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WARRANT CANCELLATION
AGREEMENT
THIS WARRANT CANCELLATION AGREEMENT (this
“ Agreement ”) is made and entered into
as of September 30, 2007, by and between Challenger Powerboats,
Inc., a Nevada corporation (the “ Company
”), and Dutchess Private Equities Fund Ltd., successor in
interest to Dutchess Private Equities Fund, LP and Dutchess Private
Equities Fund II, LP (“ Dutchess ”).
The Company and Dutchess are hereinafter sometimes
collectively referred to as the “ Parties
” and each a “ Party ” to this
Agreement.
RECITALS
WHEREAS, in connection with Dutchess, from time to
time, making certain investments in the Company and/or providing
financing to the Company, the Company has, at various times, issued
to Dutchess warrants to purchase shares of the Company’s
common stock, par value $0.001 per share, at various exercise
prices and with various expiration dates (the “ Common
Stock Warrants ”); and
WHEREAS, Dutchess desires to have the Company
cancel all Common Stock Warrants that are outstanding as of the
date hereof, and the Company desires to cancel all Common Stock
Warrants that are outstanding as of the date hereof, on the terms
and subject to the conditions set forth herein.
NOW, THEREFORE, for and in consideration of the
foregoing premises, the mutual covenants and agreements contained
herein, and for other good and valuable consideration, the receipt
and sufficiency of which is hereby acknowledged, the parties
hereto, intending to be legally bound, hereby agree as follows:
1.
Cancellation of Warrants . All Common Stock
Warrants issued by the Company to Dutchess, for any reason or no
reason at all, which are outstanding on the date hereof, are hereby
cancelled.
2.
No
Other Effect on Existing Agreements Between the Parties or Other
Documents . Except as specifically set forth in
Section 1 hereof, neither this Agreement, nor any of the
terms or conditions set forth herein, shall affect in any way (i)
any agreement between the Parties that is effective on the date
hereof, or (ii) any document provided by one Party to the other
Party before the date hereof for any reason. The sole purpose
of this Agreement is to memorialize the Parties’ desire and
agreement to cancel all Common Stock Warrants previously issued by
the Company to Dutchess which are outstanding on the date hereof.
3.
Further Acts or Actions . As and when requested
by Dutchess, the Company shall take such further acts or action as
may be necessary to carry out the purpose and intent of the Parties
under this Agreement, and acknowledge and/or evidence same to
Dutchess and/or to third-parties. As and when requested by
the Company, Dutchess shall take such further acts or action as may
be necessary to carry out the purpose and intent of the Parties
under this Agreement, and acknowledge and/or evidence same to the
Company and/or to third-parties. Neither Party shall do
anything that is inconsistent with the terms of this Agreement
without the prior written consent of the other Party, which consent
may be given or withheld in such Party’s sole and absolute
discretion.
.
4.
Notice . Any and all notices or other
communications or deliveries hereunder shall be in writing and
shall be deemed given and effective on the earliest of (a) the date
of transmission, if such notice or communication is delivered via
facsimile at the facsimile telephone number specified in this
Section prior to 5:00 p.m. Eastern time on a business day, (b) the
business day after the date of transmission, if such notice or
communication is delivered via facsimile at the facsimile telephone
number specified in this paragraph later than 5:00 p.m. Eastern
time on any date and earlier than 11:59 p.m. Ea
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