Exhibit 10.21(c)

FORM OF

GUARANTY AGREEMENT DATED JULY 12, 2007

BETWEEN GUARANTOR AND BENAROYA CAPITAL

This Guaranty Agreement (this “Guaranty”) is made as of July 12, 2007, by Mary
Kay McCaw (“Guarantor”), in favor of BENAROYA CAPITAL COMPANY, L.L.C., a
Washington limited liability company (together with its universal successors,
participants and assigns “Lender”).

PRELIMINARY STATEMENTS

A. Lender previously agreed to make a loan (the “Loan”) to Tully’s Coffee
Corporation, a Washington corporation (“Borrower”), in the maximum principal
amount of Four Million and 00/100 Dollars ($4,000,000.00).

B. Borrower and Lender have agreed to increase the maximum principal amount of
the Loan to $10,000,000.00 and to extend the maturity date of the Loan.
Guarantor acknowledges that Lender would not increase the amount or extend the
maturity date of the Loan without Guarantor’s execution and delivery to Lender
of this Guaranty. Guarantor’s obligations hereunder are limited as set forth
herein.

C. The Loan is evidenced by that certain Secured Promissory Note dated April 26,
2007, as amended by that certain Amendment to Secured Promissory Note and
Security Agreement of even date herewith, executed by Borrower and payable to
the order of Lender in the principal face amount of up to Ten Million and 00/100
Dollars ($10,000,000.00) (such Promissory Note, as it may hereafter be renewed,
extended, supplemented, increased or modified and in effect from time to time,
and all other notes given in substitution therefor, or in modification, renewal,
or extension thereof, in whole or in part, is herein called the “Note”).

D. In connection with the Loan, Borrower previously executed that certain
Security Agreement dated April 26, 2007 (as amended, the “Security Agreement”).
The Note, this Guaranty and the Security Agreement, and all other documents now
or hereafter securing, guaranteeing or executed in connection with the Loan,
are, as the same have been or may be amended, restated, modified or supplemented
from time to time, herein sometimes called individually a “Loan Document” and
together the “Loan Documents”.

STATEMENT OF AGREEMENTS

For good and valuable consideration, the receipt and adequacy of which are
hereby acknowledged, and as a material inducement to Lender to extend credit to
Borrower, subject to the terms and conditions of Section 2, Guarantor hereby
guarantees to Lender the prompt and full payment and performance of the
indebtedness

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and obligations described below in this Guaranty to the extent that such
indebtedness and obligations exceed Five Million Dollars ($5,000,000) (said
amounts in excess of Five Million Dollars ($5,000,000) being referred to
collectively as the “Guaranteed Obligations”), this Guaranty being upon the
following terms and conditions:

1. Guaranty of Payment. Guarantor hereby unconditionally and irrevocably
guarantees to Lender the payment when due and before the occurrence of an Event
of Default (as defined in clause (b) of Section 3), whether by lapse of time, by
acceleration of maturity, or otherwise, of all principal, interest (including,
but not limited to, interest accruing after the commencement of any bankruptcy
or insolvency proceeding by or against Borrower, whether or not allowed in such
proceeding), fees, late charges, prepayment fees, costs, expenses, and other
sums of money now or hereafter due and owing, or which Borrower is obligated to
pay, pursuant to (a) the terms of the Note or any other Loan Documents,
including any indemnifications contained in the Loan Documents, now or hereafter
existing, and (b) all renewals, extensions, refinancings, modifications,
supplements or amendments of such indebtedness, or any of the Loan Documents, or
any part thereof (the indebtedness described in clauses (a) and (b) above in
this Section 1 is herein collectively called the “Indebtedness”). This Guaranty
covers the Indebtedness, whether presently outstanding or arising subsequent to
the date hereof, including all amounts advanced by Lender in stages or
installments. The guaranty of Guarantor as set forth in this Section 1 is a
continuing guaranty of payment and not a guaranty of collection. Lender may loan
money and provide business and financial accommodations to or for the benefit of
Borrower in excess of the Indebtedness without affecting Guarantor’s obligations
to Lender under this Guaranty.

2. Limitation of Guarantor’s Liability. Notwithstanding anything to the contrary
contained herein, the liability of Guarantor under this Guaranty shall not
exceed the sum of:

(a) the lesser of (i) 60% of all Guaranteed Obligations; and (ii) Three Million
Dollars ($3,000,000), which amount shall be specified in the notice from Lender
to Guarantor demanding payment hereunder; plus

(b) all interest accruing on the amount specified in the notice provided
pursuant to Section 2(a) from the date of such notice until Guarantor satisfies
all of its obligations under this Guaranty; plus

(c) all amounts owing pursuant to Section 11.

3. Primary Liability of Guarantor.

(a) This Guaranty is an absolute, irrevocable and unconditional guaranty of
payment and performance. Guarantor shall be liable for the payment and
performance of the Guaranteed Obligations as a primary obligor and Lender shall
not be obligated to seek contribution from any other guarantor prior to
enforcing its rights under this Guaranty. This Guaranty shall be effective as a
waiver of, and Guarantor hereby expressly waives, any and all rights to which
Guarantor may otherwise have been entitled under any suretyship laws in effect
from time to time, including any right or privilege, whether existing under
statute, at law or in equity, to require Lender to take prior recourse or
proceedings against any collateral, security or other party whatsoever.

(b) As used herein, the term “Event of Default” means the occurrence of one or
more of the following events, individually or collectively: (i) default by
Borrower in payment or performance of the Guaranteed Obligations, or any part
thereof, when such indebtedness or performance becomes due, either by its terms
or as the result of the exercise of any power to accelerate; (ii) the failure of
Guarantor to perform completely and satisfactorily the covenants, terms and
conditions of any of the Guaranteed Obligations; (iii) the dissolution or
insolvency of Guarantor, or the appointment of a conservator for Guarantor, and
such Guarantor is not replaced

 

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by another Guarantor satisfactory to Lender within thirty (30) days after the
occurrence of such event; (iv) the inability of Guarantor to pay debts as they
mature; (v) an assignment by Guarantor for the benefit of creditors; (vi) the
institution of any proceeding by or against Guarantor in bankruptcy or for a
reorganization or an arrangement with creditors, or for the appointment of a
receiver, trustee or custodian for any of them or for any of their respective
properties; (vii) the determination by Lender in good faith that a material
adverse change has occurred in the financial condition of Guarantor; (viii) the
issuance of a writ or order of attachment, levy or garnishment is issued against
Guarantor; (ix) the falsity in any material respect of, or any material omission
in, any representation made to Lender by Guarantor; or (x) any transfer of
substantially all of the assets of Guarantor, without the Lender’s prior
consent.

(c) Subject to the limitations set forth in Section 2, upon the occurrence of
any Event of Default, the Guaranteed Obligations, for purposes of this Guaranty,
shall be deemed immediately due and payable at the election of Lender, and
Guarantor shall, on demand and without presentment, protest, notice of protest,
further notice of nonpayment or of dishonor, default or nonperformance, or
notice of acceleration or of intent to accelerate, or any other notice
whatsoever, without any notice having been given to Guarantor prior to such
demand of the acceptance by Lender of this Guaranty, and without any notice
having been given to Guarantor prior to such demand of the creating or incurring
of such indebtedness, all such notices being hereby waived by Guarantor, pay the
amount due to Lender, and pay all damages and all costs and expenses that may
arise in consequence of such Event of Default (including all reasonable
attorneys’ fees and expenses, investigation costs, court costs, and any and all
other reasonable costs and expenses incurred by Lender in connection with the
collection and enforcement of the Note or any other Loan Document), whether or
not suit is filed thereon, or whether at maturity or by acceleration, or whether
before or after maturity, or whether in connection with bankruptcy, insolvency
or appeal. It shall not be necessary for Lender, in order to enforce such
payment by Guarantor, first to institute judicial or non-judicial foreclosure or
pursue or exhaust any rights or remedies against Borrower or others liable on
such indebtedness, or to enforce any rights against any security that shall ever
have been given to secure such indebtedness, or to join Borrower or any others
liable for the payment of the Guaranteed Obligations or any part thereof in any
action or proceeding to enforce this Guaranty, or to resort to any other means
of obtaining payment or performance of the Guaranteed Obligations; provided,
however, that nothing herein contained shall prevent Lender from foreclosing any
security agreement (a “Security Agreement”) now or hereafter securing all or any
part of the Guaranteed Obligations, or from exercising any other rights or
remedies under the Loan Documents, and if such foreclosure or other right or
remedy is availed of, only the net proceeds therefrom, after deduction of all
charges and expenses of every kind and nature whatsoever, shall be applied in
reduction of the amount due on the Note, and Lender shall not be required to
institute or prosecute proceedings to recover any deficiency as a condition of
payment hereunder or enforcement hereof. At any sale of any property encumbered
by a Security Agreement or other collateral given for the Indebtedness or any
part thereof, whether by foreclosure or otherwise, Lender may at its discretion
purchase all or any part of any property encumbered by a Security Agreement or
collateral so sold or offered for sale for its own account and may, in payment
of the amount bid therefor, deduct such amount from the balance due it pursuant
to the terms of the Note and the other Loan Documents. Collection action may be
taken or demand

 

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may be made against Borrower or against all parties who have signed this
Guaranty or any other guaranty covering all or any part of the Guaranteed
Obligations, or against any one or more of them, separately or together, without
impairing the rights of Lender against any other party hereto.

4. Certain Agreements and Waivers by Guarantor.

(a) Guarantor hereby agrees that neither Lender’s rights or remedies nor
Guarantor’s obligations under the terms of this Guaranty shall be released,
diminished, impaired, reduced or affected by any one or more of the following
events, actions, facts, or circumstances, and the liability of Guarantor under
this Guaranty shall be absolute and unconditional irrespective of: (i) any
limitation of liability or recourse in any other Loan Document or arising under
any law; (ii) any claim or defense that this Guaranty was made without
consideration or is not supported by adequate consideration; (iii) the taking or
accepting of any other security or guaranty for, or right of recourse with
respect to, any or all of the Guaranteed Obligations; (iv) any homestead
exemption or any other exemption under applicable law; (v) any release,
surrender, abandonment, exchange, alteration, sale or other disposition,
subordination, deterioration, waste, failure to protect or preserve, impairment,
or loss of, or any failure to create or perfect any lien or security interest
with respect to, or any other dealings with, any collateral or security at any
time existing or purported, believed or expected to exist in connection with any
or all of the Guaranteed Obligations, including any impairment of Guarantor’s
recourse against any person or entity or collateral; (vi) whether express or by
operation of law, any partial release of the liability of Guarantor hereunder,
or if one or more other guaranties are now or hereafter obtained by Lender
covering all or any part of the Guaranteed Obligations, any complete or partial
release of any one or more of such guarantors under any such other guaranty, or
any complete or partial release of Borrower or any other party liable, directly
or indirectly, for the payment or performance of any or all of the Guaranteed
Obligations; (vii) the death of Borrower or the appointment of a conservator or
guardian for Borrower; (viii) the insolvency, bankruptcy, dissolution,
liquidation, termination, receivership, reorganization, merger, consolidation,
change of form, structure or ownership, sale of all assets, or lack of
corporate, partnership or other power of Borrower or any other party at any time
liable for the payment of any or all of the Guaranteed Obligations; (ix) either
with or without notice to or consent of Guarantor: any renewal, extension,
modification, supplement, subordination or rearrangement of the terms of any or
all of the Guaranteed Obligations and/or any of the Loan Documents, including
material alterations of the terms of payment (including changes in maturity
date(s) and interest rate(s)) or performance or any other terms thereof, or any
waiver, termination, or release of, or consent to depart from, any of the Loan
Documents or any other guaranty of any or all of the Guaranteed Obligations, or
any adjustment, indulgence, forbearance, or compromise that may be granted from
time to time by Lender to Borrower, Guarantor, and/or any other person or entity
at any time liable for the payment or performance of any or all of the
Guaranteed Obligations; (x) any neglect, lack of diligence, delay, omission,
failure, or refusal of Lender to take or prosecute (or in taking or prosecuting)
any action for the collection or enforcement of any of the Guaranteed
Obligations, or to foreclose or take or prosecute any action to foreclose (or in
foreclosing or taking or prosecuting any action to foreclose) upon any security
therefor, or to exercise (or in exercising)

 

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any other right or power with respect to any security therefor, or to take or
prosecute (or in taking or prosecuting) any action in connection with any Loan
Document, or any failure to sell or otherwise dispose of in a commercially
reasonable manner any collateral securing any or all of the Guaranteed
Obligations; (xi) any failure of Lender to notify Guarantor of any creation,
renewal, extension, rearrangement, modification, supplement, subordination, or
assignment of the Guaranteed Obligations or any part thereof, or of any Loan
Document, or of any release of or change in any security, or of any other action
taken or refrained from being taken by Lender against Borrower or any security
or other recourse, or of any new agreement between Lender and Borrower, it being
understood that Lender shall not be required to give Guarantor any notice of any
kind under any circumstances with respect to or in connection with the
Guaranteed Obligations, any and all rights to notice Guarantor may have
otherwise had being hereby waived by Guarantor, and the Guarantor shall be
responsible for obtaining for itself information regarding the Borrower,
including, any changes in the business or financial condition of the Borrower,
and the Guarantor acknowledges and agrees that the Lender shall have no duty to
notify the Guarantor of any information which the Lender may have concerning the
Borrower; (xii) whether for any reason Lender is required to refund any payment
by Borrower to any other party liable for the payment or performance of any or
all of the Guaranteed Obligations, or to pay the amount thereof to someone else;
(xiii) the making of advances by Lender to protect its interest in any property
encumbered by a Security Agreement, to preserve the value of any property
encumbered by a Security Agreement or to facilitate performance of any term or
covenant contained in any of the Loan Documents; (xiv) the existence of any
claim, counterclaim, set-off or other right that Guarantor may at any time have
against Borrower, Lender, or any other person or entity, whether or not arising
in connection with this Guaranty, the Note or any other Loan Document; (xv) the
unenforceability of all or any part of the Guaranteed Obligations against
Borrower, whether because the Guaranteed Obligations exceed the amount permitted
by law or violate any usury law, or because the act of creating the Guaranteed
Obligations, or any part thereof, is ultra vires, or because the officers or
persons creating the Guaranteed Obligations acted outside the scope of their
authority, or because of a lack of validity or enforceability of or defect or
deficiency in any of the Loan Documents, or because Borrower has any valid
defense, claim or offset with respect thereto, or because Borrower’s obligation
ceases to exist by operation of law, or because of any other reason or
circumstance, it being agreed that Guarantor shall remain liable on this
Guaranty regardless of whether Borrower or any other person or entity be found
not liable for the Guaranteed Obligations, or any part thereof, for any reason
(and regardless of any joinder of Borrower or any other party in any action to
obtain payment or performance of any or all of the Guaranteed Obligations);
(xvi) any order, ruling or plan of reorganization emanating from proceedings
under Title 11 of the United States Code with respect to Borrower or any other
person or entity, including any extension, reduction, composition, or other
alteration of the Guaranteed Obligations, whether or not consented to by Lender;
or (xvii) any other condition, event, omission, action or inaction that would in
the absence of this Section 4(a) result in the release or discharge of the
Guarantor from the performance or observance of any obligation, covenant or
agreement contained in this Guaranty or any other agreement.

 

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(b) In the event any payment by Borrower or any other person or entity to Lender
is held to constitute a preference, fraudulent transfer or other voidable
payment under any bankruptcy, insolvency or similar law, or if for any other
reason Lender is required to refund such payment or pay the amount thereof to
any other party, such payment by Borrower or any other party to Lender shall not
constitute a release of Guarantor from any liability hereunder, and this
Guaranty shall continue to be effective or shall be reinstated (notwithstanding
any prior release, surrender or discharge by Lender of this Guaranty or of
Guarantor), as the case may be, with respect to, and this Guaranty shall apply
to, any and all amounts so refunded by Lender or paid by Lender to another
person or entity (which amounts shall constitute part of the Guaranteed
Obligations), and any interest paid by Lender and any reasonable attorneys’
fees, costs and expenses paid or incurred by Lender in connection with any such
event. It is the intent of Guarantor and Lender that the obligations and
liabilities of Guarantor hereunder are absolute and unconditional under any and
all circumstances and that, subject to the limitations set forth in Section 2,
until the Guaranteed Obligations are fully and finally paid, and not subject to
refund or disgorgement, the obligations and liabilities of Guarantor hereunder
shall not be discharged or released, in whole or in part, by any act or
occurrence that might, but for the provisions of this Guaranty, be deemed a
legal or equitable discharge or release of a guarantor.

(c) If acceleration of the time for payment of any amount payable by Borrower
under the Note or any other Loan Document is stayed or delayed by any law or
tribunal, all such amounts shall nonetheless be payable by Guarantor on demand
by Lender.

(d) Lender, at its option and in its sole discretion, may proceed against any
collateral securing any of the Guaranteed Obligations by way of judicial or
non-judicial foreclosure or any other lawful remedy for the enforcement of its
rights, and the obligations of Guarantor under this Guaranty shall survive
Lender’s exercise of any such right or remedy. Guarantor understands that
Lender’s exercise of its rights and remedies including a non-judicial
foreclosure of any Security Agreement could impair, eliminate or destroy
subrogation, reimbursement, contribution, indemnification and other rights
Guarantor may have against Borrower or others for amounts paid by Guarantor
under this Guaranty. Nevertheless, Guarantor hereby waives and relinquishes any
claim or defense based upon the loss of any such rights, election of remedies,
discharge and satisfaction of the Guaranteed Obligations and, to the fullest
extent permitted by law following a non-judicial foreclosure of any Security
Agreement, any other claim or defense which may arise under applicable law. If
any collateral securing the Guaranteed Obligations is foreclosed or realized
upon whether judicially or non-judicially before Lender proceeds against
Guarantor under this Guaranty, then Guarantor’s liability for the Guaranteed
Obligations shall be the deficiency resulting from the judicial or non-judicial
sale or other disposition; i.e., the difference between the amount of the
Guaranteed Obligations on the day of the foreclosure sale or other disposition
(including principal, accrued interest, reasonable attorneys’ fees including on
appeal or otherwise), late charges and costs and expenses of foreclosure or
other disposition) and the amount realized at the foreclosure sale or other
disposition. To the

 

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fullest extent permitted by law, Guarantor waives the right to object to the
amount that may be bid by Lender at any foreclosure sale. If not paid in full
within thirty (30) days following Lender’s demand, Guarantor’s liability for any
deficiency following a non-judicial foreclosure of any Security Agreement
securing any of the Guaranteed Obligations shall bear interest from the date of
the foreclosure sale, compounded monthly, at the default interest rate in the
Note

(e) Guarantor acknowledges that Lender has no obligation to Guarantor to make
any additional loans or advances to Borrower or to see to the proper use and
application of the funds so advanced. Guarantor understands that the Guaranteed
Obligations and this Guaranty can involve substantial risks for Guarantor and
agrees that Lender is not a trustee or fiduciary for Guarantor and undertakes no
duty, obligation, responsibility or special relationship to Guarantor or to see
to proper use and application of any loan or advance or otherwise to protect and
not act adversely to Guarantor’s interests. Any application or use of Loan
proceeds or advances for purposes other than those provided for in the Loan
Documents shall not defeat, limit or impair this Guaranty in whole or in part.

(f) Guarantor represents, warrants and covenants with Lender that Guarantor has
not presently guaranteed any other indebtedness of Borrower and shall not
guarantee any other indebtedness of Borrower unless such other lender shall
enter into a written agreement with Lender that this Guaranty shall be superior
to Guarantor’s guarantee of the other lender’s indebtedness, the form and
substance of such written agreement to be subject to Lender’s prior approval.

5. Subordination. If, for any reason whatsoever, Borrower is now or hereafter
becomes indebted to Guarantor:

(a) such indebtedness and all interest thereon and all liens, security interests
and rights now or hereafter existing with respect to property of Borrower
securing such indebtedness shall, at all times, be subordinate in all respects
to the Guaranteed Obligations and to all liens, security interests and rights
now or hereafter existing to secure the Guaranteed Obligations;

(b) Guarantor shall not be entitled to enforce or receive payment, directly or
indirectly, of any such indebtedness of Borrower to Guarantor until the
Guaranteed Obligations have been fully and finally paid; provided, however, that
notwithstanding the foregoing, Guarantor is not prohibited from receiving
(i) such reasonable management fees or reasonable salary from Borrower as Lender
may find acceptable from time to time, and (ii) distributions from Borrower in
an amount equal to any income taxes imposed on Guarantor which are attributable
to Borrower’s income from any property encumbered by a Security Agreement;

(c) Guarantor hereby assigns and grants to Lender a security interest in all
such indebtedness and security therefor, if any, of Borrower to Guarantor now
existing or hereafter arising, including any dividends and payments pursuant to
debtor relief or insolvency proceedings referred to below. In the event of
receivership, bankruptcy, reorganization, arrangement or other debtor relief or
insolvency proceedings involving Borrower as debtor,

 

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Lender shall have the right to prove its claim in any such proceeding so as to
establish its rights hereunder and shall have the right to receive directly from
the receiver, trustee or other custodian (whether or not an Event of Default
shall have occurred or be continuing under any of the Loan Documents), dividends
and payments that are payable upon any obligation of Borrower to Guarantor now
existing or hereafter arising, and to have all benefits of any security
therefor, until the Guaranteed Obligations have been fully and finally paid. If,
notwithstanding the foregoing provisions, Guarantor should receive any payment,
claim or distribution that is prohibited as provided above in this Section 5,
Guarantor shall pay the same to Lender immediately, Guarantor hereby agreeing
that it shall receive the payment, claim or distribution in trust for Lender and
shall have absolutely no dominion over the same except to pay it immediately to
Lender; and

(d) Guarantor shall promptly upon request of Lender from time to time execute
such documents and perform such acts as Lender may require to evidence and
perfect its interest and to permit or facilitate exercise of its rights under
this Section 5, including execution and delivery of financing statements, proofs
of claim, further assignments and security agreements, and delivery to Lender of
any promissory notes or other instruments evidencing indebtedness of Borrower to
Guarantor. All promissory notes, accounts receivable ledgers or other evidences,
now or hereafter held by Guarantor, of obligations of Borrower to Guarantor
shall contain a specific written notice thereon that the indebtedness evidenced
thereby is subordinated under and is subject to the terms of this Guaranty.

6. Other Liability of Guarantor or Borrower. If Guarantor is or becomes liable,
by endorsement or otherwise, for any indebtedness owing by Borrower to Lender
other than under this Guaranty, such liability shall not be in any manner
impaired or affected hereby, and the rights of Lender hereunder shall be
cumulative of any and all other rights that Lender may have against Guarantor.
If Borrower is or becomes indebted to Lender for any indebtedness other than or
in excess of the Indebtedness for which Guarantor is liable under this Guaranty,
any payment received or recovery realized upon such other indebtedness of
Borrower to Lender may, except to the extent paid by Guarantor on the
Indebtedness or specifically required by law or agreement of Lender to be
applied to the Indebtedness, in Lender’s sole discretion, be applied upon
indebtedness of Borrower to Lender other than the Indebtedness. This Guaranty is
independent of (and shall not be limited by) any other guaranty now existing or
hereafter given. Further, Guarantor’s liability under this Guaranty is in
addition to any and all other liability Guarantor may have in any other
capacity.

7. Lender Assigns. This Guaranty is for the benefit of Lender and Lender’s
universal successors, participants and assigns. Lender may, at any time, sell,
transfer, or assign the Guaranteed Obligations and the Loan Documents, and any
or all servicing rights with respect thereto, or grant participations herein or
issue mortgage pass-through certificates or other securities evidencing a
beneficial interest in a rated or unrated public offering or private placement.
In the event of any such sale, transfer or assignment of the Guaranteed
Obligations, or any part thereof, the rights and benefits under this Guaranty,
to the extent applicable to the Guaranteed Obligations so sold, transferred or
assigned, may be transferred with such

 

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Guaranteed Obligations. Guarantor waives notice of any sale, transfer or
assignment of the Guaranteed Obligations or any part thereof, and agrees that
failure to give notice of any such sale, transfer or assignment will not affect
the liabilities of Guarantor hereunder. Lender is hereby authorized to
disseminate any information it now has or hereafter obtains pertaining to the
Guaranteed Obligations or this Guaranty, including credit or other information
on Borrower, Guarantor and/or any party liable, directly or indirectly, for any
part of the Guaranteed Obligations, to any actual or prospective assignee or
participant with respect to the Guaranteed Obligations, to any of Lender’s
affiliates, to any regulatory body having jurisdiction over Lender, and to other
parties as necessary or appropriate in Lender’s reasonable judgment.

8. Binding Effect. This Guaranty is binding not only on Guarantor, but also on
Guarantor’s heirs, personal representatives, successors and assigns; provided,
however, that Guarantor may not assign this Guaranty, or assign or delegate any
of its right or obligations under this Guaranty, without the prior written
consent of Lender in each instance. Upon the death of Guarantor, if Guarantor is
a natural person or entity, this Guaranty shall continue against Guarantor’s
estate as to all of the Guaranteed Obligations, including that portion incurred
or arising after the death of Guarantor and shall be provable in full against
Guarantor’s estate, whether or not the Guaranteed Obligations are then due and
payable.

9. Governing Law; Forum; Consent to Jurisdiction. The validity, enforcement, and
interpretation of this Guaranty, shall for all purposes be governed by and
construed in accordance with the laws of the State of Washington and applicable
United States federal law, and is intended to be performed in accordance with,
and only to the extent permitted by, such laws. All obligations of Guarantor
hereunder are payable and performable at the place or places where the
Guaranteed Obligations are payable and performable. Guarantor hereby irrevocably
submits generally and unconditionally for Guarantor and in respect of
Guarantor’s property to the nonexclusive jurisdiction of any state court, or any
United States federal court, sitting or having jurisdiction in the state
specified in the first sentence of this Section and to the jurisdiction of any
state or United States federal court sitting or having jurisdiction in the state
of Washington, over any suit, action or proceeding arising out of or relating to
this Guaranty or the Guaranteed Obligations. Guarantor hereby irrevocably
waives, to the fullest extent permitted by law, any objection that Guarantor may
now or hereafter have to the laying of venue in any such court and any claim
that any such court is an inconvenient forum. Final judgment in any such suit,
action or proceeding brought in any such court shall be conclusive and binding
upon Guarantor and may be enforced in any court in which Guarantor is subject to
jurisdiction. Guarantor hereby agrees and consents that, in addition to any
methods of service of process provided for under applicable law, all service of
process in any such suit, action or proceeding in any state court, or any United
States federal court, sitting or having jurisdiction in the state specified in
the first sentence of this Section may be made by certified or registered mail,
return receipt requested, directed to Guarantor at the address set forth at the
end of this Guaranty, or at a subsequent address of which Lender receives actual
notice from Guarantor in accordance with the notice provisions hereof, and
service so made shall be complete five (5) days after the same shall have been
so mailed. Nothing herein shall affect the right of Lender to serve process in
any manner permitted by law or limit the right of Lender to bring proceedings
against Guarantor in

 

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any other court or jurisdiction. Guarantor hereby releases, to the extent
permitted by applicable law, all errors and all rights of exemption, appeal,
stay of execution, inquisition, and other rights to which the Guarantor may
otherwise be entitled under the laws of the United States of America or any
State or possession of the United States of America now in force or which may
hereinafter be enacted. The authority and power to appear for and enter judgment
against the Guarantor shall not be exhausted by one or more exercises thereof or
by any imperfect exercise thereof and shall not be extinguished by any judgment
entered pursuant thereto. Such authority may be exercised on one or more
occasions or from time to time in the same or different jurisdiction as often as
the Lender shall deem necessary and desirable.

10. Invalidity of Certain Provisions. If any provision of this Guaranty or the
application thereof to any person or entity or circumstance shall, for any
reason and to any extent, be declared to be invalid or unenforceable, neither
the remaining provisions of this Guaranty nor the application of such provision
to any other person or entity or circumstance shall be affected thereby, and the
remaining provisions of this Guaranty, or the applicability of such provision to
other persons or entities, or circumstances, as applicable, shall remain in
effect and be enforceable to the maximum extent permitted by applicable law.

11. Attorneys’ Fees and Costs of Collection. Guarantor shall pay on demand all
reasonable attorneys’ fees and all other costs and expenses incurred by Lender
in the enforcement of or preservation of Lender’s rights under this Guaranty
including all reasonable attorneys’ fees and expenses, investigation costs, and
all court costs, whether or not suit is filed hereon, or whether at maturity or
by acceleration, or whether before or after maturity, or whether in connection
with bankruptcy, insolvency or appeal, or whether in connection with the
collection and enforcement of this Guaranty against any other Guarantor, if
there be more than one. Guarantor agrees to pay interest on any expenses or
other sums due to Lender under this Section 11 that are not paid when due, at a
rate per annum equal to the default interest rate provided for in the Note.
Guarantor’s obligations and liabilities under this Section 11 shall survive any
payment or discharge in full of the Guaranteed Obligations.

12. Payments. All sums payable under this Guaranty shall be paid in lawful money
of the United States of America that at the time of payment is legal tender for
the payment of public and private debts.

13. Controlling Agreement. It is not the intention of Lender or Guarantor to
obligate Guarantor to pay interest in excess of that lawfully permitted to be
paid by Guarantor under applicable law. Should it be determined that any portion
of the Guaranteed Obligations or any other amount payable by Guarantor under
this Guaranty constitutes interest in excess of the maximum amount of interest
that Guarantor, in Guarantor’s capacity as guarantor, may lawfully be required
to pay under applicable law, the obligation of Guarantor to pay such interest
shall automatically be limited to the payment thereof in the maximum amount so
permitted under applicable law. The provisions of this Section 13 shall override
and control all other provisions of this Guaranty and of any other agreement
between Guarantor and Lender.

 

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14. Representations, Warranties, and Covenants of Guarantor. Guarantor hereby
represents, warrants, and covenants that:

(a) Guarantor has a financial interest in the Borrower and will derive a
material and substantial benefit, directly or indirectly, from the making of the
Loan to Borrower and from the making of this Guaranty by Guarantor;

(b) this Guaranty is duly authorized and valid, and is binding upon and
enforceable against Guarantor;

(c) Guarantor is not, and the execution, delivery and performance by Guarantor
of this Guaranty will not cause Guarantor to be, in violation of or in default
with respect to any law or in default (or at risk of acceleration of
indebtedness) under any agreement or restriction by which Guarantor is bound or
affected;

(d) Guarantor will indemnify Lender from any loss, cost or expense as a result
of any representation or warranty of the Guarantor being false, incorrect,
incomplete or misleading in any material respect;

(e) there is no litigation pending or, to the knowledge of Guarantor, threatened
before or by any tribunal against or affecting Guarantor which would have a
material adverse impact on Guarantor’s ability to pay and perform its
obligations under this Guaranty;

(f) after giving effect to this Guaranty, Guarantor is solvent, is not engaged
or about to engage in business or a transaction for which the property of
Guarantor is an unreasonably small capital, and does not intend to incur or
believe that it will incur debts that will be beyond its ability to pay as such
debts mature;

(g) Lender has no duty at any time to investigate or inform Guarantor of the
financial or business condition or affairs of Borrower or any change therein,
and Guarantor will keep fully apprised of Borrower’s financial and business
condition;

(h) Guarantor acknowledges and agrees that Guarantor may be required to pay and
perform the Guaranteed Obligations in full without assistance or support from
Borrower or any other person or entity; and

 

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(i) Guarantor has read and fully understands the provisions contained in the
Note and the other Loan Documents and is satisfied with the same in all
respects.

Guarantor’s representations, warranties and covenants are a material inducement
to Lender to enter into the other Loan Documents and shall survive the execution
hereof and any bankruptcy, foreclosure, transfer of security or other event
affecting Borrower, Guarantor, any other party, or any security for all or any
part of the Guaranteed Obligations.

15. Notices. All notices, requests, consents, demands and other communications
required or which any party desires to give hereunder or under any other Loan
Document shall be in writing and, unless otherwise specifically provided in such
other Loan Document, shall be deemed sufficiently given or furnished if
delivered by personal delivery, by courier, or by registered or certified United
States mail, return receipt requested, postage prepaid, addressed to the party
to whom directed at the addresses specified in this Guaranty (unless changed by
similar notice in writing given by the particular party whose address is to be
changed). Any such notice or communication shall be deemed to have been given
either at the time of personal delivery or, in the case of courier or mail, as
of the date of first attempted delivery at the address and in the manner
provided herein; provided that, service of a notice required by any applicable
statute shall be considered complete when the requirements of that statute are
met. Notwithstanding the foregoing, no notice of change of address shall be
effective except upon actual receipt. This Section shall not be construed in any
way to affect or impair any waiver of notice or demand provided in this Guaranty
or in any Loan Document or to require giving of notice or demand to or upon any
person or entity in any situation or for any reason.

16. Cumulative Rights. The exercise by Lender of any right or remedy hereunder
or under any other Loan Document, or at law or in equity, shall not preclude the
concurrent or subsequent exercise of any other right or remedy. Lender shall
have all rights, remedies and recourses afforded to Lender by reason of this
Guaranty or any other Loan Document or by law or equity or otherwise, and the
same (a) shall be cumulative and concurrent, (b) may be pursued separately,
successively or concurrently against Guarantor or others obligated for the
Guaranteed Obligations, or any part thereof, or against any one or more of them,
or against any security or otherwise, at the sole and absolute discretion of
Lender, (c) may be exercised as often as occasion therefor shall arise, it being
agreed by Guarantor that the exercise of, discontinuance of the exercise of or
failure to exercise any of such rights, remedies, or recourses shall in no event
be construed as a waiver or release thereof or of any other right, remedy, or
recourse, and (d) are intended to be, and shall be, nonexclusive. No waiver of
any default on the part of Guarantor or of any breach of any of the provisions
of this Guaranty or of any other document shall be considered a waiver of any
other or subsequent default or breach, and no delay or omission in exercising or
enforcing the rights and powers granted herein or in any other document shall be
construed as a waiver of such rights and powers, and no exercise or enforcement
of any rights or powers hereunder or under any other document shall be held to
exhaust such rights and powers, and every such right and power may be exercised
from time to time. The granting of any consent, approval or waiver by Lender
shall be limited to the specific instance and purpose therefor and shall not
constitute consent or approval in any other instance or for any other

 

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purpose. No notice to or demand on Guarantor in any case shall of itself entitle
Guarantor to any other or further notice or demand in similar or other
circumstances. No provision of this Guaranty or any right, remedy or recourse of
Lender with respect hereto, or any default or breach, can be waived, nor can
this Guaranty or Guarantor be released or discharged in any way or to any
extent, except specifically in each case by a writing intended for that purpose
(and which refers specifically to this Guaranty) executed, and delivered to
Guarantor, by Lender.

17. Term of Guaranty. This Guaranty shall continue in effect until all the
Guaranteed Obligations are fully and finally paid, performed and discharged,
except that, and notwithstanding any return of this Guaranty to Guarantor, this
Guaranty shall continue in effect (a) with respect to any of the Guaranteed
Obligations that survive the full and final payment of the indebtedness
evidenced by the Note, (b) with respect to all obligations and liabilities of
Guarantor under Section 11, and (c) as provided in Section 4(b).

18. Subrogation. Notwithstanding anything to the contrary contained herein,
Guarantor shall not have any right of subrogation in or under any of the Loan
Documents or to participate in any way therein, or in any right, title or
interest in and to any security or right of recourse for the Indebtedness or any
right to reimbursement, exoneration, contribution, indemnification or any
similar rights, until the Indebtedness has been fully and finally paid. This
waiver is given to induce Lender to make the Loan to Borrower.

19. Further Assurances. Guarantor at Guarantor’s expense will promptly execute
and deliver to Lender upon Lender’s request all such other and further
documents, agreements, and instruments in compliance with or accomplishment of
the agreements of Guarantor under this Guaranty.

20. No Fiduciary Relationship. The relationship between Lender and Guarantor is
solely that of lender and guarantor. Lender has no fiduciary or other special
relationship with or duty to Guarantor and none is created hereby or may be
inferred from any course of dealing or act or omission of Lender.

21. Interpretation. Lender may pursue Guarantor hereunder without being required
(a) to pursue Borrower or any other person or entity, or (b) pursue rights and
remedies under any Security Agreement and/or applicable law with respect to any
property encumbered by a Security Agreement, or any other Loan Documents. Each
married individual who executes this Guaranty represents to Lender that (a) the
Guaranteed Obligations are of substantial and material benefit to his or her
marital community, (b) this Guaranty is a community purpose guaranty, and (c) he
or she intends to bind both his or her separate estate and his or her marital
community for payment of the Guaranteed Obligations. The term “Lender” shall be
deemed to include any subsequent holder(s) of the Note. Whenever the context of
any provisions hereof shall require it, words in the singular shall include the
plural, words in the plural shall include the singular, and pronouns of any
gender shall include the other gender. Captions and headings in the Loan
Documents are for convenience only and shall not affect the construction of the
Loan Documents. All references in this Guaranty to Schedules, Articles,
Sections, Subsections,

 

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paragraphs and subparagraphs refer to the respective subdivisions of this
Guaranty, unless such reference specifically identifies another document. The
terms “herein”, “hereof”, “hereto”, “hereunder” and similar terms refer to this
Guaranty and not to any particular Section or subsection of this Guaranty. The
terms “include” and “including” shall be interpreted as if followed by the words
“without limitation”. All references in this Guaranty to sums denominated in
dollars or with the symbol “$” refer to the lawful currency of the United States
of America, unless such reference specifically identifies another currency.

22. Time of Essence. Time shall be of the essence in this Guaranty with respect
to all of Guarantor’s obligations hereunder.

23. Counterparts. This Guaranty may be executed in multiple counterparts, each
of which, for all purposes, shall be deemed an original, and all of which taken
together shall constitute but one and the same agreement.

24. Entire Agreement. This Guaranty embodies the entire agreement between Lender
and Guarantor with respect to the guaranty by Guarantor of the Guaranteed
Obligations. This Guaranty supersedes all prior agreements and understandings,
if any, with respect to the guaranty by Guarantor of the Guaranteed Obligations.
No condition or conditions precedent to the effectiveness of this Guaranty
exist. This Guaranty shall be effective upon execution by Guarantor and delivery
to Lender. This Guaranty may not be modified, amended or superseded except in a
writing signed by Lender and Guarantor referencing this Guaranty by its date and
specifically identifying the portions hereof that are to be modified, amended or
superseded.

25. Waiver of Jury Trial. BORROWER AND LENDER WAIVE TRIAL BY JURY IN RESPECT OF
ANY CONTROVERSIES OR CLAIMS BETWEEN GUARANTOR AND LENDER, WHETHER ARISING IN
CONTRACT, OR TORT OR BY STATUTE, THAT ARISE OUT OF OR RELATE TO (I) THIS
GUARANTY (INCLUDING ANY RENEWALS, EXTENSIONS OR MODIFICATIONS), OR (II) ANY OF
THE OTHER LOAN DOCUMENTS (COLLECTIVELY A “CLAIM”). THIS WAIVER IS KNOWINGLY,
WILLINGLY AND VOLUNTARILY MADE BY GUARANTOR AND LENDER, AND GUARANTOR AND LENDER
HEREBY REPRESENT THAT NO REPRESENTATIONS OF FACT OR OPINION HAVE BEEN MADE BY
ANY PERSON OR ENTITY TO INDUCE THIS WAIVER OF TRIAL BY JURY OR TO IN ANY WAY
MODIFY OR NULLIFY ITS EFFECT. THIS PROVISION IS A MATERIAL INDUCEMENT FOR THE
PARTIES ENTERING INTO THIS GUARANTY AND THE LOAN DOCUMENTS. GUARANTOR AND LENDER
ARE EACH HEREBY AUTHORIZED TO FILE A COPY OF THIS SECTION 25 IN ANY PROCEEDING
AS CONCLUSIVE EVIDENCE OF THIS WAIVER OF JURY TRIAL. GUARANTOR FURTHER
REPRESENTS AND WARRANTS THAT IT HAS BEEN REPRESENTED IN THE SIGNING OF THIS
GUARANTY AND IN THE MAKING OF THIS WAIVER BY INDEPENDENT LEGAL COUNSEL, OR HAS
HAD THE OPPORTUNITY TO BE REPRESENTED BY INDEPENDENT LEGAL COUNSEL

 

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SELECTED OF GUARANTOR’S OWN FREE WILL, AND THAT GUARANTOR HAS HAD THE
OPPORTUNITY TO DISCUSS THIS WAIVER WITH COUNSEL.

THIS GUARANTY AND THE WRITTEN LOAN DOCUMENTS REPRESENT THE FINAL AGREEMENT
BETWEEN THE PARTIES AND MAY NOT BE CONTRADICTED BY EVIDENCE OF PRIOR,
CONTEMPORANEOUS, OR SUBSEQUENT ORAL AGREEMENTS OF THE PARTIES.

ORAL AGREEMENTS OR ORAL COMMITMENTS TO LOAN MONEY, EXTEND CREDIT OR TO FORBEAR
FROM ENFORCING REPAYMENT OF A DEBT ARE NOT ENFORCEABLE UNDER WASHINGTON LAW.

THIS GUARANTY RESULTS IN YOUR WAIVER OF CERTAIN LEGAL RIGHTS AND DEFENSES,
INCLUDING SUBROGATION RIGHTS AND ANY DEFENSE BASED ON THE LENDER’S ELECTION OF
REMEDIES. IT IS RECOMMENDED YOU CONSULT WITH YOUR OWN ATTORNEY BEFORE ENTERING
INTO THIS AGREEMENT.

I CLEARLY UNDERSTAND THAT LENDER DOES NOT HAVE TO PURSUE THE BORROWER OR ANY
OTHER OBLIGATED PARTY OR FORECLOSE OR REALIZE UPON ANY COLLATERAL BEFORE
DEMANDING AND ENFORCING PAYMENT FROM ME. I FURTHER UNDERSTAND THAT, SUBJECT TO
THE LIMITATIONS SET FORTH IN SECTION 2, I WILL HAVE TO PAY THE AMOUNTS THEN DUE
EVEN IF BORROWER OR ANY OTHER GUARANTOR OR OBLIGATED PARTY DOES NOT MAKE PAYMENT
OR IS OTHERWISE RELIEVED OF THE OBLIGATION OF MAKING PAYMENT.

[Signature of Guarantor Appears on the Following Page]

 

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IN WITNESS WHEREOF, Guarantor duly executed this Guaranty as of the date first
written above.

 

GUARANTOR:     Mary Kay McCaw Address of Guarantor:

Davis Wright Tremaine LLP

Attn: Joseph D. Weinstein

Suite 2200

1201 Third Avenue

Seattle, WA 98101-3045

Lender’s address for notices:

1100 Olive Way, Suite 1700

Seattle, WA 98101

Attention: Larry R. Benaroya

With a copy to:

David N. Lombard, Esq.

Jameson, Babbitt, Stites & Lombard, P.L.L.C.

999 Third Avenue, Suite 1900

Seattle, WA 98104

 

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