<PAGE>
FOR IMMEDIATE RELEASE:
HEALTHAXIS.COM TO SELL RETAIL WEB SITE IN
COMPREHENSIVE ACQUISITION AND STRATEGIC ALLIANCE
PACT WITH DIGITAL INSURANCE
HealthAxis.com Receives Cash, Stock, Licensing Fees and a Technology Services
Contract
HealthAxis.com Focuses on Its Application Solutions Group to Service Healthcare
Payers
East Norriton, Pennsylvania/Atlanta, Georgia--July 6, 2000--HealthAxis.com--a
subsidiary of HealthAxis Inc. (NASDAQ: HAXS) and the proven leader in
web-enabling healthcare payers--and Digital Insurance--an Internet distribution
channel for web-enabled insurance carriers focused primarily on the small and
medium group markets--today announced that Digital Insurance will acquire
HealthAxis.com's retail web site and related assets. Under the terms of the
agreement, Digital Insurance, a company whose financial partners include
Internet HealthCare Group and Capital Z Partners, will acquire assets that
include: intellectual property of the presentation layer of the web site,
certain hard assets, and HealthAxis.com's existing block of in-force insurance
business.
HealthAxis.com will receive a cash payment, ongoing licensing fees, a technology
services contract, and equity in Digital Insurance. Following the completion of
the transaction, HealthAxis.com will be focused exclusively on providing
Internet connectivity technology solutions and enterprise application
integration services to both healthcare payers and those entities involved in
the digital distribution of health insurance. HealthAxis.com will have
completely exited the consumer retail business and will henceforth service this
market only as a provider of back-end technology services and developer of
customized presentation software for eDistribution partners.
The agreement stipulates that Digital Insurance will pay HealthAxis $1 million
in cash at closing, which is scheduled to occur on or about August 15th, and $3
million in software licensing fees in quarterly payments over a 30-month period.
In addition, the parties have entered into a technology services contract, for a
minimum of $3 million in fees over the next 12 months, in which HealthAxis.com
will provide the critical back-end technology solutions to power Digital
Insurance's health insurance e-platform. The agreement further stipulates that
HealthAxis.com will receive an 11 percent ownership stake in Digital Insurance.
"We are now able to focus exclusively on providing carriers and eDistribution
intermediaries with the connectivity tools that they will need to survive in the
digital insurance world," said Michael Ashker, chief executive officer of
HealthAxis.com. "This takes us a giant step forward in establishing our
connectivity platform as the most universal and carrier-friendly solution
available today. We are thrilled to be aligned with Digital Insurance and have a
strong vested interest in making them a highly successful online distribution
company."
--more--
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Digital Insurance/HealthAxis.com Acquisition
July 6, 2000
Page 2 of 3
As a result of the transaction, HealthAxis.com will drastically decrease its
expenses while substantially increasing its revenues. "During our most recent
conference call we suggested that we were on track to be cash flow positive by
the second quarter of 2001," said Ashker. "We are confident that we can
accelerate the time line to achieve this sooner than originally anticipated."
"Our purchase of HealthAxis.com's retail web site and its next generation web
site enables us to significantly ramp-up the pace of our platform's development
and release," said Tom Usilton, chief executive officer of Digital Insurance.
"We believe we are buying the most technologically-advanced e-commerce platform
for the health insurance industry, and partnering with the market's leading
technology provider. HealthAxis.com's XML-based solutions will enable us to
rapidly integrate carriers in a timely and cost-efficient manner, while
dramatically accelerating the ramp-up of our business model. Small and
medium-sized employers need a point-to-point solution when buying health--and
other--insurance on the Internet. The HealthAxis.com transaction and related
services contract will allow Digital Insurance to provide those employers that
opportunity."
In the transaction, HealthAxis.com will sell its retail web site-related assets
to Digital Insurance. Included among these assets are the intellectual property
supporting the present and next generation HealthAxis.com retail web site,
carrier partner distribution agreements, affinity partner and pre-paid portal
distribution agreements, select furniture, fixtures, and equipment presently in
HealthAxis.com's East Norriton office, and all of the in-force insurance
business. The intellectual property transfer of HealthAxis.com's proprietary
retail platform presentation layer is specifically for its application over the
Internet and is subject to certain carve-outs, for which HealthAxis.com retains
ownership.
About HealthAxis Inc.
HealthAxis.com, a subsidiary of HealthAxis Inc., is the proven leader in
web-enabling healthcare payers and those entities involved in the digital
distribution of health insurance. The Company's proprietary workflow and
business application software, built around an application service provider
model, enables healthcare payers--carriers, third party administrators, and
large, self-funded groups--to more efficiently capture, process, and share
health plan data over the Internet. The Company's eDistribution Group provides
healthcare payers and those entities involved in the digital distribution of
health insurance with a fully functional Internet platform for the distribution
of health insurance products to the individual, small group, and large group
markets, both on a direct basis and through existing intermediaries such as
agents, affinity relationships and benefits consulting firms. HealthAxis.com is
headquartered in suburban Philadelphia, with significant operations in Dallas,
as well as offices in eight additional locations both domestic and abroad. The
company employs over 350 IT professionals.
About Digital Insurance, Inc.
Digital Insurance is an on-line distribution channel for web-enabled insurance
carriers. The Company provides insurance distribution and administrative
functions, including enrollment, to small and medium group employers. Digital
Insurance is headquartered in Atlanta, Georgia, with operations in McLean,
Virginia. Its capital partners are Internet HealthCare Group and Capital Z
Partners.
--more--
<PAGE>
Digital Insurance/HealthAxis.com Acquisition
July 6, 2000
Page 3 of 3
Safe Harbor Statement
Under the Private Securities Litigation Reform Act of 1995:
Certain statements made by the Companies, which are not historical facts may be
considered forward-looking statements, including, without limitation, statements
as to trends, management's beliefs, expectations, forecasts and opinions, which
are based upon a number of assumptions concerning future conditions that
ultimately may prove to be inaccurate. Such forward-looking statements are
subject to risks and uncertainties and may be affected by various factors, which
may cause actual results to differ materially from those in the forward-looking
statements. For further information, which could cause actual results to differ
from the Companies' expectations as well as other factors, which could affect
the Companies' financial statements, please refer to HealthAxis Inc.'s reports
filed with the Securities and Exchange Commission and the appropriate company
contact listed below for Digital Insurance.
###
HealthAxis
Investor Contact: Media Contact:
Steve Kaplan Jennifer Messmer
610-275-3800 610-278-5358
[email protected] [email protected]
Digital Insurance
Media Contact:
Teresa Hennessee
(404) 531-9933
[email protected]
