GUARANTEE
THIS GUARANTEE (this "Guaranty") is made as of May 25,
2004 by Innovo Group Inc., a Delaware corporation with
offices at 0000 Xxxx Xxxxxxx Xxxxxx, Xxxxxxxx, Xxxxxxxxxx
00000 (the "Guarantor") to and in favor of Blondie
Rockwell, Inc., a Pennsylvania corporation, with offices c/o
Erving Wonder/Sanctuary, 0000 Xxxxxx Xxxx., Xxxxx 000, Xxx
Xxxxxxx, XX 00000 (the "Blondie"). All capitalized terms
used but not otherwise defined herein shall have the meaning
ascribed to such terms in the Settlement Agreement (as
defined below).
WITNESSETH
WHEREAS, Blondie and Innovo Azteca Apparel, Inc., a
California corporation ( "IAA") are entering into that
certain Settlement Agreement dated as of the date hereof (as
it may be amended, restated, supplemented or otherwise
modified from time to time, the "Settlement Agreement"); and
WHEREAS, it is a condition to the closing of the
transactions contemplated in the Settlement Agreement that
Guarantor shall have executed and delivered this Guaranty to
Blondie;
WHEREAS, Guarantor is affiliated with IAA and
acknowledges that the transactions provided by the
Settlement Agreement and resulting in IAA's Liabilities are
in the best interests of Guarantor.
NOW THEREFORE, in consideration of the premises, the
covenants herein contained and other good and valuable
consideration, the receipt and sufficiency of which are
hereby acknowledged, Guarantor hereby agrees as follows:
1. Guarantor hereby unconditionally and irrevocably,
guarantees to Blondie the payment in full (and not merely
the collection of) and performance of all IAA's Liabilities
(as defined below). For all purposes of this Guaranty,
"IAA's Liabilities" means IAA's prompt payment in full, when
due or declared due and at all such times, of all payments
due and payable by IAA or which may arise from time to time
pursuant to and in accordance with the terms of (a) Sections
1, 5.2, 12 and 13 of the Settlement Agreement and (b) IAA's
obligation to indemnify Blondie pursuant to Section 23 of
the Settlement Agreement, but only for Blondie's liabilities
to third parties (other than wholly owned affiliates of
Blondie).
2. The obligations of Guarantor under this Guaranty
shall be absolute and unconditional, irrespective of the
genuineness, validity, regularity or enforceability of the
Settlement Agreement or any provision therein or any other
circumstances which might otherwise constitute a legal or
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equitable discharge of a surety of Guarantor. This Guaranty
and the obligations of the Guarantors hereunder shall not be
affected, impaired or released by reason of bankruptcy or
insolvency of IAA or any of its affiliates or any affiliate
of Guarantor.
3. The liability of the Guarantor hereunder shall in
no way be affected by (a) the release or discharge of IAA in
any creditors' receivership, bankruptcy or other
proceedings, (b) the impairment, limitation or modification
of the liability of IAA or the estate of IAA in bankruptcy,
or of any remedy for the enforcement of IAA's said liability
under the Settlement Agreement, resulting from the operation
of any present or future provision of the National
Bankruptcy Act or other statute or from the decision in any
court; (c) the rejection or disaffirmance of the Settlement
Agreement in any such proceedings; (d) except as expressly
provided herein, the assignment or transfer of the
Settlement Agreement by IAA; (e) any disability or other
defense of IAA, or (f) the cessation from any cause
whatsoever of the liability of IAA.
4. Notwithstanding anything to the contrary herein,
the liability of Guarantor under this Guaranty shall be
primary, direct and immediate, and not conditional or
contingent upon pursuit by Blondie of any remedies it may
have against IAA and/or any other party, with respect to the
Guaranty or the Settlement Agreement, whether pursuant to
the terms thereof, by law or pursuant to any other security
agreement or guaranty. Without limiting the generality of
the foregoing, Blondie shall not be required to make any
demand on IAA, and/or any other party, or otherwise pursue
or exhaust its remedies against IAA, before, simultaneously
with or after enforcing its rights and remedies hereunder
against Guarantor. Any one or more successive and/or
concurrent actions may be brought hereon against the
Guarantor either in the same action or proceeding, if any,
brought against IAA, and/or any other party, or in separate
actions, as often as Blondie, in its sole direction, may
deem advisable.
5. Guarantor hereby expressly waives: (i) presentment
and demand for payment and protest of nonpayment; (ii)
notices of acceptance of this Guaranty and of presentment,
demand and protest; (iii) except as otherwise expressly
provided herein notice of any default hereunder or under the
Settlement Agreement, and of all indulgences under any of
them; (iv) demand for observance, performance or enforcement
of any terms and provisions of this Guaranty or the
Settlement Agreement; and (v) all other notices and demands
otherwise required by law which Guarantor may lawfully
waive. Guarantor also waives, but only if and to the extent
that Guarantor may lawfully do so, trial by jury in any
action brought on or with respect to this Guaranty. In the
event that an attempt shall be made to enforce this Guaranty
by suit or otherwise, the non-prevailing party shall
reimburse the prevailing party, upon demand, for all
expenses incurred in connection therewith, including,
without limitation, reasonable attorney's fees and
disbursements.
6. The undersigned agrees to pay, or cause to be
paid, any and all of the aforesaid amounts strictly in
accordance with the provisions of this Guaranty and the
Settlement Agreement, regardless of any law, regulation or
decree now or hereafter in effect which might in any manner
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affect any such provision or any rights thereunder of
Blondie, or cause or permit to be invoked any alteration of
time, amount, currency or manner of payment of any and all
obligations to pay money hereby guaranteed.
7. If Guarantor shall advance any sums to Blondie, or
if Blondie shall be or shall hereafter become indebted to
Guarantor, such sums and indebtedness shall be subordinate
in all respects to the amounts then or thereafter due and
owing to Blondie under this Guaranty and the Settlement
Agreement and as such amounts become due and payable.
Nothing herein contained shall be construed to give
Guarantor any right of subrogation in and to Blondie's
rights under or interest in the Settlement Agreement.
8. No delay on the part of Blondie in exercising any
rights hereunder or failure to exercise the same shall
operate as a waiver of such rights; no notice to or demand
on the undersigned shall be deemed to be a waiver of the
obligations of the undersigned or of the right of Blondie to
take further action without notice or demand as provided
herein; nor in any event shall any modification or waiver of
the provisions of this Guaranty be effective unless in
writing, nor shall any such waiver be applicable except in
the specific instance for which given.
9. Guarantor hereby represents and warrants that (a)
Guarantor has power to enter into and perform this Guaranty;
(b) neither this Guaranty, the execution, delivery and
performance hereof, the performance of the agreements herein
contained nor the consummation of the transactions herein
contemplated will violate any statute, ordinance,
regulation, court order or decree or order or decree of any
other governmental authority or agency or any other
agreement or instrument to which Guarantor is subject, and
(c) this Guaranty constitutes a valid and binding obligation
of Guarantor enforceable against Guarantor in accordance
with its terms.
10. The Guarantor hereby consents to submit to the
jurisdiction of the court located in the State of New York,
County of New York for the adjudication of any dispute, and
further agrees that any process of such Court in connection
with adjudication of such dispute may be served by
registered or certified mail upon the Guarantor and that
such service shall be of the same force and effect as if
such process had been personally served upon the Guarantor.
11. All notices to be given hereunder shall be deemed
sufficiently served for all purposes hereunder if sent to
the respective parties, at their respective addresses
provided for herein, by personal delivery, overnight mail or
by certified mail return receipt requested.
12. This Guaranty shall inure to the benefit of and be
enforceable by Blondie and its successors and assigns and
shall be binding upon, and enforceable against, Guarantor,
its successors and permitted assigns. Guarantor shall not
have the right to assign this Guaranty in any manner without
the prior written consent of Blondie.
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13. This Guaranty shall be governed and construed in
accordance with the laws of the State of New York applicable
to agreements made and to be performed entirely within such
state.
14. This Guaranty may be executed in one or more
counterparts, each of which shall be deemed an original, and
all of which together shall be deemed to be one and the same
instrument. Facsimile copies of counterpart signature pages
shall be deemed original counterpart pages for all purposes
hereunder.
[remainder of page intentionally left blank, signature
page to follow]
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IN WITNESS WHEREOF, Guarantor has duly executed this
Guaranty as of the day and year first above written.
GUARANTOR:
INNOVO GROUP INC.
By: /s/ Xxxxxx X. Xxxxxx, Xx.
--------------------------
Name: Xxxxxx X. Xxxxxx, Xx.
Title: CEO
BLONDIE:
BLONDIE ROCKWELL, INC.
By: /s/ Xxxx Xxxxxx
----------------
Name: Xxxx Xxxxxx
Title: Authorized Signatory
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