Exhibit 10.19
GUARANTY AGREEMENT
This Guaranty Agreement (this
“Guaranty”) is made as of April 25, 2007, by TOM
T. O’KEEFE (“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 has 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). Guarantor acknowledges that Lender would not make
the Loan to Borrower without Guarantor’s execution and
delivery to Lender of this Guaranty.
B. The Loan is, or will be,
evidenced by that certain Promissory Note of even date, executed by
Borrower and payable to the order of Lender in the principal face
amount of Four Million and 00/100 Dollars ($4,000,000.00) (such
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”).
C. In connection with the Loan,
Borrower has executed that certain Security Agreement of even date
herewith (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,
Guarantor hereby guarantees to Lender the prompt and full payment
and performance of the indebtedness and obligations described below
in this Guaranty (collectively called 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, 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. 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. 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 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) 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
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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 attorneys’ fees and
expenses, investigation costs, court costs, and any and all other
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 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.
3. 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
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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) 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
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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 3(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.
(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 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 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. Lender shall be entitled to
continue to hold this Guaranty in its possession for a period of
one year from the date the Guaranteed Obligations are paid in
full
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and for so long thereafter as may be necessary
to enforce any obligation of Guarantor hereunder and/or to exercise
any right or remedy of Lender hereunder.
(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
