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CAUSE NO. 21 -283314
SUGAR LAND CUBED, LLC, IN THE DISTRICT COURT
Plaintiff
JUDICIAL DISTRICT
THE LEARNING EXPERIENCE
CORP.,
Defendant FORT BEND COUNTY, TEXAS
THE LEARNING EXPERIENCE, CORP.’S
FIRST AMENDEDANSWER, AFFIRMATIVE DEFENSES, AND COUNTERCLAIM S
Defendant The Learning Experience Corp. ( en— or “Defendant files its First
Amended Answer, Affirmative Defenses, and Counterclaims against Sugar Land Cubed, LLC
Sugar Land” or “Plaintiff, and respectfully shows the Court the following:
FIRST AMENDED ANSWER AND AFFIRMATIVE DEFENSES
GENERAL DENIAL
In accordance with the rights granted Defendant by Rule 92 of the Texas Rules of Civil
Procedure, Defendant generally denies each and every, all and singular, material allegation
contained in Plaintiff's Original Petition and demands that Plaintiffbe required to prove its charges
and allegations against Defendant as required by the Constitution and the laws of the State of
Texas.
AFFIRMATIVE DEFENSES
Except to the extent expressly admitted herein, Defendant denies the material
allegations of the Petition and demands strict proof thereof.
Plaintiff's claims are barred, in whole or in part, because they fail to state a cause
of action upon which relief may be granted.
Plaintiff has alleged only conclusions of law and formulaic recitations of the
elements of its claims without adequate supporting facts, details, or events to support such
elements.
Plaintiff's claims may be barred, in whole or in part, by the applicable statutes of
limitations and/or are otherwise untimely.
Plaintiff's claims are barred, in whole or in part, because any losses Plaintiff has
sustained or will sustain are due to Plaintiff's own failures and omissions and Plaintiff's own
conduct or negligence
Plaintiff's claims and/or damages may be limited by the after acquired evidence
doctrine.
Plaintiff's claims may be barred, in whole or in part, by the doctrines of unclean
hands, laches, estoppel, ratification, acquiescence, consent, agreement, accord and satisfaction,
release, payment, and/or waiver.
Plaintiff is precluded from any recovery because Plaintiff has not suffered any
damages or any legally recognizable injury and/or the damages Plaintiff seeks are speculative and
not recoverable as a matter of law.
Parol evidence is inadmissible to vary the clear and unambiguous terms of the
ntract at issue.
Plaintiff's claims are barred, in whole or in part, by the Statute of Frauds.
Plaintiff has failed to mitigate its damages, if any.
Defendant’s conduct as alleged in the Petition was undertaken in good faith.
Plaintiff's claims are barred,in whole or in part, for failure of consideration.
Plaintiff's claims are barred, in whole or in part, because of frustration of purpose.
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Plaintiff's claims are barred, in whole or in part, because of impracticability of
performance.
Plaintiff's claims are barred, in whole or in part, because of unclean hands.
Plaintiff's claims are barred, in whole or in part, because of
offset/setoff/recoupment/credit.
Plaintiff's claims are barred, in whole or in part, because of Plaintiffs own breach
of contract/default.
Defendant reserves the right to assert additional affirmative defenses and matters
in avoidance as are disclosed during the course of additional investigation and inquiry.
HE LEARNING EXPERIENCE, CORP.’S FIRST AMENDED COUNTERCLAIMS
TLE asserts its First Amended Counterclaims against Plaintiff and in support thereof,
would respectfully show the Court as follows:
DISCOVERY CONTROL PLAN
Discovery will be conducted under Level 2 of Rule 190.3 of the Texas Rules of
Civil Procedure.
PARTIES, JURISDICTION, AND VENUE
Counterclaim Defendant Sugar Land has appeared in this case and has consented
to jurisdiction and venue by filing this lawsuit, and these First Amended Counterclaims are being
served upon counsel of record.
This Court has subject matter jurisdiction over this matter because the amount in
controversy exceeds the minimum jurisdictional limits of this Court.
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RULE 47 STATEMENT
In accordance with Rule 47 of the Texas Rules of Civil Procedure, TLE states that
it seek only monetary relief of $250,000 or less, excluding interest, statutory or punitive damages
and penalties, and attorney fees and costs.
Iv. FACTUAL BACKGROUND
The 2014 Lease Agreement
On or about November 24, 2014, Sugar Land’s predecessor interest Spring
Daycare, LLC as Landlord, and TLE’s wholly owned subsidiary TLE at Sugar Land, LLC
”) as Tenant, entered into a lease agreement (and as thereafter amended and/or
assigned, the Lease”) for the premises located at the Intersection of West Airport Road and Old
Richmond Road, Sugar Land, Texas 77498 (the “Leased Premises”).
Landlord’s WorkAs consideration for Tenant’s payment of rent and other sums,
Landlord was obligated to construct a Building, Improvements, and Playground at the Leased
Premises for Tenant’s use as a “turnkey” childcare center. Lease, § 1.1; Ex. C thereto, A.1.
According to the Lease, andlord was to enter into a Construction Contract to perform
Landlord’s Work “in strict compliance with all Applicable Laws and in a good, first class and
workmanlike manner, using only new materials.” Lease, Ex. C thereto, 4 A.2.
At all relevant times, Landlord knew that Tenant’s intended use for the Leased
Premises was to operate a childcare center and was to be used and occupied by young children.
Lease, §§ 1.1, 1.2, 8.1(c), 9.1(b), 10.1(a), 11.1(b) (0), 11.3, 12.3, 14.1, 15.land Exhibit C
thereto.
A copy of the Lease, including all amendments thereto, is attached as Exhibit A The Lease was assigned several
times since its November 2014 Effective Date by both the Landlord and Tenant, such that Plaintiff is the current
Landlord and Defendant is the current Tenant See Exhibit B
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TermUnder the Lease, the Initial Term was for 192 months (sixteen (16) years),
with Tenant having the irrevocable option to extend the Initial Term for two (2) additional five
(5) year periods. Lease, § 2.1; 2.3. In other words, Tenant had had the opportunity to exercise
all option periods prior to Landlord’s breach as set forth below, the Lease’s Term was to be for
a total of twenty six (26) years.
RentThe Parties agreed that Base Rent under the Lease was $20,000.00 per
month for the first five (5) Lease Years, with subsequent increases thereafter. Lease, § 3.1. In
addition to Rent, Tenant was to pay all costs and expenses in connection with operating and
maintaining the Leased Premises, including insurance, repair and replacement, cleaning, and
Real Estate Taxes. Lease, § 4.1, 4.2.
Tenant’s obligation to pay Rent did not begin until the Rent Commencement
Date a term which was defined as 60 days after Landlord’s delivery of a Certificate of
Occupancshowing completion of its Construction Work.
Importantly, however, the Lease defines the term “Effective Date” as the date the
Lease was signedNovember
“Effective|
This LEASE (the “Lease”) is made as of the 24" day of November, 2014 (the
:
), having
Date”) between Spring Daycare, LLC, a Texas limited | jiability company (the “Landlord”
TX 78735 and TLE AT
its principal place of business at 7500 Rialto Blvd., Suit 250, Austin,
ISUGAR LAND, LLC, a Delaware limited liability company (the “Tenant”), having its principal
place of business at 4855 Technology Way, Suite 700, Boca Raton, Florida 33431.
Lease, p.
Landlord’s Lease Obligations{n addition to Landlord’s Work regarding
construction Landlord also had other obligations under the Lease. As relevant to this dispute,
Landlord was responsible for all structural portions of the Leased Premisesincluding the water
tightness of the Building. Original Lease, § 5.1(a). If any repairs required to be made by the
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Landlord were not commenced and diligently pursued within ten (10) days after delivery of
Tenant’s written notice thereof, Tenant could make such repairs and “deduct the cost of such
repairs plus interest at the Interest Rate from the Rent” until Tenant was fully reimbursed.
Original Lease, § 5.1(a).
Landlord also covenanted under the Lease that Tenant “shall be and remain
entitled, peacably and quietly, to have, hold occupy and use the Leased Premises during the Term
[...].” Lease, § 12.1.
Tenant’s Right to Abate RentFinally, 11.1(b) of the Lease provides that to the
extent Tenant cannot use the Leased Premises due to the presence of Hazardous Substances (or
any necessary remedial action resulting therefrom), and such failure or presence was not caused
by Tenant, Rent shall be abated until Tenant is able to use the Leased Premises. Lease, § 11.1(b).
Limited Rent Guaranty
In connection with the Lease, executed a Guaranty of Rent (the
Guaranty”), whereby guaranteed certain of Tenant’s Rent obligations under the Lease.
Lease
The Guaranty, however, was limited in nature. TLE’s maximum liability under
the Guaranty was $500,000, which was reduced by $100,000 “on each anniversary of the
Effective Date
Notwithstanding the foregoing and anything in the Lease to the contrary, this Guaranty of
Rent shall be limited to a maximum liability amount of Five Hundred Thousand Dollars
($500,000.00) in the aggregate and this maximum amount shall be reduced by One Hundred
Thousand Dollars ($100,000.00) on each anniversary of the Effective Date, and shall further be
reduced by the amount of any payment made to Landlord on Tenant’s behalf, until such time as
said amount has been reduced to Zero ($0.00), at which| time this Guaranty of Rent shall become
null, void, and of no further force or effect.
Lease, at p. 45.
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The term “Effective Date” is not defined in the Guaranty. However, he Guaranty
provides that “‘all terms not defined herein shall have the meanings ascribed thereto in the Lease.”
Lease, at p. 45.
Accordingly, the term “Effective Date” as used in the Guaranty has the same
meaning ascribed to it in the Lease: November 24, 2014. Lease, at p.
As a result, and by its own terms, TLE’s Guaranty became “null, void, and of no
further force or effect” as of November 24, 2019:
Anniversary of Effective Date Maximum Liability Amount
11/24/
11/24/2015
11/24/2016
11/24/2017
11/24/2018
11/24/2019
As a Result of Landlord’s Defective and/or Defectively Installed HVAC Unit in the
Building, Moisture and Humidity Precipitated Throughout the Leased Premises
Causing the Proliferationof Mold in the Childcare Center
August 22, 2017 was the Rent Commencement Date under the Lease, following
Landlord’s completion of construction and delivery of the Certificate of Occupancy
Soon thereafter, TLE occupied the Leased Premises in order to operate the
childcarebusiness.
However, quickly became apparent that either the HVAC unit installed by
Landlord was defective, or that Landlord’s installation of the HVAC unit was defective resulting
significant humidity and moisture issues throughout the Building
etween July 2018 and October 2020, the Leased Premises experienced
significant and persistent moisture and condensation, extremely elevated humidity levels in the
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air interior water leaks and potentially dangerous and hazardous electrical issues when the water
permeated various electrical sockets
he Building’s humidity and condensation issues caused extremely
ncomfortable conditions in the Building’s air quality, as well as certain cosmetic damage to the
Building’s interiorincluding rust and damaged ceiling tiles and lighting fixtures
Event though the issues seemed purely cosmetic in nature at first, Tenant alerted
Landlord to these myriad issues while stilltrying to operate the childcare center.
Landlord attempted to repair the HVAC unit, to no avail.
In October 2019, mold was discovered growing on the daycare center’s ceiling
tiles as a result of the HVAC issues.
The Building’s humidity and condensation issues persisted well into 2020, even
as Tenant’s operations were forced to temporarily shut down due to state and federal COVID
regulations.
By July 2020, the mold issue was growing worse and appeared on the ceiling tiles,
in the lights and around fixtures.
By the fall of 2020, it was readily apparent that none of Landlord’s prior repair
attempts were successful. In fact, a repair vendor informed that the HVAC unit was
improperly installedand/or was not functioning properly
The impact of the improperly installed/malfunctioning HVAC unit caused severe
damage to the Leased Premises. The water damage extended into every room, down the
hallways, and the front reception area. The cabinets in the kitchen held water to the point that
they began to warp and buckle. Light fixtures and ceiling tiles began to collapse. These conditions
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not only constituted licensing violations for the childcare center, but also presented potentially
hazardous and unsafe conditions for the children and staff.
n October 2020, TLE’s contractor discovered mold present in the insulation of
the entire Building, rendering the operation of a childcarecenter in the Premises impossible.
notified Landlord ofthe presence of mold immediately.
As a result of the discovery of mold, had no choice but to completely and
immediately close the childcare center as of October 31,
Landlord Inexplicably Denies Tenant’s Insurance Adjuster Access to the Property,
Resulting in Additional Damages
The costs incurred by TLE for certain attempted repairs of the HVAC system
totaled not less than $127,000 (the “Repair Costs”).
In November 2020, when Tenant’s HVAC vendor attempted to access the
Property to inspect the HVAC units for Tenant’s insurance claim, Landlord denied the vendor
any access to the Premises.
After paying for the Repair Costs out of pocket, TLE submitted a claim to its
insurance carrier for reimbursement of the Repair Costs.
On information and belief, the insurance carrier required that an insurance
adjuster inspect the Leased Premises and HVAC system to confirm that coverage applied to the
Repair Costs.
On information and belief, Sugar Land inexplicably and arbitrarily refused, and
continues to so refuse,to allow the insurance adjuster to access the Leased Premises
Through actions Sugar Land has intentionally interfered with TLE’s ability to
obtain reimbursement for the Repair Costs under the very insurance policy Tenant was required
to maintainon the Leased Premises
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CONDITIONS PRECEDENT
All conditions precedent to TLE’s counterclaim for lief have been performed or
have occurred as required by P. 54.
Vi. CAUSES OF ACTION
COUNT I TORTIOUS INTERFERENCE WITH CONTRACT.
TLE incorporates by reference the preceding paragraphs as if fully set forth herein.
TLE had a valid contract with its insurance carrier for reimbursement of claims
related to the Repair Costs.
Sugar Land willfully and intentionally interfered with that contract by refusing to
allow the insurance adjuster access to the Leased Premises to satisfy the requirements for
reimbursement of the Repair Costs to TLE.
Sugar Land’s interference proximately caused TLE’s damages in an amount not
less than $127,000.
UNT II BREACH OF THE COVENANT OF QUIET ENJOYMENT
TLE incorporates by reference the preceding paragraphs as if fully set forth herein.
As set forth in the Lease, Landlord was obligated to construct a Building,
Improvements, and Playground at the Leased Premises for Tenant’s use as a “turnkey” childcare
center. Lease, § 1.1; Ex. C thereto, | A.1.
At all relevant times, Landlord knew that Tenant’s intended use for the Leased
Premises was to operate a childcare center and was to be used and occupied by young children.
Lease, §§ 1.1, 1.2, 8.1(c), 9.1(b), 10.1(a), 11.1(b) (c), 11.2 11.3, 12.3, 14.1, 15.1, and Exhibit C
thereto.
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Plaintiff breached that covenant when it delivered the Leased Premises to Tenant
with a defective HVAC systemcausin humidity levels throughout the building to reach
throughout the day, failed to cool the buildings, and caused the circuit breaker to repeatedly trip,
so that some classrooms did not have power. The foregoing necessitated moving children from
classroom to classroom and/or multiple classes sharing rooms thereby increasing the classroom
size, disrupting the school day, and preventing TLE from running the childcare center effectively
Ultimately, Tenant was forced to close the school due to the ongoing issues created by Plaintiff's
defective or defectivelyinstalled HVAC system.
In addition, the unresolved moisture issue resulted in water stains throughout
multiple rooms of the Leased Premises, light fixtures to rust and break, and dripping water on the
ceiling tiles. This ultimately resulted in the growth of persistent mold, which necessitated TLE
moving children to other TLE centers in locations around the Houston area and closing the school
further preventing TLE from running the childcare effectively, or, indeed at all.
As a result of Landlord’s breach of the covenant, TLE has been damaged in an
amount to be determined at trial
COUNT I] BREACH OF THE IMPLIED WARRANTY OF SUITABILITY
TLE incorporates by reference the preceding paragraphs as if fully set forth herein.
Plaintiff leased property to TL
The Lease covered commercial property.
The Leased Premises had a latent defect in an area vital to the Leased Premises’
commercial purpose that made the Leased Premises unsuitable for their intended commercial
purpose: an ineffective HVAC system causing mold rendering the Leased Premises unusable for
the purpose of a childcarecenter as expressly provided for in the Lease.
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Plaintiff had a duty to repair the latent defect.
Plaintiff did not repair the latent defect.
TLE suffered injury as a direct result of the foregoing in an amount to be determined
at trial
COUNT NEGLIGENT MISREPRESENTATION
TLE incorporates by reference the preceding paragraphs as if fully set forth herein.
Plaintiff made a representation to TLE in a transaction in which Plaintiff had a
pecuniary interestthe Leasethat the Leased Premises was suitable for operating a childcare
center.
Plaintiff supplied this information for the purpose of guiding TLE to enter the
Lease.
Plaintiff did not use reasonable care in obtaining this information from its
contractors or in communicating this information to TLE.
TLE justifiably relied on Plaintiff's representation.
Plaintiffs negligent misrepresentation proximately caused TLE’s injury because
TLE was forced to close its childcare center business for the safety of its customers and employees
because it could not operate safely in a mold infested building resulting from the faulty HVAC
system originally installed by Plaintiff.
COUNT V JUDICIAL DECLARATION
(RENT ABATEMENT DUE TO PRESENCE OF HAZARDOUS SUBSTANCE)
alleges the above paragraphs above as if fully set forth herein.
There exists a controversy between the Parties as to whether TLE owes certain
obligations to Landlord under the Guaranty and whether the Guaranty has expired.
Pursuant to the Texas Declaratory Judgment Act, Section 37 et. seq. of the Texas
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Civil Practice and Remedies Code, and to determine the rights of the Parties, seeks a
declaration that, and to the extent this Court determines the Guaranty is expired and is
enforceable: (i) the presence of mold in the Leased Premises is a Hazardous Substance as defined
under the Parties’ Lease; (ii) due to the presence of a Hazardous Substance in the Leased Premises,
Tenant was unable to fully use the Leased Premises since October 2019; (iii) the presence of the
Hazardous Substance was not caused by Tenant, its agents, contractors or employees; and (iv) as
a result, and pursuant to Section 11.1(b) of the Lease, Rent should have been abated since October
indefinitely, and since upon information and belief the presence of Hazardous Substances
remains in the Leased Premises to date. As a result, to the extent the Guaranty is not expired and/or
unenforceable, the amount owed thereunder is $0.00 as a result of the application of a full Rent
abatement.
Additionally, under the Declaratory Judgment Act, Texas Civil Practice and
Remedies Code, Chapter 37, the Court may award costs and reasonable and necessary attorneys’
fees as are equitable and just.
COUNT VI JUDICIAL DECLARATION
(DEFINITION OF EFFECTIVE DATE)
TLE re alleges the above paragraphs above as if fully set forth herein.
There exists a justiciable controversy between the Parties as to whether the
Guaranty is enforceable or has otherwise expired, and TLE’s obligations, ifany, thereunder
seeks a judicial declaration that (1) the term “Effective Date” in the Guaranty
is defined as November 24, 2014, consistent with its definition in the Lease; (2) as a result, TLE’s
guaranteed obligations were reduced by $100,000 on each 1 year anniversary of November 24,
2014; (3) thus, as a result, the Guaranty was null, void and of no further force and effect as of
November 24, 2019; and (4) as a result, TLE owes nothing under the Guaranty.
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Additionally, under the Declaratory Judgment Act, Texas Civil Practice and
Remedies Code, Chapter 37, the Court may award costs and reasonable and necessary attorneys’
fees as are equitable and just.
VIL. PRAYER FOR RELIEF
prays that Sugar Land take nothing on its Original Petition, that the Original
Petition be dismissed with prejudice in its entirety, that judgment be entered against Sugar Land
and in favor of that be awarded actual damages in an amount to proven at trial in
addition to pre and post judgment interest, declaratory relief, and that Sugar Land reimburse
for all reasonable and necessary attorney’s fees and expenses and all court costs and for all
and such other and further reliefto which may be entitled.
Dated: January submitt
REENBERG RAURIG
By: /s/ Cara Kelly
Cara Kelly
State Bar No.
kellyc@gtlaw.com
Anna Robshaw
State Bar No. 24107978
‘obshawa@gtlaw.com
1000 Louisiana Street, Suite 1700
Houston, Texas 77002
Telephone: (713) 374 3500
Facsimile: (713) 374 505
COUNSEL FOR DEFENDANT THE
LEARNING EXPERIENCE CORP.
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CERTIFICATE OF SERVICE
I hereby certify that a true and correct copy of the foregoing instrument was served upon
all counsel ofrecord in the manner indicated below on January
ANIELS REDENNICK PLLC via Certified Mail, RRR
Douglas A. Daniels via U.S. Mail (First Class)
Doug.daniels@dtlawyers.com via Electronic Mail
Richard A. Alvarado via Fax
ick@dtlawyers.com via Hand Delivery
via Messenger
6363 Woodway Dr., Suite 700 via E Filing
Houston, Texas 770 via Federal Express
Telephone: 0024
Facsimile:
COUNSEL FOR PLAINTIFF
/s/ Anna Robshaw
Anna Robshaw
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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 NAME: The Learning| Experience®
‘TENANT'S ADDRESS: 4855 Technology Way, Suite 700
Boca Raton, Florida 33431
TENANT'S PHONE: (561) 886-6400
LANDLORD: Spring Daycare, LLC, a Texas limited liability
company
|
LANDLORD'S, ADDRESS 25528 Genesee Trail
Golden, Colorado 80401
LANDLORD'S 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 MONTHLY 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
SLC 000727
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.
SLC 000728
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 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
ry thereof) and
calendar months each beginning on the Rent Commencement Date (or the anniversa
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
sole risk and expense and shall not materially int erfere with Landlord’s Work
(as defined in Exhibit
C attached hereto). Prior to the early entry, the parties shall conduct a walkthr ough and create an
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. \
|
ions to Extend, As long as no Event of Default then exists under this Lease,
2.3 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
conditions of this
Section 3.1 below. and except for such adjustment to Base Rent, all terms and
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
shall pay
following the Commencement Date. Beginning on the Rent Commencement Date, Tenant
following schedule:
Landlord base rent (the “Base Rent”) for the Leased Premises pursuant to the
|
|
|| 3
SLC 000729
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. | ||
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4
SLC 000730
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) |
Preview
CAUSE NO. 21 -283314 SUGAR LAND CUBED, LLC, IN THE DISTRICT COURT Plaintiff JUDICIAL DISTRICT THE LEARNING EXPERIENCE CORP., Defendant FORT BEND COUNTY, TEXAS THE LEARNING EXPERIENCE, CORP.’S FIRST AMENDEDANSWER, AFFIRMATIVE DEFENSES, AND COUNTERCLAIM S Defendant The Learning Experience Corp. ( en— or “Defendant files its First Amended Answer, Affirmative Defenses, and Counterclaims against Sugar Land Cubed, LLC Sugar Land” or “Plaintiff, and respectfully shows the Court the following: FIRST AMENDED ANSWER AND AFFIRMATIVE DEFENSES GENERAL DENIAL In accordance with the rights granted Defendant by Rule 92 of the Texas Rules of Civil Procedure, Defendant generally denies each and every, all and singular, material allegation contained in Plaintiff's Original Petition and demands that Plaintiffbe required to prove its charges and allegations against Defendant as required by the Constitution and the laws of the State of Texas. AFFIRMATIVE DEFENSES Except to the extent expressly admitted herein, Defendant denies the material allegations of the Petition and demands strict proof thereof. Plaintiff's claims are barred, in whole or in part, because they fail to state a cause of action upon which relief may be granted. Plaintiff has alleged only conclusions of law and formulaic recitations of the elements of its claims without adequate supporting facts, details, or events to support such elements. Plaintiff's claims may be barred, in whole or in part, by the applicable statutes of limitations and/or are otherwise untimely. Plaintiff's claims are barred, in whole or in part, because any losses Plaintiff has sustained or will sustain are due to Plaintiff's own failures and omissions and Plaintiff's own conduct or negligence Plaintiff's claims and/or damages may be limited by the after acquired evidence doctrine. Plaintiff's claims may be barred, in whole or in part, by the doctrines of unclean hands, laches, estoppel, ratification, acquiescence, consent, agreement, accord and satisfaction, release, payment, and/or waiver. Plaintiff is precluded from any recovery because Plaintiff has not suffered any damages or any legally recognizable injury and/or the damages Plaintiff seeks are speculative and not recoverable as a matter of law. Parol evidence is inadmissible to vary the clear and unambiguous terms of the ntract at issue. Plaintiff's claims are barred, in whole or in part, by the Statute of Frauds. Plaintiff has failed to mitigate its damages, if any. Defendant’s conduct as alleged in the Petition was undertaken in good faith. Plaintiff's claims are barred,in whole or in part, for failure of consideration. Plaintiff's claims are barred, in whole or in part, because of frustration of purpose. EFENDANT IRST MENDED NSWER FFIRMATIVE EFENSES OUNTERCLAIM AGE Plaintiff's claims are barred, in whole or in part, because of impracticability of performance. Plaintiff's claims are barred, in whole or in part, because of unclean hands. Plaintiff's claims are barred, in whole or in part, because of offset/setoff/recoupment/credit. Plaintiff's claims are barred, in whole or in part, because of Plaintiffs own breach of contract/default. Defendant reserves the right to assert additional affirmative defenses and matters in avoidance as are disclosed during the course of additional investigation and inquiry. HE LEARNING EXPERIENCE, CORP.’S FIRST AMENDED COUNTERCLAIMS TLE asserts its First Amended Counterclaims against Plaintiff and in support thereof, would respectfully show the Court as follows: DISCOVERY CONTROL PLAN Discovery will be conducted under Level 2 of Rule 190.3 of the Texas Rules of Civil Procedure. PARTIES, JURISDICTION, AND VENUE Counterclaim Defendant Sugar Land has appeared in this case and has consented to jurisdiction and venue by filing this lawsuit, and these First Amended Counterclaims are being served upon counsel of record. This Court has subject matter jurisdiction over this matter because the amount in controversy exceeds the minimum jurisdictional limits of this Court. EFENDANT IRST MENDED NSWER FFIRMATIVE EFENSES OUNTERCLAIM AGE RULE 47 STATEMENT In accordance with Rule 47 of the Texas Rules of Civil Procedure, TLE states that it seek only monetary relief of $250,000 or less, excluding interest, statutory or punitive damages and penalties, and attorney fees and costs. Iv. FACTUAL BACKGROUND The 2014 Lease Agreement On or about November 24, 2014, Sugar Land’s predecessor interest Spring Daycare, LLC as Landlord, and TLE’s wholly owned subsidiary TLE at Sugar Land, LLC ”) as Tenant, entered into a lease agreement (and as thereafter amended and/or assigned, the Lease”) for the premises located at the Intersection of West Airport Road and Old Richmond Road, Sugar Land, Texas 77498 (the “Leased Premises”). Landlord’s WorkAs consideration for Tenant’s payment of rent and other sums, Landlord was obligated to construct a Building, Improvements, and Playground at the Leased Premises for Tenant’s use as a “turnkey” childcare center. Lease, § 1.1; Ex. C thereto, A.1. According to the Lease, andlord was to enter into a Construction Contract to perform Landlord’s Work “in strict compliance with all Applicable Laws and in a good, first class and workmanlike manner, using only new materials.” Lease, Ex. C thereto, 4 A.2. At all relevant times, Landlord knew that Tenant’s intended use for the Leased Premises was to operate a childcare center and was to be used and occupied by young children. Lease, §§ 1.1, 1.2, 8.1(c), 9.1(b), 10.1(a), 11.1(b) (0), 11.3, 12.3, 14.1, 15.land Exhibit C thereto. A copy of the Lease, including all amendments thereto, is attached as Exhibit A The Lease was assigned several times since its November 2014 Effective Date by both the Landlord and Tenant, such that Plaintiff is the current Landlord and Defendant is the current Tenant See Exhibit B EFENDANT IRST MENDED NSWER FFIRMATIVE EFENSES OUNTERCLAIM AGE TermUnder the Lease, the Initial Term was for 192 months (sixteen (16) years), with Tenant having the irrevocable option to extend the Initial Term for two (2) additional five (5) year periods. Lease, § 2.1; 2.3. In other words, Tenant had had the opportunity to exercise all option periods prior to Landlord’s breach as set forth below, the Lease’s Term was to be for a total of twenty six (26) years. RentThe Parties agreed that Base Rent under the Lease was $20,000.00 per month for the first five (5) Lease Years, with subsequent increases thereafter. Lease, § 3.1. In addition to Rent, Tenant was to pay all costs and expenses in connection with operating and maintaining the Leased Premises, including insurance, repair and replacement, cleaning, and Real Estate Taxes. Lease, § 4.1, 4.2. Tenant’s obligation to pay Rent did not begin until the Rent Commencement Date a term which was defined as 60 days after Landlord’s delivery of a Certificate of Occupancshowing completion of its Construction Work. Importantly, however, the Lease defines the term “Effective Date” as the date the Lease was signedNovember “Effective| This LEASE (the “Lease”) is made as of the 24" day of November, 2014 (the : ), having Date”) between Spring Daycare, LLC, a Texas limited | jiability company (the “Landlord” TX 78735 and TLE AT its principal place of business at 7500 Rialto Blvd., Suit 250, Austin, ISUGAR LAND, LLC, a Delaware limited liability company (the “Tenant”), having its principal place of business at 4855 Technology Way, Suite 700, Boca Raton, Florida 33431. Lease, p. Landlord’s Lease Obligations{n addition to Landlord’s Work regarding construction Landlord also had other obligations under the Lease. As relevant to this dispute, Landlord was responsible for all structural portions of the Leased Premisesincluding the water tightness of the Building. Original Lease, § 5.1(a). If any repairs required to be made by the EFENDANT IRST MENDED NSWER FFIRMATIVE EFENSES OUNTERCLAIM AGE Landlord were not commenced and diligently pursued within ten (10) days after delivery of Tenant’s written notice thereof, Tenant could make such repairs and “deduct the cost of such repairs plus interest at the Interest Rate from the Rent” until Tenant was fully reimbursed. Original Lease, § 5.1(a). Landlord also covenanted under the Lease that Tenant “shall be and remain entitled, peacably and quietly, to have, hold occupy and use the Leased Premises during the Term [...].” Lease, § 12.1. Tenant’s Right to Abate RentFinally, 11.1(b) of the Lease provides that to the extent Tenant cannot use the Leased Premises due to the presence of Hazardous Substances (or any necessary remedial action resulting therefrom), and such failure or presence was not caused by Tenant, Rent shall be abated until Tenant is able to use the Leased Premises. Lease, § 11.1(b). Limited Rent Guaranty In connection with the Lease, executed a Guaranty of Rent (the Guaranty”), whereby guaranteed certain of Tenant’s Rent obligations under the Lease. Lease The Guaranty, however, was limited in nature. TLE’s maximum liability under the Guaranty was $500,000, which was reduced by $100,000 “on each anniversary of the Effective Date Notwithstanding the foregoing and anything in the Lease to the contrary, this Guaranty of Rent shall be limited to a maximum liability amount of Five Hundred Thousand Dollars ($500,000.00) in the aggregate and this maximum amount shall be reduced by One Hundred Thousand Dollars ($100,000.00) on each anniversary of the Effective Date, and shall further be reduced by the amount of any payment made to Landlord on Tenant’s behalf, until such time as said amount has been reduced to Zero ($0.00), at which| time this Guaranty of Rent shall become null, void, and of no further force or effect. Lease, at p. 45. EFENDANT IRST MENDED NSWER FFIRMATIVE EFENSES OUNTERCLAIM AGE The term “Effective Date” is not defined in the Guaranty. However, he Guaranty provides that “‘all terms not defined herein shall have the meanings ascribed thereto in the Lease.” Lease, at p. 45. Accordingly, the term “Effective Date” as used in the Guaranty has the same meaning ascribed to it in the Lease: November 24, 2014. Lease, at p. As a result, and by its own terms, TLE’s Guaranty became “null, void, and of no further force or effect” as of November 24, 2019: Anniversary of Effective Date Maximum Liability Amount 11/24/ 11/24/2015 11/24/2016 11/24/2017 11/24/2018 11/24/2019 As a Result of Landlord’s Defective and/or Defectively Installed HVAC Unit in the Building, Moisture and Humidity Precipitated Throughout the Leased Premises Causing the Proliferationof Mold in the Childcare Center August 22, 2017 was the Rent Commencement Date under the Lease, following Landlord’s completion of construction and delivery of the Certificate of Occupancy Soon thereafter, TLE occupied the Leased Premises in order to operate the childcarebusiness. However, quickly became apparent that either the HVAC unit installed by Landlord was defective, or that Landlord’s installation of the HVAC unit was defective resulting significant humidity and moisture issues throughout the Building etween July 2018 and October 2020, the Leased Premises experienced significant and persistent moisture and condensation, extremely elevated humidity levels in the EFENDANT IRST MENDED NSWER FFIRMATIVE EFENSES OUNTERCLAIM AGE air interior water leaks and potentially dangerous and hazardous electrical issues when the water permeated various electrical sockets he Building’s humidity and condensation issues caused extremely ncomfortable conditions in the Building’s air quality, as well as certain cosmetic damage to the Building’s interiorincluding rust and damaged ceiling tiles and lighting fixtures Event though the issues seemed purely cosmetic in nature at first, Tenant alerted Landlord to these myriad issues while stilltrying to operate the childcare center. Landlord attempted to repair the HVAC unit, to no avail. In October 2019, mold was discovered growing on the daycare center’s ceiling tiles as a result of the HVAC issues. The Building’s humidity and condensation issues persisted well into 2020, even as Tenant’s operations were forced to temporarily shut down due to state and federal COVID regulations. By July 2020, the mold issue was growing worse and appeared on the ceiling tiles, in the lights and around fixtures. By the fall of 2020, it was readily apparent that none of Landlord’s prior repair attempts were successful. In fact, a repair vendor informed that the HVAC unit was improperly installedand/or was not functioning properly The impact of the improperly installed/malfunctioning HVAC unit caused severe damage to the Leased Premises. The water damage extended into every room, down the hallways, and the front reception area. The cabinets in the kitchen held water to the point that they began to warp and buckle. Light fixtures and ceiling tiles began to collapse. These conditions EFENDANT IRST MENDED NSWER FFIRMATIVE EFENSES OUNTERCLAIM AGE not only constituted licensing violations for the childcare center, but also presented potentially hazardous and unsafe conditions for the children and staff. n October 2020, TLE’s contractor discovered mold present in the insulation of the entire Building, rendering the operation of a childcarecenter in the Premises impossible. notified Landlord ofthe presence of mold immediately. As a result of the discovery of mold, had no choice but to completely and immediately close the childcare center as of October 31, Landlord Inexplicably Denies Tenant’s Insurance Adjuster Access to the Property, Resulting in Additional Damages The costs incurred by TLE for certain attempted repairs of the HVAC system totaled not less than $127,000 (the “Repair Costs”). In November 2020, when Tenant’s HVAC vendor attempted to access the Property to inspect the HVAC units for Tenant’s insurance claim, Landlord denied the vendor any access to the Premises. After paying for the Repair Costs out of pocket, TLE submitted a claim to its insurance carrier for reimbursement of the Repair Costs. On information and belief, the insurance carrier required that an insurance adjuster inspect the Leased Premises and HVAC system to confirm that coverage applied to the Repair Costs. On information and belief, Sugar Land inexplicably and arbitrarily refused, and continues to so refuse,to allow the insurance adjuster to access the Leased Premises Through actions Sugar Land has intentionally interfered with TLE’s ability to obtain reimbursement for the Repair Costs under the very insurance policy Tenant was required to maintainon the Leased Premises EFENDANT IRST MENDED NSWER FFIRMATIVE EFENSES OUNTERCLAIM AGE CONDITIONS PRECEDENT All conditions precedent to TLE’s counterclaim for lief have been performed or have occurred as required by P. 54. Vi. CAUSES OF ACTION COUNT I TORTIOUS INTERFERENCE WITH CONTRACT. TLE incorporates by reference the preceding paragraphs as if fully set forth herein. TLE had a valid contract with its insurance carrier for reimbursement of claims related to the Repair Costs. Sugar Land willfully and intentionally interfered with that contract by refusing to allow the insurance adjuster access to the Leased Premises to satisfy the requirements for reimbursement of the Repair Costs to TLE. Sugar Land’s interference proximately caused TLE’s damages in an amount not less than $127,000. UNT II BREACH OF THE COVENANT OF QUIET ENJOYMENT TLE incorporates by reference the preceding paragraphs as if fully set forth herein. As set forth in the Lease, Landlord was obligated to construct a Building, Improvements, and Playground at the Leased Premises for Tenant’s use as a “turnkey” childcare center. Lease, § 1.1; Ex. C thereto, | A.1. At all relevant times, Landlord knew that Tenant’s intended use for the Leased Premises was to operate a childcare center and was to be used and occupied by young children. Lease, §§ 1.1, 1.2, 8.1(c), 9.1(b), 10.1(a), 11.1(b) (c), 11.2 11.3, 12.3, 14.1, 15.1, and Exhibit C thereto. EFENDANT IRST MENDED NSWER FFIRMATIVE EFENSES OUNTERCLAIM AGE Plaintiff breached that covenant when it delivered the Leased Premises to Tenant with a defective HVAC systemcausin humidity levels throughout the building to reach throughout the day, failed to cool the buildings, and caused the circuit breaker to repeatedly trip, so that some classrooms did not have power. The foregoing necessitated moving children from classroom to classroom and/or multiple classes sharing rooms thereby increasing the classroom size, disrupting the school day, and preventing TLE from running the childcare center effectively Ultimately, Tenant was forced to close the school due to the ongoing issues created by Plaintiff's defective or defectivelyinstalled HVAC system. In addition, the unresolved moisture issue resulted in water stains throughout multiple rooms of the Leased Premises, light fixtures to rust and break, and dripping water on the ceiling tiles. This ultimately resulted in the growth of persistent mold, which necessitated TLE moving children to other TLE centers in locations around the Houston area and closing the school further preventing TLE from running the childcare effectively, or, indeed at all. As a result of Landlord’s breach of the covenant, TLE has been damaged in an amount to be determined at trial COUNT I] BREACH OF THE IMPLIED WARRANTY OF SUITABILITY TLE incorporates by reference the preceding paragraphs as if fully set forth herein. Plaintiff leased property to TL The Lease covered commercial property. The Leased Premises had a latent defect in an area vital to the Leased Premises’ commercial purpose that made the Leased Premises unsuitable for their intended commercial purpose: an ineffective HVAC system causing mold rendering the Leased Premises unusable for the purpose of a childcarecenter as expressly provided for in the Lease. EFENDANT IRST MENDED NSWER FFIRMATIVE EFENSES OUNTERCLAIM AGE Plaintiff had a duty to repair the latent defect. Plaintiff did not repair the latent defect. TLE suffered injury as a direct result of the foregoing in an amount to be determined at trial COUNT NEGLIGENT MISREPRESENTATION TLE incorporates by reference the preceding paragraphs as if fully set forth herein. Plaintiff made a representation to TLE in a transaction in which Plaintiff had a pecuniary interestthe Leasethat the Leased Premises was suitable for operating a childcare center. Plaintiff supplied this information for the purpose of guiding TLE to enter the Lease. Plaintiff did not use reasonable care in obtaining this information from its contractors or in communicating this information to TLE. TLE justifiably relied on Plaintiff's representation. Plaintiffs negligent misrepresentation proximately caused TLE’s injury because TLE was forced to close its childcare center business for the safety of its customers and employees because it could not operate safely in a mold infested building resulting from the faulty HVAC system originally installed by Plaintiff. COUNT V JUDICIAL DECLARATION (RENT ABATEMENT DUE TO PRESENCE OF HAZARDOUS SUBSTANCE) alleges the above paragraphs above as if fully set forth herein. There exists a controversy between the Parties as to whether TLE owes certain obligations to Landlord under the Guaranty and whether the Guaranty has expired. Pursuant to the Texas Declaratory Judgment Act, Section 37 et. seq. of the Texas EFENDANT IRST MENDED NSWER FFIRMATIVE EFENSES OUNTERCLAIM AGE Civil Practice and Remedies Code, and to determine the rights of the Parties, seeks a declaration that, and to the extent this Court determines the Guaranty is expired and is enforceable: (i) the presence of mold in the Leased Premises is a Hazardous Substance as defined under the Parties’ Lease; (ii) due to the presence of a Hazardous Substance in the Leased Premises, Tenant was unable to fully use the Leased Premises since October 2019; (iii) the presence of the Hazardous Substance was not caused by Tenant, its agents, contractors or employees; and (iv) as a result, and pursuant to Section 11.1(b) of the Lease, Rent should have been abated since October indefinitely, and since upon information and belief the presence of Hazardous Substances remains in the Leased Premises to date. As a result, to the extent the Guaranty is not expired and/or unenforceable, the amount owed thereunder is $0.00 as a result of the application of a full Rent abatement. Additionally, under the Declaratory Judgment Act, Texas Civil Practice and Remedies Code, Chapter 37, the Court may award costs and reasonable and necessary attorneys’ fees as are equitable and just. COUNT VI JUDICIAL DECLARATION (DEFINITION OF EFFECTIVE DATE) TLE re alleges the above paragraphs above as if fully set forth herein. There exists a justiciable controversy between the Parties as to whether the Guaranty is enforceable or has otherwise expired, and TLE’s obligations, ifany, thereunder seeks a judicial declaration that (1) the term “Effective Date” in the Guaranty is defined as November 24, 2014, consistent with its definition in the Lease; (2) as a result, TLE’s guaranteed obligations were reduced by $100,000 on each 1 year anniversary of November 24, 2014; (3) thus, as a result, the Guaranty was null, void and of no further force and effect as of November 24, 2019; and (4) as a result, TLE owes nothing under the Guaranty. EFENDANT IRST MENDED NSWER FFIRMATIVE EFENSES OUNTERCLAIM AGE Additionally, under the Declaratory Judgment Act, Texas Civil Practice and Remedies Code, Chapter 37, the Court may award costs and reasonable and necessary attorneys’ fees as are equitable and just. VIL. PRAYER FOR RELIEF prays that Sugar Land take nothing on its Original Petition, that the Original Petition be dismissed with prejudice in its entirety, that judgment be entered against Sugar Land and in favor of that be awarded actual damages in an amount to proven at trial in addition to pre and post judgment interest, declaratory relief, and that Sugar Land reimburse for all reasonable and necessary attorney’s fees and expenses and all court costs and for all and such other and further reliefto which may be entitled. Dated: January submitt REENBERG RAURIG By: /s/ Cara Kelly Cara Kelly State Bar No. kellyc@gtlaw.com Anna Robshaw State Bar No. 24107978 ‘obshawa@gtlaw.com 1000 Louisiana Street, Suite 1700 Houston, Texas 77002 Telephone: (713) 374 3500 Facsimile: (713) 374 505 COUNSEL FOR DEFENDANT THE LEARNING EXPERIENCE CORP. EFENDANT IRST MENDED NSWER FFIRMATIVE EFENSES OUNTERCLAIM AGE CERTIFICATE OF SERVICE I hereby certify that a true and correct copy of the foregoing instrument was served upon all counsel ofrecord in the manner indicated below on January ANIELS REDENNICK PLLC via Certified Mail, RRR Douglas A. Daniels via U.S. Mail (First Class) Doug.daniels@dtlawyers.com via Electronic Mail Richard A. Alvarado via Fax ick@dtlawyers.com via Hand Delivery via Messenger 6363 Woodway Dr., Suite 700 via E Filing Houston, Texas 770 via Federal Express Telephone: 0024 Facsimile: COUNSEL FOR PLAINTIFF /s/ Anna Robshaw Anna Robshaw EFENDANT IRST MENDED NSWER FFIRMATIVE EFENSES OUNTERCLAIM AGE 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 NAME: The Learning| Experience® ‘TENANT'S ADDRESS: 4855 Technology Way, Suite 700 Boca Raton, Florida 33431 TENANT'S PHONE: (561) 886-6400 LANDLORD: Spring Daycare, LLC, a Texas limited liability company | LANDLORD'S, ADDRESS 25528 Genesee Trail Golden, Colorado 80401 LANDLORD'S 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 MONTHLY 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 SLC 000727 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. SLC 000728 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 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 ry thereof) and calendar months each beginning on the Rent Commencement Date (or the anniversa 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 sole risk and expense and shall not materially int erfere with Landlord’s Work (as defined in Exhibit C attached hereto). Prior to the early entry, the parties shall conduct a walkthr ough and create an 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. \ | ions to Extend, As long as no Event of Default then exists under this Lease, 2.3 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 conditions of this Section 3.1 below. and except for such adjustment to Base Rent, all terms and 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 shall pay following the Commencement Date. Beginning on the Rent Commencement Date, Tenant following schedule: Landlord base rent (the “Base Rent”) for the Leased Premises pursuant to the | | || 3 SLC 000729 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 SLC 000730 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) |