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SUPPLY AGREEMENT
  
    (Tully's Coffee Corporation)    
  

[*—Material
has been omitted pursuant to a request for confidential treatment in accordance with Rule 24b-2 under the Securities Exchange Act of 1934, as
amended. The redacted material has been filed separately with the Securities and Exchange Commission.] 

        THIS
AGREEMENT is entered into as of April            , 2001, by and between TULLY'S COFFEE CORPORATION ("Seller") and  TULLY'S COFFEE JAPAN, LTD., a company organized under the laws of Japan ("Buyer") with respect to the purchase of coffee and related products.
 

RECITALS  

        A.    Seller roasts, prepares and/or distributes the Products listed on the attached  Schedule 1. 

        B.    Buyer has the exclusive right to use Seller's proprietary trademarks and to sell and distribute Tully's Products in Japan
through Tully's Stores (as defined in the License Agreement described in Section 1 below) and desires to ensure a high quality, cost-competitive and consistent supply of Tully's
Products for sale and distribution. 

AGREEMENT  

        NOW, THEREFORE, the parties hereby agree as follows: 

        1.        Term.    The term of this Agreement shall commence on the date set forth
above and continue for the period that certain April 26, 2001 "Tully's Coffee License Agreement" (the "License Agreement") between the parties to this Agreement remains in effect (the "Term").
In the event that Buyer's right to use Seller's proprietary trademarks and sell and distribute Tully's Products under the License Agreement ends or is otherwise terminated, this Agreement may be
terminated by either party upon thirty (30) days prior written notice at any time thereafter. 

        2.        Purchase Requirements.    During the Term of this Agreement Buyer shall
purchase exclusively from Seller all of Buyer's requirements or needs for roasted coffee beans, ground coffee, and related paper, plastic and the other products listed on  Schedule 1 (the "Tully's
Products") needed to operate Buyer's retail stores in Japan in accordance with the following terms and conditions: 

        2.1      Price.    The price of each Tully's Product shall be in U.S. Dollars,
F.O.B. Port of Seattle, Washington, U.S.A., or with respect to the Tully's Products (except for roasted coffee beans) that originate from countries other than the U.S., F.O.B. a port of the country of
origin of such products. [    *    ] Changes in prices shall apply to any purchase order received on or after the effective date of the change. 

        2.2      Delivery.    Delivery of all Products shall be F.O.B. Port of Seattle,
Washington, U.S.A. or with respect to the Tully's Products (except for roasted coffee beans) that originate from countries other than the U.S., F.O.B., a port of the country of origin of such
products. Title and risk of loss shall pass to Buyer upon delivery of the Tully's Products to the carrier. Buyer shall be responsible for all freight charges, freight insurance and all import, export,
duties, taxes and charges imposed by the international transportation of the Tully's Product. Buyer shall also be responsible for compliance with any export and import policies and procedures in the
receiving country, including special licenses, packaging, marking and labelling standards, and any other requirements established by any governing agency. 

        Seller
shall use commercially reasonable efforts to accept purchase orders for the Tully's Products that Buyer from time to time places. If Seller accepts an order for the Tully's
Products, Seller shall deliver its acceptance to Buyer within three (3) business days after its receipt of the order. Seller shall have the right to accept individual components of a particular
purchase order even if other components are not accepted. Further, Seller shall use commercially reasonable efforts to deliver to the carrier all the Tully's Products within twenty-one
(21) days of its acceptance of Buyer's purchase order or such 

other lead times as are prescribed by Seller in Schedule 1 for particular products from time to time, provided payment has been arranged in accordance with paragraph 2.3 below. Seller
shall not be liable for damages resulting from late shipments. However, Seller shall inform Buyer as soon as reasonably possible, in case of a delay in the delivery of an order. If Buyer fails to
specify a carrier, Seller may elect a carrier at Buyer's risk and expense. Buyer shall have the right to inspect and accept or reject any shipped Product for a period of five (5) days following
the completion of customs clearance thereof in Japan. Product may only be rejected if it is damaged or defective. If properly rejected as damaged or defective, Buyer shall ship such Tully's Product to
Seller at Seller's expense unless requested by Seller to dispose of such products in Japan, and the purchase order adjusted accordingly. No product may be rejected without written documentation of any
alleged damage or defect reasonably acceptable to Seller. 

        In
the event that Seller does not accept a purchase order (or any component thereof) from Buyer, the parties shall engage in good faith discussions with regard to allowing Buyer to
procure any non-accepted item from alternative sources. 

        2.3      Payment.    All payments of the purchase price contemplated by this
Agreement shall be in United States currency at Seller's designated United States bank. Except as otherwise specified in this paragraph, terms of payment of all Tully's Products shall be 50% of
purchase price shall be paid by wire transfer at time of the Products are delivered to a carrier for shipment, with the remainder due fifteen (15) days after completion of customs clearance
thereof in Japan. Payment shall be by wire transfer to the account or accounts from time to time designated by Seller. Currency conversion shall be determined as of the date of each payment. 

        3.        Definitive Text.    Notwithstanding any translation of this Agreement, the
English text is the sole and definitive text binding on the parties, and the English language shall control the rights and responsibilities of the parties. All written and oral communications between
the parties shall be in English. 

        4.        Minimum Quantities.    Upon prior written notice to Buyer, Seller shall
have the right to establish reasonable minimum quantities for orders of the Products. 

        5.        Notices.    All notices or other communications required or contemplated
by this Agreement shall be in English and in writing, and shall be sent by facsimile, courier or prepaid registered first class airmail to the address for each party designated below or to such other
address as either party may designate in a notice that complies with this paragraph. 

	
If to Seller:	

Tully's Coffee Corporation

3100 Airport Way South

Seattle, Washington 98134 U.S.A.

Attention: Mr. James S. Colbourne

Fax: (206) 233-2077
	
If to Buyer:	

Tully's Coffee Japan

3-4-1 Takanawa, Minato-ku

Tokyo Japan

Attention: Mr. Kouta Matsuda

Fax: 03-5798-8021

Communications
sent in accordance with this paragraph shall be deemed to have been given: on the date of receipt, in the case of facsimile or courier; or on the tenth (10th) business day following
mailing (unless actually received on an earlier date) in the case of airmail. 

        6.        Enforcement.

        6.1.      Judicial Enforcement, Injunction, and Specific
Performance.    Notwithstanding Section 6.2, Seller shall have the right to elect to seek injunctive or equitable relief as provided for in this 

Section 6.1. in the state or federal courts situated in Seattle, Washington, USA (and/or in any appellate court therefrom). The parties each consent to jurisdiction in such courts, waive
objection to such venue, and waive trial by jury. The parties stipulate and agree that any judgment relating to this Agreement which is entered in a court located within the State of Washington shall
be binding throughout the world and may be sued upon, docketed, entered and/or enforced, without challenge or opposition on their part and without re-trial of any of the issues which gave
rise to such judgment, in any state, country, province, commonwealth or territory having jurisdiction over their respective persons or properties. Seller shall be entitled, without bond, to the entry
of temporary and permanent injunctions and orders of specific performance enforcing the provisions of this Agreement, the obligations of Buyer upon termination or expiration of this Agreement, and to
prohibit any act or omission by Buyer that constitutes a violation of any applicable law, ordinance, or regulation. If Seller secures any such injunction or order of specific performance, Buyer agrees
to pay to Seller an amount equal to the aggregate of its costs of obtaining such relief, including without limitation reasonable attorney and expert witness fees, costs of investigation and proof of
facts, court costs, other litigation expenses, and travel and living expenses, and any damages incurred by Seller as a result of the breach of any such provision.. If Seller commences any such action
for an injunction or order of specific performance and is not the prevailing party therein, Seller agrees to pay to Buyer an amount equal to the aggregate of Buyer's costs of defending against such
relief, including without limitation reasonable attorney and expert witness fees, costs of investigation and proof of facts, court costs, other litigation expenses, and travel and living expenses, and
any damages incurred by Buyer as a result of such proceedings. 

        6.2.      Arbitration.    Except insofar as Seller elects to enforce this
Agreement by judicial process, injunction, or specific performance as hereinabove provided, all disputes and claims relating to any provision hereof, any specification, standard, or operating
procedure, or any other obligation of Buyer prescribed by Seller, or any obligation of Seller, or the alleged breach thereof (including without limitation any claim that this Agreement, any provision
thereof, any specification, standard, or operating procedure, or any other obligation of Buyer or Seller, is illegal or otherwise unenforceable or voidable under any law, ordinance, or ruling) shall
be settled by arbitration at Seattle, Washington, under the U.S. Arbitration Act (9 U.S.C. §§ 1 et seq.), if applicable, and the Rules of the American Arbitration Association
(under the general rules of commercial arbitration), provided that the arbitrator shall award, or include in his award, the specific performance of this Agreement unless he determines that performance
is impossible. Judgment upon the award of the arbitrator may be entered in any court having jurisdiction thereof or over Seller or Buyer. 

        7.        Integration and Modification.    This is the entire agreement between the
parties with respect to the subject matters hereof. For such matters, there are no other agreements or representations not set forth herein, and this Agreement incorporates all prior negotiations,
agreements, and representations. This Agreement may not be modified except in writing signed by each party. 

        8.        Counterparts.    This Agreement may be signed in one or more counterparts,
each of which may be deemed an original, but all of which together shall constitute one and the same agreement notwithstanding that both parties are not signatories to each counterpart, however, this
agreement shall not be enforceable against any party until a counterpart has been executed by both parties hereto. 

        IN
WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed by their duly authorized officers on and as of the date hereof. 

	

 	
 	
SELLER:
	

 	

 	

TULLY'S COFFEE CORPORATION
	

 	

 	

By:	

 
	

 	
 	

 	

	

 	
 	

Its:	

 
	

 	
 	

 	

	

 	

 	

 BUYER:
	

 	

 	

TULLY'S COFFEE JAPAN
	

 	

 	

By:	

 
	

 	
 	

 	

	

 	
 	

Its:	

 
	

 	
 	

 	

 
 

SCHEDULE 1 TO SUPPLY AGREEMENT    
  

        Tully's Products include all of Buyer's requirements or needs (in connection with Buyer's operation of Tully's Stores in the Territory) for roasted coffee beans,
ground coffee, cups, napkins, plastic silverware, other paper and plastic items imprinted with Tully's marks, signs, furniture, fixture and equipment, including without limitation the products
specifically identified in the Exhibit A attached to this Schedule 1. Buyer acknowledges and agrees that Exhibit A to this Schedule 1 may be modified by Seller from time to
time to reflect the actual products in use at Tully's Stores in the U.S. and to reflect current lead times for orders with respect to the same. 

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SUPPLY AGREEMENT (Tully's Coffee Corporation)

SCHEDULE 1 TO SUPPLY AGREEMENTPrepared by MERRILL CORPORATION

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FIRST AMENDMENT TO SUPPLY AGREEMENT    
  

[*—Material
has been omitted pursuant to a request for confidential treatment in accordance with Rule 24b-2 under the Securities Exchange Act of 1934, as
amended. The redacted material has been filed separately with the Securities and Exchange Commission.] 

        This
First Amendment to Supply Agreement (the "First Amendment") is made this 1st day of October, 2001 by and between TULLY'S COFFEE CORPORATION, a Washington corporation, doing business
at 3100 Airport Way South, Seattle, Washington 98134, U.S.A. ("Seller"), and TULLY'S COFFEE JAPAN, LTD., a company organized under the laws of Japan, doing business at
3-4-1 Takanawa, Minato-ku, Tokyo, Japan ("Buyer"). 

RECITALS  

        A.    On April 26, 2001, Seller and Buyer entered into that certain Tully's Coffee Supply Agreement (the "Supply Agreement") that sets forth the
terms and conditions with respect to the purchase by Buyer and the sale by Seller of certain products to be used in connection with the operation of Tully's Stores in Japan (referred to herein as the
"Territory"). 

        B.    The
parties desire to amend the Supply Agreement to grant Buyer an option to acquire roasted coffee beans and ground coffee from an alternative source. 

        NOW,
THEREFORE, the parties hereto agree as follows: 

AGREEMENT  

        1.    The
Supply Agreement is hereby amended as follows: 

        1.1      Immediately
following Section 2.3 of the Supply Agreement, new Sections 2.4, 2.5, 2.6, 3 and 4 shall be inserted as follows: 

        2.4      Use of Alternative Source.    Notwithstanding anything to the contrary
herein above, during the term of this Agreement, Buyer shall have the option to purchase roasted coffee beans and ground coffee on an exclusive basis from a third party vendor (the "Primary Vendor"),
provided, however, that Buyer may retain one secondary vendor (the "Secondary Vendor") to roast no more than 20% of Buyer's roasted coffee beans and ground coffee requirements, if such Secondary
Vendor meets all of Seller's requirements set forth below. No vendor, whether it is the Primary Vendor or Secondary Vendor may be selected to roast coffee beans unless such proposed vendor meets
Seller's quality, service and cost standards for roasting and green beans, and such other standards as reasonably established by Seller from time to time (the "Roasting Standards"). Seller shall have
the right to reject any vendor selected by Buyer to roast coffee beans if Seller reasonably determines that such vendor does not have the financial capacity, proper facilities, expertise or experience
to perform all of the functions required to deliver roasted coffee beans and ground coffee to the Roasting Standards; provided that Seller shall provide Buyer with a written explanation and supporting
documentation setting forth the grounds for rejection in reasonable detail. Buyer may not terminate or replace a vendor unless Buyer has selected a replacement vendor and such replacement vendor has
not been rejected by Seller. Notwithstanding the foregoing, Seller and Buyer agree that Ueshima Coffee Company Ltd. ("UCC") shall be given the first right and opportunity to provide a proposal
for an agreement to roast coffee for Buyer in the Territory, provided that UCC demonstrates its ability to meet the criteria set forth above. The term of the roasting agreement with UCC shall be one
year. Buyer shall have the right to propose an alternative vendor to perform such roasting and if such alternative vendor submits a lower cost and meets the Roasting Standards and all other
requirements of this section 2.4 and the existing Primary Vendor is unable to meet such lower cost, then such vendor shall replace the Primary Vendor under this Agreement. Any contract with a
roasting source shall contain appropriate renewal options conditioned on (i) the continued performance to the roasting standards and compliance with other provisions of a roasting agreement
that is approved by both the Buyer and the Seller, and (ii) the agreement of Seller and Buyer to renew. Without limiting the foregoing any 

such contract shall contain confidentiality and non-disclosure provisions reasonably acceptable to Seller. Subject to delivery of a non-disclosure agreement reasonably
acceptable to Seller, Seller shall disclose to Buyer and any proposed vendor all recipes and blend standards required to allow a proposed vendor or roaster to make a roasting proposal to Buyer or
allow Buyer to investigate the feasibility of roasting coffee beans and ground coffee by itself or through its wholly-owned subsidiary. 

        2.5      Buyer's Roasting Right.    Nothing in this Agreement prohibits Buyer from
roasting or causing its wholly owned subsidiary to roast coffee beans and ground coffee for its own use and sale to third parties pursuant to this Agreement so long as Buyer satisfies the Roasting
Standards and all other requirements of Section 2.4. If Buyer, or its wholly owned subsidiary, at any time, becomes a roaster of coffee for its own use and sale, then Seller shall have the
right to propose alternative vendors to perform such roasting and if (i) such alternative Vendor submits a lower cost and meets the Roasting Standards, and all other requirements of
Section 2.4, and (ii) Buyer is unable to meet such lower cost, then such vendor shall replace Buyer as the vendor under this Agreement. 

        2.6      Payments to Seller.    The parties agree that the payments to be made by
Buyer to Seller under this Section 2.6 shall constitute compensation to Seller for Seller's agreement to surrender its right to be the exclusive supplier to Buyer of roasted coffee beans and
ground coffee for sale in the operation of Tully's Stores in the Territory. 

        a.    Cash Payment.    Buyer shall pay $4.2 million (US) in cash to Seller on October 1, 2001. 

        b.    Stock Payment.    Within seven (7) days of the execution date of this First Amendment, Buyer shall hold a
meeting of its Board of Directors and pass a resolution to issue 300 shares of common stock of Buyer (the "Stock") to Seller, on a day within sixty (60) days of the execution date of this First
Amendment (the "Issue Date") at an aggregate price equal to the per-share market price as of the close of the stock market on the last business day or such other per-share
price determined by the Board, multiplied by 300 (the "Issue Price"). Subject to Seller's submission to Buyer of a duly executed application for subscription of the Stock, no later than five
(5) days prior to the Issue Date, Buyer shall remit an amount equal to the Issue Price to Seller's bank account in Japan (the "Account"). Within fourteen (14) days of the execution of
this First Amendment, Seller shall provide Buyer with the information necessary to effect such remittance, and advise in writing of the name of its transfer agent (meigikakikae dairinin) in Japan. On
the day immediately preceding the Issue Date, Seller shall remit the entire amount it receives from Buyer pursuant to this Section 2.6.b to a bank account designated by Buyer. Buyer shall
deliver to Seller share certificates representing the stock as soon as practicably possible after the Issue Date. In the event that the Stock is not issued to Seller on the Issue Date due to Buyer's
breach of this Section 2.6.b, Seller shall be entitled, at its option, to either (i) retain the entire amount in the Account, or (ii) require Seller to deliver the Stock. 

        c.    Payment—Coffee Sales.    In the event Buyer acquires roasted coffee beans or ground coffee from a
source other than directly from Seller, Seller shall receive a monthly payment equal to the sum of (1) and (2) below: 

        (1)  For
coffee purchased for retail stores operated pursuant to the Retail Rights (including all Buyer owned retail stores as well as all franchised or licensed retail
stores), an amount equal to the greater of (x) 65% of the difference between [ * ] per pound and the Average Net Purchase Cost per pound from the roaster,
and (y) [ * ] per pound, multiplied by the total number of pounds purchased for the month. For example, if the Average Net Purchase Cost per pound from the
roaster to Buyer is [ * ] per pound, Buyer would pay Seller [ * ] per pound ([ * ] -
[ * ] = [ * ] × 0.65 = [ * ]), multiplied by the total
number of pounds purchased for the month. 

        (2)  For
coffee purchased for wholesale customers pursuant to the Wholesale Rights, an amount equal to the greater of (x) 65% of the difference between
[ * ] per pound and the Average Net Purchase Cost per pound from the roaster, and (y) [ * ] per pound, multiplied by
the total number of pounds purchased for the month. For example, if the Average Net Purchase Cost per pound from the roaster to Buyer is [ * ]
per pound, Buyer would pay Seller [ * ] per pound ([ * ] - [ * ] =
[ * ] × 0.65 = [ * ]), multiplied by the total number of pounds purchased for the month. 

As
used herein, the phrase "Average Net Purchase Cost per pound" shall mean the total purchase cost of all pounds of coffee for a given month, net of all rebates and discounts, divided by the total
pounds of coffee purchased for such month. 

        (3)  The
payment under this Section 2.6.c shall be subject to an annual minimum equal to 110% of the Base Year Amount compounded annually for the years 2 and 3 of this
Agreement and compounded at 105% for the years 4, through 10 of this Agreement. The annual minimum for each subsequent year shall be equal to the annual minimum for the immediately preceding year
adjusted upward or downward by the ratio of change of the CPI-Japan for the Beverage Subgroup for Ku-area of Tokyo (the "CPI") between January of the immediately preceding year
and January of such year.    For purposes of this computation, the Base Year Amount shall be equal to the payment paid pursuant to this Section 2.6.b for the initial
12-month period of this Agreement (the "Base Year"). If the aggregate amount of payment paid for any given year is less than the annual minimum for such year, Buyer shall pay Seller the
balance within 30 days after the end of such year. For purposes of this clause (3), the first 12-month period of this Agreement means the 12-month period
commencing on the date of the First Amendment of this Agreement (October 1, 2001). Likewise, references to "years of this Agreement" refer to each subsequent 12-month period. 

        (4)  The
computation of Payment shall be completed monthly. If the average cost is above [ * ] or below
[ * ] the payment amount shall be changed every six months to reflect "inflation or deflation" based upon the increase or decrease in the retail price of coffee
sold in TCJ's retail stores as follows: 

The
average retail price of all coffee items (i.e., Americano, Espresso, Drip Coffee, Whole Beans) for all sizes at the measurement date (the date the price increase is being computed) shall be
compared to the average price from the previous measurement date and the percentage increase or decrease shall be added to one and multiplied by the payment per pound used during the previous six
months and the resulting new payment per pound shall be used until the next measurement date. The initial measurement date shall be the date of the first shipment of coffee roasted from an
"Alternative Source" as defined herein. For example: 

	 
	 	Beginning Cost
	 	New Cost

	12 OZ. Drip	 	[ * ]	 	[ * ]
	16 OZ Drip	 	[ * ]	 	[ * ]
	12 OZ. Americano	 	[ * ]	 	[ * ]
	12 OZ Espresso	 	[ * ]	 	[ * ]
	1 LB. Whole bean French Roast	 	[ * ]	 	[ * ]
	 	 	
	 	

	 	Total	 	[ * ]	 	[ * ]
	 	 	
	 	

The
total of the beginning cost for each six month period is subtracted from the new cost ([ * ] - [ * ] =
[ * ]). This total is divided by the beginning Cost total [ * ] / [ * ] =
[ * ] or [ * ] and the resulting percentage is added to one [ * ] and this amount is
multiplied by the then payment per pound being paid ([ * ] × [ * ] =
[ * ]) and the resulting payment per pound becomes the payment used for the next six months. The same 

procedure would apply if the prices decline, provided, however, that the payment shall not go below the minimum of [ * ] for retail stores and
[ * ] for wholesale. For example, if the beginning cost per pound was [ * ] and the new cost per pound was
[ * ], the difference of [ * ] would be divided by [ * ] and the percentage decrease
of [ * ] would reduce the payment per pound. For this example, if the beginning payment amount per pound was at [ * ], the
adjusted payment per pound would be reduced by [ * ] per pound to [ * ] per pound. 

If
the Average Purchase Price per pound is between [ * ] and [ * ] this adjustment factor will not be applied to the payment
and it will be adjusted based on the actual roasted cost during the prior month as described in (1) and (2) above. The computation under this Section 2.6.c.4. shall be computed in
Japanese yen by using the Japanese Yen—U.S. Dollar T.T.B. exchange rate offered by Mita branch of the Sanwa Bank as of each measurement date. 

        d.    Payment and Reports.    Buyer agrees to report and pay the payments set forth in this Section 2 as
follows: 

        (1)      Reporting.    Within thirty (30) days after the end of each calendar month, Buyer will
send Seller a written report on (i) coffee purchased under Section 2.6.c., and (ii) a computation of the payments due. 

        ((2)    Payments.    Buyer agrees to pay the payments due by the time the report is due, i.e., within
thirty (30) days after the end of each calendar month. 

        (3)      Form of Payment.    Unless otherwise specified, all payments to be made under this
Section 2 will be in United States Dollars and will be made by check or by wire transfer to a bank account specified by Seller in writing. 

        (4)      Late Payments.    Late payments will accrue interest from the date due until paid in full at the
lower of (x) a floating yearly rate equal to three percent (3%) plus the prime rate for short-term unsecured commercial loans announced from time to time by Bank of America,
Seattle, Washington, USA and (y) the highest rate permitted by law. 

        (5)      Performance Under Reservation of Rights.    For the avoidance of doubt, in the event of a dispute
between the parties regarding any payment or performance due or claimed to be due under this Agreement or the Supply Agreement by Buyer, Buyer shall have the right to pay such amount or render such
performance under a reservation of rights (by using the words "reservation of rights", "without prejudice", or "under protest") (i.e., any such payment
or performance shall not be rejected by Seller on the basis that the reservation of rights renders it a conditional payment or performance, and any such payment or performance shall not prejudice the
rights reserved). 

        (6)      Indemnification.    Seller agrees to indemnify Buyer for any withholding taxes, including any
interest and penalties (if any) validly assessed against Buyer by a Japanese taxing authority relating to payments to Seller under this Agreement. 

        3.    Record Keeping.    Buyer agrees to make copies of all reports to Seller and copies of original agreements, bills
and invoices containing the information needed to prepare them and to keep them for a period of at least three (3) years. 

        4.    Audits; Quality Control Inspections.    Seller shall have the right, on a quarterly basis during the calendar
year during the term of this License Agreement and on an annual basis for three (3) years thereafter, to have independent certified public accountants reasonably acceptable to Buyer audit all
records that this Agreement requires Buyer to make and keep. All audits will be begun upon at least forty-eight (48) hours' prior notice. Seller and Buyer shall each pay one half of the
auditors' fee for the first two (2) quarterly audits per calendar year. Seller shall be solely responsible for the auditor's fees
for remaining two (2) quarterly audits. In the event that any audit shows a shortfall of more than five percent (5%) in any payment as reported or paid to 

Seller for the period under audit, Buyer will pay the entire auditor's fee for the examination that discloses such shortfall. All audits will be in confidence, and the auditors will disclose to
Seller only the information necessary to verify payments due, and not Buyer's customer lists. In addition to any other inspection rights granted to Seller, Seller shall have the right, on a quarterly
basis, to send a Seller employee to the Territory to assure quality control with respect to (i) Buyer's use of the Rights, and (ii) any Seller approved source of roasted coffee beans or
ground coffee from sources other than Seller. Buyer shall pay the reasonable travel, lodging and living expenses of Seller's employee related to one of these inspections annually. 

        2.    Except
as specifically set forth in this First Amendment, the remaining terms and conditions of the Supply Agreement shall remain unchanged and shall remain in full force
and effect. In the event of a conflict between the provisions of this First Amendment and the Supply Agreement, the provisions of this First Amendment shall prevail. 

        3.    Following
the execution of this First Amendment, the parties agree to continue to discuss, in good faith, the possibility of further changes to the Supply Agreement with
respect to allowing Buyer to purchase certain Tully's Products other than roasted coffee beans and ground coffee from sources other than Seller. 

        4.    This
First Amendment may be executed in counterparts, each of which shall constitute an original, but all of which together shall constitute one and the same document
notwithstanding that both parties are no signatories to each counterpart. However, this First Amendment shall not be enforceable against a party until a counterpart has been executed by both parties. 

        IN
WITNESS WHEREOF, the parties hereto have executed this First Amendment as of the day and year first above written. 

Executed
as of the date set forth above. 

	SELLER:	 	 
	 	 	 	 	 
	TULLY'S COFFEE CORPORATION	 	 
	 	 	 	 	 
	 	 	 	 	 
	By:	 	 	 	 
	 	 	
 Marc Evanger, its President and CEO	 	 
	 	 	 	 	 
	 	 	 	 	 
	BUYER:	 	 
	 	 	 	 	 
	TULLY'S COFFEE JAPAN, LTD.	 	 
	 	 	 	 	 
	By:	 	 	 	 
	 	 	
 Kouta Matsuda, its President	 	 

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FIRST AMENDMENT TO SUPPLY AGREEMENT

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