CONTINUING GUARANTY: DELIA*S CORP.



 




Exhibit 10.3.1



CONTINUING GUARANTY



(Business Organization)




Pennsylvania




	 	 	 
	
	
	
	


	
    
    GUARANTOR:
    

    	 	
    dELiA*s CORP.,
    ax  corporationo  general
    partnershipo  limited
    partnershipo  limited
    liability
    companyo                organized
    under the laws of the State of Delaware. Chief executive office/
    principal residence: 435 Hudson Street, New York, New
    York 10014.
    
	 
	
	
	
	


	
    
    BORROWER:
    

    	 	
    dELiA*s DISTRIBUTION
    COMPANY,
    ax  corporationo  general
    partnershipo  limited
    partnershipo  limited
    liability
    companyo                ,
    organized under the laws of the State of Delaware. Chief
    executive office/ principal residence: 435 Hudson Street,
    New York, New York 10014.
    
	 
	
	
	
	


	
    
    BANK:
    

    	 	
    Manufacturers and Traders Trust
    Company, a New York banking
    corporation, with banking offices located at One
    M&T Plaza, Buffalo, New York 14240 Attention:
    Office of the General Counsel.
    




     
1. Guaranty.


     
(a) Guarantor, intending to be legally bound, hereby
unconditionally guarantees the full and prompt payment and
performance of any and all of Borrower’s Obligations (as
defined below) to the Bank when due, whether at stated maturity,
by acceleration or otherwise. As used in this Guaranty, the term
“Obligations” shall mean any and all obligations,
indebtedness and other liabilities of Borrower to the Bank now
or hereafter existing, of every kind and nature and all accrued
and unpaid interest thereon and all Expenses (as defined below)
including without limitation, whether such obligations,
indebtedness and other liabilities (i) are direct,
contingent, liquidated, unliquidated, secured, unsecured,
matured or unmatured; (ii) are pursuant to a guaranty or
surety in favor of the Bank; (iii) were originally
contracted with the Bank or with another party (including
obligations under a guaranty or surety originally in favor of
such other party); (iv) are contracted by Borrower alone or
jointly with one or more other parties; (v) are or are not
evidenced by a writing; (vi) are renewed, replaced,
modified or extended; and (vii) are periodically
extinguished and subsequently reincurred or reduced and
thereafter increased. Guarantor will pay or perform its
obligations under this Guaranty upon demand. This Guaranty is
and is intended to be a continuing guaranty of payment (not
collection) of the Obligations (irrespective of the aggregate
amount thereof and whether or not the Obligations from time to
time exceeds the amount of this Guaranty, if limited),
independent of, in addition and without modification to, and
does not impair or in any way affect, any other guaranty,
indorsement, or other agreement in connection with the
Obligations, or in connection with any other indebtedness or
liability to the Bank or collateral held by the Bank therefor or
with respect thereto, whether or not furnished by Guarantor.
Guarantor understands that the Bank can bring an action under
this Guaranty without being required to exhaust other remedies
or demand payment first from other parties.


     
(b) Guarantor acknowledges the receipt of valuable
consideration for this Guaranty and acknowledges that the Bank
is relying on this Guaranty in making a financial accommodation
to Borrower, whether a commitment to lend, extension,
modification or replacement of, or forbearance with respect to,
any Obligation, cancellation of another guaranty, purchase of
Borrower’s assets, or other valuable consideration.


     
2. Continuing, Absolute, Unconditional. This
Guaranty is irrevocable, absolute, continuing, unconditional and
general without any limitation.


     
3. Guarantor’s Waivers &
Authorizations.


     
(a) Guarantor’s obligations shall not be released,
impaired or affected in any way including by any of the
following, all of which Guarantor hereby waives (i) any
bankruptcy, reorganization or insolvency under any law of
Borrower or that of any other party, or by any action of a
trustee in any such proceeding; (ii) any new agreements or
obligations of Borrower or any other party with the Bank;
(iii) any adjustment, compromise or










 




release of any Obligations of Borrower, by the Bank or any other
party; the existence or nonexistence or order of any filings,
exchanges, releases, impairment or sale of, or failure to
perfect or continue the perfection of a security interest in any
collateral for the Obligations; (iv) any failure of
Guarantor to receive notice of any intended disposition of such
collateral; (v) any fictitiousness, incorrectness,
invalidity or unenforceability, for any reason, of any
instrument or other agreement which may evidence any Obligation;
(vi) any composition, extension, stay or other statutory
relief granted to Borrower including, without limitation, the
expiration of the period of any statute of limitations with
respect to any lawsuit or other legal proceeding against
Borrower or any person in any way related to the Obligations or
a part thereof or any collateral therefor; (vii) any change
in form of organization, name, membership or ownership of
Borrower or Guarantor; (viii) any refusal or failure of the
Bank or any other person prior to the date hereof or hereafter
to grant any additional loan or other credit accommodation to
Borrower or the Bank’s or any other party’s receipt of
notice of such refusal or failure; (ix) any setoff, defense
or counterclaim of Borrower with respect to the obligations or
otherwise arising, either directly or indirectly, in regard to
the Obligations; or (x) any other circumstance that might
otherwise constitute a legal or equitable defense to
Guarantor’s obligations under this Guaranty.



     
(b) The Guarantor waives acceptance, assent and all rights
of notice or demand including without limitation (i) notice
of acceptance of this Guaranty, of Borrower’s default or
nonpayment of any Obligation, and of changes in Borrower’s
financial condition; (ii) presentment, protest, notice of
protest and demand for payment; (iii) notice that any
Obligations has been incurred or of the reliance by the Bank
upon this Guaranty; and (iv) any other notice, demand or
condition to which Guarantor might otherwise be entitled prior
to the Bank’s reliance on or enforcement of this Guaranty.
Guarantor further authorizes the Bank, without notice, demand or
additional reservation of rights against Guarantor and without
affecting Guarantor’s obligations hereunder, from time to
time: (i) to renew, refinance, modify, subordinate, extend,
increase, accelerate, or otherwise change the time for payment
of, the terms of or the interest on the Obligations or any part
thereof; (ii) to accept and hold collateral from any party
for the payment of any or all of the Obligations, and to
exchange, enforce or refrain from enforcing, or release any or
all of such collateral; (iii) to accept any indorsement or
guaranty of any or all of the Obligations or any negotiable
instrument or other writing intended to create an accord and
satisfaction with respect to any or all of the Obligations;
(iv) to release, replace or modify the obligation of any
indorser or guarantor, or any party who has given any collateral
for any of all of the Obligations, or any other party in any way
obligated to pay any or all of the Obligations, and to enforce
or refrain from enforcing, or compromise or modify, the terms of
any obligation of any such indorser, guarantor or party;
(v) to dispose of any and all collateral securing the
Obligations in any manner as the Bank, in its sole discretion,
may deem appropriate, and to direct the order and the
enforcement of any and all indorsements and guaranties relating
to the Obligations in the Bank’s sole discretion; and
(vi) to determine the manner, amount and time of
application of payments and credits, if any, to be made on all
or any part of the Obligations including, without limitation, if
this Guaranty is limited in amount, to make any such application
to Obligations, if any, in excess of the amount of this Guaranty.


     
(c) Notwithstanding any other provision in this Guaranty,
Guarantor irrevocably waives, without notice, any right he or
she may have at law or in equity (including without limitation
any law subrogating Guarantor to the rights of the Bank) to seek
contribution, indemnification or any other form of reimbursement
from Borrower or any other obligor or guarantor of the
Obligations for any disbursement made under this Guaranty or
otherwise.


     
4. Termination. This Guaranty shall remain in full
force and effect as to each Guarantor until actual receipt by
the Bank officer responsible for Borrower’s relationship
with the Bank of written notice of Guarantor’s intent to
terminate (or Guarantor’s death or incapacity) plus the
lapse of a reasonable time for the Bank to act on such notice
(the “Receipt of Notice”); provided, however, this
Guaranty shall remain in full force and effect thereafter until
all Obligations outstanding, or contracted or committed for
(whether or not outstanding), before such Receipt of Notice by
the Bank, and any extensions, renewals or replacements thereof
(whether made before or after such Receipt of Notice), together
with interest accruing thereon after such Receipt of Notice,
shall be finally and irrevocably paid in full. Discontinuance of
this Guaranty as to one Guarantor shall not operate as a
discontinuance hereof as to any other guarantor. Payment of all
of the Obligations from time to time shall not operate as a
discontinuance of this Guaranty, unless a Receipt of


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Notice as provided above has been received by the Bank.
Guarantor agrees that, to the extent that Borrower makes a
payment or payments to the Bank on the Obligations, or the Bank
receives any proceeds of collateral to be applied to the
Obligations, which payment or payments or any part thereof are
subsequently invalidated, declared to be fraudulent or
preferential, set aside or otherwise are required to be repaid
to Borrower, its estate, trustee, receiver or any other party,
including, without limitation, under any bankruptcy law, state
or federal law, common law or equitable cause, then to the
extent of such repayment, the obligation or part thereof which
has been paid, reduced or satisfied by such amount shall be
reinstated and continued in full force and effect as of the date
such initial payment, reduction or satisfaction occurred,
notwithstanding any contrary action which may have been taken by
the Bank in reliance upon such payment or payments. As of the
date any payment or proceeds of collateral are returned, the
statute of limitations shall start anew with respect to any
action or proceeding by the Bank against Guarantor under this
Guaranty. Likewise, any acknowledgment, reaffirmation or
payment, by Borrower or any third party, of any portion of the
Obligations, shall be deemed to be made as agent for the
Guarantor, strictly for the purposes of tolling the running of
(and/or preventing the operation of) the applicable statute of
limitations with respect to any action or proceeding by the Bank
against Guarantor under this Guaranty.



     
5. Expenses. Guarantor agrees to reimburse the Bank
on demand for all the Bank’s expenses, damages and losses
of any kind or nature, including without limitation costs of
collection and actual attorneys’ fees and disbursements
whether for internal or external counsel incurred by the Bank in
attempting to enforce this Guaranty, collect any of the
Obligations including any workout or bankruptcy proceedings or
other legal proceedings or appeal, realize on any collateral,
defense of any action under the prior paragraph or for any other
purpose related to the Obligations (collectively,
“Expenses”). Expenses will accrue interest at the
highest default rate in any instrument evidencing the
Obligations until payment is actually received by the Bank.


     
6. Financial and Other Information. Guarantor shall
promptly deliver to the Bank copies of all annual reports, proxy
statements and similar information distributed to shareholders,
partners or members and of all filings with the Securities and
Exchange Commission and the Pension Benefit Guaranty Corporation
and shall provide in form satisfactory to the Bank:
(i) within sixty days after the end of each of its first
three fiscal quarters, consolidating and consolidated statements
of income and cash flows for the quarter, for the corresponding
quarter in the previous fiscal year and for the period from the
end of the previous fiscal year, with a consolidating and
consolidated balance sheet as of the quarter end; and
(ii) within ninety days after the end of each fiscal year,
consolidating and consolidated statements of Guarantor’s
income and cash flows and its consolidating and consolidated
balance sheet as of the end of such fiscal year, setting forth
comparative figures for the preceding fiscal year and to be:


 


			
	                                        x  audited	o  reviewed	o  compiled                                        




by KMPG or another nationally recognized firm of certified
public accountants or by an independent certified public
accountant acceptable to the Bank; all such statements shall be
certified by Guarantor’s chief financial officer or partner
to be correct, not misleading and in accordance with
Guarantor’s records and to present fairly the results of
Guarantor’s operations and cash flows and if annual its
financial position at year end in conformity with generally
accepted accounting principles. If no box is checked, Guarantor
shall deliver financial statements and information in the form
and at the times satisfactory to the Bank. Guarantor represents
that its assets are not subject to any liens, encumbrances or
contingent liabilities except as fully disclosed to the Bank in
such statements. Guarantor authorizes the Bank from time to time
to obtain, verify and review all financial data deemed
appropriate by the Bank in connection with this Guaranty and the
Obligations, including without limitation credit reports from
agencies. Guarantor understands this Guaranty and has satisfied
itself as to its meaning and consequences and acknowledges that
it has made its own arrangements for keeping informed of changes
or potential changes affecting the Borrower including the
Borrower’s financial condition.


     
7. Security; Right of Setoff. As further security
for payment of the Obligations, Expenses and any other
obligations of Guarantor to the Bank, Guarantor hereby grants to
the Bank a security interest in all money, securities and other
property of Guarantor in the actual or constructive possession
or control of the Bank or its


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affiliates including without limitation all deposits and other
accounts owing at any time by the Bank or any of its affiliates
in any capacity to Guarantor in any capacity (collectively,
“Property”). The Bank shall have the right to set off
Guarantor’s Property against any of Guarantor’s
obligations to the Bank. Such set-off shall be deemed to have
been exercised immediately at the time the Bank or such
affiliate elect to do so. The Bank shall also have all of the
rights and remedies of a secured party under the Uniform
Commercial Code, as the same may be in effect in the
Commonwealth of Pennsylvania, as amended from time to time, in
addition to those under this Guaranty and other applicable law
and agreements.



     
8. No Transfer of Assets. Guarantor shall not
transfer, reinvest or otherwise dispose of its assets in a
manner or to an extent that would or might impair
Guarantor’s ability to perform its obligations under this
Guaranty.


     
9. Nonwaiver by the Bank; Miscellaneous. This
Guaranty is intended by Guarantor to be the final, complete and
exclusive expression of the agreement between Guarantor and the
Bank. This Guaranty may be assigned by the Bank, shall inure to
the benefit of the Bank and its successors and assigns, and
shall be binding upon Guarantor and his or her legal
representative, successors and assigns and any participation may
be granted by the Bank herein in connection with the assignment
or granting of a participation by the Bank in the Obligations or
any part thereof. All rights and remedies of the Bank are
cumulative, and no such right or remedy shall be exclusive of
any other right or remedy. This Guaranty does not supersede any
other guaranty or security granted to the Bank by Guarantor or
others (except as to Guarantor’s Waiver of Subrogation
rights above). No single, partial or delayed exercise by the
Bank of any right or remedy shall preclude exercise by the Bank
at any time at its sole option of the same or any other right or
remedy of the Bank without notice. Guarantor expressly disclaims
any reliance on any course of dealing or usage of trade or oral
representation of the Bank including, without limitation,
representations to make loans to Borrower or enter into any
other agreement with Borrower or Guarantor. No course of dealing
or other conduct, no oral agreement or representation made by
the Bank or usage of trade shall operate as a waiver of any
right or remedy of the Bank. No waiver or amendment of any right
or remedy of the Bank or release by the Bank shall be effective
unless made specifically in writing by the Bank. Each provision
of this Guaranty shall be interpreted as consistent with
existing law and shall be deemed amended to the extent necessary
to comply with any conflicting law. If any provision
nevertheless is held invalid, the other provisions shall remain
in effect. Guarantor agrees that in any legal proceeding, a copy
of this Guaranty kept in the Bank’s course of business may
be admitted into evidence as an original. Captions are solely
for convenience and not part of the substance of this Guaranty.
If this Guaranty is limited pursuant to Paragraph 2 hereof,
until the Obligations are indefeasibly paid in full, the
Guaranteed Amount shall not be reduced in any manner whatsoever
by any amounts which the Bank may realize before or after
maturity of the Obligations (by acceleration, demand or
otherwise), as a result of payments made by or on behalf of
Borrower or by or on behalf of any other person or entity other
than Guarantor primarily or secondarily liable for the
Obligations or any part thereof, or otherwise credited to
Borrower or such person or entity, or as a result of the
exercise of the Bank’s rights with respect to any
collateral for the Obligations or any part thereof. Payments
made to the Bank by Guarantor (other than, directly or
indirectly, from collateral or other persons or entities liable
for any portion of the Obligations) after maturity of the
Obligations, by acceleration or otherwise, shall reduce the
Guaranteed Amount.


     
10. Joint and Several. If there is more than one
Guarantor, each Guarantor jointly and severally guarantees the
payment and performance in full of all obligations under this
Guaranty and the term “Guarantor” means each as well
as all of them. Guarantor also agrees that the Bank need not
seek payment from any source other than the undersigned
Guarantor. This Guaranty is a primary obligation.
Guarantor’s obligations hereunder are separate and
independent of Borrower’s, and a separate action may be
brought against Guarantor whether or not action is brought or
joined against or with Borrower or any other party.


     
11. Authorization. Guarantor certifies that it is an
entity in the form described above duly organized and in good
standing under the laws of the State of its organization and
duly authorized to do business in each State material to the
conduct of its business. Guarantor has determined that the
execution of this Guaranty will be in its best interests, to its
direct benefit, incidental to its powers, and in furtherance of
its duly acknowledged purposes and objectives. Execution of this
Guaranty by the persons signing below has been authorized by all
necessary corporate action, including directors’ consent or
(as appropriate) is authorized by


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its partnership agreement or governing instrument.
Guarantor’s chief executive office is located at the above
address.



     
12. Notices. Any demand or notice hereunder or under
any applicable law pertaining hereto shall be in writing and
duly given if delivered to Guarantor (at its address on the
Bank’s records) or to the Bank (at the address on page one
and separately to the Bank officer responsible for
Borrower’s relationship with the Bank). Such notice or
demand shall be deemed sufficiently given for all purposes when
delivered (i) by personal delivery and shall be deemed
effective when delivered, or (ii) by mail or courier and
shall be deemed effective three (3) business days after
deposit in an official depository maintained by the United
States Post Office for the collection of mail or one
(1) business day after delivery to a nationally recognized
overnight courier service (e.g., Federal Express). Notice
by e-mail is not valid notice under this or any other agreement
between Guarantor and the Bank.


     
13. Governing Law and Jurisdiction. This Guaranty
has been delivered to and accepted by the Bank and will be
deemed to be made in the Commonwealth of Pennsylvania. Except as
otherwise provided under federal law, this Guaranty will be
interpreted in accordance with the laws of the Commonwealth of
Pennsylvania excluding its conflict of laws rules. GUARANTOR
HEREBY IRREVOCABLY CONSENTS TO THE EXCLUSIVE JURISDICTION OF ANY
STATE OR FEDERAL COURT IN THE COMMONWEALTH OF PENNSYLVANIA IN A
COUNTY OR JUDICIAL DISTRICT WHERE THE BANK MAINTAINS A BRANCH
AND CONSENTS THAT THE BANK MAY EFFECT ANY SERVICE OF PROCESS IN
THE MANNER AND AT GUARANTOR’S ADDRESS SET FORTH ABOVE FOR
PROVIDING NOTICE OR DEMAND; PROVIDED THAT NOTHING CONTAINED IN
THIS GUARANTY WILL PREVENT THE BANK FROM BRINGING ANY ACTION,
ENFORCING ANY AWARD OR JUDGMENT OR EXERCISING ANY RIGHTS AGAINST
GUARANTOR INDIVIDUALLY, AGAINST ANY SECURITY OR AGAINST ANY
PROPERTY OF GUARANTOR WITHIN ANY OTHER COUNTY, STATE OR OTHER
FOREIGN OR DOMESTIC JURISDICTION. Guarantor acknowledges and
agrees that the venue provided above is the most convenient
forum for both the Bank and Guarantor. Guarantor waives any
objection to venue and any objection based on a more convenient
forum in any action instituted under this Guaranty.


     
14. Waiver of Jury Trial. GUARANTOR AND THE BANK
HEREBY KNOWINGLY, VOLUNTARILY, AND INTENTIONALLY WAIVE ANY RIGHT
TO TRIAL BY JURY GUARANTOR AND THE BANK MAY HAVE IN ANY ACTION
OR PROCEEDING, IN LAW OR IN EQUITY, IN CONNECTION WITH THIS
GUARANTY OR THE TRANSACTIONS RELATED HERETO. GUARANTOR
REPRESENTS AND WARRANTS THAT NO REPRESENTATIVE OR AGENT OF THE
BANK HAS REPRESENTED, EXPRESSLY OR OTHERWISE, THAT THE BANK WILL
NOT, IN THE EVENT OF LITIGATION, SEEK TO ENFORCE THIS JURY TRIAL
WAIVER. GUARANTOR ACKNOWLEDGES THAT THE BANK HAS BEEN INDUCED TO
ENTER INTO THIS GUARANTY BY, AMONG OTHER THINGS, THE PROVISIONS
OF THIS SECTION.


     
15. Power to Confess Judgment. FOLLOWING THE
OCCURRENCE AND DURING THE CONTINUANCE OF AN EVENT OF DEFAULT,
GUARANTOR HEREBY EMPOWERS ANY ATTORNEY OF ANY COURT OF RECORD TO
APPEAR FOR GUARANTOR AND, WITH OR WITHOUT COMPLAINT FILED,
CONFESS JUDGMENT, OR A SERIES OF JUDGMENTS, AGAINST GUARANTOR IN
FAVOR OF THE BANK OR ANY HOLDER HEREOF FOR ALL AMOUNTS DUE
HEREUNDER, TOGETHER WITH COSTS OF SUIT AND A REASONABLE
ATTORNEY’S FEE, AND FOR DOING SO THIS GUARANTY OR A COPY
VERIFIED BY AFFIDAVIT SHALL BE A SUFFICIENT WARRANT. GUARANTOR
HEREBY FOREVER WAIVES AND RELEASES ALL PROCEDURAL ERRORS IN SAID
PROCEEDINGS AND ALL RELIEF FROM ANY AND ALL APPRAISEMENT, STAY
OR EXEMPTION LAWS OF ANY STATE NOW IN FORCE OR HEREAFTER
ENACTED. INTEREST ON ANY SUCH JUDGMENT SHALL ACCRUE AT THE
DEFAULT RATE SET FORTH IN ANY OF THE DOCUMENTS EVIDENCING THE
OBLIGATIONS OF BORROWER. NO SINGLE EXERCISE OF THE FOREGOING
POWER TO CONFESS JUDGMENT, OR A SERIES OF JUDGMENTS, SHALL BE
DEEMED TO EXHAUST THE POWER, WHETHER OR NOT ANY SUCH EXERCISE
SHALL BE HELD BY ANY COURT TO BE INVALID, VOIDABLE,


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OR VOID, BUT THE POWER SHALL CONTINUE UNDIMINISHED AND IT MAY
BE EXERCISED FROM TIME TO TIME AS OFTEN AS THE BANK SHALL ELECT
UNTIL SUCH TIME AS THE BANK SHALL HAVE RECEIVED PAYMENT IN FULL
OF ALL AMOUNTS DUE HEREUNDER.



     
16. Guarantor acknowledges that it has read and understands
all the provisions of this Guaranty, including the Confession of
Judgment, Governing Law, Jurisdiction and Waiver of Jury Trial,
and has been advised by counsel as necessary or appropriate.


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ATTEST:




		
	By: 	
                        /s/
    Walter B. Killough










		
	Title: 	
                   Chief
    Operating Officer










		
	TIN# 	
    13-3963754











		
	Date: 	
    April 19, 2004











GUARANTOR:




dELiA*s CORP



		
	By: 	
                        /s/
    Samuel A. Gradess










		
	Title: 	
                   Treasurer










ACKNOWLEDGEMENT



	 	 	 
	
    STATE OF NEW YORK

     COUNTY OF NEW YORK   :SS.
    	 	 




     
On the 19 day of April in the year 2004, before me, the
undersigned, a Notary Public in and for said Commonwealth,
personally appeared Samuel A. Gradess, personally know to me or
proved to me on the basis of satisfactory evidence to be the
individual(s) whose name(s) is (are) subscribed to the
within instrument and acknowledged to me that he/she/they
executed the same in his/her/their capacity(ies), and that by
his/her/their signature(s) on the instrument, the individual(s),
or the person upon behalf of which the individual(s) acted,
executed the instrument.



		
	 	
    /s/ Edward D. Taffet
	 	
    

	 	
    Notary Public




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