Revised Standard Lease

AIRPORT TRADE CENTER
550 PAIEA STREET, HONOLULU, HAWAII 96819


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REVISED STANDARD LEASE
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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


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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


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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


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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


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(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


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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.


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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 ...