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EXHIBIT 10.20
[▇▇▇▇▇▇▇ ▇▇▇▇▇ LOGO] Ref. No. ▇▇▇▇▇▇▇▇▇▇
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UNCONDITIONAL GUARANTY
FOR VALUE RECEIVED, and in order to induce ▇▇▇▇▇▇▇ ▇▇▇▇▇ BUSINESS FINANCIAL
SERVICES INC. ("MLBFS") to advance moneys or extend or continue to extend
credit to or for the benefit of CELEBRITY, INC., a corporation organized and
existing under the laws of the State of Texas (with any successor-in interest,
including, without limitation, any successor by merger or by operation of law,
herein collectively referred to as "Customer") under: (a) that certain TERM
WCMA LOAN AGREEMENT NO. ▇▇▇▇▇▇▇▇▇▇ between MLBFS and Customer (the "Loan
Agreement"), (b) any "Additional Agreements", as that term is defined in the
Loan Agreement (including, without limitation, the TERM WCMA NOTE incorporated
by reference into the Loan Agreement), and (c) all present and future
amendments, restatements, supplements and other evidences of any extensions,
increases, renewals, modifications and other changes of or to the Loan
Agreement or Additional Agreements (collectively, the "Guaranteed Documents"),
the undersigned, MAGICSILK, INC., a corporation duly organized and validly
existing under the laws of the State of Texas ("Guarantor"), HEREBY
UNCONDITIONALLY GUARANTEES TO MLBFS: (i) the prompt and full payment when due,
by acceleration or otherwise, of all sums now or any time hereafter due from
Customer to MLBFS under the Guaranteed Documents, (ii) the prompt, full and
faithful performance and discharge by Customer of each and every other covenant
and warranty of Customer set forth in the Guaranteed Documents, and (iii) the
prompt and full payment and performance of all other indebtedness, liabilities
and obligations of Customer to MLBFS, howsoever created or evidenced, and
whether now existing or hereafter arising (collectively, the "Obligations").
Guarantor further agrees to pay all reasonable costs and expenses (including,
but not limited to, court costs and reasonable attorneys' fees) paid or
incurred by MLBFS in endeavoring to collect or enforce performance of any of
the Obligations, or in enforcing this Guaranty. Guarantor acknowledges that
MLBFS is relying on the execution and delivery of this Guaranty in advancing
moneys to or extending or continuing to extend credit to or for the benefit of
Customer.
This Guaranty is absolute, unconditional and continuing and shall remain in
effect until all of the Obligations shall have been fully and indefeasibly
paid, performed and discharged. Upon the occurrence and during the continuance
of any default or Event of Default under the Guaranteed Documents, any or all
of the indebtedness hereby guaranteed then existing shall, at the option of
MLBFS, become immediately due and payable from Guarantor (it being understood,
however, that upon the occurrence of any "Bankruptcy Event", as defined in the
Guaranteed Documents, all such indebtedness shall automatically become due and
payable without action on the part of MLBFS). Notwithstanding the occurrence of
any such event, this Guaranty shall continue and remain in full force and
effect. To the extent MLBFS receives payment with respect to the Obligations,
and all or any part of such payment is subsequently invalidated, declared to be
fraudulent or preferential, set aside, required to be repaid by MLBFS or is
repaid by MLBFS pursuant to a settlement agreement, to a trustee, receiver or
any other person or entity, whether under any Bankruptcy law or otherwise (a
"Returned Payment"), this Guaranty shall continue to be effective or shall be
reinstated, as the case may be, to the extent of such payment or repayment by
MLBFS, and the indebtedness or part thereof intended to be satisfied by such
Returned Payment shall be revived and continued in full force and effect as if
said Returned Payment had not been made.
The liability of Guarantor hereunder shall in no event be affected or impaired
by any of the following, any of which may be done or omitted by MLBFS from time
to time, without notice to or the consent of Guarantor: (a) any renewals,
amendments, modifications or supplements of or to any of the Guaranteed
Documents, or any extensions, forbearances, compromises or releases of any of
the Obligations or any of MLBFS' rights under any of the Guaranteed Documents;
(b) any acceptance by MLBFS of any collateral or security for, or other
guarantees of, any of the Obligations; (c) any failure, neglect or omission on
the part of MLBFS to realize upon or protect any of the Obligations, or any
collateral or security therefor, or to exercise any lien upon or right of
appropriation of any moneys, credits or property of Customer or any other
guarantor, possessed by or
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under the control of MLBFS or any of its affiliates, toward the liquidation or
reduction of the Obligations; (d) any invalidity, irregularity or
unenforceability of all or any part of the Obligations, of any collateral
security for the Obligations, or the Guaranteed Documents; (e) any application
of payments or credits by MLBFS; (f) the granting of credit from time to time
by MLBFS to Customer in excess of the amount set forth in the Guaranteed
Documents; or (g) any other act of commission or omission of any kind or at any
time upon the part of MLBFS or any of its affiliates or any of their respective
employees or agents with respect to any matter whatsoever. MLBFS shall not be
required at any time, as a condition of Guarantor's obligations hereunder, to
resort to payment from Customer or other persons or entities whatsoever, or any
of their properties or estates, or resort to any collateral or pursue or
exhaust any other rights or remedies whatsoever.
No release or discharge in whole or in part of any other guarantor of the
Obligations shall release or discharge Guarantor unless and until all of the
Obligations shall have been indefeasibly fully paid and discharged. Guarantor
expressly waives presentment, protest, demand, notice of dishonor or default,
notice of acceptance of this Guaranty, notice of advancement of funds under the
Guaranteed Documents and all other notices and formalities to which Customer or
Guarantor might be entitled, by statute or otherwise, and, so long as there are
any Obligations or MLBFS is committed to extend credit to Customer, waives any
right to revoke or terminate this Guaranty without the express written consent
of MLBFS.
So long as there are any Obligations, Guarantor shall not have any claim,
remedy or right of subrogation, reimbursement, exoneration, contribution,
indemnification, or participation in any claim, right, or remedy of MLBFS
against Customer or any security which MLBFS now has or hereafter acquires,
whether or not such claim, right or remedy arises in equity, under contract, by
statute, under common law, or otherwise.
MLBFS is hereby irrevocably authorized by Guarantor at any time during the
continuance of an Event of Default under the Loan Agreement or any other of the
Guaranteed Documents or in respect of any of the Obligations, in its sole
discretion and without demand or notice of any kind, to appropriate, hold, set
off and apply toward the payment of any amount due hereunder, in such order of
application as MLBFS may elect, all cash, credits, deposits, accounts,
securities and any other property of Guarantor which is in transit to or in the
possession, custody or control of MLBFS or ▇▇▇▇▇▇▇ Lynch, Pierce, ▇▇▇▇▇▇ &
▇▇▇▇▇ Incorporated ("MLPF&S"), or any of their respective agents, bailees or
affiliates, including, without limitation, all securities accounts with MLPF&S
and all cash, securities and other financial assets therein or controlled
thereby, and all proceeds thereof. Guarantor hereby collaterally assigns and
grants to MLBFS a continuing security interest in all such property as
additional security for the Obligations. Upon the occurrence and during the
continuance of an Event of Default, MLBFS shall have all rights in such
property available to collateral assignees and secured parties under all
applicable laws, including, without limitation, the UCC.
Guarantor agrees to furnish to MLBFS such financial information concerning
Guarantor as may be required by any of the Guaranteed Documents or as MLBFS may
otherwise from time to time reasonably request. Guarantor further hereby
irrevocably authorizes MLBFS and each of its affiliates, including without
limitation MLPF&S, to at any time (whether or not an Event of Default shall
have occurred) obtain from and disclose to each other any and all financial and
other information about Guarantor.
No delay on the part of MLBFS in the exercise of any right or remedy under the
Guaranteed Documents, this Guaranty or any other agreement shall operate as a
waiver thereof, and, without limiting the foregoing, no delay in the
enforcement of any security interest, and no single or partial exercise by
MLBFS of any right or remedy shall preclude any other or further exercise
thereof or the exercise of any other right or remedy. This Guaranty may be
executed in any number of counterparts, each of which counterparts, once they
are executed and delivered, shall be deemed to be an original and all of which
counterparts, taken together, shall constitute but one and the same Guaranty.
This Guaranty shall be binding upon Guarantor and its successors and assigns,
and shall inure to the benefit of MLBFS and its successors and assigns. If
there is more than one guarantor of the Obligations, all of the obligations and
agreements of Guarantor are joint and several with such other guarantors.
This Guaranty shall be governed by the laws of the State of Illinois. WITHOUT
LIMITING THE RIGHT OF MLBFS TO ENFORCE THIS GUARANTY IN ANY JURISDICTION AND
VENUE PERMITTED BY
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APPLICABLE LAW, GUARANTOR AGREES THAT THIS GUARANTY MAY AT THE OPTION OF MLBFS
BE ENFORCED BY MLBFS IN ANY JURISDICTION AND VENUE IN WHICH ANY OF THE
GUARANTEED DOCUMENTS MAY BE ENFORCED. GUARANTOR AND MLBFS HEREBY EACH EXPRESSLY
WAIVE ANY AND ALL RIGHTS TO A TRIAL BY JURY IN ANY ACTION, PROCEEDING OR
COUNTERCLAIM BROUGHT BY EITHER OF THE PARTIES AGAINST THE OTHER PARTY IN ANY
WAY RELATED TO OR ARISING OUT OF THIS GUARANTY OR THE OBLIGATIONS. Wherever
possible each provision of this Guaranty shall be interpreted in such manner as
to be effective and valid under applicable law, but if any provision of this
Guaranty shall be prohibited by or invalid under such law, such provision shall
be ineffective only to the extent of such prohibition or invalidity, without
invalidating the remainder of such provision or the remaining provisions of
this Guaranty. No modification or waiver of any of the provisions of this
Guaranty shall be effective unless in writing and signed by both Guarantor and
an officer of MLBFS.
Each signatory on behalf of Guarantor warrants that he has authority to sign on
behalf of Guarantor, and by so signing, to bind Guarantor hereunder.
Dated as of June 17, 1997.
MAGICSILK, INC.
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
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Signature (1) Signature (2)
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Printed Name Printed Name
Vice President
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Title Title
ADDRESS OF GUARANTOR:
P. O. ▇▇▇ ▇▇▇▇
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