AIRPORT TRADE CENTER
550 PAIEA STREET, HONOLULU, HAWAII 96819
-------------------------------
REVISED STANDARD LEASE
-------------------------------
TENANT: NATIONAL TELEPHONE & COMMUNICATIONS, INC.
PREMISES: L-1 AND L-2
PREMISES TYPE: FIRST FLOOR RETAIL
DATE: NOVEMBER 20, 1996
AIRPORT TRADE CENTER
TABLE OF CONTENTS
ARTICLE 1 - SPECIAL PROVISIONS AND EXHIBITS . . . . . . . . . . . . . . . . . 1
1.01 SPECIFIC PROVISIONS. . . . . . . . . . . . . . . . . . . . . . . . . . . 1
1.02 EXHIBITS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
1.03 [INTENTIONALLY OMITTED]. . . . . . . . . . . . . . . . . . . . . . . . . 2
ARTICLE 2 - DEFINITIONS . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
2.01 BUILDING . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
2.02 BUILDING AREAS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
2.03 COMMON AREAS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
2.04 IMPROVEMENTS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
2.05 LAND . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
2.06 LEASE MONTH. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
2.07 NET RENTABLE AREA. . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
2.08 NET USABLE AREA. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
2.09 OPERATING EXPENSES . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
2.10 OPERATING EXPENSE PAYMENT. . . . . . . . . . . . . . . . . . . . . . . . 4
2.11 PROJECT. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
2.12 PREMISES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
2.13 PREMISES TYPE. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
2.14 RULES AND REGULATIONS. . . . . . . . . . . . . . . . . . . . . . . . . . 4
2.15 TENANT'S EMPLOYEES AND LANDLORD'S EMPLOYEES. . . . . . . . . . . . . . . 4
2.16 TENANT'S PROPORTIONATE SHARE . . . . . . . . . . . . . . . . . . . . . . 4
2.17 TERM . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
ARTICLE 3 - RENT, SECURITY DEPOSIT AND OTHER TENANT CHARGES . . . . . . . . . 4
3.01 BASE RENT. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
3.02 OPERATING EXPENSE PAYMENT. . . . . . . . . . . . . . . . . . . . . . . . 4
3.03 REIMBURSEMENT FOR REPAIRS. . . . . . . . . . . . . . . . . . . . . . . . 5
3.04 LATE PAYMENT CHARGES . . . . . . . . . . . . . . . . . . . . . . . . . . 5
3.05 TAX ON RENT AND OTHER PAYMENTS . . . . . . . . . . . . . . . . . . . . . 5
3.06 CONVEYANCE TAX . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
3.07 TAXES ON TENANT'S BUSINESS AND PERSONAL PROPERTY . . . . . . . . . . . . 6
3.08 SECURITY DEPOSIT . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
3.09 CHARGE FOR PROVIDING ELECTRICAL POWER AND EXTRAORDINARY PROPERTY AND
SERVICES. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
3.10 APPARATUS REQUIRING EXCESSIVE UTILITIES USAGE. . . . . . . . . . . . . . 7
3.11 LANDLORD'S RIGHT TO MAKE TENANT'S REPAIRS. . . . . . . . . . . . . . . . 6
3.12 OPTION TO PERFORM LEASE COVENANTS. . . . . . . . . . . . . . . . . . . . 7
3.13 INTEREST . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
3.14 TENANT'S COST. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
3.15 CASHIER'S OR CERTIFIED CHECKS. . . . . . . . . . . . . . . . . . . . . . 7
3.16 ADDITIONAL RENT. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
ARTICLE 4 - CONDITION, USE AND OCCUPANCY OF PREMISES. . . . . . . . . . . . . 7
4.01 TENANT'S INSPECTION AND ACCEPTANCE OF THE PREMISES . . . . . . . . . . . 7
4.02 PERMITTED USE OF PREMISES. . . . . . . . . . . . . . . . . . . . . . . . 8
4.03 LEGAL COMPLIANCE . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
4.04 PROHIBITED USE OF PREMISES . . . . . . . . . . . . . . . . . . . . . . . 8
4.05 RULES AND REGULATIONS. . . . . . . . . . . . . . . . . . . . . . . . . . 8
4.06 PARKING AND AUTOMOBILES. . . . . . . . . . . . . . . . . . . . . . . . . 9
4.07 COMMON AREAS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
4.08 ADVERTISING. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
4.09 CARE OF PREMISES . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
4.10 SECURITY . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
4.11 [INTENTIONALLY OMITTED]. . . . . . . . . . . . . . . . . . . . . . . . . 10
4.12 QUIET ENJOYMENT. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
4.13 INSPECTION OF PREMISES . . . . . . . . . . . . . . . . . . . . . . . . . 10
4.14 [INTENTIONALLY OMITTED]. . . . . . . . . . . . . . . . . . . . . . . . . 10
4.15 CHANGE OF BUILDING NAME. . . . . . . . . . . . . . . . . . . . . . . . . 10
4.16 [INTENTIONALLY OMMITED]. . . . . . . . . . . . . . . . . . . . . . . . . 10
4.17 [INTENTIONALLY OMITTED]. . . . . . . . . . . . . . . . . . . . . . . . . 10
4.18 OTHER TENANTS. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
4.19 NO SIGNS ON STATE PROPERTY . . . . . . . . . . . . . . . . . . . . . . . 10
4.20 CONDUCT OF TENANT'S EMPLOYEES. . . . . . . . . . . . . . . . . . . . . . 10
4.21 CONSUMPTION OF ALCOHOLIC BEVERAGES . . . . . . . . . . . . . . . . . . . 10
4.22 SMOKING AND EATING IN COMMON AREAS . . . . . . . . . . . . . . . . . . . 10
ARTICLE 5 - SERVICES PROVIDED BY LANDLORD . . . . . . . . . . . . . . . . . . 11
5.01 STANDARD SERVICES. . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
5.02 LIMITATION ON LIABILITY. . . . . . . . . . . . . . . . . . . . . . . . . 11
5.03 SERVICE CONTRACTS. . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
-i-
ARTICLE 6 - TENANT IMPROVEMENTS, ALTERATIONS, REPAIRS AND RENOVATIONS . . . . 11
6.01 CONSENT REQUIRED . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
6.02 LIEN PROTECTION. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
6.03 OWNERSHIP. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
6.04 LEGALLY REQUIRED . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
6.05 REPAIRS BY TENANT. . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
6.06 IMPROVEMENT OF THE PREMISES. . . . . . . . . . . . . . . . . . . . . . . 12
ARTICLE 7 - IMPROVEMENTS AND REPAIRS BY LANDLORD. . . . . . . . . . . . . . . 12
7.01 ALTERATIONS, ADDITIONS OR CAPITAL IMPROVEMENTS BY LANDLORD . . . . . . . 12
7.02 REPAIR OF STRUCTURAL ELEMENTS. . . . . . . . . . . . . . . . . . . . . . 12
7.03 REPLACEMENT OF CEILING, ETC. . . . . . . . . . . . . . . . . . . . . . . 13
7.04 IMPROVEMENTS TO THE PREMISES . . . . . . . . . . . . . . . . . . . . . . 13
ARTICLE 8 - TENANT ASSIGNMENT, SUBLETTING AND MORTGAGING. . . . . . . . . . . 13
8.01 CONSENT REQUIRED . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
8.02 ADDITIONAL CONDITIONS TO ASSIGNMENT OR SUBLEASE. . . . . . . . . . . . . 13
8.03 MORTGAGE . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
8.04 CHANGE OF CONTROL. . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
ARTICLE 9 - SUBORDINATION, ATTORNMENT AND MORTGAGE REQUIREMENTS . . . . . . . 14
9.01 SUBORDINATION. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
9.02 REQUIREMENTS OF LANDLORD'S MORTGAGEE AND GROUND LESSOR . . . . . . . . . 14
9.03 ESTOPPEL CERTIFICATES. . . . . . . . . . . . . . . . . . . . . . . . . . 15
9.04 LEASE AMENDMENT, FINANCIAL INFORMATION . . . . . . . . . . . . . . . . . 15
ARTICLE 10 - SALE OF LANDLORD'S INTEREST. . . . . . . . . . . . . . . . . . . 15
10.01 SALE OF LANDLORD'S INTEREST . . . . . . . . . . . . . . . . . . . . . . 15
10.02 TENANT ATTORNMENT . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
10.03 SALE OR ASSIGNMENT BY LANDLORD. . . . . . . . . . . . . . . . . . . . . 15
ARTICLE 11 - INDEMNITY AND RISK OF INJURY, LOSS AND DAMAGE. . . . . . . . . . 15
11.01 INDEMNITY . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
11.02 NON-LIABILITY OF LANDLORD . . . . . . . . . . . . . . . . . . . . . . . 16
ARTICLE 12 - INSURANCE. . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
12.01 PUBLIC LIABILITY AND PROPERTY DAMAGE. . . . . . . . . . . . . . . . . . 16
12.02 INSURANCE ON PERSONAL PROPERTY, IMPROVEMENTS AND BUSINESS
INTERRUPTION. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
12.03 NOTICE TO LANDLORD. . . . . . . . . . . . . . . . . . . . . . . . . . . 17
12.04 RECIPROCAL WAIVERS OF SUBROGATION . . . . . . . . . . . . . . . . . . . 17
12.05 OTHER PROVISIONS. . . . . . . . . . . . . . . . . . . . . . . . . . . . 17
12.06 BLANKET INSURANCE . . . . . . . . . . . . . . . . . . . . . . . . . . . 17
ARTICLE 13 - DAMAGE AND RESTORATION . . . . . . . . . . . . . . . . . . . . . 17
13.01 REPAIRS BY LANDLORD . . . . . . . . . . . . . . . . . . . . . . . . . . 17
13.02 CONTINUATION OF BUSINESS. . . . . . . . . . . . . . . . . . . . . . . . 18
13.03 REPAIRS BY TENANT . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
13.04 ABATEMENT OF RENT . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
ARTICLE 14 - CONDEMNATION . . . . . . . . . . . . . . . . . . . . . . . . . . 18
14.01 TERMINATION OF LEASE AS TO PORTION TAKEN. . . . . . . . . . . . . . . . 18
14.02 LANDLORD'S OPTION TO TERMINATE. . . . . . . . . . . . . . . . . . . . . 18
14.03 TENANT'S OPINION TO TERMINATE . . . . . . . . . . . . . . . . . . . . . 18
14.04 REDUCTION OF RENT . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
14.05 RIGHT TO COMPENSATION . . . . . . . . . . . . . . . . . . . . . . . . . 18
14.06 TAKING FOR A LIMITED PERIOD . . . . . . . . . . . . . . . . . . . . . . 19
ARTICLE 15 - DEFAULT BY TENANT. . . . . . . . . . . . . . . . . . . . . . . . 19
15.01 DEFINITION OF DEFAULT . . . . . . . . . . . . . . . . . . . . . . . . . 19
15.02 LANDLORD'S REMEDIES . . . . . . . . . . . . . . . . . . . . . . . . . . 20
15.03 REMEDIES ARE CUMULATIVE . . . . . . . . . . . . . . . . . . . . . . . . 21
ARTICLE 16 - TERMINATION. . . . . . . . . . . . . . . . . . . . . . . . . . . 21
16.01 SURRENDER OF THE PREMISES . . . . . . . . . . . . . . . . . . . . . . . 21
16.02 HOLDING OVER. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21
ARTICLE 17 - GROUND LEASE . . . . . . . . . . . . . . . . . . . . . . . . . . 21
17.01 GROUND LEASE. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22
ARTICLE 18 - LANDLORD'S LIABILITY . . . . . . . . . . . . . . . . . . . . . . 22
18.01 LANDLORD'S FAILURE TO PERFORM . . . . . . . . . . . . . . . . . . . . . 22
18.02 NOTICE TO LANDLORD'S MORTGAGEES . . . . . . . . . . . . . . . . . . . . 22
18.03 LIMITATION ON LIABILITY OF LANDLORD AND MORTGAGEE . . . . . . . . . . . 22
ARTICLE 19 - MISCELLANEOUS. . . . . . . . . . . . . . . . . . . . . . . . . . 22
19.01 NO LIGHT, VIEW OR AIR EASEMENT. . . . . . . . . . . . . . . . . . . . . 22
-ii-
19.02 TIME OF ESSENCE . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22
19.03 BROKERAGE COMMISSIONS . . . . . . . . . . . . . . . . . . . . . . . . . 22
19.04 EXECUTION BY LANDLORD . . . . . . . . . . . . . . . . . . . . . . . . . 22
19.05 RENEWAL . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22
19.06 COST AND ATTORNEY'S FEES. . . . . . . . . . . . . . . . . . . . . . . . 23
19.07 LANDLORD'S CONSENT. . . . . . . . . . . . . . . . . . . . . . . . . . . 23
19.08 NOTICE. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23
19.09 SEVERABILITY. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23
19.10 WAIVER. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23
19.11 SUCCESSORS. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23
19.12 JOINT AND SEVERAL OBLIGATIONS . . . . . . . . . . . . . . . . . . . . . 24
19.13 CHOICE OF LAW . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24
19.14 ARTICLE AND SECTION HEADINGS. . . . . . . . . . . . . . . . . . . . . . 24
19.15 SHORT-FORM LEASE. . . . . . . . . . . . . . . . . . . . . . . . . . . . 24
19.16 FORCE MAJEURE . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24
19.17 HAZARDOUS MATERIALS . . . . . . . . . . . . . . . . . . . . . . . . . . 24
19.18 PERIODIC FINANCIAL STATEMENTS TO LANDLORD . . . . . . . . . . . . . . . 27
19.19 ACKNOWLEDGMENT OF WAVIER OF JURY TRIAL. . . . . . . . . . . . . . . . . 27
19.20 ENTIRE AGREEMENT. . . . . . . . . . . . . . . . . . . . . . . . . . . . 27
-iii-
AIRPORT TRADE CENTER
550 PAIEA STREET, HONOLULU, HAWAII
REVISED STANDARD LEASE
THIS LEASE is made as of November 20, 1996, by and between PAIEA
PROPERTIES, a Hawaii limited partnership ("Landlord"), whose principal place of
business and post office address is 550 Paiea Street, Suite 102, Honolulu,
Hawaii 96819 and NATIONAL TELEPHONE & COMMUNICATIONS, INC., a Nevada corporation
("Tenant"), whose principal place of business is 2801 Main Street, Irvine,
California 92714.
WITNESSETH:
Landlord leases to Tenant, and Tenant leases from Landlord, the Premises
described below, located in the Project now known as "Airport Trade Center", for
the Term and subject to and upon consideration of the terms, duties,
obligations, covenants, conditions, rules and regulations, and special
conditions set forth in this Lease.
ARTICLE 1
SPECIAL PROVISIONS AND EXHIBITS
1.01 SPECIFIC PROVISIONS. The following constitute specific
provisions of this Lease:
(a) Premises: AIRPORT TRADE CENTER as shown on Exhibit A
attached, to include area "L-1 and L-2", the exact size of which shall be
measured by Landlord's architect in accordance with BOMA standards following
construction of all demising walls.
Net Usable Area [approximate]:
Retail - L-1.................... 7,912 Sq.Ft.
Retail - L-2.................... 695 Sq.Ft.
Total...................... 8,607 Sq.Ft.
Premises Type:.................. FIRST FLOOR RETAIL
(b) Net Rentable Area [approximate]:
Retail - L-1.................... 9,110 Sq.Ft.
Retail - L-2.................... 800 Sq.Ft.
Total...................... 9,910 Sq.Ft.
(c) Term:........................... 120 Lease Months.
Commencement Date:.............. The earlier to occur of (i) February
1, 1997, or (ii) the date upon which Tenant substantially completes its
improvements and takes occupancy of the Premises.
Termination Date:............... 120 Lease Months following the
Commencement Date.
(d) Initial Monthly Operating
Expense Payment Estimate:....... $3,765.80
(e) Security Deposit:............... $36,697.68
(f) Use:............................ General offices, meeting
facilities, retail sales of support collateral materials exclusive to Tenant's
business operations and other lawful uses pertaining to Tenant's business
subject to the prior written approval of Landlord.
Maximum Occupancy:.............. As determined by the City and
County of Honolulu fire and building codes.
(g) Number of unassigned parking spaces:. 50; see Exhibit E for
additional parking requirements of Tenant for restricted time period use.
Initial monthly fee per space subject to adjustment per Exhibit C
(Rules and Regulations):
Unassigned $60.00 Tandem $90.00 Reserved $85.00
-1-
(h) [Intentionally Omitted]
1.02 EXHIBITS. The following are attached as Exhibits and by this
reference incorporated in the Lease:
Exhibit A: Location of Premises and Floor Plan
Exhibit B: Land Description
Exhibit C: Rules and Regulations
Exhibit D: Base Rent and Summary of First Payment
Exhibit E: Special Conditions
Exhibit F: Improvement Specifications and Construction Plans-
By Tenant
By Landlord
Exhibit G: Allocations of Operating Expenses and Tenant's
Proportionate Share
Exhibit H: Location of Parking Area
1.03 [Intentionally Omitted]
ARTICLE 2
DEFINITIONS
Unless the context otherwise specifies or requires, the following
terms shall have the meanings hereinafter specified:
2.01 "BUILDING" shall mean the present building located upon the Land.
2.02 "BUILDING AREAS" shall mean the areas identified on Exhibit A as
Building Area 1, Building Area 2, Roof Top Area and Open Area, and shall at all
times include that Area of the Building which contains the Premises.
2.03 "COMMON AREAS" shall mean those portions of and facilities in the
Building and the Project designated by Landlord for the nonexclusive use of
Tenant in common with other authorized users, subject to the Rules and
Regulations Landlord shall promulgate.
2.04 "IMPROVEMENTS" shall include all improvements existing at the
commencement of the Term or at any time thereafter built, installed or finished
by anyone in the Premises, including, without limitation, all walls and
partitions which are not load-bearing; the interior decorated or finished
surfaces of all perimeter and load-bearing walls and floors; all ceilings and
ceiling light fixtures (including those furnished by Landlord); all interior
windows, entrance doors, mechanical and electrical conduits, wiring fixtures and
equipment; all floor tile, carpeting and wall coverings; all ceiling sprinkler
systems, air-conditioning equipment, other fixtures of all kinds; and water,
electric, telephone and other utility lines, ducts, conduits and facilities
serving other portions of the Building which may pass through the Premises.
2.05 "LAND" shall mean the real property described in Exhibit B,
subject to reduction in area as provided in Section 7.01.
2.06 "LEASE MONTH" shall mean a full calendar month. The number of
Lease Months comprising the term is specified in Section 1.01 (c). The first
Lease Month shall begin on the Commencement Date set forth in Section 1.01 (c)
if such date is the first day of the calendar month. If such Commencement Date
shall not fall on the first day of a calendar month, the first Lease Month shall
begin on the first day of the calendar month immediately following the month in
which commencement occurs. In any event, Tenant shall be liable for Base Rent,
any other payments required and performance of all other obligations of Tenant
under this Lease from the Commencement Date. "Lease Year" shall mean twelve
(12) full Lease Months, beginning the first Lease Month under this Lease.
2.07 "NET RENTABLE AREA" shall mean the Net Usable Area of the
Premises plus Tenant's pro rata share of the Building and Project common areas
calculated in accordance with Exhibit G.
2.08 "NET USABLE AREA"" shall mean:
(a) For Building Area 1:
(i) In the case of a Tenant leasing a full floor, the area
measured from the finished inside surface of the outer Building wall, or from
the inside surface of the Building glass line if more than fifty percent (50%)
of the Building wall is glass, to the inside surface of the opposite Building
wall, or glass line, specifically including the area of the restrooms, and
electrical, mechanical and
-2-
janitorial rooms but less the area (measured from the midpoint of the enclosing
walls) of all elevator shafts and stairs located on such floor. No deductions
shall be made for columns and projections necessary to the Building.
(ii) In the case of a Tenant leasing less than a full floor, the
area measured from the finished inside surface of the outer Building wall, or
from the inside surface of the Building glass line if more than fifty percent
(50%) of the Building wall is glass, to the mid-point of partitions that
separate the Premises from adjoining premises not leased by Tenant and to the
finished inside surface of partitions that separate the Premises from the
corridors, and to the inside finished surface of other permanent walls. All
measurements to the inside of corridor walls shall be to the general line of the
corridor wall, as shown on Exhibit A, without reduction for recessed Tenant
entry areas. No deductions shall be made for columns and projections necessary
to the Building.
(b) For Building Area 2: [Intentionally Omitted]
(c) For Roof Top and Open Area Premises: [Intentionally Omitted]
2.09 "OPERATING EXPENSES" shall mean all expenses which shall be
incurred, accrued or paid due to the ownership, operation, maintenance or repair
of the Project including the Common Areas. Without in any way limiting the
generality of the foregoing, such expenses shall include the wages, salaries and
payroll burden of employees; Project administration costs and property
management fees; janitorial, maintenance, guard and other services; electricity,
water, waste disposal and other utilities for the Project, including the Common
Areas; materials and supplies (including janitorial); maintenance and repairs to
all equipment and all interior and exterior (including roofing and structural
members) areas of the Project; cleaning and replacement of all carpets and other
floor coverings; pest control costs; all interior and exterior painting;
replacement of light bulbs and fluorescent tubes, and lighting fixtures; all
interior and exterior window cleaning; all costs of utilities, labor, material
and supplies for the operation, repair, maintenance, renovation and replacement
of the air conditioning equipment and system, which may include costs otherwise
considered as capital costs or capital improvements; paving, sealing and
stripping the parking and driveway areas; all insurance, including liability,
worker's compensation, Temporary Disability, fire and casualty, and business
(rental) interruption; any additions to or modifications of the Building or
Project required by governmental authority or Landlord's insurance carrier; the
cost of guest parking spaces at the rate Landlord is charging tenants for
comparable parking spaces; all costs of exterior lighting; cost, deprecation or
rental of tools and equipment; accounting, legal and other professional fees and
costs; costs of landscaping the Project and maintenance thereof; the fair rental
value of areas used in the operation, management, leasing and maintenance of the
Project; all taxes, assessments and other charges by governmental authorities,
present or future, excluding income taxes and any taxes already recovered under
other provisions of this Lease but specifically including real property taxes
and any substitute charges; depreciation or amortization (with interest) on
capital improvements made to reduce operating or energy expenses or required by
present or future governmental regulation, over the shorter of their useful life
or the remaining useful life of the Project and at the interest rate provided in
Section 3.13; and the amount of any increase in the lease rent and other charges
payable under the Ground Lease described in Article 17 after March 15, 1994.
The Operating Expenses shall not include capital expenditures (except the costs
of capital improvements mentioned above), depreciation of improvements in the
Project, interest on any indebtedness related to the Project or any expenses
specifically charged to particular tenants or reimbursed by insurance.
Notwithstanding the foregoing to the contrary, Operating Expenses shall
specifically excluded the following:
a. The cost (inclusive of legal and other professional fees) of
negotiating leases, collecting rents, evicting tenants or costs incurred to
enforce the provisions of any lease;
b. Repairs, general maintenance, legal fees or professional fees
paid by proceeds from any tenant or subject to reimbursement by other third
parties;
c. Inheritance or estate taxes imposed upon or assessed against the
interest of any person in the Building or any part thereof or interest therein
and taxes computed upon the basis of the net income of the owners of the
Building or any part thereof or interest therein;
d. The cost of providing tenant improvements to any tenant of the
Building or Project;
e. Franchise or transfer taxes imposed upon or assessed against the
Building or Project for a change of ownership of any interest therein (except
the conveyance of the leasehold interest under the Lease to Tenant); and
f. Any compensation or expense whatsoever paid to any real estate
broker, salesperson or agent in connection with the leasing or sale of the
Building or Project.
2.10 "OPERATING EXPENSE PAYMENT" shall mean the portion of the
Operating Expenses which is payable by Tenant as provided in Article 3
hereinbelow.
-3-
2.11 "PROJECT" shall mean the Land and all Improvements located
thereon, including without limitation, the Building, parking facilities and
Common Areas commonly referred to as 550 Paiea Street.
2.12 "PREMISES" shall mean the space leased hereunder and all
Improvements therein. The space leased shall consist of the area highlighted or
otherwise marked on Exhibit A.
2.13 "PREMISES TYPE" shall mean the type of use for which the Premises
are maintained and leased to Tenant as indicated in Section 1.01 (a). The
Project has six (6) different Premises Types: Retail, Office, Lower Floor Flex,
Highcube Warehouse, Roof Top and Open Area. The use to be made of the Premises
by Tenant is restricted by Section 1.01 (f).
The Retail, Office and Lower Floor Flex premises are located in
Building Area 1, the Highcube Warehouse premises are located in Building Area
2, the Roof Top is located on the top of the Building, and the Open Area
premises includes any portion of the unbuilt ground surface area outside the
Building leased to a tenant.
2.14 "RULES AND REGULATIONS" shall be those established by Landlord
from time-to-time as provided in this Lease. The initial Rules and Regulations
are attached as Exhibit C.
2.15 "TENANT'S EMPLOYEES" shall mean, collectively, Tenant's
directors, officers, partners, trustees, employees, agents, licensees,
contractors and invitees. "LANDLORD'S EMPLOYEES" shall mean, collectively,
Landlord's directors, officers, partners, trustees, employees, agents,
licensees, contractors and invitees.
2.16 "TENANT'S PROPORTIONATE SHARE" shall mean Tenant's share of
Operating Expenses which benefit the Premises, calculated in accordance with
Exhibit G. If for any reason Tenant's Net Rentable Area or the Net Rentable Area
of the Project shall change or be corrected, both as reasonably determined by
Landlord, Tenant's Proportionate Share shall be adjusted accordingly. Tenant
agrees that all allocations to tenants by Landlord of Operating Expenses based
on the same general concepts as were used in Exhibit G shall be final and not
subject to dispute by Tenant. The initial allocation of Operating Expenses to
the various portions of the Project is set forth in Exhibit G.
2.17 "TERM" shall mean the period set forth in Section 1.01 (c),
beginning on the Commencement Date and ending upon the expiration of the last
Lease Month, unless sooner terminated as provided in this Lease.
ARTICLE 3
RENT, SECURITY DEPOSIT AND OTHER TENANT CHARGES
3.01 BASE RENT. Tenant shall pay to Landlord on the first day of each
month, in advance and without the necessity of notice to Tenant by Landlord,
throughout the Term, the amount specified in Exhibit D as "Base Rent" for the
Premises, in United States currency, over and above all other charges herein
described and without any set-off or counterclaim. Base Rent payable for any
period less than a full calendar month shall be a pro rata share of that payable
for the full calendar month as reasonably calculated by Landlord.
3.02 OPERATING EXPENSE PAYMENT.
(a) OPERATING EXPENSE PAYMENT. In addition to Base Rent, Tenant
shall pay, as additional rent, a share of Operating Expenses on the first day of
each month, in advance and without the necessity of notice to Tenant by
Landlord, throughout the Term. The estimated initial monthly Operating Expense
Payment is specified in Section 1.01 (d). The intent of such Operating Expense
Payment is to create a true net lease whereby tenants are responsible for the
payment of all Operating Expenses according to their proportionate share, so
that the amount retained by Landlord from total receipts, after payment of all
expenses of the Project, is the total of all tenant base rents.
(b) BASIS FOR DETERMINING OPERATING EXPENSE PAYMENT. The
Operating Expense Payment shall be the dollar amount obtained by (i) multiplying
Tenant's Proportionate Share by (ii) Landlord's estimate of Operating Expenses
for each period January I to December 31, and (iii) dividing the resulting
product by 12. Landlord shall provide Tenant notice of Tenant's Operating
Expense Payment for each such period by the preceding December 15.
(c) ANNUAL ADJUSTMENT FOR ACTUAL OPERATING EXPENSES. After each
December 31 during the Term, Landlord shall compute Tenant's Proportionate Share
of the actual Operating Expenses for the preceding twelve (12) calendar months
and notify Tenant of any correction from Tenant's Operating Expense Payments for
such period. Within thirty (30) days after the giving of notice that Tenant's
Proportionate Share of actual Operating Expenses was greater than Tenant's
Operating Expense Payments, Tenant shall pay to Landlord an amount equal to the
excess of Tenant's Proportionate Share of
-4-
actual Operating Expenses over Tenant's Operating Expense Payments for such
period. Should it be determined that Tenant's Proportionate Share of actual
Operating Expenses was less than Tenant's Operating Expense Payments for such
period, Tenant shall be entitled to a credit against future Operating Expense
Payments in an amount equal to the difference between Tenant's Proportionate
Share of actual Operating Expenses and Tenant's Operating Expense Payments for
such period. (If this Lease terminates during such a period, Tenant shall pay or
be refunded any deficiency or excess, respectively, between estimated and actual
Operating Expenses on a pro rata basis as if Operating Expenses accrued
uniformly during the period.)
(d) NORMALIZATION. If any part of the Project is not fully
occupied and used during any twelve (12) month period preceding a December 31,
the calculations of Operating Expenses, both estimated and actual, shall be
adjusted by adding amounts and items of Operating Expenses which would normally
have been incurred if the Project had been fully occupied and used during such
period, and by deducting any abnormal start-up or other costs incurred, all as
estimated by Landlord; PROVIDED, HOWEVER, for this Section 3.02 (d), ground rent
increases, insurance and real property taxes shall be excluded in the
calculation of Operating Expenses for normalization.
(e) STATEMENT OF OPERATING EXPENSES. Landlord shall have available
for inspection by Tenant during normal business hours a written statement
showing in reasonable detail Landlord's actual Operating Expenses for the
previous twelve (12) month period which shall be retained for a period of
twenty-four (24) months after the calendar year in question pursuant to which
the notice referred to in Section 3.02 (c) has been given. Landlord agrees that
Tenant, its accountants and authorized representatives at Tenant's expense shall
have the right within two (2) years after the close of each calendar year to
audit all of the books and records of Landlord relating to Operating Expenses
for the calendar year in question. Any such audit shall be performed in
Landlord's office during Landlord's normal business hours. If such audit shows
that Operating Expenses attributable to Tenant for the calendar year were
overstated by more than five percent (5%), then Landlord shall reimburse Tenant
for its Proportionate Share of such overstated amount and the reasonable costs
of the audit. If the overstatement is five percent (5%) or less, Landlord
shall reimburse Tenant for its Proportionate Share of such overstated amount.
3.03 REIMBURSEMENT FOR REPAIRS. Unless the same is promptly repaired
by Tenant if such damage is of an emergency or safety related nature or unless
the repair is promptly commenced by Tenant and the same is diligently pursued to
completion in accordance with Landlord's written requirements, Tenant shall
reimburse Landlord for all expenses incurred by Landlord in repairing damage to
the Project, including damage to structural elements, which is attributable to
the conduct of Tenant or Tenant's Employees. Upon demand Tenant shall reimburse
Landlord therefor, together with a surcharge of twenty percent (20%) of such
expenses.
3.04 LATE PAYMENT CHARGES. It is agreed that since collection of any
amount past due imposes an administrative cost on Landlord, in addition to any
fees of collection agents or attorneys or other out-of-pocket costs, Tenant will
pay to Landlord a sum equal to five cents ($.05) for every dollar not paid
within five (5) days of when due.
3.05 TAX ON RENT AND OTHER PAYMENTS. In addition to Base Rent, the
Operating Expense Payment and any other payment to Landlord provided in this
Lease, Tenant shall also pay to Landlord with each payment, an amount equal to
the State of Hawaii general excise or gross income tax assessed against Landlord
and attributable to the total payment, including the amount paid by Tenant to
Landlord under this Section. For example, the amount of such tax is presently
four percent (4%), resulting in a figure of 1.04167 to be multiplied by said
Base Rent, Operating Expense Payment or other payment in order to calculate the
total payment due from Tenant. Tenant shall pay any and all increases in said
taxes made from time-to-time and any and all other taxes or duties levied or
assessed by the federal government, State of Hawaii, the City and County of
Honolulu, or any other political subdivision of the State of Hawaii now or
hereafter having power to levy taxes or duties which are attributable to any
payments made by Tenant under the terms of the Lease. It is the intent of this
Section and of the other provisions of this Lease to insure that the rent and
other sums to be paid to Landlord by Tenant will be received by Landlord without
diminution by any tax, assessment, charge or levy of any nature whatever, except
United States and State of Hawaii net income taxes, and the terms and conditions
of this Lease shall be liberally construed to effect such purpose.
3.06 CONVEYANCE TAX. Any conveyance tax imposed by law due to this
Lease shall be paid by Tenant. Landlord shall inform Tenant of the amount of
such tax, if any, and it shall be thereupon due and payable by Tenant. At the
request of Landlord, Tenant shall promptly execute such documents as may be
necessary in connection with such tax.
3.07 TAXES ON TENANT'S BUSINESS AND PERSONAL PROPERTY. Tenant shall be
responsible for and shall pay before delinquency all City and County of Honolulu
and State of Hawaii taxes assessed during the Term against Tenant by reason of
the conduct of its business in the Premises, Improvements to the Premises and
with respect to personal property of any kind owned by or placed in, upon or
about the Premises by or at the expense of Tenant.
-5-
3.08 SECURITY DEPOSIT.
(a) DEPOSIT. Upon execution of this Lease, Tenant shall deposit
the sum specified in Section 1.01(e) (the "Security Deposit") as security for
Tenant's performance under this Lease. The Security Deposit may be commingled
by Landlord with other funds of Landlord, and Tenant shall not be entitled to
interest on the Security Deposit.
(b) INCREASE. The Security Deposit shall be increased from
time-to-time, as necessary so that the amount thereof is always equal to the
Base Rent plus estimated Operating Expense Payments. Upon written notice of
such increase from Landlord, Tenant shall deposit with Landlord the increased
amount within thirty (30) days of such notice.
(c) USE. If Tenant shall be in default under this Lease,
Landlord may apply the whole or any part of the Security Deposit to the payment
of any sum in default or any other sum which Landlord may be required to spend
by reason of Tenant's default. In the event Landlord should so apply all or any
part of the Security Deposit Tenant shall pay to Landlord, within fifteen (15)
days after receipt of notice from Landlord, an amount equal to the sum so
expended in order to replenish the Security Deposit. Failure to do so shall be
a default under this Lease.
(d) REFUND. If Tenant complies with all of the terms and
conditions of this Lease, the Security Deposit or any balance thereof shall be
returned to Tenant within thirty (30) business days of the expiration of the
Term.
(e) ASSIGNMENT. Landlord may assign and deliver the Security
Deposit to any purchaser of Landlord's interest in this Lease or the Premises or
the Project without Tenant's approval, and Landlord shall thereupon be released
and discharged from any and all obligations and liabilities related to the
Security Deposit. After such transfer, Tenant shall look only to such purchaser
for any recovery of the Security Deposit to which Tenant is entitled. In the
event of any valid assignment of this Lease by Tenant, Landlord shall not be
required to return the Security Deposit to Tenant, but only to Tenant's valid
assignee.
3.09 CHARGE FOR PROVIDING UTILITY AND EXTRAORDINARY PROPERTY AND
SERVICES.
(a) SEPARATELY SUBMETERED UTILITY SERVICE. Unless otherwise set
forth herein, all premises in the Project are separately submetered by Landlord
to measure the consumption of electrical power, natural gas and domestic water
usage therein. Tenant shall pay for such utility charges directly to Landlord
(or to the utility company if so directed by Landlord), within ten (10) days of
receipt by Tenant at the Premises of the bill for same. Tenant's failure to so
pay shall be a default under this Lease. Tenant shall have the right, at any
time that the local utility will allow, to have a separate meter installed to
directly measure Tenant's usage and to directly bill Tenant. All costs
associated with installing such separate meter shall be borne by Tenant.
(b) EXTRAORDINARY SERVICE. Any property or services, other than
those Landlord has agreed to provide Tenant under this Lease, provided by
Landlord to or for the benefit of Tenant shall be at Tenant's expense, including
a surcharge of five percent (5%) to cover Landlord's administrative costs.
Landlord shall advise Tenant in writing of the estimated cost to furnish such
property or service. If the same is approved in writing by Tenant, Landlord
shall furnish such property or service and thereafter notify Tenant of the
amount due and Tenant shall make such payment on or before ten (10) days
following the date such notice is given. Such extraordinary property and
services shall include, without limitation, providing extraordinary janitorial
services (those not normally provided for Office and Retail tenants as
reasonably determined by Landlord).
3.10 APPARATUS REQUIRING EXCESSIVE UTILITIES USAGE. Tenant shall not,
without the prior written consent of Landlord, connect to any utility service,
including, but not limited to, electrical, water, sewer or natural gas,
requiring amounts of such utility service in excess of that required for the
equipment listed in Tenant's Construction Plans as set forth on Exhibit F as
approved in writing by Landlord. If Tenant shall install in the Premises any
equipment requiring utilities in excess of the approved equipment list in
Tenant's Construction Plans, Tenant shall pay for such excessive utilities
usage. Tenant agrees to pay Landlord promptly upon demand (but not more
frequently than monthly), for all excess utilities consumed, at the rates
charged for such utilities by the public utility or governmental or
quasi-governmental department furnishing the same, plus any additional expense
incurred by Landlord in keeping accounts of the utilities consumed.
3.11 LANDLORD'S RIGHT TO MAKE TENANT'S REPAIRS. If Tenant does not
make, within thirty (30) days after written notice from Landlord, proper repairs
or alterations in accordance with Section 6.04 and 6.05 or, if the nature of the
repair or alternation is such that more than thirty (30) days are required for
its performance and Tenant does not diligently continue the cure to completion,
Landlord may make such repairs or alterations without liability to Tenant for
any loss or damage which may accrue to Tenant's property, Improvements or
business by reason thereof. Upon completion of such repairs or
-6-
alterations, Landlord shall notify Tenant of the cost of any such repair or
alteration expenses, and Tenant shall reimburse Landlord therefore pursuant to
and in accordance with the provisions of Section 3.02.
3.12 OPTION TO PERFORM LEASE COVENANTS. If Tenant shall fail to pay
any sum of money, other than monies required to be paid to Landlord hereunder,
or shall fail to perform any other act on its part to be performed hereunder,
Landlord may, without waiving or releasing Tenant from any obligations of Tenant
and upon prior written notice to Tenant, make any such payment and perform any
other such act. All sums so paid by Landlord and all costs incurred in
performing such acts (including reasonable attorney's fees), together with
interest thereon at the rate provided in Section 3.13, shall be payable by
Tenant upon demand, and Tenant hereby covenants to pay any and all such sums.
3.13 INTEREST. Interest shall be charged to Tenant on late payments of
Base Rent, Operating Expense Payment and other sums due under this Lease from
the date such payment is due until received by Landlord, at the greater of (a)
one and one-half percent (1 1/2%) per month or (b) at a floating rate equal to
five (5) percentage points over the base rate then being charged by Bank of
Hawaii, but not to exceed the maximum rate of interest allowed by law.
3.14 TENANT'S COST. All covenants and agreements to be performed by
Tenant under any of the terms of this Lease shall be performed by Tenant at
Tenant's sole cost and expense.
3.15 CASHIER'S OR CERTIFIED CHECKS. If for any reason Tenant's check
for Base Rent and/or Operating Expense Payment is returned unpaid by Tenant's
bank to Landlord more than one (1) time in any twelve (12) month period, then,
for the remainder of the Term, Landlord, in its sole discretion, may require
Tenant to pay Base Rent and Operating Expense Payment by cashier's or certified
check.
3.16 ADDITIONAL RENT. All amounts required to be paid by Tenant to
Landlord hereunder, exclusive of Base Rent, but specifically including Operating
Expense Payments, shall be deemed to be additional rent.
ARTICLE 4
CONDITION, USE AND OCCUPANCY OF PREMISES
4.01 TENANT'S INSPECTION AND ACCEPTANCE OF THE PREMISES.
Notwithstanding anything contained herein to the contrary, Tenant understands
and agrees that the Premises, Building and Project are "AS IS, WHERE IS AND WITH
ALL FAULTS", and Landlord has not made and does not make any warranties or
representations of any kind, expressed or implied, as to the condition, zoning,
merchantability or state of repair or fitness of the Premises, Building or the
Project for any particular purpose, the availability of utilities to the
Premises, Building or Project, the likelihood of appreciation in value of the
Premises, Building or Project, the existence of violations of building setbacks
or building restrictions, or as to the compliance of the Premises, Building or
Project with any applicable county, state or federal statute, ordinance, rule or
regulation or as to any other matter whatsoever pertaining to the Premises,
Building or Project. Tenant accepts all risks of any defects or deficiencies in
the Premises, Building or Project, whether known or unknown, and Tenant
acknowledges that Landlord makes no expressed warranties of any kind except as
specifically set forth in this Section 4.01(c) below, and hereby disclaims all
implied warranties of any nature whatsoever pertaining to the Premises, Building
or Project.
(a) [Intentionally Omitted]
(b) EXISTING PREMISES. As to all other Premises, Tenant, by
Tenant's execution of this Lease, represents and agrees that Tenant has
inspected the Premises, or has been provided an opportunity to inspect the
Premises which Tenant has declined, and, excluding any Improvements yet to be
completed by Landlord as specified in Exhibit F, if any, Tenant accepts the
Premises in its current condition or has provided Landlord with a written
statement listing all damage and defects. Tenant agrees the Term of this Lease
shall commence even if there are defects or damage to the Premises, if the
Premises are occupiable as reasonably determined by Landlord.
(c) REPRESENTATIONS OF LANDLORD AS OF THE COMMENCEMENT DATE:
Notwithstanding this Section 4.01 to the contrary, Landlord represents and
warrants that as of the execution date of this Lease:
(i) all Improvements installed by Landlord as specified in
Exhibit F are and/or will be of new and good quality and free from defects and
in full compliance with all relevant regulatory requirements;
(ii) to the best of Landlord's knowledge the Building, of
which the Premises is a part, is structurally sound and the roof of over the
Premises is free of leaks; and
(iii) to the best of Landlord's knowledge no Hazardous
Material in violation of applicable laws are located on the Premises.
-7-
4.02 PERMITTED USE OF PREMISES. The Premises may be used only for the
purpose set forth in Section 1.01 (f) and for no other purposes, and may be
occupied by no more than the number of persons set forth in Section 1.01 (f),
except as consented to in writing by Landlord. Notwithstanding the foregoing to
the contrary, Landlord acknowledges that from time to time Tenant will have
meetings, sessions or conferences in the Premises and Tenant represents and
warrants to Landlord that any such meetings, sessions or conferences (i) will be
held in accordance with the terms of this Lease and all applicable local laws,
ordinances and codes, and (ii) will not interfere with the rights and quiet
enjoyment of any other tenant in the Project. Tenant acknowledges that neither
Landlord nor any agent or employee of Landlord has made any representation or
warranty with respect to the Premises or Project or with respect to the
suitability of the Premises or Project for Tenant's intended use, except as may
be expressly set forth in this Lease.
4.03 LEGAL COMPLIANCE. Tenant will comply, at its own expense, with
all laws and ordinances and governmental rules and regulations applicable to the
Premises and Landlord will comply at its own expense, with all laws and
ordinances and governmental rules and regulations applicable to the portions of
the Project other than tenant premises. Landlord agrees to cooperate with and
assist Tenant in obtaining, processing or receiving any and all permits
necessary to install Tenant's Improvements previously approved by Landlord.
Such cooperation and assistance shall not involve any cost to Landlord.
4.04 PROHIBITED USE OF PREMISES. No use shall be made of the Premises,
nor act done in or about the Premises, which will increase the existing rate of
any insurance upon the Building or Project, nor shall any use be made of the
Premises which would cause Landlord to be in default under the Ground Lease,
mortgage or other lien on Landlord's estate. Any deficiencies found in a fire
inspection by any governmental authority or Landlord's insurance carrier shall
be immediately corrected by Tenant, at Tenant's sole cost and expense. Tenant
shall not commit or allow to be committed any waste upon the Premises, or any
public or private nuisance or other act or thing which disturbs the quiet
enjoyment of any other tenant in the Project, nor shall Tenant use any
apparatus, machinery or device in or about the Premises which shall cause any
substantial noise or vibration, or which shall overload the floor of the
Premises. If any of Tenant's machines or equipment should disturb the quiet
enjoyment of any other tenant in the Project, then Tenant shall provide adequate
insulation, or take such other action as may be necessary or required by
Landlord to eliminate such disturbance.
4.05 RULES AND REGULATIONS. Landlord, for the proper maintenance,
safety, order, cleanliness and efficient operation of the Building and the
Project, may from time-to-time make, amend and enforce rules and regulations
applicable to tenants of the Building or Project (the "Rules and Regulations").
Such Rules and Regulations may be applicable to all tenants of the Project or,
because of the differing uses of the Project, may be only applicable to tenants
of a certain Premises Type. The Rules and Regulations in force at the date
hereof are those set forth in Exhibit C. Tenant shall observe and comply with
all Rules and Regulations of which Tenant receives written notice. Any failure
to so observe and comply shall constitute a default under this Lease. Landlord
shall not be liable or responsible to Tenant for the violation of any Rules or
Regulations by any other tenant or occupant of the Building or Project.
4.06 PARKING AND AUTOMOBILES.
(a) NON-PREMISES PARKING FACILITIES. Tenant shall have use of
the number of parking spaces in the Project parking facilities outside the area
of the Premises, on an unassigned, tandem or reserved basis, as shown in Section
1.01 (g), if any. The fee charged for Tenant's use of such non-Premises parking
spaces shall be established by Landlord from time-to-time in accordance with the
prevailing market rate; however, in no event shall the amount charged for said
spaces be less than the initial monthly fee shown in Section 1.01 (g). Tenant
shall not sublease or otherwise rent to others any of Tenant's parking spaces in
the Project. The location of the non-Premises parking spaces shall be determined
by Landlord and may from time to time be relocated within the Project parking
facilities, all in the sole discretion of Landlord. Tenant and Tenant's
Employees shall enter into such parking agreements (herein called "Parking
Agreements") that Landlord or any operator of the Project parking facilities may
request from time-to-time. Failure by Tenant or Tenant's Employees to execute,
or to perform or comply with any provision of, the Parking Agreement shall
constitute an event of default under this Lease. In the event Landlord becomes
unable to provide the number of parking spaces agreed upon above by reason of
government regulation, condemnation or damage, then such inability shall not
constitute a breach of this Lease on the part of Landlord.
(b) VALIDATED PARKING. If Landlord at any time concludes, in its
sole judgment, that validated parking for the Project would be advisable,
Landlord shall have the right to enforce validated parking in the parking
facilities of the Project by controlled entrances or otherwise and upon such
terms and conditions as Landlord shall, at its sole discretion, stipulate from
time-to-time. In such event, the revenues derived from such validated parking
program shall belong to Landlord; PROVIDED, HOWEVER, all Tenant parking referred
to in Section 1.01(g) and Exhibit E shall be at no additional cost to Tenant
under any such validated parking program.
-8-
(c) MISCELLANEOUS. Tenant and Tenant's Employees shall not store
vehicles in parking spaces or otherwise within the Project, bring upon the
Project any junk vehicles, make repairs to any vehicles while within the
Project, drive or park any vehicle on landscaped areas or on sidewalks, exceed
the speed limits posted upon the Project, allow any vehicle with an oil or anti-
freeze leak to remain on the Project, or post, place or otherwise display any
sign, picture, placard, poster or sandwich board in, on or attached to any
vehicle parked in or upon the Project. Tenant and Tenant's Employees shall
observe all rules for guest parking established by Landlord. Landlord shall not
be responsible for any loss of or damage to any vehicle while upon the Project.
(d) VALET PARKING BY TENANT. Subject to the same being provided
in accordance with the provisions of this Lease and the Rules and Regulations,
Tenant from time to time may provide valet parking services for Tenant's
clients, agents and invitees. Tenant shall enter into a written agreement with
such valet parking service provider, the terms of which shall be subject to the
prior written approval of Landlord.
4.07 COMMON AREAS. in addition to the Premises, Tenant shall, as an
appurtenance thereto, have full right of access to the Premises over and across
the Common Areas and the non-exclusive right to use the Common Areas in
connection with Tenant's use of the Premises; subject, however, to the rights of
other tenants and to the Rules and Regulations.
4.08 ADVERTISING.
(a) SIGNS. Tenant shall not inscribe any inscription or post,
place or in any manner display any sign, notice, picture, placard or poster, or
any advertising matter whatsoever, anywhere in or about the Premises, at places
visible (either directly or indirectly as an outline or shadow on a glass pane)
from anywhere outside the Premises, or in or about the Building or the Project
except as permitted under the Rules and Regulations.
(b) LIMITATION ON DISTRIBUTION OF ADVERTISING. Tenant shall not
distribute to any of the other tenants in the Project or to their employees,
customers, clients or invitees, affix to vehicles parked in the parking area of
the Project, or place or cause to be placed in any of the suites of the Building
or any other area of the Project, any notices, advertisements or written
solicitations, or solicit or originate, or attempt to originate, any business
whatsoever by distributing handbills or literature from any part of the Project,
except within the Premises.
4.09 CARE OF PREMISES. Tenant shall keep and maintain the Premises,
including all Improvements, clean and in good condition and repair. All
furniture, fixtures and equipment installed or placed in the Premises shall be
of first class quality.
4.10 SECURITY. Tenant shall be solely responsible for providing
security for the Premises and Landlord shall have no responsibility therefor.
4.11 [Intentionally Omitted]
4.12 QUIET ENJOYMENT. Upon Tenant's payment of the Base Rent and
additional rent herein provided and Tenant's observance and performance of the
covenants herein contained on the part of Tenant to be observed and performed,
Tenant shall peaceably hold and enjoy the Premises without disturbance from
Landlord and Landlord's Employees for the Term; subject, however, to the terms
and provisions of the Lease, the Ground Lease described in Article 17 (as
presently existing or as amended in the future), or any mortgage of Landlord's
estate or interest in the Lease, Premises, Building, or Project.
4.13 INSPECTION OF PREMISES. Landlord and Landlord's Employees shall
have a passkey to the Premises. Tenant will permit Landlord, and Landlord's
agents, at all reasonable times during the Term of this Lease (upon not less
than twenty-four (24) hours notice), and during any emergency, to enter the
Premises to examine the state of repair and condition of the Premises, to make
repairs or Improvements and for the purpose of exhibiting the Premises to
potential mortgagees, purchasers of the Project and tenants. Landlord also
reserves the right to enter the Premises after the Commencement Date to complete
Landlord's construction obligation under Exhibit F.
4.14 [Intentionally Omitted]
4.15 CHANGE OF BUILDING NAME. Landlord may, in its sole judgment,
change the name of the Building or the Project at any time and in any manner.
4.16 [Intentionally Omitted]
4.17 [Intentionally Omitted]
4.18 OTHER TENANTS. Landlord reserves the right to enter into other
leases in the Project, in Landlord's sole discretion, without restriction as to
the tenants thereunder; and Tenant acknowledges that
-9-
no representations have been made by Landlord, or Landlord's agents or
employees, regarding Landlord's intent or ability to lease or not lease to any
specific tenant or class of tenant and that Tenant is not relying, in entering
into the Lease, on any specific tenant, class of tenant or number of tenants
leasing or not leasing a portion of the Project during the Term of this Lease.
4.19 NO SIGNS ON STATE PROPERTY. On the Paiea Street side of the
Project, between the curb of the street and the beginning of the Land, there is
a strip of land owned by the State of Hawaii ("State land"). Tenant shall not
place or post any sign, notice, picture, placard or poster upon or within the
boundaries of the State Land. Any such item placed upon or therein may be
removed and destroyed or otherwise disposed of by Landlord without notice at the
sole cost and expense of Tenant.
4.20 CONDUCT OF TENANT'S EMPLOYEES. Tenant shall be responsible for
the conduct of Tenant's Employees when upon or within the Project. If any of
Tenant's Employees shall fail to observe the Rules and Regulations, or otherwise
shall fail to conduct themselves in a responsible manner, Tenant shall promptly,
but in not event later than fourteen (14) days following written notice from
Landlord, remove and bar such Tenant Employee from the Premises and Project.
Landlord's written notice shall provide reasonable detail as to the infraction.
Failure of Tenant to comply with this Section shall be a default under the
Lease. Notwithstanding anything contained in this Section 4.20 to the contrary,
Tenant shall be required to comply with this provision to the extent such is not
in violation of a union agreement or applicable federal, state or local law.
4.21 CONSUMPTION OF ALCOHOLIC BEVERAGES. Consumption of alcoholic
beverages shall be allowed only within the Premises. It shall be within the sole
discretion of Tenant whether to allow such consumption. In no circumstances
shall Tenant or Tenant's Employees consume, or carry open containers of,
alcoholic beverages outside of the Premises.
4.22 SMOKING AND EATING IN COMMON AREAS. Smoking, and consumption of
beverages and food is not allowed in the interior Common Areas of the Building.
ARTICLE 5
SERVICES PROVIDED BY LANDLORD
5.01 STANDARD SERVICES.
(a) UTILITIES AND JANITORIAL SERVICE. Provided that Tenant
shall not be in monetary default hereunder, the following services shall be
provided by Landlord in Common Areas of the Project and, if applicable, portions
of the Premises within the Building: Landlord agrees to furnish Tenant with
unheated water to public restrooms, electricity for lighting and other normal
use (but in no event more than the Premises' pro rata share of electricity
available for the Project) and restroom facilities and supplies. Landlord shall
also furnish customary janitorial and cleaning services to the Office premises,
as reasonably determined by Landlord, within the Premises on the basis of five
(5) days per week, at reasonable intervals shall wash both sides of the exterior
windows of the Building. Within the Premises, Building standard light bulbs
shall be replaced by Landlord's maintenance staff at Tenant's expense. Tenant
shall be responsible for all janitorial and cleaning not provided by Landlord.
All such services will be rendered in accordance with the Rules and Regulations.
(b) AIR CONDITIONING. For Office type premises, provided Tenant
shall not be in monetary default hereunder, Landlord shall provide as part of
such Premises, routine air conditioning system maintenance which system shall be
separately submetered for electrical consumption and charges pursuant to the
provisions of Section 3.09 (a) hereof. Landlord may install an air conditioning
system timing or other energy saving device in the Premises which Tenant agrees
to operate in accordance with instructions received from Landlord. Landlord will
be responsible for the routine maintenance of the air conditioning system within
the Premises, the cost of which will be included in Operating Expenses.
(c) COMMON AREA MAINTENANCE. Except as otherwise herein
provided, Landlord will use best efforts to maintain the public and Common Areas
of the Project, such as stairs, lobbies, corridors and restrooms, in good order,
condition and repair.
(d) KEYS. Landlord shall provide to Tenant up to four (4)
outside door keys or cards for access to the Building. Tenant shall be
responsible for the cost of additional keys or cards. Landlord may at any time
change the lock or reprogram card access in Landlord's sole discretion and shall
immediately thereafter provide Tenant with four (4) new outside door keys or
cards. Tenant shall collect keys and cards from any of Tenant's Employees who
terminate employment with Tenant.
5.02 LIMITATION ON LIABILITY. Unless caused by Landlord's failure to
make payment for such utilities or services after receipt by Landlord of
Tenant's payment for its full share of same or except to the extent that gross
negligence of Landlord or Landlord's Employees is the proximate cause of such
damage, Landlord shall not be liable for any damages caused by the utilities and
services described under Section 5.01, or for the interruption, malfunction or
curtailment of any of said utilities and services
-10-
caused by maintenance, labor disturbances or labor disputes (whether caused by
Landlord or otherwise), accidents, repairs, wars, riots, termination of
electrical power by Landlord pursuant to Section 3.09 (a) or other causes, nor
shall Landlord be liable, except as provided in Section 11.01 hereinbelow, for
loss of or injury to persons or property, however occurring, through or in
connection with or incidental to the furnishing of any of the foregoing. No such
interruption, malfunction, termination or curtailment shall relieve Tenant from
any of its obligations under this Lease or constitute or be construed as a
constructive or other eviction of Tenant or disturbance of Tenant's use and
possession of the Premises or breach by Landlord of any of its obligations
hereunder.
5.03 SERVICE CONTRACTS. Any service which Landlord may or is required
to furnish pursuant to the provisions of this Lease may, at Landlord's option,
be furnished from time-to-time in whole or in part by employees of Landlord or
by the managing agent of the Project or by one or more third persons.
ARTICLE 6
TENANT IMPROVEMENTS, ALTERATIONS, REPAIRS AND RENOVATIONS
6.01 CONSENT REQUIRED. Tenant shall make no alterations, additions or
improvements in or to the Premises without Landlord's prior written consent
which shall not be unreasonably withheld or delayed, and then only upon such
conditions as Landlord may reasonably impose. All such work shall be done at
such times and in such manner as Landlord designates and in full compliance with
all requirements of governmental authorities having jurisdiction, including
obtaining a valid building permit prior to commencement of work. Tenant shall
reimburse Landlord for all reasonable costs and expenses incurred by Landlord in
connection with Tenant's work including, but not limited to, the review of all
Construction Plans, any future plans and construction observation by Landlord's
representatives. Landlord shall provide a written estimate of such expenses
upon Tenant's request.
6.02 LIEN PROTECTION. Before commencing any work, Tenant shall
reasonably satisfy Landlord that Tenant has sufficient resources to pay for such
work or if requested by the Ground Lessor or any mortgagee of Landlord shall
secure, at Tenant's sole cost and expense, a completion and lien indemnity bond,
satisfactory to Ground Lessor or any mortgagee of Landlord, for said work. Any
mechanic's lien application filed against the Premises, Building or Project for
work claimed to have been done for, or materials claimed to have been furnished
to Tenant, shall be discharged by Tenant, by bond or otherwise, within ten (10)
days after the filing thereof.
6.03 OWNERSHIP. All alterations, additions, or improvements to the
Premises, whether temporary or permanent, made either by Landlord or Tenant,
shall be for the benefit of and owned by Landlord, shall not be removed unless
otherwise provided for in this Lease or consented to in writing by Landlord, and
shall be an integral part of the Premises. Notwithstanding anything contained
in this Section 6.03 to the contrary and Tenant not being in default of this
Lease, this provision shall not apply to the trade fixtures, machinery and
movable equipment of Tenant, and the same may be removed from the Premises by
Tenant at any time without Landlord's consent provided that Tenant shall repair
all damage to the Premises and any remaining Improvements caused by or resulting
from such removal and shall leave the Premises in a clean and orderly condition.
6.04 LEGALLY REQUIRED. Except as may be otherwise provided in Section
4.01 of this Lease, if, during the Term, any change, alteration, addition or
correction shall be required by any governmental authority to be made in or to
the Premises or any portion thereof, Landlord shall first give its written
consent thereto and such change, alteration, addition or correction shall then
be made by, and at the sole expense of, Tenant.
6.05 REPAIRS BY TENANT. Tenant will promptly make all repairs to the
Premises necessary to meet Tenant's obligation under Section 4.09. Within thirty
(30) days after written notice from Landlord to do so, Tenant shall repair and
make good all defects which this Lease requires. Tenant hereby waives any right
to make repairs at Landlord's expense or to deduct the cost thereof from the
Base Rent or any other sums to be paid hereunder by Tenant. Tenant shall not
make changes to locks on doors or add, disturb or in any way change any
plumbing, electrical, mechanical or air-conditioning system without first
obtaining the written consent of Landlord which shall not be unreasonably
withheld or delayed unless such changes affect the capacity of the electrical,
plumbing or mechanical systems of the Project in which event the consent of
Landlord shall be at its absolute discretion. Tenant shall give Landlord prompt
written notice of any damage to, or defect in, any water or other pipes or
plumbing, electric light or other fixtures, equipment or appurtenances of the
Premises. All damage or injury done to the Premises by Tenant or by any persons
who may be in or upon the Premises shall be promptly repaired by Tenant, in
quality and style not less than as originally installed by Landlord or Tenant,
to the reasonable satisfaction of Landlord. All repairs to the structure of the
Buildings shall be done by or under the direction of Landlord as provided in
Section 7.02 hereinbelow. Except as otherwise provided in this Lease, Landlord
shall have no obligation to repair the interior of the Premises or any
improvements therein; PROVIDED, HOWEVER, Landlord may, at its option, cure
Tenant's default under this Section as provided in Section 3.11.
-11-
6.06 IMPROVEMENT OF THE PREMISES. Tenant, at Tenant's sole cost and
subject to the requirements of this Article and Exhibit F, shall make all
improvements to the Premises necessary for Tenant's occupancy and use thereof.
ARTICLE 7
IMPROVEMENTS AND REPAIRS BY LANDLORD
7.01 ALTERATIONS, ADDITIONS OR CAPITAL IMPROVEMENTS BY LANDLORD.
Landlord may make any alterations, additions or improvements which Landlord may
deem necessary or desirable for the preservation, safety, improvement, or
efficient operation of the Premises, or Project, or to comply with any laws,
codes, regulations or ordinances now or hereafter in effect, or for the purpose
of reducing operating expenses or energy requirements of the Building or
Project, provided that Landlord shall not materially interfere with Tenant's use
of the Premises (including Tenant's parking stalls) except in an emergency.
Landlord reserves the right to make further improvements, alterations, additions
or renovations to the Premises, Buildings and Project in Landlord's sole
discretion. Landlord also reserves the right to reduce the area of the Land upon
which the Building and Project are located, and to use the portion of the Land
removed from the Project for any purpose whatsoever; PROVIDED, HOWEVER, any such
reduction of the area of the Land shall not reduce Landlord's ability to provide
Tenant with such parking as set forth herein.
7.02 REPAIR OF STRUCTURAL ELEMENTS. Landlord shall repair the
structural elements of the Building, including, without limitation, those within
the Premises, and restore the same to the condition existing immediately prior
to such damage, provided that Landlord shall not materially interfere with
Tenant's use of the Premises except in an emergency. Landlord shall commence to
make repairs under this Section within thirty (30) days following receipt of a
written notice from Tenant of the need for such repairs. In no event shall rent
be abated nor shall Landlord have any liability for the interruption of or
interference with Tenant's business, due to Landlord's making, or failure to
make, repairs pursuant to this Section. The obligation of Landlord to repair
hereunder shall be subject to the operation of Article 13 of this Lease. Except
as otherwise set forth in this Lease to the contrary, Tenant shall have no
obligation to repair any structural element of the Building unless such repair
is occasioned by Tenant's negligence or willful misconduct.
7.03 REPLACEMENT OF CEILING, ETC.. Landlord reserves and shall have
the right to install, repair, replace, maintain and remove, at its sole
discretion, any ceiling, ceiling light fixtures or ceiling sprinkler system;
air-conditioning equipment; water, electric, telephone and other utility lines;
and all types of ducts, conduits and other facilities serving other portions of
the Building, or other buildings, which may pass through the Premises, provided
that Landlord shall not materially interfere with Tenant's use of the Premises
except in an emergency.
7.04 IMPROVEMENTS TO THE PREMISES. Except as set forth in Exhibit F,
Landlord shall not be obligated to make any improvements to the Premises prior
to the Commencement Date hereof.
ARTICLE 8
TENANT ASSIGNMENT, SUBLETTING AND MORTGAGING
8.01 CONSENT REQUIRED. Tenant shall not, without the prior written
consent of Landlord which shall not be unreasonably withheld or delayed, assign,
mortgage, pledge, encumber or otherwise transfer this Lease or any interest
herein, or sublet or abandon the Premises, or any part thereof, or any parking
space or other area used by Tenant within the Project. The term "sublet" shall
include, without limitation, any permitted use of the Premises by any party
other than Tenant, but shall exclude the permitted use of the Premises by
"independent representatives" as that term is used as of the date hereof by
Tenant in it business operations. Any of the foregoing acts, without such
consent shall be void and constitute a default under this Lease. Notwithstanding
the above and Tenant not otherwise being in default of this Lease, Landlord's
approval shall not be required for an assignment or sublease of the Premises to
a person or entity controlling, controlled by or under common control with
Tenant, or into or with which Tenant merges, or to which Tenant sells
substantially all of its assets provided that in all cases such person or entity
has financial net worth equal to or greater than Ten Million Dollars
($10,000,000). Any such consent by Landlord shall not release Tenant from any
of Tenant's obligations hereunder, or be deemed to be a consent to any
subsequent assignment, mortgage, pledge, encumbrance, transfer or subletting.
No assignment, subletting, mortgaging, pledge, encumbrance or transfer may be
made by Tenant if there is any default by Tenant under the terms of this Lease.
8.02 ADDITIONAL CONDITIONS TO ASSIGNMENT OR SUBLEASE.
(a) Tenant shall give Landlord at least sixty (60) days written
notice of Tenant's desire to assign or sublease, accompanied by a description of
the terms thereof, an identification of the proposed assignee or sublessee and
proof of their financial responsibility.
-12-
(b) Tenant shall pay Landlord all costs and expenses incurred by
Landlord in connection with any assignment or sublease, including, but not
limited to preparation of the consent document, review by and consultation with
Landlord's legal counsel, securing credit reports, administrative overhead and
the like.
(c) The proposed assignee or sublessee shall execute an
agreement pursuant to which it shall agree to perform and be bound by all of the
terms, covenants, conditions, provisions and agreements of this Lease.
(d) An executed copy of the assignment or sublease and the
agreement described in Section 8.02 (c), shall be delivered to Landlord prior to
the assignee or sublessee taking possession of the Premises.
(e) Seventy-five percent (75%) of any monies or the value of
other economic consideration received by Tenant from such assignment or
subletting (except that attributable to the amortization over the Lease Term of
Improvements made to sublet a portion of the Premises and that attributable to
the amounts payable by Tenant as to the sublet portion of the Premises, which
costs shall be subject to audit by Landlord) shall be payable to Landlord
without reducing any other Tenant obligation under this Lease.
(f) If Tenant provides Landlord such notice pursuant to Section
8.02(a), Landlord may by thirty (30) days written notice to Tenant elect to
terminate the Lease. Such termination shall not be effective before the date of
the proposed assignment or sublease as specified by Tenant's notice under
Section 8.02 (a).
8.03 MORTGAGE. Tenant shall not have the right to mortgage or
otherwise encumber its leasehold interest in the Premises, but may only encumber
its interest in fixtures, equipment, installations and Improvements that are not
attached to, built into or considered part of the Premises.
8.04 CHANGE OF CONTROL. If at any time during the Term, the ownership
of Tenant shall be changed as a result of sale of assets, transfer of stock,
transfer of partnership interest, merger, consolidation or otherwise so as to
result in a change of the controlling interest in Tenant, Tenant shall give
immediate notice thereof to Landlord. Unless Tenant shall furnish reasonable
adequate assurance that there has been no reduction in the financial
responsibility of Tenant as a result of any such change, Landlord may terminate
this Lease at any time after receipt of such notice, or if such notice shall not
be given, after discovery by Landlord of such change of controlling interest by
giving Tenant sixty (60) days written notice of such termination. A "reduction
in the financial responsibility of Tenant" shall occur if (a) there is a
material diminution in the tangible net worth of Tenant, or (b) the debt equity
ratio of Tenant is materially increased from that in effect as at the
Commencement Date. For the purposes of this Section 8.04, "controlling
interest" shall mean such person or entity with more than 66 2/3% of the
beneficial interest in Tenant. A transfer of stock or a partnership interest in
Tenant shall not be deemed to effect a change of control if the transferor
controls, is controlled by or is under common control with Tenant.
ARTICLE 9
SUBORDINATION, ATTORNMENT AND MORTGAGE REQUIREMENTS
9.01 SUBORDINATION. This Lease shall be subject to and subordinate at
all times to the Ground Lease, and to such mortgages, liens and encumbrances as
are now on or as Landlord may hereafter impose on the Project, Building or
Premises, and on Landlord's interest or estate herein without the necessity of
any further instrument or act on the part of Tenant to effectuate such
subordination. Said liens shall include, without limitation, the lien of a
mortgage executed in part to secure a loan to pay for the construction of
Improvements upon the Land or in the Project. In confirmation of such
subordination, Tenant agrees to promptly execute and deliver any instrument that
the Ground Lessor or lien holder may require to evidence such subordination, and
Tenant hereby irrevocably appoints Landlord its attorney-in-fact to execute and
deliver such instruments on behalf of Tenant should Tenant refuse or fail to do
so within ten (10) days after a request is made therefor. Said appointment of
Landlord as Tenant's attorney-in-fact is coupled with an interest and
irrevocable. Tenant shall not be required to effectuate such subordination to
any mortgage, nor shall Landlord be authorized to effect such subordination on
behalf of Tenant, unless the mortgagee named in such mortgage shall first agree
in writing for the benefit of Tenant, that so long as Tenant is not in default
under any of the provisions, covenants or conditions of this Lease, that neither
this Lease nor the rights of Tenant hereunder shall be terminated or modified or
be subject to termination or modification, nor shall Tenant's possession of the
Premises be disturbed or interfered with, by any action or proceeding to
foreclose said mortgage.
9.02 REQUIREMENTS OF LANDLORD'S MORTGAGEE AND GROUND LESSOR. In the
event any mortgagee of Landlord shall elect to have this Lease, in whole or in
part, as a lien prior to its mortgage, then, upon such mortgagee notifying
Tenant in writing to that effect, this Lease shall have priority over the lien
of such mortgage to the same extent as if the same had been placed on record
prior to such mortgage. In the event any proceedings are brought for the
foreclosure of, or in the event of the exercise
-13-
of the power of sale under, any mortgage, whether or not this Lease is
terminated by such foreclosure or sale, Tenant agrees that it will, upon request
by the purchaser, attorn to the purchaser upon any foreclosure or sale and
recognize such purchaser as Landlord under this Lease, and agrees to execute on
request a non-disturbance and attornment agreement with any such purchaser, it
being the intent hereof that if this Lease should be terminated by such
foreclosure or sale, it shall, upon request by such purchaser, be reinstated as
a lease between such purchaser and Tenant. In the event that any mortgagee of
Landlord's interest hereunder shall take possession of the Premises prior to or
pending foreclosure pursuant to the terms of such mortgage, Tenant agrees upon
request of such mortgagee to attorn to such mortgagee as provided in the
immediately preceding sentence. If the Ground Lessor shall require, Tenant shall
attorn to it and this Lease shall then continue in effect in the event of
termination of the Ground Lease. Tenant, upon request of any party in interest,
shall execute upon presentation such instrument or instruments as shall be
requested to carry out the requirements of this Section.
9.03 ESTOPPEL CERTIFICATES. Tenant shall, at any time and from
time-to-time, upon not more than ten (10) days following receipt of written
notice from Landlord, execute, acknowledge and deliver to Landlord a statement
in writing certifying that this Lease is unmodified and in full force and effect
(or, if modified, stating the nature of such modification and certifying that
this Lease, as so modified, is in full force and effect), the dates to which the
rental and other charges, if any, have been paid in advance and the amount of
Tenant's Security Deposit, if any, and acknowledging that there are not, to
Tenant's knowledge, any uncured defaults on the part of Landlord hereunder, and
that there are no events or conditions, then in existence which, with the
passage of time or notice or both, would constitute a default on the part of
Landlord hereunder, or specifying such defaults, events or conditions, if any
are claimed, and addressing other items required by Landlord. It is expressly
understood and agreed that any such statement may be relied upon by any
prospective purchaser or encumbrancer of all or any portion of the Premises,
Building or Project. Tenant's failure to deliver such statement within such time
shall, at the option of Landlord, constitute a default under this Lease and, in
any event, shall be conclusive evidence that this Lease is in full force and
effect without modification except as may be represented by Landlord in any such
certificate prepared by Landlord and delivered to Tenant for execution.
9.04 LEASE AMENDMENT, FINANCIAL INFORMATION. Should a prospective
mortgagee or purchaser of the Project require financial statements relating to
Tenant, Tenant shall provide the requested balance sheets and income statements
upon the understanding that such information shall be kept confidential.
ARTICLE 10
SALE OF LANDLORD'S INTEREST
10.01 SALE OF LANDLORD'S INTEREST. Landlord shall have the right to
sell, convey, transfer or assign all or any part of its interest in the
Premises, Building or Project, or all or any of its rights and obligations under
this Lease, without prior notice to or the consent of Tenant.
10.02 TENANT ATTORNMENT. Tenant shall attorn to any purchaser or
assignee under Section 10.01.
10.03 SALE OR ASSIGNMENT BY LANDLORD. Landlord shall be automatically
freed and relieved from all liability respecting the performance of any
covenants or obligations on the part of Landlord contained in this Lease upon a
sale, conveyance or assignment of its interest in the Premises, Building or
Protect except as to the obligations already accrued. Upon any such sale,
conveyance or assignment, the buyer, grantee or assignee shall become
responsible for all of the covenants and conditions herein contained and on the
part of Landlord to be observed or performed after the time of such sale or
conveyance.
ARTICLE 11
INDEMNITY AND RISK OF INJURY, LOSS AND DAMAGE
11.01 INDEMNITY. Tenant, as a material part of the consideration to
Landlord for this Lease, will and does hereby assume all risk of bodily injury,
wrongful death and/or property damage occasioned by any accident or nuisance
made or suffered in the Premises, except where such injury, death or damage is
caused by the gross negligence or willful misconduct of Landlord or Landlord's
Employees, or resulting from any failure on the part of Tenant to maintain the
Premises in a safe condition. Tenant hereby waives all claims in respect thereof
against Landlord and Landlord's Employees, and acknowledges that this assumption
of risk by Tenant has been bargained for in determining rent and other
obligations of Tenant under this Lease. Tenant hereby agrees to indemnify and
save harmless Landlord and Landlord's Employees from and against any and all
claims, loss, cost and liability for bodily injury, wrongful death and/or
property damage by any persons (including, without limitation, Tenant's
Employees and Landlord's Employees) arising out of, caused or occasioned by, or
resulting from any accident, fire or nuisance in the Premises, or failure to
maintain the Premises, except where such injury, death or damage is caused by
the gross negligence or willful misconduct of Landlord or Landlord's
-14-
Employees or the failure of Landlord, after reasonable written notice, to repair
any structural defect, in which cases Landlord hereby agrees to indemnify and
defend Tenant from and against any and all such claims, loss, cost and
liability. Without limitation, Tenant will indemnify and save harmless Landlord
and Landlord's Employees against and from any and all claims by or on behalf of
any person or persons, firm or firms, corporation or corporations, arising from
the conduct or management of any work or thing whatsoever done by Tenant or
Tenant's Employees in or about the Project, or from transactions of Tenant
concerning the Premises, and will further indemnify and save Landlord and
Landlord's Employees harmless against and from any and all claims arising from
any breach or default on the part of Tenant in the performance of any covenant
or agreement on the part of Tenant to be performed pursuant to the terms of this
Lease, or arising from any act or negligence of Tenant or Tenant's Employees,
and shall reimburse Landlord the costs, attorneys' fees, expenses and
liabilities incurred in connection with any such claim or any action or
proceeding brought thereon. Tenant and Landlord further agrees that in case of
any claim, demand, proceeding, action or cause of action, threatened or actual,
against Landlord relating to a matter which Landlord shall be entitled to
indemnification hereunder, upon Landlord's written request, Tenant shall defend
Landlord at Tenant's expense by counsel mutually satisfactory to Landlord,
Tenant and their respective insurance carriers. If Landlord does not request
such defense or Tenant does not provide such defense, then Tenant will reimburse
Landlord as aforesaid, and agrees to cooperate with Landlord in such defense,
including, but not limited to, the providing of affidavits and testimony upon
request of Landlord.
11.02 NON-LIABILITY OF LANDLORD. Tenant, as a material part of the
consideration to Landlord for this Lease, will and hereby does assume all risk
of loss or damage to furniture, fixtures, supplies, merchandise, and other
property, by whomsoever owned, stored or placed in, upon or about the Premises,
and does hereby agree that Landlord will not be responsible for loss or damage
to any such property, unless caused by the gross negligence or willful
misconduct of Landlord or Landlord's Employees, and waives all claims in respect
thereof against Landlord and Landlord's Employees and acknowledges that this
assumption of risk by Tenant has been bargained for in determining rent and
other obligations of Tenant under this Lease. Tenant hereby agrees to indemnify
and save harmless Landlord from and against any and all claims for such loss or
damage, other than damage caused by the gross negligence or willful misconduct
of Landlord or arising out of a defect which Landlord is required hereunder to
repair and has failed to remedy within a reasonable time after having been given
written notice. Without prejudice to the generality of the foregoing, Landlord
shall not be liable for any damage to any property entrusted Landlord or
Landlord's Employees, nor for damage to any property at any time stored or kept
in the Premises or any other part of the Building or Project, arising from rain
or from any other water which may leak, issue or flow from any part of the
Project, or from the pipes or plumbing from the same or any other place or
quarter, nor for any damage to property in the Project caused by theft or
accident involving elevators, or for damage of any character arising out of
defects of construction of the Project, the Premises or any machinery,
equipment, electrical wiring or facility therein or failure or breakdown
thereof, or from lack of repair or proper operation of the same, or from any
other cause unless the cause be a defect which Landlord is required hereunder to
repair and Landlord shall have failed to remedy such defect within a reasonable
time after written notice.
ARTICLE 12
INSURANCE
12.01 PUBLIC LIABILITY AND PROPERTY DAMAGE. Tenant shall procure at
Tenant's expense and keep in force during the Term and any extension thereof,
commercial general liability insurance insuring Landlord, Tenant, any mortgagee
of Landlord's and/or Tenant's interest in this Lease, and such other parties as
Landlord may specify, against any liability arising out of the use, occupancy or
maintenance of the Premises and all areas appurtenant thereto by Tenant and
Tenant's Employees. Such insurance shall be written by a company reasonably
acceptable to Landlord and have reasonable minimum limits set by Landlord from
time-to-time, but not less frequently than every three (3) years during the
Term, based on acceptable minimum limits used for similar properties at the time
of such setting. Initially, such limits shall not be less than Five Hundred
Thousand Dollars ($500,000.00) for property damage against claims for property
damage per single occurrence with an aggregate of One Million Dollars
($1,000,000), and One Million Dollars ($1,000,000.00) for bodily injuries
including death of persons per single occurrence with an aggregate of Three
Million Dollars ($3,000,000). Such insurance shall be primary and shall insure
performance by Tenant of the provisions of Section 11.01; PROVIDED, HOWEVER,
that the limits of such insurance shall not limit the liability of Tenant under
Section 11.01.
12.02 INSURANCE ON PERSONAL PROPERTY, IMPROVEMENTS AND BUSINESS
INTERRUPTION. Tenant shall procure at its own expense and will keep in force
during the Term and any extension thereof, insurance on all Improvements and
Tenant's trade fixtures, merchandise and personal property in the Premises, with
fire, extended coverage, vandalism, malicious mischief and ceiling sprinkler
leakage protection, with a responsible insurance company authorized to do
business in the State of Hawaii and otherwise reasonably acceptable to Landlord,
in an amount as near as practicable to the full replacement cost of such
Improvements, trade fixtures, merchandise and personal property, in the joint
names of Landlord, Tenant, any mortgagee of Landlord's and/or Tenant's interest
in this Lease, and such other parties as Landlord may specify, as their
interests may appear. All proceeds shall be payable in case of
-15-
loss to Tenant, and Tenant will pay all premiums on such insurance when due.
Notwithstanding anything in Section 13.01 hereinbelow to the contrary, in every
case of loss or damage to such Improvements, trade fixtures, merchandise and
personal property, Tenant, with all reasonable speed, will use all proceeds of
such insurance for rebuilding, repairing or otherwise reinstating the
Improvements, trade fixtures, merchandise and personal property, in a good and
substantial manner and Tenant will make up from its own funds any deficiency in
such insurance proceeds. Landlord may elect to maintain such insurance, which
would insure against loss of the Improvements, and in such event, upon written
notice to Tenant from Landlord, Tenant will be relieved of the requirement of
this Section of the Lease but only as to Improvements. The cost of any such
insurance shall be an Operating Expenses as provided in Section 2.09. The
foregoing provisions shall not affect the requirement of business interruption
insurance which Tenant must carry and Tenant may keep the proceeds thereof for
its own account. The amount of business interruption insurance shall be
sufficient for Tenant to make all payments required under this Lease as well as
all other continuing obligations of Tenant respecting its operations in the
Premises for a period of twelve (12) months.
12.03 NOTICE TO LANDLORD. Each insurance policy required under the
provisions of this Article 12 shall provide that it cannot be canceled without
not less than thirty (30) days prior written notice to Landlord and any such
mortgagees and, if obtainable, shall provide for notice to Landlord and any such
mortgagees if not renewed at the expiration thereof. A current certificate that
each such policy is in effect and, if required by Landlord, a true copy of each
such policy shall be deposited with Landlord and any such mortgagees by Tenant
at the commencement of the Term and renewed thereafter so as to be kept current
at all times.
12.04 RECIPROCAL WAIVERS OF SUBROGATION. Landlord hereby waives on
behalf of itself and on behalf of its insurance carrier, if any, any claim which
Landlord might otherwise have against Tenant or Tenant's Employees arising out
of any loss or damage, including consequential loss or damage, to any property
of Landlord within the Premises, Building or Project from any risk required to
be insured against by Landlord. Tenant hereby waives, on its behalf and on
behalf of its insurance carrier, if any, any claim which Tenant might otherwise
have against Landlord or Landlord's Employees arising out of loss or damage,
including consequential loss or damage, to any property of Tenant within the
Premises, Building or Project from any risk required to be insured against by
Tenant.
12.05 OTHER PROVISIONS. Each policy of insurance required to be
maintained by Tenant hereunder shall contain such further provisions and be with
such insurance carriers as the Ground Lessor and any mortgagee holding an
interest in the Premises, Building or Project may require.
12.06 BLANKET INSURANCE. Tenant may fulfill its obligations under this
Article by maintaining a "blanket" policy or policies of insurance covering
other properties besides the Premises; provided that by specific endorsement
thereto coverage of the Premises is maintained at or above the level required
hereunder.
ARTICLE 13
DAMAGE AND RESTORATION
13.01 REPAIRS BY LANDLORD.
(a) If the Premises, not including Improvements, or any portion
of the Building shall be damaged or destroyed during the Term by any casualty
insurable under standard fire and extended coverage policies, or if the Building
shall be damaged by any other type of casualty to an extent which is less than
twenty-five percent (25%) of what had been the assessed value of the Building
for real property tax purposes immediately prior to such other type of casualty,
Landlord shall, except as otherwise provided in this Lease and subject to any
delay or inability from causes beyond its control, repair and rebuild the same
substantially to its condition immediately prior to such damage or destruction.
If Landlord elects under Section 12.02 to insure Improvements to the Premises,
Landlord shall also repair and rebuild the Improvements hereunder.
(b) If the Building shall be totally destroyed or damaged to the
extent of twenty-five percent (25%) or more of what had been its assessed value
for real property tax purposes immediately prior to the casualty and such
casualty shall not have been insurable under standard fire and extended coverage
policies, then Landlord may, at its option, either terminate this Lease or elect
to repair such damage or rebuild the Building. If Landlord elects to repair or
rebuild the Building, it shall perform such repair or rebuilding as provided in
Section 13.01 (a), and rent shall be abated proportionately as provided in
Section 13.04. Within thirty (30) days after any such casualty Landlord shall
notify Tenant whether Landlord intends to repair or rebuild the Building. If
Landlord elects not to repair or rebuild, this Lease shall terminate without
further notice, Tenant shall immediately vacate the Premises and all further
obligations of both parties hereunder shall cease (other than those which shall
theretofore have accrued), effective as of the date on which Tenant vacate or
ceases doing business in the Premises. If such damage or destruction occurs and
the Lease is not terminated by Landlord, this Lease shall remain in full force
and effect, and Landlord and Tenant waive the provisions of any law to the
contrary.
-16-
(c) Landlord's obligation under this Section shall in no event
exceed the scope of the work done by Landlord in the original construction of
the Building and Premises, nor the scope of the work done in the construction of
the Improvements (if Landlord shall be obligated to repair or rebuild the
Improvements hereunder).
13.02 CONTINUATION OF BUSINESS. During any period of reconstruction or
repair of the Premises and/or the Building, Tenant shall continue the operation
of Tenant's business in the Premises to the extent reasonably practicable from
the standpoint of good business practice.
13.03 REPAIRS BY TENANT. Notwithstanding anything contained in Section
13.01 to the contrary (except any obligation of Landlord to repair or rebuild
the Improvements), in the event of any damage or destruction affecting the
Premises, Tenant shall, unless this Lease is terminated pursuant to Section
13.01 (b), forthwith replace or fully repair all Improvements, exterior signs,
trade fixtures, equipment, display cases and other property originally installed
by Tenant in the Premises.
13.04 ABATEMENT OF RENT. During any period in which, by reason of any
damage or destruction to the Premises and/or Building, there is substantial
interference with the operation of Tenant's business in the Premises, Base Rent
shall be abated proportionately according to the extent to which Tenant may be
required to discontinue Tenant's business in the Premises. Such abatement shall
continue for the period commencing with such destruction or damage and ending
with the completion by Landlord of such repair or rebuilding work as Landlord is
obligated to perform pursuant to this Lease.
ARTICLE 14
CONDEMNATION
14.01 TERMINATION OF LEASE AS TO PORTION TAKEN. If the Premises or any
part thereof or interest therein (including Landlord's ability to provide Tenant
with parking as set forth herein) is taken by condemnation (other than a
temporary taking, which is provided for in Section 14.06), this Lease shall
terminate as to the part so taken upon the earlier of the time possession or
title thereof vests in the condemnor.
14.02 LANDLORD'S OPTION TO TERMINATE. If (a) any part of or interest in
the Premises is taken by condemnation or (b) a substantial portion of the
Building or Project is taken by condemnation and Landlord shall decide to
discontinue the use or operation of the Building or to demolish, alter or
rebuild the same as a result of such taking, then Landlord shall have the right
to terminate this Lease by giving Tenant written notice of termination within
sixty (60) days after such taking. Any such termination shall be effective as of
the last day of the calendar month next following the month in which such notice
is given.
14.03 TENANT'S OPTION TO TERMINATE. If more than twenty-five percent
(25%) of the Premises is taken by condemnation and the remaining part is thereby
rendered reasonably unfit for Tenant's use, Tenant may terminate this Lease by
giving Landlord written notice of termination within fifteen (15) days after
possession is lost or title passes, whichever shall first occur unless Landlord
is able to relocate Tenant as provided in Section 4.14 or is able to replace the
portion of the Premises so taken within thirty (30) days of the effective date
of the termination of the Lease. Any such termination shall be effective as of
the last day of the calendar month next following the month in which such notice
is given.
14.04 REDUCTION OF RENT. If part of the Premises is taken by
condemnation (other than a temporary taking which is provided for in Section
14.06 hereinbelow) and neither Landlord nor Tenant shall terminate this Lease as
provided herein, then this Lease shall continue as to the part of the Premises
not taken and the Base Rent shall be reduced in the same proportion as the Net
Rentable Area of the Premises shall have been reduced as a result of such
taking, and Tenant's Proportionate Share shall be recalculated.
14.05 RIGHT TO COMPENSATION. In the event of any taking described in
Sections 14.01, 14.02 or 14.03, all compensation and damages payable or to be
paid for or by reason of such taking shall be payable to and be the sole
property of Landlord without any apportionment to Tenant, and Tenant hereby
assigns to Landlord any right to compensation or damages for its leasehold
interest in the Premises condemned; PROVIDED, HOWEVER, that Tenant shall not be
prevented hereby from filing any claim against the condemning authority for the
taking of any Improvements, equipment or fixtures owned by Tenant and for moving
expenses. Termination of this Lease by Landlord pursuant to Section 14.02 or by
Tenant pursuant to Section 14.03 shall not affect the respective rights of
Landlord and Tenant to compensation and damages.
14.06 TAKING FOR A LIMITED PERIOD. If the Premises or any part thereof
shall be temporarily taken by condemnation for a limited period, this Lease
shall not terminate. Tenant shall continue to pay in full all amounts provided
for herein, in the manner and at the times herein specified, and, except only to
the extent that Tenant is prevented from so doing by reason of any order of the
condemning authority,
-17-
Tenant shall continue to perform and observe all of the other covenants,
agreements, terms and provisions of this Lease as though such taking had not
occurred. In the event of any such taking, Tenant shall be entitled to the
entire amount paid by governmental authority with respect to governmental
occupancy of the Premises during the Term (whether paid by the authority as
damages, rent or otherwise), and in the event any such governmental occupancy
extends beyond the date of termination of this Lease, all such amounts paid by
governmental authority shall be prorated as of the date of termination of this
Lease. Landlord shall have a lien on all amounts payable to Tenant and may
require Tenant to assign the same to Landlord to be held without interest as
security for the payment of rent and other sums that shall be payable by Tenant
during such period. Tenant covenants that at the termination of any such
limited taking prior to the expiration or earlier termination of this Lease,
Tenant will restore the Premises and Improvements therein as near as reasonably
possible to the condition that the same were in prior to such taking.
ARTICLE 15
DEFAULT BY TENANT
15.01 DEFINITION OF DEFAULT. Tenant will be in default under this
Lease if any of the following events occur:
(a) Tenant shall fail to pay Base Rent, Operating Expense
Payment or any other amount on the date the same becomes due and such failure
continues for five (5) days following Tenant's receipt of Landlord's written
notice thereof.
(b) Tenant shall fail to increase the Security Deposit as
provided in Section 3.08(b) or to replenish the Security Deposit as provided in
Section 3.08(c).
(c) Tenant shall fail to make repairs as provided in Section
6.05.
(d) Tenant shall fail to observe and comply with the Rules and
Regulations.
(e) Tenant or Tenant's Employees shall fail to perform or comply
with any provision of the Parking Agreements to which they are a party.
(f) Tenant shall fail to remove and bar a Tenant Employee as
provided in Section 4.20.
(g) Tenant shall fail to pay when due any billing for utility
consumption under Section 3.09(a) and such failure continues for five (5) days
following Tenant's receipt of Landlord's written notice thereof.
(h) Tenant shall, or shall attempt to, assign, mortgage, pledge,
encumber, transfer or sublet the Premises without Landlord's required consent.
(i) Tenant shall fail to timely deliver an Estoppel Certificate
as required by Section 9.03.
(j) Tenant shall fail to observe or perform any of the other
covenants in the Lease which are Tenant's responsibility, and such default shall
continue for ten (10) days after written notice thereof is given to Tenant, or,
if such default cannot reasonably be cured within said 10-day period, such
longer time as may be required, provided that Tenant shall within said period
commence such cure and then continue it to completion.
(k) Tenant shall become bankrupt, or file any debtor
proceedings, or any case or proceeding, voluntary or involuntary, shall be filed
by or against Tenant as debtor under any provision of the Federal Bankruptcy
code or any State statute governing any debtor-creditor rights, which seeks to
have an order or decree rendered against Tenant directing any readjustment,
arrangement, composition or reduction of Tenant's debts, liabilities or
obligations, or making any assignment for the benefit of creditors and such
proceedings are not dismissed within ninety (90) days.
(l) Tenant shall vacate or abandon the Premises, or shall fail
to take occupancy of the Premise on the Commencement Date.
(m) Tenant shall fail to procure insurance and keep such
insurance in force as provided in Section 12.01.
(n) This Lease or any interest of Tenant hereunder shall become
subject to any attachment or judgment, or to any lien, charge or encumbrance not
consented to by Landlord pursuant to the provisions of this Lease.
-18-
(o) Any guarantor of this Lease shall default under any guaranty
of this Lease, or shall repudiate or revoke such guaranty or any obligation
under such guaranty.
15.02 LANDLORD'S REMEDIES. In the event of any default described in
Section 15.01 or if otherwise provided in this Lease, the following shall be
Landlord's remedies:
(a) RIGHT OF RE-ENTRY. Landlord may at once re-enter and take
possession of the Premises without notice and without being deemed guilty of any
trespass or becoming liable for any loss or damage occasioned thereby.
(b) SUMMARY POSSESSION. Landlord may bring an action for summary
possession and, in any such action, service of prior notice of default and
intent to terminate the Lease or demand for payment are hereby expressly waived.
(c) REMOVAL OF PERSONS AND PROPERTY. In the event of Landlord's
resumption of possession whether by summary proceedings or by any other means,
Landlord, or any receiver appointed by a court having jurisdiction, may
dispossess and remove all persons and property from the Premises, and any
property so removed may be stored in any public warehouse or elsewhere at the
cost of and for the account of Tenant, and Landlord shall not be responsible for
the care of safekeeping thereof, and Tenant hereby waives any and all claims for
loss, destruction, damages or injury which may be occasioned thereby. All
property removed from the Premises and not claimed, including payment of all
charges incurred by Landlord in the removal and storage of such property, within
forty-five (45) days of removal shall be considered abandoned. All abandoned
property may be destroyed or disposed of by Landlord in any manner in its sole
discretion, including by public or private sale. All proceeds from such sale
shall be applied, in order, to expenses of sale, to cost of removal and storage,
to all amounts owed by Tenant to Landlord and, lastly, any balance shall be paid
over to Tenant.
(d) DAMAGES, ATTORNEYS' FEES AND COSTS. Landlord may recover
from Tenant all damages, attorneys' fees and costs which may be incurred by
Landlord as a result of any default of Tenant hereunder, including the expense
of recovering possession.
(e) ELECTION TO TERMINATE LEASE. Landlord may terminate the
Lease. No re-entry or taking of possession of the Premises by Landlord shall be
construed as an election on Landlord's part to terminate this Lease, unless a
written notice that this Lease is terminated is given by Landlord to Tenant, or
a judicial order is secured stating that this Lease is terminated. The effective
date of a termination of this Lease shall be as of the date set forth or
provided in the notice or order.
(f) RELETTING OF PREMISES. Landlord may, without terminating
this Lease, relet for the account of Tenant the Premises or any part thereof,
for all or any portion of the remainder of the Term, to a tenant or tenants
satisfactory to Landlord, and at such rental or rentals as may, in the exercise
of reasonable effort, be obtained, with the right to Landlord to put the
Premises in good order and condition and to make reasonable alterations and
repairs to facilitate such reletting at Tenant's expense, and Landlord shall
receive such rentals and apply them, first to the payment of the expense of
recovering possession of the Premises and the re-renting thereof, including
without limitation, all attorneys' fees and brokers' commissions, together with
such expenses as Landlord may have incurred in putting the Premises in good
order and condition or in making such alterations and repairs, and then to the
payment of rent and to the fulfillment of the covenants of Tenant, the balance,
if any, to be paid over to Tenant; PROVIDED, HOWEVER, that Tenant shall remain
liable for any deficiency, which deficiency Tenant agrees to pay monthly as the
same may accrue. Notwithstanding any such reletting without termination,
Landlord may at any time thereafter elect to terminate this Lease for such
previous breach.
(g) LIQUIDATED DAMAGES. If the Lease is terminated by Landlord
by reason of Tenant's default, Landlord shall be entitled to recover from Tenant
liquidated damages in an amount equal to the excess, if any, of the then cash
value of rent payable by Tenant for the balance of the Term, over the reasonable
rental value of the Premises at the time of such termination, for the same
period and on the same terms, except as to rent. The cause of action for such
damage shall accrue upon such termination.
(h) USE OF SECURITY DEPOSIT. Landlord may apply the Security
Deposit to the cure of Tenant's default as provided in Section 3.08(c).
(i) RIGHT TO CURE. Landlord may, at Tenant's cost and expense,
cure a default of Tenant as provided in Section 3.12.
(j) RIGHT TO MAKE REPAIRS. Landlord may, at Tenant's cost and
expense, pursuant to Section 3.11, make repairs Tenant has failed to make.
(k) TERMINATION OF ELECTRICAL POWER. Upon a failure to pay for
electrical power under Section 3.09(a), Landlord may cease providing electrical
service to the Premises without further notice.
-19-
(l) SEPARATE SUITS. Landlord shall have the right to divide its
causes of action hereunder so as to permit separate suits for summary possession
of the Premises, and for Base Rent and additional rent under the Lease, and no
institution of a suit or entry of judgment thereunder shall bar Landlord from a
subsequent suit or be deemed an election of remedies by Landlord.
15.03 REMEDIES ARE CUMULATIVE. Each and all of the remedies given to
Landlord hereunder are cumulative and the exercise of one remedy by Landlord
shall not impair Landlord's right to any other remedy.
ARTICLE 16
TERMINATION
16.01 SURRENDER OF THE PREMISES. At the expiration or sooner
termination of this Lease, Tenant will surrender and deliver to Landlord
possession of the Premises, including all Improvements, in good condition and
repair, ordinary use and wear excepted. If there shall be no default on the part
of Tenant at the expiration or termination of this Lease, Tenant may, or if
Landlord shall so require will, remove all signs and trade fixtures (including
all audio/visual equipment) erected or placed upon the Premises and, on
Landlord's requirement only, shall also remove any Improvements made or placed
in the Premises by Tenant to the extent specified in Section 6.03 and otherwise
specified by Landlord on the Construction Plans set forth on Exhibit F
contemporaneously with Landlord's approval of same. Tenant shall repair all
damage to the Premises and remaining Improvements caused by or resulting from
such removal and leave the Premises in a clean and orderly condition, ordinary
wear and tear excepted. In the event Tenant shall fail to perform such removal
and restoration, Landlord may do so and Tenant, upon demand, will pay to
Landlord the cost thereof, plus interest as provided in Section 3.13. This
obligation shall survive the expiration or termination of this Lease. Any
property left upon the Premises by Tenant at the expiration or earlier
termination of this Lease may, at the option of Landlord, be (a) removed and
stored by Landlord, at Tenant's cost, or (b) be deemed by Landlord to have been
abandoned by Tenant, in which case Landlord may appropriate, destroy or dispose
of the same without liability or accountability to Tenant.
16.02 HOLDING OVER. If Tenant shall remain in possession after the
expiration or sooner termination of this Lease, all the terms, covenants and
agreements hereof shall continue to apply and bind Tenant so long as Tenant
shall remain in possession, insofar as the same are applicable; except, that, if
Tenant remains in possession without Landlord's written consent, the Base Rent
shall be two (2) times the Base Rent for the last Lease Month of the Term,
prorated on a daily basis for each day that Tenant remains in possession, and
Tenant shall also be liable to Landlord for any damages resulting from failure
to surrender possession. If Tenant remains in possession with Landlord's written
consent, such tenancy shall be month-to-month, terminable by either party by not
less than twenty-five (25) days written notice prior to the end of a Lease
Month.
ARTICLE 17
GROUND LEASE
17.01 GROUND LEASE. The Land described in Exhibit B is owned in fee by
Loyalty Development Company, Ltd., a Hawaii corporation. The Land is leased to
Landlord under ground lease dated April 14, 1981, filed with the Office of the
Assistant Registrar of the Land Court of the State of Hawaii as Document No.
1063148, as amended and restated by instrument dated November 22,1985, filed as
aforesaid as Document No. 1344011 and as may be further amended from time to
time (the "Ground Lease").
ARTICLE 18
LANDLORD'S LIABILITY
18.01 LANDLORD'S FAILURE TO PERFORM. Landlord shall not be deemed to be
in default in the performance of any obligation required by this Lease unless
Landlord has failed to perform such obligation within thirty (30) days after
written notice by Tenant to Landlord. The notice shall specify what obligation
Landlord has failed to perform. If the nature of Landlord's obligation is such
that more than thirty (30) days are required for its performance, Landlord shall
not be in default if Landlord within thirty (30) day period commences to cure
the default and then continues the cure to completion. No such default by
Landlord shall constitute grounds for canceling this Lease. If Landlord does not
perform any such obligations within said thirty (30) day period or, if the
nature of the obligation is such that more than thirty (30) days are required
for its performance and Landlord does not reasonably continue the cure to
completion, Tenant may, after a ten (10) day written notice of its intent to
cure such default and failure of Landlord to cure or commence such cure within
such ten (10) day period, perform such obligation and bill Landlord for the
reasonable cost of same. Landlord shall promptly pay Tenant for all such
reasonable costs incurred and upon Landlord's failure to reimburse Tenant within
sixty (60) days following
-20-
Landlord's receipt of Tenant's bill, Tenant shall have the right to offset such
amount against Base Rent notwithstanding any other provision of this Lease to
the contrary.
18.02 NOTICE TO LANDLORD'S MORTGAGEES. Tenant agrees to give all
mortgagees, under mortgages of any interest of Landlord in the Premises,
Building or Project, by registered mail, a copy of any notice of failure to
perform served upon Landlord; provided that prior to such notice Tenant has been
notified, in writing, of the address of any such mortgagee. Tenant further
agrees that, if Landlord shall fail to cure such failure to perform within the
time provided for in this Lease, before Tenant pursues its other remedies any
such mortgagee shall have an additional sixty (60) days within which to cure the
default, or if such default cannot be cured within that time, then such
additional time as may be necessary, provided that such mortgagee has commenced
and is diligently pursuing the remedies necessary to cure such default within
such sixty (60) days.
18.03 LIMITATION ON LIABILITY OF LANDLORD AND MORTGAGEE. In the event
Landlord is a trust or partnership, if Landlord fails to perform any covenant or
obligation on the part of Landlord contained in this Lease, Tenant may proceed
only against the trust or partnership and may recover only from the assets of
the trust or partnership. Tenant shall have no right to proceed against or
recover from any trustee or partner of Landlord, individually or collectively,
or Landlord's Employees, except to the extent provided in the preceding
sentence. The liability of any mortgagee who succeeds to the interest of
Landlord under this Lease by foreclosure, deed in lieu of foreclosure or
otherwise shall be limited to such mortgagee's interest in the Project.
ARTICLE 19
MISCELLANEOUS
19.01 NO LIGHT, VIEW OR AIR EASEMENT. Any diminution or shutting off of
light, view or air by any structure which may be erected on the Land or on land
adjacent to or in the vicinity of the Premises (including any structure erected
on any portion of the Land removed from the Project) shall in no way affect this
Lease, abate rent or otherwise impose any liability on Landlord.
19.02 TIME OF ESSENCE. Time is of the essence of this Lease.
19.03 BROKERAGE COMMISSIONS. Unless stated otherwise in Exhibit E -
Special Conditions, Landlord and Tenant represents that they have dealt directly
with each other in connection with this Lease and that no brokers negotiated, or
are entitled to any commission in connection with, this Lease. Landlord and
Tenant agree to indemnify each other against, and hold each other harmless from,
all liabilities and costs (including, without limitation, attorneys' fees
incurred by Landlord) arising from the claims of any broker based upon acts of
the indemnifying party.
19.04 EXECUTION BY LANDLORD. The submission of this Lease for
examination does not constitute a reservation of or option to lease the
Premises, and this Lease shall become effective as a lease only upon execution
and delivery by both Tenant and Landlord.
19.05 RENEWAL. Unless otherwise stated in Exhibit E - Special
Conditions, Landlord shall have no obligation to extend or renew this Lease, or
to enter into another lease of the Premises with Tenant upon expiration of this
Lease. Upon expiration of this Lease, Landlord may lease the Premises to
whomever it chooses for the operation therein of a business that is the same as
or different from that operated by Tenant in the Premises.
19.06 COST AND ATTORNEY'S FEES. In the event of any action or
proceeding brought by either party against the other based upon or arising out
of any breach of the terms and conditions hereof, the prevailing party shall be
entitled to recover all reasonable costs, including reasonable attorneys' fees,
from the other. Tenant also agrees to pay all cost and reasonable attorneys'
fees which may be incurred or paid by Landlord in enforcing without litigation
any of the covenants, conditions or agreements contained in this Lease, and all
such amounts shall be deemed payable upon demand. If Landlord becomes involved
in any action, threatened or actual, by or against anyone not a party to this
Lease, but arising by reason of or related to any act or omission of Tenant or
Tenant's Employees, Tenant agrees to pay Landlord's reasonable attorneys' fees
and other reasonable costs incurred in connection with such action.
19.07 LANDLORD'S CONSENT. If Landlord's approval or consent is
required in this Lease, unless otherwise specifically provided to the contrary,
such approval or consent may be granted or denied by Landlord at its sole
discretion and Landlord shall not be required to provide Tenant with an
explanation for the denial of any approval or consent.
19.08 NOTICE. All notices required or permitted hereunder shall be in
writing and may be delivered for all purposes by being (a) sent as registered or
certified mail, postage prepaid, return receipt requested, nationally recognized
overnight express service or by telecopy addressed to Tenant at its post office
address hereinbelow set forth, or to Landlord at its post office address
hereinbelow set forth or at such other post office address as Landlord may from
time-to-time designate in writing by notice to
-21-
Tenant, or (b) delivered personally to Tenant (if Tenant is an individual), to a
general partner of Tenant (if Tenant is a partnership), or to an officer or
director of Tenant (if Tenant is a corporation). Any such notice shall be
conclusively deemed to have been delivered upon the earlier of (a) actual
receipt of mail or telecopy, or (b) two (2) days after the date of such mailing.
If there is more than one Tenant, delivery of notice to any one thereof shall be
construed as notice to all Tenants. All notices shall be made to:
IF TO TENANT: Ed Jacobs, President
National Telephone & Communications, Inc.
2801 Main Street
Irvine, California 92614
Fax: 714-251-8085
With copy to: National Telephone & Communications, Inc.
Legal & Regulatory Department
Attn: Dale R. DeForge
2801 Main Street
Irvine, California 92614
Fax: 714-224-7751
IF TO LANDLORD: Paiea Properties
550 Paiea Street, Suite 102
Honolulu, Hawaii 96819
Attn: Property Management
Fax: 808-833-3046
19.09 SEVERABILITY. If for any reason any of the provisions of this
Lease shall be unenforceable or ineffective, all of the other provisions shall
remain in full force and effect.
19.10 WAIVER. Landlord's failure to take advantage of any default or
breach of covenant on the part of Tenant shall not be construed as a waiver
thereof, nor shall any custom or practice which may grow up between Landlord and
Tenant in the course of administering this Lease be construed to waive or to
lessen the right of Landlord to insist upon the performance by Tenant of any
term, covenant or condition hereof, or to waive or lessen the right of Landlord
to exercise any remedies given Landlord due to any default by Tenant. A waiver
by Landlord of a particular breach or default shall not be deemed to be a waiver
of the same or any other subsequent breach or default. The acceptance of Base
Rent or any other sum due hereunder shall not be, or be construed to be, a
waiver of any breach of any term, covenant or condition of this Lease, whether
or not Landlord has knowledge of such breach at the time of such acceptance.
19.11 SUCCESSORS. Except as otherwise provided, all of the covenants,
agreements, terms and conditions contained in this Lease shall be for the
benefit of and binding upon Landlord and Tenant and their respective heirs,
personal representatives, successors and permitted assigns.
19.12 JOINT AND SEVERAL OBLIGATIONS. In any case where this Lease is
signed by more than one Tenant, the obligations hereunder shall be joint and
several.
19.13 CHOICE OF LAW. This Lease shall be governed by and construed in
accordance with the laws of the State of Hawaii.
19.14 ARTICLE AND SECTION HEADINGS. The article and section headings
herein are for convenience of reference, and shall in no way define, limit or
describe the scope or intent of any provisions of this Lease.
19.15 SHORT-FORM LEASE. This Lease shall not be recorded by either
Landlord or Tenant; PROVIDED, HOWEVER, that upon request by Landlord, Tenant
will execute and deliver a recordable short-form of this Lease, stating the
names of the parties, the Term, the description of the Premises, and the nature
of any options for renewal. Landlord will supply the short-form Lease and Tenant
will pay to Landlord a reasonable fee for the preparation and recordation of
such short-form Lease including, without limitation, reasonable attorneys' fees.
Tenant shall pay the amount of the State of Hawaii conveyance tax as a result of
this Lease, if any.
19.16 FORCE MAJEURE. Unless otherwise specifically provided herein, if
either Landlord or Tenant shall be delayed or hindered in or prevented from the
performance of any act required hereunder by reason of strikes, lockouts, labor
disputes or disturbances, inability to produce materials, failure of power,
restrictive governmental laws or regulations, riots, insurrection, war or any
other reason of a like nature not the fault of the party delayed in performing
work or doing acts required by this Lease, then performance of such act shall be
excused for the period of the delay, and the period for the performance of such
act shall be extended for a period equivalent to the period of such delay;
PROVIDED,
-22-
HOWEVER, that this Section shall not operate to excuse Tenant from the prompt
payment of Base Rent, Operating Expense Payment or other sums required by this
Lease to be paid by Tenant.
19.17 HAZARDOUS MATERIALS.
(a) DEFINITIONS.
(i) As used in this Lease, the term "Hazardous Materials
Laws" means and includes all federal, state or local laws, ordinances or
regulations, now or hereafter in effect, relating to environmental conditions,
industrial hygiene or Hazardous Materials on, within, under or about the
Project.
(ii) As used in this Lease, the term "Hazardous Materials"
means and includes all radioactive materials, asbestos, organic compounds known
as polychlorinated biphenyls, chemicals known to cause cancer or reproductive
toxicity, pollutants, contaminants, hazardous wastes, toxic substances, and any
and all other substances or materials defined as or included in the definition
of "hazardous substances," "hazardous wastes," "hazardous materials," or "toxic
substances" under, or for the purposes of, the Hazardous Materials Laws.
(iii) As used in this Lease, the term "Hazardous Discharge''
means any event involving the use, deposit, disposal, spill, release or
discharge of any Hazardous Material on, within or under the Project.
(iv) As used in this Lease, the term "Hazardous Materials
Claims" means and includes (1) any and all enforcement, clean-up, removal,
mitigation or other governmental or regulatory actions instituted, or to the
best of Tenant's knowledge contemplated or threatened, in respect of the Project
pursuant to any Hazardous Materials Laws, and (2) any and all claims made or to
the best of Tenant's knowledge contemplated or threatened, by any third party
against Tenant or any other person or entity seeking damages, contribution, cost
recovery, compensation, injunctive relief or similar relief resulting from any
Hazardous Discharge or from the existence of any Hazardous Material on, within
or under the Project.
(v) As used in this Lease, the term "Hazardous Material
Contamination" means the contamination (whether presently existing or hereafter
occurring) of the Improvements, facilities, soil, groundwater, air or other
elements on or of the Premises by Hazardous Material, or the contamination of
the buildings, facilities, soil, groundwater, air or other elements on or of any
other property as a result of Hazardous Material at any time emanating from the
Premises.
(vi) As used in this Lease, the term "Release" means any
spilling, leaking, pumping, pouring, emitting, emptying, discharging, injecting,
escaping, leaching, dumping or disposing into the environment (including, but
not limited to the abandonment or discarding of barrels, containers, and other
receptacles containing any Hazardous Material).
(vii) As used in this Lease, the term "Reportable Quantity"
means that quantity of a material as set forth in 40 C.F.R. Part 302.
(viii) As used in this Lease, the term "Adverse Environmental
Impact" means (i) Release of a Hazardous Material in a Reportable Quantity or
(ii) any material adverse impact on human health or the quality of any property.
(b) REPRESENTATIONS OF LANDLORD REGARDING PREMISES.
(i) Notwithstanding any other provision in this Lease to
the contrary, Landlord hereby warrants, covenants and represents to Tenant that,
with respect to the Premises, except as disclosed in the Environmental
Assessment Dated May 16, 1994 performed by RERC Environmental, Inc. (the "Phase
I Report"):
(1) to Landlord's best knowledge and belief, it is in
material compliance, without exception, with Hazardous Materials Laws;
(2) Landlord has no present knowledge, directly or
indirectly, of the issuance or threat of issuance by a Governmental Agency of
any notice or violation of the Hazardous Materials Laws by the Landlord or a co-
tenant;
(3) to Landlord's best knowledge and belief, no
Hazardous Material in violation of applicable laws are located on the Premises
in such a manner or condition that results or could reasonably be expected to
result in any Adverse Environmental Impact;
(4) to Landlord's best knowledge and belief, no part
of the Premises has ever been used for the disposal, storage, treatment,
processing, manufacturing or other handling of Hazardous Material in such a
manner as to result in any Adverse Environmental Impact, nor has any part of the
Premises been affected by any Hazardous Materials contamination;
(5) Landlord has not obtained and is not required to
obtain any licenses, permits or authorizations pursuant to any Hazardous
Materials Laws in order to construct, occupy,
-23-
operate or use any building, improvements, fixture or equipment constituting any
part of the Premises; and
(6) no investigation, administrative order, consent
order and agreement, litigation or settlement with respect to Hazardous Material
or Hazardous Material Contamination is proposed, threatened, anticipated or in
existence.
(c) REPRESENTATIONS OF TENANT REGARDING PREMISES.
(i) For the purpose of inducing Landlord to lease to Tenant
the Premises, Tenant does hereby represent to and agree with Landlord as
follows:
(1) Tenant covenants to Landlord that Tenant and Tenant's
Employees on, within, under or about the Project will not use, generate,
manufacture, treat, handle, refine, produce, process, store, discharge, release,
dispose of or allow to exist on, within, under or about the Project, any
Hazardous Material, except in full compliance with all applicable Hazardous
Materials Laws.
(2) If Tenant at any time becomes aware of any Hazardous
Discharge, of any Hazardous Materials Claim or any inquiry, test or
investigation with respect to the Premises, Tenant will immediately advise
Landlord thereof, in writing, and provide to Landlord such detailed reports
thereof as may be in Tenant's possession. Landlord shall have the right to join
and participate in, as a party if it so elects, any settlements, remedial
actions, legal proceedings or actions initiated in respect of any Hazardous
Materials Claims.
(3) In the event any investigation or monitoring of site
conditions or any clean-up, containment, restoration, removal or other remedial
work (collectively, the "Remedial Work") is required under any applicable
federal, state or local law, by any judicial order, or by any governmental
entity as the result of operations or activities upon, or any use or occupancy
of any portion of the Premises by Tenant, Tenant shall perform or cause to be
performed the Remedial Work in compliance with such law or order. All Remedial
Work shall be performed by one or more contractors, selected by Tenant and
approved in advance in writing by Landlord, and under the supervision of a
consulting engineer, selected by Tenant and approved in advance in writing by
Landlord. All costs and expenses of such Remedial Work shall be paid by Tenant,
including, without limitation, the charges of such contractor(s), the consulting
engineer and Landlord's reasonable attorneys' fees and costs incurred in
connection with monitoring or review of such Remedial Work. Notwithstanding
such payment by Tenant, Tenant shall be entitled to file a claim for
reimbursement under any state or local trust or clean-up fund provided by state
or any local governmental entity.
(d) INDEMNIFICATION. Each party will indemnify such other party
against and hold harmless from all reasonable expenses (including reasonable
fees of legal counsel), losses, damages (including foreseeable or unforeseeable
consequential damages) and liabilities incurred by such other party which may
arise out of or may be directly or indirectly attributable to (i) the use,
generation, manufacture, treatment, handling, refining, production, processing,
storage, Release, discharge, disposal or presence in violation of Hazardous
Materials Laws of any Hazardous Materials on, within, under or about the
Premises, caused by such party or such party's employees, (ii) such other
party's investigation and handling (including the defense) of any Hazardous
Materials Claims, whether or not any lawsuit or other formal legal proceeding
shall have been commenced in respect thereof, and (iii) such other party's
enforcement of this Lease, whether or not suit is brought therefor. The
provisions of this paragraph shall survive the expiration, termination,
assignment or cancellation of this Lease.
Landlord will also indemnify and hold harmless Tenant from all
reasonable expenses (including reasonable fees of legal counsel), losses,
damages (including foreseeable or unforeseeable consequential damages) and
liability incurred by Tenant which may arise out of or may be directly or
indirectly attributable to the use, generation, manufacture, treatment,
handling, refining, production, processing, storage, Release, discharge,
disposal or presence of any Hazardous Materials in violation of Hazardous
Materials Laws prior to Tenant's lease period.
(e) SURVIVAL. Each of the covenants, agreements and indemnities
of Tenant set forth in this Section shall survive the expiration or earlier
termination of this Lease.
(f) TRANSFER. It shall not be unreasonable for Landlord to
withhold its consent to any proposed transfer, assignment or subletting of the
Premises if (i) the proposed transferee's anticipated use of the Premises
involves the use, handling, storage, generation, treatment or disposal of
Hazardous Materials; (ii) the proposed transferee has been required by any prior
landlord, lender or governmental authority to take any remedial action in
connection with Hazardous Materials contaminating a property if the
contamination resulted from such transferee's actions or use of the property in
question and transferee has failed to timely comply, or (iii) the proposed
transferee is subject to and has failed to comply with an enforcement order
issued by any governmental authority in connection with the use, handling,
storage, generation, treatment or disposal of Hazardous Materials.
(g) LANDLORD INSPECTIONS AND TESTS. Landlord and its employees,
representatives and agents shall have access to the Premises and the Land during
reasonable hours and upon reasonable notice to Tenant in order to conduct
environmental inspections and tests of Hazardous Materials
-24-
contamination of the Premises and Land or for such other reasons as Landlord
deems necessary. Such testing shall be at Tenant's expense if Landlord has a
reasonable belief that such contamination exists.
(h) ENVIRONMENTAL CLAIMS. Notwithstanding anything to the
contrary hereinabove provided in this Section 19.17, the following shall apply:
(i) Whenever Landlord learns of a claim (including but not
limited to a governmental notice of violation of any Hazardous Materials Laws)
which, if allowed, would or might give rise to a right of indemnification from
Tenant (the "Claim"), then before paying the same or making any commitment to
pay the same, and within ten (10) days of learning of such claim, Landlord shall
give Tenant written notice of the Claim. Tenant shall notify Landlord in
writing within (10) days of the giving of notice of the Claim whether Tenant
agrees to the merits of the Claim or disputes the same. Failure by Tenant to
give notice of dispute shall be deemed an agreement to the merits of the Claim.
Any Claim as to which timely notice of dispute is given is referred to
hereinafter as a "Disputed Claim".
(ii) If Tenant disputes a Claim, Tenant at its sole cost and
expense, shall promptly take all steps necessary to defend Landlord against the
Claim, and Tenant shall pay any final judgment, award or fine that is entered in
connection with the Claim. Landlord shall have the right to participate in any
proceedings in connection with the Claim, but so long as Tenant is diligently
defending against the Claim, such participation by Landlord shall be solely at
its own cost and expense. If Tenant fails to diligently defend against the
Claim at its sole cost, Landlord may defend against the Claim as it shall see
fit, and Tenant shall be liable to Landlord pursuant to its indemnity
obligations as provided above in this Section 19.17.
(iii) In the event of any Claim to which Tenant's
indemnification obligations apply, Landlord will provide Tenant with reasonable
access to such of Landlord's records and such of Landlord's Employees and agents
as may be reasonably necessary to enable Tenant to evaluate the Claim, to
effectively defend against the Claim, and to otherwise effectively perform its
indemnification obligations. In addition, Landlord will use its best efforts to
cause such employees and agents to cooperate with Tenant in connection with its
investigation and/or defense of the Claim.
(iv) If (i) notice of the Claim shall not be given to Tenant
or (ii) a Disputed Claim is paid or settled without the consent of Tenant, then
no liability shall be imposed on Tenant with regard to that Claim.
(v) Nothing in this Section 19.17 shall be construed to
make Tenant liable hereunder for any Hazardous Discharge or the presence of any
Hazardous Materials affecting the Property except to the extent such Hazardous
Discharge or presence was a result of Tenant's own actions or the action of
Tenant's Employees, agents, contractors, licensees or invitees.
19.18 PERIODIC FINANCIAL STATEMENTS TO LANDLORD. As a material
inducement to Landlord to execute this Lease, Tenant at all times represents
that all financial data and other information provided to Landlord is accurate
and discloses fully the financial condition of Tenant in accordance with
generally accepted accounting principles. Tenant agrees to provide its annual
financial statements to Landlord (i) within ninety (90) days of Tenant's year-
end, and (ii) within thirty (30) days following Landlord's written request for
same at any time during the Term of this Lease. If Tenant's annual financial
statements are not audited and certified as to accuracy by a Certified Public
Accountant, then Tenant, in addition to providing the annual financial
statements, agrees to provide Landlord with its federal income tax returns for
each year contemporaneously with the filing of same.
19.19 ACKNOWLEDGMENT OF WAVIER OF JURY TRIAL. Landlord and Tenant
agree that to the extent permitted by law, each shall and does waive trial by
jury in any action, proceeding or counterclaim brought by either against the
other on any matter whatsoever arising out of or in any way connected with this
Lease, the relationship of Landlord and Tenant, Tenant's use or occupancy of the
Premises or any emergency or statutory remedy.
Tenant's initials EJ
-----------
19.20 ENTIRE AGREEMENT. The provisions of this Lease constitute, and
are intended to constitute, the entire agreement of Landlord and Tenant
regarding the Lease. No terms, conditions, warranties, promises or undertakings
of any nature whatever, express or implied, exist between Landlord and Tenant
except as expressly set forth in this Lease. Any amendment or modification of
this Lease must be in writing and signed by both Landlord and tenant.
-25-
IN WITNESS WHEREOF, Landlord and Tenant have executed this Lease as of
the day and year first above written.
LANDLORD:
PAIEA PROPERTIES, a Hawaii limited partnership
By: NIMITZ-PAIEA, INC., its general partner
By: /s/ T. Gregory Kemp
-------------------------------------------
T. Gregory Kemp
Its Vice President
TENANT:
NATIONAL TELEPHONE & COMMUNICATIONS, INC., a
Nevada corporation
By: /s/ Ed Jacobs
-------------------------------------------
Its President
----------------------------------------
By:
-------------------------------------------
Its
----------------------------------------
-26-
STATE OF HAWAII )
) SS.
COUNTY OF HONOLULU )
On this 22nd day of November, 1996, before me, Sheila A. Tomei, Notary
Public, State of Hawaii, duly licensed and sworn, personally appeared T. Gregory
Kemp, proved to me on the basis of satisfactory evidence to be the person who
executed the within instrument as Vice President of NIMITZ-PAIEA, INC., a Hawaii
corporation, which corporation is the sole general partner of PAIEA PROPERTIES,
a Hawaii registered limited partnership, and acknowledged that said instrument
was signed in behalf of said corporation by authority of its Board of Directors,
and the said officer acknowledged said instrument to be the free act and deed of
the corporation and the partnership.
WITNESS my hand and official seal.
/s/ Sheila A. Tomei
-----------------------------------------
Notary Public, in and for said State and
County
My Commission Expires: 8-4-98
-------------------
-27-
STATE OF California )
) SS.
COUNTY OF Orange )
On this 20 day of November, 1996, before me, Debra A. Checka, Notary
Public, State of California, duly licensed and sworn, personally appeared E.R.
Jacobs and _____________________________, proved to me on the basis of
satisfactory evidence to be the persons who executed the within instrument as
President and Chief Executive Officer of NATIONAL TELEPHONE & COMMUNICATIONS,
INC., a Nevada corporation, and acknowledged that said instrument was signed in
behalf of said corporation by authority of its Board of Directors, and the said
officers acknowledged said instrument to be the free act and deed of the
corporation.
WITNESS my hand and official seal.
/s/ Debra A. Chuckas
-----------------------------------
Notary Public, in and for said State and
County
My Commission Expires: July 3, 1998
---------------
-28-
EXHIBIT A
LOCATION OF PREMISES AND FLOOR PLAN
EXHIBIT A - Page 1
EXHIBIT B
LAND DESCRIPTION
FOR
AIRPORT TRADE CENTER
[550 PAIEA STREET, HONOLULU]
All of that certain parcel of land situate at Moanalua, Honolulu, City
and County of Honolulu, State of Hawaii, described as follows:
LOT 3836, area 298,147.0 square feet, more or less, as shown on Map 652,
filed in the Office of the Assistant Registrar of the Land Court of the State of
Hawaii with Land Court Application No. 1074 of the Trustees under the Will and
of the Estate of Samuel M. Damon, Deceased;
Being a portion of the premise described in Transfer Certificate of
Title No. 406,734 issued to Loyalty Development Company, Ltd., a Hawaii
corporation (the "Ground Lessor") and Assignment of Lease issued to Paiea
Properties in Land Court Document No. 1791977 and SUBJECT also to all
encumbrances noted on said Transfer Certificate.
EXCEPTING AND RESERVING THEREFROM all such rights and easements as
Landlord and Ground Lessor in their several and sole discretion may from time to
time require for overhead wire lines and poles or underground lines, pipes and
appurtenances thereto for drains, sewers, water, utilities and any other
purposes, services, substances whatsoever over, across and under any portion of
said Premises lying between a street boundary thereof and any setback line along
such boundary as shown on said Map 652 (herein called the 'service area') or any
easement shown on said Map, said reserved right to be exercised in such manner
as to cause the least practicable interference with the use and occupancy of
such Premises.
EXHIBIT B - Page 1
EXHIBIT C
STANDARD RULES AND REGULATIONS
Except as may be otherwise specifically set forth in any provision of
the Lease, the following Rules and Regulations shall apply in accordance with
Section 4.05 of the Lease:
1. CONTROL OF COMMON AREA. The sidewalks, entrances, passages,
vestibules, stairways, corridors or halls shall not be obstructed or used for
any purpose other than ingress or egress. The halls, passages, entrances,
stairways, balconies are not for the use of the general public and Landlord
shall in all cases retain the right to control or prevent access thereto by all
persons whose presence in the reasonable judgment of Landlord shall be
prejudicial to the safety, character, reputation or interest of the Building(s)
and its tenants, provided that nothing herein contained shall be construed to
prevent such access by persons with whom Tenant normally deals in the ordinary
course of its business unless such persons are engaged in illegal activities or
are violating terms of the Lease or these Rules and Regulations. Tenant shall
not enter the mechanical rooms, air handler area, electrical closets or
janitorial closets. All parking ramps and area, pedestrian walkways, and other
public areas forming a part of the Building, if any, shall be under the sole and
absolute control of Landlord, who shall have the exclusive right to regulate and
control these areas.
2. ACCESS. On all days between the hours of 11:00 p.m. to 6:00 a.m.
the following day, access to the Building or to the Premises may be refused
unless the person seeking access is known to a tenant and has a key or is
otherwise properly identified. Each Tenant shall be responsible for all persons
for whom he permits entry to the Building and shall be liable to Landlord for
all acts of such persons. Landlord shall in no case be liable for damages for
any error with regard to the admission to or exclusion from the Building of any
person. In case of invasion, mob, riot, public excitement, or other commotion,
Landlord reserves the right to prevent access to the Building(s) during the
continuance of the same by closing the door or otherwise, for the safety of the
tenants and protection of property. Landlord reserves the right to exclude or
expel from the Building(s) any person who, in the judgment of Landlord is
intoxicated or under the influence of liquor or drugs, or who shall in any
manner do any act in violation of the Lease or these Rules and Regulations.
3. AIR CONDITIONING. For Office, Retail and Lower Floor Flex space,
Tenant shall have an individual air conditioning system which shall be under the
control of Tenant as to the temperature setting and hours of its usage;
PROVIDED, HOWEVER, Landlord may install a timing or energy saving device on the
air conditioning system and Tenant will operate same in accordance with
instructions received from Landlord. Tenant shall be solely responsible for the
utilities charged for the use of its system. Landlord shall provide routine
maintenance of the system as an operating expense in accordance with Tenant's
Lease.
4. EXTERIOR APPEARANCE. Other than as provided in the Construction
Plans described on Exhibit F approved by Landlord, no awning or other
projections shall be attached to the outside walls of the Building(s) and no
window shades, blinds, drapes or other window coverings shall be hung in the
Premises without the prior written consent of Landlord. Except as otherwise
specifically approved by Landlord, all electrical ceiling fixtures hung in the
Premises must be fluorescent, of a quality, type, number, design and bulb color
approved by Landlord. No radio or television antenna, loudspeakers, flood
lights, flag poles or any other devices shall be installed or attached to the
roof or the exterior walls of the Building(s), without the prior written consent
of Landlord.
5. SIGNAGE. These criteria have been established for the purpose of
ensuring an outstanding office/retail complex, and for the mutual benefit of all
tenants. Conformity will be strictly enforced; any non-conforming or unapproved
signs by Tenant must be brought into conformity at the expense of Tenant, or
promptly removed without liability.
Landlord shall administer and interpret the criteria, and
Landlord may, in Landlord's sole discretion, grant or withhold consent to any
deviation therefrom. Landlord makes no representation or warranty that any
signage it has approved will meet the approval of appropriate governmental
entities. Tenant is advised that the cumulative effect of signage within the
Project may prevent equal signage allotment or treatment among the tenants.
A. GENERAL REQUIREMENTS
(1) No sign shall be installed on the exterior of the
Building(s) in which Tenant's demised Premises is located except such sign as
shall first have been approved by Landlord, as to color, size, location and
design.
EXHIBIT C - Page 1
(2) No sign, picture, advertisement or notice shall be
inscribed, exhibited, painted or affixed by any tenant on any part of Premises
so as to be seen from the outside of, the Premises or the Building without the
prior written consent of Landlord.
(3) No obstructions or advertising devices of any kind
whatsoever shall be placed in front of or in passageways, hallways, lobbies or
corridors of the Building(s) by Tenant.
(4) Interior signs on doors within the Building(s) and directory
tablets shall be inscribed, painted or affixed for each tenant by Landlord at
the expense of such Tenant, and shall be of a size, color and style acceptable
to Landlord.
(5) Each Tenant shall submit, or cause to be submitted, to
Landlord for written approval before fabrication, at least two copies of
detailed drawings covering the location, size, layout, design and color of the
proposed sign, including all lettering and/or graphics.
(6) All permits for signs and their installation shall be
obtained by Tenant or his representative, at Tenant's expense, prior to
installation.
(7) Tenant shall be responsible for the fulfillment of all
requirements and specifications.
(8) It is Tenant's responsibility to maintain all signs erected.
If any sign is not maintained after written notice by Landlord, the sign may be
removed by Landlord at Tenant's cost.
(9) Upon termination of Lease, for any reason, any signs erected
by Tenant shall be immediately removed and the Building(s) repaired at Tenant's
cost.
B. GENERAL SPECIFICATIONS
(1) Painted lettering will not be permitted, except as specified
under Section E (2) of these Rules and Regulations.
(2) Flashing, moving or audible signs will not be permitted.
(3) Pylon or pole signs will not be permitted.
(4) All electrical signs shall bear the UL label; and their
installation must comply with all local building and electrical codes.
(5) No exposed conduit, tubing or raceways will be permitted.
(6) All cabinets, conductors, transformers and other equipment
shall be concealed.
(7) Electrical service to all signs shall be on Tenant's
meter(s).
C. CONSTRUCTION REQUIREMENTS
(1) All exterior signs, bolts, fastenings and clips shall be of
hot dipped galvanized iron, stainless steel, aluminum, brass or bronze, and no
black iron materials of any type will be permitted.
(2) All exterior letters or signs exposed to the weather shall
be mounted at least 3/4" from the Building wall to permit proper dirt and water
drainage.
(3) Location of all openings for conduit and sleeves in Building
walls shall be indicated by the sign contractor on drawings submitted to
Landlord. Sign contractors shall install the same in accordance with the
approved drawings.
(4) No labels will be permitted on the exposed surface of signs,
except those required by local ordinance which shall be applied in an
inconspicuous location.
(5) All penetrations of the Building structure required for sign
installation shall be neatly sealed in a watertight condition.
(6) Sign contractor shall repair any damage to any work caused
by his work.
EXHIBIT C - Page 2
(7) Tenant shall be fully responsible for the operations of
Tenant's sign contractors.
(8) Signs which lack a professional appearance in design and
manufacture shall not be allowed.
D. DESIGN REQUIREMENTS
(1) All Tenant storefront entrance/store identification designs
shall be subject to the approval of Landlord and shall be in conformance with
the City and County of Honolulu Sign Ordinance(s) as applicable.
(2) Tenant's identification signs shall be designed as an
integral part of the storefront in a manner compatible with and complimentary to
adjacent and facing storefronts and the overall design concept of the
Building(s). Letter size and location shall be approximately scaled and
proportioned to the overall storefront design. Maximum letter size shall not
exceed 12" for lower case letters and 14" for capital letters. If two lines of
copy are required, the total height of the two lines shall not exceed 14".
(3) Signs perpendicular to the face of the Building(s) or
storefront will not be permitted.
(4) No signs of any sort shall be permitted on canopy, soffits
or Building roofs.
(5) Wording of signs shall not include the product sold, except
as part of Tenant trade name or insignia.
(6) No sign, or any portion thereof, may project above the
parapet or top of wall upon which it is mounted.
E. MISCELLANEOUS REQUIREMENTS
(1) Each Tenant will be permitted to place upon each entrance to
its Premises an information sign of not more than 144 square inches, indicating
hours of business, emergency telephone number, etc., as approved by Landlord in
writing prior to installation.
(2) Each Tenant who has a non-customer door for receiving
merchandise may have uniformly applied on said door, in a location as directed
by Landlord, Tenant's name and address. Where more than one Tenant uses the same
door, each name and address shall be applied. The color and size of letters must
receive Landlord's prior written approval.
(3) Tenant may install on the mall front, if required by the
U.S. Post Office, the numbers only for the street address in exact location
determined by Landlord. Size, type, and color of numbers shall be as determined
by Landlord.
(4) Floor signs shall be permitted within Tenant's lease line in
their store fronts, if approved by Landlord.
(5) Tenants with two or more entrances in one front may install
an additional sign if the entries are recessed a minimum of three feet back of
the lease line. The additional sign is to be installed in the recess area, and
is limited to the store name only, and the letters shall not exceed 6". All
other criteria contained in this sign regulation shall apply and govern such
signs also.
(6) Credit card signs or other decals of any type are not to be
affixed to windows or doors. Such signs are to be mounted on their individual
stands or pedestals and set back a minimum of 12 inches from the glass line
unless otherwise approved by Landlord.
F. DIRECTORIES.
The directories of the Building(s) will be provided exclusively
for the display of the name and location of Tenant only and Landlord reserves
the right to exclude any other names therefrom. Landlord may reasonably limit
the amount of space utilized by any one tenant at Landlord's discretion.
Landlord may charge for initial listings and any subsequent changes or
additional listings which shall be the sole judgment of Landlord. A building
standard sign will be installed by Landlord on or adjacent to Tenant's office
entrance door at Tenant's expense. No other signs shall be permitted.
EXHIBIT C - Page 3
6. CONTROL OF NAME. Without the written consent of Landlord, Tenant
shall not use the name of the Project in connection with or in promoting or
advertising the business of Tenant, except in connection with providing the
business address at which Tenant's business may be found. No Tenant shall engage
in advertising which in Landlord's opinion, tends to impair the reputation of
the Project or its desirability as an of office-commercial complex.
7. SOLICITORS. Landlord reserves the right to eject from the
Project, any solicitors, canvassers or peddlers and any other class of persons
who, in the judgment of Landlord, are annoying or interfering with any of
Tenant's or Landlord's operations or who are otherwise undesirable. Canvassing,
peddling, soliciting and distribution of any written materials on the Project
are prohibited and each Tenant shall cooperate to prevent the same.
8. USE RESTRICTION. The Premises shall be used only for the purpose
described in Section 1.01(f) of the Lease. Except as may be specifically
permitted in a tenant's Lease, no tenant shall occupy or permit any portion of
Premises to be occupied as an office for a public stenographer or typist, or for
the manufacture of direct sale of liquor, narcotics, or tobacco in any form or
as a medical office, or as a barber shop, hair salon, manicure shop or
employment agency. No tenant shall engage or pay any employees on the Premises
except those actually working for such tenant on the Premises, excluding only
"independent representatives" as that term is used as of this date in Tenant's
business operations, nor advertise for laborers giving an address at the
Premises. The Premises shall not be used for lodging or sleeping or for any
immoral or illegal purposes.
9. RESTRICTED ACTIVITIES. Other than as provided in the Construction
Plans described on Exhibit F approved by Landlord, the following activities are
restricted without the prior written consent of Landlord and then only as
Landlord may direct. Tenant and its agents, employees or visitors shall not:
a. Mark, paint, drill into or in any way deface any part of the
Premises or the Building(s).
b. Bore, string or cut wires.
c. Bring animals, bicycles or vehicles into the Building(s).
d. Prepare or cook any food on the Premises, except coffee,
tea, hot chocolate and similar items for Tenant and its employees and business
visitors. This restriction shall not apply to Retail tenants, such as
restaurants or convenience shops, where the use clause of their lease permits
food cooking or preparation.
e. Install air-conditioning unit, engine, boiler, machinery or
similar apparatus.
f. Operate any hand truck in spaces other than the Premises or
in the public corridors of the Building(s) except those equipped with rubber
tires and side guards.
g. Bring firearms or explosives onto the Premises.
h. Install, maintain or operate vending machines of any
description on the Premises, except for the exclusive use of Tenant and Tenant's
Employees.
i. Use of the water supplied by Landlord not separately metered
for other than drinking and toilet purposes.
j. No windows, glass doors or any other light sources that
reflect into the lobbies or other places of the Project shall be obstructed or
covered except in a manner approved in writing by Landlord.
k. No water cooled condenser or other water cooled apparatus
shall be used by Tenant, except upon such conditions as are established by, and
with the written consent of, Landlord.
10. PROHIBITED ACTIVITIES. The following activities are strictly
prohibited and shall not be conducted by Tenant and its agents, employees or
visitors:
a. Make or permit to be made any unseemly or disturbing noises,
sounds or vibrations, or otherwise disturb or interfere with occupants of this
nor neighboring buildings or premises or those having business with them by the
use of any musical instrument, radio, phonograph, unusual noise, or in any other
way.
b. Use toilet, wash basins and other plumbing fixtures for any
purpose other than those for which they were constructed, and no sweeping,
rubbish rags or other substances shall be thrown therein. All damage resulting
from any misuse of such fixtures shall be borne by Tenant or Tenant's Employees.
EXHIBIT C - Page 4
c. Throw anything out of doors, windows, or down the public
corridors, stairwells or other areas of the Building(s) nor shall Tenant place
or allow to be placed any object on ledges or lanais of the Building(s).
d. Smoke, drink or eat in elevators, vestibules, entrances,
passages, stairways, corridors, hallways or restrooms. Open food or beverages
shall not be allowed in these areas.
e. Bring or keep in the Premises any inflammable, combustible or
explosive fluid, chemical, or substance nor do or permit anything to be done in
the Premises, or bring or keep anything therein which shall in any way increase
the rate of fire insurance on the Building(s) or on the property kept therein,
or obstruct or interfere with the rights of other tenants or in any way injure
or annoy them, or conflict with the regulations of the Fire Department or the
fire laws, or with any insurance policy upon the Building or any part thereof,
or with any rules and ordinances established by the Board of Health or other
governmental authority.
f. No Tenant shall cause or permit any unusual or objectionable
odors to be produced upon or permeate from the Premises.
g. All windows are to be kept closed during periods when the
Building(s) is being air-conditioned.
h. Overload the floors or the elevators or in anyway violate the
structural integrity of the Building(s).
11. CLOSING PRECAUTIONS. Each Tenant shall, before leaving the
Building close and securely lock all windows and doors of the Premises, turn off
all water faucets or water apparatus, and turn off all electrical equipment
(including air conditioning system but excluding any required night lighting)
within the Premises. Tenant will be responsible for all injuries sustained by
Landlord's other tenants or occupants of the Building(s) due to Tenant's default
or carelessness.
12. KEYS AND LOCKS. No locks or bolts other than those provided by
Landlord shall be placed on any doors without the written consent of Landlord. A
total of four keys per lock will be furnished to Tenant by Landlord. Additional
keys will be provided by Landlord upon Tenant's request at Tenant's cost. Lock
cylinders and keys shall be changed by Landlord at Tenant's expense upon receipt
of written request from Tenant. All keys will be surrendered upon termination of
Lease. Janitor and contract cleaners will be provided with a passkey to Tenant's
Premises unless Tenant declines in writing and thereby understands that Landlord
will not be responsible for providing janitorial services and emergency access
to the Premises.
13. DOORS. All doors opening onto public corridors shall be kept
closed during business hours, and, during non business hours, locked, except
when in use for ingress or egress.
14. TENANT EQUIPMENT. All equipment and any other devise of any
electrical or mechanical nature shall be placed by Tenant in the Premises so as
to absorb or prevent any vibration, noise or annoyance to other tenants of the
Project. Landlord will direct electricians as to where and how telephone and
telegraph wires are to be introduced. No boring or cutting for wires or
stringing of wires will be allowed without the prior written consent of
Landlord, and then only as Landlord may direct. The location of telephones, call
boxes and other office equipment affixed to the Premises shall be subject to the
reasonable approval of Landlord.
15. CONTROL OF CONTRACTORS. Any work to be done in order to repair
the Premises, or to alter, improve or add to Tenant's space shall be done by
contractors reasonably approved by Landlord. No person or contractor not
approved by Landlord shall be used to repair, alter, improve or add to the
Premises without the prior written consent of Landlord. Tenant shall not permit
any contractor or other person making any alterations, additions or
installations within the Premises, to use any Common Area as storage or work
areas, without the prior written consent of Landlord and Tenant shall be liable
for and pay the expense of any additional cleaning cost resulting from the
transportation or storage of materials and/or work performed within the
Building(s).
16. DRAPERIES. Draperies and wall coverings must be treated with fire
retardant and may be installed by Tenant only with the prior written consent of
Landlord. Cleaning of all draperies shall be the responsibility of Tenant and
shall be done as reasonably required.
17. JANITORIAL SERVICE. No one other than those reasonably approved
in writing by Landlord shall be permitted to perform any janitorial service on
the Property. Janitorial service, if supplied by Landlord, shall not include
shampooing or spot-cleaning of carpet nor dry cleaning of draperies. Landlord
shall not be responsible for any loss of or damage to any Tenant's property by
the janitor, its employees or any other person performing janitorial services.
EXHIBIT C - Page 5
18. MAINTENANCE REQUESTS. All request for services by Tenant shall be
made to Landlord's Property Manager only. No employee of Landlord shall perform
any work or service for any Tenant or admit any person into any locked portion
of the Building(s) except under the specific instructions of Landlord's Property
Manager.
19. DELIVERIES AND SERVICE AREA. Except for warehouse operations,
only hand trucks equipped with rubber tires and side guards will be permitted on
the Project. All deliveries shall only be brought through a service entrance of
the Project designated by the Property Manager. All deliveries requiring
exclusive use of an elevator shall be scheduled through the Property Manager and
in any event such use will not be permitted without the use of elevator
protective padding and such use will not be permitted between the hours of 6:00
- - 9:00 a.m., 11:30 a.m. -1:30 p.m. and 3:30-5:00 p.m. Any damage to the Building
(s) caused by any such Tenant or its delivery service will be immediately
reported to Landlord's Property Manager and the repair will be made at Tenant's
expense.
20. MOVING OF HEAVY OBJECTS. Except for warehouse operations, all
removal, or the carrying in or out of any safes, freight, furniture, or bulky
matter of any description must take place at the time and in the manner which
Landlord may determine from time-to-time. The moving of safes or other fixtures
or bulky matter of any kind must be made upon previous notice to the Property
Manager of the Building and under his supervision, and the persons employed by a
Tenant for such work must be acceptable to Landlord. 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. Landlord shall have the right to
prescribe the location of heavy objects and if considered necessary, the means
as to distribute the weight thereof (no more than 50 pounds per square foot
shall be allowed unless written approval is granted by Landlord). All cost
incurred will be charged to Tenant. Any damage to the Project caused by any such
Tenant or its contractor, delivery or moving service, will be repaired at such
Tenant's expense.
21. MOVING IN/OUT. All moving of furniture, fixtures and other
personal property in and out of the Building(s) must be done through the loading
area designed by the Property Manager and only via the designated elevator.
Tenant and its moving company should investigate loading area conditions prior
to the scheduled move. The freight elevator must be reserved at lease 24 hours
prior to the contemplated move date. Reservations must be made with the Property
Manager.
22. REMOVAL OF PROPERTY. Unless otherwise provided in the Lease to
the contrary, Tenant shall deliver a list of any fixtures or Improvements in the
Premises which Tenant desires to remove from the Building, and the list must be
approved by Landlord in writing before any such fixture of improvement is
removed. No fixtures permanently attached shall be removed.
23. CHANGE OF NAME AND ADDRESS. Landlord shall have the right,
exercisable without liability to Tenant, to change the name and the street
address of the Building(s) and Project. Landlord shall reimburse Tenant for
its reasonable costs necessitated by Landlord's name and address change.
24. TRASH REMOVAL. Each Tenant shall store all its trash within the
Premises in a location reasonably approved by Landlord until removal of the
same. No material shall be placed in trash boxes or receptacles if such material
is of such nature that it may not be disposed of in the ordinary and customary
manner of removing and disposing of trash and garbage in the City and County of
Honolulu without being in violation of any law, ordinance, or regulation
governing such disposal. The Premises shall at all times be kept in a clean and
sanitary condition. No open containers of food or liquid shall be placed in
waste baskets due to the possibility of carpet damage during their removal by
janitorial personnel. All Tenant construction debris shall be removed from the
Premises by Tenant, its contractor or its employees. Food or similar type of
waste product shall be sufficiently wrapped to prevent odors and/or other
residue from escaping through the container in or on Common Areas or in the
trash receptacles. Landlord reserves the right throughout the term of any
lease to cause any tenant whose waste consists of food or similar type of
product to independently arrange for the daily removal of such waste from the
Project at the tenant's sole cost. Further, all tenants will comply with any
applicable governmental regulation concerning recycling of waste.
25. COMPLIANCE WITH PROFESSIONAL STANDARDS. Any Tenant who shall be
engaged in any trade, occupation or profession which is regulated by the City
and County, State or Federal government or which is self policing, shall at all
times during the term of its Lease or any extension thereof, be and remain in
good standing with such regulatory or self policing body, and in the event such
Tenant shall be disciplined pursuant to final disciplinary action from which
there is no further appeal, at Landlord's sole discretion, Landlord may
terminate such Tenant's Lease forthwith excepted where such final disciplinary
action was as a direct result of the actions of an "independent representative"
as that term is used as of the date hereof in Tenant's business operations.
26. AUTHORIZED VENDORS. No Tenant shall purchase or otherwise obtain
for use in the Premises water, ice, towel, vending machine, barbering,
bootblacking, or other like service, or purchase
EXHIBIT C - Page 6
or otherwise obtain janitorial, maintenance or other like services, except from
persons authorized by Landlord, and at hours and under regulations fixed by
Landlord.
27. COMMON ROOMS/AREA. Rooms used in common by Tenant shall be
subject to regulations adopted by Landlord, including the parking areas and the
rates applicable thereto.
28. SHOWING PREMISES. Landlord may show the Premises to any
prospective tenants within twelve (12) months prior to the expiration of the
Lease; PROVIDED, HOWEVER, that during the term of normal occupancy and Tenant
not being in default, Landlord shall have access to the Premises during Tenant's
regular business hours or as otherwise provided elsewhere in the Lease.
29. PREVENTION OF DEDICATION. Landlord reserves the right to close
off any and all of the streets, promenades and sidewalks of the Project for
twenty-four hours once every five years or as may be necessary to prevent
dedication.
30. RULES AND REGULATIONS. Pursuant to Section 4.05 of the Lease,
Landlord has the right to modify, supplement or rescind any of these Rules and
Regulations.
Tenant shall be liable for injury or damage caused by the infraction of
any of these Rules and Regulations. Landlord will repair such damage and shall
charge the resulting costs to Tenant. Such costs shall be payable within five
(5) days following Tenant's receipt of Landlord's billing and, if unpaid, shall
constitute sums due under Section 3.03 of the Lease.
Landlord shall not be responsible to any Tenant for the non-observance
or violation of any Rules and Regulations by any other tenant or other person.
Tenant acknowledges it has read these Rules and Regulations and agrees to abide
by them as a condition to its occupancy.
Landlord will appreciate any suggestions for the betterment of service
in the Building(s) and Project. Please address all communications to:
PAIEA PROPERTIES
550 Paiea Street
Suite 102
Honolulu, HI 96819
Attn: Property Manager
REVIEWED AND ACCEPTED BY TENANT this 20th day of November, 1996.
NATIONAL TELEPHONE & COMMUNICATIONS, INC., a
Nevada corporation
By: /s/ Ed Jacobs
-------------------------------------
Its
----------------------------------
By:
-------------------------------------
Its
----------------------------------
EXHIBIT C - Page 7
EXHIBIT D
BASE RENT
THE FOLLOWING IS A SCHEDULE OF THE BASE RENT for the Term of the Lease
dated November 20, 1996, by and between PAIEA PROPERTIES, a Hawaii limited
partnership ("Landlord"), and NATIONAL TELEPHONE & COMMUNICATIONS, INC., a
Nevada corporation ("Tenant"), leasing a portion of Airport Trade Center:
Lease Month Base Rent per
----------- -----------------------------
SF of Net
Rentable Area Lease Month
------------- -----------
1-24 $2.62 $25,964.20
25-48 $2.78 $27,549.80
49-72 $2.94 $29,135.40
73-96 $3.12 $30,919.20
97-120 $3.31 $32,802.10
The initial monthly payment due under this Lease shall be the sum of:
Base Rent $25,964.20
Initial Operating Expense Payment @ $0.38 3,765.80
Parking Monthly Fee [50 x $60] 3,000.00
Evening/Weekend Parking Monthly Minimum 2,500.00
----------
Sub Total 35,230.00
Hawaii State General Excise Tax 1,467.68
----------
Total Initial Monthly Payment 36,697.68
Security Deposit 36,697.68
----------
Total Due on execution of Lease $73,395.36
----------
----------
LANDLORD:
PAIEA PROPERTIES, a Hawaii limited partnership
By: NIMITZ-PAIEA, INC., its general partner
By: /s/ T. Gregory Kemp
----------------------------------------
T. Gregory Kemp
Its Vice President
TENANT:
NATIONAL TELEPHONE & COMMUNICATIONS, INC., a
Nevada corporation
By: /s/ Ed Jacobs
----------------------------------------
Its President
-----------------------------------
By:
----------------------------------------
Its
-----------------------------------
EXHIBIT D - Page 1
EXHIBIT E
SPECIAL CONDITIONS
THE FOLLOWING CONSTITUTES THE SPECIAL CONDITIONS of the Lease dated
November 20, 1996, by and between PAIEA PROPERTIES, a Hawaii limited partnership
("Landlord"), and NATIONAL TELEPHONE & COMMUNICATIONS, INC., a Nevada
corporation ("Tenant"), leasing a portion of Airport Trade Center:
1. OPTION TO TERMINATE LEASE. Landlord and Tenant understand and agree
that Tenant shall use its best efforts, diligently and consistently applied, to
complete the Construction Plans for the Premises and submit application for a
building permit. Notwithstanding anything contained in this Lease to the
contrary, Tenant shall have a one (1) time option to terminate this Lease on or
before January 15, 1997 if the building permit is not issued to Tenant by giving
written notice thereof to Landlord; PROVIDED, HOWEVER, if such written notice is
not received by Landlord on or before the aforementioned date, or Landlord, at
its sole discretion does not agree in writing to extend said date, then Tenant's
option to terminate this Lease pursuant to this provision shall expire.
If Tenant shall exercise the option to terminate this Lease in a timely
manner, as consideration for such option, Landlord shall deduct from the
Security Deposit the amount of $307.00 per day for each day after November 10,
1996 that Tenant's written notice of termination is received by Landlord and the
balance of the Security Deposit shall immediately be return to Tenant. No
deduction shall be made from the Security Deposit in consideration of the option
if Tenant does not exercise such option.
2. SIGNAGE. Landlord will reasonably approve Tenant's signage plan on
the exterior of its Premises consistent with the Project signage standards and
which meets all City and County of Honolulu signage codes. Landlord will
consider additional Tenant signage in other areas of the Project, including the
facade of the roof mechanical area, subject to the same meeting all code
requirements and not being in conflict with any other tenant or tenant premises
in the Project. It is understood that the area surrounding the roof mechanical
area is under a long term lease with Budget Rent a Car and that Tenant signage
in this area of the building must be disclosed and agreed to by Budget Rent a
Car.
3. RESTRICTED ADDITIONAL PARKING. In addition to the parking stalls
allocated to Tenant pursuant to Section 1.01(g) of the Lease, Landlord agrees to
provide Tenant with up to a maximum of 100 unreserved parking stalls for
Tenant's customers for weekday evening use (only between the hours of 6:00 PM
and 11:00 PM) and for weekend use (Saturday and Sunday between the hours of 8:00
AM and 11:00 PM) only ("Restricted Parking"). Tenant shall advise Landlord in
writing as to the number and time requirement for such Restricted Parking stalls
on a business day prior to such use; the initial parking charge for the period
six (6) months from the date hereof shall be $2,500.00 per month to be charged
to Tenant as additional rent and billed to Tenant monthly. Prior to the
expiration of the initial 6-month period, Tenant and Landlord shall enter into
good faith negotiations to reach mutually agreeable terms and conditions for
such Restricted Parking; it being understood that should no agreement be
reached between Tenant and Landlord within thirty (30) days following the
expiration of the initial 6-month period, Landlord shall not be required to
provide any Restricted Parking thereafter during the Term of the Lease.
Landlord shall advise Tenant of the location(s) to be used on the
Project, the Koapaka Street lots and/or on the privately owned portion of
Koapaka Street for such additional parking (being the area graphically described
on Exhibit H - Location of Parking Area - attached hereto) and Tenant shall be
responsible to cone off such area (or otherwise identify the specified area as
reasonably directed by Landlord) and to monitor that its customers use such
specified location. Any additional parking needs of Tenant shall be provided
by Landlord subject to availability as determined by Landlord in compliance with
other leases in the Project and all code requirements of the City and County of
Honolulu.
4. TENANT'S OPTION FOR EARLY TERMINATION. Provided Tenant is not then
in default under the Lease, Tenant shall have the irrevocable option to
terminate this Lease effective the last day of the sixtieth (60th) Lease Month;
PROVIDED, HOWEVER, in order for such early termination to be effective, Tenant
shall (i) notify Landlord in writing as to Tenant irrevocably exercising such
termination option on or before the last day of the fiftieth (50th) Lease Month,
and (ii) pay to Landlord within ten (10) day following receipt of Landlord's
billing all reasonable costs of Landlord including, but not limited to, the
unamortized portion of real estate brokerage commissions. Tenant's written
notice for early termination shall be irrevocable and may not be withdrawn by
Tenant without the written approval of Landlord in its absolute and sole
discretion.
5. FIRST RIGHT TO LEASE ADDITIONAL SPACE. Subject to the rights of any
other tenant in the Project and provided Tenant is not then in default and has
not been in material default under the Lease, Tenant shall have the first right
to lease any first floor Retail space fronting Paiea Street as the same may
become available during the Term of the Lease. Landlord shall provide Tenant
with a written notice that such Retail space is available for lease and shall
provide a listing of the terms and Prevailing Rate thereof
EXHIBIT E - Page 1
in accordance with the method set forth in Section 1(e) of this Exhibit E.
Within ten (10) days following the date of Tenant's receipt thereof, Tenant
shall advise Landlord in writing as to its acceptance of the terms of Landlord's
notice. If Tenant rejects the terms of Landlord's notice or fails to provide
Landlord with its response within the 10-day period, Tenant's first right to
lease shall be void and Landlord shall be free to enter into any agreement to
lease such space with any party upon any terms (whether similar or otherwise as
those contained in Landlord's notice to Tenant) as Landlord may choose in its
sole discretion.
6. OTHER TENANT USES. During the Term of the Lease, Landlord shall not
lease space in the mauka portion of the first floor Retail space fronting Paiea
Street (the area of which is marked on Exhibit A as "Exhibit E-Section 6 Space")
to any tenant whose use of such space would be materially detrimental to
Tenant's business operations in the Premises specifically including the sale of
sexually explicit adult materials or services.
7. ADA COMPLIANCE. Upon completion of Landlord's current renovation
program, the Project (excluding any premises for which the tenant shall be
responsible) shall be fully in compliance with The Americans with Disabilities
Act.
8. PREMISES ACCESS. Notwithstanding contained in the Lease to the
contrary and Tenant not being in default hereunder, Tenant shall be entitled to
have access to the Premises and parking area(s) (as such parking area is
designated from time to time by Landlord) 24-hours per day, 365-days per year
except in the case of an emergency.
9. RENEWAL.
a) If Tenant is not then in default and has not been in material
default hereunder and has not assigned this Lease or subleased all or any
portion of the Premises other than as may be permitted in Section 8.01 of the
Lease, then Tenant shall have the option to extend the Term for one (1)
additional five (5) year period commencing on the day next following the
Termination Date ("Extended Term") by giving written notice of said extension to
Landlord not later than nine (9) months prior to the Termination Date, time
being of the essence.
b) The Extended Term shall be for the period of Lease Months 121 to
180.
c) If Tenant exercises its option to extend the Term for an Extended
Term, then, not later than fifteen (15) days thereafter (or, if later, not later
than seventy-five (75) days prior to the expiration of the Term), Landlord shall
notify Tenant in writing ("Landlord's Rental Notice") of its determination of
the Prevailing Rental (as defined herein) for the Premises for the Extended
Term. Tenant shall notify Landlord not later than fifteen (15) days after
receipt of Landlord's Rental Notice that it elects either (i) to accept
Landlord's determination of the Prevailing Rental, (ii) to rescind the exercise
of its option to extend or (iii) to elect to have the Prevailing Rental
determined by appraisal in accordance with subparagraph (f) below. If Tenant
fails to so elect, it shall be deemed to have rescinded the exercise of its
option to extend. If the Term is extended it shall be so extended on the same
terms and conditions then set forth in this Lease except that (v) the Annual
Base Rent during the Extended Term shall be equal to the Prevailing Base Rental
Rate (as defined herein) set forth in Landlord's Rental Notice or by the number
of rentable square feet in the Premises, (x) Tenant shall receive the benefit of
the Prevailing Rental Concessions (as defined herein), if any, set forth in
Landlord's Rental Notice, (y) Tenant shall pay Additional Rent in the manner set
forth in this Lease, and (z) this Lease shall be modified to incorporate any
Other Prevailing Rental Terms (as defined herein) set forth in Landlord's Rental
Notice; PROVIDED, HOWEVER in no event shall the Annual Base Rent after
adjustment for Prevailing Rental Concessions during the Extended Term be LESS
than the Base Rent per square foot of Net Rentable Area on the Termination Date.
d) Landlord and Tenant shall enter into a written supplement to this
Lease confirming the terms, conditions and provisions applicable during the
Extended Term as determined in accordance with the provisions of this Section.
If Tenant fails to timely exercise its option to extend the Term for the
Extended Term, then this Lease shall expire by its terms on the expiration of
the Term.
e) For purposes of this Lease, the "Prevailing Rental" shall be the
rental for comparable space located near the Honolulu airport, determined by
Landlord, taking into consideration the class of building, size, location,
zoning and degree of improvements included in the space in question and for the
length of term comparable to the term of the lease in question. The Prevailing
Rental shall consist of an annual base rental rate per rentable square foot
("Prevailing Base Rental Rate") and shall include or take into account the
following rental related terms: (i) rent concessions such as rental abatements,
construction allowances and other concessions ("Prevailing Rental Concessions"),
(ii) periodic adjustments or additions to a fixed annual rent based on a share
of taxes and Operating Expenses and (iii) periodic increases in rent and other
then prevailing rental related terms, conditions and components of rent ("Other
Prevailing Rental Terms").
f) If Landlord or Tenant desires to invoke the appraisal procedure
set forth in this Section, the party invoking the appraisal procedure shall give
a notice ("Appraisal Notice") to the other party, stating that the party sending
the Appraisal Notice desires to meet within fourteen (14) days to attempt to
agree on a single appraiser to determine the Base Market Rent. The appraiser (i)
shall be MAI
EXHIBIT E - Page 2
certified, (ii) shall have a minimum of five (5) years experience in the City of
Honolulu in real estate leasing or appraisal of leases in office and warehouse
buildings in Honolulu, and (iii) shall not have conducted within the previous
three years and shall not be presently conducting a material amount of business
with either Landlord or Tenant or their affiliates or otherwise have a financial
interest in or with either Landlord or Tenant or their affiliates and shall be
otherwise independent ("Appraiser Qualifications"). If Tenant and Landlord are
unable to agree upon a single appraiser within fifteen(15) days of the giving of
the Appraisal Notice, then Landlord and Tenant shall draw by lot to determine
which of them ("First Party") shall within the following seven (7) days provide
the other ("Second Party") with the names and qualifications of five appraisers
who are acceptable to the First Party and who meet the Appraiser Qualifications.
Such list shall be accompanied by a statement of all business conducted by each
such proposed appraiser with the First Party within the previous three years.
The Second Party within seven (7) days thereafter shall select one of the five
appraisers and shall notify the First Party in writing of its selection. The
appraiser so selected shall be the appraiser hereunder. The parties shall share
equally the cost of the appraiser.
Within ten (10) days following the selection of the appraiser,
Landlord and Tenant shall each notify the other (but not the appraiser) of their
determination of the Prevailing Rental for the applicable Extended Term. During
the next seven (7) days following said 10-day period, both Landlord and Tenant
shall prepare a written critique of the other's determination and on the seventh
day, Landlord's and Tenant's determinations (as originally submitted to the
other party, with any modification or additions whatsoever permitted) and
Landlord's and Tenant's critique shall be submitted to the appraiser. Within
fifteen (15) days thereafter, the appraiser shall decide in writing whether
Landlord's or Tenant's determination of the Prevailing Rental is more correct
and shall state in detail the reasons therefor. The appraiser shall be empowered
to choose only the Landlord's or the Tenant's determinations, and shall reach no
other or compromise decision. The appraiser's decision shall be final,
conclusive and binding on Landlord and Tenant.
g) Except as set forth in this Section, Landlord shall have no
obligation to extend or renew this Lease, or to enter into another lease of the
Premises with Tenant upon expiration of this Lease. Upon expiration of this
Lease, or if this Lease is extended, the Extended Term, Landlord may lease the
Premises to whomever it chooses for the operation therein of a business that is
the same as or different from that operated by Tenant in the Premises.
10. BROKERAGE COMMISSIONS. Landlord entered into an exclusive
listing agreement for the Project with CB Commercial Real Estate of Hawaii, Inc.
and will pay all commission to CB Commercial in accordance with the terms
thereof resulting from this Lease.
LANDLORD:
PAIEA PROPERTIES, a Hawaii limited partnership
By: NIMITZ-PAIEA, INC., its general partner
By: /s/ T. Gregory Kemp
-----------------------------------------------
T. Gregory Kemp
Its Vice President
TENANT:
NATIONAL TELEPHONE & COMMUNICATIONS, INC., a
Nevada corporation
By: /s/ Ed Jacobs
-----------------------------------------------
Its President
------------------------------------------
By:
-----------------------------------------------
Its
------------------------------------------
EXHIBIT E - Page 3
EXHIBIT F
IMPROVEMENT SPECIFICATIONS
All Improvements shall be installed in the Premises by Tenant at the
expense of Tenant. All construction drawings detailing the improvements to be
install in the Premises by Tenant shall be approved by Landlord in writing and
the final construction draws thereof shall be attached to this Exhibit F and by
this reference incorporated herein ("Construction Plans").
Tenant may wish to install a satellite communications dish on a portion
of the Building or Project that is outside of the area of Tenant's Premises.
Tenant shall provide full plans relating to such equipment and the preferred
location for the installation of same and such other detail as may be requested
by Landlord. Landlord shall provide its reasonable approval of such satellite
communications dish specifically subject to the requirements of any building
codes, the rights of all other tenants in the Project and the favorable
appearance and/or screening of same.
EXHIBIT F - Page 1
EXHIBIT G
ALLOCATIONS OF OPERATING EXPENSES
AND TENANT'S PROPORTIONATE SHARE
The schedules attached hereto set forth the Net Usable Area as defined
in Section 2.08, the Net Rentable Area, the current year Operating Expense
budget in accordance with Section 2.09 and Tenant's Proportionate Share as
defined in Section 2.16.
EXHIBIT G - Page 1
EXHIBIT H
LOCATION OF PARKING AREA
EXHIBIT H - Page 1