NOVATION AGREEMENT
THIS NOVATION AGREEMENT (the "Agreement") is made and entered into as of
the 22nd day of May, 2008 by and between Xxxxx X. Xxxxxx ("Xxxxxx") and Xxxxx X.
Xxxxxxxxxxx ("Xxxxxxxxxxx"), on the one hand, and JK Acquisition Corp., a
Delaware corporation (the "Company"), on the other hand. Xxxxxx and Xxxxxxxxxxx
are referred to hereinafter collectively as the "Lenders."
RECITALS
WHEREAS, the Lenders, on the one hand, and the Company, on the other hand,
have entered into the various agreements listed on Exhibit A hereto
(collectively the "Agreements"), most of which pertain to the Lenders' various
loans of funds to the Company; and
WHEREAS, the Company wishes to borrow an additional $46,750 from Xxxxxx and
$38,250 from Xxxxxxxxxxx to satisfy certain outstanding obligations; and
WHEREAS, the Lenders are willing to loan the preceding additional amounts
to the Company for the preceding purpose, provided that (a) the first four
Agreements listed on Exhibit A hereto (referred to hereinafter collectively as
the "Non-Advance Agreements") are terminated because they no longer are needed
for their original purposes, and (b) all of the other Agreements listed on
Exhibit A hereto (referred to hereinafter collectively as the "Advance
Agreements") are modified and superseded by the terms, provisions and conditions
set forth hereinafter; and
WHEREAS, the Company is willing to borrow an additional $46,750 from Xxxxxx
and $38,250 from Xxxxxxxxxxx upon the foregoing provisions and conditions; and
WHEREAS, pursuant to the Advance Agreements, the amounts that the Company
owes currently equals $453,750 to Xxxxxx and $371,250 to Xxxxxxxxxxx;
AGREEMENT
NOW, THEREFORE, in consideration of the mutual covenants and promises
contained herein, $10.00, and other good and valuable consideration (the
receipt, adequacy and sufficiency of which each of the Lenders and the Company
hereby acknowledges), each of the Lenders and the Company hereby agrees as
follows:
1. Termination and Release.
-------------------------
(a) For purposes of this Section 1, each of the Lenders and the Company
is sometimes referred to singly as a "Releasor."
(b) Each Releasor hereby agrees that each of the Agreements (including all
Non-Advance Agreements and all Advance Agreements) shall be terminated effective
immediately upon the full execution of this Agreement, and thenceforth none of
the Releasors shall have any further rights, liabilities, obligations, duties or
responsibilities with respect to any of the Agreements. Each Releasor (and such
Releasor's affiliates, shareholders, directors, officers, employees, agents,
attorneys, accountants, heirs, beneficiaries, legal representatives, successors
and assigns) has this day released and by these presents does release, acquit
and forever discharge the other Releasor (and such Releasor's respective
affiliates, shareholders, directors, officers, employees, agents, attorneys,
accountants, heirs, beneficiaries, legal representatives, successors and
assigns) from any and all Claims. For purposes of this Section 1, "Claims"
means all demands, complaints, claims, rights, actions, causes of actions,
suits, proceedings, damages, judgments, costs, expenses, compensation, promises,
agreements, debts, liabilities and obligations of any kind whatsoever, at common
law, by statute, contract, or otherwise, which a releasing party has, had, might
have or might have had against a released party, known or unknown, directly or
indirectly arising out of any obligation provided for in any of the Agreements.
It is expressly understood and agreed that the terms of this Section 1 are
contractual and not merely recitations. By execution of this Agreement, each
Releasor represents and warrants to the other Releasor that no Claim that it
has, had, might have or might have had in the past against any other person
released hereby, has previously been conveyed, assigned, or in any manner
transferred, in whole or in part, to any third party. Each Releasor expressly
represents and warrants to the other Releasor that it has full authority to
enter into this Agreement and to release any and all Claims it now has, had,
might have or might have had in the past against each person released hereby.
Should any court, by judgment or decree, determine that this Agreement does not
fully and finally discharge all Claims which a party released hereby might have
had against with a Releasor prior to the date of this Agreement, then each
Releasor hereby agrees to reform this document to release any such Claims not
hereby released. Each Releasor warrants and represents that the representing
Releasor understands that this is a full, final, and complete settlement with
each party released hereby of all known and unknown Claims that the representing
Releasor has, might have, had or might have had in the past, whether under
statute or common law, or otherwise.
2. Future Obligations. In lieu, substitution and novation of the
Advance Agreements, each of the Lenders and the Company agree that the Lenders'
rights and the Company's obligations with respect to the Advance Agreements and
the additional amount to be advanced pursuant hereto shall henceforth be as
follows:
(a) Each of the Lenders and the Company hereby acknowledges, that
immediately after Lenders advance the additional aggregate amount of $85,000 to
the Company as described in the recitals set forth above, the Company shall owe
$500,500to Xxxxxx and $409,500 to Xxxxxxxxxxx; and
(b) All amounts owing by the Company to the Lenders, including the
amounts set forth in subsection (a) immediately above, shall bear interest
(computed on the basis of a 365-day year) at the rate of five percent (5.0%) per
annum from the date hereof until such amounts are paid in full; and
(c) All amounts owing by the Company to the Lenders, including the
amounts set forth in subsection (a) above and the interest provided for in
subsection (b) immediately above shall be due in payable in full on DEMAND, or
in the event there is no demand, on or before midnight on fifth annual
anniversary of the date of this Agreement; and
(d) The Lenders shall have the right, exercisable by giving written
notice to the Company, to have the Company's obligations with respect all
amounts owing by the Company to the Lenders represented by a promissory note
containing terms, provisions and conditions consistent with this Section 2 and
in form customary for Xxxxxx County, Texas.
3. Novation. This Agreement supersedes the Advance Agreement.
4. Miscellaneous. THIS AGREEMENT AND ALL QUESTIONS RELATING TO ITS
VALIDITY, INTERPRETATION, PERFORMANCE, AND ENFORCEMENT SHALL BE GOVERNED BY AND
CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF TEXAS. This Agreement
shall be binding upon and inure to the benefit of the parties hereto and their
respective successors and assigns, except that no party may assign or transfer
his rights or obligations under this Agreement without the prior written consent
of the other parties hereto. This Agreement contains the entire understanding
among the parties hereto with respect to the subject matter hereof and
supersedes all prior and contemporaneous agreements and understandings,
inducements, or conditions, express or implied, oral or written, except as
herein contained. The express terms hereof control and supersede any course of
performance and/or usage of the trade inconsistent with any of the terms hereof.
This Agreement may not be modified or amended other than by an agreement in
writing. The section headings in this Agreement are for convenience only; they
form no part of this Agreement and shall not affect its interpretation. This
Agreement may be executed in two or more counterparts, each of which shall be
deemed an original, but all of which together constitute one and the same
instrument.
IN WITNESS WHEREOF, the undersigned have set their hands hereunto as of the
first date written above.
JK ACQUISITION CORP.
By:_________________________________
____________________________________
Xxxxx X. Xxxxxx, Xxxxx X. Xxxxxx, Individually
____________________________________
Xxxxx X. Xxxxxxxxxxx
EXHIBIT A
LIST OF AGREEMENTS
1. Letter Agreement dated April _____, 2006 among the Company, Xxxxxx, Xxxxx
Xxxxx, Incorporated, and Xxxxx X. Xxxxxx.
2. Letter Agreement dated April _____, 2006 among the Company, Xxxxxx, Xxxxx
Xxxxx, Incorporated and Xxxxx X. Xxxxxxxxxxx.
3. Letter Agreement between 4350 Management, LLC and the Company regarding
administrative support.
4. Unit Placement Agreement among each of the Company, Xxxxx X. Xxxxxx,
Xxxxx X. Xxxxxxxxxxx, and Xxxxxx, Xxxxx Xxxxx, Incorporated, except that the
waiver of liquidating distributions made by Messrs. Xxxxxx and Xxxxxxxxxxx in
Section 3 of this documents is not hereby being terminated and released.
5. Advance Agreement between the Company and Xxxxx X. Xxxxxx, dated May 23,
2007.
6. Advance Agreement between the Company and Xxxxx X. Xxxxxxxxxxx, dated May
23, 2007.
7. Advance Agreement between the Company and Xxxxx X. Xxxxxx, dated June 14,
2007.
8. Advance Agreement between the Company and Xxxxx X. Xxxxxxxxxxx, dated
June 14, 2007.
9. Advance Agreement between the Company and Xxxxx X. Xxxxxx, dated July 19,
2007.
10. Advance Agreement between the Company and Xxxxx X. Xxxxxxxxxxx, dated
July 19, 2007.
11. Advance Agreement between the Company and Xxxxx X. Xxxxxx, dated
September 6, 2007.
12. Advance Agreement between the Company and Xxxxx X. Xxxxxxxxxxx, dated
September 6, 2007.
13. Advance Agreement between the Company and Xxxxx X. Xxxxxx, dated October
3, 2007.
14. Advance Agreement between the Company and Xxxxx X. Xxxxxxxxxxx, dated
October 3, 2007.
15. Advance Agreement between the Company and Xxxxx X. Xxxxxx, dated
November 29, 2007.
16. Advance Agreement between the Company and Xxxxx X. Xxxxxxxxxxx, dated
November 29, 2007.
