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CAUSE NO.
SUGAR LAND CUBED, LLC IN THE DISTRICT COURT
Plaintiff
OF FORT BEND COUNTY, TEXAS
THE LEARNING EXPERIENCE,
CORP.
Defendant JUDICIAL DISTRICT
PLAINTIFF’ ORIGINAL PETITION
TO THE HONORABLE JUDGE OF SAID COURT:
COMES NOW, Sugar Land Cubed, LLC — Plaintiff’ or “Landlord”), and files this its Original
Petition against The Learning Experience Corp. (“Defendant” or “Guarantor”) and, in support
thereof, respectfully shows the Court the following:
DISCOVERY CONTROL PLAN
Plaintiff intend to conduct discovery under Level 2 of Texas Rule of Civil Procedure
CLAIM FOR RELIEF
Plaintiff seeks monetary relief of over $200,000 but not more than $1,000,000
including damages of any kind, penalties, costs, expenses, pre and post judgment interest, and
attorney’s fees. Tex. R. Civ. P. 47(¢).
PARTIES
Plaintiff, Sugar Land Cubed, LLC, is a limited liability company organized and
operating under the laws of the state of Texas, having its principal place of business at 1999 Bryan
Street, Suite 900, Dallas, Texas, 75201.
LAINTIFF RIGINAL ETITION
Page
4 Defendant, The Learning Experience Corp., is a corporation organized and operating
under the laws of the state of Delaware, having its principal place of business at 210 Hillsboro
Technology Drive, Deerfield Beach, Florida, 33441. Defendant has not designated a registered agent
in the State of Texas. Pursuant to Tex. Bus. Org. Code §§ 5.251 and 5.252, service can be effectuated
by service of process on the Texas Secretary of State, P.O. Box 12079, Austin, Texas, 78711-2079,
who is requested to forward same, certified mail, return receipt requested, to the chief executive
officer, president, or vice-president of Defendant at its principal place of business.
Iv. JURISDICTION AND VENUE
.
5. This Court has jurisdiction over the subject matter of this dispute because Plaintiff
seeks monetary damages in excess of the Court’s minimum jurisdictional limits.
6. This Court has jurisdiction over the parties to this dispute because all parties do
business in Texas as the term “doing business” is understood under Texas law and because all or a
substantial portion of events giving rise to this lawsuit arose from business occurring in Fort Bend
County, Texas.
7. Venue is proper in Fort Bend County, Texas under Section 15.002 of the Texas Civil
Practice and Remedies Code because all or a substantial portion of events or omissions giving rise to
this lawsuit occurred in Fort Bend County, Texas.
8. Jurisdiction and venue are also proper in this Court because the lease agreement and
guaranty made the basis of this lawsuit stipulate, in relevant part, that “[e]Jach party irrevocably submits
to the exclusive jurisdiction and venue of the state courts of the State [of Texas] and waives any
objection to the jurisdiction and venue of such courts. ol
' See Exhibit A, Lease § 19.12 (p. 26).
PLAINTIFF’S ORIGINAL PETITION
Page 2 of 12
Vv NATURE OF THE ACTION
9. This action arises from Defendant’s breach of a guaranty agreement whereby
Defendant guaranteed the payment of rent on certain leased premises in Fort Bend County, Texas.
VI. FACTUAL BACKGROUND
A The Original Lease Agreement
10. On November 24, 2014, Landlord’s predecessor in interest, Spring Daycare, LLC
(“Spring”), and TLE at Sugar Land, LLC (“Tenant”)—a wholly owned subsidiary of Guarantor—
entered into a lease agreement (“Lease”) whereby Spring agreed to lease to Tenant, at some future
date, commercial real estate located at the intersection of West Airport Road and Old Richmond Road
in Sugar Land, Texas, 77498 (“Property”) for the operation of Tenant’s child care center business.
11. Notably, Spring and Tenant both acknowledged that as of the date of the Lease’s
execution, Spring did not possess fee title to the Property, though it did have legal authority to enter
the Lease.* In the event that Spring could not acquire title to the Property by August 1, 2015, the
Lease would terminate and neither party would have any obligation to the other. Under the express
terms of the Lease, the 192-month lease term would only begin sixty days after an unconditional and
permanent Certificate of Occupancy expressly allowing Tenant’s planned use of the premises was
delivered to Tenant.*
12. The express terms of the Lease provided narrow instances where Tenant would have
the option of terminating the Lease. Under its terms, Tenant could not terminate the Lease at will,
but only in cases involving conditions such as Landlord’s negligent upkeep of utility services, presence
of hazardous substances, condemnation of the property, and casualty loss. The Lease also set forth
2 See id. § 1.3 (p. 2).
3 See id. § 2.1 (p. 3).
4 See, eg, id. §§ 9.1 and 9.2 (pp. 14-15).
PLAINTIFF’S ORIGINAL PETITION
Page 3 of 12
events constituting Tenant’s default. Such events included, among others, Tenant’s failure to pay,
within fifteen days after written notice thereof, any installment of rent.°
B. The Original Guaranty
13. To induce Landlord’s predecessor in interest to enter into the Lease with Tenant,
Guarantor, as parent company of Tenant, executed a Guaranty of Rent dated November 24, 2014
(“Guaranty”). The Guaranty was included and attached to the Lease as “Exhibit E.’”
14, Under the terms of the Guaranty, Guarantor guaranteed to Spring, its successors and
assigns, the timely payment of all monetary obligations of rent as and when due pursuant to the Lease.
The Guaranty further stipulated that a maximum liability amount of $500,000 in the aggregate be
imposed against Guarantor. As agreed to by Guarantor, this maximum liability amount was scheduled
to periodically reduce in $100,000 increments with each passing anniversary of the date on which the
Lease took effect, until such time as the balance of the maximum liability amount reached zero. In
other words, the Guaranty was expressly intended to guarantee payment of five years of rent under
the lease. By signing the Guaranty, Guarantor thus assumed responsibility for, amongst other things,
meeting the rent obligations of Tenant (obligations which became owed by Tenant not at the time of
the Lease’s signing but only after six y days had elapsed from Tenant’s receipt of a Certificate of
Occupancy) and accepted the benefit of a diminishing maximum liability amount in exchange for such
assumption of responsibility.
Cc. The Lease Became Effective October 21, 2017
15. Spring ultimately did acquire fee title to the Property by August 1, 2015, thereby
ensuring that the Lease did not terminate under its own provisions. On August 22, 2017, the requisite
Certificate of Occupancy was delivered to Tenant, thus triggering, in accordance with the provisions
5 See id. § 7-1 (pp. 10-11).
6 See id. at Exhibit E (p. 45).
PLAINTIFF’S ORIGINAL PETITION
Page 4 of 12
of the Lease agreed to by Spring and Tenant, the sixty-day countdown until the Lease’s 192-month
term took effect. As a result, the Lease became effective on October 21, 2017. In accordance with
the provisions of the Lease, rent payments became due on the first day of each and every calendar
month during the lease term and would be considered late if not received on or before the tenth day
of the month.”
D. Subsequent Assignments and Acquisitions of the Lease
16. On September 8, 2017, just over one month prior to the Lease becoming effective,
Tenant, in accordance with the Lease’s provisions, assigned its lease to First Step Investments, LLC
(“First Step”). This assignment occurred as part of a franchisor-franchisee deal whereby First Step
would operate a franchise location of Guarantor at the Property. The nature of the assignment
required, first, that Tenant agree to remain a party to the Lease and to assume responsibility for the
Property under the Lease if First Step failed to meet its obligations.* The assignment also required
that First Step be required to pay Guarantor a monthly fee in exchange for Guarantor’s continued
guarantee of rent obligation to Landlord’s predecessor in interest. Shortly following the assignment,
First Step failed to meet its obligations under the franchise arrangement and the Lease.
17. In late 2017, Landlord agreed to purchase the Property from Doud Land Company,
LLC (“Doud”), builder and developer of the Property and parent company of Spring. This deal closed
on January 19, 2018. In accordance with the Lease’s provisions, proper notice was given to all parties
in interest, including Tenant and Guarantor.
7 See id. § 3.1(b) (p. 4).
8 See id. § 10.1 (a) (p. 15) (“Upon any such assignment or sublet, Tenant shall not be relieved of any of its obligations under
this Lease.” (emphasis in original).
PLAINTIFF’S ORIGINAL PETITION
Page 5 of 12
Doud Land Co., LLC The Learning Experience Corp.
(Parent) (Parent/Guarantor)
Lease signed 11/24/2014
Spring Daycare, LLC TLE at Sugar Land, LLC
(Subsidiary) Lease effective 10/21/2017
(Subsidiary/Tenant)
T T
Property sold Lease assigned
01/19/2018 09/08/2017"
| !
Sugar Land Cubed, LLC
(Landlord) First Step Investments, LLC
E Third Amendment to Lease/Guaranty
18. In response to the COVID-19 pandemic and the unprecedented challenges imposed
by it on individuals and businesses alike, Landlord, Tenant, and Guarantor determined that an
amendment to the Lease was necessary. On June 23, 2020, Landlord, Tenant, and Guarantor executed
the Third Amendment to Lease (“Third Amendment”)? modifying provisions of the Lease which
governed Tenant’s payment schedule and Guarantor’s obligations.
19. Specifically, the Third Amendment mandated, in relevant part, that:
For April 2020 and May 2020: (i) Landlord shall abate $10,000 of monthly base rent
($20,000) for each month; (ii) Landlord shall defer $6,000 of the remaining $10,000
monthly balance for each month; and (iii) Tenant shall pay $4,000 for each month;
For June 2020 through and including December 2020: (i) Tenant shall pay to Landlord,
monthly, an amended rent equal to the greater of $10,000 or the sum of 29% of gross
monthly sales for the month minus $3,137.75; (ii) Amount of deferred rent for each
month shall be determined by the difference between monthly base rent ($20,000) and
° The Lease was first amended on September 27, 2017 and the second amendment occurred on October, 11, 2017.
However, only the Thitd Amendment is relevant for purposes of this lawsuit.
PLAINTIFF’S ORIGINAL PETITION
Page 6 of 12
monthly rent paid for each month; and (iii) Tenant shall resume paying full monthly
base rent, pursuant to the terms of the Lease, in January 2021;
Deferred rent shall be amortized over twenty-four months with Tenant beginning
payment in September 2021 and concluding on August 31, 2023, or such earlier date
in which Tenant has repaid the deferred rent in full;
Guarantor’s maximum liability under the Guaranty shall be limited to the remaining
value of the Guaranty—however, for the remainder of the Guaranty, Guarantor
shall also guaranty payment of deferred rent, ot any then-outstanding balance
thereof, until such has been repaid in full; further, upon expiration of the Guaranty,
pursuant to its terms, the only remaining sum then being guaranteed is the then-
remaining balance outstanding of deferred rent (emphasis added); and
Landlord, Tenant, and Guarantor affirm all provisions of the Lease and Guaranty that
were not expressly modified by the Third Amendment."
20. Therefore, as provided for by the Third Amendment’s modifications to the Lease,
executed in June 2020, Guarantor acknowledged and accepted, first, that it assumed responsibility for
payment of Tenant’s deferred rent accumulated from April 2020 through and including December
2020 and, more importantly, that the Guaranty had not yet expired.
F Tenant’s Wrongful Termination of Lease and Subsequent Default
21. On November 2, 2020, Tenant’s Senior Vice-President, Anne Ewing (“Ewing”),
emailed Landlord’s manager, Corey Schneider (“Schneider”), informing him that Tenant’s child care
center business was failing and that Tenant had made the decision to shut the business down. During
a follow up phone call between Ewing and Schneider, Ewing elaborated on the decision to close the
10 See Exhibit B, Third Amendment.
PLAINTIFF’S ORIGINAL PETITION
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business and informed Schneider that Tenant wished to have the Property turned over to Landlord.
Importantly, Ewing further acknowledged that the Guaranty obligating Guarantor to cover Tenant’s
missed rent payments and deferred rent was still active and had not yet expired. During these
conversations, Schneider informed Ewing that Tenant could not terminate the Lease at will in such
fashion and that Tenant’s plans to stop paying rent and maintaining the Property would constitute
default under the Lease.
22. Although Ewing informed Schneider of Tenant’s desire to terminate the Lease on
November 2, 2020—coincidentally just a few days past the anniversary of the date on which the Lease
took effect—Tenant’s decision to wrongfully back out of the Lease was in fact made well in advance
of this date. By as early as September 2020, Tenant had devoted considerable time and effort towards
removing its belongings from the Property, including trademark property, exterior signage, interior
fixtures, and other supplies, equipment, and inventory used as part of its business. Moreover, Tenant
made several attempts to repair various areas of the Property that had been damaged in the course of
Tenant’s business operations. Such conduct taken prior to Tenant’s decision to notify Landlord of its
desire to terminate the remaining 156 months of the original 192-month Lease term indicates that
Tenant had no intention of making any further rent payments and was only biding its time until the
anniversary of the date on which the Lease took effect so that Guarantor’s maximum liability amount
would decrease by another $100,000.
23. Sure enough, on November 10, 2020, Tenant became delinquent under the terms of
the Lease for failure to pay rent for the month of November. On November 11, 2020, Landlord,
through counsel, sent a “Notice of Tenant Default and Notice to Vacate” letter (“Notice of Default”)
to Tenant and Guarantor. " The Notice of Default constituted formal notice to Tenant regarding
1 See Exhibit C, Notice of Default.
PLAINTIFF’S ORIGINAL PETITION
Page 8 of 12
Tenant’s default for failure to timely pay rent and Tenant’s expressed, anticipatory further breach of
the Lease by Tenant’s written notice to Landlord that it did not plan on making any future rent
payments or maintaining the Property. The Notice of Default also informed Tenant that if it failed
to pay the rent arrearages and repudiate its anticipatory breach within fifteen days, Landlord would
order Tenant to vacate the Property and would commence necessary proceedings against Tenant and
Guarantor.
G Guarantor’s Breach of Guaranty
24. On December 16, 2020, in response to Tenant and Guarantotr’s failure to respond to
the Notice of Default sent over a month prior, Landlord, through counsel, sent a “Demand for
Payment Under Lease & Guaranty” letter (“Demand for Payment”) to Tenant and Guarantor.'? The
Demand for Payment reminded Tenant and Guarantor that Tenant owed Landlord $109,739.29 in
rent as contemplated by the Lease and the Third Amendment. The Demand for Payment further
reminded Guarantor that it was likewise obligated to Landlord for this rent under the Guaranty. The
Demand for Payment also informed Tenant and Guarantor that Landlord had, in accordance with the
provisions of the Lease, accelerated all rent amounts due under the Lease such that the current rent
amount owed to Landlord is $3,080,000. Finally, the Demand for Payment instructed Tenant and
Guarantor to pay their respective amounts owed to Landlord by close of business on December 28,
2020.
25. To date, Tenant and Guarantor have failed to pay Landlord any amount of their
respective amounts owed. Despite Landlord’s repeated attempts to resolve this matter, Tenant and
Guarantor have refrained from engaging in good faith discussions with Landlord. Tenant owes
Landlord $3,190,137.08. Guarantor owes Landlord $310,677."
12 See Exhibit D, Demand for Payment.
'3 Guarantor’s original maximum liability amount of $500,000 has been reduced to $200,000 under the Lease because three
years have elapsed between the date the Lease took effect (October 21, 2017) and the date of Tenant’s default (November
PLAINTIFF’S ORIGINAL PETITION
Page 9 of 12
VII. CAUSE OF ACTION - BREACH OF CONTRACT
26. Landlord realleges the foregoing paragraphs and incorporates them here as if fully set
forth herein.
27. The Lease and Guaranty, as amended by the Third Amendment, are valid, enforceable
written contracts. As contemplated by Landlord’s, Tenant’s, and Guarantor’s intent, as well as by
their conduct and actions following execution of the Lease and Guaranty, the Lease became effective
no earlier than October 21, 2017 and thus the Guaranty has not yet expired.
28. Landlord is a proper party to sue for Guarantor’s breach of the Guaranty.
29. Guarantor is a proper party to be sued for its breach of the Guaranty.
30. Landlord performed, tendered performance of, or was excused from performing its
obligations under the Lease and Guaranty, as amended by the Third Amendment.
31. Guarantor breached the Guaranty by failing to pay all amounts, including Tenant’s
rent arrearages and deferred rent, due and owing by Tenant to Landlord under the Lease. This is one
of Guarantor’s obligations under the Guaranty, and Guarantor breached the Guaranty by not paying
Landlord such amounts.
32. Guarantor’s breach of its obligations under the Guaranty have caused injury and
damages to Landlord, for which Landlord now sues Guarantor.
33. As a direct and proximate result of Guarantot’s breach of the Guaranty, Landlord has
suffered, and will continue to suffer, damages in an amount that, as of April 15, 2021, is not less than
$310,677, not including pre- and post-judgment interest, reasonable and necessary attorney’s fees, and
court costs. Such damages, interest, attorney’s fees, and costs—for which Guarantor is responsible
under the Guaranty- vill continue to increase as this litigation proceeds.
2, 2020). However, an additional $82,000 in deferred rent and $28,677 in taxes, interest, and late fees is also owed by
Guarantor under the Third Amendment.
PLAINTIFF’S ORIGINAL PETITION
Page 10 of 12
34. Landlord is entitled to recover from Guarantor pre- and post-judgment interest at the
highest rates allowable under the law and/or the Lease and Guaranty.
35. Landlord is entitled under the Guaranty and under applicable law to recover from
Guarantors the reasonable and necessary attorney’s fees, expenses, and court costs incurred by
Landlord. See, e.g., Lease § 19.3; Lease Exhibit E; Tex. Civ. Prac. & Rem. Code § 38.001. With regard
to attorney’s fees, Landlord has incurred and will continue to incur attorney’s fees related to this
dispute and lawsuit. Landlord seeks to recover from Guarantor the reasonable and necessary
attorney’s fees, expenses, and court costs incurred by Landlord, as are equitable and just, including
those incurred as a result of trial and/or prosecuting or defending any appeal.
VIII. CONDITIONS PRECEDENT
36. All conditions precedent to Landlord’s claims for relief have been performed or have
occurred as required by Tex. R. Civ. P. 54.
IX. URY DEMAND
37. Pursuant to Tex. R. Civ. P. 216, Landlord demands a trial by jury for all issues so
triable.
xX. PRAYER
WHEREFORE, PREMISES CONSIDERED, Landlord respectfully requests that Guarantor
be cited to appear and answer, and that Landlord be granted judgment and recovery from Guarantor,
as follows:
Actual damages, as described above;
b Pre- and post-judgment interest at the highest rates allowable;
Reasonable and necessary attorney’s fees and expenses incurred by Landlord;
Costs of suit; and
Such other and further relief to which Landlord may show itself to be justly entitled.
PLAINTIFF’S ORIGINAL PETITION
Page 11 of 12
Respectfully submitted,
DANIELS & TREDENNICK, PLLC
By: /s/ Douglas A. Daniels
Douglas A. Daniels
Texas State Bar No. 0079379
doug.daniels@dtlawyers.com
Richard A. Alvarado
Texas State Bar No. 24120686
tick@dtlawyers.com
6363 Woodway Dr., Suite 700
Houston, Texas 77057
(713) 917-0024 (Telephone)
(713) 917-0026 (Facsimile)
COUNSEL FOR PLAINTIFF
PLAINTIFF’S ORIGINAL PETITION
Page 12 of 12
EXHIBIT A
=
GENERAL LEASE INFOR ATION
} SITE NUMBER 1429-TX
|
SITE ADDRESS: West Airport Road and Old Richmond Road
Sugar Land, Texas 77498
PERSE TLE at Sugar Land, LLC, a Delaware
limited liability company
BUSINESS N. (AME: The Learning| Experience®
|
‘TENANT'S ADDRESS: 4855 Technology Way, Suite 700
Boca Raton, Florida 33431
TENANT'S Lt (561) 886-6400
LANDLORD: Spring Daycare, LLC, a Texas limited liability
company
|
LANDLORD'S ADDRESS 25528 Genesee Trail
Golden, Colorado 80401
Laniaemms PHONE: (303) 462-3604
EFFECTIVE DATE November 24, 2014
LEASE TERM: Sixteen (16) years
OPTION TERM: Two (2) five (5) year periods each
SQUARE FOOTAGE: 10,000 Building, plus 5,000 Playground
INITIAL MONTHLY BASE RATE: $24.00 per square foot, subject to Section 3.2
|
INITIAL MON rt BASE RENT: $20,000.00, subject to Section 3.2
Exhibit A: Site Plan
Exhibit B: Form of Assignment and Assumption Agreement
Exhibit C: | Landlord's Work
Exhibit C-1: Tenant Signage Specifications
Exhibit D: Form of Landlord’s Subordination of Lien
Exhibit E: Guaranty
ExhibitF: Estoppel and Commencement Date Certificate
LEASE
e
|
This LEASE (the “Lease”) is made as of the 24h day of November, 2014 (the “Effectiv
d”), having
\Date”) between Spring Daycare, LLC, a Texas limited liability company (the “Landlor
and TLE AT
its principal place of business at 7500 Rialto Blvd., Suite 250, Austin, TX 78735
having its principal
SUGAR LAND, LLC, a Delaware limited liability company (the “Tenant”),
place of busine: ss at 4855 Technology Way, Suite 700, Boca Raton, Florida 33431.
| ARTICLE I
LEASED PREMISES
1d Leased Premises. Landlord, in considerati of the rents and other sums payable by
to be kept and
‘Tenant hereunder to Landlord, and the terms, covenants, conditions and agreements
| performed by Tenant
as hereinafter set forth, by these presents does hereby lease, demise, and let to
Tenant, and Tenant hereby rents and leases from Landlord, certain premises designated as Parcel
State of Texas,
No. 0009-00-000-6415-907 in the City of Sugar Land, County of Fort Bend and
| known as Intersection of West Airport Road )and Old Richmond Road, Sugar Land,
commonly
A (the “Leased
Texas 77498 and more particularly shown on the site plan ‘tached hereto as Exhibit
by Landlord,
Premises”), together with all improvements to be construc ed on the Leased Premises
and made
at Landlord’s sole cost and expense, pursuant to this Lease and Exhibit C attached hereto
containi ng
a part hereof (the “Improvements”), including without limitation a one-story building
Ten Thousand (10,000) net rentable square feet (the “B' ilding”), al | appurtenant easements and
for Tenant’s
privileges belonging to or affecting the Leased Premises, and an outside play area
code (the
exclusive use the greater of Five Thousand (5,000) square feet, or as required by local
and located as shown on
“Playground”), The Playground must be contiguous to] the Building
Exhibit A.
1.2 Use. Tenant will use the Leased Premises for a child care center and related
limitation, hot meal,
educational, enrichment and child businesses and activities, including, without
Use”).
snack service and birthday parties, and for any other lawful purpose (the “Permitted
13 Ownership. Landlord and Tenant acknowledge that at the time of execution of this
to the
Lease, Landlord has not acquired fee title to the Land. If|Landlord has not acquired fee title
s, with no further
Land on or before August 1, 2015, this Lease will terminate of its own provision
the other
action required by cither party hereto, and with neither party having any obligation to
of this Lease.
under this Lease, except for any obligations that expressly survive the termination
Landlord represents and warrants that has the legal authority to enter into this Lease with Tenant
make
and the expertise and financial ability to construct the Improvements. Landlord shall timely
trust on the Leased
all payments required to be made under the terms of any| mortgage or deed of
Premises.
ARTICLE I
TERM
term
21 Initial Term and Commencement Date. This Lease shall be for an initial
te of Occupan cy for
| (Initial Term’) beginning on the date an unconditional and permanent Certifica
to Tenant (the
| the Leased Premises expressly allowing 1 he Permitted Use (the “CO”) is delivered
and ninety two
| “Commencement Date”), and expiring on the last day off the month one hundred
(such date, the
| (192) months after the Rent Commencement Date (as defined in Section 3.1 below)
| “Expiration Date”). The term "Lease Year" shall mean the successive periods of twelve (12) full
| calendar months each beginning on the Rent Commencement Date (or the anniversary thereof) and
| ending one (1) year later.
the
2.2 Tenant’s Early Entry. Tenant may, within) thirty (30) days prior to the date that
(defined below),
CO is anticipated to be issued, without incurring any liability for payment of Rent
fixtures in the Leased Premises. Tenant shall
install its personal property, equipment and trade
the Leased Premises to perform such work. Such early entry shall be at Tenant’s
teceive a key
s Work (as defined in Exhibit
sole risk and expense and shall not materially interfere with Landlord’
create an
C attached hereto). Prior to the early entry, the parties shall conduct a walkthrough and
of
initial punch list, which will be signed by the parti es, |and Tenant shall provide certificates
insurance to Landlord evidencing that Tenant has obtained the coverages required under Section 6.1
below. \
|
As long as no Event of Default then exists under this Lease,
2.3 ions to Extend,
Options Extend,
Tenant will have the irrevocable option to extend the Initial Term for two (2)
additional peri ods of |
five (5) years each (each, an “Option Term”), commencing on the day following the last day of the
at |
then applicable term. Tenant will exercise an Option Term by giving Landlord written notice
or of the Option Term _
least one hundred eighty (180) days prior to the expiratio! of the Initial Term
ce with
then in effect,as applicable. The Base Rent during each|Option Term shall be in accordan
s of this
Section 3.1 below, and except for such adjustment to Base Rent, all terms and condition
Initial Term and each
Lease shall apply to each Option Term. “Term” shall mean, collectively, the
Option Term, if any.
ARTICLE III
RENT AND OTHER SUM$ PAYABLE
3.1 Base Rent.
(a) The Base Rent has been agreed to based upon the amount of interior square |
of the building |
footage of the Building only, as measured from the center line of the exterior walls
of Base Rent).
i.e. the square footage of the Playground shall not be included in the determination
sixty (60) days |
Unless otherwise provided for herein, the “Rent Commencement Date” shall occur
Tenant shall pay
following the Commencement Date. Beginning on the Rent Commencement Date,
following schedule:
Landlord base rent (the “Base Rent”) for the Leased Premises pursuant to the
|
3
Annual
| Year baci Sq Ft Rent Monthly Increase
$24.00 $240,000.00 $20,000.00 0.00%
$24.00 $240,000.00, $20,000.00 0.00%
3 $24.00 $240,000.00 $20,000.00 0.00%
$24.00 $240,000.00 $20,000.00 0.00%
$24.00 $240,000.00, $20,000.00 0.00%
$26.40 $264,000.00 $22,000.00 10.00%
$26.40 $264,000.00 $22,000.00 0.00%
$26.40 $264,000.00 $22,000.00 0.00%
$26.40 $264,000.00 $22,000.00 0.00%
10 $26.40 $264,000.00 $22,000.00 0.00%
lh $29.04 $290,400.00 $24,200.00 10.00%
12 $29.04 $290,400.00 $24,200.00 0.00%
13 $29.04 $290,400.00 $24,200.00 0.00%
14 $29.04 $290,400.00 $24,200.00 0.00%
15 $29.04 $290,400.00 $24,200.00 0.00%
16 $29.04 $290,400.00 $24,200.00 0.00%
Option Term #1)
17 $31.94 $319,440.00 $26,620.00 10.00%
18 $31.94 $319,440.00 $26,620.00 10.00%
19 $31.94 $319,440.00 $26,620.00 10.00%
20 $31.94 $319,440.00 $26,620.00 10.00%
21 $31.94 $319,440.00 | $26,620.00 10.00%
Option Term #2,
22 $35.13 $351,340.00 $29,278.33 10.00%
23 $35.13 $351,340.00 $29,278.33 0.00%
24 $35.13 $351,340.00 $29,278.33 0.00%
| 25 $35.13 $351,340.00 $29,278.33 0.00%
| 26 $35.13 $351,340.00 $29,278.33 0.00%
* Subject to Section 3.2
(b)Base Rent will be due in equal monthly installments in advance, without
demand, on the first (1st) day of each and every calendar month during the Term, and shall be
late if not received on or before the tenth (10th) day of t month (the "Delinquency Date"). Any
sums other than Base Rent which Tenant is required to pay to Landlord under this Lease shall be _
regarded as “Additional Rent.” The term “Rent” shall mean and include Base Rent and Additional
| Rent. | ||
|
4
32 Rent Concession,
|
ion
(a) Notwithstanding Section 3.1 above, Tenant shall receive a rent concess
Rent Commencement
( “Rent Concession”) during the first twelve (12) months following the
greater of the following
‘Date, during which period Tenant shall pay as mont hly [Base Rent the
amounts:
@) sixteen percent (16%) of Tenant’s “Monthly Gross Revenue” (the
the Base
“Percentage Rent ”), provided at no time shall such Percentage Rent payment exceed
Year had no Rent
Rent that would have otherwise been paya ble during the first Lease
Concession been provided; or
Gi) Minimum payments of Base Rent pursuant to the following “Rent
Concession Schedule”:
Month 15% 3,000.00
Month 20% 4,000.00
Month 25% 5,000.00
Month 30% 6,000.00
Month 40% 8,000.00
Month 45% 9,000.00
Month 55% 1,000.00
Month 60% 2,000.00
Month 10% 4,000.00
Month 10 75% 5,000.00
Month 11 80% 6,000.00
Month 12 85% 7,000.00
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|
(b)The above Rent Concession Schedule shall commence on the first full
Date shall occur
month following the Rent Commencement Date. If the Rent Commencement
partial month shall be
on a day other than the first day of the month, the Base Rent for that
prorated as follows:
@ If the Rent Commencement Date occurs on the twentieth day of |
based upon the first |
the month or later, then the Base Rent for that partial month shall be prorated
for the following
month’s Rent as set forth in Section 3.2(a)(ii) above and the Base Rent owed
ion Schedul e set forth
month will be the “Month One” Base Rent as reflected in the Rent Concess
in Section 3.2(a)(Gi) above.
If the Rent Co mmencement Date occurs on the nineteenth day of |
seicape
(ii) |
as reflected
the month or earlier, the proration shall be based upon the “Month One” Base Rent
above and the Base Rent owed for |
in the Rent Concession Schedule set forth in Section 3.2(a
Rent Concession |
the following month will be the “Month Two” Base Rent as reflected in the
Schedule set forth in Section 3.2(a)(ii) above.
|
5
(c) For purposes of this Lease, the term “Monthly Gross Revenue” shall mean
ant’s business in the
the total collected dollar amount of all charges from the operation of Ten
Leased Premises during a calendar month, including thout limitation charges for services
provided or the sale of goods of every sort whatsoever, whether such business be evidenced by
g any and
check, credit, credit card charge, charge account, exchange or otherwise, but excludin
d and paid to a taxing
all refundable registration deposits, uncollectible debts, taxes collecte
will not exceed three
authority, and tuition credits for staff children, provided such tuition credits
percent (3%) percent of Monthly Gross Revenue.
|(dd) Within twenty (20) days following the end of each month during the first
by Tenant to be
Lease Year, Tenant shall furnish to Landlord a written statement, certified
correct, setting forth the Monthly Gross Revenue for the prior month. In the event that the
the difference to
Percentage Rent exceeds the Rent Concession Schedule|rent, Tenant shall pay
Landlord along with the written statement.
the first Lease Year, Tenant shall maintain records of Monthly
(©) During
Gross Revenues in accordance with its customary accounting procedures. Landlord and its duly
shall have
authorized representative or Lenders, on reasonable notice during business hours,
of inspecting and
access to such records at the place where the same are|kept, for the purpose
not divulge to
auditing the same. Landlord shall keep such information in strict confidence and
tatives from such
any person or entity the information obtained by Landlord or its represen
Landlord’s rights
records or from the above statements, except as may be necessary to enforce
under this Lease.
more shall
3.3 Interest and Late Charges. All payments past due for thirty (30) days or
Date to the date of
bear interest at a rate of ten percent (10%), calculated from the Delinquency
fifteen(15) Business
payment. In the event that any installment of Base Rent is not received within
pay an administrative
Days after receipt of written notice of such required pay} ent, Tenant shall
late charge (“Late Ch arge”) equal to two percent (2%) o such amount due for each late payment.
check returned for
Tenant shall also pay an administrative charge © f Fifty Dollars ($50.00) for each
any reason.
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ARTICLE IV
COSTS AND EXPENSES
Preview
CAUSE NO. SUGAR LAND CUBED, LLC IN THE DISTRICT COURT Plaintiff OF FORT BEND COUNTY, TEXAS THE LEARNING EXPERIENCE, CORP. Defendant JUDICIAL DISTRICT PLAINTIFF’ ORIGINAL PETITION TO THE HONORABLE JUDGE OF SAID COURT: COMES NOW, Sugar Land Cubed, LLC — Plaintiff’ or “Landlord”), and files this its Original Petition against The Learning Experience Corp. (“Defendant” or “Guarantor”) and, in support thereof, respectfully shows the Court the following: DISCOVERY CONTROL PLAN Plaintiff intend to conduct discovery under Level 2 of Texas Rule of Civil Procedure CLAIM FOR RELIEF Plaintiff seeks monetary relief of over $200,000 but not more than $1,000,000 including damages of any kind, penalties, costs, expenses, pre and post judgment interest, and attorney’s fees. Tex. R. Civ. P. 47(¢). PARTIES Plaintiff, Sugar Land Cubed, LLC, is a limited liability company organized and operating under the laws of the state of Texas, having its principal place of business at 1999 Bryan Street, Suite 900, Dallas, Texas, 75201. LAINTIFF RIGINAL ETITION Page 4 Defendant, The Learning Experience Corp., is a corporation organized and operating under the laws of the state of Delaware, having its principal place of business at 210 Hillsboro Technology Drive, Deerfield Beach, Florida, 33441. Defendant has not designated a registered agent in the State of Texas. Pursuant to Tex. Bus. Org. Code §§ 5.251 and 5.252, service can be effectuated by service of process on the Texas Secretary of State, P.O. Box 12079, Austin, Texas, 78711-2079, who is requested to forward same, certified mail, return receipt requested, to the chief executive officer, president, or vice-president of Defendant at its principal place of business. Iv. JURISDICTION AND VENUE . 5. This Court has jurisdiction over the subject matter of this dispute because Plaintiff seeks monetary damages in excess of the Court’s minimum jurisdictional limits. 6. This Court has jurisdiction over the parties to this dispute because all parties do business in Texas as the term “doing business” is understood under Texas law and because all or a substantial portion of events giving rise to this lawsuit arose from business occurring in Fort Bend County, Texas. 7. Venue is proper in Fort Bend County, Texas under Section 15.002 of the Texas Civil Practice and Remedies Code because all or a substantial portion of events or omissions giving rise to this lawsuit occurred in Fort Bend County, Texas. 8. Jurisdiction and venue are also proper in this Court because the lease agreement and guaranty made the basis of this lawsuit stipulate, in relevant part, that “[e]Jach party irrevocably submits to the exclusive jurisdiction and venue of the state courts of the State [of Texas] and waives any objection to the jurisdiction and venue of such courts. ol ' See Exhibit A, Lease § 19.12 (p. 26). PLAINTIFF’S ORIGINAL PETITION Page 2 of 12 Vv NATURE OF THE ACTION 9. This action arises from Defendant’s breach of a guaranty agreement whereby Defendant guaranteed the payment of rent on certain leased premises in Fort Bend County, Texas. VI. FACTUAL BACKGROUND A The Original Lease Agreement 10. On November 24, 2014, Landlord’s predecessor in interest, Spring Daycare, LLC (“Spring”), and TLE at Sugar Land, LLC (“Tenant”)—a wholly owned subsidiary of Guarantor— entered into a lease agreement (“Lease”) whereby Spring agreed to lease to Tenant, at some future date, commercial real estate located at the intersection of West Airport Road and Old Richmond Road in Sugar Land, Texas, 77498 (“Property”) for the operation of Tenant’s child care center business. 11. Notably, Spring and Tenant both acknowledged that as of the date of the Lease’s execution, Spring did not possess fee title to the Property, though it did have legal authority to enter the Lease.* In the event that Spring could not acquire title to the Property by August 1, 2015, the Lease would terminate and neither party would have any obligation to the other. Under the express terms of the Lease, the 192-month lease term would only begin sixty days after an unconditional and permanent Certificate of Occupancy expressly allowing Tenant’s planned use of the premises was delivered to Tenant.* 12. The express terms of the Lease provided narrow instances where Tenant would have the option of terminating the Lease. Under its terms, Tenant could not terminate the Lease at will, but only in cases involving conditions such as Landlord’s negligent upkeep of utility services, presence of hazardous substances, condemnation of the property, and casualty loss. The Lease also set forth 2 See id. § 1.3 (p. 2). 3 See id. § 2.1 (p. 3). 4 See, eg, id. §§ 9.1 and 9.2 (pp. 14-15). PLAINTIFF’S ORIGINAL PETITION Page 3 of 12 events constituting Tenant’s default. Such events included, among others, Tenant’s failure to pay, within fifteen days after written notice thereof, any installment of rent.° B. The Original Guaranty 13. To induce Landlord’s predecessor in interest to enter into the Lease with Tenant, Guarantor, as parent company of Tenant, executed a Guaranty of Rent dated November 24, 2014 (“Guaranty”). The Guaranty was included and attached to the Lease as “Exhibit E.’” 14, Under the terms of the Guaranty, Guarantor guaranteed to Spring, its successors and assigns, the timely payment of all monetary obligations of rent as and when due pursuant to the Lease. The Guaranty further stipulated that a maximum liability amount of $500,000 in the aggregate be imposed against Guarantor. As agreed to by Guarantor, this maximum liability amount was scheduled to periodically reduce in $100,000 increments with each passing anniversary of the date on which the Lease took effect, until such time as the balance of the maximum liability amount reached zero. In other words, the Guaranty was expressly intended to guarantee payment of five years of rent under the lease. By signing the Guaranty, Guarantor thus assumed responsibility for, amongst other things, meeting the rent obligations of Tenant (obligations which became owed by Tenant not at the time of the Lease’s signing but only after six y days had elapsed from Tenant’s receipt of a Certificate of Occupancy) and accepted the benefit of a diminishing maximum liability amount in exchange for such assumption of responsibility. Cc. The Lease Became Effective October 21, 2017 15. Spring ultimately did acquire fee title to the Property by August 1, 2015, thereby ensuring that the Lease did not terminate under its own provisions. On August 22, 2017, the requisite Certificate of Occupancy was delivered to Tenant, thus triggering, in accordance with the provisions 5 See id. § 7-1 (pp. 10-11). 6 See id. at Exhibit E (p. 45). PLAINTIFF’S ORIGINAL PETITION Page 4 of 12 of the Lease agreed to by Spring and Tenant, the sixty-day countdown until the Lease’s 192-month term took effect. As a result, the Lease became effective on October 21, 2017. In accordance with the provisions of the Lease, rent payments became due on the first day of each and every calendar month during the lease term and would be considered late if not received on or before the tenth day of the month.” D. Subsequent Assignments and Acquisitions of the Lease 16. On September 8, 2017, just over one month prior to the Lease becoming effective, Tenant, in accordance with the Lease’s provisions, assigned its lease to First Step Investments, LLC (“First Step”). This assignment occurred as part of a franchisor-franchisee deal whereby First Step would operate a franchise location of Guarantor at the Property. The nature of the assignment required, first, that Tenant agree to remain a party to the Lease and to assume responsibility for the Property under the Lease if First Step failed to meet its obligations.* The assignment also required that First Step be required to pay Guarantor a monthly fee in exchange for Guarantor’s continued guarantee of rent obligation to Landlord’s predecessor in interest. Shortly following the assignment, First Step failed to meet its obligations under the franchise arrangement and the Lease. 17. In late 2017, Landlord agreed to purchase the Property from Doud Land Company, LLC (“Doud”), builder and developer of the Property and parent company of Spring. This deal closed on January 19, 2018. In accordance with the Lease’s provisions, proper notice was given to all parties in interest, including Tenant and Guarantor. 7 See id. § 3.1(b) (p. 4). 8 See id. § 10.1 (a) (p. 15) (“Upon any such assignment or sublet, Tenant shall not be relieved of any of its obligations under this Lease.” (emphasis in original). PLAINTIFF’S ORIGINAL PETITION Page 5 of 12 Doud Land Co., LLC The Learning Experience Corp. (Parent) (Parent/Guarantor) Lease signed 11/24/2014 Spring Daycare, LLC TLE at Sugar Land, LLC (Subsidiary) Lease effective 10/21/2017 (Subsidiary/Tenant) T T Property sold Lease assigned 01/19/2018 09/08/2017" | ! Sugar Land Cubed, LLC (Landlord) First Step Investments, LLC E Third Amendment to Lease/Guaranty 18. In response to the COVID-19 pandemic and the unprecedented challenges imposed by it on individuals and businesses alike, Landlord, Tenant, and Guarantor determined that an amendment to the Lease was necessary. On June 23, 2020, Landlord, Tenant, and Guarantor executed the Third Amendment to Lease (“Third Amendment”)? modifying provisions of the Lease which governed Tenant’s payment schedule and Guarantor’s obligations. 19. Specifically, the Third Amendment mandated, in relevant part, that: For April 2020 and May 2020: (i) Landlord shall abate $10,000 of monthly base rent ($20,000) for each month; (ii) Landlord shall defer $6,000 of the remaining $10,000 monthly balance for each month; and (iii) Tenant shall pay $4,000 for each month; For June 2020 through and including December 2020: (i) Tenant shall pay to Landlord, monthly, an amended rent equal to the greater of $10,000 or the sum of 29% of gross monthly sales for the month minus $3,137.75; (ii) Amount of deferred rent for each month shall be determined by the difference between monthly base rent ($20,000) and ° The Lease was first amended on September 27, 2017 and the second amendment occurred on October, 11, 2017. However, only the Thitd Amendment is relevant for purposes of this lawsuit. PLAINTIFF’S ORIGINAL PETITION Page 6 of 12 monthly rent paid for each month; and (iii) Tenant shall resume paying full monthly base rent, pursuant to the terms of the Lease, in January 2021; Deferred rent shall be amortized over twenty-four months with Tenant beginning payment in September 2021 and concluding on August 31, 2023, or such earlier date in which Tenant has repaid the deferred rent in full; Guarantor’s maximum liability under the Guaranty shall be limited to the remaining value of the Guaranty—however, for the remainder of the Guaranty, Guarantor shall also guaranty payment of deferred rent, ot any then-outstanding balance thereof, until such has been repaid in full; further, upon expiration of the Guaranty, pursuant to its terms, the only remaining sum then being guaranteed is the then- remaining balance outstanding of deferred rent (emphasis added); and Landlord, Tenant, and Guarantor affirm all provisions of the Lease and Guaranty that were not expressly modified by the Third Amendment." 20. Therefore, as provided for by the Third Amendment’s modifications to the Lease, executed in June 2020, Guarantor acknowledged and accepted, first, that it assumed responsibility for payment of Tenant’s deferred rent accumulated from April 2020 through and including December 2020 and, more importantly, that the Guaranty had not yet expired. F Tenant’s Wrongful Termination of Lease and Subsequent Default 21. On November 2, 2020, Tenant’s Senior Vice-President, Anne Ewing (“Ewing”), emailed Landlord’s manager, Corey Schneider (“Schneider”), informing him that Tenant’s child care center business was failing and that Tenant had made the decision to shut the business down. During a follow up phone call between Ewing and Schneider, Ewing elaborated on the decision to close the 10 See Exhibit B, Third Amendment. PLAINTIFF’S ORIGINAL PETITION Page 7 of 12 business and informed Schneider that Tenant wished to have the Property turned over to Landlord. Importantly, Ewing further acknowledged that the Guaranty obligating Guarantor to cover Tenant’s missed rent payments and deferred rent was still active and had not yet expired. During these conversations, Schneider informed Ewing that Tenant could not terminate the Lease at will in such fashion and that Tenant’s plans to stop paying rent and maintaining the Property would constitute default under the Lease. 22. Although Ewing informed Schneider of Tenant’s desire to terminate the Lease on November 2, 2020—coincidentally just a few days past the anniversary of the date on which the Lease took effect—Tenant’s decision to wrongfully back out of the Lease was in fact made well in advance of this date. By as early as September 2020, Tenant had devoted considerable time and effort towards removing its belongings from the Property, including trademark property, exterior signage, interior fixtures, and other supplies, equipment, and inventory used as part of its business. Moreover, Tenant made several attempts to repair various areas of the Property that had been damaged in the course of Tenant’s business operations. Such conduct taken prior to Tenant’s decision to notify Landlord of its desire to terminate the remaining 156 months of the original 192-month Lease term indicates that Tenant had no intention of making any further rent payments and was only biding its time until the anniversary of the date on which the Lease took effect so that Guarantor’s maximum liability amount would decrease by another $100,000. 23. Sure enough, on November 10, 2020, Tenant became delinquent under the terms of the Lease for failure to pay rent for the month of November. On November 11, 2020, Landlord, through counsel, sent a “Notice of Tenant Default and Notice to Vacate” letter (“Notice of Default”) to Tenant and Guarantor. " The Notice of Default constituted formal notice to Tenant regarding 1 See Exhibit C, Notice of Default. PLAINTIFF’S ORIGINAL PETITION Page 8 of 12 Tenant’s default for failure to timely pay rent and Tenant’s expressed, anticipatory further breach of the Lease by Tenant’s written notice to Landlord that it did not plan on making any future rent payments or maintaining the Property. The Notice of Default also informed Tenant that if it failed to pay the rent arrearages and repudiate its anticipatory breach within fifteen days, Landlord would order Tenant to vacate the Property and would commence necessary proceedings against Tenant and Guarantor. G Guarantor’s Breach of Guaranty 24. On December 16, 2020, in response to Tenant and Guarantotr’s failure to respond to the Notice of Default sent over a month prior, Landlord, through counsel, sent a “Demand for Payment Under Lease & Guaranty” letter (“Demand for Payment”) to Tenant and Guarantor.'? The Demand for Payment reminded Tenant and Guarantor that Tenant owed Landlord $109,739.29 in rent as contemplated by the Lease and the Third Amendment. The Demand for Payment further reminded Guarantor that it was likewise obligated to Landlord for this rent under the Guaranty. The Demand for Payment also informed Tenant and Guarantor that Landlord had, in accordance with the provisions of the Lease, accelerated all rent amounts due under the Lease such that the current rent amount owed to Landlord is $3,080,000. Finally, the Demand for Payment instructed Tenant and Guarantor to pay their respective amounts owed to Landlord by close of business on December 28, 2020. 25. To date, Tenant and Guarantor have failed to pay Landlord any amount of their respective amounts owed. Despite Landlord’s repeated attempts to resolve this matter, Tenant and Guarantor have refrained from engaging in good faith discussions with Landlord. Tenant owes Landlord $3,190,137.08. Guarantor owes Landlord $310,677." 12 See Exhibit D, Demand for Payment. '3 Guarantor’s original maximum liability amount of $500,000 has been reduced to $200,000 under the Lease because three years have elapsed between the date the Lease took effect (October 21, 2017) and the date of Tenant’s default (November PLAINTIFF’S ORIGINAL PETITION Page 9 of 12 VII. CAUSE OF ACTION - BREACH OF CONTRACT 26. Landlord realleges the foregoing paragraphs and incorporates them here as if fully set forth herein. 27. The Lease and Guaranty, as amended by the Third Amendment, are valid, enforceable written contracts. As contemplated by Landlord’s, Tenant’s, and Guarantor’s intent, as well as by their conduct and actions following execution of the Lease and Guaranty, the Lease became effective no earlier than October 21, 2017 and thus the Guaranty has not yet expired. 28. Landlord is a proper party to sue for Guarantor’s breach of the Guaranty. 29. Guarantor is a proper party to be sued for its breach of the Guaranty. 30. Landlord performed, tendered performance of, or was excused from performing its obligations under the Lease and Guaranty, as amended by the Third Amendment. 31. Guarantor breached the Guaranty by failing to pay all amounts, including Tenant’s rent arrearages and deferred rent, due and owing by Tenant to Landlord under the Lease. This is one of Guarantor’s obligations under the Guaranty, and Guarantor breached the Guaranty by not paying Landlord such amounts. 32. Guarantor’s breach of its obligations under the Guaranty have caused injury and damages to Landlord, for which Landlord now sues Guarantor. 33. As a direct and proximate result of Guarantot’s breach of the Guaranty, Landlord has suffered, and will continue to suffer, damages in an amount that, as of April 15, 2021, is not less than $310,677, not including pre- and post-judgment interest, reasonable and necessary attorney’s fees, and court costs. Such damages, interest, attorney’s fees, and costs—for which Guarantor is responsible under the Guaranty- vill continue to increase as this litigation proceeds. 2, 2020). However, an additional $82,000 in deferred rent and $28,677 in taxes, interest, and late fees is also owed by Guarantor under the Third Amendment. PLAINTIFF’S ORIGINAL PETITION Page 10 of 12 34. Landlord is entitled to recover from Guarantor pre- and post-judgment interest at the highest rates allowable under the law and/or the Lease and Guaranty. 35. Landlord is entitled under the Guaranty and under applicable law to recover from Guarantors the reasonable and necessary attorney’s fees, expenses, and court costs incurred by Landlord. See, e.g., Lease § 19.3; Lease Exhibit E; Tex. Civ. Prac. & Rem. Code § 38.001. With regard to attorney’s fees, Landlord has incurred and will continue to incur attorney’s fees related to this dispute and lawsuit. Landlord seeks to recover from Guarantor the reasonable and necessary attorney’s fees, expenses, and court costs incurred by Landlord, as are equitable and just, including those incurred as a result of trial and/or prosecuting or defending any appeal. VIII. CONDITIONS PRECEDENT 36. All conditions precedent to Landlord’s claims for relief have been performed or have occurred as required by Tex. R. Civ. P. 54. IX. URY DEMAND 37. Pursuant to Tex. R. Civ. P. 216, Landlord demands a trial by jury for all issues so triable. xX. PRAYER WHEREFORE, PREMISES CONSIDERED, Landlord respectfully requests that Guarantor be cited to appear and answer, and that Landlord be granted judgment and recovery from Guarantor, as follows: Actual damages, as described above; b Pre- and post-judgment interest at the highest rates allowable; Reasonable and necessary attorney’s fees and expenses incurred by Landlord; Costs of suit; and Such other and further relief to which Landlord may show itself to be justly entitled. PLAINTIFF’S ORIGINAL PETITION Page 11 of 12 Respectfully submitted, DANIELS & TREDENNICK, PLLC By: /s/ Douglas A. Daniels Douglas A. Daniels Texas State Bar No. 0079379 doug.daniels@dtlawyers.com Richard A. Alvarado Texas State Bar No. 24120686 tick@dtlawyers.com 6363 Woodway Dr., Suite 700 Houston, Texas 77057 (713) 917-0024 (Telephone) (713) 917-0026 (Facsimile) COUNSEL FOR PLAINTIFF PLAINTIFF’S ORIGINAL PETITION Page 12 of 12 EXHIBIT A = GENERAL LEASE INFOR ATION } SITE NUMBER 1429-TX | SITE ADDRESS: West Airport Road and Old Richmond Road Sugar Land, Texas 77498 PERSE TLE at Sugar Land, LLC, a Delaware limited liability company BUSINESS N. (AME: The Learning| Experience® | ‘TENANT'S ADDRESS: 4855 Technology Way, Suite 700 Boca Raton, Florida 33431 TENANT'S Lt (561) 886-6400 LANDLORD: Spring Daycare, LLC, a Texas limited liability company | LANDLORD'S ADDRESS 25528 Genesee Trail Golden, Colorado 80401 Laniaemms PHONE: (303) 462-3604 EFFECTIVE DATE November 24, 2014 LEASE TERM: Sixteen (16) years OPTION TERM: Two (2) five (5) year periods each SQUARE FOOTAGE: 10,000 Building, plus 5,000 Playground INITIAL MONTHLY BASE RATE: $24.00 per square foot, subject to Section 3.2 | INITIAL MON rt BASE RENT: $20,000.00, subject to Section 3.2 Exhibit A: Site Plan Exhibit B: Form of Assignment and Assumption Agreement Exhibit C: | Landlord's Work Exhibit C-1: Tenant Signage Specifications Exhibit D: Form of Landlord’s Subordination of Lien Exhibit E: Guaranty ExhibitF: Estoppel and Commencement Date Certificate LEASE e | This LEASE (the “Lease”) is made as of the 24h day of November, 2014 (the “Effectiv d”), having \Date”) between Spring Daycare, LLC, a Texas limited liability company (the “Landlor and TLE AT its principal place of business at 7500 Rialto Blvd., Suite 250, Austin, TX 78735 having its principal SUGAR LAND, LLC, a Delaware limited liability company (the “Tenant”), place of busine: ss at 4855 Technology Way, Suite 700, Boca Raton, Florida 33431. | ARTICLE I LEASED PREMISES 1d Leased Premises. Landlord, in considerati of the rents and other sums payable by to be kept and ‘Tenant hereunder to Landlord, and the terms, covenants, conditions and agreements | performed by Tenant as hereinafter set forth, by these presents does hereby lease, demise, and let to Tenant, and Tenant hereby rents and leases from Landlord, certain premises designated as Parcel State of Texas, No. 0009-00-000-6415-907 in the City of Sugar Land, County of Fort Bend and | known as Intersection of West Airport Road )and Old Richmond Road, Sugar Land, commonly A (the “Leased Texas 77498 and more particularly shown on the site plan ‘tached hereto as Exhibit by Landlord, Premises”), together with all improvements to be construc ed on the Leased Premises and made at Landlord’s sole cost and expense, pursuant to this Lease and Exhibit C attached hereto containi ng a part hereof (the “Improvements”), including without limitation a one-story building Ten Thousand (10,000) net rentable square feet (the “B' ilding”), al | appurtenant easements and for Tenant’s privileges belonging to or affecting the Leased Premises, and an outside play area code (the exclusive use the greater of Five Thousand (5,000) square feet, or as required by local and located as shown on “Playground”), The Playground must be contiguous to] the Building Exhibit A. 1.2 Use. Tenant will use the Leased Premises for a child care center and related limitation, hot meal, educational, enrichment and child businesses and activities, including, without Use”). snack service and birthday parties, and for any other lawful purpose (the “Permitted 13 Ownership. Landlord and Tenant acknowledge that at the time of execution of this to the Lease, Landlord has not acquired fee title to the Land. If|Landlord has not acquired fee title s, with no further Land on or before August 1, 2015, this Lease will terminate of its own provision the other action required by cither party hereto, and with neither party having any obligation to of this Lease. under this Lease, except for any obligations that expressly survive the termination Landlord represents and warrants that has the legal authority to enter into this Lease with Tenant make and the expertise and financial ability to construct the Improvements. Landlord shall timely trust on the Leased all payments required to be made under the terms of any| mortgage or deed of Premises. ARTICLE I TERM term 21 Initial Term and Commencement Date. This Lease shall be for an initial te of Occupan cy for | (Initial Term’) beginning on the date an unconditional and permanent Certifica to Tenant (the | the Leased Premises expressly allowing 1 he Permitted Use (the “CO”) is delivered and ninety two | “Commencement Date”), and expiring on the last day off the month one hundred (such date, the | (192) months after the Rent Commencement Date (as defined in Section 3.1 below) | “Expiration Date”). The term "Lease Year" shall mean the successive periods of twelve (12) full | calendar months each beginning on the Rent Commencement Date (or the anniversary thereof) and | ending one (1) year later. the 2.2 Tenant’s Early Entry. Tenant may, within) thirty (30) days prior to the date that (defined below), CO is anticipated to be issued, without incurring any liability for payment of Rent fixtures in the Leased Premises. Tenant shall install its personal property, equipment and trade the Leased Premises to perform such work. Such early entry shall be at Tenant’s teceive a key s Work (as defined in Exhibit sole risk and expense and shall not materially interfere with Landlord’ create an C attached hereto). Prior to the early entry, the parties shall conduct a walkthrough and of initial punch list, which will be signed by the parti es, |and Tenant shall provide certificates insurance to Landlord evidencing that Tenant has obtained the coverages required under Section 6.1 below. \ | As long as no Event of Default then exists under this Lease, 2.3 ions to Extend, Options Extend, Tenant will have the irrevocable option to extend the Initial Term for two (2) additional peri ods of | five (5) years each (each, an “Option Term”), commencing on the day following the last day of the at | then applicable term. Tenant will exercise an Option Term by giving Landlord written notice or of the Option Term _ least one hundred eighty (180) days prior to the expiratio! of the Initial Term ce with then in effect,as applicable. The Base Rent during each|Option Term shall be in accordan s of this Section 3.1 below, and except for such adjustment to Base Rent, all terms and condition Initial Term and each Lease shall apply to each Option Term. “Term” shall mean, collectively, the Option Term, if any. ARTICLE III RENT AND OTHER SUM$ PAYABLE 3.1 Base Rent. (a) The Base Rent has been agreed to based upon the amount of interior square | of the building | footage of the Building only, as measured from the center line of the exterior walls of Base Rent). i.e. the square footage of the Playground shall not be included in the determination sixty (60) days | Unless otherwise provided for herein, the “Rent Commencement Date” shall occur Tenant shall pay following the Commencement Date. Beginning on the Rent Commencement Date, following schedule: Landlord base rent (the “Base Rent”) for the Leased Premises pursuant to the | 3 Annual | Year baci Sq Ft Rent Monthly Increase $24.00 $240,000.00 $20,000.00 0.00% $24.00 $240,000.00, $20,000.00 0.00% 3 $24.00 $240,000.00 $20,000.00 0.00% $24.00 $240,000.00 $20,000.00 0.00% $24.00 $240,000.00, $20,000.00 0.00% $26.40 $264,000.00 $22,000.00 10.00% $26.40 $264,000.00 $22,000.00 0.00% $26.40 $264,000.00 $22,000.00 0.00% $26.40 $264,000.00 $22,000.00 0.00% 10 $26.40 $264,000.00 $22,000.00 0.00% lh $29.04 $290,400.00 $24,200.00 10.00% 12 $29.04 $290,400.00 $24,200.00 0.00% 13 $29.04 $290,400.00 $24,200.00 0.00% 14 $29.04 $290,400.00 $24,200.00 0.00% 15 $29.04 $290,400.00 $24,200.00 0.00% 16 $29.04 $290,400.00 $24,200.00 0.00% Option Term #1) 17 $31.94 $319,440.00 $26,620.00 10.00% 18 $31.94 $319,440.00 $26,620.00 10.00% 19 $31.94 $319,440.00 $26,620.00 10.00% 20 $31.94 $319,440.00 $26,620.00 10.00% 21 $31.94 $319,440.00 | $26,620.00 10.00% Option Term #2, 22 $35.13 $351,340.00 $29,278.33 10.00% 23 $35.13 $351,340.00 $29,278.33 0.00% 24 $35.13 $351,340.00 $29,278.33 0.00% | 25 $35.13 $351,340.00 $29,278.33 0.00% | 26 $35.13 $351,340.00 $29,278.33 0.00% * Subject to Section 3.2 (b)Base Rent will be due in equal monthly installments in advance, without demand, on the first (1st) day of each and every calendar month during the Term, and shall be late if not received on or before the tenth (10th) day of t month (the "Delinquency Date"). Any sums other than Base Rent which Tenant is required to pay to Landlord under this Lease shall be _ regarded as “Additional Rent.” The term “Rent” shall mean and include Base Rent and Additional | Rent. | || | 4 32 Rent Concession, | ion (a) Notwithstanding Section 3.1 above, Tenant shall receive a rent concess Rent Commencement ( “Rent Concession”) during the first twelve (12) months following the greater of the following ‘Date, during which period Tenant shall pay as mont hly [Base Rent the amounts: @) sixteen percent (16%) of Tenant’s “Monthly Gross Revenue” (the the Base “Percentage Rent ”), provided at no time shall such Percentage Rent payment exceed Year had no Rent Rent that would have otherwise been paya ble during the first Lease Concession been provided; or Gi) Minimum payments of Base Rent pursuant to the following “Rent Concession Schedule”: Month 15% 3,000.00 Month 20% 4,000.00 Month 25% 5,000.00 Month 30% 6,000.00 Month 40% 8,000.00 Month 45% 9,000.00 Month 55% 1,000.00 Month 60% 2,000.00 Month 10% 4,000.00 Month 10 75% 5,000.00 Month 11 80% 6,000.00 Month 12 85% 7,000.00 | | (b)The above Rent Concession Schedule shall commence on the first full Date shall occur month following the Rent Commencement Date. If the Rent Commencement partial month shall be on a day other than the first day of the month, the Base Rent for that prorated as follows: @ If the Rent Commencement Date occurs on the twentieth day of | based upon the first | the month or later, then the Base Rent for that partial month shall be prorated for the following month’s Rent as set forth in Section 3.2(a)(ii) above and the Base Rent owed ion Schedul e set forth month will be the “Month One” Base Rent as reflected in the Rent Concess in Section 3.2(a)(Gi) above. If the Rent Co mmencement Date occurs on the nineteenth day of | seicape (ii) | as reflected the month or earlier, the proration shall be based upon the “Month One” Base Rent above and the Base Rent owed for | in the Rent Concession Schedule set forth in Section 3.2(a Rent Concession | the following month will be the “Month Two” Base Rent as reflected in the Schedule set forth in Section 3.2(a)(ii) above. | 5 (c) For purposes of this Lease, the term “Monthly Gross Revenue” shall mean ant’s business in the the total collected dollar amount of all charges from the operation of Ten Leased Premises during a calendar month, including thout limitation charges for services provided or the sale of goods of every sort whatsoever, whether such business be evidenced by g any and check, credit, credit card charge, charge account, exchange or otherwise, but excludin d and paid to a taxing all refundable registration deposits, uncollectible debts, taxes collecte will not exceed three authority, and tuition credits for staff children, provided such tuition credits percent (3%) percent of Monthly Gross Revenue. |(dd) Within twenty (20) days following the end of each month during the first by Tenant to be Lease Year, Tenant shall furnish to Landlord a written statement, certified correct, setting forth the Monthly Gross Revenue for the prior month. In the event that the the difference to Percentage Rent exceeds the Rent Concession Schedule|rent, Tenant shall pay Landlord along with the written statement. the first Lease Year, Tenant shall maintain records of Monthly (©) During Gross Revenues in accordance with its customary accounting procedures. Landlord and its duly shall have authorized representative or Lenders, on reasonable notice during business hours, of inspecting and access to such records at the place where the same are|kept, for the purpose not divulge to auditing the same. Landlord shall keep such information in strict confidence and tatives from such any person or entity the information obtained by Landlord or its represen Landlord’s rights records or from the above statements, except as may be necessary to enforce under this Lease. more shall 3.3 Interest and Late Charges. All payments past due for thirty (30) days or Date to the date of bear interest at a rate of ten percent (10%), calculated from the Delinquency fifteen(15) Business payment. In the event that any installment of Base Rent is not received within pay an administrative Days after receipt of written notice of such required pay} ent, Tenant shall late charge (“Late Ch arge”) equal to two percent (2%) o such amount due for each late payment. check returned for Tenant shall also pay an administrative charge © f Fifty Dollars ($50.00) for each any reason. | ARTICLE IV COSTS AND EXPENSES