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SECOND AMENDMENT TO LEASE

Office Lease Agreement

SECOND AMENDMENT TO LEASE | Document Parties: DIGITAL INSIGHT CORP | ARDEN REALTY FINANCE PARTNERSHIP, L.P You are currently viewing:
This Office Lease Agreement involves

DIGITAL INSIGHT CORP | ARDEN REALTY FINANCE PARTNERSHIP, L.P

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Title: SECOND AMENDMENT TO LEASE
Date: 3/10/2004
Industry: Computer Services    

SECOND AMENDMENT TO LEASE, Parties: digital insight corp , arden realty finance partnership  l.p
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Exhibit 10.14

 

SECOND AMENDMENT TO LEASE

(5601 Lindero Canyon Road)

 

THIS SECOND AMENDMENT TO LEASE (“ Second Amendment ”) is made and entered into as of the 23rd day of May, 2003, by and between ARDEN REALTY FINANCE PARTNERSHIP, L.P., a California limited partnership (“ Landlord ”) and DIGITAL INSIGHT CORPORATION, a Delaware corporation (“ Tenant ”).

 

R E C I T A L S :

 

A. Landlord and Tenant entered into that certain Standard Office Lease dated as of March 6, 2000 (the “ Original Lease ”), as amended by that certain First Amendment to Standard Office Lease dated as of February 15, 2001 (“ First Amendment ”), whereby Landlord leased to Tenant and Tenant leased from Landlord certain office space located in that certain building located and addressed at 5601 Lindero Canyon Road, Westlake Village, California (the “ Building ”). The Original Lease, as amended by the First Amendment, may be referred to herein as the “ Lease ”.

 

B. By this Second Amendment, Landlord and Tenant desire to extend the Term of the Lease and to otherwise modify the Lease as provided herein.

 

C. Unless otherwise defined herein, capitalized terms as used herein shall have the same meanings as given thereto in the Original Lease.

 

NOW, THEREFORE, in consideration of the foregoing recitals and the mutual covenants contained herein, and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereto hereby agree as follows:

 

A G R E E M E N T :

 

1. The Premises . Landlord and Tenant hereby agree that pursuant to the Lease, Landlord currently leases to Tenant and Tenant currently leases from Landlord that certain office space in the Building containing 52,130 rentable square feet located on the first (1st) floor of the Building and known as Suite 100 (the “ Premises ”), as outlined on Exhibit ”A” to the Original Lease.

 

2. Term .

 

2.1. Extended Term . The Expiration Date shall be extended such that the Lease shall terminate on May 31, 2011 (“ New Termination Date ”), subject to early termination as provided in Section 2.2 below and subject to extension as provided in Section 9 below. The period from April 8, 2005 through the New Termination Date specified above, shall be referred to herein as the “ Extended Term .”

 

2.2. Termination Option . Provided Tenant fully and completely satisfies each of the conditions set forth in this Section 2.2, Tenant shall have the option (“ Termination Option ”) to terminate the Lease (as amended by this Second Amendment) effective as of May 31, 2008 (“ Termination Date ”) only. In order to exercise the Termination Option, Tenant must fully and completely satisfy each and every one of the following conditions: (a) Tenant must give Landlord written notice (“ Termination Notice ”) of its exercise of the Termination Option, which Termination Notice must be delivered to Landlord on or before August 31, 2007, (b) at the time of the Termination Notice, Tenant shall not be in default under the Lease (as amended by this Second Amendment) after notice and expiration of applicable cure periods, and (c) Tenant shall pay to Landlord a termination fee (“ Termination Fee ”) in the amount of Seven Hundred Forty-Five Thousand Dollars ($745,000.00). However, if as of the date of the Termination Notice, (1) Landlord has paid to Tenant the Proposition 13 Purchase Price pursuant to Section 5.4 below, then the Termination Fee shall be increased by that portion of the Proposition 13 Purchase Price applicable to the period after the Termination Date, or (2) Tenant


has exercised its right of first offer pursuant to Article 32 of the Original Lease (as amended by Section 10 below), then the Termination Fee shall be increased by the sum of (A) the discounted present value (using a discount factor of ten percent (10%) per annum) of an amount equal to six (6) installments of monthly Basic Rental for the First Offer Space at the rate which would have been payable by Tenant for the First Offer Space for the first six (6) months after the Termination Date and (B) the unamortized amount, as of the Termination Date, of any out-of-pocket sums expended by Landlord in connection with any such expansion (including, without limitation, any sums expensed by Landlord to improve the First Offer Space and any brokerage commissions incurred by Landlord in connection with such expansion) with such amortization to be calculated over an amortization period from the effective date of Tenant’s lease of the First Offer Space until May 31, 2011, based upon equal monthly payments of principal and interest throughout such amortization period, with interest imputed on the outstanding principal balance at the rate of ten percent (10%) per annum. Fifty percent (50%) of the Termination Fee must be paid by Tenant to Landlord concurrently with Tenant’s delivery of the Termination Notice (as a further condition to Tenant’s exercise of the Termination Option), and the remaining fifty percent (50%) of the Termination Fee shall be paid by Tenant to Landlord within three (3) months after the date of delivery of the Termination Notice. Tenant’s delivery of the Termination Fee to Landlord shall not relieve Tenant of its obligation to make all other payments to Landlord due under the Lease (as amended by this Second Amendment) through the Termination Date. Notwithstanding anything contained in this Section 2.2 to the contrary, in the event Tenant fails to deliver the remaining fifty percent (50%) of the Termination Fee to Landlord within three (3) months after the date of delivery of the Termination Notice, Landlord shall have the option to either (i) deem the Termination Notice rescinded, in which case the Lease (as amended by this Second Amendment) shall continue in full force and effect for the remainder of the Extended Term and Landlord shall forthwith refund to Tenant the initial fifty percent (50%) of the Termination Fee previously paid by Tenant less any out-of-pocket expenses Landlord may have incurred in marketing and attempting to lease the Premises to a successor tenant(s) after Landlord’s receipt of Tenant’s Termination Notice ( e.g. , advertising costs, costs of printing marketing materials and attorneys fees and space planning costs incurred in connection with potential transactions with a successor tenant(s)), or (ii) deem the Lease (as amended by this Second Amendment) terminated as of the Termination Date and pursue any remedies Landlord may have against Tenant for failure to pay such portion of the Termination Fee.

 

3. Monthly Basic Rental . Notwithstanding anything to the contrary in the Lease, during the Extended Term, Tenant shall pay, in accordance with the provisions of this Section 3 and subject to abatement pursuant to Section 4 below, monthly Basic Rental for the Premises as follows:

 

 

 

 

 

 

 

 

Period


 

  

Monthly Basic Rental


 

  

Monthly Basic Rental Per

Rentable Square Foot


 

04/08/05 – 05/31/06

  

$

59,428.20

  

$

1.14

06/01/06 – 11/30/08

  

$

64,641.20

  

$

1.24

12/01/08 – 05/31/11

  

$

69,854.20

  

$

1.34

 

4. Rental Abatement . Notwithstanding anything to the contrary contained in the Lease or in this Second Amendment, and provided that Tenant faithfully performs all of the terms and conditions of the Lease, as amended by this Second Amendment, Landlord hereby agrees to abate Tenant’s obligation to pay monthly Basic Rental from April 8, 2005 through May 31, 2005. During such abatement period, Tenant shall still be responsible for the payment of all of its other monetary obligations under the Lease, as amended by this Second Amendment. In the event of a default by Tenant under the terms of the Lease, as amended by this Second Amendment, that results in early termination pursuant to the provisions of Article 19 of the Original Lease, then as a part of the recovery set forth in Article 20 of the Original Lease, Landlord shall be entitled to the recovery of the monthly Basic Rental that was abated under the provisions of this Section 4.

 

5. Tax Costs .

 

5.1. Reassessment . Notwithstanding anything to the contrary contained in the Lease, in the event that during the Extended Term, any sale, refinancing, or “change in ownership” (as defined in California Revenue and Taxation Code Section 60, et seq.) of the Real

 

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Property is consummated, and as a result thereof, and to the extent that in connection therewith, the Real Property is reassessed (the “ Reassessment ”) for real estate tax purposes by the appropriate governmental authority pursuant to the terms of Proposition 13, then the following provisions shall apply to such Reassessment of the Real Property.

 

5.2. Tax Increase . For purposes of this Section 5, the term “ Tax Increase ” shall mean that portion of the Tax Costs, after taking into account the Reassessment, which is attributable solely to the Reassessment. Accordingly, the term Tax Increase shall not include any portion of the Tax Costs which (i) is attributable to the initial assessment of the value of the Real Property, the Base, Shell and Core of the Building or the tenant improvements located in the Building, (ii) is attributable to assessments which were pending immediately prior to the Reassessment which assessments were conducted during, and included in, such Reassessment or (iii) is attributable to the annual inflationary increase of real estate taxes permitted to be assessed annually under Proposition 13.

 

5.3. Protection . During the period from April 8, 2003 through May 31, 2008, any Tax Increase shall be excluded from Tax Costs. During the period from June 1, 2008 through May 31, 2009, seventy-five percent (75%) of any Tax Increase shall be excluded from Tax Costs. During the period from June 1, 2009 through May 31, 2010, fifty percent (50%) of any Tax Increase shall be excluded from Tax Costs. During the period from June 1, 2010 through the New Termination Date, twenty-five percent (25%) of any Tax Increase shall be excluded from Tax Costs.

 

5.4. Landlord’s Purchase of Protection . The amount of Tax Costs which Tenant is not obligated to pay or will not be obligated to pay during the Extended Term in connection with a particular Reassessment pursuant to the terms of Section 5.3 above, shall be sometimes referred to hereafter as a “ Proposition 13 Protection Amount .” If the occurrence of a Reassessment is reasonably foreseeable by Landlord and the Proposition 13 Protection Amount attributable to such Reassessment can be reasonably quantified or estimated for each Lease Year commencing with the Lease Year in which the Reassessment will occur, the terms of this Section 5.4 shall apply to each such Reassessment. Upon notice to Tenant, Landlord shall have the right to purchase the Proposition 13 Protection Amount relating to the applicable Reassessment (the “ Applicable Reassessment ”), at any time during the Extended Term, by paying to Tenant an amount equal to the Proposition 13 Purchase Price, as that term is defined below, provided that the right of any successor of Landlord to exercise its right of repurchase hereunder shall not apply to any Reassessment which results from the event pursuant to which such successor of Landlord became the Landlord under the Lease. As used herein, “ Proposition 13 Purchase Price ” shall mean the present value of the Proposition 13 Protection Amount remaining during the Extended Term, as of the date of payment of the Proposition 13 Purchase Price by Landlord. Such present value shall be calculated (i) by using the portion of the Proposition 13 Protection Amount attributable to each remaining Lease Year (as though the portion of such Proposition 13 Protection Amount benefited Tenant at the end of each Lease Year), as the amounts to be discounted, and (ii) by using discount rates for each amount to be discounted equal to (A) the prime interest rate, as reported in the Wall Street Journal as of the date of Landlord’s exercise of its right to purchase, as set forth in this Section 5.4, plus (B) two percent (2%) per annum. Upon such payment of the Proposition 13 Purchase Price, the provisions of Section 5.3 above shall not apply to any Tax Increase attributable to the Applicable Reassessment. Since Landlord is estimating the Proposition 13 Purchase Price because a Reassessment has not yet occurred, then when such Reassessment occurs, if Landlord has underestimated the Proposition 13 Purchase Price, then upon notice by Landlord to Tenant, Tenant’s Basic Rental next due shall be credited with the amount of such underestimation, and if Landlord overestimates the Proposition 13 Purchase Price, then upon notice by Landlord to Tenant, Tenant’s Basic Rental next due shall be increased by the amount of the overestimation.

 

6. Condition of the Premises . Except as set forth in Section 7 below, Tenant hereby agrees to accept the Premises in its “as-is” condition. Tenant also acknowledges that Landlord has made no representation or warranty regarding the condition of the Premises.

 

7. Refurbishment of the Premises . Notwithstanding anything to the contrary contained herein, Tenant shall be entitled to renovate the then-existing tenant improvements in the Premises in accordance with this Section 7. In connection therewith, Tenant shall be entitled to a one-time tenant refurbishment allowance (the “ Refurbishment Allowance ”) in the amount of Seven Dollars ($7.00) per rentable square foot of the Premises for the costs relating to the

 

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design and construction of renovations to the then-existing tenant improvements in the Premises that are to be permanently affixed to the Premises (the “ Refurbished Improvements ”). In no event shall Landlord be obligated to make disbursements under this Section 7 in a total amount which exceeds the Refurbishment Allowance, and in no event shall Tenant be entitled to any credit for any unused portion of the Refurbishment Allowance (except for the Rent Credit and the Calabasas Allowance as provided in Section 7.2.3 below) not applied by Tenant by December 31, 2006.

 

7.1. Refurbishment Allowance Items . The Refurbishment Allowance shall be disbursed by Landlord for costs incurred to design and construct the Refurbished Improvements (collectively the “ Refurbishment Allowance Items ”), including without limitation, payment of the fees of the architect and engineer(s) retained by Tenant (if any), in connection with the preparation of the plans and specifications prepared for the Refurbished Improvements (“ Refurbishment Drawings ”). In addition, the Refurbishment Allowance Items may include architectural fees, permit fees, costs of installation of cabling and internal relocation fees (collectively “ Soft Costs ”); provided, however, that such Soft Costs shall not exceed Three and 50/100 Dollars ($3.50) per rentable square foot of the Premises.

 

7.2. Disbursement of Refurbishment Allowance . During the construction of the Refurbished Improvements, but not prior to April 8, 2005, Landlord shall make monthly disbursements of the Refurbishment Allowance for Refurbishment Allowance Items as follows:

 

7.2.1 Monthly Disbursements . On or before the first day of each calendar month during the construction of the Refurbished Improvements, Tenant may deliver to Landlord: (i) a request for payment of Tenant’s general contractor (“ Contractor ”) and such Contractor (if Tenant elects to retain a general contractor, provided that Tenant must retain a general contractor if Landlord reasonably determines that one is necessary given the scope of the job) shall be subject to Landlord’s prior written approval, which approval shall not be unreasonably withheld, delayed or conditioned, and which request shall be approved by Tenant, in a form to be provided by Landlord; (ii) invoices from all subcontractors, laborers, materialmen and suppliers (together with the Contractor (if applicable) “ Tenant’s Agents ”), for labor rendered and materials delivered to the Premises; and (iii) executed conditional mechanics’ lien releases from all of Tenant’s Agents which shall comply with the appropriate provisions, as reasonably determined by Landlord, of the California Civil Code. In addition, Tenant shall deliver to Landlord a copy of Tenant’s construction contract with the Contractor or a schedule of values for the construction job indicating a breakdown by trade. Within thirty (30) days after the later of Landlord’s receipt of all the information listed in this Section 7.2.1 above or April 8, 2005, Landlord shall deliver a check payable jointly to Tenant and Tenant’s Agents in payment of the lesser of: (A) the amounts so requested by Tenant, as set forth in this Section 7.2.1 above, less a ten percent (10%) retention (the aggregate amount of such retentions to be known as the “ Final Retention ”), and (B) the bal


 
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