Loading...
HomeMy WebLinkAboutAdditional Documents for Item No. 15 – Memo and Ground Lease. 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 by 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 TENANT 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 encumbered 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 holder 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 Wilmington 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 obligations 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 by entering into a new sublease agreement with a duly authorized replacement charter school operator or other lawful educational user, provided that, immediately upon obtaining possession, and until commencement of the new sublease, LENDER covenants and agrees to diligently perform building maintenance and groundskeeping services as necessary to immediately remedy any condition of blight or unsightly appearance in the Charter School Improvements. 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 and 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 apply 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 insurance 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 COUNTY 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 of 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 determines that any of the required insurance is not available, is unreasonably 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 higher 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, damages, 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 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 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 existence 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 Property. 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 permit 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 which, 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, subject 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 the 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/o r 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 o r 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 repair 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 involved 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 trade 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 terminate 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 continues 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 and 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 would 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 Court 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 Lease 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 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. 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 into 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 in 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 GUARANTOR 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 THE LAND REFERRED TO HEREIN BELOW IS SITUATED IN THE CITY OF SAN BERNARDINO, IN THE COUNTY OF SAN BERNARDINO, STATE OF CALIFORNIA, AND IS DESCRIBED AS FOLLOWS: PARCEL 1: (APN: 0136-261-24-0-000) THAT PORTION OF LOT 3, BLOCK 7, OF RANCHO SAN BERNARDINO, AS PER PLAT RECORDED IN BOOK 7, PAGE 2 OF MAPS, RECORDS OF SAID COUNTY, DESCRIBED AS: BEGINNING AT A POINT ON THE EAST LINE OF SAID LOT 3, DISTANT SOUTH THEREON 20 FEET FROM THE NORTHEAST CORNER OF SAID LOT 3; THENCE WEST PARALLEL WITH THE NORTH LINE OF SAID LOT TO A POINT ON A LINE THAT IS PARALLEL WITH AND DISTANT EAST 693 FEET FROM THE WEST LINE OF LOT 10, SAID BLOCK 7; THENCE SOUTH ALONG SAID PARALLEL LINE TO A POINT ON A LINE THAT IS PARALLEL WITH AND DISTANT NORTH 50 FEET FROM THE SOUTH LINE OF THE NORTH 3 ACRES OF COMBINED LOTS 3 AND 10 OF SAID BLOCK 7; THENCE EAST ALONG SAID PARALLEL LINE TO A POINT ON THE EAST LINE OF SAID LOT 3; THENCE NORTH TO THE POINT OF BEGINNING. EXCEPT THEREFROM THE EAST 8.75 FEET THEREOF AS CONVEYED TO THE CITY OF SAN BERNARDINO BY DEED RECORDED NOVEMBER 27, 1967 AS INSTRUMENT NO. 78, IN BOOK 6930, PAGE 31 OF OFFICIAL RECORDS. PARCEL 2: (APN: 0136-261-23-0-000) ALL THAT PORTION OF THE NORTHERLY 3 ACRES OF LOTS 3 AND 10 IN BLOCK 7 OF THE RANCHO SAN BERNARDINO, AS PER PLAT RECORDED IN BOOK 7 OF MAPS, PAGE 2, RECORDS OF SAID COUNTY, EXCEPT THEREFROM THE WESTERLY 528 FEET THEREOF. SAID LAND MORE PARTICULARLY DESCRIBED AS FOLLOWS: BEGINNING AT THE NORTHEAST CORNER OF SAID TRACT; THENCE WEST TO THE NORTHWEST CORNER OF SAID TRACT; THENCE SOUTH ALONG THE WEST LINE OF SAID TRACT TO A POINT 50 FEET NORTH OF THE SOUTH LINE OF SAID TRACT; THENCE EAST 165 FEET; THENCE NORTH TO A POINT 20 FEET SOUTH OF THE NORTH LINE OF SAID TRACT; THENCE EAST TO A POINT ON THE EAST LINE OF SAID TRACT 20 FEET SOUTH OF THE POINT OF BEGINNING; THENCE NORTH TO THE POINT OF BEGINNING. ALSO EXCEPT THE EAST 8.75 FEET OF THE NORTH 20.00 FEET DEEDED TO THE CITY OF SAN BERNARDINO FOR ROAD PURPOSES IN DEED RECORDED MARCH 25, 1968, BOOK 6996, PAGE 793, OFFICIAL RECORDS. PARCEL 3: (APN: 0136-261-25-0-000; 0136-261-26-0-000; 0136-261-27-0-000) THE NORTH 10-1/2 ACRES OF COMBINED LOTS 3, 4, 9 AND 10, BLOCK 7, RANCHO SAN BERNARDINO, IN THE COUNTY OF SAN BERNARDINO, STATE OF CALIFORNIA, AS PER MAP RECORDED IN BOOK 7, PAGE 2 OF MAPS, RECORDS OF SAID COUNTY. EXCEPT THEREFROM THE WEST 150 FEET OF THE NORTH 3 ACRES OF COMBINED LOTS 10 AND 3 OF SAID BLOCK 7. ALSO EXCEPT THEREFROM THE EAST 2 ACRES OF THE SOUTH 5 ACRES OF THE NORTH 10-1/2 ACRES OF SAID COMBINED LOTS 3, 4, 9 AND 10. ALSO EXCEPT THEREFROM THAT PORTION DESCRIBED AS FOLLOWS: BEGINNING AT A POINT 15.95 FEET SOUTH OF THE NORTHWEST CORNER OF LOT 9, OF SAID BLOCK 7, RANCHO SAN BERNARDINO, IN THE CITY OF SAN BERNARDINO, COUNTY OF SAN BERNARDINO, STATE OF CALIFORNIA, AS PER PLAT RECORDED IN BOOK 7, PAGE 2 OF MAPS, RECORDS OF SAID COUNTY; THENCE EASTERLY 135 FEET TO A POINT WHICH IS 16.24 FEET SOUTH OF THE NORTH LINE OF SAID LOT 9; THENCE SOUTH 8.86 FEET; THENCE WEST 135 FEET; THENCE NORTH 9.15 FEET TO THE POINT OF BEGINNING. ALSO EXCEPT THEREFROM THAT PORTION DESCRIBED AS FOLLOWS: BEGINNING AT THE NORTHEAST CORNER OF SAID LOT 3; THENCE WEST ALONG THE NORTH LINE OF SAID LOT 3, A DISTANCE OF 347 FEET, MORE OR LESS, TO A POINT THAT IS 528 FEET EAST OF THE WESTERLY LINE OF SAID LOT 10; THENCE SOUTH PARALLEL WITH LINES OF SAID LOT 10 TO THE NORTHWEST CORNER OF THE LAND CONVEYED TO EDWARD L. FLEMING, ET UX., BY DEED RECORDED JULY 31, 1956 AS INSTRUMENT NO. 202, IN BOOK 4000, PAGE 212 OF OFFICIAL RECORDS OF SAID COUNTY; THENCE EAST ALONG THE NORTH LINE OF SAID FLEMING LAND TO THE NORTHEAST CORNER THEREOF; THENCE NORTH TO THE POINT OF BEGINNING. ALSO EXCEPT THEREFROM THAT PORTION CONVEYED TO THE CITY OF SAN BERNARDINO BY DEED RECORDED FEBRUARY 23, 1968 AS INSTRUMENT NO. 747, IN BOOK 6979, PAGE 975 OF OFFICIAL RECORDS. ALSO EXCEPT THEREFROM THE FOLLOWING: ALL THAT CERTAIN PIECE OR PARCEL OF LAND BEING A PORTION OF LOTS 3, 4, 9 AND 10, BLOCK 7, RANCHO SAN BERNARDINO, IN THE CITY OF SAN BERNARDINO, COUNTY OF SAN BERNARDINO, STATE OF CALIFORNIA, AS PER PLAT RECORDED IN BOOK 7, PAGE 2 OF MAPS, RECORDS OF SAID COUNTY AND BEING DESCRIBED AS FOLLOWS: BEGINNING AT A POINT IN THE EAST LINE OF ALLEN STREET, SAID POINT BEING ALSO IN THE WEST LINE OF LOT 10, BLOCK 7 OF SAID RANCHO SAN BERNARDINO, SAID POINT BEING SOUTH 1149.73 FEET FROM THE SOUTH LINE OF RIALTO AVENUE; THENCE SOUTH ALONG THE EAST LINE OF ALLEN STREET, BEING ALSO ALONG THE WEST LINE OF LOTS 10 AND 9, BLOCK 7 OF RANCHO SAN BERNARDINO, 366.98 FEET TO THE NORTHWEST CORNER OF THE LAND CONVEYED TO ADAR BRANEN, ET UX., BY DEED RECORDED FEBRUARY 28, 1949 AS INSTRUMENT NO. 29, IN BOOK 2366, PAGE 126 OF OFFICIAL RECORDS OF SAID COUNTY; THENCE EASTERLY ALONG THE NORTHERLY LINE OF SAID LAST MENTIONED PROPERTY AND THE EASTERLY PROLONGATION THEREOF 520.39 FEET TO A POINT 347 FEET WEST OF THE WEST OF THE WEST LINE OF WATERMAN AVENUE BEING ALSO THE EAST LINE OF BLOCK 7 OF SAID RANCHO SAN BERNARDINO; THENCE NORTH AND PARALLEL WITH THE WEST LINE OF WATERMAN AVENUE, 366.98 FEET TO THE NORTH LINE OF LOTS 3 AND 10, BLOCK 7, RANCHO SAN BERNARDINO; THENCE WESTERLY ALONG THE NORTH LINE OF SAID LOTS 3 AND 10, 520.89 FEET TO THE POINT OF BEGINNING. ALSO EXCEPT THEREFROM THE FOLLOWING: THE EAST 378 FEET OF THE WEST 528 FEET OF THE NORTHERLY 150 FEET OF LOTS 3 AND 10 IN BLOCK 7 OF RANCHO SAN BERNARDINO, IN THE CITY OF SAN BERNARDINO, AS PER PLAT RECORDED IN BOOK 7, PAGE 2 OF MAPS, RECORDS OF SAID COUNTY. PARCEL 4: (APN: 0136-261-28) THE EAST 2 ACRES OF THE SOUTH 5 ACRES OF THE NORTH 10-1/2 ACRES OF LOTS 3, 4, 9 AND 10 BLOCK 7 OF A 5 ACRE SURVEY OF THE RANCHO SAN BERNARDINO, IN THE CITY OF SAN BERNARDINO, STATE OF CALIFORNIA, AS PER MAP RECORDED IN BOOK 7 PAGES 2 OF MAPS, IN THE OFFICE OF THE COUNTY RECORDER OF SAID COUNTY. EXCEPT THE EAST 7.75 FEET, AS CONVEYED TO THE CITY OF SAN BERNARDINO, A MUNICIPAL CORPORATION, BY DEED RECORDED OCTOBER 11, 1968 IN BOOK 7109, PAGE 502, OFFICIAL RECORDS. ALSO EXCEPT THEREFROM THE INTEREST IN AN UNDIVIDED 1/2 INTEREST IN AND TO THE 10 INCH WELL AND PUMPING PLANT LOCATED ON SAID LAND. PARCEL 5: (APN: 0136-261-41-0-000) THE NORTH 1/2 OF THE FOLLOWING DESCRIBED PROPERTY: THAT PORTION OF LOT 11, BLOCK 7, RANCHO SAN BERNARDINO, IN THE CITY OF SAN BERNARDINO, COUNTY OF SAN BERNARDINO, STATE OF CALIFORNIA, AS PER PLAT RECORDED IN BOOK 7, PAGE 2 OF MAPS, RECORDS OF SAID COUNTY, DESCRIBED AS FOLLOWS: BEGINNING AT A POINT 150 FEET NORTH OF THE SOUTHWEST CORNER OF SAID LOT 11; THENCE NORTH 150 FEET; THENCE EAST 290 FEET; THENCE SOUTH 150 FEET; THENCE WEST 290 FEET TO THE POINT OF BEGINNING. PARCEL 6: (APN: 0136-261-42-0-000) THE SOUTH HALF OF THE FOLLOWING DESCRIBED PROPERTY: THAT PORTION OF LOT 11, BLOCK 7, RANCHO SAN BERNARDINO, IN THE CITY OF SAN BERNARDINO, AS PER PLAT RECORDED IN BOOK 7 OF MAPS, PAGE 2, RECORDS OF SAID COUNTY, DESCRIBED AS FOLLOWS: BEGINNING AT A POINT 150 FEET NORTH OF THE SOUTHWEST CORNER OF SAID LOT 11; THENCE NORTH 150 FEET; THENCE EAST 290 FEET; THENCE SOUTH 150 FEET; THENCE WEST 290 FEET TO THE POINT OF BEGINNING. PARCEL 7-A: (PORTION APN 0136-261-57-0-000) ALL THAT PORTION OF LOT 11, BLOCK 7, RANCHO SAN BERNARDINO, IN THE CITY OF SAN BERNARDINO, COUNTY OF SAN BERNARDINO, STATE OF CALIFORNIA, AS PER MAP RECORDED IN BOOK 7, PAGE 2 OF MAPS, IN THE OFFICE OF THE COUNTY RECORDER OF SAID COUNTY. BEGINNING AT A POINT ON THE CENTER LINE OF IRWIN STREET, AS SHOWN BY MAP OF HEARSH SUBDIVISION, RECORDED IN BOOK 25 OF MAPS, PAGE 62, RECORDS OF SAN BERNARDINO COUNTY, 300 FEET NORTH OF THE SOUTH LINE OF SAID LOT 11; THENCE WEST AT RIGHT ANGLES TO WATERMAN AVENUE, 89.27 FEET, MORE OR LESS, TO A POINT 290 FEET EAST OF THE WEST LINE OF SAID LOT; THENCE AT RIGHT ANGLES SOUTH 75 FEET; THENCE AT RIGHT ANGLES EAST, 89.27 FEET, MORE OR LESS, TO A POINT ON THE SOUTHERLY EXTENSION OF THE CENTER LINE OF SAID IRWIN STREET; THENCE NORTHERLY TO THE POINT OF BEGINNING. PARCEL 7-B: (PORTION APN 0136-261-57-0-000) A PORTION OF LOTS 2 AND 11 IN BLOCK 7 OF RANCHO SAN BERNARDINO, IN THE CITY OF SAN BERNARDINO, COUNTY OF SAN BERNARDINO, STATE OF CALIFORNIA, AS PER MAP RECORDED IN BOOK 7, PAGE 2, OF MAPS, IN THE OFFICE OF THE COUNTY RECORDER OF SAID COUNTY, DESCRIBED AS FOLLOWS: COMMENCING AT A POINT ON THE EAST LINE OF SAID LOT 2, 225 FEET NORTH, OF THE SOUTHEAST CORNER OF SAID LOT 2; THENCE NORTH 75 FEET; THENCE WEST AT RIGHT ANGLES TO A POINT 290 FEET EAST OF THE WEST LINE OF SAID LOT 11; THENCE AT RIGHT ANGLES SOUTH 75 FEET; THENCE AT RIGHT ANGLES EAST TO THE POINT OF BEGINNING. SAVING AND EXCEPTING THE EAST 190 FEET THEREOF. ALSO SAVING AND EXCEPTING THAT PORTION LYING WEST OF THE CENTER LINE OF IRWIN STREET EXTENDING SOUTHERLY. PARCEL 7-C: (PORTION APN 0136-261-57-0-000) A PORTION OF LOT 2, BLOCK 7 OF RANCHO SAN BERNARDINO, IN THE CITY OF SAN BERNARDINO, COUNTY OF SAN BERNARDINO, STATE OF CALIFORNIA, AS PER MAP RECORDED IN BOOK 7, PAGE 2, OF MAPS, IN THE OFFICE OF THE COUNTY RECORDER OF SAID COUNTY, DESCRIBED AS FOLLOWS: COMMENCING AT A POINT ON THE EAST LINE OF SAID LOT 2, 262.5 FEET NORTH OF THE SOUTHEAST CORNER OF SAID LOT 2; THENCE NORTH 37.5 FEET; THENCE, WEST AT RIGHT ANGLES, 90 FEET; THENCE SOUTH AT RIGHT ANGLES 37.5 FEET; THENCE EAST AT RIGHT ANGLES TO THE POINT O F BEGINNING. EXCEPTING THEREFROM THE EAST 8.75 FEET, AS CONVEYED TO THE CITY OF SAN BERNARDINO, A MUNICIPAL CORPORATION, BY DEED RECORDED NOVEMBER 12, 1968 IN BOOK 7128, PAGE 488 OF OFFICIAL RECORDS. PARCEL 7-D: (PORTION APN 0136-261-57-0-000) THAT PORTION OF LOT 2, BLOCK 7, RANCHO SAN BERNARDINO, IN THE CITY OF SAN BERNARDINO, COUNTY OF SAN BERNARDINO, STATE OF CALIFORNIA, AS PER MAP RECORDED IN BOOK 7, PAGE 2, OF MAPS, IN THE OFFICE OF THE COUNTY RECORDER OF SAID COUNTY, MORE PARTICULARLY DESCRIBED A S FOLLOWS: COMMENCING AT A POINT ON THE EAST LINE OF SAID LOT 2, 262-1/2 FEET NORTH OF THE SOUTHEAST CORNER OF SAID LOT 2; THENCE WEST 90 FEET TO THE SOUTHWEST CORNER OF THAT CERTAIN PARCEL OF LAND DEEDED TO WILLIAM ARMSTRONG, ET UX., BY DEED RECORDED AUGUST 10, 1946, AS INSTRUMENT NO. 83. RECORDS OF SAID COUNTY, FOR TRUE POINT OF BEGINNING; THENCE NORTH 37.5 FEET TO THE NORTHWEST CORNER OF SAID ARMSTRONG LAND; THENCE WEST AT RIGHT ANGLES TO A POINT 100 FEET WEST OF THE NORTHWEST CORNER OF SAID ARMSTRONG LAND; THENCE SOUTH 37.5 FEET TO THE NORTHWEST CORNER OF THAT CERTAIN PARCEL OF LAND DEEDED TO RAYBURN L. DIXON, ET UX., BY DEED RECORDED AUGUST 20, 1946, AS INSTRUMENT NO. 48, RECORDS OF SAID COUNTY; THENCE EAST ALONG THE NORTH LINE OF SAID DIXON LAND TO THE POINT OF BEGINNING. PARCEL 7-E: (PORTION APN 0136-261-57-0-000) A PORTION OF LOT 2, BLOCK 7, RANCHO SAN BERNARDINO, IN THE CITY OF SAN BERNARDINO, COUNTY OF SAN BERNARDINO, STATE OF CALIFORNIA, AS PER MAP RECORDED IN BOOK 7, PAGE 2, OF MAPS, IN THE OFFICE OF THE COUNTY RECORDER OF SAID COUNTY, DESCRIBED AS FOLLOWS: COMMENCING AT A POINT ON THE EAST LINE OF SAID LOT 2, 225 FEET NORTH OF THE SOUTHEAST CORNER OF SAID LOT 2; THENCE, NORTH 37.5 FEET; THENCE, WEST AT RIGHT ANGLES TO A POINT 190 FEET WEST OF THE EAST LINE OF SAID LOT 2; THENCE SOUTH AT RIGHT ANGLES 37.5 FEET; THENCE AT RIGHT ANGLES EAST TO THE POINT OF BEGINNING. EXCEPT THEREFROM THAT PROPERTY DEEDED TO THE CITY OF SAN BERNARDINO, BY DEED RECORDED JANUARY 26, 1968, IN BOOK 6965, PAGE 30 OF OFFICIAL RECORDS: DESCRIBED AS FOLLOWS: THE EAST 8.75 FEET OF THE SOUTH 262.50 FEET OF LOT 2, BLOCK 7, RANCHO SAN BERNARDINO, IN THE CITY OF SAN BERNARDINO, COUNTY OF SAN BERNARDINO, STATE OF CALIFORNIA, AS PER MAP RECORDED IN BOOK 7, PAGE 2, OF MAPS, IN THE OFFICE OF THE COUNTY RECORDER OF SAID COUNTY. THE WESTERLY LINE OF SAID EAST 8.75 FEET BEING 50.00 FEET WEST, MEASURED AT RIGHT ANGLES, FROM THE CENTER LINE OF WATERMAN AVENUE, 82.50 FEET WIDE. PARCEL 7-F: (PORTION APN 0136-261-57-0-000) THAT PORTION OF LOTS 2 AND 11, BLOCK 7, RANCHO SAN BERNARDINO, IN THE CITY OF SAN BERNARDINO, COUNTY OF SAN BERNARDINO, STATE OF CALIFORNIA, AS PER MAP RECORDED IN BOOK 7, PAGE 2, OF MAPS, IN THE OFFICE OF THE COUNTY RECORDER OF SAID COUNTY, DESCRIBED AS FOLLOWS: BEGINNING AT THE SOUTHEAST CORNER OF SAID LOT 2; THENCE NORTH 225 FEET; THENCE WEST TO A POINT ON THE SOUTHERLY PROLONGATION OF THE CENTERLINE OF IRWIN STREET AS SHOWN ON THE MAP OF HEARSH SUBDIVISION, AS PER MAP RECORDED IN BOOK 24 OF MAPS, PAGE 62, RECORDS OF SAID COUNTY; AND 225 FEET NORTH OF THE SOUTH LINE OF SAID LOT 11; THENCE SOUTH ALONG SAID SOUTHERLY PROLONGATION OF CENTER LINE OF IRWIN STREET, 225 FEET TO POINT ON SOUTH LINE OF SAID LOT 11; THENCE EAST TO THE POINT OF BEGINNING. EXCEPT THEREFROM THAT PROPERTY DEEDED TO THE CITY OF SAN BERNARDINO, BY DEED RECORDED JANUARY 26, 1968, IN BOOK 6965, PAGE 30 OF OFFICIAL RECORDS: DESCRIBED AS FOLLOWS: THE EAST 8.75 FEET OF THE SOUTH 262.50 FEET OF LOT 2, BLOCK 7, RANCHO SAN BERNARDINO, IN THE CITY OF SAN BERNARDINO, COUNTY OF SAN BERNARDINO, STATE OF CALIFORNIA, AS PER MAP RECORDED IN BOOK 7, PAGE 2, OF MAPS, IN THE OFFICE OF THE COUNTY RECORDER OF SAID COUNTY. THE WESTERLY LINE OF SAID EAST 8.75 FEET BEING 50.00 FEET WEST, MEASURED AT RIGHT ANGLES, FROM THE CENTER LINE OF WATERMAN AVENUE, 82.50 FEET WIDE. PARCEL 7-G: (PORTION APN 0136-261-57-0-000) THAT PORTION OF LOT 11, BLOCK 7, RANCHO SAN BERNARDINO, IN THE CITY OF SAN BERNARDINO, COUNTY OF SAN BERNARDINO, STATE OF CALIFORNIA, AS PER MAP RECORDED IN BOOK 7, PAGE 2, OF MAPS, IN THE OFFICE OF THE COUNTY RECORDER OF SAID COUNTY, DESCRIBED AS FOLLOWS: BEGINNING AT THE INTERSECTION OF THE SOUTHERLY PROLONGATION OF THE CENTER LINE OF IRWIN STREET, AS SHOWN ON MAP OF HEARSH SUBDIVISION, IN THE CITY OF SAN BERNARDINO, COUNTY OF SAN BERNARDINO, STATE OF CALIFORNIA, AS PER MAP RECORDED IN BOOK 24, PAGE 62, OF MAPS, IN THE OFFICE OF THE COUNTY RECORDER OF SAID COUNTY, WITH THE NORTH LINE OF THE SOUTH 100 FEET OF SAID LOT 11; THENCE SOUTH 100 FEET ALONG SAID PROLONGED CENTER LINE TO THE SOUTH LINE OF SAID LOT; THENCE WEST ALONG SAID SOUTH LINE TO A POINT 290 FEET EAST OF THE SOUTHWEST CORNER OF SAID LOT; THENCE NORTH 100 FEET PARALLEL WITH THE WEST LINE OF SAID LOT; THENCE EAST TO THE POINT OF BEGINNING. PARCEL 7-H: (PORTION APN 0136-261-57-0-000) THE NORTH 50 FEET OF THAT PORTION OF LOT 11, BLOCK 7, RANCHO SAN BERNARDINO, IN THE CITY OF SAN BERNARDINO, COUNTY OF SAN BERNARDINO, STATE OF CALIFORNIA, AS PER MAP RECORDED IN BOOK 7, PAGE 2, OF MAPS, IN THE OFFICE OF THE COUNTY RECORDER OF SAID COUNTY, DESCRIBED AS FOLLOWS: BEGINNING AT THE SOUTHWEST CORNER OF SAID LOT 11; THENCE NORTH 150 FEET; THENCE EAST 290 FEET; THENCE SOUTH 150 FEET; THENCE WEST 290 FEET TO THE POINT OF BEGINNING. PARCEL 7-I: (PORTION APN 0136-261-57-0-000) THAT PORTION OF LOT 11, BLOCK 7 OF RANCHO SAN BERNARDINO, IN THE CITY OF SAN BERNARDINO, COUNTY OF SAN BERNARDINO, STATE OF CALIFORNIA, AS PER MAP RECORDED IN BOOK 7, PAGE 2, OF MAPS, IN THE OFFICE OF THE COUNTY RECORDER OF SAID COUNTY, DESCRIBED AS FOLLOWS: BEGINNING AT THE INTERSECTION OF THE SOUTHERLY PROLONGATION OF THE CENTER LINE OF IRWIN STREET AS SHOWN ON MAP OF HEARSH SUBDIVISION, IN THE CITY OF SAN BERNARDINO, COUNTY OF SAN BERNARDINO, STATE OF CALIFORNIA, AS PER MAP RECORDED IN BOOK 24, PAGE 62, OF MAPS, IN THE OFFICE OF THE COUNTY RECORDER OF SAID COUNTY, WITH THE NORTH LINE OF THE SOUTH 225 FEET OF SAID LOT 11; THENCE SOUTH ALONG SAID PROLONGED CENTER LINE 125 FEET; THENCE WEST TO A POINT 290 FEET EAST OF THE WEST LINE OF SAID LOT 11, THENCE NORTH PARALLEL WITH THE WEST LINE OF SAID LOT 11, 125 FEET; THENCE EAST TO THE POINT OF BEGINNING. PARCEL 8: (APN: 0136-261-43-0-000) THAT PORTION OF LOT 11, BLOCK 7, RANCHO SAN BERNARDINO, IN THE CITY OF SAN BERNARDINO, COUNTY OF SAN BERNARDINO, STATE OF CALIFORNIA, AS PER PLAT RECORDED IN BOOK 7 OF MAPS, PAGE 2, IN THE OFFICE OF THE COUNTY RECORDER OF SAID COUNTY DESCRIBED AS FOLLOWS: BEGINNING AT THE SOUTHWEST CORNER OF SAID LOT 11; THENCE NORTH 150 FEET; THENCE EAST 290 FEET; THENCE SOUTH 150 FEET; THENCE WEST 290 FEET TO THE POINT OF BEGINNING. EXCEPT THE NORTH 50 FEET THEREOF AS DESCRIBED IN DEED RECORDED FEBRUARY 10, 1955 IN BOOK 3565, PAGE 240 OFFICIAL RECORDS. ALSO EXCEPT THE SOUTH 50 FEET THEREOF AS DESCRIBED IN DEED RECORDED MAY 13, 1963 IN BOOK 5907, PAGE 666 OFFICIAL RECORDS. PARCEL 9: (APN: 0136-261-44-0-000) THAT PORTION OF LOTS 11, BLOCK 7, RANCHO SAN BERNARDINO, IN THE CITY OF SAN BERNARDINO, COUNTY OF SAN BERNARDINO, STATE OF CALIFORNIA, AS PER MAP RECORDED IN BOOK 7 PAGES 2, OF MAPS, IN THE OFFICE OF THE COUNTY RECORDER OF SAID COUNTY. BEGINNING AT THE SOUTHWEST CORNER OF SAID LOT 11; THENCE NORTH 50 FEET; THENCE EAST 290 FEET; THENCE SOUTH 50 FEET; THENCE WEST 290 FEET, TO THE POINT OF BEGINNING. PARCEL 10: (APN: 136-261-37-0-000) THE WEST 528 FEET OF THE NORTHERLY 3 ACRES OF LOTS 3 AND 10, IN BLOCK 7, OF THE RANCHO SAN BERNARDINO, COUNTY OF SAN BERNARDINO, STATE OF CALIFORNIA, AS PER PLAT RECORDED IN BOOK 7 OF MAPS, PAGE 2, RECORDS OF SAID COUNTY. EXCEPT THE EAST 378 FEET OF SAID WEST 528 FEET. PARCEL 11: (APNS 0136-261-11 AND 0136-261-50): ALL THAT CERTAIN PIECE OF PARCEL OF LAND BEING A PORTION OF LOTS 3, 4, 9 AND 10, BLOCK 7, RANCHO SAN BERNARDINO, IN THE CITY OF SAN BERNARDINO, COUNTY OF SAN BERNARDINO, STATE OF CALIFORNIA, AS PER PLAT RECORDED IN BOOK 7 OF MAPS, PAGE 2, RECORDS OF SAID COUNTY AND BEING DESCRIBED AS FOLLOWS: BEGINNING AT A POINT IN THE EAST LINE OF ALLEN STREET SAID POINT BEING ALSO IN THE WEST LINE OF LOT 10, BLOCK 7 OF SAID RANCHO SAN BERNARDINO, SAID POINT BEING SOUTH 1149.73 FEET FROM THE SOUTH LINE OF RIALTO AVENUE; THENCE SOUTH ALONG THE EAST LINE OF ALLEN STREET, BEING ALSO ALONG THE WEST LINE OF LOTS 10 AND 9, BLOCK 7 OF RANCHO SAN BERNARDINO, 366.98 FEET TO THE NORTHWEST CORNER O F THE LAND CONVEYED TO ADAR BRANAN ET UX BY DEED RECORDED FEBRUARY 28, 1949 IN BOOK 2366, PAGE 126 OF OFFICIAL RECORDS OF SAID COUNTY; THENCE EASTERLY ALONG THE NORTHERLY LINE OF SAID LAST MENTIONED PROPERTY AND THE EASTERLY PROLONGATION THEREOF 520.39 FEET TO A POINT 347 FEET WEST OF THE WEST OF THE WEST LINE OF WATERMAN AVENUE BEING ALSO THE EAST LINE OF BLOCK 7, OF SAID RANCHO SAN BERNARDINO; THENCE NORTH AND PARALLEL WITH THE WEST LINE OF WATERMAN AVENUE, 366.98 FEET TO THE NORTH LINE OF LOTS 3 AND 10 BLOCK 7, RANCHO SAN BERNARDINO; THENCE WESTERLY ALONG THE NORTHERLY LINE OF SAID LOTS 3 AND 10, 520.89 FEET TO THE POINT OF BEGINNING. EXCEPT THEREFROM THAT PORTION DESCRIBED AS FOLLOWS: BEGINNING AT A POINT 15.95 FEET SOUTH OF THE NORTHWEST CORNER OF LOT 9, OF SAID BLOCK 7, RANCHO SAN BERNARDINO, IN THE CITY OF SAN BERNARDINO, COUNTY OF SAN BERNARDINO, STATE OF CALIFORNIA, AS PER PLAT RECORDED IN BOOK 7 OF MAPS, PAGE 2 RECORDS OF SAID COUNTY; THENCE EASTERLY 135 FEET TO A POINT WHICH IS 16.24 FEET SOUTH OF THE NORTH LINE OF SAID LOT 9; THENCE SOUTH 8.86 FEET; THENCE WEST 135 FEET; THENCE NORTH 9.15 FEET TO THE POINT OF BEGINNING. PARCEL 12 (APN: 0136-261-36): THE EAST 378 FEET OF THE WEST 528 FEET OF THE NORTHERLY 150 FEET OF LOTS 3 AND 10 IN BLOCK 7 OF RANCHO SAN BERNARDINO, IN THE CITY OF SAN BERNARDINO, AS PER PLAT RECORDED IN BOOK 7 OF MAPS, PAGE 2 RECORDS OF SAID COUNTY. PARCEL 13: (APN: 0136-261-29) THE EAST 2 ACRES OF THE SOUTH 5 ACRES OF THE NORTH 15.50 ACRES OF LOTS 3, 4, 9 AND 10 BLOCK 7, RANCHO SAN BERNARDINO, IN THE CITY OF SAN BERNARDINO, COUNTY OF SAN BERNARDINO, STATE OF CALIFORNIA, AS PER PLAT RECORDED IN BOOK 7, PAGE 2, RECORDS OF SAID COUNTY. EXCEPTING THEREFROM ANY PORTION OF THE ABOVE DESCRIBED PROPERTY LYING WITHIN THE SOUTH 2.25 ACRES OF LOT 4, OR WITHIN THE SOUTH 2.25 ACRES OF LOT 9, IN SAID BLOCK 7. ALSO EXCEPTING THEREFROM THAT PORTION CONVEYED TO THE CITY OF SAN BERNARDINO, BY DEED RECORDED JULY 16, 1968 AS INSTRUMENT NO. 400, IN BOOK 7060, PAGE 355, OFFICIAL RECORDS. SAID LAND IS ALSO SHOWN ON LICENSED LAND SURVEYORS MAP FILED IN BOOK 36, PAGE 4, RECORDS OF SURVEY. EXCEPTING THEREFROM ALL OF THE FOLLOWING DESCRIBED PROPERTY: (APN: 0136-261-41-0-000, APN: 0136-261-42-0-000, APN: 0136-261-43-0-000, PORTION APN 0136-261-44-0-000 & PORTION APN 0136-261-57-0-000) ALL OF PARCELS 5, 6, & 8, AND PORTIONS OF PARCELS 7 & 9 DESCRIBED AS: THAT PORTION OF LOT 11, BLOCK 7, RANCHO SAN BERNARDINO, IN THE CITY OF SAN BERNARDINO, COUNTY OF SAN BERNARDINO, STATE OF CALIFORNIA, AS PER PLAT RECORDED IN BOOK 7, PAGE 2 OF MAPS, RECORDS OF SAID COUNTY, CONTAINING 2.23 ACRES AND DESCRIBED AS FOLLOWS: BEGINNING AT THE NORTHWEST CORNER OF HEREINABOVE DESCRIBED PARCEL 5, ALSO BEING A POINT ON THE EASTERLY RIGHT-OF-WAY OF ALLEN STREET (41.25 FOOT HALF-WIDTH) AND THE WESTERLY LINE OF SAID LOT 11; THENCE ALONG THE NORTHERLY LINE OF SAID PARCEL 5, NORTH 89°31’12” EAST (RECORD - EAST) 352.27 FEET; THENCE LEAVING SAID NORTHERLY LINE, SOUTH 00°29’57” EAST 275.24 FEET; THENCE SOUTH 89°30’03 WEST 352.27 FEET TO SAID EASTERLY RIGHT-OF-WAY OF ALLEN STREET; THENCE ALONG SAID RIGHT-OF-WAY, NORTH 00°29’57” WEST 275.36 FEET TO THE POINT OF BEGINNING. 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 April , 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 full, 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 interes t 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 by entering into a new sublease agreement with a duly authorized replacement charter school operator or other lawful educational user, provided that, immediately upon obtaining possession, and until commencement of the new sublease, LENDER covenants and agrees to diligently perform building maintenance and groundskeeping services as necessary to immediately remedy any condition of blight or unsightly appearance in the Charter School Improvements.. 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 claim 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 TENANT: 230 SOUTH WATERMAN AVENUE, LLC BEEN DELIVERED TO THE CHAIRMAN OF THE BOARD 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 alteration 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 Guaranty 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, the 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 any 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 SUBLEASE AGREEMENT by and between 230 SOUTH WATERMAN AVENUE LLC as Lessor and THE HIGH DESERT “PARTNERSHIP IN ACADEMIC EXCELLENCE” FOUNDATION, INCORPORATED as Lessee Dated as of June 1, 2020 Pursuant to the Loan Agreement (as defined herein), the Lessor has granted, bargained, sold, alienated, pledged, set over and confirmed to the Authority (as defined herein) all rights and interests of the Lessor in this Lease Agreement, except for the Lessor’s Unassigned Rights (as defined herein). TABLE OF CONTENTS Page ARTICLE I .......................................................................................................................... DEFINITIONS 2 ARTICLE II ............................................................................................................ REPRESENTATIONS 13 Section 2.01. ..................................................................................... Representations by Lessor 13 Section 2.02. .................................................................................... Representations by Lessee 16 Section 2.03. ........................................................................................ Lessee’s Tax Covenants 19 Section 2.04. ........................................ Lessee’s Covenant to Comply With Charter School Act 20 ARTICLE III ...................................................................................................... TERM OF AGREEMENT 20 ARTICLE IV .................................................................................................................. GROUND LEASE 21 ARTICLE V ....................................................................................................... PAYMENT PROVISIONS 21 Section 5.01. ...................................................................... Lease Payments; Limited Obligation 21 Section 5.02. Base Lease Payments, Additional Lease Payments and Other Amounts Payable 21 Section 5.03. ................................................................................................ Manner of Payment 22 Section 5.04. ................................................................................................... Pledge by Lessee 22 ARTICLE VI ....................................................................... MAINTENANCE, TAXES AND INSURANCE 23 Section 6.01. ......................................... Maintenance and Modifications of Facilities By Lessee 23 Section 6.02. ..................................... Taxes, Other Governmental Charges and Utility Charges 23 Section 6.03. ................................................................................................ Insurance Required 24 Section 6.04. .............................................................. Application of Net Proceeds of Insurance 26 Section 6.05. .............................................................................................. Advances by Trustee 26 Section 6.06. ........................................................................................ Environmental Indemnity 26 Section 6.07. ...................................................................................... Environmental Covenants 28 Section 6.08. ...................................................................... Additional Environmental Provisions 30 ARTICLE VII .......................................................... DAMAGE, DESTRUCTION AND CONDEMNATION 31 Section 7.01. .............................................................. Damage, Destruction and Condemnation 31 Section 7.02. .................................................................................... Treatment of Net Proceeds 32 Section 7.03. ................................................... Continuation of Operations in Event of Casualty 32 ARTICLE VIII ...................................................................................................... SPECIAL COVENANTS 32 Section 8.01. ........................................................................................................ Annual Budget 32 Section 8.02. .......................................................... Consolidation, Merger, Sale or Conveyance 32 Section 8.03. ................................................................................................ Further Assurances 33 Section 8.04. ...................................................................................................................... Audits 33 Section 8.05. ............ Books and Records; Compliance with Continuing Disclosure Agreement 33 Section 8.06. ....................................................................................................... Indemnification 34 Section 8.07. ................................................. Authority of Authorized Representative of Lessee 36 Section 8.08. .................................................. Authority of Authorized Representative of Lessor 36 Section 8.09. ....................................................................................Licenses and Qualifications 36 Section 8.10. ...................................................................................................... Right to Inspect 36 Section 8.11. ................................................................................... Assignment and Subleasing 37 Section 8.12. ........................................................................................................ Prohibited Use 37 Section 8.13. ........................................... Limitations on Incurrence of Additional Indebtedness 37 Section 8.14. ................................................................................................... Operating Leases 42 Section 8.15. .................................... Covenant to Comply with Indenture and Loan Agreement 42 Section 8.16. ....................................................................................................................... Liens 42 Section 8.17. ....................................................................... Lease Blocked Account Agreement 42 Section 8.18. ............................................................................................... Days Cash on Hand 42 Section 8.19. ...................................................................................................... Coverage Ratio 43 Section 8.20. ......................................................................................................... Subordination 44 Section 8.21. ............................................................................................................Investor Call 44 Section 8.22. ....................................................... Subordination of Support Office Service Fees 44 ARTICLE IX ......................................................................... ASSIGNMENT AND PLEDGE BY LESSOR 45 ii ARTICLE X ............................................................................. EVENTS OF DEFAULT AND REMEDIES 45 Section 10.01. .................................................................................................. Events of Default 45 Section 10.02. ........................................................................................... Remedies On Default 47 Section 10.03. .......................................................................................... No Remedy Exclusive 48 Section 10.04. .............................................. Agreement to Pay Attorneys’ Fees and Expenses 49 Section 10.05. .................................................................................................................. Waiver 49 Section 10.06. ....................................................................... Treatment of Funds in Bankruptcy 49 ARTICLE XI ......................................................................................................................... [RESERVED] 50 ARTICLE XII ............................................................................................................... MISCELLANEOUS 50 Section 12.01. .................................................................................................................. Notices 50 Section 12.02. ....................................................................................................... Binding Effect 51 Section 12.03. ........................................................................................................... Severability 51 Section 12.04. ...................................................................................... Third Party Beneficiaries 51 Section 12.05. ............................................................................................................. Net Lease 51 Section 12.06. .......................................................... Amendments, Changes And Modifications 51 Section 12.07. .................................................................................... Execution in Counterparts 52 Section 12.08. ..................................................................................................... Governing Law 52 Section 12.09. ..................................................................................................................... Filing 52 Section 12.10. ............................................................ Cancellation at Expiration of Lease Term 52 Section 12.11. ....................................................................... No Pecuniary Liability of Authority 52 Section 12.12. ........... No Personal Liability of Officials of Lessee, Lessor, Authority or Trustee 52 Section 12.13. ......................................................................................... No Warranty by Lessor 53 Section 12.14. ............................................................................. Prior Agreements Superseded 53 Section 12.15.Covenant by Lessee With Respect to Statements, Representations and Warranties 53 Section 12.16. ............................................................................................................... Captions 53 Section 12.17. ....................................................................... Lease Payments Due on Holidays 54 Section 12.18. .......................................................................... Provision of General Application 54 Section 12.19. ................................................................................................................. Survival 54 Section 12.20. ...................................................................................... Notice of Change in Fact 54 Section 12.21. .................................................................................................. CASp Disclosure 54 Section 12.22. .......................................................................... Energy Use Disclosure Program 55 Section 12.23. ......................... Waiver of Sections 1932(2) and 1933(4) of the California Code 55 EXHIBIT A .............................................................................................. Base Lease Payment Schedule 1 EXHIBIT B ....................................................................................................... Real Property Description 1 EXHIBIT C ................................................................................................. Form of No Default Certificate 1 EXHIBIT D ......................................................................................... Form of Coverage Ratio Certificate 1 SUBLEASE AGREEMENT THIS SUBLEASE AGREEMENT, dated as of June 1, 2020 (this “Lease Agreement”), is by and between 230 SOUTH WATERMAN AVENUE LLC, a California limited liability company (the “Lessor”), and THE HIGH DESERT “PARTNERSHIP IN ACADEMIC EXCELLENCE” FOUNDATION, INCORPORATED (“Lessee”), a California nonprofit public benefit corporation designated as an organization described in Section 501(c)(3) of the Internal Revenue Code of 1986 (the “Code”) and authorized to operate charter schools by the State of California (the “State”). W I T N E S S E T H: WHEREAS, the California Enterprise Development Authority (the “Authority”) is authorized pursuant to the provisions of Article 1 through 4 (commencing with Section 6500) of Chapter 5 of Division 7 of Title 1 of the Government Code of the State of California, as amended (the “Act”), to issue its revenue bonds for the purpose of financing the acquisition, renovation, improvement, furnishing and equipping of the Series 2020 Project (as hereinafter defined); and WHEREAS, the Lessee has requested the assistance of the Authority in financing or refinancing the acquisition, renovation, improvement, furnishing and equipping of land and charter school facilities located at 230 South Waterman Avenue, San Bernardino, California 92408, and operated by the Lessee as the charter school known as Norton Science and Language Academy; and WHEREAS, the Authority has determined to assist the Lessee by issuing its $[PARA] Charter School Revenue Bonds (Norton Science and Language Academy Project), Tax-Exempt Series 2020A (the “Series 2020A Bonds”), and its $[PARB] Charter School Revenue Bonds (Norton Science and Language Academy Project), Taxable Series 2020B (the “Series 2020B Bonds” and, together with the Series 2020A Bonds, the “Series 2020 Bonds”) pursuant to an Indenture of Trust dated as of June 1, 2020 (the “Indenture”), by and between the Authority and Wilmington Trust, National Association, as trustee (the “Trustee”), in order to make one or more loans to the Lessor pursuant to the Loan Agreement (as defined herein) for purposes of (i) financing or refinancing the costs of the acquisition, renovation, improvement, furnishing and equipping of land and charter school facilities to be leased to the Lessee for use as Norton Science and Language Academy (the “School”) and located at 230 South Waterman Avenue, San Bernardino, California (the “Series 2020 Facilities”); (ii) funding a debt service reserve fund for the Series 2020 Bonds; and (iii) paying certain expenses incurred in connection with the issuance of the Series 2020 Bonds (collectively, the “Series 2020 Project”); and WHEREAS, the Lessee is authorized pursuant to Part 26.8 of Division 4 of Title II of the Education Code of the State of California (the “Charter School Act”), to lease facilities for the purpose of operating its charter schools; and WHEREAS, the Lessor proposes to lease to the Lessee and the Lessee desires to lease from the Lessor the Leased Property, upon the terms and conditions hereinafter set forth in this Lease Agreement. 2 NOW, THEREFORE, for and in consideration of the premises and the mutual covenants hereinafter contained, the parties hereto formally covenant, agree and bind themselves as follows: ARTICLE I DEFINITIONS All terms defined in Article I of the Indenture and not otherwise defined herein shall have the same meaning in this Lease Agreement. In addition, the following terms, except where the context indicates otherwise, shall have the respective meanings set forth below: “Accountant” means any independent certified public accounting firm licensed to practice in the State (which may be the firm of accountants that regularly audits the books and accounts of the Lessee) from time to time selected by the Lessee. “Actual Annual Debt Service” means the principal and interest payment requirements with respect to all Indebtedness for the Fiscal Year being tested. “Actual Annual Lease Payments” means the actual amount of Base Lease Payments to be paid hereunder with respect the Fiscal Year being tested. “Additional Lease Payments” means the cost of the (a) reasonable expenses of the Authority related to the performance of the provisions of the Loan Agreement, or otherwise incurred at the request of the Lessee, including but not limited to the fees and expenses described in Section 5.01(e), (f), (h) and (i) of the Loan Agreement, (b) the reasonable expenses and fees of the Trustee, the Custodian, the Dissemination Agent and Rebate Analyst and any amounts required to be deposited and replenished in the Rebate Fund, (c) any amounts required to be deposited and replenished in the Debt Service Reserve Fund, (d) any amounts required to be deposited to and replenished in the Repair and Replacement Fund, and (e) other charges and costs (together with all interest and penalties that may accrue thereon) in the event that the Lessee shall fail to pay the same, as specifically set forth herein which the Lessee assumes or agrees to pay hereunder. Additional Lease Payments do not include Base Lease Payments. “Administrative Services Agreement” means any agreement between the Lessee and a charter school, including charter schools operated or managed by the Lessee, pursuant to which the Lessee provides administrative or support services. “Annual Administration Fees” means any annual fees of the Trustee related to the Bonds, annual fees of the Dissemination Agent under the Continuing Disclosure Agreement, and the Authority Annual Fee (as defined in the Indenture). “Authorized Representative” means, (a) in the case of the Lessor, the Chair, Vice Chairman, President or Secretary of its sole member or any other person designated as such by a statement of the Lessor or its sole member signed by one of the foregoing officers and filed with the Trustee, acting on behalf of the Lessor and, when used with reference to the performance of any act, the discharge of any duty or the execution of any certificate or other document, any officer, employee or other person authorized to perform such act, discharge such duty or execute 3 such certificate or other document and (b) in the case of the Lessee, the Chair, Vice Chairman or Secretary of the Lessee or any other person designated as such by a statement of the Lessee signed by one of the foregoing officers and filed with the Trustee and, when used with reference to the performance of any act, the discharge of any duty or the execution of any certificate or other document, any officer, employee or other person authorized to perform such act, discharge such duty or execute such certificate or other document. “Balloon Amount” means the largest amount maturing on any Balloon Indebtedness during any twelve consecutive months in which such Balloon Indebtedness is outstanding. “Balloon Indebtedness” means Long-Term Indebtedness where the principal of (and premium, if any) and interest and other debt service charges on such Long-Term Indebtedness due (or payable in respect of any required purchase of such Long-Term Indebtedness by such person on demand) in any fiscal year either are equal to at least 25% of the total principal of (any premium, if any) and interest and other debt service charges on such Long-Term Indebtedness. Balloon Indebtedness does not include Indebtedness which otherwise would be classified as Put Indebtedness. “Base Lease Payment Date” means each Business Day on which the Lessee is required to make the Base Lease Payments pursuant to the schedule attached hereto as Exhibit A. “Base Lease Payments” means the payments payable by the Lessee during the Lease Term as set forth in Exhibit A, as such Exhibit A may be amended hereunder from time to time, which constitute the payments payable by the Lessee for and in consideration of the right to use the Facilities during the Lease Term. “Bond Proceeds of a Series” means all amounts actually or constructively received from the sale of the related Series of Tax-Exempt Bonds (including underwriters’ discount or compensation, but excluding pre-issuance accrued interest), plus all investment earnings thereon. “Capital Improvements” means the acquisition of land, easements, facilities, and equipment (other than ordinary repairs and replacements), and the construction or reconstruction of improvements, betterments, and extensions which, under Generally Accepted Accounting Principles as prescribed by the Governmental Accounting Standards Board, are properly chargeable as capital items. “Charter School Contract” means, collectively, the charter contract entered into pursuant to the Charter School Act by and between the Lessee and [________], with a term from June 1, [____] through and including June 30, [____], and any subsequent renewal thereof, as amended and modified from time to time. “Commitment Indebtedness” means the obligation of any Person to repay amounts disbursed pursuant to a commitment from a Qualified Provider to pay, refinance or purchase when due, when tendered or when required to be purchased or tendered, or to extend funds for such purpose, other Indebtedness of such Person or any other obligation of any other Person, and the obligation of any Person to pay interest payable on amounts disbursed for such purposes, plus any fees, costs or expenses payable to such Qualified Provider for, under or in connection with such commitment, in the event of disbursement pursuant to such commitment or in connection 4 with enforcement thereof, including without limitation any penalties payable in the event of such enforcement and any indemnification, if enforceable, or contribution obligation related thereto. “Completion Indebtedness” means any Long-Term Indebtedness incurred by any Person for the purpose of financing the completion of Capital Improvements, for which such Long-Term Indebtedness was incurred under the Indenture, to the extent necessary to provide for completion of the Capital Improvements in substantially the same type and scope contemplated at the time that such Long-Term Indebtedness was incurred. Completion Indebtedness may also finance interest on the Completion Indebtedness for a period up to three years from the date of issuance thereof, any reserve funds related to such Completion Indebtedness and the costs and expenses of issuing such Completion Indebtedness. “Continuing Disclosure Agreement” means the Continuing Disclosure Agreement dated as of June 1, 2020, by and among the Lessee, the Borrower and the Dissemination Agent, as may be amended, supplemented or restated from time to time. “County” means the County of San Bernardino, California. “Coverage Ratio” means the ratio obtained by dividing (i) Net Income Available for Lease Payments for the Fiscal Year being tested by (ii) the sum (without duplication) of Actual Annual Lease Payments and Actual Annual Debt Service (which Actual Annual Debt Service shall not include any payments with respect to the Series 2020 Bonds); provided, however, for the purposes of Subsection 8.13(b) herein, “Coverage Ratio” means the ratio obtained by dividing (i) Net Income Available for Lease Payments for the Fiscal Year being tested by (ii) the sum (without duplication) of Maximum Annual Lease Payments and Maximum Annual Debt Service (which Maximum Annual Debt Service shall not include any payments with respect to the Series 2020 Bonds). “Custodian” means Wilmington Trust, National Association, as custodian under the Lease Blocked Account Agreement. “Days Cash on Hand” means as of any date of determination, the product of 365 times a fraction, (i) the numerator of which is the sum of (a) the aggregate amount of School’s unrestricted cash and unrestricted investments and board designated funds that are not otherwise restricted (either permanently or temporarily) as to their use for payment of total Operating Expenses as of such date of determination and (b) amounts on deposit in the Repair and Replacement Fund and, (ii) the denominator of which is total Operating Expenses, in each case, for the period of four fiscal quarters ended on the date of determination, and determined in accordance with Generally Accepted Accounting Principles. “Days Cash on Hand Requirement” means for the Fiscal Year ending June 30, 2020, and for each Fiscal Year thereafter, 45 Days Cash on Hand. “Debt Service” means the Principal and Interest Requirements on Indebtedness, for the period of time for which calculated, excluding Non-Recourse Indebtedness and Subordinated Indebtedness; provided, however, that for purposes of calculating such amount, principal and interest shall be excluded from the determination of Debt Service if amounts have been deposited in trust, escrowed or otherwise set aside with the Trustee for the payment thereof. 5 “Dissemination Agent” means Urban Futures, Inc., or another dissemination agent appointed pursuant to the Continuing Disclosure Agreement. “Electronic Means” means telecopy, facsimile transmission, email transmission or other similar electronic means of communication providing evidence of transmission. “Environmental Damages” means all claims, judgments, damages, losses, penalties, fines, Liabilities (including strict liability), encumbrances, Liens (as defined in the Indenture), privileges, costs, and expenses of investigation and defense of any claim, whether or not such claim is ultimately defeated, and of any good faith settlement or judgment, of whatever kind or nature, contingent or otherwise, matured or unmatured, foreseeable or unforeseeable, including without limitation reasonable attorneys’ fees and expert consultants’ fees and disbursements, any of which are incurred at any time as a result of the existence of Regulated Chemicals upon, about, beneath or migrating, or threatening to migrate, onto or from the Facilities, or the existence of a violation of Environmental Requirements pertaining to the Facilities, regardless of whether or not such Environmental Damages were caused by or within the control of the Lessee. “Environmental Law” means the Comprehensive Environmental Response, Compensation and Liability Act of 1976, 42 U.S.C. §§ 6901 et seq., Comprehensive Environmental Response, Compensation and Liability Act of 1980, as amended by SARA, 42 U.S.C. §§ 1820 et seq., the Hazardous Materials Transportation Act, 49 U.S.C. §§ 1810 et seq., the Toxic Substances Control Act, 15 U.S.C. §§ 2601 et seq., the Resource Conservation and Recovery Act, as amended, 42 U.S.C. 9601 et seq.; the Clean Water Act, 33 U.S.C. §§ 1251 et seq. and the Clean Air Act, 42 U.S.C. §§ 7412 et seq., and any other applicable federal or State laws pertaining to the protection of the environment, as any such laws may be amended, modified or supplemented and any regulations promulgated pursuant to any of the foregoing. “Environmental Report” means any Environmental Assessment, Tests (each as defined in Section 6.08 herein), or other environmental report or audit conducted at the Facilities for any reason. “Environmental Requirements” means all applicable federal, State, regional or local laws, statutes, rules, regulations or ordinances, concerning public health, safety or the environment, including, but not limited to, the Comprehensive Environmental Response, Compensation, and Liability Act of 1980, as amended by the Superfund Amendments and Reauthorization Act of 1986, 42 U.S.C. §9601, et seq., the Solid Waste Disposal Act, as amended by the Resource Conservation and Recovery Act of 1976, as amended by the Solid and Hazardous Waste Amendments of 1984, 42 U.S.C. §6901, et seq., the Federal Water Pollution Control Act, as amended by the Clean Water Act of 1977, 33 U.S.C. § 1251, et seq., the Toxic Substances Control Act of 1976, 15 U.S.C. §2601, et seq., the Emergency Planning and Community Right- To-Know Act of 1986, 42 U.S.C. §11001, et seq., the Clean Air Act of 1966, as amended, 42 U.S.C. §7401, et seq., the National Environmental Policy Act of 1975, 42 U.S.C. §4321, the Rivers and Harbors Act of 1899, 33 U.S.C. §401 et seq., the Endangered Species Act of 1973, as amended 16 U.S.C. §1531, et seq., the Occupational Safety and Health Act of 1970, as amended, 29 U.S.C. §651, et. seq., the Safe Drinking Water Act of 1974, as amended 42 U.S.C. §300(f), et seq., and all rules, regulations, policies and guidance documents promulgated or published thereunder, and any State, regional, county or local statute, law, rule, regulation or ordinance 6 relating to public health, safety or the environment, including, without limitation those relating to: (a) releases, discharges, emissions or disposals to air, water, land or groundwater; (b) the withdrawal or use of groundwater; (c) the use, handling, or disposal of polychlorinated biphenyls (“PCBs”), asbestos or urea formaldehyde; (d) the transportation, treatment, storage, disposal, release or management of hazardous substances or materials (including, without limitation, petroleum, its derivatives, by-products or other hydrocarbons), and any other solid, liquid, or gaseous substance, exposure to which is prohibited, limited or regulated, or may or could pose a hazard to the health and safety of the occupants of the Facilities or any property adjacent to or surrounding the Facilities; (e) the exposure of persons to toxic, hazardous; or other controlled, prohibited or regulated substances; and (f) any Regulated Chemical. “Event of Default” means those defaults specified in Section 10.01 hereof. “Facilities” means the Series 2020 Facilities and any other facilities hereafter owned by the Borrower at any time and leased to the Lessee under the Lease for the operation of the School, and pledged to the Trustee to secure the Bonds. “Financial Products Agreement” means an interest rate swap, cap, collar, floor, forward or other hedging agreement, arrangement or security, however denominated, identified to the Trustee and the Lessor in a certificate signed by an Authorized Representative of the Lessee as having been entered into by the Lessee with a Qualified Provider not for investment purposes but with respect to Indebtedness (which Indebtedness shall be specifically identified in the certificate) for the purpose of (1) reducing or otherwise managing the Lessee’s risk of interest rate changes or (2) effectively converting the Lessee’s interest rate exposure from a fixed rate exposure to a variable rate exposure, or from a variable rate exposure to a fixed rate exposure. “Indebtedness” means all indebtedness of the Borrower or the Lessee (as consolidated for financial reporting purposes) for borrowed moneys related to or payable from, in whole or in part, revenues of the School, including, but not limited to, indebtedness which has been incurred or assumed in connection with the acquisition, construction, improvement, renovation or equipping of the Facilities, all indebtedness, no matter how created, secured by the Facilities, whether or not such indebtedness is assumed by the Borrower or the Lessee, any leases with a term longer than one year or required to be capitalized in accordance with Generally Accepted Accounting Principles, installment purchase obligations and guaranties. “Insurance Consultant” means an independent insurance consultant and/or risk management firm or an insurance broker or an insurance agent (which may be a consultant, firm, broker or agent with whom the Lessee regularly transacts business) selected by the Lessee. 7 “Interest Rate Swap” means an agreement with a Swap Provider pursuant to which the interest rate on variable rate Indebtedness is synthetically fixed. “Lease Blocked Account Agreement” means the Lease Blocked Account Agreement, dated on or before the Bond Closing, by and between the Lessee and the Custodian. “Lease Payments” means the Base Lease Payments and the Additional Lease Payment due hereunder. “Lease Term” means the time during which the Lessee is the lessee of the Facilities under this Lease Agreement, as provided in and subject to Article III hereof; provided that certain provisions of this Lease Agreement survive the termination of the Lease Term, as provided in Article III hereof. “Leased Property” means the Series 2020 Facilities and any other facilities hereafter owned by the Lessor at any time and leased to the Lessee under this Lease Agreement, and pledged to the Trustee to secure the Bonds. “Lessee” means The High Desert “Partnership in Academic Excellence” Foundation, Incorporated, a California nonprofit public benefit corporation designated as an organization described in Section 501(c)(3) of the Code and authorized to operate charter schools by the State under the Charter School Act, or any successor thereto, and any surviving, resulting or transferee entity thereof, as provided in this Lease Agreement. “Lessee Actual Annual Debt Service” means the principal and interest payment requirements with respect to all Lessee Indebtedness for the Fiscal Year being tested. “Lessee Coverage Ratio” means the ratio obtained by dividing (i) Lessee Net Income Available for Lease Payments for the Fiscal Year being tested by (ii) the sum (without duplication) of Actual Annual Lease Payments and Lessee Actual Annual Debt Service (which Lessee Actual Annual Debt Service shall not include any payments with respect to the Series 2020 Bonds). “Lessee Documents” means this Lease Agreement, the Tax Regulatory Agreement, the Lease Blocked Account Agreement, the Continuing Disclosure Agreement, the Bond Purchase Agreement and each of the other agreements, certificates, contracts or instruments to be executed by the Lessee in connection with the Loan Agreement and the issuance of the Bonds. “Lessee Indebtedness” means all indebtedness of the Borrower or the Lessee (as consolidated for financial reporting purposes) for borrowed moneys, including, but not limited to, indebtedness which has been incurred or assumed in connection with the acquisition, construction, improvement, renovation or equipping of facilities, all indebtedness, no matter how created, whether or not such indebtedness is assumed by the Borrower or the Lessee, any leases with a term longer than one year or required to be capitalized in accordance with Generally Accepted Accounting Principles, installment purchase obligations and guaranties. “Lessee Net Income Available for Lease Payments” means, for any period of determination thereof, the aggregate Lessee Revenues for such period, plus the interest earnings 8 on moneys held in any debt service reserve fund related to any Lessee Indebtedness, minus the total Lessee Operating Expenses for such period but excluding (i) any profits or losses which would be regarded as extraordinary items under Generally Accepted Accounting Principles, (ii) gain or loss in the extinguishment of Lessee Indebtedness, (iii) proceeds of the Bonds and any other Lessee Indebtedness permitted by this Lease Agreement, (iv) proceeds of insurance policies, other than policies for business interruption insurance, maintained by or for the benefit of Lessee, (v) proceeds of any sale, transfer or other disposition of any of Lessee’s assets by the Lessor or the Lessee, (vi) proceeds of any condemnation or any other damage award received by or owing to Lessee, (vii) amounts expended for Base Lease Payments; and (viii) subordinated Support Office Service Fees. “Lessee Operating Expenses” means fees and expenses of the Lessee, including Base Lease Payments and Additional Lease Payments, maintenance and repair expenses, utility expenses, administrative and legal expenses, miscellaneous operating expenses, rental payments, interest expenses, advertising costs, payroll expenses (including taxes), the cost of material and supplies used for current operations of the Lessee, the cost of vehicles, equipment leases and service contracts, taxes upon the operations of the Lessee not otherwise mentioned herein, charges for the accumulation of appropriate reserves for current expenses not annually recurrent, but which are such as may reasonably be expected to be incurred in accordance with Generally Accepted Accounting Principles, and amounts payable under the Ground Lease that are the responsibility of the Lessor and not otherwise accounted for under this definition, all in such amounts as reasonably determined by the Lessee; provided, however, “Lessee Operating Expenses” shall not include (a) depreciation and amortization expenses, (b) other non-cash expenses, (c) those expenses which are actually paid from revenues of the Lessee which are not Lessee Revenues, (d) those expenses which are actually paid from any proceeds of Long-Term Indebtedness or Long-Term Indebtedness Unrelated to the School, (e) one-time expenses, and (f) expenditures for capitalized assets. “Lessee Revenues” means, regardless of source and to the extent permitted by law, all revenues, rentals, fees, third-party payments, receipts, donations, contributions or other income of the Lessee, including the rights to receive such revenues, all as calculated in accordance with Generally Accepted Accounting Principles, proceeds derived from insurance, condemnation proceeds, accounts, contract rights and other rights and assets, whether now or hereafter owned, held or possessed by the Lessee; and all gifts, grants, bequests and contributions (including income and profits therefrom) related to the Lessee to the extent permitted by the terms thereof. “Lessor” means 230 South Waterman Avenue LLC, a California limited liability company or any successor thereto, or any surviving, resulting or transferee entity thereof, as provided in this Lease Agreement. “Lessor Documents” means this Lease Agreement, the Continuing Disclosure Agreement, the Deed of Trust, the Loan Agreement, the Promissory Note, the Bond Purchase Agreement, and each of the other agreements, certificates, contracts or instruments to be executed by the Lessor in connection with this Lease Agreement and the issuance of the Bonds. “Lessor’s Unassigned Rights” means the rights of the Lessor to (a) inspect books and records of the Lessee, (b) give or receive notices, approvals, consents, requests and other 9 communications, (c) receive payment or reimbursement for expenses, (d) immunity from and limitation of liability, (e) indemnification from liability by the Lessee, and (f) security for the Lessee’s indemnification obligation. “Liabilities” means any causes of action (whether in contract, tort or otherwise), claims, costs, damages, demands, judgments, liabilities, losses, suits and expenses (including, without limitation, reasonable costs of investigation, and attorney’s fees and expenses) of every kind, character and nature whatsoever. “Loan” means the loan by the Authority to the Lessor of the proceeds from the sale of a Series of Bonds pursuant to the Loan Agreement. “Long-Term Indebtedness” means any Indebtedness incurred, assumed or guaranteed by the Lessee payable from or secured by Revenues or assets of the School, maturing on or after the expiration of the one year period after it is incurred. “Long-Term Indebtedness Unrelated to the School” means indebtedness (including leases with a term longer than one year or required to be capitalized in accordance with in accordance with Generally Accepted Accounting Principles) incurred, assumed or guaranteed by the Lessee not payable from or secured by Revenues, the Facilities or assets of the School, maturing on or after the expiration of the one year period after it is incurred “Management Consultant” means a Person, including an Accountant (as defined in the Lease Agreement), qualified to study the operations of facilities like the charter school facilities operated by the Lessee, and having a favorable reputation in the industry and, unless otherwise specified herein, retained by the Lessee. “Maximum Annual Debt Service” means, as of any date of calculation, the highest Principal and Interest Requirements on Long-Term Indebtedness (provided the final maturity payment for a Series of Bonds shall be reduced by amounts on deposit in the Debt Service Reserve Fund and available for such payment) for any current or any succeeding Fiscal Year, taking into account the provisions for determining the Principal and Interest Requirements on Long-Term Indebtedness set forth in Section 8.13 hereof. “Maximum Annual Lease Payments” means, as of any date of calculation, the highest amount of Base Lease Payments to be paid hereunder with respect to the current or any succeeding Fiscal Year; provided that for purposes of this calculation, the Base Lease Payments due in the final year of the Lease Term shall be reduced by amounts on deposit in the Debt Service Reserve Fund and available for such payment. “Net Income Available for Lease Payments” means, for any period of determination thereof, the aggregate Revenues for such period, plus the interest earnings on moneys held in the Debt Service Reserve Fund, minus the total Operating Expenses for such period but excluding (i) any profits or losses which would be regarded as extraordinary items under Generally Accepted Accounting Principles, (ii) gain or loss in the extinguishment of Indebtedness, (iii) proceeds of the Bonds and any other Indebtedness permitted by this Lease Agreement, (iv) proceeds of insurance policies, other than policies for business interruption insurance, maintained by or for the benefit of Lessee, (v) proceeds of any sale, transfer or other disposition of any of Lessee’s 10 assets by the Lessor or the Lessee, (vi) proceeds of any condemnation or any other damage award received by or owing to Lessee, (vii) amounts expended for Base Lease Payments; and (viii) subordinated Support Office Service Fees. “Net Proceeds” means, when used with respect to any insurance payment or condemnation award, the gross proceeds thereof payable to the Lessor or the Lessee, as applicable, or to which the Lessor or the Lessee, as applicable, has a right, less the expenses (including attorneys’ fees) incurred in the collection of such gross proceeds. “Non-Recourse Indebtedness” means Long-Term Indebtedness incurred for the purpose of financing Capital Improvements or tangible personal property secured by a lien on, or security interest in, the property being financed and evidenced by an instrument which expressly provides that such Long-Term Indebtedness is not on a parity with the Bonds under the Indenture and upon default in the payment of the principal thereof or interest thereon the obligee thereof may look only to the property securing the same and not to the credit of the Lessee nor to any other assets of the Lessee. “Operating Expenses” means fees and expenses of the School, including Base Lease Payments and Additional Lease Payments, maintenance and repair expenses, utility expenses, administrative and legal expenses, subordinated Support Office Service Fees, miscellaneous operating expenses, rental payments, interest expenses, advertising costs, payroll expenses (including taxes), the cost of material and supplies used for current operations of the School, the cost of vehicles, equipment leases and service contracts, taxes upon the operations of the School not otherwise mentioned herein, charges for the accumulation of appropriate reserves for current expenses not annually recurrent, but which are such as may reasonably be expected to be incurred in accordance with Generally Accepted Accounting Principles, all in such amounts as reasonably determined by the School; provided, however, “Operating Expenses” shall not include (a) depreciation and amortization expenses, (b) other non-cash expenses, (c) those expenses which are actually paid from revenues of the School which are not Revenues, (d) those expenses which are actually paid from any proceeds of Long-Term Indebtedness, (e) one-time expenses, and (f) expenditures for capitalized assets. “Person” includes an individual, association, corporation, partnership, limited liability company, joint venture or a government or an agency or a political subdivision thereof. “Principal and Interest Requirements on Long-Term Indebtedness” means, for any Fiscal Year, the amount required to pay the interest and principal for Long-Term Indebtedness in such Fiscal Year, excluding “funded interest” from the proceeds of Indebtedness. Principal and Interest Requirements on Indebtedness shall be calculated in accordance with Section 8.13(j) hereof. “Projected Rate” means, in connection with any calculation of Balloon Amount, either (a) the interest rate on an Interest Rate Swap related to Balloon Indebtedness for which such Balloon Amount is being determined or (b) the projected yield at par of an obligation, as set forth in the report of a Management Consultant that states in determining the Projected Rate such Management Consultant reviewed the yield evaluations at par of not less than three obligations selected by such Management Consultant, the interest on which is excludable from gross income 11 for federal income tax purposes (or, if it is not expected that it would be possible to issue such tax-exempt obligations to refinance the Indebtedness with respect to which debt service is being estimated or if it is not intended that the interest on the obligation for which the Projected Rate is being determined be excludable from gross income for federal income tax purposes, the obligations the interest on which is subject to federal income tax), which obligations such Management Consultant states in its opinion are reasonable comparators to be utilized in developing such Projected Rate. “Put Date” means (i) any date on which an owner of Put Indebtedness may elect to have such Put Indebtedness paid, purchased or redeemed by or on behalf of the underlying obligor prior to its stated maturity date; or (ii) any date on which Put Indebtedness is required to be paid, purchased or redeemed from the owner by or on behalf of the underlying obligor (other than at the option of the owner) prior to its stated maturity date, other than pursuant to any mandatory sinking fund or other similar fund or other than by reason of acceleration upon the occurrence of an event of default. “Put Indebtedness” means Indebtedness incurred, assumed or guaranteed by the Lessee payable from or secured by Revenues or assets of the School which is (a) payable or required to be purchased or redeemed by or on behalf of the underlying obligor, at the option of the owner thereof, prior to its stated maturity date; or (b) payable or required to be purchased or redeemed from the owner by or on behalf of the underlying obligor (other than at the option of the owner) prior to its stated maturity date, other than pursuant to any mandatory sinking fund or other similar fund or other than by reason of acceleration or required purchase upon the occurrence of an event of default. “Qualified Provider” means any financial institution or insurance company which is a party to a Financial Products Agreement if the unsecured long-term debt obligations of such financial institution or insurance company (or of the parent or a subsidiary of such financial institution or insurance company if such parent or subsidiary guarantees the performance of such financial institution or insurance company under such Financial Products Agreement), or obligations secured or supported by a letter of credit, contract, guarantee, agreement, insurance policy issued by such financial institution or insurance company (or such guarantor parent or subsidiary), are rated in one of the three highest rating categories (without regard to numerical or similar modifiers) of Rating Agency at the time of the execution and delivery of the Financial Products Agreement, provided that if such rating requirement is not satisfied, the Financial Products Agreement must be collateralized by obligations deposited with the Lessee or the Lessee’s agent, which would be legal investments for a public entity pursuant to California Government Code section 53600 et seq. and which maintains a market value of not less than one hundred percent of the principal amount relating to such Financial Products Agreement. “Refunding Indebtedness” means any Indebtedness issued for the purpose of refunding any outstanding Long-Term Indebtedness or Put Indebtedness and financing the funding of related reserve funds, costs of issuance and other costs related to such refunding. “Regulated Chemicals” means any substance, the presence of which requires investigation, permitting, control or remediation under any federal, State or local statute, regulation, ordinance or order, including without limitation: 12 (a) any substance defined as “hazardous waste” under the Resource Conservation and Recovery Act, as amended (42 U.S.C. §6901 et seq.); (b) any substance defined as a “hazardous substance” under the Comprehensive Environmental Response, Compensation and Liability Act, as amended (42 U.S.C. §9601 et seq.); (c) any substance defined as a “hazardous material” under the Hazardous Materials Transportation Act (49 U.S.C. § 1800 et seq.); (d) any substance defined under any California statute analogous to (a), (b) or (c), to the extent that said statute defines any term more expansively; (e) asbestos; (f) urea formaldehyde; (g) polychlorinated biphenyls; (h) petroleum, or any distillate or fraction thereof; (i) any hazardous or toxic substance designated pursuant to the laws of the State; and (j) any other chemical, material or substance, exposure to which is prohibited, limited or regulated by any governmental authority. “Revenues” means, regardless of source and to the extent permitted by law, all revenues, rentals, fees, third-party payments, receipts, donations, contributions or other income of the School, including the rights to receive such revenues, all as calculated in accordance with Generally Accepted Accounting Principles, including State Payments, proceeds derived from insurance, condemnation proceeds, accounts, contract rights and other rights and assets, whether now or hereafter owned, held or possessed by the Lessee related to the School; and all gifts, grants, bequests and contributions (including income and profits therefrom) related to the School to the extent permitted by the terms thereof. “School” means the Norton Science and Language Academy and any charter school operated by the Lessee pursuant to the Charter School Contract. “Series 2020 Facilities” means the land and educational facilities located at 230 South Waterman Avenue, San Bernardino, California 92408. “Short-Term Indebtedness” means Indebtedness incurred, assumed or guaranteed by the Lessee payable from or secured by Revenues or assets of the School having an original maturity less than or equal to one year and not renewable at the option of the Lessee for a term greater than one year beyond the date of original incurrence. 13 “Short-Term Indebtedness Unrelated to the School” means indebtedness incurred, assumed or guaranteed by the Lessee not payable from or secured by Revenues, the Facilities or assets of the School, having an original maturity less than or equal to one year and not renewable at the option of the Lessee for a term greater than one year beyond the date of original incurrence. “State Payments” means any and all payments made to or for the benefit of the Lessee allocable to the School pursuant to the Charter School Act and that are permitted to be used for the purposes set forth in this Lease Agreement. “Subordinated Indebtedness” means Indebtedness incurred, assumed or guaranteed by the Lessee payable from or secured by Revenues or assets of the School which, with respect to any issue thereof, is evidenced by instruments, or issued under an indenture or other document, containing provisions for the subordination of such Indebtedness to the Bonds or any other Indebtedness issued following the date thereof (to which appropriate reference shall be made in the instrument evidencing such Indebtedness). “Support Office Service Fees” means any fee or charge, including any funds transfer recognized as an expenditure for accounting purposes, charged by the Lessee for administrative or support services provided to the School, including pursuant to an Administrative Services Agreement, which fee shall be subordinate to the payment of Lease Payments due under this Lease. “Swap Provider” means is any financial institution or insurance company, which has an Investment Grade Rating on its unsecured long-term obligations, acting as the counterparty to the Lessee under any Interest Rate Swap. “Variable Rate Indebtedness” means any portion of Long-Term Indebtedness the interest rate on which varies periodically such that the interest rate on any future date cannot accurately be calculated. ARTICLE II REPRESENTATIONS Section 2.01. Representations by Lessor. The Lessor represents and covenants that: (a) The Lessor is duly organized and existing as a limited liability company under the laws of the State, it is in good standing and authorized to transact business in the State, it will maintain, extend and renew its existence under the laws of the State, and it will not do, suffer or permit any act or thing to be done whereby its right to transact its functions might or could be terminated or its activities restricted. (b) The Lessor’s sole member is the Lessee. The Borrower has not filed Form 8832 to treat the Borrower as a corporation and has not otherwise made an election to be treated as a corporation for federal income tax purposes. The Lessee has not filed Form 8832 to treat the Borrower as a corporation and has not otherwise made an election to treat the Borrower as a corporation for federal income tax purposes. The Borrower 14 continues to be treated as a single member disregarded entity for federal income tax purposes. (c) The Lessor is organized and operated for the purpose and with the specific power to own the Series 2020 Facilities, has been duly authorized to execute each of the Lessor Documents and consummate all of the transactions contemplated thereby, and by the Offering Document, and the execution, delivery and performance of the Lessor Documents will not conflict with or constitute a breach of or default by the Lessor under any other instrument or agreement to which it is a party or to which its property is bound and to carry out and consummate all the transactions contemplated hereunder, thereunder and by the Offering Document. (d) The Lessor Documents have been duly authorized, executed and delivered by the Lessor. (e) This Lease and the other Lessor Documents will constitute the legal, valid and binding agreements of the Lessor enforceable against the Lessor by the Trustee in accordance with their terms for the benefit of the Beneficial Owners of the Bonds, and any rights of the Authority and obligations of the Lessor not so assigned to the Trustee constitute the legal, valid, and binding agreements of the Lessor enforceable against the Lessor by the Authority in accordance with their terms; except in each case as enforcement may be limited by bankruptcy, insolvency or other laws affecting the enforcement of creditors’ rights generally, by the application of equitable principles regardless of whether enforcement is sought in a proceeding at law or in equity and by public policy. (f) The execution and delivery of the Lessor Documents, the consummation of the transactions herein and therein contemplated and the fulfillment of or compliance with the terms and conditions hereof and thereof, will not conflict with or constitute a violation or breach of or default (with due notice or the passage of time or both) under the Lessor's articles of organization or operating agreement, any applicable law or administrative rule or regulation, or any applicable court or administrative decree or order, or any indenture, mortgage, deed of trust, loan agreement, lease, contract or other agreement or instrument to which the Lessor is a party or by which it or its properties are otherwise subject or bound, or result in the creation or imposition of any lien, charge or encumbrance of any nature whatsoever upon any of the property or assets of the Lessor, which conflict, violation, breach, default, lien, charge or encumbrance might have consequences that would materially and adversely affect the consummation of the transactions contemplated by the Lessor Documents, or the financial condition, assets, properties or operations of the Lessor. (g) No consent or approval of any trustee or holder of any indebtedness of the Lessor or any guarantor of indebtedness of or other provider of credit or liquidity to the Lessor, and no consent, permission, authorization, order or license of, or filing or registration with, any governmental authority (except with respect to any state securities or “blue sky” laws) is necessary in connection with the execution and delivery of the Lessor Documents, or the consummation of any transaction herein or therein 15 contemplated, or the fulfillment of or compliance with the terms and conditions hereof or thereof, except as have been obtained or made and as are in full force and effect. (h) The Lessor has good and marketable title to the Facilities free and clear from all encumbrances other than Permitted Encumbrances (as defined in the Indenture). (i) The Lessor is not in default (and no event has occurred and is continuing which with the giving of notice or the passage of time or both could constitute a default) (1) under the Lessor Documents, or (2) with respect to any order or decree of any court or any order, regulation or demand of any federal, state, municipal or other governmental authority, which default could reasonably be expected to have consequences that would materially and adversely affect the consummation of the transactions contemplated by the Lessor Documents or the Indenture, or the financial condition, assets, properties or operations of the Lessor. (j) All material certificates, approvals, permits and authorizations of applicable local governmental agencies, and agencies of the State and the federal government have been or will be obtained with respect to the acquisition, construction and installation of the Facilities and the Facilities will be acquired, constructed and installed and the Facilities will be operated pursuant to and in accordance with such certificates, approvals, permits and authorizations. (k) The Lessor will not conduct any other business or incur any other indebtedness or liabilities of any kind, except for such as is related to the ownership of the Facilities and the leasing thereof to the Lessee as provided in this Lease Agreement. (l) There is no action, suit, proceeding, inquiry or investigation, before or by any court or federal, state, municipal or other governmental authority, pending, or to the knowledge of the Lessor, after reasonable investigation, threatened, against or affecting the Lessor or the assets, properties or operations of the Lessor which, if determined adversely to the Lessor or its interests, would have a material adverse effect upon the consummation of the transactions contemplated by or the validity of the Lessor Documents, or upon the financial condition, assets, properties or operations of the Lessor. (m) None of the representations of the Lessor contained in the Lessor Documents, the Offering Document or any oral or written statement, furnished by or on behalf of the Lessor to the Authority, the Lessee, Bond Counsel or the Underwriter in connection with the transactions contemplated hereby, contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements contained herein or therein not misleading. There are no facts that any Lessor has not disclosed to the Authority, the Lessee, Bond Counsel or the Underwriter in writing that materially and adversely affect or in the future may (so far as the Lessor can now reasonably foresee) materially and adversely affect the properties, business, prospects, profits, or condition (financial or otherwise) of the Lessor, or the ability of any Lessor to perform its obligations under the Lessor Documents or any documents or transactions contemplated hereby or thereby. 16 (n) Subsequent to the Bond Closing for the Series 2020 Bonds, the Lessor will not grant any Liens on the Series 2020 Facilities (other than the lien effected by the Deed of Trust and Permitted Encumbrances). Section 2.02. Representations by Lessee. The Lessee represents and covenants that: (a) It is duly organized and existing as a California nonprofit public benefit corporation qualified to do business in the State; it is an educational institution or organization established under the Charter School Act; it is in good standing under the laws of the State; it will maintain, extend and renew its corporate existence under the laws of the State; and it will not do, suffer or permit any act or thing to be done whereby its right to transact it functions might or could be terminated or its activities restricted. (b) It is an organization described in Section 501(c)(3) of the Code, does not constitute a private foundation under Section 509(a) of the Code, and the income of the Lessee is exempt from federal taxation under Section 501(a) of the Code. The Lessee has received a determination from the Internal Revenue Service to the foregoing effect, and none of the bases for such determination have changed since the date thereof. (c) It has been duly authorized to execute each of the Lessee Documents and consummate all of the transactions contemplated thereby, and by the Offering Document, and the execution, delivery and performance of the Lessee Documents will not conflict with or constitute a breach of or default by the Lessee under any other instrument or agreement to which it is a party or to which its property is bound and to carry out and consummate all the transactions contemplated hereunder, thereunder and by the Offering Document. (d) The Lessee Documents have been duly authorized, executed and delivered by the Lessee. (e) This Lease and the other Lessee Documents will constitute the legal, valid and binding agreements of the Lessee enforceable against the Lessee by the Trustee in accordance with their terms for the benefit of the Holders of the Bonds, and any rights of the Authority and obligations of the Lessee not so assigned to the Trustee constitute the legal, valid, and binding agreements of the Lessee enforceable against the Lessee in accordance with their terms; except in each case as enforcement may be limited by bankruptcy, insolvency or other laws affecting the enforcement of creditors’ rights generally, by the application of equitable principles regardless of whether enforcement is sought in a proceeding at law or in equity and by public policy. (f) The execution and delivery of the Lessee Documents, the consummation of the transactions herein and therein contemplated and the fulfillment of or compliance with the terms and conditions hereof and thereof, will not conflict with or constitute a violation or breach of or default (with due notice or the passage of time or both) under the Lessee’s articles of organization or operating agreement, any applicable law or administrative rule or regulation, or any applicable court or administrative decree or order, or any indenture, mortgage, deed of trust, loan agreement, lease, contract or other 17 agreement or instrument to which the Lessee is a party or by which it or its properties are otherwise subject or bound, or result in the creation or imposition of any lien, charge or encumbrance of any nature whatsoever upon any of the property or assets of the Lessee, which conflict, violation, breach, default, lien, charge or encumbrance might have consequences that would materially and adversely affect the consummation of the transactions contemplated by the Lessee Documents, or the financial condition, assets, properties or operations of the Lessee. (g) No consent or approval of any trustee or holder of any indebtedness of the Lessee or any guarantor of indebtedness of or other provider of credit or liquidity to the Lessee, and no consent, permission, authorization, order or license of, or filing or registration with, any governmental authority (except with respect to any state securities or “blue sky” laws) is necessary in connection with the execution and delivery of the Lessee Documents, or the consummation of any transaction herein or therein contemplated, or the fulfillment of or compliance with the terms and conditions hereof or thereof, except as have been obtained or made and as are in full force and effect. (h) All financial statements and information heretofore delivered to the Authority by Lessee, including without limitation, information relating to the financial condition of Lessee, the Series 2020 Project, the partners, joint venturers or members of Lessee, and/or any guarantor, fairly and accurately present the financial position thereof and all financial statements have been prepared (except where specifically noted therein) in accordance with Generally Accepted Accounting Principles consistently applied. Since the date of such statements, there has been no material adverse change in the financial condition or results of operations of the Lessee or the other subjects of such statements. (i) The Lessee is not in default (and no event has occurred and is continuing which with the giving of notice or the passage of time or both could constitute a default) (1) under the Lessee Documents, or (2) with respect to any order or decree of any court or any order, regulation or demand of any federal, state, municipal or other governmental authority, which default could reasonably be expected to have consequences that would materially and adversely affect the consummation of the transactions contemplated by the Lessee Documents or the Indenture, or the financial condition, assets, properties or operations of the Lessee. (j) All material certificates, approvals, permits and authorizations of applicable local governmental agencies, and agencies of the State and the federal government have been or will be obtained with respect to the acquisition, construction and installation of the Facilities and the Facilities will be acquired, constructed and installed and the Facilities will be operated pursuant to and in accordance with such certificates, approvals, permits and authorizations. (k) There is no action, suit, proceeding, inquiry or investigation, before or by any court or federal, state, municipal or other governmental authority, pending, or to the knowledge of the Lessee, after reasonable investigation, threatened, against or affecting the Lessee or the assets, properties or operations of the Lessee which, if determined adversely to the Lessee or its interests, would have a material adverse effect upon the 18 consummation of the transactions contemplated by or the validity of the Lessee Documents, or upon the financial condition, assets, properties or operations of the Lessee. (l) None of the representations of the Lessee contained in the Lessee Documents, the Offering Document or any oral or written statement, furnished by or on behalf of the Lessee to the Authority, the Lessor, Bond Counsel or the Underwriter in connection with the transactions contemplated hereby, contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements contained herein or therein not misleading. There are no facts that any Lessee has not disclosed to the Authority, the Lessor, Bond Counsel or the Underwriter in writing that materially and adversely affect or in the future may (so far as the Lessee can now reasonably foresee) materially and adversely affect the properties, business, prospects, profits, or condition (financial or otherwise) of the Lessee, or the ability of any Lessee to perform its obligations under the Lessee Documents or any documents or transactions contemplated hereby or thereby. (m) The Lessee (i) understands the structure of the transactions related to the financing of the Facilities; (ii) is familiar with all the provisions of the documents and instruments related to such financing and refinancing to which the Lessee is a party or of which the Lessee is a beneficiary; (iii) understands the risk inherent in such transactions, including, without limitation, the risk of loss of the Facilities; (iv) has not relied on the Authority or the Underwriter for any guidance or expertise in analyzing the financial consequences of such financing transactions or otherwise relied on the Authority in any manner, except to issue the Series 2020 Bonds in order to provide funds for the Loan; and (v) acknowledges that the Authority makes no warranty, either express or implied, as to the Facilities or that it will be suitable for the Lessee’s or the Lessor’s purposes or needs. (n) Subsequent to the Bond Closing for the Series 2020 Bonds, the Lessee will not grant any Liens on the Facilities (other than the lien effected by the Deed of Trust and Permitted Encumbrances). (o) The Lessee hereby acknowledges receipt of the Indenture, agrees to be bound by its terms, and accepts all obligations and duties imposed thereby. (p) The federal employer identification number of the Lessee is 33-0542733. (q) To the best of the Lessee’s knowledge, none of the Authority Indemnified Parties has any significant or conflicting interest, financial, employment or otherwise, in the Lessee, the Facilities or in any of the transactions contemplated under the Lessee Documents. (r) There has been no material adverse change in the financial condition, prospects or business affairs of the Lessee subsequent to the date on which the Authority adopted its resolution approving the issuance of the Series 2020 Bonds. (s) The Lessee will comply with the Charter School Contract in all material respects and will take all reasonable action to maintain, extend and renew the Charter School Contract as long as any amounts under this Lease Agreement are due and payable. 19 (t) Each of the Lessee’s charter schools is operated exclusively for charitable and educational purposes as a charter school under Part 26.8 of Division 4 of Title II of the California Education Code. Section 2.03. Lessee’s Tax Covenants. (a) The Lessee represents and covenants that it will not take any action or omit to take any action, which, if taken or omitted, respectively, would adversely affect the excludability of interest on the Tax-Exempt Bonds from the gross income of the owners thereof for federal income tax purposes or cause the interest on the Tax- Exempt Bonds, or any portion thereof, to become an item of tax preference for purposes of the alternative minimum tax imposed under the Code, and in the event of such action or omission, it will, promptly upon having such brought to the Lessee’s attention, take such reasonable actions based upon an Opinion of Bond Counsel, and in all cases at the sole expense of the Lessee, as may rescind or otherwise negate such action or omission. The Lessee will not, directly or indirectly, use or permit the use of any Bond Proceeds of a Series of Tax-Exempt Bonds or any other funds of the Lessee, or take or omit to take any action, that would cause the Tax-Exempt Bonds to be or become “arbitrage bonds” within the meaning of Section 148(a) of the Code (or its statutory predecessor) or to fail to meet any other applicable requirement of Sections 141, 148, 149 and 150 of the Code (or their statutory predecessor) or cause the interest on the Tax- Exempt Bonds, or any portion thereof, to become an item of tax preference for purposes of the alternative minimum tax imposed under the Code or would cause interest on the Tax-Exempt Bonds to lose their exclusion from California taxable income under present California law. To that end, the Lessee will comply with all requirements of Sections 141, 148, 149 and 150 of the Code (or their statutory predecessor) to the extent applicable to the Tax-Exempt Bonds. In the event that at any time the Lessee is of the opinion that it is necessary to restrict or limit the yield on the investment of any moneys held by the Trustee or otherwise, the Lessee shall so instruct the Trustee in writing. (b) The Lessee hereby covenants and agrees that it shall not enter into any arrangement, formal or informal, pursuant to which the Lessee (or any “related party,” as defined in Treasury Regulations §1.150-1(b)) shall purchase the Tax-Exempt Bonds. This covenant shall not prevent the Lessee from purchasing Bonds in the open market for the purpose of tendering them to the Trustee for purchase and retirement. (c) The Lessee covenants to comply with the covenants and procedures set forth in the Indenture and the Tax Regulatory Agreement and to deposit in the Rebate Fund such amounts as may be necessary to maintain the deposit in the Rebate Fund at an amount at least equal to the amount required to be deposited therein. (d) All covenants and obligations of the Lessee contained in this Section 2.03 shall remain in effect and be binding upon the Lessee until all of the Tax-Exempt Bonds have been paid, notwithstanding any earlier termination of this Lease Agreement or any provision for prepayment of the Lease Payments and release and discharge of the Indenture. (e) Notwithstanding any provision of this Section 2.03, if the Lessee provides, at the Lessee’s expense, to the Lessor, the Trustee and the Authority an opinion of Bond Counsel to the effect that any action required under this Section 2.03 of the Indenture or 20 under the Tax Regulatory Agreement is no longer required, or to the effect that some further action is required, to maintain the exclusions from gross income of interest on the Tax-Exempt Bonds pursuant to Section 103(a) of the Code, the Lessor, the Lessee, the Authority and the Trustee may rely conclusively on such opinion in complying with the provisions of this Section 2.03 and the Tax Regulatory Agreement, and the covenants hereunder shall be deemed modified to that extent. (f) The Lessee agrees that it will not take any action or omit to take any action or cause or permit any circumstance to arise or continue if such action or circumstance or omission would cause any revocation or adverse modification of such federal income tax status, unless it obtains, at the Lessee’s expense, an opinion of Bond Counsel, addressed to the Authority and the Trustee that such revocation or modification will not adversely affect the exclusion from gross income under Section 103(a) of the Code of interest paid on the Tax-Exempt Bonds or cause the interest on the Tax-Exempt Bonds, or any portion thereof, to become an item of tax preference for purposes of the alternative minimum tax imposed under the Code. Section 2.04. Lessee’s Covenant to Comply With Charter School Act. The Lessee covenants to comply fully and in all respects with the provisions of the Charter School Act so long as any Bonds remain Outstanding. ARTICLE III TERM OF AGREEMENT Lessor hereby leases to Lessee, and Lessee leases from Lessor, the Facilities pursuant to the terms of this Lease Agreement, and this Lease Agreement shall remain in full force and effect from and after the date of delivery hereof until such time as all of the Lease Payments shall have been fully paid and all reasonable and necessary fees and expenses of the Trustee accrued and to accrue through final payment of the Lease Payments, all fees and expenses of the Authority accrued and to accrue through final payment of the Lease Payments and all othe r liabilities of the Lessee accrued and to accrue through final payment of the Lease Payments under this Lease Agreement have been paid; provided, however, that notwithstanding any other provision herein (a) the indemnification provisions of Sections 6.06 and 8.06 hereof and agreements contained in Section 10.04 hereof shall survive after the termination of the Lease Term; (b) all agreements, representations and certifications by the Lessee as to the exclusion from gross income of interest on the Tax-Exempt Bonds shall survive termination of the Lease Term until the expiration of statutes of limitation applicable to the liability of the Beneficial Owners of the Tax-Exempt Bonds for federal and state income taxes with respect to interest on the Tax-Exempt Bonds; and (c) upon the defeasance of the Bonds under the Indenture, all the indemnification provisions of Sections 6.06 and 8.06 hereof shall be enforceable by the Indemnified Parties, and all such agreements, representations and certifications regarding the exclusion from gross income of the interest on the Tax-Exempt Bonds shall be enforceable by the Beneficial Owners of the Tax-Exempt Bonds, directly against the Lessee. 21 ARTICLE IV GROUND LEASE The Lessor is the lessee of the Series 2020 Facilities under that certain Ground Lease Agreement, dates as of [____], 2020 (the “Ground Lease”), by and between Lessor and the County of San Bernardino and the City of San Bernardino (together, the “Ground Lessor”). Lessee will and hereby agrees to be subject to and bound by and to comply with the Ground Lease and to satisfy all applicable terms and conditions of the Ground Lease for the benefit of both the Ground Lessor and the Lessor, and that upon the breach of any of such terms, conditions or covenants of the Ground Lease by Lessee or upon failure by the Lessee to pay any applicable rents or other amounts thereunder or to comply with any of the provisions of the Lease, Lessor may exercise any and all rights and remedies granted to Ground Lessor by the Ground Lease, as well as any and all rights and remedies granted to Lessor by this Lease. It is further understood and agreed that the Lessor has no duty or obligation to Lessee under the Ground Lease other than to maintain the Ground Lease in full force and effect during the term of this Lease; provided, however, that Lessor will not be liable to Lessee for any earlier termination of the Ground Lease which is not due to the fault of the Lessor. Whenever the provisions of the Ground Lease which have been incorporated as provisions of this lease require the written consent of the Ground Lessor, such provisions will be construed to require the written consent of the Ground Lessor and the Lessor. Lessee hereby acknowledges that it has read and is familiar with the terms of the Ground Lease and that any termination thereof will likewise terminate the Lease. In the event of any inconsistencies between any provisions of the Lease and the Ground Lease, the terms of the Ground Lease shall govern. ARTICLE V PAYMENT PROVISIONS Section 5.01. Lease Payments; Limited Obligation. The Lessee and the Lessor acknowledge and agree that the Base Lease Payments and Additional Lease Payments required hereunder during the Lease Term shall be payable from the Revenues and any other legally available funds of the School. Notwithstanding any other provision in this Lease Agreement to the contrary, no indebtedness of any kind incurred or created hereunder shall constitute an indebtedness of the State or its political subdivisions, and no indebtedness of the Lessee hereunder shall involve or be secured by the faith, credit or taxing power of the State or its political subdivisions. Section 5.02. Base Lease Payments, Additional Lease Payments and Other Amounts Payable. (a) The Lessee shall pay directly to the Trustee, or the Custodian on behalf of the Trustee, all Base Lease Payments at least one Business Day prior to the Base Lease Payment Dates and in the amounts set forth in Exhibit A attached hereto and made a part hereof, as it may be amended from time to time hereunder. (b) [Reserved] 22 (c) The Lessee shall pay all Additional Lease Payments directly to the party to whom owed at the times and as otherwise provided herein or in the Loan Agreement, Indenture or Lease Blocked Account Agreement; provided, however, that Additional Lease Payments for Annual Administration Fees shall be paid to the Trustee, or the Custodian on behalf of the Trustee, at least one Business Day prior to the Base Lease Payment Date and in the amounts set forth in Exhibit A attached hereto, for deposit into the Expense Fund established under the Indenture. (d) On or before any redemption date pursuant to Section 5.01 of the Indenture (other than sinking fund redemption), the Lessee shall pay an amount of money that, together with the Lease Payments made by the Lessee and then on deposit in the Bond Fund and any amounts transferred from the Debt Service Reserve Fund to the Bond Fund, is sufficient to pay the principal of, premium, if any, and interest to the redemption date on the Bonds called for redemption. (e) As further described in Sections 6.02 and 6.03 hereof, the Lessee shall pay or provide for the payment of all taxes and assessments, general or special, concerning or in any way related to the Facilities or any part thereof, and any other governmental charges or impositions whatsoever related to the Facilities, and premiums for insurance policies maintained on the Facilities as required by this Lease Agreement. (f) In the event the Lessee should fail to make or fail to cause to be made any of the payments required by this Section 5.02, the item or installment in default shall continue as an obligation of the Lessee until the amount in default shall have been fully paid, and the Lessee agrees to pay the same and, with respect to the payments required by subsections (a), (b), (c) and (d) of this Section 5.02, to pay interest thereon at the highest rate of interest borne by any of the Bonds, or the maximum rate permitted by law if less than such rate. Section 5.03. Manner of Payment. The Base Lease Payments shall be paid by the Lessee by certified funds or other method of payment acceptable to the Trustee in lawful money of the United States of America to the Trustee at its designated corporate trust office. The obligation of the Lessee to pay the Base Lease Payments and Additional Lease Payments during the Lease Term shall be absolute and unconditional, payable from Revenues and other legally available funds of the School and payment of the Base Lease Payments and Additional Lease Payments shall not be abated through accident or unforeseen circumstances, or for any other reason, including without limitation, any acts or circumstances that may constitute failure of consideration, destruction of or damage to the Facilities, commercial frustration of purpose, or failure of the Lessor to perform and observe any agreement, whether express or implied, or any duty, liability or obligation arising out of or connected with this Lease Agreement, it being the intention of the parties that the payments required by this Lease Agreement will be paid in full when due without any delay or diminution whatsoever, subject only to the Lessee’s rights under Section 6.02 hereof. Notwithstanding any dispute between the Lessee and Lessor, the Lessee shall, during the Lease Term, make all payments of Base Lease Payments and Additional Lease Payments when due and shall not withhold any Base Lease Payments or Additional Lease Payments pending final resolution of such dispute (except to the extent permitted by Section 6.02 hereof with respect to certain Additional Lease Payments), nor shall the Lessee assert any right 23 of set-off, recoupment or counterclaim against its obligation to make such payments required hereunder. No action or inaction on the part of the Lessor shall affect the Lessee’s obligation to pay all Base Lease Payments and Additional Lease Payments (except to the extent provided by Section 6.02 hereof with respect to certain Additional Lease Payments), during the Lease Term. Section 5.04. Pledge by Lessee. In fulfillment of its obligations hereunder and in order to secure the payment of the Lease Payments, the Lessee hereby pledges to Lessor, and grants Lessor a security interest in and to, the following: (a) All of the Lessee’s right, title and interest in and to the Facilities, including all related additions, replacements, substitutions and proceeds; (b) To the extent permitted by law, all Revenues; (c) All furniture, furnishings, equipment, supplies and other tangible personal property, used in connection with the Facilities, wherever located, whether in the possession of the Lessee, warehousemen, bailee or any other person; and (d) Any and all other interests in real or personal property of every name and nature from time to time hereafter by delivery or by writing of any kind specifically mortgaged, pledged or hypothecated, as and for additional security by the Lessee or by anyone on its behalf. ARTICLE VI MAINTENANCE, TAXES AND INSURANCE Section 6.01. Maintenance and Modifications of Facilities By Lessee. (a) The Lessee agrees that during the Lease Term the Facilities shall be operated and maintained, in compliance with all governmental laws, building codes, ordinances and regulations and zoning laws applicable to the Facilities, unless the same are being contested in good faith by appropriate proceedings. The Lessee agrees that during the Lease Term it will at its own expense (i) keep the Facilities in as safe a condition as required by law, and (ii) except to the extent the Lessee has determined that any portion of the Facilities is obsolete or not useful in its operations, keep the Facilities in good repair and in good operating condition, making from time to time all necessary repairs thereto (including external and structural repairs) and renewals and replacements thereof, all of which shall be accomplished in a workmanlike manner in accordance with all applicable laws. The Lessee may, at its own expense, make from time to time any additions, modifications or improvements to the Facilities it may deem desirable for its purposes that do not substantially reduce its value; provided that all such additions, modifications and improvements made by the Lessee which are affixed to the Facilities shall become a part of the Facilities. The Lessee will not permit the removal of any personal property from the Facilities unless such personal property is obsolete, sold for fair market value or will be replaced with personal property of an equal or greater value. 24 (b) The Lessee will not permit any Liens, security interests or other encumbrances, other than Permitted Encumbrances, to be established or to remain against the Facilities for any additions, modifications, improvements, repairs, renewals or replacements made by the Lessee to the Facilities. However, if no Event of Default has occurred and is continuing, and after notifying the Trustee in writing of its intention to do so, the Lessee may permit the Liens to remain undischarged and unsatisfied while the Lessee is diligently prosecuting, in good faith and at its own expense, a contest of any mechanics’ or other Liens filed or established against the Facilities, including any appeal therefrom. The Lessee’s right to contest a Lien shall not apply, however, if the Facilities or any part thereof will be subject to loss or forfeiture, in which event the Lessee shall promptly pay and cause to be satisfied and discharged all such unpaid items. Section 6.02. Taxes, Other Governmental Charges and Utility Charges. The Lessee will pay, as the same become due, (a) all taxes and governmental charges of any kind whatsoever or payments in lieu of taxes that may at any time be lawfully assessed or levied against or with respect to the Facilities or any interest therein, or any machinery, equipment or other property installed or brought by the Lessee therein or thereon which, if not paid, will become a Lien on the Facilities prior to or on a parity with the lien thereon under this Lease Agreement or the Deed of Trust, (b) all utility and other charges incurred in the operation, maintenance, use, occupancy and upkeep of the Facilities and (c) all assessments and charges lawfully made by any governmental body for public improvements that may be secured by a Lien on the Facilities; provided that with respect to special assessments or other governmental charges that may lawfully be paid in installments over a period of years, the Lessee shall be obligated to pay only such installments as may have become due during the term of this Lease Agreement. The Lessee may, at its own expense, but only if no Event of Default (excluding the issue being contested hereunder) has occurred and is continuing, diligently prosecute and in good faith contest any such taxes, assessments and other charges and, in the event of any such contest, after notifying the Trustee in writing of its intention to do so, may permit the taxes, assessments or other charges contested to remain unpaid during the period of such contest and any appeal therefrom if, in the Opinion of Counsel, the Facilities shall not be subject to loss or forfeiture. Section 6.03. Insurance Required. (a) Throughout the term of this Lease Agreement, the Lessee shall keep or cause to be kept, the following insurance coverages relating to the Facilities, paying as the same become due and payable all premiums with respect thereto: (i) Insurance against loss or damage to the Facilities and all improvements thereon and therein (including, during any period of time when the Lessee is making alterations, repairs or improvements to the Facilities, improvements and betterments coverage), all subject to standard form exclusions, with uniform standard extended coverage endorsement limited only as may be provided in the standard form of extended coverage endorsement at the time in use in the State, in an amount equal to the full replacement value of the Facilities (excluding the Land); 25 (ii) Commercial comprehensive general liability and automobile liability insurance against claims arising in, on or about the Facilities, including in, on or about the sidewalks or premises adjacent to the Facilities, providing coverage limits not less than $1,000,000 per occurrence and $2,000,000 in aggregate; (iii) Business interruption or rent loss insurance equal to 12 months’ debt service on the Bonds and 12 months’ Operating Expenses for the School; and (iv) Such other forms of insurance as are customary in the industry or as the Lessee is required by law to provide with respect to the School, including, without limitation, any legally required worker’s compensation insurance and disability benefits insurance. (b) The Lessee shall, at its own expense, maintain and keep in force insurance of the types and in amounts customarily carried in lines of business similar to that of the Lessee, including but not limited to fire, extended coverage, public liability, flood (if Lessor’s property is located in a flood zone), property damage and workers’ compensation, and deliver to Lessor from time to time at Lessor’s request schedules setting forth all insurance then in effect. (c) All the insurance coverage required by this Section may be subject to deductible clauses in such amounts as are customary for facilities of similar size, type and character within the State. At least every three years, commencing not later than July 1, 2022, the Lessee shall employ (or cause to be employed), at its own expense, an Insurance Consultant to review the insurance coverage required by this Section and to render to the Lessor and the Trustee a report as to the adequacy of such coverage and as to its recommendations, if any, for adjustments thereto. The Trustee shall have no duty to review or analyze any such report and shall not be required to act upon the same. The insurance coverage required by this Section may be reduced or otherwise adjusted by the Lessee without the consent of the Trustee or the Lessor, provided that all coverages after such reduction or other adjustment are certified by the Insurance Consultant to be adequate and customary for facilities of like size, type and character, taking into account the availability of such insurance, the terms upon which such insurance is available, the cost of such available insurance and the effect of such terms and such cost upon the Lessee’s costs and charges for the use of the Facilities. (d) The insurance coverage required by the Lease shall be increased or otherwise adjusted by the Lessee if as a result of such review the Insurance Consultant finds that the existing coverage is inadequate, taking into account the availability of such insurance, the terms upon which such insurance is available, the cost of such available insurance, and the effect of such terms and such cost upon the Lessee’s costs and charges for its services. The insurance coverage required by this Section, and modification thereof permitted or required by this paragraph, shall at all times be adequate and customary for facilities of like size, type and character, and the Lessee shall request that the Insurance Consultant so certify in the report required by this Section. The Lessee 26 shall pay any fees charged by such Insurance Consultant and any expenses incurred by the Authority and the Trustee. (e) All policies maintained (or caused to be maintained) by the Lessee pursuant to this Section shall be taken out and maintained with (a) generally recognized, responsible insurance companies rated not less than “A-” by A.M. Best, authorized by the State, which may include “captive” insurance companies or governmental insurance pools, selected by the Lessee and shall name the Lessee as an insured or (b) a joint powers authority. The insurance policies required by subsection (a)(i) of this Section shall name the Trustee, the Authority and the Lessor as additional insureds as their respective interests may appear (provided that with respect to insurance maintained pursuant to subsection (a)(i) of this Section, the Trustee shall also be named as a mortgagee under the terms of a standard California mortgagee loss payable endorsement), and the Trustee shall also be named as an additional insured on the policies required by subsections (a)(ii) and (a)(iii) of this Section, and, provided further that all insurance proceeds for losses related to the Facilities, and except for worker’s compensation, fidelity insurance and liability insurance, shall be paid directly to the Trustee. Such policies or certificates of insurance shall provide that the Lessee will mail and that, to the extent practicable, the insurer will endeavor to mail thirty (30) days’ written notice to the Authority and the Trustee of any amendment or cancellation prior to expiration of such policy. (f) The Lessee shall deliver to the Trustee (a) upon the date of issuance of each Series of Bonds, a certificate or certificates of insurance evidencing the coverages which the Lessee is then required to maintain pursuant to this Section, together with evidence as to the payment of all premiums then due thereon, (b) at least thirty (30) days prior to the expiration of any such policies, evidence as to the renewal thereof, if then required by this Section, and the payment of all premiums then due with respect thereto, and (c) promptly upon request by the Authority or the Trustee, but in any case within ninety (90) days after the end of each Fiscal Year, a certificate of an Authorized Representative of the Lessee setting forth the particulars as to all insurance policies maintained by the Lessee pursuant to this Section and certifying that such insurance policies are in full force and effect, that such policies comply with the provisions of this Section and that all premiums then due thereon have been paid. The Trustee shall not be responsible for the sufficiency of coverage or the amounts of any such policies. Section 6.04. Application of Net Proceeds of Insurance. The Net Proceeds of the insurance carried pursuant to subsections (i) of Section 6.03(a) hereof shall be applied as provided in Section 7.02 hereof and Article VII of the Loan Agreement. The Net Proceeds of insurance carried pursuant to subsections (ii), (iii) and (iv) of Section 6.03(a) hereof shall be applied toward extinguishment or satisfaction of the liability with respect to which such insurance proceeds have been paid. Section 6.05. Advances by Trustee. In the event the Lessee shall fail to maintain the full insurance coverage required by this Lease Agreement or shall fail to keep the Facilities in the condition required hereby (except as otherwise herein permitted), and such failure creates an Event of Default hereunder, the Trustee may (but shall be under no obligation to) take out the 27 required policies of insurance and pay the premiums on the same, or make the required repairs, renewals and replacements; and all amounts advanced therefor by the Trustee shall become an additional obligation of the Lessee under this Lease Agreement, which amounts the Lessee agrees to pay on demand together with interest thereon at a rate equal to the highest interest rate borne by any of the Bonds or the maximum rate permitted by law if less than such rate. Section 6.06. Environmental Indemnity. (a) In addition to the indemnification set forth in Section 8.06 hereof, the Lessee and its successors, heirs and assigns, shall and do hereby indemnify and hold harmless the Registered Owners, the Beneficial Owners, the Trustee and the Authority and their successors, assigns, trustees, directors, officers, employees, agents, contractors, subcontractors, licensees and invitees (collectively referred to in this Section 6.06 as “Indemnified Parties”), for, from and against any and all Environmental Damages that the Indemnified Parties may incur as well as any and all loss, costs, damages, exemplary damages, natural resources damages, Liens and expenses, (including, but not limited to, attorneys’ and paralegals’ fees and any and all other costs incurred in the investigation, defense and settlement of claims) that Indemnified Parties may incur as a result of or in connection with the assertion against Indemnified Parties, or against all or a portion of the Facilities, of any claim, civil, criminal or administrative, which: (i) arises out of the actual, alleged or threatened discharge, dispersal, release, storage, treatment, generation, disposal or escape of any Regulated Chemical, including, but not limited to, any solid, liquid, gaseous or thermal irritant or contaminant, including, but not limited to, smoke, vapor, soot, fumes, acids, alkalis, chemicals, medical waste and waste (including materials to be recycled, reconditioned or reclaimed); or (ii) actually or allegedly arises out of the use of any Regulated Chemical, the existence or failure to detect the existence or proportion of any Regulated Chemical in the soil, air, surface water or groundwater, or the performance or failure to perform the abatement or removal of any Regulated Chemical or of any soil, water, surface water or groundwater containing any Regulated Chemical; or (iii) arises out of the actual or alleged existence of any Regulated Chemical on, in, under, or affecting all or a portion of the Facilities; or (iv) arises out of any misrepresentations of the Lessee concerning any matter involving Regulated Chemicals or Environmental Requirements; or (v) arises out of the Lessee’s failure to provide all information, make all submissions and filings, and take all steps required by appropriate government authority under any applicable Environmental Law, regulation, statute or program, whether federal, state or local, whether currently existing or hereinafter enacted. 28 (b) Without prejudice to the survival of any other agreements of the Lessee hereunder, this indemnification shall survive any termination, payment or satisfaction of the Bonds and the termination of this Lease Agreement, and any foreclosure or any other transfer of any kind of the Facilities and shall continue and survive ad infinitum. (c) The Lessee’s indemnification contained herein to each Indemnified Party is intended to be for his or her active or passive negligence or misconduct; provided, however, nothing contained herein shall be deemed to provide indemnification to any Indemnified Party with respect to any Liabilities arising from the successful allegation of fraud, gross negligence or willful misconduct of such party. (d) The Lessee’s indemnification contained herein shall be effective not only with any existing Environmental Requirements affecting the Lessee, Indemnified Parties and/or the Facilities, but also for any hereinafter enacted Environmental Law, regulation, statute or program, whether federal, State or local affecting the Lessee, Indemnified Parties and/or the Facilities. (e) The Lessee’s indemnification contained herein shall extend to any and all like claims which arise from the acts or omissions of any user, tenant, lessee, agent or invitee of the Lessee. (f) The obligations under this Section shall not be affected by any investigation by or on behalf of Indemnified Parties, or by any information which Indemnified Parties may have or obtain with respect thereto. (g) The Lessee’s indemnification shall include the duty to defend any and all claims of the types described in this Section, and Indemnified Parties may participate in the defense of any claim of the type described in this Section without relieving the Lessee of any obligation hereunder. This duty to defend shall apply and constitute an obligation of Lessee regardless of any challenge by Lessee to this provision, the indemnification contained herein, or any other provision of this Lease Agreement. This duty to defend shall apply regardless of the validity of Lessee’s indemnification, as may ultimately be determined by a court of competent jurisdiction. Section 6.07. Environmental Covenants. (a) Use of Facilities. The Lessee will not intentionally or unintentionally conduct, or allow to be conducted, any business, operation or activity on, under or in the Facilities, or employ or use the Facilities or allow for it to be employed or used, to manufacture, transport, treat, store or dispose any Regulated Chemical which would violate or potentially violate Environmental Requirements, including, but not limited to, any action which would: (i) bring the Lessee or the Facilities within the ambit of, or otherwise violate, the Resource Conservation and Recovery Act of 1976, as amended by the Solid and Hazardous Waste Amendments of 1984, 42 U.S.C. §6901, et seq.; 29 (ii) cause, or allow to be caused, a release or threat of release, of hazardous substances on, under, in or about the Facilities as defined by, and within the ambit of, the Comprehensive Environmental Response, Compensation, and Liability Act of 1980, as amended by the Superfund Amendments and Reauthorization Act of 1986, 42 U.S.C. §9601, et seq.; (iii) violate the Clean Air Act of 1970, as amended, 42 U.S.C. §7401, et seq., or other similar State, regional or local statute, law, regulation, rule or ordinance, including without limitation, the laws of the State, or any other statute providing for the financial responsibility for cleanup for the release or threatened release of substances provided for thereunder. The Lessee will not do or permit any act or thing, business or operation, that materially increases the dangers, or poses an unreasonable risk of harm, or impairs, or may impair, the value of the Facilities, or any part thereof. (b) Maintenance of Facilities. The Lessee shall maintain the Facilities free from contamination by Regulated Chemicals and shall not intentionally or unintentionally allow a release, discharge or emission, or threat of release, discharge or emission, of any Regulated Chemical on, under, in or about the Facilities, and shall not permit the migration or threatened migration from other properties upon, about or beneath the Facilities. (c) Notice of Environmental Problem. The Lessee (provided that the Lessee shall only forward to the Trustee those notices, letters, citations, orders, warnings, complaints, inquiries, claims or demands actually received by the Lessee) and/or any tenant and/or sublessee shall promptly provide a copy to Trustee, and in no event later than fifteen (15) days from the Lessee’s and/or any tenants’ and/or sublessee’s receipt or submission, of any notice, letter, citation, order, warning, complaint, inquiry, claim or demand that: (i) the Lessee and/or any tenants or sublessees have violated, or are about to violate, any federal, state, regional or local environmental, health or safety statute, law, rule, regulation, ordinance, judgment or order; (ii) there has been a release, or there is a threat of release, of any Regulated Chemical from the Facilities; (iii) the Lessee and/or any tenants or sublessees may be or are liable, in whole or in part, for the costs of cleaning up, remediating, removing or responding to a release of any Regulated Chemical; or (iv) any portion of the Facilities is subject to a Lien in favor of any governmental entity for any liability, costs or damages, under Environmental Requirements arising from, or costs incurred by such governmental entity in response to, a release of any Regulated Chemical. 30 (d) Response Action. The Lessee shall take all appropriate responsive action, including any removal and remedial action (“Response Action”), in the event of a release, emission, discharge or disposal of any Regulated Chemical in, on, under or about the Facilities, so as to remain in compliance with the above, and to keep the Facilities free from and unaffected by Regulated Chemicals. The Lessee shall (i) provide Trustee, within twenty (20) days after providing the notice required under Section 6.07(c) above, with a bond, letter of credit or similar financial assurance which is equal to the cost of the Response Action and which may be drawn upon by the Trustee for the purpose of completing the Response Action if an Event of Default occurs or if the Response Action is not completed within six months of the issuance of the financial assurance, and (ii) discharge any assessment, Lien or encumbrance which may be established on the Facilities as a result thereof. (e) No Liens or Encumbrances. The Lessee shall prevent the imposition of any Liens or encumbrances against the Facilities for the costs of any response, removal or remedial action or cleanup of any Regulated Chemicals. Should such a Lien or encumbrance be levied on the Facilities, the Lessee shall follow the procedure set forth in subsection (d) above. (f) Compliance with Environmental Requirements. The Lessee shall carry on its business and operations at the Facilities to comply in all respects and will continue to remain in compliance with all applicable Environmental Requirements and maintain all permits and licenses required thereunder. (g) Additional Environmental Reports. As long as there are any Bonds Outstanding, the Lessee shall provide the Trustee and post to EMMA a copy of any Environmental Report performed during that time. The Trustee shall have no duty to review or analyze any such environmental report and shall not be required to act upon the same unless the report creates an Event of Default hereunder and a notice of such Event of Default is delivered to the Trustee. Section 6.08. Additional Environmental Provisions. (a) Right to Notify Agencies. To the extent the Trustee receives written notice, whether from the Lessee or any other party, stating that the Lessee or the Lessor is in violation of any environmental law, statute, regulation, ordinance, rule or order, whether federal, State or local, or that there has been a release or threat of release of any Regulated Chemical from or upon the Facilities, and the Trustee, the Trustee shall promptly notify the Lessee and the Registered Owners of such notice. (b) Right of Inspection. (i) The Trustee at any time and from time to time, with reasonable cause and notice, either prior to or after the occurrence of any Event of Default hereunder, may require the Lessee to submit to the Trustee and post to EMMA within ninety (90) days of either the notice required under Section 6.07(c) hereof or a written request from the Trustee, a written 31 report of a site assessment and environmental audit (“Environmental Assessment”), in scope, form and substance, and prepared by an independent, competent and qualified engineer, showing that the engineer made all appropriate inquiry consistent with good commercial and customary practice, such that consistent with generally accepted engineering practice and procedure, no evidence or indication came to light which would suggest there was a release of substances on, under, in or about the Facilities which could necessitate an environmental response action, and which demonstrates that the Facilities comply with, and do not deviate from, all applicable environmental statutes, laws, ordinances, rules and regulations, including any licenses, permits or certificates required thereunder, and that the Lessee is in compliance with, and has not deviated from, the representations and warranties set forth in Sections 2.02 and 6.07 hereof. The Trustee shall have no duty to review or analyze any such environmental report and shall not be required to act upon the same unless the report creates an Event of Default hereunder and a notice of such Event of Default is delivered to the Trustee. (ii) The Lessee hereby grants, and will cause any tenants or users of the Facilities to grant, to the Trustee, its agents, attorneys, employees, consultants and contractors, upon reasonable notice and under reasonable conditions established by the Lessee which do not impede the performance of the Environmental Assessment, an irrevocable license and authorization to enter upon and inspect the Leased Property and perform such sampling, tests and analysis (“Tests”), including without limitation, subsurface testing, soils and groundwater testing, and other tests which may physically invade the Facilities, as the Trustee or its agent determines is necessary; provided, however, that the Trustee shall use its best efforts not to interfere with the operations of the Lessee's charter school or to materially damage the Facilities. (iii) The Lessee will cooperate with the consultants and supply to the consultants such historical and operational information as may be reasonably requested by the consultants, together with any notices, permits or other written communications pertaining to violations of Environmental Requirements and any and all necessary information and make available personnel having knowledge of such matters as may be required by the Trustee, the Trustee’s agents, consultants and engineers to complete an Environmental Assessment. (iv) Should the Lessee fail to perform an Environmental Assessment within the time period set forth in Section 6.08(b)(i) hereof, and such failure creates an Event of Default hereunder, the Trustee shall have the right but not the obligation to retain an environmental consultant to perform said Environmental Assessment. 32 (v) The cost of performing any Environmental Assessment shall be paid by the Lessee upon demand of the Trustee and any such obligations shall be deemed to be an Additional Lease Payment due hereunder. (c) Event of Default. If an Environmental Assessment reveals any violations of Environmental Requirements or the Lessee receives a notice of a violation of Environmental Requirements, and the Lessee fails to cure the violation in the time period and the manner specified in Section 10.01(b) hereof, such action will constitute an Event of Default. (d) No Assumption of Risk. The Trustee’s rights under this Section shall be exercised by it in its sole discretion and not for the benefit of the Lessee. The Trustee shall have no obligation (unless directed and indemnified as provided in the Indenture) to enter onto the Facilities or to take any other action which is authorized by this Article for the protection of its security interest. The Lessee specifically agrees and acknowledges that any action permitted under this Section shall not be construed to be the management or control of the Facilities by the Trustee. ARTICLE VII DAMAGE, DESTRUCTION AND CONDEMNATION Section 7.01. Damage, Destruction and Condemnation. If, during the Lease Term (a) the Facilities or any portion thereof shall be destroyed (in whole or in part), or damaged by fire or other casualty; or (b) title to, or the temporary or permanent use of, the Facilities or any portion thereof or the estate of the Lessee or the Lessor in the Facilities or any portion thereof shall be taken under the exercise of the power of eminent domain by any governmental body or by any person, firm or corporation acting under governmental authority; or (c) a breach of warranty or a material defect in the construction, manufacture or design of the Facilities shall become apparent; or (d) title to or the use of all or any portion of the Facilities shall be lost by reason of a defect in title thereto; then the Lessee shall be obligated to continue to pay the amounts specified in Section 5.02 of this Lease Agreement. Section 7.02. Treatment of Net Proceeds. The Lessee and, to the extent such Net Proceeds are within its control, the Lessor, shall cause the Net Proceeds of any insurance policies, payment of performance bonds or condemnation awards to be applied in accordance with the terms of Article VII of the Loan Agreement and Section 3.22 of the Indenture. Section 7.03. Continuation of Operations in Event of Casualty. In the event of any damage to or destruction of the Facilities or any part thereof by fire, lightning, vandalism, malicious mischief and extended coverage perils, the Lessee shall make all diligent and reasonable efforts to continue operation of the Facilities in such a manner that will ensure continuation of State Payments or shall obtain or use other financing resources to continue operation of the Facilities and ensure due and timely payment of the Lease Payments. 33 ARTICLE VIII SPECIAL COVENANTS Section 8.01. Annual Budget. The Lessee agrees to annually budget sufficient expenditures to provide for all Base Lease Payments, Additional Lease Payments and other amounts due under this Lease Agreement. Section 8.02. Consolidation, Merger, Sale or Conveyance. The Lessee agrees that during the term of this Lease Agreement it will maintain its corporate existence, will continue to be a nonprofit corporation under the laws of the State of California, will not merge or consolidate with, or sell or convey all or substantially all of its assets to, any Person unless (i) no Event of Default has occurred and is continuing, (ii) it first acquires the consent of the Authority to such transaction, (iii) it provides to the Trustee notice of its intent at least ninety (90) days in advance of such consolidation, merger, sale or conveyance, and (iv) the acquirer of the Lessee’s interest in the Facilities or the corporation with which it shall be consolidated or the resulting corporation in the case of a merger: (a) shall assume in writing the performance and observance of all covenants and conditions of this Lease Agreement; (b) shall provide the Authority and Trustee with an opinion of Bond Counsel to the effect that such merger, consolidation, sale or conveyance would not adversely affect the validity of any of the Bonds or the exclusion from gross income for federal income tax purposes of interest on the Tax-Exempt Bonds; (c) shall provide the Authority and the Trustee with an Opinion of Counsel to the Lessee (which may be rendered in reliance upon the Opinion of Counsel to such other corporation), stating that none of the other corporations which are a party to such consolidation, merger or transfer has any pending litigation other than that arising in the ordinary course of business or, has any pending litigation which might reasonably result in a substantial adverse judgment. For the purposes of the preceding sentence, the term “substantial adverse judgment” shall mean a judgment in an amount which exceeds the insurance or reserves therefor by a sum which is more than 2% of the aggregate net worth of the resulting, surviving or transferee corporation immediately after the consummation of such consolidation, merger or transfer and after giving effect thereto; (d) shall provide evidence to the Authority that the surviving or acquiring entity has a consolidated tangible net worth (after giving effect to such consolidation, merger, sale or conveyance) of not less than the consolidated tangible net worth of the Lessee immediately prior to such consolidation, merger, sale or conveyance; (e) shall provide evidence to the Authority that the Days Cash on Hand and the Coverage Ratio of the Lessee for its most recently completed Fiscal Year would not have been reduced if such consolidation, merger, sale or conveyance had occurred during such preceding Fiscal Year; 34 (f) shall deliver to the Trustee within thirty (30) days of the close of such transaction, an Opinion of Counsel that all conditions herein have been satisfied and that all liabilities and obligations of the Lessee under the Lessee Documents shall become obligations of the new entity; provided, however, the Lessee shall not be released from same; and (g) in the case of a consolidation or merger, shall provide to the Trustee and the Authority an Opinion of Counsel to the effect that the surviving entity can continue to operate the Facilities as a charter school in accordance with the Charter School Act and that the entity is entitled to receive the State Payments. Section 8.03. Further Assurances. The Lessor and the Lessee agree that they will, from time to time, execute, acknowledge and deliver, or cause to be executed, acknowledged and delivered, such supplements hereto and such further instruments as may reasonably be required for carrying out the intention of or facilitating the performance of this Lease Agreement, subject, however, to the terms and conditions of Article X of the Indenture. Section 8.04. Audits. The Lessee agrees that it will have the books and records of the Lessee and the School audited annually commencing with the Fiscal Year ended June 30, 2020, by an Accountant as soon as practicable after the close of such Fiscal Year. The Lessee shall furnish such audit report as described in Section 8.05 hereof. Section 8.05. Books and Records; Compliance with Continuing Disclosure Agreement. The Lessee agrees that it will maintain proper books of records and accounts with full, true and correct entries of all of its dealings substantially in accordance with the practices generally accepted for public school accounting. The Lessee shall comply with the terms of the Continuing Disclosure Agreement and shall provide the information required thereby on or before the dates and in the manner set forth therein. The Lessee shall provide the Authority with any of the documents provided under the Continuing Disclosure Agreement upon request by the Authority within thirty (30) days after receipt of the Authority’s request. The Trustee shall have no duty to review or analyze documents, including any reports, financial statements, insurance policies or certificates, or other material delivered to the Trustee under the terms of this Lease Agreement. The Trustee shall only be required to act on such information if it creates an Event of Default hereunder and a notice of such Event of Default is delivered to the Trustee. Section 8.06. Indemnification. (a) To the fullest extent permitted by law, the Lessee agrees to indemnify, hold harmless and defend the Authority, the Authority’s members, the Trustee and each of their respective past, present and future officers, governing members, directors, officials, employees, attorneys and agents (collectively, the “Indemnified Parties”), against any and all losses, damages, claims, actions, liabilities, costs and expenses of any conceivable nature, kind or character (including, without limitation, reasonable attorneys’ fees and expenses, litigation and court costs, amounts paid in settlement and amounts paid to discharge judgments) to which the Indemnified Parties, or any of them, may become subject or under any statutory law (including federal or state securities laws) or at common law or otherwise, arising out of or based upon or in any way relating to: 35 (i) the Bonds, the Indenture, the Lessee Documents or the execution or amendment hereof or thereof or in connection with transactions contemplated hereby or thereby, including the issuance, sale or resale of the Bonds; (ii) any act or omission of the Lessee or the Borrower or any of their agents, contractors, servants, employees or licensees in connection with the Series 2020 Project, this Lease, or the Facilities, the operation of the Series 2020 Project or the Facilities, or the condition, environmental or otherwise, occupancy, use, possession, conduct or management of work done in or about, or from the planning, design, acquisition, installation or construction of, the Series 2020 Project or the Facilities or any part thereof; (iii) any lien or charge upon payments by the Lessor or the Lessee to the Authority or the Trustee, as the case may be, hereunder, or any taxes (including, without limitation, all ad valorem taxes and sales taxes), assessments, impositions and other charges imposed on the Authority or the Trustee in respect of any portion of the Series 2020 Project or the Facilities; (iv) any violation of any Environmental Regulations with respect to, or the release of any Hazardous Substances at, on or under the Facilities or the Series 2020 Project or any part thereof; (v) any defeasance and/or redemption, in whole or in part, of the Bonds; (vi) any untrue statement or misleading statement or alleged untrue statement or alleged misleading statement of a material fact by the Lessee contained in the Offering Document, as may be supplemented from time to time or any other offering statement or disclosure or continuing disclosure document for the Bonds or any of the documents relating to the Bonds to which Lessee is a party, or any omission or alleged omission by the Lessee from the Offering Document, as may be supplemented from time to time or any other offering statement or disclosure or continuing disclosure document for the Bonds of any material fact necessary to be stated therein in order to make the statements made therein by the Lessee, in the light of the circumstances under which they were made, not misleading, or any failure to timely file any continuing disclosure document in connection with the Bonds required by any undertaking or by any applicable law, rule or regulation; (vii) any declaration that interest on the Tax-Exempt Bonds is included in gross income for federal income tax purposes, or allegations that interest on the Tax-Exempt Bonds is included in gross income for federal income tax purposes or any regulatory audit or inquiry regarding whether interest on the Tax-Exempt Bonds is included in gross income for federal income tax purposes; or 36 (viii) the Trustee’s acceptance or administration of the trust of the Indenture, or the exercise or performance of any of its powers or duties thereunder or under any of the documents relating to the Bonds to which it is a party; except (A) in the case of the foregoing indemnification of the Trustee or any of its officers, members, directors, officials, employees, attorneys and agents, to the extent such damages are caused by the negligence or willful misconduct of such Indemnified Party; or (B) in the case of the foregoing indemnification of the Authority or any of its officers, members, directors, officials, employees, attorneys and agents, to the extent such damages are caused by the willful misconduct including the intentional violation of law of such Indemnified Party. In the event that any action or proceeding is brought against any Indemnified Party with respect to which indemnity may be sought hereunder, the Lessee, upon written notice from the Indemnified Party, shall assume the investigation and defense thereof, including the employment of counsel selected by the Indemnified Party, and shall assume the payment of all expenses related thereto, with full power to litigate, compromise or settle the same in its sole discretion; provided that the Indemnified Party shall have the right to review and approve or disapprove any such compromise or settlement. Each Indemnified Party shall have the right to employ separate counsel in any such action or proceeding and participate in the investigation and defense thereof, and the Lessee shall pay the reasonable fees and expenses of such separate counsel; provided, however, that such Indemnified Party may only employ separate counsel at the expense of the Lessee if in the judgment of such Indemnified Party a conflict of interest exists by reason of common representation or if all parties commonly represented do not agree as to the action (or inaction) of counsel, or in the case of the Authority or any of its officers, members, directors, employees, attorneys and agents, such Indemnified Party engages the Attorney General of the State as separate counsel. (b) The rights of any persons to indemnity hereunder and rights to payment of fees and reimbursement of expenses pursuant to this Section and Sections 5.02 and 10.04 hereof shall survive the final payment or defeasance of the Bonds and in the case of the Trustee any resignation or removal. The provisions of this Section shall survive the termination of this Lease Agreement. Section 8.07. Authority of Authorized Representative of Lessee. Whenever under the provisions of this Lease Agreement or the Indenture the approval of the Lessee is required, or the Lessor, the Authority or the Trustee is required to take some action at the request of the Lessee, such approval or such request shall be made by the Authorized Representative of the Lessee unless otherwise specified in this Lease Agreement. The Lessor, the Authority or the Trustee shall be authorized to act on any such approval or request and the Lessee shall have no complaint against the Lessor, the Authority or the Trustee as a result of any such action taken in accordance with such approval or request. The execution of any document or certificate required under the provisions of this Lease Agreement, the Loan Agreement or the Indenture by an Authorized Representative of the Lessee shall be on behalf of the Lessee and shall not result in any personal liability of such Authorized Representative. 37 Section 8.08. Authority of Authorized Representative of Lessor. Whenever under the provisions of this Lease Agreement the approval of the Lessor is required, or the Lessee or the Trustee is required to take some action at the request of the Lessor, such approval or such request shall be made by the Authorized Representative of the Lessor unless otherwise specified in this Lease Agreement, the Loan Agreement or the Indenture. The Lessee or the Trustee shall be authorized to act on any such approval or request and the Lessor shall have no complaint against the Lessee or the Trustee as a result of any such action taken in accordance with such approval or request. The execution of any document or certificate required under the provisions of this Lease Agreement, the Loan Agreement or the Indenture by an Authorized Representative of the Lessor shall be on behalf of the Lessor and shall not result in any personal liability of such Authorized Representative. Section 8.09. Licenses and Qualifications. The Lessee will do, or cause to be done, all things necessary to obtain, renew and secure all permits, licenses and other governmental approvals and to comply, or cause its lessees to comply, with such permits, licenses and other governmental approvals necessary for operation of the Facilities as a charter school (as defined in the Charter School Act) (subject, however, to Section 8.11 hereof). Section 8.10. Right to Inspect. Following reasonable notice to the Lessee, at any and all reasonable times during business hours, the Trustee, the Authority, the Lessor and their duly authorized agents, attorneys, experts, engineers, accountants and representatives, shall have the right (but no duty) fully to inspect the Facilities, including all books and records of the Lessee (excluding records the confidentiality of which may be protected by law), and to make such copies and memoranda from and with regard thereto as may be desired; provided, however, that they shall maintain these books and records in confidence unless required by applicable law to do otherwise and it is necessary to distribute the information to some other third party under applicable law. Section 8.11. Assignment and Subleasing. This Lease Agreement may not be assigned by the Lessee for any reason other than to a successor by operation of law. However, the Facilities may be subleased to any other person or entity, as a whole or in part, by the Lessee, with the consent of the Lessor, and subject to each of the following conditions: (a) this Lease Agreement and the obligations of the Lessee hereunder, shall, at all times during the Lease Term remain obligations of the Lessee subject to Sections 5.01 and 5.02 of this Lease Agreement, and the Lessee shall maintain its obligations to the Lessor, notwithstanding any sublease; (b) the Lessee shall furnish or cause to be furnished to the Lessor a copy of any Lease Agreement; (c) no sublease by the Lessee shall violate the Constitution or laws of the State; and (d) the Facilities may be conveyed or subleased, in whole or in part, only to another entity or entities if, in the opinion of nationally recognized Bond Counsel, such 38 conveyance or sublease will not impair the exclusion from gross income for purposes of federal income taxation of the Tax-Exempt Bonds. Section 8.12. Prohibited Use. No portion of the proceeds of the Bonds shall be used to finance any facility, place or building used or to be used for sectarian instruction or study or as a place of devotional activities or religious worship, in such a manner or to such an extent as would result in any of the Tax-Exempt Bonds being treated as an obligation not described in Section 103(a) of the Code, or by a Person that is not an organization described in Section 501(c)(3) of the Code or a “governmental unit” (as defined in the Code) or by an organization described in Section 501(c)(3) of the Code (including the Corporation) in an “unrelated trade or business” (as defined in the Code), in such a manner or to such an extent as would result in any of the Tax-Exempt Bonds being treated as an obligation not described in Section 103(a) of the Code. Section 8.13. Limitations on Incurrence of Additional Indebtedness. (a) Senior Indebtedness. The Lessee shall not incur additional Indebtedness or Long-Term Indebtedness Unrelated to the School secured by Liens on any portion of the Facilities or the Revenues that are senior to the Lien of any Deed of Trust on any portion of the Facilities or the security interest in the Revenues granted by this Lease Agreement and any Deed of Trust. (b) Long-Term Indebtedness. The Lessee may incur additional Long-Term Indebtedness if either of the following tests is met: (i) the Coverage Ratio for the most recent Fiscal Year for which an audit has been completed was at least 1.10 to 1 (taking into account the proposed additional Long-Term Indebtedness and any Long-Term Indebtedness to be refinanced thereby); or (ii) a Management Consultant reports that (A) the Coverage Ratio for the most recent Fiscal Year for which an audit has been completed was at least 1.10 to 1, and (B) the Coverage Ratio for each of the first three consecutive Fiscal Years following the incurrence of such Long-Term Indebtedness or, if such Long-Term Indebtedness is being issued to finance improvements, equipment or new facilities, the first three consecutive Fiscal Years after such improvements, equipment or new facilities are placed in service, is projected to be at least 1.20 to 1 (taking into account the proposed additional Long-Term Indebtedness and any Long-Term Indebtedness to be refinanced thereby and provided that, such projected Net Income Available for Lease Payments shall be adjusted to provide for any projected revenues and expenses anticipated as the result of any real or personal property acquired, constructed, or completed with the proceeds of any such Long- Term Indebtedness). For the purposes of calculating “Coverage Ratio” for this subsection (b), “Coverage Ratio” means the ratio obtained by dividing (i) Net Income Available for 39 Lease Payments for the Fiscal Year being tested by (ii) Maximum Annual Lease Payments plus, without duplication, Maximum Annual Debt Service (which Maximum Annual Debt Service shall not include any payments with respect to the Series 2020 Bonds). (c) Completion Indebtedness. The Lessee may issue Completion Indebtedness in an amount not to exceed 10% of the original Indebtedness issued for the purpose of financing certain Capital Improvements, if the following conditions are met: (i) the Lessee certifies, in writing, to the Trustee that at the time the original Indebtedness issued for the purpose of financing certain Capital Improvements was incurred, the Lessee believed or had reason to believe that the proceeds of such Indebtedness together with other moneys then expected to be available to pay for such Capital Improvements would provide sufficient moneys for the completion thereof; (ii) a Consulting Architect provides the Trustee with a written statement specifying the amount necessary to complete such Capital Improvements; and (iii) the Lessee certifies, in writing, to the Trustee that the proceeds of the proposed Completion Indebtedness, together with other legally available moneys of the Lessee, will be in an amount equal to the amount set forth in clause (ii) of this subsection. (d) Refunding Indebtedness. The Lessee may issue Refunding Indebtedness, provided that the Lessee certifies, in writing, to the Trustee that the Maximum Annual Debt Service will not be increased by more than 10% by such refunding. (e) Balloon Indebtedness. The Lessee may issue Balloon Indebtedness if the conditions set forth in subsection 8.13(b)(i) or subsection 8.13(b)(ii) are met when it is assumed that: (A) the Balloon Amount is Long-Term Indebtedness maturing over a term equal to the term of the Balloon Amount or a term of 20 years from the date of issuance of the Balloon Indebtedness, whichever is greater; and (B) the Balloon Amount bears interest on the unpaid principal balance at the Projected Rate and is payable on a level debt service basis over a 20-year period. (f) Put Indebtedness. The Lessee may issue Put Indebtedness if: (i) (A) at the time such Put Indebtedness is incurred a Financial Institution has provided a binding commitment that provides for the amortization of Indebtedness incurred under such commitment over a term of at least 24 months commencing with the next succeeding Put Date, to provide financing sufficient to pay such Put Indebtedness on the Put Date occurring during the term of such commitment; and (B) the conditions set forth in subsection 8.13(b)(i) or subsection 8.13(b)(ii) are met when it is assumed that the Put Indebtedness is Long-Term Indebtedness that bears interest at the Projected Rate and is payable on a level debt service basis over a 25-year period; or (ii) (A) the period from the date of incurrence of the proposed Put Indebtedness to the first Put Date is at least 36 months and (B) the conditions set forth in clause subsection 8.13(b)(i) or subsection 8.13(b)(ii) are met when it is assumed that the Put Indebtedness is Long- 40 Term Indebtedness that either: (i) bears interest at the fixed rate applicable to the Put Indebtedness to be incurred (with such fixed interest rate applied over the entire term of the Indebtedness, for purposes under this subsection 8.13(f)(ii)); or (ii) bears interest at the Projected Rate and is payable on a level debt service basis over a 25-year period. (g) Short-Term Indebtedness, Non-Recourse Indebtedness, and Subordinated Indebtedness. The Lessee may incur Short-Term Indebtedness, Non-Recourse Indebtedness, and Subordinated Indebtedness provided that in no event shall the aggregate principal amount of all Short-Term Indebtedness, Non-Recourse Indebtedness, and Subordinated Indebtedness outstanding at any time exceed the greater of $500,000 or 5% of the Lessee's operating revenues of the School for the last preceding Fiscal Year for which audited financial statements have been prepared pursuant to Section 8.04 hereof. (h) Long-Term Indebtedness Unrelated to the School. The Lessee may incur Long-Term Indebtedness Unrelated to the School if the Lessee Coverage Ratio for the first Fiscal Year following the incurrence of such Long-Term Indebtedness Unrelated to the School or, if such Long-Term Indebtedness Unrelated to the School is being issued to finance improvements, equipment or new facilities, the Fiscal Year after such improvements, equipment or new facilities are placed in service, is projected to be at least 1.00 to 1 (taking into account the proposed additional Long-Term Indebtedness Unrelated to the School and any Long-Term Indebtedness Unrelated to the School to be refinanced thereby). (i) Short-Term Indebtedness Unrelated to the School. The Lessee may incur Short-Term Indebtedness Unrelated to the School without limitation. Indebtedness may be incurred under any of subsections 8.13(b) through (i) even though other Indebtedness is simultaneously being incurred under a different subsection of this Section 8.13. (j) The various calculations of the amount of Indebtedness, the amortization schedule of such Indebtedness and the Debt Service payable with respect to such Indebtedness for future periods required under certain provisions hereunder shall be made in a manner consistent with the provisions in this subsection. In determining the amount of Debt Service payable on Indebtedness (including, but not limited to Balloon Indebtedness and Put Indebtedness) in the course of the various calculations required under certain provisions hereof, with respect to interest rate assumptions, if the terms of the Indebtedness being considered are such that interest thereon for any future period of time is expressed to be calculated at a varying rate per annum, a formula rate or a fixed rate per annum based on a varying index, then for the purpose of making such determination of Debt Service, interest on such Indebtedness for such period (the “Determination Period”) shall be computed by assuming that the rate of interest applicable to the Determination Period is equal to the average annual rate of interest (calculated in the manner in which the rate of interest for the Determination Period is expressed to be calculated) that was or would have been in effect for the 12- 41 month period immediately preceding the date on which such calculation is made; provided, however, that if such average annual rate of interest cannot be calculated for such entire 12-month period but can be calculated for a shorter period, then the assumed interest rate for the Determination Period shall be the average annual rate of interest that was or would have been in effect for such shorter period; and provided further, that if such average annual rate of interest cannot be calculated for any preceding period of time, then the assumed interest rate for the Determination Period shall be the initial annual rate of interest which is actually applicable to such Indebtedness upon the incurrence thereof. No Indebtedness shall be deemed to arise when Variable Rate Indebtedness is converted to Indebtedness which bears interest at a fixed rate, or when fixed rate Indebtedness is converted to Indebtedness which bears interest at a variable rate, or when the method of computing the variable rate on Variable Rate Indebtedness is changed if any such conversion is in accordance with the provisions applicable to such Indebtedness in effect immediately prior to such conversion. In determining the amount of Debt Service payable on Indebtedness that is Variable Rate Indebtedness that is subject to a Financial Products Agreement that fits (2) of the definition of Financial Products Agreement converting variable rate exposure to fixed rate exposure, the fixed rate shall be what applies. No Debt Service shall be deemed payable with respect to Commitment Indebtedness until such time as funding occurs under the commitment which gave rise to such Commitment Indebtedness, except to the extent that the terms of such Commitment Indebtedness are to be considered pursuant to this Section in determining the amortization schedule and Debt Service payable with respect to the Indebtedness supported by the commitment which gave rise to such Commitment Indebtedness. From and after such funding, the amount of such Debt Service shall be calculated in accordance with the actual amount required to be repaid on such Commitment Indebtedness and the actual interest rate and amortization schedule applicable thereto, utilizing the various assumptions in this Section. No Indebtedness shall be deemed to arise when any funding occurs under any such commitment or any such commitment is renewed upon terms which provide for substantially the same terms of repayment of amounts disbursed pursuant to such commitment as obtained prior to such renewal. In making any determination of or with regard to Debt Service hereunder, the Trustee may rely on certificates, opinions and reports of Consultants as it deems appropriate. For the avoidance of doubt, the Lessee may only incur additional Indebtedness pursuant to this Section 8.13 so long as no Event of Default has occurred and is continuing under this Lease Agreement. In connection with the Lessee’s incurrence of parity additional Indebtedness pursuant to this Section 8.13, the Lessee shall enter into such documentation as may be necessary to reflect and implement the parity position of such Indebtedness. Such documentation may consist of, but is not limited to, a custody and parity lien agreement, intercreditor agreement or deposit account control agreement (the “Parity Agreement”) with a representative of the holders of the parity Indebtedness (a “Parity Trustee”) and a third party (the “Indebtedness Custodian”). 42 The Indebtedness Custodian will (a) hold all sums held by it for the payment of principal of (and premium, if any) or interest or any other amounts on the Bonds and the parity Indebtedness in trust for the benefit of the Trustee and the Parity Trustee until such sums shall be paid to such entities or otherwise disposed of as therein provided; and (b) give the Trustee notice of any default by the Lessee in the making of any such payment of principal (and premium, if any) or interest or any other amounts. Any Revenues collected by the Indebtedness Custodian under the Parity Agreement and any proceeds of any sale of the Facilities, whether made under any power of sale herein granted or pursuant to judicial proceedings, together with, in the case of an entry or sale as otherwise provided herein, any other sums then held by the Indebtedness Custodian under the Parity Agreement, shall be applied to the payment of the Bonds and the other parity Indebtedness in a prorata fashion based on then Outstanding principal amount of the Bonds and the then outstanding principal amount of parity Indebtedness. No holder of any parity Indebtedness shall have any right to institute any proceeding, judicial or otherwise, with respect to the documents related to such parity Indebtedness, or for the appointment of a receiver or trustee, or for any other remedy thereunder, unless: (i) such holder has previously given written notice to the Trustee of a continuing event of default; and (ii) the holders of not less than 50% in principal amount of all parity Indebtedness Outstanding shall have made written request to institute proceedings in respect of such event of default; it being understood and intended that no one or more holders of any parity Indebtedness shall have any right in any manner whatever by virtue of, or by availing of, any provision of the documents related to the applicable parity Indebtedness to affect, disturb or prejudice the rights of any other holder of parity Indebtedness, or to obtain or to seek to obtain priority or preference over any other holders, or to enforce any right under their respective documents, except in the manner herein provided and for the equal and ratable benefit of all the holders of parity Indebtedness. Section 8.14. Operating Leases. The Lessee will not enter into any operating leases for facilities to be paid from Revenues unless the Lessee has delivered to the Trustee: (a) Evidence that (1) the ratio for the immediately preceding Fiscal Year of (i) Net Income Available for Lease Payments (provided that for purposes of this Section 8.14, the definition of Net Income Available for Lease Payments shall also exclude base lease payments paid pursuant to the operating lease) to (ii) Actual Annual Debt Service plus Actual Annual Lease Payments plus the first year of payments to paid pursuant to the operating lease was at least 1.10 to 1 and (2) an opinion or report based on a feasibility study of an Independent consultant that for each of the two succeeding Fiscal Years occurring after the commencement of the lease term, the ratio of (i) Net Income Available for Lease Payments to (ii) Actual Annual Debt Service plus Actual Annual 43 Lease Payments plus the payments to be paid pursuant to the operating lease is projected to be at least 1.20 to 1; or (b) Evidence of the consent of the Beneficial Owners (as defined in the Indenture) of not less than a majority in aggregate principal amount of the Bonds then Outstanding (as defined in the Indenture). Section 8.15. Covenant to Comply with Indenture and Loan Agreement. The Lessee hereby acknowledges receipt of the Indenture and the Loan Agreement, agrees to be bound by the respective terms thereof and accepts all obligations and duties imposed thereby. Section 8.16. Liens. Except as specifically provided in this Lease Agreement, the Lessee covenants not to create, assume, incur or suffer to be created, assumed or incurred any Lien (other than Permitted Encumbrances) on the Facilities or the Revenues or any accounts holding Revenues. Section 8.17. Lease Blocked Account Agreement. Lessee hereby pledges to Lessor and covenants and agrees to deposit all monies paid from the San Bernardino Office of Education, immediately upon receipt thereof (or to direct any third party or the San Bernardino County Office of Education to deposit such amounts on the date available, if at any time Lessee determines that the San Bernardino County Office of Education would follow such direction) into the blocked account (the “Blocked Account”) established pursuant to the Lease Blocked Account Agreement for disbursement as specified in the Blocked Account Agreement. Except as provided in the Lease Blocked Account Agreement, the Lessee hereby covenants and agrees that it will not terminate or amend the Lease Blocked Account Agreement unless it has delivered to the Lessor and the Trustee written evidence of the consent of the Registered Owners of not less than a majority in aggregate principal amount of the Bonds then Outstanding regarding such termination or amendment. Section 8.18. Days Cash on Hand. The Lessee hereby covenants and agrees that the School will maintain the Days Cash on Hand Requirement. As provided in Section 8.05(d), the Lessee will deliver, not later than December 31 following the end of each of the Borrower’s Fiscal Years, commencing with the Fiscal Year ended [June 30, 2020], to the Lessor, the Trustee and the Underwriter a certificate stating the Days Cash on Hand for the Fiscal Year then ended. Commencing with the Fiscal Year ending [June 30, 2020], if such Days Cash on Hand is below the Days Cash on Hand Requirement as of any June 30, the Lessee shall retain a Management Consultant within sixty (60) days following the reporting of such failure at the Lessee’s expense. The Lessee shall cause the Management Consultant to submit a written report and make recommendations within forty-five (45) days of being retained (a copy of such report and recommendations shall be filed with the Lessor, the Underwriter and the Trustee) with respect to financial matters of the Lessee which are relevant to increasing the Days Cash on Hand to at least the required level. Copies of such recommendations shall be filed with the Lessor, the Underwriter and Trustee. The Lessee agrees that promptly upon the receipt of such recommendations, subject to applicable requirements or restrictions imposed by law, or to the extent practical, it shall revise 44 its methods of operation and shall take such other reasonable actions as shall be in conformity with the recommendations. So long as the Lessee shall retain a Management Consultant and complies with such Management Consultant's recommendations to the extent practical or not prohibited by law, no default or Event of Default shall be declared solely by reason of a violation of the requirements of this Section. Section 8.19. Coverage Ratio. As provided in Section 8.05(d), the Lessee will deliver, not later than December 31 following the end of each of the Lessee’s Fiscal Years, to the Trustee and the Underwriter a certificate in the form attached hereto as Exhibit D stating the Coverage Ratio for the Fiscal Year then ended, commencing with the Fiscal Year ending [June 30, 2020]. The Coverage Ratio shall be 1.10 or above for each Fiscal Year commencing with the Fiscal Year ending [June 30, 2020]. Commencing with the Fiscal Year ending [June 30, 2020], if such Coverage Ratio is below 1.10, the Lessee shall retain a Management Consultant within sixty (60) days following the reporting of such failure at the Lessee’s expense. The Lessee shall cause the Management Consultant to submit a written report and make recommendations within forty-five (45) days of being retained (a copy of such report and recommendations shall be filed with the Underwriter and the Trustee) with respect to increasing Revenues, decreasing Operating Expenses or other financial matters of the Lessee which are relevant to increasing the Coverage Ratio to at least the required level. The Lessee will, subject to the exceptions in the next sentence, adopt and follow the recommendations of the Management Consultant and will thereafter calculate the Coverage Ratio for each succeeding fiscal quarter. So long as the Management Consultant determines that the Lessee is demonstrating reasonable diligence to comply with the appropriate recommendations (excepting certain limited instances when an Opinion of Counsel is obtained excusing such actions by the Lessee or where the Lessee makes a good faith determination in a statement to the Trustee that the Management Consultant’s recommendations would violate State or federal law, the educational or charitable purpose of the Lessee or the Charter School Contract) and the Coverage Ratio does not fall below 1.0 to 1 in any fiscal quarter, the Lessee will be deemed to have complied with its covenants hereunder. The Lessee shall continue to retain the Management Consultant until the Lessee has achieved a Coverage Ratio of at least the required level for at least two consecutive fiscal quarters. In the event that the Coverage Ratio is below 1.0 to 1 an event of default shall have occurred hereunder. Any contract entered into between the Lessee and any Management Consultant engaged by the Lessee pursuant to this Section 8.19 must meet the requirements of this Lease Agreement and the Tax Regulatory Agreement. Section 8.20. Subordination. To the extent permitted by Internal Revenue Service Revenue Procedure 2017-13, the Lessee hereby covenants and agrees: (1) this Lease Agreement at all times shall automatically be subordinate to the Deed of Trust (unless waived in writing by the beneficiary pursuant to the Deed of Trust (the “Beneficiary”) thereunder), (2) Lessee shall attorn to the Beneficiary and any purchaser at a foreclosure sale, such attornment to be self- executing and effective upon acquisition of title to the Property (as that term is defined in the Deed of Trust) by any purchaser at a foreclosure sale or by the Beneficiary in any manner; (3) to execute such further evidences of attornment and subordination as a mortgagee or any purchaser at a foreclosure sale may from time to time request, including a subordination and attornment agreement in form and substance acceptable to the Beneficiary or any purchaser in its sole 45 discretion; (4) this Lease Agreement shall not be terminated by foreclosure or any other transfer of the Property; (5) after a foreclosure sale of the Property, a Beneficiary or any other purchaser at such foreclosure sale may, at the Beneficiary’s or such purchaser’s option, accept or terminate this Lease Agreement; and (6) the Lessee shall, upon receipt after the occurrence of an Event of Default of a written request from the mortgagee, pay all “Rents” (as that term is defined in the Deed of Trust) payable under this Lease Agreement to the mortgagee. Section 8.21. Investor Call. On or about each February 15, commencing on or about February 15, 2021, the Borrower and the Lessee shall arrange a conference call with Registered Owners, Beneficial Owners, and potential purchasers of the Series 2020 Bonds, regarding performance of the Lessee and the School for the period ending with the preceding June 30. The Borrower and the Lessee shall provide at least 15 days' notice of such calls to EMMA. Section 8.22. Subordination of Support Office Service Fees. If the School enters into an Administrative Services Agreement for the payment of Support Office Service Fees to the Lessee or any supporting organization of Lessee under Internal Revenue Code Section 509(a)(3), with respect to the School, so long as Bonds remain outstanding, the Lessee covenants and agrees that such Administrative Services Agreement shall provide (to the extent permitted by Rev. Proc. 2017-13, published by the U.S. Treasury Department on January 17, 2017, or subsequent or supplemental guidance) that: (i) the obligation of the Lessee to pay Support Office Service Fees relating to the School shall be subordinate to its payment of operating expenses of the School and Lease Payments to the Lessor under this Lease; (ii) the obligation of Lessee to pay Support Office Service Fees relating to the School shall be suspended for any such time as the payment of Support Office Service Fees would cause Lessee to fail to meet any of the financial covenants contained in this Lease; and (iii) during any period of time when Support Office Service Fees remain unpaid, such fees shall accrue without interest. If Lessee has not engaged a separate manager with respect to the School, Lessee agrees that it shall not apply any Revenues to costs and expenses of management unless and until all Lease Payments are fully paid and the Loan is not in default. The Lessee covenants and agrees to enter into an Administrative Services Agreement with the School by not later than June 30, 2020, which shall subordinate the obligations to pay Support Office Service Fees thereunder to the payment of operating expenses of the School and Lease Payments to the Lessor under this Lease in accordance with clauses (i) through (iii) above. ARTICLE IX ASSIGNMENT AND PLEDGE BY LESSOR The Lessor shall assign certain of its rights and interests in and under this Lease Agreement to the Authority pursuant to the Loan Agreement as security for payment of the principal of, premium, if any, and interest on the Promissory Note, and the Authority will further assign its rights under the Lease Agreement to the Trustee pursuant to the Indenture as security for payment of the principal of, premium, if any, and interest on the Bonds. The Lessee hereby consents to such assignments. 46 ARTICLE X EVENTS OF DEFAULT AND REMEDIES Section 10.01. Events of Default. The following shall be Events of Default of the Lessee under this Lease Agreement, and the term Event of Default shall mean, whenever it is used in this Lease Agreement, any one or more of the following events: (a) Failure by the Lessee to make the Lease Payments required by Section 5.02 hereof by the Base Lease Payment Date. (b) Failure by the Lessee to observe or perform any other covenant, condition or agreement on its part to be observed or performed herein other than as referred to in subsection (a) above, for a period of thirty (30) days after written notice specifying such failure and requesting that it be remedied shall have been given to the Lessee by the Lessor, the Authority or the Trustee; provided, with respect to any such failure covered by this subsection (b), no Event of Default shall be deemed to have occurred so long as a course of action adequate in the judgment of the Trustee to remedy such failure shall have been commenced within such thirty-day period and shall thereafter be diligently pursued to completion and the failure shall be remedied within ninety (90) days of such occurrence, unless said remedy cannot be performed within ninety (90) days and the Lessee is actively working toward a remedy. (c) The dissolution or liquidation of the Lessee, or failure by the Lessee to promptly contest and have lifted any execution, garnishment or attachment of such consequence as will impair its ability to meet its obligations with respect to the operation of its charter schools or to make any payments under this Lease Agreement. The phrase “dissolution or liquidation of the Lessee,” as used in this subsection, shall not be construed to include the cessation of the corporate existence of the Lessee resulting either from a merger or consolidation of the Lessee into or with another domestic corporation or a dissolution or liquidation of the Lessee following a transfer of all or substantially all of its assets under the conditions permitting such actions contained in Section 8.02 hereof. (d) The entry of a decree or order for relief by a court having jurisdiction in the premises in respect of the Lessee in an involuntary case under the federal bankruptcy laws, as now or hereafter constituted, or any other applicable federal or State bankruptcy, insolvency or other similar law, or appointing a receiver, liquidator, assignee, custodian, trustee, sequestrator (or other similar official) of the Lessee or for any substantial part of its property, or ordering the winding-up or liquidation of its affairs and the continuance of any such decree or order unstayed and in effect for a period of sixty (60) consecutive days. (e) The commencement by the Lessee of a voluntary case under the federal bankruptcy laws, as now or hereafter constituted, or any other applicable federal or State bankruptcy, insolvency or other similar law, or the consent by it to the appointment of or taking possession by a receiver, liquidator, assignee, trustee, custodian, sequestrator (or other similar official) of the Lessee or for any substantial part of its property, or the 47 making by it of any assignment for the benefit of creditors, or the failure of the Lessee generally to pay its debts as such debts become due, or the taking of corporate action by the Lessee in furtherance of any of the foregoing. (f) Failure of the Lessee to comply with any covenants contained in the Tax Regulatory Agreement. (g) Lessee violates or fails to observe or perform any terms or conditions of the Ground Lease, and fails to cure the same within any notice or grace period contained in the Ground Lease. (h) The occurrence of an Event of Default under the Indenture, the Loan Agreement, the Deed of Trust or any of the Lessee Documents. (i) Any representation or warranty made by the Lessee herein or made by the Lessee in any statement or certificate furnished by the Lessee either required hereby or in connection with the execution and delivery of this Lease Agreement and the sale and the issuance of the Bonds shall prove to have been untrue in any material respect as of the date of the issuance or making thereof. (j) Judgment for the payment of money in excess of $50,000.00 (which is not covered by insurance) is rendered by any court or other governmental body against the Lessee, and the Lessee does not discharge same or provide for its discharge in accordance with its terms, or procure a stay of execution thereof within sixty (60) days from the date of entry thereof, and within said sixty-day period or such longer period during which execution of such judgment shall have been stayed, appeal therefrom and cause the execution thereof to be stayed during such appeal while providing such reserves therefor as may be required under Generally Accepted Accounting Principles. (k) A writ or warrant of attachment or any similar process shall be issued by any court against the Facilities, and such writ or warrant of attachment or any similar process is not released or bonded within sixty (60) days after its entry. (l) Any of the Lessee’s representations and warranties herein or in any of the other Lessee Documents with respect to environmental matters are false in any material respect. (m) The termination of the Charter School Contract either by its terms or for any other reason. The foregoing provisions of subsection (b) of this Section 10.01 are subject to the following limitations: If by reason of force majeure the Lessee is unable in whole or in part to carry out its agreements herein contained, other than the obligations on the part of the Lessee contained in Article V and in Sections 6.02, 6.03, 6.06 and 8.06 hereof, the Lessee shall not be deemed in default during the continuance of such inability. The term “force majeure” as used herein shall mean, without limitation, the following: acts of God; strikes, lockouts or other industrial disturbances; acts of public enemies; orders of any kind of the government of the United States or of the State or any of their departments, agencies or officials, or any civil or 48 military authority; insurrections; riots; epidemics; landslides; lightning; earthquake; fire; hurricane; tornadoes; storms; floods; washouts; droughts; arrests; restraint of government and people; explosions; breakage or accident to machinery, transmission pipes or canals; partial or entire failure of utilities; or any other cause or event not reasonably within the control of the Lessee. The Lessee agrees, however, if possible, to remedy with all reasonable dispatch the cause or causes preventing it from carrying out its agreements; provided, that the settlement of strikes, lockouts and other industrial disturbances shall be entirely within the discretion of the Lessee, and the Lessee shall not be required to make settlement of strikes, lockouts or other industrial disturbances by acceding to the demands of the opposing party or parties when such course is in the judgment of the Lessee unfavorable to the Lessee. Section 10.02. Remedies On Default. (a) Whenever an Event of Default referred to in Section 10.01 hereof shall have occurred and is continuing, the Lessor, or the Trustee where so provided herein, may take any one or more of the following remedial steps: (i) The Lessor (or the Trustee acting as assignee of the Lessor, as and to the extent provided in the Indenture) may declare the Lease Payments payable hereunder for the remainder of the Lease Term to be immediately due and payable, whereupon the same shall become due and payable; (ii) The Lessor (or the Trustee acting as assignee of the Lessor, as and to the extent provided in the Indenture) may terminate the Lease Term and give notice to the Lessee to vacate and surrender possession of the Facilities within ten (10) Business Days of such notice; (iii) The Lessor (or the Trustee acting as assignee of the Lessor, as and to the extent provided in the Indenture) may proceed to foreclose through the courts on or otherwise sell, trade-in, repossess or liquidate the Lessee’s interest in the Facilities, or any part thereof, in any lawful manner; (iv) The Lessor (or the Trustee acting as assignee of the Lessor, as and to the extent provided in the Indenture) may lease or sublease the Facilities or any portion thereof or sell any interest the Lessor has in the Facilities; and (v) The Lessor (or the Trustee acting as assignee of the Lessor, as and to the extent provided in the Indenture) may take whatever action at law or in equity as may appear necessary or desirable to collect the amounts then due and thereafter to become due, or to enforce performance or observance of any obligations, agreements or covenants of the Lessee under this Lease Agreement. (b) Notwithstanding the foregoing, prior to the exercise by the Lessor or the Trustee of any remedy that would prevent the application of this paragraph, the Lessee may, at any time, pay all accrued payments hereunder (exclusive of any payments accrued solely by virtue of declaration pursuant to subsection (a)(i) of this Section 10.02) 49 and fully cure all defaults, and in such event, the Lessee shall be fully reinstated to its position hereunder as if such Event of Default had never occurred. (c) In the event that the Lessee fails to make any payment required hereby, the payment so in default shall continue as an obligation of the Lessee until the amount in default shall have been fully paid. (d) Whenever any Event of Default has occurred and is continuing under this Lease Agreement, the Trustee may, but except as otherwise provided in the Indenture shall not be obligated to, exercise any or all of the rights of the Lessor under this Article, upon notice as required to the Lessor. In addition, the Trustee shall have available to it all of the remedies prescribed in the Indenture. (e) Any amounts collected pursuant to action taken under the immediately preceding paragraph (d) (other than sums collected for the Lessor on account of the Lessor’s Unassigned Rights, which sums shall be paid directly to the Lessor), after reimbursement of any costs incurred by the Lessor or the Trustee in connection therewith, shall be applied in accordance with the provisions of the Indenture. (f) If the Lessor or the Trustee shall have proceeded to enforce their rights under this Lease Agreement and such proceedings shall have been discontinued or abandoned for any reason or shall have been determined adversely to the Lessor or the Trustee, then and in every such case, the Lessee, the Lessor and the Trustee shall be restored to their respective positions and rights hereunder, and all rights, remedies and powers of the Lessee, the Lessor and the Trustee shall continue as though no such proceedings had been taken. (g) In the event of any payment by the Lessor, the Lessor shall be subrogated to all of Lessee’s rights of recovery therefor against any Person and the Lessee shall execute and deliver all documents and instruments and perform all actions necessary to secure such rights of the Lessor. Section 10.03. No Remedy Exclusive. No remedy herein conferred upon or reserved to the Lessor is intended to be exclusive of any other available remedy or remedies, but each and every such remedy shall be cumulative and shall be in addition to every other remedy given under this Lease Agreement or now or hereafter existing at law or in equity or by statute. No delay or omission to exercise any right or power accruing upon any default shall impair any such right or power or shall be construed to be a waiver thereof, but any such right or power may be exercised from time to time and as often as may be deemed expedient. In order to entitle the Lessor to exercise any remedy reserved to it in this Article, it shall not be necessary to give any notice, other than notice required herein or by applicable law. Such rights and remedies given the Lessor hereunder shall also extend to the Trustee, the Beneficial Owners and the Registered Owners of the Bonds, subject to the Indenture. Section 10.04. Agreement to Pay Attorneys’ Fees and Expenses. In the event the Lessee should breach any of the provisions of this Lease Agreement and the Lessor or the Trustee should employ attorneys or incur other expenses for the collection of Lease Payments or 50 the enforcement of performance or observance of any obligation or agreement on the part of any Lessee herein contained, the Lessee agrees that it will on demand therefore pay to the Lessor and the Trustee, as the case may be, the reasonable fees of such attorneys and such other reasonable expenses incurred by the Lessor and the Trustee. The obligations of the Lessee arising under this Section 10.04 shall continue in full force and effect notwithstanding the final payment of the Bonds or the termination of this Lease Agreement for any reason. Section 10.05. Waiver. In the event any agreement contained in this Lease Agreement should be breached by any party and thereafter waived by any other party, such waiver shall be limited to the particular breach waived and shall not be deemed to waive any other breach hereunder. In view of the assignment of the Lessor’s rights in and under this Lease Agreement to the Authority under the Loan Agreement and then to the Trustee under the Indenture, the Lessor shall have no power to waive any Event of Default hereunder without the consent of the Trustee. Notwithstanding the foregoing, a waiver of an Event of Default under the Loan Agreement or the Indenture or a rescission of a declaration of acceleration of the Bonds and a rescission and annulment of its consequences shall constitute a waiver of the corresponding Event of Default under this Lease Agreement and a rescission and annulment of its consequences; provided, that no such waiver or rescission shall extend to or affect any subsequent or other default hereunder or impair any right consequent thereon. Section 10.06. Treatment of Funds in Bankruptcy. The Lessee acknowledges and agrees that in the event the Lessee commences a case under the United States Bankruptcy Code located at 11 U.S.C. § 101 et. seq. (the “Bankruptcy Code”) or is the subject of an involuntary case that results in an order for relief under the Bankruptcy Code: (i) amounts on deposit in any of the Funds are not, nor shall they be deemed to be, property of the Lessee’s bankruptcy estate as defined by § 541 of the Bankruptcy Code; (ii) that in no event shall the Lessee assert, claim or contend that amounts on deposit in any of the Funds are property of the Lessee’s bankruptcy estate; and (iii) that amounts on deposit in any of the Funds are held in trust solely for the benefit of the Registered Owners and the Beneficial Owners, shall be applied only in accordance with the provisions of the Indenture, and the Lessee has no legal, equitable or reversionary interest in, or right to, such amounts. ARTICLE XI [RESERVED] ARTICLE XII MISCELLANEOUS Section 12.01. Notices. All notices, certificates or other communications hereunder shall be sufficiently given and shall be deemed given when mailed by Electronic Means, certified mail, return receipt requested, postage prepaid, facsimile or overnight courier, addressed as follows: 51 If to the Lessee: The High Desert “Partnership in Academic Excellence” Foundation, Incorporated 17500 Mana Road Apple Valley, CA 92307 Attention: Lisa Lamb, President/CEO Telephone: (716) 946-5414 Email: LLamb@lcer.org with a copy to: Young, Minney & Corr LLP 655 University Avenue, #150 Sacramento, California 95825 Attention: Sarah Kollman, Esq. Telephone: (916) 646-1400 Email: skollman@mycharterlaw.com If to the Lessor: 230 South Waterman Avenue LLC 17500 Mana Road Apple Valley, CA 92307 Attention: Lisa Lamb, President/CEO Telephone: (716) 946-5414 Email: LLamb@lcer.org with a copy to: Young, Minney & Corr LLP 655 University Avenue, #150 Sacramento, California 95825 Attention: Sarah Kollman, Esq. Telephone: (916) 646-1400 Email: skollman@mycharterlaw.com If to the Authority: California Enterprise Development Authority 2150 River Plaza Drive, Suite 275 Sacramento, California 95833 Attention: Chair Telephone: (916) 448-8252 Email: gsahota@caled.org 52 If to the Trustee: Wilmington Trust, National Association 650 Town Center Drive, Suite 800 Costa Mesa, California 92626 Telephone: (714) 384-4153 If to the Underwriters BB&T Capital Markets 1880 Century Park East, Suite 400 Los Angeles, California 90067 Attention: Debra Boyd Telephone: (310) 975-8387 Email: dsboyd@bbandtcm.com RBC Capital Markets, LLC 777 S. Figueroa Street, Suite 850 Los Angeles, California 90017 Attention: John Solarczyk Telephone: (213) 362-4115 Email: john.solarczyk@rbccm.com A duplicate copy of each notice, certificate or other communication given hereunder by the Lessor or the Lessee shall also be given to the Trustee. The Authority, the Lessor, the Lessee or the Trustee may, by notice hereunder, designate any further or different addresses to which subsequent notices, certificates or other communications shall be sent. Section 12.02. Binding Effect. This Lease Agreement shall inure to the benefit of and shall be binding upon the Lessor and the Lessee, and their respective successors and assigns, subject, however, to the limitations contained in Section 8.02, Article IX and Section 12.12 hereof. Section 12.03. Severability. In the event any provision of this Lease Agreement shall be held invalid or unenforceable by any court of competent jurisdiction, such holding shall not invalidate or render unenforceable any other provision hereof. Section 12.04. Third Party Beneficiaries. Each of the Authority, Indemnified Parties and the Registered Owners are intended “Third Party Beneficiaries” of this Lease Agreement. Nothing in this Lease Agreement shall confer any right upon any person other than parties hereto, and those specifically designated as Third Party Beneficiaries of this Lease Agreement. Section 12.05. Net Lease. This Lease Agreement shall be deemed and construed to be a “triple net lease,” and the Lessee shall pay absolutely net during the Lease Term, the Base Lease Payments, Additional Lease Payments and all other payments required hereunder, free of any deductions, and without abatement, deduction or setoff (other than credits against the Base Lease Payments expressly provided for in this Lease Agreement). Section 12.06. Amendments, Changes And Modifications. Except as otherwise provided in this Lease Agreement or in the Indenture, this Lease Agreement may not be 53 effectively amended, changed, modified, altered or terminated without the written consent of the Authority and the Trustee. Section 12.07. Execution in Counterparts. This Lease Agreement may be executed in several counterparts, each of which shall be an original and all of which shall constitute but one and the same instrument. Section 12.08. Governing Law. This Lease Agreement shall be governed by and construed in accordance with the laws and judicial decisions of the State, except as such laws may be preempted by any federal rules, regulations and laws. Unless otherwise required by California law, the parties hereto expressly acknowledge and agree that any judicial action to interpret or enforce the terms of this Lease Agreement shall be brought and maintained in State and federal courts in San Bernardino County, California or the United States Bankruptcy Court in any case involving or having jurisdiction over the Lessee or the Facilities. To the extent that any provision of this Lease Agreement conflicts with any provision of the Charter School Act in effect on the date of final execution of this Lease Agreement, the provisions of the Charter School Act shall control. Section 12.09. Filing. The Lessee shall cause the security interest in any personal property comprising a part of the Series 2020 Facilities granted to the Authority and the assignment of such security interest to the Trustee to be perfected by the filing of financing statements which shall fully comply with the California Uniform Commercial Code in the office of the Secretary of State of California and in such other office as is at the time provided by law as the proper place for the filing thereof. The parties further agree that all necessary continuation statements shall be filed by the Lessee within the time prescribed by the California Uniform Commercial Code in order to continue such security interests. Section 12.10. Cancellation at Expiration of Lease Term. Upon the termination of this Lease Agreement, and provided the Bonds have been fully retired and all amounts due hereunder have been paid in full, the Lessor shall deliver to the Lessee any documents and take or cause the Trustee and/or the Authority to take such actions as may be necessary to evidence the termination of this Lease Agreement and the discharge of the Lien of the Deed of Trust. Section 12.11. No Pecuniary Liability of Authority. No provision, covenant or agreement contained in this Lease Agreement, or any obligations herein imposed upon the Authority, or the breach thereof, shall constitute an indebtedness or liability of the Authority within the meaning of any State constitutional provision or statutory limitation or shall constitute or give rise to a pecuniary liability of the Authority, any member, officer or agent of the Authority or a charge against the Authority’s general credit. The Authority has no taxing power. In making the agreements, provisions and covenants set forth in this Lease Agreement, the Authority has not obligated itself except with respect to the application of the Lease Payments, as hereinabove provided. Section 12.12. No Personal Liability of Officials of Lessee, Lessor, Authority or Trustee. None of the covenants, stipulations, promises, agreements and obligations of the Authority, the Trustee, the Lessor or the Lessee contained herein shall be deemed to be covenants, stipulations, promises, agreements or obligations of any official, member, officer, 54 agent or employee of the Authority, the Trustee, the Lessor or the Lessee in his or her individual capacity, and no recourse shall be had for the payment of the principal of or premium, if any, or interest on the Bonds or for any claim based thereon or any claim hereunder against any official, officer, member, agent or employee of the Authority, the Lessor or the Lessee or any officer, member, agent, servant or employee of the Trustee or any natural person executing any Bond, including any officer or employee of the Trustee. Section 12.13. No Warranty by Lessor. THE LESSEE RECOGNIZES THAT, BECAUSE THE COMPONENTS OF THE SERIES 2020 FACILITIES HAVE BEEN AND ARE TO BE SELECTED BY IT, THE LESSOR HAS NOT MADE ANY INSPECTION OF THE SERIES 2020 FACILITIES OR OF ANY FIXTURE OR OTHER ITEM CONSTITUTING A PORTION THEREOF, AND THE LESSOR MAKES NO WARRANTY OR REPRESENTATION, EXPRESS OR IMPLIED OR OTHERWISE, WITH RESPECT TO THE SAME OR THE LOCATION, USE, DESCRIPTION, DESIGN, MERCHANTABILITY, FITNESS FOR USE FOR ANY PARTICULAR PURPOSE, CONDITION OR DURABILITY THEREOF, OR AS TO THE QUALITY OF THE MATERIAL OR WORKMANSHIP THEREIN, IT BEING AGREED THAT ALL RISKS INCIDENT THERETO ARE TO BE BORNE BY THE LESSEE. IN THE EVENT OF ANY DEFECT OR DEFICIENCY OF ANY NATURE IN THE SERIES 2020 FACILITIES OR ANY FIXTURE OR OTHER ITEM CONSTITUTING A PORTION THEREOF, WHETHER PATENT OR LATENT, THE LESSOR SHALL HAVE NO RESPONSIBILITY OR LIABILITY WITH RESPECT THERETO. THE PROVISIONS OF THIS SECTION HAVE BEEN NEGOTIATED AND ARE INTENDED TO BE A COMPLETE EXCLUSION AND NEGATION OF ANY WARRANTIES OR REPRESENTATIONS BY THE LESSOR, EXPRESS OR IMPLIED, WITH RESPECT TO THE SERIES 2020 FACILITIES OR ANY FIXTURE OR OTHER ITEM CONSTITUTING A PORTION THEREOF, WHETHER ARISING PURSUANT TO THE UNIFORM COMMERCIAL CODE OR ANY OTHER LAW NOW OR HEREAFTER IN EFFECT. Section 12.14. Prior Agreements Superseded. This Lease Agreement, together with all agreements executed by the parties concurrently herewith or in conjunction with the initial issuance of a Series of Bonds, shall completely and fully supersede all other prior understandings or agreements, both written and oral, between the Lessor and the Lessee relating to the Facilities. Section 12.15. Covenant by Lessee With Respect to Statements, Representations and Warranties. It is understood by the Lessee that all such statements, representations and warranties made by it in this Lease Agreement shall be deemed to have been relied upon by the Authority as an inducement to issue the Bonds, and that if any such statements, representations and warranties were false at the time they were made or (with respect to those representations and warranties which are to continue) are breached during the term hereof, such misrepresentation or breach shall constitute a breach of this Lease Agreement which may give rise to an Event of Default hereunder. Section 12.16. Captions. The captions and headings in this Lease Agreement are for convenience only and in no way define, limit or describe the scope or intent of any provisions or sections of this Lease Agreement. 55 Section 12.17. Lease Payments Due on Holidays. If the date for making any Lease Payment or the last date for performance of any act or the exercise of any right, as provided in this Lease Agreement is not a Business Day, such Lease Payments may be made or act performed or right exercised on the next succeeding Business Day unless otherwise provided herein, with the same force and effect as if done on the nominal date provided in this Lease Agreement. Section 12.18. Provision of General Application. Any consent or approval of the Lessor required pursuant to this Lease Agreement shall be in writing and shall not be unreasonably withheld. Section 12.19. Survival. Notwithstanding the payment in full of the Bonds, the discharge of the Indenture, and the termination or expiration of the Loan Agreement and the Series 2020 Promissory Note and this Lease Agreement, all provisions in this Lease Agreement concerning (a) the tax-exempt status of the Tax-Exempt Bonds (including, but not limited to provisions concerning the payment of the Rebate Amount), (b) the interpretation of this Lease Agreement, (c) the governing law, (d) the forum for resolving disputes, (e) the Authority’s right to rely on facts or certificates, (f) the indemnity of the Indemnified Parties, and (g) the Authority’s and Trustee’s lack of pecuniary liability shall survive and remain in full force and effect. Section 12.20. Notice of Change in Fact. The Lessee will notify the Lessor, the Authority, the Underwriter and the Trustee promptly after the Lessee becomes aware of (i) any change in any material fact or circumstance represented or warranted by the Lessee in this Lease Agreement or in connection with the issuance of a Series of Bonds which would make any such representation or warranty false when made, (ii) any default or event which, with notice or lapse of time or both, could become an Event of Default under this Lease Agreement, the Loan Agreement or the Indenture or any of Lessee’s Document, specifying in each case the nature thereof and what action the Lessee has taken, is taking, and/or proposes to take with respect thereto, (iii) any Internal Revenue Service audit of the Lessee or the Bonds, (iv) any material litigation affecting the Bonds, the Lessee or the Facilities, and (v) any default in any indebtedness of the Lessee. Section 12.21. CASp Disclosure. California Civil Code Section 1938 requires Lessor to notify Lessee whether the Premises has undergone inspection by a Certified Access Specialist (“CASp”), as defined in California Civil Code Section 55.52. Lessor hereby states to Lessee that, as of the date this Lease is executed, the property of which the Premises is a part has not undergone such inspection. A CASp can inspect the Premises and determine whether the Premises comply with all of the applicable construction related accessibility standards under California state law. Although California state law does not require a CASp inspection of the Premises, the Lessor may not prohibit Lessee from obtaining a CASp inspection of the Premises for the occupancy or potential occupancy of Lessee, if requested by Lessee. The Parties shall mutually agree on the arrangements for the time and manner of the CASp inspection, the payment of the fee for the CASp inspection, and the cost of making any repairs necessary to correct violations of construction related accessibility standards within the Premises. Notwithstanding the foregoing, Lessee shall be solely responsible for any such inspections and 56 for any repairs that may be deemed necessary in connection with such inspections, and in any case, Lessor shall have the opportunity to have a representative present at any such inspection. Section 12.22. Energy Use Disclosure Program. Lessee hereby acknowledges that Lessor may be required to disclose certain information concerning the energy performance of the Premises (the “Energy Disclosure Information”) pursuant to California Public Resources Code Section 25402.10 and the regulations adopted pursuant thereto (collectively the “Energy Disclosure Requirements”). If and to the extent not prohibited by applicable laws, Lessee hereby waives any right Lessee may have to receive the Energy Disclosure Information, including, without limitation, any right Lessee may have to terminate this Lease as a result of Lessor’s failure to disclose such information. Further, Lessee hereby releases Lessor from any and all losses, costs, damages, expenses and/or liabilities relating to, arising out of and/or resulting from the Energy Disclosure Requirements, including, without limitation, any liabilities arising as a result of Lessor’s failure to disclose the Energy Disclosure Information to Lessee prior to the execution of this Lease. Lessee’s acknowledgment of the AS-IS condition of the Premises pursuant to the terms of this Lease shall be deemed to include the energy performance of the Premises. Lessee further acknowledges that pursuant to the Energy Disclosure Requirements, Lessor may be required in the future to disclose information concerning Lessee’s energy usage to certain third parties, including, without limitation, prospective purchasers, lenders and lessees of the Premises (the “Energy Use Disclosure”) and Lessee agrees to provide Lessor with all such information as Lessor may require in order to satisfy the Energy Disclosure Requirements. Lessee hereby (i) consents to all such Energy Use Disclosures, and (ii) acknowledges that Lessor shall not be required to notify Lessee of any Energy Disclosure Information. Further, Lessee hereby releases Lessor from any and all losses, costs, damages, expenses and liabilities relating to, arising out of and/or resulting from any Energy Use Disclosure. The terms of this Section shall survive the expiration or earlier termination of this Lease. Section 12.23. Waiver of Sections 1932(2) and 1933(4) of the California Code. The Lessor and Lessee hereby waive any rights to remedies under Sections 1932(2) and 1933(4) of the California Civil Code. (Remainder of page left blank intentionally) IN WITNESS WHEREOF, the Lessor and the Lessee have caused this Lease Agreement to be executed in their respective corporate names by their duly authorized officers, all as of the date first above written. 230 SOUTH WATERMAN AVENUE LLC, a California limited liability company, as Lessor By: Lisa Lamb, Authorized Signatory THE HIGH DESERT “PARTNERSHIP IN ACADEMIC EXCELLENCE” FOUNDATION, INCORPORATED, a California nonprofit public benefit corporation, as Lessee By: Sharon Page, Vice Chairman (Lease Agreement – Norton Science and Language Academy, Series 2020) TERMS ACKNOWLEDGED AND ACCEPTED WILMINGTON TRUST, NATIONAL ASSOCIATION, as Trustee By: Authorized Signatory (Lease Agreement – Norton Science and Language Academy, Series 2020) A-1 EXHIBIT A Base Lease Payment Schedule [TO BE PROVIDED] B-1 EXHIBIT B Real Property Description [TO BE PROVIDED] C-1 EXHIBIT C Form of No Default Certificate Date: LESSEE CERTIFICATE TO: WILMINGTON TRUST, NATIONAL ASSOCIATION, AS TRUSTEE (THE “TRUSTEE”), UNDER THE INDENTURE OF TRUST, DATED AS OF JUNE 1, 2020, BY AND BETWEEN THE CALIFORNIA ENTERPRISE DEVELOPMENT AUTHORITY (THE “AUTHORITY”) AND THE TRUSTEE. The undersigned Authorized Representative of the Lessee hereby certifies that (i) a review of the activities of the Lessee during the preceding Fiscal Year of Lessee and Lessee’s performance under the Lessee Documents has been made under his or her supervision; and (ii) he or she is familiar with the provisions of this Lease Agreement and the Tax Regulatory Agreement and, to the best of his or her knowledge, based upon such review and familiarity, the Lessee has fulfilled all of its obligations hereunder and thereunder throughout the Fiscal Year, and that there have been no defaults under this Lease Agreement or the Tax Regulatory Agreement or, if there has been a default in the fulfillment of any such obligation in such Fiscal Year, specifying each such default known to him or her and the nature and the status thereof and the actions taken or being taken to correct such default. THE HIGH DESERT “PARTNERSHIP IN ACADEMIC EXCELLENCE” FOUNDATION, INCORPORATED, a California nonprofit public benefit corporation, as Lessee By: Authorized Representative EXHIBIT D Form of Coverage Ratio Certificate Date: LESSEE CERTIFICATE TO: WILMINGTON TRUST, NATIONAL ASSOCIATION, AS TRUSTEE (THE “TRUSTEE”), UNDER THE INDENTURE OF TRUST, DATED AS OF JUNE 1, 2020, BY AND BETWEEN THE CALIFORNIA ENTERPRISE DEVELOPMENT AUTHORITY (THE “AUTHORITY”) AND THE TRUSTEE. The undersigned Authorized Representative of the Lessee hereby certifies that the Debt Service Coverage Ratio for the period ending [DATE] was _______. THE HIGH DESERT “PARTNERSHIP IN ACADEMIC EXCELLENCE” FOUNDATION, INCORPORATED, a California nonprofit public benefit corporation, as Lessee By: Authorized Representative 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 CITY and COUNTY are the owners of that certain real property legallyA. 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. TENANT desires to lease the Property from LANDLORD for use as aB. 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.” As consideration for the Lease of the Property to TENANT and in lieu ofC. 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. TENANT or an affiliate of TENANT intends to obtain tax-exemptD. 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.” PROPERTY.LANDLORD, in consideration of covenants and conditions1. 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. USE. The Property shall be used only for the Use set forth on the2. 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. TERM.3. Term. The obligations of the Parties pursuant to this Lease shallA. 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. Option to Extend Term. TENANT shall have one (1) option toB. extend the Initial Term of the Lease for twenty (20) years (the “Lease Term Extension Option”) in accordance with the following provisions: TENANT shall have one (1) option to extend the Term as1. 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.” The Monthly Rent for the Property during the initial year of2. 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 by 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.” Effect of Default on Extension Option. If TENANT is in3. 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. CONSIDERATION.4. Rent. In lieu of TENANT’s monetary payment of Monthly Rent forA. 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. Performance by Guarantor. In accordance with the terms of anB. 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. Additional Consideration. As additional consideration for thisC. 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. Late Payment Fees and Interest. If any monthly rent or otherD. 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. LEASEHOLD ENCUMBRANCES5. A. Non-Subordination of Landlord Fee Interest and Head Start Parcel. This Lease and all rights and interests of TENANT 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 encumbered 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 holder shall obtain any greater rights in the Property than the TENANT possesses 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 Wilmington 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 obligations 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..by entering into a new sublease agreement with a duly authorized replacement charter school operator or other lawful educational user, provided that, immediately upon obtaining possession, and until commencement of the new sublease, LENDER covenants and agrees to diligently perform building maintenance and groundskeeping services as necessary to immediately remedy any condition of blight or unsightly appearance in the Charter School Improvements. 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: LANDLORD and TENANT reasonably expect thata. 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. LANDLORD reasonably expects that the Propertyb. (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. LANDLORD agrees to cooperate with TENANT, atc. 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. MAINTENANCE OF PROPERTY.6. TENANT agrees that it shall have the sole responsibility to repairA. 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. Utilities. TENANT agrees that all utilities, including but notB. 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. INSURANCE.7. Basic Insurance Requirements. W ithout in any way affectingA. 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 and 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 apply 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. Required Policy Provisions. Each of the insurance policiesB. 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 insurance 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 COUNTY 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 of 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 determines that any of the required insurance is not available, is unreasonably 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 higher 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. INDEMNIFICATION. TENANT agrees to indemnify, defend (with counsel8. 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, damages, 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 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 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 existence 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 Property. 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 permit 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 which, 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, subject 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 the 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. Hazardous SubstancesA. 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 repair 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 involved 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 trade 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 terminate 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: TENANT’s failure to comply with Section 4.A of the Lease1. or any default of GUARANTOR under the Improvement Agreement. Other than regular (e.g., summer) break periods, vacating2. 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. TENANT’s failure to make any monetary payment of3. 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 continues 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. The failure by TENANT to provide LANDLORD with4. 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. A Default by TENANT as to any other terms, covenants,5. 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. A Default by TENANT as to the terms of any Approved6. Encumbrance, where such Default continues for a period of thirty (30) days or more after written notice thereof by LANDLORD; The occurrence of any of the following events: (a) the7. 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. If the performance of TENANT’s obligations under this8. 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. If the performance of TENANT’s obligations under this9. 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. Remedies.B. Other than as provided in Paragraph A of this Section 18,1. 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. In the event of a Breach of the Lease by TENANT (as2. 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. Except for TENANT’s failure to pay monetary Monthly Rent3. 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. Survival of Indemnity Provisions. The expiration or terminationC. 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. Tenant’s Personal Property. TENANT covenants and agreesD. that immediately upon termination of this Lease, TENANT shall remove and properly 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. No Waiver by Landlord. Receipt of any rent or of any otherE. amounts of money paid by TENANT after the termination and 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 would 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 Court 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 Lease 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 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. 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 into 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 in 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 GUARANTOR 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 THE LAND REFERRED TO HEREIN BELOW IS SITUATED IN THE CITY OF SAN BERNARDINO, IN THE COUNTY OF SAN BERNARDINO, STATE OF CALIFORNIA, AND IS DESCRIBED AS FOLLOWS: PARCEL 1: (APN: 0136-261-24-0-000) [To Be Attached] THAT PORTION OF LOT 3, BLOCK 7, OF RANCHO SAN BERNARDINO, AS PER PLAT RECORDED IN BOOK 7, PAGE 2 OF MAPS, RECORDS OF SAID COUNTY, DESCRIBED AS: BEGINNING AT A POINT ON THE EAST LINE OF SAID LOT 3, DISTANT SOUTH THEREON 20 FEET FROM THE NORTHEAST CORNER OF SAID LOT 3; THENCE WEST PARALLEL WITH THE NORTH LINE OF SAID LOT TO A POINT ON A LINE THAT IS PARALLEL WITH AND DISTANT EAST 693 FEET FROM THE WEST LINE OF LOT 10, SAID BLOCK 7; THENCE SOUTH ALONG SAID PARALLEL LINE TO A POINT ON A LINE THAT IS PARALLEL WITH AND DISTANT NORTH 50 FEET FROM THE SOUTH LINE OF THE NORTH 3 ACRES OF COMBINED LOTS 3 AND 10 OF SAID BLOCK 7; THENCE EAST ALONG SAID PARALLEL LINE TO A POINT ON THE EAST LINE OF SAID LOT 3; THENCE NORTH TO THE POINT OF BEGINNING. EXCEPT THEREFROM THE EAST 8.75 FEET THEREOF AS CONVEYED TO THE CITY OF SAN BERNARDINO BY DEED RECORDED NOVEMBER 27, 1967 AS INSTRUMENT NO. 78, IN BOOK 6930, PAGE 31 OF OFFICIAL RECORDS. EXHIBIT B PARCEL 2: (APN: 0136-261-23-0-000) PROPERTY ALL THAT PORTION OF THE NORTHERLY 3 ACRES OF LOTS 3 AND 10 IN BLOCK 7 OF THE RANCHO SAN BERNARDINO, AS PER PLAT RECORDED IN BOOK 7 OF MAPS, PAGE 2, RECORDS OF SAID COUNTY, Plat EXCEPT THEREFROM THE WESTERLY 528 FEET THEREOF. SAID LAND MORE PARTICULARLY DESCRIBED AS FOLLOWS: BEGINNING AT THE NORTHEAST CORNER OF SAID TRACT; THENCE WEST TO THE NORTHWEST CORNER OF SAID TRACT; THENCE SOUTH ALONG THE WEST LINE OF SAID TRACT TO A POINT 50 FEET NORTH OF THE SOUTH LINE OF SAID TRACT; THENCE EAST 165 FEET; THENCE NORTH TO A POINT 20 FEET SOUTH OF THE NORTH LINE OF SAID TRACT; THENCE EAST TO A POINT ON THE EAST LINE OF SAID TRACT 20 FEET SOUTH OF THE POINT OF BEGINNING; THENCE NORTH TO THE POINT OF BEGINNING. ALSO EXCEPT THE EAST 8.75 FEET OF THE NORTH 20.00 FEET DEEDED TO THE CITY OF SAN BERNARDINO FOR ROAD PURPOSES IN DEED RECORDED MARCH 25, 1968, BOOK 6996, PAGE 793, OFFICIAL RECORDS. PARCEL 3: (APN: 0136-261-25-0-000; 0136-261-26-0-000; 0136-261-27-0-000) THE NORTH 10-1/2 ACRES OF COMBINED LOTS 3, 4, 9 AND 10, BLOCK 7, RANCHO SAN BERNARDINO, IN THE COUNTY OF SAN BERNARDINO, STATE OF CALIFORNIA, AS PER MAP RECORDED IN BOOK 7, PAGE 2 OF MAPS, RECORDS OF SAID COUNTY. EXCEPT THEREFROM THE WEST 150 FEET OF THE NORTH 3 ACRES OF COMBINED LOTS 10 AND 3 OF SAID BLOCK 7. ALSO EXCEPT THEREFROM THE EAST 2 ACRES OF THE SOUTH 5 ACRES OF THE NORTH 10-1/2 ACRES OF SAID COMBINED LOTS 3, 4, 9 AND 10. ALSO EXCEPT THEREFROM THAT PORTION DESCRIBED AS FOLLOWS: BEGINNING AT A POINT 15.95 FEET SOUTH OF THE NORTHWEST CORNER OF LOT 9, OF SAID BLOCK 7, RANCHO SAN BERNARDINO, IN THE CITY OF SAN BERNARDINO, COUNTY OF SAN BERNARDINO, STATE OF CALIFORNIA, AS PER PLAT RECORDED IN BOOK 7, PAGE 2 OF MAPS, RECORDS OF SAID COUNTY; THENCE EASTERLY 135 FEET TO A POINT WHICH IS 16.24 FEET SOUTH OF THE NORTH LINE OF SAID LOT 9; THENCE SOUTH 8.86 FEET; THENCE WEST 135 FEET; THENCE NORTH 9.15 FEET TO THE POINT OF BEGINNING. ALSO EXCEPT THEREFROM THAT PORTION DESCRIBED AS FOLLOWS: BEGINNING AT THE NORTHEAST CORNER OF SAID LOT 3; THENCE WEST ALONG THE NORTH LINE OF SAID LOT 3, A DISTANCE OF 347 FEET, MORE OR LESS, TO A POINT THAT IS 528 FEET EAST OF THE WESTERLY LINE OF SAID LOT 10; THENCE SOUTH PARALLEL WITH LINES OF SAID LOT 10 TO THE NORTHWEST CORNER OF THE LAND CONVEYED TO EDWARD L. FLEMING, ET UX., BY DEED RECORDED JULY 31, 1956 AS INSTRUMENT NO. 202, IN BOOK 4000, PAGE 212 OF OFFICIAL RECORDS OF SAID COUNTY; THENCE EAST ALONG THE NORTH LINE OF SAID FLEMING LAND TO THE NORTHEAST CORNER THEREOF; THENCE NORTH TO THE POINT OF BEGINNING. ALSO EXCEPT THEREFROM THAT PORTION CONVEYED TO THE CITY OF SAN BERNARDINO BY DEED RECORDED FEBRUARY 23, 1968 AS INSTRUMENT NO. 747, IN BOOK 6979, PAGE 975 OF OFFICIAL RECORDS. ALSO EXCEPT THEREFROM THE FOLLOWING: ALL THAT CERTAIN PIECE OR PARCEL OF LAND BEING A PORTION OF LOTS 3, 4, 9 AND 10, BLOCK 7, RANCHO SAN BERNARDINO, IN THE CITY OF SAN BERNARDINO, COUNTY OF SAN BERNARDINO, STATE OF CALIFORNIA, AS PER PLAT RECORDED IN BOOK 7, PAGE 2 OF MAPS, RECORDS OF SAID COUNTY AND BEING DESCRIBED AS FOLLOWS: BEGINNING AT A POINT IN THE EAST LINE OF ALLEN STREET, SAID POINT BEING ALSO IN THE WEST LINE OF LOT 10, BLOCK 7 OF SAID RANCHO SAN BERNARDINO, SAID POINT BEING SOUTH 1149.73 FEET FROM THE SOUTH LINE OF RIALTO AVENUE; THENCE SOUTH ALONG THE EAST LINE OF ALLEN STREET, BEING ALSO ALONG THE WEST LINE OF LOTS 10 AND 9, BLOCK 7 OF RANCHO SAN BERNARDINO, 366.98 FEET TO THE NORTHWEST CORNER OF THE LAND CONVEYED TO ADAR BRANEN, ET UX., BY DEED RECORDED FEBRUARY 28, 1949 AS INSTRUMENT NO. 29, IN BOOK 2366, PAGE 126 OF OFFICIAL RECORDS OF SAID COUNTY; THENCE EASTERLY ALONG THE NORTHERLY LINE OF SAID LAST MENTIONED PROPERTY AND THE EASTERLY PROLONGATION THEREOF 520.39 FEET TO A POINT 347 FEET WEST OF THE WEST OF THE WEST LINE OF WATERMAN AVENUE BEING ALSO THE EAST LINE OF BLOCK 7 OF SAID RANCHO SAN BERNARDINO; THENCE NORTH AND PARALLEL WITH THE WEST LINE OF WATERMAN AVENUE, 366.98 FEET TO THE NORTH LINE OF LOTS 3 AND 10, BLOCK 7, RANCHO SAN BERNARDINO; THENCE WESTERLY ALONG THE NORTH LINE OF SAID LOTS 3 AND 10, 520.89 FEET TO THE POINT OF BEGINNING. ALSO EXCEPT THEREFROM THE FOLLOWING: THE EAST 378 FEET OF THE WEST 528 FEET OF THE NORTHERLY 150 FEET OF LOTS 3 AND 10 IN BLOCK 7 OF RANCHO SAN BERNARDINO, IN THE CITY OF SAN BERNARDINO, AS PER PLAT RECORDED IN BOOK 7, PAGE 2 OF MAPS, RECORDS OF SAID COUNTY. PARCEL 4: (APN: 0136-261-28) THE EAST 2 ACRES OF THE SOUTH 5 ACRES OF THE NORTH 10-1/2 ACRES OF LOTS 3, 4, 9 AND 10 BLOCK 7 OF A 5 ACRE SURVEY OF THE RANCHO SAN BERNARDINO, IN THE CITY OF SAN BERNARDINO, STATE OF CALIFORNIA, AS PER MAP RECORDED IN BOOK 7 PAGES 2 OF MAPS, IN THE OFFICE OF THE COUNTY RECORDER OF SAID COUNTY. EXCEPT THE EAST 7.75 FEET, AS CONVEYED TO THE CITY OF SAN BERNARDINO, A MUNICIPAL CORPORATION, BY DEED RECORDED OCTOBER 11, 1968 IN BOOK 7109, PAGE 502, OFFICIAL RECORDS. ALSO EXCEPT THEREFROM THE INTEREST IN AN UNDIVIDED 1/2 INTEREST IN AND TO THE 10 INCH WELL AND PUMPING PLANT LOCATED ON SAID LAND. PARCEL 5: (APN: 0136-261-41-0-000) THE NORTH 1/2 OF THE FOLLOWING DESCRIBED PROPERTY: THAT PORTION OF LOT 11, BLOCK 7, RANCHO SAN BERNARDINO, IN THE CITY OF SAN BERNARDINO, COUNTY OF SAN BERNARDINO, STATE OF CALIFORNIA, AS PER PLAT RECORDED IN BOOK 7, PAGE 2 OF MAPS, RECORDS OF SAID COUNTY, DESCRIBED AS FOLLOWS: BEGINNING AT A POINT 150 FEET NORTH OF THE SOUTHWEST CORNER OF SAID LOT 11; THENCE NORTH 150 FEET; THENCE EAST 290 FEET; THENCE SOUTH 150 FEET; THENCE WEST 290 FEET TO THE POINT OF BEGINNING. PARCEL 6: (APN: 0136-261-42-0-000) THE SOUTH HALF OF THE FOLLOWING DESCRIBED PROPERTY: THAT PORTION OF LOT 11, BLOCK 7, RANCHO SAN BERNARDINO, IN THE CITY OF SAN BERNARDINO, AS PER PLAT RECORDED IN BOOK 7 OF MAPS, PAGE 2, RECORDS OF SAID COUNTY, DESCRIBED AS FOLLOWS: BEGINNING AT A POINT 150 FEET NORTH OF THE SOUTHWEST CORNER OF SAID LOT 11; THENCE NORTH 150 FEET; THENCE EAST 290 FEET; THENCE SOUTH 150 FEET; THENCE WEST 290 FEET TO THE POINT OF BEGINNING. PARCEL 7-A: (PORTION APN 0136-261-57-0-000) ALL THAT PORTION OF LOT 11, BLOCK 7, RANCHO SAN BERNARDINO, IN THE CITY OF SAN BERNARDINO, COUNTY OF SAN BERNARDINO, STATE OF CALIFORNIA, AS PER MAP RECORDED IN BOOK 7, PAGE 2 OF MAPS, IN THE OFFICE OF THE COUNTY RECORDER OF SAID COUNTY. BEGINNING AT A POINT ON THE CENTER LINE OF IRWIN STREET, AS SHOWN BY MAP OF HEARSH SUBDIVISION, RECORDED IN BOOK 25 OF MAPS, PAGE 62, RECORDS OF SAN BERNARDINO COUNTY, 300 FEET NORTH OF THE SOUTH LINE OF SAID LOT 11; THENCE WEST AT RIGHT ANGLES TO WATERMAN AVENUE, 89.27 FEET, MORE OR LESS, TO A POINT 290 FEET EAST OF THE WEST LINE OF SAID LOT; THENCE AT RIGHT ANGLES SOUTH 75 FEET; THENCE AT RIGHT ANGLES EAST, 89.27 FEET, MORE OR LESS, TO A POINT ON THE SOUTHERLY EXTENSION OF THE CENTER LINE OF SAID IRWIN STREET; THENCE NORTHERLY TO THE POINT OF BEGINNING. PARCEL 7-B: (PORTION APN 0136-261-57-0-000) A PORTION OF LOTS 2 AND 11 IN BLOCK 7 OF RANCHO SAN BERNARDINO, IN THE CITY OF SAN BERNARDINO, COUNTY OF SAN BERNARDINO, STATE OF CALIFORNIA, AS PER MAP RECORDED IN BOOK 7, PAGE 2, OF MAPS, IN THE OFFICE OF THE COUNTY RECORDER OF SAID COUNTY, DESCRIBED AS FOLLOWS: COMMENCING AT A POINT ON THE EAST LINE OF SAID LOT 2, 225 FEET NORTH, OF THE SOUTHEAST CORNER OF SAID LOT 2; THENCE NORTH 75 FEET; THENCE WEST AT RIGHT ANGLES TO A POINT 290 FEET EAST OF THE WEST LINE OF SAID LOT 11; THENCE AT RIGHT ANGLES SOUTH 75 FEET; THENCE AT RIGHT ANGLES EAST TO THE POINT OF BEGINNING. SAVING AND EXCEPTING THE EAST 190 FEET THEREOF. ALSO SAVING AND EXCEPTING THAT PORTION LYING WEST OF THE CENTER LINE OF IRWIN STREET EXTENDING SOUTHERLY. PARCEL 7-C: (PORTION APN 0136-261-57-0-000) A PORTION OF LOT 2, BLOCK 7 OF RANCHO SAN BERNARDINO, IN THE CITY OF SAN BERNARDINO, COUNTY OF SAN BERNARDINO, STATE OF CALIFORNIA, AS PER MAP RECORDED IN BOOK 7, PAGE 2, OF MAPS, IN THE OFFICE OF THE COUNTY RECORDER OF SAID COUNTY, DESCRIBED AS FOLLOWS: COMMENCING AT A POINT ON THE EAST LINE OF SAID LOT 2, 262.5 FEET NORTH OF THE SOUTHEAST CORNER OF SAID LOT 2; THENCE NORTH 37.5 FEET; THENCE, WEST AT RIGHT ANGLES, 90 FEET; THENCE SOUTH AT RIGHT ANGLES 37.5 FEET; THENCE EAST AT RIGHT ANGLES TO THE POINT OF BEGINNING. EXCEPTING THEREFROM THE EAST 8.75 FEET, AS CONVEYED TO THE CITY OF SAN BERNARDINO, A MUNICIPAL CORPORATION, BY DEED RECORDED NOVEMBER 12, 1968 IN BOOK 7128, PAGE 488 OF OFFICIAL RECORDS. PARCEL 7-D: (PORTION APN 0136-261-57-0-000) THAT PORTION OF LOT 2, BLOCK 7, RANCHO SAN BERNARDINO, IN THE CITY OF SAN BERNARDINO, COUNTY OF SAN BERNARDINO, STATE OF CALIFORNIA, AS PER MAP RECORDED IN BOOK 7, PAGE 2, OF MAPS, IN THE OFFICE OF THE COUNTY RECORDER OF SAID COUNTY, MORE PARTICULARLY DESCRIBED AS FOLLOWS: COMMENCING AT A POINT ON THE EAST LINE OF SAID LOT 2, 262-1/2 FEET NORTH OF THE SOUTHEAST CORNER OF SAID LOT 2; THENCE WEST 90 FEET TO THE SOUTHWEST CORNER OF THAT CERTAIN PARCEL OF LAND DEEDED TO WILLIAM ARMSTRONG, ET UX., BY DEED RECORDED AUGUST 10, 1946, AS INSTRUMENT NO. 83. RECORDS OF SAID COUNTY, FOR TRUE POINT OF BEGINNING; THENCE NORTH 37.5 FEET TO THE NORTHWEST CORNER OF SAID ARMSTRONG LAND; THENCE WEST AT RIGHT ANGLES TO A POINT 100 FEET WEST OF THE NORTHWEST CORNER OF SAID ARMSTRONG LAND; THENCE SOUTH 37.5 FEET TO THE NORTHWEST CORNER OF THAT CERTAIN PARCEL OF LAND DEEDED TO RAYBURN L. DIXON, ET UX., BY DEED RECORDED AUGUST 20, 1946, AS INSTRUMENT NO. 48, RECORDS OF SAID COUNTY; THENCE EAST ALONG THE NORTH LINE OF SAID DIXON LAND TO THE POINT OF BEGINNING. PARCEL 7-E: (PORTION APN 0136-261-57-0-000) A PORTION OF LOT 2, BLOCK 7, RANCHO SAN BERNARDINO, IN THE CITY OF SAN BERNARDINO, COUNTY OF SAN BERNARDINO, STATE OF CALIFORNIA, AS PER MAP RECORDED IN BOOK 7, PAGE 2, OF MAPS, IN THE OFFICE OF THE COUNTY RECORDER OF SAID COUNTY, DESCRIBED AS FOLLOWS: COMMENCING AT A POINT ON THE EAST LINE OF SAID LOT 2, 225 FEET NORTH OF THE SOUTHEAST CORNER OF SAID LOT 2; THENCE, NORTH 37.5 FEET; THENCE, WEST AT RIGHT ANGLES TO A POINT 190 FEET WEST OF THE EAST LINE OF SAID LOT 2; THENCE SOUTH AT RIGHT ANGLES 37.5 FEET; THENCE AT RIGHT ANGLES EAST TO THE POINT OF BEGINNING. EXCEPT THEREFROM THAT PROPERTY DEEDED TO THE CITY OF SAN BERNARDINO, BY DEED RECORDED JANUARY 26, 1968, IN BOOK 6965, PAGE 30 OF OFFICIAL RECORDS: DESCRIBED AS FOLLOWS: THE EAST 8.75 FEET OF THE SOUTH 262.50 FEET OF LOT 2, BLOCK 7, RANCHO SAN BERNARDINO, IN THE CITY OF SAN BERNARDINO, COUNTY OF SAN BERNARDINO, STATE OF CALIFORNIA, AS PER MAP RECORDED IN BOOK 7, PAGE 2, OF MAPS, IN THE OFFICE OF THE COUNTY RECORDER OF SAID COUNTY. THE WESTERLY LINE OF SAID EAST 8.75 FEET BEING 50.00 FEET WEST, MEASURED AT RIGHT ANGLES, FROM THE CENTER LINE OF WATERMAN AVENUE, 82.50 FEET WIDE. PARCEL 7-F: (PORTION APN 0136-261-57-0-000) THAT PORTION OF LOTS 2 AND 11, BLOCK 7, RANCHO SAN BERNARDINO, IN THE CITY OF SAN BERNARDINO, COUNTY OF SAN BERNARDINO, STATE OF CALIFORNIA, AS PER MAP RECORDED IN BOOK 7, PAGE 2, OF MAPS, IN THE OFFICE OF THE COUNTY RECORDER OF SAID COUNTY, DESCRIBED AS FOLLOWS: BEGINNING AT THE SOUTHEAST CORNER OF SAID LOT 2; THENCE NORTH 225 FEET; THENCE WEST TO A POINT ON THE SOUTHERLY PROLONGATION OF THE CENTERLINE OF IRWIN STREET AS SHOWN ON THE MAP OF HEARSH SUBDIVISION, AS PER MAP RECORDED IN BOOK 24 OF MAPS, PAGE 62, RECORDS OF SAID COUNTY; AND 225 FEET NORTH OF THE SOUTH LINE OF SAID LOT 11; THENCE SOUTH ALONG SAID SOUTHERLY PROLONGATION OF CENTER LINE OF IRWIN STREET, 225 FEET TO POINT ON SOUTH LINE OF SAID LOT 11; THENCE EAST TO THE POINT OF BEGINNING. EXCEPT THEREFROM THAT PROPERTY DEEDED TO THE CITY OF SAN BERNARDINO, BY DEED RECORDED JANUARY 26, 1968, IN BOOK 6965, PAGE 30 OF OFFICIAL RECORDS: DESCRIBED AS FOLLOWS: THE EAST 8.75 FEET OF THE SOUTH 262.50 FEET OF LOT 2, BLOCK 7, RANCHO SAN BERNARDINO, IN THE CITY OF SAN BERNARDINO, COUNTY OF SAN BERNARDINO, STATE OF CALIFORNIA, AS PER MAP RECORDED IN BOOK 7, PAGE 2, OF MAPS, IN THE OFFICE OF THE COUNTY RECORDER OF SAID COUNTY. THE WESTERLY LINE OF SAID EAST 8.75 FEET BEING 50.00 FEET WEST, MEASURED AT RIGHT ANGLES, FROM THE CENTER LINE OF WATERMAN AVENUE, 82.50 FEET WIDE. PARCEL 7-G: (PORTION APN 0136-261-57-0-000) THAT PORTION OF LOT 11, BLOCK 7, RANCHO SAN BERNARDINO, IN THE CITY OF SAN BERNARDINO, COUNTY OF SAN BERNARDINO, STATE OF CALIFORNIA, AS PER MAP RECORDED IN BOOK 7, PAGE 2, OF MAPS, IN THE OFFICE OF THE COUNTY RECORDER OF SAID COUNTY, DESCRIBED AS FOLLOWS: BEGINNING AT THE INTERSECTION OF THE SOUTHERLY PROLONGATION OF THE CENTER LINE OF IRWIN STREET, AS SHOWN ON MAP OF HEARSH SUBDIVISION, IN THE CITY OF SAN BERNARDINO, COUNTY OF SAN BERNARDINO, STATE OF CALIFORNIA, AS PER MAP RECORDED IN BOOK 24, PAGE 62, OF MAPS, IN THE OFFICE OF THE COUNTY RECORDER OF SAID COUNTY, WITH THE NORTH LINE OF THE SOUTH 100 FEET OF SAID LOT 11; THENCE SOUTH 100 FEET ALONG SAID PROLONGED CENTER LINE TO THE SOUTH LINE OF SAID LOT; THENCE WEST ALONG SAID SOUTH LINE TO A POINT 290 FEET EAST OF THE SOUTHWEST CORNER OF SAID LOT; THENCE NORTH 100 FEET PARALLEL WITH THE WEST LINE OF SAID LOT; THENCE EAST TO THE POINT OF BEGINNING. PARCEL 7-H: (PORTION APN 0136-261-57-0-000) THE NORTH 50 FEET OF THAT PORTION OF LOT 11, BLOCK 7, RANCHO SAN BERNARDINO, IN THE CITY OF SAN BERNARDINO, COUNTY OF SAN BERNARDINO, STATE OF CALIFORNIA, AS PER MAP RECORDED IN BOOK 7, PAGE 2, OF MAPS, IN THE OFFICE OF THE COUNTY RECORDER OF SAID COUNTY, DESCRIBED AS FOLLOWS: BEGINNING AT THE SOUTHWEST CORNER OF SAID LOT 11; THENCE NORTH 150 FEET; THENCE EAST 290 FEET; THENCE SOUTH 150 FEET; THENCE WEST 290 FEET TO THE POINT OF BEGINNING. PARCEL 7-I: (PORTION APN 0136-261-57-0-000) THAT PORTION OF LOT 11, BLOCK 7 OF RANCHO SAN BERNARDINO, IN THE CITY OF SAN BERNARDINO, COUNTY OF SAN BERNARDINO, STATE OF CALIFORNIA, AS PER MAP RECORDED IN BOOK 7, PAGE 2, OF MAPS, IN THE OFFICE OF THE COUNTY RECORDER OF SAID COUNTY, DESCRIBED AS FOLLOWS: BEGINNING AT THE INTERSECTION OF THE SOUTHERLY PROLONGATION OF THE CENTER LINE OF IRWIN STREET AS SHOWN ON MAP OF HEARSH SUBDIVISION, IN THE CITY OF SAN BERNARDINO, COUNTY OF SAN BERNARDINO, STATE OF CALIFORNIA, AS PER MAP RECORDED IN BOOK 24, PAGE 62, OF MAPS, IN THE OFFICE OF THE COUNTY RECORDER OF SAID COUNTY, WITH THE NORTH LINE OF THE SOUTH 225 FEET OF SAID LOT 11; THENCE SOUTH ALONG SAID PROLONGED CENTER LINE 125 FEET; THENCE WEST TO A POINT 290 FEET EAST OF THE WEST LINE OF SAID LOT 11, THENCE NORTH PARALLEL WITH THE WEST LINE OF SAID LOT 11, 125 FEET; THENCE EAST TO THE POINT OF BEGINNING. PARCEL 8: (APN: 0136-261-43-0-000) THAT PORTION OF LOT 11, BLOCK 7, RANCHO SAN BERNARDINO, IN THE CITY OF SAN BERNARDINO, COUNTY OF SAN BERNARDINO, STATE OF CALIFORNIA, AS PER PLAT RECORDED IN BOOK 7 OF MAPS, PAGE 2, IN THE OFFICE OF THE COUNTY RECORDER OF SAID COUNTY DESCRIBED AS FOLLOWS: BEGINNING AT THE SOUTHWEST CORNER OF SAID LOT 11; THENCE NORTH 150 FEET; THENCE EAST 290 FEET; THENCE SOUTH 150 FEET; THENCE WEST 290 FEET TO THE POINT OF BEGINNING. EXCEPT THE NORTH 50 FEET THEREOF AS DESCRIBED IN DEED RECORDED FEBRUARY 10, 1955 IN BOOK 3565, PAGE 240 OFFICIAL RECORDS. ALSO EXCEPT THE SOUTH 50 FEET THEREOF AS DESCRIBED IN DEED RECORDED MAY 13, 1963 IN BOOK 5907, PAGE 666 OFFICIAL RECORDS. PARCEL 9: (APN: 0136-261-44-0-000) THAT PORTION OF LOTS 11, BLOCK 7, RANCHO SAN BERNARDINO, IN THE CITY OF SAN BERNARDINO, COUNTY OF SAN BERNARDINO, STATE OF CALIFORNIA, AS PER MAP RECORDED IN BOOK 7 PAGES 2, OF MAPS, IN THE OFFICE OF THE COUNTY RECORDER OF SAID COUNTY. BEGINNING AT THE SOUTHWEST CORNER OF SAID LOT 11; THENCE NORTH 50 FEET; THENCE EAST 290 FEET; THENCE SOUTH 50 FEET; THENCE WEST 290 FEET, TO THE POINT OF BEGINNING. PARCEL 10: (APN: 136-261-37-0-000) THE WEST 528 FEET OF THE NORTHERLY 3 ACRES OF LOTS 3 AND 10, IN BLOCK 7, OF THE RANCHO SAN BERNARDINO, COUNTY OF SAN BERNARDINO, STATE OF CALIFORNIA, AS PER PLAT RECORDED IN BOOK 7 OF MAPS, PAGE 2, RECORDS OF SAID COUNTY. EXCEPT THE EAST 378 FEET OF SAID WEST 528 FEET. PARCEL 11: (APNS 0136-261-11 AND 0136-261-50): ALL THAT CERTAIN PIECE OF PARCEL OF LAND BEING A PORTION OF LOTS 3, 4, 9 AND 10, BLOCK 7, RANCHO SAN BERNARDINO, IN THE CITY OF SAN BERNARDINO, COUNTY OF SAN BERNARDINO, STATE OF CALIFORNIA, AS PER PLAT RECORDED IN BOOK 7 OF MAPS, PAGE 2, RECORDS OF SAID COUNTY AND BEING DESCRIBED AS FOLLOWS: BEGINNING AT A POINT IN THE EAST LINE OF ALLEN STREET SAID POINT BEING ALSO IN THE WEST LINE OF LOT 10, BLOCK 7 OF SAID RANCHO SAN BERNARDINO, SAID POINT BEING SOUTH 1149.73 FEET FROM THE SOUTH LINE OF RIALTO AVENUE; THENCE SOUTH ALONG THE EAST LINE OF ALLEN STREET, BEING ALSO ALONG THE WEST LINE OF LOTS 10 AND 9, BLOCK 7 OF RANCHO SAN BERNARDINO, 366.98 FEET TO THE NORTHWEST CORNER OF THE LAND CONVEYED TO ADAR BRANAN ET UX BY DEED RECORDED FEBRUARY 28, 1949 IN BOOK 2366, PAGE 126 OF OFFICIAL RECORDS OF SAID COUNTY; THENCE EASTERLY ALONG THE NORTHERLY LINE OF SAID LAST MENTIONED PROPERTY AND THE EASTERLY PROLONGATION THEREOF 520.39 FEET TO A POINT 347 FEET WEST OF THE WEST OF THE WEST LINE OF WATERMAN AVENUE BEING ALSO THE EAST LINE OF BLOCK 7, OF SAID RANCHO SAN BERNARDINO; THENCE NORTH AND PARALLEL WITH THE WEST LINE OF WATERMAN AVENUE, 366.98 FEET TO THE NORTH LINE OF LOTS 3 AND 10 BLOCK 7, RANCHO SAN BERNARDINO; THENCE WESTERLY ALONG THE NORTHERLY LINE OF SAID LOTS 3 AND 10, 520.89 FEET TO THE POINT OF BEGINNING. EXCEPT THEREFROM THAT PORTION DESCRIBED AS FOLLOWS: BEGINNING AT A POINT 15.95 FEET SOUTH OF THE NORTHWEST CORNER OF LOT 9, OF SAID BLOCK 7, RANCHO SAN BERNARDINO, IN THE CITY OF SAN BERNARDINO, COUNTY OF SAN BERNARDINO, STATE OF CALIFORNIA, AS PER PLAT RECORDED IN BOOK 7 OF MAPS, PAGE 2 RECORDS OF SAID COUNTY; THENCE EASTERLY 135 FEET TO A POINT WHICH IS 16.24 FEET SOUTH OF THE NORTH LINE OF SAID LOT 9; THENCE SOUTH 8.86 FEET; THENCE WEST 135 FEET; THENCE NORTH 9.15 FEET TO THE POINT OF BEGINNING. PARCEL 12 (APN: 0136-261-36): THE EAST 378 FEET OF THE WEST 528 FEET OF THE NORTHERLY 150 FEET OF LOTS 3 AND 10 IN BLOCK 7 OF RANCHO SAN BERNARDINO, IN THE CITY OF SAN BERNARDINO, AS PER PLAT RECORDED IN BOOK 7 OF MAPS, PAGE 2 RECORDS OF SAID COUNTY. PARCEL 13: (APN: 0136-261-29) THE EAST 2 ACRES OF THE SOUTH 5 ACRES OF THE NORTH 15.50 ACRES OF LOTS 3, 4, 9 AND 10 BLOCK 7, RANCHO SAN BERNARDINO, IN THE CITY OF SAN BERNARDINO, COUNTY OF SAN BERNARDINO, STATE OF CALIFORNIA, AS PER PLAT RECORDED IN BOOK 7, PAGE 2, RECORDS OF SAID COUNTY. EXCEPTING THEREFROM ANY PORTION OF THE ABOVE DESCRIBED PROPERTY LYING WITHIN THE SOUTH 2.25 ACRES OF LOT 4, OR WITHIN THE SOUTH 2.25 ACRES OF LOT 9, IN SAID BLOCK 7. ALSO EXCEPTING THEREFROM THAT PORTION CONVEYED TO THE CITY OF SAN BERNARDINO, BY DEED RECORDED JULY 16, 1968 AS INSTRUMENT NO. 400, IN BOOK 7060, PAGE 355, OFFICIAL RECORDS. SAID LAND IS ALSO SHOWN ON LICENSED LAND SURVEYORS MAP FILED IN BOOK 36, PAGE 4, RECORDS OF SURVEY. EXCEPTING THEREFROM ALL OF THE FOLLOWING DESCRIBED PROPERTY: (APN: 0136-261-41-0-000, APN: 0136-261-42-0-000, APN: 0136-261-43-0-000, PORTION APN 0136-261-44-0-000 & PORTION APN 0136-261-57-0-000) ALL OF PARCELS 5, 6, & 8, AND PORTIONS OF PARCELS 7 & 9 DESCRIBED AS: THAT PORTION OF LOT 11, BLOCK 7, RANCHO SAN BERNARDINO, IN THE CITY OF SAN BERNARDINO, COUNTY OF SAN BERNARDINO, STATE OF CALIFORNIA, AS PER PLAT RECORDED IN BOOK 7, PAGE 2 OF MAPS, RECORDS OF SAID COUNTY, CONTAINING 2.23 ACRES AND DESCRIBED AS FOLLOWS: BEGINNING AT THE NORTHWEST CORNER OF HEREINABOVE DESCRIBED PARCEL 5, ALSO BEING A POINT ON THE EASTERLY RIGHT-OF-WAY OF ALLEN STREET (41.25 FOOT HALF-WIDTH) AND THE WESTERLY LINE OF SAID LOT 11; THENCE ALONG THE NORTHERLY LINE OF SAID PARCEL 5, NORTH 89°31’12” EAST (RECORD - EAST) 352.27 FEET; THENCE LEAVING SAID NORTHERLY LINE, SOUTH 00°29’57” EAST 275.24 FEET; THENCE SOUTH 89°30’03 WEST 352.27 FEET TO SAID EASTERLY RIGHT-OF-WAY OF ALLEN STREET; THENCE ALONG SAID RIGHT-OF-WAY, NORTH 00°29’57” WEST 275.36 FEET TO THE POINT OF BEGINNING. 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 April , 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 full, 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.by entering into a new sublease agreement with a duly authorized replacement charter school operator or other lawful educational user, provided that, immediately upon obtaining possession, and until commencement of the new sublease, LENDER covenants and agrees to diligently perform building maintenance and groundskeeping services as necessary to immediately remedy any condition of blight or unsightly appearance in the Charter School Improvements.. 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 claim 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 City and County, collectively as landlord (“Landlord”), and 230 SouthA. 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. Guarantor operates two public charter schools, the Norton Science andB. 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”). As a condition to entering into the Lease, Landlord has required thatC. Guarantor execute and deliver to Landlord this Guaranty. In addition to this Guaranty, as TENANT’s consideration for the Lease,D. 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 alteration 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 Guaranty 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, the 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 any 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 SUBLEASE AGREEMENT by and between 230 SOUTH WATERMAN AVENUE LLC as Lessor and THE HIGH DESERT “PARTNERSHIP IN ACADEMIC EXCELLENCE” FOUNDATION, INCORPORATED as Lessee Dated as of June 1, 2020 Pursuant to the Loan Agreement (as defined herein), the Lessor has granted, bargained, sold, alienated, pledged, set over and confirmed to the Authority (as defined herein) all rights and interests of the Lessor in this Lease Agreement, except for the Lessor’s Unassigned Rights (as defined herein). TABLE OF CONTENTS Page ARTICLE I DEFINITIONS 2 ARTICLE II REPRESENTATIONS 13 Section 2.01.Representations by Lessor 13 Section 2.02.Representations by Lessee 16 Section 2.03.Lessee’s Tax Covenants 19 Section 2.04.Lessee’s Covenant to Comply With Charter School Act 20 ARTICLE III TERM OF AGREEMENT 20 ARTICLE IV GROUND LEASE 21 ARTICLE V PAYMENT PROVISIONS 21 Section 5.01.Lease Payments; Limited Obligation 21 Section 5.02.Base Lease Payments, Additional Lease Payments and Other Amounts Payable 21 Section 5.03.Manner of Payment 22 Section 5.04.Pledge by Lessee 22 ARTICLE VI MAINTENANCE, TAXES AND INSURANCE 23 Section 6.01.Maintenance and Modifications of Facilities By Lessee 23 Section 6.02.Taxes, Other Governmental Charges and Utility Charges 23 Section 6.03.Insurance Required 24 Section 6.04.Application of Net Proceeds of Insurance 26 Section 6.05.Advances by Trustee 26 Section 6.06.Environmental Indemnity 26 Section 6.07.Environmental Covenants 28 Section 6.08.Additional Environmental Provisions 30 ARTICLE VII DAMAGE, DESTRUCTION AND CONDEMNATION 31 Section 7.01.Damage, Destruction and Condemnation 31 Section 7.02.Treatment of Net Proceeds 32 Section 7.03.Continuation of Operations in Event of Casualty 32 ARTICLE VIII SPECIAL COVENANTS 32 Section 8.01.Annual Budget 32 Section 8.02.Consolidation, Merger, Sale or Conveyance 32 Section 8.03.Further Assurances 33 Section 8.04.Audits 33 Section 8.05.Books and Records; Compliance with Continuing Disclosure Agreement 33 Section 8.06.Indemnification 34 Section 8.07.Authority of Authorized Representative of Lessee 36 Section 8.08.Authority of Authorized Representative of Lessor 36 Section 8.09.Licenses and Qualifications 36 Section 8.10.Right to Inspect 36 Section 8.11.Assignment and Subleasing 37 Section 8.12.Prohibited Use 37 Section 8.13.Limitations on Incurrence of Additional Indebtedness 37 Section 8.14.Operating Leases 42 Section 8.15.Covenant to Comply with Indenture and Loan Agreement 42 Section 8.16.Liens 42 Section 8.17.Lease Blocked Account Agreement 42 Section 8.18.Days Cash on Hand 42 Section 8.19.Coverage Ratio 43 Section 8.20.Subordination 44 Section 8.21.Investor Call 44 Section 8.22.Subordination of Support Office Service Fees 44 ARTICLE IX ASSIGNMENT AND PLEDGE BY LESSOR 45 ARTICLE X EVENTS OF DEFAULT AND REMEDIES 45 Section 10.01.Events of Default 45 Section 10.02.Remedies On Default 47 Section 10.03.No Remedy Exclusive 48 Section 10.04.Agreement to Pay Attorneys’ Fees and Expenses 49 Section 10.05.Waiver 49 Section 10.06.Treatment of Funds in Bankruptcy 49 ARTICLE XI [RESERVED]50 ARTICLE XII MISCELLANEOUS 50 Section 12.01.Notices 50 Section 12.02.Binding Effect 51 Section 12.03.Severability 51 Section 12.04.Third Party Beneficiaries 51 Section 12.05.Net Lease 51 Section 12.06.Amendments, Changes And Modifications 51 Section 12.07.Execution in Counterparts 52 Section 12.08.Governing Law 52 Section 12.09.Filing 52 Section 12.10.Cancellation at Expiration of Lease Term 52 Section 12.11.No Pecuniary Liability of Authority 52 Section 12.12.No Personal Liability of Officials of Lessee, Lessor, Authority or Trustee 52 Section 12.13.No Warranty by Lessor 53 Section 12.14.Prior Agreements Superseded 53 Section 12.15.Covenant by Lessee With Respect to Statements, Representations and Warranties 53 Section 12.16.Captions 53 Section 12.17.Lease Payments Due on Holidays 54 Section 12.18.Provision of General Application 54 Section 12.19.Survival 54 Section 12.20.Notice of Change in Fact 54 Section 12.21.CASp Disclosure 54 Section 12.22.Energy Use Disclosure Program 55 Section 12.23.Waiver of Sections 1932(2) and 1933(4) of the California Code 55 EXHIBIT A Base Lease Payment Schedule 1 EXHIBIT B Real Property Description 1 EXHIBIT C Form of No Default Certificate 1 EXHIBIT D Form of Coverage Ratio Certificate 1 ii SUBLEASE AGREEMENT THIS SUBLEASE AGREEMENT, dated as of June 1, 2020 (this “Lease Agreement”), is by and between 230 SOUTH WATERMAN AVENUE LLC, a California limited liability company (the “Lessor”), and THE HIGH DESERT “PARTNERSHIP IN ACADEMIC EXCELLENCE” FOUNDATION, INCORPORATED (“Lessee”), a California nonprofit public benefit corporation designated as an organization described in Section 501(c)(3) of the Internal Revenue Code of 1986 (the “Code”) and authorized to operate charter schools by the State of California (the “State”). W I T N E S S E T H: WHEREAS, the California Enterprise Development Authority (the “Authority”) is authorized pursuant to the provisions of Article 1 through 4 (commencing with Section 6500) of Chapter 5 of Division 7 of Title 1 of the Government Code of the State of California, as amended (the “Act”), to issue its revenue bonds for the purpose of financing the acquisition, renovation, improvement, furnishing and equipping of the Series 2020 Project (as hereinafter defined); and WHEREAS, the Lessee has requested the assistance of the Authority in financing or refinancing the acquisition, renovation, improvement, furnishing and equipping of land and charter school facilities located at 230 South Waterman Avenue, San Bernardino, California 92408, and operated by the Lessee as the charter school known as Norton Science and Language Academy; and WHEREAS, the Authority has determined to assist the Lessee by issuing its $[PARA] Charter School Revenue Bonds (Norton Science and Language Academy Project), Tax-Exempt Series 2020A (the “Series 2020A Bonds”), and its $[PARB] Charter School Revenue Bonds (Norton Science and Language Academy Project), Taxable Series 2020B (the “Series 2020B Bonds” and, together with the Series 2020A Bonds, the “Series 2020 Bonds”) pursuant to an Indenture of Trust dated as of June 1, 2020 (the “Indenture”), by and between the Authority and Wilmington Trust, National Association, as trustee (the “Trustee”), in order to make one or more loans to the Lessor pursuant to the Loan Agreement (as defined herein) for purposes of (i) financing or refinancing the costs of the acquisition, renovation, improvement, furnishing and equipping of land and charter school facilities to be leased to the Lessee for use as Norton Science and Language Academy (the “School”) and located at 230 South Waterman Avenue, San Bernardino, California (the “Series 2020 Facilities”); (ii) funding a debt service reserve fund for the Series 2020 Bonds; and (iii) paying certain expenses incurred in connection with the issuance of the Series 2020 Bonds (collectively, the “Series 2020 Project”); and WHEREAS, the Lessee is authorized pursuant to Part 26.8 of Division 4 of Title II of the Education Code of the State of California (the “Charter School Act”), to lease facilities for the purpose of operating its charter schools; and WHEREAS, the Lessor proposes to lease to the Lessee and the Lessee desires to lease from the Lessor the Leased Property, upon the terms and conditions hereinafter set forth in this Lease Agreement. NOW, THEREFORE, for and in consideration of the premises and the mutual covenants hereinafter contained, the parties hereto formally covenant, agree and bind themselves as follows: ARTICLE I DEFINITIONS All terms defined in Article I of the Indenture and not otherwise defined herein shall have the same meaning in this Lease Agreement. In addition, the following terms, except where the context indicates otherwise, shall have the respective meanings set forth below: “Accountant” means any independent certified public accounting firm licensed to practice in the State (which may be the firm of accountants that regularly audits the books and accounts of the Lessee) from time to time selected by the Lessee. “Actual Annual Debt Service” means the principal and interest payment requirements with respect to all Indebtedness for the Fiscal Year being tested. “Actual Annual Lease Payments” means the actual amount of Base Lease Payments to be paid hereunder with respect the Fiscal Year being tested. “Additional Lease Payments” means the cost of the (a) reasonable expenses of the Authority related to the performance of the provisions of the Loan Agreement, or otherwise incurred at the request of the Lessee, including but not limited to the fees and expenses described in Section 5.01(e), (f), (h) and (i) of the Loan Agreement, (b) the reasonable expenses and fees of the Trustee, the Custodian, the Dissemination Agent and Rebate Analyst and any amounts required to be deposited and replenished in the Rebate Fund, (c) any amounts required to be deposited and replenished in the Debt Service Reserve Fund, (d) any amounts required to be deposited to and replenished in the Repair and Replacement Fund, and (e) other charges and costs (together with all interest and penalties that may accrue thereon) in the event that the Lessee shall fail to pay the same, as specifically set forth herein which the Lessee assumes or agrees to pay hereunder. Additional Lease Payments do not include Base Lease Payments. “Administrative Services Agreement” means any agreement between the Lessee and a charter school, including charter schools operated or managed by the Lessee, pursuant to which the Lessee provides administrative or support services. “Annual Administration Fees” means any annual fees of the Trustee related to the Bonds, annual fees of the Dissemination Agent under the Continuing Disclosure Agreement, and the Authority Annual Fee (as defined in the Indenture). 2 “Authorized Representative” means, (a) in the case of the Lessor, the Chair, Vice Chairman, President or Secretary of its sole member or any other person designated as such by a statement of the Lessor or its sole member signed by one of the foregoing officers and filed with the Trustee, acting on behalf of the Lessor and, when used with reference to the performance of any act, the discharge of any duty or the execution of any certificate or other document, any officer, employee or other person authorized to perform such act, discharge such duty or execute such certificate or other document and (b) in the case of the Lessee, the Chair, Vice Chairman or Secretary of the Lessee or any other person designated as such by a statement of the Lessee signed by one of the foregoing officers and filed with the Trustee and, when used with reference to the performance of any act, the discharge of any duty or the execution of any certificate or other document, any officer, employee or other person authorized to perform such act, discharge such duty or execute such certificate or other document. “Balloon Amount” means the largest amount maturing on any Balloon Indebtedness during any twelve consecutive months in which such Balloon Indebtedness is outstanding. “Balloon Indebtedness” means Long-Term Indebtedness where the principal of (and premium, if any) and interest and other debt service charges on such Long-Term Indebtedness due (or payable in respect of any required purchase of such Long-Term Indebtedness by such person on demand) in any fiscal year either are equal to at least 25% of the total principal of (any premium, if any) and interest and other debt service charges on such Long-Term Indebtedness. Balloon Indebtedness does not include Indebtedness which otherwise would be classified as Put Indebtedness. “Base Lease Payment Date” means each Business Day on which the Lessee is required to make the Base Lease Payments pursuant to the schedule attached hereto as Exhibit A. “Base Lease Payments” means the payments payable by the Lessee during the Lease Term as set forth in Exhibit A, as such Exhibit A may be amended hereunder from time to time, which constitute the payments payable by the Lessee for and in consideration of the right to use the Facilities during the Lease Term. “Bond Proceeds of a Series” means all amounts actually or constructively received from the sale of the related Series of Tax-Exempt Bonds (including underwriters’ discount or compensation, but excluding pre-issuance accrued interest), plus all investment earnings thereon. “Capital Improvements” means the acquisition of land, easements, facilities, and equipment (other than ordinary repairs and replacements), and the construction or reconstruction of improvements, betterments, and extensions which, under Generally Accepted Accounting Principles as prescribed by the Governmental Accounting Standards Board, are properly chargeable as capital items. “Charter School Contract” means, collectively, the charter contract entered into pursuant to the Charter School Act by and between the Lessee and [________], with a term 3 from June 1, [____] through and including June 30, [____], and any subsequent renewal thereof, as amended and modified from time to time. “Commitment Indebtedness” means the obligation of any Person to repay amounts disbursed pursuant to a commitment from a Qualified Provider to pay, refinance or purchase when due, when tendered or when required to be purchased or tendered, or to extend funds for such purpose, other Indebtedness of such Person or any other obligation of any other Person, and the obligation of any Person to pay interest payable on amounts disbursed for such purposes, plus any fees, costs or expenses payable to such Qualified Provider for, under or in connection with such commitment, in the event of disbursement pursuant to such commitment or in connection with enforcement thereof, including without limitation any penalties payable in the event of such enforcement and any indemnification, if enforceable, or contribution obligation related thereto. “Completion Indebtedness” means any Long-Term Indebtedness incurred by any Person for the purpose of financing the completion of Capital Improvements, for which such Long- Term Indebtedness was incurred under the Indenture, to the extent necessary to provide for completion of the Capital Improvements in substantially the same type and scope contemplated at the time that such Long-Term Indebtedness was incurred. Completion Indebtedness may also finance interest on the Completion Indebtedness for a period up to three years from the date of issuance thereof, any reserve funds related to such Completion Indebtedness and the costs and expenses of issuing such Completion Indebtedness. “Continuing Disclosure Agreement” means the Continuing Disclosure Agreement dated as of June 1, 2020, by and among the Lessee, the Borrower and the Dissemination Agent, as may be amended, supplemented or restated from time to time. “County” means the County of San Bernardino, California. “Coverage Ratio” means the ratio obtained by dividing (i) Net Income Available for Lease Payments for the Fiscal Year being tested by (ii) the sum (without duplication) of Actual Annual Lease Payments and Actual Annual Debt Service (which Actual Annual Debt Service shall not include any payments with respect to the Series 2020 Bonds); provided, however, for the purposes of Subsection 8.13(b) herein, “Coverage Ratio” means the ratio obtained by dividing (i) Net Income Available for Lease Payments for the Fiscal Year being tested by (ii) the sum (without duplication) of Maximum Annual Lease Payments and Maximum Annual Debt Service (which Maximum Annual Debt Service shall not include any payments with respect to the Series 2020 Bonds). “Custodian” means Wilmington Trust, National Association, as custodian under the Lease Blocked Account Agreement. “Days Cash on Hand” means as of any date of determination, the product of 365 times a fraction, (i) the numerator of which is the sum of (a) the aggregate amount of School’s unrestricted cash and unrestricted investments and board designated funds that are not otherwise restricted (either permanently or temporarily) as to their use for payment of total Operating Expenses as of such date of determination and (b) amounts on deposit in the Repair 4 and Replacement Fund and, (ii) the denominator of which is total Operating Expenses, in each case, for the period of four fiscal quarters ended on the date of determination, and determined in accordance with Generally Accepted Accounting Principles. “Days Cash on Hand Requirement” means for the Fiscal Year ending June 30, 2020, and for each Fiscal Year thereafter, 45 Days Cash on Hand. “Debt Service” means the Principal and Interest Requirements on Indebtedness, for the period of time for which calculated, excluding Non-Recourse Indebtedness and Subordinated Indebtedness; provided, however, that for purposes of calculating such amount, principal and interest shall be excluded from the determination of Debt Service if amounts have been deposited in trust, escrowed or otherwise set aside with the Trustee for the payment thereof. “Dissemination Agent” means Urban Futures, Inc., or another dissemination agent appointed pursuant to the Continuing Disclosure Agreement. “Electronic Means” means telecopy, facsimile transmission, email transmission or other similar electronic means of communication providing evidence of transmission. “Environmental Damages” means all claims, judgments, damages, losses, penalties, fines, Liabilities (including strict liability), encumbrances, Liens (as defined in the Indenture), privileges, costs, and expenses of investigation and defense of any claim, whether or not such claim is ultimately defeated, and of any good faith settlement or judgment, of whatever kind or nature, contingent or otherwise, matured or unmatured, foreseeable or unforeseeable, including without limitation reasonable attorneys’ fees and expert consultants’ fees and disbursements, any of which are incurred at any time as a result of the existence of Regulated Chemicals upon, about, beneath or migrating, or threatening to migrate, onto or from the Facilities, or the existence of a violation of Environmental Requirements pertaining to the Facilities, regardless of whether or not such Environmental Damages were caused by or within the control of the Lessee. “Environmental Law” means the Comprehensive Environmental Response, Compensation and Liability Act of 1976, 42 U.S.C. §§ 6901 et seq., Comprehensive Environmental Response, Compensation and Liability Act of 1980, as amended by SARA, 42 U.S.C. §§ 1820 et seq., the Hazardous Materials Transportation Act, 49 U.S.C. §§ 1810 et seq., the Toxic Substances Control Act, 15 U.S.C. §§ 2601 et seq., the Resource Conservation and Recovery Act, as amended, 42 U.S.C. 9601 et seq.; the Clean Water Act, 33 U.S.C. §§ 1251 et seq. and the Clean Air Act, 42 U.S.C. §§ 7412 et seq., and any other applicable federal or State laws pertaining to the protection of the environment, as any such laws may be amended, modified or supplemented and any regulations promulgated pursuant to any of the foregoing. “Environmental Report” means any Environmental Assessment, Tests (each as defined in Section 6.08 herein), or other environmental report or audit conducted at the Facilities for any reason. “Environmental Requirements” means all applicable federal, State, regional or local laws, statutes, rules, regulations or ordinances, concerning public health, safety or the 5 environment, including, but not limited to, the Comprehensive Environmental Response, Compensation, and Liability Act of 1980, as amended by the Superfund Amendments and Reauthorization Act of 1986, 42 U.S.C. §9601, et seq., the Solid Waste Disposal Act, as amended by the Resource Conservation and Recovery Act of 1976, as amended by the Solid and Hazardous Waste Amendments of 1984, 42 U.S.C. §6901, et seq., the Federal Water Pollution Control Act, as amended by the Clean Water Act of 1977, 33 U.S.C. § 1251, et seq., the Toxic Substances Control Act of 1976, 15 U.S.C. §2601, et seq., the Emergency Planning and Community Right-To-Know Act of 1986, 42 U.S.C. §11001, et seq., the Clean Air Act of 1966, as amended, 42 U.S.C. §7401, et seq., the National Environmental Policy Act of 1975, 42 U.S.C. §4321, the Rivers and Harbors Act of 1899, 33 U.S.C. §401 et seq., the Endangered Species Act of 1973, as amended 16 U.S.C. §1531, et seq., the Occupational Safety and Health Act of 1970, as amended, 29 U.S.C. §651, et. seq., the Safe Drinking Water Act of 1974, as amended 42 U.S.C. §300(f), et seq., and all rules, regulations, policies and guidance documents promulgated or published thereunder, and any State, regional, county or local statute, law, rule, regulation or ordinance relating to public health, safety or the environment, including, without limitation those relating to: releases, discharges, emissions or disposals to air, water, land or(a) groundwater; the withdrawal or use of groundwater;(b) the use, handling, or disposal of polychlorinated biphenyls (“PCBs”),(c) asbestos or urea formaldehyde; the transportation, treatment, storage, disposal, release or management of(d) hazardous substances or materials (including, without limitation, petroleum, its derivatives, by-products or other hydrocarbons), and any other solid, liquid, or gaseous substance, exposure to which is prohibited, limited or regulated, or may or could pose a hazard to the health and safety of the occupants of the Facilities or any property adjacent to or surrounding the Facilities; the exposure of persons to toxic, hazardous; or other controlled,(e) prohibited or regulated substances; and any Regulated Chemical.(f) “Event of Default” means those defaults specified in Section 10.01 hereof. “Facilities” means the Series 2020 Facilities and any other facilities hereafter owned by the Borrower at any time and leased to the Lessee under the Lease for the operation of the School, and pledged to the Trustee to secure the Bonds. “Financial Products Agreement” means an interest rate swap, cap, collar, floor, forward or other hedging agreement, arrangement or security, however denominated, identified to the Trustee and the Lessor in a certificate signed by an Authorized Representative of the Lessee as having been entered into by the Lessee with a Qualified Provider not for investment purposes but with respect to Indebtedness (which Indebtedness shall be specifically identified in the certificate) for the purpose of (1) reducing or otherwise managing the Lessee’s risk of interest 6 rate changes or (2) effectively converting the Lessee’s interest rate exposure from a fixed rate exposure to a variable rate exposure, or from a variable rate exposure to a fixed rate exposure. “Indebtedness” means all indebtedness of the Borrower or the Lessee (as consolidated for financial reporting purposes) for borrowed moneys related to or payable from, in whole or in part, revenues of the School, including, but not limited to, indebtedness which has been incurred or assumed in connection with the acquisition, construction, improvement, renovation or equipping of the Facilities, all indebtedness, no matter how created, secured by the Facilities, whether or not such indebtedness is assumed by the Borrower or the Lessee, any leases with a term longer than one year or required to be capitalized in accordance with Generally Accepted Accounting Principles, installment purchase obligations and guaranties. “Insurance Consultant” means an independent insurance consultant and/or risk management firm or an insurance broker or an insurance agent (which may be a consultant, firm, broker or agent with whom the Lessee regularly transacts business) selected by the Lessee. “Interest Rate Swap” means an agreement with a Swap Provider pursuant to which the interest rate on variable rate Indebtedness is synthetically fixed. “Lease Blocked Account Agreement” means the Lease Blocked Account Agreement, dated on or before the Bond Closing, by and between the Lessee and the Custodian. “Lease Payments” means the Base Lease Payments and the Additional Lease Payment due hereunder. “Lease Term” means the time during which the Lessee is the lessee of the Facilities under this Lease Agreement, as provided in and subject to Article III hereof; provided that certain provisions of this Lease Agreement survive the termination of the Lease Term, as provided in Article III hereof. “Leased Property” means the Series 2020 Facilities and any other facilities hereafter owned by the Lessor at any time and leased to the Lessee under this Lease Agreement, and pledged to the Trustee to secure the Bonds. “Lessee” means The High Desert “Partnership in Academic Excellence” Foundation, Incorporated, a California nonprofit public benefit corporation designated as an organization described in Section 501(c)(3) of the Code and authorized to operate charter schools by the State under the Charter School Act, or any successor thereto, and any surviving, resulting or transferee entity thereof, as provided in this Lease Agreement. “Lessee Actual Annual Debt Service” means the principal and interest payment requirements with respect to all Lessee Indebtedness for the Fiscal Year being tested. “Lessee Coverage Ratio” means the ratio obtained by dividing (i) Lessee Net Income Available for Lease Payments for the Fiscal Year being tested by (ii) the sum (without duplication) of Actual Annual Lease Payments and Lessee Actual Annual Debt Service (which 7 Lessee Actual Annual Debt Service shall not include any payments with respect to the Series 2020 Bonds). “Lessee Documents” means this Lease Agreement, the Tax Regulatory Agreement, the Lease Blocked Account Agreement, the Continuing Disclosure Agreement, the Bond Purchase Agreement and each of the other agreements, certificates, contracts or instruments to be executed by the Lessee in connection with the Loan Agreement and the issuance of the Bonds. “Lessee Indebtedness” means all indebtedness of the Borrower or the Lessee (as consolidated for financial reporting purposes) for borrowed moneys, including, but not limited to, indebtedness which has been incurred or assumed in connection with the acquisition, construction, improvement, renovation or equipping of facilities, all indebtedness, no matter how created, whether or not such indebtedness is assumed by the Borrower or the Lessee, any leases with a term longer than one year or required to be capitalized in accordance with Generally Accepted Accounting Principles, installment purchase obligations and guaranties. “Lessee Net Income Available for Lease Payments” means, for any period of determination thereof, the aggregate Lessee Revenues for such period, plus the interest earnings on moneys held in any debt service reserve fund related to any Lessee Indebtedness, minus the total Lessee Operating Expenses for such period but excluding (i) any profits or losses which would be regarded as extraordinary items under Generally Accepted Accounting Principles, (ii) gain or loss in the extinguishment of Lessee Indebtedness, (iii) proceeds of the Bonds and any other Lessee Indebtedness permitted by this Lease Agreement, (iv) proceeds of insurance policies, other than policies for business interruption insurance, maintained by or for the benefit of Lessee, (v) proceeds of any sale, transfer or other disposition of any of Lessee’s assets by the Lessor or the Lessee, (vi) proceeds of any condemnation or any other damage award received by or owing to Lessee, (vii) amounts expended for Base Lease Payments; and (viii) subordinated Support Office Service Fees. “Lessee Operating Expenses” means fees and expenses of the Lessee, including Base Lease Payments and Additional Lease Payments, maintenance and repair expenses, utility expenses, administrative and legal expenses, miscellaneous operating expenses, rental payments, interest expenses, advertising costs, payroll expenses (including taxes), the cost of material and supplies used for current operations of the Lessee, the cost of vehicles, equipment leases and service contracts, taxes upon the operations of the Lessee not otherwise mentioned herein, charges for the accumulation of appropriate reserves for current expenses not annually recurrent, but which are such as may reasonably be expected to be incurred in accordance with Generally Accepted Accounting Principles, and amounts payable under the Ground Lease that are the responsibility of the Lessor and not otherwise accounted for under this definition, all in such amounts as reasonably determined by the Lessee; provided, however, “Lessee Operating Expenses” shall not include (a) depreciation and amortization expenses, (b) other non-cash expenses, (c) those expenses which are actually paid from revenues of the Lessee which are not Lessee Revenues, (d) those expenses which are actually paid from any proceeds of Long-Term Indebtedness or Long-Term Indebtedness Unrelated to the School, (e) one-time expenses, and (f) expenditures for capitalized assets. 8 “Lessee Revenues” means, regardless of source and to the extent permitted by law, all revenues, rentals, fees, third-party payments, receipts, donations, contributions or other income of the Lessee, including the rights to receive such revenues, all as calculated in accordance with Generally Accepted Accounting Principles, proceeds derived from insurance, condemnation proceeds, accounts, contract rights and other rights and assets, whether now or hereafter owned, held or possessed by the Lessee; and all gifts, grants, bequests and contributions (including income and profits therefrom) related to the Lessee to the extent permitted by the terms thereof. “Lessor” means 230 South Waterman Avenue LLC, a California limited liability company or any successor thereto, or any surviving, resulting or transferee entity thereof, as provided in this Lease Agreement. “Lessor Documents” means this Lease Agreement, the Continuing Disclosure Agreement, the Deed of Trust, the Loan Agreement, the Promissory Note, the Bond Purchase Agreement, and each of the other agreements, certificates, contracts or instruments to be executed by the Lessor in connection with this Lease Agreement and the issuance of the Bonds. “Lessor’s Unassigned Rights” means the rights of the Lessor to (a) inspect books and records of the Lessee, (b) give or receive notices, approvals, consents, requests and other communications, (c) receive payment or reimbursement for expenses, (d) immunity from and limitation of liability, (e) indemnification from liability by the Lessee, and (f) security for the Lessee’s indemnification obligation. “Liabilities” means any causes of action (whether in contract, tort or otherwise), claims, costs, damages, demands, judgments, liabilities, losses, suits and expenses (including, without limitation, reasonable costs of investigation, and attorney’s fees and expenses) of every kind, character and nature whatsoever. “Loan” means the loan by the Authority to the Lessor of the proceeds from the sale of a Series of Bonds pursuant to the Loan Agreement. “Long-Term Indebtedness” means any Indebtedness incurred, assumed or guaranteed by the Lessee payable from or secured by Revenues or assets of the School, maturing on or after the expiration of the one year period after it is incurred. “Long-Term Indebtedness Unrelated to the School” means indebtedness (including leases with a term longer than one year or required to be capitalized in accordance with in accordance with Generally Accepted Accounting Principles) incurred, assumed or guaranteed by the Lessee not payable from or secured by Revenues, the Facilities or assets of the School, maturing on or after the expiration of the one year period after it is incurred “Management Consultant” means a Person, including an Accountant (as defined in the Lease Agreement), qualified to study the operations of facilities like the charter school facilities 9 operated by the Lessee, and having a favorable reputation in the industry and, unless otherwise specified herein, retained by the Lessee. “Maximum Annual Debt Service” means, as of any date of calculation, the highest Principal and Interest Requirements on Long-Term Indebtedness (provided the final maturity payment for a Series of Bonds shall be reduced by amounts on deposit in the Debt Service Reserve Fund and available for such payment) for any current or any succeeding Fiscal Year, taking into account the provisions for determining the Principal and Interest Requirements on Long-Term Indebtedness set forth in Section 8.13 hereof. “Maximum Annual Lease Payments” means, as of any date of calculation, the highest amount of Base Lease Payments to be paid hereunder with respect to the current or any succeeding Fiscal Year; provided that for purposes of this calculation, the Base Lease Payments due in the final year of the Lease Term shall be reduced by amounts on deposit in the Debt Service Reserve Fund and available for such payment. “Net Income Available for Lease Payments” means, for any period of determination thereof, the aggregate Revenues for such period, plus the interest earnings on moneys held in the Debt Service Reserve Fund, minus the total Operating Expenses for such period but excluding (i) any profits or losses which would be regarded as extraordinary items under Generally Accepted Accounting Principles, (ii) gain or loss in the extinguishment of Indebtedness, (iii) proceeds of the Bonds and any other Indebtedness permitted by this Lease Agreement, (iv) proceeds of insurance policies, other than policies for business interruption insurance, maintained by or for the benefit of Lessee, (v) proceeds of any sale, transfer or other disposition of any of Lessee’s assets by the Lessor or the Lessee, (vi) proceeds of any condemnation or any other damage award received by or owing to Lessee, (vii) amounts expended for Base Lease Payments; and (viii) subordinated Support Office Service Fees. “Net Proceeds” means, when used with respect to any insurance payment or condemnation award, the gross proceeds thereof payable to the Lessor or the Lessee, as applicable, or to which the Lessor or the Lessee, as applicable, has a right, less the expenses (including attorneys’ fees) incurred in the collection of such gross proceeds. “Non-Recourse Indebtedness” means Long-Term Indebtedness incurred for the purpose of financing Capital Improvements or tangible personal property secured by a lien on, or security interest in, the property being financed and evidenced by an instrument which expressly provides that such Long-Term Indebtedness is not on a parity with the Bonds under the Indenture and upon default in the payment of the principal thereof or interest thereon the obligee thereof may look only to the property securing the same and not to the credit of the Lessee nor to any other assets of the Lessee. “Operating Expenses” means fees and expenses of the School, including Base Lease Payments and Additional Lease Payments, maintenance and repair expenses, utility expenses, administrative and legal expenses, subordinated Support Office Service Fees, miscellaneous operating expenses, rental payments, interest expenses, advertising costs, payroll expenses (including taxes), the cost of material and supplies used for current operations of the School, the cost of vehicles, equipment leases and service contracts, taxes upon the operations of the 10 School not otherwise mentioned herein, charges for the accumulation of appropriate reserves for current expenses not annually recurrent, but which are such as may reasonably be expected to be incurred in accordance with Generally Accepted Accounting Principles, all in such amounts as reasonably determined by the School; provided, however, “Operating Expenses” shall not include (a) depreciation and amortization expenses, (b) other non-cash expenses, (c) those expenses which are actually paid from revenues of the School which are not Revenues, (d) those expenses which are actually paid from any proceeds of Long-Term Indebtedness, (e) one-time expenses, and (f) expenditures for capitalized assets. “Person” includes an individual, association, corporation, partnership, limited liability company, joint venture or a government or an agency or a political subdivision thereof. “Principal and Interest Requirements on Long-Term Indebtedness” means, for any Fiscal Year, the amount required to pay the interest and principal for Long-Term Indebtedness in such Fiscal Year, excluding “funded interest” from the proceeds of Indebtedness. Principal and Interest Requirements on Indebtedness shall be calculated in accordance with Section 8.13(j) hereof. “Projected Rate” means, in connection with any calculation of Balloon Amount, either (a) the interest rate on an Interest Rate Swap related to Balloon Indebtedness for which such Balloon Amount is being determined or (b) the projected yield at par of an obligation, as set forth in the report of a Management Consultant that states in determining the Projected Rate such Management Consultant reviewed the yield evaluations at par of not less than three obligations selected by such Management Consultant, the interest on which is excludable from gross income for federal income tax purposes (or, if it is not expected that it would be possible to issue such tax-exempt obligations to refinance the Indebtedness with respect to which debt service is being estimated or if it is not intended that the interest on the obligation for which the Projected Rate is being determined be excludable from gross income for federal income tax purposes, the obligations the interest on which is subject to federal income tax), which obligations such Management Consultant states in its opinion are reasonable comparators to be utilized in developing such Projected Rate. “Put Date” means (i) any date on which an owner of Put Indebtedness may elect to have such Put Indebtedness paid, purchased or redeemed by or on behalf of the underlying obligor prior to its stated maturity date; or (ii) any date on which Put Indebtedness is required to be paid, purchased or redeemed from the owner by or on behalf of the underlying obligor (other than at the option of the owner) prior to its stated maturity date, other than pursuant to any mandatory sinking fund or other similar fund or other than by reason of acceleration upon the occurrence of an event of default. “Put Indebtedness” means Indebtedness incurred, assumed or guaranteed by the Lessee payable from or secured by Revenues or assets of the School which is (a) payable or required to be purchased or redeemed by or on behalf of the underlying obligor, at the option of the owner thereof, prior to its stated maturity date; or (b) payable or required to be purchased or redeemed from the owner by or on behalf of the underlying obligor (other than at the option of the owner) prior to its stated maturity date, other than pursuant to any mandatory sinking fund 11 or other similar fund or other than by reason of acceleration or required purchase upon the occurrence of an event of default. “Qualified Provider” means any financial institution or insurance company which is a party to a Financial Products Agreement if the unsecured long-term debt obligations of such financial institution or insurance company (or of the parent or a subsidiary of such financial institution or insurance company if such parent or subsidiary guarantees the performance of such financial institution or insurance company under such Financial Products Agreement), or obligations secured or supported by a letter of credit, contract, guarantee, agreement, insurance policy issued by such financial institution or insurance company (or such guarantor parent or subsidiary), are rated in one of the three highest rating categories (without regard to numerical or similar modifiers) of Rating Agency at the time of the execution and delivery of the Financial Products Agreement, provided that if such rating requirement is not satisfied, the Financial Products Agreement must be collateralized by obligations deposited with the Lessee or the Lessee’s agent, which would be legal investments for a public entity pursuant to California Government Code section 53600 et seq. and which maintains a market value of not less than one hundred percent of the principal amount relating to such Financial Products Agreement. “Refunding Indebtedness” means any Indebtedness issued for the purpose of refunding any outstanding Long-Term Indebtedness or Put Indebtedness and financing the funding of related reserve funds, costs of issuance and other costs related to such refunding. “Regulated Chemicals” means any substance, the presence of which requires investigation, permitting, control or remediation under any federal, State or local statute, regulation, ordinance or order, including without limitation: (a) any substance defined as “hazardous waste” under the Resource Conservation and Recovery Act, as amended (42 U.S.C. §6901 et seq.); (b)any substance defined as a “hazardous substance” under the Comprehensive Environmental Response, Compensation and Liability Act, as amended (42 U.S.C. §9601 et seq.); (c)any substance defined as a “hazardous material” under the Hazardous Materials Transportation Act (49 U.S.C. § 1800 et seq.); (d)any substance defined under any California statute analogous to (a), (b) or (c), to the extent that said statute defines any term more expansively; (e)asbestos; (f)urea formaldehyde; (g)polychlorinated biphenyls; (h)petroleum, or any distillate or fraction thereof; 12 (i)any hazardous or toxic substance designated pursuant to the laws of the State; and (j)any other chemical, material or substance, exposure to which is prohibited, limited or regulated by any governmental authority. “Revenues” means, regardless of source and to the extent permitted by law, all revenues, rentals, fees, third-party payments, receipts, donations, contributions or other income of the School, including the rights to receive such revenues, all as calculated in accordance with Generally Accepted Accounting Principles, including State Payments, proceeds derived from insurance, condemnation proceeds, accounts, contract rights and other rights and assets, whether now or hereafter owned, held or possessed by the Lessee related to the School; and all gifts, grants, bequests and contributions (including income and profits therefrom) related to the School to the extent permitted by the terms thereof. “School” means the Norton Science and Language Academy and any charter school operated by the Lessee pursuant to the Charter School Contract. “Series 2020 Facilities” means the land and educational facilities located at 230 South Waterman Avenue, San Bernardino, California 92408. “Short-Term Indebtedness” means Indebtedness incurred, assumed or guaranteed by the Lessee payable from or secured by Revenues or assets of the School having an original maturity less than or equal to one year and not renewable at the option of the Lessee for a term greater than one year beyond the date of original incurrence. “Short-Term Indebtedness Unrelated to the School” means indebtedness incurred, assumed or guaranteed by the Lessee not payable from or secured by Revenues, the Facilities or assets of the School, having an original maturity less than or equal to one year and not renewable at the option of the Lessee for a term greater than one year beyond the date of original incurrence. “State Payments” means any and all payments made to or for the benefit of the Lessee allocable to the School pursuant to the Charter School Act and that are permitted to be used for the purposes set forth in this Lease Agreement. “Subordinated Indebtedness” means Indebtedness incurred, assumed or guaranteed by the Lessee payable from or secured by Revenues or assets of the School which, with respect to any issue thereof, is evidenced by instruments, or issued under an indenture or other document, containing provisions for the subordination of such Indebtedness to the Bonds or any other Indebtedness issued following the date thereof (to which appropriate reference shall be made in the instrument evidencing such Indebtedness). “Support Office Service Fees” means any fee or charge, including any funds transfer recognized as an expenditure for accounting purposes, charged by the Lessee for administrative or support services provided to the School, including pursuant to an Administrative Services 13 Agreement, which fee shall be subordinate to the payment of Lease Payments due under this Lease. “Swap Provider” means is any financial institution or insurance company, which has an Investment Grade Rating on its unsecured long-term obligations, acting as the counterparty to the Lessee under any Interest Rate Swap. “Variable Rate Indebtedness” means any portion of Long-Term Indebtedness the interest rate on which varies periodically such that the interest rate on any future date cannot accurately be calculated. ARTICLE II REPRESENTATIONS Representations by Lessor. The Lessor represents and covenants that:Section 2.01. The Lessor is duly organized and existing as a limited liability company(a) under the laws of the State, it is in good standing and authorized to transact business in the State, it will maintain, extend and renew its existence under the laws of the State, and it will not do, suffer or permit any act or thing to be done whereby its right to transact its functions might or could be terminated or its activities restricted. The Lessor’s sole member is the Lessee. The Borrower has not filed(b) Form 8832 to treat the Borrower as a corporation and has not otherwise made an election to be treated as a corporation for federal income tax purposes. The Lessee has not filed Form 8832 to treat the Borrower as a corporation and has not otherwise made an election to treat the Borrower as a corporation for federal income tax purposes. The Borrower continues to be treated as a single member disregarded entity for federal income tax purposes. The Lessor is organized and operated for the purpose and with the(c) specific power to own the Series 2020 Facilities, has been duly authorized to execute each of the Lessor Documents and consummate all of the transactions contemplated thereby, and by the Offering Document, and the execution, delivery and performance of the Lessor Documents will not conflict with or constitute a breach of or default by the Lessor under any other instrument or agreement to which it is a party or to which its property is bound and to carry out and consummate all the transactions contemplated hereunder, thereunder and by the Offering Document. The Lessor Documents have been duly authorized, executed and(d) delivered by the Lessor. This Lease and the other Lessor Documents will constitute the legal,(e) valid and binding agreements of the Lessor enforceable against the Lessor by the Trustee in accordance with their terms for the benefit of the Beneficial Owners of the Bonds, and any rights of the Authority and obligations of the Lessor not so assigned to the Trustee constitute the legal, valid, and binding agreements of the Lessor enforceable 14 against the Lessor by the Authority in accordance with their terms; except in each case as enforcement may be limited by bankruptcy, insolvency or other laws affecting the enforcement of creditors’ rights generally, by the application of equitable principles regardless of whether enforcement is sought in a proceeding at law or in equity and by public policy. The execution and delivery of the Lessor Documents, the consummation(f) of the transactions herein and therein contemplated and the fulfillment of or compliance with the terms and conditions hereof and thereof, will not conflict with or constitute a violation or breach of or default (with due notice or the passage of time or both) under the Lessor's articles of organization or operating agreement, any applicable law or administrative rule or regulation, or any applicable court or administrative decree or order, or any indenture, mortgage, deed of trust, loan agreement, lease, contract or other agreement or instrument to which the Lessor is a party or by which it or its properties are otherwise subject or bound, or result in the creation or imposition of any lien, charge or encumbrance of any nature whatsoever upon any of the property or assets of the Lessor, which conflict, violation, breach, default, lien, charge or encumbrance might have consequences that would materially and adversely affect the consummation of the transactions contemplated by the Lessor Documents, or the financial condition, assets, properties or operations of the Lessor. No consent or approval of any trustee or holder of any indebtedness of(g) the Lessor or any guarantor of indebtedness of or other provider of credit or liquidity to the Lessor, and no consent, permission, authorization, order or license of, or filing or registration with, any governmental authority (except with respect to any state securities or “blue sky” laws) is necessary in connection with the execution and delivery of the Lessor Documents, or the consummation of any transaction herein or therein contemplated, or the fulfillment of or compliance with the terms and conditions hereof or thereof, except as have been obtained or made and as are in full force and effect. The Lessor has good and marketable title to the Facilities free and clear(h) from all encumbrances other than Permitted Encumbrances (as defined in the Indenture). The Lessor is not in default (and no event has occurred and is continuing(i) which with the giving of notice or the passage of time or both could constitute a default) (1) under the Lessor Documents, or (2) with respect to any order or decree of any court or any order, regulation or demand of any federal, state, municipal or other governmental authority, which default could reasonably be expected to have consequences that would materially and adversely affect the consummation of the transactions contemplated by the Lessor Documents or the Indenture, or the financial condition, assets, properties or operations of the Lessor. All material certificates, approvals, permits and authorizations of(j) applicable local governmental agencies, and agencies of the State and the federal government have been or will be obtained with respect to the acquisition, construction and installation of the Facilities and the Facilities will be acquired, constructed and 15 installed and the Facilities will be operated pursuant to and in accordance with such certificates, approvals, permits and authorizations. The Lessor will not conduct any other business or incur any other(k) indebtedness or liabilities of any kind, except for such as is related to the ownership of the Facilities and the leasing thereof to the Lessee as provided in this Lease Agreement. There is no action, suit, proceeding, inquiry or investigation, before or by(l) any court or federal, state, municipal or other governmental authority, pending, or to the knowledge of the Lessor, after reasonable investigation, threatened, against or affecting the Lessor or the assets, properties or operations of the Lessor which, if determined adversely to the Lessor or its interests, would have a material adverse effect upon the consummation of the transactions contemplated by or the validity of the Lessor Documents, or upon the financial condition, assets, properties or operations of the Lessor. None of the representations of the Lessor contained in the Lessor(m) Documents, the Offering Document or any oral or written statement, furnished by or on behalf of the Lessor to the Authority, the Lessee, Bond Counsel or the Underwriter in connection with the transactions contemplated hereby, contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements contained herein or therein not misleading. There are no facts that any Lessor has not disclosed to the Authority, the Lessee, Bond Counsel or the Underwriter in writing that materially and adversely affect or in the future may (so far as the Lessor can now reasonably foresee) materially and adversely affect the properties, business, prospects, profits, or condition (financial or otherwise) of the Lessor, or the ability of any Lessor to perform its obligations under the Lessor Documents or any documents or transactions contemplated hereby or thereby. Subsequent to the Bond Closing for the Series 2020 Bonds, the Lessor(n) will not grant any Liens on the Series 2020 Facilities (other than the lien effected by the Deed of Trust and Permitted Encumbrances). Representations by Lessee. The Lessee represents and covenants that:Section 2.02. It is duly organized and existing as a California nonprofit public benefit(a) corporation qualified to do business in the State; it is an educational institution or organization established under the Charter School Act; it is in good standing under the laws of the State; it will maintain, extend and renew its corporate existence under the laws of the State; and it will not do, suffer or permit any act or thing to be done whereby its right to transact it functions might or could be terminated or its activities restricted. It is an organization described in Section 501(c)(3) of the Code, does(b) not constitute a private foundation under Section 509(a) of the Code, and the income of the Lessee is exempt from federal taxation under Section 501(a) of the Code. The Lessee has received a determination from the Internal Revenue Service to the foregoing 16 effect, and none of the bases for such determination have changed since the date thereof. It has been duly authorized to execute each of the Lessee Documents(c) and consummate all of the transactions contemplated thereby, and by the Offering Document, and the execution, delivery and performance of the Lessee Documents will not conflict with or constitute a breach of or default by the Lessee under any other instrument or agreement to which it is a party or to which its property is bound and to carry out and consummate all the transactions contemplated hereunder, thereunder and by the Offering Document. The Lessee Documents have been duly authorized, executed and(d) delivered by the Lessee. This Lease and the other Lessee Documents will constitute the legal,(e) valid and binding agreements of the Lessee enforceable against the Lessee by the Trustee in accordance with their terms for the benefit of the Holders of the Bonds, and any rights of the Authority and obligations of the Lessee not so assigned to the Trustee constitute the legal, valid, and binding agreements of the Lessee enforceable against the Lessee in accordance with their terms; except in each case as enforcement may be limited by bankruptcy, insolvency or other laws affecting the enforcement of creditors’ rights generally, by the application of equitable principles regardless of whether enforcement is sought in a proceeding at law or in equity and by public policy. The execution and delivery of the Lessee Documents, the consummation(f) of the transactions herein and therein contemplated and the fulfillment of or compliance with the terms and conditions hereof and thereof, will not conflict with or constitute a violation or breach of or default (with due notice or the passage of time or both) under the Lessee’s articles of organization or operating agreement, any applicable law or administrative rule or regulation, or any applicable court or administrative decree or order, or any indenture, mortgage, deed of trust, loan agreement, lease, contract or other agreement or instrument to which the Lessee is a party or by which it or its properties are otherwise subject or bound, or result in the creation or imposition of any lien, charge or encumbrance of any nature whatsoever upon any of the property or assets of the Lessee, which conflict, violation, breach, default, lien, charge or encumbrance might have consequences that would materially and adversely affect the consummation of the transactions contemplated by the Lessee Documents, or the financial condition, assets, properties or operations of the Lessee. No consent or approval of any trustee or holder of any indebtedness of(g) the Lessee or any guarantor of indebtedness of or other provider of credit or liquidity to the Lessee, and no consent, permission, authorization, order or license of, or filing or registration with, any governmental authority (except with respect to any state securities or “blue sky” laws) is necessary in connection with the execution and delivery of the Lessee Documents, or the consummation of any transaction herein or therein 17 contemplated, or the fulfillment of or compliance with the terms and conditions hereof or thereof, except as have been obtained or made and as are in full force and effect. All financial statements and information heretofore delivered to the(h) Authority by Lessee, including without limitation, information relating to the financial condition of Lessee, the Series 2020 Project, the partners, joint venturers or members of Lessee, and/or any guarantor, fairly and accurately present the financial position thereof and all financial statements have been prepared (except where specifically noted therein) in accordance with Generally Accepted Accounting Principles consistently applied. Since the date of such statements, there has been no material adverse change in the financial condition or results of operations of the Lessee or the other subjects of such statements. The Lessee is not in default (and no event has occurred and is continuing(i) which with the giving of notice or the passage of time or both could constitute a default) (1) under the Lessee Documents, or (2) with respect to any order or decree of any court or any order, regulation or demand of any federal, state, municipal or other governmental authority, which default could reasonably be expected to have consequences that would materially and adversely affect the consummation of the transactions contemplated by the Lessee Documents or the Indenture, or the financial condition, assets, properties or operations of the Lessee. All material certificates, approvals, permits and authorizations of(j) applicable local governmental agencies, and agencies of the State and the federal government have been or will be obtained with respect to the acquisition, construction and installation of the Facilities and the Facilities will be acquired, constructed and installed and the Facilities will be operated pursuant to and in accordance with such certificates, approvals, permits and authorizations. There is no action, suit, proceeding, inquiry or investigation, before or by(k) any court or federal, state, municipal or other governmental authority, pending, or to the knowledge of the Lessee, after reasonable investigation, threatened, against or affecting the Lessee or the assets, properties or operations of the Lessee which, if determined adversely to the Lessee or its interests, would have a material adverse effect upon the consummation of the transactions contemplated by or the validity of the Lessee Documents, or upon the financial condition, assets, properties or operations of the Lessee. None of the representations of the Lessee contained in the Lessee(l) Documents, the Offering Document or any oral or written statement, furnished by or on behalf of the Lessee to the Authority, the Lessor, Bond Counsel or the Underwriter in connection with the transactions contemplated hereby, contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements contained herein or therein not misleading. There are no facts that any Lessee has not disclosed to the Authority, the Lessor, Bond Counsel or the Underwriter in writing that materially and adversely affect or in the future may (so far as the Lessee can now reasonably foresee) materially and adversely affect the properties, business, prospects, profits, or 18 condition (financial or otherwise) of the Lessee, or the ability of any Lessee to perform its obligations under the Lessee Documents or any documents or transactions contemplated hereby or thereby. The Lessee (i) understands the structure of the transactions related to the(m) financing of the Facilities; (ii) is familiar with all the provisions of the documents and instruments related to such financing and refinancing to which the Lessee is a party or of which the Lessee is a beneficiary; (iii) understands the risk inherent in such transactions, including, without limitation, the risk of loss of the Facilities; (iv) has not relied on the Authority or the Underwriter for any guidance or expertise in analyzing the financial consequences of such financing transactions or otherwise relied on the Authority in any manner, except to issue the Series 2020 Bonds in order to provide funds for the Loan; and (v) acknowledges that the Authority makes no warranty, either express or implied, as to the Facilities or that it will be suitable for the Lessee’s or the Lessor’s purposes or needs. Subsequent to the Bond Closing for the Series 2020 Bonds, the Lessee(n) will not grant any Liens on the Facilities (other than the lien effected by the Deed of Trust and Permitted Encumbrances). The Lessee hereby acknowledges receipt of the Indenture, agrees to be(o) bound by its terms, and accepts all obligations and duties imposed thereby. The federal employer identification number of the Lessee is 33-0542733.(p) To the best of the Lessee’s knowledge, none of the Authority(q) Indemnified Parties has any significant or conflicting interest, financial, employment or otherwise, in the Lessee, the Facilities or in any of the transactions contemplated under the Lessee Documents. There has been no material adverse change in the financial condition,(r) prospects or business affairs of the Lessee subsequent to the date on which the Authority adopted its resolution approving the issuance of the Series 2020 Bonds. The Lessee will comply with the Charter School Contract in all material(s) respects and will take all reasonable action to maintain, extend and renew the Charter School Contract as long as any amounts under this Lease Agreement are due and payable. Each of the Lessee’s charter schools is operated exclusively for charitable(t) and educational purposes as a charter school under Part 26.8 of Division 4 of Title II of the California Education Code. Lessee’s Tax Covenants. (a) The Lessee represents and covenants thatSection 2.03. it will not take any action or omit to take any action, which, if taken or omitted, respectively, would adversely affect the excludability of interest on the Tax-Exempt Bonds from the gross income of the owners thereof for federal income tax purposes or cause the interest on the Tax- 19 Exempt Bonds, or any portion thereof, to become an item of tax preference for purposes of the alternative minimum tax imposed under the Code, and in the event of such action or omission, it will, promptly upon having such brought to the Lessee’s attention, take such reasonable actions based upon an Opinion of Bond Counsel, and in all cases at the sole expense of the Lessee, as may rescind or otherwise negate such action or omission. The Lessee will not, directly or indirectly, use or permit the use of any Bond Proceeds of a Series of Tax-Exempt Bonds or any other funds of the Lessee, or take or omit to take any action, that would cause the Tax-Exempt Bonds to be or become “arbitrage bonds” within the meaning of Section 148(a) of the Code (or its statutory predecessor) or to fail to meet any other applicable requirement of Sections 141, 148, 149 and 150 of the Code (or their statutory predecessor) or cause the interest on the Tax-Exempt Bonds, or any portion thereof, to become an item of tax preference for purposes of the alternative minimum tax imposed under the Code or would cause interest on the Tax-Exempt Bonds to lose their exclusion from California taxable income under present California law. To that end, the Lessee will comply with all requirements of Sections 141, 148, 149 and 150 of the Code (or their statutory predecessor) to the extent applicable to the Tax-Exempt Bonds. In the event that at any time the Lessee is of the opinion that it is necessary to restrict or limit the yield on the investment of any moneys held by the Trustee or otherwise, the Lessee shall so instruct the Trustee in writing. The Lessee hereby covenants and agrees that it shall not enter into any(b) arrangement, formal or informal, pursuant to which the Lessee (or any “related party,” as defined in Treasury Regulations §1.150-1(b)) shall purchase the Tax-Exempt Bonds. This covenant shall not prevent the Lessee from purchasing Bonds in the open market for the purpose of tendering them to the Trustee for purchase and retirement. The Lessee covenants to comply with the covenants and procedures set(c) forth in the Indenture and the Tax Regulatory Agreement and to deposit in the Rebate Fund such amounts as may be necessary to maintain the deposit in the Rebate Fund at an amount at least equal to the amount required to be deposited therein. All covenants and obligations of the Lessee contained in this Section(d) 2.03 shall remain in effect and be binding upon the Lessee until all of the Tax-Exempt Bonds have been paid, notwithstanding any earlier termination of this Lease Agreement or any provision for prepayment of the Lease Payments and release and discharge of the Indenture. Notwithstanding any provision of this Section 2.03, if the Lessee(e) provides, at the Lessee’s expense, to the Lessor, the Trustee and the Authority an opinion of Bond Counsel to the effect that any action required under this Section 2.03 of the Indenture or under the Tax Regulatory Agreement is no longer required, or to the effect that some further action is required, to maintain the exclusions from gross income of interest on the Tax-Exempt Bonds pursuant to Section 103(a) of the Code, the Lessor, the Lessee, the Authority and the Trustee may rely conclusively on such opinion in complying with the provisions of this Section 2.03 and the Tax Regulatory Agreement, and the covenants hereunder shall be deemed modified to that extent. 20 The Lessee agrees that it will not take any action or omit to take any(f) action or cause or permit any circumstance to arise or continue if such action or circumstance or omission would cause any revocation or adverse modification of such federal income tax status, unless it obtains, at the Lessee’s expense, an opinion of Bond Counsel, addressed to the Authority and the Trustee that such revocation or modification will not adversely affect the exclusion from gross income under Section 103(a) of the Code of interest paid on the Tax-Exempt Bonds or cause the interest on the Tax-Exempt Bonds, or any portion thereof, to become an item of tax preference for purposes of the alternative minimum tax imposed under the Code. Lessee’s Covenant to Comply With Charter School Act. The LesseeSection 2.04. covenants to comply fully and in all respects with the provisions of the Charter School Act so long as any Bonds remain Outstanding. ARTICLE III TERM OF AGREEMENT Lessor hereby leases to Lessee, and Lessee leases from Lessor, the Facilities pursuant to the terms of this Lease Agreement, and this Lease Agreement shall remain in full force and effect from and after the date of delivery hereof until such time as all of the Lease Payments shall have been fully paid and all reasonable and necessary fees and expenses of the Trustee accrued and to accrue through final payment of the Lease Payments, all fees and expenses of the Authority accrued and to accrue through final payment of the Lease Payments and all other liabilities of the Lessee accrued and to accrue through final payment of the Lease Payments under this Lease Agreement have been paid; provided, however, that notwithstanding any other provision herein (a) the indemnification provisions of Sections 6.06 and 8.06 hereof and agreements contained in Section 10.04 hereof shall survive after the termination of the Lease Term; (b) all agreements, representations and certifications by the Lessee as to the exclusion from gross income of interest on the Tax-Exempt Bonds shall survive termination of the Lease Term until the expiration of statutes of limitation applicable to the liability of the Beneficial Owners of the Tax-Exempt Bonds for federal and state income taxes with respect to interest on the Tax-Exempt Bonds; and (c) upon the defeasance of the Bonds under the Indenture, all the indemnification provisions of Sections 6.06 and 8.06 hereof shall be enforceable by the Indemnified Parties, and all such agreements, representations and certifications regarding the exclusion from gross income of the interest on the Tax-Exempt Bonds shall be enforceable by the Beneficial Owners of the Tax-Exempt Bonds, directly against the Lessee. ARTICLE IV GROUND LEASE The Lessor is the lessee of the Series 2020 Facilities under that certain Ground Lease Agreement, dates as of [____], 2020 (the “Ground Lease”), by and between Lessor and the County of San Bernardino and the City of San Bernardino (together, the “Ground Lessor”). Lessee will and hereby agrees to be subject to and bound by and to comply with the Ground 21 Lease and to satisfy all applicable terms and conditions of the Ground Lease for the benefit of both the Ground Lessor and the Lessor, and that upon the breach of any of such terms, conditions or covenants of the Ground Lease by Lessee or upon failure by the Lessee to pay any applicable rents or other amounts thereunder or to comply with any of the provisions of the Lease, Lessor may exercise any and all rights and remedies granted to Ground Lessor by the Ground Lease, as well as any and all rights and remedies granted to Lessor by this Lease. It is further understood and agreed that the Lessor has no duty or obligation to Lessee under the Ground Lease other than to maintain the Ground Lease in full force and effect during the term of this Lease; provided, however, that Lessor will not be liable to Lessee for any earlier termination of the Ground Lease which is not due to the fault of the Lessor. Whenever the provisions of the Ground Lease which have been incorporated as provisions of this lease require the written consent of the Ground Lessor, such provisions will be construed to require the written consent of the Ground Lessor and the Lessor. Lessee hereby acknowledges that it has read and is familiar with the terms of the Ground Lease and that any termination thereof will likewise terminate the Lease. In the event of any inconsistencies between any provisions of the Lease and the Ground Lease, the terms of the Ground Lease shall govern. ARTICLE V PAYMENT PROVISIONS Lease Payments; Limited Obligation. The Lessee and the LessorSection 5.01. acknowledge and agree that the Base Lease Payments and Additional Lease Payments required hereunder during the Lease Term shall be payable from the Revenues and any other legally available funds of the School. Notwithstanding any other provision in this Lease Agreement to the contrary, no indebtedness of any kind incurred or created hereunder shall constitute an indebtedness of the State or its political subdivisions, and no indebtedness of the Lessee hereunder shall involve or be secured by the faith, credit or taxing power of the State or its political subdivisions. Base Lease Payments, Additional Lease Payments and OtherSection 5.02. Amounts Payable. The Lessee shall pay directly to the Trustee, or the Custodian on behalf(a) of the Trustee, all Base Lease Payments at least one Business Day prior to the Base Lease Payment Dates and in the amounts set forth in Exhibit A attached hereto and made a part hereof, as it may be amended from time to time hereunder. [Reserved](b) The Lessee shall pay all Additional Lease Payments directly to the party(c) to whom owed at the times and as otherwise provided herein or in the Loan Agreement, Indenture or Lease Blocked Account Agreement; provided, however, that Additional Lease Payments for Annual Administration Fees shall be paid to the Trustee, or the Custodian on behalf of the Trustee, at least one Business Day prior to the Base 22 Lease Payment Date and in the amounts set forth in Exhibit A attached hereto, for deposit into the Expense Fund established under the Indenture. On or before any redemption date pursuant to Section 5.01 of the(d) Indenture (other than sinking fund redemption), the Lessee shall pay an amount of money that, together with the Lease Payments made by the Lessee and then on deposit in the Bond Fund and any amounts transferred from the Debt Service Reserve Fund to the Bond Fund, is sufficient to pay the principal of, premium, if any, and interest to the redemption date on the Bonds called for redemption. As further described in Sections 6.02 and 6.03 hereof, the Lessee shall(e) pay or provide for the payment of all taxes and assessments, general or special, concerning or in any way related to the Facilities or any part thereof, and any other governmental charges or impositions whatsoever related to the Facilities, and premiums for insurance policies maintained on the Facilities as required by this Lease Agreement. (f)In the event the Lessee should fail to make or fail to cause to be made any of the payments required by this Section 5.02, the item or installment in default shall continue as an obligation of the Lessee until the amount in default shall have been fully paid, and the Lessee agrees to pay the same and, with respect to the payments required by subsections (a), (b), (c) and (d) of this Section 5.02, to pay interest thereon at the highest rate of interest borne by any of the Bonds, or the maximum rate permitted by law if less than such rate. Manner of Payment. The Base Lease Payments shall be paid by theSection 5.03. Lessee by certified funds or other method of payment acceptable to the Trustee in lawful money of the United States of America to the Trustee at its designated corporate trust office. The obligation of the Lessee to pay the Base Lease Payments and Additional Lease Payments during the Lease Term shall be absolute and unconditional, payable from Revenues and other legally available funds of the School and payment of the Base Lease Payments and Additional Lease Payments shall not be abated through accident or unforeseen circumstances, or for any other reason, including without limitation, any acts or circumstances that may constitute failure of consideration, destruction of or damage to the Facilities, commercial frustration of purpose, or failure of the Lessor to perform and observe any agreement, whether express or implied, or any duty, liability or obligation arising out of or connected with this Lease Agreement, it being the intention of the parties that the payments required by this Lease Agreement will be paid in full when due without any delay or diminution whatsoever, subject only to the Lessee’s rights under Section 6.02 hereof. Notwithstanding any dispute between the Lessee and Lessor, the Lessee shall, during the Lease Term, make all payments of Base Lease Payments and Additional Lease Payments when due and shall not withhold any Base Lease Payments or Additional Lease Payments pending final resolution of such dispute (except to the extent permitted by Section 6.02 hereof with respect to certain Additional Lease Payments), nor shall the Lessee assert any right of set-off, recoupment or counterclaim against its obligation to make such payments required hereunder. No action or inaction on the part of the Lessor shall affect the Lessee’s obligation to pay all Base Lease Payments and Additional Lease Payments 23 (except to the extent provided by Section 6.02 hereof with respect to certain Additional Lease Payments), during the Lease Term. Pledge by Lessee. In fulfillment of its obligations hereunder and inSection 5.04. order to secure the payment of the Lease Payments, the Lessee hereby pledges to Lessor, and grants Lessor a security interest in and to, the following: All of the Lessee’s right, title and interest in and to the Facilities,(a) including all related additions, replacements, substitutions and proceeds; To the extent permitted by law, all Revenues;(b) All furniture, furnishings, equipment, supplies and other tangible personal(c) property, used in connection with the Facilities, wherever located, whether in the possession of the Lessee, warehousemen, bailee or any other person; and Any and all other interests in real or personal property of every name(d) and nature from time to time hereafter by delivery or by writing of any kind specifically mortgaged, pledged or hypothecated, as and for additional security by the Lessee or by anyone on its behalf. ARTICLE VI MAINTENANCE, TAXES AND INSURANCE Maintenance and Modifications of Facilities By Lessee.Section 6.01. The Lessee agrees that during the Lease Term the Facilities shall be(a) operated and maintained, in compliance with all governmental laws, building codes, ordinances and regulations and zoning laws applicable to the Facilities, unless the same are being contested in good faith by appropriate proceedings. The Lessee agrees that during the Lease Term it will at its own expense (i) keep the Facilities in as safe a condition as required by law, and (ii) except to the extent the Lessee has determined that any portion of the Facilities is obsolete or not useful in its operations, keep the Facilities in good repair and in good operating condition, making from time to time all necessary repairs thereto (including external and structural repairs) and renewals and replacements thereof, all of which shall be accomplished in a workmanlike manner in accordance with all applicable laws. The Lessee may, at its own expense, make from time to time any additions, modifications or improvements to the Facilities it may deem desirable for its purposes that do not substantially reduce its value; provided that all such additions, modifications and improvements made by the Lessee which are affixed to the Facilities shall become a part of the Facilities. The Lessee will not permit the removal of any personal property from the Facilities unless such personal property is obsolete, sold for fair market value or will be replaced with personal property of an equal or greater value. The Lessee will not permit any Liens, security interests or other(b) encumbrances, other than Permitted Encumbrances, to be established or to remain 24 against the Facilities for any additions, modifications, improvements, repairs, renewals or replacements made by the Lessee to the Facilities. However, if no Event of Default has occurred and is continuing, and after notifying the Trustee in writing of its intention to do so, the Lessee may permit the Liens to remain undischarged and unsatisfied while the Lessee is diligently prosecuting, in good faith and at its own expense, a contest of any mechanics’ or other Liens filed or established against the Facilities, including any appeal therefrom. The Lessee’s right to contest a Lien shall not apply, however, if the Facilities or any part thereof will be subject to loss or forfeiture, in which event the Lessee shall promptly pay and cause to be satisfied and discharged all such unpaid items. Taxes, Other Governmental Charges and Utility Charges. TheSection 6.02. Lessee will pay, as the same become due, (a) all taxes and governmental charges of any kind whatsoever or payments in lieu of taxes that may at any time be lawfully assessed or levied against or with respect to the Facilities or any interest therein, or any machinery, equipment or other property installed or brought by the Lessee therein or thereon which, if not paid, will become a Lien on the Facilities prior to or on a parity with the lien thereon under this Lease Agreement or the Deed of Trust, (b) all utility and other charges incurred in the operation, maintenance, use, occupancy and upkeep of the Facilities and (c) all assessments and charges lawfully made by any governmental body for public improvements that may be secured by a Lien on the Facilities; provided that with respect to special assessments or other governmental charges that may lawfully be paid in installments over a period of years, the Lessee shall be obligated to pay only such installments as may have become due during the term of this Lease Agreement. The Lessee may, at its own expense, but only if no Event of Default (excluding the issue being contested hereunder) has occurred and is continuing, diligently prosecute and in good faith contest any such taxes, assessments and other charges and, in the event of any such contest, after notifying the Trustee in writing of its intention to do so, may permit the taxes, assessments or other charges contested to remain unpaid during the period of such contest and any appeal therefrom if, in the Opinion of Counsel, the Facilities shall not be subject to loss or forfeiture. Insurance Required.Section 6.03. Throughout the term of this Lease Agreement, the Lessee shall keep or(a) cause to be kept, the following insurance coverages relating to the Facilities, paying as the same become due and payable all premiums with respect thereto: Insurance against loss or damage to the Facilities and all(i) improvements thereon and therein (including, during any period of time when the Lessee is making alterations, repairs or improvements to the Facilities, improvements and betterments coverage), all subject to standard form exclusions, with uniform standard extended coverage endorsement limited only as may be provided in the standard form of extended coverage endorsement at the time in use in the State, in an amount equal to the full replacement value of the Facilities (excluding the Land); 25 Commercial comprehensive general liability and automobile(ii) liability insurance against claims arising in, on or about the Facilities, including in, on or about the sidewalks or premises adjacent to the Facilities, providing coverage limits not less than $1,000,000 per occurrence and $2,000,000 in aggregate; Business interruption or rent loss insurance equal to 12(iii) months’ debt service on the Bonds and 12 months’ Operating Expenses for the School; and Such other forms of insurance as are customary in the(iv) industry or as the Lessee is required by law to provide with respect to the School, including, without limitation, any legally required worker’s compensation insurance and disability benefits insurance. The Lessee shall, at its own expense, maintain and keep in force(b) insurance of the types and in amounts customarily carried in lines of business similar to that of the Lessee, including but not limited to fire, extended coverage, public liability, flood (if Lessor’s property is located in a flood zone), property damage and workers’ compensation, and deliver to Lessor from time to time at Lessor’s request schedules setting forth all insurance then in effect. All the insurance coverage required by this Section may be subject to(c) deductible clauses in such amounts as are customary for facilities of similar size, type and character within the State. At least every three years, commencing not later than July 1, 2022, the Lessee shall employ (or cause to be employed), at its own expense, an Insurance Consultant to review the insurance coverage required by this Section and to render to the Lessor and the Trustee a report as to the adequacy of such coverage and as to its recommendations, if any, for adjustments thereto. The Trustee shall have no duty to review or analyze any such report and shall not be required to act upon the same. The insurance coverage required by this Section may be reduced or otherwise adjusted by the Lessee without the consent of the Trustee or the Lessor, provided that all coverages after such reduction or other adjustment are certified by the Insurance Consultant to be adequate and customary for facilities of like size, type and character, taking into account the availability of such insurance, the terms upon which such insurance is available, the cost of such available insurance and the effect of such terms and such cost upon the Lessee’s costs and charges for the use of the Facilities. The insurance coverage required by the Lease shall be increased or(d) otherwise adjusted by the Lessee if as a result of such review the Insurance Consultant finds that the existing coverage is inadequate, taking into account the availability of such insurance, the terms upon which such insurance is available, the cost of such available insurance, and the effect of such terms and such cost upon the Lessee’s costs and charges for its services. The insurance coverage required by this Section, and modification thereof permitted or required by this paragraph, shall at all times be adequate and customary for facilities of like size, type and character, and the Lessee shall request that the Insurance Consultant so certify in the report required by this 26 Section. The Lessee shall pay any fees charged by such Insurance Consultant and any expenses incurred by the Authority and the Trustee. All policies maintained (or caused to be maintained) by the Lessee(e) pursuant to this Section shall be taken out and maintained with (a) generally recognized, responsible insurance companies rated not less than “A-” by A.M. Best, authorized by the State, which may include “captive” insurance companies or governmental insurance pools, selected by the Lessee and shall name the Lessee as an insured or (b) a joint powers authority. The insurance policies required by subsection (a)(i) of this Section shall name the Trustee, the Authority and the Lessor as additional insureds as their respective interests may appear (provided that with respect to insurance maintained pursuant to subsection (a)(i) of this Section, the Trustee shall also be named as a mortgagee under the terms of a standard California mortgagee loss payable endorsement), and the Trustee shall also be named as an additional insured on the policies required by subsections (a)(ii) and (a)(iii) of this Section, and, provided further that all insurance proceeds for losses related to the Facilities, and except for worker’s compensation, fidelity insurance and liability insurance, shall be paid directly to the Trustee. Such policies or certificates of insurance shall provide that the Lessee will mail and that, to the extent practicable, the insurer will endeavor to mail thirty (30) days’ written notice to the Authority and the Trustee of any amendment or cancellation prior to expiration of such policy. The Lessee shall deliver to the Trustee (a) upon the date of issuance of(f) each Series of Bonds, a certificate or certificates of insurance evidencing the coverages which the Lessee is then required to maintain pursuant to this Section, together with evidence as to the payment of all premiums then due thereon, (b) at least thirty (30) days prior to the expiration of any such policies, evidence as to the renewal thereof, if then required by this Section, and the payment of all premiums then due with respect thereto, and (c) promptly upon request by the Authority or the Trustee, but in any case within ninety (90) days after the end of each Fiscal Year, a certificate of an Authorized Representative of the Lessee setting forth the particulars as to all insurance policies maintained by the Lessee pursuant to this Section and certifying that such insurance policies are in full force and effect, that such policies comply with the provisions of this Section and that all premiums then due thereon have been paid. The Trustee shall not be responsible for the sufficiency of coverage or the amounts of any such policies. Application of Net Proceeds of Insurance. The Net Proceeds of theSection 6.04. insurance carried pursuant to subsections (i) of Section 6.03(a) hereof shall be applied as provided in Section 7.02 hereof and Article VII of the Loan Agreement. The Net Proceeds of insurance carried pursuant to subsections (ii), (iii) and (iv) of Section 6.03(a) hereof shall be applied toward extinguishment or satisfaction of the liability with respect to which such insurance proceeds have been paid. Advances by Trustee. In the event the Lessee shall fail to maintain theSection 6.05. full insurance coverage required by this Lease Agreement or shall fail to keep the Facilities in the condition required hereby (except as otherwise herein permitted), and such failure creates an Event of Default hereunder, the Trustee may (but shall be under no obligation to) take out 27 the required policies of insurance and pay the premiums on the same, or make the required repairs, renewals and replacements; and all amounts advanced therefor by the Trustee shall become an additional obligation of the Lessee under this Lease Agreement, which amounts the Lessee agrees to pay on demand together with interest thereon at a rate equal to the highest interest rate borne by any of the Bonds or the maximum rate permitted by law if less than such rate. Environmental Indemnity.Section 6.06. In addition to the indemnification set forth in Section 8.06 hereof, the(a) Lessee and its successors, heirs and assigns, shall and do hereby indemnify and hold harmless the Registered Owners, the Beneficial Owners, the Trustee and the Authority and their successors, assigns, trustees, directors, officers, employees, agents, contractors, subcontractors, licensees and invitees (collectively referred to in this Section 6.06 as “Indemnified Parties”), for, from and against any and all Environmental Damages that the Indemnified Parties may incur as well as any and all loss, costs, damages, exemplary damages, natural resources damages, Liens and expenses, (including, but not limited to, attorneys’ and paralegals’ fees and any and all other costs incurred in the investigation, defense and settlement of claims) that Indemnified Parties may incur as a result of or in connection with the assertion against Indemnified Parties, or against all or a portion of the Facilities, of any claim, civil, criminal or administrative, which: arises out of the actual, alleged or threatened discharge,(i) dispersal, release, storage, treatment, generation, disposal or escape of any Regulated Chemical, including, but not limited to, any solid, liquid, gaseous or thermal irritant or contaminant, including, but not limited to, smoke, vapor, soot, fumes, acids, alkalis, chemicals, medical waste and waste (including materials to be recycled, reconditioned or reclaimed); or actually or allegedly arises out of the use of any Regulated(ii) Chemical, the existence or failure to detect the existence or proportion of any Regulated Chemical in the soil, air, surface water or groundwater, or the performance or failure to perform the abatement or removal of any Regulated Chemical or of any soil, water, surface water or groundwater containing any Regulated Chemical; or arises out of the actual or alleged existence of any Regulated(iii) Chemical on, in, under, or affecting all or a portion of the Facilities; or arises out of any misrepresentations of the Lessee concerning(iv) any matter involving Regulated Chemicals or Environmental Requirements; or arises out of the Lessee’s failure to provide all information,(v) make all submissions and filings, and take all steps required by appropriate government authority under any applicable Environmental Law, regulation, 28 statute or program, whether federal, state or local, whether currently existing or hereinafter enacted. Without prejudice to the survival of any other agreements of the Lessee(b) hereunder, this indemnification shall survive any termination, payment or satisfaction of the Bonds and the termination of this Lease Agreement, and any foreclosure or any other transfer of any kind of the Facilities and shall continue and survive ad infinitum. The Lessee’s indemnification contained herein to each Indemnified Party(c) is intended to be for his or her active or passive negligence or misconduct; provided, however, nothing contained herein shall be deemed to provide indemnification to any Indemnified Party with respect to any Liabilities arising from the successful allegation of fraud, gross negligence or willful misconduct of such party. The Lessee’s indemnification contained herein shall be effective not only(d) with any existing Environmental Requirements affecting the Lessee, Indemnified Parties and/or the Facilities, but also for any hereinafter enacted Environmental Law, regulation, statute or program, whether federal, State or local affecting the Lessee, Indemnified Parties and/or the Facilities. The Lessee’s indemnification contained herein shall extend to any and all(e) like claims which arise from the acts or omissions of any user, tenant, lessee, agent or invitee of the Lessee. The obligations under this Section shall not be affected by any(f) investigation by or on behalf of Indemnified Parties, or by any information which Indemnified Parties may have or obtain with respect thereto. The Lessee’s indemnification shall include the duty to defend any and all(g) claims of the types described in this Section, and Indemnified Parties may participate in the defense of any claim of the type described in this Section without relieving the Lessee of any obligation hereunder. This duty to defend shall apply and constitute an obligation of Lessee regardless of any challenge by Lessee to this provision, the indemnification contained herein, or any other provision of this Lease Agreement. This duty to defend shall apply regardless of the validity of Lessee’s indemnification, as may ultimately be determined by a court of competent jurisdiction. Environmental Covenants.Section 6.07. Use of Facilities. The Lessee will not intentionally or unintentionally(a) conduct, or allow to be conducted, any business, operation or activity on, under or in the Facilities, or employ or use the Facilities or allow for it to be employed or used, to manufacture, transport, treat, store or dispose any Regulated Chemical which would violate or potentially violate Environmental Requirements, including, but not limited to, any action which would: 29 bring the Lessee or the Facilities within the ambit of, or(i) otherwise violate, the Resource Conservation and Recovery Act of 1976, as amended by the Solid and Hazardous Waste Amendments of 1984, 42 U.S.C. §6901, et seq.; cause, or allow to be caused, a release or threat of release,(ii) of hazardous substances on, under, in or about the Facilities as defined by, and within the ambit of, the Comprehensive Environmental Response, Compensation, and Liability Act of 1980, as amended by the Superfund Amendments and Reauthorization Act of 1986, 42 U.S.C. §9601, et seq.; violate the Clean Air Act of 1970, as amended, 42 U.S.C.(iii) §7401, et seq., or other similar State, regional or local statute, law, regulation, rule or ordinance, including without limitation, the laws of the State, or any other statute providing for the financial responsibility for cleanup for the release or threatened release of substances provided for thereunder. The Lessee will not do or permit any act or thing, business or operation, that materially increases the dangers, or poses an unreasonable risk of harm, or impairs, or may impair, the value of the Facilities, or any part thereof. Maintenance of Facilities. The Lessee shall maintain the Facilities free(b) from contamination by Regulated Chemicals and shall not intentionally or unintentionally allow a release, discharge or emission, or threat of release, discharge or emission, of any Regulated Chemical on, under, in or about the Facilities, and shall not permit the migration or threatened migration from other properties upon, about or beneath the Facilities. Notice of Environmental Problem. The Lessee (provided that the Lessee(c) shall only forward to the Trustee those notices, letters, citations, orders, warnings, complaints, inquiries, claims or demands actually received by the Lessee) and/or any tenant and/or sublessee shall promptly provide a copy to Trustee, and in no event later than fifteen (15) days from the Lessee’s and/or any tenants’ and/or sublessee’s receipt or submission, of any notice, letter, citation, order, warning, complaint, inquiry, claim or demand that: the Lessee and/or any tenants or sublessees have violated, or(i) are about to violate, any federal, state, regional or local environmental, health or safety statute, law, rule, regulation, ordinance, judgment or order; there has been a release, or there is a threat of release, of(ii) any Regulated Chemical from the Facilities; 30 the Lessee and/or any tenants or sublessees may be or are(iii) liable, in whole or in part, for the costs of cleaning up, remediating, removing or responding to a release of any Regulated Chemical; or any portion of the Facilities is subject to a Lien in favor of(iv) any governmental entity for any liability, costs or damages, under Environmental Requirements arising from, or costs incurred by such governmental entity in response to, a release of any Regulated Chemical. Response Action. The Lessee shall take all appropriate responsive(d) action, including any removal and remedial action (“Response Action”), in the event of a release, emission, discharge or disposal of any Regulated Chemical in, on, under or about the Facilities, so as to remain in compliance with the above, and to keep the Facilities free from and unaffected by Regulated Chemicals. The Lessee shall (i) provide Trustee, within twenty (20) days after providing the notice required under Section 6.07(c) above, with a bond, letter of credit or similar financial assurance which is equal to the cost of the Response Action and which may be drawn upon by the Trustee for the purpose of completing the Response Action if an Event of Default occurs or if the Response Action is not completed within six months of the issuance of the financial assurance, and (ii) discharge any assessment, Lien or encumbrance which may be established on the Facilities as a result thereof. No Liens or Encumbrances. The Lessee shall prevent the imposition of(e) any Liens or encumbrances against the Facilities for the costs of any response, removal or remedial action or cleanup of any Regulated Chemicals. Should such a Lien or encumbrance be levied on the Facilities, the Lessee shall follow the procedure set forth in subsection (d) above. Compliance with Environmental Requirements. The Lessee shall carry(f) on its business and operations at the Facilities to comply in all respects and will continue to remain in compliance with all applicable Environmental Requirements and maintain all permits and licenses required thereunder. Additional Environmental Reports. As long as there are any Bonds(g) Outstanding, the Lessee shall provide the Trustee and post to EMMA a copy of any Environmental Report performed during that time. The Trustee shall have no duty to review or analyze any such environmental report and shall not be required to act upon the same unless the report creates an Event of Default hereunder and a notice of such Event of Default is delivered to the Trustee. Additional Environmental Provisions.Section 6.08. Right to Notify Agencies. To the extent the Trustee receives written(a) notice, whether from the Lessee or any other party, stating that the Lessee or the Lessor is in violation of any environmental law, statute, regulation, ordinance, rule or order, whether federal, State or local, or that there has been a release or threat of 31 release of any Regulated Chemical from or upon the Facilities, and the Trustee, the Trustee shall promptly notify the Lessee and the Registered Owners of such notice. Right of Inspection.(b) The Trustee at any time and from time to time, with(i) reasonable cause and notice, either prior to or after the occurrence of any Event of Default hereunder, may require the Lessee to submit to the Trustee and post to EMMA within ninety (90) days of either the notice required under Section 6.07(c) hereof or a written request from the Trustee, a written report of a site assessment and environmental audit (“Environmental Assessment”), in scope, form and substance, and prepared by an independent, competent and qualified engineer, showing that the engineer made all appropriate inquiry consistent with good commercial and customary practice, such that consistent with generally accepted engineering practice and procedure, no evidence or indication came to light which would suggest there was a release of substances on, under, in or about the Facilities which could necessitate an environmental response action, and which demonstrates that the Facilities comply with, and do not deviate from, all applicable environmental statutes, laws, ordinances, rules and regulations, including any licenses, permits or certificates required thereunder, and that the Lessee is in compliance with, and has not deviated from, the representations and warranties set forth in Sections 2.02 and 6.07 hereof. The Trustee shall have no duty to review or analyze any such environmental report and shall not be required to act upon the same unless the report creates an Event of Default hereunder and a notice of such Event of Default is delivered to the Trustee. The Lessee hereby grants, and will cause any tenants or(ii) users of the Facilities to grant, to the Trustee, its agents, attorneys, employees, consultants and contractors, upon reasonable notice and under reasonable conditions established by the Lessee which do not impede the performance of the Environmental Assessment, an irrevocable license and authorization to enter upon and inspect the Leased Property and perform such sampling, tests and analysis (“Tests”), including without limitation, subsurface testing, soils and groundwater testing, and other tests which may physically invade the Facilities, as the Trustee or its agent determines is necessary; provided, however, that the Trustee shall use its best efforts not to interfere with the operations of the Lessee's charter school or to materially damage the Facilities. The Lessee will cooperate with the consultants and supply to(iii) the consultants such historical and operational information as may be reasonably requested by the consultants, together with any notices, permits or other written communications pertaining to violations of Environmental Requirements and any and all necessary information and make available personnel having knowledge of such matters as may be required by the 32 Trustee, the Trustee’s agents, consultants and engineers to complete an Environmental Assessment. Should the Lessee fail to perform an Environmental(iv) Assessment within the time period set forth in Section 6.08(b)(i) hereof, and such failure creates an Event of Default hereunder, the Trustee shall have the right but not the obligation to retain an environmental consultant to perform said Environmental Assessment. The cost of performing any Environmental Assessment shall(v) be paid by the Lessee upon demand of the Trustee and any such obligations shall be deemed to be an Additional Lease Payment due hereunder. Event of Default. If an Environmental Assessment reveals any violations(c) of Environmental Requirements or the Lessee receives a notice of a violation of Environmental Requirements, and the Lessee fails to cure the violation in the time period and the manner specified in Section 10.01(b) hereof, such action will constitute an Event of Default. No Assumption of Risk. The Trustee’s rights under this Section shall be(d) exercised by it in its sole discretion and not for the benefit of the Lessee. The Trustee shall have no obligation (unless directed and indemnified as provided in the Indenture) to enter onto the Facilities or to take any other action which is authorized by this Article for the protection of its security interest. The Lessee specifically agrees and acknowledges that any action permitted under this Section shall not be construed to be the management or control of the Facilities by the Trustee. ARTICLE VII DAMAGE, DESTRUCTION AND CONDEMNATION Damage, Destruction and Condemnation. If, during the Lease TermSection 7.01. (a) the Facilities or any portion thereof shall be destroyed (in whole or in part), or damaged by fire or other casualty; or (b) title to, or the temporary or permanent use of, the Facilities or any portion thereof or the estate of the Lessee or the Lessor in the Facilities or any portion thereof shall be taken under the exercise of the power of eminent domain by any governmental body or by any person, firm or corporation acting under governmental authority; or (c) a breach of warranty or a material defect in the construction, manufacture or design of the Facilities shall become apparent; or (d) title to or the use of all or any portion of the Facilities shall be lost by reason of a defect in title thereto; then the Lessee shall be obligated to continue to pay the amounts specified in Section 5.02 of this Lease Agreement. Treatment of Net Proceeds. The Lessee and, to the extent such NetSection 7.02. Proceeds are within its control, the Lessor, shall cause the Net Proceeds of any insurance policies, payment of performance bonds or condemnation awards to be applied in accordance with the terms of Article VII of the Loan Agreement and Section 3.22 of the Indenture. 33 Continuation of Operations in Event of Casualty. In the event of anySection 7.03. damage to or destruction of the Facilities or any part thereof by fire, lightning, vandalism, malicious mischief and extended coverage perils, the Lessee shall make all diligent and reasonable efforts to continue operation of the Facilities in such a manner that will ensure continuation of State Payments or shall obtain or use other financing resources to continue operation of the Facilities and ensure due and timely payment of the Lease Payments. ARTICLE VIII SPECIAL COVENANTS Annual Budget. The Lessee agrees to annually budget sufficientSection 8.01. expenditures to provide for all Base Lease Payments, Additional Lease Payments and other amounts due under this Lease Agreement. Consolidation, Merger, Sale or Conveyance. The Lessee agrees thatSection 8.02. during the term of this Lease Agreement it will maintain its corporate existence, will continue to be a nonprofit corporation under the laws of the State of California, will not merge or consolidate with, or sell or convey all or substantially all of its assets to, any Person unless (i) no Event of Default has occurred and is continuing, (ii) it first acquires the consent of the Authority to such transaction, (iii) it provides to the Trustee notice of its intent at least ninety (90) days in advance of such consolidation, merger, sale or conveyance, and (iv) the acquirer of the Lessee’s interest in the Facilities or the corporation with which it shall be consolidated or the resulting corporation in the case of a merger: shall assume in writing the performance and observance of all covenants(a) and conditions of this Lease Agreement; shall provide the Authority and Trustee with an opinion of Bond Counsel(b) to the effect that such merger, consolidation, sale or conveyance would not adversely affect the validity of any of the Bonds or the exclusion from gross income for federal income tax purposes of interest on the Tax-Exempt Bonds; shall provide the Authority and the Trustee with an Opinion of Counsel(c) to the Lessee (which may be rendered in reliance upon the Opinion of Counsel to such other corporation), stating that none of the other corporations which are a party to such consolidation, merger or transfer has any pending litigation other than that arising in the ordinary course of business or, has any pending litigation which might reasonably result in a substantial adverse judgment. For the purposes of the preceding sentence, the term “substantial adverse judgment” shall mean a judgment in an amount which exceeds the insurance or reserves therefor by a sum which is more than 2% of the aggregate net worth of the resulting, surviving or transferee corporation immediately after the consummation of such consolidation, merger or transfer and after giving effect thereto; shall provide evidence to the Authority that the surviving or acquiring(d) entity has a consolidated tangible net worth (after giving effect to such consolidation, 34 merger, sale or conveyance) of not less than the consolidated tangible net worth of the Lessee immediately prior to such consolidation, merger, sale or conveyance; shall provide evidence to the Authority that the Days Cash on Hand and(e) the Coverage Ratio of the Lessee for its most recently completed Fiscal Year would not have been reduced if such consolidation, merger, sale or conveyance had occurred during such preceding Fiscal Year; shall deliver to the Trustee within thirty (30) days of the close of such(f) transaction, an Opinion of Counsel that all conditions herein have been satisfied and that all liabilities and obligations of the Lessee under the Lessee Documents shall become obligations of the new entity; provided, however, the Lessee shall not be released from same; and in the case of a consolidation or merger, shall provide to the Trustee and(g) the Authority an Opinion of Counsel to the effect that the surviving entity can continue to operate the Facilities as a charter school in accordance with the Charter School Act and that the entity is entitled to receive the State Payments. Further Assurances. The Lessor and the Lessee agree that they will,Section 8.03. from time to time, execute, acknowledge and deliver, or cause to be executed, acknowledged and delivered, such supplements hereto and such further instruments as may reasonably be required for carrying out the intention of or facilitating the performance of this Lease Agreement, subject, however, to the terms and conditions of Article X of the Indenture. Audits. The Lessee agrees that it will have the books and records of theSection 8.04. Lessee and the School audited annually commencing with the Fiscal Year ended June 30, 2020, by an Accountant as soon as practicable after the close of such Fiscal Year. The Lessee shall furnish such audit report as described in Section 8.05 hereof. Books and Records; Compliance with Continuing DisclosureSection 8.05. Agreement. The Lessee agrees that it will maintain proper books of records and accounts with full, true and correct entries of all of its dealings substantially in accordance with the practices generally accepted for public school accounting. The Lessee shall comply with the terms of the Continuing Disclosure Agreement and shall provide the information required thereby on or before the dates and in the manner set forth therein. The Lessee shall provide the Authority with any of the documents provided under the Continuing Disclosure Agreement upon request by the Authority within thirty (30) days after receipt of the Authority’s request. The Trustee shall have no duty to review or analyze documents, including any reports, financial statements, insurance policies or certificates, or other material delivered to the Trustee under the terms of this Lease Agreement. The Trustee shall only be required to act on such information if it creates an Event of Default hereunder and a notice of such Event of Default is delivered to the Trustee. 35 Indemnification.Section 8.06. To the fullest extent permitted by law, the Lessee agrees to indemnify,(a) hold harmless and defend the Authority, the Authority’s members, the Trustee and each of their respective past, present and future officers, governing members, directors, officials, employees, attorneys and agents (collectively, the “Indemnified Parties”), against any and all losses, damages, claims, actions, liabilities, costs and expenses of any conceivable nature, kind or character (including, without limitation, reasonable attorneys’ fees and expenses, litigation and court costs, amounts paid in settlement and amounts paid to discharge judgments) to which the Indemnified Parties, or any of them, may become subject or under any statutory law (including federal or state securities laws) or at common law or otherwise, arising out of or based upon or in any way relating to: the Bonds, the Indenture, the Lessee Documents or the(i) execution or amendment hereof or thereof or in connection with transactions contemplated hereby or thereby, including the issuance, sale or resale of the Bonds; any act or omission of the Lessee or the Borrower or any of(ii) their agents, contractors, servants, employees or licensees in connection with the Series 2020 Project, this Lease, or the Facilities, the operation of the Series 2020 Project or the Facilities, or the condition, environmental or otherwise, occupancy, use, possession, conduct or management of work done in or about, or from the planning, design, acquisition, installation or construction of, the Series 2020 Project or the Facilities or any part thereof; any lien or charge upon payments by the Lessor or the(iii) Lessee to the Authority or the Trustee, as the case may be, hereunder, or any taxes (including, without limitation, all ad valorem taxes and sales taxes), assessments, impositions and other charges imposed on the Authority or the Trustee in respect of any portion of the Series 2020 Project or the Facilities; any violation of any Environmental Regulations with respect(iv) to, or the release of any Hazardous Substances at, on or under the Facilities or the Series 2020 Project or any part thereof; any defeasance and/or redemption, in whole or in part, of the(v) Bonds; any untrue statement or misleading statement or alleged(vi) untrue statement or alleged misleading statement of a material fact by the Lessee contained in the Offering Document, as may be supplemented from time to time or any other offering statement or disclosure or continuing disclosure document for the Bonds or any of the documents relating to the 36 Bonds to which Lessee is a party, or any omission or alleged omission by the Lessee from the Offering Document, as may be supplemented from time to time or any other offering statement or disclosure or continuing disclosure document for the Bonds of any material fact necessary to be stated therein in order to make the statements made therein by the Lessee, in the light of the circumstances under which they were made, not misleading, or any failure to timely file any continuing disclosure document in connection with the Bonds required by any undertaking or by any applicable law, rule or regulation; any declaration that interest on the Tax-Exempt Bonds is(vii) included in gross income for federal income tax purposes, or allegations that interest on the Tax-Exempt Bonds is included in gross income for federal income tax purposes or any regulatory audit or inquiry regarding whether interest on the Tax-Exempt Bonds is included in gross income for federal income tax purposes; or the Trustee’s acceptance or administration of the trust of the(viii) Indenture, or the exercise or performance of any of its powers or duties thereunder or under any of the documents relating to the Bonds to which it is a party; except (A) in the case of the foregoing indemnification of the Trustee or any of its officers, members, directors, officials, employees, attorneys and agents, to the extent such damages are caused by the negligence or willful misconduct of such Indemnified Party; or (B) in the case of the foregoing indemnification of the Authority or any of its officers, members, directors, officials, employees, attorneys and agents, to the extent such damages are caused by the willful misconduct including the intentional violation of law of such Indemnified Party. In the event that any action or proceeding is brought against any Indemnified Party with respect to which indemnity may be sought hereunder, the Lessee, upon written notice from the Indemnified Party, shall assume the investigation and defense thereof, including the employment of counsel selected by the Indemnified Party, and shall assume the payment of all expenses related thereto, with full power to litigate, compromise or settle the same in its sole discretion; provided that the Indemnified Party shall have the right to review and approve or disapprove any such compromise or settlement. Each Indemnified Party shall have the right to employ separate counsel in any such action or proceeding and participate in the investigation and defense thereof, and the Lessee shall pay the reasonable fees and expenses of such separate counsel; provided, however, that such Indemnified Party may only employ separate counsel at the expense of the Lessee if in the judgment of such Indemnified Party a conflict of interest exists by reason of common representation or if all parties commonly represented do not agree as to the action (or inaction) of counsel, or in the case of the Authority or any of its officers, members, directors, employees, attorneys and agents, such Indemnified Party engages the Attorney General of the State as separate counsel. 37 The rights of any persons to indemnity hereunder and rights to payment(b) of fees and reimbursement of expenses pursuant to this Section and Sections 5.02 and 10.04 hereof shall survive the final payment or defeasance of the Bonds and in the case of the Trustee any resignation or removal. The provisions of this Section shall survive the termination of this Lease Agreement. Authority of Authorized Representative of Lessee. Whenever underSection 8.07. the provisions of this Lease Agreement or the Indenture the approval of the Lessee is required, or the Lessor, the Authority or the Trustee is required to take some action at the request of the Lessee, such approval or such request shall be made by the Authorized Representative of the Lessee unless otherwise specified in this Lease Agreement. The Lessor, the Authority or the Trustee shall be authorized to act on any such approval or request and the Lessee shall have no complaint against the Lessor, the Authority or the Trustee as a result of any such action taken in accordance with such approval or request. The execution of any document or certificate required under the provisions of this Lease Agreement, the Loan Agreement or the Indenture by an Authorized Representative of the Lessee shall be on behalf of the Lessee and shall not result in any personal liability of such Authorized Representative. Authority of Authorized Representative of Lessor. Whenever underSection 8.08. the provisions of this Lease Agreement the approval of the Lessor is required, or the Lessee or the Trustee is required to take some action at the request of the Lessor, such approval or such request shall be made by the Authorized Representative of the Lessor unless otherwise specified in this Lease Agreement, the Loan Agreement or the Indenture. The Lessee or the Trustee shall be authorized to act on any such approval or request and the Lessor shall have no complaint against the Lessee or the Trustee as a result of any such action taken in accordance with such approval or request. The execution of any document or certificate required under the provisions of this Lease Agreement, the Loan Agreement or the Indenture by an Authorized Representative of the Lessor shall be on behalf of the Lessor and shall not result in any personal liability of such Authorized Representative. Licenses and Qualifications. The Lessee will do, or cause to be done,Section 8.09. all things necessary to obtain, renew and secure all permits, licenses and other governmental approvals and to comply, or cause its lessees to comply, with such permits, licenses and other governmental approvals necessary for operation of the Facilities as a charter school (as defined in the Charter School Act) (subject, however, to Section 8.11 hereof). Right to Inspect. Following reasonable notice to the Lessee, at any andSection 8.10. all reasonable times during business hours, the Trustee, the Authority, the Lessor and their duly authorized agents, attorneys, experts, engineers, accountants and representatives, shall have the right (but no duty) fully to inspect the Facilities, including all books and records of the Lessee (excluding records the confidentiality of which may be protected by law), and to make such copies and memoranda from and with regard thereto as may be desired; provided, however, that they shall maintain these books and records in confidence unless required by applicable law to do otherwise and it is necessary to distribute the information to some other third party under applicable law. 38 Assignment and Subleasing. This Lease Agreement may not beSection 8.11. assigned by the Lessee for any reason other than to a successor by operation of law. However, the Facilities may be subleased to any other person or entity, as a whole or in part, by the Lessee, with the consent of the Lessor, and subject to each of the following conditions: this Lease Agreement and the obligations of the Lessee hereunder, shall,(a) at all times during the Lease Term remain obligations of the Lessee subject to Sections 5.01 and 5.02 of this Lease Agreement, and the Lessee shall maintain its obligations to the Lessor, notwithstanding any sublease; the Lessee shall furnish or cause to be furnished to the Lessor a copy of(b) any Lease Agreement; no sublease by the Lessee shall violate the Constitution or laws of the(c) State; and the Facilities may be conveyed or subleased, in whole or in part, only to(d) another entity or entities if, in the opinion of nationally recognized Bond Counsel, such conveyance or sublease will not impair the exclusion from gross income for purposes of federal income taxation of the Tax-Exempt Bonds. Prohibited Use. No portion of the proceeds of the Bonds shall be usedSection 8.12. to finance any facility, place or building used or to be used for sectarian instruction or study or as a place of devotional activities or religious worship, in such a manner or to such an extent as would result in any of the Tax-Exempt Bonds being treated as an obligation not described in Section 103(a) of the Code, or by a Person that is not an organization described in Section 501(c)(3) of the Code or a “governmental unit” (as defined in the Code) or by an organization described in Section 501(c)(3) of the Code (including the Corporation) in an “unrelated trade or business” (as defined in the Code), in such a manner or to such an extent as would result in any of the Tax-Exempt Bonds being treated as an obligation not described in Section 103(a) of the Code. Limitations on Incurrence of Additional Indebtedness.Section 8.13. Senior Indebtedness. The Lessee shall not incur additional Indebtedness(a) or Long-Term Indebtedness Unrelated to the School secured by Liens on any portion of the Facilities or the Revenues that are senior to the Lien of any Deed of Trust on any portion of the Facilities or the security interest in the Revenues granted by this Lease Agreement and any Deed of Trust. Long-Term Indebtedness. The Lessee may incur additional Long-Term(b) Indebtedness if either of the following tests is met: the Coverage Ratio for the most recent Fiscal Year for(i) which an audit has been completed was at least 1.10 to 1 (taking into 39 account the proposed additional Long-Term Indebtedness and any Long- Term Indebtedness to be refinanced thereby); or a Management Consultant reports that (A) the Coverage(ii) Ratio for the most recent Fiscal Year for which an audit has been completed was at least 1.10 to 1, and (B) the Coverage Ratio for each of the first three consecutive Fiscal Years following the incurrence of such Long-Term Indebtedness or, if such Long-Term Indebtedness is being issued to finance improvements, equipment or new facilities, the first three consecutive Fiscal Years after such improvements, equipment or new facilities are placed in service, is projected to be at least 1.20 to 1 (taking into account the proposed additional Long-Term Indebtedness and any Long-Term Indebtedness to be refinanced thereby and provided that, such projected Net Income Available for Lease Payments shall be adjusted to provide for any projected revenues and expenses anticipated as the result of any real or personal property acquired, constructed, or completed with the proceeds of any such Long-Term Indebtedness). For the purposes of calculating “Coverage Ratio” for this subsection (b), “Coverage Ratio” means the ratio obtained by dividing (i) Net Income Available for Lease Payments for the Fiscal Year being tested by (ii) Maximum Annual Lease Payments plus, without duplication, Maximum Annual Debt Service (which Maximum Annual Debt Service shall not include any payments with respect to the Series 2020 Bonds). Completion Indebtedness. The Lessee may issue Completion(c) Indebtedness in an amount not to exceed 10% of the original Indebtedness issued for the purpose of financing certain Capital Improvements, if the following conditions are met: (i) the Lessee certifies, in writing, to the Trustee that at the time the original Indebtedness issued for the purpose of financing certain Capital Improvements was incurred, the Lessee believed or had reason to believe that the proceeds of such Indebtedness together with other moneys then expected to be available to pay for such Capital Improvements would provide sufficient moneys for the completion thereof; (ii) a Consulting Architect provides the Trustee with a written statement specifying the amount necessary to complete such Capital Improvements; and (iii) the Lessee certifies, in writing, to the Trustee that the proceeds of the proposed Completion Indebtedness, together with other legally available moneys of the Lessee, will be in an amount equal to the amount set forth in clause (ii) of this subsection. Refunding Indebtedness. The Lessee may issue Refunding Indebtedness,(d) provided that the Lessee certifies, in writing, to the Trustee that the Maximum Annual Debt Service will not be increased by more than 10% by such refunding. Balloon Indebtedness. The Lessee may issue Balloon Indebtedness if the(e) conditions set forth in subsection 8.13(b)(i) or subsection 8.13(b)(ii) are met when it is assumed that: (A) the Balloon Amount is Long-Term Indebtedness maturing over a term equal to the term of the Balloon Amount or a term of 20 years from the date of 40 issuance of the Balloon Indebtedness, whichever is greater; and (B) the Balloon Amount bears interest on the unpaid principal balance at the Projected Rate and is payable on a level debt service basis over a 20-year period. Put Indebtedness. The Lessee may issue Put Indebtedness if:(f) (A) at the time such Put Indebtedness is incurred a(i) Financial Institution has provided a binding commitment that provides for the amortization of Indebtedness incurred under such commitment over a term of at least 24 months commencing with the next succeeding Put Date, to provide financing sufficient to pay such Put Indebtedness on the Put Date occurring during the term of such commitment; and (B) the conditions set forth in subsection 8.13(b)(i) or subsection 8.13(b)(ii) are met when it is assumed that the Put Indebtedness is Long-Term Indebtedness that bears interest at the Projected Rate and is payable on a level debt service basis over a 25-year period; or (A) the period from the date of incurrence of the(ii) proposed Put Indebtedness to the first Put Date is at least 36 months and (B) the conditions set forth in clause subsection 8.13(b)(i) or subsection 8.13(b)(ii) are met when it is assumed that the Put Indebtedness is Long- Term Indebtedness that either: (i) bears interest at the fixed rate applicable to the Put Indebtedness to be incurred (with such fixed interest rate applied over the entire term of the Indebtedness, for purposes under this subsection 8.13(f)(ii)); or (ii) bears interest at the Projected Rate and is payable on a level debt service basis over a 25-year period. Short-Term Indebtedness, Non-Recourse Indebtedness, and Subordinated(g) Indebtedness. The Lessee may incur Short-Term Indebtedness, Non-Recourse Indebtedness, and Subordinated Indebtedness provided that in no event shall the aggregate principal amount of all Short-Term Indebtedness, Non-Recourse Indebtedness, and Subordinated Indebtedness outstanding at any time exceed the greater of $500,000 or 5% of the Lessee's operating revenues of the School for the last preceding Fiscal Year for which audited financial statements have been prepared pursuant to Section 8.04 hereof. Long-Term Indebtedness Unrelated to the School. The Lessee may incur(h) Long-Term Indebtedness Unrelated to the School if the Lessee Coverage Ratio for the first Fiscal Year following the incurrence of such Long-Term Indebtedness Unrelated to the School or, if such Long-Term Indebtedness Unrelated to the School is being issued to finance improvements, equipment or new facilities, the Fiscal Year after such improvements, equipment or new facilities are placed in service, is projected to be at least 1.00 to 1 (taking into account the proposed additional Long-Term Indebtedness Unrelated to the School and any Long-Term Indebtedness Unrelated to the School to be refinanced thereby). 41 Short-Term Indebtedness Unrelated to the School. The Lessee may(i) incur Short-Term Indebtedness Unrelated to the School without limitation. Indebtedness may be incurred under any of subsections 8.13(b) through (i) even though other Indebtedness is simultaneously being incurred under a different subsection of this Section 8.13. The various calculations of the amount of Indebtedness, the amortization(j) schedule of such Indebtedness and the Debt Service payable with respect to such Indebtedness for future periods required under certain provisions hereunder shall be made in a manner consistent with the provisions in this subsection. In determining the amount of Debt Service payable on Indebtedness (including, but not limited to Balloon Indebtedness and Put Indebtedness) in the course of the various calculations required under certain provisions hereof, with respect to interest rate assumptions, if the terms of the Indebtedness being considered are such that interest thereon for any future period of time is expressed to be calculated at a varying rate per annum, a formula rate or a fixed rate per annum based on a varying index, then for the purpose of making such determination of Debt Service, interest on such Indebtedness for such period (the “Determination Period”) shall be computed by assuming that the rate of interest applicable to the Determination Period is equal to the average annual rate of interest (calculated in the manner in which the rate of interest for the Determination Period is expressed to be calculated) that was or would have been in effect for the 12-month period immediately preceding the date on which such calculation is made; provided, however, that if such average annual rate of interest cannot be calculated for such entire 12-month period but can be calculated for a shorter period, then the assumed interest rate for the Determination Period shall be the average annual rate of interest that was or would have been in effect for such shorter period; and provided further, that if such average annual rate of interest cannot be calculated for any preceding period of time, then the assumed interest rate for the Determination Period shall be the initial annual rate of interest which is actually applicable to such Indebtedness upon the incurrence thereof. No Indebtedness shall be deemed to arise when Variable Rate Indebtedness is converted to Indebtedness which bears interest at a fixed rate, or when fixed rate Indebtedness is converted to Indebtedness which bears interest at a variable rate, or when the method of computing the variable rate on Variable Rate Indebtedness is changed if any such conversion is in accordance with the provisions applicable to such Indebtedness in effect immediately prior to such conversion. In determining the amount of Debt Service payable on Indebtedness that is Variable Rate Indebtedness that is subject to a Financial Products Agreement that fits (2) of the definition of Financial Products Agreement converting variable rate exposure to fixed rate exposure, the fixed rate shall be what applies. No Debt Service shall be deemed payable with respect to Commitment Indebtedness until such time as funding occurs under the commitment which gave rise to such Commitment Indebtedness, except to the extent that the terms of such Commitment Indebtedness are to be considered pursuant to this Section in determining the amortization schedule and Debt Service payable with respect to the Indebtedness 42 supported by the commitment which gave rise to such Commitment Indebtedness. From and after such funding, the amount of such Debt Service shall be calculated in accordance with the actual amount required to be repaid on such Commitment Indebtedness and the actual interest rate and amortization schedule applicable thereto, utilizing the various assumptions in this Section. No Indebtedness shall be deemed to arise when any funding occurs under any such commitment or any such commitment is renewed upon terms which provide for substantially the same terms of repayment of amounts disbursed pursuant to such commitment as obtained prior to such renewal. In making any determination of or with regard to Debt Service hereunder, the Trustee may rely on certificates, opinions and reports of Consultants as it deems appropriate. For the avoidance of doubt, the Lessee may only incur additional Indebtedness pursuant to this Section 8.13 so long as no Event of Default has occurred and is continuing under this Lease Agreement. In connection with the Lessee’s incurrence of parity additional Indebtedness pursuant to this Section 8.13, the Lessee shall enter into such documentation as may be necessary to reflect and implement the parity position of such Indebtedness. Such documentation may consist of, but is not limited to, a custody and parity lien agreement, intercreditor agreement or deposit account control agreement (the “Parity Agreement”) with a representative of the holders of the parity Indebtedness (a “Parity Trustee”) and a third party (the “Indebtedness Custodian”). The Indebtedness Custodian will (a) hold all sums held by it for the payment of principal of (and premium, if any) or interest or any other amounts on the Bonds and the parity Indebtedness in trust for the benefit of the Trustee and the Parity Trustee until such sums shall be paid to such entities or otherwise disposed of as therein provided; and (b) give the Trustee notice of any default by the Lessee in the making of any such payment of principal (and premium, if any) or interest or any other amounts. Any Revenues collected by the Indebtedness Custodian under the Parity Agreement and any proceeds of any sale of the Facilities, whether made under any power of sale herein granted or pursuant to judicial proceedings, together with, in the case of an entry or sale as otherwise provided herein, any other sums then held by the Indebtedness Custodian under the Parity Agreement, shall be applied to the payment of the Bonds and the other parity Indebtedness in a prorata fashion based on then Outstanding principal amount of the Bonds and the then outstanding principal amount of parity Indebtedness. No holder of any parity Indebtedness shall have any right to institute any proceeding, judicial or otherwise, with respect to the documents related to such parity Indebtedness, or for the appointment of a receiver or trustee, or for any other remedy thereunder, unless: (i)such holder has previously given written notice to the Trustee of a continuing event of default; and 43 (ii)the holders of not less than 50% in principal amount of all parity Indebtedness Outstanding shall have made written request to institute proceedings in respect of such event of default; it being understood and intended that no one or more holders of any parity Indebtedness shall have any right in any manner whatever by virtue of, or by availing of, any provision of the documents related to the applicable parity Indebtedness to affect, disturb or prejudice the rights of any other holder of parity Indebtedness, or to obtain or to seek to obtain priority or preference over any other holders, or to enforce any right under their respective documents, except in the manner herein provided and for the equal and ratable benefit of all the holders of parity Indebtedness. Operating Leases. The Lessee will not enter into any operating leasesSection 8.14. for facilities to be paid from Revenues unless the Lessee has delivered to the Trustee: Evidence that (1) the ratio for the immediately preceding Fiscal Year of(a) (i) Net Income Available for Lease Payments (provided that for purposes of this Section 8.14, the definition of Net Income Available for Lease Payments shall also exclude base lease payments paid pursuant to the operating lease) to (ii) Actual Annual Debt Service plus Actual Annual Lease Payments plus the first year of payments to paid pursuant to the operating lease was at least 1.10 to 1 and (2) an opinion or report based on a feasibility study of an Independent consultant that for each of the two succeeding Fiscal Years occurring after the commencement of the lease term, the ratio of (i) Net Income Available for Lease Payments to (ii) Actual Annual Debt Service plus Actual Annual Lease Payments plus the payments to be paid pursuant to the operating lease is projected to be at least 1.20 to 1; or Evidence of the consent of the Beneficial Owners (as defined in the(b) Indenture) of not less than a majority in aggregate principal amount of the Bonds then Outstanding (as defined in the Indenture). Covenant to Comply with Indenture and Loan Agreement. TheSection 8.15. Lessee hereby acknowledges receipt of the Indenture and the Loan Agreement, agrees to be bound by the respective terms thereof and accepts all obligations and duties imposed thereby. Liens. Except as specifically provided in this Lease Agreement, theSection 8.16. Lessee covenants not to create, assume, incur or suffer to be created, assumed or incurred any Lien (other than Permitted Encumbrances) on the Facilities or the Revenues or any accounts holding Revenues. Lease Blocked Account Agreement. Lessee hereby pledges to LessorSection 8.17. and covenants and agrees to deposit all monies paid from the San Bernardino Office of Education, immediately upon receipt thereof (or to direct any third party or the San Bernardino County Office of Education to deposit such amounts on the date available, if at any time Lessee determines that the San Bernardino County Office of Education would follow such direction) into the blocked account (the “Blocked Account”) established pursuant to the Lease Blocked Account Agreement for disbursement as specified in the Blocked Account Agreement. 44 Except as provided in the Lease Blocked Account Agreement, the Lessee hereby covenants and agrees that it will not terminate or amend the Lease Blocked Account Agreement unless it has delivered to the Lessor and the Trustee written evidence of the consent of the Registered Owners of not less than a majority in aggregate principal amount of the Bonds then Outstanding regarding such termination or amendment. Days Cash on Hand. The Lessee hereby covenants and agrees that theSection 8.18. School will maintain the Days Cash on Hand Requirement. As provided in Section 8.05(d), the Lessee will deliver, not later than December 31 following the end of each of the Borrower’s Fiscal Years, commencing with the Fiscal Year ended [June 30, 2020], to the Lessor, the Trustee and the Underwriter a certificate stating the Days Cash on Hand for the Fiscal Year then ended. Commencing with the Fiscal Year ending [June 30, 2020], if such Days Cash on Hand is below the Days Cash on Hand Requirement as of any June 30, the Lessee shall retain a Management Consultant within sixty (60) days following the reporting of such failure at the Lessee’s expense. The Lessee shall cause the Management Consultant to submit a written report and make recommendations within forty- five (45) days of being retained (a copy of such report and recommendations shall be filed with the Lessor, the Underwriter and the Trustee) with respect to financial matters of the Lessee which are relevant to increasing the Days Cash on Hand to at least the required level. Copies of such recommendations shall be filed with the Lessor, the Underwriter and Trustee. The Lessee agrees that promptly upon the receipt of such recommendations, subject to applicable requirements or restrictions imposed by law, or to the extent practical, it shall revise its methods of operation and shall take such other reasonable actions as shall be in conformity with the recommendations. So long as the Lessee shall retain a Management Consultant and complies with such Management Consultant's recommendations to the extent practical or not prohibited by law, no default or Event of Default shall be declared solely by reason of a violation of the requirements of this Section. Coverage Ratio. As provided in Section 8.05(d), the Lessee willSection 8.19. deliver, not later than December 31 following the end of each of the Lessee’s Fiscal Years, to the Trustee and the Underwriter a certificate in the form attached hereto as Exhibit D stating the Coverage Ratio for the Fiscal Year then ended, commencing with the Fiscal Year ending [June 30, 2020]. The Coverage Ratio shall be 1.10 or above for each Fiscal Year commencing with the Fiscal Year ending [June 30, 2020]. Commencing with the Fiscal Year ending [June 30, 2020], if such Coverage Ratio is below 1.10, the Lessee shall retain a Management Consultant within sixty (60) days following the reporting of such failure at the Lessee’s expense. The Lessee shall cause the Management Consultant to submit a written report and make recommendations within forty-five (45) days of being retained (a copy of such report and recommendations shall be filed with the Underwriter and the Trustee) with respect to increasing Revenues, decreasing Operating Expenses or other financial matters of the Lessee which are relevant to increasing the Coverage Ratio to at least the required level. The Lessee will, subject to the exceptions in the next sentence, adopt and follow the recommendations of the Management Consultant and will thereafter calculate the Coverage Ratio for each succeeding fiscal quarter. So long as the Management Consultant determines that the Lessee is demonstrating reasonable diligence to comply with the appropriate recommendations (excepting 45 certain limited instances when an Opinion of Counsel is obtained excusing such actions by the Lessee or where the Lessee makes a good faith determination in a statement to the Trustee that the Management Consultant’s recommendations would violate State or federal law, the educational or charitable purpose of the Lessee or the Charter School Contract) and the Coverage Ratio does not fall below 1.0 to 1 in any fiscal quarter, the Lessee will be deemed to have complied with its covenants hereunder. The Lessee shall continue to retain the Management Consultant until the Lessee has achieved a Coverage Ratio of at least the required level for at least two consecutive fiscal quarters. In the event that the Coverage Ratio is below 1.0 to 1 an event of default shall have occurred hereunder. Any contract entered into between the Lessee and any Management Consultant engaged by the Lessee pursuant to this Section 8.19 must meet the requirements of this Lease Agreement and the Tax Regulatory Agreement. Subordination. To the extent permitted by Internal Revenue ServiceSection 8.20. Revenue Procedure 2017-13, the Lessee hereby covenants and agrees: (1) this Lease Agreement at all times shall automatically be subordinate to the Deed of Trust (unless waived in writing by the beneficiary pursuant to the Deed of Trust (the “Beneficiary”) thereunder), (2) Lessee shall attorn to the Beneficiary and any purchaser at a foreclosure sale, such attornment to be self-executing and effective upon acquisition of title to the Property (as that term is defined in the Deed of Trust) by any purchaser at a foreclosure sale or by the Beneficiary in any manner; (3) to execute such further evidences of attornment and subordination as a mortgagee or any purchaser at a foreclosure sale may from time to time request, including a subordination and attornment agreement in form and substance acceptable to the Beneficiary or any purchaser in its sole discretion; (4) this Lease Agreement shall not be terminated by foreclosure or any other transfer of the Property; (5) after a foreclosure sale of the Property, a Beneficiary or any other purchaser at such foreclosure sale may, at the Beneficiary’s or such purchaser’s option, accept or terminate this Lease Agreement; and (6) the Lessee shall, upon receipt after the occurrence of an Event of Default of a written request from the mortgagee, pay all “Rents” (as that term is defined in the Deed of Trust) payable under this Lease Agreement to the mortgagee. Investor Call. On or about each February 15, commencing on or aboutSection 8.21. February 15, 2021, the Borrower and the Lessee shall arrange a conference call with Registered Owners, Beneficial Owners, and potential purchasers of the Series 2020 Bonds, regarding performance of the Lessee and the School for the period ending with the preceding June 30. The Borrower and the Lessee shall provide at least 15 days' notice of such calls to EMMA. Subordination of Support Office Service Fees. If the School entersSection 8.22. into an Administrative Services Agreement for the payment of Support Office Service Fees to the Lessee or any supporting organization of Lessee under Internal Revenue Code Section 509(a)(3), with respect to the School, so long as Bonds remain outstanding, the Lessee covenants and agrees that such Administrative Services Agreement shall provide (to the extent permitted by Rev. Proc. 2017-13, published by the U.S. Treasury Department on January 17, 2017, or subsequent or supplemental guidance) that: (i) the obligation of the Lessee to pay Support Office Service Fees relating to the School shall be subordinate to its payment of 46 operating expenses of the School and Lease Payments to the Lessor under this Lease; (ii) the obligation of Lessee to pay Support Office Service Fees relating to the School shall be suspended for any such time as the payment of Support Office Service Fees would cause Lessee to fail to meet any of the financial covenants contained in this Lease; and (iii) during any period of time when Support Office Service Fees remain unpaid, such fees shall accrue without interest. If Lessee has not engaged a separate manager with respect to the School, Lessee agrees that it shall not apply any Revenues to costs and expenses of management unless and until all Lease Payments are fully paid and the Loan is not in default. The Lessee covenants and agrees to enter into an Administrative Services Agreement with the School by not later than June 30, 2020, which shall subordinate the obligations to pay Support Office Service Fees thereunder to the payment of operating expenses of the School and Lease Payments to the Lessor under this Lease in accordance with clauses (i) through (iii) above. ARTICLE IX ASSIGNMENT AND PLEDGE BY LESSOR The Lessor shall assign certain of its rights and interests in and under this Lease Agreement to the Authority pursuant to the Loan Agreement as security for payment of the principal of, premium, if any, and interest on the Promissory Note, and the Authority will further assign its rights under the Lease Agreement to the Trustee pursuant to the Indenture as security for payment of the principal of, premium, if any, and interest on the Bonds. The Lessee hereby consents to such assignments. ARTICLE X EVENTS OF DEFAULT AND REMEDIES Events of Default. The following shall be Events of Default of theSection 10.01. Lessee under this Lease Agreement, and the term Event of Default shall mean, whenever it is used in this Lease Agreement, any one or more of the following events: Failure by the Lessee to make the Lease Payments required by(a) Section 5.02 hereof by the Base Lease Payment Date. Failure by the Lessee to observe or perform any other covenant,(b) condition or agreement on its part to be observed or performed herein other than as referred to in subsection (a) above, for a period of thirty (30) days after written notice specifying such failure and requesting that it be remedied shall have been given to the Lessee by the Lessor, the Authority or the Trustee; provided, with respect to any such failure covered by this subsection (b), no Event of Default shall be deemed to have occurred so long as a course of action adequate in the judgment of the Trustee to remedy such failure shall have been commenced within such thirty-day period and shall thereafter be diligently pursued to completion and the failure shall be remedied within ninety (90) days of such occurrence, unless said remedy cannot be performed within ninety (90) days and the Lessee is actively working toward a remedy. 47 The dissolution or liquidation of the Lessee, or failure by the Lessee to(c) promptly contest and have lifted any execution, garnishment or attachment of such consequence as will impair its ability to meet its obligations with respect to the operation of its charter schools or to make any payments under this Lease Agreement. The phrase “dissolution or liquidation of the Lessee,” as used in this subsection, shall not be construed to include the cessation of the corporate existence of the Lessee resulting either from a merger or consolidation of the Lessee into or with another domestic corporation or a dissolution or liquidation of the Lessee following a transfer of all or substantially all of its assets under the conditions permitting such actions contained in Section 8.02 hereof. The entry of a decree or order for relief by a court having jurisdiction in(d) the premises in respect of the Lessee in an involuntary case under the federal bankruptcy laws, as now or hereafter constituted, or any other applicable federal or State bankruptcy, insolvency or other similar law, or appointing a receiver, liquidator, assignee, custodian, trustee, sequestrator (or other similar official) of the Lessee or for any substantial part of its property, or ordering the winding-up or liquidation of its affairs and the continuance of any such decree or order unstayed and in effect for a period of sixty (60) consecutive days. The commencement by the Lessee of a voluntary case under the federal(e) bankruptcy laws, as now or hereafter constituted, or any other applicable federal or State bankruptcy, insolvency or other similar law, or the consent by it to the appointment of or taking possession by a receiver, liquidator, assignee, trustee, custodian, sequestrator (or other similar official) of the Lessee or for any substantial part of its property, or the making by it of any assignment for the benefit of creditors, or the failure of the Lessee generally to pay its debts as such debts become due, or the taking of corporate action by the Lessee in furtherance of any of the foregoing. Failure of the Lessee to comply with any covenants contained in the Tax(f) Regulatory Agreement. Lessee violates or fails to observe or perform any terms or conditions of(g) the Ground Lease, and fails to cure the same within any notice or grace period contained in the Ground Lease. The occurrence of an Event of Default under the Indenture, the Loan(h) Agreement, the Deed of Trust or any of the Lessee Documents. Any representation or warranty made by the Lessee herein or made by(i) the Lessee in any statement or certificate furnished by the Lessee either required hereby or in connection with the execution and delivery of this Lease Agreement and the sale and the issuance of the Bonds shall prove to have been untrue in any material respect as of the date of the issuance or making thereof. Judgment for the payment of money in excess of $50,000.00 (which is(j) not covered by insurance) is rendered by any court or other governmental body against 48 the Lessee, and the Lessee does not discharge same or provide for its discharge in accordance with its terms, or procure a stay of execution thereof within sixty (60) days from the date of entry thereof, and within said sixty-day period or such longer period during which execution of such judgment shall have been stayed, appeal therefrom and cause the execution thereof to be stayed during such appeal while providing such reserves therefor as may be required under Generally Accepted Accounting Principles. A writ or warrant of attachment or any similar process shall be issued by(k) any court against the Facilities, and such writ or warrant of attachment or any similar process is not released or bonded within sixty (60) days after its entry. Any of the Lessee’s representations and warranties herein or in any of(l) the other Lessee Documents with respect to environmental matters are false in any material respect. The termination of the Charter School Contract either by its terms or for(m) any other reason. The foregoing provisions of subsection (b) of this Section 10.01 are subject to the following limitations: If by reason of force majeure the Lessee is unable in whole or in part to carry out its agreements herein contained, other than the obligations on the part of the Lessee contained in Article V and in Sections 6.02, 6.03, 6.06 and 8.06 hereof, the Lessee shall not be deemed in default during the continuance of such inability. The term “force majeure” as used herein shall mean, without limitation, the following: acts of God; strikes, lockouts or other industrial disturbances; acts of public enemies; orders of any kind of the government of the United States or of the State or any of their departments, agencies or officials, or any civil or military authority; insurrections; riots; epidemics; landslides; lightning; earthquake; fire; hurricane; tornadoes; storms; floods; washouts; droughts; arrests; restraint of government and people; explosions; breakage or accident to machinery, transmission pipes or canals; partial or entire failure of utilities; or any other cause or event not reasonably within the control of the Lessee. The Lessee agrees, however, if possible, to remedy with all reasonable dispatch the cause or causes preventing it from carrying out its agreements; provided, that the settlement of strikes, lockouts and other industrial disturbances shall be entirely within the discretion of the Lessee, and the Lessee shall not be required to make settlement of strikes, lockouts or other industrial disturbances by acceding to the demands of the opposing party or parties when such course is in the judgment of the Lessee unfavorable to the Lessee. Remedies On Default. (a) Whenever an Event of Default referred toSection 10.02. in Section 10.01 hereof shall have occurred and is continuing, the Lessor, or the Trustee where so provided herein, may take any one or more of the following remedial steps: The Lessor (or the Trustee acting as assignee of the Lessor,(i) as and to the extent provided in the Indenture) may declare the Lease Payments payable hereunder for the remainder of the Lease Term to be immediately due and payable, whereupon the same shall become due and payable; 49 The Lessor (or the Trustee acting as assignee of the Lessor,(ii) as and to the extent provided in the Indenture) may terminate the Lease Term and give notice to the Lessee to vacate and surrender possession of the Facilities within ten (10) Business Days of such notice; The Lessor (or the Trustee acting as assignee of the Lessor,(iii) as and to the extent provided in the Indenture) may proceed to foreclose through the courts on or otherwise sell, trade-in, repossess or liquidate the Lessee’s interest in the Facilities, or any part thereof, in any lawful manner; The Lessor (or the Trustee acting as assignee of the Lessor,(iv) as and to the extent provided in the Indenture) may lease or sublease the Facilities or any portion thereof or sell any interest the Lessor has in the Facilities; and The Lessor (or the Trustee acting as assignee of the Lessor,(v) as and to the extent provided in the Indenture) may take whatever action at law or in equity as may appear necessary or desirable to collect the amounts then due and thereafter to become due, or to enforce performance or observance of any obligations, agreements or covenants of the Lessee under this Lease Agreement. Notwithstanding the foregoing, prior to the exercise by the Lessor or the(b) Trustee of any remedy that would prevent the application of this paragraph, the Lessee may, at any time, pay all accrued payments hereunder (exclusive of any payments accrued solely by virtue of declaration pursuant to subsection (a)(i) of this Section 10.02) and fully cure all defaults, and in such event, the Lessee shall be fully reinstated to its position hereunder as if such Event of Default had never occurred. In the event that the Lessee fails to make any payment required hereby,(c) the payment so in default shall continue as an obligation of the Lessee until the amount in default shall have been fully paid. Whenever any Event of Default has occurred and is continuing under this(d) Lease Agreement, the Trustee may, but except as otherwise provided in the Indenture shall not be obligated to, exercise any or all of the rights of the Lessor under this Article, upon notice as required to the Lessor. In addition, the Trustee shall have available to it all of the remedies prescribed in the Indenture. Any amounts collected pursuant to action taken under the immediately(e) preceding paragraph (d) (other than sums collected for the Lessor on account of the Lessor’s Unassigned Rights, which sums shall be paid directly to the Lessor), after reimbursement of any costs incurred by the Lessor or the Trustee in connection therewith, shall be applied in accordance with the provisions of the Indenture. If the Lessor or the Trustee shall have proceeded to enforce their rights(f) under this Lease Agreement and such proceedings shall have been discontinued or 50 abandoned for any reason or shall have been determined adversely to the Lessor or the Trustee, then and in every such case, the Lessee, the Lessor and the Trustee shall be restored to their respective positions and rights hereunder, and all rights, remedies and powers of the Lessee, the Lessor and the Trustee shall continue as though no such proceedings had been taken. In the event of any payment by the Lessor, the Lessor shall be(g) subrogated to all of Lessee’s rights of recovery therefor against any Person and the Lessee shall execute and deliver all documents and instruments and perform all actions necessary to secure such rights of the Lessor. No Remedy Exclusive. No remedy herein conferred upon or reservedSection 10.03. to the Lessor is intended to be exclusive of any other available remedy or remedies, but each and every such remedy shall be cumulative and shall be in addition to every other remedy given under this Lease Agreement or now or hereafter existing at law or in equity or by statute. No delay or omission to exercise any right or power accruing upon any default shall impair any such right or power or shall be construed to be a waiver thereof, but any such right or power may be exercised from time to time and as often as may be deemed expedient. In order to entitle the Lessor to exercise any remedy reserved to it in this Article, it shall not be necessary to give any notice, other than notice required herein or by applicable law. Such rights and remedies given the Lessor hereunder shall also extend to the Trustee, the Beneficial Owners and the Registered Owners of the Bonds, subject to the Indenture. Agreement to Pay Attorneys’ Fees and Expenses. In the event theSection 10.04. Lessee should breach any of the provisions of this Lease Agreement and the Lessor or the Trustee should employ attorneys or incur other expenses for the collection of Lease Payments or the enforcement of performance or observance of any obligation or agreement on the part of any Lessee herein contained, the Lessee agrees that it will on demand therefore pay to the Lessor and the Trustee, as the case may be, the reasonable fees of such attorneys and such other reasonable expenses incurred by the Lessor and the Trustee. The obligations of the Lessee arising under this Section 10.04 shall continue in full force and effect notwithstanding the final payment of the Bonds or the termination of this Lease Agreement for any reason. Waiver. In the event any agreement contained in this Lease AgreementSection 10.05. should be breached by any party and thereafter waived by any other party, such waiver shall be limited to the particular breach waived and shall not be deemed to waive any other breach hereunder. In view of the assignment of the Lessor’s rights in and under this Lease Agreement to the Authority under the Loan Agreement and then to the Trustee under the Indenture, the Lessor shall have no power to waive any Event of Default hereunder without the consent of the Trustee. Notwithstanding the foregoing, a waiver of an Event of Default under the Loan Agreement or the Indenture or a rescission of a declaration of acceleration of the Bonds and a rescission and annulment of its consequences shall constitute a waiver of the corresponding Event of Default under this Lease Agreement and a rescission and annulment of its consequences; provided, that no such waiver or rescission shall extend to or affect any subsequent or other default hereunder or impair any right consequent thereon. 51 Treatment of Funds in Bankruptcy. The Lessee acknowledges andSection 10.06. agrees that in the event the Lessee commences a case under the United States Bankruptcy Code located at 11 U.S.C. § 101 et. seq. (the “Bankruptcy Code”) or is the subject of an involuntary case that results in an order for relief under the Bankruptcy Code: (i) amounts on deposit in any of the Funds are not, nor shall they be deemed to be, property of the Lessee’s bankruptcy estate as defined by § 541 of the Bankruptcy Code; (ii) that in no event shall the Lessee assert, claim or contend that amounts on deposit in any of the Funds are property of the Lessee’s bankruptcy estate; and (iii) that amounts on deposit in any of the Funds are held in trust solely for the benefit of the Registered Owners and the Beneficial Owners, shall be applied only in accordance with the provisions of the Indenture, and the Lessee has no legal, equitable or reversionary interest in, or right to, such amounts. ARTICLE XI [RESERVED] ARTICLE XII MISCELLANEOUS Notices. All notices, certificates or other communications hereunderSection 12.01. shall be sufficiently given and shall be deemed given when mailed by Electronic Means, certified mail, return receipt requested, postage prepaid, facsimile or overnight courier, addressed as follows: If to the Lessee:The High Desert “Partnership in Academic Excellence” Foundation, Incorporated 17500 Mana Road Apple Valley, CA 92307 Attention: Lisa Lamb, President/CEO Telephone: (716) 946-5414 Email: LLamb@lcer.org with a copy to:Young, Minney & Corr LLP 655 University Avenue, #150 Sacramento, California 95825 Attention: Sarah Kollman, Esq. Telephone: (916) 646-1400 Email: skollman@mycharterlaw.com If to the Lessor:230 South Waterman Avenue LLC 17500 Mana Road Apple Valley, CA 92307 Attention: Lisa Lamb, President/CEO Telephone: (716) 946-5414 Email: LLamb@lcer.org 52 with a copy to:Young, Minney & Corr LLP 655 University Avenue, #150 Sacramento, California 95825 Attention: Sarah Kollman, Esq. Telephone: (916) 646-1400 Email: skollman@mycharterlaw.com If to the Authority:California Enterprise Development Authority 2150 River Plaza Drive, Suite 275 Sacramento, California 95833 Attention: Chair Telephone: (916) 448-8252 Email: gsahota@caled.org If to the Trustee:Wilmington Trust, National Association 650 Town Center Drive, Suite 800 Costa Mesa, California 92626 Telephone: (714) 384-4153 If to the Underwriters BB&T Capital Markets 1880 Century Park East, Suite 400 Los Angeles, California 90067 Attention: Debra Boyd Telephone: (310) 975-8387 Email: dsboyd@bbandtcm.com RBC Capital Markets, LLC 777 S. Figueroa Street, Suite 850 Los Angeles, California 90017 Attention: John Solarczyk Telephone: (213) 362-4115 Email: john.solarczyk@rbccm.com A duplicate copy of each notice, certificate or other communication given hereunder by the Lessor or the Lessee shall also be given to the Trustee. The Authority, the Lessor, the Lessee or the Trustee may, by notice hereunder, designate any further or different addresses to which subsequent notices, certificates or other communications shall be sent. Binding Effect. This Lease Agreement shall inure to the benefit of andSection 12.02. shall be binding upon the Lessor and the Lessee, and their respective successors and assigns, subject, however, to the limitations contained in Section 8.02, Article IX and Section 12.12 hereof. Severability. In the event any provision of this Lease Agreement shallSection 12.03. be held invalid or unenforceable by any court of competent jurisdiction, such holding shall not invalidate or render unenforceable any other provision hereof. 53 Third Party Beneficiaries. Each of the Authority, Indemnified PartiesSection 12.04. and the Registered Owners are intended “Third Party Beneficiaries” of this Lease Agreement. Nothing in this Lease Agreement shall confer any right upon any person other than parties hereto, and those specifically designated as Third Party Beneficiaries of this Lease Agreement. Net Lease. This Lease Agreement shall be deemed and construed to beSection 12.05. a “triple net lease,” and the Lessee shall pay absolutely net during the Lease Term, the Base Lease Payments, Additional Lease Payments and all other payments required hereunder, free of any deductions, and without abatement, deduction or setoff (other than credits against the Base Lease Payments expressly provided for in this Lease Agreement). Amendments, Changes And Modifications. Except as otherwiseSection 12.06. provided in this Lease Agreement or in the Indenture, this Lease Agreement may not be effectively amended, changed, modified, altered or terminated without the written consent of the Authority and the Trustee. Execution in Counterparts. This Lease Agreement may be executedSection 12.07. in several counterparts, each of which shall be an original and all of which shall constitute but one and the same instrument. Governing Law. This Lease Agreement shall be governed by andSection 12.08. construed in accordance with the laws and judicial decisions of the State, except as such laws may be preempted by any federal rules, regulations and laws. Unless otherwise required by California law, the parties hereto expressly acknowledge and agree that any judicial action to interpret or enforce the terms of this Lease Agreement shall be brought and maintained in State and federal courts in San Bernardino County, California or the United States Bankruptcy Court in any case involving or having jurisdiction over the Lessee or the Facilities. To the extent that any provision of this Lease Agreement conflicts with any provision of the Charter School Act in effect on the date of final execution of this Lease Agreement, the provisions of the Charter School Act shall control. Filing. The Lessee shall cause the security interest in any personalSection 12.09. property comprising a part of the Series 2020 Facilities granted to the Authority and the assignment of such security interest to the Trustee to be perfected by the filing of financing statements which shall fully comply with the California Uniform Commercial Code in the office of the Secretary of State of California and in such other office as is at the time provided by law as the proper place for the filing thereof. The parties further agree that all necessary continuation statements shall be filed by the Lessee within the time prescribed by the California Uniform Commercial Code in order to continue such security interests. Cancellation at Expiration of Lease Term. Upon the termination ofSection 12.10. this Lease Agreement, and provided the Bonds have been fully retired and all amounts due hereunder have been paid in full, the Lessor shall deliver to the Lessee any documents and take or cause the Trustee and/or the Authority to take such actions as may be necessary to evidence the termination of this Lease Agreement and the discharge of the Lien of the Deed of Trust. 54 No Pecuniary Liability of Authority. No provision, covenant orSection 12.11. agreement contained in this Lease Agreement, or any obligations herein imposed upon the Authority, or the breach thereof, shall constitute an indebtedness or liability of the Authority within the meaning of any State constitutional provision or statutory limitation or shall constitute or give rise to a pecuniary liability of the Authority, any member, officer or agent of the Authority or a charge against the Authority’s general credit. The Authority has no taxing power. In making the agreements, provisions and covenants set forth in this Lease Agreement, the Authority has not obligated itself except with respect to the application of the Lease Payments, as hereinabove provided. No Personal Liability of Officials of Lessee, Lessor, Authority orSection 12.12. Trustee. None of the covenants, stipulations, promises, agreements and obligations of the Authority, the Trustee, the Lessor or the Lessee contained herein shall be deemed to be covenants, stipulations, promises, agreements or obligations of any official, member, officer, agent or employee of the Authority, the Trustee, the Lessor or the Lessee in his or her individual capacity, and no recourse shall be had for the payment of the principal of or premium, if any, or interest on the Bonds or for any claim based thereon or any claim hereunder against any official, officer, member, agent or employee of the Authority, the Lessor or the Lessee or any officer, member, agent, servant or employee of the Trustee or any natural person executing any Bond, including any officer or employee of the Trustee. No Warranty by Lessor. THE LESSEE RECOGNIZES THAT,Section 12.13. BECAUSE THE COMPONENTS OF THE SERIES 2020 FACILITIES HAVE BEEN AND ARE TO BE SELECTED BY IT, THE LESSOR HAS NOT MADE ANY INSPECTION OF THE SERIES 2020 FACILITIES OR OF ANY FIXTURE OR OTHER ITEM CONSTITUTING A PORTION THEREOF, AND THE LESSOR MAKES NO WARRANTY OR REPRESENTATION, EXPRESS OR IMPLIED OR OTHERWISE, WITH RESPECT TO THE SAME OR THE LOCATION, USE, DESCRIPTION, DESIGN, MERCHANTABILITY, FITNESS FOR USE FOR ANY PARTICULAR PURPOSE, CONDITION OR DURABILITY THEREOF, OR AS TO THE QUALITY OF THE MATERIAL OR WORKMANSHIP THEREIN, IT BEING AGREED THAT ALL RISKS INCIDENT THERETO ARE TO BE BORNE BY THE LESSEE. IN THE EVENT OF ANY DEFECT OR DEFICIENCY OF ANY NATURE IN THE SERIES 2020 FACILITIES OR ANY FIXTURE OR OTHER ITEM CONSTITUTING A PORTION THEREOF, WHETHER PATENT OR LATENT, THE LESSOR SHALL HAVE NO RESPONSIBILITY OR LIABILITY WITH RESPECT THERETO. THE PROVISIONS OF THIS SECTION HAVE BEEN NEGOTIATED AND ARE INTENDED TO BE A COMPLETE EXCLUSION AND NEGATION OF ANY WARRANTIES OR REPRESENTATIONS BY THE LESSOR, EXPRESS OR IMPLIED, WITH RESPECT TO THE SERIES 2020 FACILITIES OR ANY FIXTURE OR OTHER ITEM CONSTITUTING A PORTION THEREOF, WHETHER ARISING PURSUANT TO THE UNIFORM COMMERCIAL CODE OR ANY OTHER LAW NOW OR HEREAFTER IN EFFECT. Prior Agreements Superseded. This Lease Agreement, together withSection 12.14. all agreements executed by the parties concurrently herewith or in conjunction with the initial issuance of a Series of Bonds, shall completely and fully supersede all other prior 55 understandings or agreements, both written and oral, between the Lessor and the Lessee relating to the Facilities. Covenant by Lessee With Respect to Statements, RepresentationsSection 12.15. and Warranties. It is understood by the Lessee that all such statements, representations and warranties made by it in this Lease Agreement shall be deemed to have been relied upon by the Authority as an inducement to issue the Bonds, and that if any such statements, representations and warranties were false at the time they were made or (with respect to those representations and warranties which are to continue) are breached during the term hereof, such misrepresentation or breach shall constitute a breach of this Lease Agreement which may give rise to an Event of Default hereunder. Captions. The captions and headings in this Lease Agreement are forSection 12.16. convenience only and in no way define, limit or describe the scope or intent of any provisions or sections of this Lease Agreement. Lease Payments Due on Holidays. If the date for making any LeaseSection 12.17. Payment or the last date for performance of any act or the exercise of any right, as provided in this Lease Agreement is not a Business Day, such Lease Payments may be made or act performed or right exercised on the next succeeding Business Day unless otherwise provided herein, with the same force and effect as if done on the nominal date provided in this Lease Agreement. Provision of General Application. Any consent or approval of theSection 12.18. Lessor required pursuant to this Lease Agreement shall be in writing and shall not be unreasonably withheld. Survival. Notwithstanding the payment in full of the Bonds, theSection 12.19. discharge of the Indenture, and the termination or expiration of the Loan Agreement and the Series 2020 Promissory Note and this Lease Agreement, all provisions in this Lease Agreement concerning (a) the tax-exempt status of the Tax-Exempt Bonds (including, but not limited to provisions concerning the payment of the Rebate Amount), (b) the interpretation of this Lease Agreement, (c) the governing law, (d) the forum for resolving disputes, (e) the Authority’s right to rely on facts or certificates, (f) the indemnity of the Indemnified Parties, and (g) the Authority’s and Trustee’s lack of pecuniary liability shall survive and remain in full force and effect. Notice of Change in Fact. The Lessee will notify the Lessor, theSection 12.20. Authority, the Underwriter and the Trustee promptly after the Lessee becomes aware of (i) any change in any material fact or circumstance represented or warranted by the Lessee in this Lease Agreement or in connection with the issuance of a Series of Bonds which would make any such representation or warranty false when made, (ii) any default or event which, with notice or lapse of time or both, could become an Event of Default under this Lease Agreement, the Loan Agreement or the Indenture or any of Lessee’s Document, specifying in each case the nature thereof and what action the Lessee has taken, is taking, and/or proposes to take with respect thereto, (iii) any Internal Revenue Service audit of the Lessee or the 56 Bonds, (iv) any material litigation affecting the Bonds, the Lessee or the Facilities, and (v) any default in any indebtedness of the Lessee. CASp Disclosure. California Civil Code Section 1938 requires LessorSection 12.21. to notify Lessee whether the Premises has undergone inspection by a Certified Access Specialist (“CASp”), as defined in California Civil Code Section 55.52. Lessor hereby states to Lessee that, as of the date this Lease is executed, the property of which the Premises is a part has not undergone such inspection. A CASp can inspect the Premises and determine whether the Premises comply with all of the applicable construction related accessibility standards under California state law. Although California state law does not require a CASp inspection of the Premises, the Lessor may not prohibit Lessee from obtaining a CASp inspection of the Premises for the occupancy or potential occupancy of Lessee, if requested by Lessee. The Parties shall mutually agree on the arrangements for the time and manner of the CASp inspection, the payment of the fee for the CASp inspection, and the cost of making any repairs necessary to correct violations of construction related accessibility standards within the Premises. Notwithstanding the foregoing, Lessee shall be solely responsible for any such inspections and for any repairs that may be deemed necessary in connection with such inspections, and in any case, Lessor shall have the opportunity to have a representative present at any such inspection. Energy Use Disclosure Program. Lessee hereby acknowledges thatSection 12.22. Lessor may be required to disclose certain information concerning the energy performance of the Premises (the “Energy Disclosure Information”) pursuant to California Public Resources Code Section 25402.10 and the regulations adopted pursuant thereto (collectively the “Energy Disclosure Requirements”). If and to the extent not prohibited by applicable laws, Lessee hereby waives any right Lessee may have to receive the Energy Disclosure Information, including, without limitation, any right Lessee may have to terminate this Lease as a result of Lessor’s failure to disclose such information. Further, Lessee hereby releases Lessor from any and all losses, costs, damages, expenses and/or liabilities relating to, arising out of and/or resulting from the Energy Disclosure Requirements, including, without limitation, any liabilities arising as a result of Lessor’s failure to disclose the Energy Disclosure Information to Lessee prior to the execution of this Lease. Lessee’s acknowledgment of the AS-IS condition of the Premises pursuant to the terms of this Lease shall be deemed to include the energy performance of the Premises. Lessee further acknowledges that pursuant to the Energy Disclosure Requirements, Lessor may be required in the future to disclose information concerning Lessee’s energy usage to certain third parties, including, without limitation, prospective purchasers, lenders and lessees of the Premises (the “Energy Use Disclosure”) and Lessee agrees to provide Lessor with all such information as Lessor may require in order to satisfy the Energy Disclosure Requirements. Lessee hereby (i) consents to all such Energy Use Disclosures, and (ii) acknowledges that Lessor shall not be required to notify Lessee of any Energy Disclosure Information. Further, Lessee hereby releases Lessor from any and all losses, costs, damages, expenses and liabilities relating to, arising out of and/or resulting from any Energy Use Disclosure. The terms of this Section shall survive the expiration or earlier termination of this Lease. 57 Waiver of Sections 1932(2) and 1933(4) of the California Code.Section 12.23. The Lessor and Lessee hereby waive any rights to remedies under Sections 1932(2) and 1933(4) of the California Civil Code. (Remainder of page left blank intentionally) 58 IN WITNESS WHEREOF, the Lessor and the Lessee have caused this Lease Agreement to be executed in their respective corporate names by their duly authorized officers, all as of the date first above written. 230 SOUTH WATERMAN AVENUE LLC,a California limited liability company, as Lessor By: Lisa Lamb, Authorized Signatory THE HIGH DESERT “PARTNERSHIP IN ACADEMIC EXCELLENCE” FOUNDATION, INCORPORATED, a California nonprofit public benefit corporation, as Lessee By: Sharon Page, Vice Chairman (Lease Agreement – Norton Science and Language Academy, Series 2020) TERMS ACKNOWLEDGED AND ACCEPTED WILMINGTON TRUST, NATIONAL ASSOCIATION, as Trustee By: Authorized Signatory (Lease Agreement – Norton Science and Language Academy, Series 2020) EXHIBIT A Base Lease Payment Schedule [TO BE PROVIDED] A-1 EXHIBIT B Real Property Description [TO BE PROVIDED] B-1 EXHIBIT C Form of No Default Certificate Date: LESSEE CERTIFICATE TO:WILMINGTON TRUST, NATIONAL ASSOCIATION, AS TRUSTEE (THE “TRUSTEE”), UNDER THE INDENTURE OF TRUST, DATED AS OF JUNE 1, 2020, BY AND BETWEEN THE CALIFORNIA ENTERPRISE DEVELOPMENT AUTHORITY (THE “AUTHORITY”) AND THE TRUSTEE. The undersigned Authorized Representative of the Lessee hereby certifies that (i) a review of the activities of the Lessee during the preceding Fiscal Year of Lessee and Lessee’s performance under the Lessee Documents has been made under his or her supervision; and (ii) he or she is familiar with the provisions of this Lease Agreement and the Tax Regulatory Agreement and, to the best of his or her knowledge, based upon such review and familiarity, the Lessee has fulfilled all of its obligations hereunder and thereunder throughout the Fiscal Year, and that there have been no defaults under this Lease Agreement or the Tax Regulatory Agreement or, if there has been a default in the fulfillment of any such obligation in such Fiscal Year, specifying each such default known to him or her and the nature and the status thereof and the actions taken or being taken to correct such default. THE HIGH DESERT “PARTNERSHIP IN ACADEMIC EXCELLENCE” FOUNDATION, INCORPORATED, a California nonprofit public benefit corporation, as Lessee By: Authorized Representative C-1 EXHIBIT D Form of Coverage Ratio Certificate Date: LESSEE CERTIFICATE TO:WILMINGTON TRUST, NATIONAL ASSOCIATION, AS TRUSTEE (THE “TRUSTEE”), UNDER THE INDENTURE OF TRUST, DATED AS OF JUNE 1, 2020, BY AND BETWEEN THE CALIFORNIA ENTERPRISE DEVELOPMENT AUTHORITY (THE “AUTHORITY”) AND THE TRUSTEE. The undersigned Authorized Representative of the Lessee hereby certifies that the Debt Service Coverage Ratio for the period ending [DATE] was _______. THE HIGH DESERT “PARTNERSHIP IN ACADEMIC EXCELLENCE” FOUNDATION, INCORPORATED, a California nonprofit public benefit corporation, as Lessee By: Authorized Representative