Exhibit 10.24
LOCK-UP AGREEMENT
The undersigned is the beneficial owner of shares of common stock,
$0.001 par value per share (the "COMMON STOCK"), securities substantially
similar to the Common Stock ("OTHER SECURITIES"), or securities convertible into
or exercisable or exchangeable for the Common Stock or Other Securities
("Convertible Securities"), of Health Benefits Direct Corporation, a Delaware
corporation (the "COMPANY"), (including shares of Common Stock acquired in
connection with the contribution by such persons of certain limited liability
company membership interests of predecessor businesses to the Company), such
securities, and all such additional securities owned or acquired by the
undersigned, subject to this Agreement. The undersigned understands that the
Company intends to enter into a reverse merger transaction with a
publicly-traded company, concurrently with a private placement of up to
$7,500,000 worth of Units, with each Unit consisting of 50,000 shares of Common
Stock and a warrant to purchase 25,000 shares of Common Stock (the "FUNDING
TRANSACTIONS").
In recognition of the benefit that the Funding Transactions will
confer upon the undersigned, and for other good and valuable consideration, the
receipt and sufficiency of which are hereby acknowledged, the undersigned
agrees, for the benefit of the Company, and each investor in the Funding
Transaction, that, during the period ending twenty four (24) months after the
closing of the Funding Transactions (the "Lock Up Period"), the undersigned will
not, without the prior written consent of the investors holding a majority of
the Common Stock underlying the Units, directly or indirectly, (i) offer, sell,
offer to sell, contract to sell, hedge, pledge, sell any option or contract to
purchase, purchase any option or contract to sell, grant any option, right or
warrant to purchase or sell (or announce any offer, sale, offer of sale,
contract of sale, hedge, pledge, sale of any option or contract to purchase,
purchase of any option or contract of sale, grant of any option, right or
warrant to purchase or other sale or disposition), or otherwise transfer or
dispose of (or enter into any transaction or device which is designed to, or
could be expected to, result in the disposition by any person at any time in the
future), any shares of Common Stock, Other Securities, or Convertible
Securities, beneficially owned (within the meaning of Rule 13d-3 under the
Securities Exchange Act of 1934, as amended), by the undersigned on the date
hereof or hereafter acquired or (ii) enter into any swap or other agreement or
any transaction that transfers, in whole or in part, directly or indirectly, the
economic consequence of ownership of the Common Stock, Other Securities, or
Convertible Securities, whether any such swap or transaction described in clause
(i) or (ii) above is to be settled by delivery of Common Stock, Other
Securities, or Convertible Securities, in cash or otherwise; provided, however,
that during the last twelve (12) months of the Lock Up Period, only fifty (50)
percent of the undersigned's Common Stock, Other Securities, or Convertible
Securities shall be subject to the foregoing restrictions.
Within twelve (12) months following the initial closing of the
Funding Transaction, subject to the Lock Up Shares restriction on future sales,
the Company shall file a registration statement with the SEC covering the resale
of the shares of Common Stock held by founders and for management shares issued
and issuable under options and other awards, which shares may be included in any
Registration Statement on Form SB-2 covering the resale of the shares of Common
Stock and warrants offered pursuant to the Founding Transaction.
In furtherance of the foregoing, the Company and its transfer agent
are hereby authorized to decline to make any transfer of securities if such
transfer would constitute a violation or breach of this agreement.
Notwithstanding the foregoing, the undersigned may transfer Common
Stock, Other Securities, or Convertible Securities (i) as a bona fide gift or
gifts, provided that prior to such transfer the donee or donees thereof agree in
writing to be bound by the restrictions set forth herein, (ii) to any trust,
partnership, corporation or other entity formed for the direct or indirect
benefit of the undersigned or the immediate family of the undersigned, provided
that prior to such transfer a duly authorized officer, representative or trustee
of such transferee agrees in writing to be bound by the restrictions set forth
herein, and provided further that any such transfer shall not involve a
disposition for value or (iii) if such transfer occurs by operation of law, such
as rules of descent and distribution, statutes governing the effects of a merger
or a qualified domestic order, provided that prior to such transfer the
transferee executes an agreement stating that the transferee is receiving and
holding the shares subject to the provisions of this agreement. For purposes
hereof, "immediate family" shall mean any relationship by blood, marriage or
adoption, not more remote than first cousin.
The undersigned understands that the Company and the investors will
proceed with the Funding Transactions in reliance on this agreement. Whether or
not the Funding Transactions are consummated depends on a number of factors,
including market conditions. The undersigned hereby represents and warrants that
the undersigned has full power and authority to enter into this agreement and
that, upon request, the undersigned will execute any additional documents
necessary in connection with the enforcement hereof. Any obligations of the
undersigned shall be binding upon the heirs, personal representatives,
successors and assigns of the undersigned.
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IN WITNESS WHEREOF, the undersigned has caused this Lock-Up
Agreement to be executed as of 23rd day of November 2005.
HEALTH BENEFITS DIRECT CORP.
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