FIRST AMENDMENT
Exhibit 10.6
FIRST AMENDMENT
THIS FIRST AMENDMENT (the “Amendment”) is made and entered into as of May 8, 2006, by and between TWO NORTH RIVERSIDE PLAZA JOINT VENTURE LIMITED PARTNERSHIP, an Illinois limited partnership, sole beneficiary of LaSalle National Trust, N.A., successor trustee under Trust Agreement dated June 26, 1969 and known as Trust No. 39712 (“Landlord”) by its agent, EQUITY OFFICE PROPERTIES MANAGEMENT CORP., a Delaware corporation, and REWARDS NETWORK INC., a Delaware corporation (“Tenant”).
RECITALS
| A. | Landlord and Tenant (formerly known as iDine Rewards Network Inc.) are parties to that certain lease dated May 5, 2003 (the “Lease”). Pursuant to the Lease, Landlord has leased to Tenant space currently containing approximately 14,324 rentable square feet (the “Original Premises”) described as Suite No. 950 on the 9th floor of the building commonly known as Two North Riverside Plaza located at Two North Riverside Plaza, Chicago, Illinois (the “Building”). |
| B. | Tenant has requested that additional space containing approximately 10,341 rentable square feet described as Suite No. 235 on the 2nd floor of the Building shown on Exhibit A hereto (the “Expansion Space”) be added to the Original Premises and that the Lease be appropriately amended and Landlord is willing to do the same on the following terms and conditions. |
| C. | The Lease by its terms shall expire on August 31, 2008 (“Prior Termination Date”), and the parties desire to extend the Term of the Lease, all on the following terms and conditions. |
NOW, THEREFORE, in consideration of the above recitals which by this reference are incorporated herein, the mutual covenants and conditions contained herein and other valuable consideration, the receipt and sufficiency of which are hereby acknowledged, Landlord and Tenant agree as follows:
| 1. | Expansion. Effective as of the Expansion Effective Date (defined below), the Premises, as defined in the Lease, is increased from 14,324 rentable square feet on the 9th floor to 24,665 rentable square feet on the 2nd and 9th floors by the addition of the Expansion Space, and from and after the Expansion Effective Date, the Original Premises and the Expansion Space, collectively, shall be deemed the Premises, as defined in the Lease. The Term for the Expansion Space shall commence on the Expansion Effective Date and end on the Extended Termination Date (as defined below). The Expansion Space is subject to all the terms and conditions of the Lease except as expressly modified herein and except that Tenant shall not be entitled to receive any allowances, abatements or other financial concessions granted with respect to the Original Premises unless such concessions are expressly provided for herein with respect to the Expansion Space. |
| 1.01. | The “Expansion Effective Date” shall be the later to occur of (i) August 1, 2006 (“Target Expansion Effective Date”), and (ii) the date upon which the Landlord Work (as defined in the Work Letter attached as Exhibit B hereto) in the Expansion Space has been substantially completed; provided, however, that if Landlord shall be delayed in substantially completing the Landlord Work in the Expansion Space as a result of the occurrence of a Tenant Delay (defined below), then, for purposes of determining the Expansion Effective Date, the date of substantial completion shall be deemed to be the day that said Landlord Work would have been substantially completed absent any such Tenant Delay(s). A “Tenant Delay” means any act or omission of Tenant or its agents, employees, vendors or contractors that actually delays substantial completion of the Landlord Work, including, without limitation, the following: |
| a. | Tenant’s failure to furnish information or approvals within any time period specified in the Lease or this Amendment, including the failure to prepare or approve preliminary or final plans by any applicable due date; |
| b. | Tenant’s selection of equipment or materials that have long lead times after first being informed by Landlord that the selection may result in a delay; |
| c. | Changes requested or made by Tenant to previously approved plans and specifications; |
| d. | The performance of work in the Expansion Space by Tenant or Tenant’s contractor(s) during the performance of the Landlord Work; or |
| e. | If the performance of any portion of the Landlord Work depends on the prior or simultaneous performance of work by Tenant, a delay by Tenant or Tenant’s contractor(s) in the completion of such work. |
The Expansion Space shall be deemed to be substantially completed on the date that Landlord reasonably determines that all Landlord Work has been performed (or would have been performed absent any Tenant Delays), other than any details of construction, mechanical adjustment or any other matter, the noncompletion of which does not materially interfere with Tenant’s use of the Expansion Space. The adjustment of the Expansion Effective Date and, accordingly, the postponement of Tenant’s obligation to pay Rent on the Expansion Space shall be Tenant’s sole remedy and shall constitute full settlement of all claims that Tenant might otherwise have against Landlord by reason of the Expansion Space not being ready for occupancy by Tenant on the Target Expansion Effective Date.
| 1.02. | In addition to the postponement, if any, of the Expansion Effective Date as a result of the applicability of Section 1.01. of this Amendment, the Expansion Effective Date shall be delayed to the extent that Landlord fails to deliver possession of the Expansion Space for any other reason (other than Tenant Delays by Tenant), including but not limited to, holding over by prior occupants. Any such delay in the Expansion Effective Date shall not subject Landlord to any liability for any loss or damage resulting therefrom. If the Expansion Effective Date is delayed, the Extended Termination Date shall not be similarly extended. |
| 2. | Extension. The Term of the Lease is hereby extended for a period of 36 months and shall expire on August 31, 2011 (“Extended Termination Date”), unless sooner terminated in accordance with the terms of the Lease. That portion of the Term commencing the day immediately following the Prior Termination Date (“Extension Date”) and ending on the Extended Termination Date shall be referred to herein as the “Extended Term”. |
| 3. | Base Rent. |
| 3.01. | Original Premises Through Prior Termination Date. The Base Rent, Additional Rent and all other charges under the Lease shall be payable as provided therein with respect to the Original Premises through and including the Prior Termination Date. |
| 3.02. | Original Premises From and After Extension Date. As of the Extension Date, the schedule of Base Rent payable with respect to the Original Premises during the Extended Term is the following: |
| Months of Term or Period | Annual Rate Per Square Foot | Monthly Base Rent | ||||
| 09/01/08 – 08/31/09 | $ | 21.00 | $ | 25,067.00 | ||
| 09/01/09 – 08/31/10 | $ | 21.50 | $ | 25,663.83 | ||
| 09/01/10 – 08/31/11 | $ | 22.00 | $ | 26,260.67 | ||
All such Base Rent shall be payable by Tenant in accordance with the terms of the Lease.
| 3.03. | Expansion Space From Expansion Effective Date Through The Extended Termination Date. As of the Expansion Effective Date, the schedule of Base Rent payable with respect to the Expansion Space is the following: |
| Months of Term or Period | Annual Rate Per Square Foot | Monthly Base Rent | ||||
| 08/01/06 – 07/31/07 | $ | 16.25 | $ | 14,003.44 | ||
| 08/01/07 – 07/31/08 | $ | 16.75 | $ | 14,434.31 | ||
| 08/01/08 – 07/31/09 | $ | 17.25 | $ | 14,865.19 | ||
| 08/01/09 – 07/31/10 | $ | 17.75 | $ | 15,296.06 | ||
| 0801/10 – 07/31/11 | $ | 18.25 | $ | 15,726.94 | ||
| 08/01/11 – 08/31/11 | $ | 18.75 | $ | 16,157.81 | ||
All such Base Rent shall be payable by Tenant in accordance with the terms of the Lease.
Landlord and Tenant acknowledge that the foregoing schedule is based on the assumption that the Expansion Effective Date is the Target Expansion Effective Date. If the Expansion Effective Date is other than the Target Expansion Effective Date, the schedule set forth above with respect to the payment of any installment(s) of Base Rent for the Expansion Space shall be appropriately adjusted on a per diem basis to reflect the actual Expansion Effective Date, and the actual Expansion Effective Date shall be set forth in a confirmation letter to be prepared by Landlord. However, the effective date of any increases or decreases in the Base Rent rate shall not be postponed as a result of an adjustment of the Expansion Effective Date as provided above.
| 4. | Security Deposit. Waived. |
| 5. | Tenant’s Pro Rata Share. For the period commencing with the Expansion Effective Date and ending on the Extended Termination Date, Tenant’s Pro Rata Share for the Expansion Space is 2.0160%. |
| 6. | Expenses and Taxes. |
| 6.01. | Original Premises for the Extended Term. For the period commencing with the Extension Date and ending on the Extended Termination Date, Tenant shall pay for Tenant’s Pro Rata Share of Expenses and Taxes applicable to the Original Premises in accordance with the terms of the Lease. |
| 6.02. | Expansion Space From Expansion Effective Date Through The Extended Termination Date. For the period commencing with the Expansion Effective Date and ending on the Extended Termination Date, Tenant shall pay for Tenant’s Pro Rata Share of Expenses and Taxes applicable to the Expansion Space in accordance with the terms of the Lease, provided, however, during such period, the Base Year for the computation of Tenant’s Pro Rata Share of Expenses and Taxes applicable to the Expansion Space is 2006. Tenant shall pay Tenant’s Pro Rata Share of Expenses applicable to the Expansion Space only for the amount, if any, by which Expenses for each calendar year during the Extended Term exceed Expenses for the Expansion Space Base Year; and also the amount, if any, by which Taxes for each calendar year during the Extended Term exceed Taxes for the Expansion Space Base Year. |
| 7. | Improvements to Expansion Space. |
| 7.01. | Condition of Expansion Space. Tenant has inspected the Expansion Space and agrees to accept the same “as is” without any agreements, representations, understandings or obligations on the part of Landlord to perform any alterations, repairs or improvements, except as may be expressly provided otherwise in this Amendment. |
| 7.02. | Responsibility for Improvements to Expansion Space. Landlord shall perform improvements to the Expansion Space in accordance with the Work Letter attached hereto as Exhibit B. |
| 8. | Early Access to Expansion Space. If Tenant is permitted to take possession of the Expansion Space before the Expansion Effective Date, such possession shall be subject to the terms and conditions of the Lease and this Amendment and Tenant shall pay Base Rent and Additional Rent applicable to the Expansion Space to Landlord for each day of possession prior to the Expansion Effective Date. However, except for the cost of services requested by Tenant (e.g. freight elevator usage), Tenant shall not be required to pay Rent for the Expansion Space for any days of possession before the Expansion Effective Date during which Tenant, with the approval of Landlord, is in possession of the Expansion Space for the sole purpose of performing improvements or installing furniture, equipment or other personal property. |
| 9. | Miscellaneous. |
| 9.01. | This Amendment and the attached exhibits, which are hereby incorporated into and made a part of this Amendment, set forth the entire agreement between the parties with respect to the matters set forth herein. There have been no additional oral or written representations or agreements. Under no circumstances shall Tenant be entitled to any Rent abatement, improvement allowance, leasehold improvements, or other work to the Premises, or any similar economic incentives that may have been provided Tenant in connection with entering into the Lease, unless specifically set forth in this Amendment. |
| 9.02. | Except as herein modified or amended, the provisions, conditions and terms of the Lease shall remain unchanged and in full force and effect. |
| 9.03. | In the case of any inconsistency between the provisions of the Lease and this Amendment, the provisions of this Amendment shall govern and control. |
| 9.04. | Submission of this Amendment by Landlord is not an offer to enter into this Amendment but rather is a solicitation for such an offer by Tenant. Landlord shall not be bound by this Amendment until Landlord has executed and delivered the same to Tenant. |
| 9.05. | The capitalized terms used in this Amendment shall have the same definitions as set forth in the Lease to the extent that such capitalized terms are defined therein and not redefined in this Amendment. |
| 9.06. | Tenant hereby represents to Landlord that Tenant has dealt with no broker in connection with this Amendment. Tenant agrees to indemnify and hold Landlord, its trustees, members, principals, beneficiaries, partners, officers, directors, employees, mortgagee(s) and agents, and the respective principals and members of any such agents (collectively, the “Landlord Related Parties”) harmless from all claims of any brokers claiming to have represented Tenant in connection with this Amendment. Landlord hereby represents to Tenant that Landlord has dealt with no broker in connection with this Amendment. Landlord agrees to indemnify and hold Tenant, its trustees, members, principals, beneficiaries, partners, officers, directors, employees, and agents, and the respective principals and members of any such agents (collectively, the “Tenant Related Parties”) harmless from all claims of any brokers claiming to have represented Landlord in connection with this Amendment. |
| 9.07. | Each signatory of this Amendment represents hereby that he or she has the authority to execute and deliver the same on behalf of the party hereto for which such signatory is acting. |
[SIGNATURES ARE ON FOLLOWING PAGE]
IN WITNESS WHEREOF, Landlord and Tenant have duly executed this First Amendment as of the day and year first above written.
| LANDLORD: TWONORTH RIVERSIDE PLAZA JOINT VENTURE LIMITED PARTNERSHIP, an Illinois limited partnership, sole beneficiary of LaSalle National Trust, N.A., successor trustee under Trust Agreement dated June 26, 1969 and known as Trust No. 39712 | ||||||
| By: | Equity Office Properties Management Corp., a Delaware corporation, as agent | |||||
| By: | /s/ CJ Dempsey | |||||
| Name: | CJ Dempsey | |||||
| Title: | Asst. Vice President | |||||
| TENANT: REWARDS NETWORKINC., a Delaware corporation | ||||||
| By: | /s/ Christopher J. Locke | |||||
| Name: | Christopher J. Locke | |||||
| Title: | Senior Vice President and Chief Financial Officer | |||||
