Minnesota-Minneapolis-225 South Sixth Street Memorandum of Lease - 601 Second Avenue LP and Capella Education Co.
MEMORANDUM OF LEASE
THIS MEMORANDUM OF LEASE, dated as of March 10, 2004 (the "EFFECTIVE
DATE") is between 601 Second Avenue Limited Partnership, a Texas limited
partnership ("LANDLORD") and Capella Education Company, a Minnesota corporation
("TENANT").
RECITALS
A. Landlord, as landlord, and Tenant, as tenant, have entered into
that certain Office Lease dated as of February 23, 2004 (the "LEASE"), relating
to certain real property (the "PROJECT") located at 225 South Sixth Street,
Minneapolis, Minnesota, and legally described on Exhibit A attached hereto. The
Project consists, in part, of an eighteen (18) story building (the "BUILDING")
and a fifty-three (53) story office tower (the "TOWER").
B. Landlord and Tenant now wish to memorialize of record the
existence of the Lease and certain specific terms of the same.
C. All terms defined in the Lease shall have the same meanings when
used herein as when used in the Lease.
NOW, THEREFORE, in consideration of the Lease and other good and
valuable consideration, Landlord and Tenant agree as follows:
1. Landlord hereby demises and leases to Tenant, and Tenant hereby
takes and leases from Landlord, the Initial Premises upon the terms and
conditions more particularly set forth in the Lease. The Initial Premises means
the (a) 119,711 square feet of Rentable Area on the 8th and 9th floors of the
Building and the 8th, 9th and 15th floors of the Tower, (b) 30,335 square feet
of Rentable Area on the 7th floor of the Building, and (c) 53,275 square feet of
Rentable Area on the 6th and 7th floors of the Tower, all as depicted on the
floor plans which are attached hereto as Exhibit B.
<PAGE>
2. The Term of the Lease shall be a term of six (6) years,
commencing on November 1, 2004, and terminating on October 31, 2010, (subject to
the provisions of the Lease), and contains two Extension Options permitting
extension of the Term to October 31, 2020.
3. Reference is made to the Lease for a full statement of the terms
and conditions of the Lease, all of which are hereby incorporated by reference.
4. Nothing in this Memorandum of Lease shall be construed to amend,
modify, change, alter, amplify, interpret or supersede any of the terms and
provisions of the Lease, which shall in all things control.
IN WITNESS WHEREOF, Landlord and Tenant have executed and delivered
this Memorandum of Lease as of the Effective Date.
[SIGNATURE PAGES FOLLOW]
-2-
<PAGE>
EXHIBIT 10.24
SIGNATURE PAGE
FOR
MEMORANDUM OF LEASE
BETWEEN
601 SECOND AVENUE LIMITED PARTNERSHIP
AND
CAPELLA EDUCATION COMPANY
LANDLORD:
601 SECOND AVENUE LIMITED PARTNERSHIP,
a Texas limited partnership
By: Minneapolis 601 Limited Partnership, a Texas
limited partnership, its sole general partner
By: Hines Acquisitions No. 2 Limited
Partnership, a Texas limited partnership, its
sole general partner
By: Hines Interests Limited Partnership,
a Delaware limited partnership, its
sole general partner
By: Hines Holdings, Inc., a Texas
close corporation, its sole
general partner
By: /s/ C. Kevin Shannahan
----------------------
Name: C. Kevin Shannahan
Title: Executive Vice
President
<PAGE>
STATE OF ILLINOIS )
) ss.
COUNTY OF COOK )
The foregoing instrument was acknowledged before me this 19th day of
March, 2004, by C. Kevin Shannahan, the Executive Vice President of Hines
Holdings, Inc., a Texas close corporation and sole general partner of Hines
Interests Limited Partnership, a Delaware limited partnership and sole general
partner of Hines Acquisitions No. 2 Limited Partnership, a Texas limited
partnership and sole general partner of Minneapolis 601 Limited Partnership, a
Texas limited partnership and sole general partner of 601 Second Avenue Limited
Partnership, a Texas limited partnership, on behalf of the limited partnership.
/s/ Madeline Greenlee
------------------------
Notary Public
<PAGE>
EXHIBIT 10.24
SIGNATURE PAGE
FOR
MEMORANDUM OF LEASE
BETWEEN
601 SECOND AVENUE LIMITED PARTNERSHIP
AND
CAPELLA EDUCATION COMPANY
TENANT:
CAPELLA EDUCATION COMPANY
a Minnesota corporation
By: /s/ Joe Gaylord
---------------------------
Name: Joe Gaylord
Title: CFO
STATE OF MINNESOTA )
) ss.
COUNTY OF HENNEPIN )
The foregoing instrument was acknowledged before me this 20th day of
February, 2004, by Joe Gaylord, the CFO of Capella Education Company, a
Minnesota corporation, on behalf of the corporation.
/s/ Sharyl J. Thompson
------------------------
Notary Public
After recording, please return to:
Faegre & Benson LLP (WLU)
2200 Wells Fargo Center
90 South Seventh Street
Minneapolis, MN 55402-3026
<PAGE>
EXHIBIT 10.24
EXHIBIT A
LEGAL DESCRIPTION
Lot 6, Block 219, Town of Minneapolis, according to the plat thereof on file or
of record in the office of the Register of Deeds in and for Hennepin County.
The Northeasterly 7 feet of Lots 1, 2, and 3; the Northeasterly 7 feet of the
Northwesterly half of Lot 4; the Southeasterly half of Lot 4; and Lots 5, 6, 7,
8, 9 and 10;
all in Block 219, Brown and Jackins' Addition to Minneapolis, according to the
plat thereof on file or of record in the office of the Register of Deeds in and
for Hennepin County.
A-1
<PAGE>
EXHIBIT 10.24
RECORDING REQUESTED BY
----------------------
WHEN RECORDED MAIL TO
The Northwestern Mutual Life Ins. Co.
720 East Wisconsin Ave. - Rm N16WC
Milwaukee, WI 53202
Attn: Kathleen A. Evanson
Loan No. C-331830 SPACE ABOVE THIS LINE FOR RECORDER'S USE
NON-DISTURBANCE AND ATTORNMENT AGREEMENT
THIS AGREEMENT is entered into as of March 10 , 2004, between CAPELLA
EDUCATION COMPANY, a Minnesota corporation, whose mailing address is 225 South
Sixth Street, Minneapolis, MN 55402, ("Tenant"),601 SECOND AVENUE LIMITED
PARTNERSHIP, a Texas limited partnership, whose mailing address is 225 S. 6th
St., #2590, Minneapolis, MN 55402, ("Borrower"), and THE NORTHWESTERN MUTUAL
LIFE INSURANCE COMPANY, a Wisconsin corporation ("Lender"), whose address for
notices is 720 East Wisconsin Avenue, Milwaukee, WI 53202, Attention: Real
Estate Investment Department, Reference Loan No.C-331830.
RECITALS
A. Tenant is the lessee and Borrower is the lessor under a certain lease
dated February 23, 2004 (the "Lease").
B. Lender has made a mortgage loan secured by a mortgage, deed to secure a
debt or deed of trust from Borrower for the benefit of Lender recorded as
Document No. 2631800 in Volume 2773, Page 827519 (as it may be amended, restated
or otherwise modified from time to time, the "Lien Instrument") encumbering the
fee title to and/or leasehold interest in the land described in Exhibit A
attached hereto and the improvements thereon (collectively, the "Property"),
wherein the premises covered by the Lease (the "Demised Premises") are located.
C. Borrower and Lender have executed an Absolute Assignment of Leases and
Rents (the "Absolute Assignment"), pursuant to which (i) the Lease is assigned
to Lender and (ii) Lender grants a license back to Borrower permitting Borrower
to collect all rents, income and other sums payable under the Lease until the
revocation by Lender of such license, at which time all rents, income and other
sums payable under the Lease are to be paid to Lender.
B-1
<PAGE>
D. Lender has required the execution of this Agreement by Borrower and
Tenant as a condition to Lender making the requested mortgage loan or consenting
to the Lease and Tenant has required the execution of this Agreement by Lender
and Borrower as a condition to Tenant entering into the Lease.
E. Tenant acknowledges that, as its consideration for entering into this
Agreement, Tenant will benefit by entering into an agreement with Lender
concerning Tenant's relationship with any purchaser or transferee of the
Property (including Lender) in the event of foreclosure of the Lien Instrument
or a transfer of the Property by deed in lieu of foreclosure (any such purchaser
or transferee and each of their respective successors or assigns is hereinafter
referred to as "Successor Landlord").
AGREEMENT
NOW, THEREFORE, in consideration of the foregoing, the mutual covenants
and agreements contained herein, and other good and valuable consideration, the
receipt and sufficiency of which are hereby acknowledged, Tenant, Borrower and
Lender agree as follows:
1. Tenant and Borrower agree for the benefit of Lender that:
(a) Tenant shall not pay, and Borrower shall not accept, any rent or
additional rent more than one month in advance;
(b) Except as specifically provided in the Lease, Tenant and Borrower
will not enter into any agreement for the cancellation of the Lease
or the surrender of the Demised Premises without Lender's prior
written consent;
(c) Tenant and Borrower will not enter into any agreement amending or
modifying the Lease without Lender's prior written consent, except
for amendments or modifications specifically contemplated in the
Lease for confirming the lease commencement date, the rent
commencement date, the term, the square footage leased, the renewal
or extension of the Lease, or the leasing of additional space at the
Property, or as otherwise specifically contemplated in the Lease;
(d) Tenant will not terminate the Lease because of a default thereunder
by Borrower unless Tenant shall have first given Lender written
notice and a reasonable opportunity to cure such default; and
(e) Tenant, upon receipt of notice from Lender that it has exercised its
rights under the Absolute Assignment and revoked the license granted
to Borrower to collect all rents, income and other sums payable
under the Lease, shall pay to Lender all rent and other payments
then or thereafter due under the Lease, and
<PAGE>
any such payments to Lender shall be credited against the rent or
other obligations due under the Lease as if made to Borrower.
(f) Tenant will not conduct any dry cleaning operations on the Demised
Premises using chlorinated solvents nor will Tenant use any
chlorinated solvents in the operation of their business on the
Demised Premises.
2. Subject to the terms of this Agreement, the Lease is hereby
subordinated in all respects to the Lien Instrument and to all renewals,
modifications and extensions thereof, subject to the terms and conditions
hereinafter set forth in this Agreement, but Tenant waives, to the fullest
extent it may lawfully do so, the provisions of any statute or rule of law now
or hereafter in effect that may give or purport to give it any right or election
to terminate or otherwise adversely affect the Lease or the obligations of
Tenant thereunder by reason of any foreclosure proceeding.
3. Borrower, Tenant and Lender agree that, unless Lender shall otherwise
consent in writing, the fee title to, or any leasehold interest in, the Property
and the leasehold estate created by the Lease shall not merge but shall remain
separate and distinct, notwithstanding the union of said estates either in
Borrower or Tenant or any third party by purchase, assignment or otherwise.
4. If the interests of Borrower in the Property are acquired by a
Successor Landlord:
(a) If Tenant shall not then be in default in the payment of rent or
other sums due under the Lease or be otherwise in material default
under the Lease (in each case, beyond the expiration of applicable
notice and cure periods), the Lease shall not terminate or be
terminated and the rights of Tenant thereunder shall continue in
full force and effect except as provided in this Agreement;
(b) Tenant agrees to attorn to Successor Landlord as its lessor; Tenant
shall be bound under all of the terms, covenants and conditions of
the Lease for the balance of the term thereof, including any renewal
options which are exercised in accordance with the terms of the
Lease;
(c) The interests so acquired shall not merge with any other interests
of Successor Landlord in the Property if such merger would result in
the termination of the Lease;
(d) If, notwithstanding any other provisions of this Agreement, the
acquisition by Successor Landlord of the interests of Borrower in
the Property results, in whole or part, in the termination of the
Lease, there shall be deemed to have been created a lease between
Successor Landlord and Tenant on the same
<PAGE>
terms and conditions as the Lease, except as modified by this
Agreement, for the remainder of the term of the Lease with renewal
options, if any; and
(e) Successor Landlord shall be bound to Tenant under all of the terms,
covenants and conditions of the Lease, and Tenant shall, from and
after Successor Landlord's acquisition of the interests of Borrower
in the real estate, have the same remedies against Successor
Landlord for the breach of the Lease that Tenant would have had
under the Lease against Borrower if the Successor Landlord had not
succeeded to the interests of Borrower; provided, however, that
Successor Landlord shall not be:
(i) Liable for the breach of any representations or warranties set
forth in the Lease or for any act, omission or obligation of
any landlord (including Borrower) or any other party occurring
or accruing prior to the date of Successor Landlord's
acquisition of the interests of Borrower in the Demised
Premises, except for any repair and maintenance obligations of
a continuing nature as of the date of such acquisition;
(ii) Subject to any offsets or defenses which Tenant might have
against any landlord (including Borrower) prior to the date of
Successor Landlord's acquisition of the interests of Borrower
in the Demised Premises except to the extent that such offsets
(a) were used to fund the Improvement Allowance (as defined in
the Lease), including interest, or to fund the repairs,
maintenance or other actions which would otherwise be an
obligation of Successor Landlord upon its acquisition of the
interest of Borrower in the Property and (b) are otherwise
expressly provided for under the Lease;
(iii) Liable for the return of any security deposit under the Lease
unless such security deposit shall have been actually
deposited with Successor Landlord;
(iv) Bound to Tenant for any claims arising subsequent to the date
upon which Successor Landlord transfers its interest in the
Demised Premises to any third party;
(v) Liable to Tenant under any indemnification provisions set
forth in the Lease arising prior to Successor Landlord's
acquisition of the interest of Borrower in the Property; or
(vi) Liable for any damages in excess of Successor Landlord's
equity in the Property.
<PAGE>
The provisions of this paragraph shall be effective and self-operative
immediately upon Successor Landlord succeeding to the interests of Borrower
without the execution of any other instrument.
5. Tenant represents and warrants that Tenant, to its actual knowledge:
(i) is not a person or entity with whom Lender is restricted from doing business
with under regulations of the Office of Foreign Asset Control ("OFAC") of the
Department of the Treasury (including, but not limited to, those named on OFAC's
Specially Designated and Blocked Persons list) or under any statute, executive
order (including, but not limited to, the September 24, 2001 Executive Order
Blocking Property and Prohibiting Transactions With Persons Who Commit, Threaten
to Commit, or Support Terrorism), or other governmental action; (ii) is not
knowingly engaged in, and shall not knowingly engage in, any dealings or
transaction or knowingly be otherwise associated with such persons or entities
described in (i) above; and (iii) is not a person or entity whose activities
violate the International Money Laundering Abatement and Financial
Anti-Terrorism Act of 2001 or the regulations or orders thereunder.
6. This Agreement may not be modified orally or in any other manner except
by an agreement in writing signed by the parties hereto or their respective
successors in interest. In the event of any conflict between the terms of this
Agreement and the terms of the Lease, the terms of this Agreement shall prevail.
This Agreement shall inure to the benefit of and be binding upon the parties
hereto, their respective heirs, successors and assigns, and shall remain in full
force and effect notwithstanding any renewal, extension, increase, or refinance
of the indebtedness secured by the Lien Instrument, without further
confirmation. Upon recorded satisfaction of the Lien Instrument, this Agreement
shall become null and void and be of no further effect.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of
the day and year first above written.
TENANT: CAPELLA EDUCATION COMPANY,
a Minnesota corporation
By: /s/ Joe Gaylord
---------------------
Attest: _______________
Secretary
<PAGE>
STATE OF MINNESOTA )
) ss.
COUNTY OF HENNEPIN )
The foregoing instrument was acknowledged before me this 8th day of March, 2004,
by Joe Gaylord to me known and known to me to be (one of the) officers on behalf
of Capella Education Company, a corporation. He/she is personally known to me.
NOTARY PUBLIC:
Signature /s/ Lee A. Willhite
-------------------
Lee A. Willhite
-----------------------
Name (typed or printed)
My commission Expires:
BORROWER: 601 SECOND AVENUE LIMITED PARTNERSHIP, a Texas
limited partnership
By: Minneapolis 601 Limited Partnership, a Texas
limited partnership, its general partner
By: Hines Acquisitions No. 2 Limited
Partnership, a Texas limited partnership,
its sole general partner
By: Hines Interests Limited
Partnership, a Delaware limited
partnership, its sole general partner
By: Hines Holdings, Inc., a
Texas close corporation, its
sole general partner
By: /s/ C. Kevin Shannahan
--------------------------------
Name: C. Kevin Shannahan
Its: Executive Vice President
<PAGE>
STATE OF ILLINOIS )
) Sections
COUNTY OF COOK )
The foregoing instrument was acknowledged before me this 19th day of
March, 2004, by C. Kevin Shahannan, the Executive Vice President of Hines
Holdings, Inc. a Texas close corporation, as sole general partner of Hines
Interests Limited Partnership, a Delaware limited partnership, as sole general
partner of Hines Acquisitions No. 2 Limited Partnership, a Texas limited
partnership, as sole general partner of Minneapolis 601 Limited Partnership, a
Texas limited partnership, as sole general partner of 601 Second Avenue Limited
Partnership, a Texas limited partnership, on behalf of the corporation and
partnerships.
/s/ Madeline Greenlee
----------------------------
Notary Public
LENDER: THE NORTHWESTERN MUTUAL LIFE
INSURANCE COMPANY, a Wisconsin corporation
By: Northwestern Investment Management Company,
LLC, a Delaware limited liability company, its
wholly owned affiliate and authorized
representative.
By: /s/Michael P. Cusick
--------------------
Michael P. Cusick, Managing Director
Attest: /s/ Robert J. Bastien
---------------------
Robert J. Bastien, Assistant Secretary
<PAGE>
STATE OF WISCONSIN )
) ss.
COUNTY OF MILWAUKEE )
The foregoing instrument was acknowledged before me this 23rd day of
February, 2004 by Michael P. Cusick and Robert J. Bastien the Managing Director
and Assistant Secretary respectively, of Northwestern Investment Management
Company, LLC on behalf of THE NORTHWESTERN MUTUAL LIFE INSURANCE COMPANY, a
Wisconsin corporation, and acknowledged the execution of the foregoing
instrument as the act and deed of said corporation.
/s/ Janet M. Szukalski
-----------------------------------
Janet M. Szukalski, Notary Public
My commission expires: May 9, 2004
This instrument was prepared by Judith L. Perkins, Attorney, for The
Northwestern Mutual Life Insurance Company, 720 East Wisconsin Avenue,
Milwaukee, WI 53202.
<PAGE>
EXHIBIT "A"
Parcel 1:
Lot 6, Block 219, Town of Minneapolis, according to the plat thereof on file or
of record in the office of the Register of Deeds in and for said County.
Parcel 2:
The Northeasterly 7 feet of Lots 1, 2 and 3, the Northeasterly 7 feet of the
Northwesterly Half of Lot 4, the Southeasterly Half of Lot 4, Lots 5, 6, 7, 8, 9
and 10, Block 219, Brown and Jackins' Addition to Minneapolis, according to the
plat thereof on file or of record in the office of the Register of Deeds in and
for said County.