September 30, 2010 Independence Blue Cross Philadelphia, PA 19103 Re: Health Benefits Direct Board Representative and Related Matters Dear Sirs:
September
30, 2010
Independence
Blue Cross
0000
Xxxxxx Xxxxxx
Philadelphia,
PA 19103
Re: Health Benefits Direct Board
Representative and Related Matters
Dear
Sirs:
This
Letter Agreement is being executed and delivered in connection with the Initial
Closing under the Securities Purchase Agreement, dated as of the date hereof, by
and among the Health Benefits Direct Corporation (the “Company”),
Independence Blue Cross (“IBC”) and
the other investors signatory thereto (the “Purchase
Agreement”), and to induce IBC to purchase the Units thereunder.
Capitalized terms used in this Letter Agreement and not otherwise defined
herein shall have the respective meanings ascribed to such terms in the Purchase
Agreement.
The
Company hereby agrees, intending to be legally bound, that during the Term, it
will take all actions, do all things, and execute and deliver all documents and
instruments within in its power as may be necessary to accomplish the following
results:
1. One
director designated by IBC (the “IBC
Director”) shall be nominated by the Company for election to the
Company’s Board of Directors (the “Board”) at
each meeting of shareholders or solicitation of consents for the election of
directors, except for the Company’s 2010 annual meeting of shareholders, and, in
the event of an increase in the number of members of the Company’s Board, such
greater number of directors designated by IBC shall be so nominated for election
to the Board as is necessary to have no less than the same percentage of the
members of the Board so nominated as is currently represented by one
director;
2. In
the event of a vacancy in the Board seat previously held by an IBC Director, a
successor director designated by IBC shall be appointed to fill such
vacancy;
3. Each
director designated by IBC to be an IBC Director under Paragraphs 1 and 2 must
meet the qualifications to serve as a member of the Board as reasonably
determined in good faith by either the Board or the Nominating and Governance
Committee of the Board.
4. Without
limiting the general nature of the foregoing, (a) on or prior to the earlier of
the Subsequent Closing Date or the Subsequent Closing Deadline, the number of
members of the Company’s Board shall be increased to eleven (11), and (b) as
soon as reasonably practicable but in any event within five (5) days following
the designation by IBC of the IBC Director and the qualification of such
individual pursuant to Paragraph 3, the IBC Director shall be appointed as a
member of the Board to fill the vacancy created by the increase in the
number of members of the Company’s Board, and to serve as a director until the
expiration of the term ending at the Company’s 2010 annual meeting of
shareholders and until his or her successor has been duly elected and qualified
or his or her earlier death, resignation or removal.
Independence
Blue Cross
September
30, 2010
5. The
Company shall include the IBC Director in the Board’s slate of nominees for
election as directors of the Company and use its best efforts to cause the
election of the IBC Director at each annual meeting of shareholders (and in any
consent for the election of directors solicited by the Company), except for the
Company’s 2010 annual meeting of shareholders, including, without limitation,
recommending that the Company’s shareholders vote in favor of the election of
the IBC Director at such annual meeting (or in such consent) and voting the
shares of Company Common Stock represented by all proxies granted by
shareholders in connection with the solicitation of proxies by the Board in
connection with such meeting in favor of the IBC Director, except for such
proxies that specifically indicate a vote to withhold authority with respect to
the IBC Director. Neither the Board nor the Company shall take any
position, make any statements or take any action inconsistent with such
recommendations;
6. The
Company shall cause The Co-Investment Fund II, L.P. to enter into a voting
agreement with IBC, substantially in the form attached hereto as Exhibit A within five
(5) days of the date hereof; and
7. Non-employee
directors shall only be compensated under the terms of the Directors
Compensation Plan currently in effect and shall not receive any additional fees
for their services to the Company.
The
Company further agrees, intending to be legally bound, that it would be
impossible to measure in money the damages which will accrue to IBC or to its
successors or assigns by reason of the failure of the Company to perform its
obligations under this Letter Agreement and the parties agree that the terms of
this Letter Agreement shall be specifically enforceable. If IBC or any of its
successors or assigns institutes any action or proceeding to specifically
enforce the provisions hereof, any person against whom such action or proceeding
is brought hereby waives the claim or defense therein that such instituting
party has an adequate remedy at law, and such person shall not offer in any such
action or proceeding the claim or defense that such remedy at law exists.
Nothing contained in this paragraph shall limit the remedies herein, legal or
equitable, otherwise available and all such remedies herein are in addition to
any remedies available at law or otherwise.
The
provisions of this Letter Agreement shall remain in effect for so long as IBC or
its affiliates continue to hold either (i) shares of the Preferred Stock in an
amount equal to fifty percent (50%) or more of the number of shares of the
Preferred Stock purchased under the Purchase Agreement or (ii) shares of
the Company’s Common Stock in an amount equal to fifty percent (50%) or more of
the number of shares of the Company’s Common Stock that IBC is entitled to
receive upon conversion of the Preferred Stock acquired under the Purchase
Agreement (the “Term”).
Independence
Blue Cross
September
30, 2010
The
Company hereby represents and warrants to IBC that (a) the Board has approved
the actions to be taken by the Company under this Letter Agreement and (b) this
Letter Agreement is a valid and binding obligation of the Company.
If the
foregoing correctly sets forth our agreement, please so confirm by executing the
enclosed copy of this Letter Agreement in the space provided below and returning
it to me.
[Signature
Page Follows]
Independence
Blue Cross
September
30, 2010
Very
truly yours,
HEALTH
BENEFITS DIRECT CORPORATION
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By:
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/s/ Xxxxxxx X. Xxxxx
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Name:
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Xxxxxxx
X. Xxxxx
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Title:
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Acting
Chief Executive Officer, Chief
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Operating
Officer and Chief Financial
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||
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Officer
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||
Confirmed
and Agreed to:
INDEPENDENCE
BLUE CROSS
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By:
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/s/ Xxxxxx X. Xxxxx
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Name:
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Xxxxxx
X. Xxxxx
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Title:
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President
& Chief Executive
Officer
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Exhibit
A
VOTING
AGREEMENT
See
attached.
