California Infrastructure and Economic Development Bank

This Preliminary Official Statement and the information contained herein are subject to change, completion or amendment. Under no circumstances shall this Preliminary Official Statement constitute an offer to sell or the solicitation of an offer to buy, nor shall there be any sale of, these securities in any jurisdiction in which such offer, solicitation or sale would be unlawful prior to registration, qualification or filing under the securities laws of any such jurisdiction. * Preliminary, subjecttochange. Dated: ______,2016 York onoraboutNovember3,2016. MyersLLP.Itisexpectedthatthe2016A BondswillbeavailablefordeliverythroughthefacilitiesofDTCinNewYork, New and fortheUnderwriterbyitscounselO’Melveny & legal matterswillbepasseduponforthe InfrastructureBankbyitsGeneralCounsel,fortheCorporationCounsel andbyitsspecialcounsel,NixonPeabodyLLP, Counsel totheInfrastructureBank,andsubject tootherconditions.Certaintaxandlegalmatterswillbepassedupon byBondCounseltotheInfrastructureBank.Certain or modificationoftheofferwithoutnotice, andsubjecttotheapprovalofvalidity2016ABondscertainother legalmattersbyHawkinsDelafield&WoodLLP,Bond to obtaininformationessentialthemakingofaninformedinvestmentdecision. See “SECURITYFORTHE2016ABONDS.” secured by any credit facility or liquidity facility while in the Index Mode. The Corporation has other indebtedness outstanding and may in the future incur additional indebtedness. unsecured generalobligationoftheCorporation(excepttoextentthatamounts aretransferredtotheCollateralAccount,asdescribedherein).The2016ABondswillnotbe the 2016ABonds.SeeAPPENDIX F –“BOOK-ENTRYONLYSYSTEM.” New York(“DTC”),thesecuritiesdepositoryfor2016ABonds.PurchasersofBondswillnotreceivephysicalcertificatesrepresentingtheirownership interestsin are definedelsewhereinthisOfficialStatement. if the 2016A Bonds are converted to a Mode other than theIndex Mode or during a subsequent Index Mode Rate Period. Capitalized terms usedon this page without definition 2016A BondswhileinaModeotherthantheIndexorduringsubsequentRatePeriod.InvestorsshouldnotrelyuponinformationthisOfficial Statement mandatory redemptionduringtheAmortizableSoftPutBondDelayedRemarketingPeriod(asdefinedherein).See“THE2016ABONDS–Period.” to theAmortizableSoftPutDelayedRemarketingPeriodRate(i.e.,MaximumBondInterestRate),andsuch2016ABondswillbesubjecttenderforpurchasespecial on Scheduled Mandatory PurchaseDate.” If the 2016A Bonds are not remarketed on the Scheduled Mandatory Tender Date, the interest rate onthe2016ABondswillchange available willnotconstituteanEventofDefaultundertheIndenture.See“CERTAININVESTMENTCONSIDERATIONS–NoCorporationObligationtoPurchase 2016ABonds funds, andthefailuretopurchase2016ABondsonScheduledMandatoryTenderDateoranyUnscheduledifremarketingproceeds arenot however, theCorporationhasnoobligationtopurchase2016ABondsonScheduledMandatoryTenderDateoranyUnscheduled withitsown applicable ScheduledMandatoryTenderDate,inconnectionwithanyremarketingduringtheIndexModeRatePeriod.DuringInitial RatePeriod, interest inanIndexModeconnectionwithanyapplicableScheduledMandatoryTenderDate,andtheeventthatSeriesofBondsisnotsuccessfullyremarketed onthe Bonds arenotsubjecttooptionaltenderforpurchasebytheHoldersthereof. Redemption,” “–MandatoryTenderforPurchase”andDelayedRemarketingPeriod.”DuringtheInitialIndexModeRatePeriod,2016A herein. See“THE2016ABONDS – Business DatefromandafterFebruary1,2020*(the“IndexModeCallDate”),asdescribedherein.The2016ABondsarealsosubjecttoredemptionpriormaturity, asdescribed of $100,000oranyintegralmultiple$5,000inexcessthereof.See“THE2016ABONDS–InterestRatesandPaymentDates.” 2016A BondswillgenerallybepayableonthefirstBusinessDayofeverycalendarmonth,commencingDecember1,2016.Thedeliveredin denominations Index RateandtheModeSpreadfor2016ABondsinInitialPeriodaresetforthafterinsidecoverpage.WhileMode,interest onthe the LIBORIndexplusanindexmodespread(the“IndexModeSpread”);providedthatinterestrateon2016ABondswillnotexceedMaximumBondInterest Rate.The described herein).DuringtheInitialIndexModeRatePeriod,2016ABondswillaccrueinterestatInterestRate,whichisaperannumrateequal to70%*of Mandatory TenderDate(ifthe2016ABondsarenotsuccessfullyremarketedonScheduledDate,InitialIndexModeRatePeriodwillbe extendedas SOURCES ANDUSESOFFUNDS”and“PLANFINANCE”herein. available fundsoftheCorporation,topurchasePurchasedBonds(asdefinedherein)andpaycostsissuancewithrespect2016ABonds.See “ESTIMATED primarily ofamountsreceivedfromtheCorporationpursuanttoLoanAgreement.Theplansuseproceeds2016ABonds,togetherwith otherlegally supplemented, the“LoanAgreement”),eachbyandbetweenInfrastructureBankCorporation.The2016ABondswillbepaidsolelyfromRevenues,whichconsist (the “Corporation”)pursuanttoaFirstSupplementalLoanAgreement,datedasofNovember1,2016,whichsupplementsAugust2013(asso Dated: DateofDelivery taxes. See“TAXMATTERS”herein. opinion ofBondCounseltotheInfrastructureBank,underexistingstatutes,intereston2016ABondsisexemptfromStateCaliforniapersonalincome adjusted currentearningsofcertaincorporationsforpurposescalculatingthealternativeminimumtaximposedonsuchcorporations.Inaddition,in preference itemincalculatingthealternativeminimumtaximposedonindividualsandcorporationsunderCode;suchinterest,however,isincluded purposes pursuanttoSection103oftheInternalRevenueCode1986,asamended(the“Code”),and(ii)intereston2016ABondsisnottreateda continuing compliance with certain tax covenants d under thelawsofStateCalifornia,doingbusinessas trustee (the “Trustee”). The Infrastructure Bank will loan the proceeds of the 2016A Bonds to Museum Associates, a nonprofit public benefit corporation organized and existing supplements anIndenture,datedasofAugust1,2013(assosupplemented,the“Indenture”),eachbyandbetweenInfrastructureBankU.S.NationalAssociation, Project), Series2016A(the“2016ABonds”)pursuanttothetermsofAct(asdefinedherein)andaFirstSupplementalIndenture,datedasNovember1,2016,which IN ANY MANNER BE OBLIGATED TO MAKE ANY APPROPRIATION FOR SUCH PAYMENTS. THE INFRASTRUCTURE BANK HAS NO TAXING POWERS. OTHER FUNDS PROVIDED THEREFOR PURSUANT TO THE INDENTURE. NEITHER THE STATE OF CALIFORNIA NOR ANY POLITICAL SUBDIVISION THEREOF WILL ANY POLITICAL SUBDIVISION THEREOF OTHER THAN THE LIMITED OBLIGATION OF THE INFRASTRUCTURE BANK, PAYABLE SOLELY FROM REVENUES AND THE OF, PREMIUM, IF ANY, OR INTEREST ON, THE 2016A BONDS. THE 2016A BONDS WILL NOT CONSTITUTE A DEBT OR LIABILITY OF THE STATE OF CALIFORNIA OR INDENTURE. NEITHER THE FULL FAITH AND CREDIT NOR THE TAXING POWER OF THE STATE OF CALIFORNIA IS PLEDGED TO THE PAYMENT OF THE PRINCIPAL THEREON, EXCEPT FROM REVENUES RECEIVED BY THE INFRASTRUCTURE BANK AND THE OTHER FUNDS PROVIDED THEREFOR PURSUANT TO THE OF CALIFORNIA NOR THE INFRASTRUCTURE BANK SHALL BE OBLIGATED TO PAY THE PRINCIPAL OF THE 2016A BONDS, PREMIUM, IF ANY, OR THE INTEREST THE INFRASTRUCTURE BANK, EXCEPT TO THE EXTENT OF THE PLEDGE AND THE ASSIGNMENT PROVIDED FOR IN THE INDENTURE. NEITHER THE STATE The 2016ABondsareofferedbytheUnderwriter, when,asandifissuedbytheInfrastructureBankacceptedUnderwriter, subjecttothepriorsaleorwithdrawal This coverpagecontainscertaininformationforquickreferenceonly.Itisnotintended tobeasummaryofthisissue.InvestorsmustreadtheentireOfficialStatement The Corporation’sobligationundertheLoanAgreementtomakePayments, which willbeusedtopaytheprincipalofandintereston2016ABonds,constitutesan The InfrastructureBankwillissuethe2016ABondsinbook-entryformonly,registerednameofCede & Co.,asnomineeofTheDepositoryTrustCompany,NewYork, This OfficialStatementdescribesthe2016ABondsonlywhiletheyareinInitialIndexModeRatePeriod.Theresignificantdifferenceswithrespecttoterms ofthe Pursuant totheLoanAgreement,CorporationisobligatedtakeallcommerciallyreasonableactionssupportremarketingofBondsanySeries bearing The 2016ABondsaresubjecttomandatorytenderforpurchaseonJuly31,2020*(the“ScheduledMandatoryTenderDate”)and,attheelectionofCorporation, onany The 2016ABondswillbeissuedinanIndexModewithInitialRatePeriodscheduledtoendonJuly30,2020*,whichisthedaypriorScheduled In theopinionofHawkinsDelafield&WoodLLP,BondCounseltoInfrastructureBank,underexistingstatutesandcourtdecisionsassuming The CaliforniaInfrastructureandEconomicDevelopmentBank(the“InfrastructureBank”)willissueitsRefundingRevenueBonds(LosAngelesCountyMuseumofArt THE 2016A BONDS ARE LIMITED OBLIGATIONS OF THE INFRASTRUCTURE BANK AND ARE NOT A LIEN OR CHARGE UPON THE FUNDS OR PROPERTY OF CALIFORNIA INFRASTRUCTURE AND ECONOMIC DEVELOPMENT BANK

(LOS ANGELESCOUNTYMUSEUMOFARTPROJECT),SERIES2016A PRELIMINARY OFFICIAL STATEMENT DATED OCTOBER 21, 2016

as Underwriterand RemarketingAgent REFUNDING REVENUEBONDS Wells FargoSecurities for the2016ABonds (INDEX MODE) $78,000,000* Scheduled MandatoryTenderDate:July31,2020* Moody’s: A3 RATING: David Hockney, Mullholland Drive: The Road to the Studio, 1980, Los Angeles County Museum of Art, purchased with funds provided by the F. Patrick Burns Bequest, © David Hockney. All Rights Reserved

Maruyama Okyo, Cranes, 1772, An’ei period (1772-1780), Los Angeles County Museum of Art, Gift of Camilla Chandler Frost in honor of Robert T. Singer

All photos © Museum Associates/LACMA $78,000,000* CALIFORNIA INFRASTRUCTURE AND ECONOMIC DEVELOPMENT BANK REFUNDING REVENUE BONDS (LOS ANGELES COUNTY MUSEUM OF ART PROJECT), SERIES 2016A (INDEX MODE)

Par Amount: $78,000,000*

Price: ______

Index Rate(1) LIBOR Index

Index Mode Applicable Percentage 70%*

Index Mode Spread ___ basis points (___%)

Scheduled Mandatory Tender Date July 31, 2020*

Index Mode Call Date February 1, 2020*

Maximum Bond Interest Rate Lesser of 12% and maximum lawful rate

CUSIP(2) ______

* Preliminary, subject to change. 1 The Index Mode Interest Rate is the Index Rate multiplied by the Index Mode Applicable Percentage plus the Index Mode Spread. 2 CUSIP is a registered trademark of the American Bankers Association. CUSIP data herein is provided by CUSIP Global Services, managed by Standard and Poor’s Financial Services LLC on behalf of the American Bankers Association. CUSIP numbers are provided for convenience of reference only. None of the Infrastructure Bank, the Corporation or the Underwriter takes any responsibility for the accuracy of such numbers. [THIS PAGE INTENTIONALLY LEFT BLANK]

No dealer, broker, salesperson, or any other person has been authorized to give any information or to make any representations other than those contained in this Official Statement in connection with the offering made hereby, and, if given or made, such information or representations must not be relied upon as having been authorized by the Infrastructure Bank, the Corporation or the Underwriter. This Official Statement does not constitute an offer to sell or the solicitation of an offer to buy, nor shall there be any sale of the 2016A Bonds, in any jurisdiction in which such offer, solicitation or sale is not authorized, or in which the person making such offer, solicitation, or sale is not qualified to do so, or to any person to whom it is unlawful to make such offer, solicitation or sale. This Official Statement is not to be construed as a contract with the purchasers of the 2016A Bonds. Statements in this Official Statement which involve estimates, forecasts, or matters of opinion whether or not expressly so described herein, are intended solely as such and are not to be construed as representations of fact.

In connection with the offering of the 2016A Bonds, the Underwriter may overallot or effect transactions which stabilize or maintain the market price of the 2016A Bonds at levels above those which might otherwise prevail in the open market. Such stabilizing, if commenced, may be discontinued at any time.

No representation is made that past experience, as it might be shown by financial and other information, will necessarily continue or be repeated in the future. Certain statements included or incorporated by reference in this Official Statement constitute “forward-looking statements.” Such statements are generally identifiable by the terminology used such as “plan,” “expect,” “estimate,” “budget,” “intend,” “projection” or other similar words. Such forward-looking statements involve certain risks. See “FORWARD-LOOKING STATEMENTS.”

The 2016A Bonds have not been registered with the Securities and Exchange Commission (the “SEC”) under the Securities Act of 1933, as amended, in reliance upon an exemption contained in such act. The Indenture has not been qualified under the Trust Indenture Act of 1939, as amended, in reliance upon an exemption contained in such act.

The 2016A Bonds have not been approved or disapproved by the SEC or by the securities commission or any regulatory authority of any state, nor has the SEC or any state securities commission or regulatory authority passed upon or endorsed the merits of this offering or the accuracy or the adequacy of this Official Statement. Any representation to the contrary is a criminal offense.

The information set forth herein under the captions “THE INFRASTRUCTURE BANK” and “ABSENCE OF MATERIAL LITIGATION – The Infrastructure Bank” has been furnished by the Infrastructure Bank. Such information is believed to be reliable but is not guaranteed as to accuracy or completeness and is not to be construed as a representation by the Corporation. The authorization of the Infrastructure Bank of the distribution of this Official Statement shall not be construed as a representation that the Infrastructure Bank has reviewed or approved the accuracy or completeness of this Official Statement other than the information under the captions “THE INFRASTRUCTURE BANK” and “ABSENCE OF MATERIAL LITIGATION – The Infrastructure Bank.” The information concerning DTC and DTC’s book- entry system set forth in APPENDIX F – “BOOK-ENTRY ONLY SYSTEM” has been furnished by DTC. Such information is believed to be reliable but is not guaranteed as to accuracy or completeness and is not to be construed as a representation by the Infrastructure Bank or the Corporation. All other information set forth herein has been obtained from the Corporation and other sources that are believed to be reliable, but such information is not guaranteed as to accuracy or completeness and is not to be construed as a representation by the Infrastructure Bank. The information and expressions of opinion herein are subject to change without notice, and neither the delivery of this Official Statement nor any sale of the 2016A Bonds made hereunder shall create under any circumstances any indication that there has been no change in the affairs of the Infrastructure Bank, the Corporation, DTC or any other person or entity since the date hereof.

The Underwriter has provided the following sentence for inclusion in this Official Statement. The Underwriter has reviewed the information in this Official Statement in accordance with and as part of its

responsibility to investors under the federal securities laws as applied to the facts and circumstances of this transaction, but the Underwriter does not guarantee the accuracy or completeness of such information.

Statements in this Official Statement are made as of the date hereof and neither the delivery of this Official Statement at any time, nor any sales hereunder, shall under any circumstances create an implication that the information contained herein is correct as of any time subsequent to the date hereof.

References to website addresses presented herein are for informational purposes only and may be in the form of a hyperlink solely for the reader’s convenience. Unless specified otherwise, such websites and the information or links contained therein are not incorporated into, and are not part of, this Official Statement for purposes of, and as that term is defined in, SEC Rule 15c2-12.

[Remainder of Page Intentionally Left Blank]

TABLE OF CONTENTS

Page

INTRODUCTION ...... 1 Purpose of the 2016A Bonds ...... 1 The Corporation ...... 1 The 2016A Bonds ...... 1 Security for the 2016A Bonds ...... 2 Certain Information Related to This Official Statement ...... 3 THE INFRASTRUCTURE BANK ...... 3 PLAN OF FINANCE ...... 4 ESTIMATED SOURCES AND USES OF FUNDS ...... 4 THE 2016A BONDS ...... 4 General ...... 4 Interest Rates and Interest Payment Dates ...... 5 Redemption ...... 6 Mandatory Tender for Purchase ...... 7 Delayed Remarketing Period ...... 8 Change of Mode ...... 9 Remarketing Agent and Tender Agent ...... 9 Book-Entry Only System ...... 9 SECURITY FOR THE 2016A BONDS ...... 9 General ...... 9 Payments under the Loan Agreement ...... 11 Limitations on Encumbrances under the Loan Agreement ...... 11 Outstanding Bonds and Other Debt ...... 12 Collateral Account and Intercreditor Agreement ...... 14 CERTAIN INVESTMENT CONSIDERATIONS ...... 1 4 General ...... 14 No Corporation Obligation to Purchase 2016A Bonds on Scheduled Mandatory Tender Date ...... 15 No Recourse to the Corporation’s Art Collection ...... 15 Limited Obligation of the Infrastructure Bank ...... 15 Relationship with County of Los Angeles ...... 16 Risks to the Corporation under the Swap Agreement ...... 16 Impact of the 2013 Direct Purchase Bonds, Including Limitation on Acceleration ...... 17 General Risks of Existing Debt and Future Debt ...... 18

Investment of Funds Risk ...... 18 Fundraising ...... 18 Claims and Insurance Coverage ...... 19 Natural Disasters and Other Catastrophic Events ...... 19 Competition ...... 19 Tax-Exempt Status ...... 19 Bankruptcy and Enforcement of Remedies ...... 20 LONG-TERM DEBT SERVICE REQUIREMENTS ...... 21 FORWARD-LOOKING STATEMENTS ...... 22 TAX MATTERS...... 22 Opinion of Bond Counsel ...... 22 Certain Ongoing Federal Tax Requirements and Covenants ...... 22 Certain Collateral Federal Tax Consequences ...... 23 Bond Premium ...... 23 Information Reporting and Backup Withholding ...... 2 3 Miscellaneous ...... 24 ABSENCE OF MATERIAL LITIGATION ...... 24 The Infrastructure Bank ...... 24 The Corporation ...... 24 UNDERWRITING ...... 25 APPROVAL OF LEGALITY...... 25 RATING ...... 26 CONTINUING DISCLOSURE ...... 26 CERTAIN RELATIONSHIPS ...... 26 MISCELLANEOUS ...... 27

APPENDICES

APPENDIX A — THE LOS ANGELES COUNTY MUSEUM OF ART ...... A-1 APPENDIX B — FINANCIAL STATEMENTS AS OF AND FOR THE YEAR ENDED JUNE 30, 2016 ...... B-1 APPENDIX C — SUMMARY OF PRINCIPAL DOCUMENTS ...... C-1 APPENDIX D — FORM OF BOND COUNSEL OPINION ...... D-1 APPENDIX E — FORM OF CONTINUING DISCLOSURE AGREEMENT ...... E-1 APPENDIX F — BOOK-ENTRY ONLY SYSTEM ...... F-1

OFFICIAL STATEMENT

$78,000,000* CALIFORNIA INFRASTRUCTURE AND ECONOMIC DEVELOPMENT BANK REFUNDING REVENUE BONDS (LOS ANGELES COUNTY MUSEUM OF ART PROJECT), SERIES 2016A (INDEX MODE)

INTRODUCTION

This Introduction contains only a brief summary of certain of the terms of the 2016A Bonds being offered and a brief description of the Official Statement. All statements contained in this Introduction are qualified in their entirety by reference to the entire Official Statement. References to, and summaries of, provisions of the laws of the State of California, including the Act (as defined below), the Indenture, the Loan Agreement and any other documents referred to herein do not purport to be complete and such references and summaries are qualified in their entirety by reference to the complete provisions of such documents.

Purpose of the 2016A Bonds

The California Infrastructure and Economic Development Bank (the “Infrastructure Bank”) will loan the proceeds of the California Infrastructure and Economic Development Bank Refunding Revenue Bonds (Los Angeles County Museum of Art Project), Series 2016A (the “2016A Bonds”) to Museum Associates, doing business as the Los Angeles County Museum of Art (the “Corporation”) pursuant to a First Supplemental Loan Agreement, dated as of November 1, 2016, which supplements a Loan Agreement, dated as of August 1, 2013 (as so supplemented, the “Loan Agreement”), each by and between the Infrastructure Bank and the Corporation. The proceeds of the 2016A Bonds, together with other legally available funds of the Corporation, will be used by the Corporation to purchase the Purchased Bonds (as defined herein) and to pay costs of issuance with respect to the 2016A Bonds. See “PLAN OF FINANCE” and “ESTIMATED SOURCES AND USES OF FUNDS.”

The Corporation

The Corporation manages, operates and maintains the Los Angeles County Museum of Art (the “Museum”). The Museum is the premier encyclopedic visual arts museum in the Western United States. The Museum’s collection of more than 130,000 works from around the world spans the history of art, from ancient to contemporary times. Through its varied collections, the Museum is both a resource to and a reflection of the many cultural communities and heritages in Southern California, the United States and the world. Important information about the Corporation and its financial condition is set out in APPENDIX A – “THE LOS ANGELES COUNTY MUSEUM OF ART” attached hereto, which should be read in its entirety. In addition, a copy of the Corporation’s audited Financial Statements as of and for the Year Ended June 30, 2016 and Independent Auditors’ Report are attached as APPENDIX B and should be read in their entirety.

The 2016A Bonds

The Infrastructure Bank will issue the 2016A Bonds under and pursuant to the Constitution and laws of the State of California (the “State of California” or “State”), particularly the Bergeson-Peace Infrastructure and Economic Development Bank Act, constituting Division I of Title 6.7 (commencing with Section 63000) of the California Government Code (as now in effect and as it may from time to time hereafter be amended or supplemented, the “Act”), and a First Supplemental Indenture, dated as of November 1, 2016, which supplements an Indenture, dated as of August 1, 2013 (as so supplemented, the “Indenture”), each by and between the Infrastructure Bank and U.S. Bank National Association, as trustee (the “Trustee”). The

* Preliminary, subject to change.

Infrastructure Bank will loan the proceeds of the 2016A Bonds to the Corporation pursuant to the Loan Agreement.

The 2016A Bonds will be issued in an Index Mode with an Initial Index Mode Rate Period scheduled to end on July 30, 2020*, which is the day prior to the Scheduled Mandatory Tender Date. If the 2016A Bonds are not successfully remarketed on the Scheduled Mandatory Tender Date, the Initial Index Mode Rate Period will be extended as described under “THE 2016A BONDS – Delayed Remarketing Period.” The index rate (the “Index Rate”), the applicable percentage (the “Index Mode Applicable Percentage”) and the index mode spread (the “Index Mode Spread”) for the 2016A Bonds in the Initial Index Mode Rate Period are set forth after the inside cover page hereof. See also “THE 2016A BONDS – Interest Rates and Interest Payment Dates.”

This Official Statement describes the 2016A Bonds only while they are in the Index Mode during the Initial Index Mode Rate Period. There are significant differences with respect to the terms of the 2016A Bonds while in a Mode other than the Index Mode or during a subsequent Index Mode Rate Period. Investors should not rely upon the information in this Official Statement if the 2016A Bonds are converted to a Mode other than the Index Mode or during a subsequent Index Mode Rate Period.

Security for the 2016A Bonds

Under the Indenture, the 2016A Bonds, the 2013A Bonds and the 2013 Direct Purchase Bonds (each as defined herein) and any Additional Bonds issued under the Indenture (the 2016A Bonds, together with the 2013A Bonds and the 2013 Direct Purchase Bonds and any other Additional Bonds, are collectively referred to as the “Bonds”) are secured by a pledge of the Revenues and any available amounts held in the funds or accounts established pursuant to the Indenture (other than the Rebate Fund and remarketing proceeds). The Revenues consist primarily of the Loan Payments to be made by the Corporation under the Loan Agreement.

The Corporation’s obligation under the Loan Agreement to make Loan Payments, which will be used to pay the principal of and interest on the Bonds (including the 2016A Bonds), constitutes an unsecured general obligation of the Corporation (except to the extent that amounts are transferred to the Collateral Account, as described herein). The 2016A Bonds will not be secured by any credit facility or liquidity facility while in the Index Mode.

In addition to the Bonds referenced above, the Corporation has other outstanding obligations and may in the future issue Additional Bonds or incur additional indebtedness or other obligations. Further, the 2013 Direct Purchase Bonds have special features (and the holders thereof have special rights under the related Continuing Covenant Agreements (as hereinafter defined)) that affect the rights of the holders of the other Bonds (including the 2016A Bonds), as described herein. See “SECURITY FOR THE 2016A BONDS – Outstanding Bonds and Other Debt.”

THE 2016A BONDS ARE LIMITED OBLIGATIONS OF THE INFRASTRUCTURE BANK AND ARE NOT A LIEN OR CHARGE UPON THE FUNDS OR PROPERTY OF THE INFRASTRUCTURE BANK, EXCEPT TO THE EXTENT OF THE PLEDGE AND THE ASSIGNMENT PROVIDED FOR IN THE INDENTURE. NEITHER THE STATE OF CALIFORNIA NOR THE INFRASTRUCTURE BANK SHALL BE OBLIGATED TO PAY THE PRINCIPAL OF THE 2016A BONDS, PREMIUM, IF ANY, OR THE INTEREST THEREON, EXCEPT FROM REVENUES RECEIVED BY THE INFRASTRUCTURE BANK AND THE OTHER FUNDS PROVIDED THEREFOR PURSUANT TO THE INDENTURE. NEITHER THE FULL FAITH AND CREDIT NOR THE TAXING POWER OF THE STATE OF CALIFORNIA IS PLEDGED TO THE PAYMENT OF THE PRINCIPAL OF, PREMIUM, IF ANY, OR INTEREST ON, THE 2016A BONDS. THE 2016A BONDS WILL NOT CONSTITUTE A DEBT OR LIABILITY OF THE STATE OF CALIFORNIA OR ANY POLITICAL SUBDIVISION THEREOF OTHER

* Preliminary, subject to change.

THAN THE LIMITED OBLIGATION OF THE INFRASTRUCTURE BANK, PAYABLE SOLELY FROM REVENUES AND THE OTHER FUNDS PROVIDED THEREFOR PURSUANT TO THE INDENTURE. NEITHER THE STATE OF CALIFORNIA NOR ANY POLITICAL SUBDIVISION THEREOF WILL IN ANY MANNER BE OBLIGATED TO MAKE ANY APPROPRIATION FOR SUCH PAYMENTS. THE INFRASTRUCTURE BANK HAS NO TAXING POWERS.

Certain Information Related to This Official Statement

The descriptions herein of the Indenture, the Loan Agreement, and other agreements relating to the 2016A Bonds are qualified in their entirety by reference to such documents, and the description herein of the 2016A Bonds is qualified in its entirety by the form thereof and the information with respect thereto included in such documents. See APPENDIX C – “SUMMARY OF PRINCIPAL DOCUMENTS” for a summary of the rights and duties of the Infrastructure Bank and the Trustee, the rights and remedies of the Trustee and the Bondholders upon an event of default, and provisions relating to amendments of the Indenture and the Loan Agreement and procedures for defeasance of the 2016A Bonds.

See APPENDIX C – “SUMMARY OF PRINCIPAL DOCUMENTS” under the heading “DEFINITIONS” for definitions of certain words and terms used but not otherwise defined herein.

The information and expressions of opinion herein speak only as of their date and are subject to change without notice. Neither delivery of this Official Statement nor any sale made hereunder nor any future use of this Official Statement will, under any circumstances, create any implication that there has been no change in the affairs of the Infrastructure Bank or the Corporation.

THE INFRASTRUCTURE BANK

The Infrastructure Bank is an entity within the Governor’s Office of Business and Economic Development in the State of California, organized and existing pursuant to the Act. The Infrastructure Bank is authorized and empowered pursuant to the Act to issue the 2016A Bonds, to loan the proceeds thereof to the Corporation, to secure the Bonds by a pledge of the amounts payable by the Corporation under the Loan Agreement and any available amounts held in the funds or accounts established pursuant to the Indenture (other than the Rebate Fund and remarketing proceeds), and to enter into the Loan Agreement and the Indenture.

The Infrastructure Bank is governed by a board of directors (the “Infrastructure Bank Board”) consisting of the Director of the Governor’s Office of Business and Economic Development, who serves as chairperson, the Director of the State’s Department of Finance, the State Treasurer, the Secretary of the State’s Transportation Agency, or their respective designees, and a Governor’s appointee. The business and affairs of the Infrastructure Bank are managed and conducted by its Executive Director. The Infrastructure Bank has no taxing power.

The Bonds are limited obligations of the Infrastructure Bank and are payable solely from, and secured by a pledge of and lien on, the Revenues, consisting primarily of the Loan Payments made by the Corporation under the Loan Agreement and moneys in certain funds pledged therefor (other than the Rebate Fund and the Purchase Fund), as and to the extent set forth in the Indenture.

Information about the Infrastructure Bank included in this Official Statement under the headings “THE INFRASTRUCTURE BANK” and “ABSENCE OF MATERIAL LITIGATION – The Infrastructure Bank” has been obtained from the Infrastructure Bank. The Infrastructure Bank makes no representations or warranties whatsoever with respect to any statements or information contained herein except for information contained under the headings “THE INFRASTRUCTURE BANK” and “ABSENCE OF MATERIAL LITIGATION – The Infrastructure Bank.”

PLAN OF FINANCE

The proceeds of the 2016A Bonds will be used to purchase up to $78,000,000* aggregate principal amount of the California Infrastructure and Economic Development Bank Refunding Revenue Bonds (Los Angeles County Museum of Art Project), Series 2013A (the “2013A Bonds”) from the holders thereof on the date of issuance of the 2016A Bonds. The proceeds of the 2013A Bonds were used to refund prior indebtedness of the Corporation, which in turn financed or refinanced various capital projects of the Corporation. Other legally available funds of the Corporation will be used to pay costs of issuance with respect to the 2016A Bonds.

The 2013A Bonds to be purchased by the Corporation on the date of issuance of the 2016A Bonds are referred to herein as the “Purchased Bonds.” The Purchased Bonds will be purchased from the holders thereof pursuant to private purchase agreements to be entered into between the Corporation and each such holder prior to the issuance of the 2016A Bonds. It will be a condition to the issuance of the 2016A Bonds that particular conditions to closing set forth in such private purchase agreements shall have been satisfied prior to the issuance of the 2016A Bonds. Upon application of the proceeds of the 2016A Bonds by the Corporation to purchase the Purchased Bonds, (1) the Purchased Bonds will be surrendered to the Trustee for cancellation and will no longer be outstanding upon such cancellation and (2) approximately $______aggregate principal amount of the 2013A Bonds will remain outstanding.

ESTIMATED SOURCES AND USES OF FUNDS

The estimated sources and uses of the proceeds of the 2016A Bonds are shown below. Such proceeds will be used for the purposes described under “PLAN OF FINANCE.”

SOURCES: 2016A Bonds Principal Amount Original Issue Premium Equity Contribution(2) Total Sources USES: Purchase of Purchased Bonds(1)(2) Costs of Issuance(2) Total Uses ______(1) The Purchased Bonds are expected to be purchased from the Holders thereof on the on the date of issuance of the 2016A Bonds. See “PLAN OF FINANCE.” (2) Costs of issuance with respect to the 2016A Bonds and accrued interest with respect to the Purchased Bonds will be paid out of the Corporation’s equity contribution. Costs of issuance include, but are not limited to, rating agency fees, legal fees, printing costs, underwriter’s fees, issuer fees and other miscellaneous expenses.

THE 2016A BONDS

General

The 2016A Bonds will be issued in an Index Mode (and in a type of Index Mode known as “Amortizable Soft Put Bonds” under the Indenture) for an Initial Index Mode Rate Period scheduled to end on July 30, 2020* (if the 2016A Bonds are not successfully remarketed on the Scheduled Mandatory Tender Date, the Initial Index Mode Rate Period will be extended as described herein). See “Delayed Remarketing Period” below. The 2016A Bonds will be dated the date of their initial issuance. The 2016A Bonds will be issued in the aggregate principal amount set forth on the cover page hereof. While in the Index Mode, the 2016A Bonds

* Preliminary, subject to change.

will be delivered in denominations of $100,000 or any integral multiple of $5,000 in excess thereof. The 2016A Bonds will have a final maturity date of December 1, 2037, subject to prior redemption or purchase as described herein.

During the Initial Index Mode Rate Period, the 2016A Bonds are subject to mandatory tender for purchase on July 31, 2020* (the “Scheduled Mandatory Tender Date”) and on each Unscheduled Mandatory Tender Date (as defined herein). The dates when the 2016A Bonds are subject to mandatory tender for purchase are collectively referred to in this Official Statement as the “Mandatory Tender Date.” The 2016A Bonds are also subject to redemption prior to maturity, as described under “– Redemption” below. During the Initial Index Mode Rate Period, the 2016A Bonds are not subject to optional tender for purchase by the Holders thereof.

The 2016A Bonds will be issued in book-entry form only, and will be registered in the name of “Cede & Co.,” as nominee of DTC. The 2016A Bonds will be evidenced by one bond in the total aggregate principal amount of such 2016A Bonds. Registered ownership of the 2016A Bonds, or any portion thereof, may not thereafter be transferred except as set forth in the Indenture. See “Book-Entry Only System” below and APPENDIX F – “BOOK-ENTRY ONLY SYSTEM.”

Interest Rates and Interest Payment Dates

During the Initial Index Mode Rate Period, the 2016A Bonds will be in a type of Index Mode known as “Amortizable Soft Put Bonds” under the Indenture. The applicable interest rate for each Index Mode Weekly Interest Period (generally Thursday to Wednesday) will be determined by the Trustee on each Index Mode Rate Weekly Determination Date, and will equal a per annum rate equal to the LIBOR Index (the “Index Rate”), as determined on such Index Mode Rate Weekly Determination Date, multiplied by 70%* (the “Index Mode Applicable Percentage”), plus the Index Mode Spread (as shown after the inside cover page hereof). “Index Mode Rate Weekly Determination Date” means each Wednesday (or if Wednesday is not a Business Day, the immediately preceding Business Day). See APPENDIX C – “SUMMARY OF PRINCIPAL DOCUMENTS – DEFINITIONS” for the definition of “LIBOR Index” and certain other defined terms from the Indenture.

Interest will be paid on the 2016A Bonds on each Interest Payment Date. During the Initial Index Mode Rate Period, “Interest Payment Date” means (i) the first Business Day of the calendar month, or (ii) any redemption date or Mandatory Tender Date. Interest on the 2016A Bonds in the Index Mode will be calculated on the basis of a 365- or 366-day year, as applicable, for the number of days actually elapsed.

The principal and Tender Price of and premium, if any, and interest on the 2016A Bonds will be payable, in lawful money of the United States of America, by wire transfer of immediately available funds to the respective Holders thereof on the applicable Record Date to an account specified by the Holder thereof in a writing delivered to the Trustee; provided however, that the 2016A Bonds will be issued and are expected to remain in book-entry form, and as such, payment of principal, Tender Price of and premium, if any, and interest on the 2016A Bonds will be paid to Cede & Co., as nominee of the Depository Trust Company (see “Book-Entry Only System” below).

If the 2016A Bonds are not remarketed on the Scheduled Mandatory Tender Date (i.e., July 31, 2020*), the interest rate on the 2016A Bonds will change to the Amortizable Soft Put Delayed Remarketing Period Rate (i.e., the Maximum Bond Interest Rate) as described below under “Delayed Remarketing Period.”

In the absence of manifest error, the determination by the Trustee of the Index Mode Interest Rate or any index component will be conclusive and binding on the Holders of the 2016A Bonds and the Corporation.

* Preliminary, subject to change.

Redemption

Optional Redemption. During the Initial Index Mode Rate Period, the 2016A Bonds are subject to optional redemption, at the direction of the Corporation, in whole or in part, on any Business Day from and after February 1, 2020* (the “Index Mode Call Date” for the Initial Index Mode Rate Period), at a redemption price equal to the principal amount of 2016A Bonds called for redemption, plus accrued interest, without premium.

Redemption in lieu of Purchase. Any 2016A Bond that is subject to mandatory tender for purchase as described under “Mandatory Tender for Purchase” may be redeemed at the direction of the Corporation.

Pro Rata Redemption Required by Current Indenture. In the case of any optional redemption of less than all of the Bonds (including the 2016A Bonds, the 2013A Bonds, the 2013 Direct Purchase Bonds and any Additional Bonds) the Indenture currently requires the Bonds to be redeemed on a pro rata basis, based on the Outstanding principal amount of each Series of Bonds; however, as described under “SECURITY FOR THE 2016A BONDS – General,” the Corporation is currently considering an amendment to the Indenture to eliminate this pro rata optional redemption requirement. This requirement does not apply to a purchase of the Bonds.

Special Mandatory Redemption During Delayed Remarketing Period. During the Initial Index Mode Rate Period, if the Tender Price of the 2016A Bonds is not paid on the Scheduled Mandatory Tender Date, an Amortizable Soft Put Bond Delayed Remarketing Period (the “Amortizable Soft Put Bond Delayed Remarketing Period”) for such 2016A Bonds will commence on such date to (but not including) the date on which all the 2016A Bonds are purchased or redeemed. During an Amortizable Soft Put Bond Delayed Remarketing Period, the 2016A Bonds will be subject to special mandatory redemption, in part, by lot, on each Special Mandatory Redemption Date (as defined in the following paragraph) during such Amortizable Soft Put Bond Delayed Remarketing Period in an amount equal to the Special Mandatory Redemption Amount (as defined in the following paragraph), at a redemption price equal to 100% of the principal amount of 2016A Bonds being so redeemed, plus accrued interest thereon, without premium. See also “Delayed Remarketing Period” below.

“Special Mandatory Redemption Amount” means such amount as will cause the full Outstanding principal amount of 2016A Bonds as of the applicable Scheduled Mandatory Tender Date to be paid in six equal (or as nearly equal as practicable given the minimum Authorized Denominations of such 2016A Bonds) semiannual installments (each payment date being called a “Special Mandatory Redemption Date” as used herein), with the first installment relating to such 2016A Bonds being due and payable on August 2, 2021* (i.e., the first Business Day of the month that is 12 full months following the commencement of the Amortizable Soft Put Bond Delayed Remarketing Period) and each installment thereafter being due and payable on the first Business Day of the month that is six months following the prior installment.

Notice of Redemption. During the Initial Index Mode Rate Period, notice of redemption will be mailed by the Trustee, by first class mail, not less than twenty (20) days, nor more than sixty (60) days prior to the redemption date, to respective Holders of 2016A Bonds designated for redemption at their addresses appearing on the bond registration books of the Trustee. Each notice of redemption will specify the 2016A Bonds to be redeemed, the redemption date, the redemption price, and the place or places where amounts due upon such redemption will be payable (i.e., the principal corporate trust office of the Trustee) and, if less than all of the 2016A Bonds are to be redeemed, the numbers of the 2016A Bonds, and the portions of the 2016A Bonds, so to be redeemed, state any condition to such redemption, and state that on the redemption date, and upon the satisfaction of any such condition, the 2016A Bonds to be redeemed will cease to bear interest. CUSIP number identification will accompany all redemption notices. Such notice may set forth any additional information relating to such redemption.

* Preliminary, subject to change.

Failure by the Trustee to mail notice of redemption pursuant to the Indenture to any one or more of the respective Holders of any 2016A Bonds designated for redemption will not affect the sufficiency of the proceedings for redemption with respect to the Holders to whom such notice was mailed.

The Corporation may instruct the Trustee to provide a conditional notice of redemption, which may be conditioned upon the receipt of money or any other event. The Trustee will give notice of such rescission or any revision, including a change in the planned redemption date, as soon thereafter as practicable, in the same manner, to the same persons, as notice of such redemption was given pursuant to the Indenture.

Effect of Redemption. Notice of redemption having been duly given, and moneys for payment of the Redemption Price of, together with interest accrued to the date fixed for redemption on, 2016A Bonds (or portions thereof) so called for redemption being held by the Trustee, on the date fixed for redemption designated in such notice, such 2016A Bonds (or portions thereof) so called for redemption will become due and payable at the Redemption Price specified in such notice and interest accrued thereon to the date fixed for redemption, interest on such 2016A Bonds so called for redemption will cease to accrue, said 2016A Bonds (or portions thereof) will cease to be entitled to any benefit or security under the Indenture, and the Holders of said 2016A Bonds will have no rights in respect thereof except to receive payment of said Redemption Price and accrued interest to the date fixed for redemption from funds held by the Trustee for such payment.

Mandatory Tender for Purchase

Mandatory Tender for Purchase on Scheduled Mandatory Tender Date. During the Initial Index Mode Rate Period, the 2016A Bonds are subject to mandatory tender for purchase on the Scheduled Mandatory Tender Date (i.e., July 31, 2020*), at the Tender Price of par plus accrued interest.

During the Initial Index Mode Rate Period, the Corporation has no obligation to purchase any 2016A Bonds on the Scheduled Mandatory Tender Date with its own funds, and the failure to purchase the 2016A Bonds on a Scheduled Mandatory Tender Date will not constitute an Event of Default under the Indenture. The Tender Price with respect to 2016A Bonds subject to purchase on the Scheduled Mandatory Tender Date will be paid only if sufficient moneys derived from the successful remarketing of such 2016A Bonds are available to effect such purchase.

Pursuant to the Loan Agreement, the Corporation covenants and agrees to take all commercially reasonable actions to support the remarketing of the 2016A Bonds in connection with any applicable Scheduled Mandatory Tender Date, and in the event that the 2016A Bonds are not successfully remarketed on the applicable Scheduled Mandatory Tender Date, in connection with any remarketing during the applicable Index Mode Rate Period.

Mandatory Tender for Purchase on Unscheduled Mandatory Tender Date. During the Initial Index Mode Rate Period, the Corporation may, at its option, require that the 2016A Bonds be tendered for purchase on any Business Day on and after the Index Mode Call Date (which is February 1, 2020*) through the last day of the Index Mode Rate Period or during any Amortizable Soft Put Bond Delayed Remarketing Period, at the Tender Price of par plus accrued interest; provided, however, the Tender Price will be payable from moneys on deposit in the Remarketing Account derived from the successful remarketing of such 2016A Bonds, or from funds of the Corporation, which the Corporation may, but is not required to, provide to purchase the 2016A Bonds on an Unscheduled Mandatory Tender Date if remarketing proceeds are inadequate for such purpose.

The Corporation has no obligation to purchase the 2016A Bonds on an Unscheduled Mandatory Tender Date, and the failure to purchase the 2016A Bonds on an Unscheduled Mandatory Tender Date will not constitute an Event of Default under the Indenture.

* Preliminary, subject to change.

The Corporation has the option to deliver to the Tender Agent, the Trustee and the Remarketing Agent, by Electronic Means, on or prior to 5:00 p.m., New York City time, on the Business Day immediately preceding the proposed Unscheduled Mandatory Tender Date, a notice to the effect that the Corporation elects to rescind such mandatory tender for purchase. If the Corporation elects to rescind such mandatory tender for purchase (or if any purchase of 2016A Bonds does not occur for any reason), then no purchase will occur, the 2016A Bonds will continue to bear interest at the Index Mode Interest Rate as in effect for the Index Mode Rate Period then in effect. Upon receipt of notice from the Corporation of its election to rescind such mandatory tender for purchase, the Trustee will, as soon as practicable thereafter, send notice to the Holders of the 2016A Bonds by Electronic Means stating that the mandatory tender for purchase has been rescinded.

Notices Relating to Mandatory Tender for Purchase. In connection with any mandatory tender for purchase of 2016A Bonds the Trustee will provide notice by Electronic Means to the Holders of the 2016A Bonds subject to tender, not less than 10 days prior to the Mandatory Tender Date. Such notice will state the date of purchase, the purchase price, the place where amounts due upon such tender will be payable (which will be the Principal Corporate Trust Office of the Trustee), and any condition to such tender and purchase. The Trustee will also provide notice of any rescission or modification to any mandatory tender for purchase by Electronic Means as soon as practicable.

In the event of a failure to pay the Tender Price of the 2016A Bonds on any Mandatory Tender Date, the Trustee will provide notice by Electronic Means to the Holders, as soon as practicable, of the failure to pay such Tender Price. Such notice may be combined with any notice modifying the date of a mandatory tender for purchase as described above.

No Optional Tenders of the 2016A Bonds. The 2016A Bonds in the Index Mode are not subject to optional tender for purchase by the Holders thereof.

Delayed Remarketing Period

If the Tender Price for the 2016A Bonds is not paid on the Scheduled Mandatory Tender Date (i.e., July 31, 2020*), an Amortizable Soft Put Bond Delayed Remarketing Period will commence on such date and the 2016A Bonds will be subject to special mandatory redemption (described above under “Redemption – Special Mandatory Redemption During Delayed Remarketing Period”) and will bear interest at a rate per annum equal to the Maximum Bond Interest Rate. The Indenture defines the “Maximum Bond Interest Rate” as the lesser of (a) the rate of 12% per annum and (b) the maximum rate of interest on the relevant obligation permitted by applicable law (under current applicable law, there is no statutory maximum interest rate). Any failure to pay the Tender Price of the 2016A Bonds on the Scheduled Mandatory Tender Date will not result in an Event of Default under the Indenture and the Corporation has no obligation to pay the Tender Price of the 2016A Bonds on the Scheduled Mandatory Tender Date.

In the absence of manifest error, the determination by the Trustee of the Amortizable Soft Put Delayed Remarketing Period Rate or any index component will be conclusive and binding on the Holders of the 2016A Bonds and the Corporation.

* Preliminary, subject to change.

Change of Mode

The 2016A Bonds may be changed to a different Mode at the times and in the manner provided in the Indenture, and the 2016A Bonds will be tendered for purchase on the Conversion Date.

This Official Statement describes the 2016A Bonds only while they are in the Index Mode during the Initial Index Mode Rate Period. There are significant differences with respect to the terms of the 2016A Bonds while in a Mode other than the Index Mode, during a subsequent Index Mode Rate Period or if the 2016A Bonds are not Amortizable Soft Put Bonds. Investors should not rely upon the information in this Official Statement if the 2016A Bonds are converted to a Mode other than the Index Mode, during a subsequent Index Mode Rate Period, or while the 2016A Bonds are not Amortizable Soft Put Bonds.

Remarketing Agent and Tender Agent

The Corporation has appointed Wells Fargo Bank, National Association as the remarketing agent for the 2016A Bonds (in such capacity, the “Remarketing Agent”). In connection with the issuance of the 2016A Bonds, the Corporation will enter into a Remarketing Agreement, dated as of November 1, 2016 (the “Remarketing Agreement”), with the Remarketing Agent. During the Initial Index Mode Rate Period, the duty of the Remarketing Agent to remarket the 2016A Bonds is generally limited to the remarketing related to the Scheduled Mandatory Tender Date and any Unscheduled Mandatory Tender Date. The Remarketing Agreement will provide, among other things, for the Remarketing Agent to use its best efforts to remarket the 2016A Bonds upon mandatory tender for purchase thereof. The Remarketing Agreement permits the Remarketing Agent to resign or to be removed under certain circumstances. The Trustee will serve as the tender agent for the 2016A Bonds (in such capacity, the “Tender Agent”).

The Remarketing Agent is Paid by the Corporation. The Remarketing Agent’s responsibilities include determining the interest rate from time to time and remarketing the 2016A Bonds that are tendered by the owners thereof (subject, in each case, to the terms of the Indenture and the Remarketing Agreement), all as further described in this Official Statement. The Remarketing Agent is appointed by the Corporation and is paid by the Corporation for its services. As a result, the interests of the Remarketing Agent may differ from those of existing Holders and potential purchasers of the 2016A Bonds.

Book-Entry Only System

The 2016A Bonds will be issued in book-entry form only and will be registered in the name of Cede & Co., as nominee of The Depository Trust Company (“DTC”) which will act as securities depository for the 2016A Bonds. Purchases of the 2016A Bonds may be made in book-entry form only, through brokers and dealers who are, or who act through, DTC Participants. Beneficial Owners of the 2016A Bonds will not receive physical delivery of certificated securities. Principal of and interest on the 2016A Bonds will be payable by the Trustee to DTC, which will in turn remit such payments to the DTC Participants, which will in turn remit such payments to the Beneficial Owners of the 2016A Bonds. In addition, so long as Cede & Co. is the registered owner of the 2016A Bonds, the selection of 2016A Bonds held by Beneficial Owners in book- entry form for redemption will be made pursuant to the procedures of DTC. See APPENDIX F – “BOOK- ENTRY ONLY SYSTEM” for a description of DTC and the Book-Entry Only System

SECURITY FOR THE 2016A BONDS

General

THE INDENTURE. NEITHER THE STATE OF CALIFORNIA NOR THE INFRASTRUCTURE BANK SHALL BE OBLIGATED TO PAY THE PRINCIPAL OF THE 2016A BONDS, PREMIUM, IF ANY, OR THE INTEREST THEREON, EXCEPT FROM REVENUES RECEIVED BY THE INFRASTRUCTURE BANK AND THE OTHER FUNDS PROVIDED THEREFOR PURSUANT TO THE INDENTURE. NEITHER THE FULL FAITH AND CREDIT NOR THE TAXING POWER OF THE STATE OF CALIFORNIA IS PLEDGED TO THE PAYMENT OF THE PRINCIPAL OF, PREMIUM, IF ANY, OR INTEREST ON, THE 2016A BONDS. THE 2016A BONDS WILL NOT CONSTITUTE A DEBT OR LIABILITY OF THE STATE OF CALIFORNIA OR ANY POLITICAL SUBDIVISION THEREOF OTHER THAN THE LIMITED OBLIGATION OF THE INFRASTRUCTURE BANK, PAYABLE SOLELY FROM REVENUES AND THE OTHER FUNDS PROVIDED THEREFOR PURSUANT TO THE INDENTURE. NEITHER THE STATE OF CALIFORNIA NOR ANY POLITICAL SUBDIVISION THEREOF WILL IN ANY MANNER BE OBLIGATED TO MAKE ANY APPROPRIATION FOR SUCH PAYMENTS. THE INFRASTRUCTURE BANK HAS NO TAXING POWERS.

The Bonds (which include the 2016A Bonds, the 2013A Bonds, the 2013 Direct Purchase Bonds and any other Additional Bonds) are payable solely from and secured by Revenues available under the Indenture. “Revenues” are defined under the Indenture to include all payments received by the Infrastructure Bank or the Trustee from or on behalf of the Corporation (except Additional Payments paid by the Corporation pursuant to the Loan Agreement and any amounts paid by the Corporation pursuant to the indemnification provisions of the Loan Agreement), including, without limiting the generality of the foregoing, Loan Payments (including both timely and delinquent payments, any late charges, and whether paid from any source), prepayments of all or any part of the Loan Payments and all interest, profits or other income derived from the investment of any money in any fund or account established pursuant to the Indenture (except to the extent such interest, profits or other income is required to be transferred to or retained in the Rebate Fund pursuant to the Indenture or the Tax Agreement). Pursuant to the terms of the Indenture, subject only to the provisions of the Indenture permitting the application thereof for the purposes and on the terms and conditions set forth therein, the Corporation has pledged to the Trustee for the benefit of the respective Bondholders all of the Revenues and other amounts held in the funds or accounts established pursuant to the Indenture (other than the Rebate Fund and certain remarketing proceeds). See APPENDIX C – “SUMMARY OF PRINCIPAL DOCUMENTS – INDENTURE, AS SUPPLEMENTED – Pledge and Assignment of Revenues and Rights under the Loan Agreement.”

Pursuant to the Indenture, the Infrastructure Bank transfers in trust, grants a security interest in and assigns to the Trustee, for the benefit of the Holders from time to time of the Bonds, all of the Revenues and other amounts pledged under the Indenture and all of the right, title and interest of the Infrastructure Bank in the Loan Agreement (except for any deposits to the Rebate Fund, and except for the Reserved Rights). Under the Indenture, the Trustee is entitled and required to collect and receive all of the Revenues, and any Revenues collected or received by the Infrastructure Bank will be deemed to be held, and to have been collected or received, by the Infrastructure Bank as the agent of the Trustee.

The Special Purchasers (generally, the Holder or Holders of a majority of the principal amount of a particular Series of Bonds in the Direct Purchase Mode) and the Requisite Special Parties (generally, Special Purchasers representing in excess of 66-2/3% of the 2013 Direct Purchase Bonds while in the Direct Purchase Mode) have certain special rights under the Indenture and the Loan Agreement, including the right to consent to certain actions under the Indenture and to declare an Event of Default resulting in an acceleration under the

Indenture, which acceleration will cause the acceleration of all of the Bonds, including the 2016A Bonds. Further, while the 2013 Direct Purchase Bonds are in the Direct Purchase Mode, each Series of such Bonds will be held pursuant to the terms of their respective Continuing Covenant Agreements (each, as amended, a “Continuing Covenant Agreement”), between the Corporation and each Initial Special Purchaser (as defined in APPENDIX A hereto) of such Bonds. See “Outstanding Bonds and Other Debt” below and “CERTAIN INVESTMENT CONSIDERATIONS – Impact of the 2013 Direct Purchase Bonds, Including Limitation on Acceleration,” APPENDIX A – “THE LOS ANGELES COUNTY MUSEUM OF ART – SELECTED FINANCIAL INFORMATION – Outstanding Debt – 2013 Direct Purchase Bonds” and APPENDIX C – “SUMMARY OF PRINCIPAL DOCUMENTS – INDENTURE” and “– LOAN AGREEMENT.”

The Indenture and the Loan Agreement may be amended under certain circumstances without the consent of the Holders of the 2016A Bonds. See APPENDIX C – “SUMMARY OF PRINCIPAL DOCUMENTS – INDENTURE, AS SUPPLEMENTED – Other Covenants; Amendment of Agreement,” “– Modification without Consent of Bondholders” and “– Modification with Consent of Bondholders.” In particular and by way of example, the Corporation is currently considering an amendment to the Indenture to eliminate the pro rata optional redemption requirement (described under “THE 2016A BONDS – Pro Rata Redemption Required by Current Indenture”). Such Indenture amendment, if made, would likely take effect concurrently with or prior to the issuance of the 2016B Bonds and may not require the consent of the Holders of the 2016A Bonds.

The 2016A Bonds will not be secured by any credit facility or liquidity facility while in the Index Mode.

Payments under the Loan Agreement

Under the Loan Agreement, the Corporation has an unconditional general obligation to pay the Loan Payments, which payments are due in amounts and at the times necessary to pay the principal (whether at maturity or upon acceleration or prior redemption) of, premium, if any, and interest to the date of maturity or redemption of the Bonds. The Corporation’s payment obligations under the Loan Agreement are general, unsecured obligations of the Corporation (except to the extent that amounts are transferred to the Collateral Account). See “Collateral Account and Intercreditor Agreement” below. Although such payment obligations are the Corporation’s unconditional general obligations with recourse (on an unsecured basis) to the Corporation’s general pool of assets in the event remedies are exercised against the Corporation, under no circumstances will there be any recourse to the Corporation’s art collection (whether or not accessioned) (the “Collection”). Additionally, payments with respect to the Swap Agreement (as defined herein) are also absolute and unconditional general obligations of the Corporation (except to the extent that amounts are transferred to the Collateral Account), similarly without recourse to the Collection. See “Collateral Account and Intercreditor Agreement” and “Outstanding Bonds and Other Debt” below, and “CERTAIN INVESTMENT CONSIDERATIONS – Risks to the Corporation under the Swap Agreement.”

During the Initial Index Mode Rate Period, the Corporation has no obligation under the Indenture or the Loan Agreement to make any payments with respect to the Tender Price of the 2016A Bonds. The Tender Price of 2016A Bonds subject to mandatory tender for purchase is payable only from the proceeds of the remarketing of such 2016A Bonds. See “CERTAIN INVESTMENT CONSIDERATIONS – No Obligation to Purchase Bonds Subject to Mandatory Tender for Purchase.”

Limitations on Encumbrances under the Loan Agreement

Under the Loan Agreement, the Corporation agrees that it will not create, assume or suffer to exist any Monetary Lien, unless the obligations of the Corporation under the Loan Agreement are secured before or equally and ratably with any obligation secured by such Monetary Lien; provided, however, that notwithstanding the foregoing provision, the Corporation may create, assume or suffer to exist any Permitted Liens.

“Monetary Lien” means any Lien (i.e., any mortgage, deed of trust, pledge, security interest, encumbrance or lien) that (1) the Corporation creates, assumes or suffers to exist upon any property owned by the Corporation, whether now owned or hereafter acquired, and (2) secures any obligation of the Corporation to make a monetary payment (whether contingent or otherwise), except for Liens that secure any and all obligations of the Corporation under the Indenture, the Loan Agreement, the Bonds, the Swap Agreement and any other document related thereto (including, without limitation, the Continuing Covenant Agreements and any Credit Facility Provider Agreement).

“Permitted Liens” means and includes: (1) any Lien securing obligations for borrowed money or other monetary obligations not exceeding in the aggregate a principal amount of $10,000,000; (2) any Liens on any property existing before the time of its acquisition by the Corporation through purchase, merger, consolidation or otherwise, whether or not assumed by the Corporation, but only to the extent the principal amount of any indebtedness or other monetary obligation secured by any such Liens does not exceed the lesser of the cost or fair market value of the property so acquired as determined in good faith by the Corporation; (3) any Liens existing on August 27, 2013 (i.e., the date of issuance of the 2013A Bonds and the 2013 Direct Purchase Bonds); (4) any collateral posted by the Corporation under the Swap Agreement; (5) any Liens on any art which secure the Corporation’s obligation under any Excluded Restricted Indebtedness; (6) undetermined liens and charges incident to construction or maintenance, and liens and charges incident to construction or maintenance now or hereafter filed of record which are being contested in good faith by the Corporation or which, whether singly or in the aggregate, do not materially adversely affect the interests of the Holders; (7) the Lien of taxes and assessments which are not delinquent, or, if delinquent, are being contested in good faith; (8) statutory liens arising in the ordinary course of business which are not delinquent or are being contested in good faith by the Corporation; (9) pledges or deposits in connection with workers’ compensation, unemployment insurance and other social security legislation; and (10) Liens securing any nonrecourse indebtedness of the Corporation that (a) is not a general obligation of the Corporation, (b) is secured only by a Lien on property to be acquired or constructed, and (c) is not secured by any recourse, directly or indirectly, to any property of the Corporation other than the property being acquired or constructed with such indebtedness or other monetary obligation.

“Excluded Restricted Indebtedness” means any indebtedness, up to an aggregate principal amount not to exceed $20,000,000 at any time outstanding, incurred for the purpose of acquiring art, to the extent that, at the time such indebtedness is incurred and at any date of determination thereafter, the Corporation has restricted assets that the Corporation may legally use to pay principal and interest on such indebtedness; provided that, with respect to restricted assets that are comprised of written pledges of cash or investments, (1) the cash or investments required to be donated under the pledges are scheduled such that the proceeds thereof will be available to pay all principal and interest on such indebtedness when due; and (2) the related pledgors have not defaulted in the timely payment of the pledged amounts. For the purposes of calculating the amount of restricted assets for purposes of the definition of “Excluded Restricted Indebtedness,” written pledges will be reflected at their non-discounted values.

Outstanding Bonds and Other Debt

The 2016A Bonds, the other outstanding Bonds and the Swap Agreement described below all constitute general, unsecured obligations of the Corporation, except to the extent that amounts are transferred to the Collateral Account. See “Collateral Account and Intercreditor Agreement” below. The Corporation also has other indebtedness and liabilities outstanding. See APPENDIX A – “THE LOS ANGELES COUNTY MUSEUM OF ART – SELECTED FINANCIAL INFORMATION – Outstanding Debt” for additional information regarding the indebtedness and liabilities of the Corporation, including the outstanding Bonds and the Swap Agreement.

One or more series of Additional Bonds may be issued on behalf of the Corporation and one or more additional swap agreements or other indebtedness and liabilities may be entered into by the Corporation, as permitted by the Indenture and the Loan Agreement, on a parity basis with the Corporation’s obligation to

make Loan Payments with respect to the 2016A Bonds. In particular, the Infrastructure Bank has authorized the issuance of its Refunding Revenue Bonds (Los Angeles County Museum of Art Project), Series 2016B (the “2016B Bonds”) for the purpose of refunding a portion of the 2013B Bonds, the 2013C Bonds and the 2013D Bonds (each as defined under “Outstanding Bonds” below). The Corporation anticipates that the Infrastructure Bank may issue the 2016B Bonds in the near future, subject to market and other conditions, and that the Corporation will use the proceeds of the 2016B Bonds to purchase and cancel or to redeem up to $150,000,000 aggregate amount of such outstanding 2013B Bonds, 2013C Bonds and 2013D Bonds. Further, subject to certain conditions agreed with the County as well as compliance with the terms of the Continuing Covenant Agreements, the County has agreed to issue $300 million of debt using its own credit ratings (e.g., through lease revenue bonds) in approximately 2020, or 3 years prior to the completion of the Building for the Permanent Collection, and lend the proceeds to the Museum to fund a portion of the costs for the Building for the Permanent Collection. The Corporation’s obligations to repay the $300 million loan will be subordinate to the Bonds and funded with pledges from private donations paid over time. Neither the amount nor final terms of such borrowing from the County, or of any additional indebtedness that the Corporation may incur, has been determined. See APPENDIX A – “THE LOS ANGELES COUNTY MUSEUM OF ART – OVERVIEW – The Museum – Building for the Permanent Collection” and “– SELECTED FINANCIAL INFORMATION – Outstanding Debt – Authorization and Use of Proceeds of 2016B Bonds; Possible Additional Indebtedness.” See also “CERTAIN INVESTMENT CONSIDERATIONS – General Risks of Debt and Future Debt” and APPENDIX C – “SUMMARY OF PRINCIPAL DOCUMENTS – INDENTURE, AS SUPPLEMENTED – Issuance of Additional Bonds.”

Outstanding Bonds. On August 27, 2013, the Infrastructure Bank issued the 2013A Bonds in the aggregate principal amount of $78,000,000 and its California Infrastructure and Economic Development Bank Refunding Revenue Bonds (Los Angeles County Museum of Art Project), Series 2013B in the aggregate principal amount of $115,000,000 (the “2013B Bonds”), Series 2013C in the aggregate principal amount of $100,000,000 (the “2013C Bonds”) and Series 2013D in the aggregate principal amount of $50,000,000 (the “2013D Bonds”), pursuant to the Indenture and loaned the proceeds thereof to the Corporation pursuant to the Loan Agreement. Upon issuance of the 2016A Bonds, all or a portion of the 2013A Bonds will be purchased by the Corporation and surrendered to the Trustee for cancellation. See “PLAN OF FINANCE.”

The 2013B Bonds, the 2013C Bonds and the 2013D Bonds are collectively referred to herein as the “2013 Direct Purchase Bonds.” The 2013 Direct Purchase Bonds were purchased pursuant to direct purchase arrangements with each of the Initial Special Purchasers (as defined in APPENDIX A hereto). The 2013 Direct Purchase Bonds have special features (and the holders thereof have special rights under the related Continuing Covenant Agreements) that affect the rights of the holders of the other Bonds (including the 2016A Bonds), as described herein and in APPENDIX A hereto. In addition, see “Collateral Account and Intercreditor Agreement” below and “CERTAIN INVESTMENT CONSIDERATIONS – Impact of the 2013 Direct Purchase Bonds, Including Limitation on Acceleration” herein. As described above, the Corporation anticipates that the Infrastructure Bank may issue the 2016B Bonds in the near future, subject to market and other conditions, and will use the proceeds of the 2016B Bonds to refinance up to $150,000,000 aggregate principal amount of the 2013 Direct Purchase Bonds.

Swap Agreement. The Corporation has entered into a swap agreement (as amended, the “Swap Agreement”) with Wells Fargo Bank, National Association (the “Swap Counterparty”) in a notional amount of $256,315,000. The Swap Agreement is subject to termination under various circumstances and the Corporation may be required to make a substantial termination payment to the Swap Counterparty upon such a termination, depending on the then-current market value of the swap transaction and even if the Corporation is not the defaulting party. The obligation of the Corporation to make payments to the Swap Counterparty under the Swap Agreement is a general obligation of the Corporation and the Holders of the 2016A Bonds do not have any right to any preference or priority over the Swap Counterparty. In addition to the additional information set forth in APPENDIX A hereto, see “CERTAIN INVESTMENT CONSIDERATIONS – Risks to the Corporation under the Swap Agreement.”

Collateral Account and Intercreditor Agreement

The obligations of the Corporation under the Loan Agreement are general, unsecured obligations of the Corporation and, at the time of the delivery of the 2016A Bonds, no assets of the Corporation are pledged to secure its obligations under the Loan Agreement. However, under the terms of each Continuing Covenant Agreement and the Swap Agreement, the Corporation is required to maintain, as of June 30 and December 31 of each year, the ratio (the “UNA Ratio”) of its unrestricted net assets (as adjusted to include certain pledges and include and exclude certain other assets and liabilities) to its total of indebtedness to not less than 0.73. If the Corporation fails to comply with this UNA Ratio, then the Requisite Special Parties and the Swap Counterparty will each have the right to require the Corporation to transfer its cash and investments to a collateral account (the “Collateral Account”) which would be held by the Trustee, on behalf of the Collateral Agent (currently, U.S. Bank National Association), for the benefit of the Secured Parties (generally consisting of the Trustee, on behalf of the Holders of the 2016A Bonds and the 2013A Bonds, the Holders of the 2013 Direct Purchase Bonds, the Swap Counterparty, and each Credit Facility Provider (if any)). Amounts on deposit in the Collateral Account are pledged to secure the Corporation’s obligations under the 2016A Bonds, the 2013A Bonds, the 2013 Direct Purchase Bonds, any Additional Bonds, the Swap Agreement, each Continuing Covenant Agreement and each Credit Facility and Credit Facility Agreement, on a pari passu basis. These covenants and any other provisions of the Continuing Covenant Agreements, the Swap Agreement and the Intercreditor Agreement may be amended or waived at any time by the parties thereto and without notice to or the consent of the Holders of the 2016A Bonds (even if amounts have been transferred to the Collateral Account). The Collateral Account would not secure the Tender Price of any mandatory tender for purchase of the 2013A Bonds, the 2016A Bonds or, if issued, the 2016B Bonds; however, amounts in the Collateral Account would be available to pay indebtedness of the Corporation as it comes due, including but not limited to payments of the principal with respect to the 2013 Direct Purchase Bonds (which payments are expected to be due in full concurrently with the Scheduled Mandatory Tender Date with respect to the 2016A Bonds and, if issued, the 2016B Bonds); payments due with respect to any Bonds on a Special Mandatory Redemption Date during any Delayed Remarketing Period (if applicable), and any termination payments that might be payable pursuant to the Swap Agreement. See “CERTAIN INVESTMENT CONSIDERATIONS – Risks to the Corporation under the Swap Agreement” and “– Impact of the 2013 Direct Purchase Bonds, Including Limitation on Acceleration.” See also APPENDIX C – “SUMMARY OF PRINCIPAL DOCUMENTS – INDENTURE, AS SUPPLEMENTED – Collateral Account.”

CERTAIN INVESTMENT CONSIDERATIONS

The following are certain investment considerations and risk factors that have been identified by the Corporation and should be carefully considered by prospective purchasers of the 2016A Bonds. The following list should not be considered to be exhaustive and has been prepared by the Corporation within the context of this Official Statement, including APPENDIX A – “THE LOS ANGELES COUNTY MUSEUM OF ART” and APPENDIX B – “FINANCIAL STATEMENTS AS OF AND FOR THE YEAR ENDED JUNE 30, 2016.” Investors should read APPENDIX A and APPENDIX B in their entirety. Inclusion of certain factors below are not intended to signify that there are not other investment considerations or risks attendant to the 2016A Bonds that are as material to an investment decision with respect to the 2016A Bonds as those that are described or apparent elsewhere herein.

General

As noted under “SECURITY AND SOURCES OF PAYMENT FOR THE 2016A BONDS” herein, the 2016A Bonds are payable from Loan Payments made by the Corporation pursuant to the Loan Agreement. The Corporation’s income depends on several financial, operating and other economic conditions, including payments by the County of Los Angeles under the Funding Agreement (which is described below and in APPENDIX A hereto), the results of the Corporation’s annual and long-term fundraising campaigns, the value and rate of return on the Corporation’s endowment funds, the Corporation’s ability to retain existing memberships and attract new memberships, the number of paid admissions, the demand for the Corporation’s

programs and exhibitions and the non-profit status of the Corporation. These conditions, in turn, are affected by local and national general economic and other conditions, including demographic changes, a change in the age composition of the population or a decline in the economic conditions of the market area, legislation, governmental regulations, and catastrophic or other events damaging any of the Corporation’s existing and future facilities. A decline or a slower-than-expected increase in the Corporation’s income or unexpected increases in expenses may materially impair its ability to make Loan Payments.

Except to the extent that the Corporation transfers amounts to the Collateral Account, the Corporation’s obligation to make Loan Payments under the Loan Agreement is an unsecured, general obligation of the Corporation and the Corporation has not pledged any assets to secure its obligations under the Loan Agreement. Except for any amounts on deposit in the Collateral Account (which may be less than the amount of obligations with respect to the Bonds and the Swap Agreement), the only recourse against the Corporation that the Holders of the 2016A Bonds may seek is against the Corporation’s general pool of assets (other than the Corporation’s Collection, which is not available to Holders) as an unsecured creditor without any particular priority to those assets. See “SECURITY FOR THE 2016A BONDS – Collateral Account and Intercreditor Agreement.” Under no circumstances may any remedies be exercised against, or any recourse be had to, the Collection.

Under the terms of the Indenture, the Holders of the 2016A Bonds do not have control over whether, after the occurrence of an Event of Default, the 2016A Bonds are accelerated. The Indenture requires the consent of Requisite Secured Parties before any of the 2016A Bonds, the 2013A Bonds, the 2013 Direct Purchase Bonds and any Additional Bonds are accelerated. However, the Indenture does provide that if any of the Bonds (including any 2013 Direct Purchase Bonds) are accelerated, all of the outstanding Bonds (including the 2016A Bonds) will automatically and immediately be accelerated. See “Impact of the 2013 Direct Purchase Bonds, Including Limitation on Acceleration” below.

No Corporation Obligation to Purchase 2016A Bonds on Scheduled Mandatory Tender Date

The Corporation has no obligation to purchase the 2016A Bonds on the Scheduled Mandatory Tender Date with its own funds, and the failure to purchase the 2016A Bonds on any Scheduled Mandatory Tender Date will not constitute an Event of Default under the Indenture. The Tender Price with respect to 2016A Bonds tendered for purchase on any such Scheduled Mandatory Tender Date will be paid only if sufficient moneys derived from the successful remarketing of such 2016A Bonds are available to effect such purchase.

No Recourse to the Corporation’s Art Collection

Under the Loan Agreement, the Holders of the 2016A Bonds have no recourse to the Collection.

Limited Obligation of the Infrastructure Bank

The 2016A Bonds are limited obligations of the Infrastructure Bank and are not a lien or charge upon the funds or property of the Infrastructure Bank, except to the extent of the pledge and the assignment provided for in the Indenture. Neither the State of California nor the Infrastructure Bank shall be obligated to pay the principal of the 2016A Bonds, premium, if any, or the interest thereon, except from Revenues received by the Infrastructure Bank and the other funds provided therefor pursuant to the Indenture. Neither the full faith and credit nor the taxing power of the State of California is pledged to the payment of the principal of, premium, if any, or interest on, the 2016A Bonds. The 2016A Bonds will not constitute a debt or liability of the State of California or any political subdivision thereof other than the limited obligation of the Infrastructure Bank payable solely from Revenues and the other funds provided therefor pursuant to the Indenture. Neither the State of California nor any political subdivision thereof will in any manner be obligated to make any appropriation for such payments. The Infrastructure Bank has no taxing powers.

Relationship with County of Los Angeles

As described in more detail in APPENDIX A – “THE LOS ANGELES COUNTY MUSEUM OF ART – OVERVIEW – Relationship with the County of Los Angeles,” the Corporation receives a significant annual contribution from the County of Los Angeles (the “County”) pursuant to a 99-year funding agreement that the Corporation and the County entered into in February 1994. The Corporation has historically relied on these annual payments to fund significant portions of its operations.

The County provides a significant amount of the Corporation’s operating support through the Funding Agreement. While the amount of the County’s support obligation is fixed by the Funding Agreement, the amount of cash directly available to the Corporation from time to time under the Funding Agreement may vary depending on (i) the timing of County payments directly to the Corporation during each fiscal year, and (ii) the amount of County funding that is paid in cash versus in-kind.

Under the terms of the Funding Agreement, the Corporation must match at least 80% of the County’s contribution to the Corporation or the County is not required to make its annual contributions. If the Corporation were to suffer financial difficulties, then the Corporation might be unable to satisfy this condition and the County might not make its annual contributions.

In addition, a disagreement between the County and the Corporation or any financial hardship of the County could materially reduce the amount of funds that the Corporation receives from the County, which could materially affect the ability of the Corporation to make Loan Payments and otherwise satisfy its obligations under the Loan Agreement.

Risks to the Corporation under the Swap Agreement

The Corporation has entered into the Swap Agreement with the Swap Counterparty as described under “SECURITY FOR THE 2016A BONDS – Outstanding Bonds and Other Debt.” The Swap Agreement poses several risks to the Corporation, including but not limited to the following:

• The Swap Agreement may not be an effective hedge against variable interest rates. The floating rate payable to the Corporation pursuant to the Swap Agreement may not match the variable interest rate on the hedged Bonds at all times or at any time. This could be due either to a failure of the Swap Counterparty to make a floating payment when due, or to a mismatch between the variable rate accruing on the hedged Bonds and the floating rate paid to the Corporation under the Swap Agreement.

• The Corporation could be required to make a large payment if the Swap Agreement terminates. The Swap Agreement may terminate as a result of events of default or termination events thereunder. The termination events include, among others, (i) a ratings withdrawal, suspension or downgrade of long-term unsecured, unenhanced senior debt of the Corporation below “Baa2” by Moody’s (or other ratings if the hedged Bonds are then rated by other rating agencies) and (ii) an event of default shall have occurred and be continuing under the Indenture, any reimbursement agreement supporting payment of any Bonds or any continuing covenant agreement entered into in connection with any Bonds bearing interest at the Index Interest Rate. The Swap Agreement may also be terminated at the election of the Corporation. In the event of a termination of the Swap Agreement, a substantial termination payment may be owed by the Corporation to the Swap Counterparty or by the Swap Counterparty to the Corporation that would reflect an estimate of the market value of the Swap Agreement (a “Termination Payment”). The amount of a Termination Payment can vary substantially depending upon the interest rates and other factors prevailing in the market at the time of a termination. As of June 30, 2016, the Corporation estimated that the termination payment that the Corporation would have been required to pay if the Swap Agreement had been terminated on that date was approximately $100 million.

Impact of the 2013 Direct Purchase Bonds, Including Limitation on Acceleration

The 2013 Direct Purchase Bonds were purchased pursuant to direct purchase arrangements with each of the Initial Special Purchasers (as defined in APPENDIX A hereto). For additional information on the 2013 Direct Purchase Bonds, including certain special rights and features relating to the 2013 Direct Purchase Bonds, see “SECURITY FOR THE 2016A BONDS – Outstanding Bonds and Other Debt” and APPENDIX A – “THE LOS ANGELES COUNTY MUSEUM OF ART – SELECTED FINANCIAL INFORMATION – Outstanding Debt.”

Pursuant to the Indenture and the Continuing Covenant Agreements, as amended, the 2013 Direct Purchase Bonds will be subject to mandatory tender for purchase on July 31, 2020, which is expected to be concurrent with the Scheduled Mandatory Tender Date with respect to the 2016A Bonds and, if issued, the 2016B Bonds. If no remarketing proceeds are available to pay the purchase price of the 2013 Direct Purchase Bonds due on July 31, 2020, the Corporation is obligated to pay such purchase price in full on such date from other available funds of the Corporation. (During the Initial Index Mode Rate Period, the Corporation has no such obligation to purchase any 2016A Bonds on the Scheduled Mandatory Tender Date with its own funds, and the Tender Price with respect to 2016A Bonds subject to purchase on the Scheduled Mandatory Tender Date will be paid only if sufficient moneys derived from the successful remarketing of such 2016A Bonds are available to effect such purchase.) If the Corporation pays the Tender Price with respect to the 2013 Direct Purchase Bonds from its own funds and not from remarketing proceeds, then the Corporation may experience a substantial decline in its cash and investments on and after July 31, 2020. Further, the 2013 Direct Purchase Bonds may be converted to another Mode at the election of the Corporation on or before July 31, 2020 which may be on substantially different terms and conditions.

The Corporation has entered into a Continuing Covenant Agreement with each Initial Special Purchaser. Pursuant to the terms of each Continuing Covenant Agreement, the Corporation made representations and warranties and agreed to certain covenants and events of default that are different than the representations and warranties and covenants of the Corporation under the Loan Agreement. These covenants include: covenants limiting additional indebtedness of the Corporation unless certain financial tests are satisfied, covenants limiting the creation of liens by the Corporation, a covenant to maintain the UNA Ratio (which is described above under “SECURITY FOR THE 2016A BONDS – Collateral Account and Intercreditor Agreement”) at 0.73, covenants limiting asset dispositions, covenants limiting investments, and other covenants and agreements. These covenants and any other provisions of the Continuing Covenant Agreements may be amended, waived or eliminated at any time by the parties thereto and without notice to, or consent of, the Holders of the 2016A Bonds.

The terms of the Indenture and the Loan Agreement provide certain special rights to the Special Purchasers (generally, the Holder or Holders of a majority of the principal amount of a particular Series of Bonds in the Direct Purchase Mode) and the Requisite Special Parties (generally, Special Purchasers representing in excess of 66-2/3% of the 2013 Direct Purchase Bonds while in the Direct Purchase Mode). Each of the Initial Special Purchasers is currently the Special Purchaser for the Series of Bonds it holds. As a consequence of such special rights provided to the Special Purchasers and the Requisite Special Parties, the rights of the Holders of the 2016A Bonds may be limited in important ways. For example, under the terms of the Indenture, the consent of the Requisite Special Parties is required before any Bonds (including the 2016A Bonds) are accelerated. However, the Indenture does provide that if any of the 2013 Direct Purchase Bonds or other Bonds are accelerated, all of the Bonds (including the 2016A Bonds) will automatically and immediately be accelerated. Further, the Holders of the 2016A Bonds have no right to require the Corporation to transfer its cash and investments to the Collateral Account.

These special rights granted to the Special Purchasers and the Requisite Special Parties described herein and are not contingent on the Special Purchasers being the holders of any specified percentage of the total Bonds outstanding; therefore, even if the 2016B Bonds are issued and the purchase of the Purchased Bonds reduces the relative percentage of 2013 Direct Purchase Bonds substantially (as compared to all

outstanding Bonds), the special rights described herein will remain in place and will not be diminished or in any way altered as a result.

General Risks of Existing Debt and Future Debt

Under the Loan Agreement, the Corporation is permitted to incur additional debt. See APPENDIX C –”SUMMARY OF PRINCIPAL DOCUMENTS – INDENTURE, AS SUPPLEMENTED – Issuance of Additional Bonds” and “– LOAN AGREEMENT, AS SUPPLEMENTED – Payment of Bonds and Financial Contracts.” The Corporation currently has plans (subject to certain conditions) to incur specific additional debt, as described herein. See “SECURITY FOR THE 2016A BONDS – Outstanding Bonds and Other Debt.”

The Corporation’s indebtedness (whether or not any additional indebtedness is incurred after the issuance of the 2016A Bonds) could have a material effect on the Corporation’s operations, which may, among other things:

• Limit the Corporation’s ability to borrow additional amounts for working capital, capital expenditures, acquisitions, debt service requirements and other purposes;

• Require the Corporation to dedicate a significant portion of its cash flow to pay principal and interest on the 2016A Bonds and its other debt, which will reduce the funds available for working capital, capital expenditures and other general administrative and educational purposes;

• Require the Corporation to pay principal and interest on any such other debt before the principal or interest on the 2016A Bonds is due, which may reduce the amount of cash and investments the Corporation would have to pay principal and interest on the 2016A Bonds; and

• Limit the Corporation’s ability to plan for and react to changes in its business and industry thereby making the Corporation more vulnerable to adverse changes in general economic, industry and competitive conditions.

Any of the above listed factors could have a material adverse effect on the financial condition of the Corporation and its ability to make debt service payments sufficient to pay the principal and interest on the 2016A Bonds when due or at all. Further, the 2016A Bonds include the risks inherent in debt that is subject to mandatory tender for purchase, which include the risk of whether the Corporation will have market access needed to remarket such debt and, in the event of a failed remarketing, significant increases in payment obligations as a result of step-ups in interest rates and accelerated requirements to pay principal.

Investment of Funds Risk

The Corporation invests its money pursuant to investment policies adopted by its Board of Trustees from time to time. See APPENDIX A – “THE LOS ANGELES COUNTY MUSEUM OF ART – ENDOWMENT AND INVESTMENTS” and the financial statements of the Corporation attached as APPENDIX B for a summary of the investments of the Corporation as of the date of such financial statements. All investments contain a degree of risk. Such risks include, but are not limited to, a lower rate of return than expected, loss of market value and loss or delayed receipt of principal. The occurrence of these events with respect to amounts held under the Indenture or by the Corporation could have a material adverse effect on the Corporation’s financial condition.

Fundraising

In the fiscal year ended June 30, 2016, the Corporation received approximately 24% of its annual operating budget from private gifts and grants and used these amounts to support its general activities, including making loan payments. Fundraising results are difficult to project with precision as a result of a

variety of factors, including the voluntary nature of charitable giving, the effect of the general and local economy on giving, the effectiveness of the marketing of a fundraising campaign, the deductibility of the gifts under federal income tax rules and many other factors.

Claims and Insurance Coverage

The insurance requirements imposed by the Loan Agreement are limited, and insurance proceeds may not be available to cover all claims or risks relating to the Corporation’s facilities or the Corporation. Litigation could arise from the business activities of the Corporation, including from its status as an employer. Many of these risks are covered by insurance, but some may not be covered.

Pursuant to the Loan Agreement, the Corporation agrees that so long as any Bonds remain Outstanding, the Corporation will maintain or cause to be maintained with respect to its facilities, with insurance companies or by means of self-insurance, insurance of such type, against such risks and in such amounts as are customarily carried by museums located in the State of a nature similar to that of the Corporation, which insurance shall include property damage, fire and extended coverage, public liability and property damage liability insurance. However, the Corporation is not obligated to maintain earthquake or flood insurance on its Property, and the Corporation can give no assurance that it will carry such insurance. The Corporation’s property insurance policies currently do not include any coverage for damages caused by earthquake, except for fire or flood following an earthquake. See APPENDIX A – “THE LOS ANGELES COUNTY MUSEUM OF ART – OTHER PERTINENT INFORMATION – Insurance.” Future increases in insurance premiums and future limitations on the availability of certain types of insurance coverage could have an adverse impact on the Corporation’s financial condition and operations.

Natural Disasters and Other Catastrophic Events

Potential natural and environmental conditions may adversely affect the Corporation. The Museum is located in close proximity to various mapped earthquake faults. In addition, the Museum may also be at risk from other events, such as damaging storms, floods, fires and explosions, sabotage, terrorism, riots and spills of hazardous substances. Any of these events could materially impair the ability of the Museum to operate, which could materially reduce the amounts that the Corporation receives from the County, donations from the Corporation’s annual fundraising and other campaigns and revenues from memberships and admissions to the Museum. Any of these events could adversely affect the Corporation’s ability to make timely payments of principal and interest on the 2016A Bonds.

Competition

Attendance at the Museum will be affected by competition from other cultural and entertainment venues and activities in the County and greater Southern California. There are numerous other art and cultural programs in the County providing programs which could compete with the Museum. Competition from other art and cultural institutions could affect the Corporation’s fundraising efforts, as many of these institutions are actively seeking donations.

Tax-Exempt Status

Tax-Exempt Status of Interest on the 2016A Bonds. The Code imposes a number of requirements that must be satisfied for interest on state and local obligations, such as the 2016A Bonds, to be excludable from gross income for federal income tax purposes. These requirements include limitations on the use of 2016A Bond proceeds, limitations on the investment earnings of 2016A Bond proceeds prior to expenditure, a requirement that certain investment earnings on 2016A Bond proceeds be paid periodically to the United States and a requirement that issuers file an information report with the Internal Revenue Service (the “IRS”). Each of the Infrastructure Bank and the Corporation have covenanted in certain of the documents referred to herein, to the extent within its control, that it will comply with such requirements. Failure by the Corporation to

comply with the requirements stated in the Code and related regulations, rulings and policies may result in the treatment of interest on the 2016A Bonds as taxable, retroactively to the date of original issuance of the 2016A Bonds.

The Corporation has not sought to obtain a private letter ruling from the IRS with respect to the 2016A Bonds, and the opinion of Hawkins Delafield & Wood LLP is not binding on the IRS. There is no assurance that an IRS examination of the 2016A Bonds will not adversely affect the market value of the 2016A Bonds. See “TAX MATTERS.”

Tax-Exempt Status of the Corporation. The tax-exempt status of interest on the 2016A Bonds presently depends upon the maintenance by the Corporation of its status as an organization described in Section 501(c)(3) of the Code. The maintenance of the Corporation’s status as such an organization is contingent upon compliance with general rules promulgated in the Code and related regulations regarding the organization and operation of tax-exempt entities, including their operation for charitable purposes and their avoidance of transactions which may cause their earnings or assets to inure to the benefit of private individuals. Compliance with the general rules for tax-exempt entities requires a high level of administrative oversight.

As a result of on-going IRS audit programs, tax-exempt organizations are increasingly subjected to a high level of scrutiny. One penalty available to the IRS under the Code with respect to a tax-exempt charity engaged in unlawful, private benefit or political activity is the revocation of tax-exempt status. Loss of tax- exempt status of the Corporation would most likely result in loss of tax exemption of interest on the 2016A Bonds and of the Corporation’s other tax-exempt debt. Loss of tax-exempt status of the Corporation would also have material adverse consequences on the financial condition of the Corporation.

Unrelated Business Income. In recent years, the IRS, the State of California, county and local taxing authorities have been undertaking audits and reviews of the operations of tax-exempt organizations with respect to their exempt activities and the generation of unrelated business taxable income (“UBTI”). The Corporation has historically generated UBTI, and is expected to participate in activities which generate UBTI in the future. Management of the Corporation believes it has properly accounted for and reported UBTI; nevertheless, an investigation or audit could lead to a challenge which could result in taxes, interest and penalties with respect to unreported UBTI and in some cases could ultimately affect the tax-exempt status of the Corporation as well as the exclusion from gross income for federal income tax purposes of the interest on the 2016A Bonds and other present and future tax-exempt debt of the Corporation, if any.

Bankruptcy and Enforcement of Remedies

The remedies available to the Trustee or the Bondholders upon an Event of Default under the Indenture or under the Loan Agreement are in many respects dependent upon judicial actions that are often subject to discretion and delay, and such remedies may not be readily available or may be limited. In particular, under the United States Bankruptcy Code, a bankruptcy case may be filed with respect to the Corporation. In general, the filing of any such petition operates as a stay against enforcement of the terms of the agreements to which the bankrupt entity is a party, and, in the bankruptcy process, executory contracts such as the Loan Agreement or the Indenture may be subject to assumption or rejection by the bankrupt party. In the event of any such rejection, the non-rejecting party or its assigns may become an unsecured claimant of the rejecting party. The various legal opinions to be delivered concurrently with the 2016A Bonds (including Bond Counsel’s approving opinion) will be qualified, as to the enforceability of the various legal instruments, by limitations imposed by bankruptcy, reorganization, insolvency or other similar laws affecting the rights of creditors generally and by general principles of equity applied in the exercise of judicial discretion.

LONG-TERM DEBT SERVICE REQUIREMENTS

The following table shows the estimated scheduled debt service payments on the 2016A Bonds and other outstanding long-term indebtedness of the Corporation upon issuance of the 2016A Bonds, beginning with fiscal year 2016-17:

Aggregate Principal Aggregate Interest Payments Relating to Payments Relating to the 2016A Bonds, the the 2016A Bonds, the 2013A Bonds and the 2013A Bonds and the Fiscal Year 2013 Direct Purchase 2013 Direct Purchase Total Debt Ending June 30 Bonds* Bonds(1) Service(2)

2017 – 2018 – 2019 – 2020 – 2021 – 2022 – 2023 – 2024 – 2025 – 2026 – 2027 – 2028 – 2029 – 2030 – 2031 $ 15,990,000 2032 24,185,000 2033 24,425,000 2034 55,680,000 2035 55,680,000 2036 55,680,000 2037 55,680,000 2038 55,680,000 Total $ 343,000,000

* Preliminary, subject to change. (1) Projected interest costs on the Bonds are calculated based on the 20-year average of the current applicable percentage of 1- month LIBOR plus the current applicable credit spread for each Series of Bonds. The interest payments above also reflect the fixed payment and variable receipt related to the swap (see “SECURITY FOR THE 2016A BONDS – Outstanding Bonds and Other Debt”). The swap variable receipt assumes the 20-year average of 59.5% of 1-month LIBOR plus 0.30%. Actual debt service payments may vary significantly. (2) Debt service payments exclude debt service payments with respect to the Purchased Bonds after the date of issuance of the 2016A Bonds.

FORWARD-LOOKING STATEMENTS

Certain statements included or incorporated by reference in this Official Statement constitute “forward-looking statements.” Such statements are generally identifiable by the terminology used such as “plan,” “expect,” “estimate,” “budget,” “intend,” “projection” or other similar words.

The achievement of results or other expectations contained in such forward-looking statements involve known and unknown risks, uncertainties and other factors (including, but not limited to, the risks described under the heading “CERTAIN INVESTMENT CONSIDERATIONS”) which may cause actual results, performance or achievements described to be materially different from any future results, performance or achievements expressed or implied by such forward-looking statements. Neither the Infrastructure Bank nor the Corporation plans to issue any updates or revisions to such forward-looking statements if or when expectations, or events, conditions or circumstances on which such forward-looking statements are based occur.

TAX MATTERS

Opinion of Bond Counsel

In the opinion of Hawkins Delafield & Wood LLP, Bond Counsel to the Infrastructure Bank, under existing statutes and court decisions and assuming continuing compliance with certain tax covenants described herein, (i) interest on the 2016A Bonds is excluded from gross income for Federal income tax purposes pursuant to Section 103 of the Internal Revenue Code of 1986, as amended (the “Code”), and (ii) interest on the 2016A Bonds is not treated as a preference item in calculating the alternative minimum tax imposed on individuals and corporations under the Code; such interest, however, is included in the adjusted current earnings of certain corporations for purposes of calculating the alternative minimum tax imposed on such corporations. In rendering its opinion, Bond Counsel has relied on certain representations, certifications of fact, and statements of reasonable expectations made by the Infrastructure Bank and the Corporation in connection with the 2016A Bonds, and Bond Counsel has assumed compliance by the Infrastructure Bank and the Corporation with certain ongoing covenants to comply with applicable requirements of the Code to assure the exclusion of interest on the 2016A Bonds from gross income under Section 103 of the Code. In addition, in rendering its opinion, Bond Counsel has relied on the opinion of counsel to the Corporation regarding, among other matters, the current qualification of the Corporation as an organization described in Section 501(c)(3) of the Code.

In addition, in the opinion of Bond Counsel to the Infrastructure Bank, under existing statutes, interest on the 2016A Bonds is exempt from State of California personal income tax.

Bond Counsel expresses no opinion regarding any other Federal or state tax consequences with respect to the 2016A Bonds. Bond Counsel renders its opinion under existing statutes and court decisions as of the issue date, and assumes no obligation to update, revise or supplement its opinion to reflect any action hereafter taken or not taken, or any facts or circumstances that may hereafter come to its attention, or changes in law or in interpretations thereof that may hereafter occur, or for any other reason. Bond Counsel expresses no opinion on the effect of any action hereafter taken or not taken in reliance upon an opinion of other counsel on the exclusion from gross income for Federal income tax purposes of interest on the 2016A Bonds, or under state and local tax law.

Certain Ongoing Federal Tax Requirements and Covenants

The Code establishes certain ongoing requirements that must be met subsequent to the issuance and delivery of the 2016A Bonds in order that interest on the 2016A Bonds be and remain excluded from gross income under Section 103 of the Code. These requirements include, but are not limited to, requirements relating to use and expenditure of gross proceeds of the 2016A Bonds, yield and other restrictions on

investments of gross proceeds, and the arbitrage rebate requirement that certain excess earnings on gross proceeds be rebated to the Federal government. Noncompliance with such requirements may cause interest on the 2016A Bonds to become included in gross income for Federal income tax purposes retroactive to their issue date, irrespective of the date on which such noncompliance occurs or is discovered. Each of the Infrastructure Bank and the Corporation has covenanted, to the extent within its control, to comply with certain applicable requirements of the Code to assure the exclusion of interest on the 2016A Bonds from gross income under Section 103 of the Code.

Certain Collateral Federal Tax Consequences

The following is a brief discussion of certain collateral Federal income tax matters with respect to the 2016A Bonds. It does not purport to address all aspects of Federal taxation that may be relevant to a particular owner of a 2016A Bond. Prospective investors, particularly those who may be subject to special rules, are advised to consult their own tax advisors regarding the Federal tax consequences of owning and disposing of the 2016A Bonds.

Prospective owners of the 2016A Bonds should be aware that the ownership of such obligations may result in collateral Federal income tax consequences to various categories of persons, such as corporations (including S corporations and foreign corporations), financial institutions, property and casualty and life insurance companies, individual recipients of Social Security and railroad retirement benefits, individuals otherwise eligible for the earned income tax credit, and taxpayers deemed to have incurred or continued indebtedness to purchase or carry obligations the interest on which is excluded from gross income for Federal income tax purposes. Interest on the 2016A Bonds may be taken into account in determining the tax liability of foreign corporations subject to the branch profits tax imposed by Section 884 of the Code.

Bond Premium

In general, if an owner acquires a 2016A Bond for a purchase price (excluding accrued interest) or otherwise at a tax basis that reflects a premium over the sum of all amounts payable on the 2016A Bond after the acquisition date (excluding certain “qualified stated interest” that is unconditionally payable at least annually at prescribed rates), that premium constitutes “bond premium” on that 2016A Bond (a “Premium Bond”). In general, under Section 171 of the Code, an owner of a Premium Bond must amortize the bond premium over the remaining term of the Premium Bond, based on the owner's yield over the remaining term of the Premium Bond, determined based on constant yield principles (in certain cases involving a Premium Bond callable prior to its stated maturity date, the amortization period and yield may be required to be determined on the basis of an earlier call date that results in the lowest yield on such bond). An owner of a Premium Bond must amortize the bond premium by offsetting the qualified stated interest allocable to each interest accrual period under the owner's regular method of accounting against the bond premium allocable to that period. In the case of a tax-exempt Premium Bond, if the bond premium allocable to an accrual period exceeds the qualified stated interest allocable to that accrual period, the excess is a nondeductible loss. Under certain circumstances, the owner of a Premium Bond may realize a taxable gain upon disposition of the Premium Bond even though it is sold or redeemed for an amount less than or equal to the owner's original acquisition cost. Owners of any Premium Bonds should consult their own tax advisors regarding the treatment of bond premium for Federal income tax purposes, including various special rules relating thereto, and state and local tax consequences, in connection with the acquisition, ownership, amortization of bond premium on, sale, exchange, or other disposition of Premium Bonds.

Information Reporting and Backup Withholding

Information reporting requirements apply to interest paid on tax-exempt obligations, including the 2016A Bonds. In general, such requirements are satisfied if the interest recipient completes, and provides the payor with, a Form W-9, “Request for Taxpayer Identification Number and Certification,” or if the recipient is one of a limited class of exempt recipients. A recipient not otherwise exempt from information reporting who

fails to satisfy the information reporting requirements will be subject to “backup withholding,” which means that the payor is required to deduct and withhold a tax from the interest payment, calculated in the manner set forth in the Code. For the foregoing purpose, a “payor” generally refers to the person or entity from whom a recipient receives its payments of interest or who collects such payments on behalf of the recipient.

If an owner purchasing a 2016A Bond through a brokerage account has executed a Form W-9 in connection with the establishment of such account, as generally can be expected, no backup withholding should occur. In any event, backup withholding does not affect the excludability of the interest on the 2016A Bonds from gross income for Federal income tax purposes. Any amounts withheld pursuant to backup withholding would be allowed as a refund or a credit against the owner’s Federal income tax once the required information is furnished to the Internal Revenue Service.

Miscellaneous

Tax legislation, administrative actions taken by tax authorities, or court decisions, whether at the Federal or state level, may adversely affect the tax-exempt status of interest on the 2016A Bonds under Federal or state law or otherwise prevent beneficial owners of the 2016A Bonds from realizing the full current benefit of the tax status of such interest. In addition, such legislation or actions (whether currently proposed, proposed in the future, or enacted) and such decisions could affect the market price or marketability of the 2016A Bonds. For example, budgets proposed by the Obama Administration from time to time have recommended a 28% limitation on certain itemized deductions and other tax benefits including tax-exempt interest. The net effect of such proposal, if enacted into law, would be that an owner of a tax-exempt bond with a marginal tax rate in excess of 28% would pay some amount of federal income tax with respect to the interest on such tax- exempt bond, regardless of issue date.

Prospective purchasers of the 2016A Bonds should consult their own tax advisors regarding the foregoing matters.

ABSENCE OF MATERIAL LITIGATION

The Infrastructure Bank

To the current actual knowledge of the Infrastructure Bank, without independent investigation, there is no action, suit, proceeding, inquiry or investigation at law or in equity or before any court, public board, or body, pending or threatened against the Infrastructure Bank seeking to restrain or enjoin the issuance or delivery of the 2016A Bonds, or contesting the validity of the 2016A Bonds or the proceedings or authority under which the 2016A Bonds are to be issued. To the current actual knowledge of the Infrastructure Bank, without independent investigation, there is no action, suit, proceeding, inquiry or investigation at law or in equity or before any court, public board, or body, pending or threatened against the Infrastructure Bank, which contests the creation, organization or existence of the Infrastructure Bank, the right of any of the present officers of the Infrastructure Bank to their respective offices, the right of the Infrastructure Bank to enter into the Indenture, the Loan Agreement, the Purchase Agreement (as defined herein) or to secure the 2016A Bonds in the manner provided in the Indenture, or the resolution of the Infrastructure Bank approving the issuance of the 2016A Bonds.

The Corporation

There is no litigation pending against the Corporation concerning the sale, delivery or validity of the 2016A Bonds or pending against the Corporation which if determined adversely to the Corporation would have a material adverse effect on the financial position of the Corporation.

UNDERWRITING

Pursuant to a bond purchase agreement (the “Purchase Agreement”) by and among the Infrastructure Bank, the Treasurer of the State of California (as agent for sale), and Wells Fargo Bank, National Association (the “Underwriter”), and approved by the Corporation, the Underwriter has agreed to purchase the 2016A Bonds at a purchase price of $______(representing the aggregate principal amount of the 2016A Bonds, plus an original issue premium of $______) and an underwriter’s fee of $______, which will be paid directly by the Corporation as part of costs of issuance with respect to the 2016A Bonds.

Wells Fargo Bank, National Association is serving as both underwriter and remarketing agent for the 2016A Bonds and will be compensated separately for serving in each capacity. See “THE 2016A BONDS – Remarketing Agent and Tender Agent.” In connection with the issuance of the 2016A Bonds, the Underwriter has also assisted the Corporation with the purchase arrangements with respect to the Purchased Bonds and will be paid a separate fee of $______by the Corporation in connection therewith.

The Underwriter is purchasing the 2016A Bonds and intends to offer the 2016A Bonds to the original purchasers thereof at the offering price set forth on the page after the inside cover of this Official Statement, which offering price may subsequently be changed without any requirement of prior notice. The Underwriter may offer and sell the 2016A Bonds to dealers and others at a price lower than the initial offering price. The Purchase Agreement provides that the Underwriter will purchase all of the 2016A Bonds if any 2016A Bonds are purchased and that the obligation to make such purchase is subject to the terms and conditions set forth therein.

Wells Fargo Bank, National Association, acting through its Municipal Products Group (“WFBNA”), Underwriter of the 2016A Bonds, has entered into an agreement (the “WFA Distribution Agreement”) with its affiliate, Wells Fargo Advisors, LLC (“WFA”), for the distribution of certain municipal securities offerings, including the 2016A Bonds. Pursuant to the WFA Distribution Agreement, WFBNA will share a portion of its underwriting or remarketing agent compensation, as applicable, with respect to the 2016A Bonds with WFA. WFBNA has also entered into an agreement (the “WFSLLC Distribution Agreement”) with its affiliate, Wells Fargo Securities, LLC (“WFSLLC”), for the distribution of municipal securities offerings, including the 2016A Bonds. Pursuant to the WFSLLC Distribution Agreement, WFBNA pays a portion of WFSLLC’s expenses based on its municipal securities transactions. WFBNA, WFSLLC, and WFA are each wholly-owned subsidiaries of Wells Fargo & Company.

Wells Fargo Securities is the trade name for certain securities-related capital markets and investment banking services of Wells Fargo & Company and its subsidiaries, including Wells Fargo Bank, National Association, which conducts its municipal securities sales, trading and underwriting operations through the Wells Fargo Bank, NA Municipal Products Group, a separately identifiable department of Wells Fargo Bank, National Association, registered with the Securities and Exchange Commission as a municipal securities dealer pursuant to Section 15B(a) of the Securities Exchange Act of 1934.

Certain subsidiaries of Wells Fargo & Company (parent company of Wells Fargo Bank, National Association, Underwriter for the 2016A Bonds) have provided, from time to time, investment banking services, commercial banking services or advisory services to the Corporation, for which they have received customary compensation. Wells Fargo & Company or its respective subsidiaries may, from time to time, engage in transactions with and perform services for the Corporation in the ordinary course of their respective businesses. See also “CERTAIN RELATIONSHIPS.”

APPROVAL OF LEGALITY

The validity of the 2016A Bonds and certain other legal matters are subject to the approving opinion of Hawkins Delafield & Wood LLP, Bond Counsel to the Infrastructure Bank. A complete copy of the proposed form of the opinion to be delivered by Bond Counsel is contained in APPENDIX D – “FORM OF

BOND COUNSEL OPINION.” Bond Counsel undertakes no responsibility for the accuracy, completeness or fairness of this Official Statement. Certain legal matters will be passed upon for the Infrastructure Bank by its General Counsel, for the Corporation by its General Counsel and by its special counsel, Nixon Peabody LLP, and for the Underwriter by its counsel O’Melveny & Myers LLP.

RATING

The 2016A Bonds have been assigned a rating of “A3” by Moody’s Investors Service (“Moody’s”). Such rating reflects only the views of Moody’s. An explanation of the significance of the rating must be obtained from Moody’s. There is no assurance that such rating will continue for any given period of time or will not be revised downward or withdrawn entirely by Moody’s if, in the judgment of Moody’s, circumstances so warrant. A downward revision or withdrawal of any such credit rating may have an adverse effect on the market price and marketability of the 2016A Bonds.

CONTINUING DISCLOSURE

Pursuant to the Continuing Disclosure Agreement dated as of November 1, 2016 (the “Continuing Disclosure Agreement”), by and between the Corporation and U.S. Bank National Association, as dissemination agent (the “Dissemination Agent”), the Corporation has undertaken all responsibilities for any continuing disclosure to Bondholders as described below, and the Infrastructure Bank will have no liability to the Holders of the 2016A Bonds or any other person with respect to Rule 15c2-12 (the “Rule”) promulgated by the Securities and Exchange Commission. The Infrastructure Bank has not undertaken any continuing disclosure obligations with respect to the 2016A Bonds and has no duty to enforce the Corporation’s undertakings pursuant to the Continuing Disclosure Agreement.

Pursuant to the Continuing Disclosure Agreement, the Corporation has covenanted for the benefit of the Holders and Beneficial Owners of the 2016A Bonds to provide to the Dissemination Agent for dissemination certain financial information and operating data relating to the Corporation (the “Annual Report”) no later than 120 days after the end of each fiscal year of the Corporation (which fiscal year currently begins on July 1 of each year and ends on the next succeeding June 30), and to provide to the Dissemination Agent for dissemination certain other reports and notices of the occurrence of certain enumerated events. These covenants have been made in order to assist the Underwriter of the 2016A Bonds in complying with the Rule.

The Annual Report, certain other reports and notices of enumerated events will be filed by the Corporation or the Dissemination Agent on behalf of the Corporation with the Municipal Securities Rulemaking Board, through its Electronic Municipal Market Access (“EMMA”) system. In the last five years, the Corporation has not failed in any material respect to comply with any previous undertaking with regard to the Rule. See APPENDIX E – “CONTINUING DISCLOSURE AGREEMENT.”

CERTAIN RELATIONSHIPS

In addition to Wells Fargo Bank, National Association serving as the underwriter and remarketing agent for the 2016A Bonds and assisting the Corporation with the Corporation’s purchase of the Purchased Bonds as described under “UNDERWRITING”:

(i) a portion of the 2013A Bonds are owned by one or more mutual funds advised by Wells Capital Management Incorporated, an affiliate of Wells Fargo Bank, National Association;

(ii) Wells Fargo Municipal Capital Strategies, LLC, a subsidiary of Wells Fargo Bank, National Association, purchased the 2013B Bonds and therefore is currently one of the Special Purchasers described herein (see “CERTAIN INVESTMENT CONSIDERATIONS – Impact of the 2013 Direct Purchase Bonds, Including Limitation on Acceleration”); and

(iii) Wells Fargo Bank, National Association has entered into the Swap Agreement with the Corporation (see “CERTAIN INVESTMENT CONSIDERATIONS – Risks to the Corporation under the Swap Agreement”).

MISCELLANEOUS

Any statements made in this Official Statement involving estimates or matters of opinion, whether or not so expressly stated, are set forth as such and not as representations of fact, and no representation is made that any of the estimates or matters of opinion will be realized. Neither this Official Statement nor any statement that may have been made orally or in writing is to be construed as a contract with the Owners or the Beneficial Owners of the 2016A Bonds.

The Infrastructure Bank has duly authorized the distribution of this Official Statement in connection with the offering of the 2016A Bonds. The Corporation has duly authorized the execution, delivery and distribution of this Official Statement in connection with the offering of the 2016A Bonds. The Infrastructure Bank makes no representations or warranties whatsoever with respect to any statement or information contained herein except for information contained in the sections entitled “THE INFRASTRUCTURE BANK” and “ABSENCE OF MATERIAL LITIGATION – The Infrastructure Bank.”

The execution and delivery of this Official Statement has been duly authorized by the Corporation.

MUSEUM ASSOCIATES

Chief Financial Officer

27 [THIS PAGE INTENTIONALLY LEFT BLANK]

APPENDIX A

THE LOS ANGELES COUNTY MUSEUM OF ART

TABLE OF CONTENTS

Page

OVERVIEW ...... A-1 The Museum...... A-1 Museum Associates ...... A-3 Mission Statement ...... A-3 LACMA’s Programs ...... A-3 Relationship with the County of Los Angeles ...... A-10

GOVERNANCE AND MANAGEMENT...... A-13 Board of Trustees ...... A-13 Senior Management ...... A-27 Code of Ethics ...... A-29

MEMBERSHIP AND ADMISSIONS ...... A-29 Overview ...... A-29 Membership ...... A-29 Attendance and Admission Revenues ...... A-30

GIFTS AND FUNDRAISING CAMPAIGNS ...... A-31 Gifts ...... A-31 Fundraising Campaign; Strategic Planning ...... A-33

ENDOWMENT AND INVESTMENTS ...... A-33 Overview ...... A-33 Management of Investments ...... A-34 Investment Policy ...... A-34

SELECTED FINANCIAL INFORMATION ...... A-35 Financial Data ...... A-36 Outstanding Debt ...... A-42 Authorization and Use of Proceeds of 2016B Bonds; Possible Additional Indebtedness ...... A-43 Swap Agreement ...... A-43

OTHER PERTINENT INFORMATION...... A-44 Employees ...... A-44 Volunteers ...... A-44 Litigation ...... A-44 Insurance ...... A-44

A-i

THE LOS ANGELES COUNTY MUSEUM OF ART

OVERVIEW

The Museum

General. With more than 130,000 objects dating from ancient times to the present, the Los Angeles County Museum of Art (“LACMA” or the “Museum”) is the largest art museum in the western United States. A museum of international stature as well as a vital part of Southern California’s cultural fabric, LACMA shares its vast collections through exhibitions, public programs and research facilities that attract over a million visitors annually.

LACMA’s seven-building campus is located in the heart of Los Angeles, halfway between the Pacific Ocean and downtown. The campus has recently completed a ten-year expansion and renovation known as the Transformation Project (discussed in greater detail below under “The Transformation Project”).

LACMA’s collections encompass the geographic world and virtually the entire history of art. Among the Museum’s special strengths are its holdings of Asian art, housed in part in the Bruce Goff-designed Pavilion for Japanese Art; Latin American art, ranging from pre-Columbian masterpieces to works by leading modern and contemporary artists including Diego Rivera, Frida Kahlo and José Clemente Orozco; and Islamic art, of which LACMA hosts one of the most significant collections in the world.

In April 2006, Michael Govan became CEO and Wallis Annenberg Director of LACMA. Formerly president and director of Dia Art Foundation and deputy director of the Solomon R. Guggenheim Museum, Mr. Govan is the seventh director in LACMA’s fifty-one-year history. In June 2016, LACMA renewed Mr. Govan’s contract for an additional ten years, beginning July 1, 2016 and running through June 30, 2026.

History. LACMA has its roots in the Los Angeles Museum of History, Science and Art, established in 1913 in Exposition Park. In 1961, the Los Angeles County Museum of Art was established as a separate, art-focused institution. In 1965, the fledgling institution opened to the public in its new Wilshire Boulevard location, with the permanent collection in the Ahmanson Building, special exhibitions in the Hammer Building, and public programs in the 600-seat Bing Theater.

Over several decades, the campus and the collection have grown considerably. The Anderson Building (renamed the Art of the Americas building in 2007) opened in 1986 to house modern and contemporary art. In 1988, Bruce Goff's innovative Pavilion for Japanese Art opened at the east end of campus.

The Museum is comprised of the East Campus and the West Campus. The Museum’s East Campus currently consists of five buildings: the Ahmanson Building, featuring much of LACMA’s permanent collections; the Hammer Building, which houses galleries for LACMA’s permanent collections of Korean art, Chinese art, art of the ancient world, African art, and photography, the Boone Children’s Gallery, and the Conservation Center; the Leo S. Bing Center, which includes the 600-seat Bing Theater, the 99-seat Brown Auditorium and the LACMA Cafe; the Art of the Americas building, featuring special exhibitions and art from LACMA’s permanent collection of art of the Americas; and the Pavilion for Japanese Art, housing LACMA’s collection of Japanese artworks. The County of Los Angeles (the “County”) owns the East Campus land and facilities. For a description of the County’s involvement in the development and support of the Museum, see “Relationship with the County of Los Angeles” below.

The Renzo Piano designed West Campus includes the Broad Contemporary Art Museum building, opened in 2008; the Lynda and Stewart Resnick Exhibition Pavilion, opened in 2010; the Pritzker parking garage; the BP Grand Entrance; Ray’s and Stark restaurant and bar; and the significant outdoor art installations of Urban Light and Levitated Mass. These West Campus facilities were built in connection with LACMA’s

A-1 Transformation Project, described below. The West Campus also includes LACMA West, the former May Company Department Store Building, which was listed as an Historic Cultural Monument in the City of Los Angeles in 1992 and leased in 2014 to the Academy of Motion Pictures Arts and Sciences for the creation of a museum devoted to film. The West Campus land and facilities are owned by Museum Associates (described below).

The Transformation Project. LACMA completed its Transformation Project in 2012. The Transformation Project is comprised of the following additions and improvements:

• the Broad Contemporary Art Museum building (“BCAM”), featuring approximately 60,000 square feet of gallery space situated along Wilshire Boulevard; • the Lynda and Stewart Resnick Exhibition Pavilion (the “Resnick Pavilion”), the largest purpose- built, naturally lit, open-plan museum space in the world, which provides a flexible 45,000 square foot space for special exhibitions; • Ray’s and Stark Bar, a restaurant and bar located within the BP Grand Entrance; • the BP Grand Entrance, housing periodic art installations, Ray’s and Stark Bar, ticketing, information and other visitor amenities; • the underground Pritzker Parking Garage, which accommodates more than 550 vehicles; • the Dona S. and Dwight M. Kendall Concourse, a loggia linking the East and West Campuses; • the installation of major public artworks and landscaping throughout the Museum campus, including work by Chris Burden (Urban Light), Robert Irwin (Palm Garden), Tony Smith (Smoke), and Michael Heizer (Levitated Mass); • significant upgrades to the Ahmanson Building atrium and galleries on the East Campus; and • increased capacity in LACMA’s central heating and cooling plant to provide power for the new facilities.

LACMA West. The Museum has leased LACMA West (the former May Company department store), and a portion of land on the West Campus to the north of that building to The Academy Foundation, an affiliate of the Academy of Motion Picture Arts and Sciences (“AMPAS”) for a term of 55 years, with an option on the part of AMPAS to extend the lease for an additional 55 years. AMPAS is leasing LACMA West for the creation of a motion picture arts and sciences museum. Designed by Renzo Piano, the project broke ground in 2016 and is planned to be completed in 2018.

Building for the Permanent Collection. LACMA’s plans to replace its aging permanent collection buildings are not included in this current 2016 refinancing. The scope, timing and proposed financing for that future project are described below.

The Building for the Permanent Collection would consist of one new museum building of approximately 368,000 gross square feet. It would replace four aging buildings within LACMA’s East campus (the Ahmanson Building, the Hammer Building, the Art of the Americas Building and the Leo S. Bing Center), which would be demolished. The project would also include a new parking facility on the Museum’s Ogden Drive property (owned by Museum Associates), where the Museum would relocate the parking spaces currently provided on the Spaulding Avenue parking lot. Los Angeles County filed a Notice of Preparation of an environmental impact report (“EIR”) for this project on August 4, 2016. The proposed timeline for the project would be to continue design and planning through 2018, break ground in late 2018 or early 2019 and complete the building and parking facility in 2023.

The cost of the Building for the Permanent Collection is estimated to be $600 million plus a contingency of $50 million. The County of Los Angeles (the “County”) has agreed to provide a contribution

A-2 of $125 million once the County has approved the EIR, with Museum Associates raising the remaining funds from private donations. The County provided an advance of $7.5 million on its contribution of $125 million for planning and EIR related costs. Museum Associates would need to repay the $7.5 million if the project EIR is not approved by January 1, 2020. Also, the County has agreed to issue $300 million of debt using its own credit ratings (e.g., through lease revenue bonds) in approximately 2020, or 3 years prior to the completion of the new building, and lend the proceeds to the Museum to fund a portion of the costs for the Building for the Permanent Collection, provided the Museum has collected at least $175 million in private donations by the time of issuance. The Museum’s obligations to repay the $300 million loan from the County, and interest thereon, will be subordinate to the Bonds and funded with pledges from private donations paid over time.

Museum Associates

Museum Associates, a private nonprofit public benefit corporation organized under the laws of California, doing business as the Los Angeles County Museum of Art (“Museum Associates”), manages, operates and maintains the Museum and owns almost all of the Museum’s collections. Museum Associates also owns the West Campus facilities and land, plus several parcels of land across Wilshire Boulevard that have been used as parking lots for museum visitors, staff and volunteers. The lot at the corner of Wilshire Boulevard and Ogden Drive, currently owned by Museum Associates, is being used by the LA County Metropolitan Transportation Authority for staging for construction of a new subway station at Wilshire Boulevard and Fairfax Avenue.

Mission Statement

LACMA’s mission statement is: To serve the public through the collection, conservation, exhibition, and interpretation of significant works of art from a broad range of cultures and historical periods, and through the translation of these collections into meaningful educational, aesthetic, intellectual, and cultural experiences for the widest array of audiences.

LACMA’s Programs

LACMA carries out its mission and strategic goals through its collection, exhibition, conservation, education and research programs.

Collections. LACMA’s collections are not pledged to secure payment of the Bonds, including the 2016A Bonds, or any other obligations of LACMA or Museum Associates, and the Loan Agreement provides that there will be no recourse to LACMA’s art collections in connection with payment of the 2013A Bonds, the 2013 Direct Purchase Bonds, the 2016A Bonds or the 2016B Bonds. See “SECURITY FOR THE 2016A BONDS – Payments under the Loan Agreement” in this Official Statement.

LACMA’s collections comprise more than 130,000 paintings, sculptures, drawings, prints, photographs, costumes, textiles, decorative arts, film and video based works, and include works of art that are ranked among the finest in the country and the world in their respective categories. LACMA’s collections are intended to reflect the tremendous diversity of the communities the Museum serves, from the magnificently intricate work of The Ardabil Carpet to David Hockney’s vast and circuitous Mulholland Drive: The Road to the Studio.

LACMA has experienced a high rate of growth in its collections in recent years. Such growth is due in large part to LACMA’s strategic collecting activities. Major acquisitions during this period include: Miguel Cabrera’s 6. From Spaniard and Morisca, Albino Girl, 1763, a remarkable casta painting which portrays the complex process of racial mixing in new Spain and is the first work from this renowned set of sixteen paintings to enter a public institution in the United States; Portrait of a Gentleman, c. 1675, a sculpture by Giovanni Lorenzo Bernini, one of the most famous Baroque sculptors, painters, and architects of the

A-3 seventeenth century in Italy who is known for his works in St. Peter’s Basilica in the Vatican; Dancer with Necklace, 1910, by German Expressionist artist Ernst Ludwig Kirchner, a rare extant example of the artist’s work in sculpture, since a large portion of these works were lost or destroyed during the Nazi era; Red Concave Circle, 1970, by DeWain Valentine, a Light and Space artist working in Southern California, this sculpture is one of his largest scale disks with a diameter of eight feet; The Damascus Room, 1766-67, a period room that served as a reception space, where the head of the family entertained honored guests, such lavishly decorated rooms opened out to ornate stone courtyards in the well-to do homes of Damascus; The Marcel and Zaira Mis Sub-Saharan African Collection consists of 323 exemplary examples of visually compelling garments, impressive headwear, and captivating accessories representing over 50 African cultures; The Mark and Carolyn Blackburn Collection of Photography from Polynesia and Surfing History comprises over 5000 images and ranges in time from the 1860s to the present and includes the work of many notable photographers including Caroline and A.R. Gurrey, Arthur James Isles and Thomas Andrews.

Since LACMA only displays approximately 3% of its permanent collections at the Museum at any given time, LACMA established a lending program that allows museums throughout the world to showcase select artworks from LACMA’s permanent collections. During the last several years, LACMA has loaned its artworks to, among others, the National Gallery of Art in Washington D.C. (Edward Kienholz’ Back Seat Dodge ‘38), the Thyssen-Bornemisza Museum in Madrid (Pierre Auguste Renoir’s Jean as a Huntsman), The Museu Picasso in Barcelona (Pablo Picasso’s Portrait of Sebastia Juñer Vidal), the Centre Pompidou in Paris (René Magritte’s The Treachery of Images (This is Not a Pipe)), the Musée d'Orsay in Paris (Claude Monet’s The Beach at Honfleur), the National Museum of Modern Art in Kyoto (Mary Cassatt’s Mother About to Wash Her Sleepy Child), the National Gallery of Victoria in Melbourne (Edgar Degas’ The Bellelli Sisters (Giovanna and Giuliana Bellelli)), and the Museo del Prado in Madrid (Georges de la Tour’s The Magdalen with the Smoking Flame).

In addition, LACMA has the quality and depth in several areas to organize exhibitions drawn almost entirely from its collections for international tours. Examples of this include Robert Mapplethorpe: The Perfect Medium (Montreal Museum of Fine Arts, Montreal, Canada; Art Gallery of New South Wales, Sydney, Australia), Reigning Men: Fashion in Menswear, 1715–2015 (Powerhouse Museum, Sydney, Australia), India’s Universe: Masterworks of the Los Angeles County Museum of Art (The Shanxi Museum, Shanxi, China; Shenzhen Museum, Shenzhen, China; Hubei Provincial Museum, Wuhan, China). Additionally, an exhibition drawn from LACMA’s world-class Islamic collection is also planned to travel internationally in 2017.

Exhibitions. Typically, LACMA schedules more than 40 exhibitions each year. LACMA is committed to presenting a diverse exhibition program attracting a variety of audiences. Exhibitions are developed or selected based on a number of factors, including scholarly and artistic value, audience appeal, relationship and dialog with the permanent collections, and relevance to LACMA’s strategic mission and long- term objectives. LACMA intends that the exhibitions inform, excite and challenge the audience, whether through surveying aspects of the permanent collections or offering a new perspective on an artist or theme.

Many of the exhibitions that LACMA presents are developed by LACMA’s own curators, capitalizing on their scholarship and expertise. Examples of exhibitions developed by LACMA’s curators over the last five years include the following:

• Calder and Abstraction: From Avant Garde to Iconic explored the artist’s radical translation of French Surrealist vocabulary into American vernacular. His most iconic works, coined mobiles by Marcel Duchamp, are kinetic sculptures in which flat pieces of painted metal connected by wire move delicately in the air, propelled by motors or air currents. His later stabiles are monumental structures, whose arching forms and massive steel planes continue his engagement with dynamism and daring innovation.

A-4 • Noah Purifoy: Junk Dada surveyed the career of Noah Purifoy (1917-2004), who lived and worked most of his life in Los Angeles and Joshua Tree, California. A founding director of the Watts Towers Art Center, his earliest body of sculpture, constructed out of charred debris from the 1965 Watts Rebellion, was the basis for 66 Signs of Neon, a landmark group exhibition about the riots that traveled to nine venues between 1966 and 1969. The exhibition explored a pivotal yet under-recognized figure in the development of postwar American Art whose effect is only beginning to be fully understood.

• New Objectivity: Modern German Art in the Weimar Republic 1919-1933, featured artwork produced during Germany’s Weimar Republic, established between the end of World War I and the Nazi rise to power, and a thriving laboratory of art and culture. The exhibition was the first comprehensive exhibition in the United States to explore the dominant artistic trends of this period.

• Diana Thater: The Sympathetic Imagination showcased works of a pioneer in film, video, and installation-based art, Los Angeles-based artist Diana Thater. As the most comprehensive exhibition of Thater’s work to date, the exhibition offered visitors an unprecedented opportunity to survey the artist’s film-, video-, and installation-based works.

• Alternative Dreams: Currently on view, 17th-Century Chinese Paintings from the Tsao Family presents one of the finest existing collections of 17th-century Chinese paintings in the United States, formed over a period of fifty years by Bay Area collector and dealer Jung Ying Tsao. The 17th century witnessed the fall of the Chinese-ruled Ming dynasty (1368–1644) and the founding of the Manchu-ruled Qing dynasty (1644–1911), and was one of the most turbulent and creative eras in the history of Chinese art. Comprising 130 paintings, the exhibition explores ways in which artists of the late Ming and early Qing dynasties used painting, calligraphy, and poetry to create new identities as means of negotiating the social disruptions that accompanied the fall of the Ming dynasty.

In addition, each year LACMA partners with other museums in organizing approximately one-third of the Museum’s exhibitions. These collaborations allow both the sharing of curatorial research and expertise, and the sharing of the significant costs (packing, shipping, and courier airfare) associated with an international tour. In recent years, such collaborations have included:

• Expressionism in Germany and France: From Van Gogh to Kandinsky reflected new scholarship on issues of French-German relations and sought to contribute to the understanding of how influence functions in the visual arts by exploring how Expressionism intensified issues of national identity and cultural heritage that had already been raised as the previous generation of German artists embraced Monet, Manet and French Impressionism. This exhibition was organized by LACMA and the Kunsthaus Zürich in collaboration with Montreal Museum of Fine Arts.

• Pierre Huyghe, marked the first major retrospective of the work of Pierre Huyghe (b. 1962, Paris). Huyghe creates films, installations, and events that blur fact and fiction, reinvent rituals of social engagement, and use the exhibition model as a site for playful experimentation. Organized thematically, the exhibition covered more than two decades of Huyghe’s career, with a focus on cinema as both model and matrix. By filming staged scenarios, Huyghe probes the capacity of art to distort and ultimately shape reality through methods that are filmic, spatial, or social. This exhibition was organized by the Centre Pompidou, Musee National d’Art Moderne, Paris, in association with LACMA.

• Robert Mapplethorpe: The Perfect Medium explored Mapplethorpe’s body of work through early drawings, collages, sculptures, and Polaroid photography; materials from his archive; portraits, still lifes, and figure studies; rare color photographs; and two seldom-seen moving image works.

A-5 The exhibition also highlighted the artist’s relationship to New York’s sexual and artistic undergrounds, as well as his experimentation with a variety of media. This exhibition was organized by LACMA and the J. Paul Getty Museum.

• Guillermo del Toro: At Home with Monsters, currently on view, showcases one of the most inventive filmmakers of his generation. Taking inspiration from del Toro’s extraordinary imagination, the exhibition reveals his creative process through his collection of paintings, drawings, maquettes, artifacts, and concept film art. This exhibition was organized by LACMA, the Minneapolis Institute of Art, and the Art Gallery of Ontario.

LACMA also hosts important exhibitions that are organized by other museums. Recent such examples include:

• Samurai: Japanese Armor from the Ann and Gabriel Barbier-Mueller Collection featured 140 objects, including suits of armor, helmets, weapons, and horse armor. Many of the works in this exhibition date from the 250 years of peace known as the Edo period (1615-1868), when the Shogun and Daimyo feudal lords commissioned outrageous and fanciful armor and helmets designed for display. This exhibition was organized by the Ann & Gabriel Barbier-Mueller Museum, Dallas.

• Nature and the American Vision: The Hudson River School featured approximately forty-five outstanding American landscape paintings from the nineteenth-century. Among the artists represented in this display were the heroes of the landscape movement in this country – Thomas Cole, Asher B. Durand, and Albert Bierstadt, among others—as well as lesser lights, some of whom participated by making the country known through the new democratic medium of prints and portfolios. This exhibition was organized by the New York Historical Society.

• Agnes Martin (1912-2004), the first retrospective of the artist’s work in the United States since 1992, covers the full breadth of her practice, revealing her early and little-known experiments with different media and tracing her development from biomorphic abstraction to the mesmerizing grids and striped canvases that became her hallmark. This exhibition was organized by the Tate Modern in collaboration with LACMA, the Kunstsammlung Nordrhein-Westfalen, Düsseldorf, and the Solomon R. Guggenheim Museum, New York.

Notable exhibitions scheduled for display in coming months include:

• Picasso and Rivera: Conversations Across Time will explore the relationship between Pablo Picasso and Diego Rivera, contemporaries, erstwhile competitors, equally ambitious and prolific as artists, internationally famous, with larger-than-life personalities. The exhibition will present moments of intersection in the formation of modernism both in Europe and Latin America, and will ask how these towering figures of the twentieth century engaged with their respective ancient Mediterranean and Pre-Columbian worlds. The exhibition will compare their artistic trajectories beginning with their similar academic training to their shared investment in Cubism and their return to an engagement with antiquity from the 1920s through the 1950s.

• The Inner Eye: Vision and Transcendence in African Arts will feature 100 outstanding works that explore how the arts and their visual regimes enable transitions from one stage of life to the next and from one state of being to another. The spiritually charged works in this exhibition acknowledge African artists as visionary agents of transformation. Figures, masks, initiation objects, and reliquary guardians lead humans to spirit realms, to the afterlife, and to the highest levels of wisdom. Many works possess downcast eyes of contemplation and spiritual reverence, while others depict piercing projections of power and protection, or a multiplicity of eyes for heightened vigilance and awareness.

A-6 • Home—So Different, So Appealing will explore how U.S. Latino and Latin American artists from the late 1950s to the present have used the deceptively simple idea of “home”" as a powerful lens through which to view the profound socioeconomic and political transformations in the hemisphere. Spanning seven decades and covering art styles from Pop Art and Conceptualism to “anarchitecture” and “autoconstrucción,” the artists featured in this show explore one of the most basic social concepts by which individuals, families, nations, and regions understand themselves in relation to others. In the process, their work also offers an alternative narrative of postwar and contemporary art.

• Chagall: Fantasies for the Stage will highlight the principal role that music and dance played in Chagall’s artistic practice, which is deeply linked to his Russian birthplace and upbringing. A significant source of inspiration and a central theme throughout his extensive oeuvre, music permeated Chagall’s engagement with modernism, from his early canvases in the 1910s to his first creations for the stage in the 1920s and his monumental set designs of the 1940s1960s.

• Found in Translation: Design in California and Mexico, 1915-1985 is a groundbreaking exhibition and accompanying book about design dialogues between California and Mexico. Its four main themes—Spanish Colonial Inspiration, Pre-Columbian Revivals, Folk Art and Craft Traditions, and Modernism—will explore how modern and anti-modern design movements defined both locales throughout the twentieth century.

• Realm of the Dharma: The Arts of Buddhism will present an international survey of Buddhism and Buddhist art, beginning with the religion’s origins in India and following its spread through mainland and island Southeast Asia (Myanmar [Burma], Thailand, Cambodia, Vietnam, and Indonesia), the Himalayas (Kashmir, Nepal, and Tibet), and East Asia (China, Korea, and Japan). Incorporating 150 masterpieces of pan-Asian Buddhist art, the exhibition will introduce key concepts of Buddhist thought and practice viewed through the prism of rare and extraordinarily beautiful Buddhist sculptures, paintings, and ritual objects.

Conservation. LACMA’s Conservation Center is dedicated to preserving, protecting, studying and interpreting LACMA’s art collections. Established in 1967, the Conservation Center encompasses five areas of expertise: paintings, textiles, paper, objects and research. The Conservation Center collaborates with other LACMA departments to care for both the permanent collections and works on loan from other institutions. The Conservation Center’s research laboratory provides curators with information regarding an artwork’s authenticity, date, attribution and condition. The Conservation Center generally examines more than 5,000, and treats more than 1,500, works of art annually.

The Conservation Center also offers fellowships and summer internships to students and graduates of accredited conservation training programs in the United States and around the world. More than 150 students have participated in these training programs. The Center has recently completed a major project involving the restoration of an 18th century period room from Damascus, Syria. The room was completely dismantled and was elaborately decorated with colorful inlaid marble floors; painted and carved wood walls, doors and storage niches; a spectacular stone arch that serves to divide the upper and lower sections of the room, which are separated by a single high step; and an intricately inlaid stone wall fountain. Conservation of the room was organized in partnership with the King Abdulaziz Center for World Culture; additional conservation support was provided by the Friends of Heritage Preservation.

In October 2010, LACMA entered into an agreement with the City of Los Angeles Department of Cultural Affairs for the care and preservation of Watts Towers. LACMA was asked to review and provide recommendations to the City of Los Angeles with respect to the long range programming for conserving and protecting the Watts Towers. Owned by the State of California and managed by the City of Los Angeles, the Watts Towers are a National Historic Landmark and one of the most widely recognized works of art to come

A-7 out of Southern California in the last century. The Conservation Center is responsible for the care and maintenance of the Towers and continues to undertake minor repairs and restorations as needed.

Education. LACMA’s Education and Public Programs Department offers a wide variety of public programs and resources, providing visitors of all ages with opportunities to expand their experience with works of art in both LACMA’s permanent collections and its special exhibitions. During the fiscal year ended June 30, 2016 more than 658,000 people participated in LACMA’s education and public programs and over 79,000 schoolchildren visited the Museum free of charge. Serving children and families is among LACMA’s highest priorities.

In 1998, LACMA opened the Boone Children’s Gallery, originally an 8,000-square-foot exhibition space for children and families located in LACMA West, which encouraged an interactive approach to exhibitions by providing hands-on activities, computer games, and learning programs within the exhibitions. Exhibitions at the Boone Children’s Gallery were viewed in the aggregate by more than 620,000 visitors. With changes to the Museum’s building program, the Boone Children’s Gallery in LACMA West has been moved to the Korean and Chinese art galleries in the Hammer Building. The new space is closely aligned to the art on view and children and families can make ink paintings or small folding screens inspired by images found on the works in the galleries. Parents with young children are invited to storytelling two days a week, where instructors read from a variety of books about Korea and China and Korean and Chinese art.

In 2003, LACMA launched Art for NexGen, a membership program designed for children under the age of 18. As of June 30, 2015 the program had over 205,000 members. NexGen members are given advance notice of all of LACMA’s educational programs and activities, free admission to the galleries for each child member and an accompanying adult, and discounts on art classes and in the Museum Store. NexGen programs include Andell Family Sundays, art classes, and Target Free Holiday Mondays, which encourage parents to visit the museum with their children on school holidays, weekends, and throughout the year. On Andell Family Sundays, families are invited to attend artist-led workshops and bilingual family gallery tours of the Museum. Andell Family Sundays attracted more than 24,000 visitors in the fiscal year ended June 30, 2016.

In 2006, LACMA launched Art Programs with the Community: LACMA On-site, a comprehensive partnership with the Los Angeles Unified School District, to bring arts-related programs to students, children, and families. Art Programs with the Community provides curriculum materials that correlate with the State Content Standards for the visual arts, language arts, and social sciences; sequential art lessons taught by teaching artists in collaboration with classroom artists; professional development for teachers; buses to LACMA’s Andell Family Sundays program; and participation in LACMA’s two outreach mobile classrooms for middle school students. Community programs include artist-led workshops at libraries and community sites, video conferencing lessons for schools and libraries related to works of art in LACMA’s collection, and an interactive art installation at Charles White Elementary School. In 2015-16, LACMA served over 27,656 students, children, and families through these programs.

LACMA works with educators and schools to bring its knowledge and resources directly to teachers and students. Evenings for Educators is a professional development program that provides K-12 teachers with the opportunity to learn about LACMA’s special exhibitions and permanent collections, and offers strategies for incorporating the arts into the school curriculum. For students, LACMA offers an eight-week program, After School at the Museum, which is a collaboration with local schools designed to introduce students to LACMA’s collections through gallery tours, lectures, and hands-on workshops. In the fiscal year ending June 30, 2016, 901 teachers and school administrators attended Evenings for Educators and more than 2,100 students attended the After School at the Museum.

Under the umbrella of NexGen, teen audiences are served through a number of programs including an intensive High School Internship Program and an exhibition opening event just for teens. Each year, fifteen high school students are selected from an applicant pool of over 100 to spend the academic year at the museum learning about the museum as an exhibition site and a workplace. Interns receive training in art history, public

A-8 speaking, and gallery teaching techniques that prepare them to lead gallery tours for fellow students. In 2014- 15, teen interns gave forty-six tours to 367 students. LACMA also hosts an evening exhibition opening event, After Dark, just for teens. Over 4,000 teens participated in two evenings in 2015-16 focusing on a special exhibition and the museum’s permanent collection. In addition to viewing the exhibitions, the evening includes artmaking led by teaching artists, gallery tours, refreshments, and live music. College students participate in a similar event each year with over 1,400 students attending in 2015-16 and participating in gallery discussions and art activities.

LACMA launched a new Art +Film Education Initiative in 2013 that offers programs for students and professional development for teachers responding to the presence and power of media in contemporary art and mainstream cultural production. The initiative capitalizes on the increasing accessibility of technology by providing students and teachers with hands-on opportunities to work in teams to create short films. The program has served over 4,000 students and teachers since 2013.

Through the generosity of The James Irvine Foundation, LACMA launched LACMA9 Art+Film in 2013 offering free art and film workshops, an oral history project, indoor and outdoor film screenings, plus a day of free admission to LACMA for the communities of Redlands, San Bernardino, Altadena, Monterey Park, Hacienda Heights, Montebello, Compton, Inglewood, and Torrance. Presented in collaboration with parks, universities, and colleges, the program inhabited each community for five weeks. An inviting public sculpture – designed by artist Jorge Pardo – housed the Lab with over 5,000 community members participating in the program from June 2013 to April 2014.

In celebration of the museum’s 50th Anniversary on April 26, 2015, the museum offered free admission and educators created a self-guide with “50 Ways to Love LACMA” and a day of interactive experiences that invited visitors to expand their understanding and make personal connections with works in the collection. Over 4,500 visitors took advantage of the free admission day to visit the museum.

The James Irvine Foundation awarded the museum a grant in December 2015 to create ways to make programs and collections accessible to the communities of Los Angeles County with the goal of broadening participation in cultural experiences. By building on existing partnerships, establishing new relationships, and seeking community input, LACMA will endeavor to create educational and shared experiences that resonate with community members. LACMA will be partnering with the cities of North Hollywood and Compton, and with the Vincent Price Art Museum in East Los Angeles, to provide art workshops, art exhibitions, and artist residencies.

Research. LACMA’s research centers (including related libraries, study centers and archives) hold LACMA’s research collections and are focused on materials documenting the history of art. These centers collect and disseminate information in a variety of media to researchers throughout the country, as well as the core LACMA research staff.

Each of LACMA’s libraries and study centers has a distinctive collection and character, and all serve LACMA’s research needs and educational mission. The largest of the libraries, the Mr. and Mrs. Allan C. Balch Art Research Library (the “Balch Library”), maintains an extensive research level collection in art history and related areas. Currently, the collection includes over 200,000 books and approximately 400 journal subscriptions. Students and scholars may research LACMA’s collections and artworks at the Balch Library or may access a number of the specialized research facilities located at the Museum. The Doris Stein Research Center library has over 8,000 books, journals, rare books and videos on costume, textiles, fashion, jewelry and related subjects. The Robert Gore Rifkind Center for German Expressionist Studies, a research facility with approximately 5,000 prints and drawings and over 6,000 books, is devoted to the study of the Expressionist movement that flourished in Germany during the early twentieth century.

LACMA also offers research opportunities directly over the internet. Since 2001, collections.lacma.org, an online database featuring over 80,000 works from LACMA’s permanent collections,

A-9 including images, curatorial writings and reference materials, has been available to the public. In February 2013, LACMA launched a newly-designed version of the collections website, with larger images, additional resources, and a new search interface to make it easier for online visitors to find and learn about works of art in our encyclopedic collection. The new collections website also enables users to download and use, without restriction and for free, approximately 20,000 images of public domain works of art. Additionally, in January 2010, the online Reading Room was introduced, dedicated to rare and out-of-print catalogues of LACMA’s collections and exhibitions, and LACMA’s inventory of online publications continues to grow, including LACMA’s first web-based scholarly catalogue.

Relationship with the County of Los Angeles

Development and Ownership of the Museum Campus. The County owns the land and facilities located on the Museum’s East Campus. Museum Associates constructed and improved these facilities pursuant to several agreements between Museum Associates and the County dating from December 1958. In general, these agreements required the County to set aside property upon which Museum Associates would construct Museum buildings at no cost to the County, and required Museum Associates to donate the buildings to the County upon their completion and to repay all indebtedness incurred in connection with their construction. Pursuant to each agreement, Museum Associates manages, operates and maintains the relevant buildings in perpetuity, and the County provides partial funding for their operation and maintenance. See “Funding Agreement” below for additional information regarding the County’s funding obligations and the obligations of Museum Associates under that agreement.

In 1994, Museum Associates purchased the eight-acre West Campus from The May Company. In February 2008, Museum Associates purchased a 0.83-acre property on Ogden Drive and Wilshire Boulevard, opposite the museum (the “Ogden Lot”) to serve as additional parking facilities for staff, supplementing the two-acre parking lot (located to the south of the East Campus, at the corner of Wilshire Boulevard and Spaulding Avenue) that LACMA acquired in 1985 and the underground Pritzker Garage on the West Campus constructed as part of the Transformation Project. Museum Associates owns the West Campus and both parking lots on the south side of Wilshire Boulevard. The County has no ownership or leasehold interest in these properties currently.

An extension of the Los Angeles Metropolitan Transportation Authority (“Metro”) purple line subway along Wilshire Boulevard from Wilshire/Western to Wilshire/La Cienega, including a station at Wilshire Boulevard and Fairfax Avenue, with a main entrance directly across the street from LACMA at Orange Grove and Wilshire, is under construction and is expected to be completed by 2023, according to Metro. In early 2013, Museum Associates entered into an agreement with Metro to permit Metro to use the Ogden Lot (corner of Ogden Drive and Wilshire Boulevard) for the purpose of exploratory work in connection with construction of the new subway station, for a period of 21 months. In late 2014, Museum Associates entered into a temporary construction easement with Metro to permit Metro to do construction staging for 8 years, beginning January 1, 2015, with an option for Metro to extend such term for up to an additional 12 months, in connection with the construction of the new subway station.

In 2006, in connection with the Transformation Project, the County granted Museum Associates a perpetual easement to construct portions of the new underground Pritzker Garage and the BP Grand Entrance on land the County owns, and Museum Associates granted the County a perpetual easement in a strip of land running along Sixth Street from the eastern edge of the former Ogden Drive to Fairfax Avenue, contiguous with Hancock Park, in which LACMA installed artist Michael Heizer’s Levitated Mass, providing for such area to remain undeveloped and to be maintained and open to the public on the same basis as Hancock Park.

Funding Agreement. In 1994, Museum Associates and the County entered into a funding agreement (the “Funding Agreement”) to provide a reasonable and stable level of financial support for the Museum. The Funding Agreement, which has a 99-year term, sets forth the respective rights and duties of Museum Associates and the County, including the rights and duties described below.

A-10 County Payments. Under the Funding Agreement, the County has agreed to set aside in its annual budget a fixed sum, to be used and expended pursuant to the County’s appropriation authority, toward the costs of maintaining and operating the Museum. The County makes its contributions in cash payments to Museum Associates and “in-kind” support. In-kind support consists primarily of payments to third parties that the County makes directly to the support of the Museum and includes, for example, the salaries and benefits paid by the County to its employees who work at the Museum and the payment by the County of East Campus utility expenses. As of June 30, 2016, of the Museum’s approximately 580 employees, approximately 37 were regular, full-time County employees. See “OTHER PERTINENT INFORMATION – Employees.” Under the Funding Agreement, the amount of the County’s total contribution is a fixed amount determined by increasing the previous year’s contribution by a percentage equal to the percentage change in the Consumer Price Index for all urban consumers in the Los Angeles, Anaheim and Riverside areas (the “CPI”). The Funding Agreement provides that, regardless of changes in the CPI, the annual increase may not exceed 5% and the County’s contribution may not decrease from the previous year’s contribution. The County’s support is approximately 40% of the Museum’s operating budget.

The County’s approved contribution for the fiscal year ended June 30, 2016, was $30,044,000. This amount will be subject to increase in future fiscal years based on the CPI as described above.

The following table contains information concerning the County’s cash payments to Museum Associates and in-kind support of the Museum for the fiscal years ended June 30, 2012 through June 30, 2016.

COUNTY SUPPORT OF LACMA

For the Fiscal Year Ended June 30, 2012 2013 2014 2015 2016

Cash Paid to Museum Associates $21,584,000 $22,310,000 $23,172,000 $22,928,875 $23,081,000

In-Kind Support(1) 5,426,849 5,513,159 5,694,042 6,090,875 5,807,717

Total(2) $27,010,849 $27,823,159 $28,866,042 $29,019,750 $28,888,717

Source: Museum Associates. The information included in this table was derived by Museum Associates from the audited Combining Statement of Activities of Museum Associates and the County for the fiscal years ended June 30, 2012 through June 30, 2016. (1) Includes payments that the County makes to third parties for the operation of the Museum, such as salaries and benefits for Museum-related County employees and East Campus utility expenses. (2) Variations in amounts reflect, in part, that in-kind support budgeted but not paid out by the County in one fiscal year is carried over to the next fiscal year and is reflected in the next fiscal year’s in-kind support total. Such carried over amounts do not, however, decrease or otherwise affect the amount of the next fiscal year’s required County contribution under the Funding Agreement.

The County’s agreement to contribute financially to the Museum’s operations and maintenance is conditioned upon Museum Associates being able to satisfy its payment obligations under the Funding Agreement (described below under “Museum Associates Payments”) and continuing to manage, operate and maintain the Museum in accordance with the Funding Agreement.

The Funding Agreement is subject to re-negotiation under certain circumstances. In particular, the Funding Agreement provides the County with the right to open negotiations regarding the determination of its total contributions for any year in which there exists a “substantial budget crisis.” The Funding Agreement describes a “substantial budget crisis” as being evidenced by the reduction, for budgetary reasons, of the number of budgeted positions of permanent employees of the County by two percent from the preceding County fiscal year. If such a budgetary crisis exists, the County, at its option, may request to meet with Museum Associates for the purpose of negotiating in good faith regarding the amount of the County

A-11 contribution. The Funding Agreement provides, however, that the exercise by the County of its option to open negotiations shall not in any way be deemed to relieve either party of its respective commitments under the Funding Agreement, including the County’s commitment to make the annual County contribution. To date, the County has not exercised its option to open negotiations and the County has never sought to renegotiate its funding commitments.

The County’s support of the Museum pursuant to the Funding Agreement is a significant source of revenues for Museum Associates. The County’s failure to make its contributions or a material decrease in the amount of the County’s contribution could adversely affect Museum Associates’ ability to pay debt service on the 2016 Bonds. See “CERTAIN INVESTMENT CONSIDERATIONS — Relationship with County of Los Angeles” in this Official Statement.

Management of the Museum and Control of Revenues. The Funding Agreement grants Museum Associates the sole right to manage, operate, maintain and regulate the Museum and provides that all revenues earned from the management and operation of the Museum are the property of Museum Associates and are not to be used to offset or diminish the County’s obligations without the written consent of Museum Associates.

Museum Associates Payments. The Funding Agreement requires Museum Associates to contribute an amount equal to at least 80% of the County’s contribution for the purpose of funding Museum operations. For the purpose of meeting this requirement, Museum Associates is entitled to include all Gross Revenues (as defined in the Funding Agreement) earned by it from the management of the Museum. “Gross Revenues” under the Funding Agreement include revenues received by Museum Associates from various sources, including, without limitation, membership dues, admission fees, bookstore and concession revenues, exhibitions, special events, unrestricted and restricted gifts of funds and in-kind goods and services, to the extent that none of the foregoing are used for the acquisition of art work.

Museum Associates’ contributions pursuant to the Funding Agreement have exceeded the required amounts each year since the Funding Agreement was entered into. During the fiscal year ended June 30, 2016, these contributions totaled approximately $59 million, or 203% of the County’s contribution, and for the fiscal year ended June 30, 2015, $91 million, 313% of the County’s contribution.

Future Capital Maintenance Requirements. The existing Funding Agreement does not specifically address future maintenance requirements of a capital nature that arise due to calamity, obsolescence or other causes. The County acknowledges in the Funding Agreement that the Museum includes County-owned buildings, and agrees that the future requirements of the County-owned Museum buildings will be handled in the same manner as all other County-owned buildings. In order to address structural problems and deferred maintenance issues of the existing County-owned buildings, the County has agreed to support the project to replace the aging, deteriorating buildings with the Building for the Permanent Collection. Based on independent studies conducted by the County and the Museum, it was determined that to retrofit the existing County-owned buildings would be nearly as costly as constructing the new building, without improving functionality or visitor experience. This new building project was described more fully on page A-2. The new building project is not part of the current 2016 refinancing.

Additional County Support. In addition to funds provided on an annual basis pursuant to the Funding Agreement, the County has provided specific grants, from time to time, to support LACMA’s operations and programs. Since 2004, in the context of the Campaign (defined under “GIFTS AND FUNDRAISING CAMPAIGNS”), the County has made nine such grants, totaling $37.8 million in support:

A-12 FY Amount General Purpose 2005 $5,000,000 Improved programming and general operations 2006 5,000,000 Furtherance of goals of LACMA’s Campaign 2006 75,000 Construction and presentation of Klimt exhibition 2007 5,000,000 General operating purposes 2009 5,500,000 Design and development of parkland (two grants) 2011 5,000,000 General operating purposes 2011 6,719,000 Deferred maintenance 2013 500,000 Additional planning and development of campus 2014 5,000,000 Pre-development expenses $37,794,000 Total

GOVERNANCE AND MANAGEMENT

Board of Trustees

The Museum Associates Board of Trustees (the “Board”) supervises the management, operation and maintenance of the Museum. The Board holds regular meetings four times per year, including an annual meeting in May or June. In addition to the voting Trustees, there are a number of nonvoting Life Trustees who have served a full term as President or Chair of the Board or who have otherwise been recognized for especially meritorious service to LACMA. Trustees are not compensated for their service on the Board.

Trustees. Trustees are divided into three classes with staggered terms. One class is elected by the Board each year at the annual meeting to a three-year term. There is no limit on the number of times a Trustee can be reelected. The number of Trustees may fluctuate at the discretion of the Board, up to a maximum authorized number of 60 Trustees. Currently, Ms. Elaine Wynn and Mr. Tony Ressler are co-Chairs of the Board and Mr. William H. Ahmanson, Ms. Willow Bay and Mr. Robert Kotick are Vice-Chairs of the Board. The following Trustees currently serve on the Board.

William Howard Ahmanson Mr. Ahmanson has served as Vice Chair of the Board since October Vice-Chair of the Board 2007. Mr. Ahmanson is President of The Ahmanson Foundation. Chair of the Audit Committee He is also a director of the Los Angeles Police Memorial Trustee since 2004 Foundation and Vice President of the Los Angeles Police Equestrian Fund. Mr. Ahmanson attended Occidental College, where he was a double major in Political Science and Theatre Arts with an arts minor in sculpture.

Wallis Annenberg Ms. Annenberg is President, CEO and Chairman of the Board of Trustee since 2001 Directors of the Annenberg Foundation. She is also a member of the Board of Governors of the Music Center and serves on the Board of Trustees of the California Science Center, the Museum of Television and Radio, the University of Southern California and the University of Southern California Annenberg School for Communications. Ms. Annenberg received a Doctor of Humane Letters from the University of Southern California.

A-13 Mark Attanasio Mr. Attanasio is Founder and Managing Director of Crescent Co-Chair, Finance Committee Capital Corp. Since 2005, he has been both principal owner of Trustee Since 2011 MLB’s Milwaukee Brewers and a part-owner of the American Hockey League’s Milwaukee Admirals. Mr. Attanasio serves on the Board of Trustees of Heal the Bay, the United Way of Milwaukee; the Greater Milwaukee Committee; Harvard-Westlake School; and the President's Leadership Council at Brown University. He received his AB from Brown University and his JD from Columbia University School of Law.

Ambassador Nicole Avant Ambassador Avant is the daughter of music mogul, Clarence Avant Trustee Since 2014 and collector of Japanese Art, Jacqueline Avant. In 2009 Ambassador Avant was sworn into office as the 13th United States Ambassador to the Bahamas. Prior to her appointment, from 1998- 2008, she was Vice President at Interior Music Publishing, a family owned firm.

Ambassador Avant has served as an Academic Counselor for The Neighborhood Academic Initiative- a daily mentorship program, established at the University of Southern California. She has also served on the board of The Bogart Pediatric Research Center and in 2007 was named the Next Generation Leader by the American Cancer Society. Ambassador Avant is currently an active board member for Best Buddies International, People For the American Way, LACMA, Special Olympics World Games Los Angeles 2015 and Visionary Women.

Willow Bay Ms. Bay is an award-winning journalist and author. She was the Vice-Chair of the Board executive producer and host of the Lifetime Television special and Co-Chair, Committee on Trustees research initiative, “Spotlight 25.” Before that, she anchored CNN’s Trustee since 2007 flagship financial news program “Moneyline.” She was also an ABC News correspondent and served as co-anchor of “Good Morning America/Sunday.” Her extensive broadcast career began in sports as co-host of “NBA Inside Stuff” on NBC, where she moved into news coverage as a contributing correspondent for “The Today Show.” She is also author of the book “Talking to Kids in Tough Times.” Ms. Bay recently became Director of The Annenberg School of Journalism at the University of Southern California.

A-14 Dr. Rebecka Belldegrun Dr. Belldegrun founded BellCo Capital, LLC, a management Trustee since 2009 consulting and investment company, where she served as its President and CEO. Dr. Belldegrun has served on the Advisory Board for the USC Center on Public Diplomacy, on the External Advisory Board of the Institute for Strategic Threat Analysis and Response at University of Pennsylvania, and the Board of Trustees at the Interdisciplinary Center in Herzliya, Israel. She is Chairman Emeritus of the Board of Trustees at Brentwood School in Los Angeles and is on the University of Pennsylvania Parents Leadership Committee. Dr. Belldegrun received her M.D. degree from the Sackler School of Medicine at Tel-Aviv University. After completing her residency in Ophthalmic surgery in Israel, she continued her postdoctoral Fellowship in Corneal Surgery at the Massachusetts Eye and Ear Infirmary, Harvard Medical School, Boston.

Nicolas Berggruen Mr. Berggruen started what has become Berggruen Holdings in Trustee since 2008 1984. Mr. Berggruen also co-founded the hedge fund organization Alpha. His private equity and related direct investment activity provides the basis of Berggruen Holdings today. Mr. Berggruen is a member of the Young President’s Organization and sits on the board of the Berggruen Museum in Berlin, as well as the International Council of the Tate Museum. Mr. Berggruen is also a board member of GLG, which is publicly traded on the New York Stock Exchange.

David C. Bohnett Mr. Bohnett founded GeoCities, an Internet based media and e- Trustee since 2006 commerce company. He also manages a portfolio of investments through his investment company, Baroda Ventures, and sits on the boards of several civic, philanthropic, and privately held ventures. He is the Chairman of the David Bohnett Foundation, a non-profit grant making organization focused on improving society through social activism. Mr. Bohnett holds an M.B.A in Finance from the University of Michigan and a B.S. in Business Administration from the University of Southern California. Mr. Bohnett is Chairman of the Los Angeles Philharmonic Association Board Of Directors.

Suzanne Deal Booth Ms. Booth is the founder and director of the Friends of Heritage Trustee since 2002 Preservation, a nonprofit organization dedicated to promoting the recognition, preservation, and conservation of artistic and cultural heritage. She also serves as a Trustee for the Institute of Fine Arts, New York University, as well as serving as a Board Member of the Centre Pompidou Foundation, The American Academy in Rome, and Rice University. Ms. Booth holds a B.A. from Rice University, an M.A. in Art History and a Certificate in Art Conservation from the Institute of Fine Arts, New York University.

A-15 Eva Chow Ms. Chow is a fashion designer of international renown, selling to Trustee since 2008 Bergdorfs, Barneys, Neiman Marcus, Saks Fifth Avenue, and many specialty boutiques around the world. Since 1994, she has worked with her husband in opening Mr. Chow restaurants around the world, with locations in Europe, Korea, and New York, with future plans for Las Vegas, South Beach Miami, Monte Carlo, Dubai, Abu Dhabi, and Qatar. She is currently involved with film production based on the life of her husband’s father, Zhou Xin Fang, who is a National Treasure of China. Ms. Chow often hosts benefits for organizations such as the New York Academy of Arts.

Ann Barry Colgin Ms. Colgin is the owner of Napa Valley-based winery, Colgin Co-Chair, Acquisitions Committee Cellars. She is also a Trustee of The Joseph H. Wender Trustee since 2007 Foundation, which supports arts organizations, health associations, and federated giving programs. She is a current board director of the High Museum in Atlanta and the Neil Bogart Memorial Foundation in Los Angeles. Ms. Colgin holds a B.S. from Vanderbilt University and completed a Sotheby’s Decorative Works of Art Course in London. She received an M.A. in fine arts administration from New York University in 1984.

Janet Crown Janet Crown is the founder and owner of the boutique fitness studio Trustee since 2013 Burn 60 in Brentwood, California, now in its eighth year of expanding in Southern California. Prior to opening Burn 60 in 2005, Ms. Crown joined Creative Artists Agency (CAA), creating a new department in the commercial and sponsorship division. In 1995 she became a Vice President of Client Services at Focus Media in Santa Monica.

Ms. Crown is a founding member of The Painted Turtle, a Paul Newman’s Hole-in-the-Wall Gang Camp for chronic and terminally ill children. She is also a member of the Board of Directors for The Every Child Foundation; the ISE Advisory Board of the Rand Corporation; the Board of Directors of the U.S. Committee for UNICEF; and board of the Lollipop Theater Network.

Born and raised in Chicago, Illinois, Ms. Crown graduated from Denison University in 1985 with a BA in History, and received her graduate MS from Northwestern University’s Medill School of Journalism in Evanston, Illinois.

A-16 Kelvin Davis Mr. Davis is a Senior Partner of TPG Capital and Head of the firm's Trustee since 2012 North American Buyouts Group. Prior to joining TPG in 2000, Mr. Davis was President and Chief Operating Officer of Colony Capital, Inc., a private international real estate-related investment firm in Los Angeles, which he co-founded in 1991. Mr. Davis earned a B.A. degree (Economics) from Stanford University and an M.B.A. from Harvard University, where he was a Baker Scholar, a John L. Loeb Fellow, and a Wolfe Award recipient. He is also a long-time Director (and past Chairman) of Los Angeles Team Mentoring, Inc. (a charitable mentoring organization), is a Director of the Los Angeles Philharmonic Association, and is on the Board of Overseers of the Huntington Library, Art Collections, and Botanical Gardens.

Kelly Day Ms. Day is an active philanthropist in the Los Angeles community Trustee since 2007 and nationally. She is a member of the Board of Directors of Los Angeles Opera, The Guerin Foundation, and RAND Center for Middle East Public Policy; a member of the Board of Overseers of the Keck School of Medicine at USC; a member of the Advisory Board of The Rockefeller University Council, New York; and a member of the Board of Governors of Progress for America. She is honorary chair of the Kelly Day Endowment on the State of Women and Human Rights in the Middle East at the James A. Baker III Institute for Public Policy at Rice University. She chairs the Kelly Day Foundation. Ms. Day is married to Life Trustee Robert A. Day.

Joshua S. Friedman Mr. Friedman is founder, Co-Chairman and Co-CEO of Canyon Co-Chair, Finance Committee Partners LLC. Mr. Friedman is a director or trustee of a number of Trustee since 2010 nonprofit and charitable organizations, including the Washington Institute for Near East Policy and the California Science Center. Mr. Friedman is a graduate of Harvard College (B.A., summa cum laude, Physics), Oxford University (M.A., Politics and Economics, Marshall Scholar), Harvard Law School (J.D., magna cum laude), and Harvard Business School (M.B.A., Baker Scholar).

Gabriela Garza Mrs. Garza has been an active supporter of LACMA for several Trustee since 2011 years, supporting the installation of the Pre-Columbian galleries by artist Jorge Pardo and participating in several gala events. She sponsored the Magritte exhibition at the Museo de Bellas Arte in Mexico City and is a Patron of the Museo Universitario de Arte Contemporaneo. Mrs. Garza was born in Guadalajara, Mexico, and educated in Mexico, Italy and France. She has a degree in Fashion Design from the Scoala de Estilismo de Firenze. She is fluent in Spanish, English, Italian and French.

A-17 Thelma Golden Ms. Golden has served as Director and Chief Curator of The Studio Trustee since 2016 Museum in Harlem since 2005. The Studio Museum is the institution where she began her career in 1987, prior to a decade at the Whitney Museum of American Art. She returned in 2000 to be the Studio Museum’s Deputy Director for Exhibitions and Programs.

During her period at the Whitney Museum, from 1988 through 1998, Ms. Golden was a member of the curatorial team for the 1993 Biennial, organized numerous exhibitions including 1994’s Black Male: Representations of Masculinity in American Art and served as Director of the Whitney Museum at Phillip Morris. From 1998 until 2000, Ms. Golden served as the Special Projects Curator for the contemporary art collectors and philanthropists Peter Norton and Eileen Harris Norton.

Ms. Golden holds a B.A. in Art History and African American Studies from Smith College and honorary doctorates from the City College of New York, San Francisco Art Institute, Smith College and Moore College of Art and Design.

Andrew Brandon Gordon Mr. Brandon-Gordon served as Co-Chair of the Board from Co-Chair of the Board Emeritus October 2007 through June 2015. Mr. Brandon-Gordon is co-head Trustee since 2005 of the Investment Banking Division Far West Region and managing director of the Los Angeles office of Goldman, Sachs & Company. He also serves on the Board of Directors of the Los Angeles Philharmonic Association, the Los Angeles Advisory Board of Youth I.N.C., the Alumni Association, and the Los Angeles campaign committee of his alma mater, Wesleyan University, and the Valley Alliance of the United Jewish Federation. Mr. Brandon- Gordon is a graduate of Columbia Business School.

Tom Gores Mr. Gores is the Founder, Chairman and CEO of Platinum Equity. Trustee since 2006 Mr. Gores is a member of the Board of Directors at both St. Joseph’s Hospital and UCLA Medical Center. Mr. Gores holds a B.A. from Michigan State University.

Caroline Grainge Ms. Grainge is an executive, entrepreneur and philanthropist with Trustee since 2016 extensive international experience. For more than 25 years, she worked as a senior executive at River Island, the London- headquartered high street fashion brand with more than 350 stores throughout Europe, Asia and the Middle East.

Ms. Grainge also serves as a Trustee and member of the Board of the Archer School for Girls in Los Angeles. She studied psychology, English literature and creative writing at Roehampton University. Ms. Grainge and her husband - Lucian Grainge, CBE, the Chairman and CEO of Universal Music Group, the global music company based in Santa Monica - have three children, Betsy, Elliot and Alice.

A-18 Brad Grey Mr. Grey is Chairman and Chief Executive Officer of Paramount Trustee since 2013 Pictures Corporation. In this position, Mr. Grey is responsible for all feature film development and production for the Paramount Motion Picture Group which includes Paramount Pictures, Paramount Vantage, Paramount Classics, Paramount Animation, Insurge Pictures, MTV Films and Nickelodeon Movies. Mr. Grey serves on UCLA’s Executive Board for the Medical Sciences, the USC School of Cinema-Television Board of Councilors, and the Board of Directors for Project A.L.S. and NYU’s Tisch School of the Arts.

Victoria Jackson Ms. Jackson is the Chairman of the Board of Victoria Jackson Trustee since 2007 Cosmetics, Inc., and Founder and CEO of Lola Cosmetics. Ms. Jackson currently serves on the board of the Brain and Creativity Institute at the University of Southern California. For fifteen years she has taken her skills into L.A.’s Twin Towers Correctional Facility and taught her philosophy to patients at Cedars-Sinai’s Comprehensive Cancer Center, to abused women at MacLaren Hall, and to young women at Children of the Night in Los Angeles.

Suzanne Kayne Ms. Kayne is on the Board of Directors of the Kayne Eras Center, Trustee since 2008 an educational resource facility for learning and emotionally challenged at-risk youth. Ms. Kayne is an active member of the Council of the Children’s Burn Foundation and serves on its Board. She is also a board member of the Blue Ribbon of the Los Angeles Music Center. She is involved with the Friends of Heritage Preservation and the Garden Conservancy, and supports several centers of learning and higher education. Ms. Kayne is President of the Kayne Foundation. Ms. Kayne received her B.A. at the University of North Carolina at Chapel Hill and obtained her California teaching credential at the University of California, Los Angeles.

Robert Kotick Mr. Kotick is the Director, Chairman of the Board and CEO of Vice-Chair of the Board Activision. He was also a founder of International Consumer Co-Chair, Committee on Trustees Technologies and acted as its President, as well as a Director, from Trustee since 2004 its inception in 1986 to January 1995. Mr. Kotick is a member of the Board of Trustees for The Center for Early Education and is a member of the Board of Directors of the Tony Hawk Foundation.

Lyn Davis Lear Ms. Lear holds a Master’s degree in Child Development and a Ph.D Trustee since 2011 in Clinical Psychology. A native Californian, she is a social and political activist and philanthropist, especially concerned with the environment and the arts. She is a member of the Board of Trustees of the Sundance Institute. Ms. Lear is married to producer Norman Lear and is the mother of three children.

A-19 Bryan Lourd Mr. Lourd is a partner and managing director of Creative Artists Trustee since 2011 Agency (CAA), an entertainment and sports agency based in Los Angeles with offices in New York, London, Nashville, Beijing, Chicago, St. Louis, Calgary and Stockholm. Mr. Lourd is a member of the President’s Committee on the Arts and Humanities (PCAH). He’s an American Film Institute (AFI) trustee and is on the boards of InterActiveCorp (IAC) and the J/P Haitian Relief Organization (J/P HRO). He is also a supporter of the Music Center/Performing Arts Center of Los Angeles.

Michael Lynton Mr. Lynton became Chairman and CEO of Sony Pictures Trustee since 2007 Entertainment in January 2004, managing its overall global operations. Previously, Mr. Lynton was President of Time Warner International, President of AOL International, and CEO of AOL Europe. Mr. Lynton is a graduate of Harvard College and Harvard Business School.

Jamie McCourt Ms. McCourt is founder of Jamie Enterprises. Ms. McCourt serves Trustee since 2009 on the USC’s Board of Trustees, the Executive Committee at the UCLA Anderson School of Management, and the North America Executive Board at the MIT Sloan School of Management. Ms. McCourt is on the Honorary Advisory Council of Stand Up to Cancer. Ms. McCourt earned her B.S. in French from Georgetown University and holds a diploma from La Sorbonne at the University of Paris, a J.D. from the University of Maryland School of Law, and an M.B.A. degree in management from the MIT Sloan School of Management.

Richard Merkin M.D. Dr. Merkin is the founder, President, and CEO of Heritage Provider Trustee since 2009 Network. He is also founder of the Heritage Medical Research Institute, a nonprofit medical research corporation. He is on the Board of Trustees at the California Institute of Technology, is a co- founder of Fastercures, and serves on the Board of the California Center Advisory Council. He is also on the Board of Directors for EdVoice, a team dedicated to education reform, and has recently joined the X PRIZE Foundation, a group of visionaries fueling prize competitions and enhancing educational outreach.

Wendy Stark Morrissey Ms. Stark Morrissey is the Los Angeles Editor of Vanity Fair. She Trustee since 2000 serves on the Board of Directors of the University of Southern California Keck School of Medicine, the Friends of Art and Preservation of Embassies, COACH for Kids and the Fran and Ray Stark Foundation.

Jane Nathanson Mrs. Nathanson is a psychologist and licensed clinical marriage and Trustee since 2004 family therapist. She is a founder, trustee and former vice chairman of the board of MOCA, Los Angeles. Mrs. Nathanson is a director of American Foundation for AIDS Research and is a trustee at UCLA Medical Center. The Nathanson Entrepreneur in Residence program at UCLA’s Anderson School is funded by the Nathansons. Mrs. Nathanson earned a B.A. from the University of Denver and an M.A. from the California Graduate Institute.

A-20 Peter Norton Mr. Norton is a retired computer software entrepreneur. He serves Trustee since 2000 on the Board of Directors of the California Institute for the Arts, Reed College, Crossroads School and the Museum of Modern Art in New York. Mr. Norton is a graduate of the University of California, Berkeley.

Anne E. Palmer Born and raised in Paris, Ms. Palmer came to the United States in Trustee since 2014 1986 to become proficient in the English language, after completing her undergraduate studies in Lyon. After acquiring a Master degree in Clinical Psychology, Ms. Palmer interned as a Family and Child Therapist at Friends of the Family from 1995 to 2001, a non-profit organization serving under-privileged families in Los Angeles County. From 2000 to 2004, Ms. Palmer served on its Board of Directors.

Ms. Palmer is the co-chair of Le Lycée Francais de Los Angeles Parents Association and a Middle-School Ambassador there. Ms. Palmer lives with her husband, Geoff and their son, Grant, in Beverly Hills.

Viveca Paulin-Ferrell Ms. Paulin-Ferrell is an active member of the Los Angeles Art Trustee since 2011 Community. She is a leading independent auctioneer with over 15 years of experience for clients, including Bonhams and Butterfields, Los Angeles Modern Auctions and Santa Monica Auctions. Ms. Paulin-Ferrell has a B.A. in Art History from Pomona College in Claremont, California.

Anthony N. Pritzker Mr. Pritzker is a Managing Partner and co-founder of The Pritzker Trustee since 2007 Group and serves as Chairman of AmSafe Partners. Mr. Pritzker serves as a Director for Heal The Bay, is a member of the Dartmouth Board of Overseers and of the Cedars-Sinai Board of Governors. He graduated with an M.B.A. from the University of Chicago and earned a B.A. in Engineering from Dartmouth College.

Janet Dreisen Rappaport Ms. Dreisen Rappaport created the art consulting partnership of Trustee since 2000 Weisman and Karatz, an art consulting firm, which curated exhibits at the Bank of Los Angeles and Trumps Restaurant. Ms. Dreisen Rappaport was a founder of MOCA Los Angeles, and also serves as a member of the Board of Trustees of California Institute of the Arts, the Los Angeles Conservation Corps and the Blue Ribbon at the Music Center.

A-21 Tony Ressler Mr. Ressler has served as the Co-Chair of the Board since June Co-Chair of the Board 2015. Mr. Ressler, Managing Partner of Ares Management, was a Trustee since 2005 co-founder of Ares Management in 1997. He serves on several Boards, including Allied Waste Industries, Inc., Ares Capital Corporation (Co-Chairman), and Samsonite Corporation, as well as nonprofits including Los Angeles County’s Alliance for College Ready Public Schools, The Center for Early Education, and The Painted Turtle Camp (the Southern California Chapter of The Hole in the Wall Gang Camps). Mr. Ressler received his B.S.F.S. degree from Georgetown University’s School of Foreign Service and his M.B.A. from Columbia University’s Graduate School of Business.

Steven F. Roth Mr. Roth is the Co-Chief Executive Officer of World Oil Corp. He Trustee since 2010 was one of the original founding partners of Creative Artists Agency, and served as Vice Chairman of the board of International Creative Management. Through the Steven F. Roth Family Foundation and the Florence and Bernard B. Roth Family Foundation, he has made significant contributions to several leading institutions, including LACMA, Special Olympics, Wilshire Boulevard Temple, and the Music Center of Los Angeles County.

Carole Bayer Sager Ms. Sager is an award-winning songwriter whose career spans Co-Chair, Development Committee almost forty years. Ms. Sager supports the American Foundation Trustee since 2009 for Aids Research and Elizabeth Glaser’s Pediatric Aids Foundation, and co-founded the Neil Bogart Children’s Cancer Research Labs at L.A.’s Children’s Hospital. She is also active in Spirituality for Kids and the L.A. Art House. She and her husband underwrote the first three years of the Los Angeles operation of the nonprofit organization DonorsChoose.org.

Ryan Seacrest Mr. Seacrest holds preeminent positions in broadcast and cable Trustee since 2014 television, nationally syndicated radio and local radio. He is celebrated internationally as host of the top-rated primetime talent showcase “American Idol” on Fox. He is also host and executive producer of ABC’s annual New Year’s eve program, “Dick Clark’s Rockin’ Eve with Ryan Seacrest.” On radio, Seacrest is host of “On Air with Ryan Seacrest,” his market-topping #1 nationally syndicated LA morning drive-time show for Clear Channel’s 102.7 KIIS-FM, as well as a nationally-syndicated Top 40 radio show. Seacrest launched Ryan Seacrest Productions (RSP) in 2006, which has since become an Emmy-winning entertainment production powerhouse

Mr. Seacrest’s philanthropic efforts are focused on youth-oriented initiatives, including serving as Chairman of The Ryan Seacrest Foundation and Honorary Chair of the Grammy Foundation. His personal passions include food, travel and contemporary art.

A-22 Soumaya Slim Ms. Slim studied Communications at Universidad Anahuac, Trustee since 2016 specializing in Semiotics. She went on to serve as the Director of Mexico City’s Museo Soumaya, named in honor of her late mother. The museum was founded by Ms. Slim’s father, Carlos Slim, to house his collection of over 66,000 works of classical European paintings and sculptures, modern Mexican pieces by artists including Diego Rivera and David Alfaro Siqueiros, and what is believed to be the world's largest collection of pre-Hispanic and colonial-era coins. The museum also possesses the largest collection of works by Auguste Rodin outside of France. In 2012, Ms. Slim and her husband Fernando Romero established Archivo Diseño y Arquitectura, which promotes, exhibits, revises, and broadcasts Design in its many outlets.

Florence Sloan Ms. Sloan is a successful children’s book writer, whose work is Trustee since 2007 published world-wide. She is also a freelance writer for lifestyle and special interest columns for a vast array of magazines, and has recently started a production company. She is also fully committed to philanthropic work in areas of the arts and social services. Ms. Sloan was born in Kuala Lumpur, Malaysia and educated in England. She attended City University in London, where she obtained a B.A. (HONS) Law Degree.

Eric Smidt Mr. Smidt is CEO of Harbor Freight Tools, one of the country’s Trustee since 2006 largest catalogers of tools and equipment. Mr. Smidt is actively involved with a variety of political issues at both the state and national levels. He is an International Advisory Board member and dedicated supporter of the Saban Center at Brookings Institute. He actively supports health and education causes at Cedars-Sinai, the UCLA Medical Center, the Warschaw Prostate Cancer Center, and Children’s Hospital.

Michael G. Smooke Mr. Smooke is Of Counsel and Vice-Chair of the Real Estate Trustee since 1992 Department of the law firm Eisner Kahan Gorry Chapman Ross & Jaffe. Mr. Smooke also serves as Trustee of the Jewish Community Foundation and has served as a Director of DARE America and Vice President of Temple Emanuel, Beverly Hills. He received a B.A. from the University of California, Los Angeles and a J.D. from Harvard Law School.

A-23 Jonathan D. Sokoloff Mr. Sokoloff is a Managing Partner of Leonard Green & Partners Trustee since 2015 LP (“LGP”), which he joined in 1990. He serves on the boards of Advantage Sales & Marketing, Inc., BJ’s Wholesale Club Inc., The Container Store, J. Crew Group Inc., Jetro Cash & Carry Inc., Jo- Ann Stores Inc., Shake Shack Inc., The Sports Authority Inc., Tire Rack Inc., Topshop/Top Man Limited, Union Square Hospitality Group, and Whole Foods Market.

Before joining LGP, he was a Managing Director in investment banking at Drexel Burnham Lambert. He received a B.A. from Williams College, where he co-chairs the Endowment Committee for Private Equity.

Mr. Sokoloff and his wife Sheryl have four children and reside in Los Angeles.

Steve Tisch Mr. Tisch is Chairman of the New York Giants football Trustee since 2010 organization. Mr. Tisch is also a successful producer in the motion picture industry and a partner in Escape Artists, an independent film company. Mr. Tisch has long been a leader in philanthropic ventures including support of AIDS Project Los Angeles, HELP Group and the ERAS Center. He is a member of the Board of Advisors at the Tisch School of the Arts at New York University. He is a member of the Board of Geffen Theatre in Los Angeles, the Sundance Institute, and the Preston Robert Tisch Brain Cancer Center at Duke University.

Casey Wasserman Mr. Wasserman is CEO of Wasserman Media Group. He owns and Co-Chair Development Committee operates the Los Angeles Avengers, Bakersfield Blitz and Fresno Trustee since 2004 Frenzy arena football teams, and is a partner in the sports consulting firm OnSport. Mr. Wasserman is the President and Chief Operating Officer of the Wasserman Foundation. Mr. Wasserman sits on several boards, including the Amateur Athletic Foundation, the Los Angeles Sports Council, the Jules Stein Eye Institute, Research to Prevent Blindness, Do Something!, and the Fund for the Capitol Visitor Center. Mr. Wasserman graduated from the University of California, Los Angeles in 1996 with a B.S. in political science.

Elaine Wynn Ms. Wynn has served as Co-Chair of the Board since June 2015. Co-Chair, Board of Trustees Ms. Wynn has served as a director of Wynn Resorts since October Trustee since 2011 2002. She co-chairs Nevada’s Blue Ribbon Education Task Force for education reform. She is the national chair of Communities in Schools, the nation’s leading drop-out prevention organization. Ms. Wynn was appointed by President Obama to the board of The Kennedy Center and is on the Library of Congress Trust Fund.

A-24 Dasha Zhukova Ms. Zhukova is the founder of the Garage Centre for Contemporary Trustee since 2009 Culture, a contemporary art space opened in Moscow, Russia in 2008. She is also a fashion designer whose line, Kova & T., is carried in department stores around the world. In 2009, Ms. Zhukova became editor-in-chief of the British fashion magazine Pop.

Ann Ziff Ms. Ziff is Chairman of the Metropolitan Opera in New York. She Co-Chair, Acquisitions Committee also serves as Vice Chairman of the board of Lincoln Center, and as Trustee since 2014 a trustee of Carnegie Hall, the American Museum of Natural History, New York Restoration Project, Sing For Hope, the World Science Festival (New York, NY), among other non-profit organizations as well as being Founding Chairwoman of the Board of Directors of The Smile Train, an international organization that provides free cleft lip and palate surgery for underprivileged children. She is a member of the Advisory Board of WonderWork, an organization that provides vision restoring surgeries for the poor in developing countries.

Ms. Ziff designs and makes fine jewelry and founded Tamsen Z, a jewelry boutique in New York. She is a founder and producer of the Caribbean Community Theater in St. Croix, US Virgin Islands. Ms. Ziff has a Masters in Social Work from New York University where she also studied the Masters program in music therapy, and she worked as a psychiatric social worker in the New York City system for many years.

Life Trustees. Trustees may attain Life Trustee status in one of two ways. First, any Trustee who has served a full term as President or Chair of the Board is eligible to be elected a Life Trustee. Second, from time to time, the Board honors individuals with the status of Life Trustee in recognition of especially meritorious services rendered to LACMA. Life Trustees receive notice of and are entitled to attend all meetings of the Board, but do not have the right to vote. The number of Life Trustees is not limited. The following individuals currently serve as Life Trustees:

A-25 Elected to Life Trustee Life Trustee Principal Affiliation the Board Since

Ambassador Frank E. Baxter Jefferies and Co., Inc. 2010 2014 Daniel N. Belin Belin Consulting 1978 2003 President Mrs. Lionel Bell Philanthropist 1977 2007 Donald L. Bren Irvine Company 1986 2009 Eli Broad The Broad Foundations Co-Founder 1995 2008 Robert A. Day Trust Company of the West 1990 2009 Camilla Chandler Frost Philanthropist 1962 2012 Julian Ganz, Jr. McMahon Furniture Stores 1973 2004 President and CEO Mrs. Dwight M. Kendall Philanthropist 1983 2008 Robert F. Maguire, III Maguire Investments 1981 2016 William A. Mingst Cyprus Partners 1989 2007 General Partner Mrs. Lynda Resnick Wonderful Company 1992 2016 Terry Semel Windsor Media 2006 2016 LACMA Board Co-Chair Emeritus Sandra Terner Philanthropist 1994 2014 Walter L. Weisman Occidental Petroleum Corporation 1985 2005 Independent Director

Standing Committees of the Board. The standing committees of the Board are the Executive Committee, the Acquisitions Committee, the Finance Committee, the Audit Committee, the Development Committee and the Committee on Trustees. Other committees and subcommittees may be created from time to time as determined by the Board. With the exception of the Executive Committee, the Audit Committee, the Finance Committee, the Development Committee and the Committee on Trustees, and any other standing committee that may, from time to time, exercise the authority of the Board of Trustees, members of committees are not required to be Trustees.

Executive Committee. The Executive Committee meets at least quarterly between meetings of the Board. The Executive Committee possesses all of the powers and duties of the Board except those explicitly reserved for the Board under California law. The Executive Committee is comprised of the Chair or Co-Chairs of the Board, the Chair(s) of each standing committee, and such other Trustees as may be nominated by the Chair of the Board, in consultation with the chair of the Executive Committee, and elected by the Board by a vote of the majority of Trustees then in office. The members of the Executive Committee are Trustees Ressler, Wynn, Ahmanson, Attanasio, Bay, Bohnett, Brandon-Gordon, Colgin, Friedman, Kotick, Nathanson, Sager, Tisch, Wasserman, and Ziff.

Finance Committee. The function of the Finance Committee is to review the Museum’s financial affairs and its annual budget, including review and approval of the corporation’s spending rate on its endowments and other invested assets, and to make recommendations about the same to the Board of Trustees. It also oversees the investment and management of the Museum’s financial assets, reviews and makes recommendations to the Board with regard to the acceptance of gifts of real property and the acceptance of

A-26 planned or deferred gifts, and sets policy with respect thereto, subject to Board approval. The members of the Finance Committee are Trustees Attanasio, Friedman, Gores, McCourt, Merkin, Pritzker, Ressler, Smooke, Sokoloff, and Wynn. William A. Mingst, Life Trustee, and Sandra Ell, who is not a Trustee, are non-voting participants in meetings of the Finance Committee Ms. Ell is Chief Investment Officer Emeritus at the California Institute of Technology.

Audit Committee. The Audit Committee is responsible for commissioning, at least annually, an independent audit of LACMA, selecting, and consulting with, the outside auditors, and making recommendations to the Board based on the audit findings. The Audit Committee reviews matters concerning any transactions between Trustees and other “disqualified persons” (as defined in the Internal Revenue Code) and Museum Associates, as well as the reasonableness of compensation and benefits to any disqualified persons (including the Director and the Chief Financial Officer) and reviews the travel and business expenses of the Director. The Audit Committee also monitors compliance of the Trustees, Director and non-Trustee committee members with the Museum’s Code of Ethics. See “– Code of Ethics” below. Board members who are employees of, or contractors with, Museum Associates or have a material interest in any transaction affecting LACMA may not serve on the Audit Committee. In addition, the Audit Committee is structured to be independent of the Finance Committee. As required under California law, members of the Finance Committee must comprise less than 50% of the membership of the Audit Committee, and the Chair of the Audit Committee may not also serve on the Finance Committee. The members of the Audit Committee are Trustees Ahmanson, Avant, Bay, Davis, Lynton, Ressler, Smooke, and Wynn.

Development Committee. The function of the Development Committee is to assist in the identification, cultivation and solicitation of donors and to assist in providing stewardship to donors and to provide leadership and oversight in connection with fundraising campaigns and major gifts. The members of the Development Committee are Trustees Wasserman, Sager, Jackson, Kayne, Ressler, and Wynn.

Committee on Trustees. The Committee on Trustees presents to the Board of Trustees each year nominees for all officers, for all positions on the Board of Trustees occupied by incumbents whose terms are about to expire, and for membership on committees, as well as nominees to fill vacancies occurring at any time in the Board of Trustees, in any of the offices, or on any committee. The Committee also develops criteria for the selection and screening of new Trustees, provides for orientation of new Trustees and periodic training of all Trustees, and periodically evaluates Trustee performance, individually and collectively. In connection with the evaluation plan for individual Trustees, these criteria include attendance at meetings, service on committees, financial or other support and performance of Trustee duties. The Committee on Trustees also nominates candidates for election as Life Trustees. The members of the Committee on Trustees are Trustees Annenberg, Avant, Chow, Day, Grey, Lourd, Morrissey, Nathanson, Ressler, Sager, Wasserman, Wynn and Zhukova.

Senior Management

Museum Associates’ senior management is responsible for the day-to-day operation and management of the Museum. The following individuals are those members of Museum Associates’ current senior management who have responsibility for legal, financial, administrative and development matters:

A-27 Michael Govan Mr. Govan became CEO and Wallis Annenberg Director of LACMA on CEO and Wallis Annenberg April 1, 2006. For the previous 11 years, Mr. Govan was President and Director Director of the New York City-based Dia Art Foundation, a nonprofit institution devoted to contemporary art. Under his leadership, Dia dramatically increased its exhibitions and related programs. He conceived and realized Dia:Beacon, a 300,000-square-foot museum on the banks of the Hudson River devoted to Dia’s renowned collection of artwork from the 1960s to the present, and successfully completed an $80-million capital campaign to build and endow the museum. From 1988-94, Mr. Govan served as Deputy Director of the Guggenheim Museum, and prior to that helped found MASS MoCA (the Massachusetts Museum of Contemporary Art) while at Williams College, where he studied art history and fine art.

Diana Vesga Ms. Vesga was appointed Chief Operating Officer of LACMA in Chief Operating Officer September 2016. Previous to her current position, since 2014, Ms. Vesga served as LACMA’s Chief Administrative Officer. Ms. Vesga is responsible for leading and overseeing Finance, Human Resources, Facilities, Security, Capital Projects, Communications, Retail and Restaurant operations at LACMA. Prior to joining LACMA, Ms. Vesga served as Vice President in Private Equity at Oaktree Capital, and previously as Vice President for Investor Relations and Corporate Finance at Univision Communications. She began her career as an Investment Banking Associate at Goldman Sachs & Co in New York and Los Angeles. Ms. Vesga received her MBA from the University of Michigan Business School and holds a B.A. in Business Administration Summa Cum Laude from Universidad de Los Andes in Bogota, Colombia.

Ann Rowland Ms. Rowland was appointed Chief Financial Officer of LACMA in 1997. Chief Financial Officer She has served LACMA since 1985, first as an Accounting Officer and then as Manager of Finance. Ms. Rowland is responsible for receiving and safeguarding all funds of LACMA. She directly oversees LACMA’s Controller and the Budget and Investment Officer. Prior to joining LACMA, Ms. Rowland was an auditor for the County of Los Angeles. She is a registered CPA and holds a B.A. from the California State University at Fullerton.

Fredric Goldstein Mr. Goldstein has served as General Counsel and Assistant Secretary of Senior Vice President, General LACMA since February 2005. He was elected Secretary in October 2007, Counsel and Secretary appointed Vice President effective July 1, 2008, Vice President, Administration in May 2011, and Senior Vice President effective July 1, 2013. He serves as chief legal officer to the Board. Prior to joining LACMA, Mr. Goldstein served as the Senior Vice President and General Counsel of Phoenix House Foundation in New York, and previously practiced law as a partner in the New York firm of Wachtell, Lipton, Rosen & Katz. Mr. Goldstein received his J.D. from Yale Law School and his B.A. from the University of Michigan.

A-28 Melissa Bomes Ms. Bomes has served as Senior Vice President, Development and Senior Vice President, Audience Strategy since July 2015 and is responsible for development, Development and Audience membership, marketing and on-site services. Previous to her current Strategy position, Ms. Bomes was Vice President of Development. Prior to joining LACMA in 2007, Ms. Bomes worked in the for-profit sector, leading business development teams at DIC Entertainment, eStyle, Inc. & The Walt Disney Company. She began her career as a corporate lawyer at the firm Hill, Wynne, Troop & Meisinger. Ms. Bomes earned a BA from New York University and a JD from Fordham University School of Law.

Mr. Govan and Ms. Rowland are employed by both Museum Associates and the County. Mr. Goldstein, Ms. Vesga and Ms. Bomes are employed solely by Museum Associates.

Code of Ethics

Museum Associates maintains an Ethics Policy that governs the conduct of all persons, from Trustees to volunteers, who serve or represent it. The Ethics Policy establishes guidelines specific to the conduct of personnel at the Museum which emphasize the importance of unequivocal ethical behavior. In general, the Ethics Policy instructs all Trustees, employees and volunteers on issues relating to legal compliance, transactions with LACMA, conflicts of interest, and confidentiality.

MEMBERSHIP AND ADMISSIONS

Overview

Membership dues and paid admissions to the Museum are important sources of revenues for Museum Associates. For the fiscal years ended June 30, 2014, June 30, 2015 and June 30, 2016, for example, membership dues and admissions together were approximately $10,088,000, $10,198,000 and $13,206,000 respectively. The increase for the fiscal year ended June 30, 2016 was primarily attributable to an increase in admission revenues due to both the popularity of the Rain Room installation and to an increased interest in the general program of the museum as reflected in an increase of general admission ticket sales as opposed to specially ticketed exhibitions ticket sales. See “Attendance and Admissions Revenues”

Fluctuations in the amounts received by Museum Associates from memberships and admissions are driven by a number of factors, including, among others, the relative popularity of scheduled exhibitions, changes in the rates charged for memberships or admissions, varying economic conditions in Southern California, and Museum Associates marketing activities.

Of the various factors affecting memberships and admissions, the most significant is the reception by the public of the Museum’s ever-changing exhibition schedule. See “OVERVIEW – LACMA’s Programs – Exhibitions.” One of Museum Associates’ goals in planning LACMA’s exhibition schedule is to maintain level or increased membership and admission revenues over time, by presenting a mix of exhibitions that continue to appeal to the Museum’s audience from year to year and therefore draw visitors to the Museum on a repeated basis.

Membership

LACMA currently has one of the largest membership bases in the United States among art museums. At the close of the fiscal year ended June 30, 2016, LACMA’s paid membership base was over 53,000 households. LACMA offers a variety of annual membership packages ranging in price from $30 (for student memberships) to $10,000 (for the highest level membership – the Curator’s Circle). Membership privileges at LACMA include, among other things, unlimited free admission to the permanent collection, attendance at special member events, members-only preview days, tickets to specially ticketed exhibitions, and discounts in

A-29 the Museum stores and on Museum films, concerts, lectures and classes. All membership dues that Museum Associates receives from individual members are unrestricted revenues. LACMA also has a number of Councils that support various curatorial departments, including in connection with acquisitions of art. The dues paid for membership on the Councils are restricted revenues. See “GIFTS AND FUNDRAISING CAMPAIGNS – Gifts.”

The following table sets forth information regarding LACMA’s memberships for the fiscal years ended June 30, 2012 through 2016.

LACMA’S MEMBERSHIPS

For the Fiscal Year Ended June 30, 2012 2013 2014 2015 2016 Number of Memberships Local - - - - 1,372 Student 1,063 1,060 1,980 1,983 2,276 Individual 7,459 5,633 10,920 10,918 13,869 Active 45,648 38,429 - - - Dual - - 25,632 25,707 29,735 Patron/Friend 8,416 7,793 5,779 5,783 6,017 Supporting 863 776 623 623 641 Community Partner/Partner 63 76 207 208 241 President’s Circle(1) 731 712 688 578 603 Other(2) 659 628 3 15 129 Total(3) 64,902 55,107 45,829 45,800 54,754

Membership Dues(4) $7,085,026 $6,799,427 $5,393,681 $5,312,389 $6,181,386

Source: Museum Associates. Information regarding number of memberships included in this table was derived by Museum Associates from internally-prepared unaudited financial records. Membership dues information included in this table was derived by Museum Associates from the Financial Statements of Museum Associates for the fiscal years ended June 30, 2012 through June 30, 2016. (1) “President’s Circle” includes seven membership sub-levels. “President’s Circle” was renamed, effective July 1, 2013, “Curator’s Circle” with membership dues levels from $2,500 to $10,000. Revenues for Curator’s Circle are included in the Unrestricted Gifts section. (2) “Other” includes employees, life members and corporate designated members. (3) Memberships fluctuate each year depending on cyclical factors such as the Museum’s exhibitions schedule. (4) Excludes membership dues from LACMA’s Councils, which are restricted revenues and Curator’s Circle which are unrestricted revenues.

LACMA also offers various corporate membership packages. For a description of these memberships, see “GIFTS AND FUNDRAISING CAMPAIGNS – Gifts – Unrestricted Gifts.”

Attendance and Admission Revenues

For the general public (non-members), LACMA charges admission to the Museum galleries and exhibitions. General admission prices are $15 for adults, $10 for seniors and students, $12 for groups of 10 or more, and no charge for children under the age of 18. General admission is free for Los Angeles County residents every weekday after 3 pm, which accounts for almost one quarter of LACMA’s operating hours. In addition, certain special exhibitions are ticketed at a higher ticket price than general admission, and are typically priced at $25 for adults – children under 18 are again free.

A-30 The following table sets forth information regarding LACMA’s attendance and admission revenues for the fiscal years ended June 30, 2012 through 2016.

ATTENDANCE AND ADMISSION REVENUES

For the Fiscal Year Ended June 30, 2012 2013 2014 2015 2016 Attendance(1) 1,347,018 1,225,917 1,230,366 1,166,920 1,407,405 Admission Revenues $6,726,429 $5,427,354 $4,694,425 $4,885,669 $7,357,397

Source: Museum Associates. Number of admissions information in this table was derived by Museum Associates from internally-prepared financial records. Admission revenues were derived by LACMA from its Financial Statements for the fiscal years ended June 30, 2012 through June 30, 2016. (1) Includes unpaid visits by members and all visits during free-to-the-public hours.

GIFTS AND FUNDRAISING CAMPAIGNS

Gifts

In the fiscal year ended June 30, 2016, Museum Associates received approximately 24% of its annual operating budget from private gifts and grants, including support from individual, foundation and corporate donors. Monetary gifts and gifts of art to LACMA are managed through the Development Department. The Development Department works with the Museum Associates’ Board of Trustees and with colleagues throughout the Museum to solicit financial support from LACMA trustees, communities served by LACMA and from the public at large. LACMA has created nine art councils and four acquisition groups – each supporting a specific area of the Museum’s collection – that along with the proceeds of the April 2015 50th Anniversary Gala and the Museum’s annual Collectors Committee have acquired or helped acquire over 5,000 works of art for the Museum over the course of its history, including some of its most iconic masterpieces.

Unrestricted Gifts. Monetary contributions to Museum Associates may be restricted or unrestricted. Restricted gifts are those the use of which is limited by the donor. Unrestricted gifts are those given without restriction and thus they provide Museum Associates with the greatest flexibility in meeting obligations and responding to opportunities. In addition to the general membership program, other unrestricted giving programs include: Unrestricted Trustee Annual Giving (“UTAG”), Curator’s Circle, the Annual Fund, the Director’s Circle, Avant-Garde, and Corporate Membership dues. The minimum expected contribution level per Trustee for UTAG is $100,000 per year. Curator’s Circle includes seven membership sub-levels with dues levels from $2,500 to $10,000. The Annual Fund is a direct mail and telemarketing campaign to existing members for additional gifts to support the operation of the Museum. The Director’s Circle is a patron group comprised of leaders from the creative, media, business and art communities, formed to support emerging projects and special initiatives. Avant-Garde is a membership group for young professionals, collectors, and art supporters interested in exploring LACMA and L.A.’s dynamic art world. Corporate Membership dues are raised from local, national and international corporations, which receive a range of benefits for their employees, which benefits may include, among other things, free admission to the Museum, invitations to exhibition previews and opportunities to host special events on Museum premises related to the Museum’s exhibition program. Through these programs, Museum Associates raised approximately $7,314,000 and $7,420,000 in unrestricted gifts during the fiscal years ended June 30, 2015 and 2016, respectively. In addition LACMA mounts the Arts + Film Gala, an annual event that honors prominent artists from the visual arts world and the film community, the proceeds of which are used to support the museum’s operations. The Art + Film Gala raised gross revenues of approximately $3,859,000 and $4,178,000 of unrestricted support during the fiscal years ended June 30, 2015 and 2016, respectively.

A-31 Restricted Gifts. Restricted funds include funds received to support specific exhibitions or programs and are not available for other purposes. Museum Associates obtains restricted funds through applications for grants and other types of foundation support, and through targeted solicitations of corporations and individuals. Some government and foundation grants are restricted funds.

The total value of unrestricted and restricted giving to Museum Associates for each of the fiscal years ended June 30, 2012 through 2016 is shown in the following table. Unrestricted and restricted giving varies from year to year, as a result of the nature of such giving. The timing and amounts of Museum initiative- specific gifts or grants, donor bequests and most other forms of giving are not predictable or consistent. Campaign pledges, to the extent they are paid over time, are recorded as Temporarily Restricted Gifts. The Museum’s Board approved a $650 million Campaign for the Permanent Collection Building during fiscal year 2016 and several large gifts were publicly announced. See “—Fundraising Campaign; Strategic Planning”. Verbal pledge agreements related to the campaign were not signed pending more final building plans, including naming opportunities, thus not recorded as of June 30, 2016. Also fiscal year 2015 included two large gifts for art acquisition and restricted programs, totaling $18.7 million, that were not repeated in fiscal year 2016.

VALUE OF UNRESTRICTED AND RESTRICTED GIVING TO LACMA

For the Fiscal Year Ended June 30, 2012 2013 2014 2015 2016 Unrestricted Giving Gifts(1) $6,478,655 $5,844,661 $7,643,455 $7,557,118 $7,378,447 Government Grants – 500,000 5,004,315 – 4,000 Fundraising Events, net 1,358,158 1,889,459 2,256,605 1,854,095 2,050,559 Subtotal 7,836,813 8,234,120 14,904,375 9,411,213 9,433,006

Temporary Restricted Giving Gifts(1) 22,797,575 23,469,917 46,697,481 40,198,681 15,605,476 Government Grants 650,220 130,033 405,942 254,784 924,581 Fundraising Events, net 1,452,479 2,837,246 3,267,856 2,229,154 2,429,402 Subtotal 24,900,274 26,437,193 50,371,279 42,682,619 18,959,459

Permanently Restricted

Giving Gifts(1) 14,931 10,764 34,865 10,168 6,177 Subtotal 14,931 10,764 34,865 10,168 6,177

TOTAL GIVING $32,752,018 $34,682,077 $65,310,519 $52,104,000 $28,398,642

Source: The information included in this table was derived by Museum Associates from its audited Financial Statements for the fiscal years ended June 30, 2012 through June 30, 2016. (1) Information reflects discounting to present value as of the applicable fiscal year-end of pledges to Museum Associates’ current fundraising campaign.

A-32 Fundraising Campaign; Strategic Planning

In 2003, Museum Associates launched the Transformation Campaign. The Board of Trustees led the fundraising effort by contributing approximately $268 million to the Transformation Campaign with principal gifts coming from Eli and Edythe Broad and Lynda and Stewart Resnick. BP Corporation contributed the highest corporate gift, in the amount of $25 million. When the Transformation Campaign closed in 2012, Museum Associates had received more than $339.3 million in pledges and gifts of which approximately $270 million was unrestricted. Approximately $51.7 million of the unrestricted Transformation Campaign pledges remain outstanding as of June 30, 2016. The balance of the outstanding pledges is payable over several years: approximately $21.4 million is payable over the course of fiscal years ending June 30, 2017 through June 30, 2020 and approximately $11.2 million is payable over the fiscal years ending June 30, 2021 through June 30, 2025. Also, there are $19.1 million in unrestricted bequests due as part of this campaign.

In October 2013, the Board of Trustees approved LACMA’s Momentum Fund, a Board led fundraising initiative. Signed commitments to the Momentum Fund total approximately $53.7 million, including, as of June 30, 2016, $47.3 million in unrestricted, unconditional signed pledges and gifts, and an additional $6.4 million in signed pledges that are subject to the satisfaction of certain conditions and thus are not reflected in LACMA’s financial statements. Approximately $32.1 million of the unrestricted, unconditional pledges remain outstanding as of June 30, 2016. The balance of the outstanding pledges are payable over several years: approximately $19.7 million is payable over the course of fiscal years ending June 30, 2017 through June 30, 2020, approximately $8.6 million is payable over the fiscal years ending June 30, 2021 through June 30, 2025 and approximately $3.8 million is payable over the fiscal years ending June 30, 2026 through June 30, 2031.

In Fiscal Year 2016 the Board of Trustees approved a larger Campaign for the Permanent Collection Building. This campaign, with a goal of $650 million, is to provide funding for the new Building for the Permanent Collection Project, which will replace the deteriorating buildings on LACMA’s East Campus, and to retire the Museum’s existing debt. In November 2014 the Los Angeles County Board of Supervisors approved a plan of finance for the project, including a contribution by the County of $125 million, subject to certification by the County of the Environmental Impact Report for the project. The private campaign fundraising goal totals $525 million, which includes the $53.7 million signed commitments in support of LACMA’s Momentum Fund. In addition, LACMA has received $70.5 million in verbal commitments from the Board of Trustees, including $50 million from Co-Chair Elaine Wynn, and a commitment of $25 million from LACMA benefactor A. Jerrold Perenchio, both of which were publicly announced in April 2016. Combined total commitments to the private fundraising goal are $149.2 million as of June 30, 2016. Some or all of the new pledges for the Campaign for the Permanent Collection Building may be restricted or may be subject to certain conditions relating to the project.

ENDOWMENT AND INVESTMENTS

Overview

As of June 30, 2016, the market value of Museum Associates’ investments totaled approximately $323 million. Of that, Museum Associates’ endowment comprised approximately $120 million. Endowment includes permanently restricted contributions, temporarily restricted contributions, unrestricted contributions that have been internally designated as endowment funds by the Board, and the realized and unrealized gains and losses associated with these funds. As of June 30, 2016, approximately 50% of the endowment funds were designated as unrestricted, approximately 32% were designated as temporarily restricted and approximately 18% were designated as permanently restricted.

Museum Associates has an endowment spending policy designed to achieve a balance between Museum Associates’ need at any point in time to sustain operations and its long-term objective of preserving the endowment for use in future operations. The current endowment spending policy is to spend 5% annually

A-33 of a 12-quarter rolling average market value. Any changes to the allowed endowment spending rate or to the manner in which the amount is calculated require the approval of the Finance Committee.

Management of Investments

Board of Trustees; Finance Committee. The Board is responsible for general oversight of Museum Associates’ investment activities and for establishing the investment policy (the “Investment Policy”) for the Endowment and Reserve Fund (the “Fund”). The Finance Committee of the Board is specifically responsible for oversight of Museum Associates’ investments and for recommending changes, as necessary, to the Investment Policy and for periodically reviewing the asset allocation plan. For more information on the Finance Committee, see “GOVERNANCE AND MANAGEMENT – Board of Trustees – Standing Committees of the Board.”

Investment Managers. Day-to-day management of the investment portfolio is handled primarily by external investment managers, each of whom is charged with investing assets of the Fund in accordance with the Investment Policy and with the specific investment guidelines set forth in their respective investment management agreement. With the assistance of an independent investment advisor, the Finance Committee assesses performance of the investment managers based upon, among other factors, the financial performance of their portfolio of investments, the manager’s adherence to Museum Associates’ risk tolerance and investment guidelines, and material changes in the manager’s organization (e.g., changes to senior personnel or to organizational structure) or its investment philosophy. Also upon recommendations from the independent investment advisor, the Finance Committee may decide to retain or dismiss investment managers and may make changes to the investment allocation policy.

Investment Policy

The current Investment Policy, adopted by the Board in January 2015 provides that the overall investment objective of the Fund is to provide a source of capital (appreciation or income) to be distributed in support of LACMA’s objectives. The secondary objective of the portfolio is long-term growth. The performance of the Fund will be measured against the following benchmarks:

Investment Style Performance Benchmark Large Cap Equity Russell 1000 Style Benchmark / S&P 500 Small Cap Equity Russell 2000 Style Benchmark All Cap Equity Russell 3000 Style Benchmark Investment Grade Fixed Income Barclay’s or Citigroup Style Benchmark High Yield Fixed income Merrill Lynch High Yield International Equity MSCI EAFE Style Benchmark or SSBEMI Real Estate As Appropriate Alternatives As Appropriate

The Investment Policy also provides that the Fund’s investment horizon be long-term (30-plus years) and that prudent levels of risk are necessary to achieve long-term investment objectives. The Trustees will periodically evaluate asset class strategies and opportunities, and establish a long term asset allocation plan. In addition to the chart below, the Fund will maintain a minimum of 25% of the portfolio in liquid assets. The Investment Policy provides for the following asset allocation plan:

A-34 Minimum Maximum Long-Only US Equities 0.0% 35.0% Long-Only Int’l Equities 0.0% 25.0% Investment Grade Debt 0.0% 30.0% High Yield Debt 0.0% 10.0% Long/Short Equity 10.0% 30.0% Alternatives* 20.0% 40.0% Illiquid Credit Opportunities 0.0% 15.0% Real Estate 0.0% 6.0% Private Equity/Venture Cap 4.0% 15.0% Cash 0.0% 15.0%

*Alternatives include, but are not limited to, strategies such as global macro funds, distressed securities, various arbitrage strategies, special situations, and event-driven investing.

For additional information regarding the market value of investments as of June 30, 2016, see the Financial Statements of Museum Associates attached to this Official Statement as APPENDIX B.

LACMA’S ENDOWMENT AND RESERVE FUND MARKET VALUE OF INVESTMENTS

(Unaudited) For the Fiscal Year Ended June 30, September 30, 2012 2013 2014 2015 2016 2016

Cash and Cash Equivalents(1) $ - $ 3,980,129 $ 2,141,167 $ 8,395,651 $ 14,007,665 $ 4,185,166 Long-only Equity 53,556,693 75,520,830 96,664,125 134,676,021 133,921,563 130,728,504 Fixed Income 45,075,573 22,970,580 630,895 1,150,383 1,051,670 9,132,257 Absolute Return 114,897,565 125,927,300 143,098,074 122,409,119 109,261,523 117,817,554 Other Partnerships & Other Funds 15,839,556 29,919,361 39,351,494 56,929,117 65,136,645 69,290,053 TOTAL INVESTMENTS $229,369,387 $258,318,200 $281,885,755 $323,560,291 $323,379,066 $331,153,534

Source: The information regarding market value of investments for the fiscal years ended June 30, 2012 through June 30, 2016 was derived from the Financial Statements of Museum Associates for those fiscal years. Information for the year ended September 30, 2016 is derived from the Museum Associates internally-prepared unaudited financial records. (1) Cash and Cash Equivalents were segregated from investments in the financial statements for the fiscal year ending June 30, 2012.

SELECTED FINANCIAL INFORMATION

The Financial Statements of Museum Associates are presented in APPENDIX B – “AUDITED FINANCIAL STATEMENTS AS OF AND FOR THE YEARS ENDED JUNE 30, 2016” and provide financial information as of June 30, 2016 and for the fiscal year then ended. The Financial Statements do not include in-kind support of LACMA by the County (i.e., expenses related to the Museum paid directly by the County). For a discussion of in-kind support, see “OVERVIEW – Relationship with the County of Los Angeles.” The financial statements presented in APPENDIX B are an integral part hereof and should be reviewed carefully in their entirety.

A-35 Financial Data

The following tables summarize certain specific information relative to the financial condition of Museum Associates. The information for each full fiscal year was derived by Museum Associates from the audited Financial Statements of Museum Associates for the fiscal years ended June 30, 2012 through June 30, 2016.

A-36

STATEMENTS OF FINANCIAL POSITION (Fiscal Years Ended June 30, 2012 through 2016)

As of June 30, 2012 2013 2014 2015 2016 CURRENT ASSETS Cash and Cash Equivalents $ 9,754,004 $4,592,059 $4,928,076 $1,730,668 $3,859,173 Accounts Receivable and Accrued Revenue 9,266,332 7,015,663 35,734,503 2,957,998 3,941,040 Pledges Receivable – Current portion, net 29,551,946 19,895,252 20,199,884 23,948,338 23,325,350 Inventories, net 891,324 791,341 884,660 894,255 797,911 Prepaid Expenses and Other Current Assets 110,272 153,382 148,247 137,291 106,459 Total Current Assets 49,573,878 32,447,697 61,895,370 29,668,550 32,029,933

NONCURRENT ASSETS Investments 229,369,387 258,318,200 281,885,755 323,560,291 323,379,066 Accounts Receivable – Long-term portion - 18,400,000 - 4,555,207 3,850,983 Pledges Receivable – Long-term portion, net 50,634,461 49,987,362 67,885,573 67,426,240 54,667,838 Receivables under Trust Agreement, net 138,970 270,140 242,117 218,106 219,769 Property and Equipment, net 312,961,110 305,168,910 297,724,668 289,556,284 281,727,651 Revenue Bond Trust Accounts 2,155,051 208,476 371,209 390,225 - Revenue Bond Issuance Costs, net 15,629,218 15,022,587 14,407,390 13,796,476 13,185,562 Total Noncurrent Assets 610,888,197 647,375,675 662,516,712 699,502,829 677,030,869

TOTAL ASSETS 660,462,075 679,823,372 724,412,082 729,171,379 709,060,802

CURRENT LIABILITIES Notes Payable – Current portion 62,500 62,500 825,000 1,137,462 1,650,001 Capital Lease Obligation – Current portion 256,978 43,047 - - - Accounts Payable and Accrued Liabilities 7,769,783 7,899,189 8,588,029 7,710,520 9,916,358 Deferred Revenue – Current Portion 5,111,625 108,920 1,247,362 439,596 469,570 Deferred Lease Revenue – Current portion - 1,023,066 969,701 1,397,539 1,397,539 Split-Interest Agreement Liabilities 139,097 161,937 212,361 231,511 240,783 Total Current Liabilities 13,339,983 9,298,659 11,842,453 10,916,628 13,674,251

A-37 STATEMENTS OF FINANCIAL POSITION (Fiscal Years Ended June 30, 2012 through 2016) (Continued from Previous Page)

As of June 30, 2012 2013 2014 2015 2016 NONCURRENT LIABILITIES Revenue Bonds $343,000,000 $343,000,000 $343,000,000 $343,000,000 $343,000,000 Deferred Revenue - Long term portion - - 1,125,000 750,000 375,000 Deferred Lease Revenue - Long term portion - 27,109,091 34,469,287 38,628,810 37,231,271 Interest Rate Swap 88,148,360 55,636,880 59,740,112 69,125,720 100,753,320 Notes Payable – Long-term portion 62,500 - - 1,100,000 - Capital Lease Obligation – Long-term portion 43,047 - - - Split-Interest Agreement Liabilities 862,041 953,252 1,181,248 1,233,307 1,331,527 County Funding Agreement Obligation - - - - 4,498,265 Underfunded Pension Liabilities 1,268,031 2,009,401 2,200,513 3,492,855 6,610,810 Total Noncurrent Liabilities 433,383,979 428,708,624 441,716,160 457,330,692 493,800,193

TOTAL LIABILITIES 446,723,962 438,007,283 453,558,613 468,247,320 507,474,444

NET ASSETS Unrestricted Board Designated Endowment 55,169,572 58,006,344 64,669,616 65,323,511 61,833,433 Donor-Restricted Endowment Fund Losses, net (2,173,462) (1,878,826) (1,264,353) (1,333,228) (1,730,814) Other 15,867,744 43,909,525 45,225,174 33,748,284 (6,662,842)

Temporary Restricted Funds Functioning as Endowment 35,804,687 37,153,626 40,068,567 39,734,416 38,118,688 Other 87,067,122 82,612,206 100,106,386 101,392,829 87,963,469

Permanently Restricted Endowments 22,002,450 22.013,214 22,048,079 22,058,247 22,064,424

TOTAL NET ASSETS 213,738,113 241,816,089 270,853,469 260,924,059 201,586,358

TOTAL LIABILITIES AND NET ASSETS $660,462,075 $679,823,372 $724,412,082 $729,171,379 $709,060,802

A-38

STATEMENTS OF ACTIVITIES (Fiscal Years Ended June 30, 2012 through 2016)

For the Fiscal Year Ended June 30, 2012 2013 2014 2015 2016 REVENUES AND SUPPORT Revenues Membership Dues $ 7,867,825 $7,386,973 $7,365,879 $7,247,236 $8,174,844 Admissions 6,726,429 5,427,354 4,694,425 4,885,669 7,357,397 Investment Income gains and (losses), net (1,384,649) 19,860,082 29,731,910 13,299,032 3,469,807 Unrealized Gain (Loss) on Interest Rate Swaps (52,194,101) 32,511,480 (4,103,232) (9,385,608) (31,627,600) County Operating Contract 21,584,000 22,310,000 23,172,000 22,928,874 23,081,000 Auxiliary Activities 4,666,756 2,772,185 2,471,185 2,421,007 2,276,723 Other 7,359,435 7,906,245 9,467,423 9,493,406 7,909,896 Total Revenues (5,374,305) 98,174,319 72,799,590 50,889,616 20,642,067

Support Gifts 29,291,161 29,325,342 54,375,801 47,765,967 22,990,100 Government Grants 650,220 630,033 5,410,257 254,784 928,581 Fundraising Events, net 2,810,637 4,726,702 5,524,461 4,083,249 4,479,961 Total Support 32,752,018 34,682,077 65,310,519 52,104,000 28,398,642

TOTAL REVENUES AND SUPPORT $27,377,713 $132,856,396 $138,110,109 $102,993,616 $49,040,709

A-39 STATEMENTS OF ACTIVITIES (Fiscal Years Ended June 30, 2012 through 2016) (Continued from Previous Page)

For the Fiscal Year Ended June 30, 2012 2013 2014 2015 2016 EXPENSES Program-related Expenses Exhibitions and Collections Management $ 16,884,085 $18,789,627 $13,637,803 $16,444,011 $17,552,031 Curatorial 7,969,500 7,796,678 9,191,170 9,494,040 9,481,650 Education and Public Programs 5,309,390 5,775,686 6,069,068 6,339,650 6,709,430 Marketing and Communication 5,855,380 5,160,603 6,280,246 5,512,576 5,495,544 Operations and Public Services 13,777,523 14,115,990 14,954,688 14,820,540 14,391,793 Property and Deferred Maintenance 602,075 6,550,048 7,580,820 5,255,863 9,022,522 Depreciation Expense 7,889,870 7,906,013 7,982,937 8,030,476 8,064,804 Revenue Bond Interest Expense and Fees 13,723,496 14,135,020 14,932,824 12,836,611 12,964,789 Revenue Bond Cost of Issuance Amortization 610,914 606,631 615,197 610,914 610,914 Auxiliary Activities 4,574,076 3,084,722 2,426,952 2,600,462 2,261,563 General and Administrative 8,856,348 8,047,099 9,938,370 10,222,128 11,752,385 Development 3,731,157 4,055,660 5,192,660 5,322,893 5,392,010

TOTAL EXPENSES 89,783,814 96,023,777 98,802,735 97,490,164 103,699,435

CHANGE IN NET ASSETS BEFORE CHANGE RELATED TO COLLECTION ITEMS (62,406,101) 36,832,619 39,307,374 5,503,452 (54,658,726)

COLLECTION ITEMS PURCHASED (24,161,480) (9,469,000) (12,175,652) (16,859,940) (5,735,574)

COLLECTION ITEMS SOLD 114,356 714,357 1,905,658 1,427,078 1,056,599

CHANGE IN NET ASSETS AFTER CHANGE RELATED TO COLLECTION ITEMS (86,453,225) 28,077,976 29,037,380 (9,929,410) (59,337,701)

NET ASSETS, BEGINNING OF YEAR 300,191,338 213,738,113 241,816,089 270,853,469 260,924,059 NET ASSETS, END OF YEAR $213,738,113 $241,816,089 $270,853,469 $260,924,059 $201,586,358

A-40

STATEMENTS OF ACTIVITIES (Fiscal Years Ended June 30, 2012 through 2016) (Continued from Previous Page)

For the Fiscal Year Ended June 30, 2012 2013 2014 2015 2016 UNRESTRICTED REVENUES AND SUPPORT Unrestricted Revenues Membership $ 7,085,026 $6,799,549 $7,002,671 $6,881,580 $7,837,458 Admissions 6,726,429 5,427,354 4,694,425 4,885,669 7,357,397 Investment Income gains and (losses), net (1,565,951) 15,520,814 24,339,668 10,343,899 2,361,947 Unrealized Gain (Loss) on Interest Rate Swap(s) (52,194,101) 32,511,480 (4,103,232) (9,385,608) (31,627,600) County Operating Contract 21,584,000 22,310,000 23,172,000 22,928,874 23,081,000 Auxiliary Activities 4,000,768 2,095,340 2,347,662 2,375,459 2,226,703 Other 6,916,937 7,604,036 9,246,175 9,234,333 7,698,984 Total Unrestricted Revenues (7,446,892) 92,268,573 66,699,369 47,264,206 18,935,889

Unrestricted Support Gifts 6,478,655 5,844,661 7,643,455 7,557,118 7,378,447 Government Grants – 500,000 5,004,315 - 4,000 Fundraising Events, net 1,358,158 1,889,459 2,256,605 1,854,095 2,050,559 Total Unrestricted Support 7,836,813 8,234,120 14,904,375 9,411,213 9,433,006

Net Assets Released from Restrictions Satisfaction of Program Restrictions 23,366,921 18,539,941 22,242,809 26,070,158 14,397,066 Expiration of Time Restrictions and Other Transfers 21,875,275 17,623,332 15,275,228 20,712,657 22,370,258 Total Net Assets Released from Restrictions 45,242,196 36,163,273 37,968,037 46,782,815 36,767,324 TOTAL UNRESTRICTED REVENUES AND SUPPORT $45,632,117 $136,665,966 $119,571,781 $103,458,234 $65,136,219

A-41

Outstanding Debt

2013A Bonds; Authorization and Use of Proceeds of 2016A Bonds. The Museum is obligated under the Loan Agreement to the Infrastructure Bank for amounts equal to debt service in respect of its $78,000,000 aggregate principal amount Refunding Revenue Bonds (Los Angeles County Museum of Art Project) Series 2013A (the “2013A Bonds”). A substantial portion of the 2013A Bonds will be purchased from the holders thereof by the Museum using proceeds of the 2016A Bonds (see “PLAN OF FINANCE” in this Official Statement).

2013 Direct Purchase Bonds. The Museum is also obligated under the Loan Agreement to the Infrastructure Bank for amounts equal to debt service in respect of its $265,000,000 aggregate principal amount of other Refunding Revenue Bonds (Los Angeles County Museum of Art Project) Series 2013. The Infrastructure Bank issued those bonds in three series: Series 2013B in the aggregate principal amount of $115,000,000 (the “2013B Bonds”), Series 2013C in the aggregate principal amount of $100,000,000 (the “2013C Bonds”) and Series 2013D in the aggregate principal amount of $50,000,000 (the “2013D Bonds”). The 2013B Bonds, the 2013C Bonds and the 2013D Bonds are, collectively, the “2013 Direct Purchase Bonds”.

The Infrastructure Bank issued the 2013 Direct Purchase Bonds pursuant to the Indenture and loaned the proceeds to the Museum pursuant to the Loan Agreement. Wells Fargo Municipal Capital Strategies, LLC (“WFMCS”) purchased the 2013B Bonds, Union Bank, N.A. (“Union Bank”) purchased the 2013C Bonds, and U.S. Bank National Association (“U.S. Bank”) purchased the 2013D Bonds. WFMCS, Union Bank and U.S. Bank are, collectively, the “Initial Special Purchasers” and each is an “Initial Special Purchaser”. The Initial Special Purchasers and the Museum entered into Continuing Covenant Agreements (the “Continuing Covenant Agreements”) in connection with the purchase of the 2013 Direct Purchase Bonds by the Initial Special Purchasers. Each of the Initial Special Purchasers is currently the Special Purchaser (as such term is defined in the Indenture) for the Series of Bonds it holds.

The 2013 Direct Purchase Bonds bear interest at the Direct Purchase Interest Rate. The 2013 Direct Purchase Bonds are subject to mandatory tender for purchase on July 31, 2020 or, at the direction of the Special Purchasers, direction to the Trustee to cause a mandatory tender upon an event of default under the Continuing Covenant Agreements. The Museum is obligated to pay the purchase price of the 2013 Direct Purchase Bonds in connection with any such mandatory tender for purchase. The 2013 Direct Purchase Bonds are payable from Loan Payments from the Museum and the obligation to make such Loan Payments is a general, unsecured obligation of the Museum (except to the extent that amounts are transferred to the Collateral Account) (see “Collateral Account and Intercreditor Agreement” in this Official Statement). Pursuant to the terms of the Continuing Covenant Agreements, the Museum made representations and warranties and agreed to certain covenants and events of default that are different than the representations and warranties and covenants of the Museum under the Loan Agreement. These covenants include: covenants limiting additional indebtedness of the Museum unless certain financial tests are satisfied, covenants limiting the creation of liens by the Museum, a covenant to maintain the UNA Ratio (see “SECURITY FOR THE BONDS – Collateral Account and Intercreditor Agreement” in this Official Statement) at 0.73, covenants limiting asset dispositions, covenants limiting investments, and other covenants and agreements. These covenants and any other provisions of the Continuing Covenant Agreements have been amended previously and may be further amended or waived at any time by the parties thereto and without the notice or consent of the Holders of the 2016A Bonds or, if issued, the 2016B Bonds (defined below). Further, a Continuing Covenant Agreement could terminate or be replaced by another Continuing Covenant Agreement without notice to or consent of the Holders of the 2016A Bonds or, if issued, the 2016B Bonds. See “CERTAIN INVESTMENT CONSIDERATIONS – Impact of the 2013 Direct Purchase Bonds, Including Limitation on Acceleration” in this Official Statement.

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Authorization and Use of Proceeds of 2016B Bonds; Possible Additional Indebtedness

In addition to authorizing the issuance of the 2016A Bonds, the Infrastructure Bank has authorized the issuance of its Refunding Revenue Bonds (Los Angeles County Museum of Art Project), Series 2016B (the “2016B Bonds”) for the purpose of refunding a portion of the 2013 Direct Purchase Bonds. The Museum anticipates that the Infrastructure Bank will issue the 2016B Bonds in the near future, subject to market and other conditions, and that the Museum will use the proceeds of the 2016B Bonds to purchase and cancel or to redeem up to $150 million aggregate amount of such outstanding 2013 Direct Purchase Bonds.

As described above (see “OVERVIEW—The Museum—Building for the Permanent Collection”), subject to certain conditions agreed with the County as well as compliance with the terms of the Continuing Covenant Agreements, in connection with the Building for the Permanent Collection project the Museum may borrow $300 million from the County of Los Angeles in approximately 2020, or 3 years prior to the completion of the new building, provided the Museum has collected at least $175 million in private donations by the time of issuance. The Museum’s obligations to repay the $300 million loan will be subordinate to the Bonds and funded with pledges from private donations paid over time. Neither the amount nor the final terms of such borrowing, or of any additional indebtedness that the Museum may incur, has been determined.

Swap Agreement

The Museum has entered into a swap agreement (as amended, the “Swap Agreement”) with Wells Fargo Bank, National Association (the “Swap Counterparty”) in a notional amount of $256,315,000. Under the terms of the Swap Agreement, the Museum has agreed to pay the Swap Counterparty a fixed annual interest rate of 3.632% of the notional amount and the Swap Counterparty agreed to pay the Museum a monthly variable rate equal to 59.5% of the one-month London Interbank Offered Rate plus 0.30%.

The Swap Agreement is subject to termination upon the occurrence of an event of default or termination event thereunder, which events include a reduction in the Museum’s ratings by Moody’s below “Baa2.” The Swap Agreement is also terminable at any time at the option of the Museum. The Museum may be required to make a substantial termination payment to the Swap Counterparty upon termination of the Swap Agreement, depending on the then-current market value of the swap transaction and even if the Museum is not the defaulting party. As of June 30, 2016, the Museum estimated that the termination payment that the Museum would have been required to pay if the Swap Agreement had been terminated on that date was approximately $100 million.

The Swap Counterparty has agreed that the Museum is not required to post any collateral with respect to the exposure of the market value of the swap transaction. However, under the terms of the Swap Agreement, the Museum may be required to post collateral to secure its obligations under the Swap Agreement in an amount equal to its exposure of the market value of the swap transaction under certain circumstances set forth in the Swap Agreement, including circumstances where the Swap Counterparty (or any affiliate thereof) ceases being a credit provider or Special Purchaser of any Series of Bonds. Currently, the Swap Counterparty is a Special Purchaser of a Series of the 2013 Direct Purchase Bonds.

The obligation of the Museum to make payments to the Swap Counterparty under the Swap Agreement is a general obligation of the Museum and the Holders of the 2016A Bonds do not have any right to any preference or priority over the Swap Counterparty.

See “CERTAIN INVESTMENT CONSIDERATIONS – Risks to the Corporation under the Swap Agreement” in this Official Statement.

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OTHER PERTINENT INFORMATION

Employees

For Fiscal Year 2016, the Museum operated with approximately 580 employees including private sector individuals employed by Museum Associates, temporary staff (employed by both Museum Associates and the County) and persons employed by the County. In addition, Museum Associates contracts with independent contractors for additional assistance in protective services, custodial support and restaurant and food services.

Museum Associates had approximately 514 regular full- and part-time employees, and approximately 26 temporary full- and part-time employees. The Museum Associates’ staff currently includes no unionized employees. In operating the Museum, Museum Associates adheres to all applicable local, state and federal laws and requires all temporary agencies and independent contractors providing services at the Museum to do so as well.

There were 37 full-time equivalent positions employed by the County. Of those, 30 were filled by full-time permanent employees and 7 were full-time equivalent temporary positions. Fourteen of the permanent employees and all of the temporary positions were represented by unions. County employees at LACMA are employed by the County Department of Museum of Art; Michael Govan serves as the Director of the Department. Certain of Museum Associates’ officers and senior management, including Mr. Govan and Ms. Ann Rowland, are employed by both the County and Museum Associates. See “GOVERNANCE AND MANAGEMENT – Senior Management.” In its dealings with County employees, Museum Associates adheres to the Civil Service Rules (as authorized and updated by the County Board of Supervisors) and a Memorandum of Understanding between the unions and the County.

Museum Associates believes that, in general, its current relationship with its employees, both those employed by Museum Associates and the County (unionized and non-unionized), is positive. Museum Associates has no knowledge of any existing or threatened employer-employee relations matters that would, if determined adversely to Museum Associates, have a material adverse effect on Museum Associates’ financial position.

Volunteers

The Museum’s Docent Council provides direct support to the Museum’s Education programs by conducting tours of the collections and exhibitions for school groups and the general public. The Museum Service Council provides hands-on administrative and visitor support throughout the campus. In Fiscal Year 2015-16, the Docent Council and the Museum Service Council provided a combined 63,939 hours of direct public service.

Litigation

There are no claims currently pending or, to the knowledge of the management of Museum Associates, threatened against Museum Associates which, if adversely determined, would have a material adverse effect on Museum Associates’ financial condition or operations.

Insurance

Museum Associates currently maintains both property and liability insurance on all Museum property (including art collections owned by Museum Associates or the County or on loan to LACMA). Insurance coverage is provided through policies with commercial insurance companies. Museum Associates maintains general liability insurance with a limit of $1 million for each occurrence and $2 million in the aggregate, and excess/umbrella liability insurance policies totaling $100 million. Museum Associates maintains property

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insurance with a limit of approximately $335 million, covering all LACMA facilities, including those owned by the County. Museum Associates also carries automobile liability, directors’ and officers’ liability, employment practices liability, cyber insurance, fiduciary liability and international liability. All relevant policies include terrorism coverage but exclude environmental exposures, such as asbestos and mold. Museum Associates’ property insurance policies do not include any coverage for damages caused by earthquake, except for fire or flood following an earthquake. See “INVESTMENT CONSIDERATIONS – Claims and Insurance Coverage” in this Official Statement.

Museum Associates also maintains a $600 million fine arts insurance policy issued by a commercial insurance company covering the permanent collections and loans, including artworks owned by the County, with sub-limits on earthquake and terrorism coverage. The proceeds of such insurance would be paid to Museum Associates and/or its art lenders if LACMA were to suffer a loss covered by the insurance.

Events such as acts of terrorism, natural disasters or other factors affecting the insurance industry may cause the costs of insurance to rise or a particular coverage to be unavailable. While the insurance that Museum Associates currently maintains may not be available for renewal and while Museum Associates may terminate or not renew certain policies if it concludes that the cost of such insurance is economically unreasonable, the Loan Agreement (see “CERTAIN INVESTMENT CONSIDERATIONS – Claims and Insurance Coverage” in this Official Statement) and the Funding Agreement both require Museum Associates to carry certain types of insurance.

County Insurance. The County self-insures for most general liability and property exposures. Neither the Indenture nor the Funding Agreement requires the County to maintain any insurance coverage.

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APPENDIX B

FINANCIAL STATEMENTS AS OF AND FOR THE YEAR ENDED JUNE 30, 2016 [THIS PAGE INTENTIONALLY LEFT BLANK]

MUSEUM ASSOCIATES

FINANCIAL STATEMENTS

YEAR ENDED JUNE 30, 2016

MUSEUM ASSOCIATES

FINANCIAL STATEMENTS

YEAR ENDED JUNE 30, 2016

CONTENTS

Page

Independent Auditor’s Report ...... 1

Statement of Financial Position ...... 3

Statement of Activities ...... 5

Statement of Cash Flows ...... 7

Notes to Financial Statements ...... 8

10990 Wilshire Boulevard 310.873.1600 T 16th Floor 310.873.6600 F Los Angeles, CA 90024

INDEPENDENT AUDITOR’S REPORT

To the Board of Trustees Museum Associates

Report on the Financial Statements We have audited the accompanying financial statements of Museum Associates (the Museum), which comprise the statement of financial position as of June 30, 2016, and the related statements of activities and cash flows for the year then ended, and the related notes to the financial statements.

Management’s Responsibility for the Financial Statements Management is responsible for the preparation and fair presentation of these financial statements in accordance with accounting principles generally accepted in the United States of America; this includes the design, implementation, and maintenance of internal control relevant to the preparation and fair presentation of financial statements that are free from material misstatement, whether due to fraud or error.

Auditor’s Responsibility Our responsibility is to express an opinion on these financial statements based on our audit. We conducted our audit in accordance with auditing standards generally accepted in the United States of America. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free from material misstatement.

An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial statements. The procedures selected depend on the auditor’s judgment, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal control relevant to the entity’s preparation and fair presentation of the financial statements in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the entity’s internal control. Accordingly, we express no such opinion. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of significant accounting estimates made by management, as well as evaluating the overall presentation of the financial statements.

We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion.

Opinion In our opinion, the financial statements referred to above present fairly, in all material respects, the financial position of the Museum as of June 30, 2016, and the changes in its net assets and its cash flows for the year then ended in accordance with accounting principles generally accepted in the United States of America.

An independent member of HLB International, a worldwide network of accounting firms and business advisors. To the Board of Trustees Museum Associates

Report on Summarized Comparative Information We have previously audited the Museum’s 2015 financial statements, and we expressed an unmodified audit opinion on those audited financial statements in our report dated September 25, 2015. In our opinion, the summarized comparative information presented herein as of and for the year ended June 30, 2015, is consistent, in all material respects, with the audited financial statements from which it has been derived.

Green Hasson & Janks LLP

October 11, 2016 Los Angeles, California

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STATEMENT OF FINANCIAL POSITION June 30, 2016 With Summarized Totals at June 30, 2015

ASSETS 2016 2015

Current assets Cash and cash equivalents $ 3,859,173 $ 2,120,893 Accounts receivable - current portion 803,094 924,948 Accrued revenue 3,137,946 2,033,050 Pledges receivable - current portion, net 23,325,350 23,948,338 Inventories 797,911 894,255 Prepaid expenses and other current assets 106,459 137,291

Total current assets 32,029,933 30,058,775

Noncurrent assets Investments 323,379,066 323,560,291 Accounts receivable - long-term portion 3,850,983 4,555,207 Pledges receivable - long-term portion, net 54,667,838 67,426,240 Receivables under trust agreement, net 219,769 218,106 Property and equipment, net 281,727,651 289,556,284 Revenue bond issuance costs, net 13,185,562 13,796,476

Total noncurrent assets 677,030,869 699,112,604

Total assets $ 709,060,802 $ 729,171,379

The accompanying notes are an integral part of these financial statements

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STATEMENT OF FINANCIAL POSITION June 30, 2016 With Summarized Totals at June 30, 2015

LIABILITIES AND NET ASSETS 2016 2015

Current liabilities Accounts payable and accrued liabilities $ 9,916,358 $ 7,710,520 Deferred lease revenue - current portion 1,397,539 1,397,539 Deferred revenue - current portion 469,570 439,596 Notes payable - current portion 1,650,001 1,137,462 Split-interest agreement liabilities 240,783 231,511

Total current liabilities 13,674,251 10,916,628

Noncurrent liabilities Revenue bonds 343,000,000 343,000,000 County funding agreement obligation 4,498,265 - Deferred lease revenue - long term portion 37,231,271 38,628,810 Deferred revenue - long term portion 375,000 750,000 Notes payable - long term portion - 1,100,000 Interest rate swap 100,753,320 69,125,720 Split-interest agreement liabilities 1,331,527 1,233,307 Underfunded pension liabilities 6,610,810 3,492,855

Total noncurrent liabilities 493,800,193 457,330,692

Total liabilities 507,474,444 468,247,320

Commitments and Contingencies (Note 14)

Net assets Unrestricted Board-designated, funds functioning as endowment 61,833,433 65,323,511 Donor-restricted endowment fund losses, net (1,730,814) (1,333,228) Other (6,662,842) 33,748,284 Temporarily restricted Funds functioning as endowment 38,118,688 39,734,416 Other 87,963,469 101,392,829 Permanently restricted – endowment funds 22,064,424 22,058,247

Total net assets 201,586,358 260,924,059

Total liabilities and net assets $ 709,060,802 $ 729,171,379

The accompanying notes are an integral part of these financial statements

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STATEMENT OF ACTIVITIES Year Ended June 30, 2016 With Summarized Totals for the Year Ended June 30, 2015

2016 Temporarily Permanently 2015 Unrestricted Restricted Restricted Total Total Revenues and support Revenues Membership dues $ 7,837,458 $ 337,386 $ - $ 8,174,844 $ 7,247,236 Admissions 7,357,397 - - 7,357,397 4,885,669 Investment income and gains, net 2,361,947 1,107,860 - 3,469,807 13,299,032 Unrealized loss on interest rate swap (31,627,600) - - (31,627,600) (9,385,608) County operating contract 23,081,000 - - 23,081,000 22,928,874 Auxiliary activities 2,226,703 50,020 - 2,276,723 2,421,007 Other 7,698,984 210,912 - 7,909,896 9,493,406

Total revenues 18,935,889 1,706,178 - 20,642,067 50,889,616

Support Gifts 7,378,447 15,605,476 6,177 22,990,100 47,765,967 Government grants 4,000 924,581 - 928,581 254,784 Fundraising events, net 2,050,559 2,429,402 - 4,479,961 4,083,249

Total support 9,433,006 18,959,459 6,177 28,398,642 52,104,000

Net assets released from restrictions Satisfaction of program restrictions 14,397,066 (14,397,066) - - - Expiration of time restrictions and other transfers 22,370,258 (22,370,258) - - -

Total net assets released from restrictions 36,767,324 (36,767,324) - - -

Total revenues and support 65,136,219 (16,101,687) 6,177 49,040,709 102,993,616

The accompanying notes are an integral part of these financial statements

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STATEMENT OF ACTIVITIES Year Ended June 30, 2016 With Summarized Totals for the Year Ended June 30, 2015

2016 Temporarily Permanently 2015 Unrestricted Restricted Restricted Total Total Expenses Program-related expenses Exhibitions and collections management $ 17,552,031 $ - $ - $ 17,552,031 $ 16,444,011 Curatorial 9,481,650 - - 9,481,650 9,494,040 Education and public programs 6,709,430 - - 6,709,430 6,339,650 Marketing and communication 5,495,544 - - 5,495,544 5,512,576 Operations and public services 14,391,793 - - 14,391,793 14,820,540 Property and deferred maintenance 9,022,522 - - 9,022,522 5,255,863 Depreciation expense 8,064,804 - - 8,064,804 8,030,476 Revenue bond interest expense and fees 12,964,789 - - 12,964,789 12,836,611 Revenue bond cost of issuance amortization 610,914 - - 610,914 610,914 Auxiliary activities 2,261,563 - - 2,261,563 2,600,462 General and administrative 11,752,385 - - 11,752,385 10,222,128 Development 5,392,010 - - 5,392,010 5,322,893

Total expenses 103,699,435 - - 103,699,435 97,490,164

Change in net assets before change related to collection items (38,563,216) (16,101,687) 6,177 (54,658,726) 5,503,452

Collection items purchased (5,735,574) - - (5,735,574) (16,859,940)

Collection items sold - 1,056,599 - 1,056,599 1,427,078

Change in net assets after change related to collection items (44,298,790) (15,045,088) 6,177 (59,337,701) (9,929,410)

Net assets, beginning of year 97,738,567 141,127,245 22,058,247 260,924,059 270,853,469

Net assets, end of year $ 53,439,777 $ 126,082,157 $ 22,064,424 $ 201,586,358 $ 260,924,059

The accompanying notes are an integral part of these financial statements

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STATEMENT OF CASH FLOWS Year Ended June 30, 2016 With Summarized Totals for the Year Ended June 30, 2015

2016 2015 Cash flows from operating activities Change in net assets $ (59,337,701) $ (9,929,410) Adjustments to reconcile change in net assets to cash (used in) provided by operating activities Net realized and unrealized gain on investments (2,473,518) (13,402,767) Unrealized loss on interest rate swap 31,627,600 9,385,608 Loss on sale of property - 311,880 Pledge provision increase - 1,000,000 Depreciation expense 8,064,804 8,030,476 Revenue bond cost of issuance amortization 610,914 610,914 Collection items purchased 5,735,574 16,859,940 Collection items sold (1,056,599) (1,427,078) Contributions restricted for endowment (6,177) (10,168) Change in operating assets and liabilities Accounts receivable and accrued revenue (278,818) 28,221,298 Pledges receivable, net 13,381,390 (4,289,121) Inventories 96,344 (9,595) Prepaid expenses and other current assets 30,832 10,956 Receivables under trust agreements, net (1,663) 24,011 Accounts payable and accrued liabilities 2,205,838 (877,509) Deferred lease revenue (1,397,539) 4,587,361 Deferred revenue (345,026) (1,182,766) Underfunded pension liabilities 3,117,955 1,292,342 Net cash (used in) provided by operating activities (25,790) 39,206,372 Cash flows from investing activities Net sales (purchases) of investments 2,654,743 (28,271,769) Net purchases of property and equipment (236,171) (173,972) Collection items purchased (5,735,574) (16,859,940) Collection items sold 1,056,599 1,427,078 Net cash used in investing activities (2,260,403) (43,878,603) Cash flows from financing activities Increase in county funding agreement obligation 4,498,265 - Payments on notes payable (2,087,461) (1,329,163) Increase in notes payable 1,500,000 2,741,625 Increase in split-interest agreement liabilities 107,492 71,209 Contributions restricted for endowment 6,177 10,168 Net cash provided by financing activities 4,024,473 1,493,839 Net increase (decrease) in cash and cash equivalents 1,738,280 (3,178,392) Cash and cash equivalents, beginning of year 2,120,893 5,299,285 Cash and cash equivalents, end of year $ 3,859,173 $ 2,120,893 Supplemental disclosure of noncash investing activities During the years ended June 30, 2016 and 2015, the Museum paid $12,333,705 and $13,438,230, respectively, in interest expenses and related fees.

The accompanying notes are an integral part of these financial statements

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NOTES TO FINANCIAL STATEMENTS June 30, 2016

NOTE 1 - GENERAL

Museum Associates (the Museum) is a California nonprofit corporation whose mission is to serve the public through the collection, conservation, exhibition and interpretation of significant works of art from a broad range of cultures and historical periods, and through the translation of these collections into meaningful educational, aesthetic, intellectual and cultural experiences for the widest array of audiences. To that end, the Museum finances the construction of new facilities, mounts exhibitions and conducts other educational programs to enhance public knowledge of the arts through the operation of the Los Angeles County Museum of Art (LACMA).

The Museum is the premier encyclopedic art museum in the Western United States. The Museum’s collection of more than 130,000 artworks from around the world spans the history of art, from ancient to contemporary times. Through its varied collections, the Museum is both a resource to and a reflection of the many cultural communities and heritages in Southern California and throughout the world.

In conformity with its art collection policy, the collection items acquired by the Museum are not capitalized in its statement of financial position.

NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

(a) BASIS OF PRESENTATION

The accompanying financial statements have been prepared on the accrual basis of accounting in accordance with accounting principles generally accepted in the United States of America.

The accompanying financial statements include a statement of financial position that presents the amounts for each of the three classes of net assets: unrestricted, temporarily restricted and permanently restricted. These net assets are classified based on the existence or absence of donor-imposed restrictions and the statement of activities reflects the changes in those categories of net assets.

Temporarily restricted net assets include those assets whose use by the Museum has been limited by donors to later periods of time or for specified purposes. Permanently restricted net assets include those net assets that must (to the extent required by donor restrictions) be maintained in perpetuity; the investment return from such assets may be used for purposes as specified by the donor or, if the donor has not specified a purpose, for purposes as approved by the Board of Trustees.

(b) CASH AND CASH EQUIVALENTS

For purposes of the statement of cash flows, the Museum considers all short-term, highly liquid investments with original maturities of three months or less, when purchased, to be cash equivalents.

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NOTES TO FINANCIAL STATEMENTS June 30, 2016

NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)

Accounts receivable are recorded when billed or accrued and represent claims against or commitments of third parties that will be settled in cash. The carrying value of receivables represents their estimated net realizable value. If events or changes in circumstances indicate that specific receivable balances could become impaired an allowance is recorded. Past due receivable balances are written-off when internal collection efforts have been unsuccessful in collecting the amount due. At June 30, 2016, the Museum evaluated the collectability of its accounts receivable and determined that no allowance was necessary.

(d) PLEDGES RECEIVABLE

Contributions, including endowment gifts and pledges, as well as unconditional promises to give, are recognized as revenue in the period promised. Amounts expected to be collected within one year are recorded at their net realizable value. Amounts expected to be collected in future years are recorded at the present value of estimated future cash flows discounted at an appropriate market interest rate at the time of the contribution. The Museum has established a general reserve considered to be adequate but not excessive in relation to the outstanding pledge balances.

(e) INVENTORIES

Inventories consist of Museum Shop goods and are stated at the lower of weighted- average cost or market.

(f) INVESTMENTS

The Museum’s investments are reflected on the statement of financial position at fair value. Changes in unrealized gains and losses resulting from changes in fair value are reflected in the statement of activities. The Museum’s investments consist of long-only equities, fixed income securities, absolute return funds, partnership interests and other funds.

The Museum’s long-only equity investments and fixed income securities are generally publicly traded on national securities exchanges and have readily available quoted market values. The Museum’s other partnership interests and other funds, and portions of its absolute return fund investments, are carried at estimated fair value. The Museum establishes fair value of these nonmarketable investments through (a) observable trading activity reported at net asset value, or (b) a documented valuation process including review of audited reports for the investment funds, verification of the fair value of marketable securities in the funds, regular review of fund manager valuation approaches, and monitoring of the fund activities. Because of the inherent uncertainty of valuation of nonmarketable investments, the estimated fair values may differ significantly from the values that would have been used had a ready market for the investments existed, and the differences could be material.

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NOTES TO FINANCIAL STATEMENTS June 30, 2016

NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)

(f) INVESTMENTS (continued)

Investments received through gifts are recorded at estimated fair value at the date of donation.

Dividend and interest income are accrued when earned. Dividend, interest income and investment income earned from investments in all net asset classifications is allocated based on the individual investment asset as a percentage of total investment assets. Income from permanently restricted investments is recorded as temporarily restricted, except where the instructions of the donor specify otherwise.

(g) RECEIVABLES UNDER TRUST AGREEMENTS AND SPLIT-INTEREST AGREEMENT LIABILITIES

The Museum has been named as the beneficiary of two trust agreements for which a third party has been named as the trustee. Assets contributed by the donor under these trust agreements are recognized at the present value of the estimated future distributions to be received. The interest rate used in determining the present value was the Museum’s appropriate market rate of return at the date of the gift. The present value of the total future amounts to be received was $219,769 at June 30, 2016.

Assets contributed by donors under gift annuity agreements and controlled by the Museum are recognized at fair value with a corresponding liability to beneficiaries of the annuity agreements. Such liability is calculated as the present value of the estimated future cash flows to be distributed to the income beneficiaries over their expected lives. The Museum has determined such liability using investment returns consistent with the composition of investment portfolios, single or joint life expectancies and the discount rates applicable in the years in which the agreements were entered into. The present value of these split-interest liabilities was $1,572,310 at June 30, 2016. The Museum has established a segregated reserve fund of $2,279,561 at June 30, 2016 which exceeds the present value of the liabilities.

(h) PROPERTY AND EQUIPMENT

Costs of renovating and constructing facilities located on land owned by the County of Los Angeles (the County) are expensed, as title to these facilities is either vested in the County or transferred to the County at the close of the construction period, which is relatively short. Facilities that are not located on land owned by the County are capitalized at cost and depreciated using the straight-line method over an estimated life of forty years.

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NOTES TO FINANCIAL STATEMENTS June 30, 2016

NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)

(h) PROPERTY AND EQUIPMENT (continued)

Equipment and other property that are purchased are recorded at cost. Equipment and other property are depreciated using the straight-line method over the estimated useful life of five years.

(i) LONG-LIVED ASSETS

The Museum reviews long-lived assets for impairment whenever events or changes in circumstances indicate that the carrying amount of the assets may not be recoverable. An impairment loss is recognized when the sum of the undiscounted future cash flows is less than the carrying amount of the asset, in which case a write-down is recorded to reduce the related asset to its estimated fair value. No impairment losses were recognized on long-lived assets during the year ended June 30, 2016.

(j) ART COLLECTION

In conformity with the practice followed by many museums, art objects purchased by or donated to the Museum are not capitalized in the statement of financial position. The Museum’s art collection is made up of art objects that are held for exhibition and various other program activities. Each of the items is cataloged, preserved and cared for, and activities verifying their existence and assessing their condition are performed continuously. Purchased collection items are recorded as decreases in unrestricted net assets in the year in which the items are acquired. Contributed collection items are excluded from the financial statements.

Proceeds from deaccessions or insurance recoveries are reflected as increases in the appropriate net asset classes. Deaccession proceeds are required by Museum policy to be applied to the acquisition of works of art for the permanent collection. The Museum purchased collection items in the amount of $5,735,574 during the year ended June 30, 2016. The Museum received donated art objects valued for insurance purposes at an estimated amount of $25,366,000 during the year ended June 30, 2016.

(k) FINANCING COSTS

Financing costs are capitalized and amortized using the straight-line method over the terms of the related financing.

(l) REVENUES AND SUPPORT

Annual membership dues and admissions are recognized as revenue when such income is received. Grant revenues are recognized when their conditions are met either by expenditures being incurred or benchmarks being met.

Revenues from fundraising events are net of expenses of $2,586,668 for the year ended June 30, 2016.

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NOTES TO FINANCIAL STATEMENTS June 30, 2016

NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)

(m) CONTRIBUTED SERVICES

A substantial number of unpaid volunteers, including council members, have made significant contributions of their time to develop the Museum’s programs. The value of this contributed time is not reflected in these financial statements, as it is not susceptible to objective measurement or valuation.

(n) INCOME TAXES

The Museum is a California not-for-profit corporation and is exempt from taxation under Section 501(c)(3) of the Internal Revenue Code (IRC) and is also exempt from state franchise taxes.

In accordance with Accounting Standards Codification Topic No. 740, “Uncertainty in Income Taxes”, the Museum recognizes the impact of tax positions in the financial statements if that position is more likely than not to be sustained on audit based on the technical merits of the position.

During the year ended June 30, 2016 the Museum performed an evaluation of uncertain tax positions and did not note any matters that would require recognition in the financial statements or which may have an effect on its tax-exempt status and to date not recorded any uncertain tax positions. The Museum is no longer subject to U.S. federal tax examinations by tax authorities for the years ended before June 30, 2013 and state examinations for the years ended before June 30, 2012.

(o) ESTIMATED FAIR VALUE OF FINANCIAL INSTRUMENTS

Fair value is the price that would be received to sell an asset or paid to transfer the liability in an orderly transaction between market participants at the measurement date. In determining fair value, the Museum uses the market or income approach. Based on this approach, the Museum utilizes certain assumptions about the risk and or risks inherent in the inputs to the valuation technique. These inputs can be readily observable, market-corroborated or generally unobservable inputs. The Museum utilizes valuation techniques that maximize the use of observable inputs and minimize the use of unobservable inputs. Based on the observability of the inputs used in the valuation techniques the Museum is required to provide information according to the fair value hierarchy. The fair value hierarchy ranks the quality and the reliability of the information used to determine fair values and in general is defined as follows:

Level 1 - Observable inputs that reflect quoted prices (unadjusted) for identical assets or liabilities in active markets.

Level 2 - Include other inputs that are directly or indirectly observable in the marketplace.

Level 3 - Unobservable inputs which are supported by little or no market activity.

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NOTES TO FINANCIAL STATEMENTS June 30, 2016

NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)

(o) ESTIMATED FAIR VALUE OF FINANCIAL INSTRUMENTS (continued)

The fair value hierarchy also requires an entity to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value. For the year ended June 30, 2016, the application of valuation techniques applied to similar assets and liabilities has been consistent with the techniques applied during the year ended June 30, 2015.

Financial instruments included in the Museum’s statement of financial position include cash and cash equivalents, accounts receivable and accrued revenue, pledges receivable, investments, receivables under trust agreement, accounts payable and accrued liabilities, notes payable, split-interest agreement liabilities, and interest rate swap.

For cash and cash equivalents, accounts receivable and accrued revenue, accounts payable and accrued liabilities, the carrying amounts represent a reasonable estimate of fair values due to their short-term maturity. Pledges receivable have been discounted using applicable market rates to approximate fair value. The receivables under trust agreement and split-interest agreement liabilities are reflected at their estimated fair values using the methodology described above. The estimated fair value of the Museum’s notes payable approximates the carrying value of these liabilities as these bear interest commensurate with their risks. Investments and derivative financial instruments (i.e., interest rate swaps) are reflected at estimated fair value as described below.

Investments The basis of fair value for the Museum’s investments differs depending on the investment type. For certain investments, market value is based on quoted market prices. These are classified within Level 1 of the valuation hierarchy. For other investments that (a) do not have a readily determinable fair value and (b) prepare their financial statements consistent with the measurement principles of an investment company or have the attributes of an investment company, they are valued, as a practical expedient, utilizing the net asset valuations provided by their respective investment manager or general partner.

Interest Rate Swap The Museum has an interest rate swap agreement, in order to manage exposure to interest rate fluctuations.

The interest rate swap is valued separately from its underlying debt and is accounted for using a “mark-to-market” basis. As market fixed rates change over time, existing fixed rate swaps become more or less valuable than at inception, resulting in a mark- to-market value which includes either an unrealized gain or loss.

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NOTES TO FINANCIAL STATEMENTS June 30, 2016

NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)

(o) ESTIMATED FAIR VALUE OF FINANCIAL INSTRUMENTS (continued)

The fair value of the interest rate swap is estimated using Level 2 inputs, which are based on model-derived valuations in which all significant inputs and significant value drivers are observable in active markets. The estimated market value of the interest rate swap at June 30, 2016 was computed by the counterparty and includes adjustments to reflect counterparty credit risk and the Museum’s non- performance credit risk in estimating the fair value.

(p) CONCENTRATION OF CREDIT RISK

Credit risk is the failure of another party to perform in accordance with contract terms. Financial instruments which potentially subject the Museum to concentrations of credit risk consist primarily of cash and cash equivalents, pledges and receivables, investments and interest rate swaps.

The Museum maintains its cash balances with several financial institutions that from time to time exceed amounts insured by the Federal Deposit Insurance Corporation. To date, the Museum has not experienced any losses in such accounts and believes it is not exposed to any significant credit risk on cash.

With respect to pledges and receivables, the Museum routinely assesses the financial strength of its creditors and believes that the related credit risk exposure is limited. At June 30, 2016, 78% of pledges are due from members of the Board of Trustees or their affiliates.

Investment securities, in general, are exposed to various risks, such as interest rate, credit and overall market volatility. Due to the level of risk associated with certain investment securities, it is reasonably possible that changes in the value of investment securities will occur in the near term and that such change could materially affect the amounts reported in the statement of financial position. The Museum attempts to limit its credit risk associated with investments through diversification and by utilizing the expertise and processes of an outside investment consultant.

(q) USE OF ESTIMATES

The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements. Estimates also affect the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates.

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NOTES TO FINANCIAL STATEMENTS June 30, 2016

NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)

(r) COMPARATIVE TOTALS

The financial statements include certain prior-year summarized comparative information in total but not by net asset class. Such information does not include sufficient detail to constitute a presentation in conformity with generally accepted accounting principles. Accordingly, such information should be read in conjunction with the Museum’s financial statements for the year ended June 30, 2015 from which the summarized information was derived.

(s) RECLASSIFICATIONS

Certain reclassifications have been made to the prior-year summarized comparative information for 2015 to conform to the 2016 financial statement presentation.

(t) NEW ACCCOUNTING PRONOUNCEMENTS

In May 2015, the FASB issued Accounting Standards Update No. 2015-07, Disclosures for Investments in Certain Entities that Calculate Net Asset Value per Share (or Its Equivalent) (ASU 2015-07), which is effective for fiscal years beginning after December 15, 2016 for entities other than public business entities. The ASU eliminates the requirement to categorize investments in the fair value hierarchy if the fair value is measured at net asset value (NAV) per share (or its equivalent) using the practical expedient in the FASB’s fair value measurement guidance. As permitted by the ASU, the Museum has early adopted this pronouncement and investments that are measured at fair value using the NAV per share (or its equivalent) practical expedient have not been categorized in the fair value hierarchy.

In February 2016, FASB issued Accounting Standards Update No. 2016-02, Leases (ASU 2016-02), which is intended to improve financial reporting about leasing transactions. The new standard will require organizations that lease assets with terms of more than 12 months to recognize on the statement of financial position the assets and liabilities for the rights and obligations created by those leases. The ASU also will require disclosures to help financial statement users better understand the amount, timing, and uncertainty of cash flows arising from leases. These disclosures include qualitative and quantitative requirements and providing additional information about the amounts recorded in the financial statements. For the Museum, the ASU will be effective for the year ended June 30, 2020.

In August 2016, FASB issued Accounting Standards Update No. 2016-14, Presentation of Financial Statements of Not-for-Profit Entities (Topic 958), which is intended to reduce complexity in financial reporting. The ASU focuses on improving the current net asset classification requirements and information presented in financial statements that is useful in assessing a nonprofit’s liquidity, financial performance, and cash flows. For the Museum, the ASU will be effective for the year ended June 30, 2019.

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NOTES TO FINANCIAL STATEMENTS June 30, 2016

NOTE 3 - ACCOUNTS RECEIVABLE

At June 30, 2016, the Museum had $4,654,077 in accounts receivable.

In November 2014, the Museum granted a ninety-six month easement agreement with an option to extend an additional twelve months to Metro of land it owns for the construction of a subway extension. Accounts receivable - current portion and accounts receivable - long term portion on the statement of financial position include $704,224 and $3,850,983, respectively, related to this agreement. At June 30, 2016, deferred lease revenue - current portion and deferred lease revenue - long term portion related to the agreement was $737,840 and $4,058,118, respectively.

NOTE 4 - PLEDGES RECEIVABLE

At June 30, 2016, the Museum had the following pledges receivable:

Pledges Receivable - Current Portion $ 23,325,350 Due Between One and Five Years 30,535,565 Due after Five Years 40,950,699 Present Value Discount of Approximately 0 to 5% (11,818,426) Allowance for Doubtful Pledges (5,000,000) PLEDGES RECEIVABLE - LONG-TERM PORTION (NET) 54,667,838 TOTAL PLEDGES RECEIVABLE (NET) $ 77,993,188

NOTE 5 - INVESTMENTS AND FAIR VALUE MEASUREMENTS

The Museum’s investments consist of operating reserves and funds functioning as endowment and funds which have been restricted by the donor as endowment. The Museum’s investments are managed as a single diversified portfolio governed by the Museum’s investment policy, which sets asset allocation ranges to achieve portfolio diversification and also a minimum percentage of liquid assets. The Museum establishes the fair value of Level 1 investments based on quoted market prices. The Museum establishes Level 2 investments through observation of trading activity reported at net asset value or market values of similar observable or underlying assets. The Museum establishes Level 3 investments, if any, through a documented valuation process including review of audited reports for the investment funds, verification of the fair value of marketable securities in the funds, regular review of fund manager valuation approaches, and monitoring of fund activities. For other investments that (a) do not have a readily determinable fair value and (b) prepare their financial statements consistent with the measurement principles of an investment company or have the attributes of an investment company, they are valued, as a practical expedient, utilizing the net asset valuations provided by their respective investment manager or general partner.

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NOTES TO FINANCIAL STATEMENTS June 30, 2016

NOTE 5 - INVESTMENTS AND FAIR VALUE MEASUREMENTS (continued)

During the year ended June 30, 2016, investment income and gains, net consisted of the followings:

Investment Income $ 1,642,387 Net Realized and Unrealized Gains 2,473,518 Investment Expenses (646,098)

INVESTMENT INCOME AND GAINS (NET) $ 3,469,807

As of June 30, 2016, the Museum’s investments and related liabilities were classified by level within the valuation hierarchy as follows:

NAV as Practical Level 1 Level 2 Level 3 Expedient Total INVESTMENTS: Cash and Cash Equivalents $ 14,007,665 $ - $ - $ - $ 14,007,665 Long-Only Equity 101,854,277 - - 32,067,286 133,921,563 Fixed Income 1,051,670 - - - 1,051,670 Absolute Return - - - 109,261,523 109,261,523 Other Partnerships and Other Funds - - - 65,136,645 65,136,645

TOTAL INVESTMENTS 116,913,612 - - 206,465,454 323,379,066

LIABILITIES: Split-interest Agreement Liabilities - (1,572,310) - - (1,572,310)

NET $ 116,913,612 $ (1,572,310) $ - $ 206,465,454 $ 321,806,756

The Museum recognizes transfers at the beginning of each reporting period. Transfers between Level 1 and 2 investments generally relate to whether a market becomes active or inactive. Transfers between Level 2 and 3 investments relate to whether significant relevant observable inputs are available for the fair value measurement in their entirety and when redemption rules become more or less restrictive. There were no transfers between levels during the year ended June 30, 2016. Investments that were classified as level 2 or level 3 for the year ended June 30, 2015 were reclassified to NAV as practical expedient for the year ended June 30, 2016 as the result of adopting ASU 2015-07.

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NOTES TO FINANCIAL STATEMENTS June 30, 2016

NOTE 5 - INVESTMENTS AND FAIR VALUE MEASUREMENTS (continued)

The following table summarizes the redemption frequency and notice period for the Museum's investments using NAV as practical expedient as of June 30, 2016:

Redemption Redemption Fair Value Frequency Notice Period Long-Only Equity $ 32,067,286 Monthly 30 - 60 Days Absolute Return 109,261,523 Monthly to 30 - 90 Days Illiquid Unless Illiquid Other Partnerships and Other Funds 65,136,645 Illiquid Illiquid TOTAL $ 206,465,454

Total unfunded commitments at June 30, 2016 amounted to $42,772,160.

NOTE 6 - PROPERTY AND EQUIPMENT

Property and equipment at June 30, 2016 consisted of the following:

Land $ 35,747,913 Buildings and Improvements 303,277,925 Equipment and Other Property 10,803,029 TOTAL 349,828,867 Less: Accumulated Depreciation (68,101,216) PROPERTY AND EQUIPMENT (NET) $ 281,727,651

Depreciation expense amounted to $8,064,804 for the year ended June 30, 2016.

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NOTES TO FINANCIAL STATEMENTS June 30, 2016

NOTE 7 - REVENUE BONDS AND INTEREST RATE SWAP

(a) REVENUE BONDS

As of June 30, 2016, the Museum had revenue bonds outstanding totaling $343,000,000. The bonds consist of four series, including floating rate notes (FRN’s) and direct purchase bonds (DP) in the following amounts and with terms as indicated:

Index Series Par Mode Spread (1) Term Tender Date (2) 2013A 78,000,000 FRN 1.75% 70% 5 years Aug 1, 2018 2013B 115,000,000 DP 1.05% 67% 4 years Aug 1, 2017 2013C 100,000,000 DP 1.05% 67% 4 years Aug 1, 2017 2013D 50,000,000 DP 1.05% 67% 4 years Aug 1, 2017

(1) % of one-month LIBOR (2) See Note 15 for subsequent event

Under the terms of the Loan Agreement, the Museum is subject to a financial covenant, the adjusted unrestricted net assets to indebtedness ratio (“UNA ratio”), which is tested each June 30 and December 31. If the ratio falls below 0.73 more than one time during the term of the direct purchase agreements, it is an event of default. As of June 30, 2016, the UNA ratio was 0.94.

As of June 30, 2016, the bonds’ mandatory redemption requirements are as follows:

Redemption Date December 1, 2030 $ 15,990,000 2031 24,185,000 2032 24,425,000 2033 55,680,000 2034 55,680,000 2035 55,680,000 2036 55,680,000 2037 55,680,000 Total $ 343,000,000

(b) INTEREST RATE SWAP

The Museum has an interest rate swap agreement with a bank, with an aggregate notional amount of $256,315,000 and termination date of December 1, 2037. Under the terms of this agreement, the Museum agrees to pay the bank a synthetic fixed amount of interest, 3.632% per annum, and will receive 59.5% of one-month LIBOR (0.465% at June 30, 2016) plus 0.3%. The Museum can terminate this agreement at any time, but the bank may terminate the agreement only if certain adverse conditions occur.

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NOTES TO FINANCIAL STATEMENTS June 30, 2016

NOTE 7 - REVENUE BONDS AND INTEREST RATE SWAP (continued)

(b) INTEREST RATE SWAP (continued)

As of June 30, 2016, the fair value of the interest rate swap liability was $100,753,320. The aggregate unrealized loss reflecting the change in the swap value for the year ended June 30, 2016 was $31,627,600.

The Museum amortizes its revenue bond issuance costs using the straight-line method over the term of the related debt. At June 30, 2016, the aggregate capitalized costs on the bonds were $20,202,226, net of $7,016,664 of accumulated amortization, and are included under revenue bond issuance costs, net on the statement of financial position. The Museum recognized $610,914 in amortization costs on the capitalized bond issuance costs for the year ended June 30, 2016, and such costs are included under revenue bond cost of issuance amortization on the statement of activities.

NOTE 8 - COUNTY FUNDING AGREEMENT OBLIGATION

On April 14, 2015, the Museum entered into an agreement with the County to reimburse the Museum for feasibility and planning costs associated with the replacement of the Museum’s East Campus buildings (the Project) up to $7,500,000. As of June 30, 2016, the County reimbursed the Museum $4,498,265. Amounts reimbursed are expected to become part of the County’s $125,000,000 contribution to the Museum upon the County’s approval of the Environmental Impact Report (EIR) for the Project on or before January 1, 2020. In the event the County does not approve the EIR, amounts reimbursed become payable to the County, plus accrued interest, within 60 days of written notice.

NOTE 9 - DEFERRED LEASE REVENUE

At June 30, 2016, the Museum had $38,628,810 in deferred lease revenue associated with three long-term agreements. The agreements related to the lease of a building and land owned by the Museum for the development by The Academy Foundation of a motion picture arts and sciences museum, the related easement of adjacent land for construction of the motion picture arts and sciences museum and an unrelated easement of other land for the construction of a subway extension (see Note 3). Lease revenue associated with the long- term agreements is recognized over the terms of the agreements with the unrecognized portions being reflected as deferred lease revenue on the statement of financial position.

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NOTES TO FINANCIAL STATEMENTS June 30, 2016

NOTE 10 - NOTES PAYABLE

Notes payable at June 30, 2016 is related to four installment payment obligations for purchases of artwork. The obligations are unsecured and interest free. All obligations are reflected as notes payable - current portion on the statement of financial position.

NOTE 11 - NET ASSETS

Unrestricted, temporarily restricted and permanently restricted net assets at June 30, 2016 were available for the following purposes:

Temporarily Permanently Unrestricted Restricted Restricted Total

Endowment and Funds Functioning as Endowment: Operating Support $ 59,829,832 $ - $ 712,337 $ 60,542,169 Restricted Operating Support - 33,667,242 15,139,214 48,806,456 Art Acquisitions 2,003,601 4,451,446 6,212,873 12,667,920 Donor Restricted Endowment Fund Losses (1,730,814) - - (1,730,814)

TOTAL ENDOWMENT AND FUNDS FUNCTIONING AS ENDOWMENT 60,102,619 38,118,688 22,064,424 120,285,731

Other Funds: Programs 177,508,040 83,159,114 - 260,667,154 Art Acquisitions 47,220 4,804,355 - 4,851,575 Property and Equipment (184,218,102) - - (184,218,102)

TOTAL OTHER FUNDS (6,662,842) 87,963,469 - 81,300,627

TOTAL $ 53,439,777 $ 126,082,157 $ 22,064,424 $ 201,586,358

NOTE 12 - ENDOWMENT

The Museum’s endowment funds consist of funds functioning as endowment through (a) designation by the Board, (b) temporarily restricted funds managed as endowment funds and (c) donor-restricted endowment funds. The earnings of the Museum’s endowment funds support education and art programs, and the mission of the Museum. Net assets associated with endowment funds, including funds designated by the board to function as endowment, are classified and reported based on the existence or absence of donor-imposed restrictions.

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NOTES TO FINANCIAL STATEMENTS June 30, 2016

NOTE 12 - ENDOWMENT (continued)

At June 30, 2016, the Museum’s endowment net asset composition by type of fund was as follows:

Temporarily Permanently Unrestricted Restricted Restricted Total

Board Designated Endowment Funds $ 61,833,433 $ - $ - $ 61,833,433 Temporarily Restricted Funds Managed as Endowment Funds - 38,118,688 - 38,118,688 Donor Restricted Endowment Funds (1,730,814) - 22,064,424 20,333,610

TOTAL ENDOWMENT FUNDS $ 60,102,619 $ 38,118,688 $ 22,064,424 $ 120,285,731

From time to time the fair value of assets associated with individual donor-restricted endowment funds may fall below the level that the donor requires the Museum to retain as a fund of perpetual duration. Deficiencies of this nature that are reported in unrestricted net assets were $1,730,814 as of June 30, 2016. These deficiencies resulted from unfavorable market fluctuations occurring after the investment of permanently restricted contributions and continued appropriations for certain programs, which was deemed prudent by the Board of Trustees.

For the year ended June 30, 2016, the Museum’s endowment net assets changed as follows:

Temporarily Permanently Unrestricted Restricted Restricted Total

Balance - Beginning of Year $ 63,990,283 $ 39,734,416 $ 22,058,247 $ 125,782,946 Investment Income and Realized and Unrealized Appreciation (Net) 344,372 379,954 - 724,326

TOTAL 64,334,655 40,114,370 22,058,247 126,507,272

Contributions - - 6,177 6,177 Transfers to Programs (3,834,450) (2,393,268) - (6,227,718) Reclassification of Underwater Funds (397,586) 397,586 - -

BALANCE - END OF YEAR $ 60,102,619 $ 38,118,688 $ 22,064,424 $120,285,731

Investment income related to the Museum’s permanently restricted endowments is recorded as temporarily restricted revenue unless otherwise directed by the donor’s gift instrument.

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NOTES TO FINANCIAL STATEMENTS June 30, 2016

NOTE 12 - ENDOWMENT (continued)

The Museum’s endowment spending policy is based on the trailing market value of its endowment. Specifically, it is 5% of the average market value of the endowment at each of the twelve prior quarters as of March 31 in the most recent fiscal year. The spending policy is reviewed by the Finance Committee of the Board of Trustees annually.

As delegated authority by the full Board, the Finance Committee of the Board has adopted an investment policy that governs the management and oversight of the endowment funds and other investments (endowment and reserves). The policy sets forth the objectives for the endowment and reserves of the Museum, the strategies to achieve the objectives, procedures for monitoring and control, and the delineation of responsibilities for the Finance Committee, consultant, investment managers, staff and custodians in relation to the portfolio. The policy is intended to allow for sufficient flexibility in the management oversight process to capture investment opportunities as they may occur, while at the same time setting forth reasonable risk control parameters that a prudent person would take in the execution of the investment program. Investment assets are managed on a total return basis, with emphasis on both preservation of capital and acceptance of investment risk necessary to achieve favorable performance on a risk-adjusted basis. In addition to parameters of return and risk, the policy establishes minimum liquidity guidelines for the portfolio. Other objectives are to maintain or enhance the real purchasing power of the endowment and reserves after covering its spending rate; to provide sufficient cash to cover debt interest and retirement of debt over the life of the Museum’s outstanding debt; to outperform a policy benchmark return, after fees, at a lower level of risk over seven- to ten- year rolling periods; and to diversify investments to reduce the impact of losses in single investments, industries or asset classes.

NOTE 13 - EMPLOYEE BENEFIT PLANS

The Museum sponsors four employee benefit plans as described below:

(a) DEFINED BENEFIT PLAN

The Museum sponsors a defined benefit pension plan. Retirement benefits are provided through a noncontributory defined-benefit retirement plan (the Plan) for generally all employees who have completed one year of service. Employees are vested in the plan after five years of service. The Museum’s funding policy is to contribute amounts to the Plan sufficient to meet the minimum funding requirements of the Employee Retirement Income Security Act, plus additional amounts as determined to be appropriate. Contributions to the Plan were $2,200,000 during the year ended June 30, 2016.

The following sets forth the components of net periodic pension costs and the obligations and funded status of the defined benefit plan. Valuations of assets and liabilities are determined using a measurement date of June 30.

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NOTES TO FINANCIAL STATEMENTS June 30, 2016

NOTE 13 - EMPLOYEE BENEFIT PLANS (continued)

(a) DEFINED BENEFIT PLAN (continued)

Net periodic pension cost for the year ended June 30, 2016:

Service Cost $ 1,737,893 Interest Cost 1,057,883 Expected Return on Plan assets (1,528,294) Amortization of Prior Service Cost 128,798 Amortization of Actuarial Losses 305,643

NET PERIODIC PENSION COST $ 1,701,923

Obligation and funded status at June 30, 2016:

Change in Benefit Obligation: Benefit Obligation - Beginning Of Year $ 23,888,210 Service Cost 1,737,893 Interest Cost 1,057,883 Actuarial Loss 2,564,777 Benefits Paid (332,650) BENEFIT OBLIGATION - END OF YEAR 28,916,113 Change in Plan Assets: Fair Value of Plan Assets - Beginning of Year 20,395,355 Actual Return on Plan Assets 42,598 Employer Contributions 2,200,000 Benefit Payments (332,650) FAIR VALUE OF PLAN ASSETS - END OF YEAR 22,305,303 FUNDED STATUS $ (6,610,810)

The funded status at June 30, 2016 is reflected under underfunded pension liabilities on the statement of financial position.

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NOTES TO FINANCIAL STATEMENTS June 30, 2016

NOTE 13 - EMPLOYEE BENEFIT PLANS (continued)

(a) DEFINED BENEFIT PLAN (continued)

Weighted-average assumptions used to determine benefit obligations were as follows at June 30, 2016:

Discount rate 4.18% Expected return on plan assets 7.50% Rate of compensation increase 3.00%

The discount rate is estimated based on the yield on a portfolio of high-quality debt instruments. Expected long-term rate of return on plan assets is the projected rate for plan assets, and the rate of compensation increase is estimated based on the Museum’s historical rate. The Museum’s management develops all actuarial assumptions with a third-party pension actuary.

Plan assets are invested in a diversified portfolio whose value is subject to fluctuations of the securities market.

Changes in this value attributable to differences between actual and assumed returns on plan assets are deferred as unrecognized gains or losses and included in the determination of net pension expense over time.

The Museum expects to contribute $1,750,000 to the Plan for the year ending June 30, 2017.

Benefit payments, which reflect expected future service, as appropriate, are expected to be paid as follows:

Years Ending June 30 2017 $ 2,920,004 2018 1,594,189 2019 3,024,023 2020 3,344,585 2021 2,319,127 2022 to 2026 11,711,516

Total $ 24,913,444

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NOTES TO FINANCIAL STATEMENTS June 30, 2016

NOTE 13 - EMPLOYEE BENEFIT PLANS (continued)

(a) DEFINED BENEFIT PLAN (continued)

Investment allocation decisions for plan assets are made in order to achieve the Plan’s investment return objectives, consistent with its risk parameters. The investment objectives are to achieve an absolute total return of 8% - 10% as measured as an average annual return over a seven to ten year period. This is in order to attain or beat the actuarial target rate of return (currently 7.5%) for the plan. Its risk parameters include:

Avoiding failure to provide sufficient capital to meet the Plan’s distribution obligations

Avoiding sustained or meaningful underperformance relative to the Plan’s actuarial target rate of return

The risk parameters will be judged with the following criteria: To achieve the targeted rate of return, while at the same time experiencing a level of market/systematic risk no greater than 70% of the MSCI World Index as measured by BETA. The portfolio’s total volatility (as measured by Standard Deviation) should be no greater than a passively managed portfolio consisting of 75% MSCI World and 25% Barclays Aggregate Bond indices.

In order to achieve the above return and risk objectives, the Plan asset allocation makes use of a broadly diverse group of investments to provide returns from each separate investment that are relatively uncorrelated with those of other investments in the Plan portfolio. As part of the allocation, a portion of the investments provides high liquidity in order to meet known and potential immediate benefit pay-outs. Other investments are less liquid consistent with the broad asset allocation in order to achieve the long-term investment objective.

As of June 30, 2016, the Museum’s plan assets were classified by level within the valuation hierarchy as follows:

NAV as Practical Level 1 Level 2 Level 3 Expedient Total

Cash $ 537,490 $ - $ - $ - $ 537,490 Fixed Income 2,130,074 - - - 2,130,074 Long-Only Equity 7,753,398 - - 1,201,715 8,955,113 Long/Short Equities - - - 3,517,717 3,517,717 Alternatives - - - 7,164,909 7,164,909

TOTAL $ 10,420,962 $ - $ - $ 11,884,341 $ 22,305,303

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NOTES TO FINANCIAL STATEMENTS June 30, 2016

NOTE 13 - EMPLOYEE BENEFIT PLANS (continued)

(b) DEFINED CONTRIBUTION PLAN

The Museum offers a defined contribution plan, whereby employees elect to make voluntary contributions (up to limits set by law) to the plan through a payroll deduction. The Museum then matches 100% of the employee contributions, up to 4% of annual compensation. Matching contributions during the year ended June 30, 2016 were $684,789.

The Museum offers a deferred compensation plan for its highly compensated employees. Employees compensated in excess of $90,000 annually are eligible to elect to make voluntary contributions (up to the limits set by law) to the plan through payroll deductions in excess of the annual thresholds allowed under the Museum’s defined contribution plan.

(d) EXECUTIVE DEFERRED COMPENSATION PLAN

Effective July 1, 2010, the Museum and the Director and Chief Executive Officer entered into a six-year employment agreement. Under the terms of the agreement, deferred compensation in the amount of $500,000 is to be accrued annually in the amount of approximately $83,333 and payable in full on June 30, 2016. After review and approval by the Museum’s Audit Committee and Board of Trustees, the deferred compensation amount was accelerated and paid on March 25, 2016, in consideration of the Director and CEO’s agreement to enter into a new employment agreement. (See Note 15).

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NOTES TO FINANCIAL STATEMENTS June 30, 2016

NOTE 14 - COMMITMENTS AND CONTINGENCIES

(a) OPERATING LEASES

The Museum leases office space and art storage facilities under operating leases expiring through September 2023.

Lease commitments are as follows:

Years Ending June 30 2017 $ 1,910,979 2018 2,010,645 2019 1,789,884 2020 901,764 2021 928,224 Thereafter 2,191,746 Total $ 9,733,242

Rental expense for the year ended June 30, 2016 was $1,885,384.

(b) CONTINGENCIES

In the normal course of business, the Museum may become a party to litigation. Management believes there are no asserted or un-asserted claims or contingencies that would have a significant impact on the financial statements of the Museum as of June 30, 2016.

NOTE 15 - SUBSEQUENT EVENTS

On July 1, 2016, the Museum entered into a new employment agreement with its Director and Chief Executive Officer for a term of seven years ending June 30, 2023 with provisions to extend it an additional three-year term ending June 30, 2026.

On August 31, 2016, the Museum entered into agreements to extend the tender date of the 2013 B, C and D bonds to August 1, 2020.

The Museum has evaluated events and transactions occurring subsequent to the statement of financial position date of June 30, 2016 for items that should potentially be recognized or disclosed in these financial statements. The evaluation was conducted through October 11, 2016, the date these financial statements were available to be issued.

-28- APPENDIX C

SUMMARY OF PRINCIPAL DOCUMENTS

The following is a summary of certain provisions of the Indenture, as supplemented by the First Supplemental Indenture, and the Loan Agreement, as supplemented by the First Supplemental Loan Agreement, which are not described elsewhere in this Official Statement. These summaries do not purport to be complete or definitive and reference should be made to such documents for a full and complete statement of their provisions. All capitalized terms not defined in the Official Statement have the meanings set forth in the Indenture, as supplemented.

The Official Statement describes the Bonds only while they are in the Initial Index Mode Rate Period. There are significant differences with respect to the terms of the Bonds while in a Mode other than the Index Mode or during a subsequent Index Mode Rate Period.

DEFINITIONS

“2013 Bonds” means the 2013A Bonds, the 2013B Bonds, the 2013C Bonds and the 2013D Bonds.

“2013A Bonds” means the California Infrastructure and Economic Development Bank Refunding Revenue Bonds (Los Angeles County Museum of Art Project) Series 2013A.

“2013 Account Control Agreement” means the Second Amended and Restated Account Control Agreement dated as of August 27, 2013, between the Collateral Agent and the Borrower, as the same may be amended from time to time.

“2013B Bonds” means the California Infrastructure and Economic Development Bank Refunding Revenue Bonds (Los Angeles County Museum of Art Project) Series 2013B.

“2013C Bonds” means the California Infrastructure and Economic Development Bank Refunding Revenue Bonds (Los Angeles County Museum of Art Project) Series 2013C.

“2013D Bonds” means the California Infrastructure and Economic Development Bank Refunding Revenue Bonds (Los Angeles County Museum of Art Project) Series 2013D.

“2013B Continuing Covenant Agreement” means the Continuing Covenant Agreement dated as of August 1, 2013, between the Borrower and Wells Fargo Municipal Capital Strategies, LLC, as the initial Special Purchaser of the 2013B Bonds, as the same may be amended from time to time.

“2013C Continuing Covenant Agreement” means the Continuing Covenant Agreement dated as of August 1, 2013, between the Borrower and Union Bank, N.A., as the initial Special Purchaser of the 2013C Bonds, as the same may be amended from time to time.

“2013D Continuing Covenant Agreement” means the Continuing Covenant Agreement dated as of August 1, 2013, between the Borrower and U.S. Bank National Association, as the initial Special Purchaser of the 2013D Bonds, as the same may be amended from time to time.

“2016A Bonds” means the California Infrastructure and Economic Development Bank Refunding Revenue Bonds (Los Angeles County Museum of Art Project), Series 2016A.

C-1 “2016 Project” means the project described in the First Supplemental Loan Agreement.

“Act” means the Bergeson-Peace Infrastructure and Economic Development Bank Act, constituting Division 1 of Title 6.7 of the California Government Code, as now in effect and as it may from time to time hereafter be amended or supplemented.

“Additional Bonds” or “Additional Series of Bonds” means additional Bonds or Series of Bonds that are issued pursuant to a Supplemental Indenture and in accordance with the Indenture.

“Additional Payments” means the payments to be made by the Borrower in accordance with the Agreement and the Indenture.

“Administrative Fees and Expenses” means any application, commitment, financing or similar fee charged, or reimbursement for administrative or other expenses incurred, by the Issuer or the Trustee, including Additional Payments.

“Agreement” or “Loan Agreement” means that certain Loan Agreement, dated as of August 1, 2013, between the Issuer and the Borrower, as originally executed or as it may from time to time be supplemented, modified or amended subject to and in accordance with the terms thereof and the Indenture.

“Alternate Rate” means (i) 110% of the SIFMA Index, or (ii) if such index is no longer available, 85% of the interest rate on 30 day high grade unsecured commercial paper notes sold through dealers by major corporations as reported in The Wall Street Journal, in each case as reported for each Business Day (and for the immediately preceding Business Day for each day which is not a Business Day).

“Amortizable Soft Put Bond Delayed Remarketing Period” means, with respect to any Bonds of a Series that are Amortizable Soft Put Bonds, the period from and including the applicable Scheduled Mandatory Tender Date, if such Amortizable Soft Put Bonds were not remarketed on such Scheduled Mandatory Tender Date, to (but not including) the date on which all the Bonds of such Series are purchased or redeemed.

“Amortizable Soft Put Bonds” means any Series of Bonds bearing interest in an Index Mode that have been designated by the Borrower as Amortizable Soft Put Bonds pursuant to the Indenture.

“Amortizable Soft Put Delayed Remarketing Period Rate” means, during any Amortizable Soft Put Bond Delayed Remarketing Period, a per annum interest rate equal to the Maximum Bond Interest Rate.

“Authorized Denominations” means (a) with respect to Bonds in the Long-Term Mode, $5,000 or any integral multiple thereof, (b) with respect to Bonds in the Index Mode, Daily Interest Rate or Weekly Interest Rate, $100,000 or any integral multiple of $5,000 in excess of $100,000, and (c) with respect to Bonds in the Direct Purchase Mode, $1,000,000 or any integral multiple of $5,000 in excess of $1,000,000.

“Available Moneys” means, (a) if a Credit Facility is in effect for a Series of Bonds, then with respect to such Bonds, (i) moneys drawn under the Credit Facility which at all times since their receipt by the Trustee or the Tender Agent were held in a separate segregated account or accounts or subaccount or subaccounts in which no moneys (other than those drawn under the Credit Facility) were at any time held, (ii) moneys which have been paid to the Trustee or the Tender Agent by the Borrower and have been on deposit with the Trustee or the Tender Agent for at least 124 days (or, if paid to the Trustee or the Tender

C-2 Agent by an “affiliate,” as defined in Bankruptcy Code §101(2), of the Borrower, 366 days) during and prior to which no Event of Bankruptcy shall have occurred, (iii) any other moneys, if, in the opinion of nationally recognized counsel experienced in bankruptcy matters (which opinion shall be acceptable to each Rating Agency then rating the Bonds), the application of such moneys will not constitute a voidable preference in the event of the occurrence of an Event of Bankruptcy, (iv) proceeds of refunding bonds and (v) investment earnings on any of the moneys described in clauses (i), (ii), (iii) and (iv) of this definition; and (b) if no Credit Facility is in effect or available for a Series of Bonds, then with respect to such Bonds, “Available Moneys” means any moneys deposited with the Trustee or the Tender Agent.

“Bank Bonds” means Bonds purchased with the proceeds of drawings under a Credit Facility during the period beginning on the date such Bonds are purchased until the earlier of (i) the date on which such Bonds are remarketed to a purchaser identified by the Remarketing Agent for such Bonds, or (ii) the date on which a Credit Facility Provider elects pursuant to the Indenture not to sell such Bonds to a purchaser identified by the Remarketing Agent for such Bonds.

“Bankruptcy Code” means Title 11 of the United States Code, as amended, and any successor statute.

“Beneficial Owner” means any Person who has the power, directly or indirectly, to vote or consent with respect to, or to dispose of ownership of, any Bonds, including persons holding Bonds through nominees or depositories.

“Bond Account” means the fund created in the Indenture.

“Bond Counsel” means a firm of attorneys, selected by the Borrower or Issuer and reasonably acceptable to the Borrower and the Issuer, which are nationally recognized as experts in the area of municipal finance.

“Bondholder” or “Holder” or “Owner” means, with respect to any Bond, the Person in whose name such Bond is registered, including, if applicable, a Special Purchaser; provided that in the case of any Book-Entry Bond owned by a Special Purchaser, Bondholder, Holder or Owner shall mean the Beneficial Owner of such Book-Entry Bond.

“Bond Purchase Fund” means the fund created in the Indenture.

“Bonds” means the 2013 Bonds, the 2016A Bonds, and any Additional Bonds.

“Book-Entry Bonds” means the Bonds registered in the name of the nominee of DTC, or any successor securities depository for the Bonds, as the registered owner thereof pursuant to the terms and provisions of the Indenture.

“Borrower” means Museum Associates, a nonprofit public benefit corporation organized and existing under the laws of the State, and its successors or assigns permitted pursuant to the Agreement.

“Business Day” means any day other than (i) a Saturday or Sunday, (ii) a day on which the Principal Corporate Trust Office of the Trustee is authorized or required by law to close, (iii) a day on which the New York Stock Exchange is closed or (iv) if such Business Day is related to a draw under a Credit Facility, a day on which the related Credit Facility Provider is authorized or required by law to close.

C-3 “Calculation Agent” means, with respect to any Series of Bonds bearing interest at a Direct Purchase Interest Rate, (i) during the Initial Direct Purchase Rate Period, Wells Fargo Bank, National Association, and (ii) during any other Direct Purchase Interest Rate Period, any Person appointed by the Borrower, with the consent of the related Special Purchaser, to serve as Calculation Agent for such Series of Bonds.

“Certificate,” “Statement,” “Request,” “Requisition” and “Order” of the Issuer or the Borrower mean, respectively, a written certificate, statement, request, requisition or order signed in the name of the Issuer by an Authorized Representative of the Issuer or in the name of the Borrower by an Authorized Representative of the Borrower. Any such instrument and supporting opinions or representations, if any, 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. If and to the extent required by the Indenture, each such instrument shall include the statements provided for in the Indenture.

“Closing Date” means, with respect to a Series of Bonds, the date on which such Series of Bonds is originally issued.

“Code” means the Internal Revenue Code of 1986, as amended, and the regulations of the United States Department of Treasury issued thereunder, and in this regard reference to any particular section of the Code shall include reference to all successors to such section of the Code, when appropriate.

“Collateral Account” means any collateral account established pursuant to the Indenture.

“Collateral Agent” means the Person appointed to serve as Collateral Agent pursuant to the Intercreditor Agreement, initially U.S. Bank National Association.

“Continuing Disclosure Agreement” means the Continuing Disclosure Agreement in connection with the 2013A Bonds, dated as of August 1, 2013 between the Borrower and U.S. Bank National Association, as dissemination agent, and any continuing disclosure agreement entered into with respect to one or more Series of Bonds.

“Conversion” means a conversion, mandatory tender for purchase and successful remarketing of a Series of the Bonds with respect to a change from one Mode to another Mode or one Interest Rate Period to another Interest Rate Period in the same Mode.

“Conversion Date” means the effective date of a Conversion of a Series of the Bonds.

“Costs of Issuance” means, with respect to a Series of Bonds, all items of expense directly or indirectly payable by or reimbursable to the Borrower and related to the original authorization, execution, sale and delivery of such Bonds, including but not limited to: costs of preparation and reproduction of documents; fees and expenses of the Issuer (including its counsel); initial fees, expenses and charges of the Trustee (including its counsel); underwriters’ fees and expenses; legal fees and charges of bond counsel, underwriters’ counsel and the counsel to the Borrower; rating agency fees; fees of the Credit Facility Providers; and any other cost, charge or fee in connection with the original issuance and delivery of such Bonds.

“Credit Facility or Facilities” means, collectively, any letter or letters of credit or municipal bond insurance policy or policies provided with respect to any Series of Bonds guaranteed by such letter or letters of credit or policy or policies.

C-4 “Credit Facility Provider Agreement” means any agreement between the Borrower and any Credit Facility Provider, pursuant to which a Credit Facility is issued by such Credit Facility Provider, as the same may be amended or supplemented.

“Credit Facility Purchase Account” means the account with that name established within the Bond Purchase Fund pursuant to the Indenture.

“Credit Facility Providers” means, collectively, any financial institution or institutions issuing a Credit Facility and their successors and assigns.

“Currently Effective Index Rate” means, with respect to Bonds of a Series in an Index Mode, the Index Rate (multiplied by any Index Mode Applicable Percentage) plus the applicable Index Mode Spread established for such Index Mode Rate Period pursuant to the Indenture.

“Currently Effective Index Spread” means, with respect to Bonds of a Series in an Index Mode, the applicable Index Mode Spread established for such Index Mode Rate Period pursuant to the Indenture.

“Delayed Hard Put Bond Delayed Remarketing Period” means, with respect to any Series of Bonds that are Delayed Hard Put Bonds, the period from and including the applicable Scheduled Mandatory Tender Date, if such Delayed Hard Put Bonds were not remarketed on such Scheduled Mandatory Tender Date, to (but not including) the date on which all the Bonds of such Series are purchased or redeemed.

“Delayed Hard Put Bond Secondary Rate” means a rate per annum equal to the sum of (a) the Index Rate for the applicable Index Mode Rate Period multiplied by the Index Mode Applicable Percentage, for the applicable Index Mode Rate Period, and (b) the product obtained by multiplying the Currently Effective Index Spread by 2.0.

“Delayed Hard Put Bond Secondary Tender Date” means, with respect to any Series of Bonds that are Delayed Hard Put Bonds, the Business Day specified by the Borrower pursuant to the Indenture.

“Delayed Hard Put Bonds” means any Series of Bonds bearing interest in an Index Mode that have been designated by the Borrower as Delayed Hard Put Bonds pursuant to the Indenture.

“Direct Participant” means those broker-dealers, banks, trust companies, clearing corporations and other financial institutions from time to time for which the Securities Depository holds Bonds as a securities depository.

“Direct Purchase Acceleration Notice” means, with respect to Bonds of any Series in a Direct Purchase Mode, a written notice from the Requisite Special Parties, or the Bank Agent on behalf of the Requisite Special Parties, that both (i) an “Event of Default” under the related Direct Purchase Agreement has occurred and is continuing, and (ii) the Requisite Special Parties, or the Bank Agent on behalf of such Requisite Special Parties, are exercising the right of the related Special Purchaser to declare or cause a mandatory tender, mandatory redemption or an acceleration of all of the Bonds of the related Series as a result of such Event of Default under the related Direct Purchase Agreement.

“Direct Purchase Agreement” means, (i) during the Initial Direct Purchase Rate Period with respect to the 2013B Bonds, the 2013B Continuing Covenant Agreement, with respect to 2013C Bonds, the 2013C Continuing Covenant Agreement and with respect to the 2013D Bonds, the 2013D Continuing Covenant Agreement, and (ii) during any Direct Purchase Interest Rate Period other than the Initial Direct Purchase Rate Period, means, with respect to such Series of Bonds, any agreement between the Borrower

C-5 and the related Special Purchaser which shall be designated as the Direct Purchase Agreement with respect to such Series.

“Direct Purchase Applicable Factor” means (i) during the Initial Direct Purchase Rate Period, 67% and (ii) during any other Direct Purchase Interest Rate Period, such other percentage as may be designated in writing by the Borrower as the Direct Purchase Applicable Factor for such Direct Purchase Interest Rate Period, as provided in the Indenture.

“Direct Purchase Applicable Spread” means,

(i) With respect to the Initial Direct Purchase Rate Period, initially the number of basis points provided in the Indenture, which Direct Purchase Applicable Spread is subject to the maintenance of the current ratings assigned by S&P or Moody’s to the long-term, unenhanced debt of the Borrower. In the event of a change (whether an upgrade or downgrade) in the credit rating assigned by S&P or Moody’s to the long-term, unenhanced debt of the Borrower, the Direct Purchase Applicable Spread shall be the number of basis points associated with such new rating as provided in the Indenture.

(ii) With respect to any Direct Purchase Interest Rate Period other than the Initial Direct Purchase Rate Period, the number of basis points determined by the Market Agent in accordance with the Indenture (which may include a schedule for the Direct Purchase Applicable Spread based upon the credit rating or ratings then assigned to the long-term, unenhanced debt of the Borrower as described in the foregoing subparagraph (i) in this definition), when added to the SIFMA Mode (DP) Rate or the product of the LIBOR Mode (DP) Rate multiplied by the Direct Purchase Applicable Factor, as applicable, shall be the minimum interest rate at which a Person would agree to purchase the Bonds on the effective date of the Direct Purchase Interest Rate Period at a price (without regard to accrued interest) equal to the principal amount thereof.

“Direct Purchase Default Rate” means, (a) the greatest of (i) the Prime Rate plus 4%, (ii) the Federal Funds Rate plus 5%, or (iii) the LIBOR Index plus 6%; and (b) for any Direct Purchase Interest Rate Period other than the Initial Direct Purchase Rate Period, with a Favorable Opinion of Bond Counsel, such other rate designated in the applicable Direct Purchase Agreement as the “Default Rate” (if any); provided, subject to the provisions of the Indenture, the Default Rate shall not exceed the Maximum Lawful Rate.

“Direct Purchase Default Rate Notice” means, with respect to Bonds of any Series in a Direct Purchase Mode, a written notice from the Requisite Special Parties, or the Bank Agent on behalf of such Requisite Special Parties, that an “Event of Default” has occurred and is continuing under the related Direct Purchase Agreement but that does not include an exercise by the Requisite Special Parties, or the Bank Agent on behalf of the Requisite Special Parties, of the right to require a mandatory tender of the Bonds of such Series, mandatory redemption of the Bonds of such Series or an acceleration of the Bonds of such Series.

“Direct Purchase Interest Rate” means the LIBOR Mode (DP) Rate or the SIFMA Mode (DP) Rate, as applicable.

“Direct Purchase Interest Rate Period” means the Initial Direct Purchase Rate Period and any other Interest Rate Period during which any Series of Bonds bears interest at a Direct Purchase Interest Rate.

“Direct Purchase Mode” means the Mode during which a Direct Purchase Interest Rate is in effect for a Series of Bonds or when such Bonds become Direct Purchase Unremarketed Bonds.

C-6 “Direct Purchase Special Mandatory Tender Date” means (i) with respect to the Initial Direct Purchase Rate Period, the Initial Direct Purchase Special Mandatory Tender Date and (ii) with respect to any Direct Purchase Interest Rate Period other than the Initial Direct Purchase Rate Period, the Direct Purchase Special Mandatory Tender Date selected by the Borrower as provided in the Indenture.

“Direct Purchase Taxable Rate” means an interest rate per annum equal to the product of the Direct Purchase Interest Rate then in effect multiplied by 1.54.

“Direct Purchase Unremarketed Bonds” means Bonds of a Series bearing interest at a Direct Purchase Interest Rate with respect to which the Tender Price has not been paid in full on any Mandatory Tender Date described in the Indenture; provided, however, that Bonds of a Series bearing interest at a Direct Purchase Interest Rate shall not constitute Direct Purchase Unremarketed Bonds by virtue of a failure to pay the Tender Price on any other Mandatory Tender Date.

“DTC Participant” or “Participant” means a Direct Participant and/or an Indirect Participant.

“Electronic Means” means a facsimile transmission, email transmission or other similar electronic means of communication providing evidence of transmission, with receipt confirmed by the recipient by a telephone call or return facsimile transmission, email transmission or other similar electronic means of communication.

“Eligible Account” means an account that is either (a) maintained with a federal or state-chartered depository institution or trust company that has a Standard & Poor’s short-term debt rating of at least “A- 2” (or, if no short-term debt rating, a long-term debt rating of “BBB+”); or (b) maintained with the corporate trust department of a federal depository institution or state-chartered depository institution subject to regulations regarding fiduciary funds on deposit similar to Title 12 of the U.S. Code of Federal Regulation Section 9.10(b), which, in either case, has corporate trust powers and is acting in its fiduciary capacity. If moneys are deposited in an account that is required to be an Eligible Account and such account ceases to comply with the definition of “Eligible Account,” the funds shall promptly (and, in any case, within not more than 30 calendar days) be moved to another financial institution such that the “Eligible Account” requirement will again be satisfied.

“Event of Default” means any of the events specified as an “Event of Default” under the Indenture.

“Favorable Opinion of Bond Counsel” means, with respect to any action relating to a Series of Bonds, the occurrence of which requires such an opinion, a written legal opinion of Bond Counsel addressed to the Trustee, the Borrower, the Issuer, the related Credit Facility Provider, if any, the related Special Purchaser, if any, and the Remarketing Agent for such Series of Bonds, if any, to the effect that such action is permitted under the Indenture and will not impair the exclusion of interest on such Series of Bonds from gross income for purposes of federal income taxation or the exemption of interest on such Series of Bonds from personal income taxation under the laws of the State (subject to customary qualifications).

“Federal Funds Rate” means, with respect to a Series of Bonds, for any day the rate of interest per annum as determined by the Calculation Agent of such Series of Bonds bearing interest at the Direct Purchase Interest Rate or which constitute Direct Purchase Unremarketed Bonds at which overnight Federal Funds are offered to the Calculation Agent for such day by major banks in the interbank market, with any change in such rate to become effective as to the Borrower on the date of any change in such rate. Each determination of the Federal Funds Rate by the Calculation Agent shall be deemed conclusive and binding on the Borrower absent manifest error.

C-7 “First Supplemental Loan Agreement” means the First Supplemental Loan Agreement, dated as of November 1, 2016, between the Issuer and the Borrower.

“First Supplemental Indenture” means the First Supplemental Indenture, dated as of November 1, 2016, relating to the 2016A Bonds.

“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, or fifty-two week, period hereafter selected and designated as the official fiscal year period of the Borrower.

“Fitch” means Fitch, a corporation duly organized and existing under and by virtue of the laws of the State of Delaware, and its successors and assigns, except that if such corporation shall be dissolved or liquidated or shall no longer perform the functions of a securities rating agency, then the term “Fitch” shall be deemed to refer to any other nationally recognized securities rating agency selected by the Borrower.

“Funding Amount” means an amount equal to the difference between (1) the aggregate Tender Price of Bonds to be purchased under the Indenture, and (2) that portion of such Tender Price for which funds have been transferred by the Remarketing Agent to the Tender Agent in connection with the remarketing of such Bonds.

“GAAP” means generally accepted accounting principles set forth in the opinions and pronouncements of the Accounting Principles Board of the American Institute of Certified Public Accountants and statements and pronouncements of the Financial Accounting Standards Board or in such other statements by such other entity as may be approved by a significant segment of the accounting profession, that are applicable to the circumstances as of the date of determination.

“Government Certificates” means evidences of indebtedness of ownership of proportionate interests in future principal and/or interest payments of Government Obligations, including depository receipts thereof, wherein (i) a bank or trust company acts as custodian and holds the underlying Government Obligations; (ii) the owner of the Government Certificate is a real party in interest with the right to proceed directly and individually against the obligor of the underlying Government Obligations; and (iii) the underlying Government Obligations are held in trust in a special account, segregated from the custodian’s general assets, and are not available to satisfy any claim of the custodian or any Person claiming through the custodian, or any Person to whom the custodian may be obligated.

“Government Obligations” means and includes any of the following securities: State and Local Government Series notes issued by the United States Treasury; United States Treasury bills, notes and bonds as traded on the open market; zero coupon United States Treasury bonds; and interest strips of the Resolution Funding Corporation for which separation of principal and interest is made by a Federal Reserve Bank in book-entry form.

“Hard Put Bonds” means any Series of Bonds bearing interest in an Index Mode that have been designated by the Borrower as Hard Put Bonds pursuant to the Indenture.

“Indenture” means the Indenture, between the Issuer and the Trustee, as originally executed or as it may from time to time be supplemented, modified or amended by any Supplemental Indenture.

“Index Mode” means the Mode during which an Index Rate is in effect for a Series of Bonds.

C-8 “Index Mode Applicable Percentage” means the applicable percentage selected by the Borrower pursuant to the Indenture.

“Index Mode Call Date” means, with respect to any Index Mode Rate Period, the applicable Index Mode Standard Call Date unless the Borrower designates a different date pursuant to the Indenture.

“Index Mode Interest Rate” means (a) prior to (and not including) any Scheduled Mandatory Tender Date for any Index Mode Rate Period, a rate per annum equal to the Index Rate multiplied by the Index Mode Applicable Percentage plus the Index Mode Spread applicable during such Index Mode Rate Period, (b) during any Delayed Hard Put Bond Delayed Remarketing Period, the Delayed Hard Put Bond Secondary Rate, (c) during any Amortizable Soft Put Bond Delayed Remarketing Period, the Amortizable Soft Put Delayed Remarketing Period Rate, and (d) during any Soft Put Bond Delayed Remarketing Period, the Soft Put Bond Delayed Remarketing Period Rate.

“Index Mode Rate Period” means the period during which a particular Index Mode Interest Rate is scheduled to be in effect.

“Index Mode Rate Weekly Determination Date” means the date on which the interest rate(s) with respect to a Series of the Bonds in an Index Mode shall be determined, which shall be each Wednesday (or if Wednesday is not a Business Day, the immediately preceding Business Day).

“Index Mode Spread” means with respect to a Series of Bonds in the Index Mode, the per annum rate (expressed as number of basis points to be added to the Index Rate) as determined on the Index Mode Spread Determination Date for a Series of Bonds.

“Index Mode Spread Determination Date” means the date that the Remarketing Agent determines the Index Mode Spread for an Index Mode Rate Period which shall be at least one (1) Business Day prior to the first day of the applicable Index Mode Rate Period.

“Index Mode Unscheduled Mandatory Tender Date” means a Business Day selected by the Borrower to be a Mandatory Tender Date in an Index Mode Rate Period for a Series of Bonds in an Index Mode, which must occur on or after the related Index Mode Call Date and on or prior to the last day of such Index Mode Rate Period (which may occur during any Delayed Hard Put Bond Delayed Remarketing Period, Amortizable Soft Put Bond Delayed Remarketing Period or Soft Put Bond Delayed Remarketing Period).

“Index Mode Weekly Interest Period” means each period during which a particular Index Mode Interest Rate is in effect during an Index Mode Rate Period beginning on and including Thursday of each week through and including the next Wednesday (with adjustments for the beginning and ending dates of an Index Mode Weekly Interest Period as set forth in the Indenture).

“Index Rate” means the SIFMA Index or the LIBOR Index as determined by the Borrower pursuant to the Indenture.

“Indirect Participant” means those broker-dealers, banks, trust companies, clearing corporations and other financial institutions that clear through or maintain a custodial relationship with a Direct Participant.

“Information Services” means the Electronic Municipal Market Access System (“EMMA”), a service of the Municipal Securities Rulemaking Board, or such other service providing information with respect to called bonds as the Issuer or the Borrower may designate in writing to the Trustee.

C-9 “Initial Direct Purchase Rate Period” means, with respect to each Series of 2013 Bonds issued in the Direct Purchase Mode, the initial Direct Purchase Interest Rate Period commencing on the Closing Date and ending on the first to occur of (i) the Initial Direct Purchase Special Mandatory Tender Date, (ii) the Conversion Date for such Series of Bonds (provided that the related Special Purchaser shall have consented thereto in writing in accordance with the Indenture), and (iii) the date of redemption or mandatory tender in full of a Series of such 2013 Bonds.

“Initial Direct Purchase Special Mandatory Tender Date” means, with respect to each Series of 2013 Bonds issued in the Direct Purchase Mode, August 1, 2017.

“Initial Index Mode Rate Period” means (i) with respect to the 2013A Bonds, the initial Index Mode Rate Period scheduled to begin on the Closing Date for the 2013A Bonds and end on July 31, 2018, and (ii) with respect to the 2016A Bonds, the initial Index Mode Rate Period scheduled to begin on the Closing Date for the 2016A Bonds and end on July 30, 2020∗, provided that, if the 2013A Bonds or the 2016A Bonds are not remarketed on the Scheduled Mandatory Tender Date, the Initial Index Mode Rate Period for a related Series of such Bonds shall be extended in accordance with the Indenture.

“Initial Special Purchasers” means, collectively, Wells Fargo Municipal Capital Strategies, LLC, as the initial Special Purchaser of the 2013B Bonds, Union Bank, N.A., as the initial Special Purchaser of the 2013C Bonds and U.S. Bank National Association, as the initial Special Purchaser of the 2013D Bonds.

“Initial Swap Agreement” means the ISDA Master Agreement, Schedule and Credit Support Annex, each dated as of May 6, 2011, and the Confirmation, dated May 6, 2011, between the Borrower and the Initial Swap Counterparty, as amended by the First Amendment to ISDA Master Agreement, dated May 19, 2011, the Second Amendment to ISDA Master Agreement, dated August 27, 2013, and the Amended and Restated Swap Transaction Confirmation, dated August 27, 2013, as such documents may be amended or supplemented from time to time.

“Initial Swap Counterparty” means Wells Fargo Bank, National Association and its successors and assigns under the Initial Swap Agreement.

“Intercreditor Agreement” means that certain Intercreditor and Collateral Agency Agreement dated as of August 13, 2013, by and among the Collateral Agent, the Trustee, the Initial Special Purchasers and the Initial Swap Counterparty, as the same may be amended, modified, or supplemented pursuant to its terms.

“Interest Payment Date” for a Series of the Bonds means:

(a) for any Weekly Interest Rate Period, the first Wednesday (or such other day specified in a Supplemental Indenture relating to a Series of Bonds) of each calendar month, or, if the first Wednesday is not a Business Day, the next succeeding Business Day;

(b) for any Daily Interest Rate Period, Direct Purchase Interest Rate Period or Index Mode Rate Period, the first Business Day of each calendar month;

(d) for each Interest Rate Period, the day next succeeding the last day thereof;

∗ Preliminary, subject to change.

C-10 (e) any redemption date, any Mandatory Tender Date and any maturity date for Bonds;

(f) for Bank Bonds, as set forth in the related Credit Facility Provider Agreement then in effect; and

(g) for Direct Purchase Unremarketed Bonds, as set forth in the related Direct Purchase Agreement then in effect.

“Interest Rate Period” means each Daily Interest Rate Period, Weekly Interest Rate Period, Index Mode Rate Period, Long Term Interest Rate Period or Direct Purchase Interest Rate Period.

“Investor Letter” shall mean a letter in the form required by the Indenture and executed and delivered by a Holder pursuant to the Indenture.

“Issuer” means the California Infrastructure and Economic Development Bank, or its successors and assigns.

“LIBOR Index” means, with respect to the 2016A Bonds, for any computation date, the London interbank offered rate for U.S. dollar deposits for a one-month period, as reported on the Reuters Screen LIBOR01 Page (or such other page as may replace Reuters Screen LIBOR 01 Page for the purpose of displaying London interbank offered rates for U.S. dollar deposits) as of 11:00 a.m., London time, on such computation date, or if any such computation date is not a London Business Day, on the next preceding London Business Day; provided that, if any such rate is not reported on a London Business Day, LIBOR Index shall mean the rate as determined by the Calculation Agent for the Bonds while in the Direct Purchase Mode and by the Borrower for Bonds while in any other Mode from another recognized source or interbank quotation. Notwithstanding the foregoing, if, for any computation date, the LIBOR Index determined as provided above would be less than zero percent (0.00000%), then the LIBOR Index rate shall be deemed to be zero percent (0.00000%).

“LIBOR Mode (DP) Interest Period” means, while the Bonds bear interest at the LIBOR Mode (DP) Rate, the period from (and including) the LIBOR Mode (DP) Rate Conversion Date (or, in the case of the Initial Direct Purchase Rate Period, the Closing Date) to (but not including) the first Thursday thereafter, and thereafter shall mean the period from (and including) Thursday of each week to (but not including) the Thursday of the following week (or, if sooner, to but excluding the last day of the LIBOR Mode (DP) Rate Period).

“LIBOR Mode (DP) Rate” means, for any Series of Bonds, a per annum rate of interest equal to the sum of (i) the Direct Purchase Applicable Spread plus (ii) the product of the LIBOR Index multiplied by the Direct Purchase Applicable Factor, in each case with respect to such Series.

“LIBOR Mode (DP) Rate Conversion Date” means, for any Series of Bonds, (a) the date on which such Series of Bonds begin to bear interest at the LIBOR Mode (DP) Rate or, (b) if such Series of Bonds have previously borne interest at the LIBOR Mode (DP) Rate during a LIBOR Mode (DP) Rate Period then ending, the applicable Direct Purchase Special Mandatory Tender Date occurring at the end of the then ending LIBOR Mode (DP) Rate Period with respect to such Series.

“LIBOR Mode (DP) Rate Period” means, for any Series of Bonds, (a) the Initial Direct Purchase Rate Period and (b) each period thereafter from and including a LIBOR Mode (DP) Rate Conversion Date to but excluding the earlier of (i) the immediately succeeding Direct Purchase Special Mandatory Tender Date; (ii) the Conversion Date and (iii) the maturity date (including redemption or mandatory tender in full) of the Bonds, in each case with respect to such Series.

C-11 “LIBOR Mode (DP) Reset Date” means Thursday of each week.

“Loan Default Events” means any of the events of default specified in the Agreement.

“Loan Payments” means the payments to be made by the Borrower pursuant to the Loan Agreement.

“London Banking Day” or “London Business Day” means any day on which commercial banks are open for general business (including dealings in foreign exchange and foreign currency) in the City of London, United Kingdom.

“Mandatory Tender Date” means any date on which Bonds are subject to mandatory tender for purchase pursuant to the Indenture.

“Market Agent” means a third-party financial advisory firm, investment banking firm, commercial bank or any other financial institution with experience in pricing information for tax-exempt municipal securities, as selected by the Borrower and consented to by the Special Purchaser, if any, of the related Series of Bonds.

“Maximum Bank Bond Interest Rate” means the lesser of (a) the maximum interest rate on Bank Bonds as provided in the applicable Credit Facility Provider Agreement and (b) the Maximum Lawful Rate.

“Maximum Bond Interest Rate” means the lesser of (a) the rate of 12% per annum and (b) the Maximum Lawful Rate.

“Maximum Lawful Rate” means the maximum rate of interest on the relevant obligation permitted by applicable law.

“Mode” means, as the context may require, a Daily Mode, Weekly Mode, Long-Term Mode, an Index Mode or the Direct Purchase Mode.

“Moody’s” means Moody’s Investors Service, Inc., a corporation organized and existing under the laws of the State of Delaware, its successors and assigns, and, if such corporation shall be dissolved or liquidated or shall no longer perform the functions of a securities rating agency, “Moody’s” shall be deemed to refer to any other nationally recognized securities rating agency selected by the Borrower.

“Opinion of Counsel” means a written opinion of counsel (who may be counsel for the Issuer or the Borrower) appointed by the Issuer, the Trustee or the Borrower, as appropriate, that is reasonably acceptable to the Credit Facility Providers receiving the same. If and to the extent required by the Indenture, each Opinion of Counsel shall include the statements provided for in the Indenture.

“Outstanding,” when used as of any particular time with reference to Bonds, means all Bonds theretofore, or thereupon being, authenticated and delivered by the Trustee under the Indenture except (a) Bonds theretofore cancelled by the Trustee or surrendered to the Trustee for cancellation; (b) Bonds with respect to which all liability of the Issuer shall have been discharged in accordance with the Indenture; and (c) Bonds for the transfer or exchange of which, or in lieu of or in substitution for which, other Bonds shall have been authenticated and delivered by the Trustee pursuant to the Indenture.

“Permitted Investments” means, if and to the extent permitted by law and by any policy guidelines promulgated by the Borrower:

C-12 (a) Government Obligations or Government Certificates;

(b) Bonds, debentures, notes or other evidence of indebtedness issued or guaranteed by any of the following federal agencies and provided such obligations are backed by the full faith and credit of the United States of America (stripped securities are only permitted if they have been stripped by the agency itself):

(i) Farmers Home Administration (FMHA) - Certificates of beneficial ownership;

(ii) Federal Housing Administration Debentures (FHA);

(iii) General Services Administration - Participation Certificates;

(iv) Government National Mortgage Association (GNMA or “Ginnie Mae”) guaranteed mortgage-backed bonds, excluding stripped and inverse floating rate securities;

(v) U.S. Maritime Administration - Guaranteed Title XI financing; and

(vi) U.S. Department of Housing and Urban Development (HUD) - Project notes and local authority bonds.

(c) Bonds, debentures, notes or other evidence of indebtedness issued or guaranteed by any of the following non-full faith and credit United States of America government agencies (stripped securities are only permitted if they have been stripped by the agency itself):

(i) Federal Home Loan Bank System - Senior debt obligations (consolidated debt obligations);

(ii) Federal Home Loan Mortgage Corporation (FHLMC or “Freddie Mac”)- mortgage backed securities and senior debt obligations; excluding stripped mortgage securities and inverse floating rate bonds;

(iii) Federal National Mortgage Corporation (FNMA or “Fannie Mae”) -mortgage backed securities and senior debt obligations, excluding stripped mortgage securities and inverse floating rate bonds;

(iv) Student Loan Marketing Association (SLMA or “Sallie Mae”) - Senior debt obligations;

(v) Resolution Funding Corp. (REFCORP) - Only the interest component of REFCORP strips which have been stripped by request to the Federal Reserve Bank of New York in book-entry form; and

(vi) Federal Farm Credit System - Consolidated systemwide bonds and notes.

(d) Money market funds registered under the Federal Investment Company Act of 1940, whose shares are registered under the Securities Act of 1933, and having a rating by S&P of AAAm-G or AAAm and by Moody’s of Aaa, including money market funds from which the Trustee or its affiliates receive a fee for investment advisory or other services to the fund;

(e) Certificates of deposit issued by a state or national bank or a state or federal savings and loan, provided that such certificates of deposit shall be either (i) continuously and fully insured by the

C-13 FDIC, or (ii) be secured at all times by a perfected first security interest in collateral described in subsections (a) and/or (b) above held by a third party;

(f) Savings accounts or money market deposits that are fully insured by the FDIC;

(g) Investment agreements, including guaranteed investment contracts acceptable to the Requisite Special Parties.

(h) Commercial paper of “prime” quality rated, at the time of purchase, “P-1” by Moody’s and “A-1” or better by S&P.

(i) Bonds or notes issued by any state or municipality which are rated by Moody’s and S&P in one of the two highest long-term rating categories assigned by such agencies;

(j) Federal funds or banker’s acceptances which are eligible for purchases by members of the Federal Reserve System, drawn on any bank the short-term obligations of which are rated in the highest rating category by Moody’s and S&P, provided that the maturity cannot exceed 270 days;

(k) Repurchase agreements either (a) with maturities of 30 days or less, or (b) approved by the Requisite Special Parties;

(l) “Pre-funded” municipal obligations rated in the highest rating category by Moody’s and S&P;

(m) Senior asset-backed securities such as automobile and credit card receivables, utilities, manufactured home loans, home improvements loans, and home equity loans (rated A or better by at least one of the Rating Agencies at time of purchase);

(n) Senior non-agency mortgage backed securities but excluding stripped mortgage backed securities and inverse floating rate bonds (rated A or better by at least one of the Rating Agencies at time of purchase);

(o) Fixed and floating rate corporate debt securities rated A or better by at least one of the Rating Agencies at time of purchase; and

(q) Any investment approved in writing by the Requisite Special Parties.

“Prime Rate” means on any day, the rate of interest per annum then most recently established by the Calculation Agent of a Series of Bonds bearing interest at the Direct Purchase Interest Rate or constituting Direct Purchase Unremarketed Bonds as its “prime rate.” Any such rate is a general reference rate of interest, may not be related to any other rate, and may not be the lowest or best rate actually charged by the Calculation Agent to any customer or a favored rate and may not correspond with future increases or decreases in interest rates charged by other lenders or market rates in general, and that the Calculation Agent may make various business or other loans at rates of interest having no relationship to such rate. If the Calculation Agent ceases to exist or to establish or publish a prime rate from which the Prime Rate is then determined, the applicable variable rate from which the Prime Rate is determined thereafter shall be instead the prime rate reported in The Wall Street Journal (or the average prime rate if a high and a low prime rate are therein reported), and the Prime Rate shall change without notice with each change in such prime rate as of the date such change is reported.

C-14 “Principal Corporate Trust Office” means with respect to the Trustee, the office of the Trustee at U.S. Bank National Association, 633 W. Fifth Street, 24th Floor, Los Angeles, California, or such other address as may be designated by the Trustee in writing to the Issuer and the Borrower, except for purposes of transfer, exchange, registration, payment and surrender of Bonds in which case it means the office or agency of the Trustee which, at any particular time, its corporate trust agency business shall be conducted.

“Project” means the project described in Exhibit A to the Agreement and any project financed with proceeds of Additional Bonds.

“Property” means, as of any date, all land, improvements, facilities, fixtures and equipment then owned or controlled by the Borrower.

“Qualified Institutional Buyer” means a “qualified institutional buyer” as defined in Rule 144A promulgated under the Securities Act of 1933, as amended.

“Rating Agencies” means Fitch, Moody’s and S&P, so long as any such rating agencies maintain a rating on the Bonds, and any other nationally recognized securities rating agency designated in writing by the Issuer following consultation with the Borrower.

“Rebate Fund” means the fund by that name established pursuant to the Indenture.

“Record Date” means (i) with respect to any Interest Payment Date in a Daily Mode, Weekly Mode, Index Mode or Direct Purchase Mode or with respect to Direct Purchase Unremarketed Bonds, the Business Day immediately preceding such Interest Payment Date, and (ii) with respect to any Interest Payment Date in a Long-Term Mode the fifteenth day immediately preceding that Interest Payment Date or, in the event that an Interest Payment Date shall occur less than 15 days after the first day of a Long- Term Interest Rate Period, that first day.

“Redemption Price” means, with respect to any Bond (or portion thereof), the principal amount of such Bond (or portion thereof), premium, if any, and interest, payable upon redemption thereof pursuant to the provisions of such Bond and the Indenture.

“Reimbursement Obligations” means obligations of the Borrower under each Credit Facility Provider Agreement to reimburse the related Credit Facility Provider for drawings under the related Credit Facility to pay the principal and purchase price of, and interest on a Series of Bonds, together with accrued interest thereon under the terms of such Credit Facility Provider Agreement.

“Remarketing Account” means each account with that name established within the Bond Purchase Fund pursuant to the Indenture.

“Remarketing Agent” means each Person qualified under the Indenture to act as Remarketing Agent for the Bonds or a Series of Bonds and appointed by the Borrower with the consent of the Issuer from time to time, subject to the approval of the Credit Facility Provider for any Series of Bonds supported by a Credit Facility.

“Remarketing Agreement” means any remarketing agreement entered into with respect to one or more Series of Bonds.

C-15 “Representation Letter” means, collectively, the letters, executed by the Issuer and delivered to the Securities Depository, representing such matters as shall be necessary to qualify the Bonds for the Securities Depository’s book-entry system.

“Requisite Special Parties” means, as of the date of determination thereof, Credit Facility Providers and Special Purchasers representing in excess of 66-2/3% of all outstanding Special Party Obligations; provided that in no event shall Requisite Special Parties include fewer than two (2) unaffiliated Credit Facility Providers or Special Purchasers at any time when there are two (2) or more unaffiliated Credit Facility Providers or Special Purchasers. Anything in the Indenture to the contrary notwithstanding, the status of a Credit Facility Provider as eligible to be part of the Requisite Special Parties shall be subject to the provisions of the Indenture limiting the right of Credit Facility Providers to direct or control proceedings in an Event of Default in certain circumstances.

“Reserved Rights” means the Issuer’s rights to indemnification, notices, consents, opinions, certifications, reports and information set forth in the Agreement together with Additional Payments required to be paid to the Issuer, the rights of the Issuer to enforce the obligations of the Borrower pursuant to the Tax Agreement.

“Revenue Fund” means the fund by that name established pursuant to the Indenture.

“Revenues” means all payments received by the Issuer or the Trustee from the Borrower or on behalf of the Borrower (except Additional Payments and any amounts paid by the Borrower pursuant to the indemnification provisions of the Agreement), including, without limiting the generality of the foregoing, Loan Payments (including both timely and delinquent payments, any late charges, and whether paid from any source), prepayments of all or any part of the Loan Payments and all interest, profits or other income derived from the investment of any money in any fund or account established pursuant to the Indenture (except to the extent such interest, profits or other income is required to be transferred to or retained in the Rebate Fund pursuant to the Indenture or the Tax Agreement).

“S&P” means Standard & Poor’s Ratings Services, a division of The McGraw-Hill Companies, Inc., a corporation organized and existing under the laws of the State of New York, its successors and assigns, and, if such corporation shall be dissolved or liquidated or shall no longer perform the functions of a securities rating agency, “S&P” shall be deemed to refer to any other nationally recognized securities rating agency selected by the Borrower.

“Scheduled Mandatory Tender Date” means, with respect to any Series of Bonds bearing interest in an Index Mode, the Business Day designated by the Borrower pursuant to the Indenture.

“Secured Parties” means the Trustee (on behalf of each Bondholder or Beneficial Owner), each Credit Facility Provider (if any), each Special Purchaser (if any) and each Swap Counterparty (if any).

“Securities Depository” means The Depository Trust Company, 55 Water Street, 50th Floor, New York, N.Y. 10041-0099 Attn. Call Notification Department, Fax (212) 855-7232, or, in accordance with then-current guidelines of the Securities and Exchange Commission, such other securities depositories, or no such depositories, as the Issuer may indicate pursuant to the Indenture.

“Series” means the 2013A Bonds, the 2013B Bonds, the 2013C Bonds, the 2013D Bonds or a series of Additional Bonds, as applicable.

C-16 “SIFMA Index” means, for any computation date, the “SIFMA Municipal Swap Index” announced by Municipal Market Data on such computation date and if the SIFMA Municipal Swap Index is no longer published, then a similar recognized index as of such computation date.

“SIFMA Mode (DP) Conversion Date” means, with respect to a Series of Bonds, (a) the date on which such Bonds begin to bear interest at the SIFMA Mode (DP) Rate or, (b) if such Bonds have previously borne interest at the SIFMA Mode (DP) Rate during a SIFMA Mode (DP) Rate Period then ending, the Direct Purchase Special Mandatory Tender Date occurring at the end of the then ending SIFMA Mode (DP) Rate Period with respect to such Series of Bonds.

“SIFMA Mode (DP) Interest Period” means while the Bonds bear interest at the SIFMA Mode (DP) Rate, the period from (and including) the SIFMA Mode (DP) Conversion Date to (but excluding) the first Thursday thereafter, and thereafter shall mean the period from (and including) Thursday of each week to (but excluding) Thursday of the following week (or, if sooner, to but excluding the last day of the SIFMA Mode (DP) Rate Period).

“SIFMA Mode (DP) Rate” means a per annum rate of interest equal to the sum of the Direct Purchase Applicable Spread plus the SIFMA Index.

“SIFMA Mode (DP) Rate Period” means, with respect to a Series of Bonds, each period from and including a Conversion Date relating to SIFMA Mode (DP) Rate to but excluding the earlier of (i) the immediately succeeding Direct Purchase Special Mandatory Tender Date, (ii) the Conversion Date, and (iii) the maturity date (whether upon redemption, mandatory redemption or other payment in full), in each case with respect to such Series.

“SIFMA Mode (DP) Reset Date” means Thursday of each week.

“Soft Put Bond Delayed Remarketing Period” means, with respect to any Series of Bonds that are Soft Put Bonds, the period from and including the applicable Scheduled Mandatory Tender Date, if such Soft Put Bonds were not remarketed on such Scheduled Mandatory Tender Date, to (but not including) the date of maturity of such Bonds or the earlier date on which all the Bonds of such Series are purchased or redeemed.

“Soft Put Bonds” means any Series of Bonds bearing interest in an Index Mode that have been designated by the Borrower as Soft Put Bonds pursuant to the Indenture.

“Soft Put Delayed Remarketing Period Rate” means, during any Soft Put Delayed Remarketing Period, a per annum interest rate equal to the Maximum Bond Interest Rate.

“Solvent” means, with respect to any Person on any date, that on such date (a) the fair value of the property of such Person is greater than the fair value of the liabilities (including contingent liabilities) of such Person, (b) the present fair saleable value of the assets of such Person is not less than the amount that will be required to pay the probable liability of such Person on its debts as they become absolute and matured, (c) such Person does not intend to, and does not believe that it will, incur debts or liabilities beyond such Person’s ability to pay as such debts and liabilities mature, and (d) such Person is not engaged in a business or a transaction, and is not about to engage in a business or a transaction, for which such Person’s property would constitute an unreasonably small capital.

“Special Mandatory Redemption Amount” shall have the meaning assigned to such term in the Indenture.

C-17 “Special Mandatory Redemption Date” shall have the meaning assigned to such term in the Indenture.

“Special Mandatory Tender Date” means the following Mandatory Tender Dates: (a) any Scheduled Mandatory Tender Date for any Hard Put Bonds (but not including any Scheduled Mandatory Tender Date for Soft Put Bonds, Amortizable Soft Put Bonds and Delayed Hard Put Bonds), (b) any Delayed Hard Put Bond Secondary Tender Date, (c) any Direct Purchase Special Mandatory Tender Date, (d) any Mandatory Tender Date designated by a Credit Facility Provider pursuant to the Indenture, or (e) any Mandatory Tender Date designated by a Special Purchaser pursuant to the Indenture.

“Special Party Obligations” means (a) the principal amount of Bonds in the Direct Purchase Mode (including any Direct Purchase Unremarketed Bonds, if any) and (b)in the case of Bonds enhanced by a Credit Facility, the stated amount of the related Credit Facility plus the principal amount of any unpaid Reimbursement Obligations related thereto.

“Special Purchaser” means, with respect to Bonds of a Series during any Direct Purchase Interest Rate Period or constituting Direct Purchase Unremarketed Bonds, the Holder of such Bonds, provided there is a single Holder of all such Bonds and provided further that such Bonds are not then held under the book-entry system of the Securities Depository. If there is more than one Holder of the Bonds of any such Series, “Special Purchaser” means Holders owning a majority of the aggregate principal amount of the Bonds of such Series then Outstanding. If the Bonds of a Series are then held under the book-entry system of the Securities Depository, “Special Purchaser” means the Beneficial Owner of such Bonds, provided that there is a single Beneficial Owner of all of such Bonds. If there is more than one Beneficial Owner of the Bonds of such Series, “Special Purchaser” means Beneficial Owners who are the beneficial owners of a majority of the aggregate principal amount of Bonds of such Series then Outstanding.

“State” means the State of California.

“Supplemental Indenture” or “Indenture Supplemental Hereto” means any indenture hereafter duly authorized and entered into between the Issuer and the Trustee in accordance with the provisions of the Indenture.

“Swap Agreement” means any transaction entered into between a Swap Counterparty and the Borrower (or an affiliate) in relation to the Bonds that is a rate swap, basis swap, forward rate transaction, commodity swap, commodity option, equity or equity index swap or option, bond, note or bill option, interest rate option, forward foreign exchange transaction, cap, collar or floor transaction, currency swap, cross-currency rate swap, swap option, currency option or any other similar transaction (including any option to enter into the foregoing) or any combination of the foregoing, and, unless the context otherwise clearly requires, any form of master agreement published by the International Swaps and Derivatives Association, Inc., or any other master agreement entered into between the Swap Counterparty and the Borrower (or an affiliate), together with any related schedule, credit support annex and confirmation.

“Swap Counterparty” means the counterparty to the Borrower (or an affiliate) under any Swap Agreement, and includes, without limitation, the Initial Swap Counterparty under the Initial Swap Agreement..

“Swap Payments” means all payments to be made by the Borrower under the Swap Agreements, including but not limited to payments due upon an early termination of the Swap Agreements.

C-18 “Tax Agreement” means the Tax Regulatory Agreement executed by the Issuer and the Borrower dated the date of issuance of the Bonds, and as the same may be further amended or supplemented in accordance with its terms.

“Taxable Date” means the date as of which interest on a Series of Bonds is first includable in the gross income of the Holder (including, without limitation, any previous Holder) thereof as determined pursuant to either (i) an opinion of Bond Counsel, or (ii) a final, non-appealable decree or judgment of any federal court or a final, non-appealable action by the Internal Revenue Service that is delivered to the Trustee and the Borrower.

“Tender Agent” means each Person qualified under the Indenture to act as Tender Agent with respect to the Bonds and so appointed by the Borrower and so acting from time to time, and its successors.

“Tender Price” means the purchase price to be paid to the Holders of Bonds subject to mandatory tender for purchase on a Mandatory Tender Date, which shall be equal to the principal amount thereof required to be tendered for purchase, without premium, plus accrued interest; provided, however, that in the case of a Conversion or attempted Conversion from a Long-Term Interest Rate Period on a date on which the Bonds being converted would otherwise be subject to optional redemption pursuant to the terms hereof if such Conversion did not occur, the Tender Price shall also include the optional redemption premium, if any, provided for such date under the terms hereof.

“Trustee” means U.S. Bank National Association, a national banking association organized and existing under the laws of the United States of America, or any other association or corporation having an office for servicing the Bonds in New York, New York which may at any time be substituted in its place as provided in the Indenture. If at any time the Trustee is unable to carry out the tender agent functions provided in the Indenture, the term “Trustee” shall be required to be a financial institution having an office for servicing the Bonds in New York, New York appointed to act as tender agent by the Issuer which is qualified to carry out such functions and satisfies the requirements of the Indenture.

INDENTURE, AS SUPPLEMENTED

The Indenture sets forth the terms of the Bonds, the nature and extent of the security, various rights of the Bondholders, rights duties and immunities of the Trustee and the rights and obligations of the Issuer. Although certain provisions of the Indenture are summarized below, this summary does not purport to be complete or definitive and is qualified in its entirety by reference to the full terms of the Indenture.

Conversion of Modes and Interest Rate Periods

At the direction of the Borrower, from time to time, a Series of the Bonds may be converted from one Mode to another Mode, or from an Interest Rate Period to another Interest Rate Period in the same Mode. Each such Conversion shall occur on a Mandatory Tender Date. Further, at least fifteen (15) days prior to the end of an Index Mode Rate Period or Long Term Rate Period for any Series of Bonds, the Borrower shall notify the Trustee whether it intends to change Modes or begin a new Interest Rate Period in the same Mode.

No Conversion of a Series of the Bonds from one Mode or Interest Rate Period to another shall take effect under the Indenture unless each of the following conditions, to the extent applicable, shall have been satisfied:

C-19 1. With respect to the new Interest Rate Period at the Weekly Interest Rate or the Daily Interest Rate and, if and to the extent required by the Indenture, the Long Term Interest Rate, for a Series of the Bonds, there shall be in effect a Credit Facility securing such Bonds.

2. The rating on such Bonds to be converted must be “A-/A3” or higher from at least one of the Rating Agencies (unless a lower rating or other alternative arrangement is consented to in writing by the Issuer); provided that with respect to a Conversion to a Direct Purchase Interest Rate Period (unless bearing a rating of “A-/A3” or higher from at least one of the Rating Agencies) Bonds in the Direct Purchase Mode shall only be held by Persons that are Qualified Institutional Buyers that have executed an Investor Letter (Bonds registered in the name of the Securities Depository or its nominee shall be deemed to comply with this requirement so long as each Beneficial Owner is a Qualified Institutional Buyer that has executed an Investor Letter).

3. The Trustee shall have received a Favorable Opinion of Bond Counsel with respect to such Conversion dated the effective date of such Conversion.

Subject to any other provisions of the Indenture requiring a mandatory tender for purchase on such date, in the event that any condition to the Conversion of a Series of the Bonds shall not have been satisfied as provided above or otherwise under the Indenture, then no Conversion shall occur and such Bonds shall continue in their current Mode.

Rescission of Election to Convert

Unless a Series of Bonds is otherwise required to be subject to mandatory tender for purchase pursuant to the terms of the Indenture and such purchase is not permitted to be rescinded, the Borrower shall have the right to deliver to the Issuer, the Trustee, the Remarketing Agent, the Tender Agent, and the Credit Facility Provider (if any), on or prior to 10:00 a.m. (New York City time) on the Business Day preceding the effective date of any such Conversion a notice to the effect that the Borrower on behalf of the Issuer elects to rescind its election to make such Conversion.

Special Procedures Relating to Beneficial Owners

Notwithstanding any provision in the Indenture to the contrary, so long as the Bonds are subject to a system of book-entry only transfers pursuant to the Indenture, any requirement for the delivery of Bonds to the Trustee or the Tender Agent in connection with a tender shall be deemed satisfied upon the transfer, on the registration books of DTC, of the beneficial ownership interests in such Bonds tendered for purchase. The Trustee, Tender Agent and Remarketing Agent may rely upon any representation from a party that it is a DTC Participant for all purposes of the Indenture.

Notwithstanding anything expressed to the contrary in the Indenture, a Beneficial Owner shall give notice to elect to have its Bonds purchased or tendered, through its Participant, to the Remarketing Agent, and shall effect delivery of such Bonds by causing the Direct Participant to transfer the Participant’s interest in the Bonds, on DTC’s records, to the Remarketing Agent and/or the purchaser of such Bonds pursuant to a remarketing. The requirement for physical delivery of Bonds in connection with a demand for purchase or a mandatory tender for purchase will be deemed satisfied when ownership rights in the Bonds are transferred by Direct Participants on DTC’s records.

Notwithstanding anything to the contrary in the Indenture, whenever in the Indenture a Person that is a Beneficial Owner of Bonds has rights or obligations and in connection with the exercise of such

C-20 rights or obligations a written instrument is to be delivered or entered into by such Beneficial Owner, the Trustee and other interested parties may conclusively rely on a certification from such Person that it is the rightful Beneficial Owner of such Bonds. Further, the Trustee may deem the Beneficial Owners of the Bonds to be the Holders of such Bonds for purposes of consents and directions.

Notwithstanding any other provision of the Indenture to the contrary, so long as any Bond is registered in the name of the Nominee, all payments with respect to principal or interest with respect to such Bond and all notices with respect to such Bond shall be made and given, respectively, as provided in the Representation Letter.

Pro Rata Redemption of Bonds

The Indenture provides that, notwithstanding anything to the contrary in the Indenture, in the case of any optional redemption of less than all of the Bonds pursuant to the Indenture, the Bonds shall be redeemed on a pro rata basis, based on the Outstanding principal amount of each Series of Bonds (this provision is not applicable to purchases of Bonds and as with other provisions in the Indenture may be amended or waived in the future, as described under “Modification without Consent of Bondholders” and “Modification with Consent of Bondholders”).

Selection of Bonds to be Redeemed

In the case of any redemption in part of a Series of the Bonds, the Bonds to be redeemed under the Indenture shall be selected by the Trustee, subject to any requirements of the Indenture. A redemption of a Series of Bonds shall be a redemption of the whole or of any part of such Bonds, provided, that there shall be no partial redemption of less than $5,000. If less than all the Bonds of a Series shall be called for redemption under any provision of the Indenture permitting such partial redemption, the particular Bonds to be redeemed shall be selected by the Trustee, in such manner as the Trustee in its discretion may deem fair and appropriate; provided, however (a) that the portion of any Bond to be redeemed under any provision of the Indenture shall be in the principal amount of $5,000 or any multiple thereof, (b) that, in selecting Bonds for redemption, the Trustee shall treat each Bond as representing that number of Bonds which is obtained by dividing the principal amount of such Bond by $5,000, (c) that, to the extent practicable, the Trustee will not select any Bond for partial redemption if the amount of such Bond remaining Outstanding would be reduced by such partial redemption to less than the Authorized Denomination, and (d) Bank Bonds shall be redeemed prior to any Bonds which are not Bank Bonds; provided that, as set forth in the Indenture, the Bonds of all Series shall be redeemed on a pro rata basis among all Series of Bonds then Outstanding. If there shall be called for redemption less than all of a Bond, the Issuer shall execute and deliver and the Trustee shall authenticate, upon surrender of such Bond, and at the expense of the Borrower and without charge to the owner thereof, a replacement Bond in the principal amount of the unredeemed balance of the Bond so surrendered.

Purchase and Remarketing of Bonds

Each Remarketing Agent shall be a commercial bank, national banking association or trust company or a member of the FINRA, and shall be authorized by law to perform all the duties imposed upon it by the Indenture and the Remarketing Agreement. A Remarketing Agent may at any time resign and be discharged of the duties and obligations created by the Indenture by giving notice to the Issuer, the Borrower, the Trustee, the Tender Agent and the Credit Facility Provider. Such resignation shall take effect on the 30th day after the receipt by the Borrower of the notice of resignation. A Remarketing Agent may be removed at any time on 15 days prior written notice, by an instrument signed by the Borrower, approved by the related Credit Facility Provider and delivered to such Remarketing Agent, the Issuer, the Trustee and the Tender Agent. Notwithstanding the provisions of this paragraph, such removal

C-21 shall not take effect prior to the date that a successor Remarketing Agent has been appointed by the Borrower and has accepted such appointment; provided that, for the avoidance of doubt, a Remarketing Agent need not be appointed for a conversion to the Direct Purchase Mode or for the duration of such Direct Purchase Interest Rate Period. Notwithstanding the provisions of this paragraph, if a Credit Facility is required to be maintained pursuant to the Indenture and no Credit Facility is in effect, the Remarketing Agent for the affected Series of Bonds may not be removed unless it consents to such removal or the successor Remarketing Agent agrees to purchase any Bonds owned by the Remarketing Agent as of the effective date of such removal at a purchase price equal to the principal amount thereof plus accrued interest from the immediately preceding Interest Accrual Date to the effective date of such removal.

Upon receipt of a notice of tender pursuant to the Indenture, the Remarketing Agent for a Series of Bonds shall offer for sale and use its best efforts to sell such Bonds (including Bank Bonds) on the same date designated for purchase thereof and, if not remarketed on such date, thereafter until sold, at a price equal to par plus accrued interest. Notwithstanding anything to the contrary provided in the Indenture, Bonds enhanced by a Credit Facility shall not be remarketed following a Mandatory Tender Date occurring at the related Credit Facility Provider’s direction pursuant to the Indenture unless and until the Remarketing Agent has received the consent of the Credit Facility Provider to such remarketing. Bonds shall not be remarketed to the Issuer, the Borrower or any affiliate of the Borrower. Bonds may be remarketed to the County of Los Angeles.

In the event of a failure to pay the Tender Price of the Bonds on any Mandatory Tender Date, the Trustee shall provide notice by Electronic Means to the Holders of the Bonds that were subject to tender, as soon as practicable, of the failure to pay such Tender Price. Such notice may be combined with any notice modifying the date of a mandatory tender for purchase described in the Indenture. The notice shall state that (1) the applicable Bonds were not successfully remarketed on the Mandatory Tender Date and the Tender Price of such Bonds was not paid; (2) such failure does not constitute an Event of Default under the Indenture (unless the applicable Mandatory Tender Date was a Special Mandatory Tender Date); and (3) an Amortizable Soft Put Bond Delayed Remarketing Period, a Delayed Hard Put Bond Delayed Remarketing Period, or a Soft Put Bond Delayed Remarketing Period, if and as applicable, has commenced with respect to such Bonds in accordance with the provisions of the Indenture.

Collateral Account

The Trustee, on behalf of the Collateral Agent, shall establish, maintain and hold in trust a separate fund designated as the “Collateral Account,” for the benefit of the Secured Parties and to secure the Borrower’s obligations to such Secured Parties under the Loan Agreement, any Direct Purchase Agreement, any Swap Agreement, any Credit Facility and any Credit Facility Provider Agreement, as provided in the 2013 Account Control Agreement.

Except as otherwise provided in the Intercreditor Agreement, all amounts in the Collateral Account shall be used and withdrawn by the Collateral Agent solely for the purpose of making up any deficiency for the payment of interest on or principal of Outstanding Bonds, payments due under any Credit Facility Provider Agreement, Direct Purchase Agreement or Swap Payments as provided in the Intercreditor Agreement on a pro rata basis (unless the Collateral Account is no longer required to be maintained as provided in the 2013 Account Control Agreement). The Collateral Account will not secure the Tender Price of any mandatory tender for purchase of the Bonds, except that the Collateral Account shall secure the Tender Price of a Series of Bonds subject to mandatory tender for purchase on a Special Mandatory Tender Date.

C-22 Pledge and Assignment of Revenues and Rights under the Loan Agreement

The Issuer pledges to secure the payment of the principal of and premium, if any, and interest on the Bonds and Reimbursement Obligations in accordance with their terms and the provisions of the Indenture and the related Credit Facility Provider Agreement, respectively, together with all other obligations of the Borrower under each Credit Facility Provider agreement and Direct Purchase Agreement, all of the Revenues and any other amounts (including proceeds of the sale of Bonds, but excluding Additional Payments) held in any fund or account established pursuant to the Indenture other than the Rebate Fund or remarketing proceeds (provided that remarketing proceeds obtained upon a Conversion to a new Interest Rate Period shall only be pledged to the Series of Bonds which are subject to mandatory tender and/or being converted). Said pledge shall constitute a lien on and security interest in such assets and shall attach, be perfected and be valid and binding from and after delivery of the Bonds, without any physical delivery thereof or further act.

Under the Indenture, the Issuer transfers in trust, grants a security interest in and assigns to the Trustee, for the benefit of the Holders from time to time of the Bonds, all of the Revenues and other amounts pledged in the immediately preceding paragraph and all of the right, title and interest of the Issuer in the Agreement (except Reserved Rights and the Rebate Fund). The Issuer transfers in trust and assigns to the Trustee the Rebate Fund. The Trustee shall be entitled to and shall collect and receive all of the Revenues, and any Revenues collected or received by the Issuer shall be deemed to be held, and to have been collected or received, by the Issuer as the agent of the Trustee and shall forthwith be paid by the Issuer to the Trustee without any set-off whatsoever. The Trustee also shall be entitled to and shall (subject to the provisions of the Indenture) take all steps, actions and proceedings reasonably necessary in its judgment to enforce, either jointly with the Issuer or separately, all of the rights of the Issuer assigned to the Trustee and all of the obligations of the Borrower (except Reserved Rights) under the Agreement.

Notwithstanding anything to the contrary in the Indenture, the Issuer shall have no obligation to and instead the Trustee shall, without further direction from the Issuer, take any and all steps, actions and proceedings, to enforce any or all rights of the Issuer (other than Reserved Rights) under the Indenture or the Agreement, including, without limitation, the rights to enforce the remedies upon the occurrence and continuation of an Event of Default and the obligations of the Borrower under the Agreement.

Revenue Fund and Accounts

The Trustee shall establish, maintain and hold in trust a separate fund designated as the Revenue Fund. All Revenues shall be promptly deposited by the Trustee upon receipt thereof in the Revenue Fund; except that Revenues comprised of all interest, profits and other income received from the investment of accounts and funds established pursuant to the Indenture shall be deposited as provided in the Indenture. All Revenues deposited with the Trustee shall be held, disbursed, allocated and applied by the Trustee only as provided in the Indenture.

Bond Account. (a) Pursuant to the Indenture, the Trustee shall create and establish a trust account within the Revenue Fund to be designated the “LACMA Bond Account” (the “Bond Account”) which shall be used to pay when due the principal of, premium, if any, and interest on the Bonds. Moneys shall be deposited in the Bond Account from time to time and shall be applied solely as follows:

(i) Loan Payments shall be deposited into the Bond Account in the amounts required to pay the principal of and premium, if any, and interest next coming due on the Bonds.

(ii) Separate sub-accounts shall be established by the Trustee within the Bond Account for payments of Series of Bonds enhanced by a Credit Facility (“Enhanced Bonds Sub-

C-23 Accounts”) and Series of Bonds without enhancement from Credit Facilities (“Unenhanced Bonds Sub- Accounts”).

(iii) Sums received by the Trustee after drawing on a Credit Facility shall be deposited in the Enhanced Bonds Sub-Accounts of the Bond Account and applied to the payment of principal of and interest on the Bonds secured by such Credit Facility when due. If there is more than one Credit Facility, then separate accounts shall be established for this purpose.

(iv) Sums for the redemption of Bonds shall be deposited into the Bond Account and shall be applied to make such redemptions.

(v) Sums received upon exercise of remedies by the Trustee or the Issuer after an Event of Default (except sums received by the Issuer pursuant to the Reserved Rights) shall be deposited in the Bond Account. Such monies shall be applied in accordance with the provisions of the Indenture.

(b) While a Credit Facility is in effect with respect to a Series of Bonds, each deposit into the Bond Account not constituting Available Moneys shall be placed in a separate account or subaccount within the Bond Account, and may not be commingled with other money in any such account or subaccount until such money becomes Available Moneys.

(c) With respect to a Series of Bonds enhanced by a Credit Facility, the Issuer authorizes and directs the Trustee, and the Trustee agrees, to withdraw from the related Enhanced Bond Sub-Account within the Bond Account, and make available at the Principal Office of the Trustee sufficient funds (to the extent available) to pay the principal of, redemption premium, if any, and interest on such Series of the Bonds enhanced by a Credit Facility as such payments become due and payable, whether due by maturity, acceleration, redemption or otherwise, only in the following order of priority:

FIRST: Amounts drawn by the Trustee under a Credit Facility.

SECOND: Any Available Moneys, other than amounts received by the Trustee in respect of drawings under a Credit Facility.

THIRD: Any other available moneys received by the Trustee from the Borrower.

(d) After provision is made for the payment of the principal of, redemption premium, if any, or interest on any Series of Bonds on a given payment date and to the extent that the related Credit Facility Provider has not been reimbursed by the Borrower, the Trustee shall pay such Credit Facility Provider the amount necessary to reimburse such Credit Facility Provider with respect to the related Reimbursement Obligations from amounts available for such purpose that are on deposit in the Enhanced Bond Sub-Accounts within the Bond Account.

(e) Any moneys which have been deposited in the Bond Account for application to any of the mandatory sinking fund payments shall be applied by the Trustee, if the Trustee is directed to do so in a Written Request of the Borrower, to the purchase of the applicable Bonds as and when and at such prices (including brokerage and other charges but excluding accrued interest) as the Borrower may in its discretion determine, except that the purchase price (excluding accrued interest) shall not exceed the par value of such Bonds. Any Bonds so purchased with moneys designated for a mandatory sinking fund payment shall be applied, to the extent of the full principal amount thereof, to reduce said mandatory sinking fund payment from such mandatory sinking fund payments as shall be selected by the Borrower. All Bonds purchased pursuant to this paragraph shall be cancelled by the Trustee.

C-24 (f) If the Trustee has not received any payment required to be made by the Borrower under the Agreement to pay principal or redemption price of or interest on the Bonds (or reimburse a Credit Facility Provider for such payments) by the Business Day prior to the date such payment is due on the Bonds, the Trustee shall promptly notify the Borrower, the Issuer, the related Credit Facility Providers and the Special Purchasers of such insufficiency by telephone, telecopy or telegram and confirm such notification by written notice. Failure by the Trustee to give notice pursuant to this paragraph, or the insufficiency of any such notice, shall not affect the payment obligations of the Borrower under the Agreement, including without limitation, the timing thereof.

Bond Purchase Fund. Pursuant to the Indenture, there is created and established with the Tender Agent a trust fund to be designated “LACMA Bond Purchase Fund.” The Tender Agent shall further establish within the Bond Purchase Fund a separate trust account to be referred to under the Indenture as a “Remarketing Account” and a separate trust account to be referred to under the Indenture as the “Credit Facility Purchase Account.” To the extent there are separate Credit Facilities securing separate Series of Bonds, separate Accounts shall be established with respect to each Series of Bonds.

Only proceeds derived from the remarketing of Bonds shall be deposited into the Remarketing Account and such moneys shall not be commingled with moneys derived from any other sources. Notwithstanding the foregoing, upon receipt of the proceeds of a remarketing of Bank Bonds, the Tender Agent shall immediately pay such proceeds to the related Credit Facility Provider.

Upon receipt from a Credit Facility Provider of the immediately available funds transferred to the Tender Agent pursuant to the Indenture, the Tender Agent shall deposit such money in the Credit Facility Purchase Account of the Bond Purchase Fund for application to the Tender Price of the Bonds required to be purchased on a Tender Date and secured by the related Credit Facility in accordance with the Indenture to the extent that the money on deposit in the Remarketing Account of the Bond Purchase Fund shall not be sufficient. Any amounts deposited in the Credit Facility Purchase Account and not needed with respect to any Tender Date for the payment of the Tender Price for any Bonds secured by the related Credit Facility shall be immediately returned to the related Credit Facility Provider.

Moneys deposited in the Remarketing Account and Credit Facility Purchase Account shall only be held in Eligible Accounts. If such account no longer qualifies as an Eligible Account, the Trustee must transfer funds on deposit therein within 30 days to an Eligible Account.

Redemption Account. At the direction of the Borrower, the Trustee shall establish, maintain and hold in trust a separate account within the Revenue Fund to be used for the redemption of Bonds. All amounts deposited in such account shall be used and withdrawn by the Trustee solely for the purpose of redeeming Bonds in the manner and upon the terms and conditions specified in the Indenture; provided that, at any time prior to giving such notice of redemption, the Trustee may on the written instructions of the Borrower apply such amounts to the purchase of Bonds at public or private sale, as and when and at such prices (including brokerage and other charges, but excluding accrued interest, which is payable as interest pursuant to the Indenture) as the Trustee may in its discretion determine, except that the purchase price (exclusive of accrued interest) may not exceed the Redemption Price then applicable to such Bonds.

Investment of Moneys in Funds and Accounts

All moneys in any of the funds and accounts (other than the Rebate Fund or remarketing proceeds) established pursuant to the Indenture shall be invested by the Trustee solely in such Permitted Investments as are specified in a Request of the Borrower received by the Trustee in accordance with the Indenture, provided, however, that, if the Borrower does not file such a Request with the Trustee, the

C-25 Trustee shall invest to the extent practicable in investments described in clause (d) of the definition of the term “Permitted Investments” in the Indenture.

All interest, profits and other income received from the investment of moneys within the Project Fund shall be credited to such fund. Except as otherwise provided in written instructions of the Borrower, all interest, profits and other income received from the investment of moneys in any other fund or account established under the Indenture (the Borrower shall not be authorized to transfer interest, profits or other income from the Rebate Fund or remarketing proceeds) shall be credited to the Revenue Fund.

Except as otherwise provided in the Indenture, investments in any and all funds and accounts established pursuant to the Indenture (other than the Rebate Fund or remarketing proceeds) may be commingled for purposes of making, holding and disposing of investments, notwithstanding provisions in the Indenture for transfer to or holding in a particular fund amounts received or held by the Trustee, provided that the Trustee shall at all times account for such investments strictly in accordance with the particular funds to which they are credited and otherwise as provided in the Indenture. The Trustee may act as principal or agent in the making or disposing of any investment. The Trustee or its affiliates may act as sponsor, advisor or depository with regard to any Permitted Investment. The Trustee may sell at the best price obtainable, or present for redemption, any securities so purchased whenever it shall be necessary to provide moneys to meet any required payment, transfer, withdrawal or disbursement from the fund or account to which such securities is credited, and the Trustee shall not be liable or responsible for any loss resulting from such investment. Any Permitted Investment that is a registrable security shall be registered in the name of the Trustee.

Notwithstanding anything to the contrary in certain sections of the Indenture, moneys held by the Trustee that are remarketing proceeds or draws on the Credit Facilities shall be held uninvested and uncommingled with other moneys.

Tax Covenants

The Issuer shall at all times do and perform all acts and things permitted by law and the Indenture which are necessary or desirable in order to assure that interest paid on the Bonds (or any of them) will be excluded from gross income for federal income tax purposes and shall take no action that would result in such interest not being so excluded. Without limiting the generality of the foregoing, the Issuer agrees to comply with the provisions of the Tax Agreement. This covenant shall survive payment in full or defeasance of the Bonds.

Other Covenants; Amendment of Agreement

(a) Subject to the provisions of the Indenture, the Trustee shall upon receipt of amounts due from the Borrower pursuant to the Agreement, perform such duties as are expressly provided for under the Indenture which are imposed upon the Issuer under the Agreement and assigned to the Trustee pursuant to the Indenture and shall enforce, and take all steps, actions and proceedings reasonably necessary for the enforcement of the rights of the Issuer under the Agreement as assigned to the Trustee.

(b) The Issuer shall not amend, modify or terminate any of the terms of the Agreement, or consent to any such amendment, modification or termination, without the prior written consent of the Requisite Special Parties and the Trustee. The Trustee shall give such written consent under the following circumstances:

(i) to add to the covenants and agreements of the Issuer in the Agreement contained, other covenants and agreements thereafter to be observed, or to assign or pledge additional security for

C-26 the Bonds, or to surrender any right or power reserved to or conferred upon the Issuer under the Indenture;

(ii) to make such provisions for the purpose of curing any ambiguity, inconsistency or omission, or of curing, correcting or supplementing any defective provision, contained in the Agreement;

(iii) in connection with an amendment of the Indenture without Bondholder consent, as permitted by the Indenture for the purpose of conforming the terms, conditions and covenants of the Agreement to the corresponding or related provisions of the Indenture;

(iv) in connection with the issuance of additional indebtedness of the Borrower for the purpose of conforming the terms, conditions and covenants of the Agreement as necessary or desirable to provide for such indebtedness;

(v) any amendment that is effective only after the purchase of all the Bonds (other than Bonds in the Direct Purchase Mode, provided the consent of the Requisite Special Parties has been obtained) and which is disclosed to the new purchasers of the Bonds;

(vi) any amendment or modification to the Agreement that does not materially and adversely affect the interests of the Holders of the Bonds; or

(vii) if the Holders of a majority in aggregate principal amount of the Bonds then Outstanding consent in writing to such amendment, modification or termination.

No such amendment, modification or termination shall reduce the amount of Loan Payments to be made to the Issuer or the Trustee by the Borrower pursuant to the Agreement, or extend the time for making such payments, without the written consent of all of the Holders of the Bonds then Outstanding. For purposes of determining whether one of the foregoing circumstances apply to the proposed amendment or modification of the Agreement, so long as the Requisite Special Parties have consented to such amendment or modification, then the Series of Bonds in the Direct Purchase Mode may be disregarded in such determination. On or prior to the effective date of any such amendment to the Agreement, the Trustee shall receive a Favorable Opinion of Bond Counsel to the effect that such amendment or modification is permitted under the Indenture, and such amendment or modification will not cause interest on the Bonds to be included in the gross income of the Holders thereof for federal income tax purposes. The Trustee may rely on such opinion in giving its consent to such amendment or modification. The Trustee shall mail a copy of such amendment as executed to the Credit Facility Providers and the Special Purchasers for the affected Series and each Rating Agency promptly after execution by the Issuer and the Borrower.

Any determination that any amendment or modification to the Agreement does not materially and adversely affect the interests of the Holders of the Bonds pursuant to paragraph (b)(vi) (and any Favorable Opinion of Bond Counsel as to whether such amendment or modification is permitted hereunder) may be based solely upon confirmation letter(s) from the Rating Agency or Agencies providing the then-current credit ratings on the Bonds that such credit ratings will not be downgraded as a result of such amendment or modification; provided that a determination based on ratings confirmation pursuant to this paragraph may only be made if such credit ratings are investment grade (BBB-/Baa3) at the time of such proposed modification or amendment.

C-27 Issuance of Additional Bonds

Additional Series of Bonds may be issued hereunder subject to the following conditions:

(a) The Additional Series of Bonds are issued pursuant to a Supplemental Indenture and the Trustee acts as trustee for such Additional Series of Bonds;

(b) Any collateral pledged to secure Additional Series of Bonds must also secure the Outstanding Bonds on a pari passu basis;

(c) No such issuance of Additional Series of Bonds may occur should any event of default (or any event which, once all notice or grace periods have passed, would constitute an event of default) under the Indenture, under the Agreement, under any Credit Facility Provider Agreement or under any Direct Purchase Agreement shall have occurred and be continuing (or would result from such issuance) unless such default shall be corrected upon such issuance of Additional Bonds;

(d) A Favorable Opinion of Bond Counsel must be delivered to the effect that the Additional Bonds are valid and binding obligations of the Issuer and are obligations the interest on which is excludable from gross income under the Code for federal income tax purposes (unless such Bonds are issued as taxable instruments).

Notwithstanding the foregoing, the Borrower may incur indebtedness other than Additional Bonds in accordance with the Agreement and any such indebtedness may be issued by the Borrower directly or on behalf of the Borrower by an issuer other than the Issuer, or may be incurred under documents other than the Indenture and the Loan Agreement and by an issuer other than the Issuer.

Events of Default

If one or more of the following events (“Events of Default”) shall happen:

(a) if default shall be made in the due and punctual payment of the principal of, or premium (if any) on, any Bond when and as the same shall become due, whether at maturity or by redemption or by declaration of acceleration;

(b) if default shall be made in the due and punctual payment of any installment of interest on any Bond when and as such interest installment shall become due;

(c) if default shall be made in the due and punctual payment of the Tender Price of any Bond subject to mandatory tender for purchase on any Special Mandatory Tender Date;

(d) if material default shall be made by the Issuer in the performance or observance of any other of the material covenants, agreements or conditions on its part in the Indenture or in the Bonds contained, and such material default shall have continued for a period of sixty (60) days after written notice thereof, specifying such material default and requiring the same to be remedied, shall have been given to the Issuer and the Borrower by the Trustee, or to the Issuer, the Borrower and the Trustee by the Holders of not less than a majority in aggregate principal amount of the Bonds at the time Outstanding; or

(e) if a Loan Default Event has occurred and is continuing,

(f) receipt by the Trustee of (i) written notice from a Credit Facility Provider (if any) that the interest component of the related Credit Facility will not be reinstated after a draw and/or that an “Event

C-28 of Default” under the related Credit Facility Agreement has occurred and is continuing, (ii) written direction to cause a mandatory tender or an acceleration of the related Series of Bonds, and (iii) evidence of the consent of the Requisite Special Parties to such mandatory tender or acceleration; or

(g) during a Direct Purchase Period or in the event any Bonds of any Series constitute Direct Purchase Unremarketed Bonds, the Trustee shall receive a Direct Purchase Acceleration Notice from the Requisite Special Parties, or the Bank Agent on behalf of the Requisite Special Parties (provided, that, for the avoidance of doubt, the delivery of a Direct Purchase Default Rate Notice by the Requisite Special Parties, or the Bank Agent on behalf of the Requisite Special Parties, shall not constitute an Event of Default under the Indenture);

then and in each and every such case during the continuance of such Event of Default, the Trustee, by notice in writing to the Issuer and the Borrower, may, with the consent of the Requisite Special Parties (or the Bank Agent on behalf of the Requisite Special Parties) and, upon the written request of the Holders of not less than a majority in aggregate principal amount of the Bonds at the time Outstanding and with the written consent of the Requisite Special Parties (or the Bank Agent on behalf of the Requisite Special Parties) or at the written direction of the Requisite Special Parties (or the Bank Agent on behalf of the Requisite Special Parties) shall declare the principal of all the Bonds then Outstanding, and the interest accrued thereon, to be due and payable immediately, and upon any such declaration the same shall become and shall be immediately due and payable; provided however, that, the foregoing shall be subject to the last paragraph of this sub-heading. The Trustee shall send a copy of the foregoing notice to the Rating Agencies. Upon any such declaration the Trustee shall promptly draw upon any then-existing Credit Facilities in accordance with the terms thereof and apply the amount so drawn to pay the principal of and interest on the Bonds so declared to be due and payable. Interest shall cease to accrue upon such declaration with respect to Bonds of any Series enhanced by a Credit Facility.

This provision, however, is subject to the condition that if, at any time after the principal of the Bonds shall have been so declared due and payable, and before any judgment or decree for the payment of the moneys due shall have been obtained or entered as hereinafter provided, there shall have been deposited with the Trustee a sum sufficient to pay all principal on the Bonds matured prior to such declaration and all matured installments of interest (if any) upon all the Bonds, with interest on such overdue installments of principal at the rate borne by the respective Bonds, and the reasonable fees and expenses by the Trustee (including but not limited to those of its attorneys), and any and all other defaults known to the Trustee (other than in the payment of principal of and interest on the Bonds due and payable solely by reason of such declaration) shall, to the satisfaction of the Trustee no longer be continuing, or provision deemed by the Trustee to be adequate shall have been made therefor, then, and in every such case, the Requisite Special Parties (or the Bank Agent on behalf of the Requisite Special Parties) or the Holders of at least a majority in aggregate principal amount of the Bonds then Outstanding, with the written consent of the Requisite Special Parties, by written notice to the Issuer, the Credit Facility Providers, the Special Purchasers and the Trustee, may, on behalf of the Holders of all of the Bonds, rescind and annul such declaration and its consequences and waive such default; but no such rescission and annulment shall extend to or shall affect any subsequent default, or shall impair or exhaust any right or power consequent thereon.

Notwithstanding any other provision of the Indenture, the Trustee shall not declare the principal of all the Bonds then Outstanding to be due and payable under this sub-heading without the written consent of the Requisite Special Parties; provided, however, that, upon the occurrence of any Event of Default under paragraphs (f) or (g) herein, a mandatory tender for purchase as directed by a Credit Facility Provider or a Special Purchaser after the provision of a Direct Purchase Acceleration Notice pursuant to the Indenture, a mandatory redemption at the direction of a Special Purchaser pursuant to the Indenture, and the written consent of the Requisite Special Parties (or the Bank Agent on behalf of the

C-29 Requisite Special Parties) or if the principal and accrued interest of any Bond is declared to be due and payable under any other circumstances pursuant to the provisions of this sub-heading, then the principal and accrued interest of all Bonds of every Series shall automatically and immediately become due and payable without any action or consent of the Trustee or any Holder (including any Requisite Special Parties).

Institution of Legal Proceedings by Trustee

If one or more Events of Default shall happen and be continuing, the Trustee in its discretion may, and upon the written request of the Holders of a majority in aggregate principal amount of the Bonds then Outstanding, and upon being indemnified to its satisfaction therefor, shall, proceed to protect or enforce its rights or the rights of the Holders of Bonds under the Act or under the Agreement or the Indenture by a suit in equity or action at law, either for the specific performance of any covenant or agreement contained in the said documents, or in aid of the execution of any power granted under the Indenture, or by mandamus or other appropriate proceeding for the enforcement of any other legal or equitable remedy as the Trustee shall deem most effectual in support of any of its rights or duties under the Indenture.

Remedies Cumulative

No remedy under the Indenture conferred upon or reserved to the Trustee, the Issuer, the Requisite Special Parties, the Credit Facility Providers, the Special Purchasers, or to any Holder of the Bonds is intended to be exclusive of any other remedy, but each and every such remedy shall be cumulative and shall be in addition to every other remedy given under the Indenture or now or hereafter existing at law or in equity.

Covenant to Pay Bonds in Event of Default

The Issuer covenants that, upon the happening of any Event of Default, the Issuer will pay, but only out of Revenues and the other funds pledged therefor under the Indenture, to the Trustee, upon demand, for the benefit of the Holders, the whole amount then due and payable thereon (by declaration or otherwise) for interest or for principal and premium, or both, as the case may be, and all other sums which may be due under or secured by the Indenture, including reasonable compensation to the Trustee and its agents and counsel and any expenses or liabilities incurred by the Trustee and its agents and counsel under the Indenture.

Power of Trustee to Control Proceedings

In the event that the Trustee, upon the happening of an Event of Default, shall have taken some action, by judicial proceedings or otherwise, pursuant to its duties under the Indenture, whether upon its own discretion or upon the request of the Holders of a majority in aggregate principal amount of the Bonds then Outstanding, it shall have full power, in the exercise of its discretion for the best interests of the Holders, with respect to the continuance, discontinuance, withdrawal, compromise, settlement or other disposal of such action; provided, however, that the Trustee shall not, unless there no longer continues an Event of Default under the Indenture, discontinue, withdraw, compromise or settle, or otherwise dispose of any litigation pending at law or in equity, if at the time there has been filed with it a written request signed by the Holders of at least a majority in aggregate principal amount of the Bonds Outstanding under the Indenture opposing such discontinuance, withdrawal, compromise, settlement or other disposal of such litigation.

C-30 Limitation on Bondholders’ Right to Sue

Subject to the rights of the Requisite Special Parties, notwithstanding any other provision in the Indenture, no Holder of any Bond issued under the Indenture shall have the right to institute any suit, action or proceeding at law or in equity, for any remedy under or upon the Indenture unless (a) such Holder shall have previously given to the Trustee written notice of the occurrence of an Event of Default under the Indenture; (b) the Holders of at least a majority in aggregate principal amount of all the Bonds then Outstanding shall have made written request upon the Trustee to exercise the powers granted under the Indenture or to institute such action, suit or proceeding in its own name; (c) said Holders shall have tendered to the Trustee reasonable indemnity against the costs, expenses and liabilities to be incurred in compliance with such request; and (d) the Trustee shall have refused or omitted to comply with such request for a period of sixty (60) days after such written request shall have been received by, and said tender of indemnity shall have been made to, the Trustee.

Such notification, request, tender of indemnity and refusal or omission are conditions precedent to the exercise by any Holder of any remedy under the Indenture; it being understood and intended that no one or more Holders shall have any right in any manner whatever by his or their action to enforce any right under the Indenture, except in the manner provided herein, and that all proceedings at law or in equity to enforce any provision of the Indenture shall be instituted, had and maintained in the manner provided under the Indenture and for the equal benefit of all Holders of the Outstanding Bonds.

The right of any Holder of any Bond to receive payment of the principal of, premium, if any, and interest on such Bond out of Revenues and the funds pledged under the Indenture on and after the respective due dates expressed in such Bond, or to institute suit for the enforcement of any such payment on or after such respective dates, shall not be impaired or affected without the consent of such Holder, notwithstanding any provision of the Indenture.

Modification without Consent of Bondholders

Subject to the conditions and restrictions in the Indenture, the Issuer and the Trustee, from time to time and at any time, may enter into an indenture or indentures supplemental thereto, which indenture or indentures thereafter shall form a part of the Indenture, including, without limitation, for one or more of the following purposes; provided that the Requisite Special Parties (or the Bank Agent on behalf of the Requisite Special Parties), following consultation with the Borrower, shall have consented to such amendment, and the Trustee and Issuer shall have received a Favorable Opinion of Bond Counsel to the effect that such amendment or modification is permitted under the Indenture and will not cause interest on the Bonds to be included in the gross income of the Holders thereof for federal income tax purposes:

(a) to add to the covenants and agreements of the Issuer in the Indenture contained, other covenants and agreements thereafter to be observed, or to assign or pledge additional security for the Bonds, or to surrender any right or power reserved to or conferred upon the Issuer under the Indenture;

(b) to make such provisions for the purpose of curing any ambiguity, inconsistency or omission, or of curing, correcting or supplementing any defective provision, contained in the Indenture;

(c) to modify, amend or supplement the Indenture or any indenture supplemental hereto in such manner as to permit the qualification of the Indenture under the Trust Indenture Act of 1939 or any similar federal statute hereafter in effect, and, if they so determine, to add to the Indenture or any indenture supplemental thereto such other terms, conditions and provisions as may be permitted by said Trust Indenture Act of 1939 or similar federal statute;

C-31 (d) in connection with an amendment of the Agreement permitted by the Indenture for the purpose of conforming the terms, conditions and covenants of the Indenture to the corresponding or related provisions of such amended Agreement;

(e) in connection with the issuance of additional indebtedness of the Borrower for the purpose of conforming the terms, conditions and covenants of the Indenture as necessary or desirable to provide for such indebtedness;

(f) any amendment that is effective only after the purchase of all the Bonds (other than Bonds in the Direct Purchase Mode, provided the consent of the Requisite Special Parties has been obtained) and which is disclosed to the new purchasers of the Bonds; or

(g) any amendment or modification to the Indenture that does not materially and adversely affect the interests of the Holders of the Bonds.

Any supplemental indenture authorized by the provisions of this sub-heading may be executed by the Issuer and the Trustee without the consent of the Holders of any of the Bonds (other than the Requisite Special Parties), notwithstanding any of the provisions of the Indenture described under the sub-heading “Modification with Consent of Bondholders” below, but the Trustee shall not be obligated to enter into any such supplemental indenture which affects the Trustee’s own rights, duties or immunities under the Indenture or otherwise.

The Trustee shall mail an executed copy of any supplemental indenture authorized by this sub- heading to the Credit Facility Providers of the affected Series and each Rating Agency promptly after execution by the Issuer and the Trustee.

Any determination that any amendment or modification to the Indenture does not materially and adversely affect the interests of the Holders of the Bonds pursuant to paragraph (g) above (and any Favorable Opinion of Bond Counsel as to whether such amendment or modification is permitted hereunder) may be based solely upon confirmation letter(s) from the Rating Agency or Agencies providing the then-current credit ratings on the Bonds that such credit ratings will not be downgraded as a result of such amendment or modification; provided that a determination based on ratings confirmation pursuant to this paragraph may only be made if such credit ratings are investment grade (BBB-/Baa3) at the time of such proposed modification or amendment.

Modification with Consent of Bondholders

With the written consent of the Requisite Special Parties (or the Bank Agent on behalf of the Requisite Special Parties), the Borrower and the Holders of not less than a majority in aggregate principal amount of the Bonds at the time Outstanding, the Issuer and the Trustee may from time to time, with a Favorable Opinion of Bond Counsel to the effect that such amendment or modification will not cause interest on the Bonds to be included in the gross income of the Holders thereof for federal income tax purposes, enter into an indenture or indentures supplemental thereto for the purpose of adding any provisions to or changing in any manner or eliminating any of the provisions of the Indenture or of any supplemental indenture; provided, however, that no such supplemental indenture shall (1) extend the fixed mandatory redemption date, maturity date, Scheduled Mandatory Tender Date or Special Mandatory Tender Date of any Bonds or reduce the rate of interest thereon or extend the time of payment of interest, or reduce the amount of the principal thereof, or reduce any premium payable on the redemption thereof, (2) reduce the aforesaid percentage of Holders of Bonds whose consent is required for the execution of such supplemental indentures, or (3) deprive the Holders of the Bonds of the lien created by the Indenture upon the Revenues or the funds pledged under the Indenture, in each case without the consent of the

C-32 Holders of all the Bonds then Outstanding. Notwithstanding the foregoing, with the consent of all of the Holders of the affected Series of the Bonds (and without the consent of the Holders of a majority in aggregate principal amount of the Bonds), a supplemental indenture may be entered into pursuant to this sub-heading which extends the fixed mandatory redemption date, maturity date, Scheduled Mandatory Tender Date or Special Mandatory Tender Date of a Series of Bonds or reduces the rate of interest thereon or extends the time of payment of interest, or reduces the amount of the principal thereof, or reduces any premium payable on the redemption thereof. Upon the filing with the Trustee of evidence of the consent of the Borrower and the Bondholders, as aforesaid, the Trustee shall join with the Issuer in the execution of such supplemental indenture unless such supplemental indenture affects the Trustee’s own rights, duties or immunities under the Indenture or otherwise, in which case the Trustee may in its discretion, but shall not be obligated to, enter into such supplemental indenture.

It shall not be necessary for the consent of the Borrower and the Bondholders under this sub- heading to approve the particular form of any proposed supplemental indenture, but it shall be sufficient if such consent shall approve the substance thereof.

Promptly after the execution by the Issuer and the Trustee of any supplemental indenture pursuant to the provisions of this sub-heading, the Trustee shall mail a notice, setting forth in general terms the substance of such supplemental indenture, to the Borrower and the Bondholders at the addresses shown on the Bond registration books maintained by the Trustee. Any failure of the Trustee to give such notice, or any defect therein, shall not, however, in any way impair or affect the validity of any such supplemental indenture.

The Trustee shall mail an executed copy of such supplemental indenture and any amendment to the Agreement to the Credit Facility Providers of the affected Series and each Rating Agency promptly after execution by the Issuer, the Trustee, or in the case of the Agreement, the Borrower.

Discharge of Indenture

A Series of Bonds may be paid by the Issuer in any of the following ways, but solely from Revenues and other funds pledged under the Indenture or other amounts made available by the Borrower, provided that the Issuer also pays or causes to be paid any other sums payable under the Indenture by the Issuer:

(a) by paying or causing to be paid the principal of and premium, if any, and interest on a Series of Bonds Outstanding, as and when the same become due and payable;

(b) by depositing with the Trustee, in trust, at or before maturity, money or securities in the necessary amount to pay or redeem a Series of Bonds Outstanding; or

If the Issuer shall pay all of a Series of Bonds then Outstanding as provided above and shall also pay or cause to be paid all other sums payable under the Indenture by the Issuer, and any balance remaining in the funds and accounts established under the Indenture shall have been paid to the related Credit Facility Providers and Special Purchasers to the extent any amounts are owing to the related Credit Facility Providers and Special Purchasers under the related Credit Facility Provider Agreements and Direct Purchase Agreement, as applicable, and notwithstanding that any Bonds of such Series shall not have been surrendered for payment, then at the election of the Issuer (evidenced by a Certificate of the Issuer, filed with the Trustee, signifying the intention of the Issuer to discharge all such indebtedness and the Indenture with respect to such Series of Bonds), which election shall be made on the written request

C-33 of the Borrower, the Indenture and the pledge of Revenues made under the Indenture and all covenants, agreements and other obligations of the Issuer under the Indenture shall cease, terminate, become void and be completely discharged and satisfied, but only with respect to such Series of Bonds paid as provided above and except as provided in the Indenture. After all Series of Bonds have been paid in full and the Indenture discharged as to all Series of Bonds as described above, the Trustee shall (i) transfer any balance remaining in the funds and accounts established under the Indenture upon request of the Issuer (which request shall be made upon the written request of the Borrower) and (ii) cause an accounting for such period or periods as may be requested by the Issuer to be prepared and filed with the Issuer and the Borrower and shall execute and deliver to the Issuer and the Borrower all such instruments as may be necessary or desirable to evidence such discharge and satisfaction, and the Trustee shall pay over, transfer, assign or deliver to the Borrower all moneys or securities or other property held by it pursuant to the Indenture (except for any money in the Rebate Fund, which shall be disbursed pursuant to the Indenture) which are not required for the payment or redemption of Bonds not theretofore surrendered for such payment or redemption and which are not required for the payment of fees and expenses of the Trustee.

Discharge of Liability on Bonds

Upon the deposit with the Trustee, in trust, at or before maturity, of money or securities in the necessary amount to pay or redeem any Outstanding Bond, whether upon or prior to its maturity or the redemption date of such Bond, (provided that, if such Bond is to be redeemed prior to the maturity thereof, notice of such redemption shall have been given as provided under the Indenture or provision satisfactory to the Trustee shall have been made for the giving of such notice), then all liability of the Issuer in respect of such Bond shall cease, terminate and be completely discharged, except only that thereafter the Holder thereof shall be entitled to payment of the principal of, and premium, if any, and interest on such Bond by the Trustee, and the Trustee shall remain liable for such payment but only out of the money or securities deposited with the Trustee as aforesaid for its payment, provided further, however, that the provisions of the Indenture regarding the escheat of unclaimed funds shall apply in all events.

The Issuer or the Borrower may at any time surrender to the Trustee for cancellation by it any Bonds previously issued and delivered, which the Issuer or the Borrower may have acquired in any manner whatsoever, and such Bonds, upon such surrender and cancellation, shall be deemed to be paid and retired.

Deposit of Money or Securities with Trustee

Whenever in the Indenture it is provided or permitted that there be deposited with or held in trust by the Trustee money or securities in the amount necessary to pay or redeem any Bonds, the money or securities so to be deposited or held may include money or securities held by the Trustee in the funds established pursuant to the Indenture and shall be:

(1) lawful money of the United States of America in an amount equal to the principal amount of such Bonds and all unpaid interest thereon to maturity, except that, in the case of Bonds which are to be redeemed prior to maturity and in respect of which notice of such redemption shall have been given as provided in the Indenture or provision satisfactory to the Trustee shall have been made for the giving of such notice, the amount to be deposited or held shall be the principal amount of such Bonds and all unpaid interest thereon to the redemption date, together with the redemption premium, if any; or

(2) (a) noncallable direct obligations of the United States of America (including, without limitation, obligations issued or held in book-entry form on the books of the Department of the Treasury

C-34 or obligations the principal of and interest on which are unconditionally guaranteed by the United States of America (including without limitation the interest component of Resolution Funding Corporation strips for which separation of principal and interest is made by request to the Federal Reserve Bank of New York in book-entry form) or (b) securities the interest on which is excludable from gross income for federal tax purposes which have been advance refunded pursuant to the Code and for which Moody’s and S&P are maintaining a rating within the highest rating category of each such rating service and the principal of and interest on which, in the written opinion of an Accountant, when due will provide money sufficient to pay the principal of, and premium, if any, and all unpaid interest to maturity, or to the redemption date, as the case may be, on the Bonds to be paid or redeemed, as such principal, and premium, if any, and interest become due, provided that, in the case of Bonds which are to be redeemed prior to the maturity thereof, notice of such redemption shall have been given as provided in the Indenture or provision satisfactory to the Trustee shall have been made for the giving of such notice;

provided, in each case, that the Trustee shall have been irrevocably instructed (by the terms of the Indenture or by Request of the Issuer) to apply such money to the payment of such principal, and premium, if any, and interest with respect to such Bonds and provided, further, that the Issuer and the Trustee shall have received (1) a Favorable Opinion of Bond Counsel to the effect that such deposit shall not cause interest on the Bonds to be included in the gross income of the Holders thereof for federal income tax purposes and (2) a verification report by a firm of certified public accountants or other financial services firm selected by the Borrower verifying that the money or securities so deposited together with earnings thereon will be sufficient to make all payments of principal of, premium, if any, and interest on the Bonds to be discharged to and including the earlier of their respective maturity dates or the date they are to be redeemed.

Defeasance of any Series of Bonds enhanced by a Credit Facility shall be funded with Available Moneys. Defeasance shall occur only (i) with respect to Bonds in the Fixed Rate, (ii) after receipt of a letter from the Rating Agencies stating the rating on the Bonds, or (iii) pursuant to an escrow funded at the Maximum Bond Interest Rate with respect to any interest rates not yet determined with an escrow period of up to the first possible tender or redemption date for the Bonds. The Trustee shall promptly send notice of defeasance to the Rating Agencies if such defeasance is done under (i) or (iii) of this paragraph.

LOAN AGREEMENT, AS SUPPLEMENTED

The Loan Agreement provides the terms of the loan of the Bond proceeds to the Borrower and the repayment of and security for such loan provided by the Borrower. Although certain provisions of the Loan Agreement are summarized below, this summary does not purport to be complete or definitive and is qualified in its entirety by reference to the full terms of the Loan Agreement.

Payment of Bonds and Financial Contracts

(A) The Borrower agrees that it will pay, for the account of the Issuer, all sums necessary for the payment of the debt service on the Bonds (the “Loan Payments”) as follows:

(1) Not later than the Business Day prior to each Interest Payment Date and every date on which principal of the Bonds is due (whether at maturity, by redemption or by acceleration as provided in the Indenture) with respect to the Bonds, the Borrower shall pay in immediately available funds at the Principal Corporate Trust Office of the Trustee the principal of (whether at maturity, by redemption or by acceleration as provided in the Indenture) and premium, if any, and interest then due on the Bonds.

C-35 (2) If remarketing proceeds are not available to the Tender Agent to pay the full amount of any Tender Price then due on any Special Mandatory Tender Date with respect to the Bonds of any Series, the Borrower shall pay to the Tender Agent such amounts as may be required to pay such Tender Price of the Bonds of such Series. Such payments shall be paid by the Borrower to the Tender Agent by 2:30 p.m. New York City time on such Special Mandatory Tender Date in immediately available funds in the amount requested by the Tender Agent pursuant to the Indenture.

(3) Each payment made pursuant to paragraph (A) shall at all times be sufficient to pay the total amount of interest and principal (whether at maturity or upon redemption or by acceleration) and premium, if any, then due on the Bonds; provided that any amount held by the Trustee in the Bond Account on the due date for a Loan Payment hereunder shall be credited against the installment due on such date to the extent available for such purpose under the terms of the Indenture. Notwithstanding the foregoing, if on any date the amount held by the Trustee in the Bond Account is insufficient to make any required payments of principal of (whether at maturity, by redemption or by acceleration) and interest and premium, if any, on the Bonds as such payments become due, the Borrower shall forthwith pay such deficiency as a Loan Payment.

(B) The Borrower acknowledges that the Trustee shall give notice:

(1) to the Borrower, in accordance with the Indenture, at least four Business Days before each Interest Payment Date, of the amount, if any, credited or to be credited to the Bond Account by such next Interest Payment Date and the amount of the Loan Payment then due from the Borrower; and

(2) to the Borrower, the Credit Facility Providers, the Special Purchasers and the Issuer in accordance with the Indenture, if the Borrower fails to make any payment required hereunder by the due date, such notice to be given by telephone or fax, followed by written notice.

(C) The Borrower further acknowledges that any failure by the Trustee to provide the notices described in subsection (B) above will not relieve the Borrower from its obligation to make Loan Payments to the Trustee under the Loan Agreement when due.

(D) The Borrower may enter into interest rate swap agreements and other financial agreements relating to the Bonds.

(E) Except to the extent provided in the Loan Agreement with respect a Special Mandatory Tender Date, the Borrower has no obligation hereunder to make any payments with respect to the Tender Price of Bonds when such Bonds are subject to purchase on a Mandatory Tender Date.

(F) The Borrower hereby authorizes and directs the Trustee to make drawings under each Credit Facility in accordance with its terms and the provisions of the Indenture in order to pay the principal of, premium if any, and interest on the related Series of Bonds as and when the same shall become due and payable. The Trustee shall apply the related Loan Payments made hereunder to the reimbursement of such drawings. Drawings under a Credit Facility to pay the Tender Price of tendered Bonds shall be made by the Trustee and reimbursed as provided under the Indenture and each related Credit Facility Provider Agreement.

Obligations of the Borrower Unconditional

The obligations of the Borrower to make the Loan Payments and Additional Payments and to perform and observe the other agreements on its part contained in the Agreement shall be absolute and

C-36 unconditional general obligations of the Borrower. Until such time as the principal of and premium, if any, and interest on all Bonds shall have been fully paid (or provision for the payment thereof shall have been made as provided in the Indenture), the Borrower (i) will not suspend or discontinue any Loan Payments or Additional Payments, (ii) will perform and observe all of its other agreements contained in the Agreement, and (iii) will not terminate the Agreement for any cause, including, without limiting the generality of the foregoing, any change in the laws of the United States of America or of the State or any political subdivision of either or any failure of the Issuer to perform and observe any agreement, whether express or implied, or any duty, liability or obligation arising out of or connected with the Agreement. The Agreement shall be deemed and construed to be a “net contract,” and the Borrower shall pay absolutely net the Loan Payments, Additional Payments and all other payments required under the Agreement, free of any deductions, without abatement, diminution or set-off other than those expressly provided in the Agreement.

Tax Covenants

(A) General. The Borrower hereby covenants with the Holders that, notwithstanding any other provisions of the Agreement or the Indenture, it shall not take any action, or fail to take any action, if any such action or failure to take action would adversely affect the exclusion from gross income of interest on the Bonds under Section 103 of the Code. The Borrower shall not directly or indirectly, use or permit the use of proceeds of the Bonds or any of the property financed or refinanced with proceeds of the Bonds, or any portion thereof, by any person other than a governmental unit (as such term is used in Section 141 of the Code) or an organization described in Section 501(c)(3) of the Code in pursuit of such organization’s exempt purpose and other than in an “unrelated trade or business” (as such term is defined in Section 513 of the Code), in such manner or to such extent as would result in the loss of exclusion from gross income for federal income tax purposes of interest on the Bonds. The Borrower agrees to take no action or suffer any action to be taken by others within its control that would cause it to be a “private foundation” as defined in Section 509(a) of the Code.

(B) Qualified 501(c)(3) Bonds. The Borrower shall not take any action, or fail to take any action, if any such action or failure to take action would cause the Bonds to be other than “qualified 501(c)(3) bonds” within the meaning of Section 145 of the Code, and in furtherance thereof, shall not make any use of the proceeds of the Bonds or any of the property financed or refinanced with proceeds of the Bonds, or any portion thereof, or any other funds of the Borrower, that would cause the Bonds to be other than “qualified 501(c)(3) bonds” within the meaning of Section 145 of the Code. To that end, so long as any Bonds are outstanding, the Borrower, with respect to such proceeds and property and such other funds, will comply with applicable requirements of the Code and all regulations of the United States Department of the Treasury issued thereunder, to the extent such requirements are, at the time, applicable and in effect. The Borrower shall establish reasonable procedures necessary to ensure continued compliance with Section 145 of the Code (or, if applicable, the 1954 Code) and the continued qualification of the Bonds as “qualified 501(c)(3) bonds.”

(C) Arbitrage. The Borrower shall not, directly or indirectly, use or permit the use of any proceeds of any Bonds, or of any property financed or refinanced thereby, or other funds of the Borrower, or take or omit to take any action, that would cause the Bonds to be “arbitrage bonds” within the meaning of Section 148 of the Code. To that end, the Borrower shall comply with all requirements of Section 148 of the Code and all regulations of the United States Department of the Treasury issued thereunder to the extent such requirements are, at the time, in effect and applicable to the Bonds.

(D) Federal Guarantee. The Borrower shall not make any use of the proceeds of the Bonds or any other funds of the Borrower, or take or omit to take any other action, that would cause the Bonds to be “federally guaranteed” within the meaning of Section 149(b) of the Code.

C-37 (E) Compliance with Tax Agreement. In furtherance of the foregoing tax covenants under the Loan Agreement, the Borrower covenants that it will comply with the provisions of the Tax Agreement, which is incorporated in the Loan Agreement as if fully set forth therein. These covenants shall survive payment in full or defeasance of the Bonds.

(F) Restrict Yield. In the event that at any time the Borrower is of the opinion that for purposes of this sub-heading it is necessary or helpful to restrict or limit the yield on the investment of any moneys held by the Trustee under the Agreement or the Indenture, the Borrower shall so instruct the Trustee in a request of the Borrower.

Cooperation with Remarketing Agent

The Borrower covenants and agrees under the Loan Agreement to take all commercially reasonable actions to support the remarketing of the Bonds of any Series bearing interest in an Index Mode (1) in connection with any applicable Scheduled Mandatory Tender Date, and (2) in the event that any Series of Bonds is not successfully remarketed on the applicable Scheduled Mandatory Tender Date, in connection with any remarketing during the applicable Index Mode Rate Period. Without limiting the generality of the foregoing, the Borrower covenants and agrees to cooperate with the Remarketing Agent in the preparation of disclosure material for any such remarketing of the Bonds.

Events of Default

The following shall be “events of default” under the Agreement, and the terms “events of default” or “default” shall mean, whenever they are used in the Agreement, any one or more of the following events:

(A) The Borrower fails to make any Loan Payment by the date on which payment of the Bonds is due and payable pursuant to the Indenture (any payments made by a Credit Facility Provider pursuant to its respective Credit Facility shall not be counted in determining whether an event of default has occurred under this paragraph); or

(B) Borrower shall fail to observe or perform any other covenant, obligation, condition or agreement contained in the Loan Agreement and such failure shall remain unremedied for thirty (30) days after the Trustee notifies Borrower of such failure; provided, however, that any such failure that is not reasonably susceptible of cure within a 30-day period, such failure shall not constitute an Event of Default hereunder if (A) Borrower initiates such cure within such 30-day period and thereafter diligently pursues all action necessary to remedy such failure, and (B) such failure is remedied within one hundred twenty (120) days after such notification by the Trustee; or

(C) Proceedings for the appointment of a receiver, trustee, liquidator or custodian of Borrower or of all or a substantial part of the property thereof, or an involuntary case or other proceedings seeking liquidation, reorganization or other relief with respect to Borrower or any of its the debts under any bankruptcy, insolvency or other similar law now or hereafter in effect shall be commenced and an order for relief entered or such proceeding shall not be dismissed or discharged within sixty (60) days of commencement; or

(D) Any of the representations or warranties of the Borrower made in the Agreement or in any other document, certificate or writing furnished by the Borrower to the Issuer in connection with the application for or the negotiation of the Agreement or the issuance of the Bonds was false or incorrect in any material respect when made.

C-38 Remedies on Default

(A) In the event any of the Bonds shall at the time be Outstanding and unpaid (and provision for the payment thereof shall not have been made as provided in the Indenture) and any event of default referred to in Section 18 hereof shall have occurred and be continuing the Issuer or the Trustee may take any one or more of the following remedial steps (subject to paragraph (D) below):

(1) The Issuer or the Trustee may, at its option, declare all installments of Loan Payments to be immediately due and payable, whereupon the same shall become immediately due and payable.

(2) The Issuer or the Trustee may take whatever action at law or in equity that may appear necessary or desirable to collect the payments then due and thereafter to become due hereunder, whether on the stated due date or by declaration of acceleration or otherwise, for damages or for specific performance or otherwise to enforce performance and observance of any obligation, condition or covenant of the Borrower under the Agreement; provided that, notwithstanding anything to the contrary in the Loan Agreement, there shall be no recourse against the art collection of the Borrower.

For purposes of paragraph (A)(1) above, the term “all installments” shall mean an amount equal to the entire principal amount of the then Outstanding Bonds, together with all interest accrued or to accrue on and prior to the next succeeding redemption date or dates on which the Bonds can be and actually are redeemed after giving notice to the Holders thereof as required by the Indenture (less moneys available for such purpose then held by the Trustee) plus any other payments due or to become due under the Agreement, including, without limitation, any unpaid Additional Payments which are then due or will become due prior to the time that the Bonds are paid in full and the trust established by the Indenture is terminated.

(B) No remedy conferred upon or reserved to the Issuer or the Trustee under the Loan Agreement is intended to be exclusive of any other available remedy or remedies, but each and every such remedy shall be cumulative and shall be in addition to every other remedy given under the Agreement or now or hereafter existing at law or in equity or by statute. No delay in exercising or omission to exercise any right or power accruing upon any default shall impair any such right or power or shall be construed to be a waiver thereof, but any such right or power may be exercised from time to time and as often as may be deemed expedient. In order to entitle the Issuer or the Trustee to exercise any remedy reserved to it under this sub-heading, it shall not be necessary to give any notice, other than such notice as may be expressly required by the Agreement. The Trustee shall be deemed a third party beneficiary of all covenants and conditions contained in the Agreement.

(C) In the event the Borrower should default under any of the provisions of the Agreement and the Issuer or the Trustee should employ attorneys, including attorneys who are employees of the Issuer or the Trustee, and California Department of Justice attorneys, or incur other expenses for the collection of the payments due under the Agreement or the enforcement of performance or observance of any obligation or agreement on the part of the Borrower contained in the Agreement, the Borrower agrees that it will pay to the Issuer or the Trustee the reasonable fees of such attorneys and such other reasonable expenses so incurred by the Issuer and/or the Trustee.

(D) Anything in the Agreement to the contrary notwithstanding, neither the Trustee nor the Issuer shall exercise its right to accelerate the payment of all Loan Payments or the right to annul any declaration of acceleration without the written consent of the Requisite Special Parties; provided that upon an Event of Default declared by a Credit Facility Provider or upon receipt by the Trustee of a Direct Purchase Acceleration Notice from any Special Purchaser, as described under the Indenture, the payment

C-39 of all Loan Payments shall be automatically and immediately accelerated without any additional action of the Trustee or any Holder; provided further that if an any time there are no Requisite Special Parties, then any provisions in the Loan Agreement granting rights to the Requisite Special Parties shall be of no force or effect.

C-40 APPENDIX D

FORM OF BOND COUNSEL OPINION

[Closing Date]

California Infrastructure and Economic Development Bank Sacramento, California

Re: $______California Infrastructure and Economic Development Bank Refunding Revenue Bonds (Los Angeles County Museum of Art Project) Series 2016A

Ladies and Gentlemen:

We have acted as bond counsel to the California Infrastructure and Economic Development Bank (the “Issuer”) in connection with the issuance by the Issuer of $______aggregate principal amount of its Refunding Revenue Bonds (Los Angeles County Museum of Art Project), Series 2016A (the “2016A Bonds”), issued pursuant to the Constitution and the laws of the State of California (the “State”), particularly the Bergeson-Peace Infrastructure and Economic Development Bank Act, constituting Division I of Title 6.7 (commencing with Section 63000) of the California Government Code (the “Act”), and an Indenture, dated as of August 1, 2013, as supplemented by a First Supplemental Loan Agreement, dated as of November 1, 2016 (as supplemented, the “Indenture”), between the Issuer and U.S. Bank National Association, as trustee (the “Trustee”). The Indenture provides that the 2016A Bonds are being issued for the purpose of making a loan of the proceeds thereof to Museum Associates, doing business as the Los Angeles County Museum of Art (the “Borrower”) pursuant to a Loan Agreement, dated as of August 1, 2013, as supplemented by a First Supplemental Loan Agreement, dated as of November 1, 2016 (as supplemented, the “Loan Agreement”), between the Issuer and the Borrower. Capitalized terms not otherwise defined herein shall have the meanings ascribed thereto in the Indenture.

In such connection, we have reviewed the Indenture, the Loan Agreement, the Tax Regulatory Agreement, dated the date hereof (the “Tax Agreement”), between the Issuer and the Borrower, opinions of counsel to the Issuer, the Trustee and the Borrower, certificates of the Issuer, the Trustee, the Borrower and others, and such other documents, opinions and matters to the extent we deemed necessary to render the opinions set forth herein.

We have relied on the opinion of Nixon Peabody LLP, counsel to the Borrower, regarding, among other matters, the current qualification of the Borrower as an organization described in Section 501(c)(3) of the Internal Revenue Code of 1986 (the “Code”). We note that such opinion is subject to a number of qualifications and limitations. Failure of the Borrower to be organized and operated in accordance with the Internal Revenue Service’s requirements for the maintenance of its status as an organization described in Section 501(c)(3) of the Code may result in interest on the 2016A Bonds being included in gross income for federal income tax purposes, possibly from the date of issuance of the 2016A Bonds.

We have assumed the genuineness of all documents and signatures presented to us (whether as originals or as copies) and the due and legal execution and delivery thereof by, and validity against, any parties other than the Issuer. We have assumed, without undertaking to verify, the accuracy of the factual matters

D-1 represented, warranted or certified in the documents, and of the legal conclusions contained in the opinions, referred to in the second and third paragraphs hereof.

We call attention to the fact that the rights and obligations under the 2016A Bonds, the Indenture, the Loan Agreement and the Tax Agreement and their enforceability may be subject to bankruptcy, insolvency, reorganization, arrangement, fraudulent conveyance, moratorium and other laws relating to or affecting creditors’ rights, to the application of equitable principles, to the exercise of judicial discretion in appropriate cases and to the limitations on legal remedies against public entities in the State of California. We express no opinion with respect to any indemnification, contribution, penalty, choice of law, choice of forum or waiver provisions contained in the foregoing documents, nor do we express any opinion with respect to the state or quality of title to or interest in any of the real or personal property described in or subject to the lien of the Indenture or the Loan Agreement or the accuracy or sufficiency of the description contained therein of, or the remedies available to enforce liens on, any such property. Finally, we undertake no responsibility for the accuracy, completeness or fairness of the Official Statement or other offering material relating to the 2016A Bonds and express no opinion with respect thereto.

Based on and subject to the foregoing, and in reliance thereon, as of the date hereof, we are of the following opinions:

1. The 2016A Bonds constitute the valid and binding limited obligations of the Issuer.

2. The Indenture has been duly executed and delivered by, and constitutes the valid and binding obligation of, the Issuer. The Indenture creates a valid pledge of the Revenues to secure the payment of the principal of and interest on the 2016A Bonds, subject to the provisions of the Indenture permitting the application thereof for the purposes and on the terms and conditions set forth in the Indenture.

3. The Loan Agreement has been duly executed and delivered by, and constitutes a valid and binding agreement of, the Issuer.

4. The 2016A Bonds are not a lien or charge upon the funds or property of the Issuer except to the extent of the aforementioned pledge. Neither the faith and credit nor the taxing power of the State of California or of any political subdivision thereof is pledged to the payment of the principal of or the interest on the 2016A Bonds.

5. Under existing statutes and court decisions and assuming continuing compliance with certain tax covenants described below, interest on the 2016A Bonds is excluded from gross income for Federal income tax purposes pursuant to Section 103 of the Code. Interest on the 2016A Bonds is not treated as a preference item in calculating the alternative minimum tax imposed on individuals and corporations under the Code; such interest, however, is included in the adjusted current earnings of certain corporations for purposes of calculating the alternative minimum tax imposed on such corporations. In rendering our opinion, we have relied on certain representations, certifications of fact, and statements of reasonable expectations made by the Issuer, the Borrower and others in connection with the 2016A Bonds, and we have assumed compliance by the Issuer and the Borrower with certain ongoing covenants to comply with applicable requirements of the Code to assure the exclusion of interest on the 2016A Bonds from gross income under Section 103 of the Code.

The Code establishes certain requirements that must be met subsequent to the issuance and delivery of the 2016A Bonds in order that, for Federal income tax purposes, interest on the 2016A Bonds be not included in gross income pursuant to Section 103 of the Code. These requirements include, but are not limited to, requirements relating to the use and expenditure of 2016A Bond proceeds, restrictions on the investment of 2016A Bond proceeds prior to expenditure and the requirement that certain earnings be rebated to the Federal government. Noncompliance with such requirements may cause interest on the 2016A Bonds to become subject to Federal income taxation retroactive to their date of issue, irrespective of the date on which such noncompliance occurs or is ascertained.

D-2 On the date of delivery of the 2016A Bonds, the Issuer and the Borrower will execute the Tax Agreement containing provisions and procedures pursuant to which such requirements can be satisfied. In executing the Tax Agreement, the Issuer and the Borrower covenant that they will comply with the provisions and procedures set forth therein and that they will do and perform all acts and things necessary or desirable to assure that interest paid on the 2016A Bonds will, for the purpose of Federal income taxation, be excluded from gross income.

In rendering the opinion in paragraph 5 hereof, we have relied upon and assumed (i) the material accuracy of the representations, statements of intention and reasonable expectation, and certifications of fact contained in the Tax Agreement with respect to matters affecting the status of interest paid on the 2016A Bonds, and (ii) compliance by the Borrower with the procedures and covenants set forth in the Tax Agreement as to such tax matters.

6. In addition, in the opinion of Bond Counsel, under existing statutes, interest on the 2016A Bonds is exempt from State of California personal income taxes.

Except as stated in paragraphs 5 and 6 above, we express no opinion as to any other Federal, state or local tax consequences arising with respect to the 2016A Bonds or the ownership or disposition thereof. Furthermore, we express no opinion herein as to the effect of any action hereafter taken or not taken in reliance upon an opinion of counsel other than ourselves on the exclusion from gross income for Federal income tax purposes of interest on the 2016A Bonds.

We render our opinion under existing statutes and court decisions as of the date hereof, and we assume no obligation to update, revise or supplement this opinion to reflect any action hereafter taken or not taken, or any facts or circumstances that may hereafter come to our attention, or changes in law or in interpretations thereof that may hereafter occur, or for any other reason. We note that our client in connection with the issuance of the 2016A Bonds was the Issuer only and not any other party.

Respectfully submitted,

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APPENDIX E

FORM OF CONTINUING DISCLOSURE AGREEMENT

This CONTINUING DISCLOSURE AGREEMENT (the “Disclosure Agreement”) is entered into as of November 1, 2016, by and between Museum Associates, doing business as the Los Angeles County Museum of Art (the “Museum”), for the benefit of the Holders and Beneficial Owners of the Bonds and U.S. Bank National Association (the “Dissemination Agent”) in connection with the issuance of $______aggregate principal amount of California Infrastructure and Economic Development Bank Refunding Revenue Bonds (Los Angeles County Museum of Art Project), Series 2016A (the “Bonds”).

WITNESSETH:

WHEREAS, the California Infrastructure and Economic Development Bank (the “Issuer”) will issue and sell the Bonds;

WHEREAS, pursuant to an Indenture, dated as of August 1, 2013 (the “Original Indenture”), as supplemented by a First Supplemental Indenture, dated as of November 1, 2016 (the “First Supplemental Indenture”, and together with the Original Indenture, the “Indenture”), each by and between the Issuer and U.S. Bank National Association, as trustee, the Issuer has provided for the issuance of the Bonds; and

WHEREAS, the Securities and Exchange Commission (the “SEC”) has adopted Rule 15c2-12(b)(5) under the Securities Exchange Act of 1934, as amended (the “1934 Act”);

NOW THEREFORE, the Museum covenants and agrees for the benefit of the Holders and Beneficial Owners of the Bonds as follows:

SECTION 1. Definitions. Capitalized terms, unless otherwise defined herein, shall have the meanings set forth in the Indenture or the Official Statement, as applicable.

“Annual Report” shall mean any annual report provided by the Museum pursuant to, and as described in, Section 3 of this Disclosure Agreement.

“Compliance Report” shall mean a report that contains a general description of the Museum’s compliance status with each of its Continuing Covenant Agreements (including actual data related to the UNA Ratio calculation and any other similar calculation required thereunder, in each case as of the prior Fiscal Year end date) or, if the Museum is not in compliance with any Continuing Covenant Agreement, a general description of such noncompliance.

“Continuing Covenant Agreement” shall mean a Direct Purchase Agreement (as defined in the Indenture).

“County” shall mean the County of Los Angeles.

“Disclosure Representative” shall mean the Chief Financial Officer of the Museum or his or her designee, or such other officer or employee as the Museum shall designate in writing to the Dissemination Agent from time to time.

“Dissemination Agent” shall mean U.S. Bank National Association, or any successor Dissemination Agent designated in writing by the Museum.

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“Fiscal Year” shall mean 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 Museum and certified to the Dissemination Agent in writing by an authorized representative of the Museum.

“Funding Agreement” shall mean the Funding Agreement for the Los Angeles County Museum of Art, dated as of February 8, 1994, by and between the County and the Museum, as amended or supplemented.

“MSRB” shall mean the Municipal Securities Rulemaking Board established pursuant to Section 15B(b)(1) of the 1934 Act, as amended.

“Notice Event” shall mean any of the events listed in Section 4(a) and (b) of this Disclosure Agreement.

“Official Statement” shall mean the Official Statement relating to the Bonds, dated October __, 2016.

“Periodic Compliance Report” shall mean a report that contains a general description of the Museum’s compliance status with each of its Continuing Covenant Agreements (including actual data related to the UNA Ratio calculation and any other similar calculation required thereunder, in each case as of the prior December 31) or, if the Museum is not in compliance with any Continuing Covenant Agreement, a general description of such noncompliance.

“Person” shall mean an individual, corporation, firm, association, partnership, trust, or other legal entity or group of entities, including a governmental entity or any agency or political subdivision thereof.

“Repository” shall mean the MSRB or any other entity designated or authorized by the SEC to receive reports pursuant to the Rule. Until otherwise designated by the MSRB or the SEC, filings with the MSRB are to be made through the Electronic Municipal Market Access (“EMMA”) website of the MSRB, currently located at

“Rule” shall mean Rule 15c2-12(b)(5) adopted by the SEC under the 1934 Act, as the same may be amended from time to time.

“Trustee” shall mean U.S. Bank National Association, or any successor trustee under the Indenture.

“Underwriter” shall mean Wells Fargo Bank, National Association.

SECTION 2. Purpose of the Disclosure Agreement. This Disclosure Agreement is being executed and delivered by the Museum for the benefit of the Holders and the Beneficial Owners, and in order to assist the Underwriter in complying with the Rule.

SECTION 3. Provision of Annual Reports, Compliance Reports and Periodic Compliance Reports.

(a) The Museum shall, or shall cause the Dissemination Agent to, not later than 120 days after the end of the Fiscal Year of the Museum (which currently ends on June 30), commencing with the Fiscal Year of the Museum ended June 30, 2016, provide to the Repository an Annual Report which is consistent with the requirements of this Section 3 of this Disclosure Agreement; provided, however, that the Compliance Report shall be provided to the Repository no later than two (2) Business Days after such information is provided to any Special Purchaser pursuant to any Continuing Covenant Agreement and in no event later than 120 days after the end of the Fiscal Year of the Museum. Additionally, the Museum shall, or shall cause the Dissemination Agent to, after each December 31, commencing with December 31, 2016, provide to the Repository a Periodic Compliance Report no later than two (2) Business Days after such information is provided to any Special Purchaser pursuant to any Continuing Covenant Agreement and in no event later than

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60 days after each December 31. The Annual Report, Compliance Report, and Periodic Compliance Report must be submitted in electronic format, accompanied by such identifying information as is prescribed by the Repository, and may include by reference other information as provided in Section 4 of this Disclosure Agreement; provided that the audited financial statements of the Museum may be submitted separately from the balance of the Annual Report and later than the date required above for the filing of the Annual Report if such audited financial statements are not available by that date; and provided further that the Compliance Report and the Annual Report may be submitted as a single document. If the Fiscal Year of the Museum changes from that in effect as of the date hereof, it shall give notice of such change in the same manner as for a Notice Event under Section 4(f). If any party other than the Dissemination Agent provides the Annual Report, Compliance Report or Periodic Compliance Report to the Repository, it shall notify the Dissemination Agent that it has done so.

(b) Not later than ten (10) Business Days prior to the date specified in subsection (a) above for providing the Annual Report to the Repository and not later than one (1) Business Day prior to the date specified above for providing the Compliance Report or Periodic Compliance Report, the Museum shall provide the Annual Report, Compliance Report or Periodic Compliance Report, as applicable, to the Dissemination Agent. If by such date, the Dissemination Agent has not received a copy of the Annual Report, Compliance Report or Periodic Compliance Report, as applicable, the Dissemination Agent shall contact the Museum to determine if the Museum is in compliance with subsection (a) above.

(c) If the Dissemination Agent is unable to verify that an Annual Report, Compliance Report or Periodic Compliance Report, as applicable, has been provided to the Repository by the date required in subsection (a) above, the Dissemination Agent shall send a notice, in electronic format unless otherwise designated by the SEC and the Repository, in substantially the form attached as Exhibit A.

(d) The Dissemination Agent shall:

(i) determine each year prior to the date for providing the Annual Report the name and address of the Repository, if any;

(ii) file a report with the Museum certifying that the Annual Report, Compliance Report or Periodic Compliance Report, as applicable, has been provided pursuant to this Disclosure Agreement, stating the date it was provided to the Repository; and

(iii) file the Annual Report, Compliance Report or Periodic Compliance Report, as applicable, electronically with the Repository.

(e) Content of Annual Reports. The combined Annual Report of the Museum shall contain or include by reference:

(i) audited Financial Statements of the Museum prepared in accordance with generally accepted accounting principles for the Fiscal Year most recently ended (the “Financial Statements”); provided, however, that in the event that such Financial Statements are not available by the time the Annual Report is required to be filed pursuant to Section 3(a) herein, unaudited financial statements or updated projected operating results covering the previous Fiscal Year, in a format that complies with current generally accepted accounting principles, may be substituted therefor; provided, further, that audited Financial Statements shall be filed in the same manner as the Annual Report as soon as such Financial Statements become available; and

(ii) the following information which, except as noted below, shall be as of June 30 preceding the date of the Annual Report to the extent not included in the audited Financial Statements:

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(1) a brief summary of the Museum’s then-current fundraising campaign or a statement that no such campaign is in effect;

(2) the number of visitors for the prior Fiscal Year;

(3) the number of members for the prior Fiscal Year;

(4) for the prior Fiscal Year, the amount of the County’s aggregate contribution, whether pursuant to the Funding Agreement and/or other similar arrangement between the County and the Museum, and the amount of such contribution that constituted a cash payment to the Museum and the amount of such contribution made in-kind;

(5) an update to the table provided under the paragraph titled “Additional County Support” in Appendix A of the Official Statement;

(6) for the prior Fiscal Year, the percentage of the Museum’s total unrestricted revenues and support that were derived from membership dues and paid admissions;

(7) as of the prior Fiscal Year end date, the estimated termination payment that the Museum would be required to pay if the Swap Agreement (or any subsequent interest rate swap agreement, if applicable) was terminated on that date;

(8) (i) a Compliance Report and (ii) a general description of any material amendment to a Continuing Covenant Agreement or any related or similar agreement with any Special Purchaser or other direct purchaser during the prior Fiscal Year (or that otherwise has been agreed to by the applicable parties prior to the date of the Annual Report); and

(9) a general description of any new Continuing Covenant Agreement (or similar agreement) entered into with any new direct purchaser, including a description of any material changes to the financial or operating covenants included in such agreement (as compared to the Continuing Covenant Agreements in effect at the time of issuance of the Bonds as the same may have been previously amended with notice given to Holders of the Bonds pursuant to (8) above).

Any of the items listed in (i) or (ii) above may be included by specific reference to other documents, including official statements of debt issues to which the Museum is a party, which have been submitted to the Repository.

SECTION 4. Reporting of Significant Events.

(a) Pursuant to the provisions of this Section 4, the Museum shall give, or cause to be given, notice of the occurrence of any of the following events with respect to the Bonds, not in excess of ten (10) Business Days after the occurrence of such Notice Event to the Repository:

(i) principal and interest payment delinquencies;

(ii) unscheduled draws on debt service reserves reflecting financial difficulties;

(iii) unscheduled draws on credit enhancements reflecting financial difficulties;

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(iv) substitution of credit or liquidity providers, or their failure to perform;

(v) adverse tax opinions or the issuance by the Internal Revenue Service of proposed or final determinations of taxability or of a Notice of Proposed Issue (IRS Form 5701-TEB);

(vi) tender offers;

(vii) defeasances;

(viii) rating changes; and

(ix) bankruptcy, insolvency, receivership or similar event of the Museum (such event being considered to occur when any of the following occur: the appointment of a receiver, fiscal agent or similar officer therefor in a proceeding under the U.S. Bankruptcy Code or in any other proceeding under state or federal law in which a court or government authority has assumed jurisdiction over substantially all of the assets or business thereof, or if such jurisdiction has been assumed by leaving the existing governing body and officials or officers in possession but subject to the supervision and orders of a court or governmental authority, or the entry of an order confirming a plan of reorganization, arrangement or liquidation by a court or governmental authority having supervision or jurisdiction over substantially all of the assets or business thereof).

(b) Pursuant to the provisions of this Section 4, the Museum shall give, or cause to be given, notice of the occurrence of any of the following events with respect to the Bonds, if material, not in excess of ten (10) Business Days after the occurrence of such Notice Event to the Repository:

(i) Unless described in Section 4(a)(v), other notices or determinations by the Internal Revenue Service with respect to the tax status of the Bonds, or other events affecting the tax status of any Bonds;

(ii) modifications to rights of security holders;

(iii) bond calls;

(iv) release, substitution or sale of property securing repayment of the securities;

(v) non-payment related defaults;

(vi) the consummation of a merger, consolidation, or acquisition involving the Museum or the sale of all or substantially all of the assets thereof, other than in the ordinary course of business, the entry into a definitive agreement to undertake such an action or the termination of a definitive agreement relating to any such actions, other than pursuant to its terms; and

(vii) appointment of a successor or additional trustee or the change of name of a trustee.

(c) The Dissemination Agent shall, within one (1) Business Day, or as soon as reasonably practicable thereafter, of obtaining actual knowledge of the occurrence of any of the Notice Events, contact the Disclosure Representative, inform such person of the event, and request that the Museum promptly notify the Dissemination Agent in writing whether or not to report the event pursuant to subsection (f) below. For purposes of this Disclosure Agreement, “actual knowledge” of the occurrence of such Notice Events shall mean actual knowledge at the corporate trust office of the Dissemination Agent by an officer of the Dissemination Agent with responsibility for matters related to the administration of the Indenture. The

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Dissemination Agent is not responsible for determining the materiality of such Notice Event in notifying a Disclosure Representative of such Notice Event.

(d) Whenever the Museum obtains knowledge of the occurrence of a Notice Event under subsection (b) above, because of a notice from the Dissemination Agent pursuant to subsection (c) above or otherwise, the Museum shall as soon as possible determine if the occurrence of such Notice Event would be material under applicable federal securities laws.

(e) If the Museum has determined that knowledge of the occurrence of a Notice Event under subsection (b) would be material under applicable federal securities laws, the Museum shall promptly notify the Dissemination Agent in writing. Such notice shall instruct the Dissemination Agent to report the occurrence pursuant to subsection (f) below.

(f) If the Dissemination Agent has been instructed by the Museum to report the occurrence of a Notice Event, the Dissemination Agent shall file a notice of such occurrence with the Repository in electronic format, accompanied by such identifying information as is prescribed by the Repository, with a copy to each party to this Disclosure Agreement. Notwithstanding the foregoing, notice of Notice Events described in subsections (a)(vii) and (b)(iii) of this Section 4 need not be given under this subsection (f) any earlier than the notice, if any, of the underlying event is given to the Holders of affected Bonds pursuant to the Indenture.

SECTION 5. Termination of Reporting Obligation. The Museum’s and the Dissemination Agent’s respective obligations under this Disclosure Agreement shall terminate upon the legal defeasance, prior redemption or payment in full of all of the Bonds. If such termination occurs prior to the final maturity of the Bonds, the Museum shall give notice of such termination in the same manner as for a Notice Event under Section 4(f).

SECTION 6. Dissemination Agent. The Museum may, from time to time, appoint or engage a successor Dissemination Agent to assist it in carrying out their obligations under this Disclosure Agreement, and may discharge any such Dissemination Agent. Upon such discharge, however, a new Dissemination Agent must be appointed within sixty (60) days. The Dissemination Agent may resign by providing sixty (60) days written notice to the Museum. The Dissemination Agent shall not be responsible in any manner for the content of any notice or report prepared by the Museum pursuant to this Disclosure Agreement. If at any time there is not any other designated Dissemination Agent, the Trustee shall be the Dissemination Agent. The initial Dissemination Agent shall be U.S. Bank National Association.

SECTION 7. Amendment; Waiver. Notwithstanding any other provision of this Disclosure Agreement, the Museum may amend this Disclosure Agreement (and the Dissemination Agent shall agree to any amendment so requested by the Museum that does not adversely affect its rights or increase its duties under this Disclosure Agreement), and any provision of this Disclosure Agreement may be waived, provided that any of the following conditions is satisfied:

(a) If the amendment or waiver relates to the provisions of Sections 3(a), 4, or 5 herein, it may only be made in connection with a change in circumstances that arises from a change in legal requirements, change in law, or change in the identity, nature or status of an obligated person with respect to the Bonds, or the type of business conducted;

(b) The undertaking herein, as amended, or taking into account such waiver, would, in the opinion of nationally recognized bond counsel, have complied with the requirements of the Rule at the time of the original issuance of the Bonds, after taking into account any amendments or interpretations of the Rule, as well as any change in circumstances; or

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(c) The amendment or waiver either (i) is approved by the Holders of the Bonds in the same manner as provided in the Indenture for amendments to the Indenture with the consent of the Holders, or (ii) does not, in the opinion of nationally recognized bond counsel, materially impair the interests of the Holders or Beneficial Owners of the Bonds. The Museum also may amend or terminate this Disclosure Agreement without approval by the Holders of the Bonds to the extent permitted by rule, order or other official pronouncement of the SEC expressly permitting such action or approved by an opinion of nationally recognized bond counsel.

In the event of any amendment or waiver of a provision of this Disclosure Agreement, the Museum shall describe such amendment in the next Annual Report, and shall include, as applicable, a narrative explanation of the reason for the amendment or waiver and its impact on the type (or, in the case of a change of accounting principles, on the presentation) of financial information or operating data being presented by the Museum. In addition, if the amendment relates to the accounting principles to be followed in preparing financial statements, (i) notice of such change shall be given in the same manner as for a Notice Event under Section 4(f) herein, and (ii) the Annual Report for the year in which the change is made should present a comparison (in narrative form and also, if feasible, in quantitative form) between the financial statements as prepared on the basis of the new accounting principles and those prepared on the basis of the former accounting principles.

SECTION 8. Additional Information. Nothing in this Disclosure Agreement shall be deemed to prevent the Museum from disseminating any other information, using the means of dissemination set forth in this Disclosure Agreement or any other means of communication, or including any other information in any Annual Report, Compliance Report, Periodic Compliance Report or notice of occurrence of a Notice Event, in addition to that which is required by this Disclosure Agreement. If the Museum chooses to include any information in any Annual Report, Compliance Report, Periodic Compliance Report or notice of occurrence of a Notice Event, in addition to that which is specifically required by this Disclosure Agreement, the Museum shall have no obligation under this Disclosure Agreement to update such information or include it in any future Annual Report, Compliance Report, Periodic Compliance Report or notice of occurrence of a Notice Event.

SECTION 9. Default. In the event of a failure of the Museum to comply with any provision of this Disclosure Agreement, the Dissemination Agent, at the written request of the Underwriter or the Holders of at least 25% of aggregate principal amount of the Bonds then Outstanding, shall, but only to the extent indemnified to its satisfaction from any liability or expense, including fees of its attorneys, or any Holder or Beneficial Owner may, take such actions as may be necessary and appropriate, including seeking mandate or specific performance by court order, to cause the Museum to comply with its obligations under this Disclosure Agreement. A default under this Disclosure Agreement shall not be deemed an Event of Default under the Indenture, the Loan Agreement, or any related document, and the sole remedy under this Disclosure Agreement in the event of any failure of the Museum or the Dissemination Agent to comply with this Disclosure Agreement shall be an action to compel performance, and no Person shall be entitled to recover monetary damages under this Disclosure Agreement.

SECTION 10. Duties, Immunities and Liabilities of Dissemination Agent. Article 10 of the Indenture is hereby made applicable to this Disclosure Agreement as if this Disclosure Agreement were (solely for this purpose) contained in the Indenture; provided, however, that in the event of any inconsistency between the provisions of this Disclosure Agreement and the Indenture, the provisions of this Disclosure Agreement shall govern. The Dissemination Agent shall be entitled to the protections and limitations from liability afforded to the Trustee thereunder. The Dissemination Agent shall have only such duties as are specifically set forth in this Disclosure Agreement, and the Museum agrees, to the extent permitted by law, to indemnify and save the Dissemination Agent, or his or her officers, directors, employees and agents, harmless from and against any loss, expense and liabilities which he or she may incur arising out of or in the exercise or performance of his or her powers and duties hereunder, including the costs and expenses (including attorney’s fees) of defending against any claim of liability, but excluding liabilities due to the Dissemination Agent’s negligence or willful misconduct.

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The Dissemination Agent shall be paid compensation by the Museum for its services provided hereunder in accordance with its schedule of fees as agreed to between the Dissemination Agent and the Museum from time to time and all reasonable expenses, legal fees and advances made or incurred by the Dissemination Agent in the performance of its duties hereunder. The Dissemination Agent shall have no duty or obligation to review any information provided to it by the Museum hereunder and shall not be deemed to be acting in any fiduciary capacity for the Museum, Beneficial Owners or any other party. The Dissemination Agent may rely and shall be protected in acting or refraining from acting upon the directions from the Museum or an opinion of nationally recognized bond counsel. Any company succeeding to all or substantially all of the Dissemination Agent’s corporate trust business shall be the successor to the Dissemination Agent hereunder without the execution or filing of any paper or any further act. The obligations of the Museum under this Section shall survive resignation or removal of the Dissemination Agent and payment of the Bonds.

SECTION 11. Notices. Any notices or communications to or among any of the parties to this Disclosure Agreement may be given as follows:

To the Museum: Los Angeles County Museum of Art 5905 Wilshire Boulevard Los Angeles, CA 90036 Attention: Chief Financial Officer

To the Dissemination Agent: U.S. Bank National Association 633 West Fifth Street, 24th Floor Los Angeles, CA 90071 Attention: Global Corporate Trust Services

with copies to (if Dissemination Agent is no longer the Trustee): U.S. Bank National Association 633 West Fifth Street, 24th Floor Los Angeles, CA 90071 Attention: Global Corporate Trust Services

Any Person may, by written notice to the other Persons listed above, designate a different address or telephone number(s) to which subsequent notices or communications should be sent. Notices to the Trustee shall be effective on the actual receipt thereof.

SECTION 12. Beneficiaries. This Disclosure Agreement shall inure solely to the benefit of the Museum, the Dissemination Agent, the Underwriter, the Holders and Beneficial Owners from time to time of the Bonds, and shall create no rights in any other person or entity.

SECTION 13. Governing Law. THIS DISCLOSURE AGREEMENT SHALL BE GOVERNED BY THE LAWS OF THE STATE OF CALIFORNIA DETERMINED WITHOUT REGARD TO THE PRINCIPLES OF CONFLICT OF LAW; PROVIDED, HOWEVER, THAT THE INTERPRETATION OF THE RULE SHALL BE GOVERNED BY THE LAWS OF THE UNITED STATES.

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IN WITNESS WHEREOF, the Museum and the Dissemination Agent each have caused this Disclosure Agreement to be executed and attested by its proper officer thereunto duly authorized, as of the day and year first above written.

MUSEUM ASSOCIATES

By: Ann Rowland Chief Financial Officer

U.S. BANK NATIONAL ASSOCIATION, as Dissemination Agent

By: Authorized Officer

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EXHIBIT A

NOTICE TO REPOSITORY OF FAILURE TO FILE REPORT

Name of Obligated Persons: Museum Associates

Name of Issuer: California Infrastructure and Economic Development Bank

Name of Bond Issue: $______California Infrastructure and Economic Development Bank Refunding Revenue Bonds (Los Angeles County Museum of Art Project), Series 2016A

Date of Issuance: ______, 2016

NOTICE IS HEREBY GIVEN that MUSEUM ASSOCIATES, doing business as the Los Angeles County Museum of Art (the “Museum”), has not provided the [Annual] [Compliance] [Periodic Compliance] Report with respect to the above-named Bonds as required by Section 3(a) of the Continuing Disclosure Agreement, dated as of November 1, 2016, entered into by the Museum for the benefit of the Holders of the Bonds. The Museum anticipates that the [Annual] [Compliance] [Periodic Compliance] Report will be filed by ______, ____.

Dated: U.S. Bank National Association, as Dissemination Agent

By Title:______Phone:______

cc: Museum Associates U.S. Bank National Association Wells Fargo Bank, National Association

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APPENDIX F

BOOK-ENTRY ONLY SYSTEM

1. The Depository Trust Company (“DTC”), New York, NY, will act as securities depository for the 2016A Bonds (the “2016A Bonds”). The 2016A Bonds will be issued as fully-registered securities registered in the name of Cede & Co. (DTC’s partnership nominee) or such other name as may be requested by an authorized representative of DTC. One fully- registered 2016A Bond certificate will be issued for each issue of the 2016A Bonds, each in the aggregate principal amount of such issue, and will be deposited with DTC.

2. DTC, the world’s largest securities depository, is a limited-purpose trust company organized under the New York Banking Law, a “banking organization” within the meaning of the New York Banking Law, a member of the Federal Reserve System, a “clearing corporation” within the meaning of the New York Uniform Commercial Code, and a “clearing agency” registered pursuant to the provisions of Section 17A of the Securities Exchange Act of 1934. DTC holds and provides asset servicing for over 3.5 million issues of U.S. and non-U.S. equity issues, corporate and municipal debt issues, and money market instruments (from over 100 countries) that DTC’s participants (“Direct Participants”) deposit with DTC. DTC also facilitates the post-trade settlement among Direct Participants of sales and other securities transactions in deposited securities, through electronic computerized book-entry transfers and pledges between Direct Participants’ accounts. This eliminates the need for physical movement of securities certificates. Direct Participants include both U.S. and non-U.S. securities brokers and dealers, banks, trust companies, clearing corporations, and certain other organizations. DTC is a wholly-owned subsidiary of The Depository Trust & Clearing Corporation (“DTCC”). DTCC is the holding company for DTC, National Securities Clearing Corporation and Fixed Income Clearing Corporation, all of which are registered clearing agencies. DTCC is owned by the users of its regulated subsidiaries. Access to the DTC system is also available to others such as both U.S. and non-U.S. securities brokers and dealers, banks, trust companies, and clearing corporations that clear through or maintain a custodial relationship with a Direct Participant, either directly or indirectly (“Indirect Participants”). DTC has a Standard & Poor’s rating of AA+. The DTC Rules applicable to its Participants are on file with the Securities and Exchange Commission. More information about DTC can be found at nothing contained in such website is incorporated into this Official Statement.

3. Purchases of 2016A Bonds under the DTC system must be made by or through Direct Participants, which will receive a credit for the 2016A Bonds on DTC’s records. The ownership interest of each actual purchaser of each 2016A Bond (“Beneficial Owner”) is in turn to be recorded on the Direct and Indirect Participants’ records. Beneficial Owners will not receive written confirmation from DTC of their purchase. Beneficial Owners are, however, expected to receive written confirmations providing details of the transaction, as well as periodic statements of their holdings, from the Direct or Indirect Participant through which the Beneficial Owner entered into the transaction. Transfers of ownership interests in the 2016A Bonds are to be accomplished by entries made on the books of Direct and Indirect Participants acting on behalf of Beneficial Owners. Beneficial Owners will not receive certificates representing their ownership interests in 2016A Bonds, except in the event that use of the book-entry system for the 2016A Bonds is discontinued.

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4. To facilitate subsequent transfers, all 2016A Bonds deposited by Direct Participants with DTC are registered in the name of DTC’s partnership nominee, Cede & Co., or such other name as may be requested by an authorized representative of DTC. The deposit of 2016A Bonds with DTC and their registration in the name of Cede & Co. or such other DTC nominee do not effect any change in beneficial ownership. DTC has no knowledge of the actual Beneficial Owners of the 2016A Bonds; DTC’s records reflect only the identity of the Direct Participants to whose accounts such 2016A Bonds are credited, which may or may not be the Beneficial Owners. The Direct and Indirect Participants will remain responsible for keeping account of their holdings on behalf of their customers.

5. Conveyance of notices and other communications by DTC to Direct Participants, by Direct Participants to Indirect Participants, and by Direct Participants and Indirect Participants to Beneficial Owners will be governed by arrangements among them, subject to any statutory or regulatory requirements as may be in effect from time to time. Beneficial Owners of 2016A Bonds may wish to take certain steps to augment the transmission to them of notices of significant events with respect to the 2016A Bonds, such as redemptions, tenders, defaults, and proposed amendments to the 2016A Bonds documents. For example, Beneficial Owners of 2016A Bonds may wish to ascertain that the nominee holding the 2016A Bonds for their benefit has agreed to obtain and transmit notices to Beneficial Owners. In the alternative, Beneficial Owners may wish to provide their names and addresses to the registrar and request that copies of notices be provided directly to them.

6. Redemption notices shall be sent to DTC. If less than all of the 2016A Bonds within an issue are being redeemed, DTC’s practice is to determine by lot the amount of the interest of each Direct Participant in such issue to be redeemed.

7. Neither DTC nor Cede & Co. (nor any other DTC nominee) will consent or vote with respect to 2016A Bonds unless authorized by a Direct Participant in accordance with DTC’s MMI Procedures. Under its usual procedures, DTC mails an Omnibus Proxy to the issuer as soon as possible after the record date. The Omnibus Proxy assigns Cede & Co.’s consenting or voting rights to those Direct Participants to whose accounts 2016A Bonds are credited on the record date (identified in a listing attached to the Omnibus Proxy).

8. Redemption proceeds, distributions, and dividend payments on the 2016A Bonds will be made to Cede & Co., or such other nominee as may be requested by an authorized representative of DTC. DTC’s practice is to credit Direct Participants’ accounts upon DTC’s receipt of funds and corresponding detail information from the Infrastructure Bank or the Trustee, on payable date in accordance with their respective holdings shown on DTC’s records. Payments by Participants to Beneficial Owners will be governed by standing instructions and customary practices, as is the case with securities held for the accounts of customers in bearer form or registered in “street name,” and will be the responsibility of such Participant and not of DTC, the Trustee, the Infrastructure Bank or the Corporation, subject to any statutory or regulatory requirements as may be in effect from time to time. Payment of redemption proceeds, distributions, and dividend payments to Cede & Co. (or such other nominee as may be requested by an authorized representative of DTC) is the responsibility of the Infrastructure Bank or the Trustee, disbursement of such payments to Direct Participants will be the responsibility of DTC,

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and disbursement of such payments to the Beneficial Owners will be the responsibility of Direct and Indirect Participants.

9. A Beneficial Owner shall give notice to elect to have its 2016A Bonds purchased or tendered, through its Participant, to the Remarketing Agent, and shall effect delivery of such 2016A Bonds by causing the Direct Participant to transfer the Participant’s interest in the 2016A Bonds, on DTC’s records, to the Remarketing Agent. The requirement for physical delivery of 2016A Bonds in connection with an optional tender or a mandatory purchase will be deemed satisfied when the ownership rights in the 2016A Bonds are transferred by Direct Participants on DTC’s records and followed by a book-entry credit of tendered 2016A Bonds to Remarketing Agent’s DTC account.

10. DTC may discontinue providing its services as depository with respect to the 2016A Bonds `at any time by giving reasonable notice to the Infrastructure Bank or the Trustee. Under such circumstances, in the event that a successor depository is not obtained, 2016A Bond certificates are required to be printed and delivered.

11. Issuer may decide to discontinue use of the system of book-entry-only transfers through DTC (or a successor securities depository). In that event, Bond certificates will be printed and delivered to DTC.

12. The information in this section concerning DTC and DTC’s book-entry system has been obtained from sources that the Infrastructure Bank, the Corporation, the Trustee and the Underwriter believe to be reliable, but the Infrastructure Bank, the Corporation, the Trustee and the Underwriter take no responsibility for the accuracy thereof.

F-3 [THIS PAGE INTENTIONALLY LEFT BLANK] Jean-Baptiste-Siméon Chardin, Soap Bubbles, after 1739, Los Angeles County Museum of Art, gift of the Ahmanson Foundation

Unknown, Damascus Room, AD 1766–67/ AH 1180, Los Angeles County Museum of Art, Conservation of the room was organized in partnership with the King Abdulaziz Center for World Culture; additional conservation support was provided by the Friends of Heritage Preservation CALIFORNIA INFRASTRUCTURE AND ECONOMIC DEVELOPMENT BANK • REFUNDING REVENUE BONDS (LOS ANGELES COUNTY MUSEUM OF ART PROJECT), SERIES 2016A (INDEX MODE) Chris Burden, Urban Light, 2008, © Chris Burden Estate The Gordon Family Foundation’s Los Angeles County Museum of Art, gift to “Transformation: The LACMA Campaign”