<PAGE>

                                                                     Exhibit 4.4
                                                                     -----------

                               LIMITED GUARANTY
                               ----------------

          THIS LIMITED GUARANTY (this "Guaranty"), dated as of March 21, 2002,
is executed and delivered by RONALD ELLIOTT, an individual ("Guarantor"), in
favor of GMAC Business Credit, LLC, a Delaware limited liability company, as the
arranger and administrative agent for the below-referenced Lenders (in such
capacity, together with its successors, if any, in such capacity, "Agent"), in
light of the following:

          WHEREAS, Debtors (as defined below) and the Lender Group have entered
into that certain Loan and Security Agreement dated as April 30, 2001, as
amended by that certain Amendment Number One to Loan and Security Agreement
dated as of March 13, 2002 and by that certain Amendment Number Two to Loan and
Security Agreement dated as of March 21, 2002 (as amended, restated,
supplemented or otherwise modified from time to time, the "Loan Agreement");

          WHEREAS, Debtors have requested that the Lender Group agree to amend
the Loan Agreement; and

          WHEREAS, in order to induce the Lender Group to agree to so amend the
Loan Agreement, and in consideration thereof, Guarantor has agreed to guaranty
the Guarantied Obligations subject to the terms and conditions set forth herein.

          NOW, THEREFORE, in consideration of the foregoing, Guarantor hereby
agrees, in favor of Agent, for the benefit of the Lender Group, as follows:

     1.   Definitions and Construction.
          ----------------------------

          (a)  Definitions.  Capitalized terms used herein and not otherwise
               -----------
defined herein shall have the meanings ascribed to them in the Loan Agreement.
The following terms, as used in this Guaranty, shall have the following
meanings:

               "Agent" shall have the meaning set forth in the preamble to this
                -----
     Guaranty.

               "Debtors" shall mean LearningStar Corp., a Delaware corporation,
                -------
     Earlychildhood LLC, a California limited liability company,
     Smarterkids.com, Inc., a Delaware corporation, and Educational Products,
     Inc., a Texas corporation, and "Debtor" shall mean any one of them.
                                     ------

               "Guarantied Obligations" shall mean the due and punctual payment
                ----------------------
     of the principal of, and interest (including, any and all interest which,
     but for the application of the provisions of the Bankruptcy Code, would
     have accrued on such amounts) on, any and all premium on, and any and all
     fees, costs, and expenses incurred in connection with or on the
     Indebtedness owed by a Debtor to the Lender Group pursuant to the terms of
     the Loan Documents.

                                       1
<PAGE>

               "Guarantor" shall have the meaning set forth in the preamble to
                ---------
     this Guaranty.

               "Guaranty" shall have the meaning set forth in the preamble to
                --------
     this Guaranty.

               "Indebtedness" shall mean any and all Obligations, indebtedness,
                ------------
     or liabilities of any kind or character owed by a Debtor to the Lender
     Group and arising directly or indirectly out of or in connection with the
     Loan Agreement or the other Loan Documents, including all such obligations,
     indebtedness, or liabilities, whether for principal, interest (including
     any and all interest which, but for the application of the provisions of
     the Bankruptcy Code, would have accrued on such amounts), premium,
     reimbursement obligations, fees, costs, expenses (including reasonable
     attorneys' fees), or indemnity obligations, whether heretofore, now, or
     hereafter made, incurred, or created, whether voluntarily or involuntarily
     made, incurred, or created, whether secured or unsecured (and if secured,
     regardless of the nature or extent of the security), whether absolute or
     contingent, liquidated or unliquidated, or determined or indeterminate,
     whether such Debtor is liable individually or jointly with others, and
     whether recovery is or hereafter becomes barred by any statute of
     limitations or otherwise becomes unenforceable for any reason whatsoever,
     including any act or failure to act by any member of the Lender Group.

               "Lender Group" means, individually and collectively, jointly and
                ------------
     severally, each of the Lenders and Agent.

               "Lenders" means, individually and collectively, each of the
                -------
     financial institutions identified on the signature pages of the Loan
     Agreement, and any other person made a party thereto in accordance with the
     provisions of Section 14 thereof (together with their respective successors
                   ----------
     and assigns).

               "Loan Agreement" shall have the meaning set forth in the recitals
                --------------
     to this Guaranty.

               "Maximum Guarantied Amount" shall mean the lesser of (a)
                -------------------------
     $500,000, and (b) the result of (i) (A) $4,000,000 minus (B) Borrowers'
     Excess Availability (as such term is defined in the Loan Agreement on the
     date hereof), divided by (ii) 3.

          (b)  Construction.  Unless the context of this Guaranty clearly
               ------------
requires otherwise, references to the plural include the singular, references to
the singular include the plural, the part includes the whole, the terms
"include" and "including" are not limiting, and the term "or" has the inclusive
meaning represented by the phrase "and/or." The words "hereof," "herein,"
"hereby," "hereunder," and other similar terms refer to this Guaranty as a whole
and not to any particular provision of this Guaranty. Any reference in this
Guaranty to any of the following documents includes any and all alterations,
amendments, restatements, extensions, modifications, renewals, or supplements
thereto or thereof, as applicable: the Loan Agreement; this Guaranty; and the
other Loan Documents. Neither this Guaranty nor

                                       2
<PAGE>

any uncertainty or ambiguity herein shall be construed or resolved against the
Lender Group or Guarantor, whether under any rule of construction or otherwise.
On the contrary, this Guaranty has been reviewed by Guarantor, Agent, and their
respective counsel, and shall be construed and interpreted according to the
ordinary meaning of the words used so as to fairly accomplish the purposes and
intentions of Agent and Guarantor.

     2.   Guarantied Obligations.  Subject to Sections 22 and 24 hereof,
          ----------------------              ------------------
Guarantor hereby irrevocably and unconditionally guaranties to Agent, for the
benefit of the Lender Group, as and for its own debt, until final and
indefeasible payment thereof has been made, (a) the payment of the Guarantied
Obligations, in each case when and as the same shall become due and payable,
whether at maturity, pursuant to a mandatory prepayment requirement, by
acceleration, or otherwise; it being the intent of Guarantor that the guaranty
set forth herein shall be a guaranty of payment and not a guaranty of
collection; and (b) the punctual and faithful performance, keeping, observance,
and fulfillment by each Debtor of all of the agreements, conditions, covenants,
and obligations of such Debtor contained in the Loan Agreement, and under each
of the other Loan Documents.

     3.   Continuing Guaranty.  This Guaranty includes Guarantied Obligations
          -------------------
arising under successive transactions continuing, compromising, extending,
increasing, modifying, releasing, or renewing the Guarantied Obligations,
changing the interest rate, payment terms, or other terms and conditions
thereof, or creating new or additional Guarantied Obligations after prior
Guarantied Obligations have been satisfied in whole or in part. To the maximum
extent permitted by law, Guarantor hereby waives any right to revoke this
Guaranty as to future Indebtedness. If such a revocation is effective
notwithstanding the foregoing waiver, Guarantor acknowledges and agrees that (a)
no such revocation shall be effective until written notice thereof has been
received by Agent, (b) no such revocation shall apply to any Guarantied
Obligations in existence on such date (including any subsequent continuation,
extension, or renewal thereof, or change in the interest rate, payment terms, or
other terms and conditions thereof), (c) no such revocation shall apply to any
Guarantied Obligations made or created after such date to the extent made or
created pursuant to a legally binding commitment of the Lender Group in
existence on the date of such revocation, (d) no payment by a Debtor, or from
any other source (other than Guarantor), prior to the date of such revocation
shall reduce the maximum obligation of Guarantor hereunder, and (e) any payment
by a Debtor or from any source other than Guarantor subsequent to the date of
such revocation shall first be applied to that portion of the Guarantied
Obligations as to which the revocation is effective and which are not,
therefore, guarantied hereunder, and to the extent so applied shall not reduce
the maximum obligation of Guarantors hereunder.

     4.   Performance Under this Guaranty.  In the event that a Debtor fails to
          -------------------------------
make any payment of any Guarantied Obligations, on or before the due date
thereof, or if a Debtor shall fail to perform, keep, observe, or fulfill any
other obligation referred to in Section 2(b) hereof in the manner provided in
                                ------------
the Loan Agreement or the other Loan Documents, as applicable, Guarantor
immediately shall cause such payment to be made or each of such obligations to
be performed, kept, observed, or fulfilled.

                                       3
<PAGE>

     5.   Primary Obligations. This Guaranty is a primary and original
          -------------------
obligation of Guarantor, is not merely the creation of a surety relationship,
and is an absolute, unconditional, and continuing guaranty of payment and
performance which shall remain in full force and effect without respect to
future changes in conditions. Guarantor agrees, subject to the provisions of
Section 22 hereof, that it is directly, jointly and severally with any other
-----------------
guarantor of the Guarantied Obligations, liable to the Lender Group, that the
obligations of Guarantor hereunder are independent of the obligations of a
Debtor or any other guarantor, and that a separate action may be brought against
Guarantor, whether such action is brought against a Debtor or any other
guarantor or whether a Debtor or any other guarantor is joined in such action.
Guarantor agrees that its liability hereunder shall be immediate and shall not
be contingent upon the exercise or enforcement by the Lender Group of whatever
remedies it may have against a Debtor or any other guarantor, or the enforcement
of any lien or realization upon any security the Lender Group may at any time
possess. Guarantor agrees that any release which may be given by Agent to a
Debtor or any other guarantor shall not release Guarantor. Guarantor consents
and agrees that the Lender Group shall be under no obligation to marshal any
property or assets of a Debtor or any other guarantor in favor of Guarantor, or
against or in payment of any or all of the Guarantied Obligations.

     6.   [Intentionally Omitted]
          ---------------------

     7.   Representations and Warranties of Guarantor. Guarantor makes the
          -------------------------------------------
following representations, warranties and agreements:

          (a)  Guarantor represents and warrants to the Lender Group that he is
currently informed of the financial condition of each Debtor and of all other
circumstances which a diligent inquiry would reveal and which bear upon the risk
of nonpayment of the Guarantied Obligations. Guarantor further represents and
warrants to the Lender Group that he has read and understands the terms and
conditions of the Loan Agreement and the other Loan Documents. Guarantor hereby
covenants that he will continue to keep himself informed of each Debtor's
financial condition, the financial condition of other guarantors, if any, and of
all other circumstances which bear upon the risk of nonpayment or nonperformance
of the Guarantied Obligations. Guarantor acknowledges that he is guaranteeing
the Guaranteed Obligations after what Guarantor deems to be adequate
investigation of the business, finances and prospects of each Debtor by
Guarantor and Guarantor's representatives (if any).

          (b)  Guarantor has the requisite power and authority to execute,
deliver and perform the terms and provisions of this Guaranty. Guarantor has
duly executed and delivered this Guaranty, and this Guaranty constitutes his
legal, valid and binding obligation enforceable in accordance with its terms.

          (c)  Neither the execution, delivery or performance by Guarantor of
this Guaranty, nor compliance by him with the terms and provisions hereof, (i)
will contravene any provision of any applicable law binding upon Guarantor, or
(ii) will conflict or be

                                       4
<PAGE>

inconsistent with or result in any breach of any of the terms, covenants,
conditions or provisions of, or constitute a default in respect of, or result in
the creation or imposition of (or the obligation to create or impose) any Lien
upon any of the property or assets of Guarantor or pursuant to the terms of any
mortgage, deed of trust, loan agreement or any other material agreement,
contract or instrument to which Guarantor is a party or by which he or any of
his property or assets is bound or to which he or it may be subject.

          (d)  There is no litigation, action, suit, investigation, claim or
proceeding pending or, to Guarantor's actual knowledge, threatened (i) with
respect to this Guaranty, or (ii) which could reasonably be expected to result
in a material adverse change with respect to the financial condition of
Guarantor.

          (e)  All factual information (taken as a whole) heretofore or
contemporaneously furnished by Guarantor in writing about Guarantor for purposes
of or in connection with this Guaranty or any other Loan Document is, and all
other such factual information (taken as a whole) hereafter furnished by or on
behalf of Guarantor in writing to any member of the Lender Group will be, true
and accurate in all material respects on the date as of which such information
is dated or certified and not materially incomplete by omitting to state any
fact necessary to make such information (taken as a whole) not misleading at
such time in light of the circumstances under which such information was
provided.

          (f)  Guarantor has such knowledge and experience in financial and
business matters that Guarantor is capable of evaluating the merits and risks of
this transaction and of guaranteeing the Guarantied Obligations.

     8.   Waivers.
          -------

          (a)  To the fullest extent permitted by applicable law, Guarantor
hereby waives: (i) notice of acceptance hereof; (ii) notice of any loans or
other financial accommodations made or extended under the Loan Agreement, or the
creation or existence of any Guarantied Obligations; (iii) notice of the amount
of the Guarantied Obligations, subject, however, to Guarantor's right to make
inquiry of Agent to ascertain the amount of the Guarantied Obligations at any
reasonable time; (iv) notice of any adverse change in the financial condition of
a Debtor or of any other fact that might increase Guarantor's risk hereunder;
(v) notice of presentment for payment, demand, protest, and notice thereof as to
any instrument among the Loan Documents; (vi) notice of any unmatured Event of
Default or Event of Default under the Loan Agreement; and (vii) all other
notices (except if such notice is specifically required to be given to Guarantor
under this Guaranty) and demands to which Guarantor might otherwise be entitled.

          (b)  To the fullest extent permitted by applicable law, Guarantor
waives the right by statute or otherwise to require the Lender Group to
institute suit against a Debtor or to exhaust any rights and remedies which the
Lender Group has or may have against such Debtor. In this regard, Guarantor
agrees that it is bound to the payment of each and all Guarantied Obligations,
whether now existing or hereafter arising, as fully as if such

                                       5
<PAGE>

Guarantied Obligations were directly owing to the Lender Group by Guarantor.
Guarantor further waives any defense arising by reason of any disability or
other defense (other than the defense that the Guarantied Obligations shall have
been fully and finally performed and indefeasibly paid) of a Debtor or by reason
of the cessation from any cause whatsoever of the liability of a Debtor in
respect thereof.

          (c)  To the fullest extent permitted by applicable law, Guarantor
hereby waives: (i) any rights to assert against the Lender Group any defense
(legal or equitable), set-off, counterclaim, or claim which Guarantor may now or
at any time hereafter have against a Debtor or any other party liable to the
Lender Group; (ii) any defense, set-off, counterclaim, or claim, of any kind or
nature, arising directly or indirectly from the present or future lack of
perfection, sufficiency, validity, or enforceability of the Guarantied
Obligations or any security therefor; (iii) any defense arising by reason of any
claim or defense based upon an election of remedies by the Lender Group
including any defense based upon an election of remedies by the Lender Group
under the provisions of (S)(S) 580d and 726 of the California Code of Civil
Procedure, or any similar law of California or any other jurisdiction; (iv) the
benefit of any statute of limitations affecting Guarantor's liability hereunder
or the enforcement thereof, and any act which shall defer or delay the operation
of any statute of limitations applicable to the Guarantied Obligations shall
similarly operate to defer or delay the operation of such statute of limitations
applicable to Guarantor's liability hereunder.

          (d)  Until such time as all of the Guarantied Obligations have been
fully, finally, and indefeasibly paid in full in cash: (i) Guarantor hereby
waives and postpones any right of subrogation Guarantor has or may have as
against a Debtor with respect to the Guarantied Obligations; (ii) in addition,
Guarantor hereby waives and postpones any right to proceed against a Debtor or
any other Person, now or hereafter, for contribution, indemnity, reimbursement,
or any other suretyship rights and claims (irrespective of whether direct or
indirect, liquidated or contingent), with respect to the Guarantied Obligations;
and (iii) in addition, Guarantor also hereby waives and postpones any right to
proceed or to seek recourse against or with respect to any property or asset of
a Debtor.

          (e)  If any of the Guarantied Obligations at any time are secured by a
mortgage or deed of trust upon real property, Agent may elect, in its sole
discretion, upon a default with respect to the Guarantied Obligations, to
foreclose such mortgage or deed of trust judicially or nonjudicially in any
manner permitted by law, before or after enforcing this Guaranty, without
diminishing or affecting the liability of Guarantor hereunder. Guarantor
understands that (a) by virtue of the operation of California's antideficiency
law applicable to nonjudicial foreclosures, an election by Agent nonjudicially
to foreclose such a mortgage or deed of trust probably would have the effect of
impairing or destroying rights of subrogation, reimbursement, contribution, or
indemnity of Guarantor against a Debtor or other guarantors or sureties, and (b)
absent the waiver given by Guarantor herein, such an election would estop Agent
from enforcing this Guaranty against Guarantor. Understanding the foregoing, and
understanding that Guarantor is hereby relinquishing a defense to the
enforceability of this Guaranty, Guarantor hereby waives any right to assert
against the Lender Group any

                                       6
<PAGE>

defense to the enforcement of this Guaranty, whether denominated "estoppel" or
otherwise, based on or arising from an election by Agent nonjudicially to
foreclose any such mortgage or deed of trust. Guarantor understands that the
effect of the foregoing waiver may be that such Guarantor may have liability
hereunder for amounts with respect to which Guarantor may be left without rights
of subrogation, reimbursement, contribution, or indemnity against a Debtor or
other guarantors or sureties. Guarantor also agrees that the "fair market value"
provisions of Section 580a of the California Code of Civil Procedure shall have
no applicability with respect to the determination of Guarantor's liability
under this Guaranty.

          (f)  WITHOUT LIMITING THE GENERALITY OF ANY OTHER WAIVER OR OTHER
PROVISION SET FORTH IN THIS GUARANTY, GUARANTOR HEREBY WAIVES, TO THE MAXIMUM
EXTENT SUCH WAIVER IS PERMITTED BY LAW, ANY AND ALL BENEFITS OR DEFENSES ARISING
DIRECTLY OR INDIRECTLY UNDER ANY ONE OR MORE OF CALIFORNIA CIVIL CODE (S)(S)
2799, 2808, 2809, 2810, 2815, 2819, 2820, 2821, 2822, 2838, 2839, 2845, 2847,
2848, 2849, AND 2850, CALIFORNIA CODE OF CIVIL PROCEDURE (S)(S) 580a, 580b,
580c, 580d, AND 726, AND CHAPTER 2 OF TITLE 14 OF THE CALIFORNIA CIVIL CODE.

          (g)  WITHOUT LIMITING THE GENERALITY OF ANY OTHER WAIVER OR OTHER
PROVISION SET FORTH IN THIS GUARANTY, GUARANTOR WAIVES ALL RIGHTS AND DEFENSES
ARISING OUT OF AN ELECTION OF REMEDIES BY AGENT, EVEN THOUGH THAT ELECTION OF
REMEDIES, SUCH AS A NONJUDICIAL FORECLOSURE WITH RESPECT TO SECURITY FOR A
GUARANTIED OBLIGATION, HAS DESTROYED GUARANTOR'S RIGHTS OF SUBROGATION AND
REIMBURSEMENT AGAINST A DEBTOR BY THE OPERATION OF SECTION 580d OF THE
CALIFORNIA CODE OF CIVIL PROCEDURE OR OTHERWISE.

     9.   Releases. Guarantor consents and agrees that, without notice to or by
          --------
Guarantor and without affecting or impairing the obligations of Guarantor
hereunder, the Lender Group may, by action or inaction, compromise or settle,
extend the period of duration or the time for the payment, or discharge the
performance of, or may refuse to, or otherwise not enforce, or may, by action or
inaction, release all or any one or more parties to, any one or more of the
terms and provisions of the Loan Agreement or any of the other Loan Documents or
may grant other indulgences to a Debtor in respect thereof, or may amend or
modify in any manner and at any time (or from time to time) any one or more of
the Loan Agreement or any of the other Loan Documents, or may, by action or
inaction, release or substitute any other guarantor, if any, of the Guarantied
Obligations, or may enforce, exchange, release, or waive, by action or inaction,
any security for the Guarantied Obligations or any other guaranty of the
Guarantied Obligations, or any portion thereof.

     10.  No Election. Subject to Section 22 hereof, the Lender Group shall have
          -----------             ----------
the right to seek recourse against Guarantor to the fullest extent provided for
herein and no election by the Lender Group to proceed in one form of action or
proceeding, or against any

                                       7
<PAGE>

party, or on any obligation, shall constitute a waiver of the Lender Group's
right to proceed in any other form of action or proceeding or against other
parties unless the Lender Group has expressly waived such right in writing.
Specifically, but without limiting the generality of the foregoing, no action or
proceeding by the Lender Group under any document or instrument evidencing the
Guarantied Obligations shall serve to diminish the liability of Guarantor under
this Guaranty except to the extent that the Lender Group finally and
unconditionally shall have realized indefeasible payment by such action or
proceeding.

     11.  Indefeasible Payment. The Guarantied Obligations shall not be
          --------------------
considered indefeasibly paid for purposes of this Guaranty unless and until all
payments to the Lender Group are no longer subject to any right on the part of
any person whomsoever, including each Debtor, a Debtor as a debtor in
possession, Guarantor, Guarantor as a debtor in possession or any trustee
(whether appointed under the Bankruptcy Code or otherwise) of a Debtor's assets
or Guarantor's assets to invalidate or set aside such payments or to seek to
recoup the amount of such payments or any portion thereof, or to declare same to
be fraudulent or preferential. In the event that, for any reason, all or any
portion of such payments to the Lender Group are set aside or restored, whether
voluntarily or involuntarily, after the making thereof, the obligation or part
thereof intended to be satisfied thereby shall be revived and continued in full
force and effect as if said payment or payments had not been made and, subject
to Section 22 hereof, Guarantor shall be liable for the full amount the Lender
   ----------
Group is required to repay plus any and all costs and expenses (including
reasonable attorneys' fees) paid by the Lender Group in connection therewith.

     12.  [Intentionally Omitted]
           ---------------------

     13.  Payments; Application.  All payments to be made hereunder by Guarantor
          ---------------------
shall be made in lawful money of the United States of America at the time of
payment, shall be made in immediately available funds, and shall be made without
deduction (whether for taxes or otherwise) or offset.  All payments made by
Guarantor hereunder shall be applied as follows:  first, to all reasonable costs
and expenses (including reasonable attorneys' fees) incurred by the Lender Group
in enforcing this Guaranty or in collecting the Guarantied Obligations; second,
to all accrued and unpaid interest, premium, if any, and fees owing to the
Lender Group constituting Guarantied Obligations; and third, to the balance of
the Guarantied Obligations.

     14.  Attorneys' Fees and Costs; Interest.  Subject to Section 22 hereof,
          -----------------------------------              ----------
Guarantor agrees to pay, on demand:  (a) all reasonable attorneys' fees and all
other reasonable costs and expenses which may be incurred by the Lender Group in
the enforcement of this Guaranty or in any way arising out of, or consequential
to the protection, assertion, or enforcement of the Guarantied Obligations (or
any security therefor) against Guarantor or a Debtor, irrespective of whether
suit is brought, and (b) the interest provided for in Section 22 (a)(ii) hereof.
                                                      ------------------

     15.  Notices.  Unless otherwise specifically provided in this Guaranty, any
          -------
notice or other communication relating to this Guaranty or any other agreement
entered into in

                                       8
<PAGE>

connection herewith shall be in writing and shall be personally delivered or
sent by registered or certified mail, postage prepaid, return receipt requested,
or by prepaid overnight courier, or by telefacsimile to Guarantor, or to Agent,
as the case may be, at its respective address set forth below:

If to Guarantor                    RONALD ELLIOTT
                                   c/o Learningstar Corp.
                                   2 Lower Ragsdale Drive, Suite 200
                                   Monterey, California 93940
                                   Fax No.: 831.771.5587

with copies to:                    LATHAM & WATKINS
                                   633 W. Fifth Street
                                   Suite 40000
                                   Los Angeles, California 90071
                                   Attn: Glen B. Collyer, Esq.
                                   Fax No.: 213.891.8763

                                   HOLLAND & KNIGHT LLP
                                   50 California Street, 28/th/ Floor
                                   San Francisco, California 94111-4601
                                   Attn: Wendy Lazerson, Esq.
                                   Fax No.: 415.743-6910

If to Guarantied Party:            GMAC BUSINESS CREDIT, LLC
                                   55 South Lake Avenue
                                   Suite 220
                                   Pasadena, California 91101
                                   Attn: David Grabosky
                                   Fax No.: 626.585.6101

with copies to:                    BROBECK, PHLEGER & HARRISON LLP
                                   550 South Hope Street
                                   Los Angeles, California 90071
                                   Attn:  John Francis Hilson, Esq.
                                   Fax No. 213.745.3345


          The parties hereto may change the address at which they are to receive
notices hereunder, by notice in writing in the foregoing manner given to the
other.  All notices or demands sent in accordance with this Section 15, other
                                                            ----------
than notices by Agent in connection with enforcement of rights against the
Collateral under the provisions of the Code, shall be deemed received on the
earlier of the date of actual receipt or three (3) calendar days after the
deposit thereof in the mail.  Guarantor acknowledges and agrees that notices
sent by

                                       9
<PAGE>

Agent in connection with enforcement of rights against the Collateral under the
provisions of the Code shall be deemed sent when deposited in the mail or
transmitted by telefacsimile or other similar method set forth above.

     16.  Cumulative Remedies.  No remedy under this Guaranty, under the Loan
          -------------------
Agreement, or any other Loan Document is intended to be exclusive of any other
remedy, but each and every remedy shall be cumulative and in addition to any and
every other remedy given under this Guaranty, under the Loan Agreement, or any
other Loan Document, and those provided by law.  No delay or omission by the
Lender Group to exercise any right under this Guaranty shall impair any such
right nor be construed to be a waiver thereof.  No failure on the part of the
Lender Group to exercise, and no delay in exercising, any right under this
Guaranty shall operate as a waiver thereof; nor shall any single or partial
exercise of any right under this Guaranty preclude any other or further exercise
thereof or the exercise of any other right.

     17.  Severability of Provisions.  Any provision of this Guaranty which is
          --------------------------
prohibited or unenforceable under applicable law shall be ineffective to the
extent of such prohibition or unenforceability without invalidating the
remaining provisions hereof.

     18.  Entire Agreement; Amendments.  This Guaranty constitutes the entire
          ----------------------------
agreement between Guarantors and the Lender Group or Agent on behalf thereof
pertaining to the subject matter contained herein.  This Guaranty may not be
altered, amended, or modified, nor may any provision hereof be waived or
noncompliance therewith consented to, except by means of a writing executed by
Guarantor and Agent on behalf of the Lender Group.  Any such alteration,
amendment, modification, waiver, or consent shall be effective only to the
extent specified therein and for the specific purpose for which given.  No
course of dealing and no delay or waiver of any right or default under this
Guaranty shall be deemed a waiver of any other, similar or dissimilar, right or
default or otherwise prejudice the rights and remedies hereunder.

     19.  Successors and Assigns.  This Guaranty shall be binding upon Guarantor
          ----------------------
and Guarantor's successors and assigns and shall inure to the benefit of the
successors and assigns of Agent; provided, however, that no Guarantor shall
                                 --------  -------
assign this Guaranty or delegate any of Guarantor's duties hereunder without
Agent's prior written consent and any unconsented to assignment shall be
absolutely void.  This Guaranty shall not terminate or be revoked upon the death
of Guarantor, notwithstanding any knowledge by any member of the Lender Group of
Guarantor's death.  In the event of Guarantor's death, the Maximum Guarantied
Principal Amount shall be reduced by the amount of any proceeds of any key
person life insurance policy with respect to such Guarantor received by Agent.
In the event of any assignment or other transfer of rights by Agent, the rights
and benefits herein conferred upon the Lender Group shall automatically extend
to and be vested in such assignee or other transferee.

     20.  No Third Party Beneficiary.  This Guaranty is solely for the benefit
          --------------------------
of the Lender Group and its successors and assigns and may not be relied on by
any other Person.

                                      10
<PAGE>

     21.  CHOICE OF LAW AND VENUE; JURY TRIAL WAIVER.
          ------------------------------------------

          THE VALIDITY OF THIS GUARANTY, ITS CONSTRUCTION, INTERPRETATION, AND
ENFORCEMENT, AND THE RIGHTS OF THE PARTIES HERETO WITH RESPECT TO ALL MATTERS
ARISING HEREUNDER OR RELATED HERETO SHALL BE DETERMINED UNDER, GOVERNED BY, AND
CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF CALIFORNIA.

          THE PARTIES AGREE THAT ALL ACTIONS OR PROCEEDINGS ARISING IN
CONNECTION WITH THIS GUARANTY SHALL BE TRIED AND LITIGATED ONLY IN THE STATE AND
FEDERAL COURTS LOCATED IN THE COUNTY OF LOS ANGELES, STATE OF CALIFORNIA, OR AT
THE SOLE OPTION OF AGENT, IN ANY OTHER COURT IN WHICH AGENT SHALL INITIATE LEGAL
OR EQUITABLE PROCEEDINGS AND WHICH HAS SUBJECT MATTER JURISDICTION OVER THE
MATTER IN CONTROVERSY.  GUARANTOR AND AGENT ON BEHALF OF THE LENDER GROUP
WAIVES, TO THE EXTENT PERMITTED UNDER APPLICABLE LAW, ANY RIGHT EACH MAY HAVE TO
ASSERT THE DOCTRINE OF FORUM NON CONVENIENS OR TO OBJECT TO VENUE TO THE EXTENT
ANY PROCEEDING IS BROUGHT IN CALIFORNIA IN ACCORDANCE WITH THIS SECTION 21.
                                                                ----------

          GUARANTOR AND AGENT ON BEHALF OF THE LENDER GROUP EACH HEREBY WAIVE
THEIR RESPECTIVE RIGHTS TO A JURY TRIAL OF ANY CLAIM OR CAUSE OF ACTION BASED
UPON OR ARISING OUT OF THIS GUARANTY OR ANY OF THE TRANSACTIONS CONTEMPLATED
HEREIN, INCLUDING CONTRACT CLAIMS, TORT CLAIMS, BREACH OF DUTY CLAIMS, AND ALL
OTHER COMMON LAW OR STATUTORY CLAIMS.  GUARANTOR AND AGENT ON BEHALF OF THE
LENDER GROUP REPRESENT THAT EACH HAS REVIEWED THIS WAIVER AND EACH KNOWINGLY AND
VOLUNTARILY WAIVES HIS OR ITS JURY TRIAL RIGHTS FOLLOWING CONSULTATION WITH
LEGAL COUNSEL.  IN THE EVENT OF LITIGATION, A COPY OF THIS AGREEMENT MAY BE
FILED AS A WRITTEN CONSENT TO A TRIAL BY THE COURT.

     22.  Limitation of Liability.
          -----------------------

          (a)  Anything contained in this Guaranty to the contrary
notwithstanding, the maximum liability of Guarantor to the Lender Group pursuant
to this Guaranty as of any time shall not under any circumstances exceed the
Maximum Guarantied Amount as of such time.

          (b)  No payment by any person or entity other than Guarantor
(including without limitation a Debtor or any other guarantor of the Guarantied
Obligations) with respect to the Guarantied Obligations shall reduce the
obligations of Guarantor hereunder unless and until the Guarantied Obligations
are fully and indefeasibly satisfied in cash and

                                      11
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the Lender Group has no further commitment to extend credit to Borrower. No
application of any collateral or proceeds thereof (other than any collateral
given by the Guarantor or any proceeds thereof) with respect to the Guarantied
Obligations shall reduce the obligations of Guarantor hereunder unless and until
the Guarantied Obligations are fully and indefeasibly satisfied in cash and the
Lender Group has no further commitment to extend credit to Borrower. Guarantor
expressly acknowledges and agrees that Guarantor's obligations hereunder shall
apply to the last outstanding Guarantied Obligations.

     23.  ADVICE OF COUNSEL.  GUARANTOR ACKNOWLEDGES THAT GUARANTOR HAS EITHER
          -----------------
OBTAINED THE ADVICE OF COUNSEL OR HAS HAD THE OPPORTUNITY TO OBTAIN SUCH ADVICE
IN CONNECTION WITH THE TERMS AND PROVISIONS OF THIS GUARANTY.

     24.  Termination. Anything contained in this Guaranty to the contrary
          -----------
notwithstanding, this Guaranty shall terminate on the earlier to occur of (i)
July 31, 2002, or if on such date an Event of Default has occurred and is
continuing, the first date thereafter upon which no Event of Default has
occurred and is continuing, or (ii) the payment of the Maximum Guarantied Amount
pursuant to the Limited Guaranty.  Upon such termination, Guarantor shall have
no further obligation hereunder.

                                      12
<PAGE>

          IN WITNESS WHEREOF, the undersigned has executed and delivered this
Guaranty as of the date first written above.


                                                   /s/ Ronald Elliott
                                             -----------------------------------
                                             RONALD ELLIOTT, an individual

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