Document:

exv4w2

Exhibit 4.2

REGISTRATION RIGHTS AGREEMENT

          This Registration Rights Agreement (this “Agreement") is made and entered into as of January
14, 2009, by and among Health Benefits Direct Corporation, a Delaware corporation (the “Company"),
and the investors signatory hereto (each a “Investor” and collectively, the “Investors").

          This Agreement is made pursuant to the Securities Purchase Agreement, dated as of the date
hereof, among the Company and the Investors (the “Purchase Agreement”).

          In consideration of the mutual covenants contained in this Agreement, and for other good and
valuable consideration, the receipt and adequacy of which are hereby acknowledged, the Company and
the Investors hereby agree as follows, with the intent to be legally bound hereby:

     1. Definitions. Capitalized terms used and not otherwise defined herein that are
defined in the Purchase Agreement shall have the meanings given such terms in the Purchase
Agreement. As used in this Agreement, the following terms shall have the respective meanings set
forth in this Section 1:

          “Common Stock” means the common stock, par value $0.001 per share, of the Company.

          “Conversion Shares” means the shares of Common Stock issuable upon conversion of the Preferred
Stock.

          “Demand Notice” has the meaning set forth in Section 2(a) of this Agreement.

          “Effective Date” means the date that the Registration Statement filed pursuant to Section
2(a), 2(b) or 2(c) of this Agreement is first declared effective by the Commission.

          “Effectiveness Date” means: (a) with respect to the initial Registration Statement required to
be filed under Section 2(a) to cover the resale by the Holders of the Registrable Securities the
60th calendar day after the Filing Date (or the 120th calendar day after the Filing Date in the
event that such Registration Statement is subject to review by the Commission) and (b) with respect
to any additional Registration Statements that may be required pursuant to Section 2(b) or 2(c)
hereof, the 90th calendar day following the date on which the Company first knows, or reasonably
should have known, that such additional Registration Statement is required under such Section (or
the 150th calendar day after such date in the event that such Registration Statement is subject to
review by the Commission).

          “Effectiveness Period” shall have the meaning set forth in Section 2(a).

          “Exchange Act” means the Securities Exchange Act of 1934, as amended.

          “Excluded Registration” means (i) a registration relating solely to the sale of securities to
employees of the Company or a subsidiary of the Company pursuant to a stock
option, stock purchase, or similar plan or (ii) a registration relating to a Rule 145
transaction.

 

 

          “Filing Date” means, with respect to the initial Registration Statement required to be filed
to cover the resale by the Holders of the Registrable Securities, 30 days following the receipt of
a Demand Notice.

          “Holder” or “Holders” means an Investor or Investors (as the case may be), or any transferee
or assignee of any Registrable Securities, to whom an Investor assigns its rights under this
Agreement and who agrees to become bound by the provisions of this Agreement in accordance with the
Purchase Agreement and any transferee or assignee thereof to whom a transferee or assignee of any
Registrable Securities assigns its rights under this Agreement and who agrees to become bound by
the provisions of this Agreement in accordance with the Purchase Agreement.

          “Indemnified Party” shall have the meaning set forth in Section 5(c).

          “Indemnifying Party” shall have the meaning set forth in Section 5(c).

          “Losses” shall have the meaning set forth in Section 5(a).

          “Preferred Stock” means shares of Series A Convertible Preferred Stock, $0.001 par value per
share, of the Company.

          “Proceeding” means an action, claim, suit, investigation or proceeding (including, without
limitation, an investigation or partial proceeding, such as a deposition), whether commenced or
threatened.

          “Prospectus” means the prospectus included in a Registration Statement (including, without
limitation, a prospectus that includes any information previously omitted from a prospectus filed
as part of an effective registration statement in reliance upon Rule 430A promulgated under the
Securities Act), as amended or supplemented by any prospectus supplement, with respect to the terms
of the offering of any portion of the Registrable Securities covered by such Registration
Statement, and all other amendments and supplements to such prospectus, including post-effective
amendments, and all material incorporated by reference or deemed to be incorporated by reference in
such prospectus.

          “register,” “registered,” and “registration” refer to a registration effected by preparing and
filing one or more Registration Statements (as defined below) in compliance with the Securities Act
and pursuant to Rule 415 and the declaration of effectiveness of such Registration Statement(s) by
the Commission.

          “Registrable Securities” means (i) the Shares, (ii) the Conversion Shares (iii) the Warrant
Shares and (iv) any securities issued or issuable with respect to the securities referenced in (i),
(ii), or (iii) above, including, without limitation, as a result of any stock dividend, stock split
or other distribution, recapitalization, merger, consolidation, reorganization, exchange or similar
event or otherwise (without regard to any limitations on exercises of the Warrants).

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          “Registration Statement” means the initial registration statement required to be
filed under the Securities Act in accordance with Section 2(a) and any additional registration
statement(s) required to be filed under Sections 2(b) or 2(c), including (in each case) the
Prospectus, amendments and supplements to such registration statements or Prospectus, including
pre- and post-effective amendments, all exhibits thereto, and all material incorporated by
reference or deemed to be incorporated by reference in such registration statements.

          “Rule 144” means Rule 144 promulgated by the Commission pursuant to the Securities Act, as
such Rule may be amended from time to time, or any similar rule or regulation hereafter adopted by
the Commission having substantially the same effect as such Rule.

          “Rule 415” means Rule 415 promulgated by the Commission pursuant to the Securities Act, as
such Rule may be amended from time to time, or any similar rule or regulation hereafter adopted by
the Commission having substantially the same effect as such Rule.

          “Rule 424” means Rule 424 promulgated by the Commission pursuant to the Securities Act, as
such Rule may be amended from time to time, or any similar rule or regulation hereafter adopted by
the Commission having substantially the same effect as such Rule.

          “Securities Act” means the Securities Act of 1933, as amended.

          “Shares” means the shares of Preferred Stock issued or issuable to the Investors by the
Company pursuant to the Purchase Agreement.

          “Warrants” means the warrants issued or issuable to the Investors pursuant to the Purchase
Agreement.

          “Warrant Shares” means the shares of Preferred Stock and Common Stock issued or issuable upon
exercise of the Warrants.

     2. Demand Registration.

          (a) If at any time after the date of this Agreement the Company receives a request from a
Holder of Registrable Securities that the Company file a Registration Statement on Form S-1
covering the resale of the Registrable Securities held by such Holder (a “Demand Notice”), then the
Company shall (i) within five (5) days after the date it receives the Demand Notice, give notice
thereof to all other Holders and (ii) as soon as reasonably practicable, but in no event later than
the Filing Date, file with the Commission a Registration Statement on Form S-1 covering the resale
of all Registrable Securities of the Holder that provided the Demand Notice and any additional
Registrable Securities requested by the other Holders to be included therein, as specified by each
such other Holder within twenty (20) days after such Holder has received notice from the Company
pursuant to clause (i); provided that such Registration Statement need not include Registrable
Securities already covered by an existing and effective Registration Statement The Registration
Statement shall be for an offering to be made on a continuous basis pursuant to Rule 415. The
Registration Statement shall contain (except if otherwise required pursuant to written comments
received from the Commission upon a review of such Registration Statement) the “Plan of
Distribution” attached hereto as Annex A. The Company shall use its reasonable best efforts to
cause the Registration Statement to be declared effective under the Securities Act as soon as
practicable but, in any event, no later than the Effectiveness Date, and shall use its

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reasonable best efforts to keep the Registration Statement effective under the Securities Act
until the date when all Registrable Securities covered by the Registration Statement have been sold
or may be sold without volume restrictions pursuant to Rule 144(b)(i) promulgated under the
Securities Act (the “Effectiveness Period").

          (b) If for any reason the Commission does not permit all of the Registrable Securities
requested by a Holder to be included in the Registration Statement filed pursuant to Section 2(a),
or for any other reason any such Registrable Securities are not permitted by the Commission to be
included on a Registration Statement filed under this Agreement, then the Company shall prepare and
file as soon as possible after the date on which such filing may be made, an additional
Registration Statement covering the resale of all of the Registrable Securities requested by Holder
not already covered by an existing and effective Registration Statement for an offering to be made
on a continuous basis at the market pursuant to Rule 415 or otherwise as may be acceptable to a
Holder whose Registrable Securities were not registered for resale. Each such Registration
Statement shall contain (except if otherwise required pursuant to written comments received from
the Commission upon a review of such Registration Statement) the “Plan of Distribution” attached
hereto as Annex A. The Company shall use its reasonable best efforts to cause each such
Registration Statement to be declared effective under the Securities Act as soon as possible but,
in any event, no later than its Effectiveness Date, and shall use its reasonable best efforts to
keep such Registration Statement effective under the Securities Act during the entire Effectiveness
Period..

          (c) If: (i) a Registration Statement covering all of the Registrable Securities required to be
covered thereby is not filed by the Company with the Commission on or prior to the Filing Date (or
the applicable filing date if the Registration Statement is not the initial Registration Statement
required to be filed under Section 2(a)), (ii) a Registration Statement covering all of the
Registrable Securities is not declared effective by the Commission on or prior to its required
Effectiveness Date (it being understood that if the Company shall not have filed a “final”
prospectus for the Registration Statement with the SEC under Rule 424(b) in accordance with Section
2(f) below (whether or not such a prospectus is technically required by such rule), the Company
shall not be deemed to have satisfied this clause (ii)), (iii) the Company fails to file a request
for the acceleration of the Effectiveness Date of the applicable Registration Statement as required
by Section 3(c), (iv) there is a suspension or delisting of the Company’s Common Stock (or the
Company fails to timely list all the Registrable Securities) on its principal trading market or
exchange, (v) after its Effective Date, other than during an Allowable Grace Period (as defined
below), such Registration Statement ceases to be effective and available for use by the Holders as
to any Registrable Securities to which it is required to cover at any time prior to the expiration
of its Effectiveness Period for up to no more than 3 consecutive Trading Days (or 20 Trading Days
in any 12 month period in the aggregate) (any such failure or breach being referred to as an
“Event,” and for purposes of clauses (i)-(iv), on the date on which such Event occurs, or for
purposes of clause (v), the date on which the Allowable Grace Period or other specified period is
exceeded, being referred to as “Event Date"), then, in addition to any other rights available to
the Holders under this Agreement or under applicable law: (x) on each such Event Date the Company
shall pay to each Holder an amount in cash, as partial damages and not as a penalty, equal to 1.5%
of the aggregate Investment Amount paid by such Holder pursuant to the Purchase Agreement; and (y)
on each 30-day anniversary of each such Event Date (if the applicable Event shall not have been
cured by such date) until the applicable Event is cured, the Company shall pay to each

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Holder an amount in cash, as partial damages and not as a penalty, equal to 1.5% of the
aggregate Investment Amount paid by such Holder pursuant to the Purchase Agreement. The partial
damages pursuant to the terms hereof shall apply on a pro rata basis for any portion of a month
prior to the cure of an Event. Notwithstanding the foregoing, in no event shall the partial damages
under this Section 2(d) exceed an amount equal to 20% of the aggregate Investment Amounts.

          (d) Notwithstanding anything to the contrary contained in this Agreement, in the event the
staff of the Commission (the “Staff”) or the Commission requires any Holder seeking to sell
securities under a Registration Statement filed pursuant to this Agreement to be specifically
identified as an “underwriter” in order to permit such Registration Statement to become effective,
and such Holder does not consent to being so named as an underwriter in such Registration
Statement, then in each such case, the Company shall reduce the total number of Registrable
Securities to be registered on behalf of such Holder, until such time as the Staff or the
Commission does not require such identification or until such Holder accepts such identification
and the manner thereof. Any reduction pursuant to this paragraph will first reduce all Registrable
Securities other than those issued pursuant to the Purchase Agreement and in the event of any
reduction pursuant to this paragraph, no Holder shall have any claim against the Company as a
result of such reduction and any Event or other delay or breach of this Agreement occurring
primarily due to such action by the Staff or the Commission and any such relating reduction shall
not require the Company to pay any partial damages pursuant to Section 2(d) hereof or otherwise
provide the basis for any claim by any Holder against the Company pursuant to the Transaction
Documents (it being understood that the foregoing does not constitute a waiver of Section 3.2(f) of
the Securities Purchase Agreement by any Holder or the obligations of the Company under this
paragraph and elsewhere in relation thereto). In the event of any reduction in Registrable
Securities pursuant to this paragraph, an affected Holder shall have the right to require, upon
delivery of a written request to the Company signed by the Holder, the Company to file a
registration statement within 30 days of such request (subject to any restrictions imposed by Rule
415 or required by the Staff or the Commission) for re-sale by such Holder in a manner acceptable
to such Holder, and the Company shall following such request cause to be and keep effective such
registration statement in the same manner as otherwise contemplated in this Agreement for
registration statements hereunder, in each case until such time as: (i) all Registrable Securities
held by such Holder have been registered pursuant to an effective Registration Statement in a
manner acceptable to such Holder or (ii) the Registrable Securities may be resold by such Holder
without restriction (including volume limitations) pursuant to Rule 144(b)(i) of the Securities Act
(taking account of any Staff position with respect to “affiliate” status) or (iii) the Holder
agrees to be named as an underwriter in any such Registration Statement in a manner acceptable to
Holder as to all Registrable Securities held by such Holder and that have not theretofore been
included in a Registration Statement under this Agreement (it being understood that the special
demand right under this sentence may be exercised by a Holder multiple times and with respect to
limited amounts of Registrable Securities in order to permit the re-sale thereof by such Holder as
contemplated above).

          (e) In the event that Form S-1 is not available for the registration of the resale of
Registrable Securities hereunder, the Company shall use reasonable best efforts to (i) register the
resale of the Registrable Securities on another appropriate form reasonably acceptable to the
Holders and (ii) undertake to register the Registrable Securities on Form S-1 as soon as such form
is available, provided that the Company shall use reasonable best efforts to maintain the

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effectiveness of the Registration Statement then in effect until such time as a Registration
Statement on Form S-1 covering the Registrable Securities has been declared effective by the
Commission. In the event the Company becomes eligible to register the Registrable Securities on
Form S-3, the Company shall use reasonable best efforts to promptly register the Registrable
Securities on Form S-3, provided that the Company shall use reasonable best efforts to maintain the
effectiveness of the Registration Statement(s) then in effect until such time as a Registration
Statement on Form S-3 covering the Registrable Securities has been declared effective by the
Commission.

          (f) By 5:30 p.m. on the Trading Day immediately following the Effective Date of each
Registration Statement, the Company shall file with the Commission in accordance with Rule 424
under the Securities Act the final prospectus to be used in connection with sales pursuant to such
Registration Statement.

     3. Company Registration.

          (a) If the Company proposes to register (including for this purpose, a registration effected
by the Company for stockholders other than the Holders), any of its securities under the Securities
Act in connection with the offering of such securities for cash (other than an Excluded
Registration), the Company shall, at such time, promptly give each Holder notice of the proposed
registration. Upon the request of each Holder given within twenty (20) days after such notice is
given by the Company, the Company shall, subject to the provisions of Section 3(b), cause to be
registered all of the Registrable Securities that each such holder has requested be included in
such registration. The Company shall have the right to terminate or withdraw any registration
initiated by it under this Section 3 before the effective date of such registration, whether or not
any Holder has elected to include Registrable Securities in such registration. The expenses of
such withdrawn registration shall be borne by the Company.

          (b) If a registration under Section 3(a) involves an underwritten offering by the Company, the
Company shall not be required to include any Holder’s Registrable Securities in such underwriting
unless the Holders accept the terms of the underwriting as agreed upon between the Company and its
underwriters, and then only in such quantity as the underwriters determine will not jeopardize the
success of the offering by the Company. If the total number of securities, including Registrable
Securities, requested by stockholders to be included in such offering exceeds the number of
securities to be sold (other than by the Company) that the underwriters determine is compatible
with the success of the offering, then the Company shall be required to include in the offering
only that number of such securities, including Registrable Securities, which the underwriters and
the Company determine will not jeopardize the success of the offering. If the underwriters
determine that less than all of the Registrable Securities requested to be registered can be
included in such offering, then the Registrable Securities that are included in such offering shall
be allocated among the selling Holders in proportion (as nearly as practicable) to the number of
Registrable Securities owned by each selling Holder or in such other proportions as shall mutually
be agreed to by all such selling Holders.

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     4. Registration Procedures

          In connection with the Company’s registration obligations hereunder, the Company shall:

          (a) Not less than ten (10) Trading Days prior to the filing of a Registration Statement and
not less than five (5) Trading Days prior to the filing of any related Prospectus or any amendment
or supplement thereto (except for any amendment or supplement thereto related to the filing of an
Annual Report on Form 10-K, Quarterly Reports on Form 10-Q, Current Reports on Form 8-K, and any
similar or successor reports), the Company shall furnish to the Holders copies of such document, as
proposed to be filed in substantially final form. The Company shall (A) permit each Holder to
review and comment upon (i) each Registration Statement at least five (5) Trading Days prior to its
filing with the Commission, provided that such comments are received by the Company no later than
three (3) Trading Days after providing such Registration Statement for review, and (ii) all
amendments and supplements to all Registration Statements (except for any amendment or supplement
thereto related to the filing of an Annual Report on Form 10-K, Quarterly Reports on Form 10-Q,
Current Reports on Form 8-K, and any similar or successor reports) within a reasonable number of
days prior to their filing with the Commission, provided that such comments are received by the
Company no later than three (3) Trading Days after providing such amendment or supplement for
review, and (B) shall consider all such reasonable comments in good faith.

          (b) (i) Prepare and file with the Commission such amendments, including post-effective
amendments, to each Registration Statement and the Prospectus used in connection therewith as may
be necessary to keep such Registration Statement continuously effective as to the applicable
Registrable Securities for its Effectiveness Period and prepare and file with the Commission such
additional Registration Statements in order to register for resale under the Securities Act all of
the Registrable Securities; (ii) cause the related Prospectus to be amended or supplemented by any
required Prospectus supplement, and as so supplemented or amended to be filed pursuant to Rule 424;
(iii) respond as promptly as reasonably possible to any comments received from the Commission with
respect to each Registration Statement or any amendment thereto and, as promptly as reasonably
possible provide the Holders true and complete copies of all correspondence from and to the
Commission relating to such Registration Statement that pertain to the Holders as a Selling
Stockholder or to the Plan of Distribution, but would not result in the disclosure to the Holders
of material, non-public information concerning the Company or any of its subsidiaries; and (iv)
comply in all material respects with the provisions of the Securities Act and the Exchange Act with
respect to the Registration Statements and the disposition of all Registrable Securities covered by
each Registration Statement. In the case of amendments and supplements to a Registration Statement
which are required to be filed pursuant to this Agreement (including pursuant to this Section 4(b))
by reason of the Company filing a report on Form 10-Q or Form 10-K or any analogous report under
the Exchange Act, the Company shall have incorporated such report by reference into such
Registration Statement, if applicable, or shall file such amendments or supplements with the
Commission on the same day on which the Exchange Act report is filed, if practicable. The Company
shall ensure that each Registration Statement (including any amendments or supplements thereto and
prospectuses contained therein) shall not contain any untrue statement of a material fact or omit
to state a material fact required to be stated therein, or necessary to make the statements therein
(in the case of prospectuses, in the light of the circumstances in which they were made) not
misleading.

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          (c) Notify the Holders’ Counsel (which may occur electronically and any other notifications or
documents required to be provided to a Holder or any other party hereunder may be provided
electronically pursuant to the notice provisions contained herein) as promptly as reasonably
possible and (if requested by any such Person) confirm such notice in writing no later than one
three (3) Trading Days following the day (i)(A) when a Prospectus or any Prospectus supplement or
post-effective amendment to a Registration Statement is proposed to be filed or is filed; (B) when
the Commission notifies the Company whether there will be a “review” of a Registration Statement or
post-effective amendment and whenever the Commission comments in writing on such Registration
Statement or post-effective amendment (the Company shall provide true and complete copies thereof
and all written responses thereto to each of the Holders, but not information which the Company
believes in good faith would constitute material, non-public information); and (C) with respect to
each Registration Statement or any post-effective amendment, when the same has become effective;
(ii) of any request by the Commission or any other Federal or state governmental authority for
amendments or supplements to a Registration Statement or Prospectus or for additional information
that pertains to the Holders as a Selling Stockholder or to the Plan of Distribution; (iii) of the
issuance by the Commission of any stop order or other suspension of the effectiveness of a
Registration Statement covering any or all of the Registrable Securities or the initiation of any
Proceedings for that purpose; (iv) of the receipt by the Company of any notification with respect
to the suspension of the qualification or exemption from qualification of any of the Registrable
Securities for sale in any jurisdiction, or the initiation or threatening of any Proceeding for
such purpose; and (v) of the occurrence of any event or passage of time that makes the financial
statements included in a Registration Statement ineligible for inclusion therein or any statement
made in such Registration Statement or Prospectus or any document incorporated or deemed to be
incorporated therein by reference untrue in any material respect or that requires any revisions to
such Registration Statement, Prospectus or other documents so that, in the case of such
Registration Statement or the Prospectus, as the case may be, it will not contain any untrue
statement of a material fact or omit to state any material fact required to be stated therein or
necessary to make the statements therein, in light of the circumstances under which they were made,
not misleading. The Company shall submit to the Commission, within two (2) Trading Days after the
date that the Company learns that no review of a particular Registration Statement will be made by
the Staff or the Commission or that such Staff has no further comments on a particular Registration
Statement (as the case may be); provided that the financial information included in such
Registration Statement meets all applicable SEC requirements.

          (d) Use its reasonable best efforts to avoid the issuance of, or, if issued, obtain the
withdrawal of (i) any stop order or other suspension of the effectiveness of a Registration
Statement, or (ii) any suspension of the qualification (or exemption from qualification) of any of
the Registrable Securities for sale in any jurisdiction, at the earliest practicable moment and, if
such an order or suspension is issued, to obtain the withdrawal of such order or suspension at the
earliest practicable moment and each Holder who holds Registrable Securities being sold of the
issuance of such order and the resolution thereof or its receipt of actual notice of the initiation
or threat of any proceeding for such purpose.

          (e) Furnish to each Holder, without charge, at least one conformed copy of each Registration
Statement and each amendment thereto and all exhibits to the extent requested by such Person
(including those previously furnished) promptly after the filing of such documents
with the Commission.

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          (f) Promptly deliver to each Holder, without charge, as many copies of each Prospectus or
Prospectuses (including each form of prospectus) and each amendment or supplement thereto as such
Persons may reasonably request from time to time and such other documents as such Holder may
reasonably request from time to time in order to facilitate the disposition of the Registrable
Securities owned by such Holder. The Company hereby consents to the use of such Prospectus and
each amendment or supplement thereto by each of the selling Holders in connection with the offering
and sale of the Registrable Securities covered by such Prospectus and any amendment or supplement
thereto.

          (g) Prior to any resale of Registrable Securities, use its reasonable best efforts to (i)
register or qualify or cooperate with the selling Holders in connection with the registration or
qualification (or exemption from such registration or qualification) of such Registrable Securities
for offer and sale under the securities or Blue Sky laws of those specific jurisdictions within the
United States which the Holders may reasonably request from time to time in writing to the Company,
(ii) keep each such registration or qualification (or exemption therefrom) effective during the
Effectiveness Period and (iii) do any and all other acts or things necessary or advisable to enable
the disposition in such jurisdictions of the Registrable Securities covered by the Registration
Statements; provided, that the Company shall not be required to qualify generally to do business in
any jurisdiction where it is not then so qualified or subject the Company to any material tax in
any such jurisdiction where it is not then so subject. The Company shall promptly notify each
Holder of the receipt by the Company of any notification with respect to the suspension of the
registration or qualification of any of the Registrable Securities for sale under the securities or
Blue Sky laws of any jurisdiction in the United States or its receipt of actual notice of the
initiation or threatening of any proceeding for such purpose.

          (h) Cooperate with the Holders to facilitate the timely preparation and delivery of
certificates representing Registrable Securities to be delivered to a transferee pursuant to the
Registration Statements, which certificates shall be free, to the extent permitted by the Purchase
Agreement, of all restrictive legends, and to enable such Registrable Securities to be in such
denominations and registered in such names as any such Holders may request.

          (i) Upon the occurrence of any event contemplated by Section 4(c)(v), as promptly as
reasonably possible, prepare a supplement or amendment, including a post-effective amendment, to
the affected Registration Statements or a supplement to the related Prospectus or any document
incorporated or deemed to be incorporated therein by reference, and file any other required
document so that, as thereafter delivered, no Registration Statement nor any Prospectus will
contain an untrue statement of a material fact or omit to state a material fact required to be
stated therein or necessary to make the statements therein, in light of the circumstances under
which they were made, not misleading.

          (j) Each Holder agrees to furnish to the Company a completed Selling Questionnaire in the form
attached to this Agreement as Annex B (a “Selling Holder Questionnaire”). The Company shall
not be required to include the Registrable Securities of a Holder in a Registration Statement and
shall not be required to pay any partial or other damages under Section 2(d) hereof to such Holder
who fails to furnish to the Company a fully completed
Selling Holder Questionnaire at least five (5) Trading Days prior to the Filing Date).

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          (k) If requested by a Holder, the Company shall as soon as practicable after receipt of notice
from such Holder and subject to Section 3(p) hereof, use reasonable best efforts to (i) incorporate
in a prospectus supplement or post-effective amendment such information as a Holder reasonably
requests to be included therein relating to the sale and distribution of Registrable Securities,
including, without limitation, information with respect to the number of Registrable Securities
being offered or sold, the purchase price being paid therefor and any other terms of the offering
of the Registrable Securities to be sold in such offering; (ii) make all required filings of such
prospectus supplement or post-effective amendment after being notified of the matters to be
incorporated in such prospectus supplement or post-effective amendment; and (iii) supplement or
make amendments to any Registration Statement if reasonably requested by a Holder holding any
Registrable Securities.

          (l) The Company shall use its reasonable best efforts to cause the Registrable Securities
covered by a Registration Statement to be registered with or approved by such other governmental
agencies or authorities as may be necessary to consummate the disposition of such Registrable
Securities.

          (m) The Company shall otherwise use its reasonable best efforts to comply with all applicable
rules and regulations of the Commission in connection with any registration hereunder. Within one
(1) Trading Day after a Registration Statement which covers Registrable Securities is declared
effective by the Commission, the Company shall deliver, and shall cause legal counsel for the
Company to deliver, to the transfer agent for such Registrable Securities (with copies to the
Holders whose Registrable Securities are included in such Registration Statement) confirmation that
such Registration Statement has been declared effective by the Commission in a customary form.

          (p) Notwithstanding anything to the contrary herein (but subject to the last sentence of this
Section 4(p), at any time after the Effective Date of the initial Registration Statement required
to be filed hereunder pursuant to Section 2(a), the Company may delay the disclosure of material,
non-public information concerning the Company the disclosure of which at the time is not, in the
good faith determination of the Board of Directors of the Company, in the best interest of the
Company and is not, in the opinion of Board of Directors of the Company, after consultation with
the Company’s counsel, otherwise required (a “Grace Period”); provided, that the Company shall
promptly (i) notify the Holders in writing of the existence of material, non-public information
giving rise to a Grace Period (provided that in each notice the Company will not disclose the
content of such material, non-public information to the Holders) and the date on which the Grace
Period will begin, and (ii) notify the Holders in writing of the date on which the Grace Period
ends; and, provided that no Grace Period shall exceed thirty (30) consecutive days and during any
three hundred sixty five (365) day period such Grace Periods shall not exceed an aggregate of sixty
(60) days and the first day of any Grace Period must be at least two (2) Trading Days after the
last day of any prior Grace Period (each, an “Allowable Grace Period”); provided further, that no
Allowable Grace Period may exist during the first thirty (30) Trading Days after the Effective Date
of the initial Registration Statement required to be filed hereunder pursuant to Section 2(a). For
purposes of determining the length of a Grace Period above, the Grace Period shall begin on and
include the date the Holders receive the notice

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referred to in clause (i) and shall end on and include the later of the date the Holders
receive the notice referred to in clause (ii) and the date referred to in such notice.
Notwithstanding anything to the contrary contained in this Section 4(p), the Company shall cause
its transfer agent to deliver shares of Common Stock to a transferee of a Holder in accordance with
the terms of the Purchase Agreement in connection with any sale of Registrable Securities with
respect to which such Holder has entered into a contract for sale, and delivered a copy of the
prospectus included as part of the applicable Registration Statement (to the extent required under
applicable securities laws), prior to such Holder’s receipt of the notice of a Grace Period and for
which such Holder has not yet settled.

          (q) At the reasonable request of any Holder, the Company shall use its reasonable best efforts
to furnish to such Holder, on the date of the effectiveness of the Registration Statement or any
additional registration statement required by the terms of this Agreement and thereafter from time
to time on such dates as a Holder may reasonably request (i) a letter, dated such date, from the
Company’s independent certified public accountants in form and substance as is customarily given by
independent certified public accountants to underwriters in an underwritten public offering,
addressed to the Holders, and (ii) an opinion, dated as of such date, of counsel representing the
Company for purposes of such Registration Statement or such additional registration statement, in
form, scope and substance as is customarily given in an underwritten public offering, addressed to
the Holders.

          (r) The Company shall make available for inspection by (i) any Holder, (ii) legal counsel to
any Holder and (iii) one firm of accountants or other agents retained by the Holders (collectively,
the “Inspectors”), all pertinent financial and other records, and pertinent corporate documents and
properties of the Company (collectively, the “Records”), as shall be reasonably deemed necessary by
each Inspector, and cause the Company’s officers, directors and employees, and shall use its
reasonable best efforts to cause its counsel and the Company’s independent certified public
accountants to, supply all information which may be necessary and any Inspector may reasonably
request; provided, however, that prior to inspection, each Inspector shall agree to hold in strict
confidence and shall not make any disclosure (except to an Investor) or use of any Record or other
information which the Company determines in good faith to be confidential, pursuant to the terms of
a Confidentiality Agreement in form and substance reasonably satisfactory to the Company. Nothing
herein shall be deemed to limit the Holders’ ability to sell Registrable Securities in a manner
which is otherwise consistent with applicable laws and regulations.

          (s) If requested by a Holder, the Company shall, within five days of receipt of notice from
such Holder, (i) incorporate in a prospectus supplement or post-effective amendment such
information as an Investor reasonably requests to be included therein relating to the sale and
distribution of Registrable Securities, including, without limitation, information with respect to
the number of Registrable Securities being offered or sold, the purchase price being paid therefor
and any other terms of the offering of the Registrable Securities to be sold in such offering; (ii)
make all required filings of such prospectus supplement or post-effective amendment after being
notified of the matters to be incorporated in such prospectus supplement or post-effective
amendment; and (iii) supplement or make amendments to any Registration Statement if reasonably
requested by an Investor holding any Registrable Securities.

-11-

 

          (t) The Company shall make generally available to its security holders as soon as practical,
but not later than 90 days after the close of the period covered thereby, an earnings statement (in
form complying with, and in the manner provided by, the provisions of Rule 158 under the 1933 Act)
covering a twelve-month period beginning not later than the first day of the Company’s fiscal
quarter next following the Effective Date of the Registration Statement or any additional
registration statement required by the terms of this Agreement.

     5. Registration Expenses. All fees and expenses incident to the performance of or
compliance with this Agreement by the Company shall be borne by the Company whether or not any
Registrable Securities are sold pursuant to a Registration Statement. The fees and expenses
referred to in the foregoing sentence shall include, without limitation, (i) all registration and
filing fees (including, without limitation, fees and expenses (A) with respect to filings required
to be made with any Trading Market on which the Common Stock is then listed for trading, and (B) in
compliance with applicable state securities or Blue Sky laws), (ii) printing expenses (including,
without limitation, expenses of printing certificates for Registrable Securities and of printing
prospectuses if the printing of prospectuses is reasonably requested by the holders of a majority
of the Registrable Securities included in the Registration Statement), (iii) messenger, telephone
and delivery expenses, (iv) fees and disbursements of counsel for the Company, (v) Securities Act
liability insurance, if the Company so desires such insurance, and (vi) fees and expenses of all
other Persons retained by the Company in connection with the consummation of the transactions
contemplated by this Agreement. In addition, the Company shall be responsible for all of its
internal expenses incurred in connection with the consummation of the transactions contemplated by
this Agreement (including, without limitation, all salaries and expenses of its officers and
employees performing legal or accounting duties), the expense of any audit and the fees and
expenses incurred in connection with the listing of the Registrable Securities on any securities
exchange as required hereunder.

     6. Indemnification.

          (a) Indemnification by the Company. The Company shall, notwithstanding any
termination of this Agreement, indemnify and hold harmless each Holder, the officers, directors,
agents, investment advisors, partners, members, employees, agents and representatives of each of
them, each Person who controls any such Holder (within the meaning of Section 15 of the Securities
Act or Section 20 of the Exchange Act) and officers, directors, agents, investment advisors,
partners, members, employees, agents and representatives of each such controlling Person (each an
“Indemnified Person”), to the fullest extent permitted by applicable law, from and against any and
all losses, claims, damages, liabilities, judgments, fines, penalties, charges, amounts paid in
settlement, costs and expenses, joint or several, (including, without limitation, reasonable
out-of-pocket costs of preparation and reasonable attorneys’ fees and expenses) (collectively,
"Losses”), as incurred, arising out of or relating to (i) any untrue or alleged untrue statement of
a material fact contained in any Registration Statement, any Prospectus or any form of prospectus
or in any amendment or supplement thereto, in any preliminary prospectus or in any filing made in
connection with the qualification of the offering under the securities or other Blue Sky laws of
any jurisdiction in which Registrable Securities are offered, or arising out of or relating to any
omission or alleged omission of a material fact required to be stated therein or

-12-

 

necessary to make the statements therein (in the case of any Prospectus or form of prospectus
or supplement thereto, in light of the circumstances under which they were made) not misleading,
except to the extent, but only to the extent, that (1) such untrue statements or omissions are
based solely upon information regarding such Holder furnished in writing to the Company by such
Holder expressly for use therein, or to the extent that such information relates to such Holder or
such Holder’s proposed method of distribution of Registrable Securities and was reviewed and
expressly approved in writing by such Holder expressly for use in the Registration Statement, such
Prospectus or such form of Prospectus or in any amendment or supplement thereto (it being
understood that the Holder has approved Annex A hereto for this purpose) or (2) in the case of an
occurrence of an event of the type specified in Section 4(c)(ii)-(v), the use by such Holder of an
outdated or defective Prospectus after the Company has notified such Holder in writing that the
Prospectus is outdated or defective and prior to the receipt by such Holder of an Advice or an
amended or supplemented Prospectus, but only if and to the extent that following the receipt of the
Advice or the amended or supplemented Prospectus the misstatement or omission giving rise to such
Loss would have been corrected and no grounds for such Loss would have existed; or (ii) any
violation or alleged violation by the Company of the Securities Act, the Exchange Act, any other
law, including, without limitation, any state securities law, or any rule or regulation thereunder
relating to the offer or sale of the Registrable Securities pursuant to a Registration Statement.
The Company shall notify the Holders promptly of the institution, threat or assertion of any
Proceeding of which the Company is aware in connection with the transactions contemplated by this
Agreement. Such indemnity shall remain in full force and effect regardless of any investigation
made by or on behalf of the Indemnified Person and shall survive the transfer of any of the
Registrable Securities by any of the Holders.

          (b) Indemnification by Holders. Each Holder shall, severally and not jointly,
indemnify and hold harmless the Company, its directors, officers, agents and employees, each Person
who controls the Company (within the meaning of Section 15 of the Securities Act and Section 20 of
the Exchange Act), and the directors, officers, agents or employees of such controlling Persons, to
the fullest extent permitted by applicable law, from and against all Losses, as incurred, arising
solely out of or based solely upon: (x) such Holder’s failure to comply with the prospectus
delivery requirements of the Securities Act to the extent applicable or (y) any untrue statement of
a material fact contained in any Registration Statement, any Prospectus, or any form of prospectus,
or in any amendment or supplement thereto, or arising solely out of or based solely upon any
omission of a material fact required to be stated therein or necessary to make the statements
therein not misleading to the extent, but only to the extent that, (1) such untrue statements or
omissions are based solely upon information regarding such Holder furnished in writing to the
Company by such Holder expressly for use therein, or to the extent that such information relates to
such Holder or such Holder’s proposed method of distribution of Registrable Securities and was
reviewed and expressly approved in writing by such Holder expressly for use in the Registration
Statement (it being understood that the Holder has approved Annex A hereto for this purpose), such
Prospectus or such form of Prospectus or in any amendment or supplement thereto or (2) in the case
of an occurrence of an event of the type specified in Section 4(c)(ii)-(v), the use by such Holder
of an outdated or defective Prospectus after the Company has notified such Holder in writing that
the Prospectus is outdated or defective and prior to the receipt by such Holder of an Advice or an
amended or supplemented Prospectus, but only if and to the extent that following the receipt of the
Advice or the amended or supplemented Prospectus the misstatement or omission giving rise to such
Loss would have been

-13-

 

corrected and no grounds for such Loss would have existed. In no event shall the liability of
any selling Holder hereunder be greater in amount than the dollar amount of the net proceeds
received by such Holder upon the sale of the Registrable Securities giving rise to such
indemnification obligation. The indemnity agreement contained in this Section 6(b) and the
agreement with respect to contribution contained in Section 6(d) shall not apply to amounts paid in
settlement of any Losses if such settlement is effected without the prior written consent of the
applicable Holder, which consent shall not be unreasonably withheld or delayed.

          (c) Conduct of Indemnification Proceedings. If any Proceeding shall be brought or
asserted against any Person entitled to indemnity hereunder (an “Indemnified Party”), such
Indemnified Party shall promptly notify the Person from whom indemnity is sought (the “Indemnifying
Party”) in writing, and the Indemnifying Party shall assume the defense thereof, including the
employment of counsel reasonably satisfactory to the Indemnified Party and the payment of all fees
and expenses incurred in connection with defense thereof; provided, that the failure of any
Indemnified Party to give such notice shall not relieve the Indemnifying Party of its obligations
or liabilities pursuant to this Agreement, except (and only) to the extent that it shall be finally
determined by a court of competent jurisdiction (which determination is not subject to appeal or
further review) that such failure shall have proximately and materially adversely prejudiced the
Indemnifying Party.

          An Indemnified Party shall have the right to employ separate counsel in any such Proceeding
and to participate in the defense thereof, but the fees and expenses of such counsel shall be at
the expense of such Indemnified Party or Parties unless: (1) the Indemnifying Party has agreed in
writing to pay such fees and expenses; (2) the Indemnifying Party shall have failed promptly to
assume the defense of such Proceeding and to employ counsel reasonably satisfactory to such
Indemnified Party in any such Proceeding; or (3) the named parties to any such Proceeding
(including any impleaded parties) include both such Indemnified Party and the Indemnifying Party,
and such Indemnified Party shall have been advised by counsel that a conflict of interest is likely
to exist if the same counsel were to represent such Indemnified Party and the Indemnifying Party
(in which case, if such Indemnified Party notifies the Indemnifying Party in writing that it elects
to employ separate counsel at the expense of the Indemnifying Party, the Indemnifying Party shall
not have the right to assume the defense thereof and such counsel shall be at the expense of the
Indemnifying Party); provided that the Indemnifying Party shall not be liable for the fees and
expenses of more than one separate firm of attorneys at any time for all Indemnified Parties. The
Indemnified Party shall reasonably cooperate with the Indemnifying Party in connection with any
negotiation or defense of any such action or Losses by the Indemnifying Party and shall furnish to
the Indemnifying Party all information reasonably available to the Indemnified Party which relates
to such action or Losses. The Indemnifying Party shall keep the Indemnified Party reasonably
apprised at all times as to the status of the defense or any settlement negotiations with respect
thereto. The Indemnifying Party shall not be liable for any settlement of any such Proceeding
effected without its written consent, which consent shall not be unreasonably withheld. No
Indemnifying Party shall, without the prior written consent of the Indemnified Party, which consent
shall not be unreasonably withheld, effect any settlement of any pending Proceeding in respect of
which any Indemnified Party is a party, unless such settlement includes an unconditional release of
such Indemnified Party from all liability on claims that are the subject matter of such Proceeding.

-14-

 

          All reasonable out-of-pocket fees and expenses of the Indemnified Party (including reasonable
out-of-pocket fees and expenses to the extent incurred in connection with investigating or
preparing to defend such Proceeding in a manner not inconsistent with this Section) shall be paid
to the Indemnified Party, as incurred, within ten (10) Trading Days of written notice thereof to
the Indemnifying Party (regardless of whether it is ultimately determined that an Indemnified Party
is not entitled to indemnification hereunder; provided, that the Indemnifying Party may require
such Indemnified Party to undertake to reimburse all such fees and expenses to the extent it is
finally judicially determined that such Indemnified Party is not entitled to indemnification
hereunder).

          No Person involved in the sale of Registrable Securities who is guilty of fraudulent
misrepresentation (within the meaning of Section 11(f) of the Securities Act) in connection with
such sale shall be entitled to indemnification from any Person involved in such sale of Registrable
Securities who is not guilty of fraudulent misrepresentation.

          The indemnity agreements contained herein shall be in addition to (i) any cause of action or
similar right of the Indemnified Party against the Indemnifying Party or others, and (ii) any
liabilities the Indemnifying Party may be subject to pursuant to the law.

          (d) Contribution. If a claim for indemnification under Section 6(a) or 6(b) is
unavailable to an Indemnified Party (by reason of public policy or otherwise), then each
Indemnifying Party, in lieu of indemnifying such Indemnified Party, shall contribute to the amount
paid or payable by such Indemnified Party as a result of such Losses, in such proportion as is
appropriate to reflect the relative fault of the Indemnifying Party and Indemnified Party in
connection with the actions, statements or omissions that resulted in such Losses as well as any
other relevant equitable considerations. The relative fault of such Indemnifying Party and
Indemnified Party shall be determined by reference to, among other things, whether any action in
question, including any untrue or alleged untrue statement of a material fact or omission or
alleged omission of a material fact, has been taken or made by, or relates to information supplied
by, such Indemnifying Party or Indemnified Party, and the parties’ relative intent, knowledge,
access to information and opportunity to correct or prevent such action, statement or omission.
The amount paid or payable by a party as a result of any Losses shall be deemed to include, subject
to the limitations set forth in Section 6(c), any reasonable out-of-pocket attorneys’ fees or
expenses or other reasonable out-of-pocket fees or expenses incurred by such party in connection
with any Proceeding to the extent such party would have been indemnified for such fees or expenses
if the indemnification provided for in this Section was available to such party in accordance with
its terms.

          The parties hereto agree that it would not be just and equitable if contribution pursuant to
this Section 6(d) were determined by pro rata allocation or by any other method of allocation that
does not take into account the equitable considerations referred to in the immediately preceding
paragraph. Notwithstanding the provisions of this Section 6(d), (i) no Holder shall be required to
contribute, in the aggregate, any amount in excess of the amount by which the net proceeds actually
received by such Holder from the sale of the Registrable Securities subject to the Proceeding
exceeds the amount of any damages that such Holder has otherwise been required to pay, or would
otherwise be required to pay under Section 6(b), by reason of such untrue or alleged untrue
statement or omission or alleged omission; (ii) no

-15-

 

contribution shall be made under circumstances where the maker would not have been liable for
indemnification under the fault standards set forth in Section 6 hereof and (iii) no Person
involved in the sale of Registrable Securities which Person is guilty of fraudulent
misrepresentation (within the meaning of Section 11(f) of the Securities Act) in connection with
such sale shall be entitled to contribution from any Person involved in such sale of Registrable
Securities who was not guilty of fraudulent misrepresentation.

          The indemnity and contribution agreements contained in this Section are in addition to any
liability that the Indemnifying Parties may have to the Indemnified Parties.

     7. Reports Under the Exchange Act. With a view to making available to the Holders the
benefits of Rule 144 promulgated under the Securities Act or any other similar rule or regulation
of the Commission that may at any time permit the Holders to sell securities of the Company to the
public without registration, the Company agrees to use reasonable best efforts to:

          (a) make and keep public information available, as those terms are understood and defined in
Rule 144;

          (b) file with the Commission in a timely manner all reports and other documents required of
the Company under the Securities Act and the Exchange Act so long as the Company remains subject to
such requirements (it being understood that nothing herein shall limit the Company’s obligations
under the Purchase Agreement) and the filing of such reports and other documents is required for
the applicable provisions of Rule 144; and

          (c) furnish to each Holder so long as such Holder owns Registrable Securities, promptly upon
request, (i) a written statement by the Company, if true, that it has complied with the reporting
requirements of Rule 144, the Securities Act and the Exchange Act, (ii) a copy of the most recent
annual or quarterly report of the Company and such other reports and documents so filed by the
Company if such reports are not publicly available via EDGAR, and (iii) such other information as
may be reasonably requested to permit the Holders to sell such securities pursuant to Rule 144
without registration.

     8. Miscellaneous.

          (a) Remedies. In the event of a breach by the Company or by a Holder, of any of their
obligations under this Agreement, each Holder or the Company, as the case may be, in addition to
being entitled to exercise all rights granted by law and under this Agreement, including recovery
of damages, will be entitled to specific performance of its rights under this Agreement (without
the obligation to post a bond or any other type of security). The Company and each Holder agree
that monetary damages would not provide adequate compensation for any losses incurred by reason of
a breach by it of any of the provisions of this Agreement and hereby further agrees that, in the
event of any action for specific performance in respect of such breach, it shall waive the defense
that a remedy at law would be adequate.

          (b) No Piggyback on Registrations. Except as set forth on Schedule 8(b) attached
hereto, neither the Company nor any of its security holders (other than the Holders in such
capacity pursuant hereto) may include securities of the Company in a Registration Statement

-16-

 

required to be filed hereunder other than the Registrable Securities, provided that no
securities set forth on Schedule 8(b) may be included in a Registration Statement if including any
such securities would adversely affect any of the Holders. The Company shall not after the date
hereof until the initial Effective Date enter into any agreement providing any such right to any of
its security holders.

          (c) Compliance. Each Holder covenants and agrees that it will comply with any
prospectus delivery requirements of the Securities Act as applicable to it and otherwise comply
with all applicable securities laws in connection with sales of Registrable Securities pursuant to
the Registration Statement.

          (d) Discontinued Disposition. Each Holder agrees by its acquisition of such
Registrable Securities that, upon receipt of a notice from the Company of the occurrence of any
event of the kind described in clauses (ii) through (v) of Section 4(c), such Holder will forthwith
discontinue disposition of such Registrable Securities under the Registration Statement until such
Holder’s receipt of the copies of the supplemented Prospectus and/or amended Registration Statement
or until it is advised in writing (the “Advice”) by the Company that the use of the applicable
Prospectus may be resumed, and, in either case, has received copies of any additional or
supplemental filings that are incorporated or deemed to be incorporated by reference in such
Prospectus or Registration Statement. The Company may provide appropriate stop orders to enforce
the provisions of this paragraph. Notwithstanding anything to the contrary in this Section 7(d),
the Company shall cause its transfer agent to deliver shares of Common Stock to a transferee of a
Holder in accordance with the terms of the Purchase Agreement in connection with any sale of
Registrable Securities with respect to which such Holder has entered into a contract for sale, and
delivered a copy of the prospectus included as part of the applicable Registration Statement (to
the extent required under applicable securities laws) prior to such Holder’s receipt of a notice
from the Company of the happening of any event of the kind described in Section 4(c)(ii)-(v).

          (e) Amendments and Waivers. No provision of this Agreement may be waived or amended
except in a written instrument signed by the Company and the Holders of no less than a majority of
the outstanding Registrable Securities; provided that any party shall have the right to provide a
waiver with regard to itself. No waiver of any default with respect to any provision, condition or
requirement of this Agreement shall be deemed to be a continuing waiver in the future or a waiver
of any subsequent default or a waiver of any other provision, condition or requirement hereof, nor
shall any delay or omission of either party to exercise any right hereunder in any manner impair
the exercise of any such right.

          (f) Notices. Any and all notices or other communications or deliveries required or
permitted to be provided hereunder shall be in writing or via e-mail and shall be deemed given and
effective on the earliest of (i) the date of transmission, if such notice or communication is
delivered via facsimile or e-mail at the facsimile telephone number or e-mail address, as
applicable, specified in this Section prior to 6:30 p.m. (New York City time) on a Trading Day,
(ii) the Trading Day after the date of transmission, if such notice or communication is delivered
via facsimile or e-mail at the facsimile telephone number or e-mail address, as applicable,
specified in this Agreement later than 6:30 p.m. (New York City time) on any date and earlier than
11:59 p.m. (New York City time) on such date, (iii) the Trading Day following the date of mailing,
if sent by nationally recognized overnight courier service (with next day delivery

-17-

 

specified), or (iv) upon actual receipt by the party to whom such notice is required to be
given. The address for such notices and communications shall be as follows:

	 	 	 	 	 
	 

	 	If to the Company:
	 	Health Benefits Direct Corporation
	 

	 	 	 	150 N. Radnor-Chester Road, Radnor, PA 19087
	 

	 	 	 	Facsimile: (484) 654-2223
	 

	 	 	 	Attn: Chief Financial Officer
	 
	 	 	 	 
	 

	 	With a copy to:
	 	Morgan, Lewis & Bockius LLP
	 

	 	 	 	1701 Market Street, Philadelphia, PA 19103
	 

	 	 	 	Facsimile: (215) 963-5001
	 

	 	 	 	Attn: James W. McKenzie, Jr., Esq.
	 
	 	 	 	 
	 

	 	If to an Investor:
	 	To the address, e-mail address or facsimile number set forth
under such Investor’s name

on the signature pages hereof;
	 
	 	 	 	 
	 	 	If to any other Person who is then the registered Holder:
	 
	 	 	 	 
	 

	 	 	 	To the address, e-mail address or facsimile number of such
Holder as it appears in the stock transfer books of the
Company

or such other address, e-mail address or facsimile number as may be designated hereafter, in the
same manner, by such Person.

          (g) Successors and Assigns. This Agreement shall inure to the benefit of and be
binding upon the successors and permitted assigns of each of the parties and shall inure to the
benefit of each Holder. The Company may not assign its rights or obligations hereunder without the
prior written consent of each Holder. Each Holder may assign their respective rights hereunder in
the manner and to the Persons as permitted under the Purchase Agreement.

          (h) Execution and Counterparts. This Agreement may be executed in any number of
counterparts, each of which when so executed shall be deemed to be an original and, all of which
taken together shall constitute one and the same Agreement. In the event that any signature is
delivered by facsimile transmission, such signature shall create a valid 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 were the original thereof. Each pronoun herein shall be
deemed to include the masculine, feminine, neuter, singular and plural forms thereof. The terms
“including,” “includes,” “include” and words of like import shall be
construed broadly as if followed by the words “without limitation.” The terms “herein,”
“hereunder,” “hereof” and words of like import refer to this entire Agreement
instead of just the provision in which they are found.

          (i) Governing Law. All questions concerning the construction, validity, enforcement
and interpretation of this Agreement shall be governed by and construed and

-18-

 

enforced in accordance with the internal laws of the State of Delaware, without regard to the
principles of conflicts of law thereof. Each party agrees that all Proceedings concerning the
interpretations, enforcement and defense of the transactions contemplated by this Agreement
(whether brought against a party hereto or its respective Affiliates, employees or agents) shall be
commenced exclusively in the state and federal courts sitting in the City of Wilmington, State of
Delaware, (the “Delaware Courts”). Each party hereto hereby irrevocably submits to the exclusive
jurisdiction of the Delaware Courts for the adjudication of any dispute hereunder or in connection
herewith or with any transaction contemplated hereby or discussed herein, and hereby irrevocably
waives, and agrees not to assert in any Proceeding, any claim that it is not personally subject to
the jurisdiction of any Delaware Court, or that such Proceeding has been commenced in an improper
or inconvenient forum. Each party hereto hereby irrevocably waives personal service of process and
consents to process being served in any such Proceeding by mailing a copy thereof via registered or
certified mail or overnight delivery (with evidence of delivery) to such party at the address in
effect for notices to it under this Agreement and agrees that such service shall constitute good
and sufficient service of process and notice thereof. Nothing contained herein shall be deemed to
limit in any way any right to serve process in any manner permitted by law. Each party hereto
hereby irrevocably waives, to the fullest extent permitted by applicable law, any and all right to
trial by jury in any Proceeding arising out of or relating to this Agreement or the transactions
contemplated hereby. If either party shall commence a Proceeding to enforce any provisions of this
Agreement, then the prevailing party in such Proceeding shall be reimbursed by the other party for
its attorneys’ fees and other costs and expenses incurred with the investigation, preparation and
prosecution of such Proceeding.

          (j) Cumulative Remedies. The remedies provided herein are cumulative and not exclusive
of any remedies provided by law.

          (k) Severability. If any term, provision, covenant or restriction of this Agreement is
held by a court of competent jurisdiction to be invalid, illegal, void or unenforceable, the
remainder of the terms, provisions, covenants and restrictions set forth herein shall remain in
full force and effect and shall in no way be affected, impaired or invalidated, and the parties
hereto shall use their reasonable efforts to find and employ an alternative means to achieve the
same or substantially the same result as that contemplated by such term, provision, covenant or
restriction. It is hereby stipulated and declared to be the intention of the parties that they
would have executed the remaining terms, provisions, covenants and restrictions without including
any of such that may be hereafter declared invalid, illegal, void or unenforceable.

          (l) Headings. The headings in this Agreement are for convenience of reference only
and shall not limit or otherwise affect the meaning hereof.

          (m) Entire Agreement. This Agreement, the other Transaction Documents (as defined in
the Purchase Agreement), the schedules and exhibits attached hereto and thereto and the instruments
referenced herein and therein constitute the entire agreement among the parties hereto with respect
to the subject matter hereof and thereof. There are no restrictions, promises, warranties or
undertakings, other than those set forth or referred to herein and therein. This Agreement, the
other Transaction Documents, the schedules and exhibits attached hereto and thereto and the
instruments referenced herein and therein supersede all prior agreements and understandings among
the parties hereto with respect to the subject matter hereof and thereof.

-19-

 

          (n) Independent Nature of Holders’ Obligations and Rights. The obligations of each
Holder under this Agreement and the other Transaction Documents are several and not joint with the
obligations of any other Holder, and no Holder shall be responsible in any way for the performance
of the obligations of any other Holder under this Agreement or any other Transaction Document.
Nothing contained herein or in any other Transaction Document, and no action taken by any Holder
pursuant hereto or thereto, shall be deemed to constitute the Holders as a partnership, an
association, a joint venture or any other kind of group or entity, or create a presumption that the
Holders are in any way acting in concert or as a group or entity with respect to such obligations
or the transactions contemplated by the Transaction Documents or any matters, and the Company
acknowledges that the Holders are not acting in concert or as a group with respect to such
obligations or the transactions contemplated by this Agreement or any of the other the Transaction
Documents. Each Holder shall be entitled to independently protect and enforce its rights,
including, without limitation, the rights arising out of this Agreement or out of any other
Transaction Documents, and it shall not be necessary for any other Holder to be joined as an
additional party in any proceeding for such purpose. The use of a single agreement with respect to
the obligations of the Company contained herein was solely in the control of the Company, not the
action or decision of any Holder, and was done solely for the convenience of the Company and not
because it was required or requested to do so by any Holder.

          (o) No Strict Construction. The language used in this Agreement will be deemed to be
the language chosen by the parties to express their mutual intent and no rules of strict
construction will be applied against any party.

          (p) No Third Party Beneficiaries. This Agreement is intended for the benefit of the
parties hereto and their respective permitted successors and assigns, and is not for the benefit
of, nor may any provision hereof be enforced by, any other Person, other than the Persons referred
to in Section 5 hereof.

          (q) Further Assurances. Each party shall do and perform, or cause to be done and
performed, all such further acts and things, and shall execute and deliver all such other
agreements, certificates, instruments and documents as any other party may reasonably request in
order to carry out the intent and accomplish the purposes of this Agreement and the consummation of
the transactions contemplated hereby.

[signature page follows]

-20-

 

          IN WITNESS WHEREOF, the parties have executed this Registration Rights Agreement as of the
date first written above.

	 	 	 	 	 	 	 
	 	 	HEALTH BENEFITS DIRECT CORPORATION	 	 
	 
	 	 	 	 	 	 
	 

	 	By:

Name:
	 	/S/ ANTHONY R. VERDI
 

Anthony R. Verdi
	 	 
	 

	 	Title:
	 	Chief Financial Officer and Chief

Operating Officer	 	 

[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK

SIGNATURE PAGES OF INVESTORS TO FOLLOW]

 

 

          IN WITNESS WHEREOF, the parties have executed this Registration Rights Agreement as of the
date first written above.

	 	 	 	 	 	 	 
	 	 	THE CO-INVESTMENT FUND II, L.P.	 	 
	 
	 	 	 	 	 	 
	 	 	By: Co-Invest Management II, L.P., its General partner	 	 
	 
	 	 	 	 	 	 
	 	 	By: Co-Invest II Capital Partners, Inc., its General Partner	 	 
	 
	 	 	 	 	 	 
	 

	 	By:

Name:
	 	/S/ FREDERICK C. TECCE
 

Frederick C. Tecce
	 	 
	 

	 	Title:
	 	Vice President	 	 
	 
	 	 	 	 	 	 
	 	 	Address for Notice:	 	 
	 
	 	 	 	 	 	 
	 	 	c/o Cross Atlantic Capital Partners

Five Radnor Corporate Center, Suite 555

Radnor, PA 19087

Facsimile No.: 610-971-2062

*E-mail: ftecce@xacp.com

Attn: Frederick C. Tecce	 	 

By providing an e-mail address, the party listed above hereby consents to electronic delivery of
the documents and notices required to be delivered pursuant to this Agreement.

-22-EXHIBIT 4.3

Exhibit 4.3

FORM OF WARRANT

NEITHER THESE SECURITIES NOR THE SECURITIES ISSUABLE UPON EXERCISE OF THESE SECURITIES HAVE BEEN
REGISTERED WITH THE SECURITIES AND EXCHANGE COMMISSION OR THE SECURITIES COMMISSION OF ANY STATE IN
RELIANCE UPON AN EXEMPTION FROM REGISTRATION UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE
“SECURITIES ACT”), AND, ACCORDINGLY, MAY NOT BE OFFERED OR SOLD EXCEPT PURSUANT TO (I) (A) AN
EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES ACT OR (B) AN AVAILABLE EXEMPTION FROM, OR IN
A TRANSACTION NOT SUBJECT TO, THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT AND IN ACCORDANCE
WITH APPLICABLE STATE SECURITIES LAWS AS EVIDENCED BY A LEGAL OPINION OF COUNSEL TO THE TRANSFEROR
TO SUCH EFFECT, THE SUBSTANCE OF WHICH SHALL BE REASONABLY ACCEPTABLE TO THE COMPANY OR (II) RULE
144 OR RULE 144A UNDER THE SECURITIES ACT. NOTWITHSTANDING THE FOREGOING, THESE SECURITIES AND THE
SECURITIES ISSUABLE UPON EXERCISE OF THESE SECURITIES MAY BE PLEDGED IN CONNECTION WITH A BONA FIDE
MARGIN ACCOUNT SECURED BY SUCH SECURITIES.

HEALTH BENEFITS DIRECT CORPORATION

WARRANT

			
	Warrant No. HB-P01
	 	Date of Original Issuance: January 14, 2009

     Health Benefits Direct Corporation, a Delaware corporation (the “Company”), hereby certifies
that, for value received, Co-Investment Fund II, L.P. or its registered assigns (the “Holder”), is
entitled to purchase from the Company, subject to the terms and conditions set forth herein:

     (a) at any time and from time to time after the Stockholder Approval Deadline (as defined in
the Securities Purchase Agreement and until and including the earliest to occur of (i) the Call
Event Expiration Date, (ii) the Common Stock Authorization Date (as defined below), and (iii)
January 14, 2014 up to a total of 1,000,000 shares of Series A Convertible Preferred Stock, $0.001
par value per share (the “Preferred Stock”) of the Company at an exercise price equal to $4.00 per
share (as adjusted from time to time as provided herein, the “Preferred Stock Exercise Price”); and

     (b) at any time and from time to time after the Common Stock Authorization Date and until and
including the earlier to occur of (i) the Call Event Expiration Date, and (ii) January 14, 2014 up
to a total of 20,000,000 shares of Common Stock, $0.001 par value per share (the “Common Stock”) of
the Company at an exercise price equal to $0.20 per share (as adjusted from time to time as
provided herein, the “Common Stock Exercise Price”); provided, that in the event that this Warrant
has been exercised for Preferred Stock prior to the Common Stock Authorization Date, the number of
shares of Common Stock for which this Warrant may

 

 

thereafter be exercised will be reduced by a number of shares of Common Stock equal to the
number of shares of Common Stock that would have been issuable upon such exercise for Preferred
Stock had the Common Stock Authorization Date occurred prior to such exercise for Preferred Stock.

This Warrant will expire on the date (the “Expiration Date”) which is the earlier to occur of (i)
the Call Event Expiration Date and (ii) January 14, 2014. The shares of Preferred Stock or Common
Stock issuable pursuant to this Warrant are sometimes hereinafter referred to as the “Warrant
Shares” and individually as a “Warrant Share”). The Preferred Stock Exercise Price and the Common
Stock Exercise Price are sometimes hereinafter referred to as the “Exercise Price.” This warrant
and any warrants issued in exchange, transfer or replacement hereof, are referred to herein as the
“Warrant.”

     1. Definitions. In addition to the terms defined elsewhere in this Warrant,
capitalized terms that are not otherwise defined herein shall have the meanings given to such terms
in the Securities Purchase Agreement dated as of January 14, 2009 by and among the Company and the
investors thereto (the “Securities Purchase Agreement”).

     2. Registration of Warrant. The Company shall register this Warrant, upon records to
be maintained by the Company for that purpose (the “Warrant Register”), in the name of the record
Holder hereof from time to time. The Company may deem and treat the registered Holder of this
Warrant as the absolute owner hereof for the purpose of any exercise hereof or any distribution to
the Holder, and for all other purposes, absent actual notice to the contrary.

     3. Registration of Transfers. The Company shall register the transfer of any portion
of this Warrant in the Warrant Register, upon surrender of this Warrant, with the Form of
Assignment attached hereto duly completed and signed, to the Company at its address specified
herein. Upon any such registration or transfer, a new Warrant to purchase Common Stock, in
substantially the form of this Warrant (any such new Warrant, a “New Warrant”), evidencing the
portion of this Warrant so transferred shall be issued to the transferee and a New Warrant
evidencing the remaining portion of this Warrant not so transferred, if any, shall be issued to the
transferring Holder. The acceptance of the New Warrant by the transferee thereof shall be deemed
the acceptance by such transferee of all of the rights and obligations of a holder of a Warrant.

     4. Exercise and Duration of Warrants. This Warrant shall be exercisable by the
registered Holder at any time and from time to time on or after the date hereof to and including
the Expiration Date. At 11:59 p.m., New York City time on the Expiration Date, subject to Section
12, the portion of this Warrant not exercised (or called) prior thereto shall be and become void
and of no value.

     5. Delivery of Warrant Shares; Disposition of Warrants and Warrant Shares.

          (a) To effect exercises hereunder, the Holder shall not be required to physically surrender
this Warrant. Execution and delivery via facsimile of the Exercise Notice with respect to less than
all of the Warrant Shares shall have the same effect as cancellation of the original Warrant and
issuance of a New Warrant evidencing the right to purchase the

2

 

remaining number of Warrant Shares. Execution and delivery via facsimile of the Exercise
Notice for all of the Warrant Shares shall have the same effect as cancellation of the original
Warrant after delivery of the Warrant Shares. Upon such delivery of the attached Exercise Notice to
the Company (with the attached Warrant Shares Exercise Log) at its address for notice set forth
herein and upon (1) payment of the then-applicable Exercise Price multiplied by the number of
Warrant Shares that the Holder intends to purchase hereunder or (2) notifying the Company that this
Warrant is being exercised pursuant to a Cashless Exercise (as defined below), the Company shall on
or before the third (3rd) Trading Day after receipt thereof issue and deliver to the
Holder, a certificate for the Warrant Shares issuable upon such exercise. The Company shall, upon
request of the Holder and subsequent to the date on which a registration statement covering the
resale of the Warrant Shares has been declared effective by the Securities and Exchange Commission,
use commercially reasonable efforts to deliver Warrant Shares hereunder electronically through the
Depository Trust Corporation or another established clearing corporation performing similar
functions (“DTC”), if available, provided, that, the Company may, but will not, be required to
change its transfer agent if its current transfer agent cannot deliver Warrant Shares
electronically through the DTC. A “Date of Exercise” means the date on which the Holder shall have
delivered to the Company: (i) the Exercise Notice (with the Warrant Exercise Log attached to it)
via facsimile, appropriately completed and duly signed and (ii) payment of the Exercise Price for
the number of Warrant Shares so indicated by the Holder to be purchased (or notice of a Cashless
Exercise) as provided above. On the Date of Exercise, the Holder shall be deemed for all corporate
purposes to have become the holder of record of the Warrant Shares with respect to which this
Warrant has been exercised, irrespective of the date such Warrant Shares are credited to the
Holder’s DTC account or the date of delivery of the certificates evidencing such Warrant Shares (as
the case may be).

          (b) The Company’s obligations to issue and deliver Warrant Shares in accordance with the terms
hereof are absolute and unconditional, irrespective of any action or inaction by the Holder to
enforce the same, any waiver or consent with respect to any provision hereof, the recovery of any
judgment against any Person or any action to enforce the same, or any setoff, counterclaim,
recoupment, limitation or termination, or any breach or alleged breach by the Holder or any other
Person of any obligation to the Company or any violation or alleged violation of law by the Holder
or any other Person, and irrespective of any other circumstance which might otherwise limit such
obligation of the Company to the Holder in connection with the issuance of Warrant Shares. Nothing
herein shall limit a Holder’s right to pursue any other remedies available to it hereunder, at law
or in equity including, without limitation, a decree of specific performance and/or injunctive
relief with respect to the Company’s failure to timely deliver certificates representing shares of
Common Stock upon exercise of this Warrant or to credit such shares to the Holder’s DTC account (as
the case may be) as required pursuant to the terms hereof.

          (c) The Warrants and Warrant Shares (collectively, the “Securities”) may only be disposed of
in compliance with state and federal securities laws and the provisions related to transfer and
other provisions related to the Securities set forth in the Securities Purchase Agreement,
including without limitation, Sections 4.2 and 4.14 thereof.

3

 

          (d) The Warrants shall contain the legend set forth above and the stock certificates
evidencing the Warrant Shares will contain the following legend, until such time as
they are not required under the conditions described in the Securities Purchase Agreement:

THESE SECURITIES HAVE NOT BEEN REGISTERED WITH THE SECURITIES AND EXCHANGE COMMISSION OR THE
SECURITIES COMMISSION OF ANY STATE IN RELIANCE UPON AN EXEMPTION FROM REGISTRATION UNDER THE
SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES ACT”), AND, ACCORDINGLY, MAY NOT BE OFFERED OR
SOLD EXCEPT PURSUANT TO (I) (A) AN EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES ACT OR (B)
AN AVAILABLE EXEMPTION FROM, OR IN A TRANSACTION NOT SUBJECT TO, THE REGISTRATION REQUIREMENTS OF
THE SECURITIES ACT AND IN ACCORDANCE WITH APPLICABLE STATE SECURITIES LAWS AS EVIDENCED BY A LEGAL
OPINION OF COUNSEL TO THE TRANSFEROR TO SUCH EFFECT, THE SUBSTANCE OF WHICH SHALL BE REASONABLY
ACCEPTABLE TO THE COMPANY OR (II) RULE 144 OR RULE 144A UNDER THE SECURITIES ACT. NOTWITHSTANDING
THE FOREGOING, THESE SECURITIES MAY BE PLEDGED IN CONNECTION WITH A BONA FIDE MARGIN ACCOUNT
SECURED BY SUCH SECURITIES.

     6. Charges, Taxes and Expenses. Issuance and delivery of certificates for Warrant
Shares upon exercise of this Warrant shall be made without charge to the Holder for any issue or
transfer tax, transfer agent fee or other similar incidental tax or expense in respect of the
issuance of such certificates, all of which such taxes and expenses shall be paid by the Company;
provided, however, that the Company shall not be required to pay any tax which may be payable in
respect of any transfer involved in the registration of any certificates for Warrant Shares or
Warrants in a name other than that of the Holder or any of its affiliates. The Holder shall be
responsible for all other tax liability that may arise as a result of holding or transferring this
Warrant or receiving Warrant Shares upon exercise hereof.

     7. Replacement of Warrant. If this Warrant is mutilated, lost, stolen or destroyed,
the Company shall issue or cause to be issued in exchange and substitution for and upon
cancellation hereof, or in lieu of and substitution for this Warrant, a New Warrant, but only upon
receipt of evidence reasonably satisfactory to the Company of such loss, theft or destruction and a
customary and reasonable indemnity (which shall not include a surety bond), if requested.
Applicants for a New Warrant under such circumstances shall also comply with such other reasonable
procedures and pay such other reasonable third-party costs as the Company may prescribe. If a New
Warrant is requested as a result of a mutilation of this Warrant, then the Holder shall deliver
such mutilated Warrant to the Company as a condition precedent to the Company’s obligation to issue
the New Warrant.

     8. Reservation of Warrant Shares. The Company covenants that it will at all times
reserve and keep available out of the aggregate of its authorized but unissued and otherwise
unreserved shares of Preferred Stock or Common Stock, as the case may be, solely for the purpose of
enabling it to issue Warrant Shares upon exercise of this Warrant as herein provided, the number of
Warrant Shares which are then issuable and deliverable upon the exercise of this entire Warrant,
free from preemptive rights or any other contingent purchase rights of Persons other than the
Holder (taking into account the adjustments and restrictions of Section 9). The Company
covenants that all Warrant Shares so issuable and deliverable shall, upon issuance and the payment
of the applicable Exercise Price (or notice of a Cashless Exercise) in accordance

4

 

with the terms hereof, be duly and validly authorized, issued and fully paid and
nonassessable. If, notwithstanding the foregoing, and not in limitation thereof, at any time while
any of the Warrants (as defined in the Securities Purchase Agreement) remain outstanding the
Company does not have a sufficient number of authorized and unreserved shares of Preferred Stock or
Common Stock to satisfy its then applicable obligation to reserve for issuance upon exercise of the
Warrants at least a number of shares of Preferred Stock or Common Stock equal to the maximum number
of shares as shall from time to time be necessary to effect the exercise of all of the Warrants
then outstanding (the “Required Reserve Amount”) (an “Authorized Share Failure”), then the Company
shall as promptly as practicable thereafter take all action necessary to increase the Company’s
authorized shares of Preferred Stock or Common Stock to an amount sufficient to allow the Company
to reserve the Required Reserve Amount for the Warrants then outstanding. Without limiting the
generality of the foregoing sentence, as promptly as practicable after the date of the occurrence
of an Authorized Share Failure, the Company shall hold a meeting of its stockholders for the
approval of an increase in the number of authorized shares of Preferred Stock or Common Stock. In
connection with such meeting, the Company shall provide each stockholder with a proxy statement and
shall use its reasonable best efforts to solicit its stockholders’ approval of such increase in
authorized shares of Preferred Stock or Common Stock and to cause its board of directors to
recommend to the stockholders that they approve such proposal.

     9. Certain Adjustments. The Exercise Price and number of Warrant Shares issuable upon
exercise of this Warrant are subject to adjustment from time to time as set forth in this
Section 9.

          (a) Stock Dividends and Splits. If the Company, at any time while this Warrant is
outstanding, (i) pays a stock dividend on its Common Stock or otherwise makes a distribution on any
class of capital stock that is payable in shares of Common Stock, (ii) subdivides outstanding
shares of Common Stock into a larger number of shares, or (iii) combines outstanding shares of
Common Stock into a smaller number of shares, then in each such case the Exercise Price shall be
multiplied by a fraction of which the numerator shall be the number of shares of Common Stock
outstanding immediately before such event and of which the denominator shall be the number of
shares of Common Stock outstanding immediately after such event. Any adjustment made pursuant to
clause (i) of this paragraph shall become effective immediately after the record date for the
determination of stockholders entitled to receive such dividend or distribution, and any adjustment
pursuant to clause (ii) or (iii) of this paragraph shall become effective immediately after the
effective date of such subdivision or combination. If any event requiring an adjustment under this
paragraph occurs during the period that an Exercise Price is calculated hereunder, then the
calculation of such Exercise Price shall be adjusted appropriately to reflect such event.

          (b) Fundamental Transactions. If, at any time while this Warrant is outstanding, (1)
the Company effects any merger or consolidation of the Company with or into another Person, (2) the
Company effects any sale of all or substantially all of its assets in one or a series of related
transactions, (3) any tender offer or exchange offer (whether by the Company or another Person) is
completed pursuant to which holders of Common Stock are permitted to tender or exchange their
shares for other securities, cash or property, or (4) the Company effects any reclassification of
the Common Stock or any compulsory share exchange pursuant to which

5

 

the Common Stock is effectively converted into or exchanged for other securities, cash or
property (in any such case, a “Fundamental Transaction”), then the Holder shall have the right
thereafter to receive, upon exercise of this Warrant, the same amount and kind of securities, cash
or property as it would have been entitled to receive upon the occurrence of such Fundamental
Transaction if it had been, immediately prior to such Fundamental Transaction, the holder of the
number of shares of Common Stock then issuable upon exercise in full of this Warrant (the
“Alternate Consideration”) (assuming for the purposes of this calculation that this Warrant is then
exercisable for Common Stock). For purposes of any such exercise, the determination of the
Exercise Price shall be appropriately adjusted to apply to such Alternate Consideration based on
the amount of Alternate Consideration issuable in respect of one share of Common Stock in such
Fundamental Transaction, and the Company shall apportion the Exercise Price among the Alternate
Consideration in a reasonable manner reflecting the relative value of any different components of
the Alternate Consideration. If holders of Common Stock are given any choice as to the securities,
cash or property to be received in a Fundamental Transaction, then the Holder shall be given the
same choice as to the Alternate Consideration it receives upon any exercise of this Warrant
following such Fundamental Transaction. The terms of any agreement pursuant to which a Fundamental
Transaction is effected shall include terms requiring any such surviving entity to comply with the
provisions of this paragraph (b) and insuring that the Warrant (or any such replacement security)
will be similarly adjusted upon any subsequent transaction analogous to a Fundamental Transaction.

          (c) Adjustment upon Issuance of shares of Common Stock. If and whenever on or after
the date of the Securities Purchase Agreement but prior to the date that is two years after the
Common Stock Authorization Date, the Company issues or sells, or in accordance with this Section 9
is deemed to have issued or sold, any shares of Common Stock (including the issuance or sale of
shares of Common Stock owned or held by or for the account of the Company, but excluding any
Excluded Securities, for a consideration per share (the “New Issuance Price”) less than a price
(the “Applicable Price”) equal to the Common Stock Exercise Price in effect immediately prior to
such issue or sale or deemed issuance or sale (the foregoing a “Dilutive Issuance”), then
immediately after such Dilutive Issuance, the Common Stock Exercise Price then in effect shall be
reduced to a price equal to the New Issuance Price and the Preferred Stock Exercise Price shall be
reduced to a price equal to the product of (a) the New Issuance Price times (b) 20. For purposes
of determining the adjusted Exercise Price under this Section 9(c) the following shall be
applicable:

     (i) Issuance of Options. If the Company in any manner grants or sells any
Options and the lowest price per share for which one share of Common Stock is issuable upon
the exercise of any such Option or upon conversion, exercise or exchange of any Convertible
Securities issuable upon exercise of any such Option is less than the Applicable Price, then
such share of Common Stock shall be deemed to be outstanding and to have been issued and
sold by the Company at the time of the granting or sale of such Option for such price per
share. For purposes of this Section 9(c)(i), the “lowest price per share for which one share
of Common Stock is issuable upon the exercise of any such Options or upon conversion,
exercise or exchange of any Convertible Securities issuable upon exercise of any such
Option” shall be equal to the sum of the lowest amounts of consideration (if any) received
or receivable by the Company with respect to any one share of Common Stock upon the granting
or sale of the Option, upon exercise of

6

 

the Option and upon conversion, exercise or exchange of any Convertible Security
issuable upon exercise of such Option. Except as contemplated below, no further adjustment
of the Exercise Price shall be made upon the actual issuance of such shares of Common Stock
or of such Convertible Securities upon the exercise of such Options or upon the actual
issuance of such shares of Common Stock upon conversion, exercise or exchange of such
Convertible Securities.

     (ii) Issuance of Convertible Securities. If the Company in any manner issues
or sells any Convertible Securities and the lowest price per share for which one share of
Common Stock is issuable upon the conversion, exercise or exchange thereof is less than the
Applicable Price, then such share of Common Stock shall be deemed to be outstanding and to
have been issued and sold by the Company at the time of the issuance or sale of such
Convertible Securities for such price per share. For the purposes of this Section 9(c)(ii),
the “lowest price per share for which one share of Common Stock is issuable upon the
conversion, exercise or exchange thereof” shall be equal to the sum of the lowest amounts of
consideration (if any) received or receivable by the Company with respect to one share of
Common Stock upon the issuance or sale of the Convertible Security and upon conversion,
exercise or exchange of such Convertible Security. Except as contemplated below, no further
adjustment of the Exercise Price shall be made upon the actual issuance of such shares of
Common Stock upon conversion, exercise or exchange of such Convertible Securities, and if
any such issue or sale of such Convertible Securities is made upon exercise of any Options
for which adjustment of this Warrant has been or is to be made pursuant to other provisions
of this Section 9(c), except as contemplated below, no further adjustment of the Exercise
Price shall be made by reason of such issue or sale.

     (iii) Change in Option Price or Rate of Conversion. If the purchase or exercise
price provided for in any Options, the additional consideration, if any, payable upon the
issue, conversion, exercise or exchange of any Convertible Securities, or the rate at which
any Convertible Securities are convertible into or exercisable or exchangeable for shares of
Common Stock increases or decreases at any time, the Exercise Price in effect at the time of
such increase or decrease shall be adjusted to the Exercise Price which would have been in
effect at such time had such Options or Convertible Securities provided for such increased
or decreased purchase price, additional consideration or increased or decreased conversion
rate, as the case may be, at the time initially granted, issued or sold. For purposes of
this Section 9(c)(iii), if the terms of any Option or Convertible Security that was
outstanding as of the date of issuance of this Warrant are increased or decreased in the
manner described in the immediately preceding sentence, then such Option or Convertible
Security and the shares of Common Stock deemed issuable upon exercise, conversion or
exchange thereof shall be deemed to have been issued as of the date of such increase or
decrease. No adjustment pursuant to this Section 9(c) shall be made if such adjustment would
result in an increase of the Exercise Price then in effect.

     (iv) Calculation of Consideration Received. In case any Option is issued in
connection with the issue or sale of other securities of the Company, together comprising
one integrated transaction in which no specific consideration is allocated to such Options
by the parties thereto, the Options will be deemed to have been issued for a consideration

7

 

of $0.01. If any shares of Common Stock, Options or Convertible Securities are issued
or sold or deemed to have been issued or sold for cash, the consideration received therefor
will be deemed to be the net amount received by the Company therefor. If any shares of
Common Stock, Options or Convertible Securities are issued or sold for a consideration other
than cash, the amount of such consideration received by the Company will be the fair value
of such consideration, except where such consideration consists of securities, in which case
the amount of consideration received by the Company for each such security will be the VWAP
of such security for the five (5) Trading Day Period immediately preceding the date of
receipt. If any shares of Common Stock, Options or Convertible Securities are issued to the
owners of the non-surviving entity in connection with any merger in which the Company is the
surviving entity, the amount of consideration therefor will be deemed to be the fair value
of such portion of the net assets and business of the non-surviving entity as is
attributable to such shares of Common Stock, Options or Convertible Securities, as the case
may be. The fair value of any consideration other than cash or securities will be determined
jointly by the Company and the Holder. If such parties are unable to reach agreement within
ten (10) days after the occurrence of an event requiring valuation (the “Valuation Event”),
the fair value of such consideration will be determined within five (5) Trading Days after
the tenth (10th) day following the Valuation Event by an independent, reputable
appraiser jointly selected by the Company and the Holder. The determination of such
appraiser shall be final and binding upon all parties absent manifest error and the fees and
expenses of such appraiser shall be borne by the Company.

     (v) Record Date. If the Company takes a record of the holders of shares of
Common Stock for the purpose of entitling them (A) to receive a dividend or other
distribution payable in shares of Common Stock, Options or in Convertible Securities or (B)
to subscribe for or purchase shares of Common Stock, Options or Convertible Securities, then
such record date will be deemed to be the date of the issue or sale of the shares of Common
Stock deemed to have been issued or sold upon the declaration of such dividend or the making
of such other distribution or the date of the granting of such right of subscription or
purchase (as the case may be).

          (d) Number of Warrant Shares. Simultaneously with any adjustment to the Exercise Price
pursuant to paragraphs (a) or (c) of this Section, unless waived in writing by the Holder with
respect to a particular adjustment, the number of Warrant Shares that may be purchased upon
exercise of this Warrant shall be increased or decreased proportionately, so that after such
adjustment the aggregate Exercise Price payable hereunder for the adjusted number of Warrant Shares
shall be the same as the aggregate Exercise Price in effect immediately prior to such adjustment.

          (e) Calculations. All calculations under this Section 9 shall be made to the
nearest cent or the nearest 1/100th of a share, as applicable. The number of shares of
Common Stock outstanding at any given time shall not include shares owned or held by or for the
account of the Company, and the disposition of any such shares shall be considered an issue or sale
of Common Stock.

8

 

          (f) Notice of Adjustments. Upon the occurrence of each adjustment pursuant
to this Section 9, the Company at its expense will promptly compute such adjustment in
accordance with the terms of this Warrant and promptly prepare a certificate setting forth such
adjustment, including a statement of the adjusted Exercise Price and adjusted number or type of
Warrant Shares or other securities issuable upon exercise of this Warrant (as applicable),
describing the transactions giving rise to such adjustments and showing in detail the facts upon
which such adjustment is based. Upon written request of a Holder, the Company will promptly deliver
a copy of each such certificate to the Holder and to the Company’s transfer agent.

          (g) Notice of Corporate Events. If the Company (i) declares a dividend or any other
distribution of cash, securities or other property in respect of its Common Stock, including,
without limitation, any granting of rights or warrants to subscribe for or purchase any capital
stock of the Company or any subsidiary, (ii) authorizes or approves, enters into any agreement
contemplating or solicits stockholder approval for any Fundamental Transaction or (iii) authorizes
the voluntary dissolution, liquidation or winding up of the affairs of the Company, then the
Company shall deliver to the Holder a notice describing the material terms and conditions of such
transaction, at least 10 calendar days prior to the applicable record or effective date on which a
Person would need to hold Common Stock in order to participate in or vote with respect to such
transaction, and the Company will take all steps reasonably necessary in order to insure that the
Holder is given the practical opportunity to exercise this Warrant prior to such time so as to
participate in or vote with respect to such transaction; provided, however, that the failure to
deliver such notice or any defect therein shall not affect the validity of the corporate action
required to be described in such notice. To the extent that any notice provided hereunder
constitutes, or contains, material, non-public information, the Company shall simultaneously file
such notice pursuant to a Current Report on Form 8-K.

     10. Payment of Exercise Price. The Holder shall pay the Exercise Price by delivery to
the Company of immediately available funds. Notwithstanding anything contained herein to the
contrary, the Holder may, in its sole discretion, unless a Preliminary Call Event has occurred
prior to such Exercise Date (and only for so long as such Preliminary Call Event is continuing) or
the Company has timely delivered an effective notice of a Call Event to the Holder prior to the
Exercise Date, exercise this Warrant in whole or in part and, in lieu of making the cash payment
otherwise contemplated to be made to the Company upon such exercise in payment of the aggregate
Exercise Price, elect instead to receive upon such exercise the “Net Number” of Warrant Shares
determined according to the following formula (a “Cashless Exercise”):

	 	 	 	 	 	 	 
	 

	 	Net Number =
	 	(A x B) - (A x C)
 

B
	 	 
	 	 	     For purposes of the foregoing formula:	 	 

A= the total number of Warrant Shares with respect to which this Warrant is then
being exercised.

B= the VWAP of the shares of Common Stock for the 5 Trading Day period immediately
preceding the date of the Exercise Notice

C= the Common Stock Exercise Price then in effect for the applicable Warrant
Shares at the time of such exercise (assuming for such purpose that the Common Stock
Authorization Date has occurred).

9

 

     11. No Rights as Stockholder. Until the exercise of this Warrant, the Holder shall
not have or exercise any rights by virtue hereof as a stockholder of the Company. In addition,
nothing contained in this Warrant shall be construed as imposing any liabilities on the Holder to
purchase any securities (upon exercise of this Warrant or otherwise) or as a stockholder of the
Company, whether such liabilities are asserted by the Company or by creditors of the Company.
Notwithstanding this Section 11, the Company shall provide the Holder with copies of the same
notices and other information given to the stockholders of the Company generally, contemporaneously
with the giving thereof to the stockholders.

     12. Call Event. At any point after which (a) the Common Stock Authorization Date has
occured and (b) the VWAP of the Common Stock for a minimum of 20 consecutive Trading Days shall
have been equal to at least eight times (8x) the Exercise Price (a “Call Event”), the Company may,
at its option, provide written notice of such Call Event to all, but not less than all, holders of
Warrants (as defined in the Securities Purchase Agreement) within 10 Trading Days after the
occurrence of the Call Event, in which case, the date that is ten business days after the Company
has provided such written notice to all such holders of a Call Event shall be the “Call Event
Expiration Date.” For the avoidance of doubt, at 11:59 p.m., New York City time on the Call Event
Expiration Date, the portion of this Warrant not exercised prior thereto shall be and become void
and of no value as further set forth below in this Section 12. Notwithstanding the foregoing, a
notice of a Call Event shall not be effective with respect to the Holder unless (i) one or more
Registration Statement(s) covering all of the shares issuable upon exercise of the Warrants held by
the Holder is (or are, as the case may be) effective and is (or are, as the case may be) not then
suspended and no stop order is in effect with respect thereto, and the Holder is able to sell all
such shares pursuant to such Registration Statement(s) through the Call Event Expiration Date, (ii)
on each Trading Day during the thirty (30) Trading Day period immediately preceding the Call Event
Expiration Date (the “Requisite Period”), all of the Warrant Shares then issuable upon exercise of
the Warrants held by the Holder are freely tradable, without restriction (subject to compliance
with prospectus delivery requirements to the extent applicable), on an Eligible Market (other than
such shares which are properly excluded from one or more Registration Statements pursuant to the
terms of the Registration Rights Agreement), (iii) on each day during the Requisite Period, the
Warrant Shares then issuable upon exercise of the Warrants held by the Holder are designated for
listing on an Eligible Market and shall not have been suspended from trading on such exchange, (iv)
the Company shall have, at all times during the Requisite Period, delivered Warrant Shares upon
exercise of the Warrants held by a Holder on a timely basis in accordance with the provisions of
the Securities Purchase Agreement and this Warrant, and (v) the Holder is able to sell all shares
issuable upon exercise of the Warrants held by the Holder at all times through the Call Event
Expiration Date without any liability under Section 16(b) of the Exchange Act. For purposes of
Section 10 hereof, “Preliminary Call Event” shall occur at any point after which (a) the Common
Stock Authorization Date has occured and (b) the VWAP of the Common Stock for a minimum of 10
consecutive Trading Days shall have been equal to at least eight times (8x) the Exercise Price and
the other conditions of a Call Event set forth above capable of being satisfied prior to such point
are satisfied (including, without limitation, that one or more Registration Statement(s) covering
all of the shares issuable upon exercise of the Warrants held by the Holder (other than

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such shares which are properly excluded therefrom pursuant to the terms of the Registration
Rights Agreement) is (or are, as the case may be) effective and is (or are, as the case may be) not
then suspended and no stop order is in effect with respect thereto).

     13. No Fractional Shares. No fractional shares of Warrant Shares will be issued in
connection with any exercise of this Warrant. In lieu of any fractional shares which would,
otherwise be issuable, the Company shall pay cash equal to the product of such fraction multiplied
by the VWAP of the shares of Common Stock for the 5 Trading Day period immediately preceding the
Date of Exercise (which VWAP shall be multiplied by 20 for fractional shares of Preferred Stock)..

     14. Notices. Any and all notices or other communications or deliveries hereunder
(including, without limitation, any Exercise Notice) shall be in writing and shall be deemed given
and effective on the earliest of (i) the date of transmission, if such notice or communication is
delivered via facsimile at the facsimile number specified in this Section prior to 5:30 p.m. (New
York City time) on a Trading Day, (ii) the next Trading Day after the date of transmission, if such
notice or communication is delivered via facsimile at the facsimile number specified in this
Section on a day that is not a Trading Day or later than 5:30 p.m. (New York City time) on any
Trading Day, (iii) the Trading Day following the date of mailing, if sent by nationally recognized
overnight courier service with next day delivery specified, or (iv) upon actual receipt by the
party to whom such notice is required to be given. The addresses for such communications shall be:
(i) if to the Company, to Health Benefits Direct Corporation, Health Benefits Direct Corporation,
150 N. Radnor-Chester Road, Radnor, PA 19087, Facsimile: (484) 654-2212, Attention: Chief Financial
Officer, or such other address as the Company shall so notify the Holder, or (ii) if to the Holder,
to the address or facsimile number appearing on the Warrant Register or such other address or
facsimile number as the Holder may provide to the Company in accordance with this Section.

     15. Warrant Agent. The Company shall serve as warrant agent under this Warrant. Upon
10 days’ notice to the Holder, the Company may appoint a new warrant agent. Any corporation into
which the Company or any new warrant agent may be merged or any corporation resulting from any
consolidation to which the Company or any new warrant agent shall be a party or any corporation to
which the Company or any new warrant agent transfers substantially all of its corporate trust or
shareholders services business shall be a successor warrant agent under this Warrant without any
further act. Any such successor warrant agent shall promptly cause notice of its succession as
warrant agent to be mailed (by first class mail, postage prepaid) to the Holder at the Holder’s
last address as shown on the Warrant Register.

     16. Additional Definitions. For purposes of this Warrant, the following terms shall
have the following meanings:

     (a) “Bloomberg” means Bloomberg Financial Markets.

     (b) “Common Stock Deemed Outstanding” means, at any given time, the number of shares of Common
Stock actually outstanding at such time, plus the number of shares of Common Stock deemed to be
outstanding pursuant to Sections 9(c))(i) and (ii) hereof regardless of whether the Options or
Convertible Securities are actually exercisable at such time.

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     (c) “Convertible Securities” means any stock or securities (other than Options) directly or
indirectly convertible into or exercisable or exchangeable for shares of Common Stock.

     (d) “Common Stock Authorization Date” means the date on which either (1) an amendment to the
Company’s certificate of incorporation increasing the number of the Company’s authorized shares of
Common Stock to 200,000,000 shall have been filed with Secretary of State of the State of Delaware
and become effective or (2) the full number of shares of Common Stock issuable upon conversion or
exercise of all securities issued by the Company pursuant to the Securities Purchase Agreement are
available and have been reserved for issuance.

     (e) “Eligible Market” means the Principal Market, The New York Stock Exchange, Inc., the
Nasdaq Global Select Market, the Nasdaq Global Market, the Nasdaq Capital Market or the American
Stock Exchange.

     (f) “Excluded Securities” means Options, Convertible Securities or Common Stock issued or
issuable: (i) upon exercise of the Warrants, (ii) upon conversion of any Options or Convertible
Securities which are outstanding on the date hereof, (iii) pursuant to any equity compensation plan
or arrangement, or (iv) in connection with mergers, acquisitions, strategic business partnerships
or alliances, joint ventures, bank financings (or similar financings), vendor, supplier and
consulting arrangements, equipment or other leases or other transactions, the primary purpose of
which, in the reasonable judgment of the Company’s Board of Directors, is not to raise additional
equity capital or convertible debt.

     (g) “Options” means any rights, warrants or options to subscribe for or purchase shares of
Common Stock or Convertible Securities.

     (h) “Person” means an individual, a limited liability company, a partnership, a joint venture,
a corporation, a trust, an unincorporated organization, any other entity and a government or any
department or agency thereof.

     (i) “Principal Market” means the National Association of Securities Dealers, Inc. OTC Bulletin
Board.

     (j) “Successor Entity” means the Person formed by, resulting from or surviving any Fundamental
Transaction.

     (k) “Trading Day” means any day on which the Common Stock is traded on the Principal Market,
or, if the Principal Market is not the principal trading market for the Common Stock, then on the
principal securities exchange or securities market on which the Common Stock is then traded;
provided that “Trading Day” shall not include any day on which the Common Stock is scheduled to
trade on such exchange or market for less than 4.5 hours or any day that the Common Stock is
suspended from trading during the final hour of trading on such exchange or market (or if such
exchange or market does not designate in advance the closing time of trading on such exchange or
market, then during the hour ending at 4:00:00 p.m., New York time).

     (l) “VWAP” means, for any security as of any date, the dollar volume-weighted

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average price for such security on the Principal Market (or, if the Principal Market is not
the principal trading market for such security, then on the principal securities exchange or
securities market on which such security is then traded) during the period beginning at 9:30:01
a.m., New York City Time, and ending at 4:00:00 p.m., New York City Time, as reported by Bloomberg
through its “Volume at Price” function or, if the foregoing does not apply, the dollar
volume-weighted average price of such security in the over-the-counter market on the electronic
bulletin board for such security during the period beginning at 9:30:01 a.m., New York City Time,
and ending at 4:00:00 p.m., New York City Time, as reported by Bloomberg, or, if no dollar
volume-weighted average price is reported for such security by Bloomberg for such hours, the
average of the highest closing bid price and the lowest closing ask price of any of the market
makers for such security as reported in the “pink sheets” by Pink Sheets LLC (formerly the National
Quotation Bureau, Inc.). If VWAP cannot be calculated for such security on such date on any of the
foregoing bases, the VWAP of such security on such date shall be the fair market value as mutually
determined by the Company and the Holder. If the Company and the Holder are unable to agree upon
the fair market value of such security, then such dispute shall be resolved in accordance with the
procedures in Section 20. All such determinations shall be appropriately adjusted for any share
dividend, share split or other similar transaction during such period.

     17. Rights Upon Distribution of Assets. If the Company shall declare or make any
dividend or other distribution of its assets (or rights to acquire its assets) to holders of shares
of Common Stock, by way of return of capital or otherwise (including, without limitation, any
distribution of cash, stock or other securities, property or options by way of a dividend, spin
off, reclassification, corporate rearrangement, scheme of arrangement or other similar transaction)
(a “Distribution”), at any time after the issuance of this Warrant, then, in each such case, the
Holder will be entitled to participate in such Distribution to the same extent that the Holder
would have participated therein if the Holder had held the number of shares of Common Stock
acquirable upon complete exercise of this Warrant (assuming for such purpose that this Warrant is
then exercisable for Common Stock) immediately before the date on which a record is taken for such
Distribution, or, if no such record is taken, the date as of which the record holders of shares of
Common Stock are to be determined for the participation in such Distribution..

     18. Purchase Rights. In addition to any adjustments pursuant to Section 9 above, if
at any time the Company grants, issues or sells any Options, Convertible Securities or rights to
purchase stock, warrants, securities or other property pro rata to the record holders of any class
of shares of Common Stock (the “Purchase Rights”), then the Holder will be entitled to acquire,
upon the terms applicable to such Purchase Rights, the aggregate Purchase Rights which the Holder
could have acquired if the Holder had held the number of shares of Common Stock acquirable upon
complete exercise of this Warrant (assuming for such purpose that this Warrant is then exercisable
for Common Stock) immediately before the date on which a record is taken for the grant, issuance or
sale of such Purchase Rights, or, if no such record is taken, the date as of which the record
holders of shares of Common Stock are to be determined for the grant, issue or sale of such
Purchase Rights.

13

 

     19. Noncircumvention. The Company hereby covenants and agrees that the Company will
not, by amendment of its Certificate of Incorporation, bylaws or through any reorganization,
transfer of assets, consolidation, merger, scheme of arrangement, dissolution, issue or sale of
securities, or any other voluntary action, avoid or seek to avoid the observance or performance of
any of the terms of this Warrant, and will at all times in good faith carry out all the
provisions of this Warrant and take all action as may be required to protect the rights of the
Holder. Without limiting the generality of the foregoing, the Company (i) shall not increase the
par value of any shares of Common Stock receivable upon the exercise of this Warrant above the
Exercise Price then in effect, (ii) shall take all such actions as may be necessary or appropriate
in order that the Company may validly and legally issue fully paid and nonassessable Warrant Shares
upon the exercise of this Warrant, and (iii) shall, so long as any of the Warrants are outstanding,
take all action necessary to reserve and keep available out of its authorized and unissued Warrant
Shares, solely for the purpose of effecting the exercise of the Warrants, the maximum number of
shares of Common Stock as shall from time to time be necessary to effect the exercise of the
Warrants then outstanding (without regard to any limit on exercise contained therein).

     20. Miscellaneous.

          (a) This Warrant shall be binding on and inure to the benefit of the parties hereto and their
respective permitted successors and assigns. Subject to the preceding sentence, nothing in this
Warrant shall be construed to give to any Person other than the Company and the Holder any legal or
equitable right, remedy or cause of action under this Warrant. This Warrant may be amended only in
writing signed by the Company and the Holder and their successors and assigns.

          (b) All questions concerning the construction, validity, enforcement and interpretation of
this Warrant shall be governed by and construed and enforced in accordance with the internal laws
of the State of Delaware, without regard to the principles of conflicts of law thereof. Each party
agrees that all legal proceedings concerning the interpretations, enforcement and defense of this
Warrant and the transactions herein contemplated (“Proceedings”) (whether brought against a party
hereto or its respective Affiliates, employees or agents) shall be commenced exclusively in the
state and federal courts sitting in the City of Wilmington, State of Delaware (the “Delaware
Courts”). Each party hereto hereby irrevocably submits to the exclusive jurisdiction of the
Delaware Courts for the adjudication of any dispute hereunder or in connection herewith or with any
transaction contemplated hereby or discussed herein, and hereby irrevocably waives, and agrees not
to assert in any Proceeding, any claim that it is not personally subject to the jurisdiction of any
Delaware Court, or that such Proceeding has been commenced in an improper or inconvenient forum.
Each party hereto hereby irrevocably waives personal service of process and consents to process
being served in any such Proceeding by mailing a copy thereof via registered or certified mail or
overnight delivery (with evidence of delivery) to such party at the address in effect for notices
to it under this Warrant and agrees that such service shall constitute good and sufficient service
of process and notice thereof. Nothing contained herein shall be deemed to limit in any way any
right to serve process in any manner permitted by law. Each party hereto hereby irrevocably
waives, to the fullest extent permitted by applicable law, any and all right to trial by jury in
any legal proceeding arising out of or relating to this Warrant or the transactions contemplated
hereby. If either party shall commence a Proceeding to enforce any provisions of this Warrant, then
the prevailing party in such Proceeding shall be reimbursed by the other party for its attorneys’
fees and other costs and expenses incurred with the investigation, preparation and prosecution of
such Proceeding.

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          (c) The headings herein are for convenience only, do not constitute a part of
this Warrant and shall not be deemed to limit or affect any of the provisions hereof.

          (d) In case any one or more of the provisions of this Warrant shall be invalid or
unenforceable in any respect, the validity and enforceability of the remaining terms and provisions
of this Warrant shall not in any way be affected or impaired thereby and the parties will attempt
in good faith to agree upon a valid and enforceable provision which shall be a commercially
reasonable substitute therefor, and upon so agreeing, shall incorporate such substitute provision
in this Warrant.

[SIGNATURE PAGE FOLLOWS]

15

 

IN WITNESS WHEREOF, the Company has caused this Warrant to be duly executed by its authorized
officer as of the date first indicated above.

	 	 	 	 	 	 	 
	 	 	HEALTH BENEFITS DIRECT CORPORATION	 	 
	 
	 	 	 	 	 	 
	 

	 	By:

Name:
	 	/S/ ANTHONY R. VERDI
 

Anthony R. Verdi
	 	 
	 

	 	Title:
	 	Chief Financial Officer

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