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EXHIBIT 10.23
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 eq
