GUARANTY AGREEMENT
In this agreement "Guarantor" refers to each person, partnership,
corporation, limited liability company, association or legal entity which signs
this agreement. "Bank" refers to Bank of America National Trust and Savings
Association, doing business as Seafirst Bank, its successor and assigns.
1. GUARANTOR'S PROMISE TO REIMBURSE BANK FOR BORROWER'S OBLIGATION TO
BANK.
To induce Bank to lend money, or extend other credit to KEYSTONE
ACQUISITION CORP., a Washington corporation ("Borrower"), or for other
consideration, Guarantor guarantees payment to Bank of all the Obligations.
"Obligations" means all principal, interest, late charges, loan fees, collection
costs and expenses, attorneys' fees and legal expenses (including the allocated
cost of in-house counsel, and including all legal fees incurred in any action,
bankruptcy proceeding, arbitration or other alternative dispute resolution
proceeding, or appeal, or in the course of exercising any judicial or
nonjudicial remedies) which Borrower may now owe to Bank or for which Borrower
may become obligated to pay or reimburse Bank for in the future, under
promissory notes or other instruments executed by Borrower, and any other
obligation which may arise from Borrower to Bank of any kind or type and, shall
also mean all "Obligations" as such term is defined in the Credit Agreement
dated as of April 30, 1999, between Borrower and Bank.
2. BENEFIT FROM GUARANTOR'S PROMISE.
Guarantor is either financially interested in Borrower or will receive
other benefits, directly or indirectly, as a result of Guarantor's promise.
3. BANK'S RIGHT NOT TO PROCEED AGAINST BORROWER OR OTHERS.
Guarantor's promise is joint and several as to each of the individuals or
entities signing below. Bank may enforce each Guarantor's promise without
attempting to collect Borrower's Obligations from Borrower, any co-maker, any
other guarantor, or anyone else who is liable for Borrower's Obligations.
4. BANK'S RIGHT NOT TO PROCEED AGAINST COLLATERAL.
Bank may enforce Guarantor's promise without attempting to enforce Bank's
rights in any collateral Bank now has or may later acquire as security for
Borrower's Obligations.
5. OTHER RIGHTS OF BANK AND GUARANTOR'S WAIVER OF NOTICE.
Bank may do any of the following things as many times as Bank wishes,
without Guarantor's permission and without notifying Guarantor, and this will
not affect Guarantor's promise:
(a) Bank may extend the time for repayment of any of Borrower's
Obligations.
(b) Bank may renew any of Borrower's Obligations.
(c) Bank may stop lending money or extending other credit to Borrower.
(d) Bank may make any other changes in its agreement with Borrower.
(e) Bank may exchange or release any collateral Bank now holds or may
later acquire as security for Borrower's Obligations.
(f) Bank may apply any money or collateral received from or on behalf of
Borrower to the repayment of any of Borrower's Obligations in any
order Bank wishes.
6. GUARANTOR'S ADDITIONAL WAIVERS OF NOTICE.
Bank does not have to notify Guarantor of any of the following events and
this will not affect Guarantor's promise:
(a) Bank does not have to notify Guarantor of Bank's acceptance of
Guarantor's promise.
(b) Bank does not have to notify Guarantor when Bank lends money, leases
equipment or extends other credit to Borrower or acquires Obligations
of Borrower.
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(c) Bank does not have to notify Guarantor of Borrower's failure to pay
Borrower's Obligations when due, or of Borrower's failure to perform
any other duty owed to Bank when required.
Bank will use its reasonable efforts to notify Guarantor of any failure by
Borrower to pay the Obligations when due; provided, however, any reasonable
failure or delay by Bank in doing so shall not affect Guarantor's promise.
7. GUARANTOR'S DUTY TO KEEP INFORMED OF BORROWER'S FINANCIAL CONDITION.
Guarantor is now adequately informed of Borrower's financial condition, and
Guarantor agrees to keep so informed. Bank does not have to provide Guarantor
with any present or future information concerning the financial condition of
Borrower, and this does not affect Guarantor's promise. Guarantor has not
relied on financial information furnished by Bank.
8. GUARANTOR'S AGREEMENT TO POSTPONE RIGHTS AGAINST BORROWER.
By paying Bank under this agreement, Guarantor may acquire rights against
Borrower such as subrogation rights. Guarantor agrees not to exercise any of
those rights until Borrower has fully paid its Obligations to Bank.
9. GUARANTOR'S ASSIGNMENT OF RIGHTS AGAINST BORROWER.
Guarantor assigns to Bank all rights Guarantor may have against Borrower or
Borrower's property in any proceeding under the federal Bankruptcy Code, or any
receivership or insolvency proceeding. This assignment includes all rights of
Guarantor to be paid by Borrower even though they have nothing to do with this
agreement. However, when Bank has been fully paid everything owed under
Guarantor's promise, Guarantor may then enforce any of these rights which still
remain. This assignment does not prevent Bank from enforcing Guarantor's
promise in any way.
10. ATTORNEY'S FEES AND COLLECTION EXPENSES.
Guarantor agrees to pay a reasonable attorneys' fee and all other costs and
expenses which Bank may incur in enforcing or defending this agreement, whether
or not a lawsuit is started.
11. LAW THAT APPLIES AND WHERE GUARANTOR MAY BE SUED.
This agreement is governed by Washington law. Guarantor consents to the
personal jurisdiction of the courts of the State of Washington and the federal
courts located in Washington so that Bank may xxx Guarantor in Washington to
enforce this agreement. Guarantor agrees not to claim that Washington is an
inconvenient place for trial. At Bank's option, the venue (location) of any
suit to enforce this agreement may be in Seattle, Washington.
12. MANDATORY ARBITRATION.
(a) At the request of either Bank or Guarantor, any controversy or claim
between Bank and Guarantor, arising from or relating to this
agreement, or arising from an alleged tort, shall be settled by
arbitration in Seattle, Washington. The United States Arbitration Act
shall apply even though this agreement is otherwise governed by
Washington law. The proceedings shall be administered by the American
Arbitration Association under its commercial rules of arbitration.
Any controversy over whether an issue is arbitrable shall be
determined by the arbitrator(s). Judgment upon the arbitration award
may be entered in any court having jurisdiction over the parties. The
institution and maintenance of an action for judicial relief or
pursuit of an ancillary or provisional remedy shall not constitute a
waiver of the right of either party, including the plaintiff, to
submit the controversy or claim to arbitration if such action for
judicial relief is contested. For purposes of the application of the
statute of limitations, the filing of an arbitration pursuant to this
subsection is the equivalent of the filing of a lawsuit, and any claim
or controversy which may be arbitrated under this subsection is
subject to any applicable statute of limitations. The arbitrator(s)
will have the authority to decide whether any such claim or
controversy is barred by the statute of limitations and, if so, to
dismiss the arbitration on that basis. The parties consent to the
joinder of any guarantor, hypothecator, or other party having an
interest relating to the claim or controversy being arbitrated in any
proceedings under this Section.
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(b) Notwithstanding the provisions of subsection (a), no controversy or
claim shall be submitted to arbitration without the consent of all
parties if at the time of the proposed submission, such controversy or
claim arises from or relates to an obligation secured by real
property.
(c) No provision of this subsection shall limit the right of Guarantor or
Bank to exercise self-help remedies such as set-off, foreclosure,
retention or sale of any collateral, or obtaining any ancillary,
provisional, or interim remedies from a court of competent
jurisdiction before, after, or during the pendency of any arbitration
proceeding. The exercise of any such remedy does not waive the right
of either party to request arbitration.
13. COUNTERPARTS.
This agreement may be signed in any number of counterparts, each of which
shall be an original, with the same effect as if the signatures to such
counterparts were upon the same instrument. This agreement shall become
effective as to each Guarantor when a counterpart signed by such Guarantor is
received, regardless of whether all other counterparts are received.
14. WHOLE AGREEMENT.
This agreement, including all counterparts, constitutes the entire
understanding between Bank and Guarantor concerning the guaranty reflected by
this agreement, and it may be changed only in writing signed by Bank and
Guarantor.
GUARANTOR HAS READ THIS AGREEMENT AND RECEIVED A COPY. BY SIGNING THIS
AGREEMENT, GUARANTOR AGREES TO ITS TERMS. GUARANTOR UNDERSTANDS THAT, AS A
RESULT, GUARANTOR IS LIABLE FOR THE OBLIGATIONS OF BORROWER IF BORROWER FAILS TO
PAY BANK WHEN THEY ARE DUE. IF THIS HAPPENS, BANK MAY, IF IT WANTS, REQUIRE
GUARANTOR TO PAY BORROWER'S OBLIGATIONS.
Dated as of April 30, 1999.
Guarantor:
XXXXXX.XXX, INC.
By: /s/ Xxxxxxx Xxxxxx
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Title: President and CEO
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