Minnesota-Minneapolis-225 South Sixth Street Short Term Office Space Lease - Capella Education Co. and 601 Second Avenue LP
SHORT TERM OFFICE SPACE LEASE
This Short Term Office Space Lease ("LEASE" or "AGREEMENT") is made and
entered into effective as of February 23, 2004, by and between 601 Second Avenue
Limited Partnership, a Texas limited partnership ("Landlord"), and Capella
Education Company, a Minnesota corporation ("Tenant").
RECITALS
A. Landlord and Tenant have entered into an Office Lease of even date
herewith (the "CAPELLA Lease") for space in the office project known as 225
South Sixth Street (the "PROJECT") which is owned by Landlord and located in
Minneapolis, Minnesota.
B. Tenant would like to use some office space in the Project on a
temporary basis until a portion of the Premises which is Tenant is initially
leasing from Landlord pursuant to the Capella Lease is ready to be occupied by
Tenant for the conduct of Tenant's business.
B. Landlord is willing to grant Tenant the right to use such space on the
terms and conditions hereinafter set forth.
Accordingly, Landlord and Tenant hereby agree as follows:
1. DEFINITIONS. Those capitalized terms which are used in this Agreement
and are not defined herein shall have the meaning given to them in the Capella
Lease.
2. LEASE. Landlord hereby leases to Tenant all 26,896 square feet of the
Rentable Area on the 6th floor of the Tower which is depicted on the floor plan
that is attached hereto as Exhibit A (the "PREMISES") from the date on which
this Agreement has been fully executed and delivered (the "COMMENCEMENT DATE"),
which date shall be inserted by Landlord into the first paragraph of this
Agreement contemporaneously with Landlord's delivery of a fully executed copy of
this Agreement to Tenant until 11:59 p.m. on the day immediately prior to the
Phase I & II Rent Commencement Date (as such term is defined in the Capella
Lease) (the "LEASE TERM"). Tenant shall have the right to use the Premises for
general office purposes, purposes incidental thereto and for no other purpose.
3. PAYMENT OF VARIABLE OPERATING COSTS. As consideration for Landlord's
lease of the Premises to Tenant, Tenant agrees to reimburse Landlord for the
cost of the janitorial services and the utility expenses to be provided to the
Premises during the Lease Term (the "VARIABLE EXPENSES"), which is hereby
stipulated to be $3.04 per square foot of Rentable Area per year. Landlord and
Tenant agree that the amount of the monthly payment of Variable Expenses is
based upon the estimated cost of such expenses for the Project on a square foot
basis for calendar year 2004 and that there shall not be any reconciliation or
adjustment of the amount of Variable Expenses to be paid by Tenant when the
actual cost of the janitorial services and utility expenses for calendar year
2004 are known. The Variable
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Expenses for the first full calendar month and any initial partial calendar
month shall be paid to Landlord within ten (10) days after the Commencement
Date. Thereafter, the Variable Expenses shall be due and payable to Landlord on
or before the first day of each calendar month. The Variable Expenses for any
partial calendar month shall be prorated based upon the actual days in such
month. Tenant shall be obligated to pay Landlord a late fee equal to five
percent (5%) of the overdue amount of any Variable Expenses which are not
received by Landlord prior to the fifth (5th) day of the calendar month in which
due.
4. SERVICES. Landlord shall, throughout the Lease Term, provide to Tenant
the services described in Article 14 of the Capella Lease.
5. ALTERATIONS. Tenant will not make or permit anyone to make any
alterations, decorations, additions or improvements, structural or otherwise, in
or to the Premises or the Project, or place safes, vaults or other heavy
furniture or equipment within the Premises, without first obtaining the prior
written consent of Landlord, which consent shall not be unreasonably withheld.
In making any alterations, decorations, additions or improvements, structural or
otherwise, in or to the Premises which have been approved by Landlord, Tenant
shall be bound by and shall comply in all respects with the provisions set forth
in Article 12 of the Capella Lease.
6. RULES. Tenant shall comply with and cause its visitors, employees,
contractors, agents and invitees to comply with, all legal requirements and with
the rules and regulations of the Project adopted and altered by Landlord from
time to time for the safety, care and cleanliness of the Premises and Project
and for preservation of good order therein.
7. SURRENDER OF PREMISES. On the Phase I & II Rent Commencement Date,
Tenant shall immediately vacate the Premises, remove all of its personal
property from the Premises, restore any damage caused by Tenant, its employees,
agents or contractors and leave the Premises in broom clean condition. Any
personal property required to be removed pursuant to the terms of this Agreement
and not removed shall be deemed abandoned, and Tenant shall be liable for all
costs of removal and disposal. If Tenant continues to occupy the Premises or any
part thereof after the Phase I & II Rent Commencement Date or any earlier
termination of this Lease without the prior written consent of Landlord, Tenant
shall be obligated to pay the same Base Rent and Tenant's Additional Rent for
the Premises as Tenant is obligated to pay for the Initial Premises under the
Capella Lease. In addition, Tenant shall indemnify Landlord against all claims
for damages by any party to whom Landlord may have leased all or any part of the
Premises effective upon the termination of this Lease and for any other
liability, loss, cost, damage or expense (including attorneys' fees,
disbursements of counsel and any costs of suit) incurred by Landlord as a result
of such holding over, and the provisions of this Section 7 shall not prevent
Landlord from exercising any right or remedy available at law or in equity to
regain immediate possession of the Premises and/or damages from Tenant.
7. RELEASE. Landlord and Landlord's Affiliates and each of their partners,
directors, officers, shareholders and employees shall not be liable to Tenant,
or those
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EXHIBIT 10.23
claiming by, through or under Tenant, for any damage or claims, however caused,
arising from loss or damage to books, records, computer or other electronic
equipment, data or media, files, artwork, money, securities, negotiable
instruments or papers, or any other personal property in the Project, the
interruption in the use of any cellular or wireless communication devices or the
interruption in the use of the Premises, any fire, robbery, theft, assault, or
any other casualty, any leakage or bursting of pipes or water vessels or any
roof or wall leakage or other water damage, in any part or portion of the
Premises or the Project.
8. INDEMNIFICATION. Subject to the provisions of Section 10 of this
Agreement which shall control if they conflict with the provisions of this
Section 8, Tenant shall indemnify, defend (at Landlord's request and with
counsel reasonably approved by Landlord) and hold Landlord and Landlord's
Affiliates (and each of their partners, directors, officers, shareholders and
employees) harmless from and against every demand, claim, cause of action,
judgment and expense, including, but not limited to, reasonable attorneys' fees
and disbursements of counsel, whether suit is initiated or not, and all loss and
damage arising from or related to any bodily or personal injury, death or
property damage occurring in the Premises, except to the extent caused by the
gross negligence or willful misconduct of Landlord or Landlord's Affiliates or
any of their representatives, agents, contractors or employees.
9. INSURANCE. Tenant shall maintain a policy of commercial liability
insurance with the premium thereon fully paid on or before the due date, issued
by and binding upon a solvent insurance company authorized to do business in
Minnesota, such insurance to afford minimum protection (which may be effected by
primary and/or excess coverage) of not less than $5,000,000 combined single
limit. Landlord shall be named as an additional insured on Tenant's liability
policy. Prior to the Commencement Date, Tenant shall deliver to Landlord an
ACORD Form 27 Certificate of Insurance in form satisfactory to Landlord
evidencing maintenance of the insurance required herein.
10. WAIVER OF RECOVERY RIGHTS. Notwithstanding anything to the contrary in
this Agreement, Landlord and Tenant each hereby waives any and all rights of
recovery, claim, action or cause of action, against the other and their
Affiliates and each of their partners, shareholders, officers, employees and
contractors for any loss or damage that may occur to the Premises or the
Project, or any improvements thereto, or any personal property of such party
therein, by reason of fire, the elements, or any other cause which could be
insured against under the terms of the all risk property insurance policies
referred to in Section 16 of the Capella Lease (whether or not actually insured)
or which is actually insured against by the party in question, regardless of
cause or origin, including negligence of the other party hereto or its
Affiliates or any of their partners, shareholders, officers, employees and
contractors, and covenants that to the extent of such waiver no insurer shall
hold any right of subrogation against the other party hereto. In addition,
Tenant hereby waives all rights of recovery with respect to property damage
against all other tenants of the Project that have, prior to any loss by Tenant,
executed a reciprocal waiver of recovery rights for the benefit of Tenant.
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EXHIBIT 10.23
11. RIGHT OF ENTRY. Landlord shall have the right upon reasonable oral
notice to Tenant and at reasonable times to examine, inspect and protect the
Premises, and to make such alterations, renovations, restorations and/or repairs
as Landlord shall deem necessary or desirable for the Premises, for any other
premises in the Project, or the Project itself and to show the Premises to
prospective tenants, lenders and buyers of the Project.
12. LIMITED LIABILITY. Tenant specifically agrees to look solely to
Landlord's interest in the Project for the recovery of any judgment against
Landlord, it being agreed that Landlord (and its partners and shareholders)
shall never be personally liable for any such judgment.
13. ATTORNEYS' FEES. In addition to all other remedies of Landlord,
Landlord shall be entitled to reimbursement upon demand of all attorneys' fees
and disbursements of counsel incurred by Landlord in connection with any default
by Tenant in the performance of its obligations under this Agreement, whether
suit is initiated or not.
14. COUNTERPARTS. This Agreement may be executed in any number of
counterparts, all of which shall be considered one and the same Agreement, even
though all parties hereto have not signed the same counterpart. Signatures on
this Agreement which are transmitted by facsimile shall be valid for all
purposes. Any party shall, however, deliver an original signature for this
Agreement to the other party upon request.
15. SUCCESSORS AND ASSIGNS. This Agreement may not be assigned by Tenant
without Landlord's prior written consent, which may be withheld, conditioned or
given in Landlord's sole discretion.
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EXHIBIT 10.23
IN WITNESS WHEREOF, Tenant has executed this Short Term Office Space Lease
to be effective as of the date first above written.
TENANT:
CAPELLA EDUCATION COMPANY,
a Minnesota corporation
By: /s/ Joe Gaylord
--------------------------
Name: Joe Gaylord
Title: CFO
This is signature page to that certain Short Term Office Space Lease by
and between 601 Second Avenue Limited Partnership, a Texas limited partnership,
as Landlord, and Capella Education Company, a Minnesota corporation, as Tenant,
with respect to certain Premises located in the office project now known as 225
South Sixth Street in Minneapolis, Minnesota.
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EXHIBIT 10.23
IN WITNESS WHEREOF, Landlord has executed this Short Term Office Space
Lease to be effective as of the date first above written.
LANDLORD:
601 SECOND AVENUE 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
Title: Executive Vice President
This is signature page to that certain Short Term Office Space Lease by
and between 601 Second Avenue Limited Partnership, a Texas limited partnership,
as Landlord, and Capella Education Company, a Minnesota corporation, as Tenant,
with respect to certain Premises located in the office project now known as 225
South Sixth Street in Minneapolis, Minnesota.
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EXHIBIT 10.23
DECLARATION OF
COMMENCEMENT DATE
This Declaration is made as of February 23, 2004, by and between 601
Second Avenue Limited Partnership, a Texas limited partnership ("LANDLORD") and
Capella Education Company, a Minnesota corporation ("TENANT").
Landlord and Tenant are parties to that certain Office Lease (the "LEASE")
dated as of February 23, 2004.
In accordance with the Lease, Landlord and Tenant hereby memorialize that:
1. The Commencement Date is February 23, 2004.
2. The expiration date of the Initial Scheduled Term is October 31,
2010.
TENANT:
CAPELLA EDUCATION COMPANY,
a Minnesota corporation
By: /s/ Joe Gaylord
-----------------------
Name: Joe Gaylord
Title: CFO
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In Witness Whereof, the undersigned has executed this Declaration to be
effective as of the date set forth in the first paragraph of the Declaration.
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
This is a signature page to that certain Declaration of Commencement Date
by and between 601 Second Avenue Limited Partnership, a Texas limited
partnership, and Capella Education Company, a Minnesota corporation, with
respect to premises located in the office project now known as 225 South Sixth
Street in Minneapolis, Minnesota.