Document:

communicate_8k-1007.htm

    Exhibit 10.7

     

    
      

      

      INVESTOR
LETTER

      

      

      Communicate.com,
Inc.

      375 Water
Street, Suite 645

      Vancouver,
BC

      Canada,
V6B 5C6

      

      Ladies
& Gentlemen:

      

      The
information contained herein is being furnished to you in order to provide
assurances to you as to the availability of the exemption from registration
pursuant to Regulation S promulgated under the Securities Act of 1933, as
amended (the “Securities Act”), in connection with the offer and issuance to me
of shares of Communicate.com, Inc. (“Communicate”) Common Stock pursuant to the
Agreement and Plan of Merger, dated March 25, 2008, among Communicate,
Communicate.com Delaware, Inc., Entity, Inc., the Founders and Harjeet Taggar,
as Stockholder Representative (the “Agreement”). Capitalized terms not otherwise
defined herein have the meanings given them in the Agreement.  The
undersigned understands that (i) you will rely upon the following
information for purposes of making your determination of the availability of the
exemption from registration and (ii) the issuance of Communicate Common
Stock to the undersigned in the Merger will not be registered under the
Securities Act in reliance upon the exemption from registration provided by the
Securities Act and Regulation S.  The undersigned further
understands that your willingness to proceed with the Merger is specifically
conditioned in part upon the receipt of this letter and the accuracy of the
representations set forth below.

       

      The
undersigned represents and warrants as follows:

       

      1.           The
undersigned is a “Non-U.S. person,” which terms means any person who is not a
U.S. Person or is deemed not to be a U.S. Person” under Regulation S of the
Securities Act, and is not acquiring the Common Stock for the account or benefit
of a U.S. Person.

       

      2.           The
undersigned has been advised and acknowledges that:

       

      (a)           the
shares of Communicate Common Stock are “restricted securities” within the
meaning of the Securities Act and have not been, and when issued, will not be
registered under the Securities Act, the securities laws of any state of the
United States or the securities laws of any other country;

       

      (b)           that
all certificates representing the shares of Communicate will be endorsed with
the following legend in accordance with Regulation S of the Securities
Act:

      

       

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

      “THE
SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED UNDER THE
SECURITIES ACT OF 1933 (THE "ACT"), AND HAVE BEEN ISSUED IN RELIANCE UPON AN
EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF THE ACT PROVIDED BY REGULATION S
PROMULGATED UNDER THE ACT.   SUCH SECURITIES MAY NOT BE REOFFERED
FOR SALE OR RESOLD OR OTHERWISE TRANSFERRED EXCEPT IN ACCORDANCE WITH THE
PROVISIONS OF REGULATION S, PURSUANT TO AN EFFECTIVE REGISTRATION UNDER THE ACT,
OR PURSUANT TO AN AVAILABLE EXEMPTION FROM REGISTRATION UNDER THE
ACT.  HEDGING TRANSACTIONS INVOLVING THE SECURITIES MAY NOT BE
CONDUCTED UNLESS IN COMPLIANCE WITH THE ACT”.

       

      (c)           in
issuing and selling the shares of Communicate Common Stock to such Non-U.S.
person, Communicate is relying upon the “safe harbor” provided by Regulation S
promulgated under the Securities Act;

       

      (d)           it
is a condition to the availability of the Regulation S “safe harbor” that the
shares of Communicate Common Stock not be offered or sold in the United States
or to a U.S. person until the expiration of a one-year “distribution compliance
period” (or a six-month “distribution compliance period,” if the issuer is a
“reporting issuer,” as defined in Regulation S) following the Closing;
and

       

      (e)           notwithstanding
the foregoing, prior to the expiration of the one-year “distribution compliance
period” (or six-month “distribution compliance period,” if the issuer is a
“reporting issuer,” as defined in Regulation S) after the Closing (the
“Restricted Period”), the shares of Communicate Common Stock may be offered and
sold by the undersigned only if either: (i) the offer or sale is within the
United States or to or for the account of a U.S. person (as such terms are
defined in Regulation S), the securities are offered and sold pursuant to an
effective registration statement or pursuant to Rule 144 under the Securities
Act or pursuant to an exemption from the registration requirements of the
Securities Act; or (ii) the offer and sale is outside the United States and
to other than a U.S. person.

       

      3.           The
undersigned agrees that with respect to the shares of Communicate Common Stock,
until the expiration of the Restricted Period:

       

      (a)           the
undersigned, its agents or its representatives will not solicit offers to buy,
offer for sale or sell any of the shares of Communicate Common Stock, or any
beneficial interest therein in the United States or to or for the account of a
U.S. person; and

       

      (b)           notwithstanding
the foregoing, the shares of Communicate Common Stock may be offered and sold by
the holder thereof only if either: (i)  the offer or sale is within the
United States or to or for the account of a U.S. person, the securities are
offered and sold pursuant to an effective registration statement or pursuant to
Rule 144 under the Securities Act or pursuant to an exemption from the
registration requirements of the Securities Act; or (ii) the offer and sale
is outside the United States and to other than a U.S. person; and

       

      (c)           the
undersigned will not engage in hedging transactions with regard to the shares of
Communicate Common Stock unless in compliance with the Securities
Act.

       

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

       

      4.           The
undersigned will not engage or cause any third party to engage in any directed
selling efforts (as such term is defined in Regulation S) in the United States
with respect to the shares of Communicate Common Stock.

       

      5.           The
undersigned: (a) is domiciled and has its principal place of business
outside the United States; and (b) certifies it is not a U.S. person and is
not acquiring the shares of Communicate Common Stock for the account or benefit
of any U.S. person.

       

      6.           The
undersigned is not a “distributor” (as defined in Regulation S) or a “dealer”
(as defined in the Securities Act).

       

      7.           Evaluation
of Merits and Risks.  The undersigned has such knowledge and
experience in financial and business matters that the undersigned is capable of
evaluating the merits and risks of the undersigned’s investment in the shares of
Communicate Common Stock being required in the Merger.  The
undersigned understands and is able to bear any economic risks associated with
such investment for an indefinite period of time.  The undersigned
acknowledges that Communicate has made available to the undersigned the
opportunity to ask questions of the officers and management employees of
Communicate about the business and financial condition of Communicate as the
undersigned has requested and has had full opportunity to review Communicate’s
filings with the SEC pursuant to the Securities Exchange Act of 1934, including
the Company’s annual reports on Form 10-KSB and quarterly reports on Form
10-QSB, and additional information regarding the business and financial
condition of the Company.  The undersigned believes it has received
all the information it considers necessary or appropriate for deciding whether
to make the investment in the Common Stock.

       

      

       

      

       

      

       

       [Signature pages
follows]

       

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

    

     

     

    
      

       

      

       

      
        	
                 
      

              	 	
                Very
      truly yours,

              
	 	 	 
	 	 	
                Partnership,
      Corporation, Trust or Other Entity:

              
	 	 	 
	 	 	
                ______________________________

                Name of Entity

              
	 	 	 
	 Date:
      _________________________	 	By:
      ___________________________
	 	 	 
	 	 	Name:
      _________________________
	 	 	 
	 	 	Title:
      _________________________
	 	 	 
	 	 	 
	 	 	Individual
      Investor:
	 	 	 
	Date:
      _________________________	 	_____________________________
	 	 	Signature 
	 	 	 
	 	 	Name:
      ________________________NOVATION AGREEMENT

     THIS  NOVATION  AGREEMENT  (the "Agreement") is made and entered into as of
the 22nd day of May, 2008 by and between James P. Wilson ("Wilson") and Keith D.
Spickelmier  ("Spickelmier"),  on  the  one  hand,  and  JK Acquisition Corp., a
Delaware corporation (the "Company"), on the other hand.  Wilson and Spickelmier
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 Wilson and
$38,250  from  Spickelmier  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 Wilson
and  $38,250  from Spickelmier upon the foregoing provisions and conditions; and

     WHEREAS,  pursuant  to the Advance Agreements, the amounts that the Company
owes  currently  equals  $453,750  to  Wilson  and  $371,250  to  Spickelmier;

     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  Wilson  and  $409,500  to  Spickelmier;  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  Harris  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:_________________________________
____________________________________
     James  P.  Wilson,                         James  P.  Wilson,  Individually

                                   ____________________________________
                                        Keith  D.  Spickelmier

<PAGE>
                                   EXHIBIT A

                               LIST OF AGREEMENTS

1.     Letter Agreement dated April _____, 2006 among the Company, Ferris, Baker
Watts,  Incorporated,  and  James  P.  Wilson.

2.     Letter Agreement dated April _____, 2006 among the Company, Ferris, Baker
Watts,  Incorporated  and  Keith  D.  Spickelmier.

3.     Letter  Agreement  between 4350 Management, LLC and the Company regarding
administrative  support.

4.     Unit  Placement  Agreement  among  each  of the Company, James P. Wilson,
Keith  D.  Spickelmier,  and  Ferris, Baker Watts, Incorporated, except that the
waiver  of  liquidating  distributions made by Messrs. Wilson and Spickelmier in
Section  3  of  this  documents  is  not  hereby  being terminated and released.

5.     Advance  Agreement between the Company and James P. Wilson, dated May 23,
2007.

6.     Advance Agreement between the Company and Keith D. Spickelmier, dated May
23,  2007.

7.     Advance Agreement between the Company and James P. Wilson, dated June 14,
2007.

8.     Advance  Agreement  between  the  Company and Keith D. Spickelmier, dated
June  14,  2007.

9.     Advance Agreement between the Company and James P. Wilson, dated July 19,
2007.

10.     Advance  Agreement  between  the Company and Keith D. Spickelmier, dated
July  19,  2007.

11.     Advance  Agreement  between  the  Company  and  James  P.  Wilson, dated
September  6,  2007.

12.     Advance  Agreement  between  the Company and Keith D. Spickelmier, dated
September  6,  2007.

13.     Advance Agreement between the Company and James P. Wilson, dated October
3,  2007.

14.     Advance  Agreement  between  the Company and Keith D. Spickelmier, dated
October  3,  2007.

15.     Advance  Agreement  between  the  Company  and  James  P.  Wilson, dated
November  29,  2007.

16.     Advance  Agreement  between  the Company and Keith D. Spickelmier, dated
November  29,  2007.

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