EXHIBIT 10.36
GUARANTY AGREEMENT (as amended, restated, supplemented or otherwise
modified, this "GUARANTY" or this "AGREEMENT"), dated as of June 27, 2007, is
made by TALON INTERNATIONAL, INC., a Delaware corporation, TAG-IT, INC., a
California corporation, A.G.S. STATIONARY, INC., a California corporation,
TAG-IT PACIFIC LIMITED, a Hong Kong corporation, TAG-IT PACIFIC (HK) LTD., a
British Virgin Islands corporation, TAGIT de MEXICO, S.A. de C.V., TALON ZIPPER
(SHENZHEN) COMPANY, LTD., a Chinese corporation, and TALON INTERNATIONAL PVT.
LTD., an Indian corporation (each a "GUARANTOR" and collectively the
"GUARANTORS"), in favor of BLUEFIN CAPITAL, LLC, a Delaware limited liability
company (the "LENDER").
STATEMENT OF PURPOSE
Pursuant to the terms of the Revolving Credit and Term Loan Agreement
of even date herewith by and between Tag-It Pacific, Inc. (the "BORROWER") and
the Lender (as same may be amended, modified, supplemented and/or restated from
time to time, the "LOAN AGREEMENT"), the Lender has agreed to make Loans to the
Borrower in the principal amount of up to $14,500,000 at any time outstanding,
upon the terms and subject to the conditions set forth therein.
Each of the Guarantors is a direct wholly-owned Subsidiary of the
Borrower.
The Borrower and the Guarantors, though separate legal entities,
comprise one integrated financial enterprise, and the Loans will inure, directly
or indirectly, to the benefit of each of the Guarantors.
It is a condition precedent to the obligation of the Lender to make the
Loans under the Loan Agreement that the Guarantors shall have executed and
delivered this Guaranty to the Lender.
NOW, THEREFORE, for good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged by the parties hereto, and to
induce the Lender to enter into the Loan Agreement and to make the Loans
thereunder, the Guarantors hereby agree with the Lender as follows:
ARTICLE I
DEFINED TERMS
SECTION 1.1 DEFINITIONS. The following terms when used in this Guaranty
shall have the meanings assigned to them below:
"ADDITIONAL GUARANTOR" means each direct or indirect Domestic
Subsidiary of the Borrower which hereafter becomes a Guarantor pursuant to
SECTION 4.17 hereof and SECTION 5.11 of the Loan Agreement.
"APPLICABLE INSOLVENCY LAWS" means all Applicable Laws governing
bankruptcy, reorganization, arrangement, adjustment of debts, relief of debtors,
dissolution, insolvency,
fraudulent transfers or conveyances or other similar laws (including, without
limitation, 11 U.S.C. Sections 544, 547, 548 and 550 and other "avoidance"
provisions of Title 11 of the United States Code, as amended or supplemented).
"GUARANTEED OBLIGATIONS" has the meaning set forth in SECTION 2.1.
"GUARANTY" means this Guaranty Agreement, as amended, modified,
supplemented and/or restated from time to time.
SECTION 1.2 OTHER DEFINITIONAL PROVISIONS. Capitalized terms used and
not otherwise defined in this Guaranty, including the preambles and recitals
hereof, shall have the meanings ascribed to them in the Loan Agreement. In the
event of a conflict between capitalized terms defined herein and in the Loan
Agreement, the Loan Agreement shall control. The words "hereof," "herein",
"hereto" and "hereunder" and words of similar import when used in this Guaranty
shall refer to this Guaranty as a whole and not to any particular provision of
this Guaranty, and Section references are to this Guaranty unless otherwise
specified. The meanings given to terms defined herein shall be equally
applicable to both the singular and plural forms of such terms. Where the
context requires, terms relating to the Collateral or any part thereof, when
used in relation to a Guarantor, shall refer to such Guarantor's Collateral or
the relevant part thereof. The word "including" and words of similar import when
used in this Agreement shall mean "including, without limitation," unless
otherwise specified.
ARTICLE II
GUARANTY
SECTION 2.1 GUARANTY. Each Guarantor hereby, jointly and severally with
the other Guarantors, unconditionally guarantees to the Lender and its
successors, endorsees, transferees and assigns, the prompt payment and
performance of all Obligations of the Borrower, whether primary or secondary
(whether by way of endorsement or otherwise), whether now existing or hereafter
arising, whether or not from time to time reduced or extinguished (except by
payment thereof) or hereafter increased or incurred, whether enforceable or
unenforceable as against the Borrower, whether or not discharged, stayed or
otherwise affected by any Applicable Insolvency Law or proceeding thereunder,
whether matured or unmatured, whether joint or several, as and when the same
become due and payable (whether at maturity or earlier, by reason of
acceleration, mandatory repayment or otherwise), in accordance with the terms of
the agreements and instruments evidencing such Obligations, including all
renewals, extensions or modifications thereof (all such Obligations of the
Borrower being hereafter collectively referred to as the "GUARANTEED
OBLIGATIONS").
SECTION 2.2 BANKRUPTCY LIMITATIONS ON GUARANTORS. Notwithstanding
anything to the contrary contained in SECTION 2.1, it is the intention of each
Guarantor and the Lender that, in any proceeding involving the bankruptcy,
reorganization, arrangement, adjustment of debts, relief of debtors, dissolution
or insolvency or any similar proceeding with respect to any Guarantor or its
assets, the amount of such Guarantor's obligations with respect to the
Guaranteed Obligations shall be equal to, but not in excess of, the maximum
amount thereof not subject to avoidance or recovery by operation of Applicable
Insolvency Laws after giving effect to SECTION 2.3. To that end, but only in the
event and to the extent that after giving effect to
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SECTION 2.3 such Guarantor's obligations with respect to the Guaranteed
Obligations or any payment made pursuant to such Guaranteed Obligations would,
but for the operation of the first sentence of this SECTION 2.2, be subject to
avoidance or recovery in any such proceeding under Applicable Insolvency Laws
after giving effect to SECTION 2.3, the amount of such Guarantor's obligations
with respect to the Guaranteed Obligations shall be limited to the largest
amount which, after giving effect thereto, would not, under Applicable
Insolvency Laws, render such Guarantor's obligations with respect to the
Guaranteed Obligations unenforceable or avoidable or otherwise subject to
recovery under Applicable Insolvency Laws. To the extent any payment actually
made pursuant to the Guaranteed Obligations exceeds the limitation of the first
sentence of this SECTION 2.2 and is otherwise subject to avoidance and recovery
in any such proceeding under Applicable Insolvency Laws, the amount subject to
avoidance shall in all events be limited to the amount by which such actual
payment exceeds such limitation and the Guaranteed Obligations as limited by the
first sentence of this SECTION 2.2 shall in all events remain in full force and
effect and be fully enforceable against such Guarantor. The first sentence of
this Section 2.2 is intended solely to preserve the rights of the Lender
hereunder against such Guarantor in such proceeding to the maximum extent
permitted by Applicable Insolvency Laws and neither such Guarantor, the
Borrower, any other Guarantor nor any other Person shall have any right or claim
under such sentence that would not otherwise be available under Applicable
Insolvency Laws in such proceeding.
SECTION 2.3 AGREEMENTS FOR CONTRIBUTION.
(a) To the extent that any Guarantor is required, by reason of
its obligations hereunder, to pay to the Lender an amount greater than
the amount of value (as determined in accordance with Applicable
Insolvency Laws) actually made available to or for the benefit of such
Guarantor on account of the Loan Agreement, this Guaranty or any other
Loan Document, such Guarantor shall have an enforceable right of
contribution against the remaining Guarantors, and the remaining
Guarantors shall be jointly and severally liable for repayment of the
full amount of such excess payment. Subject only to the subordination
provided in SECTION 2.3(D), such Guarantor further shall be subrogated
to any and all rights of the Lender against the Borrower and the
remaining Guarantors to the extent of such excess payment.
(b) To the extent that any Guarantor would, but for the
operation of this SECTION 2.3 and by reason of its obligations
hereunder or its obligations to other Guarantors under this SECTION
2.3, be rendered insolvent for any purpose under Applicable Insolvency
Laws, each of the Guarantors hereby agrees to indemnify such Guarantor
and commits to make a contribution to such Guarantor's capital in an
amount at least equal to the amount necessary to prevent such Guarantor
from having been rendered insolvent by reason of the incurrence of any
such obligations.
(c) To the extent that any Guarantor would, but for the
operation of this SECTION 2.3, be rendered insolvent under any
Applicable Insolvency Law by reason of its incurring of obligations to
any other Guarantor under the foregoing SECTIONS 2.3(A) and (B), such
Guarantor shall, in turn, have rights of contribution to the full
extent provided in the foregoing SECTIONS 2.3(A) and (B) against the
remaining Guarantors, such that all obligations of all of the
Guarantors hereunder and under this SECTION 2.3 shall be allocated in a
manner such that no
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Guarantor shall be rendered insolvent for any purpose under Applicable
Insolvency Law by reason of its incurrence of such obligations.
(d) Notwithstanding any payment or payments by any of the
Guarantors hereunder, or any set-off or application of funds of any of
the Guarantors by the Lender, or the receipt of any amounts by the
Lender with respect to any of the Guaranteed Obligations, none of the
Guarantors shall be entitled to be subrogated to any of the rights of
the Lender against the Borrower or the other Guarantors or against any
collateral security held by the Lender for the payment of the
Guaranteed Obligations, nor shall any of the Guarantors seek any
reimbursement from the Borrower or any of the other Guarantors in
respect of payments made by such Guarantor in connection with the
Guaranteed Obligations, until all amounts owing to the Lender on
account of the Guaranteed Obligations are paid in full and the
Revolving Credit Commitment has been terminated. If any amount shall be
paid to any Guarantor on account of such subrogation rights at any time
when all of the Guaranteed Obligations shall not have been paid in full
or the Revolving Credit Commitment has not terminated, such amount
shall be held by such Guarantor in trust for the benefit of the Lender,
segregated from other funds of such Guarantor, and shall, forthwith
upon receipt by such Guarantor, be turned over to the Lender in the
exact form received by such Guarantor (duly endorsed by such Guarantor
to the Lender, if required) to be applied against the Guaranteed
Obligations, whether matured or unmatured, in the order set forth in
the Loan Agreement.
SECTION 2.4 NATURE OF GUARANTY.
(a) Each Guarantor agrees that this Guaranty is a continuing,
unconditional guaranty of payment and performance and not of
collection, and that its obligations under this Guaranty shall be
primary, absolute and unconditional, irrespective of, and unaffected
by:
(i) the genuineness, validity, regularity,
enforceability or any future amendment of, or change in, the
Loan Agreement or any other Loan Document or any other
agreement, document or instrument to which the Borrower or any
Subsidiary is or may become a party;
(ii) the absence of any action to enforce this
Guaranty, the Loan Agreement or any other Loan Document or the
waiver or consent by the Lender with respect to any of the
provisions of this Guaranty, the Loan Agreement or any other
Loan Document;
(iii) the existence, value or condition of, or
failure to perfect any Lien against, any security for or other
guaranty of the Guaranteed Obligations or any action, or the
absence of any action, by the Lender in respect of such
security or guaranty (including, without limitation, the
release of any such security or guaranty); or
(iv) any other action or circumstances which might
otherwise constitute a legal or equitable discharge or defense
of a surety or guarantor;
it being agreed by each Guarantor that, subject to the first sentence
of SECTION 2.2, its obligations under this Guaranty shall not be
discharged until the final indefeasible payment and performance, in
full, of the Guaranteed Obligations.
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(b) Each Guarantor represents, warrants and agrees that its
obligations under this Guaranty are not and shall not be subject to any
counterclaims, offsets or defenses of any kind against the Lender or
the Borrower, whether now existing or which may arise in the future.
(c) Each Guarantor hereby agrees and acknowledges that the
Guaranteed Obligations, and any of them, shall conclusively be deemed
to have been created, contracted or incurred, or renewed, extended,
amended or waived, in reliance upon this Guaranty, and all dealings
between the Borrower and any of the Guarantors, on the one hand, and
the Lender, on the other hand, likewise shall be conclusively presumed
to have been had or consummated in reliance upon this Guaranty.
SECTION 2.5 WAIVERS. To the extent permitted by law, each Guarantor
expressly waives all of the following rights and defenses (and agrees not to
take advantage of or assert any such right or defense):
(a) any rights it may now or in the future have under any
statute, or at law or in equity, or otherwise, to compel the Lender to
proceed in respect of the Obligations against the Borrower or any other
Person or against any security for or other guaranty of the payment and
performance of the Guaranteed Obligations before proceeding against, or
as a condition to proceeding against, such Guarantor;
(b) any defense based upon the failure of the Lender to
commence an action in respect of the Guaranteed Obligations against the
Borrower, such Guarantor, any other guarantor or any other Person or
any security for the payment and performance of the Guaranteed
Obligations;
(c) any right to insist upon, plead or in any manner whatever
claim or take the benefit or advantage of, any appraisal, valuation,
stay, extension, marshalling of assets or redemption laws, or
exemption, whether now or at any time hereafter in force, which may
delay, prevent or otherwise affect the performance by such Guarantor of
its obligations under, or the enforcement by the Lender of this
Guaranty;
(d) any right of diligence, presentment, demand, protest and
notice (except as specifically required herein) of whatever kind or
nature with respect to any of the Guaranteed Obligations and waives, to
the extent permitted by Applicable Law, the benefit of all provisions
of law which are or might be in conflict with the terms of this
Guaranty; and
(e) any and all right to notice of the creation, renewal,
extension or accrual of any of the Obligations and notice of or proof
of reliance by the Lender upon, or acceptance of, this Guaranty.
Each Guarantor agrees that any notice or directive given at
any time to the Lender which is inconsistent with any of the foregoing
waivers shall be null and void and may be ignored by the Lender, and,
in addition, may not be pleaded or introduced as evidence in any
litigation relating to this Guaranty for the reason that such pleading
or introduction would be at variance with the written terms of this
Guaranty, unless the Lender has specifically agreed otherwise in
writing. The foregoing waivers are of the essence of the transaction
contemplated by the Loan
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Agreement and the other Loan Documents and, but for this Guaranty and
such waivers, the Lender would decline to enter into the Loan Agreement
and the other Loan Documents.
SECTION 2.6 MODIFICATION OF LOAN DOCUMENTS, ETC. The Lender shall not
incur any liability to any Guarantor as a result of any of the following, and
none of the following shall impair, limit or release this Guaranty or any of the
obligations of any Guarantor under this Guaranty:
(a) any change or extension of the manner, place or terms of
payment of, or renewal or alteration of all or any portion of, the
Guaranteed Obligations;
(b) any action under or in respect of the Loan Agreement or
the other Loan Documents in the exercise of any remedy, power or
privilege contained therein or available to any of them at law, in
equity or otherwise, or waiver or refrain from exercising any such
remedies, powers or privileges;
(c) any amendment or modification, in any manner whatsoever,
of the Loan Documents;
(d) any extension or waiver of the time for performance by any
Guarantor, any other guarantor, the Borrower or any other Person, or
compliance with, any term, covenant or agreement on its part to be
performed or observed under a Loan Document, or waiver of such
performance or compliance or consent to a failure of, or departure
from, such performance or compliance;
(e) the taking and holding security or Collateral for the
payment of the Obligations or the sale, exchange, release, disposal of,
or other dealing with, any property pledged, mortgaged or conveyed, or
in which the Lender has been granted a Lien, to secure any indebtedness
of any Guarantor, any other guarantor or the Borrower to the Lender;
(f) the release of anyone who may be liable in any manner for
the payment of any amounts owed by any Guarantor, any other guarantor
or the Borrower to the Lender; or
(g) any modification or termination of any intercreditor or
subordination agreement pursuant to which claims of other creditors of
any Guarantor, any other guarantor or the Borrower are subordinated to
the claims of the Lender.
SECTION 2.7 DEMAND BY THE LENDER. In addition to the terms set forth in
this Article II and in no manner imposing any limitation on such terms, if all
or any portion of the then outstanding Guaranteed Obligations are declared to be
immediately due and payable, then the Guarantors shall, upon demand in writing
therefor by the Lender to the Guarantors, pay all or such portion of the
outstanding Guaranteed Obligations then due and payable or declared due and
payable.
SECTION 2.8 REMEDIES. Upon the occurrence and during the continuance of
any Event of Default, the Lender may enforce against the Guarantors their
respective obligations and liabilities hereunder and exercise such other rights
and remedies as may be available to the Lender hereunder, under the Loan
Agreement or the other Loan Documents or otherwise.
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SECTION 2.9 BENEFITS OF GUARANTY. The provisions of this Guaranty are
for the benefit of the Lender and its successors, transferees, endorsees and
assigns, and nothing herein contained shall impair, as between the Borrower and
the Lender, the obligations of the Borrower under the Loan Documents. In the
event that all or any part of the Obligations are transferred, endorsed or
assigned by the Lender to any Person or Persons as permitted under the Loan
Agreement, any reference to a "Lender" herein shall be deemed to refer similarly
and ratably to such Person or Persons.
SECTION 2.10 TERMINATION; REINSTATEMENT.
(a) Subject to SECTION 2.10(C) below, this Guaranty shall
remain in full force and effect until all the Guaranteed Obligations
shall have been indefeasibly paid in full.
(b) No payment made by the Borrower, any Guarantor, or any
other Person received or collected by the Lender from the Borrower, any
Guarantor, or any other Person by virtue of any action or proceeding or
any set-off or appropriation or application at any time or from time to
time in reduction of or in payment of the Guaranteed Obligations shall
be deemed to modify, reduce, release or otherwise affect the liability
of any Guarantor hereunder which shall, notwithstanding any such
payment (other than any payment made by such Guarantor in respect of
the obligations of the Guarantors or any payment received or collected
from such Guarantor in respect of the obligations of the Guarantors),
remain liable for the obligations of the Guarantors up to the maximum
liability of such Guarantor hereunder until the Guaranteed Obligations
shall have been indefeasibly paid in full.
(c) Each Guarantor agrees that, if any payment made by the
Borrower or any other Person applied to the Obligations is at any time
annulled, set aside, rescinded, invalidated, declared to be fraudulent
or preferential or otherwise required to be refunded or repaid, or the
proceeds of any Collateral are required to be refunded by the Lender to
the Borrower, its estate, trustee, receiver or any other Person,
including, without limitation, any Guarantor, under any Applicable Law
or equitable cause, then, to the extent of such payment or repayment,
each Guarantor's liability hereunder (and any Lien or Collateral
securing such liability) shall be and remain in full force and effect,
as fully as if such payment had never been made, and, if prior thereto,
this Guaranty shall have been canceled or surrendered (and if any Lien
or Collateral securing such Guarantor's liability hereunder shall have
been released or terminated by virtue of such cancellation or
surrender), this Guaranty (and such Lien or Collateral) shall be
reinstated in full force and effect, and such prior cancellation or
surrender shall not diminish, release, discharge, impair or otherwise
affect the obligations of such Guarantor in respect of the amount of
such payment (or any Lien or Collateral securing such obligation).
SECTION 2.11 PAYMENTS. Payments by the Guarantors shall be made to the
Lender, to be credited and applied to the Guaranteed Obligations in accordance
with the Loan Agreement, in immediately available Dollars to the account
designated by the Lender.
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ARTICLE III
REPRESENTATIONS AND WARRANTIES
To induce the Lender to make the Loans, each Guarantor hereby
represents and warrants that:
SECTION 3.1 EXISTENCE. Such Guarantor is duly organized, validly
existing and in good standing under the laws of the jurisdiction of its
incorporation or formation, has the requisite power and authority to own, lease
and operate its properties and to carry on its business as now being and
hereafter proposed to be conducted and is duly qualified and authorized to do
business in each jurisdiction in which the character of its properties or the
nature of its business requires such qualification and authorization and the
failure to be so qualified would have a Material Adverse Effect.
SECTION 3.2 AUTHORIZATION OF AGREEMENT; ENFORCEABILITY. Such Guarantor
has the right, power and authority to execute, deliver and perform this Guaranty
and has taken all necessary corporate or other organizational action to
authorize its execution, delivery and performance of this Guaranty. This
Guaranty has been duly executed and delivered by the duly authorized officers of
such Guarantor and this Guaranty constitutes the legal, valid and binding
obligation of such Guarantor enforceable against such Guarantor in accordance
with its terms, except as such enforcement may be limited by bankruptcy,
insolvency, reorganization, moratorium or similar state or federal debtor relief
laws from time to time in effect which affect the enforcement of creditors'
rights in general and the availability of equitable remedies.
SECTION 3.3 NO CONFLICT; CONSENTS. The execution, delivery and
performance by such Guarantor of this Guaranty will not, by the passage of time,
the giving of notice or otherwise, violate any material provision of any
Applicable Law or contractual obligation of such Guarantor and will not result
in the creation or imposition of any Lien upon or with respect to any property
or revenues of such Guarantor. No consent or authorization of, filing with, or
other act by or in respect of, any arbitrator or governmental authority and no
consent of any other Person (including, without limitation, any stockholder or
creditor of such Guarantor), is required in connection with the execution,
delivery, performance, validity or enforceability of this Guaranty.
SECTION 3.4 LITIGATION. No actions, suits or proceedings before any
arbitrator or governmental authority are pending or, to the knowledge of such
Guarantor, threatened by or against such Guarantor or against any of its
properties with respect to this Guaranty or any of the transactions contemplated
hereby.
SECTION 3.5 TITLE TO ASSETS. Such Guarantor has a valid ownership or
leasehold interest in any and all real property owned or occupied by it, and has
good title to all of its personal property sufficient to carry on its business
free of any and all Liens of any type whatsoever, except Permitted Liens.
SECTION 3.6 SOLVENCY. As of the Closing Date (or such later date upon
which such Guarantor became a party hereto), such Guarantor (i) has capital
sufficient to carry on its
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business and transactions and all business and transactions in which it engages
and is able to pay its debts as they mature, (ii) owns property having a value,
both at fair valuation on a going concern basis, and at present fair saleable
value on a going concern basis, greater than the amount required to pay its
probable liabilities (including contingencies), and (iii) does not believe that
it will incur debts or liabilities beyond its ability to pay such debts or
liabilities as they mature, subject in each case to the first sentence of
SECTION 2.2.
ARTICLE IV
MISCELLANEOUS
SECTION 4.1 AMENDMENTS IN WRITING. None of the terms or provisions of
this Guaranty may be waived, amended, supplemented or otherwise modified except
in accordance with SECTION 9.04 of the Loan Agreement.
SECTION 4.2 NOTICES. All notices and communications hereunder shall be
given to the addresses and otherwise made in accordance with SECTION 9.06 of the
Loan Agreement; provided that notices and communications to the Guarantors shall
be directed to the Guarantors at the address of the Borrower set forth in
SECTION 9.06 of the Loan Agreement.
SECTION 4.3 ENFORCEMENT EXPENSES, INDEMNIFICATION.
(a) Each Guarantor agrees to pay or reimburse the Lender for
all its reasonable costs and expenses incurred in connection with
enforcing or preserving any rights under this Guaranty and the other
Loan Documents to which such Guarantor is a party, including, without
limitation, the reasonable fees and disbursements of counsel (including
the allocated fees and expenses of in-house counsel) to the Lender.
(b) Each Guarantor agrees to pay, and to save the Lender
harmless from, any and all liabilities with respect to, or resulting
from any delay in paying, any and all stamp, excise, sales or other
taxes which may be payable or determined to be payable with respect to
any of the Collateral or in connection with any of the transactions
contemplated by this Guaranty.
(c) Each Guarantor agrees to pay, and to save the Lender
harmless from, any and all liabilities, obligations, losses, damages,
penalties, costs and expenses in connection with actions, judgments,
suits, costs, expenses or disbursements of any kind or nature
whatsoever with respect to the execution, delivery, enforcement,
performance and administration of this Guaranty to the extent the
Borrower would be required to do so pursuant to the Loan Agreement
and/or the Collateral Agreement.
(d) The agreements in this SECTION 4.3 shall survive repayment
of the Obligations and all other amounts payable under the Loan
Agreement and the other Loan Documents.
SECTION 4.4 GOVERNING LAW. This Guaranty shall be governed by, and
construed and interpreted in accordance with, the laws of the State of New York,
without giving effect to principles of conflicts of laws.
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SECTION 4.5 CONSENT TO JURISDICTION AND VENUE.
(a) Each Guarantor hereby irrevocably consents to the personal
jurisdiction of all state and federal courts located in New York, New
York (and any courts from which an appeal from any of such courts must
or may be taken) in any action, claim or other proceeding arising out
of any dispute in connection with this Agreement and the other Loan
Documents, any rights or obligations hereunder or thereunder, or the
performance of such rights and obligations. Each Guarantor hereby
irrevocably consents to the service of a summons and complaint and
other process in any action, claim or proceeding brought by the Lender
in connection with this Agreement or the other Loan Documents, any
rights or obligations hereunder or thereunder, or the performance of
such rights and obligations, on behalf of itself or its property, by
registered or certified mail, return receipt requested, in the manner
specified in SECTION 9.06 of the Loan Agreement. Nothing in this
SECTION 4.5 shall affect the right of the Lender to serve legal process
in any other manner permitted by Applicable Law or affect the right of
the Lender to bring any action or proceeding against any Guarantor or
its properties in the courts of any other jurisdictions.
(b) The Guarantors hereby irrevocably waive any objection each
may have now or in the future to the laying of venue in the aforesaid
jurisdiction in any action, claim or other proceeding arising out of or
in connection with this Guaranty, any other Loan Document or the rights
and obligations of the parties hereunder or thereunder. The Guarantors
irrevocably waive, in connection with such action, claim or proceeding,
any plea or claim that the action, claim or proceeding has been brought
in an inconvenient forum.
SECTION 4.6 PRESERVATION OF REMEDIES, DAMAGES.
(a) PRESERVATION OF CERTAIN REMEDIES. The parties hereto and
the other Loan Documents preserve, without diminution, certain remedies
that such Persons may employ or exercise freely, either alone, in
conjunction with or during a dispute. Each such Person shall have and
hereby reserves the right to proceed in any court of proper
jurisdiction or by self-help to exercise or prosecute the following
remedies, as applicable: (i) all rights to foreclose against any real
or personal property or other security by exercising a power of sale
granted in the Loan Documents or under Applicable Law or by judicial
foreclosure and sale, including a proceeding to confirm the sale, (ii)
all rights of self-help including peaceful occupation of property and
collection of rents, set-off, and peaceful possession of property, and
(iii) obtaining provisional or ancillary remedies including injunctive
relief, sequestration, garnishment, attachment, appointment of receiver
and in filing an involuntary bankruptcy proceeding. Preservation of
these remedies does not limit the power of an arbitrator to grant
similar remedies that may be requested by a party in a dispute.
(b) NO PUNITIVE/EXEMPLARY DAMAGES. The Lender and each
Guarantor hereby agree that no such Person shall have a remedy of
punitive or exemplary damages against any other party to a Loan
Document and each such Person hereby waives any right or claim to
punitive or exemplary damages that it may now have or may arise in the
future in connection with any dispute hereunder or under any other Loan
Document, whether such dispute is resolved through arbitration or
judicially.
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SECTION 4.7 WAIVER OF JURY TRIAL. TO THE EXTENT PERMITTED BY APPLICABLE
LAW, THE LENDER AND EACH GUARANTOR HEREBY IRREVOCABLY WAIVE THEIR RESPECTIVE
RIGHTS TO A JURY TRIAL WITH RESPECT TO ANY ACTION, CLAIM OR OTHER PROCEEDING
ARISING OUT OF ANY DISPUTE IN CONNECTION WITH THIS GUARANTY, THE NOTE OR THE
OTHER LOAN DOCUMENTS, ANY RIGHTS OR OBLIGATIONS HEREUNDER OR THEREUNDER, OR THE
PERFORMANCE OF SUCH RIGHTS AND OBLIGATIONS.
SECTION 4.8 NO WAIVER BY COURSE OF CONDUCT, CUMULATIVE REMEDIES. The
Lender shall not by any act (except by a written instrument pursuant to SECTION
4.1), delay, indulgence, omission or otherwise be deemed to have waived any
right or remedy hereunder or to have acquiesced in any Default or Event of
Default. No failure to exercise, nor any delay in exercising on the part of the
Lender, any right, power or privilege hereunder shall operate as a waiver
thereof. No single or partial exercise of any right, power or privilege
hereunder shall preclude any other or further exercise thereof or the exercise
of any other right, power or privilege. A waiver by the Lender of any right or
remedy hereunder on any one occasion shall not be construed as a bar to any
right or remedy which the Lender would otherwise have on any future occasion.
The rights and remedies herein provided are cumulative, may be exercised singly
or concurrently and are not exclusive of any other rights or remedies provided
by law.
SECTION 4.9 SUCCESSORS AND ASSIGNS. This Guaranty shall be binding upon
and shall inure to the benefit of each Guarantor (and shall bind all Persons who
become bound as a Guarantor under this Guaranty), the Lender and their
successors and assigns; PROVIDED that no Guarantor may assign, transfer or
delegate any of its rights or obligations under this Guaranty without the prior
written consent of all holders of Obligations.
SECTION 4.10 SEVERABILITY. If any provision hereof is held by a court
of competent jurisdiction to be invalid or unenforceable in any jurisdiction,
then, to the fullest extent permitted by law, (a) the other provisions hereof
shall remain in full force and effect in such jurisdiction and shall be
liberally construed in favor of the Lender in order to carry out the intentions
of the parties hereto as nearly as may be possible; and (b) the invalidity or
unenforceability of any provisions hereof in any jurisdiction shall not affect
the validity or enforceability of such provision in any other jurisdiction.
SECTION 4.11 HEADINGS. The various section headings used in this
Guaranty are for convenience of reference only and shall not affect the meaning
or interpretation of this Guaranty or any provisions hereof.
SECTION 4.12 COUNTERPARTS. This Guaranty may be executed by the parties
hereto in several counterparts, each of which shall be deemed to be an original
and all of which shall constitute together but one and the same agreement.
SECTION 4.13 SET-OFF. Each Guarantor hereby irrevocably authorizes the
Lender, at any time and from time to time during the continuance of an Event of
Default, without notice to such Guarantor or any other Guarantor, any such
notice being expressly waived by each Guarantor, to set off and appropriate and
apply any and all deposits (general or special, time or demand, provisional or
final), in any currency, and any other credits, indebtedness or claims, in
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any currency, in each case whether direct or indirect, absolute or contingent,
matured or unmatured, at any time held or owing by the Lender (or any agent of
the Lender) to or for the credit or the account of such Guarantor, or any part
thereof, in such amounts as the Lender may elect, against and on account of the
obligations and liabilities of such Guarantor to the Lender hereunder, as the
Lender may elect, whether or not the Lender has made any demand for payment. The
Lender shall notify such Guarantor promptly of any such set-off and the
application made by the Lender of the proceeds thereof; PROVIDED that the
failure to give such notice shall not affect the validity of such set-off and
application. The rights of the Lender under this Section 4.13 are in addition to
other rights and remedies (including, without limitation, other rights of
set-off) which the Lender may have.
SECTION 4.14 INTEGRATION. This Guaranty and the other Loan Documents
represent the agreement of the Guarantors and the Lender with respect to the
subject matter hereof and thereof, and there are no promises, undertakings,
representations or warranties by the Lender relative to subject matter hereof
and thereof not expressly set forth or referred to herein or in the other Loan
Documents.
SECTION 4.15 ACKNOWLEDGEMENTS. Each Guarantor hereby acknowledges that:
(a) it has been advised by counsel in the negotiation,
execution and delivery of this Guaranty and the other Loan Documents to
which it is a party;
(b) the Lender as such has no fiduciary relationship with or
duty to any Guarantor arising out of or in connection with this
Guaranty or any of the other Loan Documents, and the relationship
between the Guarantors, on the one hand, and the Lender as such, on the
other hand, in connection herewith or therewith is solely that of
debtor and creditor; and
(c) no joint venture is created hereby or by the other Loan
Documents or otherwise exists by virtue of the transactions
contemplated hereby among the Lender or among the Guarantors and the
Lender.
SECTION 4.16 RELEASES. At such time as the Guaranteed Obligations shall
have been indefeasibly paid in full, this Guaranty and all obligations (other
than those expressly stated to survive such termination) of the Guarantors
hereunder shall terminate, all without delivery of any instrument or performance
of any act by any party.
SECTION 4.17 ADDITIONAL GUARANTORS. Each direct or indirect Domestic
Subsidiary of the Borrower that is required to become a party to this Guaranty
pursuant to Section 5.11 of the Loan Agreement shall become a Guarantor for all
purposes of this Guaranty upon execution and delivery by such Domestic
Subsidiary of a joinder or supplement in form and substance satisfactory to the
Lender.
[Signature Page to Follow]
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IN WITNESS WHEREOF, each of the Guarantors has executed and delivered
this Guaranty by its duly authorized officer, all as of the date first set forth
above.
TALON INTERNATIONAL, INC.,
a Delaware corporation
By: /s/ Xxxxxx X. Xxxxxxx
-------------------------------------
Name: Xxxxxx X. Xxxxxxx
Title: Chief Financial Officer
TAG-IT, INC.,
a California corporation
By: /s/ Xxxxxx X. Xxxxxxx
-------------------------------------
Name: Xxxxxx X. Xxxxxxx
Title: Chief Financial Officer
A.G.S. STATIONARY, INC., a
California corporation
By: /s/ Xxxxxx X. Xxxxxxx
-------------------------------------
Name: Xxxxxx X. Xxxxxxx
Title: Chief Financial Officer
TAG-IT PACIFIC LIMITED,
a Hong Kong corporation
By: /s/ Xxxxxx X. Xxxxxxx
-------------------------------------
Name: Xxxxxx X. Xxxxxxx
Title: Chief Financial Officer
TAG-IT PACIFIC (HK) LTD.,
a British Virgin Islands corporation
By: /s/ Xxxxxx X. Xxxxxxx
-------------------------------------
Name: Xxxxxx X. Xxxxxxx
Title: Chief Financial Officer
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TAG IT de MEXICO, S.A. de C.V.
By: /s/ Xxxxxx X. Xxxxxxx
-------------------------------------
Name: Xxxxxx X. Xxxxxxx
Title: Chief Financial Officer
TALON ZIPPER (SHENZHEN) COMPANY, LTD.,
a Chinese corporation
By: /s/ Xxxxxx X. Xxxxxxx
-------------------------------------
Name: Xxxxxx X. Xxxxxxx
Title: Chief Financial Officer
TALON INTERNATIONAL PVT. LTD.,
an Indian corporation
By: /s/ Xxxxxx X. Xxxxxxx
-------------------------------------
Name: Xxxxxx X. Xxxxxxx
Title: Chief Financial Officer
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