ACE Preparatory Academy

Charter School

Board of Directors’ Post-Meeting

Materials: 8.28.15

For questions, please contact John Shertzer, ACE Prep Board Chair:

jshertzer@kiwanis.org

MINUTES ACE Preparatory Academy

August 26, 2015 4:00 – 5:30 Speakeasy

Present: Board Members: John Shertzer, Amy Marsh, Roderick Wheeler, Andrea McGordon, Chasity Thompson, Elana Thompson Ex-officio Members: Anna Shults Guests: Anne Eaton Not Present (on phone for part of meeting): Board Members: Curt Merlau Welcome and Call to Order (John Shertzer, Board Chair) The meeting was called to order at 4:03 PM.

- Mission read. - Quorum reached. - Good news shared.

The agenda was approved by unanimous consent. The minutes from the July meeting were approved by unanimous consent. Discussion Items: 1. Board meeting dates set for remainder of 2015 were set: September 30, October 28,

November 18, and December 16. Meetings will continue to be held at the Speakeasy, which is within the zip code of the school. Each meeting will be held at 4:00 PM. (Amy Marsh, Board Secretary)

2. Discussion around Case Study, distributed at June meeting. Case Study involves board involvement in personnel issues and how policy addresses these. (John Shertzer, Chair)

Board Chair Report (John Shertzer, Board Chair) Important that committees meet and give reports to Anna and John on the Friday before board packets are sent out.

Committee Reports 1. Academic Achievement Committee (Curt Merlau, Committee Chair)

- No report this month 2. Finance Committee (Andrea McGordon and Roderick Wheeler)

- Have been seeking banking relationship. Putting together a fiscal policy manual. Head of School has opened an account with National Bank of Indianapolis (NBI) on August 1 to deposit funds from BES. Due diligence on a number of banks in the area has been complete. Finalists are NBI, Chase and Huntington, based on banking relationship and line of credit. NBI has a dedicated not-for-profit division. Conflict of interests with Andrea’s employment were considered. Conversations with banks were conducted by Anna Shults and Roderick Wheeler and should NBI be selected, Andrea McGordon would not hold the banking relationship with ACE Prep. NBI can extend the largest line of credit. See full committee report.

- Motion by Committee (seconded by Chasity Thompson) to approve Recommendation F1: Approval of Primary Banking Institutions and Pursuit of a Line of Credit. Motion approved.

- Motion by Committee (seconded by Chasity Thompson) to approve Recommendation F2: Approval of Anna Shults, Head of School, to transact business to include the borrowings on behalf of ACE Prep. Motion approved.

3. Fund Development Committee (Roderick Wheeler, Committee Chair)

- See Committee Report. Committee is working on messaging. Recruitment is main priority. Presentation planned on fundraising the “ACE Prep way” will be shared next month.

4. Governance Committee (Chasity Thompson, Committee Chair):

- Welcome Anne Eaton. - Establishing formal on-boarding process. - Establishing calendar with critical dates and responsibilities and central repository

on Box to upload and access important documents and committee reports. - Committee chairs should send all reports to Anna by 9.18, 10.16, 11.6, 12.4 - the

Friday in advance of when board packets are sent. - Upcoming events: Midtown Educational Summit at Children’s Museum on

September 28 (family recruitment). October 5 - Get On Board event at Children’s Museum (board recruitment)- both to showcase ACE Prep.

- Committee recommends G3: Approval of E-Risk Director and Officer Insurance and Employee Practices liability insurance through broker Marty Dezelan, Arthur J Gallagher Risk Management Services. Discussion around needing to further review the policy; budget is over by $1200 for this line item. Continuance of this may cause price to go up. See also statute that covers non-profit boards. No vote is taken this month.

Founder Report (Anna Shults, School Founder)

- Anna Shults has new ACE Prep email address, and will discontinue BES email. New website is live. www.aceprepacademy.org

- Promotional materials available to board members to share with potential families and others who could support the school.

- New board member Anne Eaton, approved in executive session of this meeting, is researching background checks for future board members and staff.

At 5:25 PM Board moves into executive session. Motion by Governance Committee to approve Recommendation G1: Approval of Ms. Anne Eaton for a position on the ACE Prep Board of Directors (pending clearance of an expanded background check). Motion approved. Motion by Governance Committee to approve Recommendation G2: Approval of Agreement between ACE Preparatory Academy and Anna Shults as Head of School. Motion approved. The meeting was adjourned at 5:33 pm.

Through rigorous academics, positive character development, and excellence in everything we

do, ACE Preparatory Academy Charter School educates all Kindergarten through Grade 5

students for school success and lives of opportunity.

Goals: 1. Ground ourselves in the mission of ACE Prep – keep it front and center!

2. Approve new member to ACE Prep’s Board of Directors – welcome, Anne!

3. Heed all committee recommendations and approve finance and insurance needs.

4. Officially hire Anna Shults, Founder, as ACE Prep’s Head of School.

AGENDA (Items with a * indicate a reoccurring item.)

Time Item Lead Action Materials

4:00 Welcome*

- Our Mission

- Announcements/Good News!

- Acknowledgement of guests

John

4:07 Initial Business*

- Review of the monthly agenda

- Consent Agenda: Purpose & Process

John

Vote

Discussion

- August agenda

- BES Consent Agenda info

4:09 Carry-Over Business*

- July minutes

John

Vote

- July Minutes

4:10 Board Expansion John Vote - Recommendation #G1

4:14 Head of School Agreement John Vote - HOS Agreement

- Recommendation #G2

4:18 Future Meetings Amy Discussion - Personal calendars

4:22 Case Study: Governance vs

Management

John Discussion - BES Case Study (from June)

4:34 Finance Committee Report*

Recommendations:

- Banking options & Line of Credit

- Credit Card

Andrea

Roderick

Roderick

Vote

Vote

- Recommendation #F1

- Recommendation #F2

4:44 Governance Committee Report*

Recommendations:

- D&O/EPLI Insurance

Chasity

Chasity

Vote

- Recommendation #G3

4:49 Academic Achievement Committee*

Report

Curt Discussion

4:53 Board Chair Report* John Discussion

4:57 Head of School Report* Anna Discussion

5:01 Fund Development Committee Report* Roderick Discussion - Fund Dev Committee Report

Board Development*

- Fundraising 101: The ACE Prep Way

Roderick

Elana

Training &

Discussion

5:27 Questions & Closing Thoughts* John Discussion

5:30 Adjournment* John

ACE Prep Board Meeting

August 26, 2015 4:00 PM – 5:30 PM

1

Addressing Current Banking Service Needs for

ACE Preparatory Academy

July 7, 2015

Presented by:

Cindy Taylor Vice President

Nonprofit Services CRA Officer

317.261.970 (phone) 317.261.9655 (fax)

cindytaylor@nbofi.com (email)

Carole Veatch Vice President

Treasury Management 317.261.9704 (phone)

317.261.9644 (fax) caroleveatch@nbofi.com (email)

2

3

Banking Center Locations

The primary business activities of The National Bank of Indianapolis are located in the state of Indiana. We offer several deposit options for our clients which include our banking centers.

A listing of our 12 Banking Center locations and their hours is included in the information below: Downtown 107 N. Pennsylvania Street, Suite 100 317 261-9750 Monday - Friday 8:30AM - 5:00PM Northwest 8451 Ditch Road 317 251-3000 Monday - Friday 8:30AM - 5:30PM Saturday 9:00AM - 12:00PM Chamber of Commerce 320 N. Meridian Street Suite 100 317 261-9777 Monday - Friday 8:30AM - 5:00PM Greenwood 1689 West Smith Valley Road 317 882-8200 Monday - Friday 8:30AM - 5:30PM Castleton

6807 E. 82nd Street

317 598-9000

Monday - Friday 8:30AM - 5:30PM

Saturday 9:00AM - 12:00PM

Meridian-Kessler 4930 N. Pennsylvania Street 317 255-5500 Monday-Friday 8:30AM – 5:30PM One America One American Square, Suite 100 317 261-3250 Monday – Friday 8:30AM – 5:00PM Carmel 613 E. Carmel Drive 317 818-3000 Monday – Friday 8:30AM – 5:30PM Saturday 9:00AM – 12:00 PM West Carmel / Zionsville 10590 N. Michigan Rd. 317 876-7200 Monday – Friday 8:30AM – 5:30PM Saturday 9:00AM – 12:00PM Westfield / Carmel 2714 E. 146th Street 317 815-8700 Monday – Friday 8:30AM – 5:30PM Saturday 9:00AM – 12:00PM

Village of West Clay 2410 Harleston Street 317 873-2000 Monday – Friday 8:30AM – 5:30PM Saturday 9:00AM – 12:00PM Geist / Fishers 11701 Olio Road 317 849-9800 Monday - Friday 8:30AM - 5:30PM Saturday 9:00AM - 12:00PM

Additional ATM Locations

City Market*

222 East Market St. Meridian Mark II 11711 N. Meridian St. Parkwood Crossing* 800 E. 96th St. *WITHDRAWAL ONLY ATMs

4

EXECUTIVE SUMMARY The National Bank of Indianapolis appreciates the opportunity to provide recommendations for banking services to ACE Preparatory Academy. Our goal is to build a long-term relationship with you to achieve and enhance the financial objectives of the organization.

Nonprofit Banking Services

As the largest locally owned bank in Indianapolis, we are dedicated to the support of our local community. The National Bank of Indianapolis recognizes the important role played by nonprofit organizations in our community. For that reason, we have developed a comprehensive array of special services designed to accommodate the banking needs of your organization. Our nonprofit clients benefit from the following features:

Ability to earn interest on all accounts

Full range of Treasury Management Services

Investment Management Services

Credit facilities to support a variety of borrowing needs

Our in-depth understanding of the often unique needs of our clients and our responsiveness to those needs have been key in our ability to develop banking relationships with nearly one-third of the nonprofit organizations in our community. At The National Bank of Indianapolis, we believe that client retention is an effective measurement for how we are reaching our goal of providing superior service. And so, annually, we measure client retention in our various divisions. Each year, the client retention rate in our Nonprofit Services division exceeds 97%.

5

ACE Preparatory Academy REQUEST FOR PROPOSAL FOR BANKING SERVICES

Name of Financial Institution: The National Bank of Indianapolis

Headquarters Address: 107 N. Pennsylvania Street, Suite 600, Indianapolis, IN 46204

Business Phone: 317.261.9740

Federal IRS ID # 35-1904483 The National Bank of Indianapolis has designated Cindy Taylor to be the primary contact for the ACE Preparatory Academy banking relationship. Cindy will work with Carole Veatch to meet your depository and treasury management needs. Both Cindy and Carole are supported by client support teams, who assist with daily administration of our client accounts. They will work closely with you and your staff to establish and maintain the relationship. Cindy Taylor, Vice President, Nonprofit Services, CRA Officer 317.261.9740 cindytaylor@nbofi.com Cindy is a Relationship Manager in the Bank’s Nonprofit Services division and has been in banking for the past 35 years. She began her career in Residential Mortgage banking where she processed, originated and sold loans in the secondary market. After joining the bank in 1998, Cindy was instrumental in crafting our First Step Mortgage product for low to middle income borrowers, as well as training new loan officers and administering the FHLB down payment assistance program. She is the 2013 recipient of the FHLB of Indianapolis’ Community Spirit Award for the State of Indiana. Since 2005, Cindy has been an advisor for nonprofit clients, successfully assisting more than 250 organizations with their entire banking relationship, to include depository and lending needs. She continues to serve our community as a board member, finance committee member and neighborhood volunteer; working as a catalyst for positive change in Indianapolis. Carole Veatch, Vice President, Treasury Management 317.261.9704 caroleveatch@nbofi.com Carole began her banking career in 1988 as a financial analyst for BancFlorida in Naples. She later joined The National Bank of Detroit (later Bank One) as an Investment Marketing Officer in the Capital Markets Division of Large Corporate Lending, where she specialized in municipal accounts. She joined the Treasury Management Department of The National Bank of Indianapolis in 2001. Ms. Veatch is a member of the Treasury Management Association of Indiana. She holds her Bachelor of Science Degree in Business Administration, which was conferred by the University of Florida.

6

1. Describe your institution’s customer service philosophy. The National Bank of Indianapolis was founded in 1993 with the vision of providing an extremely high level of specialized service in a very personalized manner to professionals, executives, small to mid-size businesses and nonprofit organizations. Our dedication to superior service and extraordinary responsiveness will never be compromised. Should The National Bank of Indianapolis be selected as the school’s banking partner, we would work with you to develop a transition plan that would entail very flexible assistance designed to meet the training needs of your organization. Our team will work with your staff to ensure seamless migration based upon the most convenient timing for your organization’s schedule. It is important to note that regular meetings are scheduled with our clients to ensure that all accounts and services are meeting your expectations. We pride ourselves on taking a proactive approach with our clients, as our ultimate goal is to build long-lasting client relationships. We understand that the ability to deliver superior service is key to a great working relationship. Establishing a partnership with ACE Preparatory Academy is a high priority for all of us here at The National Bank of Indianapolis.

2. Are there any recent or foreseen merger or acquisition plans? Since the early 1990s, many major banks in Indianapolis have been sold to large out-of-state financial holding companies. Recognizing the need for our community to be supported by a locally owned national bank, The National Bank of Indianapolis opened its doors in 1993. As a highly capitalized bank supporting strategic growth in a constantly evolving industry, the vast majority of The National Bank of Indianapolis shareholders are concentrated in the Indianapolis metropolitan area - not Wall Street. It is our shareholders intention to continue to grow and maintain our status as the largest locally owned bank in Indianapolis. There is currently no pending merger, sale or reorganization of our bank.

3. Describe your bank’s formal disaster recovery plan. How quickly will backup facilities be activated?

The National Bank of Indianapolis is a privately held corporation, and for security reasons, does not disclose certain sensitive information, including its business continuity plan. However, the Bank is subject to regulatory oversight by the Office of the Comptroller of Currency (OCC), a division of the US Department of Treasury, and has a regulatory requirement to maintain and test a business continuity plan.

4. Explain the financial strength of your Bank The National Bank of Indianapolis is well capitalized and has no collateralization requirement by the Indiana State Department of the Treasury. The current filing of FFIEC 031 for March, 2015 by the Board of Governors of the Federal Reserve System, Federal Department of Insurance Corporation, Office of the Comptroller of the Currency is available at www.OCC.gov.

5. What is the bank’s annual percentage yield earned for the requested depository accounts?

All of our nonprofit accounts are interest bearing. Currently our Charitable Checking Account pays an annual percentage yield of 0.05% to 0.10% and the NFP Money Market Savings account pays and annual percentage yield of 0.05% to 0.20% on a tiered schedule, based on the average collected balance.

7

6. Describe the online services available to your nonprofit clients. The National Bank of Indianapolis recommends our Internet application Corporate Snapshot. Corporate Snapshot Any retail client of The National Bank of Indianapolis, using a personal computer with a modem, an Internet Service Provider and a secure browser (like Netscape navigator, or Microsoft Internet Explorer) can obtain safe and convenient access to your accounts 24 hours a day. See the attached Corporate Snapshot detail

7. What security features are in place to minimize the risk of unauthorized online transactions?

The National Bank of Indianapolis is committed to offering its clients tools to protect accounts from fraudulent activity. We recommend that ACE Preparatory Academy consider utilizing both Positive Pay and ACH Debit Block and Filter to help protect against both check and ACH Debit fraud. See the attached Positive Pay and ACH Debit Block and Filter detail

Positive Pay One of the strongest defenses available to prevent check fraud is Positive Pay. It enables you to monitor and control the checks presented against your accounts so that only authorized items are paid. As the processing of checks is governed by the Uniform Commercial Code and Regulation CC, the timely processing of items is critical to protection of all parties involved in the check disbursement process. With your busy schedule, Positive Pay gives you the assurance that your account is automatically being monitored daily for possible fraudulent checks. With our Positive Pay Service:

You upload issued check data in a simple CSV file format via our online portal each time checks are issued on your account.

As checks are presented for payment, our Positive Pay system matches each check’s number and dollar amount against register information.

Checks matching the file are paid without any further review.

Exception Checks will be presented to you to via email or telephone call for your pay or return decision by 3:00 p.m.

Exception Checks will be returned if we do not receive your decision by the deadline.

Key Benefits of Positive Pay:

Increased check fraud protection.

Monitor and detect unusual activity

Reduced disbursement risk due to meeting check return deadlines.

Improves your account reconciliation process by detecting errors prior to month end.

With Positive Pay, the school is entitled to use Account Reconciliation and ACH Debit Block and Filter at no additional cost.

8

ACH Debit Block and Filter Failure to monitor bank accounts daily for fraudulent transactions increases your organization’s risk dramatically. Protect your organization’s checking and money market savings accounts with our ACH Debit Block and Debit Filter Services. ACH Debit Block will stop the posting of all ACH debit transactions to a designated checking and money market savings accounts. Any ACH debit transaction that attempts to post to the designated account will be returned as unauthorized. You have the option to stop the posting to your account of all ACH debits, all ACH credits or all ACH transactions. ACH Debit Filter allows the posting of only pre-defined authorized ACH debit transactions to your account. You provide us with the information on companies you have authorized to electronically debit your checking account and The National Bank of Indianapolis will post only ACH debit transactions from those companies to your account. All other ACH debit transactions will be returned to the transaction originator as unauthorized- after your review and confirmation that they should not be paid. The ACH Debit Filter module allows a maximum of eight ACH Company ID numbers to be entered. In the event that the church needs more than eight company ID’s, a complimentary zero balance account will be set up to house the excess ID numbers. Failure to monitor bank accounts daily for fraudulent transactions increases your organization’s risk dramatically. Protect your organization’s checking accounts with our ACH Debit Block and Debit Filter Services.

8. What is the process for initiating wire transfers? Via Wire Transfer, the school can utilize the secure and reliable Federal Reserve Bank funds transfer system to quickly send or receive funds. You may request wires via telephone, email or in person. A bank controlled call back procedure for all manual wire transfers insures that only authorized individuals in your organization can request a wire transfer of your organization’s funds.

9. Describe how system questions, technical questions, and general customer service will be handled.

System and technical questions can be directed to our Treasury Management Product Support Team Associates for assistance. Our Product Support Team Associates are local and can be reached by phone at (317) 261-0333 or email at TreasuryManagement@nbofi.com from 8:00 a.m. to 5:00 p.m. EST. As mentioned previously, Cindy Taylor will be the relationship manager, her client support team in nonprofit services will be available to assist with general customer service questions or assistance.

10. Is intra-day information available online? Yes, throughout the day items will post to the account which can be viewed online via our Corporate Snapshot online banking product.

9

11. What on-site training would the bank provide to ACE Preparatory Academy for the operation and use of the bank’s services and automated systems?

Our transition plan entails very flexible assistance designed to meet the training needs of ACE Preparatory Academy. As mentioned previously, The National Bank of Indianapolis has identified Cindy Taylor, Carole Veatch and their support teams, to ensure a seamless migration based upon the most convenient timing for your organization’s schedule. The migration of treasury management services is completed via in person meetings between the client and the appropriate specialist from the Bank. Subsequent training can be provided with the addition of new staff or as a “refresher’ to current staff at no additional cost. We understand that the ability to deliver superior service is key to a great working relationship. Establishing a partnership with ACE Preparatory Academy is a high priority for all of us at The National Bank of Indianapolis. To ensure a seamless migration, below is a sample transition plan:

Establish new deposit accounts

Account Titles, Authorized Signers, and Tax ID

Receive special instructions

Order Supplies (checks, deposit tickets, etc.)

Provide transition letters for any authorized direct deposit/debit providers

Setup Corporate Snapshot online banking

Process credit card application and request cards

Positive Pay

Complete and execute Positive Pay application and agreement

Schedule date for on-site training and installation

ACH Debit Block/Filter

Complete and execute ACH Debit Block/Filter agreement

Eportal Payment/Commerce Capture

Complete and execute application and agreement

Schedule date for on-site training and installation

10

15. Based on the information you have provided, we would recommend our Charitable Checking Account for operating account needs. This account pays interest on a tiered basis on all balances. If your organization maintains a minimum average collected balance of $3,500.00 and clears 60 or fewer checks or debits and deposits 100 or fewer items each month, there are no minimum balance fees assessed. For checks or debits over 60, there is a $.50/item charge and for deposits or credits over 100, there is a $.25/item charge. Additionally as the activity level increases the account type may be upgraded to take advantage of no minimum balance fees. See attached fee schedule The National Bank of Indianapolis recommends that ACE Preparatory Academy utilize our NFP Money Market Savings account. Our high yielding money market savings account is the ideal companion for any of our nonprofit checking accounts. When combined with any checking account, transfers can be made online or by telephone at no additional charge* * Limited to 6 transaction per statement cycle

16. How long will the quoted banking service charge rates guaranteed?

The National Bank of Indianapolis would agree to keep fees at the proposed level for at least 12 months.

17. Please provide references that are of similar scope of service of ACE Preparatory Academy.

See attached Reference letter

18. Please provide a list of insurance carried that protects the bank against crime and theft. Please include insurance carried, amount covered and insurance underwriter.

The National Bank of Indianapolis does have insurance coverage for crime and theft. Our policy is monitored by our Board of Directors as well as the OCC to make sure we have the appropriate amounts.

19. Please provide terms for establishing an operating line of credit to support the reimbursable grant from the State of Indiana.

See attached Term Sheet

11

ADDITIONAL RECOMMENDED SERVICES Below are the additional services that the Bank offers to its nonprofit clients to enhance the overall relationship. ePayment Portal The National Bank of Indianapolis’ ePayment Portal would allow the school to provide each family with a secure electronic method to pay via credit card and/or ACH electronic check. Key Benefits of ePayment Portal

A branded electronic payment service- no integration required.

Accepts payments via credit card or an ACH “electronic check”.

Your member has the option to make a one-time payment or scheduled payments.

Optional or required customized payment data fields may be added.

System or user defined export function for daily payment file.

Checking and credit card account numbers are not stored on your system- no need to worry about credit card PCI compliance issues.

Corporate Credit Cards The National Bank of Indianapolis offers its clients the option of a no annual fee Visa Business or and automatic Cash Rewards Visa Commercial Card. Our Cash Rewards Commercial VISA Card is designed to give our clients a simplified online solution combining self-managed spending controls and detailed reporting per cardholder. The administrator of the credit card account also has the ability to implement spending controls via merchant category block and defining spending limits per cardholder. The administrator can view and track purchases by cardholder through our online application, called eZBusiness. An additional expense management module linked to eZBusiness and interfaced with the clients predetermined general ledger accounts can expedite both the expense report submission process, as well as the approval process. Credit card statements are consolidated but the transactions are separated by cardholder. Should Gennesaret select our Cash Rewards Commercial VISA Card, the organization will earn 1% on every dollar you spend, up to $1,500, annually. Your rewards are paid directly to your organization, so you never have to worry about your rewards expiring. Our VISA Business Card, with no annual fee, provided you a tool to manage your organization by using a secure widely recognized and accepted network to pay for travel and entertainment expenses as well as simplifying the ability to make purchases and order business supplies. Our credit cards are managed locally, providing superior personalized service to our Visa credit card clients via our local or toll free number. Both cards feature the same easy payment options including, paying in person at one of our Banking Centers, mailing a check, paying by phone, or paying online through our secure website. In addition, the cards can be secured by the assets of the organization and will not require a board member guarantee.

12

Commerce Capture Commerce Capture gives you the ability to electronically scan checks and securely deposit into your account at The National Bank of Indianapolis without leaving your office. Deposits can be made at any banking center until 5:30 for same day credit. Checks can also be scanned for deposit to the bank through Commerce Capture, our Remote Deposit system. Commerce Capture allows you the ability to electronically scan checks and securely send the images to The National Bank of Indianapolis for immediate deposit without leaving your office. The system reads each document and saves the information that is needed for further processing. Key Benefits of Commerce Capture

Convenience. Deposits can be captured at your location and sent to the bank electronically.

Extended access to make deposits.

Reduced or eliminated courier service transportation costs.

Improved accuracy of deposits.

Export of information directly into QuickBooks

Electronic filing of stored digital images On-site set up and training

CONCLUSION We trust that the information contained herein highlights the primary benefits, as well as the relationship benefits, which would be received by ACE Preparatory Academy in developing its relationship with The National Bank of Indianapolis. Our employees, officers, and board of directors are dedicated to the support of our local community. We are committed to partnering with our nonprofit clients to help promote the missions of their organizations. Thank you again for the opportunity to review the banking needs of your organization and we welcome the opportunity to discuss the information provided in greater detail. We invite you to experience what a nonprofit banking relationship should be.

Confidential Information "Confidential Information" of a party shall mean all confidential or proprietary information and documentation of such party,

13

whether or not marked as such. Confidential Information shall not include: (i) information which is or becomes publicly available (other than by the party having the obligation of confidentiality) without breach of this Agreement; (ii) information independently developed by the receiving party; (iii) information received from a Third Party not under confidentiality obligation to the disclosing party; or (iv) information already in the possession of the receiving party without obligation of confidence at the time first disclosed by the disclosing party. The parties acknowledge and agree that the substance of the negotiations of this Agreement, and the terms of this Agreement are considered Confidential Information subject to the restrictions contained herein. Obligations of the Parties Except as permitted under this section and applicable law, neither party shall use, copy, sell, transfer, publish, disclose, display, or otherwise make any of the other party's Confidential Information available to any Third Party without the prior written consent of the other party. Each party shall hold the Confidential Information of the other party in confidence and shall not disclose or use such Confidential Information other than for the purposes contemplated by this Agreement and, to the extent that Confidential Information of Customer may be subject to the Privacy Regulations, as permitted by the Privacy Regulations, and shall instruct their employees, agents, and contractors to use the same care and discretion with respect to the Confidential Information of the other party or of any Third Party utilized hereunder that each party require with respect to their own most confidential information, but in no event less than a reasonable standard of care, including the utilization of security devices or procedures designed to prevent unauthorized access to such materials. Each party shall instruct its employees, agents, and contractors of its confidentiality obligations hereunder and not to attempt to circumvent any such security procedures and devices. Each party's obligation under the preceding sentence may be satisfied by the use of its standard form of confidentiality agreement, if the same reasonably accomplishes the purposes here intended. All such Confidential Information shall be distributed only to persons having a need to know such information to perform their duties in conjunction with this Agreement. A party may disclose Confidential Information of the other party if required to do so by subpoena, court or regulatory order, or other legal process, provided the party notifies the other party of its receipt of any such process, and reasonably cooperates, at the other party’s expense, with efforts of the disclosing party to prevent or limit disclosure in response to such process.

TERM SHEET (Not a commitment to lend for discussion purposes only)

Borrower: ACE Preparatory Academy Indianapolis, Indiana Loan Facility: $250,000 partially secured line of credit. Purpose: To support short term cash flow needs. Term/ Amortization: Monthly interest only, balances due at maturity. Collateral: First security interest in all business assets including but not limited to grants/pledges receivable. Rate: Prime, floating, with a floor rate of 3.75% Fee: $500.00, borrower to pay all 3rd party expenses. Guarantors: NONE Significant Terms & Conditions: 1) Standard Bank loan agreement terms and conditions. 2) Borrower to establish overall banking relationship

with The National Bank of Indianapolis. 3) Annual 30 day clean up on the line of credit. 4) No additional debt without prior bank written

approval. 5) Borrower to maintain a minimum net worth of

$250,000.00, tested annually beginning with the first fiscal year end of operation. 6) Receipt of approved grant award from the State of Indiana.

Financial Reporting: 1) Quarterly internally prepared financial statements.

2) Annual CPA audited financial statements within 120 days of fiscal year end, beginning with the first fiscal year end of operation.