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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 equi
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