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HomeMy WebLinkAboutItem No. 15 - Norton Science and Language Academy Project - Ground Lease Agreement Page 1 Consent Calendar City of San Bernardino Request for Council Action Date: April 15, 2020 To: Honorable Mayor and City Council Members From: Teri Ledoux, City Manager By:Michael Huntley, Community & Economic Development Director Subject: Norton Science and Language Academy Project – Ground Lease Agreeement Recommendation It is recommended that the Mayor and City Council of the City of San Bernardino, California adopt Resolution No. 2020-70, authorizing the City Manager to execute a lease agreement for the development, establishment, and operation of the Norton Science and Language Academy at 230 South Waterman Avenue. Background The approved Norton Science and Language Academy Project (“Project”) will be located on a vacant site at 230 South Waterman Avenue, on the northwest corner of South Waterman Avenue and East Valley Street. The property is jointly owned by the City and the County of San Bernardino. In 2008, the City and County entered into a lease agreement with the High Deser t Partnership in Academic Excellence Foundation, Inc. (the “Charter School”) to construct and operate a charter school facility at its former Mill Center site. In February 2018, the City and the County filed a lawsuit against the Charter School due to out standing defaults under that lease agreement. On February 25, 2019, the lawsuit between the City, the County, and the Charter School was settled with the approval of the City Council. The settlement agreement contemplated the development of the Project a t its current site, including a County preschool facility and a charter school. Since the adoption of the settlement agreement, the City has completed CEQA review for the Project, the Planning Commission recommended approval of the Project on January 14, 2020, and the City Council adopted the Mitigated Negative Declaration and approved the Project on February 5, 2020. The ground lease for the charter school portion of the site is the last step to effectuate the settlement agreement. Discussion As noted above, the ground lease is the City’s last step to effectuate the settlement agreement between the parties. The settlement agreement included a template ground lease and the proposed ground lease is substantially similar to that template agreement. The ground lease has been amended to reflect the County’s control over the preschool 6689 Page 2 site and the fact that the Charter School is financing the construction of the charter school and preschool through an affiliate entity. The City Attorney’s Office has remained engaged in this process to ensure the City’s interests remain protected in accordance with the intent at the time the settlement agreement was entered. Under the proposed lease agreement, the City and County will act jointly as landlord, with the County taking the lead on certain aspects as the City’s authorized agent. The term begins upon the full execution of the lease and ends 50 years thereafter with a single twenty-year option to extend the term of the lease. In accordance with the settlement agreement, in lieu of rent for the initial 50 -year term, the Charter School, through its affiliate, will construct a modern charter school facility on the charter school site and a new preschool facility on the adjacent parcel. The County shall operate the preschool facility. The Charter School is seeking bond financing to fund the construction of the new charter school and the new preschool facilities on the Property. Financing will only encumber the charter school site. The Charter School will execute a guarantee in favor of the City and the County to secure the obligations under the lease agreement. 2020-2025 Strategic Targets and Goals Resolution No. 2020-70 aligns with Key Target No. 3: Improved Quality of Life. The Project, which requires the proposed ground lease, will establish a new charter school and preschool on a currently vacant property that will provide educational services and programs meeting the educational needs of students within the community through the construction of a new facility that will complement the surrounding developments along the South Waterman corridor. Fiscal Impact Development impact fees associated with the Project will be approximately $578,000. City services will be provided to this project similar to other comm ercial developments in the City and surrounding area. If left vacant, the site would likely result in increased maintenance costs to the City. Conclusion It is recommended that the Mayor and City Council of the City of San Bernardino, California adopt Resolution No. 2020-70, authorizing the City Manager to execute a lease agreement for the development, establishment, and operation of the Norton Science and Language Academy at 230 South Waterman Avenue. Attachments Attachment 1 Resolution No. 2020-70; Exhibit “A” - Ground Lease Ward: All Synopsis of Previous Council Actions: February 25, 2019 The City, the County, and the Charter School entered a settlement agreement, which contemplated a ground lease for the charter 6689 Page 3 school site. January 14, 2020 The Planning Commission adopted Resolution No. 2020-005, recommending approval of the Project. February 5, 2020 City Council approved the project and adopted the Mitigated Negative Declaration. Resolution No. 2020-70 RESOLUTION NO. 2020-70 RESOLUTION OF THE MAYOR AND CITY COUNCIL OF THE CITY OF SAN BERNARDINO, CALIFORNIA, AUTHORIZING THE CITY MANAGER TO EXECUTE A LEASE AGREEMENT ALLOWING THE DEVELOPMENT, ESTABLISHMENT, AND OPERATION OF THE NORTON SCIENCE AND LANGUAGE ACADEMY AT 230 SOUTH WATERMAN AVENUE WHEREAS, the City of San Bernardino (“City”) and the County of San Bernardino (“County”) are owners of certain real property, known as 230 South Waterman Avenue, San Bernardino, California (“Property”). WHEREAS, the Property is the subject of a settlement agreement dated February 25, 2019 between the City, County, and the High Desert Partnership in Academic Excellence Foundation, Inc., (“High Desert”). WHEREAS, the settlement agreement contemplates the development of the Property for a County preschool facility and the Norton Science and Language Academy, a charter school; and WHEREAS, 230 South Waterman Avenue, LLC. (“Tenant”), an affiliate of High Desert, desires to lease the Property from the City and the County with the intent that Tenant sublease the Property to High Desert in order to develop the Property as required by the settlement agreement; and WHEREAS, under the Ground Lease Agreement, High Desert will construct and operate a public charter school facility known as the Norton Science and Language Academy under a charter granted by the San Bernardino County of Board of Education; and WHEREAS, as consideration for the lease of the Property in lieu of rent, Tenant shall construct or have constructed a new preschool facility for the County under the state preschool and federal “Head Start” programs in accordance with a separate Improvement Agreement between the County and High Desert and Tenant shall construct the charter school facility; and WHEREAS, the Project will provide educational services and programs meeting the educational needs of students within the community through the construction of a new facility that will complement the surrounding developments along the south Waterman Avenue corridor; and WHEREAS, an Initial Study of the Project was conducted in accordance with the California Environmental Quality Act (“CEQA”). The analysis indicated that the Project would not have a significant adverse impact on the environment with mitigation; and WHEREAS, the applicant submitted and the Planning Division of the City of San Bernardino accepted an Initial Study/Mitigated Negative Declaration. Pursuant to State CEQA Resolution No. 2020-70 Guidelines, a Notice of Intent to Adopt a Mitigated Negative Declaration for the Project wa s posted on November 30, 2019 for the CEQA-mandated thirty (30) day public review and comment period; and WHEREAS, on January 14, 2020, the Planning Commission adopted Resolution No. 2020-005 forwarding a recommendation that the Mayor and City Council of t he City of San Bernardino, California to: adopt the Mitigated Negative Declaration, approve General Plan Amendment 19-01, Development Code Amendment 19-05, and Conditional Use Permit 19-10; and WHEREAS, on February 5, 2020, the Mayor and the City Council of the City of San Bernardino adopted the Mitigated Negative Declaration, approved General Plan Amendment 19- 01, approved Development Code Amendment 19-05, and approved Conditional Use Permit 19- 10; and WHEREAS, with these prerequisites satisfied, the City, the County, and High Desert have now negotiated the terms of the Ground Lease Agreement that will provide for the construction and operation of the Norton Science and Language Academy as well as the development of a County preschool facility. BE IT RESOLVED BY THE MAYOR AND CITY COUNCIL OF THE CITY OF SAN BERNARDINO AS FOLLOWS: SECTION 1. The above recitals are true and correct and are incorporated herein by this reference. SECTION 2. The terms of the Ground Lease Agreement are in the best interests of the City for the leasing of the property described therein and are hereby approved in substantially the form presented herewith. SECTION 3. The Mayor and the City Council of the City of San Bernardino hereby authorize the City Manager to enter into the Ground Lease Agreement attached hereto as Exhibit A. SECTION 4. The Mayor and the City Council of the City of S an Bernardino further authorizes the City Manager to execute and deliver any and all documents which they may deem necessary or advisable in order to effectuate the purposes of this Resolution, the settlement agreement, and the Ground Lease Agreement. SECTION 5. Severability. If any provision of this Resolution or the application thereof to any person or circumstance is held invalid, such invalidity shall not affect other provisions or applications, and to this end the provisions of this Resolution are declared to be severable. SECTION 6. Effective Date. This Resolution shall become effective immediately. APPROVED and ADOPTED by the City Council and signed by the Mayor and attested by the Acting City Clerk this ___ day of __________ 2020. Resolution No. 2020-70 John Valdivia, Mayor City of San Bernardino Attest: Genoveva Rocha, CMC, Acting City Clerk Approved as to form: Sonia Carvalho, City Attorney Resolution No. 2020-70 CERTIFICATION STATE OF CALIFORNIA ) COUNTY OF SAN BERNARDINO) ss CITY OF SAN BERNARDINO ) I, Genoveva Rocha, CMC, Acting City Clerk, hereby certify that the attached is a true copy of Resolution No. 2020-___, adopted at a regular meeting held on the ___ day of _______ 2020 by the following vote: Council Members: AYES NAYS ABSTAIN ABSENT SANCHEZ _____ _____ _______ _______ IBARRA _____ _____ _______ _______ FIGUEROA _____ _____ _______ _______ SHORETT _____ _____ _______ _______ NICKEL _____ _____ _______ _______ RICHARD _____ _____ _______ _______ MULVIHILL _____ _____ _______ _______ WITNESS my hand and official seal of the City of San Bernardino this ___ day of ____________ 2020. Genoveva Rocha, CMC, Acting City Clerk GROUND LEASE AGREEMENT COUNTY: COUNTY OF SAN BERNARDINO 385 N. Arrowhead Avenue San Bernardino, CA 92415-0831 CITY: CITY OF SAN BERNARDINO 290 N. D Street San Bernardino, CA 92401 TENANT: 230 SOUTH WATERMAN AVENUE, LLC 17500 Mana Road Apple Valley, CA 92307 GUARANTOR: HIGH DESERT PARTNERSHIP IN ACADEMIC EXCELLENCE FOUNDATION, INC. 17500 Mana Road Apple Valley, CA 92307 PROPERTY: Certain real property legally described on Exhibit “A” attached hereto and depicted in the plat on Exhibit “B” and known as 230 S. Waterman Avenue, San Bernardino, California, comprising approximately 15.63 acres COUNTY CONTRACT NO: _________________ RECITALS A. CITY and COUNTY are the owners of that certain real property legally described on Exhibit “A” attached hereto and depicted in the plat on Exhibit “B” and known as 230 S. Waterman Avenue, San Bernardino, California, comprising approximately 15.63 acres (the “Property”). In its capacity as an owner, the CITY appoints the COUNTY as the CITY’s authorized agent to act on behalf of the CITY in the administration of this Lease unless expressly provided otherwise in this Lease and all references to LANDLORD in this Lease shall collectively mean the CITY and COUNTY, provided that unless otherwise expressly provided otherwise in this Lease, the COUNTY shall act as authorized agent for the CITY. For avoidance of doubt, all references to City and County in this Lease shall refer to its respective capacities as the owners of the Property and nothing in this Lease precludes or shall be interpreted to preclude City or County from acting in its respective capacities as regulatory bodies with jurisdiction over the Property. B. TENANT desires to lease the Property from LANDLORD for use as a public charter school with the intent that TENANT sublease the Property to TENANT’s affiliate, High Desert Partnership In Academic Excellence Foundation, Inc., for TENANT’s affiliate to construct certain charter school improvements thereon (“Charter School Improvements”) and to operate a public charter school facility known as the Norton Science and Language Academy under a charter granted by the San Bernardino County Board of Education. TENANT’s affiliate desires to guarantee TENANT’s obligations under the Lease and shall be referred to as the “GUARANTOR.” C. As consideration for the Lease of the Property to TENANT and in lieu of TENANT’s monetary payment of monthly rent for the duration of the initial term of the Ground Lease, TENANT shall construct or have constructed a new preschool facility and site improvements (“Preschool Improvements”) for COUNTY under the state preschool and federal “Head Start” programs in accordance with a separate Improvement Agreement executed by COUNTY and GUARANTOR on even date with this Lease on that certain real property known as 205 Allen Street, San Bernardino, California, comprising approximately 2.23 acres (“Head Start Parcel”), which is owned by the County and the City, which is located adjacent to the Property. D. TENANT or an affiliate of TENANT intends to obtain tax-exempt financing, which shall be used to construct the Charter School Improvements on the Property and the Preschool Improvements on the Head Start Parcel with TENANT’s leasehold interest in the Property to serve as collateral for said financing, provided that, notwithstanding anything to the contrary in this Lease or in any financing documents, this Lease shall not in any way encumber the Head Start Parcel or the Preschool Improvements. REFERENCE PAGES COUNTY: County of San Bernardino CITY: LANDLORD: City of San Bernardino Collectively, the City and the County, provided that for purposes of this Lease, the County shall act as authorized agent for the City unless expressly provided otherwise in this Lease. LANDLORD’S NOTICE ADDRESS: County of San Bernardino Attn: Real Estate Services Department 385 N. Arrowhead Avenue, Third Floor San Bernardino, California 92415-0831 and City of San Bernardino Attn: City Manager 290 N. D. Street San Bernardino, CA 92401 TENANT: 230 South Waterman Avenue, LLC, a California limited liability company TENANT’S NOTICE ADDRESS: 230 South Waterman Avenue, LLC 17500 Mana Road Apple Valley CA 92307 GUARANTOR High Desert Partnership in Academic Excellence Foundation, Inc., a California nonprofit public benefit corporation PROPERTY: Certain real property legally described on Exhibit “A” attached hereto and depicted in the plat on Exhibit “B” and known as 230 S. Waterman Avenue, San Bernardino, California, comprising approximately 15.63 acres USE: Public charter school serving some combination of grades transitional kindergarten (TK) through 12 operating under a charter granted by the San Bernardino County Board of Education and ancillary administrative office uses and for no other purposes LEASE COMMENCEMENT DATE: LEASE TERM: OPTION TO EXTEND LEASE TERM: On the date that the last of the parties has executed this Lease Fifty (50) Years from the Lease Commencement Date unless earlier terminated in accordance with this Lease One (1) Option for Twenty (20) Years on the terms and conditions set forth in the Lease EXHIBITS “A” Property - Legal Description “B” Property - Plat “C” Form of Subordination and Attornment Agreement “D” List of Former County Officials “E” Form of Guaranty of Lease “F” Form of Sublease for Affiliate Transferees LEASE AGREEMENT By this Lease, LANDLORD, as lessor, leases to TENANT, as lessee, and TENANT leases from LANDLORD, the Property on the terms and conditions set forth in this Lease. The Reference Pages, including all terms defined thereon, and Recitals are incorporated into and made a part of this Lease. The LANDLORD and TENANT shall each be referred to as a “Party” and shall collectively be referred to as the “Parties.” 1. PROPERTY. LANDLORD, in consideration of covenants and conditions herein set forth, hereby leases to TENANT and TENANT leases from LANDLORD the Property on the terms and conditions set forth in this Lease. The Property is more particularly described in the legal description set forth on Exhibit “A” and depicted in the plat set forth on Exhibit “B” hereto. The Property is leased to TENANT in AS-IS condition, subject to all easements, reservations, restrictions, rights and rights -of-way. For avoidance of doubt, and notwithstanding anything to the contrary in this Lease, the Parties hereby acknowledge and agree that the Head Start Parcel is not part of the Property leased by TENANT under this Lease and is not subject to this Lease. 2. USE. The Property shall be used only for the Use set forth on the Reference Pages and for no other purpose. TENANT shall not use or permit the use of the Property in a manner that is unlawful or immoral, creates waste or a nuisance, or causes damage to the Property or neighboring properties. TENANT shall not do or permit anything to be done in, on, under , or about the Property which will in any way obstruct, interfere, injure, annoy, or disturb the rights of occupants or visitors to the Property or the neighboring properties. TENANT shall not sell or permit the sale of any alcoholic beverages from the Property. TENANT agrees that any personal property that is stored outside will be stored in a neat and orderly manner Unattractive and/or unsightly outside storage shall not be permitted in public view under any circumstances. TENANT shall not place or permit the placement on the Property or maintain or permit the maintenance on the Property of any modular, portable, temporary, prefabricated, or similar structure during the Term of this Lease. TENANT shall comply with all Applicable Laws related to the use and development of the Property, including the requirements of the Federal Aviation Administration, as may be amended. Upon development of the Charter School Improvements and occupancy of the same on the Property by TENANT, the same shall conclusively be deemed to be fit and proper for the purposes for which TENANT shall use the Property. 3. TERM. A. Term. The obligations of the Parties pursuant to this Lease shall commence on the Lease Commencement Date and shall expire upon the expiration or earlier termination of the Lease Term as set forth in the Reference Pages (“Initial Term”), unless extended as provided in Paragraph B of this Section. B. Option to Extend Term. TENANT shall have one (1) option to extend the Initial Term of the Lease for twenty (20) years (the “Lease Term Extension Option”) in accordance with the following provisions: 1. TENANT shall have one (1) option to extend the Term as to the Property by twenty (20) years (the “Lease Term Extension Option”) on the same terms and conditions as the Lease, except for Monthly Rent for the Property. To exercise the Lease Term Extension Option, TENANT shall provide CITY and COUNTY with concurrent written notice of such exercise no more than eighteen (18) months and no less than twelve (12) months prior to the end of the Initial Term. If the TENANT exercises the Lease Term Extension Option, such term shall be referred to as the “Extended Term.” 2. The Monthly Rent for the Property during the initial year of the Extended Term shall be adjusted by good faith negotiation of the Parties to the fair market monthly rental rate then prevailing based on the monthly rental rate of comparable leased properties in the County of San Bernardino. Thereafter, the monthly rental rate for each subsequent year during the Extended Term shall be increased by a market escalation factor (for instance, a percentage or fixed annual increases) then prevailing for comparable leased properties in the County of San Bernardino (the monthly rental rate for the initial year of the Extended Term and the annual escalation factor shall hereinafter be collectively referred to as the “FMV Rent”). If the Parties have been unable to agree on the FMV Rent for the Property within five (5) months of TENANT's exercise of its option, said FMV Rent shall be determined through arbitration conducted in accordance with the Commercial Arbitration Rules of the American Arbitration Association. If the FMV Rent for the Property is determined by arbitration and TENANT does not, for any reason, agree with such determination, TENANT shall have the right to terminate the Lease b y providing LANDLORD with written notice not later than thirty (30) days after TENANT’s receipt of the arbitration -determined FMV Rent. In the event TENANT does not so terminate the Lease, TENANT shall commence paying the arbitration-determined FMV Rent on the first day of the Extended Term and on the first day of each calendar month thereafter with the arbitration-determined annual escalations on each anniversary of the first day of the Extended Term for the duration of the Extended Term. Unless individually referred to, the Initial Term and the Extended Term, if any, shall hereinafter be collectively referred to as the “Term.” 3. Effect of Default on Extension Option. If TENANT is in Default of this Lease at the time of exercise of the Lease Term Extension Option or at any time thereafter up to the commencement date of the Extended Term, LANDLORD agrees to provide written notice to TENANT of any existing Defaults during such period. If TENANT fails to cure such Default to the reasonable satisfaction of LANDLORD on or prior to the later of six (6) months prior to end of the Initial Term or thirty (30) days after notice, then the Extended Term shall not commence and TENANT’s exercise of the Lease Term Extension Option shall be deemed null and void and this Lease shall automatically expire at the end of the Initial Term. If TENANT is in Default at any time during the final six (6) months of the Initial Term beyond any applicable notice and cure period, then the Extended Term shall not commence and TENANT’s exercise of the Lease Term Extension Option shall be deemed null and void and this Lease shall automatically expire at the end of the Initial Term. For avoidance of doubt, nothing in this paragraph shall limit LANDLORD’s rights to pursue any rights and remedies resulting from any Default occurring at the time of TENANT’s exercise of the Lease Term Extension Option and before the commencement of the Extended Term. 4. CONSIDERATION. A. Rent. In lieu of TENANT’s monetary payment of Monthly Rent for the Property during the Initial Term and as a material inducement the willingness of LANDLORD to enter into this Lease, TENANT shall, at no cost to LANDLORD, construct or have constructed the Preschool Improvements on the separate Head Start Parcel in accordance with a separate Improvement Agreement executed by COUNTY and GUARANTOR on the same date as this Lease (“Improvement Agreement”) and perform or have performed certain obligations regarding the Preschool Improvements , as more specifically set forth in the Improvement Agreement. The Parties agree that the value of the monetary monthly rent for the Property for the duration of the Initial Lease Term is equivalent to the value of the Preschool Improvements to be constructed and the other obligations to be performed by or on behalf of TENANT under the Improvement Agreement. B. Performance by Guarantor. In accordance with the terms of an Improvement Agreement, GUARANTOR shall, on behalf of TENANT, construct the Preschool Improvements on the separate Head Start Parcel in accordance with the Improvement Agreement and perform certain obligations regarding the Preschool Improvements, as more specifically set forth in the Improvement Agreement. The Parties acknowledge and agree that GUARANTOR’s failure to perform GUARANTOR’s obligations under the Improvement Agreement shall not relieve TENANT from TENANT’s obligations to comply with Section 4.A. C. Additional Consideration. As additional consideration for this Lease, TENANT agrees that any improvements that are permitted under this Lease, including but not limited to the Charter School Improvements and all utilities installed at the Property, shall become the property of LANDLORD at the end of the Term or any earlier termination thereof without compensation to TENANT . TENANT shall execute any documentation necessary to transfer such improvements to LANDLORD without encumbrance at the end of the Term or any earlier termination thereof. D. Late Payment Fees and Interest. If any monthly rent or other monetary sums due under this Lease (collectively, “Rents”) are not paid when due and payable, TENANT shall pay to LANDLORD an additional fifty and 00/100 Dollars ($50.00) for each overdue Rent as an administrative processing charge. The Parties agree that this administrative processing charge represents a fair and reasonable estimate of the costs that LANDLORD will incur by reason of the overdue Rent. Acceptance of any administrative processing charge shall not constitute a waiver of TENANT's default with respect to the overdue Rent or prevent LANDLORD from exercising any of the other rights and remedies available to LANDLORD. Rents not paid when due shall bear simple interest from date due at the rate of one and one -half percent (1½%) per month until fully paid. 5. LEASEHOLD ENCUMBRANCES A. Non-Subordination of Landlord Fee Interest and Head Start Parcel. This Lease and all rights and interests of TENA NT or any person claiming through or under TENANT’s leasehold interest herein is and shall at all times be subject and subordinate to LANDLORD’s fee interest in the Property. In no event shall LANDLORD be required to or be deemed to have subordinated or en cumbered any portion of its fee interest in the Property as security for any TENANT financing. In the event of any conflict between any financing and loan documents and this Lease, this Lease shall control and neither TENANT nor any leasehold encumbrance h older shall obtain any greater rights in the Property than the TENANT possess es under this Lease. For avoidance of doubt, and notwithstanding anything to the contrary in this Lease, the Parties hereby acknowledge and agree that, notwithstanding anything to the contrary in this Lease or in any financing documents, this Lease shall not in any way encumber the Head Start Parcel or the Preschool Improvements thereon. B. CONSTRUCTION FINANCING. 1. To finance or refinance development of the Property and the construction of the Charter School Improvements thereon and the construction of the Preschool Improvements on the Head Start Parcel and for no other purpose , TENANT may encumber its leasehold interest in the Property under this Lease to a lender furnishing construction financing to TENANT (or permanent financing to reimburse TENANT for the costs of said construction), provided that in no event shall the Head Start Parcel or the Preschool Improvements be encumbered in any manner . The Parties hereby acknowledge and agree that TENANT shall not have the right to encumber its leasehold interest in the Property to finance any other charter schools, programs, or foundations operated by TENANT or any of its affiliates. The proposed lender or beneficiary of any encumbrance under this Section 5.B must be reasonably approved by LANDLORD (such approved mortgagee or beneficiary shall be referred to herein as “LENDER”), which approval may be subject to terms and conditions reasonably acceptable to LANDLORD, including but not limited to that TENANT is not in Default at the time of approval, all relevant financing documents shall be delivered to LANDLORD for review at least thirty (30) days prior to closing, the Lease controls in the event of any conflict, and LENDER promptly re-conveys all leasehold interest upon repayment. LANDLORD agrees to promptly and diligently review all financing documents provided by TENANT, and shall provide written notice to TENANT of any objections within fifteen (15) business days after delivery. If the encumbrance is approved by LANDLORD, the Parties and LENDER shall execute an agreement in substantially the form attached as Exhibit “C” hereto with respect to such lien or encumbrance (referred to herein as an “Approved Encumbrance”) to confirm the terms of the remainder of this Section B. LANDLORD agrees to execute an estoppel certificate in a form reasonably approved by LANDLORD to certify the status of the Lease and the performance by TENANT of its obligations hereunder. COUNTY’s RESD Director shall have the authority to review encumbrance requests, and if approved, to execute on behalf of LANDLORD the form of Exhibit “C” and an estoppel certificate in a form approved by LANDLORD’s counsel . The CITY hereby authorizes the COUNTY’s RESD Director to execute such documents as an authorized agent for the CITY, provided that the CITY has been given a minimum of ten (10) days prior written notice of such execution. Any encumbrance without LANDLORD's approval shall be void and shall constitute a default under this Lease. LANDLORD’s approval to any one encumbrance shall not constitute a waiver of LANDLORD’s right to require approval to any subsequent encumbrance. LANDLORD hereby consents to the encumbrance of TENANT’s leasehold interest to Wilmi ngton Trust, as trustee under the Indenture of Trust dated as of June 1, 2020 by and between California Enterprise Development Authority, and Wilmington Trust, National Association, pursuant to which the California Enterprise Development Authority Charter School Revenue Bonds (Norton Science and Language Academy Project) Tax -Exempt Series 2020A and California Enterprise Development Authority Charter School Revenue Bonds will be issued to finance the construction of the Charter School Improvements on the Property and the Preschool Improvements on the Head Start Parcel, subject to the parties and said trustee’s execution of a subordination agreement substantially in the form of Exhibit ”C”. 2. Upon default by TENANT under any of the terms of an Approved Encumbrance, subject to the terms of this Lease, LENDER may exercise any rights provided in such Approved Encumbrance, provided that before any sale of TENANT’s leasehold interest, whether under power of sale or foreclosure, LENDER shall give to LANDLORD written notice of the same character and duration as is required to be given to TENANT by the terms of the Approved Encumbrance or the laws of the State of California. 3. If any default under an Approved Encumbrance shall continue after the giving of LENDER’s notice, LANDLORD, prior to sale of the leasehold interest, shall have the right to correct such default at TENANT’s cost, which shall be reimbursed by TENANT upon demand , and/or exercise LANDLORD’s remedies, including but not limited to initiating an action to terminate this Lease, provided that at LENDER’s request, LANDLORD shall enter into a new Lease with LENDER on the same terms as this Lease for the remainder of the term of this Lease. 4. If a sale or foreclosure under an Approved Encumbrance occurs or if the LENDER or its assignee acquires the leasehold interest by assignment in lieu of foreclosure, LENDER or said permitted assignee, as successor in interest to TENANT, will be bound by all the terms of this Lease and will assume all the obli gations of TENANT hereunder, including, but not limited to, TENANT’s obligations in Paragraph 4.A. 5. As long as the Approved Encumbrance remains in effect, a LENDER shall have the same rights as the TENANT has under this Lease, at any time during the Term, to enter the Property to (A) do any act or thing required of TENANT hereunder, within the time TENANT is required to perform such act or thing hereunder, whenever failure to do such act or thing would constitute a default hereunder , provided that prior to any Default, LENDER shall provide written notice to LANDLORD if LENDER acts on behalf of TENANT ; and/or (B) cure any Default; and LANDLORD shall accept such performance or cure by a LENDER as if TENANT had performed. No LENDER shall be required to cure any default of TENANT unless such LENDER has elected to acquire the leasehold interest in writing or via foreclosure or deed in lieu thereof. Any notice to TENANT given pursuant to this Lease, including notice of a default or a termination of this Lease, shall be delivered simultaneously to any such LENDER if LENDER has provided its notice address to LANDLORD. LANDLORD agrees that if TENANT fails to cure any default under the Lease within the time provided for in the Lease, except for defaults due to TENANT’s failure to pay monetary Monthly Rent, TENANT’s failure to comply with Section 4.A of the Lease, or GUARANTOR’s failure to construct and complete the Preschool Improvements on the Head Start Parcel in accordance with the Improvement Agreement for which no additional time shall be granted to LENDER (unless expressly set forth in the Improvement Agreement), LENDER shall have an additional ten (10) business days after LENDER’s receipt of written notice of Default within which to cure such default, provided if such Default is of a nature that it cannot reasonably be cured within ten (10) business days then so long as LENDER commences cure within said ten (10) business days and thereafter diligently prosecutes such cure to completion, (A) if possession of the Property is not required to prosecute and complete a cure of the Default, LENDER shall have a reasonable period to cure such Default, not to exceed 30 days from LENDER’s receipt of the written notice of Default, (B) if possession of the Property is required to prosecute and complete a cure of a Default (other than a Default described in Section 18.A.2 hereof), LENDER shall have a reasonable period to cure such Default, not to exceed such time as reasonably necessary to obtain possession of the Property plus 60 days or (C) LENDER shall have a reasonable period to cure any Default described in Section 18.A.2 hereof not to exceed such time as reasonably necessary to obtain possession of the Property plus 365 days.. 6. LANDLORD shall provide LENDER with notice at the same time that it provides notice to TENANT of any Default, including those that would result in any surrender of the Property or termination of the Lease. No amendment of the Lease that modifies any of its material economic terms, including this Section 5, or the Term shall be valid without LENDER’s prior written consent. TENANT shall be required to obtain such LENDER’s prior written consent prior to the execution of such amendment. 7. If any LENDER acquires TENANT’s leasehold interest in the Property by deed-in-lieu or at a foreclosure of its Approved Encumbrance, this Lease shall continue in full force on the same terms and conditions. Neither LENDER nor its assignee shall assign this Lease, sublease any portion of the Property or appoint an agent to operate any portion of the Property without obtaining the prior written approval of CITY and COUNTY. Such approval shall not be unreasonably withheld, conditioned or delayed so long as the proposed assignee, subtenant or agent has demonstrated substantial experience in the operation of facilities similar to the Charter School Improvements. 8. LANDLORD acknowledges that all or a portion of the improvements to be constructed on the Property will be financed or refinanced by TENANT with proceeds of obligations (“Tax-Exempt Obligations”) issued for the benefit of TENANT the interest on which is intended by TENANT to be excludable from gross income for federal income tax purposes. LANDLORD further acknowledges that, to maintain the federally tax-exempt status of the Tax-Exempt Obligations, TENANT must ensure that the Property (including all improvements thereto) are managed, operated and owned consistent with applicable provisions of the Internal Revenue Code of 1986, as amended (the “Tax Code”), and the Treasury Regulations thereunder (the “Regulations”) for the full term of the Tax-Exempt Obligations. TENANT shall have the sole obligation to comply with such provisions of the Tax Code and Regulations, LANDLORD acknowledges the following as it relates to the Tax-Exempt Obligations: a. LANDLORD and TENANT reasonably expect that the Property (including all improvements thereto) will be used exclusively as a charter school facility that will be managed and operated by TENANT or an affiliate of TENANT for the full term of this Lease. LANDLORD and TENANT further reasonably expect that no third-party manager or service provider will be engaged to manage or operate the Property (including any improvements thereto). LANDLORD and TENANT agree to not change the management, operation or nature of the Use of the Property (including any improvements thereto) prior to 120 days after providing written notice to LENDER of such change in management, operation or nature of the Use. b. LANDLORD reasonably expects that the Property (including all improvements thereto) will be owned by LANDLORD and leased solely to TENANT for the full term of this Lease. LANDLORD agrees to not sell or otherwise dispose of any portion of the Property (including any improvements thereto) (to the extent otherwise permitted under this Lease) prior to 120 days after providing written notice to TENANT of such sale or other disposition. c. LANDLORD agrees to cooperate with TENANT, at no cost to LANDLORD, to provide TENANT with such reasonable information concerning the ownership of the Property (including all improvements thereto) as TENANT may reasonably request from time to time during the term of this Lease for TENANT to maintain the federally tax exempt status of interest on the Tax-Exempt Obligations. 6. MAINTENANCE OF PROPERTY. A. TENANT agrees that it shall have the sole responsibility to repair and maintain all aspects of the Property and keep the Charter School Improvements in good working order, condition, and repair for the duration of the Term and in accordance with all Applicable Laws. The term “Applicable Laws” shall refer to all statutes, laws, ordinances, regulations, codes, rules, standards, and other requirements pertaining to construction, use, operation, and management of the Charter School Improvements and the Property as adopted and enforced by the applicable federal, state, local, regulatory, and judicial authorities (“Governmental Authorities”). Applicable Laws shall include, but is not limited to, the California Building Standards Code as adopted and enforced by the applicable Governmental Authorities . In the event that an Applicable Law is changed during the Term of this Lease in a manner that necessitates an alteration of the Charter School Improvements or the Property, TENANT shall bear the sole cost and expense necessary to comply with such change in the Applicable Law. B. Utilities. TENANT agrees that all utilities, including but not limited to electrical, water, gas, telephone, refuse collection, and sewage disposal to Charter School Improvements and the Property and maintenance of any utility lines or connections shall be the sole responsibility of TENANT at its own cost and TENANT shall pay such costs directly to the utility or service provider. 7. INSURANCE. A. Basic Insurance Requirements. Without in any way affecting TENANT’s obligation to defend and indemnify CITY and COUNTY as herein provided, and in addition thereto, TENANT shall secure and maintain the following types of insurance with the following minimum limits throughout the Term of this Lease: i. Workers’ Compensation/Employers Liability. A program of Workers’ Compensation insurance or a state-approved, self-insurance program in an amount and form to meet all applicable requirements of the Labor Code of the State of California, including Employer’s Liability with $250,000 limits covering all persons providing services on behalf of TENANT and all risks to such persons under this Lease. TENANT agrees that TENANT’s volunteers are required to be covered by accident insurance and/or workers’ compensation. ii. Commercial/General Liability Insurance. TENANT shall carry General Liability Insurance covering all operations performed by or on behalf of TENANT providing coverage for bodily injury an d property damage with a combined single limit of not less than one million dollars ($1,000,000) per occurrence. The policy coverage shall include: 1. Operations and mobile equipment. 2 Products and completed operations. 3. Broad form property damage (including completed operations). 4. Explosion, collapse and underground hazards. 5. Personal injury. 6. Contractual liability. 7. $2,000,000 general aggregate limit. iii. Commercial Property Insurance providing special form insurance coverage for the buildings, fixtures, equipment and all improvements constituting any part of the Property. Said special form insurance shall provide broad coverage concerning potential risks but shall exclude earthquake liability and shall provide limited coverage for flood risks. Coverage shall be sufficient to insure one hundred percent (100%) of the replacement cost of the Charter School Improvements. iv. Automobile Liability Insurance. Primary insurance coverage shall be written on ISO Business Auto coverage form for all owned, hired and non - owned automobiles and passenger vehicles. The policy shall have a combined single limit of not less than one million dollars ($1,000,000) for bodily injury and property damage, per occurrence. If TENANT owns no autos, a non-owned auto endorsement to the general liability policy described above is acceptable. v. Environmental Liability Insurance. Environmental liability insurance with a combined single limit of not less than One Million and 00/100 Dollars ($1,000,000.00) per occurrence. vi. Umbrella Liability Insurance. An umbrella (over primary) or excess policy may be used to comply with limits or other primary coverage requirements. When used, the umbrella policy shall ap ply to bodily injury/property damage, personal injury/advertising injury and shall include a “dropdown” provision providing primary coverage for any liability not covered by the primary policy. The coverage shall also apply to automobile liability. vii. If TENANT performs any construction of the Property, TENANT shall also procure and maintain coverages as follows: 1. For construction contracts for projects over One Million Dollars ($1,000,000) and less than Three Million Dollars ($3,000,000) require limits of not less than Three Million Dollars in General Liability and Auto Liability coverage. 2. For construction contracts for projects over Three Million Dollars ($3,000,000) and less than Five Million Dollars ($5,000,000) require limits of not less than Five Million Dollars ($5,000,000) in General Liability and Auto Liability coverage. 3. For construction contracts for projects over Five Million Dollars ($5,000,000) and less than Ten Million Dollars ($10,000,000) require limits of not less than Ten Million Dollars (10,000,000) in General Liability and Auto Liability coverage. 4. TENANT agrees to require all parties, subcontractors, or others, including, but not limited to, architects, it hires or contracts with in relation to the Lease to provide insurance covering the contracted operations with the requirements in this Section 7 (including, but not limited to, waiver of subrogation rights) and naming COUNTY and CITY as an additional insured. TENANT agrees to monitor and review all such coverage and assumes all responsibility ensuring that such coverage is provided as required here. 5. Course of Construction/Installation (Builder’s Risk) property insurance providing all risk, including theft coverage for all property and materials to be used on the construction project. The insurance policy shall not have any coinsurance penalty. B. Required Policy Provisions. Each of the insurance policies which TENANT is required to procure and maintain as part of this Lease shall include the following provisions: 1. Additional Insured. All policies, except for the Workers’ Compensation, shall contain endorsements naming COUNTY and CITY and their officers, employees, agents and volunteers as additional insureds with respect to liabilities arising out of the TENANT’s use of the Property and TENANT’s performance of its obligations under this Lease. The additional insured endorsements shall not limit the scope of coverage for COUNTY or CITY to vicarious liability but shall allow coverage for LANDLORD to the full extent provided by the policy. Such additional insured coverage shall be at least as broad as Additional Insured (Form B) endorsement form ISO, CG 2010.11 85. 2. Waiver of Subrogation Rights. TENANT shall require the carriers of required coverages to waive all rights of subrogation against COUNTY and CITY and their officers and employees. All general or auto liability insu rance coverage provided shall not prohibit TENANT and TENANT’S employees or agents from waiving the right of subrogation prior to a loss or claim. TENANT hereby waives all rights of subrogation against COUNTY and CITY. 3. Policies Primary and Non-Contributory. All policies required herein are to be primary and non-contributory with any insurance or self -insurance programs carried or administered by LANDLORD. 4. Severability of Interests. TENANT agrees to ensure that coverage provided to meet these requirements is applicable separately to each insured and there will be no cross-liability exclusions that preclude coverage for suits between TENANT and LANDLORD or between LANDLORD and any other insured or additional insured under the policy. 5. Proof of Coverage. TENANT shall furnish Certificates of Insurance to the COUNTY Real Estate Services Department (RESD), administering the Lease on behalf of LANDLORD, evidencing the insurance coverage, including endorsements, as required, prior to the commencement of performance of any work on or use of the Property, and TENANT shall maintain such insurance from the Lease Commencement Date until this Lease is expired or earlier terminated. TENANT agrees to provide at least thirty (30) days written notice to COUNT Y RESD prior to any termination or expiration of said insurance coverage. Within fifteen (15) days of the Lease Commencement Date, TENANT shall furnish a copy of the Declaration page for all applicable policies and will provide complete certified copies o f the policies and endorsements immediately upon request. 6. Acceptability of Insurance Carrier. Unless otherwise approved by COUNTY’s Department of Risk Management, administering the Lease on behalf of LANDLORD, insurance shall be written by insurers authorized to do business in the State of California and with a minimum “Best” Insurance Guide rating of “A - VII”. Insurance provided by a joint powers authority shall be deemed to satisfy the foregoing requirement. 7. Deductibles: Any and all deductibles or self -insured retentions in excess of $10,000.00 shall be declared to and approved by COUNTY’s Risk Management. 8. Insurance Review. Insurance requirements are subject to periodic review by LANDLORD. COUNTY’S Director of Risk Management or designee is authorized, but not required, to reduce, waive or suspend any insurance requirements whenever COUNTY’S Department of Risk Management determine s that any of the required insurance is not available, is u nreasonably priced, or is not needed to protect the interests of LANDLORD. In addition, COUNTY’S Director of Risk Management or designee is authorized, but not required, to change the above insurance requirements to require additional types of insurance coverage or higher coverage limits, provided that any such change is reasonable in light of past claims against LANDLORD, inflation, or any other item reasonably related to LANDLORD risk. Any change requiring additional types of insurance coverage or highe r coverage limits must be made by amendment to this Lease. TENANT agrees to execute any such amendment within thirty (30) days of receipt. Any failure, actual or alleged, on the part of LANDLORD or COUNTY’s RESD or COUNTY’s Department of Risk Management to monitor or enforce compliance with any of the insurance and indemnification requirements will not be deemed as a waiver of any rights on the part of LANDLORD. 9. Failure to Procure Insurance. All insurance required must be maintained in force at all times by TENANT. Failure to maintain said insurance, due to expiration, cancellation, or other reasons shall be cause for LANDLORD to give notice to immediately suspend TENANT’S use of the Property. Failure to reinstate said insurance within thirty (30) days of notice to do so shall be cause for termination and for forfeiture of this Lease, and/or LANDLORD, at their discretion, may procure or renew such insurance and pay any and all premiums in connection therewith, and all monies so paid by LANDLORD shall be repaid by TENANT to LANDLORD upon demand but only for the pro rata period of non-compliance. 10. LANDLORD shall have no liability for any premiums charged for such coverage(s). The inclusion of CITY and COUNTY as additional named insured is not intended to and shall not make a partner or joint venturer with TENANT. 11. TENANT agrees to require all parties or subcontractors, or others it hires or contracts with related to the use of the Property and the performance of TENANT’s obligations hereunder to provide insurance covering the contracted operation with the basic requirements in this Section 7 (including waiver of subrogation rights) and naming COUNTY and CITY as an additional insured. TENANT agrees to monitor and review all such coverage and assumes all responsibility for ensuring that such coverage is provided as required herein. 8. INDEMNIFICATION. TENANT agrees to indemnify, defend (with counsel reasonably approved by CITY and COUNTY), and hold harmless COUNTY and CITY and their respective authorized officers, employees, agents and volunteers, from any and all claims, actions, losses, damages, and/or liability arising out of this Lease or occurring on, in, under or about the Property from any cause whatsoever, including the acts, errors or omissions of any person and for any costs or expenses incurred by COUNTY and CITY on account of any claim except where such indemnification is prohibited by law. This indemnification provision shall apply regardless of the existence or degree of fault of indemnitees. The TENANT’s indemnification obligation applies to the “active” as well as “passive” negligence of COUNTY or CITY but does not apply to the “sole negligence” or “willful misconduct” of COUNTY or CITY within the meaning of Civil Code Section 2782. TENANT further agrees to indemnify, defend (with counsel reasonably approved by CITY), and hold harmless CITY and its respective authorized officers, employees, agents and volunteers, from any and all claims, actions, losses, dam ages, and/or liability arising out TENANT’s construction of Preschool Improvements from any cause whatsoever, including the acts, errors or omissions of any person and for any costs or expenses incurred by CITY on account of any claim except where such ind emnification is prohibited by law. This indemnification provision shall apply regardless of the existence or degree of fault of indemnitees. The TENANT’s indemnification obligation applies to the “active” as well as “passive” negligence of CITY but does not apply to the “sole negligence” or “willful misconduct” of CITY within the meaning of Civil Code Section 2782. County agrees to indemnify, defend (with counsel reasonably approved by CITY ), and hold harmless CITY and its respective authorized officers, employees, agents and volunteers, from any and all claims, actions, losses, damages, and/or liability arising out of the COUNTY’s use of Preschool Improvements for any purpose including operation of its federal Head Start programs from any cause whatsoever, including the acts, errors or omissions of any person and for any costs or expenses incurred by CITY on account of any claim except where such indemnification is prohibited by law. This indemnification provision shall apply regardless of the existenc e or degree of fault of indemnitees. The COUNTY’s indemnification obligation applies to the “active” as well as “passive” negligence of CITY but does not apply to the “sole negligence” or “willful misconduct” of CITY within the meaning of Civil Code Section 2782. 9. EXEMPTION FROM LIABILITY. Neither CITY nor COUNTY shall be liable for any injury or damage to the person or property of TENANT or its employees, contractors, invitees, customers, or any other person on, in, under or about the Charter School Improvements nor the Property, whether such damage or injury is caused by or results from fire, steam, electricity, gas, water or rain, or from the breakage, leakage, obstruction or other defects in pipes, fire sprinklers, wires, appliances, plumbing systems, fixtures, air conditioning systems or lighting fixtures, or from any other cause, whether said injury or damage results from conditions arising on or from Charter School Improvements or the Property. Neither CITY nor COUNTY shall be liable for any damages arising from any act or neglect of any other tenant, licensee, or other occupant or user at the Property or from LANDLORD’s failure to enforce the provisions of any other lease, license, or other occupancy or use agreement at the Propert y. Notwithstanding anything to the contrary in this Lease, neither CITY nor COUNTY shall be liable for any injury or damages to TENANT or its employees, contractors, invitees, customers, or any other persons' business or any loss of income or profit therefrom, or for any special, incidental, consequential, or punitive damages allegedly sustained by TENANT or its employees, contractors, invitees, customers, or any other person. 10. TAXES, ASSESSMENTS, LICENSES AND PARCEL LINES . In the event that TENANT is an entity that qualifies for any tax -exempt status, LANDLORD agrees to cooperate with TENANT to facilitate, at no cost to LANDLORD, TENANT’s efforts to apply for the benefits of any tax-exempt status. TENANT shall pay before delinquency any other real property taxes, assessments, fees, or charges, which may be levied or assessed upon the Property, improvements or fixtures installed or belonging to TENANT and located in or on the Property. TENANT shall also pay all license or p ermit fees necessary or required by law for the conduct of TENANT’s business or operation. 11. CHARTER SCHOOL IMPROVEMENTS A. The Parties anticipate that TENANT will construct or have constructed, at TENANT’s sole cost and expense, the Charter School Improvements, consisting of permanent buildings, improvements and facilities, on the Property, provided however nothing in this Lease requires TENANT to construct or have constructed the Charter School Improvements. For avoidance of doubt, whether the Charter School Improvements are constructed or not, the Lease shall remain in effect on its terms and conditions, including but not limited to TENANT’s obligations in Section 4.A as TENANT’s consideration under this Lease. B. Reserved. C. LANDLORD agrees that TENANT’s construction of the Charter School Improvements shall be determined by TENANT in TENANT’s sole discretion, provided that the Parties anticipate that the construction shall be substantially completed in accordance with the specifications shown in the plans prepared by TENANT and submitted to the City with Conditional Use Permit 19-10 (the “Conditional Use Permit”), but subject to approvals by Governmental Authorities and conformance with the utility, road, grading and drainage requirements of Governmental Authorities. D. If TENANT constructs Charter School Improvements on the Property, TENANT agrees to obtain building permits from the applicable Governmental Authorities for Charter School Improvements and to provide suitable security to LANDLORD for performance and payment of the Charter School Improvements , which security may take the form of any one or more of the following, as determined by LANDLORD, in its reasonable discretion: (1) an irrevocable Letter of Credit in an amount of no less than one hundred ten percent (110%) of the total cost of construction , including any increases due to change orders, (2) a policy of contractor default insurance issued by an insurance company lawfully authorized to issue such policies of insurance in the State of California in an amount of no less than one hundred ten percent (110%) of the total cost of construction , including any increases due to change orders, and which names COUNTY and CITY as an additional insured, and/or (3) performance and payment bonds from the contractor. As used in the preceding sentence, each contractor performance and payment bond shall name CITY and COUNTY as beneficiaries and be (A) in a form acceptable to the LANDLORD, (B) in the amount of no less than one hundred ten percent (110%) of the total cost of construction, including any increases due to change orders, (C) issued by a surety qualified to do business in the State of California, and (D) provide that the surety shall complete the construction in the event that contractor fails to complete the construction of the Charter School Improvements in a reasonably diligent manner. As used in the preceding sentence, “reasonably diligent manner” means construction activity whi ch, after the start of construction, is continued without an interruption of more than sixty (60) consecutive days, or which otherwise allows the TENANT to relocate its operations onto the Property prior to the start of the 2022 -2023 school year (provided that construction has commenced before January 1, 2021 ). The CITY hereby authorizes the COUNTY’s RESD Director to execute an acceptance of any bond(s) or other security provided by or on behalf of TENANT under this Lease so long as the form of security and the surety issuer are acceptable to COUNTY. E. Compliance with Laws. TENANT is a California limited liability company, the sole member of which is a nonprofit public benefit corporation operating a nonprofit charter school. LANDLORD makes no representation with respect to the applicability of public bidding procedures or requirements for the payment of prevailing wages hereunder. The Parties acknowledge and agree that any improvement of the Property by TENANT shall be at TENANT’s sole discretion, sub ject to TENANT’s obligation to indemnify, defend, and hold harmless CITY and the COUNTY as provided in this Paragraph. In the event TENANT contracts for the construction of the Charter School Improvements or any portion thereof, TENANT agrees to comply with the applicable provisions, if any, of the California Public Contract Code regarding bidding procedure and Labor Code regarding general prevailing wages, as determined by TENANT in TENANT’s sole discretion, provided that if TENANT violates any applicable laws, TENANT shall indemnify, defend (with counsel reasonably approved by LANDLORD) and hold harmless COUNTY and CITY and its officers, employees, agents, and volunteers from any claims, actions, losses, damages, and/or liability arising out of the obligations set forth herein. TENANT’s indemnity obligation shall survive the TENANT’s tenancy and shall not be limited by t he existence or availability of insurance. TENANT further agrees to provide LANDLORD with not less than ten (10) days’ written notice prior to the commencement of construction of the Charter School Improvements so that LANDLORD, at the option of LANDLORD, may post a Notice of Non-Responsibility as provided by law. TENANT shall perform any construction in such a manner so that no mechanic's liens or materialmen's liens shall be asserted, or purportedly asserted, against the Property or any improvements thereon. If any such lien shall be asserted, TENANT shall indemnify, defend (with counsel reasonably approved by CITY and COUNTY) and hold harmless CITY and COUNTY in accordance with Section 8 of this Agreement for TENANT’s failure to fulfil its obligations herein. If such liens are asserted, TENANT shall promptly remove said liens within thirty (30) days after its occurrence and if requested by LANDLORD, in LANDLORD’s sole discretion, TENANT shall post a surety bond to release the Property from any mechanic’s liens recorded against the Property. Said bond shall be issued by a surety qualified to do business in California and shall be in an amount prescribed by law. 12. SURRENDER. TENANT shall surrender the Property at the end of the last day of the Term or any earlier termination date, broom clean and free of debris. TENANT shall further surrender all Charter School Improvements at the end of the last day of the Term or any earlier termination date, clean and free of debris and in good operating order, condition and state of repair, ordinary wear and tear excepted. Ordinary wear and tear shall not include any damage or deterioration that could have been prevented by good maintenance practice. TENANT’s obligation shall include the repair of any damage occasioned by the removal, replacement, or remediation of any soil, material or ground water contaminated by TENANT, all as may then be required by any applicable law, ordinance or regulation and/or good practice. 13. CIVIC CENTER ACT. In the event that TENANT constructs Charter School Improvements on the Property, TENANT (or its affiliate) shall comply with the provisions of the Civic Center Act (Education Code section 38131, et seq.) in allowing use of Charter School Improvements by members of the community (e.g., Girl Scouts). For purposes of Civic Center Act compliance, with respect to the Charter School Improvements only, TENANT's Board of Directors shall hold the same powers and obligations applicable to a School District Board of Trustees under Education Code sections 38130-38139 and shall also follow TENANT’s Board Policy and administrative procedures allowing use of school facilities by members of the community. LANDLORD shall forward all Civic Center Act requests it receives for use of Charter School Improvements to TENANT. All proceeds derived from the use of Charter School Improvements pursuant to the Civic Center Act shall be the property of TENANT. 14. CASUALTY. In the event any of the buildings, structures or improvements erected on the Property are vandalized, burglarized, damaged or destroyed during the term of this Lease, TENANT shall, at its sole cost and expense, repair and restore such buildings, structures or improvements to the original condition prior to said damage or destruction. TENANT shall commence the repair and restoration within forty-five (45) days of the event causing such damage or destruction and shall diligently prosecute such work until completion. TENANT agrees to maintain casualty insurance for the Charter School Improvements in accordance with Section 7, INSURANCE. All proceeds of any property insurance maintained by TENANT pursuant to this Lease shall be used to repair and restore the Charter School Improvements, and for no other purpose, without LANDLORD’s express written consent. With respect to the Charter School Improvements, any repair and restoration work shall comply with all the requirements set forth in Section 11, CHARTER SCHOOL IMPROVEMENTS. 15. CONDUCT OF EMPLOYEES. TENANT shall be responsible for the conduct of its employees, volunteers, agents, members, invitees, guests, patrons and spectators in the Charter School Improvements and on the Property. 16. SPECIAL USE COVENANTS AND RESTRICTIONS. A. Hazardous Substances 1. Definitions. The following terms shall have the meanings set forth in this paragraph A of Section 16: i. Applicable Requirements shall mean all laws, rules, regulations, ordinances, directives, covenants, easements and restrictions of record, permits, the requirements of any applicable fire insurance underwriter or rating bureau, and the recommendations of LANDLORD’s engineers and/or consultants, relating in any manner to the subject matter of this Lease now in effect or which may hereafter come into effect. ii. Hazardous Substance shall mean any product, substance, chemical, material or waste whose presence, nature, quantity and/or intensity of existence, use, manufacture, disposal, transportation, spill, release or effect, either by itself or in combination with other materials expected to be on the Property, is either: (i) potentially injurious to the public health, safety or welfare, or the environment, the Property; (ii) regulated or monitored by any governmental authority; or (iii) a basis for potential liability of LANDLORD to any governmental agency or third party under any Applicable requirements or common law theory. Hazardous Substance shall include, but not be limited to fuel, hydrocarbons, petroleum products, gasoline, crude oil or any products or by-products thereof. iii. Reportable Use shall mean the installation or use of any above or below ground (i) storage tank; (ii) the generation, possession, storage, use, transportation, or disposal of a Hazardous Substance that requires a permit from, or with respect to which a report, notice, registration or business plan is required to be filed with, any governmental authority; and (iii) the presence in, on, under or about the Property of a Hazardous Substance with respect to which any Applicable Requirements require that a notice be given to persons entering or occupying the Property or neighboring properties. 2. Use of Hazardous Substances by Tenant. TENANT shall not engage in any activity in, on, under or about the Property which constitutes a Reportable Use of Hazardous Substances without the express prior written consent of LANDLORD, in its sole discretion, and compliance in a timely manner (at TENANT’s sole cost and expense) with all Applicable Requirements. Notwithstanding the foregoing, TENANT may, without LANDLORD’s prior consent, but upon notice to LANDLORD and in compliance with all Applicable Requirements, use any ordinary and customary materials reasonably required to be used by TENANT in the normal course of the Use set forth on the Reference Pages, so long as such use is not a Reportable Use (other than the Reportable Use of a Hazardous Substance in a science lab facility constructed in compliance with Applicable Requirements) and does not expose the Property, or neighboring properties to any meaningful risk of contamination or damage or expose LANDLORD to any liability therefore. LANDLORD may (but without any obligation to do so) condition its consent to any Reportable Use of any Hazardous Substance by TENANT upon TENANT’s giving LANDLORD such additional assurances as LANDLORD, in the reasonable discretion of the COUNTY’s Director of Risk Management, deems necessary to protect itself, the public, the Property, and the environment against damage, contamination or injury and/or liability therefore, including, but not limited to, the installation (and, at LANDLORD’s option, and TENANT’s sole cost and expense) of reasonably necessary protective modifications to the Property. TENANT shall not cause or permit any Hazardous Substance to be spilled or released in, on, under or about the Property (including, without limitation, through the plumbing or sanitary sewer system). 3. Covenants. TENANT, at its sole cost, shall comply with any and all the Applicable Requirements with respect to Hazardous Substances, including but not limited to the following: i. California Health & Safety Code, Division 20, Chapters 6.5, Hazardous Waste Control (inclusive); 6.7, Underground Storage of Hazardous Substances (inclusive); and 6.95, Hazardous Materials Release Response Plans and Inventory (inclusive); ii. California Code of Regulations Title 22, Division 4.5; Title 23, Division 3, Chapter 16, Underground Storage Tank Regulations; and iii. Title 2, Division 3, entitled “Fire Protection and Explosives and Hazardous Materials”, and Title 3, Division 3, Chapter 8, entitled “Waste Management” of the San Bernardino County Code. 4. Duties to Inform. A. TENANT’s Duty to Inform LANDLORD. If TENANT knows, or has reasonable cause to believe, that a Hazardous Substance has come to be located in, on, under or about the Property, other than as previously consented to by LANDLORD, TENANT shall immediately give LANDLORD notice thereof, together with a copy of any statement, report, notice, registration, application, permit, business plan, license, claim, action, or proceeding given to, or received from, any governmental authority or private party concerning the presence, spill, release, discharge of, or exposure to, such Hazardous Substance including, but not limited to, all such documents as may be involved in any Reportable Use involving the Property to be followed up in writing within two (2) days. TENANT will provide to LANDLORD, prior to the termination of this Lease, a soil test and a fuel tank test that will indicate if any leakage has occurred from any tank located on or under the Property and used by TENANT. If any leakage is found, TENANT shall repai r the tanks and remove any contaminated soil at TENANT’s sole cost and expense. B. COUNTY’s Duty to Inform TENANT and CITY. If COUNTY knows, or has reasonable cause to believe, that a Hazardous Substance has come to be located in, on, under or about the Property, other than as previously consented to by TENANT or CITY, respectively, shall immediately give CITY and TENANT notice thereof, together with a copy of any statement, report, notice, registration, application, permit, business plan, license, claim , action, or proceeding given to, or received from, any governmental authority or private party concerning the presence, spill, release, discharge of, or exposure to, such Hazardous Substance including, but not limited to, all such documents as may be invo lved in any Reportable Use involving the Property. 5. Indemnification. TENANT shall indemnify, protect, defend (with counsel reasonably approved by LANDLORD) and hold CITY and COUNTY, their officers, agents, employees, and volunteers and the Property, harmless from and against any and all damages, liabilities, judgments, costs, claims, liens, expenses, penalties and loss of permits (including CITY and COUNTY’s attorneys' and consultants' fees) arising out of or involving any Hazardous Substance generated, possessed, stored, used, transported, or disposed in, on, upon, or at the Property by or for TENANT or by anyone under TENANT’s control. TENANT’s obligations under this paragraph shall include, but not be limited to, the effects of any contamination or injury to person, property or the environment created or suffered by TENANT, and the cost of investigation (including consultants' and attorneys' fees and testing), removal, remediation, restoration and/or abatement thereof, or of any contamination therein involved, and shall survive the expiration or earlier termination of this Lease. No termination, cancellation or release agreement entered into by LANDLORD and TENANT shall release TENANT from its obligations under this Lease with respect to Hazardous Substances, unless specifically so agreed by LANDLORD in writing at the time of such agreement. 6. Right to Perform Tests. At any time prior to the expiration of the Term, upon no less than ten (10) days prior written notice, LANDLORD shall have the right to enter upon the Property in order to conduct tests of air, water, and soil. 7. Soil Removal by TENANT. LANDORD and TENANT agree that TENANT shall remove any soil that is determined to have concentrations of lead contamination in excess of 80 mg/kg (the “Remediation Standard”) as part of TENANT or GUARANTOR’s performance of its obligations under Section 4.A of this Agreement. Upon completion, TENANT shall provide documentation from a third-party consultant demonstrating compliance with the Remediation Standard to the reasonable satisfaction of LANDLORD. B. Charter Authorization. Before commencing its operation of the Charter School Improvements and during the entire Term of this Lease, TENANT shall acquire, provide and maintain a Charter with the San Bernardino County Board of Education, or such other authorizer as permitted under California law, which shall include renewal or appeal determinations by the State Board of Education, if any. Failure to comply with this provision will constitute grounds for Default under Section 18, DEFAULT and subject to Section 19, DISPUTE RESOLUTION. C. Rules and Regulations. TENANT agrees to abide by, keep and observe the conditions imposed by the San Bernardino County Superintendent of Schools, if any, regarding the management, safety, care, cleanliness of the grounds, parking areas, and the preservation of good order, as well as conditions necessary for the convenience of other tenants, occupants, or visitors to the Charter School Improvements and the Property. D. Auctions. Except for an auction that is conducted for charity purposes and which does not involve the sale of any school equipment or trad e fixtures, TENANT shall not conduct, nor permit to be conducted, either voluntarily or involuntary, any auction on the Property without LANDLORD’s prior written consent. Notwithstanding Section 22, LANDLORD shall not be obligated to exercise any standard of reasonableness in determining whether to consent to any such auction. 17. CONDEMNATION. If the Property or any part thereof are taken under the power of eminent domain, this Lease shall terminate as to the part so taken as of the date the condemning authority takes possession thereof. If more than twenty percent (20%) of the floor area of the Charter School Improvements or more than fifty percent (50%) of the surface area on the Property but not occupied by any building, is taken by condemnation, TENANT may, at TENANT's option, terminate this Lease. If TENANT elects to exercise its option to terminate this Lease pursuant to this paragraph, TENANT shall give written notice of termination to LANDLORD within thirty (30) days after the condemning authority takes such possession and this Lease shall terminate sixty (60) days thereafter. If TENANT does not exercise TENANT’s right to te rminate this Lease, then this Lease shall remain in full force and effect. Any compensation awarded as damages for the taking of the Property, together with any severance damage, shall be the joint property of the CITY and LANDLORD, except that any compensation awarded for TENANT's Charter School Improvements, trade fixtures, equipment and moving costs shall be paid to TENANT. 18. DEFAULT. A. Definitions. A “Default” shall refer to any failure by TENANT to observe, comply with or perform any of the terms, covenants, conditions or rules applicable to TENANT under this Lease. The term “Breach” shall refer to the occurrence of any one or more of the following Defaults, and, where a grace period for cure after notice is specified herein, the failure of TENANT to cure such Default prior to the expiration of the applicable grace period: 1. TENANT’s failure to comply with Section 4.A of the Lease or any default of GUARANTOR under the Improvement Agreement. 2. Other than regular (e.g., summer) break periods, vacating the Property without the evident intention to reoccupy same, an abandonment of the Property, notice of intent to abandon Property expressed in written notice, failing to continuously and uninterruptedly operate the Charter School Improvements for the Use, or TENANT’s failure to secure and continuously maintain a charter for the Charter School Improvements in accordance with Section 16.B of this Lease. 3. TENANT’s failure to make any monetary payment of Monthly Rent or any other monetary payment required to be made by TENANT hereunder as and when due where such failure continues for a period of three (3) days or more after it is due, the failure of TENANT to provide LANDLORD with reasonable evidence of insurance or surety bond required under this Lease where such failure continues for a period of ten (10) days or more, or TENANT’s failure to fulfill any obligation under this Lease which poses an immediate threat to life or property, where such failure co ntinues for a period of ten (10) days or more after notice to TENANT, provided, however, that if the nature of the foregoing default is such that additional time is reasonably required to cure such default, except as to the monetary payment of Monthly Rent, an extension of the applicable cure periods in this Section 18.A.3 may be requested by TENANT in writing prior to the expiration of the stated cure period ; in which case, LANDLORD may, in its sole and absolute discretion, extend the applicable cure period for a reasonable time as agreed in writing by LANDLORD. In the event LANDLORD serves TENANT with a Notice to Pay Rent or Quit pursuant to the California Unlawful Detainer statutes, such Notice to Pay Rent or Quit shall also constitute the notice required by this subsection. 4. The failure by TENANT to provide LANDLORD with reasonable written evidence (in duly executed original form, if applicable) (in compliance with such minimum standards as may be promulgated by LANDLORD) of (a) compliance with Applicable Requirements per Paragraph A of Section 16 concerning Hazardous Substances, (b) the rescission of an unauthorized assignment or subletting, (c) an executed guaranty substantially in the form of Exhibit “E” attached hereto and incorporated herein by reference for the performance of TENANT’S obligations under this Lease, if required by the Reference Pages, or (iv) any other documentation or information which LANDLORD may reasonably require under the terms of this Lease, where each of the foregoing failures continues for a period of twenty (20) days or more following written notice by LANDLORD. 5. A Default by TENANT as to any other terms, covenants, conditions or provisions of this Lease, or of the rules applicable to the Charter School Improvements that are to be observed, complied with or performed by TENANT , including but not limited to, the Conditional Use Permit, other than those described in the preceding subparagraphs (1) through (4) inclusive of Paragraph A of this Section 18, where such Default continues for a period of thirty (30) days or more after written notice thereof by LANDLORD to TENANT; provided, however, that if the nature of TENANT’s Default is such that more than thirty (30) days are reasonably required for its cure, then TENANT shall not be deemed to be a Breach of this Lease if TENANT provides written notice along with documentation of the need for an extended cure period to LANDLORD and, if verified by LANDLORD, commences such cure within said thirty (30) day period and thereafter continuously and diligently prosecutes such cure to completion. 6. A Default by TENANT as to the terms of any Approved Encumbrance, where such Default continues for a period of thirty (30) days or more after written notice thereof by LANDLORD; 7. The occurrence of any of the following events: (a) the making by TENANT of an assignment for the benefit of creditors; (b) TENANT’s becoming a “debtor” as defined in 11 U.S. Code Section 101 or any successor statute thereto (unless, in the case of a petition filed against TENANT, the same is dismissed within sixty (60) days); (c) the appointment of a trustee or receiver to take possession of substantially all of TENANT’s assets located at the Property or of TENANT’s leasehold interest in this Lease, where possession is not restored to TENANT within thirty (30) days; or (d) the attachment, execution, or other judicial seizure of substantially all of TENANT’S assets located at the Property or of TENANT’s leasehold interest in this Lease, where such seizure is not discharged within thirty (30) days. 8. If the performance of TENANT’s obligations under this Lease is guaranteed: The discovery by LANDLORD that any financial statement of TENANT or of any Guarantor, given to LANDLORD by TENANT or GUARANTOR, was materially false when made. 9. If the performance of TENANT’s obligations under this Lease is guaranteed: (a) the death of a Guarantor, if a person, or the dissolution or cessation of business of a Guarantor, if an entity, (b) the termination of a Guarantor’s liability with respect to this Lease other than in accordance with the terms of such guaranty, (c) a Guarantor’s becoming insolvent or the subject of a bankruptcy filing, or (d) a Guarantor’s failure or refusal to execute and/or honor the guaranty, and TENANT’S failure, within sixty (60) days following written notice by LANDLORD to TENANT of any such event, to provide LANDLORD with written alternative assurances of security, which, when coupled with the then existing resources of TENANT, equals or exceeds the combined financial resources of TENANT and the Guarantors that existed at the time of execution of this Lease. B. Remedies. 1. Other than as provided in Paragraph A of this Section 18, if TENANT fails to perform any affirmative duty or obligation of TENANT under this Lease within ten (10) days after written notice to TENANT (or in case of an emergency which endangers life or property, without notice), LANDLORD may at its option (but without obligation to do so), perform such duty or obligation on TENANT’s behalf, including, but not limited to, the obtaining of reasonably required insurance policies or governmental licenses, permits, or approvals. The costs and expenses of any such performance by LANDLORD shall be due and payable by TENANT to LANDLORD within ten (10) days of LANDLORD’s demand. 2. In the event of a Breach of the Lease by TENANT (as defined Paragraph A of Section 18), with or without further notice or demand, and without limiting LANDLORD in the exercise of any right or remedy which LANDLORD may have by reason of such Breach, LANDLORD may: a. Terminate TENANT’s right to possession of the Property by any lawful means, in which case this Lease and the term hereof shall terminate and TENANT shall immediately surrender possession of the Property to LANDLORD. In such event LANDLORD shall be entitled to recover from TENANT: (i) the worth at the time of the award of the unpaid rent which had been earned at the time of termination; (ii) the worth at the time of award of the amount by which the unpaid rent which would have been earned after termination until the time of award exceeds the amount of such rental loss that the TENANT proves could have been reasonably avoided; (iii) the worth at the time of award of the amount by which the unpaid rent for the balance of the Term after the time of award exceeds the amount of such rental loss that the TENANT proves could be reasonably avoided; and (iv) any other amount necessary to compensate LANDLORD for all the detriment proximately caused by the TENANT’s failure to perform its obligations under this Lease or which in the ordinary course of things would be likely to result therefrom, including, but not limited to, the cost of recovering possession of the Property, expenses of reletting, including necessary renovation and alteration of the Property, reasonable attorneys’ fees, and that portion of any leasing commission paid by LANDLORD in connection with this Lease and applicable to the unexpired term of this Lease. The worth at the time of award of the amount referred to in provision (iii) of the immediately preceding sentence shall be computed by discounting such amount at the discount rate of the Federal Reserve Bank of San Francisco or the Federal Reserve Bank District in which the Property is located at the time of award plus one percent (1%). LANDLORD’s attempt to mitigate damages caused by TENANT’s Default or Breach of this Lease shall not waive LANDLORD’s right to recover damages under this Section 18. If termination of this Lease is obtained through the provisional remedy of unlawful detainer, LANDLORD shall have the right to recover in such proceeding the unpaid rent and damages as are recoverable therein, or LANDLORD may reserve the right to recover all or any part thereof in a separate suit for such rent and/or damages. b. Continue the Lease and TENANT’S right to possession in effect under California Civil Code Section 1951.4 after TENANT’S Breach and recover the rent as it becomes due, provided TENANT has the right to sublet or assign, subject only to reasonable limitations. LANDLORD and TENANT agree that the limitations on assignment and subletting in this Lease are reasonable. LANDLORD maintenance of the Property or efforts to relet the Property, or the appointment of a receiver to protect the LANDLORD interest under this Lease, shall not constitute a termination of the TENANT’S right to possession. c. Pursue any other remedy now or hereafter available to LANDLORD under the laws or judicial decisions of the State of California. 3. Except for TENANT’s failure to pay monetary Monthly Rent during the Extended Term, TENANT’s failure to comply with Section 4.A of the Lease, or GUARANTOR’s failure to construct and complete the Preschool Improvements in accordance with the Improvement Agreement, for which LANDLORD shall immediately have the remedies available in this Lease or the Improvement Agreement, respectively, without first going through the dispute resolution procedures set forth below, compliance with the Dispute Resolution procedures specified in Section 19 shall be a precondition to the availability of the Remedies of LANDLORD (for TENANT’s Breach) specified in the foregoing subparagraph 2 of Paragraph B of this Section 18. For avoidance of doubt, LANDLORD may deliver notices of Default and/or Breach during the pendency of the dispute resolution procedures. C. Survival of Indemnity Provisions. The expiration or termination of this Lease and/or the termination of TENANT’s right to possession shall not relieve TENANT from liability under any indemnity provisions of this Lease as to matters occurring or accruing during the Term or by reason of TENANT’s use of the Property. D. Tenant’s Personal Property. TENANT covenants and agrees that immediately upon termination of this Lease, TENANT shall remove and properl y dispose of all of TENANT’s personal property, machinery or fixtures from the Property. If TENANT fails to remove any such personal property, LANDLORD may remove such personal property and place the same in storage at the expense of TENANT and without liability to LANDLORD for losses. TENANT agrees to pay LANDLORD for all expenses incurred by LANDLORD in connection with the removal, and storage charges of TENANT’s personal property, including attorney’s fees and court costs. Alternatively, LANDLORD may at its option and on not less than ten (10) days written notice to TENANT sell all or any part of said personal property at public or private sale for such prices as LANDLORD may obtain. LANDLORD shall apply the proceeds of any such sale to the amounts due from TENANT under this Lease and to any expense incidental to such sale. Any surplus arising from such sale shall be refunded to TENANT. E. No Waiver by Landlord. Receipt of any rent or of any other amounts of money paid by TENANT after the termination a nd forfeiture of this Lease, or after the giving by LANDLORD of any notice to effect such termination, shall not waive the Default, reinstate, continue or extend the Term of this Lease, or destroy or impair the efficacy of LANDLORD notice of termination, unless otherwise agreed in writing by LANDLORD. 19. DISPUTE RESOLUTION. A. Negotiations Between Designated Representatives. If required by Section 18.B.3 of this Lease, LANDLORD and TENANT agree to promptly negotiate in good faith to resolve any applicable outstanding default arising out of this Lease (a “Dispute”).In the event of a Dispute, the Parties shall continue to perform their respective obligations in good faith and shall not suspend performance during the Dispute resolution procedure. The Party raising the Dispute shall give written notice to each of the other Parties of such Dispute, provided that any notices of Default or Breach delivered by LANDLORD in accordance with this Lease shall constitute the notice of Dispute required herein. In the event of a Dispute, within five (5) business days after the other Party’s receipt of written notice, the Parties agree to meet through their Designated Representatives in good faith in an attempt to resolve the Dispute through informal negotiations. The Designated Representatives shall record the date of the Parties’ first in-person meeting. The Designated Representatives for the Parties are as follows: the COUNTY’s Director of the Real Estate Services Department (or authorized designee) for COUNTY, the CITY’s City Manager (or authorized designee) for CITY, and TENANT’s Charter School Executive Director/CEO (or authorized designee) for TENANT. If the Parties are unable to resolve the Dispute within thirty (30) business days from the date of said first in-person meeting, the Parties shall proceed to the dispute resolution method in Section 19.B. Any Dispute resolutions that would amend the Lease shall be set forth in writing and shall be approved by the governing bodies of the Parties. B. Mediation. The Parties agree in the event any Dispute is not resolved after commencement of good faith negotiations under Paragraph A of this Section, the Dispute shall be submitted to a formal mediation process prior to commencing an action or the LANDLORD exercising its remedies under this Agreement. The mediation shall be convened within forty-five (45) business days of the first meeting of the Designated Representatives and shall conclude within sixty (60) business days of the first meeting of said Designated Representatives. The costs of the mediation shall be shared equally by the Parties. The Parties agree to mediation using then current mediation procedures of JAMS or its successor. C. Litigation. Any Dispute which remains unresolved after participation in the foregoing Dispute resolution procedures may thereafter be submitted to litigation in the main branch of the San Bernardino County Superior Court and shall permit LANDLORD to exercise its remedies under the Lease or at law or in equity (without any further notice requirements). 20. TIME OF ESSENCE. Except as otherwise specifically provided in the Lease, time is of the essence for each provision of this Lease which specifies a time within which performance is to occur. In the absence of any specified time for performance, performance may be made within a reasonable time. 21. PROVISIONS ARE COVENANTS AND CONDITIONS. All provisions, whether covenants or conditions on the part of either party shall be deemed to be both covenants and conditions. 22. CONSENT. Except as otherwise specifically provided in the Lease, whenever consent or approval of either party is required, that party shall not unreasonably withhold such consent or approval. 23. EXHIBITS. All exhibits referred to in this Lease or attached to this Lease are incorporated herein by reference. 24. LAW. This Lease shall be construed and interpreted in accordance with the laws of the State of California. 25. ATTORNEYS' FEES AND COSTS. If any legal action is instituted to enforce or declare any party's rights hereunder, each party, including the prevailing party, must bear its own costs and attorneys' fees. This paragraph shall not apply to those costs and attorneys' fees directly arising from any third party legal action against the CITY or COUNTY, including such costs and attorneys’ fees payable under Section 8, INDEMNIFICATION, Sections 11.E and 11.F, CHARTER SCHOOL IMPROVEMENTS, Section 16.A.5, HAZARDOUS SUBSTANCES, and Section 34, PUBLIC RECORDS DISCLOSURE. 26. VENUE. The parties acknowledge and agree that this Lease was entered into and intended to be performed in San Bernardino County, California. The parties agree that the venue for any action or claim brought by any party to this Lease will be the main (downtown) branch of the Superior Court of California, County of San Bernardino. Each party hereby waives any law, statute (including but not limited to California Code of Civil Procedure Section 394) or rule of court that woul d allow it to request or demand a change of venue. If any action or claim concerning this Lease is brought by any third party, the parties hereto agree to use their best efforts to obtain a change of venue to the main (downtown) branch of the Superior Cou rt of California, County of San Bernardino. 27. COMPLIANCE WITH LAW. TENANT and its officers, employees, agents, contractor, agents, invitees, and assigns shall be bound by and comply with all applicable federal, state and local laws, statutes, ordinances, administrative orders, rules or regulations relating to its duties, obligations, rights and performance under the terms of this Lease. 28. CAPTIONS, TABLE OF CONTENTS AND COVER PAGE. The paragraph captions, table of contents and the cover page of this L ease are for the convenience of the Parties and shall have no effect on its interpretation. 29. NOTICES. Any notice, demand, request, consent, approval or communication that either party desires or is required to give to the other party, including but not limited to, notices required under the California unlawful detainer statutes, or any other person, shall be in writing and either served personally, sent by United States mail, postage prepaid, first-class mail, certified or registered, return receipt requested, or by overnight courier to the other party at the address listed in the Reference Pages. Either party may change its address by notifying the other party of the change of address. Notices shall be deemed delivered and effec tive upon the earlier of (i) actual receipt if personally delivered on a business day; otherwise on the next business day, or (ii) the date of delivery or refusal of the addressee to accept delivery if delivered on a business day, otherwise on the next bus iness day, if such notice is sent by or United States mail, postage prepaid, certified or registered, return receipt requested, or overnight courier. 30. RECORDATION OF LEASE. Any Party may record a short form memorandum of this Lease at its own cost. Upon termination or expiration of this Lease, TENANT shall, within ten (10) days of such termination or expiration, execute and record a quitclaim deed (or any other document required by LANDLORD) as to its leasehold interest. 31. SEVERANCE. If any provision of this Lease is determined to be void by any court of competent jurisdiction, then such determination shall not affect any other provision of this Lease and all such other provisions shall remain in full force and effect. It is the intention of the parties hereto that if any provision of this Lease is capable of two constructions, one of which would render the provision void and the other of which would render the provision valid, then the provision shall have the meaning which renders it valid. 32. SURVIVAL. The obligations of the parties, which by their nature continue beyond the term of this Lease, will survive the termination of this Lease. 33. REPRESENTATIONS AND AUTHORITY. If TENANT is a corporation, each of the persons executing this Lease on behalf of TENANT represents or warrants that TENANT has been and is qualified to do business in the State of California, that the corporation has full right and authority to enter into this Lease, and that all persons signing on behalf of the corporation were authorized to do so by the appropriate corporate actions. If TENANT is a partnership, limited liability company, trust or other legal entity, each of the persons executing this Lease on behalf of TENANT represents or warrants that TENANT has complied with all applicable laws, rules and governmental regulations relative to its right to do business in the State of California and that all persons signing on behalf of such entity were authorized to do so by any and all appropriate actions. TENANT agrees to furnish upon LANDLORD’s request a corporate resolution, or other appropriate documentation evidencing the authorization of TENANT to enter into this Lease. 34. PUBLIC RECORDS DISCLOSURE. All information received by the LANDLORD from TENANT or from any source concerning this Lease, including the Lease itself, may be treated by the LANDLORD as public information subject to disclosure under the provisions of the California Public Records Act, Government Code Sections 6250 et seq. (the “Public Records Act”). TENANT acknowledges and understands that although all materials received by the LANDLORD in connection with this Lease are intended for the exclusive use of the LANDLORD, they are potentially subject to disclosure under the provisions of the Public Records Act. In the event a request for disclosure of any part or all of any information which TENANT has reasonably requested LANDLORD to hold in confidence is made to the LANDLORD, LANDLORD shall endeavor to notify the TENANT of the request and shall thereafter disclose the requested information unless the TENANT, within five (5) days of receiving notice of the disclosure request, requests nondisclosure, provides LANDLORD a legally sound basis for the nondisclosure, and agrees to indemnify, defend (with counsel reasonably approved by LANDLORD), and hold the CITY or COUNTY harmless in any/all actions brought to require disclosure. TENANT waives any and all claims for damages, lost profits, or other injuries of any and all kinds in the event LANDLORD fails to notify TENANT of any such disclosure request and/or releases any information concerning the contract received from the TENANT or any other source. 35. INTERPRETATIONS. As this Lease was jointly prepared by the Parties, the language in all parts of this Lease shall be construed, in all cases, according to its fair meaning, and not for or against either party hereto. 36. ENTIRE AGREEMENT. This agreement, including recitals, constitutes a single, integrated contract, expressing the entire agreement and understanding of the parties concerning the subject matter of this agreement, and this agreement supersedes and replaces all prior understandings, negotiations, proposed agreements and agreements, whether oral or written, express or implied. 37. AMENDMENT. No waiver, modification or amendment of any term condition or provision of this Lease shall be valid or shall have any force or effect unless made in writing and signed by all of the parties hereto. 38. NO RELIANCE. LANDLORD makes no warranties or representations of any kind concerning the condition of the Property or the fitness of the Property for the use intended by TENANT, and hereby disclaim any knowledge with respect thereto, it being expressly understood by the parties that TENANT has inspected the Property, knows its condition, finds it fit for TENANT’s intended use, accepts the Property AS -IS, and has ascertained that it can be used for the limited purposes specified in the Use section on the Reference Pages. In entering in to this agreement, each of the parties acknowledges, represents and warrants that it has not relied upon any promise, statement or representation, express or implied, of any other party or such other party’s agents, employees, or attorneys, not contained i n this agreement. 39. FORMER COUNTY OFFICIALS. TENANT agrees to provide information on former COUNTY administrative officials (as defined below) who are presently employed by or currently represent TENANT. The information provided includes a list of former COUNTY administrative officials who terminated COUNTY employment within the last five years and who are now officers, principals, partners, associates or members of TENANT. The information also includes the employment with and/or representative capacity and the date those individuals began employment with or representation of TENANT. The information does not include COUNTY administrative officials who served in a volunteer capacity with, represented, or were employed by TENANT prior to January 1, 2019. For purposes of this provision, “COUNTY administrative official” is defined as a member of the Board of Supervisors or such officer’s staff, COUNTY Administrative Officer or member of such officer’s staff, COUNTY department or group head, assistant department or group head, or any employee in the Exempt Group, Management Unit or Safety Management Unit. (See Exhibit “D”, List of Former County Officials.) 40. MATERIAL MISREPRESENTATION. If during the course of the administration of this Lease, the LANDLORD determines that the TENANT has made a material misstatement or misrepresentation or that materially inaccurate information has been provided to the LANDLORD, this Lease may be immediately terminated by LANDLORD. If this Lease is terminated according to this provision, the LANDLORD is entitled to pursue any available remedies at law or in equity. 41. BROKER’S COMMISSIONS: Each Party represents and warrants to the other that no real estate broker, agent, commissioned salesperson or other person has represented said Party in the negotiations of this Lease. Each party agrees to indemnify and hold the other harmless from and against any claim, loss, liability or expense, including reasonable attorneys’ fees, incurred by the other party as a result of a breach of its respective representations herein. 42. EASEMENTS. LANDLORD reserves the right, from time to time, to grant such easements, rights and dedications on the Property that LANDLORD, in its sole discretion, deems necessary or desirable, and to cause the recordation of parcel maps and restrictions, so long as such easements, rights, dedications, maps and restrictions do not materially interfere with the permitted use of the Property by TENANT. TENANT shall sign any of the aforementioned documents upon request of LANDLORD and failure to do so shall constitute a material breach of this Lease. 43. INDEPENDENT CONTRACTOR. It is agreed that TENANT shall act and be an independent contractor and not an agent nor employee of LANDLORD. 44. NON-DISCRIMINATION. TENANT covenants it shall not discriminate based upon race, color, creed, religion, sex, marital status, age, handicap, national origin or ancestry in any activity pursuant to this Lease. 45. AUTHORITY. The Parties represent and warrant that the individuals signing this Lease have the requisite authority to bind their respective organizations to the terms and conditions of this Lease. This Lease has been adopted by noticed public hearings of the Parties hereto and all Parties are fully authorized to enter into this agreement. 46. ASSIGNMENT AND SUBLETTING BY TENANT. 1. TENANT shall not voluntarily, by operation of law, or by merger, sale, transfer, or otherwise assign this Lease in its entirety, sublease the Property in whole or in part, or permit any third-party use of the Property in whole or in part without the prior written consent of CITY and COUNTY. Notwithstanding anything to the contrary in the foregoing, TENANT may assign the Lease in its entirety or sublease the Property in whole or in part to (a) the GUARANTOR or (b) any entity which controls, is controlled by, or is under common control with TENANT or the GUARANTOR without CITY and COUNTY consent but with prior notice to LANDLORD (“Affiliate Transferee”), provided that TENANT is not then in default under the Lease and any such subleases to an Affiliate Transferee shall be substantially in the form of Exhibit “F” attached, which shall provide that this Lease controls in the event of conflict, the premises in the sublease does not exceed the Property, the use under the sublease is consistent with the use in this Lease, the term of the sublease does not exceed the Term of this Lease, and if not earlier terminated, the sublease terminates concurrently with the termination of this Lease, TENANT remains responsible for the acts and omissions of its subtenant, and neither TENANT nor GUARANTOR shall be released from any of its obligations under this Lease or the Guaranty, respectively. For any such assignments to an Affiliate Transferee, the assignment shall be on the same terms and conditions, which shall be assumed by the Affiliate Transferee, TENANT remains responsible for the acts and omissions of its assignee and neither TENANT nor GUAR ANTOR shall be released from its obligations under this Lease or the Guaranty, respectively. 2. If LANDLORD consent is required for any assignment or subletting, other than as provided in Paragraph (1) of this Section 46 , such consent shall be on terms and conditions reasonably acceptable to LANDLORD, including but not limited to that TENANT is not in Default at the time of consent, that TENANT shall submit an assignment or sublease agreement in a form acceptable to the LANDLORD, documentation regarding the financial strength of the proposed assignee or subtenant, a current credit report of the assignee or subtenant, including credits reports for each of its principals, and information related to the responsibility and appropriateness, expertise, and expertise of the proposed assignee or subtenant for the Use, which shall be equal to or greater than that of TENANT. 3. Whether LANDLORD consent is required or not, any assignment or sublease shall not: (i) be effective without the express written assumption by such assignee or subtenant of all of TENANT’s obligations under this Lease; (ii) release TENANT of any of its obligations hereunder; (iii) alter the primary liability of TENANT for the payment of the monthly rent and other amounts due COUNTY pursuant to this Lease or for the performance of any of TENANT’s other obligations under this Lease; nor (iv) alter, discharge or release the liability of any Guarantor on this Lease. 4. Except as provided in Paragraph 1 of Section 46, any assignment or sublease without LANDLORD's consent shall be voidable and, at LANDLORD's election, shall constitute a default under this Lease. LANDLORD’s consent to any assignment or sublease shall not constitute a waiver of LANDLORD’s right to require consent to any subsequent assignment or sublease. COUNTY’s RESD Director and the CITY’s City Manager shall have the authority to review assignment and subletting requests for the COUNTY and CITY, respectively and to provide LANDLORD consent, if such assignment or subletting is approved by both the COUNTY and the CITY. 47. LANDLORD RIGHT OF ENTRY. TENANT shall permit LANDLORD and its authorized employees, agents, contractors, and representatives to enter the Property and the Charter School Improvements thereon at all reasonable times upon not less than twenty-four (24) hours prior notice (except in the event of an emergency, in which case no prior notice is required) for the purposes of (i) serving or posting or keeping posted thereon notices required or permitted by law, (ii) conducting periodic inspections for compliance with the terms of the Lease , (iii) exercising LANDLORD’s rights under this Lease, and (iv) showing the Property to brokers, potential buyers and tenants, and lenders. 48. HOLDOVER. If TENANT continues in possession or occupancy of the Property after the expiration or earlier termination of this Lease, and if said possession or occupancy is with the express written consent of the LANDLORD, then TENANT shall be deemed to be holding the Property on a month-to-month tenancy subject to all the provisions of this Lease except the monthly rent and either Party may terminate the Lease at any time during the holdover period by providing not less than thirty (30) days prior written notice to the other Party. The monthly rent payable during such permitted period of holding over after the Initial Term shall the fair market monthly rental rate then prevailing based on the monthly rental rate of comparable leased properties in the County of San Bernardino, as reasonable determined by LANDLORD. The monthly rent payable during such permitted period of holding over after the Extended Term shall be monthly rent that was payable in the last month of the Extended Term plus the annual escalation applicable during the Extended Term. 49. GUARANTOR. If the Reference Pages provide that TENANT’s obligations pursuant to this Lease are to be guaranteed by one or more Guarantors, then each Guarantor shall execute the form of the guaranty attached hereto as Exhibit “E” “Guaranty of Lease” and each such Guarantor shall have the same obligations as TENANT under this Lease. IN WITNESS THEREOF, the parties executed this agreement. COUNTY: County of San Bernardino CITY: City of San Bernardino By: __________________________ By: ____________________________ _________________, Chair Teri Ledoux, City Manager Board of Supervisors Dated:_________________________ Dated: _________________________ SIGNED AND CERTIFIED THAT A COPY OF THIS DOCUMENT HAS BEEN DELIVERED TO THE CHAIRMAN OF THE BOARD TENANT: 230 SOUTH WATERMAN AVENUE, LLC Lynna Monell Clerk of the Board of Supervisors of the County of San Bernardino By: ____________________________ Title: __________________________ Dated: _________________________ By: _______________________ Deputy Dated: _______________________ APPROVED AS TO LEGAL FORM MICHELLE D. BLAKEMORE, County Counsel, San Bernardino County Counsel By: _________________________ Deputy County Counsel Dated: EXHIBIT A PROPERTY Legal Description [To Be Attached] EXHIBIT B PROPERTY Plat EXHIBIT C FORM OF CONSENT, RECOGNITION AND ATTORNMENT AGREEMENT This CONSENT, RECOGNITION AND ATTORNMENT AGREEMENT ("Agreement") is entered into by and among the COUNTY OF SAN BERNARDINO, and the CITY OF SAN BERNARDINO, hereinafter collectively referred to as “LANDLORD”, 230 SOUTH WATERMAN AVENUE, LLC, hereinafter referred to as “TENANT”, HIGH DESERT PARTNERSHIP IN ACADEMIC EXCELLENCE FOUNDATION, INC., hereinafter referred to as “SUBTENANT”, and ______ hereinafter referred to as “LENDER.” Recitals A. LANDLORD and TENANT entered into that certain Ground Lease Agreement, Agreement No. _____ dated , 20__, hereinafter referred to as “Ground Lease”, whereby LANDLORD agreed to lease to TENANT and TENANT agreed to lease from LANDLORD certain real property legally described on Exhibit “A” attached hereto and known as 230 S. Waterman Avenue, San Bernardino, California, comprising approximately 15.6 acres (“Property") for use as a public charter school. B. TENANT and SUBTENANT have entered into that Sublease dated , 20__, hereinafter referred to as “Sublease” whereby TENANT agreed to sublease to SUBTENANT and SUBTENANT agreed to sublease from TENANT the Property for SUBTENANT to construct certain charter school improvements and to operate the public charter school facility known as the Norton Science and Language Academy under a charter granted by the San Bernardino County Board of Education. C. TENANT has made, executed and delivered, or is about to make, execute and deliver to LENDER a leasehold deed of trust dated substantially contemporaneously herewith (“Leasehold Deed of Trust”), encumbering TENANT’s leasehold interest and SUBTENANT’s subleasehold interest in the Property created by the Lease and the Sublease, respectively, to secure financing or refinancing for the construction of certain charter school improvements at the Property and certain preschool improvements for the County of San Bernardino on a separate parcel of LANDLORD-owned real property known as 205 Allen Street, San Bernardino, California, comprising approximately 2.23 acres (the “Head Start Parcel”). D. TENANT represents that it is a condition precedent of the loan that the Leasehold Deed of Trust shall be and remain at all times until said loan is repaid a lien upon SUBTENANT’s subleasehold interest and TENANT’s leasehold interest in the Property created by the Sublease and the Lease, respectively. Covenants In consideration of the recitals set forth above, which are incorporated herein, and the covenants and agreements contained herein, the parties agree as follows: 1. Subject to the terms of this Agreement, LANDLORD hereby consents to TENANT entering into the Leasehold Deed of Trust to encumber TENANT’s leasehold interest and SUBTENANT’s subleasehold interest in the Property created by the Lease and the Sublease, respectively, provided that the Leasehold Deed of Trust shall be subordinate to LANDLORD’s fee interest in the Property. For avoidance of doubt, the parties hereby acknowledge and agree that, notwithstanding anything to the contrary in this Agreement, the Lease, the Sublease, or any financing documents, the Leasehold Deed of Trust does not encumber LANDLORD’s fee interest in the Property nor does it in any manner encumber the Head Start Parcel or any improvements thereon even if a portion of the loan proceeds is intended to or shall be used for the construction of certain preschool improvements on the Head Start Parcel. 2. Upon repayment of the loan described in the Leasehold Deed of Trust, LENDER agrees to fully re-convey all of LENDER’s interest in the Property created by the Leasehold Deed of Trust (and any rights exerted thereunder), and LENDER shall, at its sole cost and expense, execute such documents as reasonably requested by LANDLORD to release said Leasehold Deed of Trust. 3. In the event of any conflict between the provisions of the Lease and the provisions of this Agreement, the Sublease, the Leasehold Deed of Trust, or any other financing agreements, the terms of such provisions shall be construed to be as consistent as possible, but if such reading is not possible, the provisions of the Lease shall control. 4. Any material additions or modifications to the Leasehold Deed of Trust shall first be approved in writing by the LANDLORD. The approvals described in this Paragraph shall not be unreasonably withheld, delayed or conditioned. 5. No amendment to the Lease that modifies any of its material economic terms¸ Lender’s rights or the Term shall be valid without LENDER’s prior written consent. TENANT shall be required to obtain LENDER’s prior written consent prior to the execution of such amendment. 6. The proceeds of the loan to TENANT shall be used solely for payment of expenses incident to construction of certain charter school improvements for the operation of the Norton Science and Language Academy at the Property and certain preschool improvements for the County of San Bernardino on the separate Head Start Parcel and to pay the costs of the financing. Neither SUBTENANT nor TENANT shall have the right to encumber its subleasehold interest or leasehold interest in the Property created by the Sublease and Sublease, respectively to finance any other charter schools, programs, or foundations operated by SUBTENANT or TENANT or any of its affiliates. 7. Until the loan described in the Leasehold Deed of Trust is repaid in ful l, LANDLORD shall provide LENDER with notice at the same time that it provides notice to TENANT of any Default, and thereafter shall provide a copy of any notice provided to TENANT to LENDER, including, without limitation, those that would result in any surrender of the Property or termination of the Lease. LENDER shall have the same rights, at any time during the Term, to enter the Property to (A) do any act or thing required of TENANT hereunder, within the time TENANT is required to perform such act or thing hereunder, whenever failure to do such act or thing would constitute a default hereunder, provided that prior to any Default, LENDER shall provide written notice to LANDLORD if LENDER acts on behalf of TENANT ; and/or (B) cure any Default as the TENANT has under this Lease; and LANDLORD shall accept such performance or cure by a LENDER as if TENANT had performed. No LENDER shall be required to cure any default of TENANT unless such LENDER has elected to acquire the leasehold interest in writing or via foreclosure or deed in lieu thereof. LANDLORD agrees that if TENANT fails to cure any default under the Lease within the time provided for in the Lease, except for defaults due to TENANT’s failure to pay monetary Monthly Rent, TENANT’s failure to comply with Section 4.A of the Lease, or SUBTENANT’S failure to construct and complete the Preschool Improvements on the Head Start Parcel in accordance with the Improvement Agreement (unless expressly set forth in the Improvement Agreement) for which no additional time shall be granted to LENDER (collectively, “Excluded Defaults”), LENDER shall have an additional ten (10) business days after LENDER’s receipt of written notice of Default within which to cure such default that are not Excluded Defaults (“Eligible Default”), provided if such Eligible Default is of a nature that it cannot reasonably be cured within ten (10) business days then so long as LENDER commences cure within said ten (10) business days and thereafter diligently prosecutes such cure of an Eligible Default to completion, (A) LENDER shall have a reasonable period to cure such Eligible Default, not to exceed 30 days from LENDER’s receipt of the written notice of Eligible Default, (B) if possession of the Property is required to prosecute and complete a cure of an Eligible Default (other than an Eligible Default described in Section 18.A.2 of the Ground Lease), LENDER shall have a reasonable period to cure such Eligible Default, not to exceed such time as reasonably necessary to obtain possession of the Property plus 60 days or (C) LENDER shall have a reasonable period to cure any Eligible Default described in Section 18.A.2 of the Ground Lease not to exceed such time as reasonably necessary to obtain possession of the Property plus 365 days. 8. Upon default by TENANT under any of the terms of the Leasehold Deed of Trust, LENDER may exercise any rights provided in the Leasehold Deed of Trust, provided that before any sale of TENANT’s leasehold interest in the Property, whether under power of sale or foreclosure, LENDER shall give to LANDLORD written notice of the same character and duration as is required to be given to TENANT by the terms of the Leasehold Deed of Trust or the laws of the State of California. 9. If any default under the Leasehold Deed of Trust shall continue after the giving of LENDER’s notice to LANDLORD pursuant to Paragraph 8 of this Agreement, LANDLORD, prior to sale of the leasehold interest in the Property, shall have the right to correct such default at TENANT’s cost, which costs shall be reimbursed by TENANT upon demand and/or exercise LANDLORD’s remedies under the Lease. 10. If a sale or foreclosure under the Leasehold Deed of Trust occurs or if the LENDER or its permitted assignee (as defined below) acquires the TENANT’s leasehold interest by assignment in lieu of foreclosure, this Lease shall continue in full force on the same terms and conditions and LENDER or said permitted assignee, as successor in interest to TENANT will be bound by all the terms of this Lease and will assume all the rights and obligations of TENANT under the Lease and LANDLORD shall recognize LENDER or said permitted assignee as TENANT under the Lease with all rights of TENANT thereunder and LANDLORD shall, after such event and upon such condition, have the same rights and remedies against LENDER or its permitted assignee for the default or breach of the Lease that LANDLORD has under the Lease against TENANT if LENDER or its permitted assignee had not succeeded to the interest of TENANT. Neither LENDER nor its permitted assignee shall assign this Lease, sublease any portion of the Property or appoint an agent to operate any portion of the Property without obtaining the prior written approval of CITY and COUNTY, and if approved, a “permitted assignee”. Such approval shall not be unreasonably withheld, conditioned or delayed so long as the proposed assignee, subtenant or agent has demonstrated substantial experience in the operation of facilities similar to the Charter School Improvements. Notwithstanding the foregoing, LENDER, or such permitted assignee, shall upon assignment of the Lease in accordance with the terms thereof, be released of any all obligations under the Lease accruing thereafter. Nothing in this Agreement shall be deemed to be a recognition of the Sublease as a direct agreement between LANDLORD and SUBTENANT. 11. Any notice, demand, request, consent, approval or communication that a Party desires or is required to give to another Party or any other person, shall be in writing and either served personally, sent by United States mail, postage prepaid, first - class mail, certified or registered, return receipt requested, or by overnight courier to another Party at the address set forth below. A Party may change its address by notifying the other Parties of the change of address. Notices shall be deemed delivered and effective upon the earlier of (i) actual receipt if personally delivered on a business day; otherwise on the next business day, or (ii) the date of delivery or refusal of the addressee to accept delivery if delivered on a business day, otherwise on the next business day, if such notice is sent by or United States mail, postage prepaid, certified or registered, return receipt requested, or overnight courier. COUNTY’s Notice Address: CITY’s Notice Address: TENANT’s Notice Address: SUBTENANT’s Notice Address: LENDER Notice Address: 12. This Agreement is binding upon and inures to the benefit of the Parties and their respective successors, assigns, heirs, executors, and administrators . 13. If any legal action is instituted to enforce or declare a party's rights hereunder, each party, including the prevailing party, must bear its own attorneys' fees and costs. 14. This Agreement shall be governed by and construed in accordance with the laws of the State of California. The parties acknowledge and agree that this Agreement was entered into and intended to be performed in the County of San Bernardino, California. The parties agree that the venue for any action or cla im brought by any party to this Agreement will be the Superior Court of California, County of San Bernardino. Each party hereby waives any law, statute (including but not limited to Code of Civil Procedure section 394), or rule of court that would allow them to request or demand a change of venue. If any third party brings an action or claim concerning this Agreement, the parties hereto agree to use their best efforts to obtain a change of venue to the Superior Court of California, County of San Bernardino. IN WITNESS WHEREOF, the parties have executed this Agreement as of the day and year written below. COUNTY: County of San Bernardino CITY: City of San Bernardino By: __________________________ By: ____________________________ _________________, Chair Teri Ledoux, City Manager Board of Supervisors Dated:_________________________ Dated: _________________________ SIGNED AND CERTIFIED THAT A COPY OF THIS DOCUMENT HAS BEEN DELIVERED TO THE CHAIRMAN OF THE BOARD TENANT: 230 SOUTH WATERMAN AVENUE, LLC Lynna Monell Clerk of the Board of Supervisors of the County of San Bernardino By: ____________________________ Title: __________________________ Dated: _________________________ By: _______________________ Deputy Dated: _______________________ APPROVED AS TO LEGAL FORM MICHELLE D. BLAKEMORE, County Counsel, San Bernardino County Counsel By: _________________________ Deputy County Counsel Dated: LENDER HIGH DESERT PARTNERSHIP IN ACADEMIC EXCELLENCE FOUNDATION, INC. By: _________________________ By: _________________________ (Authorized signature- sign in blue ink) (Authorized signature- sign in blue ink) Name: ____________________ Title: _____________________ Name: ____________________ Dated: ____________________ Title: _____________________ Dated: ____________________ EXHIBIT D LIST OF FORMER COUNTY OFFICIALS INSTRUCTIONS: List the full name of the former COUNTY Administrative Official, the title/description of the Official’s last position with the COUNTY, the date the Official terminated COUNTY employment, the Official’s current employment and/or representative capacity with the TENANT, the date the Official entered TENANT’s employment and/or representation. OFFICIAL’S NAME: REQUIRED INFORMATION TENANT certifies that the foregoing information is true and accurate. TENANT: By: Title: Date: EXHIBIT E FORM OF GUARANTY OF LEASE This Guaranty of Lease (“Guaranty”) dated as of [date] is executed by High Desert Partnership in Academic Excellence Foundation, Inc., a California nonprofit public benefit corporation (“Guarantor”) in favor of the City of San Bernardino (“City”) and the County of San Bernardino (“County”). The City, County, and Guarantor are the “Parties” to this Guaranty. Recitals A. City and County, collectively as landlord (“Landlord”), and 230 South Waterman Avenue, LLC, a California limited liability company, as tenant (“Tenant”) have entered into a Ground Lease Agreement dated as of [date-identify as Lease referenced date or execution date] (“Lease”), whereby Landlord agreed to lease to Tenant and Tenant agreed to lease certain real property known as 230 S. Waterman Avenue, San Bernardino, California, comprising approximately 15.66 acres (“Property") for use as a public charter school. B. Guarantor operates two public charter schools, the Norton Science and Language Academy (“NSLA”), which the Guarantor intends to operate on the Property, and the Academy for Academic Excellence (“AAE”), which operates in Apple Valley, California. Guarantor also operates the Goldstone Apple Valley Radio Telescope (“GAVRT”) Radio Astronomy Program, the Apple Valley Center for Innovation (“AVCI”), and the Lewis Center Foundation (the “Foundation”). C. As a condition to entering into the Lease, Landlord has required that Guarantor execute and deliver to Landlord this Guaranty. D. In addition to this Guaranty, as TENANT’s consideration for the Lease, Guarantor has entered into that certain Improvement and Maintenance Agreement with County on even date with the Lease wherein Guarantor shall perform certain obligations as set forth in said agreement. In consideration of Landlord entering into the Lease of the Property to Tenant, Guarantor covenants and agrees as follows: Section 1. Guaranty. Guarantor absolutely and unconditionally guarantees to Landlord the full, faithful, and timely performance by Tenant of the Lease, or any extensions, renewals, or modifications of the Lease; provided, however, that Guarantor’s obligations hereunder and under the Improvement Agreement are limited to Guarantor’s revenues , income, receipts, proceeds, and money attributable to the operation of, and the assets related to, the NSLA (the “NSLA Property”) and explicitly excludes any revenue, income, receipts and money attributable to the operations of, and assets related to, AAE, GAVRT, AVCI or the Foundation (the “Excluded Property”). The Parties acknowledge and agree that timely and complete performance of the Improvement Agreement by Guarantor is deemed a material covenant of Tenant under the Lease. If Tenant shall default at any time in the performance of any covenant or obligation under the Lease, then Guarantor, at Guarantor’s expense, shall on demand by Landlord fully and promptly perform all covenants and obligations to be performed by Tenant pursuant to the Lease, but such performance shall be limited to the NSLA Property, and Guarantor shall not be obligated to use any Excluded Property in its performance of its obligations under the Improvement Agreement or the Guaranty. In addition, and not withstanding any contrary language in the Lease, Guarantor shall on demand by Landlord pay to Landlord all amounts due to Landlord, including, without limitation, all interest on past due obligations of Tenant, costs advanced by Landlord, damages, and all expenses (including, without limitation, court costs and reasonable attorney fees) that may arise in consequence of Tenant’s default, but solely from the NSLA Property. Section 2. Waivers. Guarantor authorizes Landlord, without notice or demand and without affecting Guarantor’s liability under this Guaranty, to: (a) consent to any extensions, accelerations, or other changes in the time for any payment provided for in the Lease, or consent to any other alteratio n of any covenant, term, or condition of the Lease in any respect, and to consent to any assignment, subletting, or reassignment of the Lease; (b) take and hold security for the performance of any covenant, term, or condition of the Lease, or exchange, waive, or release any security, but only from the NSLA Property; and (c) apply this security and direct the order or manner of its sale as LANDLORD may determine. Notwithstanding any termination, renewal, extension or holding over of the Lease, this Guaranty of Lease shall continue until all of the covenants and obligations on the part of Tenant under the Lease to be performed have been fully and completely performed by Tenant and Guarantor shall not be released of any obligation or liability under this Gua ranty so long as there is any claim against Tenant arising out of the Lease that has not been settled or discharged in full. Section 3. Independent Obligations. The obligations of Guarantor under this Guaranty are independent of, and may exceed, the obligations of Tenant. A separate action may, at Landlord’s option, be brought and prosecuted against Guarantor, whether or not any action is first or subsequently brought against Tenant, or whether or not Tenant is joined in any action, and Guarantor may be joined in any action or proceeding commenced by Landlord against Tenant arising out of, in connection with, or based upon the Lease. Guarantor waives any right to (a) require Landlord to proceed against Tenant or any other person or entity or pursue any other remedy in Landlord’s power; (b) complain of delay in the enforcement of Landlord’s rights under the Lease; and (c) require Landlord to proceed against or exhaust any security held from Tenant or Guarantor. Guarantor waives any defense arising by reason of any disability or other defense of Tenant or by reason of the cessation from any cause of the liability of Tenant. Guarantor waives all demands upon and notices to Tenant and to Guarantor, including, without limitation, demands for performance, notices of nonperformance, notices of non-payment, and notices of acceptance of this Guaranty of Lease. Section 4. Definition of Tenant; Limitations. For purposes of this Guaranty of Lease and the obligations and liabilities of Guarantor, the term “Tenant” shall be deemed to include any and all affiliates, concessionaires, licensees, franchisees, department operators, assignees, subtenants, or others directly or indirectly leasing or occupying the Property leased under the Lease or operating or conducting a business in or from the Property, as permitted by the Lease. Notwithstanding the foregoing or anything to the contrary in this Guaranty, t he Parties acknowledge and agree that Guarantor’s obligations under this Guarantee shall be satisfied in their entirety by the NSLA Property. The Parties further acknowledge and agree that no revenue of Guarantor derived from its operation of AAE, GAVRT, AVCI, the Foundation or any operations other than NSLA shall be available to satisfy the obligations of Guarantor hereunder or under the Improvement Agreement, and the facilities from which Guarantor operates AAE, GAVRT, AVCI, and the Foundation and other assets related to such operations are not pledged hereunder. Section 5. No Reporting Duty. Guarantor assumes full responsibility for keeping fully informed of the financial condition of Tenant and all other circumstances affecting Tenant’s ability to perform Tenant’s obligations under the Lease, and agrees that Landlord will have no duty to report to Guarantor any information that Landlord receives about Tenant’s financial condition or any circumstances bearing on Tenant’s ability to perform such obligations. Section 6. Continuing Guaranty. This Guaranty shall remain in full force notwithstanding the appointment of a receiver to take possession of all or substantially all of the assets of Tenant, or an assignment by Tenant for the benefit of creditors, or a ny action taken or suffered by Tenant under an insolvency, bankruptcy, reorganization, moratorium, or other debtor relief act or statute, whether now existing or later amended or enacted, or the disaffirmance of the Lease in any action or otherwise. Section 7. Joint and Several Obligations. If this Guaranty of Lease is signed, or if the obligations of Tenant are otherwise guaranteed, by more than one party, their obligations shall be joint and several, and the release or limitation of liability of any one or more of the guarantors shall not release or limit the liability of any other guarantors. Section 8. Successors and Assigns. This Guaranty of Lease shall be binding upon Guarantor and Guarantor’s heirs, administrators, personal and legal representatives, successors, and assigns, and shall inure to the benefit of Landlord and Landlord’s successors and assigns. Landlord may, without notice, assign this Guaranty of Lease, the Lease, or the rents and other amounts payable under the Lease, in whole or in part. Section 9. Guaranty of Costs and Fees. In addition to the amounts guaranteed, Guarantor agrees to pay reasonable attorney fees and all other costs and expenses incurred by Landlord in enforcing this Guaranty of Lease or in any action or proceeding arising out of, or relating to, this Guaranty of Lease. Section 10. Governing Law This Guaranty of Lease shall be deemed to be made under and shall be governed by California law in all respects, including matters of construction, validity, and performance, and the terms and provisions of this Guaranty may not be waived, altered, modified, or amended except in a writing signed by an authorized officer of Landlord and by Guarantor. Section 11. Severance. If any of the provisions of this Guaranty of Lease shall contravene or be held invalid under the laws of any jurisdiction, this Guaranty of Lease shall be construed as if it did not contain those provisions, and the rights and obligations of the parties shall be construed and enforced accordingly. Section 12. Counterparts. This Guaranty of Lease may be executed in any number of counterparts, each of which shall be a valid and binding original, but all of which together shall constitute one and the same instrument. Guarantor has executed this Guaranty as of the date first written above. HIGH DESERT PARTNERSHIP IN ACADEMIC EXCELLENCE FOUNDATION, INC. __________________________ Lisa Lamb, Executive Director EXHIBIT F FORM OF SUBLEASE FOR AFFILIATE TRANSFEREES