2025-07-15; City Council; Resolution 2025-162 — Carlsbad City Council, July 15, 2025

Exhibit 1
RESOLUTION NO. 2025-162
A RES

OLUTION OF THE CITY COUNCIL OF THE CITY OF CARLSBAD,

CALIFORNIA, APPROVING A LOAN AGREEMENT IN THE AMOUNT OF $500,000 AND A FIRST AMENDMENT TO THE LEASE AGREEMENT WITH NEW VILLAGE ARTS , INC. FOR THE CITY -OWNED PROPERTY AT 2787 STATE

STREET, AUTHORIZING THE CITY MANAGER TO EXECUTE THE LOAN

AGREEMENT AND FIRST AMENDMENT TO THE LEASE AGREEMENT , AND APPROPRIATING $500,000 FROM THE GENERAL FUND RESERVE
WHE
REAS, the City is the owner of that real property situated at 2787 State Street, Carlsbad, California, consisting of approximately 9,400 square feet of commercial building space, designated as Assessor Parcel Number 203-295-01 and 02 (“Premises”); and WHEREAS, since 2006, New Village Arts (NVA) has operated a performing arts theater at the Premises under successive lease agreements approved by the City Council; and WHEREAS, on July 27, 2021, the City Council approved a new ten -year lease agreement with NVA, with two five -year extension options authorized by Resolution No. 2021- 182, as well as a construction and reimbursement agreement under which the city agreed to reimburse NVA up to $573,000 for certain tenant improvements, including $103,000 toward solar installation and $470,000 for exterior improvements; and
WHEREAS, NVA subsequently completed extensive renovations to the Premises at a total cost exceeding $3 million, funded in part by a $893,259 commercial loan with Endeavor Bank; and WHEREAS, on Oct. 7, 2024, NVA was awarded a $625,000 matching grant from the Prebys Foundation, contingent upon successfully raising an equivalent amount by Dec. 31, 2025, with the combined funds intended to fully retire the building renovation debt; and WHEREAS, on Oct. 30, 2024, NVA formally requested city assistance in the form of a loan to retire its remaining building renovation debt; and
WHEREAS, on Jan. 28, 2025, the City Council adopted Resolution No. 2025-028, appointing the City Manager, or designee, as real estate negotiator to negotiate a loan agreement and modified lease terms; and
WHEREAS, NVA will tender payment in the amount of $393,259 to Endeavor Bank by July 31, 2025, which will reduce the remaining loan balance to $500,000; and July 15, 2025
Item #5 Page 5 of 35
Docusign Envelope ID: 83709019-9EDA-4152-AE2C-655EDA2AF40B W HEREAS, city staff have negotiated a Loan Agreement with NVA that includes the following key terms:
• The City will provide a $500,00 loan to NVA at 3% annual interest, with interest-only payments of approximately $1,250 per month from July 1, 2025, through Jan. 31, 2026; • Upon receiving proof of NVA’s payment to Endeavor Bank in the amount of $393,259, which is due by July 31, 2025, the City will disburse the $500,000 loan proceeds directly to Endeavor Bank to retire NVA’s building renovation debt. • Through a capital fundraising campaign, NVA intends to raise $250,000 by Dec. 31, 2025, to be matched with the Prebys Foundation grant by Jan. 31, 2026. The $500,000 in raised and matched funds are to be used by NVA to repay the City’s $500,000 loan. • Any remaining unpaid principal balance on the city’s $500,000 loan to NVA as of Jan. 31, 2026, shall be converted into a monthly lease payment obligation amortized over the applicable term according to the schedule below:

Remaining Principal Balance Payment Term Interest Rate Estimated Monthly Rent Up to $250,0000 5 Years 4% Up to $4,604.13
$250,001 - $500,000 12 Years 5% Up to $4,624.45
• N
VA may prepay all or part of the balance at any time without penalty. • NVA shall be required to submit monthly financial reports during the 2025 calendar year to ensure transparency around NVA’s capital fundraising efforts and the financial condition of NVA.

WHEREAS, the original lease agreement is being amended to, among other items, revise sections related to maintenance and repair costs, such that NVA will now have the sole responsibility for all maintenance and repair costs for the Premises, except for the fire alarm and sprinkler system as well as sidewalks and parkways, for the remaining balance of the lease term; and WHEREAS, city staff have determined that approval of the Loan Agreement and the First Amendment to the Lease Agreement will protect the city’s long-term interests in the Premises, ensure repayment of the loan principal and interest over time, and support the ongoing operation of a valued cultural arts tenant in the Carlsbad Village; and July 15, 2025
Item #5 Page 6 of 35
Docusign Envelope ID: 83709019-9EDA-4152-AE2C-655EDA2AF40B W HEREAS, city staff is recommending that the City Council appropriate $500,000 from the General Fund Reserve to fund the proposed loan.

NOW, THEREFORE, BE IT RESOLVED by the City Council of the City of Carlsbad, California, as follows:

1. That the above recitations are true and correct.

2. The proposed action is categorically exempt from environmental review under CEQA Guidelines Section 15301 because it involves the leasing, operation, maintenance and minor alteration of existing facilities with negligible or no expansion of the existing or former use. No exceptions to the categorical exemption as set forth in CEQA Guidelines Section 15300.2 or Carlsbad Municipal Code Section 19.04.070(C) apply.

3. That the City Council has determined that New Village Arts provides a significant public benefit to the community by supporting arts and culture in the Carlsbad Village area, offering an alternative evening activity that encourages positive pedestrian traffic and public interaction, and enhancing the Village’s retail and dining environment with a cultural venue that otherwise would not exist in the area. Further, NVA’s use of the Property as a theater and arts center is consistent with the goals of the Carlsbad Village and Barrio Master Plan, which calls for uses that activate the Village through placemaking strategies supporting arts and culture, including visual, musical, and theatrical arts, and other public performances.

4. That the City Council hereby approves the Loan Agreement and the First Amendment to Lease Agreement with New Village Arts, attached hereto as Attachment A and B respectively, and authorizes the City Manager, or designee, to execute these agreements on behalf of the City of Carlsbad and to take all actions necessary to implement them, including minor or clerical modifications as approved by the City Attorney.

5. T
hat the City Council hereby appropriates $500,000 from the General Fund Reserve to fund the City’s loan to New Village Arts under the terms of the approved Loan Agreement, to be used solely to retire the existing Endeavor Bank loan related to tenant improvements at the Premises.

July 15, 2025
Item #5 Page 7 of 35
Docusign Envelope ID: 83709019-9EDA-4152-AE2C-655EDA2AF40B

6. That this Lease Amendment as well as the underlying Lease Agreement shall be recorded in the Office of the Recorder of the County of San Diego pursuant to California Government Code Section 37393.

7. That the City Manager, or designee, is authorized and directed to take all further actions as necessary to carry out the purposes of this Resolution, including but not limited to, ensuring NVA’s compliance with repayment, reporting, and maintenance and repair obligations under the Loan Agreement and the First Amendment to the Lease Agreement.

PASSED, APPROVED AND ADOPTED at a Regula r Meeting of the City Council of the Cit y of Carlsbad on the 15th day of July, 2025, by the following vote, to wit:

AYES: Blackburn, Bhat-Patel, Acosta, Burkholder, Shin.

NAYS: None.

ABSTAIN: None.

ABSENT: None.
_______
_______________________________
KEITH BLACKBURN, Mayor
_______
_______________________________
SHERRY FREISINGER, City Clerk
(SEAL)
July 15, 2025
Item #5 Page 8 of 35
Docusign Envelope ID: 83709019-9EDA-4152-AE2C-655EDA2AF40B

Attachment A

LOAN AGREEMENT
THIS LOAN AGREEMENT {"Agreement") is made and entered into as of .J ~\ ~ \3:: , 2025 {"Effective Date"), by and between the CITY OF CARLSBAD {"City"), and NEW VILLAGE ARTS, IC., a California nonprofit corporation ("New Village Arts") .

RECITALS
The following recitals are a substantive part of this Agreement :

WHEREAS, the City is the owner of that real property situated at 2787 State Street, City of Carlsbad, County of San Diego, California, consisting of approximately 9,400 square feet of commercial building space, designated as Assessor Parcel Number 203-295-01 and 02 ("Premises"); and WHEREAS, City and New Village Arts are parties to that certain Lease Agreement dated as of July 27, 2021, for the Premises authorized by Resolution No. 2021-182 ("Lease Agreement"); and WHEREAS, on Oct. 30, 2024, New Village Arts submitted a request to the City initially seeking a $893,259 loan to retire its building renovation loan with Endeavor Bank related to its tenant improvement project; and WHEREAS, New Village Arts informed the City that it was awarded a Prebys Foundation ("Foundation " ) $1:$1 matching grant for every dollar raised to meet the Foundation's target fundrais ing goals from October 2024 through December 2025, up to a total of $625,000, which would allow New Village Arts to raise a total of $1.25M ; and
WHEREAS, the Foundation also awarded New Village Arts an additional $125,000 in resources to help guide their capital fundraising campaign over the term of the matching grant through December 2025; and WHEREAS, on Jan. 28, 2025, the City Council adopted Resolution No. 2025-028 thereby appointing the City Manager, or designee, as the city's real estate negotiator to negotiate a loan agreement with modified lease terms with New Village Arts; and
WHEREAS, through negotiations, New Village Arts reduced its loan request to $500,000; and WHEREAS, New Village Arts shall pay $393,259 towards the Endeavor Bank loan by July 31, 2025, using its fundra ising and matching grant funds, thereby reducing the Endeavor Bank loan balance to $500,000; and WHEREAS, New Village Arts shall use the Foundation's matching grant fundraising opportun ity to repay any loan obligations due to the City; and
WHEREAS, the City desires to loan New Village Arts the principal amount of five hundred thousand dollars and zero cents ($500,000) through January 31, 2026 {"Loan"), to pay off New Village Arts' loan with Endeavor Bank; and
WHEREAS, concurrent with this Agreement, the parties executed the First Amendment dated "'-L:=~,........1,---4-- _ _, 2025 to the Lease Agreement ("Lease Amendment") , which among other lease modifications , convert any remaining loan balance due to City as of January 31, 2026, into a lease payment obligation; and WHEREAS, this Agreement shall be interpreted in conjunction the Lease Agreement, as amended by the Lease Amendment.
1 NOW, THEREFORE, the City and the New Village Arts in consideration of the mutual covenants, conditions and promises herein below contained hereby agree as follows:

AGREEMENT

1. New Village Arts Loan. Subject to New Village Arts's performance of all of the terms, covenants and conditions set forth herein, the City hereby agrees to loan to New Village Arts, and New Village Arts agrees to borrow from the City, Five Hundred Thousand Dollars ($500,000) (the "Loan") to pay off the Endeavor Bank loan used to complete the tenant improvement project for the Premises. The City shall make the Loan to New Village Arts from available funds in the City's General Fund, which shall be disbursed directly to Endeavor Bank as provided herein.

1.1 Loan Terms.
a. Interest Rate. Upon the Effective Date of this Agreement, the Loan shall accrue interest at the rate of three percent (3%) simple interest per annum . b. Payment Terms. New Village Arts shall make interest-only payments in the amount of $1,250 per month on the Loan from the Effective Date through January 31, 2026. c. Maturity Date. The entire principal balance, together with any unpaid interest, shall be due and payable in full on or before January 31, 2026 ("Maturity Date"). d. Financial Reporting. New Village Arts shall provide the City with monthly financial reports during the 2025 calendar year, due within fifteen (15) days of the end of each corresponding month .

These reports shall include Profit and Loss Statements , Balance Sheets, and detailed capital fundraising updates reflecting both fundraising contributions and matching grant funds . The City may request additional clarificat ion or detail as reasonably necessary to evaluate financial performance and fundraising progress.

1.2 Security for Loan. The Promissory Note, in the form of Exhibit "A" (the "Promissory Note" ) attached hereto and incorporated herein, shall be secured by the recordation of a UCC-1 fixture filing, subject to priority creditor claims, against New Village Arts's personal property (defined as personal property owned by New Village Arts and not on loan to the New Village Arts by third parties), including but not limited to, Tenant's Property as defined in Section 2.5 and 13.1 of the Lease Agreement, and if applicable, any fixtures installed in the Premises or improvements to the Premises owed by New Village Arts under the Lease Agreement .

1.3 Disbursement of Loan. The proceeds of the Loan shall be disbursed directly to Endeavor Bank by the City pursuant to the conditions set forth below, any of which conditions may be waived by the City in its sole and absolute discretion:
a. Proof of Payment. To ensure the City's Loan proceeds fully satisfy the outstanding Endeavor Bank loan balance, City shall not disburse the Loan proceeds until New Village Arts furnishes proof of payment in the amount of $393,259 to Endeavor Bank, which is due by July 31, 2025. b. Execution of Documents. New Village Arts shall have executed and delivered to the City the Loan Agreement, Promissory Note, Lease Amendment, and any other documents required hereunder . c. Proof of Insurance. New Village Arts shall have prov ided to the City a certificate of insurance that satisfies -the requirements of Article 9 "INSURANCE" of the Lease Agreement, as may have been amended from time to time, including the Lease Amendment. 2 d. No Default, Representations and Warranties. New Village Arts shall not be in default or breach in any of its obligations under the terms of this Agreement and/or the Lease Agreement and Lease Amendment. All representations and warranties of New Village Arts conta ined herein shall be true and correct in all material respects on and as of the date of any disbursement of the Loan as though made at that time, and all covenants of New Village Arts which are required to be performed prior to the disbursement of the Loan shall have been performed by such date.

1.4 Assumption. The Promissory Note shall not be assumable by successors and assigns of New Village Arts without the prior written consent of the City.

1.5 Repayment of Loan. New Village Arts's obligation to repay the Loan shall be set forth in t he Promissory Note . The Promissory Note shall be for a term of approximately six-months from the date of the execution of this Agreement, expiring on January 31, 2026.

1.6 Conversion to Lease Obligation. If any portion of the Loan remains unpaid as of January 31, 2026, such amount shall be deemed converted to a lease payment obligation pursuant to Section 1.4(b) of the Lease Amendment, the terms of which are incorporated herein by this reference.

2. Operating Requirements.

2.1 Lease Compliance. New Village Arts shall comply with all obligations under the Lease Agreement and Lease Amendment , and otherwise shall not be in breach or default, of any term or condition contained therein .

2.2 Insurance. During the term of the Promissory Note and any security interest thereof , New Village Arts shall comply with all requisite insurance policies to be maintained pursuant to Article 9 of the Lease Agreement, including the Lease Amendment , and incorporated herein by this reference. All requisite policies shall include coverage for this Agreement.

2.3 Indemnification and Hold Harmless. Without limiting any indemnification obligations under the Lease Agreement, New Village Arts shall indemnify, hold harmless and defend, with attorney(s) reasonably acceptable to the City, the City and its officers , elected and appointed boards and officials, employees, representatives and agents, from and against any and all liability, damages, costs, losses, claims and expenses, suits, actions, proceedings, judgments, settlement payments, including attorney's fees, however caused, resulting directly or indirectly from or connected with the Premises and/or the performance of this Agreement.

2.4 Compliance with Laws. The New Village Arts shall use, maintain and operate the Premises in conformity with all applicable federal, state, and local laws and regulations, including but not limited to, the zoning and development standards of the City of Carlsbad, building, plumbing, mechanical and electrical codes, and all other provisions of the City of Carlsbad Municipal Code, all applicable environmental laws, and all applicable disabled and handicapped access requirements, including without limitation the Americans With Disabilities Act, 42 U.S.C. Section 12101, et seq., Government Code Section 4450, et seq., Government Code Section 11135, et seq., and the Unruh Civil Rights Act, Civil Code Section 51, et seq.

2.5 Nondiscrimination. New Village Arts for itself and its successors and assigns, agrees tha t there shall be no discrimination against or segregation of any person or group of persons, on account of race, religious creed, color, national origin, ancestry, physical disability, mental disability, medical condition, marital status, sex, age, or sexual orientation in the use, occupancy, tenure, or enjoyment of the Premises nor shall the New Village Arts or any person claiming under or through the New Village Arts establish or permit any such 3 practice or practices of discrimination or segregation with reference to the selection, location, number, use, or occupancy, of, contractors or vendees in the Premises.

3. New Village Arts's Representations and Warranties. New Village Arts represents and warrants to City as follows:

3.1 Authority. New Village Arts has full right, power and lawful authority to undertake all obligations as provided herein, and the execution, performance and delivery of this Agreement by New Village Arts has been fully authorized by all requisite actions on the part of the New Village Arts. The parties who have executed this Agreement on behalf of New Village Arts are authorized to bind New Village Arts by their signatures hereto.

3.2 Lien Waivers. If applicable, New Village Arts has received appropriate waivers of mechanics and materialmen's lien rights and stop notice rights executed by all contractors and other persons that have rendered services or delivered materials for and/or associated with the improvements to the Premises.

3.3 Litigation. To the best of New Village Arts's knowledge, there are no actions, suits, material claims, legal proceedings, or any other proceedings affecting the New Village Arts or any parties affiliated with New Village Arts, at law or in equity before any court or governmental agency, domestic or foreign, which if adversely determined, would materially impair the right or ability of New Village Arts to execute or perform its obligations under this Agreement or any documents required hereby to be executed by New Village Arts, or which would materially adversely affect the financial condition of New Village Arts or any parties affiliated with New Village Arts.

3.4 No Conflict. To the best of New Village Arts's knowledge, New Village Arts's execution, delivery, and performance of its obligations under this Agreement shall not constitute a default or a breach under any contract, agreement or order to which New Village Arts or any parties affiliated with New Village Arts is a party or by which it is bound.

3.5 No Bankruptcy. No attachments, execution proceedings, assignments for the benefit of creditors, insolvency, bankruptcy, reorganization, receivership or other proceedings have been filed or are pending or threatened against the New Village Arts or any parties affiliated with New Village Arts, nor are any of such proceedings contemplated by New Village Arts or any parties affiliated with New Village Arts.

3.6 Notice of Changed Conditions. New Village Arts shall, upon learning of any fact or condition which would cause any of the warranties and representations in this Section 3 not to be true in any material respect, immediately give written notice of such fact or condition to City. Such exception(s) to a representation shall not be deemed a breach by New Village Arts hereunder but shall constitute an exception which City shall have a right to approve or disapprove if such exception would have a material adverse effect on the Premises and/or operation of at the Premises. If City elects to disburse the Loan to the New Village Arts following disclosure of such information, New Village Arts's representations and warranties contained herein shall be deemed to have been made as of the date of the disbursement of the Loan, subject to such exception(s). If following the disclosure of such information the New Village Arts fails to cure such matter within the time set forth in Section 5 hereof for the cure of defaults, City may elect in its sole and exclusive discretion to terminate this Agreement by written notice to the New Village Arts.

4. Remedies for Default. A failure by either party to perform any action or covenant required by this Agreement, the Promissory Note, any security interest thereof or the Lease Agreement, including the Lease Amendment, or any loan or deed of trust which is senior to the Loan, within the time periods provided herein following notice and failure to cure as described hereafter, constitutes a "Default" under this Agreement. A party 4 claiming a Default shall give written notice of Default to the other party specifying the Default complained of.

Except as otherwise expressly provided in this Agreement, the claimant shall not institute any proceeding against any other party, and the other party shall not be in Default if such party cures such default within ten {10) days if the claimed Default is a failure to pay amounts due pursuant to the Promissory Note, or thirty (30) days from receipt of such notice for all other claimed Defaults hereunder, unless a longer cure period is provided in any security interest to the Promissory Note, the Lease Agreement, including the Lease Amendment, or other applicable document. However, in the event that such Default is other than a failure to pay money and is of such a nature that it cannot reasonably be cured within thirty {30) days from receipt of such notice, the claimant shall not institute any proceeding against the other party, and the other party shall not be in Default if such party immediately upon receipt of such notice, with due diligence, commences to cure, correct or remedy such failure or delay and completes such cure, correction or remedy with diligence as soon as reasonably possible thereafter. In the event that the New Village Arts is in default on any loan or deed of trust senior to the Loan, New Village Arts shall immediately deliver to the City a copy of such notice of default. Even if the holder of such loan or deed of trust has not exercised its rights or remedies with respect to such default, the City shall have the right terminate this Agreement by written notice to the New Village Arts.

4.1 Institution of Legal Actions. In addition to any other rights or remedies and subject to the restrictions otherwise set forth in this Agreement, either party may institute an action at law or equity to cure, correct or remedy any Default, to recover damages for any Default, or to obtain any other remedy consistent with the purpose of this Agreement. The City may also cause all indebtedness of the New Village Arts under this Agreement and the Promissory Note to become immediately due and payable, and may institute any applicable legal and/or equitable action.

4.2 Acceptance of Service of Process. In the event that any legal action is commenced by the New Village Arts against City, service of process on City shall be made by personal service upon the City or in such other manner as may be provided by law. In the event that any legal action is commenced by the City against the New Village Arts, service of process shall be made in such manner as may be provided by law and shall be effective whether served inside or outside of California.

4.3 Rights and Remedies Are Cumulative. Except as otherwise expressly stated in this Agreement, the rights and remedies of the parties are cumulative, and the exercise by either party of one or more of such rights or remedies shall not preclude the exercise by it, at the same or different times, of any other rights or remedies for the same Default or any other Default by the other party.

4.4 Inaction Not a Waiver of Default. Any failures or delays by either party in asserting any of its rights and remedies as to any Default shall not operate as a waiver of any Default or of any such rights or remedies, or deprive either such party of its right to institute and maintain any actions or proceedings which it may deem necessary to protect, assert or enforce any such rights or remedies.

4.5 Applicable Law and Venue. The laws of the State of California shall govern the interpretation and enforcement of this Agreement. Any legal and/or equitable action(s) must be instituted in the Superior Court of the County of San Diego, State of California, in an appropriate municipal court in that county, or in the United States District Court for the Southern District of California.

5. General Provisions.

5.1 Notices, Demands and Communications Between the Parties. Any approval, disapproval, demand, document or other notice ("Notice") which either party may desire to give to the other party under this Agreement must be in writing and may be given either by (i) personal service, (ii) delivery by reputable document 5 delivery service such as Federal Express that provides a receipt showing date and time of delivery , or {iii) mailing in the United States mail, certified mail, postage prepaid, return receipt requested, addressed to the address of the party as set forth below or at any other address as that party may later designate by Notice :

To New Village Arts: New Village Arts
To City:
2787 State Street
Carlsbad, CA 92008
Attention: Kristianne Kurner
City of Carlsbad
1200 Carlsbad Village Drive
Carlsbad, CA 92008
Attention : Real Estate Manager
With a copy to: City of Carlsbad
1200 Carlsbad Village Drive
Carlsbad, CA 92008
Attention : City Attorney
Any written notice, demand or communication shall be deemed received immediately upon receipt; provided , however, that refusal to accept delivery after reasonable attempts thereto shall constitute receipt. Any notices attempted to be delivered to an address from which the receiving party has moved without notice shall be effective on the third day from the date of the attempted delivery or deposit in the United States mail.

5.2 Non-Liability of Officials and Employees of City. No officer , elected or appointed public official, or employee of City shall be personally liable to the New Village Arts, or any successor in interest, in the event of any Default or breach by City or for any amount which may become due to the New Village Arts or its successors, or on any obligations under the terms of this Agreement.

5.3 Counterparts. This Agreement may be signed in multiple counterparts which, when signed by all parties, shall constitute a binding agreement.

5.4 Entire Agreement. This Agreement , together with the Lease Agreement, Lease Amendment, Promissory Note, any security interest thereof, as well as any other attachments or exhibits thereto, contains the entire Agreement and understanding between the parties relating to the transaction contemplated by this Agreement . All prior or contemporaneous understandings, representations and statements, oral or written, are superseded by this Agreement and shall be of no further force or effect. Any modification, amendment , or addendum to this Agreement must be in writing signed by both parties. Each party is entering this Agreement based solely upon the representations set forth herein and upon each party's own independent investigation of any and all facts such party deems material.

5.5 No Waiver. A waiver by either party of a breach of any of the covenants, conditions or agreements under this Agreement to be performed by the other party shall not be construed as a waiver of any succeeding breach of the same or other covenants, agreements, restrictions or conditions of this Agreement .

5.6 Modifications. Any alteration, change, or modification of or to this Agreement, in order to become effective, shall be made in writing and in each instance signed on behalf of each party. 6 5.7 Severability. If any term, prov1s1on, condition, or covenant of this Agreement or its application to any party or circumstances shall be held, to any extent, invalid or unenforceable, the remainder of this Agreement, or the application of the term , provision, condition or covenant to persons or circumstances other than those as to whom or which it is held invalid or unenforceable, shall not be affected, and shall be valid and enforceable to the fullest extent permitted by law.

5.8 Legal Advice. Each party represents and warrants to the other the following: they have carefully read this Agreement, and in signing this Agreement, they do so with full knowledge of any right which they may have; they have received independent legal advice from their respective legal counsel as to the matters set forth in this Agreement, or have knowingly chosen not to consult legal counsel as to the matters set forth in this Agreement; and, they have freely signed this Agreement without any reliance upon any agreement, promise, statement or representation by or on behalf of the other party, or their respective agents, employees, or attorneys , except as specifically set forth in this Agreement, and without duress or coercion, whether economic or otherwise.

5.9 Time of Essence. Time is expressly made of the essence with respect to the performance by the parties of each and every obligation and condition of this Agreement.

5.10 Cooperation. Each party shall cooperate with the other in this transaction and, in that regard, sign any and all documents which may be reasonably necessary, helpful, or appropriate to carry out the purposes and intent of this Agreement including, but not limited to, releases or additional agreements.

5.11 Definitions. Any terms used in this Agreement but not separately defined herein shall have the meaning given to such terms in the Promissory Note or any security interest thereto, as appropriate. [Signature Page to Follow]
7 5.12 Authority. The individuals executing this Agreement and the instruments referenced in it on behalf of New Village Arts each represent and warrant that they have the legal power, right and actual authority to bind New Village Arts to the terms and conditions of this Agreement.

Executed by New Village Arts this 10th day of July, 2025.

NEW VILLAGE ARTS, INC., a California
non-profit public benefit corporation
(sign here)
~1t fet, Sec~~ Board of
Directors
CITY OF CARLSBAD, a municipal
corporation of the State of California
By:

City Manager
ATTEST:

SHERRY FREISINGER, City Clerk
By:

New Village Arts Signature(s) Must be Notarized
APPROVED AS TO FORM:

CINDIE K. McMAHON , City Attorney
8 CALJFORNlA ALL-PURPOSE ACKNOWLEDGMENT CIVIL CODE§ 1189 A notary public or other officer completing this certificate verifies only the identity of the individual who signed the document to which.this certificate is attached, and not the trutMulness, accuracy, or validity of that document.

State of California )
County of SA"4 l>\EG,O )
On ] }ID /2.S- before me, _e_v~~c..._t~l$~ ~- 'flc{.- ~_ o_t..l_,,f-, NQ_.,_,,~A~f..~'(_.__-=-f'i_u=&_L--'--IG __ Date Here Insert Name and Title of the Officer
personally appeared _______ M_ A_f._Y_ ~~~ ~J!L _____________ _ Name(s) of Signer(s)
who proved · to me on the basis of satisfactory evidence to be the person(s) whose name(s) is/are subscribed to the within in strument and acknowledged to me that he/she/they executed the same in his/her/their authorized capacity(ies), and that by his/her/their signature(s) on the instrument the person{s), or the entity upon behalf of which the person(s) acted , executed the instrument. ············i CUR'm JACKSON
~ a· f'jotary Public. C.llfomll I j ? San 0lf10 County _ . Commtsston I 1517931
11,y Comm. E,q,tm lltly 10, 2029
Place Notary Seal Above
I certify under PENAL 1Y OF PERJURY under the laws
of the State of California that the foregoing paragraph is true and correct. •
---------------OPTIONAL---------------
Though this section is optional, completing this information can deter alteration of the document or fraudulent reattachment of this form to an unintended document.

Description of Attached Document
Title or Type of Document: ____________________________ _ Document Date: ___________________ Number. of Pages: _ _ ___ _ Signer(s} Other Than Named Abpve : _______________________ _ Capacity(ies) Claimed by Signer(s)
Signer's Name: ____________ _ Signer's Name: ____________ _ D Corporate Officer - Title(s): ______ _ D Corporate Officer - Title(s): ______ _ D Partner - D Limited D General D Partner ~ D Limited D General D Individual O Attorney in Fact D lndividuai D Attorney in Fact D Trustee D Guardian or Conservator D Trustee D Guardian or Conservator 0 Other: ______________ _ 0 Other: ______________ _
Signer ls Representing : _________ _ Signer Is Representing: _________ _ ~:®!~~~~
©2015 National Notary Associat ion· www .NationalNotary .org • 1-800-US NOTARY (1-800-876-6827} Item #5907 Exhibit "A"

PROMISSORY NOTE
$500,000.00 .j u1 ~ 11:: ' 2025
Ca~ bad, California
FOR VALUE RECEIVED, NEW VILLAGE ARTS, INC., a California nonprofit corporation ("New Village Arts"), promises to pay to the City of Carlsbad, (the "City"), at the City's office at 1635 Faraday Avenue, Carlsbad, California, 92008, or at such other place as the City may designate in writing, the sum of Five Hundred Thousand Dollars and no cents ($500,000), which represe_rJJ:s the "Loan Amount" pursuant to the Loan Agreement executed by the City and New Village Arts dated as of -:J ul'O 13:: , 2025 (the "Loan Agreement"). All capitalized terms used but not defined herein shall have the meanings ascribed thereto in the Loan Agreement. Payments shall be made in currency of the United States of America which at the time of payment is lawful for the payment of public and private debts.

1. Agreement . This Promissory Note (the "Note") is given in accordance with the provisions of the Loan Agreement . The rights and obligations of New Village Arts and the City under this Note shall be governed by the Loan Agreement and by the additional terms set forth in this Note. In the event of any inconsistencies between the terms of this Note and the terms of the Loan Agreement or any other document related to the principal balance of this Note, the terms of this Note shall prevail.

2. Repayment of Note. The principal balance of the $500,000 loan hereof shall be paid by New Village Arts as follows:

Loan Terms.
a.
interest per annum.

Interest Rate. The Loan shall accrue interest at the rate of three percent (3%) simple b. Payment Terms. New Village Arts shall make interes t-only payments in the amount of $1,250 per month on the Loan from the Effective Date through January 31, 2026 . c. Maturity Date. The entire principal balance of the $500,000 loan, together with any unpaid interest, shall be due and payable in full on or before January 31, 2026 ("Maturity Date") . d. Proof of Payment. To ensure the City's Loan proceeds fully satisfy the outstanding Endeavor Bank loan balance, City shall not disburse the Loan proceeds until New Village Arts furnishes proof of payment in the amount of $393,259 to Endeavor Bank, which is due by July 31, 2025. e. Repayment from Capital Fundraising Campaign. Tenant is concurrently pursuing a capital fundraising goal of $250,000 between July 1, 2025, and December 31, 2025, which, if met, shall be matched by a $250,000 grant from the Prebys Foundation. The funds raised and matched shall be utilized to repay the $500,000 loan amount by January 31, 2026.
9 Fundraising Goal/Matching Grant
Fundraising Period Fundraising Goal Prebys Match Total
July 1, 2025 to December $250,000 $250,000 $500,000
31, 2025
f. Conversion to Long-Term Lease Payments. Any remaining unpaid principa l balance on the $500,000 Loan Agreement amount remaining as of January 31, 2026, shall convert into a lease payment obligation structured as an equivalent monthly rent payment and amortized over the applicable term according to the schedule below :

Remaining Principal Balance Payment Term Interest Rate Estimated Monthly Rent Up to $25,0000 5 Years 4% Up to $4,604.13
$250,001 - $500,000 12 Years 5% Up to $4,624.45
All rent payments shall be due and payable monthly on the first (1st) day of each calendar month. If Tenant fails to pay rent within five (5) days of when rent becomes due and payable, Tenant shall pay Landlord a 2% late fee to compensate Landlord for its administrative expenses and/or losses. Tenant acknowledges that late payment by Tenant to Landlord shall cause Landlord to incur costs or losses not contemplated by this Lease, the exact amoun t of which would be extremely difficult to ascertain. The Parties agree that the 2% late fee represents a fair and reasonable estimate of the costs or losses that Landlord will incur by reason of late payment of rent by Tenant .

Tenant may prepay all or part of the remaining principal loan balance at any time without penalty. Once Tenant has fulfilled its repayment obligations pursuant to the schedule above, the rent payment shall revert to the sum of one dollar ($1.00) per year.
g. Payment Instructions. Rent shall be delivered to the Finance Department of the City of Carlsbad at 1635 Faraday Avenue, Carlsbad, California, 92008. The designated place of payment and filing may be changed at any time by Landlord upon ten (10) days written notice to Tenant. Tenant assumes all risk of loss if payments are made by mail.
h. Security for Loan. The Promissory Note shall be secured by the recordation of a UCC-1 fixture filing , subject to priority creditor claims, against New Village Arts's personal property (defined as personal property owned by New Village Arts and not on loan to the New Village Arts by third parties), including but not limited to, Tenant's Property as defined in Section 2.5 and 13.1 of the Lease Agreement, and if applicable, any fixtures installed in the Premises or improvements to the Premises owed by New Village Arts under the Lease Agreement.

3. Waivers.
a. No extension of time for payment of this Note made by agreement by the City with any person now or hereafter liable for the payment of this Note shall operate to release, discharge, modify, change or affect the original liability of New Village Arts under this Note, either in whole or in part. b. Subject to the provisions of Section 14 of this Note, the obligations of New Village Arts under this Note shall be absolute and New Village Arts waives any and all rights to offset, deduct or withhold any payments or charges due under this Note for any reasons whatsoever. c. New Village Arts waives presentment , demand, notice of protest and nonpayment, not ice of default or delinquency , notice of acceleration, notice of costs, expenses or leases or interest thereon, notice of 10 dishonor, diligence in collection or in proceeding against any of the rights of interests in or to property securing of this Note, and the benefit of any exemption under any homestead exemption laws, if applicable. d. No previous waiver and no failure or delay by City in acting with respect to the terms of this Note or any security interest shall constitute a waiver of any breach, default, or failure or condition under this Note, any security interest or the obligations secured thereby. A waiver of any term of this Note, any security interest or of any of the obligations secured thereby must be made in writing and shall be limited to the express written terms of such waiver.

4. Attorneys' Fees and Costs. New Village Arts agrees that if any amounts due under this Note are not paid when due, to pay in addition, all costs and expenses of collection and reasonable attorneys' fees paid or incurred in connection with the collection or enforcement of this Note, whether or not suit is filed.

5. Joint and Several Obligations. This Note is the joint and several obligations of all makers, sureties, guarantors and endorsers, and shall be binding upon them and their heirs, successors and assigns.

6. Amendments and Modifications. This Note may not be changed orally, but only by an amendment in writing signed by New Village Arts and by the City.

7. New Village Arts Assignment Prohibited. In no event shall New Village Arts assign or transfer any portion of this Note without the prior express written consent of the City.

8. Terms. Any terms not separately defined herein shall have the same meanings as set forth in the Loan Agreement .

9. Acceleration and Other Remedies. Upon: (a} the occurrence of an event of Default as defined in the Loan Agreement, or (b} New Village Arts selling, contracting to sell, giving an option to purchase, conveying, leasing, further encumbering, mortgaging, assigning or alienating the New Village Arts's interest in the premises described in the Lease Agreement ("Premises"}, whether directly or indirectly, whether voluntarily or involuntarily or by operation of law, or any interest in the Premises, or suffering its title, or any interest in the Premises to be divested, whether voluntarily or involuntarily, without the consent of the City or as otherwise permitted under the Loan Agreement, City may, at City's option, declare the outstanding principal amount of this Note, together with other charges hereunder, and all other sums secured by any security interest, to be due and payable immediately, and upon such declaration, such principal and other sums shall immediately become and be due and payable without demand or notice. All costs of collection, including, but not limited to, reasonable attorneys' fees and all expenses incurred in connection with protection of, or realization on, the security for this Note, may be added to the principal hereunder, and shall accrue interest as provided herein. City shall at all times have the right to proceed against any portion of the security for this Note in such order and in such manner as City may consider appropriate, without waiving any rights with respect to any of the security. Any delay or omission on the part of the City in exercising any right hereunder, under the Loan Agreement shall not operate as a waiver of such right , or of any other right. No single or partial exercise of any right or remedy hereunder or under the Loan Agreement or any other document or agreement shall preclude other or further exercises thereof, or the exercise of any other right or remedy. The acceptance of payment of any sum payable hereunder, or part thereof, after the due date of such payment shall not be a waiver of the City's right to either require prompt payment when due of all other sums payable hereunder or to declare an event of Default for failure to make prompt or complete payment.

10. Consents. Pursuant to the terms and condition of the Loan Agreement and any changes thereto, New Village Arts hereby consents to: (a} any renewal, extension or modification (whether one or more} of the terms and/or time of payment under this Note, (b} the release or surrender or exchange or substitution of all or 11 any part of the security, whether real or personal, or direct or indirect, for the payment hereof, (c) the granting of any other indulgences to New Village Arts, and (d) the taking or releasing of other or additional parties primarily or contingently liable hereunder. Any such renewal, extension, modification, release, surrender, exchange or substitution may be made without notice to any endorser, guarantor or surety hereof, and without affecting the liability of said parties hereunder.

11. Successors and Assigns. Whenever "City" is referred to in this Note, such reference shall be deemed to include the City of Carlsbad and its successors and assigns, including, without limitation, any subsequent assignee or holder of this Note. All covenants, provisions and agreements by or on behalf of New Village Arts, and on behalf of any makers, endorsers, guarantors and sureties hereof which are contained herein shall inure to the benefit of the City and City's successors and assigns.

12. Usury. It is the intention of New Village Arts and City to conform strictly to the Interest Law, as defined below, applicable to this loan transaction . Accordingly, it is agreed that notwithstanding any provision to the contrary in this Note, or in any of the documents securing payment hereof or otherwise relating hereto, the aggregate of all interest and any other charges or consideration constituting interest under the applicable Interest Law that is taken, reserved, contracted for, charged or received under this Note, or under any of the other aforesaid agreements or otherwise in connection with this loan transaction, shall under no circumstances exceed the maximum amount of interest allowed by the Interest Law applicable to this loan transaction. If any excess of interest in such respect is provided for in this Note, or in any of the documents securing payment hereof or otherwise relating hereto, then, in such event:
a. the provisions of this paragraph shall govern and control; b. neither New Village Arts nor New Village Arts' heirs, legal representatives, successors or assigns shall be obligated to pay the amount of such interest to the extent that it is in excess of the maximum amount of interest allowed by the Interest Law applicable to this loan transaction; c. any excess shall be deemed canceled automatically and, if theretofore paid, shall be credited on this Note by City or, if this Note shall have been paid in full, refunded to New Village Arts; and d. the effective rate of interest shall be automatically subject to reduction to the Maximum Legal Rate of Interest (as defined below), allowed under such Interest Law, as now or hereafter construed by courts of appropriate jurisdiction. To the extent permitted by the Interest Law applicable to this loan transaction, all sums paid or agreed to be paid to City for the use, forbearance or detention of the indebtedness evidenced hereby shall be amortized, prorated, allocated and spread throughout the full term of this Note. For purposes of this Note, "Interest Law" shall mean any present or future law of the State of California, the United States of America, or any other jurisdiction which has application to the interest and other charges under this Note. The "Maximum Legal Rate of Interest" shall mean the maximum rate of interest that City may from time-to-time charge New Village Arts, and under which New Village Arts would have no claim or defense of usury under the Interest Law.

13. Miscellaneous. Time is of the essence hereof . This Note shall be governed by and construed under the laws of the State of California except to the extent Federal laws preempt the laws of the State of California .

New Village Arts irrevocably and unconditionally submits to the jurisdiction of the Superior Court of the State of California for the County of San Diego or the United States District Court of the Southern District of California, as City hereof may deem appropriate in connection with any legal action or proceeding arising out of or relating to this Note . New Village Arts also waives any objection regarding personal or in rem jurisdiction or venue. 12 14. No Personal Liability. In the event of any default under the terms of this Note or any security interest, New Village Arts's officers, directors, agents and employees shall not be personally liable for the payment of this Note; provided, however, that the foregoing shall not in any way affect any rights the City may have under any state or federal laws, under this Promissory Note (as a secured party or otherwise), or under the Loan Agreement or any security interest to recover directly from New Village Arts any losses, damages, costs and expenses incurred by the City, or any funds, damages or costs (including without limitation reasonable attorneys' fees and costs) incurred by City as a result of fraud, misrepresentation or waste, and any costs and expenses incurred by the City in connection thereof (including without limitation reasonable attorneys' fees and costs).

NEW VILLAGE ARTS:

New Village Arts, Inc.,
a California nonprofit corporation
13 CALfFORNIA. A.LL-PURF>OSE ACKNOWLEDGMENT CIVIL CODE§ 1189 A notary public or other officer completing this certificate verifies only the identity of the individual who signed the document to which this certificate is attached, and not the trut_hfulness, accuracy, or validity of that document.

State of California )
County of SA.....i b\e(,{) )
On I f'aoJzs: before me, ------=C_\J_IZ,t-"-'J'--S----'~=Af-t:~~SO_t,..l __ , ~~-+-. __,_fZJ'-~....____,_i'_o-=P,-=L,=1-"'C.._____ Date · Here Insert Name and Title of the Officer
personally appeared ------~ M'--"-'Jr~ ( ~'f--~~~------------- Name(s) of Signer(s)
who proved · to me on the basis of satisfactory evidence to be the person(s) whose name(s) is/are subscribed to the within .instrument and acknowledged to me that he/she/they executed the same in his/her/their authorized capacity(ies), and that by his/her/their signature(s) on the instrument the person(s), or the entity upon behalf of which the person(s) acted ; executed the instrument.

I certify under PENAL TY OF PERJURY under the laws
of the State of California that the foregoing paragraph is true and correct." •
············i
..
• CURTIS JACKSON
j Moi.ry P\Jbllc • C.llfornt1 •
1 San Ditto County !
·eommtsston 112517938
My Comm. [llptrts MIY 10, 2029
Place Notary Seal Above
----------------OPTIONAL----------------
Though this section is optional, completing this information can deter alteration of the document or • fraudulent reattachment of this form to an unintended document.

Description of Attached Document
Title or Type of Document: ____________________________ _ Document Date: ___________________ Number . of Pages: _____ _ Signer(s) Other Than Named Abpve : ---------------:----------- Capacity(ies) Claimed by Signer(s)
Signer's Name: ____________ _ Signer's Name: ____________ _ D Corporate Officer - Title(s): ______ _ D Corporate Officer - Title(s): ______ _ D Partner - D Limited D General D Partner :_ D Limited D General D Individual D Attorney in Fact D lndividuai D Attorney in Fact D Trustee D Guardian or Conservator D Trustee D Guardian or Conservator D Other: ______________ _ D Other: ______________ _
Signer Is Representing : _________ _ Signer Is Representing: _________ _ ~~~,w.,~~~~~
©2015 National Notary Association· www.NationalNotary.org • 1-800-US NOTARY (1-800-876-6827) Item #5907 8/14/25, 3:13 PM
PLEASE COMPLETE THIS INFORMATION.

RECORDING REQUESTED BY:

Carlsbad City Clerk's Office
AND WHEN RECORDED MAIL TO:

City Clerk
City of Carlsbad
1200 Carlsbad Village Dr.

Carlsbad, CA 92008
APN: 203-295-01, 203-295-02
The undersigned granter declare(s):

Documentary transfer tax is$ 0.00
Batch 19685804 Confirmation
DOC# 2025-0224516
111111111111 lllll 1111111111111111111111111111111111111111 IIIII IIII IIII Aug 14, 2025 02:48 PM

OFFICIAL RECORDS
JORDAN Z. MARKS,

SAN DIEGO COUNTY RECORDER
FEES: $185.00 (SB2 Atkins: $150.00)
PCO~: N/A
PAGES: 8

THIS SPACE FOR RECORDER'S USE ONLY
[] computed on the full value of the interest or property conveyed; or [] computed on the full value less the value of liens or encumbrances remaining thereon at the time of sale.
[] Unincorporated area: [x] City of Carlsbad
Document: First Amendment to Unrecorded Lease Agreement Dated: July 17, 2025
https://gs.secure-erds.com/Batch/Confirmation/19685804 1/2 Attachment B

FIRST AMENDMENT TO LEASE AGREEMENT
Ji This First Amendment to the Lease Agreement dated July 27, 2021 ("First Amendment") is effective as of U \ ~ I 1 , 2025 (the "Effective Date"), by and between the CITY OF CARLSBAD, a California municipal corporation ("Landlord") and NEW VILLAGE ARTS, INC., a California tax exempt non-profit public benefit corporation under Section 501(c)(3) of the U.S. Internal Revenue Code ("Tenant") (collectively, "Parties").

RECITALS
WHEREAS, on July 27, 2021, Tenant and Landlord entered into that certain Lease Agreement for the property located at 2787 State Street, Carlsbad, California, consisting of approximately 9,400 square feet of commercial building space, designated as Assessor Parcel Number 203-295-01 and 02 ("Premises"), authorized by Resolution No. 2021-182 ("Lease Agreement"); and
WHEREAS, on Oct. 30, 2024, Tenant submitted a request to Landlord initially seeking a $893,259 loan to retire its building renovation loan with Endeavor Bank related to its tenant improvement project; and WHEREAS, Tenant informed Landlord that it was awarded a Prebys Foundation ("Foundation") $1:$1 matching grant for every dollar raised to meet the Foundation's target fundraising goals from October 2024 through December 2025, up to a total of $625,000, which would allow Tenant to raise a total of $1.25M; and WHEREAS, the Foundation also awarded Tenant an additional $125,000 in resources to help guide their capital fundraising campaign over the term of the matching grant through December 2025; and WHEREAS, on Jan. 28, 2025, the City Council adopted Resolution No. 2025-028 thereby appointing the City Manager, or designee, as the city's real estate negotiator to negotiate a loan agreement with modified lease terms with Tenant; and
WHEREAS, through negotiations, Tenant reduced its loan request to $500,000; and WHEREAS, Tenant shall pay $393,259 towards the Endeavor Bank loan by July 31, 2025, using its fundraising and matching grant funds, thereby reducing the Endeavor Bank loan balance to $500,000; and WHEREAS, Tenant will use the Foundation's matching grant fundraising opportunity to repay any loan obligations due to Landlord; and
• WHEREAS, concurrent with this First Amendment to the Lease Agreement, the Parties executed a Loan Agreement dated d uJ '-O \1 I 2025 for $500,000 to retire Tenant's building renovation loan with Endeavor Bank related to its tenant improvement project wherein any remaining loan balance as of January 31, 2026, will convert into a lease payment obligation ("Loan Agreement"); and WHEREAS, Landlord and Tenant are desirous of amending language and adding additional clauses to the Lease Agreement.

AGREEMENT
NOW, THEREFORE, in consideration of the covenants and conditions contained herein, the Parties hereto agree as follows:
1 1. ARTICLE 1: BASIC LEASE PROVISIONS, Subsection 1.4 Base Rent is deleted in its entirety and replaced with the following language:

1.4 Loan Agreement and Lease Payment Conversion. Pursuant to the Loan Agreement, Landlord agrees to loan $500,000 to Tenant for the sole purpose of retiring the outstanding capital improvement loan held by Endeavor Bank corresponding to the tenant improvement project. Tenant will make interest only payments at a fixed rate of 3% per annum in the amount of $1,250 per month from the Effective Date of the Loan Agreement through January 31, 2026.
(a) Repayment from Capital Fundraising Campaign. Tenant is concurrently pursuing a capital fundraising goal of $250,000 between July 1, 2025 and December 31, 2025, which, if met, will be matched by a $250,000 grant from the Prebys Foundation. The funds raised and matched shall be utilized to repay the $500,000 loan amount by January 31, 2026.

Fundraising Goal/Matching Grant
Fundraising Period Fundraising Goal Prebys Match Total
July 1, 2025 to December $250,000 $250,000 $500,000
31,2025
(b) Conversion to Long-Term Lease Payments. Any remaining unpaid principal balance on the $500,000 Loan Agreement amount remaining as of January 31, 2026, shall convert into a lease payment obligation structured as an equivalent monthly rent payment and amortized over the applicable term according to the schedule below:

If Tenant fails to pay rent within five (5) days of when rent becomes due and payable, Tenant shall pay Landlord a 2% late fee to compensate Landlord for its administrative expenses and/or losses. Tenant acknowledges that late payment by Tenant to Landlord shall cause Landlord to incur costs or losses not contemplated by this Lease, the exact amount of which would be extremely difficult to ascertain. The Parties agree that the 2% late fee represents a fair and reasonable estimate of the costs or losses that Landlord will incur by reason of late payment of rent by Tenant.

Beginning February 1, 2026, on a semi-annual basis, Tenant shall submit financial statements to the City, which must include a complete Profit and Loss Statement and Balance Sheet for the prior six month period. These reporting obligations shall remain in effect for the duration of the lease or until any converted lease obligation resulting from the City loan has been fully repaid. (e) Payment Instructions. Rent shall be delivered to the Finance Department of the City of Carlsbad at 1635 Faraday Avenue, Carlsbad, California, 92008. The designated place of payment and filing may be changed at any time by Landlord upon ten (10) days written notice to Tenant. Tenant assumes all risk of loss if payments are made by mail.
7 2. ARTICLE 9: INSURANCE, is amended to add Section 9.8:

9.8 Failure to Maintain Insurance. If Tenant fails or refuses to procure or maintain insurance as required by this Lease, Landlord shall have the right, at the Landlord's election, and upon ten {10) days prior notice to Tenant, to declare Tenant in breach of this Lease or procure and maintain such insurance. The premiums paid by the Landlord shall be treated as amounts due to the Landlord from Tenant, to be paid on the first day of the month following the date on which the premiums were paid.

Landlord shall give prompt notice of the payment of such premiums, stating the amounts paid and the name of the insured{s).

3. ARTICLE 11: MAINTENANCE AND REPAIR, Section 11.2 "Tenant's Obligations" is deleted in its entirety and replaced with the following language:

11.2 Tenant's Obligations.
{a) In General. Except for Landlord's obligations as set forth in Section 11.3 "Landlord's Obligations," Tenant shall, at Tenant's sole expense, keep the Premises, Utility Installations {intended for Tenant's exclusive use, no matter where located), and Alterations in good order, condition and repair {whether or not the portion of the Premises requiring repairs, or the means of repairing the same, are reasonably or readily accessible to Tenant, and whether or not the need for such repairs occurs as a result of Tenant's use, any prior use, the elements or the age of such portion of the Premises), including, but not limited to, all equipment, systems, or facilities, such as plumbing, HVAC equipment, electrical, lighting facilities, boilers, pressure vessels, fixtures, walls {interior and exterior), foundations, ceilings, roofs, roof drainage systems, floors, windows, doors, plate glass, skylights, landscaping, fences, retaining walls, signs, located in, on, or adjacent to the Premises. Tenant, in keeping the Premises in good order, condition and repair, shall exercise and perform good maintenance practices. Tenant's obligations shall include restorations, replacements or renewals when necessary to keep the Premises and all improvements thereon or a part thereof in good order, condition and state of repair. Tenant shall, during the term of this Lease, keep the exterior appearance of the Premises in a first-class condition {including, e.g. graffiti removal) consistent with the exterior appearance of other similar facilities of comparable age and size in the vicinity, including, when necessary, the exterior repainting of the building. All such maintenance, repair, and replacements shall be performed with due diligence, lien-free, and in a good and workmanlike manner by experienced, licensed contractors who are selected by Tenant and approved by Landlord, or by others as may be approved by the City; provided, however, any work requiring the issuance of a permit by any governmental authority will require a licensed contractor, and any other minor maintenance work or repairs must also be performed by a licensed contractor unless otherwise approved in writing by the City Manager, or designee.
{b) Service Contracts. Tenant shall, at Tenant's sole expense, procure and maintain contracts, with copies to Landlord, in customary form and substance, for all Tenant obligations pursuant to Section

11.2{a), including but not limited to, {i) HVAC equipment, (ii) boiler and pressure vessels, {iii) landscaping and irrigation systems, {iv) roof covering and drains, {v) plumbing, {vi) electrical. However, Landlord reserves the right, upon notice to Tenant, to procure and maintain any or all of such service contracts, and Tenant shall reimburse Landlord, upon a thirty {30) day written demand, for the cost thereof. {c) Failure to Perform. If Tenant fails to perform Tenant's obligations under this Section 11.2, Landlord may enter upon the Premises after 10 days' prior written notice to Tenant {except in the case of an emergency, in which case no notice shall be required), perform such obligations on Tenant's behalf, and put the Premises in good order, condition and repair, and Tenant shall promptly pay to Landlord a sum equal to 115% of the cost thereof upon thirty {30) days written demand. 3 (d) Legal Compliance. Nothing in this Section 11.2 shall relieve Tenant of its obligation to keep fully informed offederal, state, and local laws and ordinances and regulations, which in any manner affect its performance under this Lease, including without limitation, Section 12.6 "Compliance with Prevailing Wage Laws."

4. ARTICLE 11: MAINTENANCE AND REPAIR, Section 11.3 "Landlord's Obligations" is deleted in its entirety and replaced with the following language:

11.3. Landlord's Obligations. From the Effective Date until the expiration or termination of this Lease, it is intended by the Parties that Landlord have no obligation, except for the fire alarm and sprinkler system as well as sidewalks and parkways, to repair or maintain the Premises, or the equipment therein, all of which obligations are intended to be that of the Tenant. It is the intention of the Parties that the terms of this Lease Amendment govern the respective obligations of the Parties as to maintenance and repair of the Premises.

5. ARTICLE 12: ALTERATIONS AND ADDITIONS, is amended to add Section 12.7:

12.7 Consent; Liens; Bonds.
(a) Definitions. The term "Utility Installations" refers to all floor and window coverings, air and/or vacuum lines, power panels, electrical distribution, security and fire protection systems, communication cabling, lighting fixtures, HVAC equipment, plumbing, and fencing in or on the Premises. The term "Trade Fixtures" shall mean Tenant's machinery and equipment that can be removed without doing material damage to the Premises. The term "Alterations" shall mean any modification of the Premises, including the Tenant Improvement Project, other than Utility Installations or Trade Fixtures, whether by addition or deletion. "Alterations and/or Utility Installations" shall not include Tenant's Property as defined in Sections 2.5 and 13.1 of the Lease Agreement.
(b) Consent. Tenant shall not make any Alterations or Utility Installations to the Premises without Landlord's prior written consent. Tenant may, however, make nonstructural alterations or Utility Installations to the interior of the Premises (excluding the roof) without such consent but upon notice to Landlord, as long as they are not visible from the outside, do not involve puncturing, relocating or removing the roof or any existing walls, will not affect the electrical, plumbing, HVAC, and/or life sc1fety systems, do not trigger the requirement for additional modifications and/or improvements to the Premises resulting from any applicable requirements, including but not limited to, compliance with Title

24. Notwithstanding the foregoing, Tenant shall not make or permit any roof penetrations and/or install anything on the roof without the prior written approval of Landlord. Landlord may, as a precondition to granting such approval, require Tenant to utilize a contractor chosen and/or approved by Landlord. Any Alterations or Utility Installations that Tenant shall desire to make and which require the consent of the Landlord shall be presented to Landlord in written form with detailed plans. Consent shall be deemed conditioned upon Tenant's: (i) acquiring all applicable governmental permits, (ii) furnishing Landlord with copies of both the permits and the plans and specifications prior to commencement of the work, and (iii) compliance with all conditions of said permits and other applicable requirements in a prompt and expeditious manner. Any Alterations or Utility Installations shall be performed in a workmanlike manner with good and sufficient materials. Tenant shall promptly upon completion furnish Landlord with as-built plans and specifications.
(c) Liens; Bonds. Tenant shall keep the Premises and any interest therein, free and clear of all mechanics' liens and all other liens. Tenant shall pay, when due, all claims for labor or materials furnished or alleged to have been furnished to or for Tenant at or for use on the Premises. Tenant shall give Landlord immediate written notice of any lien filed against the Premises or any interest therein related to or arising from work performed by or for the Tenant. Tenant shall give Landlord not less than 10 days' notice prior to the commencement of any work in, on or about the Premises, and Landlord shall have the right to post 4 notices of non-responsibility. If Tenant shall contest the validity of any such lien, claim or demand, then Tenant shall, at its sole cost and expense indemnify, defend, and hold harmless, Landlord and the Premises against the same and shall pay and satisfy any such adverse judgment that may be rendered thereon before the enforcement thereof. If Landlord shall require, Tenant shall furnish a surety bond, licensed by the Insurance Commissioner of the State of California and meeting any requirements set forth by the Finance Department, in an amount equal to 150% of the amount of such contested lien, claim or demand, indemnifying Landlord against liability for the same. If Landlord elects to participate in any such action, Tenant shall pay Landlord's attorneys' fees and costs. Landlord shall have the right to declare this Lease in breach in the event the bond required by this paragraph has not been deposited with Landlord within thirty {30) days after written request has been delivered to Tenant.

6. Unless otherwise defined, or the context otherwise indicates, the terms as used herein have the meaning defined in the Agreement. The provisions of this First Amendment shall control over any inconsistent provisions of the Lease. All provisions in the Agreement that are not addressed and amended in this First Amendment shall remain in full force and effect and are hereby ratified and reaffirmed.

7. The individuals executing this First Amendment to the Lease Agreement each represent and warrant that they have the legal power, right, and actual authority to bind Tenant to the terms and conditions of this First Amendment.
[Signature Page to Follow]
5 The individuals executing this First Amendment to the Lease Agreement represent and warrant that they have the right, power, legal capacity and authority to enter into and to execute this Lease on behalf of the respective legal entities of Tenant and Landlord.

IN WITNESS WHEREOF, the Parties hereto for themselves, successors, and assigns do hereby agree to the full performance of the covenants herein contained and have caused this First Amendment to be executed by setting hereunto their signatures on the day and year respectively written herein below.

Executed by New Village Arts this 10th day of July, 2025.

NEW VILLAGE ARTS, INC., a California non
profit public benefit corporation
By:
(sign here)
Directors
CITY OF CARLSBAD, a municipal
corporation of the State of California
By:
~ Y-\-___
City Manager
ATTEST:

SHERRY FREISINGER, City Clerk
By:

NOTARY ACKNOWLEDGEMENT OF TENANT'S SIGNATURE(S) MUST BE ATTACHED APPROVED AS TO FORM:

CINDIE K. McMAHON, City Attorney
6 C.A.LfFORNlA ALL-PURPOSE ACKNOWLEDGMENT CIVIL CODE§ 1189 . . .

A notary public or other officer completing this certificate verifies only the identity of the individual who signed the document to which.this certificate is attached, and not the truthfulness, accuracy, or validity of that document.

State of California )
County of SAt--> l>\~ )
On 7 } 10 ltS:: before me, C111-1) S J Ill<:.~ t t-->0"fAL~ 'PuJ l-1 C Oate Here Insert Name and Title of the Officer
personally appeared ______ .,_M--=-=--A---=t..=Yi___.:::c~=~=f..:;_(l_=-------------- Name(s) of Signer(s)
. . .
who proved· to m·e on the basis of satisfactory evidence to be the person(s) whose name(s) is/are subscribed to the within instrument and acknowledged to me that he/she/they executed the same in his/her/their authorized capacity(ies), and that by his/her/their signature(s) on the instrument the person(s), or the entity upon behalf of which the person(s) acted, executed the instrument.

I certify under PENAL 1Y OF PERJURY under the laws
of the State of CaHfo that the foregoing paragr ph
is true and correct. i a o a t e n,o a e n s • 1
;1, CURTIS JaCkSOM
: • Notary l'ubllt. C.Ufornla I l ~ San Di._o County .

Commlnlon /12517931
My Comm. Expires MAy 10, 2029
Place Notary Seal Above
---------------OPTIONAL---------------
Though this section is optional, completing this information can deter alteration of the document or fraudulent reattachment of this form to an unintended document.

Description of Attache_d Document
Title or Type of Document: ___________________________ _ Document Date: __________________ Number of Pages: _____ _ Signer(s) Other Than Named Abpve: _______________________ _ Capacity(ies) Claimed by Signer(s)
Signer's Name: ___________ _ Signer's Name: ___________ _ D Corporate Officer -Title(s): ______ _ D Corporate Officer -Title(s): ______ _ D Partner -D Limited D General D Partner :..... D Limited D General 0 Individual O Attorney in Fact D lndividuai D Attorney in Fact D Trustee D Guardian or Conservator D Trustee D Guardian or Conservator D Other: ______________ _ 0 Other: _____________ _
Signer Is Representing: ________ _ Signer Is Representing: ________ _ ~~~~-@.,~
©2015 National Notary Association· www.NationalNotary.org • 1-800-US NOTARY (1-800-876-6827) Item #5907

Carlsbad City CouncilJuly 15, 2025

Carlsbad City Council
July 15, 2025