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Continuing And Unconditional Guaranty

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Bank of America, N.A. EXHIBIT 10.11


Date: July 17, 2003


Continuing and Unconditional Guaranty

Bank: Guarantor:

Bank of America, N.A.

Fountain Powerboat Industries, Inc.

NC7-002-02-01

1653 Whichards Beach Road

One Hanover Square, Suite 201

Washington, North Carolina 27889

Raleigh, North Carolina 27601

Wake County, North Carolina

Beaufort County, North Carolina

(Street address including county)

(Name and street address, including county)


" Borrower" : Fountain Powerboats, Inc.


1. Guaranty. FOR VALUE RECEIVED, and to induce Bank of America, N.A. (" Bank" ) to make loans or advances or to extend credit or other financial accommodations or benefits, with or without security, to or for the account of Borrower, the undersigned " Guarantor" , if more than one, then each of them jointly and severally, hereby irrevocably and unconditionally guarantees to Bank the full and prompt payment when due, whether by acceleration or otherwise, of any and all Liabilities (as hereinafter defined) of Borrower to Bank. This Guaranty is continuing and unlimited as to the amount, and is cumulative to and does not supersede any other guaranties.

Guarantor further unconditionally guarantees the faithful, prompt and complete compliance by Borrower with all Obligations (as hereinafter defined). The undertakings of Guarantor hereunder are independent of the Liabilities and Obligations of Borrower and a separate action or actions for payment, damages or performance may be brought or prosecuted against Guarantor, whether or not an action is brought against Borrower or to realize upon the security for the Liabilities and/or Obligations, whether or not Borrower is joined in any such action or actions, and whether or not notice is given or demand is made upon Borrower.

Bank shall not be required to proceed first against Borrower, or any other person, or entity, whether primarily or secondarily liable, or against any collateral held by it, before resorting to Guarantor for payment, and Guarantor shall not be entitled to assert as a defense to the enforceability of the Guaranty any defense of Borrower with respect to any Liabilities or Obligations.


2. Paragraph Headings, Governing Law and Binding Effect. Guarantor agrees that the paragraph headings in this Guaranty are for convenience only and that they will not limit any of the provisions of this Guaranty. Guarantor further agrees that this Guaranty shall be governed by and construed in accordance with the laws of the State of North Carolina and applicable United States federal law. Guarantor further agrees that this Guaranty shall be deemed to have been made in the State of North Carolina at Bank' s address indicated above, and shall be governed by, and construed in accordance with, the laws of the State of North Carolina, or the United States courts located within the State of North Carolina, and is performable in the State of North Carolina. This Guaranty is binding upon Guarantor, his, their or its executors, administrators, successors or assigns, and shall inure to the benefit of Bank, its successors, indorsees or assigns. Anyone executing this Guaranty shall be bound by the terms hereof without regard to execution by anyone else.


3. Definitions.


A. " Guarantor" shall mean Guarantor or any one or more of them.


B. " Liability" or " Liabilities" shall mean without limitation, all liabilities, indebtedness, and obligations of Borrower to Bank under the Note, the Loan Agreement and the other Loan Documents, whether direct or indirect, absolute or contingent, joint or several, secured or unsecured, due or not due, contractual or tortious, liquidated or unliquidated, arising by operation of law or otherwise, now or hereafter existing, or held or to be held by Bank for its own account or as agent for another or others, whether created directly, indirectly, or acquired by assignment or otherwise, including but not limited to all extensions or renewals thereof, and all sums payable under or by virtue thereof, including, without limitation, all amounts of principal and interest, all expenses (including reasonable attorney' s fees and cost of collection) incurred in the collection thereof or the enforcement of rights thereunder (including, without limitation, any liability arising from failure to comply with state or federal laws, rules and regulations concerning the control of hazardous waste or substances at or with respect to any real estate securing any loan guaranteed hereby), whether arising in the ordinary course of business or otherwise. If Borrower is a partnership, corporation or other entity the term " Liability" or " Liabilities" as used herein shall include all Liabilities to Bank of any successor entity or entities.

C. " Loan Agreement" shall mean the Loan Agreement of even date herewith between the Bank and the Borrower.


D. " Loan Documents" shall mean the Loan Agreement, the Note, all deeds to secure debt, deeds of trust, mortgages, security agreements and other documents securing payment of the Liabilities and all notes and other agreements, documents, and instruments evidencing or relating to the Liabilities and Obligations.


E. " Note" shall mean the Promissory Note of the Borrower to the Bank in the original principal amount of $18,000,0000 dated as of even date herewith, which Note evidences the loan described in the Loan Agreement.


1

F. " Obligation" or " Obligations" shall mean all terms, conditions, covenants, agreements and undertakings of Borrower and/or Guarantor under all notes and other documents evidencing the Liabilities, and under all deeds to secure debt, deeds of trust, mortgages, security agreements and other agreements, documents and instruments executed in connection with the Liabilities or related thereto.


4. Waivers by Guarantor. Guarantor waives notice of acceptance of this Guaranty, notice of any Liabilities or Obligations to which it may apply, presentment, demand for payment, protest, notice of dishonor or nonpayment of any Liabilities, notice of intent to accelerate, notice of acceleration, and notice of any suit or the taking of other action by Bank against Borrower, Guarantor or any other person, any applicable statute of limitations and any other notice to any party liable on any Loan Document (including Guarantor).


Each Guarantor also hereby waives, until payment in full of the Liabilities, any claim, right or remedy which such Guarantor may now have or hereafter acquire against Borrower that arises hereunder and/or from the performance by any other Guarantor hereunder including, without limitation, any claim, remedy or right of subrogation, reimbursement, exoneration, contribution, indemnification, or participation in any claim, right or remedy of Bank against Borrower or against any security which Bank now has or hereafter acquires, whether or not such claim, right or remedy arises in equity, under contract, by statute, under common law or otherwise.

Guarantor also waives the benefits of any provision of law requiring that Bank exhaust any right or remedy, or take any action, against Borrower, any Guarantor, any other person and/or property including but not limited to the provisions of N.C. Gen. Stat. a726-7 through a7 26-9, inclusive, as amended, or otherwise.

Bank may at any time and from time to time (whether before or after revocation or termination of this Guaranty) without notice to Guarantor (except as required by law), without incurring responsibility to Guarantor, without impairing, releasing or otherwise affecting the Obligations of Guarantor, in whole or in part, and without the indorsement or execution by Guarantor of any additional consent, waiver or guaranty: (a) change the manner, place or terms of payment, or change or extend the time of or renew, or change any interest rate or alter any Liability or Obligation or installment thereof, or any security therefor; (b) loan additional monies or extend additional credit to Borrower, with or without security, thereby creating new Liabilities or Obligations the payment or performance of which shall be guaranteed hereunder, and the Guaranty herein made shall apply to the Liabilities and Obligations as so cha
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