Exhibit 10.5
GUARANTY
This Guaranty
(“Guaranty”) is entered into as of June 30, 2005,
by Boundless Motor Sports Racing, Inc., a Colorado corporation
(“Guarantor”), for the benefit of Richard F. Murphy
(“Murphy”).
WHEREAS, in order
to induce Murphy to enter into that certain Asset Purchase
Agreement, dated as of the date hereof (the “Purchase
Agreement”), by and among Volusia Speedway Park, Inc., a
Florida corporation, Murphy and Volusia Operations, LLC, a Florida
limited liability company and a wholly-owned subsidiary of
Guarantor (“Purchaser”), Murphy has required that
Guarantor guaranty the payment of: any and all amounts owed by
Purchaser to Murphy under that certain Promissory Note, of even
date herewith, in the original principal amount of $2,000,000 (the
“Note”), which Note was issued by Purchaser to Murphy
in connection with the Purchase Agreement; and
WHEREAS, Guarantor
will derive a specific benefit from the Purchase Agreement and
desires to guarantee the payment of: any and all amounts owed by
Purchaser under the Note (collectively, the
“Obligations”);
NOW, THEREFORE,
for valuable consideration, the receipt and adequacy of which are
hereby acknowledged, Guarantor hereby guarantees to Murphy the
payment of all Obligations, on the following terms:
1.
Continuing Guaranty . Upon the occurrence of an event of
default (as provided for in the Note), Guarantor hereby guarantees
and promises to pay on written demand to Murphy, in lawful money of
the United States, all of the Obligations. This Guaranty is given
in consideration for credit and other financial accommodations made
by Murphy to Purchaser.
2.
Waivers . Except as provided in Section 1 above,
Guarantor hereby waives:
(a) presentment
for payment;
(b) notice
of dishonor, demand, protest, and notice thereof as to any
instrument, and all other notices and demands to which Guarantor
might be entitled;
(c) any
right to require Murphy to institute suit against, or to exhaust
its rights and remedies against, Purchaser or any other person, or
to proceed against any property of any kind which secures all or
any part of the Obligations, or to exercise any right of offset or
other right with respect to any reserves, credits or deposit
accounts held by or maintained with Murphy or any indebtedness of
Murphy to Purchaser, or to exercise any other right or power, or
pursue any other remedy Murphy may have;
(d) any
defense arising by reason of any failure of Murphy to obtain,
perfect, maintain or keep in force any security interest in, or
lien or encumbrance upon, any property of Purchaser or any other
person;
(e) any
defense based upon any failure of Murphy to give Guarantor notice
of any sale or other disposition of any property securing any or
all of the Obligations, or any defects
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in any such notice that may be
given, or any failure of Murphy to comply with any provision of
applicable law in enforcing any security interest in or lien upon
any property securing any or all of the Obligations including, but
not limited to, any failure by Murphy to dispose of any property
securing any or all of the Obligations in a commercially reasonable
manner;
(f) any
defense based upon or arising out of any bankruptcy, insolvency,
reorganization, arrangement, readjustment of debt, liquidation or
dissolution proceeding commenced by or against Purchaser or any
other guarantor or any endorser, co-maker or other person,
including without limitation any discharge of, or bar against
collecting, any of the Obligations (including without limitation
any interest thereon), in or as a result of any such proceeding;
and
(g) the
benefit of any and all statutes of limitation with respect to any
action based upon, arising out of or related to this
Guaranty.
If any claim is ever made upon
Murphy for repayment or recovery of any amount or amounts received
by Murphy in payment of or on account of any of the Obligations,
because of any claim that any such payment constituted a
preferential transfer or fraudulent conveyance, or for any other
reason whatsoever, and Murphy repays all or part of said amount by
reason of any judgment, decree or order of any court or
administrative body having jurisdiction over Murphy or any of its
property, or by reason of any settlement or compromise of any such
claim effected by Murphy with any such claimant (including without
limitation Purchaser), then and in any such event, Guarantor agrees
that any such judgment, decree, order, settlement and compromise
shall be binding upon Guarantor, notwithstanding any revocation or
release of this Guaranty or the cancellation of any note or other
instrument evidencing any of the Obligations, or any release of any
of the Obligations, and the Guarantor shall be and remain liable to
Murphy under this Guaranty for the amount so repaid or recovered,
to the same extent as if such amount had never originally been
received by Murphy, and the provisions of this sentence shall
survive, and continue in effect, notwith
