Document:

Guaranty Agreement between Tom T. O'Keefe and Benaroya Capital Company, L.L.C.

 Exhibit 10.21(a) 
 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 extent permitted by law following a non-judicial foreclosure of any Security Agreement, any other
claim or defense which may arise under applicable law. If any collateral securing the Guaranteed Obligations is foreclosed or realized upon whether judicially or non-judicially before Lender proceeds against Guarantor under this Guaranty, then
Guarantor’s liability for the Guaranteed Obligations shall be the deficiency resulting from the judicial or non-judicial sale or other disposition; i.e., the difference between the amount of the Guaranteed Obligations on the day of the
foreclosure sale or other disposition (including principal, accrued interest, attorneys’ fees including on appeal or otherwise), late charges and costs and expenses of foreclosure or other disposition) and the amount realized at the foreclosure
sale or other disposition. To the fullest extent permitted by law, Guarantor waives the right to object to the amount that may be bid by Lender at any foreclosure sale. If not paid in full within thirty (30) days following Lender’s demand,
Guarantor’s liability for any deficiency following a non-judicial foreclosure of any Security Agreement securing any of the Guaranteed Obligations shall bear interest from the date of the foreclosure sale, compounded monthly, at the default
interest rate in the Note 
 (e) Guarantor acknowledges that Lender has no obligation to Guarantor to make and additional loans or advances
to Borrower or to see to the proper use and application of the funds so advanced. Guarantor understands that the Guaranteed Obligations and this Guaranty can involve substantial risks for Guarantor and agrees that Lender is not a trustee or
fiduciary for Guarantor and undertakes no duty, obligation, responsibility or special relationship to Guarantor or to see to proper use and application of any loan or advance or otherwise to protect and not act adversely to Guarantor’s
interests. Any application or use of Loan proceeds or advances for purposes other than those provided for in the Loan Documents shall not defeat, limit or impair this Guaranty in whole or in part. 
 (f) Guarantor represents, warrants and covenants with Lender that Guarantor has not presently guaranteed any other indebtedness of Borrower and shall not
guarantee any 

  

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other indebtedness of Borrower unless such other lender shall enter into a written agreement with Lender that this Guaranty shall be superior to
Guarantor’s guarantee of the other lender's indebtedness, the form and substance of such written agreement to be subject to Lender’s prior approval. 
 4. Subordination. If for any reason whatsoever. Borrower is now or hereafter becomes indebted to Guarantor: 
 (a) such indebtedness and all interest thereon and all liens, security interests and rights now or hereafter existing with respect to property of Borrower
securing such indebtedness shall, at all times, be subordinate in all respects to the Guaranteed Obligations and to all liens, security interests and rights now or hereafter existing to secure the Guaranteed Obligations; 
 (b) Guarantor shall not be entitled to enforce or receive payment, directly or indirectly, of any such indebtedness of Borrower to Guarantor until the
Guaranteed Obligations have been fully and finally paid; provided, however, that notwithstanding the foregoing, Guarantor is not prohibited from receiving (i) such reasonable management fees or reasonable salary from Borrower as Lender may find
acceptable from time to time, and (ii) distributions from Borrower in an amount equal to any income taxes imposed on Guarantor which are attributable to Borrower’s income from any property encumbered by a Security Agreement; 
 (c) Guarantor hereby assigns and grants to Lender a security interest in all such indebtedness and security therefor, if any, of Borrower to Guarantor
now existing or hereafter arising, including any dividends and payments pursuant to debtor relief or insolvency proceedings referred to below. In the event of receivership, bankruptcy, reorganization, arrangement or other debtor relief or insolvency
proceedings involving Borrower as debtor, Lender shall have the right to prove its claim in any such proceeding so as to establish its rights hereundcr and shall have the right to receive directly from the receiver, trustee or other custodian
(whether or not an Event of Default shall have occurred or be continuing under any of the Loan Documents), dividends and payments that are payable upon any obligation of Borrower to Guarantor now existing or hereafter arising, and to have all
benefits of any security therefor, until the Guaranteed Obligations have been fully and finally paid. If, notwithstanding the foregoing provisions, Guarantor should receive any payment, claim or distribution that is prohibited as provided above in
this Section 4, Guarantor shall pay the same to Lender immediately, Guarantor hereby agreeing that it shall receive the payment, claim or distribution in trust for Lender and shall have absolutely no dominion over the same except to pay it
immediately to Lender; and 
 (d) Guarantor shall promptly upon request of Lender from time to time execute such documents and perform such
acts as Lender may require to evidence and perfect its interest and to permit or facilitate exercise of its rights under this Section 4, including execution and delivery of financing statements, proofs of claim, further assignments and security
agreements, and delivery to Lender of any promissory notes or other instruments evidencing 

  

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indebtedness of Borrower to Guarantor. All promissory notes, accounts receivable ledgers or other evidences; now or hereafter held by Guarantor, of
obligations of Borrower to Guarantor shall contain a specific written notice thereon that the indebtedness evidenced thereby is subordinated under and is subject to the terms of this Guaranty. 
 5. Other Liability of Guarantor or Borrower. If Guarantor is or becomes liable, by endorsement or otherwise, for any indebtedness
owing by Borrower to Lender other than under this Guaranty, such liability shall not be in any manner impaired or affected hereby, and the rights of Lender hereunder shall be cumulative of any and all other rights that Lender may have against
Guarantor. If Borrower is or becomes indebted to Lender for any indebtedness other than or in excess of the Indebtedness for which Guarantor is liable under this Guaranty, any payment received or recovery realized upon such other indebtedness of
Borrower to Lender may, except to the extent paid by Guarantor on the Indebtedness or specifically required by law or agreement of Lender to be applied to the Indebtedness, in Lender’s sole discretion, be applied upon indebtedness of Borrower
to Lender other than the Indebtedness. This Guaranty is independent of (and shall not be limited by) any other guaranty now existing or hereafter given. Further, Guarantor’s liability under this Guaranty is in addition to any and all other
liability Guarantor may have in any other capacity. 
 6. Lender
Assigns. This Guaranty is for the benefit of Lender and Lender’s universal successors, participants and assigns. Lender may, at any time, sell, transfer, or assign the Guaranteed Obligations and the Loan Documents, and any or all
servicing rights with respect thereto, or grant participations herein or issue mortgage pass-through certificates or other securities evidencing a beneficial interest in a rated or unrated public offering or private placement. In the event of any
such sale; transfer or assignment of the Guaranteed Obligations, or any part thereof, the rights and benefits under this Guaranty, to the extent
applicable to the Guaranteed Obligations so sold, transferred or assigned, may be transferred with such Guaranteed Obligations. Guarantor waives notice of any sale, transfer or assignment of the Guaranteed Obligations or any part thereof, and agrees
that failure to give notice of any such sale, transfer or assignment will not affect the liabilities of Guarantor hereunder. Lender is hereby authorized to disseminate any information it now has or hereafter obtains pertaining to the Guaranteed
Obligations or this Guaranty, including credit or other information on Borrower, Guarantor and/or any party liable, directly or indirectly, for any part of the Guaranteed Obligations, to any actual or prospective assignee or participant with respect
to the Guaranteed Obligations, to any of Lender’s affiliates, to any regulatory body having jurisdiction over Lender, and to other parties as necessary or appropriate in Lender’s reasonable judgment. 
 7. Binding Effect. This Guaranty is binding not only on Guarantor, but also on Guarantor’s heirs, personal representatives, successors and
assigns; provided, however, that Guarantor may not assign this Guaranty, or assign or delegate any of its right or obligations under this Guaranty, without the prior written consent of Lender in each instance. Upon the death of Guarantor, if
Guarantor is a natural person or entity, this Guaranty shall continue against Guarantor’s estate as to all of the Guaranteed Obligations, including that portion incurred or 

  

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arising after the death of Guarantor and shall be provable in full against Guarantor’s estate, whether or not the Guaranteed Obligations are then due
and payable. 
 8. Governing Law; Forum; Consent to Jurisdiction. The validity, enforcement, and
interpretation of this Guaranty, shall for all purposes be governed by and construed in accordance with the laws of the State of Washington and applicable United States federal law, and is intended to be performed in accordance with, and only to the
extent permitted by, such laws. All obligations of Guarantor hereunder are payable and performable at the place or places where the Guaranteed Obligations are payable and performable. Guarantor hereby irrevocably submits generally and
unconditionally for Guarantor and in respect of Guarantor’s property to the nonexclusive jurisdiction of any state court, or any United States federal court, sitting or having jurisdiction in the state specified in the first sentence of this
Section and to the jurisdiction of any state or United States federal court sitting or having jurisdiction in the state of Washington, over any suit, action or proceeding arising out of or relating to this Guaranty or the Guaranteed Obligations.
Guarantor hereby irrevocably waives, to the fullest extent permitted by law, any objection that Guarantor may now or hereafter have to the laying of venue in any such court and any claim that any such court is an inconvenient forum. Final judgment
in any such suit, action or proceeding brought in any such court shall be conclusive and binding upon Guarantor and may be enforced in any court in which Guarantor is subject to jurisdiction. Guarantor hereby agrees and consents that, in addition to
any methods of service of process provided for under applicable law, all service of process in any such suit, action or proceeding in any state court, or any United States federal court, sitting or having jurisdiction in the state specified in the
first sentence of this Section may be made by certified or registered mail, return receipt requested, directed to Guarantor at the address set forth at the end of this Guaranty, or at a subsequent address of which Lender receives actual notice from
Guarantor in accordance with the notice provisions hereof, and service so made shall be complete five (5) days after the same shall have been so mailed. Nothing herein shall affect the right of Lender to serve process in any manner permitted by
law or limit the right of Lender to bring proceedings against Guarantor in any other court or jurisdiction. Guarantor hereby releases, to the extent permitted by applicable law, all errors and all rights of exemption, appeal, stay of execution,
inquisition, and other rights to which the Guarantor may otherwise be entitled under the laws of the United States of America or any State or possession of the United States of America now in force or which may hereinafter be enacted. The authority
and power to appear for and enter judgment against the Guarantor shall not be exhausted by one or more exercises thereof or by any imperfect exercise thereof and shall not be extinguished by any judgment entered pursuant thereto. Such authority may
be exercised on one or more occasions or from time to time in the same or different jurisdiction as often as the Lender shall deem necessary and desirable. 
 9. Invalidity of Certain Provisions. If any provision of this Guaranty or the application thereof to any person or entity or circumstance shall, for any reason and to any extent, be declared to be
invalid or unenforceable, neither the remaining provisions of this Guaranty nor the application of such provision to any other person or entity or circumstance shall be affected thereby, and the remaining provisions of this Guaranty, or the
applicability of such 

  

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provision to other persons or entities, or circumstances, as applicable, shall remain in effect and be enforceable to the maximum extent permitted by
applicable law. 
 10. Attorneys’ Fees and Costs of Collection. Guarantor shall pay on demand all attorneys’
fees and all other costs and expenses incurred by Lender in the enforcement of or preservation of Lender’s rights under this Guaranty including all attorneys’ fees and expenses, investigation costs, and all court costs, whether or not suit
is filed hereon, or whether at maturity or by acceleration, or whether before or after maturity, or whether in connection with bankruptcy, insolvency or appeal, or whether in connection with the collection and enforcement of this Guaranty against
any other Guarantor, if there be more than one. Guarantor agrees to pay interest on any expenses or other sums due to Lender under this Section 10 that are not paid when due, at a rate per annum equal to the default interest rate provided for
in the Note. Guarantor’s obligations and liabilities under this Section 10 shall survive any payment or discharge in full of the Guaranteed Obligations. 
 11. Payments. All sums payable under this Guaranty shall be paid in lawful money of the United States of America that at the time of payment is legal tender for the payment of public and private debts.

 12. Controlling Agreement. It is not the intention of Lender or Guarantor to obligate Guarantor to pay interest in excess of
that lawfully permitted to be paid by Guarantor under applicable law. Should it be determined that any portion of the Guaranteed Obligations or any other amount payable by Guarantor under this Guaranty constitutes interest in excess of the maximum
amount of interest that Guarantor, in Guarantor’s capacity as guarantor, may lawfully be required to pay under applicable law, the obligation of Guarantor to pay such interest shall automatically be limited to the payment thereof in the maximum
amount so permitted under applicable law. The provisions of this Section 12 shall override and control all other provisions of this Guaranty and of any other agreement between Guarantor and Lender. 
 13. Representations, Warranties, and Covenants of Guarantor. Guarantor hereby represents, warrants, and covenants that: 
 (a) Guarantor has a financial interest in the Borrower and will derive a material and substantial benefit, directly or indirectly, from the making of the
Loan to Borrower and from the making of this Guaranty by Guarantor; 
 (b) this Guaranty is duly authorized and valid, and is binding upon
and enforceable against Guarantor; 
 (c) Guarantor is not, and the execution, delivery and performance by Guarantor of this Guaranty will
not cause Guarantor to be, in violation of or in default with respect to any law or in default (or at risk of acceleration of indebtedness) under any agreement or restriction by which Guarantor is bound or affected; 
  

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 (d) Guarantor will indemnify Lender from any loss, cost or expense as a result of any representation or
warranty of the Guarantor being false, incorrect, incomplete or misleading in any material respect; 
 (e) there is no litigation pending or,
to the knowledge of Guarantor, threatened before or by any tribunal against or affecting Guarantor which would have a material adverse Impact on Guarantor's ability to pay and perform its obligations under this Guaranty; 
 (f) all financial statements and information heretofore furnished to Lender by Guarantor do, and all financial statements and information hereafter
furnished to Lender by Guarantor will, fully and accurately present the condition (financial or otherwise) of Guarantor as of their dates and the results of Guarantor’s operations for the periods therein specified, and, since the date of the
most recent financial statements of Guarantor heretofore furnished to Lender, no material adverse change has occurred in the financial condition of Guarantor, nor, except as heretofore disclosed in writing to Lender, has Guarantor incurred any
material liability, direct or indirect, fixed or contingent; 
 (g) after giving effect to this Guaranty, Guarantor is solvent, is not
engaged or about to engage in business or a transaction for which the property of Guarantor is an unreasonably small capital, and does not intend to incur or believe that it will incur debts that will be beyond its ability to pay as such debts
mature; 
 (h) Lender has no duty at any time to investigate or inform Guarantor of the financial or business condition or affairs of
Borrower or any change therein, and Guarantor will keep fully apprised of Borrower’s financial and business condition; 
 (i) Guarantor
acknowledges and agrees that Guarantor may be required to pay and perform the Guaranteed Obligations in full without assistance or support from Borrower or any other person or entity; and 
 (j) Guarantor has read and fully understands the provisions contained in the Note and the other Loan Documents and is satisfied with the same in all
respects. 
 Guarantor’s representations, warranties and covenants are a material inducement to Lender to enter into the other Loan
Documents and shall survive the execution hereof and any bankruptcy, foreclosure, transfer of security or other event affecting Borrower, Guarantor, any other party, or any security for all or any part of the Guaranteed Obligations. 
 14. Notices. All notices, requests, consents, demands and other communications required or which any party desires to give hereunder or
under any other Loan Document shall be in writing and, unless otherwise specifically provided in such other Loan Document, shall be deemed sufficiently given or furnished if delivered by personal delivery, by courier, or by registered or certified
United States mail, return receipt requested, postage prepaid, addressed to the party to whom directed at the addresses specified in this Guaranty (unless changed by similar notice in writing given by the particular party whose address is to be
changed). Any such notice 

  

 11 

 
or communication shall be deemed to have been given either at the time of personal delivery or, in the case of courier or mail, as of the date of first
attempted delivery at the address and in the manner provided herein; provided that, service of a notice required by any applicable statute shall be considered complete when the requirements of that statute are met. Notwithstanding the foregoing, no
notice of change of address shall be effective except upon actual receipt. This Section shall not be construed in any way to affect or impair any waiver of notice or demand provided in this Guaranty or in any Loan Document or to require giving of
notice or demand to or upon any person or entity in any situation or for any reason. 
 15. Cumulative Rights. The exercise by
Lender of any right or remedy hereunder or under any other Loan Document, or at law or in equity, shall not preclude the concurrent or subsequent exercise of any other right or remedy. Lender shall have all rights, remedies and recourses afforded to
Lender by reason of this Guaranty or any other Loan Document or by law or equity or otherwise, and the same (a) shall be cumulative and concurrent, (b) may be pursued separately, successively or concurrently against Guarantor or others
obligated for the Guaranteed Obligations, or any part thereof, or against any one or more of them, or against any security or otherwise, at the sole and absolute discretion of Lender, (c) may be exercised as often as occasion therefor shall
arise, it being agreed by Guarantor that the exercise of, discontinuance of the exercise of or failure to exercise any of such tights, remedies, or recourses shall in no event be construed as a waiver or release thereof or of any other right,
remedy, or recourse, and (d) are intended to be, and shall be, nonexclusive. No waiver of any default on the part of Guarantor or of any breach of any of the provisions of this Guaranty or of any other document shall be considered a waiver of
any other or subsequent default or breach, and no delay or omission in exercising or enforcing the rights and powers granted herein or in any other document shall be construed as a waiver of such rights and powers, and no exercise or enforcement of
any rights or powers hereunder or under any other document shall be held to exhaust such rights and powers, and every such right and power may be exercised from time to time. The granting of any consent, approval or waiver by Lender shall be limited
to the specific instance and purpose therefor and shall not constitute consent or approval in any other instance or for any other purpose. No notice to or demand on Guarantor in any case shall of itself entitle Guarantor to any other or further
notice or demand in similar or other circumstances. No provision of this Guaranty or any right, remedy or recourse of Lender with respect hereto, or any default or breach, can be waived, nor can this Guaranty or Guarantor be released or discharged
in any way or to any extent, except specifically in each case by a writing intended for that purpose (and which refers specifically to this Guaranty) executed, and delivered to Guarantor, by Lender. 
 16. Term of Guaranty. This Guaranty shall continue in effect until all the Guaranteed Obligations are fully and finally paid, performed and
discharged, except that, and notwithstanding any return of this Guaranty to Guarantor, this Guaranty shall continue in effect (a) with respect to any of the Guaranteed Obligations that survive the full and final payment of the indebtedness
evidenced by the Note, (b) with respect to all obligations and liabilities of Guarantor under Section 10 and (c) as provided in Section 3(b). 
  

 12 

 17. Subrogation. Notwithstanding anything to the contrary contained herein, Guarantor shall
not have any right of subrogation in or under any of the Loan Documents or to participate in any way therein, or in any right, title or interest in and to any security or right of recourse for the Indebtedness or any right to reimbursement,
exoneration, contribution, indemnification or any similar rights, until the Indebtedness has been fully and finally paid. This waiver is given to induce Lender to make the Loan to Borrower. 
 18. Further Assurances. Guarantor at Guarantor’s expense will promptly execute and deliver to Lender upon Lender’s request all
such other and further documents, agreements, and instruments in compliance with or accomplishment of the agreements of Guarantor under this Guaranty. 
 19. No Fiduciary Relationship. The relationship between Lender and Guarantor is solely that of lender and guarantor. Lender has no fiduciary or other special relationship with or duty to Guarantor and
none is created hereby or may be inferred from any course of dealing or act or omission of Lender. 
 20. Interpretation.
Lender may pursue Guarantor hereunder without being required (a) to pursue Borrower or any other person or entity, or (b) pursue rights and remedies under any Security Agreement and/or applicable law with respect to any property encumbered
by a Security Agreement, or any other Loan Documents. Each married individual who executes this Guaranty represents to Lender that (a) the Guaranteed Obligations are of substantial and material benefit to his or her marital community,
(b) this Guaranty is a community purpose guaranty, and (c) he or she intends to bind both his or her separate estate and his or her marital community for payment of the Guaranteed Obligations. The term “Lender” shall be deemed to
include any subsequent holder(s) of the Note. Whenever the context of any provisions hereof shall require it, words in the singular shall include the plural, words in the plural shall include the singular, and pronouns of any gender shall include
the other gender. Captions and headings in the Loan Documents are for convenience only and shall not affect the construction of the Loan Documents. All references in this Guaranty to Schedules, Articles, Sections, Subsections, paragraphs and
subparagraphs refer to the respective subdivisions of this Guaranty, unless such reference specifically identifies another document. The terms “herein”, “hereof”, “hereto”, “hereunder” and similar terms refer
to this Guaranty and not to any particular Section or subsection of this Guaranty, The terms “include” and “including” shall be interpreted as if followed by the words “without limitation”. All references in this
Guaranty to sums denominated in dollars or with the symbol “$” refer to the lawful currency of the United States of America, unless such reference specifically identifies another currency. 
 21. Time of Essence. Time shall be of the essence in this Guaranty with respect to all of Guarantor’s obligations hereunder.

 22. Counterparts. This Guaranty may be executed in multiple counterparts, each of which, for all purposes, shall be deemed
an original, and all of which taken together shall constitute but one and the same agreement. 
  

 13 

 23. Entire Agreement. This Guaranty embodies the entire agreement between Lender and
Guarantor with respect to the guaranty by Guarantor of the Guaranteed Obligations. This Guaranty supersedes all prior agreements and understandings, if any, with respect to the guaranty by Guarantor of the Guaranteed Obligations. No condition or
conditions precedent to the effectiveness of this Guaranty exist. This Guaranty shall be effective upon execution by Guarantor and delivery to Lender. This Guaranty may not be modified, amended or superseded except in a writing signed by Lender and
Guarantor referencing this Guaranty by its date and specifically identifying the portions hereof that are to be modified, amended or superseded. 
 24. Waiver of Jury Trial. BORROWER AND LENDER WAIVE TRIAL BY JURY IN RESPECT OF ANY CONTROVERSIES OR CLAIMS BETWEEN GUARANTOR AND LENDER, WHETHER ARISING IN CONTRACT, OR TORT OR BY STATUTE, THAT ARISE OUT OF OR RELATE TO
(I) THIS GUARANTY (INCLUDING ANY RENEWALS, EXTENSIONS OR MODIFICATIONS), OR (II) ANY OF THE OTHER LOAN DOCUMENTS (COLLECTIVELY A “CLAIM”). THlS WAIVER IS KNOWINGLY, WILLINGLY AND VOLUNTARILY MADE IN GUARANTOR AND LENDER, AND GUARANTOR
AND LENDER HEREBY REPRESENT THAT NO REPRESENTATIONS OF FACT OR OPINION HAVE BEEN MADE BY ANY PERSON OR ENTITY TO INDUCE THIS WAIVER OF TRIAL BY JURY OR TO IN ANY WAY MODIFY OR NULLIFY ITS EFFECT. THIS PROVISION IS A MATERIAL INDUCEMENT FOR THE
PARTIES ENTERING INTO THIS GUARANTY AND THE LOAN DOCUMENTS. GUARANTOR AND LENDER ARE EACH HEREBY AUTHORIZED TO FILE A COPY OF THIS SECTION 26 IN ANY PROCEEDING AS CONCLUSIVE EVIDENCE OF THIS WAIVER OF JURY TRIAL. GUARANTOR FURTHER
REPRESENTS AND WARRANTS THAT IT HAS BEEN REPRESENTED IN THE SIGNING OF THIS GUARANTY AND IN THE MAKING OF THIS WAIVER BY INDEPENDENT LEGAL COUNSEL, OR HAS HAD THE OPPORTUNITY TO BE REPRESENTED BY INDEPENDENT LEGAL COUNSEL SELECTED OF GUARANTOR'S OWN
FREE WILL, AND THAT GUARANTOR HAS HAD THE OPPORTUNITY TO DISCUSS THIS WAIVER WITH COUNSEL. 
 THIS GUARANTY AND THE WRITTEN LOAN
DOCUMENTS REPRESENT THE FINAL AGREEMENT BETWEEN THE PARTIES AND MAY NOT BE CONTRADICTED BY EVIDENCE OF PRIOR, CONTEMPORANEOUS, OR SUBSEQUENT ORAL AGREEMENTS OF THE PARTIES. 
 ORAL AGREEMENTS OR ORAL COMMITMENTS TO LOAN MONEY, EXTEND CREDIT OR TO FORBEAR FROM ENFORCING REPAYMENT OF A DEBT ARE NOT ENFORCEABLE UNDER WASHINGTON
LAW. 
 THIS GUARANTY RESULTS IN YOUR WAIVER OF CERTAIN LEGAL RIGHTS AND DEFENSES, INCLUDING SUBROGATION RIGHTS AND ANY DEFENSE BASED
ON THE LENDER’S ELECTION OF REMEDIES. IT IS 

  

 14 

 
RECOMMENDED YOU CONSULT WITH YOUR OWN ATTORNEY BEFORE ENTERING INTO THIS AGREEMENT. 
 I CLEARLY UNDERSTAND THAT LENDER DOES NOT HAVE TO PURSUE THE BORROWER OR ANY OTHER OBLIGATED PARTY OR FORECLOSE OR REALIZE UPON ANY COLLATERAL BEFORE
DEMANDING AND ENFORCING PAYMENT FROM ME. I FURTHER UNDERSTAND THAT I WILL HAVE TO PAY THE AMOUNTS THEN DUE EVEN IF BORROWER OR ANY OTHER GUARANTOR OR OBLIGATED PARTY DOES NOT MAKE PAYMENT OR IS OTHERWISE RELIEVED OF THE OBLIGATION OF MAKING PAYMENT.

 [Signatures of Guarantors Appear on the Following Page] 
  

 15 

 IN WITNESS WHEREOF, Guarantor duly executed this Guaranty as of the date first written above. 

GUARANTOR: 
  

	
	

	Tom T. O’Keefe
	
	Address of Guarantor:
	
	 1100 Olive Way, Suite 340
 Seattle, WA
98101

	
	Lender’s address for notices:
	
	 1100 Olive Way, Suite 1700
 Seattle, WA 98101

Attention: Larry R. Benaroya

	
	With a copy to:
	
	David N. Lombard, Esq.
	Jameson, Babbitt, Stites & Lombard, P.L.L.C.
	999 Third Avenue, Suite 1900
	Seattle, WA 98104

  

 16Form of Security Agreement in favor of Benaroya Capital Company, L.L.C.

 Exhibit 10.22 
 SECURITY AGREEMENT 
 This Security Agreement is made as of the 26th day of April, 2007. 
  

					
	By:	  	TULLY’S COFFEE CORPORATION	  	
		  	3100 AIRPORT WAY SOUTH	  	
		  	SEATTLE, WA 98134	  	
		  	(the “Debtor”)	  	
	in favor of	  	BENAROYA CAPITAL COMPANY, L.L.C.	  	
		  	1100 OLIVE WAY, SUITE 1700	  	
		  	SEATTLE, WA 98101	  	
		  	(the “Secured Party”)	  	

 I. Security 
  

	1.1	For value received, the Debtor grants and creates the security constituted by this Security Agreement and agrees to the terms, covenants, agreements, conditions, provisos and other
matters set out in this Security Agreement. 

  

	1.2	As general and continuing security for the Obligations (defined in clause 2.1 hereof), the Debtor hereby grants to the Secured Party a security interest in all presently owned and
hereafter acquired personal property of the Debtor of whatsoever nature and kind and wheresoever situate and all proceeds thereof and therefrom, including Cash Proceeds and Proceeds, renewals thereof, Accessions thereto and substitutions therefor
(all of which are herein collectively called the “Collateral”), including, without limiting the generality of the foregoing, all the presently owned or held and hereafter acquired right, title and interest of the Debtor in and to
all Accounts, Goods (including all accessories, attachments, additions and Accessions thereto) Chattel Paper, Deposit accounts, Documents (whether negotiable or not), Instruments, Intangibles and General Intangibles, Investment Property, Money,
Securities and Software, and all: 

  

	 	(a)	Inventory of whatsoever nature and kind and wheresoever situate; 

  

	 	(b)	Equipment (other than Inventory) of whatsoever nature and kind and wheresoever situate, including, without limitation, all machinery, tools, apparatus, plant, furniture, fixtures
and vehicles of whatsoever nature and kind; 

  

	 	(c)	book accounts and book debts and all Accounts, debts, dues, claims, choses in action and demands of every nature and kind howsoever arising or secured, including letters of
guarantee and advices of credit which are now due, owing or accruing or growing due to or owned by or which may 

  

 1 

 hereafter become due, owing or accruing or growing due to or owned by the Debtor (all of which are
herein collectively called the “Debts”); 
  

	 	(d)	deeds, documents, writings, papers, books of account and other books relating to or being records of Debts, Chattel Paper or Documents or by which such are or may hereafter be
secured, evidenced, acknowledged or made payable; 

  

	 	(e)	contractual rights and insurance claims and all goodwill, patents, trademarks, copyrights and other intellectual or industrial property; 

  

	 	(f)	monies other than trust monies lawfully belonging to others; 

  

	 	(g)	right, title and interest of the Debtor in and to leasehold property; and 

  

	 	(h)	goodwill of the Debtor. 

  

	1.3	In this Security Agreement: 

  

	 	1.3.1	any reference to “Debtor” and the personal pronoun “it” or “its” and any verb relating thereto and used therewith shall be read
and construed as required by and in accordance with the context in which such words are used depending upon whether the Debtor is one or more corporations; 

  

	 	1.3.2	any reference to “Northrim Encumbrances” shall mean the indebtedness or claims arising under, or relating to, the Contract of Sale and Security Agreement between
Debtor and Northrim Funding Services dated as of November 16, 2006; 

  

	 	1.3.3	any reference to “Note” shall mean that certain senior subordinated note made by Debtor to Secured Party of even date herewith; 

  

	 	1.3.4	any reference to “Permitted Senior Encumbrances” shall mean the Northrim Encumbrances and those encumbrances listed and described on Schedule A hereto.

  

	 	1.3.5	any reference to “Security Agreement” shall, unless the context otherwise requires, be deemed a reference to this Security Agreement as amended from time to time by
written agreement together with any schedules attached hereto pursuant to the provisions hereof; 

  

	 	1.3.6	any reference to “UCC” shall mean the Uniform Commercial Code of the State of Washington as amended from time to time, including any amendments thereto and any Act
substituted therefor and amendments thereto; 

  

	 	1.3.7	any reference to “Warrant” shall mean that certain warrant issued by Debtor to Secured Party pursuant to the Note; and 

  

 2 

	 	1.3.8	the terms “Goods”, “Chattel Paper”, “Documents”, “Equipment”, “Accounts” “Consumer
Goods”, “Instruments”, “Intangibles”, “General Intangibles”, “Investment Property”, “Securities”, “Proceeds”,
“Inventory”, “Software”, “Deposit accounts” and “Accessions” and other words and expressions which have been defined in the UCC shall be interpreted in accordance with their
respective meanings given in the UCC (either in the singular or plural thereof), as the context requires unless otherwise defined herein or unless the context otherwise requires. 

 II. Obligations Secured 
  

	2.1	The security constituted by this Security Agreement is general and continuing security for payment, performance and satisfaction of each and every obligation, indebtedness and
liability of the Debtor to the Secured Party under the Note (including interest thereon), present or future, direct or indirect, absolute or contingent, matured or not, extended or renewed, wheresoever and howsoever incurred, and any ultimate unpaid
balance thereof, and whether the Debtor be bound alone or with another or others and whether as principal or surety (all of which obligations, indebtedness and liabilities are herein collectively called the “Obligations”).

  

	2.2	This Security Agreement and the security constituted hereby are in addition to and not in substitution for any other security or securities which the Secured Party may now or from
time to time hold or take from the Debtor or from any other person whosoever. 

 III. Representations and Warranties of Debtor

  

	3.1	The Debtor represents and warrants that: 

  

	 	3.1.1	this Security Agreement has been authorized, executed and delivered in accordance with resolutions of the directors of the Debtor and all other matters and things have been done and
performed so as to authorize and make the execution and delivery of this Security Agreement, the creation of the security constituted hereby and the performance of the Debtor’s obligations hereunder legal, valid and binding;

  

	 	3.1.2	the Collateral is genuine and is owned by the Debtor free of all security interests, mortgages, liens, claims, charges and other encumbrances (herein collectively called
“Encumbrances”), save for the security constituted by this Security Agreement and the Permitted Senior Encumbrances; and 

  

	 	3.1.3	the Debtor has good and lawful authority to create the security in the Collateral constituted by this Security Agreement. 

  

 3 

 IV. Covenants of the Debtor 
  

	4.1	The Debtor covenants and agrees that at all times while this Security Agreement remains in effect the Debtor will: 

  

	 	4.1.1	defend the Collateral for the benefit of the Secured Party against the claims and demands of all other persons; 

  

	 	4.1.2	not, without the prior written consent of the Secured Party create or permit to exist any Encumbrance against any of the Collateral which ranks or could in any event rank in
priority to or pari passu with the security constituted by this Security Agreement, save for (i) Permitted Senior Encumbrances and (ii) Encumbrances approved in writing by the Secured Party prior to creation or assumption;

  

	 	4.1.3	fully and effectively maintain and keep maintained valid and effective the security constituted by this Security Agreement; 

  

	 	4.1.4	notify the Secured Party promptly of: 

  

	 	(a)	any change in the Debtor’s name, jurisdiction of organization or legal form; and 

  

	 	(b)	any material loss or damage to the Collateral not covered by insurance; 

  

	 	4.1.5	keep the Collateral generally in good order, condition and repair and not use any material amount of the Collateral in violation of the provisions of this Security Agreement or any
other agreement relating to the Collateral or any policy insuring the Collateral or any applicable statute, law, by-law, rule, regulation or ordinance; 

  

	 	4.1.6	carry on and conduct the business of the Debtor in a commercially reasonable manner and so as to protect and preserve the Collateral and to keep, in accordance with generally
accepted accounting principles, consistently applied, proper books of account for the Debtor’s business as well as accurate and complete records concerning the Collateral and, at the Secured Party’s request, mark any and all such records
and the Collateral so as to indicate the security constituted by this Security Agreement; 

  

	 	4.1.7	forthwith pay when due: 

  

	 	(a)	all obligations to its employees and all obligations to others which relate to its employees when due, including, without limitation, all taxes, duties, levies, government fees,
claims and dues related to its employees; 

  

	 	(b)	all taxes, assessments, rates, duties, levies, government fees, claims and dues lawfully levied, assessed or imposed upon it or the Collateral when 

  

 4 

	 	  	due, unless the Debtor shall in good faith contest its obligations so to pay and shall furnish such security as the Secured Party may require; and 

  

	 	(c)	all Encumbrances which rank or could in any event rank in priority to or pari passu with the security constituted by this Security Agreement, including the Permitted Senior
Encumbrances; 

  

	 	4.1.8	Debtor, at its own cost and expense, will keep all of the Collateral comprising insurable property continuously insured in such amounts, with such responsible and reputable
insurance companies or associations, against such risks, and in such form, as are generally consistent with the Debtor’s insurance policies in effect on the date hereof or as otherwise reasonably satisfactory to Secured Party. Promptly
following the occurrence of any loss of, or damage to, any material part of the Collateral comprising insurable property, Debtor will give to Secured Party notice of such loss or damage; 

  

	 	4.1.9	forthwith pay when due all reasonable costs, charges, expenses and legal fees and disbursements which may be incurred by the Secured Party in: 

  

	 	(a)	inspecting the Collateral upon or after the occurrence of an Event of Default; 

  

	 	(b)	taking, recovering, keeping possession of and insuring the Collateral upon or after the occurrence of an Event of Default; and 

  

	 	(c)	all other actions and proceedings taken in connection with the preservation of the Collateral under the terms of this Security Agreement and the confirmation, perfection and
enforcement of this Security Agreement; and 

  

	 	4.1.10	at the Secured Party’s request at any time and from time to time execute and deliver such further and other documents and instruments and do all other acts and things as the
Secured Party reasonably requires in order to give effect to this Security Agreement or to confirm and perfect, and maintain perfection of, the security constituted by this Security Agreement in favor of the Secured Party. 

V. Payments and Proceeds 
  

	5.1	Subject to the rights of the holders of the Permitted Senior Encumbrances, after default under this Security Agreement, the Secured Party may notify all or any debtors on any
Account (“Account Debtors”) of the security constituted by this Security Agreement and may also direct such Account Debtors to make all payments on the Collateral to the Secured Party. 

  

 5 

 VI. Secured Party Actions 
  

	6.1	The Debtor hereby authorizes the Secured Party to file such financing statements and other documents and do such acts, matters and things, consistent with the terms and conditions
of this Security Agreement, as the Secured Party may deem appropriate to perfect and continue the security constituted hereby, to protect and preserve the Collateral and to realize upon the security constituted hereby. The Debtor hereby irrevocably
constitutes and appoints the Secured Party the true and lawful attorney of the Debtor, with full power of substitution to do any of the foregoing in the name of the Debtor whenever and wherever it may be deemed necessary or expedient by the Secured
Party following the occurrence and during the continuation of an event of default under this Security Agreement. 

  

	6.2	If the Debtor fails to perform any of its Obligations hereunder, the Secured Party may, after written notice to Debtor, but shall not be obliged to, perform any or all of such
Obligations without prejudice to any other rights and remedies of the Secured Party hereunder, and any payments made and any reasonable costs, charges, expenses and legal fees and disbursements incurred in connection therewith shall be payable by
the Debtor to the Secured Party forthwith with interest until paid at the highest rate borne by any of the Obligations and such amounts shall form part of the Obligations and constitute a charge upon the Collateral in favor of the Secured Party
prior to all claims subsequent to this Security Agreement. 

 VII. Default 
  

	7.1	The Debtor shall be in default under this Security Agreement, unless otherwise agreed in writing by the Secured Party, upon the occurrence of any of the following events:

  

	 	7.1.1	the Debtor defaults in payment when due, after the expiration of any applicable grace periods, of any of the Obligations which are indebtedness or liabilities or the Debtor fails to
perform or satisfy any other of the Obligations; or 

  

	 	7.1.2	the Debtor is in breach of any written term, condition, proviso, agreement or covenant to the Secured Party contained in the Note, the Warrant or this Security Agreement, or any
representation or warranty given by the Debtor to the Secured Party in connection with the Note, the Warrant or this Security Agreement is untrue; or 

  

	 	7.1.3	the Debtor makes an assignment for the benefit of its creditors, is declared bankrupt, makes a proposal or otherwise takes advantage of provisions for relief under the Bankruptcy
Code or similar legislation in any jurisdiction; or 

  

	 	7.1.4	there is instituted by or against the Debtor, and not dismissed within 90 days thereof, any formal or informal proceeding for the dissolution or liquidation of, settlement of claims
against, or winding up of affairs of, the Debtor; or 

  

 6 

	 	7.1.5	the Debtor ceases or an officer of Debtor with apparent authority to bind Debtor threatens to Secured Party or any holder of a Permitted Senior Encumbrance to cease to carry on
business or makes or agrees to make a bulk sale of assets or commits or an officer of Debtor with apparent authority to bind Debtor threatens to Secured Party or any holder of a Permitted Senior Encumbrance to commit an act of bankruptcy; or

  

	 	7.1.6	a receiver, receiver and manager or receiver-manager of all or any material part of the Collateral or of any other material property, assets or undertakings of the Debtor is
appointed; or 

  

	 	7.1.7	any execution, sequestration, extent or other process of any court materially adversely affecting the Collateral becomes enforceable against the Debtor or a distress or analogous
process is levied upon the Collateral or any material part thereof; or 

  

	 	7.1.8	an order is made or an effective resolution is passed for winding-up the Debtor; or 

  

	 	7.1.9	without the prior written consent of the Secured Party, the Debtor creates or permits to exist any Encumbrance against any of the Collateral (other than any of the Permitted Senior
Encumbrances) which ranks or could in any event rank in priority to or par passu with the security constituted by this Security Agreement; or 

  

	 	7.1.10	the holder of any Encumbrance against any of the Collateral (other than the holder of any Permitted Senior Encumbrance) does anything to enforce or realize on such Encumbrance.

 VIII. Enforcement 
  

	8.1	Upon any default under this Security Agreement, the Secured Party may declare any or all of the Obligations to become immediately due and payable. 

  

	8.2	Upon default under this Security Agreement, the security hereby constituted will immediately become enforceable. 

  

	8.3	To enforce and realize on the security constituted by this Security Agreement, the Secured Party may take any action permitted by law or in equity as it may deem expedient, and in
particular, without limiting the generality of the foregoing, the Secured Party may do any one or more of the following: 

  

	 	8.3.1	appoint by instrument a receiver, receiver and manager or receiver-manager (the person so appointed is herein called the “Receiver”) of the Collateral, with or without
bond as the Secured Party may determine, and from time to time in its sole discretion remove such Receiver and appoint another in its stead; 

  

 7 

	 	8.3.2	enter upon any premises of the Debtor and take possession of the Collateral with power to exclude the Debtor, its agents and its servants therefrom, without becoming liable as a
mortgagee in possession; 

  

	 	8.3.3	preserve, protect and maintain the Collateral and make such replacements thereof and repairs and additions thereto as the Secured Party may deem advisable; 

 

	 	8.3.4	sell, lease or otherwise dispose of or concur in selling, leasing or otherwise disposing of all or any part of the Collateral, whether by public or private sale or lease or
otherwise, in such manner, at such price as can be reasonably obtained therefor and on such terms as to credit and with such conditions of sale and stipulations as to title or conveyance or evidence of title or otherwise as to the Secured Party may
seem reasonable, provided that the Debtor will not be entitled to be credited with the proceeds of any such sale, lease or other disposition until the monies therefor are actually received; and 

  

	 	8.3.5	exercise all of the rights and remedies of a secured party under the UCC. 

  

	8.4	A Receiver appointed pursuant to this Security Agreement shall be the agent of the Debtor and not of the Secured Party and, to the extent permitted by law or to such lesser extent
permitted by its appointment, shall have all the powers of the Secured Party hereunder, and in addition shall have power to carry on the business of the Debtor and for such purpose from time to time to borrow money either secured or unsecured, and
if secured by a security on any of the Collateral, any such security may rank in priority to or pari passu with or behind the security constituted by this Security Agreement, and if it does not so specify such security shall rank in priority
to the security constituted by this Security Agreement. 

  

	8.5	Subject to applicable law and the claims, if any, of the holders of any Permitted Senior Encumbrances, all amounts realized from the disposition of the Collateral pursuant to this
Security Agreement will be applied as the Secured Party, in its sole discretion, may direct as follows: 

  

	Firstly:	in or toward payment of all costs, charges and expenses, including legal fees and disbursements incurred by the Secured Party in connection with or incidental to:

  

	 	(a)	the exercise by the Secured Party of all or any of the powers granted to it pursuant to this Security Agreement; and 

  

	 	(b)	the appointment of the Receiver and the exercise by the Receiver of all or any of the powers granted to the Receiver pursuant to this Security Agreement, including the
Receiver’s reasonable remuneration and all outgoings properly payable by the Receiver; 

  

 8 

			
	Secondly:	  	in or toward payment to the Secured Party of all principal and other monies (except interest) due in respect of the Obligations;
		
	Thirdly:	  	in or toward payment to the Secured Party of all interest remaining unpaid in respect of the Obligations; and
		
	Fourthly:	  	any surplus will be paid to the Debtor.

 IX. Deficiency 
  

	9.1	If the amounts realized from the disposition of the Collateral are not sufficient to pay the Obligations in full to the Secured Party, the Debtor will immediately pay to the Secured
Party the amount of such deficiency. 

 X. Rights Cumulative 
  

	10.1	All rights and remedies of the Secured Party set out in this Security Agreement are cumulative and no right or remedy contained herein is intended to be exclusive but each will be
in addition to every other right or remedy contained herein or in any existing or future security agreement or now or hereafter existing at law or in equity or pursuant to any other agreement between the Debtor and the Secured Party that may be in
effect from time to time. 

 XI. Appointment of Attorney 
  

	11.1	The Debtor hereby irrevocably appoints the Secured Party or the Receiver, as the case may be, with full power of substitution, to be the attorney of the Debtor for and in the name
of the Debtor to sign, endorse or execute under seal or otherwise any deeds, documents, transfers, checks, instruments, demands, assignments, assurances or consents that the Debtor is obliged to sign, endorse or execute under the terms and
conditions of this Security Agreement and generally to use the name of the Debtor and to do all things as may be necessary or incidental to the exercise of all or any of the powers conferred on the Secured Party or the Receiver, as the case may be,
pursuant to this Security Agreement, in and such case after the occurrence and during the continuation of an event of default under this Security Agreement. 

 XII. Waiver 
  

	12.1	No delay or omission by the Secured Party in exercising any right or remedy hereunder or with respect to any of the Obligations shall operate as a waiver thereof or of any other
right or remedy, and no single or partial exercise thereof shall preclude any other or further exercise thereof or the exercise of any other right or remedy. 

  

 9 

 XIII. Assignment 
  

	13.1	The Secured Party may, without further notice to the Debtor, at any time mortgage, charge, assign, transfer or grant a security interest in this Security Agreement and the security
constituted hereby. 

  

	13.2	The Debtor expressly agrees that the assignee, transferee or secured party of the Secured Party, as the case may be, shall have all of the Secured Party’s rights and remedies
under this Security Agreement. 

 XIV. Satisfaction and Discharge 
  

	14.1	The Debtor shall be entitled to a release and discharge of the security constituted by this Security Agreement upon full payment, by the Debtor and payment to the Secured Party of
all costs, charges, expenses and legal fees and disbursements incurred by the Secured Party in connection with the Obligations and such release and discharge. 

 XV. No Merger 
  

	15.1	This Security Agreement shall not operate so as to create any merger or discharge of any of the Obligations, or any assignment, transfer, guarantee, lien, contract, promissory note,
bill of exchange or security in any form held or which may hereafter be held by the Secured Party from the Debtor or from any other person whomsoever. 

  

	15.2	The taking of a judgment with respect to any of the Obligations will not operate as a merger of any of the terms, conditions, covenants, agreements or provisos contained in this
Security Agreement. 

  

	15.3	The release and discharge of the security constituted by this Security Agreement by the Secured Party shall not operate as a release or discharge of any right of the Secured Party
against the Debtor arising under this Security Agreement prior to such release and discharge. 

 XVI. Interpretation 
  

	16.1	In this Security Agreement: 

  

	 	16.1.1	the invalidity or unenforceability of the whole or any part of any clause shall not affect the validity or enforceability of any other clause or the remainder of such clause;

  

	 	16.1.2	the headings have been inserted for reference only and shall not define, limit, alter or enlarge the meaning of any provision of this Security Agreement; and

  

	 	16.1.3	when the context so requires, the singular shall be read as if the plural were expressed and the provisions hereof shall be read with all grammatical changes

  

 10 

	 	  	necessary dependent upon the person referred to being a male, female, firm or corporation. 

 XVII. Notice 
  

	17.1	Whenever either the Secured Party or the Debtor is required or entitled to notify or direct the other or to make a demand upon or request of the other relating to the Collateral,
this Security Agreement or the UCC, such notice, direction, demand or request shall be sufficiently given if given in writing and delivered to the party for whom it is intended at the address of such party herein or as changed pursuant hereto or if
sent by prepaid certified or registered mail, addressed to the party for whom it is intended at the address of such party herein set forth or as changed pursuant hereto, provided that such notice shall not be effective until three days after such
mailing. 

  

	17.2	Either the Secured Party or the Debtor may notify the other in accordance herewith of any change in its principal address to be used for the purposes hereof.

 XVIII. Variation 
  

	18.1	No modification, variation or amendment of any provision of this Security Agreement shall be made except by written agreement, executed by the parties hereto and no waiver of any
provision hereof shall be effective unless in writing. 

 XIX. Enurement 
  

	19.1	This Security Agreement shall enure to the benefit of the Secured Party and its successors and assigns and shall be binding upon the successors and permitted assigns of the Debtor.

 XX. Copy of Agreement and Financing Statement 
  

	20.1	The Debtor hereby acknowledges receiving a copy of this Security Agreement. 

 XXI. Governing Law 
  

	21.1	This Security Agreement shall be governed by and construed in accordance with the laws of the State of Washington. 

  

	21.2	For the purpose of legal proceedings this Security Agreement shall be deemed to have been made in the State of Washington and to be performed there and the courts of the State of
Washington shall have jurisdiction over all disputes which may arise under this Security Agreement and the Debtor hereby irrevocably and unconditionally submits to the non-exclusive jurisdiction of such courts, provided always that nothing herein
contained shall prevent the Secured Party from proceeding at its election against the Debtor in the courts of any other state, country or jurisdiction. 

  

 11 

 XXII. Additional Borrowings; Leases. 
  

	22.1	Secured Party agrees that Debtor may (i) borrow additional funds from third parties and grant additional security interest in the Collateral all provided that any such
borrowings and collateralizations are junior and subordinate to Secured Party, and (ii) enter into leases of equipment and real or personal property. 

 XXIII. Cure of Any Applicable Defaults Under Guaranties. 
  

	23.1	Secured Party agrees that, upon the occurrence of any default under the terms of any guaranty given in connection with the Note and this Security Agreement, Secured Party shall give
Debtor written notice of any such default and a thirty (30) day period to cure any such default thereunder, including the right to replace such guaranty or pay down the indebtedness evidenced by the Note and this Security Agreement by the
amount of any such guaranty and, concurrently with such pay down, the maximum permitted outstanding balance under the Note shall correspondingly be reduced. Upon the death of a guarantor under guaranty given in connection with the Note and this
Security Agreement, Debtor shall give Secured Party written notice of such death and Debtor shall replace such guaranty with a substituted guaranty subject to Secured Party’s reasonable approval or pay down the indebtedness evidenced by the
Note and this Security Agreement by the amount of any such guaranty within thirty (30) days of such notice and, concurrently with such pay down, the maximum permitted outstanding balance under the Note shall correspondingly be reduced.

 In Witness Whereof the Debtor has executed this Security Agreement as of the day and year first above written. 
  

			
	TULLY’S COFFEE CORPORATION, a Washington corporation
		
	By:	 	 /s/ John K. Buller

	Name:	 	John K. Buller
	Title:	 	President and CEO

  

 12 

 Schedule A 
 Permitted Senior Encumbrances 
 “Permitted Senior Encumbrances” means (i) the types of Liens
described in clauses (a) through (j) of paragraph 1 below and (ii) the specific Liens identified by UCC financing statement filing number in paragraph 2 below. 
 1. Types of Liens constituting Permitted Senior Encumbrances: 
 (a) liens for taxes, assessments or
governmental charges or claims payment of which is not, at the time, required by Section 4.1.7(b); 
 (b) statutory liens of landlords
and liens of carriers, warehousemen mechanics and materialmen and other liens imposed by law (other than any Lien imposed pursuant to Section 401(a)(29) or 412(n) of the Internal Revenue Code or by ERISA) incurred in the ordinary course of
business for sums not yet delinquent or being contested in good faith, if such reserve or other appropriate provision, if any, as shall be required by GAAP shall have been made therefor; 
 (c) Liens incurred or deposits made in the ordinary course of business in connection with workers’ compensation, unemployment insurance and other
types of social security, or to secure the performance of tenders, statutory obligations, surety and appeal bonds, bids, leases, government contracts, trade contracts, performance and return-of-money bonds and other similar obligations (exclusive of
obligations for the payment of borrowed money); 
 (d) any attachment or judgment Lien not constituting an Event of Default under subsection
9.1(i); 
 (e) leases or subleases granted to others not interfering in any material respect with the ordinary conduct of the business of
Debtor; 
 (f) easements, rights-of-way, restrictions, minor defects, encroachments or irregularities in title and other similar charges or
encumbrances not interfering in any material respect with the ordinary conduct of the business of Debtor; 
 (g) any (i) interest or
title of a lessor or sublessor under any capital lease or any operating lease not prohibited by this Agreement, (ii) restriction or encumbrance that the interest or title of such lessor or sublessor may be subject to, or
(iii) subordination of the interest of the lessee or sublessee under such lease to any restriction or encumbrance referred to in the preceding clause (ii); 
 (h) Liens arising from filing UCC financing statements relating solely to leases permitted by this Agreement; 
 (i) Liens in favor of customs and revenue authorities arising as a matter of law to secure payment of customs duties in connection with the importation of goods; and 
  

 13 

 (j) deposits in the ordinary course of business to secure liabilities to insurance carriers, lessors,
utilities and other service providers. 
 2. Specific Permitted Senior Encumbrances: 
  

											
	 #
	  	 Secured Party(ies)
	  	State	  	Filing No(s)	  	Filing
Date	  	 Collateral

	1.	  	 Pioneer Leasing, Inc.
 PO Box 646
 Vancouver, WA 98666
	  	California	  	20057026638370	  	05/11/05	  	336 Taylor Machine S/N K4114838
						
	2.	  	 UCC Ueshima Coffee
 Company Ltd.
 7-7, Minatojima
 Nakamachi 7-Chome
 Kobe, JAPAN 650-8577
	  	Washington	  	2001-101-0027
 2005-286-1246-8
	  	04/11/01
 10/13/05
	  	See Attached Schedule A-1 (copy of 2d UCC-1; two filings appear substantively identical)
						
		  		  		  	2001-102-0089
 2005-286-1260-4
	  	04/12/01
 10/13/05
	  	
						
	3.	  	 Fres-co System USA, Inc.
 3005 State Road
 Telford, PA 18969
	  	Washington	  	2002-326-0436-0	  	11/21/02	  	One (1) GL-14M Corner Seal (TM) Machine, SN2816
						
	4.	  	 General Electric
 Capital Corporation
 3000 Lakeside Drive
 Suite 200N
 Bannockburn, IL 60015
	  	Washington	  	2003-135-1637-7	  	05/13/03	  	7 new taylor model #336 stand up ice cream machines
						
	5.	  	 American Express
 Business Finance
 600 Travis Street
 Suite 1300
 Houston, TX 77002
	  	Washington	  	2003-150-6270-4	  	05/29/03	  	 Equipment, personal property and other property covered by agreement no. C#765845/
 A#817064

						
	6.	  	 Farnam Street
 Financial, Inc.
 240 Pondview Plaza
 5850 Opus Parkway
 Minnetonka, MN 55343
	  	Washington	  	2005-080-3115-9	  	03/18/05	  	Lease agreement #TU102604
						
	7.	  	 Pinnacle Capital, LLC
 5407 12th Street E.
 Suite A
 Tacoma, WA 98424
	  	Washington	  	2005-090-6097-4	  	03/31/05	  	All equipment and general intangibles covered by

  

 14 

											
						
	8.	  	 Unisource Worldwide
 20213 89th Avenue S.
 Kent, WA 98031
	  	Washington	  	2005-136-9280-2	  	05/16/05	  	equipment lease/finance number 3001994 1 Belcore 505-55N1110 serial number #505-041649
						
	9.	  	 Pinnacle Capital, LLC
 5407 12th Street E.
 Suite A
 Tacoma, WA 98424
 US Bancorp Manifest
 Funding Services
 1450 Channel Parkway
 Marshall, MN 56258
	  	Washington	  	2005-138-0081-8	  	05/18/05	  	All equipment and general intangibles covered by equipment lease/finance number 3001870
						
	10.	  	 Northrim Funding Services, a division of Northrim Bank
 170 120th Avenue NE
 Suite 202
 Bellevue, WA 98005
	  	Washington	  	2005-174-9948-3	  	06/23/05	  	 See Attached,
 Schedule A-2

						
	11.	  	 NMHG Financial
 Services, Inc.
 10 Riverview Drive
 Danbury, CT 06810
	  	Washington	  	2006-076-3136-6	  	03/17/06	  	All equipment now or hereafter leased by Lessor to Lessee

  

 15 

 [Remaining schedules intentionally left blank] 
  

 16

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