Hawaii-Honolulu-1132 Bishop Street Lease - Bishop Street Associates and Digital Island Inc.
LEASE
Between
BISHOP STREET ASSOCIATES
and
DIGITAL ISLAND, INC.
TABLE OF CONTENTS
PAGE
SECTION DESCRIPTION NUMBER
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1. Premises and Basic Lease Information............. 1
2. Term............................................. 3
3. Base Rent; Adjustments; General Rent Provisions.. 3
4. Additional Rent.................................. 3
5. Security Deposit................................. 5
6. Restrictions on Use; Compliance with Laws........ 6
7. Improvements and Alterations..................... 6
8. Repairs and Maintenance.......................... 7
9. Lien............................................. 7
10. Assignment and Subletting........................ 8
11. Waiver; Indemnity................................ 9
12. Insurance........................................ 10
13. Service and Utilities............................ 11
14. Estoppel Certificate............................. 12
15. Holding Over 20.................................. 12
16. Subordination; Requirements of Lenders........... 13
17. Observance of Rules and Regulations.............. 13
18. Access by Landlord............................... 13
19. Default by Tenant................................ 14
20. Remedies of Landlord............................. 14
21. Default by Landlord; Limitation of Liability..... 17
22. Damage and Destruction........................... 17
23. Eminent Domain................................... 18
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TABLE OF CONTENTS
PAGE
SECTION DESCRIPTION NUMBER
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24. Sale by Landlord........... 18
25. Surrender of Premises...... 18
26. Quiet Enjoyment............ 18
27. Notices.................... 19
28. Personal Property Taxes.... 19
29. Interest and Late Charges.. 19
30. Successors and Assigns..... 20
31. Attorney's Fees............ 20
32. Light and Air.............. 20
33. Signs and Directory........ 20
34. Parking.................... 20
35. Brokers.................... 21
36. Relocation Right........... 21
37. Authority.................. 21
38. Miscellaneous.............. 21
39. Rules and Regulations...... 23
40. Door Sign Rules............ 26
ADDENDUM TO LEASE
Exhibit "A"....... Outline of Premises
Exhibit "B"....... Work Agreement
Exhibit "C"....... Form of Notice of Lease Term Dates
Exhibit "D"....... Form of Estoppel Agreement
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LEASE
THIS LEASE ("Lease") is made as of ,1996, by and between Bishop Street
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Associates, a Hawaii Limited Partnership ("Landlord") and DIGITAL ISLAND, INC.,
a California corporation (the "Tenant") upon the following terms and conditions:
1. Premises and Basic Lease Information
1.1 Landlord hereby leases to Tenant and Tenant hereby leases from
Landlord, upon the terms and conditions set forth in this Lease, those
certain premises (the "Premises") described in Section 1.1.1 of the Basic
Lease Information (as defined below) and outlined in Exhibit "A" attached
hereto and hereby made a part hereof. For purposes of this Lease, the
rentable area. of the Premises has been determined by Landlord's space
planner or architect by reference to the "Standard Method for Measuring
Floor Area in Office Buildings," adopted by the Building Owners and
Managers Association International and approved by the American National
Standards Institute, Inc., August 1990 reprint. The Premises are situated
in that certain office building (the "Building") located at 1132 Bishop
Street, Honolulu, Hawaii. The land upon which the Building is located (the
"Land"), together with the Building and related facilities and
appurtenances, including, but not limited to, the area adjacent to the
Building known as "Union Mall", shall hereinafter be collectively referred
to as the "Project." The terms and conditions of this Lease shall include,
without limitation, the following basic Lease information (the "Basic
Lease Information"):
1.1.1 Premises (Section 1.1): Suite 1001 on floor ten (10) of the
Building, consisting of approximately 2,588 rentable square feet and
approximately 2,270 usable square feet.
1.1.2 Term (Section 2): Five (5) years, to commence on November 1,
1996, and to expire on October 31, 2001.
1.1.3 Base Rent (Section 3.1): In the following amounts:
Period Rate Total Amount
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11/01/96 through $0.00 $0.00 per month
04/30/97
05/01/97 through $1.00 per rentable square foot $2,588.00 per month
10/31/01 per month
1.1.4 Additional Rent (Section 4.1): Equal to Tenant's Percentage Share
(Section 1.1.6) of Operating Costs (Section 4.8).
1.1.5 Rentable Square Footage of the Building: 450,000 square feet.
1.1.6 Tenant's Percentage Share (Section 4.1): 0.575%, which was
computed by dividing the rentable area of the Premises described in
Section 1.1.1 by the rentable area of the Building.
1.1.7 Security Deposit (Section 5): One (1) month's gross rent
($5,256.84), subject to adjustment as provided herein. Gross rent
shall be equal to the sum of (i) Base Rent, plus (ii) Additional Rent
equal to Tenant's Percentage Share of Operating Costs, plus (iii)
State of Hawaii general excise tax on such Base Rent and Additional
Rent at the rate of 0.04166. Notwithstanding Section 5, such deposit
shall be increased from time to time to correspond to any increase in
Base Rent, Additional Rent and/or general excise tax.
1.1.8 Permitted Use (Section 6.1): General office use and as an office
to market digital communication.
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1.1.9 Minimum Limits for Commercial General Liability Insurance:
$1,000,000.00 per occurrence and $1,000,000.00 aggregate for bodily
injury, death and property damage, including liquor liability if
liquor is sold; $1,000,000.00 fire legal liability to value coverage
(section 12.1.1).
1.1.10 For notices to Tenant:
DIGITAL ISLAND, INC.
1132 Bishop Street, Suite 1001
Honolulu, Hawaii 96813
Attention: Ron Higgins
Telephone No.:(808)____________
1.1.11 (Intentionally Omitted.)
1.1.12 Parking Rights (Section 34): Two (2) automobiles in unassigned
parking stalls, at an initial rate of $150.00 per month per automobile
with adjustment pursuant to Section 34, together with State of Hawaii
general excise taxes thereon as provided herein.
1.1.13 Interest and Late Charges (Section 29): Interest rate on unpaid
amount(s) equal to the rate which is the lesser of (a) one percent
(1%) per month, or (b) the maximum rate permitted by law; late charge
office percent (5%) of unpaid amount.
1.1.14 Tenant's Broker (Section 3:5): Monroe & Friedlander, Inc.
1.1.15 Tenant's Broker (Section 35): Monroe & Friedlander, Inc.
1.1.16 Landlord's Construction Representative (Exhibit "B"): The Harris
Company
1.1.17 Tenant's Construction Representative (Exhibit "B"): Ron Higgins
1.1.18 Guarantor (if any): None
1.1.19 Additional provisions: See Addendum to Lease.
Each reference in this Lease to any of the Basic Lease Information shall
be construed to incorporate, in addition to the Basic Lease Information set
forth above, the terms and conditions set forth in the particular Lease section
in which such reference is made.
1.2 The term "common areas" as used in this Lease shall mean all areas and
facilities around the Premises and within the exterior boundaries of the
Project which are provided and designated from time to time by Landlord
for the general use and convenience of Tenant and other tenants of the
Building and their respective employees and invitees. Common areas
include, without limitation, the lobby area, walk-ways, parking
facilities, arcades, landscaped areas, sidewalks, service quarters,
hallways, corridors, restrooms (if not part of the Premises), stairways,
elevators (except elevators which may be reserved for the exclusive use of
one or more tenants), walls, fire stairs, telephone and electrical
closets, aisles, truck docks, plazas, service areas, lobbies and all other
common service areas of the Land and Building or any other area of the
Project intended for such use. Floors wholly occupied by Tenant shall not
have any facilities which would be used in common with other tenants,
except for fire stairs, shafts and similar installations. Tenant, its
employees and invitees, shall have the nonexclusive right to use the
common areas along with others entitled to use the same, subject to
Landlord's rights and duties as hereinafter set forth. Without Tenant's
consent and without liability to Tenant, Landlord shall have the right to
do the following:
1.2.1 Establish and enforce reasonable rules and regulations concerning
the maintenance, management, use and operation of the common areas;
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1.2.2 Temporarily close any of the common areas for maintenance,
alternation or improvement purposes;
1.2.3 Select, appoint and/or contract with any person for the purpose
of operating and maintaining the common areas; and
1.2.4 Change the size, use, shape or nature of any of the common areas.
Landlord shall use reasonable efforts to minimize any interference
with Tenant's use and access of the Premises resulting from Landlord's
exercise of such rights.
2. Term
The term of this Lease shall commence upon the later of the following dates
(the "Commencement Date"): (i) the scheduled Commencement Date specified in
Section 1.1.2 of the Basic Lease Information, or (b) the date that Landlord
tenders possession to Tenant, provided that any work to be performed by Landlord
pursuant to the Work Agreement attached to this Lease as Exhibit "B" is
substantially completed, as determined by Landlord's space planner or architect,
or would have been so substantially completed but for any delay caused by any
occurrence within the control of Tenant or its agents, employees or contractors.
Such term shall continue until the expiration date specified in said Section
1.1.2, unless sooner terminated pursuant to any provision hereof.
This Lease shall not be void or voidable, nor shall Landlord be subject to
any liability as a result of any delay in the Commencement Date for any reason,
except that if the delay has resulted from actions of Landlord (not caused by
delays of Tenant) rent shall not commence until the Premises are available for
occupancy by Tenant with all work to be performed by Landlord substantially
completed. The parties hereto shall execute a written statement, substantially
in the form attached hereto as Exhibit "C" and hereby made a part hereof,
setting forth the Commencement Date and the date of expiration of this Lease,
promptly after same have been ascertained, but the enforceability of this Lease
shall not be affected should either party fail or refuse to execute such
statement. If permission is given to Tenant, in Landlord's sole discretion, to
enter or occupy the Premises prior to the Commencement Date, such early entrance
or occupancy shall be subject to all the terms of such permission and all the
provisions of this Lease which could be reasonably and logically construed as
applying thereto, and Tenant shall not in any way interfere with or delay any of
Landlord's work to be performed in the Premises from being substantially
completed or otherwise cause additional cost or expense to Landlord.
3. Base Rent; Adjustments; General Rent Provisions.
3.1 Tenant shall pay to Landlord as base rent ("Base Rent") for the
Premises, without prior notice or demand, throughout the term of this
Lease, the amount so specified in Section 1.1.3 of the Basic Lease
Information (subject to any increase provided herein), in advance, on or
before the first day of each and every calendar month during the term
hereof, except that Base Rent for the first full month for which Base Rent
shall be payable hereunder shall be paid upon the execution hereof.
3.2 (Intentionally Deleted.)
3.3. Base Rent and any other rent (except for parking rental) due under
this Lease for any period during the term hereof which is for less than
one (1) month shall be a pro rata portion of the monthly amount due, based
upon a thirty (30) day month. Rent and all other amounts due to Landlord
shall be paid to Landlord, without deduction, offset or abatement, at
Landlord's address as specified in Section 27 below or to such other firm
or at such other place as Landlord may from time to time designate in
writing. Landlord shall have the right to accept all rent and other
payments, whether full or partial, and to negotiate checks in payment
thereof without any waiver of rights, irrespective of any conditions to
the contrary sought to be imposed by Tenant. Rent hereunder shall be
deemed paid to Landlord when received by Landlord, or its designee, at
Landlord's address or at such other address as Landlord shall have
designated.
4. Additional Rent
4.1 Commencing with the calendar year in which the term hereof commences
and during each succeeding calendar year (or portion thereof) of the lease
term, Tenant shall pay as additional rent ("Additional Rent") in addition
to and at the time provided
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for payment of Base Rent an amount equal to Tenant's Percentage Share of
the estimated Operating Costs of the Project for the then current calendar
year as specified in Section 1.1.6 of the Basic Lease Information.
4.2 Prior to the end of each calendar year, Landlord shall furnish to
Tenant a written statement or statements showing in reasonable detail
Landlord's estimate of Operating Costs for the immediately succeeding
calendar year and the amount of any Additional Rent payable by Tenant,
appropriately prorated on a monthly basis. Thereafter, Tenant shall pay
monthly as Additional Rent hereunder the amount set forth in such
estimated Additional Rent statement from Landlord. Neither Landlord's
failure to deliver, nor the late delivery of, such statement or statements
shall constitute a default by Landlord hereunder or a waiver of Landlord's
right to any estimated or actual Additional Rent.
4.3 Within one hundred twenty (120) days following the close of each
calendar year, Landlord shall furnish to Tenant a written statement of
reconciliation (the ("Reconciliation") showing in reasonable detail
Landlord's actual Operating Costs for the relevant calendar year, together
with a statement of any adjustments necessary to reconcile any sums paid
by Tenant hereunder as estimated Additional Rent during such calendar year
with those sums actually payable and due hereunder for such calendar year
as set forth in the Reconciliation. If the Reconciliation shows that
additional sums are due from Tenant hereunder, Tenant shall pay such sums
to Landlord within ten (10) days after receipt of the Reconciliation. If
the Reconciliation shows that an overpayment has been made by Tenant with
respect to Additional Rent, such overpayment shall be refunded to Tenant
within thirty (30) days after Tenant's receipt of the Reconciliation. In
the event this Lease has expired or been terminated prior to the end of a
calendar year, the party's obligation to reconcile shall survive such
expiration or termination. Landlord's failure to deliver the
Reconciliation to Tenant as provided herein shall not constitute a default
by Landlord hereunder nor operate as a waiver of Landlord's right to
collect all Additional Rent and other sums due hereunder. Where only a
portion of a calendar year falls within the term hereof, Landlord shall
calculate estimated (or actual, as the ease may be) Additional Rent based
upon a reasonable proration of estimated (or actual) Operating Costs for
such calendar year.
4.4 Landlord may divide the statements referred to above into separate
statement(s) for Tax Costs (as defined in Section 4.6 below) and Building
Operating Costs (as defined in Section 4.7 below). Additionally, Landlord
may estimate and measure Tax Costs or Building Operating Costs or both, on
a fiscal year instead of a calendar year basis, and in such event any and
all references in this Section 4 to calendar year shall be deemed to refer
to such fiscal year.
4.5 Notwithstanding anything to the contrary contained herein, under no
circumstances shall the provisions of this Section 4 cause Base Rent to be
reduced. Any reference to Landlord's "actual" Operating Costs in this
Section 4 shall be deemed to include an allowance for any adjustment to
reflect the level of occupancy of the Building to the extent provided for
below.
4.6 "Tax Costs" shall mean the sum of the following: any and all real
property taxes, assessments (including, but not limited to, general and
special assessments) charges, surcharges, license and other fees, levies,
cost of improvement bonds, penalties, and any and all other taxes (other
than income, franchise and estate or gift taxes of Landlord) on or
relating to all or a portion of the Project (as it may exist from time to
time) including, but not limited to walkways, parking facilities, common
areas, landscaped areas, fountains and art works or any legal or equitable
interest of Landlord therein which may be imposed, levied, assessed or
charged for any reason by any authority having the direct or indirect
power to tax including, but not limited to, the United States or the
state, county or city in which the Building is located, or any other local
governmental authority, agency, district or political subdivision thereof,
together With personal property taxes, assessments, fees and charges
(other than those paid by Tenant pursuant to Section 28 below), fees of
tax consultants and attorneys retained to seek a reduction, to contest or
to act in some other manner in connection with any of the foregoing Tax
Costs, together with any tax, assessment or other amount (including,
without limitation, commercial rental taxes) imposed, levied or charged as
a substitute for or a supplement to the foregoing. If, for any calendar
year subsequent to the year in which the Commencement Date occurs, the
assessed valuation or Tax Costs of the Building shall not be based upon a
completed building at least ninety-five percent (95%) occupied, then for
the purpose of computing Additional Rent due hereunder Tax Costs actually
incurred during such calendar year shall be increased to reflect the
amounts which would have been payable if the Building had been completed
and was ninety-five percent (95%) occupied. Tax Costs for each tax year
shall be appropriately prorated to determine the Tax Costs for the subject
calendar year.
4.7 "Building Operating Costs" shall mean the sum of the following: any and
all costs, expenses and disbursements paid or incurred by landlord in
connection with the management, operation, security, maintenance, and
repair of the Project (as it may
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exist from time to time) including, but not limited to, salaries, wages,
benefits and related costs for employees, management fees, either as
charged to Landlord by outside management companies or an amount not
exceeding the amount typically charged by outside management companies if
Landlord manages the Building itself, together with the rental value of
space occupied as the Project management office and any building operating
costs (including, but not limited to, real property taxes, utilities, and
insurance) attributed to such space occupied as the project management
office; charges for utilities and services (including any taxes thereon);
the cost of insurance; the cost of building cleaning supplies and
materials; ground rent; and a reasonable allowance for depreciation (or
amortization) with respect to machinery and equipment and other capital
expenditures and improvements; provided, however, that the only
depreciation (or amortization and expenditures) includable in Building
Operating Costs shall be a reasonable allowance for depreciation (or
amortization) on (a) items intended to result in cost savings, (b) common
area interior floor and wall coverings and resurfacing and common area
window treatments, and (c) Required Alterations (as defined below). If,
during any calendar year subsequent to the year in which the Commencement
Date occurred, the Building is less than ninety-five percent (95%)
occupied, then for the purpose of computing Additional Rent due hereunder
Building Operating Costs actually incurred during such calendar year shall
be increased to reflect the amounts which would have been payable if the
Building had been ninety five percent (95%) occupied.
Without limiting the generality of the foregoing, and notwithstanding any
contrary provision herein, if at any time Landlord is required by any rule,
regulation or law, to make any changes, alterations or improvements to the
common area or the Building, the Premises, or any other portion of the Project
(including, but not limited to, electrical, mechanical, water sprinkler, or
other systems or components) ("Required Alterations") (but excluding Required
Alterations attributable exclusively to Tenant's specific use and occupancy of
the Premises, which alterations shall be Tenant's sole responsibility), all
costs relating to such Required Alterations (including, but not limited to, all
planning, legal, architectural, engineering, construction, financing and other
costs) shall be fully included in Building Operating Costs in the year in which
such charges accrue, or in such year as Landlord pays such charges, as Landlord
shall elect. If under generally accepted accounting principles a portion of
costs relating to Required Alterations should be allocated to capital
improvements, to be depreciated or amortized over two (2) or more years,
Landlord shall be entitled each year to include in Building Operating Costs a
reasonable allowance for depreciation (or amortization) with respect thereto.
The capital costs described herein shall include all costs relating to the
financing of any Required Alterations or other capital investment items. If
Landlord internally finances any such capital costs, interest shall be added to
such costs at an annual rate reasonably determined by Landlord.
4.8 "Operating Costs" shall mean the aggregate of Tax Costs and Building
Operating Costs.
4.9 In addition to any other items payable by Tenant to Landlord under this
Lease, Tenant shall pay not less than ten (10) days after written notice
from Landlord, as Additional Rent, any conveyance tax imposed by the
State of Hawaii in connection with this Lease and shall at Landlord's
request execute such affidavits and other documentation as may be
necessary or proper in connection therewith.
4.10 Tenant will also pay to Landlord, as Additional Rent, at the time
and together with each payment of Base Rent, Additional Rent or other
charge required hereunder by Tenant to Landlord which is subject to the
State of Hawaii general excise tax on gross income, any sales or value
added taxes under any successor, similar or new federal, state or county
law which may be hereafter enacted, on account of the receipt, actual or
constructive, by Landlord of the rental payments, reimbursement of gross
income taxes, any other taxable gross income attributable to the Premises
or this Lease, an amount which, when added to Base Rent, Additional Rent
or other charge (whether actually or constructively received by
Landlord), shall yield to Landlord, after deduction of all such taxes
payable by Landlord with respect thereto, an amount equal to that which
Landlord would have realized therefrom had no such taxes been imposed.
For purpose of illustration only, the amount of such tax is presently
four percent (4%), resulting in a figure to be divided into Base Rent,
Additional Rent and other amounts payable by Tenant hereunder of .96 in
order to ascertain the total amount due.
5. Security Deposit.
Concurrently with Tenant's execution hereof, Tenant shall pay to Landlord a
security deposit to secure the performance and observance of all obligations and
covenants of Tenant hereunder. The initial amount of such deposit is specified
in Section 1.1.7 of the Basic Lease Information. Such deposit shall be increased
proportionately (a) upon determination of the rentable area of the Premises, to
correspond to any resultant increase in the initial Base Rent, and (b) from time
to time thereafter to correspond to any increase in Base Rent. Landlord may
apply such deposit to remedy any failure by Tenant to perform or observe any of
its obligations and covenants hereunder. Should Landlord use any portion of such
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deposit pursuant to the foregoing, Tenant shall forthwith replenish such deposit
in full. Landlord shall, upon the expiration or sooner termination hereof,
promptly return any unused portion of such deposit to Tenant (or the last
permitted assignee of Tenant's interest hereunder. Landlord shall not be
required to keep such deposit separate from its general funds, and Tenant shall
not be entitled to any interest on such deposit.
6. Restrictions on Use; Compliance with Laws.
6.1. Tenant shall use and occupy the Premises only for the specific uses
specified in Section 1.1.8 of the Basic Lease Information and for no
other uses whatsoever. Tenant shall not do or permit anything to be
done in or about the Premises which will in any way obstruct or
interfere with the rights of other tenants or occupants of the Building
or injure or annoy them, nor use or allow the Premises to be used for
any improper immoral, unlawful or objectionable purpose, nor shall
Tenant cause or maintain or permit any nuisance in or about the
Premises, nor shall Tenant cause or permit any hazardous or toxic
waste, substance or material to be brought to the Promises or used,
transported, generated, handled, stored or disposed of in or about the
Premises. Tenant shall not conduct business or other activity in or
about the Premises of such a nature as to place an unreasonable or
excessive burden upon the public and common areas of the Building.
Tenant shall not place a load upon any floor exceeding the floor load
which such floor was designed to carry, nor shall Tenant install any
equipment, apparatus or device in the Premises which shall cause
vibrations or excessive noise. Tenant shall not commit or suffer the
commission of any waste in or about the Premises.
6.2 Tenant shall not use the Premises or permit anything to be done in
or about the Premises which shall in any way conflict with any law,
statute, ordinance or governmental rule or regulation now in force or
which may hereafter be enacted or promulgated. Tenant shall not do or
permit anything to be done in or about the Premises or bring or keep
anything therein which will in any way increase the rate of any
insurance upon the Building or any of its contents, or cause
cancellation of said insurance or otherwise affect said insurance in
any manner, and Tenant shall at its sole cost and expense promptly
comply with all laws, statutes, ordinances and governmental rules,
regulations and requirements now in force or which may hereafter be in
force and with the requirements of any board of fire underwriters or
other similar body now or hereafter constituted relating to or
affecting the condition, use or occupancy of the Premises.
7. Improvements and Alterations.
7.1 Initial improvements to the Premises shall be governed by the
provisions of Exhibit "B" attached thereto and hereby made a part
hereof (the "Work Agreement") and the other provisions of this Lease
not in conflict therewith.
Without the prior written consent of Landlord, Tenant shall not make or
permit to be made any alterations, additions, or improvements in, on or to the
Premises or the Project or any part thereof, except for interior, non-structural
alterations to the Premises not exceeding One Thousand Dollars ($1,000) in
cumulative costs throughout the term hereof.
7.2 Landlord may impose as a condition to such consent such requirements
as Landlord may deem necessary in its sole discretion, including
(without limitation) requirements relating to the manner in which the
work is done, the contractor by whom it is performed, and the limes
during which it is accomplished, as well as the requirement that upon
written request of Landlord, Tenant will remove at its expense any and
all permanent improvements or additions to the Premises installed by
Tenant. Any damage done to the Premises in connection with such removal
shall be repaired at Tenant's sole cost and expense. Landlord may, in
connection with any such removal which reasonably might involve
damaging the Premises, require that such removal be performed by a
bonded contractor or other person for which a bond satisfactory to
Landlord has been furnished covering the cost of repairing the
anticipated damage.
Notwithstanding any contrary provision herein, Tenant shall not, in any
event, make any alterations, additions or improvements which might or could
affect the structure of the Building or to the mechanical or electrical systems
of the Building or which are visible from the exterior of the Premises or which
interfere with or disrupt other tenants in the Building or with any work then
being carried out therein by Landlord or its contractors. Any alterations,
additions or improvements desired by Tenant shall be made at Tenant's sole cost
and expense in compliance with Section 9 below and in accordance with plans and
specifications, and pursuant to governmental permits, approved in advance by
Landlord. Any contractor selected by Tenant to make same must be bondable and
licensed and be approved in advance by Landlord and must provide insurance
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coverage acceptable to Landlord. Such work shall be performed by union labor
unless Landlord determines that the use of nonunion labor is not likely to cause
labor unrest or disputes.
At Landlord's option, any alterations, additions or improvements desired
by Tenant shall be made by Landlord or its contractors for Tenant's account, and
Tenant shall pay the cost thereof to Landlord prior to Landlord's contracting
for such work; provided, however, that Landlord's price shall not exceed the
lowest bona fide bid, from a contractor reasonably satisfactory to Landlord,
therefore obtained by Tenant and communicated to Landlord. Upon completion of
any alterations, additions or improvements, Tenant shall furnish Landlord a set
of "as built" plans and specifications therefor, and, within ten (I 0) days
after such completion, Tenant shall cause an appropriate notice of completion to
be recorded in the office of the Clerk of Circuit Court of the First Circuit,
State of Hawaii, pursuant to Section 507-43, Hawaii Revised Statutes, as
amended.
Tenant shall cause all such alterations, additions or improvements to be
completed in a good, workmanlike, diligent, prompt and expeditious manner in
compliance with all applicable laws. Landlord's approval of Tenant's plans and
specifications shall not constitute a representation or warranty of Landlord as
to the adequacy thereof or compliance thereof with applicable laws. Tenant shall
pay to Landlord a fee equal to ten percent (10%) of the total cost of the
subject work for reviewing Tenant's plans and specifications and Landlord's
coordination, scheduling and review of subject work, regardless of whether
Landlord or Tenant contracts for such work.
8. Repairs and Maintenance.
8.1 By taking possession of the Premises, Tenant shall be deemed to have
conclusively agreed to accept the Premises "AS-IS" and as being in the
condition in which Landlord is required to deliver the same and
otherwise in good order, condition and repair (except for latent
defects). Subject to the provisions of Section 22 below, Tenant shall,
at all times during the term hereof and at Tenant's sole cost and
expense, keep the Premises and every part thereof in good condition and
repair. It is understood and agreed that Landlord has no obligation to
alter, remodel, improve, repair, decorate or paint the Premises or any
part thereof, except as specified in Section 22 below or in the Work
Agreement, and that no representations relating to the condition of the
Premises, the Building or the Project have been made by Landlord (or
any employee or agent thereof) to Tenant, except as may be specifically
set forth in this Lease.
8.2 Subject to the provisions of Section 8.1 above and Section 22 below,
Landlord shall maintain the common area, the foundation and structural
portions of the Building, and the mechanical and electrical systems
providing the services and utilities to be furnished by Landlord
pursuant to Section 13.1 below, in good order and condition, provided
however, if such maintenance and repairs are caused in whole or in part
by the act, neglect, fault, or omission of any duty by Tenant, its
agents, servants, employees, or invitees, Tenant shall pay to Landlord
the reasonable cost of such maintenance and repairs. Landlord shall not
be liable for any failure to make any such repairs or to perform any
maintenance unless such failure shall persist for an unreasonable time
after written notice of the need of such repairs or maintenance is
given to Landlord by Tenant. Except as provided in Section 22 hereof,
there shall be no abatement of rent and no liability of Landlord by
reason of any injury to or interference with Tenant's business arising
from the making of any repairs, alterations or improvements in or to
any portion of the Building or the Premises, or in or to fixtures,
appurtenances and equipment therein. Tenant waives the right to make
repairs at Landlord's expense under any law, statute or ordinance now
or hereafter in effect.
9. Lien.
Tenant shall keep the Project free from any liens arising out of any work
performed, materials furnished or obligations incurred by Tenant. In the event
that Tenant shall not within ten (10) days following the imposition of any such
lien, cause the same to be released of record by payment or posting of a proper
bond, Landlord shall have, in addition to all other remedies provided herein and
at law or in equity, the right to cause same to be released by such means as it
shall deem proper including, but not limited to, payment (from the security
deposit referred to in Section 5 above or otherwise) of the claim giving rise to
such lien. All such sums paid by Landlord and all expenses incurred by it in
connection therewith shall be considered additional rent and shall be payable to
it by Tenant on demand with interest at the Interest Rate (as defined in Section
29 below).
Landlord may require, at Landlord's sole option, that Tenant cause to be
provided to Landlord, at Tenant's sole cost and expense, a performance and labor
and materials payment bond acceptable to Landlord with respect to any
improvements, additions or alterations to the Premises. Landlord shall have the
right at all times to post and keep posted on the Premises any notices permitted
or required by law, or which
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Landlord shall deem proper, for the protection of Landlord, the Project and
any other party having an interest therein from mechanics' and materialmen's
liens.
10. Assignment and Subletting.
10.1 Tenant shall not assign, sublease or otherwise transfer,
("Transfer") to any party ("Transferee") voluntarily, by operation of
law or otherwise, any interest herein or in the Premises, or permit any
Transfer to occur, or permit the use of the Premises except for
Tenant's own business operations by any person other than Tenant and
the agents and servants of Tenant, without in each case Landlord's
prior written consent, which consent shall not be unreasonably
withheld. Any such Transfer without Landlord's prior written consent
shall be void.
In determining whether to grant such consent, Landlord may consider
various factors including, but not limited to, the following: (a) business
criteria relating to the proposed Transferee's background, experience,
reputation, general operating ability and ability to perform Lease obligations,
and potential for succeeding in its business, (b) financial criteria relating to
the proposed Transferee's financial responsibility, credit rating and
capitalization, (e) the identity and personal characteristics of the proposed
Transferee and its invitees and guests, and (d) the nature of the proposed use
and business of the proposed Transferee and its effect on the tenant mix of the
Building, the public repute of the Building and the impact on the common areas
or utility systems of the Building. Without limiting the generality of the
foregoing, Landlord hereby reserves the right to condition any such consent upon
Landlord's determination that (i) the proposed Transferee is at least as
financially responsible as Tenant and at least as financially and morally
responsible as Tenant then is or was upon the execution hereof, whichever is
greater, (ii) the proposed Transferee shall use the Premises for a use
compatible with other tenancies in the Building, and (iii) the proposed
Transferee's use of the Premises will not adversely materially impact on the
common areas or utility systems of the Building.
Notwithstanding any provision of this Lease to the contrary, Tenant shall
not enter into any proposed Transfer of any interest herein or in the Premises
which would result in (a) detraction from the first-class character or image of
the Building or diminution in the value thereof, (b) the Premises being occupied
by more than two (2) tenants, or (e) a breach by Landlord of any then-existing
exclusive right in favor of any other tenant of the Building, any loan
obligation or agreement, any covenants, conditions and restrictions of record,
or any insurance policy. Tenant shall give Landlord thirty (30) days prior
written notice of its intention to Transfer its lease. Tenant shall submit the
following information with such notice and with a written request for Landlord's
consent to any Transfer: (i) all Transfer and related documents, (ii) financial
statements of the proposed Transferee, (iii) business, credit and personal
references and history of the proposed Transferee, and (iv) such other
information as Landlord may reasonably request relating to the proposed Transfer
and the parties involved therein. Any transaction which does not comply with
provisions of this Section shall be voidable at the option of Landlord.
If Landlord disapproves the proposed Transfer, Tenant shall not complete
such proposed Transfer. On the other hand, if Landlord approves such proposed
Transfer, Tenant shall be required to pay Landlord's reasonable legal fees and
other costs incurred in connection with Landlord's review of the proposed
Transfer and the execution of documents reflecting such Transfer, plus an
administrative fee of $500.00. In addition, in the event Landlord consents to
the proposed Transfer: (i) any subtenant of part or all of Tenant's interest in
the Premises shall agree that in the event Landlord gives such subtenant notice
that Tenant is in default under this Lease, such subtenant shall thereafter make
all sublease or other payments direct to Landlord, which payments will be
received by Landlord without any liability whether to honor the sublease or
otherwise (except to credit such payments against sums due under the Lease); and
any subtenant shall at Landlord's option agree to attorn to Landlord or its
successors and assigns should the Lease be terminated for any reason,
voluntarily, or otherwise, except that in no event shall Landlord or its
successors or assigns be obligated to accept such attornment, (ii) any such
Transfer and consent shall be effected on forms, the form and substance of which
will be supplied or approved by Landlord; and (iii) Landlord may require that
Tenant not then be in default hereunder in any respect.
10.2 The parties acknowledge that Landlord's economic stake in the
Building housing the Premises is significantly greater than Tenant's
economic stake in this Lease or in the Premises, and that Tenant has
not leased the Premises to make a profit on transferring the same, but
solely to occupy the same. Accordingly, the parties have expressly
bargained for the following allocation of any consideration to be
derived by Tenant from any Transfer of this Lease. Tenant shall be
required to pay Landlord fifty percent (50%) of any rent, key money,
transfer consideration, or other premiums of any kind or nature on the
Transfer in excess of the rental and other charges dues under this
Lease, whether such premium be in the form of an increased rental, a
lump sum payment in consideration of the Transfer, or consideration of
any other form. If such Transfer pertains to a portion of the Premises
only, any premium shall be computed on the assumption that Tenant's
rental and other sums due hereunder are allocable on a pro rata, per
square foot basis.
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The provisions of this Section shall apply regardless of whether such
Transfer is made in compliance with the provisions of this Lease. Any payments
made to Landlord pursuant to this Section shall not cure any default under this
Lease arising from such Transfer. Tenant shall not artificially structure any
Transfer to reduce the amount payable to Landlord under this Section, nor shall
Tenant take any other steps for the purpose of circumventing its obligation to
pay amounts to Landlord under this Section; in the event that Tenant does same,
the amount payable to Landlord under this Section shall be the amount that would
have been payable to Landlord had same not occurred.
10.3 No Transfer, even with the consent of Landlord, shall result in
Tenant's being released from any of its obligations hereunder.
Landlord's consent to any one Transfer shall apply only to the specific
transaction thereby authorized and such consent shall not be construed
as a waiver of the duty of Tenant or any Transferee to obtain
Landlord's consent to any other or subsequent Transfer or as modifying
or limiting Landlord's rights hereunder in any way. Landlord's
acceptance of rent directly from any assignee, subtenant or other
Transferee shall not be construed as Landlord's approval or consent
thereto nor Landlord's agreement to accept the attornment of any
subtenant in the event of any termination of this Lease. In no event
shall Landlord's enforcement of any provision of this Lease against a
Transferee be deemed a waiver of Landlord's right to enforce any term
of this Lease against Tenant or other person.
10.4 If Tenant is a corporation, an unincorporated association or a
partnership, any cumulative Transfer, of any stock or interest in such
corporation, association or partnership greater than twenty-five
percent (25%) then of, or any cumulative Transfer (other than in the
ordinary course of business) of any assets of such corporation,
association or partnership greater than twenty-five percent (25%)
thereof, shall be deemed an assignment within the meaning and
provisions of this Section and shall be subject to the provisions
hereof; provided, however, that the foregoing shall not apply to
corporations, fifty percent (50%) or more of the stock of which is
traded through a national or regional exchange or over-the-counter.
10.5 Notwithstanding any of the foregoing provisions, covenants and
conditions to the contrary, in the event that this Lease is assigned to
any person or entity pursuant to the provisions of the Bankruptcy Code,
11 U.S.C. 101 et seq (the "Bankruptcy Code"), any and all monies or
-- ---
other consideration payable or otherwise to be delivered in connection
with such assignment shall be paid or delivered to Landlord, shall be
and remain the exclusive property of Landlord and shall not constitute
property of Tenant or of the estate of Tenant within the meaning of the
Bankruptcy Code. Any and all monies or other consideration constituting
Landlord's property under the preceding sentence not paid or delivered
to Landlord shall be held in trust for the benefit of Landlord and
shall promptly be paid to or turned over to Landlord. If Tenant
proposes to assign this Lease pursuant to the provisions of the
Bankruptcy Code to any person or entity who shall have made a bona fide
offer to accept an assignment of this Lease on terms acceptable to
Tenant, then notice of such proposed assignment setting forth (i) the
name and address of such person (ii) all of the terms and conditions of
such offer, (iii) the adequate assurance provided by Tenant to assure
such person's future performance under this Lease, including without
limitation, the assurance referred to in Section 365 of the Bankruptcy
Code, or any such successor or substitute legislation or rule thereto,
shall be given to Landlord by Tenant no later than twenty (20) days
after receipt by Tenant, but in any event no later than ten (10) days
prior to the date that Tenant shall make application to a court of
competent jurisdiction for authority and approval to enter into such
assignment and assumption. Landlord shall thereupon have the prior
right and option, to be exercised by notice to Tenant given at any time
prior to the effective date of such proposed assignment, to accept an
assignment of this Lease upon the same terms and conditions and for the
same consideration, if any, as the bonafide offer made by such person,
less any brokerage commissions which may be payable out of the
consideration to be paid by such person for the assignment of this
Lease. Any person or entity to which this Lease is assigned pursuant to
the provisions of the Bankruptcy Code shall be deemed without further
act or deed to have assumed all of the obligations arising under this
Lease on and after the date of such assignment. Any such assignee shall
upon demand execute and deliver to Landlord an instrument confirming
such assumption.
11. Waiver; Indemnity
11.1 Notwithstanding any contrary provision herein, and except to the
extent arising from the gross negligence or willful misconduct of
Landlord, Landlord shall not be liable and Tenant hereby waives all
claims against Landlord for any injury or damage to any person or
property or any other loss (including, but not limited to loss of
income), which may be sustained by the persons, goods, wares,
merchandise or property of Tenant, its agent, contractors, employees,
invitees or customers or any other person in or about the Premises, the
Building, or the Project by or from any cause whatsoever, and, without
limiting the generality of the foregoing, whether caused by or
resulting from water leakage of any character from the roof, walk,
windows, basement, or any other portion
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of the Premises, the Building, or the Project, or by fire, steam,
electricity, gas or oil, or by any interruption of utilities or
services, or by any tenant, occupant, or other person, or by any other
cause whatsoever, in, on or about the Premises, the Building or the
Project. Notwithstanding any contrary provision in the Lease, Landlord
shall in no event be liable for consequential damages hereunder.
11.2 Except to the extent that claims arise from the gross negligence or
willful misconduct of Landlord, Tenant shall indemnify Landlord and
hold Landlord harmless from and against any and all claims, demands,
losses, damages, liabilities, costs and expenses (including, but not
limited to, reasonable attorneys' fees) arising from Tenant's use or
enjoyment of the Project, from the conduct of Tenant's business, from
any act or omission, work or thing done, permitted or suffered by
Tenant (or any officer, employee, agent, contractor, representative,
licensee, guest, invitee or visitor thereof) in or about the Project,
or from any default under this Lease by Tenant. If any action or
proceeding is brought against Landlord by reason of any such matter,
Tenant shall, upon notice from Landlord, defend same at Tenant's
expense by counsel satisfactory to Landlord. Tenant, as a material part
of the consideration to Landlord, hereby assumes all risk of damage to
property of Tenant, or injury to persons in or about the Premises,
except to the extent arising from gross negligence or willful
misconduct of Landlord, and Tenant hereby waives all claims in respect
thereof against Landlord. The provision of this Section shall survive
the expiration or termination of this Lease with respect to any claims
or liability arising from events occurring prior to such expiration or
termination.
12. Insurance
12.1 Throughout the term hereof, Tenant shall carry and maintain, at its
own expense, the following types, amounts and forms of insurance.
12.1.1 Tenant shall carry and maintain a policy of commercial general
liability if insurance in the name of Tenant (with Landlord and, if
requested by Landlord, any mortgagee, trust deed holder, ground
lessor or secured party with an interest in this Lease, the
Building, or the Project named as an additional insured). Such
policy shall specifically include, without limitation, personal
injury, broad form property damage, and contractual liability
coverage, the last of which shall cover the insuring provisions of
this Lease and the performance of Tenant of the indemnity agreements
in Section 11 above. Such policy shall provide coverage on an
occurrence basis. The minimum limits of liability shall not be less
than the amounts specified in Section 1.1.9. The amount of such
insurance required here under shall be subject to adjustment from
time to time as reasonably requested by Landlord.
12.1.2 Tenant shall carry and maintain a policy or policies of
property insurance in the name of Tenant (with Landlord and, if
requested by Landlord, any mortgagee, trust deed holder, ground
lessor or secured party with an interest in this Lease, the Building
or the Project named as additional insured) covering Leasehold
improvements, including without limitation any improvements made to
the Premises by Landlord for the benefit of Tenant, and any property
of Tenant at the Premises and providing protection against all
perils included within the classification of fire, extended
coverage, vandalism, malicious mischief, special extended peril (all
risk) and sprinkler leakage, in an amount equal to at least one
hundred percent (100%) of the replacement cost thereof from time to
time (including without limitation, cost of debris removal). Any
proceeds from such insurance shall be used for the repair or
replacement of the property damaged or destroyed, unless this Lease
is terminated pursuant to the provisions hereof. If the Premises are
not repaired or restored following damage or destruction, Landlord
shall receive any proceeds from such insurance allocable to Tenant's
leasehold improvements.
12.1.3 Tenant shall carry and maintain a policy or policies of
worker's compensation and employer's liability insurance in
compliance with all applicable laws.
12.1.4 Tenant shall carry and maintain such other policies of
insurance (including without limitation, business interruption or
rental income insurance) in connection with the Premises as Landlord
may from time to time require.
12.1.5 All of the policies required to be obtained by Tenant pursuant
to the provisions of this Section 12.1 shall be issued by companies
and shall be in the form and content acceptable to Landlord. Without
limiting the generality of the foregoing, any deductible amounts
under said policies shall be subject to Landlord's approval. Each
policy shall designate Landlord as an
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additional insured and shall provide full coverage in the amounts
set forth herein. Although named as an additional insured, Landlord
shall be entitled to recover under said policies for any loss
occasioned to it, its servants, agents and employees, by reason of
the negligence of Tenant.
Tenant shall, prior to delivery of the Premises by Landlord to Tenant,
provide Landlord with copies of and certificates for all insurance policies. All
insurance policies shall provide that they may not be modified or canceled until
after thirty (30) days written notice to Landlord (by any means described in
Section 27 below) and to any other additional insureds thereunder. Tenant shall,
at least thirty (30) days prior to the expiration of any of such policies,
furnish Landlord with a renewal or binder therefor.
Tenant may carry insurance under a so-called "blanket" policy, provided
that such policy provides that the amount of insurance required hereunder shall
not be prejudiced by other losses covered thereby. All insurance policies
carried by Tenant shall be primary with respect to, and non-contributory with,
any other insurance available to Landlord.
If Tenant fails to carry any insurance policy required hereunder or to
furnish copies thereof and certificates therefor pursuant hereto, Landlord may,
without waiving Tenant's default, upon notice, obtain such insurance, and Tenant
shall reimburse Landlord for the costs thereof with the next monthly rental
payments due hereunder.
12.2 During the term of this Lease, landlord shall keep and maintain
property insurance for the Project in such reasonable amounts, and with
such reasonable coverages, as would be carried by a prudent owner of a
similar building in the city where the Building is located, or as any
lienholder may require. Tenant acknowledges that it shall not be a
named insured in such policies and that it has no right to receive any
proceeds from any such insurance policies carried by Landlord.
Notwithstanding any contrary provision herein, Landlord shall not be
required to carry insurance covering the property described in Section
12.1.2 above or covering flood or earthquake.
12.3 Each party hereto hereby waives any and all rights to recover
against the other party, or against the officers, employees or
principals thereof, for loss or damage arising from any peril insured
against under any property or worker's compensation insurance policy
required to be carried by such waiving party pursuant to the provisions
of this Lease. To the extent reasonably available, each such policy
shall be endorsed to reflect the foregoing.
12.4 Tenant shall pay any increases in insurance premiums relating to
property in the Project other than the Premises to the extent that any
such increase is specified by the insurance carrier as being caused by
Tenant's acts or omission or use or occupancy of the Premises.
13. Service and Utilities
13.1 Subject to the provisions contained elsewhere herein and to the
rules and regulations of the Building, Landlord shall cause to be
furnished to the Premises electricity, together with heating,
ventilating and air conditioning ("HVAC"), required in Landlord's
reasonable judgment for the comfortable use and occupation of the
Premises (but not in excess of such utilities and services which are
customarily furnished in comparable office buildings in the immediate
market area), during the business hours of the Building, which shall
initially be 7:00 A.M. to 6:00 P.M., Monday through Friday, except for
holidays determined by Landlord from time to lime, and janitorial
services during the times and in the manner that such services are
customarily furnished in comparable office buildings in the immediate
market area. Landlord shall, at Tenant's request, provide after-hours
HVAC to the Premises, provided that Tenant shall pay to Landlord a
charge therefor as reasonably determined by landlord from time to time.
Tenant shall notify Landlord in advance prior to noon on any business
day of Tenant's after-hour HVAC requirements. Tenant shall keep and
cause to be kept closed all window coverings when necessary because of
the sun's position, and Tenant shall at all times cooperate fully with
Landlord and abide by all the regulations and requirements which
Landlord may prescribe for the proper functioning and protection of the
heating, ventilating and air conditioning system. If any heat-
generating machines, excess lighting or equipment used in the Premises
affects the temperature otherwise maintained by the air conditioning
system for the Premises and the Building, or requires additional
cooling for its operation, Landlord may install supplementary air
conditioning for the Premises, and the cost thereof (including, but not
limited to, the cost of installation, operation and maintenance
thereof) shall be paid by Tenant to Landlord upon demand by Landlord.
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13.2 Tenant shall not, without the prior written consent of Landlord,
use in the Premises any apparatus, device, machine or equipment using
excess righting, electricity or water, nor shall Tenant connect any
apparatus or device to sources of electrical current or water except
through existing electrical outlets or water pipes in the Premises. If
Tenant shall require excess electricity or any other resource in excess
of that customarily supplied for use of similar premises, in comparable
office buildings in the area of the Project, Tenant shall first request
the consent of Landlord. In the event that Landlord gives its consent,
Tenant may cause a separate metering device to be installed in the
Promises. The cost of any such separate metering device including, but
not limited to, the cost of installation, maintenance and repair
thereof shall be paid by Tenant. Tenant shall promptly pay the cost of
all excess resources consumed within the Premises, together with any
additional administrative expense incurred by Landlord in connection
therewith. For purposes of the foregoing, excess electricity shall be
deemed to consist of any amount in excess of 2.5 kilowatt hours at 277
volts per rentable square foot on an annualized basis for fluorescent
lighting and 2.5 kilowatt hours at 120 volts per rentable square foot
on an annualized basis for convenience power.
13.3 Landlord shall not be in default hereunder or be liable for any
damages directly or indirectly resulting from any interruption of
utilities or services caused by (i) the installation or repair of any
equipment in connection with the furnishing of utilities or services,
(ii) acts of God or the elements, labor disturbances of any character,
any other accidents or any other conditions beyond the reasonable
control of Landlord, or by the making of repairs or improvements to the
Premises or the Project, or (iii) the limitation, curtailment,
rationing or restriction imposed by any governmental agency or service
or utility supplier on use of water or electricity, gas or any other
form of energy or any other service or utility whatsoever serving the
Premises or the Project. Furthermore, Landlord shall be entitled,
without any obligation or compensation to Tenant, to cooperate
voluntarily in a reasonable manner with the efforts of national, state
or local governmental agencies or service or utility suppliers in
reducing energy or other resource consumption. If Landlord shall so
cooperate, Tenant shall also reasonably cooperate therewith.
13.4 Any sums payable under this Section 13 shall be considered
Additional Rent and may be added to any installment of rent thereafter
becoming due, and Landlord shall have the same remedies for a default
in payment of such sums as for a default in the payment of rent.
14. Estoppel Certificate
14.1 Within ten (10)days after any written request which Landlord may
make from time to time, Tenant shall execute and deliver to Landlord a
certificate (the "Certificate") substantially in the form attached
hereto as Exhibit "D" and hereby made a part hereof, together with such
financial information relating to Tenant or any guarantor as Landlord
or any prospective purchaser or lender may reasonably request. Landlord
shall have the right to amend or otherwise supplement the Certificate
to include such other information and provisions as may be reasonably
requested by any existing or prospective lender or by any prospective
purchaser. Any failure by Tenant to so execute and deliver the
Certificate shall, at Landlord's election, constitute a certification
by Tenant that the statements which may be included in the Certificate
(as same may have been so amended or supplemented) are true and
correct, except as Landlord shall otherwise indicate. Landlord and
Tenant intend that the Certificate may be relied upon by any existing
or prospective lender or by any prospective purchaser. Tenant hereby
acknowledges that any failure by it to execute and deliver the
Certificate would likely result in Landlord's incurring substantial
consequential damages.
15. Holding Over
15.1 If Tenant, with Landlord's written consent, remains in possession
of all or any portion of the Premises after the expiration or sooner
termination of the term hereof, such holding over shall constitute and
be construed as a tenancy from month-to-month only, upon such terms and
conditions hereof as may reasonably and logically be construed as
applying thereto; provided, however, that during such holding over,
Base Rent and any parking charges shall be two hundred percent (200%)
of the Base Rent and parking charges in effect immediately prior to
such expiration or termination, and any and all options or other
preferential rights of Tenant shall be deemed to have lapsed and to be
of no further force or effect. Landlord may terminate such tenancy from
month to month by giving to Tenant written notice of termination at
least twenty-five (25) days prior to the end of the rental month.
Acceptance by Landlord of any rent after such expiration or termination
shall not be deemed to constitute Landlord's consent to such holding
over.
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16. Subordination; Requirements of Lenders
16.1 Without the necessity of any additional document being executed by
Tenant for the purpose of effecting a subordination, this Lease shall
be subject and subordinate at all times to (a) all ground leases or
underlying leases which may now exist or hereafter be executed
affecting all or any portion of the Project and (b) the lien of any
mortgage or deed of trust which may now exist or hereafter be executed
affecting all or any portion of the Project.
Notwithstanding the foregoing, Landlord shall have the right to
subordinate or cause to be subordinated any such ground leases or underlying
leases or any such liens to this Lease. If any ground lease or underlying lease
terminates for any reason or any mortgage or deed of trust is foreclosed or a
deed in lieu of foreclosure is made for any reason, then at the election of such
ground lessor or mortgagee or beneficiary, Tenant shall, notwithstanding any
subordination, attorn to and become the Tenant of the successor-in-interest at
the option of such successor-in-interest. It shall be a condition to any future
subordination of the Lease that the ground lessor or mortgagee or beneficiary
requesting such subordination shall agree that so long as Tenant is not in
default under this Lease, Tenant's possession of the Premises shall not be
disturbed as a result of such termination, foreclosure or deed in lieu of
foreclosure. Tenant shall execute and deliver, upon demand by Landlord and in
the form requested by Landlord, any additional documents evidencing the priority
or subordination of this Lease and the attornment of Tenant with respect to any
such ground leases or underlying leases or the lien of any such mortgage or deed
of trust. Tenant hereby irrevocably appoints Landlord as attorney-in-fact of
Tenant to execute, deliver and record any such documents in the name and on
behalf of Tenant if Tenant fails to do same pursuant to the foregoing.
16.2 If, in connection with the obtainment of financing for the Project
or any portion thereof, the lender requests reasonable modifications of
this Lease as a condition to the furnishing of such financing, Tenant
shall not unreasonably withhold or delay its consent thereto, provided
that such modifications do not increase the obligations of Tenant
hereunder or materially adversely affect Tenant's rights hereunder.
17. Observance of Rules and Regulations
Tenant shall observe and comply with the rules and regulations set forth in
Section 39 below and any and all reasonable modifications thereof and additions
thereto from time to time established by Landlord. Landlord shall not be
responsible for the non-observance of, or noncompliance with, any of said rules
and regulations by any other tenant or occupant of the Building. In the event of
any conflict between said rules and regulations and other provisions hereof, the
latter shall control.
18. Access by Landlord
Landlord reserves, and Landlord (and its agents, contractors and employees)
shall at reasonable times have, the right to enter the Premises to inspect same,
to supply janitorial services and any other service to be provided by Landlord
to Tenant hereunder, to show the Premises to any prospective purchaser,
beneficiary, mortgagee, or, during the last six (6) months of the term hereof to
prospective tenants, and to make any alteration, improvement or repair to the
Premises or any portion of the Building, or Project, without abatement of rent,
and Landlord may for that purpose erect, use and maintain scaffolding, pipes,
conduits and other necessary structures in and through the Premises where
reasonably required by the character of the work to be performed, provided that
entrance to the Premises shall not be blocked thereby, and provided further that
Landlord shall use reasonable efforts to minimize any interference with Tenant's
use of and access to the Premises resulting from the foregoing. Tenant hereby
waives any claim for damages or abatement of rent for any injury or
inconvenience to or interference with Tenant's business, any loss of occupancy
or quiet enjoyment of the Premises, and any other loss occasioned thereby,
except to the extent arising from the gross negligence or willful misconduct of
Landlord. For each of the aforesaid purposes, Landlord shall at all times have
and retain a key with which to unlock all of the doors in, upon and about the
Premises, excluding Tenant's vaults and safes, and Landlord shall have the right
to use any and all means which Landlord may deem necessary or proper to open
said doors in an emergency, in order to obtain entry to any portion of the
Premises, and any entry to the Premises or portions thereof obtained by Landlord
by any such means or otherwise shall not under any circumstances be construed or
deemed to be a forcible or unlawful entry into, or a detainer of, the Premises,
or an eviction, actual or constructive, of Tenant from the Premises or any
portion thereof.
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Landlord shall also have the right at any time, without same constituting
an actual or constructive eviction and without incurring any liability to Tenant
therefor, to change the arrangement and/or location of entrances or passageways,
doors and doorways, and corridors, elevators, stairs, toilets or other public
parts of the Building, provided that Landlord shall use reasonable efforts to
minimize any interference with Tenant's use of and access to the Premises
resulting from the foregoing.
19. Default by Tenant
The occurrence of any of the following shall constitute a breach of and
default under this Lease by Tenant:
19.1 Failure by Tenant to pay any amount (including, without limitation,
monthly installments of Base Rent and Additional Rent) when and as same
become payable in accordance with the provisions of this Lease, or to
duly, promptly and completely perform any obligation of Tenant under
Section 14 or 16 above, and continuation of such failure for a period
of three (3) days after written notice from Landlord to Tenant
specifying the nature of such failure.
19.2 Failure by Tenant in the due, prompt and complete performance or
observance of any other express or implied covenant, agreement or
obligation of Tenant contained in this Lease, and the continuation of
such failure for a period often (10) days after written notice from
Landlord to Tenant specifying the nature of such failure; provided,
however, that if any such failure not involving a hazardous condition
is curable, but cannot reasonably be cured within such period, Tenant
shall not be deemed to be in default hereunder if Tenant promptly
commences such cure within such period and thereafter diligently
pursues such cure to completion within a reasonable time, but in no
event more than thirty (30) days after such notice.
19.3 Tenant's vacating or abandoning of the Premises.
19.4 Any financial statement or any representation given to Landlord by
Tenant, or any assignee, sublessee, other transferee or successor of
Tenant or any guarantor of this Lease, proves to be materially false or
misleading.
19.5 The insolvency of Tenant, the making by Tenant of any assignment
for the benefit of creditors; the filing by or against Tenant of a
petition to have Tenant adjudged bankrupt or of a petition for
reorganization or arrangement under any law relating to bankruptcy,
insolvency or creditor's rights in general (unless in the case of a
petition filed against Tenant, the same is dismissed within sixty (60)
days); the appointment of a trustee or receiver to take possession of
all or a substantial part of Tenant's assets or of Tenant's interest
under this Lease, where such seizure is not discharged within thirty
(30) days. The occurrence of any of the acts or events referred to in
this subsection with respect to any guarantor of this Lease shall also
constitute a default hereunder.
19.6 The attachment, execution or other judicial seizure of a
substantial portion of Tenant's assets or of Tenant's interest in this
Lease, where such seizure is not discharged within thirty (30) days.
20. Remedies of Landlord
20.1 In the event of Tenant's breach of or default under this Lease as
provided in Section 19 above, Landlord, at Landlord's option, and
without limiting Landlord in the exercise of any other right or remedy
Landlord may have on account of such default, and without any further
demand or notice, may terminate this Lease and/or, to the extent
permitted by law, remove all persons and property from the Premises,
which property shall be stored by Landlord at a warehouse or elsewhere
at the risk, expense and for the account of Tenant.
20.2 If Landlord elects to terminate this Lease as provided in Section
20.1 above, Landlord shall be entitled to recover from Tenant the
aggregate of:
20.2.1 The worth at the time of the award of the unpaid rent and charges
equivalent to rent earned as of the date of the termination hereof;
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20.2.2 The worth at the time of award of the amount by which the future
rent and charges equivalent to future rent and other amounts due
hereunder which would have been earned after the date of termination
hereof until the time of the award exceeds the amount of such rental
loss that Tenant proves could have been reasonably avoided;
20.2.3 The worth at the time of the award of the amount by which the
future rent and charges equivalent to future rent for the balance of
the term hereof after the time of the award exceeds the amount of
such rental loss that Tenant proves could have been reasonably
avoided;
20.2.4 Any other amount necessary to compensate Landlord for the
detriment proximately caused by Tenant's failure to perform its
obligations under this Lease or which, in the ordinary course of
things, would be likely to result therefrom; and,
20.2.5 Any other amount which Landlord may hereafter be permitted to
recover from Tenant to compensate Landlord for the detriment caused
by Tenant's default.
For the purposes of this Section, the "time of the award" shall mean
the date upon which the judgement in any action brought by Landlord against
Tenant by reason of such default is entered or such earlier date as the court
may determine; the "worth at the time of award" of the amounts referred to in
Sections 20.2.1 and 20.2.2 shall be computed by allowing interest at the
Interest Rate, but not less than the legal rate; and the "worth at the time of
award" of the amount referred to in Section 20.2.3 shall be computed by
discounting such amount at the discount rate of the Federal Reserve Bank of San
Francisco at the time of the award plus one percent (1%) per annum.
20.3 Nothing in this Section 20 shall be deemed to affect Landlord's
right to indemnification, under the indemnification clause or clauses
contained in this Lease for claims or liability arising from events
occurring prior to the termination of this Lease.
20.4 Notwithstanding anything to the contrary set forth herein,
Landlord's reentry to perform acts of maintenance or preservation of,
or in connection with efforts to relet, the Premises, or any portion
thereof, or the appointment of a receiver upon Landlord's initiative to
protect Landlord's interest under this Lease shall not terminate
Tenant's right to possession of the Premises or any portion thereof
and, until Landlord does elect to terminate this Lease, this Lease
shall continue in full force and Landlord may pursue all its remedies
hereunder including, without limitation, the right to recover from
Tenant as they become due hereunder all rent and other charges required
to be paid by Tenant under the terms of this Lease.
20.5 In the event of any default by Tenant as set forth above, then in
addition to any other remedies available to Landlord at law or in
equity or under this Lease, Landlord shall have the right to bring an
action or actions from time to time against Tenant, in any court of
competent jurisdiction, for all rental and other sums due or becoming
due under this Lease, including all damages and costs proximately
caused thereby, notwithstanding Tenant's abandonment or vacation of the
Premises or other acts of Tenant. Such remedy may be exercised by
Landlord without prejudice to its right to thereafter terminate this
Lease in accordance with the other provisions contained in this Section
20.
20.6 The term "rent" and "rental" as used in this Section 20 and in any
and all other provisions of this Lease, shall mean Base Rent,
Additional Rent and any and all other amounts payable by Tenant
pursuant to the provisions of this Lease.
20.7 In the event of Tenant's abandonment of the Premises or if Landlord
shall elect to reenter or shall take possession of the Premises
pursuant to any legal proceeding or pursuant to any notice provided by
law, and until Landlord elects to terminate this Lease, Landlord may,
from time to time, without terminating this Lease, recover all rental
as it becomes due under Section 20.5 above and/or relet the Premises or
any part thereof for the account of and on behalf of Tenant, on any
terms, for any term (whether or not longer than the term of this Lease)
and at any rental as Landlord in its reasonable discretion may deem
advisable, and Landlord may make any alterations and repairs to the
Premises in connection therewith. Tenant hereby irrevocably constitutes
and appoints Landlord as its special attorney-in-fact, irrevocable and
coupled with an interest, for purposes of reletting the Premises
pursuant to the immediately preceding sentence. In the event that
Landlord shall elect to so relet the Premises on behalf of Tenant, then
rentals received by Landlord from such reletting shall be applied:
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20.7.1 First, to reimburse Landlord for the costs and expenses of such
reletting (including, without limitation, costs and expenses or
retaking or repossessing the Premises, removing persons and property
therefrom, securing new tenants, and, if Landlord shall maintain and
operate the Premises, the costs thereof) and necessary or reasonable
alterations.
20.7.2 Second, to the payment of any indebtedness of Tenant to Landlord
other than Base Rent, adjustments to Base Rent, Additional Rent and
other sums due and unpaid hereunder.
20.7.3 Third, to the payment of rent, Base Rent, Additional Rent and
other sums due and unpaid hereunder, and the residue, if any, shall
be held by Landlord and applied in payment of other or future
obligations of Tenant to Landlord as the same may become due and
payable.
Should the rentals received from such reletting, when applied in the
manner and order indicated above at any time be less than the total amount owing
from Tenant pursuant to this Lease, then Tenant shall pay such deficiency to
Landlord and if Tenant does not pay such deficiency within five (5) days of its
receipt of written notice, Landlord may bring an action against Tenant for
recovery of such deficiency or pursue its other remedies hereunder.
20.8 All rights, powers and remedies of Landlord hereunder and under any
other agreement now or hereafter in force between Landlord and Tenant
shall be cumulative and not alternative and shall be in addition to all
rights, powers and remedies given to Landlord at law or in equity. The
exercise of any one or more of such rights or remedies shall not impair
Landlord's right to exercise any other right or remedy.
20.9 As security for Tenant's performance and satisfaction of each and
every one of its duties and obligations under this Lease, Tenant does
hereby assign and grant to Landlord a security interest under the
Hawaii Commercial Code in and to Tenant's right, power and authority,
during the continuance of this Lease, to receive the Tenants' share of
rents, issues, profits or other payments received under any sublease or
other transfer of part or all of Tenant's interest in the Premises,
reserving unto Tenant the right prior to any default hereunder to
collect and retain the Tenant's share of said rents, issues and profits
as they become due and payable, except that nothing contained herein
shall be construed to alter the provisions of Section 10 above. Upon
any such default, Landlord shall have the right at any time thereafter,
without notice (except as may be provided for herein), either in
person, by agent or receiver to be appointed by a court, to enter and
take possession of the Premises and collect such Tenant's share of such
rents, issues, profits or other payments, including without limitation
those past due and unpaid, and apply same, less court costs and
expenses of collection, including without limitation reasonable
attorneys' fees upon any indebtedness secured hereby and in such order
as Landlord may determine.
20.10 If, after Tenant's abandonment of the Premises, Tenant leaves behind
any items of personal property, then Landlord shall store such property
at a warehouse or any other location at the risk, expense and for the
account of Tenant, and such property shall be released only upon
Tenant's payment of any and all moving and storage charges, as well as
any expense or damages incurred as a result of the removal, moving and
storage of such property, together with all sums due and owing under
this Lease. If Tenant does not reclaim such property within the period
permitted by law, Landlord may sell such property in accordance with
law and apply the proceeds of such sale to any sums due and owing
hereunder, or retain said property, granting Tenant credit against sums
due and owing hereunder for the reasonable value of such property.
20.11 To the extent permitted by law, Tenant hereby waives all provisions
of, and protection under, any decisions, statutes, rules, regulations
and other laws of the State of Hawaii to the extent same are
inconsistent and in conflict with specific terms and provisions hereof.
If, at any time during the term hereof, Tenant fails, refuses or
neglects to do any of the things provided to be done by Tenant, Landlord may,
after notice (except in the event of emergency), do the same, but at the expense
and for the account of Tenant. The amount of any money so expended or
obligations so incurred by Landlord, together with interest thereon at the
Interest Rate, shall be repaid to Landlord within five (5) days after demand by
Landlord.
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21. Default by Landlord; Limitation of Liability
21.1 Landlord shall not be deemed to be in default hereunder unless
obligations required by Landlord hereunder are not performed by
Landlord, or by any beneficiary under any deed of trust, mortgagee,
ground lessor or other lienholder with rights in all or any portion of
the Project, within thirty (30) days after written notice thereof by
Tenant to Landlord and to such other parties whose names and addresses
are furnished to Tenant in writing, which notice specifies that there
has been a failure to perform such obligation provided, however, that
if the nature of such obligations is such that more than thirty (30)
days are reasonably required for their cure, Landlord shall not be
deemed to be in default hereunder if Landlord or any such other
party(s) commences such cure within such thirty (30) day period and
thereafter diligently pursues such cure to completion.
21.2 If Landlord is in default hereunder and, as a consequence thereof,
Tenant recovers a judgment against Landlord, such judgment may be
satisfied only out of the right, title and interest of Landlord in the
Project and out of the rent or other revenue receivable by Landlord
from the Project, or out of the proceeds receivable by Landlord from
the sale or other disposition of all or any portion of Landlord's
right, title and interest in the Project. Neither Landlord nor any of
the partners of Landlord shall be personally liable for any deficiency
or otherwise.
22. Damage and Destruction
22.1 If the Premises or the Project is damaged by an insured casualty,
occurring more than six (6) months prior to the expiration of the term
hereof, Landlord shall forthwith repair same, or cause same to be
repaired, to the extent that insurance proceeds are made available to
Landlord therefor and provided that such repairs can, in Landlord's
reasonable opinion, be made within ninety (90) from the date of such
damage (without payment of overtime or other premiums) under the laws
and regulations of the federal, state and local governmental
authorities having jurisdiction thereof.
If the Premises or the Project is damaged by an uninsured casualty which
shall cost more than $100,000 to repair, or if with respect to an insured
casualty the repairs shall require more than ninety (90) days to complete
without payment of overtime or other premium, or if the Premises or the Project
is damaged by casualty within the last six (6) months of the term and cost in
excess of $ I00,000 to repair, Landlord shall have the option within forty-five
(45) days from the date of such damage either to (i) notify Tenant of Landlord's
election to repair such damage, in which event Landlord shall thereafter repair
same, or (ii) notify Tenant of Landlord's election to immediately terminate this
Lease, in which event the Lease shall be so terminated. Landlord shall refund to
Tenant any rent previously paid for any period of time subsequent to such
termination. Notwithstanding any contrary provision herein, and regardless of
whether caused by casualty, (a) Landlord shall not be required to repair any
damage to the property of Tenant or to repair or replace any paneling,
decorations, railings, floor coverings, alterations, additions, fixtures or
improvements installed on the Premises by or at the expense of Tenant, and (b)
any damage caused by the negligence or willful misconduct of Tenant or any of
its agents, contractors, employees or invitees shall be promptly repaired by
Tenant, at its sole cost and expense, to the reasonable satisfaction of
Landlord; provided, however, that Landlord shall bear such cost and expense to
the extent it receives proceeds covering such damage from insurance obtained by
Landlord as part of Building Operating Costs.
22.2 If Landlord repairs damage to the Premises pursuant to the
provisions of Section 22. l above, Base Rent and Additional Rent
payable hereunder until such repairs are completed shall be abated in
the proportion that the rentable area of the portion, if any, of the
Premises rendered unusable by Tenant (and therefore not used) bears to
the rentable area of the Premises; provided, however, that there shall
be such rent abatement only if (i) the damage so repaired is not caused
by the negligence or willful misconduct of Tenant or any of its agents,
contractors, employees, guests or invitees, and (ii) a material portion
of the Premises is so rendered unusable for more than five (5)
consecutive business days. Except for abatement of rent, if any, Tenant
shall have no claim against Landlord for any damage suffered by reason
o(Pounds) (1) any damage to the Premises, (2) such repairs or (3) any
inconvenience, interruption, annoyance, loss of business, or continued
expense of operation caused by such damage or repair.
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23. Eminent Domain
23.1 If the entire Premises or so much thereof as to render the balance
thereof not reasonably usable for the conduct of Tenant's business,
shall be taken or appropriated under the power of eminent domain or
conveyed in lieu thereof, either party hereto may, by serving written
notice upon the other party hereto within thirty (30) days thereafter,
immediately terminate this Lease. If any such substantial part of the
Project excluding the Premises shall be taken or appropriated under the
power of eminent domain or conveyed in lieu thereof, Landlord may so
terminate this Lease. In either of such events, Landlord shall receive
(and Tenant shall assign to Landlord upon demand by Landlord) any
income, rent, award or any interest therein which may be paid in
connection therewith, and Tenant shall have no claim for any part of
any sum so paid, whether or not attributable to the value of the
unexpired term of this Lease; provided, however, that nothing herein
shall prevent Tenant from pursuing a separate award in connection with
the taking of Tenant's removable tangible personal property placed in
the Premises solely at Tenant's expense and for Tenant's relocation
costs.
If a part of the Premises shall be so taken, appropriated or conveyed and
neither party hereto shall elect to so terminate this Lease, (i) Base Rent and
Additional Rent payable hereunder shall be abated in the proportion that the
rentable area of the Premises so taken, appropriated or conveyed beats to the
rentable area of the entire Premises, and (ii) if the Premises shall have been
damaged as a consequence of such partial taking, appropriation or conveyance,
Landlord shall, to the extent of any severance damages received by Landlord,
restore the Premises continuing under this Lease, provided, however, that
Landlord shall not be required to repair or restore any damage to the property
of Tenant or to make any repairs to or restoration of any alterations,
additions, fixtures or improvements installed on the Premises by or at the
expense of Tenant, and Tenant shall pay any amount in excess of such severance
damages required to complete such repairs or restoration.
Notwithstanding anything to the contrary contained in this Section, if the
temporary use or occupancy of any part of the Premises shall be taken or
appropriated under the power of eminent domain or conveyed in lieu thereof
during the term of this Lease, this Lease shall be and remain unaffected by such
taking, appropriation or conveyance and Tenant shall continue to pay in full all
rent payable hereunder by Tenant during the term of this Lease. In the event of
any such temporary taking, appropriation or conveyance, Tenant shall be entitled
to receive that portion of any award which represents compensation for loss of
the use or occupancy of the Premises during the term of this Lease, and Landlord
shall be entitled to receive the balance of such award.
24. Sale by Landlord
If Landlord sells or transfers all or any portion of the Project including
the Premises, Landlord shall, upon consummation of the sale or transfer, be
released from any liability relating to obligations or covenants thereafter to
be performed or observed under this Lease, and in such event Tenant agrees to
look solely to Landlord's successor-in-interest with respect to such liability.
Landlord may transfer or credit any security deposit or prepaid rent to
Landlord's successor-in-interest, and upon such transfer Landlord shall be
discharged from any further liability therefor.
25. Surrender of Premises
Tenant shall upon the expiration or sooner termination of the term hereof,
surrender to Landlord the Premises, and all repairs, changes, alterations,
additions and improvements thereto, in good order, condition and repair,
ordinary wear and tear excepted, clean and free of debris provided, however,
that Landlord may require that Tenant remove any changes, alterations, additions
and improvements to the Premises installed by Tenant upon such expiration or
termination, in which event Tenant shall so remove same and restore the Premises
to its former state at its sole cost and expense. Tenant shall, upon the
expiration or sooner termination of the term hereof, and at Tenant's sole cost
and expense, remove all movable furniture, equipment and other personal property
belonging to Tenant placed in the Premises solely at Tenant's expense, Tenant
shall immediately, at its sole cost and expense, repair any damage caused by the
removal of any property.
26. Quiet Enjoyment
So long as Tenant is not in default hereunder, Tenant shall have the right
to the quiet peaceful enjoyment and possession of the Premises and the common
areas during the term of this Lease, subject to the terms and conditions of this
Lease.
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27. Notices
Whenever any notice, demand or other communication is to be given under the
provisions of this Lease by either party hereto to the other party hereto, it
shall be in writing and shall be (a) personally served, (b) mailed by United
States registered or certified mail, return receipt requested, postage prepaid,
(c) sent by a nationally recognized courier service (e.g. Federal Express) for
next day delivery, to be confirmed in writing by such courier, (d) or "faxed"
with appropriate provisions for confirmation of receipt, addressed as set forth
in Sections 1.1.10 and 1.1.11 of the Basic Lease Information with respect to
Tenant and as follows with respect to Landlord:
Bishop Street Associates
1132 Bishop Street
Suite 1405
Honolulu, Hawaii 96813
Facsimile No. (808) 599-5211
with a copy to:
Monroe & Friedlander Management, Inc.
220 South King Street, Suite 1800
Honolulu, HI 96813
Facsimile No. (808) 545-5689
Attention: Bobbie Lau
In the event that a different address is furnished by either party hereto
to the other party hereto in writing, notices, demands and other communications
shall thereafter be sent or delivered to the new address. Service by mail shall
be deemed complete on the day of actual delivery as shown by the addressee's
registered or certified mail receipt or at the expiration of the third (3rd)
business day after the date of mailing, whichever first occurs. Service by
personal service or courier shall be deemed complete on receipt. Service by
"fax" shall be deemed complete on confirmation of receipt.
28. Personal Property Taxes
Tenant shall pay before delinquency all taxes, assessments, license fees
and other charges (collectively "taxes") that are levied and assessed against
Tenant's trade fixtures and other personal property installed or located in or
on the Premises, and that become payable during the term. On demand by Landlord,
Tenant shall furnish Landlord with satisfactory evidence of such payments. If
any taxes on Tenant's personal property are levied against Landlord or
Landlord's property, or if the assessed value of the Building and other
improvements in which the Premises are located is increased by the inclusion of
a value placed on Tenant's personal property or leasehold improvements, as
determined by Landlord, and if Landlord pays the taxes on any of these items or
the taxes based on the increased assessment of these items, Tenant, on demand,
shall immediately reimburse Landlord for the sum of the taxes levied against
Landlord, or the proportion of the taxes resulting from the increases in
Landlord's assessment. Landlord shall have the right to pay these taxes
regardless of the validity of the levy.
29. Interest and Late Charges
Any amount not paid by Tenant to Landlord when due hereunder shall bear
interest at a rate (the "Interest Rate") equal to the rate specified in Section
1.1.13 of the Basic Lease Information, from the due date until paid, unless
otherwise specifically provided herein, but the payment of such interest shall
not excuse or cure any such failure by Tenant under this Lease. In addition to
such interest, if any amount is not paid within ten (10) days after same is due,
a late charge equal to the amount specified in Section 1.1.13 of the Basic Lease
Information of such amount shall be assessed, which late charge Tenant hereby
agrees is a reasonable estimate of the damages Landlord shall suffer as a result
of Tenant's late payment, which damages include Landlord's additional
administrative and other costs associated with such late payment. The parties
agree that it would be impracticable and extremely difficult to fix Landlord's
actual damages in such event. Such interest and late charges are separate and
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cumulative and are in addition to and shall not diminish or represent a
substitute for any or all of Landlord's rights or remedies under any other
provision of this Lease. If a late charge is payable hereunder, whether or not
collected, for any three (3) installments of Base Rent during any twelve (12)
month period, then all further Base Rent shall automatically become due and
payable quarterly in advance, rather than monthly, notwithstanding any provision
of this Lease to the contrary.
30. Successors and Assigns
Subject to Sections 10 and 24 above, the provisions hereof shall be binding
upon and shall inure to the benefit of the parties hereto and their respective
heirs, executors, administrators, successors and assigns.
31. Attorney's Fees
In any litigation arising herefrom between the parties hereto, the
prevailing party shall be entitled to recover reasonable attorney's fees and
costs incurred therein.
32. Light and Air
Tenant covenants and agrees that no diminution of light, air or view by any
structure which may hereafter be erected (whether or not by Landlord) shall
entitle Tenant to any reduction of rent under this Lease, result in any
liability of Landlord to Tenant, or in any other way affect this Lease or
Tenant's obligations hereunder.
33. Signs and Directory
33.1 Tenant shall not, without the prior written consent of Landlord,
place, construct or maintain any sign, advertisement, awning, banner or
other decoration on or visible from, or otherwise use, the exterior or
interior of the Premises (including, but not limited to, the outer
surfaces of the exterior walls and doors of the Premises), any
terraces, the roof of the Building, and the public and common areas of
the Project. All door signs on the corridor doors of the Premises which
lead to the common areas of the Project must conform to standards of
the Project as to size, style, placement, color and number of included
names, and other matters set forth in Section 40 below.
33.2 Landlord shall place, construct and maintain a directory(ies) to be
located in the lobby of the Building and in such other locations, if
any, as Landlord, in its sole discretion, may determine, which
directory(ies) shall be for the display of the business names of
tenants in the Building and their respective suite numbers, provided,
however, that Tenant shall notify Landlord of the business names it
desires to include on such directory and shall, upon demand by
Landlord, pay the cost of directory sign strips bearing such Tenant's
business name. Landlord shall have the sole right to determine and
change from time to time the type of such directory(ies) and such sign
and all common Project signage, including door signs and the contents
thereof, including, but not limited to, size of letters, style, color
and placement.
34. Parking
Subject to applicable rules and regulations, Tenant shall have parking
rights hereunder With respect to such number of its employees' automobiles in
the parking facility of the Building, and at such rental rate(s) and upon such
other terms, as may be specified in Section 1.1.12 of the Basic Lease
Information. All of such parking rights shall be exercised by Tenant throughout
the entire term hereof. Tenant may not sell, assign or transfer its parking
rights hereunder, except pursuant to a permitted sublease or assignment of this
Lease. Except as may otherwise be specifically provided in said Section 1.1.12
or elsewhere in this Lease, Tenant shall not be entitled to any designated,
reserved, assigned or valet parking hereunder. In addition to such rights,
Tenant and its invitees shall have the right to use in common with other tenants
of the Building and their invitees and the general public any portions of the
parking facilities of the Building designated for public use, subject to the
rates, rules and
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regulations, and any other charges, fees and taxes to be collected by Landlord,
for such parking facility use. Landlord reserves the right to establish and
alter, from time to time, all parking rates, rules and regulations, including
the parking rates set forth in Section 1.1.12.
35. Brokers
35.1 Landlord has entered into an agreement with the real estate broker
specified as Landlord's broker in Section 1.1.14 of the Basic Lease
Information ("Landlord's Broker") pursuant to which Landlord has
granted to Landlord's Broker the exclusive right to lease space in the
Building. Landlord shall pay any commissions or fees that are payable
to Landlord's Broker with respect to this Lease in accordance with the
provisions of a separate commission contract. Landlord shall have no
further or separate obligation for payment of commissions or fees to
any other real estate broker, finder or intermediary. Tenant represents
that it has not had any dealings with any real estate broker, finder or
intermediary with respect to this Lease, other than Landlord's Broker
and Tenant's broker ("Tenant's Broker"), if any, specified in Section
1.1.15 of the Basic Lease Information. Any commissions or fees payable
to Tenant's Broker with respect to this Lease shall be paid exclusively
by Landlord's Broker and/or Tenant, and Landlord shall have no
obligation of any kind with respect to such commissions or fees.
Subject to the foregoing, each party hereto shall indemnify and hold
harmless the other hereto from and against all losses, all damages,
liabilities, costs and expenses (including, but not limited to,
reasonable attorneys' fees and related costs) resulting from any claims
that may be assessed against such other party by any real estate
broker, finder or intermediary arising from any act of the indemnifying
party in connection with this Lease.
36. Relocation Right
Landlord may, upon not less than sixty (60) days' prior written notice to
Tenant, substitute for the Premises reasonably similar space elsewhere in the
Building, and this Lease shall be deemed modified so as to eliminate the
Premises hereby leased and to substitute therefor such other premises. In such
event, in all other respects this Lease shall remain in full force and effect
according to its terms. In connection therewith, the costs of preparing such
other premises for Tenant's use shall be borne by Landlord, and any other
Tenant's reasonable costs of moving with respect thereto shall be paid by
Landlord.
37. Authority
If Tenant is a corporation, trust or partnership, each individual executing
this Lease on behalf of Tenant represents and warrants that he or she is duly
authorized to so execute and deliver this Lease. If Tenant is a corporation,
trust or partnership, it shall, within ten (10) days after execution of this
Lease, deliver to Landlord satisfactory evidence of such authority. If Tenant is
a corporation or partnership, it shall, upon demand by Landlord, also deliver to
Landlord satisfactory evidence of (a) good standing in Tenant's state of
incorporation or formation and (b) qualification to do business in Hawaii.
38. Miscellaneous
38.1 If Landlord waives the performance of any term, covenant or
condition contained in this Lease, such waiver shall not be deemed to
be a waiver of any other breach of the same or of any other term,
covenant or condition contained herein. Furthermore, the acceptance of
rent by Landlord shall not constitute a waiver of any preceding breach
by Tenant of any term, covenant or condition of this Lease, other than
the failure of Tenant to pay the particular rent so accepted,
regardless of Landlord's knowledge of such breach at the time of
Landlord's acceptance of such rent. Failure by Landlord to enforce any
of the terms, covenants or conditions of this Lease for any length of
time shall not be deemed to waive or to affect the right of Landlord to
insist thereafter upon strict performance by Tenant. Waiver by Landlord
of any term, covenant or condition contained in this Lease may only be
made by a written document signed by Landlord.
38.2 Any voluntary or other surrender of this Lease by Tenant, mutual
termination hereof or termination hereof by Landlord shall not work a
merger, and shall, at the option of Landlord, terminate all or any
existing subleases or sub-tenancies, or may, at the option of Landlord,
operate as an assignment to Landlord of any or all such subleases or
sub-tenancies.
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38.3 This Lease shall not be recorded, no memorandum hereof shall be
recorded without Landlord's prior written consent.
38.4 Rent and all other sums payable under this Lease must be paid in
lawful money of the United States of America.
38.5 This Lease may be executed in counterparts with the same effect as
if both parties hereto had executed the same document. Both
counterparts shall be construed together and shall constitute a single
lease.
38.6 Nothing contained in this Lease shall be construed to create the
relationship of principal and agent, partnership, joint venture or any
other relationship between the parties hereto, other than the
relationship of landlord and tenant.
38.7 Any provisions of this Lease which shall prove to be invalid, void
or illegal shall in no way affect, impair or invalidate any other
provision hereof, and such other provisions shall remain in full force
and effect, provided, however, that if in Landlord's reasonable
judgment the invalidation or voiding of any such provision or
provisions would materially frustrate the reasonable expectations of
the parties hereto in entering into this Lease, then Landlord may
terminate this Lease and release Tenant from prospective liability
hereunder upon sixty (60) days' advance written notice.
38.8 The term "Premises" shall be deemed to include (unless, based on
the context, such meaning would clearly be unintended) the space
demised and improvements on or at any time hereafter built in such
space.
38.9 The Term "Tenant" or any pronoun used in place hereof shall
indicate and include the masculine or feminine, the singular or plural
number, individual, firms or corporations, and any successor in
interest of Tenant.
38.10 The section headings herein are for convenience of reference only
and shall in no way define, increase, limit or describe the scope or
intent of any provision of this Lease.
38.11 In any case where this Lease is entered into by co--tenants, the
obligations of such co-tenants hereunder shall be joint and several.
38.12 Time is of the essence of this Lease and all of its provisions.
38.13 This Lease shall in all respects be governed by the laws of the
state in which the Premises is located. The parties acknowledge that
the laws of the state in which the Premises is located may change by
virtue of legislative enactment or judicial decision. The parties
further acknowledge that they have entered into this Lease based on the
law at the time of the execution of the Lease, and each hereby
expressly waives any further rights, benefits, or advantages derived
from or as a result of any future changes in law. In any action or
proceeding arising herefrom, Tenant hereby consents to (a) the
jurisdiction of any competent court within the state in which the
Premises is located, (b) service of process by any means authorized by
the law of the state in which the Premises is located, and (c) trial
without a jury.
38.14 This Lease contains the entire agreement of the parties hereto with
respect to the subject matter hereof and supersedes any previous
negotiations. There have been no representations made by Landlord or
any representative thereof or understandings made between the parties
other than those set forth in this Lease. Without limiting the
generality of the foregoing, Tenant specifically acknowledges and
agrees that neither Landlord nor any broker, agent or representative
thereof has made any warranty or representation with respect to the
tenant mix of the Building, the identity of prospective or other
tenants of the Building, profitability or suitability of the Premises
for Tenant use, the state of repair of the Project and the Premises, or
the amount and extent of provided services, except as may be otherwise
specifically set forth herein.
38.15 This Lease may not be modified, except by a written document
executed by the parties hereto.
38.16 If any guarantee of this Lease is required by Landlord, such
guarantee shall be in the form and content attached hereto.
38.17 The words "person" and "persons" as used herein shall include
individuals, firms, partnerships, associations and corporations.
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38.18 The language in all parts of this Lease shall be in all cases
construed simply according to its fair meaning, and not strictly for or
against Landlord or Tenant. Any reference to any Section herein shall
be deemed to include all subsections thereof unless otherwise specified
or reasonably required from the context. Any reference to "days" or
"months" herein shall refer to calendar days or months, respectively,
unless specifically provided to the contrary. Unless clearly
inconsistent with the context, any reference herein to the "term
hereof" or "the term of this Lease" shall refer to the term of this
Lease as the same may be extended pursuant to any extension option(s)
contained herein. The terms "herein", hereunder" and "hereof" as used
in this Lease shall mean "in this Lease" and "of this Lease"
respectively, except as otherwise specifically set forth in this Lease.
38.19 Any and all exhibits and addendums referred to in this Lease are
incorporated herein as a part hereof.
38.20 Tenant hereby acknowledges and agrees that the exterior walls of the
Building and the area between the demising walls of the Premises and
the finished ceilings and floors of the Building thereabove or
therebelow have not been demised hereby and that the use thereof,
together with the right to install, maintain, use, repair and replace
pipes, ducts, conduits and wires leading through, under, above or
alongside the Premises, is hereby excepted and reserved unto Landlord.
38.21 The submission of this Lease by Landlord or its agent or
representative for examination or execution by Tenant does not
constitute an option to offer to lease the Premises upon the terms and
conditions contained herein or a reservation of the Premises in favor
of Tenant, it being intended hereby that this Lease shall become
effective only upon the execution hereof by Landlord and delivery of a
fully executed counterpart hereof to Tenant.
38.22 Tenant hereby warrants and represents that neither its execution of
nor performance under this Lease shall cause Tenant to be in violation
of any agreement, instrument, contract, law, rule or regulation by
which Tenant is bound, and Tenant agrees to indemnify Landlord against
any loss, cost, damage or liability including, without limitation,
reasonable attorney's fees and related costs arising out of Tenant's
breach of this warranty and representation.
38.23 Tenant acknowledges that Landlord may choose not to designate a
thirteenth (13th) floor in the Building.
38.24 Rent shall not be abated, nor may this Lease be terminated by
Tenant, except as may otherwise be expressly provided herein.
39. Rules and Regulations
39.1 No sidewalks, entrance, passages, courts, elevators, vestibules,
stairways, corridors or halls shall be obstructed or encumbered by
Tenant or used for any purpose other than ingress and egress to and
from the Premises of the Building and if the Premises is situated on
the ground floor of the building, Tenant shall further, at Tenant's own
expense, keep the sidewalks and curb directly in front of the Premises
clean and free from rubbish.
39.2 No awning or other projection shall be attached to the outside
walls or windows of the Building without the prior written consent of
Landlord. No curtains, blinds, shades, drapes or screens shall be
attached to or hung in, or used in connection with any window or door
of the Premises, without the prior written consent of Landlord. Such
awnings, projections, curtains, blinds, shades, drapes, screens and
other fixtures must be of a quality, type, design, color, material and
general appearance approved by Landlord, and shall be attached in the
manner approved by Landlord. All electrical fixtures hung in offices or
spaces along the perimeter of the Premises must be fluorescent, of a
quality, type, design, bulb color, size and general appearance approved
by Landlord.
39.3 No sign, advertisement, notice or other lettering shall be
exhibited, inscribed, painted or affixed by Tenant on any part of the
outside or inside of the Premises or of the Building, without the prior
written consent of Landlord. In the event of the violation of the
foregoing by Tenant, Landlord may remove same without any liability,
and may charge the expense incurred by such removal to Tenant. Interior
signs on doors and directory tablet shall be inscribed, painted or
affixed for Tenant by Landlord at the expense of Tenant, and shall be
of a quality, quantity, type, design, color, size, style, composition,
material, location and general appearance acceptable to Landlord.
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39.4 The sashes, sash doors, skylights, windows, and doors that reflect
or admit light or air into the halls, passageways or other public
places in the Building shall not be covered or obstructed by Tenant,
nor shall any bottles, parcels, or other articles be placed on the
window sills, or in the public portions of the Building.
39.5 No show cases or other articles shall be put in front of or affixed
to any part of the exterior of the Building, nor placed in public
portions thereof without the prior written consent of Landlord.
39.6 The water and wash closets and other plumbing fixtures shall not be
used for any purposes other than those for which they were constructed,
and no sweepings, rubbish, rags or other substances shall be thrown
therein. All damages resulting from any misuse of the fixtures shall be
borne by Tenant to the extent that Tenant or Tenant's agents, servants,
employees, contractors, visitors or licensees shall have caused the
same.
39.7 Tenant shall not mark, paint, drill into or in any way deface any
part of the Premises or the Building. No boring, cutting or stringing
of wires shall be permitted, except with the prior written consent of
Landlord, and as Landlord may direct.
39.8 No animal or bird of any kind or bicycles shall be brought into or
kept in or about the Premises or the Building.
39.9 Prior to leaving the Premises for the day, Tenant shall draw or
lower window coverings and extinguish all lights.
39.10 Tenant shall not make, or permit to be made, any unseemly or
disturbing noises or disturb or interfere with occupants of the Building
or neighboring buildings or premises or those having business with them.
Tenant shall not throw anything out of the doors, windows or skylights or
down the passageways.
39.11 Neither Tenant or any of Tenant's agents, servants, employees,
contractors, visitors or licensees shall at any time bring or keep upon
the Premises any inflammable, combustible or explosive fluid, chemical or
substance.
39.12 No additional locks, bolts, or mail slots of any kind shall be
placed upon any of the doors or windows by Tenant, nor shall any change
be made in existing locks or the mechanism thereof. Tenant must, upon the
termination of the tenancy, restore to Landlord all keys of stores,
offices and toilet rooms, either furnished to, or otherwise procured by
Tenant, and in the event of the loss of any keys so furnished, Tenant
shall pay to Landlord the cost thereof.
39.13 All removals, or the carrying in or out of any safes, freight,
furniture, fixtures, bulky matter or heavy equipment of any description
must take place only during the hours which Landlord or its agent may
determine from time to time. Landlord reserves the right to prescribe the
weight and position of all safes, which must be placed upon two-inch
thick plank strips to distribute the weight. The moving of safes,
freight, furniture, fixtures, bulky matter or heavy equipment of any kind
must be made upon previous notice to the Superintendent of the Building
and in a manner and at times prescribed by him, and the person employed
by Tenant for such work are subject to Landlord's prior approval.
Landlord reserves the right to inspect all safes, freight or other bulky
articles to be brought into the Building and to exclude from the Building
all safes, freight or other bulky articles which violate any of these
Rules and Regulations or the lease of which these Rules and Regulations
are a part.
39.14 Tenant shall not occupy or permit any portion of the Premises to be
occupied as an office that is not generally consistent with the character
and nature of all other tenancies in the Building, or is (a) for an
employment agency, a public stenographer or typist, a labor union office,
a physician's or dentist's office, a dance or music studio, a school, a
beauty parlor or barber shop, the business or photographic or multilith
or multigraph reproductions or offset printing (not precluding using any
part of the Premises for photographic, multilith or multigraph
reproductions solely in connection with Tenant's own business and/or
activities), a restaurant or bar, an establishment for the sale of
confectionery or soda or beverages or sandwiches or ice cream or baked
goods, an establishment for the preparation or dispensing or consumption
of food or beverages (of any kind) in any manner whatsoever, or as a news
or cigar stand, or as a radio or television or recording studio, theater
or exhibition-hall, for manufacturing, for the storage of merchandise or
for the sale of merchandise, goods or property of any kind at auction, or
for lodging, sleeping or for any immoral purpose, or for any business
which would tend to generate a large amount of elevator or foot traffic
in or about the Building or the land upon which it is located, or any of
the arms used in the operation of the Building, or (b) a use which
conflicts with any so-called "exclusive" then in favor of, or is for any
use the same as that stated in any percentage lease to, another tenant of
the Building, or
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any of Landlord's then buildings which are in the same complex as the
Building, or (c) a use which would be prohibited by any other portion of
this Lease (including but not limited to any Rules and Regulations then
in effect) or in violation of law. Tenant shall not engage or pay any
employees of the Premises, except those actually working for Tenant on
the Premises nor shall Tenant advertise for laborers giving an address at
the Premises.
39.15 Tenant shall not purchase spring water, towels, janitorial or
maintenance or other like service from any company or person not approved
by Landlord. Landlord shall approve a sufficient number of sources of
such services to provide Tenant with a reasonable selection, but only in
such instances and to such extent as Landlord in its reasonable judgment
shall deem appropriate after due consideration to matters concerning
security and proper operation of the Building.
39.16 Landlord shall have the right to prohibit any advertising or
business conducted by Tenant referring to the Building which, in
Landlord's opinion tends to impair the reputation of the Building or its
desirability as a first class building for offices, and upon. notice from
Landlord, Tenant shall refrain from or discontinue such advertising.
39.17 Landlord reserves the right to exclude from the Building between the
hours of 6:00 P.M. and 7:00 A.M. on all days, and at all hours on
Saturdays, Sundays and legal holidays, all persons who do not present a
pass to the Building issued by Landlord. Landlord may furnish passes to
Tenant so that Tenant may validate and issue same. Tenant shall safeguard
said passes and shall be responsible for all acts of persons in or about
the Building who possess a pass issued to Tenant.
39.18 Tenant's contractors shall, while in the Building or elsewhere in
the complex of which the Building forms a part, be subject to and under
the control and direction of the Superintendent of the Building (but not
as agent or servant of said Superintendent or of Landlord).
39.19 If the Premises or the Project is or becomes infested with vermin as
a result of the use or any misuse or neglect of the Premises by Tenant,
its agents, servants, employees, contractors, visitors or licensees,
Tenant shall forthwith at Tenant's expense cause the same to be
exterminated from time to time to the satisfaction of Landlord and shall
employ such licensed exterminators as shall be approved in writing in
advance by Landlord.
39.20 The requirements of Tenant will be attended to only upon application
at the office of the Building. Building personnel shall not perform any
work or do anything outside of their regular duties, unless under special
instructions from the office of Landlord.
39.21 Canvassing, soliciting and peddling in the Building are prohibited
and Tenant shall co-operate to prevent the same.
39.22 No water cooler, air conditioning unit or system or other apparatus
shall be installed or used by Tenant without the written consent of
Landlord.
39.23 There shall not be used in any space, or in the public halls, plaza
areas or lobbies of the Building, or elevators in the complex of which
the Building forms a part, either by Tenant or by jobbers or others, in
the delivery or receipt of merchandise, any hand trucks or dollies except
those equipped with rubber tires and side guards.
39.24 Tenant, Tenant's agents, servants, employees, contractors, licensees
or visitors shall not park any vehicle in any driveway, service
entrances, or areas posted as "No Parking."
39.25 Tenant shall install and maintain, at Tenant's sole cost and
expense, an adequate visibly marked (at all times properly operational)
fire extinguisher next to any duplicating or photocopying machine or
similar heat producing equipment, which may or may not contain
combustible material, in the Premises.
39.26 Tenant shall keep its window coverings closed during any period of
the day when the sun is shining directly on the windows of the Premises.
39.27 Tenant shall not use the name of the Building for any purpose other
than as the address of the business to be conducted by Tenant in the
Premises, nor shall Tenant use any picture of the Building in its
advertising, stationery or in any other manner without
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the prior written permission of Landlord. Landlord expressly reserves the
right at anytime to change said name without in any manner being liable
to Tenant therefor.
40. Door Sign Rules
40.1 There shall be one frame for the suite number and one frame for the
plaques containing the name.
40.2 The top of the frame which holds the suite number plaque will be
located 35 inches from the ceiling.
40.3 The top of the frame which holds the name plaques will be located
40 inches from the ceiling, and the bottom of the frame which holds the
last name plaque will be located no lower than 55 inches from the
ceiling.
40.4 No more than six name plaques shall be permitted on a door, and
each plaque may contain only one line.
40.5 No more than 28 letters and spaces will be allowed on a plaques
(including punctuation).
40.6 Only firm names and names of individuals will be permitted.
Designations such as "Sales Office", "Private", etc. will not be
allowed.
40.7 The name of a firm or individual may be placed only once on any
door.
40.8 The lettering on all door plaques must be centered within the
plaque.
40.9 All door plaques will be in building standard size, color, style
and material as determined by Landlord.
40.10 There may be no signs on any door visible from the corridors of the
Building other than suite main entry doors.
40.11 Any suite which has double entry doors will be treated as having
only one entry door, and signs will be located only on one of such
doors.
IN WITNESS WHEREOF, the parties have executed this Lease as of the date
first hereinabove set forth.
LANDLORD: TENANT:
BISHOP STREET ASSOCIATES DIGITAL ISLAND, INC.,
a California Corporation
By: 1132, INC.
Its Sole General Partner By: /s/ Brian Higgins
--------------------------
Its: CEO
By: /s/ Intelligible By:
----------------------------- --------------------------
Its President Its
THIS LEASE HAS BEEN PREPARED FOR TENANT'S REVIEW AND FOR TENANT'S SUBMISSION
TO ITS LEGAL AND/OR TAX CONSULTANT. NO REPRESENTATION OR RECOMMENDATION IS MADE
BY LANDLORD OR BROKER, OR THE AGENTS OR EMPLOYEES OF EITHER, AS TO THE LEGAL
SUFFICIENCY, LEGAL EFFECT OR TAX CONSEQUENCES OF THIS LEASE OR THE TRANSACTION
RELATING HERETO.
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ADDENDUM TO LEASE
This Addendum is attached to and made a part of that certain Lease (the
"Lease") dated ,1996, between Bishop Street Associates, a Hawaii Limited
partnership ("Landlord"), and DIGITAL ISLAND, INC., a California corporation
("Tenant"), relating to premises described as Suite 1001 of the Building located
at 1132 Bishop Street, Honolulu, Hawaii. The provisions set forth below shall
supersede any inconsistent provisions set forth in the Lease. To the extent
possible, the provisions set forth below have been numbered to coincide with the
numbered sections of the Lease to which they relate. Except as otherwise
provided below, capitalized terms used below shall their respective meaning set
forth in the Lease.
13. Utilities.
Tenants operations require 24-hour, 7 days a week usage of air conditioning
for the room designated as "New computer room" on said Exhibit "1". Landlord, at
Landlord's expense, shall install and maintain the equipment to provide such air
conditioning for said Room A; provided that Tenant shall pay for the cost of
operating such air conditioning equipment, including without limitation, the
cost of electricity to operate such air conditioning equipment.
41. Existing Improvements.
Notwithstanding any term contained herein to the contrary, Landlord shall
deliver the Premises to Tenant together with all tincture then located in the
Premises. Tenant shall be entitled to use such furniture without the payment of
additional rent, provided that Tenant shall surrender such furniture to Landlord
upon the expiration or sooner termination of the term of this Lease, in good
order, condition and repair, ordinary wear and tear excepted.
42. Right of Second Refusal.
Subject to the rights of Hawaii Pacific Engineers Inc. to rent the Area
(hereafter defined), during the term of this Lease, Landlord shall not rent the
area shown in Exhibit "A" attached hereto (the "Area"), containing a rentable
area of approximately 706 square feet to any person or entity until Landlord
shall have (i) offered (in writing) to rent the Area to Tenant upon the same
terms, rent and conditions that Landlord would rent the Area to any other person
or entity, and (ii) allowed Tenant seven (7) days after receipt of said offer to
accept such offer in writing. If Tenant does not accept Landlord's offer by
delivering a written acceptance to Landlord within said seven (7) days period,
then Landlord may rent the Area to any other person or entity upon those terms,
rent and conditions which were offered to Tenant. Should the terms, rent or
conditions of such lease be changed, the Area shall again be offered to Tenant
upon the revised terms, rent or conditions and Tenant shall be allowed seven (7)
days after receipt of such revised offer within which to accept such revised
offer in writing. Notwithstanding any term contained herein to the contrary,
Tenant's rights under this Section 42 shall terminate upon the expiration of the
term of this Lease.
43. Letter Credit.
Upon the execution of this Lease by Landlord and Tenant, Tenant shall
deliver to Landlord a Letter of Credit (i) issued by a bank authorized to do
business in the State of Hawaii, (ii) for the sum of $25,000.00, and (iii) in
such form as shall be reasonably approved by Landlord (the "Letter of Credit").
The Letter of Credit shall provide that Landlord may draw upon the Letter of
Credit upon the occurrence of any of the events described in Section 19 of this
Lease. The Letter of Credit shall commence on November 1, 1996 and shall expire
on October 31, 1997.
Landlord's Tenant's
Initial: Initial:
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Exhibit A
10TH FLOOR
TOTAL RENTABLE AREA: 19,008 sf
<PAGE>
WORK AGREEMENT
--------------
This Work Agreement supplements the Lease dated _____, 1996, executed
concurrently herewith by BISHOP STREET ASSOCIATES, a Hawaii limited partnership,
as "Landlord," and DIGITAL ISLAND, INC., a California corporation, as the
"Tenant," for Suite 1001 (the "Premises") on the tenth (10th) floor of the
Building located at 1132 Bishop Street, Honolulu, Hawaii (the "Building").
1. Construction of Building. Landlord has constructed or will construct the
Building consisting of:
A. The Building shell;
B. The core area including basic mechanical, electrical, plumbing, life
safety, air conditioning and ventilation system therein;
C. Core area toilet rooms including necessary plumbing fixtures, ceramic
tile floors, accessories, ceilings and lighting;
D. Interior dry wall covering all exposed core walls, perimeter columns
and exterior building wall areas except at windows;
E. Air conditioning duct mains;
F. Finished elevator lobbies;
G. Finished hallways on multi-tenant floors; and
H. Parking facilities.
2. Agreement to Complete. Landlord agrees to complete the Premises for Tenant
in accordance with the provisions of this Work Agreement. Tenant agrees to duly
and timely perform all of the acts, and pay all of the consideration, required
of Tenant hereunder, all to the effect that the Premises can be timely completed
as provided in this Work Agreement.
3. Tenant's Space Plan. Landlord agrees to be solely responsible to pay for
the cost of the Final Space Plan, as defined herein, prepared by Landlord's
architect or space planner. The Final Space Plan dated 10/14, 1996 (the
-----
"Final Space Plan") and the Estimate of Probable Cost dated 10/15, 1996, have
-----
been approved by Landlord and Tenant, and copies thereof are attached as Exhibit
"1" and made a part hereof.
4. Landlord's Installation. In completing the Premises, Landlord, at
Landlord's expense, agrees to provide and install the improvements in accordance
with the Final Space Plan, including without limitation the following:
A. Install all building standard wall partitions with sound batting.
EXHIBIT "B"
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<PAGE>
B. Install all building standard doors and hardware.
C. Install building standard light switches, one (1) per each 175 square
feet of usable area.
D. Install building standard duplex receptacle wall outlets, three (3)
per each 150 square feet of usable area.
E. Install building standard telephone wall outlets, one (1) per each 100
square feet of usable area.*
F. Install building standard computer outlets one (1) per each 100 square
feet of usable area.
G. Install building standard air conditioning. Zoning designed by
building engineer.
H. Install building standard 2'x 4' parolouver light fixtures.
I. Install building standard acoustical ceiling tile in all rooms.
J. Install building standard carpeting including building standard 4"
rubber carpet base.
K. Paint all walls with semi-gloss washable paint. Choice limited to 3
colors per suite.
L. In lieu of paint Landlord will prime walls for wall covering. The wall
covering and its installation will be Tenant's expense.
M. One inch metal mini-blinds for all exterior windows.
* Landlord will provide box and stub conduit above the ceiling. Tenant
must provide and install plenum rated cabling for the telephone and
computers.
5. Tenant's Installations. Tenant shall pay for the cost of all installations
which are not shown or described in the attached Final Space Plan and Estimate
of Probable Cost.
6. Landlord's Quote. Landlord shall not be required to approve any change to
the Final Space Plan which would have a material impact or place an undue load
on the structural, mechanical or electrical systems in the Building beyond that
which would be expected for space of the type and kind rented to Tenant, or
which would result in the Premises being not in keeping with the overall
character of the Building, or which will not meet the approval of all applicable
governmental authorities. When and if Landlord approved any change to the Final
Space Plan, Landlord shall concurrently notify Tenant in writing of the price to
Tenant for the quantities (and\or qualities) of items included in such change
which are in excess of Landlord's Standard Installations as described in
paragraph 4 above. Landlord shall not be required to commence work unless Tenant
has approved in writing the cost of the over-standard work to be paid for by
Tenant. Tenant shall pay the agreed amount of Tenant's costs in excess of
Landlord's Standard Installations not later than five (5) days after receipt of
billing therefor.
EXHIBIT "B"
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<PAGE>
7. Schedule of Work All work shall be scheduled by Landlord in coordination
with Tenant and Tenant shall reimburse Landlord for any extra expense incurred
by Landlord by reason of delays caused by Tenant.
8. Time for Completion. Landlord shall not be required to complete Landlord's
Standard Installations in the Premises for Tenant sooner than sixty (60) days
after the later of (i) the delivery to Landlord of Tenant's written approval of
the cost of the over-standard work to be paid by Tenant as described in
paragraph 6 above, or (ii) receipt of approval of the Final Space Plan by all
applicable governmental authorities. If Tenant's written approval of the cost
and said over-standard work is not received by Landlord at least sixty (60) days
prior to the scheduled commencement date specified in Section 1.1.2 of the Basic
Lease Information (the "Commencement Date"), then notwithstanding the fact that
the Premises have not been completed by the Commencement Date, rent shall,
nevertheless, commence to accrue on the Commencement Date.
9. Changes. If Tenant shall timely request any change to the Final Space
Plan, Landlord shall have the right to approve the change in accordance with the
standards set forth in paragraph 6 above. If Landlord approves such change,
Landlord shall promptly give Tenant a written estimate of the maximum cost of
engineering and design services to revise the Final Space Plan in accordance
with such request, the time delay expected because of such request and the extra
cost to Tenant for such change. If Tenant approves such estimate in writing,
Landlord shall have working drawings prepared and proceed to make such change
and Tenant shall promptly reimburse Landlord for the cost thereof. Tenant shall
approve or disapprove such estimate within three (3) business days. In the
absence of such written authorization Landlord shall not be obligated to make
such change and shall continue work on the Premises in accordance with the then
current Final Space Plan. Tenant shall be chargeable with any delay in the
completion of the Premises resulting from any such change, and rent shall
commence to accrue on the Commencement Date whether or not the Premises have
then been completed.
10. Delays. If the completion of Landlord's Standard Installations in the
Premises is delayed by Tenant's failure to comply with any of the foregoing
provisions, or by Tenant's requirement of materials or installations different
from Landlord's Standard Installations, or by changes in the work ordered by
Tenant or by extra work ordered by Tenant, then notwithstanding the delay in
completion of the Premises, the rent shall commence to accrue on the
Commencement Date. Further, if beyond the schedule for completion thereof
because of the unavailability of materials or work specially requested by
Tenant, then rent shall commence on the Commencement Date, notwithstanding that
such work is not completed. Provided, however, Landlord shall notify Tenant of
anticipated delays in delivery of non-standard materials.
11. Data Processing. All data processing and other special electrical
equipment shall be installed only under the supervision of Landlord's electrical
contractor.
12. Substitutions. If plans and specifications for construction of the
Premises shall require Landlord's Standard Installation(s) in mounts which are
in excess of standards to be provided by Landlord as described in Paragraph 4
above, then Tenant shall pay for such additional quantities at Landlord's actual
cost therefore. Landlord may substitute an item of equal quality for any
standard item(s) listed, provided that it is specifically understood and agreed
that if such substitution shall result in a total cost exceeding Landlord's
budget for improvements of the Premises, Tenant shall pay to Landlord the amount
of such additional cost.
13. Energy Conservation. Due to energy conservation requirements, Tenant will
be restricted in the installation and use of lighting in any part of the
Building except as approved by Landlord.
14. Common Areas. It is specifically acknowledged that portions of the
Building and the common areas may not be completed on or prior to the
Commencement Date, without liability of Landlord to Tenant, and without any
abatement or reduction in rent,
EXHIBIT "B"
-----------
Page 3 of 4
<PAGE>
provided that Landlord shall have obtained a temporary certificate of occupancy
for the Premises as well as for the Building, and Landlord's architect/designer
shall have certified that the Premises are substantially complete and Tenant
shall have reasonable access to the Premises.
15. Access. During the thirty (30) day period immediately prior to the
Commencement Date, Tenant shall be afforded reasonable access to the Premises
for the purpose of coordinating the installation of its tenant improvements.
16. Landlord's Representative. During the construction of the Premises all
matters and questions for Landlord shall be referred to The Harris Company who
-------------------
shall act as Landlord's representative.
17. Tenant's Representatives. During the construction of the Premises all
matters and questions for Tenant shall be referred to G. Stephen Elisha who
shall act as Tenant's representative.
DATED:
BISHOP STREET ASSOCIATES
By 1132, Inc.
Its Sole General Partner
By: /s/ Unintelligible
------------------------------
Its President
"Landlord"
DIGITAL ISLAND, INC.,
a California corporation
By: /s/ Brian Higgins
------------------------------
Its CEO
By:
------------------------------
Its
"Tenant"
Landlord's Tenant's
Initial: Initial:
EXHIBIT "B"
-----------
Page 4 of 4
<PAGE>
Notice of Lease Term Dates
------ -- ----- ---- -----
1132 Bishop Street
Honolulu, Hawaii 96813
(808) 599-5009
Telecopier: (808) 599-5211
Gentlemen:
Congratulations on moving into your new suite. We are looking forward to many
years of pleasant and friendly relations.
In order to eliminate any future misunderstanding, we wish to go on record
that the commencement date of the Lease between Bishop Street Associates and you
is_____________ and the termination date is _____________________.
I would appreciate your confirming the foregoing by signing the enclosed copy
of this letter and returning it to the office of the Building at 1132 Bishop
Street, Honolulu, Hawaii 96813.
Sincerely,
BISHOP STREET ASSOCIATES
By 1132, Inc.
Its Sole General Partner
By: /s/ Unintelliglble
----------------------------------
Its Presdident
APPROVED:
----------------------------------,
a _____________________________
BY
---------------------------------
Its
Landlord's Tenant's
Initial: Initial:
EXHIBIT "C"
-----------
<PAGE>
ESTOPPEL CERTIFICATE
TO: ___________________________ and its successors and assigns.
FROM: ___________________________________________________________.
RE: Lease for Suite ___, of the Building located at 1132 Bishop Street,
Honolulu, Hawaii.
The undersigned is the current tenant under that certain Lease
dated , 1996, between Bishop Street Associates, as Landlord; and , as
Tenant, relating to Suite (the "Premises"), in the building located at
1132 Bishop Street, Honolulu, Hawaii (the "Building").
The undersigned has been requested to furnish this Estoppel Certificate in
accordance with Section 14 of the Lease below described.
The undersigned, understanding that the Landlord under the Lease below
described and institutional lenders will materially rely thereon, hereby
represents and warrants the following:
1. Attached hereto is a true copy of the Lease dated ___________ together with
all of the amendments thereto dated _________________ (the "Lease").
2. The Lease amendments set forth in paragraph I above are the only amendments
to the Lease, and the Lease, as amended by said amendments, is otherwise
modified and in full force and effect, and constitutes the only agreement
between the Landlord and the undersigned relating to the Premises.
3. The undersigned is the current Tenant under the Lease.
4. The Premises consists of _______________ square feet of rentable area.
5. The Lease commencement date was ___________, and the Lease termination date
is ________________, with ____________, ______________ year options to renew
or extend at rent.
6. The base rent currently being paid by the undersigned under the Lease is
$__________ per month. All free rent or other concessions to which the
undersigned is entitled under the Lease have been utilized except
_____________________.
7. The percentage rent is (a) _____________ % over a floor of $_____________
in gross sales; (b) none (strike one).
8. Rent is adjusted every _______ year(s) under the Lease for increases in the
consumer price index. There is (is not) a "cap" on such increases. Such cap
is ____________%. The undersigned's share of any consumer price index
adjustments under the Lease has been paid through __________________.
EXHIBIT "D"
-----------
Page 1 of 2
<PAGE>
9. As of the date hereof, the Lease is valid and subsisting and in full force
and effect, and the undersigned has accepted and is presently occupying the
Premises.
10. To the best knowledge of the undersigned, there are no uncured breaches or
defaults on the part of the Landlord under the Lease, and the undersigned has
no knowledge of any event, which with the giving of notice or the passage of
time, or both, would constitute a default thereunder. The undersigned has no
unfulfilled claims or offsets or defenses of any kind under the Lease as of
the date hereof.
11. Rent has been paid through _________________________, 19__. No rent has
been paid in advance.
12. (Intentionally deleted).
13. A security deposit of $_________ has been paid to Landlord under the
Lease.
14. The undersigned is entitled to ______________ parking spaces under the
Lease for the term of the Lease for $ per month. The undersigned is (is not)
entitled to free (validated) parking for its invitees.
15. All improvements required to be placed and completed on the Premises by
the Landlord under the Lease have been so placed and completed and conform to
the Lease requirements except _______________________.
16. The undersigned has no purchase options affecting the Premises or the
Building.
Very truly yours,
______________________________
Landlord's Tenant's
Initial: Initial:
EXHIBIT "D"
-----------
Page 2 of 2
<PAGE>
Exhibit "1"
FLOOR PLAN - 12TH
<PAGE>
ESTIMATE OF PROBABLE COST
Tenant: Digital Island Architect: Architekton Ltd.
Location: First Hawaiian Tower- 10th Floor Date: Oct. 17, 1996
Owner: Bishop Street Associates By: AL
NO ITEM QTY UNIT PRICE TOTAL
====================================================================================================================================
BUILDING STANDARD WORK:
====================================================================================================================================
1 SUPERVISION/GEN REQUIREMENTS 1 LS 809.35 809
----------------------------------------------------------------------------------------------------------------------==============
2 0 LF 0.00 0
----------------------------------------------------------------------------------------------------------------------==============
3 DEMOLITION 1 LS 500.00 500
----------------------------------------------------------------------------------------------------------------------==============
4 INTERIOR PARTITION (no insulation) 6 LF 50.00 300
----------------------------------------------------------------------------------------------------------------------==============
5 GYPSUM BD. FURRING 0 SF 3.00 0
----------------------------------------------------------------------------------------------------------------------==============
6 CORRIDOR DOORS (SC) 0 EA 1,600.00 0
----------------------------------------------------------------------------------------------------------------------==============
7 INTERIOR DOORS (HC) 1 EA 1,000.00 1,00
----------------------------------------------------------------------------------------------------------------------==============
8 POCKET/SLIDING DOOR (HC) 0 EA 800.00 0
----------------------------------------------------------------------------------------------------------------------==============
9 CARPET (anti-static type) 30 SY 300.00 900
----------------------------------------------------------------------------------------------------------------------==============
10 VINYL COMPOSITION TILE (@ Library & Storag 0 SF 4.00 0
----------------------------------------------------------------------------------------------------------------------==============
11 MINI-BLINDS @ PERIMETER WINDOWS 0 EA 200.00 0
----------------------------------------------------------------------------------------------------------------------==============
12 RESILIENT BASE 0 LF 2.00 0
----------------------------------------------------------------------------------------------------------------------==============
13 PAINT 840 SF 1.25 1,050
----------------------------------------------------------------------------------------------------------------------==============
14 SUSPENDED CEILING (patch/repair) 494 SF 0.75 371
----------------------------------------------------------------------------------------------------------------------==============
15 ELECTRICAL (addt'l power, 24 hr. a/c) 494 SF 5.50 2,717
----------------------------------------------------------------------------------------------------------------------==============
16 MECHANICAL (Bldg. Std. A/C) 494 SF 5.00 2,470
----------------------------------------------------------------------------------------------------------------------==============
17 SUBTOTAL 10,117
----------------------------------------------------------------------------------------------------------------------==============
18 CONTRACTORS PROFIT 10% 1,012
----------------------------------------------------------------------------------------------------------------------==============
19 TOTAL BUILDING STANDARD WORK $11,129
====================================================================================================================================
BUILDING NON-STANDARD WORK:
====================================================================================================================================
20 24 HR. A/C (Portable Unit(s)) 1 LS 10,000.00 10,000
----------------------------------------------------------------------------------------------------------------------==============
21 RAISED ACCESS FLOORING (w/steps & railing) 264 SF 33.00 8,712
----------------------------------------------------------------------------------------------------------------------==============
22 INTERIOR GLASS 45 SF 25.00 1,125
----------------------------------------------------------------------------------------------------------------------==============
23 EMERGENCY/BACK-UP POWER HOOK-UP 1 LS 1,100.00 1,100
----------------------------------------------------------------------------------------------------------------------==============
24 0
----------------------------------------------------------------------------------------------------------------------==============
25 0
----------------------------------------------------------------------------------------------------------------------==============
26 0
----------------------------------------------------------------------------------------------------------------------==============
27 0
----------------------------------------------------------------------------------------------------------------------==============
28 0
----------------------------------------------------------------------------------------------------------------------==============
29 0
----------------------------------------------------------------------------------------------------------------------==============
30 0
----------------------------------------------------------------------------------------------------------------------==============
31 SUBTOTAL 20,937
----------------------------------------------------------------------------------------------------------------------==============
29 CONTRACTORS PROFIT 10% 2,094
----------------------------------------------------------------------------------------------------------------------==============
30 TOTAL BUILDING NON-STANDARD WORK $23,031
====================================================================================================================================
31 TOTAL OF PROBABLE CONSTRUCTION COST $34,159
====================================================================================================================================
32 0
----------------------------------------------------------------------------------------------------------------------==============
32 0
----------------------------------------------------------------------------------------------------------------------==============
33 PERMIT/BOWS FEES 560
----------------------------------------------------------------------------------------------------------------------==============
34 GRAND TOTAL $34,719
====================================================================================================================================
NOTE: The actual cost will vary based on the final scope of work and
construction bid(s) received.
<PAGE>
LAND COURT REGULAR SYSTEM
--------------------------------------------------------------------------------
AFTER RECORDATION, RETURN BY MAIL [ ] PICK-UP [ ]
--------------------------------------------------------------------------------
AMENDMENT OF LEASE
------------------
THIS AMENDMENT is made as of the 15th day of November 1996, by
------ -------------
and between BISHOP STREET ASSOCIATES, a Hawaii limited partnership, whose post
office address is 1132 Bishop Street, Suite 1405, Honolulu, Hawaii 96813 (the
"Landlord"), and DIGITAL ISLAND, INC., a California corporation, whose post
office address is 1132 Bishop Street, Suite 1001, Honolulu, Hawaii 96813 (the
"Tenant").
RECITALS:
---------
A. Landlord and Tenant entered into that certain Lease dated ______,
1996 (the "Lease"), for the rental of Suite 1001 of the office building located
at 1132 Bishop Street, Honolulu, Hawaii 96813 (the "Building"), containing
approximately 2,588 rentable square feet (the "Premises").
<PAGE>
B. Landlord and Tenant desire to amend the provisions of the Lease
concerning the Letter of Credit given by Tenant to secure Tenant's performance
of its obligations under the Lease.
AGREEMENT:
---------
NOW, THEREFORE, in consideration of the mutual covenants and
agreements herein contained, and for other good and valuable consideration, the
receipt and sufficiency of which are hereby acknowledged, Landlord and Tenant
hereby agree as follows:
1. The following paragraph is added to the Lease as Paragraph 44:
"44. Letter of Credit.
Upon the execution of this Lease by Landlord and Tenant, Tenant
shall deliver to Landlord a Letter of Credit (i) issued by a bank
authorized to do business in the State of Hawaii, (ii) for the sum of
$63,082.10, and (iii) in such form as shall be reasonably required by
Landlord (the "Letter of Credit"). The Letter of Credit shall provide
that Landlord may draw upon the Letter of Credit upon the occurrence
of any of the events described in Section 19 of this Lease, to satisfy
any amounts owed by Tenant under the terms of this Lease. The Letter
of Credit shall commence on November 1, 1996 and shall expire on
November 1, 2001. In the event that the bank issuing the Letter of
Credit (the "Bank") notifies Landlord that the Bank will not renew the
---
Letter of Credit on its annual expiration date and thus the Letter of
Credit will expire prior to November 1,2001, such occurrence shall be
deemed a default under this Lease. Upon Landlord's receipt of such
notice, Landlord shall be entitled to pursue any and all remedies
provided to Landlord under Section 20 of this Lease. In addition to
--------
such remedies, Landlord may draw down the remaining balance of the
Letter of Credit as liquidated damages for Tenant's default under this
Lease. Landlord and Tenant hereby acknowledge that they understand and
have agreed that in such event, the injury or damages to Landlord will
be difficult and/or expensive to determine in view of: Landlord's
financial commitments with respect to the Building, the difficulty in
obtaining a new tenant for the Premises and the nature of the rental
market for commercial space in Honolulu, Hawaii. AS A REASONABLE
ESTIMATE OF LANDLORD'S FAIR COMPENSATION FOR ANY INJURY OR DAMAGES
RESULTING FROM SUCH DEFAULT, THE PARTIES AGREE THAT THE SUMS TO BE
DRAWN UNDER THE LETTER OF CREDIT SHALL BELONG TO LANDLORD AS
LIQUIDATED DAMAGES. Landlord may, in addition to the aforesaid
damages, pursue any other remedy, including specific performance,
permitted by law or equity. All costs, including reasonable attorneys'
fees, incurred by reason of Tenant's default shall be borne by Tenant,
regardless of whether or not a lawsuit is filed."
-2-
<PAGE>
2. No Defenses. Tenant hereby agrees and acknowledges that Tenant
-----------
has no claims, offsets, deductions or defenses against its payment of sums due
under the Lease, or against the performance of its obligations under the Lease.
Tenant further agrees that Landlord is not currently in default of any of its
obligations under the Lease.
3. Gender. Landlord and Tenant agree that in interpreting this
------
instrument, the use of any gender shall be construed to include all genders, and
the use of any number shall be construed as singular or plural, as the
circumstances may require. The terms "Landlord" and "Tenant", together with any
pronouns used in lieu thereof, refer to the singular or plural, as the case may
be.
4. Successors and Assigns. The covenants made by Landlord and/or
----------------------
Tenant, and all rights and benefits conferred hereunder upon Landlord and/or
Tenant, shall be binding upon and inure to the benefit of Landlord and/or Tenant
and their respective legal representatives, successors in trust, successors and
assigns.
5. Governing Law. This instrument shall be governed by, and
-------------
construed in accordance with, the laws of the State of Hawaii.
6. Attorneys' Fees and Costs. If any party hereto commences an
-------------------------
action or arbitration proceeding to interpret or enforce this Amendment, or any
provision hereof, the prevailing party shall be entitled to an award of costs
and attorneys' fees in addition to all other amounts awarded by the court or
arbitrator. Tenant also agrees to pay all costs and reasonable attorneys' fees
which may be incurred or paid by Landlord in enforcing without litigation any of
the covenants contained hereunder.
7. In all other respects the Lease shall remain unamended and in
full force and effect.
-3-
<PAGE>
IN WITNESS WHEREOF, the Landlord and Tenant have executed this
instrument as of the day and year first above written.
LANDLORD: BISHOP STREET ASSOCIATES,
-------- a Hawaii limited partnership
By 1132, Inc.,
a Hawaii corporation
Its Sole General Partner
By /s/ S. Steven Sofos
--------------------------------
S. Steven Sofos
Its President
TENANT: DIGITAL ISLAND, INC.,
------ a California corporation
By /s/ Ron Higgins
--------------------------------
Its CEO
By
--------------------------------
Its
-4-
<PAGE>
SECOND AMENDMENT OF LEASE
-------------------------
THIS SECOND AMENDMENT OF LEASE ("Amendment") is made as of April 14
-------------- --------
, 1997, by and between BSOT HOLDINGS, LLC, a Delaware limited liability company,
whose post office address is 1132 Bishop Street, Suite 1405, Honolulu, Hawaii
96813 (the "Landlord"), and DIGITAL ISLAND, INC., a California corporation,
----------
whose post office address is 1132 Bishop Street, Suite 1001, Honolulu, Hawaii
96813 (the "Tenant" ).
--------
Recitals:
---------
(a) Bishop Street Associates, a Hawaii limited partnership, and Tenant
entered into that certain Lease dated October 21, 1996, for the rental of Suite
1001 of the office building located at 1132 Bishop Street, Honolulu, Hawaii
96813 (the "Building"), containing approximately 2,588 rentable square feet (the
----------
"Existing Premises"), as amended by an Amendment of Lease dated November 15,
-------------------
1996 (the "Lease").
(b) Landlord has acquired the Building and is now the landlord under
the Lease.
(c) Landlord and Tenant desire to amend the Lease to increase the area
of the Existing Premises.
Agreements:
----------
NOW, THEREFORE, in consideration of the mutual covenants and
agreements herein contained, and for other good and valuable consideration, the
receipt and sufficiency of which are hereby acknowledged, Landlord and Tenant
hereby agree as follows:
1. The Premises as shown on Exhibit A attached to the Lease shall
include not only the area outlined by a heavy dark line and identified as "Suite
1001" but also the area out-lined by a heavy dark line and identified as "Vacant
706rsf".
2. Section 1.1.1 Of the Lease is amended in its entirety to read as
follows:
1.1.1 Premises (Section 1.1): Suite 1001 on floor ten (10) of the
Building, consisting of approximately 3,294 rentable square feet
and approximately 2,889 usable square feet.
<PAGE>
3. Section 1.1.3 of the Lease is amended in its entirety to read as
follows:
1.1.3 Base Rent (Section 3.1): In the following amounts:
Period Rate Total Amount
------ ---- ------------
11/01/96 $0.00 0.00 per month
through
04/14/97
04/15/97 $1.00 per $706.00 per month
through rentable
04/30/97 square foot
per month
05/01/97 $1.00 per $3,294.00 per
through rentable month
11/05/01 square foot
per month
4. Section 1.1.6 of the Lease is amended in its entirety to read as
follows:
1.1.6 Tenant's Percentage Share (Section 4.1): 0.732%, which was
computed by dividing the rentable area of the Premises described
in Section 1.1.1 by the rentable area of the Building.
5. The security deposit under Section 1.1.7 of the Lease shall
remain unchanged at $5,256.84, notwithstanding the increase in the area of the
Premises and in the amount of the Base Rent as provided in this Amendment. The
security deposit may be subject to change in the future as otherwise provided in
the Lease.
6. Landlord shall create an opening between the areas identified on
Exhibit A attached to the Lease as "Suite 1001" and "Vacant 706rsf". The opening
does not include the installation of a door. Landlord's obligation to create the
opening is subject to and upon the terms of the Work Agreement attached to the
Lease as Exhibit B.
7. Lease in Full Force and Effect. Landlord and Tenant hereby
------------------------------
confirm and agree that all of the terms of the Lease remain in full force and
effect, as amended hereby.
2
<PAGE>
8. Miscellaneous
-------------
8.1 Definitions. Capitalized terms not other-wise defined in this
-----------
Amendment have the meanings given to them in the Lease.
8.2 No Defenses. Tenant hereby agrees and acknowledges that Tenant has
-----------
no claims, offsets, deductions or defenses against its payment of sums due under
the Lease, or against the performance of its obligations under the Lease. Tenant
further agrees that Landlord is not currently in default of any of its
obligations under the Lease.
8.3 Gender. Landlord and Tenant agree that in interpreting this
------
Amendment, the use of any gender shall be construed to include all genders, and
the use of any number shall be construed as singular or plural, as the
circumstances may require. The terms "Landlord" and "Tenant", together with any
pronouns used in lieu thereof, refer to the singular or plural, as the case may
be.
8.4 Successors and Assigns. The covenants made by Landlord and/or
----------------------
Tenant, and all rights and benefits conferred hereunder upon Landlord and/or
Tenant, shall be binding upon and inure to the benefit of Landlord and/or Tenant
and their respective legal representatives, successors in trust, successors and
assigns.
8.5 Governing Law. This Amendment shall be governed by, and construed
-------------
in accordance with, the laws of the State of Hawaii.
8.6 Attorneys' Fees and Costs. If any party hereto commences an action
-------------------------
or arbitration proceeding to interpret or enforce this Amendment, or any
provision hereof, the prevailing party shall be entitled to an award of costs
and attorneys' fees in addition to all other amounts awarded by the court or
arbitrator. Tenant also agrees to pay all costs and reasonable attorneys' fees
which may be incurred or paid by Landlord in enforcing without litigation any of
the covenants contained hereunder.
IN WITNESS WHEREOF, the Landlord and Tenant have ex-
3
<PAGE>
ecuted this Amendment as of the day and year first above written.
BSOT HOLDINGS, LLC, DIGITAL ISLAND, INC.,
a Delaware limited liability a California corporation
company
By BSOT, Inc., By /s/ Ron Higgins
a California corporation ---------------------------------
Its Manager Its
By /s/ Nicholas Lock By CEO
-------------------------- ---------------------------------
Nicholas Lock Its
Its Vice President
Landlord Tenant
4
<PAGE>
FLOOR PLAN
THE FIRST HAWAIIAN TOWER