COPY LEASE AGREEMENT THIS LEASE AGREEMENT (hereinafter referred to as “Lease”) is made this 1* day of August 2013, by and between Educational Learning and Enrichment Center; Inc., whose principal office and place of business is 6201 Bissonnet, es) Houston, Texas 77081 (hereinafter called “Lessor”), and Energized For Excellence Academy, Inc., whose principal office and place of business is 6201 Bissonnet, Houston, Texas 77081 (hereinafter called “Lessee”). ‘WITNESSETH: 1. PREMISES. The Lessor does hereby leases to Lessee the following: a) Approximately 44,900 square feet of that certain premises commonly known as 6107 Bissonnet Street, Houston, Harris County, Texas 77081; b) Approximately 19,500 square feet of those certain 13-Modular Buildings commonly known as 6109 Bissonnet Street, Houston, Harris County, Texas 77081; and ©) Approximately 40,000 square feet of that certain premises commonly known as 6201 Bissonnet Street, Houston, Harris County, Texas 77081;i of which are collectively hereinafter referred to as the “Premises” with a total rental area of 104,400 square feet. 2. TERM. The term of this Lease shall commence the 1* day of August 2013, and shall terminate on the 315 day of July, 2018. 3, RENEWAL. This Lease may be renewed for ten (10) successive years at expiration at the option of Lessee upon ninety (90) days written notice to Lessor prior to the expiration date herein, 4, RENT. Lessee covenants and agrees to pay Lessor the following rent for the Premises: a) Located at 6107 Bissonnet Street, Houston, Texas 77081, the sum of $1.30 per square foot per month, or @ total of $58,370.00 per month; b) Located at 6109 Bissonnet Street, Houston, Texas 77081, the sum of $1.10 per square foot per month, or a total of $21,450.00 per month; and©) Located at 6201 Bissonnet Street, Houston, Texas 77081, the sum of $1.30 per square foot per month, or a total of $52,000.00 per month. for a total rent of One Hundred Thirty One Thousand, Eight Hundred Twenty and NO/100 Dollars ($131,820.00) per month with the first payment commencing on August 1, 2013 and a like sum thereafter, in advance on the first day of each month a the Lease term, at the offices ‘of Lessor located at 6201 Bissonnet, Houston, Texas 77081 or to such other party or at such other place or address as Lessor may hereinafter designate. If Lessee is in possession of the Premises for a portion of a month, the monthly rent shall be prorated for the number of days of Lessee’s possession during that month. vey Pa years, the market rental of comparable properties shall be reviewed and a determination made as to any increase in the rate 5, SECURITY DEPOSIT. $46,250.00 already on file. The Deposit shall be held by Lessor as security for the faithful performance by Lessee of all provisions of this Lease. If Lessee falls to pay rent or other sums due under this Lease or defaults with respect to any provision of this Lease, Lessor may use, apply, or retain all or any portion of the Deposit for the payment of rent or other sums In 3default for which Lessor may become obligated because of Lessee’s default, or to compensate Lessor for any loss or damage that Lessor may suffer because of Lassee’s actions, The deposit shall be returned, without interest, to Lessee or at Lessor’s option, to the last assignee, if any, of Lessee's interest under this Lease at the expiration of the term of this Lease and within thirty (30) days after Lessee has vacated the Premises. No trust relationship ts created between ieee and Lessee with respect to the Deposit. 6. UTILITIES AND FEES. Lessee shall pay all utilities and fees for light, heat, water, sewer, garbage, drainage, telephone, and all other utilities and services to the leased Premises during the term of this Lease. All other items including ieee fees and other governmental charges levied on the operation of Lessee's business 7 the Premises shall be the responsibility of Lessee. 8. REPAIRS AND MAINTENANCE: The Premises have been inspected and are accepted by Lessee in their present condition. Lessee shall keep and use the Premises in accordance with applicable laws, ordinances, rules, regulations and requirements of governmental authorities. Repairs to the roof, exterior walls, fences, parking lots, foundations and other major repairs that exceed $5,000.00 are the responsibilities of the Lessor. Lessee agrees to make such wear and tear 4repalrs as necessary to maintain the Premises in as good concition as they now are, reasonable use and wear and damage by fire and other casualty excepted. 9. ALTERATIONS. After prior written consent of Lessor, Lessee may make neta additions and improvements to said Premises, at Lessee’s sole cost and expense. In the performance of such work, Lessee agrees to comply with all laws, ordinances, rules, regulations of any proper public authority, and to save Lessor-harmless from damages, losses, or expenses. Upon termination of this Lease and upon Lessor's request or approval, Lessee shall remove such improvements and restore the Premises to its original condition not later than the termination date, at Lessee’s sole cost and expense. Any improvements. not so removed shall be removed at Lessee’s expense provided that Lessee shall pay for any damage caused by such removal. 10. CONDEMNATION. {In the event a substantial part of the Premises is taken or damaged by the right of eminent domain, or purchased by the condemner (in lieu thereof) so as to render the remaining Premises economically untenantable, then this Lease shall be cancelled as of the time of taking of possession or condemnation at the option of either party. In the event of a partial taking which does not render the Premises economically untenantable, the rent shall bereduced in the direct proportion of the compensation for the taking or damaging of the land or building. Nothing herein contained shall prevent the Lessee from his entitlement to negotiate for its own moving costs and its leasehold improvements. 11. PARKING. Lessor agrees to allow buses access to the Premises for purposes of Lessee’s business operations. 12, LIENS AND INSOLVENCY. Lessee shall keep the Premises free from any liens arising out of any work performed for, materials furnished to, or obligations incurred by Lessee and shall hold Lessor harmless against the same. In the even tt Lessee becomes insolvent, bankrupt, or if 2 receiver, assignee or other liquidating officer is appointed for the business of Lessee, Lessor may cancel this Lease at its option 13, SUBLETTING OR ASSIGNMENT. Lessee shall not sublet the whole or any part of the Premises, nor assign this Lease without the written consent of Lessor, which will not be unreasonably withheld. This Lease shall not be assignable by operation of Law. 14, ACCESS. Lessor shall have the right to enter the Premises at all reasonable times for the purposes of inspection or of making repairs, additions, and to showthe prembes to prospective tenants for ninety (90) days prior to the expiration of the Lease term. 15. POSSESSION. If for any reason Lessor is unable to deliver possession of Premises. at the commencement of the term of the Lease, Lessee may give Lessor written notice of its intention to cancel this Lease if possession is not delivered within thirty (30) days after receipt of such notice by Lessor. Lessor shall not be liable for any damages caused by delay, and Lessee shall not be liable for any rent until such times as Lessor delivers possession. A delay of possession shall not extend the term of the termination date. If Lessor offers possession of the Premises prior to the commencement date of the term of this Lease, and if Lessee accepts such early possession, then both parties shall be bound by all the covenants and terms contained herein, including the payment of rent during such period of early possession. 16, DAMAGE OR DESTRUCTION. In the event the Premises are rendered untenantable in whole or in part by fire, the elements, or other casualty, Lessor may elect, at its option, not to restore or rebuild the Premises and shall so notify Lessee, in which event Lessee shall vacate the Premises and this Lease shall be terminated; or in the alternative, Lessor shall notify Lessee, within thirty (30) 7days after notice of such casualty, that Lessor will undertake to rebuild or restore the Premises, and that such work can be completed within one hundred eighty (180) days from date of such notice of intent, and Lessee may elect, at its option, to terminate this Lease. If Lessor is unable to restore or rebuild the premises within the sald one hundred eighty (180) days, and Lessee did not earlier elect to terminate, then the Lease may be terminated at Lessee’s option by written ten (10) days notice to Lessor. During the period of untenantability, rent shall abste in the same ration as the portion of the Premises rendered untenantable bears tothe whole Premises. 17, SUBROGATION WAIVER. Lessor and Lessee each herewith and hereby releases and relieves the other and waives its entire right of recovery against the other for loss or damage arising out of or incident to the perils described in standard fire insurance policies and all perilg described in the “Extended Coverage” insurance endorsement approved for use in the state where the Premises are located, which occurs in, on or about the Premises, unless due to negligence of either party, their agents, employees or otherwise. 18. EVENTS OF DEFAULT. The following events. shall constitute an Event of Default under this Lease:a) a default by Lessee in the payment when due of any rent or other sums payable under this Lease and the continuation of this default for five (5) or more days after notice of the default from Lessor, provided that if Lessee has failed two (2) or more times in any twelve (12) months to pay any rent or other sums when due and notice of this default has been given by Lessor in each instance, no notice shall be ued after this until expiration of twelve (12) months in which all rental and other sums payable under this Lease have been paid on or before the date due; b) default by Lessee in the performance of any of the terms, covenants, agreements, or conditions in this Lease, other than a default by Lessee in 7 is the payment when due of any rent or other sums payable under this Lease, and the continuation of the default beyond thirty (30) days after notice by Lessor or, if the default is curable and would require more than thirty (30) days to remedy, beyond the time reasonably necessary for cure; provided, however, that if Lessee has defaulted in the pertoitaitéa of the same obligation two (2) or more times in twelve (12) months and notice of the default: has been given by Lessor in each instance, no notice 9shall be required after this until the expiration of twelve (12) months without any default by Lessee; d) the bankruptcy or insolvency of Lessee, a transfer by Lessee in fraud of creditors, an assignment by Lessee for the benefit of creditors, or the commencement of proceedings of any kind by or against Lessee under the Federal Bankruptcy Act or under any insolvency, bankruptcy, oF reorganizations act, unless Lessee Is discharged from voluntary proceedings within ninety (20) days; e) the appointment of a receiver for a substantial part of Lessee’s assets; ) the abandonment of the Premises; and @ ‘The levy upon this Lease or any estate of Lessee under this lease by attachment or execution and the fallure to have the attachment or execution vacated within thirty (30) days. On occurrence of any Event of Default of Lessee, Lessor may, in addition to any other rights and remedies given here or by law, terminate this Lease and exercise remedies relating to it without further notice or demand in accordance with the following provisions: 10a). So long as the Event of Default remains uncured, Lessor shall have the right to give notice of termination to Lessee, and on the date specified in this notice, this Lease shall terminate. b) If this Lease is terminated, Lessor may, by judicial process, re-enter the Premises, remove all persons and property, and repossess and enjoy the Premises, all without prejudice to other remedies that Lessor may have because of Lessee’s default or the termination. c) If this Lease is terminated, Lessor shall have all the rights and remedies of a landlord provided by Civil Code Section 195.2, in addition to any other rights and remedies Lessor may have. #8. orn OF PROPERTY. In the event Lessor lawfully re-enters the premises’ provided herein, Lessor shall have the right, but not the obligation, to remove all the personal property located therein and to place such property in storage at the expense and risk of Lessee. 20, SUBORDINATION. Lessee agrees that this Lease shall be subordinate to any mortgages or deeds of trust, placed on the property, provided that in the ‘event of foreclosure if Lessee is not then in default and agrees to attorney to themortgage or beneficiary under deed of trust, such mortgagee or beneficiary shall recognize Lessee’s right of possession for the term of this Lease. 21, NO WAIVER OF COVENANTS. Any waiver by either party of any breach hereof by the other shall not be considered a waiver of any future similar breach, This Lease contains all the agreements of the parties; and there shall be no modification of the agreements contained herein except by written instrument, 22. SURRENDER OF PREMISES: Lessee agrees, upon termination of this Lease, to peacefully quit and surrender the Premises without notice, leave the Premises neat and clean and shall deliver all keys to the Premises to Lassot 23, HOLDING OVER: If Lessee, with the implied or express consent of Lessor, shall hold over after the expiration of the term of this Lease, Lessee shall remain bound by all covenants and agreements herein, except that the tenancy shall be from month to month. 24, BINDING OF HEIRS, SUCCESSORS AND ASSIGNS: The covenants and agreements of this Lease shall be binding upon the helrs, executors, ‘administrators, successors, and assigns of both parties hereto, except as hereinabove provided.25, USE: Lessee shall use the Premises for the purposes of providing educational services for the and for no other purposes, without written consent of Lessor. 26. NOTICE: Any notice required to be given by either to the other shall be deposited in the United States mail, postage prepaid, addressed to the Lessor at Educational Learning and Enrichment Center, Inc., 6201 Bissonnet Street, Houston, Texas 77081, and to the Lessee Energized For Excellence Academy, Inc., at 6201 Bissonnet Street, Houston, Texas 77081; or at such other address as either party may designate to the other in writing from time to ml i 27. AUTHORITY: If Lessee is a corporation, each individual executing this Lease on behalf of said corporation represents and warrants that he or she 's duly authorized to execute and deliver this Lease on behalf of said corporation 28, CONTINUATION AFTER DEFAULT: Even though Lessee has breached this Lease and abandoned the Premises, this Lease shall continue in effect for so Jong as Lessor does not terminate Lessee's right to possession, and Lessor may enforce all rights and remedies under this Lease, including the right to recover the rental as it becomes due under this Lease. Acts of maintenance or preservation, efforts to re-let the Premises, or the appointment of a receiverupon initiative of Lessor to protect Lessor’s Interest under this Lease shall not constitute a termination of Lessee’s right to possession. 29. RIGHT OF LESSOR TO CURE DEFAULTS: Agreements and provisions to faye be performed by Lessee under this Lease shall be at the Lessee’s sole cost and without abatement of rental, except as specifically provided in this Lease. If Lessee (a) falls to pay any sums of money, other than rental, required under this Lease,: or:(b) fails to perform any other act under this Lease, and this failure epntinel for thirty (30) days after notice of the failure by Lessor, or @ longer period as may be allowed under this Lease, Lessor may, without waiving or releasing Lessee from any obligations of Lessee, make payment or perform other acts required by this Lease on Lessee’s behalf. All sums paid by Lessor and all necessary incidental costs shall be payable to Lessor on demand and shall constitute additional rental under this Lease. 30. SALE: In the event that Lessor or any successor owner of the buildings in Which the Premises are located sells or conveys the Premises, all liabilities and obligations of Lessor or the successor owner under this Lease accruing after the sale or conveyance terminates, shall be binding on the new owner, and Lessee 14shall release Lessor from all liability under this Lease. Lessee agrees to attorney to the new owner. IN WITNESS WHEREOF, the parties hereto have hereunto set thelr hands the date first above written. LESSOR: LESSEE: EDUCATIONAL LEARNING AND ENERZIED FOR EXCELLENCE ACADEMY, INC.APPRAISAL OF ENERGIZED FOR EX ELLENCE ACADEMY, INC. 7.8889 ACRES OF LAND, BEING TRACTS 13D, 14, 154, 15B, 16 AND 16, BLOCK 5, WESTMORELAND FARMS, SEC. 2, HARRIS COUNTY, TEXAS 6107, 6109 AND 6201 HOUSTON, TEXAS ONNET PREPARED FOR EDUCATIONAL LBARNING & ENRICHMEN’ CENTER, INC, 6201 BISSONNET HOUSTON, TX 77081 PREPARED BY SAMUEL JARRETT, JR. JARRETT'S REALTY & APPRAISAL SERVICE, P.O, BOX 2422 BELLAIRE, TEXAS 77402 STATE CERTIFIED DATE OF INSPECTION: SEPTEMBER 30, 2011 DATE OF VALUATION. SEPTEMBER 30, 2011 DATE OF REPORT: OCTOBER 17, 2011Ashi" 7 é JARRETT'S APPRAISAL SERVICE Educational Learning & Enrichment Center, inc. 6201 Bissonnet Houston, TX 77081 Re 07, 6109 and 6207 Bissonnet ston, Hesrig County, Texas Dear Client: Pursuant to your request, en appraisel of the ebove-referenced property was prepared to arrive at an opinion of siatket value. The subject property comprises land and special purpose ints located et 6107, 6109 and 6201 Bissonnet, Houston, Texes sit that | have inspected the property described by way of a personal inspection and that all data gathered by my investigetion is from sources believed reliable and true. At our client's request, the results of our investigation and analyses are being presented vie a Self- Contained Appraisal Report in Summary Format, It has been our intention to conduct our spnrtisal and propere this report in compliance’ with the Uniform Standards of Professions) “Appraise Standards Board of the Appreisal Foundation, This appraisal assignment is not based on say request for « minimum or specific valuation or the approval of any loan. Based on & thorough investigetion of the marker, it is my opinion that the market value of the subject property as of September 30, 2011 is as follows: SIX MILLION EIGHT HUNDRED THOUSAND DOLLARS $6,800,000 tt is also my epinion that the marketing time for the subjest property at this value would be less than 24 months 2.0. Box 2622 + Bellaire, Texas 77402 ° (713) 741-0729“thus, the overall projected gross rent estimate is as follows $7,901 SF X $840 PSF = §738,372 21,200SF X S480 PSF = $101,760 TOTAL PROJECTED GROSS RENTAL INCOME 66 $840,132 a stArstaretANALYSIS OF EXPENSE an be seen by the vente comparables, buildings soch as the eubject are leased under « vatiely ve nat, while others are modified grass or full service, For the subject ems, Some #8 1 iinprovements, triple net lease sgesunned with the tenant paying taxes, insorence and all operating expenses. [t is assumed the owner will Pry miscellaneous professional fees, o rmuanagement fee and reserve for replacements operty is 2 single-tenant facility and, thus, s Vacancy Allowance - $126,020 ~ The subject wwever, be occupied by multiple tenants. either 100% occupied or 100% vacant it coutt, h ansed upon review of the marketplace, compersble aroperties and conversations swith owners area, a 15% stabilized veceney rate appears to be reasonable. andl sing agents in Taxes/Insuranee ~ To be paid by tenant Management - $42,847 — This represents 6% of effective gross Mneom®, which is within industry I standard for income-producing properties. Miscellancous Expenses - $6,000 ~ This expense is for miscellancous supplies, administrative and professional fees and as estimated at $500 per month | Reserves for Replacement - $21,428 This represents 2 sinking fund established to replace | comple items such a8 HVAC, roof, flooring, ote bn the subject property, these items ere and estimated at 3% of effective gross income. considered to be flooring, roof, and interior pat ‘Total Expenses - $70,270 — This amounis to 9.8% of the stabilized adjusted gross income, in the normal merket Timits for such a property on @ tiple net lense basis. fae sepety EP GQ Eyezs10r7oET INCOME SCHEDULE Gross Rental Income Primary Buildings 87,901 SF at $0.70 /mo. $61,531 Manufactured Buildi SP at $0.40 /mo, $8,480 x _12 mos. Total Potential Annual Income $840,132 Less: Vacancy and Credit Li 15.0% (5126.0 Effective Gross Annual Income $714,112 sponses Annually Expenses: Real TENANT proper yinewrance) (re ese TENANT Variable Expenses ate Management 6% of BGI (842,847) Utilities TENANT Miscelleneous (86,000) Reserves 3% of EG) ($21,423) Total Expenses (870,270) Net Operating Income $643,842, Net Income /Capitalization Rate cated Value 43,842 f 9.50% otal Capitalized Value by the Income Approuch 86,777,284 ROUNDED TO: $6,777,000ELEC - RENT CALCULATIONS Allocation of Property Taxes and Insurance: 1 2012 Property Taxes $ 169,984.32 2 2012/2013 Property Insurance _122.372.94_ Total $_292,357.26 Property Addresses: Proposed Rents Total SF___Tolal/Month _Total/Vs. Percent 6107 Bissonnet St, Houston, TX 7.00 44500 44,300.00 $538,800.00 44.25% 6 Houston, TX 085 19500 16,575.00 198,900.00 16.33% 6201 Bissonnet St, Houston, TX 4.00, 40,000__40,000.00___480,000.00_39.42% 2.85. F04,400 101,475.00 1,217,700.00___ 00.00% ‘Aquusgtes Adjusted Total Adjusted RentiSF Recalculation of Rent'SF RentYear Property Taxes Property ins, _RentYear__TotalSF__Renv/SF/Yr_ Month 6107 Bissonnet St, Houston, TX 536,00000 75,213.56 54,148.78 § 868,160.34 44,900 (a8 5 124 6109 Bissonnet S,, Houston, TX 198,900.00 «27,765.36 «19,988.48 «246,653.85 19,500 1265 § 105 D 6201 Bissonnet St, Houston, TX 480,000.00 67,005.40 __48,297.67__ 595,243.07 __ 40,000 1488 § 124 TOTAL 3 _1.217,700.00_$ 169,984.32 _$ 122,372.94 $ 1,510,057.26 __104,400 § 3.53 , A. $700,440.00 © Assume ===> 7.0,,0 Proposed Total Rent for 2012/2013 3 1,800,000,00 Arbitrary Amount 257,400.00 0 Assume ===> § 410 D 624,000.00 & Assime ses. § . 1,301 Less: Adjusted Total Rent for 2012/2013 1,510,057 26) A Total $ 4,584,840.00 ‘Asbitrary Amt, __(1,600,000.00) ‘Adaitional Rent Charged $___89,94274 B Difference _$ (18,160.00) BB To account for future increases in property taxes and insurance and major repairs