Exhibit 10.25
ADVISORY AGREEMENT
THIS AGREEMENT (the "AGREEMENT"), dated as of November 1, 2005, by and
between Health Benefits Direct Corporation, a Delaware corporation (the
"COMPANY"), and Xxxxxx X. Xxxxxx (the "ADVISOR").
W I T N E S S E T H:
WHEREAS, the Company desires to retain the Advisor and the Advisor
desires to be retained by the Company pursuant to the terms and conditions
hereinafter set forth.
NOW, THEREFORE, in consideration of the foregoing and the mutual
promises and covenants herein contained, it is hereby agreed as follows:
Section 1. RETENTION.
(a) The Company hereby retains the Advisor on an
non-exclusive basis to perform the services set forth in Section 1(b),
commencing on the date hereof, and the Advisor hereby accepts such retention and
shall perform for the Company the duties described herein, faithfully and to the
best of his ability.
(b) The Advisor shall serve as a business advisor to the
Company and render such advice and services to the Company as may be reasonably
requested by the Company including, without limitation, introducing the Company
to prospective equity investors.
Section 2. COMPENSATION.
(a) In consideration of the Advisor introducing the Company
to certain potential providers of an equity financing (the "EQUITY FINANCING")
which the Company closes, the Company shall pay the Advisor a fee consisting of
(i) cash in an amount equal to four percent (4%) of the total gross cash
proceeds of the Equity Financing and (ii) warrants to purchase such number of
shares of the Company's common stock (the "COMMON STOCK") as shall equal five
percent (5%) of the shares of the Common Stock issued or to be issued upon
conversion and/or exercise in the Equity Financing on a post-financing basis, at
an exercise price equal to $1.50 per share, exercisable, in whole or in part,
during the five (5) year period commencing on the issuance date of such warrants
(the "WARRANT Fee"). The Warrant Fee, at the option of the Advisor, may be paid
for in cash or by an exchange as a "cashless exercise." The Advisor will limit
his activities described in this Section 2 to making introductions between the
Company and individuals that may be interested in investing in the Company. In
this role, the Advisor will not solicit such individuals to make an investment
in the Company, make any recommendations to such individuals regarding an
investment in the Company, or provide any analysis or advice regarding an
investment in the Company to such individuals.
(b) The Company shall not pay to the Advisor any retainer.
(c) Except as otherwise provided for herein:
(i) All fees due to the Advisor hereunder shall have
no offsets, are non-refundable, non-cancelable and shall be free and clear of
any and all encumbrances.
(ii) All cash fees due the Advisor hereunder shall be
paid to the Advisor immediately upon closing of any Equity Financing
(collectively, the "FEE TRANSACTION") by wire transfer of immediately available
funds from the proceeds of the Fee Transaction, either directly or from the
formal or informal escrow arrangement established for the Fee Transaction
(collectively, the "CLOSING AGENT"), pursuant to the written wire transfer
instructions of the Advisor provided to the Closing Agent.
(iii) All securities fees due the Advisor hereunder
shall be made via DTC or the DWAC system, or by certified certificates, as
applicable, and shall be delivered to the Advisor from the Closing Agent
immediately upon closing of any Fee Transaction.
(iv) All securities fees due the Advisor hereunder
shall be duly issued, fully-paid (exclusive of warrants or options) and
non-assessable and shall be in the same form, with the same terms and conditions
as the securities provided to the Company pursuant to any Fee Transaction.
(v) The Company authorizes and directs the Closing
Agent to distribute directly or from escrow any and all fees due the Advisor
hereunder. The Company agrees that such fees and the manner of payment and
delivery as herein provided shall be included in the documentation of any Fee
Transaction.
Section 3. EXPENSES. The Company shall reimburse the Advisor for
all out-of-pocket expenses incurred by the Advisor in connection with his duties
hereunder, including but not limited to the Advisor's due diligence activities
with respect to the Company. Any such expenses shall be evidenced by written
documentation prior to reimbursement and shall not exceed fifteen thousand
dollars ($15,000) in the aggregate. Reimbursement by the Company to the Advisor,
or to any third party designated by the Advisor, will be made immediately upon
closing of any Fee Transaction by wire transfer of immediately available funds
from the proceeds of the Fee Transaction pursuant to wire instructions provided
to the Company by the Advisor.
Section 4. TERMINATION. Either party may terminate this Agreement
at any time for any reason or no reason; PROVIDED, HOWEVER, that the Company
shall not terminate, cancel or rescind any agreements, term sheets or letters of
intent pursuant to any Equity Financing unless such cancellation is made
pursuant to pertinent "out clauses" of those respective documents ("JUST
CAUSE"). In the event the Company elects not to proceed with an Equity Financing
that was facilitated by the Advisor without Just Cause, the Company shall
immediately pay to the Advisor a termination fee equal to the greater of (a)
$50,000 or (b) fifty percent (50%) of the total fees that would have been paid
to the Advisor had the transaction been effected.
Section 5. CONFIDENTIAL INFORMATION. The Advisor agrees that during
and after the term of this Agreement, it will keep in strictest confidence, and
will not disclose or make accessible to any other person without the written
consent of the Company, the Company's products, services and technology, both
current and under development, promotion and marketing programs, lists, trade
secrets and other confidential and proprietary business information of the
Company or any of its clients and third parties including, without limitation,
Proprietary Information (as defined in Section 6) (all of the foregoing is
referred to herein as the "CONFIDENTIAL INFORMATION"). The Advisor agrees (a)
not to use any such Confidential Information for himself or others; and (b) not
to take any such material or reproductions thereof from the Company's facilities
at any time except, in each case, as required in connection with the Advisor's
duties hereunder. Notwithstanding the foregoing, the parties agree that the
Advisor is free to use (a) information in the public domain not as a result of a
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breach of this Agreement, (b) information lawfully received form a third party
who had the right to disclose such information and (c) the Advisor's own
independent skill, knowledge, know-how and experience to whatever extent and in
whatever way it wishes, in each case consistent with his obligations as the
Advisor and that, at all times, the Advisor is free to conduct any research
relating to the Company's business.
Section 6. OWNERSHIP OF PROPRIETARY INFORMATION. The Advisor agrees
that all information that has been created, discovered or developed by the
Company, its subsidiaries, affiliates, licensors, licensees, successors or
assigns (collectively, the "AFFILIATES") (including, without limitation,
information relating to the development of the Company's business created,
discovered, developed by the Company or any of its affiliates during the term of
this Agreement, and information relating to the Company's customers, suppliers,
advisors, and licensees) and/or in which property rights have been assigned or
otherwise conveyed to the Company or the Affiliates, shall be the sole property
of the Company or the Affiliates, as applicable, and the Company or the
Affiliates, as the case may be, shall be the sole owner of all patents,
copyrights and other rights in connection therewith, including, without
limitation, the right to make application for statutory protection. All the
aforementioned information is hereinafter called "PROPRIETARY INFORMATION." By
way of illustration, but not limitation, Proprietary Information includes trade
secrets, processes, discoveries, structures, inventions, designs, ideas, works
of authorship, copyrightable works, trademarks, copyrights, formulas,
improvements, inventions, product concepts, techniques, marketing plans, merger
and acquisition targets, strategies, forecasts, blueprints, sketches, records,
notes, devices, drawings, customer lists, patent applications, continuation
applications, continuation-in-part applications, file wrapper continuation
applications and divisional applications and information about the Company's
Affiliates, its employees and/or advisors (including, without limitation, the
compensation, job responsibility and job performance of such employees and/or
advisors). All original content, proprietary information, trademarks,
copyrights, patents or other intellectual property created by the Advisor that
does not include any specific information relative to the Company's proprietary
information, shall be the sole and exclusive property of the Advisor.
Section 7. INDEMNIFICATION. The Company represents that all
materials provided or to be provided to the Advisor or any third party regarding
the Company's financial affairs or operations are and shall be truthful and
accurate and in compliance with any and all applicable federal and state
securities laws. The Company agrees to indemnify and hold harmless the Advisor
and his advisors, professionals and affiliates, the respective directors,
officers, partners, members, managers, agents and employees and each other
person, if any, controlling the Advisor or any of his affiliates to the full
extent lawful, from and against all losses, claims, damages, liabilities and
expenses incurred by them (including reasonable attorneys' fees and
disbursements) that result from actions taken or omitted to be taken (including
any untrue statements made or any statement omitted to be made) by the Company,
its agents or employees which relate to the scope of this Agreement and the
performance of the services by the Advisor contemplated hereunder. Each person
or entity seeking indemnification hereunder shall promptly notify the Company of
any loss, claim, damage or expense for which the Company may become liable
pursuant to this Section 7. No party shall pay, settle or acknowledge liability
under any such claim without consent of the party liable for indemnification,
and shall permit the Company a reasonable opportunity to cure any underlying
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problem or to mitigate actual or potential damages. The scope of this
indemnification between the Advisor and the Company shall be limited to, and
pertain only to certain transactions contemplated or entered into pursuant to
this Agreement. The Company shall have the opportunity to defend any claim for
which it may be liable hereunder, provided it notifies the party claiming the
right to indemnification in writing within fifteen (15) days of notice of the
claim. The rights stated pursuant to this Section 7 shall be in addition to any
rights that the Advisor, or any other person entitled to indemnification may
have in common law or otherwise, including, but not limited to, any right to
contribution.
Section 8. NOTICES. Any notice or other communication under this Agreement shall
be in writing and shall be deemed to have been duly given: (a) upon facsimile
transmission (with written transmission confirmation report) at the number
designated below; (b) when delivered personally against receipt therefore; (c)
one day after being sent by Federal Express or similar overnight delivery; or
(d) five (5) business days after being mailed registered or certified mail,
postage prepaid. The addresses for such communications shall be as set forth
below or to such other address as a party shall give by notice hereunder to the
other party to this Agreement.
If to the Company:
Health Benefits Direct Corporation
0000 Xxxxxxx Xxxxx
Xxxxxxx Xxxxx, Xxxxxxx 00000
Telephone: (000) 000-0000
Telecopy: (000) 000-0000
Attention: Xx. Xxxxx Xxxxxxx, Chief Executive Officer
If to the Advisor:
Xxxxxx X. Xxxxxx
000 Xxxxx Xxxx Xxxxx, Xxxxx 000
Xxxxx, XX 00000
Telephone: 000-000-0000
Telecopy: 610-975-4911
Attention: Xx. Xxxxxx X. Xxxxxx
Section 9. STATUS OF ADVISOR. The Advisor shall be deemed to be an
independent contractor and, except as expressly provided or authorized in this
Agreement, shall have no authority to act for on behalf of or represent the
Company. This Agreement does not create a partnership or joint venture.
Section 10. OTHER ACTIVITIES OF ADVISOR. The Company recognizes that
the Advisor now renders and may continue to render consulting and other services
to other companies that may or may not conduct business and activities similar
to those of the Company. The Advisor shall not be required to devote his full
time and attention to the performance of his duties under this Agreement, but
shall devote only so much of his time and attention as it deems reasonable or
necessary for such purposes.
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Section 11. SUCCESSORS AND ASSIGNS. This Agreement and all of the
provisions hereof shall be binding upon and inure to the benefit of the parties
hereto and their respective successors and permitted assigns. This Agreement and
any of the rights, interests or obligations hereunder may be assigned by the
Advisor without the prior written consent of the Company. This Agreement and any
of the rights, interests or obligations hereunder may not be assigned by the
Company without the prior written consent of the Advisor, which consent shall
not be unreasonably withheld.
Section 12. SEVERABILITY OF PROVISIONS. If any provision of this
Agreement shall be declared by a court of competent jurisdiction to be invalid,
illegal or incapable of being enforced in whole or in part, the remaining
conditions and provisions or portions thereof shall nevertheless remain in full
force and effect and enforceable to the extent they are valid, legal and
enforceable, and no provision shall be deemed dependent upon any other covenant
or provision unless so expressed herein.
Section 13. ENTIRE AGREEMENT; MODIFICATION. This Agreement contains
the entire agreement of the parties relating to the subject matter hereof, and
the parties hereto have made no agreements, representations or warranties
relating to the subject matter of this Agreement which are not set forth herein.
No amendment or modification of this Agreement shall be valid unless made in
writing and signed by each of the parties hereto.
Section 14. NON-WAIVER. The failure of any party to insist upon the
strict performance of any of the terms, conditions and provisions of this
Agreement shall not be construed as a waiver or relinquishment of future
compliance therewith; and the said terms, conditions and provisions shall remain
in full force and effect. No waiver of any term or condition of this Agreement
on the part of any party shall be effective for any purpose whatsoever unless
such waiver is in writing and signed by such party.
Section 15. REMEDIES FOR BREACH. The Advisor and the Company
mutually agree that any breach of Sections 2, 4, 5, 6, or 7 of this Agreement by
the Advisor or the Company may cause irreparable damage to the other party
and/or their affiliates, and that monetary damages alone would not be adequate
and, in the event of such breach or threat of breach, the damaged party shall
have, in addition to any and all remedies at law and without the posting of a
bond or other security, the right to an injunction, specific performance or
other equitable relief necessary to prevent or redress the violation of either
party's obligations under such Sections. In the event that an actual proceeding
is brought in equity to enforce such Sections, the offending party shall not
urge as a defense that there is an adequate remedy at law nor shall the damaged
party be prevented from seeking any other remedies that may be available to it.
The defaulting party shall pay all attorneys' fees and costs incurred by the
other party in enforcing this Agreement.
Section 16. GOVERNING LAW. The parties hereto acknowledge that the
transactions contemplated by this Agreement bear a reasonable relation to the
Commonwealth of Pennsylvania. This Agreement shall be governed by, and construed
and interpreted in accordance with, the internal laws of the Commonwealth of
Pennsylvania without regard to such state's principles of conflicts of laws. The
parties irrevocably and unconditionally agree that the exclusive place of
jurisdiction for any action, suit or proceeding ("ACTIONS") relating to this
Agreement shall be in the state and/or federal courts situate in the county and
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state of Pennsylvania. Each party irrevocably and unconditionally waives any
objection it may have to the venue of any Action brought in such courts or to
the convenience of the forum. Final judgment in any such Action shall be
conclusive and may be enforced in other jurisdictions by suit on the judgment, a
certified or true copy of which shall be conclusive evidence of the fact and the
amount of any indebtedness or liability of any party therein described. Service
of process in any Action by any party may be made by serving a copy of the
summons and complaint, in addition to any other relevant documents, by
commercial overnight courier to any other party at their address set forth in
this Agreement.
Section 17. HEADINGS. The headings of the Sections are inserted for
convenience of reference only and shall not affect any interpretation of this
Agreement.
Section 18. COUNTERPARTS. This Agreement may be executed in
counterpart signatures, each of which shall be deemed an original, but all of
which, when taken together, shall constitute one and the same instrument, it
being understood that both parties need not sign the same counterpart. 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 page were an original thereof.
[Signature Page Immediately Follows]
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IN WITNESS WHEREOF, the parties hereto have executed this Agreement as
of the day and year first written above.
HEALTH BENEFITS DIRECT CORPORATION
By: /s/ Xxxxx Xxxxxxx
-----------------------------------
Name: Xxxxx Xxxxxxx
Title: CEO
/s/ Xxxxxx X. Xxxxxx
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Xxxxxx X. Xxxxxx
SIGNATURE PAGE TO ADVISORY AGREEMENT
