Exhibit 10.7(i)

 

EIGHTH AMENDMENT TO LEASE AGREEMENT

THIS EIGHTH AMENDMENT TO LEASE AGREEMENT is made and entered into as of the 7th
day of October, 2004, between RAINIER COMMONS, LLC, a Washington limited
liability company (“Lessor”), and TULLY’S COFFEE CORPORATION, a Washington
corporation (“Lessee”).

RECITALS

A. Pursuant to that certain Lease Agreement dated August 16, 1999, entered into
between Kent Central, LLC (“KCL”) and Lessee, as modified by those certain
amendments described in the attached Exhibit B (collectively, the “KCL Lease”),
KCL agreed to lease to Lessee certain premises as further described in the Lease
(the “Original Lease Premises”) on the real property located at 3100 Airport Way
South, Seattle, Washington, which is legally described as set forth on the
attached Exhibit A (the “Property”). On July 17, 2003, Lessor purchased the
Property from KCL, and thereby assumed all of KCL’s rights and obligations under
the Lease. Lessor and Lessee modified the lease by the Sixth Amendment to Lease
Agreement dated as of June 26, 2003, which became effective upon the July 17,
2003 closing of the purchase of the Property from KCL (the “Sixth Amendment”)
and further modified the lease by the Seventh Amendment to Lease Agreement dated
as of July 23, 2004 (the “Seventh Amendment”). The KCL Lease, as modified by the
Sixth Amendment and Seventh Amendment, is referred to herein as the Lease.

B. Lessor and Lessee have agreed to make certain modifications to the Lease on
the terms and conditions set forth in this Eighth Amendment to Lease Agreement
(the “Eighth Amendment”).

AGREEMENT

NOW, THEREFORE, in consideration of foregoing and the promises made below, and
other good and valuable consideration, the parties agree as follows:

1. Definitions. Except as otherwise stated in this Eighth Amendment, terms which
are defined in the Lease shall have the same meanings for this Eighth Amendment.

2. Amendments. Effective as provided herein, the Lease is hereby amended as
follows:

2.1 Modifications of Premises. Lessor and Lessee wish to remove from the Tully’s
Premises approximately 6,460 square feet of space as described on Exhibit E (the
“Building 5 and Building 5A Space” and to add approximately 6,636 square feet of
space as described on Exhibit E (the “Building 8 Level 4 Space”) to the Tully’s
Premises, as follows:

a) Lessor shall make improvements to the Building 8 Level 4 Space as provided in
Exhibit F (the “Building 8 Level 4 Improvements”). Lessor shall pay all costs
and expenses related to the Building 8 Level 4 Improvements. Lessor shall
complete the

 

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Building 8 Level 4 Improvements as soon as reasonably practicable, but not later
than October 31, 2004. Lessor shall notify Lessee in writing when the Building 8
Level 4 Improvements are completed (the “Building 8 Level 4 Availability
Notice”) and shall provide Lessee with a copy of any required certificates of
occupancy at that time.

b) Lessee shall inspect the Building 8 Level 4 Space within three business days
after receiving the Building 8 Level 4 Availability Notice and the parties shall
jointly prepare a punch list as to any omissions or defects in the Building 8
Level 4 Improvements requiring remedial action by Lessor. Lessor shall remedy
the punch list items. The Building 8 Level 4 Space shall be added to the Tully’s
Premises and removed from the Available Space, and may be occupied by Lessee,
commencing on the later of (i) the date of Lessee’s inspection and (ii) the date
of completion of remedial action for all punch list items that would otherwise
have prevented occupancy.

c) Within fifteen business days after the Building 8 Level 4 Space is added to
the Tully’s Premises, Lessee shall remove its property from the Building 5 and
Building 5A Space. Lessee shall notify Lessor in writing when Lessee has
completed the removal of its property (the “Building 5 and Building 5A Vacancy
Notice”). The Building 5 and Building 5A Space shall be removed from the Tully’s
Premises as of the date of the Building 5 and Building 5A Vacancy Notice, and
thereafter the Building 5 and Building 5A Space shall be included in the
Available Space. Lessee shall remove all of Lessee’s property from the Building
5 and Building 5A Space as provided herein, but shall not be required to make
any other repairs or restoration to the Building 5 and Building 5A Space and
Lessor shall otherwise accept the Building 5 and Building 5A Space “as is.”

d) The modification of the Tully’s Premises to include the Building 8 Level 4
Space and to exclude the Building 5 and Building 5A Space shall not result in
any change to the amount of Rent and Monthly Operating Expenses payable by
Lessee under the Lease,

2.2 Modified Premises. Exhibit C sets forth the Tully’s Premises as provided in
the Sixth Amendment. Upon completion of the undertakings set forth in this
Eighth Amendment, the Tully’s Premises shall be as set forth in Exhibit D. The
square footage areas set forth in Exhibits C and Exhibit D are approximations
accepted by the parties for purposes of administering the Lease and any
remeasurement of these premises or recomputation of square footage shall not
result in any change to the amount of Rent or Monthly Operating Expenses payable
by Lessee under the Lease.

2.3 Nitrogen Tanks. Lessor consents to the placement by Lessee of a nitrogen
storage tank on the Property (the “Tank”) at the location shown on Exhibit F
attached hereto, and to connect the Tank to the nitrogen gas transmission lines
on the Property, subject to the following:

a) Lessee shall be responsible for obtaining any permits required to have the
storage tank on the Property and shall not place Tank on the Property until such
permits are received.

 

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b) Lessee shall pay to Lessor any increase in the cost of Lessor’s insurance as
a result of the presence on the Property of the nitrogen tank.

c) In the event that at any time, the Tank is determined not to be in compliance
with applicable hazardous materials, fire, safety or building codes and
regulations (the “Codes”), Lessee shall take such remedial actions as may be
required to bring the Tank in compliance with the Codes, or shall remove the
Tank .

d) In the event that the location of the Tank interferes with Lessor’s proposed
use of the Property, Lessee agrees to move the Tank to another location on the
Property, as selected by Lessor, and meeting Lessee’s requirements, at Lessor’s
cost, within thirty (30) days after Lessor notifies Lessee in writing that the
Tanks interfere with Lessor’s proposed use of the Property and Lessor identifies
the new location.

e) Lessee shall indemnify, defend, hold harmless and protect Lessor, its
members, managers, employees, officers, agents, and representatives (hereinafter
the “Indemnified Parties”) from and against any and all losses, costs, expenses
(including reasonable attorneys’ fees), obligations, liabilities, claims
(including but not limited to any claim for damage to property or injury or
death of any persons), whether direct, contingent or consequential and no matter
how arising, in any way related to or arising from the presence of the Tank on
the Property, with counsel chosen by Lessor.

3. No Other Changes. Except as modified by this Eighth Amendment and as
otherwise agreed upon herein, all other terms of the Lease, including without
limitation all exhibits thereto, remain unchanged and in full force and effect.

4. Conflict and Construction; Definitions. In the event of any conflict between
the terms of this Eighth Amendment and the terms of the Lease, the terms and
provisions of this Eighth Amendment shall prevail. Capitalized terms not
otherwise defined in this Eighth Amendment shall have the meanings set forth in
the Lease.

5. Successor and Assigns. The terms and provisions of this Eighth Amendment
shall bind and inure to the benefit of Lessor and Lessee and their respective
successors and assigns. This Eighth Amendment may not be assigned by either
party except in connection with an assignment of the Lease in accordance with
the terms of the Lease.

6. Counterparts; Facsimile. This Eighth Amendment of Lease Agreement may be
executed in counterparts, each of which will be deemed an original, but all of
which together will constitute one and the same instrument. Executed
counterparts may be executed and transmitted via facsimile and such version
shall be deemed an original.

IN WITNESS WHEREOF, Lessor and Lessee have executed this Eighth Amendment
effective as the date set forth above.

 

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LESSOR:     LESSEE: RAINIER COMMONS, LLC     TULLY’S COFFEE CORPORATION By:  

/s/ Brett Goldfarb

    By:  

/s/ Kristopher S. Galvin

  Brett Goldfarb       KRISTOPHER S. GALVIN Its:   Voting Member     Its:  
EXECUTIVE VICE PRESIDENT By:  

/s/ Shimon Mizrahi

        Shimon Mizrahi       Its:   Voting Member      

 

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STATE OF WASHINGTON   )       ) ss.   COUNTY OF KING   )  

On this 7th day of October, 2004, before me personally appeared BRETT GOLDFARB,
the Voting Member of RAINIER COMMONS, LLC, who executed the within and foregoing
instrument, and acknowledged said instrument to be the free and voluntary act
and deed of said limited liability company, for the uses and purposes therein
mentioned, and on oath stated that he was authorized to execute said instrument.

IN WITNESS WHEREOF, I have hereunto set my hand and affixed my official seal the
day and year first above written.

 

[NOTARY SEAL OF PHILIP M. ROBERTS]      

/s/ Philip M. Roberts

    Philip M. Roberts                    (Print Name)     Notary Public in and
for the State     of Washington, residing at Seattle     My Commission Expires:
3/15/06

 

STATE OF WASHINGTON   )       ) ss.   COUNTY OF KING   )  

On this 7th day of October, 2004, before me personally appeared SHIMON MIZRAHI,
the Voting Member of RAINIER COMMONS, LLC, who executed the within and foregoing
instrument, and acknowledged said instrument to be the free and voluntary act
and deed of said limited liability company, for the uses and purposes therein
mentioned, and on oath stated that he was authorized to execute said instrument.

IN WITNESS WHEREOF, I have hereunto set my hand and affixed my official seal the
day and year first above written.

 

[NOTARY SEAL OF PHILIP M. ROBERTS]      

/s/ Philip M. Roberts

    Philip M. Roberts                    (Print Name)     Notary Public in and
for the State     of Washington, residing at Seattle     My Commission Expires:
3/15/06

 

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STATE OF WASHINGTON   )       ) ss.   COUNTY OF KING   )  

On this 7th day of October 2004, before me personally appeared KRISTOPHER S.
GALVIN the Executive Vice President of TULLY’S COFFEE CORPORATION, who executed
the within and foregoing instrument, and acknowledged said instrument to be the
free and voluntary act and deed of said corporation, for the uses and purposes
therein mentioned, and on oath stated that he was authorized to execute said
instrument.

IN WITNESS WHEREOF, I have hereunto set my hand and affixed my official seal the
day and year first above written.

 

[NOTARY SEAL OF PHILIP M. ROBERTS]      

/s/ Philip M. Roberts

    Philip M. Roberts                    (Print Name)     Notary Public in and
for the State     of Washington, residing at Seattle     My Commission Expires:
3/15/06

 

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EXHIBIT A

LEGAL DESCRIPTION OF PROPERTY

PARCEL 2:

Lots 1 through 6, Block 233, Seattle Tidelands, in King County, Washington, as
shown on the official maps on file in the Office of the Commissioner of Public
Lands at Olympia, Washington;

TOGETHER WITH Lots 1 through 12, Block 17, Hanford’s Addition to South Seattle,
according to the plat thereof recorded in Volume 1 of Plats, page 37, in King
County, Washington;

TOGETHER WITH ALL of vacated alley in said Block 17, as vacated under City of
Seattle Ordinance No. 38522;

TOGETHER WITH Lots 1 through 12, Block 16, Hanford’s Addition to South Seattle,
according to the plat thereof recorded in Volume 1 of Plats, page 37, in King
County, Washington;

TOGETHER WITH ALL of vacated alley in said Blocks 16, as vacated under City of
Seattle Ordinance No. 38521;

TOGETHER WITH ALL of vacated South Winthrop Street between said Blocks 16 and
17, as vacated under City of Seattle Ordinance No. 38522;

TOGETHER WITH that portion of vacated South Hanford Street adjoining Block 16,
as vacated under City of Seattle Ordinance No. 69571 and would attach by
operation of law;

TOGETHER WITH that portion of vacated Tenth Avenue South, as vacated under City
of Seattle Ordinance No. 95836, and described as follows:

BEGINNING at the intersection of the production south of the East line of Block
16 of said Plat of Hanford’s Addition to South Seattle and the Westerly
right-of-way line of the Seattle Freeway (Primary State Highway No. 1); thence
Northerly along said Westerly right-of-way line to the production east of the
North line of Lot 12, Block 17 of said plat; thence West along said produced
line to the East line of Block 17; thence South along said East line and the
same produced and along the East line of Block 16 to the POINT OF BEGINNING;
EXCEPT from the above described Parcel 2 any portion lying within the Northern
Pacific Railway Company right-of-way; EXCEPT that portion as conveyed to the
State of Washington for Primary State Highway No. 1 by deed recorded under
Recording No. 6199964.

 

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EXHIBIT B

AMENDMENTS TO THE LEASE AGREEMENT

AMENDMENTS TO THE ORIGINAL LEASE

1. First Lease Amendment dated December 17, 1999, entered into between KCL and
Lessee;

2. Second Lease Amendment dated June 6, 2000, entered into between KCL and
Lessee;

3. Third Lease Amendment dated November 7, 2000, entered into between KCL and
Lessee;

4. Fourth Lease Amendment dated February 21, 2001, entered into between KCL and
Lessee; and

5. Fifth Lease Amendment dated November 1, 2002, entered into between KCL and
Lessee.

AMENDMENTS BETWEEN LESSEE AND LESSOR

1. Sixth Amendment to Lease Agreement dated as of June 26, 2003, entered into
between Lessor and Lessee, and effective as of July 17, 2003

2. Seventh Amendment to Lease Agreement dated as of July 23, 2004, entered into
between Lessor and Lessee

 

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EXHIBIT C: PREMISES AFTER SIXTH LEASE AMENDMENT

Exhibit C to Sixth Amendment to Lease Agreement

 

LEVEL NUMBER

    

BLDG. NUMBER

   BSMNT     LVL 1    LVL 2    LVL 3    LVL 4    LVL 5    LVL 6    LVL 7    LVL
8    S.F. PER
BLDG    TULLY’S   

COMMENTS

   AREA 1                                  

24

   *1632     1617    1632                      3249    3,249   

1

     1358    1344                      2702    2,702   

2

        2232                      2232    2,232   

3

        3587                      3587    3,587       AREA 2                   
              

4

        1295    1295                   2590    1,295   

5

        1211    1198       1198    1179    1297       6083    2,396   

5A

        1828    1828       1826             5482    3,654   

13

     3033    1146                      4179      

12

     1172                         1172    1,172   

23

     586    586                      1172    1,172   

11

     1348    1349                      2697    2,697   

10

     1279    1278    504    1284                4345    2,557   

19

           1486          977          2463      

20

           458                   458      

21

           2793       2793    2874       3107    11567      

39

                             0          AREA 3                                  

22

           5291    5291    5291    5289          21162      

25

        1062    5512    8854    8854    8854    8854    2047    44037    180   
Rooftop space on SE corner containing cell lower

6

        3921    4043    4025    3921             15910    11,989   

7

        4486    4381    4381    4489             17737      

9

     5244/3000    5106/2500                      10350    5,500    Tully’s
space: 3,000 on level 1. 2500 on level 2

8

     6848    8397    8327    6636                30110    23,474   

26

     957                         957    957   

27

                             0          AREA 4                                  

14

     5714    6978                      12692    5,714   

15

     5668    5647                      11315    5,068   

16

                             0      

100

        3532                      3532      

S.F. PER LEVEL

   *1632 *   29572    51421    37116    30471    28372    19173    10151    5154
        

TOTAL

                             221780          NEW FLOOR INFILL                  
           

13 NEW FLOOR INFILL

        1635                           

21 NEW FLOOR INFILL

                 320                  

22 NEW FLOOR INFILL

              2838    2838    2838               

TOTAL NEW FLOOR INFILL

     0    1635    0    2838    3158    2838    0    0    10469      

FLOOR INFILL

   *1632 *   29572    53056    37116    33309    31530    22011    10151    5154
        

TOTAL

                             232249    80,115   

 

xxx Highlighted areas represent the Tully’s Premises under Sixth Amendment

 

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EXHIBIT D: PREMISES AFTER EIGHTH LEASE AMENDMENT

 

LEVEL NUMBER

  

COMMENTS

BLDG. NUMBER

  BSMNT     LVL 1   LVL 2   LVL 3   LVL 4   LVL 5   LVL 6   LVL 7   LVL 8   
S.F. PER BLDG.    TULLY’S
after 6th
Amendment    TULLY’S
after 8th
Amendment      AREA 1                              

24

  *1632 *   1,617   1,632                3,249    3,249    3,249   

1

    1,358  

1,344

               2,702    2,702    2,702   

2

      2,232                2,232    2,232    2,232   

3

      3,587                3,587    3,587    3,587      AREA 2                  
           

4

      1,295   1,295              2,590    1,295    1,295   

5

      1,211   1,198     1,198   1,179   1,297      6,083    2,396      
Levels 3 and 5 of Bldg 5 removed from Tully’s premises under 8th Amendment

5A

      1,828   1,828     1,826          5,482    3,654       Levels 3 and 5 of
bldg 5A removed from Tully’s premises under 8th Amendment

13

    3,033   1,146                4,179         

12

    1,172                  1,172    1,172    1,172   

23

    586   586                1,172    1,172    1,172   

11

    1,348   1,349                2,697    2,697    2,697   

10

    410 /
8691   1,278   504   1,284            4,345    2,557    9,142   

19

        1,486       977        2,463         

20

        458              458         

21

        2,793     2,793   2,874     3,107    11,567         

39

                                AREA 3                              

22

        5,291   5,291   5,291   5,289        21,162         

25

      1,062   5,512   8,854   8,854   8,854   8,854   2,047    44,037    100   
  

6

      3,921   4,043   4,025   3,921          15,910    11,989    11,989   

7

      4,486   4,381   4,381   4,489          17,737         

9

    5,244 /
3,000   5,106 /
2,500                10,350    5,500    5,500    Tully’s space: 3,000 on
level 1, 2500 on level 2

8

    6,840   8,307   8,327   6,636            30,110    23,474    30,110    Level
4, Bldg 8 added to Tully’s Premises under 8th Amendment. Total does not include
area to be provided for relocated AWS equipment per 7th Amendment

26

    957                  957    957    957   

27

                     —              AREA 4                              

14

    5,714   6,978                12,692    5,714    5,714   

15

    5,668   5,647                11,315    5,668    5,668   

16

                     —           

100

      3,532                3,532         

TOTAL

                     221,780            NEW FLOOR INFILL                       
  

13 NEW FLOOR INFILL

      1,635                        

21 NEW FLOOR INFILL

            320                  

22 NEW FLOOR INFILL

          2,838   2,838   2,838                

TOTAL NEW FLOOR INFILL

    —     1,635   —     2,838   3,158   2,838                

FLOOR INFILL

  0     —     1,635   —     2,838   3,158   2,838                

TOTAL

                     232,249    80,115    80,191    Total does not include
rooftop or interior space for Cell hardware as per Amendment 7 (relocated
installation)

 

XXX

   Part of this floor included in Tully’s Premises after 8th Amendment    XXX   
Highlighted areas represent the Tully’s Premises under the Sixth Amendment      
XXX    Highlighted areas Tully’s Premises to be transferred to Rainier Commons
under 8th Amendment       XXX    Highlighted areas Rainier Commons Premises to
be added to Tully’s Premises under the 8th Amendment

 

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Exhibit E

Modifications to the Tully’s Premises Under the Eighth Amendment

Building 5 and Building 5A Space:

 

  ¡  

The space, with an area of approximately 1,198 square feet, commonly referred to
as level 3 in the building commonly referred to as Building 5

 

  ¡  

The space, with an area of approximately 1,198 square feet, commonly referred to
as level 5 in the building commonly referred to as Building 5

 

  ¡  

The space, with an area of approximately 1,828 square feet, commonly referred to
as level 3 in the building commonly referred to as Building 5A

 

  ¡  

The space, with an area of approximately 1,826 square feet, commonly referred to
as level 5 in the building commonly referred to as Building 5A

 

  ¡  

The space, with an area of approximately 410 square feet, commonly referred to
as the “Antigua conference room” on level 1 in the building commonly referred to
as Building 10

Building 8 Level 4 Space:

 

  ¡  

The space, with an area of approximately 6,636 square feet, commonly referred to
as level 4 in the building commonly referred to as Building 8

 

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Exhibit G

Nitrogen Bulk Storage Area

LOGO [g77413img_04.jpg]

 

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Exhibit F

Lessor Improvements to the Building 8 Level 4 Space

 

1) Obtain any required permits

 

2) Patch & repair wall surfaces to remain as required to receive new paint per
plan,

 

3) Paint all wall surfaces as required per plan.

 

4) All interior partitions, penetrations and other openings shall be sealed,
gasketed, or weather-stripped as required,

 

5) Install recycled doors and windows per plan.

 

6) Repair or replace damaged windows as required.

 

7) Remove partitions per plan.

 

8) Remove existing carpet and rubber base per plan.

 

9) Treat all areas for existing mold issues.

 

10) Install new commercial grade carpet and rubber base per Lessee-supplied
specifications.

 

11) Install new vinyl composition tile as indicated per plan per Lessee-supplied
specifications.

 

12) Provide all electrical upgrades for environmental controls i.e. HVAC per
Lessee-supplied specifications.

 

13) Provide HVAC system per Lessee-supplied specifications.

 

14) Provide all electrical, upgrades as indicated per plan.

 

15) Install all wiring required for communication systems.

 

16) Repair or replace all restroom fixtures as required to provide working
restrooms that shall include both hot and cold running water.

 

17) Repair or replace all lighting fixtures as required. Install new lighting
fixtures as required.

 

18) Clean, repair or replace soiled or damaged ceiling tiles and grid.

 

19) Upgrade ceiling grid to current seismic bracing codes as required by code.

 

20) Provide racking system specified per Lessee as indicated for record storage
area.

 

21) Provide labor to relocate records from current location to new location as
indicated per plan.

 

22) Provide gas, venting for Cupping and R&D Room per Lessee-supplied
specifications.

 

23) Install fire alarm and suppression system to comply with all existing codes.

 

24) Encapsalate all ACM (asbestos containing material) as approved by current
codes

 

25) Repair and refinish existing casework per Lessee-supplied specifications.

 

26) Abate all lead as required by code.

 

27) Clean and repair existing floors as indicated per plan.

 

28) Complete any required inspections and obtain certificates of occupancy

 

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