Amendment No. 6 to Lease Agreement, dated June 26, 2003



 EXHIBIT 10.27 
  
 SIXTH AMENDMENT TO LEASE AGREEMENT 
  
 THIS SIXTH AMENDMENT TO LEASE AGREEMENT is made and entered into as of the 26th day of June, 2003, between RAINIER COMMONS,
LLC, a Washington limited liability company (“Lessor”), and TULLY’S COFFEE CORPORATION, a Washington corporation (“Lessee”). 
  
 RECITALS 
  
 A.    Lessor has entered into a written agreement with Kent Central, LLC (“KCL”) to purchase 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”). Pursuant to that certain Lease Agreement dated August 16, 1999, entered into between KCL and Lessee, as
modified by those certain amendments described in the attached Exhibit B (collectively, the “Lease”), KCL agreed to lease to Lessee certain premises as further described in the Lease (the “Original Lease Premises”).

  
 B.    If and when Lessor closes the
purchase of the Property from KCL, Lessor will assume all of KCL’s rights and obligations under the Lease. 
  
 C.    Subject to the Lessor’s acquisition of fee title to the Property, Lessor and Lessee have agreed to make certain
modifications to the Lease on the terms and conditions set forth in this Sixth Amendment to Lease Agreement (“Sixth 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.    Effective
Date.    This Sixth Amendment shall become effective upon the date (the “Effective Date”) upon which Lessor unconditionally acquires fee title to the Property from KCL. If Lessor does not unconditionally acquire
fee title to the Property from KCL on or before August 31, 2003, this Sixth Amendment shall be null and void and of no further effect. 
  
 2.    Amendments.    Effective as of the Effective Date, the Lease is hereby amended as
follows: 
  
 2.1    Premises.    Section 1 of the Lease is hereby amended to as follows: (a) Lessee and Lessor have agreed that Lessee shall occupy the spaces within the Property identified on Exhibit C,
comprising approximately 80,115 square feet (the “Tully’s Premises”).and (b) the term “Premises” as used in the Lease will be limited to the Tully’s Premises as determined above. Without limiting the foregoing, the
Tully’s Premises shall include exclusive and unrestricted access to and use of the existing loading dock and all other areas included in the Tully’s Premises. The parking spaces reserved for Lessee, the loading dock, and any other spaces
outside of the buildings comprising the Property that may be used exclusively by Lessee or in common with the New Tenants (as defined below), and the additional storage space as set 
  

 1 








 forth in the next paragraph are not considered in the determination of the square feet of the Tully’s Premises.

  
 In addition to the Tully’s Premises, Lessor shall make
available to Lessee additional storage space within the Original Lease Premises (but not included within the Tully’s Premises). The maximum total amount of additional storage space which may be provided to Lessee under this section at any time
is 5,000 square feet. The additional storage space shall be located at Lessor’s discretion and may be in more than one location in the Property. The additional storage space shall be subject to reasonable security and shall be suitable for dry
storage of equipment, records or merchandise. Lessor shall have no obligation to install any tenant improvements in the additional storage space, or to perform any maintenance services for the additional storage space, and may change the location of
the additional storage space from time to time. Lessee shall give Lessor a written request for such additional storage space not less than 30 days prior to its anticipated requirement. There shall be no additional Base Rent or Monthly Operating
Expense paid by Lessee in connection with the additional storage space, and Lessee shall not be entitled to any reduction in Base Rent or Monthly Operating Expense if Lessee does not use the additional storage space or if the actual additional
storage space used is less than 5,000 square feet. 
  
 2.2    Rent.    Section 3 of the Lease is hereby amended and restated to read as follows: 
  
 3.    Rent.    Lessee covenants and agrees to pay Lessor rent in advance without offset or deduction on or before
the 1st day of each month of the Lease term in the amounts as follows: 
  

	 Months

	  	 Monthly
 Base
Rent


	 (from date of this Sixth Amendment until December 31, 2003)
	  	$	51,033
	 January 1, 2004 through May 14, 2005
	  	$	43,378
	 May 15, 2005 through May 14, 2010
	  	$	49,885

  
 2.3    Monthly Operating Expense Adjustments.    Section 9 of the Lease is hereby amended to provided that, commencing on January 1, 2004 and continuing through the end of the Lease term,
Lessee will pay 50% of the actual Monthly Operating Expenses for the Property as its pro rata share. From the Effective Date to January 1, 2004 Lessee shall continue to pay 100% of the actual Monthly Operating Expenses for the Property. 

 
 2.4    Utilities.    Section 8 of the Lease is hereby amended to provide that the utilities for the Tully’s Premises shall be separately metered, and that for utilities and services not
subject to metering, such as garbage collection, separate service and billings shall be established with the service provider. If separate metering (or separate service and billings, as 
  

 2 








 applicable) is not reasonably practicable, the parties shall negotiate an appropriate method to allocate such costs. If
separate metering (or separate service and billings, as applicable) is not reasonably practicable and the parties are unable to agree upon an appropriate method to allocate such costs, and during the time that the parties may be discussing the
allocation method and/or until separate metering (or separate service and billings, as applicable) is accomplished if at all, Tully’s shall pay an amount equal to the average monthly usage in the applicable units of measure over the two (2)
year period prior to the Effective Date, priced at the actual average current cost per unit set forth on the service provider’s billing, but shall not pay in any case more that the total actual cost set forth on the service provider’s
billing. Any costs related to establishment of separate metering shall be considered to be costs of Lessor Work. 
  
 2.5    Termination of Right to Require Lessee to Vacate Premises in 150 Days.    The parties agree
that the provisions granting KCL a right to terminate the Lease and/or require Lessee to vacate the Original Lease Premises upon 150 days notice contained in (i) that certain letter dated March 19, 2002, executed by KCL and Lessee, and (ii) Section
2 of the Fifth Lease Amendment referred to in Exhibit B are here are hereby terminated and that such provisions shall be considered null and void and of no further force and effect. 
  
 2.6    Impact of Lessor
Work.    Lessor expects to rehabilitate, remodel, develop, demolish, improve and partition the portion of the Property that is not within the Tully’s Premises (the “Available Space”) (the “Lessor
Work.”). Lessor hereby agrees that any and all Lessor Work and any and all other development, demolition, improvement, partitioning and remodeling of the Property undertaken by Lessor or any of its agents shall not disturb Lessee’s use and
enjoyment of the Tully’s Premises nor negatively impact Lessee’s security nor increase Lessee’s costs of security in the Tully’s Premises. All Lessor Work shall be performed in compliance with applicable codes, regulations and
laws. All Lessor Work shall be performed at no cost to Lessee. 
  
 2.7    Signage.    Lessor agrees that Lessee shall continue to have the right (but not the obligation) to maintain in place the Tully’s green “T” on top of the building where it
is currently placed. In addition, Lessee shall continue to have the right to maintain, use, replace and update all other existing exterior signage that is currently present on any of the buildings on the Property or otherwise located on the
Property. Lessor will pay to repair or replace any such signage that is affected by any repainting or remodeling of the Property by Lessor. With the consent of Lessor, which may not be unreasonably withheld, Lessee may hang seasonal promotional
banners on the exterior of the buildings included in the Property. Lessee shall pay no additional rent or charges to Lessor in connection with the green “T”, the other exterior signage, or the promotional banners, but Lessee shall pay all
costs associated with the replacement, maintenance and operation of such signage except when such costs result from the repainting or remodeling of the Property by Lessor. Lessee’s signage rights under this Section 2.7 shall be subject to the
limitations and requirements of applicable laws, regulations and ordinances. All such signage referred to herein shall not be subject to Section 15 of the Lease, except that the last sentence in Section 15 of the Lease shall apply to such signage.

  

 3 








 2.8    Removal of Lessee’s Properties.    Lessee
shall remove its inventories and other properties (“Lessee Properties”) from the Available Space no later than 90 days from the Effective Date (the “hand-over date”). If any Lessee Properties are in the Available Space after the
hand-over date, the Lessee Properties may be removed by Lessor from the Available Space upon two business days notice to Lessee, and Lessor shall not be responsible for loss or damage incurred as a consequence of such action. 
  
 2.9    Quiet Enjoyment and Use of the
Premises.    Lessee acknowledges that Lessor expects to rent some or all of the Available Space to other parties (the “New Tenants”). Lessor shall conduct its leasing of the Available Space, and its administration
of the leases to the New Tenants, in a manner that preserves and protects the quiet enjoyment of the Tully’s Premises by Lessee and that does not in any way diminish or conflict with Tully’s rights under the Lease. Lessor shall establish
reasonable parking rules and regulations for the Property and shall identify parking spaces as reserved or unreserved- general use. During normal business hours (which shall be defined for this purpose as 8:00 AM to 5:00 PM Pacific Time, Monday
through Friday, excluding New Years Day, Memorial Day, July 4th, Labor Day, Veteran’s Day, Thanksgiving Day, and Christmas Day), Tully’s shall have 80 reserved parking spaces for its exclusive use, located in front of the Tully’s
Premises, and may also use unreserved- general use parking spaces as they may be available. Outside of normal business hours all parking spaces on the Property shall be unreserved-general use. Lessor may establish any fees for parking; provided that
any such fees for parking at the Property shall not apply to Lessee, nor shall they apply to Lessee’s employees, vendors and visitors. Lessee may not charge for parking on the Property. 
  
 2.10    Offering of Additional
Space.    From time to time, space within the Available Space may become available for rent or lease. As such space becomes available for rent or lease, Lessor shall notify Lessee of the particulars of the space, including
the Lessor’s requirements for rent and other reimbursements and terms for such space. Notification of Lessee does not establish any right of first refusal or other right for Lessee and Lessor shall have the right to enter into a rental or lease
agreement with any party or parties whether or not such notice is given and whether or not Lessee is interested in the space. 
  
 If Lessee wishes to enter into a lease or rental agreement for such space, it shall inform Lessor. If Lessor agrees to enter into a lease for such space with Lessee any
such agreement shall be separate from the Lease, and the terms and conditions of the Lease shall not apply to the lease for such additional space. 
  
 2.11    Lessor Use of the Mountain Room.    This section 2.11 shall apply only if the portion of the
Property commonly described as the “Mountain Room” is included in the Tully’s Premises. From time to time, Lessor may request from Lessee that the Mountain Room be made available as the site for a future meeting or special event to be
hosted by Lessor or a New Tenant of Lessor. Subject to the availability of the Mountain Room, and subject to the other administrative policies and requirements that Lessee may have established for third-party use of the Mountain Room, Lessee shall
reasonably cooperate with the requests of Lessor. 
  

 4 








 3.    No Other Changes.    Except as modified by
this Sixth 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 Sixth Amendment and the terms of the Lease, the terms and provisions of this Sixth Amendment shall prevail. Capitalized terms not otherwise defined in this Sixth Amendment shall have the meanings set forth in the
Lease. 
  
 5.    Amendment and
Restatement of Lease and Further Modifications.    After the Effective Date, the parties hereby agree to use their respective reasonable best efforts to amend and restate the Lease into a single amended and restated lease
taking into account all of the prior lease amendments including this Sixth Amendment. In addition, the parties acknowledge that the existing Lease is based on a single tenant in an industrial setting and that given the changes to the Lease
incorporated by this Sixth Amendment, Lessee will no longer be the sole tenant of the Property. In addition, the parties acknowledge that Lessor’s development plans for the portions of the Property that are not leased to Lessee may require
further adjustments and modifications to the Lease. Accordingly, the parties also agree that, in connection with the amendment and restatement of the Lease described above, the parties will also use their reasonable best efforts to amend and modify
the Lease to (i) reflect that the Property will now have multiple tenants, and (ii) to take into account the development work that Lessor may undertake with respect to the Property. 
  
 6.    Successor and Assigns.    The terms and provisions of
this Sixth Amendment shall bind and inure to the benefit of Lessor and Lessee and their respective successors and assigns. This Sixth Amendment may not be assigned by either party without the consent of the other party, which may be withheld in its
sole judgment. 
  
 7.    Counterparts;
Facsimile.    This Sixth 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. 
  

 5 








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

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

  

	By:	 	/s/    SHIMON MIZRAHI         	 	 	 	By:	 	/s/    ANTHONY J. GIOIA        
	 	
	 	 	 	 	

	 	 	Shimon Mizrahi	 	 	 	 	 	Anthony J. Gioia
	 	
	 	 	 	 	

	Its:	 	Manager	 	 	 	Its:	 	President and CEO

  
 STATE
OF WASHINGTON    ) 
                                        
   ) ss. 
 COUNTY OF
KING                 ) 
  
 On this              day of
            , 2003, before me personally appeared             , the
             of             , 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.

  

	 	 	                                      
                                        
        
	 	 	                                      
                                        
 (Print Name)
	 	 	Notary Public in and for the State
	 	 	 of Washington, residing
at                                       
              

	 	 	 My Commission
Expires:                                      
                 


  
 STATE
OF WASHINGTON    ) 
                                        
   ) ss. 
 COUNTY OF
KING                 ) 
  
 On this              day of
            , 2003, before me personally appeared             , the
             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. 
  

 6 








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

	 	 	                                      
                                        
        
	 	 	                                      
                                        
 (Print Name)
	 	 	Notary Public in and for the State
	 	 	 of Washington, residing
at                                       
              

	 	 	 My Commission
Expires:                                      
                 


  

 7 








 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. 
  

 8 








 EXHIBIT B 
  

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. 
  

 9 








 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	 	100	 	 Rooftop space on SE corner
 containing cell tower

	 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
	 	 	 	 	6840	 	8307	 	8327	 	6636	 	 	 	 	 	 	 	 	 	30110	 	23,474	 	 
	 26
	 	 	 	 	957	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	957	 	957	 	 
	 27
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	0	 	 	 	 
	 	 	AREA 4	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 14
	 	 	 	 	5714	 	6978	 	 	 	 	 	 	 	 	 	 	 	 	 	12692	 	5,714	 	 
	 15
	 	 	 	 	5668	 	5647	 	 	 	 	 	 	 	 	 	 	 	 	 	11315	 	5,668	 	 
	 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 the Sixth Amendment 
  

 10