Advisory Agreement between Health Benefits Direct Corporation and Warren V. Musser (November 1, 2005)

 Exhibit 10.25 ADVISORY AGREEMENT THIS AGREEMENT (the "AGREEMENT"), dated as of November 1, 2005, by and between Health Benefits Direct Corporation, a Delaware corporation (the "COMPANY"), and Warren V. Musser (the "ADVISOR"). W I T N E S S E T H: WHEREAS, the Company desires to retain the Advisor and the Advisor desires to be retained by the Company pursuant to the terms and conditions hereinafter set forth. NOW, THEREFORE, in consideration of the foregoing and the mutual promises and covenants herein contained, it is hereby agreed as follows: Section 1. RETENTION. (a) The Company hereby retains the Advisor on an non-exclusive basis to perform the services set forth in Section 1(b), commencing on the date hereof, and the Advisor hereby accepts such retention and shall perform for the Company the duties described herein, faithfully and to the best of his ability. (b) The Advisor shall serve as a business advisor to the Company and render such advice and services to the Company as may be reasonably requested by the Company including, without limitation, introducing the Company to prospective equity investors. Section 2. COMPENSATION. (a) In consideration of the Advisor introducing the Company to certain potential providers of an equity financing (the "EQUITY FINANCING") which the Company closes, the Company shall pay the Advisor a fee consisting of (i) cash in an amount equal to four percent (4%) of the total gross cash proceeds of the Equity Financing and (ii) warrants to purchase such number of shares of the Company's common stock (the "COMMON STOCK") as shall equal five percent (5%) of the shares of the Common Stock issued or to be issued upon conversion and/or exercise in the Equity Financing on a post-financing basis, at an exercise price equal to $1.50 per share, exercisable, in whole or in part, during the five (5) year period commencing on the issuance date of such warrants (the "WARRANT Fee"). The Warrant Fee, at the option of the Advisor, may be paid for in cash or by an exchange as a "cashless exercise." The Advisor will limit his activities described in this Section 2 to making introductions between the Company and individuals that may be interested in investing in the Company. In this role, the Advisor will not solicit such individuals to make an investment in the Company, make any recommendations to such individuals regarding an investment in the Company, or provide any analysis or advice regarding an investment in the Company to such individuals. (b) The Company shall not pay to the Advisor any retainer. (c) Except as otherwise provided for herein: (i) All fees due to the Advisor hereunder shall have no offsets, are non-refundable, non-cancelable and shall be free and clear of any and all encumbrances. (ii) All cash fees due the Advisor hereunder shall be paid to the Advisor immediately upon closing of any Equity Financing (collectively, the "FEE TRANSACTION") by wire transfer of immediately available  funds from the proceeds of the Fee Transaction, either directly or from the formal or informal escrow arrangement established for the Fee Transaction (collectively, the "CLOSING AGENT"), pursuant to the written wire transfer instructions of the Advisor provided to the Closing Agent. (iii) All securities fees due the Advisor hereunder shall be made via DTC or the DWAC system, or by certified certificates, as applicable, and shall be delivered to the Advisor from the Closing Agent immediately upon closing of any Fee Transaction. (iv) All securities fees due the Advisor hereunder shall be duly issued, fully-paid (exclusive of warrants or options) and non-assessable and shall be in the same form, with the same terms and conditions as the securities provided to the Company pursuant to any Fee Transaction. (v) The Company authorizes and directs the Closing Agent to distribute directly or from escrow any and all fees due the Advisor hereunder. The Company agrees that such fees and the manner of payment and delivery as herein provided shall be included in the documentation of any Fee Transaction. Section 3. EXPENSES. The Company shall reimburse the Advisor for all out-of-pocket expenses incurred by the Advisor in connection with his duties hereunder, including but not limited to the Advisor's due diligence activities with respect to the Company. Any such expenses shall be evidenced by written documentation prior to reimbursement and shall not exceed fifteen thousand dollars ($15,000) in the aggregate. Reimbursement by the Company to the Advisor, or to any third party designated by the Advisor, will be made immediately upon closing of any Fee Transaction by wire transfer of immediately available funds from the proceeds of the Fee Transaction pursuant to wire instructions provided to the Company by the Advisor. Section 4. TERMINATION. Either party may terminate this Agreement at any time for any reason or no reason; PROVIDED, HOWEVER, that the Company shall not terminate, cancel or rescind any agreements, term sheets or letters of intent pursuant to any Equity Financing unless such cancellation is made pursuant to pertinent "out clauses" of those respective documents ("JUST CAUSE"). In the event the Company elects not to proceed with an Equity Financing that was facilitated by the Advisor without Just Cause, the Company shall immediately pay to the Advisor a termination fee equal to the greater of (a) $50,000 or (b) fifty percent (50%) of the total fees that would have been paid to the Advisor had the transaction been effected. Section 5. CONFIDENTIAL INFORMATION. The Advisor agrees that during and after the term of this Agreement, it will keep in strictest confidence, and will not disclose or make accessible to any other person without the written consent of the Company, the Company's products, services and technology, both current and under development, promotion and marketing programs, lists, trade secrets and other confidential and proprietary business information of the Company or any of its clients and third parties including, without limitation, Proprietary Information (as defined in Section 6) (all of the foregoing is referred to herein as the "CONFIDENTIAL INFORMATION"). The Advisor agrees (a) not to use any such Confidential Information for himself or others; and (b) not to take any such material or reproductions thereof from the Company's facilities at any time except, in each case, as required in connection with the Advisor's duties hereunder. Notwithstanding the foregoing, the parties agree that the Advisor is free to use (a) information in the public domain not as a result of a 2  breach of this Agreement, (b) information lawfully received form a third party who had the right to disclose such information and (c) the Advisor's own independent skill, knowledge, know-how and experience to whatever extent and in whatever way it wishes, in each case consistent with his obligations as the Advisor and that, at all times, the Advisor is free to conduct any research relating to the Company's business. Section 6. OWNERSHIP OF PROPRIETARY INFORMATION. The Advisor agrees that all information that has been created, discovered or developed by the Company, its subsidiaries, affiliates, licensors, licensees, successors or assigns (collectively, the "AFFILIATES") (including, without limitation, information relating to the development of the Company's business created, discovered, developed by the Company or any of its affiliates during the term of this Agreement, and information relating to the Company's customers, suppliers, advisors, and licensees) and/or in which property rights have been assigned or otherwise conveyed to the Company or the Affiliates, shall be the sole property of the Company or the Affiliates, as applicable, and the Company or the Affiliates, as the case may be, shall be the sole owner of all patents, copyrights and other rights in connection therewith, including, without limitation, the right to make application for statutory protection. All the aforementioned information is hereinafter called "PROPRIETARY INFORMATION." By way of illustration, but not limitation, Proprietary Information includes trade secrets, processes, discoveries, structures, inventions, designs, ideas, works of authorship, copyrightable works, trademarks, copyrights, formulas, improvements, inventions, product concepts, techniques, marketing plans, merger and acquisition targets, strategies, forecasts, blueprints, sketches, records, notes, devices, drawings, customer lists, patent applications, continuation applications, continuation-in-part applications, file wrapper continuation applications and divisional applications and information about the Company's Affiliates, its employees and/or advisors (including, without limitation, the compensation, job responsibility and job performance of such employees and/or advisors). All original content, proprietary information, trademarks, copyrights, patents or other intellectual property created by the Advisor that does not include any specific information relative to the Company's proprietary information, shall be the sole and exclusive property of the Advisor. Section 7. INDEMNIFICATION. The Company represents that all materials provided or to be provided to the Advisor or any third party regarding the Company's financial affairs or operations are and shall be truthful and accurate and in compliance with any and all applicable federal and state securities laws. The Company agrees to indemnify and hold harmless the Advisor and his advisors, professionals and affiliates, the respective directors, officers, partners, members, managers, agents and employees and each other person, if any, controlling the Advisor or any of his affiliates to the full extent lawful, from and against all losses, claims, damages, liabilities and expenses incurred by them (including reasonable attorneys' fees and disbursements) that result from actions taken or omitted to be taken (including any untrue statements made or any statement omitted to be made) by the Company, its agents or employees which relate to the scope of this Agreement and the performance of the services by the Advisor contemplated hereunder. Each person or entity seeking indemnification hereunder shall promptly notify the Company of any loss, claim, damage or expense for which the Company may become liable pursuant to this Section 7. No party shall pay, settle or acknowledge liability under any such claim without consent of the party liable for indemnification, and shall permit the Company a reasonable opportunity to cure any underlying 3  problem or to mitigate actual or potential damages. The scope of this indemnification between the Advisor and the Company shall be limited to, and pertain only to certain transactions contemplated or entered into pursuant to this Agreement. The Company shall have the opportunity to defend any claim for which it may be liable hereunder, provided it notifies the party claiming the right to indemnification in writing within fifteen (15) days of notice of the claim. The rights stated pursuant to this Section 7 shall be in addition to any rights that the Advisor, or any other person entitled to indemnification may have in common law or otherwise, including, but not limited to, any right to contribution. Section 8. NOTICES. Any notice or other communication under this Agreement shall be in writing and shall be deemed to have been duly given: (a) upon facsimile transmission (with written transmission confirmation report) at the number designated below; (b) when delivered personally against receipt therefore; (c) one day after being sent by Federal Express or similar overnight delivery; or (d) five (5) business days after being mailed registered or certified mail, postage prepaid. The addresses for such communications shall be as set forth below or to such other address as a party shall give by notice hereunder to the other party to this Agreement. If to the Company: Health Benefits Direct Corporation 2900 Gateway Drive Pompano Beach, Florida 33069 Telephone: (954) 944-4447 Telecopy: (954) 691-4010 Attention: Mr. Scott Frohman, Chief Executive Officer If to the Advisor: Warren V. Musser 435 Devon Park Drive, Suite 500 Wayne, PA 19087 Telephone: 610 ###-###-#### Telecopy: 610 ###-###-#### Attention: Mr. Warren V. Musser Section 9. STATUS OF ADVISOR. The Advisor shall be deemed to be an independent contractor and, except as expressly provided or authorized in this Agreement, shall have no authority to act for on behalf of or represent the Company. This Agreement does not create a partnership or joint venture. Section 10. OTHER ACTIVITIES OF ADVISOR. The Company recognizes that the Advisor now renders and may continue to render consulting and other services to other companies that may or may not conduct business and activities similar to those of the Company. The Advisor shall not be required to devote his full time and attention to the performance of his duties under this Agreement, but shall devote only so much of his time and attention as it deems reasonable or necessary for such purposes. 4  Section 11. SUCCESSORS AND ASSIGNS. This Agreement and all of the provisions hereof shall be binding upon and inure to the benefit of the parties hereto and their respective successors and permitted assigns. This Agreement and any of the rights, interests or obligations hereunder may be assigned by the Advisor without the prior written consent of the Company. This Agreement and any of the rights, interests or obligations hereunder may not be assigned by the Company without the prior written consent of the Advisor, which consent shall not be unreasonably withheld. Section 12. SEVERABILITY OF PROVISIONS. If any provision of this Agreement shall be declared by a court of competent jurisdiction to be invalid, illegal or incapable of being enforced in whole or in part, the remaining conditions and provisions or portions thereof shall nevertheless remain in full force and effect and enforceable to the extent they are valid, legal and enforceable, and no provision shall be deemed dependent upon any other covenant or provision unless so expressed herein. Section 13. ENTIRE AGREEMENT; MODIFICATION. This Agreement contains the entire agreement of the parties relating to the subject matter hereof, and the parties hereto have made no agreements, representations or warranties relating to the subject matter of this Agreement which are not set forth herein. No amendment or modification of this Agreement shall be valid unless made in writing and signed by each of the parties hereto. Section 14. NON-WAIVER. The failure of any party to insist upon the strict performance of any of the terms, conditions and provisions of this Agreement shall not be construed as a waiver or relinquishment of future compliance therewith; and the said terms, conditions and provisions shall remain in full force and effect. No waiver of any term or condition of this Agreement on the part of any party shall be effective for any purpose whatsoever unless such waiver is in writing and signed by such party. Section 15. REMEDIES FOR BREACH. The Advisor and the Company mutually agree that any breach of Sections 2, 4, 5, 6, or 7 of this Agreement by the Advisor or the Company may cause irreparable damage to the other party and/or their affiliates, and that monetary damages alone would not be adequate and, in the event of such breach or threat of breach, the damaged party shall have, in addition to any and all remedies at law and without the posting of a bond or other security, the right to an injunction, specific performance or other equitable relief necessary to prevent or redress the violation of either party's obligations under such Sections. In the event that an actual proceeding is brought in equity to enforce such Sections, the offending party shall not urge as a defense that there is an adequate remedy at law nor shall the damaged party be prevented from seeking any other remedies that may be available to it. The defaulting party shall pay all attorneys' fees and costs incurred by the other party in enforcing this Agreement. Section 16. GOVERNING LAW. The parties hereto acknowledge that the transactions contemplated by this Agreement bear a reasonable relation to the Commonwealth of Pennsylvania. This Agreement shall be governed by, and construed and interpreted in accordance with, the internal laws of the Commonwealth of Pennsylvania without regard to such state's principles of conflicts of laws. The parties irrevocably and unconditionally agree that the exclusive place of jurisdiction for any action, suit or proceeding ("ACTIONS") relating to this Agreement shall be in the state and/or federal courts situate in the county and 5  state of Pennsylvania. Each party irrevocably and unconditionally waives any objection it may have to the venue of any Action brought in such courts or to the convenience of the forum. Final judgment in any such Action shall be conclusive and may be enforced in other jurisdictions by suit on the judgment, a certified or true copy of which shall be conclusive evidence of the fact and the amount of any indebtedness or liability of any party therein described. Service of process in any Action by any party may be made by serving a copy of the summons and complaint, in addition to any other relevant documents, by commercial overnight courier to any other party at their address set forth in this Agreement. Section 17. HEADINGS. The headings of the Sections are inserted for convenience of reference only and shall not affect any interpretation of this Agreement. Section 18. COUNTERPARTS. This Agreement may be executed in counterpart signatures, each of which shall be deemed an original, but all of which, when taken together, shall constitute one and the same instrument, it being understood that both parties need not sign the same counterpart. In the event that any signature is delivered by facsimile transmission, such signature shall create a valid and binding obligation of the party executing (or on whose behalf such signature is executed) the same with the same force and effect as if such facsimile signature page were an original thereof. [Signature Page Immediately Follows] 6  IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the day and year first written above. HEALTH BENEFITS DIRECT CORPORATION By: /s/ Scott Frohman ----------------------------------- Name: Scott Frohman Title: CEO /s/ Warren V. Musser --------------------------------------- Warren V. Musser SIGNATURE PAGE TO ADVISORY AGREEMENT