UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of
the Securities Exchange Act of 1934
Date of report (Date of earliest event reported): October 1, 2007
Health Benefits Direct Corporation
(Exact name of registrant as specified in charter)
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Delaware
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333-123081
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98-0438502
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(State or other jurisdiction of incorporation)
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(Commission
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(IRS Employer
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File Number)
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Identification No.)
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150 N. Radnor-Chester Road
Suite B-101
Radnor, Pennsylvania 19087
(Address of principal executive offices)
(484) 654-2200
(Registrant’s telephone number, including area code)
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the
filing obligation of the registrant under any of the following provisions (
see
General Instruction
A.2 below):
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Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
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Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
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Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR
240.14d-2(b))
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Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR
240.13e-4(c))
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Item 1.01. Entry into a Material Definitive Agreement
On October 1, 2007, HBDC Acquisition, LLC (“HBDC Sub”), a Delaware limited liability company
and wholly-owned subsidiary of Health Benefits Direct Corporation, a Delaware corporation (the
“Company”), entered into an Agreement to Transfer Partnership Interests (the “Bilenia Agreement”)
with the former partners (the “Bilenia Partners”) of BileniaTech, L.P., a Delaware limited
partnership (“Bilenia”), whereby HBDC Sub purchased all of the outstanding general and limited
partnership interests of Atiam Technologies, L.P., a Delaware limited partnership (“Atiam”), owned
by the Bilenia Partners. The execution of the Bilenia Agreement and the transfer of the Atiam
partnership interests to HBDC Sub thereunder were conditions precedent to the closing of the Merger
Agreement (as defined below) on October 1, 2007 (the “Closing Date”).
The aggregate amount paid by HBDC Sub to the Bilenia Partners for the Atiam partnership
interests under the Bilenia Agreement was $1,000,000.00, consisting of $500,000.00 in cash and
224,216 shares of common stock, par value $0.001 per share, of the Company (“Company Common
Stock”), which shares had an aggregate value of $500,000.00 based on the average closing price per
share ($2.23) of Company Common Stock on The Over the Counter Bulletin Board on the five
consecutive trading days preceding the Closing Date.
In connection with the Bilenia Agreement, the Company and Computer Command and Control
Company, a Pennsylvania corporation (“CCCC”), also entered into a Registration Rights Agreement
(the “Bilenia Registration Rights Agreement”). Under the terms of the Bilenia Registration Rights
Agreement, the Company has agreed to give prompt written notice to CCCC of the registration of any
of the Company’s securities under the Securities Act of 1933, as amended (the “Securities Act”),
and CCCC shall have the opportunity, upon 20 days’ written notice to the Company, to request that
the shares of Company Common Stock issued to CCCC under the Bilenia Agreement be included in such
registration statement. The Company agreed that its current intention is to begin to prepare and
file a registration statement with the Securities and Exchange Commission (the “Commission”) within
60 days of the Closing Date.
A copy of the Bilenia Agreement is attached hereto as Exhibit 10.1 and is incorporated herein
by reference. The foregoing description of the Bilenia Agreement is qualified in its entirety by
reference to the full text of the Bilenia Agreement.
A copy of the Bilenia Registration Rights Agreement is attached hereto as Exhibit 4.1 and is
incorporated herein by reference. The foregoing description of the Bilenia Registration Rights
Agreement is qualified in its entirety by reference to the full text of the Bilenia Registration
Rights Agreement.
Item 2.01. Completion of Acquisition or Disposition of Assets
On October 1, 2007, the Company completed the acquisition of Atiam pursuant to an Agreement
and Plan of Merger (the “Merger Agreement”) among the Company, HBDC Sub, System Consulting
Associates, Inc., a Pennsylvania corporation (“SCA”), and the shareholders of SCA party thereto
(the “Shareholders”).
The Merger Agreement provided for a business combination whereby SCA would be merged with and
into Merger Sub, with Merger Sub continuing as the surviving corporation and as a wholly-owned
subsidiary of the Company (the “Merger”). The aggregate amount paid by the Company with respect to
all outstanding shares of capital stock of SCA (such amount, the “Merger Consideration”) was
$2,000,000.00, consisting of (a) $850,000.00 in cash and (b) 515,697 unregistered shares of Company
Common Stock, which number of shares had a value of $1,150,000.00 based on the average closing
price
per share ($2.23) of Company Common Stock on The Over the Counter Bulletin Board on the five
consecutive trading days preceding the Closing Date. Upon the effectiveness of the Merger, each
share of SCA Common Stock issued and outstanding immediately prior to the Effective Time was
converted into the right to receive a pro rata portion of the Merger Consideration. The Company
placed certificates representing 134,529 shares, or an amount equal to $300,000.00, of the Company
Common Stock that otherwise would be payable to the Shareholders as Merger Consideration into an
escrow account, which shares will be held in escrow for a period of one year to satisfy any
indemnification claims by the Company or Merger Sub under the Merger Agreement.
In connection with the Merger Agreement, the Company and Shareholders also entered into a
Registration Rights Agreement (the “Shareholder Registration Rights Agreement”). Under the terms of
the Shareholder Registration Rights Agreement, the Company has agreed to give prompt written notice
to each Shareholder of the registration of any of the Company’s securities under the Securities Act
and the Shareholders shall have the opportunity, upon 20 days’ written notice to the Company, to
request that the shares of Company Common Stock issued to the Shareholders under the Merger
Agreement be included in such registration statement. The Company agreed that its current
intention is to begin to prepare and file a registration statement with the Commission within 60
days of the Closing Date.
A copy of the Merger Agreement was filed as Exhibit 2.1 to the Company’s current report on
Form 8-K, filed with the Commission on September 26, 2007, and is incorporated herein by reference.
The foregoing description of the Merger Agreement is qualified in its entirety by reference to the
full text of the Merger Agreement.
A copy of the Shareholder Registration Rights Agreement is attached hereto as Exhibit 4.2 and
is incorporated herein by reference. The foregoing description of the Shareholder Registration
Rights Agreement is qualified in its entirety by reference to the full text of the Shareholder
Registration Rights Agreement.
A copy of the press release relating to the closing of the Merger Agreement, dated October 2,
2007, is attached hereto as Exhibit 99.1.
Item 3.02. Unregistered Sales of Equity Securities.
The description of the Bilenia Agreement, the Bilenia Registration Rights Agreement, the
Shareholder Registration Rights Agreement and the Merger Agreement “Item 1.01. Entry into a
Material Definitive Agreement” and “Item 2.01. Completion of Acquisition or Disposition of Assets”
of this Report is hereby incorporated into this Item 3.02 by reference.
The 739,913 shares of Company Common Stock issued pursuant to the terms of the Bilenia
Agreement and the Merger Agreement are being offered and sold to accredited investors without
registration under the Securities Act or any state securities laws. The Company is relying on the
exemption from the registration requirements of the Securities Act by virtue of Section 4(2)
thereof and Regulation D promulgated thereunder. Each of the certificates representing shares of
Company Common Stock contain restrictive legends preventing the sale, transfer or other disposition
of such shares unless registered under the Securities Act or sold pursuant to an exemption
therefrom. As described in Items 1.01 and 2.01 of this current report, the Company may file a
registration statement for the resale of the shares of Company Common Stock under certain
circumstances. This current report is not an offer to sell or the solicitation of an offer to buy
shares of common stock or other securities of the Company.
Item 9.01. Financial Statements and Exhibits.
(a) Financial Statements of Business Acquired.
The financial statements of SCA and Atiam have not been prepared but will be filed by
amendment no later than 71 calendar days after the date this report is required to be filed,
pursuant to the instructions set forth in Item 9.01 of Form 8-K.
(b) Pro Forma Financial Information.
The pro forma financial information of SCA and Atiam have not been prepared but will be filed
by amendment no later than 71 calendar days after the date this report is required to be filed,
pursuant to the instructions set forth in Item 9.01 of Form 8-K.
(d) Exhibits.
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Exhibit Number
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Description of Exhibit
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2.1
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Agreement and Plan of Merger, dated as of September 21,
2007, by and among the Company, HBDC Acquisition, LLC,
System Consulting Associates, Inc. and the shareholders of
System Consulting Associates, Inc. party thereto
(incorporated by reference from Exhibit 2.1 to the
Company’s current report on From 8-K, filed with the
Commission on September 26, 2007)
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4.1
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Registration Rights Agreement, dated October 1, 2007, by
and between Health Benefits Direct Corporation and Computer
Command and Control Company
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4.2
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Registration Rights Agreement, dated October 1, 2007, by
and among Health Benefits Direct Corporation and Robert J.
Oakes, Jeff Brocco, Tim Savery and Lisa Roetz
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10.1
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Agreement to Transfer Partnership Interests, dated October
1, 2007, by and among HBDC Acquisition, LLC and the former
partners of BileniaTech, L.P.
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99.1
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Press Release dated October 2, 2007
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly
caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
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HEALTH BENEFITS DIRECT CORPORATION
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Date: October 4, 2007
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By:
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/s/
Anthony R. Verdi
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Name:
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Anthony R. Verdi
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Title:
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Chief Financial Officer
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Exhibit Index
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Exhibit Number
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Description of Exhibit
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2.1
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Agreement and Plan of Merger, dated as of September 21,
2007, by and among the Company, HBDC Acquisition, LLC,
System Consulting Associates, Inc. and the shareholders of
System Consulting Associates, Inc. party thereto
(incorporated by reference from Exhibit 2.1 to the
Company’s current report on From 8-K, filed with the
Commission on September 26, 2007)
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4.1
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Registration Rights Agreement, dated October 1, 2007, by
and between Health Benefits Direct Corporation and Computer
Command and Control Company
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4.2
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Registration Rights Agreement, dated October 1, 2007, by
and among Health Benefits Direct Corporation and Robert J.
Oakes, Jeff Brocco, Tim Savery and Lisa Roetz
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10.1
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Agreement to Transfer Partnership Interests, dated October
1, 2007, by and among HBDC Acquisition, LLC and the former
partners of BileniaTech, L.P.
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99.1
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Press Release dated October 2, 2007
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Exhibit 4.1
REGISTRATION RIGHTS AGREEMENT
This Registration Rights Agreement (this “
Agreement
”) is made and entered into as of
October 1, 2007, by and between Health Benefits Direct Corporation, a Delaware corporation (the
“
Company
”), and Computer Command and Control Company (the “
Stockholder
”). The
Company and the Stockholder hereinafter may be referred to individually as a “
Party
,” and
collectively as the “
Parties
.”
Background
This Agreement is made pursuant to the Agreement to Transfer Partnership Interests, dated as
of the date hereof, by and among , HBDC Acquisition LLC, a Delaware limited liability company and
wholly-owned subsidiary of the Company, Stockholder, Noah Prywes, Anthony Newshel, Dominique Butts,
Jeffrey Derr and Amy Fritsky (the “
Transfer Agreement
”).
Agreement
The Company and the Stockholder hereby agree as follows:
1.
Definitions
. As used in this Agreement, the following terms have the meanings specified
in this Section 1.
(a) “
1933 Act
” is defined in
Section 2(a)
.
(b) “
1934 Act
” is defined in
Section 5
.
(c) “
Agreement
” is defined in the Introduction above.
(d) “
Common Stock
” means the Common Stock, par value $0.001 per share, of the Company.
(e) “
Company
” is defined in the Introduction above.
(f) “
Losses
” is defined in
Section 5
.
(g) “
Party
” and “
Parties
” are defined in the Introduction above.
(h) “
Person
” means any natural person, business trust, corporation, partnership,
limited liability company, joint stock company, proprietorship, association, trust, joint venture,
unincorporated association or any other legal entity of whatever nature.
(i) “
Piggyback Registration
” is defined in
Section 2(a)
.
(j) “
Registrable Securities
” means the Common Stock acquired by the Stockholder under
the Transfer Agreement. As to any particular Registrable Securities, such securities will cease to
be Registrable Securities when they have been (i) effectively registered under the 1933 Act and
disposed of in accordance with a registration statement covering them, (ii) transferred
pursuant to Rule 144 (or any similar provision then in force), or (iii) sold in a private
transaction to someone other than the Stockholder.
(k) “
Registration Expenses
” means all expenses incident to the Company’s performance
of or compliance with this Agreement, including all registration and filing fees, fees and expenses
of compliance with securities or blue sky laws, printing expenses, messenger and delivery expenses,
expenses and fees for listing the Registrable Securities on exchanges on which similar securities
issued by the Company are then listed, and fees and disbursements of counsel for the Company and of
all independent registered public accountants, underwriters (other than Underwriting Commissions)
and other Persons retained by the Company.
(l) “
SEC
” means the Securities and Exchange Commission, or such other comparable
agency or commission, and any successor agency thereto.
(m) “
Stockholder
” is defined in the Introduction above.
(n) “
Third Party Registrable Securities
” means securities of the Company other than
Registrable Securities, held by a Person other than the Stockholder, that the Company intends to
include in a registration of securities under the 1933 Act.
(o) “
Transfer Agreement
” is defined in the Background above.
(p) “
Underwriting Commissions
” means all underwriting discounts or commissions
relating to the sale of securities of the Company, but excludes any expenses reimbursed to
underwriters.
2.
Piggyback Registrations
.
(a)
Right to Piggyback
. Whenever the Company proposes to register any of its
securities under the Securities Act of 1933, as amended (the “
1933 Act
”), and the
registration form to be used may be used for the registration of Registrable Securities, the
Company shall give prompt written notice to all holders of Registrable Securities and shall include
in such registration, subject to the allocation provisions below, all Registrable Securities with
respect to which the Company has received written requests for inclusion within 20 calendar days
after the Company’s mailing of such notice (a “
Piggyback Registration
”). The Company shall
not select a form of registration statement that imposes, for its use, limitations on the maximum
value or number of securities that may be registered if these limitations would preclude
registration of the Registrable Securities that the Company has been requested to include in such
registration. It is the Company’s current intention to initiate the registration of certain shares
of Common Stock within sixty days after the date of this Agreement.
(b)
Piggyback Expenses
. In all Piggyback Registrations, the Company shall pay the
Registration Expenses related to the Registrable Securities of the Stockholder, but the Stockholder
shall pay the Underwriting Commissions related to its Registrable Securities.
(c)
Priority on Primary Registrations
. If a Piggyback Registration is an underwritten
primary offering of the Company’s securities, and the managing underwriter(s) advise the Company in
writing that in their opinion the number of securities requested to be included in
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such registration exceeds the number that can be sold in such offering at a price reasonably
related to fair value, the Company shall allocate the securities to be included as follows: (i)
first, the securities the Company proposes to sell on its own behalf, and (ii) second, Registrable
Securities requested to be included in such registration and Third Party Registrable Securities, if
any, pro rata on the basis of the number of Registrable Securities requested to be included in such
registration in proportion to the aggregate number of Registrable Securities requested to be
included in such registration plus Third Party Registrable Securities. For illustration purposes
only, if any Stockholder requests that 100 shares be included in a registration and 200 Third Party
Registrable Securities are also to be included in such registration, but the total remaining
available securities under such registration is 150 shares, then 50 shares of Registrable
Securities, and 100 shares of Third Party Registrable Securities, would be included in such
registration.
(d)
Priority on Secondary Registrations
. If a Piggyback Registration is initiated as
an underwritten secondary offering of the Company’s securities and the managing underwriter(s)
advise the Company in writing that in their opinion the number of securities requested to be
included in such registration exceeds the number that can be sold in such offering at a price
reasonably related to fair value, the Company shall allocate the securities to be included as
follows: (i) first, the securities requested to be included by the holders initiating such
registration, or the Company as the case may be, and (ii) second, Registrable Securities requested
to be included in such registration and Third Party Registrable Securities (other than securities
covered by item (i) immediately above), if any, pro rata on the basis of the number of Registrable
Securities requested to be included in such registration in proportion to the aggregate number of
Registrable Securities requested to be included in such registration plus Third Party Registrable
Securities.
(e)
Selection of Underwritten Offerings
. If an underwritten offering is contemplated
in connection with a Piggyback Registration, the Company, if the registration is under
Section 2(c)
, or the holders initiating such registration or the Company, as applicable, if
the registration is under
Section 2(d)
, shall select the investment banker(s) and
manager(s) to be retained in connection with such offering and make any other decisions regarding
the underwriting arrangements for the offering.
3.
Contemporaneous Sales
.
Neither the Stockholder nor the Company shall effect any public sale or distribution of equity
securities of the Company or any securities convertible into or exchangeable or exercisable for
such securities during the seven calendar days prior to and the 90 calendar days after any
underwritten Piggyback Registration has become effective (except as part of such underwritten
registration).
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4.
Registration Procedures
.
Whenever the Stockholder has requested that any Registrable Securities be registered pursuant
to
Section 2
of this Agreement, the Company shall, within a reasonable time:
(a) prepare and file with the SEC a registration statement with respect to such Registrable
Securities and use its best efforts to cause such registration statement to become effective
(provided that, before filing a registration statement or prospectus or any amendments or
supplements thereto, the Company shall furnish the Stockholder with copies of all such documents
proposed to be filed);
(b) prepare and file with the SEC such amendments and supplements to such registration
statement and the prospectus used in connection therewith as may be necessary to keep such
registration statement effective for a period of not less than 120 calendar days, or for such
longer period of time as may be necessary to complete the distribution contemplated by the
registration statement;
(c) furnish to the Stockholder such number of copies of such registration statement, each
amendment and supplement thereto and the prospectus (including each preliminary prospectus)
prepared in conformity with the 1933 Act, and such other documents as such holder may reasonably
request in order to facilitate the disposition of the Registrable Securities owned by such holder;
(d) use its best efforts to register or qualify such Registrable Securities under such other
securities or blue sky laws of such jurisdictions as the managing underwriter(s) or such holders
may reasonably request;
(e) at any time when a prospectus relating to such registration is required to be delivered
under the 1933 Act and during the period that the Company is required to keep the registration
statement effective, notify the Stockholder of the happening of any event as a result of which the
prospectus included in such registration statement contains an untrue statement of a material fact
or omits any fact necessary to make the statement therein not misleading in light of the
circumstances then existing, and, at the request of any such holder, the Company shall prepare a
supplement or amendment to such prospectus so that, as thereafter delivered to the purchasers of
such Registrable Securities, such prospectus will not contain an untrue statement of a material
fact or omit to state any fact necessary to make the statement therein not misleading in light of
the circumstances then existing;
(f) except as otherwise provided herein, cause all such Registrable Securities to be listed or
included on securities exchanges on which similar securities issued by the Company are then listed
or included;
(g) provide a transfer agent and registrar for all such Registrable Securities and a CUSIP
number for all such Registrable Securities, in each case not later than the effective date of such
registration statement;
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(h) enter into such customary agreements (including an underwriting agreement in customary
form) and take such other customary actions as may be reasonably necessary to expedite or
facilitate the disposition of such Registrable Securities;
(i) obtain a “comfort” letter addressed to the Company from its independent public accountants
in customary form and covering such matters of the type customarily covered by “comfort” letters;
and
(j) make available for inspection by the Stockholder, any underwriter participating in any
disposition pursuant to such registration statement, and any attorney, accountant or other agent
retained by any such holder or underwriter, all financial and other records, pertinent corporate
documents and properties of the Company, and cause the Company’s officers, directors and employees
to supply all information reasonably requested by any such holder, underwriter, attorney,
accountant or agent in connection with such registration statement.
5.
Indemnification
.
(a) The Company shall indemnify, to the extent permitted by law, the Stockholder, and such
Stockholder’s officers, directors and managers and each Person who controls such holder (within the
meaning of the 1933 Act or the Exchange Act of 1934, as amended (the “
1934 Act
”)), if
applicable, against all losses, claims, damages, liabilities (joint or several) and expenses
(including reasonable attorneys’ and other professionals’ fees) (collectively, “
Losses
”)
arising out of or resulting from (i) any untrue or alleged untrue statement of material fact
contained in any registration statement, prospectus or preliminary prospectus or any omission or
alleged omission to state therein a material fact required to be stated therein or necessary to
make the statements therein not misleading in light of the circumstances then existing, except
insofar as the same are caused by or contained in any information furnished in writing to the
Company by such holder expressly for use therein or by any such holder’s failure to deliver a copy
of the registration statement or prospectus or any amendments or supplements thereto after the
Company has furnished such holder with a sufficient number of copies of the same; or (ii) any
violation or alleged violation by the Company of any of the 1933 Act, the 1934 Act or any
applicable state securities laws, or any rules promulgated under any such acts or laws. In
connection with an underwritten offering, the Company shall indemnify the underwriters, their
officers and directors, and each Person who controls such underwriters (within the meaning of the
1933 Act or the 1934 Act) to the same extent as provided above with respect to the indemnification
of the Stockholder.
(b) In connection with any registration statement in which the Stockholder is participating,
the Stockholder shall furnish to the Company in writing such information as is reasonably requested
by the Company for use in any such registration statement or prospectus and shall indemnify, to the
extent permitted by law, the Company, its officers, directors and managers and each Person who
controls the Company (within the meaning of the 1933 Act or the 1934 Act), against any Losses
resulting from any untrue or alleged untrue statement of material fact or any omission or alleged
omission of a material fact required to be stated in the registration statement or prospectus or
any amendment thereof or supplement thereto or necessary to make the statements therein not
misleading in light of the circumstances then existing, but only to the extent that such untrue
statement or omission is contained in information so furnished in writing
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by the Stockholder specifically for use in preparing the registration statement.
Notwithstanding the foregoing, the liability of the Stockholder under this
Section 5(b)
shall be limited to an amount equal to the net proceeds actually received by the Stockholder from
the sale of Registrable Securities covered by the registration statement.
(c) Any Person entitled to indemnification hereunder shall (i) give prompt notice to the
indemnifying Party of any claim with respect to which it seeks indemnification, and (ii) unless in
such indemnified Party’s reasonable judgment a conflict of interest between such indemnified and
indemnifying Parties may exist with respect to such claim, permit such indemnifying Party to assume
the defense of such claim with counsel reasonably satisfactory to the indemnified Party. If such
defense is assumed, the indemnifying Party shall not be subject to any liability for any settlement
made without its consent (but such consent will not be unreasonably withheld). An indemnifying
Party who is not entitled, or elects not, to assume the defense of a claim shall not be obligated
to pay the fees and expenses of more than one counsel for all Parties indemnified by such
indemnifying Party with respect to such claim, unless in the reasonable judgment of any indemnified
Party a conflict of interest may exist between such indemnified Party and any other of such
indemnified Parties with respect to such claim.
6.
Participation in Underwritten Offerings
.
No Stockholder may participate in any underwritten offering hereunder unless such Stockholder
(a) agrees to sell its securities on the basis provided in any underwriting arrangements approved
by the Person or Persons entitled hereunder to approve such arrangements under
Section
2(e)
, and (b) completes and executes all questionnaires, powers of attorney, indemnities,
underwriting agreements, holdback agreements and other documents required under the terms of such
underwriting arrangements.
7.
Miscellaneous
.
(a)
Notices
. All notices that are required or permitted hereunder shall be in writing
and shall be sufficient if personally delivered or sent by facsimile, registered or certified mail
or Federal Express or other nationally recognized overnight delivery service. Any notices shall be
deemed given upon the earlier of the date when received at, the day when delivered via facsimile or
the third calendar day after the date when sent by registered or certified mail or the calendar day
after the date when sent by Federal Express to, the address of the respective Party as set forth in
the Transfer Agreement, unless such address has been changed by notice to the other Party hereto.
(b)
Restrictive Legend
. Each certificate representing Registrable Securities shall
(unless otherwise permitted by the provisions of this Agreement) be stamped or otherwise imprinted
with a legend substantially similar to the following (in addition to any legend required under
applicable state securities laws or any other applicable agreements):
THE SHARES REPRESENTED BY THIS CERTIFICATE ARE SUBJECT TO, AND MAY BE TRANSFERRED
ONLY IN COMPLIANCE WITH, A REGISTRATION RIGHTS AGREEMENT AMONG THE COMPANY, THE
HOLDER OF THESE SECURITIES AND CERTAIN OTHER HOLDERS OF
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THE COMPANY’S SECURITIES, A COPY OF WHICH IS ON FILE AT THE PRINCIPAL OFFICE OF THE
COMPANY AND WILL BE FURNISHED TO THE RECORD HOLDER OF THIS CERTIFICATE WITHOUT
CHARGE UPON WRITTEN REQUEST TO THE COMPANY.
(c)
Amendments and Waivers
. The provisions of this Agreement may be amended or
terminated, and the Company may take any action herein prohibited, or omit to perform any act
herein required to be performed by it, only if approved in writing by the each Stockholder or by
any agreement permitted by this
Section 7
.
(d)
Binding Effect
. This Agreement shall bind and inure to the benefit of the
respective successors (including any successor resulting from a merger or similar reorganization),
assigns, heirs, and personal representatives of the Parties. In addition, without limiting the
generality of the foregoing, if any Stockholder liquidates or reorganizes such that its assets are
transferred to its own equity owners or partners or to another entity, such equity owners, partners
or entity shall succeed to all of the rights of such Stockholder hereunder.
(e)
Governing Law
. This Agreement shall be construed and interpreted in accordance
with the internal laws of the State of Delaware without regard to any choice of law or conflict of
law, choice of forum or provision, rule or principle (whether of the State of Delaware or any other
jurisdiction) that might otherwise refer construction or interpretation of this Agreement to the
substantive law of another jurisdiction. The Parties hereby irrevocably (i) submit themselves to
the non-exclusive jurisdiction of the state and federal courts sitting in the State of Delaware and
(ii) waive the right and shall not assert by way of motion, as a defense or otherwise in any
action, suit or other legal proceeding brought in any such court, any claim that it, he or she is
not subject to the jurisdiction of such court, that such action, suit or proceeding is brought in
an inconvenient forum or that the venue of such action, suit or proceeding is improper. Each Party
also irrevocably and unconditionally consents to the service of any process, pleadings, notices or
other papers in a manner permitted by the notice provisions of Section 7(a). EACH PARTY HEREBY
IRREVOCABLY WAIVES ALL RIGHT TO TRIAL BY JURY IN ANY ACTION, PROCEEDING OR COUNTERCLAIM (WHETHER
BASED ON CONTRACT, TORT OR OTHERWISE) ARISING OUT OF OR RELATING TO THIS AGREEMENT OR THE ACTIONS
OF SUCH PARTY IN THE NEGOTIATION, ADMINISTRATION, PERFORMANCE AND ENFORCEMENT HEREOF.
(f)
Counterparts
. This Agreement may be executed in two or more counterparts
(delivery of which may occur via facsimile), each of which shall be binding as of the date first
written above, and, when delivered, all of which shall constitute one and the same instrument.
This Agreement and any other certificate, instrument, agreement or document required to be
delivered pursuant to the terms of the Transfer Agreement, and any amendments hereto or thereto, to
the extent signed and delivered by means of a facsimile machine or as an attachment to an
electronic mail message in “pdf” or similar format, shall be treated in all manner and respects as
an original agreement or instrument and shall be considered to have the same binding legal effect
as if it were the original signed version thereof delivered in person. At the request of either
Party hereto or to any such agreement or instrument, the Party hereto or thereto shall re-execute
original forms thereof and deliver them to the other Party. No Party hereto or to any such
agreement or instrument shall raise the use of a facsimile machine or electronic mail
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attachment in “pdf” or similar format to deliver a signature or the fact that any signature or
agreement or instrument was transmitted or communicated through the use of a facsimile machine or
as an attachment to an electronic mail message as a defense to the formation of a contract and each
such Party forever waives any such defense. A facsimile signature or electronically scanned copy
of a signature shall constitute and shall be deemed to be sufficient evidence of a Party’s
execution of this Agreement, without necessity of further proof. Each such copy shall be deemed an
original, and it shall not be necessary in making proof of this Agreement to produce or account for
more than one such counterpart.
(g)
Interpretation
. Unless the context of this Agreement clearly requires otherwise,
(i) references to the plural include the singular, the singular the plural, the part the whole,
(ii) references to any gender include all genders, (iii) “including” has the inclusive meaning
frequently identified with the phrase “but not limited to,” and (iv) references to “hereunder” or
“herein” relate to this Agreement. The section and other headings contained in this Agreement are
for reference purposes only and shall not control or affect the construction of this Agreement or
the interpretation thereof in any respect. Section, subsection, Schedule and Exhibit references
are to this Agreement unless otherwise specified. Each accounting term used herein that is not
specifically defined herein shall have the meaning given to it under GAAP. Any reference to a
Party’s being satisfied with any particular item or to a Party’s determination of a particular item
presumes that such standard will not be achieved unless such Party shall be satisfied or shall have
made such determination in its sole or complete discretion.
[THE BALANCE OF THIS PAGE INTENTIONALLY LEFT BLANK]
*************************
8
IN WITNESS WHEREOF, the Parties have executed this Registration Rights Agreement as of the
date first written above.
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HEALTH BENEFITS DIRECT CORPORATION
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By:
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/s/ Alvin H. Clemens
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Name:
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Alvin H. Clemens
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Title:
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Chief Executive Officer and Chairman
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STOCKHOLDER:
COMPUTER COMMAND AND CONTROL COMPANY
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By:
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/s/ Noah S. Prywes (by Robert Oakes, Attorney in fact)
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Name:
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Noah S. Prywes
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Title:
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President
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Signature Page to Registration Rights Agreement (CCCC)
Exhibit 4.2
REGISTRATION RIGHTS AGREEMENT
This Registration Rights Agreement (this “
Agreement
”) is made and entered into as of
October 1, 2007, by and between Health Benefits Direct Corporation, a Delaware corporation (the
“
Company
”), and Robert J. Oakes, Jeff Brocco, Tim Savery and Lisa Roetz (each individually
a “
Stockholder
” and collectively the “
Stockholders
”). The Company and each of the
Stockholders hereinafter may be referred to individually as a “
Party
,” and collectively as
the “
Parties
.”
Background
This Agreement is made pursuant to the Agreement and Plan of Merger, dated as of September 21,
2007, by and among the Company, HBDC Acquisition LLC, a Delaware limited liability company and
wholly owned subsidiary of the Company, System Consulting Associates, Inc., a Pennsylvania
corporation, (“
SCA
”), and the Stockholders (the “
Merger Agreement
”).
Agreement
The Company and the Stockholders hereby agree as follows:
1.
Definitions
. As used in this Agreement, the following terms have the meanings specified
in this Section 1.
(a) “
1933 Act
” is defined in
Section 2(a)
.
(b) “
1934 Act
” is defined in
Section 5
.
(c) “
Agreement
” is defined in the Introduction above.
(d) “
Common Stock
” means the Common Stock, par value $0.001 per share, of the Company.
(e) “
Company
” is defined in the Introduction above.
(f) “
Losses
” is defined in
Section 5
.
(g) “
Merger Agreement
” is defined in the Background above.
(h) “
Party
” and “
Parties
” are defined in the Introduction above.
(i) “
Person
” means any natural person, business trust, corporation, partnership,
limited liability company, joint stock company, proprietorship, association, trust, joint venture,
unincorporated association or any other legal entity of whatever nature.
(j) “
Piggyback Registration
” is defined in
Section 2(a)
.
(k) “
Registrable Securities
” means the Common Stock acquired by the Stockholders under
the Merger Agreement. As to any particular Registrable Securities, such securities will cease to
be Registrable Securities when they have been (i) effectively registered under the 1933 Act and
disposed of in accordance with a registration statement covering them, (ii) transferred pursuant to
Rule 144 (or any similar provision then in force), or (iii) sold in a private transaction to
someone other than the Stockholders.
(l) “
Registration Expenses
” means all expenses incident to the Company’s performance
of or compliance with this Agreement, including all registration and filing fees, fees and expenses
of compliance with securities or blue sky laws, printing expenses, messenger and delivery expenses,
expenses and fees for listing the Registrable Securities on exchanges on which similar securities
issued by the Company are then listed, and fees and disbursements of counsel for the Company and of
all independent registered public accountants, underwriters (other than Underwriting Commissions)
and other Persons retained by the Company.
(m) “
SEC
” means the Securities and Exchange Commission, or such other comparable
agency or commission, and any successor agency thereto.
(n) “
Stockholders
” is defined in the Introduction above.
(o) “
Third Party Registrable Securities
” means securities of the Company other than
Registrable Securities, held by a Person other than the Stockholders, that the Company intends to
include in a registration of securities under the 1933 Act.
(p) “
Underwriting Commissions
” means all underwriting discounts or commissions
relating to the sale of securities of the Company, but excludes any expenses reimbursed to
underwriters.
2.
Piggyback Registrations
.
(a)
Right to Piggyback
. Whenever the Company proposes to register any of its
securities under the Securities Act of 1933, as amended (the “
1933 Act
”), and the
registration form to be used may be used for the registration of Registrable Securities, the
Company shall give prompt written notice to all holders of Registrable Securities and shall include
in such registration, subject to the allocation provisions below, all Registrable Securities with
respect to which the Company has received written requests for inclusion within 20 calendar days
after the Company’s mailing of such notice (a “
Piggyback Registration
”). The Company shall
not select a form of registration statement that imposes, for its use, limitations on the maximum
value or number of securities that may be registered if these limitations would preclude
registration of the Registrable Securities that the Company has been requested to include in such
registration. It is the Company’s current intention to initiate the registration of certain shares
of its Common Stock within sixty days after the date of this Agreement.
(b)
Piggyback Expenses
. In all Piggyback Registrations, the Company shall pay the
Registration Expenses related to the Registrable Securities of the Stockholders, but each of the
Stockholders shall pay the Underwriting Commissions related to his or her Registrable Securities.
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(c)
Priority on Primary Registrations
. If a Piggyback Registration is an underwritten
primary offering of the Company’s securities, and the managing underwriter(s) advise the Company in
writing that in their opinion the number of securities requested to be included in such
registration exceeds the number that can be sold in such offering at a price reasonably related to
fair value, the Company shall allocate the securities to be included as follows: (i) first, the
securities the Company proposes to sell on its own behalf, and (ii) second, Registrable Securities
requested to be included in such registration and Third Party Registrable Securities, if any, pro
rata on the basis of the number of Registrable Securities requested to be included in such
registration in proportion to the aggregate number of Registrable Securities requested to be
included in such registration plus Third Party Registrable Securities. For illustration purposes
only, if any Stockholder requests that 100 shares be included in a registration and 200 Third Party
Registrable Securities are also to be included in such registration, but the total remaining
available securities under such registration is 150 shares, then 50 shares of Registrable
Securities, and 100 shares of Third Party Registrable Securities, would be included in such
registration.
(d)
Priority on Secondary Registrations
. If a Piggyback Registration is initiated as
an underwritten secondary offering of the Company’s securities and the managing underwriter(s)
advise the Company in writing that in their opinion the number of securities requested to be
included in such registration exceeds the number that can be sold in such offering at a price
reasonably related to fair value, the Company shall allocate the securities to be included as
follows: (i) first, the securities requested to be included by the holders initiating such
registration, or the Company as the case may be, and (ii) second, Registrable Securities requested
to be included in such registration and Third Party Registrable Securities (other than securities
covered by item (i) immediately above), if any, pro rata on the basis of the number of Registrable
Securities requested to be included in such registration in proportion to the aggregate number of
Registrable Securities requested to be included in such registration plus Third Party Registrable
Securities.
(e)
Selection of Underwritten Offerings
. If an underwritten offering is contemplated
in connection with a Piggyback Registration, the Company, if the registration is under
Section 2(c)
, or the holders initiating such registration or the Company, as applicable, if
the registration is under
Section 2(d)
, shall select the investment banker(s) and
manager(s) to be retained in connection with such offering and make any other decisions regarding
the underwriting arrangements for the offering.
3.
Contemporaneous Sales
.
Neither the Stockholders nor the Company shall effect any public sale or distribution of
equity securities of the Company or any securities convertible into or exchangeable or exercisable
for such securities during the seven calendar days prior to and the 90 calendar days after any
underwritten Piggyback Registration has become effective (except as part of such underwritten
registration).
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4.
Registration Procedures
.
Whenever any of the Stockholders have requested that any Registrable Securities be registered
pursuant to
Section 2
of this Agreement, the Company shall, within a reasonable time:
(a) prepare and file with the SEC a registration statement with respect to such Registrable
Securities and use its best efforts to cause such registration statement to become effective
(provided that, before filing a registration statement or prospectus or any amendments or
supplements thereto, the Company shall furnish each of the Stockholders with copies of all such
documents proposed to be filed);
(b) prepare and file with the SEC such amendments and supplements to such registration
statement and the prospectus used in connection therewith as may be necessary to keep such
registration statement effective for a period of not less than 120 calendar days, or for such
longer period of time as may be necessary to complete the distribution contemplated by the
registration statement;
(c) furnish to each of the Stockholders such number of copies of such registration statement,
each amendment and supplement thereto and the prospectus (including each preliminary prospectus)
prepared in conformity with the 1933 Act, and such other documents as such holder may reasonably
request in order to facilitate the disposition of the Registrable Securities owned by such holder;
(d) use its best efforts to register or qualify such Registrable Securities under such other
securities or blue sky laws of such jurisdictions as the managing underwriter(s) or such holders
may reasonably request;
(e) at any time when a prospectus relating to such registration is required to be delivered
under the 1933 Act and during the period that the Company is required to keep the registration
statement effective, notify each of the Stockholders of the happening of any event as a result of
which the prospectus included in such registration statement contains an untrue statement of a
material fact or omits any fact necessary to make the statement therein not misleading in light of
the circumstances then existing, and, at the request of any such holder, the Company shall prepare
a supplement or amendment to such prospectus so that, as thereafter delivered to the purchasers of
such Registrable Securities, such prospectus will not contain an untrue statement of a material
fact or omit to state any fact necessary to make the statement therein not misleading in light of
the circumstances then existing;
(f) except as otherwise provided herein, cause all such Registrable Securities to be listed or
included on securities exchanges on which similar securities issued by the Company are then listed
or included;
(g) provide a transfer agent and registrar for all such Registrable Securities and a CUSIP
number for all such Registrable Securities, in each case not later than the effective date of such
registration statement;
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(h) enter into such customary agreements (including an underwriting agreement in customary
form) and take such other customary actions as may be reasonably necessary to expedite or
facilitate the disposition of such Registrable Securities;
(i) obtain a “comfort” letter addressed to the Company from its independent public accountants
in customary form and covering such matters of the type customarily covered by “comfort” letters;
and
(j) make available for inspection by each of the Stockholders, any underwriter participating
in any disposition pursuant to such registration statement, and any attorney, accountant or other
agent retained by any such holder or underwriter, all financial and other records, pertinent
corporate documents and properties of the Company, and cause the Company’s officers, directors and
employees to supply all information reasonably requested by any such holder, underwriter, attorney,
accountant or agent in connection with such registration statement.
5.
Indemnification
.
(a) The Company shall indemnify, to the extent permitted by law, each of the Stockholders, and
each such Stockholder’s officers, directors and managers and each Person who controls such holder
(within the meaning of the 1933 Act or the Exchange Act of 1934, as amended (the “
1934
Act
”)), if applicable, against all losses, claims, damages, liabilities (joint or several) and
expenses (including reasonable attorneys’ and other professionals’ fees) (collectively,
“
Losses
”) arising out of or resulting from (i) any untrue or alleged untrue statement of
material fact contained in any registration statement, prospectus or preliminary prospectus or any
omission or alleged omission to state therein a material fact required to be stated therein or
necessary to make the statements therein not misleading in light of the circumstances then
existing, except insofar as the same are caused by or contained in any information furnished in
writing to the Company by such holder expressly for use therein or by any such holder’s failure to
deliver a copy of the registration statement or prospectus or any amendments or supplements thereto
after the Company has furnished such holder with a sufficient number of copies of the same; or (ii)
any violation or alleged violation by the Company of any of the 1933 Act, the 1934 Act or any
applicable state securities laws, or any rules promulgated under any such acts or laws. In
connection with an underwritten offering, the Company shall indemnify the underwriters, their
officers and directors, and each Person who controls such underwriters (within the meaning of the
1933 Act or the 1934 Act) to the same extent as provided above with respect to the indemnification
of the Stockholders.
(b) In connection with any registration statement in which any Stockholder is participating,
each such Stockholder shall furnish to the Company in writing such information as is reasonably
requested by the Company for use in any such registration statement or prospectus and shall
indemnify, to the extent permitted by law, the Company, its officers, directors and managers and
each Person who controls the Company (within the meaning of the 1933 Act or the 1934 Act), against
any Losses resulting from any untrue or alleged untrue statement of material fact or any omission
or alleged omission of a material fact required to be stated in the registration statement or
prospectus or any amendment thereof or supplement thereto or necessary to make the statements
therein not misleading in light of the circumstances then existing, but only to the
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extent that such untrue statement or omission is contained in information so furnished in
writing by the Stockholders specifically for use in preparing the registration statement.
Notwithstanding the foregoing, the liability of each of the Stockholders under this
Section
5(b)
shall be limited to an amount equal to the net proceeds actually received by the
Stockholder from the sale of Registrable Securities covered by the registration statement.
(c) Any Person entitled to indemnification hereunder shall (i) give prompt notice to the
indemnifying Party of any claim with respect to which it seeks indemnification, and (ii) unless in
such indemnified Party’s reasonable judgment a conflict of interest between such indemnified and
indemnifying Parties may exist with respect to such claim, permit such indemnifying Party to assume
the defense of such claim with counsel reasonably satisfactory to the indemnified Party. If such
defense is assumed, the indemnifying Party shall not be subject to any liability for any settlement
made without its consent (but such consent will not be unreasonably withheld). An indemnifying
Party who is not entitled, or elects not, to assume the defense of a claim shall not be obligated
to pay the fees and expenses of more than one counsel for all Parties indemnified by such
indemnifying Party with respect to such claim, unless in the reasonable judgment of any indemnified
Party a conflict of interest may exist between such indemnified Party and any other of such
indemnified Parties with respect to such claim.
6.
Participation in Underwritten Offerings
.
No Stockholder may participate in any underwritten offering hereunder unless such Stockholder
(a) agrees to sell its securities on the basis provided in any underwriting arrangements approved
by the Person or Persons entitled hereunder to approve such arrangements under
Section
2(e)
, and (b) completes and executes all questionnaires, powers of attorney, indemnities,
underwriting agreements, holdback agreements and other documents required under the terms of such
underwriting arrangements.
7.
Miscellaneous
.
(a)
Notices
. All notices that are required or permitted hereunder shall be in writing
and shall be sufficient if personally delivered or sent by facsimile, registered or certified mail
or Federal Express or other nationally recognized overnight delivery service. Any notices shall be
deemed given upon the earlier of the date when received at, the day when delivered via facsimile or
the third calendar day after the date when sent by registered or certified mail or the calendar day
after the date when sent by Federal Express to, the address of the respective Party as set forth in
the Merger Agreement, unless such address has been changed by notice to the other Parties hereto.
(b)
Restrictive Legend
. Each certificate representing Registrable Securities shall
(unless otherwise permitted by the provisions of this Agreement) be stamped or otherwise imprinted
with a legend substantially similar to the following (in addition to any legend required under
applicable state securities laws or any other applicable agreements):
THE SHARES REPRESENTED BY THIS CERTIFICATE ARE SUBJECT TO, AND MAY BE TRANSFERRED
ONLY IN COMPLIANCE WITH, A REGISTRATION RIGHTS AGREEMENT AMONG THE COMPANY, THE
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HOLDER OF THESE SECURITIES AND CERTAIN OTHER HOLDERS OF THE COMPANY’S SECURITIES, A
COPY OF WHICH IS ON FILE AT THE PRINCIPAL OFFICE OF THE COMPANY AND WILL BE
FURNISHED TO THE RECORD HOLDER OF THIS CERTIFICATE WITHOUT CHARGE UPON WRITTEN
REQUEST TO THE COMPANY.
(c)
Amendments and Waivers
. The provisions of this Agreement may be amended or
terminated, and the Company may take any action herein prohibited, or omit to perform any act
herein required to be performed by it, only if approved in writing by the each Stockholder or by
any agreement permitted by this
Section 7
.
(d)
Binding Effect
. This Agreement shall bind and inure to the benefit of the
respective successors (including any successor resulting from a merger or similar reorganization),
assigns, heirs, and personal representatives of the Parties. In addition, without limiting the
generality of the foregoing, if any Stockholder liquidates or reorganizes such that its assets are
transferred to its own equity owners or partners or to another entity, such equity owners, partners
or entity shall succeed to all of the rights of such Stockholder hereunder.
(e)
Governing Law
. This Agreement shall be construed and interpreted in accordance
with the internal laws of the State of Delaware without regard to any choice of law or conflict of
law, choice of forum or provision, rule or principle (whether of the State of Delaware or any other
jurisdiction) that might otherwise refer construction or interpretation of this Agreement to the
substantive law of another jurisdiction. The Parties hereby irrevocably (i) submit themselves to
the non-exclusive jurisdiction of the state and federal courts sitting in the State of Delaware and
(ii) waive the right and shall not assert by way of motion, as a defense or otherwise in any
action, suit or other legal proceeding brought in any such court, any claim that it, he or she is
not subject to the jurisdiction of such court, that such action, suit or proceeding is brought in
an inconvenient forum or that the venue of such action, suit or proceeding is improper. Each Party
also irrevocably and unconditionally consents to the service of any process, pleadings, notices or
other papers in a manner permitted by the notice provisions of Section 7(a). EACH PARTY HEREBY
IRREVOCABLY WAIVES ALL RIGHT TO TRIAL BY JURY IN ANY ACTION, PROCEEDING OR COUNTERCLAIM (WHETHER
BASED ON CONTRACT, TORT OR OTHERWISE) ARISING OUT OF OR RELATING TO THIS AGREEMENT OR THE ACTIONS
OF SUCH PARTY IN THE NEGOTIATION, ADMINISTRATION, PERFORMANCE AND ENFORCEMENT HEREOF.
(f)
Counterparts
. This Agreement may be executed in two or more counterparts
(delivery of which may occur via facsimile), each of which shall be binding as of the date first
written above, and, when delivered, all of which shall constitute one and the same instrument.
This Agreement and any other certificate, instrument, agreement or document required to be
delivered pursuant to the terms of the Merger Agreement, and any amendments hereto or thereto, to
the extent signed and delivered by means of a facsimile machine or as an attachment to an
electronic mail message in “pdf” or similar format, shall be treated in all manner and respects as
an original agreement or instrument and shall be considered to have the same binding legal effect
as if it were the original signed version thereof delivered in person. At the request of any Party
hereto or to any such agreement or instrument, each other Party hereto or thereto shall re-execute
original forms thereof and deliver them to all other Parties. No Party hereto or to any such
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agreement or instrument shall raise the use of a facsimile machine or electronic mail
attachment in “pdf” or similar format to deliver a signature or the fact that any signature or
agreement or instrument was transmitted or communicated through the use of a facsimile machine or
as an attachment to an electronic mail message as a defense to the formation of a contract and each
such Party forever waives any such defense. A facsimile signature or electronically scanned copy
of a signature shall constitute and shall be deemed to be sufficient evidence of a Party’s
execution of this Agreement, without necessity of further proof. Each such copy shall be deemed an
original, and it shall not be necessary in making proof of this Agreement to produce or account for
more than one such counterpart.
(g)
Interpretation
. Unless the context of this Agreement clearly requires otherwise,
(i) references to the plural include the singular, the singular the plural, the part the whole,
(ii) references to any gender include all genders, (iii) “including” has the inclusive meaning
frequently identified with the phrase “but not limited to,” and (iv) references to “hereunder” or
“herein” relate to this Agreement. The section and other headings contained in this Agreement are
for reference purposes only and shall not control or affect the construction of this Agreement or
the interpretation thereof in any respect. Section, subsection, Schedule and Exhibit references
are to this Agreement unless otherwise specified. Each accounting term used herein that is not
specifically defined herein shall have the meaning given to it under GAAP. Any reference to a
Party’s being satisfied with any particular item or to a Party’s determination of a particular item
presumes that such standard will not be achieved unless such Party shall be satisfied or shall have
made such determination in its sole or complete discretion.
[THE BALANCE OF THIS PAGE INTENTIONALLY LEFT BLANK]
*************************
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IN WITNESS WHEREOF, the Parties have executed this Registration Rights Agreement as of the
date first written above.
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HEALTH BENEFITS DIRECT CORPORATION
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By:
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/s/ Alvin H. Clemens
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Name:
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Alvin H. Clemens
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Title:
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Chief Executive Officer and Chairman
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STOCKHOLDERS
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/s/ Robert J. Oakes
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Robert J. Oakes
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/s/ Jeff Brocco
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Jeff Brocco
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/s/ Tim Savery
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Tim Savery
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/s/ Lisa Roetz
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Lisa Roetz
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Signature Page to Registration Rights Agreement (SCA Shareholders)
Exhibit 10.1
AGREEMENT TO TRANSFER PARTNERSHIP INTERESTS
This Agreement to Transfer Partnership Interests (this “Agreement”) is executed and delivered
as of October 1, 2007, and is by and among the former BileniaTech, L.P. partners who hold
partnership interests in Atiam Technologies L.P., as set forth on the signature page hereto (each,
a “BileniaTech Holder” and collectively, the “BileniaTech Holders”) and HBDC Acquisition, LLC, a
Delaware limited liability company (“Acquisition Sub”).
W I T N E S S E T H:
WHEREAS
, Acquisition Sub is a wholly owned subsidiary of Health Benefits Direct Corporation
(“HBDC”) formed by HBDC for the purpose of acquiring all of the general and limited partnership
interests of Atiam Technologies L.P., a Delaware limited partnership (“Atiam”);
WHEREAS
, the general and limited partnership interests of Atiam are held by the BileniaTech
Holders and by System Consulting Associates, Inc., a Pennsylvania corporation (“SCA”);
WHEREAS
, SCA owns 59.4% of the limited partnership interests in Atiam and 60% of the member
interests in Atiam Technologies GP LLC, a Delaware limited liability company, and the sole general
partner of Atiam (the “Atiam General Partner”), which Atiam General Partner owns a 1.0% general
partner interest in Atiam; and the BileniaTech Holders collectively own 39.6% of the limited
partnership interests in Atiam and Noah Prywes, a BileniaTech Holder, owns 40% of the member
interests in the Atiam General Partner (collectively, the “BileniaTech Atiam Interests”);
WHEREAS
, HBDC, Acquisition Sub, SCA and the shareholders of SCA are all parties to that
certain Agreement and Plan of Merger, dated September 21, 2007 ( the “Merger Agreement”), pursuant
to which SCA will merge with and into Acquisition Sub;
WHEREAS
, one of the closing conditions to the consummation of the transactions contemplated by
the Merger Agreement is the acquisition, by Acquisition Sub, of all of the BileniaTech Atiam
Interests; and
WHEREAS
, each BileniaTech Holder has agreed to sell his, her or its BileniaTech Atiam Interest
to HBDC, or an affiliate of HBDC, either directly or through a transaction effected by SCA, and
each BileniaTech Holder has executed and delivered an irrevocable power of attorney granting Robert
Oakes, the President of SCA, the authority to execute documents, such as this Agreement, on his,
her or its behalf to effect such sale and transfer of his, her or its BileniaTech Atiam Interest.
NOW, THEREFORE
, the parties hereto, for good and valuable consideration, the receipt and
sufficiency of which is hereby acknowledged, and intending to be legally bound hereby, and
intending to incorporate the above recitals herein, agree as follows:
A G R E E M E N T:
1.
Sale and Transfer
. In exchange for the payment of the consideration set forth on
Schedule A
attached to this Agreement and made a part hereof, the receipt and sufficiency
of which is hereby acknowledged, upon execution of this Agreement by the parties hereto, each
BileniaTech Holder does hereby transfer and convey to Acquisition Sub his, her or its BileniaTech
Atiam Interest, together with and including as a part thereof, all right, title and interest of
such BileniaTech Holder, including all rights to distributions, income, profits, losses and return
of capital. For the avoidance of doubt, the sale and transfer hereunder by Noah Prywes includes
the sale of his 40% member interest in the Atiam General Partner. Each such BileniaTech Atiam
Interest is transferred free of all Liens (as defined in the Merger Agreement).
2.
Payment of Purchase Price
. Acquisition Sub shall pay the consideration set forth
on Schedule A to each of the BileniaTech Holders in accordance with the instructions provided by
Robert J. Oakes.
3.
Execution of a Registration Rights Agreement
. As noted on
Schedule A
attached hereto, the sale and transfer of the BileniaTech Atiam Interest held by Computer Command
and Control Company is subject to and conditioned upon execution and delivery of a Registration
Rights Agreement between HBDC and Computer Command and Control Company.
4.
Delivery of Accredited Investor Questionnaire
. The issuance of shares of common
stock, par value $0.001 per share, of HBDC (the “Common Stock”) as consideration for the
BileniaTech Atiam Interest held by Computer Command and Control Company, as set forth on
Schedule A
, is subject to and conditioned upon execution and delivery to HBDC of an
executed accredited investor questionnaire by Computer Command and Control Company.
5.
Withdrawal
.
(a) Simultaneously with the sale set forth in Section 1 of this Agreement and the payment of
the consideration as described in Section 2 of this Agreement, each BileniaTech Holder hereby
withdraws from Atiam as a limited partner and ceases to be a limited partner of Atiam, and has no
further right to exercise any right or power as a limited partner of Atiam.
(b) Simultaneously with the sale set forth in Section 1 of this Agreement and the payment of
the consideration as described in Section 2 of this Agreement, Noah Prywes hereby ceases to be a
member of the Atiam General Partner and ceases to hold any general partnership interest in Atiam,
and has no further right to exercise any right or power as a general partner of Atiam.
6.
Future Cooperation
. Each of the parties hereto agrees to cooperate at all times
from and after the date hereof with respect to all of the matters described herein, and to execute
such further assignments, releases, consents, notifications and other documents as may be
reasonably requested for the purpose of giving effect to, or evidencing or giving notice of, the
transactions contemplated by this Agreement.
7.
Governing Law
. This Agreement shall be construed and enforced in accordance with
and governed by the laws of the State of Delaware, without giving effect to the conflicts of laws
provisions thereof.
8.
Binding Effect
. This Agreement shall be binding upon and inure to the benefit of the
parties hereto and their respective heirs, executors, personal representatives, successors and
assigns.
IN WITNESS WHEREOF
, the parties hereto have caused this Agreement to be duly executed as of the day
and year first written above.
HBDC ACQUISITION, LLC
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/s/ Anthony R. Verdi
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By:
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Anthony R. Verdi
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Title:
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President
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BILENIATECH HOLDERS:
Computer Command and Control Company
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*
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By:
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Noah Prywes
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Its:
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President
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Noah Prywes
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Anthony Newshel
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Dominique Butts
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Jeffrey Derr
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Amy Fritsky
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By: Robert J. Oakes as Attorney-in-Fact
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Exhibit 99.1
Health Benefits Direct Announces Closure of Atiam Technologies Acquisition
Radnor, PA — October 2, 2007 — Health Benefits Direct Corporation (OTC Bulletin Board: HBDT), a
leading technology innovator in the direct marketing and distribution of a wide range of health and
life insurance and related products for individuals and families, today announced that it has
closed on its previously announced acquisition of Atiam Technologies, a provider of comprehensive,
web-based insurance administration software applications that support individual insurance
products. Health Benefits Direct acquired Atiam for an aggregate purchase price of $3.0 million in
cash and stock, and the transaction was completed on October 1, 2007. Atiam Technologies now
operates as a wholly-owned subsidiary of Health Benefits Direct.
Alvin H. Clemens, Chairman and Chief Executive Officer of Health Benefits Direct stated, “This
acquisition is a major strategic development for our company, and we are pleased to welcome the
Atiam team and their top-tier customers including Aetna, Prudential and Nationwide Provident to our
agency. We believe Atiam’s insurance administration system can provide the missing link for
carriers, providing the transition that will enable direct three-way connectivity between our
Insurint™ quote engine, the agent and the carrier. Most carriers cannot efficiently build their
own connectivity with the individual market, so we are now able to facilitate that transition
directly for our carrier partners, opening the door for their immediate entry into the individual
health insurance market.”
Atiam Technologies provides high function, high value software products for the insurance and
financial services industries including InsPro, a flexible, industrial-strength and feature rich
insurance marketing, administration, claims and commission system. InsPro supports individual
health insurance products, including major medical, life, disability, long term care, HIP, HAP, and
Medicare supplement products. The system also includes support for various distribution channels
such as direct marketing, policy-owner marketing, agent sold, and worksite marketing.
About Health Benefits Direct Corporation
Health Benefits Direct Corporation is a technologically innovative contact center-based insurance
agency that operates an interactive online marketplace enabling consumers to shop for, compare, and
apply for health and life insurance and related products for individuals and families. Its
streamlined Quick-to-Call sales platform, supported by its proprietary online technology, dialing
applications and tele-application and voice signature process, promotes efficiency for consumers
purchasing and carriers underwriting insurance products. Though its subsidiary, Insurint
Corporation, Health Benefits Direct has developed a proprietary, professional-grade, web-based
agent quote engine portal that aggregates accurate real-time quotes from multiple highly-rated
carriers of health and life insurance and related products. Insurint’s user-friendly platform
enables agents to view and share with proposed insureds detailed comparisons of multiple products,
policy brochures and other useful information instantly, resulting in a highly competitive
application processing platform for agents and consumers.
www.healthbenefitsdirect.com
Page 2 of 2
About Atiam Technologies
Headquartered in Eddystone, PA, Atiam Technologies is an information technology product and
services company specializing in the financial services industry, with specific expertise in the
insurance, EFT, payment, and customer service vertical markets. Atiam has experience in nearly all
facets of information technology including project management, systems development, data analysis,
design and warehouse implementation, consulting, and third party/outsourced processing services.
For more
information, please visit
www.atiam-tech.com.
Safe Harbor Statement
In addition to historical facts or statements of current condition, this press release contains
forward-looking statements within the meaning of the “Safe Harbor” provisions of The Private
Securities Litigation Reform Act of 1995, including statements regarding the expected advantages of
Health Benefits Direct’s acquisition of Atiam Technologies. Forward-looking statements provide
Health Benefits Direct’s current expectations or forecasts of future events. Actual events could
differ materially from those reflected in these forward-looking statements, such as if Health
Benefits Direct does not effect the acquisition transaction on or around the stated closure date.
Given these risks and uncertainties, any or all of these forward-looking statements may prove to be
incorrect. Therefore, you should not rely on any such factors or forward-looking statements.
Health Benefits Direct undertakes no obligation to update publicly any forward-looking statement.
Contact:
Brandi Piacente
The Piacente Group
212-481-2050
brandi@thepiacentegroup.com
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