1
EXHIBIT 10.12
X. XXXXXX ASSOCIATES, INC.
000 Xxxxx Xxxxxx
Xxx Xxxx, XX 00000
Xx. Xxxx Xxxxxxxx
The Recovery Network
0000 0xx Xxxxxx Xxxxx 000
Xxxxx Xxxxxx, XX 00000
December 7, 1998
Dear Xxxx:
We are writing this letter (the "Letter Agreement") to confirm our
understanding that X. Xxxxxx Associates, Inc. ("Xxxxxx") has been retained by
The Recovery Network ("RNet" or the "Company") to represent the Company, on an
exclusive basis with respect to certain investors Xxxxxx has identified
("Xxxxxx'x Investors"), in connection with capital raising for RNet. Xxxxxx will
act as RNet's financial advisor for a period of one year, in all negotiations
leading to the possible purchase of a portion of RNet's capital stock or
otherwise by Xxxxxx'x Investors (the "Transaction").
For purposes of this Letter Agreement, RNet shall be subject to a fee
(the "Fee"), payable to Xxxxxx in the event of a Transaction with Xxxxxx'x
Investors. Xxxxxx'x Investors currently include: Xxxxx & Xxxxx; Liberty Media;
Xxxxxx Xxxxx; Time Warner; Xxxx Xxxxx'x Vulcan Venturess and the Mashantucket
Pequots. Xxxxxx and RNet agree that Xxxxxx may present, in writing, additional
investors to RNet for inclusion as Xxxxxx'x Investors and upon acceptance by
RNet will be subject to a Fee.
In November of 1998, RNet initiated discussions with Xxxxxx concerning
their interest in, and their willingness, to represent RNet in the Transaction.
Xxxxxx has met on several occasions with RNet, and has produced a list of
Xxxxxx'x Investors for the placement of the Transaction. Xxxxxx will act as
RNet's financial advisor during the period to place the equity interest in RNet
with Xxxxxx'x Investors. In their capacity as financial advisor to RNet, Xxxxxx
will assist, as needed in all matters necessary to result in a successful
closing of the Transaction.
For our services, it is agreed that RNet will pay, or cause to be paid,
a cash Fee equal to the 6% (six percent) of the total consideration received by
RNet and to reimburse Xxxxxx for its out-of-pocket expenses.
The Fee shall be payable to Xxxxxx in cash upon closing of any portion
of the Transaction.
2
X. XXXXXX ASSOCIATES, INC.
Xx. Xxxx Xxxxxxxx
December 7, 1998
page two
The aggregate consideration shall be deemed to be the total amount
received by RNet upon consummation of the Transaction. The aggregate
consideration paid shall be deemed to include those amounts paid in cash, notes,
stock or other evidence of indebtedness, in connection with the Transaction.
Should a portion of the aggregate consideration be in the form of an "earn-out",
Xxxxxx agrees that only the initial face value paid in consideration of the
earn-out shall be subject to the Fee. In the event that the consideration is
paid in whole or in part in the form of securities, the value of such
securities, for purposes of calculating our Fee, shall be the face value
thereof.
This authorization may be terminated by the Company or Xxxxxx, at any
time with or without cause, upon written advice to that effect to the other
party. Xxxxxx shall be entitled to its full compensation that would have been
payable under this Letter Agreement in the event a Transaction between the
Company is consummated prior to the expiration of two years after termination of
this authorization.
Please confirm that the foregoing is in accordance with your
understanding by signing and returning to us the duplicate of this Letter
Agreement enclosed.
Sincerely,
By: /s/ XXXXXX X. XXXXX
------------------------------
Xxxxxx X. Xxxxx
X. Xxxxxx Associates, Inc.
Agreed to and Accepted:
The Recovery Network
/s/ XXXX XXXXXXXX Date: 12-14-98
----------------------------------- ------------------------
By: Xxxx Xxxxxxxx
3
X. XXXXXX ASSOCIATES, INC.
000 Xxxxx Xxxxxx
Xxx Xxxx, XX 00000
Xx. Xxxxxxx X. Xxxxx
Chairman
The Recovery Network
0000 0xx Xxxxxx Xxxxx 000
Xxxxx Xxxxxx, XX 00000
April 11, 1999
Dear Xxxx:
We are writing this letter (the "Letter Agreement") to confirm our
understanding that X. Xxxxxx Associates, Inc. ("Xxxxxx") has been retained by
The Recovery Network ("RNet" or the "Company") to represent the Company, on an
exclusive basis with respect to; a) the sale of the Company's 20% ownership in
RecoveryNet Interactive ("RI Sale"); and b) the settlement with certain
creditors identified by the Company, ("Xxxxxx'x Creditors"), in connection with
RI Sale and the settling of RNet's obligations to Xxxxxx'x Creditors ("RNet's
Debts") and; c) assistance, on a best efforts basis, in raising $300,000 of
additional capital. Xxxxxx will act as RNet's financial advisor for a period of
two months, in all negotiations leading to the possible settlement of all, or a
portion, of RNet's Debts owed Xxxxxx'x Creditors by full payment, payment in
part, forgiveness and, or the issuance of capital stock (collectively a
"Transaction").
For purposes of this Letter Agreement, RNet shall be subject to a fee
(the "Fee"), payable to Xxxxxx in the event of a Transaction with Xxxxxx'x
Creditors. The current list of Xxxxxx'x Creditors are listed in the attached
Exhibit X. Xxxxxx and RNet agree that Xxxxxx may be given additional creditors
by RNet for inclusion as Xxxxxx'x Creditors.
During April 1999 Xxxxxx has been in discussion with a prospective
buyer concerning the purchase of RI Sale which has resulted in an $850,000 cash
offer. The Company has expressed interest in accepting such an offer, contingent
on a satisfactory resolution, with Xxxxxx'x Creditors. On April 9, 1999, RNet
and Xxxxxx have produced a list of Xxxxxx'x Creditors for the Transaction (see
Exhibit A attached). Xxxxxx will act as RNet's financial advisor during the next
two month period to settle RNet's Debts and accept the purchase of RI Sale. In
their capacity as financial advisor to RNet, Xxxxxx will assist, as needed in
all matters necessary to result in a successful closing of a Transaction.
For our services, it is agreed that RNet will pay, or cause to be paid,
a Fee of; 1) 900,000 newly issued common shares of RNet common stock; 2) reduce
all warrants held by Xxxxxx, and, or Xxxxxx X. Xxxxx, to $.43 per warrant,
("Warrant Reduction") and; 3) will reimburse Xxxxxx for its out-of-pocket
expenses.
4
X. XXXXXX ASSOCIATES, INC.
Xx. Xxxxxxx X. Xxxxx
April 11, 1999
page two
The Warrant Reduction shall be made upon acceptance of this Letter
Agreement. The Fee shall be paid to Xxxxxx in RNet common stock at the closing
of the Transaction. The Company will reimburse Xxxxxx for any out-of-pocket cash
expenses.
This authorization may be terminated by the Company or Xxxxxx, at any
time with or without cause, upon written advice to that effect to the other
party. Xxxxxx shall be entitled to its full compensation that would have been
payable under this Letter Agreement in the event a Transaction between the
Company is consummated prior to the expiration of six months after termination
of this authorization.
Please confirm that the foregoing is in accordance with your
understanding by signing and returning to us the duplicate of this Letter
Agreement enclosed.
Sincerely,
By: /s/ XXXXXX X. XXXXX
------------------------------
Xxxxxx X. Xxxxx
X. Xxxxxx Associates, Inc.
Agreed to and Accepted:
The Recovery Network
/s/ XXXXXXX X. XXXXX Date: 4/15/99
----------------------------------- ------------------------
By: Xxxxxxx X. Xxxxx
5
EXHIBIT A
1. American Express
2. Xxxxxx Xxxxxxxx
3. Xxxxx
4. Xxxxxxxx Cassettes
5. Business Wire
6. Cahners Business Information
7. Co-op Temporary Services
8. Colonial Pacifid Leasing
9. CS Associates
10. CT & C
11. CyberMotion
12. Dystar Television, Inc.
13. Excelsior
14. Flower Box
15. Xxxxxxx & Company, Inc.
16. Xxxxxx Xxxx & Associates, Inc.
17. Great North International, Inc.
18. Greenberg, Glusker, Fields, Claman & Machtinger
19. Group W Network services
20. Hall Xxxxxxx Xxxx Xxxxxxxxx & Xxxx LLP
21. Holme Xxxxxxx & Xxxx, LLP
22. Horizon Consulting Group
23. Horizon Film and Video
24. Kaleidoscope Entertainment, Inc.
25. KCSA
26. Kinkos
27. Xxxxxx Xxxxx Xxxxxxx & Menin, LLP
28. MCI-LD
29. Micro System Warehouse
30. Millennium Broadway
31. NASDAQ Stock Market
32. Omni Offices
33. OTOL
34. Parker, Chapin, Flattau, & Klimpl, LLP
35. Planet Pictures
36. Printing Palace
37. X.X. Xxxxxx
38. Xxxxxxxxxx Associates, Inc.
39. Xxxx, Xxxxxxxx
40. Santa Xxxxxx Video, Inc.
41. Scientific Atlanta
42. Sovereign Ventures
43. Sprint
44. Xxxxxxxxx Communications, Inc.
45. University of Florida
46. Varied Directions, Inc.
47. VCI Communications, Inc.
48. Xxxxxx Group
49. Zia Film Distribution, LLC
50. Autost Anstalt Xxxxxx
51. Balmore Funds
52. Zakeni Ltd
53. Sargon Fund
54. Xxxxxxx Xxxxx Marital Trust II
55. Xxxxx Xxxx
56. Highborough
57. Xxxxxxx Xxxxxxxx
58. Xxxxxxxx Waldschudt
59. Xxxxxx Gold
60. Xxx Xxxxxx
