Exhibit 10.7(g)
SIXTH AMENDMENT TO LEASE
AGREEMENT
THIS SIXTH AMENDMENT TO LEASE
AGREEMENT is made and entered into as of the 26th day of June,
2003, between RAINIER COMMONS, LLC, a Washington limited liability
company (“Lessor”), and TULLY’S COFFEE
CORPORATION, a Washington corporation
(“Lessee”).
RECITALS
A. Lessor has entered into a
written agreement with Kent Central, LLC (“KCL”) to
purchase the real property located at 3100 Airport Way South,
Seattle, Washington, which is legally described as set forth on the
attached Exhibit A (the “Property”). Pursuant to
that certain Lease Agreement dated August 16, 1999, entered
into between KCL and Lessee, as modified by those certain
amendments described in the attached Exhibit B
(collectively, the “Lease”), KCL agreed to lease to
Lessee certain premises as further described in the Lease (the
“Original Lease Premises”).
B. If and when Lessor closes
the purchase of the Property from KCL, Lessor will assume all of
KCL’s rights and obligations under the Lease.
C. Subject to the
Lessor’s acquisition of fee title to the Property, Lessor and
Lessee have agreed to make certain modifications to the Lease on
the terms and conditions set forth in this Sixth Amendment to Lease
Agreement (“Sixth Amendment”).
AGREEMENT
NOW, THEREFORE, in consideration of
foregoing and the promises made below, and other good and valuable
consideration, the parties agree as follows:
1. Effective
Date. This Sixth
Amendment shall become effective upon the date (the
“Effective Date”) upon which Lessor unconditionally
acquires fee title to the Property from KCL. If Lessor does not
unconditionally acquire fee title to the Property from KCL on or
before August 31, 2003, this Sixth Amendment shall be null and
void and of no further effect.
2. Amendments.
Effective as of the Effective
Date, the Lease is hereby amended as follows:
2.1 Premises. Section 1 of
the Lease is hereby amended to as follows: (a) Lessee and
Lessor have agreed that Lessee shall occupy the spaces within the
Property identified on Exhibit C, comprising approximately 80,115
square feet (the “Tully’s Premises”) and
(b) the term “Premises” as used in the Lease will
be limited to the Tully’s Premises as determined above.
Without limiting the foregoing, the Tully’s Premises shall
include exclusive and unrestricted access to and use of the
existing loading dock and all other areas included in the
Tully’s Premises. The parking spaces reserved for Lessee, the
loading dock, and any other spaces outside of the buildings
comprising the Property that may be used exclusively by Lessee or
in common with the New Tenants (as defined below), and the
additional storage space as set
1
forth in the next paragraph are not considered
in the determination of the square feet of the Tully’s
Premises.
In addition to the Tully’s
Premises, Lessor shall make available to Lessee additional storage
space within the Original Lease Premises (but not included within
the Tully’s Premises). The maximum total amount of additional
storage space which may be provided to Lessee under this section at
any time is 5,000 square feet. The additional storage space shall
be located at Lessor’s discretion and may be in more than one
location in the Property. The additional storage space shall be
subject to reasonable security and shall be suitable for dry
storage of equipment, records or merchandise. Lessor shall have no
obligation to install any tenant improvements in the additional
storage space, or to perform any maintenance services for the
additional storage space, and may change the location of the
additional storage space from time to time. Lessee shall give
Lessor a written request for such additional storage space not less
than 30 days prior to its anticipated requirement. There shall be
no additional Base Rent or Monthly Operating Expense paid by Lessee
in connection with the additional storage space, and Lessee shall
not be entitled to any reduction in Base Rent or Monthly Operating
Expense if Lessee does not use the additional storage space or if
the actual additional storage space used is less than 5,000 square
feet.
2.2 Rent.
Section 3 of the Lease is
hereby amended and restated to read as follows:
3. Rent. Lessee
covenants and agrees to pay Lessor rent in advance without offset
or deduction on or before the 1 st day of each month of the Lease
term in the amounts as follows:
|
|
|
|
|
|
|
|
Monthly
Base
Rent
|
|
(from date of this Sixth Amendment until
December 31, 2003)
|
|
$
|
51,033
|
|
January 1, 2004 through May 14,
2005
|
|
$
|
43,378
|
|
May 15, 2005 through May 14,
2010
|
|
$
|
49,885
|
2.3 Monthly Operating
Expense Adjustments. Section 9 of the Lease is hereby amended
to provided that, commencing on January 1, 2004 and continuing
through the end of the Lease term, Lessee will pay 50% of the
actual Monthly Operating Expenses for the Property as its pro rata
share. From the Effective Date to January 1, 2004 Lessee shall
continue to pay 100% of the actual Monthly Operating Expenses for
the Property.
2.4 Utilities.
Section 8 of the Lease is
hereby amended to provide that the utilities for the Tully’s
Premises shall be separately metered, and that for utilities and
services not subject to metering, such as garbage collection,
separate service and billings shall be established with the service
provider. If separate metering (or separate service and billings,
as
2
applicable) is not reasonably practicable, the
parties shall negotiate an appropriate method to allocate such
costs. If separate metering (or separate service and billings, as
applicable) is not reasonably practicable and the parties are
unable to agree upon an appropriate method to allocate such costs,
and during the time that the parties may be discussing the
allocation method and/or until separate metering (or separate
service and billings, as applicable) is accomplished if at all,
Tully’s shall pay an amount equal to the average monthly
usage in the applicable units of measure over the two (2) year
period prior to the Effective Date, priced at the actual average
current cost per unit set forth on the service provider’s
billing, but shall not pay in any case more that the total actual
cost set forth on the service provider’s billing. Any costs
related to establishment of separate metering shall be considered
to be costs of Lessor Work.
2.5 Termination of Right to
Require Lessee to Vacate Premises in 150 Days.
The parties agree that the
provisions granting KCL a right to terminate the Lease and/or
require Lessee to vacate the Original Lease Premises upon 150 days
notice contained in (i) that certain letter dated
March 19, 2002, executed by KCL and Lessee, and
(ii) Section 2 of the Fifth Lease Amendment referred to
in Exhibit B are here are hereby terminated and that such
provisions shall be considered null and void and of no further
force and effect.
2.6 Impact of Lessor
Work. Lessor
expects to rehabilitate, remodel, develop, demolish, improve and
partition the portion of the Property that is not within the
Tully’s Premises (the “Available Space”) (the
“Lessor Work.”). Lessor hereby agrees that any and all
Lessor Work and any and all other development, demolition,
improvement, partitioning and remodeling of the Property undertaken
by Lessor or any of its agents shall not disturb Lessee’s use
and enjoyment of the Tully’s Premises nor negatively impact
Lessee’s security nor increase Lessee’s costs of
security in the Tully’s Premises. All Lessor Work shall be
performed in compliance with applicable codes, regulations and
laws. All Lessor Work shall be performed at no cost to
Lessee.
2.7 Signage.
Lessor agrees that Lessee
shall continue to have the right (but not the obligation) to
maintain in place the Tully’s green “T” on top of
the building where it is currently placed. In addition, Lessee
shall continue to have the right to maintain, use, replace and
update all other existing exterior signage that is currently
present on any of the building