OH&S 6/2/26 Draft
4155-6902-5128.4
LEASE AGREEMENT
by and between
CULVER CITY PUBLIC FINANCE AUTHORITY
and
THE CITY OF CULVER CITY
Dated as of _________ 1, 2026
TABLE OF CONTENTS
Page
i
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ARTICLE I DEFINITIONS; RULES OF CONSTRUCTION ............................................ 2 ARTICLE II LEASE OF PROPERTY; TERM .................................................................... 6 ARTICLE III RENTAL PAYMENTS ................................................................................... 7
ARTICLE IV CONSTRUCTION, IMPROVEMENT, AND INSTALLATION OF THE PROJECT; MAINTENANCE; ALTERATIONS AND
ADDITIONS; LIENS .................................................................................... 10 ARTICLE V INSURANCE; NET PROCEEDS; EMINENT DOMAIN ............................ 12
TABLE OF CONTENTS
(continued)
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ARTICLE VI REPRESENTATIONS; COVENANTS ........................................................ 17 ARTICLE VII LEASE DEFAULT EVENTS AND REMEDIES ......................................... 19 ARTICLE VIII AMENDMENTS; ASSIGNMENT AND SUBLEASING;
SUBSTITUTION OR RELEASE .................................................................. 22 ARTICLE IX MISCELLANEOUS ...................................................................................... 24
TABLE OF CONTENTS
(continued)
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EXHIBIT A DESCRIPTION OF THE PROPERTY ............................................................... A-1 EXHIBIT B DESCRIPTION OF THE PROJECT ................................................................... B-1 EXHIBIT C BASE RENTAL PAYMENTS SCHEDULE ...................................................... C-1
4155-6902-5128.4
LEASE AGREEMENT
THIS LEASE AGREEMENT (this “Lease Agreement”), dated as of _________ 1, 2026, is by and between the CULVER CITY PUBLIC FINANCE AUTHORITY, a joint powers authority organized and existing under the laws of the State of California (the “ Authority”), as lessor and the CITY OF CULVER CITY, a municipal corporation and charter city organized and existing under the laws of the State of California (the “City”), as lessee.
RECITALS
WHEREAS, the City desires to finance and refinance (i) recreational park and community facility improvements; (ii) City infrastructure projects, including bridges, streets, alleys, parking lots, landscaping, sidewalks, storm drains, and other right -of-way, and equipment improvements and related administrative costs; (iii) related capital facilities; (iv) City and/or Housing Authority affordable housing commitments—including Jubilo Village, Ballona Creek Affordable Housing, and Washington Palm; (v) interim support for Culver City Unified School District; (vi) capitalized interest on the bonds; and (vii) costs of issuance of the bonds, as more particularly described in Exhibit B to this Lease Agreement (together, the “Series 2026 Project”); WHEREAS, the Authority desires to assist the City with such financing; WHEREAS, to finance the Series 2026 Project, the City is leasing certain real property and the improvements thereto constituting the Ince Parking Structure and the Watseka Parking Structure as described in Exhibit A attached hereto ( as more particularly defined herein, the “Property”), to the Authority pursuant to a Ground Lease, dated as of the date hereof, and the City is subleasing the Property back from the Authority pursuant to this Lease Agreement; WHEREAS, to provide the funds necessary to finance the Series 2026 Project, the Authority is issuing $__________ aggregate principal amount of its Culver City Public Finance Authority Lease Revenue Bonds, Series 2026A (the “Series 2026A Bonds”) and $__________ aggregate principal amount of its Culver City Public Finance Authority Lease Revenue Bonds, Series 2026B (Federally Taxable) (the “Series 2026B Bonds” and, together with the Series 2026A Bonds, the “Series 2026 Bonds”), payable from the base rental payments to be made by the City pursuant to this Lease Agreement;
WHEREAS, the Authority and the City desire to provide for the issuance of additional bonds (the “Additional Bonds”) payable from the base rental payments on a parity with the Series 2026 Bonds (the Series 2026 Bonds and any such Additional Bonds being collectively referred to as the “Bonds”); and
WHEREAS, all acts, conditions and things required by law to exist, to have happened and to have been performed precedent to and in connection with the execution and entering into of this Lease Agreement do exist, have happened and have been performed in regular and due time, form and manner as required by law, and the parties hereto are now duly authorized to execute and enter into this Lease Agreement;
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NOW, THEREFORE, in consideration of the premises and of the mutual agreements and covenants contained herein and for other valuable consideration, the parties hereto do hereby agree as follows:
ARTICLE I
DEFINITIONS; RULES OF CONSTRUCTION
Definitions. Unless the context otherwise requires, the terms defined in this Section shall, for all purposes of this Lease Agreement, have the meanings herein specified, which meanings shall be equally applicable to both the singular and plural forms of any of the terms herein defined. Capitalized terms not otherwise defined herein shall have the meanings ascribed thereto in the Indenture.
“Additional Rental Payments ” means all amounts payable by the City as Additional Rental Payments pursuant to Section 3.03 hereof.
“Authority” means the Culver City Public Finance Authority, a joint powers authority organized and existing under the laws of the State, and any successor thereto. “Authorized Representative” means (a) with respect to the Authority, the Chair, Vice Chair, Executive Director, Secretary, and Treasurer of the Authority, and any other Person designated as an Authorized Representative of the Authority in a Written Certificate of the Authority filed with the Trustee, and (b) with respect to the City, the Mayor, the Vice Mayor, the City Manager, the Chief Financial Officer , and any other Person designated as an Authorized Representative of the City in a Written Certificate of the City filed with the Trustee. “Base Rental Payments ” means all amounts payable to the Authority from the City as Base Rental Payments pursuant to Section 3.02 hereof.
“Bonds” means the Series 2026 Bonds and any Additional Bonds. “Business Day” means a day that is not (a) a Saturday, Sunday or legal holiday in the State, (b) a day on which banking institutions in the State, or in any state in which the Office of the Trustee is located, are required or authorized by law (including executive order ) to close, or (c) a day on which the New York Stock Exchange is closed. “City” means the City of Culver City, a municipal corporation and charter city organized and existing under the laws of the State, and any successor thereto. “Code” means the Internal Revenue Code of 1986.
“Closing Date” means, as the context suggests, the date on which the respective Series of Bonds are initially delivered to the initial purchaser thereof and, with respect to the Series 2026 Bonds, the date upon which the Series 2026 Bonds are delivered to the Original Purchaser, ______ __, 2026.
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“Fair Rental Value ” means, with respect to the Property, the annual fair rental value thereof.
“Fiscal Year” means the period beginning on July 1 of each year and ending on the next succeeding June 30, or any other twelve -month period hereafter selected and designated as the official fiscal year period of the City.
“Ground Lease” means the Ground Lease, dated as of _________ 1, 2026, by and between the City and the Authority, as originally executed and as it may from time to time be amended in accordance with the provisions thereof and hereof.
“Indenture” means the Indenture, dated as of _________ 1, 2026, by and among the Authority, the City and U.S. Bank Trust Company, National Association, as Trustee, as originally executed and as it may be amended or supplemented from time to time in accordance with the provisions thereof.
“Interest Payment Dates ” means February 1 and August 1 of each year, commencing February 1, 2027.
“Lease Agreement” means this Lease Agreement, dated as of _________ 1, 2026, by and between the City and the Authority, as the same may be amended or supplemented pursuant to the provisions hereof.
“Lease Default Event” means any event or circumstance specified in Section 7.01 hereof as a Lease Default Event.
“Net Proceeds ” means any insurance proceeds or condemnation award in excess of $50,000, paid with respect to any of the Property, remaining after payment therefrom of all reasonable expenses incurred in the collection thereof. “Opinion of Bond Counsel” means a written opinion of counsel of recognized national standing in the field of law relating to municipal bonds, appointed and paid by the Authority and satisfactory to and approved by the Trustee.
“Outstanding” has the meaning ascribed to such term in the Indenture. “Permitted Encumbrances” means with respect to the Property, as of any particular time (a) liens for general ad valorem taxes and assessments, if any, not then delinquent, or that the City may, pursuant to provisions of Section 6.06 hereof, permit to remain unpaid, (b) this Lease Agreement, (c) the Ground Lease, ( d) parking license, use and commercial use agreements, easements, rights of way, mineral rights, drilling rights and other rights, reservations, covenants, conditions or restrictions that exist of record as of the Closing Date, (e) any license with respect to the use of, or lease agreement for, solar equipment and footprint thereof or similar financing program as may be entered into by the City in support of a loan by the State of California Energy Commission or similar loan or grant by an agency or instrumentality of the State that the City certifies in writing does not affect the intended use of the Property or impair the security granted to the Trustee for the benefit of the Owners of the Bonds by the Indenture; and (f) easements, rights of way, mineral rights, drilling rights and other rights, reservations, covenants, conditions or
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restrictions established following the Closing Date that the City certifies in writing do not affect the intended use of the Property or impair the security granted to the Trustee for the benefit of the Owners of the Bonds by the Indenture.
“Project” means the Series 2026 Project as described in Exhibit B hereto, a portion of the costs of which are to be financed with proceeds of the Series 2026 Bonds and, as the context suggests, such other projects the costs of which are to be financed with proceeds of the Bonds. “Property” means the real property described in Exhibit A hereto and any improvements thereto, including any addition, substitution, or release thereof in accordance with the Ground Lease and this Lease Agreement.
“Rental Payments” means, collectively, the Base Rental Payments and the Additional Rental Payments.
“Rental Period” means the period from the Closing Date through June 30, 2026 and, thereafter, the twelve- month period commencing on July 1 of each year during the term of this Lease Agreement.
“Scheduled Termination Date” means February 1, 2056.
“Series 2026 Bonds” means collectively the Series 2026A Bonds and the Series 2026B Bonds.
“Series 2026 Project” means costs to finance and refinance (i) recreational park and community facility improvements; (ii) City infrastructure projects, including bridges, streets, alleys, parking lots, landscaping, sidewalks, storm drains, and other right -of-way, and equipment improvements and related administrative costs ; (iii) related capital facilities; (iv) City and/or Housing Authority affordable housing commitments —including Jubilo Village, Ballona Creek Affordable Housing, and Washington Palm; (v) interim support for Culver City Unified School District; (vi) capitalized interest on the Series 2026 Bonds; and (vii) costs of issuance of the Series 2026 Bonds, as more particularly described in Exhibit B hereto, a portion of the costs of which are to be financed with proceeds of the Series 2026 Bonds.
“Series 2026A Bonds” means the Culver City Public Finance Authority Lease Revenue Bonds, Series 2026A, issued under the Indenture.
“Series 2026A Project” means those components of the Series 2026 Project including the design, engineering, construction, improvement, and installation of (i) recreational park and community facility improvements; (ii) City infrastructure projects, including bridges, streets, alleys, parking lots, landscaping, sidewalks, storm drains, and other right -of-way, and equipment improvements and related administrative costs; and (iii) related capital facilities and administrative costs, as more particularly described in Exhibit B to the Lease Agreement, a portion of the costs of which are to be financed with proceeds of the Series 2026A Bonds. “Series 2026B Bonds” means the Culver City Public Finance Authority Lease Revenue Bonds, Series 2026B (Federally Taxable), issued under the Indenture.
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“Series 2026B Project” means those components of the Series 2026 Project including the financing and refinancing of (i) City and/or Housing Authority affordable housing commitments— including Jubilo Village, Ballona Creek Affordable Housing, and Washington Palm and related administrative costs; and (ii) interim support for Culver City Unified School District, as more particularly described in Exhibit B to the Lease Agreement, a portion of the costs of which are to be financed with proceeds of the Series 2026B Bonds.
“State” means the State of California.
“Tax-Exempt” means, with respect to interest on any obligations of a state or local government, including interest on the Series 2026A Bonds, that such interest is excluded from the gross income of the holders thereof for federal income tax purposes, whether or not such interest is includable as an item of tax preference or otherwise includable directly or indirectly for purposes of calculating other tax liabilities, including any alternative minimum tax or environmental tax under the Code.
“Trustee” means U.S. Bank Trust Company, National Association, as trustee under the Indenture, or any successor thereto as trustee thereunder substituted in its place as provided therein. “Written Certificate” and “Written Request” of the City mean, respectively, a written certificate or written request signed in the name of the City by an Authorized Representative of the City and, of the Authority mean, respectively, a written certificate or written request signed in the name of the Authority by an Authorized Representative of the Authority. Any such certificate or request may, but need not, be combined in a single instrument with any other instrument, opinion, or representation, and the two or more so combined shall be read and construed as a single instrument.
Rules of Construction . (a) The terms defined herein expressed in the singular shall, unless the context otherwise indicates, include the plural and vice versa. (b) The use herein of the masculine, feminine or neuter gender is for convenience only and shall be deemed and construed to include correlative words of the masculine, feminine or neuter gender, as appropriate.
(c) References herein to a document shall include all amendments, supplements or other modifications to such document, and any replacements, substitutions, or novation of, that document.
(d) Any term defined herein by reference to another document shall continue to have the meaning ascribed thereto whether or not such other document remains in effect. (e) The use herein of the words “ including” and “includes,” and words of similar import, shall be deemed to be followed by the phrase “without limitation.” (f) Headings of Articles and Sections herein and the table of contents hereof are solely for convenience of reference, do not constitute a part hereof and shall not affect the meaning, construction, or effect hereof.
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(g) All references herein to designated “ Articles,” “Sections,” “Exhibits,” “subsections,” “paragraphs,” “clauses,” and other subdivisions are to the designated Articles, Sections, Exhibits, subsection s, paragraphs, clauses, and other subdivisions of this Lease Agreement.
(h) The words “ hereof” (except when preceded by a specific Section or Article reference) “herein,” “hereby,” “hereunder,” “hereinabove,” “hereinafter,” and other equivalent words and phrases used herein refer to this Lease Agreement and not solely to the particular portion hereof in which any such word is used.
ARTICLE II
LEASE OF PROPERTY; TERM
Lease of Property. (a) The Authority hereby leases to the City and the City hereby leases from the Authority the Property, on the terms and conditions hereinafter set forth, and subject to all Permitted Encumbrances.
(b) The leasing of the Property by the City to the Authority pursuant to the Ground Lease shall not effect or result in a merger of the City’s leasehold estate in the Property as lessee under this Lease Agreement and its leasehold or fee estate, as applicable, in the Property as lessor under the Ground Lease, and the Authority shall continue to have a leasehold estate in the Property pursuant to the Ground Lease throughout the term thereof and hereof. This Lease Agreement shall constitute a sublease with respe ct to the Property. The leasehold interest in the Property granted by the City to the Authority pursuant to the Ground Lease is and shall be independent of this Lease Agreement; this Lease Agreement shall not be an assignment or surrender of the leasehold interest in the Property granted to the Authority under the Ground Lease.
Occupancy; Term. (a) The City shall take possession of the Property on the Closing Date.
(b) The term of this Lease Agreement shall commence on the Closing Date and shall end on the Scheduled Termination Date unless such term is extended or sooner terminated as hereinafter provided.
(c) If all of the Property shall be taken under the power of eminent domain, and the City does not elect to cause alternate real property to be substituted for all or a portion of the Property pursuant to, and in accordance with the provisions of, Section 8.03 hereof, as provided in clause (i) of Section 5.07(c) hereof but, rather, elects to deliver or cause to be delivered any award made in eminent domain proceedings for such taking to the Trustee for the application to the redemption, pursuant to Section 4.01 of the Indenture, of all or a portion of the Outstanding Bonds, as provided in clause (ii) of Section 5.07(c) hereof, then, on the date that possession thereof shall be so taken, the term of this Lease Agreement shall terminate. (d) If, prior to the Scheduled Termination Date, all Bonds shall be fully paid, or deemed paid in accordance with Article X of the Indenture, then, on the date of such payment or deemed payment, the term of this Lease Agreement shall terminate.
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(e) If on the Scheduled Termination Date, the Rental Payments payable hereunder shall have been abated at any time and for any reason, then the term of this Lease Agreement shall be extended until the date upon which all such Rental Payments shall have been pa id in full, except that the term of this Lease Agreement shall in no event be extended more than ten years beyond the Scheduled Termination Date.
(f) Upon the termination of the term of this Lease Agreement (other than as provided in Section 7.01 hereof), and the first date upon which the Bonds are no longer Outstanding, all right, title and interest in and to the Property shall vest in the City. Upon any such termination or expiration, the Authority and the Trustee shall execute such conveyances, deeds and other documents as may be necessary to effect such vesting of record.
ARTICLE III
RENTAL PAYMENTS
Rental Payments . (a) Rental Payments, consisting of Base Rental Payments and Additional Rental Payments, shall be paid by the City to the Authority for and in consideration of the right to use and occupy the Property and in consideration of the continued right to the quiet us e and enjoyment thereof during each Rental Period for which such Rental Payments are to be paid.
(b) The obligation of the City to make the Rental Payments, including the Base Rental Payments, does not constitute a debt of the City or of the State or of any political subdivision thereof within the meaning of any constitutional or statutory debt limit or restriction, and does not constitute an obligation for which the City or the State is obligated to levy or pledge any form of taxation or for which the City or the State has levied or pledged any form of taxation. (c) If the term of this Lease Agreement shall have been extended pursuant to Section 2.02 hereof, the obligation of the City to pay Rental Payments shall continue to and including the Base Rental Deposit Date preceding the date of termination of this Lease Agreement, as so extended.
Base Rental Payments . (a) The City, subject to the provisions of Section 3.07 hereof, shall pay Base Rental Payments to the Authority. The Base Rental Payments shall be due and payable no later than the fifth Business Day next preceding each Interest Payment Date (the “Base Rental Deposit Date”) on which such Base Rental Payment is due in an amount equal to the principal, if any, of and interest on the Bonds due and payable on such Interest Payment Date, including principal due and payable by reason of mandatory sinking fund redemption of the Bonds.
(b) If the term of this Lease Agreement shall have been extended pursuant to Section 2.02 hereof, the Base Rental Payments shall be established so that the Base Rental Payment payable on each Base Rental Deposit Date after the Scheduled Termination Date shall be equal to the principal, if any, of and interest on the Bonds remaining due and payable on such Base Rental Deposit Date; provided, however, that the Rental Payments payable in any Rental Period shall not exceed the annual fair rental value of the Property.
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Additional Rental Payments . (a) The City shall also pay, as Additional Rental Payments, such amounts as shall be required for the payment of the following:
(i) all taxes and assessments of any type or nature charged to the Authority or the City or affecting the Property or the respective interests or estates of the Authority or the City therein;
(ii) insurance premiums for all insurance required pursuant to Article V hereof; and
(iii) all other payments not constituting Base Rental Payments required to be paid by the City pursuant to the provisions of this Lease Agreement. (b) Amounts constituting Additional Rental Payments payable hereunder shall be paid by the City directly to the person or persons to whom such amounts shall be payable. The City shall pay all such amounts when due or at such later time as such amounts may be paid without penalty or, in any other case, within 60 days after notice in writing from the Trustee to the City stating the amount of Additional Rental Payments then due and payable and the purpose thereof.
Fair Rental Value. The parties hereto have agreed and determined that the Fair Rental Value of the Property is not less than $__________ as of the Closing Date. In making such determinations of Fair Rental Value, consideration has been given to the existing encumbrances on the Property detailed in the CLTA leasehold owner’s policy delivered as of the Closing Date, the uses and purposes that may be served by the Property, and the benefits therefrom that will accrue to the City and the general public. The City affirms that such existing encumbrances on the Property will not materially interfere with the City’s use and occupancy and enjoyment of the Property for its purposes. Payments of the Rental Payments for the Property during each Rental Period shall constitute the total rental for said Rental Period.
Payment Provisions. Each installment of Base Rental Payments payable hereunder shall be paid in lawful money of the United States of America to or upon the order of the Authority at the Office of the Trustee, or such other place or entity as the Authority shall designate. Each Base Rental Payment shall be deposited with the Trustee no later than the Base Rental Deposit Date preceding the Interest Payment Date on which such Base Rental Payment is due. Any Base Rental Payment that shall not be paid by the City when due and payable under the terms of this Lease Agreement shall bear interest from the date when the same is due hereunder until the same shall be paid at a rate equal to the highest rate of interest on any of the Outstanding Bonds. Notwithstanding any dispute between the Authority and the City, the City shall make all Rental Payments when due without deduction or offset of any kind and shall not withhold any Rental Payments pending the final resolution of such dispute. In the event of a determination that the City was not liable for said Rental Payments or any portion thereof, said payments or excess of payments, as the case may be, shall be credited again st subsequent Rental Payments due hereunder or refunded at the time of such determination.
Appropriations Covenant . The City shall take such action as may be necessary to include all Rental Payments due hereunder in its annual budgets and to make necessary annual appropriations for all such Rental Payments. The covenants on the part of the
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City herein contained shall be deemed to be and shall be construed to be duties imposed by law and it shall be the duty of each and every public official of the City to take such action and do such things as are required by law in the performance of the official duty of such officials to enable the City to carry out and perform the covenants and agreements in this Lease Agreement agreed to be carried out and performed by the City.
Rental Abatement. (a) Except as otherwise specifically provided in this Section, during any period in which, by reason of material damage to, or destruction or condemnation of, the Property, or any defect in title to the Property, there is substantial interference with the City’s right to use and occupy any portion of the Property, Rental Payments shall be abated to the extent that the annual Rental Payments payable by the City during such period of abatement exceeds the then Fair Rental Value of the portion of the Property that remains undamaged and not subject to such taking or conveyance , and the City waives the benefits of California Civil Code Section s 1932(1), 1932(2) and 1933(4) and any and all other rights to terminate this Lease Agreement by virtue of any such interference, and this Lease Agreement shall continue in full force and effect. The City and the Authority shall, in a reasonable manner and in good faith, determine the amount of such abatement; provided, however, that the Rental Payments due for any Rental Period shall not exceed the annual fair rental value of that portion of the Property available for use and occupancy by the City during such Rental Period. The City and the Authority shall provide the Trustee with a certificate setting forth the amount of abatement and the basis therefor. Such abatement shall continue for the period commencing with the date of interference resulting from such damage, destruction, condemnation or title defect and, with respect to damage to or destruction of the Property, ending with the substantial completion of the work of repair or replacement of the Property, or the portion thereof so damaged or destroyed. (b) Notwithstanding the foregoing, to the extent that Net Proceeds of rental interruption insurance are available for the payment of Rental Payments, Rental Payments shall not be abated as provided in subsection (a) of this Section but, rather, shall be payable by the City as a special obligation payable solely from such Net Proceeds.
Prepayment. (a) The City may cause all or a portion of the Series 2026 Bonds to be optionally redeemed pursuant to Section 4.02 of the Indenture by prepaying on any date on or after February 1, 20__, all or a portion of the Base Rental Payments from any source of available funds, which prepayment shall be accomplished by the City’s paying an amount sufficient to cause such Series 2026 Bonds to be redeemed pursuant to Section 4.02 of the Indenture on such prepayment date.
(b) The City may prepay, from any source of available funds, all or any portion of the Base Rental Payments by depositing with the Trustee moneys or securities as provided, and subject to the terms and conditions set forth, in Article X of the Indenture sufficient to make such Base Rental Payments when due or to make such Base Rental payments through a specified date on which the City has a right to prepay such Base Rental Payments pursuant to subsection (a) of this Section, and to prepay such Base Rental Payments on such prepayment date, at a prepayment price determined in accordance with subsection (a) of this Section. (c) If less than all of the Base Rental Payments are prepaid pursuant to this Section then, as of the date of such prepayment pursuant to subsection (a) of this Section, or the date of a
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deposit pursuant to subsection (b) of this Section , the principal and interest components of the Base Rental Payments shall be recalculated in order to take such prepayment into account . The City agrees that if, following a partial prepayment of Base Rental Payments, the Property is damaged or destroyed or taken by eminent domain, or a defect in title to the Property is discovered, the City shall not be entitled to, and by such prepayme nt waives the right of, abatement of such prepaid Base Rental Payments and the City shall not be entitled to any reimburs ement of such Base Rental Payments.
(d) If all of the Base Rental Payments are prepaid in accordance with the provisions of this Lease Agreement then, as of the date of such prepayment pursuant to subsection (a) of this Section, or deposit pursuant to subsection (b) of this Section , the term of this Lease Agreement shall be terminated.
(e) Before making any prepayment pursuant to this Article, the City shall give written notice to the Authority and the Trustee specifying the date on which the prepayment will be made, which date shall be not less than 45 days prior to the prepayment date, unless such notice shall be waived by the Authority and the Trustee.
ARTICLE IV
CONSTRUCTION, IMPROVEMENT, AND INSTALLATION OF THE PROJECT; MAINTENANCE; ALTERATIONS AND ADDITIONS; LIENS
Construction, Improvement, Installation and Completion of the Project. The Authority hereby appoints the City as its agent to carry out all phases of the construction, improvement, and installation of the Series 2026A Project. The City hereby accepts such appointment and, as such agent, hereby assumes all duties, rights, responsibilities and liabilities of the Authority regarding the construction, improvement, and installation of the Series 2026A Project. The City, as agent of the Authority, will, in all respects, supervise and provide for, or cause to be supervised and provided for, the construction, improvement, and installation of the Series 2026A Project.
[In connection with the construction, improvement, and installation of the Series 2026A Project, payment of a portion of the Series 2026A Project costs shall be made from the moneys deposited with the Trustee in the Series 2026A Project Account of the Project Fund, which shall be disbursed for such purposes in accordance and upon compliance with Article III of the Indenture. Other than such moneys deposited in the Series 2026A Project Fund, and investment earnings thereon, the Authority shall have no obligation to provide moneys to pay any portion of the Series 2026A Project costs.
The City represents and warrants that the moneys deposited in the Series 2026A Project Account of the Project Fund on the Closing Date, and investment earnings thereon, are expected to be sufficient to pay the Series 2026A Project costs in full.
In connection with the Series 202 6B Project, payment of a portion of the Series 202 6B Project costs shall be made from the moneys deposited with the Authority in the _________
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Account. Other than such moneys deposited in the Series 2026B Project Fund, the Authority shall have no obligation to provide moneys to pay any portion of the Series 2026B Project costs.
The City represents and warrants that the Series 202 6B Project costs shall be made from the moneys deposited with the Authority on the Closing Date, and investment earnings thereon, are expected to be sufficient to pay the Series 2026B Project costs in full.] Quiet Enjoyment. The Authority hereby covenants and agrees that it will not take any action to prevent the City, so long as the City is keeping and performing the covenants and agreements herein contained, from having quiet and peaceable possession and enjoyment of the Property during the term hereof.
Net-Net-Net Lease. This Lease Agreement shall be deemed and construed to be a “net-net-net lease” and the City hereby agrees that the Rental Payments shall be an absolute net return to the Authority, free and clear of any expenses, charges or set -offs whatsoever and notwithstanding any dispute between the City and the Authority.
Right of Entry . The Authority shall have the right to enter upon and to examine and inspect the Property during reasonable business hours (and in emergencies at all times) for any purpose connected with the Authority’s rights or obligations under this Lease Agreement, and for all other lawful purposes.
Maintenance and Utilities. Throughout the term of this Lease Agreement, as part of the consideration for rental of the Property, all improvement, repair and maintenance of the Property shall be the responsibility of the City, and the City shall pay for or otherwise arrange for the payment of all utility services supplied to the Property, which may include, without limitation, janitor service, security, power, gas, telephone, light, heating, ventilation, air conditioning, water and all other utility services, and shall pay for or otherwise arrange for payment of the cost of the repair and replacement of the Property resulting from ordinary wear and tear or want of care on the part of the City or any assignee or sublessee thereof. In exchange for the Rental Payments, the Authority agrees to provide only the Property.
Additions to Property . Subject to Section 4.08 hereof, the City and any sublessee shall, at its own expense, have the right to make additions, modifications and improvements to the Property. To the extent that the removal of such additions, modifications or improvements would not cause material damage to the Property, such additions, modifications and improvements shall remain the sole property of the City or such sublessee, and neither the Authority nor the Trustee shall have any interest therein. Such additions, modificati ons and improvements shall not in any way damage the Property or cause it to be used for purposes other than those authorized under the provisions of state and federal law; and the Property, upon completion of any additions, modifications and improvements made pursuant to this Section, shall be of a value that is at least equal to the value of the Property immediately prior to the making of such additions, modifications and improvements.
Installation of City’s Equipment. The City and any sublessee may at any time and from time to time, in its sole discretion and at its own expense, install or permit to be installed items of equipment or other personal property in or upon the Property. All such items
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shall remain the sole property of the City or such sublessee, and neither the Authority nor the Trustee shall have any interest therein. The City or such sublessee may remove or modify such equipment or other personal property at any time, provided that such party shall repair and restore any and all damage to the Property resulting from the installation, modification or removal of any such items; and the Property, upon completion of any installations, modifications or removals made pursuant to this Section, shall be of a value that is at least equal to the value of the Property immediately prior to the making of such installations, modifications or removals. Nothing in this Lease Agreement shall prevent the City or any sublessee from purchasing items to be installed pursuant to this Section under a conditional sale or lease purchase contract, or subject to a vendor’s lien or security agreement as security for the unpaid portion of the purchase price thereof, provided that no such lien or security interest shall attach to any part of the Property.
Mechanic’s, Etc. Liens. In the event the City shall at any time during the term of this Lease Agreement cause any changes, alterations, additions, improvements, or other work to be done or performed or materials to be supplied, in or upon the Property, the City shall pay, when due, all sums of money that may become due for, or purporting to be for, any labor, services, materials, supplies or equipment furnished or alleged to have been furnished to or for the City in, upon or about the Property and that may be secured by a mecha nics’, materialmen’s or other lien against the Property or the Authority’s interest therein, and shall cause each such lien to be fully discharged and released at the time the performance of any obligation secured by any such lien matures or becomes due, except that, if the City desires to contest any such lien, it may do so as long as such contest is in good faith. If any such lien shall be reduced to final judgment and such judgment or such process as may be issued for the enforcement thereof is not promptly stayed, or if so stayed and said stay thereafter expires, the City shall forthwith pay and discharge said judgment.
Other Liens. The City shall keep the Property and all parts thereof free from judgments and materialmen’s and mechanics’ liens and free from all claims, demands, encumbrances and other liens of whatever nature or character, and free from any claim or liability that materially impairs the City in conducting its business or utilizing the Property, and the Trustee at its option (after first giving the City ten days’ written notice to comply therewith and failure of the City to so comply within such ten- day period) may defend against any and all actions or proceedings, or may pay or compromise any claim or demand asserted in any such actions or proceedings; provided, however, that, in defending against any such actions or proceedings or in paying or compromising any such claims or demands, the Trustee shall not in any event be deemed to have waived or released the City from liability for or on account of any of its agreements and covenants contained herein, or from its obligation hereunder to perform such agreements and covenants. The Trustee shall have no liability with respect to any determination made in good faith to proceed or decline to defend, pay or compromise any such claim or demand.
ARTICLE V
INSURANCE; NET PROCEEDS; EMINENT DOMAIN
Public Liability and Property Damage Insurance; Workers’ Compensation Insurance. (a) The City shall maintain or cause to be maintained, throughout the term of this Lease Agreement, a standard comprehensive general liability insurance policy or
13 4155-6902-5128.4
policies in protection of the City, the Authority and their respective members, officers, agents, and employees. Said policy or policies shall provide for indemnification of said parties against direct or contingent loss or liability for damages for bodily and personal injury, death or property damage occasioned by reason of the use or ownership of the Property. Said policy or policies shall provide coverage in the minimum liability limits of $1,000,000 for personal injury or death of each person and $3,000,000 for personal injury or deaths of two or more persons in a single accident or event, and in a minimum amount of $500,000 for damage to property (subject to a deductible clause of not to exceed $100,000) resulting from a single accident or event. Such public liability and property damage insurance may, however, be in the form of a single limit policy in the amount of $3,000,000 covering all such risks. Such liability insurance may be maintained as part of or in conjunction with any other liability insurance coverage carried or required to be carried by the City. The Net Proceeds of such liability insurance shall be applied toward extinguishment or satisfaction of the liability with respect to which the Net Proceeds of such insurance shall have been p aid. The City’s obligations under this subsection may be satisfied by self -insurance, provided that such self-insurance complies with the provisions of Section 5.04 hereof. (b) The City shall maintain or cause to be maintained casualty insurance insuring the Property against fire, lightning and all other risks covered by an extended coverage endorsement (excluding earthquake and flood) to the full insurable value of the Property, subject to a $100,000 loss deductible provision. Full insurable value shall not be less than the aggregate principal amount of the Outstanding Bond s. The Net Proceeds of such casualty insurance shall be applied as provided in Section 5.05 hereof. The City’s obligations under this subsection may be satisfied by self-insurance, provided that such self -insurance complies with the provisions of Section 5.04 hereof.
(c) The City shall maintain rental interruption insurance to cover the Authority’s loss, total or partial, of Base Rental Payments resulting from the loss, total or partial, of the use of any part of the Property as a result of any of the hazards required to be covered pursuant to subsection (b) of this Section in an amount not less than the product of two times the maximum amount of Base Rental Payments scheduled to be paid during any Rental Period. The Net Proceeds of such rental interruption insurance shall be applied to the payment of Rental Payments during the period in which, as a result of the damage or destruction to the Property that resulted in the receipt of such Net Proceeds, there is substantial interference with the City’s right to the use or occupancy of the Property. The City’s obligations under this subsection may not be satisfied by self-insurance.
(d) The insurance required by this Section other than self-insured as provided shall be provided by reputable insurance companies with claims paying abilities determined, in the reasonable opinion of the City’s professionally qualified risk manager or an independent insurance consultant, to be adequate for the purposes hereof.
Title Insurance. The City covenants and agrees to deliver or cause to be delivered to the Trustee on the Closing Date a CLTA leasehold owner’s policy or policies, or a commitment for such policy or policies, with respect to the Property with liability in the aggregate amount of the principal amount of all Base Rental Payments payable hereunder. Said policy or policies shall insure (a) the fee interest of the City in the Property, (b) the Authority’s ground
14 4155-6902-5128.4
leasehold estate in the Property under the Ground Lease, and (c) the City’s leasehold estate hereunder in the Property, subject only to Permitted Encumbrances.
With respect to the issuance of Additional Bonds, the City shall provide, at its own expense, a CLTA leasehold owner’s policy or policies, endorsement to an existing policy, or reissuance of an existing policy, as determined by the City, insuring not less than the principal amount of the Additional Bonds then being delivered. Said policy or policies shall insure (a) the fee interest of the City in the Property, (b) the Authority’s ground leasehold estate in the Property under the Ground Lease, and (c) the C ity’s leasehold estate hereunder in the Property, subject only to Permitted Encumbrances.
Such policy or policies, when issued, shall name the Trustee as the insured and shall insure the leasehold estate of the City in the Property subject only to such exceptions as do not materially affect the City’s right to the use and occupancy of the Property.
The Net Proceeds of such title insurance shall be applied as provided in Section 5.06 hereof.
Additional Insurance Provision; Form of Policies. (a) The City shall pay or cause to be paid when due the premiums for all insurance policies required by Section 5.01 hereof, and shall promptly furnish or cause to be furnished evidence of such payments to the Trustee. All such policies shall contain a standard lessee clause in favor of the Trustee and the general liability insurance policies shall be endorsed to show the Trustee, as an additional insured.
All such policies shall provide that the Trustee shall be given 30 days’ notice of the expiration thereof, any intended cancellation thereof or any reduction in the coverage provided thereby. The Trustee shall be fully protected in accepting payment on account of such insurance or any adjustment, compromise or settlement of any loss agreed to by the City. (b) The City will deliver to the Authority and the Trustee on the Closing Date and thereafter on or before [September 15] in each year a written Certificate of an officer of the City stating whether such policies satisfy the requirements of this Lease Agreement, setting forth the insurance policies then in force pursuant to this Article, the names of the insurers which have issued the policies, the amounts thereof and the property and risks covered thereby, and, if any self-insurance program is being provided, the annual report of an actuary, independent insurance consultant or other qualified person containing the information required for such self -insurance program and described in Sections 5.01, 5.02 and 5.04. Delivery to the Trustee of the certificate under the provisions of this Section shall not confer responsibility upon the Tr ustee as to the sufficiency of coverage or amounts of such policies. If so requested in writing by the Trustee, the City shall also deliver to the Trustee certificates or duplicate originals or certified copies of each insurance policy described in such schedule. The Trustee shall be entitled to rely upon said Written Certificate of the City as to the City’s compliance with this Article. The Trustee shall not be responsible for the sufficiency of coverage or amounts of such policies.
Self-Insurance. Any self-insurance maintained by the City pursuant to this Article shall comply with the following terms:
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(a) the self -insurance program shall be approved in writing by the City’s professionally qualified risk manager or by an independent insurance consultant; (b) the self-insurance program shall include an actuarially sound claims reserve fund out of which each self -insured claim shall be paid, the adequacy of each such fund shall be evaluated on a bi-annual basis by the City’s professionally qualified risk manager or by an independent insurance consultant and any deficiencies in any self -insured claims reserve fund shall be remedied in accordance with the recommendation of the City’s professionally qualified risk manager or such independent insurance consultant, as applicable; and
(c) in the event the self-insurance program shall be discontinued, the actuarial soundness of its claims reserve fund, as determined by the City’s professionally qualified risk manager or by an independent insurance consultant, shall be maintained.
Damage or Destruction. (a) If the Property or any portion thereof shall be damaged or destroyed, the City shall, within 30 days of the occurrence of the event of damage or destruction, notify the Trustee in writing of the City’s determination as to whether or not such damage or destruction will result in a substantial interference with the City’s right to the use or occupancy of the Property and an abatement in whole or in part of Rental Payments pursuant to Section 3.07 hereof.
(b) If the City determines that such damage or destruction will not result in a substantial interference with the City’s right to the use or occupancy of the Property and an abatement in whole or in part of Rental Payments pursuant to Section 3.07 hereof, the City shall, as expeditiously as possible, continuously and diligently prosecute or cause to be prosecuted the repair or replacement thereof.
(c) If the City determines that such damage or destruction will result in a substantial interference with the City’s right to the use or occupancy of the Property and an abatement in whole or in part of Rental Payments pursuant to Section 3.07 hereof, then the City shall (i) apply sufficient funds from the Net Proceeds of any insurance (other than Net Proceeds of rental interruption insurance), including the proceeds of any self-insurance, received on account of such damage or destruction and other legally available funds to the repair or replacement of the Property or the portions thereof that have been damaged or destroyed to the condition that existed prior to such damage or destruction, provided that, within 40 days of the occurrence of the event of damage or destruction, the City delivers to the Trustee a Written Certificate of the City (A) certifying that the City has sufficient fund s to so complete such repair or replacement of the Property or such portions thereof and identifying such funds and the location thereof, and (B) stating that such funds will not be used for any other purpose until such repair or replacement is completed, (ii) within 60 days of the occurrence of the event of damage or destruction, cause alternate real property to be substituted for all or a portion of the Property pursua nt to, and in accordance with the provisions of, Section 8.03 hereof, or (iii) within 60 days of the occurrence of the event of damage or destruction, deliver sufficient funds from such Net Proceeds and other legally available funds to the Trustee for the application to the redemption, pursuant to Section 4.01 of the Indenture (A) of all of the Outstanding Bonds, or (B) of such portion of the Outstanding Bonds as shall result in (I) the annual fair rental value of the Property after such damage or destruction, and after any
16 4155-6902-5128.4
repairs or replacements made as a result of such damage or destruction, as certified in a Written Certificate of the City delivered to the Trustee, being at least equal to 100% of the maximum amount of the principal (including principal due and payable by reason of mandatory sinking fund redemption of such Bonds) of and interest on the Bonds coming due in the then current Rental Period or any subsequent Rental Period, and (II) the fair replacement value of the Property after such damage or destruction, and after any repairs or replacements made as a result of such damage or destruction, as certified in a Written Certificate of the City delivered to the Trustee, being at least equal to the aggregate principal amount of the Bonds then Outstanding.
Net Proceeds of Title Insurance . (a) If a defect in title to the Property results in the creation of a right to receive Net Proceeds under any policy of title insurance with respect to the Property or any portion thereof, the City shall, within 30 days of the creation of such right, notify the Trustee in writing of the City’s determination as to whether or not such title defect will result in a substantial interference with the City’s right to the use or occupancy of the Property and an abatement in whole or in part of Rental Payments pursuant to Section 3.07 hereof. (b) If the City determines that such title defect will not result in a substantial interference with the City’s right to the use or occupancy of the Property and an abatement in whole or in part of Rental Payments pursuant to Section 3.07 hereof, such Net Proceeds shall be remitted to the City and used for any lawful purpose thereof. (c) If the City determines that such title defect will result in a substantial interference with the City’s right to the use or occupancy of the Property and an abatement in whole or in part of Rental Payments pursuant to Section 3.07 hereof, then the City shall (i) within 60 days of the creation of such right to receive such Net Proceeds, cause alternate real property to be substituted for all or a portion of the Property pursuant to, and in accordance with the provisions of, Section 8.03 hereof, or (ii) immediately upon receipt thereof, deliver or cause to be delivered such Net Proceeds to the Trustee for the application to the redemption, pursuant to Section 4.01 of the Indenture, of all or a portion of the Outstanding Bonds.
Eminent Domain. (a) If all or a portion of the Property shall be taken under the power of eminent domain, the City shall, no later than 45 days prior to the day that possession thereof shall be so taken, notify the Trustee in writing of the City’s determination as to whether or not such taking will result in a substantial interference with the City’s right to the use or occupancy of the Property and an abatement in whole or in part of Rental Payments pursuant to Section 3.07 hereof.
(b) If the City determines that such taking will not result in a substantial interference with the City’s right to the use or occupancy of the Property and an abatement in whole or in part of Rental Payments pursuant to Section 3.07 hereof, any award made in eminent domain proceedings for such taking shall be remitted to the City and used for any lawful purpose thereof. (c) If the City determines that such taking will result in a substantial interference with the City’s right to the use or occupancy of the Property and an abatement in whole or in part of Rental Payments pursuant to Section 3.07 hereof, then the City shall (i) no later than 60 days prior to the day that possession thereof shall be so taken, cause alternate real property to be substituted for all or a portion of the Property pursuant to, and in accordance with the provisions of,
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Section 8.03 hereof, or (ii) immediately upon receipt thereof, deliver or cause to be delivered any award made in eminent domain proceedings for such taking to the Trustee for the application to the redemption, pursuant to Section 4.01 of the Indenture, of all or a portion of the Outstanding Bonds.
ARTICLE VI
REPRESENTATIONS; COVENANTS
Representations of the City. The City represents and warrants (a) that the City has the full power and authority to enter into, to execute and to deliver this Lease Agreement and to perform all of its duties and obligations hereunder, and has duly authorized the execution and delivery of this Lease Agreement, and (b) the Property will be used in the performance of essential governmental functions.
Representation of the Authority. The Authority represents and warrants that the Authority has the full power and authority to enter into, to execute and to deliver this Lease Agreement and the Indenture, and to perform all of its duties and obligations hereunder and thereunder, and has duly authorized the execution and delivery of this Lease Agreement and the Indenture.
Recordation. The City shall record, or cause to be recorded, with the Los Angeles County Recorder, the Lease Agreement and the Ground Lease, or memoranda thereof, and a memorandum of the assignment of the City’s right, title and interest in and to the Ground Lease and the Lease Agreement pursuant to Section 5.01 of the Indenture.
Use of the Property . The City will not use, operate or maintain the Property improperly, carelessly, in violation of any applicable law or in a manner contrary to that contemplated by this Lease Agreement. In addition, the City agrees to comply in all respects (including, without limitation, with respect to the use, maintenance and operation of the Property) with all laws of the jurisdictions in which its operations may extend and any legislative, executive, administrative or judicial body exercising any power or jurisdicti on over the Property; provided, however, that the City may contest in good faith the validity or application of any such law or rule in any reasonable manner that does not, in the opinion of the Authority, adversely affect the estate of the Authority in and to any of the Property or its interest or rights under this Lease Agreement.
Other Liens. The City shall keep the Property and all parts thereof free from judgments and materialmen’s and mechanic ’s liens and free from all claims, demands, encumbrances and other liens of whatever nature or character, and free from any claim or liability that materially impairs the City in conducting its business or utilizing the Property, and the Trustee at its option (after first giving the City ten days’ written notice to comply therewith and failure of the City to so comply within such ten- day period) may defend against any and all actions or proceedings, or may pay or compromise any claim or demand asserted in any such actions or proceedings; provided, however, that, in defending against any such actions or proceedings or in paying or compromising any such claims or demands, the Trustee shall not in any event be deemed to have waived or released the City from liability for or on account of any of its agreements and covenants contained herein, or from its obligation hereunder to perform such agreements and
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covenants. The Trustee shall have no liability with respect to any determination made in good faith to proceed or decline to defend, pay or compromise any such claim or demand.
Taxes. (a) The City shall pay or cause to be paid all taxes and assessments of any type or nature charged to the Authority or affecting the Property or the respective interests or estates therein; provided, however, that with respect to special assessments or other governmental charges that may lawfully be paid in installments over a period of years, the City shall be obligated to pay only such installments as are required to be paid during the term of this Lease Agreement as and when the same become due.
(b) After giving notice to the Authority and the Trustee, the City or any sublessee may, at the City’s or such sublessee’s expense and in its name, in good faith contest any such taxes, assessments, utility and other charges and, in the event of any such contest, may permit the taxes, assessments or other charges so contested to remain unpaid during the period of such contest and any appeal therefrom unless the Authority shall notify the City or such sublessee that, in the opinion of independent counsel, by nonpayment of any such items, the interest of the Authority in the Property will be materially endangered or the Property, or any part thereof, will be subject to loss or forfeiture, in which event the City or such sublessee shall promptly pay such taxes, assessments or charges or provide the Authority with full security against any loss that may result from nonpayment, in form satisfactory to the Authority.
No Liability; Indemnification . (a) The Authority and its directors, officers, agents and employees, shall not be liable to the City or to any other party whomsoever for any death, injury or damage that may result to any person or property by or from any cause whatsoever in, on or about the Property. To the extent permitted by law, the City shall, at its expense, indemnify and hold the Authority and the Trustee and all directors, members, officers and employees thereof harmless against and from any and all claims by or on behalf of Person arising from the acquisition, construction, occupation, use, operation, maintenance, possession, conduct or management of or from any work done in or about the Property or from the subletting of any part thereof, including any liability for violation of conditions, agreements, restrictions, laws, ordinances, or regulations affecting the Property or the occupancy or use thereof, but excepting the negligence or willful misconduct of the persons or entity seeking indemnity. The City also covenants and agrees, at its expense, to pay and indemnify and save the Authority and the Trustee and all directors, officers and employees thereof harmless against and from any and all claims arising from (i) any condition of the Property and the adjoining sidewalks and passageways, (ii) any breach or default on the part of the City in the performance of any covenant or agreement to be performed by the City pursuant to this Lease Agreement, (iii) any act or negligence of licensees in connection with their use, occupancy or operation of the Property, or (iv) any accident, injury or damage whatsoever caused to any person, firm or corporation in or about the Property or upon or under the sidewalks and from and against all costs, reasonable counsel fees, expenses and liabilities incurred in any action or proceeding brought by reason of any claim referred to in this Section, but excepting the negligence or willful misconduct of the person or entity seeking indemnity. In the event that any action or proceeding is brought against the Authority or the Trustee or any director, member, officer or employee thereof, by reason of a ny such claim, the City, upon notice from the Authority or the Trustee or such director, member, officer or employee thereof, covenants to resist or defend such action or proceeding by counsel reasonably satisfactory to the Authority or the Trustee or such director, member, officer or employee thereof.
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(b) In no event shall the Authority be liable for any incidental, indirect, special, or consequential damage in connection with or arising out of this Lease Agreement or the City’s use of the Property.
Further Assurances. The City shall make, execute and deliver any and all such further agreements, instruments and assurances as may be reasonably necessary or proper to carry out the intention or to facilitate the performance of this Lease Agreement and for the better assuring and confirming unto the Authority of the rights and benefits provided in this Lease Agreement.
ARTICLE VII
LEASE DEFAULT EVENTS AND REMEDIES
Lease Default Event s and Remedies . (a) If (i) the City shall fail to pay any Rental Payment payable hereunder when the same becomes due and payable, time being expressly declared to be of the essence in this Lease Agreement, (ii) the City shall fail to keep, observe or perform any other term, covenant or condition contained herein to be kept or performed by the City, if such failure shall have continued for a period of 30 days after written notice thereof, specifying such failure and requiring the same to be remedied, shall have been given to the City by the Authority, the Trustee or the Owners of not less than a majority of the aggregate principal amount of the Bonds at the time Outstanding; provided, however, that if the failure stated in the notice can be corrected, but not within such 30 day period, such failure shall not constitute a Lease Default Event if corrective action is instituted by the City within such 30 day period, and the City shall thereafter diligently and in good faith cure such failure in a reasonable period of time, provided, further, that, unless consented to by the Trustee, such period of time shall not exceed 180 days, (iii) the City shall fail to observe and perform any of the covenants, agreements or conditions on its part in the Indenture contained, if such failure shall have continued for a period of 30 days after written notice thereof, specifying such failure and requiring the same to be remedied, shall have been given to the City by the Authority, the Trustee or the Owners of not less than a majority of the aggregate principal amount of the Bonds at the time Outstanding; provided, however, that if the failure stated in the notice can be corrected, but not within such 30 day period, such failure shall not constitute a Lease Default Event if corrective action is instituted by the City within such 30 day period, and the City shall thereafter diligently and in good faith cure such failure in a reasonable period of time, provided, further, that, unless consented to by the Trustee, such period of time shall not exceed 180 days, (iv) except as otherwise provided in Article VIII hereof, the City’s interest in this Lease Agreement or any part thereof shall be assigned or transferred, either voluntarily or by operation of law or otherwise, (v) the City shall abandon or vacate the Property, or (vi) the City shall commence a voluntary case under Title 11 of the United States Code or any substitute or successor statute, such failure or event shall constitute a Lease Default Event.
(b) Upon the occurrence of any Lease Default Event, the Authority, in addition to all other rights and remedies it may have at law, shall have the option to do any of the following:
(i) terminate this Lease Agreement in the manner hereinafter provided on account of such Lease Default Event, notwithstanding any re -entry or re -letting of the
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Property as hereinafter provided for in subparagraph (ii) hereof, and to re-enter the Property and remove all persons in possession thereof and all personal property whatsoever situated upon the Property and place such personal property in storage in any w arehouse or other suitable place, for the account of and at the expense of the City. In the event of such termination, the City agrees to surrender immediately possession of the Property, without let or hindrance, and to pay the Authority all damages recoverable at law that the Authority may incur by reason of such Lease Default Event, including any costs, loss or damage whatsoever arising out of, in connection with, or incident to any such re -entry upon the Property and removal and storage of such property by the Authority or its duly authorized agents in accordance with the provisions herein contained. Neither notice to pay Rental Payments or to deliver up possession of the Property given pursuant to law nor any entry or re-entry by the Authority nor any proceeding in unlawful detainer, or otherwise, brought by the Authority for the purpose of effecting such re -entry or obtaining possession of the Property nor the appointment of a receiver upon initiative of the Authority to protect the Authority’s interest under this Lease Agreement shall of itself operate to terminate this Lease Agreement, and no termination of this Lease Agreement on account of such Lease Default Event shall be or become effective by operation of law or acts of the parties hereto, or otherwise, unless and until the Authority shall have given written notice to the City of the election on the part of the Authority to terminate this Lease Agreement. No surrender of the Property or of the remainder of the term hereof or any termination of this Lease Agreement shall be valid in any manner or for any purpose whatsoever unless the Authority so provided in such written notice; or
(ii) without terminating this Lease Agreement (A) collect each installment of Rental Payments as the same become due and enforce any other terms or provisions hereof to be kept or performed by the City, regardless of whether or not the City has abandoned the Property, or (B) exercise any and all rights of entry and re -entry upon the Property. In the event the Authority does not elect to terminate this Lease Agreement in the manner provided for in subparagraph (i) hereof, the City (I) shall remain liable and shal l keep or perform all covenants and conditions herein contained to be kept or performed by the City, (II) if the Property is not re-let, shall pay the full amount of the Rental Payments to the end of the term of this Lease Agreement, (III) if the Property is re-let, shall pay any deficiency in Rental Payments that results therefrom, and (IV) shall pay said Rental Payments and/or Rental Payment deficiency punctually at the same time and in the same manner as hereinabove provided for the payment of Rental Payments hereunder, notwithstanding the fact that the Authority may have received in previous years or may receive thereafter in subsequent years Rental Payments in excess of the Rental Payments herein specified, and notwithstanding any entry or re -entry by t he Authority or suit in unlawful detainer, or otherwise, brought by the Authority for the purpose of effecting such re-entry or obtaining possession of the Property. Should the Authority elect to re -enter as herein provided, the City hereby irrevocably appoints the Authority as the agent and attorney-in-fact of the City to re-let the Property, or any part thereof, from time to time, either in the Authority’s name or otherwise, upon such terms and conditions and for such use and period as the Authority may d eem advisable and to remove all persons in possession thereof and all personal property whatsoever situated upon the Property and to place such personal property in storage in any warehouse or other suitable place, for the account of and at the expense of the City, and the City hereby indemnifies and agrees to save harmless the Authority from
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any costs, loss or damage whatsoever arising out of, in connection with, or incident to any such re-entry upon and re-letting of the Property and removal and storage of such property by the Authority or its duly authorized agents in accordance with the provisions herein contained. The City agrees that the terms of this Lease Agreement constitute full and sufficient notice of the right of the Authority to re-let the Property in the event of such re- entry without effecting a surrender of this Lease Agreement, and further agrees that no acts of the Authority in effecting such re -letting shall constitute a surrender or termination of this Lease Agreement irrespective of the use or the term for which such re- letting is made or the terms and conditions of such re-letting, or otherwise, but that, on the contrary, in the event of such Lease Default Event the right to terminate this Lease Agreement shall vest in the Authority to be effected in the sole and exclusive manner provided for in subparagraph (i) hereof. The City shall pay the Authority the cost of any alterations or additions to the Property necessary to place the Property in condition for re -letting immediately upon notice to the City of the completion and installation of such additions or alterations.
The City hereby waives any and all claims for damages caused or that may be caused by the Authority in re-entering and taking possession of the Property as herein provided and all claims for damages that may result from the destruction of or injury to the Property and all claims for damages to or loss of any property belonging to the City, or any other person, that may be in or upon the Property.
(c) In addition to the other remedies set forth in this Section, upon the occurrence of a Lease Default Event, the Authority shall be entitled to proceed to protect and enforce the rights vested in the Authority by this Lease Agreement or by law. The provisions of this Lease Agreement and the duties of the City and of its board, officers or employees shall be enforceable by the Authority by mandamus or other appropriate suit, action or proceeding in any court of competent jurisdiction. Without limiting the generality of the foregoing, the Authority shall have the right to bring the following actions:
(i) Accounting. By action or suit in equity to require the City and its board, officers and employees and its assigns to account as the trustee of an express trust. (ii) Injunction. By action or suit in equity to enjoin any acts or things that may be unlawful or in violation of the rights of the Authority. (iii) Mandamus. By mandamus or other suit, action or proceeding at law or in equity to enforce the Authority’s rights against the City (and its board, officers, and employees) and to compel the City to perform and carry out its duties and obligations under the law and its covenants and agreements with the City as provided herein. (d) Each and all of the remedies given to the Authority hereunder or by any law now or hereafter enacted are cumulative and the single or partial exercise of any right, power or privilege hereunder shall not impair the right of the Authority to the further exercise thereof or the exercise of any or all other rights, powers or privileges. The term “re- let” or “re-letting” as used in this Section shall include re-letting by means of the operation by the Authority of the Property.
If any statute or rule of law va lidly shall limit the remedies given to the Authority hereunder, the
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Authority nevertheless shall be entitled to whatever remedies are allowable under any statute or rule of law.
(e) In the event the Authority shall prevail in any action brought to enforce any of the terms and provisions of this Lease Agreement, the City shall p ay a reasonable amount as and for attorney’s fees incurred by the Authority in attempting to enforce any of the remedies available to the Authority hereunder.
(f) Notwithstanding anything to the contrary contained in this Lease Agreement, the Authority shall have no right upon a default by the City hereunder, a Lease Default Event or otherwise to accelerate Rental Payments.
(g) Notwithstanding anything herein to the contrary, the termination of this Lease Agreement by the Authority on account of a Lease Default Event shall not effect or result in a termination of the lease of the Property by the City to the Authority pursuant to the Ground Lease.
Waiver. Failure of the Authority to take advantage of any default on the part of the City shall not be, or be construed as, a waiver thereof, nor shall any custom or practice that may grow up between the parties in the course of administering this instrument be construed to waive or to lessen the right of the Authority to insist upon performance by the City of any term, covenant or condition hereof, or to exercise any rights given the Authority on account of such default. A waiver of a particular default shall not be deemed to be a waiver of any other default or of the same default subsequently occurring. The acceptance of Rental Payments hereunder shall not be, or be construed to be, a waiver of any term, covenant or condition of this Lease Agreement.
ARTICLE VIII
AMENDMENTS; ASSIGNMENT AND SUBLEASING;
SUBSTITUTION OR RELEASE
Amendments. (a) This Lease Agreement and the Ground Lease, and the rights and obligations of the Authority and the City hereunder and thereunder, may be amended at any time by an amendment hereto or thereto, which shall become binding upon execution by the City and the Authority, but only with the prior written consent of the Owners of a majority of the aggregate principal amount the Bonds then Outstanding, provided that no such amendment shall (i) extend the payment date of any Base Rental Payment or reduce any Base Rental Payment, without the prior written consent of the Owner of each Bond so affected, or (ii) reduce the percentage of the aggregate principal amount the Bonds, the consent of the Owners of which is required for the execution of any amendment of this Lease Agreement or the Ground Lease, without the prior written consent of the Owners of all the Bonds then Outstanding. (b) This Lease Agreement and the Ground Lease, and the rights and obligations of the City and the Authority hereunder and thereunder, may also be amended at any time by an amendment hereto or thereto, which shall become binding upon execution by the City and t he Authority, without the written consents of any Owners, but only to the extent permitted by law and only for any one or more of the following purposes:
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(i) to add to the agreements, conditions, covenants, and terms required by the Authority or the City to be observed or performed herein or therein other agreements, conditions, covenants, and terms thereafter to be observed or performed by the Authority or the City, or to surrender any right or power reserved herein or therein to or conferred herein or therein on the Authority or the City;
(ii) to make such provisions for the purpose of curing any ambiguity or of correcting, curing, or supplementing any defective provision contained herein or therein or in regard to questions arising hereunder or thereunder that the Authority or the City may deem desirable or necessary and not inconsistent herewith or therewith, and that shall not materially adversely affect the rights or interests of the Owners; (iii) to make such additions, deletions or modifications as may be necessary or appropriate to assure the exclusion from gross income for federal income tax purposes of interest on Tax -Exempt Bonds or maintain any federal interest subsidies expected to be received with respect to any Bonds;
(iv) to provide for the issuance of one or more Series of Additional Bonds, and to provide the terms and conditions under which such Series of Additional Bonds may be issued, subject to and in accordance with the provisions of Section 2.10 and Section 2.11 of the Indenture;
(v) to provide for the substitution or release of a portion of the Property in accordance with the provisions of Section 8.03 hereof; or (vi) to make such other changes herein or therein or modifications hereto or thereto as the Authority or the City may deem desirable or necessary, and that shall not materially adversely affect the interests of the Owners.
Assignment and Subleasing . Neither this Lease Agreement nor any interest of the City hereunder shall be sold, mortgaged, pledged, assigned or transferred by the City by voluntary act or by operation of law or otherwise; provided, however, that the Property may be subleased in whole or in part by the City, provided that any such sublease shall be subject to all of the following conditions:
(a) this Lease Agreement and the obligation of the City to make all Rental Payments hereunder shall remain the primary obligation of the City; (b) the City shall, within 30 days after the delivery thereof, furnish or cause to be furnished to the Authority and the Trustee a true and complete copy of such sublease; (c) any sublease of the Property by the City shall explicitly provide that such sublease is subject to all rights of the Authority under this Lease Agreement; and (d) the City shall furnish the Authority and the Trustee with an Opinion of Bond Counsel to the effect that such sublease will not, in and of itself, cause the interest on Tax- Exempt Bonds to be included in gross income for federal income tax purposes.
24 4155-6902-5128.4
Substitution or Release of the Property. The City shall have the right to substitute alternate real property for any portion of the Property or to release a portion of the Property from this Lease Agreement. All costs and expenses incurred in connection with such substitution or release shall be borne by the City. Notwithstanding any substitution or release pursuant to this Section, there shall be no reduction in or abatement of the Base Rental Payments due from the City hereunder as a result of such substitution or release. Any such substitution or release of any portion of the Property shall be subject to the following specific conditions, which are hereby made conditions precedent to such substitution or release:
(a) the City shall have provided the Trustee with a Written Certificate of the City certifying that the Property, as constituted after such substitution or release (i) has an annual fair rental value greater than or equal to 105% of the maximum amount of the principal of and interest on the Bonds coming due in the then current Rental Period or any subsequent Rental Period, including principal due and payable by reason of mandatory sinking fund redemption of such Bonds), (ii) has a fair replacement value at least equal to the aggregate principal amount of the Bonds then Outstanding, and (iii) has a useful life equal to or greater than the useful life of the Property, as constituted prior to such substitution or release;
(b) the City shall have obtained or caused to be obtained an CLTA or ALTA title insurance policy or policies with respect to any substituted property in the amount of the fair market value of such substituted property (which fair market value shall have been determined by the City), of the type and with the endorsements described in Section 5.02 hereof;
(c) the City shall have certified to the Trustee that the substituted real property is of approximately the same degree of essentiality to the City as the portion of the Property for which it is being substituted;
(d) the City shall have provided the Trustee with an Opinion of Bond Counsel to the effect that such substitution or release will not, in and of itself, cause the interest on Tax-Exempt Bonds to be included in gross income for federal income tax purposes; and (e) the City, the Authority and the Trustee shall have executed, and the City shall have caused to be recorded with the Los Angeles County Recorder, any document necessary to reconvey to the City the portion of the Property being substituted or released and to include any substituted real property in the description of the Property contained herein and in the Ground Lease.
ARTICLE IX
MISCELLANEOUS
Assignment to Trustee . The City understands and agrees that, upon the execution and delivery of the Indenture (which is occurring simultaneously with the execution and delivery hereof), certain right, title and interest of the Authority in and to this Lease Agreement will be sold, assigned and transferred to the Trustee for the benefit of the Owners of the Bonds ,
25 4155-6902-5128.4
constituting substantially all of its right, title and interest in and to this Lease Agreement, including its right to receive the Base Rental Payments and to enforce remedies hereunder. The City hereby consents to such sale, assignment and transfer. Upon the execution and delivery of the Indenture, references in the operative provisions hereof to the Authority shall be deemed to be references to the Trustee, as assignee of the Authority.
Validity and Severability. If for any reason this Lease Agreement shall be held by a court of competent jurisdiction to be void, voidable or unenforceable by the Authority or by the City, or if for any reason it is held by such a court that any of the covenants and conditions of the City hereunder, including the covenant to pay Rental Payments, is unenforceable for the full term hereof, then and in such event this Lease Agreement is and shall be deemed to be a lease agreement under which the Rental Payments are to be paid by the C ity annually in consideration of the right of the City to possess, occupy and use the Property, and all of the terms, provisions and conditions of this Lease Agreement, except to the extent that such terms, provisions and conditions are contrary to or inconsistent with such holding, shall remain in full force and effect.
Notices. All written notices, statements, demands, consents, approvals, authorizations, offers, designations, requests or other communications hereunder shall be given to the party entitled thereto at its address set forth below, or at such other address as such party may provide to the other parties in writing from time to time, namely:
If to the City: City of Culver City
9770 Culver Boulevard
Culver City, California 90232
Attention: [City Manager]
If to the Authority: Culver City Public Finance Authority 9770 Culver Boulevard
Culver City, California 90232
Attention: [Treasurer]
If to the Trustee: U.S. Bank Trust Company, National
Association
633 West Fifth Street, 24th Floor
Los Angeles, CA 90071
Attention: Global Corporate Trust
Re: Culver City LRB Series 2026
Each such notice, statement, demand, consent, approval, authorization, offer, designation, request or other communication hereunder shall be deemed delivered to the party to whom it is addressed (a) if given by courier or delivery service or if personally served or delivered, upon delivery, (b) if given by electronic mail, on the date sent, but only if confirmation of the receipt of such electronic mail is received or if notice is concurrently sent by another means specified herein, (c) if given by register ed or certified mail, return receipt requested, deposited with the United States mail postage prepaid, 72 hours after such notice is deposited with the United States mail, or (d) if given by any other means, upon delivery at the address specified in this Section.
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Section Headings. All section headings contained herein are for convenience of reference only and are not intended to define or limit the scope of any provision of this Lease Agreement.
Governing Laws . This Lease Agreement shall be governed by and construed in accordance with the laws of the State and exclusive jurisdiction in federal and state courts in California and New York.
Electronic Signature. Each of the parties hereto agrees that the transaction consisting of this Lease Agreement may be conducted by electronic means. Each party agrees, and acknowledges that it is such party’s intent, that if such party signs this Lease Agreement using an electronic signature, it is signing, adopting, and accepting this Lease Agreement and that signing this Lease Agreement using an electronic signature is the legal equivalent of having placed its handwritten signature on this Lease Agreement on paper. Each party acknowledges that it is being provided with an electronic or paper copy of this Lease Agreement in a usable format.
Execution in Counterparts . This Lease Agreement may be executed in any number of counterparts and each of such counterparts shall for all purposes be deemed to be an original, and all such counterparts shall together constitute but one and the same instrument.
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IN WITNESS WHEREOF, the parties hereto have caused this Lease Agreement to be executed by their respective officers thereunto duly authorized, all as of the day and year first written above.
CITY OF CULVER CITY
By:
[City Manager]
APPROVED AS TO FORM:
HEATHER S. BAKER, CITY ATTORNEY
Deputy City Attorney
CULVER CITY PUBLIC FINANCE
AUTHORITY
By:
[Treasurer]
APPROVED AS TO FORM:
HEATHER S. BAKER, CITY ATTORNEY,
as General Counsel of the Authority
Deputy City Attorney
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4155-6902-5128.4
EXHIBIT A
DESCRIPTION OF THE PROPERTY
All of that real property situated in the City of Culver City , County of Los Angeles, State of California, described as follows, and any improvements thereto:
B-1
4155-6902-5128.4
EXHIBIT B
DESCRIPTION OF THE PROJECT
The Series 2026 Project consists of the following and related administrative costs:
(i) finance and refinance (a) the design, engineering, construction, improvement, and installation of recreational park and community facility improvements, (b) the design, reconstruction, improvement and resurfacing of City bridges, streets, public alleys, and parking lots, and related landscaping and hardscaping, (c) the design, engineering, construction, and improvement of sidewalks, storm drains, and other right -of-way, and equipment improvements , (d) the construction of related capital facilities, and (e) related administrative costs; (ii) finance and refinance City and/or Housing Authority commitments to affordable housing including, without limitation, Jubilo Village at 4464 Sepulveda Boulevard, Ballona Creek Affordable Housing at 910 South Olive Street, and Washington Palm at 11029 Washington Boulevard;
(iii) finance interim financial support for the benefit of Culver City Unified School District;
(iv) finance capitalized interest with respect to the Series 2026 Bonds; and (v) pay the costs of issuance of the Series 2026 Bonds
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EXHIBIT C
BASE RENTAL PAYMENTS SCHEDULE
Rental
Payment Date∗
Principal
Component of
Rental Payment
Interest
Component of
Rental Payment†
Total Rental
Payment
02/01/2027
08/01/2027
02/01/2028
08/01/2028
02/01/2029
08/01/2029
02/01/2030
08/01/2030
02/01/2031
08/01/2031
02/01/2032
08/01/2032
02/01/2033
08/01/2033
02/01/2034
08/01/2034
02/01/2035
08/01/2035
02/01/2036
08/01/2036
02/01/2037
08/01/2037
02/01/2038
08/01/2038
02/01/2039
08/01/2039
02/01/2040
08/01/2040
02/01/2041
08/01/2041
02/01/2042
08/01/2042
02/01/2043
∗ Under Section 3.02, Base Rental Payments shall be due and payable no later than the fifth Business Day next preceding each Interest Payment Date on which such Base Rental Payment is due in an amount equal to the principal, if any, of and interest on the Series 2026 Bonds due and payable on such Interest Payment Date, including principal due and payable by reason of mandatory sinking fund redemption of the Series 2026 Bonds.
† Interest is capitalized and paid from the Capitalized Interest Account from _____ 2026 through August 1, 2027.
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Rental
Payment Date∗
08/01/2043
02/01/2044
08/01/2044
02/01/2045
08/01/2045
02/01/2046
08/01/2046
02/01/2047
08/01/2047
02/01/2048
08/01/2048
02/01/2049
08/01/2049
02/01/2050
08/01/2050
02/01/2051
08/01/2051
02/01/2052
08/01/2052
02/01/2053
08/01/2053
02/01/2054
08/01/2054
02/01/2055
08/01/2055
02/01/2056
∗ Under Section 3.02, Base Rental Payments shall be due and payable no later than the fifth Business Day next preceding each Interest Payment Date on which such Base Rental Payment is due in an amount equal to the principal, if any, of and interest on the Series 2026 Bonds due and payable on such Interest Payment Date, including principal due and payable by reason of mandatory sinking fund redemption of the Series 2026 Bonds.