2. DRAFT Ground Lease Nellis Charter High School.pdf

Lease No. USAF-ACC-______________

Nellis Air Force Base Charter High School

Lease No. USAF-ACC-__________________ Nellis AFB – Charter High School Page 1 of 132

GROUND LEASE AGREEMENT

(Nellis High School)

This GROUND LEASE AGREEMENT (the “Lease”) is entered into this DATE the Lease will be signed by and between the UNITED STATES OF AMERICA by and through the

SECRETARY OF THE AIR FORCE (the “Government” or “Lessor”) and The name and address of the school selected to operate on Nellis AFB. The Lessor and Lessee are sometimes collectively referred to herein as the “Parties” and individually as the “Party”.

WITNESSETH

WHEREAS, the Government owns that certain vacant, undeveloped real property situated on

Nellis Air Force Base, Nevada (the “Installation”) consisting of approximately ten contiguous acres, herein by this reference (the “Land” or “Leased Premises”); and

WHEREAS, Lessee desires to finance, design, develop, construct, operate and maintain a new public charter high school facility and campus, grades 9 through 12 with a specialized science, technology, engineering and math (STEM) curriculum, on the Installation; and

WHEREAS, the Government is entering into this Lease pursuant to and in accordance with 10

U.S.C. § 2667 Leases: Non-Excess Property of Military Departments and Defense Agencies; and

WHEREAS, the undersigned, on behalf of the Government, has determined that this Lease fulfills the requirements of 10 U.S.C. § 2667, including those permitting a lease for a longer period than five (5) years; and

WHEREAS, the Government desires to lease the Leased Premises to Lessee and Lessee desires to lease the Leased Premises from the Government for the Permitted Use (as hereinafter defined) and pursuant to and in accordance with the terms and conditions more specifically set forth herein.

NOW WHEREFORE, for and in consideration of the terms, covenants, and conditions hereof, and other good and valuable consideration the adequacy, receipt and sufficiency of which is hereby acknowledged, the Parties agree as follows:

DRAFT

Nellis AFB – Charter High School Page 2 of 132

ARTICLE I.

RECITALS, PREMISES, AND PERMITTED USE

Section 1.01 Recitals. The foregoing recitals are true and correct and hereby incorporated herein by this reference.

Section 1.02 Demise of Leased Premises. Subject to the terms and conditions set forth in this

Lease, the Government hereby leases to Lessee, and Lessee leases from the Government, the

Leased Premises subject to all existing easements, rights-of-way, and all other rights and interests of the Government or others (whether or not of record) encumbering the Leased Premises

(collectively, “Existing Encumbrances”). A list of Existing Encumbrances that are known to and/or maintained in the records of the Installation as of the Effective Date (as hereinafter defined) is included in Exhibit B attached hereto and incorporated herein by this reference.

Section 1.03 Condition of Leased Premises. NOTWITHSTANDING ANYTHING HEREIN TO

THE CONTRARY, LESSEE HEREBY ACKNOWLEDGES AND AGREES THAT THE

GOVERNMENT LEASES THE LEASED PREMISES AND LESSEE ACCEPTS THE LEASED

PREMISES “AS/IS, WHERE IS” WITHOUT ANY REPRESENTATION OR WARRANTY OF

THE GOVERMENT, EXPRESS OR IMPLIED, OF ANY KIND WHATSOEVER. LESSEE

ACKNOWLEDGES THAT THE GOVERNMENT HAS MADE NO REPRESENTATIONS OR

WARRANTIES RELATING TO THE SUITABILITY OF THE LEASED PREMISES FOR ANY

PARTICULAR USE EXCEPT AND UNLESS OTHERWISE EXPRESSLY PROVIDED IN

THIS LEASE, THE GOVERNMENT SHALL HAVE NO OBLIGATION WHATSOEVER TO

REPAIR, MAINTAIN, RENOVATE OR OTHERWISE INCUR ANY COST OR EXPENSE

WITH RESPECT TO THE LEASED PREMISES. THE GOVERNMENT SHALL NOT BE

LIABLE FOR ANY LATENT OR PATENT DEFECTS IN THE LEASED PREMISES.

GOVERNMENT SHALL HAVE NO LIABILITY OR RESPONSIBILITY TO LESSEE FOR

ANY LOSS, DAMAGE OR EXPENSE INCURRED BY LESSEE OCCASIONED BY THE

CONDITION OR CHARACTERISTICS OF THE LEASED PREMISES.

Section 1.04 Permitted Use. The Leased Premises shall be used for the purposes of siting, construction, installation, use, maintenance, repair, and operation of high school (ninth through twelfth grade) consisting of (i) a single story facility consisting of no more than seventy thousand

(70,000) square feet and (ii) related ancillary improvements approved by the Government in accordance with the terms and conditions of this Lease (collectively, sometimes herein referred to as the “School”), for purposes reasonably related thereto (e.g., pre- or post-school parent-teacher meetings, and school-related club or association meetings) and for no other purpose (all the foregoing collectively hereinafter referred to as, the “Permitted Use”).

a. Lessee (or Approved Mortgagee, as the case may be) shall use and manage the Leased

Premises in accordance with all Applicable Laws (as hereinafter defined). Lessee shall not

Nellis AFB – Charter High School Page 3 of 132 permit any unlawful nuisance, waste or injury on the Leased Premises and shall not use the

Leased Premises, nor allow any of its officers, employees, agents, contractors, subcontractors, licensees or invitees to use the Leased Premises for any purpose other than the Permitted Use or in any manner that violates any Applicable Laws.

b. Without limiting the foregoing, Lessee hereby acknowledges and agrees that it shall not use or permit the use of the Leased Premises for any of the following activities: (a) Any use that is unlawful or inherently dangerous or that constitutes waste, unreasonable annoyance, or a nuisance; (b) Activities involving the storage, treatment, transportation, disposal, or manufacture of Toxic or Hazardous Materials (excepting normal cleaning supplies, pesticides, glues, and paints kept and used in reasonable and customary quantities, which shall be reported to the Installation by Lessee for approval by the Government, and listed on the “Environmental Management and Impact Mitigation Plan” in Exhibit D-2);

(c) Activities that the Government determines adversely affect the security of the

Installation or the health, safety, morals, welfare, morale, and discipline of the Armed

Forces, such as the sale or use of drug abuse paraphernalia, illicit gambling, and prostitution; (d) Partisan political activities; or (e) Activities by persons or entities advocating the overthrow of the United States.

Section 1.05 Quiet Use and Enjoyment. The Government agrees that, so long as no Event of

Default (as hereinafter defined) has occurred and is continuing, Lessee shall peaceably and quietly have, hold and enjoy the Leased Premises and other rights granted hereunder in accordance with the terms and conditions of this Lease. The Lessee hereby acknowledges and agrees that consequences of military activity in the ordinary course of missions and operations on a military installation (e.g., jet noise) do not constitute interference, nuisance, hindrance of any kind.

Section 1.06 Signage. If requested by the Lessee, the Government agrees to allow Lessee to post at Lessee’s sole cost and expense, and for Lessee to maintain, reasonable, visible signage directing

Charter School employees, students/parents, and other invitees from gate(s) and/or other access points in the Installation to the location of the School, in accordance with reasonable rules and regulations of the Government and the Installation, including, without limitation, the ID2

Handbook (defined in Section 4.03, below), from time to time, for no additional Rent.

ARTICLE II.

TERM OF LEASEHOLD

Section 2.01 Initial Term. The initial term of this Lease (the “Initial Term”) shall commence on the Effective Date (as hereinafter defined) (the “Commencement Date”) and end at midnight

(eastern standard time) on the anniversary of the Effective Date that is thirty (30) years thereafter unless sooner terminated in accordance with the terms and conditions hereof, or renewed in accordance with Section 2.02 (such end date, the “Expiration Date”).

Section 2.02 Renewal Term. Lessee (or Approved Mortgagee, as the case may be) may, in its discretion, extend the term of this Lease for up to two (2) additional periods of five (5) years per period and a final renewal period of three (3) years (each such period, a “Renewal Term”);

provided that: (i) at least one hundred eighty (180) days prior to expiration of the Initial Term or the then-current Renewal Term, as the case may be, the Lessee (or Approved Mortgagee) has

Nellis AFB – Charter High School Page 4 of 132 provided the Government with written notice triggering extension of the term of this Lease and

(ii) no Event of Default (as hereinafter defined) by Lessee has occurred and not been cured prior to the expiration of the Initial Term or the then-current Renewal Term, as the case may be. The rental for each such Renewal Term shall be calculated as more specifically set forth and pursuant to Section 3.02 below.

Section 2.03 Term. The Initial Term and each Renewal Term, if any, are collectively hereinafter referred to as, the “Term”. If a Renewal Term is triggered in accordance with Section 2.02, the

“Expiration Date” shall automatically be re-defined to be midnight (local time at the Leased

Premises) on the last day of such Renewal Term.

Section 2.04 Holdover Tenancy. Without limiting the foregoing and notwithstanding anything herein to the contrary, in the event that Lessee fails or refuses to vacate and surrender the Leased

Premises after the expiration of the Term of this Lease, the Government, in its sole and absolute discretion, may elect to treat that failure or refusal as an automatic month-to-month holdover tenancy, subject to all the terms and conditions of this Lease, except that rent for such month-to-month tenancy shall be two (2) times the Annual Rent (as hereinafter defined). The terms and conditions of this Section shall survive expiration of this Lease.

ARTICLE III.

RENT

Section 3.01 Initial Payment. On the Effective Date, Lessee shall make a one-time payment of in the amount of TO BE DETERMINED AT THE TIME THE LEASE IS SIGNED BASED ON

THE VALUE OF THE LAND BASED ON FAIR MARKET VALUE to the Government to reimburse the Government for the administrative expenses of entering into this Lease pursuant to

10 U.S.C. § 2695.

Section 3.02 Annual Rent. Unless subject to waiver pursuant to Section 3.02(b) or (c), during the

Term of this Lease, Lessee shall pay to the Government annual rent in the amount of TO BE

DETERMINED AT THE TIME THE LEASE IS SIGNED BASED ON THE VALUE OF THE

LAND BASED ON FAIR MARKET VALUE (the “Annual Rent”) and inaccordance with the rent schedule attached hereto and incorporated herein as Exhibit C (the “Rent Schedule”).

a. Annual Rent shall be due and payable each year during the Term of this Lease in accordance with the Rent Schedule (“Rent Due Date”) in advance without deduction or set off. Annual Rent shall be paid in lawful currency by certified check made payable to

THE UNITED STATES TREASURY and delivered to the Government Attention: Real

Property Office, 99 CES/CEIAP, 6020 Beale Ave, Nellis AFB, NV 89191. Annual Rent for any partial month due during the Term shall be prorated based on the number of days in any such month.

b. Notwithstanding the foregoing, Lessee shall pay ZERO AND 00/100 DOLLARS ($0.00) to the Government in Annual Rent during the construction of the School (i.e., from the

Effective Date through the date on which the School receives its certificate of occupancy and begins classroom operations) but in no event later than the date which is twenty four

(24) months after the Effective Date. It is a condition precedent to this provision having continuing effect that: (i) Lessee is not in breach of this Agreement; (ii) Lessee is diligently

Nellis AFB – Charter High School Page 5 of 132 undertaking the construction project, substantially in accordance with the deadlines and timelines set forth in Article 4.

c. Notwithstanding the foregoing, Lessee shall pay ZERO AND 00/100 DOLLARS ($0.00) to the Government in Annual Rent if:

(1) The Government determines that during any period from September 1 to May 31 of each year during the Term of this Lease (a “School Year”) there are twenty percent

(20%) or more Military-Connected Students (as hereinafter defined) attending

Lessee’s school on the Leased Premises; and

No later than thirty (30) days prior to the Rent Due Date, Lessee shall provide the

Government with verified documentation evidencing each Military-Connected Student enrolled to attend Lessee’s school on the Leased Premises for the proximately occurring

School Year (the “Enrollment Verification”). The Enrollment Verification shall: (i) include the name and address of each Military-Connected Student, (ii) indicate whether that student is a dependent of a military member or a civilian employee of the Department of Defense (either of which constitutes a “Military-Connected Student”), (iii) certify the percentage of Military-Connected Students, as compared to the total of all students enrolled to attend Lessee’s school on the Leased Premises, (iv) be signed by a duly authorized officer or representative of Lessee. The Enrollment Verification shall be provided to the

Installation’s school liaison and real property officer, who shall review it and confirm that it is acceptable to the Government via a written response to Lessee (with a copy to

AFCEC/CIT) from the Installation Commander, or his duly authorized representative, no later than ten (10) business days prior to the Rent Due Date. In this Lease, a “business day” means any day except for a Saturday, Sunday, or federal government holiday.

Section 3.03 Annual Rent Increase. As shown in the Rent Schedule, beginning on the first day of

September of each calendar year during the Term, or a Renewal Term as applicable, of this Lease, the amount of the Annual Rent shall be increased by the lesser of (i) three percent (3%) or

(ii) an amount corresponding to the rise, if any, in the Consumer Price Index for the prior twelve-month period. (As used herein, “Consumer Price Index” shall mean the Consumer Price Index for

All Urban Consumers (1982-84 = 100), U.S. City Average, All Items, published by the United

States Department of Labor, Bureau of Labor Statistics (or such comparable index as may be utilized in substitution for or as the successor to the Consumer Price Index). The Annual Rent shall be calculated as follows. The Parties shall compute the adjustment by multiplying the Annual Rent for the preceding year by a fraction, the numerator of which shall be the index number for the month which was two (2) months prior to the first (1st) month of the lease year for which such adjustment is made and the denominator of which shall be the index number for the month which was two (2) months prior to the first (1st) month of the preceding lease year. In the case of the adjustment at the end of the first lease year, the denominator shall be the index number for the calendar month which was two (2) months before the Rent Due Date. The product so obtained shall be the adjusted Annual Rent.

Nellis AFB – Charter High School Page 6 of 132

Section 3.04 Additional Rent. All sums, liabilities, obligations, and other amounts which Lessee is required to pay or discharge pursuant to this Lease, including taxes (if any) and insurance premiums, in addition to Annual Rent, together with any finance charge, late fees, or other sums which may be added for late payment thereof, shall constitute “Additional Rent” hereunder. The

Annual Rent, Additional Rent, Renewal Rent and any other sums required to be paid by Lessee to

Lessor hereunder are collectively referred to as the “Rent”. All Rent shall be paid without deduction, offset, prior notice, or demand as directed pursuant to this Lease.

Section 3.05 Late Charges and Default Interest. If any installment of Rent is not paid within ten

(10) business days after its due date, then such arrearage shall, consistent with the Debt Collection

Act of 1982 (31 U.S.C. § 3717), (i) bear 5% interest from the due date for amounts past due to the federal government until paid in full; (ii) include a reasonable administrative charge to cover the costs of processing and handling delinquent debts, but not in excess of $100.00; and (iii) include an assessment of an additional 5% penalty charge on any portion of a debt that is more than 90 days past due.

ARTICLE IV.

CONSTRUCTION

Section 4.01 Lessee Improvements. There will be no improvements to be constructed by or for the Lessee off the Leased Premises elsewhere on the Installation. The School and all improvements and facilities ancillary or appurtenant thereto to be constructed by or for Lessee on the Leased

Premises are sometimes collectively herein referred to as, the “Lessee Improvements” or

“Improvements”

Section 4.02 Permitting. Lessee shall, at its sole cost and expense, obtain all federal, state, and local permits and federal, state, and local governmental approvals necessary or required for construction and operation of the Lessee Improvements including, but not limited to, certificate(s) of occupancy and a valid charter agreement with the Nevada State Public Charter School Authority or its successor agency from time to time (collectively, the “Permits and Approvals”), and shall provide the Government copies of such Permits and Approvals as they are obtained, but in no event later than thirty (30) days prior to the Construction Commencement Date, as hereinafter defined, unless (i) otherwise agreed to in writing by the Government or (ii) despite Lessee’s diligent efforts to obtain it, the relevant Permit and Approval is not reasonably obtainable by such deadline (e.g., certificate(s) of occupancy). The Parties hereby acknowledge and agree there are no entitlements being granted or conveyed with the Leased Premises to the Lessee by the Government. As used in this Section, the term “entitlements” means those land or development rights required for the development of the Lessee Improvements on the Leased Premises in accordance with federal, state, and local regulations, rules, ordinances, policies, and laws (but for the avoidance of doubt, not including the leasehold rights granted herein). All actions, uses, and operations occurring on the

Leased Premises shall comply with all applicable terms, conditions and requirements of the

Permits and Approvals. Government, at no cost to Government, shall cooperate reasonably and in good faith with Lessee in all permitting processes; provided, however, in no event shall the

Government be obligated or otherwise be required to cooperate in any manner or take any action regarding the Permits and Approvals which the Government determines is prohibited by or would otherwise be inconsistent with any applicable Federal law, regulation or policy.

Nellis AFB – Charter High School Page 7 of 132

Section 4.03 Construction Plans and Documents. All Lessee Improvements are subject to

Government review and consent, which consent shall not be unreasonably withheld, delayed, or conditioned, as more specifically set forth below. Lessee must ensure that all Lessee Improvements comply with the provisions of the Installation Development and Design (ID2) Handbook, Nellis and Creech Air Force Bases, Nevada, dated August 2011, a copy of which is attached hereto as

Exhibit J.

a. Preliminary Plans. No later than sixty (60) days after the Effective Date of this Lease, Lessee shall deliver a preliminary site plan (including, but not limited to, buildings, restrooms, playground, and parking) and a conceptual infrastructure plan (including, but not limited to, utilities, pedestrian and vehicular ingress/egress, and storm-water)

(collectively, the “Preliminary Plans”) to the Installation Civil Engineer for review and comment. Comments to the Preliminary Plans shall be returned to the Lessee fifteen (15) business days after receipt of the Preliminary Plans.

b. Design, Engineering and Construction Plans. Based upon the Preliminary Plans and all the comments thereto provided by the Installation Civil Engineer, Lessee shall cause to be prepared:

1. fifty percent design, engineering, and construction plans and specifications for the Lessee Improvements (“50% Plans”). No later than one hundred fifty (150) days prior to commencement of construction of the Lessee Improvements, the Lessee shall submit the 50% Plans to the

Installation Civil Engineer for review and comment. Comments shall be returned to the Lessee within fifteen (15) business days of receipt.

2. ninety percent design, engineering, and construction plans and specifications for the Lessee Improvements (“90% Plans”). No later than ninety (90) days prior to commencement of construction of the Lessee

Improvements, the Lessee shall submit the 90% Plans to the Installation

Civil Engineer for review and comment. Comments shall be returned to the Lessee within fifteen (15) business days of receipt.

c. Final Plans and Construction Documents. Based upon the 90% Plans and all comments thereto provided by the Installation Civil Engineer, and no later than sixty (60) days prior to commencement of construction of the Lessee Improvements, the Lessee shall cause to be prepared one hundred percent (100%) design and construction plans and specifications and all other final drawings and documents necessary or required for the design and construction of the Lessee Improvements (“100% Plans”) to the Installation Civil

Engineer and AFCEC/CIUP for review and comment. Comments to the 100% Plans shall be returned to the Lessee within forty-five (45) business days of receipt of 100% Plans.

The Parties hereby acknowledge and agree that since site plans are conceptual at this time and may change depending on subsequent reviews of Preliminary Plans, as part of and in order for the Installation Civil Engineer and AFCEC/CIUP to provide comments to the

100% Plans, the Government will also need to conduct an environmental review of the

100% Plans to ensure the final Environmental Assessment (EA) and Finding of No

Significant Impact (FONSI) has included and addressed all potential impacts to environmental resources. If substantial environmental impacts are not addressed, then

Nellis AFB – Charter High School Page 8 of 132 additional supplemental analysis should occur and may result in, at a minimum, preparation of a Supplemental EA. Lessee shall revise 100% Plans accordance with comments, if any, received from the Installation Civil Engineer and AFCEC/CIUP (as so revised hereinafter collectively referred to as, the “Final Construction Plans and Documents”). The Final

Construction Plans and Documents shall be signed and sealed and shall be certified by the

Lessee’s duly certified, licensed and authorized architect and/or engineer relative to their particular areas of expertise, as meeting the applicable building codes, ordinances, rules, regulations, policies, and laws as well as the industry standards of architects, engineers, and planners for the design and construction of similar structures and improvements.

Without limiting the foregoing, Lessee hereby acknowledges and agrees: (i) no radio or other frequencies which affect or potentially may affect the missions or operations of the

Installation shall be emitted from the Lessee Improvements; (ii) construction on the Leased

Premises will only occur Monday through Friday during the hours of 6:00 am to 10:00 pm

(the Lessee may submit requests for weekend work to Installation Civil Engineer, which requests may be withheld in the sole discretion of the Installation Civil Engineer) (iii) any artificial lighting on the Leased Premises shall not cause a nuisance, unreasonably interfere with, or otherwise be incompatible with the residential uses on the Installation or near the

School; and (iv) Lessee shall construct, manage, and operate the Lessee Improvements in accordance with the following plans attached hereto and incorporated herein by this reference as Composite Exhibit D (collectively the “Additional Plans”):

1. The “Emergency Services Plan” attached hereto and incorporated herein by this reference as Composite Exhibit D-1, detailing how law enforcement and other emergency services (e.g., police, fire protection, hazmat, etc.) will be provided to the Leased Premises and how, for those emergency services the Government may, but is not obligated to, agree to provide such emergency services, and how reimbursements to the Government will be calculated. All reimbursements for emergency services provided by the Government to the Leased Premises, if any, shall be paid as Additional Rent.

2. The “Environmental Management and Impact Mitigation Plan” attached hereto and incorporated herein by this reference as Composite Exhibit D-2 addressing environmental matters of concern to the Government, including environmental mitigation requirements, and which includes a spill plan, asbestos disposal plan, Pesticide Management Plan (as hereinafter defined), and soils management plan, all as may be necessary or required by the Government; and

3. The “Construction Management Plan” attached hereto and incorporated herein by this reference as Composite Exhibit D-3 which references the Construction

Milestone Schedule; addresses and explains any phasing, quality control program, demolition plan for existing improvements (if applicable); and addresses and explains plans for ingress and egress, including haul routes, staging areas, disposition of debris, relocation of any improvements, infrastructure or facilities on the Leased Premises, and other construction-related matters as necessary. The

Construction Management Plan also identifies any temporary structures or facilities needed during the construction phase of the Lessee Improvements.

Nellis AFB – Charter High School Page 9 of 132

Section 4.04 Review and Comment. Except as expressly otherwise provided herein, review by the Government of any and all design and construction plans and specifications and all other drawings and documents necessary or required for the design and construction of the Lessee

Improvements pursuant to this Lease is solely for the purpose of affording the Government an opportunity to advise the Lessee that plans and documents submitted are not adverse to or may otherwise negatively impact the mission and operations of the Installation. In no event shall the

Government’s review or approval be deemed an approval of the Preliminary Plans, Preliminary

Construction Plans and Documents, or Final Construction Plans and Documents for compliance with any technical standards or requirements, or that the same are free of defect. The Lessee shall rely on its own consultants, employees, contractors, representatives and advisors to determine the sufficiency of the design contained in the Final Construction Plans and Documents, and that such design is free of defects and is in compliance with all applicable building codes, ordinances, rules, regulations, policies, and laws, as well as the industry standards of architects, engineers, and planners for the design and construction of similar structures. In the event that the Government requires changes to the plans and documents to ensure that they are not adverse to and do not negatively impact the mission and operations of the Installation, and such changes materially increase the cost of the Lessee Improvements or materially extend the construction schedule for the Lessee Improvements, Lessee may at its election terminate this Lease by giving the

Government written notice of termination, whereupon neither the Government nor the Lessee shall have any further obligation or liability to the other under this Lease.

Section 4.05 Access and Transportation Improvements. Lessee shall, at its sole cost and expense, construct, operate, repair and maintain all pedestrian and vehicular access and transportation improvements (e.g., sidewalks, bus loops, parent drop off loop, etc.) on the Leased

Premises. Lessee, its employees, representatives, contractors, agents, licensees and invitees shall have ingress/egress access to the Leased Premises via the Range Road Access Gate to the

Installation located on Las Vegas Blvd. and the Installation street(s) as depicted on Exhibit E attached hereto and incorporated herein by this reference (the “Access Areas”), unless otherwise directed by the Installation due to maintenance, emergency or other closure. The Government shall not be responsible nor incur any cost or expense for providing transportation or bussing services for the Lessee or the Leased Premises or for the benefit of the Lessee’s operations thereon. In the event Lessee provides bus or transportation services to its students, Lessee shall do so at its sole cost and expense, and shall ensure that any such bus or transport servicing students outside the

Installation access the Leased Premises via the Access Areas.

Section 4.06 Utilities. Lessee hereby acknowledges and agrees that the Government shall not have any obligation or liability for the provision of utility services (including, without limitation, electric, gas, communications, potable water, and wastewater) to the Leased Premises or the

School. Lessee shall be solely responsible for designing, permitting, and constructing all infrastructure and systems necessary for utility service connections and delivery to the Leased

Premises and for obtaining such utility services from available local providers. Lessee shall be responsible for any impact fees, or connection, or tap fees for connection of utilities to the Leased

Premises. Without limiting the foregoing, the Government may, via written agreement pursuant to and in accordance with all the terms, conditions, and requirements of Applicable Laws and Air

Force directives and instructions (including, but not limited to, Air Force Instruction 32-1061), provide Lessee with utility services on a reimbursable basis. Lessee shall submit Form AF103

Base Civil Engineer Work Clearance Requests to the Installation Civil Engineer and obtain his/her

Nellis AFB – Charter High School Page 10 of 132 written approval for any work involving excavation or utility connections or tapping on the Leased

Premises or on the Installation no less than thirty (30) days prior to commencing such work.

Section 4.07 Police, Fire, and Emergency Services. Lessee hereby acknowledges and agrees that the Government shall not have any obligation or liability for the provision of police, fire, or emergency services to the Leased Premises or the School. Lessee shall be solely responsible for obtaining such services from available local jurisdictional providers. Lessee shall be responsible for any fees, costs or expenses for such services. Without limiting the foregoing, the Government may elect to provide supplementary emergency services to the Leased Premises when in the best interest of the Government, in extreme circumstances where other local services are insufficient, or otherwise to protect Government property and resources. Lessee shall reimburse the

Government for the actual cost of providing such services promptly upon receipt of an invoice from the Government. Any such service rendered by the Government shall be pursuant to and in accordance with all the terms, conditions, and requirements of Applicable Laws and Air Force directives and instructions (including, but not limited to, Air Force Instruction 32-2001, and Air

Force Instruction 10-2501).

Section 4.08 Drainage and Stormwater Management. Lessee shall be solely responsible for designing, permitting, and constructing all stormwater and drainage transmission, conveyance, retention, detention, and outfall systems and related facilities for the Leased Premises and the

School.

Section 4.09 Development/Impact Fees. Lessee shall be solely responsible for the payment of any and all impact fees, development fees, and other fees, charges, and expenses imposed by federal, state, or local governmental authorities related to the Lessee Improvements and the development of the Leased Premises, as applicable.

Section 4.10 Cost and Expense of Planning, Design, and Engineering. Lessee shall be responsible for any and all costs and expenses to produce the Preliminary Plans, Preliminary

Construction Plans and Documents, Final Construction Plans and Documents, and all other drawings and documents necessary or required for the design and construction of the Lessee

Improvements, and for periodic and final inspections of the Lessee Improvements during construction.

Section 4.11 Construction Commencement and Schedule. Construction of Lessee

Improvements shall commence promptly after Lessee obtains all Permits and Approvals, but in no event later than the date which is ninety (90) days after Lessee obtains all Permits and Approvals

(the “Construction Commencement Date”) and shall be completed on or before the date which is eighteen (18) months after the Construction Commencement Date (the “Construction

Completion Date”). Notwithstanding anything herein to the contrary, Lessee shall not commence any construction (including excavation or mass grading) on the Leased Premises unless and until it obtains a dig permit and a notice to proceed from the Installation Civil Engineer (or his/her duly authorized representative), which shall not be unreasonably withheld, delayed or conditioned

(“Notice to Proceed”). It shall not be unreasonable for the Government to withhold the Notice to

Proceed if the Lessee is in breach or is otherwise not in compliance with any term or condition of this Lease, including those concerning the Required Insurances and Payment and Performance

Bonds, both as hereinafter defined. Construction of all Lessee Improvements shall be in compliance with all Applicable Laws, inclusive of all applicable federal, state, or local

Nellis AFB – Charter High School Page 11 of 132 construction and building codes. Once construction of the Lessee Improvements commences, Lessee shall cause it to progress to completion diligently and without delay and in accordance with the Construction Management Plan and the milestone schedule attached hereto and incorporated herein as Exhibit F (the “Construction Milestone Schedule”). Other than delays caused by the

Government, and as otherwise expressly provided for herein, Lessee shall bear the risk of any delays, including those due to Force Majeure. In the event Lessee fails to substantially complete construction of the School on or before the date which is thirty (30) months after the Effective

Date due to any reason other than a delay by the Government, an event of Force Majeure, or a change made per Section 4.13, this Lease shall automatically terminate without further action of either Party being required and, except for those provisions which expressly survive termination, shall be of no further force or effect. Failure to timely perform any of the obligations under this

Lease because of a “Force Majeure” shall be excused and not constitute a default under this Lease by the Party in question, but only to the extent and for the time period occasioned by such Force

Majeure. For the purposes of this Lease, “Force Majeure” shall include strikes, lockouts or labor disputes, inability to obtain labor or materials, government restrictions, fire or other casualty, adverse weather conditions not reasonably foreseeable at the location and time of year in question, war or other national emergency, acts of God, or other causes beyond the reasonable control of the

Party obligated to perform. Except as is otherwise expressly provided for in this Lease, in no event shall this provision or a Force Majeure event excuse any failure by Lessee to pay Rent or any other payment obligation hereunder, nor excuse any failure by Lessee to procure funds or obtain financing necessary to comply with Lessee’s obligations under this Lease.

Section 4.12 Quality Control; Construction Consultant.

a. Throughout the construction period, Lessee shall maintain an effective quality control program that will assure that the workmanship and materials used by any contractor, subcontractor or vendor satisfy the construction requirements of this Lease, including

Applicable Laws, the Final Construction Plans and Documents (the “Construction

Requirements”). Lessee shall retain, at its own cost, an independent certified professional who is not affiliated with Lessee or any of Lessee’s affiliates to administer such quality control program (“Construction Consultant”).

b. The Construction Consultant shall be approved in advance by the Government and shall, among other things, conduct reviews of all Construction Plans and Documents, conduct basic and engineering site reviews, independently verify all processes, procedures, inspections and material tests, review and approve as-built plans, and certify to the Government that the project and each phase thereof has been completed in accordance with the Construction Requirements.

c. All reports prepared by the Construction Consultant shall be delivered simultaneously to Lessee and the Government. The Government shall have the right, at its election, to participate in any of Lessee’s meetings with the Construction Consultant.

d. Lessee shall provide written evidence to the Government that the Construction

Consultant maintains professional liability insurance for the benefit of the Government with a limit of not less than $1 million per occurrence.

Nellis AFB – Charter High School Page 12 of 132

Section 4.13 Changes. If during the course of construction it shall appear necessary or desirable to deviate in any material respect from the Final Construction Plans and Documents or Construction

Milestone Schedule, Lessee shall obtain Government’s written approval to such deviations prior to the Lessee executing or acting on such deviations by providing the Installation Civil Engineer with a full written explanation of the nature and desirability or necessity of such deviation. In accordance with and pursuant to Section 13.07 below, any change to the terms and conditions of this Lease, inclusive of all the Exhibits which are attached hereto and incorporated herein by this reference shall be made by written lease amendment executed by the Parties hereto.

Section 4.14 Completion of Construction. Within ninety (90) days after completion of construction of the Lessee Improvements, Lessee shall, at its expense, provide Government with:

(a) a certificate by a professional engineer duly licensed in the State in which the Leased Premises is located with substantial experience in certifying and inspecting improvements like the School, stating that the construction and installation of the Lessee Improvements meets or exceeds all applicable construction and safety requirements of the State in which they are located, and (b) record drawings under the seal of a professional architect or engineer duly licensed in the State in which the Leased Premises is located showing the “as built” condition of any Lessee

Improvements, in such format (including, without limitation a CADD and PDF format) as the

Government shall reasonably request (the “As Built Survey”). All Lessee Improvements shall at all times during the Term of this Lease, and during any time thereafter within which Lessee is permitted to remove such Improvements under the terms of this Lease, constitute the sole and separate property of the Lessee, not real property or fixtures that are part of the Leased Premises.

In the event the As-Built Survey shows any encroachments or other matters, which are (i) inconsistent with the Final Construction Plans and Documents approved by the Government and were not disclosed by that certain signed and sealed ALTA/NSPS Meets and Bounds Survey of the Leased Premises issued by Poggemeyer Design Group dated May 11, 2017 and provided to the Government by Lessee prior to execution of this Lease, (ii) adversely affect the Leased

Premises or the Installation and (iii) are reasonably unacceptable to the Government, the

Government shall so notify Lessee and Lessee shall, at its sole cost and expense, within thirty (30) days after receipt of the aforementioned notice from the Government commence to cure the same and diligently proceed to cure the same in a manner reasonably acceptable to the Government no later than ninety (90) days after receipt of said notice from the Government. In the event the

Government becomes aware of encroachments or other matters which adversely affect the Leased

Premises or the Installation which are not shown on the As-Built Survey, but which arise as a result of the acts or omissions of Lessee, its contractors, consultants, agents or parties employed or under the control of Lessee and are reasonably unacceptable to the Government, the Government shall so notify Lessee and Lessee shall, at its sole cost and expense within thirty (30) days after receipt of the aforementioned notice from the Government commence to cure the same and diligently proceed to cure the same in a manner reasonably acceptable to the Government no later than ninety

(90) days after receipt of said notice from the Government.

Section 4.15 No Liens. Lessee shall keep the Leased Premises free and clear from any and all liens, claims, and demands for work performed, materials furnished, or operations conducted for

Lessee (except as permitted by Section 13.05 hereof). If any such mechanic’s, construction, or materialman’s liens shall be recorded against the Leased Premises, Lessee shall, immediately upon receiving notice of the same, cause such lien to be promptly removed, or transferred to a lien transfer bond or other security available, and Lessee hereby agrees to indemnify the Government

Nellis AFB – Charter High School Page 13 of 132 against all liability occasioned by or resulting from any improvements or alterations to the Leased

Premises. Notice is hereby given that neither the Government or the Leased Premises shall be liable for any labor, services, or materials furnished to Lessee upon credit and that no construction or other lien for any such labor, services, or materials shall attach to, encumber, or in any way affect the reversionary or other estate or interest of the Government in and to the Leased Premises.

Section 4.16 Payment and Performance Bonds. Prior to commencement of construction of the

Lessee Improvements and as a condition to obtaining a Notice to Proceed therefor, Lessee shall provide to the Government, as well as Approved Mortgagee (if applicable), one or more bonds obtained by Lessee or the Lessee’s general contractor ensuring payment and performance of that general contractor’s obligations under the prime construction contract directly between that general contractor and the Lessee with respect to the construction activities undertaken by or for Lessee pursuant to this Lease (the “Payment and Performance Bonds”). The Payment and Performance

Bonds must: (i) be issued by a Qualified Surety; (ii) be in a form satisfactory to the Government and any Approved Mortgagee and run in favor of the Government and any Approved Mortgagee;

(iii) be in the amount of the total cost of constructing the portion of the Improvements covered by such Notice to Proceed, as such cost is stipulated in the construction contract between the Lessee and its general contractor; (iv) guarantee the performance of the contract for the construction of such Improvements in accordance with the Final Construction Plans and Documents; and (v) provide that the Government and any Approved Mortgagee are dual obligees on such bonds as their interests may appear. A “Qualified Surety” is a corporate surety or insurer authorized to do business, and to issue bonds for construction payment and performance, in the State of Nevada and possessing a rating of A/VIII or better in A.M. Best’s Insurance Reports.

ARTICLE V.

MAINTENANCE AND REPAIR

Section 5.01 Maintenance and Repair. During the Term, Lessee shall, at its sole cost and expense, keep and maintain the Leased Premises and the Improvements, including without limitation the foundation of any buildings or systems, heating ventilation air conditioning

(HVAC), electrical, plumbing, security systems, fixtures, trade fixtures, machinery, furnishings, signage, and all other portions of the Improvements, in good repair and working order (reasonable wear and tear excepted), and in a clean, properly maintained safe condition. All maintenance, including ground maintenance and landscaping, repairs and replacements shall be of quality at least equal to the original in all materials and workmanship. Lessee shall promptly repair, at its expense and in a manner reasonably acceptable to the Government, any damage to Government’s property or to the property of others caused by Lessee or its officers, agents, employees, invitees, licensees, and contractors. The Government shall have the right to enter the Leased Premises in accordance with Section 12.02 to determine whether or not Lessee is complying with its maintenance obligations hereunder.

ARTICLE VI.

TAXES

Section 6.01 Taxes and Assessments. Lessee shall pay when due all taxes, including without limitation, ad valorem taxes, if any are required to be paid, sales, use or other taxes, assessments, Nellis AFB – Charter High School Page 14 of 132 or charges levied against or in connection with the Leased Premises, Lessee’s leasehold interest therein, and any Improvements thereupon, or arising from Lessee’s use, occupancy, or operations on the Leased Premises, together with any and all interest and penalties levied thereon, and Lessee hereby agrees to indemnify Government and hold it harmless from and against any tax, imposition, loss, cost or expense, together with any penalties and interest thereon, as a result of Lessee’s failure to pay any sales or tax due on the arising out of this Lease and all claims by any taxing authority that the amounts, if any, collected from Lessee to such taxing authority, were less than the total amount of taxes due. Lessee further covenants and agrees that it shall not, by its action or inaction, cause imposition of a lien on the Leased Premises or Improvements for delinquent taxes. The provisions of this Section shall survive the expiration or prior termination of this Lease.

Section 6.02 Contest of Taxes. Lessee may exercise any rights provided by law to contest or pay under protest any taxes and shall not thereby be deemed an Event of Default (as hereinafter defined) under this Lease if such contest or payment under protest does not result in the imposition of a lien for delinquent taxes on the Leased Premises or any Improvements, and Lessee promptly pays all taxes and assessments (and any interest and penalties with respect thereto) ultimately determined to be due. Lessee’s obligations under this Article shall survive the expiration or earlier termination of the term of this Lease.

ARTICLE VII.

ENVIRONMENTAL

Section 7.01 Environmental Requirements. During the Term of this Lease and in exercising the rights granted herein or carrying out actions contemplated hereby, Lessee shall be responsible for compliance, at its sole cost and expense, with all Environmental Laws applicable to Lessee’s use of the Leased Premises. As used herein, “Environmental Laws” shall mean all applicable statutes, regulations, requirements, rules, guidelines, codes, policies, orders, decrees, approvals, permits, plans, authorizations, and similar items, and all amendments thereto, and all applicable judicial, administrative and regulatory decrees, judgments, and orders, of all governmental agencies, departments, commissions, boards, bureaus or instrumentalities of the United States, the State in which the Leased Premises is located and its political subdivisions, relating to the protection or regulation of human health, the environment or natural resources, including but not limited to, the

Comprehensive Environmental Response, Compensation and Liability Act (“CERCLA”) (42

U.S.C. § 1906 et seq.); Resource Conservation and Recovery Act (“RCRA”) (42 U.S.C. § 6901 et seq.); the Toxic Substance Control Act (“TSCA”) (15 U.S.C. § 2601 et seq.); the Clean Air Act

(“CAA”) (42 U.S.C. § 7401 et seq.); the Emergency Planning and Community Right to Know Act

(“EPCRA”) (42 U.S.C. § 11001 et seq.); the Hazardous Materials Transportation Act (“HMTA”)

(49 U.S.C. § 1801 et seq.); the Federal Water Pollution Control Act (“FWPCA”) (33 U.S.C. §

1251 et seq.); the Occupational Safety and Health Act (“OSHA”) (29 U.S.C. § 655 et seq.); the

Construction Safety Act (“CSA”) (40 U.S.C. § 333 et seq.); the National Environmental Policy

Act (“NEPA”) (42 U.S.C. § 4321 et seq.); the Endangered Species Act (“ESA”) (16 U.S.C. § 1531 et seq.); the Federal Insecticide, Fungicide, and Rodenticide Act (“FIFR”) (7 U.S.C. § 136 et seq.);

the Solid Waste Disposal Act (“SWDA”) (42 U.S.C. § 6901 et seq.); National Historic Preservation

Act (“NHPA”) (54 U.S.C. §100101 et seq.), Executive Order 11990 Protection of Wetlands;

Executive Order 11988 Floodplain Management; and all applicable state and local statutes and ordinances applicable to the Leased Premises and the use thereof and

Nellis AFB – Charter High School Page 15 of 132 operations thereupon as may be amended from time to time during the Term of this Lease. The

Environmental Laws shall also include: (a) all requirements pertaining to reporting, warnings, licensing, permitting, investigation, remediation and removal of emissions, discharges, releases, or threatened releases of Toxic or Hazardous Wastes, Substances or Materials (each as defined by federal law), whether solid, liquid, or gaseous in nature, into the air, surface water, groundwater, land or any other environmental media, or relating to the manufacture, processing, distribution, use, treatment, storage, disposal, transport, or handling of Toxic or Hazardous Wastes, Substances or Materials, and (b) all requirements pertaining to the health and safety of employees or the public.

Lessee shall not store, treat, or dispose of any Hazardous Substances on the Leased Premises. As used herein, “Hazardous Substances” are defined as any contaminant, toxic or hazardous waste, or any other substance the removal of which is required or the use…