PERSONAL GUARANTY
To: Interiors Investors, L.L.C. (the "Lender")
c/o Xxxxxx Xxxxxx
000 X. Xxxxx, Apartment Xx. 0000
Xxxxxxx, Xxxxxxxx 00000
Ladies and Gentlemen:
To induce the Lender to provide or to continue to make extensions of
credit and other financial accommodations to Stylecraft Lamps, Inc., a Tennessee
corporation ("Stylecraft"), and Petals, Inc., a Delaware corporation ("Petals",
and, together with Stylecraft, the "Borrowers") as evidenced by that certain
Promissory Note, dated as of March 19, 2001 issued by the Borrowers to the
Lender (as amended, restated, supplemented or otherwise modified from time to
time, the "Promissory Note"), and the Loan Documents related thereto, in respect
of which financial accommodations the undersigned shall derive direct and
indirect benefits, the undersigned, each having an address at c/o Interiors,
Inc., 000 Xxxxxxxxxx Xx., Xxxxx Xxxxxx, Xxx Xxxx 00000, hereby unconditionally
guarantee to you and your successors and assigns, prompt payment when due, of
all sums which shall or may become due to you pursuant to the Promissory Note
and the other Loan Documents or any other agreement, purchase order, document or
instrument, heretofore, now or hereafter executed by Borrowers and delivered to
you in connection with the Promissory Note and the other Loan Documents, and of
all costs, expenses and attorneys' fees incurred by you by reason of default by
the Borrowers thereunder and by reason of your enforcement of this Guaranty
(such sums are hereinafter collectively referred to as the "indebtedness"). The
undersigned hereby agree that this Guaranty is an absolute guaranty of payment
and is not a guaranty of collection. Capitalized terms not otherwise defined
herein shall have the meanings ascribed thereto in the Promissory Note.
The undersigned hereby unconditionally guarantee, jointly and
severally, the full and punctual payment when due (whether at stated maturity,
upon acceleration or otherwise) of the Obligations, including, without
limitation, (i) the principal of and interest on the Term Loan, (ii) the Special
Sale Payment, if any, and (iii) all other amounts payable by the Borrowers under
the Promissory Note and the other Loan Documents (all of the foregoing, the
"Guaranteed Obligations"). Upon the failure by any Borrower to pay punctually
any such amount, each of the undersigned agrees that he/she shall forthwith on
demand pay such amount at the place and in the manner specified in the
Promissory Note or the relevant Loan Document, as the case may be.
Except for written demand made by Xxxxxx with respect to payment
hereunder, the undersigned hereby waive diligence, demand for payment and any
and all notices with respect to the indebtedness. The undersigned hereby
covenant that this Guaranty shall not be discharged and terminated except by and
upon the complete performance (i) by the undersigned of the obligations
contained herein following the occurrence and continuance of an Event of Default
pertaining only to the failure of any
Borrower to pay any of the Guaranteed Obligations when the same shall become due
and payable; or (ii) by any Borrower of its Obligations under the Promissory
Note or the other Loan Documents and any other agreement, note, contract,
document or instrument now or hereafter executed by any Borrower and delivered
to you in connection with the Promissory Note and the other Loan Documents. This
Guaranty shall be irrevocable. You shall have the exclusive right to determine
the application of payments and credits, if any, from the undersigned, any
Borrower or from any other person, firm or corporation, on account of the
indebtedness.
The undersigned assume the responsibility for keeping themselves
informed of the financial condition of any Borrower and of all other
circumstances bearing upon the risk of non-payment of the indebtedness that
diligent inquiry would reveal, and the undersigned hereby agree that you shall
have no duty to advise the undersigned of information known to you regarding
such condition or any such circumstances.
The undersigned agree that, to the extent that any Borrower makes a
payment or payments to you, or you receive any proceeds of Collateral (as
defined in the Loan Documents), which payment or payments or any part thereof
are subsequently invalidated, declared to be fraudulent or preferential, set
aside and/or required to be repaid to such Borrower, its estate, trustee,
receiver or any other party, including, without limitation, the undersigned,
under any bankruptcy law, state or federal law, common law or equitable cause,
then to the extent of such payment or repayment, the indebtedness 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 time immediately
preceding such initial payment, reduction or satisfaction and, if prior thereto
this Guaranty shall have been cancelled or surrendered, this Guaranty shall be
reinstated in full force and effect, and such prior cancellation or surrender
shall not diminish, release, discharge or otherwise affect the obligations of
the undersigned in respect of the amount of such payment.
The undersigned further agree that any and all claims of the
undersigned against any Borrower or any Borrowers' property shall be subordinate
and subject in right of payment to the prior payment, in full and in cash, of
all indebtedness of the Borrowers to you.
In the event bankruptcy or insolvency proceedings, or proceedings
for reorganization, or for the appointment of a receiver, trustee or custodian
for any Borrower or over its property or any substantial portion thereof, are
instituted by or against any Borrower, or if any Borrower makes an assignment
for the benefit of creditors, or disposes of all or a substantial portion of its
property, or if any Borrower defaults with respect to the payment of the
indebtedness as the same becomes due, or fails promptly to cure any Event of
Default under (and as defined in) the Promissory Note, then upon any such event
("default"), the liabilities of the undersigned hereunder shall, at your option,
and without notice, become immediately fixed and shall be enforceable for the
full amount thereof, whether then due or not, the same as though all said
liabilities had become past due.
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The undersigned hereby agrees that the obligations of the
undersigned hereunder shall be unconditional, irrespective of (i) the validity
or enforceability of the indebtedness, (ii) any law, regulation or order
affecting any term of the indebtedness or your rights with respect thereto,
(iii) the absence of any attempt to collect the indebtedness from any Borrower
or other action to enforce the same, (iv) any amendment, modification or waiver
of, or consent by you with respect to, any provision of the Promissory Note or
the other Loan Documents, any other agreement, notice, purchase order, document
or instrument, now or hereafter executed by any Borrower and delivered to you
including, without limitation, any change in the time, manner or place of
payment or any other term of the indebtedness, provided, however, that
notwithstanding anything herein or in any other Loan Document to the contrary,
no modification, amendment or waiver shall, without the prior written consent of
each of the undersigned (which consent shall not be unreasonably withheld or
delayed), increase the principal amount of the Promissory Note or the Special
Sale Payment, provided, that, irrespective of whether any such consent is given
by the Guarantors, this Guaranty shall remain in full force and effect with
respect to all Guaranteed Obligations arising prior to such modification, waiver
or amendment, (v) your failure to take any steps to preserve your rights to any
security for the indebtedness, (vi) any exchange, release, or failure to perfect
a security interest in any security for the indebtedness, or (vii) any other
circumstances which might otherwise constitute a legal or equitable discharge or
defense of a guarantor or of any Borrower.
This Guaranty shall be binding upon the undersigned and upon their
respective successors, heirs and assigns and shall inure to your benefit; all
references herein to the Borrowers and to the undersigned shall be deemed to
include their respective successors, heirs and assigns and legal
representatives, as applicable. The Borrowers' successors and assigns shall
include, without limitation, a receiver, trustee or debtor-in-possession of or
for the applicable Borrower. All words used herein in the plural shall be deemed
to have been used in the singular and all words used herein in the singular
shall be deemed to have been used in the plural where the context and
construction so require. In addition, all references herein to the "undersigned"
or "you" shall be deemed to be a reference to either, both or all of the
undersigned or you, as the context and construction require.
THIS GUARANTY SHALL BE INTERPRETED AND THE RIGHTS AND LIABILITIES OF
THE PARTIES HERETO DETERMINED IN ACCORDANCE WITH THE INTERNAL LAWS (INCLUDING,
WITHOUT LIMITATION SECTION 735 ILCS 105/5-1 ET SEQ., BUT OTHERWISE WITHOUT
REGARD TO THE CONFLICTS OF LAW PROVISIONS) AND DECISIONS OF THE STATE OF
ILLINOIS.
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EACH OF THE PARTIES HERETO WAIVES ANY RIGHT TO HAVE A JURY
PARTICIPATE IN RESOLVING ANY DISPUTE, WHETHER SOUNDING IN CONTRACT, TORT, OR
OTHERWISE, BETWEEN ANY OF THE PARTIES HERETO ARISING OUT OF, CONNECTED WITH,
RELATED TO OR INCIDENTAL TO THE RELATIONSHIP ESTABLISHED BETWEEN THEM IN
CONNECTION WITH THIS GUARANTY OR ANY OTHER INSTRUMENT, DOCUMENT OR AGREEMENT
EXECUTED OR DELIVERED IN CONNECTION THEREWITH OR THE TRANSACTIONS RELATED
THERETO. EACH OF THE PARTIES HERETO HEREBY AGREES AND CONSENTS THAT ANY SUCH
CLAIM, DEMAND, ACTION OR CAUSE OF ACTION SHALL BE DECIDED BY COURT TRIAL WITHOUT
A JURY AND THAT ANY SUCH PARTY MAY FILE AN ORIGINAL OF THIS GUARANTY WITH ANY
COURT AS WRITTEN EVIDENCE OF THE CONSENT OF THE PARTIES HERETO TO THE WAIVER OF
THEIR RIGHT TO TRIAL BY JURY.
________________________________________
XXX XXXX
________________________________________
XXXXXX XXXX
Dated as of __________, 20__
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