HEALTHAXIS INC
EXHIBIT 10.9
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<TYPE>EX-10.9
<SEQUENCE>10
<FILENAME>0010.txt
<DESCRIPTION>EXHIBIT 10.9
<TEXT>


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                               September 28, 2000



HealthAxis, Inc.
2500 DeKalb Pike
East Norriton, Pennsylvania  19401
Attention:  Board of Directors

Gentlemen:

         This letter will set forth the mutual understanding of HealthAxis.com,
Inc., a Pennsylvania corporation ("HA.com") and HealthAxis, Inc., a Pennsylvania
corporation ("HAI"), concerning the terms and conditions of certain financing
accommodations to be extended by HA.com to HAI.

1. Secured Revolving Line of Credit.

    1.1. From and including the date hereof to but not including the Termination
         Date, HA.com agrees, on the terms and conditions set forth in this
         Agreement, to make loans ("Revolving Credit Loans") to HAI from time to
         time in an aggregate amount not to exceed $1,100,000 at any one time
         outstanding (the "Aggregate Commitment"). For purposes hereof, the
         "Termination Date" shall mean the first to occur of (a) March 31, 2001
         or (b) effectiveness of the Reorganization contemplated by that certain
         Amended and Restated Agreement and Plan of Reorganization by and
         between HA.com and HAI.

    1.2. HAI's obligation to pay the principal of, and interest on, the
         Revolving Credit Loans shall be evidenced by a Revolving Credit Note in
         the form attached hereto as Exhibit A. Although the Revolving Credit
         Note shall be dated the date of the initial Revolving Credit Loan,
         interest in respect thereof shall be payable only for the periods
         during which the Revolving Credit Loans evidenced thereby are
         outstanding and, although the stated amount of the Revolving Credit
         Note shall be in the amount of the Aggregate Commitment, the Revolving
         Credit Note shall be enforceable, with respect to HAI's obligation to
         pay the principal amount thereof, only to the extent of the unpaid
         principal amount of the Revolving Credit Loan at the time evidenced
         thereby.

    1.3. Revolving Credit Loans shall bear interest, payable in a lump sum at
         the Termination Date, at the per annum rate of 12%. Interest shall be
         computed on the basis of a year of 360 days and the actual number of
         days elapsed.

    1.4. HAI may from time to time pay, without penalty or premium, all
         outstanding Revolving Credit Loans.


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    1.5. Revolving Credit Loans shall be due and payable upon the first to occur
         of (i) the Termination Date or (ii) upon a merger, change of control or
         sale of all or substantially all of the assets of HAI.

    1.6. Revolving Credit Loans shall be secured by a perfected first security
         interest in and to shares of HA.com common stock, pledged to HA.com in
         accordance with and subject to the terms of the Stock Pledge and
         Security Agreement attached hereto as Exhibit B and made a part hereof
         (the "Security Agreement"). Upon the making of any Revolving Credit
         Loan advanced on any Funding Date, HAI shall deliver to HA.com in
         accordance with the terms of the Security Agreement a certificate or
         certificates (accompanied by an executed stock power in blank)
         representing the number of shares of HA.com common stock equal to (a)
         the amount of the Revolving Credit Loan divided by (b) 1.3 times the
         Average HAI Trading Price. All such shares of HA.com common stock so
         delivered shall be free and clear of any and all liens, claims, charges
         or encumbrances whatsoever. For purposes hereof, the "Average HAI
         Trading Price" shall mean, as of the date of funding of any Revolving
         Credit Loan, the average closing price per share of HAI common stock as
         quoted on the Nasdaq National Market (or on such other market as shares
         of HAI are then quoted) for the 10 consecutive trading days immediately
         preceding such date of funding; provided, however, that the Average HAI
         Trading Price shall be deemed to be not less than $3.00 per share and
         not greater than $5.00 per share.

    1.7  The proceeds of Revolving Credit Loans shall be used solely to fund (a)
         fees and expenses associated with the Reorganization, including legal
         fees, accounting fees, SEC registration and filing fees, investment and
         commercial banking fees, (b) interest when due on HAI's Convertible
         Debentures and (c) certain HAI operating expenses and costs through the
         close date of the Reorganization as generally described in Schedule A
         attached thereto (collectively "Permitted Uses"). HAI shall deliver
         once each month to the HAI Board of Directors and to the HA.com Board
         of Directors a schedule setting forth all such expenses and draws that
         occurred that month with appropriate detail to tie such report back to
         the cash flow projection schedule the parties used to negotiate the
         Revolving Credit Loan.

1.8  HA.com's obligations to fund the initial Revolving Credit Loans shall be
     subject to the satisfaction of the following conditions:

     1.8.1   No event shall have occurred which shall reasonably be expected to
             have a material adverse effect on the properties, business,
             operations, condition (financial or otherwise), liabilities or
             capitalization of HAI;

     1.8.2   No default or event which, with notice or lapse of time or both,
             would constitute a default shall have occurred and be then
             continuing with respect to any indebtedness of HAI, or agreement
             governing such indebtedness, then outstanding;


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         1.8.3   Each of the representations and warranties made herein by HAI
                 shall be true and correct in all respects;

         1.8.4   The parties thereto shall have executed and delivered to HA.com
                 a Subordination Agreement, substantially in the form as
                 attached hereto as Exhibit C and made a part hereof;

         1.8.5   HAI shall have executed and delivered to HA.com the Security
                 Agreement,

         1.8.6   HA.com shall have received a properly executed Borrowing
                 Certificate containing the information as prescribed in Section
                 1.10.

    1.9  HA.com's obligations to fund subsequent Revolving Credit Loans shall be
         subject to satisfaction of the following conditions:

         1.9.1   No event shall have occurred which shall reasonably be expected
                 to have a material adverse effect on the properties, business,
                 operations, condition (financial or otherwise), liabilities or
                 capitalization of HAI or its subsidiaries;

         1.9.2   No default or event which, with notice or lapse of time or
                 both, would constitute a default shall have occurred and be
                 then continuing with respect to any indebtedness of HAI, or
                 agreement governing such indebtedness, then outstanding;

         1.9.3   Each of the representations and warranties made herein by HAI
                 shall be true and correct in all respects; and


         1.9.4   HA.com shall have received a properly executed Borrowing
                 Certificate containing the information as prescribed in Section
                 1.10.

    1.10 Revolving Credit Loans shall be made in minimum draws of $25,000, upon
         notice delivered to HA.com not less than five days prior to the
         applicable funding date (the "Funding Date"). All Revolving Credit
         Loans shall be made against delivery of a written borrowing certificate
         (a "Borrowing Certificate") executed by Michael Ashker (President and
         Chief Executive Officer of HAI) or, in Mr. Ashker's absence, a majority
         of the disinterested members of the Board of Directors of HAI, which
         certificate shall set forth (a) the amount of the Revolving Credit Loan
         to be advanced on the applicable Funding Date, (b) the anticipated use
         or uses of proceeds of such Revolving Credit Loan, which uses shall
         consist solely of Permitted Uses, and (c) certify that all conditions
         to the making of such Revolving Credit Loans have been satisfied on
         such Funding Date.

    1.11 The form of Revolving Credit Note evidencing Revolving Credit Loans
         shall contain such provisions respecting defaults and remedies as are
         usual and customary in commercial financing transactions of the type
         herein described, including appropriate cross default provisions.


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2. Secured Hanover Re Loan

    2.1. Reference is made to that certain Guaranty, dated as of December 29,
         1998, as amended, among HAI, Hannover Life Reassurance Company of
         America (former Reassurance Company of Hannover) and Central Reserve
         Life Insurance Company (the "Hannover Guaranty"). Against delivery to
         HA.com of a copy of an unconditional release of HAI from any and all
         obligations under the Hannover Guaranty, HA.com agrees, on the terms
         and conditions set forth in this Agreement, to loan to HAI an amount
         equal to the lesser of (a) the difference between $4.25 million and 90%
         of the appraised value of the HAI headquarters building located in East
         Norriston, Pennsylvania, and (b) $1.0 million (the "Secured Hanover Re
         Loan").

    2.2. HAI's obligation to pay the principal of, and interest on, the Secured
         Hannover Re Loan shall be evidenced by the Secured Promissory Note in
         the form attached hereto as Exhibit D.

    2.3. The Secured Hannover Re Loan shall bear interest, payable in a lump sum
         at the Termination Date, at the per annum rate of 12%. Interest shall
         be computed on the basis of a year of 360 days and the actual number of
         days elapsed.

    2.4. HAI may from time to time pay, without penalty or premium, the Secured
         Hannover Re Loan.

    2.5. The Secured Hannover Re Loan shall be due and payable upon the first to
         occur of (i) the Termination Date or (ii) upon a merger, change of
         control or sale of all or substantially all of the assets of HAI.

    2.6. HAI may from time to time pay, without penalty or premium, the Secured
         Hannover Re Loan.


    2.7. HA.com's obligations to fund the Secured Hannover Re Loan shall be
         subject to the satisfaction of the following conditions:

         2.7.1.  No event shall have occurred which shall reasonably be expected
                 to have a material adverse effect on the properties, business,
                 operations, condition (financial or otherwise), liabilities or
                 capitalization of HAI;

         2.7.2.  No default or event which, with notice or lapse of time or
                 both, would constitute a default shall have occurred and be
                 then continuing with respect to any indebtedness of HAI, or
                 agreement governing such indebtedness, then outstanding;

         2.7.3.  Each of the representations and warranties made herein by HAI
                 shall be true and correct in all respects;


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         2.7.4.  The parties thereto shall have executed and delivered to HA.com
                 the Subordination Agreement; and

         2.7.5.  HAI shall have executed and delivered to HA.com the Security
                 Agreement.

    2.8. The Secured Hannover Re Loan shall be secured by a prior and perfected
         first security interest in and to 200,000 shares of HA.com common
         stock, pledged to HA.com in accordance with and subject to the terms of
         the Security Agreement. Upon the making of the Secured Hannover Re
         Loan, HAI shall deliver to HA.com in accordance with the terms of the
         Security Agreement a certificate or certificates (accompanied by an
         executed stock power in blank) representing 200,000 shares of HA.com
         common stock, which shares shall be free and clear of any and all
         liens, claims, charges or encumbrances whatsoever.

    2.9. The Secured Promissory Note evidencing the Secured Hannover Re Loan
         shall contain such provisions respecting defaults and remedies as are
         usual and customary in commercial financing transactions of the type
         herein described, including appropriate cross default provisions.

3. Unsecured Past Advance Loan

    3.1. HA.com has advanced to HAI from time to time to date the aggregate
         amount of One Million Three Hundred Four Thousand Five Hundred
         Eighty-Nine Dollars ($1,304,589). To evidence such advances, HAI agrees
         to execute and deliver to HA.com, upon the execution of this Agreement,
         an Unsecured Promissory Note in the form attached hereto as Exhibit E
         in the principal amount of $1,304,589.

    3.2. The Unsecured Past Advance Loan shall bear interest, payable in a lump
         sum at the Termination Date, at the per annum rate of 12%. Interest
         shall be computed on the basis of a year of 360 days and the actual
         number of days elapsed.

    3.3. HAI may from time to time pay, without penalty or premium, the
         Unsecured Past Advance Loan.

    3.4. The Promissory Note evidencing the Unsecured Past Advance Loan shall
         contain such provisions respecting defaults and remedies as are usual
         and customary in commercial financing transactions of the type herein
         described, including appropriate cross default provisions.

4. Representations and Warranties of HAI. HAI hereby represents and warrants to
   HA.com as follows:

    4.1. HAI is a corporation duly organized, validly existing and in good
         standing under the laws of the Commonwealth of Pennsylvania, and has
         full power and authority to own, lease and operate its properties and
         assets and to conduct its business as presently conducted, and to enter
         into this Agreement and to carry out the transactions contemplated by
         this Agreement.


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    4.2. The execution, delivery and performance by HAI of this Agreement have
         been duly authorized by all necessary corporate action, and this
         Agreement has been duly executed and delivered by HAI. This Agreement
         and the Notes constitute the valid and binding obligations of HAI
         legally enforceable against HAI in accordance with their respective
         terms. HAI has obtained all material consents, authorizations and
         approvals of, and has made or will make all material declarations and
         filings with, all federal and state governmental authorities required
         on the part of HAI in connection with the consummation of the
         transactions contemplated by this Agreement.

    4.3. The execution of and performance by HAI of its obligations under this
         Agreement will not violate any provision of law or governmental rule or
         regulation, and will not conflict with or result in any breach of any
         of the terms, conditions or provisions of, or constitute a default
         under (i) HAI's Certificate of Incorporation, (ii) HAI's by-laws as
         currently in effect (the "By-laws"), (iii) any judgment, decree or
         order to which HAI is bound or (iv) any agreement, contract, lease,
         indenture or other instrument to which HAI is bound.

5.  Indemnification. HAI shall indemnify and hold harmless HA.com from and
    against any losses, claims, damages or liabilities, insofar as such losses,
    claims, damages or liabilities (or actions in respect thereof) arise out of
    or are based upon (a) the falsity or incorrectness in any material respect
    as of the Closing Date of any representation or warranty of HAI contained in
    or made pursuant to Section 3 hereof, or (b) the existence of any condition,
    event or fact constituting, or which with notice or passage of time, or
    both, would constitute a default or breach in the observance of any of HAI's
    undertakings or covenants hereunder or under any of the documents executed
    in connection herewith. HAI shall also pay all attorneys' fees and costs and
    court costs incurred by HA.com in enforcing the indemnification provided for
    in this section.

6.  All notices, requests, consents and other communications provided for herein
    (except as stated in the last sentence of this section) shall be in writing,
    and shall be mailed by certified mail, postage prepaid, delivered by Federal
    Express or similar overnight courier, or personally delivered, as follows:

                  If to HAI:

                  Michael Ashker
                  President & CEO
                  HealthAxis, Inc.
                  2500 DeKalb Pike
                  East Norriton, PA 19401


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                  If to HA.com:

                  Michael Ashker
                  President & CEO
                  HealthAxis.com, Inc.
                  5215 N. O'Connor, Suite 800
                  Irving, TX 75039
                  cc: Michael G. Hankinson, General Counsel

    or such other addresses as each of the parties hereto may provide from time
    to time in writing to the other parties. For purposes of this Agreement (i)
    in the case of communications sent by mail, the date of mailing shall be
    deemed to be the delivery date and (ii) in the case of communications sent
    by overnight courier, the date next succeeding the date of transmission
    shall be deemed to be the delivery date.

7.  Modifications; Waiver. Neither this Agreement nor any provision hereof may
    be changed or waived unless effected by a writing executed and delivered by
    the parties hereto.

8.  Entire Agreement. This Agreement, including the Exhibits hereto, contain the
    entire agreements between the parties with respect to the transactions
    contemplated hereby, and supersedes all negotiations, agreements,
    representations, warranties, commitments, whether in writing or oral, prior
    to the date hereof.

9.  Execution and Counterparts. This Agreement may be executed in any number of
    counterparts, each of which when so executed and delivered shall be deemed
    an original, and such counterparts together shall constitute one instrument.

10. Governing Law and Severability. This Agreement shall be governed by the laws
    of the State of Texas as applied to agreements entered into and to be
    performed entirely within the State of Texas. In the event any provision of
    this Agreement or the application of such provision to any party shall be
    held by a court of competent jurisdiction to be contrary to law, the
    remaining provisions of this Agreement shall remain in full force and
    effect.

11. Headings. The descriptive headings of the Sections hereof and the Exhibits
    hereto are inserted for convenience only, and do not constitute a part of
    this Agreement.


                    [Rest of Page Left Intentionally Blank]


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         Please acknowledge the agreement of HAI to the foregoing by signing and
returning to the undersigned the enclosed copy of this letter.

                                             Very truly yours,


                                             HEALTHAXIS.COM, INC.


                                             By: /s/ Gregory T. Mutz
                                                 ------------------------------
                                                 Gregory T. Mutz
                                                 Chair, Special Merger Committee
                                                 Board of Directors


Agreed and acknowledged this 29th day of September 2000


    HEALTHAXIS INC.





By: /s/ Michael Ashker
    --------------------------
    Michael Ashker
    President & CEO



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