Hawaii-Honolulu-1440 Kapiolani Boulevard Lease - Tosei Shoji Co. Ltd. and Cheap Tickets Inc.
THE COMMERCE TOWER
OFFICE LEASE
by and between
TOSEI SHOJI CO., LTD.,
a Japan corporation
and
CHEAP TICKETS, INC.,
a Hawaii corporation
<PAGE>
THE COMMERCE TOWER
OFFICE LEASE
THIS LEASE made this 2nd day of July, 1995, by and between TOSEI SHOJI
CO., LTD., a Japan corporation, whose principal place of business and post
office address in the State of Hawaii is at 1440 Kapiolani Boulevard, Suite
1000, Honolulu, Hawaii 96814 (the "Landlord"), and CHEAP TICKETS, INC., a Hawaii
corporation, whose principal place of business and post office address is at
_____________________________________________________________________________
______________________________________(the "Tenant");
W I T N E S S E T H:
- - - - - - - - - -
That Landlord, in consideration of the rent herein reserved and of the
covenants herein contained and on the part of Tenant to be observed and
performed and upon and subject to the terms and conditions hereinafter set
forth, does hereby lease unto Tenant, and Tenant does hereby lease from
Landlord, that certain office space (the "Premises") located in the building
known as The Commerce Tower (the "Building") located at 1440 Kapiolani
Boulevard, Honolulu, Hawaii. The Building shall include such other structures
as may now exist on the land on which the Building is located and the common
areas, improvements and facilities thereon or which may in the future be
constructed thereon (the "Property").
I. Specific Conditions of the Lease.
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The following subparagraphs constitute all of the specific conditions
of this Lease as referred to elsewhere in this Lease:
(A) Suite No. 800, consisting of approximately ten thousand one
hundred fifty-eight (10,158) rentable square feet of floor area
on the eighth floor as indicated on the floor plan attached
hereto as Exhibit "A" and made a part hereof for all purposes.
(B) (1) Tenant's Pro Rata Share of Operating Expenses (hereinafter
defined), subject to modification as provided in paragraph 9
of Section III of this Lease: Eight and two thousand three
hundred eighty-two ten thousandths percent (8.2382%).
(2) Tenant's Proportionate Share of Common Office Expenses
(hereinafter defined) of the Building, subject to
modification as provided in paragraph 9 of Section III of
this Lease: Eight and nine thousand nine hundred seventy-
three ten-thousandths percent (8.9973%).
(C) The term of this Lease shall be five (5) years and three (3)
months (the "Term"), commencing on the date on which Tenant's
improvements are completed (the "Commencement Date"), and ending
on midnight of the last day of the sixty-third (63rd) month (the
"Termination Date") following such Commencement Date, unless
sooner terminated as herein provided.
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(D) Monthly Base Rent shall be as shown below:
Period Monthly Base Rent
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(1) For the period commencing $9,751.68
on the Commencement Date
and ending on Termination Date.
Paragraphs (D)(2) through (D)(5) of Section I of this Lease, and all
references in this Lease to said paragraphs, are hereby deleted.
Landlord and Tenant agree that the Monthly Base Rent for the Premises
is conclusively established in the amounts set forth above,
irrespective of the actual number of square feet of floor area of the
Premises.
(E) (1) Tenant's share of initial estimated monthly Operating
Expenses as provided in paragraph 9 of Section III of this
Lease: $6,224.04.
(2) Tenant's share of initial estimated Common Office Expenses
as provided in paragraph 9 of Section III of this Lease:
$2,668.49.
(F) Amount of Security Deposit: $19,421.11
(G) Uses to be made of Premises: Travel related and general
administrative office.
(H) Tenant's address for notice if other than the Premises:
________________________________________________________________
(I) Number of parking stalls for automobiles to be rented to Tenant:
Three (3) reserved and seventeen (17) unreserved stalls for a
total of twenty (20) parking stalls at prevailing rates.
Two (2) of the three (3) reserved parking stalls shall be free
for the original term of this Lease.
Landlord shall make additional parking stalls available for
rental by Tenant at the Landlord's prevailing rates if additional
parking stalls are required by Tenant.
(J) Additional Terms and Conditions: Notwithstanding the provisions
set forth elsewhere in this Lease, Landlord and Tenant agree as
follows:
(1) Landlord's Improvements. Landlord, at Landlord's expense
shall provide building standard "turn-key" improvements
according to Exhibit "A".
In addition, Landlord shall provide:
(a) Basic quality millwork in the workroom, lunchroom and
computer room;
(b) Raised flooring in the supervisor's office;
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(c) Wood flooring in the reception area and two executive
offices;
(d) Three (3)-ton auxiliary air conditioning unit in the
computer room; and
(e) Four (4) additional VAV boxes for better air
conditioning capacity.
The final construction costs shall be approved by Landlord.
(2) Option to Renew. Tenant shall have and is hereby given the
option to extend the term of this Lease for an additional
five (5) year period upon all the same terms and conditions
as herein contained by serving notice thereof upon Landlord
at least six (6) months before the expiration of the
original Term. Upon the service of said notice, this Lease
shall be extended upon all its terms and conditions for such
additional five (5) year period without the necessity of the
execution of any further instrument or documents; provided,
however, that if at either the date of expiration of the
original Term of this Lease or the date upon which Tenant
exercises such option, Tenant is in default beyond any grace
period herein provided in the performance of any of the
terms or provisions of this Lease, any such exercise of
Tenant's option to so extend the term of this Lease shall be
and become null and void.
If Tenant exercises the option to extend the term of this
Lease as hereinabove provided, the Monthly Base Rent for the
five (5) year extension period shall be ninety-five (95%)
percent of the fair market rental charged for premises
similar to the Premises in the Kapiolani Business District;
provided, however, that the Monthly Base Rent shall in no
event be lower than the Monthly Base Rent established for
the last month of the period immediately preceding the
extended term.
(3) First Opportunity to Lease. If at any time during the term
of this Lease, any of the remaining spaces on the eighth
floor of the Building become available for lease, Landlord
shall notify Tenant of the availability of such space for
lease and the terms and conditions upon which Landlord
wishes to lease such space; provided, however, that the
expiration of the term for the demise of such space shall be
concurrent with the then remaining term of this Lease, the
monthly base rent per square foot for such space shall be
the same as the Monthly Base Rent then being charged under
this Lease, and Landlord shall provide building standard
"turn-key" improvements for such space equivalent to
Landlord's Improvements under this Lease; provided, further,
that notwithstanding anything contained herein to the
contrary, such space shall be occupied and used only by
Tenant, and Tenant shall not, for a period of six (6) months
from the commencement of the term of this Lease for such
additional space, sublease, assign or allow any other person
to occupy or use such space, or any portion thereof. Tenant
shall have the right within thirty (30) days after receipt
of Landlord's written notification to lease such space on
the
<PAGE>
terms and conditions set forth in Landlord's written
notification. If Tenant shall not so elect within said
thirty (30) day period, Landlord may then lease the premises
to any other person, on terms and conditions established by
Landlord in its sole discretion. Said terms and conditions
shall not necessarily be limited to the terms and conditions
set forth in Landlord's written notification.
(4) Tenant Moving Allowance. Landlord shall, on execution of
this Lease by Landlord and Tenant, provide Tenant with a
Tenant Moving Allowance of TWENTY-EIGHT THOUSAND AND NO/100
DOLLARS ($28,000.00) for moving to and establishing Tenant's
operations in the Premises and such Tenant Moving Allowance
shall be credited to Tenant's Monthly Base Rent due and
payable on the seventh (7th) consecutive month following the
Commencement Date and thereafter.
(5) Rent Abatement. Notwithstanding anything herein to the
contrary Landlord specifically agrees as follows:
(A) For the period commencing on the Commencement Date and
ending at midnight of the third (3rd) consecutive month
thereafter, the payment of Monthly Base Rent, Common Office
Expenses and Operating Expenses shall be abated.
(B) For the period commencing on the fourth (4th)
consecutive month following the Commencement Date and ending
on the sixth (6th) consecutive month thereafter, Monthly
Base Rent shall be abated; Tenant shall, however, be
required to pay Tenant's Proportionate Share of Common
Office Expenses and Tenant's Pro Rata Share of Common
Operating Expenses.
(6) Confidentiality. Tenant acknowledges that the economic
terms of this Lease, which include, but are not limited to
rent, tenant improvement allowances, Tenant's moving
allowance and improvements provided by the Landlord,
constitute information (collectively, the "Information")
which is either non-public, confidential or proprietary, or
a combination thereof. Tenant agrees that the Information
will be kept confidential and will not, without Landlord's
prior written consent, be disclosed by Tenant, in any manner
whatsoever, in whole or in part. Tenant agrees to transmit
the Information only to its insurance agents, attorneys,
employees and lenders who need to know the Information for
the purpose of evaluating this Lease and who are informed by
Tenant of the confidential nature of the Information.
Tenant will be responsible for any breach of this
confidentiality provision by its insurance agents,
attorneys, employees or lenders and will save, indemnify,
defend and hold Landlord harmless from and against any loss
or liability suffered by Landlord by reason of Tenant's
breach of this confidentiality provision.
(7) Paragraph 31 of Section III. of the Lease is hereby amended
to read as follows:
<PAGE>
31. Nonliability of Landlord. Landlord shall not be liable
------------------------
for any damage either to person or property sustained
by Tenant or by other persons due to the Building, or any
part thereof, or any appurtenances thereof, becoming out of
repair, or due to any act or neglect of any tenant or
occupant of said Building, or of any other person, except
where such damage is caused by the grossly negligent or
willful actions of Landlord. This provision shall apply
especially (but not exclusively) to damage caused by water,
steam, sewage, illuminating gas, sewer gas, utilities
shortages or stoppages, odors or termites or the negligent
accumulation of combustible materials, accessories and
supplies, and shall apply equally whether such damage is
caused by the act or neglect of other tenants, occupants or
janitors of said Building, or of any other persons, and
whether such damage is caused or occasioned by anything or
circumstances above-mentioned or referred to, or by any
other thing or circumstance, whether of a like or of a
wholly different nature; provided, however, that this
provision shall not apply to any damage caused by the
grossly negligent or willful actions of Landlord. If any
such damage shall be caused by any act or neglect of Tenant,
Landlord may, at its option, repair such damage, whether
caused to the Building, or to tenants thereof, and Tenant
shall thereupon reimburse Landlord for the total cost of
such damage both to the Building and/or to the tenants
thereof. Tenant further agrees that all personal property
upon the Premises shall be at the sole risk of Tenant and
that Landlord shall not be liable for any loss, injury or
damage thereto or theft thereof.
(8) Paragraphs 58 and 60 of Section III. of the Lease are hereby
deleted in their entirety.
(9) Notwithstanding the provisions of Exhibit "C" of the Lease,
Tenant shall have access to the Premises on a twenty-four
hour per day, seven-day per week basis.
In the event of any conflict between the provisions of this paragraph
(J) and any other provisions in Section I. (Specific Conditions), Section II.
(Exhibits) or Section III. (General Conditions), the provisions of this
paragraph (J) shall prevail.
II. Exhibits.
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The following exhibits, which are attached hereto, are hereby made a
part of this Lease:
(A) Exhibit "A": Floor Plan.
(B) Exhibit "B": Tenant's Construction Obligations.
(C) Exhibit "C": Rules and Regulations.
(D) Exhibit "D": Intentionally Omitted.
The General Conditions of Lease attached hereto as Section III of this
Lease, together with all exhibits, are made a part hereof for all purposes.
<PAGE>
As provided in paragraph 53 of Section III of this Lease, this Lease
constitutes the entire agreement between Landlord and Tenant and, without
limiting the generality of the foregoing, specifically supersedes any prior
Offer to Lease between Landlord and Tenant.
(J) (10) In the event Tenant notifies Landlord that Tenant needs the
remaining space or spaces on the eighth floor for purposes of expansion,
Landlord shall relocate the remaining tenant or tenants on the eighth floor at
the Landlord's expense within six months of said notification. Provided,
Landlord shall relocate the remaining tenants on the eighth floor only if
Landlord is able to relocate the remaining tenants to suitable office space in
the Premises.
(J) (11) In the event Tenant exercises its right to take the remaining
space or spaces on the eighth floor for purposes of expansion during the first
thirty (30) months of the Lease, Landlord shall provide building standard turn-
key improvements, monthly base rent shall be as specified in 1(D) (1) in the
Lease and the lease for the expansion space shall be co-terminus with the Lease.
In the event Tenant exercises its right to take the remaining
space or spaces on the eighth floor for purposes of expansion during
the last thirty-three (33) months of the Lease, Landlord shall provide
building standard turn-key improvements, monthly base rent shall be at
fair market value and the lease for the expansion space shall be co-
terminus with the Lease.
IN WITNESS WHEREOF, the parties hereto have executed this Lease as of
the date first above written.
TOSEI SHOJI CO., LTD.,
a Japan corporation
By /s/ Shigeo Hone
--------------------------------------
Shigeo Hone
Its Attorney-In-Fact
Landlord
CHEAP TICKETS, INC.,
a Hawaii corporation
By /s/ Michael J. Hartley
--------------------------------------
Its
Tenant
<PAGE>
III. GENERAL CONDITIONS OF OFFICE LEASE
1. Standard Services. Landlord shall furnish Tenant with electric
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current for lighting and normal use during normal business hours, common
restroom facilities and supplies, air conditioning during normal business hours,
janitorial service and refuse collection for Tenant's Premises five (5) days per
week, insurance for common areas, elevator service, reasonable window washing
for the exterior of the Building and lighting equipment replacement, guard
service for the Building, and common area maintenance. If any extraordinary or
additional property or services other than those required to be provided by
Landlord to Tenant under this Lease shall be provided by Landlord to Tenant at
the request of Tenant or for the benefit of Tenant, Tenant shall pay Landlord
for such extraordinary or additional property or services. Without limiting the
generality of the foregoing, if Tenant wishes to install nonstandard fixtures,
Tenant is responsible for providing replacement lamps.
2. Common Area Maintenance. Landlord will use reasonable efforts to
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maintain the public and common areas of the Building, such as stairs, lobbies,
corridors and restrooms, in good order and condition except for any damage
occasioned by the act or omission of Tenant or Tenant's employees or agents and
except as is otherwise provided herein.
3. Monthly Base Rent. For the period commencing on the Commencement
-----------------
Date to and including the Termination Date provided for in paragraph (C) of
Section I of this Lease, Tenant shall pay to Landlord, in lawful United States
currency, the Monthly Base Rent in the amounts set forth in paragraph (D) of
Section I of this Lease. Monthly Base Rent for the period, if applicable, set
forth in paragraphs (D)(4) and (5) of Section I of this Lease, shall be subject
to adjustment as provided in paragraph 4 of this Section III. Should the Term
commence or terminate on a day other than the first (1st) day of a calendar
month, then the Monthly Base Rent for that fractional month shall be calculated
by dividing the Monthly Base Rent by thirty (30) and multiplying that result by
the number of days remaining in said fractional month or multiplying that result
by the number of days from the beginning of the month up to and including the
date of termination, whichever the case may be. All payments of rent after the
first payment shall be paid at the office of Landlord, or such other place as
shall be designated in writing by Landlord, without notice on or before the
first (1st) day of each and every month during the Term or any extension
thereof.
4. Adjustment of Monthly Base Rent. The Monthly Base Rent for each
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of the periods, if any, indicated in paragraphs (D)(4) and (5) of Section I of
this Lease, shall be negotiated and determined by written agreement of Landlord
and Tenant; provided, however, that in the event that Landlord and Tenant shall
be unable to agree on such Monthly Base Rent for any such period at least three
(3) months prior to the date of commencement of such period, such Monthly Base
Rent shall be determined by a single appraiser in the event that the parties
agree upon the appointment of such an appraiser, otherwise by three (3)
impartial appraisers selected as follows: Landlord and Tenant shall each select
an appraiser and give written notice promptly thereof to the other party, and if
either party shall fail to do so within twenty (20) days after written notice
has been given to such party by the other of such selection, the party who has
named an appraiser shall have the right to apply to any judge of the Circuit
Court of the First Judicial Circuit of the State of Hawaii for the selection and
appointment of an appraiser for the party so failing to appoint an appraiser.
The two (2) appraisers thus appointed (in either manner) shall select and
appoint a third appraiser within fifteen (15) days after the second appraiser
shall have been appointed. In the event that said two (2) appraisers fail or
neglect to appoint the third of them, either party may, upon the expiration of
ten (10) days after the mailing of written notice to the other party, have the
third appraiser appointed by any judge of said court. All of said appraisers
shall be neutral and recognized real estate appraisers and shall also be members
of the American Institute of Real Estate Appraisers (MAI) or the American
Society of Appraisers
<PAGE>
(SRPA or SREA) or any successor organization. The single appraiser or three (3)
appraisers so appointed shall thereupon proceed to determine said rental, based
on the then fair monthly rental value for the Premises, exclusive of any
fixtures, alterations, additions or improvements installed or made by Tenant.
The decision of said single appraiser or, if there shall be three (3) appraisers
the decision of the majority of them, shall be final, conclusive and binding
upon the parties. In the event the appraiser or appraisers shall render their
decision after the commencement of the year for which rent is being determined,
rent shall be payable at the rate in effect for the previous year until their
decision is rendered, but the new rent established by such appraisal shall
become effective retroactively to the commencement of said year for which rent
is being determined and shall be payable immediately on the determination of
such rent, together with interest thereon at the rate of twelve percent (12%)
per annum from the date such payments would have been due until actually paid in
full. Notwithstanding anything to the contrary herein, the negotiated or
arbitrated rentals for any such period shall in no event be less than the rent
for the period immediately preceding. If Landlord and Tenant are unable to agree
on rent and if such rent shall be fixed by appraisal, Tenant shall pay all costs
of such appraisal, including, without limitation, the appraisers' fees and the
reasonable attorneys' fees of Landlord.
5. Quiet Enjoyment. Landlord agrees that upon payment of the rent
---------------
herein provided for, and upon the observance and performance by Tenant of the
covenants hereinafter contained and on the part of Tenant to be observed and
performed, subject to the provisions of this Lease, and any underlying mortgage
on Landlord's estate, Tenant shall peaceably hold and enjoy the Premises for the
Term.
6. Conveyance Tax; General Excise Tax. Tenant shall pay any
----------------------------------
conveyance tax imposed by the State of Hawaii and execute, at Landlord's
request, such affidavits and other documentation as may be necessary or proper
in connection therewith. Tenant shall also pay to Landlord as additional rent,
together with each payment of rental, real property taxes and other charges
payable by Tenant hereunder, which are subject to the State of Hawaii general
excise tax on gross income, as the same may be amended, and all other similar
taxes imposed upon Landlord with respect to rental or other payments in the
nature of a gross receipts tax, sales tax, privilege tax or the like, excluding
federal or state net income taxes, whether imposed by the United States, State
of Hawaii or City and County of Honolulu, an amount (presently 4.167% of each
such payment) which when added to such rental or other payment shall yield to
Landlord after deduction of all such tax payable by Landlord with respect to all
such payments a net amount which Landlord would have realized from such payment
had no such tax been imposed.
7. Tenant's Pro Rata and Proportionate Shares.
------------------------------------------
(a) As used in this Lease, Tenant's "Pro Rata Share" of Operating
Expenses shall mean the percentage set forth in paragraph (B)(1) of Section I of
this Lease. Tenant's initial Pro Rata Share has been computed by Landlord based
on Landlord's estimate of the ratio, which the Rentable Area of Tenant's
Premises bears to the total Rentable Area of the Building. Tenant hereby agrees
to be bound by such computation notwithstanding errors in measurement (provided
that such errors shall not cause Tenant's Pro Rata Share to be five percent (5%)
more or less than Tenant's Pro Rata Share after taking such errors into
account). "Rentable Area" of a floor shall be computed by measuring to the
inside finished surface of the dominant portion of the permanent outer Building
walls where it intersects the finished floor, excluding any major vertical
penetrations of the floor. No deductions shall be made for columns and
projections necessary to the Building. The Rentable Area of the Premises shall
be computed by multiplying the Usable Area of the Premises by the quotient of
the division of the Rentable Area of the floor by the Usable Area of the floor.
"Usable Area" of a premises shall mean that area of the premises computed by
measuring to the finished surface of the office side of corridor and other
permanent walls of the premises, to the center of partitions that separate the
premises from adjoining Usable Areas not leased by Tenant, and to the inside
finished surface of the
<PAGE>
dominant portion of the permanent outer Building walls. No deductions shall be
made for columns and projections necessary to the Building. Parking areas shall
be excluded. For purposes of this Lease, the Rentable Area and Usable Area shall
be computed in accordance with the American National Standard Method for
Measuring Floor Area in Office Buildings, ANSI Z65.1-1980. The Rentable Area and
Usable Area are subject to adjustment from time to time to correct errors in
measurement (which errors result in Tenant's Pro Rata Share being more than five
percent (5%) more or less than Tenant's Pro Rata Share after taking such errors
into account) or if changes are made to the Building, and Tenant's Pro Rata
Share shall be adjusted accordingly.
(b) As used in this Lease, Tenant's "Proportionate Share" of
janitorial services, refuse collection and electricity furnished to the Office
Areas of the Building (collectively, the "Common Office Expenses") shall mean
the percentage set forth in paragraph (B)(2) of Section I of this Lease.
Tenant's Proportionate Share has been computed by Landlord based on the ratio
which the Rentable Area of Tenant's Premises bears to the total Rentable Area of
all premises other than those being leased to tenants on the ground floor of the
Building. Tenant agrees to be bound by Landlord's computations of Tenant's
Proportionate Share notwithstanding errors in measurement (provided that such
errors shall not cause Tenant's Proportionate Share to be five percent (5%) more
or less than Tenant's Proportionate Share after taking such errors into
account). For purposes of this Lease, the "Office Areas" of the Building shall
mean and include all areas of the Building other than the premises being leased
to tenants on the ground floor of the Building and other than the ground floor
lobby area and ground floor restrooms.
8. Parking; Utilities. Landlord shall make available to Tenant for
------------------
rental in the Building's parking facility the number of unreserved parking
stalls set forth in paragraph (I) of Section I of this Lease. Tenant shall rent
such stalls pursuant to the terms and conditions of a separate parking agreement
to be entered into by Tenant and Landlord or by such parking lot operator as
Landlord may designate in Landlord's sole discretion, and the fee charged for
Tenant's use of such parking stalls shall be established by Landlord or the
parking lot operator from time to time in accordance with the prevailing market
rate. Tenant agrees to comply with such rules and regulations as shall be
adopted by Landlord or the parking lot operator from time to time. Tenant shall
have the right to rent a lesser number of parking stalls than the number set
forth in paragraph (I) of Section I by notifying Landlord or the parking lot
operator in writing; however, if Tenant rents such lesser number and
subsequently requires the stalls previously relinquished, Tenant agrees that
Tenant's right to rent the relinquished stalls shall be subject to availability.
Tenant will make all arrangements for and pay for all telephone
service and other utilities and services used by Tenant on or with respect to
the Premises which are not provided under Landlord's standard services and
Tenant shall pay for such charges prior to such charges becoming delinquent.
9. Operating Expenses and Common Office Expenses. Tenant will pay to
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Landlord in advance on the first (1st) day of each month throughout the Term, in
accordance with monthly billings rendered to Tenant by Landlord, but subject to
annual adjustment as hereinafter set forth, Tenant's Pro Rata Share of the
Operating Expenses and Tenant's Proportionate Share of Common Office Expenses
for the Building and real property of which the Premises are a part.
It is understood and agreed that the monthly billings referred to in
this Lease shall be on an estimated basis. If the aggregate payments made by
Tenant for Operating Expenses and Common Office Expenses for any Lease Year
(hereinafter defined) exceed Tenant's Pro Rata Share of Operating Expenses and
Tenant's Proportionate Share of Common Office Expenses for
<PAGE>
such Lease Year, such excess shall, at Landlord's option, be applied as a credit
against future payments to be made by Tenant for Operating Expenses and Common
Office Expenses. Landlord shall notify Tenant in writing as soon as practicable
after the end of such Lease Year of such credit and the amount so credited or
refund such amount to Tenant. If the aggregate payments made by Tenant for the
Operating Expenses and Common Office Expenses with respect to any such Lease
Year are less than the sum of Tenant's Pro Rata Share of Operating Expenses and
Tenant's Proportionate Share of Common Office Expenses Tenant shall pay the
amount of such deficiency to Landlord within ten (10) days after written demand
by Landlord. In the event that this Lease is terminated prior to the end of a
Lease Year, the adjustment above will be made to apply as of the date of
termination of this Lease and any excess paid by Tenant shall be refunded by
Landlord to Tenant within thirty (30) days after the determination thereof at
the end of the Lease Year. Any deficiency owed by Tenant shall be paid as set
forth in this Lease. For the purpose of determining increases in Operating
Expenses and in Common Office Expenses payable by Tenant, the calculation shall
be based on a full Lease Year and Tenant's Pro Rata Share of Operating Expenses
or Proportionate Share of Common Office Expenses, as the case might be, computed
as herein set forth shall be deemed to have accrued uniformly during such Lease
Year; provided, that Landlord shall have the right to allocate between or among
as many Lease Years as it determines to be reasonable, in its sole judgment, the
costs incurred in making extraordinary repairs. If any part of the Building is
not fully occupied and used during any Lease Year, then for the purpose of the
calculations to be made under this paragraph 9, the Operating Expenses and
Common Office Expenses, both estimated and actual for such Lease Year, as the
case might be, shall be adjusted by adding amounts and items of Operating
Expenses and Common Office Expenses which would normally have been incurred if
the Building had been fully occupied and used during such Lease Year, as the
case might be, as estimated by Landlord. Tenant's Pro Rata Share of the
Operating Expenses and Tenant's Proportionate Share of Common Office Expenses
shall be based on an assumed full occupancy.
For purposes of this paragraph 9, the term "Operating Expenses" means
any and all expenses which shall be incurred or paid on account of the
operation, cleaning, maintenance, repair, safety, management and security of the
Building or the Property. Operating Expenses shall also include, without
limiting the generality of the foregoing, real property taxes and any
assessments or charges made under any betterment or improvement law or otherwise
attributable to the Building, the costs of utilities, automated control systems,
heating, elevators, air conditioning, trash disposal, repair and maintenance,
replacement, landscaping, janitorial services for the ground floor lobby area,
line painting, fees for permits and licenses, maintenance and repair of lighting
fixtures and equipment (including the replacement of bulbs and tubes), guard
service, the cost of management contracts or the cost of equivalent management
services, supplies, wages and salaries of employees used in maintenance and
general operations (as distinguished from the cost of management contracts or
equivalent management services aforesaid), and payroll taxes (and similar
governmental charges) with respect thereto, the acquisition cost (rental fees
and/or purchase price, or in lieu of a purchase price, the annual depreciation
allocable thereto) of all supplies, tools, machines and equipment used in
operation and maintenance, audit and bookkeeping expenses, legal fees and
expenses, financing expenses relating to operation and management, insurance
(including fire and extended coverage, vandalism and malicious mischief,
difference in conditions coverage, public liability and property damage and
worker's compensation insurance customarily carried by owners of first class
office buildings), taxes upon or measured by Landlord's gross income to the
extent that such taxes have not already been recovered in paragraph 6 of this
Section III (but excluding taxes upon or measured by Landlord's net income), the
costs and expenses of any contest by appropriate legal proceedings of the amount
or validity of any such taxes, charges or other assessments, personal property
taxes, if any, and the cost of alterations, additions and capital improvements
required by any laws, codes, regulations or ordinances now or hereafter in
effect or made by Landlord to reduce energy requirements or which would have the
effect of reducing the expenses which would otherwise be included in Operating
Expenses (amortized over their
<PAGE>
reasonable life with interest at the rate usually charged Landlord for borrowing
on the amount of such cost, or, if Landlord is prohibited by law from charging
interest at such rate, at the rate of one percent (1%) per month). The Operating
Expenses shall not include capital expenditures (except the costs of certain
capital improvements as above mentioned), depreciation on real property or
financing expenses related to the construction of the Building.
For purposes of this paragraph 9, "Lease Year" shall be a period of
twelve (12) consecutive calendar months, with the initial Lease Year commencing
on the first (1st) day of such month as shall be established by Landlord, in
Landlord's sole discretion, and each succeeding Lease Year commencing on the
anniversary thereof.
10. Other Taxes and Fees. In addition to the rental provided
--------------------
hereunder, Tenant agrees to pay all license fees and all taxes and assessments
and increases in taxes and assessments levied and assessed by any government
body by virtue of (a) any special improvements or assessments, (b) Tenant using
and conducting its business or operation on the Premises, (c) the employment of
agents, employees or other third parties, or (d) the bringing onto, or keeping
of personal property or chattels of whatsoever nature on the Premises. The
foregoing is intended to bind Tenant to pay, and to promptly discharge, all
taxes, assessments and/or levies, together with related interest and penalties,
whether assessed by federal or state authority or any political subdivision
thereof, directly or indirectly related to its business, improvements,
functioning, employment, assets, existence, sales, entertainment or the like.
Tenant specifically agrees to reimburse Landlord for any increase in ad valorem
taxes resulting from use of fixtures or improvements by Tenant which Landlord
becomes obligated to pay.
11. Laws and Ordinances; Indemnity. Tenant shall, during the whole
------------------------------
of said Term, keep the Premises in a strictly safe, clean and sanitary condition
and observe and perform all laws and ordinances applicable to the Building and
improvements now or hereafter erected on the Premises, all laws, ordinances,
rules and regulations relating to health and sanitation for the time being
applicable to the Premises and will indemnify, defend and hold harmless
Landlord, its partners, employees, agents, successors and assigns from and
against all claims, actions, suits, damages, costs and expenses, including
attorneys' fees by whomsoever brought or made by reason of the nonobservance or
nonperformance of said laws, ordinances, rules, regulations and requirements or
of this covenant and will reimburse Landlord for attorneys' fees and for all
other costs which Landlord may incur in connection with the defense of any such
claims. Tenant's obligations hereunder and under the provisions of paragraph 17
of this Section III shall expressly include, without limitation, compliance with
the provisions of the Americans with Disabilities Act, 42 U.S.C. Section 12101
et seq., applicable to Tenant.
------
12. Hazardous Materials; Indemnity. Tenant will keep and maintain
------------------------------
the Premises in compliance with, and shall not cause or permit the Premises or
the Building to be in violation of, any Hazardous Materials Laws (hereinafter
defined), and shall not use, generate, manufacture, treat, handle, refine,
produce, process, store, discharge, release, dispose of or allow any Hazardous
Materials (hereinafter defined) in, on or under the Premises or the Building in
violation of any Hazardous Materials Laws. Tenant shall indemnify, defend and
hold harmless Landlord, its partners, employees, agents, successors and assigns
from and against any loss, damage, cost, expense or liability, direct or
indirect, arising out of or attributable to the violation of any Hazardous
Materials Laws or the unlawful use, generation, manufacture, treatment,
handling, refining, production, processing, storage, release, threatened
release, discharge, disposal or presence of Hazardous Materials in, on or under
the Premises or the Building, including, without limitation, all foreseeable and
unforeseeable consequential damages, the costs of any required or necessary
repair, clean up or detoxification of the Premises or of the Building, and the
preparation and implementation of any closure, remedial or other required plans.
In addition to the foregoing, Tenant shall immediately advise Landlord, in
writing, if Tenant at any
<PAGE>
time becomes aware of any violation of any Hazardous Materials Laws or of any
claim made pursuant to any Hazardous Materials Laws in respect of the Premises
or the Building.
For purposes of this Lease, the term "Hazardous Materials Laws" means
and includes all federal, state or local laws, ordinances or regulations, now or
hereafter in effect, relating to environmental conditions, industrial hygiene or
Hazardous Materials on, within, under or about the Premises or the Building,
including, without limitation, Chapter 342J of the Hawaii Revised Statutes, the
Comprehensive Environmental Response, Compensation and Liability Act of 1980, as
amended, 42 U.S.C. Section 9601, et seq., the Resource Conservation and Recovery
Act, 42 U.S.C. Section 6901, et seq., the Hazardous Materials Transportation
Act, 49 U.S.C. Section 1251, et seq., the Clear Air Act, 42 U.S.C. Section 7401,
et seq., the Toxic Substances Control Act, 15 U.S.C. Sections 2601 through 2629,
the Safe Drinking Water Act, 42 U.S.C. Section 300f through 300j, and any
similar federal, state or local laws or ordinances and the regulations now or
hereafter adopted, published and/or promulgated pursuant thereto.
As used in this Lease, the term "Hazardous Materials" means and
includes any and all radioactive materials, asbestos, organic compounds known as
polychlorinated biphenyls, chemicals known to cause cancer or reproductive
toxicity, pollutants, contaminants, hazardous wastes, toxic substances, and any
and all other substances or materials defined as or included in the definition
of "hazardous substances", "hazardous wastes", "hazardous materials" or "toxic
substances" under, or for the purposes of, the Hazardous Materials Laws.
13. Interruption or Curtailment of Services. The interruption or
---------------------------------------
curtailment of services or utilities to be furnished by Landlord hereunder, if
the same results from causes beyond Landlord's reasonable control, shall not
constitute constructive eviction and shall not entitle Tenant to the abatement
of rent or to any other claims against Landlord; but in the case of such
interruption or curtailment, Landlord shall take all reasonable steps to restore
the interrupted or curtailed utilities or services.
14. Use. Tenant will use the Premises only for the purposes set
---
forth in paragraph (G) of Section I of this Lease and for no other purposes,
except as consented to in writing by Landlord, which consent shall be in
Landlord's sole discretion.
In addition, Tenant shall not use or occupy said Premises for the
purpose of storing junk, scrap or other offensive materials; and will not make
or suffer any strip or waste or unlawful, improper or offensive use of said
Premises; nor shall Tenant use or permit said Premises or any part thereof to be
used in any manner or for any purpose which will increase the then existing rate
of insurance upon the Building of which the Premises are a part, or cause a
cancellation of any insurance policy covering said Building, or any part
thereof, nor shall Tenant sell, store or permit to be kept, used or sold in or
about said Premises any article which may be prohibited by any policy or
policies of fire insurance applicable to the Premises and to the activities
therein permitted. Tenant shall use and occupy said Premises in a careful, safe
and proper manner. Any increase in premiums or surcharges or damages resulting
from any such prohibited use shall be paid by Tenant to Landlord; provided,
however, that the foregoing shall not apply to increases in premiums or
purchases which are attributable to inflation or other price increases unrelated
to the activities of Tenant. Tenant shall, at Tenant's sole cost and expense,
comply with all requirements of all county, municipal, state and federal
authorities now in force, or which may hereafter be in force, pertaining to the
Premises, and shall faithfully observe in the use of the Premises all municipal
ordinances and state and federal statutes now in force or which may hereafter be
in force.
15. Inspection; Access. Tenant will permit Landlord and its
------------------
employees and agents, at all reasonable times during said Term, to enter the
Premises and examine the state of repair and condition thereof, and Tenant will
repair and make good (within thirty (30) days of
<PAGE>
receipt of written notice by Tenant) all defects which Tenant is obligated to do
under the terms of this Lease and of which notice shall be given by Landlord, as
set forth in paragraph 18 of this Section III. Without in any manner obligating
Landlord to do so, Tenant will also permit Landlord and Landlord's agents to
have access to the Premises at all reasonable times for the purpose of making
repairs, posting such notices as it may deem necessary for Landlord's protection
or for the protection of the Premises, for the purpose of repossessing the
Premises as herein provided and/or for the purpose of showing the Premises to
prospective tenants, purchasers, mortgagees and/or others, and Landlord shall
not be liable for damages resulting to Tenant from such exercise of the right of
entry, and the rent stipulated hereunder shall not abate during the period of
such entry, nor shall Tenant be entitled to maintain a setoff or counterclaim
for damages against Landlord by reason of loss or interruption of business of
Tenant because of the prosecution of any such repairs. During the last ninety
(90) days of the Term, Landlord shall have the right to place and maintain in or
upon the Premises in one (1) or more conspicuous places "For Rent", "For Lease"
and/or "For Sale" signs.
Landlord, Tenant and all other tenants in the Building of which the
Premises are a part, and their respective guests, invitees and employees, shall
have ingress to and egress from all common public areas of said Building;
provided, however, that Landlord shall have the right to regulate and control
such guests, invitees and employees with respect to such access and the days and
hours of access, and all common areas and facilities not within the Premises,
which Tenant may be permitted to use and occupy, are to be used and occupied
under a revocable license, and if the amount of such areas shall be diminished,
Landlord shall not be subject to any liability nor shall Tenant be entitled to
any compensation or diminution or abatement of rent, nor shall such diminution
of such areas be deemed constructive or actual eviction. Landlord shall not be
liable to Tenant for any inconvenience, interferences, annoyance, loss or damage
resulting from work done in or upon the Premises or any portion of the Premises
or adjacent grounds.
Tenant agrees that if Landlord during the Term hereby demised shall be
required by the City and County of Honolulu, the State of Hawaii, by any other
governmental authority to repair, alter, remove, reconstruct or improve any part
of the Premises or of said Building then such repair, alteration, removal,
reconstruction or improvement may be made by and at the expense of Landlord and
shall not in any way affect the obligations or covenants of Tenant herein
contained, and Tenant hereby waives all claims for damages or abatement of rent
because of such work.
16. Tenant's Construction and Bond. Tenant shall, at its cost, in
------------------------------
accordance with plans and specifications therefor first approved in writing by
Landlord, construct and install such improvements and fixtures and provide such
equipment and do all other things required to complete the Premises in a
finished condition ready for the conduct of Tenant's business at the Premises.
In performing such initial construction and installation and any further
construction or installation, Tenant shall strictly comply with the requirements
of Exhibit "B", and Tenant will, before commencing any such construction, obtain
Landlord's approval of Tenant's contractor and show evidence satisfactory to
Landlord that Tenant has sufficient current funds to pay for the entire cost of
construction and post with Landlord a contract performance and labor and
material payment bond or bonds with corporate surety satisfactory to Landlord in
the penal sum equal to one hundred percent (100%) of the cost of construction,
guaranteeing the completion thereof free from any mechanics' or materialmen's
lien. Tenant agrees that Tenant's contractor shall be a union contractor and
must possess good labor relations. Tenant's initial construction and any
further construction or alterations shall strictly comply with all applicable
laws, ordinances, codes and regulations and Tenant shall furnish to Landlord a
true copy of Tenant's building permit for such construction or alterations prior
to the commencement of such work. All fixtures installed by Tenant will be new
or completely reconditioned.
<PAGE>
Any violation of the foregoing provisions shall be considered a
material default of this Lease.
17. Indemnity. Tenant will indemnify, defend and hold harmless
---------
Landlord, its partners, employees, agents, successors and assigns from and
against all claims and demands for loss or damage, including property damage,
personal injury and wrongful death, arising out of or in connection with the use
or occupancy of said Premises by Tenant or any other person claiming by, through
or under Tenant, or any accident or fire on said Premises or any adjacent
sidewalk or any nuisance made or suffered thereon caused by Tenant's negligence,
or any failure by Tenant to keep said Premises or sidewalk in a safe condition,
or any failure by Tenant to comply and conform with all laws, statutes,
ordinances and regulations of the United States, (including, without limitation,
the Americans with Disabilities Act) the State of Hawaii and the City and County
of Honolulu now or hereafter in force, or arising from any default by Tenant in
the performance of any of the covenants, conditions or provisions of this Lease,
will resist and defend at Tenant's expense any such claim by counsel
satisfactory to Landlord, and will reimburse Landlord for all of Landlord's
costs and expenses, including reasonable attorneys' fees with respect to any
attachment, judgment, suit, lien, charge or encumbrance whatsoever against said
Premises made or suffered by Tenant.
18. Acceptance and Maintenance of Premises.
--------------------------------------
(a) Tenant, by Tenant's execution of this Lease, shall be
conclusively deemed to have accepted the Premises as being in good, safe,
tenantable and sanitary order, condition and repair.
(b) Tenant shall, at Tenant's sole cost and expense, keep the
Premises and every part thereof in good condition and repair, excepting only
ordinary wear and tear and unavoidable damage not required to be insured
against, and excepting structural repairs which shall be the responsibility of
Landlord. Tenant hereby waives all rights to make repairs at the expense of
Landlord as provided by any law, statute or ordinance now or hereafter in
effect. Damage to all glass of the Premises (other than glass which is part of
the exterior of the Building) shall be at the risk of Tenant; any such glass
broken during the Term shall be promptly replaced by Tenant at the expense of
Tenant. Tenant will not damage or deface the walls, floors or ceilings, nor
damage or obstruct hallways or other common areas, nor commit any act which may
damage the structural parts of the Building. Tenant shall not add, disturb or in
any way change any plumbing or wiring without first obtaining the written
consent of Landlord. All damage or injury done to the Premises by Tenant, or by
any persons who may be in or upon the Premises with the consent of Tenant, shall
be paid for by Tenant and Tenant shall pay for all damage to the Building caused
by Tenant's misuse of the Premises or the appurtenances thereto. All repairs to
the Premises necessary to maintain the Premises in a tenantable and good
condition shall be done by or under the direction of Landlord and at Tenant's
expense, except as is otherwise specifically provided herein. Tenant shall pay
for the replacement of doors of the Premises which are cracked or broken.
Landlord may make any alterations or improvements which Landlord may deem
necessary for the preservation, safety or improvement of the Premises or the
Building. It is specifically understood and agreed that Landlord has made no
promises to alter, remodel, improve, repair, decorate or paint the Premises, or
any part thereof, and that no representations respecting the condition of the
Premises or the Building of which the Premises are a part have been made by
Landlord to Tenant.
Notwithstanding anything herein to the contrary, any diminution or
shutting off of light or air by any structure which may be erected adjacent to
the Building of which the Premises are a part, whether by Landlord or others,
and any dust, noise, vibration or other similar disturbance caused by the
construction of other tenant improvements during the initial lease-up period of
the Building and during any change in tenancy of any premises within the
Building,
<PAGE>
shall not affect this Lease or impose any liability on Landlord or be construed
as a constructive eviction or grounds for-the reduction of rent.
19. Liability Insurance. Tenant will procure at its own expense and
-------------------
keep in force during the entire Term: (a) a policy of comprehensive general
liability insurance (Owners', Landlords' and Tenants' Public Liability
Insurance) with minimum limits of not less than ONE MILLION AND NO/100 DOLLARS
($1,000,000.00) arising out of each occurrence with a TWO MILLION AND NO/100
DOLLARS ($2,000,000.00) general aggregate limit. Said policy or policies shall
be with an insurance company or companies authorized to do business in the State
of Hawaii, shall name Landlord, Landlord's mortgagee or Tenant's mortgagee and
the manager of the Building as additional assureds, and shall cover the entire
Premises and the areas appurtenant thereto, including the sidewalks upon which
the Premises abut; and a current certificate of said policy or policies shall be
deposited with Landlord, together with evidence of payment of the premium
thereon. The limits of said policies shall be increased in accordance with such
limits as Landlord may establish from time to time with due regard to prevailing
prudent business practices and as reasonably adequate for Landlord's protection.
Said insurance shall contain a provision that it will not be cancelled or
substantially modified without giving Landlord thirty (30) days' written notice
prior to the effective date of the proposed cancellation or modification.
20. Insurance on Fixtures and Equipment. Tenant shall procure at its
-----------------------------------
own expense and, during the entire Term, keep in full force and effect insurance
on Tenant's fixtures and equipment in the Premises, in the full insurable value
thereof, against fire and extended coverage risks including protection against
vandalism, malicious mischief and ceiling sprinkler leakage protection, and in
time of war, against war damage to the extent such governmental insurance is
obtainable at reasonable cost, in an amount as near as practicable to the full
replacement cost of such improvements, in the joint names of Landlord, Tenant,
any mortgagee of Landlord's and/or Tenant's interest hereunder and such other
parties as Landlord may specify as their interests may appear. Tenant shall
deposit a current certificate of said insurance with Landlord, and said
insurance shall contain a provision that it will not be cancelled or
substantially modified without giving Landlord thirty (30) days' written notice
prior to the effective date of the proposed cancellation or modification.
21. Waiver of Subrogation. The parties release each other, and their
---------------------
respective authorized representatives, from any claims for damage to any person
or to the Premises and to the fixtures, personal property, Tenant's
improvements, and alterations of either Landlord or Tenant in or on the Premises
that are caused by or result from risks insured against under any insurance
policies carried by the parties and in force at the time of any such damage.
Each party shall cause each insurance policy obtained by it to provide
that the insurance company waives all right of recovery by way of subrogation
against either party in connection with any damage covered by any such policy.
Neither party shall be liable to the other for any damage caused by fire or any
of the risks insured against under any insurance policy required by this Lease.
If any insurance policy cannot be obtained with a waiver of subrogation, or is
obtainable only by the payment of an additional premium charge above that
charged by insurance companies issuing policies without waiver of subrogation,
the party undertaking to obtain the insurance shall notify the other party of
this fact. The other party shall have a period of ten (10) days after receiving
the notice either to place the insurance with a company that is reasonably
satisfactory to the other party and that will carry the insurance with a waiver
of subrogation, or to agree to pay the additional premium if such a policy is
obtainable at additional cost. If the insurance cannot be obtained or the party
in whose favor a waiver of subrogation is desired refuses to pay the additional
premium charged, the other party shall be relieved of the obligation to obtain a
waiver of subrogation rights with respect to the particular insurance involved.
<PAGE>
22. Risk of Loss. The storage and/or presence of all goods, wares,
------------
merchandise or other property of Tenant or anyone claiming by, through or under
Tenant on the Premises shall be at Tenant's or such other owner's sole risk, and
Landlord shall not be responsible for any loss or damage from fire, smoke or
water damage, from bursting, overflowing or leaking of water, gas, sewer or
steam pipes, from radio interference, electrical surges, outages or spikes, from
the kind or character of electricity or utilities furnished to the Premises,
from any interruption or curtailment of utilities or services, or from any
fixtures, appliances or devices to the same, or from electric wires, fixtures,
appliances or devices or from odors or from any cause whatsoever.
23. Waste and Nuisance. Tenant will keep the Premises in a strictly
------------------
clean, safe, neat and sanitary condition and will not commit or suffer to be
committed any waste upon or of the Premises, or any nuisance or other act or
omission which disturbs the quiet enjoyment of any other tenant in the Building
of which the Premises are a part, and Tenant will not use any apparatus,
machinery or device which causes substantial noise or vibration or which
overloads the floor of the Premises. Tenant will immediately abate any nuisance
or said other act or omission upon demand of Landlord. Tenant shall not waste
or permit the waste of water drawn through fixtures on or about the Premises.
24. Signs. Tenant shall not erect, install, paint or inscribe on any
-----
exterior door, wall or window, or on any marquee or roof, or affix to the
exterior surface of the Building or the Premises, any signs, lettering or
placards or advertising media without the prior written consent of Landlord. In
the event that the written consent of Landlord is secured, Tenant shall pay all
permit and license fees which may be required to be paid for the erection and
maintenance of any and all such signs, and provided that such signs shall be
legally permitted to be installed. Tenant shall indemnify and save Landlord
harmless from and against any and all losses, damages, claims, suits or actions
for any damage or injury to persons or property caused by the erection and
maintenance of such signs or parts thereof, and insurance coverage for any such
sign shall be included in the public liability policy which Tenant is required
to keep in force pursuant to paragraph l9 of this Section III.
25. Attorneys' Expenses. Tenant will pay to Landlord on demand all
-------------------
costs and expenses, including reasonable attorneys' fees, incurred by Landlord
in enforcing any of the covenants herein contained, in remedying any breach
thereof by Tenant, in recovering possession of the Premises, in collecting any
delinquent rent, taxes or other charges hereunder payable by Tenant, or in
connection with any litigation commenced by or against Tenant (other than
condemnation proceedings) to which Landlord without any fault on its part shall
be made a party. In case Landlord, without any fault of Landlord, is made a
party to any litigation commenced by or against Tenant, then Tenant shall pay
all costs and expenses, including reasonable attorneys' fees, incurred or
imposed on Landlord by or in connection with such litigation.
26. Assigning and Subletting.
------------------------
(a) Tenant shall not, without complying with the provisions of
subparagraph (b) below and without obtaining the prior written consent of
Landlord pursuant to subparagraph (c) below and paragraph 48 of this Section
III, assign, mortgage, pledge or otherwise encumber this Lease or any interest
herein, or sublet the Premises or any part thereof. The term "sublet" shall
include, without limitation, any use of the Premises by any party other than
Tenant and the term "assign" shall include, without limitation, any sale of all
or part of the Premises, by agreement of sale or otherwise. Any of the
foregoing acts without complying with subparagraph (b) below and without
obtaining such consent shall be void and constitute a default under this Lease.
Any change in ownership of the majority of shares of the stock of Tenant (if
Tenant if a corporation), as such majority ownership existed as of the date of
this Lease, or any change in the identity of a majority of the general partners
of Tenant (if Tenant is a partnership),
<PAGE>
as the identity of such majority existed as of the date of this Lease, shall be
deemed to be an assignment or transfer of this Lease within the meaning of this
paragraph. No assignment, mortgage, pledge, encumbrance or subletting shall be
permitted to be made by Tenant if there is any default by Tenant under this
Lease.
(b) Tenant shall, in connection with any assignment of all or
part of Tenant's interest in the Lease or sublease of all or part of the
Premises, pay to Landlord the following:
(l) Fifty percent (50%) of the amount of any premiums, sums
or other consideration payable to Tenant as a result of any assignment of this
Lease.
(2) Fifty percent (50%) of any premiums, and fifty percent
(50%) of the amount by which any rent or other amounts payable to Tenant as a
result of any sublease exceed the rent and other sums payable by Tenant
hereunder with respect to the space to be subleased.
(c) Tenant shall obtain the prior written consent of Landlord to
any assignment, mortgage, pledge or encumbrance of this Lease or any interest
herein, or to any sublease of all or part of the Premises. The agreement by
Tenant to pay the amounts required under subparagraph (b) above shall be a
condition precedent to obtaining Landlord's consent; however, payment of such
amounts shall not entitle Tenant to demand such consent, the granting or
withholding of which shall be governed by the provisions of paragraph 48 of this
Section III.
27. Continuing Liability. No permitted assignment, mortgage, pledge,
--------------------
encumbrance or sublease of Tenant's interest in the Premises shall in any way
release Tenant from any liability or responsibility assumed by Tenant under this
Lease.
28. Subordination of Lease; Estoppel Certificates. In the event any
---------------------------------------------
mortgagee shall elect to have this Lease prior to or subordinate to its
mortgage, then and in such event, upon such mortgagee notifying Tenant to that
effect, this Lease shall have priority over or be subordinate to the lien of
such mortgage. Tenant covenants and agrees, in the event any proceedings are
brought for the foreclosure of, or in the event of exercise of the power of sale
under, any mortgage heretofore or hereafter made by Landlord covering the
Premises (and which may or may not also cover other premises), whether or not
this Lease is terminated by such foreclosure or sale, that Tenant will, upon
request by the purchaser, attorn to the purchaser upon any foreclosure or sale
and recognize such purchaser as the landlord under this Lease, it being the
intent hereof that if this Lease should be terminated by such foreclosure or
sale, this Lease shall, upon request by the purchaser, be reinstated as a lease
between the purchaser and Tenant, it being nevertheless understood that such
purchaser shall not be liable for any act or omission of a prior landlord nor be
subject to any offsets or defenses which Tenant may have against any prior
landlord. Tenant, upon request of any party in interest, shall execute such
instrument or instruments as shall be requested to carry out the requirements of
this paragraph within thirty (30) days after receipt by Tenant of written
request therefor; provided, however, that Tenant shall not be required to
effectuate such subordination, nor shall Landlord be authorized to effect such
subordination on behalf of Tenant, unless the mortgagee named in such mortgage
shall first agree in writing, for the benefit of Tenant, that so long as Tenant
is not in default under any of the provisions, covenants or conditions of this
Lease on the part of Tenant to be kept and performed, that neither this Lease
nor any of the rights of Tenant hereunder shall be terminated or modified or be
subject to termination or modification, nor shall Tenant's possession of the
Premises be disturbed or interfered with, by an action or proceeding to
foreclose said mortgage. In the event that Tenant fails to respond to such
written request within thirty (30) days, Landlord shall have the right to
execute such instruments on behalf of Tenant. Tenant hereby constitutes
Landlord as
<PAGE>
Tenant's true and lawful attorney-in-fact, coupled with an interest, for
purposes of the execution of the foregoing instruments.
Within fifteen (15) days of presentation, Tenant shall execute,
acknowledge and deliver to Landlord (a) any subordination or non-disturbance
agreement or other instrument that Landlord may require to carry out the
provisions of this paragraph, (b) any agreement for attornment to a purchaser
upon foreclosure, and (c) any estoppel certificate requested by Landlord from
time to time in the standard form of any mortgagee or purchaser certifying in
writing, if such is the case, that Tenant is in occupancy, that this Lease is
unmodified and in full force and effect or that if there have been modifications
that the same is in full force and effect as modified and stating the
modifications, and the dates to which the rent and other charges shall have been
paid, that there shall be no rental offsets or claims and certifying such
matters as such mortgagee or purchaser may reasonably require.
29. Plumbing Facilities. Tenant will not use or permit to be used
-------------------
the plumbing facilities in the Premises, or such facilities located within the
demised area or such other area as may be assigned for use by Tenant or its
employees, for any purpose other than that for which they are constructed nor
throw or place, or permit to be thrown or placed, any foreign substance of any
kind therein, and the expense of breakage, stoppage or damage resulting from
Tenant's failure to keep this covenant shall be borne by Tenant.
30. Eminent Domain. If the whole or any substantial part of the
--------------
Premises shall be required, taken or condemned for any public use by any
authority having the power of eminent domain, this Lease shall at once terminate
and Landlord shall be entitled to receive and retain all compensation for the
taking thereof. Tenant shall, however, have the right to claim and recover from
the condemning authority only, and not from Landlord, such compensation as may
be separately awarded or recovered by Tenant in its own right for or on account
of any and all damage to Tenant's business or to its improvements or fixtures,
stock in trade or equipment, or expense caused to Tenant by the necessity of
removing the foregoing items from the Premises, but in no event shall Tenant's
compensation reduce the amount of compensation payable to Landlord.
31. Nonliability of Landlord. Landlord shall not be liable for any
------------------------
damage either to person or property sustained by Tenant or by other persons due
to the Building, or any part thereof, or any appurtenances thereof, becoming out
of repair, or due to any act or neglect of any tenant or occupant of said
Building, or of any other person. This provision shall apply especially (but
not exclusively) to damage caused by water, steam, sewage, illuminating gas,
sewer gas, utilities shortages or stoppages, odors or termites or the negligent
accumulation of combustible materials, accessories and supplies, and shall apply
equally whether such damage is caused by the act or neglect of other tenants,
occupants or janitors of said Building, or of any other persons, and whether
such damage is caused or occasioned by anything or circumstances above-mentioned
or referred to, or by any other thing or circumstance, whether of a like or of a
wholly different nature. If any such damage shall be caused by any act or
neglect of Tenant, Landlord may, at its option, repair such damage, whether
caused to the Building, or to tenants thereof; and Tenant shall thereupon
reimburse Landlord for the total cost of such damage both to the Building and/or
to the tenants thereof. Tenant further agrees that all personal property upon
the Premises shall be at the sole risk of Tenant and that Landlord shall not be
liable for any loss, injury or damage thereto or theft thereof.
32. Disposition of Fixtures on Surrender. On the last day of the
------------------------------------
Term hereby demised or on sooner termination thereof as provided in this Lease,
Tenant will peaceably and quietly leave and surrender and deliver up to Landlord
possession of the Premises together with all other improvements upon or
belonging to the same, by whomsoever made, in good repair, order and condition
except as otherwise expressly provided herein and Tenant shall surrender all
<PAGE>
keys for the Premises to Landlord at the place then fixed for the payment of
rent, and shall inform Landlord of all combinations on locks, safes and vaults,
if any, in the Premises; provided, however, that if there is no default on the
part of Tenant at the termination of this Lease, Tenant may remove all trade
fixtures and equipment installed by Tenant on the express condition that Tenant
replaces and repairs all damage to said Premises caused by or resulting from the
removal of said trade fixtures and equipment.
If Tenant shall fail to remove all effects from said Premises upon
termination of this Lease for any cause whatsoever, Landlord may, at its option,
remove the same in any manner that Landlord shall choose, and store said effects
without liability to Tenant for loss thereof, and Tenant agrees to pay Landlord
on demand any and all expenses incurred in such removal, including court costs
and attorneys' fees and storage charges on such effects for any length of time
the same shall be in Landlord's possession, or Landlord may, at its option,
without notice, sell said effects, or any of the same, at private sale and
without legal process, for such price as Landlord may obtain and apply the
proceeds of such sale to payment of any amounts due under this Lease from Tenant
to Landlord and for the expense incident to the removal and sale of said
effects.
33. Liquidated Damages. If Tenant shall, at the expiration or other
------------------
termination of this Lease, fail to yield up possession to Landlord, Landlord
shall have the option to require Tenant to pay, and Tenant shall pay as
liquidated damages for each day possession is withheld, an amount equal to
double the amount of the daily rent computed on the thirty-day-month basis.
34. Holding Over. Any holding over after the expiration of said
------------
Term, with the consent of Landlord, shall be construed to be a tenancy from
month to month at the then current fair market rental for the Premises and shall
otherwise be on the terms and conditions herein specified, so far as applicable.
35. Destruction of Premises. In the event of a partial or total
-----------------------
destruction of the Premises from any cause whatsoever, Landlord shall promptly
cause the same to be rebuilt or repaired unless, in Landlord's sole discretion,
Landlord determines that it would be uneconomical or impossible to rebuild or
repair the same, in which event this Lease shall terminate as of the date of
such destruction upon written notice given by Landlord to Tenant of its
intention not to rebuild or repair, such notice to be given within sixty (60)
days from the date of such destruction. In the event of such termination,
Tenant shall forthwith surrender the Premises and shall be relieved of all
liability accruing after the date of termination, and Landlord shall have no
further liability or obligation hereunder. If such destruction occurs and this
Lease is not so terminated by Landlord, this Lease shall remain in full force
and effect and Landlord and Tenant waive the provisions of any law to the
contrary. Landlord's obligations under this paragraph 35 shall in no event
exceed the scope of the original construction of the Building of which the
Premises are a part. Tenant agrees that during any period of reconstruction or
repair of the Premises and/or said Building, Tenant shall continue the operation
of Tenant's business in the Premises to the extent reasonably practicable from
the standpoint of good business.
36. Abatement of Rent. The monthly rent payable hereunder shall be
-----------------
abated proportionately during any period in which, by reason of any damage or
destruction of the Premises, there is substantial interference with the
operation of the business of Tenant in the Premises, having regard to the extent
to which Tenant may be required to discontinue its business in the Premises;
provided, however, that the foregoing abatement shall not apply to any
interference caused by dust, noise, vibration or other similar disturbance
caused by the construction of other tenant improvements during the initial
lease-up period of the Building and during any change in tenancy of any premises
within the Building, nor to any stoppage or shortage of utilities or services.
Such abatement shall continue for the period commencing with
<PAGE>
such destruction or damage and ending with the completion by Landlord of such
work or repair and/or reconstruction as Landlord is obligated to do.
37. Security Deposit. Tenant, contemporaneously with the execution
----------------
of this Lease, has deposited with Landlord the sum set forth in paragraph (F) of
Section I of this Lease, the receipt of which is hereby acknowledged by
Landlord. Said deposit shall be held by Landlord, without liability for
interest, as security for the faithful performance by Tenant of all of the
terms, covenants and conditions of this Lease by said Tenant to be kept and
performed during the Term hereof. Said deposit may be commingled with other
funds of Landlord.
In the event of the failure of Tenant to keep and perform any of the
terms, covenants and conditions of this Lease to be kept and performed by
Tenant, then at the option of Landlord, Landlord may appropriate and apply said
entire deposit, or so much thereof as may be necessary, to compensate Landlord
for all loss or damage sustained or suffered by Landlord due to such breach on
the part of Tenant. Should the entire deposit, or any portion thereof, be so
appropriated or so applied by Landlord for the payment of overdue rent or other
sum due and payable by Tenant hereunder, then Tenant shall, upon the written
demand of Landlord, forthwith remit to Landlord a sufficient amount in cash to
restore said security to the original sum deposited, and Tenant's failure to do
so within five (5) days after receipt of such demand shall constitute a breach
of this Lease. Should Tenant comply with all of the terms, covenants and
conditions and promptly pay all of the rental herein provided for as it falls
due, and all other sums payable by Tenant hereunder, said deposit shall be
returned in full to Tenant at the end of the Term, or upon the earlier
termination of this Lease.
Landlord may deliver the funds deposited hereunder by Tenant to the
purchaser of Landlord's interest in the Premises in the event that such interest
is sold, and thereupon Landlord shall be discharged from any further liability
with respect to such deposit; provided, however, that the purchaser shall agree
to assume Landlord's obligations hereunder with respect to said deposit.
38. Nonwaiver. The acceptance of rent by Landlord shall not be
---------
deemed a waiver by Landlord of any breach by Tenant of any term, covenant or
condition herein contained, nor of Landlord's right to declare and enforce a
forfeiture for any such breach, and failure of Landlord to insist upon strict
performance of any term, covenant or condition herein shall not be construed as
a waiver of any subsequent breach of the same nor of any other term, covenant or
condition.
The waiver by Landlord of any default or breach of any of the
provisions, covenants or conditions hereof on the part of Tenant to be kept and
performed shall not be a waiver of any preceding or subsequent breach of the
same or any other provision, covenant or condition contained herein.
39. Default and Rights of Landlord on Default. This Lease is made
-----------------------------------------
upon the condition that, (a) if Tenant shall fail to pay said rent or any part
thereof or any other charges hereunder when due, whether the same shall or shall
not have been legally demanded, or (b) if Tenant shall fail to observe or
perform any of the other covenants herein contained and on Tenant's part to be
observed and performed, and such default shall continue for ten (10) days after
written notice thereof has been given to Tenant, or (c) if Tenant shall become
bankrupt or make an assignment for the benefit of creditors or abandon the
Premises, or (d) if any mechanics' or materialmen's lien shall attach to the
Premises or Landlord's or Tenant's estate or interest therein or (e) if this
Lease or any estate or interest of Tenant hereunder shall be sold under any
attachment or execution, Landlord may in any such event at once re-enter the
Premises or any part thereof in the name of the whole and, upon or without such
entry, at its option either continue this Lease in force or terminate this
Lease. Landlord may expel and remove from the
<PAGE>
Premises Tenant and any persons claiming by, through or under Tenant and their
effects without being deemed guilty of any trespass or becoming liable for any
loss or damage occasioned thereby, all without service of notice or legal
process and without prejudice to any other remedy or right of action, including
summary possession, which Landlord may have for arrears of rent or for the same
or any preceding or other breach of contract. No act by Landlord shall terminate
this Lease other than a written notice that Landlord has elected to terminate
this Lease. During the period Tenant is in default, Landlord may enter the
Premises and relet them or any part of them to third parties for Tenant's
account. Tenant shall be liable immediately to Landlord for all costs Landlord
incurs in reletting the Premises, including, without limitation, brokers'
commissions, expenses of remodeling the Premises required by the reletting,
attorneys' fees and like costs, and Tenant shall remain liable for any
deficiency between the rents received by reason of such reletting and the rents
due hereunder, which deficiency Tenant shall pay monthly as the same may accrue.
If Landlord elects to cancel the Lease, Landlord shall have the right to recover
from Tenant unpaid rent when due plus all damages resulting from Tenant's
default, including all costs and attorneys' fees plus the worth of the rental of
the balance of the Term over the reasonable rental value of the Premises for the
remainder of the Term, which sum shall be immediately payable to Landlord by
Tenant. Following any default, if Landlord shall bring an action for summary
possession, then Tenant hereby agrees to submit irrevocably to the jurisdiction
of the District Court of the First Circuit of the State of Hawaii and said
District Court shall have the exclusive jurisdiction to decide Landlord's action
for summary possession. No remedy or election hereunder shall be deemed
exclusive but shall, wherever possible, be cumulative with all other remedies at
law or in equity.
Any property removed by Landlord may be stored in any public warehouse
or elsewhere at the cost and for the account of Tenant, and Landlord shall not
be responsible for the care or safekeeping thereof, and Tenant hereby waives any
and all claims for loss, destruction, damage or injury which may be occasioned
by any of the aforesaid acts.
Upon the occurrence of a default under this Lease, if the Premises or
any part thereof are then sublet under a sublease to which Landlord has
consented, Landlord, in addition to any other remedies provided in this Lease or
provided by law, may at its option collect directly from such sublessee all
rents becoming due to Tenant under such sublease and apply such rent against any
sums due to Landlord from Tenant under this Lease, and no such collection shall
be construed to constitute a novation or release of Tenant from the further
performance of Tenant's obligations under this Lease.
40. Right to Issue a New Lease to a Third Party. Should Landlord
-------------------------------------------
elect to re-enter and take possession of the Premises, as hereinbefore provided,
or should Landlord take possession pursuant to legal proceedings or pursuant to
any notice provided for by law, Landlord may either terminate this Lease, or
Landlord may from time to time without terminating this Lease make such
alterations and repairs as may be necessary to grant another lease to a third
party for the use of said Premises or any part thereof for such term or terms
(which may be for a term extending beyond the Term of this Lease) and at such
rent and upon such other terms and conditions as Landlord in its sole discretion
may deem advisable; upon each such granting of a new lease all rent received by
Landlord from said third party shall be applied, first, to the payment of any
indebtedness other than rent due and unpaid hereunder from Tenant to Landlord;
second, to the payment of any costs and expenses incurred in issuing a new
lease, including brokerage fees, attorneys' fees and costs of such alterations
and repairs; third, to the payment of rent due and unpaid hereunder; and the
residue, if any, shall be held by Landlord and applied in payment of future rent
as the same may become due and payable hereunder. If such rent received from
said third party during any month is less than that required to be paid during
that month by Tenant hereunder, Tenant shall pay any such deficiency to Landlord
before the end of such month. No such re-entry or taking possession of the
Premises by Landlord shall be construed as an election on its part to terminate
this Lease unless a written notice of such intention is given to
<PAGE>
Tenant or unless the termination thereof is decreed by a court of competent
jurisdiction. Notwithstanding the issuance of a new lease to a third party
without termination, Landlord may at any time thereafter elect to terminate this
Lease for such previous breach. Should Landlord at any time terminate this Lease
for any breach, in addition to any other remedies it may have, Landlord may
recover from Tenant all damages Landlord may incur by reason of such breach,
including the cost of recovering the Premises, reasonable attorneys' fees, and
including the worth at the time of such termination of the excess, if any, of
the amount of rent and charges equivalent to rent reserved in this Lease for the
remainder of the stated Term over the then reasonable rental value of the
Premises for the remainder of the stated Term, all of which amounts shall be
immediately due and payable from Tenant to Landlord. In determining the rent
which would be payable by Tenant hereunder, subsequent to default, the rent for
the unexpired Term shall be computed prorata upon the basis of the average
aggregate rent paid or payable for the rental period of this Lease in which the
default occurred.
41. Interest on Past Due Amounts. Any amounts owing by Tenant to
----------------------------
Landlord under the terms of this Lease shall carry interest from the date the
same become due until paid at the rate of one percent (1%) per month and said
interest shall be considered as a part of the rental payable hereunder;
provided, however, that nothing contained herein shall be construed as
authorizing Tenant to make payments of all sums required hereunder in other than
a timely fashion.
42. Late Charge. Tenant acknowledges that late payment by Tenant to
-----------
Landlord of rent will cause Landlord to incur costs not contemplated by this
Lease, the exact amount of such costs being extremely difficult and
impracticable to fix. Such costs include, without limitation, processing
accounting charges and late charges that may be imposed on Landlord by the terms
of any note secured by any mortgage covering the Premises. Therefore, if any
installment of rent due from Tenant is not received by Landlord when due, Tenant
shall pay to Landlord an additional sum of five percent (5%) of the overdue rent
as a late charge. The parties agree that this late charge represents a fair and
reasonable estimate of the costs that Landlord will incur by reason of late
payment by Tenant. Acceptance of any late charge shall not constitute a waiver
of Tenant's default with respect to the overdue amount, or prevent Landlord from
exercising any of the rights and remedies available to Landlord.
43. Notice. In every case where under the provisions of this Lease
------
it shall be necessary or desirable for Landlord to give to or serve upon Tenant
any notice or demand, it shall be sufficient either (i) to deliver or cause to
be delivered to Tenant a written or printed copy of such notice or demand; or
(ii) to send a written or printed copy of said notice or demand by mail, postage
prepaid addressed to Tenant at the Premises; or (iii) to leave a written or
printed copy of said notice or demand at the Premises, or to post the same upon
the door leading into said Premises. All notices to be given to Landlord under
this Lease shall be in writing and delivered in person or sent by registered or
certified mail to Landlord at its offices at the address specified on the first
page hereof, or to such other address as Landlord may designate in writing.
44. Waiver of Jury Trial and Counterclaims. The parties hereto shall
--------------------------------------
and they hereby do waive trial by jury in any action, proceeding or counterclaim
brought by either of the parties hereto against the other on any matters
whatsoever arising out of or in any way connected with this Lease, the
relationship of Landlord and Tenant, Tenant's use or occupancy of the Premises,
and/or any claim of injury or damage. In the event Landlord commences any
proceedings for nonpayment of rent or other charges payable by Tenant hereunder,
Tenant will not interpose any counterclaim of whatever nature or description in
any such proceedings. This shall not, however, be construed as a waiver of
Tenant's right to assert such claims in any separate action or actions brought
by Tenant.
<PAGE>
45. Definitions. As used herein the terms "Landlord" and "Tenant"
-----------
shall include the respective parties and their heirs, legal and personal
representatives, successors and assigns; the liability of Tenant, if more than
one (1), shall be joint and several; pronouns wherever used herein should be
construed to include the plural or singular or both; the use of any gender shall
include all genders as the context may reasonably require; and each of the terms
"or" and "and" has the meaning of the other or both where the subject matter,
sense and connection require such construction.
46. Applicable Law. This Lease shall be governed and construed in
--------------
accordance with the laws of the State of Hawaii.
47. Binding Effect. This Lease shall be binding upon and inure to
--------------
the benefit of the parties hereto and their respective successors and permitted
assigns.
48. Landlord's Consent. Whenever consent or approval of Landlord is
------------------
required by the terms of this Lease, requests for consent or approval must be
made in writing. Tenant will reimburse Landlord for reasonable architect's,
engineer's and attorney's fees and other expenses actually incurred by Landlord
in connection with the giving of each and every consent or approval required
under this Lease; provided, however, that Landlord may without further reason
withhold approval of any alterations, additions and improvements if the plans
and specifications therefor are not acceptable to the architect or engineer (if
any) retained by Landlord to review the same; and provided, further, Landlord
may, as a condition of giving any consent to an assignment of this Lease or any
interest herein or to a sublease of all or part of the Premises, require, in
addition to the payment required under subparagraph 26(b) of this Section III,
personal and complete financial information, personal guaranties, or other
information relevant to the transaction for which consent is being sought. The
remedy for any claim based upon unreasonable or unlawful withholding of consent
or approval shall be limited to appropriate injunctive or declaratory relief.
Neither party shall be liable for damages resulting from unreasonable or
unlawful withholding of consent or approval but the prevailing party in any
lawsuit seeking such declaratory or injunctive relief shall be entitled to an
award of reasonable attorneys' fees and court costs.
49. Excuse of Landlord's Performance. Anything in this Lease to the
--------------------------------
contrary notwithstanding, providing such cause is not due to the willful act or
gross neglect of Landlord, Landlord shall not be deemed in default with respect
to the performance of any of the terms, covenants and conditions of this Lease
if the same shall be due to any strike, lockout, civil commotion, war-like
operation, invasion, rebellion, hostilities, military or usurped power,
sabotage, governmental regulations or controls, inability to obtain any
material, service or financing, through act of God or other cause beyond the
control of Landlord.
50. Recordation. Tenant agrees that neither this Lease nor any
-----------
memorandum hereof shall be recorded.
51. Time of Essence. Time and performance hereof are of the essence
---------------
of this Lease.
52. Renewal. Landlord shall have no obligation to extend or renew
-------
this Lease upon termination or to enter into another lease of the Premises with
Tenant upon termination of this Lease. Upon termination of this Lease, Landlord
may lease the Premises to whoever Landlord chooses for the operation therein of
a business that is the same as or different from that operated by Tenant in the
Premises.
53. Entire Agreement. The provisions of this Lease constitute, and
----------------
are intended to constitute, the entire agreement between Landlord and Tenant.
No terms, conditions,
<PAGE>
warranties, promises or undertakings of any nature whatever, express or implied,
exist between Landlord and Tenant except as herein expressly set forth.
54. Sale By Landlord. In the event of a sale or conveyance by
----------------
Landlord of the Building and the land of which the Premises are a part, the same
shall operate to release Landlord from any future liability upon any of the
covenants or conditions, express or implied, herein contained in favor of
Tenant, and in such event Tenant agrees to look solely to the successor in
interest of Landlord in and to this Lease, and the successor in interest of
Landlord shall have the right, in its sole discretion, to change the name of the
Building at any time. Except as is otherwise provided in this paragraph 54,
this Lease shall not be affected by any such sale, and Tenant agrees to attorn
to the purchaser or assignee.
55. Joint and Several Obligations. In any case where this Lease is
-----------------------------
signed by more than one (1) person, the obligations hereunder shall be joint and
several.
56. Accord and Satisfaction. No payments by Tenant or receipt by
-----------------------
Landlord of a lesser amount than the monthly rent herein stipulated shall be
deemed to be other than on account of the earliest stipulated rent, nor shall
any endorsement or statement on any check or any letter accompanying any check
or payment as rent be deemed an accord and satisfaction, and Landlord may accept
such check or payment without prejudice to Landlord's right to recover the
balance of such rent or pursue any other remedy provided for in this Lease.
57. Rules and Regulations. Tenant shall comply with the rules and
---------------------
regulations attached hereto as Exhibit "C" and made a part hereof for all
purposes and with such other and further reasonable rules and regulations as
Landlord may prescribe which, in Landlord's sole judgment, are required for the
reputation, safety, care or cleanliness of the building or the Premises, or the
operations and maintenance thereof and the equipment therein, or for the comfort
of Tenant and other tenants of the Building. On delivery of a copy of such
amendments and additional rules and regulations to Tenant, Tenant shall
thereafter comply with said rules and regulations, and a violation of any of
said rules and regulations shall constitute a default by Tenant under this
Lease. All such rules and regulations are of the essence hereof without which
this Lease would not have been entered into by Landlord.
58. Landlord's Right to Relocate. Landlord reserves the right to
----------------------------
relocate Tenant to a substantially equivalent area in the Building. In such
event, the provisions of this Lease shall apply to the substitute premises to
the same effect as if originally described in this Lease. For purposes of this
paragraph 58, the term "substantially equivalent area" shall mean an area which
is not more than ten percent (10%) larger or smaller than the floor area of the
original Premises. Upon Landlord's request, Tenant shall immediately execute an
appropriate amendment reflecting any such substitution.
59. Location of Common Areas; Changes to Common Areas; Additional
-------------------------------------------------------------
Facilities. Landlord shall have the right to make changes in the common areas
----------
and any part thereof including, without limitation, changes in the location and
relocation of driveways, entrances, exits, vehicular parking spaces, the
direction of flow of traffic, the setting apart of prohibited areas, the
exclusion of employee parking therefrom as Landlord may deem necessary and
advisable for the proper and efficient operation and maintenance of the common
areas, and in particular, the vehicular parking areas for the convenience of the
suppliers, business invitees and customers of all tenants of the Building and
removing areas from the common areas and improving the same for particular
tenants. Notwithstanding the above, the foregoing is not intended to entitle
Landlord to effect changes in the location of common areas which materially and
adversely affect access to or visibility of the Premises, except temporarily
during periods of construction. Landlord at all times during the Term shall
have sole and exclusive jurisdiction and control of the common areas and each
and every part thereof and may, at its option, at any
<PAGE>
time and from time to time exclude and restrain any person or persons from the
use or occupancy thereof, excepting Tenant, its subtenants, licensees,
concessionaires, suppliers, business invitees and customers. Nothing herein
contained shall affect the right of Landlord at any time or from time to time to
remove any unauthorized person or persons from said common areas or to restrain
the use of any of said common areas by any unauthorized person or persons.
Without limiting the generality of the foregoing, Landlord shall have
the right to add additional parking, Office and retail areas (the "Facilities")
to the Building by constructing such Facilities on adjacent property owned by
Landlord. In the event that such additional Facilities are added to the
Building, Tenant's Pro Rata Share of Operating Expenses and Tenant's
Proportionate Share of Common Office Expenses shall be adjusted to take into
account the additional Rentable Area of the Building, and the Operating Expenses
and Common Office Expenses shall also take into account the addition of the
Facilities to the Building; provided, however, that the cost of construction of
such Facilities, the depreciation of such Facilities, and financing expenses
related to the construction of such Facilities shall not be considered Operating
Expenses or Common Office Expenses. Tenant agrees to accept the inconvenience
of noise, dust and other disturbances from the construction of such Facilities;
provided, however, that Landlord shall use reasonable efforts to minimize such
inconvenience.
60. Guaranty. If Tenant is a corporation, partnership or other
--------
business entity, it is understood and acknowledged that Landlord would not have
entered into this Lease, but for the delivery to Landlord of a guaranty of this
Lease in the form attached hereto as Exhibit "D" and made a part hereof for all
purposes, which is hereby incorporated by reference into and made a part of this
Lease.
61. No Party Deemed Drafter. The parties agree that neither party
-----------------------
shall be deemed to be the drafter of this Lease and in the event this Lease is
ever construed by a court of law, such court shall not construe this Lease or
any provision hereof against either party as the drafter of this Lease.
END OF GENERAL CONDITIONS
<PAGE>
EXHIBIT "A"
[Diagram Description: The floor plan of the 8th floor of
The Commerce Tower at 1440 Kapiolani Boulevard, Honolulu, Hawaii.]
<PAGE>
EXHIBIT "B"
TENANT'S CONSTRUCTION OBLIGATIONS
Construction and Improvements By Tenant
---------------------------------------
A. General Obligations of Tenant: Tenant shall construct Tenant's
-----------------------------
improvements in the Premises in compliance with paragraph 16 of Section III of
the Lease and Section B of this Exhibit. Tenant shall also submit to Landlord a
true copy of the construction contract(s) with Tenant's contractor(s) prior to
the start of construction.
B. Interior Finishes:
-----------------
1. Floor Coverings. Standard floor covering shall be commercial
---------------
quality carpet, and shall not be affixed to the floor in any manner except by a
tack strip, paste or other materials which may be easily removed with water.
The use of cement or other similar adhesive materials is expressly prohibited.
The method of affixing the floor covering to the floor shall be specified in the
plans and specifications submitted to Landlord for Landlord's written approval.
The expense of repairing any damage or removing any floor covering affixed to
the Premises in violation of this provision, shall be borne by the Tenant.
Requests for non-standard floor coverings shall be submitted to the Landlord for
Landlord's written approval.
2. Base. A base material (e.g., vinyl, wood) shall be used on
----
all walls and partitions.
3. Interior Partitions. Partitions shall be constructed of
-------------------
metal stud and drywall or other similar forms of construction material in
accordance with the Uniform Building Code. Non-rated partitions are allowed
within the Premises and shall be installed by Tenant in accordance with building
standards established by Landlord. Request for non-standard interior partitions
shall be submitted to Landlord for Landlord's written approval. Partitions
meeting the interior face of the glazed external Building wall or column shall
terminate only at the centerline of window mullions or columns. Tenant shall
install, to the extent the same have not already been installed, the studs for
all demising walls separating Tenant's premises from other premises on multi-
tenant floors. Tenant will be responsible for one-half (1/2) of the cost of
installing the studs for Tenant's demising walls or, if Tenant is only required
to install the studs for one (1) demising wall, Tenant shall be responsible for
the entire cost of installation of such studs.
4. Interior Doors. Interior doors and frames within the
--------------
Premises shall be specified by Landlord, and purchased and installed by Tenant.
5. Finish Hardware. Butt hinges, lock sets, latch sets and knob
---------------
sets for interior doors within the Premises shall be specified by Landlord, and
purchased and installed by Tenant.
6. Lighting Pattern. Lighting pattern shall conform to the task
----------------
lighting orientation and design as established by Landlord.
7. Office/Store Furniture and Fixtures. All furniture and
-----------------------------------
fixtures exposed to public view must be new or fully reconditioned and suitable
for use within a building of the location and character of the Building. Design
of furniture, fixtures, equipment and interiors to allow for acceptable view
through Tenant entries/storefronts shall be reviewed and approved by Landlord.
<PAGE>
8. Concrete Floors. Holes for electrical and telephone services
---------------
or chases may be cut through concrete floor slabs only with the prior written
approval of and under the direction of Landlord and Landlord's consultants. All
floor penetrations shall be by core drilling only, and not by jack hammering.
All floor penetrations shall be grouted with an expanding concrete grout to
assure a water tight seal. Tenant shall be liable for any damage caused by the
floor penetration to all space below during and after construction.
9. Concrete Walls. Chases and holes shall not be cut in any
--------------
concrete wall or column without the prior written approval of and under the
direction of Landlord and Landlord's consultants.
<PAGE>
EXHIBIT "C"
RULES AND REGULATIONS
RULES AND REGULATIONS: These rules and regulations have been adopted for
---------------------
the purpose of insuring order and safety on the Property and to maintain the
rights of Tenant and Landlord. Landlord reserves the right to modify,
supplement or rescind any of these rules for the safety, care and cleanliness of
the Property and for the preservation of good order therein. Landlord may waive
any one (1) or more of these rules and regulations for the benefit of any
particular Tenant or tenants, but no such waiver by Landlord shall be construed
as a waiver of such rules and regulations in favor of any other Tenant or
tenants, nor prevent Landlord from thereafter enforcing any such rules and
regulations against any or all of the tenants of the Property. Each tenant
shall be liable for injury or damage caused by the infraction of any of these
rules by it, its employees, agents or invitees, and Landlord may repair such
damage, charging the cost of the same to such tenant, which amount shall be
added to rent due for the ensuing month. 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, these terms, covenants, agreements and conditions of any lease of
premises on the Property.
Access: Office areas will be open from 7:00 a.m. to 6:00 p.m. weekdays and
------
8:00 a.m. to 1:00 p.m. Saturdays. On Sundays, holidays and after regular open
hours, access to the office areas without proper and acceptable identification
may be refused.
Closing Premises: Each Tenant shall see that his demised Premises are
----------------
securely locked and will exercise caution to insure that all water faucets and
powered equipment are shut off before Tenant or Tenant's employees leave the
Property, so as to prevent waste or damage.
Common Rooms: Rooms used in common by Tenant and Landlord, if any, shall
------------
be subject to regulations adopted by Landlord.
Dedication - Prevention Of: Landlord reserves the right to close off any
--------------------------
and all of the plazas, promenades and sidewalks of the Property for twenty-four
(24) hours once every five (5) years to prevent dedication.
Deliveries and Service Area: Only hand trucks equipped with rubber tires
---------------------------
and sideguards will be permitted on the Property. All deliveries shall only be
brought through the service entrance of the Property. All deliveries requiring
exclusive use of an elevator shall be scheduled through the Management Office
and in any event such use will not be permitted without the use of elevator
protective padding and such use will not be permitted between the hours of 7:30
a.m. 8:30 a.m., 11:30 a.m.-1:30 p.m. and 3:30-5:00 p.m.
Heavy Items: All carrying in or out of freight, packages or bulky matter
-----------
of any description must take place only during hours selected by Landlord and
then only with prior notice to and approval by Landlord. No object beyond the
rated capacity of elevators shall be brought on the Property. Landlord shall
have the right to prescribe the location of heavy objects and if considered
necessary, the means to distribute the weight thereof (to no more than fifty
(50) pounds per square foot unless written approval is granted by the Landlord).
All costs incurred will be charged to Tenant. Any damage to the Property caused
by any such Tenant or its contractor, delivery or moving service, will be
repaired at such Tenant's expense.
Directories: The Tenant directories are provided for displaying the name
-----------
and location of each Tenant. A charge will be made for the initial listing and
for each name added to or other change to Tenant's name. The initial listing
and all such additions or changes will require
<PAGE>
Landlord's approval. Tenant shall provide Landlord with a written request for
any additions or changes to the directory.
Electrical Air-Conditioning Systems: No Tenant shall alter the standard
-----------------------------------
building lighting or air-conditioning system or install any special wiring or
abnormal power consuming equipment without written approval of Landlord. If
air-conditioning and/or power is used out of normal operating hours or there is
abnormal consumption thereof, the tenant involved shall pay on demand a
reasonable charge. The air-conditioning system will operate without additional
charge to Tenant during regular open hours.
After Hours Services: Air conditioning service is available for Tenant
--------------------
after normal open hours. Landlord shall make an extraordinary charge for the
after-hours services which shall be based on the rate schedule or energy
agreement in effect for such services or on the actual premium cost of providing
such services, including the cost of labor and fringe benefits for required
operating personnel, electricity at the per kilowatt hour rate applicable to the
Property, water and sewerage at the posted rate, supplies and materials, if any,
and any other direct premium costs associated with providing such services in
situations where no rate schedule has been set or energy agreement has been
entered into.
Janitorial Service: No one other than those approved in writing by
------------------
Landlord shall be permitted to perform any janitorial service on the Property.
Janitorial service, if supplied by Landlord, shall not include shampooing or
spotcleaning of carpets, cleaning of mini blinds, nor movement of furniture.
Landlord shall not be responsible for any loss of or damage to any Tenant's
property by the janitor, its employees or any other person performing janitorial
services.
Keys and Locks: No locks other than those provided by Landlord shall be
--------------
placed on any doors without the written consent of the Landlord. Two (2) keys
per lock will be furnished to Tenant by Landlord. Lock cylinders and keys shall
be changed by Landlord at Tenant's expense upon receipt of written request from
Tenant. All keys will be surrendered upon termination of Lease. Janitors and
contract cleaners will be provided with a passkey to Tenant's premises unless
Tenant declines in writing and thereby understands that Landlord will not be
responsible for providing janitorial services and emergency access to that
demised area. All requests for duplication of keys will be submitted to the
building manager.
Obstruction of Common Area: All common areas will be used only for ingress
--------------------------
and egress to the demised premises. Landlord retains the right to control and
prevent access onto the property by any and all persons other than those persons
having a legal right to ingress and egress from the demised premises. Only
persons authorized by Landlord will be permitted in areas housing mechanical,
electrical or equipment of any kind, or the roof.
Animals: No animals or pets are allowed on the Property or in the demised
-------
premises at any time, except for Seeing Eye dogs.
Bicycles, Mopeds and Motorcycles: Bicycles, mopeds and motorcycles are to
--------------------------------
be parked only in those areas so designated within the parking garage structure.
Removal of Property: Each Tenant shall deliver a list of any fixtures or
-------------------
improvements in the premises which the Tenant desires to remove from the
Property, and the list must be approved in writing by the Landlord before any
such fixture or improvements is removed.
Repairs/Alterations/Additions to Premises: Prior to commencement of
-----------------------------------------
construction for any repair, alterations or additions to the Premises, Tenant
shall submit to Landlord in writing for Landlord's written approval the
following: 1) Work Description; 2) Work Schedule; 3) Names of Architect, General
Contractor and any Sub-Contractors; 4) Working Drawings and
<PAGE>
Specifications; 5) Copy of Performance Bond and Insurance Certificate (by
Contractor); and 7) Copy of Completion Bond (by Tenant). Tenant shall also
provide Landlord with lien releases upon request. Only contractors approved by
Landlord shall be permitted to carry out any repairs, alterations or additions
within the Premises and/or on the Property.
Maintenance Requests: The requirements of a Tenant will be attended to
--------------------
only upon application by such Tenant to Landlord. Landlord's employees will not
perform any work outside of regular duties unless under special instructions
from the Landlord or its authorized agent.
Window Displays: Tenant will not use any method or type of display or
---------------
window advertising without Landlord's prior written approval which shall only be
given if the proposals are considered by Landlord to be consistent with the
character of the Property.
Signs, Screens and Awnings: No notice or advertisement visible from the
--------------------------
exterior of the Property or premises will be permitted without prior written
approval of Landlord. All graphics, curtains, blinds, shades or screens visible
from the exterior of the Property or any premises demised, where permitted,
shall conform to the standards as specified by Landlord from time to time. In
the event of the violation of this rule by any Tenant, Landlord may remove same
without any liability, and may charge the expense incurred thereby to the Tenant
involved.
Holidays: The following holidays shall be observed by the Property. The
--------
Property will be secured, a security officer will be on duty, and air
conditioning and other services will not be provided on such days.
New Year's Day
Memorial Day
Independence Day
Labor Day
Thanksgiving Day
Christmas Day
The above listed holidays may be changed from time to time and the
designated holidays shall be based on the predominant practice in the business
community as determined by Landlord.
Solicitors: Landlord reserves the right to eject from the Property, any
----------
solicitors, canvassers or peddlers and any other class of persons who, in the
judgment of Landlord, are annoying or interfering with any of Tenant's or
Landlord's operations or who are otherwise undesirable. Canvassing, peddling,
soliciting and distribution of any written materials on the Property are
prohibited and each Tenant shall cooperate to prevent the same.
Trash: Each Tenant shall store all its trash and garbage for removal by
-----
janitors within the interior of its demised premises. No material, rubbish or
debris shall be placed in trash boxes or receptacles if such materials are of
such nature as to emit an offensive odor or be in violation of any law or
ordinance governing disposal of same. All Tenant construction debris shall be
removed from Premises and the Property by Tenant, its contractors or its
employees.
Use: Except with prior written consent of Landlord, no Tenant shall
---
conduct any business other than that specifically provided for in its lease. No
Tenant shall permit its demised premises to be used in a manner offensive or
objectionable to the other Tenants or Landlord. No cooking shall be done or
permitted in the Premises nor shall Tenant cause or permit any unusual or
objectionable odors to be produced upon or permeate from its Premises. No
Tenant shall at any time bring, allow or keep upon the Premises any flammable,
combustible or explosive fluid,
<PAGE>
chemical or substance in such quantities as may endanger or imperil the demised
premises or any other premises or the property or lives of other persons. No
Tenant shall make or permit to be made any unreasonable vibration, unseemly
noise or disturb or interfere with occupants of this or adjoining buildings or
premises or those having business with them whether by the use of any business
machines and other equipment, musical instruments, radio or television sets,
phonographs, signing or the making of any disturbing sounds. The Premises shall
not be used for lodging or sleeping.
Violations: Landlord shall not be responsible to any Tenant for the non-
----------
observance or violation of any rules and regulations by any other Tenant or
other person. Tenant shall be deemed to have read these rules and regulations
and to have agreed to abide by them as a condition to its occupancy of the space
leased.
Washrooms: The lavatory facilities and other water apparatus shall not be
---------
used for any purpose other than that for which they were constructed. The
expense to repair any breakage, stoppage or damage resulting from the violation
of this rule shall be borne by the Tenant whose employees or visitors shall have
caused the expense.
Water: Water will be supplied by the Landlord for drinking and toilet
-----
purposes only.
Windows and Doors: No windows, glass doors or any other light sources that
-----------------
reflect into the lobbies or other places of the Property shall be obstructed or
covered except in a manner approved in writing by Landlord.
END OF RULES AND REGULATIONS
<PAGE>
EXHIBIT "D"
[Intentionally Omitted]
<PAGE>
AMENDMENT OF COMMERCE TOWER OFFICE LEASE
(CHEAP TICKETS, INC.)
This AMENDMENT OF COMMERCE TOWER OFFICE LEASE is made this 14th day of
June, 1996 by and between TOSEI PROPERTIES, INC., a Hawaii corporation, whose
principal place of business and post office address is at 1440 Kapiolani
Boulevard, Suite 1000, Honolulu, Hawaii 96813 ("Landlord") and CHEAP TICKETS,
INC., a Hawaii corporation, whose principal place of business and post office
address is at 1440 Kapiolani Boulevard, Suite 800, Honolulu, Hawaii 96813
("Tenant");
W I T N E S S E T H:
- - - - - - - - - -
WHEREAS, Tenant and Landlord herein entered into an unrecorded
Commerce Tower Office Lease dated July 2, 1995 (the "Lease"), covering office
space identified as Suite No. 800 consisting of approximately ten thousand one
hundred fifty-eight (10,158) rentable square feet of floor area (the "Original
Premises") located on the eighth floor of the building known as The Commerce
Tower (the "Building");
WHEREAS, Landlord and Tenant are desirous of providing for the rental
to Tenant of additional premises in the spaces identified as Suite Nos. 810, 825
and 828 and consisting of approximately one thousand sixty-eight (1,068)
rentable square feet (the "810 Additional Premises"), eight hundred sixty-five
(865) rentable square feet (the "825 Additional Premises") and one thousand two
hundred two (1,202) rentable square feet (the "828 Additional Premises" and,
collectively with the "810 Additional Premises" and the "828 Additional
Premises," the "Additional Premises");
NOW, THEREFORE, in consideration of the premises, and in consideration
of the covenants and conditions contained herein, Landlord and Tenant hereby
agree as follows:
1. Definitions. Capitalized terms not otherwise defined herein
shall have the meanings ascribed to such terms in the Lease.
2. Additional Premises. (a) For the period commencing from and
after the Effective Date hereinafter defined and ending on the Termination Date
provided for in the Lease, Landlord does hereby demise and lease the Additional
Premises unto Tenant, and Tenant does hereby lease and hire the Additional
Premises from Landlord. For purposes of this Amendment, the Effective Date
shall be the date on which Landlord relocates the existing tenants from the 825
Additional Premises and the 828 Additional Premises and completes building
standard "turn-key" improvements for all of the Additional Premises built to the
same standard as Tenant's existing premises.
Subject to subparagraph 2(b) below, the Additional Premises shall,
from and after the Effective Date, be added to the Premises demised under the
Lease, shall be leased by Landlord to Tenant for a term commencing on the
Effective Date and ending on the Termination Date, and shall be subject to all
of the terms, covenants and provisions of the Lease, except as is expressly
provided for herein.
(b) Anything herein to the contrary notwithstanding, Landlord and
Tenant agree as follows with respect to the lease of the Additional Premises:
(1) The lease by Landlord to Tenant of the Additional Premises
is expressly made contingent on Landlord reaching an agreement satisfactory to
Landlord for the
<PAGE>
relocation of the existing tenants from the 825 Additional Premises and the 828
Additional Premises to comparable premises in the Building.
(2) If, on or before the expiration of sixty (60) days from the
execution of this Amendment by Landlord and Tenant, Landlord fails to agree with
the existing tenants on the terms and conditions for relocation of such tenants
from the 825 Additional Premises and the 828 Additional Premises, neither
Landlord nor Tenant shall have any obligation with respect to the lease of the
Additional Premises hereunder.
(3) Landlord shall make reasonable efforts to reach satisfactory
agreements with the existing tenants of the 825 Additional Premises and the 828
Additional Premises.
3. Monthly Rent for Additional Premises. Monthly Base Rent for the
Additional Premises from and after the Effective Date shall be $3,009.60 per
month.
4. Operating Expenses and Common Office Expenses. Tenant's Pro Rata
Share of Operating Expenses and Tenant's Proportionate Share of Common Office
Expenses with respect to the Additional Premises shall be 2.5425% and 2.7768%,
respectively.
On the Effective Date, Tenant's Pro Rata Share of Operating Expenses
and Tenant's Proportionate Share of Common Office Expenses under the Lease shall
be increased by the applicable percentages set forth above.
5. Conveyance Tax; General Excise Tax. Tenant shall, pursuant to
paragraph 6 of Section III. of the Lease, be responsible for the payment of any
conveyance tax imposed by the State of Hawaii with respect to the Additional
Premises provided for herein and shall also be responsible for the Hawaii
general excise tax and all other similar gross receipts taxes payable under said
paragraph 6.
6. Security Deposit. Tenant shall deposit, on each applicable
Effective Date, $6,014.85 as a security deposit for the Additional Premises.
7. Option to Renew; First Opportunity to Lease. The provisions of
(J)(2) ("Option to Renew") of Section I. of the Lease shall, on the demise of
each Additional Premises to Tenant, also be applicable to such Additional
Premises. The provisions of (J)(3) ("First Opportunity to Lease") of Section I.
of the Lease shall, on the demise of the Additional Premises, be deleted from
the Lease.
8. Parking Stalls. For the period commencing from and after the
Effective Date herein defined and ending on the Termination Date provided for in
the Lease, Landlord and Tenant hereby agree that Paragraph (I) of Section I. of
the Lease is hereby amended in its entirety to read as follows:
(I) Number of parking stalls for automobiles to be rented to
Tenant: Three (3) reserved and twenty-three (23) unreserved
stalls for a total of twenty-six (26) parking stalls at
prevailing rates.
Two (2) of the three (3) reserved parking stalls shall be
free for the original term of this Lease.
Landlord shall make additional parking stalls available for
rental by Tenant at the Landlord's prevailing rates if
additional parking stalls are required by Tenant.
<PAGE>
9. Ratification of Lease. Except as further modified hereunder, said
Lease is hereby ratified, confirmed and approved and shall remain in full force
and effect.
10. Counterparts. This Amendment of Commerce Tower Office Lease may
be executed in several counterparts, each of which shall be deemed an original,
but all of which shall constitute one and the same instrument. In addition,
this Amendment of Commerce Tower Office Lease may contain more than one
counterpart of the signature page and this Amendment of Commerce Tower Office
Lease may be executed by the affixing of the signatures of each of the parties
to one of such counterpart signature pages; and all of such counterpart
signature pages shall be read as though one, and they shall have the same force
and effect as though all of the signers had signed a single signature page.
IN WITNESS WHEREOF, the parties hereto have executed this Amendment of
Commerce Tower Office Lease (Cheap Tickets, Inc.) on the day and year first
above written.
TOSEI PROPERTIES, INC.,
a Hawaii corporation
By /s/ Shigeo Hone
-----------------------------------
Name: Shigeo Hone
-----------------------------------
Title: Attorney-in-Fact
-----------------------------------
Landlord
CHEAP TICKETS, INC.,
a Hawaii corporation
By /s/ Tammy Ishibashi
-----------------------------------
Name: Tammy Ishibashi
-----------------------------------
Title: Treasurer
-----------------------------------
Tenant
<PAGE>
SECOND AMENDMENT OF COMMERCE TOWER OFFICE LEASE
(CHEAP TICKETS, INC.)
This SECOND AMENDMENT OF LEASE is made this 9th day of October, 1997, by
and between TOSEI PROPERTIES, INC., a Hawaii corporation, whose principal place
of business and post office address is at 1440 Kapiolani Boulevard, Suite 1000,
Honolulu, Hawaii 96814 ("Landlord") and CHEAP TICKETS, INC., a Hawaii
corporation, whose principal place of business and post office address is at
1440 Kapiolani Boulevard, Suite 800, Honolulu, Hawaii 96814 ("Tenant");
W I T N E S S E T H:
- - - - - - - - - -
WHEREAS, Tenant and Landlord herein entered into an unrecorded Commerce
Tower Office Lease, dated July 02, 1995 (the "Lease"), as amended by Amendment
Of Lease dated June 14, 1996, covering certain premises (the "Original Premises"
and "Additional Premises), located in the building known as The Commerce Tower
(the "Building"); and
WHEREAS, the parties hereto are desirous of further amending the Lease for
the rental to Tenant of additional premises more particularly described herein;
NOW, THEREFORE, in consideration of the premises, and in consideration of
the covenants contained herein, Landlord and Tenant hereby agree as follows:
1. Definitions. Capitalized terms not otherwise defined herein shall
have the meanings ascribed to such terms in the Lease.
2. 1225 Additional Premises. Suite 1225. For the period commencing from
and after the date on which this Second Amendment of Commerce Tower
Office Lease is fully executed (hereinafter referred to as the "Suite
1225 Commencement Date") and ending on the Termination Date provided
for in the Lease, Landlord does hereby demise and lease unto Tenant,
and Tenant does hereby lease and hire from Landlord, Suite 1225,
consisting of approximately three thousand eighty-eight (3,088)
rentable square feet of floor area on the twelfth (12th) floor, as
indicated on the floor plan attached hereto as Exhibit "A", and made a
part hereof for all purposes (hereinafter referred to as the " 1225
Additional Premises"). The 1225 Additional Premises shall, from and
after the Suite 1225 Commencement Date, be added to the premises
demised under the Lease and shall be subject to all of the terms,
covenants and provisions of the Lease, except as is expressly provided
for herein.
3. Monthly Base Rent for Additional Premises. For the period commencing
from and after the Suite 1225 Commencement Date and up to and
including the Termination Date, Tenant agrees to pay to Landlord, as
Monthly Base Rent for 1225 Additional Premises, the sum of THREE
THOUSAND ONE HUNDRED EIGHTEEN AND 88/100 DOLLARS ($3,118.88).
4. Operating Expenses and Common Office Expenses.
A. Tenant's Pro Rata Share of Operating Expenses (as that term is
defined in the Lease) with respect to the 1225 Additional
Premises, subject to modification as provided in Paragraph 9 of
Section III of the Lease, is two and five thousand twenty-six ten
thousandths percent (2.5026%). Tenant
<PAGE>
shall pay with respect to the 1225 Additional Premises, Tenant's
share of estimated monthly Operating Expenses in the sum of ONE
THOUSAND NINE HUNDRED SEVENTY-TWO AND 97/100 DOLLARS ($1,972.97)
for the building fiscal year ending April 30, 1998.
B. Tenant's Pro Rata Share of Common Office Expenses (as that term
is defined in the Lease) with respect to the 1225 Additional
Premises, subject to modification in Paragraph 9 of Section III
of the Lease, is two and seven thousand three hundred thirty-
eight ten thousandths percent (2.7338%). Tenant shall also pay,
with respect to the 1225 Additional Premises, Tenant's share of
estimated monthly Common Office Expenses in the sum of EIGHT
HUNDRED SIXTY-TWO AND 30/100 DOLLARS ($862.30) for the building
fiscal year ending April 30, 1998.
5. Rent Abatement. For the period from the Suite 1225 Commencement Date
through February 28, 1998, the payment of Monthly Base Rent, Operating
Expenses and Common Office Expenses due in connection to 1225
Additional Premises shall be abated.
6. Security Deposit. Tenant shall deposit $6,202.20 as a security deposit
for the 1225 Additional Premises.
7. General Excise Tax. Tenant shall also pay to Landlord as additional
rent, together with each payment of rental, real property taxes and
other charges payable by Tenant under the Lease with respect to the
1225 Additional Premises, all amounts payable with respect to general
excise taxes, as provided in Paragraph 6 of Section III of the Lease.
8. Option to Renew; First Opportunity to Lease. The provisions of (J)(2)
("Option to Renew") of Section I. of the Lease shall also be
applicable to the 1225 Additional Premises. If at any time during the
term of this Lease, any of the remaining spaces on the twelfth (12')
floor of the Building become available for lease, Landlord shall give
written notice to Tenant of the availability of such space for lease
and Tenant will have five (5) business days to submit a written
proposal to Landlord to lease said premises.
9. Tenant Improvements. 1225 Additional Premises shall be leased in "as-
is" condition and all the improvements to be made to 1225 Additional
Premises shall be the sole responsibility of Tenant subject to
Landlord's approval of the plans and specifications of the
improvements.
10. Temporary Space. If deemed necessary, the Landlord shall permit Tenant
to occupy suite 1120 until suite 1225 is reasonably ready for
occupancy or November 30, 1997, whichever shall occur first. Tenant
shall pay no gross rent for suite 1120 during this temporary occupancy
of said suite. Tenant may occupy suite 1120 upon the full signature of
the Second Amendment of Commerce Tower Office Lease and Landlord's
receipt of the Security Deposit and Certificate of Insurance required
under the Lease. Landlord reserves the right to show suite 1120 to
prospective tenants during Tenant's temporary occupancy.
11. Parking Stalls. For the period commencing from and after the Suite
1225 Commencement Date herein defined and ending on the Termination
Date provided for in the Lease, Landlord and Tenant hereby agree that
Paragraph (I) of Section I. of the Lease is hereby amended in its
entirety to read as follows:
<PAGE>
(I) Number of parking stalls for automobiles to be rented to Tenant:
Three (3) reserved and twenty-nine (29) unreserved stalls for a
total of thirty-two (32) parking stalls at prevailing rates.
Two (2) of the three (3) reserved parking stalls shall be free
for the original term of this Lease.
Landlord shall make additional parking stalls available for
rental by Tenant at the Landlord's prevailing rates if additional
parking stalls are required by Tenant.
12. Ratification of Lease. Except as set forth herein, the Lease shall
continue in full force and effect in accordance with its terms with
respect to the remaining property under the Lease.
IN WITNESS WHEREOF, the parties hereto have executed these presents on the
day and year first above written.
TOSEI PROPERTIES, INC.
a Hawaii corporation
By: /s/ Shigeo Hone
------------------------------------------
Shigeo Hone
"Landlord"
CHEAP TICKETS, INC.
a Hawaii corporation
By: /s/ Michael J. Hartley
-----------------------------------------
Its
"Tenant"
<PAGE>
EXHIBIT "A"
-----------
FLOOR PLAN
[Diagram Description: The floor plan of the 12th floor of
The Commerce Tower at 1440 Kapiolani Boulevard, Honolulu, Hawaii.]
<PAGE>
EXHIBIT 10.5
THIRD AMENDMENT OF COMMERCE TOWER OFFICE LEASE
(CHEAP TICKETS, INC.)
This THIRD AMENDMENT OF COMMERCE TOWER OFFICE LEASE (the "Third Amendment")
is made this 2nd day of December, 1998, by and between TOSEI PROPERTIES,
INC., a Hawaii corporation, whose principal place of business and post office
address is at 1440 Kapiolani Boulevard, Suite 1000, Honolulu, Hawaii 96814
("Landlord") and CHEAP TICKETS, INC., a Hawaii corporation, whose principal
place of business and post office address is at 1440 Kapiolani Boulevard, Suite
800, Honolulu, Hawaii 96814 ("Tenant");
WHEREAS, Tenant and Landlord herein entered into an unrecorded Commerce
Tower Office Lease dated July 2, 1995 (the "Lease"), covering office space
identified as Suite No. 800 located in the building known as The Commerce Tower
(the "Building"), as amended by an unrecorded Amendment of Commerce Tower Office
Lease dated June 14, 1996 covering additional premises in the spaces identified
as Suite Nos. 810, 825 mid 828, as further amended by an unrecorded Second
Amendment of Commerce Tower Office Lease dated October 9, 1997 covering
additional premises in the space identified as Suite No. 1225 (the Amendment and
the Second Amendment described above being collectively referred to as the
"Prior Amendments").
WHEREAS, Landlord and Tenant are desirous of providing for the rental to
Tenant of expansion premises in the spaces identified as Suite Nos. 905, 921 and
925 and consisting of approximately two thousand two hundred seventy-two (2,272)
rentable square feet, (the "905 Expansion Premises"), six hundred fifty-eight
(658) rentable square feet (the "921 Expansion Premises") and seven hundred two
(702) rentable square feet (the "925 Expansion Premises" and. collectively with
the 905 Expansion Premises and the 921 Expansion Pre the "Expansion Premises");
NOW, THEREFORE, in consideration of the premises, and in consideration of
the covenants and conditions contained herein, Landlord and Tenant hereby agree
as follows:
1. Definitions. Capitalized terms not otherwise defined herein shall
have the meanings ascribed to such terms in the Lease.
2. Expansion Premises. (a) For the period commencing from and after the
Effective Date hereinafter defined and ending on the Termination Date as defined
hereinbelow, Landlord does hereby demise and lease the Expansion Premises unto
Tenant, and Tenant does hereby lease and hire the Expansion Premises from
Landlord. For purposes of this Third Amendment, the Effective Date shall be the
date on which terminates its lease of the 921 Expansion Premises with the
existing tenant. Subject to subparagraph 2(b) below, the Expansion Premises
shall, from and after the Effective Date, be added to the Premises dernised
under the Lease and the Prior Amendments, shall be leased by Landlord to Tenant
for a term commencing on the Effective Date and ending on the Termination Date,
as defined in paragraph 3 below, and shall be subject to all of the terms,
covenants and provisions of the Lease, except as is expressly provided for
herein.
<PAGE>
(b) Anything herein to the contrary notwithstanding, Landlord and
Tenant agree as follows with respect to the lease of the Expansion Premises:
(i) The lease by Landlord to Tenant of the Expansion Premises
is expressly made contingent on Landlord reaching in agreement satisfactory
to Landlord for the termination of the lease of the 921 Expansion Premises
with the existing tenant.
(ii) If, on or before the expiration of fifteen (15) days from
the execution of this Third Amendment by Landlord and Tenant, Landlord
fails to terminate the lease of the 921 Expansion Premises with the
existing tenant on the term and conditions satisfactory to Landlord,
neither Landlord nor Tenant shall have any obligation with respect to the
lease of the Expansion Premises hereunder.
(iii) Landlord shall make reasonable efforts to terminate the
Lease of the 921 Expansion Premises upon terms and conditions satisfactory
to Landlord.
3. Termination Date. For the purposes of the Expansion Premises and all
other premises demised to Tenant under the Lease and Prior Amendments thereto,
the Termination Date shall be December 31, 2003; provided, however, in the event
the Expansion Date, as defined in paragraph 12 hereof is later than January 31,
1999, the Termination Date shall be extended for that number of days following
January 31, 1999 through the Expansion Date.
4. Monthly Rent for Expansion Premises. Monthly Base Rent for the
Expansion Premises from and after the Effective Date shall be $3,486,72 per
month.
5. Operating Expenses and Common Office Expenses. Tenant's Pro Rata Share
of Operating Expenses and Tenant's Proportionate Share of Common Office Expenses
with respect to the Expansion Premises shall be 2.9366% and 3.2137%,
respectively. On the Effective Date, Tenant's Pro Rata Share of Operating
Expenses and Tenant's Proportionate Share of Common Office Expenses under the
Lease shall be increased by the applicable percentages set forth above.
6. Conveyance Tax; General Excise Tax. Tenant shall, pursuant to
paragraph 6 of Section III. of the Lease, be responsible for the payment of any
conveyance tax imposed by the State of Hawaii with respect to the Expansion
Premises provided for herein and shall also be responsible for the Hawaii
general excise tax and all other similar gross receipts taxes payable under said
paragraph 6.
7. Security Deposit. Tenant shall deposit, on the Effective Date,
$7,131.54 as a security deposit for the Expansion Premises.
8. Option to Renew. The provisions of paragraph(J)(2) ("option to
Renew") of Section I. of the Lease shall, on the demise of the Expansion
Premises to Tenant, also be applicable to such Expansion Premises.
<PAGE>
9. First Opportunity to Lease. (a) If at any time through December 31,
2000, any of the remaining spaces on the ninth floor of the Building become
available for lease (the "Opportunity Space"), which Opportunity Space consists
of Suite Nos. 900, 901, 915 and 920 (Suite 920 is currently leased to Levi-
Strauss & Co. and subleased to Tenant herein), Landlord shall notify Tenant of
the availability of such space for lease and the terms and conditions upon which
Landlord wishes to lease such space; provided, however, that:
(i) the expiration of the term for the demise of such space
shall be December 31, 2003;
(ii) the monthly base rent per square foot for such space shall
be the same as the Monthly Base Rent then being charged under this
Amendment;
(iii) Landlord shall provide Tenant with a Team Improvement
Allowance in an amount equal to the product of (A) the number of rentable
square feet, (B) $4.00 and (C) the number of years (and fraction thereof)
of the term of the lease;
(iv) fifty percent (50%) of the Tenant Improvement Allowance
shall be paid by Landlord upon substantial completion of the Tenm's
improvements, and the remaining fifty percent (50%) shall be paid in the
form of a credit towards Tenant's Monthly Base Rent commencing on the date
of said substantial completion;
(v) notwithstanding anything contained herein to the contrary,
such space shall be occupied and used only by Tenant, and Tenant shall not,
for a period of six (6) months from the commencement of the term of this
Lease for such additional space, sublease, assign or allow any other person
to occupy or use such space, or any portion thereof.
(b) Tenant shall have the right within thirty (30) days after receipt
of Landlord's written notification to lease such space on the term and
conditions set forth in Landlord's written notification. If Tenant shall not so
elect within said thirty (30) day period, Landlord may then lease the premises
to any other person, on terms and conditions established by Landlord in its sole
discretion. Said terms and conditions shall not necessarily be limited to the
terms and conditions set forth in landlord's written notification.
(c) Tenant agrees that it will not request that Landlord relocate any
of the tenants currently occupying Suite Nos. 900, 901 or 915 prior to the dates
on which the term of the respective tenant's lease terminates.
(d) Tenant agrees that its first opportunity to lease may not be
transferred or assigned without the prior written consent of Landlord, which may
be withheld in Landlord's sole and absolute discretion, and any such attempted
transfer or assignment without such consent shall be null and void.
<PAGE>
(e) Tenant's first opportunity to lease the twelfth (12th) floor of
the Building, as set forth in paragraph 8 of the Second Amendment of Commerce
Tower Office Lease, is hereby deleted in its entirety.
10. Shuko Moving Cost. Landlord shall bear the first TWENTY THOUSAND AND
NO/100 DOLLARS ($20,000) of the cost of relocating the existing tenant from
Suite No. 921. Landlord and Tenant shall share equally in all such costs in
excess of TWENTY THOUSAND AND NO/100 DOLLARS ($20,000.00).
11. Tenant Improvement Allowance. Landlord shall provide Tenant with a
Tenant Improvement Allowance of THIRTY-ONE THOUSAND AND NO/100 DOLLARS
($31,000.00) to reimburse Tenant for tenant improvements reasonably incurred by
Tenant to put the Expansion Premises in condition suitable for the conduct of
Tenant's business in accordance with plans and specifications reasonably
approved by Landlord pursuant to the Lease. The foregoing allowance shall be
disbursed to Tenant against the delivery by Tenant to Landlord of paid invoices
showing such costs incurred and paid by Tenant.
12. Rent Abatement. Notwithstanding anything herein to the contrary
Landlord specifically agrees as follows:
(a) For the period commencing on the Commencement Date and ending on
the date on which Tenant's improvements have been substantially completed and a
Certificate of Occupancy has been issued with respect to the Additional
Premises, but in no event later than March 31, 1999 (the "Expansion Date"), the
payment of Monthly Base Rent shall be abated.
(b) On the Expansion Date, Landlord shall credit the sum of THIRTY-
ONE THOUSAND AND N0/100 DOLLARS ($31,000.00) towards Tenant's Monthly Base Rent
payable hereunder.
13. Rent Adjustment. With respect to the premises demised under the Lease
and Prior Amendments thereto, being Suite Nos. 800, 810, 825, 828 and 1225, the
Monthly Base Rent shall, for the period commencing on the Expansion Date and
ending on the Termination Date, be as follows:
Suite No. Monthly Base Rent
800 $9,751.68
810 $1,025.28
825 $ 830.40
828 $1,153.92
1225 $2,964.48
14. Suite 1225 Termination of Lease. Upon at least thirty (30) days' prior
written request by Tenant, Landlord shall terminate the Lease with respect to
Suite No. 1225; provided, however, that Tenant shall have entered into a lease
of at least 3,000 square feet of Opportunity Space on the ninth (9th) floor on
the terms and conditions set forth in paragraph 9 hereof.
<PAGE>
15. Ratification of Lease. Except as further modified hereunder and the
Prior Amendments, the Lease is hereby ratified, confirmed and approved and shall
remain in full force and effect.
16. Counterparts. This Third Amendment may be executed in several
counterparts, each of which shall be deemed an original, but all of which shall
constitute one and the same instrument. In addition, this Third Amendment may
contain more than one counterpart of the signature page and this Third Amendment
may be executed by the affixing of the signatures of each of the parties to one
of such counterpart signature pages; and all of such counterpart signature pages
shall be read as though one, and they shall have the same force and effect as
though all of the signers had signed a single signature page.
IN WITNESS WHEREOF, the parties hereto have executed this Third Amendment
of Commerce Tower Office Lease (Cheap Tickets, Inc.) on the day and year first
above written.
TOSEI PROPERTIES, INC., a Hawaii
corporation
TOSEI PROPERTIES, INC.
a Hawaii corporation
By /s/ Shigeo Hone
------------------------------------
Name: Shigeo Hone
Title: Authorized Representative
Landlord
CHEAP TICKETS, INC.,
a Delaware corporation
By /s/ Mike Hartley
------------------------------------
Name: Mike Hartley
Title: President
<PAGE>
AMENDMENT OF COMMERCE TOWER OFFICE LEASE
FOR ADDITIONAL PREMISES, SUITE 901
(CHEAP TICKETS, INC.)
This AMENDMENT OF COMMERCE TOWER OFFICE LEASE FOR ADDITIONAL PREMISES,
SUITE 901 (the "Additional Premises Suite 901 Amendment") is made this 14th day
of July, 1999, by and between TOSEI PROPERTIES, INC., a Hawaii corporation,
whose principal place of business and post office address is at 1440 Kapiolani
Boulevard, Suite 1000, Honolulu, Hawaii 96814 ("Landlord") and CHEAP TICKETS,
INC., a Delaware corporation, whose principal place of business and post office
address is at 1440 Kapiolani Boulevard, Suite 800, Honolulu, Hawaii 96814
("Tenant");
WITNESSETH:
----------
WHEREAS, Tenant and Landlord herein entered into an unrecorded Commerce
Tower Office Lease dated July 2, 1995 (the "Lease"), covering office space
identified as Suite No. 800 located in the building known as The Commerce Tower
(the "Building"), as amended by an unrecorded Amendment of Commerce Tower Office
Lease dated June 14, 1996 covering additional premises in the spaces identified
as Suite Nos. 810, 825 and 828, as further amended by an unrecorded Second
Amendment of Commerce Tower Office Lease dated October 9, 1997 covering
additional premises in the space identified as Suite No. 1225, as further
amended by an unrecorded Third Amendment of Commerce Tower Office Lease dated
December 2, 1998 covering additional premises in the spaces identified as Suite
Nos. 905, 921 and 925, (the Amendment, the Second Amendment and the Third
Amendment described above being collectively referred to as the "Prior
Amendments").
WHEREAS, Landlord and Tenant are desirous of providing for the rental to
Tenant of expansion premises in the spaces identified as Suite No. 901 and
consisting of approximately nine hundred seventy-two (972) rentable square feet
of floor area as indicated in the attached Exhibit "Al", (hereinafter referred
to as the "901 Expansion Premises"), and made a part hereof for all purposes.
NOW, THEREFORE, in consideration of the premises, and in consideration of
the covenants and conditions contained herein. Landlord and Tenant hereby agree
as follows:
1. Definitions. Capitalized terms not otherwise defined herein shall
have the meanings ascribed to such terms in the Lease.
2. 901 Expansion Premises. For the period commencing from April 13, 1999
and ending on the Termination Date as defined hereinbelow, Landlord does hereby
demise and lease the 901 Expansion Premises unto Tenant, and Tenant does hereby
lease and hire the 901 Expansion Premises from Landlord. The 901 Expansion
Premises shall be added to the Premises dernised under the Lease and the Prior
Amendments, shall be leased by Landlord to Tenant for a term commencing on April
13, 1999 and ending on the Termination Date, as defined in paragraph 3 below,
and shall be subject to all of the terms, covenants and provisions of the Lease,
except as is expressly provided for herein.
<PAGE>
3. Termination Date. For the purposes of the 901 Expansion Premises and
all other premises demised to Tenant under the Lease and Prior Amendments
thereto, the Termination Date shall be December 31, 2003.
4. Monthly Base Rent for the 901 Expansion Premises. Monthly Base Rent
for the 901 Expansion Premises shall be $933.12 per month from April 13, 1999 to
December 31, 2003.
5. Operating Expenses and Common Office Expenses. Tenant's Pro Rata
Share of Operating Expenses and Tenant's Proportionate Share of Common Office
Expenses with respect to the 901 Expansion Premises shall be 0.7858% and
0.8600%, respectively.
6. Conveyance Tax; General Excise Tax. Tenant shall, pursuant to
paragraph 6 of Section III. of the Lease, be responsible for the payment of any
conveyance tax imposed by the State of Hawaii with respect to the 901 Expansion
Premises provided for herein and shall also be responsible for the Hawaii
general excise tax and all other similar gross receipts taxes payable under said
paragraph 6.
7. Security Deposit. Tenant shall deposit $1,906.02 as a security
deposit for the 901 Expansion Premises.
8. Option to Renew. The provisions of paragraph(J)(2) ("Option to
Renew") of Section I. of the Lease shall, on the demise of the 901 Expansion
Premises to Tenant, also be applicable to such 901 Expansion Premises.
9. Tenant Improvement Allowance. Landlord shall provide Tenant with a
Tenant Improvement Allowance of EIGHTEEN THOUSAND THREE HUNDRED THIRTY-EIGHT AND
40/100 DOLLARS ($18,338.40) to reimburse Tenant for tenant improvements
reasonably incurred by Tenant to put the 901 Expansion Premises in condition
suitable for the conduct of Tenant's business in accordance with plans and
specifications reasonably approved by Landlord pursuant to the Lease. Fifty
percent (50%) or $9,169.20 of the foregoing allowance shall be paid by Landlord
on April 13, 1999 and the remaining fifty percent (50%) or $9,169.20 shall be
paid in the form of credit towards Tenant's Monthly Base Rent commencing April
13, 1999. No Base Rent shall be payable from April 13, 1999 through January 31,
2000. The Base Rent for the month of February 2000 shall be $211.25.
10. Ratification of Lease. Except as further modified hereunder and the
Prior Amendments, the Lease is hereby ratified, confirmed and approved and shall
remain in full force and effect.
<PAGE>
11. Counterparts. This Additional Premises Suite 901 Amendment may be
executed in several counterparts, each of which shall be deemed an original, but
all of which shall constitute one and the same instrument. In addition, this
Additional Premises Suite 901 Amendment may contain more than one counterpart of
the signature page and this Additional Premises Suite 901 Amendment may be
executed by the affixing of the signatures of each of the parties to one of such
counterpart signature pages; and all of such counterpart signature pages shall
be read as though one, and they shall have the same force and effect as though
all of the signers had signed a single signature page.
IN WITNESS WHEREOF, the parties hereto have executed this Amendment of
Commerce Tower Office Lease for Additional Premises, Suite 901 (Cheap
Tickets, Inc.) on the day and year first above written.
TOSEI PROPERTIES, INC.
a Hawaii corporation
By /s/ Shigeo Hone
---------------------------------
Name: Shigeo Hone
Title: Attorney-in-fact
Landlord
CHEAP TICKETS, INC.,
a Delaware corporation
By /s/ Michael J. Hartley
---------------------------------
Name: Michael J. Hartley
Title: President and CEO
EXHIBIT "A1"
------------
FLOOR PLAN
[Diagram of floor plan of Floor 9]
<PAGE>
AMENDMENT OF COMMERCE TOWER OFFICE LEASE
FOR ADDITIONAL PREMISES, SUITE 915
(CHEAP TICKETS, INC.)
This AMENDMENT OF COMMERCE TOWER OFFICE LEASE FOR ADDITIONAL PREMISES,
SUITE 915 (the "Additional Premises Suite 915 Amendment") is made this 14th day
of July, 1999, by and between TOSEI PROPERTIES, INC., a Hawaii corporation,
whose principal place of business and post office address is at 1440 Kapiolani
Boulevard, Suite 1000, Honolulu, Hawaii 96814 ("Landlord") and CHEAP TICKETS,
INC., a Delaware corporation, whose principal place of business and post office
address is at 1440 Kapiolani Boulevard, Suite 800, Honolulu, Hawaii 96814
("Tenant");
WITNESSETH:
----------
WHEREAS, Tenant and Landlord herein entered into an unrecorded Commerce
Tower Office Lease dated July 2, 1995 (the "Lease"), covering office space
identified as Suite No. 800 located in the building known as The Commerce Tower
(the "Building"), as amended by an unrecorded Amendment of Commerce Tower Office
Lease dated June 14, 1996 covering additional premises in the spaces identified
as Suite Nos. 810, 825 and 828, as further amended by an unrecorded Second
Amendment of Commerce Tower Office Lease dated October 9, 1997 covering
additional premises in the space identified as Suite No. 1225, as further
amended by an unrecorded Third Amendment of Commerce Tower Office Lease dated
December 2, 1998 covering additional premises in the spaces identified as Suite
Nos. 905, 921 and 925, as further amended by an unrecorded Amendment of Commerce
Tower Office Lease for Additional Premises Suite 901 dated July 14, 1999
covering additional premises in the space identified as Suite No. 901 (the
Amendment, the Second Amendment, the Third Amendment, and the Additional
Premises Suite 901 Amendment described above being collectively referred to as
the "Prior Amendments").
WHEREAS, Landlord and Tenant are desirous of providing for the rental to
Tenant of expansion premises in the spaces identified as Suite No. 915 and
consisting of approximately two thousand five hundred thirty-nine (2,539)
rentable square feet of floor area as indicated in the attached Exhibit "A2",
(hereinafter referred to as the "915 Expansion Premises), and made a part hereof
for all purposes.
NOW, THEREFORE, in consideration of the premises, and in consideration of
the covenants and conditions contained herein, Landlord and Tenant hereby agree
as follows:
1. Definitions. Capitalized terms not otherwise defined herein shall
have the meanings ascribed to such terms in the Lease.
<PAGE>
2. 915 Expansion Premises. For the period commencing from the 915
Expansion Effective Date hereinafter defined and ending on the Termination Date
as defined hereinbelow, Landlord does hereby demise and lease the 915 Expansion
Premises unto Tenant, and Tenant does hereby lease and hire the 915 Expansion
Premises from Landlord. For the purposes of this Additional Premises Suite 915
Amendment, the 915 Expansion Effective Date shall be the date on which Tenant's
Improvements have been substantially completed and a Certificate of Occupancy
issued with respect to the 915 Expansion Premises. The 915 Expansion Premises
shall be added to the Premises demised under the Lease and the Prior Amendments,
shall be leased by Landlord to Tenant for a term commencing on the 915 Expansion
Effective Date and ending on the Termination Date, as defined in paragraph 3
below, and shall be subject to all of the terms, covenants and provisions of the
Lease, except as is expressly provided for herein.
3. Termination Date. For the purposes of the 915 Expansion Premises and
all other premises demised to Tenant under the Lease and Prior Amendments
thereto, the Termination Date shall be December 31, 2003.
4. Monthly Base Rent for 915 Expansion Premises. Monthly Base Rent for
the 915 Expansion Premises shall be $2,437.44 per month from the 915 Expansion
Effective Date to December 31, 2003.
5. Operating Expenses and Common Office Expenses. Tenant's Pro Rata
Share of Operating Expenses and Tenant's Proportionate Share of Common Office
Expenses with respect to the 915 Expansion Premises shall be 2.0527% and
2.2463%, respectively.
6. Conveyance Tax; General Excise Tax. Tenant shall, pursuant to
paragraph 6 of Section III. of the Lease, be responsible for the payment of any
conveyance tax imposed by the State of Hawaii with respect to the 915 Expansion
Premises provided for herein and shall also be responsible for the Hawaii
general excise tax and all other similar gross receipts taxes payable under said
paragraph 6.
7. Security Deposit. Tenant shall deposit, on the 915 Expansion
Effective Date, $4,973.98 as a security deposit for the 915 Expansion Premises.
8. Option to Renew. The provisions of paragraph(J)(2) ("Option to
Renew") of Section I. of the Lease shall, on the demise of the 915 Expansion
Premises to Tenant, also be applicable to such 915 Expansion Premises.
9. Tenant Improvement Allowance. Landlord shall provide Tenant with a
Tenant Improvement Allowance pursuant to the provisions set forth in paragraph
9 (iii) and (iv) ("First Opportunity to Lease") of the Third Amendment.
10. Ratification of Lease. Except as further modified hereunder and the
Prior Amendments, the Lease is hereby ratified, confirmed and approved and shall
remain in full force and effect.
<PAGE>
11. Counterparts. This Additional Premises Suite 915 Amendment may be
executed in several counterparts, each of which shall be deemed an original, but
all of which shall constitute one and the same instrument. In addition, this
Additional Premises Suite 915 Amendment may contain more than one counterpart of
the signature page and this Additional Premises Suite 915 Amendment may be
executed by the affixing of the signatures of each of the parties to one of such
counterpart signature pages; and all of such counterpart signature pages shall
be read as though one, and they shall have the same force and effect as though
all of the signers had signed a single signature page.
IN WITNESS WHEREOF, the parties hereto have executed this Amendment of
Commerce Tower Office Lease for Additional Premises, Suite 915 (Cheap Tickets,
Inc.) on the day and year first above written.
TOSEI PROPERTIES, INC.
a Hawaii corporation
By /s/ Shigeo Hone
---------------------------------
Name: Shigeo Hone
Title: Attorney-in-fact
Landlord
CHEAP TICKETS, INC.,
a Delaware corporation
By /s/ Michael J. Hartley
---------------------------------
Name: Michael J. Hartley
Title: President and CEO