LEASE BETWEEN REGISTRANT AND BISHOP STREET ASSOC.

Exhibit 10.10









BISHOP STREET ASSOCIATES





DIGITAL ISLAND, INC.



TABLE OF CONTENTS



SECTION DESCRIPTION NUMBER

------- ----------- ------



1. Premises and Basic Lease Information............. 1

2. Term............................................. 3

3. Base Rent; Adjustments; General Rent Provisions.. 3

4. Additional Rent.................................. 3

5. Security Deposit................................. 5

6. Restrictions on Use; Compliance with Laws........ 6

7. Improvements and Alterations..................... 6

8. Repairs and Maintenance.......................... 7

9. Lien............................................. 7

10. Assignment and Subletting........................ 8

11. Waiver; Indemnity................................ 9

12. Insurance........................................ 10

13. Service and Utilities............................ 11

14. Estoppel Certificate............................. 12

15. Holding Over 20.................................. 12

16. Subordination; Requirements of Lenders........... 13

17. Observance of Rules and Regulations.............. 13

18. Access by Landlord............................... 13

19. Default by Tenant................................ 14

20. Remedies of Landlord............................. 14

21. Default by Landlord; Limitation of Liability..... 17

22. Damage and Destruction........................... 17

23. Eminent Domain................................... 18





TABLE OF CONTENTS



SECTION DESCRIPTION NUMBER - ------- ----------- ------



24. Sale by Landlord........... 18

25. Surrender of Premises...... 18

26. Quiet Enjoyment............ 18

27. Notices.................... 19

28. Personal Property Taxes.... 19

29. Interest and Late Charges.. 19

30. Successors and Assigns..... 20

31. Attorney's Fees............ 20

32. Light and Air.............. 20

33. Signs and Directory........ 20

34. Parking.................... 20

35. Brokers.................... 21

36. Relocation Right........... 21

37. Authority.................. 21

38. Miscellaneous.............. 21

39. Rules and Regulations...... 23

40. Door Sign Rules............ 26





ADDENDUM TO LEASE



Exhibit "A"....... Outline of Premises

Exhibit "B"....... Work Agreement

Exhibit "C"....... Form of Notice of Lease Term Dates

Exhibit "D"....... Form of Estoppel Agreement





THIS LEASE ("Lease") is made as of ,1996, by and between Bishop Street

----- Associates, a Hawaii Limited Partnership ("Landlord") and DIGITAL ISLAND, INC., a California corporation (the "Tenant") upon the following terms and conditions:



1. Premises and Basic Lease Information



1.1 Landlord hereby leases to Tenant and Tenant hereby leases from

Landlord, upon the terms and conditions set forth in this Lease, those

certain premises (the "Premises") described in Section 1.1.1 of the Basic

Lease Information (as defined below) and outlined in Exhibit "A" attached

hereto and hereby made a part hereof. For purposes of this Lease, the

rentable area. of the Premises has been determined by Landlord's space

planner or architect by reference to the "Standard Method for Measuring

Floor Area in Office Buildings," adopted by the Building Owners and

Managers Association International and approved by the American National

Standards Institute, Inc., August 1990 reprint. The Premises are situated

in that certain office building (the "Building") located at 1132 Bishop

Street, Honolulu, Hawaii. The land upon which the Building is located (the

"Land"), together with the Building and related facilities and

appurtenances, including, but not limited to, the area adjacent to the

Building known as "Union Mall", shall hereinafter be collectively referred

to as the "Project." The terms and conditions of this Lease shall include,

without limitation, the following basic Lease information (the "Basic

Lease Information"):



1.1.1 Premises (Section 1.1): Suite 1001 on floor ten (10) of the

Building, consisting of approximately 2,588 rentable square feet and

approximately 2,270 usable square feet.



1.1.2 Term (Section 2): Five (5) years, to commence on November 1, 1996, and to expire on October 31, 2001.



1.1.3 Base Rent (Section 3.1): In the following amounts:



Period Rate Total Amount

------ ---- ------------



11/01/96 through $0.00 $0.00 per month

04/30/97



05/01/97 through $1.00 per rentable square foot $2,588.00 per month

10/31/01 per month





1.1.4 Additional Rent (Section 4.1): Equal to Tenant's Percentage Share (Section 1.1.6) of Operating Costs (Section 4.8).



1.1.5 Rentable Square Footage of the Building: 450,000 square feet.



1.1.6 Tenant's Percentage Share (Section 4.1): 0.575%, which was

computed by dividing the rentable area of the Premises described in

Section 1.1.1 by the rentable area of the Building.



1.1.7 Security Deposit (Section 5): One (1) month's gross rent

($5,256.84), subject to adjustment as provided herein. Gross rent

shall be equal to the sum of (i) Base Rent, plus (ii) Additional Rent

equal to Tenant's Percentage Share of Operating Costs, plus (iii)

State of Hawaii general excise tax on such Base Rent and Additional

Rent at the rate of 0.04166. Notwithstanding Section 5, such deposit

shall be increased from time to time to correspond to any increase in

Base Rent, Additional Rent and/or general excise tax.



1.1.8 Permitted Use (Section 6.1): General office use and as an office

to market digital communication.

1.1.9 Minimum Limits for Commercial General Liability Insurance:

$1,000,000.00 per occurrence and $1,000,000.00 aggregate for bodily

injury, death and property damage, including liquor liability if

liquor is sold; $1,000,000.00 fire legal liability to value coverage

(section 12.1.1).



1.1.10 For notices to Tenant:

DIGITAL ISLAND, INC.

1132 Bishop Street, Suite 1001

Honolulu, Hawaii 96813

Attention: Ron Higgins

Telephone No.:(808)____________



1.1.11 (Intentionally Omitted.)



1.1.12 Parking Rights (Section 34): Two (2) automobiles in unassigned

parking stalls, at an initial rate of $150.00 per month per automobile

with adjustment pursuant to Section 34, together with State of Hawaii

general excise taxes thereon as provided herein.



1.1.13 Interest and Late Charges (Section 29): Interest rate on unpaid

amount(s) equal to the rate which is the lesser of (a) one percent

(1%) per month, or (b) the maximum rate permitted by law; late charge

office percent (5%) of unpaid amount.



1.1.14 Tenant's Broker (Section 3:5): Monroe & Friedlander, Inc.



1.1.15 Tenant's Broker (Section 35): Monroe & Friedlander, Inc.



1.1.16 Landlord's Construction Representative (Exhibit "B"): The Harris



1.1.17 Tenant's Construction Representative (Exhibit "B"): Ron Higgins



1.1.18 Guarantor (if any): None



1.1.19 Additional provisions: See Addendum to Lease.



Each reference in this Lease to any of the Basic Lease Information shall be construed to incorporate, in addition to the Basic Lease Information set forth above, the terms and conditions set forth in the particular Lease section in which such reference is made.



1.2 The term "common areas" as used in this Lease shall mean all areas and

facilities around the Premises and within the exterior boundaries of the

Project which are provided and designated from time to time by Landlord

for the general use and convenience of Tenant and other tenants of the

Building and their respective employees and invitees. Common areas

include, without limitation, the lobby area, walk-ways, parking

facilities, arcades, landscaped areas, sidewalks, service quarters,

hallways, corridors, restrooms (if not part of the Premises), stairways,

elevators (except elevators which may be reserved for the exclusive use of

one or more tenants), walls, fire stairs, telephone and electrical

closets, aisles, truck docks, plazas, service areas, lobbies and all other

common service areas of the Land and Building or any other area of the

Project intended for such use. Floors wholly occupied by Tenant shall not

have any facilities which would be used in common with other tenants,

except for fire stairs, shafts and similar installations. Tenant, its

employees and invitees, shall have the nonexclusive right to use the

common areas along with others entitled to use the same, subject to

Landlord's rights and duties as hereinafter set forth. Without Tenant's

consent and without liability to Tenant, Landlord shall have the right to

do the following:



1.2.1 Establish and enforce reasonable rules and regulations concerning

the maintenance, management, use and operation of the common areas;





1.2.2 Temporarily close any of the common areas for maintenance,

alternation or improvement purposes;



1.2.3 Select, appoint and/or contract with any person for the purpose

of operating and maintaining the common areas; and



1.2.4 Change the size, use, shape or nature of any of the common areas.

Landlord shall use reasonable efforts to minimize any interference

with Tenant's use and access of the Premises resulting from Landlord's

exercise of such rights.



2. Term



The term of this Lease shall commence upon the later of the following dates (the "Commencement Date"): (i) the scheduled Commencement Date specified in Section 1.1.2 of the Basic Lease Information, or (b) the date that Landlord tenders possession to Tenant, provided that any work to be performed by Landlord pursuant to the Work Agreement attached to this Lease as Exhibit "B" is substantially completed, as determined by Landlord's space planner or architect, or would have been so substantially completed but for any delay caused by any occurrence within the control of Tenant or its agents, employees or contractors. Such term shall continue until the expiration date specified in said Section 1.1.2, unless sooner terminated pursuant to any provision hereof.



This Lease shall not be void or voidable, nor shall Landlord be subject to any liability as a result of any delay in the Commencement Date for any reason, except that if the delay has resulted from actions of Landlord (not caused by delays of Tenant) rent shall not commence until the Premises are available for occupancy by Tenant with all work to be performed by Landlord substantially completed. The parties hereto shall execute a written statement, substantially in the form attached hereto as Exhibit "C" and hereby made a part hereof, setting forth the Commencement Date and the date of expiration of this Lease, promptly after same have been ascertained, but the enforceability of this Lease shall not be affected should either party fail or refuse to execute such statement. If permission is given to Tenant, in Landlord's sole discretion, to enter or occupy the Premises prior to the Commencement Date, such early entrance or occupancy shall be subject to all the terms of such permission and all the provisions of this Lease which could be reasonably and logically construed as applying thereto, and Tenant shall not in any way interfere with or delay any of Landlord's work to be performed in the Premises from being substantially completed or otherwise cause additional cost or expense to Landlord.



3. Base Rent; Adjustments; General Rent Provisions.



3.1 Tenant shall pay to Landlord as base rent ("Base Rent") for the

Premises, without prior notice or demand, throughout the term of this

Lease, the amount so specified in Section 1.1.3 of the Basic Lease

Information (subject to any increase provided herein), in advance, on or

before the first day of each and every calendar month during the term

hereof, except that Base Rent for the first full month for which Base Rent

shall be payable hereunder shall be paid upon the execution hereof.



3.2 (Intentionally Deleted.)



3.3. Base Rent and any other rent (except for parking rental) due under

this Lease for any period during the term hereof which is for less than

one (1) month shall be a pro rata portion of the monthly amount due, based

upon a thirty (30) day month. Rent and all other amounts due to Landlord

shall be paid to Landlord, without deduction, offset or abatement, at

Landlord's address as specified in Section 27 below or to such other firm

or at such other place as Landlord may from time to time designate in

writing. Landlord shall have the right to accept all rent and other

payments, whether full or partial, and to negotiate checks in payment

thereof without any waiver of rights, irrespective of any conditions to

the contrary sought to be imposed by Tenant. Rent hereunder shall be

deemed paid to Landlord when received by Landlord, or its designee, at

Landlord's address or at such other address as Landlord shall have



4. Additional Rent



4.1 Commencing with the calendar year in which the term hereof commences

and during each succeeding calendar year (or portion thereof) of the lease

term, Tenant shall pay as additional rent ("Additional Rent") in addition

to and at the time provided





for payment of Base Rent an amount equal to Tenant's Percentage Share of

the estimated Operating Costs of the Project for the then current calendar

year as specified in Section 1.1.6 of the Basic Lease Information.



4.2 Prior to the end of each calendar year, Landlord shall furnish to

Tenant a written statement or statements showing in reasonable detail

Landlord's estimate of Operating Costs for the immediately succeeding

calendar year and the amount of any Additional Rent payable by Tenant,

appropriately prorated on a monthly basis. Thereafter, Tenant shall pay

monthly as Additional Rent hereunder the amount set forth in such

estimated Additional Rent statement from Landlord. Neither Landlord's

failure to deliver, nor the late delivery of, such statement or statements

shall constitute a default by Landlord hereunder or a waiver of Landlord's

right to any estimated or actual Additional Rent.



4.3 Within one hundred twenty (120) days following the close of each

calendar year, Landlord shall furnish to Tenant a written statement of

reconciliation (the ("Reconciliation") showing in reasonable detail

Landlord's actual Operating Costs for the relevant calendar year, together

with a statement of any adjustments necessary to reconcile any sums paid

by Tenant hereunder as estimated Additional Rent during such calendar year

with those sums actually payable and due hereunder for such calendar year

as set forth in the Reconciliation. If the Reconciliation shows that

additional sums are due from Tenant hereunder, Tenant shall pay such sums

to Landlord within ten (10) days after receipt of the Reconciliation. If

the Reconciliation shows that an overpayment has been made by Tenant with

respect to Additional Rent, such overpayment shall be refunded to Tenant

within thirty (30) days after Tenant's receipt of the Reconciliation. In

the event this Lease has expired or been terminated prior to the end of a

calendar year, the party's obligation to reconcile shall survive such

expiration or termination. Landlord's failure to deliver the

Reconciliation to Tenant as provided herein shall not constitute a default

by Landlord hereunder nor operate as a waiver of Landlord's right to

collect all Additional Rent and other sums due hereunder. Where only a

portion of a calendar year falls within the term hereof, Landlord shall

calculate estimated (or actual, as the ease may be) Additional Rent based

upon a reasonable proration of estimated (or actual) Operating Costs for

such calendar year.



4.4 Landlord may divide the statements referred to above into separate

statement(s) for Tax Costs (as defined in Section 4.6 below) and Building

Operating Costs (as defined in Section 4.7 below). Additionally, Landlord

may estimate and measure Tax Costs or Building Operating Costs or both, on

a fiscal year instead of a calendar year basis, and in such event any and

all references in this Section 4 to calendar year shall be deemed to refer

to such fiscal year.



4.5 Notwithstanding anything to the contrary contained herein, under no

circumstances shall the provisions of this Section 4 cause Base Rent to be

reduced. Any reference to Landlord's "actual" Operating Costs in this

Section 4 shall be deemed to include an allowance for any adjustment to

reflect the level of occupancy of the Building to the extent provided for



4.6 "Tax Costs" shall mean the sum of the following: any and all real

property taxes, assessments (including, but not limited to, general and

special assessments) charges, surcharges, license and other fees, levies,

cost of improvement bonds, penalties, and any and all other taxes (other

than income, franchise and estate or gift taxes of Landlord) on or

relating to all or a portion of the Project (as it may exist from time to

time) including, but not limited to walkways, parking facilities, common

areas, landscaped areas, fountains and art works or any legal or equitable

interest of Landlord therein which may be imposed, levied, assessed or

charged for any reason by any authority having the direct or indirect

power to tax including, but not limited to, the United States or the

state, county or city in which the Building is located, or any other local

governmental authority, agency, district or political subdivision thereof,

together With personal property taxes, assessments, fees and charges

(other than those paid by Tenant pursuant to Section 28 below), fees of

tax consultants and attorneys retained to seek a reduction, to contest or

to act in some other manner in connection with any of the foregoing Tax

Costs, together with any tax, assessment or other amount (including,

without limitation, commercial rental taxes) imposed, levied or charged as

a substitute for or a supplement to the foregoing. If, for any calendar

year subsequent to the year in which the Commencement Date occurs, the

assessed valuation or Tax Costs of the Building shall not be based upon a

completed building at least ninety-five percent (95%) occupied, then for

the purpose of computing Additional Rent due hereunder Tax Costs actually

incurred during such calendar year shall be increased to reflect the

amounts which would have been payable if the Building had been completed

and was ninety-five percent (95%) occupied. Tax Costs for each tax year

shall be appropriately prorated to determine the Tax Costs for the subject

calendar year.



4.7 "Building Operating Costs" shall mean the sum of the following: any and

all costs, expenses and disbursements paid or incurred by landlord in

connection with the management, operation, security, maintenance, and

repair of the Project (as it may

exist from time to time) including, but not limited to, salaries, wages,

benefits and related costs for employees, management fees, either as

charged to Landlord by outside management companies or an amount not

exceeding the amount typically charged by outside management companies if

Landlord manages the Building itself, together with the rental value of

space occupied as the Project management office and any building operating

costs (including, but not limited to, real property taxes, utilities, and

insurance) attributed to such space occupied as the project management

office; charges for utilities and services (including any taxes thereon);

the cost of insurance; the cost of building cleaning supplies and

materials; ground rent; and a reasonable allowance for depreciation (or

amortization) with respect to machinery and equipment and other capital

expenditures and improvements; provided, however, that the only

depreciation (or amortization and expenditures) includable in Building

Operating Costs shall be a reasonable allowance for depreciation (or

amortization) on (a) items intended to result in cost savings, (b) common

area interior floor and wall coverings and resurfacing and common area

window treatments, and (c) Required Alterations (as defined below). If,

during any calendar year subsequent to the year in which the Commencement

Date occurred, the Building is less than ninety-five percent (95%)

occupied, then for the purpose of computing Additional Rent due hereunder

Building Operating Costs actually incurred during such calendar year shall

be increased to reflect the amounts which would have been payable if the

Building had been ninety five percent (95%) occupied.



Without limiting the generality of the foregoing, and notwithstanding any contrary provision herein, if at any time Landlord is required by any rule, regulation or law, to make any changes, alterations or improvements to the common area or the Building, the Premises, or any other portion of the Project (including, but not limited to, electrical, mechanical, water sprinkler, or other systems or components) ("Required Alterations") (but excluding Required Alterations attributable exclusively to Tenant's specific use and occupancy of the Premises, which alterations shall be Tenant's sole responsibility), all costs relating to such Required Alterations (including, but not limited to, all planning, legal, architectural, engineering, construction, financing and other costs) shall be fully included in Building Operating Costs in the year in which such charges accrue, or in such year as Landlord pays such charges, as Landlord shall elect. If under generally accepted accounting principles a portion of costs relating to Required Alterations should be allocated to capital improvements, to be depreciated or amortized over two (2) or more years, Landlord shall be entitled each year to include in Building Operating Costs a reasonable allowance for depreciation (or amortization) with respect thereto. The capital costs described herein shall include all costs relating to the financing of any Required Alterations or other capital investment items. If Landlord internally finances any such capital costs, interest shall be added to such costs at an annual rate reasonably determined by Landlord.



4.8 "Operating Costs" shall mean the aggregate of Tax Costs and Building

Operating Costs.



4.9 In addition to any other items payable by Tenant to Landlord under this

Lease, Tenant shall pay not less than ten (10) days after written notice

from Landlord, as Additional Rent, any conveyance tax imposed by the

State of Hawaii in connection with this Lease and shall at Landlord's

request execute such affidavits and other documentation as may be

necessary or proper in connection therewith.



4.10 Tenant will also pay to Landlord, as Additional Rent, at the time

and together with each payment of Base Rent, Additional Rent or other

charge required hereunder by Tenant to Landlord which is subject to the

State of Hawaii general excise tax on gross income, any sales or value

added taxes under any successor, similar or new federal, state or county

law which may be hereafter enacted, on account of the receipt, actual or

constructive, by Landlord of the rental payments, reimbursement of gross

income taxes, any other taxable gross income attributable to the Premises

or this Lease, an amount which, when added to Base Rent, Additional Rent

or other charge (whether actually or constructively received by

Landlord), shall yield to Landlord, after deduction of all such taxes

payable by Landlord with respect thereto, an amount equal to that which

Landlord would have realized therefrom had no such taxes been imposed.

For purpose of illustration only, the amount of such tax is presently

four percent (4%), resulting in a figure to be divided into Base Rent,

Additional Rent and other amounts payable by Tenant hereunder ...