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HomeMy WebLinkAboutCOM 0740.001 2002-2004 NiV Or h~ j'^ ~~~IJiV. Harry Kim Mayor _ Barbara Bell art OF•N•~N Nelson Ho Deputy Director C~nixtl#'>~r >z~ ~Mfurzit DEPARTMENT OF ENVIRONMENTAL MANAGEMENT 25 Aupuni Street, Room 210 • Hilo, Hawari 96720-4252 (808) 961-8053 • Fax (SOS) 961-8086 _ - f September 29, 2004 The Honorable James Y. Arakaki, Chairman And Members of the Hawaii County Council - 25 Aupuni Street Hilo, HI 96720 Subject: Resolution 230-04 Authorizing the Extension of the Public Sewer Along Makaala Street for Home Depot USA Dear Chairman Arakaki and Members of the Council: Enclosed is additional information that was requested by Council at the September 14, 2004 Parks and Enviromnental Management Committee meeting. • According to Mr. Harold Sugiyama, the application for extension and construction plans, as noted in the first clause of the resolution, were submitted to the Legislative Auditor's Office prior to the September 14th meeting and have been forwarded to the County Clerk's Office. • County of Hawai' i-DHHL Memorandum of Agreement dated December 2Q 2002. • State of Hawaii Department of Hawaiian Home Lands General Lease No. 260 between State of Hawaii and Home Depot U.S.A., Inc. • May 7, 2004 correspondence from the Planning Department to M&E Pacific, Inc. granting tentative approval. Item 3) addresses wastewater conditions that must be met before final approval is granted. • May 18, 2004 correspondence from Mr. Micah A. Kane, Chairman of Hawaiian Homes Commission, to the Planning Department with the intent to satisfy condition 3 in the May 7, 2004 Tentative Approval letter. Comm. No. ~ ~O'' Ref. To: Pr°seote I/uwai ~i County is an equa[appor[unilyprovir/er and employer. Ref, Dote ~,I (1 7~~ • May 25, 2004 Permit to Work Within the County Right-of--Way form approved by Department of Public Works May 25, 2004. I hope this information is sufScient to address your concerns. I recommend approval of the subject resolution. If you have questions, please contact Mr. Harold Sugiyama, M&E Pacific, Inc., at 961-2776 or Mr. Nelson Ho, Department of Environmental Management Deputy Director at 961-8083. l~«~~ Barbara Bell DIRECTOR enclosures cc: Harold Sugiyama, M&E Pacific, Inc. Nelson Ho, Deputy Director Peter Boucher, Wastewater Division Chief N' 9Sy ' LINDA ~mcLe coYEarvoa ` ! . RAYNABO C. SOON STAT£OF HAWAII CHAptMAN HAWAIIAN HOA¢S COh0.115S10N A~ ~YO•p]d:5.i~ STATE OF HAWAII DEPARTMENT OF HAWAIIAN HOME LANDS P.O. BOX 18'!9 HONOLOLQ, HAWAII 96805 December 20, 2002 The Honorable Harry Kim, Mayor County of Hawaii 25 Aupuni Street Hilo, Hawaii 96720 Dear Mayor Kim: Subject: County of Hawaii-DHHL Memorandum of Agreement We are transmitting for your review and execution two (2) copies of the Memorandum of Agreement (MOA) between the County of Hawaii and the Department of Hawaiian Home Lands (DHHL). After you have signed the two copies of the MOA, please retain one copy for your files and return the other to our Office. Let me again express my mahalo and appreciation to you and the members of your Cabinet for the support and cooperation provided throughout this process. The MOA is a historic document, and I believe that DHHL and the County can look forward to a strong and positive working relationship in the years ahead that will benefit the many Hawaiian families living in our homestead communities. Thank you also for your kind and gracious comments before the County Council. It has truly been an honor and a pleasure working with you. Alo~, ~ i I Ra nard~C Soon, Chairman ~7 Ha aiia omes Commission ~ _ , Enc. ~ ~~S1D~~~'~t-~ ~j Memorandum of Agreement Between the County of Hawaii and the Department of Hawaiian Home Lands I. Purpose The purpose of this Memorandum of Agreement (MOA) is to clarify the respective roles, responsibilities, and obligations of the County of Hawaii (County) and the Department of Hawaiian Home Lands (DHHL) relating to land use planning, infrastructure maintenance, enforcement of laws, and collection of taxes and other fees on Hawaiian home lands. IL Guiding Principles The following general principles have guided the development of this MOA: A. The Hawaiian Homes Commission is responsible for determining land use on Hawaiian home lands. The County may not use its land use and zoning powers to prevent the Hawaiian Homes Commission from controlling the use of Hawaiian home lands. B. The County and DHHL share common goals in planning for the use of Hawaiian home lands: both support the orderly development of those lands for the benefit of native Hawaiians and both are committed to the integration of planning by DHHL and Hawaii County. C. The County should manage and maintain all infrastructure built to County standards D. The County is authorized to enforce criminal laws and applicable County ordinances and regulations on Hawaiian home lands. E. Hawaiian homestead lessees are residents of the County of Hawaii and should be treated in a manner consistent with all other residents of the County. F. Hawaiian homestead lessees should pay all taxes and fees required by law. G. The County and DHHL acknowledge that there are areas where agreement will not be reached, and agree to continue to work together toward a mutually acceptable resolution of such issues. HL Relating to Planning and Land Use A. DHHL will implement its Planning System which includes plans with DHHL land use designations such as the Hawaii Island Plan, various Development and Subdivision Plans, and Homestead Community Plans. In the formulation, updating, and amendment of these plans, DHHL will consult with the relevant County departments, and shall give due consideration and weight to their COH/DHHL Memorandum of Agreement Page 2 comments, and to the Hawaii County General Plan, and other officially adopted plans such as Community Development Plans. All land uses on DHHL property will be placed according to the applicable DHHL plans. B. The County will consult with DHHL over the appropriate designations of DHHL property in the Hawaii County General Plan LUPAG maps, and shall give due weight and consideration to the comments of DHHL, and to officially adopted DHHL plans. C. Based on its plans and DHHL land use designations, DHHL will determine the appropriate County zoning districts that shall apply to the property in question. DHHL will communicate these zoning districts to the County. D. All normal land use controls will be applied by Hawaii County to DHHL property according to the zoning district selected by DHHL. Except as specifically provided in the Agreement, DHHL will follow all normal land use procedures, regulations, and standards applicable to the zoning district. E. All land use permit applications on Hawaiian home lands must be accompanied by written consent from DHHL before the County can begin processing those applications. F. The standards of the various zoning districts selected will apply to DHHL property. DHHL and its lessees will go through normal County administrative variance procedures if they seek exemptions from standards. G. For uses allowed in the various zoning districts that require special permits or use permits, DHHL and its lessees will go through the applicable County permit procedures. At some time in the future, DHHL may implement its own use permit procedure for Hawaiian home lands. If DHHL grants use permits, it will be responsible for enforcing violations of those permits. The County will be notified when DHHL has formulated its use permit system. H. The County will advise DHHL of all violations by its lessees. The County will enforce land use codes and regulations on Hawaiian home lands in the same manner as with other landowners. DHHL will cooperate with the County in enforcing the terms of its ]eases requiring conformity to applicable laws and regulations, if requested by the County. Ongoing violations and failure to comply will be referred to DHHL after the County has exhausted all remedies short of pursuing legal action to address the violation_ DHHL may institute lease enforcement proceedings in advance of, or in lien of, County enforcement actions. COH/DHHL Memorandum of Agreement Page 3 IV. Relatine to Public Facilities and Infrastructure Servine Hawaiian Home Lands A. In the development of future projects, DHHL will construct public facilities in accordance with County standards. Where departures from County standards are desired, DHHL will pursue exemptions and other administrative variances from the appropriate County department, in accordance with procedures established for all property owners. Should DHHL choose not to construct infrastructure in accordance with County standards, the County may view such improvements as private facilities for repair and maintenance purposes. B. The County will accept operation, repair, and maintenance of all future DHHL infrastructure constructed according to County standards. C. Existing infrastructure shall be subject to County inspection prior to being accepted by the County for operation, repair, and maintenance. The County may require DHHL to repair any damage such as leaks, holes, sags, or deterioration affecting the operation of the existing infrastructure, identified as a result of the inspection. D. In the case of existing infrastructure that is not constructed to County standards, the County and DHHL will work to establish minimum standards for residential, agricultural, and pastoral subdivisions. Existing projects will be evaluated based on these new standards. The County may require DHHL to upgrade the infrastructure to the minimum standard prior to being accepted by the County for operations, repair, and maintenance. E. The County will maintain infrastructure according to its own standards, resources and schedules. Any decisions as to upgrades or rehabilitation will be at the County's discretion. F. Should DHHL elect to convert its land to a more intensive land use, DHHL will be responsible for upgrading the onsite infrastructure to accommodate the new use, and will consult with the County regarding the need to upgrade offsite infrastructure. DHHL and the County shall negotiate the extent to which DHHL will be responsible for any such offsite improvements requested by the County. DHHL shall be responsible for project-related offsite improvements to the extent that these would be required of other developers with similar projects. If offsite improvements benefit other property, DHHL and the County shall cooperate so that DHHL bears only its fair share of these improvement costs. G. The County will treat DHHL lessees in the same manner as other property owners with respect to conformity with laws, ordinances, and regulations. The County will advise DHHL of violations, and will refer cases of ongoing violation to DHHL after the County has exhausted all remedies short of pursuing legal action COHIDHHL Memorandum of Agreement Page 4 to address the violation. DHHL reserves the right to institute lease enforcement proceedings in advance of, or in lieu of, County enforcement actions. V. Relatin¢ to the Enforcement of Criminal Violations on Hawaiian Home Lands A. The County is authorized to and will enforce violations of criminal law on Hawaiian home lands. B. County law enforcement agencies and DHHL will work to establish procedures regarding sharing information and providing testimony relating to arrests made on Hawaiian home lands needed for contested case hearings and other administrative and/or judicial proceedings. VI. Relative to Real Property Taxes A. Homestead lessees on Hawaiian home lands are responsible for the payment of real property taxes in accordance with the Hawaiian Homes Commission Act, 1920, as amended, and applicable County ordinances. B. The County agrees to waive the penalty and interest on all delinquent real property taxes owed by Hawaiian homestead lessees as of December 31, 2001. Such waiver will apply to payments made by February 20, 2002, or to payments advanced by DHHL pursuant to paragraph C. C. For those homestead lessees with real property tax balances, excluding penalty and interest, of more than $500, if payment is not made by February 20, 2002, DHHL will advance full payment of all real property taxes, excluding penalty and interest, to bring those bills current, within 60 days of receipt of an updated real property tax listing. This date may be extended by mutual agreement of the parties. D. It is understood that the County's waiver of interest and penalty charges on delinquent real property taxes owed by homestead lessees as of December 31, 2001, and DHHL's advance of full payment of real property taxes, excluding interest and penalty, in accordance with paragraph C, is a one-time only offer. E. In order to alleviate or reduce further delinquencies, the County will notify DHHL on an annual basis of any delinquent property owners. F. The parties will continue to meet on an annual basis to evaluate the extent of delinquencies by Hawaiian homestead lessees on the Island of Hawaii and take action, if necessary, to keep delinquencies from recurring. COH/DHHL Memorandum of Agreement Page 5 G. The County and DHHL shall work to establish a customer trust fund by July I, 2004 to collect real property tax payments as part of the mortgage/loan payments in order to make smaller, regular payments. VII. Areas for Further Collaboration The parties agree to work further on the following issues: A. The creation of new County zoning districts for farming and pastoral activities. B. The development of infrastructure standards for rural land uses such as agricultural and pastoral activities. C. The establishment of procedures for sharing evidence, information, and testimony involving criminal violations on Hawaiian home lands. D. The implementation of actions to prevent and/or address future real property tax delinquencies by Hawaiian homestead lessees. VIII. Termination To achieve the objectives of this MOA, either party may, by mutual agreement in writing, further clarify or waive any term or condition of this agreement, provided such action does not violate any statutes, ordinances, or binding rules or regulations. DHHL and the County reserve the right to terminate this MOA upon one hundred eighty (180) days notice in writing to the other party. In agreement thereof, the parties have entered into this Memorandum of Agreement on this day of , 2002. COUNTY OF HAWAII DEPARTMENT OF HAWAIIAN HOME LANDS i~ Harry K fayor R nard'C. oon, Chairman H waiia mes Commission APPROVED AS TO FORM: _ _ ~ / ~ Corporation Counsel j D puty Attorney General -6 F11 22: Gc x695246^a6 NI&E P,^,CL~iG, IMG. P~„C--~ 621 E'4 /Dd 19LD YL F~~i dao ea5 x934 M&E Pac1P'_c, Inc.-3110 tea, bIEP_4C-1=as. l!~' 001 y,V, / ~f Hazry iriim Chzz$topher d. Yven ~~ia: npisr_~r a''~`i'...~°p i~~ ep Roy R, Ta~,%mo2o F/~~~,.~ a~DVp'Dlrv!cmr erJ.Ifl~Y3Yi~? gri _'rit~~3~*Z May 7, 200a P~,AN?V~Psr~ bEPAPb~'1b~Hd+',N'I' 101 Pnvnhi Sleet, Suiie 3 - ?~Iu, FIawaii 9672p-,pd~ (808)96I-81.Sfi ~ Fa;(SOS)96I.8742 George S. Yoshimura, LPLS M&E Pacific, Inc. 100 Pauahi Street, Suite 208 Hilo, HI 9.6720 Dear Nlr. Yoshimura: TENTATIVE APPROVAL St18DIN'IDERS; STATE-bHHi. (Home Depo4 USA) Proposed Subdivision of Fortiori of Hawaiian Home hands of Panaewa, Lot 3-B Into Lots 3-6-1, 3~6-2 & 3-B-3 Waiakea, South Hilo, Island of Hawaii, Hawaii TMK: 2-?-047:064 (SU8 2003-0109) Flease be informed that Tentative Approval of the revised preliminary plat map da#ed October 34, 2003, is hereby granted with modifications and conditions. The subdivider is now authorized to prepare detailed drawings of the subdivision plan in accordance with Chapter ?3, Subdivision Control Code, County of Hawaii, as modified- Before final approval can be grantad, the following cnnditons must be mefi: 1) Water System a) Provide a water system meeting with the approval of the Department of Water Supply. b) Submit water system construction plans for approval by affected agencies. c) Pay installation and facilities charges as required by the Department of Water Supply. 2) Drainage a) Identify ail watercourses and draingeways and encumherwith drainage Basemen#s. ~ °R- 3) Wastewater generated from used on the proposed lots shall be disposed of within existing sewer lines, for which connections shall be cdnstruded in a manner meeting with the approval of the Department of Environmental Management, Vastewater Division. The subdivider shall execute an agreement with the County of Hawaii fhat will commit the Qepartment of Hawaiian Home Lands to participate in an improvement district for the affaoted area, should one be established, to provide for sewer system improvements that will ultimately service the proposed lots, among other parcels within the improvement district. fiawai'i County rs an F9ucs1 Opporrunigr prpvrdrr and Frnpioye~ v ,vv rorrn si(t) COUNTY OF HAWAII Rev 8/29/02 DEPARTMENT OF PUBLIC WORKS INPUT ~IT TO WORK WITHIN THE CO~ RIGHT-OF-WAY BY 6 p4 DAT P~ CHECK ALL APPLICABLE BOXES: I ? Construct new driveway approach Type of Driveway: ? Asphalt Driveway Use: ? Commercial ? Resurface/repair existing driveway approach ? Concrete ? Residential ? Construct or repair sidewalk Other (describe work): Install new sewer line on Makaala Street and install -new water line on Railroad Avenue for Home Depot WIDTH OF APPROACH/DIMENSION OF WORK: ;aal FT. x~_FT. ESTIMATED COST: $ Makaala Street and Railroad Ave TAX MAP KEY: a- 02- - CO~ Name of County Road/Street START DATE: 6/1/04 COMPLETION DATE: 11/1/04 WORKING HRS: lam-7pm PERMITTEE: Hawaiian nrPdg; na C`onat-rn inn C`om~nan~ MAILING ADDRESS: 614 Kapahulu Ave. PHONE NO.: (808) 735-3211 Honolulu, HI 96816 f CONTRACTOR:;_:_Hawaiian Dredcrincr Construction Co Ce,~~~~ MAILING ADDRESS: 61 4 Ka>Zahn 1 n nvP PHONE NO.: (808) 735-321 1 Honol~ju,,l~yu: ~H~/I 96816 LICENSE NO.: ABC-11380 '~r~~1F'l ~(~f~/i~~ Ross Richards 5/24/04 Contractor's Signature Date IN CONSIDERATION OF GRANTING THIS PERMIT, THE PERMITTEE UNDERSTANDS AND AGREES TO: Hold harmless, indemnify and defend the County of Hawaii, its officers, employees and agents thereof, from all claimsemands, suits, actions, or proceedings of every name, character, and description which may be brought against the County of Fiawai'i for or on account of any injuries or damages to any person or property received or sustained by any person by or in consequence of any act or acts of the holder of this permit for actions done under this permit. [HAWAI'I County Code Section 22-4.2(7)]; and Provide ` It d proof of a public liability insurance policy naming a ~~,„o, a minimum amount of coverage under such policy shall be $1,000,000 per occurrence. The policy and coverage shall be kept in force until all work under this permit is completed to the satisfaction of the director of the department of public works. [Hawai'i County Code Section 22-4.2(8)]; and Comply with all conditions as printed on the back of this permit. [Hawai'i County Code Section 22.4.4]. By signing below, the Permittee certifies that the Permittee has legal authority to sign in the capacity stated, and the Permittee understands and agrees that the terms and conditions of this permit are a legally binding contract. AGENCY USE ONLY By:l/IU?v ~~.~k(/r~ Ross Richards 5/24/04 Final Acceptance Date: Penni[tee's Signature Date By: Its: Project Engineer Inspector's Signature STAFILEY Comments: APP ED: I MAY 2 ~ 2GG¢ COQ \t;~t" Dir or Department of Public Works Date PERMIT NO: FEE: / f •65 ~ v County of Hawaii is an Equal Opportunity Provider and Employer DPW Form 33(2) ~ Rev rn 903 • CONSTRUCTION PERMIT • _ - _ CONDITIONS OF APPftOVAL_ , (Hawai'i County Code Section 22-4.4) In addition to any other conditions imposed by Chapter 22 of the Hawaii County Code, all permits issued pursuant to this article shall be subject to the following conditions: 1 The applicant shall notify the director at least 48 hours before the commencement of any work within the county street. 2 The applicant shall maintain public safety while working in a county street by using barricades, construction signs, markings. warning lights, traffic control personnel and other devices according to the "Manual on Uniform Traffic Control Devices for Streets and Highways" on file in the department of public works. 3. Unless otherwise permitted by law, the applicant shall keep at least one traffic lane open for two-way vehicular traffic during the working hours of the day and at least two traffic lanes open during non-working hours. When the work interferes with a sidewalk, the applicant shall also provide for the safe passage of pedestrians including the disabled around or through the work area. 4 For any excavation work, the applicant shall verify the location of all existing private and public utilities and shall be responsible for notifying all utilities affected by the construction 48 hours prior to commencing any work. Should an existing utility be damaged, the applicant shall immediately notify the affected utility. 5 The applicant shall be responsible for notifying all property owners affected by the construction 48 hours prior to commencing. 6. No material, except the trench excavated material, shall be stockpiled closer than 6-feet from the existing edge of pavement. 7 No construction equipment shall be parked or any materials stored in the county street in such a manner that the equipment or materials will obstruct or prohibit pedestrian and vehicular movements, including driveway movements. except during actual working hours. 8 No excavation shall be left open for more than 5 working days. 9 The applicant shall repair, restore, or replace all portions of a county street, including but not limited to utilities, drainage ways and structures, traffic markings and signs, driveways and private property that had been altered, broken up, dug up, disturbed, undermined, dug under or otherwise damaged during construction to a state equal to or better than its original condition. Regardless of existing conditions, work shall also include the construction of new curb-cuts for the disabled, accessible driveways or other improvements such that all repairs, restoration, or replacement work complies with (he current requirements of the Americans with Disabilities Act (ADA). 10. Before issuing a permit, for all work with an estimated cost equal to or exceeding 520,000, the director may require a cash bond, surety company bond. or personal surety bond in favor of the county. The value of the bond shall be double the estimated cost of restoring or replacing the county street to a state equal to or better than its original condition. 11 Work must be completed within one year of the starting date shown on the permit unless otherwise specified. Failure to begin or complete the work will result in the termination of the permit. 12 Repair, restoration or replacement of county streets, highways and sidewalks shall comply with applicable specifications-and plans on file in the department of public works. Copies of these specifications and plans shall be furnished to each applicant upon making a request. 13 Driveway approaches shall be constructed or repaired according to the provisions of this chapter and applicable specfications and plans on file in the department of public works. Copies of these specifications and plans shall be furnished to each applicant upon making a request. 14 Upon completion of the work, the applicant shall immediately remove all equipment and materials and shall leave the work area in a clean, safe and sanitary condition satisfactory to the dlrector- 15 All restoration and re~ai~,.w~ykgj the pavement, shoulders and any other county facihtles shall be guaranteed by the '~~pplie'ant against ard~e~TS~ftl.r<a period of one year from the date of final inspection. County of Hawaii is an Equal Opportunity Provider and Employer 09!1412004 13:54 8085240246 M&E PACIFIC, INC. PAGE 01!01 ~1ay-24-04 01 :28pm From-TOrkl ldsa^ "~t: 603 523 6001 ~ T-150 P.002/002 P-656 - - aSfZifPOO4 1x:1,1 PAX 8085883925 D88L-LDD I~j003 , i ' : ' , wG9A bt1a I 4mGtZ - ~ - Hu+~7l.Nlt~'°~ °m~ t aevss~m ~ s~~~w.u .~'ffiib~1~H 7 - - .:ao. sox 1rn; • ~ - ~ - ~ ~ tiosaocmu,'6..wwv:sbPas.. ' •2say 1&. 20D~4 ~ . ~hratvF~her. S Yuen - Fg~W~u#sp' DeE'a~t~e7a't T4]:• :~EEUaIz :iGZe~t Suite 3 - 1 ` ''-"HaiD -:FlawaY•a ,'9672©r8"x,42 _ 4:Asar .I~ = y~kno.:+ Su~j ect.: "Propose$. • ~be3i'irision of, Portion of ; ~Idawaii~u Home- ~ . ' I;ande.'of,Paitaewa; ,Loc_3.s iia~p•Zots 3-]3^%1, 3-$-2 • "mod 3-e 3 • Waxakes~, ,Sa4afF1'•F3ilo•, SSlaad ~-of •HaacaXi: • `~'Iaivai' - .TrIIt,: •.`.(37.. 2...2.z04~.-P•6'$ .0.2003-OTt]4) ~ . , ' _ i• 29z5.s, .7.~~tei ;~wi•3:1".:;'coTi.f-® ;,.tbat. -if ..tkle ~ai~ovg ,se£er~ced . . : _"...~,Y?Qp~=zxr~, (.":ProPertY' )..pis; saa.c~I.?~¢txl- witha:n ~.'9~sy:.d?aPravemG¢~t: ~distri.ck . - . ~ated~ z~ 't'he futctre 3r1~.'accardusce aiEfl, app7.ibahle laws _2p 'order-,to pzo*ride sewed' systepi s~prcVement6 sec~t'ss3 #he'gr+~ttY," arid•:'k~2 .otrei'•..F~Perties .~q~.'th3n -such iu~r..ow®meat dieGrlct, ,theq, ' Pno~aeTtY maw Yie'assas~ed its., rea®pti~ble,--s7i~ce of~t'he assessments. ' ~~:3a~oset}' agai'm,st 'the~;,proga~?.es Wi_tI'is.u'F •.s;adh• ;-moL'OYC30.F1.1A-.,dastti.cs - in' accnit3an,°_e: with a~Plsoe3ale SawS,: ' - ~ ~ ~ ~ ~ ~ ~ I ' ~ ~ to s3L].9~:'-eflndtioi¢ 'mmibe~ ' 3 • ~.n - ~ ~ .T4Lis l.atiter 3:~s: ~~iilte:sded "ZpZg; aoacezsli-n~ • . ~ `yoiir..May'~7, '24{)4.~~etter';ta.Genrge, 5.• Yosliimixxa,.. 2f you 'have "any~•,:geestious , . a7~ove_- tefea:.eIICed silbdi:vis,ioi?'.. _ . >th Zactiag ,Admitiist=scor'. , r aliout tlii;a . ~ta,t~ter' p7.ea5e,';;ca7.~1- Liaicla,` Cbi?~., ` of ouc '~axxd. Lf3nag~M'slG Tlivision,'• ~t ' f 808):' 5.'37 ^643'9.• • ~ ~!o'• ~rand.mahafia'r ~ ' ~ - ~ . Micah. AL - "Ka9Cie•, Chai~?siaia Hawar.laa .Ti • STATE OF HAWAII DEPARTMENT OF HAWAIIAN HOME LANDS GENERAL LEASE NO. 260 between STATE OF HAWAII and HOME DEPOT U.S.A., INC. covering HAWAIIAN HOME LANDS situate at corner of Makaala Street and Railroad Avenue, at Waiakea, South Hilo Island of Hawaii, Hawaii 330610.18 04/15/04 TABLE OF CONTENTS Pa¢e ARTICLE ONE DEMISE 1. Lease 1 2. Term . 1 ARTICLE TWO RENTAL I 1. Annual Base Rental 2 2. Reopening of Annual Base Rental 2 ARTICLE THREE RESERVATIONS AND RIGHT OF WITHDRAWAL 3 1. Minerals and Waters 4 2. Prehistoric and Historic Remains ...........................................................................4 3. Right of Withdrawal 4 4. Reservation of Easements in Favor of LESSOR 4 5. Compensation for Takings, Withdrawal and other Entry or Actions Reserved in Favor ofLESSOR 5 ARTICLE FOUR 6 1. Payment of Rent 6 2. Taxes and Assessments 6 3. Utility Services 6 4. Issuance and Relocation of Utility Easements 6 5. Sanitation 6 6. Waste and Unlawful, Improper or Offensive Use of Premises 6 7. Compliance with Laws 7 8. Inspection of Premises 7 9. Improvements 7 10. Repairs to Improvements 9 11. Liens ..............................................9 12. Zoning/Permitted Uses 9 i 3. Assignment 14. Subletting ...................9 15. Indemnity 10 16. Costs ofLitigation 10 17. Insurance 10 18. Landscaping 13 310610.18 1 TABLE OF CONTENTS (continued) Paee 19. Termination .........................................13 20. Conditions Subsequent 13 21. Processing Fees/Documentation 14 22. Underground Storage Tank (UST) 15 23. Non-warranty 1 S ARTICLE FIVE ...................................................................................................15 1. Mortgage I S 2. Breach ..................................................................................................................19 3. Rights of Hotder of Record of a Security Interest 19 4. Condemnation ......................................................................................................20 S. Right to Enter 20 6. Inspection by Prospective Bidders 20 7. Payment or Acceptance of Rent Not a Waiver 21 8. Extension of Time 21 9. Quiet Enjoyment ..................................................................................................21 10. Interest, Costs and Fees 22 11. Hazardous Materials 22 12. Hawaii LawlFiling 23 13. Recitals and Exhibits -Incorporation in Lease 24 14. Partial Invalidity ...................................................................................................24 15. Notice ...................................................................................................................24 16. Use Restrictions ...................................................................................................25 17. Definitions ............................................................................................................25 18. Consents ...............................................................................................................26 19. Limitation on Obligation to Indemnify 26 310610.18 11 STATE OF HAWAII DEPARTMENT OF HAWAIIAN HOME LANDS GENERAL LEASE NO. 260 THIS INDENTURE OF LEASE (the "Lease") is made as of the /5~' day of tCt?2~' , 2004, but shall be effective on the date set forth below, by and bet een THE STATE OF HAWAII, by its DEPARTMENT OF HAWAIIAN HOME LANDS, whose principal place of business is 1099 Alakea Street, 20th Floor, Honolulu, Hawaii 96813, and whose post office address is P. O. Box 1879, Honolulu, Hawaii 96805, hereinafter called "LESSOR," and HOME DEPOT U.S.A., INC., a Delawaze corporation, whose mailing address is 2727 Paces Ferry Road, Atlanta, Georgia 30339, Attention: Legal Department (with a copy to 3800 West Chapman Avenue, Orange, California 92868, Attention: Real Estate Department and Legal Department), hereinafter called "LESSEE." WITNESSETH: ARTICLE ONE DEMISE 1. Lease. LESSOR, for and in consideration of the rent to be paid and of the terms, covenants and conditions herein contained, all on the part of LESSEE to be kept, observed and performed, does lease to LESSEE, and LESSEE does lease from LESSOR, those certain premises located at the corner of Makaala Street and Railroad Avenue, at Waiakea, South Hilo, Island of Hawaii, Hawaii, comprising 10.687 acres, more or less, of Hawaiian Home Lands, more particulazly described in Exhibit "A", and shown on the map mazked Exhibit "B", both attached hereto and made a part hereof ("Premises"). 2. Term. The Premises aze demised unto LESSEE TO HAVE AND TO HOLD, together with all buildings, improvements, tenements, rights, easements, privileges appurtenant thereto, but subject to the terms and conditions of this Lease, for a term commencing on `uLDf'CYY1}1LY / 2004 (which shall be the Effective Date of the Lease) (subject to the conditions subsequent set forth in Section 20 Article Four), and ending as of midnight on March 31, 2069, unless sooner terminated as hereinafter provided. ARTICLE TWO RENTAL LESSEE shall pay to LESSOR at the office of the Department of Hawaiian Home Lands, Honolulu, Oahu, State of Hawaii, a net annual rental as provided hereinbelow, payable in advance, without notice or demand, in equal monthly installments, as follows: 330610.18 I 1. Annual Base Rental. Annual base rental shall be paid on the first day of each and every calendar month from and after the Rent Commencement Date by LESSEE to LESSOR at LESSOR'S principal place of business first described above, in United States dollazs, as follows: Lease years 1 through 10: Four Hundred Thousand Dollars ($400,000.00) per annum ($33,333.33 per month from and after the Rent Commencement Date only); Lease years 11 through I5: Four Hundred Sixty Thousand Dollars ($460,000.00) per annum ($38,333.33 per month); Lease years 16 through 20: Four Hundred Ninety-Five Thousand Five Hundred Dollars ($495,500.00) per annum ($41,291.67 per month); and Lease years 21 through 25: Five Hundred Thirty-One Thousand Five Hundred Eighty- Seven Dollars ($531,587.00) per annum ($44,298.92 per month). Lease years 26 through 65: annual base rental shall be reopened as provided in Section 2 below. Annual base rental shall be proportionately reduced for any partial month during the tenn. The "Rent Commencement Date" is that date which is the earlier of (a) April 1, 2005 or (b) the date on which LESSEE opens the Premises for business. The first lease year shall commence on the Effective Date with succeeding lease years commencing on each succeeding anniversary of such Effective Date. LESSOR holds LESSEE'S bid deposit in the amount of $59,250.00. This amount will be applied to pay the first rents coming due from LESSEE under the Lease. 2. Reopening of Annual Base Rental. The annual base rental hereinabove reserved shall be reopened and re-determined at the expiration of the twenty-fifth (25th) lease yeaz of the term for the next ensuing ten-year period comprising lease yeazs 26-35 and shall be reopened and redetermined at the expiration of the 35th, 45th and 55th lease years for each of the next ensuing three (3) ten-yeaz periods comprising lease yeazs 36-45, 46-55 and 56-65, respectively, to an amount equal to the then fair market rental value of the Premises at the commencement of such reopening period as if the Premises were unencumbered by this Lease and based on the use or uses then permitted to be made on the Premises under the applicable County zoning, as such uses may be further restricted by the terms of this Lease (referred to hereafter as the "fair marmar e~ rental value" of the Premises), ali as shall be determined by mutual agreement between LESSOR and LESSEE, provided, however, that for each of the three (3) ten-year periods comprising lease years 36-45, 46-55 and 56-65, the increase in such annual base rental shall not be more than 20% above the annual base rental payable during the immediately preceding ten year period under this Lease. No such cap shall apply to the reopening and redetermination of rent at the expiration of the 25th lease year of the term. If LESSOR and LESSEE fail to mutually agree upon the fair market rental value of the Premises which will be the annual base rental for the reopening period at least ninety (90) days prior to the commencement of each of the reopening periods, the proposed new annual base rental shall be determined by an appraiser whose services shall be 330610.18 2 contracted for by LESSOR who shall detemune the fair mazket rental value of the Premises; provided, that should LESSEE fail to agree upon the fair market rental value of the Premises as determined by LESSOR'S appraiser, LESSEE shall promptly appoint its own appraiser and give written notice thereof to LESSOR, and in case LESSEE shall fail to do so within thirty (30) days after being advised of the fair market rental value as determined by LESSOR'S appraiser, LESSOR may apply to any person then sitting as judge of the Circuit Court of the judicial circuit in which the Premises aze located for appointment of a second appraiser, and the two appraisers thus appointed in either manner shall have thirty (30) days (or such additional time as LESSOR and LESSEE shall mutually agree) to resolve any disagreement on the fair market rental value determination and settle the reopened rent for the ensuing reopening period. Should both appraisers fail to agree upon the fair mazket rental value of the Premises within this 30-day period (as the same may be extended by mutual agreement of LESSOR and LESSEE), they shall appoint a third appraiser. In case of their failure to do so within fifteen (IS) days, either party may have the third appraiser appointed by the judge and the fair mazket rental value of the Premises shall be determined by azbitration as provided in Chapter 658A, Hawaii Revised Statutes. Each appraiser, whether appointed by a party to the Lease or by the Circuit Court, shall have the following minimum qualifications: at least five (5) yeazs experience in appraising commercial real property and hold a cuaent MAI or SREA designation. The decision of the appraisers or a majority of them shall be final, conclusive and binding upon both parties hereto. The appraisers so appointed shall deliver their determination before the ninetieth (90th) day following appointment of the third appraiser, and, in the event they shall fail to do so and the time for delivery of such determination shall not have been extended by mutual agreement of LESSOR and LESSEE, the employment of the appraisers shall immediately temunate and, except as may be approved by LESSOR and LESSEE in the exercise of their sole and absolute discretion with respect thereto, the appraisers shall not be entitled to any payment for services or reimbursement of expenses incurred because of such appointment. In the event the employment of the appraisers shall be so terminated, new appraisers shall be appointed in the manner hereinbefore provided. LESSEE shall pay for its own appraiser, LESSOR shall pay for its appraiser, and the cost of the third appraiser shall be borne equally by LESSEE and LESSOR. Upon completion of the azbitration procedure, all appraisal reports shall become part of the public record of LESSOR. If the rental for any ensuing period has not been determined prior to the expiration of the preceding rental period, LESSEE shall continue to pay the rent effective for the previous rental period, but LESSEE shall, within thirty (30) days after the new rental has been so determined, make up the deficiency, if any plus ittterest thereon at the rate often percent (10.0%) per annum. Notwithstanding anything else contained in this Lease to the contrary, LESSEE shall have the right to surrender the Premises and terminate this Lease pursuant to Section 20 of Article Four below upon the delivery of written notice to LESSOR within three (3) months after each reopening and re-determination of the Annual Base Rental hereunder so long as LESSEE then reimburses LESSOR for 100% of the cost of LESSOR'S appraiser and 50% of any cost of a third appraiser incurred by LESSOR in connection with the reopening. ARTICLE THREE RESERVATIONS AND RIGHT OF WITHDRAWAL RESERVING UNTO LESSOR THE FOLLOWING: 330610.18 3 Minerals and Waters. (a) All minerals as hereinafrer defined, in, on, or under the Premises, except that the right to prospect for, mine and remove such minerals shall be suspended during the term of this Lease. "Minerals," as used herein, shall mean any or all oil, gas, coal, phosphate, sodium, sulphur, iron, titanium, gold, silver, bauxite, bauxitic clay, diaspore, boehmite, laterite, gibbsite, alumina, all ores of aluminum and, without limitation thereon, all other mineral substances and ore deposits, whether solid, gaseous or liquid, including all geothermal resources, in, on, or under any land, fast or submerged; provided, that "minerals" shall not include sand, gravel, rock or other material suitable for use and when used in construction in furtherance of LESSEE's permitted activities on the demised Premises and not for sale to others. This provision is intended only to govern extraction of minerals and not to impair in any manner LESSOR'S ownership of the mineral rights pursuant to Sections 171-58 and 182-2 of the Hawaii Revised Statutes. (b) All surface waters, ground waters, and water systems, appurtenant to the Premises, provided that such reservation shall not include the right to enter the Premises to capture, divert, or impound the same or to occupy and use any of the Premises in the exercise of this reserved right. 2. Prehistoric and Historic Remains. LESSOR has reviewed its files and records and determined that it has no information, reports or inspections reflecting that there aze any prehistoric or historic remains or sites of azchaeological significance present at the Premises. If any azea is rendered unsuitable for development as a result of the discovery of sites of azchaeological significance or prehistoric or historic remains, and subject to LESSEE'S rights under Section 20 of Article Four below, such sites or remains shall be excluded from the Premises demised to LESSEE with an equitable adjustment of the rental payable hereunder determined in the manner provided in Section 5 of this Article Three. Except as provided above, LESSEE assumes the risk of any sites of archaeological significance or prehistoric or historic remains found on the Premises, including the risk of any delays arising out of the investigation, protection or removal of such sites or remains. 3. Right of Withdrawal. The right to withdraw all or any portion of the Premises for the purposes of the Hawaiian Homes Commission Act, 1920 (the "Act"), as reserved by Section 204(a)(2) of the Act. The right to withdraw reserved under this Section 3 of Article Three shall be exercised only after not less than £ve (5) years prior written notice to LESSEE. As a condition precedent to the exercise by LESSOR of any rights reserved in this Section 3 of Article Three, just compensation shall be paid to LESSEE for any of the Premises and/or LESSEE'S improvements so withdrawn or rendered unsuitable for LESSEE'S intended use, which amount is to be determined in the manner set forth in Section 5 of this Article Three, and the annual base rental under this Lease will also be proportionately reduced also as provided in Section 5 of this Article Three. 4. Reservation of Easements in Favor of LESSOR. LESSOR hereby reserves the right and option, with the reasonable consent of LESSEE, to create, designate, grant and relocate from time to time, at its sole cost and expense, any and all necessary easements for underground 33 W 10.18 4 utilities and services, including drainage, water, sewer, electricity and other utilities under, across and through the Premises, provided that (a) such easements do not cross through any permanent structures constructed on the Premises or planned to be constructed on the Premises, and (b) the work to construct and install any such easements shall be done, and the easement shall be utilized, in such a fashion as to cause no disruption with LESSEE'S operations or use of the Premises. Upon completion of any such work by LESSOR the surface of the Premises shall be returned, at LESSOR'S sole cost and expense, to substantially the same condition as it was prior to installation of any underground utility. 5. Compensation for Takines Withdrawal and other Entrv or Actions Reserved in Favor of LESSOR. In the event all or any portion of the Premises is taken or withdrawn, or LESSEE is denied the practical and economic use thereof by any other entry or actions or matters reserved to LESSOR under this Lease, then and in any such event, LESSEE and/or those claiming by, through or under LESSEE will be entitled to just compensation to the same extent and according to the same principles and rules of law as if the Premises and all improvements thereon, had been condemned by the State of Hawaii under its power of eminent domain, provided, however, that in no event shall the compensation payable to LESSEE be less than the portion of the value of LESSEE'S improvements so taken in the proportion that the unexpired term of the Lease bears to the entire term of the Lease. If at any time during the term, a portion, but not all, of the Premises should be taken or withdrawn, or LESSEE is denied the practical and economic use of such portion, then and in any such event, the annual base rental shall be proportionately reduced based upon the ratio between the fair mazket value of the Premises prior to such taking, withdrawal, or use denied to the fair mazket value of the Premises remaining after such taking, withdrawal, or use denial. In such event, LESSEE shall also be entitled to receive from LESSOR a portion of the value of LESSEE'S permanent improvements situated on the taken, withdrawn, or use denied portion of the Premises in the proportion that the unexpired term of the Lease bears to the entire term of the Lease, provided, that LESSEE may, in the alternative, remove and relocate its improvements to the remainder of the Premises occupied by LESSEE. Where the portion taken, withdrawn, or use denied renders the remainder of the Premises unusable in LESSEE'S reasonable determination, LESSEE shall have the option to surrender this Lease pursuant to Section 19 of Article Four below or partially surrender this Lease as to the portion of the Premises so affected, and be dischazged and relieved from any further liability therefor. In the event LESSEE shall not exercise such option to surrender this Lease or partially surrender this Lease as to the portion of the Premises so affected, then the annual base rental for the balance of the term shall be abated and adjusted in an equitable manner as set forth above. In the event that LESSEE reasonably exercises its option to surrender this Lease or partially sunrender this Lease as to the portion of the Premises so affected by reason of a partial taking, withdrawal or use denial, LESSEE shall be entitled to just compensation as if LESSOR had elected to take, withdraw or deny the use of the entire Premises or the portion of the Premises so affected under the Lease and LESSEE will be entitled to just compensation to the same extent and according to the same principles and rules of law as if the Premises or the portion of the Premises and all improvements thereon, had been condemned by the State of Hawaii under its power of eminent domain as more particulazly set forth above. 33D6I0.18 5 ARTICLE FOUR THE PARTIES HEREIN COVENANT AND AGREE AS FOLLOWS: 1. Payment of Rent. LESSEE shalt pay the rent to LESSOR at the times, in the manner and form provided in this Lease and at the place specified above, or at any other place LESSOR may from time to time designate, in legal tender of the United States of America. 2. Taxes and Assessments. (a) LESSEE shall pay or cause to be paid, when due, the amount of all taxes, rates, assessments and other outgoings of every description as to which the Premises or any part, or any improvements, or LESSOR or LESSEE, aze now or may be assessed by governmental authorities during the term of this Lease; provided, however, that with respect to any assessment made under any betterment or improvement law which may be payable in installments, LESSEE shall be required to pay only those installments, together with interest, which become due and payable during the term; (b) LESSEE shall reimburse to LESSOR, upon demand, any and all conveyance and transfer taxes payable with respect to this transaction, or with respect to any document to which LESSEE is a party, creating or transferring an interest or an estate in the Premises; and (c) LESSEE shall have the right to contest any tax, rate, assessment or other charge imposed against the Premises provided LESSEE takes all steps necessary to prevent a sale of the Premises. LESSOR agrees to reasonably cooperate with LESSEE in any application or proceeding to contest such tax, rate, assessment or other chazge, provided that all reasonable costs and expenses of LESSOR incurred in connection therewith shall be paid by LESSEE. LESSOR agrees to submit to LESSEE all real property tax or assessment invoices which aze sent to LESSOR for taxes at least sixty (60) days prior to the last date that the same may be paid without penalty or interest. 3. Utiliri Services. LESSEE shall pay or caused to be paid all utility chazges, duties, rates and, other similaz outgoings, including water, sewer, gas, refuse collection, relocation of utility poles and lines or any other charges, as to which the Premises or any part, or any improvements, or LESSOR or LESSEE may become liable for during the term, whether assessed to or payable by LESSOR or LESSEE. 4. Issuance and Relocation of Utility Easements. LESSEE shall have the right and LESSOR shall fully cooperate with LESSEE to provide any reasonably necessary easements for utility purposes to service any portion of the Premises. LESSEE, at its sole cost and expense, shall be responsible for bringing any and all necessary utility connections to the Premises for its contemplated improvements. 5. Sanitation. LESSEE shall keep the Premises and improvements in a reasonably sanitazy and clean condition. 6. Waste and Unlawful Improner or Offensive Use of Premises. LESSEE shall not commit, suffer or permit to be committed any material waste, nuisance, or unlawful use of the Premises, or any part thereof. 330610.!8 6 7. Compliance with Laws. LESSEE shall comply with the applicable requirements of any municipal, state and federal authorities and observe any municipal ordinances and state and federal statutes, applicable to the Premises or improvements situated thereon, now in force or which may hereafter be in force. LESSEE will at all times during the term of the Lease, and at its own expense, make, build, maintain and repair all fences, sewers, drains, roads, curbs, sidewalks and parking azeas which may be required under any applicable law to be made, built, maintained or repaired upon the Premises. 8. Inspection of Premises. LESSEE will permit LESSOR and its agents, at all reasonable times so as to cause as little interference with LESSEE's use of the Premises as is reasonably possible during the Lease term, to enter into and upon the Premises to inspect and examine the same and determine the state of repair and condition thereof. 9. Improvements. (a) LESSOR has approved LESSEE's plan to construct improvements on the Premises including, without limitation, a home improvement store, an outdoor garden center, a sidewalk azea in front of the building, signs, truck loading docks, truck wells, a truck staging area servicing the building, and a fully striped and lighted pazking lot to service the building, all as detailed in LESSEE'S "permit set" plans and specifications prepazed by Greenberg Farrow and dated March 4, 2004, as amended by amendment dated March 15, 2004, and as further modified in LESSEE'S conceptual plan dated April 12, 2004 ("Conceptual Plan"), a "permit set" for which LESSEE agrees to deliver to LESSOR by not later than May 31, 2004, which "permit set" LESSOR agrees to approve so long as it is substantially in conformance with the Conceptual Plan. LESSEE may, during the term construct, place, maintain and install on the Premises additional buildings and structures with the LESSOR'S prior written approval of the final plans and specifications for such buildings or structures; LESSEE shall have the right to make interior, structural and non-structural repairs and improvements, including the right to relocate all exterior customer and loading doors and entryways in the building without LESSOR'S consent. LESSOR agrees to execute any and all instruments necessary to obtain licenses and permits from the applicable governmental authorities in order to make such repairs or alterations. LESSEE shall own these improvements until the expiration or termination of the Lease, at which time the ownership shall automatically be vested in LESSOR. LESSOR hereby grants to LESSEE a temporary license for access and passage over and across the property referred to as the "Outpazcel" (the "Outparcel") in that certain Easement Agreement and Restrictive Covenant (the "REA") executed on or about the date hereof, between LESSOR and LESSEE, to the extent reasonably necessazy for LESSEE to construct the Permanent Service Drive (as defined in the REA) located on the Outparcel, until the Permanent Service Drive is completed but no longer than one year after the commencement of the work. LESSEE shall secure all permits and approvals and promptly pay all costs and expenses associated with such work, and shall promptly clean and restore the affected portion of the Outparcel to a condition which is equal to or better than the condition which existed prior to the commencement of such work. s3oaio.ix 7 (b) Bond and Financial Information. LESSEE will before commencing construction of any improvements within the Premises in excess of FIVE HUNDRED THOUSAND AND NO/100 DOLLARS ($500,000.00) deposit with LESSOR either: (i) copies of the contractor's performance bond (HS/AIA Document A31 I or its equivalent), and a labor and materials payment bond (HS/AIA Document A311 or its equivalent), naming LESSOR as an additional obligee thereunder in an amount equal to one hundred percent (I 00%) of the estimated construction cost of the improvements to be made on the Premises, with a surety reasonably satisfactory to LESSOR, to assure the performance by the contractor of the contract for the construction of such improvement on the Premises, and the completion of such construction work, free and cleaz of all mechanics' and materialmen's liens; or (ii) a written guazanty of performance and payment of the construction contract(s) for the improvements planned for the Premises from a person or entity of size and substance satisfactory to LESSOR, in LESSOR'S reasonable judgment, in favor of LESSOR, and guaranteeing the performance of the construction contract(s) and completion of such work free and cleaz of all mechanic's and materialmen's liens: or (iii) an irrevocable standby letter of credit issued by a recognized financial institution, as reasonably detemained by LESSOR to be satisfactory, to assure performance of any construction contracts for and payment of all labor, materials, services or other work done by or on behalf of LESSEE (or any affiliated parties, contractors, materialmen or subcontractors) in connection with the improvements planned for the Premises. LESSEE shall also provide LESSOR with such information and evidence as LESSOR may reasonably require to assure LESSOR that LESSEE is able to and will make all payments required by the construction contract(s) for the improvements to be made to the Premises, as and when LESSEE is required to do so. Notwithstanding the foregoing, in the event that LESSEE (and any tenant of LESSEE) (x) provides evidence to LESSOR that such entity has a net worth of at least $100,000,000.00, and {y) commits to LESSOR to complete the improvements free and cleaz of all mechanics' and materialmen's liens, LESSEE (or such tenant) shall not be required to deposit any such security in connection with the construction of improvements by such entity. (c) Compliance with the Americans with Disabilities Act of 1990. (i) Applicable Laws. LESSEE shall cause drawings and specifications to be prepared for, and shall cause to be performed, any construction, alteration or renovation of the Premises, including signage, in accordance with all applicable laws, ordinances and regulations of all duly constituted authorities, including, without limitation, Title III of the Americans with Disabilities Act of 1990 (the "ADA"), 42 U.S.C.,12181-12183, 12186(b)-12189, the ADA Accessibility Guidelines promulgated by the Architectural and Transportation Barriers Compliance Board, the public accommodations title of the Civil Rights Act of 1964, 42 U.S.C. 2000a et. seq., the Architectural Barriers Act of Rehabilitation Act of 1968, 42, U.S.C. 4151 et. seq., as amended, Title V of the Rehabilitation Act of 1973, 29 U.S.C.. 790 et seq., the Minimum Guidelines and Requirements for Accessible Design, 36 C.F.R. Part 1190, and the Uniform Federal Accessibility Standazds, as the same aze in effect on the date hereof and may be hereafter modified, amended or supplemented (all such laws, ordinances, regulations and guidelines regarding access collectively called "Public Accommodations Laws"). (ii) Responsibility for Compliance. Notwithstanding LESSOR'S review of such drawings and specifications, and whether or not LESSOR approves or ]]0610.18 8 disapproves such drawings and specifications, LESSEE and not LESSOR shall be responsible for compliance of such drawings and specifications and of all Public Accommodations Laws. LESSEE shall defend, pay, indemnify and hold LESSOR harmless against all reasonable costs and expenses (including reasonable attomey's fees), losses, damages and liabilities incurred by LESSOR which may be attributable to: (A) LESSEE'S alleged failure to comply with any Public Accommodations Law or any other applicable governmental law, rule or regulafion; (B) LESSOR'S investigation and handling (including the defense) of LESSEE'S failure to comply with any Public Accommodations Law or any other applicable govettunental law, rule or regulation, whether or not any lawsuit or other formal legal proceeding shall have been commenced in respect thereof; (C} any amounts assessed against LESSOR pursuant to any Public Accommodations Law based upon LESSOR'S ownership of the Premises; and (D) LESSOR'S enforcement of this paragraph, whether or not suit is brought therefore. All the above amounts shall constitute additional rent and shall be payable on demand with interest at the rate often percent (10.0%) per annum. 10. Repairs to Improvements. LESSEE shall at its own expense, keep, repair and maintain all buildings and other improvements now existing or hereafter constructed or installed on the Premises in good order, condition and repair, reasonable weaz and tear excepted. 11. Liens. Each party will not commit or suffer any act or neglect which results in the Premises, any improvement or the leasehold estate of LESSEE becoming subject to any attachment, lien, charge, or encumbrance, except as provided in this Lease, and each shall indemnify, defend, and hold harmless the other from and against all attachments, liens, chazges, and encumbrances and all resulting expenses, including reasonable attorney's fees. Each shall have the right to contest any such attachment, lien, charge or encumbrance, provided that the interest of the other shall not thereby be subject to sale. 12. Zonint;/Permitted Uses. The Premises may be used for a home improvement store or any other uses permitted by the applicable County zoning. Immediately upon execution hereof LESSOR, pursuant to authority reserved to it by December 27, 2002, Memorandum of Agreement entered into between LESSOR and the County of Hawaii, shall designate to the County of Hawaii that the Premises be zoned as ML-20 (Limited Industrial). 13. Assignment. LESSEE shall not, without the prior written consent of LESSOR, which consent shall not be unreasonably withheld or delayed, transfer, assign, or permit any other person to occupy or use the Premises or any portion thereof (other than employees, agents, contractors, and other similar parties not having a possessory interest in the Premises), or transfer or assign this Lease or any interest therein, either voluntarily or by operation of law. This Section 13 of Article Four shall not be construed or deemed to restrict or limit in any manner LESSEE'S right, without the consent of LESSOR, to sublet space within any of the buildings constructed on the Premises. 14. Sublettine. LESSEE shall not, without the prior written consent of LESSOR, which consent will not be unreasonably withheld or delayed, have the right to sublease all or any portion of the Premises except that LESSEE may, without the consent of LESSOR, sublet space within any of the buildings constructed on the Premises. 330610.18 9 15. Indemnitv. LESSEE shall indemnify, defend and hold LESSOR harmless (a) from and against any third-party claims or demands for loss, liability or damage, including claims for property damage, bodily injury or wrongful death, arising out of or resulting from LESSEE'S use, occupancy, maintenance, or enjoyment of the Premises after the Effective Date, including any accident, fire or nuisance, or growing out of or caused by any failure on the part of LESSEE to maintain the Premises in a safe condition, or by any act or omission of LESSEE; and (b) from and against all third-party actions, suits, damages and claims by whomsoever brought or made by reason of the LESSEE'S non-observance or non-performance of any of the terms, covenants and conditions of this Lease or the rules, regulations, ordinances and laws of the federal, state, municipal or county governments applicable to LESSEE. LESSOR shall indemnify, defend and hold LESSEE harmless (i) from and against any third-party claims or demands for loss, liability or damage, including claims for property damage, bodily injury or wrongful death, arising out of or resulting from any use, occupancy, maintenance, or enjoyment of the Premises resulting from circumstances prior to the Effective Date, including any accident, fire or nuisance, or growing out of or caused by any failure on the part of LESSOR to maintain the Premises in a safe condition, or by any act or omission of LESSOR; and (ii) from and against all third-party actions, suits, damages and claims by whomsoever brought or made by reason of LESSOR'S non-observance or non-performance of any of the terms, covenants and conditions of this Lease or the rules, regulations, ordinances and laws of the federal, state, municipal or county governments applicable to LESSOR. The duty to defend shall be conditioned on the indemnitee adequately notifying the indemnitor of the circumstances entitling indemnitee to defense and indemnity so as to permit indemnitor to defend. Indemnitor shall not be obligated to defend or indemnify if and to the extent that the loss is caused, in whole or in part, by indemnitee's act, omission or negligence. 16. Costs of Liti ation. In case either party shall, without fault on its part, be made a party to any litigation commenced by the other party or against the other party (other than condemnation proceedings), the other party shall pay all costs, including reasonable attorney's fees and expenses incurred by or imposed on the party joined without fault on its part. 17. Insurance. At all times during the term of this Lease, LESSEE shall purchase and maintain, at LESSEE's sole expense, the following policies of insurance in amounts not less than the amounts specified below, or such other amounts as LESSOR may from time to time reasonably request, with insurance companies and on forms reasonably satisfactory to LESSOR: (a) Commercial Propertv Insurance. A policy or policies of Commercial Property Insurance covering all buildings, structures and other improvements, including without limitation all furniture, fixtures, machinery, equipment, stock and any other personal property owned andlor used in LESSEE'S business, whether made or acquired at LESSEE'S, LESSOR'S or another's expense, in an amount equal to their full replacement cost at time of loss, without deduction for depreciation. The insurance shall be written on an Insurance Services Office, Inc. ("ISO") Commercial Property Policy - "Special Form" Causes of Loss form as from time to time filed with the Hawaii Insurance Commissioner, or its equivalent, and at a minimum such policy shall insure against destruction or damage by fire and other perils covered under such an ISO policy, with additional coverage for risk of loss by flood, hurricane, tsunami, perils normally insured under a policy of boiler and machinery insurance, and such other hazazds or risks which 330610.18 l a prudent business person would insure against. The policy(ies) required under this Lease shall provide Replacement Cost Coverage (exclusive only of excavation, foundations and footings), and shall include Building Ordinance/Law coverage (for increased costs of demolition and repair due to changes in building codes or zoning ordinances). Except with LESSOR'S prior written consent which shall not be unreasonably withheld or unless LESSEE self insures as permitted below, the policy shall not have a deductible amount in excess of $100,000 for any one occurrence. (b) Liability Insurance. (i) Commercial General Liability Insurance. A policy or policies of commercial general liability insurance or commercial general liability and excess or umbrella liability insurance written on an "occurrence" form covering the use, occupancy and maintenance of the Premises and all operations of LESSEE including: Premises Operations; Independent Contractors; Products -Completed Operations; Blanket Contractual Liability; Personal and Advertising Injury; Employees Named as Additional Insureds; and Medical Expense. Such insurance shall be written on an ISO Commercial General Liability Policy form or its equivalent. (1) Limits. Limits for such coverage shall be not less than ONE MILLION DOLLARS ($1,000,000.00) per occurrence and not less than TWO MILLION DOLLARS ($2,000,000.00) in the aggregate. (2} Deductible. Except with LESSOR'S prior written approval which shall not be unreasonably withheld, the policy shall not have a deductible amount in excess of $100,000 for any one occurrence. (3) Application of General Ae regate. The policy(ies) of insurance shall further contain a provision that the general aggregate limit applies exclusively to the Premises and the operations conducted thereon. (ii) Workers' Compensation and Emplovers' Liability Insurance. Workers' Compensation and Employers' Liability insurance as required by HRS Chapter 386 and regulations thereunder, as the same may be amended from time to time, for all employees of LESSEE. (1) Limits for such coverage shall be not less than the statutory limits for Workers' Compensation and the following for Employers' Liability: $1,000,000 Each Accident; $1,000,000 Disease -Policy Limit; and $1,000,000 Disease -Each Employee. (2) The policy shall further contain an endorsement providing a waiver of subrogation in favor of LESSOR and its employees. (iii) Business Auto Policy. Automobile Liability Insurance covering owned, non-owned, and hired autos including Contractual Liability, written on a Business Auto Policy form or its equivalent. Limits for such coverage shall be not less than the following: 3306!0.18 I1 Bodily Injury $1,000,000 each person and $1,000,000 each accident; Property Damage $1,000,000 each accident; and Personal Injury Protection/No-Fault Hawaii statutory limits. (c) Umbrella Liability. Umbrella Liability Insurance providing excess coverage over Commercial General Liability, Liquor Liability, Employer's Liability, and Automobile Liability Insurance. The Umbrella Liability policy shall be written on an "occurrence" form with a limit of liability of not less than $5,000,000 per policy year and aself- insured retention and/or deductible no greater than $100,000. {d) Builder's and Installation Risk. Builder's and installation risk insurance while the Premises or any part thereof aze under construction, written on the Builder's Risk Completed Value form (nonreporting full covernge), including coverage on equipment, machinery and materials not yet installed but to become a permanent part of the Premises. (e) General Policv Terms. All policies of insurance required to be maintained pursuant to this Section 17 of Article Four, covering loss or damage to any of LESSEE'S property shall provide that the insurer is required to provide LESSOR with at least thirty (30) days (or not less than ten (10) days in the case of nonpayment of premiums) prior written notice of cancellation or non-renewal of any such insurance policy. LESSEE will pay all premiums thereon when due and will from time to time deposit promptly with LESSOR current policies of such insurance or certificates thereof. All public liability and property damage policies shall be in the joint names of and for the mutual and joint benefit and protection of LESSOR, LESSEE, and LESSEE'S mortgagee(s), as their respective interests may appeaz, and shall contain a provision providing that LESSOR, although named as an additional insured, shall not be denied any recovery under the policy(ies) for any loss occasioned to it, its servants, agents and employees by reason of the acts, omissions and/or negligence of LESSEE which recovery would be possible if LESSOR were not named as an additional insured. As often as any such policy shall expire or terminate, LESSEE shall procure and maintain, renewal or additional policies in like manner and to like extent. All general liability, property damage and other casualty policies shall be written as primary policies, not contributing with and not in excess of coverage which LESSOR may carry; provided, however, that with respect to the commercial general liability coverages required under the provisions of this Lease LESSEE may satisfy those requirements with a combination of primary insurance coverage with minimum limits of $1.0 million, and the balance of the coverage by an excess or umbrella policy. (f) Periodic Review of Insurance Coverages. LESSOR shall retain the right at any time, but not more frequently than once every three (3) years, to review the coverage, form, and amount of the insurance required by this Lease. If, in the reasonable judgment of LESSOR, the insurance provisions in this Lease do not provide adequate protection for LESSOR in light of then prevailing practices under leases of similaz properties in the State of Hawaii, LESSOR may require LESSEE to obtain insurance sufficient in coverage, form, and amount to provide such additional protection. LESSOR'S requirements shall be reasonable and shall be designed to assure protection for and against the kind and extent of the risks which exist at the time a change in insurance is required. LESSOR shall notify LESSEE in writing of changes in the insurance requirements and LESSEE shall deposit copies of acceptable insurance policies or 330610.18 12 certificates thereof with LESSOR incorporating the reasonably required changes within sixty (60) days of receipt of such notice from LESSOR. Notwithstanding anything else contained in this Lease to the contrazy, LESSEE shal] have the right to self-insure for all insurance requirements hereunder, provided LESSEE'S net worth during said period of self-insurance shall not be less than One Hundred Million Dollars ($100,000,000.00). 18. Landscaoine. LESSEE shall, at all times during the term of the Lease, landscape the open areas of the premises in the same or similaz fashion as shown on LESSEE'S Greenberg Farrow Landscape Plan dated Mazch 15, 2004. LESSOR acknowledges and agrees that (a) LESSEE may change the landscaping from time to time without LESSOR'S consent and (b) comparability, not precise compliance, with the above-referenced landscape plan is all that is required. 19. Termination. At the end of or eazlier termination of this Lease, LESSEE shall, peaceably deliver unto LESSOR possession of the Premises, together with all buildings, in good order and condition, reasonable weaz and teaz excepted. All inventory, trade fixtures, furniture, machinery and equipment that LESSEE uses or installs on the Premises and any other personal property, shall remain LESSEE'S property and may be removed by LESSEE. Furthermore, upon the expiration, termination, and/or revocation of this Lease, should LESSEE fail to remove any and all of LESSEE'S personal property from the Premises, after notice thereof, LESSOR may remove any and all personal property from the Premises and either deem the property abandoned and dispose of the property or place the property in storage at the cost and expense of LESSEE, and LESSEE does agree to pay all costs and expenses for disposal, removal, or storage of the personal property. 20. Conditions Subsequent. This Lease and LESSEE'S obligations hereunder are subject to the satisfaction or waiver of the following conditions subsequent for LESSEE'S benefit within one (1) year of the date hereof: (a) Entitlements. All appropriate governmental agencies and authorities shall have taken all appropriate ministerial and discretionary actions such that all applicable laws, including zoning, use and building ordinances, permit (A) the construction of a building and pazking lot in accordance with the "Home Depot (National Edition) Design Criteria Manual", dated February 21, 2002, as supplemented or amended from time to time, (B) LESSEE'S use of a building on the Premises as a home improvement center selling the types of items currently being sold by Home Depot home improvement centers in the United States, and (C) LESSEE'S right to use the Premises in accordance with a zoning designation which allows (i) staging and temporary storage of merchandise azound the perimeter of LESSEE'S proposed building, (ii) unloading merchandise off of flatbed trucks, (iii) unlimited delivery rights, (iv) the sale of seasonal items in the pazking lot in front of the building, including the sale of Christmas trees in November and December, (v) unlimited sales from an outdoor enclosed garden center, (vi) unlimited sales from the front perimeter sidewalk, and (vii) the sale of food from outdoor and indoor snack bars accompanied by tables and seating purposes (but no larger than 2,000 square feet). The uses described in (A), (B) and (C) above shall be referred to collectively as the ,~o6~o.is 13 "Entitlements". The date that such Entitlements shall be deemed to have been obtained is the date that all appropriate discretionary actions with respect to the Entitlements have become effective and all applicable judicial and non judicial appeal periods with respect thereto shall have expired, with no pending or contesting actions. If despite LESSEE'S efforts as supported by LESSOR, LESSEE is unable to obtain the Entitlements needed to commence and construct to completion LESSEE'S contemplated improvements because of any claims that state land use laws or County zoning, planning or subdivision laws apply to the demised Premises or because of any claims relating to the presence of azchaeological sites or prehistoric or historic remains on the Premises, then LESSEE shall have the option to terminate this Lease and obtain a refund of LESSEE'S lease performance deposit. (b) Title Insurance. LESSEE shall have obtained an ALTA/ACSM Land Title Survey of the Premises and a leasehold title policy from First American Title Insurance Company insuring LESSEE'S leasehold interest in an amount to be determined by LESSEE on an ALTA form and as otherwise acceptable to LESSEE and reflecting only the encumbrances identified on Exhibit "C" (other than that certain License Agreement No. 365 dated Mazch 15, 1995 between LESSOR as "Licensor" and Panaewa Hawaiian Home Lands Community Association and Haola, Inc. as "Licensees" which LESSOR covenants shall, within three (3) months of the Effective Date, be released and reconveyed to the extent necessary so that same thereafrer does not encumber the Premises) ("Permitted Exceptions"). LESSOR shall have complied with all requirements reasonably requested by First American Title Insurance Company in connection with the issuance of such policy. (c) Inspection. LESSEE'S receipt of satisfactory evidence (i) of the absence of any toxic or hazardous materials having been or currently being stored on the Premises or having adversely affected the soil conditions thereof; (ii) that soil conditions are satisfactorily for LESSEE'S contemplated improvements; (iii) that the Office of Environmental Quality Control has published notice of a final Environmental Assessment for the Premises and a Finding of No Significant Impact and all legal challenge periods have expired with no legal challenges having been filed; (iv) that the Premises have been legally subdivided as contemplated hereby; and (v) that there aze no sites of archaeological significance and no prehistoric remains on the Premises that would prevent, diminish or delay LESSEE'S intended use of any part of the Premises. In the event any one or more of the conditions set forth above is not satisfied or waived by LESSEE within one (I) year of the date hereof, LESSEE shall have the option to terminate this Lease, provided, however, that LESSEE must notify LESSOR in writing within thirty (30) days of said first year anniversary date that LESSEE has elected to exercise the option, failing which LESSEE shall be deemed to have waived the option. LESSEE agrees that should LESSEE elect to terminate this Lease, LESSEE shall not be entitled to any compensation for improvements made to the Premises prior to LESSEE'S election or for any rent, bid deposit, or costs or expenses incurred in connection with leasing the Premises up to the date of LESSEE'S election. The election granted LESSEE to terminate the Lease shall not relieve LESSEE from performing all of LESSEE'S obligations under the Lease prior to termination. 21. Processine Fees/Documentation. LESSEE agrees to pay to LESSOR a reasonable fee for LESSOR'S processing of consents and assignments and providing documents required or 330610.18 14 authorized by the terms, covenants, and conditions of this Lease. The amount of the processing fee and documentation fee shall be determined by LESSOR, provided the fee shall not be less than seventy-five dollars ($75.00) nor more than one hundred fifry dollars ($150.00). 22. Underground Storage Tank (UST). A UST is any tank, including underground piping connected to the tank that has at least ten percent (10%) of its volume underground and is used for the storage of certain regulated substances like petroleum or certain hazardous chemical. Prior consent and approval from LESSOR is required for the installation of any UST on the Premises, which consent and approval shall not be unreasonably withheld or delayed. All USTs aze considered trade fixtures and aze to be removed upon termination or expiration of the Lease by LESSEE. IF LESSEE has installed a UST, then and in such event, LESSEE shall anange, at its sole cost and expense, for the removal of any such UST at the end of the term of this Lease and upon such removal shat] arrange to be provided to LESSOR within ninety (90) days after the end of such Lease term a satisfactory UST closure report prepazed by a recognized Hawaii environmental engineer and accepted by the Department of Health of the State of Hawaii. If any clean up procedures and/or remediation is necessary as a result of the installation of such UST then and in such event, LESSEE shall arrange to have all such work done, at LESSEE's sole cost and expense, by an environmental engineering company reasonably acceptable to LESSOR, in accordance with all then applicable regulations and requirements of the State of Hawaii, Department of Health. 23. Non-warranty. LESSOR does not make any warranties with respect to the condition of the Premises, and the Premises are being leased "AS IS". Any provisions of this Lease which permit or provide for abatement of the annual base rental in specified circumstances shall not be deemed to be warranties. ARTICLE FIVE IT IS HEREBY UNDERSTOOD AND AGREED BY AND BETWEEN THE PARTIES AS FOLLOWS: 1. Morteaee. Upon due application and with the written consent of LESSOR, which consent shall not be unreasonably withheld or delayed, LESSEE may mortgage this Lease, or any interest therein, or create a security interest in the leasehold or interest. Any mortgage consented to by LESSOR pursuant to this paragraph shall be deemed an "Approved Mortgage" for purposes of all other provisions of this Lease and the holder of such mortgage shall be deemed an "Approved Mortgagee". If the mortgage or security interest is to an institution legally permitted to make mortgage loans in the State of Hawaii the consent shall extend to foreclosure and sale of LESSEE'S interest at the foreclosure to any purchaser, including Mortgagee, without regard to whether or not the pwchaser is qualified to lease the Premises. The interest of Mortgagee or holder shall be freely assignable. The term "holder" shall include Mortgagee and an insurer or guarantor of the obligation or condition of mortgage, including the Department of Housing and Urban Development through the Federal Housing Administration, the Federal National Mortgage Association, the Veterans Administration, the Small Business Administration, Farmers Home Administration, or any other federal agency and their respective successors and assigns or any lending institution authorized to do business in the State of Hawaii, 33Q610.IS 15 or elsewhere in the United States; provided, that the consent to mortgage to anon-governmental holder shall not confer any greater rights or powers in the holder than those which would be required by any of these federal agencies. If an Approved Mortgagee of this Lease ("Mortgagee") shall deliver to LESSOR an executed counterpart of the leasehold mortgage (the "Mortgage") in form proper for recording together with a written notice setting forth the name and address of Mortgagee, then, until the time, if any, that the Mortgage shall be satisfied or Mortgagee shall give to LESSOR written notice that Mortgage has been satisfied: (a) No mutual cancellation, surrender, acceptance of surrender or modification of this Lease shall be binding upon Mortgagee or affect the lien of the Mortgage, without the prior written consent of Mortgagee. (b) No notice, demand, election or other communication required or pemvtted to be given under the Lease (all of the foregoing hereinafter in this Section 1 of Article Five collectively being referred to as "notices", and each of them as a "notice") which shall be given by LESSOR to LESSEE shall be binding upon or affect Mortgagee, unless a copy of said notice shall be given to Mortgagee within the time when such notice shall be required or permitted to be given to LESSEE. In the case of an assignment of the Mortgage or change in address of Mortgagee, the assignee thereof or Mortgagee, by notice to LESSOR, may change the address to which copies of notices aze to be sent as herein provided. LESSOR shall not be bound to recognize any assignment of the Mortgage unless and until LESSOR shall be given a notice of such assignment, including a copy thereof in the form proper for recording, together with the name and address of assignee and, thereafter, until a further assignment, the assignee named in such assignment shall be deemed to be "Mortgagee" under this Section 1. If the Mortgage is held by more than one person, corporation or entity, no provision of this agreement requiring LESSOR to give a notice or copy of any notice to Mortgagee shall be binding upon LESSOR unless and until all of the holders of the Mortgage shall designate in writing one of their members to receive all notices and copies of notices and shall have given to LESSOR an original executed counterpart of the designation in form proper for recording. All notices and copies of notices to be given to Mortgagee as provided in this section shall be given in the same manner as is provided in this Lease in respect of notices to be given by LESSOR or LESSEE. (c) Mortgagee shall have the right to perform any term, covenant, condition or agreement and to remedy any default by LESSEE under the Lease, and LESSOR shall accept such performance by Mortgagee with the same force and effect as if furnished by LESSEE; provided, however, that Mortgagee shall not thereby or hereby be subrogated to the rights of LESSOR. (d) If LESSOR shall give a notice of default to LESSEE pursuant to the provisions of this Lease, and if such default shall not be remedied within the applicable cure period provided for in this Lease, and LESSOR shall thereby, or otherwise, become entitled to give a notice of election to terminate the Lease, then, before giving any such notice of election to terminate the Lease, LESSOR shall give to Mortgagee not less than sixty (60) days' additional written notice LESSEE'S failure to cure the default, and shall allow Mortgagee such additional 330610.18 16 sixty (60) days within which to cure the default, provided, however, that if the default can be cwed by the payment of money, the additional time for Mortgagee to cure, shall be limited to thirty (30) days. (e) LESSEE may delegate irrevocably to Mortgagee the authority to exercise any or all of LESSEE'S rights under this Lease, but no such delegation shall be binding upon LESSOR unless and until either LESSEE or Mortgagee shall deliver to LESSOR a signed counterpart, in form proper for recording, of a written instrument effecting such delegation. Such delegation of authority may be effected by the terms of the Mortgage itself, in which case the service upon LESSOR of an executed counterpart of the Mortgage in accordance with this Section 1 or Article Five, together with a written notice specifying the provisions therein which delegate such authority to Mortgagee, shall be sufficient to give LESSOR notice of such delegation. Any provision of this Lease which gives to Mortgagee the privilege of exercising a particulaz right of LESSEE hereunder on condition that LESSEE shall have failed to exercise such right shall not be deemed to diminish any privilege which Mortgagee may have, by virtue of a delegation of authority from LESSEE, to exercise such right without regard to whether or not LESSEE shall have failed to exercise such right. (f) In case of a default by LESSEE in the performance or observance of any term, covenant, condition or agreement on LESSEE's part to be performed under the Lease, other than a term, covenant, condition or ageement requiring the payment of a sum of money, and notwithstanding Section 1(d) above, and provided LESSOR shall not be subjected to any criminal liability, LESSOR shall not serve a notice of election to terminate the Lease, or otherwise terminate the leasehold estate of LESSEE hereunder by reason of such default, if and so long as: (i) In the case of a default which cannot practicably be cwed by Mortgagee without taking possession of the Premises, Mortgagee shall proceed diligently to obtain possession of the Premises as mortgagee (through the appointment of a receiver of otherwise), and, upon obtaining possession, shall promptly commence and duly prosecute to completion such action as may be necessary to cure such default; and (ii) in the case of default which cannot practicably be cured by Mortgagee, Mortgagee shall promptly institute and diligently prosecute to completion forecloswe proceedings, unless, in the meantime, Mortgagee shall acquire LESSEE'S estate hereunder, either in its own name or through a nominee, by assignment in lieu of foreclosure. Mortgagee shall not be required to continue to proceed to obtain possession, or to continue in possession as mortgagee, of the Premises pursuant to Clause (i) above, or to continue to prosecute forecloswe proceedings pursuant to Clause (ii) above, if and when such default shall be cured. Nothing herein shall preclude LESSOR from exercising any of its rights or remedies with respect to any other default by LESSEE dwing any period when LESSOR shall be forbeazing termination of this Lease as above provided, but in such event Mortgagee shall have all of the rights and protections hereinabove provided for. 3aosio.ia 17 (g) In the event of the commencement of a bankruptcy proceeding by or against LESSEE, LESSOR agrees and acknowledges for the exclusive benefit of Mortgagee and any person or entity acquiring an interest in the Lease in or in lieu of the foreclosure of the Mortgage, that the actual or deemed rejection of the Lease under Section 365 of the Bankruptcy Code or any other law having similar effect, shall not effect a termination of the Lease or affect or impair Mortgagee's lien thereon or rights with respect thereto, provided however, that this provision is not intended and shall not be deemed to confer any rights or benefits upon LESSEE or LESSEE's bankruptcy trustee, and upon written request of Mortgagee delivered to LESSOR within thirty (30) days following Mortgagee's receipt of written notice of such actual or deemed rejection of the Lease, LESSOR will, at the option of Mortgagee, execute and deliver to Mortgagee or its designee an instrument (in form acceptable to Mortgagee or its designee) recogni2ing, confirming and giving legal effect to the continued existence of the Lease, with its original validity and priority, in favor of Mortgagee or its designee (hereinafter called the "Confirmation of Lease"), subject to the lien of the Mortgage and any lien or encumbrance prior to the lien of the Mortgage, upon and subject to the following terms and conditions: (i) Mortgagee shall pay or cause to be paid to LESSOR at the time of execution and delivery of the Confirmation of Lease, any and all sums which are at the time of execution and delivery thereof due under the Lease and, in addition thereto, all reasonable expenses, including reasonable attorneys' fees, which LESSOR shall have incurred by reason of the actual or deemed rejection of the Lease and the execution and delivery of the Confirmation of Lease; (ii) Mortgagee or its designee shall undertake, by accepting the Confirmation of Lease, to perform all covenants and conditions of the Lease reasonably capable of performance by Mortgagee or such other person or entity. Mortgagee or its designee, as the case may he, may assign the Lease or may foreclose upon the Mortgage without further consent of LESSOR and Mortgagee or its designee shall thereupon be released from all liability for the performance or observance of the covenants and conditions in such Lease contained and on LESSEE'S part thereunder to be performed and observed from and after the date of such assignment by Mortgagee or its designee or upon foreclosure, provided that a certified copy of such assignment be provided to LESSOR; (iii) Mortgagee or its designee under the Lease shall be entitled to and shall have the same right, title and interest in and to the Premises and the buildings and Improvements thereon as LESSEE had under the Lease prior to its rejection and LESSOR shall use its best efforts to obtain the cooperation of all parties in interest such that any Confirmation of Lease made pursuant to this Agreement shall be prior to any mortgage or other lien, chazge or encumbrance on the fee of the demised Premises, which mortgage, lien, chazge or encumbrance was junior to the Lease; and (iv) Each sublessee of a portion of the Premises whose sublease was in force and effect immediately prior to the delivery of said Confirmation of Lease shall attorn to LESSEE under the Confirmation of Lease, unless said LESSEE shall, at its option, elect to dispossess said sublessee or otherwise terminate the sublease held by said sublessee. Each 330610.18 18 sublessee who hereafter subleases a portion of the Premises shall be deemed to have agreed to the provisions of this subparagraph (iv). (h) In the event that Hawaii Revised Statutes, § 171-21 gives Mortgagee any longer period to cure any default by LESSEE or take any other action with respect to such default, then Mortgagee shall be entitled to the longer period. 2. Breach. Time is of the essence of this agreement and if LESSEE shall become bankrupt, or shall abandon the Premises, or if this Lease and the Premises shall be attached or taken by operation of law, or if any assignment is made of LESSEE'S property for the benefit of creditors, or if LESSEE shall fail to observe and perform any of the material terms, covenants and conditions contained in this Lease and on its part to be observed and performed, LESSOR shall deliver a written notice of the breach or default by service, as provided by Section 634-35, or 634-36, Hawaii Revised Statutes, or by registered mail, or certified mail to LESSEE at its last known address, and to each mortgagee or holder of record having a security interest in the Premises, making demand upon LESSEE to cure or remedy the breach or default within sixty (60) days from the date of receipt of the notice [if such default is by its nature not reasonably susceptible of being cured within such 60 day period, such 60 day period shall be extended as necessary to provide LESSEE the opportunity to cure the default, provided LESSEE within said period commences and thereafter diligently proceeds to cure such default without interruption until such cure is completed]; provided that where the breach involves a failure to make timely rental payments pursuant to the Lease, the written notice shall include a demand upon LESSEE to cure the breach within less than sixty (60) days, but not less than ten (10) business days, after receipt of the notice. Upon failure of LESSEE to cure or remedy the breach or default within the time period provided herein or within such additional period as LESSOR may allow for good cause, LESSOR may, subject to the provisions of Section 171-21, Hawaii Revised Statutes, and subject also to Sections 1(d) and 1(f) of Article Three above, at once re-enter the Premises or any part, and upon or without such entry, at its option, terminate this Lease without prejudice to any other remedy or right of action for azreazages of rent and interest at the legal rate pursuant to Section 478, Hawaii Revised Statutes, or for any preceding or other breach of contract; and in the event of termination, all buildings and improvements shall remain and become the property of LESSOR; furthermore, LESSOR shall retain all rent paid in advance as payment towazd LESSOR'S damages. 3. Rights of Holder of Record of a Security Interest. In the event LESSOR seeks to forfeit the privilege, interest, or estate created by this Lease, each recorded holder of a security interest may, at its option, cure or remedy the default or breach, if the same can be cured or remedied by the payment of money or, if such is not the case, by performing or undertake in writing to perform all the terms, covenants and conditions contained in the Lease on LESSEE'S part to be performed, capable of performance by the holder, as determined by LESSOR, within the time period provided in Section 17]-20, Hawaii Revised Statutes, or within any additional period allowed under Sections 1(d) and 1(f) of Article Five above, and add the cost to the mortgage debt and the lien of the mortgage. Upon failure of the holder to exercise its option, LESSOR may: (a) pay to the holder from any monies at its disposal the amount of the mortgage debt, together with interest and penalties, and secure an assignment of the debt and mortgage from the holder or if ownership of the privilege, interest or estate shall have vested in the holder i30610.I8 19 by way of foreclosure, or action in lieu thereof, LESSOR shall be entitled to the conveyance of the privilege, interest or estate upon payment to the holder of the amount of the mortgage debt, including interest and penalties, and all reasonable expenses incurred by the holder in connection with the foreclosure and preservation of its security interest, less appropriate credits, including income received from the privilege, interest or estate subsequent to the foreclosure; or (b) if the property cannot be reasonably reassigned without loss to LESSOR, then terminate the outstanding privilege, interest or estate without prejudice to any other right or remedy for arrearages of rent or for any preceding or other breach or default and use its best efforts to redispose of the affected land to a qualified and responsible person free and cleaz of the mortgage and the debt secured; provided that a reasonable delay by LESSOR in instituting or prosecuting its rights or remedies under this provision and Section 171-21 of the Hawaii Revised Statutes shall not operate as a waiver of these rights or to deprive it of the remedy when it may still otherwise hope to resolve the problems created by the breach or default involved. The proceeds of any redisposition under subparagraph (b) above shall be applied as follows: first, to reimburse LESSOR for costs and expenses in connection with the redisposition; second, to dischazge in full any unpaid purchase price, indebtedness or damages owing LESSOR in connection with the privilege, interest or estate terminated; third, to Mortgagee to the extent of the value received by LESSOR upon redisposition which exceeds the fair mazket lease value of the ]and as previously determined by LESSOR'S appraiser; and fourth, to the owner of the privilege, interest, or estate. 4. Condemnation. If at any time, during the term of this Lease, all or any portion of the Premises should be condemned, or required for public purposes by the State of Hawaii, or any county or city and county, or any other governmental agency or subdivision, then and in any such event, LESSEE and/or those claiming by, through or under LESSEE will be entitled to just compensation to the same extent and according to the same principles and rules of law as if the Premises and all improvements thereon had been condemned by the State of Hawaii under its power of eminent domain, the amount of such just compensation to be determined in the manner set forth in Section 5 of Article Three. Nothing herein contained shall be construed as preventing LESSEE from being entitled to any separate award made to LESSEE for the taking of LESSEE'S personal property, or from claiming all or any portion of its award directly against the condemning authority. The foregoing rights of LESSEE shall not be exclusive of any other to which LESSEE may be entitled by law. In the event that LESSEE reasonably determines that the remainder of the Premises aze rendered unusable as the result of any such condemnation LESSEE shall have the right to surrender the Premises and terminate this Lease pursuant to Section 19 of Article Four upon the delivery of written notice to LESSOR. 5. Right to Enter. LESSOR and agents or representatives shall have the right to enter and cross any portion of the Premises other than the building for the purpose of performing any public or official duties; provided, however, in the exercise of these rights, LESSOR shall not interfere unreasonably with LESSEE or LESSEE'S use and enjoyment of the Premises. 6. Inspection by Prospective Bidders. LESSOR shall have the right to authorize any person or persons to enter upon and inspect the Premises at all reasonable times following a published notice for its proposed disposition for purposes of informing and apprising that person or persons of the condition of the Premises prior to the proposed disposition; provided, however, that any entry and inspection shall be conducted during reasonable hours after notice to enter is 330610.18 7~ first given to LESSEE, and shall, if LESSEE so requires, be made in the company of LESSEE or designated agents of LESSEE; provided, further, that no such authorization shall be given more than two (2) years before the expiration or termination of this Lease. 7. Payment or Acceotance of Rent Not a Waiver. The payment or acceptance of rent shall not be deemed a waiver of any breach by LESSOR or LESSEE of any term, covenant or condition of this Lease, nor of LESSOR's right to re-entry for breach of covenant, nor of the right to declaze and enforce a forfeiture for any such breach, and the failure of LESSOR or LESSEE to insist upon strict performance of any such term, covenant or condition, or to exercise any option conferred, in any one or more instances, shall not be construed as a waiver or relinquishment of any term, covenant, condition or option. 8. Extension of Time. Whenever a party is required to perform an act under this Lease, other than the payment of money, by a certain time, said time shall be deemed extended so as to take into account events of "Force Majeure." "Force Majeure" is any of the following events that prevents, delays, retazds or hinders a party's performance of its duties hereunder: act of God; fire; earthquake; volcanic eruption; flood; explosion; war; invasion; insurrection; riot; mob violence; sabotage; vandalism; inability to procure or general shortage of labor, equipment, facilities, materials or supplies in the open market; failure of transportation; strikes; lockouts; condemnation; requisition; acts of governmental, civil, military or naval authorities; or any other cause, whether similaz or dissimilaz to the foregoing, not within such party's control. 9. Ouiet Enio~ment. LESSOR covenants and agrees with LESSEE that upon payment of the rent at the times and in the manner provided and the observance and performance of these terms, covenants and conditions on the part of LESSEE to be observed and performed, LESSEE shall and may have, hold, possess and enjoy the Premises for the term of the Lease, without hindrance or interruption by LESSOR or any other person or persons by, through or under it. LESSOR shall defend the title to the Premises and the use and occupancy of the same by LESSEE against the claims of all persons, except those claiming by or through LESSEE. LESSOR'S covenant of quiet enjoyment, however, shall not in any way obligate LESSOR to defend or protect the Premises from political protests by Department of Hawaiian Home Lands beneficiaries or others. Notwithstanding the foregoing, LESSOR covenants that it has entered into this Lease in good faith and will not support or advance any activities directed at hindering or interrupting this Lease. Without limiting the foregoing, in the event ownership of the Premises is transferred from LESSOR to another governmental or quasi-governmental agency, including, but not limited to any sovereign government or entity having as its citizens or beneficiaries Native Hawaiians who are beneficiaries under the Hawaiian Homes Commission Act, the transferee will assume, all rights, duties and obligations of LESSOR under this Lease and will agree to not interfere with LESSEE'S quiet enjoyment of the Premises provided LESSEE agrees to attom to the transferee. If LESSOR becomes aware that a transfer of the Premises will occur, LESSOR will promptly notify LESSEE and will take diligent action to insure that the transferee will not interfere with LESSEE'S use of the Premises as set out in this Lease. LESSOR will not ssov~o.is 21 voluntarily transfer its rights to such transferee without written assurance from such transferee that such transferee will not interfere with LESSEE's rights under this Lease. 10. Interest, Costs and Fees. The interest rate on any and all unpaid or delinquent rentals shall be at one percent (1%) per month, plus a service chazge of FIFTY AND NO1100 DOLLARS ($50.00) per month for each month of delinquency. In case of any default by LESSEE in the performance of the terms, covenants and conditions herein contained, LESSEE shall pay to LESSOR any and all costs incurred in connection with the default, including reasonable attorneys' fees. In the event that any indebtedness arising hereunder is placed in the hands of a collector or an attorney for collection, or suit is instituted for collection, LESSEE shall pay, in addition to the indebtedness, reasonable collector'sand/or attorneys' fees, together with all costs. 11. Hazazdous Materials. LESSEE shall not allow the storage or use of hazazdous materials in any manner not sanctioned by law, nor allow to be brought into the Premises any such materials except in the ordinary course of LESSEE'S business. Notwithstanding the above, LESSEE may store and utilize at the Premises standazd materials, products and equipment including, without limitation, petroleum products, pesticides, paints, and other products sold by LESSEE at its home improvement stores nationally. Either parry shall immediately advise the other party in writing of (i) any and all enforcement, clean up, removal, mitigation or other governmental or regulatory actions instituted, contemplated or threatened pursuant to any Hazazdous Materials Laws affecting the Premises, (ii) all claims made or threatened by any third party relating to damage, contribution, cost recovery, compensation, loss or injury resulting from any Hazardous Materials (the matters set forth in clauses (i) and (ii) above are hereinafter referred to as "Hazardous Materials Claims"), (iii) the discovery of any occurrence or condition on the Premises or any real property adjoining or in the vicinity of the Premises which could subject LESSEE, LESSOR or the Premises to any restrictions on ownership, occupancy, transferability or use of the Premises under any Hazardous Materials Laws. If any Hazardous Materials on or released from the Premises shall be discovered during the construction of LESSEE'S store, LESSEE may, at its option, either terminate this Lease by notice to LESSOR, or elect to remove such materials and clean and remediate the Premises and offset the costs of such removal, cleaning and remediation against Base Rent, provided that such offset may not exceed Two Hundred Thousand Dollazs ($200,000). Thereafter LESSEE shall cause any Hazardous Materials on the Premises (except those released on the Premises prior to the commencement of this Lease, or after such commencement by LESSOR or its agents) to be (A) remediated on-site in accordance with applicable Hazazdous Materials Laws, or (B) removed from the Premises for remediation or disposal and to be transported solely by duly licensed Hazardous Materials transporters to duly licensed disposal facilities for final disposal to the extent required by and in accordance with applicable Hazardous Materials Laws, and shall deliver to LESSOR copies of any hazazdous waste manifest reflecting the proper disposal of such Hazazdous Materials. Except in emergencies or as otherwise required by law, LESSEE shall not take any remedial or removal action in response to the presence, release or threatened release of 330610.18 22 any Hazardous Materials on or about the Premises without first giving written notice of the same to LESSOR and obtaining LESSOR'S written consent thereto. LESSEE shall not enter into any legal proceeding or other action, settlement, consent decree or other compromise with respect to any Hazardous Materials Claims without first notifying LESSOR of LESSEE'S intention to do so and affording LESSOR the opportunity to join and participate, as a party if LESSOR so elect, in such proceedings. Except as provided above, LESSEE shall be solely responsible for and shall indemnify, defend and hold harmless LESSOR and LESSOR'S employees, agents, successors and assigns from and against any loss, damage, cost, expense or liability directly or indirectly arising out of or attributable to LESSEE'S use, generation, manufacture, treatment, handling, refining, production, processing, storage, release, threatened release, dischazge, disposal or presence of Hazardous Materials, on, under or about the Premises (except those released on the Premises prior to the commencement of this Lease, or afer such commencement by LESSOR or its agents), including (A) the costs of any required or necessazy removal, repair, cleanup or remediation of the Premises, and the preparation and implementation of any closure, removal, remedial or other required plans; and (B) all reasonable costs and expenses incurred by LESSOR in connection therewith, including, without limitation, reasonable attorneys' fees. Within thirty (30) days of receipt thereof, LESSEE shall provide LESSOR with a copy of any and all environmental assessments, audits, studies and reports regazding LESSEE'S past or current activities on the Premises or the environmental condition of the Premises, in each case, in LESSEE'S possession or control. LESSEE agrees to indemnify, defend, and hold LESSOR harmless, from any damages and claims resulting from the release of hazazdous materials on the Premises occurring while LESSEE is in possession or elsewhere if caused by LESSEE or persons acting under LESSEE. This paragraph shall not apply to hazardous materials present on, under or about the Premises on the Effective Date or released after such date by LESSOR or its agents. These covenants shall survive the expiration or earlier termination of the Lease. LESSOR agrees to indemnify, defend, and hold LESSEE harmless, from any damages and claims resulting from the release of hazardous materials on the Premises prior to the execution of this Lease or released after such date by LESSOR or its agents so long as evidence of same exists. If LESSOR is unwilling to remove any such existing Hazazdous Materials then LESSEE may elect to (a) terminate this Lease or (b) expend such sums as are reasonably necessazy to correct the condition and to offset same against rent hereunder. These covenants shall survive the expiration or eazlier termination of the Lease. The covenants of this Section 11 of Article Five, including, without limitation, the indemnification provisions, shall survive the expiration or termination of this Lease, or any termination of LESSEE'S interest in the Premises. 12. Hawaii Law/Filine. This Lease shall be construed, interpreted, and governed by the laws of the State of Hawaii. This Lease shall not be recorded although the parties agree to duly execute and file with the $ureau of Conveyances a memorandum of this Lease in 330610.18 23 substantially the form of Exhibit "D" attached hereto. LESSOR warrants that it has made a good faith effort to determine whether native Hawaiian traditional and customary rights have been exercised on the property and has found no evidence of such exercise. 13. Recitals and Exhibits -Incorporation in Lease. All recitals first above set forth and exhibits attached to this Lease are hereby aze deemed incorporated by reference. 14. Partial Invalidity. If any term, provision, covenant or condition of this Lease should be held to be invalid, void or unenforceable, the remainder of this Lease shall continue in full force and effect and shall in no way be affected, impaired or invalidated thereby. I5. Notice. Except as otherwise required by Chapter 171, Hawaii Revised Statutes, any notice, request, offer, approval, consent or other communication required or permitted to be given by or on behalf of either party to the other shall be given or communicated in writing by personal delivery, reputable overnight courier service which keeps receipts of deliveries (i.e., Federal Express), or United States certified mail (return receipt requested with postage fully prepaid) or express mail service addressed to the other Party as follows: If to LESSEE: Home Depot U.S.A., Inc. 2727 Paces Ferry Road Atlanta, Georgia 30339 Attention: Legal Department Copy to: Home Depot U.S.A., Inc. 3800 West Chapman Avenue Orange, California 92868 Attention: Real Estate Department and Legal Department Copy to: Kent S. Beyer, Esq. 2029 Century Pazk East 21st Floor Los Angeles, California 90067 If to LESSOR: Department of Hawaiian Homes Land 1099 Alakea Street, 20th Floor Honolulu, Hawaii 96813 Attention: Mr. Manny K. Nova Fax: (808) 586-3923 And a copy to: Attorney General's Office 465 South King Street, Basement Honolulu, Hawaii 96813 Attention: George K. K. Kaeo, Jr., Esq. Fax: (808) 587-2938 330610.18 24 or at such other address as may be specified from time to time in writing by either party. All such notices hereunder shall be deemed to have been given on the date personally delivered or the date mazked on the return receipt, unless delivery is refused or cannot be made, in which case the date of postmark shall be deemed the date notice has been given. 16. Use Restrictions. As material consideration to LESSEE to enter into this Lease LESSOR covenants, warrants and represents to LESSEE that LESSOR will not hereafter lease any land or space within one and one half (1.5) miles of the Premises to, or allow the use of any such leased space by, any tenant or user whose principal business is a home improvement center, lumber yazd or hazdwaze store. 17. Definitions. As used herein, unless clearly repugnant to the context: (a) "Chairman" shall mean the Chairman of the Hawaiian Homes Commission of the Department of Hawaiian Home Lands of the State of Hawaii or his/her successor. (b) For the purpose of this Lease, the term "Hazardous Materials" as used herein shall include any substance, waste or material designated as hazardous or toxic or radioactive or other similar term by any present or future federal, state or local statute, regulation or ordinance, as amended from time to time, including but not limited to the following statutes and regulations promulgated pursuant to them ("Hazardous Materials Laws"): Resource Conservation and Recovery Act of 1976, 42 U.S.C. 6901 et seq. ("RCRA") Comprehensive Environmental Response, Compensation, and Liability Act of 1980 ("CERCLA") amended by Superfund Amendments and Reauthorization Act of 1986 ("SARA"), 42 U.S.C. 9601 et seq. Clean Air Act, 42 U.S.C. Sections 7401 et seq. Clean Water Act of 1977, 33 U.S.C. 1251 et seq. Pesticide Act of 1978, 7 U.S.C. 13 et seq. Toxic Substances Control Act ("TSCA"), 15 U.S.C. 2601 et seq. Safe Drinking Water Act, 42 U.S.C. 300(£1 et seq. Hazardous Materials Transportation Act, 49 U.S.C. 1801 et seq. Chapter 128D, Hawaii Revised Statutes Chapters 342B through 342N, Hawaii Revised Statutes, and including but not limited to petroleum, petroleum based substances, asbestos, polychlorinated-byphenyls ("PCBs"), formaldehyde, and also including any substance designated by federal, state or local regulation, now or in the future, as presenting a risk to human health or the environment. (c) "Holder of record of a security interest" is a person who is the owner or possessor of a security interest in the Premises and who has filed with the Department of Hawaiian Home Lands and with the Bureau of Conveyances of the State of Hawaii a copy of this interest. 330610.18 25 (d) "LESSOR" shall mean and include LESSOR herein, its affiliates, successors or assigns. (e) "LESSEE" shall mean and include LESSEE herein, its heirs, executors, administrators, successors or permitted assigns. (f) The "Premises" shall mean the land leased hereunder. (g) The use of any gender shall include all genders, and if there be more than one lessee, then all words used in the singulaz shall extend to and include the plural. (h) The pazagraph headings throughout this Lease aze for the convenience of LESSOR and LESSEE and aze not intended to construe the intent or meaning of any of the provisions thereof. 18. Consents. In any case where the consent or approval of a party is required hereunder, such consent or approval shall not be unreasonably withheld, delayed or conditioned. 19. Limitation on Obligation to Indemnify. The terms of this Lease to the contrary notwithstanding, each of the parties hereto shall be responsible for damage or personal injury resulting from acts or omissions of such party's employees and agents while acting within the scope of their employment only to the extent that such party's liability for such damage or injury has been determined by a court or otherwise agreed to by such party. LESSOR shall pay for such damages and injury to the extent that funds have been authorized and appropriated by the Legislature of the State of Hawaii for such purpose, and the funds have been allocated by the executive budget process. IN WITNESS WHEREOF, the parties hereto have caused these presents to be executed as of the day and year first above written. State of Hawaii APPROVED BY THE HHC DEPARTMENT OF AI HOME LANDS AT ITS MEETING HELD ON I,~'/~/////(///~~~~ APPROVE AS TO FORM: ]3y " ~ Micah A. Kane, Chairman ~ '`2-'`' f Hawaiian Homes Commission Dep Attorney General ~ LESSOR State of Hawaii " Home Depot U.S.A., Inc., a Delaware corporation ~ By C~~ otrector • Legal LESSEE 330610.18 26 EXHIBIT "A" All of that certain pazcel of land, being a portion of Hawaiian Home Lands at Panaewa, situated between Makaala Street and Puainako Street and between Ohuohu Street and Railroad Avenue, at Waiakea, South Hilo, Island and County of Hawaii, State of Hawaii, described as follows: Beginning at the Northwesterly corner of this pazcel of land, on the South side of Makaala Street the coordinates of said point of beginning referred to Government Survey Triangulation Station "HALAI", being 6,356.77 feet South and 12,385.67 feet East and running by azimuths measured clockwise from True South: 1. 270° 00' 148.31 feet along South side of Makaala Street; thence along the South side of Makaala Street, on a curve to the left with a radius of 1,'730.00 feet, the chord azimuth and distance being: 2. 260° 30' 571.06 feet, thence; 3. 251 ° 00' 0.49 feet along the South side of Makaala Street; thence along the South corner of the intersection of Makaala Street and Railroad Avenue, on a curve to the right with a radius of 30.00 feet, the chord azimuth and distance being: 4. 296° 00' 42.43 feet; 5. 34] ° 00' 680.92 feet along the Westerly side of Railroad Avenue; 6. 90° 00' 805.32 feet along the remainder of Lot 3-B; 7. 180° 00' 318.00 feet along the remainder of Hawaiian Home Lands, along Lot3-A; 8. 90° 00' 166.50 feet along the remainder of Hawaiian Home Lands, along Lot 3-A; 9. 180° 00' 250.00 feet along the remainder of Lot 3-B to the point of beginning and containing an area of 10.687 Acres, as per survey of George S. Yoshimura, Registered Professional Land Surveyor, Certificate No. 2927. 330610.!8 1 EXIIIBIT "B" SUBDIVISION MAP 3,06 io. i s 1 GAM/FlIFWNL c:\DOCivnmla onC SCiGllia\koEOmaCy\tacd Seltiigs\lemporory internel fie\tkNi10\ahifil to kvYN.Gry _ ~ - ~r ~ }dfi i~iSSaa t~'~ga t`i lg g ~ ~ n o a A i~~ i6 ~l ~ m 2 IOi * N n g t ~ egg ~Zi<.`o ~~OZ P d€ V ~ ~ O~ O~ oN ~ E W oo. Z oo\ 0 o ,OL09Z.., 1332l.LS Easement "E-6" " o' y 270'00' - 384.81 gp~ll5_ - _ 236.50 148.31 n N m ~ Ea ent 'E-5" asement "E-3' Easement °E-<" Easement "E-2" ~~'S 90 N u i'Nm Easement "E-1" - N O O ~ DUO V m inm r = g =NJ n~N~~l S 266.50 i 6.--~ B -_---pro A UU _ C 90'00' - 433.00 m -i L Ile ~ D ~ m W N pr Z; HtTJZ 0.0 s W(7 mD'Om ' ~W aun`Oi pn ODD OU I (nA D J m 8 mN 8 0o p o m`^ \~L Z ~ ' C I 90'00' - 805.316 G 270'00 - S ~ J ~ Q O ~ O N O N m ~ wa r pNm COL r NO 040 w OOO O N 4, 1~ N~ 0\L a °I a o- soroo' ~S I o I' 270'00' - N 'o, i r U ~ 44 a06 o,~dN~d nd U fTl 'J oNu m N ~ "LS 9Z.9 98,49.. _ odoa P~ 3~ ~~s a EXHIBIT "C" PERMITTED EXCEPTIONS 1. Tax Assessment and Installment figures not currently available. 2. Electrical easements "E-1" to "E-6", inclusive, as shown on the survey map of John S. Terada, Registered Professional Land Surveyor, dated December 17, 1993, as disclosed by instrument dated July 25, 1995, recorded July 31, 1995 as Regulaz System Document No. 95-098904 of Official Records. 3. Terms and provisions of that certain unrecorded State of Hawaii, Depaztment of Hawaiian Home Lands License Agreement No. 365 dated Mazch 15, 1995, made between the State of Hawaii, Department of Hawaiian Home Lands, "Licensor", and Panaewa Hawaiian Home Lands Community Association and Haola, Inc., a Hawaii non- profit corporation, granting the right and privilege to enter Hawaiian Home Lands as identified as TMK No. (3) 2-2-47:64 (por), further identified as portion of Lot 3-B, containing an area of approximately 24.987 acres, for a term of 30 yeazs commencing Mazch 15, 1995 and terminating on Mazch 14, 2025. 4. Discrepancies, conflicts in boundary lines, shortage in area, encroachments, or any other facts which a correct survey would disclose, and which aze not shown by public records. 130610.18 1 EXHIBIT D MEMORANDUM OF LEASE LAND COURT REGULAR SYSTEM RETURN BY (X) MA1L ()PICK-UP Home Depot U.S.A., Inc. 3800 Wes[ Chapman Avenue Orange, California 42868 Attention: Legal Department TMK No.: (3) 2-2-47: This document contains _ pages MEMORANDUM OF LEASE THIS MEMORANDUM OF LEASE ("Memorandum") is made and entered into as of , 2004, by and between the State of Hawaii, by its DEPARTMENT OF HAWAIIAN HOME LANDS, whose principal place of business is 1099 Alakea Street, 20th Floor, Honolulu, Hawaii 96813, and post office address is P. O. Box 1879, Honolulu, Hawaii 96805, hereinafter called "LESSOR," and HOME DEPOT U.S.A., INC., a Delaware corporation, whose mailing address is 2727 Paces Ferry Road, Atlanta, Georgia 30339, Attention: Legal Department (with a copy to 3800 West Chapman Avenue, Orange, California 92868, Attention: Real Estate Department and Legal Department), hereinafter called "LESSEE. I. TERM AND PREMISES. For a lease term commencing on ,and ending as of midnight on March 31, 2069, upon the provisions set forth in that certain written lease of even date herewith from LESSOR to LESSEE ("Lease"), all of which provisions are specifically made a part hereof as though fully and completely set forth herein, LESSOR leases to LESSEE, and LESSEE leases from LESSOR, that certain real property ("Premises") located at the comer of Makaala Street and Railroad Avenue, at Waiakea, South Hilo, Island of Hawaii, Hawaii, comprising 10.687 acres, more or less, of Hawaiian Home 330610 18 2 Lands, more particulazly described in Exhibit "A", together with all rights of ingress and egress and all other rights appurtenant to said Premises including, without limitation, the right to use the building to be constructed on the Premises for the purposes contemplated in the Lease, all of which rights aze more particulazly described in the Lease. 2. USE. LESSEE is granted the right to use the Premises for a home improvement store and any other uses permitted by the applicable County zoning. 3. PURPOSE OF MEMORANDUM OF LEASE. This Memorandum is prepared for the purpose of providing for record notice of the Lease, and in no way modifies the express and particulaz provisions of the Lease. 4. FOR THE BENEFIT OF THE PREMISES. LESSOR and LESSEE intend that the covenants, conditions and restrictions described and referred to herein shall be both personal to LESSOR and LESSEE and binding on their successors and assigns. Each successive owner of the Premises or of any portion thereof, and each person having any interest therein derived through any owner thereof, shall be bound by such covenants, conditions and restrictions for the benefit of the Premises. IN WITNESS WHEREOF, the parties hereto have caused these presents to be executed as of the day and year first above written. State of Hawaii APPROVED BY THE HHC DEPARTMENT OF HAWAIIAN HOME LANDS AT 1TS MEETING HELD ON APPROVED AS TO FORM: BY Micah A. Kane, Chairman Hawaiian Homes Commission Deputy Attorney General LESSOR State of Hawaii Home Depot U.S.A., Inc., a Delawaze corporation By LESSEE 3306I0.IS 3 EXHIBIT "A" All of that certain parcel of land, being a portion of Hawaiian Home Lands at Panaewa, situated between Makaala Street and Puainako Street and between Ohuohu Street and Railroad Avenue, at Waiakea, South Hilo, Island and County of Hawaii, State of Hawaii, described as follows: Beginning at the Northwesterly comer of this pazcel of land, on the South side of Makaala Street the coordinates of said point of beginning referred to Government Survey Triangulation Station "HALM", being 6,356.77 feet South and 12,385.67 feet East and running by azimuths measured clockwise from True South: 1. 270° 00' 148.31 Feet along South side of Makaala Street; thence along the South side of Makaala Street, on a curve to the left with a radius of 1,730.00 feet, the chord azimuth and distance being: 2. 260°30' 571.06 feet, thence; 3. 251 ° 00' 0.49 feet along the South side of Makaala Street; thence along the South comer of the intersection of Makaala Street and Railroad Avenue, on a curve to the right with a radius of 30.00 feet, the chord azimuth and distance being: 4. 296° 00' 42.43 feet; 5. 341 ° 00' 680.92 feet along the Westerly side of Railroad Avenue; 6. 90° 00' 805.32 feet along the remainder of Lot 3-B; 7. 180° 00' 318.00 feet along the remainder of Hawaiian Home Lands, along Lot3-A; 8. 90° 00' 166.50 feet along the remainder of Hawaiian Home Lands, along Lot 3-A; 9. 180° 00' 250.00 feet along the remainder of Lot 3-B to the point of beginning and containing an area of 10.687 Acres, as per survey of George S. Yoshimura, Registered Professional Land Surveyor, Certificate No. 2927. 330610.18 4 STATE OF ) SS. COUNTY OF ) On this day of 2004, before me appeazed to me personally known, who, being by me duly sworn or affirmed did say that did say that she is the for HOME DEPOT U.S.A., INC., a Delaware corporation and such person executed the foregoing instrument on behalf of said corporation as the free act and deed of such person and in the capacities shown having been authorized to execute such instrument in such capacity. Print or Type Name Notary Public, State of Hawaii My Commission expires: sao6~o.is 5