EXHIBIT 99.3
SECOND AMENDMENT TO LEASE AND PAYMENT AGREEMENT
THIS SECOND AMENDMENT TO LEASE AND PAYMENT AGREEMENT ("Second
Amendment") is made as of December 3, 2001 ("Execution Date"), by and between
XXXXX XXXXXXXX PROPERTIES, LLC, a California limited liability company
("Landlord"), and ORGANIC, INC., a Delaware corporation ("Tenant").
RECITALS:
A. Landlord and Tenant are parties to that certain lease dated November
8, 1999 relating to certain premises as more particularly described in the lease
(the "Premises"), which lease, as modified by that First Amendment to Lease and
Payment Agreement dated as of March 20, 2001 (the "First Amendment"), is
hereinafter referred to as the "Lease".
B. The Lease covers certain premises in the building located at 000
Xxxxxxxx Xxxxxx, Xxx Xxxxxxxxx, Xxxxxxxxxx (the "Building"), all as more
particularly described in the Lease (the "Premises").
C. As a result of, among other factors, the September 11, 2001 calamity
and the resulting impact on its business and operations, Tenant has requested
Landlord to terminate the Lease with respect to a portion of the Premises
comprising the entire third floor of the Building and the entire first floor of
the Building (the "Termination Space"), subject to the terms and conditions of
this Second Amendment. The Lease shall not be terminated with respect to the
existing portion of the second floor (the "Existing Premises").
D. Landlord and Tenant have agreed to incorporate a portion of the
second floor comprising 34,501 rentable square feet into the Existing Premises
(the "Second Floor Premises") as more particularly depicted on Exhibit A,
attached hereto and made a part hereof such that the Premises shall be comprised
of the entire second floor of the Building, subject to the terms of this Second
Amendment.
E. Fremont Investment & Loan ("Lender"), Landlord's lender, has
approved this Second Amendment, including amending the Nondisturbance Agreement
as provided in Section 23 of this Second Amendment.
F. Tenant has agreed to make certain payments incurred in connection
with the Termination Space, subject to the terms and conditions of this Second
Amendment.
G. Tenant agrees that the present value of the rents and other sums
payable under the Lease with respect to the Termination Space less the
reasonable rental value of the Termination Space for the period from the
Effective Date through the Expiration Date exceeds the Termination Fee (as
defined in Section 5) to be paid by Tenant under this Second Amendment and that
the Termination Fee is less than the amount of damages which Landlord would be
entitled to receive with respect to the Termination Space if such damages were
determined in accordance with California Civil Code Section 1951.2 ("Landlord's
Damages").
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NOW, THEREFORE, for valuable consideration, the receipt and sufficiency
of which are hereby acknowledged, Landlord and Tenant agree as follows:
1. Defined Terms. Capitalized terms used in this Second Amendment shall
have the same meanings set forth in the Lease, except as otherwise specified
herein and except for terms capitalized in the ordinary course of punctuation.
2. Effective Date.
(a) Promptly after execution and delivery of this Second
Amendment by Landlord and Tenant, Tenant will make the payments and Landlord and
Tenant will take the other actions specified in Section 5 hereof. Landlord shall
confirm its receipt of such payments and the parties shall verify that such
actions have been so taken at an in-person or telephonic meeting of
representatives of the parties (the "Closing") to be held as promptly as
practicable but in no event more than three business days after the date hereof.
If the Closing occurs, without further action, the Lease will be deemed amended
effective as of November 1, 2001 (the "Effective Date"). If the Closing does not
occur, this Second Amendment shall be null and void and of no force and effect
without liability by any party hereunder to any other party.
(b) Tenant agrees to execute an Estoppel Certificate in
substantially the form and content of the Estoppel Certificate executed in
connection with the First Amendment promptly after request by Landlord.
3. Termination Space.
(a) As of the Effective Date, the Lease, with respect to the
Termination Space only, shall terminate and the term of the Lease shall expire
with the same force and effect as if the term of the Lease was, by the
provisions thereof, fixed to expire on the Effective Date, but only with respect
to the Termination Space.
(b) Notwithstanding anything to the contrary contained in
Article 12 of the Lease or elsewhere in the Lease, except as expressly set forth
in Section 8 to the contrary, Landlord agrees to accept surrender of the
Termination Space in its existing "as is" condition as of the Execution Date,
subject to casualty damage occurring after the Execution Date; provided,
however, that in the event of such casualty damage Tenant agrees to assign or
pay to Landlord any insurance proceeds relating to Tenant Additions in the
Termination Space. In no event shall Tenant be required to remove any Tenant
Additions therefrom.
(c) As of the Effective Date, Landlord and Tenant hereby
release and discharge each other from any and all claims with respect to the
payment of Monthly Base Rent and Additional Rent with respect to the Termination
Space with respect to all payments made and obligations arising or accruing
prior to the Effective Date.
4. Lease Modifications. Notwithstanding anything in the Lease to the
contrary, effective as of the Effective Date to and including October 31, 2010
(the "Expiration Date"), the Lease is modified as follows:
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(a) Landlord shall deliver the Second Floor Premises to Tenant
substantially in the same physical condition as the same exist on the date
hereof, free of any rights of occupancy and claims of lien, other than the lien
in favor of Lender, which claims of lien may impact Tenant's use and occupancy
of the Second Floor Premises.
(b) The Rentable Area of the Premises shall be 71,498 rentable
square feet, the Rentable Area of the Building shall be 210,551 rentable square
feet and Tenant's Share shall equal 33.958%.
(c) If the Lease is not Credit Enhanced (as hereinafter
defined), Monthly Base Rent and Annual Base Rent will equal, respectively,
$178,745.00 per month and $2,144,940.00 per annum and such Monthly Base Rent
shall be increased to $203,119.00 per month and $2,437,428.00 per annum
commencing on December 1, 2006. If the Lease is Credit Enhanced, Monthly Base
Rent under the Lease with respect to the Premises shall be as follows:
PERIOD FROM/TO MONTHLY BASE RENT
-------------- -----------------
Effective Date - 10/31/02 $ 178,745.00
11/1/02-10/31/03 $ 119,163.00
11/1/03-10/31/04 $ 119,163.00
11/1/04-10/31/05 $ 119,163.00
11/1/05-10/31/06 $ 119,163.00
11/1/06-10/31/07 $ 135,412.00
11/1/07-10/31/08 $ 135,412.00
11/1/08-10/31/09 $ 135,412.00
11/1/09-10/31/10 $ 135,412.00
If the Lease is Credit Enhanced, Annual Base Rent will equal the amounts set
forth in the table immediately above times 12. In addition to Monthly Base Rent,
after the Effective Date, Tenant shall pay Additional Rent and parking charges
in accordance with the terms of the Lease, as amended by this Second Amendment.
(d) Pursuant to a separate agreement (the "November 5th
Agreement"), on November 6, 2001, Tenant paid $300,000.00 as a portion of the
Monthly Base Rent, Additional Rent and parking charges due on November 1, 2001.
Landlord shall credit Tenant with the difference between $300,000.00 and the
Monthly Base Rent, Additional Rent and parking charges provided for in this
Second Amendment ("Rent Credit"). The Rent Credit may be applied by Tenant to
the installment of Monthly Base Rent, Additional Rent and parking charges next
occurring on December 1, 2001. If the Effective Date shall not occur, the
$300,000 will be applied against Tenant's obligations due under the Lease as of
November 1, 2001.
(e) Landlord currently holds a letter of credit ("Existing
Letter of Credit") in the amount of $10,000,000.00 as security for the
performance of Tenant's obligations under the Lease. If the Closing occurs,
Landlord (i) irrevocably waives its rights to draw in the aggregate more than
$4.3 million under the Existing Letter of Credit (the "Reduced LC Amount"), and
agrees that the Existing Letter of Credit will be subject to Section 4(f) below,
and (ii) agrees that at or following the Closing, Tenant may cause the Existing
Letter of Credit to be reduced to $4.3 million or replaced by another letter of
credit on the same terms (as modified hereby) issued by a
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bank acceptable to Lender in its discretion having an office in the San
Francisco area (a "Qualified LC Issuer"), and (iii) to execute such
documentation as may be reasonably requested by the issuers of the Existing
Letter of Credit or Tenant to evidence the foregoing and Section 4(f) hereof.
Lender hereby approves of the following banks as Qualified LC Issuers: XX Xxxxxx
- Xxxxx, Citibank, Bank of America, Xxxxx Fargo Bank, Fleet Bank, Banc One,
Northern Trust and First Chicago NBD.
(f) If the Closing occurs, Section 1.1(12) of the Lease shall
be amended to read as follows:
(12) SECURITY DEPOSIT: $4,300,000.00 Letter of Credit
From and after October 31, 2002, provided that a monetary Default has
not occurred with respect to Monthly Base Rent, the Letter of Credit
shall be reduced by the amount of $179,166.67 per month until the
Letter of Credit is in the amount of $2,150,000.00, after which there
shall be no further reductions in the Letter of Credit until the last
12 months of the Term (during which the Letter of Credit will be
further reduced by $179,166.67 for each month in which no monetary
Default shall have occurred with respect to Monthly Base Rent,
provided, if the Lease is Credit Enhanced, the Letter of Credit (as the
same may have been reduced) will be, without further action, be
returned to Tenant or otherwise reduced to zero as provided in Section
4(k) below, notwithstanding any prior Defaults.
(g) As of the Effective Date, without further action, Article
25 of the Lease regarding the Letter of Credit shall be modified to delete
Section 25.6 in its entirety.
(h) As of the Effective Date, without further action, the
total number of parking spaces to which Tenant is entitled shall be reduced from
177 to 72.
(i) As of the Effective Date, without further action, Article
28 of the Lease regarding Signage shall be amended by deleting the entire
Section except for Section 28(i), which shall remain in full force and effect.
(j) As of the Effective Date, without further action, Landlord
releases and discharges Tenant from any and all obligations to be observed or
performed by Tenant under Paragraph 9 of the First Amendment.
(k) If the Closing occurs, if Tenant shall deliver to Landlord
(i) evidence that an entity has for a continuous period of not less than 12
months a minimum credit rating of "A" (or its equivalent) on its senior
unsecured debt and its senior unsecured bank loan ratings by Standard & Poor's
and "A3" (or its equivalent) by Xxxxx'x Investors Service, Inc. (each such
entity, a "Qualified Credit Enhancer"), (ii) an assignment and assumption
agreement reasonably acceptable to Landlord and Landlord's lender ("Assumption
Agreement") in which such Qualified Credit Enhancer expressly assumes all of
Tenant's obligations under the Lease occurring after the Effective Date, (iii) a
certificate signed by the corporate secretary or an assistant secretary of such
Qualified Credit Enhancer to the effect that the Assumption Agreement has been
duly authorized, executed and delivered by the Qualified Credit Enhancer, and
(iv) evidence or a certificate as aforesaid that such Qualified Credit Enhancer
is in good
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standing in the State of California or has submitted to the jurisdiction of
California courts for purposes of enforcement of the Assumption Agreement
(collectively, the "Credit Enhancement Conditions" and the satisfaction thereof,
"Credit Enhanced"), then, without further action, the Monthly Base Rent and
Annual Rent will be immediately reduced in accordance with Section 4(c) hereof
and the requirement for a security deposit shall terminate and any cash or
Letter of Credit held by Landlord as security shall be cancelled and immediately
returned to Tenant. Notwithstanding the foregoing, for a period of 1 year after
the Execution Date, Omnicom Group, Inc. shall be deemed a Qualified Credit
Enhancer, whether or not it satisfies the credit ratings specified in clause (i)
above. Notwithstanding the foregoing, if Landlord notifies Tenant that it in
good faith disputes that the Credit Enhancement Conditions have been satisfied,
Tenant shall promptly meet with Landlord. If the parties fail to reach agreement
within 30 days, the parties agree promptly to submit such dispute (and no other
dispute) to binding arbitration in San Francisco, California before a retired
judge. The determination of the arbitrator on the dispute as to whether or not
the Credit Enhancement Conditions have been satisfied, shall be final and
binding on the parties. Pending the result of such arbitration, the Monthly Base
Rent shall not be reduced and Landlord shall not be required to return any cash
or Letter of Credit to Tenant pending the result of such arbitration. If the
arbitrator determines that the Credit Enhancement Conditions have been
satisfied, Landlord shall immediately refund to Tenant any overages in Monthly
Base Rent, together with Default Interest, and return any cash or Letter of
Credit to Tenant. The non-prevailing party shall pay for the costs of the
arbitrator.
(l) Landlord hereby consents to the acquisition of common
shares of Tenant by Seneca Investments LLC ("Seneca") or its subsidiary, whether
or not a change in control results therefrom. Notwithstanding any provision of
Article 10 of the Lease to the contrary, Tenant may assign the Lease or sublease
the Premises or any portion thereof to any Affiliate without the consent of
Landlord and without any right to Recapture or claim to excess rent by Landlord;
provided that the use or proposed use of the Premises, or any portion thereof,
by any such assignee or sublessee of Tenant may not violate Section 7.1 of the
Lease. The term "Affiliate" in Section 1.3 of the Lease is modified to read as
follows:
AFFILIATE: (i) Omnicom Group Inc. ("Omnicom"), Seneca
Investments LLC ("Seneca"), or any corporation or other
business entity which controls, is controlled by or is under
common control with, Tenant, Omnicom or Seneca, or (ii) a
successor to Tenant by merger, consolidation or
reorganization, or (iii) an entity which acquires all or
substantially all of the assets or stock of Tenant. For
purposes of this paragraph, the term "control" shall include a
25% ownership interest.
(m) Upon request by Tenant, Landlord shall either sub-meter
Tenant's Premises or install a monitoring device that effectively measures such
utility consumption. The costs of installing a sub-meter or monitoring device
shall be borne 50% by Landlord and 50% by Tenant; provided, however, that in no
event shall Tenant be liable for an amount in excess of $2,500.00 in connection
with such installation. Prior to the Execution Date, Tenant has been paying the
electrical charges for the Premises directly to the utility provider and such
electrical charges have not been included in Tenant's Additional Rent Deposit.
From and after the Effective Date, Tenant shall no longer pay such electrical
charges directly to the utility provider,
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but Tenant's Additional Rent Deposit shall be increased by the cost of
electricity furnished to the Premises and Tenant's Share of electricity
furnished to the Common Areas. If Landlord has not installed a sub-meter or
monitoring device, such amounts shall be reasonably estimated by Landlord.
(n) Section 14.1 of the Lease is amended so that Landlord may
terminate the Lease as therein provided only if Landlord simultaneously cancels
all other leases in respect of the Building.
(o) Landlord shall, at Landlord's expense (without
reimbursement as an Operating Expense or otherwise), construct a common area
lobby on the ground floor of the Building upon the earlier of (i) the occupancy
date of any tenant occupying all or any portion of the first floor of the
Building or (ii) the date such construction is required by the City and County
of San Francisco. At such time as Landlord leases all or any portion of the
third floor of the Building to another tenant, Landlord shall, at Landlord's
expense (without reimbursement as an Operating Expense or otherwise), install a
tenant directory on the ground floor of the Building and make such additional
modifications as may be reasonably required in connection with the Building
becoming a multi-tenant building.
5. Closing, Termination Fee, Etc.
(a) At the Closing (i) Landlord shall provide Tenant evidence
that Lender has approved this Second Amendment and shall re-affirm to Tenant in
writing the representation and warranty made by Landlord in Section 10(c) below,
(ii) the Existing Letter of Credit will be modified in accordance with Section
4(e) hereof, and (iii) Tenant shall pay a termination fee to Landlord consisting
of the following (collectively, the "Termination Fee"): (1) $10,000,000.00 (the
"$10,000,000.00 Payment") which will be paid as hereafter provided and will be
applied for costs, expenses, damages, and losses including, without limitation,
Reimbursement Costs as defined in Section 5(c) below; (2) a cash payment in the
amount of $150,000.00 to reimburse Landlord for and/or pay Landlord's attorneys
fees, consultant fees and fees and costs to the Lender in connection with the
transactions contemplated by this Second Amendment, which will be paid at or
prior to the Closing; and (3) a letter of credit in the amount of $1,600,000.00
(the "$1.6 million LC") issued by Silicon Valley Bank or a Qualified LC Issuer
and which shall be in a form approved by Landlord and Lender to reimburse
Landlord for and/or pay Landlord for any and all commissions incurred and to be
incurred by Landlord in connection with the initial leasing of the Termination
Space after the Effective Date or the sale of the Building, which will be
delivered at or prior to the Closing and shall be payable upon Landlord's
presentation of a certificate that it has incurred commissions in the requested
amount. Notwithstanding the foregoing, at the Closing, in discharge of its
obligation under Section 5(a)(iii)(1), Tenant will deliver to Landlord a letter
of credit issued by a Qualified LC Issuer for the benefit of Landlord in the
face amount of $10.0 million (the "Additional Letter of Credit"); the sole
conditions applicable to Landlord's rights to draw under the Additional Letter
of Credit will be (i) the presentation of the original copy of the Additional
Letter of Credit to the issuer thereof for cancellation together with a draw
request no earlier than January 2, 2002 or later than 90 days after the date of
issuance of the Additional Letter of Credit and (ii) the re-affirmation of
Landlord's representation and warranty in Section 10(c) below. As a condition to
the draw down of any amounts under the $1.6 million LC, Landlord shall
concurrently with each such draw
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down provide Tenant with a written certificate to the effect that: (i) Landlord,
as Landlord, and _____________, as Tenant, have executed and delivered a binding
lease for premises consisting of approximately _________ rentable square feet
located on the ____ floor of the building located at 000 Xxxxxxxx Xxxxxx, Xxx
Xxxxxxxxx, Xxxxxxxxxx; the amount of the real estate commission then currently
due and owing to ____________ [and ____________] in connection with said Lease
is $__________ in accordance with the terms of a written agreement between
Landlord and said real estate broker(s); and Landlord will utilize the amount
drawn under the $1.6 million LC to pay said commission obligation(s); and/or
(ii) Landlord has sold the Building; the amount of the real estate commission
then currently due and owing to ______________ [and __________] in connection
with such sale is $__________ in accordance with the terms of a written
agreement between Landlord and said real estate broker(s); and Landlord will
utilize the amount drawn under the $1.6 million LC to pay said commission
obligation(s). If Landlord shall not have drawn down the entire amount of the
$1.6 million LC prior to its initial expiration date, Tenant shall cause the
$1.6 million LC (as the same may have been reduced by previous draws by
Landlord) to be renewed until the earlier of (A) Landlord's draw down of the
entire amount of the $1.6 million LC in connection with payment of the
commissions as provided above and (B) October 31, 2010. If the $1.6 million LC
shall not be renewed as required above at least 30 days prior to its expiration
date, such failure shall not constitute a default on the part of Tenant under
the Lease, but in such event Landlord shall be entitled to draw down the
remaining balance of the $1.6 million LC and place the same in an escrow account
(the "Commission Escrow") with a title company mutually acceptable to Landlord
and Tenant. Tenant shall pay all of the fees of the title company in connection
with the Commission Escrow. As a condition to disbursement of any amounts from
the Commission Escrow, Landlord shall concurrently with each disbursement
request provide Tenant with a written certificate in the same form as required
in connection with a draw under the $1.6 million LC. If any amount shall be
remaining in the Commission Escrow upon the Expiration Date, the remaining
balance, together with any accrued interest thereon, shall promptly be paid over
to Tenant.
(b) In addition, pursuant to documentation reasonably
requested by the Landlord, Tenant shall promptly assign all of its right, title
and interest in and to that certain Indemnity Agreement between Tenant and
Xxxxxxxxx.xxx, Inc.
(c) Reimbursement Costs shall include, without limitation, (i)
Tenant improvement costs equal to $25.00 per square foot previously paid by
Landlord, of approximately $3,574,900.00; (ii) Building upgrade costs paid
pursuant to Tenant requirements in the approximate amount of $3,537,392.00;
(iii) any other releasing expenses, including attorneys, consultants and
additional commissions, costs of constructing the lobby on the first floor, and
tenant improvement work for the Termination Space; and (iv) other sums payable
on account of Landlord's Damages with respect to the Termination Space.
(d) In the event any covenant, assignment, payment of money,
transfer of property rights or granting of any release or other benefit by
Tenant, including, without limitation any portion of the Termination Fee, is
fraudulent, preferential or otherwise voidable or recoverable in whole or in
part for any reason whatsoever under the Bankruptcy Code or any other federal or
state law (a "Voidable Transfer") and Landlord is required to repay or restore
any such Voidable Transfer or the amount or value thereof, then all liability of
Tenant under the Lease for all losses, damages, costs and expenses of Landlord
in connection with the early
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termination shall automatically be revived, reinstated and restored and shall
exist as if this Second Amendment had not been entered into except that the
termination of Tenant's right to possession of, and obligations on and after
November 1, 2001 in respect of, the Termination Space shall remain in full force
and effect as of the Effective Date; provided, however, that in such event any
amounts paid hereunder and still retained hereunder by Landlord will be applied
in direct order of maturity against Tenant's obligations as so reinstated, with
any excess to be paid over to Tenant as directed by court order or agreement
between Landlord and Tenant.
(e) Although the amount of damages that Landlord would be
entitled to receive with respect to the Termination Space pursuant to California
Civil Code Section 1951.2 exceeds the Termination Fee to be paid by Tenant under
this Second Amendment, Landlord agrees that payment of the Termination Fee
hereunder satisfies in full all liability of Tenant with respect to Landlord
Damages, and subject to Section 5(d) above, Landlord hereby releases Tenant from
any and all liability for Landlord Damages in excess of the Termination Fee.
6. Access System.
(a) On the Effective Date, Tenant hereby assigns, transfers,
conveys and sets over unto Landlord, its successors and assigns, to have and to
hold, all of Tenant's right, title and interest in and to the proximity card
access system (including all software licenses and software programs received by
Tenant for the operation of the system) for the Building, including entry and
elevators (the "Access System"), together with all the rights and appurtenances
thereto in anywise belonging to Tenant, including, without limitation, the
Guarantee/Warranty executed by Allstate Alarm Co. on December 27, 2000 and DPR
Construction, Inc. on December 12, 2000. Landlord shall use the Access System
for the benefit of tenants in the Building, including Tenant, without additional
charge, other than reasonable out-of-pocket expenses incurred by Landlord in
connection with operation, maintenance and repair of the Access System. Landlord
agrees to accept the Access System in its existing "as is" condition and Tenant
makes no representations or warranties regarding the condition, operation, or
effectiveness of the Access System.
(b) Tenant represents and warrants to Landlord that (i) Tenant
owns and has exclusive rights in the Access System free and clear of any and all
liens, claims, encumbrances, leases, assignments or security interests of any
nature or type not released at or prior to the Closing, (ii) Tenant has the full
right and authority to transfer the Access System and to consummate or cause to
be consummated the transactions contemplated by this Second Amendment, (iii) the
transfer of the Access System does not violate any agreements to which Tenant is
a party as of the date of this Second Amendment and will not violate any
agreements to which Tenant is a party as of the Effective Date and (iv) Tenant
does not need the consent of any other person or entity to transfer the Access
System not obtained prior to the date hereof. Tenant agrees to indemnify, defend
and hold harmless Landlord with respect to any and all claims, demands, causes
of action, damages, liabilities or obligations of whatever nature, whether in
law or in equity, Landlord suffers as a result of any third-party claim as to
any matter constituting a breach of any of the representations made in the
preceding sentence.
7. Prorations and Adjustments. Notwithstanding the foregoing, subject
to the November 5th Agreement, Tenant shall be and remain responsible for all
payments of Monthly
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Base Rent and Additional Rent prior to the Effective Date. Prior to the
Effective Date, Tenant shall continue to pay all other monetary obligations of
Tenant, including, without limitation, amounts for utilities and for heating,
ventilation and air conditioning which are separately metered to the Premises or
provided beyond normal business hours as requested by and separately payable by
Tenant, parking or towing charges separately payable by Tenant, or any other
costs incurred or services requested by Tenant or provided directly for Tenant's
benefit or use, as the same become due and payable under the Lease (collectively
"Specific Charges"). After the Effective Date, Landlord shall have the right to
deliver to Tenant Landlord's xxxx for Specific Charges and Tenant shall pay the
same in accordance with the terms of the Lease.
8. Removal of Tenant's Property and Tenant Work.
(a) Tenant shall within 30 calendar days of the Execution
Date, remove all of its trade fixtures, furniture and other personal property
from the third floor of the Building, and shall within 10 calendar days after
the Execution Date (except as otherwise provided in this Section 8) remove all
of the trade fixtures, furniture and other personal property of Tenant and
Tenant's contractor from the first floor of the Building. The Termination Space
shall be surrendered to Landlord in substantially the condition it is in on the
Execution Date, subject to casualty damage; provided, however, that said
deadline shall be extended for the period of time that Tenant is delayed by
reason of fire, earthquake, terrorism or other reasons beyond Tenant's
reasonable control (other than unavailability or lack of funds).
(b) Tenant shall within 60 calendar days of the Execution Date
remove all of its cable and cable trays from the first floor of the Building;
provided, however, that said deadline shall be extended for the period of time
that Tenant is delayed by reason of fire, earthquake, terrorism or other reasons
beyond Tenant's reasonable control (other than unavailability or lack of funds).
(c) Tenant shall within 60 calendar days of the Execution Date
mitigate any sound and vibration to the first floor from the server room
("Tenant Work") to standards equal to a standard private office environment in
accordance with Proposal of Xxxxxxx X. Xxxxxx Associates, Inc. dated October 29,
2001, a copy of which has been delivered to Tenant; provided, however, that said
deadline shall be extended for the period of time that Tenant is delayed by
reason of fire, earthquake, terrorism or other reasons beyond Tenant's
reasonable control (other than unavailability or lack of funds). If Tenant does
not perform the Tenant Work in a timely manner, and such failure shall continue
for 10 business days after Tenant's receipt of notice thereof from Landlord,
Tenant shall not be deemed to be in default of this Second Amendment or the
Lease, but in such event, as Landlord's sole remedy, Landlord may remove such
property and perform such work at the cost and expense of Tenant.
Notwithstanding the foregoing, it shall be a default under this Second Amendment
and the Lease if Tenant does not pay for the cost of such work within 15 days
after receipt of an invoice therefor.
9. Surrender and Release.
(a) Subject to the performance by Tenant of its obligations
hereunder, Landlord agrees to accept the surrender of the Termination Space as
of the Effective Date and release and discharge Tenant from any and all
obligations to be observed or performed by Tenant
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under the Lease with respect to the Termination Space arising from and after the
Effective Date and as to any obligations set forth in Section 3(c).
(b) As of the Effective Date, Tenant remises, releases,
quitclaims and surrenders to Landlord, its successors and assigns, all of the
estate and rights of Tenant in and to the Termination Space, and Tenant forever
releases and discharges Landlord from any and all obligations to be observed or
performed by Landlord under the Lease with respect to the Termination Space
arising on or after the Effective Date and as to any obligations set forth in
Section 3 (c).
10. Representations and Warranties. Tenant represents and warrants that
(a) Tenant is the rightful owner of all of the Tenant's interest in the Lease;
(b) Tenant has not made any disposition, assignment, sublease or conveyance of
the Lease; (c) Tenant has no knowledge of any claim, demand, obligation,
liability, action or cause of action arising out of or in connection with
Tenant's occupancy of the Premises; (d) no other person or entity has an
interest in the Lease, collateral or otherwise; (e) Tenant has received no
notices of default with respect to Tenant's outstanding contracts for the supply
of labor or material relating to the design or construction of the Termination
Space and Tenant has paid any contractors in full for all work and materials
furnished to the Premises; and (f) as of the date hereof, Tenant is not a debtor
in any filing (whether voluntary or involuntary) under the United States
Bankruptcy Code. Landlord represents and warrants to Tenant that (a) Landlord
does not need the consent of any other person or entity to execute this Second
Amendment; (b) this Second Amendment is a legal, valid and binding obligation
enforceable in accordance with its terms; (c) as of the date hereof the Landlord
is not a debtor in any filing (whether voluntary or involuntary) under the
United States Bankruptcy Code; and (d) the Premises may be lawfully occupied as
"office space".
11. Brokerage. Each of Landlord and Tenant respectively agrees to
indemnify and defend the other against and hold the other harmless from any
claims of brokerage commissions arising out of any discussions or negotiations
had or allegedly had by the other with any other broker or brokers in connection
with this Second Amendment. Tenant shall be responsible for brokerage
commissions, if any, claimed by CB Xxxxxxx Xxxxx on account of this Second
Amendment. The provisions of this Section shall survive the expiration or
earlier termination of the Lease.
12. Ratification of Lease; Force and Effect. Except and as so modified
by this Second Amendment, the terms and conditions of the Lease are hereby
ratified and confirmed and shall remain in full force and effect. Should any
inconsistency arise between this Second Amendment and the Lease as to the
specific matters that are the subject of this Second Amendment, the terms and
conditions of this Second Amendment shall control. This Second Amendment shall
be construed to be a part of the Lease and shall be deemed incorporated in the
Lease by this reference.
13. Waiver. No failure or delay by a party to insist upon the strict
performance of any term, condition or covenant of this Second Amendment, or to
exercise any right, power or remedy hereunder shall constitute a waiver of the
same or any other term of this Second Amendment or preclude such party from
enforcing or exercising the same or any such other term, conditions, covenant,
right, power or remedy at any later time.
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14. Agreement to Perform Necessary Acts. Each party agrees that upon
demand therefor, it shall promptly perform all further acts and execute,
acknowledge and deliver all further instructions, instruments and documents
which may be reasonably necessary or useful to carry out the provisions of this
Second Amendment or to evidence, perfect or otherwise effectuate the rights and
remedies relating to this Second Amendment.
15. Severability. If any provision of this Second Amendment or the
application thereof to any person or circumstances shall be invalid or
unenforceable to any extent, the remainder of this Second Amendment and the
application of such provision to other persons or circumstances, other than
those to which it is held invalid, shall not be affected thereby and shall be
enforced to the furthest extent permitted by law, provided that the invalidity
of such provision does not materially affect the benefits accruing to any party
hereto.
16. Governing Law. This Second Amendment shall be governed by and
construed in accordance with the laws of the State of California.
17. Counterparts. This Second Amendment may be executed in duplicates
or counterparts, or both, and such duplicates or counterparts together shall
constitute but one original of the Agreement. Each duplicate and counterpart
shall be equally admissible in evidence, and each original shall fully bind each
party who has executed it.
18. Attorneys' Fees; Costs of Dispute Resolution. Each party to this
Second Amendment agrees to bear its own attorneys' fees and costs incurred in
connection with the discussions preceding, negotiations for and documentation of
this Second Amendment. In the event any party brings any suit or other
proceeding with respect to the subject matter or enforcement of this Second
Amendment or the Lease as amended by this Second Amendment, the prevailing party
(as determined by the court, agency or other authority before which such suit or
proceeding is commenced) shall, in addition to such other relief as may be
awarded, be entitled to recover attorneys' fees, expenses and costs of
investigation as actually incurred (including without limitation court costs,
expert witness fees, costs and expenses of investigation, and all attorneys'
fees, costs and expenses in any such suit or proceeding, including without
limitation in any action or participation in or in connection with any case or
proceeding under the Bankruptcy Xxxx, 00 Xxxxxx Xxxxxx Code Sections 101, et
seq., or any successor statutes, in establishing or enforcing the right to
indemnification, in appellate proceedings or in connection with the enforcement
or collection of any judgment obtained in any such suit or proceeding).
19. Headings; Recitals; Exhibits. The titles or headings of the various
divisions or Sections hereof are solely for convenience of reference and are not
intended and shall not be deemed to or in any way be used to modify, explain or
place any construction upon any of the provisions of this Second Amendment. The
recitals set forth at the beginning of this Second Amendment are true and
correct and constitute a part of this Second Amendment as if they had been set
forth as covenants herein. Any exhibits hereto which are referred to herein are
a part of this Second Amendment.
20. Entire Agreement; Amendment. The Lease, as amended by this Second
Amendment, constitutes the entire agreement and understanding between the
parties hereto and
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shall supersede all prior and contemporaneous communications, representations,
understandings or agreements, if any, whether oral or written, concerning the
subject matter contained in the Lease as so amended, and no provision of the
Lease as so amended may be modified, amended, waived or discharged, in whole or
in part, except by a written instrument executed by all of the parties hereto.
Each party acknowledges that it has read this Second Amendment, fully
understands all of this Second Amendment's terms and conditions and hereby
executes this Second Amendment freely, voluntarily and with full knowledge of
its significance. This Second Amendment is entered into by the undersigned
parties freely and voluntarily and with and upon advice of counsel.
21. Time of the Essence. Time is expressly of the essence of each
provision of this Second Amendment.
22. Binding Effect; Authority. On the terms and subject to the
conditions hereof, this Second Amendment shall be binding upon and inure to the
benefit of the parties hereto, their respective heirs, legal representatives,
successors and assigns. Each party hereto and the persons signing below warrant
that the person signing below on such party's behalf is authorized to do so and
to bind such party to the terms of this Second Amendment.
23. Amendment of Non-Disturbance and Attornment Agreement. Landlord,
Tenant and Lender are parties to that certain Non-Disturbance and Attornment
Agreement dated as of December 17, 1999 (the "Non-Disturbance Agreement"). The
parties hereby agree that notwithstanding anything to the contrary contained in
the Non-Disturbance Agreement, any Purchaser (as defined in the Non-Disturbance
Agreement) which acquires the interest of Landlord in the Premises shall return
any security deposit delivered by Tenant, including, without limitation, the
Existing Letter of Credit, as and to the extent required in accordance with the
provisions of the Lease as amended by this Second Amendment and provided that
such Purchaser shall have received such security deposit, including, without
limitation, the Existing Letter of Credit.
IN WITNESS WHEREOF, Landlord and Tenant have executed this Second
Amendment on the day and year first above written.
LANDLORD: TENANT:
XXXXX XXXXXXXX PROPERTIES, LLC, ORGANIC, INC.,
a California limited liability company a Delaware corporation
By: /s/ RONALDO X. XXXXXXXXXXX By: /s/ XXXX X. XXXXXXX
-------------------------- ------------------------
Managing Member
Its: Chief Executive Officer
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