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INDUSTRIAL LEASE - SINGLE TENANT
THIS LEASE AGREEMENT made this 16th day of August, 1999, by and between Kent
Central, LLC, a Washington limited liability company (the "Lessor") and Tully's
Coffee Corporation, a Washington corporation (the "Lessee").
1. PREMISES. Lessor does hereby lease to Lessee those certain premises, to
wit: The Buildings located at 3100 Airport Way South in Seattle, Washington
as outlined on Exhibit A attached hereto (hereinafter called "Premises").
The multiple building complex of which the Building is a part is hereafter
sometimes referred to as the "Project." In addition, the Lessee has the
right, in common with other tenants in the Project and subject to the Rules
and Regulations, to use of the Common Areas including the parking areas.
See Legal Description attached as Exhibit B.
2. TERM. This Lease shall be for a term of ten years commencing upon Lessor's
acquisition of the property (approximately November 1, 1999) (the
"Commencement Date") and terminating ten years thereafter. The parties will
execute a Commencement Date Memorandum commemorating the actual
Commencement Date.
3. RENT. Lessee covenants and agrees to pay Lessor at 1001 Fourth Avenue,
Suite 4700, Seattle, WA 98154, or to such other party or at such other
place as Lessor may hereafter designate, monthly rent in advance without
offset or deduction, on or before the first (1st) day of each month of the
Lease term in the amounts as follows:
Months: Base Rent:
1 through 60 $36,033 per month
61 through 120 $41,438 per month
4. SECURITY DEPOSIT. INTENTIONALLY OMITTED
5. USE. Lessee shall use and occupy the Premises for the purposes of roasting
and storing coffee and other goods related to the Tully's operation, and
normal office, and for no other purposes, without prior written consent of
Lessor, and shall comply with all governmental laws, ordinances,
regulations, orders and directives and insurance requirements applicable to
Lessee's use of the Premises. Lessee shall not occupy or use or permit any
portion of the Premises to be occupied or used in such a manner or for any
purpose which would increase the cost of insurance coverage upon the
Premises, the building or the contents thereof.
6. RULES AND REGULATIONS. Lessee agrees to comply with any Rules and
Regulations attached hereto, any recorded Covenants, Conditions and
Restrictions affecting the Project, as well as such other reasonable rules
and regulations as may from time to time be adopted by Lessor for the
management, good order and safety of common areas, the building and its
Lessee(s). Lessee shall be responsible for the compliance with such
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rules and regulations by its employees, agents and invitees. Lessor's
failure to enforce any of such rules and regulations against Lessee or any
other Lessee shall not be deemed to be a waiver of same.
7. MAINTENANCE. Lessee agrees to take possession of the Premises "as is" and
that the Premises are in tenantable and acceptable condition. Lessee
shall at its expense and at all times keep, maintain, repair and replace
the Premises, including but not limited to the roof, exterior walls,
foundations and common areas and facilities, if any, storefronts,
exterior doors and windows, Lessee division walls and mechanical,
electrical, sprinkler and other utility systems, together with connections
to utility distribution systems, in at least as good a condition as when
delivered to Lessee. Lessee agrees to maintain a preventative maintenance
contract providing for the regular inspection and maintenance of the
heating and air conditioning systems with a licensed mechanical contractor
and containing terms and specifications acceptable to Lessor. Lessee shall
further keep the Premises and adjoining common areas in a neat, clean, safe
and sanitary condition; protect water, drain, gas and other pipes to
prevent freezing or clogging and repair all leaks and damage, caused
thereby; replace all glass and panels in windows and doors of the Premises
which become cracked, broken or damaged; and remove ice and snow from
entries and common areas immediately adjacent to the Premises.
8. UTILITIES AND FEES. Lessee agrees to pay promptly when due all charges for
light, heat, water, sewer, garbage, fire protection and other utilities and
services to the Premises, and all license fees and other governmental
charges levied on Lessee's property and the operation of Lessee's business
on the Premises. Lessor shall not be liable for any injury or damages
suffered as a result of the interruption of utilities or services by fire,
or other casualty, strike, riot, vandalism, the making of necessary repairs
or improvements, or other causes beyond Lessor's reasonable control.
9. MONTHLY OPERATING EXPENSE ADJUSTMENTS. Lessee shall pay as additional
monthly rent its prorata share of all expenses incurred by Lessor for
operation of the Project during the term or any extension hereof, as
follows:
A. Real Estate taxes and assessments, together with any assessments
levied by the Owner's Association, if any.
B. Usual and necessary costs of operation, maintenance and repair
(including replacement) as determined by standard accounting practice,
including without limitation, all utilities and services not metered
or charged directly to Lessee, insurance (including, but not limited
to the insurance provided for under Paragraph 16 C below), painting,
upkeep and repair of parking, landscaping, and all common areas and
facilities. If any portion of the Property, or any system or equipment
is replaced by Lessor, and if the useful life of such replaced item
extends beyond the term of this Lease (as such term may be extended by
the exercise of any options), the cost of such replacement will be
prorated over its
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useful life and Lessee will be responsible only for that portion of
the cost which is applicable to the lease term (as extended).
C. A Management fee equal to three percent (3%) of Lessee's monthly rent,
including Base Rent and any Additional Rent. Lessor shall from time to
time estimate and provide notice to Lessee of its monthly expense
based upon existing or expected costs. Such monthly estimated amount
shall be paid by Lessee on or before the first day of each month.
Lessor, annually or upon termination hereof, shall compute Lessee's
actual expenses. Any overpayment shall be applied as a credit to
Lessee against future expense payments. Any deficiency shall be paid
to Lessor by Lessee within fifteen (15) days after the date of
Lessor's statement. Lessor's records showing expenditures made for
such expenses shall be available for Lessee's inspection at any
reasonable time.
The determination of actual costs and estimated costs allocable to the
Premises shall be made by Lessor. Lessor or its agent shall keep
records showing all expenditures made for the items enumerated above,
which records shall be available for inspection and review by Lessee.
The Lessee shall have the right, at reasonable times and upon
reasonable prior notice to the Lessor to review the Lessor's records
relating to the actual costs and estimated costs allocable to the
Premises for a particular Lease Year, which review must be conducted
within one (1) year after Lessee's receipt of the statement of actual
costs allocable to the Premises for that particular Lease Year. If
such review is not conducted within such one (1) year period, then the
matters set forth in the statement of actual costs allocable to the
Premises for that particular Lease Year shall be deemed conclusive.
The Lessee shall pay the costs and expenses of such review unless such
review reveals that the Lessor has overstated the Operating Expenses
for the Lease Year in question by an amount equal to 5% or more for
that particular Lease Year in which event the Lessor shall pay up to
$1,000 in payment of the actual costs incurred by Lessee in the
performance of such review.
10. LESSOR'S RESERVATIONS. Lessor reserves the right without liability to
Lessee: (a) to inspect the Premises, and to show them to prospective
Lessees, partners or lenders and if they are vacated, to prepare them for
re-occupancy; (b) to retain at all times and to use in appropriate
instances keys to doors within and into the Premises; (c) to make repairs,
alterations, additions or improvements, whether structural or otherwise, in
or about the building, and for such purposes to enter upon the Premises and
during the continuance of any work, to close common areas and to interrupt
or temporarily suspend building services and facilities, all without
affecting any of Lessee's obligations hereunder, so long as the Premises
are reasonably accessible; and (d) generally to perform any act relating to
the safety, protection and preservation of the Premises or building.
11. POSSESSION. If Lessor does not deliver possession of the Premises at the
Commencement Date of the term of this Lease, then, unless such delay is
caused by
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Lessee, Lessee may give Lessor written notice of its intention to cancel
this Lease if possession is not delivered within ninety (90) days after
receipt of such notice by Lessor. Lessor shall not be liable for any
damages caused by failure to deliver possession of the Premises and Lessee
shall not be liable for any rent until such time as Lessor delivers
possession. A delay of possession shall not extend the termination date.
Notwithstanding the above, in the event the delay was caused by Lessee,
then the payment of Rent shall commence on the Commencement Date and Lessee
shall not have any right to cancel this Lease as a result of such delay. If
Lessor offers possession of the Premises or any portion thereof prior to
the Commencement Date of the term of this Lease, and if Lessee accepts such
early possession, then both parties shall be bound by all of the covenants
and terms contained herein during such period of early possession including
the payment of rent which shall be pro-rated accordingly and for the number
of days of such early possession.
12. ASSIGNMENT AND SUBLETTING. Lessee shall not either voluntarily or by
operation of law assign, transfer, convey or encumber this Lease or any
interest under it, or sublet its right to occupy or use all or any portion
of the Premises without Lessor's prior written consent which consent will
not be unreasonably withheld. Among the criteria to be used by Lessor in
liberally evaluating a request for assignment or subletting will be (i) the
proposed use of the Premises; (ii) the anticipated impact, if any, on
parking; (iii) the financial capacity of the assignee/sublessee to perform
the obligations under this Lease; (iv) the compatibility of the proposed
user with the remainder of the tenants and operation of the Building. In
the event that Lessee requests consent to the assignment or subletting of
more than a total of 50% of the Premises, then Lessor reserves the right to
recapture the Premises or applicable portion thereof in lieu of giving its
consent by notice given to Lessee within twenty (20) days after receipt of
Lessee's written request for such assignment or subletting. Such recapture
shall terminate this Lease as to the applicable space effective on the
prospective date of assignment or subletting, which shall be the last day
of a calendar month and not earlier than sixty (60) days after receipt of
Lessee's request hereunder. In the event that Lessor shall not elect to
recapture and shall thereafter give its consent, Lessee shall pay Lessor a
reasonable fee, not to exceed One Thousand and No/100 Dollars ($1,000.00)
to reimburse Lessor for processing costs incurred in connection with such
consent. Lessor's consent shall not release or discharge Lessee from future
liability under this Lease and shall not waive Lessor's right to consent to
any future assignment or sublease. Any assignment or subletting without
Lessor's consent shall be void and shall, at Lessor's option, constitute a
default under this Lease. A transfer by the present majority shareholders
of ownership or control of a majority of the voting stock of a corporate
Lessee, or the change in form of entity of the Lessee, shall be deemed an
assignment.
The Lessee shall not assign its interest in or under this Lease for
security purposes, nor shall the Lessee grant any security interest, lien
or encumbrance against its interest in this Lease or in or to any property
in or affixed to the Premises without the prior written consent of the
Lessor, which consent shall be granted, withheld or conditioned in Lessor's
sole discretion. In no event shall the Lessee grant, or allow to exist, any
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security interest in, or lien or encumbrance against the fee title to the
Premises, the building in which the Premises is located or the real
property on which the building is located.
13. ALTERATIONS. After obtaining the prior written consent of Lessor, Lessee
may make alterations, additions and improvements in said Premises at its
sole cost and expense. Lessee agrees to save Lessor harmless from any
damage, loss, or expense arising therefrom and to comply with all laws,
ordinances, rules and regulations. Upon termination of this Lease, all
alterations, additions and improvements made in, to or on the Premises
(including without limitation all electrical, lighting, plumbing, heating,
air conditioning, and communications equipment and systems, doors, windows,
partitions, drapery, carpeting, shelving, counters, and physically attached
fixtures unless excluded by written agreement annexed hereto), shall remain
upon and be surrendered as a part of the Premises; provided however, upon
Lessor's request, Lessee shall remove those additions, alterations, or
improvements as may be specified by Lessor, and repair and restore the
Premises to is original condition at Lessee's sole cost and expense prior
to expiration of the Term.
14. LIENS. Lessee shall keep the Premises free from any liens arising out of
any work performed, materials furnished, equipment supplied, or obligations
incurred by or on behalf of Lessee. No work performed, material furnished,
equipment supplied or obligations incurred by or on behalf of Lessee shall
be deemed to be for the immediate use and benefit of Lessor so that no
mechanic's lien or other lien shall be allowed against Lessor's estate in
the premises. Lessee shall provide, at Lessee's own cost, waivers of lien
signed by any party (including the Lessee) who performs work, furnishes
materials, or supplies equipment to the Premises. Lessor may require, at
Lessee's sole cost and expense, a lien release and completion bond in an
amount equal to either the actual contract price or one and one-half times
the estimated cost of any improvements, additions or alterations in the
Premises which Lessee desires to make, to insure Lessor against any
liability for lien and to insure completion of the work.
15. SIGNS. All signs or symbols placed by Lessee in the windows and doors of
the Premises, or upon any exterior part of the building, shall be subject
to Lessor's prior written approval. Lessor will not object to the size of
any sign proposed by Lessee and approved by the City of Seattle. Prior to
termination of this Lease, Lessee will remove all signs placed by it upon
the Premises, and will repair any damages caused by such removal.
16. INSURANCE.
A. Lessee shall pay for and maintain, during the entire Lease Term, the
following policies of insurance:
(i) Commercial general liability insurance, including products,
completed operations coverage and auto liability insurance
covering Lessee's
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operations and the Premises with limits of not less than
$2,000,000 per occurrence. Such policies shall be endorsed to
provide contractual liability insurance covering all liability
assumed by Lessee under the provisions of this Lease and a copy
of said endorsement will be delivered to Lessor prior to
commencement of the Term.
(ii) Special cause of loss "all risk" perils property insurance upon
all building improvements and alterations on the Premises for
which Lessee is responsible and upon Lessee's property in the
amount of one hundred percent (100%) full replacement cost. The
policy shall include Lessor and Lessor's mortgagee, if any, as
additional insureds, as their interests may appear, with a loss
payable clause in favor of Lessor and Lessor's mortgagee to the
extent of their interest in the property.
B. Each policy provided by Lessee shall expressly provide that it shall
not be subject to cancellation or material change without at least
thirty (30) days prior written notice to the Lessor. Lessee shall
furnish Lessor, prior to commencement of the Term, with insurance
certificates naming Lessor as additional insured and, upon request,
copies of such policies required to be maintained hereunder.
C. Lessor shall pay for and maintain property insurance during the entire
Lease Term for the perils of Special cause of loss ("all risk") and
earthquake. Such insurance shall be in the amount of one hundred
percent (100%) full replacement value of the Building and Lessor's
improvements.
17. INDEMNITY AGAINST LIABILITY FOR LOSS OR DAMAGE.
A. Lessee assumes all liability for and shall indemnify, hold harmless
and defend Lessor from and against all loss, damage or expense which
the Lessor may sustain or incur, and against any and all claims,
demands, suits and actions whatsoever, including expense of
investigation and litigation, on account of injury to or death of
persons, including without limitation employees of Lessor, employees
of Lessee or its affiliated companies or on account of damage to or
destruction of property, including without limitation property owned
by and property in the care, custody or control of Lessor during the
Term, due to or arising in any manner from:
(i) The acts or negligence of Lessee or any contractor,
subcontractor, or agent of Lessee or their respective employees;
(ii) The condition, use or operation of the Premises and/or materials
or substances used by Lessee or any of its contractors,
subcontractors or agents of Lessee or by their respective
employees, regardless of whether or not furnished by Lessor under
this Lease or otherwise;
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(iii) Any damage or injury to persons or property arising out of
Lessee's breach or this Lease, including, but not limited to,
obligations of Lessee under Section 7, Maintenance.
B. Lessor shall have no liability to Lessee as a result of loss or damage
to Lessee's property or for death or bodily injury caused by the acts
or omissions of other tenants in the project or by third parties
(including criminal acts).
C. Lessee shall not be obligated to indemnify Lessor for the portion of
any claim or liability caused by or arising from the act, or
negligence of Lessor.
D. It is mutually understood and agreed that the assumption of
liabilities and indemnification provided for in this Section 17 shall
survive any termination of this Lease.
18. DAMAGE OR DESTRUCTION. If any of the Premises, or a substantial part of the
building in which the Premises are located, shall be damaged or destroyed
by fire or other insured casualty, and repair of the damage can not be
completed within one hundred eighty (180) days, following receipt by Lessor
of actual notice of such damage or destruction Lessor shall have the option
either (a) to repair or rebuild within a reasonable time utilizing the
insurance proceeds to effect such repair, or (b) not to repair or rebuild,
and to cancel this Lease on thirty (30) days notice. If Lessor fails to
give Lessee written notice of its election within thirty (30) days from the
date of damage, or if the restoration of the Premises cannot be completed
within one hundred eighty (180) days from date of notice, Lessee may cancel
this Lease at its option on three (3) days notice. During the period of
untenantability, rent shall abate in the same ratio as the portion of the
Premises rendered untenantable bears to the whole of the Premises; provided
that if the damage is due to the fault or neglect of Lessee, there shall be
no abatement of rent.
If the Premises or the building in which the Premises are located shall be
damaged or destroyed by fire or other insured casualty, and repair of the
damage can be completed within one hundred eighty (180) days, Lessor shall
repair or rebuild within a reasonable time utilizing the insurance proceeds
to effect such repair.
If any part of the Premises or the building in which the Premises are
located shall be damaged or destroyed by an uninsured casualty Lessor shall
have the option either (a) to repair or rebuild within a reasonable time,
or (b) not to repair or rebuild, and to cancel this Lease on thirty (30)
days notice. In the event of cancellation by Lessor as a result of an
uninsured casualty, Lessee shall have the right, within five (5) days
following Lessor's notice of cancellation, to override such cancellation by
agreeing to repair the damage at Lessee's sole cost and expense. In such
event, the Lessee shall repair or rebuild within a reasonable time
following the damage or destruction.
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19. EMINENT DOMAIN. If the whole of the Premises shall be taken by any public
authority under the power of eminent domain, or purchased by the condemnor
in lieu thereof, then the term of this Lease shall cease as of the date
possession is taken by such public authority. If only part of the Premises
shall be so taken, the Lease shall terminate only as to the portion taken,
and shall continue in full force and effect as to the remainder of said
Premises, and the monthly rent shall be reduced proportionately; provided,
however, if the remainder of the Premises cannot be made tenantable for the
purposes for which Lessee has been using the Premises or if more than
twenty-five percent (25%) of the rentable square footage of the Premises
shall be so taken, then either party, by written notice to the other, given
at least thirty (30) days prior to the date that possession must be
surrendered to the public authority, may terminate this Lease effective as
of such surrender of possession. If any part of the building other than the
Premises shall be so taken so as to render in Lessor's opinion the
termination of this Lease beneficial to the remaining portion of the
building, Lessor shall have the right within sixty (60) days of said taking
to terminate this Lease upon thirty (30) days written notice to Lessee. In
the event of any taking, whether whole or partial, Lessor shall be entitled
to all awards, settlements, or compensation which may be given for the land
and buildings. Lessee shall have no claim against Lessor for the value of
any unexpired term of this Lease. Lessee shall have the right to seek an
independent and separate award from the condemning authority so long as
such award does not diminish the amount of the award payable to Lessor.
Lessee acknowledges that Lessor has disclosed to Lessee on or before the
signing of this Lease that Sound Transit has expressed an interest in
property owned by Lessor which may include the Premises and that Sound
Transit could acquire the Premises through condemnation or proceedings in
lieu of condemnation sometime within the first few years of this Lease.
20. INSOLVENCY. If Lessee shall be declared insolvent or bankrupt, or if
Lessee's leasehold interest herein shall be levied upon or seized under
writ of any court of law, or if a trustee, receiver or assignee be
appointed for the property of Lessee, whether under operation of State or
Federal statutes, then Lessor may, at its option, immediately, without
notice (notice being expressly waived), terminate this Lease and take
possession of said Premises.
21. DEFAULT AND RE-ENTRY. If Lessee fails to keep or perform any of the
covenants and agreements herein contained, then the same shall constitute a
breach hereof, and if Lessee has not remedied such breach within three (3)
days after written notice thereof from Lessor if the breach is non-payment
of rent or other charges, or within ten (10) days after written notice
thereof from Lessor in the event of the breach of any other covenant,
except that if the breach cannot reasonably be cured within such ten (10)
day period, then if Lessee fails to commence to cure within such ten (10)
day period and thereafter, diligently prosecute such cure to completion,
then Lessor may, at its option, without further notice or demand:
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A. Cure such breach for the account and at the expense of Lessee
(including entry upon the Premises to make repairs on behalf of the
Lessee where Lessee has failed to make such repairs as required under
this Lease) and such expense shall be deemed additional rent due on
the first of the following month; or
B. Re-enter the Premises, remove all persons therefrom, take possession
of the Premises and remove all personal property therein at Lessee's
risk and expense and (1) terminate this Lease, or (2) without
terminating the Lease or in any way affecting the rights and remedies
of Lessor or the obligations of Lessee, re-let the whole or any part
of the Premises as agent for Lessee, upon such terms and conditions as
Lessor may deem advisable. In either event, any moneys received from
Lessee and any deposit or other amounts held by Lessor may first be
applied by Lessor to any damages suffered by Lessor as a result of
such default, including without limitation, costs and expenses
incurred on re-entry and re-letting, any unamortized tenant
improvements and commissions, cleaning, necessary repairs, restoration
and alteration, and any commissions incurred on re-letting, and the
balance of such amounts may be applied toward payment of other sums
due to Lessor hereunder. In the event the Premises are re-let for
Lessee's account, Lessee shall pay to Lessor monthly any deficiency;
however, Lessor shall not be required to pay any excess to Lessee.
Upon termination of this Lease or of Lessee's right to possession,
Lessor has the right to recover from Lessee: (1) The worth of the
unpaid rent that had been earned at the time of such termination; (2)
The worth of the amount of the unpaid rent that would have been earned
after the date of such termination; and (3) Any other amount,
including court, attorney and collection costs, necessary to
compensate Lessor. "The Worth," as used in Section (1) is to be
calculated allowing interest at 18% per year (or, if applicable, at
such lower rate as may represent the highest legal limit allowed in
the State of Washington). "The worth" as used for Section (2) is to be
computed by discounting the amount at the discount rate of the Federal
Reserve Bank of San Francisco at the time of termination. The above
remedies of Lessor are cumulative and in addition to any other
remedies now or hereafter allowed by law or elsewhere provided for in
this Lease.
22. REMOVAL OF PROPERTY. Any property of Lessee removed by Lessor in accordance
with Section 21 above may be stored by Lessor or may be deposited on any
area adjacent to the building at the sole risk and expense of Lessee and
without any further responsibility of Lessor, and Lessor may at its sole
discretion without or after removing said property, without obligation to
do so and without notice to Lessee, sell or dispose of the same at public
or private sale for the account of Lessee, in which event the proceeds
therefrom may be applied by Lessor upon any indebtedness due from Lessee to
Lessor. Lessee waives all claims for damages that may be caused by Lessor
re-entering the Premises and removing or disposing of said property as
herein provided.
23. COSTS AND ATTORNEYS' FEES. In the event either party shall commence legal
action to enforce any provision of this Lease, the court shall award to the
prevailing party all
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reasonable attorneys' fees and all costs incurred in connection therewith,
including fees and costs on appeal. Any action relating to this Lease shall
be brought in the County in which the Premises are located or, at Lessor's
election, in King County, Washington.
24. SUBROGATION WAIVER. Lessor and Lessee each herewith and hereby release and
relieve the other and waive its entire right of recovery against the other
for loss or damage arising out of or incident to the perils of fire,
explosion or any other perils described in the "all risk" insurance and the
events covered under the property insurance coverages required under this
Lease, whether due to the negligence of either party, their agents,
employees or otherwise. Each party shall obtain from its respective insurer
under each insurance policy that it maintains a waiver of all rights of
subrogation which the insurer may have against the other party for claims
that are released under this Section 24.
25. HOLDING OVER. If Lessee, with the express consent of Lessor, shall hold
over after the expiration of the term of this Lease, Lessee shall remain
bound by all the covenants and agreements herein, except that (a) the
tenancy shall be from month-to-month and (b) the monthly rent to be paid by
Lessee shall be determined by multiplying the monthly rent in effect
immediately preceding such expiration times 150%. If Lessee holds
possession of the Demised Premises after the expiration of the Lease
without the express written consent of Lessor, Lessee shall remain bound by
all the covenants and agreements herein, except that (a) the tenancy shall
be from month-to-month and (b) the monthly rent to be paid by Lessee shall
be the greater of twice the Monthly Minimum Rent in effect immediately
preceding such expiration or the total rent which other Lessees have agreed
to pay for the Premises during the period of such holdover, if Lessor has
leased all or part of the Premises to other Lessees effective upon the
expiration or termination of this Lease. Any such tenancy may be terminated
with twenty (20) days prior notice as provided by Washington State law.
In the event of any unauthorized holding over, Lessee shall also indemnify
and hold Lessor harmless from and against all liability, losses, claims,
causes of action, damages, costs and expenses (including without limitation
attorney fees) resulting from Lessee's failure to surrender the Premises,
including without limitation claims made by succeeding Lessees resulting
from Lessee's failure to surrender the Premises.
SURVIVAL OF LESSEE'S OBLIGATIONS. Lessee's obligations under this Section
25 shall survive the expiration or termination of this Lease.
26. SUBORDINATION AND ATTORNMENT; MORTGAGE PROTECTION.
A. SUBORDINATION-NOTICE TO MORTGAGEE. At the request of Lessor, Lessee
shall promptly execute, acknowledge and deliver, all instruments which
may be required to subordinate this Lease to any existing or future
mortgages, deeds of trust and/or other security documents on or
encumbering the Premises or on the leasehold interest held by Lessor,
and to any extensions, renewals, or replacements thereof, provided
that the mortgagee or beneficiary, as the case
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may be, shall agree to recognize this Lease in the event of
foreclosure if Lessee is not in material default at such time.
B. LESSEE'S CERTIFICATE. Lessee shall at any time and from time to time
within five (5) days after written notice from Lessor execute,
acknowledge and deliver to Lessor a statement in writing (a)
certifying that this Lease is unmodified and in full force and effect
(or, if modified, stating the nature of such modification and
certifying that this Lease as so modified is in full force and
effect), and the date to which the rental and other charges are paid
in advance, if any; and (b) acknowledging that there are not, to
Lessee's knowledge, any uncured defaults on the part of the Lessor or
Lessee hereunder, or specifying such defaults if any are claimed; and
(c) setting forth the date of commencement of rents and expiration of
the Lease Term hereof, and, (d) such other information as the Lessor
shall reasonably require. Any such statement may be relied upon by any
prospective purchaser or encumbrancer of all or any portion of the
Premises of which the Premises are a part.
C. MORTGAGEE PROTECTION CLAUSE. Lessee agrees to notify any mortgagee
and/or trust deed holders, by registered mail, with a copy of any
notice of default served upon the Lessor, provided that prior to such
notice Lessee has been notified in writing (by way of Notice of
Assignment of Rents and Lease, or otherwise) of the addresses of such
mortgagees and/or trust deed holders. Lessee further agrees that if
Lessor shall have failed to cure such default, then the mortgagees
and/or trust deed holders have thirty (30) days within which to cure
such default or if such default cannot be cured within that time, then
such additional times as may be necessary if within such thirty (30)
days any mortgagee and/or trust deed holder has commenced and is
diligently pursuing the remedies necessary to cure such default
(including but not limited to commencement of foreclosure proceedings
if necessary to affect such cure), in which event this Lease shall not
be terminated if such remedies are being so diligently pursued.
27. SURRENDER OF POSSESSION. Lessee shall, prior to the termination of this
Lease or of Lessee's right to possession, remove from the Premises all
personal property which Lessee is entitled to remove and those alterations,
additions, improvements or signs which may be required by Lessor to be
removed, pursuant to Sections 13 and 15 above, and shall repair or pay for
all damage to the Premises caused by such removal. All such property
remaining and every interest of Lessee in the same shall be conclusively
presumed to have been conveyed by Lessee to Lessor under this Lease as a
bill of sale, without compensation, allowance, or credit to Lessee. Lessee
shall upon termination of this Lease or of Lessee's right of possession,
deliver all keys to Lessor and peacefully quit and surrender the Premises
without notice, neat and clean, and in as good condition as when Lessee
took possession, except for reasonable wear and tear as determined by
Lessor and except for damage by casualty or condemnation.
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28. LATE PAYMENT AND INTEREST. If any amount due from Lessee is not received in
the office of Lessor on or before the third (3rd) day following the date
upon which such amount is due and payable, a late charge of five percent
(5%) of said amount shall become immediately due and payable, which late
charge Lessor and Lessee agree represents a fair and reasonable estimate of
the processing and accounting costs that Lessor will incur by reason of
such late payment. All past due amounts owing to Lessor under this Lease,
including rent, shall be assessed interest at an annual percentage rate of
eighteen percent (18%) from the date due until paid.
29. NOTICE. Any notice, communication or remittance required or permitted by
this Lease by either party to the other shall be deemed given, served or
delivered, in writing, delivered personally or by courier or by telephonic
facsimile transmission with automatic confirmation, addressed to the Lessor
at the address specified for the payment of rent under paragraph 3 of this
Lease or to Lessee at the Premises or to such other address as either party
may designate to the other in writing from time to time.
30. NO WAIVER OF COVENANTS. Time is of the essence of this Lease. Any waiver by
either party of any breach hereof by the other shall not be considered a
waiver of any future similar or other breach.
31. ENTIRE AGREEMENT. It is expressly understood and agreed by Lessor and
Lessee that there are no promises, agreements, conditions, understandings,
inducements, warranties, or representations, oral or written, express or
implied, between them, other than as herein set forth and that this Lease
shall not be modified in any manner except by an instrument in writing
executed by the parties.
32. BINDING ON HEIRS, SUCCESSORS AND ASSIGNS. The covenants and agreements of
this Lease shall be binding upon the heirs, executors, administrators,
successors and assigns of both parties hereto, except as hereinabove
provided.
33. LESSOR'S ASSIGNMENT. It is fully understood that Lessor shall have the full
right to assign this Lease, without any notice to Lessee, thereby relieving
Lessor from all and any liabilities; provided however, that the assignee
assumes all Lessor's responsibilities as set forth in this Lease.
34. ENVIRONMENTAL. See Rider One attached and incorporated into this Lease by
this reference.
35. BROKERS; AGENCY DISCLOSURE; BROKERAGE RELATIONSHIPS.
A. PAYMENT OF BROKERS. Lessor shall pay the commissions due those real
estate brokers or agents named below pursuant to separate written
agreements. If Lessee has dealt with any other person or real estate
broker with respect to leasing or renting space in the Building,
Lessee shall be solely responsible for the payment of any fee due said
person or firm and Lessee shall hold Lessor free
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and harmless against any liability in respect thereto, including
attorney's fees and costs.
B. AGENCY DISCLOSURE. At the signing of this Lease Agreement, Chris Corr
and Dick Fosness, of Kidder Mathews and Segner, represented both
Lessor and Lessee. Each party signing this document confirms that the
prior oral and/or written disclosure of agency was provided to him/her
in this transaction. (As required by WAC 308-124D-040).
36. FORCE MAJEURE. Lessor shall have no liability to Lessee on account of the
following acts of "force majeure," which shall include (a) the inability of
Lessor to fulfill, or delay in fulfilling, any of Lessor's obligations
under this Lease by reason of strike, lockout, other labor trouble, dispute
or disturbance; (b) governmental regulation, moratorium, action, inaction,
preemption or priorities or other controls, including delays in receipt of
permits; (c) shortages of fuel, supplies or labor; (d) any failure or
defect in the supply, quantity or character of electricity or water
furnished to the Premises by reason of any requirement, act or omission of
the public utility or others furnishing the Building with electricity or
water; or (e) for any other reason, whether similar or dissimilar to the
above, or for act of God, beyond Lessor's reasonable control. If this Lease
specifies a time period for performance of an obligation of Lessor, that
time period shall be extended by the period of any delay in Lessor's
performance caused by any of the events of force majeure described herein.
37. LIMITATION OF LIABILITY. The recourse of Lessee to recover any claim
against Lessor arising under this Lease shall be limited to Lessor's
interest in the Building and to the rents, issues and profits from the
Building. Lessee waives any and all recourse for any such liability against
Lessor's members, partners, shareholders, trustees or beneficiaries, or any
property or assets of Lessor other than the Building.
38. EXHIBITS. The following exhibits or riders are made a part of this Lease
and are incorporated herein by reference:
Rider One - Environmental
Exhibit A - Premises
Exhibit B - Legal Description
Exhibit C - Rules and Regulations
39. OPTION TO RENEW. Provided Lessee has not been in default of any term or
condition of the Lease beyond any applicable cure period, Lessee shall have
the Option to Renew this Lease on all of the terms and conditions contained
in this Lease, except Monthly Minimum Rent for two consecutive terms of
five years each ("Extended Term") following expiration of the Initial Term.
The Monthly Minimum Rent for the Extended Term shall be negotiated. Lessee
shall notify Lessor of its intent to exercise this Option to Renew at least
than twelve (12) months prior to the expiration of the Initial Term or the
first Extended Term, as applicable. Upon receipt of Lessee's notice to
extend,
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Lessor shall provide Lessee notice stating the rental rate it would be
willing to accept for the extended term (the "Lessor's Notice Rate").
Lessee shall have ten (10) days after receipt of Lessor's Notice Rate to
accept or reject such rate. In the event Lessee rejects the Lessor's Notice
Rate such rejection shall state the rate that Lessee would be willing to
pay for the extended term (the "Lessee's Notice Rate"). Within two (2) days
thereafter each party shall select an appraiser and the two appraisers
shall within ten (10) days appoint a third appraiser (the "Determining
Appraiser"). The Determining Appraiser shall make an independent
determination of whether the Lessor's Notice Rate or the Lessee's Notice
Rate represents the correct Market Rent for the renewal term as of the
commencement date, without reduction for concessions and including any
market escalations then in effect. "Market Rent" shall mean the rent
obtained for comparable space for a comparable term in comparable buildings
in the geographic area in which the building is located and comparable
space shall mean similar sized space in similar condition. The Determining
Appraiser will be instructed that it must chose either the Lessor's Notice
Rate or the Lessee's Notice Rate and is not permitted to select any other
rate. Such determination of Market Rent shall be made within thirty (30)
days of selection of the Determining Appraiser. Each party shall be bound
by this determination. All appraisal costs will be paid by the party whose
suggested rate was not selected as the Market Rate by the Determining
Appraiser. The market rent determination established pursuant to this
paragraph will be binding upon the parties and the Lease shall be extended
for the additional term unless the parties mutually agree to nullify the
lease extension and allow the Lease to terminate on its originally
scheduled termination date.
LESSOR: LESSEE:
KENT CENTRAL, LLC TULLY'S COFFEE CORPORATION
By: Larry R. Benaroya By:_______________________
Its: Manager Its:_______________________
Date:__________________ Date:_____________________
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RIDER ONE
EMISSIONS; STORAGE, USE AND DISPOSAL OF WASTE
a. EMISSIONS. Lessee shall not (i) discharge, emit or permit to be discharged
or emitted, any liquid, solid or gaseous matter, or any combination
thereof, into the atmosphere, the ground or any body of water, which does
or may pollute or contaminate the same, or does or may adversely affect the
health or safety of persons, or the use or enjoyment of the Premises; nor
(ii) transmit, receive or permit to be transmitted or received, any
electromagnetic, microwave or other radiation in, on or about the Premises.
b. STORAGE. If, with or without violation of this Lease, Lessee possesses at
the Premises any matter described in Section A above or any Hazardous
Substances (as defined below), Lessee shall store the same in appropriate
leak proof containers and/or areas which comply with all laws and all
prudent practices.
c. DISPOSAL OF WASTE. Lessee shall not keep any trash, garbage, waste or other
refuse on the Premises except in sanitary containers and shall regularly
and frequently remove same from the Premises. Lessee shall keep all such
containers in a clean and sanitary condition. Lessee shall properly dispose
of all sanitary sewage and shall not use the sewage system for the disposal
of anything except sanitary sewage, nor in excess of capacity. Lessee shall
not cause any obstruction in the sewage disposal system.
d. COMPLIANCE OF LAW. Notwithstanding any other provision in the Lease to the
contrary, Lessee shall comply with all Laws in complying with its
obligations under this Lease, and in particular, Laws relating to the
storage, use and disposal of Hazardous Substances (as defined below).
e. INDEMNIFICATION FOR BREACH. Lessee shall defend, indemnify and hold Lessor,
the Project and the holder of a trust deed or mortgage on the Project
harmless from any loss, claim, liability or expense, including, without
limitation, attorneys fees and costs, at trial and/or on appeal and review,
arising out of or in connection with its failure to observe or comply with
the provisions of this Rider. This indemnity shall survive the expiration
or earlier termination of the term of the Lease or the termination of
Lessee's right of possession and be fully enforceable thereafter.
f. INDEMNIFICATION REGARDING HAZARDOUS SUBSTANCES. In addition to the
indemnity obligations contained elsewhere herein, Lessee shall indemnify,
defend and hold harmless Lessor, the Premises, the Project, and the holder
of a trust deed or mortgage on the Project, from and against all claims,
losses, damages, monitoring costs, response costs, liabilities, and other
costs expenses caused by, arising out of, or in connection with, the
generation, release, handling, storage, discharge, transportation, deposit
or disposal in, on, under or about the Premises by Lessee or any of
Lessee's agents of the following (collectively referred to as "Hazardous
Substances"): hazardous materials, hazardous substances, toxic wastes,
toxic substances, pollutants, petroleum products, underground tanks, oils,
pollution, asbestos, PCB'S, radioactive materials, or
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contaminants, as those terms are commonly used or as defined by federal,
state, and/or local law or regulation related to protection of health or
the environment as any of same may be amended from time to time, and/or by
any rules and regulations promulgated thereunder. Such damages, costs,
liability and expenses shall include such as are claimed by any regulating
and/or administering agency, any ground lessor or master lessor of the
Project, the holder of any Mortgage or Deed of Trust on the Project, and/or
any successor of the Lessor named herein. This indemnity shall include (i)
claims of third parties, including governmental agencies, for damages,
fines, penalties, response costs, monitoring costs, injunctive or other
relief, (ii) the costs, expenses or losses resulting from any injunctive
relief, including preliminary or temporary injunctive relief; (iii) the
expenses, including fees of attorneys and experts, of report the existence
of Hazardous Substances to an agency of the State of which the Premises is
located or of the United States as required by applicable laws and
regulations; and (iv) any and all expenses or obligations, including
attorney's fees, incurred at, before and after any administrational
proceeding, trial, appeal and review. This indemnity shall survive the
expiration or earlier termination of the term of the Lease or the
termination of Lessee's right of possession and shall remain fully
enforceable thereafter.
g. INFORMATION. Lessee shall give prior written notice to Lessor of any use,
whether incidental or otherwise, of Hazardous Substances on the Premises,
and shall immediately deliver to Lessor a copy of any notice of any
violation of any Law with respect to such use. Lessee shall also provide to
Lessor, upon request, with any and all information regarding Hazardous
Substances in the Premises, including contemporaneous copies of all filings
and reports to governmental entities, and any other information requested
by Lessor. In the event of any accident, spill or other incident involving
Hazardous Substances, Lessee shall immediately report the same to Lessor
and supply Lessor with all information and reports with respect to the
same. All information described herein shall be provided to Lessor
regardless of any claim by Lessee that it is confidential or privileged.
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EXHIBIT B
LEGAL DESCRIPTION
PARCEL 2:
Lots 1 through 6, Block 233, Seattle Tidelands, in King County, Washington, as
shown on the official maps on file in the Office of the Commissioner of Public
Lands at Olympia, Washington;
TOGETHER WITH Lots 1 through 12, Block 17, Hanford's Addition to South Seattle,
according to the plat thereof recorded in Volume 1 of Plats, page 37, in King
County, Washington;
TOGETHER WITH ALL of vacated alley in said Block 17, as vacated under City of
Seattle Ordinance No. 38522;
TOGETHER WITH Lots 1 through 12, Block 16, Hanford's Addition to South Seattle,
according to the plat thereof recorded in Volume 1 of Plats, page 37, in King
County, Washington;
TOGETHER WITH ALL of vacated alley in said Blocks 16, as vacated under City of
Seattle Ordinance No. 38521;
TOGETHER WITH ALL of vacated South Winthrop Street between said Blocks 16 and
17, as vacated under City of Seattle Ordinance No. 38522;
TOGETHER WITH that portion of vacated South Hanford Street adjoining Block 16,
as vacated under City of Seattle Ordinance No. 69571 and would attach by
operation of law;
TOGETHER WITH that portion of vacated Tenth Avenue South, as vacated under City
of Seattle Ordinance No. 95836, and described as follows:
BEGINNING at the intersection of the production south of the East line of Block
16 of said Plat of Hanford's Addition to South Seattle and the Westerly
right-of-way line of the Seattle Freeway (Primary State Highway No. 1);
thence Northerly along said Westerly right-of-way line to the production east of
the North line of Lot 12, Block 17 of said plat; thence West along said produced
line to the East line of Block 17; thence South along said East line and the
same produced and along the East line of Block 16 to the POINT OF BEGINNING;
EXCEPT from the above described Parcel 2 any portion lying within the Northern
Pacific Railway Company right-of-way; EXCEPT that portion as conveyed to the
State of Washington for Primary State Highway No. 1 by deed recorded under
Recording No. 6199964.
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EXHIBIT C
RULES AND REGULATIONS
1. Except as specifically provided in the Lease to which these Rules and
Regulations are attached, no sign, placard, picture, advertisement, name or
notice shall be installed or displayed on any part of the outside or inside
of the Building or Project without the prior written consent of Lessor.
Lessor shall have the right to remove, at Lessee's expense and without
notice, any sign installed or displayed in violation of this rule. All
approved signs or lettering on doors and walls shall be printed, painted,
affixed or inscribed at the expense of Lessee by a person approved by
Lessor.
2. If Lessor objects in writing to any objects attached to or used in
connection with any window or door of the Premises, or placed on any
windowsill, which is visible from the exterior of the Premises, Lessee
shall immediately discontinue such use. Lessee shall not place anything
against or near glass partitions or doors or windows which may appear
unsightly from outside the Premises.
3. Lessee shall not obstruct any sidewalks, exits, entrances, or stairways of
the Project. The exits, entrances, and stairways are not open to the
general public, but are open, subject to reasonable regulations, to
Lessee's business invitees. No Lessee and no employee or invitee of any
Lessee shall go upon the roof(s) of the Project except for Lessee's
mechanical contractor to access the HVAC equipment. Lessee's choice of a
contractor is subject to the reasonable approval of Lessor.
4. Lessor will furnish Lessee, free of charge, with two keys to each door lock
in the Premises. Lessor may make a reasonable charge for any additional
keys. Lessee shall not alter any lock or install a new additional lock or
bolt on any door of its Premises without Lessor's prior consent, which will
not be unreasonably withheld. In the event of such an alteration or
installation, Lessee will promptly deliver a copy of any new keys to
Lessor. Lessee, upon the termination of its tenancy, shall deliver to
Lessor the keys of all doors which have been furnished to Lessee, and in
the event of loss of any keys so furnished shall pay Lessor therefor.
5. If Lessee requires telegraphic, telephonic, burglar alarm or similar
services, it shall first obtain, and comply with, Lessor's instructions in
their installation.
6. Lessee shall not place a load upon any floor of the Premises which exceeds
the load per square foot which such floor was designed to carry and which
is allowed by Law. Heavy objects shall, if considered necessary by Lessor,
stand on such platforms as determined by Lessor to be necessary to properly
distribute the weight, which platforms shall be provided at Lessee's
expense. Equipment belonging to Lessee which cause noise or vibration that
may be transmitted to the structure of the Building or to any space therein
shall be placed and maintained by Lessee, at Lessee's expense, on vibration
eliminators, or other devices sufficient to eliminate noise or vibration.
The persons employed to move such equipment in or out of the Building must
be acceptable
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to Lessor. Lessor will not be responsible for loss of, or damage to, any
such equipment or other property from any cause, and all damage done to the
building by maintaining or moving such equipment or other property shall be
repaired at the expense of Lessee.
7. Lessee shall not use or keep in the Premises any kerosene, gasoline or
inflammable or combustible fluid or material other than those limited
quantities necessary for the operation or maintenance of Lessee's
equipment. Lessee shall not use or permit to be used in the Premises any
foul or noxious gas or substance, or permit or allow the Premises to be
occupied or used in manner offensive or objectionable to Lessor or other
occupants of the building by reason of noise, odors or vibrations, nor
shall Lessee bring into or keep in or about the Premises any animals.
8. Lessee shall not use any method of heating or air conditioning other than
that supplied by Lessor.
9. Lessee shall not waste water and agrees to cooperate fully with Lessor to
assure the most effective operation of the Building and to comply with any
governmental energy-saving rules, laws or regulations of which Lessee has
actual notice.
10. Lessor reserves the right, exercisable without notice and without liability
to Lessee, to change the name and street address of the Building.
11. Lessee shall entirely shut off any water faucets or other water apparatus,
and adjustable electricity, gas or air outlets before Lessee and its
employees leave the Premises. Lessee shall be responsible for any damage or
injuries sustained by other Lessees or occupants of the Building or by
Lessor for noncompliance with this rule.
12. The toilet rooms, toilets, urinals, wash bowls and other apparatus shall
not be used for any purpose other than that for which they were constructed
and no foreign substance of any kind whatsoever shall be thrown therein.
13. Lessee shall not make any room-to-room solicitation of business from other
Lessees in the Project. Lessee shall not use the Premises for any business
or activity other than that specifically provided for in Lessee's Lease.
Canvassing, soliciting and distribution of handbills or any other written
material, and peddling in the Project are prohibited, and Lessee shall
cooperate to prevent such activities.
14. Lessee shall not install any radio or television antenna, loudspeaker or
other devices on the roof(s) or exterior walls of the Building or Project.
Lessee shall not interfere with radio or television broadcasting or
reception from or in the Project or elsewhere.
15. Lessee shall not in any way deface the Premises or any part thereof, except
in accordance with the provisions of the Lease pertaining to alterations.
Lessor reserves the right to direct electricians as to where and how
telephone and telegraph wires are to be introduced to the Premises. Lessee
shall not cut or bore holes for wires. Lessee
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shall not affix any floor covering to the floor of the Premises in any
manner except as approved by Lessor. Lessee shall repair any damage
resulting from noncompliance with this rule.
16. Lessee shall not install, maintain or operate upon the Premises any vending
machines other than those to be used by employees of Lessee without the
written consent of Lessor.
17. Lessor reserves the right to exclude or expel from the Project any person
who, in Lessors' judgment, is intoxicated or under the influence of liquor
or drugs or who is in violation of any of the Rules and Regulations of the
Building.
18. The Premises shall not be used for lodging, nor shall the Premises be used
for any improper, immoral or objectionable purpose. No cooking shall be
done or permitted on the Premises without Lessor's consent, except that
used by Lessee of Underwriters' Laboratory approved equipment for brewing
coffee, tea, hot chocolate and similar beverages or use of microwave ovens
for employee use shall be permitted, provided that such equipment and use
is in accordance with all applicable Laws.
19. Lessee shall comply with all safety, fire protection and evacuation
procedures and regulations established by Lessor or any governmental
agency.
20. Lessee assumes any and all responsibility for protecting its Premises from
theft, robbery and pilferage, which includes keeping doors locked and other
means of entry to the Premises closed.
21. Employees of Lessor shall not be required to perform any work or do
anything outside of their regular duties unless under special instructions
from Lessor.
22. Lessor may waive any one or more of these Rules and Regulations for the
benefit of Lessee or any other Lessee, but no such waiver by Lessor shall
be construed as a waiver of such Rules and Regulations in favor of Lessee
or any other Lessee, nor prevent Lessor from thereafter enforcing any such
Rules and Regulations against any or all of the Lessees of the Project.
23. These Rules and Regulations are in addition to, and shall not be construed
to in any way modify or amend, in whole or in part, the terms, covenants,
agreements and conditions of the Lease.
24. Lessor reserves the right to make such other and reasonable Rules and
Regulations as, in its judgment, may from time to time be needed for safety
and security, for care and cleanliness of the Project and for the
preservation of good order therein. Lessee agrees to abide by all such
Rules and Regulations hereinabove stated and any additional rules and
regulations which are adopted.
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25. Lessee shall be responsible for the observance of all of the foregoing
rules by Lessee's employees, agents, clients, customers, invitees and
guests.
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FIRST LEASE AMENDMENT
BETWEEN
KENT CENTRAL, LLC
AND
TULLY'S COFFEE CORPORATION.
This First Lease Amendment dated the 17th day of December, 1999 is attached
to and made part of that certain Lease dated August 16, 1999, (the "Lease") by
and between Kent Central, LLC., a Washington limited liability company,
hereinafter called Lessor ("Lessor"), and Tully's Coffee Corporation., a
Washington corporation, hereinafter called the Lessee ("Lessee"), covering the
Premises located at 3100 Airport Way South, in Seattle, Washington (the
"Premises"). The Premises are more particularly described in the Lease.
The terms used herein shall have the same definitions as set forth in the
Lease.
In consideration of the mutual covenants and promises contained in this
First Lease Amendment and the Lease, Lessor and Lessee agree as follows:
1. SECTION 1, "PREMISES", of the Lease is hereby amended to modify the
definition of the Premises by adding the Building and the parcel of land located
immediately south of and adjacent to the original Premises. The additional
Premises is more particularly depicted on Exhibit A attached hereto and is
designated the "Expansion Premises".
2. SECTION 3, "RENT": The Rent as provided in Section 3 of the Lease is
hereby modified to include additional Rent attributable to the Expansion Space
in the following amounts:
MONTHS ADDITIONAL BASE RENT TOTAL BASE RENT
------ -------------------- ---------------
1 through 12 $10,000 per month $46,033 per month
13 through 60 $15,000 per month $51,033 per month
61 through 120 $17,250 per month $58,688 per month
3. RIGHT TO CANCEL: Provided Lessee has not been in default of any term
or condition of this Lease, Lessee shall have the one time Right to terminate
the portion of this Lease that relates to the Expansion Space effective at the
end of the first year of the Lease Term. Lessee shall provide Lessor with not
less than one hundred fifty (150) days prior written notice of the exercise of
this Right to Cancel (Right to Cancel Notice
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to Lessor). In the event that Lessee exercises the right to cancel provided in
this paragraph, then effective on the first day of the second year of the Lease
term, the definition of the Premises and the Rent will be as originally provided
in the Lease and the terms of this First Lease Amendment will thereafter no
longer apply.
Except as otherwise modified by the terms of this First Lease Amendment,
all other terms and conditions of the Lease remain unchanged and in full force
and effect as to both the initial Premises and the Expansion Space.
LESSOR: LESSEE:
KENT CENTRAL, LLC TULLY'S COFFEE CORPORATION
------------------------------- -------------------------------
By: Larry R. Benaroya By:
Its: Manager Its:
Date: Date:
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SECOND LEASE AMENDMENT
BETWEEN
KENT CENTRAL, LLC
AND
TULLY'S COFFEE CORPORATION.
This Second Lease Amendment dated the 6th day of June, 2000 is attached to
and made part of that certain Lease dated August 16, 1999, as amended by that
certain First Lease Amendment dated December 17, 1999 (hereinafter collectively
referred to as the "Lease") by and between Kent Central, LLC, a Washington
limited liability company, hereinafter called Lessor ("Lessor"), and Tully's
Coffee Corporation, a Washington corporation, hereinafter called the Lessee
("Lessee"), covering the Premises located at 3100 Airport Way South, in Seattle,
Washington (the "Premises"). The Premises are more particularly described in the
Lease as amended.
The terms used herein shall have the same definitions as set forth in the
Lease.
In consideration of the mutual covenants and promises contained in this
Second Lease Amendment and the Lease, Lessor and Lessee agree as follows:
1. SECTION 2, "TERM": The Commencement Date of the Lease is hereby
established as May 15, 2000.
2. SECTION 3, "RENT": The Base Rent as provided in Section 3 of the Lease
and as modified in the First Lease Amendment is hereby modified to reduce the
Base Rent obligation of Lessee during the first two months of the Lease Term
from $46,033 per month to $10,000 per month.
3. SECTION 16, INSURANCE: Subsection C of Section 16 is hereby amended to
cause the insurance coverage referenced therein to be provided only at Lessor's
option.
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Except as otherwise modified by the terms of this Second Lease Amendment,
all other terms and conditions of the Lease remain unchanged and in full force
and effect as to both the initial Premises
LESSOR: LESSEE:
KENT CENTRAL, LLC TULLY'S COFFEE CORPORATION
------------------------------- -------------------------------
By: Larry R. Benaroya By:
Its: Manager Its:
Date: Date:
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