Exhibit 10.6
SECURITY AGREEMENT
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THIS SECURITY
AGREEMENT,
is made as of the 29th
day of January, 2007, by IMAR
Group, LLC and
Challenger Powerboats, Inc., a Nevada corporation
(collectively,
the "Borrower"),
on one hand, and Mark
Overbye and Gekko Sports Corporation, a
Florida corporation
(collectively,
the "Secured Party"), on the other hand.
In order to secure the payment of the
indebtedness evidenced by the Asset and
Technology Acquisition
Agreement ("Agreement") dated January 29, 2007 (the
"Agreement") issued
by the Borrower to the Secured Party in the original
principal amount
of $670,000 and each and every other debt, liability
and
obligation of
every type and description which the
Borrower may now or at any
time hereafter
owe to Secured Party pursuant to such
Agreement (whether such
debt, liability
or obligation now exists or is
hereafter created or incurred,
and whether
it is or may be direct
or indirect, due or to become due, absolute
or contingent, primary or secondary, liquidated or unliquidated, or
sole, joint,
several or
joint and several) (all such debts,
liabilities and obligations of
the Borrower
to Secured Party herein collectively
referred to as the "Secured
Obligations"),
Borrower hereby
agrees as follows:
1.
SECURITY INTEREST
AND COLLATERAL. In order to secure the payment
and
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performance of the
Secured Obligations, Borrower hereby grants to Secured Party
a security interest (herein called the "Security Interest"),
subject to security
interests held
by other lenders to Challenger and
its subsidiaries, in and to
the following
property (hereinafter collectively referred to as the
"Collateral")--
(i)
the assets, trademarks and domain names
described on Exhibit A; (ii)
any adaptation,
modification, improvement, or enhancement of the foregoing; and
(iii) all of the pending and issued patents and patent applications
described on
Exhibit A as well as any continuations, continuations-in-part,
divisional
applications, and
any Letters Patent issued there from including reissues,
together with
all non-U.S. counterparts;
together with
all substitutions and
replacements for and products and proceeds
of any of the foregoing property.
The Secured
Party understands and
acknowledges that lenders to Challenger (and
its subsidiaries)
maintain security interests in certain assets of the Borrower
which may include the Collateral and that
the lenders' security interests take
priority over
the Security Interest
maintained by the Secured Party. Borrower
has not made any representations to the Secured Party about what if
any interest
would remain
in the event that any
lender exercised its rights with respect to
the Collateral.
Nothing in this section shall be read to
limit the rights of
Challenger to
refinance,
renegotiate or seek
loans from additional lenders by
using the Collateral described in this agreement to secure its
obligations.
2.
REPRESENTATIONS,
WARRANTIES AND
AGREEMENTS. Borrower
hereby represents
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and warrants
to, and covenants and agrees with, Secured Party as
follows:
(a)
The Collateral
will be used primarily for business purposes.
Borrower's office
is located at 300 Westlink Drive, Washington,
MO
63090, and
it keeps and will keep all of its
books and records with
respect to
all of its accounts at such address.
(b)
Borrower shall promptly notify Secured Party of any change in
name or if it operates or conducts business
under any trade name or
"d/b/a"
which is different from such name.
(c)
Borrower has (or will have at the time Borrower acquires rights
in Collateral
hereafter acquired or arising) and will maintain
absolute title
to each item of Collateral free and clear of all
security interests,
liens and encumbrances, and will defend the
Collateral against
all claims or demands of all persons other
than
Secured Party.
Borrower will not sell or otherwise dispose of
the
Collateral or
any interest therein except that until an Event of
Default (as
defined in the
Agreement) has occurred, the Borrower may
sell inventory
in the ordinary course of its business.
(d)
Borrower will not permit any Collateral to be located in any
state (and,
if county filing is required, in any
county) in which a
financing statement
covering such Collateral is required to be,
but
has
not in fact been,
filed. Borrower will not change the state under
which it is organized or merge with or into any other entity.
(e)
All rights
to payment and all instruments, documents, chattel
paper and other agreements constituting or
evidencing Collateral are
(or will be when arising or issued) the valid,
genuine and legally
enforceable obligation, subject to no defense, set-off or
counterclaim
(other than those
arising in the ordinary course of business) of each
account debtor or other obligor named therein or in Borrower's
records
pertaining thereto as being obligated to pay such obligation.
Borrower
will not agree to any modification,
amendment or cancellation of any
such obligation
without Secured Party's prior written consent,
and
will not subordinate any such right to payment to claims of
other
creditors of
such account debtor or other obligor, except as is
otherwise set
forth herein.
(f)
Borrower will (i) keep all Collateral in good repair, working
order and condition, normal wear and tear excepted, and will,
from
time to time, replace any worn, broken or defective
parts thereof;
provided, however,
that nothing in this Section 2 (f)
shall prevent
the Borrower
from discontinuing the
operation and maintenance of any
of its properties if such discontinuance is, in the Borrower's
reasonable business
judgment, desirable in the conduct of the
Borrower's business and not disadvantageous in any material respect
to
the Secured
Party; (ii) other than taxes and other governmental
charges contested
in good faith and by appropriate proceedings,
promptly pay
all taxes and other governmental charges levied or
assessed upon
or against any Collateral or upon or against the
creation, perfection
or continuance of the Security
Interest; (iii)
keep all Collateral free and clear of all
security interests, except
as is otherwise set
forth herein, liens and encumbrances; (iv) at all
reasonable times,
permit Secured Party or its representatives to
examine or
inspect any
Collateral, wherever located, and to examine,
inspect and
copy Borrower's books and records pertaining to the
Collateral and
its business and financial condition and to
discuss
with account debtors
and other obligors requests for verifications of
amounts owed
to Borrower; (v) keep accurate and complete records
pertaining to the Collateral and pertaining to Borrower's business
and
financial condition
and will submit to Secured Party such
periodic
reports concerning
the Collateral and Borrower's business and
financial condition as
Secured Party may from time to time reasonably
request; (vi)
promptly notify Secured Party of any loss
or material
damage to any Collateral in excess of $10,000 or of any material
adverse change,
known to Borrower, in
the prospect of payment of any
sums due on or under any instrument, chattel paper or account
constituting Collateral; (vii) if Secured Party at any time
reasonably
requests promptly deliver to Secured Party any instrument, document
or
chattel paper
constituting
Collateral, duly
endorsed or assigned by
Borrower to
Secured Party; (viii) at all times keep all
Collateral
insured against risks of fire (including so called extended
coverage),
theft, collision (in
case of collateral consisting of motor vehicles)
and such other risks and in such amounts as Secured Party may
reasonably request,
with any loss payable to Secured Party to
the
extent of its interest
and notify the Secured Party in writing of any
loss or damage to the Collateral or any
part; (ix) from time to time
execute such financing statements as Secured Party may reasonably
deem
required to be filed in order to perfect the Security Interest and,
if
any Collateral
is covered by a certificate of title, execute
such
documents as
may be required to have the Security
Interest properly
noted on a certificate of title; (x) pay when due or reimburse
Secured
Party on demand for all costs of collection of any of the
Secured
Obligations and,
subject to any limitations set forth in the
Agreement, all
other out-of-pocket expenses (including
in each case
all attorneys' fees)
incurred by Secured Party in connection with the
creation, perfection,
satisfaction
or enforcement of the Security
Interest or
the execution or
creation, continuance or enforcement of
this Agreement
or any or all of the Secured Obli
