SECOND AMENDMENT
EXHIBIT
10.22
SECOND
AMENDMENT
AGREEMENT,
made this 3rd
day of
February, 2006, entered into between GLORIOUS SUN XXXXXX XXXXXX, L.L.C., New
York limited liability company, having an office at c/o Xxxx-Xxxx Realty
Corporation, 000 Xxxxxxxxxx Xxxx, Xxxxxxxx, Xxx Xxxx 00000 (herein referred
to
as "Landlord"), and TRAFFIX, INC. (formerly known as Xxxxxxx Communications,
Inc., which was formerly known as Xxxxxxx Entertainment, Inc.), a Delaware
corporation, having its principal place of business at Xxx Xxxx Xxxx Xxxxx,
Xxxxx Xxxxx, Xxx Xxxx 00000.
WITNESSETH:
WHEREAS,
Landlord and Tenant entered into a written lease agreement dated May 16, 1996,
as amended by First Amendment dated July 27, 2000 (herein collectively referred
to as the "Lease") wherein and whereby Landlord currently leases to Tenant
and
Tenant currently hires from Landlord approximately 14,220 rentable square feet
in the building known as One Blue Hill Plaza, Pearl River, New York for a term
which currently expires on July 31, 2006, and
WHEREAS,
the parties hereto desire to amend and extend the term of said Lease pursuant
to
the terms and provisions set forth below;
NOW,
THEREFORE, in consideration of the mutual covenants herein contained and other
good and valuable consideration, each to the other in hand paid, IT IS AGREED
as
follows:
1. The
Lease
is hereby extended for a period of five (5) years three and one-half (3.5)
months commencing August 1, 2006 and expiring on November 15, 2011 (“Renewal
Term”).
2. During
the Renewal Term, the following shall be effective:
a) the
fixed
rent set forth in Section 3.01(a) of the Lease (which includes Electric Rent
pursuant to Article 21 of the Lease) shall be as follows:
|
Period
|
Annual
Rent
|
Monthly
Rent
|
Annual
Per Sq. Ft. Rent
|
|
8/1/06
- 11/15/11
|
$305,730.00
|
$25,477.50
|
$21.50
|
Notwithstanding
anything herein to the contrary, provided Tenant is not in default under the
Lease, Tenant shall have no obligation to pay fixed rent for the three and
one-half (3.5) month period commencing on August 1, 2006 and expiring on
November 14, 2006 and Tenant’s obligation to pay fixed rent for the Renewal Term
shall commence on November 15, 2006.
b) The
definition of Base Tax set forth in the first sentence of Section 4.01(b) of
the
Lease shall be deleted in its entirety and the following shall be substituted
in
its place:
“(b)‘Base
Tax’ shall mean a sum determined by applying the tax rates set forth on tax
bills rendered by the taxing authorities for the fiscal tax year 2006/2007
for
fiscal year taxes and the calendar year 2006 for calendar year taxes of each
such taxing authority to the assessed valuations (after any reduction in said
assessment as a result of any tax abatement or other tax relief of any nature
whatsoever) of the Real Property for the fiscal tax year 2006/2007 for fiscal
year taxes and the calendar year 2006 for calendar year taxes.”
c) The
definition of Base Operating Expenses set forth in the first sentence of Section
4.01(d) of the Lease shall be deleted in its entirety and the following shall
be
substituted in its place:
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“(d)
‘Base Operating Expenses’ shall mean Operating Expenses for the 2006 calendar
year (“Base Expense Year”).”
d) Section
16.01(a) of the Lease is amended by deleting “ten (10) spaces for executive
cars” and inserting “fourteen (14) spaces for executive cars” in its place, and
by deleting “sixty (60) spaces for employee cars” and inserting fifty-six (56)
spaces for employee cars” in its place.
e) Article
17 (Tenant’s Changes) of the Lease is hereby amended as follows: (i) by deleting
the reference to “$50,000.00” in Section 17.01(f) and substituting “$100,000.00”
in its place; and (ii) by deleting the reference to “$100,000.00” in Section
17.03 and substituting “$200,000.00” in its place.
3. Landlord
hereby leases to Tenant and Tenant hereby hires from Landlord the Demised
Premises in its "AS-IS" condition for the Renewal Term, under the terms and
conditions set forth herein. Landlord
represents that to the best of Landlord’s knowledge, that (i) the Building
complies with all codes including, fire, the Americans with Disabilities Act,
life, safety, environmental and OSHA and (ii) there are no asbestos, PCB’s and
other hazardous materials in the Building in violation of environmental laws.
Landlord shall comply with and cause the Building to comply with all laws and
requirements of public authorities including environmental laws and all codes
including, fire, the Americans with Disabilities Act, life, safety,
environmental and OSHA.
4. A
new
Article 48 (Option to Renew) of the Lease shall be added to the Lease as
follows:
“48.01. Option
to Renew.
(a)
If
the term of this lease shall then be in full force and effect and Tenant has
complied fully with its obligations hereunder, Tenant shall have the option
to
extend the term of this lease for a period of either (i) three (3) years or
(ii)
five (5) years (the "Extension Term") commencing on the day immediately
following the Expiration Date, provided however that Tenant shall give Landlord
notice of its election to extend the term, which notice shall state whether
Tenant has elected to extend the term for 3 years or 5 years, and which notice
shall be given no earlier than fifteen (15) months prior to the Expiration
Date
nor later than twelve (12) months prior to the Expiration Date of the term.
Time
shall be of the essence
in
connection with the exercise of Tenant's option pursuant to this
Article.
(b)
Such
extension of the term of this lease shall be upon the same covenants and
conditions, as herein set forth except for the fixed rent (which shall be
determined in the manner set forth below), and except that Tenant shall have
no
further right to extend the term of this lease after the exercise of the single
option described in paragraph (a) of this Section. If Tenant shall duly give
notice of its election to extend the term of this lease, the Extension Term
shall be added to and become a part of the term of this lease (but shall not
be
considered a part of the initial term), and any reference in this lease to
the
"term of this lease", the "term hereof", or any similar expression shall be
deemed to include such Extension Term, and, in addition, the term "Expiration
Date" shall thereafter mean the last day of such Extension Term. Landlord shall
have no obligation to perform any alteration or preparatory or other work in
and
to the Demised Premises or to make any contribution toward the cost thereof
and
Tenant shall continue possession thereof in its "as is" condition.
(c)
If
Tenant exercises its option for the Extension Term, the fixed rent during the
Extension Term shall be the fair market rent for the Demised Premises, as
hereinafter defined.
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(d)
Landlord and Tenant shall use their best efforts, within 30 days after Landlord
receives Tenant's notice of its election to extend the term of this lease for
the Extension Term ("Negotiation Period"), to agree upon the fixed rent to
be
paid by Tenant during the Extension Term. If Landlord and Tenant shall agree
upon the fixed rent for the Extension Term, the parties shall promptly execute
an amendment to this lease stating the fixed rent for the Extension
Term.
(e)
If
the parties are unable to agree on the fixed rent for the Extension Term during
the Negotiation Period, then within 15 days after notice from the other party,
given after expiration of the Negotiation Period, each party, at its cost and
upon notice to the other party, shall appoint a person to act as an appraiser
hereunder, to determine the fair market rent for the Demised Premises for the
Extension Term. Each such person shall be a real estate broker or appraiser
with
at least ten years' active commercial real estate appraisal or brokerage
experience (involving the leasing of office space as agent for both landlords
and tenants) in Rockland County. If a party does not appoint a person to act
as
an appraiser within said 15 day period, the person appointed by the other party
shall be the sole appraiser and shall determine the aforesaid fair market rent.
Each notice containing the name of a person to act as appraiser shall contain
also the person's address. Before proceeding to establish the fair market rent,
the appraisers shall subscribe and swear to an oath fairly and impartially
to
determine such rent.
If
the
two appraisers are appointed by the parties as stated in the immediately
preceding paragraph, they shall meet promptly and attempt to determine the
fair
market rent. If they are unable to agree within 45 days after the appointment
of
the second appraiser, they shall attempt to select a third person meeting the
qualifications stated in the immediately preceding paragraph within 15 days
after the last day the two appraisers are given to determine the fair market
rent. If they are unable to agree on the third person to act as appraiser within
said 15 day period, the third person shall be appointed by the American
Arbitration Association, upon the application of Landlord or Tenant to the
office of the Association nearest the Building. The person appointed to act
as
appraiser by the Association shall be required to meet the qualifications stated
in the immediately preceding paragraph. Each of the parties shall bear 50%
of
the cost of appointing the third person and of paying the third person's fees.
The third person, however selected, shall be required to take an oath similar
to
that described above.
The
three
appraisers shall meet and determine the fair market rent. A decision in which
two of the three appraisers concur shall be binding and conclusive upon the
parties. In deciding the dispute, the appraisers shall act in accordance with
the American Arbitration Rules for the Real Estate Industry then in force of
the
American Arbitration Association, subject however, to such limitations as may
be
placed on them by the provisions of this lease.
Notwithstanding
the foregoing, in no event shall the fixed rent during the Extension Term be
less than the fixed rent during the last year of the term of this lease
immediately prior to the Extension Term.
(f)
After
the fair market rent for the Extension Term has been determined by the appraiser
or appraisers and the appraiser or appraisers shall have notified the parties,
at the request of either party, both parties shall execute and deliver to each
other an amendment of this lease stating the fixed rent for the Extension
Term.
(g)
If
the fixed rent for the Extension Term has not been agreed to or established
prior to the commencement of the Extension Term, then Tenant shall pay to
Landlord an annual rent ("Temporary Rent") which Temporary Rent shall be equal
to 150% of the fixed rent payable by Tenant for the last year of the term
immediately preceding the Extension Term. Thereafter, if the parties shall
agree
upon a fixed rent, or the fixed rent shall be established upon the determination
of the fair market rent by the appraiser or appraisers, at a rate at variance
with the Temporary Rent (i) if such fixed rent is greater than the Temporary
Rent, Tenant shall promptly pay to Landlord the difference between the fixed
rent determined by agreement or the appraisal process and the Temporary Rent,
or
(ii) if such fixed rent is less than the Temporary Rent, Landlord shall credit
to Tenant's subsequent monthly installments of fixed rent the difference between
the Temporary Rent and the fixed rent determined by agreement or the appraisal
process.
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(h)
In
describing the fair market rent during the Extension Term, the appraiser or
appraisers shall be required to take into account that the Demised Premises
are
being leased in its then as-is condition without any further improvements and
taking into consideration the rentals at which leases are then being concluded
(as of the last day of the term) (for 3 or 5 year leases, as the case may be,
without renewal options with the lessor and lessee each acting prudently, with
knowledge and for self-interest, and assuming that neither is under undue
duress) for comparable space in the Building and in comparable office buildings
in the Town of Orangetown.
(i) The
option granted to Tenant under this Article 48 may be exercised only by Tenant,
its affiliates, permitted successors and assigns, and not by any subtenant
or
any successor to the interest of Tenant by reason of any action under the
Bankruptcy Code, or by any public officer, custodian, receiver, United States
Trustee, trustee or liquidator of Tenant or substantially all of Tenant's
property. Tenant shall have no right to exercise this option subsequent to
the
date Landlord shall have the right to give the notice of termination referred
to
in Article 32 unless Tenant cures the default within the applicable grace
period. Notwithstanding the foregoing, Tenant shall have no right to extend
the
term if, at the time it gives notice of its election (i) Tenant shall not be
in
occupancy of substantially all of the Demised Premises or (ii) the Demised
Premises or any part thereof shall be the subject of a sublease. If Tenant
shall
have elected to extend the term, such election shall be deemed withdrawn if,
at
any time after the giving of notice of such election and prior to the
commencement of the Extension Term, Tenant shall sublease all or any portion
of
the Demised Premises.”
5. A
new
Article 49 (Option for Additional Space) shall be added to the Lease as
follows:
“49.01 Option
for Additional Space.
A.
(i)
Subject to the provisions of this Article, Tenant shall have the option to
lease
from Landlord the balance of the space on the fifth (5th
) floor
of the Building ("Additional Space") at
the
expiration of the existing space leases for such Additional Space which is
currently leased and at the expiration of the initial space leases for such
Additional Space which is currently vacant, subject in either event, to
Landlord’s right to renew such leases, the existing rights of existing tenants
and the requirements of tenants leasing more than 14,220 rentable square feet.
If the term of this lease shall be in full force and effect on the expiration
or
termination date of the existing space leases for such Additional Space which
is
currently leased and at the expiration of the initial space leases for such
Additional Space which is currently vacant, subject to Landlord’s right to renew
such leases, the existing rights of existing tenants and the requirements of
larger tenants, and the date upon which Tenant shall exercise the option
hereinafter referred to, Tenant shall have the option to lease all, but not
less
than all of the Additional Space on an as-is basis, provided Tenant gives
Landlord written notice of such election within 10 business days after Tenant
shall receive Landlord's notice that such Additional Space is available for
leasing to Tenant. If Tenant fails or refuses to exercise this option within
the
time period set forth above (time
being of the essence),
then
and in such event Tenant shall have no further rights under this Section with
respect to such Additional Space. If Tenant shall elect to lease all or any
portion of the Additional Space (a) the Additional Space shall be deemed
incorporated within and part of the Demised Premises on the date Landlord shall
notify Tenant that such Additional Space is ready for occupancy by Tenant,
(b)
the fixed rent payable pursuant to Section 3.01 shall be increased by an amount
such that during the balance of the term of this lease the fixed rent for each
square foot of Rentable Area in the Additional Space shall be at the then fair
market rent which sum shall be determined in the manner set forth in Section
(ii), plus Electric Rent pursuant to Article 21, (c) Tenant's Proportionate
Share shall be proportionately increased, (d) the number of parking spaces
available to Tenant pursuant to Article 16 shall be increased by three
(3) spaces
per 1,000 square feet of Rentable Area in the Additional Space, and (e) all
the
other terms and provisions set forth in this lease shall apply, except that
Landlord shall not be required to perform any work with respect to the
Additional Space or make any contribution toward the cost thereof. The parties
shall promptly execute an amendment of this lease confirming Tenant's election
to lease said Additional Space and the incorporation of said Additional Space
into the Demised Premises.
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(ii) Landlord
and Tenant shall use their best efforts, within 30 days after Landlord receives
Tenant's notice of its election to lease said Additional Space, ("Negotiation
Period") to agree upon the fixed rent to be paid by Tenant for said Additional
Space. If Landlord and Tenant shall agree upon the fixed rent, the parties
shall
promptly execute an amendment to this lease stating the fixed rent for the
Additional Space.
If
the
parties are unable to agree on the fixed rent for said Additional Space during
the Negotiation Period, then within 15 days notice from the other party, given
after expiration of the Negotiation Period, each party, at its cost and upon
notice to the other party, shall appoint a person to act as an appraiser
hereunder, to determine the fair market rent for the Additional Space. Each
such
person shall be a real estate broker or appraiser with at least ten years'
active commercial real estate appraisal or brokerage experience (involving
the
leasing of similar space as agent for both landlords and tenants) in Rockland
County. If a party does not appoint a person to act as an appraiser within
said
15 day period, the person appointed by the other party shall be the sole
appraiser and shall determine the aforesaid fair market rent. Each notice
containing the name of a person to act as appraiser shall contain the person's
address. Before proceeding to establish the fair market rent, the appraisers
shall subscribe and swear to an oath fairly and impartially to determine such
rent.
If
the
two appraisers are appointed by the parties as stated in the immediately
preceding paragraph, they shall meet promptly and attempt to determine the
fair
market rent. If they are unable to agree within 45 days after the appointment
of
the second appraiser, they shall attempt to select a third person meeting the
qualifications stated in the immediately preceding paragraph within 15 days
after the last day the two appraisers are given to determine the fair market
rent. If they are unable to agree on the third person to act as appraiser within
said 15 day period, the third person shall be appointed by the American
Arbitration Association, upon the application of Landlord or Tenant to the
office of the Association nearest the Building. The person appointed to act
as
appraiser by the Association shall be required to meet the qualifications stated
in the immediately preceding paragraph. Each of the parties shall bear 50%
of
the cost of appointing the third person and of paying the third person's fees.
The third person, however selected, shall be required to take an oath similar
to
that described above.
-5-
The
three
appraisers shall meet and determine the fair market rent. A decision in which
two of the three appraisers concur shall be binding and conclusive upon the
parties. In deciding the dispute, the appraisers shall act in accordance with
the American
Arbitration Rules for the Real Estate Industry
then in
force of the American Arbitration Association, subject however, to such
limitations as may be placed on them by the provisions of this
lease.
After
the
fixed rent for the Additional Space has been determined by the appraiser or
appraisers and the appraiser or appraisers shall have notified the parties,
at
the request of either party, both parties shall execute and deliver to each
other an amendment of this lease stating the fixed rent for the Additional
Space.
If
the
fixed rent for said Additional Space has not been agreed to or established
prior
to the incorporation of said Additional Space in the demised premises, then
Tenant shall pay to Landlord an annual rent ("Temporary Rent") which Temporary
Rent on a per square foot basis shall be equal to the Fixed rent, on a per
square foot basis, then being paid by Tenant for the Demised
Premises.
Thereafter,
if the parties shall agree upon a fixed rent, or the Fixed rent shall be
established upon the determination of the fair market rent by the appraiser
or
appraisers, at a rate at variance with the Temporary Rent (i) if such Fixed
rent
is greater than the Temporary Rent, Tenant shall promptly pay to Landlord the
difference between the Fixed rent determined by agreement or the appraisal
process and the Temporary Rent, or (ii) if such fixed rent is less than the
Temporary Rent, Landlord shall credit to Tenant's subsequent monthly
installments of fixed rent the difference between the Temporary Rent and the
fixed rent determined by agreement or the appraisal process.
In
determining the fair market rent for said Additional Space, the appraiser or
appraisers shall be required to take into account the rentals at which leases
are then being concluded for comparable space in the Building and in comparable
buildings in the County of Rockland, New York. In no event shall the fixed
rent
for the Additional Space, on a per square foot basis, be less than the fixed
rent for the Demised Premises, on a per square foot basis.
B.
The
option granted to Tenant under this Article 49 may be exercised only by Tenant,
its permitted successors and assigns, and not by any subtenant or any successor
to the interest of Tenant by reason of any action under the Bankruptcy Code,
or
by any public officer, custodian, receiver, United States Trustee, trustee
or
liquidator of Tenant or substantially all of Tenant's property. Tenant shall
have no right to exercise any of such options subsequent to the date Landlord
shall have the right to give the notice of termination referred to in Article
32. Notwithstanding the foregoing, Tenant shall have no right to exercise the
option granted to Tenant hereunder if, at the time it gives notice of such
election (i) Tenant shall not be in occupancy of substantially all of the
Demised Premises or (ii) the Demised Premises or any part thereof shall be
the
subject of a sublease. If Tenant shall have elected to exercise its option
hereunder, such election shall be deemed withdrawn if, at any time after the
giving of notice of such election and prior to the occupancy of the Additional
Space, Tenant shall sublease all or any part of the Demised
Premises.”
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6. Tenant
agrees not to disclose the terms, covenants, conditions or other facts with
respect to the Lease, including, but not limited to, the fixed rent, to any
person, corporation, partnership, association, newspaper, periodical or other
entity except pursuant to a valid business purpose or as required by law,
subpoena or other legal process or disclosure requirements applicable to a
public company. This non-disclosure and confidentiality agreement shall be
binding upon Tenant without limitation as to time, and a breach of this
paragraph shall constitute a material breach under the Lease.
7. Tenant
represents that it has dealt with no broker in connection with this Second
Amendment except Xxxxx & Xxxxx New York, Inc. and Xxxx-Xxxx Realty, L.P.
and
Tenant agrees to indemnify and hold Landlord harmless from any and all claims
arising out of a breach of such representation and based thereupon, Landlord
agrees to pay any commission due to Xxxxx
& Xxxxx New York, Inc. and Xxxx-Xxxx Realty, L.P. pursuant to separate
agreement with said brokers.
8. Tenant
hereby
represents to Landlord that to its knowledge (i) there exists no default under
the Lease either by Tenant or Landlord; (ii) Tenant is entitled to no credit,
free rent or other offset or abatement of the rents due under the Lease; and
(iii) there exists no offset, defense or counterclaim to Tenant’s obligation
under the Lease. Landlord represents to that to its knowledge there exists
no
default by Tenant under the Lease.
9. Except
as
otherwise set forth herein, all the other terms and provisions contained in
the
Lease shall remain in full force and effect.
10. It
is
understood and agreed that this Second
Amendment is submitted to the Tenant for signature with the understanding that
it shall not bind the Landlord unless and until it has been executed by the
Landlord and delivered to the Tenant or Tenant's attorney.
11. The
Lease, as hereby amended, shall be binding upon the parties hereto, their
successors and assigns.
IN
WITNESS WHEREOF, the parties hereto have hereunto set their hands and seals
the
day and year first above written.
| GLORIOUS SUN XXXXXX XXXXXX, L.L.C. | ||
| By: | RM Blue Hill, LLC, member | |
| |
|
|
| By: | /s/ | |
|
Vice President |
||
| TRAFFIX, INC. | ||
| |
|
|
| By: | /s/ | |
|
Name: Xxxxxxx X. Xxxxxxxx |
||
| Title: CEO | ||
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