other party.  Warrant Holder further hereby represents and warrants to Company that it has reviewed and evaluated all statements, reports and other documents filed by Company with the Securities and Exchange Commission, that it has reviewed and evaluated the terms of the Merger Agreement and all documents, agreements, schedules and exhibits contemplated thereby, and that it has had the opportunity to request and has received any and all further information relating to Company, the Merger and any other relevant matters that it has requested.

 

(d)                                 Warrant Holder agrees that during the term of this Agreement it shall not sell, pledge, assign or otherwise transfer or attempt to transfer the Warrant to any other party.

 

3.               Release of Claims. For the purposes and consideration set forth herein, and subject to and effective with the cancellation and termination of the Warrant, each of Warrant Holder and Company hereby releases and discharges the other and its respective affiliates, shareholders, subsidiaries, owners, directors, officers, agents, attorneys, employees, trustees, independent contractors, successors and assigns of and from any and all charges, complaints, liabilities, obligations, restrictions, debts, promises, agreements, controversies, damages, actions, losses, expenses (including attorneys’ fees and costs), claims, rights, demands, causes of action or suits in equity, of any and every kind or character, in contract or tort, whether known or unknown, arising under, relating to or in connection with the Warrant.

 

4.               Agreement Subject to Consummation of Merger. Notwithstanding anything contained herein, this Agreement shall terminate and shall be null and void and of no further legal effect upon the termination of the Merger Agreement in accordance with its terms.

 

5.               Governing Law. This Agreement shall be governed, construed and interpreted in accordance with the internal substantive laws of the Commonwealth of Pennsylvania, without giving effect to the principles of conflicts of law of such jurisdiction.

 

6.               Binding Effect. This Agreement shall be binding on and inure to the benefit of the parties and their respective successors and assigns.

 

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7.               Entire Agreement. The Warrant and this Agreement represent the entire agreement between the parties with respect to the subject matter thereof and hereof and may not be contradicted by evidence of prior, contemporaneous or subsequent oral agreements of the parties. There are no unwritten agreements between the parties as to the subject matter hereof.

 

8.               Modification.  This Agreement may be modified only by a written agreement signed by both parties hereto.

 

9.               Multiple Counterparts. This Agreement may be executed in any number of counterparts, each of which for all purposes is to be deemed an original, but all of which shall constitute, collectively, one agreement.

 

[signature page is attached]

 

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IN WITNESS WHEREOF, the undersigned have executed this Lewis Warrant Termination Agreement as of the date written above.

 

 

Lewis Opportunity Fund, LP

 

 

 

By:

/s/ W. Austin Lewis

 

 

Name: W. Austin Lewis

 

 

Title: General Partner

 

 

 

 

 

HealthAxis Inc.

 

 

 

 

By:

John M. Carradine

 

 

Name: John M. Carradine

 

 

Title: CEO and President

 

 

Dated: September 5, 2008

 

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