Document:

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                                                                   EXHIBIT 10.25

                  GLOBAL MASTER LEASE AND FINANCING AGREEMENT

This Global Master Lease and Financing Agreement (together with Schedule 1, this
"Global Agreement", and together with the Addenda for those countries listed on
Schedule 1 attached to and made a part of this agreement, this "Agreement"),
dated as of November 22, 2000, is by and between Compaq Financial Services
Corporation ("we", "us" or "our") and Digital Island, Inc. ("you" or "your"),
and can be identified by Global Agreement Number 100909.

1.  MASTER AGREEMENT; AFFILIATES; SCHEDULES; COUNTRY SPECIFIC TERMS.

(a)  Master Agreement.  This Agreement states the general terms and conditions
     upon which in any country listed on Schedule 1 in which we can do leasing
     and/or financings we or Lessor Affiliates (as defined in paragraph (b)
     below) will (a) lease to you or Lessee Affiliates (as defined in paragraph
     (b) below) and you or Lessee Affiliates will lease from us items of
     tangible equipment ("Hardware"), copies of computer software programs owned
     or licensed by us ("Software") or both (such Hardware and Software
     collectively, "Equipment"), and (b) provide financing to you or Lessee
     Affiliates for software program license fees, maintenance fees, fees for
     other services and other one-time charges ("Financed Items") you or Lessee
     Affiliates desire to finance under this Agreement.

(b)  Affiliates.  You understand and agree that we or any subsidiary
     corporation, or any affiliate corporation that is controlled or owned by,
     or is under common control or ownership with, us (individually, a "Lessor
     Affiliate" and, collectively, "Lessor Affiliates") may, as a lessor,
     execute Schedules (as defined in paragraph (c) below) under this Agreement,
     in which event the terms and conditions of the applicable Schedule and this
     Agreement as it relates to the lessor under such Schedule will be binding
     upon and will inure to the benefit of us or such Lessor Affiliate signing
     such Schedule as lessor, as well as any successors or assigns of such
     lessor.  We understand and agree that you or any subsidiary corporation, or
     any affiliate corporation that is controlled or owned by, or is under
     common control or ownership with, you (individually, a "Lessee Affiliate"
     and, collectively, "Lessee Affiliates"), may enter into Leases and/or
     Financings (each as defined in paragraph (c) below) under and subject to
     the terms and conditions of this Agreement by executing a Schedule
     incorporating this Agreement by reference.  In the case of such a Schedule
     executed by a Lessee Affiliate, such Lessee Affiliate will be deemed, for
     purposes of that Schedule, to be "you" under this Agreement as it relates
     to the lessee under such Schedule. You now unconditionally guarantee to us
     the full and prompt payment, observance and performance when due of all
     obligations of all Lessee Affiliates (collectively, "Guaranteed
     Obligations"), whether now existing or later arising, under all such
     Schedules.  This guarantee is absolute, continuing, unlimited and
     independent and will not be affected, diminished or released for any
     reason.  You waive (i) diligence, presentment, demand for payment, protest
     or notice of any Lessee Default (as defined in Section 19) or
     nonperformance by any Lessee Affiliate, (ii) notice of waivers or
     indulgences given to you or any Lessee Affiliate, and any extensions,
     renewals or amendments to any Fundamental Agreement, Lease or Financing,
     and (iii) all defenses, offsets and counterclaims against us, any right to
     the benefit of any security or statute of limitations, and any requirement
     that we proceed first against a Lessee Affiliate or any collateral
     security.  Until the Guaranteed Obligations have been paid and performed in
     full, you will not have any right of subrogation.

(c)  Schedules.  If we and you agree to a lease of particular Equipment
     ("Lease") and/or financing of particular Financed Items ("Financing"), each
     item of Equipment and/or Financed Item will be described on a Schedule,
     which Schedule will incorporate this Agreement by reference. "Schedule"
     means, unless the context otherwise requires, (a) in the case of a Lease or
     Financing commenced
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     pursuant to Section 2.B, a Schedule executed by you and us pursuant to
     Section 2.B(a), and (b) in the case of a Lease or Financing commenced
     pursuant to Section 2.C, prior to your execution and delivery to us of a
     Consolidating Schedule pursuant to Section 2.C(e) relating to that Lease or
     Financing, the applicable APA Acceptance Certificate together with the
     applicable Advance Pricing Agreement, and from and after your execution and
     delivery to us of a Consolidating Schedule pursuant to Section 2.C(e)
     relating to that Lease or Financing, the Consolidating Schedule. Each
     Schedule will constitute a separate Lease and/or Financing. If specific
     terms of a Schedule conflict with the terms of this Agreement, the
     provisions of the Schedule will control.

(d)  Country Specific Terms.  We and you agree that this Agreement will govern
     Leases and Financings in the countries listed on Schedule 1 and that the
     terms and conditions in the Addendum for a particular country are unique to
     that country and apply only to Schedules where the Equipment is located
     and/or the Financed Items are delivered to you in that country.  If you and
     we agree, additional countries may be added to Schedule 1.  Each reference
     in this Global Agreement to a Schedule or Schedule in the form of Exhibit
     A, an Advance Pricing Agreement or Advance Pricing Agreement in the form of
     Exhibit B, a Consolidating Schedule or Consolidating Schedule in the form
     of Exhibit C, an Acceptance Certificate or Acceptance Certificate in the
     form of Exhibit D, or an APA Acceptance Certificate or APA Acceptance
     Certificate in the form of Exhibit E, is a reference to that document in
     the form attached to the applicable country Addendum.

2.  COMMENCEMENT.

     A.        STANDARD PROCEDURE AND FUNDING CONSOLIDATION PROCEDURE. You may
          enter into Leases or Financings or both with us using the Standard
          Procedure or the Funding Consolidation Procedure. A Lease or a
          Financing is entered into using the "Standard Procedure" when you and
          we execute a completed Schedule in the form of Exhibit A. If you and
          we wish to enter into Leases or Financings or both using the "Funding
          Consolidation Procedure", you and we must first execute an Advance
          Pricing Agreement in the form of Exhibit B.

     B.   STANDARD PROCEDURE AND ADJUSTMENTS.

     (a)  If a completed Schedule in the form of Exhibit A is signed by you and
     us, and an Acceptance Certificate in the form of Exhibit D accepting
     Equipment or Financed Items described in that Schedule is executed by you
     and delivered to us, we agree to:

          (i)   purchase any Equipment described in that Schedule and that
                Acceptance Certificate and enter into a Lease of that Equipment
                with you; and

          (ii)  fund any Financed Items described in that Schedule and that
                Acceptance Certificate and enter into a Financing of those
                Financed Items with you.

     (b)  We have no obligation to purchase any Equipment or fund any Financed
     Items unless we have received an Acceptance Certificate in respect of that
     Equipment or those Financed Items, respectively, executed by you before the
     Pricing Expiration Date specified in the Schedule.

     (c)  Each Lease and/or Financing evidenced by a Schedule is a separate
     Lease and/or Financing transaction.

     (d)  The provisions of a Schedule will prevail over the provisions of this
     Agreement to the extent of any inconsistency between them.

     (e)  If the total cost of Equipment and/or Financed Items detailed in the
     final invoice from the relevant Supplier (the "Final Invoice Amount") is
     different from the Total Cost specified in the relevant Schedule, we may
     amend the Total Cost and the Rent payments in the Schedule to take account
     of the Final Invoice Amount.

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     (f)  If the Final Invoice Amount exceeds the estimated Total Cost by more
     than 5%, we must obtain your written approval before making any adjustments
     to the Schedule. If you do not give your approval to the proposed
     adjustments within 15 days of our request, then the affected Schedule will
     terminate. On the termination of that Schedule, you will be responsible for
     all obligations arising under the applicable Purchase Documents (as defined
     in Section 6), including the obligation to purchase Equipment and fund
     Financed Items.

     (g)  If the description of Equipment and Financed Items in a Schedule
     differs from the description of the Equipment and the Financed Items in the
     related Acceptance Certificate, we may amend the Schedule to conform the
     description of the Equipment and the Financed Items in the Schedule to the
     description set out in the Acceptance Certificate.

     (h)  All references in this Agreement and any Schedule to Total Cost, Rent
     (as defined in Section 4), Equipment and Financed Items must be read as
     references to Total Cost, Rent, Equipment and Financed Items as adjusted in
     accordance with this Section 2.B.

     C.   FUNDING CONSOLIDATION PROCEDURE.

     (a)  If an Advance Pricing Agreement in the form of Exhibit B is signed by
     you and us, we agree, subject to the provisions of Section 2.C(b), to:

     (i)   purchase Equipment of the type described in the Advance Pricing
     Agreement and enter into Leases of that Equipment with you; and

     (ii)  fund Financed Items of the type described in the Advance Pricing
     Agreement and enter into Financings of the Financed Items with you.

     (b)  We are not required to purchase Equipment or fund Financed Items under
     an Advance Pricing Agreement if:

     (i)   the purchase or funding would result in the Amount Available
     specified in that Advance Pricing Agreement being exceeded; or

     (ii)  a Lessee Default has occurred and is continuing under this Agreement
     or in respect of any Lease or Financing; or

     (iii) you have failed to comply with your obligation to supply financial
     statements under Section 2.C(j); or

     (iv)  in our sole opinion, a material adverse change in your financial or
     operating condition has occurred since the date of your last financial
     statements delivered to us before the execution of the Advance Pricing
     Agreement; or

     (v)   we have not received during the Commitment Period specified in that
     Advance Pricing Agreement an APA Acceptance Certificate in the form of
     Exhibit E accepting that Equipment or those Financed Items which has been
     executed by you.

     (c)  Until you have executed and delivered a Consolidating Schedule to us,
     each Lease or Financing entered into under Section 2.C(a) evidenced by an
     APA Acceptance Certificate executed and delivered by you and accepted by us
     will: (i) be governed by the terms of this Agreement, the applicable
     Advance Pricing Agreement and applicable APA Acceptance Certificate; and
     (ii) constitute a separate Lease or separate Financing, as the case may be.

     (d)  If the provisions of an APA Acceptance Certificate are inconsistent
     with the provisions of an Advance Pricing Agreement or this Agreement, then
     the provisions of the APA Acceptance Certificate will prevail to the extent
     of the inconsistency. If the provisions of an Advance Pricing Agreement are
     inconsistent with the provisions of this Agreement, then the provisions of
     the Advance Pricing Agreement will prevail to the extent of the
     inconsistency.

     (e)  All Leases and Financings commenced during a Consolidation Period
     specified in an Advance Pricing Agreement must be consolidated into a
     Consolidating Schedule in the form of Exhibit C in accordance with Sections
     2.C(f) and 2.C(g).

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     (f)  We will deliver a Consolidating Schedule to you at the end of each
     Consolidation Period.  You must execute and return a correct and complete
     Consolidating Schedule to us within 15 days of receiving it.

     (g)  When you have executed and returned a Consolidating Schedule to us:

     (i)   the Consolidating Schedule supersedes the Advance Pricing Agreement
     and each related APA Acceptance Certificate executed during the applicable
     Consolidation Period in respect of all Leases and Financings entered into
     during such Consolidation Period;

     (ii)  all Leases and Financings entered into during the applicable
     Consolidation Period will be consolidated into one Lease and one Financing
     and that Lease and Financing will be governed by the Consolidating
     Schedule; and

     (iii) if there is any inconsistency between the provisions of this
     Agreement and the provisions of Consolidating Schedule, the provisions of
     the Consolidating Schedule will prevail to the extent of the inconsistency.

     (h)  If you do not comply with your obligations under Section 2.C(f) within
     15 days of notice from us, we may exercise our rights under Section 20 of
     this Agreement at any time. Any delay or failure by us to exercise those
     rights does not operate as a waiver of those rights.

     (i)   Until you execute and deliver a Consolidating Schedule to us, Rent is
     payable in accordance with the applicable Advance Pricing Agreement and APA
     Acceptance Certificates.

     (j)  At all times during which an Advance Pricing Agreement is effective,
     you must deliver to us your quarterly and annual financial statements no
     later than 60 days after the end of each of your fiscal quarters or 120
     days after the end of each of your fiscal years, as applicable. The annual
     financial statements supplied under this clause must be audited by an
     independent auditor reasonably acceptable to us.

3.   ACCEPTANCE; INITIAL TERM AND TERM; AUTOMATIC EXTENSION.

     (a)  Acceptance. As soon as reasonably practicable after Equipment and, if
     applicable, related Financed Items, are delivered to you, you agree to
     inspect them to determine if they are in good working order or otherwise
     acceptable to you.  On the date that you have completed such inspection,
     you will unconditionally and irrevocably accept all Equipment under a Lease
     and, if applicable, all related Financed Items subject to a Financing (the
     "Acceptance Date").  You will evidence that acceptance by executing and
     delivering to us a properly completed Acceptance Certificate in the form of
     Exhibit D where the Lease or Financing is effected using the Standard
     Procedure, or APA Acceptance Certificate in the form of Exhibit E where the
     Lease or Financing is effected using the Funding Consolidation Procedure,
     as soon as practicable after a satisfactory inspection is capable of being
     completed, or, where you only enter into a Financing without also entering
     into a Lease, on or before the date on which we make funds available to the
     Seller of that Financed Item to pay for that Financed Item or to you to
     reimburse you for your payment of that Financed Item ("Funding Date").

     (b)  Initial Term of Leases and Term of Financings. The Initial Term of
     each Lease and, if applicable, the Term of any related Financing stated in
     and evidenced by a Schedule will begin on the Acceptance Date of the
     Equipment subject to that Lease and will continue for the period described
     in the applicable Schedule; the Term of each Financing stated in and
     evidenced by a

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     Schedule that is unrelated to any Lease will begin on the Acceptance Date
     for the related Financed Items and will continue for the period described
     in the applicable Schedule.

     (c)  Automatic Extension of Lease Terms.  As an accommodation to Lessee,
     Lessor agrees to use its best efforts to provide written notice to Lessee
     one hundred twenty (120) days prior to the expiration of the Initial Term
     that an End-of-Term notice is due, provided, however, that the failure of
     Lessor to provide Lessee with said notice shall not be deemed to have
     relieved Lessee of any of its obligations or liabilities under this
     Agreement.  The Initial Term and any renewal term you and we may have
     agreed to will be automatically extended for successive one month periods,
     unless either party gives the other party sixty days prior written notice
     that it intends to terminate the Lease at the end of the Initial Term, at
     the end of the applicable renewal term or during the month-to-month
     automatic extension period.  For each calendar month that the Initial Term
     or applicable renewal term is automatically extended under this Section
     3(c), you will pay Rent on a monthly basis in an amount equal to the
     monthly Rent payment in effect immediately prior to the extension (or the
     appropriate pro rata portion of the Rent payment then in effect in the case
     of Rent otherwise payable other than on a monthly basis), and all other
     provisions of this Agreement will continue to apply. Notwithstanding any of
     the provisions of this Section 3 to the contrary, if any Lessee Default or
     Potential Lessee Default has occurred and is continuing at any time during
     the last 90 days of the then applicable term of any Lease, we may cancel
     any renewal term or automatic extension of the then applicable term
     immediately upon written notice to you.  Upon a termination, the Equipment
     then subject to such Lease must be returned to us in accordance with
     Section 8 of this Agreement.

4.   RENT; LATE CHARGES; ADVANCE RENT. As rent for the Equipment under any Lease
and as payment of principal and interest under any Financing (in either case,
"Rent"), you agree to pay the amounts specified in the applicable Schedule on
the due dates specified in the applicable Schedule. You agree to pay us interest
on any Rent payment or other amount due under this Agreement that is not paid
within 10 days of its due date, at the Overdue Rate set forth in the relevant
Schedule (or the lesser rate that is the maximum rate allowable under applicable
law). You will pay to us, with respect to each Lease or Financing, the Rent to
be paid by you in advance of the Acceptance Date for the related Equipment
("Advance Rent"), if any, specified in the applicable Schedule. Any payment of
Advance Rent will be credited against the first Rent payment payable by you
under the applicable Schedule and any excess Advance Rent will be credited,
without interest, against the last Rent payment(s) payable by you with respect
to the Initial Term of the applicable Lease and/or the Term of the applicable
Financing. Advance Rent will be refunded to you without interest only if we
decline to sign the applicable Schedule. All payments to us under any Schedule
will be made in the currency and sent to our local address specified in that
Schedule.

5.   LEASES AND FINANCINGS NON-CANCELABLE; NET LEASES; WAIVER OF DEFENSES TO
PAYMENT.   IT IS SPECIFICALLY UNDERSTOOD AND AGREED THAT EACH LEASE AND
FINANCING UNDER THIS AGREEMENT WILL BE NON-CANCELABLE AND THAT EACH LEASE UNDER
THIS AGREEMENT IS A NET LEASE (/I.E./, AMONG OTHER THINGS, YOU PAY, IN ADDITION
TO RENT, THE TAXES, INSURANCE AND MAINTENANCE CHARGES RELATING TO THE EQUIPMENT
THAT IS THE SUBJECT OF SUCH LEASE).  YOU AGREE THAT YOU HAVE AN ABSOLUTE AND
UNCONDITIONAL OBLIGATION TO PAY ALL RENT AND OTHER AMOUNTS WHEN DUE. YOU ARE NOT
ENTITLED TO ABATE OR REDUCE RENT OR ANY OTHER AMOUNT DUE, OR TO SET OFF ANY
CHARGE AGAINST ANY SUCH AMOUNT.   YOU HEREBY WAIVE ANY RECOUPMENT, CROSS-CLAIM,
COUNTERCLAIM OR ANY OTHER DEFENSE AT LAW

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OR IN EQUITY TO ANY RENT PAYMENT OR OTHER AMOUNT DUE WITH RESPECT TO ANY LEASE
OR FINANCING, WHETHER ANY SUCH DEFENSE ARISES OUT OF THIS AGREEMENT, ANY
SCHEDULE, ANY CLAIM BY YOU AGAINST US, OUR ASSIGNEES OR SUPPLIER (AS DEFINED IN
SECTION 7), OR OTHERWISE (OTHER THAN THE DEFENSE OF ACCORD AND SATISFACTION). IF
THE EQUIPMENT OR ANY FINANCED ITEM IS NOT PROPERLY INSTALLED, DOES NOT OPERATE
OR INTEGRATE AS REPRESENTED OR WARRANTED BY SUPPLIER OR FAILS OR IS
UNSATISFACTORY FOR ANY REASON WHATSOEVER, YOU WILL MAKE ANY CLAIM ON ACCOUNT OF
THOSE ISSUES SOLELY AGAINST SUPPLIER AND WILL NEVERTHELESS PAY ALL SUMS DUE WITH
RESPECT TO EACH LEASE AND EACH FINANCING.

6.   ASSIGNMENT OF PURCHASE DOCUMENTS.  You assign to us all of your right,
title and interest in and to (a) the Equipment described in each Schedule, and
(b) any purchase order, contract, bill of sale, license agreement, invoice
and/or other documents that you have, at any time, approved, agreed to be bound
by or entered into with any Supplier of such Equipment relating to such
Equipment (the "Purchase Documents").   Such assignment of the Purchase
Documents is an assignment of rights only; nothing in this Agreement will be
deemed to have relieved you of any obligation or liability under any of the
Purchase Documents, except that, as between you and us, we agree to pay for the
Equipment within 15 days after your delivery to us of a properly completed and
signed Acceptance Certificate (or APA Acceptance Certificate) and all other
documentation reasonable necessary to establish your acceptance of such
Equipment under the related Lease.  You represent and warrant that you have
reviewed and approved the Purchase Documents.  In addition, if we request you
will deliver to us an assignment of purchase order or other similar document
reasonably acceptable to both parties by which the seller of Equipment and
provider of Financed Items specified in the applicable Schedule ("Seller")
acknowledges and provides any required consent to such assignment.  For the
avoidance of doubt, you covenant and agree that you will at all times during the
aggregate term of each Lease (including any renewal term(s) or automatic
extension(s)) ("Total Term") comply with the terms of any license agreement
relating to any Equipment leased under that Lease.  IT IS ALSO SPECIFICALLY
UNDERSTOOD AND AGREED THAT NEITHER SUPPLIER NOR ANY SALESPERSON OF SUPPLIER IS
OUR AGENT, NOR ARE THEY AUTHORIZED TO WAIVE OR ALTER ANY TERMS OF THIS AGREEMENT
OR ANY SCHEDULE.

7.   ASSIGNMENT OF SUPPLIER WARRANTIES.  To the extent permitted, we assign to
you, for the Total Term of any Lease, all Equipment warranties provided by any
Seller and manufacturer or licensor of such Equipment, individually and
collectively, and the Seller of Financed Items ("Supplier") in the applicable
Purchase Documents.  You will have the right to take any action you deem
appropriate to enforce such warranties provided such enforcement is pursued in
your name and at your expense. If you are precluded from enforcing any such
warranty in your name, we will, upon your request, take reasonable steps to
enforce such warranty.  In such circumstances, you will, within 15 days after
receipt of our written demand, reimburse us for all out-of-pocket expenses
incurred by us in enforcing the Supplier warranty.  Any recovery resulting from
any such enforcement efforts will be divided between you and us as our interests
may appear.

8.   EQUIPMENT RETURN REQUIREMENTS.  On or before the last day of the Total Term
of each Lease (and any other time you are required to return Equipment to us
under the terms of this Agreement or any Schedule), you will pack the Equipment
to be returned to us in accordance with the Supplier's guidelines and deliver
such Equipment to us at any destination reasonably designated by us.  When you
return the Equipment to us, you also must return all copies of any Software
(including any certificate of authenticity, end user license agreement, any CD-
ROM, diskettes or other media relating to the Software

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and any other materials delivered with the Software) to us. All dismantling,
packaging, transportation, in-transit insurance and shipping charges will be
borne by you. All Equipment must be returned to us in the same condition and
working order as when delivered to you, reasonable wear and tear excepted and
must qualify for maintenance service by the Supplier at its then standard rates
for Equipment of that age, if available. You will be responsible for, and will
reimburse us promptly on demand for, any cost incurred by us to qualify the
Equipment for the Supplier's maintenance service or, if not available, to return
the Equipment to good working condition, reasonable wear and tear excepted.

9.   EQUIPMENT USE AND MAINTENANCE.   You are solely responsible for the
selection, installation, operation and maintenance of the Equipment and all
costs related to such selection, installation, operation and maintenance,
including shipping charges.  You agree at all times to operate and maintain the
Equipment in good working order, repair, condition and appearance, ordinary wear
and tear excepted, and in accordance with the Supplier's specifications and
recommendations.  On reasonable prior written notice to you, we and our agents
will have the right, during your normal business hours and subject to Lessee's
reasonable security and confidentiality requirements, to enter the premises
where the Equipment is located for the purpose of inspecting the Equipment and
observing its use.  If we have provided to you any tags or identifying labels,
you will, at your expense, affix and maintain them in a prominent position on
each item of Equipment to indicate our ownership of the Equipment.  Except in
the case of personal computers (/e.g/., workstations, desktops and notebooks)
and related items of peripheral equipment (/e.g/., monitors, printers and
docking stations) and Software, you will, at your expense, enter into and
maintain and enforce at all times during the Total Term of each Lease a
maintenance agreement to service and maintain the related Equipment, upon terms
and with a provider reasonably acceptable to us.

10.  EQUIPMENT OWNERSHIP; LIENS; LOCATION.  As between you and us, we are the
sole owner of the Equipment and have sole title to it.  You agree that you will
not make any representation to any third-party inconsistent with our sole
ownership of the Equipment.  You agree that you will not pledge or encumber the
Equipment or our interest in the Equipment in any way and will keep the
Equipment free of all levies, security interests, liens or encumbrances, except
those created by or through us.  The Equipment will remain our personal property
whether or not affixed to realty and will not become a fixture or be made to
become a part of any real property on which it is placed without our prior
written consent.  You agree to maintain the Equipment so that it may be removed
from any building in which it is placed without any damage to the building or
the Equipment.  You may relocate any Equipment from the Equipment Location
specified in the applicable Schedule to another of your business locations
within the same country upon prior written notice to us specifying the new
Equipment Location, provided you remain in possession and control of the
Equipment.  "Equipment Location" means, as to any Equipment, the address at
which such Equipment is located from time to time, as originally specified in
the applicable Schedule and as subsequently specified in any notice delivered to
us pursuant to this Section 10, if applicable.

11.  ALTERATIONS AND ADDITIONS TO EQUIPMENT.  You will not make any alterations
or additions to the Equipment, except those that (a) will not void any warranty
made by the Supplier of the Equipment, result in the creation of any security
interest, lien or encumbrance on the Equipment or impair the value or use of the
Equipment either at the time made or at the end of the Total Term of the
applicable Lease, and that are readily removable without damage to the Equipment
("Optional Additions"), or (b) are required by any applicable law, regulation or
order.  All additions to the Equipment or repairs made to the Equipment, except
Optional Additions, become a part of the

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Equipment, except Optional Additions, become a part of the Equipment and our
property at the time made; Optional Additions which have not been removed prior
to the return of the Equipment will become our property upon such return.

12.  INSURANCE.  You agree to keep the Equipment insured at your expense against
all risks of loss from any cause whatsoever, including without limitation, theft
and damage. You agree that such insurance will name us as a loss payee and cover
not less than the Stipulated Loss Value (as defined in Section 13) of the
Equipment. You also agree that you will carry commercial general liability
insurance in an amount specified in the Addendum for the applicable country and
cause us and our affiliates to be named additional insureds under such
insurance.  Each policy will provide that the insurance cannot be canceled
without at least 30 days prior written notice to us.   You agree to provide us
with certificates or other evidence of such insurance promptly when requested.

13.  RISK OF LOSS.   In the event any Equipment is condemned, taken, lost,
destroyed, stolen or damaged beyond repair ("Casualty Loss") prior to its return
to us, on the next Rent payment date you will, at your option, either (a) pay us
an amount ("Stipulated Loss Value") equal to the sum of (i) all Rent and other
amounts due and owing with respect to such Equipment as of the date of payment
of such amount, plus (ii) the Casualty Value of such Equipment, or (b)
substitute and replace each item of Equipment suffering the Casualty Loss with
an item of Equipment manufactured or licensed by the same manufacturer or
licensor that is substantially equivalent or better, has equal or greater
capabilities and equal or greater fair market value ("Substitute Equipment").
If you elect to pay the Stipulated Loss Value of Equipment suffering a Casualty
Loss, upon our receipt in full of such payment the applicable Lease will
terminate as it relates to such Equipment and, except as provided in Section 24,
you will be relieved of all obligations under the applicable Schedule as it
relates to such Equipment and title to such Equipment shall be assigned and
transferred to you "AS IS WHERE IS" free of all liens arising by or through
Lessor.  If you elect to replace Equipment suffering a Casualty Loss with items
of Substitute Equipment (i) the applicable Lease will continue in full force and
effect without any abatement of Rent with such Substitute Equipment after such
replacement being deemed to be Equipment leased under such Lease, and (ii) you
will deliver to us a bill of sale or other documentation, in either case in form
and substance satisfactory to us, representing and warranting that you have
transferred to us good and marketable title to all Substitute Equipment, free
and clear of all security interests, liens, encumbrances and claims of others.
In the event of any repairable damage to any Equipment, the Lease will continue
with respect to that Equipment without any abatement of Rent and you will at
your expense promptly cause that Equipment to be repaired to the condition it is
required to be maintained in pursuant to Section 9.  You agree to notify us of
any Casualty Loss or repairable damage to any Equipment as soon as reasonably
practicable after the date of any such occurrence.  "Casualty Value" means, as
to any Equipment, an amount determined as of the date of the Casualty Loss or
Lessee Default in question pursuant to a "Table of Casualty Values" attached to
the applicable Schedule or, if no "Table of Casualty Values" is attached to the
applicable Schedule, an amount equal to the sum of (i) the present value as of
the date of the Casualty Loss or Lessee Default in question (discounted at (a)
with respect to Leases and Financings executed pursuant to the US Addendum
only,a rate of interest equal to the Two Year Treasury Note Yield as of the date
of commencement of the applicable Lease or Financing or (b) with respect to
Leases and Financings executed pursuant to any other Addenda, a rate of interest
equal to the applicable country's Two Year Swap Rate as of the commencement of
the applicable Lease or Financing (the "Discount Rate")) of all Rent payments
payable after such date through the scheduled date of expiration of the then
applicable term, plus (ii) the present value as of the date of the Casualty Loss
or Lessee Default in question (discounted at the Discount Rate from the
scheduled date of expiration of the then applicable term) of an amount
determined by multiplying the applicable casualty percentage specified below by
the Total Cost of such Equipment.  The applicable casualty percentage will be
35% for Equipment having an Initial Term of less than 24 months; 30% for
Equipment having an Initial Term

                                       8
<PAGE>

of 24 months or greater, but less than 36 months; 25% for Equipment having an
Initial Term of 36 months or greater, but less than 48 months; and 20% for
Equipment having an Initial Term of 48 months or greater.

14.  TAXES.  We will report and pay all license and registration fees and all
taxes, fees, levies, imposts, duties, assessments, charges, customs duties and
withholdings of any nature whatsoever, however designated (including any value
added taxes, transfer, sales, use, gross receipts, business, occupation, excise,
personal property, real property, stamp duties or other taxes) ("Taxes") now or
after the date of this Agreement imposed or assessed by any governmental body,
agency or taxing authority upon the purchase, ownership, delivery, installation,
leasing, rental, use or sale of the Equipment, the Rent or other charges payable
under this Agreement, or otherwise upon or in connection with any Lease or
Financing, whether assessed on us or you, other than any such Taxes required by
law to be reported and paid by you.  You agree to promptly reimburse us for all
such Taxes paid by us, together with any penalties or interest in connection
with such Taxes attributable to your acts or failure to act, excluding Taxes (a)
on or measured by our overall gross or net income or items of tax preference,
(b) attributable to the period after the return of Equipment under a Lease to
us, and (c) imposed as a result of a sale or other transfer by us of any portion
of our interest in any Lease or Financing or in any Equipment except for a sale
or other transfer to you or a sale or other transfer occurring after and during
the continuance of any Lessee Default.

15.  GENERAL INDEMNITY.  You agree to indemnify and hold harmless us, our
employees, officers, directors, agents and assignees and, if requested by us,
defend us, our employees, officers, directors, agents and assignees, from and
against any and all claims, actions, suits, proceedings, costs, expenses
(including, without limitation, court costs, witness fees and attorneys' fees),
damages, obligations, judgments, orders, penalties, fines, injuries, liabilities
and losses, including, without limitation, actions based upon our strict
liability in tort ("Claims") arising directly or indirectly out of or in
connection with any matter involving this Agreement, the Equipment or any Lease
or Financing. Notwithstanding the foregoing, in no event shall Lessee be
required to indemnify Lessor from and against any Claims relating, directly, to
the gross negligence or willful misconduct of Lessor or any of its assignees
under Section 22 of the Agreement.

16. COVENANT OF QUIET ENJOYMENT.   So long as no Lessee Default or Potential
Lessee Default has occurred and is continuing, neither we nor any party acting
or claiming through us, by assignment or otherwise, will disturb your quiet
enjoyment of the Equipment during the Total Term of the related Lease.

17.  DISCLAIMERS AND YOUR WAIVERS. YOU LEASE THE EQUIPMENT FROM US "AS IS, WHERE
IS".  IT IS SPECIFICALLY UNDERSTOOD AND AGREED THAT (A) EXCEPT AS EXPRESSLY SET
FORTH IN SECTION 16, WE MAKE ABSOLUTELY NO REPRESENTATIONS OR WARRANTIES
WHATSOEVER, EXPRESS, OR IMPLIED, INCLUDING, WITHOUT LIMITATION, ANY
REPRESENTATION OR WARRANTY WITH RESPECT TO THE DESIGN, COMPLIANCE WITH
SPECIFICATIONS, QUALITY, OPERATION, OR CONDITION OF ANY EQUIPMENT OR FINANCED
ITEMS (OR ANY PART OF ANY EQUIPMENT OR FINANCED ITEMS), THE MERCHANTABILITY OR
FITNESS OF EQUIPMENT OR FINANCED ITEMS FOR A PARTICULAR PURPOSE, OR ISSUES
REGARDING PATENT INFRINGEMENT, TITLE AND THE LIKE; (B) WE WILL NOT BE DEEMED TO
HAVE MADE, BE BOUND BY OR LIABLE FOR,  ANY REPRESENTATION, WARRANTY OR PROMISE
MADE BY THE SUPPLIER OF ANY EQUIPMENT OR FINANCED ITEMS (EVEN IF WE ARE
AFFILIATED WITH SUCH

                                       9
<PAGE>

SUPPLIER); (C) WE WILL NOT BE LIABLE FOR ANY FAILURE OF ANY EQUIPMENT OR
FINANCED ITEMS OR ANY DELAY IN THE DELIVERY OR INSTALLATION OF ANY EQUIPMENT OR
FINANCED ITEMS; (D) YOU HAVE SELECTED ALL EQUIPMENT AND FINANCED ITEMS WITHOUT
OUR ASSISTANCE; AND (E) WE ARE NOT A MANUFACTURER OF ANY EQUIPMENT. IT IS
FURTHER AGREED THAT WE WILL HAVE NO LIABILITY TO YOU, YOUR CUSTOMERS, OR ANY
THIRD PARTIES FOR ANY INCIDENTAL, INDIRECT, SPECIAL OR CONSEQUENTIAL DAMAGES
ARISING OUT OF THIS AGREEMENT OR ANY SCHEDULE OR CONCERNING ANY EQUIPMENT OR
FINANCED ITEMS, OR FOR ANY DAMAGES BASED ON STRICT OR ABSOLUTE TORT LIABILITY
OR, EXCEPT TO THE EXTENT CONSTITUTING A LESSOR DEFAULT (AS DEFINED IN SECTION
19), OUR NEGLIGENCE; PROVIDED, HOWEVER, THAT NOTHING IN THIS AGREEMENT WILL
DEPRIVE YOU OF ANY RIGHTS YOU MAY HAVE AGAINST ANY PERSON OTHER THAN US. YOU AND
WE AGREE THAT THE LEASES AND THE FINANCINGS WILL BE GOVERNED BY THE EXPRESS
PROVISIONS OF THIS AGREEMENT AND THE OTHER FUNDAMENTAL AGREEMENTS (AS DEFINED IN
SECTION 18) AND NOT BY THE CONFLICTING PROVISIONS OF ANY OTHERWISE APPLICABLE
LAW. ACCORDINGLY, TO THE EXTENT PERMITTED BY APPLICABLE LAW, YOU WAIVE ANY
RIGHTS AND REMEDIES CONFERRED UPON A LESSEE NOW OR AFTER THE DATE OF THIS
AGREEMENT CONFERRED BY STATUTE OR OTHERWISE, IN EITHER CASE THAT ARE
INCONSISTENT WITH OR THAT WOULD LIMIT OR MODIFY OUR RIGHTS SET FORTH IN THIS
AGREEMENT. NOTWITHSTANDING ANY PROVISION TO THE CONTRARY CONTAINED HEREIN, IN NO
EVENT SHALL LESSEE OR ANY LESSEE AFFILIATE BE LIABLE TO LESSOR FOR ANY SPECIAL,
CONSEQUENTIAL OR PUNITIVE DAMAGES ARISING OUT OF THIS AGREEMENT, OR ANY SCHEDULE
OR CONCERNING ANY EQUIPMENT OR FINANCED ITEMS EXCEPT THAT ANY RENT OR RESIDUAL
VALUE OF AN ITEM OF EQUIPMENT (OR OTHER
COMPONENT OF THE STIPULATED LOSS VALUE OR LESSOR'S TOTAL COST) DUE OR TO BECOME
DUE AND OWING BY LESSEE UNDER ANY LEASE SHALL NOT BE DEEMED TO BE INCIDENTAL,
INDIRECT, CONSEQUENTIAL OR SPECIAL DAMAGES.

18. YOUR WARRANTIES.  You represent, warrant and covenant to us that:  (a) ALL
EQUIPMENT WILL BE USED FOR BUSINESS PURPOSES ONLY AND NOT FOR PERSONAL, FAMILY
OR HOUSEHOLD PURPOSES; (b) you are duly organized, validly existing and in good
standing under applicable law; (c) you have the power and authority to enter
into each of this Agreement, each Advance Pricing Agreement, each Schedule and
Acceptance Certificate and all other related instruments and documents
(collectively, "Fundamental Agreements"); (d) all Fundamental Agreements are
enforceable against you in accordance with their terms and do not violate or
create a default under any instrument or agreement binding on you; (e) to the
best of your knowledge, there are no pending or threatened actions or
proceedings before any court or administrative agency that could have a material
adverse effect on you or any Fundamental Agreement, unless such actions are
disclosed to us and consented to in writing by us; (f) you will comply in all
material respects with all laws and regulations the violation of which could
have a material adverse effect upon the Equipment or your performance of your
obligations under any Fundamental Agreement; (g) each Fundamental Agreement will
be effective against all of your creditors under applicable law and will raise
no presumption of  fraud and (h) all financial statements and other related
information furnished by you will be prepared in accordance with generally
accepted accounting principles and will fairly present your financial position
as of the dates given on such statements.

                                       10
<PAGE>

19.  DEFAULT.  Any of the following will constitute a default by you (a "Lessee
Default") under this Agreement and all Leases and Financings: (a) you fail to
pay any Rent payment or any other amount payable to us under this Agreement or
any Schedule within 15 days after its due date, (b) you default on or breach any
of the other terms and conditions of any Fundamental Agreement or any other
material agreement by and between you and us (a "Material Agreement"), and fail
to cure such default or breach within 10 days after written notice of such
default or breach from us; (c) any representation or warranty made by you in any
Material Agreement or any statement contained in any application for credit,
financial statement or financial data required to be provided by you in
connection with any Lease or Financing proves to be false, incorrect or
misleading in any material respect when made or reaffirmed; (d) circumstances
arise where you or any guarantor of all or any portion of your obligations under
this Agreement or any Lease or Financing ("Guarantor") become or are likely to
become subject to any form of bankruptcy, insolvency or other administration,
whether voluntary or involuntary (and, if such proceeding is involuntary, it is
not dismissed within 60 days after the date such proceeding is filed), or fail
generally to pay your respective debts as they become due; (e) any change occurs
in relation to your or Guarantor's business, management or financial condition
that would have a material adverse effect on your ability to perform your
obligations under this Agreement or any Schedule or Guarantor `s ability to
perform its obligations under its guaranty; (f) any letter of credit or guaranty
issued in support of a Lease or Financing is revoked, breached, cancelled or
terminated (unless consented to in advance by us); (g) any Guarantor fails to
fulfil its obligations in favor of us pursuant to its guaranty; or (h) any
Equipment is levied against, seized or attached and such levy, seizure or
attachment is not cured within 30 days.  Any event which, with the giving of
notice, passage of time or both, would constitute a Lessee Default will
constitute a potential Lessee Default by you ( a "Potential Lessee Default")
under this Agreement and all Leases and Financings.

  If we breach of our covenant of quiet enjoyment in Section 16 and fail to cure
such breach within 10 days after notice of such breach from you, it will
constitute a default by us ("Lessor Default") under this Agreement and the
applicable Lease(s) or Financing(s).

20.  REMEDIES.  If a Lessee Default occurs, we may, in our sole discretion,
exercise one or more of the following remedies: (a) declare all amounts due and
to become due under any or all Leases, and/or declare all amounts due and unpaid
under any or all Financings, together with the outstanding principal amounts in
respect of such Financings (whether or not otherwise then due and payable), to
be immediately due and payable; or (b) terminate this Agreement or any Lease or
Financing; or (c) take possession of or render unusable, any Equipment wherever
located, without demand and without any court order or other process of law in
accordance with your reasonable security procedures, and no such action will
constitute a termination of any Lease; or (d) require you to deliver the
Equipment to a location specified by us; or (e) declare the Stipulated Loss
Value for any or all Equipment to be due and payable as liquidated damages for
loss of a bargain and not as a penalty and in lieu of any further Rent payments
under the applicable Lease or Leases; or (f) proceed by court action to enforce
performance by you of any Lease or Financing and/or to recover all damages and
expenses incurred by us by reason of any Lessee Default; or (g) terminate any
other agreement that we may have with you; or (h) exercise any other right or
remedy available to us at law or in equity.  Also, you agree to pay us all costs
and expenses that we may incur to maintain, safeguard or preserve the Equipment,
and other expenses incurred by us in enforcing any of the terms, conditions or
provisions of this Agreement (including, without limitation, court costs,
reasonable legal fees and collection agency costs).  Upon repossession or
surrender of any Equipment, we will lease, sell or otherwise dispose of the
Equipment in a manner that complies with the commercial law of the country of
the Equipment Location, and apply the net proceeds thereof to the amounts owed
to us under this Agreement; provided, however, that you will remain liable to us
for any deficiency that remains after any sale or lease of such Equipment.  Any
proceeds of any sale or lease of such Equipment in excess of the amounts owed to
us under this Agreement will be retained by us. paid to

                                       11
<PAGE>

you. You agree that with respect to any notice of a sale required by law to be
given, 10 days notice will constitute reasonable notice. Upon payment of all
past due Rent and the Stipulated Loss Value as provided in clause (e) above,
together with interest at the rate of 1-1/2% per month (or such lesser rate as
is the maximum rate allowable under applicable law) from the date declared due
until paid, we will transfer to you all of our interest in the Equipment for
which such Rent and Stipulated Loss Value has been paid, which transfer will be
on an "AS IS, WHERE IS" basis, without any warranty, express or implied, from
us, other than the absence of any liens or claims by or through us. These
remedies are cumulative of every other right or remedy given under this
Agreement or now or after the date of this Agreement existing at law or in
equity or by statute or otherwise, and may be enforced concurrently with such
other rights or remedies or from time to time.
  If a Lessor Default occurs, your sole and exclusive remedy will by to recover
by appropriate legal proceedings any direct damages suffered by you as a result
of such Lessor Default and any reasonable and necessary expenses (including,
without limitation, court costs and reasonable legal fees) incurred by you in
connection with such recovery.

21.   PERFORMANCE OF LESSEE'S OBLIGATIONS.   If you fail to perform any of your
obligations under this Agreement, we have the right but not the obligation, to
take any action(s) or pay any amounts that we reasonably believe are necessary
for the maintenance and preservation of the Equipment and our interest in it.
You agree to reimburse us immediately upon our demand for any such amounts that
we pay, together with expenses (including, without limitation, reasonable legal
fees and costs) incurred by us in connection with such performance.

22.    ASSIGNMENT.  We have the unqualified right to sell, assign, pledge,
transfer, mortgage or otherwise convey any part of our interest in this
Agreement, any Schedule or any Equipment, in whole or in part, without prior
notice to you or your consent.  If any Lease or Financing is assigned, you agree
that the new owner will (a) have the same rights, powers and privileges that we
have under the applicable Lease or Financing, (b) not be required to perform our
obligations under such Lease or Financing, (c) have the right to receive from
you all amounts due under the applicable Schedule, regardless of any claim,
defense or set off you may have against us. We covenant and agree that any
assignment or transfer by us or any subsequent owner will not materially change
your obligations under the assigned Lease or Financing.
  With our prior written consent, which may not be unreasonably withheld, you
may sublet the Equipment to another end user other than another leasing company
or other competitor of us.  No such sublease will relieve you of your
obligations under the Lease and you will be responsible for all costs and
expenses associated with such sublease. Your affiliates or independent
contractors may use the Equipment at the Equipment Location provided you do not
give up possession and control of the Equipment.  In addition, you shall have
the right to assign your rights with respect to any Lease or Financing, or
sublease the Equipment leased pursuant to any Lease or Financing, to any Lessee
Affiliate without the consent of us, provided that any such sublease shall (i)
expressly provide that the sublessee's rights thereunder are subject and
subordinate to the rights of us hereunder, and (ii) not contain any provisions
which would constitute or result in any Lessee Default hereunder.  No such
assignment or sublease shall relieve you of any of your obligations under the
applicable Schedule or this Agreement.  You shall promptly notify us of any such
assignment or sublease and shall execute and deliver to us or any Assignee, at
your expense, such documentation as we or such Assignee may reasonably require,
including documentation to evidence and put third parties on notice of our or
such Assignee's interest in the Equipment.   Except as set forth in this
paragraph, You may not assign, transfer or otherwise dispose of this Agreement,
any Lease or Financing, any Equipment or any interest in them.

                                       12
<PAGE>

23.  FURTHER ASSURANCES.  You agree to promptly sign and deliver to us any
further documents and instruments (including, without limitation, your certified
financial statements, officer's certificates and appropriate resolutions and
opinions of counsel) and take any further action that we reasonably request in
order to more effectively carry out the intent and purpose of this Agreement and
any Schedule.  We agree to execute and deliver to you, to the extent applicable,
any termination statements that are necessary in our reasonable discretion to
terminate our interests in the Equipment.

24.  TERM OF AGREEMENT; SURVIVAL.  This Agreement will begin and be effective
upon the execution of this Agreement by both parties and will continue in effect
until terminated by either party by 30 days prior written notice to the other.
However, no termination of this Agreement pursuant to the preceding sentence
will be effective with respect to any Lease or Financing that commenced prior to
such termination until the expiration or termination of such Lease or Financing
and your satisfaction of all of your obligations under this Agreement with
respect to such Lease or Financing.  All representations, warranties and
covenants made by you under this Agreement will survive the termination of this
Agreement and will remain in full force and effect.  All of our rights,
privileges and indemnities under this Agreement or any Lease or Financing will
survive the expiration or termination of such Lease or Financing and be
enforceable by us and our successors and assigns.

25.    NOTICES.  All notices, requests, demands, waivers and other
communications required or permitted to be given under this Agreement or any
other Fundamental Agreement must be in writing and will be deemed to have been
duly given if delivered personally or mailed via certified mail or a globally
recognized overnight courier service, or sent by confirmed facsimile
transmission, addressed as specified in the applicable Addendum  (or such other
address or fax number as either party may provide by notice).

26. MISCELLANEOUS.

(a) Governing Law; Consent to Jurisdiction.  This Agreement and each Lease and
Financing under this Agreement will be governed by the internal laws (as opposed
to conflicts of law provisions) of the country of the Equipment Location.  For
each Lease and Financing, we and you consent to the jurisdiction of any court
located within the country of the Equipment Location, and waive any objection
relating to improper venue or inconvenient forum to the conduct of any
proceeding in that court.
(b) Credit Review.  You consent to a reasonable credit review by us for each
Lease and Financing.
(c) Captions and References.  The captions contained in this Agreement and any
Schedule are for convenience only and will not affect the interpretation of this
Agreement.  All references in this Agreement to Sections, Schedules and Addenda
refer to Sections of this Agreement and Schedules and Addenda to this Agreement
unless otherwise indicated.
(d) Entire Agreement; Amendments.  This Agreement and all other Fundamental
Agreements signed by both you and us constitute the entire agreement between you
and us relating to the leasing of the Equipment and the financing of Financed
Items, and supersede all prior agreements relating to the leasing of the
Equipment and the financing of Financed Items, whether written or oral.  These
agreements may not be amended or modified except by a writing signed by you and
us.
(e) No Waiver.  Any failure by us to require strict performance by you, or any
written waiver by us of any provision of this Agreement, will not constitute
consent or waiver of any other breach of the same or any other provision of this
Agreement.
(f) Invalidity.  If any provision of this Agreement will be prohibited by or
invalid under applicable law, such provision will be ineffective only to the
extent of such prohibition or invalidity, without invalidating the remainder of
such provision or the remaining provisions of this Agreement.
(g) Counterparts.  This Agreement may be executed in counterparts, which
collectively will constitute one document.

                                       13
<PAGE>

(h) Our Reliance.  We may act in reliance upon any instruction, instrument or
signature reasonably believed by us in good faith to be genuine.  We may assume
that any of your employees who execute any document or give any written notice,
request or instruction have the authority to do so.
(i) Interpretation.  In this Agreement, any reference to:
     (I)       "including" or "include" means "including, but not limited to" or
          "including, without limitation";
     (II)      the singular includes the plural and vice versa; and
     (III)     any document (including this Agreement or to any law is a
          reference to that document (including any attachments) or law as
          amended, consolidated, supplemented, novated or replaced.

IN WITNESS WHEREOF, WE AND YOU HAVE EXECUTED THIS AGREEMENT.

US: COMPAQ FINANCIAL SERVICES                   YOU:  DIGITAL ISLAND, INC.
    CORPORATION

BY:____________________________                 BY:__________________________

_______________________________                 _____________________________
       [Name and Title]                                 [Name and Title]

_______________________________                 _____________________________
            [Date]                                           [Date]

                                       14<PAGE>

                                                                   EXHIBIT 10.26

                MASTER LEASE LINE OF CREDIT AND WARRANT AGREEMENT

                        DATED AS OF ____________, 2000

                                     BETWEEN

                            SUN MICROSYSTEMS FINANCE
                        A SUN MICROSYSTEMS, INC. BUSINESS

                                       AND

                               DIGITAL ISLAND INC.

         This Master Lease Line of Credit and Warrant Agreement, dated as of
___________, 2000 (this "Agreement"), is entered into by and between SUN
MICROSYSTEMS FINANCE, a Sun Microsystems, Inc. Business ("Lessor") and DIGITAL
ISLAND INC. ("Lessee").

         The following capitalized terms shall have the following respective
meanings for purposes of this Agreement:

         "Total Capital" means, as of any date of determination, the total debt
of lessee plus the sum of the capital stock and additional paid-in capital plus
retained earnings (or minus accumulated deficit) of Lessee and its subsidiaries
minus intangible assets, on a consolidated basis, determined in accordance with
GAAP.

         "Debt" means, with respect to Lessee and its subsidiaries on a
consolidated basis, the aggregate amount of, without duplication, (a) all
obligations for borrowed money, (b) all obligations evidenced by bonds,
debentures, notes or other similar instruments, (c) all non-contingent
reimbursement or payment obligations with respect to letters of credit, banker's
acceptances and similar instruments, (d) all obligations with respect to capital
leases, (e) all obligations created or arising under any conditional sale or
other title retention agreement with respect to property acquired by Lessee or
its subsidiaries, (f) all obligations to pay the deferred purchase price of
property or services (excluding trade payables aged less than 180 days), (g) all
obligations or liabilities of others secured by a lien on any asset of such
Person, whether or not such obligation or liability is assumed, and (h) all
obligations or liabilities of others guaranteed by Lessee and its subsidiaries.

         "GAAP" means generally accepted accounting principles and practices as
in effect in the United States of America from time to time, consistently
applied

         1.     Terms of Lease Financing.
                ------------------------

         (a)    Commitment. Subject to the satisfaction of the conditions set
forth in Section 2(a) below and the milestone conditions set forth in Section
2(b) below, Lessor has agreed to provide up to one hundred million dollars
($100,000,000) of lease financing to Lessee for Lessee's use and acquisition of
Product (defined below). Such lease financing will be documented on lease
schedules to be entered into pursuant to that certain Master Lease Agreement No.
7091490, dated ________, 2000 (the "Master Lease"), between Lessor and Lessee,
or any other lease or financing documentation that Lessor and Lessee may agree
to (each, a "Schedule"). The execution of each Schedule by Lessor is subject to
the satisfaction of the conditions set forth in Section 3 below. Lessor's
commitment to provide financing under this Agreement shall terminate on December
31, 2001.

         (b)    Terms of Lease. The terms of each Schedule entered into under
this Agreement for Product located in the Unites States ("U.S. Schedule") shall
be substantially as set forth in Exhibit A, "Form of Lease Schedule" attached to
the Master Lease, unless otherwise agreed by Lessor and Lessee,. To the extent
that Lessee requests a change in the payment schedule for any Schedule, Lessor's
agreement to such change, which shall be in its sole discretion, shall be
contingent upon delivery by Lessee to Lessor of a warrant, having terms to be
negotiated, in addition to the Warrants provided under Section 2(a)(iv) below.

         (c)    Eligible Product. The property to be leased or financed pursuant
to this Agreement shall be manufactured by Sun Microsystems, Inc ("Product").

         2.     Conditions and Milestones.
                -------------------------

         (a)    Conditions to Execution of this Agreement. On or prior to the
date of execution of this Agreement by Lessor, Lessor shall have received in
form and substance satisfactory to Lessor:
<PAGE>

       (i)   A legal opinion of Lessee's legal counsel in form and substance
reasonably satisfactory to Lessor covering the matters set forth in Exhibit A
hereto.

       (ii)  Copies, certified by the Secretary or Assistant Secretary or Chief
Financial Officer of Lessee, of: (A) the Certificate/Articles of Incorporation
and By-Laws of Lessee (as amended to the date of the Lease) and (B) the
resolutions adopted by Lessee's board of directors authorizing the execution and
delivery of the Master Lease and this Agreement, the Schedules and the other
documents referred to herein and the performance by Lessee of its obligations
hereunder and thereunder,

       (iii) Three warrants (the "Warrants") in the forms of:

             (1)   Exhibit B (which provides, among other things, (x) for an
                   exercise price of $51.0375 per share, (y) for the issuance
                   of up to 58,780 shares of common stock of the Company and (z)
                   which is immediately fully vested);

             (2)   Exhibit C (which provides, among other things, (x) that the
                   warrant will be vested on the date that Lessor gives written
                   notice to Lessee to the effect that the conditions to
                   additional fundings set forth in Section 2(b)(ii) hereof have
                   been satisfied or waived, (y) for the issuance of up to that
                   number of shares of common stock of the Company as is
                   determined by dividing $3,000,000 by the average closing bid
                   price for Lessee's common stock for the five trading days
                   ending on the date of delivery of such notice (the "First
                   Average Price"), and (z) for an exercise price equal to such
                   First Average Price); and

             (3)   Exhibit D (which provides, among other things, (x) that the
                   warrant will be vested on the date that Lessor gives written
                   notice to Lessee to the effect that the conditions to
                   additional fundings set forth in Section 2(1,)(iii) hereof
                   have been satisfied or waived, (y) for the issuance of up to
                   that number of shares of common stock of the Company as is
                   determined by dividing $4,000,000 by the average closing bid
                   price for Lessee's common stock for the five trading days
                   ending on the date of delivery of such notice (the "Second
                   Average Price"), and (z) for an exercise price equal to such
                   Second Average Price).

       (iv)  All other documents as Lessor shall have reasonably requested.

  (b)  Milestones for Execution of Schedules. Subject to the satisfaction of the
conditions with respect to each Schedule set forth in Section 3.

       (i)   So long as no default has occurred and is continuing under the
Master Lease, any Schedule, or this Agreement, Lessor shall execute Schedules
financing or leasing Products with an aggregate cost not to exceed $30,000,000.

       (ii)  So long as on September 30, 2000, (A) no default has occurred and
is continuing under the Master Lease, any Schedule, or this Agreement, (B)
Lessee shall have had a minimum of cash and cash equivalents on its balance
sheet in accordance with GAAP of $15,000,000 or greater at all times after the
date hereof, and (C) Lessee shall have raised not less than a cumulative
$100,000,000 through the sales of its non-redeemable equity securities after the
date of this Agreement, Lessor shall execute Schedules financing or leasing
Product with aggregate costs that, when aggregated with the cost of Product
leased or financed under Schedules executed and commenced prior to September
30, 2000, shall not to exceed $60,000,000.

       (iii) So long as on March 31, 2001, (A) no default has occurred and is
continuing under the Master Lease, any Schedule, or this Agreement, (B) Lessee
shall have had a minimum of cash and cash equivalents On its balance sheet in
accordance with GAAP of $15,000,000 or greater at all times after the date
hereof, (C) Lessee shall have raised after the date of this Agreement not less
than a cumulative $200,000,000 through the sales of its non-redeemable equity
securities or subordinated convertible debt (subordinated on terms customary in
the institutional convertible debt market and maturing later than December
31, 2004), and (D) Lessee shall have satisfied the conditions set forth in
clause (ii) above, Lessor shall execute Schedules financing or leasing Product
with aggregate costs in an amount that, when aggregated with the cost of Product
leased or financed under Schedules executed and commenced prior to March 31,
2001, shall not to exceed $100,000,000.

  3.   Conditions to Lessor's Execution of Each Schedule. Prior to Lessor's
       -------------------------------------------------
execution of each Schedule, Lessee shall have satisfied all of the following
conditions:

  (a)  Lessor shall have received:
<PAGE>

          (i)    Except with the prior written consent of Lessor, a Landlord's
Waiver or Disclaimer of Interest for each landlord of premises on which Product
will be located and/or user or other custodian of the Product, in form and
substance satisfactory to lessor.

          (ii)   To the extent Lessor, in its commercially reasonable business
judgment, deems it necessary, a release or other arrangement with any other
lessor or lender to the Lessee to insure that there will be no impairment of
Lessor's interest in the Product subject to the Schedule.

          (iii)  Evidence of insurance coverage as required by Section 10 of the
Master Lease, if not previously provided to Lessor.

     (b)  There shall have been filed or recorded, to the satisfaction of
Lessor, all instruments and documents, including, but not limited to,
precautionary Financing Statements on Form UCC-l and releases and termination
statements on Form UCC-2, then deemed necessary by Lessor to preserve and
protect its rights hereunder, under the Uniform Commercial Code (including the
termination of any after-acquired property clause of third parties with respect
to any Unit).

     (c)  Lessor shall have received all other documents and Lessee shall have
performed all other acts as Lessor shall have reasonably requested to consummate
the transaction contemplated by the Schedule.

     (d)  On the date of commencement of the Schedule no default shall exist
under this Agreement, the Master Lease or any Schedule,

     (e)  The amount to be financed under the Schedule shall not be less than
$5,000,000.

     (f)  If the Product subject to the Schedule is located outside of the
United States, lessee and Lessor have agreed to mutually acceptable
documentation for such Schedule.

     Lessor may, in its sole discretion, terminate its commitment herein to
execute Schedules if there is any material adverse change to the general
affairs, management, results of operations, condition (financial or otherwise)
or prospects of Lessee, whether or not arising from transactions in the ordinary
course of business.

     4.   Additional Covenants.
          --------------------

     (a)  Leverage Ratio. Lessee shall not permit its ratio of Debt to Total
Capital to be greater than 0.7 to 1.00.

     (b)  Change in Business. Lessee shall not enter into any business other
than that in which it is engaged on the date hereof and businesses reasonably
related or incidental thereto.

     (c)  Lessee shall be in default under any agreement with any third party or
parties which default consists of the failure of Lessee to pay any debt at
maturity or which results in a right by such third party or parties, whether or
not exercised, to accelerate the maturity of any debt of Lessee in an amount in
excess of One Million Dollars ($1,000,000).

     A breach of a covenant under this Section 4 shall also constitute a default
under each Schedule then in effect at the time of such breach, and the
occurrence of any such breach will allow Lessor to exercise any and all
available remedies with respect it all such Schedules. Lessee shall promptly
notify Lessor of any such breach.

     5.   Compliance Statement. Lessee shall furnish to Lessor, and to Sun
          --------------------
Microsystems Inc. at the address set forth in Section 8(a) of this Agreement,
within thirty (30) days of the end of each fiscal quarter of Lessee, a
certificate of Lessee's Chief Financial Officer or other senior officer stating
that he or she has reviewed the provisions of the Master Lease, each Schedule,
and this Agreement and that Lessee is not in default in the observance or
performance of any of the provisions hereof, or thereof, or if Lessee shall be
so in default, specifying all such defaults and events of which he or she may
have knowledge, and setting forth the calculation of compliance or noncompliance
with each of the covenants set forth in Section 4 above.

     6.   Review Points. On or about March 31, 2000, September 30, 2000 and
          -------------
March 31, 2001, Lessor and Lessee will meet to review Lessee's current business
plan, five year financial model, including detailed one year cash flow
projections. At such reviews, at the request of the Lessee, Lessor will discuss
indicative pricing, terms and conditions for adjustments to the payment schedule
under Schedules would accommodate technology refresh and changes in Lessee's
projected cash flows. Neither Lessor nor Lessee shall have any obligation to
agree to any amendments to the Master Lease or any Schedule.
<PAGE>

     7.   Miscellaneous.
          -------------

     (a)  Notices. Except as otherwise provided herein, all notices, requests,
          -------
demands, consents, instructions or other communications to or upon Lessor or
Lessee under this Agreement shall be in writing and faxed, mailed or delivered
to each party at its fax number or address set forth below (or to such other fax
number or address for any party as indicated in any notice given by that party
to the other party). In addition, a copy of all notices, requests, demands,
consents, instructions or other communications to or upon Lessor or Lessee under
the Master Lease or any Schedule shall be delivered to Sun Microsystems, Inc.,
at the address set forth below, as well as to any address set forth in, and in
accordance the terms of, such Master Lease or Schedule, as applicable. All such
notices and Communications shall be effective (a) when sent by Federal Express
or other overnight service of recognized standing, on the business day following
the deposit with such service; (b) when mailed by registered or certified mail,
first class postage prepaid and addressed as aforesaid through the United States
Postal Service, upon receipt; (c) when delivered by hand, upon delivery; and (d)
when faxed, upon confirmation of receipt.

     Lessor:           Sun Microsystems Finance
                       1400 Computer Drive
                       Westborough, MA 01581
                       Attention:   Risk Manager
                       Telephone:   (508) 836-2500

                       With a copy to:
                       Sun Microsystems Inc.
                       901 San Antonio Road, MS PAL1-203
                       Palo Alto, CA 94303-4900
                       Attention:   George Reyes
                                    Vice President and Treasurer
                       Fax:         (650)336-0237

     Lessee:           Digital Island Inc.
                       45 Fremont Street, 12th Floor
                       San Francisco, CA 94105
                       Attention:   Michael Sullivan
                       Fax:         415-7384397

     (b)  Waivers; Amendments. Any term, covenant agreement or condition of this
          -------------------
Agreement or the Master Lease or any Schedule may be amended or waived if such
amendment or waiver is in writing and is signed by Lessee and Lessor. No failure
or delay by Lessor in exercising any right hereunder or thereunder shall operate
as a waiver thereof or of any other right nor shall any single or partial
exercise of any such right preclude any other further exercise thereof or of any
other right. A waiver or consent given hereunder shall be effective only if in
writing and in the specific instance and for the specific purpose for which
given.

     (c)  Successors and Assigns. This Agreement, the Master lease and each
          ----------------------
Schedule shall be binding upon and inure to the benefit of Lessee, Lessor and
their respective successors and permitted assigns, except that Lessee may not
assign or transfer (and any such attempted assignment or transfer shall be void)
any of its rights or obligations without the prior written consent of Lessor.
Lessee acknowledges that Lessor has the right to assign its obligations to enter
into Schedules hereunder, or may designate a third party to enter into such
Schedules on Lessor's behalf, and such assignee or designee's execution of a
Schedule will be deemed to satisfy Lessor's obligations hereunder with respect
to the amount financed under such Schedule.

     (d)  Partial Invalidity. If at any time any provision of this Agreement, is
          ------------------
or becomes illegal, invalid or unenforceable in any respect under the law of any
jurisdiction, neither the legality, validity or enforceability of the remaining
provisions of this Agreement nor the legality, validity or enforceability of
such provision under the law of any other jurisdiction, shall in any way be
affected or impaired thereby.

     (e)  Governing Law. This Agreement shall be governed by and construed in
          -------------
accordance with the laws of the State of California without reference to
conflicts of law rules.

          (i)  Construction. Each of this Agreement, the Master Lease and each
               ------------
Schedule is the result of negotiations among, and has been reviewed by, Lessee,
Lessor and their respective counsel, Accordingly, this Agreement, the Master
Lease and each Schedule shall be deemed to be the product of all parties hereto,
and no ambiguity shall be construed in favor of or against Lessee or Lessor,
<PAGE>

          (ii) Entire Agreement. This Agreement, the Master Lease and the
               ----------------
Schedules, taken together, constitute and contain the entire agreement of Lessee
and Lessor with respect to the subject matter hereof and supersede any and all
prior agreements, negotiations, correspondence, understandings and
communications among the parties, whether written or oral, respecting the
subject matter hereof.

     IN WITNESS WHEREOF, Lessor and Lessee have executed this Agreement as of
the date first written above.

LESSOR:                                     LESSEE:

SUN MICROSYSTEMS FINANCE                    DIGITAL ISLAND INC.
a Sun Microsystems, Inc. Business

By:__________________________________       By:________________________________

Name:________________________________       Name:______________________________

Title:_______________________________       Title:_____________________________

Dated:_______________________________       Dated:_____________________________
<PAGE>

      [LOGO OF SUN(R) MICROSYSTEMS]

Sun Microsystems Finance
      MASTER LEASE AGREEMENT

      Master Lease #7091490 dated _________, 2000

      Lessor agrees to lease to Lessee and Lessee agrees to lease from Lessor,
subject to the following terms of this Master Lease Agreement ("Master Lease")
and any Lease Schedule ("Schedule"), collectively referred to as the Lease
("Lease"), the personal property described in any Schedule together with all
attachments, replacements, parts, substitutions, additions, upgrades,
accessories, software licenses and operating manuals (the "Product"). Each
Schedule shall constitute a separate, distinct, and independent Lease and
contractual obligation of Lessee, and unless otherwise agreed between Lessee and
Lessor, shall be in substantially the form of Exhibit A hereto.

1.   Commencement Date And Term
The initial lease term ("Initial Term") and Lessee's rental obligations shall
begin on the Commencement Date and continue for the number of Rental Periods
specified in the Lease as set forth in Section 2 below and shall renew
automatically thereafter until terminated by either party upon not less than
ninety (90) days prior written notice. The Commencement Date with respect to
each item of Product shall be the 16th day after date of shipment to Lessee.

2.   Rent and Rental Period
All rental payments and any other amounts payable under a Lease are collectively
referred to as "Rent". The Rental Period shall mean the rental payment period of
either calendar months, quarters, or as otherwise specified in each Schedule.
Rent for the specified Rental Period is due and payable in arrears, to the
address specified in Lessor's invoice, on the last day of each Rental Period
during the Initial Term and any extension (collectively, the "Lease Term"),
provided, however, that Rent for the period of time (if any) from the
Commencement Date to the first day of the first Rental Period shall begin to
accrue on the Commencement Date. If any Rent is not paid when due, Lessee will
pay a service fee equal to five percent (5%) of the overdue amount plus interest
at the rate of one and one half percent (1.5%) per month or the maximum legal
interest rate, whichever is less.

3.   Net Lease, Taxes and Fees
Each Schedule shall constitute a net lease and payment of Rent shall be absolute
and unconditional, and shall not be subject to any abatement, reduction, set
off, defense, counterclaim, interruption, deferment or recoupment for any reason
whatsoever. Lessee agrees to pay Lessor when due shipping charges, fees,
assessments and all taxes (municipal, state and federal) imposed upon a Lease or
the Product or its ownership, leasing, renting, possession or use except for
taxes based on Lessor's income.

4.   Title
Product shall remain personal property. Lessee shall have no right or interest
in the Product except as provided in this Master Lease and the applicable
Schedule and shall hold the Product subject and subordinate to the rights of
Lessor. Lessee agrees to execute UCC financing statements as and when requested
by Lessor and hereby appoints Lessor as its attorney-in-fact to execute such
financing statements. Lessor may file a photocopy of any Lease as a financing
statement.

Lessee will, at its expense, keep the Product free and clear from any liens or
encumbrances of any kind (except any caused by Lessor) and will indemnify and
hold Lessor harmless from and against any loss or expense caused by Lessee's
failure to do so. Lessee shall give Lessor immediate written notice of any
attachment or judicial process affecting the Product or Lessor's ownership. If
requested, Lessee will label the Product as the property of Lessor and shall
allow, subject to Lessee's reasonable security requirements, the inspection of
the Product during regular business hours.

5.   Use, Maintenance And Repair
Lessee, at its own expense, shall keep the Product in good repair, appearance
and condition, other than normal wear and tear and shall obtain and keep in
effect throughout the term of the Schedule a hardware and software maintenance
agreement with the manufacturer or other party acceptable to Lessor. All parts
furnished in connection with such repair and maintenance shall be manufacturer
authorized parts and shall immediately become components of the Product and the
property of Lessor. Lessee shall use the Product in compliance with
manufacturer's or supplier's suggested guidelines.

6.   Delivery And Return of Product
Lessee assumes the full expense of transportation, insurance and installation to
Lessee's site. Upon termination of each Schedule, Lessee will provide Lessor a
letter from the manufacturer certifying that the Product is in good operating
condition and is eligible for continued maintenance and that the operating
system is at the then current level, unless under a Sun service contract during
the Lease Term. Lessee, at its expense, shall deinstall, pack and ship the
Product to a U.S. location identified by Lessor. Lessee shall remain obligated
to pay Rent on the Product until the Product and certification are received by
Lessor.

7.   Assignment And Relocation
<PAGE>

Lessee may sublease or assign its rights under this agreement with Lessor's
prior written consent, which consent shall not be unreasonably withheld,
subject, however, to any terms and conditions which Lessor may require. No
permitted assignment or sublease shall relieve Lessee of any of its obligations
hereunder.

Lessee acknowledges Lessor may sell and/or assign its interest or grant a
security interest in each Lease and/or the Product to an assignee ("Lessor's
Assignee"). So long as Lessee is not in default hereunder, Lessor or Lessor's
Assignee shall not interfere with Lessee's right of quiet enjoyment and use of
the Product. Upon the assignment of each Lease, Lessor's Assignee shall have any
and all discretions, rights and remedies of Lessor and all references to Lessor
shall mean Lessor's Assignee. In no event shall any assignee of Lessor be
obligated to perform any duty, covenant or condition under this Lease and Lessee
agrees it shall pay such assignee without any defense, rights of set-off or
counterclaims and shall not hold or attempt to hold such assignee liable for any
of Lessor's obligations hereunder.

Lessee, at its expense, may relocate Product (after packing it for shipment in
accordance with manufacturer's instructions) to a different address with thirty
(30) days prior written notice to Lessor. The Product shall at all times be used
solely within the United States.

8.   Upgrades And Additions
Lessee may affix or install any accessory, addition, upgrade, equipment or
device on the Product ("Additions") provided that such Additions (i) can be
removed without causing material damage to the Product, (ii) do not reduce the
value of the Product and (iii) are obtained from or approved by Sun
Microsystems, Inc. or an affiliate and are not subject to the interest of any
third party other than Lessor. Any other Additions may not be installed without
Lessor's prior written consent. At the end of the Lease Term, Lessee shall
remove any Additions which (i) were not leased by Lessor and (ii) are readily
removable without causing material damage or impairment of the intended
function, use, or value of the Product and restore the Product to its original
configuration. Any Additions, which are not so removable, will become the
Lessor's property (lien free).

9.   Lease End Options
        8.  Upon written notice given at least ninety (90) days prior to
expiration of the Lease Term, and provided Lessee is not in default under any
Schedule, Lessee may (i) exercise any purchase option set forth on the Schedule,
or (ii) renew the Schedule for a minimum extension period of twelve (12) months,
or (iii) return the Product to Lessor at the expiration date of the Schedule
pursuant to Section 6 above.

10.  Insurance, Loss Or Damage
        Effective upon shipment of Product to Lessee and until Product is
received by Lessor, Lessee shall provide at its expense (i) insurance against
the loss or theft or damage to the Product for the full replacement value, and
(ii) insurance against public liability and property damage. Lessee shall
provide a certificate of insurance that such coverage is in effect, upon request
by Lessor, naming Lessor as loss payee and/or additional insured as may be
required.

        Lessee shall bear the entire risk of loss, theft, destruction of or
damage to any item of Product. No loss or damage shall relieve Lessee of the
obligation to pay Rent or any other obligation under the Schedule. In the event
of loss or damage, Lessee shall promptly notify Lessor and shall, at Lessor's
option, (i) place the Product in good condition and repair, or (ii) replace the
Product with lien free Product of the same model, type and configuration in
which case the relevant Schedule shall continue in full force and effect and
clear title in such Product shall automatically vest in Lessor, or (iii) pay
Lessor the present value of remaining Rent plus the buyout purchase option price
provided for in the applicable Schedule.

11.  Selection, Warranties And Limitation Of Liability
Lessee acknowledges that it has selected the Product and disclaims any reliance
upon statements made by Lessor. Lessee acknowledges and agrees that use and
possession of the Product by Lessee shall be subject to and controlled by the
terms of any manufacturer's or, if appropriate, supplier's warranty, and Lessee
agrees to look solely to the manufacturer or, if appropriate, supplier with
respect to all mechanical, service and other claims, and the right to enforce
all warranties made by said manufacturer are hereby assigned to Lessee for the
term of the Schedule.

EXCEPT AS SPECIFICALLY PROVIDED HEREIN, LESSOR HAS NOT MADE AND DOES NOT MAKE
ANY REPRESENTATIONS OR WARRANTIES, EITHER EXPRESS OR IMPLIED, AS TO ANY MATTER
WHATSOEVER, INCLUDING, WITHOUT LIMITATION, NON-INFRINGEMENT, THE DESIGN,
QUALITY, CAPACITY OR CONDITION OF THE PRODUCT, ITS MERCHANTABILITY OR FITNESS
FOR ANY PARTICULAR PURPOSE. IT BEING AGREED THAT AS THE LESSEE SELECTED BOTH THE
PRODUCT AND THE SUPPLIER, NO DEFECT, EITHER PATENT OR LATENT SHALL RELIEVE
LESSEE OF ITS OBLIGATION HEREUNDER. LESSEE AGREES THAT LESSOR SHALL NOT BE
LIABLE FOR SPECIFIC PERFORMANCE OR ANY LIABILITY, LOSS, DAMAGE OR EXPENSE OF ANY
KIND INCLUDING, WITHOUT LIMITATION, INDIRECT, INCIDENTAL, CONSEQUENTIAL OR
SPECIAL DAMAGES OF ANY NATURE, DAMAGES ARISING FROM THE LOSS OF USE OF PRODUCT,
LOST DATA, LOST PROFITS, OR FOR ANY CLAIM OR DEMAND.
<PAGE>

12.  Indemnity
Lessee shall indemnify and hold harmless Lessor and Lessor's Assignee from and
against any and all claims, actions, suits, proceedings, liabilities, damages,
penalties, costs and expenses (including reasonable attorneys' fees), arising
out of the use, operation, possession, ownership (for strict liability in tort
only), selection, leasing, maintenance, delivery or return of any item of
Product.

13.  Default and Remedies
Lessee shall be in default under this Master Lease if (i) Lessee fails to pay
any Rent within ten (10) days of due date; (ii) Lessee fails to perform or
observe or breaches any covenant or condition or any representation or warranty
in any Lease, and such failure or breach continues unremitted for a period of
ten (10) days after written notice from Lessor; (iii) Lessee, except as
expressly permitted in the Lease, attempts to move, sell, transfer, encumber, or
sublet without consent any item of Product leased under any Lease; (iv) Lessee
files or has filed against it a petition in bankruptcy or becomes insolvent or
makes an assignment for the benefit of creditors or consents to the appointment
of a trustee or receiver or either shall be appointed for Lessee or for a
substantial part of its property without its consent;, (v) Lessee or any
guarantor of Lessee is declared legally deceased or if Lessee shall terminate
its existence by merger, consolidation, sale of substantially all of its assets
or otherwise; (vi) Lessee's ratio of Debt to Total Capital (as such terms are
defined in that certain Master Lease Line of Credit and Warrant Agreement dated
as of ________, 2000 between Lessor and Lessee), for any fiscal quarter, is
greater than 0.7 to 1.00; (vii) Lessee shall enter into any business other than
that in which it is engaged on the date hereof and businesses reasonably related
or incidental thereto; or (viii) Lessee shall be in default under any agreement
with any third party or parties which default consists of the failure of Lessee
to pay any debt at maturity or which results in a right by such third party or
parties, whether or not exercised, to accelerate the maturity of any debt of
Lessee in an amount in excess of One Million Dollars ($1,000,000). Lessee shall
promptly notify Lessor of the occurrence of any default listed in clauses (vi)
through (viii) of this paragraph.

Upon default, Lessor may, at its option, take one or more of the following
actions; (i) declare all sums due and to become due under any or all Schedules
immediately due payable, (ii) require Lessee to return immediately all Product
leased under such Schedule(s) to Lessor in accordance with Section 6 hereof,
(iii) without breach of the peace take immediate possession of and remove the
Product; (iv) sell any or all of the Product at public or private sale or
otherwise dispose of, hold, use or lease to others, or; (v) exercise any right
or remedy which may be available to Lessor under applicable law, including the
right to recover damages for the breach of any such Schedule(s). In addition,
Lessee shall be liable for reasonable attorney's fees, other costs and expenses
resulting from any default, or the exercise of Lessor's remedies, including
placing any such Product in the condition required by Section 6 hereof. Each
remedy shall be cumulative and in addition to any other remedy otherwise
available to Lessor at law or in equity. No express or implied waiver of any
default shall constitute a waiver of any of Lessor's other rights.

14.  Lessee's Representations
            Lessee represents and warrants for this Master Lease and each
Schedule that the execution, delivery and performance by Lessee have been duly
authorized by all necessary corporate action; the individual executing was duly
authorized to do so; the Master Lease and each Schedule constitute valid,
binding agreements of the Lessee enforceable in accordance with their terms;
that all information supplied by Lessee, including but not limited to the credit
application and other financial information concerning Lessee, is accurate in
all material respects as of the date provided; and if there is any material
change in such information prior to manufacturer's or, if appropriate,
supplier's shipment of Product under the Schedule, Lessee will advise Lessor of
such change in writing.

15.  Applicable Law

            This Master Lease and each Schedule shall in all respects be
governed by and construed in accordance with the laws of the state of California
without giving effect to the principles of conflict of laws.

16.  Miscellaneous

            Lessee agrees to execute and deliver to Lessor such further
documents, including, but not limited to, financing statements, assignments, and
financial reports and take such further action as Lessor may reasonably request
to protect Lessor's interest in the Product.

            The performance of any act or payment by Lessor shall not be deemed
a waiver of any obligation or default on the part of Lessee. Lessor's failure to
require strict performance by Lessee of any of the provisions of this Master
Lease shall not be a waiver thereof. No rights or remedies referred to in
Article 2A of the Uniform Commercial Code will be conferred on Lessee unless
expressly granted in this Master Lease.

            This Master Lease together with any Schedule constitutes the entire
understanding between the parties and supersedes any previous representations or
agreements whether verbal or written with respect to the use, possession and
lease of the Product described in that Schedule. In the event of a conflict, the
terms of the Schedule shall prevail over the Master Lease.
<PAGE>

         No amendment or change of any of the terms or conditions herein shall
be binding upon either party unless they are made in writing and are signed by
an authorized representative of each party. Each Schedule is non-cancelable for
the full term specified and each Schedule shall be binding upon, and shall inure
to the benefit of Lessor, Lessee, and their respective successors, legal
representatives and permitted assigns.

         All agreements, representations and warranties contained herein shall
be for the benefit of Lessor and shall survive the execution, delivery and
termination of this Master Lease, any Schedule or related document.

         Any provision of this Master Agreement and/or each Schedule which is
unenforceable shall not cause any other remaining provision to be ineffective or
invalid. The captions set forth herein are for convenience only and shall not
define or limit any of the terms hereof. Any notices or demands in connection
with any Schedule shall be given in writing by regular or certified mail at the
address indicated in the Schedule, or to any other address specified.

         Lessee shall bear and reimburse Lessor for all third party expenses
incurred in connection with any Schedule entered into pursuant to this Master
Lease.

         THIS MASTER LEASE SHALL BECOME EFFECTIVE ON THE DATE

         ACCEPTED BY LESSOR.

         LESSOR:   SUN  MICROSYSTEMS           LESSEE:  DIGITAL ISLAND, INC.
FINANCE

         A Sun Microsystems, Inc. Business

_____________________________________________  _________________________________
BY:                                            BY:
_____________________________________________  _________________________________
NAME:                                          NAME:
_____________________________________________  _________________________________
TITLE:                                         TITLE:
_____________________________________________  _________________________________
DATE:                                          DATE:
_____________________________________________  _________________________________

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