SUBLEASE
Between
WRC MEDIA INC.
as Sublessor
and
INNOVO GROUP, INC.
as Sublessee
Premises: Entire 23d floor
000 Xxxxxxx Xxxxxx
Xxx Xxxx, XX 00000
SUBLEASE
SUBLEASE, dated as of July 28, 2003 between WRC Media Inc., a
Delaware corporation ("Sublessor"), having an office at 000 Xxxxxxx Xxxxxx, Xxx
Xxxx, XX 00000 and Innovo Group Inc., a Texas corporation ("Sublessee"), at the
time of execution having an office at 0000 X. Xxxxxxx Xxxxxx, Xxxxx 000,
Xxxxxxxx, XX 00000.
WITNESSETH
WHEREAS, by Agreement of Lease ("Master Lease"), dated as of
__ March 2000, between 000-000 Xxxxxxx Xxxxxx Limited Partnership, as landlord,
("Landlord") and Sublessor, as tenant, Landlord leased to Sublessor the entire
21st, 22nd and 23rd floors (the "Master Premises") in accordance with the terms
of the Master Lease, of the building ("Building") known as 000 Xxxxxxx Xxxxxx,
Xxx Xxxx, XX (a true and complete copy of which Master Lease (with certain
financial terms omitted is attached hereto); and
WHEREAS, Sublessor desires to sublet to Sublessee, and
Sublessee desires to hire from Sublessor, a portion of the premises demised
under the Master Lease upon the terms and conditions hereinafter set forth;
NOW, THEREFORE, in consideration of the mutual covenants
hereinafter provided, Sublessor and Sublessee hereby agree as follows:
1. Demised Premises
----------------
1.1. Sublessor hereby sublets to Sublessee, and Sublessee hereby
sublets and hires from Sublessor, the premises ("Premises") comprising the
entire 23rd floor of the Building as leased to Sublessor under the Master Lease,
for the sublease term hereinafter stated and for the Fixed Rent and Additional
Rent (both as hereinafter defined) hereinafter reserved, subject to all of the
terms and provisions hereinafter provided or incorporated in this Sublease by
reference. The parties agree that the rentable space comprising the entire 23rd
floor is deemed to be10,886 square feet.
1.2. Sublessee agrees to accept the Premises broom clean and vacant on
the Commencement Date (as hereinafter defined) in its "as-is" condition on the
date thereof. The furniture listed on the annexed Schedule 1.2 shall be
available to Sublessee for use during the Term. Sublessor has not made and does
not make any representations or warranties as to the physical condition of the
Premises, or any other matter affecting or relating to the Premises. Sublessee
represents and warrants to Sublessor that, as of the Effective Date, Sublessee
shall examine and inspect all matters with respect to taxes, income and expense
data, insurance costs, bonds, permissible uses, the Master Lease, zoning,
covenants, conditions and restrictions and all other matters which in
Sublessee's judgment bear upon the value and suitability of the Sublet Space for
Sublessee's purposes. Sublessee has and will rely solely upon Sublessee's own
inspection and examination of such items and not on any representations of
Sublessor, express
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or implied. By entering the Premises Sublessee shall be deemed to accept the
same in its condition existing as of the date of such entry and subject to all
municipal, state and federal statutes, laws, ordinances, including zoning
ordinances, and regulations governing and relating to the use, occupancy or
possession of the Premises.
1.3. Any and all alterations to, work to be performed in or materials
to be supplied for the Premises shall be made, performed and supplied at the
sole cost and expense of Sublessee and in conformance with all of the terms and
provisions of this Sublease and the Master Lease.
1.4. Throughout the Term, Sublessee shall allow to Sublessor access to
the telephone equipment room located in the Premises at reasonable times, and in
the event of emergency.
2. Term
----
2.1. The term ("Term") of this Sublease shall commence on the date (the
"Commencement Date") which is the later of (i) the date Sublessor shall have
obtained Landlord's written consent to this Sublease in accordance with the
provisions of Article 20, and (ii) August 1, 2003, and unless earlier terminated
as herein provided, shall expire on July 31, 2009 (the "Expiration Date"). By
notice given on or before September 1, 2008, and provided Sublessee is not in
breach and has not been in breach more than twice during the Term, Sublessee may
elect to renew the Term of this Sublease for a period ending February 28, 2015,
in which event the Fixed Rent for such renewal term shall be the greater of (i)
Fixed Rent paid by Sublessor from time to time during that renewal term plus 2%
or (ii) the fair market value of the space, determined by an industry expert
acceptable to both parties in August, 2008; and Additional Rent shall continue
to be calculated as provided herein. Until Subtenant exercises the foregoing
option, Sublessor shall have the right to show the Premises to prospective
subtenants from July 1, 2008 upon reasonable notice and during regular business
hours.
2.2. If the term of the Master Lease is terminated for any reason prior
to the Expiration Date, this Sublease shall thereupon be terminated ipso facto
without any liability of Sublessor to Sublessee by reason of such early
termination. Except as otherwise expressly provided in this Sublease with
respect to those obligations of Sublessee and Sublessor which by their nature or
under the circumstances can only be, or under the provisions of this Sublease
may be, performed after the termination of this Sublease, the Term and estate
granted hereby shall end at noon on the date of termination of this Sublease as
if such date were the Expiration Date, and neither party shall have any further
obligation or liability to the other after such termination. Notwithstanding the
foregoing, any liability of Sublessee to make any payment under this Sublease,
whether of Fixed Rent, Additional Rent (both as hereinafter defined) or
otherwise, which shall have accrued prior to the expiration or sooner
termination of this Sublease, shall survive the expiration or sooner termination
of this Sublease.
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2.3. Sublessee waives the right to recover any damages which may result
from Sublessor's failure to deliver possession of the Premises on the
Commencement Date. If Sublessor shall be unable to deliver possession of the
Premises on such scheduled date, and provided Sublessee is not responsible for
such inability to give possession, the Rent reserved and guaranteed to be paid
herein shall not commence until Sublessor shall be able to so deliver possession
of the Premises to Sublessee, and no such failure to deliver possession on such
scheduled date shall in any way affect the validity of this Sublease or the
obligations of Sublessee hereunder or give rise to any claim for damages by
Sublessee or claim for rescission of this Sublease, nor shall the same in any
way be construed to extend the Term.
2.4. The parties agree that this Article 2 constitutes an express
provision as to the time at which Sublessor shall deliver possession of the
Premises to Sublessee, and Sublessee hereby waives any rights to rescind this
Sublease which Sublessee might otherwise have pursuant to Section 223-a of the
Real Property Law of the State of New York or any other law of like import now
or hereafter in force.
3. Rent
----
3.1. The rent ("Rent") reserved for the Term shall consist of the
following:
(i) subject to Section 3.3, for the first three years of
the Term, annual fixed rent ("Fixed Rent") at the
rate of THREE HUNDRED FORTY EIGHT THOUSAND THREE
HUNDRED FIFTY-TWO DOLLARS AND NO CENTS ($348,352.00)
per annum for the period commencing on the
Commencement Date and ending on the thirty-first day
of the 36th month after the Effective Date, payable
in equal monthly installments of TWENTY NINE THOUSAND
TWENTY NINE DOLLARS AND THIRTY THREE CENTS
($29,029.33) each.
(ii) for the next succeeding three years of the Term,
annual Fixed Rent at the rate of THREE HUNDRED FIFTY
NINE THOUSAND TWO HUNDRED THIRTY EIGHT DOLLARS
($359,238.00), payable in equal monthly installments
of TWENTY NINE THOUSAND NINE HUNDRED THIRTY SIX
DOLLARS FIFTY CENTS ($29,936.50) each.
for any additional term pursuant to the exercise of
the option described in Section 2.1, annual fixed
rent at the Fixed Rent determined according to
Section 2.1.
Installments of Fixed Rent shall be payable in advance and without setoff of any
kind on the first day of each month of the Term following the abatement period
described in Section 3.3; and
additional rent ("Additional Rent") in an amount
equal to that portion attributable to the Premises of
any and all sums of money other than
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annual Fixed Rent which is or may become payable by
Sublessor to Landlord under the Master Lease
including, without limiting the generality of the
foregoing: the Tenant' s Tax Payment, as defined in
Section 3.03 of the Master Lease (including any item
described in Section 3.04 of the Master Lease), and
the payment described in Section 3.02 of the Master
Lease (as fixed below).
Notwithstanding the foregoing or any provision of the Master
Lease, the payment described in Section 3.02 of the Master Lease applicable to
the premises shall conclusively be determined as three one-hundredths (0.03) of
the sum of (x) the then current Fixed Rent and (y) the payment for the previous
Operating Year pursuant to Section 3.02 of the Master Lease.
The payment of the Tenant' s Tax Payment and the payment
described by Section 3.02 of the Master Lease shall be made in accordance with
the terms of Article 3 of the Master Lease except that, as of the Commencement
Date, the term "Operating Year", as defined in Section 3.01(e) of the Master
Lease, shall mean the calendar year ending on December 31, 2003 and each
succeeding calendar year thereafter, and the term "Base Tax", as defined in
Section 3.01 (a) of the Master Lease, shall mean the Taxes (as defined in
Section 3.01(c) of the Master Lease) payable for the twelve month period ending
on June 30, 2003.
Additional Rent under this subsection shall be payable by
Sublessee to Sublessor on the date five (5) days before the date on which such
amounts are payable by Sublessor to Landlord under the Master Lease. Sublessor
shall have the same remedies with respect to any default by Sublessee in the
payment of Additional Rent as are provided in this Sublease, the Master Lease or
applicable law with respect to any nonpayment of rent.
3.2. The Fixed Rent and, except as otherwise specifically provided in
this Sublease, the Additional Rent, shall be paid by Sublessee to Sublessor at
the office of Sublessor set forth above or such other place as Sublessor may
designate in writing, without prior notice or demand therefore without any
abatement, deduction or setoff.
3.3. Notwithstanding any language to the contrary contained herein, the
Fixed Rent payable hereunder shall be abated during the period commencing August
1, 2003 and ending on October 31, 2003. In the event the Commencement Date
occurs after August 1, 2003, the period of abatement shall be extended so that
it embraces a total of three months' Fixed Rent.
3.4. Sublessee shall pay all Rent when due, in lawful money of the
United States which shall be legal tender for the payment of all debts, public
and private, at the time of payment. Any payment of Rent or other amount from
Sublessee to Sublessor under this Sublease which is not paid on the date due
shall accrue interest from the date due until the date paid at the lesser of:
(i) the interest rate for late payments set forth in the
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Lease plus 2%, or (ii) the maximum lawful interest rate. In addition, Sublessee
acknowledges that the late payment of any installment of Rent will cause
Sublessor to incur certain costs and expenses not contemplated under this
Sublease, the exact amount of which are extremely difficult or impractical to
fix. These costs and expenses will include, without limitation, administrative
and collection costs and processing and accounting expenses. Therefore, if any
installment of Rent is not received by Sublessor from Sublessee within five (5)
days after the installment is due, Sublessee shall immediately pay to Sublessor
a late payment charge equal to Five Percent (5%) of the amount of such
delinquent payment of Rent, in addition to the installment of Rent then owing.
In the event on nonpayment arrearages that exceed the amount of the Security
Deposit held by Sublessor at any time, such late payment fee shall be increased
to an amount equal to the difference between the amount of the Security Deposit
and the arrearage. This Section 3.4 shall not relieve Sublessee of Sublessee's
obligation to pay any amount owing hereunder at the time and in the manner
provided. All interest accrued and any late payment charges due under this
subsection as hereinabove provided shall be deemed to be Additional Rent payable
hereunder and due at such time or times as the Rent with respect to which such
interest shall have accrued shall be payable under this Sublease.
4. Use
---
4.1. Sublessee may occupy and use the Premises only for general and
executive offices and showroom space uses incidental thereto in connection with
the conduct of a fashion and accessories business by itself and wholly-owned
subsidiaries, and for no other purpose, provided that any use of the Premises
shall in all respects be only as permitted under the terms and provisions of
this Sublease and the Master Lease, including the rules and regulations under
the Master Lease, and any and all laws, statutes, ordinances, orders,
regulations and requirements of all federal, state and local governmental,
public or quasi-public authorities, whether now or hereafter in effect, which
may be applicable to or in any way affect the Building or the Premises or any
part thereof (collectively, "Legal Requirements"). Sublessee shall at all times
conduct its business within noise limits reasonable and customary for general
office space and as otherwise provided in the Master Lease and any Rules and
Regulations of the Landlord.
4.2. Sublessee shall not, without the prior consent of Sublessor and
Landlord, knowingly do or permit anything to be done which may result in a
violation of the terms of this Sublease or the Master Lease or which may make
Sublessor liable for any damages, claims, fines, penalties, costs or expenses
thereunder.
5. Master Lease
------------
5.1. This Sublease and all of Sublessee's rights hereunder are and
shall remain in all respects subject and subordinate to (i) all of the terms and
provisions of the Master Lease, a copy of which (except for the rent and certain
other financial provisions) has been delivered to Sublessee, (ii) any and all
amendments of the Master Lease or supplemental agreements relating thereto
hereafter made between Landlord and
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Sublessor (copies of which Sublessor agrees to deliver to Sublessee except for
the rent and certain other financial provisions which may be contained therein),
provided, however, that Sublessor shall not enter into any such amendments or
supplemental agreements that shall (1) materially adversely affect Sublessee's
rights hereunder, (2) increase Sublessee's obligations hereunder other than in
an immaterial way, (3) decrease the size of the Premises, or (4) shorten the
term hereof (except as described in subsection 5.2 below) and (iii) any and all
matters to which the tenancy of Sublessor, as tenant under the Master Lease, is
or may be subordinate. Sublessee shall in no case have any rights under this
Sublease greater than Sublessor's rights as tenant under the Master Lease. The
foregoing provisions shall be self-operative and no further instrument of
subordination shall be necessary to effectuate such provisions unless required
by Landlord or Sublessor, in which event Sublessee shall, upon demand by
Landlord or Sublessor at any time and from time to time, execute, acknowledge
and deliver to Sublessor and Landlord any and all instruments that Sublessor or
Landlord may deem reasonably necessary or proper to confirm such subordination
of this Sublease, and the rights of Sublessee hereunder. Sublessee hereby
appoints Sublessor its attorney in fact, coupled with an interest, for the
purpose of executing any such instrument of subordination if Sublessee shall
fail to execute, acknowledge and/or deliver any such instrument of subordination
within ten (10) business days after Landlord's or Sublessor's demand therefor.
5.2. Sublessee acknowledges that in the event of a (i) termination of
the Master Lease for any reason, including but not limited to a agreement
between Sublessor and Landlord terminating the Master Lease, or (ii) re-entry or
dispossess by Landlord under the Master Lease, Landlord may, at its option, take
over all of the right, title and interest of Sublessor hereunder and Sublessee
agrees that it shall, at Landlord's option, attorn to Landlord pursuant to the
then executory provisions of this Sublease, except that Landlord shall not (i)
be liable for any previous act or omission of Sublessor under this Sublease,
(ii) be subject to any offset not expressly provided in this Sublease, which
theretofore accrued to the Sublessee against Sublessor, or (iii) be bound by any
previous modification of this Sublease (which is made without Landlord's
consent) or by any previous prepayment of more than one month's rent.
5.3. Sublessee shall observe and perform for the benefit of Landlord
and Sublessor, each and every term, covenant, condition and agreement of the
Master Lease which Sublessor is required to observe or perform with respect to
the Premises as tenant under the Master Lease, except for the covenants of
Sublessor to pay Landlord the "Rental" (as such term is defined in the Master
Lease). Except as otherwise specifically provided in this Sublease, all of the
terms, covenants, conditions and agreements which Landlord or Sublessor are
required to observe or perform with respect to the Premises as parties to the
Master Lease are hereby incorporated herein by reference and deemed to
constitute terms, covenants, conditions and agreements which Sublessor and
Sublessee are required to observe or perform under this Sublease as if set forth
herein at length, mutatis mutandis, with the exception of the following articles
and provisions of the Master Lease: 1.01; 1.05; 2.01; 2.02; 2.03; 2.04; 11.09;
21.01 (the parties will cooperate to secure
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appropriate listings); 42.01; 42.04; 47.01; 48.01; Article 50; Exhibit F.
Sublessor may exercise all of the rights, powers, privileges and remedies
reserved to Landlord under the Master Lease to the same extent as if fully set
forth herein at length, including, without limitation, all releases from
liability to Landlord thereunder except as may be provided otherwise herein, and
all rights and remedies arising out of or with respect to any default by
Sublessee in the payment of Rent hereunder or the observance or performance of
the terms, covenants, conditions and agreements of this Sublease (including
those portions of the Master Lease that are incorporated herein). In the event
of any inconsistency between the terms of this Sublease and the Master Lease,
the terms of this Sublease shall govern.
5.4. The consent of Landlord shall be required in connection with any
act which requires the consent of Landlord pursuant to the terms of the Master
Lease, notwithstanding that a particular provision herein may not require
Sublessor's consent or states that only Sublessor's consent is required.
6. Services
--------
6.1. Except as otherwise specifically provided in this Sublease,
Sublessee shall be entitled during the Term to receive all services, utilities,
repairs and facilities which Landlord is required to provide insofar as such
services, utilities, repairs and facilities pertain to the Premises.
Notwithstanding anything to the contrary in this Sublease, Sublessor shall have
no liability of any nature whatsoever to Sublessee as a consequence of the
failure or delay on the part of Landlord in performing any or all of its
obligations under the Master Lease, unless such failure or delay is caused by
Sublessor, and under no circumstances shall Sublessee have any right to require
or obtain the performance by Sublessor of any obligations of Landlord under the
Master Lease or otherwise. Sublessee's obligations under this Sublease shall not
be impaired, nor shall the performance thereof be excused, because of any
failure or delay on the part of Landlord in performing its obligations under the
Master Lease.
6.2. If at any time during the Term Landlord shall default in any of
its obligations to furnish facilities, services or utilities or to make repairs
to the Premises, then, upon Sublessor's receipt of a written notice from
Sublessee specifying such default, Sublessor shall, at Sublessee's sole cost and
expense, use its reasonable efforts to cause Landlord to cure such default. Any
action or proceeding instituted by Sublessor against Landlord to enforce such
rights shall be conducted at the expense of Sublessee; provided, however, that
if the failure by Landlord also pertains to that portion of the Master Premises
that are retained by Sublessor, such expense shall be equitably apportioned
between the parties.
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7. Electricity
-----------
7.1. Sublessee shall comply with all of the obligations of Sublessor
under the Master Lease with respect to electricity. Bills therefor shall be
rendered by Sublessor to Sublessee at such times as Landlord submits bills to
Sublessor therefor pursuant to the Master Lease, in an amount equal to 1.05
times the amount billed to Sublessor for the Premises as shall be fixed by
submetering or (in the event submetering is not effected) by proration in the
ratio of the square footage of the Premises to the total rentable square footage
of the Master Premises. The amounts thereof shall be Additional Rent and shall
be due and payable to Sublessor, without set-off or deduction, upon the
rendition of such bills. Sublessor shall make any objection to any proration
within thirty days of invoice, or the calculation will be conclusive.
7.2. Sublessee acknowledges that (i) Sublessor is not responsible for
providing or installing any equipment necessary for Sublessee's electrical
requirements, and (ii) Sublessor and Landlord shall have no liability to
Sublessee for any loss, damage or expense which Sublessee may sustain or incur
by reason of any change, failure, inadequacy or defect in the supply or
character of the electrical energy furnished to the Premises or if the quantity
or character of the electrical energy is no longer available or suitable for
Sublessee's requirements.
8. Alterations and Repairs
-----------------------
8.1. Sublessee shall make no alterations, installations, additions or
improvements, including Sublessee's initial leasehold improvements
(collectively, "Alterations") in or about the Premises without the prior written
consent of Sublessor and Landlord in each instance, which consent shall not be
unreasonably withheld by Sublessor as to nonstructural Alterations which do not
affect building systems provided any required consent of Landlord shall have
first been obtained. Any Alterations consented to by Sublessor shall be
performed by Sublessee, at its sole cost and expense, and in compliance with the
following requirements:
(a) Sublessee, at its sole expense, shall comply with all of the
provisions of this Sublease and the Master Lease pertaining to the making of
Alterations, including, without limiting the generality of the foregoing, the
provisions requiring the prior written consent of Landlord before any
Alterations may be made in or about the Premises;
(b) Sublessee shall submit to Sublessor for its and Landlord's prior
written approval all plans and specifications for such proposed Alterations,
together with the name of the proposed contractor and all proposed
subcontractors, and all other documentation required to be submitted by
Sublessor to Landlord under the Master Lease in respect of such Alterations;
(c) Sublessee, at its sole expense, and prior to commencing any work,
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shall deliver to Sublessor at Sublessor's option either (i) a performance bond
and a labor and materials bond (issued by a surety company satisfactory to
Sublessor and licensed to do business in New York State), in an amount equal to
125% of the estimated cost of such Alteration and otherwise in form reasonably
satisfactory to Sublessor or (ii) such other security as shall be satisfactory
to Sublessor;
(d) Sublessee shall furnish Sublessor with certificates of insurance as
shall be reasonably satisfactory to Sublessor as to coverage and insurer (who
shall be licensed to do business in the State of New York), including, but not
limited to, liability, property damage, and worker's compensation insurance to
protect Sublessor, Landlord, their agents, employees, successors and assigns and
Sublessee during the period of the performance of such Alteration;
(e) All such Alterations shall be performed in a good and workmanlike
manner and in compliance with all Legal Requirements and with all requirements
of any insurance policies affecting the Premises or the Building and so as to
cause as little interference as possible with Sublessor's or its sublessees'
use, occupancy and enjoyment of the premises of which the Premises are a part;
and
(f) Sublessee, at its sole expense, shall obtain all municipal and
other governmental licenses, permits, authorizations, approvals and certificates
required in connection with such Alteration.
8.2. Sublessor shall have no obligations whatsoever to make any repairs
or Alterations in the Premises to any systems serving the Premises or to any
equipment, fixtures or furnishing in the Premises, or to restore the Premises in
the event of a fire or other casualty therein or to perform any other duty with
respect to the Premises which Landlord is required to perform pursuant to
certain obligations which Landlord has to Sublessor under the Master Lease.
Sublessee shall look solely to Landlord for the making of any and all repairs in
the Premises and the performance of all such other work and responsibilities and
only to the extent required by the terms of the Master Lease.
9. Insurance
---------
9.1. Sublessee, at Sublessee's sole expense, shall maintain for the
benefit of Sublessee, Sublessor and Landlord such policies of insurance required
by the Master Lease or reasonably satisfactory to Sublessor as to coverage and
insurer (who shall be licensed to do business in the State of New York),
provided that such insurance shall at a minimum (i) meet all requirements of
Section 9.09 of the Master Lease and (ii) to the extent not categorized in the
Master Lease include comprehensive general liability insurance protecting and
indemnifying Sublessor, Landlord and Sublessee against any and all claims and
liabilities for injury or damage to persons or property or for the loss of time
or of property occurring upon, in or about the Premises, and the public portions
of the Building, caused by or resulting from or in connection with any act or
omission of Sublessee, Sublessee's employees, agents or invitees. Sublessee
shall furnish to Sublessor certificates of insurance evidencing such coverage
prior to the Commencement Date.
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9.2. Nothing contained in this Sublease shall relieve Sublessee or
Sublessor from any liability as a result of damage from fire or other casualty,
but each parry shall look first to any property insurance in its favor before
making any claim against the other party for recovery for loss or damage
resulting from fire or other casualty. To the extent that such insurance is in
force and collectible and to the extent permitted by law, Sublessor and
Sublessee each hereby releases and waives all right to recovery against the
other or anyone claiming through or under the other by way of subrogation or
otherwise. The foregoing release and waiver shall be in force only if the
insurance policies of Sublessor and Sublessee provide that such release or
waiver does not invalidate the insurance; each party agrees to use its best
efforts to include such a provision in its applicable insurance policies. If the
inclusion of said provision would involve an additional expense, either party,
at its sole expense, may require such provision to be inserted in the other's
policy.
10. Assignment, Subletting and Encumbrances
---------------------------------------
10.1. Except as otherwise provided herein, Sublessee shall not
sublease, mortgage, pledge or otherwise encumber all or any part of the
Premises, assign this Sublease (by operation of law or otherwise) or permit the
Premises to be used or occupied by anyone other than Sublessee, without the
prior written approval of both Sublessor and Landlord in each instance, which
approvals shall not be unreasonably withheld or delayed. If Sublessor consents
to an assignment of this Sublease or a subletting of the Premises, no such
assignment or subletting shall be or be deemed to be effective until the
following conditions have been met:
(i) Landlord shall have consented in writing to such
assignment or subletting;
(ii) in the case of an assignment, the assignee shall have
assumed in writing, directly for the benefit of
Sublessor, all of the obligations of Sublessee
hereunder and Sublessor shall have been furnished
with a duplicate original of the agreement of
assignment and assumption, in form and substance
reasonably satisfactory to Sublessor; and
(iii) in the case of a subletting, Sublessor shall have
been furnished with a duplicate original of the
sublease prior to the commencement of the term of
such sublease, which sublease shall be in form and
substance reasonably satisfactory to Sublessor, and
shall be subject and subordinate to all of the terms,
covenants and conditions of this Sublease and the
Master Lease and shall restrict the right of the
subtenant thereunder to assign such sublease or
further sublet its subleased premises.
Notwithstanding Sublessor's consent to any such assignment or subletting, the
provisions of this subsection shall be applicable to each and every subsequent
assignment or
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subletting, and Sublessee shall not be released from any of its obligations or
liabilities hereunder.
10.2. If this Sublease be assigned or if the Premises or any part
thereof be further sublet or occupied by anybody other than Sublessee or
affiliates or subsidiaries of Sublessee authorized in advance by Sublessor and
by Landlord, Sublessor may, after default by Sublessee, collect rent from the
assignee, subtenant or occupant, and, if Sublessor does so, it shall apply the
net amount collected to the Fixed Rent, Additional Rent and other charges herein
reserved, but no such assignment, subletting, occupancy or collection shall be
deemed a waiver of Sublessee's covenants under this Article 10, or the
acceptance by Sublessor of the assignee, subtenant or occupant as tenant
hereunder or a release of Sublessee from the further performance by Sublessee of
any of the terms, covenants and conditions of this Sublease on the part of
Sublessee to be performed hereunder.
10.3. Sublessee shall pay on demand the actual costs and expenses
reasonably incurred by Sublessor and Landlord, including, without limitation,
reasonable architect, engineer and attorneys' fees and disbursements in
connection with any proposed or actual assignment of this Sublease or subletting
of the Premises or any part thereof and the review and/or preparation of
documents in connection therewith.
11. Indemnification
---------------
11.1. Sublessor, Landlord, their respective employees, agents,
contractors, licensees and invitees, shall not be liable to Sublessee, its
employees, agents, contractors, licensees or invitees, and Sublessee shall
indemnify and hold harmless Sublessor and Landlord and their respective
employees, contractors, licensees or invitees for any and all loss, cost,
liability, claim, damage and expense, including, without limiting the generality
of the foregoing, attorneys' fees and expenses and court costs, penalties and
fines incurred in connection with or arising from any injury to Sublessee or any
other person or for any damage to, or loss (by theft or otherwise) of, any of
the property of Sublessee and/or any other person, (i) irrespective of the cause
of such injury, damage or loss if occurring in or about the Premises, and (ii)
to the extent caused by the acts, omissions or negligence of Sublessee, its
employees, agents, contractors, licensees, or invitees, if occurring in or about
the Building.
11.2. Sublessee shall indemnify and hold harmless Sublessor and
Landlord, and their respective employees, agents, contractors, licensees and
invitees, from and against any and all loss, cost, liability, claims, damage and
expenses, including, without limiting the generality of the foregoing,
attorneys' fees and expenses and court costs, penalties and fines, incurred in
connection with or arising from (i) any default by Sublessee in the observance
or performance of, or compliance with, any of the terms, covenants or conditions
of this Sublease or the Master Lease on Sublessee's part to be observed,
performed or complied with, (ii) the use or occupancy or manner of use or
occupancy of the Premises by Sublessee or any person claiming through or under
Sublessee or the
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exercise by Sublessee or any person claiming through or under Sublessee of any
rights granted to Sublessee hereunder, including, without limiting the
generality of the foregoing, those rights provided under Article 6 above, (iii)
any acts, omissions or negligence of Sublessee or any person claiming through or
under Sublessee, or the employees, agents, contractors, licensees or invitees of
Sublessee or any such person, in or about the Premises or the Building either
prior to, during, or after the termination of this Sublease or (iv) the
condition of the Premises for which Sublessee is liable. If any action or
proceeding shall be brought against Sublessor or Landlord by reason of any such
claim, Sublessee, upon notice from Sublessor or Landlord, shall resist and
defend such action or proceeding and employ counsel therefor reasonably
satisfactory to Sublessor and Landlord. Sublessee shall pay to Sublessor on
demand all sums which may be owing to Sublessor and Landlord by reason of the
provisions of this subsection. Sublessee's obligations under this subsection
shall survive the Expiration Date or other termination of this Sublease.
12. Time Limits
-----------
12.1. Except with respect to actions to be taken by Sublessee for which
shorter time limits are specifically set forth in this Sublease, which time
limits shall control for the purposes of this Sublease, the time limits provided
in those portions of the Master Lease that are incorporated herein for the
giving or making of any Notice (as hereinafter defined) by the tenant thereunder
to Landlord, the holder of any leasehold mortgage or any other party, or for the
performance of any act, condition or covenant by the tenant thereunder, or for
the exercise of any right, remedy or option by the tenant thereunder, are
changed for the purpose of incorporation into this Sublease, by shortening the
same in each instance by (i) fifteen (15) days with respect to all such periods
of sixty (60) or more days, (ii) seven (7) days with respect to all such periods
of thirty (30) or more days but less than sixty (60) days, (iii) five (5) days
with respect to all such periods of twenty (20) or more but less than thirty
(30) days and (iv) three (3) days with respect to all such periods of less than
twenty (20) days, provided, however, that in no event shall any such period be
shortened to less than five (5) days, so that any Notice may be given or made,
or any act, condition or covenant performed, or option hereunder exercised, by
Sublessor within the time limit relating thereto contained in the Master Lease.
12.2. Except with respect to actions to be taken by Sublessor for which
longer time limits are specifically set forth in this Sublease, which time
limits shall control for the purposes of this Sublease, the time limits provided
in the Master Lease for the giving or making of any Notice by Landlord or the
performance of any act, covenant or condition by Landlord for the exercise of
any right, remedy or option by Landlord thereunder are changed for the purposes
of this Sublease, by lengthening the same in each instance by (i) ten (10) days
with respect to all such periods of sixty (60) or more days (ii) seven (7) days
with respect to all such periods of thirty (30) or more but less than sixty (60)
days, (iii) five (5) days with respect to all such periods of twenty (20) or
more but less than thirty (30) days and (iv) three (3) days with respect to all
such periods of less than twenty (20) days so that any Notice may be given or
made, or any act, condition or
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covenant performed or option hereunder exercised by Landlord within the number
of days respectively set forth above, after the time limits relating thereto
contained in the Master Lease.
13. Remedies Cumulative
-------------------
13.1. Each right and remedy of Sublessor under this Sublease shall be
cumulative and be in addition to every other right and remedy of Sublessor under
this Sublease and now or hereafter existing at law or in equity, by statute or
otherwise.
14. Quiet Enjoyment
---------------
14.1. Sublessor covenants that, as long as Sublessee shall pay the
Fixed Rent and Additional Rent and all other amounts due hereunder and shall
duly observe, perform, and comply with all of the terms, covenants and
conditions of this Sublease on its part to be observed, performed or complied
with, Sublessee shall, subject to all of the terms of the Master Lease and this
Sublease, peaceably have, hold and enjoy the Premises during the Term without
molestation or hindrance by Sublessor, except as otherwise provided in Section
5.2 hereof.
15. Release of Sublessor
--------------------
15.1. The term "Sublessor", as used in this Sublease shall be limited
to mean and include only the owner or owners at the time in question of the
tenant's interest under the Master Lease, and in the event of any transfer or
transfers of the tenant's interest in the Master Lease, Sublessor herein named
(and in case of any subsequent transfer or conveyance, the then transferor of
the tenant's interest in the Master Lease) shall be automatically freed and
relieved from and after the date of such transfer of all liability with respect
to the performance of any covenants or obligations on the part of Sublessor
contained in this Sublease thereafter to be performed.
16. Surrender of Premises
---------------------
16.1. Sublessee shall, no later than the termination of this Sublease
and in accordance with all of the terms of this Sublease and the Master Lease,
vacate and surrender to Sublessor the Premises, together with all Alterations,
in good order, condition and repair, reasonable wear and tear excepted and loss
by fire or other casualty excepted. Sublessee acknowledges that Sublessee shall
be solely responsible for any and all restoration obligations imposed upon the
tenant under the Master Lease. Sublessee's obligation to observe or perform this
covenant shall survive the termination of this Sublease.
16.2. Sublessee expressly waives, for itself and for any person
claiming through or under Sublessee, any rights which Sublessee or any such
person may have under the provisions of Section 2201 of the New York Civil
Practice Law and Rules and any successor law of like import then in force in
connection with any holdover summary
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proceedings which Sublessor may institute to enforce the foregoing provisions of
this Article 16.
17. Estoppel Certificates
---------------------
17.1. At any time and from time to time within ten (10) days after a
written request from Sublessor, Sublessee shall execute, acknowledge and deliver
to the Sublessor a written statement certifying (i) that this Sublease has not
been modified and is in full force and effect or, if there has been a
modification of this Sublease, that this Sublease is in full force and effect as
modified, and stating such modifications, (ii) the dates to which the Fixed
Rent, Additional Rent and other charges hereunder have been paid, (iii) that to
the best of Sublessee's knowledge, no defaults exist under this Sublease or, if
any defaults do exist, specifying the nature of each such default and (iv) as to
such other matters pertaining to the terms of this Sublease as Sublessor may
reasonably request.
18. Security (a) Simultaneously with the later of execution of this
--------
Sublease or its approval by Landlord, Sublessee shall deposit with Sublessor the
sum of FIFTY EIGHT THOUSAND FIFTY EIGHT DOLLARS SIXTY SEVEN CENTS ($58,058.67)
("Security Deposit") as security for the faithful performance and observance by
Sublessee of all of the terms, covenants and conditions of this Sublease on
Sublessee's part to be performed and observed. Sublessor may use, apply or
retain the whole or any part of the Security Deposit or letter of credit to the
extent required for the payment of any Rent and any other sums as to which
Sublessee may be in default hereunder beyond the expiration of applicable grace
and notice periods and for any sum which Sublessor may expend or may be required
to expend by reason of Sublessee's default beyond the expiration of applicable
grace and notice periods in respect of any of the terms, covenants and
conditions of this Sublease, including, without limiting the generality of the
foregoing, any and all damages and deficiencies in the reletting of the
Premises, whether such damages or deficiencies shall accrue before or after
summary proceedings or other re-entry by Sublessor. In the event that Sublessee
shall fully and faithfully comply with all of the terms, provisions, covenants
and conditions of this Sublease, the Security Deposit, or so much thereof as
shall not have been applied by Sublessor as aforesaid, together with accrued
interest thereof, shall be returned to Sublessee promptly following the
Expiration Date or date of earlier termination and delivery of the entire
possession of the Premises to Sublessor. In the event of an assignment by
Sublessor of its interest under the Master Lease, Sublessor shall have the right
to transfer the Security Deposit to the assignee and Sublessor shall thereupon
be released by Sublessee from all liability for the return of such Security
Deposit. In such event, Sublessee shall look solely to its new landlord for the
return of said Security Deposit. The foregoing provisions shall apply to every
transfer or assignment made of the Security Deposit to anew landlord. Sublessee
further covenants that it will not assign or encumber or attempt to assign or
encumber the Security Deposit and that neither Sublessor nor its successors and
assigns shall be bound by any such assignment, encumbrance, attempted assignment
or attempted encumbrance.
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(b) The Security Deposit shall be placed by Sublessor in an interest
bearing account. Interest that accrues thereon shall belong to Sublessee.
Provided Sublessee is not in default hereunder and Sublessee supplies Landlord
with its Tax I.D. Number, interest shall be paid to Sublessee once annually. The
obligation to pay any taxes, whether income or otherwise, related to or
affecting any interest earned on the Security Deposit shall be the sole
responsibility of Sublessee and Sublessee hereby agrees to pay same. Sublessee
represents that its Tax I.D. Number is .
(c) The Security Deposit shall be increased, from time to time, upon
demand by Sublessor, to reflect any increase in Rent (including the increase in
Fixed Rent described by Section 3.1 and any Additional Rent), and to replenish
any amounts that may be drawn against the Security Deposit, so that at all times
during the Term the Security Deposit shall be equal to two months' Rent.
19. Notices
-------
19.1. All notices, consents, approvals or other communications
(collectively, a "Notice") required to be given under this Sublease or pursuant
to law shall be in writing and, unless otherwise required by law, shall be given
by registered or certified mail, return receipt requested, postage prepaid,
addressed:
(a) if to Sublessor, at Sublessor's address set forth in this Sublease
or at such other address as Sublessor may designate by Notice to Sublessee,
(b) if to Sublessee, at the Premises.
Any Notice to the Landlord shall be delivered in accordance with the provisions
of the Master Lease. Except with respect to notices to the Landlord, which shall
be governed by the terms of the Master Lease, either party may designate a new
address to which Notices may be sent by Notice to the other party. Any Notice
given pursuant hereto shall be deemed to have been received at the earlier of
actual receipt or the conclusion of the first business day after the first
attempt at delivery by the United States Postal Service.
20. Landlord's Consent Required
---------------------------
20.1. This Sublease shall be of no force or effect unless and until
Sublessor shall have obtained Landlord's consent to this Sublease.
-16-
21. Broker
------
21.1. Sublessee and Sublessor represent and warrant to each other that
they have not dealt with any broker in connection with this Sublease other than
Millenium Realty Group LLC, and Insignia/ESG, Inc. (the "Brokers") and that no
broker or person other than the Brokers had any part or was instrumental in any
way in bringing about this transaction. Sublessee and Sublessor shall indemnify
and hold each other harmless from and against any and all loss, claims,
liabilities, damages and expenses, including, without limitation, attorneys'
fees and expenses and court costs, arising out of or in connection with any
breach or alleged breach of the above representations or any claim by any person
or entity other than Brokers for brokerage commissions or other compensation in
connection with the consummation of this Sublease. The provisions of this
Article shall survive the expiration or sooner termination of this Sublease. The
parties shall pay the Brokers any brokerage commission due the Brokers pursuant
to separate agreement in connection with this Sublease, if any.
22. Waiver of Rights to Jury and Counterclaim
-----------------------------------------
22.1. Sublessor and Sublessee each hereby waive trial by jury in any
action, proceeding or counterclaim brought by either of the parties against the
other on any matters whatsoever arising out of or in any way connected with this
Sublease, the relationship of Sublessor and Sublessee, Sublessee's use or
occupancy of the Premises, and/or any claim of injury or damage, or for the
enforcement of any remedy under any statute, emergency or otherwise. Sublessor
and Sublessee further agree that in the event Sublessor commences any summary
proceeding for non-payment of Rent, Sublessee will not interpose any
counterclaim of whatever nature or description in any such proceeding.
23. Miscellaneous
-------------
23.1. This Sublease shall be governed by and construed in accordance
with the laws of the State of New York.
23.2. The section headings in this Sublease and the table of contents
are inserted only as a matter of convenience for reference and are not to be
given any effect in construing this Sublease.
23.3. If any of the provisions of this Sublease or the application
thereof to any person or circumstance shall, to any extent, be invalid or
unenforceable, the remainder of this Sublease, or the application of such
provision or provisions to persons or circumstances other than those as to whom
or which it is held invalid or unenforceable, shall not be affected thereby, and
every provision of this Sublease shall be valid and enforceable to the fullest
extent permitted by law.
23.4. All of the terms and provisions of this Sublease shall be binding
upon and inure to the benefit of the parties hereto and, subject to the
provisions of Article 10 hereof, their respective successors and assigns.
23.5. Sublessor has made no representations, warranties or covenants to
or
-17-
with Sublessee with respect to the subject matter of this Sublease except as
expressly provided herein and all prior negotiations and agreements relating
thereto are merged into this Sublease. This Sublease may not be amended or
terminated, in whole or in part, nor may any of the provisions be waived, except
by a written instrument executed by the party against whom enforcement of such
amendment, termination or waiver is sought and unless the same is permitted
under the terms and provisions of the Master Lease.
23.6. Unless specifically provided herein, all capitalized terms used
in this Sublease which are defined in the Master Lease shall be deemed to have
the respective meanings set forth therein.
23.7. The submission by Sublessor to Sublessee of this Sublease in
draft form shall be deemed submitted solely for Sublessee's consideration and
not for acceptance and execution. Such submission shall have no binding force
and effect, shall not constitute an option for the leasing of the Premises, and
shall not confer any rights or impose any obligation upon either party. The
submission by Sublessor of this Sublease for execution by Sublessee and the
actual execution and delivery by Sublessee to Sublessor shall similarly have no
binding force and effect unless and until Sublessor and Sublessee shall have
executed this Sublease and a counterpart thereof shall have been delivered to
Sublessee. In consideration of Sublessor's administrative expense in considering
this Sublease and the terms of Sublessee's proposed tenancy hereunder and other
good and valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, Sublessee's submission to Sublessor of this Sublease, duly
executed by Sublessee, shall constitute an irrevocable offer for the leasing of
the Premises, to continue for ten (10) business days from and after receipt by
Sublessor of this Sublease duly executed by Sublessee.
24. GUARANTY
--------
As a material inducement to the execution of this Sublease by
Sublessor, Sublessee shall obtain a Guaranty of Sublease in the form of Exhibit
24 executed and delivered by each of Innovo Inc., Innovo Azteca Apparel, Inc.,
and Joe's Jeans, Inc. Sublessee will secure and deliver an instrument adhering
to such Guaranty by each entity that who becomes a subsidiary of Sublessee
within twenty days of Sublessee's acquisition (directly or through another under
the control of Sublessee) of a majority shareholder interest in such subsidiary.
IN WITNESS WHEREOF, Sublessor and Sublessee have executed this
Sublease as of the day and year first above written.
(Signature Page to Follow)
-18-
Sublessee's acquisition (directly or through another under the control of
Sublessee) of a majority shareholder interest in such subsidiary.
IN WITNESS WHEREOF, Sublessor and Sublessee have executed this
Sublease as of the day and year first above written.
WRC MEDIA INC.
as Sublessor
By: /s/ Xxxxxxx Xxxx
--------------------------------
Title VP, Finance
INNOVO GROUP INC.
as Sublessee
By: /s/ Xxxxxx X. Xxxxxx
--------------------------------
Title CEO
SCHEDULE 1.2
Workstation (office): 10
Workstation (cubicle): 15
Chair (rolling high back): 6
Chair (rolling low back): 8
Chair (stationary): 23
File cabinet (2 drawers): 2
File cabinet (3 drawers): 2
File cabinet (4 drawers): 4
File cabinet (5 drawers): 1
Leather Sofa: 1
Cloth Sofa: 1
Glass Coffee table: 1
Wood Coffee table: 1
Black Leather Credenza: 1
Round top tables (small): 5
Tall supply cabinet: 1
Conference room table: 2
Conference room chair: 16
Marble Board room table: 1
Leather Board room chair: 14
Book shelf: 1
Free standing desk: 2
Microwave: 1
Dish washer: 1
Refrigerator: 1
Ice maker: 1
Lobby phones (built into wall): 2
-20-
EXHIBIT 24
GUARANTY
The undersigned INNOVO, INC., INNOVO AZTECA APPAREL, INC., and JOE'S
JEANS, INC. (individually and collectively, "Guarantor"), in order to induce WRC
MEDIA INC. ("Sublessor") to enter into that certain Sublease, dated as of
February 2003 with INNOVO GROUP, INC. ("Sublessee") for the entire 23d floor of
the building located at 000 Xxxxxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx (the
"Building"),does hereby, subject to the limitations set forth below, absolutely,
unconditionally and irrevocably guarantee to Sublessor the full and prompt
payment by Sublessee of all amounts due, and the full and prompt performance by
Sublessee of each of its obligations, under the Sublease as the same may be
renewed, extended, amended or modified (the "Sublease"). Terms defined in the
Sublease and not otherwise defined herein shall have the same meaning where used
herein as such terms have in the Sublease.
This Guaranty shall be a continuing guaranty, and liability hereunder
shall in no way be affected or diminished by any renewal, extension, amendment
or modification of the Sublease or any waiver of any of the provisions thereof
(except to the extent agreed to by Sublessor in such renewal, extension,
amendment, modification or waiver). Guarantor hereby waives any notice of
default under the Sublease. Sublessor may exercise its remedies under this
Guaranty without first resorting to any security or any other remedies to
enforce Sublessee's obligations under the Sublease. Guarantor agrees to pay to
Sublessor any reasonable costs and expenses, including without limitation
reasonable attorneys' fees and expenses, incurred in connection with the
collection of any amount due under this Guaranty or the enforcement of this
Guaranty. In addition, Guarantor waives (a) trial by jury in any action brought
by Sublessor arising under the terms of this Guaranty; (b) any defense based
upon any legal disability or other defense of Sublessee, any other guarantor or
other person, or by reason of the cessation or limitation of the liability of
Sublessee from any cause other than full payment of all sums payable under or in
respect of the Sublease; (c) any defense based upon any lack of authority of the
officers, directors, partners, members or agents acting or purporting to act on
behalf of Sublessee or any principal of Sublessee or any defect in the formation
of Sublessee or any partner or member in Sublessee; (d) any and all rights and
defenses arising out of an election of remedies by Sublessor, even though that
election of remedies might impair or destroy any right, if any, of Guarantor of
subrogation, indemnity or reimbursement against Sublessee; (e) any defense based
upon Sublessor's failure to disclose to Guarantor any information concerning
Sublessee's financial condition or any other circumstances bearing on
Sublessee's ability to pay all sums payable under or in respect of the Sublease;
(f) any defense based upon any statute or rule of law which provides that the
obligation of a surety must be neither larger in
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amount nor in any other respects more burdensome than that of a principal; (g)
any defense based upon Sublessor's election in any proceeding instituted under
11 U.S.C. Section 101 et seq., or any successor statute (the "Bankruptcy Code");
(h) any right of subrogation, indemnity or reimbursement against Sublessee, any
right to enforce any remedy which Sublessor may have against Sublessee and any
right to participate in, or benefit from, any security for the Sublease now or
hereafter held by Sublessor; (i) presentment, demand, protest, notice of
dishonor and notice of limitations affecting the liability of Guarantor
hereunder or the enforcement hereof or the liability of Sublessee under the
Sublease or the enforcement thereof, and (k) any right or claim of right to
cause a marshaling of Sublessee's or Guarantor's assets. Guarantor further
agrees that the payment of all sums payable under the Sublease or in respect
thereof or any other act which toils any statute of limitations applicable to
the Sublease shall similarly operate to toll the statute of limitations
applicable to Guarantor's liability hereunder. Subject to the last paragraph
hereof, this Guaranty shall be binding upon and shall inure to the benefit of
the successors and assigns of each Guarantor and Sublessor.
Guarantor further agrees that if Sublessee becomes insolvent or shall
be adjudicated a bankrupt or shall file for reorganization or similar relief or
if such petition is filed by creditors of Sublessee under any present or future
Federal or State law, Guarantor's obligations hereunder may nevertheless be
enforced against the Guarantor. The rejection or termination of the Sublease
pursuant to the exercise of any rights of a trustee or receiver in any of the
foregoing proceedings shall not affect Guarantor's obligation hereunder or
create in Guarantor any setoff against such obligation. Neither Guarantor's
obligation under this Guarantee nor any remedy for enforcement thereof, shall be
impaired, modified, or limited in any manner whatsoever by any impairment,
rejection, modification, waiver or discharge resulting from the operation of any
present or future operation of any present or future provision under the
Bankruptcy Code or any other statute or decision of any court.
Subject to the last paragraph hereof this Guaranty may not be changed,
terminated modified or waived orally, but only in writing signed by Sublessor
and the Guarantor with respect to whom such change, termination, modification or
waiver is to be effective if this Guaranty is signed by more than one person the
obligations hereunder shall be joint and several. This Guaranty shall be
effective as and against each Guarantor notwithstanding that any other Guarantor
named herein has failed to execute, this Guaranty. This Guaranty shall remain
and continue in full force and effect notwithstanding, and the liability of
Guarantor hereunder shall in no way be affected, modified, diminished or
extinguished by reason of (x) any bankruptcy, insolvency, reorganization,
arrangement, assignment for the benefit of creditors, receivership or
trusteeship or other similar action or proceeding affecting Sublessee whether or
not notice of any of the foregoing is given to Guarantor or (y) any increase,
decrease, amendment, extension, release, modification or change in the
obligations of Sublessee under the Sublease, any assignment of or subletting
under the Sublease, or
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any waiver or forbearance by Landlord under the Sublease or (z) any change in
Guarantor's relationship to or interest in Sublessee. No payment by Guarantor
hereunder shall entitle Guarantor to be subrogated to any right of Sublessor.
This Guaranty shall be deemed to have been made and fully performed in
the State of New York, irrespective of the domicile or residence of any
Guarantor. The rights and liabilities of Sublessor and Guarantor shall be
determined in accordance with the laws of the State of New York. Guarantor
hereby consents to the jurisdiction of the federal and state courts sitting in
the County and State of New York, in connection with any action or proceeding
related to this Guaranty; and Guarantor agrees that the appropriate venue for
any such action would lie in such courts. Guarantor consents to service of
process upon it by registered or certified mail, return receipt requested, or by
receipted overnight courier addressed to Guarantor at the addresses set forth
below, which service shall be effective upon the earlier of receipt or the first
business day following the first attempt at delivery by the United States Postal
Service or such courier. This Guaranty shall be limited in the following
respects:
(i) Guarantor shall have no liability or obligations under this
Guaranty unless and until there is a default in the payment of any amount due
under the Sublease (such default being hereinafter referred to as the
"triggering event");
(ii) This Guaranty is a guaranty of the full and prompt (a) payment of
(1) all amounts due under the Sublease which arise or accrue from and after the
date the triggering event occurs until such date as Sublessee vacates and
surrenders to Sublessor the Demised Premises, or Sublessor otherwise cedes sole
and exclusive occupancy and possession of the Demised Premises, vacant, broom
clean, in good order and condition except for ordinary wear and tear and damage
for which Sublessee is not responsible under the terms of the Sublease, and
otherwise in the condition required under the Sublease at the date the Demised
Premises are returned by Sublessee to Sublessor (the "Required Condition"); and
(iii) No recovery shall be available under this Guaranty until
Sublessor shall have applied the proceeds, if any are available, of any security
deposit delivered by Sublessee
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to Sublessor in lieu thereof) and shall have applied such proceeds to any unpaid
liabilities of Sublessee under the Sublease.
IN WITNESS WHEREOF, the undersigned have executed this Guaranty.
Dated: As of July 28, 2003
INNOVO, INC.:
By: /s/ Xxxxxx X. Xxxxxx Fed. I.D. No.: 00-0000000
-------------------------------- --------------------------
INNOVO AZTECA APPAREL, INC.:
By: /s/ Xxxxxx X. Xxxxxx Fed. I.D. No.: 00-0000000
-------------------------------- --------------------------
JOE'S JEANS, INC.:
By: /s/ Xxxxxx X. Xxxxxx Fed. I.D. No.: 00-0000000
-------------------------------- --------------------------
