Exhibit 10.4
GuarantyAgreement
-----------------
This Agreement dated January 30, 2007, is entered into by and between
Challenger Powerboats, Inc. ("Challenger"), Dutchess Private Equities Fund Ltd.
("Dutchess"), and the following individuals, Xxxxxx Xxxx, Xxxxx Xxxxx, Xxx
Xxxxxx, Xxxxxxx Xxxxxxxxxx, and Xxxxxxx Xxxxxxxxx (collectively the "IMAR Note
Holders") concerning the two Promissory Notes that Challenger has made to the
IMAR Note Holders in the amount of $1,680,778 and $1,151,500 (the "Notes"), and
a $275,000 Letter of Credit with State Bank of Fargo. The Notes are attached
hereto as Exhibits A and B. Challenger, Dutchess and the IMAR Note Holders are
sometimes hereinafter collectively referred to as the "Parties."
Whereas, Dutchess provides funding for Challenger Powerboats, Inc.
("Challenger"); and
Whereas, Challenger has made an offer to purchase IMAR, including the IMAR
Note Holders' interests in IMAR; and
Whereas, the IMAR Note Holders intend to sell their interests in IMAR to
Challenger; and
Whereas, as part of the sale, Challenger shall execute two (2) promissory
notes to the Note Holder. Note 1, in the sum of $1,680,778 and Note 2, in the
sum of $1,151,500.
Whereas, after Challenger's purchase of IMAR, the IMAR Note Holders have
requested that Dutchess guarantee repayment of all of Note 1; $619,000 of Note
2; and a $275,000 Letter of Credit with State Bank of Fargo.
Now, therefore, for good and valuable consideration, the receipt and
sufficiency of which is hereby acknowledged, Dutchess, Challenger, and the IMAR
Note Holders agree as follows:
1. This Agreement will become effective only after Challenger's
purchase of IMAR closes.
2. After Challenger's purchase of IMAR closes, Challenger shall make
all payments due on the Notes in a timely manner.
3. In the event that Challenger fails to timely make any payments due
under the Loan, Dutchess will guarantee payment in accordance with the terms of
the Notes. Dutchess obligation on Note 2 shall be limited to $619,000. In
addition, if the $275,000 Letter of Credit is drawn on and Challenger fails to
pay said sums to State Bank of Fargo, Dutchess shall make said payments upon
demand.
4. Nothing herein shall be read to create any obligation on the part of
Dutchess concerning Challenger's purchase of IMAR or the IMAR Note Holders'
interests in IMAR.
5. This Guaranty shall continue in full force and effect despite any
changes, extensions or modifications to the underlying Notes and the undersigned
waive all rights to exoneration as a result of any such changes or
modifications.
6. This Agreement (including the documents referred to herein)
constitutes the entire agreement among the Parties concerning the subject of
this Guarantee and supersedes any prior understandings, agreements, or
representations by or among the Parties, written or oral, on the subject matter
hereof.
7. This Agreement shall be governed by and construed in accordance with
the domestic laws of the State of North Dakota without giving effect to any
choice or conflict of law provision or rule (whether of the State of North
Dakota or any other jurisdiction) that would cause the application of the laws
of any jurisdiction other than the State of North Dakota.
9. Each of the parties signing below represents and warrants that they have
the full authority to enter into this Agreement.
10. This Agreement may be executed in multiple counterparts each of which
shall have the same force and effect as the original.
/s/ Xxxxxx Xxxx
----------------
Xxxxxx Xxxx
IMAR Note Holder
/s/ Xxxxx Xxxxx
----------------
Xxxxx Xxxxx
IMAR Note Holder
/s/ Xxx Xxxxxx
---------------
Xxx Xxxxxx
IMAR Note Holder
/s/ Xxxxxxx Xxxxxxxxxx
-----------------------
Xxxxxxx Xxxxxxxxxx
IMAR Note Holder
/s/ Xxxxxxx Xxxxxxxxx
----------------------
Xxxxxxx Xxxxxxxxx
IMAR Note Holder
Challenger Powerboats, Inc.
By: /s/ Xxxxxx Xxxxxxxx
--------------------
Xxxxxx Xxxxxxxx
President and CEO
Dutchess Private Equities Fund Ltd.
By: /s/ Xxxxxxx X. Xxxxxxxx
-------------------------
Xxxxxxx X. Xxxxxxxx
Investment Manager to Dutchess Private Equities Fund Ltd.