Document:

<PAGE>
                                                                   Exhibit 10.60

                                    GUARANTY

This contract of guaranty made and entered into this FEBRUARY 12, 2003 between
CAPCO FINANCIAL COMPANY, A DIVISION OF CUPERTINO NATIONAL BANK hereinafter
referred to as "CAPCO", and PACIFIC AEROSPACE & ELECTRONICS, INC. hereinafter
referred to as Client; and CASHMERE MANUFACTURING CO., INC. and hereinafter
referred to as the Guarantors,

WITNESSETH:

That the Client has made application to CAPCO for financial accommodation, which
the Guarantors seek to induce CAPCO to grant.

NOW, THEREFORE, IT IS UNDERSTOOD AND AGREED AS FOLLOWS:

1. To induce CAPCO to grant or extend and/or to continue to grant or extend to
or for the benefit of the Client such invoice financing, factoring, loan(s),
credit(s), or other financial accommodation upon such terms and conditions and
at such rate, or rates of discount, or interest, as may be agreed upon between
the Client and CAPCO, and for other good and valuable consideration, including
the sum of One Dollar to Guarantors in hand paid, receipt of which is hereby
acknowledged, the Guarantors, and each of them (if more than one), and their
respective marital communities, hereby jointly and severally guarantee to CAPCO
absolutely and unconditionally, at all times, payment immediately when due, of
any and all indebtedness and/or liabilities, direct or contingent, irrespective
of their character, regularity, enforceability or validity, now owing, or which
may hereafter be owing or become due, from the Client to CAPCO, its successors
or assigns, or which may arise from dealings between CAPCO and the Client and/or
from other dealings by which CAPCO may become in any manner whatsoever a
creditor of the Client, including in such indebtedness and/or liabilities (and
in addition to whatever limiting amount may be set forth herein), all fees, and
or interest charges and expenses accrued with respect thereto, and all costs,
charges and expenses which CAPCO may incur in enforcing or obtaining payment of
any such indebtedness and/or liabilities, or pay in connection with the Client's
account, up to a limiting principal amount of ($3,000,000.00) THREE MILLION AND
00/100 dollars, (regardless of any excess amount which may now or hereafter be
or become owing from Client to CAPCO): but nothing herein contained shall be
deemed to obligate CAPCO to extend any definite amount of credit to the Client.

2. CAPCO is hereby given the following powers and rights, which CAPCO may at its
sole discretion exercise one or more times and from time to time without in any
way diminishing, releasing or discharging the Guarantors' obligation hereunder.
To make change, alter, cancel, renew, extend, decrease or increase the amount,
principal and/or fee of the indebtedness and/or liabilities of the Client; to
change, substitute, withdraw, decrease, increase, release, alter, collect or
sell (at public or private sale for such price and upon such terms as CAPCO may
deem reasonable) any Account, account receivable, right to payment, collateral
or property securing such indebtedness and/or liabilities, or any part thereof
(CAPCO shall not be bound in any way to effect the reduction or satisfaction of
the Client's indebtedness and/or liabilities to CAPCO and neither the Guarantors
nor the Client shall have the right to require CAPCO to reduce or to satisfy
said indebtedness and/or liabilities either by application of any Account, or
collateral or by the enforcement of any guaranty, which CAPCO either now holds
or hereafter may obtain as security for the whole or any part of said
indebtedness and/or liabilities): to add other guarantors to the guaranty; to
procure additional guaranties of any or all of the Clients indebtedness and/or
liabilities to CAPCO; to release any of the guarantors executing either this
guaranty or other guaranties now extant or hereafter obtained; to enforce for
CAPCO's benefit any security which the Client has given to the Guarantors for
the Guarantors' indemnity; to apply all sums of money and/or property, of any
kind or nature, which may be received by CAPCO from the Client, or from any one
on the Client's behalf, or for the Client's use or benefit, to the reduction
and/or payment of whatever portion of the Client's indebtedness and/or
liabilities which CAPCO, in its sole discretion, may determine, regardless of
whether said portion is unsecured, is in any

Form Date 6/97                                                 Initial__________
<PAGE>
way secured or guaranteed, is barred by the statute of limitations, or is in
excess of the limit of this guaranty (it being the intention of the parties
hereto that CAPCO shall have absolute control over the application of all
payments from whatever source received); to receive payment in full of all of
the indebtedness and/or liabilities owing from the Client to CAPCO before the
Guarantors shall be entitled to receive any of the aforesaid money or property
or to apply the same upon the Guarantors claims against the Client (including
claims acquired by subrogation from CAPCO); to exercise the same powers and
rights in the event of the Client's insolvency, bankruptcy, receivership, or
assignment for the benefit of creditors, in which event all of the indebtedness
and/or liabilities owing from the Client to CAPCO shall be satisfied in full
before the Guarantors shall be entitled to participate in the distribution of
the Client's assets; and to otherwise deal with the Client, the Guarantors
and/or any endorser or guarantor as CAPCO may elect. The liability of Guarantors
shall not be affected or impaired by CAPCO's failure, neglect or omission to
realize on the indebtedness and/or liabilities or any collateral therefor.

3. Any financial accommodation granted or continued by CAPCO to the Client shall
be conclusively deemed to have been induced hereby and in reliance hereon.
Notice of acceptance of this guaranty as well as all demands, presentments,
notices of protest and notices of every kind or nature, including those of any
action or non-action on the part of the Client, CAPCO, any of the Guarantors,
any other Guarantor, any creditor of the Client, of CAPCO, or any of the
Guarantors, or of any other Guarantor, or any other person, whomsoever, are
hereby fully waived by the Guarantors.

4. This is a continuing guaranty and neither the exercise by CAPCO of any of the
aforesaid rights and powers, nor the payment and/or satisfaction by anyone,
either in whole or in part, of the Client's indebtedness and/or liabilities to
CAPCO, nor the intervention of lapses of time between CAPCO's transactions with
the Client, regardless of how long or how frequent the lapses shall be, shall
operate either as a full or partial discharge of this guaranty but the
Guarantors' obligation to CAPCO hereunder, regardless of the foregoing
contingencies, shall continue binding and enforceable to the full limit
aforesaid, both as to said indebtedness and/or liabilities which then may be
extant and unpaid, and as to those which thereafter in any manner may arise
until notice in writing, via certified mail, signed by the Guarantors to make no
further advances to the Client hereunder is received by CAPCO. If the
Guarantors, or any of them, give such notice of their election to be no longer
bound by this guaranty, they shall thereby be released from future liability
hereunder, but they shall remain bound as to indebtedness and/or liabilities
then existing and renewals or extensions in whole or in part of the then
existing indebtedness and/or liabilities, but this guaranty, at CAPCO's option
shall continue in full force and effect as to any or all of the Guarantors who
have not given such notice.

5. Each Guarantor also hereby waives any claim, right, or remedy which such
Guarantor may now have or hereafter acquire against the Client, or against other
Guarantors, including, without limitation, any claim, right or remedy of
subrogation, reimbursement, exoneration, indemnification, contribution, or
participation in any claim, right, or remedy of CAPCO against the Client, or
against any Guarantor, or any security which CAPCO now has or hereafter
acquires, whether or not such claim, right or remedy arises in equity, under
contract, by statute, under common law, or otherwise.

6. Upon any default of the Client in any of its indebtedness and/or liabilities
to be due and payable, and, without making any demand upon or bringing any
action against the Client, without seeking recovery against the guarantors under
any other guaranties, and without foreclosing upon, selling or otherwise
disposing of or collecting any collateral which CAPCO may then have as security
for such indebtedness and/or liabilities, CAPCO may proceed directly against the
Guarantors to enforce payment by the Guarantors to the full extent of the
Guaranty, or, without in any way releasing the Guarantors from their full
obligation hereunder, CAPCO may seek recovery from the Client and/or from the
guarantors under any other guaranties, and may apply the proceeds of such
recovery in the manner set forth in paragraph 2 above. In the event that suit is
instituted to enforce this guaranty or any claim arising hereunder, the
Guarantors agree and undertake to pay to CAPCO its costs, together with a
reasonable attorneys fee (as fixed by the court), and further agree that the
venue of any such suit may be laid in King County Washington.

7. Words used herein in the singular number shall be deemed to include the
plural and vice versa, and word

Form Date 6/97                                                 Initial__________
<PAGE>
importing the masculine gender shall also include the feminine and neuter, where
the number or gender of the signatories hereto shall require such construction.

8. This guaranty shall be valid and binding upon the Guarantors who have
executed this Guaranty notwithstanding the non-execution hereof by any of the
within named Guarantors, by any prospective Guarantors, or by the Client, and
notwithstanding the existence of other guaranties of the Client's indebtedness
and/or liabilities to CAPCO, and this Guaranty shall inure to the benefit of and
bind the heirs, administrators, executors, successors (including successor
partnerships of the Client and/or of the Guarantors regardless of changes in
name and membership) and assigns of CAPCO, the Client and the Guarantors.

IN WITNESS THEREOF, WE have signed, sealed and delivered this instrument, at
Wenatchee, Washington this 12th day of February, 2003.

CAPCO FINANCIAL COMPANY, A DIVISION OF CUPERTINO NATIONAL BANK

By ________________________________

Title _____________________________

PACIFIC AEROSPACE & ELECTRONICS, INC.

By ________________________________

Title _______________________________

GUARANTORS:

__________________________________
Cashmere Manufacturing Co., Inc.

__________________________________

Form Date 6/97                                                 Initial__________
<PAGE>
                                    GUARANTY

This contract of guaranty made and entered into this FEBRUARY 12, 2003 between
CAPCO FINANCIAL COMPANY, A DIVISION OF CUPERTINO NATIONAL BANK hereinafter
referred to as "CAPCO", and PACIFIC AEROSPACE & ELECTRONICS, INC. hereinafter
referred to as Client; and NORTHWEST TECHNICAL INDUSTRIES, INC. and hereinafter
referred to as the Guarantors,

WITNESSETH:

That the Client has made application to CAPCO for financial accommodation, which
the Guarantors seek to induce CAPCO to grant.

NOW, THEREFORE, IT IS UNDERSTOOD AND AGREED AS FOLLOWS:

1. To induce CAPCO to grant or extend and/or to continue to grant or extend to
or for the benefit of the Client such invoice financing, factoring, loan(s),
credit(s), or other financial accommodation upon such terms and conditions and
at such rate, or rates of discount, or interest, as may be agreed upon between
the Client and CAPCO, and for other good and valuable consideration, including
the sum of One Dollar to Guarantors in hand paid, receipt of which is hereby
acknowledged, the Guarantors, and each of them (if more than one), and their
respective marital communities, hereby jointly and severally guarantee to CAPCO
absolutely and unconditionally, at all times, payment immediately when due, of
any and all indebtedness and/or liabilities, direct or contingent, irrespective
of their character, regularity, enforceability or validity, now owing, or which
may hereafter be owing or become due, from the Client to CAPCO, its successors
or assigns, or which may arise from dealings between CAPCO and the Client and/or
from other dealings by which CAPCO may become in any manner whatsoever a
creditor of the Client, including in such indebtedness and/or liabilities (and
in addition to whatever limiting amount may be set forth herein), all fees, and
or interest charges and expenses accrued with respect thereto, and all costs,
charges and expenses which CAPCO may incur in enforcing or obtaining payment of
any such indebtedness and/or liabilities, or pay in connection with the Client's
account, up to a limiting principal amount of ($3,000,000.00) THREE MILLION AND
00/100 dollars, (regardless of any excess amount which may now or hereafter be
or become owing from Client to CAPCO): but nothing herein contained shall be
deemed to obligate CAPCO to extend any definite amount of credit to the Client.

2. CAPCO is hereby given the following powers and rights, which CAPCO may at its
sole discretion exercise one or more times and from time to time without in any
way diminishing, releasing or discharging the Guarantors' obligation hereunder.
To make change, alter, cancel, renew, extend, decrease or increase the amount,
principal and/or fee of the indebtedness and/or liabilities of the Client; to
change, substitute, withdraw, decrease, increase, release, alter, collect or
sell (at public or private sale for such price and upon such terms as CAPCO may
deem reasonable) any Account, account receivable, right to payment, collateral
or property securing such indebtedness and/or liabilities, or any part thereof
(CAPCO shall not be bound in any way to effect the reduction or satisfaction of
the Client's indebtedness and/or liabilities to CAPCO and neither the Guarantors
nor the Client shall have the right to require CAPCO to reduce or to satisfy
said indebtedness and/or liabilities either by application of any Account, or
collateral or by the enforcement of any guaranty, which CAPCO either now holds
or hereafter may obtain as security for the whole or any part of said
indebtedness and/or liabilities): to add other guarantors to the guaranty; to
procure additional guaranties of any or all of the Clients indebtedness and/or
liabilities to CAPCO; to release any of the guarantors executing either this
guaranty or other guaranties now extant or hereafter obtained; to enforce for
CAPCO's benefit any security which the Client has given to the Guarantors for
the Guarantors' indemnity; to apply all sums of money and/or property, of any
kind or nature, which may be received by CAPCO from the Client, or from any one
on the Client's behalf, or for the Client's use or benefit, to the reduction
and/or payment of whatever portion of the Client's indebtedness and/or
liabilities which CAPCO, in its sole discretion, may determine, regardless of
whether said portion is unsecured, is in any

Form Date 6/97                                                 Initial__________
<PAGE>
way secured or guaranteed, is barred by the statute of limitations, or is in
excess of the limit of this guaranty (it being the intention of the parties
hereto that CAPCO shall have absolute control over the application of all
payments from whatever source received); to receive payment in full of all of
the indebtedness and/or liabilities owing from the Client to CAPCO before the
Guarantors shall be entitled to receive any of the aforesaid money or property
or to apply the same upon the Guarantors claims against the Client (including
claims acquired by subrogation from CAPCO); to exercise the same powers and
rights in the event of the Client's insolvency, bankruptcy, receivership, or
assignment for the benefit of creditors, in which event all of the indebtedness
and/or liabilities owing from the Client to CAPCO shall be satisfied in full
before the Guarantors shall be entitled to participate in the distribution of
the Client's assets; and to otherwise deal with the Client, the Guarantors
and/or any endorser or guarantor as CAPCO may elect. The liability of Guarantors
shall not be affected or impaired by CAPCO's failure, neglect or omission to
realize on the indebtedness and/or liabilities or any collateral therefor.

3. Any financial accommodation granted or continued by CAPCO to the Client shall
be conclusively deemed to have been induced hereby and in reliance hereon.
Notice of acceptance of this guaranty as well as all demands, presentments,
notices of protest and notices of every kind or nature, including those of any
action or non-action on the part of the Client, CAPCO, any of the Guarantors,
any other Guarantor, any creditor of the Client, of CAPCO, or any of the
Guarantors, or of any other Guarantor, or any other person, whomsoever, are
hereby fully waived by the Guarantors.

4. This is a continuing guaranty and neither the exercise by CAPCO of any of the
aforesaid rights and powers, nor the payment and/or satisfaction by anyone,
either in whole or in part, of the Client's indebtedness and/or liabilities to
CAPCO, nor the intervention of lapses of time between CAPCO's transactions with
the Client, regardless of how long or how frequent the lapses shall be, shall
operate either as a full or partial discharge of this guaranty but the
Guarantors' obligation to CAPCO hereunder, regardless of the foregoing
contingencies, shall continue binding and enforceable to the full limit
aforesaid, both as to said indebtedness and/or liabilities which then may be
extant and unpaid, and as to those which thereafter in any manner may arise
until notice in writing, via certified mail, signed by the Guarantors to make no
further advances to the Client hereunder is received by CAPCO. If the
Guarantors, or any of them, give such notice of their election to be no longer
bound by this guaranty, they shall thereby be released from future liability
hereunder, but they shall remain bound as to indebtedness and/or liabilities
then existing and renewals or extensions in whole or in part of the then
existing indebtedness and/or liabilities, but this guaranty, at CAPCO's option
shall continue in full force and effect as to any or all of the Guarantors who
have not given such notice.

5. Each Guarantor also hereby waives any claim, right, or remedy which such
Guarantor may now have or hereafter acquire against the Client, or against other
Guarantors, including, without limitation, any claim, right or remedy of
subrogation, reimbursement, exoneration, indemnification, contribution, or
participation in any claim, right, or remedy of CAPCO against the Client, or
against any Guarantor, or any security which CAPCO now has or hereafter
acquires, whether or not such claim, right or remedy arises in equity, under
contract, by statute, under common law, or otherwise.

6. Upon any default of the Client in any of its indebtedness and/or liabilities
to be due and payable, and, without making any demand upon or bringing any
action against the Client, without seeking recovery against the guarantors under
any other guaranties, and without foreclosing upon, selling or otherwise
disposing of or collecting any collateral which CAPCO may then have as security
for such indebtedness and/or liabilities, CAPCO may proceed directly against the
Guarantors to enforce payment by the Guarantors to the full extent of the
Guaranty, or, without in any way releasing the Guarantors from their full
obligation hereunder, CAPCO may seek recovery from the Client and/or from the
guarantors under any other guaranties, and may apply the proceeds of such
recovery in the manner set forth in paragraph 2 above. In the event that suit is
instituted to enforce this guaranty or any claim arising hereunder, the
Guarantors agree and undertake to pay to CAPCO its costs, together with a
reasonable attorneys fee (as fixed by the court), and further agree that the
venue of any such suit may be laid in King County Washington.

7. Words used herein in the singular number shall be deemed to include the
plural and vice versa, and word

Form Date 6/97                                                 Initial__________
<PAGE>
importing the masculine gender shall also include the feminine and neuter, where
the number or gender of the signatories hereto shall require such construction.

8. This guaranty shall be valid and binding upon the Guarantors who have
executed this Guaranty notwithstanding the non-execution hereof by any of the
within named Guarantors, by any prospective Guarantors, or by the Client, and
notwithstanding the existence of other guaranties of the Client's indebtedness
and/or liabilities to CAPCO, and this Guaranty shall inure to the benefit of and
bind the heirs, administrators, executors, successors (including successor
partnerships of the Client and/or of the Guarantors regardless of changes in
name and membership) and assigns of CAPCO, the Client and the Guarantors.

IN WITNESS THEREOF, WE have signed, sealed and delivered this instrument, at
Wenatchee, Washington this 12th day of February, 2003.

CAPCO FINANCIAL COMPANY, A DIVISION OF CUPERTINO NATIONAL BANK

By __________________________________

Title _______________________________

PACIFIC AEROSPACE & ELECTRONICS, INC.

By __________________________________

Title _______________________________

GUARANTORS:

_____________________________________
Northwest Technical Industries, Inc.

_____________________________________

Form Date 6/97                                                 Initial__________
<PAGE>
                                    GUARANTY

This contract of guaranty made and entered into this FEBRUARY 12, 2003 between
CAPCO FINANCIAL COMPANY, A DIVISION OF CUPERTINO NATIONAL BANK hereinafter
referred to as "CAPCO", and PACIFIC AEROSPACE & ELECTRONICS, INC. hereinafter
referred to as Client; and PACIFIC COAST TECHNOLOGIES, INC. and hereinafter
referred to as the Guarantors,

WITNESSETH:

That the Client has made application to CAPCO for financial accommodation, which
the Guarantors seek to induce CAPCO to grant.

NOW, THEREFORE, IT IS UNDERSTOOD AND AGREED AS FOLLOWS:

1. To induce CAPCO to grant or extend and/or to continue to grant or extend to
or for the benefit of the Client such invoice financing, factoring, loan(s),
credit(s), or other financial accommodation upon such terms and conditions and
at such rate, or rates of discount, or interest, as may be agreed upon between
the Client and CAPCO, and for other good and valuable consideration, including
the sum of One Dollar to Guarantors in hand paid, receipt of which is hereby
acknowledged, the Guarantors, and each of them (if more than one), and their
respective marital communities, hereby jointly and severally guarantee to CAPCO
absolutely and unconditionally, at all times, payment immediately when due, of
any and all indebtedness and/or liabilities, direct or contingent, irrespective
of their character, regularity, enforceability or validity, now owing, or which
may hereafter be owing or become due, from the Client to CAPCO, its successors
or assigns, or which may arise from dealings between CAPCO and the Client and/or
from other dealings by which CAPCO may become in any manner whatsoever a
creditor of the Client, including in such indebtedness and/or liabilities (and
in addition to whatever limiting amount may be set forth herein), all fees, and
or interest charges and expenses accrued with respect thereto, and all costs,
charges and expenses which CAPCO may incur in enforcing or obtaining payment of
any such indebtedness and/or liabilities, or pay in connection with the Client's
account, up to a limiting principal amount of ($3,000,000.00) THREE MILLION AND
00/100 dollars, (regardless of any excess amount which may now or hereafter be
or become owing from Client to CAPCO): but nothing herein contained shall be
deemed to obligate CAPCO to extend any definite amount of credit to the Client.

2. CAPCO is hereby given the following powers and rights, which CAPCO may at its
sole discretion exercise one or more times and from time to time without in any
way diminishing, releasing or discharging the Guarantors' obligation hereunder.
To make change, alter, cancel, renew, extend, decrease or increase the amount,
principal and/or fee of the indebtedness and/or liabilities of the Client; to
change, substitute, withdraw, decrease, increase, release, alter, collect or
sell (at public or private sale for such price and upon such terms as CAPCO may
deem reasonable) any Account, account receivable, right to payment, collateral
or property securing such indebtedness and/or liabilities, or any part thereof
(CAPCO shall not be bound in any way to effect the reduction or satisfaction of
the Client's indebtedness and/or liabilities to CAPCO and neither the Guarantors
nor the Client shall have the right to require CAPCO to reduce or to satisfy
said indebtedness and/or liabilities either by application of any Account, or
collateral or by the enforcement of any guaranty, which CAPCO either now holds
or hereafter may obtain as security for the whole or any part of said
indebtedness and/or liabilities): to add other guarantors to the guaranty; to
procure additional guaranties of any or all of the Clients indebtedness and/or
liabilities to CAPCO; to release any of the guarantors executing either this
guaranty or other guaranties now extant or hereafter obtained; to enforce for
CAPCO's benefit any security which the Client has given to the Guarantors for
the Guarantors' indemnity; to apply all sums of money and/or property, of any
kind or nature, which may be received by CAPCO from the Client, or from any one
on the Client's behalf, or for the Client's use or benefit, to the reduction
and/or payment of whatever portion of the Client's indebtedness and/or
liabilities which CAPCO, in its sole discretion, may determine, regardless of
whether said portion is unsecured, is in any

Form Date 6/97                                                 Initial__________
<PAGE>
way secured or guaranteed, is barred by the statute of limitations, or is in
excess of the limit of this guaranty (it being the intention of the parties
hereto that CAPCO shall have absolute control over the application of all
payments from whatever source received); to receive payment in full of all of
the indebtedness and/or liabilities owing from the Client to CAPCO before the
Guarantors shall be entitled to receive any of the aforesaid money or property
or to apply the same upon the Guarantors claims against the Client (including
claims acquired by subrogation from CAPCO); to exercise the same powers and
rights in the event of the Client's insolvency, bankruptcy, receivership, or
assignment for the benefit of creditors, in which event all of the indebtedness
and/or liabilities owing from the Client to CAPCO shall be satisfied in full
before the Guarantors shall be entitled to participate in the distribution of
the Client's assets; and to otherwise deal with the Client, the Guarantors
and/or any endorser or guarantor as CAPCO may elect. The liability of Guarantors
shall not be affected or impaired by CAPCO's failure, neglect or omission to
realize on the indebtedness and/or liabilities or any collateral therefor.

3. Any financial accommodation granted or continued by CAPCO to the Client shall
be conclusively deemed to have been induced hereby and in reliance hereon.
Notice of acceptance of this guaranty as well as all demands, presentments,
notices of protest and notices of every kind or nature, including those of any
action or non-action on the part of the Client, CAPCO, any of the Guarantors,
any other Guarantor, any creditor of the Client, of CAPCO, or any of the
Guarantors, or of any other Guarantor, or any other person, whomsoever, are
hereby fully waived by the Guarantors.

4. This is a continuing guaranty and neither the exercise by CAPCO of any of the
aforesaid rights and powers, nor the payment and/or satisfaction by anyone,
either in whole or in part, of the Client's indebtedness and/or liabilities to
CAPCO, nor the intervention of lapses of time between CAPCO's transactions with
the Client, regardless of how long or how frequent the lapses shall be, shall
operate either as a full or partial discharge of this guaranty but the
Guarantors' obligation to CAPCO hereunder, regardless of the foregoing
contingencies, shall continue binding and enforceable to the full limit
aforesaid, both as to said indebtedness and/or liabilities which then may be
extant and unpaid, and as to those which thereafter in any manner may arise
until notice in writing, via certified mail, signed by the Guarantors to make no
further advances to the Client hereunder is received by CAPCO. If the
Guarantors, or any of them, give such notice of their election to be no longer
bound by this guaranty, they shall thereby be released from future liability
hereunder, but they shall remain bound as to indebtedness and/or liabilities
then existing and renewals or extensions in whole or in part of the then
existing indebtedness and/or liabilities, but this guaranty, at CAPCO's option
shall continue in full force and effect as to any or all of the Guarantors who
have not given such notice.

5. Each Guarantor also hereby waives any claim, right, or remedy which such
Guarantor may now have or hereafter acquire against the Client, or against other
Guarantors, including, without limitation, any claim, right or remedy of
subrogation, reimbursement, exoneration, indemnification, contribution, or
participation in any claim, right, or remedy of CAPCO against the Client, or
against any Guarantor, or any security which CAPCO now has or hereafter
acquires, whether or not such claim, right or remedy arises in equity, under
contract, by statute, under common law, or otherwise.

6. Upon any default of the Client in any of its indebtedness and/or liabilities
to be due and payable, and, without making any demand upon or bringing any
action against the Client, without seeking recovery against the guarantors under
any other guaranties, and without foreclosing upon, selling or otherwise
disposing of or collecting any collateral which CAPCO may then have as security
for such indebtedness and/or liabilities, CAPCO may proceed directly against the
Guarantors to enforce payment by the Guarantors to the full extent of the
Guaranty, or, without in any way releasing the Guarantors from their full
obligation hereunder, CAPCO may seek recovery from the Client and/or from the
guarantors under any other guaranties, and may apply the proceeds of such
recovery in the manner set forth in paragraph 2 above. In the event that suit is
instituted to enforce this guaranty or any claim arising hereunder, the
Guarantors agree and undertake to pay to CAPCO its costs, together with a
reasonable attorneys fee (as fixed by the court), and further agree that the
venue of any such suit may be laid in King County Washington.

7. Words used herein in the singular number shall be deemed to include the
plural and vice versa, and word

Form Date 6/97                                                 Initial__________
<PAGE>
importing the masculine gender shall also include the feminine and neuter, where
the number or gender of the signatories hereto shall require such construction.

8. This guaranty shall be valid and binding upon the Guarantors who have
executed this Guaranty notwithstanding the non-execution hereof by any of the
within named Guarantors, by any prospective Guarantors, or by the Client, and
notwithstanding the existence of other guaranties of the Client's indebtedness
and/or liabilities to CAPCO, and this Guaranty shall inure to the benefit of and
bind the heirs, administrators, executors, successors (including successor
partnerships of the Client and/or of the Guarantors regardless of changes in
name and membership) and assigns of CAPCO, the Client and the Guarantors.

IN WITNESS THEREOF, WE have signed, sealed and delivered this instrument, at
Wenatchee, Washington this 12th day of February, 2003.

CAPCO FINANCIAL COMPANY, A DIVISION OF CUPERTINO NATIONAL BANK

By ________________________________

Title _____________________________

PACIFIC AEROSPACE & ELECTRONICS, INC.

By ________________________________

Title _____________________________

GUARANTORS:

___________________________________
Pacific Coast Technologies, Inc.

___________________________________

Form Date 6/97                                                 Initial__________<PAGE>

                                                                   Exhibit 10.61

                        SECURITY AGREEMENT -- INVENTORY
                       (OTHER THAN FLOORING) AND PROCEEDS

                               (Gross Accounting)

THE UNDERSIGNED Cashmere Manufacturing Co., Inc. (hereinafter called "Debtor")
hereby grants to Capco Financial Company, a division of Cupertino National Bank
(hereinafter called "Secured Party"), a security interest in the following
described property, consisting of all of the inventory and stock in trade of the
Debtor, including all raw materials and work in process and materials to be used
or consumed in the business of Debtor, and all products of Debtor; together with
all increases in said property and all property of a similar nature hereinafter
acquired by Debtor in any of the categories herein described, all of which is
hereinafter referred to as "property"; together with all cash and non-cash
proceeds of such property, including without limitation chattel paper and
accounts receivable.

   Without limiting the generality of the foregoing, the property covered hereby
includes the following: (Insert description of type of property covered.)

      All right, title, and interest in inventory, raw materials, work in
progress and finished goods now owned or hereafter acquired and products and
proceeds thereof:

   This Security Agreement is given to secure the payment and performance of all
indebtedness and obligations of Debtor to Secured Party presently existing and
hereafter arising, direct or indirect, and interest thereon. Regardless of the
adequacy of any security which the Secured Party may at any time hold hereunder,
and regardless of the adequacy of any other security which Secured Party may
obtain at any of its offices from Debtor in connection with any other
transactions, any deposits or other moneys owing from Secured Party at any of
its offices to Debtor shall (as collateral in the possession of Secured Party)
constitute additional security for, any may be set off against, obligations
secured hereby even though said obligations may not then be due. When more than
one person is the Debtor, they shall be jointly and severally liable.

 DEBTOR HEREBY REPRESENTS, COVENANTS AND AGREES WITH SECURED PARTY AS FOLLOWS:

1. USE OF PROPERTY: Debtor agrees to comply with any governmental regulation
affecting the use of the property and will not use nor permit the use of the
property in any unlawful manner. Debtor represents and agrees that the primary
use of said property is for use and consumption in his business, for
manufacturing and for sale or lease.

2. DEBTOR AND COLLATERAL LOCATION: The address appearing next to Debtor's
signature below is the address of Debtor's chief executive office or, if the
Debtor has no place of business, his residence. If the collateral is not located
at the Debtor's address appearing below, it will be located at:
___________________________________________________________________________

___________________________________________________________________________ .
Debtor will give Secured Party prior written notice of any change in either the
Debtor's chief executive office or, if he has no place of business, his
residence and of any change in collateral location.

3. INVENTORY: The property covered hereby is and will be at times inventory of
the Debtor, and proceeds thereof, and any deposits or moneys owed at any
time by Secured Party to Debtor.

4. OWNERSHIP AND LIENS: Debtor owns the property and the same is free and clear
of all security interests and encumbrances of every nature. Debtor will not
create nor permit the existence of any lien or security interest other than that
created hereby on the property without the written consent of Secured Party. Any
certificate of title now or hereafter existing on any of the property will be
delivered to Secured Party and will recite the interest of Secured Party.

5. TAXES: Debtor will pay before delinquency all taxes or other government
charges that are or may become a lien or charge on the property and will pay any
tax which may be levied on any obligation secured hereby.

6. REPAIRS AND INSPECTION: Debtor will keep the property in good repair. Secured
Party may inspect the property at reasonable times and intervals and may for
this purpose enter the premises upon which the property is located.

7. INSURANCE: Debtor will keep the property continuously insured by an insurance
approved by Secured Party against fire, theft and other hazards designated any
time by Secured Party, in an amount equal to the full insurable value thereby or
to all sums secured hereby, with such form of loss-payable clause as designated
by and in favor of Secured Party, and will deliver the policies and receipts
showing payment of premiums to the Secured Party. In the event of loss, Secured
Party shall have full power to collect any and all insurance upon the property
and to apply the same at its option to any obligation secured hereby whether or
not matured, or to the restoration or repair of the property. Secured Party
shall have no liability whatsoever for any loss that may occur by reason or the
omission or lack of coverage of any such insurance.

    THE TERMS AND CONDITIONS APPEARING ON THE BACK HEREOF ARE PART OF THIS
                              SECURITY AGREEMENT.

Signed this __________day of ___________________________________________

432 Olds Station Road                         Wenatchee
________________________________________________________________________
     Street                                     City

                 WA                98801
________________________________________________________________________
County         State             Zip Code        ADDRESS OF DEBTOR (Print)

________________________________________________________________________

________________________________________________________________________

________________________________________________________________________
                     (SIGNATURE OF DEBTOR)

               NOTICE: SEE REVERSE SIDE FOR IMPORTANT INFORMATION

<PAGE>
8.   REMOVAL, SALE AND ACCOUNTING:  Without the prior written consent of Secured
Party, Debtor will not remove the property from the State of Washington. Debtor
may sell and dispose of said inventory, in the ordinary course of business,
whether now owned or hereafter acquired, so long as the terms and conditions of
this Security Agreement are kept and performed by Debtor, including the
following which Debtor agrees to perform except as otherwise agreed in writing
by Secured Party;

a.   All sales shall be for cash or upon credit for a term not exceeding ninety
(90) days; and

b.   All cash proceeds shall immediately be deposited in an account with Secured
Party designated as "collateral account" over which Debtor shall have no control
whatsoever, and which shall be held as security for the indebtedness of Debtor.

c.   All negotiable instruments and chattel paper proceeds shall immediately be
endorsed and delivered to Secured Party, with full authority to collect.

d.   All resulting accounts receivable arising from the sale or disposition of
the inventory are assigned to Secured Party with authority to notify and make
collections; Debtor covenants to deliver to Secured Party copies of all
invoices and records of collection or aging or otherwise thereof in such form
and frequency as Secured Party may require.

e.   All "trade-ins" and "returned merchandise" shall be retained by Debtor as
"inventory" subject to this Security Agreement.

f.   All collections by Secured Party shall be applied to any indebtedness of
Debtor secured by this agreement, either through the collateral account or
directly, as Secured Party shall elect.

g.   From time to time, Secured Party, at its discretion, shall make
applications from the collateral account onto any indebtedness secured hereby.

h.   Debtor will permit Secured Party or its duly accredited representatives to
examine its books and records at all reasonable times during business hours and
shall furnish such financial data and financial statements as Secured Party may
require from time to time.

i.   Whenever any of the property is stored in a warehouse, the warehouse
receipts evidencing such storage shall be appropriately endorsed by Debtor and
shall immediately be assigned by Debtor and delivered to Secured Party as
security for the indebtedness secured hereby.

9.   EXPENSES INCURRED BY SECURED PARTY:  Secured Party is not required to, but
may, at its option, pay any tax or other charge or expense payable by Debtor
and any filing or recording fees and any amounts so paid shall be repayable by
Debtor upon demand. Debtor will also repay upon demand all of Secured Party's
expenses incurred in collecting, insuring, conserving or protecting the
collateral or in any inventories, audits, inspections or other examination by
Secured Party in respect of the collateral. All such sums shall bear interest
at the lesser of 2% per month or the maximum rate permitted by law from the
date of payment by the Secured Party until repaid by Debtor and such sums and
interest thereon shall be secured hereby. The rights granted by this paragraph
are not a waiver of any other rights of Secured Party arising from breach of
any of Debtor's covenants.

10.  WAIVERS:  This Security Agreement shall not be qualified or supplemented
by course of dealing. No waiver or modification by Secured Party of any of the
terms or conditions hereof shall be effective unless in writing signed by
Secured Party. No waiver nor indulgence by Secured Party as to any required
performance by Debtor shall constitute a waiver as to any required performance
or other obligations of Debtor hereunder.

11.  DEFAULT:  Time is of the essence in this Security Agreement, and in any of
the following events, hereinafter called "Events of Default," to-wit:

a.  Any failure to pay when due the full amount of any payment of principal,
interest, taxes, insurance premiums or other charges which are or may be
secured hereby; or

b.  Any failure to perform as required by any covenant or agreement herein; or

c.  The falsity of any representation by Debtor herein or in any credit
application or financial statement given by Debtor to Secured Party as a basis
for any extension of credit secured hereby; or

d.  If the property should be seized or levied upon under any legal or
governmental process against Debtor or against the property; or

e.  If Debtor becomes insolvent or is the subject of a petition in bankruptcy,
either voluntary or involuntary, or in any other proceeding under the federal
bankruptcy laws; or makes an assignment for the benefit of creditors; or if
Debtor is named in or the property is subjected to a suit for the appointment
of a receiver; or

f.  Loss, substantial damage to, or destruction of any portion of the property;
or

g.  Entry of any judgment against Debtor; or

h.  Dissolution or liquidation of Debtor; or

i.  The Secured Party deems itself insecure.

    Then and in any of such events of default, the entire amount of
indebtedness secured hereby shall then or at any time thereafter, at the option
of Secured Party, become immediately due and payable without notice or demand,
and Secured Party shall have an immediate right to pursue the remedies set
forth in this Security Agreement.

12.  REMEDIES:  In the event of a default hereunder, Secured Party shall have
all remedies provided by law; and without limiting the generality of the
foregoing, shall be entitled as follows:

a.  Debtor agrees to put Secured Party in possession of the property on demand;
and

b.  Secured Party is authorized to enter any premises where the property is
situated and take possession of said property without notice or demand and
without legal proceedings; and

c.  At the request of Secured Party, Debtor will assemble the property and make
it available to Secured Party at a place designated by Secured Party which is
reasonably convenient to both parties; and

d.  Debtor agrees that a period of fifteen (15) days from the time notice is
sent, by first-class mail or otherwise, shall be a reasonable period of
notification of a sale or other disposition of the property; and

e.  Debtor agrees that any notice or other communication by Secured Party to
Debtor shall be sent to the address of the Debtor stated herein; and

f.  Debtor agrees to pay on demand the amount of all expenses reasonably
incurred by Secured Party in protecting or realizing on the property. In the
event that this Security Agreement or any obligation secured by it is referred
to an attorney for protecting or defending the priority of Secured Party's
interest or for collection or realization procedures, Debtor agrees to pay a
reasonable attorney's fee, including fees incurred in both trial and appellate
courts, or fees incurred without suit, and expenses of title search and all
court costs and costs of public officials. The sums agreed to be paid in this
subparagraph shall be secured hereby; and

g.  If Secured Party disposes of the property, Debtor agrees to pay any
deficiency remaining after application of the net proceeds to any indebtedness
secured hereby.

13.  APPLICABLE LAW:  This security agreement shall be governed by the laws of
the State of Washington.

(WBA) UCC-3   9/82       NOTICE: SEE OTHER SIDE FOR IMPORTANT INFORMATION.

                                                                 Initial _______

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00050-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00050-of-00352.parquet"}]]