SIDE LETTER RE: CLOSING MATTERS
Exhibit
10.23
SIDE
LETTER RE: CLOSING MATTERS
THIS
SIDE
LETTER RE: CLOSING MATTERS (this "Side
Letter")
is
entered into as of February 27, 2008 by and among TRUST BENEFITS ONLINE, LLC,
a
Delaware limited liability company ("TBOL"), INFORMATION CONCEPTS, INC., a
California corporation ("ICI"), ASSOCIATED THIRD PARTY ADMINISTRATORS, INC.,
a
California corporation ("ATPA"), XXXXX XXXXXXXXXX ("XxxXxxxxxx"), XXXXX X.
XXXXXX, XXXXXX XXXXXX, and BENEFITS TECHNOLOGIES, LLC, a Delaware limited
liability company (the "Company") (each party shall sometimes be referenced
to
herein as a "Party" and, collectively, as the "Parties"). Reference is made
herein to that certain Asset Contribution and Combination Agreement by and
among
the Parties (the "Contribution
Agreement").
Capitalized terms that are not defined in this Side Letter shall have the
meanings given to such terms in the Contribution Agreement.
RECITALS
A. The
Parties desire to establish the Closing Date as of the date of this Side
Letter.
B. In
connection with the Closing, the Parties desire to clarify certain issues and
modify certain terms of the Contribution Agreement.
AGREEMENT
NOW
THEREFORE, IT IS HEREBY AGREED, for good and valuable consideration the receipt
and sufficiency of which are hereby acknowledged, as follows:
1. Closing
Date and Effective Date.
The
Closing Date under Section 5 of the Contribution Agreement is hereby agreed
to
be February 27, 2008; however, in accordance with the applicable transfer
documents, the effective date of the contribution of assets and liabilities
of
ICI and TBOL is agreed to be February 1, 2008 (the “Effective Date”). The
Company hereby agrees to indemnify and hold harmless ICI, ATPA and TBOL, as
applicable, for all liabilities and obligations arising in connection with
such
assets and liabilities from and including the Effective Date to the Closing
Date, except only the Excluded Liabilities under the Contribution
Agreement.
2. ICI
and TBOL Consents.
As of
the date hereof, ICI and TBOL have not yet obtained consents for other Assumed
Contracts. The parties acknowledge that the delivery of such consents (the
"ICI
Consents"
and the
“TBOL Consents”) by ICI and TBOL is needed to properly transfer certain Assumed
Contracts to the Company in accordance with the provisions of the Contribution
Agreement. In order to facilitate the Closing of the transaction as of the
Closing Date, the Parties agree to address the ICI Consents and TBOL Consents
as
follows:
(a) Obtaining
and delivering the ICI Consents and TBOL Consents shall become and is a
post-closing condition of the Company, and the Company waives any failure of
ICI, TBOL or the ICI Shareholders representations that state that all such
consents have been obtained.
(b) The
Company, TBOL and ICI shall act in good faith and with reasonable diligence
in
obtaining the required ICI Consents and TBOL Consents, after the Closing Date,
but cannot provide absolute assurance that they will be obtained.
3. Xxx
Xxxxx Note.
In the
event that ICI’s payment obligation to Xxx Xxxxx is assumed by the Company in
accordance with Section 2.5.3 of the Contribution Agreement, and notwithstanding
anything to the contrary in such Section 2.5.3, the Company shall provide to
Xxx
Xxxxx in connection with any such assumption of the obligation to Xxx Xxxxx
a
Subordinated Note which shall set forth a minimum monthly payment of $2,000
until fully paid, and such Subordinated Note shall bear interest at the rate
of
five percent (5%) per year
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4. TBOL
Name Change.
The
Parties acknowledge that in accordance with Section 6.1.12 of the Contribution
Agreement, TBOL is required to file a Certificate of Amendment changing its
name
to a name that does not contain any of the words in its current name. The
Parties agree that the change of TBOL’s name shall be a post-closing condition
of TBOL, and that TBOL shall act in good faith and with reasonable diligence
to
effectuate the name change, and in any event shall file Amended Articles to
accomplish such change within 15 days after the Closing Date.
5. Certain
Agreements.
The
Parties acknowledge that in accordance with Sections 4.1.3 - 4.1.6 of the
Contribution Agreement, the Parties are required to execute and deliver the
following agreements: (i) Conversion, Configuration and Implementation Services
Agreement for ATPA's existing customers; (ii) Software-As-A-Service Agreement
to
run ATPA's business on the Company's software; (iii) Non-Exclusive License
Agreement for ATPA's right to use PlanIt for its customers; and (iv) Maintenance
and Support Agreement once ATPA's customers go live on PlanIt. The Parties
agree
that the execution and delivery of the foregoing agreements has been and
continues to be a condition to ICI’s willingness to enter into the transaction
contemplated by the Contribution Agreement, but in reliance upon the good faith
assurances of TBOL and ATPA that such agreements are forthcoming on the terms
discussed between the Parties, the Parties agree that the execution and delivery
of such agreements shall be a post-closing condition of the respective parties
thereto, and that such parties shall act in good faith and with reasonable
diligence to finalize such agreements.
6. Employment
Agreements.
It is
acknowledged that Xxxxxx, Xxxxxx and XxxXxxxxxx desire to negotiate and receive
employment agreements or member services agreements after the Closing, and
the
Parties agree to exercise reasonable diligence to negotiate such agreements
if
and to the extent reasonably practicable
7. Intercreditor
Agreements and Releases; Notes.
As of
the date hereof, the Parties have not yet obtained Intercreditor Agreements
and
Releases (the “Releases”)
from
all of the Friendly Debt creditors, or delivered the Subordinated Promissory
Notes ("Notes")
to
such creditors. The parties acknowledge that the delivery of the Notes and
Releases is required by the Contribution Agreement, and the Company hereby
affirms its obligation to assume the Friendly Debt obligations upon the terms
and conditions set forth in the Contribution Agreement. In order to facilitate
the Closing of the transaction as of the Closing Date, the Parties agree that
obtaining and delivering the Notes and Releases shall become and is a
post-closing condition of the Company, and the Company waives any failure of
ICI
or the ICI Shareholders to deliver such Releases on the Closing Date.
Furthermore, the Company and ICI shall act in good faith and with reasonable
diligence in obtaining the required Releases, and delivering the Notes, after
the Closing Date.
This
Side
Letter constitutes an amendment to the Contribution Agreement in accordance
with
Section 19.8 of the Contribution Agreement.
[SIGNATURE
PAGE TO FOLLOW]
2
IN
WITNESS WHEREOF, the parties have executed this Side Letter as of the date
first
written above.
| ASSOCIATED THIRD PARTY ADMINISTRATORS | TRUST BENEFITS ONLINE, LLC | |||
| By: | /s/ Xxxx Xxxxxxxxx | By: | /s/ Xxxxx XxxXxxxxxx | |
|
Name: Xxxx
Xxxxxxxxx
|
Name: Xxxxx XxxXxxxxxx |
|||
|
Title: President
|
Title: Manager
|
|||
| INFORMATION CONCEPTS, INC. | BENEFITS TECHNOLOGIES, LLC | |||
| By: | /s/ Xxxxx Xxxxxx | By: | /s/ Xxx Xxxxxxx | |
|
Name: Xxxxx
Xxxxxx
|
Name: Xxx Xxxxxxx |
|||
|
Title: President
|
Title: Chairman
|
|||
| /s/ Xxxxx X. Xxxxxx | |||
|
Xxxxx X. Xxxxxx |
|||
| /s/ Xxxxxx Xxxxxx | |||
|
Xxxxxx Xxxxxx |
|||
| /s/ Xxxxx XxxXxxxxxx | |||
|
Xxxxx XxxXxxxxxx |
[SIGNATURE
PAGE TO SIDE LETTER RE: CLOSING MATTERS]
