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EXHIBIT 10.16
January 21, 0000
Xxxx Xxxxxxx Xxxxx & Xxxxxxxxxx
0000 X Xxxxxx XX
Xxxxxxxxxx, XX 00000-0000
Attention: Xxxxx Xxxxx, Esq.
RE: LETTER AGREEMENT REGARDING FEES AND OUTSTANDING ACCOUNTS PAYABLE
Dear Xxx:
This letter agreement (the "Agreement") sets forth our mutual agreement and
understanding with respect to the amounts currently owed by Objective
Communications, Inc., a Delaware corporation, ("Objective") to Xxxx Xxxxxxx
Xxxxx & Xxxxxxxxxx (collectively Xxxx Xxxxxxx) and with respect to those
additional legal fees and expenses that Xxxx Xxxxxxx will incur in conjunction
with the bridge financing and equity financing currently being negotiated by
Objective.
Objective acknowledges and agrees that, as of the date hereof, Objective owes
Xxxx Xxxxxxx approximately $375,000 dollars (the "Obligations") as of December
31,1998.
In consideration of the mutual covenants and obligations set forth in this
Agreement and in the other documents and agreements evidencing the Obligations,
Objective and Xxxx Xxxxxxx agree as follows:
1. The Obligations will be evidenced by an initial two-year note (the
"Note") made by Objective in favor of Xxxx Xxxxxxx. The principal
amount of the Note will mature and be payable in full on the date
that is two years from the date of the Note which will be the date
on which this Agreement is signed. The principal amount of the
Note outstanding from time to time will bear interest at the rate
of 7% per annum. During the first year that the Note is
outstanding, Objective will make interest-only payments, in
arrears, semi-annually beginning on six months from the date of
the Note. Thereafter, Objective will amortize the remaining
principal amount of the Note and any accrued but unpaid interest
thereon on a monthly basis over the remaining term of the Note.
2. Objective will pay Xxxx Xxxxxxx for legal fees and expenses
incurred in conjunction with negotiations currently underway for a
bridge financing in the range of $1 million to $3 million at the
final closing of the bridge financing. Objective will pay Xxxx
Xxxxxxx for legal fees and expenses incurred in conjunction
negotiations currently underway for an equity financing in the
range of $12 million to $15 million at the closing of the equity
financing. Payments at the respective closings for legal fees and
expenses incurred in conjunction with
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the bridge financing and in conjunction with the equity financing
will be based on good faith estimates to be provided by Xxxx
Xxxxxxx. These good faith estimates will be reconciled immediately
upon receipt of final invoices and the balance paid by Objective
to Xxxx Xxxxxxx or credited by Xxxx Pittrnan to the Note as
appropriate.
3. In the event that Objective completes a bridge financing with
aggregate gross proceeds of $3,000,000, the Company will make a
prepayment on the Note to Xxxx Xxxxxxx of $25,000 within thirty
days of the final closing of the bridge financing.
4. In the event that Objective completes an equity financing in the
range of $12 million to $ 15 million, then Objective will make a
prepayment on the Note to Xxxx Xxxxxxx of $50,000 within three
days of the closing of the equity financing.
5. Objective will issue to Xxxx Xxxxxxx warrants to purchase 40,000
shares of its common stock, with an exercise price equal to the
closing price of the common stock on the date on which this letter
is executed by Xxxx Xxxxxxx.
If you are in agreement with the foregoing, please sign and return one original
copy of this letter to the undersigned at Objective Communications, Inc., 00
Xxxxxxxxxxxxx Xxxxx, Xxxxxxxxxx, Xxx Xxxxxxxxx 00000 by overnight mail and by
telecopy (Telecopy number: (000) 000-0000). If you have any questions, you can
reach me at (000) 000-0000.
Sincerely,
/s/ XXXXXX X. XXXXX
Xxxxxx X. Xxxxx,
Vice President, Finance and Xxxxxxxxxxxxxx
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The undersigned authorized representative of Xxxx Xxxxxxx Xxxxx & Xxxxxxxxxx
hereby acknowledges and agrees to the terms and conditions of this Agreement and
agrees to be legally bound by its terms.
Dated: January 22, l999 Xxxx Xxxxxxx Xxxxx & Xxxxxxxxxx
By: /s/ XXXXX XXXXX
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Name:
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Title:
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