<PAGE>
 
                                                                   EXHIBIT 10.31


Execution Copy

                            GUARANTY OF SUBSIDIARY
                             BULRAD ILLINOIS, INC.

          THIS GUARANTY, dated as of January 29, 1999, is made and given by
BULRAD ILLINOIS, INC., an Illinois corporation (the "Guarantor").

                                   RECITALS

          A. Omega Cabinets, Ltd., a Delaware corporation (the "Borrower"),
certain financial institutions and U.S. Bank National Association, as agent,
have entered into an Amended and Restated Credit Agreement dated as of January
29, 1999 (as the same may hereafter be amended, restated, or otherwise modified
from time to time, the "Credit Agreement").  Capitalized terms used in this
Guaranty without definition shall have the meaning given in the Credit
Agreement.

          B.   The Guarantor is a wholly-owned subsidiary of the Borrower.

          C.   It is a condition precedent to the obligation of the Bank to
continue extending credit accommodations pursuant to the terms of the Credit
Agreement that this Guaranty be executed and delivered by the Guarantor.

          D.   The Guarantor expects to derive benefits from the extension of
credit accommodations to the Borrower by the Banks and finds it advantageous,
desirable and in its best interests to execute and deliver this Guaranty to the
Banks.

          NOW, THEREFORE, In consideration of the credit accommodations to be
extended to the Borrower and for other good and valuable consideration, the
Guarantor hereby covenants and agrees with the Banks as follows:

          Section 1.  Defined Terms.  As used in this Guaranty, the following
                      -------------                                          
terms shall have the meaning indicated:

          "Agent" shall mean U.S. Bank National Association, acting as agent for
           -----                                                                
the benefit of itself and the other Banks, or such other institution as may be
appointed as "Agent" under the Credit Agreement.

          "Banks" shall mean the institutions that are from time to time party
           -----                                                              
to the Credit Agreement as lenders.

          "Borrower" shall have the meaning indicated in Recital A.
           --------                                                

          "Credit Agreement" shall have the meaning indicated in Recital A.
           ----------------                                                
<PAGE>
 
          "Guarantor" shall have the meaning indicated in the opening paragraph
           ---------                                                           
hereof.

          "Intercreditor Agreement" shall mean that certain Intercreditor
           -----------------------                                       
Agreement by and among the Agent, the Banks, Canadian Imperial Bank of Commerce
("CIBC") and the other banks party to the CIBC Loan Documents (as defined in the
Credit Agreement) (collectively, the "Lenders") in form and substance acceptable
to the Agent and the Lenders (as defined therein), executed by a duly authorized
officer of each of the Lenders and dated the Closing Date.

          "Obligations" shall mean all indebtedness, liabilities and obligations
           -----------                                                          
of the Borrower to the Banks and the Agent of every kind, nature or description
under the Credit Agreement, including without limitation the Borrower's
obligation on any promissory note or notes under the Credit Agreement and any
note or notes hereafter issued in substitution or replacement thereof and any
letter of credit reimbursement obligations and fees, and in all of the foregoing
cases whether due or to become due, and whether now existing or hereafter
arising or incurred.

          "Person" shall mean any individual, corporation, partnership, joint
           ------                                                            
venture, firm, association, trust, unincorporated organization, government or
governmental agency or political subdivision, limited liability company or
partnership or any other entity, whether acting in an individual, fiduciary or
other capacity.

          "Pledge Agreements": Collectively, (i) the Amended and Restated Pledge
           ----------------                                                     
Agreement whereby the Borrower pledges all of its Stock in its Subsidiaries to
the Agent for the benefit of the Lenders, (ii) the Amended and Restated Pledge
Agreement whereby Holdings pledges all of its Stock in the Borrower to the Agent
for the benefit of the Lenders, (iii) the Pledge Agreement whereby KC Holdings
pledges sixty-five percent of its Stock in New Kitchen Craft together with the
Kitchen Craft Note to the Agent for the benefit of the Lenders, (iv) the Pledge
Agreement whereby Omega KC U.S. pledges all of its Stock in its Subsidiaries to
the Agent for the benefit of the Lenders and (v) any Subsidiary Pledge
Agreement, each in form and substance satisfactory to the Agent, and as each of
the same may hereafter be amended, supplemented, extended, restated or otherwise
modified from time to time (terms used in this definition shall have the
meanings given to them in the Credit Agreement).

          Section 2.  The Guaranty.  Subject always to the following Section,
                      ------------                                           
the Guarantor hereby absolutely and unconditionally guarantees to the Banks and
the Agent the payment when due (whether at a stated maturity or earlier by
reason of acceleration or otherwise) and performance of the Obligations.

          Section 3.  Limitation; Insolvency Laws.  As used in this Section: (a)
                      ---------------------------                               
the term "Applicable Insolvency Laws" means the laws of the United States of
America or of any State, province, nation or other governmental unit relating to
bankruptcy, reorganization, arrangement, adjustment of debts, relief of debtors,
dissolution, insolvency, fraudulent transfers or conveyances or other similar
laws (including, without limitation, 11 U. S. C. (S)547, (S)548, (S)550 

                                      -2-
<PAGE>
 
and other "avoidance" provisions of Title 11 of the United Stated Code) as
applicable in any proceeding in which the validity and/or enforceability of this
Guaranty or any Specified Lien is in issue; and (b) "Specified Lien" means any
security interest, mortgage, lien or encumbrance securing this Guaranty, in
whole or in part. Notwithstanding any other provision of this Guaranty, if, in
any proceeding, a court of competent jurisdiction determines that this Guaranty
or any Specified Lien would, but for the operation of this Section, be subject
to avoidance and/or recovery or be unenforceable by reason of Applicable
Insolvency Laws, this Guaranty and each such Specified Lien shall be valid and
enforceable only to the maximum extent that would not cause this Guaranty or
such Specified Lien to be subject to avoidance, recovery or unenforceability. To
the extent that any payment to, or realization by, the Banks or the Agent on the
guaranteed Obligations exceeds the limitations of this Section and is otherwise
subject to avoidance and recovery in any such proceeding, the amount subject to
avoidance shall in all events be limited to the amount by which such actual
payment or realization exceeds such limitation, and this Guaranty as limited
shall in all events remain in full force and effect and be fully enforceable
against the Guarantor. This Section is intended solely to reserve the rights of
the Banks and the Agent hereunder against the Guarantor in such proceeding to
the maximum extent permitted by Applicable Insolvency Laws and neither the
Guarantor, the Borrower, any other guarantor of the Obligations nor any Person
shall have any right, claim or defense under this Section that would not
otherwise be available under Applicable Insolvency Laws in such proceeding.

          Section 4.  Continuing Guaranty.  This Guaranty is a complete and
                      -------------------                                  
continuing guaranty of payment and performance of the Obligations.  This
Guaranty being a guarantee of payment and not of collectibility and being
absolute and unconditional, the obligations of the Guarantor hereunder shall not
be released, in whole or in part, by any action or thing which might, but for
this provision of this Guaranty, be deemed a legal or equitable discharge of a
surety or guarantor, other than irrevocable payment and performance in full of
the  Obligations. No notice of the Obligations to which this Guaranty may apply,
or of any renewal or extension thereof need be given to the Guarantor and none
of the foregoing acts shall release the Guarantor from liability hereunder.  The
Guarantor hereby expressly waives (a) demand of payment, presentment, protest,
notice of dishonor, nonpayment or nonperformance on any and all forms of the
Obligations; (b) notice of acceptance of this Guaranty and notice of any
liability to which it may apply; (c) all other notices and demands of any kind
and description relating to the Obligations now or hereafter provided for by any
agreement, statute, law, rule or regulation; and (d) any and all defenses of the
Borrower pertaining to the  Obligations except for the defense of discharge by
payment.  The Guarantor shall not be exonerated with respect to the Guarantor's
liabilities under this Guaranty by any act or thing except irrevocable payment
and performance of the Obligations, it being the purpose and intent of this
Guaranty that the Obligations constitute the direct and primary obligations of
the Guarantor and that the covenants, agreements and all obligations of the
Guarantor hereunder be absolute, unconditional and irrevocable.  The Guarantor
shall be and remain liable for any deficiency remaining after foreclosure of any
mortgage, deed of trust or security agreement securing all or any part of the
Obligations, whether or not the liability of the Borrower or any other Person
for such deficiency is discharged pursuant 

                                      -3-
<PAGE>
 
to statute, judicial decision or otherwise. The acceptance of this Guaranty by
the Banks and the Agent is not intended and does not release any liability
previously existing of any guarantor or surety of any indebtedness of the
Borrower to any Bank.

          Section 5.  Other Transactions.  Each of the Banks and the Agent is
                      ------------------                                     
expressly authorized (a) to exchange, surrender or release with or without
consideration any or all collateral and security which may at any time be placed
with it by the Borrower or by any other Person, or to forward or deliver any or
all such collateral and security directly to the Borrower for collection and
remittance or for credit, or to collect the same in any other manner without
notice to the Guarantor; and (b) to amend, modify, extend or supplement the
Credit Agreement, any note or other instrument evidencing the Obligations or any
part thereof and any other agreement with respect to the Obligations, waive
compliance by the Borrower or any other Person with the respective terms thereof
and settle or compromise any of the Obligations without notice to the Guarantor
and without in any manner affecting the absolute liabilities of the Guarantor
hereunder.  No invalidity, irregularity or unenforceability of all or any part
of the Obligations or of any security therefor or other recourse with respect
thereto shall affect, impair or be a defense to this Guaranty. The liabilities
of the Guarantor hereunder shall not be affected or impaired by any failure,
delay, neglect or omission on the part of any Bank or the Agent to realize upon
any of the Obligations of the Borrower to the Banks or the Agent, or upon any
collateral or security for any or all of the Obligations, nor by the taking by
any Bank or the Agent of (or the failure to take) any other guaranty or
guaranties to secure the Obligations, nor by the taking by any Bank or the Agent
of (or the failure to take or the failure to perfect its security interest in or
other Lien on) collateral or security of any kind.  No act or omission of any
Bank or the Agent, whether or not such action or failure to act varies or
increases the risk of, or affects the rights or remedies of the Guarantor, shall
affect or impair the obligations of the Guarantor hereunder.  The Guarantor
acknowledges that this Guaranty is in effect and binding without reference to
whether this Guaranty is signed by any other Person or Persons, that possession
of this Guaranty by any Bank or the Agent shall be conclusive evidence of due
delivery hereof by the Guarantor and that this Guaranty shall continue in full
force and effect, both as to the Obligations then existing and/or thereafter
created, notwithstanding the release of or extension of time to any other
guarantor of the  Obligations or any part thereof.

          Section 6.  Actions Not Required.  The Guarantor hereby waives any and
                      --------------------                                      
all right to cause a marshaling of the assets of the Borrower or any other
action by any court or other governmental body with respect thereto or to cause
the Banks or the Agent to proceed against any security for the Obligations or
any other recourse which the Banks or the Agent may have with respect thereto
and further waives any and all requirements that the Banks or the Agent
institute any action or proceeding at law or in equity, or obtain any judgment,
against the Borrower or any other Person, or with respect to any collateral
security for the Obligations, as a condition precedent to making demand on or
bringing an action or obtaining and/or enforcing a judgment against, the
Guarantor upon this Guaranty.  The Guarantor further acknowledges that time is
of the essence with respect to the Guarantor's obligations under this Guaranty.
Any remedy or right hereby granted which shall be found to be unenforceable as
to any Person or under any 

                                      -4-
<PAGE>
 
circumstance, for any reason, shall in no way limit or prevent the enforcement
of such remedy or right as to any other Person or circumstance, nor shall such
unenforceability limit or prevent enforcement of any other remedy or right
hereby granted.

          Section 7.  No Subrogation.  Notwithstanding any payment or payments
                      --------------                                          
made by the Guarantor hereunder or any setoff or application of funds of the
Guarantor by the Banks or the Agent, the Guarantor shall not be entitled to be
subrogated to any of the rights of any Bank or the Agent against the Borrower or
any other guarantor or any collateral security or guaranty or right of offset
held by any Bank or the Agent for the payment of the Obligations, nor shall the
Guarantor seek or be entitled to seek any contribution or reimbursement from the
Borrower or any other guarantor in respect of payments made by the Guarantor
hereunder.

          Section 8.  Application of Payments.  Any and all payments upon the
                      -----------------------                                
Obligations made by the Guarantor or by any other Person, and/or the proceeds of
any or all collateral or security for any of the Obligations, shall be applied
by the Banks and the Agent as provided in the Credit Agreement and the
Intercreditor Agreement, respectively.

          Section 9.  Recovery of Payment.  If any payment received by any Bank
                      -------------------                                      
or the Agent and applied to the Obligations is subsequently set aside,
recovered, rescinded or required to be returned for any reason (including,
without limitation, the bankruptcy, insolvency or reorganization of the Borrower
or any other obligor), the Obligations to which such payment was applied shall
for the purposes of this Guaranty be deemed to have continued in existence,
notwithstanding such application, and this Guaranty shall be enforceable as to
such Obligations as fully as if such application had never been made.
References in this Guaranty to amounts "irrevocably paid" or to "irrevocable
payment" refer to payments that cannot be set aside, recovered, rescinded or
required to be returned for any reason.

          Section 10. Borrower's Financial Condition.  The Guarantor is
                      ------------------------------                   
familiar with the financial condition of the Borrower, and the Guarantor has
executed and delivered this Guaranty based on the Guarantor's own judgment and
not in reliance upon any statement or representation of any Bank or the Agent.
Neither the Banks nor the Agent shall have any obligation to provide the
Guarantor with any advice whatsoever or to inform the Guarantor at any time of
the Banks' or the Agent's actions, evaluations or conclusions on the financial
condition or any other matter concerning the Borrower.

          Section 11. Remedies.  All remedies afforded to the Banks or the
                      --------                                            
Agent by reason of this Guaranty are separate and cumulative remedies and it is
agreed that no one of such remedies, whether or not exercised by any Bank or the
Agent, shall be deemed to be in exclusion of any of the other remedies available
to any Bank or the Agent and no one such remedy shall in any way limit or
prejudice any other legal or equitable remedy which any Bank or the Agent may
have hereunder and with respect to the Obligations.  Mere delay or failure to
act shall not preclude the exercise or enforcement of any rights and remedies
available to any Bank or the Agent.

                                      -5-
<PAGE>
 
          Section 12.  Bankruptcy of the Borrower.  The Guarantor expressly
                       --------------------------                          
agrees that the liabilities and obligations of the Guarantor under this Guaranty
shall not in any way be impaired or otherwise affected by the institution by or
against the Borrower or any other Person of any bankruptcy, reorganization,
arrangement, insolvency or liquidation proceedings, or any other similar
proceedings for relief under any bankruptcy law or similar law for the relief of
debtors and that any discharge of any of the Obligations pursuant to any such
bankruptcy or similar law or other law shall not diminish, discharge or
otherwise affect in any way the obligations of the Guarantor under this
Guaranty, and that upon the institution of any of the above actions, such
obligations shall be enforceable against the Guarantor.

          Section 13.  Costs and Expenses.  The Guarantor will pay or reimburse
                       ------------------                                      
each Bank and the Agent on demand for all out-of-pocket expenses (including in
each case all reasonable fees and expenses of counsel) incurred by that Bank or
the Agent arising out of or in connection with the enforcement of this Guaranty
against the Guarantor or arising out of or in connection with any failure of the
Guarantor to fully and timely perform the obligations of the Guarantor
hereunder.

          Section 14.  Waivers and Amendments.  This Guaranty can be waived,
                       ----------------------                               
modified, amended, terminated or discharged only explicitly in a writing signed
by all of the Banks and the Agent.  A waiver so signed shall be effective only
in the specific instance and for the specific purpose given.

          Section 15.   Notices.  Except when telephonic notice is expressly
                        -------                                             
authorized by this Guaranty, any notice or other communication to any party in
connection with this Guaranty shall be in writing and shall be sent by manual
delivery, telegram, telex, facsimile transmission, overnight courier or United
States mail (postage prepaid) addressed to such party at the address specified
on the signature page hereof, or at such other address as such party shall have
specified to the other party hereto in writing.  All periods of notice shall be
measured from the date of delivery thereof if manually delivered, from the date
of sending thereof if sent by telegram, telex or facsimile transmission, from
the first Business Day after the date of sending if sent by overnight courier,
or from four days after the date of mailing if mailed.

          Section 16.  Guarantor Acknowledgments.  The Guarantor hereby
                       -------------------------                       
acknowledges that (a) counsel has advised the Guarantor in the negotiation,
execution and delivery of this Guaranty, (b) the Banks and the Agent have no
fiduciary relationship to the Guarantor, the relationship being solely that of
debtor and creditors, and (c) no joint venture exists between the Guarantor, the
Banks and the Agent.

          Section 17.  Representations and Warranties.  The Guarantor hereby
                       ------------------------------                       
represents and warrants to the Banks and the Agent that:

               17(a)  The Guarantor is a corporation duly incorporated, validly
     existing and in good standing under the laws of the jurisdiction of its
     incorporation and has the 

                                      -6-
<PAGE>
 
     corporate power and authority and the legal right to own and operate its
     properties and to conduct the business in which it is currently engaged.

               17(b)  The Guarantor has the corporate power and authority and
     the legal right to execute and deliver, and to perform its obligations
     under, this Guaranty and has taken all necessary corporate action to
     authorize such execution, delivery and performance.

               17(c)  This Guaranty constitutes its legal, valid and binding
     obligation enforceable in accordance with its terms, except as
     enforceability may be limited by applicable bankruptcy, insolvency,
     reorganization, moratorium or similar laws affecting the enforcement of
     creditors' rights generally and by general equitable principles (whether
     enforcement is sought by proceedings in equity or at law).

               17(d)  The execution, delivery and performance of this Guaranty
     will not (i) violate any provision of any law, statute, rule or regulation
     or any order, writ, judgment, injunction, decree, determination or award of
     any court, governmental agency or arbitrator presently in effect having
     applicability to the Guarantor, (ii) violate or contravene any provision of
     its Articles of Incorporation or bylaws, or (iii) result in a breach of or
     constitute a default under any indenture, loan or credit agreement or any
     other agreement, lease or instrument to which it is a party or by which it
     or any of its properties may be bound or result in the creation of any lien
     thereunder.  The Guarantor is not in default under or in violation of any
     such law, statute, rule or regulation, order, writ, judgment, injunction,
     decree, determination or award or any such indenture, loan or credit
     agreement or other agreement, lease or instrument in any case in which the
     consequences of such default or violation could have a material adverse
     effect on its business, operations, properties, assets or condition
     (financial or otherwise).

               17(e)  No order, consent, approval, license, authorization or
     validation of, or filing, recording or registration with, or exemption by,
     any governmental or public body or authority is required on the part of the
     Guarantor to authorize, or is required in connection with the execution,
     delivery and performance of, or the legality, validity, binding effect or
     enforceability of, this Guaranty.

               17(f)  There are no actions, suits or proceedings pending or, to
     the knowledge of the Guarantor, threatened against or affecting it or any
     of its properties before any court or arbitrator, or any governmental
     department, board, agency or other instrumentality which, if determined
     adversely to the Guarantor, would have a material adverse effect on its
     business, operations, property or condition (financial or otherwise) or on
     its ability to perform its obligations hereunder.

               17(g)  The Guarantor expects to derive benefits from the
     transactions resulting in the creation of the Obligations.  The Banks and
     the Agent may rely 

                                      -7-
<PAGE>
 
     conclusively on the continuing warranty, hereby made, that the Guarantor
     continues to be benefitted by the Banks' extension of credit accommodations
     to the Borrower and the Banks and the Agent shall have no duty to inquire
     into or confirm the receipt of any such benefits, and this Guaranty shall
     be effective and enforceable by the Banks and the Agent without regard to
     the receipt, nature or value of any such benefits.

               17(h)  All representations and warranties pertaining to the
     Guarantor made by the Borrowers in the Credit Agreement are true and
     correct.

          Section 18.  Covenants.  The Guarantor hereby covenants and agrees
                       ---------                                            
that for so long as this Guaranty remains in full force and effect, (a) the
Guarantor shall perform and comply with all covenants made by the Borrower
pertaining to the Guarantor in the Credit Agreement; and (b) the Guarantor shall
perform or comply with all covenants made by the Borrower pertaining to the
Guarantor in the Pledge Agreement, including but not limited to the provisions
of Section  7(b) of the Pledge Agreement which prohibit the issuance of stock or
other securities in addition to or in substitution of the "Pledged Shares" (as
defined in the Pledge Agreement), except to the Borrower.

          Section 19.  Continuing Guaranty; Assignments under Credit Agreement.
                       -------------------------------------------------------  
This Guaranty shall (a) remain in full force and effect until irrevocable
payment in full of the Obligations and the expiration of the obligations, if
any, of the Banks to extend credit accommodations to the Borrower, (b) be
binding upon the Guarantor, its successors and assigns and (c) inure to the
benefit of, and be enforceable by, each Bank, the Agent and their respective
successors, transferees, and assigns.   Without limiting the generality of the
foregoing clause (c), any Bank or the Agent may assign or otherwise transfer all
or any portion of its rights and obligations under the Credit Agreement to any
other Persons to the extent and in the manner provided in the Credit Agreement
and may similarly transfer all or any portion of its rights under this Guaranty
to such Persons.

          Section 20.  Reaffirmation.  The Guarantor agrees that when so
                       -------------                                    
requested by any Bank or the Agent from time to time it will promptly execute
and deliver to such Bank or the Agent a written reaffirmation of this Guaranty
in such form as such Bank or the Agent may require.

          Section 21.  Revocation.  Notwithstanding any other provision hereof,
                       ----------                                              
the Guarantor may revoke this Guaranty prospectively as to future transactions
by written notice to that effect actually received by the Agent.  No such
revocation shall release, impair or affect in any manner any liability hereunder
with respect to Obligations created, contracted, assumed or incurred prior to
receipt by the Agent of written notice of revocation, or Obligations created,
contracted, assumed or incurred after receipt of such notice pursuant to any
contract entered into by the Banks or the Agent prior to receipt of such notice,
or any renewals or extensions thereof, theretofore or thereafter made, or any
interest accrued or accruing on such Obligations, or all other costs, expenses
and attorneys' fees arising from such Obligations.

                                      -8-
<PAGE>
 
          Section 22.  Governing Law and Construction.  THE VALIDITY,
                       ------------------------------                
CONSTRUCTION AND ENFORCEABILITY OF THIS GUARANTY SHALL BE GOVERNED BY THE LAWS
OF THE STATE OF MINNESOTA, WITHOUT GIVING EFFECT TO CONFLICT OF LAWS PRINCIPLES
THEREOF, BUT GIVING EFFECT TO FEDERAL LAWS OF THE UNITED STATES APPLICABLE TO
NATIONAL BANKS.  Whenever possible, each provision of this Guaranty and any
other statement, instrument or transaction contemplated hereby or relating
hereto shall be interpreted in such manner as to be effective and valid under
such applicable law, but, if any provision of this Guaranty or any other
statement, instrument or transaction contemplated hereby or relating hereto
shall be held to be prohibited or invalid under such applicable law, such
provision shall be ineffective only to the extent of such prohibition or
invalidity, without invalidating the remainder of such provision or the
remaining provisions of this Guaranty or  any other statement, instrument or
transaction contemplated hereby or relating hereto.

          Section 23.  Consent to Jurisdiction.  AT THE OPTION OF THE BANKS OR
                       -----------------------                                
THE AGENT, THIS GUARANTY MAY BE ENFORCED IN ANY FEDERAL COURT OR MINNESOTA STATE
COURT SITTING IN HENNEPIN COUNTY OR RAMSEY COUNTY, MINNESOTA; AND THE GUARANTOR
CONSENTS TO THE JURISDICTION AND VENUE OF ANY SUCH COURT AND WAIVES ANY ARGUMENT
THAT VENUE IN SUCH FORUMS IS NOT CONVENIENT.  IN THE EVENT THE GUARANTOR
COMMENCES ANY ACTION IN ANOTHER JURISDICTION OR VENUE UNDER ANY TORT OR CONTRACT
THEORY ARISING DIRECTLY OR INDIRECTLY FROM THE RELATIONSHIP CREATED BY THIS
GUARANTY, THE BANKS OR THE AGENT AT ITS OPTION SHALL BE ENTITLED TO HAVE THE
CASE TRANSFERRED TO ONE OF THE JURISDICTIONS AND VENUES ABOVE-DESCRIBED, OR IF
SUCH TRANSFER CANNOT BE ACCOMPLISHED UNDER APPLICABLE LAW, TO HAVE SUCH CASE
DISMISSED WITHOUT PREJUDICE.

          Section 24.  Waiver of Jury Trial.  EACH OF THE GUARANTOR, EACH BANK
                       --------------------                                   
AND THE AGENT, BY THEIR ACCEPTANCE OF THIS GUARANTY, IRREVOCABLY WAIVES ANY AND
ALL RIGHT TO TRIAL BY JURY IN ANY LEGAL PROCEEDING ARISING OUT OF OR RELATING TO
THIS GUARANTY OR THE TRANSACTIONS CONTEMPLATED HEREBY.

          Section 25.  Counterparts.  This Guaranty may be executed in any
                       ------------                                       
number of counterparts, each of which when so executed and delivered shall be
deemed an original, but all such counterparts together shall constitute but one
and the same instrument.

          Section 26.  General.  All representations and warranties contained in
                       -------                                                  
this Guaranty or in any other agreement between the Guarantor and the Banks or
the Agent shall survive the execution, delivery and performance of this Guaranty
and the creation and payment 

                                      -9-
<PAGE>
 
of the Obligations. Captions in this Guaranty are for reference and convenience
only and shall not affect the interpretation or meaning of any provision of this
Guaranty.

     THE REMAINDER OF THIS PAGE IS INTENTIONALLY LEFT BLANK.

                                      -10-
<PAGE>
 
     IN WITNESS WHEREOF, the Guarantor has executed this Guaranty as of the date
first above written.


                                    BULRAD ILLINOIS, INC.

                                    By s/  ROBERT L. MORAN
                                       --------------------------
                                    Name ________________________
                                    Title _______________________
 

                                      -11-