Organic Sells Stock to Seneca

SAN FRANCISCO–Organic, one of the last remaining i-shops in the Bay area, said yesterday that the majority of its common stock has been sold to Seneca Investments. The finalization of this deal comes more than two months after Organic Holdings, the previous majority shareholder, said it would be selling off its stock. Seneca, a holding company established by Omnicom earlier this year, will now hold 80.9 percent of Organic’s outstanding shares.According to a statement issued by Organic, changes to the original purchase agreement included a reduction in the cash down-payments payable at the closing in respect of the earn-out from $16.2 million ($0.3080 per share) to $8.5 million ($0.1636 per share); a provision that the majority of Organic Holdings’ representations and warranties related to Organic would terminate at closing; and limitation of Organic Holdings’ rights in respect to actions taken during the earn-out period.In addition, Organic said that it has restructured the lease for its San Francisco headquarters, which expires in 2010. The interactive agency has agreed to make payments totaling approximately $11.7 million to the landlord in exchange for the reversion to the landlord of approximately 140,000 square feet of space and reductions in rent on the remaining space. Omnicom covered $10 million of the payment, under its existing credit agreement with Organic.