Sonic Jet Performance, Inc.
00000 Xxxxxxxx Xxxx
Xxxxxxxxxx Xxxxx, XX. 92649
(000) 000-0000
Xxxxx X. Xxxx
Encore Capital Management, LLC
00000 Xxxxxxx Xxxxxx Xx., Xxxxx 000
Xxxxxx, XX. 00000
Dear. Xx. Xxxx
This letter memorializes the agreement between Sonic Jet Performance,
Inc. ("SJP" or the "Company") on the one hand, and Encore Capital Management,
LLC ("Encore Capital"), JNC Opportunity Fund, Ltd. (the "Opportunity Fund") and
JNC Strategic Fund, Ltd. (the "Strategic Fund", and together with "Encore
Capital" and the "Opportunity Fund", "Encore") on the other hand, with respect
to a Letter Agreement entered into between SJP and Encore on June 19, 2001 (the
"Letter Agreement") that settled matters related to certain loan and other
transactions entered into between SJP and Encore in November 1999 (the "Loan
Transaction").
Encore collectively currently holds 4,203,207 shares of the Company's
common stock (the "Current Holding"), or approximately 22% of the issued and
outstanding shares. SJP has agreed that if at the time SJP has received an
aggregate of $500,000 in capital infusions, the Current Holding (as adjusted for
any stock splits, combinations, etc) constitutes less than 18% of the Company's
then issued and outstanding shares of common stock, SLP shall issue Encore,
collectively, a number of shares of common stock which when added to the Current
Holding (as adjusted for any stock splits, combinations, etc) equals 18% of the
Company's common stock outstanding as of the closing of the last capital
infusion. In the event any such issuance occurs, the Company shall issue shares
to the Opportunity Fund and the Strategic Fund pro rata, based on the percentage
of the Opportunity Fund's and the Strategic Fund's collective common stock
holdings that each of those entities currently hold. The term ` capital
infusions' includes the receipt by the Company of any money in exchange for
common stock, preferred stock, warrants and any securities convertible into the
foregoing.
In addition, Xxxxxx agrees to immediately release any UCC-1 or other
liens or filings it has with respect to the Company's assets, immediately upon
the receipt by the Company of the $500,000 in equity infusions.
In exchange for the foregoing, Encore has agreed to release SJP from
all claims related to the Letter Agreement, the Loan Transaction and any other
dealings between SJP and Encore, which release is set forth below.
Encore (as defined above), for itself and its successors and assigns,
hereby releases, acquits and forever discharges SJP and its officers, directors,
managers, employees, representatives, subsidiaries, affiliates, related
entities, successors, and assigns, of and from any and all claims, actions,
charges, complaints, causes of action, rights, demands, debts, damages,
accountings, or other liabilities, of whatever nature, known or unknown, which
Encore may have against such persons or entities based on any actions or events
which occurred prior to the date of this letter, including, but not limited to,
those related to, or arising from, the Letter Agreement, the Loan Transaction or
any other agreements or transactions entered into between the parties.
Encore understands and agrees that all rights under Section 1542 of the
Civil Code of the State of California are expressly waived by ENCORE and that
ENCORE does so understanding and acknowledging the significance and consequences
of such specific waiver. Such Section reads as follows:
"A General Release does not extend to claims which a creditor
does not know or suspect to exist in his favor at the time of
executing the Release, which if known by him must have
materially affected his settlement with the debtor."
Encore agrees to keep the terms and existence of this letter agreement
confidential. The Company, however, will have the right to disclose the
existence and terms of this agreement as required by applicable securities or
other laws.
Please acknowledge your agreement to these terms by countersigning the
letter below and returning it to me via facsimile at (000) 000-0000.
Sincerely,
Xxxxxx Xxxxxxxxx, Interim CEO
AGREED TO AND ACCEPTED BY:
Encore Capital Management, LLC
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JNC Opportunity Fund Ltd.
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JNC Strategic Fund Ltd.
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